Category: Company

Re Unisoft Group Limited (No 3): ChD 1994

When considering applications to strike out parts of pleadings in a s459 application, the courts had to recognise the need to be careful not to allow the parties to trawl through irrelevant grievances. B The statutory definition of ‘shadow director’ is that he is a person on whose instructions or directions ‘the directors of the company’ are accustomed to act: ‘In my view, there can be no way in which the acts of any one of several directors of a company in complying with the directions of an outsider could constitute that outsider a shadow director of that company. Of course, if the board of the company be one person only and that person is a ‘cat’s paw’ for an outsider, the outsider may be the shadow director of that company. But in a case such as this, with a multi-member board, unless the whole of the board, or at the very least a governing majority of it – in my belief the whole, but I need not exclude a governing majority – are accustomed to act on the directions of an outsider, such an outsider cannot be a shadow director.’ and ‘[The directors] must be people who act on the directions or instructions of the shadow director as a matter of regular practice. That last requirement follows from the reference in the subsection to the directors being ‘accustomed to act’. That must refer to acts not on one individual occasion but over a period of time and as a regular course of conduct.’

Harman J
[1994] 1 BCLC 609
Companies Act 1985 459 741(2)
England and Wales
Citing:
See Also – Re Unisoft Group (No 2) 1993
Inability to pay means to pay when the costs fall due for payment . .

Cited by:
Cited – Wilkinson v West Coast Capital and others ChD 22-Jul-2005
A claim was to be made about actions of unfair prejudice by the directors against the minor shareholder. The court considered a preliminary issue as to the admissibility of evidence, including without prejudice correspondence.
Held: The . .
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: 17 January 2022; Ref: scu.228979

De Beers Consolidated Mines Ltd v Howe, Surveyor of Taxes: HL 1905

The appellant Company was registered in the Cape Colony and it’s business was mining for diamonds in mines which it possessed in South Africa, and selling the diamonds there under annual contracts to a syndicate for delivery there. The Head Office was in South Africa, and general meetings were always held there. Some of the directors resided in South Africa and weekly meetings of the directors were held there. But the majority of the directors resided in England, and the meetings in London were the meetings at which the real control was exercised in all the important business of the company, except the actual mining operations. The sales of the Diamonds were controlled by the London board.
Held: The company was resident in the United Kingdom for the purposes of income tax. A foreign corporation may reside in this country for the purposes of income tax.
The question of where a company was resident was one of fact: ‘In applying the conception of residence to a company, we ought, I think, to proceed as nearly as we can upon the analogy of an individual. A company cannot eat or sleep, but it can keep house and do business. We ought, therefore, to see where it really keeps house and does business . . The decision of Kelly C.B. and Huddleston B. in the Calcutta Jute Mills v. Nicholson and the Cesena Sulphur Co. v. Nicholson, now thirty years ago, involved the principle [is] that a company resides for purposes of income tax where its real business is carried on . . I regard that as the true rule, and the real business is carried on where the central control and management actually abides.’
Whether any particular case falls within that rule is a ‘pure question of fact, to be determined not according to the construction of this or that regulation or bye-law, but upon scrutiny of the course of business and trading.’

Lord Loreburn LC
[1906] AC 455, (1905) 2 KB 612, 13 Mans 394, 22 TLR 34, 5 Tax Cas 198
England and Wales
Citing:
Adopted – Calcutta Jute Mills Co Ltd v Nicholson 1876
(Court of Exchequer) The residence of a company for tax purposes is decided by where the ‘central management and control’ is. . .

Cited by:
Cited – Wood v Holden (Inspector of Taxes) ChD 8-Apr-2005
The parties had entered into complex share transactions for the sale of their trading business, and sought to avoid liability for capital gains tax.
Held: Gains on disposals between members of a non-resident group of companies were exempt. The . .
Cited – Wood and Another v Holden (HMIT) CA 26-Jan-2006
Husband and wife sold their business, arranging matters so as to avoid paying Capital Gains Tax by transferring their interest between members of a group of companies which was non-resident.
Held: The scheme was effective. The sole real issue . .
Cited – Revenue and Customs v Smallwood and Another CA 8-Jul-2010
The taxpayers had set up trusts which they said were based in Mauritius allowing them to claim double taxation relief. The Revenue had issued closure notices, confirmed by the SPCT, but overturned by the High Court. The Revenue appealed, saying that . .
Cited – Tulip Trading Ltd v Bitcoin Association for BSV and Others ChD 5-Jan-2022
Security required for Bitcoin claim
Two applications for security for costs. The claimant claimed against fifteen overseas residents requiring a re-write of cryotocurrency systems so that he could recover sums he said were due to him in respect of Bitcoin assets which he said have . .

Lists of cited by and citing cases may be incomplete.

Taxes Management, Company, Income Tax

Updated: 17 January 2022; Ref: scu.224771

Prudential Assurance Company Ltd v Revenue and Customs: SC 25 Jul 2018

PAC sought to recover excess advance corporation tax paid under a UK system contrary to EU law. It was now agreed that some was repayable but now the quantum. Five issues separated the parties.
Issue I: does EU law require the tax credit to be set by reference to the overseas tax actually paid, as HMRC submit, or by reference to the foreign nominal tax rate (‘FNR’), as PAC submits?
Held: HMRC Appeal dismissed: credit for foreign dividends should be by reference to the FNR, rather than by reference to the actual or effective tax incurred overseas.
Issue II: Was compound interest payable on tax levied in breach of EU law, on the basis that HMRC were unjustly enriched by the opportunity to use the money in question?
Held: HMRC’s appeal Allowed. Sempra Metals Ltd v IRC failed to allow for several features, and there were later inconsistent developments and cases.
Issue III: does a claim in restitution lie to recover lawful ACT which was set against unlawful mainstream corporation tax?
Held: No. HMRC’s appeal was allowed. Setting the unlawful MCT against the lawful ACT was not enough to qualify as a ‘San Giorgio’ claim.
Following Issue I, Issue IV did not arise.
Issue V(a): where ACT from a pool including unlawful and lawful ACT is set against an unlawful MCT liability, is the unlawful ACT regarded as a pre-payment of the unlawful MCT liability or is the ACT so utilised regarded as partly lawful and unlawful pro rata?
Held: PAC’s cross-appeal was allowed. . Unlawful ACT is set first against unlawful MCT. Because unlawful MCT is a nullity, the unlawful ACT is recoverable unless it has been set against a lawful MCT charge.
Issue V(b): Is domestic FII when carried back to an earlier quarter, to be treated as having been applied to relieve the lawful and unlawful ACT pro rata, or only lawful ACT?
Held: PAC’s cross-appeal allowed. Domestic FII carried back to an earlier quarter is to be applied to relieve only lawful ACT. HMRC’s pro rata approach would deprive a company of the tax credit at the FNR required under EU law.

Lord Mance, Lord Sumption, Lord Reed, Lord Carnwath, Lord Hodge
[2018] UKSC 39, [2018] WLR(D) 527, [2018] STC 1657, [2019] AC 929, [2018] 3 WLR 652, [2018] BTC 31, [2018] STI 1499, UKSC 2016/0102
Bailii, Bailii Summary, WLRD, SC, SC Summary, SC Summary Video, SC 2018 Feb 20 am Video, SC 2018 Feb 20 pm Video, SC 2018 Feb 21 am Video, SC 2018 Feb 21 pm Video
Income and Corporation Taxes Act 1988 231(1) 238(1) 239
England and Wales
Citing:
At CA – The Prudential Assurance Company Ltd v HM Revenue and Customs CA 19-Apr-2016
The issues on this appeal all relate to what have been called ‘portfolio holdings’; that is to say dividends paid on shares in foreign companies held as investments, where the investor holds less than 10 per cent of the voting power in the company . .
Cited – Metallgesellschaft Ltd and Others v Inland Revenue Commissioners and Another Hoechst Ag and Another v Same ECJ 8-Mar-2001
The British law which meant that non-resident parent companies of British based businesses were not able to recover interest on payments of advance corporation tax, was discriminatory against other European based companies. Accordingly the law was . .
Cited – Test Claimants In The FII Group Litigation v CIR ECJ 12-Dec-2006
ECJ (Opinion of Geelhoed AG) Interpretation of Articles 43 and 56 EC and Articles 4(1) and 6 of Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent . .
Cited – Amministrazione Delle Finanze Dello Stato v Spa San Giorgio ECJ 9-Nov-1983
ECJ Questions submitted for a preliminary ruling – reference to the court – right of every national court – stage of the proceedings before the national court – nature of the decision to be given by the national . .
Cited – The Test Claimants In The CFC and Dividend Group Litigation v Inland Revenue ECJ 23-Apr-2008
First subparagraph of Article 104(3) of the Rules of Procedure – Freedom of establishment – Free movement of capital – Direct taxation – Corporation tax – Share dividends paid to a resident company by a non-resident company – Rules on controlled . .
Cited – Haribo Lakritzen Hans Riegel BetriebsgmbH and Another v Linz ECJ 10-Feb-2011
Free movement of capital – Corporation tax – Exemption of nationally-sourced dividends – Exemption of foreign-sourced dividends only if certain conditions are complied with – Application of an imputation system to non’exempt foreign’sourced . .
Cited – Test Claimants In the FII Group Litigation v HM Revenue and Customs ChD 27-Nov-2008
The claimants were companies with parent companies in the UK and other subsidiaries not so resident, both in the EU and outside. They complained of the differences in treatment under corporation tax of the payment of dividends between the . .
Cited – Test Claimants in the FII Group Litigation v Commissioners of Inland Revenue and Another ECJ 13-Nov-2012
Articles 49 TFEU and 63 TFEU – Payment of dividends – Corporation tax – Case C-446/04 – Test Claimants in the FII Group Litigation – Interpretation of the judgment – Prevention of economic double taxation – Equivalence of the exemption and . .
Overruled in Part – Sempra Metals Ltd v Inland Revenue Commissioners and Another HL 18-Jul-2007
The parties agreed that damages were payable in an action for restitution, but the sum depended upon to a calculation of interest. They disputed whether such interest should be calculated on a simple or compound basis. The company sought compound . .
Cited – Westdeutsche Landesbank Girozentrale v Islington London Borough Council HL 22-May-1996
Simple interest only on rate swap damages
The bank had paid money to the local authority under a contract which turned out to be ultra vires and void. The question was whether, in addition to ordering the repayment of the money to the bank on unjust enrichment principles, the court could . .
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – Morris-Garner and Another v One Step (Support) Ltd SC 18-Apr-2018
The Court was asked in what circumstances can damages for breach of contract be assessed by reference to the sum that the claimant could hypothetically have received in return for releasing the defendant from the obligation which he failed to . .
Cited – Johnson v Unisys Ltd HL 23-Mar-2001
The claimant contended for a common law remedy covering the same ground as the statutory right available to him under the Employment Rights Act 1996 through the Employment Tribunal system.
Held: The statutory system for compensation for unfair . .
Cited – Fleming (T/A Bodycraft) v Revenue and Customs HL 23-Jan-2008
The transitional rules introducing time limits for failing to deduct VAT inputs made insufficient allowance for the decisions in Marks and Spencer and Grundig.
Held: Lord Hope said: ‘To be compatible with EU law, taxpayers were entitled to be . .
Cited – Littlewoods Ltd and Others v Commissioners for Her Majesty’s Revenue and Customs SC 1-Nov-2017
The appellants had overpaid under a mistake of law very substantial sums in VAT over several years. The excess had been repaid, but with simple interest and not compound interest, which the now claimed (together with other taxpayers amounting to 17 . .
Cited – Revenue and Customs v The Investment Trust Companies SC 11-Apr-2017
Certain investment trust companies (ITCs) sought refunds of VAT paid on the supply of investment management services. EU law however clarified that they were not due. Refunds were restricted by the Commissioners both as to the amounts and limitation . .
Cited – Littlewoods Retail Ltd and Others v HM Revenue and Customs (No 2) ChD 28-Mar-2014
The claimants had recovered very substantial overpayments made of VAT. They sought recovery of compound interest. The ECJ, on reference, said that this was a matter for national law.
Held: The claim succeeded. The sections of the 1994 Act were . .
Cited – Littlewoods Ltd and Others v HM Revenue and Customs CA 21-May-2015
The company sought repayment by way of restitution for overpaid taxes. The tax had been repaid, but only as simple interest, and not compounded. Both parties now appealed from a decision that the Act did not apply to exclude under sections 78 and 80 . .
Cited – Moses v Macferlan KBD 1760
An action for money had and received will only lie where it is inequitable for the defendant to retain the money. The defendant in an action for money had and received ‘can be liable no further than the money he has received’. . .
Cited – Walker v Constable 20-Jun-1798
. .
Cited – Banque Financiere De La Cite v Parc (Battersea) Ltd and Others HL 16-Apr-1998
The making of an order for restitution after finding an unjust enrichment by subrogation, is not dependant upon having found any common or unilateral intention of the parties. The House distinguished between contractual subrogation of the kind most . .
Cited – Walker v Constable 20-Jun-1798
. .
Cited – Depcke v Munn And Another 4-Feb-1828
Lord Tenterden CJ said: ‘the courts have held again and again that interest cannot be recovered in an action for money had and received . . This has been decided so often, that I cannot now venture to allow the question to be agitated.’ . .
Cited – Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd HL 15-Jun-1942
A contract for the supply by the respondents of special machinery to be manufactured by them was treated as an ordinary contract for the sale of goods. It began valid, but suffered frustration by the outbreak of war.
Held: Lord Wright restated . .
Cited – BP Exploration Co (Libya) Ltd v Hunt (No 2) 1979
The contract between the parties relating to an oil concession in Libya had been frustrated by the nationalisation of the field.
Held: The court considered the setting of damages where the plaintiff had delayed in notifying the defendant of . .
Cited – Riches v Westminster Bank Ltd HL 1947
The amount of interest payable on compulsory purchase of land depends upon the value given to the land and the length of the period from the time of entry until reinstatement, the period during which the claimant is dispossessed. During that time, . .

Lists of cited by and citing cases may be incomplete.

Company, European, Corporation Tax

Updated: 17 January 2022; Ref: scu.620139

James Cheap of Leith, and Others, Executors of Thomas Cheap, Late Merchant In London, Deceased v Andrew Aiton and Company, Merchants, Glasgow: HL 11 Dec 1772

Dissolution of Copartnery – Liability of Representatives of a deceased Partner, for goods ordered in Company’s name by one of the Partners, in alleged ignorance of his Death.- Circumstances where representatives of a deceased partner not held liable for goods so ordered, and furnished after the death was known to the sellers. Reversing the judgment of the Court of Session.

[1772] UKHL 2 – Paton – 283, (1772) 2 Paton 283
Bailii

Company

Updated: 13 January 2022; Ref: scu.561695

Brett v Migration Solutions Holdings Ltd and Others: ChD 11 Mar 2016

Petition brought under section 994 of the Companies Act 2006 in which the petitioner, Mr Brett, claims that he has been the victim of unfair conduct by the majority shareholders in Migration Solutions Holdings Ltd and sought an order that they pay a proper value for his shareholding at a value determined by the court.
Held: The claimant had not been unfairly excluded from the management of the company. The petition failed.

Mann J
[2016] EWHC 523 (Ch)
Bailii
Companies Act 2006 994
England and Wales

Company

Updated: 12 January 2022; Ref: scu.561098

Charles Richardson, On Behalf Of Himself And All Other Persons (Except The Parties Hereinafter Named As Defendants Hereto) Who, At The Time Of The Dissolution Thereof, Were Members Of A Certain Association Or Club Called The Alliance Club: 20 Apr 1847

A club, composed of numerous members, was dissolved. Two of the managing committee possessed themselves of the assets, and applied them in winding up the affairs. Held, that they might be sued by one member ‘on behalf,’ and co., for an account of the monies received and its application, and to bring back the balance, if any, without making the other members parties, and without seeking a general winding up of the concern.

[1847] EngR 401, (1847) 11 Beav 17, (1847) 50 ER 722
Commonlii
England and Wales

Company

Updated: 12 January 2022; Ref: scu.301017

Williams and Another v Natural Life Health Foods Ltd and Another: QBD 18 Jan 1996

A company director can be liable for the negligent mis-statement of the company if he warrants his own personal skill.

Langley J
Independent 18-Jan-1996, [1996] BCLC 288
England and Wales
Cited by:
Appeal from – Williams; Reid v Natural Life Health Foods Limited and Mistlin CA 5-Dec-1996
(Majority) A director of a one man company himself could himself be liable for negligent advice outside his duties as a director where his personal character known to be relied upon. In order to fix a director with personal liability, it must be . .
At first instance – Williams and Another v Natural Life Health Foods Ltd and Another HL 30-Apr-1998
A company director was not personally reliable in negligence for bad advice given by him as director unless it could clearly be shown that he had willingly accepted such personal responsibility. A special relationship involving an assumption of . .

Lists of cited by and citing cases may be incomplete.

Company, Negligence

Updated: 12 January 2022; Ref: scu.90526

Kebbell and Another v Hat and Mitre Plc and Others (As Joint Administrators of Hat and Mitre Plc): ChD 8 Oct 2020

Application by two shareholders and directors of the Company, the principal purpose of which is to obtain a determination that the Company is not, or no longer should be, in administration.

Trower J
[2020] EWHC 2649 (Ch)
Bailii
England and Wales

Company, Insolvency

Updated: 12 January 2022; Ref: scu.654540

Lindsay v O’Loughnane: QBD 18 Mar 2010

The claimant had purchased Euros through a foreign exchange dealer. The dealer company became insolvent, causing losses to the claimant, who sought to recover from the company’s managing director, the defendant, saying that he was aware of the insolvency but had continued to trade using the claimant’s money to pay creditors rather than placing it in a client account.
Held: The claim succeeded. The Act was not to be used to evade liability for fraud, and ‘ the defendant did impliedly represent (i) that the business of FX Solutions was being carried out properly and legitimately, in other words that the company was not insolvent and (ii) that the claimant’s monies would be held on trust until used to buy foreign exchange for the claimant. On any view those representations were false to the knowledge of the defendant and were accordingly fraudulent, since by the time they were made on 5 June 2008, the defendant knew that FX Solutions was insolvent and that the monies paid by the claimant would not be held on trust but would be used to pay other creditors with a view to keeping the company afloat as long as possible by ‘robbing Peter to pay Paul’.

Flaux J
[2010] EWHC 529 (QB), [2012] BCC 153
Bailii
Statute of Frauds (Amendment) Act 1828 6
England and Wales
Citing:
Cited – Derry v Peek HL 1-Jul-1889
The House heard an action for damages for deceit or fraudulent misrepresentation.
Held: The court set out the requirements for fraud, saying that fraud is proved when it is shown that a false representation has been made knowingly or without . .
Cited – Hornal v Neuberger Products Ltd CA 1956
Proof Standard for Misrepresentation
The court was asked what was the standard of proof required to establish the tort of misrepresentation, and it contrasted the different standards of proof applicable in civil and criminal cases.
Held: The standard was the balance of . .
Cited – AIC Ltd v ITS Testing Services (UK) Ltd (‘the Kriti Palm’) CA 28-Nov-2006
The defendant appealed a finding of deceit. Having issued its certificate as to the quality of a cargo of gasoline, it then failed to disclose to the party who had paid it to produce the certificate, information it had which cast doubt on the . .
Cited – Dadourian Group International Inc and others v Simms and others CA 13-Mar-2009
Arden LJ summarised the approach to be taken by a court faced with an allegation of fraud: ‘Their Lordships affirmed the decision in Re H and provided an explanation of what Lord Nicholls’ judgment meant. Baroness Hale (with whom the other Law Lords . .
Cited – Contex Drouzhba Ltd v Wiseman and Another CA 20-Nov-2007
The defendant was a director of a company. He signed a letter for the company promising to pay for goods ordered. The representation was found to have been made fraudulently because he knew the company was insolvent, and unable to pay. He now . .
Cited – Dadourian Group International Inc and others v Simms and others ChD 10-Apr-2008
Warren J said: ‘As to that, the judge directed himself in law . . as follows: ‘it is a question of fact whether a representee has been induced to enter into a transaction by a material misrepresentation intended by the representor to be relied upon . .
Cited – Lyde v Barnard CExC 1836
The question before the court was whether a misrepresentation, that a particular fund in which Lord Edward Thynne had a life interest was charged with only three annuities, was a representation relating to Lord Edward’s credit or ability within the . .
Cited – Briess v Woolley HL 1954
A fraudulent misrepresentation made in the course of pre-contractual discussions by a shareholder in a company. He was subsequently authorised by the other shareholders to continue the negotiations as their agent, and in due course a contract was . .
Cited – Standard Chartered Bank v Pakistan National Shipping Corporation, Standard Chartered Bank v Pakistan National Shipping Corporation and Others and Another and Others (Nos 2 and 4) HL 6-Nov-2002
Fraudulent Misrepresentation by Company Director
Fraudulent bills of lading had been issued in order to rely upon letters of credit issued by the bank. The director signing the bills sought to avoid personal liability, saying it was the Act of the company. The defendant company also appealed on . .
Cited – Pasley v Freeman 1789
Tort of Deceit Set Out
The court considered the tort of deceit. A representation by one person that another person was creditworthy was actionable if made fraudulently. A false affirmation made by the defendant with intent to defraud the plaintiff, whereby the plaintiff . .
Cited – 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 . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .
Cited – Contex Drouzhba Ltd v Wiseman and Another CA 20-Nov-2007
The defendant was a director of a company. He signed a letter for the company promising to pay for goods ordered. The representation was found to have been made fraudulently because he knew the company was insolvent, and unable to pay. He now . .
Cited – Claymore Services Ltd v Nautilus Properties Ltd TCC 20-Mar-2007
In order to reflect the principle that interest should reflect the status of the successful party and the rate at which they would be able to borrow commercially, the court may consider awarding a higher rate of interest than 1% over Bank of England . .

Cited by:
Cited – Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd and Another ComC 21-Jan-2011
The defendants sought to set aside orders allowing the claimants to serve proceedings alleging repudiation of a charterparty in turn allowing a claim against the defendants under a guarantee. The defendant said the guarantee was unenforceable under . .

Lists of cited by and citing cases may be incomplete.

Torts – Other, Company

Updated: 12 January 2022; Ref: scu.403367

Avon Ground Rents Ltd v 51 Earls Court Square RTM Company Ltd: UTLC 14 Jan 2016

UTLC LANDLORD AND TENANT – RIGHT TO MANAGE – description of premises in company’s articles of association – whether a self-contained building – whether an RTM company – interpretation of articles – Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002 – appeal dismissed

[2016] UKUT 22 (LC)
Bailii
Commonhold and Leasehold Reform Act 2002
England and Wales

Landlord and Tenant, Company

Updated: 10 January 2022; Ref: scu.560308

Secretary of State for Business, Innovation and Skills v Marshall: ChD 30 Oct 2015

Application by the Secretary of State for Business, Innovation and Skills for an order that Mr James John Marshall be treated as if he is in contempt of court pursuant to section 453C of the Companies Act.

Pelling QC HHJ
[2015] EWHC 3874 (Ch)
Bailii
England and Wales

Company, Contempt of Court

Updated: 10 January 2022; Ref: scu.560282

Abela and Others v Baadarani: ChD 24 Jul 2015

In 2002, Mr Abela and his companies entered into a share purchase agreement with Mr Baadarani. In April 2009, Mr Abela and his companies commenced proceedings in relation to a dispute arising out of that transaction.

Norris J
[2015] EWHC 2393 (Ch)
Bailii
England and Wales
Cited by:
Cited – Cameron v Liverpool Victoria Insurance Co Ltd SC 20-Feb-2019
The Court was asked in what circumstances is it permissible to sue an unnamed defendant? The respondent was injured when her car collided with another. The care was insured but by a driver giving a false name. The car owner refused to identify him. . .

Lists of cited by and citing cases may be incomplete.

Company, Contract

Updated: 10 January 2022; Ref: scu.551286

Capita (Banstead 2011) Ltd and Another v RFB Group Ltd: CA 21 Dec 2015

A claim under an indemnity clause contained in a share purchase agreement. It raises the question whether, if the seller of shares in a company undertakes to indemnify the purchaser in respect of liabilities which the purchaser may incur as a result of negligently performed services provided by the company to a recipient before the transfer date of the shares and the company provides services to a customer both before and after the Transfer Date, it is appropriate, as between the seller and the purchaser of the shares, to apportion the liability incurred to that customer by reference to the time when that liability is incurred or by reference to some other criteria and, if so, what.

Longmore, Gloster LJJ, Henderson J
[2015] EWCA Civ 1310
Bailii
England and Wales

Company, Contract

Updated: 09 January 2022; Ref: scu.558056

In re a Company (No 0012209 of 1991): ChD 1992

It is an abuse of the process of the court to make a statutory demand or present a winding-up petition based on a claim to which there is a triable defence. Where a statutory demand is made but disputed on reasonable grounds, the creditor may find himself liable to indemnity costs on its dismissal.
Hoffmann J said: ‘It does seem to me that a tendency has developed, possibly since the decision in Cornhill Insurance plc v Improvement Services Ltd [1986] BCLC 26, [1986] 1 WLR 114, to present petitions against solvent companies as a way of putting pressure upon them to make payments of money which is bona fide disputed rather than to invoke the procedures which the rules provide for summary judgment. I do not for a moment wish to detract from anything which was said in the Cornhill Insurance case, which indeed followed earlier authority, to the effect that a refusal to pay an indisputable debt is evidence from which the inference may be drawn that the debtor is unable to pay. It was, however, a somewhat unusual case in which it was quite clear that the company in question had no grounds at all for its refusal. Equally it seems to me that if the court comes to the conclusion that a solvent company is not putting forward any defence in good faith and is merely seeking to take for itself credit which it is not allowed under the contract, then the court would not be inclined to re-strain presentation of the petition. But, if, as in this case, it appears that the defence has a prospect of success and the company is solvent, then I think that the court should give the company the benefit of the doubt and not do anything which would encourage the use of the Companies Court as an alternative to the RSC Ord 14 procedure.’

Hoffmann J
[1992] 2 All ER 797, [1992] 1 WLR 351, [1992] BCLC 865
England and Wales
Cited by:
Cited – Ridehalgh v Horsefield; Allen v Unigate Dairies Ltd CA 26-Jan-1994
Guidance for Wasted Costs Orders
Guidance was given on the circumstances required for the making of wasted costs orders against legal advisers. A judge invited to make an order arising out of an advocate’s conduct of court proceedings must make full allowance for the fact that an . .
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.

Legal Professions, Company, Insolvency

Updated: 09 January 2022; Ref: scu.278997

Horcal Ltd v Gatland: ChD 1983

Directors have a positive duty to disclose breaches of fiduciary duty. A failure by a director of a company, as opposed to an employee, to disclose an earlier breach of fiduciary duty would render an agreement terminating his contract of service (on terms advantageous to the director) void on the grounds of mistake. Bell v Lever did not apply where there was a fiduciary relationship between the parties.

Glidewell J
[1983] BCLC 60
England and Wales
Citing:
Distinguished – Bell v Lever Brothers Ltd HL 15-Dec-1931
Contract – Mutual Mistake Test
Bell was director and chairman of Niger, a subsidiary of Lever Brothers Ltd who dismissed him, offering and paying pounds 30,000 compensation. Lever then discovered that Mr Bell had made secret profits at the expense of Niger for which he could have . .
Appealed to – Horcal Ltd v Gatland CA 1984
The court considered the arguments presented as to the duty of a director of a company to disclose his own breach of fiduciary duty: ‘Counsel . . submitted, as a general proposition, that, putting fraud on one side, there is no general duty on . .
Cited – Regal (Hastings) Ltd v Gulliver HL 20-Feb-1942
Directors Liability for Actions Ouside the Company
Regal negotiated for the purchase of two cinemas in Hastings. There were five directors on the board, including Mr Gulliver, the chairman. Regal incorporated a subsidiary, Hastings Amalgamated Cinemas Ltd, with a share capital of 5,000 pounds. There . .

Cited by:
Appeal from – Horcal Ltd v Gatland CA 1984
The court considered the arguments presented as to the duty of a director of a company to disclose his own breach of fiduciary duty: ‘Counsel . . submitted, as a general proposition, that, putting fraud on one side, there is no general duty on . .
Cited – Item Software (UK) Ltd v Fassihi and Others ChD 5-Dec-2002
Enforcement of confidentiality clause in contract of employment on termination. . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 09 January 2022; Ref: scu.194875

Setchim and Another v Secretary of State for Foreign and Commonwealth Affairs and Others: ChD 4 Jul 2014

The commonwealth Institute, a registered charity, had gone into solvent members’ voluntary winding up, and the court now considered the propriety of passing the funds to a successor charity.

David Richards
[2014] EWHC 2218 (Ch)
Bailii
Insolvency Act 1986 112
England and Wales

Company, Charity

Updated: 09 January 2022; Ref: scu.533808

Global Torch Ltd v Apex Global Management Ltd and Others: CA 10 Jul 2013

[2013] EWCA Civ 819
Bailii
England and Wales
Citing:
Appeal from – Global Torch Ltd v Apex Global Management Ltd ChD 13-Feb-2013
Applications within unfair prejudice petitions. . .
Leave – Global Torch Ltd and Others v Apex Global Management CA 18-Apr-2013
Oral renewal of an application for permission to appeal . .

Cited by:
See Also – Apex Global Management and Another v Global Torch Ltd and Others ChD 30-Oct-2013
The court rejected an application by Prince Abdulaziz for a variation of case management orders. . .
See Also – Prince Abdulaziz v Apex Global Management Ltd and Another SC 26-Nov-2014
The appellant was involved in very substantial litigation with the respondents. As a member of the Saudi Royal family he said that by convention he was not allowed to sign a witness statement, and appealed inter alia against orders requiring him to . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 08 January 2022; Ref: scu.512253

Global Torch Ltd v Apex Global Management Ltd: ChD 13 Feb 2013

Applications within unfair prejudice petitions.

Morgan J
[2013] EWHC 223 (Ch)
Bailii
England and Wales
Cited by:
Application for leave – Global Torch Ltd and Others v Apex Global Management CA 18-Apr-2013
Oral renewal of an application for permission to appeal . .
Appeal from – Global Torch Ltd v Apex Global Management Ltd and Others CA 10-Jul-2013
. .
See Also – Apex Global Management and Another v Global Torch Ltd and Others ChD 30-Oct-2013
The court rejected an application by Prince Abdulaziz for a variation of case management orders. . .
At First Instance – Prince Abdulaziz v Apex Global Management Ltd and Another SC 26-Nov-2014
The appellant was involved in very substantial litigation with the respondents. As a member of the Saudi Royal family he said that by convention he was not allowed to sign a witness statement, and appealed inter alia against orders requiring him to . .

Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 08 January 2022; Ref: scu.470950

Global Torch Ltd and Others v Apex Global Management: CA 18 Apr 2013

Oral renewal of an application for permission to appeal

[2013] EWCA Civ 507
Bailii
England and Wales
Citing:
Application for leave – Global Torch Ltd v Apex Global Management Ltd ChD 13-Feb-2013
Applications within unfair prejudice petitions. . .

Cited by:
Leave – Global Torch Ltd v Apex Global Management Ltd and Others CA 10-Jul-2013
. .
See Also – Apex Global Management and Another v Global Torch Ltd and Others ChD 30-Oct-2013
The court rejected an application by Prince Abdulaziz for a variation of case management orders. . .
Leave – Prince Abdulaziz v Apex Global Management Ltd and Another SC 26-Nov-2014
The appellant was involved in very substantial litigation with the respondents. As a member of the Saudi Royal family he said that by convention he was not allowed to sign a witness statement, and appealed inter alia against orders requiring him to . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 08 January 2022; Ref: scu.509306

EIC Services Ltd European Internet Capital Ltd v Phipps, Paul, Barber: CA 30 Jul 2004

Whether issue of additional shares had been properly authorised

Lord Justice Peter Gibson Mr Justice Newman Lord Justice Sedlay
[2004] EWCA Civ 1069, [2004] 2 BCLC 589, [2005] 1 WLR 1377, [2005] 1 All ER 338, [2004] BCC 814
Bailii
Companies Act 1985 35A(1)
England and Wales
Citing:
Cited – Hill v Permanent Trustee Company of New South Wales Ltd PC 1930
A bonus issue does not reduce those assets since the assets and liabilities side of the balance sheet remains unchanged but the capital and reserves side of the balance sheet is rearranged with a reduction in the amount of the profits or other . .
Cited – Re Cleveland Trust plc ChD 1991
The issue and allotment of bonus shares, once accepted by the allottee shareholder, involves a relationship between the company and the shareholder analogous to a contractual relationship. . .
Cited – Bell v Lever Brothers Ltd HL 15-Dec-1931
Contract – Mutual Mistake Test
Bell was director and chairman of Niger, a subsidiary of Lever Brothers Ltd who dismissed him, offering and paying pounds 30,000 compensation. Lever then discovered that Mr Bell had made secret profits at the expense of Niger for which he could have . .
Cited – Associated Japanese Bank (International) Ltd v Credit du Nord SA 1988
A contract of guarantee was made, but based upon a term of fundamental importance which was mistaken as to the existence of certain machines.
Held: The court must first look to the nature of the purported agreement. Steyn J said: ‘Logically, . .
Cited – Great Peace Shipping Ltd v Tsavliris (International) Ltd CA 14-Oct-2002
The parties contracted for the hire of a ship. They were each under a mistaken impression as to its position, and a penalty became payable. The hirer claimed that the equitable doctrine of mutual mistake should forgive him liability.
Held: . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 08 January 2022; Ref: scu.199804

In Re Lee, Behrens and Co Ltd: ChD 1932

The Court was asked whether an agreement by the company to pay an annuity to the widow (a shareholder) of a former managing director of the company was ultra vires.
Held: Eve J set out three applicable tests: ‘But whether they be made under an express or implied power, all such grants involve an expenditure of the company’s money, and that money can only be spent for the purposes reasonably incidental to the carrying on of the company’s business, and the validity of such grants is to be tested, as is shown in all the authorities, by the answers to three pertinent questions: (i) Is the transaction reasonably incidental to the carrying on of the company’s business? (ii) Is it a bona fide transaction? and (iii) Is it done for the benefit and to promote the prosperity of the company?’

Eve J
[1932] 2 Ch 46
England and Wales
Cited by:
Distingished – Charterbridge Corporation Ltd v Lloyds Bank ChD 1969
Pomeroy Developments (Castleford) Ltd (‘Castleford’) was one of a large group of companies headed by Pomeroy Developments Ltd (‘Pomeroy’). None of the companies ere subsidiaries of Pomeroy, but they had common shareholdings, directors, and officers. . .
Criticised – Rolled Steel Products (Holdings) Ltd v British Steel Corporation and Others CA 1986
The plaintiff company had guaranteed borrowings, using powers within the memorandum of association, but for purposes which were held to be improper, because they were not in the interests of the plaintiff company itself. One issue was whether the . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 08 January 2022; Ref: scu.654584

Societe Cooperative De Production Seafrance Sa v The Competition and Markets Authority and Another: SC 16 Dec 2015

The CMA had decided to intervene in purchases by the appellant from a competitor when it ceased trading.The French court had ordered the sale of the assts.
Held: UK law distinguishes between the acquisition of assets constituting a business and the acquisition of ‘bare’ assets. Concentrations arising from the acquisition of bare assets are not subject to statutory merger control ex ante, even if they have potentially adverse effects on competition, although they may be subject to heightened regulation
Held: The Authority’s appeal succeeded. The provisions of the 2002 Act which dealt with the control of mergers was not limited in its range to businesses still omngoing. The fact that the acquisition was of the assets of an insolvent, no longer trading, company did not exclude the Authority’s role. The decision of the CAT was restored.
The possession of relevant ‘activities’ is simply a descriptive characteristic of an enterprise. It may be characteristic of the enterprise notwithstanding that the activities are not actually being performed at the moment of the transaction, provided that there still exists the capacity to carry them on as part of the same business, whether in the hands of the existing proprietor or of someone else. That is why Sir Colin Rimer was right in his instinctive view that the sale of a seasonal business out of season would in principle be subject to statutory merger control.

Lord Neuberger, President, Lord Clarke, Lord Sumption, Lord Reed, Lord Hodge
[2015] UKSC 75, [2015] Bus LR 1573, [2015] WLR(D) 527, UKSC 2015/0127
Bailii, Bailii Summary, WLRD, SC, SC Summary
Enterprise Act 2002
England and Wales
Citing:
See Also – The Societe Cooperative De Production Seafrance SA v Competition and Markets Authority (Ruling (Permission To Appeal) CAT 20-Jan-2015
. .
Appeal from – Societe Cooperative De Production Seafrance Sa v Competition and Markets Authority CA 15-May-2015
The company appealed against the rejection of its challenge to a decision that the conditions had arisen allowing the defendant to intervene in its purchase of certain shares in a rival cross channel ferry company. he question was whether part of . .
See Also – Societe Cooperative De Production Seafrance SA v Competition and Markets Authority CA 10-Jul-2015
The CA had earlier allowed an appeal by the company to hold the respondent’s decsion wrong that an event had occurred allowing it to intervene in the acquisition of a competitor’s assets. Leave to appeal to the Supreme Court remained pending, but . .
Cited – Groupe Eurotunnel Sa v Competition Commission and Others CAT 4-Dec-2013
. .
See Also – Groupe Eurotunnel SA v Competition Commission CAT 30-Aug-2013
. .
Restored – Groupe Eurotunnel SA v Competition and Markets Authority CAT 9-Jan-2015
Judgment . .

Lists of cited by and citing cases may be incomplete.

Commercial, Company

Updated: 08 January 2022; Ref: scu.556978

County Leasing Asset Management Ltd and Others v Hawkes: CA 4 Dec 2015

The court was asked as to the principles applicable to the court’s discretion, when making an order for the restoration to the register of a dissolved company, to order that the running of time for the bringing of claims by the company for the purposes of the Limitation Act 1980 should be suspended during all or part of the period when the company was dissolved.

Jackson, Briggs, King LJJ
[2015] EWCA Civ 1251
Bailii
Companies Act 2006 1029, Limitation Act 1980
England and Wales

Company, Limitation

Updated: 08 January 2022; Ref: scu.556787

Severn Trent Water Ltd (Private Companies ): ICO 10 Nov 2015

ICO The complainant has requested information about works carried out around his property. Severn Trent Water Ltd (STW) has told the complainant that it does not hold the information he has requested and that, if it did hold it, it would refuse to comply with the request under regulation 12(4)(b) because it is manifestly unreasonable. The Commissioner’s decision is that STW is not correct when it says it does not hold any of the requested information. On the balance of probabilities, he is prepared to accept that STW does not hold the majority of the information and has fulfilled its obligations under regulation 5(1) of the EIR with respect to this information. He has decided, however, that STW does hold a little relevant information but that it is not obliged to comply with this part of the request in line with the provision under regulation 12(4)(b). The public interest favours maintaining the exception. The Commissioner does not require STW to take any steps. This decision notice is currently under appeal to the Tribunal.
EIR 12(4)(b): Not upheld

[2015] UKICO FER0583961
Bailii
England and Wales

Information, Company

Updated: 08 January 2022; Ref: scu.556730

Chalcot Training Ltd v Ralph and Another: ChD 5 May 2020

The company had entered into an investment scheme (E Shares) to avert liability to tax. On the assumed failure of that scheme the company now sought to avoid set aside all the material transactions that were entered into as part of its E Shares scheme on the grounds that they were unlawful on various company law grounds. The Company said that the transactions should properly be characterised as distributions to shareholders, rather than remuneration to directors/employees (as they were described), and that they were therefore unlawful; additionally, the Company asserts that the transactions fell foul of restrictions in the 2006 Act relating to the issue of shares at a discount (s.580) and the payment of commissions (ss.552 and 553).
Held: The claims were dismissed.

Michael Green QC
[2020] EWHC 1054 (Ch)
Bailii
Companies Act 2006 580 552 53
England and Wales

Taxes Management, Company

Updated: 07 January 2022; Ref: scu.650754

Krys and Others v KBC Partners Lp and Others: PC 19 Nov 2015

From the Court of Appeal of the Eastern Caribbean Supreme Court (British Virgin Islands) – The parties disputed the destination for funds held by a limited partnership set up to manage investments of principals whose identities were hidden.

Lord Mance, Lord Sumption, Lord Reed, Lord Toulson, Lord Hodge
[2015] UKPC 46
Bailii

Commonwealth, Company, Insolvency

Updated: 06 January 2022; Ref: scu.554763

Thomas Paterson, Esq v Charles Cockburn, Esq: HL 11 Jan 1725

Mutual Contract, South Sea stock – At compromising a transaction relative to South sea stock, one of the parties grants an obligation to the other, to pay him a certain sum with this proviso, that whereas the obligee intended to sue two of the directors to make void his own bargain, if he succeeded, the obligor was to be free of his obligation. The obligee having got an abatement by compromise from the directors, the obligor was entitled to a proportional abatement.

[1725] UKHL Robertson – 503, (1725) Robertson 503
Bailii
Scotland

Company

Updated: 05 January 2022; Ref: scu.554115

Rolled Steel Products (Holdings) Ltd v British Steel Corporation and Others: CA 1986

The plaintiff company had guaranteed borrowings, using powers within the memorandum of association, but for purposes which were held to be improper, because they were not in the interests of the plaintiff company itself. One issue was whether the receiver of the company could assert the invalidity of the transactions as against the defendant companies who had been party to the proposals, and had full knowledge that they were ‘not entered into by the plaintiff for any purpose of the plaintiff but were a gratuitous disposition of the property of the plaintiff’. Complaint was also made as to the judge’s eight month delay in handing down his judgment.
Held: The court related six principles: ‘(1) The basic rule is that a company incorporated under the Companies Acts only has the capacity to do those acts which fall within its objects as set out in its memorandum of association or are reasonably incidental to the attainment or pursuit of those objects. Ultimately, therefore, the question whether a particular transaction is within or outside its capacity must depend on the true construction of the memorandum. (2) Nevertheless, if a particular act (such as each of the transactions of 22 January 1969 in the present case) is of a category which, on the true construction of the company’s memorandum, is capable of being performed as reasonably incidental to the attainment or pursuit of its objects, it will not be rendered ultra vires the company merely because in a particular instance its directors, in performing the act in its name, are in truth doing so for purposes other than those set out in its memorandum. Subject to any express restrictions on the relevant power which may be contained in the memorandum, the state of mind or knowledge of the persons managing the company’s affairs or of the persons dealing with it is irrelevant in considering questions of corporate capacity. (3) While due regard must be paid to any express conditions attached to or limitations on powers contained in a company’s memorandum (e.g. a power to borrow only up to a specified amount), the court will not ordinarily construe a statement in a memorandum that a particular power is exercisable ‘for the purposes of the company’ as a condition limiting the company’s corporate capacity to exercise the power; it will regard it as simply imposing a limit on the authority of the directors: see the David Payne case [1904] 2 Ch 608. (4) At least in default of the unanimous consent of all the shareholders (as to which see below), the directors of a company will not have actual authority from the company to exercise any express or implied power other than for the purposes of the company as set out in its memorandum of association. (5) A company holds out its directors as having ostensible authority to bind the company to any transaction which falls within the powers expressly or impliedly conferred on it by its memorandum of association. Unless he is put on notice to the contrary, a person dealing in good faith with a company which is carrying on an intra vires business is entitled to assume that its directors are properly exercising such powers for the purposes of the company as set out in its memorandum. Correspondingly, such a person in such circumstances can hold the company to any transaction of this nature. (6) If, however, a person dealing with a company is on notice that the directors are exercising the relevant power for purposes other than the purposes of the company, he cannot rely on the ostensible authority of the directors and, on ordinary principles of agency, cannot hold the company to the transaction.’
Lawton LJ discussed the proper approach where it was questioned whether a case was being run on the pleadings: ‘I wish however to add a comment about the pleading points which have had to be considered in this appeal. From the way they were raised by counsel and dealt with by the trial judge, I was left with the impression that neither the judge nor defending counsel appreciated as fully as they should have done the need for precision and expedition when dealing with pleading points.
My recent experience in this court shows that some counsel and judges are not giving pleadings the attention which they should. Pleadings are formal documents which have to be prepared at the beginning of litigation, they are essential for the fair trial of an action and the saving of time at trial. The saving of time keeps down the costs of litigation. A plaintiff is entitled to know what defences he has to meet and the defendant what claims are being made against him. If the parties do not know, unnecessary evidence may be got together and led or, even worse, necessary evidence may not be led.
Pleadings regulate what questions may be asked of witnesses in cross-examination. When counsel raises an objection to a question or a line of questioning, as Mr Morritt did on a number of occasions, the trial judge should rule on it at once. He should not regard the objection as a critical commentary on what the other side is doing. If the judge does not rule, counsel should ask him to do so. If a line of questioning is stopped because it does not relate to an issue on the pleadings, counsel should at once consider whether his pleadings should be amended. If he decides that they should, he should forthwith apply for an amendment and should specify precisely what he wants and the judge should at once give a ruling on the application. The principles upon which amendments should be allowed are well known and are set out in the current edition of the Supreme Court practice.’
Slade LJ criticised the tests set out by Eve J, which: ‘. . should in my opinion, now be recognised as being of no assistance, and indeed positively misleading, when the relevant question is whether a particular gratuitous transaction is within the company’s corporate capacity.’

Slade LJ, Browne-Wilkinson LJ
[1986] Ch 246
England and Wales
Citing:
Criticised – In Re Lee, Behrens and Co Ltd ChD 1932
The Court was asked whether an agreement by the company to pay an annuity to the widow (a shareholder) of a former managing director of the company was ultra vires.
Held: Eve J set out three applicable tests: ‘But whether they be made under an . .

Cited by:
Cited – Criterion Properties Plc v Stratford UK Properties and others CA 18-Dec-2002
The parties came together in a limited partnership to develop property. The appeal was against a refusal to grant summary judgment on a claim that one party had been induced to enter the contract by a fraudulent misrepresentation.
Held: In . .
Cited – Criterion Properties Plc v Stratford UK Properties Llc and others ChD 27-Mar-2002
Criterion sought to set aside a shareholders agreement. Their partner had said they were concerned that another party was taking Criterion over and that this would put at risk their working relationships. The agreement sought to add a poison pill to . .
Cited – Progress Property Company Ltd v Moorgarth Group Ltd SC 8-Dec-2010
The appellants appealed against rejection of their claim that there had been an unlawful distribution of capital when the appellant had sold the share capital of a subsidary at an undervalue to the respondent purchaser. The valuation had . .

Lists of cited by and citing cases may be incomplete.

Company, Litigation Practice

Updated: 05 January 2022; Ref: scu.194959

Official Receiver v Stern and Another: CA 20 Nov 2001

The director appealed against a 12 year disqualification. The basis of the disqualification was unlawful trading to the detriment of creditors, and taking excess drawings.

The Vice-Chancellor, Lord Justice Buxton, And, Lady Justice Arden
[2004] BCC 581, [2002] 1 BCLC 119, [2000] 1 WLR 2230, [2001] EWCA Civ 1787
Bailii
Company Directors Disqualification Act 1986
England and Wales
Citing:
Cited – In Re Smith and Fawcett Ltd CA 1942
Directors to act Without Collateral Purpose
The primary duty of a director imposed by the general law is that he should act in what he considers to be the best interests of the company, and not for any collateral purpose. That duty is a subjective one that depends on the directors exercising . .
Cited – Charterbridge Corporation Ltd v Lloyds Bank ChD 1969
Pomeroy Developments (Castleford) Ltd (‘Castleford’) was one of a large group of companies headed by Pomeroy Developments Ltd (‘Pomeroy’). None of the companies ere subsidiaries of Pomeroy, but they had common shareholdings, directors, and officers. . .
See Also – Official Receiver v Stern and Another CA 25-Jan-2001
. .

Cited by:
Cited – Fleurose v The Securities and Futures Authority Ltd, The Disciplinary Appeal Tribunal of the Securities & Futures Authority Ltd CA 21-Dec-2001
The applicant sought to challenge a decision suspending him from authorisation to act as a financial adviser. He was alleged to have sought to affect the Index of share values in order that his company should not be liable under certain options. He . .
Cited – Clingham (formerly C (a minor)) v Royal Borough of Kensington and Chelsea; Regina v Crown Court at Manchester Ex parte McCann and Others HL 17-Oct-2002
The applicants had been made subject of anti-social behaviour orders. They challenged the basis upon which the orders had been made.
Held: The orders had no identifiable consequences which would make the process a criminal one. Civil standards . .
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: 05 January 2022; Ref: scu.166935

William Morison, of Preston Grange, Esq; v James Smith of Whitehill, and David Burton Glazier In Edinburgh: HL 8 Apr 1719

Society – The minutes of a meeting of a company, subscribed by the preses, bore that certain members sold to another their shares of the joint stock at a given price; the person to whom the shares were so assigned afterwards entered to the management of the whole concern, and applied the profits to his use; it is found that he was obliged to pay to each partner the sums mentioned in said minute, though it was objected, that the minute was erased in some sentences, and that there was locus paenitentiae till a more formal assignment was made.
The assignee is also ordered to free the assignors from the debts of the society, and pay them interest on the sums found due.
Compensation – In a suspension, the suspender’s plea of compensation is rejected.

[1719] UKHL Robertson – 249, (1719) Robertson 249
Bailii
Scotland

Company

Updated: 05 January 2022; Ref: scu.553535

Michael Russell of London, Merchant v John Cochran of Waterside Esq: HL 12 Jun 1714

Presumption. – A bond is granted for a partnership debt to an individual creditor by one partner; the same partner afterwards executes an assignment of the partnership funds to the creditors in general, bearing to be in full payment and satisfaction of the partnership debts; this was recited in a power of attorney granted by the creditors; though the assignment was not executed by the other partner, it extinguished the bond to the individual creditor.

[1714] UKHL Robertson – 84, (1714) Robertson 84
Bailii

Company, Insolvency, Scotland

Updated: 04 January 2022; Ref: scu.553473

Dixon and Another v Blindley Heath Investments Ltd and Another: CA 9 Oct 2015

Struggle for control of a Company and, in particular, a transfer of 200 shares in the Company by the first to seventh Defendants below (as vendors) to a body corporate registered in the British Virgin Islands as purchaser pursuant to a share purchase agreement. The Appellants say that the transfer was made in breach of valid rights of pre-emption and the transaction should be unwound. If successful, they will secure legal control of the Company.

Longmore, Jackson LJJ, Hildyard J
[2015] EWCA Civ 1023
Bailii
England and Wales

Company

Updated: 04 January 2022; Ref: scu.553240

Barclays Bank Plc (T/A Barclays Global Payment Acceptance) v The Registrar of Companies and Others: ChD 7 Oct 2015

The court was asked: ‘ what steps (if any) are open to a creditor to get in additional assets belonging to a dissolved company that was formerly in administration. In particular is it open to the creditor (a) to restore the company to the register (b) then to seek a winding up order and (c) as part of that application to ask for the winding up petition to be treated as presented as at some earlier date?’

[2015] EWHC 2806 (Ch)
Bailii
England and Wales

Insolvency, Company

Updated: 04 January 2022; Ref: scu.553114

Crabtree v NG: CA 9 Jun 2011

Applications for leave to appeal arising out of action for order for the appellant to purchase the defendant’s shares in a company, including notise to show cause as to possible wasted costs order.

Lord Neuberger, MR, Carnwath, Arden LJJ
[2011] EWCA Civ 1455
Bailii
England and Wales

Company

Updated: 03 January 2022; Ref: scu.551918

Finch (UK) Plc and Others v Finch and Another: ChD 13 Aug 2015

Trial of an application by the joint liquidators of the company, Finch (UK) Plc, against its two directors who were also the owners of the company’s entire issued share capital. The application seeks
(1) declarations that the respondents or either of them were guilty of misfeasance and breach of trust in relation to the issue, allotment and/or redemption of 875,000 redeemable shares in the company of andpound;1 each,
(2) a declaration that the crediting to the director’s loan account of andpound;875,000 in January 2008 constituted a preference in favour of the respondents or either of them,
(3) a declaration that the respondents or either of them were guilty of misfeasance and breach of trust in retaining properties which beneficially belonged to the company, and
(4) further and consequential relief.

Hodge HHJ

Hodge QC HHJ
[2015] EWHC 2430 (Ch)
Bailii
England and Wales

Company, Torts – Other

Updated: 03 January 2022; Ref: scu.551291

Barnsley and Others v Noble: CA 30 Jun 2015

Kitchin LJ
[2015] EWCA Civ 875
Bailii
England and Wales
Cited by:
See Also – Barnsley and Others v Noble CA 2-Aug-2016
The court was asked as to the proper interpretation of an exoneration clause contained in a will to relieve the trustees under trusts set out in the will of personal liability in respect of certain breaches of duty by them. . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 03 January 2022; Ref: scu.551258

Regina v Thames Magistrates’ Court ex parte Horgan: Admn 25 Nov 1997

That the same rules apply to time limits for prosecution of a company as for others, for summary offences, did not apply to either way offences tried summarily.

Times 09-Dec-1997, Gazette 17-Dec-1997, [1997] EWHC Admin 1045
Magistrates Courts Act 1980 127, Companies Act 1986 731(2)
England and Wales

Criminal Practice, Company

Updated: 03 January 2022; Ref: scu.137990

Flanagan v Liontrust Investment Partners Llp and Others: ChD 24 Jul 2015

Trial of liability issues in an ‘unfair prejudice’ petition under section 994 of the Companies Act 2006 brought by Mr Flanagan in relation to the affairs of a limited liability partnership
Henderson J said: ‘Although it makes good sense in many contexts to talk of the ‘share’ or ‘interest’ of a member in an LLP, and these terms are used in various places in the relevant primary and secondary legislation, they are nowhere defined. I respectfully agree with the observations on this topic of Warren J in Reinhard’s case [2015] EWHC 26 (Ch) at [55]-[57], where he said that the rights carried by such a ‘share’ can only be ascertained by reference to the agreements referred to in section 5(1) of [the Limited Liability Partnerships Act] 2000 and the default provisions in the [Limited Liability Partnerships] Regulations 2001.’

Henderson J
[2015] EWHC 2171 (Ch)
Bailii
Companies Act 2006 994, Limited Liability Partnerships Regulations 2001, Limited Liability Partnerships Act 2000
England and Wales

Company

Updated: 02 January 2022; Ref: scu.550600

Royal Mail Estates Limited v Maple Teesdale Borzou Chaharsough Shirazi: ChD 2 Jul 2015

A contract had been made but one of the parties was not yet incorporated. The court was asked whether it was deemed to have been made with the signatory.
Held: For section 36C(1), a ‘contrary agreement’ would be established if the parties, looking at the matter objectively, had intended that the contract would not have effect as having been made with the ‘agent’.

Kliein QC HHJ
[2015] EWHC 1890 (Ch), [2015] WLR(D) 290, [2016] 1 WLR 942, [2015] BCC 647
Bailii, WLRD
Companies Act 1985 36C(1)
England and Wales
Citing:
Cited – Braymist Limited and Others v Wise Finance Company Limited CA 20-Feb-2002
The claimant company set out to sell land whilst it was still only in the process of incorporation. Its solicitors had signed as agents, and now sought an order for the purchaser to complete the contract. The respondent had not known of the . .
Cited – Phonogram Ltd v Lane CA 1982
A collateral contract was entered into with a company which had not then been incorporated under which an advance by Phonogram to support an intended new pop group was repayable by the company if a recording contract was not entered into within one . .

Lists of cited by and citing cases may be incomplete.

Company, Contract

Updated: 02 January 2022; Ref: scu.550339

Barron v Potter: 1914

Where all the directors of a company agree to something which the articles require to be decided by resolution, then the unanimous agreement of all the members of the company is as good as a formal resolution passed by a majority.

[1914] 1 Ch 895
England and Wales
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: 31 December 2021; Ref: scu.551303

Credit Suisse v Allerdale Borough Council: CA 20 May 1996

Builder’s Guarantee Ultra Vires LA

The council set out to provide a swimming pool using powers under s.19 of the 1976 Act. Purporting to use powers under s.111 of the 1972 Act, it set up a company to develop a site by building a leisure pool and time-share units, with a view to selling the time-share units to pay for the cost of building the pool. The council gave a guarantee to help the company to finance the project, and on the strength of this the company obtained a facility from the bank. The sale of the time-share units proved unsatisfactory and the company went into liquidation. The bank sued the council under the guarantee to recover the sums owed to it by the company.
Held: The guarantee was ultra vires where it had been given to a company when the authority was acting outside it’s proper powers. Where a statutory corporation purports to enter into a contract which it is not empowered by the relevant statute to enter into, the corporation lacks the capacity to make the supposed contract. This lack of capacity means that the document and the agreement it contains do not have effect as a legal contract. It exists in fact but not in law. It is a legal nullity. The purported contract which is in truth not a contract does not confer any legal rights on either party. Neither party can sue on it. Any third party dealing with a local authority should be aware of that fact [of limited capacity and competence] and of the potential legal risk.
Hobhouse LJ said: ‘The discretion of the court in deciding whether to grant any remedy is wide one. It can take into account many considerations, including the needs of good administration, delay, the effect on third parties, and the utility of granting the relevant remedy.’

Hobhouse LJ
Times 20-May-1996, [1997] QB 306
Local Government Act 1972 111, Local Government (Miscellaneous Provisions) Act 1976 819
England and Wales
Citing:
Appeal from – Credit Suisse v Allerdale Borough Council QBD 17-Jun-1994
A Local Authority’s guarantee for its own company was void, having been given for impermissible reasons. . .
Applied – London and Clydeside Estates v Aberdeen District Council HL 8-Nov-1979
Identifying ‘maandatory’ and ‘regulatory’
The appellants had sought a Certificate of Alternative Development. The certificate provided was defective in that it did not notify the appellants, as required, of their right to appeal. Their appeal out of time was refused.
Held: The House . .

Cited by:
Cited – Stretch v The United Kingdom ECHR 24-Jun-2003
The claimant had taken a lease of property from a local authority. Relying upon an option for renewal, he invested substantially in the property, but it was then decided that the option was ultra vires.
Held: Property rights protected under . .
Cited – Regina v Soneji and Bullen HL 21-Jul-2005
The defendants had had confiscation orders made against them. They had appealed on the basis that the orders were made more than six months after sentence. The prosecutor now appealed saying that the fact that the order were not timely did not . .
Cited – Kilby v Basildon District Council Admn 26-Jul-2006
Tenants complained that the authority landlord had purported to vary a clause in his secure tenancy agreement which gave certain management rights to tenants.
Held: The powers to let on secure tenancies were governed by statute. The clause . .
Cited – Birmingham City Council v Qasim and Others CA 20-Oct-2009
The council argued that the defendant was not a tenant granted to him as a secure tenancy since he had not been granted the tenancy in accordance with its policies. An employee had manipulated the Council’s system to grant tenancies to bypass the . .
Cited – UKI (Kingsway) Ltd v Westminster City Council SC 17-Dec-2018
Short issue as to the requirements for valid ‘service’ of a completion notice so as to bring a newly completed building within liability for non-domestic rates. The notice had been served by email where no statutory authority existed for this.
Local Government, Contract, Company, Banking

Updated: 31 December 2021; Ref: scu.79620

Burnett v Barker: ChD 9 Dec 2021

Trial of some preliminary issues which have been directed to be heard in connection with an alleged partnership dispute.

Recorder Clayton
[2021] EWHC 3332 (Ch)
Bailii
England and Wales

Company

Updated: 31 December 2021; Ref: scu.670369

Inland Revenue Commissioners v Conbeer: ChD 1996

Laddie observed as to the potential advantages of delivery by fax in terms of reliability and speed.

Laddie J
[1996] BCC 189
England and Wales
Cited by:
Cited – UKI (Kingsway) Ltd v Westminster City Council SC 17-Dec-2018
Short issue as to the requirements for valid ‘service’ of a completion notice so as to bring a newly completed building within liability for non-domestic rates. The notice had been served by email where no statutory authority existed for this.
Company

Updated: 31 December 2021; Ref: scu.670804

Arbuthnott v Bonnyman and Others: CA 20 May 2015

Appeal from refusal of unfair prejudice petition.
After listing cases: ‘I would extract from them the following principles:
(1) The limitations on the exercise of the power to amend a company’s articles arise because, as in the case of all powers, the manner of their exercise is constrained by the purpose of the power and because the framers of the power of a majority to bind a minority will not, in the absence of clear words, have intended the power to be completely without limitation. These principles may be characterised as principles of law and equity or as implied terms: Allen at 671; Assenagon at 278-280.
(2) A power to amend will be validly exercised if it is exercised in good faith in the interests of the company: Sidebottom at 163
(3) It is for the shareholders, and not the court, to say whether an alteration of the articles is for the benefit of the company but it will not be for the benefit of the company if no reasonable person would consider it to be such: Shuttleworth at 18-19, 23-24, 26-27; Peters’ American Delicacy Co at 488.
(4) The view of shareholders acting in good faith that a proposed alteration of the articles is for the benefit of the company, and which cannot be said to be a view which no reasonable person could hold, is not impugned by the fact that one or more of the shareholders was actually acting under some mistake of fact or lack of knowledge or understanding: Peters’ American Delicacy Co at 491. In other words, the court will not investigate the quality of the subjective views of such shareholders.
(5) The mere fact that the amendment adversely affects, and even if it is intended adversely to affect, one or more minority shareholders and benefit others does not, of itself, invalidate the amendment if the amendment is made in good faith in the interests of the company: Sidebottom at 161, 163-167, 170-173; Shuttleworth; Citco at 490, 493; Peters’ American Delicacy Co at 480, 486.
(6) A power to amend will also be validly exercised, even though the amendment is not for the benefit of the company because it relates to a matter in which the company as an entity has no interest but rather is only for the benefit of shareholders as such or some of them, provided that the amendment does not amount to oppression of the minority or is otherwise unjust or is outside the scope of the power: Peters’ American Delicacy Co at 481, 504, 513, 515; Assenagon.
(7) The burden is on the person impugning the validity of the amendment of the articles to satisfy the court that there are grounds for doing so: Citco at 491; Peters’ American Delicacy Co at 482′

[2015] EWCA Civ 536, [2015] 2 BCLC 627, [2015] BCC 574
Bailii
Companies Act 2006 994
England and Wales
Cited by:
Cited – The Children’s Investment Fund Foundation (UK) v Attorney General and Others ChD 9-Jun-2017
The court considered the propriety of a payment made by a charitable company to a director for her loss of office. The charity was to transfer a substantial sum to a new charity headed by the departing director.
Held: The court approved the . .
Cited – Lehtimaki and Others v Cooper SC 29-Jul-2020
Charitable Company- Directors’ Status and Duties
A married couple set up a charitable foundation to assist children in developing countries. When the marriage failed an attempt was made to establish a second foundation with funds from the first, as part of W leaving the Trust. Court approval was . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 30 December 2021; Ref: scu.546987

Societe Cooperative De Production Seafrance Sa v Competition and Markets Authority: CA 15 May 2015

The company appealed against the rejection of its challenge to a decision that the conditions had arisen allowing the defendant to intervene in its purchase of certain shares in a rival cross channel ferry company. he question was whether part of the activities of the business of SeaFrance, or just a collection of its assets, was to be acquired. The SCOP contended that the CMA had erred in law in concluding that the statutory conditions for its intervention had arisen. The challenge was on the technical question of statutory jurisdiction.
Held: (Arden LJ dissenting), SCOP’s appeal succeeded. The CMA had been irrationally wrong to find that SeaFrance’s ‘activities’ had come under the ownership or control of GET/SCOP and that therefore it had no jurisdiction to find that a ‘relevant merger situation’ had arisen.
The definition of an ‘enterprise’ as meaning ‘the activities or part of the activities of a business’ showed that ‘Parliament’s intention was focused only on the case in which the acquiring entity takes over another business as a going concern’.

Arden, Tomlinson LJJ, Sir Colin Rimer
[2015] EWCA Civ 487
Bailii
Enterprise Act 2002
England and Wales
Citing:
See Also – The Societe Cooperative De Production Seafrance SA v Competition and Markets Authority (Ruling (Permission To Appeal) CAT 20-Jan-2015
. .
See Also – Groupe Eurotunnel Sa v Competition Commission and Others CAT 4-Dec-2013
. .
See Also – Groupe Eurotunnel SA v Competition Commission CAT 30-Aug-2013
. .
See Also – Groupe Eurotunnel SA v Competition and Markets Authority CAT 9-Jan-2015
Judgment . .

Cited by:
Cited – Societe Cooperative De Production Seafrance SA v Competition and Markets Authority CA 10-Jul-2015
The CA had earlier allowed an appeal by the company to hold the respondent’s decsion wrong that an event had occurred allowing it to intervene in the acquisition of a competitor’s assets. Leave to appeal to the Supreme Court remained pending, but . .
Appeal from – Societe Cooperative De Production Seafrance Sa v The Competition and Markets Authority and Another SC 16-Dec-2015
The CMA had decided to intervene in purchases by the appellant from a competitor when it ceased trading.The French court had ordered the sale of the assts.
Held: UK law distinguishes between the acquisition of assets constituting a business . .

Lists of cited by and citing cases may be incomplete.

Company, Commercial

Updated: 30 December 2021; Ref: scu.546829

Ashley and Others v Tesco Stores and Others: CA 15 Jan 2015

The court was asked ‘ is the applicable time limit for service out of the jurisdiction on a Scottish company where it has been served pursuant to section 1139 of the Companies Act 2006 four months or six months?’

Arden, Kitchin, Gloster LJJ
[2015] EWCA Civ 414, [2015] WLR(D) 11
Bailii, WLRD
England and Wales

Company, Scotland

Updated: 30 December 2021; Ref: scu.546452

Re DTEK Finance Bv: ChD 28 Apr 2015

‘application by DTEK Finance B.V (‘DTEK’) for an order under s 899 of the CA 2006 sanctioning a proposed scheme of arrangement between DTEK and holders of the 2015 Notes (as defined below) (the ‘Scheme Creditors’), (the ‘Scheme’). It is to implement a financial restructuring of DTEK which has run into financial difficulties and is the first step in the proposed restructuring of the wider group of companies.’

Rose J
[2015] EWHC 1164 (Ch)
Bailii
Companies Act 2006 899
England and Wales

Company

Updated: 29 December 2021; Ref: scu.546162

Central Bank of Ecuador and Others v Conticorp Sa and Others: PC 23 Mar 2015

From the Court of Appeal of the Commonwealth of The Bahamas. The Board was asked as to the probity of three transactions entered into by the appellant. Held; The nominee director at the centre of the allegations had, in breach of his duty to the company, not acted indepently, but had instead acted as instructed by a third party. He could not surrender his decisions to a third party. He had to act honestly, in good faith, and in the company’s best interests, exercising appropriate skills at a level expected of others acting in comparable circumstances. This director had acted in breach of those duties when, acting on the instructions of third parties in the mannr described, he had caused it to enter into transactions which later proved to be worthless

Lord Mance, Lord Clarke, Lord Sumption, Lord Carnwath,Lord Toulson
[2015] UKPC 11, [2015] WLR(D) 150, [2015] BUS LR D7
Bailii, WLRD
Commonwealth
Cited by:
Cited – Paymaster (Jamaica) Ltd and Another v Grace Kennedy Remittance Services Ltd PC 11-Dec-2017
(Court of Appeal of Jamaica) The parties disputed the ownership of copyight in certain computer software, and also an allegation of the misuse of confidential information. . .

Lists of cited by and citing cases may be incomplete.

Commonwealth, Company

Updated: 29 December 2021; Ref: scu.545677