Category: Company

Kenneth Allison Ltd v AE Limehouse Ltd: HL 1992

If one party, knowing that another wishes to serve process upon him, requests or authorises the other to do so in a particular way which is outside the Rules and the other does so, then, unless the Rules themselves prohibit consensual service, the party so served cannot be heard to say that the service was not valid. In the circumstances of the present case the validity of the service would have been affirmed under Montgomery. Subsequent changes in the Rules of the Supreme Court have not introduced a prohibition of consensual service outside the Rules.

Judges:

Lords Bridge, Lowry, Templeman and Jauncey

Citations:

[1992] 2 AC 105

Statutes:

Companies Act 1985 725(1)

Jurisdiction:

England and Wales

Citing:

Cited – Montgomery, Jones and Co v Liebenthal and Co 1898
The court rejected the argument that the rules of court prohibited an agreement between the parties to adopt an arrangement for service which did not comply with the rules. . .

Cited by:

Cited – Cranfield and Another v Bridgegrove Ltd; Claussen v Yeates etc CA 14-May-2003
In each case claims had been late in being served and extensions in time were sought and refused.
Held: The recent authorities were examined. The words ‘has been unable to serve’ in CPR 7.6(3)(a) include all cases where the court has failed to . .
Lists of cited by and citing cases may be incomplete.

Company, Litigation Practice

Updated: 17 May 2022; Ref: scu.182215

Advanced Technology Structures Ltd v Cray Technology Ltd: CA 22 Feb 1993

There should be no legal aid for a company’s nominee to bring what were, in effect, company proceedings. Parliament had deliberately excluded such assistance, and it should not be circumvented by the company assigning its rights in action to a nominee.

Citations:

Ind Summary 22-Feb-1993

Statutes:

Legal Aid Act 1974

Jurisdiction:

England and Wales

Legal Aid, Company

Updated: 17 May 2022; Ref: scu.77658

Affleck and Others v Newcastle Mind and Others: EAT 10 Mar 1999

EAT Employees of an unincorporated charitable association are employed by the management committee or other similar body within the association, and not by the members of the association at large. The employees have continuity of employment despite any change in the constitution of the committee. In practice such actions should be brought against a representative member or members of the committee. The case was remitted to the ET to hold a case management hearing to determine who should be the correct respondents.

Judges:

Morison J

Citations:

Gazette 11-Aug-1999, (1999) IRLR 405, [1999] UKEAT 537 – 98 – 1003, [1999] ICR 852

Links:

Bailii

Statutes:

Charities Act 1993 97(1), Employment Rights Act 1996 218(2)

Employment, Company, Charity

Updated: 17 May 2022; Ref: scu.77664

Re a company (No.00477 of 1986): 1986

Judges:

Hoffmann J

Citations:

[1986] BCLC 376

Cited by:

Cited – Re Haden Bill Electrical Ltd 1995
The petitioner had had in practice control of the company as chairman and though he owned only 25% of the shares. His own company loaned andpound;200,000 to the company as working capital. He complained that he had been removed as a director.
Mentioned – In the Matter of Pectel Limited; O’Neill; O’Neill v Phillips; Phillips and Pectel Limited CA 1-May-1997
The petitioners sought either the purchase of their shares, or the winding up of the company alleging unfair prejudice in the management of the company. The defendants argued that what was complained of did not fall within section 459 since it was . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 17 May 2022; Ref: scu.264073

Highland Engineering Ltd v Thomson: 1972

The liquidation of a company is treated as the equivalent as bankruptcy to prevent the hardship of a debtor who is also a creditor being forced to pay in full, when he will come in only as a creditor for a dividend for his debt as a result of ranking pari passu with the ordinary creditors.

Citations:

1972 SC 87

Jurisdiction:

England and Wales

Cited by:

Cited – Melville Dundas Ltd and others v George Wimpey UK Ltd and others HL 25-Apr-2007
The appellant sought an interim payment for works of construction undertaken for the respondents under a JCT contract. The respondents contended that, having terminated the contract on their receivership, the contract and Act meant that the interim . .
Lists of cited by and citing cases may be incomplete.

Scotland, Company, Insolvency

Updated: 17 May 2022; Ref: scu.251596

In re English, Scottish and Australian Chartered Bank: 1893

Vaughan Williams J said: ‘One knows that where there is a liquidation of one concern the general principle is – ascertain what is the domicile of the company in liquidation; let the court of the country of domicile act as the principal court to govern the liquidation; and let the other courts act as ancillary, as far as they can, to the principal liquidation. But although that is so, it has always been held that the desire to assist in the main liquidation – the desire to act as ancillary to the court where the main liquidation is going on – will not ever make the court give up the forensic rules which govern the conduct of its own liquidation.'(

Judges:

Vaughan Williams J

Citations:

[1893] 3 Ch 385

Cited by:

Cited – Cape Plc and Others, Re Companies Act 1985 ChD 16-Jun-2006
The court was asked to sanction a scheme of arrangements, and particularly to approve a proposed scheme which itself contained the power to make amendments to the scheme.
Held: The court did have power to sanction such a proposed scheme of . .
Cited – McGrath and others v Riddell and others HL 9-Apr-2008
(Orse In Re HIH Casualty and General Insurance Ltd)
HIH, an Australian Insurance company, became insolvent. An order was sought for the collection and remission of it assets in England under a letter of request from the Australia Court.
Lists of cited by and citing cases may be incomplete.

Company, Insolvency, International

Updated: 17 May 2022; Ref: scu.244199

The Balkis Consolidated Co Ltd v Tomkinson and Others: HL 1893

Tomkinson, a stockbroker, bought shares was registered by the company and received share certificates, and then sold them. The company found that the vendor to him had previously sold the shares to someone else who had been duly registered. The transfer to Tomkinson was a fraud, and the company refused to register Tomkinson’s purchasers. Tomkinson bought other shares in the market to make good his transactions with his purchasers and sued the company for his costs. Pollock B. gave judgment in Tomkinson’s favour, as did the Court of Appeal.
Held: All the elements necessary to creat an estoppel were present.
Lord Herschell LC described the effect of Bahia:- ‘The Court held that the giving of the certificate amounted to a statement by the company, intended by them to be acted upon by the purchasers of shares in the market, that the persons certified as the holders were entitled to the shares; and that the purchasers having acted on the statement by the company, they were estopped from denying its truth and liable to pay as damages the value of the shares.’ and ‘The learned counsel for the appellants impeached these decisions, as they were entitled to do in your Lordships’ House, and contended that they ought to be overruled. After carefully considering the able arguments urged at the Bar, I have no hesitation in expressing my concurrence in the law laid down by the Court of Queen’s Bench in Re Bahia and The San Francisco Railway Co.. The reasoning of Blackburn J in pronouncing judgment in that case appears to me to be sound and in accordance with the law, and I think it would be very mischievous to cast any doubt on the authority of that case.’
Lord Macnaghten:- ‘The general principle of law relating to estoppel by representation cannot be questioned. It is, as Lord Cranworth observed in the case of Jorden v. Money, before this House, a principle of universal application, that if a person makes a false representation to another and that other acts upon that false representation the person who has made it shall not afterwards be allowed to set up that what he said was false and to assert the real truth in place of the falsehood which has so misled the other. Then, after referring to some cases on the subject, his Lordship goes on to say: ‘I think the principle may be carried much further, because I think it is not necessary that the party making the representation should know that it was false, no fraud need have been intended at the time. But if the party has unwittingly misled another you must add that he has misled another under such circumstances that he had reasonable ground for supposing that the person whom he was misleading was to act upon what he was saying.’ Now there is no doubt, I think, that in this case the company must be taken to have known that the certificate was required by Tomkinson or his firm for the purpose of being acted upon.’

Judges:

Lord Herschell LC, Lord Macnaghten, Lord Field

Citations:

[1893] AC 396

Jurisdiction:

England and Wales

Citing:

Cited – Re The Bahia and San Francisco Railway Co Ltd v Trittin and others CA 1868
Miss Trittin left her share certificates with a broker. A forged transfer together with the certificates, was lodged with and with registered by the company. The new certificates certified that the named person as registered holder. He then sold . .

Cited by:

Cited – Cadbury Schweppes Plc and Another v Halifax Share Dealing Ltd and Another ChD 23-May-2006
Fraudsters had successfully contrived to sell shares of others, by re-registering the shares to new addresses and requesting new certificates. The question was which of the company, the company registrars and the stockbrokers should bear the loss. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 17 May 2022; Ref: scu.242172

Gradwell (PTY) v Rostra Printers Ltd: 1959

(South Africa) An offer was made of andpound;42,000 for the shares and the loan account that was then outstanding to the parent company less amounts owed to lenders on first mortgages. An analysis showed that andpound;40,258 was owed on the loan account and taking into account the higher securities the amount actually paid was less than that amount.
Held: The repayment of the loan account would help the purchaser to effect the apparent purchase but the repayment of the debt was held not to infringe the provisions of the section.

Judges:

Schriener J

Citations:

[1959] (4) SA 419

Statutes:

Companies Act 1926 86(2)

Cited by:

Cited – Anglo Petroleum Ltd v TFB (Mortgages) Ltd ChD 24-Feb-2006
The company sought to say that loans of 15 million pounds were void under s151 of the 1985 Act. It was said that the loans infringed the provisions of s151 being unlawful financial assistance.
Held: The loans were valid: ‘if it is lawful for a . .
Cited – Armour Hick Northern Ltd v Whitehouse; Armour Trust Ltd ChD 1980
A vendor company was assisted by financial assistance given by a subsidiary.
Held: The use of money by a company to repay its existing indebtedness would not normally fall within the concept of the company giving financial assistance to . .
Lists of cited by and citing cases may be incomplete.

Company, Commonwealth

Updated: 17 May 2022; Ref: scu.238728

Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd: 1924

The court looked at personal responsibility of the directors of a company for torts committed by the company: ‘Prima facie a managing director is not liable for tortious acts done by servants of the company unless he himself is privy to the acts, that is to say unless he ordered or procured the acts to be done. . . I conceive that express direction is not necessary. If the directors themselves directed or procured the commission of the act they would be liable in whatever sense they did so, whether expressly or impliedly.’

Judges:

Atkin LJ

Citations:

[1924] 1 KB 1

Jurisdiction:

England and Wales

Cited by:

Cited – MCA Records Inc and Another v Charly Records Ltd and others (No 5) CA 5-Oct-2001
The court discussed the personal liability of a director for torts committed by his company: ‘i) a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the . .
Cited – Campbell v Gordon SC 6-Jul-2016
The employee was injured at work, but in a way excluded from the employers insurance cover. He now sought to make the sole company director liable, hoping in term to take action against the director’s insurance brokers for negligence, the director . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 17 May 2022; Ref: scu.230355

Herbert Berry Associates Ltd v Inland Revenue Commissioners: CA 2 Jan 1976

The word ‘proceedings’ meant the ‘invocation of the jurisdiction of a court by process other than writ’.

Judges:

Russell LJ

Citations:

[1977] 1 WLR 617, [1977] 3 All ER 729, 121 SJ 252

Statutes:

Companies Act 1948

Jurisdiction:

England and Wales

Citing:

At ChD – Herbert Berry Associates Ltd v Inland Revenue Commissioners ChD 1976
The collector of taxes distrained on the goods of the company under section 61 TMA 1970 for unpaid taxes and the company entered into a walking possession agreement. Before the collector had sold the goods, and completed the distress, the company . .
Cited – Valensi v British Radio Corporation CA 1973
The court considered the test for deciding what degree of knowledge, skill and perseverance the skilled man was assumed to have as a ground for revocation of a patent on the associated basis. There had been a mistake in the specification of the . .

Cited by:

At CA – Herbert Berry Associates Ltd v Inland Revenue Commissioners; re Herbert BerrySP, Regina (on The Application of) v The Lord Chancellor HL 1977
The principle to the effect that the court should exercise its discretion to restrain a distress levied by a landlord before the commencement of a winding-up only where there were special circumstances rendering it inequitable that he should be . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 17 May 2022; Ref: scu.228992

In re Overseas Aviation Engineering(GB) Ltd: CA 1963

A charging order on land under section 35(1) of the 1956 Act obtained to enforce a judgment debt was a form of ‘execution’ for the purposes of section 325 CA 1948. Lord Denning MR: ‘The word ‘execution’ is not defined in the Act. It is, of course, a word familiar to lawyers. ‘Execution’ means, quite simply, the process for enforcing or giving effect to the judgment of the court: and it is ‘completed’ when the judgment creditor gets the money or other thing awarded to him by the judgment. That this is the meaning is seen by reference to that valuable old book Rastill Termes de la Ley, where it is stated: ‘Execution is, where Judgment is given in any Action, that the plaintiff shall recover the land, debt, or damages, as the case is; and when any Writ is awarded to put him in Possession, or to do any other thing whereby the plaintiff should the better be satisfied his debt or damages, that is called a writ of execution; and when he heath the possession of the land, or is paid the debt or damages, or heath the body of the defendant awarded to prison, then he heath execution.’ And the same meaning is to be found in Blackman v. Fysh,[1892] 3 Ch 209,217 (C.A.) when Kekewich J. said that execution means the ‘process of law for the enforcement of a judgment creditor’s right and in order to give effect to that right.’ In cases when execution was had by means of a common law writ, such as fieri facias or elegit, it was legal execution: when it was had by means of an equitable remedy, such as the appointment of a receiver, then it was equitable execution. But in either case it was ‘execution’ because it was the process for enforcing or giving effect to the judgment of the court.’
Harman LJ: ‘Now what is execution but the enforcement of a judgment or order? In my judgment, the new remedy given by section 35 is merely an alternative method of execution against the debtor’s land, replacing the old writ’.

Judges:

Lord Denning MR, Harman LJ

Citations:

[1963] I Ch 24

Statutes:

Administration of Justice Act 1956 35(1), Companies Act 1948 325

Jurisdiction:

England and Wales

Cited by:

Cited – Brenner v Revenue and Customs; In re Modern Jet Support Centre Ltd ChD 21-Jul-2005
The court was asked whether the process of distraint against goods for unpaid tax under section 61 of the 1970 Act is an ‘execution’ within section 183 of the 1986 Act which applies where a creditor has issued, but not completed, execution against . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 17 May 2022; Ref: scu.228985

In re Saul Harrison and Sons PLC: CA 1994

The plaintiffs claimed that the directors had either exceeded their powers or had exercised their powers for some illegitimate or ulterior purpose.
Held: Where the claim of unfairness was not reasonably arguable, the court could exercise its jurisdiction to strike out a petition presented under section 459. Having observed that petitions under section 459 are ‘notoriously burdensome’ and can themselves be used as a means of oppression, the court scrutinised the allegations of unfairness with care to see if an arguable case could be made out. The claim for relief stood or fell by whether allegations of bad faith by the directors could be made out. It concluded that they were unarguable.

Citations:

[1994] BCC 475

Statutes:

Companies Act 1985 459 461

Jurisdiction:

England and Wales

Cited by:

Cited – Guinness Peat Group Plc v British Land Company Plc and others CA 18-Dec-1998
The claimant, a minority shareholder, had said that the defendant had acted prejudicially in transferring the company’s only substantial asset to another company. The respondent said that since the shares had always been of nil value they could not . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 17 May 2022; Ref: scu.228983

Herbert Berry Associates Ltd v Inland Revenue Commissioners: ChD 1976

The collector of taxes distrained on the goods of the company under section 61 TMA 1970 for unpaid taxes and the company entered into a walking possession agreement. Before the collector had sold the goods, and completed the distress, the company entered into voluntary winding-up and a liquidator was appointed. There was a deficiency of andpound;91,000, with preferential creditors of andpound;31,000 and assets of andpound;25,000 including the distrained goods. The goods were later sold with the consent of the collector for andpound;10,500. The collector claimed payment in full of the unpaid tax from the proceeds of sale of the goods. The liquidator contended that the Crown could not assert its right to distrain in order to be paid in full, but by section 319(5) CA 1948 (which concerned preferential payments; the Crown’s claim for unpaid tax was a preferential debt) was only entitled to rank pari passu with other preferential creditors. It was argued that since the Crown was distraining for a preferential debt, it was bound by section 319(5) which provided for pari passu distribution among preferential creditors.
Held: The collector was entitled to distrain by taking possession prior to the date of the winding-up and then to complete it unless there were special reasons rendering it inequitable for him to do so. No distinction was to be drawn in this context between distraint by a landlord and distraint by the collector. The effect of section 319(5) ranking preferential debts pari passu was not a special circumstance which rendered it inequitable for the distress to be completed. The completion of the distress would not be incompatible with the apparently provisions of CA 1948. CA 1948 distinguishes between distress, whether by a landlord or the Crown, and execution. S228 refers to the four remedies of attachment, sequestration, distress and execution. S371(7) deals with distress by landlords or other person and s325 deals with execution or attachment. Templeman said: ‘In my judgment, it is not possible to extract distress by the Crown from distress in general in section 319 and include it somehow or other in section 325, which is not dealing with distress.’
The court rejected the argument that the collector had abandoned or prejudiced his right of distress by accepting a walking possession agreement: ‘In my judgment, the property of a company, which is directed by section 302 [now section 107 IA 1986] to be applied for the benefit of the creditors subject to preferential payments, is the property subject to such rights as were exercised prior to the date of the winding-up. At the date of the winding-up in the present case, the goods were in the possession of the collector, and he had power to sell them in order to discharge unpaid taxes. The property of the company at the date of the winding-up consisted only of its right to any surplus realised on that sale.’

Judges:

Templeman J

Citations:

[1976] 3 All ER 207, [1976] 1 WLR 783, 120 SJ 538

Statutes:

Taxes Management Act 1970 61, Companies Act 1948 319(5)

Jurisdiction:

England and Wales

Citing:

Followed – Re Roundwood Colliery Co 1897
The court discussed the interplay of a distress by the landlord and the later insolvency of the tenant. . .
Not followed – MacGregor v Clamp and Son 1914
A distress for taxes was ‘really by way of execution’. . .

Cited by:

At ChD – Herbert Berry Associates Ltd v Inland Revenue Commissioners; re Herbert BerrySP, Regina (on The Application of) v The Lord Chancellor HL 1977
The principle to the effect that the court should exercise its discretion to restrain a distress levied by a landlord before the commencement of a winding-up only where there were special circumstances rendering it inequitable that he should be . .
Cited – Brenner v Revenue and Customs; In re Modern Jet Support Centre Ltd ChD 21-Jul-2005
The court was asked whether the process of distraint against goods for unpaid tax under section 61 of the 1970 Act is an ‘execution’ within section 183 of the 1986 Act which applies where a creditor has issued, but not completed, execution against . .
At ChD – Herbert Berry Associates Ltd v Inland Revenue Commissioners CA 2-Jan-1976
The word ‘proceedings’ meant the ‘invocation of the jurisdiction of a court by process other than writ’. . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 17 May 2022; Ref: scu.228989

Advanced Technology Structures Ltd v Cray Valley Products Ltd: CA 1993

An assignment of the cause of action should not be recognised or given effect because it was a ‘sham’.
Hirst LJ said that the assignment was: ‘a mere stratagem or device to enable the company to carry on the proceedings, with the support of Mr. Pratt’s [the assignee] legal aid, which manifestly neither they nor he could afford to do otherwise. . . The sole purpose of the assignment was therefore to tap the resources of the legal aid fund, which are available to Mr. Pratt only because of his own impecuniosity.’ To give effect to the assignment would conflict with ‘the underlying policy of the Act,’ which was that ‘legal aid should not be available to corporate plaintiffs.’
Leggatt LJ said: ‘When Parliament decided that legal aid should not be available to corporations, it cannot have been its intention that a corporation should be able to nominate an employee, to whom it has assigned a right of action, to conduct the litigation on its behalf with the assistance of legal aid for which he was eligible.’

Judges:

Hirst LJ, Leggatt LJ, Glidewell LJ

Citations:

[1993] BCLC 723

Jurisdiction:

England and Wales

Cited by:

Distinguished – Norglen Ltd (In Liquidation) v Reeds Rains Prudential Ltd and Others; Etc CA 6-Dec-1995
An assignment of a cause of action in order to be eligible to apply for Legal Aid is not against public policy. An assignment of a cause of action was not invalid solely on the ground that its purpose was to enable the action to be prosecuted on . .
Wrongly decided – Norglen Ltd (In Liquidation) v Reeds Rains Prudential Ltd and Others; Circuit Systems Ltd (In Liquidation) and Another v Zuken-Redac HL 1-Dec-1997
An assignment of a cause of action by a company in liquidation was valid, even though the dominant purpose was to avoid having to give security for costs, and to get legal aid. In dismissing the argument that the transactions were a device to defeat . .
Lists of cited by and citing cases may be incomplete.

Legal Aid, Company

Updated: 16 May 2022; Ref: scu.223194

In re Maxwell Communications plc: ChD 1993

It was argued that the pari passu distribution of assets among unsecured creditors was a general rule of insolvency law from which it was not possible to contract out, even to one’s own disadvantage, particularly by analogy with cases on set-off in insolvency.
Held: This was not the law. There was no reason why a particular creditor should not waive his right to prove altogether, or save to the extent of assets remaining after another creditor is satisfied, and that he could do this either in the insolvency or in advance of it.
Vinelott J explained his decision in In re British and Commonwealth plc (No 3): ‘I took the view that to the extent that the assets of the company were insufficient to meet the liabilities to unsecured creditors, other than the holders of the loan stock, the holders of the loan stock had no interest in the assets of the company and no right to vote at a meeting of unsecured creditors, that in the very unlikely, indeed, merely theoretical possibility that the realisation of the company’s assets would suffice to meet the claims of the scheme creditors, the rights of the holders of the unsecured loan stock would be unaffected by the scheme; and that in these circumstances the liquidator [sic – he must have meant administrator] could properly call a meeting of the scheme creditors alone, and if the scheme of arrangement was approved, apply to the court to sanction the scheme.’

Judges:

Vinelott J

Citations:

[1993] 1 WLR 1402

Jurisdiction:

England and Wales

Citing:

Cited – In re British and Commonwealth plc (No 3) ChD 1992
Bonds were subordinated in a winding up, and the company was in administration in which the administrators were proposing a scheme of arrangement. The judge was invited to apply the Tea Corporation principles in order to arrive at a conclusion that . .

Cited by:

Cited – Mytravel Group Plc, Re Companies Act 1985 ChD 24-Nov-2004
The company sought approval of a proposed reconstruction under the section.
Held: Approval could not be given. To count as a reconstruction two principal qualities were required. The business carried on should be the same or similar, and those . .
Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 16 May 2022; Ref: scu.220257

In re British and Commonwealth plc (No 3): ChD 1992

Bonds were subordinated in a winding up, and the company was in administration in which the administrators were proposing a scheme of arrangement. The judge was invited to apply the Tea Corporation principles in order to arrive at a conclusion that the bondholders would recover nothing and so would not have the right ot vote at a meeting to consider the relevant scheme. He drew attention to the fact that in the Tea Corporation case there was a finding that the assets would not suffice to meet the claims of shareholders and that there was a concession to that effect in Oceanic. He went on to say: ‘In the instant case the trustee does not concede that the proceeds of realisation of the company’s assets, whether in the course of administration or in the course of winding up, would inevitably be insufficient to meet the claims of scheme creditors . . .The evidence relied on by the trustee is also criticised on what appears to me to be cogent grounds in evidence filed on behalf of he administrators. The claim that there is even a remote possibility that sufficient might be realised in the course of administration or in winding up to meet the claims of the scheme creditors in full seems to me to verge on the fanciful. However, in the absence of any concession, I cannot on this application proceed on the assumption that there is no possibility that the claims of the scheme creditors will be met in full.’ However, despite his unwillingness to proceed on that assumption, the learned judge still came to the conclusion that the bondholders’ consent was not required, and at court concluded that the bondholders had no interest in the assets of the company: ‘It follows to the extent that the assets of the company are insufficient to meet the claims of scheme creditors, the holders of CULS have no interest in the assets of the company.’

Judges:

Vinelott J

Citations:

[1992] BCC 58, [1992] BCLC 322, [1992] 1 WLR 672

Jurisdiction:

England and Wales

Citing:

Cited – Re Tea Corporation CA 1904
A scheme was proposed in a liquidation and a meeting of, inter alia, ordinary shareholders was proposed, who were to be given shares in the new company in place of their shares in the old, so to that extent they were affected by the scheme. The . .

Cited by:

Cited – Mytravel Group Plc, Re Companies Act 1985 ChD 24-Nov-2004
The company sought approval of a proposed reconstruction under the section.
Held: Approval could not be given. To count as a reconstruction two principal qualities were required. The business carried on should be the same or similar, and those . .
Cited – In re Maxwell Communications plc ChD 1993
It was argued that the pari passu distribution of assets among unsecured creditors was a general rule of insolvency law from which it was not possible to contract out, even to one’s own disadvantage, particularly by analogy with cases on set-off in . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 16 May 2022; Ref: scu.220256

Bottin (International) Investments Ltd v Venson Group Plcgrant Scriven Clive Lawson Smith: CA 22 Oct 2004

Under a share purchase agreement, ‘notice of the claim had to be made in writing ‘specifying such details of the event or circumstances giving rise to such claim as are available to the investor and an estimate (if capable of preparation by the investor) of the total amount of the warrantor’s liabilities therefor claimed.’

Judges:

Lord Justice Peter Gibson

Citations:

[2003] EWCA Civ 1368

Jurisdiction:

England and Wales

Citing:

Appeal from – Bottin (International) Investments Limited v Venson Group Plc Grant Scriven Clive Lawson Smith ChD 3-Feb-2004
. .
Cited – Thomas Witter v TBP Industries Ltd ChD 15-Jul-1994
An award of damages for misrepresentation required that there had at some time been a right of rescission, not necessarily a continuing right to rescind.
An acknowledgement of non-reliance clause has become a common part of modern commercial . .

Cited by:

Cited – Forrest and others v Glasser and Another CA 31-Jul-2006
The claimants appealed a preliminary decision against them as to whether they had correctly served a sufficient notice of their intention to make a claim in a commercial investment syndicate agreement.
Held: The claimants’ solicitor had . .
Lists of cited by and citing cases may be incomplete.

Company, Contract

Updated: 16 May 2022; Ref: scu.218851

Regina v Secretary of State Employment, ex parte Equal Opportunities Commission and Another: CA 1993

Citations:

[1993] 1 WLR 872, [1993] ICR 251

Jurisdiction:

England and Wales

Cited by:

Appeal from – Regina v Secretary of State Employment, ex parte Equal Opportunities Commission and Another HL 4-Mar-1994
The Equal Opportunities Commission sought judicial review to test whether English employment law was in breach of EC law where threshold conditionsions for part time workers to make unfair dismissal and redundancy law claims were discriminatory.
Cited – Archer and Watkins v Registrar General and Another PC 24-Jun-2004
(The Bahamas) The claimants challenged the way the respondent had allowed a company to alter its register of shareholders to their detriment.
Held: The responsibility for maintaining the share register rested on the company and its officers, . .
Lists of cited by and citing cases may be incomplete.

Company, Discrimination

Updated: 16 May 2022; Ref: scu.198488

Harlow and Another v Loveday and Another; In re Hill and Tyler Ltd (in administration): ChD 28 May 2004

The administrators challenged the validity of a charge which appeared to have been given by the company to secure the purchase of shares in the company.
Held: The loan itself did not amount to assistance, but the charge did. It was indirect financial assistance. The company officers had not complied with the necessary whitewash procedures to validate the transaction. The declaration made by the officers was incorrect, but viewed as a whole and in the light of the possible severe consequences to the officers, it could be viewed to be correct. Even so, it was unenforceable because it contravened section 151, in which case the availability of the whitewash procedure whether successfully implemented or not, did not rescue the charge. It was unenforcable.

Citations:

Times 11-Jun-2004, [2005] 1 BCLC 41

Statutes:

Companies Act 1985 155 156 157 158

Jurisdiction:

England and Wales

Citing:

Cited – Central and Eastern Trust Co v Irving Oil Ltd 1980
(Canada) Indirect financial assistance in purchase of company’s shares. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 16 May 2022; Ref: scu.198128

Van Gestel v Can: CA 7 Aug 1987

Directors have a positive duty to disclose their pre-existing breaches of fiduciary duty.

Citations:

1987 CLY 454, Times 07-Aug-1987

Jurisdiction:

England and Wales

Cited by:

Cited – Tesco Stores Limited v Pook, Pook, Universal Projects (UK) Limited ChD 14-Apr-2003
A trustee in breach of his duty has a duty to disclose that breach. It was alleged that the defendants, including a director of the claimant, had submitted false invoices to the claimants, and purchased property with the resulting profits.
Lists of cited by and citing cases may be incomplete.

Company

Updated: 16 May 2022; Ref: scu.194879

Secretary of State for Trade and Industry v Ettinger: 1993

The court discussed the standards required of company directors. ‘Those who take advantage of limited liability must conduct their companies with due regard to the ordinary standards of commercial morality. They must also be punctilious in observing the safeguards laid down by Parliament for the benefit of others who have dealings with their companies. They must maintain proper books of account and prepare annual accounts; they must file their accounts and returns promptly; and they must fully and frankly disclose information about deficiencies in accordance with the statutory provisions.’ and ‘The seriousness with which such conduct is to be viewed is shown by the provisions of the Disqualification Act itself. The extent to which a director is responsible for any failure to comply with the statutory provisions regarding accounting records and the preparation of annual accounts is one of the matters to which the court is required to have regard in determining unfitness to be concerned in the management of a company. Those who persistently fail to discharge their statutory obligations in this respect can expect to be disqualified, for an appropriate period of time, from using limited liability as one of the tools of their trade.’

Judges:

Nicholls V-C

Citations:

[1993] BCLC 896

Statutes:

Company Directors Disqualification Act 1985

Jurisdiction:

England and Wales

Cited by:

Cited – The Secretary of State for Trade and Industry v Goldberg, Mcavoy ChD 26-Nov-2003
The Secretary of State sought a disqualification order. The director argued that one shoul not be made in the absence of some breach of legal duty, some dishonesty should be shown.
Held: The answer was a mixture of fact and law. A breach of . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 16 May 2022; Ref: scu.188620

Akerhielm v De Mare: PC 1959

A company prospectus contained the following: ‘About a third of the capital has already been subscribed in Denmark.’ Though the directors believed this to be true, it was not true at the time the prospectus was issued.
Held: The statement was not fraudulent having been made with an honest belief in its truth. When a party has been acquitted of fraud the decision in his favour should not be displaced except on the clearest grounds.
Lord Jenkins said: ‘their Lordships are satisfied that this is not one of those exceptional cases in which an appellate court is justified in reversing the decision of a judge at first instance when the decision under review is founded upon the judge’s opinion of the credibility of a witness formed after seeing and hearing him give his evidence. Their Lordships can hardly imagine a case in which the credibility of a witness could be more vital than a case like the present where the claim is based on deceit, and the witness in question is one of the defendants charged with deceit. Their Lordships would add that they accept, and would apply in the present case, the principle that where a defendant has been acquitted of fraud in a court of first instance the decision in his favour should not be displaced on appeal except on the clearest grounds.’ and ‘The question is not whether the defendant in any given case honestly believed the representation to be true in the sense assigned to it by the court on an objective consideration of its truth or falsity, but whether he honestly believed the representation to be true in the sense in which he understood it albeit erroneously when it was made.’

Judges:

Lord Jenkins

Citations:

[1959] AC 789, [1959] 3 All ER 485

Jurisdiction:

Commonwealth

Citing:

Cited – Glasier v Rolb 1889
A finding by a judge that a party is innocent of fraud should only reluctantly be disturbed. . .
Cited – SS Hontestroom v SS Sagaporack HL 1927
The court discussed the weight to be given by an appellate court to findings of fact made by the court of first instance.
Held: Not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial . .
Cited – Watt (or Thomas) v Thomas HL 1947
When Scots Appellate Court may set decision aside
The House considered when it was appropriate for an appellate court in Scotland to set aside the judgment at first instance.
Lord Thankerton said: ‘(1) Where a question of fact has been tried by a judge without a jury, and there is no question . .
Cited – Yuill v Yuill CA 1944
Appellate Court’s Caution in Reassessing Facts
The Court of Appeal was invited to reverse the decision of the judge at first instance to accept the evidence of the petitioner (no evidence having been called by the respondent).
Held: The court considered the caution needed when overturning . .
Cited – Benmax v Austin Motor Co Ltd HL 1955
Except for cases which are expressly limited to questions of law, an appellant is entitled to appeal from the Court of Session to the House against any finding, whether it be a finding of law, a finding of fact or a finding involving both law and . .

Cited by:

Cited – Assicurazioni Generali Spa v Arab Insurance Group (BSC) CA 13-Nov-2002
Rehearing/Review – Little Difference on Appeal
The appellant asked the Court to reverse a decision on the facts reached in the lower court.
Held: The appeal failed (Majority decision). The court’s approach should be the same whether the case was dealt with as a rehearing or as a review. . .
Cited – The Ikarian Reefer CA 1995
The court reversed the decision of the trial judge that the plaintiff insured shipowners had not deliberately scuttled their vessel or cast her away: ‘(1) The burden of showing that the trial Judge was wrong lies on the appellant . . (2) When . .
Applied – Ryan and Another v Strickland Jarvis PC 29-Jun-2005
(Antigua and Barbuda) The parties disputed the effect of a joint venture of the sale of an additional range of cars through a car showroom. One party said the other had misrepresented thir contractual status, and the other said that an approach had . .
Cited – Yaqoob and Another v Royal Insurance (Uk) Ltd CA 25-May-2006
Appeal against refusal of insurance company to pay on fire loss claim. Building entered by intruders with key.
Held: ‘If after hearing the evidence the judge had been left in the position that he could not be satisfied, on the balance of . .
Cited – Crystal Palace FC (2000) Ltd v Dowie QBD 14-Jun-2007
The parties had agreed a compromise on the leaving of the defendant as manager. The club now said that the agreement had been obtained by fraudulent misrepresentation. He had been released but had said he had not had contact with another London club . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Torts – Other, Company

Updated: 16 May 2022; Ref: scu.187260

Langley Holdings v Seakens: QBD 19 Oct 2000

The claimant sought recovery from one of two partners in a solicitors’ firm of solicitors of sums paid to the firm and misappropriated by the partner, who had conspired with others to offer a fraudulent investment. The claimant admitted that the promised return was incredible. The funds were received on an undertaking that they would not be used absent documentation. That undertaking was broken. It was in a solicitor’s ordinary course of business to hold money for his client. Nevertheless the defendant contended that the ‘underlying transaction’ had been ‘extraordinary’ and ‘outlandish’ and no reasonable person could have acted in it; and that the claimant could have had no genuine belief.
Held: The claimant was so dazzled by the promised profits that they had not asked whether there was a genuine investment. The recipt of the funds could not have been in the ordinary course of the business of a solicitor, and it followed that the partner was not liable.

Citations:

Unreported, 19 October 2000

Statutes:

Partnership Act 1890 10

Jurisdiction:

England and Wales

Cited by:

Cited – J J Coughlan Ltd v Ruparelia and others CA 21-Jul-2003
The defendant firm of solicitors had acted in a matter involving a fraud. One partner was involved in the fraud. The claimants sought to recover from the partnership.
Held: ‘The issue is not how the transaction ought properly to be described, . .
Lists of cited by and citing cases may be incomplete.

Legal Professions, Company

Updated: 16 May 2022; Ref: scu.186089

Gamlen Chemical Co (UK) Ltd v Rochem Ltd: CA 4 Dec 1979

Solicitors accepted instructions against a promise of sums on account of costs. After non-payment they began to apply to be removed from the record. The new solicitors sought transfer of the solicitors file, and obtained an order to that effect subject to an undertaking to maintain its condition and to respect the solicitors’ lien. The first firm appealed.
Held: The practice embodied in the order was appropriate. Where a solicitor discharged himself, a mandatory order should be available. Legal professional privilege will not be upheld if the relevant document came into being as a step in a criminal or illegal proceeding.
Templeman LJ explained why the normal response of the court, when faced with a solicitor who has discharged himself in the course of litigation, even where the solicitor is entitled to discharge himself, is to order the solicitor to hand over the client’s papers to the client’s new solicitors, subject to an undertaking from the new solicitors to preserve the lien of the original solicitor. This course is usually adopted ‘in order to save the client’s litigation from catastrophe’.
Goff LJ stated: ‘the court must in every case, of course, be satisfied that what is prima facie proved really is dishonest, and not merely disreputable or a failure to maintain good ethical standards and must bear in mind that legal professional privilege is a very necessary thing and is not lightly to be overthrown, but on the other hand, the interests of victims of fraud must not be overlooked. Each case depends on its own facts.’

Judges:

Goff and Templeman LJJ

Citations:

[1980] 1 WLR 614, [1980] 1 All ER 1049, [1983] RPC 1

Jurisdiction:

England and Wales

Citing:

Approved – Heslop v Metcalfe 1837
The court referred to the practice that where a solicitor removed himself from a case, an order should be made for the transfer of his file of papers: ‘Undoubtedly, that doctrine may expose a solicitor to a very great inconvenience and hardship, if, . .
Cited – Hughes v Hughes 1958
Hodson LJ said: ‘There is no doubt that a solicitor who is discharged by his client during an action otherwise than for misconduct can retain any papers in the cause in his possession until the costs have been paid . . This rule applies, as the . .
Cited – Robins v Goldingham 1872
Where a solicitor discharges himself in the course of an action, he should be subject to an order for the transfer of the papers subject to an order respecting his lien for any unpaid costs. . .
Appeal from (Dicta approved) – Gamlen Chemical Co (UK) Ltd v Rochem Ltd 1983
Goulding J said: ‘For servants during their employment and in breach of their contractual duty of fidelity to their master to engage in a scheme, secretly using their master’s time and money, to take the master’s customers and employees and make . .

Cited by:

Cited – Ismail and Another v Richards Butler (A Firm) QBD 23-Feb-1996
A solicitor’s lien on papers can be set aside by the court to allow litigation to proceed, where there was a continuing retainer, and the lien was with regard to concluded matters. However, the release of the papers would reduce the value of the . .
Cited – French v Carter Lemon Camerons Llp CA 3-Sep-2012
The appellant had instructed the defendant solicitors in litigation. On beginning to act in person she sought an order to require the solicitors to deliver the case papers to her. They asserted a lien on them until their account was paid. She now . .
Cited – Walsh Automation (Europe) Ltd v Bridgeman and others QBD 4-Jul-2002
Appeal from refusal of order for disclosure of legal advice given to a party. It was alleged that the defendant’s suggested attempt at fraud by means of a document drawn up by the solicitors would be revealed by disclosure of the advice given. . .
Cited – X v Y Ltd (Practice and Procedure – Disclosure) EAT 9-Aug-2018
Iniquity surpasses legal advice privilege
PRACTICE AND PROCEDURE – Disclosure
PRACTICE AND PROCEDURE – Striking-out/dismissal
An Employment Judge struck out paragraphs of the Claimant’s claim as they depended on an email in respect of which legal advice privilege was claimed. . .
Lists of cited by and citing cases may be incomplete.

Company, Legal Professions, Evidence

Updated: 16 May 2022; Ref: scu.182182

Davis v Davis: 1894

Conversion of partnership property. The correct approach is not to conclude that there is a partnership simply because one of the presumptions arises on the facts and is not rebutted by something else; instead, all the facts must be considered, not just those giving rise to the presumption, and, without giving undue weight to any of them, an inference must be drawn from the whole.

Citations:

[1894] 1 ChD 393

Jurisdiction:

England and Wales

Cited by:

Cited – Robinson v Reeve ChD 14-Jun-2002
The parties were brother and sister, owning and renting properties. The issue was whether they were in partnership, and to what extent properties in one name were held in trust for the two.
Held: A partnership was not to be inferred solely . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 16 May 2022; Ref: scu.181203

Welsby v Brelec Installations Limited: ChD 2001

The CVA provided for the payment by the company of contributions to the supervisors for distribution to creditors. The company went on into a creditors’ voluntary liquidation.
Held: The sums held by the supervisors in trust for the CVA creditors remained subject to that trust notwithstanding the liquidation. Blackburne J said as to a CVA: ‘ . . the effect of the creditors’ approval of the debtors’ proposal is, as is well-established, to give rise to a species of statutory contract between the creditors bound by the arrangement on the one hand and the debtor on the other.’ and ‘An arrangement is usually put together in some haste. Mod~flcations to it are frequently made at the statutory meeting of creditors with little time to reflect on how they relate to the other terms of the debtor’s proposal. Quite often, as this case demonstrates, the resulting terms are clumsily worded. The arrangement ought therefore to be construed in a practical fashion. Otherwise there is a risk that careless drafting coupled with a too-literal approach to its construction will serve to frustrate rather than achieve the purpose of the arrangement.’

Judges:

Blackburne J

Citations:

[2001] BCC 421, [2002] 2 BCLC 576

Jurisdiction:

England and Wales

Cited by:

Cited – Wright and Another (Liquidators of SHB Realisations Ltd) v The Prudential Assurance Company Ltd ChD 6-Mar-2018
IVA is a special form of contract
Liquidators asked the court whether sums sought by the insolvent company’s landlords were payable and or provable. Under an IVA, the copany had been paying reduced rents, but the arrangement document provided that the full rents would be restored on . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 16 May 2022; Ref: scu.605851

Nant-y-glo and Blaina Ironworks Co v Grave: 1878

Shares in a company had been given by a promoter to the defendant to induce him to become a director.
Held: They belonged to the company.

Judges:

Sir James Bacon V-C

Citations:

(1878) 12 Ch D 738

Cited by:

Cited – FHR European Ventures Llp and Others v Cedar Capital Partners Llc SC 16-Jul-2014
Approprietary remedy against Fraudulent Agent
The Court was asked whether a bribe or secret commission received by an agent is held by the agent on trust for his principal, or whether the principal merely has a claim for equitable compensation in a sum equal to the value of the bribe or . .
Lists of cited by and citing cases may be incomplete.

Company, Equity

Updated: 16 May 2022; Ref: scu.551506

Re Union Accident Insurance Co Ltd: ChD 1972

A provisional liquidator cannot be appointed on a baseless petition. There are two conditions to be met. The first was that the petition must disclose a prima facie case, the second was that there were circumstances that require that a provisional liquidator ought to be appointed. The circumstances were not limited. The fact that the petition was not opposed was one of them. In this case, a prima facie case was established because it was shown that the company could not meet the level of solvency required of insurance companies by statute. The circumstances here required that a provisional liquidator ought to be appointed, and it was in the interest of the public in the fact that sums retained by brokers amounting to a large sum of andpound;300,000 be collected from them. A provisional liquidator was correctly appointed.
It is inappropriate to limit the exercise of the power to appoint a provisional liquidator by restricting it to fixed categories or classes of circumstances or fact, as commercial affairs are complex and circumstances will vary greatly.
Nevertheless, before a winding up order is made, a company’s Board of directors retained certain residuary powers which included the authority to instruct solicitors and counsels to oppose the petition, notwithstanding the appointment of provisional liquidators to the company.
Plowman J explained the twofold approach that he proposed to adopt: ‘There are two matters though, which seem to be relevant for me to consider. The first is whether the department has made out a good prima facie case for a winding-up on the hearing of the petition. Any views I express about the matter now are of course provisional only because I am not trying the petition at the present time. If the department has not made out a good prima facie case for a winding-up order then clearly I think it would not be right to appoint a provisional liquidator. On the other hand, if the department has made out a good prima facie case for a winding-up order then the second matter for my consideration arises, namely, whether in the circumstances of this case it is right that a provisional liquidator should have been appointed.’

Judges:

Plowman J

Citations:

[1972] 1 All ER 1105, [1972] 1 WLR 640

Jurisdiction:

England and Wales

Cited by:

Cited – Revenue and Customs v Rochdale Drinks Distributors Ltd CA 13-Oct-2011
The revenue appealed against refusal of its petition for the winding up of the company for non-payment of a VAT assessment. The company said that the assessment was disputed. The revenue said that the company had been run for the purpose of . .
Cited – Revenue and Customs v SED Essex Ltd ChD 14-Jun-2013
Liquidator confirmed despite VAT challege
The Revenue sought the winding up of the company for non-payment of substantial arrears of VAT. The revenue had declined to allow VAT input claims. The company said that the petition was wrong since the debt was genuinely disputed.
Held: The . .
Cited – HM Secretary of State for Business Enterprise and Regulatory Reform, Re Order To Wind Up UK Bankruptcy Ltd SCS 31-Mar-2009
Outer House – Court of Session – . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 15 May 2022; Ref: scu.510891

In re West Coast Gold Fields Ltd: 1905

The shareholder was bankrupt, but the company, in which he owned shares on which the capital remined unpaid, was solvent and in voluntary liquidation.
Held: The payment-up of the shares in full was a condition precedent to any participation in the distribution of surplus assets. Buckley J said: ‘The right view is that the person liable as contributory must discharge himself in that character before he can set up that, as a creditor, he is entitled to receive anything, and a fortiori, as it seems to me, before he can set up that, as a contributory, he is entitled to receive anything.’

Judges:

Buckley J

Citations:

[1905] 1 Ch 597

Cited by:

Cited – In re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 15 May 2022; Ref: scu.449850

Re Finelist Limited: ChD 2004

Laddie J discussed the seriousness of the consequences of a director’s disqualification, saying: ‘It is the seriousness of these consequences and the fact that such orders are sought by the [Secretary of State] on behalf of the public which should inform the way in which the proceedings are commenced and how the [Secretary of State] carries out her functions.’ He discussed also the possibility that ‘failure of the [Secretary of State] to act fairly in preparing her case against [the director], including failing to give him an opportunity to respond to her allegations, could amount to an abuse of process.’

Judges:

Laddie J

Citations:

[2004] BCC 877

Jurisdiction:

England and Wales

Cited by:

Cited – Secretary of State for Business, Innovation and Skills v Doffman and Another ChD 11-Oct-2010
The defendants applied for directors’ disqualification proceedings for the claim to be struck out or dismissed on the ground that the respondent had breached their rights to a fair trial under Article 6 of the European Convention on Human Rights . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 15 May 2022; Ref: scu.444674

Muir v City of Glasgow Bank: HL 1878

The bank had failed as the result of a fraud perpertrated by its directors. The liability of the members was unlimited. Lord President Inglis said: ‘Persons becoming partners of a joint stock company, such as the Western Bank, and being registered as such, cannot escape from the full liabilities of partners either in a question with creditors of the company or in the way of relief to their copartners, by reason of the fact that they hold their stock of the company in trust for others, and are described as trustees in the register of partners and the other books and papers of the company.’

Judges:

Lord President Inglis

Citations:

(1878) 6 R 392

Jurisdiction:

Scotland

Cited by:

Applied – Elliot v Mackie and Sons Ltd; Elliot v Whyte 1935
Executors of the deceased founder of the company had executed transfers of shares in favour of two of their number and a third party to qualify them as directors of the company under the articles, the trustees and executors wanting adequate . .
Mentioned – Farstad Supply As v Enviroco Ltd SC 6-Apr-2011
The court was asked by the parties to a charterparty whether one of them is an ‘Affiliate’ of the charterer for the purposes of provisions in a charterparty by which both the owner and the charterer agreed to indemnify and hold each other harmless . .
Lists of cited by and citing cases may be incomplete.

Scotland, Company

Updated: 15 May 2022; Ref: scu.432931

Great Northern Railway Co v Cole Co-Operative Society: 1896

A business created under the Industrial and Provident Societies Acts is not a company in any standard legal sense. Vaughan Williams J distinguished Standard Manufacturing on the basis that the Court of Appeal was not excluding companies generally from these Acts of Parliament, but excluding only companies for whom provision had been made for the registration of the mortgages. The question of whether the Bills of Sale Acts applied to other companies where no provision had been made for registration, was deliberately left open.

Judges:

Vaughan Williams J

Citations:

[1896] 1 Ch 187

Statutes:

Bills of Sale Act 1878 6 8

Citing:

Distinguished – In re Standard Manufacturing Co CA 1891
Company debentures were expressly excepted from the operation of the Bills of Sales Act (1878) Amendment Act 1882 by section 17 of that Act because they were debentures ‘issued by any mortgage, loan, or other incorporated company’. Nor were . .

Cited by:

Cited – Online Catering Ltd v Acton and Another CA 10-Feb-2010
The claimant agreed for the defendant to repair its fleet of vehicles. The defendant, having fees outstanding, entered the claimants’ premises and removed vehicles saying falsely that they were to be repaired, and then refused to return them. The . .
Cited – N V Slavenburg’s Bank v Intercontinental Natural Resources Ltd ChD 1980
The Bermudan company defendant had assigned stocks as a security. The security was not registered, and nor did the company have any registration within the UK. It was not the practice of the Registrar of Companies to accept particulars of charges . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 15 May 2022; Ref: scu.414891

The Queen v The Londonderry And Coleraine Railway Company: 1849

Under the Companies’ Clauses Act, 8 and 9 Vict. c. 16, s. 22, a call of money on shares is made, in point of time, when the resolution to call is passed, not when notice of the call is given to the shareholder. Therefore, by sect. 16, a shareholder cannot legally transfer his share after the passing of such resolution, without paying the call, though he has executed a deed of transfer before notice of the call was served upon him.

Citations:

[1849] EngR 89, (1849) 13 QB 998, (1849) 116 ER 1544

Links:

Commonlii

Jurisdiction:

England and Wales

Company

Updated: 15 May 2022; Ref: scu.298394

The Queen v The Derbyshire, Staffordshire And Worcestershire Junction Railway: 31 May 1854

Under sect. 36 of The Companies Clauses Consolidation Act, 1845 (8 and! 9 Vict. c. 16), a party who has recovered judgment against a company is not precluded from assuring execution aquarist the shareholders who have riot paid up for their shares, though lands of the company have been delivered on elegit, if the proceeds of the lands be insufficient to satisfy the debt. – Therefore, in such a case, a mandamus issued commanding the Company to give the creditor inspection of the register of shareholders.

Citations:

[1854] EngR 564, (1854) 3 El and Bl 784, (1854) 118 ER 1335

Links:

Commonlii

Jurisdiction:

England and Wales

Company

Updated: 15 May 2022; Ref: scu.293421

Bluck, On Behalf and Co v Mallalue: 15 Feb 1859

The directors of a loan company were empowered to borrow money, but clirectors who were ‘concerned in or participated in the profits of any contract with the company, vacated their offices. The chairman lent money to the company at high interest, which was afterwards lent out at a profit. Held, that this was warranted by the rules.
Discounting the bills of a director is a lending of money within a clause prohibiting loans to shareholders
Decree to compel directors in a joint stock company to take shares subscribed for by them, and which were transferable, refused.

Citations:

[1859] EngR 343, (1859) 27 Beav 398, (1859) 54 ER 156

Links:

Commonlii

Jurisdiction:

England and Wales

Company

Updated: 15 May 2022; Ref: scu.287695

Giles v Rhind: ChD 24 Jul 2001

The company had suffered losses after an alleged breach of confidence by a director. The applicant sought to recover his losses as a shareholder, after the company became unable or unwilling itself to pursue an action to recover the losses it had suffered. The court held that the shareholder’s action must fail. The losses he sought, including the devaluation of his shares in the company and otherwise, were all derived from the losses which the company had itself suffered. Where those losses might have been made good if the company itself had pursued the case, the shareholder was not able himself to pursue the loss, applying Johnson v Gore Wood and Co.

Judges:

Blackburne J

Citations:

Times 06-Aug-2001, Gazette 06-Sep-2001, [2003] Ch 618

Jurisdiction:

England and Wales

Citing:

Cited – Johnson v Gore Wood and Co HL 14-Dec-2000
Shareholder May Sue for Additional Personal Losses
A company brought a claim of negligence against its solicitors, and, after that claim was settled, the company’s owner brought a separate claim in respect of the same subject-matter.
Held: It need not be an abuse of the court for a shareholder . .

Cited by:

Appeal from – Giles v Rhind CA 17-Oct-2002
An action by a company under a shareholder’s agreement was compromised. The other shareholder now sought to commence an action against the party in breach for his personal losses. The defendant argued that the company’s compromise was binding also . .
Cited – Gardner v Parker CA 25-Jun-2004
The court considered the extent to which a shareholder or creditor of a company who has suffered loss, as the result of a breach of duties owed both to him and the company by a defendant, is nonetheless debarred from recovering that loss, because . .
Cited – Shahar v Tsitsekkos and others ChD 17-Nov-2004
The defendant wished to make a claim against another party outside the jurisdiction and was granted permission to serve documents which were headed ‘defence and counterclaim’. The proposed defendant argued that such a document could be served in . .
Lists of cited by and citing cases may be incomplete.

Damages, Company

Updated: 15 May 2022; Ref: scu.159493

Richardson v Pitt-Stanley: CA 11 Aug 1994

The directors of a company did not become personally liable for damages, only because they had failed to insure the company for liability for personal injuries suffered as a result of the company’s activities, even though they may be criminally liable. (Sir John Megaw dissenting)
Sir John Megaw said: ‘With great respect, I find it difficult to believe that the parliamentary draftsman would have intended to make provision that there should be no civil right or remedy by using the formula of section 1 of the Employers’ Liability (Compulsory Insurance) Act 1969, ‘shall insure’, followed by section 5 ‘shall be guilty of an offence’; as contrasted with the formula of declaring an act or omission to be unlawful and then separately providing a criminal penalty for the breach.’

Judges:

Russell and Stuart-Smith LJJ, Sir John Megaw

Citations:

Independent 06-Sep-1994, Times 11-Aug-1994, [1995] QB 123

Statutes:

Employers’ Liability (Compulsory Insurance) Act 1969 1(1)

Jurisdiction:

England and Wales

Cited by:

Cited – Campbell v Peter Gordon Joiners Ltd and Forsyth, The Liquidator Thereof and Gordon SCS 3-Feb-2015
(Extra Division – Inner House) The pursuer was injured working as an apprentice for a company operated by its sole director, the second defender. Though he was an apprentice joiner, the company’s insurance excluded (in breach of the 1969 Act) injury . .
Cited – Campbell v Gordon SC 6-Jul-2016
The employee was injured at work, but in a way excluded from the employers insurance cover. He now sought to make the sole company director liable, hoping in term to take action against the director’s insurance brokers for negligence, the director . .
Lists of cited by and citing cases may be incomplete.

Company, Personal Injury

Updated: 15 May 2022; Ref: scu.88776

Conti v Ueberseebank Ag: IHCS 15 Mar 2000

A former director of a company could apply to have it restored to the register of companies even though he had played a significant part in the decisions to wind the company up in the first place. The time for testing whether he had an appropriate grievance which might found an application was at the time of the application being made and not at any earlier time.

Citations:

Times 15-Mar-2000

Statutes:

Companies Act 1985 653

Citing:

Appeal from – Fabrizio Conti v Ueberseebank A G OHCS 2-Oct-1998
(Scotland) A company director and shareholder who had agreed with board’s decision to apply for company to be wound up could not later apply to set aside that application on the grounds that he was a person ‘aggrieved’ by that decision. . .

Cited by:

Appealed to – Fabrizio Conti v Ueberseebank A G OHCS 2-Oct-1998
(Scotland) A company director and shareholder who had agreed with board’s decision to apply for company to be wound up could not later apply to set aside that application on the grounds that he was a person ‘aggrieved’ by that decision. . .
Lists of cited by and citing cases may be incomplete.

Company, Scotland

Updated: 15 May 2022; Ref: scu.79468

Tay Bok Choon v Tahanson Sdn Bhd: PC 1987

A participant in the company was given the right to be involved in the management until a change should become necessary for some other reason.
In cases of fraud, direct evidence may be rare and circumstantial evidence may have to suffice,
Lord Templeman said: ‘In civil proceedings the trial judge has no power to dictate to a litigant what evidence he should tender. In winding up proceedings the trial judge cannot refuse to read affidavits which have been properly sworn, filed and produced to him unless some opposing party has applied for the attendance for cross-examination of the deponent and that application has been granted and the deponent does not attend. The court cannot give a direction about evidence unless one of the litigants desires such direction to be made. Of course a judge may indicate to a petitioner that unless he calls oral evidence or applies to cross-examine the deponents of the opposition so as to prove a disputed fact, his petition is likely to fail. The judge may equally indicate to a respondent that unless he calls oral evidence or applies to cross-examine the petitioner’s deponents for the purposes of disproving an allegation made by the petitioner, then the petitioner is likely to succeed. At the end of the day the judge must decide the petition on the evidence before him. If allegations are made in affidavits by the petitioner and those allegations are credibly denied by the respondent’s affidavits, then in the absence of oral evidence or cross-examination, the judge must ignore the disputed allegations. The judge must then decide the fate of the petition by consideration of the undisputed facts.

Judges:

Lord Templeman

Citations:

[1987] 1 WLR 413, [1987] BCLC 472

Cited by:

Cited – Re Haden Bill Electrical Ltd 1995
The petitioner had had in practice control of the company as chairman and though he owned only 25% of the shares. His own company loaned andpound;200,000 to the company as working capital. He complained that he had been removed as a director.
Mentioned – In the Matter of Pectel Limited; O’Neill; O’Neill v Phillips; Phillips and Pectel Limited CA 1-May-1997
The petitioners sought either the purchase of their shares, or the winding up of the company alleging unfair prejudice in the management of the company. The defendants argued that what was complained of did not fall within section 459 since it was . .
Lists of cited by and citing cases may be incomplete.

Company, Commonwealth, Evidence, Litigation Practice

Updated: 15 May 2022; Ref: scu.264074

Pettyt v Janeson: 1819

Judges:

Sir John Leach, Vice-Chancellor

Citations:

(1819) 6 Madd 146

Jurisdiction:

England and Wales

Cited by:

Followed – Hunter v Dowling CA 1893
The articles of partnership between the parties required an annual account. A retiring or deceased partner was to be paid out ‘at the amount standing to his credit in the last balance sheet which shall have been signed previously to the date of such . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 14 May 2022; Ref: scu.238861

In re Charles and Co Ltd: 1935

A court granting an order extending the period for registration of a company charge may allow a further delay before registration to allow for objections from other creditors.

Judges:

Clauson J

Citations:

[1935] WN 15

Cited by:

Cited – Ali v Top Marques Car Rental Ltd and Others ChD 3-Feb-2006
The claimant had sought an extension of time for registration of his charge over the company’s assets. The judge granted the request but delayed its implementation for 14 days to allow the company or other creditors to object. Companies House . .
Explained – In re Braemar Investments ChD 1998
. .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 14 May 2022; Ref: scu.238395

Re Sussex Brick Co Ltd: 1904

The court should not generally order rectification of a company’s registers where this would prejudice third party rights. Vaughan Williams LJ said: ‘I do not mean for a moment to suggest that any one is entitled to such an order ex debito justitiae; it is a matter in the discretion of the judge, and there might be cases in which the judge, although he considered such an order essential to completely establishing the rights of the applicant, might refuse to do so because he thought it would work injustice to other members of the company. If I thought here that such an order would work injustice to other persons, especially to persons who are not in any way bound by the mistake of the company, I should feel considerable hesitation in making the order . . ‘
Stirling LJ: ‘I may point out that the power . . is not imperative. All it says is that the Court ‘may’ in a proper case make an order for rectification. Therefore the Court has full discretion to deal with every particular case which comes before it in such a way as may do complete justice . . ‘

Judges:

Vaughan Williams LJ, Stirling LJ

Citations:

[1904] 1 Ch 598

Cited by:

Cited – Smith v Charles Building Services Ltd and Another CA 19-Jan-2006
An application was made for the rectfication of the company’s registers.
Held: The claimant’s name had been improperly removed from the register, and therefore he was prima facie entitled to a rectification. However even if rectified, the . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 14 May 2022; Ref: scu.237741

Re Hydrodam (Corby) Ltd: 1994

Millett J described a de facto director as: ‘a person who assumes to act as a director. He is held out as a director by the company, claims and purports to be a director, although never actually or validly appointed as such. To establish that a person was a de facto director of a company it is necessary to plead and prove that he undertook functions in relation to the company which could probably be discharged only by a director. It is not sufficient to show that he was concerned in the management of a company’s affairs or undertook tasks in relation to its business which can probably be performed by a manager below board level.’

Judges:

Millett J

Citations:

[1994] BCC 161

Cited by:

Cited – Secretary of State for Trade and Industry v Elms 16-Jan-1997
‘At the forefront of the test I think I have to go on to consider by way of further analysis both what Millett J meant by ‘functions properly discharged only by a director’, and Mr Lloyd QC meant by ‘on an equal footing’. As to one it seems to me . .
Cited – Secretary of State for Trade and Industry v Tjolle and Others ChD 9-May-1997
Delay and the probable short period of disqualification are proper reasons for Secretary of State to consider discontinuing proceedings. As to whether a person ‘assumes to act as a director’: ‘It may be difficult to postulate any one decisive test. . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.230268

Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing Co Inc: 1978

(Federal Court of Appeal of Canada) The court described the question whether, and if so in what circumstances, a director should be liable with the company as a joint tortfeasor as ‘a very difficult question of policy.’ Mr Justice Le Dain: ‘On the one hand, there is the principle that an incorporated company is separate and distinct in law from its shareholders, directors and officers, and it is in the interests of the commercial purposes served by the incorporated enterprise that they should as a general rule enjoy the benefit of limited liability afforded by incorporation. On the other hand, there is the principle that everyone should be answerable for his tortious acts.’

Judges:

Mr Justice Le Dain

Citations:

(1978) 89 DLR (3d) 195

Jurisdiction:

Canada

Cited by:

Cited – MCA Records Inc and Another v Charly Records Ltd and others (No 5) CA 5-Oct-2001
The court discussed the personal liability of a director for torts committed by his company: ‘i) a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.230360

Rodriguez v Speyer Brothers: 1919

The courts will not give assistance to proceedings which, if successful would lead to the enrichment of an alien enemy, and therefore would tend to provide his country with the sinews of war. An enemy alien has no standing to commence proceedings here. However, because the rule is one of public policy, it does not apply if the case discloses no mischief against which the rule was intended to guard.
Lord Finlay LC said: ‘When a debt due to the firm is got in no partner has any share or definite interest in that debt; his right is merely to have the money so received applied, together with the other assets, in discharging the liabilities of the firm, and to receive his share of any surplus there may be when the liquidation has been completed.’

Judges:

Viscount Haldane

Citations:

[1919] AC 59

Jurisdiction:

England and Wales

Cited by:

Cited – Amin v Brown ChD 27-Jul-2005
The defendant raised as a preliminary point the question of whether the claimant, an Iraqi, was an enemy alien, and therefore debarred from bringing proceedings to recover.
Held: Under modern law it could not be a requirement that a state of . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Company

Updated: 13 May 2022; Ref: scu.230003

De Renzy v De Renzy: 1924

(New Zealand) Brothers were partners. One died and the other, wrongly believing himself entitled to do so under an agreement to purchase his brother’s share, made a payment to his brother’s estate of the purchase price for that share which he thought to be due and thereafter treated the business as his own.
Held: There was no agreement to purchase. The deceased brother’s estate was entitled to the profits attributable to the share of the deceased brother in the partnership assets, but that the size of the share was to be reduced by the reason of the payment made.

Judges:

Stringer J

Citations:

[1924] NZLR 1065

Cited by:

Cited – Hardip Singh Gill v Kulbir Singh Sandhu ChD 26-Jan-2005
The partnership had been dissolved. It had involved conversion of a property to be run as a nursing home. The claimant was to manage the home, and the profits would be used first to pay him a salary, and then to be divided equally. When wound up . .
Lists of cited by and citing cases may be incomplete.

Commonwealth, Company

Updated: 13 May 2022; Ref: scu.222923

Daimler Co Ltd v Continental Tyre and Rubber Company (Great Britain) Limited: HL 1916

The House considered the meaning of ‘control’ in the context of companies. Lord Parker of Waddington said: ‘I think that the analogy is to be found in control, an idea which, if not very familiar in law, is of capital importance and is very well understood in commerce and finance. The acts of a company’s organs, its directors, managers, secretary, and so forth, functioning within the scope of their authority, are the company’s acts and may invest it definitively with enemy character. It seems to me that similarly the character of those who can make and unmake those officers, dictate their conduct mediately or immediately, prescribe their duties and call them to account, may also be material in a question of the enemy character of the company. If not definite and conclusive, it must at least be prima facie relevant, as raising a presumption that those who are purporting to act in the name of the company are, in fact, under the control of those whom it is their interest to satisfy.’

Judges:

Lord Parker of Waddington

Citations:

[1916] 2 AC 307

Cited by:

Cited – Bermuda Cablevision Limited and others v Colica Trust Company Limited PC 6-Oct-1997
(Bermuda) An alternative remedy to winding up is available to a shareholder where oppressive conduct is alleged, though the main thrust is that the conduct is unlawful. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.221574

Formby v Baker: 1903

The term ‘successors and assigns’ was used in case of covenants given by limited companies to ensure that the covenants were not limited to being personal obligations of the company.

Citations:

[1903] 2 Ch 539

Cited by:

Cited – University of East London Higher Education Corporation v London Borough of Barking and Dagenham and others ChD 9-Dec-2004
The University wanted to sell land for development free of restrictive covenants. It had previously been in the ownership of both the servient and dominant land in respect of a restrictive covenant. The Borough contended that the restrictive . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.220704

Aerators Ltd v Tollitt: 1902

When looking at whether a proposed company name was too similar to an existing one, the registrar could look to the sort of name chosen by the existing company.

Citations:

[1902] 2 Ch 319

Jurisdiction:

England and Wales

Company

Updated: 13 May 2022; Ref: scu.219199

Forster v Hale: 1800

An oral partnership agreement can be valid and if the partnership assets include land, then the land is held on a constructive trust for the partnership.

Citations:

(1800) 5 Ves Jr 308

Cited by:

Cited – Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd, Targetfollow Group Ltd ChD 9-Nov-2004
The defendant entered into an agreement for lease, incurring substantial obligations. When it could not meet them it sought assistance from the claimant, who now claimed to have an interest in a joint venture. The draft documentation originally . .
Lists of cited by and citing cases may be incomplete.

Land, Company

Updated: 13 May 2022; Ref: scu.219436

Moriarty v Regent’s Garage and Engineering Co Ltd: KBD 1921

A company director sought payment of his directors fees of andpound;150 per annum where during the course of the year he had ceased to be a director. There was no allegation of impropriety on his part. The company’s articles provided that the directors should be entitled to fees of a certain amount per annum. The need for apportionment arose from the fact that the director in question had retired by agreement in the course of the year.
Held: Directors’ fees constituted ‘salaries’ for the purposes of the 1870 Act. The court could use the 1870 Act to apportion the payment due to him. The ‘Act, which was passed to remedy a grievance, undoubtedly affected common law rights and obligations.’ . . ‘the attitude in the minds of the tribunals was to regard the Apportionment Act as a wrongful encroachment upon common law proprieties. I take exactly the opposite view. The Act remedied a grave injustice; it is a remedial Act, and the inclination of every tribunal should be to extend rather than to restrict its operation.’ ( McCardie J). As to whether a salaried person would be entitled to apportionment if he had been dismissed for misconduct, the judges disagreed.
Lush J said: ‘I should hesitate to agree with the suggestion that he can claim in such circumstances. It is quite true that the salary is to be considered as accruing from day to day, and it is quite true that a dismissed servant is entitled to salary that has already accrued at all events up to the date of the act of dishonesty, but the Act does not say that in such a case, or for all purposes, the salary shall be deemed to have accrued from day to day; it only says that it shall be considered as accruing from day to day. That provision was merely inserted to facilitate or to extend the apportionment which the legislature was saying should be made. The sum cannot logically be apportioned unless it is treated as accruing from day to day; it is only for that purpose that it is deemed to accrue from day to day. If something has happened during the service which forfeits the right to the salary it may well be that the servant cannot take advantage of the Act . . ‘ McCardie: ‘I do not fail to see the wide stretch of the results which follow from the decision we are now giving, and one of the questions that must arise in the future is whether or not the Apportionment Act will destroy the operation of the rule under which a servant who is dismissed for misconduct loses the whole of the money accruing to him, although he is entitled to get the money that has actually accrued . . I express no opinion on this very serious question, which does not arise for direct decision. It may well be said that no servant dismissed for misconduct can rely on that misconduct as a basis for invoking a remedial Act . . On the other hand I am not altogether satisfied as to the justice of denying the benefit of the Apportionment Act to a man who has been guilty of misconduct. Suppose a salary is payable half yearly to a man, and suppose he has fulfilled his duties with absolute propriety up to the last week; that he then commits an act which justifies his master in dismissing him. Upon the law as it stands the man gets nothing for his five and a half months’ work. Is it right that he should be deprived of remuneration for five and a half months’ work because during the last fortnight he has done something for which he has been dismissed? I express no opinion upon that point. Ere long it must arise for decision. ‘

Judges:

Lush J, McCardie J

Citations:

[1921] 1 KB 423

Statutes:

Apportionment Act 1870

Citing:

Appealed to – Moriarty v Regent’s Garage and Engineering Co Ltd CA 2-Jan-1921
Whilst the point was obiter in this case: ‘ . . it seems to me that there is no decision binding on the Court of Appeal as to whether directors’ fees are salary within the Apportionment Act in the case where the agreement . . is simply for payment . .

Cited by:

Cited – Fassihim, Liddiardrams, International Ltd, Isograph Ltd v Item Software (UK) Ltd CA 30-Sep-2004
The first defendant (F) had been employed by a company involved in a distribution agreement. He had sought to set up a competing arrangement whilst a director of the claimant, and diverted a contract to his new company.
Held: A company . .
Appeal from – Moriarty v Regent’s Garage and Engineering Co Ltd CA 2-Jan-1921
Whilst the point was obiter in this case: ‘ . . it seems to me that there is no decision binding on the Court of Appeal as to whether directors’ fees are salary within the Apportionment Act in the case where the agreement . . is simply for payment . .
Approved (Obiter) – Re William Porter and Co Ltd 1937
. .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.215865

Mutual Life Insurance Co of New York v Rank Organisation Ltd: 1985

The duty of loyalty of a director to his company is the ‘time-honoured’ rule. The directors are under a duty to act fairly as between different shareholders. This applies not just where there were different classes of shareholder but also where shareholders of the same class had differing interests.
The directors’ power of allotment was limited by two considerations only: ‘First, the time-honoured rule that the directors’ powers are to be exercised in good faith in the interests of the company, and secondly, that they must be exercised fairly as between different shareholders. I doubt whether it is possible to formulate either of the stipulations more precisely because of the infinity of circumstances in which they may fall to be applied.’

Judges:

Goulding J

Citations:

[1985] BCLC 11

Jurisdiction:

England and Wales

Cited by:

Cited – Fassihim, Liddiardrams, International Ltd, Isograph Ltd v Item Software (UK) Ltd CA 30-Sep-2004
The first defendant (F) had been employed by a company involved in a distribution agreement. He had sought to set up a competing arrangement whilst a director of the claimant, and diverted a contract to his new company.
Held: A company . .
Cited – Kohli v Lit and Others ChD 13-Nov-2009
The claimant asserted that the other shareholders had acted in a manner unfairly prejudicial to her within the company.
Held: The claimant was allowed to bring in without prejudice correspondence to contradict evidence by the defendant which . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.215870

In re Anglo American Insurance Ltd: 2001

Judges:

Neuberger J

Citations:

[2001] BCLC 755

Jurisdiction:

England and Wales

Cited by:

Cited – In re Telewest Communications Plc ChD 26-Apr-2004
A scheme of arrangement had been proposed. The creditor complained that in providing for payment in a currency other than that agreed, it had been prejudiced.
Held: The provision in the scheme did purport to alter the claimant’s rights. . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 13 May 2022; Ref: scu.197909

Re Thorn EMI: 1989

Judges:

Harman J

Citations:

[1989] BCLC 612

Jurisdiction:

England and Wales

Cited by:

Cited – Winpar Holdings Ltd v Ransomes Plc CA 1-Jul-1999
The company had been given permission to cancel a share premium account. Changes in circumstances brought the matter back for reconsideration. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.195961

Re Chatterley-Whitfield Collieries: 1948

The colliery had been nationalised at a time of very low interest rates. The court discussed the ‘reasonable expectations’ of preferential shareholders.

Judges:

Asquith LJ

Citations:

[1948] 2 All ER 593

Jurisdiction:

England and Wales

Cited by:

Cited – Winpar Holdings Ltd v Ransomes Plc CA 1-Jul-1999
The company had been given permission to cancel a share premium account. Changes in circumstances brought the matter back for reconsideration. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.195956

Re Ratners Group: ChD 1988

The court set out the considerations for protecting preference shareholders on the compulsory repurchase of their shares. In this case reductions of share premium account was considered in order to facilitate the writing-off of goodwill: ‘the Court will not do anything in vain’

Judges:

Harman J

Citations:

[1988] BCLC 685

Jurisdiction:

England and Wales

Cited by:

Cited – Winpar Holdings Ltd v Ransomes Plc CA 1-Jul-1999
The company had been given permission to cancel a share premium account. Changes in circumstances brought the matter back for reconsideration. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.195960

Re Saltdean Estates: 1968

Preference shareholders objected to the compulsory payment-off of their shares at par.

Citations:

[1968] 1 WLR 583

Jurisdiction:

England and Wales

Cited by:

Cited – Winpar Holdings Ltd v Ransomes Plc CA 1-Jul-1999
The company had been given permission to cancel a share premium account. Changes in circumstances brought the matter back for reconsideration. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.195957

Newhart Developments Ltd v Co-operative Commercial Bank Ltd: CA 1978

The appointment of administrative receivers of a company with a view to realisation of certain charged assets did not deprive the directors of their duties and power to take other proceedings which did not impinge on the activities of the receivers. Even though the directors may lack power to dispose of an asset they might remain under a duty to exploit it for the benefit of the company.

Citations:

[1978] QB 814

Jurisdiction:

England and Wales

Cited by:

Cited – GE Capital Commercial Finance Ltd v Sutton; Anglo Pteroleum Ltd v Same CA 19-Mar-2004
The administrative receivers of a company sought production of documents from the company’s solicitors.
Held: The receiver was tasked to deal with the realisation of the mortgaged property, and it could not use its powers to seek to obtain . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.195579

In re Glyncorrwg Colliery Co Ltd: 1926

In a receivership the costs of the receivership (including the cost of realising the property comprised in the charge) had priority to the claims of the charge holder. The preferential payments must be paid before the debenture holders ‘but not before the costs of liquidation’.

Citations:

[1926] Ch 951

Cited by:

Cited – Buchler and another (as joint liquidators of Leyland DAF Limited) v Talbot and another (as joint administrative receivers of Leyland DAF Limited) and Stichting Ofasec and others HL 4-Mar-2004
The liquidator sought to recover his expenses from assets charged under a floating charge in priority to the chargee.
Held: Barleycorn was decided in error. The liquidators costs incurred in an insolvent winding up were not to be charged . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 13 May 2022; Ref: scu.194250

In re a Company (No 007466 of 2003): ChD 19 Jan 2004

The company had published and filed its accounts, but sought to file revised accounts. The Registrar of companies refused permission, and the company asked the court to require the registrar to allow it by virtue of the court’s inherent jurisdiction. The accounts as filed disclosed the effect of a part 36 offer.
Held: The analogy with Rush and Tompkins did not hold. Calmex did not establish a general supervisory jurisdiction. If an action might lie, the registrar and any other party would have to be a joined in.

Judges:

Peter Leaver QC

Citations:

Times 02-Feb-2004

Statutes:

Companies Act 1985 245

Jurisdiction:

England and Wales

Citing:

Cited – Rush and Tompkins Ltd v Greater London Council and Another HL 1988
Use of ‘Without Prejudice Save as to Costs”
A sub-contractor sought payment from the appellants under a construction contract for additional expenses incurred through disruption and delay. The appellants said they were liable to pay the costs, and were entitled to re-imbursement from the . .
Cited – In re Calmex Ltd 1989
The court could exercise a supervisory jurisdiction over the registrar of companies, and enforce his duties through judicial review. The jurisdiction was not general, but one exercising normal public law jurisdiction. In particular, the court has . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.193761

Dean v Prince: CA 1954

The court had criticised an auditors’ valuation of a company’s shares.
Held: The criticism was not correct. However. if the court was satisfied that the valuation was made under a mistake, it would not be binding on the parties.
Denning LJ said: ‘Even if the court cannot point to the actual alleged error, nevertheless, if the figure itself is so extravagantly large or so inadequately small that the only conclusion is that he must have gone wrong somewhere, then the court will interfere much in the same way as the Court of Appeal will interfere with an award of damages if it is a wholly erroneous estimate.’

Judges:

Denning LJ

Citations:

[1954] 1 All ER 749, [1954] Ch 409

Jurisdiction:

England and Wales

Citing:

Appeal from – Dean v Prince 1953
An auditor had valued the shares in a private company under its articles. The court was asked to look behind the valuation: ‘In my judgment the valuation cannot stand. I propose, therefore, to declare that the valuation is not binding upon the . .

Cited by:

Applied – In re Bird Precision Bellows Ltd CA 1986
The company which was formed to combine one party’s expertise in the manufacturing of precision bellows with the general experience of two others in financial, commercial and industrial matters. For several years the company’s affairs had worked . .
Lists of cited by and citing cases may be incomplete.

Company, Damages

Updated: 13 May 2022; Ref: scu.192600

Re Abbey Leisure: CA 1990

A minority shareholder had brought a petition to wind up the company, saying the project for which it had been created was complete. An offer was made to purchase his shares. He rejected the offer to purchase his shareholding at an accountant’s valuation. He appealed a striking out of his petition on the grounds that his rejection was unreasonable.
Held: Appeal allowed. The accountant’s offer would include some discount for the fact that the shares were in a minority shareholding, and he would achieve a better figure by the machinery available in a winding up.

Citations:

[1990] BCLC 342 CA, [1990] BCC 60

Statutes:

Insolvency Act 1986 125(2)

Jurisdiction:

England and Wales

Cited by:

Cited – CVC/Opportunity Equity Partners Limited and Opportunity Invest II Limited v Luis Roberto Demarco Almeida PC 21-Mar-2002
(Cayman Islands) The respondent was a minority shareholder. An offer was made to buy out his interest. He petitioned for the winding up of the company on the just and equitable ground. The claimants obtained an injunction to prevent him doing so, . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 13 May 2022; Ref: scu.192621

Z Ltd v A-Z and AA-LL: CA 1982

The court gave directions on how banks and other third parties were to respond to Mareva injunctions. The plaintiff had obtained orders against companies with bank accounts in England. The action was settled, but the banks sougfht clarification.
Held: The application was dismissed. The injunction had been properly granted. An innocent third party had to do all he could to comply with such an order. The effect of such an order was to permit the bank to break the terms of any contractual obligation to the customer to honour cheques etc. The remedy has hitherto been in a contempt action.

Judges:

Lord Denning MR

Citations:

[1982] 1 AB 558, [1982] 2 WLR 288, [1982] 1 All ER 556

Statutes:

Supreme Court Act 1981 37(3)

Jurisdiction:

England and Wales

Citing:

Applied – Rahman (Prince Abdul) bin Turki al Sudairy v AbuTaha CA 1-Jun-1980
Lord Denning, MR said: ‘So I would hold that a Mareva injunction can be granted against a man even though he is based in this country if the circumstances are such that there is a danger of his absconding, or a danger of the assets being removed out . .
Applied – Clipper Maritime Co Ltd v Mineralimportexport 1981
Innocent third parties, such as port authorities required by a freezing order to detain a vessel in port, are entitled to an indemnity. . .
Applied – Searose v Seatrain UK 1981
Third parties who are unconnected with a dispute but who incur expense in complying with an order may specifically be covered by a cross-undertaking as to their costs and otherwise. Robert Goff J said: ‘the banks in this country have received . .

Cited by:

Cited – Commissioners of Customs and Excise v Barclays Bank Plc ComC 3-Feb-2004
The claimant had obtained orders against two companies who banked with the respondent. Asset freezing orders were served on the bank, but within a short time the customer used the bank’s Faxpay national service to transfer substantial sums outside . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Banking

Updated: 13 May 2022; Ref: scu.192614

Island Export Finance v Umunna: ChD 1986

The defendant director had resigned from the plaintiff company from dissatisfaction with its progress. He later received an order from the company’s former customer. The court considered the continuing duties of a company director after the termination of his appointment. Hutchinson J said: ‘It would, it seems to me, be surprising to find that directors alone, because of the fiduciary nature of their relationship with the company, were restrained from exploiting after they had ceased to be such any opportunity of which they acquired knowledge while directors. Directors, no less than employees, acquire a general fund of knowledge and expertise in the course of their work, and it is plainly in the public interests that they should be free to exploit it in a new position.’

Judges:

Hutchinson J

Citations:

[1986] BCLC 460

Jurisdiction:

England and Wales

Cited by:

Cited – Crown Dilmun, Dilmun Investments Limited v Nicholas Sutton, Fulham River Projects Limited ChD 23-Jan-2004
There was a contract for the sale of Craven Cottage football stadium, conditional upon the grant of non-onerous planning permissions. It was claimed that the contract had been obtained by the defendant employee in breach of his fiduciary duties to . .
Cited – Balston Ltd v Headline Filters Ltd and Another ChD 1990
The claimant, a manufacturer of filter tubes, employed the defendant as a director. He gave notice to leave, but during his notice period, he was contacted by a customer who informed him of a meeting between that customer and the company at which . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 13 May 2022; Ref: scu.192210

Capital Finance v Stokes: 1969

A voidable charge remains valid until avoided. ‘It was argued for the vendor that what he contracted to get was a valid legal charge, and that he has not received because the company in default of its obligation under section 95 [of the Companies Act 1948] did not register the charge with the result that it became ineffective on winding up. I do not accept this argument. The charge was effective when made and, although it was the purchaser’s duty to register, it was open to the vendor himself to remedy the defect at the purchaser’s expense.’

Judges:

Harman LJ

Citations:

[1969] 1 Ch 261

Jurisdiction:

England and Wales

Cited by:

Cited – UCB Group Ltd v Hedworth CA 4-Dec-2003
The defendant challenged the claimant’s right to possession under a legal charge. She appealed a finding that she had not established the undue influence of her husband, a solicitor.
Held: A lender who received a voidable security was entitled . .
Lists of cited by and citing cases may be incomplete.

Land, Company

Updated: 13 May 2022; Ref: scu.190505

Knowles v Scott: 1891

A company’s voluntary liquidator is the company’s agent and no action lies against for delay him save in the case of misfeasance or wilful misconduct. He is not a trustee for the creditors or contributories of a company in liquidation. Nor does he have liability as a trustee dealing with his cestui que trust. Without proof of misfeasance or wilful misconduct no action will lie against him for a delay in distributing the assets of the company. Romer J said: ‘In my view a voluntary liquidator is more rightly described as the agent of the company – an agent who has no doubt cast upon him by statute or otherwise special duties . . If this be the true position of a liquidator, and I think at any rate agency more nearly defines his true position than trusteeship, it is clear that he could not as agent be sued by a third party for negligence apart from misfeasance or personal misconduct.’

Judges:

Romer J

Citations:

[1891] 1 Ch 717, [1891] 60 LJ Ch 284, [1891] 64 LT 135, [1891] WR 523, [1891] 7 TLR 306

Jurisdiction:

England and Wales

Cited by:

Cited – Oldham and others v Georgina Kyrris and Another CA 4-Nov-2003
The claimant sought to bring a claim against the administrators of a partnership alleging a duty of care to creditors.
Held: Such an administrator owed no greater duty to creditors than would a director. That duty was no different whether the . .
Distinguished – Pulsford v Devenish ChD 1903
The liquidator in a voluntary liquidation negligently failed to inform the company’s creditors of the liquidation, and distributed the company’s assets to its contributories without regard to the creditors’ claims. The company was later dissolved. . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Professional Negligence, Company

Updated: 12 May 2022; Ref: scu.190145

Pulsford v Devenish: ChD 1903

The liquidator in a voluntary liquidation negligently failed to inform the company’s creditors of the liquidation, and distributed the company’s assets to its contributories without regard to the creditors’ claims. The company was later dissolved.
Held: The creditors had a claim against the liquidator. The availability of the statutory remedy of a creditor under section 10 and the statutory right of a creditor to apply in a voluntary liquidation under section 138 ceased to exist when the company was dissolved. ‘But the duty to pay the debts is an absolute statutory duty, without limit in point of time and with no provision for the release of the voluntary liquidator.
It is not necessary to resort to trusteeship or equitable doctrines: the case is one of a duty imposed by a statute on an individual for the benefit of a class of persons, namely, creditors and the only peculiarity of the case is that the remedy created by the statute is not co-extensive in point of time with the duty, for the Act permits the destruction of the remedy before the duty has been performed.
Now the principles applicable to such a duty as I have mentioned are well settled and rest on the well-founded assumption that the Legislature does not intend its enactment to be brutum fulmen: if, therefore, a statute creates such a duty but no remedy, an action at common law (in former days action on the case) will lie for breach of such duty.’ and ‘It was urged in argument that the liquidator is merely the agent of the company; but assuming this to be so, I can see nothing inconsistent in the imposition on such agent of a duty to the company’s creditors.’

Judges:

Farwell J

Citations:

[1903] 2 Ch 625

Statutes:

Companies Act 1890 10 138

Jurisdiction:

England and Wales

Citing:

Distinguished – Knowles v Scott 1891
A company’s voluntary liquidator is the company’s agent and no action lies against for delay him save in the case of misfeasance or wilful misconduct. He is not a trustee for the creditors or contributories of a company in liquidation. Nor does he . .

Cited by:

Cited – Oldham and others v Georgina Kyrris and Another CA 4-Nov-2003
The claimant sought to bring a claim against the administrators of a partnership alleging a duty of care to creditors.
Held: Such an administrator owed no greater duty to creditors than would a director. That duty was no different whether the . .
Cited – A and J Fabrications (Batley) Ltd v Grant Thornton and Others ChD 1998
The plaintiffs, the majority creditors of a company in liquidation, alleged that they had agreed with Grant Thornton, the defendants, to support the appointment of one of the firm’s partners or employees as liquidator of the company, with a view to . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Professional Negligence, Company

Updated: 12 May 2022; Ref: scu.190147

In re Barings plc (No 5): CA 2000

A finding of breach of duty is neither necessary nor of itself sufficient for a finding of unfitness. As the judge (at first instance) observed a person may be unfit even though no breach of duty is proved against him or may remain fit notwithstanding the proof of various breaches of duty. The appeal was dismissed.

Judges:

Morritt LJ

Citations:

[2000] 1 BCLC 523

Statutes:

Company Directors Disqualification Act 1986

Jurisdiction:

England and Wales

Citing:

Appeal from – In Re Barings Plc, Secretary of State for Trade and Industry v Baker (No 5) ChD 25-Nov-1998
A person disqualified from acting as a company director might exceptionally be given permission to act as non-executive director in named companies where this appeared necessary and the cause of the original disqualification was unrelated.
As . .

Cited by:

Cited – Equitable Life Assurance Society v Bowley and others ComC 17-Oct-2003
The claimant sought damages against its former directors for negligence and breach of fiduciary duty. The defendants asked that the claims be struck out.
Held: It was no longer good law that directors might leave the conduct of the company’s . .
Cited – The Secretary of State for Trade and Industry v Goldberg, Mcavoy ChD 26-Nov-2003
The Secretary of State sought a disqualification order. The director argued that one shoul not be made in the absence of some breach of legal duty, some dishonesty should be shown.
Held: The answer was a mixture of fact and law. A breach of . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 12 May 2022; Ref: scu.187448

Re A Company: CA 1980

The court considered that even when not narrowly construing the word ‘officer’ in the Act, that word meant, in that context, ‘a person in a managerial position in regard to the company’s affairs’

Judges:

Lord Denning MR, Shaw and Templeman LJJ

Citations:

[1980] 1 CA 138

Statutes:

Companies Act 1948

Jurisdiction:

England and Wales

Cited by:

Cited – PD, Regina (on the Application of) v West Midlands and North West Mental Health Review Tribunal Admn 22-Oct-2003
The claimant was detained as a mental patient. He complained that a consultant employed by the NHS Trust which detained him, also sat on the panel of the tribunal which heard the review of his detention.
Held: Such proceedings did engage the . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 12 May 2022; Ref: scu.187349

Borland’s Trustee v Steel Brothers and Co Ltd: 1901

Mr Borland was a shareholder. The company’s articles contained pre-emption rights, such that on a shareholder’s bankruptcy, he had, on receiving a transfer notice from the directors, to transfer his shares to a manager or assistant at a fair value calculated in accordance with the articles. His trustee said that the transfer articles were void because, among other reasons, they amounted to a fraud upon the bankruptcy laws, and could not prevail when bankruptcy had supervened, since the trustee was forced to part with the shares at less than their true value, and the asset was not fully available for creditors.
Held: Farwell J said: ‘a simple stipulation that upon a man’s becoming bankrupt that which was his property up to the date of the bankruptcy should go over to some one else and be taken away from his creditors, is void as being a violation of the policy of the bankrupt law’. It was a commercial arrangement, and the provisions were were a fair agreement for the business of the company. They were binding equally on all shareholders. There was no suggestion of fraudulent preference, and nothing obnoxious to the bankruptcy law in a clause which provided that if a man became bankrupt he should sell his shares. The price was a fixed sum for all persons alike, and no difference in price arose in the case of bankruptcy. The purpose was that there should be in the company, if it were so desired, none but managers and workers in Burma. There was nothing repugnant in the way in which the value of the shares was to be ascertained. It would have been different if there were any provision in the articles compelling persons to sell their shares in the event of bankruptcy at something less than the price that they would have otherwise obtained, since such a provision would be repugnant to the bankruptcy law
He described the nature of a company share: ‘It is the interest of a person in the company, that interest being composed of rights and obligations which are defined by the Companies Act and by the memorandum and articles of association of the company.’ and one with limited liability in a company: ‘A share is the interest of the shareholder in the company measured by a sum of money, for the purpose of liability in the first place, and of interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders inter se in accordance with section 16 of the Companies Act 1862. The contract contained in the articles of association is one of the original incidents of the share. A share is . . an interest measured by a sum of money and made up of various rights contained in the contract, including the right to a sum of money of a more or less amount.’

Judges:

Farwell J

Citations:

[1901] 1 Ch 279

Cited by:

Approved – Inland Revenue Commissioners v Crossman HL 1937
For a valuation for estate taxes, the value is what a purchaser in the open market would have paid to enjoy whatever rights attached to the property at the relevant date.
Lord Russell of Killowen said that a share is the interest of a . .
Cited – Her Majesty’s Commissioners of Inland Revenue v Laird Group plc HL 16-Oct-2003
Was the payment of a dividend in respect of shares ‘a transaction in securities’ or ‘a transaction relating to securities’ within the meaning of section 703.
Held: ‘As a matter of ordinary language, the creation, issue, sale, purchase, . .
Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 12 May 2022; Ref: scu.186959

Tamlin v Hannaford: CA 1950

Discussing the Brtitish Transport Commission, Denning LJ said: ‘It is not the Crown and has none of the immunities or privileges of the Crown. Its servants are not civil servants, and its property is not Crown property. It is as much bound by Acts of Parliament as any other subject of the King. It is, of course, a public authority and its purposes, no doubt, are public purposes, but it is not a government department nor do its powers fall within the province of government.’ The court contrasted ‘commercial matters’ with those which were ‘essentially the province of government’, although it recognised that historically the carriage of mail had enjoyed a special position.

Judges:

Denning LJ

Citations:

[1950] 1 KB 18

Jurisdiction:

England and Wales

Cited by:

Cited – Perch, Dennie and Commissiong v The Attorney General of Trinidad and Tobago PC 20-Feb-2003
PC (Trinidad and Tobago) The postal system had been transferred to a company. Employees complained that they had been public servants and had lost privileges associated with that employment, and provisions of the . .
Lists of cited by and citing cases may be incomplete.

Administrative, Company

Updated: 12 May 2022; Ref: scu.186582

In re John Tweddle and Company Ltd: CA 1910

The court discussed the official receiver’s enquiries and report leading up to the public examination of former directors. Farwell LJ said: ‘Now those are functions of a judicial character which are cast upon him, not in the liquidation of the company for the benefit of the assets, but primarily at any rate for the protection of the public. One has to bear in mind that in 1890 there had been various company failures, and it was thought that more drastic legislation was required against directors and promoters and people standing in that position, and I have no doubt that this section was passed for that purpose. It is said, and with some truth, perhaps, that it is a little hard on the company if the view that we take is correct that the costs of all this should come out of the company’s assets; but a company only exists by favour of and on the conditions imposed by the legislature, and it is not immaterial to observe that as long ago as 1862, under the 167th section of the Act of 1862, if directors were prosecuted (as mentioned in that section) the expense of the prosecution came out of the assets of the company’.

Judges:

Farwell LJ

Citations:

[1910] 2 KB 697

Jurisdiction:

England and Wales

Cited by:

Cited – Official Receiver v Wadge Rapps and Hunt (a firm) and another and two other actions HL 31-Jul-2003
(Orse In re Pantmaenog Timber Co Ltd)
The Receiver sought to use information obtained under section 236 (documents recovered from the directors’ solicitors) in disqualification proceedings.
Held: The appeal succeeded. The Act had . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 12 May 2022; Ref: scu.186359

Re a Company: 1987

Citations:

[1987] 1 BCLC 82

Cited by:

Cited – Bruce Peskin; Kevin Milner v John Anderson and Others CA 14-Dec-2000
The Royal Automobile Club (RAC) had been demutualised. The claimants were former members who sought damages from former directors because they had received no benefit. They had ceased to be members before the re-organisation and claimed they should . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 12 May 2022; Ref: scu.185805

Allen v Hyatt: 1914

The court considered the duties of directors toward shareholders in circumstances of them making representations to secure options to purchase shares of shareholders and undertaking to sell shares of shareholders in agency capacity.

Citations:

(1914) 30 TLR 444

Cited by:

Cited – Bruce Peskin; Kevin Milner v John Anderson and Others CA 14-Dec-2000
The Royal Automobile Club (RAC) had been demutualised. The claimants were former members who sought damages from former directors because they had received no benefit. They had ceased to be members before the re-organisation and claimed they should . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 12 May 2022; Ref: scu.185793

Re a Company (No 003729 of 1982 ): ChD 1984

A creditor had claimed that the company owed it some andpound;12,000 for work done by the creditor for the company. The company refused to pay that sum but offered to pay some andpound;2,000. Two years later the creditor served a statutory demand for the original sum claimed and, when there was no payment, presented a winding-up petition. The company then paid the sum which it had previously offered to pay. An issue in the proceedings was whether the company had neglected to pay the sum demanded and it was argued by the creditor that the company had neglected to pay a sum exceeding andpound;200, the then statutory minimum, when it did not pay the sum it had previously offered and subsequently paid.
Held: The creditor was not in a position to make a genuine demand for a specified sum. A winding-up order may not be made on a debt which is disputed in good faith by the company.

Judges:

Mervyn Davies J

Citations:

[1984] 1 WLR 1090, [1984] 3 All ER 78

Jurisdiction:

England and Wales

Cited by:

Doubted – Platts v Trustees Savings Bank Plc CA 13-Feb-1998
A counterclaim for negligent sale was a valid claim allowing potential against repossessing bank but would not make bank’s claim unliquidated. The Judge could properly hold that there was a liquidated and unsecured debt the subject of the statutory . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 12 May 2022; Ref: scu.184800

Chapleo v Brunswick Permanent Building Society: 1881

‘persons who deal with corporations or societies that owe their constitution to or have their powered defined or limited by Act of Parliament, or are regulated by deeds of settlement or rules, deriving their effect more or less from Acts of Parliament, are bound to know or to ascertain for themselves the nature of the constitution, and the extent of the powers of the corporation or society with which they deal. The plaintiffs and everyone else who have dealings with a building society are bound to know that such a society has no power of borrowing, except such as is conferred upon it by its rules, and if dealing with such a society they neglect or fail to ascertain whether it has the power of borrowing or whether any limited power it may have has been exceeded, they must take the consequences of their carelessness.’

Citations:

(1881) 6 QBD 696

Cited by:

Cited – Stretch v West Dorset District Council CA 10-Nov-1997
A local authority has no ability to grant an option to renew a lease, even though it has the power to grant a lease and would benefit from the wrongful grant. The land was held for an express statutory purpose and was not ‘corporate land’ within the . .
Lists of cited by and citing cases may be incomplete.

Local Government, Company, Financial Services

Updated: 12 May 2022; Ref: scu.184241

In re Elgindata Ltd: ChD 1991

The plaintiff obtained a patent which was then to be utilised through the company, of which the plaintiff had one third shares. He later complained that the majority shareholder had acted prejudicially.
Held: Mismanagement could amount to prejudicial conduct of the business. There was no evidence of failure to consult but some evidence of misuse of assets. It would be wrong to leave the plaintiff with the shareholding, and an order was made for the purchase of the shares by the co-shareholder at a discount to reflect the minority status. Whether or not it would be fair to value as at the date of the order can depend on whether irregularities in the accounts have been corrected.

Judges:

Warner J

Citations:

(1991) BCLC 959

Jurisdiction:

England and Wales

Cited by:

Cited – Bonham v Crow and others CA 13-Dec-2001
The petitioner complained of unfair prejudice in the way the company had been operated, and sought an order that his shares be bought out. However the judge found that the net value of the company was negative and the shares worthless. The judge had . .
See Also – Re Elgindata Ltd (2) CA 15-Jul-1992
A successful plaintiff who had not been shown to have behaved improperly or unreasonably was not to have his costs reduced or be ordered to pay any part of his opponents costs for having pursued some unsuccessful points.
Nourse LJ said that . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 12 May 2022; Ref: scu.182885

Parker v McKenna: CA 1874

The directors of a bank acquired for themselves, and made a profit on, certain shares the subject of a new issue that were not taken up by the bank’s shareholders.
Held: James LJ said: ‘I do not think it is necessary, but it appears to me very important, that we should concur in laying down again and again the general principle that in this court no agent in the course of his agency, in the matter of his agency, can be allowed to make any profit without the knowledge and consent of his principal; that that rule is an inflexible rule, and must be applied inexorably by this court, which is not entitled, in my judgment, to receive evidence, or suggestion, or argument as to whether the principal did or did not suffer any injury in fact by reason of the dealing of the agent; for the safety of mankind requires that no agent shall be able to put his principal in the danger of such an inquiry as that.’
Lord Cairns LC said: ‘The Court will not inquire, and is not in a position to ascertain, whether the bank has or has not lost by the acts of the directors. All that the Court has to do is to examine whether a profit has been made by an agent, without the knowledge of his principal, in the course and execution of his agency, and the Court finds, in my opinion, that these agents in the course of their agency have made a profit, and for that profit they must, in my opinion, account to their principal.’

Judges:

James LJ, Lord Cairns LC

Citations:

(1874) LR 10 Ch 124

Jurisdiction:

England and Wales

Cited by:

Cited – Bhullar and others v Bhullar and Another CA 31-Mar-2003
The claimants were 50% shareholders in a property investment company and sought relief alleging prejudicial conduct of the company’s affairs. After a falling out, two directors purchased property adjacent to a company property but in their own . .
Cited – O’Donnell v Shanahan and Another CA 22-Jul-2009
The claimant appealed against dismissal of her petition for an order for the defendants to purchase her shares at a fair value, saying that they had acted unfairly toward her. Her co-directors had acquired, for another company of which they were . .
Lists of cited by and citing cases may be incomplete.

Agency, Company

Updated: 12 May 2022; Ref: scu.180414

Trustor Ab v Smallbone and others: CA 19 Jan 1999

Appeal against refusal to allow the defendant, subject to a Mareva injunction, to charge his house to pay his legal fees.

Citations:

[1999] EWCA Civ 609

Jurisdiction:

England and Wales

Cited by:

See Also – Trustor AB v Smallbone and others CA 9-May-2000
. .
See Also – Trustor Ab v Smallbone and Another (No 2) ChD 30-Mar-2001
Directors of one company fraudulently diverted substantial sums to another company owned by one of them. The defrauded company sought return of the funds, from the company and from the second director on the basis that the corporate veil should be . .
Lists of cited by and citing cases may be incomplete.

Company, Litigation Practice

Updated: 11 May 2022; Ref: scu.145524

Brennan v Brighton Borough Council: CA 23 Apr 1998

Citations:

[1998] EWCA Civ 689

Jurisdiction:

England and Wales

Citing:

Cited – Pontin v Wood CA 1962
The writ had been issued just before the expiration of the relevant limitation period in a defective form in that it was endorsed merely with the words ‘the plaintiffs’ claim is for damages for personal injuries’. The judge in chambers held that the . .
Lists of cited by and citing cases may be incomplete.

Company, Torts – Other

Updated: 11 May 2022; Ref: scu.144167

Wright and Another v Atlas Wright (Europe) Ltd: CA 3 Feb 1999

Agreements, by which directors were given rights to payments for life, terminable only at their discretion were valid. The agreements were intra vires, and the agreement and support of the only shareholder validated them, even though the strict procedure had not been followed.

Citations:

Gazette 24-Feb-1999, Gazette 12-May-1999, Times 03-Feb-1999

Statutes:

Companies Act 1985 319

Jurisdiction:

England and Wales

Company

Updated: 11 May 2022; Ref: scu.90622

Walker and others v Stones and others: CA 19 Jul 2000

Beneficiaries under a trust sought damages from a solicitor trustee, and the firm of which he was a partner.
Held: Where a trustee acted in breach of trust in a claimed belief that he was acting in the interests of the beneficiaries, but no reasonable trustee in his place could have that belief, then an allegation against him of dishonesty should proceed. A trusteeship is not part of the normal duties of a partner of a firm, and the firm is not vicariously liable for the acts of a partner in such trusts. The court rejected the ‘Robin Hood’ test of dishonesty (a person is only regarded as dishonest if he transgresses his own standard of honesty, even if that standard is contrary to that of reasonable and honest people) saying: ‘A person may in some cases act dishonestly, according to the ordinary use of language, even though he genuinely believes that his action is morally justified. The penniless thief, for example, who picks the pocket of the multi-millionaire is dishonest even though he genuinely considers that theft is morally justified as a fair redistribution of wealth and that he is not therefore being dishonest.’
‘a claimant is entitled to recover damages where:
(a) the claimant can establish that the defendant’s conduct has constituted a breach of some legal duty owed to him personally (whether under the law of contract, torts, trusts or any other branch of the law) AND
(b) on its assessment of the facts, the Court is satisfied that such breach of duty has caused him personal loss, separate and distinct from any loss that may have been occasioned to any corporate body in which he may be financially interested.
I further conclude that, if these two conditions are satisfied, the mere fact that the defendant’s conduct may also have given rise to a cause of action at the suit of a company in which the claimant is financially interested (whether directly as a shareholder or indirectly as, for example, a beneficiary under a trust) will not deprive the plaintiff of his cause of action; in such a case, a plea of double jeopardy will not avail the defendant.’

Judges:

Sir Christopher Slade

Citations:

Times 26-Sep-2000, Gazette 14-Sep-2000, [2000] Lloyds Rep PN 864

Jurisdiction:

England and Wales

Cited by:

Cited – Johnson v Gore Wood and Co HL 14-Dec-2000
Shareholder May Sue for Additional Personal Losses
A company brought a claim of negligence against its solicitors, and, after that claim was settled, the company’s owner brought a separate claim in respect of the same subject-matter.
Held: It need not be an abuse of the court for a shareholder . .
Lists of cited by and citing cases may be incomplete.

Company, Legal Professions, Trusts, Equity, Vicarious Liability

Updated: 11 May 2022; Ref: scu.90254

Secretary of State for Trade and Industry v Aurum Marketing Ltd and Another: CA 10 Aug 2000

Even though he was not a party to the proceedings, the sole owner of a company sought to be wound up on the grounds of public interests by the Secretary of State, could be ordered to pay the costs of the winding up personally. The company’s costs in resisting a successful application should be paid out of the company’s assets, but only after unsecured creditors had been paid where this appeared just. In effect the company had been used to cover a swindle, and large sums had been moved abroad.

Citations:

Times 10-Aug-2000

Jurisdiction:

England and Wales

Company

Updated: 11 May 2022; Ref: scu.89115

Secretary of State for Trade and Industry v Collins and others: CA 13 Jan 2000

A disqualified director applied for consent to act in the management of a company before his disqualification had expired. He succeeded, and the judge made no award for costs. On appeal by the Secretary of State it was held that the lifting of the disqualification was a matter purely for the discretion of the judge. Guidance was given as to the form of such applications. However given the Secretary of State’s special position, his costs should normally be paid by the applicant.

Citations:

Times 25-Jan-2000, Gazette 13-Jan-2000, [2000] 2 BCLC 223

Statutes:

Company Directors Disqualification Act 1986 1(1)

Jurisdiction:

England and Wales

Cited by:

Cited – The Secretary of State for Trade and Industry v Jonkler and Another ChD 10-Feb-2006
The applicant had given an undertaking to the court to secure discontinuance of company director disqualification procedings. He now sought a variation of the undertaking.
Held: The claimant had given an undertaking, but in the light of new . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 11 May 2022; Ref: scu.89128

Secretary of State for Trade and Industry v Deverill and another: CA 20 Jan 2000

When considering what constituted a shadow director, courts should be reluctant to move away from the words of the Act. The words should be construed carefully because the term was used in several pieces of legislation, including those with penal provisions. A shadow director is one who has real influence on a company. He does not have to affect all the company’s affairs, but to affect those concerned particularly with corporate governance and financial matters. Professional advisers, advising on matters within their usual professional practice, would not normally be considered as such.
Morritt LJ: ‘i) The definition of a shadow director is to be construed in the normal way to give effect to the parliamentary intention ascertainable from the mischief to be dealt with and the words used. In particular, as the purpose of the Act is the protection of the public and as the definition is used in other legislative contexts, it should not be strictly construed merely because it also has quasi-penal consequences in the context of the Company Directors Disqualification Act 1986.
ii) The purpose of the legislation is to identify those, other than professional advisers, with real influence in the corporate affairs of the company. But it is not necessary that such influence should be exercised over the whole field of its corporate activities.
iii) Whether any particular communication from the alleged shadow director, whether by words or conduct, is to be classified as a direction or instruction must be objectively ascertained by the court in the light of all the evidence. In that connection it is not necessary to prove the understanding or expectation of either giver or receiver. In many, if not most, cases it will suffice to prove the communication and its consequence. Evidence of such understanding or expectation may be relevant but it cannot be conclusive. Certainly the label attached by either or both parties then or thereafter cannot be more than a factor in considering whether the communication came within the statutory description of direction or instruction.
iv) Non-professional advice may come within that statutory description. The proviso excepting advice given in a professional capacity appears to assume that advice generally is or may be included. Moreover the concepts of ‘direction’ and ‘instruction’ do not exclude the concept of ‘advice’ for all three share the common feature of ‘guidance’.
v) It will, no doubt, be sufficient to show that in the face of ‘directions or instructions’ from the alleged shadow director the properly appointed directors or some of them cast themselves in a subservient role or surrendered their respective discretions. But it is not necessary to do so in all cases. Such a requirement would be to put a gloss on the statutory requirement that the board are ‘accustomed to act’ ‘in accordance with’ such directions or instructions. ‘
and ‘i) If the directors usually took the advice of the putative shadow director, it is irrelevant that on the occasions when he did not give advice the board did exercise its own discretion; and ii) If the board were accustomed to act on the directions or instructions of the putative shadow director it is not necessary to demonstrate that their action was mechanical rather than considered.’

Judges:

Morritt LJ

Citations:

Times 21-Jan-2000, Gazette 20-Jan-2000, [2001] Ch 340

Statutes:

Company Directors Disqualification Act 1986 22(5)

Jurisdiction:

England and Wales

Cited by:

Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 11 May 2022; Ref: scu.89133

Secretary of State for Trade and Industry and Another v Arum Marketing Ltd and Another: CA 31 Aug 2000

A company was wound up on public interest grounds. The costs were ordered to be paid out of the company’s assets. The Secretary appealed, and on appeal the costs were ordered to be paid by the company’s sole director and shareholder personally. The company was a swindle, and there was no reason why anyone other than the proprietor should lose out if it was not necessary.

Citations:

Gazette 31-Aug-2000

Jurisdiction:

England and Wales

Company, Costs, Insolvency

Updated: 11 May 2022; Ref: scu.89110

Re New Cedos Engineering Company Ltd: 1994

The company had two directors. On a death the inheritor of a members shares were entitled to have their shares registered. The majority shareholder died. The remaining board refused to register his widow as owner of the shares. She remarried, and then died, and her widower who had inherited the shares was also refused registration.
Held: The court ordered the registration of the shares. The right within the articles to have one’s shares registered was absolute. The members of a company cannot do informally that which they cannot do formally
Where a company has a sole remaining registered shareholder, he cannot bind the company without a formal meeting

Judges:

Oliver J

Citations:

[1994] 1 BCLC 797

Jurisdiction:

England and Wales

Citing:

Applied – Morris v Kanssen HL 1946
The House considered the effect of provisions relating to the acts of directors in the 1929 Act. Lord Simonds said: ‘There is, as it appears to me, a vital distinction between (a) an appointment in which there is a defect or, in other words, a . .
Cited – Re Consolidated Nickel Mines Ltd ChD 1914
The articles of association said that general meetings were to be held once a year and that at the ordinary meeting in 1906, all directors should retire from office. . Articles 62, 101, 104 and 106 of the articles of association of the company . .

Cited by:

Cited – Randhawa and Another v Turpin and Another CA 1-Aug-2017
The Court was asked whether the sole director of a company, whose articles required two directors for its board meeting to be quorate, could validly appoint administrators . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 11 May 2022; Ref: scu.634364

Young v Ladies’ Imperial Club Ltd: CA 1920

The purported expulsion of Mrs Young from the Ladies’ Imperial Club was invalid for two reasons. First, one member of the executive committee had not been given notice of the meeting, even though she would not have attended it. Second, the notice of the meeting did not adequately disclose what business would be transacted.
Lord Sterndale MR said that the first of these reasons of itself invalidated the meeting
Warrington LJ said that the first was ‘the more important defect’: ‘It seems to me of great importance that rules which have been made for the purpose of regulating the proceedings of the committee in respect of such a matter ought to be strictly adhered to.’

Judges:

Lord Sterndale MR, Warrington LJ

Citations:

[1920] 2 KB 523

Cited by:

Cited – Speechley and Others v Allott and Others CA 10-Mar-2014
The parties disputed the management of a social club. The club owned a bowling green, and bowling members sought to restrain its closure. The appellants now said that the court should not have found at first instance that a meeting had validly . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 11 May 2022; Ref: scu.551301

In Re European Life Assurance Society: 1869

Sir William James V-C dismissed a petition for the winding up of a company which had issued large numbers of life policies and annuity contracts, and appeared to be in financial difficulties. He rejected the basis of the ‘just and equitable’ ground in section 79(5) of the 1862 Act, saying: ‘And in my view of the law of the case it would be just and equitable to wind up a company like this assurance company if it were made out to my satisfaction that it is, not in any technical sense but, plainly and commercially insolvent – that is to say, that its assets are such, and its existing liabilities are such, as to make it reasonably certain – as to make the court feel satisfied – that the existing and probable assets would be insufficient to meet the existing liabilities. I take it that the court has nothing whatever to do with any question of future liabilities, that it has nothing whatever to do with the question of the probability whether any business which the company may carry on tomorrow or hereafter will be profitable or unprofitable. That is a matter for those who may choose to be the customers of the company and for the shareholder to consider.’

Judges:

Sir William James V-C

Citations:

(1869) LR 9 Eq 122

Statutes:

Companies Act 1862 79(5)

Jurisdiction:

England and Wales

Cited by:

Cited – Byblos Bank SAL v Al-Khudhairy CA 1987
The parties disputed the validity of the appointment of a receiver. The ostensible ground for appointment of the receiver was not made out, but the bank relied on a new ground, section 223(d) of the 1948 Act. Nicholls LJ observed: ‘Construing this . .
Cited – BNY Corporate Trustee Services Ltd and Others v Neuberger SC 9-May-2013
Potential Insolvency effect under guarantee
The various parties had entered into complex and substantial financial arrangements incorporating guarantees. The guarantees were conditional upon the guaranteed party being solvent. The parties disputed whether a party which would otherwise be . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 11 May 2022; Ref: scu.535115

In re Trent and Humber Shipbuilding Co; Bailey and Leetham’s Case: 1869

The court was asked whether costs awarded against a company were costs in the winding up.
Held: Where a creditor has obtained leave of the court to bring proceedings against a company in liquidation, any costs to which the creditor would become entitled as a result of the successful prosecution of the proceedings would be payable out of the company’s assets in full.
The rationale for the estate costs rule lies in the fact that: ‘a company in winding up ought to be dealt with as a matter of course like any other litigant, and if an action be brought or resisted for the benefit of the estate, and that action be brought fruitlessly, or defended fruitlessly, then the estate, that is to say, the other creditors, ought, like everybody else, to be fixed with the costs to which they have improperly and unnecessarily put their opponent.’

Citations:

(1869) LR 8 Eq 94

Cited by:

Cited – In re Nortel Companies and Others SC 24-Jul-2013
The court was asked as to the interrelationship of the statutory schemes relating to the protection of employees’ pensions and to corporate insolvency.
Held: Liabilities which arose from financial support directions or contribution notices . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 11 May 2022; Ref: scu.537946