Category: Company

McTear and Another v Engelhard and Others: ChD 10 Apr 2014

The court heard a dispute as to inter-company transactions between two companies in a group of companies, all owned and controlled by members of the same family. The Claimants contended that the transactions gave rise to a debt owed by the holding company to one of the subsidiaries, and to claims against the directors of the subsidiary for breaches of the duties that they owed to the subsidiary (and to its creditors). The Defendants contended the contrary, and that the Claimants were estopped from bringing these claims in any event.

Richard Spearman QC
[2014] EWHC 1056 (Ch)
Bailii

Company, Estoppel

Updated: 02 December 2021; Ref: scu.523661

Bucci v Carman (Liquidator of Casa Estates (UK) Limited): CA 3 Apr 2014

The court was asked: ‘when is a company deemed to be unable to pay its debts, with the result that it is insolvent? The procedural issue is whether the intermediate appeal court was entitled to substitute its own evaluation of the facts upon which the answer to the legal question depends. ‘

Sullivan, McFarlane, Lewison LJJ
[2014] EWCA Civ 383
Bailii
England and Wales

Company, Insolvency

Updated: 02 December 2021; Ref: scu.523440

Thevarajah and Another v Riordan and Others: ChD 21 Mar 2014

The parties disputed the arrangements for the intended acquisition by the Claimant of three properties, or more accurately of all or part of the shares in their owning companies. Following a failure to comply with ‘unless’ orders fr disclsure of documents, some defendants had been debarred firm defending the claims as to liability.
Held: ‘Absence of a Defence, by default or because it has been struck out in its entirety, must equally give rise to a deemed admission of all alleged elements constituent of a cause of action. But the admissions are necessarily circumscribed by what is alleged in the Particulars of Claim. When the court comes to give judgment on the claimant’s application it is therefore on that, and that alone, that it is entitled to found.’ Orders were made for he transfers of shares accordingly.

David Donaldson QC
[2014] EWHC 725 (Ch)
Bailii
England and Wales
Citing:
See Also – Thevarajah v Riordan and Others ChD 10-Oct-2013
The court allowed the application of the first, second and fourth respondents for relief from sanction under CPR 3.9. . .
See Also – Thevarajah v Riordan and Others ChD 9-Aug-2013
The court was asked first whether the defendants had complied with an unless order made with respect to the disclosure of information required to be provided in aid and in order to ensure the proper release of a freezing order which had previously . .
See Also – Thevarajah v Riordan and Others CA 16-Jan-2014
Defendants appealed against an order allowing the application of the first, second and fourth respondents for relief from sanction under CPR 3.9. The relief sought had previously been refused by Hildyard J, so this was the respondents’ second . .

Cited by:
Appal from – Thevarajah v Riordan and Others CA 4-Feb-2015
The court was asked whether the judge at first instance had been right to attribute an agreement which he had not made to the defendants.
Held: The defendants were liable to pay 2.205 million pounds. . .
1st Instance judgment – Thevarajah v Riordan and Others SC 16-Dec-2015
The defendants had failed to comply with an ‘unless’ order requiring disclosure, and had been first debarred from defending the cases as to liability. They applied to a second judge who granted relief from sanctions after new solicitors had complied . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 December 2021; Ref: scu.522666

Primus International Holding Company and Others v Triumph Controls – Uk Ltd and Another: CA 22 Sep 2020

The issue in this appeal is whether the claims brought by the claimants/respondents were claims ‘in respect of lost goodwill’ and therefore excluded by a clause in the relevant share purchase agreement. O’Farrell J concluded that the exclusion clause did not apply to the claims brought by Triumph. The defendants/appellants (‘Primus’) challenge that conclusion.

Coulson LJ
[2020] EWCA Civ 1228
Bailii
England and Wales

Contract, Company

Updated: 30 November 2021; Ref: scu.654038

Ellis v Joseph Ellis and Co: CA 1905

A member of a partnership formed to work a mine worked in it as foreman. He took weekly wages from the profits. He suffered a fatal accident in the mine and his widow sought compensation under the 1897 Act from the surviving partners. To qualify he had to have been a workman, which was defined broadly in the Act and extended beyond employees strictly defined: ”Workman’ includes every person who is engaged in an employment to which this Act applies, whether by way of manual labor or otherwise, and whether his agreement is one of service or apprenticeship or otherwise and is expressed or implied, is oral or in writing’. The Court was asked whether, given his position as a partner, he came within the definition. Could he be regarded as a workman in the employ of the partnership with the other partners being his employer?
Held: The action failed.
Lord Collins MR thought that he could not: ‘The supposition that the deceased man was ’employed’, within the meaning of that term as used in the Act, would appear to involve that he, as one of the partners, must be looked upon as occupying the position of being one of his own employers. It seems to me that, when one comes to analyse an arrangement of this kind, namely, one by which a partner himself works, and receives sums which are called wages, it really does not create the relation of employers and employed, but is, in truth, a mode of adjusting the amount that must be taken to have been contributed to the partnership assets by a partner who has made what is really a contribution in kind, and does not affect his relation to the other partners, which is that of co-adventurer and not employee. Such a partner cannot put himself in the position of not being a partner when he is one, or of being a workman employed, when that position would involve that he would be both employer and employee. The definition of a ‘workman’ given in the Act might cover a person in such a position, apart from the difficulty that arises from the consideration that he would be his own employer; but that is not conclusive, because the applicability of the Act appears to depend not merely on the question whether the injured man was a workman within the definition given by the Act, but also on the existence of the relation of employer and workman. Sect.1 sub-s.1 provides that, ‘if in any employment to which this Act applies personal injury by accident arising out of and in the course of the employment is caused to a workman, his employer shall, subject as hereinafter mentioned, be liable to pay compensation in accordance with the first schedule to this Act.’ That section appears to me clearly to contemplate a relation between two opposite parties, of whom one is employer and the other employee. It seems to me obvious, when the true position of the deceased is analysed, that he was not such a workman as is contemplated by the Act, and that a person cannot for the purposes of the Act occupy the position of being both employer and employee’.
Mathew LJ stated that it was legally impossible for the same person to occupy the position of being both master and servant, employer and employed.
Cozens-Hardy LJ held that ‘the Act only applies where there is on one side an employer, and on the other side a workman, who are different persons.’

Lord Collins MR, Cozens-Hardy, Mathew LJJ
[1905] 1 KB 324
Workmen’s Compensation Act 1897
England and Wales
Cited by:
Cited – Clyde and Co Llp and Another v Bates van Winkelhof CA 26-Sep-2012
The claimant was a solicitor partner with the appellant limited liability partnership at their offices in Tanzania. She disclosed what she believed to be money laundering by a local partner. She was dismissed. She had just disclosed her pregnancy . .
Cited – Clyde and Co LLP and Another v van Winkelhof SC 21-May-2014
Solicitor Firm Member was a Protected Worker
The solicitor appellant had been a member of the firm, a limited liability partnership. She disclosed criminal misbehaviour by a partner in a branch in Africa. On dismissal she sought protection as a whistleblower. This was rejected, it being found . .

Lists of cited by and citing cases may be incomplete.

Employment, Company, Personal Injury

Updated: 30 November 2021; Ref: scu.465969

Roadchef (Employee Benefits Trustees) Ltd v Hill and Another: ChD 29 Jan 2014

Challenge to share transfer.

Proudman J
[2014] EWHC 109 (Ch)
Bailii
England and Wales
Cited by:
Cited – Eclairs Group Ltd and Glengary Overseas Ltd v JKX Oil and Gas Plc SC 2-Dec-2015
Company Director not Trustee but is Fiduciary
The Court was asked about an alleged ‘corporate raid’, an attempt to exploit a minority shareholding in a company to obtain effective management or voting control without paying what other shareholders would regard as a proper price.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Equity, Company

Updated: 29 November 2021; Ref: scu.520825

UBAF Ltd v European American Banking Corporation: CA 1984

The defendant invited the plaintiff to take part in a syndicated loan. The defendant’s assistant secretary signed a letter to the plaintiff making representations, now claimed to be fraudulent. The defendant succeeded at first instance arguing that the signature was not that of the bank, and that even if it was, the action would be statute barred.
Held: The court refused to strike out the claim. A company itself made a representation, if it produced a document which was signed by an authorised officer or agent acting within the scope of his actual authority. This applied to bind the defendant bank. The nature of a syndicated loan was a fiduciary arrangement, and the obligations on a lead bank were continuing for limitation purposes, time did not run, and the obligation was not time barred. The issue would be settled at trial when it was established when the defendant could be said to have come to know of the alleged deceit.

Ackner LJ
[1984] QB 713, [1984] 1 WLR 508, [1984] CLY 1579
England and Wales
Citing:
Explained – Swift v Jewsbury and Goddard 1874
. .
Explained – Hirst v West Riding Banking Co CA 1901
The representation on which the claim made was was in a letter signed by the branch manager of the defendant bank and the court evidently assumed that this could not be equated with the bank’s own signature.
Held: The action against the bank . .
Considered – Forster v Outred and Co CA 1981
A mother signed a mortgage deed charging her property to H as security for a loan to her son. She claimed the solicitor had been negligent in his advice. The solicitor replied that the claim was out of time. The loss accrued not when demand for . .

Cited by:
Cited – Nykredit Mortgage Bank Plc v Edward Erdman Group Ltd (No 2) HL 27-Nov-1997
A surveyor’s negligent valuation had led to the plaintiff obtaining what turned out to be inadequate security for his loan. A cause of action against a valuer for his negligent valuation arises when a relevant and measurable loss is first recorded. . .
Cited – Pegasus Management Holdings Sca and Another v Ernst and Young (A Firm) and Another ChD 11-Nov-2008
The claimants alleged professional negligence in advice given by the defendant on a share purchase, saying that it should have been structured to reduce Capital Gains Tax. The defendants denied negligence and said the claim was statute barred.
Banking, Limitation, Torts – Other, Company

Updated: 29 November 2021; Ref: scu.181338

JC Houghton and Co v Northard, Lowe and Wills: HL 1927

The court was asked whether the knowledge of the directors of the latter company should be attributed to it, with the effect that the latter company could and should be treated as estopped from denying that it had consented to a particular arrangement with a third party company. However, the arrangement was one that was against the company’s interests and for the benefit of the third party company which the directors also controlled and which was in financial difficulties.
Held: The law does not make the unreal assumption that agents will reveal to their principals the fraud which they are comitting on them.
Viscount Dunedin summarily rejected the suggestion that the company could be treated as knowing about a director’s breach of duty by virtue only of the knowledge of the defaulting director himself: ‘My Lords, there can obviously be no acquiescence without knowledge of the fact as to which acquiescence is said to have taken place. The person who is sought to be estopped is here a company, an abstract conception, not a being who has eyes and ears. The knowledge of the company can only be the knowledge of persons who are entitled to represent the company. It may be assumed that the knowledge of directors is in ordinary circumstances the knowledge of the company. The knowledge of a mere official like the secretary would only be the knowledge of the company if the thing of which knowledge is predicated was a thing within the ordinary domain of the secretary’s duties. But what if the knowledge of the director is the knowledge of a director who is himself particeps criminis, that is, if the knowledge of an infringement of the right of the company is only brought home to the man who himself was the artificer of such infringement? Common sense suggests the answer, but authority is not wanting.’

Viscount Dunedin, Lord Sumner
[1928] AC 1, [1927] All ER 97
England and Wales
Citing:
Cited – Re Hampshire Land Company 9-Jul-1896
A company had borrowed from a building society. The borrowing was not properly authorised by resolution of the shareholders in general meeting The court was asked whether whether the knowledge of the company secretary common to both the company and . .

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 – Jetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .

Lists of cited by and citing cases may be incomplete.

Agency, Company

Updated: 29 November 2021; Ref: scu.215866

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 been summarily dismissed. Lever sought repayment of the pounds 30,000 and claimed rescission of the agreement for fraud. The jury found that there was no fraud, but if Lever had known of the dealings giving rise to the secret profits, it would not have paid compensation. Before the trial, Bell admitted his liability to account to Niger for his secret profits, and made a payment into court.
Held: The court laid down the test for identifying a mutual mistake in contract allowing the contract to be declared void.
The mistake must render the subject matter of the contract essentially and radically different from the subject matter which the parties believed to exist. Was it the common assumption or pre-condition upon which the compromise agreement was made? The House asked whether there was a positive duty on the part of Bell and Snelling to disclose the breaches of contract they made. Lord Atkin concluded they had no such duty, saying of Healey: ‘It will be notice that Bell was not a director of Levers and with respect I cannot accept the view of Greer LJ that if he was in a fiduciary relationship with the Niger Company he was in a similar fiduciary relationship with the share holders’.
Lord Thankerton: ‘in the absence of fraud . . I am of the opinion that neither a servant nor a director of a company is legally bound forthwith to disclose any breach of the obligations arising out of the relationship so as to give the master or the company the opportunity of dismissal . . ‘ However, he also said, ‘there may well be case where the concealment of the misconduct amounts to a fraud on the master or company . . ‘
Lord Atkin considered the possible duty of disclosure of an intending partner: ‘Fraudulent concealment has been negatived by the jury; this claim is based upon the contention that Bell owed a duty to Levers to disclose his misconduct, and that in default of disclosure the contract was voidable. Ordinarily the failure to disclose a material fact which might influence the mind of a prudent contractor does not give the right to avoid the contract. The principle of caveat emptor applies outside contracts of sale. There are certain contracts expressed by the law to be contracts of the utmost good faith, where material facts must be disclosed; if not, the contract is voidable. Apart from special fiduciary relationships, contracts for partnership and contracts of insurance are the leading instances. In such cases the duty does not arise out of contract; the duty of a person proposing an insurance arises before a contract is made, so of an intending purchaser.’

Atkin L, Lord Thankerton, Lord Blanesburgh
[1932] AC 161, [1931] UKHL 2
Bailii
England and Wales
Citing:
Dictum approved – Healey v Societe Anonyme Francais Rubastic 1917
A director of the company claimed arrears of salary for work done notwithstanding that he had been summarily dismissed for misconduct. There was no question of a claim for damages for breach of duty. . .
Appeal from – Bell v Lever Brothers Ltd CA 1931
The court was asked as to the duties of a company director: ‘It does not seem to me open to question that the directors of a company occupy a fiduciary position towards the company, with the result that they cannot retain a benefit they have . .
Approved – London and Mashonaland Exploration Co Ltd v New Mashonaland Exploration Co Ltd 1891
There is nothing inherently objectionable in the position of a company director (and chairman) who, without breaching any express restrictive agreement or disclosing any confidential information, becomes engaged, whether personally or as a director . .

Cited by:
Confirmed – 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: . .
Cited – William Sindall Plc v Cambridgeshire County Council CA 21-May-1993
Land was bought for development, but the purchaser later discovered a sewage pipe which very substantially limited its development potential. The existence of the pipe had not been disclosed on the sale, being unknown to the seller.
Held: . .
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, . .
Distinguished – 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 . .
Cited – 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 – EIC Services Ltd European Internet Capital Ltd v Phipps, Paul, Barber CA 30-Jul-2004
Whether issue of additional shares had been properly authorised . .
Cited – Item Software (UK) Ltd v Fassihi and Others ChD 5-Dec-2002
Enforcement of confidentiality clause in contract of employment on termination. . .
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 . .
Mentioned – 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 . .
Cited – Halpern and Another v Halpern and others ComC 24-Mar-2006
The deceased parents, being orthodox Jews, had first made standard wills and then made provision accoding to Jewish law. A dispute after the second death was referred to a Beth Din arbitration. After an initial resolution, various distributions were . .
mentioned – Islington v Uckac and Another CA 30-Mar-2006
The council’s tenant had unlawfully secured assignment of a secure tenancy to the defendant. The council sought possession.
Held: A secure tenancy granted by an authority pursuant to a misrepresentation by the tenant is nonetheless valid. The . .
Cited – Simms v Conlon and Another CA 20-Dec-2006
Solicitors within a practice sued each other, and one wished to plead the fact of a finding of professional misconduct.
Held: The defendant’s appeal succeeded. It was not an abuse for the appellant to continue to assert his innocence, and the . .
Cited – Graves v Graves and others CA 3-Jul-2007
The parties had divorced and settled financial provision, but the former wife and her children came to need a house and one of the claimant’s properties became vacant, and she was allowed to occupy it as a tenant, with the majority of the rent being . .
Cited – Butters and Others v BBC Worldwide Ltd and Others ChD 20-Aug-2009
In the insolvency of Woolworths plc, a subsidiary sought to have valued its shareholding in a company in which the defendants were co-shareholders. It was argued that an earlier agreement between them had not be fully superceded by a subsequent one. . .
Cited – Helmet Integrated Systems Ltd v Tunnard and others CA 15-Dec-2006
Whilst employed by the claimants as a salesman, the defendant came to want to develop his idea for a modular helmet suitable for fire-fighters and others. He took certain steps including showing the proposal confidentially to a competitor, and then . .
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 . .
Cited – Lehman Brothers International (Europe) v Exotix Partners Llp ChD 9-Sep-2019
The parties had contracted to trade global depository notes issued by the Peruvian government. Each made mistakes as to their true value, thinking them scraps worth a few thousand dollars, whereas their true value was over $8m. On the defendant . .

Lists of cited by and citing cases may be incomplete.

Contract, Company

Leading Case

Updated: 29 November 2021; Ref: scu.181343

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 director has additional, fiduciary duties over and above those of an employee. The duties are set and imposed by law. Whilst a director was under a fiduciary duty to disclose his wrongdoing to the company, this was not a separate and independent duty but was part of the more general obligation to act in what he in good faith considers to be in the best interests of the company. F was under a duty to disclose that he had a personal interest in the decision before the board. That duty could only be fulfilled by informing the board of his setting up of an independent and competing company. The director was entitled to an apportioned part of his salary until the date of the breach. The 1870 Act should be treated as a remedial Act and there is no justification for striving to restrict its operation, and it does indeed extend to apportionment of salaries when the employment ceased during a pay period.

Mr Justice Holman, Lord Justice Mummery, Lady Justice Arden
[2004] EWCA Civ 1244, Times 21-Oct-2004, [2004] BCC 994, [2007] Lloyd’s Rep PN 17, [2005] ICR 450, [2005] 2 BCLC 91, [2004] IRLR 928
Bailii
Apportionment Act 1870, Companies Act 1985 310 317
England and Wales
Citing:
Appeal from – Item Software (UK) Ltd v Fassihi and Others ChD 5-Dec-2002
Enforcement of confidentiality clause in contract of employment on termination. . .
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 – 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 – 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 – Boston Deep Sea Fishing and Ice Co v Ansell CA 1888
An employer having dismissed an employee (its managing director) later learnt of the employee’s fraud.
Held: The employer was allowed to rely upon that fraud to justify the dismissal. Where an agent is in wrongful repudiation of his contract . .
Cited – Sybron Corporation v Rochem CA 1983
There was an allegation that the employee had failed to disclose breaches of contract by fellow employees. This had taken place at a time when a decision was being taken as to the payment to be made to him under the terms of a pension scheme. The . .
Cited – Re Hampshire Land Company 9-Jul-1896
A company had borrowed from a building society. The borrowing was not properly authorised by resolution of the shareholders in general meeting The court was asked whether whether the knowledge of the company secretary common to both the company and . .
Cited – Industrial Development Consultants Ltd v Cooley 1972
Mr Cooley was the managing director of the claimant. His duties included procuring business in the field of developing gas depots. The company had unsuccessful negotiations with the Eastern Gas Board for the development of four depots. However, the . .
Cited – 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 . .
Cited – JC Houghton and Co v Northard, Lowe and Wills HL 1927
The court was asked whether the knowledge of the directors of the latter company should be attributed to it, with the effect that the latter company could and should be treated as estopped from denying that it had consented to a particular . .
Cited – Capron v Capron 1874
By a will made before the 1870 Act, but amended by a codicil after the Act commenced to the use of his wife with remainders over. After her death having inherited the property, the parties disputed the apportionment of the rents.
Held: The . .
Cited – Inman v Ackroyd 1901
In the absence of some custom as to the method of payment a Director’s salary would not be payable until the years service was completed, which necessarily would require that it be paid outside the period of the year in which it was earned . .
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 – Miles v Wakefield Metropolitan District Council HL 1987
The claimant was a superintendent registrar of Births Deaths and Marriages. His union instructed him not to conduct weddings on Saturdays. He had been told that if he failed to perform his full range of duties on a Saturday (including marriages), he . .
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 – 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.
Cited – Sim v Rotherham Metropolitan Borough Council 1981
The 1870 Act applied where an employee’s contract was terminated in the course of a period at the end of which payment would be made. Scott J said: ‘Mr Goudie submitted that the real question was whether a teacher was entitled to be paid for the . .
Cited – El Ajou v Dollar Land Holdings Ltd CA 2-Dec-1993
The court was asked whether, for the purposes of establishing a company’s liability under the knowing receipt head of constructive trust, the knowledge of one of its directors can be treated as having been the knowledge of the company.
Held: . .
Cited – Healey v Societe Anonyme Francais Rubastic 1917
A director of the company claimed arrears of salary for work done notwithstanding that he had been summarily dismissed for misconduct. There was no question of a claim for damages for breach of duty. . .
Cited – Winkworth v Edward Baron Development Co Ltd HL 1986
A company director has duties to the company’s creditors as well as the shareholders. ‘Equity is not a computer. Equity operates on conscience . .’ . .
Cited – Meinhard v Salmon 1928
(New York Court of Appeals) Cardozo J said: ‘Equity refuses to confine within the bounds of classified transactions its precept of a loyalty that is undivided and unselfish’ and ‘[a] constructive trust is, then, the remedial device through which . .
Cited – 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 . .
Cited – 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 – Powdrill and Another v Watson and Another HL 23-Mar-1995
A receiver of a companies assets, who employed former staff of the company, beyond an initial period of 14 days, becomes personally responsible for their employment contracts, and consequently becomes liable for making redundancy payments. The 1870 . .
Cited – 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 – Re William Porter and Co Ltd 1937
. .
Cited – Treacy v Corcoran 1874
(Irish Court of Common Pleas) The holder of a public office as Clerk of the Crown was entitled to be paid half yearly. During the course of a half year the plaintiff, Treacy, had resigned from that office. At the end of the half year the salary for . .

Cited by:
Cited – Fulham Football Club (1987) Ltd v Tigana CA 19-Jul-2005
The defendant had acted as manager of the claimant. The claimant appealed dismissal of its claim for breach of contract and of fiduciary duty, and his claim for payment of sums due under share options granted to him.
Held: The appeal failed. . .
Cited – Helmet Integrated Systems Ltd v Tunnard and others CA 15-Dec-2006
Whilst employed by the claimants as a salesman, the defendant came to want to develop his idea for a modular helmet suitable for fire-fighters and others. He took certain steps including showing the proposal confidentially to a competitor, and then . .
Cited – Hartley and Others v King Edward VI College SC 24-May-2017
The teacher appellants challenged the quantification of deductions from their salaries after engaging in lawful strike days.
Held: The appeal as allowed. The correct approach under section 2 to a case like this, where the contract is an annual . .

Lists of cited by and citing cases may be incomplete.

Company, Employment

Updated: 29 November 2021; Ref: scu.215858

Re Hampshire Land Company: 9 Jul 1896

A company had borrowed from a building society. The borrowing was not properly authorised by resolution of the shareholders in general meeting The court was asked whether whether the knowledge of the company secretary common to both the company and the society, as to the irregularity should be imputed to the society, so as to preclude the society from recovering the loan.
Held: The rule of law that information held by an agent in the course of his agency is to be imputed to his principal, has an exception where the agent is committing a fraud on his principal.
Vaughan Williams J said: ‘The case is very much more like the one which [counsel for the society] had to admit was an exception to the general rule that they sought to lay down, for they admitted that if Wills had been guilty of a fraud, the personal knowledge of Wills of the fraud that had had committed upon the company would not have been knowledge of the society of the facts constituting that fraud; because common sense at once leads one to the conclusion that it would be impossible to infer that the duty, either of giving or receiving notice, will be fulfilled where the common agent is himself guilty of fraud. It seems to me that if you assume here that Mr. Wills was guilty of irregularity – a breach of duty in respect of these transactions – the same inference is to be drawn as if he had been guilty of fraud. I do not know, I am sure, whether he was guilty of actual fraud; but whether his conduct amounted to fraud or to breach of duty, I decline to hold that his knowledge of his own fraud or of his own breach of duty is, under the circumstances, the knowledge of the company.’

Vaughan Williams J, Viscount Dunedin
[1896] 2 Ch 743, [1896] UKLawRpCh 122
Commonlii
England and Wales
Cited by:
Cited – Abbey National Plc v Tufts CA 16-Feb-1999
A bankrupt husband, a mortgage broker, had applied for mortgage for his wife, fraudulently claiming that she had income. She appealed against an order for possession on the basis that he was agent of the bank, and that therefore the bank was fixed . .
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 – Moore Stephens (A Firm) v Stone Rolls Ltd (in liquidation) HL 30-Jul-2009
The appellants had audited the books of the respondent company, but had failed to identify substantial frauds by an employee of the respondent. The auditors appealed a finding of professional negligence, relying on the maxim ex turpi causa non . .
Cited – Stone and Rolls Ltd v Moore Stephens (A Firm) Comc 27-Jul-2007
The company claimed against its chartered accountants for negligence when acting as auditors. The sole directing mind of the company had used it as a vehicle for substantial frauds. The court was asked ‘whether and if so when can a claim by a . .
Applied – Moore Stephens (A Firm) v Stone and Rolls Ltd CA 18-Jun-2008
The company claimed against its accountants for negligence in not discovering the substantial dishonesty of the claimant’s employee, its directing mind and sole shareholder.
Held: Rimer LJ said that the critical question was whether it was . .
Cited – JC Houghton and Co v Northard, Lowe and Wills HL 1927
The court was asked whether the knowledge of the directors of the latter company should be attributed to it, with the effect that the latter company could and should be treated as estopped from denying that it had consented to a particular . .
Cited – Jetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .

Lists of cited by and citing cases may be incomplete.

Agency, Company

Leading Case

Updated: 29 November 2021; Ref: scu.181279

Gamatronic (UK) Ltd and Another v Hamilton and Others: QBD 30 Oct 2013

The claimant company alleged that its former directors, the defendants, had left taking confidential materials and equipment with them. The defendants now requested that the claim be struck out, saying that a binding compromise had been reached. The claimant denied the compromise.

Andrew Smith J
[2013] EWHC 3287 (QB)
Bailii
England and Wales

Company

Updated: 23 November 2021; Ref: scu.517253

Allan v Gold Reefs of West Africa Ltd: CA 19 Feb 1900

The company had altered its articles so as to give itself a lien on paid up shares in respect of the failure of the shareholder to pay calls on other shares which had not been fully paid up. The effect of the amendment was to alter the contractual rights of the shareholder.
Held: The amendment to the articles was within the power of the company under s.50 of the 1862 Act.
Lord Lindley MR said: ‘The power thus conferred on companies to alter the regulations contained in their articles is limited only by the provisions contained in the statute and the conditions contained in the company’s memorandum of association. Wide, however, as the language of section 50 is, the power conferred by it must, like all other powers, be exercised subject to those general principles of law and equity which are applicable to all powers conferred on majorities and enabling them to bind minorities. It must be exercised, not only in the manner required by law, but also bona fide for the benefit of the company as a whole, and it must not be exceeded. These conditions are always implied and are seldom if ever expressed but if they are complied with I can see no ground for judicially putting any other restrictions on the power conferred by the section and those contained in it . . Speaking therefore generally and without reference to any particular case, the section clearly authorises a limited company, formed with articles which confer no lien on fully paid up shares, and which allow them to be transferred without any fetter, to alter those articles by special resolution, and to impose a lien and restrictions on the registry of transfers of those shares by members indebted to the company . . But then comes the question whether this can be done so as to impose a lien or restriction in respect of a debt contracted before and existing at the time when the articles are altered. Again speaking generally, I am of opinion that the articles can be so altered and that, if they are altered bona fide for the benefit of the company, they will be valid and binding as altered on the existing holders of paid up shares whether such holders are indebted or not indebted to the company when the alteration is made.’
Romer LJ said: ‘certainly a shareholder could not say as against the company that he was entitled to special rights because he did not pay his debts.’
Vaughan Williams LJ said: ‘I also take it to be clear that the alteration must be made in good faith; and I take it that an alteration in the articles which involved oppression of one shareholder would not be made in good faith.’

Lord Lindley MR, Romer LJ
[1900] 1 Ch 656, [1900] UKLawRpCh 37
Commonlii
Companies Act 1862 50
England and Wales
Cited by:
Cited – Faulkner and Another v Bennett and Others ChD 20-Dec-2011
The court was asked whether the principle in Gold Reefs could be applied to prevent a proposed repurchase of shares. . .
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: 23 November 2021; Ref: scu.219202

Tekem Sea Abyss Ltd v Brandston Ltd; ‘The Ocean Enterprise’: AdCt 9 Jan 1997

ComC Shipping – registration of ships – – no statutory power to expunge the register – inherent – sale of ship to company in which seller held interest – fiduciary duty – breach – voidable contract – classification as ‘goods’ – Sale of Goods Act 1979 – goods – passing of voidable title – good faith – knowledge of company Company – power of director to bind company – agency – actual and ostensible authority Company – goods – passing of voidable title – Sale of Goods Act 1979 section 23 – good faith – knowledge of company

Geoffrey Brice QC
Unreported, 9 January 1997
Sale of Goods Act 1979 23, Merchant Shipping Act 1995 10(2)(I)
England and Wales

Transport, Company, Contract

Updated: 23 November 2021; Ref: scu.186612

Fakhry v Pagden and Another: CA 15 Sep 2020

Application seeking to set aside an ex parte order that three associated companies, which had been dissolved at the conclusion of their respective members’ voluntary liquidations, were restored to the register of companies and new liquidators, not the liquidators who had previously been in office, were appointed.

Lord Justice David Richards
[2020] EWCA Civ 1207
Bailii
England and Wales

Company

Updated: 23 November 2021; Ref: scu.653893

Ackerman v Ackerman and Others: ChD 12 Aug 2011

The parties disputed the division of assets within a group of companies.

Roth J
[2011] EWHC 2183 (Ch)
Bailii
England and Wales
Cited by:
Cited – MG v AR FD 16-Nov-2021
Family Case: Costs Security depends on Case Merits
Application for security for costs in family cases.
Held: In contrast to civil cases generally, in a family case the merits of the application and the strength of the defence necessarily have to be carefully considered. It is only by . .

Lists of cited by and citing cases may be incomplete.

Company, Costs

Updated: 22 November 2021; Ref: scu.442740

Texdata Software Gmbh, Re: ECJ 26 Sep 2013

ECJ Company law – Freedom of establishment – Eleventh Directive 89/666/EEC – Disclosure of accounting documents – Branch of a capital company established in another Member State – Pecuniary penalty in the event of failure to disclose within the prescribed period – Right to effective judicial protection – Principle of respect for the rights of the defence – Effective, proportionate and dissuasive nature of the penalty

L. Bay Larsen, P
C-418/11, [2013] EUECJ C-418/11
Bailii
England and Wales

European, Company

Updated: 20 November 2021; Ref: scu.515587

Oakbank Oil Co (Ltd) v Crum: HL 12 Dec 1882

Dividends pro rata as to nominal paid up capital

The articles of association of a limited company provided that ‘the directors may, with the sanction of the company in general meeting, declare a dividend to be paid to the members in proportion to their shares.’ The articles also provided that ‘capital’ should mean ‘the capital for the time being of the company,’ and ‘shares’ the ‘shares into which the capital is divided.’ The capital consisted of 60,000 shares of pounds 1 each. Two-thirds of the shares were fully paid-up, and on the remaining third only 5s. per share had been paid.
Held: (aff. judgment of First Division) that under the terms of the articles of association dividends were to be paid in proportion to the nominal, and not in proportion to the paid-up capital held by each member.

Lord Chancellor, Lords Blackburn, Watson, Bramwell, and Fitzgerald
[1882] UKHL 244, 20 SLR 244
Bailii
Scotland

Company

Updated: 20 November 2021; Ref: scu.637747

Alfred Hirmann v Immofinanz Ag: ECJ 12 Sep 2013

ECJ OPINION – Company Law – Directive 77/91/EEC – Liability of a public limited liability company – Protection for investor relying on inaccurate information – Compatibility of a national rule providing for the cancellation of a share purchase transaction

Sharpston AG
C-174/12, [2013] EUECJ C-174/12, [2013] EUECJ C-174/12
Bailii, Bailii
Directive 77/91/EEC

European, Company

Updated: 20 November 2021; Ref: scu.515247

Musselwhite v CH Musselwhite and Son Ltd: ChD 1962

Voiting Rights Followed Entry on Company Registerr

Parties had agreed to transfer shares in a small family company for the payment of a sum of money by way of instalments over a period of time. The agreement provided the transfers of the shares should be executed and that the executed transfers and relevant share certificates should be deposited with the company solicitors until payment had been made in full. The transferor remained on the company’s register of members as the holder of the shares. The question arose as to the rights of the transferor to vote at the annual general meeting prior to the final payment with respect to the shares.
Held: A partly paid vendor of shares remaining on the register of members after the execution of the contract for sale retained the voting rights.

Russell J
[1962] Ch 964
England and Wales
Cited by:
Cited – Englewood Properties Limited v Patel and Another ChD 16-Feb-2005
The claimant was a property developer, which sought to sell a row of shops at auction. One lot was a Woolworths store, where the company owned both freehold and leasehold interests, with Woolworths occupying an underlease, which the claimant had . .
Followed – JRRT (Investments) v Haycraft ChD 1993
A purchaser of shares (under an inept agreement) raised a summons under RSC O.14A with the single issue of whether the purchaser was entitled to direct the vendor to vote the shares. . .

Lists of cited by and citing cases may be incomplete.

Contract, Company

Leading Case

Updated: 20 November 2021; Ref: scu.223744

Eclairs Group Ltd and Another v JKX Oil and Gas Plc and Others: ChD 30 Aug 2013

Challenge was made to restrictions on voting imposed on the directors under the company’s articles.
Held: The purpose of article 42 is to provide a ‘sanction or incentive’ to remedy a failure to comply with the disclosure notice.

Mann J
[2013] EWHC 2631 (Ch), [2013] WLR(D) 373, [2014] Bus LR 18, [2014] 1 BCLC 202
Bailii, WLRD
Copanies Act 2006 793
England and Wales
Citing:
Cited – In re Ricardo Group Plc ChD 1989
The company had obtained a restrictions order under Part XV. An application was made to the court for relief.
Held: On the facts relief was refused. The respondent had secured discharge of the order under the liberty to apply, having provided . .
Cited – In re TR Technology Investment Trust Plc ChD 1988
The court was asked whether the limition on the circumstances in which the court could remove restrictions imposed under section 794, applied to a merely interim order.
Held: It did not. Hoffmann J said of the powers t demand information given . .

Cited by:
Appeal from – JKX Oil and Gas Plc and Others v Eclairs Group Ltd CA 13-May-2014
The court was asked as to important issues on the validity and constitutionality of restrictions imposed by the directors pursuant to Part 22 of the 2006 Act and the company’s Articles of Association, including the purported disenfranchisement of . .
At First Instance – Eclairs Group Ltd and Glengary Overseas Ltd v JKX Oil and Gas Plc SC 2-Dec-2015
Company Director not Trustee but is Fiduciary
The Court was asked about an alleged ‘corporate raid’, an attempt to exploit a minority shareholding in a company to obtain effective management or voting control without paying what other shareholders would regard as a proper price.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 19 November 2021; Ref: scu.514978

Guinness plc v Saunders: HL 8 Feb 1990

Director – no claim for payment without authority

A committee of the board of Guinness had authorised payment of remuneration to Mr Ward, who was a director. However, the articles of association did not give authority to a committee of the board (as opposed to the full board) to authorise such a payment. Mr Ward attempted to rely on section 727.
Held: The claim failed: ‘Mr. Ward had no right to remuneration without the authority of the board. Thus the claim by Guinness for repayment is unanswerable. If Mr. Ward acted honestly and reasonably and ought fairly to be excused for receiving pounds 5.2m. without the authority of the board, he cannot be excused from paying it back. By invoking section 727 as a defence to the claim by Guinness for repayment, Mr. Ward seeks an order of the court which would entitle him to remuneration without the authority of the board.’ (Lord Templeman)

Lord Templeman, Lord Goff
[1989] UKHL 2, [1990] 2 AC 663
Bailii
Companies Act 1985 727
England and Wales
Citing:
Approved – Hely-Hutchinson v Brayhead Ltd 1968
Directors are required to disclose their interests in contracts with the company: ”It is not contended that [the] section in itself affects the contract. The section merely creates a statutory duty of disclosure and imposes a fine for . .
Appeal from – Guinness plc v Saunders CA 1988
. .

Cited by:
Mentioned – 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 . .
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: 19 November 2021; Ref: scu.230297

Hely-Hutchinson v Brayhead Ltd: 1968

Directors are required to disclose their interests in contracts with the company: ”It is not contended that [the] section in itself affects the contract. The section merely creates a statutory duty of disclosure and imposes a fine for non-compliance. But it has to be read in conjunction with article [85]. The first sentence of that article is obscure. If a director makes or is interested in a contract with the company, but fails duly to declare his interest, what happens to the contract? Is it void, or is it voidable at the option of the company, or is it still binding on both parties, or what? The article supplies no answer to these questions. I think the answer must be supplied by the general law, and the answer is that the contract is voidable at the option of the company, so that the company has a choice whether to affirm or avoid the contract, but the contract must be either totally affirmed or totally avoided and the right of avoidance will be lost if such time elapses or such events occur as to prevent rescission of the contract . . .’

[1968] 1 QB 549
Companies Act 1948 317
England and Wales
Cited by:
Approved – Guinness plc v Saunders HL 8-Feb-1990
Director – no claim for payment without authority
A committee of the board of Guinness had authorised payment of remuneration to Mr Ward, who was a director. However, the articles of association did not give authority to a committee of the board (as opposed to the full board) to authorise such a . .
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: 19 November 2021; Ref: scu.230295

Re International Tin Council: ChD 1987

An order for the winding up of a foreign company operates universally, applies to all the foreign company’s assets and brings into play the full panoply of powers and duties under the Insolvency Act 1986 like any other winding up order. Millett J said: ‘The statutory trusts extend to [foreign] assets, and so does the statutory obligation to collect and realise them and to deal with their proceeds in accordance with the statutory scheme.’
The court said that it was to ask the question, ‘Could Parliament reasonably have intended that the International Tin Council should be subject to the winding-up process of the UK insolvency legislation?’
Millet J said of the nature of corporate insolvency: ‘Although a winding up in the country of incorporation will normally be given extra-territorial effect, a winding up elsewhere has only local operation. In the case of a foreign company, therefore, the fact that other countries, in accordance with their own rules of private international law, may not recognise our winding up order or the title of a liquidator appointed by our courts, necessarily imposes practical limitations on the consequences of the order. But in theory the effect of the order is world-wide. The statutory trusts which it brings into operation are imposed on all the company’s assets wherever situate, within and beyond the jurisdiction. Where the company is simultaneously being wound up in the country of its incorporation, the English court will naturally seek to avoid unnecessary conflict, and so far as possible to ensure that the English winding up is conducted as ancillary to the principal liquidation. In a proper case, it may authorise the liquidator to refrain from seeking to recover assets situate beyond the jurisdiction, thereby protecting him from any complaint that he has been derelict in his duty. But the statutory trusts extend to such assets, and so does the statutory obligation to collect and realise them and to deal with their proceeds in accordance with the statutory scheme.’

Millet J
[1987] Ch 419, [1987] 2 WLR 1229, [1987] 1 All ER 890
England and Wales
Citing:
See Also – Maclaine Watson and Co Ltd v International Tin Council ChD 1987
Millett J said: ‘The ITC contend there is no jurisdiction to make such an order [an order for discovery of assets] in the absence of a Mareva injunction. It is, however, fallacious to reason from the fact that an order for discovery can be made as . .

Cited by:
Appeal from – Re International Tin Council CA 1989
Creditors sought to treat the International Tin Council as an ‘association’ for the purposes of a provision under the Companies Act 1985 allowing for unregistered companies to be wound up.
Held: The decision in Re a Company was binding. The . .
Cited – Hackney v Side By Side (Kids) Ltd QBD 14-Jul-2003
The defendant sought a stay of a warrant for possession. It had submitted to an order for possession by consent in return for a promise of alternative accomodation. They sought a stay under section 89, saying that the claimant had not complied with . .
Cited – McGrath and Honey v McMahon and Others, Re HIH Casualty and General Insurance Ltd and others CA 9-Jun-2006
The insurance company was to be wound up. It operated internationally but was registered in Australia. The Australian liquidator now sought an order for the transfer of assets held here to Australia.
Held: It was inevitable that cross border . .
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.
Cited – Bilta (UK) Ltd and Others v Nazir and Others ChD 30-Jul-2012
The company was said to have engaged in a fraud based on false European Trading Scheme Allowances, and had been wound up by the Revenue. The liquidators, in the company name, now sought recovery from former directors and associates.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Company, Insolvency, Jurisdiction

Updated: 19 November 2021; Ref: scu.185746

Guinness plc v Saunders: CA 1988

[1988] 1 WLR 863
Companies Act 1985 317
England and Wales
Cited by:
Cited – DEG-Deutsche Investitions und Entwicklungsgesellschaft mbH v Koshy and Other (No 3); Gwembe Valley Development Co Ltd (in receivership) v Same (No 3) CA 28-Jul-2003
The company sought to recover damages from a director who had acted dishonestly, by concealing a financial interest in a different company which had made loans to the claimant company. He replied that the claim was out of time. At first instance the . .
Appeal from – Guinness plc v Saunders HL 8-Feb-1990
Director – no claim for payment without authority
A committee of the board of Guinness had authorised payment of remuneration to Mr Ward, who was a director. However, the articles of association did not give authority to a committee of the board (as opposed to the full board) to authorise such a . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 19 November 2021; Ref: scu.187428

In re Yorkshire Woolcombers Association Ltd: ChD 1903

Farwell J said: ‘A charge on all book debts which may now be, or at any time hereafter become charged or assigned, leaving the mortgagor or assignor free to deal with them as he pleases until the mortgagee or assignee intervenes, is not a specific charge, and cannot be. The very essence of a specific charge is that the assignee takes possession, and is the person entitled to receive the book debts at once. So long as he licenses the mortgagor to go on receiving the book debts and carry on the business, it is within the exact definition of a floating security.’

Farwell J
[1903] 2 Ch 284
England and Wales
Cited by:
Appeal from – In re Yorkshire Woolcombers Association Ltd CA 2-Jan-1903
Nature of Company’s Debenture Charge
The court considered the nature of a debenture charge. Romer LJ said: ‘I certainly do not intend to attempt to give an exact definition of the term ‘floating charge’, nor am I prepared to say that there will not be a floating charge within the . .
Cited – National Westminster Bank Plc v Spectrum Plus Ltd and others ChD 15-Jan-2004
The company granted a debenture to the claimant purporting to secure its book debts. The company went into liquidation. The liquidator challenged the bank’s charge.
Held: Siebe was wrongly decided. The charge was ineffective over the book . .
Cited – In Re Westmaze Ltd (In Administrative Receivership) ChD 15-May-1998
Westmaze were mechanical engineers. They gave a charge to secure borrowings, which described itself as a fixed charge.
Held: A Charge over a company’s book and trading assets was in fact floating even though described as a fixed charge unless . .
At First Instance – Illingworth v Houldsworth HL 1904
A clause in a floating charge allowing a company to continue to trade in the assets charged: ‘contemplates not only that it should carry with it the book debts which were then existing, but it contemplates also the possibility of those book debts . .

Lists of cited by and citing cases may be incomplete.

Banking, Company

Updated: 19 November 2021; Ref: scu.191953

Arrow Nominees Inc and Another v Blackledge and Others: CA 22 Jun 2000

A petition had been lodged alleging unfair prejudice in the conduct of the company’s affairs. The defendants alleged that when applying for relief under section 459, the claimants had attempted to pervert the course of justice by producing forged or falsified documentation in discovery. The forgery was admitted.
Held: If a party to litigation behaved in such a way as make it impossible safely to grant a judgment in his favour, or, where the behaviour amounted to an abuse of the processes of the court, the court must decline to allow that party to be heard, and to give judgment against him. The object of the rules of discovery was to secure a fair trial. A failure in disclosure might normally not defeat a claim, but a determined attempt to prevent a fair trial should do so: ‘A decision to stop the trial in those circumstances is not based on the court’s desire (or any perceived need) to punish the party concerned; rather it is a proper and necessary response where a party has shown that his object is not to have a fair trial which it is the court’s function to conduct, but to have a trial the fairness of which he has attempted (and continues to attempt) to compromise.’
As to pre-CPR cases: ‘The old authorities are of interest only as the straws in the gale force winds of change which blew in Lord Woolf’s reforms.’ and ‘The attempted perversion of justice is the very antithesis of parties coming before the court on an equal footing. ‘
Further, in this context, a fair trial is a trial which is conducted without an undue expenditure of time and money; and with a proper regard to the demands of other litigants upon the finite resources of the court. The court does not do justice to the other parties to the proceedings in question if it allows its process to be abused so that the real point in issue becomes subordinated to an investigation into the effect which the admittedly fraudulent conduct of one party in connection with the process of litigation has had on the fairness of the trial itself. That, as it seems to me, is what happened in the present case. The trial was ‘hijacked’ by the need to investigate what documents were false and what documents had been destroyed. The need to do that arose from the facts (i) that the petitioners had sought to rely on documents which Nigel Tobias had forged with the object of frustrating a fair trial and (ii) that, as the judge found, Nigel Tobias was unwilling to make a frank disclosure of the extent of his fraudulent conduct, but persisted in his attempts to deceive. The result was that the petitioners’ case occupied far more of the court’s time than was necessary for the purpose of deciding the real points in issue on the petition. That was unfair to the Blackledge respondents; and it was unfair to other litigants who needed to have their disputes tried by the court.
In my view, having heard and disbelieved the evidence of Nigel Tobias as to the extent of his fraudulent conduct, and having reached the conclusion (as he did) that Nigel Tobias was persisting in his object of frustrating a fair trial, the judge ought to have considered whether it was fair to the respondents – and in the interests of the administration of justice generally – to allow the trial to continue. If he had considered that question, then – as it seems to me – he should have come to the conclusion that it must be answered in the negative. A decision to stop the trial in those circumstances is not based on the court’s desire (or any perceived need) to punish the party concerned; rather, it is a proper and necessary response where a party has shown that his object is not to have the fair trial which it is the court’s function to conduct, but to have a trial the fairness of which he has attempted (and continues to attempt) to compromise.’

Roch, Ward, Chadwick LJJ
Times 07-Jul-2000, [2000] CP Rep 59, [2000] EWCA Civ 200, [2001] BCC 591, [2000] BCLC 167, [2000] WL 775004
Bailii
Companies Act 1985 459
England and Wales
Citing:
Appeal from – Arrow Nominees Inc, Blackledge v Blackledge ChD 2-Nov-1999
The applicants sought to strike out a claim under section 459. The two companies sold toiletries, the one as retail agent for the other. They disputed the relationship of the companies, and the use of a trading name. Documents were disclosed which . .
Cited – In re Saul D Harrison and Sons plc CA 1995
The ‘legitimate expectations’ of a party were a label for the ‘correlative right’ to which a relationship between company members may give rise when, on equitable principles, it would be regarded as unfair for a majority to exercise a power . .
Cited – O’Neill and Another v Phillips and Others; In re a Company (No 00709 of 1992) HL 20-May-1999
The House considered a petition by a holder of 25 of the 100 issued shares in the company against the majority shareholder. The petitioner, an ex-employee, had been taken into management and then given his shares and permitted to take 50% of the . .
Cited – Allen v Sir Alfred McAlpine and Sons Ltd CA 1968
The court described the peculiarly difficult position of a solicitor sued for the negligence of losing litigation for his client by reason of having his client’s claim struck out: ‘It is true that if the action for professional negligence were . .
Cited – Landauer Ltd v Comins and Co (a firm) CA 14-May-1991
The first instance Judge had struck out a claim under the provisions of order 24 rule 16(1) in circumstances where a number of relevant documents did not appear on the plaintiffs list of documents and were found to have been destroyed, the . .
Cited – Logicrose Ltd v Southend United Football Club Ltd CA 5-Feb-1988
The agent required the contractual counterparty to pay a bribe of pounds 70,000 to an offshore account.
Held: The bribe was held to be recoverable by the principal whether the principal rescinded or affirmed the contract because it was a . .
Cited – Biguzzi v Rank Leisure Plc CA 26-Jul-1999
The court’s powers under the new CPR to deal with non-compliance with time limits, were wide enough to allow the court to allow re-instatement of an action previously struck out. The court could find alternative ways of dealing with any delay which . .
Cited – UCB Corporate Services Ltd (formerly UCB Bank plc) v Halifax (SW) Ltd CA 6-Dec-1999
It was proper to strike out a claim for abuse of process where the party had been involved in a wholesale disregard of the Civil Procedure Rules and of court orders. The court has a range of remedies appropriate to the degree of such disregard. . .
Cited – Purdy v Cambran 17-Dec-1999
It is necessary to concentrate on the intrinsic justice of a particular case in the light of the overriding objective. ‘For the reasons which I have just given, I think that the question is whether the claim has no real prospect of succeeding at . .
Cited – Birkett v James HL 1977
Exercise of Power to Strike Out
The court has an inherent power to strike out an action for want of prosecution, and the House set down the conditions for its exercise. The power is discretionary and exercisable only where (a) there has been inordinate and inexcusable delay and . .
Cited – Arbuthnot Latham Bank Limited; Nordbanken London Branch v Trafalgar Holdings Limited; Ashton and Ashton CA 16-Dec-1997
The issue was the appropriateness of a Court striking an action out where there has been considerable delay if: (i) the cause of action relied upon by the plaintiff in the proceedings would be statute barred if the action were to be struck out, but . .
Cited – Choraria v Sethia CA 15-Jan-1998
Inordinate and inexcusable delay flouting court rules could itself constitute abuse of process irrespective of the absence of prejudice. A ‘complete, total or wholesale disregard, put it how you will, of the Rules of Court … is capable of . .
Cited – Miles v Mcgregor CA 23-Jan-1998
Increase in findings of inordinate delay accompanied increased reluctance to strike out in absence of established prejudice to other party: ‘The abuse of process route is for cases … when the conduct amounts to an affront to the court and its . .
Cited – Lace Co-Ordinates Ltd v Nem Insurance Co Ltd CA 19-Nov-1998
Referring to the new Civil Procedure Rules: ‘These guidelines … create an entirely new climate in which the court is required to examine the plaintiff’s conduct by reference to the overall interests of justice and fairness (including . .
Appeal From – Arrow Nominees Inc, Blackledge (L) v Blackledge (G), Blackledge (M), Blackledge (GR and MM) ChD 21-Jan-2000
The claimants had begun proceedings claiming unfair prejudice by the defendants in the management of the business. The defendants sought to have the petition struck out saying that the claimants had used falsified documents to base their petition. . .

Cited by:
Cited – Douglas, Zeta-Jones, Northern and Shell Plc v Hello! Ltd, Hola Sa, Junco, The Marquesa De Varela, Neneta Overseas Ltd, Ramey ChD 27-Jan-2003
The claimants sought an order striking out the defendants’ defence on the grounds that, by destroying documents, the possibility of a fair trial had been prejudiced.
Held: Refusing the order, save as to certain paragraphs of the defence, the . .
Cited – A, B, C, D, E, F, G, H, Mahmoud Abu Rideh Jamal Ajouaou v Secretary of State for the Home Department CA 11-Aug-2004
The claimants had each been detained without trial for more than two years, being held as suspected terrorists. They were free leave to return to their own countries, but they feared for their lives if returned. They complained that the evidence . .
See Also – Arrow Nominees Inc, Blackledge (L) v Blackledge (G), Blackledge (M), Blackledge (GR and MM) ChD 21-Jan-2000
The claimants had begun proceedings claiming unfair prejudice by the defendants in the management of the business. The defendants sought to have the petition struck out saying that the claimants had used falsified documents to base their petition. . .
Cited – Ridsdill and others v Smith and Nephew Medical, Duffy, Whittleton EAT 22-Jun-2006
EAT Practice and Procedure – Striking-out/dismissal.
Chairman’s decision to strike out claims which had not been actively pursued and when there had been failure to comply with Tribunal orders. The appeal . .
Cited – Abegaze v Shrewsbury College of Arts and Technology CA 20-Feb-2009
In 2000 the claimant succeeded in his claim for discrimination, but had not pursued his remedy. He now appealed against a refusal to allow him to take it further. He had initially failed to pursue the matter for ill health. He later refused to . .
See Also – Arrow Nominees Inc and others v Blackledge and others CA 28-Feb-2002
. .
Cited – Burns v Royal Mail Group Plc (No 2) (Formerly Consignia Plc), Humphrey EAT 14-Jan-2004
The hearing was an adjourned second hearing. The appeal on sex discrimination had been dismissed, and the balance of the claim for constructive unfair dismissal was adjourned. At that adjourned hearing the claimant now sought to re-open the claims . .
Cited – Shah v Ul-Haq and Others CA 9-Jun-2009
The defendant appealed against a refusal to strike out the claimant’s action saying that the claimant had been involved in a fraud upon the court in an earlier associated claim.
Held: The Rule gave no power to strike out a claim on such a . .
Cited – St Albans Girls School and Another v Neary CA 12-Nov-2009
The claimant’s case had been struck out after non-compliance with an order to file further particulars. His appeal was allowed by the EAT, and the School now itself appealed, saying that the employment judge had wrongly had felt obliged to have . .
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 . .
See Also – Arrow Nominees Inc and Another v Blackledge and others CA 13-Jul-2004
. .
Cited – Fairclough Homes Ltd v Summers SC 27-Jun-2012
The respondent had made a personal injury claim, but had then been discovered to have wildly and dishonestly exaggerated the damages claim. The defendant argued that the court should hand down some condign form of punishment, and appealed against . .
Cited – Summers v Fairclough Homes Ltd CA 7-Oct-2010
The claimant was said to have fraudulently exaggerated the damages associated with a valid personal injury claim. The defendant argued that the claim should be struck out entirely as a punishment.
Held: The defendant’s appeal failed. The Court . .
Cited – Zahoor and Others v Masood and Others CA 3-Jul-2009
It was argued that the judge should have struck the claim out as an abuse of process on the ground that some at least of the claims were based on forged documents and false written and oral evidence.
Held: Arrow Nominees was authority for the . .
Cited – Bilta (Uk) Ltd v Nazir and Others ChD 24-Nov-2010
The company had been wound up by the Revenue on the basis that it had been used for a substantial VAT fraud. The liquidators now sued those said to have participated. A defendant denied the jurisdiction because of a disputed arbitration agreement. . .
Cited – Hughes Jarvis Ltd v Searle and Another CA 15-Jan-2019
The claimant and director appealed from orders associated with a finding of contempt of court. The Director, the case having been adjourned overnight during the course of his evidence, and despite warnings to the contrary had sought to communicate . .
Cited – Emuemukoro v Croma Vigilant (Scotland) Ltd and Another (Practice and Procedure) EAT 22-Jun-2021
Response Properly Struck Out – Non-compliance
On the first day of a five-day hearing to consider the Claimant’s claims of unfair dismissal, wrongful dismissal and holiday pay, the Tribunal struck out the Respondents’ Response for failing to comply with the Tribunal’s orders. Those failures . .

Lists of cited by and citing cases may be incomplete.

Litigation Practice, Company

Updated: 19 November 2021; Ref: scu.77874

Simpson v The Westminster Palace Hotel Company Limited: 4 Jun 1860

[1860] EngR 817, (1860) 2 De G F and J 141, (1860) 45 ER 575
Commonlii
England and Wales
Cited by:
Cited – Yorkshire Miners’ Association and Others v Howden and Others HL 14-Apr-1905
A miners’ association, registered under the Trade Union Act 1871, made certain payments from its funds to its members, who were out of employment, in circumstances which involved a direct contravention of the rules of the association. Held (Lords . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 17 November 2021; Ref: scu.285656

In re Re Rose, Midland Bank Executor and Trustee Company Limited v Rose: ChD 1949

The testator handed a transfer of the relevant shares to the donee, Mr Hook, together with the relevant certificates. The transfer had not been registered by the date of his death.
Held: Equity will not compel an imperfect gift to be completed. Nevertheless, the testator had done everything in his power to divest himself of the shares in question to Mr Hook. He had executed a transfer. It was not suggested that the transfer was not in accordance with the company’s regulations. He had handed that transfer together with the certificates to Mr Hook. There was nothing else the testator could do. Mr Hook’s legal title would not be perfected until the directors passed the transfer for registration, but that was not an act which the testator had to do, it was an act which depended on the discretion of the directors. The gift was effective

Jenkins J
[1949] Ch 78
England and Wales
Cited by:
Cited – Pennington and Another v Waine, Crampton and others CA 4-Mar-2002
The deceased had made a gift of shares. She had executed a transfer, and acting upon the promise, the donee had agreed to become a director which he could only do if he also became a shareholder. The transfer was delivered to the deceased’s agent, . .
Approved – In re Rose, Rose v Inland Revenue Commissioners CA 1952
The deceased had executed instruments of transfer and delivered them with the relevant certificates to the transferees.
Held: The transfers were transferred the whole of the deceased’s title both legal and equitable in the shares and all . .
Cited – Mascall v Mascall CA 13-Jun-1984
The question was whether a gift of land was completely constituted by delivery of the land certificate
Held: Equity will not come to the aid of a volunteer. Therefore, if a donee needs to get an order from a court of equity in order to . .
Cited – Pennington and Another v Waine, Crampton and others CA 4-Mar-2002
The deceased had made a gift of shares. She had executed a transfer, and acting upon the promise, the donee had agreed to become a director which he could only do if he also became a shareholder. The transfer was delivered to the deceased’s agent, . .
Cited – Burnett’s Trustee v Grainger and Another HL 4-Mar-2004
A flat was sold, but before the purchasers registered the transfer, the seller was sequestrated, and his trustee registered his own interest as trustee. The buyer complained that the trustee was unjustly enriched.
Held: The Act defined the . .
Appeal from – In re Rose, Rose v Inland Revenue Commissioners CA 1952
The deceased had executed instruments of transfer and delivered them with the relevant certificates to the transferees.
Held: The transfers were transferred the whole of the deceased’s title both legal and equitable in the shares and all . .
Mentioned – Zeital and Another v Kaye and Others CA 5-Mar-2010
The deceased had held an apartment through beneficial interests in shares in a limited company. He died intestate. The parties disputed the ownership of the two shares. The company had been put into a members’ liquidation, and the company liquidator . .

Lists of cited by and citing cases may be incomplete.

Company, Wills and Probate, Equity

Updated: 17 November 2021; Ref: scu.183412

Lily Property Nominees Ltd and Another v Stonebridge and Others: ChD 31 Jul 2020

This is an unfair prejudice petition under section 994 of the Companies Act 2006 concerning a dispute between homeowners and residents of a private estate in South London. Each holds a share in the company which manages the common parts of the estate. The Petitioners claim that the company’s affairs have been managed in bad faith, resulting in their interests in the company being unfairly prejudiced.

Insolvency and Companies Court Judge Burton
[2020] EWHC 2113 (Ch)
Bailii
England and Wales

Company, Equity

Updated: 17 November 2021; Ref: scu.653372

Caparo Industries plc v Dickman: QBD 5 Aug 1988

The plaintiff complained that they had suffered losses after purchasing shares in a company, relying upon statements made in the accounts by the auditors (third defendants).
Held: The claim failed. Whilst auditors might owe statutory duties to shareholders as a class, there was no common law duty to individual shareholders such as would enable an individual shareholder to recover damages for loss sustained by him in acting in reliance upon the audited accounts.

Sir Neil Lawson
[1988] BCLC 387, Times, 5 August 1988
England and Wales
Cited by:
Appeal from – Caparo Industries plc v Dickman CA 1989
The plaintiffs had purchased shares in a company, relying upon accounts prepared by the second defendant auditors. They appealed against a decision that the auditors did not owe them a duty in negligence, not being shareholders.
Held: The . .
At QBD – Caparo Industries Plc v Dickman and others HL 8-Feb-1990
Limitation of Loss from Negligent Mis-statement
The plaintiffs sought damages from accountants for negligence. They had acquired shares in a target company and, relying upon the published and audited accounts which overstated the company’s earnings, they purchased further shares.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Company, Professional Negligence

Updated: 17 November 2021; Ref: scu.552889

Caparo Industries plc v Dickman: CA 1989

The plaintiffs had purchased shares in a company, relying upon accounts prepared by the second defendant auditors. They appealed against a decision that the auditors did not owe them a duty in negligence, not being shareholders.
Held: The appeal succeeded (O’Connor LJ dissenting). Whilst there was no relationship between an auditor and a potential investor sufficiently proximate to give rise to a duty of care at common law, there was such a relationship with individual shareholders, so that an individual shareholder who suffered loss by acting in reliance on negligently prepared accounts, whether by selling or retaining his shares or by purchasing additional shares, was entitled to recover in tort.
Bingham LJ said that in considering whether or not a duty of care of particular scope was incumbent upon a defendant it was material to take into consideration whether it was just and reasonable that it should be so.

Bingham LJ, O’Connor LJ
[1989] QB 653
England and Wales
Citing:
Appeal from – Caparo Industries plc v Dickman QBD 5-Aug-1988
The plaintiff complained that they had suffered losses after purchasing shares in a company, relying upon statements made in the accounts by the auditors (third defendants).
Held: The claim failed. Whilst auditors might owe statutory duties to . .
Adopted – Peabody Donation Fund v Sir Lindsay Parkinson and Co Ltd HL 18-Oct-1983
Architects proposed a system of flexible drains for a site, but the contractors persuaded them to accept rigid drains which once laid proved inadequate at considerable cost. The local authority had permitted the departure from the plans.
Held: . .

Cited by:
At CA – Caparo Industries Plc v Dickman and others HL 8-Feb-1990
Limitation of Loss from Negligent Mis-statement
The plaintiffs sought damages from accountants for negligence. They had acquired shares in a target company and, relying upon the published and audited accounts which overstated the company’s earnings, they purchased further shares.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Professional Negligence, Company

Updated: 17 November 2021; Ref: scu.552890

Cukurova Finance International Ltd and Another v Alfa Telecom Turkey Ltd: PC 9 Jul 2013

British Virgin Islands

Lord Neuberger, Lord Mance, Lord Kerr, Lord Clarke, Lord Sumption
[2013] UKPC 20, [2013] 4 All ER 936
Bailii
Commonwealth
Citing:
See Also – Cukurova Finance International Ltd and Another v Alfa Telecom Turkey Ltd PC 5-May-2009
(British Virgin Islands) Shares in two companies incorporated under the BVI Business Companies Act 2004, Cukurova Finance International Ltd and Cukurova Telecoms Holdings Ltd were provided as security under two sets of equitable mortgages, one set . .
See Also – Cukurova Finance International Ltd and Others v Alfa Telecom Turkey Ltd PC 23-May-2012
(British Virgin Islands) Interlocutory issue as to who should manage the affairs of the Turkcell mobile telephone business pending the Board’s final adjudication (after a hearing which should take place this autumn) on the rights and wrongs of what . .
See Also – Cukurova Finance International Ltd and Another v Alfa Telecom Turkey Ltd PC 30-Jan-2013
(British Virgin Islands) The claimant sought to recover shareholdings given in charge.
Held: There was an event of default, which entitled ATT to accelerate the loan and to appropriate – or forfeit – the charged shares, but that relief against . .

Cited by:
See Also – Cukurova Finance International Ltd and Another v Alfa Telecom Turkey Ltd PC 29-Jul-2013
(British Virgin Islands) . .
See Also – Cukurova Holding As v Sonera Holding Bv PC 13-May-2014
(British Virgin Islands) The appellant sought to have set aside the Final Decision of an arbitrator. . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 17 November 2021; Ref: scu.513389

Re Probe Data Systems Ltd (No.3): CA 1992

An appeal from a director disqualification is to be under the Insolvency Rules.

[1992] BCC 110
Company Directors Disqualification Act 1986 6
England and Wales
Cited by:
Cited – Secretary of State for Trade and Industry v Paulin ChD 13-May-2005
The director sought to appeal an order disqualifying him form acting as a company director.
Held: The disqualification proceedings were properly charactised as insolvency proceedings and therefore there was no requirement for permission to . .

Lists of cited by and citing cases may be incomplete.

Company, Insolvency

Updated: 16 November 2021; Ref: scu.225440

Verderame v Commercial Union Assurance Co Plc: CA 2 Apr 1992

The insurance brokers, acting to arrange insurance for a small private limited company did not owe a duty in tort to the directors of that company personally. Where an action was brought in a tort and in breach of contract, damages could not be awarded on the tort where they were not available in contract.

Balcombe LJ
[1992] BCLC 793, Times 02-Apr-1992
England and Wales
Citing:
Followed – Watts and Co v Morrow CA 30-Jul-1991
The plaintiff had bought a house on the faith of the defendant’s report that there were only limited defects requiring repair. In fact the defects were much more extensive. The defendant surveyor appealed against an award of damages after his . .

Cited by:
Cited – Johnson v Gore Wood and Co (a Firm) CA 12-Nov-1998
The claimant had previously issued a claim against the defendant solicitors through his company. He now sought to pursue a claim in his own name. It was resisted as an abuse of process, and on the basis that no personal duty of care was owed to the . .
Cited – Hamilton Jones v David and Snape (a Firm) ChD 19-Dec-2003
The claimant was represented by the respondent firm of solicitors in an action for custody of her children. Through their negligence the children had been removed from the country. She sought damages for the distress of losing her children.
Agency, Insurance, Company, Contract, Negligence, Damages

Updated: 16 November 2021; Ref: scu.181818

European Commission v Kingdom of The Netherlands: ECJ 20 Jun 2013

ECJ Failure of a Member State to fulfil obligations – Directive 2005/56/EC – Cross-border mergers of limited liability companies – Article 16(2)(a) and (b) – Company resulting from a cross-border merger – Employees employed in the Member State where the company has its registered office or in other Member States – Participation rights – Failure to provide identical rights

C-635/11, [2013] EUECJ C-635/11
Bailii
Directive 2005/56/EC
European

European, Company

Updated: 14 November 2021; Ref: scu.511002

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. Pomeroy supervised the activities of the companies, provided office support, and carried out the acquisition and development of various sites. For each site acquired, a separate company was incorporated.
In 1956, Castleford entered a lease guaranteed by Pomeroy; the latter also, from time to time, paid the rent due by Castleford under the lease. In 1960, Pomeroy and two other companies within the group had overdrawn their bank accounts with Lloyds Bank Ltd (‘the bank’) by pounds 22,091. Castleford guaranteed the payment of all moneys and liabilities owing or incurred by Pomeroy and deposited the title deeds of the leasehold property to the bank as security.
A year or so later, Castleford borrowed money from Askinex on security of a first mortgage over the leased property; Castleford used the proceeds of that mortgage towards repayment of Pomeroy’s overdraft. When Pomeroy’s overdraft increased again three months later, Castleford charged the leasehold property to the bank subject to the prior security in favour of Askinex. At that time, the officers of the group of companies and the bank did not consider the interest of Castleford separately from that of the group.
Castleford later agreed to sell the property to the Charterbridge Corporation Ltd (‘Charterbridge’) for over pounds 30,000. Charterbridge paid pounds 20,000 on account. Almost the full amount was used towards discharging Askinex’s mortgage, leaving the bank as first mortgagee. Subsequently, Charterbridge sought a declaration that the charge created by Castleford in favour of the bank was outside the scope of Castleford’s business and purposes and was therefore ultra vires and invalid.
Pennycuick J held that the directors who had procured Castleford to enter into the guarantee and charge looked to the interests of the group as a whole. The directors considered that it was in the interests of the group as a whole that Castleford should enter into the transactions, but the directors did not take into consideration the interests of Castleford separately from that of the group.
Pennycuick J rejected the argument that the transactions by Castleford were ultra vires. In obiter, however, his Honour considered the separate argument that the directors were not acting with a view to benefit Castleford (separately and in contradistinction to the group). His Honour described this as a question of fact with Charterbridge bearing the burden of proof.
Charterbridge argued that absent separate consideration being given to Castleford’s interests, the directors, ipso facto, must be treated as not having acted with a view to the benefit of Castleford. Pennycuick J considered this was an ‘unduly stringent test and would lead to absurd results’; that is, ‘unless the directors of a company address their mind specifically to the interests of the company in connection with each particular transaction, that transaction would be void notwithstanding that the transaction might in fact be beneficial to the company’. Pennycuick J also rejected the competing argument advanced by the bank that it was a sufficient answer to the claim that the directors of Castleford looked to the benefit of the group as a whole.
In the context of the rejection of that contention, his Honour stated: ‘Each company in the group is a separate legal entity and the directors of a particular company are not entitled to sacrifice the interests of that company. This becomes apparent when one considers the case where the particular company has separate creditors. The proper test, I think, in the absence of actual separate consideration, must be whether an intelligent and honest man in the position of a director of the company concerned, could, in the whole of the existing circumstances, have reasonably believed that the transactions were for the benefit of the company.’
His Honour concluded that in the circumstances the answer to that question was ‘yes’; accordingly, there was no breach of duty by the director.
Special considerations arise as to his duties if a director acts in the interests not of the company of which he is a director but of the group of companies of which that company forms part.
Pennycuick J said: ‘ . . I must proceed to express a conclusion upon the contention that in creating the guarantee and legal charge, the directors were not acting with a view to the benefit of Castleford. That is a question of fact, and the burden of proof lies on the plaintiff company. As I have already found, the directors of Castleford looked to the benefit of the group as a whole and did not give separate consideration to the benefit of Castleford. Mr Goulding contended that in the absence of separate consideration, they must, ipso facto, be treated as not having acted with a view to the benefit of Castleford. That is, I think, an unduly stringent test and would lead to really absurd results, i.e. unless the directors of a company addressed their minds specifically to the interest of the company in connection with each particular transaction, that transaction would be ultra vires and void, notwithstanding that the transaction might be beneficial to the company. Mr Bagnall for the bank contended that it is sufficient that the directors of Castleford looked to the benefit of the group as a whole. Equally I reject that contention. Each company in the group is a separate legal entity and the directors of a particular company are not entitled to sacrifice the interest of that company. This becomes apparent when one considers the case where the particular company has separate creditors. The proper test, I think, in the absence of actual separate consideration, must be whether an intelligent and honest man in the position of a director of the company concerned, could, in the whole of the existing circumstances, have reasonably believed that the transactions were for the benefit of the company. If that is the proper test, I am satisfied that the answer here is in the affirmative.’

Pennycuick J
[1970] 1 Ch 62, [1969] 2 WLR 791, [1969] 2 All ER 1185
England and Wales
Citing:
Distingished – 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 – 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. . .

Lists of cited by and citing cases may be incomplete.

Company

Leading Case

Updated: 14 November 2021; Ref: scu.181878

House of Fraser plc v ACGE Investments Limited: HL 1987

Preference shareholders objected to the compulsory payment-off of their shares at par, effecting a reduction of capital by means of the paying off and cancelling of the company’s preference shares. No meeting of preference shareholders had been held to approve the reduction, despite an article which called for such a meeting if the rights attached to the preference shares were ‘modified, commuted, affected or dealt with’.
Held: The proposed cancellation of preference shares did not attract the protection of that article, because the cancellation of the shares was in accordance with the rights originally attached to those shares, specifically, the right to a return of capital in priority to other shareholders where any capital was in excess of the company’s needs. The cancellation of the shares did not constitute a modification, commutation, affecting or dealing with rights attached to them.
Lord Keith of Kinkel stated: ‘The reduction of capital now proposed to be made gives effect to that right [that the second preference shareholders were entitled to priority of repayment after certain preferences shares and before any other shareholders on a reduction of capital]. This necessarily involves, of course, that all other rights attached to the shares will come to an end, but that is something to which the holders of the shares must be taken to have agreed as a necessary consequence of their right to prior repayment receiving effect. Upon no view of the matter can it be said that as a result any of the special rights attached to the shares has been ‘modified, commuted, affected or dealt with’ within the meaning of article 12. These words all contemplate that after the relevant transaction the shareholders in question will continue to possess some rights, albeit of a different nature from those which they possessed before the transaction. The proposal for reduction of capital involves complete cancellation of the shares.’

Lord Keith of Kinkel
[1987] AC 387
Scotland
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: 14 November 2021; Ref: scu.195959

Chamberlains Wharf Limited v Smith: CA 18 Jul 1900

The rules of an association, called the Tea Clearing House, the members of which were dock companies and tea warehouse keepers carrying on the business of warehousing tea in bond, provided (rule 11) that every member should charge on teas the respective rates and adhere to the terms and conditions specified in a schedule to the rules, and should not be at liberty to depart from them in any way, except that a discount not exceeding 10 per cent, might be allowed on the said rates. No other discount, no money gratuities, and no advantages, direct or indirect, should be offered or allowed by any member to any merchant, broker, or other person in connection with any matter or thing in anywise relating to the Tea Clearing House agreement.
By rule 14, No subscriber should be entitled to warehouse or deposit tea with, or employ in connection with tea, any dock company or tea warehouse keeper who was not a member of the Clearing House, or to purchase or sample any tea from the warehouse of any non-member.
By rule 15, Any member breaking or failing to observe any of the rules was to be liable to expulsion by resolution of the committee.
The committee passed a resolution expelling the plaintiffs for an alleged breach of the rules, and they brought an action against the members of the committee to restrain them from acting on the resolution, on the ground (inter alia) that the plaintiffs had not had an opportunity of being heard in their defence. Kekewich J. granted an interlocutory injunction.
Held, on appeal, that the association was a ‘trade union’ within the meaning of s. 16 of the Trade Union Act Amendment Act, 1876 ; that its objects were illegal independently of the Trade Union Act, 1871, and that s. 4 of that Act prevented the Court from directly enforcing the agreement between the members:
Held, also, that by granting the injunction the Court would be directly
enforcing the agreement.
The injunction was accordingly dissolved.

(1900) 2 Ch 605, [1900] UKLawRpCh 147
Commonlii
England and Wales
Cited by:
Cited – Yorkshire Miners’ Association and Others v Howden and Others HL 14-Apr-1905
A miners’ association, registered under the Trade Union Act 1871, made certain payments from its funds to its members, who were out of employment, in circumstances which involved a direct contravention of the rules of the association. Held (Lords . .

Lists of cited by and citing cases may be incomplete.

Employment, Company, Commercial

Updated: 12 November 2021; Ref: scu.653366

M’Cosh v Murray: HL 5 May 1899

By an agreement entered into by four parties-A, B, C, and D-it was provided that A and B should advance respectively to C and D, in equal proportions, the capital required to start and carry on a business for a period of three years. A’s advance to C was expressly a loan, but B’s advance to D was expressed to be on behalf of D without any obligation for repayment either by C or D.
C was declared to be the sole partner, in the meantime, of the business, and it was agreed that he should manage the finances, while B was to be manager of the works. Beyond a right of inspecting the books, and co., A and B were to have no concern with the management of the business.
It was provided that the profits, after payment of salaries to C and D, and interest on the sums advanced by A and B, should be accumulated for three years, one-half to the credit of C and one-half to the credit of a ‘suspense account,’ and the losses were to be debited in the same way, so that at the end of the three years’ trading the balance of profit or loss, as the case might be, would stand to the credit or debit of these two accounts. A and B had the power to require, at any time during the three years, that the balance at the credit of these two accounts should be applied to repayment of the capital advanced by them. One-half, both of the accumulated profits as represented by the suspense account, and of the assets of the firm, was at the absolute disposal of B at the expiry of the contract, and he had similar rights both in the profits and the assets in the event of the business being wound up during the three years.
It was agreed that at the expiry of the three years B should be entitled to call upon D to take C as a partner, B’s share in the assets and the accumulations in the suspense account being made over to D.
Held (aff. the judgment of the First Division) that these provisions showed that the business was carried on by and for behoof of B, and that he was liable as a partner.

Lord Chancellor (Halsbury) and Lords Watson, Shand, and Davey
[1899] UKHL 619, 36 SLR 619
Bailii
England and Wales

Company

Updated: 12 November 2021; Ref: scu.631834

JMMB Merchant Bank Ltd v The Real Estate Board: PC 20 Apr 2015

(Jamaica) The Board was asked ‘ two issues, namely (i) whether a charge in favour of the Real Estate Board (‘the REB’) is valid only if it has been registered under section 93 of the Companies Act 2004; and (ii) to what extent (if at all) does a charge in favour of a regulated financial institution rank pari passu with the REB’s charge.’

Lady Hale
Lord Sumption, Lord Carnwath, Lord Hughes, Lord Hodge
[2015] UKPC 16
Bailii
England and Wales

Land, Company

Updated: 12 November 2021; Ref: scu.545684

Barton v Morris: 1985

A couple lived together as man and wife and bought a property for use as a guest house business to be run as a partnership. The conveyance executed by both of them included an express declaration that they held the property upon trust for themselves as beneficial joint tenants. It was bought for andpound;40,000, of which the man contributed andpound;900. There was no written partnership agreement, but profits and losses were shared equally. The woman kept the partnership’s books and accounts. Her draft accounts showed the property as an asset of the partnership. Rates were shown as a partnership outgoing, as was interest on a temporary bank loan. The woman died intestate and there was a dispute between the estates. The man said that he took the property as the survivor of a joint tenancy. The woman’s mother, as administratix, said that the joint tenancy had been severed or alternatively that the proper inference was that the property should be treated as a partnership asset.
Held: The man succeeded: ‘For the plaintiff, Mr Jennings advanced the case in favour of severance in two ways. He accepted that the onus of severance lay on the plaintiff, but he pointed out that equity leans in favour of tenancies in common. He observed, and I accept, that, in a case such as this, the evidence of the defendant must be viewed with caution . . In short, the third of these three modes of severance is by any course of dealing sufficient to intimate that the interests of the joint tenants were mutually treated as constituting a tenancy in common . .
Mr Jennings’ alternative formulation was closely related. It was that from the matters I have just mentioned the inference to be drawn is that the parties agreed that the property should be treated as a partnership asset. So treating the property gives rise to the presumption of severance mentioned in Lindley on Partnership, 15th ed. (1984), p. 77: ‘where jointly owned property is brought into partnership, and thereafter constitutes a partnership asset, a severance will be presumed, since the right of survivorship has no place in a partnership.’
I shall consider the two claims in that order.
To my mind the evidence established clearly that when the express declaration of joint tenancy in the conveyance was executed by the parties in mid-August 1979 they both knew what the effect of that joint tenancy would be, and they both intended that the property should automatically accrue to the survivor on the death of the first to die. I accept the evidence of Miss Malthouse, the solicitor who acted for the parties on their purchase, concerning what passed between her and Miss Barton and the defendant on this topic prior to completion . . . Again, it is plain from the evidence that from the outset the parties hoped and intended that the farmhouse would be used by them as a guest house, and indeed, they took over one booking from their vendor. They planned to carry on such a business there together, with the house also being their home . . .

Further, I think it is clear that when the draft accounts were discussed with Mr Howells [their accountant] in January 1981 nothing was said to suggest that the inclusion of the property in the partnership accounts would alter or was intended to alter in any way the existing arrangements agreed between the parties regarding the property when it was acquired in 1979.
In those circumstances . . . I do not accept that . . . Miss Barton’s inclusion of the property in the draft accounts as I have mentioned, and the defendant’s awareness of this, showed an intention on her part, let alone the defendant’s part, that henceforth the property was to be held as tenants in common . . . That would have represented a fundamental change in the parties’ intention from what was expressed when the property was bought . . . Nor . . . am I able to accept the plaintiff’s alternative formulation. With the parties’ intention being as I have mentioned, I can see no justification for treating that intention as defeated by such evidence as there is of an intention that the property should be a partnership asset. There may well be some inconsistency between those two intentions, but I am unable to regard the evidence that the property should be an asset of their joint venture as evidence of an intention superseding or affecting the intention that the survivor should by right of survivorship take the property. In truth so far as Miss Barton and the defendant were concerned, the partnership and the accounting records kept of the partnership business were formalities necessary because of tax considerations: receipts and expenditure were recorded and profits and losses were arrived at and formally split between them. But really, as Miss Barton said to her solicitor, Miss Malthouse, on one occasion, they did not have a business relationship.
In my judgment, therefore, on the evidence before me, it is not established that at any time before Miss Barton’s death Miss Barton or the defendant, or either of them, intended to treat the property as no longer held by them as beneficial joint tenants.’ Equity leans in favour of tenancies in common.

Nicholls J
[1985] 1 WLR 1257
England and Wales
Citing:
Cited – Burgess v Rawnsley CA 15-Apr-1975
. .
Cited – Williams v Hensman 10-Jun-1861
A fund of money was bequeathed on trust to be invested so as to generate an income payable to A ‘the principal to go to her children at her death’.
Held: The will created a joint tenancy. The court set out three ways in which a joint tenancy . .

Cited by:
Cited – Bathurst (As Administrator of the Estate of Michael David Bathurst Deceased) v Scarborow CA 1-Apr-2004
The deceased and defendant had been partners and friends. They had bought a property expressly for the partnership and was conveyed into their names as joint tenants.
Held: The declaration in the partnership was not itself sufficient cogent . .
Cited – Bathurst (As Administrator of the Estate of Michael David Bathurst Deceased) v Scarborow CA 1-Apr-2004
The deceased and defendant had been partners and friends. They had bought a property expressly for the partnership and was conveyed into their names as joint tenants.
Held: The declaration in the partnership was not itself sufficient cogent . .

Lists of cited by and citing cases may be incomplete.

Equity, Company

Updated: 12 November 2021; Ref: scu.238853

Secretary of State for Trade and Industry v Hall and Nuttall: ChD 28 Jul 2006

The Secretary sought disqualification of the defendants. The second defendant had not been a director of the company, but director of another company which in turn held a directorship in the defaulting company.
Held: The claim failed: ‘i) As I have already pointed out the purposes of section 6 of the CDDA and section 214 of the Insolvency Act must be similar, namely, the protection of the public from errant directors. The term ‘director’ is similarly defined in both Acts: see section 22 CDDA and section 251 1A. There can therefore be no justification in giving that term a different construction for the purposes of section 6 than that which it was given in the Hydrodam case for the purposes of section 214.
ii) In the Hydrodam case, in the passage which I have set out above, Millett J finds that the director of a corporate director is not, without more, constituted a director, whether shadow or de facto of a subject company. However I do not read his judgment as saying that this can never happen. I can well accept that an individual through his control of a corporate director can constitute himself a de facto director of a subject company. It seems to me that whether or not he does so will depend on what that individual procures the corporate director to do. In theory I am not bound by the judgment of Millett J in the Hydrodam case. Even putting on one side the authority of that judge in this and other fields of the law, I would need convincing reasons for not following it. I can find none.
iii) It seems to me that in order to be constituted a de facto director of a subject company, a director of a corporate de jure director must cause the corporate director to take actions with relation to the subject company as would have constituted it a de facto director of that company were it not already a director de jure.
iv) In addition the degree of control which the director of the corporate director exercises over that company will be of relevance. In the present case Mr Nuttall’s control was absolute but the situation may be substantially different where the corporate director is controlled by a board with a number of members with different responsibilities. Equally the shareholder control of the corporate director may be relevant.
v) In the present case Mr Nuttall has not, either individually, or through his control of LDL taken any step which indicated that either he or LDL had ‘assumed the status and functions’ of a director of Mercury. They had positively declined to do so. It follows that Mr Nuttall, by contrast with LDL, was never subject to the duty to ensure that Mercury kept proper books of account, complying with section 221 of the Companies Act, or that the six companies made proper returns to the companies registry. As a de jure director LDL could be made subject to those duties.’

Evans-Lombe J
[2006] EWHC 1995 (Ch)
Bailii
Company Directors Disqualification Act 1986
England and Wales
Cited by:
Cited – Holland v Revenue and Customs and Another CA 2-Jul-2009
The appellant supported IT workers. Through his own company, he set up companies in which his company was a director, and which companies in turn employed the IT workers securing substantial savings in higher rate Corporation Tax.
Held: The . .
Cited – Holland v Revenue and Customs and Another SC 24-Nov-2010
The Revenue sought an order under section 212 of the 1986 Act, for payment of the tax debts of the insolvent company by a de facto director. H had organised a scheme under which IT contractors had worked through companies created by him under a . .

Lists of cited by and citing cases may be incomplete.

Company

Leading Case

Updated: 12 November 2021; Ref: scu.246076

In re Bird Precision Bellows Ltd: ChD 1984

The court considered the method of valuation of a minority shareholding in a forced purchase by the other shareholders. Nourse J said: ‘I would expect that in a majority of cases where purchase orders are made under section 75 in relation to quasi-partnerships the vendor is unwilling in the sense that the sale has been forced upon him. Usually he will be a minority shareholder whose interests have been unfairly prejudiced by the manner in which the affairs of the company have been conducted by the majority. On the assumption that the unfair prejudice has made it no longer tolerable for him to retain his interest in the company, a sale of his shares will invariably be his only practical way out short of a winding up. In that kind of case it seems to me that it would not merely not be fair, but most unfair, that he should be bought out on the fictional basis applicable to a free election to sell his shares in accordance with the company’s articles of association, or indeed on any other basis which involved a discounted price. In my judgment the correct course would be to fix the price pro rata according to the value of the shares as a whole and without any discount, as being the only fair method of compensating an unwilling vendor of the equivalent of a partnership share.’
‘In the case of the shareholder who acquires shares from another at a price which is discounted because they represent a minority it is to my mind self-evident that there cannot be any universal or even a general rule that he should be bought out under section 75 on a more favourable basis, even in a case where his predecessor has been a quasi-partner in a quasi-partnership. He might himself have acquired the shares purely for investment and played no part in the affairs of the company. In that event it might well be fair – I do not know – that he should be bought out on the same basis as he himself had bought, even though his interests had been unfairly prejudiced in the meantime. A fortiori, there could be no universal or even a general rule in a case where the company had never been a quasi-partnership in the first place.
In summary, there is in my judgment no rule of universal application. On the other hand, there is a general rule in a case where the company is at the material time a quasi-partnership and the purchase order is made in respect of the shares of a quasi-partner . . It seems clear to me that . . that is [namely, a valuation on a non-discounted basis], in general, the fair basis of valuation in a quasi-partnership case, and that it should be applied in this case unless the respondents have established that the petitioners acted in such a way as to deserve their exclusion from the company.’

Nourse J
[1984] 3 All ER 444, [1984] Ch 419, [1984] BCLC 195, [1983] 1 BCC 98, [1984] 2 WLR 869
Companies Act 1948 75, Companies Act 1980 75
England and Wales
Citing:
Cited – In re Jermyn Street Turkish Baths Ltd ChD 1970
Where an order provides for the purchase of the shares of a delinquent majority shareholder in a company in an oppression suit, the shares were to be valued on an inquiry as at the date of the petition.
Pennycuick J said: ‘Section 210 gives the . .

Cited by:
Appeal from – 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 . .
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, . .
Cited – Irvine and others v Irvine and Another ChD 23-Mar-2006
The court had made an order for the purchase of a minority shareholding after finding prejudicial behaviour by the majority. It now considered valuation of the shares in a 49.96% shareholding. The question was whether the valuation should be . .
Cited – 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 . .
Cited – Seery v Leathes Prior (A Firm) QBD 24-Jan-2017
The claimant alleged professional negligence against his former solicitors in the settlement of his claim against his former partners.
Held: The claim failed. There had been no clear duty to give the advice the claimant said should have been . .

Lists of cited by and citing cases may be incomplete.

Company

Leading Case

Updated: 11 November 2021; Ref: scu.192623

Ebrahimi v Westbourne Galleries Ltd and Others (on Appeal from In Re Westbourne Galleries Ltd): HL 3 May 1972

Unfair Prejudice to Minority Shareholder

A company had operated effectively as a partnership between two and then three directors. No dividends had been paid, but the directors had received salaries. One director was removed and sought an order for the other to purchase his shares, or alternatively for the company to be wound up on the just and equitable ground. The company had promised to begin to pay dividends. The appellant sought an order for the winding up of the company.
Held: In the case of a small company the rights and obligations of a company went beyond bare company law requirements. The applicant had been excluded from being involved in the management of the company against his reasonable expectations. Since he was unable effectively to dispose of his interest, the company should be wound up. The term ‘quasi-partnership’ is dangerously misleading. Equitable considerations can come to be applied where the association has personal characteristics and rests on a relationship of trust and confidence, and all members are expected to take an active part and share transfers are restricted.
Lord Wilberforce said: ‘A limited company is more than a mere legal entity, with a personality in law of its own: that there is room in company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights, expectations and obligations inter se which are not necessarily submerged in the company structure. That structure is defined by the Companies Act and by the articles of association by which shareholders agree to be bound. In most companies and in most contexts, this definition is sufficient and exhaustive, equally so whether the company is large or small. The ‘just and equitable’ provision does not, as the respondents suggest, entitle one party to disregard the obligation he assumes by entering a company, nor the court to dispense him from it. It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is, of a personal character arising between one individual and another, which may make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way.’

Lord Wilberforce, Viscount Dilhorne, Lord Pearson, Lord Cross of Chelsea and Lord Salmon
[1975] 235 EG 901, [1973] AC 360, [1972] 2 All ER 492, [1972] 2 WLR 1289
lip
Companies Act 1948 220 222(f)
England and Wales
Citing:
Approved – In re Wondoflex Textiles Pty Ltd 1951
The court contrasted the literal meaning of the company’s articles with the true intentions of the parties: ‘It is also true, I think, that, generally speaking, a petition for winding up, based upon the partnership analogy, cannot succeed if what is . .
Approved – In re Straw Products Pty Ltd 1942
The court considered the requirement on a partner to retire under a ‘just and reasonable’ provision: ‘All that Hinds has done in the past in exercise of his control has been within his legal powers. The question is whether he has used those powers . .
Approved – Loch v John Blackwood Ltd PC 1924
The section gave five grounds upon which a company may be wound up and a ‘just and equitable’ ground.
Held: the latter was not to be construed restrictively by ejusdem generis with the other grounds. A company could be wound up if a . .
Approved – In re Yenidje Tobacco Co Ltd CA 1916
A company had been set up by two tobacco manufacturers, Mr Rothman and Mr Weinberg. The relationship between them had broken down to the extent that the two shareholders were not on speaking terms and that no business which deserved the name of . .
Approved – Symington v Symington’s Quarries Ltd IHCS 1905
. .
Applied – Blisset v Daniel 1853
The court considered the limits on a power of expulsion from a partnership.
Held: (Page-Wood V-C) Construing the articles, two-thirds of the partners could expel a partner by serving a notice upon him without holding any meeting or giving any . .

Cited by:
Cited – O’Neill and Another v Phillips and Others; In re a Company (No 00709 of 1992) HL 20-May-1999
The House considered a petition by a holder of 25 of the 100 issued shares in the company against the majority shareholder. The petitioner, an ex-employee, had been taken into management and then given his shares and permitted to take 50% of the . .
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, . .
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. . .
Cited – 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.

Equity, Company

Leading Case

Updated: 11 November 2021; Ref: scu.174274

Momax Logistik Gmbh v Bundesamt Fur Justiz: ECJ 6 Feb 2014

ECJ Reference for a preliminary ruling – Company law – Directive 78/660/EEC – Publication of consolidated annual accounts of certain types of company – Application of the rules on the publication of accounts to companies governed by the law of one Member State and forming part of a group whose parent company is governed by the law of another Member State

E. Juhasz P
C-528/12, [2014] EUECJ C-528/12
Bailii
Directive 78/660/EEC
European

Company

Updated: 11 November 2021; Ref: scu.521190

Scheunemann v Finanzamt Bremerhaven: ECJ 19 Jul 2012

ECJ Freedom of establishment – Free movement of capital – Direct taxation – Inheritance tax – Conditions for the calculation of the tax – Acquisition through inheritance of a shareholding, as sole shareholder, in a capital company established in a third country – National legislation excluding shareholdings in such companies from tax advantages

Cunha Rodrigues P
[2012] EUECJ C-31/11 – O
Bailii
European
Citing:
Opinion – Scheunemann v Finanzamt Bremerhaven ECJ 20-Mar-2012
ECJ Fundamental freedoms – Delimitation – Freedom of establishment – Article 49 TFEU – Free movement of capital – Article 63 TFEU – Inheritance tax – Acquisition by inheritance of a shareholding, forming part of . .

Lists of cited by and citing cases may be incomplete.

European, Inheritance Tax, Company

Updated: 11 November 2021; Ref: scu.466287

Maclaine Watson and Co Ltd v International Tin Council: HL 2 Jan 1989

The International Tin Council was a body constituted by an international treaty not incorporated into law in the United Kingdom. The ITC was also created a legal person in the United Kingdom by article 5 1972 Order.
Held: As a legal person in the United Kingdom – rather than the states who were its members and the parties to the international treaty – the ITC was the contracting party in the contracts it had entered into with the appellant companies. There was no basis for holding the member states liable for its debts, and, even if in international law any such basis had existed, there would have been no basis for enforcing such a liability in a United Kingdom court. If under international law the (unincorporated) treaty made the ITC the agent of its members when contracting, this too was a liability which a United Kingdom court could not enforce, if it could not be found in the 1972 Order. A claim for the appointment of a receiver over ITC’s assets, including any claims it might have under the treaty to be indemnified by its members in respect of its liabilities to the appellants, failed for similar reasons. An unincorporated treaty can create no rights or obligations in domestic law.
Lord Templeman stressed the inability of United Kingdom courts to enforce unincorporated ‘treaty rights and obligations conferred or imposed by agreement or by international law’ though it suggests such courts might look at an unincorporated treaty ‘for the purpose of resolving any ambiguity in the meaning and effect of the Order of 1972’.
Lord Oliver: ‘It is axiomatic that municipal courts have not and cannot have the competence to adjudicate upon or to enforce the rights arising out of transactions entered into by independent sovereign states between themselves on the plane of international law. . . . That is the first of the underlying principles. The second is that, ‘as a matter of the constitutional law of the United Kingdom, the Royal Prerogative, whilst it embraces the making of treaties, does not extend to altering the law or conferring rights upon individuals or depriving individuals of rights which they enjoy in domestic law without the intervention of Parliament. Treaties, as it is sometimes expressed, are not self-executing. Quite simply, a treaty is not part of English law unless and until it has been incorporated into the law by legislation. So far as individuals are concerned, it is res inter alios acta from which they cannot derive rights and by which they cannot be deprived of rights or subjected to obligations; and it is outside the purview of the court not only because it is made in the conduct of foreign relations, which are a prerogative of the Crown, but also because, as a source of rights and obligations, it is irrelevant.’
However he recognised exceptions: ‘These propositions do not, however, involve as a corollary that the court must never look at or construe a treaty. ‘ and ‘it is well established that where a statute is enacted in order to give effect to the United Kingdom’s obligations under a treaty, the terms of the treaty may have to be considered and, if necessary, construed in order to resolve any ambiguity or obscurity as to the meaning or scope of the statue. Clearly, also, where parties have entered into a domestic contract in which they have chosen to incorporate the terms of the treaty, the court may be called upon to interpret the treaty for the purposes of ascertaining the rights and obligations of the parties under their contract’ and ‘Further cases in which the court may not only be empowered but required to adjudicate upon the meaning or scope of the terms of an international treaty arise where domestic legislation, although not incorporating the treaty, nevertheless requires, either expressly or by necessary implication, resort to be had to its terms for the purpose of construing the legislation . . . or the very rare case in which the exercise of the Royal Prerogative directly effects an extension or contraction of the jurisdiction without the constitutional need for internal legislation . . . ‘ and ‘It must be borne in mind, furthermore, that the conclusion of an international treaty and its terms are as much matters of fact as any other fact. That a treaty may be referred to where it is necessary to do so as part of the factual background against which a particular issue arises may seem a statement of the obvious. But it is, I think, necessary to stress that the purpose for which such reference can legitimately be made is purely an evidential one. Which states have become parties to a treaty and when and what the terms of the treaty are are questions of fact. The legal results which flow from it in international law, whether between the parties inter se or between the parties or any of them and outsiders, are not and they are not justiciable by municipal courts.’

Templeman and Oliver LL
[1989] 3 All ER 523
International Tin Council (Immunities and Privileges) Order 1972, International Organisations Act 1968
England and Wales
Citing:
Appeal from (affirmed) – Maclaine Watson and Co Ltd v International Tin Council CA 1988
The court asked the extent to which international law forms part of the law of this country. Nourse LJ said: ‘For up to two and a half centuries it has been generally accepted amongst English judges and jurists that international law forms part of . .
Appeal from (affirmed) – Maclaine Watson and Co Ltd v International Tin Council (No. 2) CA 1988
When the ITC did not satisfy an arbitral award made against it, the judgment creditor sought to discover where its assets could be found. Application to the Court was made under RSC 0.48 of the Supreme Court Act 1981 and under the Court’s inherent . .
Cited – Secretary of State in Council of India v Kamachee Boye Sahab PC 9-Jul-1859
‘The transactions of independent states between each other are governed by other laws than those which municipal courts administer: such courts have neither the means of deciding what is right, nor the power of enforcing any decision which they may . .
Cited – Rustomjee v The Queen QBD 1876
The Sovereign acts ‘throughout the making of the treaty and in relation to each and every of its stipulations in her sovereign character, and by her own inherent authority; and, as in making the treaty, so in performing the treaty, she is beyond the . .
Cited – Zoernsch v Waldock CA 1964
A claim was lodged against a former president as well as the current secretary of the European Commission of Human Rights. The former president, Sir Humphrey Waldock, was under the 1960 Order entitled to ‘the like immunity from legal process as is . .
Cited – Post Office v Estuary Radio Ltd CA 1968
On the proper inerpretation of the legislation, the extent of application of the legislative regime is determined by reference to the concept of the UK’s territorial waters as defined from time to time by the Crown. When the exercise of the Royal . .
Cited – Blackburn v Attorney-General CA 10-May-1971
The complainant sought to argue that entry to Europe would be unlawful in that it involved surrender of the sovereignty of the Queen in Parliament. The respondent accepted that the Bill would involve some surrender of power, but that it was a lawful . .

Cited by:
Cited – JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry HL 1989
An undisclosed principal will not be permitted to claim to be party to a contract if this is contrary to the terms of the contract itself. Thus the provision in the standard form B contract of the London Metal Exchange ‘this contract is made between . .
Cited – In re McKerr (Northern Ireland) HL 11-Mar-2004
The deceased had been shot by soldiers of the British Army whilst in a car in Northern Ireland. The car was alleged to have ‘run’ a checkpoint. The claimants said the investigation, now 20 years ago, had been inadequate. The claim was brought under . .
Affirmed – Regina v Secretary of State for the Home Department ex parte Brind HL 7-Feb-1991
The Home Secretary had issued directives to the BBC and IBA prohibiting the broadcasting of speech by representatives of proscribed terrorist organisations. The applicant journalists challenged the legality of the directives on the ground that they . .
Affirmed – Regina v Lyons, Parnes, Ronson, Saunders HL 15-Nov-2002
The defendants had been convicted on evidence obtained from them by inspectors with statutory powers to require answers on pain of conviction. Subsequently the law changed to find such activity an infringement of a defendant’s human rights.
Cited – Occidental Exploration and Production Company vRepublic of Ecuador CA 9-Sep-2005
The parties had arbitrated their dispute in London under a bilateral investment treaty between the US and Ecuador. The republic sought to appeal the arbitration. The applicant now appealed an order that the English High Court had jurisdiction to . .
Cited – Belhaj and Another v Straw and Others SC 17-Jan-2017
The claimant alleged complicity by the defendant, (now former) Foreign Secretary, in his mistreatment by the US while held in Libya. He also alleged involvement in his unlawful abduction and removal to Libya, from which had had fled for political . .

Lists of cited by and citing cases may be incomplete.

International, Company

Leading Case

Updated: 11 November 2021; Ref: scu.194460

In re Sir Thomas Spencer Wells; Swinburne-Hanham v Howard: CA 1933

In the case of a dissolved corporation, its assets vest in the Crown bona vacantia. The equity of redemption is an interest or equitable right inherent in the land. Equity recognises the pre-eminence of the right to redeem, with the consequence that the mortgaged property was owned by the mortgagor, subject to the mortgage.
Lawrence LJ referred to part of the judgment of Wright J in Re Higginson and Dean dealing with the position of a debt owing to a dissolved company and expressed doubt whether the Crown could sue for such a debt unless there was a trust, and said: ‘In my judgment this doubt is not justified; long before choses in action became transferable at common law they were regarded in equity as assignable and could be dealt with inter vivos and on the death of the owner devolved upon his legal personal representative as part of his personal estate. The statement in Blackstone’s Commentaries, vol. I., p.484, that the debts of a corporation either to or from it are totally extinguished by its dissolution and similar statements made by Kyd and Grant must either be read as having reference merely to the rights and liabilities of the individual corporators or else are obsolete. Moreover I find it difficult to reconcile the doubt expressed by the learned judge with his decision that the Crown had the right to recover its distributive share of the assets of the bankrupt’s estate from the trustee. There is no difference in principle between a right to enforce payment of a share in a trust fund in the hands of a trustee and the right to enforce payment of a debt – both are choses in action and personal property which admittedly would pass to the Crown as bona vacantia in the case of persons dying intestate without next of kin.’

Lawrence LJ
[1933] Ch 29
England and Wales
Cited by:
Cited – HSBC Bank Plc v Dyche and Another ChD 18-Nov-2009
The parties disputed the claimed beneficial interest of the second defendant. The second defendant (C) said that it had been purchased for him by the first defendant (D) from C’s trustee in bankruptcy, and was thereafter held in trust for him on the . .

Lists of cited by and citing cases may be incomplete.

Land, Equity, Company

Leading Case

Updated: 11 November 2021; Ref: scu.219903

Gaiman v The National Association for Mental Health: ChD 1970

The court considered the articles of an association without share capital but limited by guarantee. One article provided that a member should cease to be a member of the association if he were requested by resolution of the council to resign. It was alleged that the council had acted under that article in breach of its fiduciary duty to act for the benefit of the association as a whole and that the expulsion of the plaintiffs was therefore invalid.
Held: Megarry J said: ‘If the council had acted in breach of its fiduciary duty towards members of the association, this could hardly mean that the council’s acts were invalid. A breach of trust is not a nullity, but a ground for complaint.’ He declined to intervene and doubted whether the principles of natural justice could apply to a company formed under the Companies Acts. Freedom of association embraces the freedom to exclude from association those whose membership it honestly believes to be damaging to the interests of the Society: ‘one of the more difficult problems of the doctrine of natural justice is to determine what cases fall within its ambit;’

Megarry J VC
[1970] 3 WLR 42, [1971] Ch 317, [1970] 2 All ER 362
England and Wales
Cited by:
Cited – Koeller and Another v Coleg Elidyr (Camphill Communities Wales) Ltd CA 12-Jul-2005
The applicants occupied a house as licensees. An order for possession was made against them. The company was a charitable company set up to provide accomodation in communities for handicapped adults. The workers in the communities were not formally . .
Cited – Shearson Lehman Hutton Inc and Another v Maclaine Watson and Co Ltd and Others 1989
The court considered the requirements of natural justice in the light of the decision in Gaiman: ‘Nor do I consider my conclusions to be inconsistent with the decision of Megarry J in [Gaiman] because Megarry J held that the principles of natural . .

Lists of cited by and citing cases may be incomplete.

Company, Natural Justice

Leading Case

Updated: 11 November 2021; Ref: scu.228471

Wallersteiner v Moir (No 2): CA 1975

The court was asked whether Moir would be entitled to legal aid to bring a derivative action on behalf of a company against its majority shareholder.
Held: A minority shareholder bringing a derivative action on behalf of a company could obtain the authority of the court to sue as if he were a trustee suing on behalf of a fund, with the same entitlement to be indemnified out of the assets against his costs and any costs he may be ordered to pay to the other party. The court said that the minority shareholder could make a Beddoe application in the same way as a trustee and so secure an assurance that he would not be personally liable for any costs. Since he was asserting the company’s cause of action on the company’s behalf, the Legal Aid provisions prevented the grant of legal aid.
Denning LJ said of someone bringing an action on behalf of the company that ‘the minority shareholder, being an agent acting on behalf of the company is entitled to be indemnified by the company against all costs and expenses reasonably incurred by him in the course of the agency. It is analogous to the indemnity to which a trustee is entitled from his cestui que trust who is sui juris.’
As to the position of a solicitor in litigation, he said: ‘It may be worthwhile to indicate briefly the nature of the public policy question. It can, I think, be summarised in two statements; first in litigation a professional lawyer’s role is to advise his client with a clear eye and an unbiased judgment; secondly, a solicitor retained to conduct litigation is not merely the agent and adviser to his client, but also an officer of the court, with a duty to the court to ensure that his client’s case which he must of course present and conduct with the utmost of care of his client’s interests, is also presented and conducted with scrupulous fairness and integrity. A barrister has similar obligations. A legal adviser who acquires a personal financial interest in the outcome of the litigation may obviously find himself in a situation in which that interest conflicts with those obligations.’
. . And ‘It is a fundamental principle of our law that a company is a legal person, with its own corporate identity, separate and distinct from the directors or shareholders, and with its own property rights and interests to which alone it is entitled. If it is defrauded by a wrongdoer, the company itself is the one person to sue for the damage. Such is the rule in Foss v. Harbottle (1843) 2 Hare 461. The rule is easy enough to apply when the company is defrauded by outsiders. The company itself is the only person who can sue. Likewise, when it is defrauded by insiders of a minor kind, once again the company is the only person who can sue. But suppose it is defrauded by insiders who control its affairs – by directors who hold a majority of the shares – who then can sue for damages? Those directors are themselves the wrongdoers. If a board meeting is held, they will not authorise the proceedings to be taken by the company against themselves. If a general meeting is called, they will vote down any suggestion that the company should sue them themselves. Yet the company is the one person who is damnified. It is the one person who should sue. In one way or another some means must be found for the company to sue. Otherwise the law would fail in its purpose. Injustice would be done without redress.’
Scarman LJ said: ‘The indemnity is a right distinct from the right of a successful litigant to his costs at the discretion of the trial judge; it is a right which springs from a combination of factors – the interest of the company and its shareholders, the relationship between the shareholder and the company, and the court’s sanction (a better word would be ‘permission’) for the action to be brought at the company’s expense. It is a full indemnity such as an agent has who incurs expense in the authorised business of his principal.’
Buckley LJ said: ‘[T]here are circumstances in which a party can embark on litigation with a confident expectation that he will be indemnified in some measure against costs. A trustee who properly and reasonably prosecutes or defends an action relating to his trust property or the execution of the trusts is entitled to be indemnified out of the trust property. An agent is entitled to be indemnified by his principal against costs incurred in consequence of carrying out the principal’s instructions . . The next friend of an infant plaintiff is prima facie entitled to be indemnified against costs out of the infant’s estate . . It seems to me that in a minority shareholder’s action, properly and reasonably brought and prosecuted, it would normally be right that the company should be ordered to pay the plaintiff’s costs so far as he does not recover them from any other party. In all the instances mentioned the right of the party seeking indemnity to be indemnified must depend on whether he has acted reasonably in bringing or defending the action, as the case may be: see, for example, as regards a trustee, In re Beddoe, Downes v Cottam [1893] 1 Ch 557. It is true that this right of a trustee, as well as that of an agent, has been treated as founded in contract. It would, I think, be difficult to imply a contract of indemnity between a company and one of its members. Nevertheless, where a shareholder has in good faith and on reasonable grounds sued as plaintiff in a minority shareholder’s action, the benefit of which, if successful, will accrue to the company and only indirectly to the plaintiff as a member of the company, and which it would have been reasonable for an independent board of directors to bring in the company’s name, it would, I think, clearly be a proper exercise of judicial discretion to order the company to pay the plaintiff’s costs. This would extend to the plaintiff’s costs down to judgment, if it would have been reasonable for an independent board exercising the standard of care which a prudent business man would exercise in his own affairs to continue the action to judgment. If, however, an independent board exercising that standard of care would have discontinued the action at an earlier stage, it is probable that the plaintiff should only be awarded his costs against the company down to that stage . . There is a well established practice in Chancery for a trustee who has it in mind to bring or defend an action in respect of his trust estate to apply to the court for directions: see In re Beddoe, Downes v Cottam [1893] 1 Ch. 557. If and so far as he is authorised to proceed in the action, the trustee’s right to be indemnified in respect of his costs out of the trust property is secure. If he proceeds without the authority of an order of the court, he does so at his own risk as to costs. It seems to me that a similar practice could well be adopted in a minority shareholder’s action.’
Buckley LJ also discussed the role of a legal adviser in litigation and the nature of a contingency fee, saying: ‘A contingency fee, that is, an arrangement under which the legal advisers of a litigant shall be remunerated only in the event of the litigant succeeding in recovering money or other property in the action, has hitherto always been regarded as illegal under English law on the ground that it involves maintenance of the action by the legal adviser. Moreover where, as is usual in such a case, the remuneration which the adviser is to receive is to be, or to be measured by, a proportion of the fund or of the value of the property recovered, the arrangement may fall within that particular class of maintenance called champerty . . It may, however, be worthwhile to indicate briefly the nature of the public policy question. It can, I think, be summarised in two statements. First, in litigation a professional lawyer’s role is to advise his client with a clear eye and an unbiased judgment. Secondly, a solicitor retained to conduct litigation is not merely the agent and adviser to his client, but also an officer of the court with a duty to the court to ensure that his client’s case, which he must, of course, present and conduct with the utmost care of his client’s interests, is also presented and conducted with scrupulous fairness and integrity. A barrister owes similar obligations. A legal adviser who acquires a personal financial interest in the outcome of the litigation may obviously find himself in a situation in which that interest conflicts with those obligations.’

Buckley LJ, Scarman LJ, Denning LJ
[1975] QB 373, [1975] 1 All ER 849, [1975] 2 WLR 389
England and Wales
Citing:
Cited – In re Beddoe, Downes v Cottam CA 1893
In case of doubt as to the desirability of the intended proceedings (whether as plaintiff or defendant), trustees may apply to the court for directions. This will protect the trustees from adverse costs orders. If given leave to sue or defend by the . .
Cited – Pittman v Prudential Deposit Bank Ltd CA 1896
The parties had agreed to assign the judgment debt to the solicitor acting.
Held: The agreement was champertous as an assignment of an interest in litigation, and therefore was void, having been made before judgment and even though it had been . .
Cited – Foss v Harbottle 25-Mar-1843
Company alone may sue for legal wrong against it.
A bill was lodged by two of the proprietors of shares in a company incorporated by Act of Parliament, on their own and the other shareholders’ behalf. They claimed against three bankrupt directors, a proprietor, solicitor and architect charging them . .
See Also – Wallersteiner v Moir CA 1974
The making of a declaration is a judicial act. A shareholder is entitled to bring a derivative action on behalf of the company when it is controlled by persons alleged to have injured the company who refuse to allow the company to sue. It is an . .

Cited by:
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 – 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 . .
Cited – Corner House Research, Regina (on the Application of) v Secretary of State for Trade and Industry CA 1-Mar-2005
The applicant sought to bring an action to challenge new rules on approval of export credit guarantees. The company was non-profit and founded to support investigation of bribery. It had applied for a protected costs order to support the . .
Considered – Picton Jones and Co v Arcadia Developments 1989
The plaintiff chartered surveyors agreed to act in the purchase of amusement arcades, on the basis that their fees would be payable ‘in the event of ultimate success.’ The work involved applications for gaming licences and planning permissions. The . .
Cited – Roberts v Gill and Co Solicitors and Others SC 19-May-2010
The claimant beneficiary in the estate sought damages against solicitors who had acted for the claimant’s brother, the administrator, saying they had allowed him to take control of the assets in the estate. The will provided that property was to be . .
Cited – Regina (Factortame Ltd and Others) v Secretary of State for Transport, Local Government and the Regions (No 8) CA 3-Jul-2002
A firm of accountants had agreed to provide their services as experts in a case on the basis that they would be paid by taking part of any damages awarded. The respondent claimed that such an agreement was champertous and unlawful.
Held: The . .
Cited – Media Cat Ltd v Adams and Others PCC 18-Apr-2011
The claimants had begun copyright infringement cases. Having been refused a request to be allowed to withdraw the cases as an abuse, their solicitors now faced an application for a wasted costs order.
Held: The court only has jurisdiction to . .
Cited – Sibthorpe and Morris v London Borough of Southwark CA 25-Jan-2011
The court was asked as to the extent to which the ancient rule against champerty prevents a solicitor agreeing to indemnify his claimant client against any liability for costs which she may incur against the defendant in the litigation in which the . .
Cited – Morris and Another v London Borough of Southwark QBD 5-Feb-2010
The residential tenant claimant sought damages from her council for failure to repair her flat. The counciil now objected to being asked to pay her costs, saying that the agreement with her solicitors was champertous, being a Conditional Fee . .
Cited – Iesini and Others v Westrip Holdings Ltd and Others ChD 16-Oct-2009
The claimants were shareholders in Westrip, accusing the Defendant directors of deliberately engaging in a course of conduct which has led to Westrip losing ownership and control of a very valuable mining licence and which, but for their . .
Cited – Smith v Croft ChD 1986
Walton J was concerned with two appeals from the Master. The first appeal was from an order made ex parte ordering the company to indemnify the claimant against costs. The appeal against that order was allowed, and Walton J decided that there was so . .

Lists of cited by and citing cases may be incomplete.

Litigation Practice, Legal Aid, Company

Leading Case

Updated: 11 November 2021; Ref: scu.194034

Denkavit International and others v Bundesamt fur Finanzen: ECJ 17 Oct 1996

LMA The case concerned an incorrect implementation by Germany of a Directive on the taxation of parent companies and subsidiaries in different States, which allegedly caused loss to the plaintiff’s company.
Held: (does decision turn on discretion on implementation) Germany’s breach did not amount to a sufficiently serious breach. Almost all of the other MS had adopted the same interpretation.
ECJ 1. By authorizing Member States to grant exemption from withholding tax upon distribution of profits by a subsidiary to its parent company holding at least 25% of the subsidiary’ s capital, provided for by Article 5(1) of Directive 90/435 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States, only in so far as the parent company maintains that minimum holding for a period which Member States are free to lay down but which cannot exceed two years, Article 3(2) of Directive 90/435 introduces an option to derogate from the obligation to grant the exemption which, as such, must be strictly interpreted. It cannot therefore be interpreted as authorizing a Member State to make that exemption subject to the condition that, at the moment when the profits are distributed, the parent company should have had the required holding in the capital of its subsidiary for a period at least equal to that which the Member State has laid down pursuant to the option which it is recognized as having.
It is for Member States to draw up rules for ensuring compliance with this minimum period, in accordance with the procedures laid down in their domestic law. On no view are those States obliged under the directive to grant the advantage immediately on the basis of a unilateral undertaking by the parent company to observe the minimum holding period.
That being so, Community law does not require a Member State which, when transposing that directive into its national law, stipulated that the minimum holding period set pursuant to Article 3(2) must be completed at the time when the profits that are the subject of the tax advantage afforded by Article 5 are distributed, to compensate the parent company for damage which it may have incurred by reason of the error thus made.
The conditions required for a breach of Community law by a Member State, on the occasion of the legislative activity involving a margin of discretion consisting in the transposition of a directive, to give rise to an obligation on that Member State to compensate individuals for damage which they have incurred are not satisfied in this case. There is, in any event, no sufficiently serious breach of Community law if it appears, inter alia, that the Member State’ s interpretation of the directive corresponds to that of almost all the other Member States which have exercised the option to derogate.
2. Article 5(1) of Directive 90/435 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States clearly and unambiguously provides that a parent company holding a minimum of 25% of the capital of its subsidiary is to be exempt from withholding tax.
While it is true that Article 3(2) of the directive gives Member States the option of derogating from that principle where the parent company does not maintain its holding in the subsidiary for a minimum period and gives those States latitude as regards both the duration of that period, which may not exceed two years, and the administrative procedures applicable, this does not make it impossible to determine minimum rights on the basis of the provisions of principle contained in Article 5 of the directive. It follows that, where a Member State has exercised the option provided for in Article 3(2) of the directive, parent companies may, provided that they comply with the obligation to maintain their holding for the period set by that Member State, rely directly on the rights conferred by Article 5(1) and (3) of that directive before national courts.
3. Individuals injured by a breach of Community law attributable to a Member State are recognized as having a right to reparation when three conditions are met: the rule infringed must be intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the State and the damage suffered by the injured parties. Those conditions apply where a Member State incorrectly transposes a Community directive into national law. In this regard, a breach is sufficiently serious if a Community institution or a Member State, in the exercise of its rule-making powers, manifestly and gravely disregards the limits on those powers. One of the factors that may be taken into consideration is the clarity and precision of the rule breached.

JC Moitinho de Almeida, P
[1996] ECR I -5063, C-283/94, [1996] EUECJ C-283/94
Bailii
European

European, Company

Leading Case

Updated: 11 November 2021; Ref: scu.161447

Banner Homes Group Plc v Luff Developments and Another: CA 10 Feb 2000

Competing building companies agreed not to bid against each other for the purchase of land. One proceeded and the other asserted that the land was then held on trust for the two parties as a joint venture.
Held: Although there was no formal agreement, the first company had allowed its position to be worsened relying upon the expectation which the second party had allowed to arise, and had not informed the claimant before the purchase of its intention not to honour the agreement. At the date of exchange: ‘It is clear, therefore, that, to Banner’s knowledge, exchange of contracts was to occur, and did occur, before the parties were signed up to any formal written agreement. It is equally clear that Luff had given Banner to understand that it was content to exchange contracts without requiring any form of separate guarantee committing Banner to contribute one half of the costs of the net site and that the reason for this was that the mutual rights and obligations of the parties would be set out in the shareholder agreement. It is also clear that both sides intended to enter into the shareholder agreement as soon as possible, the only reason for the delay being Mr. Vass’s absence on holiday. At no stage was any indication given that reasons existed why the agreement should not be entered into. Specifically nothing was said on either side to indicate that any difference of principle existed which would prevent the parties from agreeing terms.’

Chadwick LJ
Gazette 10-Feb-2000, Times 17-Feb-2000, [2000] EWCA Civ 18, [2002] 2 All ER 117, [2000] EWCA Civ 3016, [2000] 2 WLR 772, [2000] Ch 372
Bailii, Bailii
England and Wales
Citing:
Cited – Island Holdings Ltd v Birchington Engineering Co Ltd 7-Jul-1981
Two prospectively separate purchasers in a later ‘subject to contract’ arrangement between them had replaced their earlier concluded agreement as to how a property, if acquired, would be dealt with.
Held: Effect was to be given to the . .
Examined – Pallant v Morgan ChD 1952
The agents of two neighbouring landowners orally agreed in the auction room that the plaintiff’s agent would refrain from bidding at auction and that the defendant, if his agent’s bid was successful, would divide the land according to an agreed . .
Cited – Grant v Edwards and Edwards CA 24-Mar-1986
A couple were not married but lived together in Vincent Farmhouse in which the plaintiff claimed a beneficial interest on separation. The female partner was told by the male partner that the only reason for not acquiring the property in joint names . .
Cited – Yaxley v Gotts and Another CA 24-Jun-1999
Oral Agreement Creating Proprietory Estoppel
The defendant offered to give to the Plaintiff, a builder, the ground floor of a property in return for converting the house, and then managing it. They were friends, and the oral offer was accepted. The property was then actually bought in the name . .
Cited – Paragon Finance Plc (Formerly Known As National Home Loans Corporation Plc v D B Thakerar and Co (a Firm); Ranga and Co (a Firm) and Sterling Financial Services Limited CA 21-Jul-1998
Where an action had been begun on basis of allegations of negligence and breach of trust, new allegations of fraud where quite separate new causes of claim, and went beyond amendments and were disallowed outside the relevant limitation period. . .
Cited – Time Products Ltd v Combined English Stores 2-Dec-1974
The plaintiff and the defendant were each interested in buying a property and had agreed that one of them would make an offer, the other refraining from doing so, and that if the offer were to be accepted the purchaser would deal with the property . .

Cited by:
Cited – Gonthier and Another v Orange Contract Scaffolding Ltd CA 25-Jun-2003
The question of a proprietary estoppel as between landlord and tenant arose. An agreement had been reached subject to contract for the grant of a lease, with an option to purchase. The tenant was allowed into possession before the documentation was . .
Cited – Thames Cruises Limited v George Wheeler Launches Limited, Kingwood Launches Limited ChD 16-Dec-2003
The parties had previously worked to gether to provide ferry services on the Thames. A new tender to operate the services was not submitted. It was alleged that the Defendants had inequitably seized for themselves a business opportunity which the . .
Limited – London and Regional Investments Ltd v TBI Plc and Others CA 22-Mar-2002
TBI was a property investor and developer with several subsidiaries. It agreed to sell some to London and Regional. The agreement provided for the vendor and the purchaser to use reasonable endeavours to agree the terms of a joint venture agreement . .
Followed – 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 . .
Cited – Cobbe v Yeomans Row Management Ltd and Others ChD 25-Feb-2005
Principles for Proprietary Estoppel
A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement . .
Cited – Van Laethem v Brooker and Another ChD 12-Jul-2005
The claimant asserted an interest in several properties by virtue of a common intention constructive trust or by proprietary estoppel. The parties had been engaged to be married.
Held: ‘A [constructive] trust arises in connection with the . .
Cited – Sainsbury’s Supermarkets Ltd v Olympia Homes Limited, Hughes etc ChD 17-Jun-2005
The claimant sought rectification of the land register. In a development deal, an option agreement had not been registered, and the land sold on. The land was required to allow the building of a roundabout necessary for the intended store. An . .
Cited – Yeoman’s Row Management Ltd and Another v Cobbe HL 30-Jul-2008
The parties agreed in principle for the sale of land with potential development value. Considerable sums were spent, and permission achieved, but the owner then sought to renegotiate the deal.
Held: The appeal succeeded in part. The finding . .
Cited – Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd and Another CA 16-Nov-2005
The defendant had brought in the claimant in order to assist in satisfying its own obligations under a lease. The joint venture was not recorded in a formal agreement. The appellant asserted that a constructive trust had been created. The judge had . .
Cited – Clarke and Another v Corless and Another ChD 8-Jul-2009
The parties disputed whether one could retain for his own benefit land on an estate reserved for an estate road. A trust was claimed under Pallant saying that the parties had made an informal agreement before the property was purchased.
Held: . .
Cited – National Trust for Places of Historic Interest v Birden ChD 31-Jul-2009
The parties had entered into an old-form share farm agreement in 1994. The tenant later became a farm business tenant on other land. The claimant sought a share of the Single Payment Scheme calculated with reference to the period in which the . .
Cited – Clarke and Another v Corless and Another CA 31-Mar-2010
The claimants appealed against refusal of a declaration that a neighbouring access road and land was held on a constructive trust. They said that an agreement bewteeen the parties should have been effective to impose a trust on the defendants. The . .

Lists of cited by and citing cases may be incomplete.

Trusts, Equity, Company

Leading Case

Updated: 11 November 2021; Ref: scu.78169

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 (including in the case of the charterer its ‘Affiliates’) in relation to certain liabilities. The standard agreement defined an Affiliate to include subsidiary companies, which in turn implied a requirement of membership. Under Scots Law a chargee of shares would be registered as owner. The chargor would then cease to be a member and subsidiary, and a beneficiary of the indemnity. In English law, he would have an interest in equity only.
Held: The appeal was dismissed. There was no error sufficiently clearly established to allow a court to remedy the defect found: ‘The decisions therefore indicate with remorseless clarity that anyone who is entered on the register of a company as a member in any capacity is quite simply a member, with all the relevant rights and liabilities. That being so, on July 7 2002 Nominees was in all respects the relevant member of Enviroco holding the shares transferred to it. There is therefore no room for the view that, somehow, under Scots law Asco rather than Nominees should be regarded as the member of Enviroco because Asco had transferred its shares to Nominees in security only.’

Lord Hope, Deputy President, Lord Rodger, Lord Mance, Lord Collins, Lord Clarke
[2011] UKSC 16, UKSC 2010/0008
Bailii Summary, Bailii, SC Summary, SC
Seventh Council Directive on consolidated accounts (83/349/EEC of June 13, 1983, Companies Act 1985 736
England and Wales
Citing:
Appeal from – Enviroco Ltd v Farstad Supply A/S CA 18-Dec-2009
A company which would otherwise undoubtedly be the subsidiary of another company ceased to be so when the shares in the former company were charged by the latter company to a Scottish bank. . .
See Also – Gawler v Raettig (Leave) CA 3-Dec-2007
Application for leave to appeal. . .
Cited – Adamastos Shipping v Anglo Saxon Petroleum HL 1959
Where the terms of a statute are incorporated into a contract by reference, the contract has to be read as if the words of the statute are written out in the contract and construed, as a matter of contract, in that contractual context. The Hague . .
Cited – Chartbrook Ltd v Persimmon Homes Ltd and Others HL 1-Jul-2009
Mutual Knowledge admissible to construe contract
The parties had entered into a development contract in respect of a site in Wandsworth, under which balancing compensation was to be paid. They disagreed as to its calculation. Persimmon sought rectification to reflect the negotiations.
Held: . .
Mentioned – 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 . .
Cited – 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 . .
Cited – Pepper (Inspector of Taxes) v Hart HL 26-Nov-1992
Reference to Parliamentary Papers behind Statute
The inspector sought to tax the benefits in kind received by teachers at a private school in having their children educated at the school for free. Having agreed this was a taxable emolument, it was argued as to whether the taxable benefit was the . .
Cited – Ward v Commissioner of Police for the Metropolis and others HL 5-May-2005
The claimant had been taken under warrant to a mental hospital, but was found not to be suffering any mental illness. She complained that the arrest was unlawful, since the police officer had not been accompanied by the people named on the warrant. . .
Cited – Antaios Compania Naviera SA v Salen Rederierna AB (‘the Antaios’) HL 1984
A ship charterer discovered that the bills of lading were incorrect, but delayed withdrawal from the charter for 13 days. They now sought leave to appeal the arbitration award against them.
Held: Though he deprecated extending the use of the . .
Cited – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Cited – Inco Europe Ltd and Others v First Choice Distributors (A Firm) and Others HL 10-Mar-2000
Although the plain words of the Act would not allow an appeal to the Court of Appeal under the circumstances presently applying, it was clear that the parliamentary draftsman had failed to achieve what he had wanted to, that the omission was in . .

Lists of cited by and citing cases may be incomplete.

Transport, Company, Scotland, European

Updated: 11 November 2021; Ref: scu.431825

Williams v Glover and Another: ChD 4 Jun 2013

The company’s liquidator had refused to assign to its former directors a claim for a reduction in corporation tax which they were funding.
Held: Such a claim did not constitute property within section 436, and was not a chose capable of assignment. All that could be assigned would be the right to appeal. Since the former directors were no longer officers of the company they could not act in its name to pursue the appeal.

Pelling QC HHJ
[2013] EWHC 1447 (Ch), [2014] 1 WLR 166, [2013] BPIR 576, [2014] 1 BCLC 474, [2013] WLR(D) 223, [2014] 2 All ER 448
Bailii, WLRD
Insolvency Act 1986 436
England and Wales
Citing:
Cited – Torkington v Magee 11-Jul-1902
Chose in Action defined
The effect of the 1873 Act was essentially procedural and it did not render choses in action that had not previously been assignable in equity capable of assignment.
Channell J defined a debt or other legal chose in action: ”Chose in Action’ . .
Cited – Heath v Tang, Stevens v Peacock CA 11-Aug-1993
The bankrupt applicants each applied to the Court of Appeal for leave to appeal against the judgment for a liquidated sum on which the bankruptcy petition had been based. In the first case, the trustee in bankruptcy indicated his unwillingness to . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Leading Case

Updated: 11 November 2021; Ref: scu.510171

Williamson and Soden Solicitors v Briars: EAT 20 May 2011

EAT JURISDICTIONAL POINTS – Worker, employee or neither
A Tribunal determined that a solicitor who had been an employee, but who then accepted remuneration calculated as a ‘profit share’, remained an employee and did not become a partner. It did so without express reference to the Partnership Act 1890, and was contended to be wrong in law to fail to do so, and to have failed to ask at the outset whether the test of conducting business in common with a view of profit under that Act had been satisfied. The appeal was dismissed, since neither was required; the question was whether the solicitor was an employee, which was a question of fact to be determined (and was) by applying the appropriate legal tests, and the answer to which was in any event plainly and obviously right.

Langstaff J
[2011] UKEAT 0611 – 10 – 2005
Bailii
Partnership Act 1890, Employment Rights Act 1996 230(2)
England and Wales
Cited by:
Cited – Clyde and Co Llp v Van Winkelhof EAT 26-Apr-2012
EAT JURISDICTIONAL POINTS
Worker, employee or neither
Working outside the jurisdiction
Whether LLP equity member was a limb (b) worker under section 230(3). Allowing Claimant’s appeal, she was. . .

Lists of cited by and citing cases may be incomplete.

Employment, Company

Updated: 11 November 2021; Ref: scu.441461

Butters and Others v BBC Worldwide Ltd and Others: ChD 20 Aug 2009

In the insolvency of Woolworths plc, a subsidiary sought to have valued its shareholding in a company in which the defendants were co-shareholders. It was argued that an earlier agreement between them had not be fully superceded by a subsequent one.
Held: The new licence arrangement impliedly involved a surrender of the old. The contractual provisions in the joint venture agreement taken together with termination provisions in a licence of IP rights were void. Their effect was to deprive creditors on a subsequent insolvency of access to the assets and was therefore against public policy in the light of the insolvency laws.

Peter Smith J
[2009] EWHC 1954 (Ch), [2009] BPIR 1315
Bailii
England and Wales
Citing:
Cited – Graves v Graves and others CA 3-Jul-2007
The parties had divorced and settled financial provision, but the former wife and her children came to need a house and one of the claimant’s properties became vacant, and she was allowed to occupy it as a tenant, with the majority of the rent being . .
Cited – Bell v Lever Brothers Ltd HL 15-Dec-1931
Bell was director and chairman of Niger, a subsidiary of Lever Brothers Ltd who dismissed him, offering and paying andpound;30,000 compensation. Lever then discovered that Mr Bell had made secret profits at the expense of Niger for which he could . .
Cited – Perpetual Trustee Co Ltd v BNY Corporate Trustee Services Ltd and Another ChD 28-Jul-2009
The parties had entered into complicated financial arrangements effectively providing credit insurance. On the insolvency of Lehman brothers, a claim was made.
Held: The contractual provisions were effective as a matter of English law and, in . .
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: . .
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 – United Dominions Corporation (Jamaica) Ltd v Shoucair PC 1969
(Jamaica) A moneylending law required, for the enforceability of a loan bearing interest at more than ten per cent, a written memorandum containing all the terms of the loan with the borrower’s signature. A bank lent money at nine per cent secured . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 11 November 2021; Ref: scu.374034

Hopper and Another v Hopper: CA 12 Dec 2008

Appeals were made after an order declaring an account a between former partners in a wholesale fruit and vegetable business. The dispute related to the applicability of limitation to undrawn profit shares, and the doctrine of Laches.
Held: The judge had been entitled to find on the evidence that undrawn profits had been capitalised. There was no inequity in allowing the widow to draw the undrawn capitalised earnings of the business. Limitation did not apply and nor did the doctrine of laches. ‘When a partnership at will is dissolved by the death of a partner, the surviving partner or partners, and the personal representatives of the deceased partner, may all agree, solely for the purpose of the winding up, to continue the business of the former partnership in order best to maximise the value of its business and goodwill on sale or other realisation. If they do all so agree, their rights and obligations, including their shares of any profit from the continued trading, and the authority of each former partner to bind the others continue as before: 1890 Act s.38. The surviving partners and the personal representatives of the deceased partner put themselves at risk if they take that course. The surviving partners, and possibly the personal representatives, will be personally liable for any losses incurred in the continued trading, and any such losses will diminish their and the deceased’s respective partnership shares. ‘ The widow of the deceased partner was an outgoing partner for the purposes of section 42(1) of the 1890 Act, and the judge’s order was adjusted accordingly.

Thomas LJ, Moore-Bick LJ, Etherton LJ
[2008] EWCA Civ 1417
Bailii
Limitation Act 1980, Partnership Act 1890 38 42(1)
England and Wales
Citing:
Cited – Bouche v Sproule 1887
Lord Bramwell discussed the capitalisation of undistributed profis within a partnership: ‘Where there is a partnership, whether an ordinary partnership or an incorporated partnership . . There the undivided profits of any period, a year or shorter . .

Lists of cited by and citing cases may be incomplete.

Company, Limitation, Equity

Updated: 11 November 2021; Ref: scu.278673

The Secretary of State for Business, Innovation and Skills v Weston and Another: ChD 5 Sep 2014

The Secretary of State sought company director disqualification orders against the defendants saying they had been convicted of making false instruments. The Insolvency service had decided against such proceedings, and the Crown Court judge, when sentencing them had considered and rejected orders. The defendants now argued that the instant proceedings were an abuse of process.
Held: The court separated the issues of formal jurisdiction and abuse. As to the first, the jurisdiction of the civil court expressly given by s2 must necessarily arise after a conviction and so after the opportunity has arisen for a criminal court to make an order under the same section. No words of qualification are given in the section, so the existence of the jurisdiction conferred on the civil court cannot depend on whether the criminal court has or has not exercised its own power or, if it has not done so, how that came about.
As to the issue of abuse of process: ‘this claim is no more than an attempt by the Secretary of State to obtain a different decision from this court than was given on identical issues by the criminal court, which had the issues placed before it and made a positive decision to refuse an order. It is in my view unfair that the defendants should be thus exposed to the same claim on two occasions. The unfairness is not relieved by the argument that the claim is being pursued by a different entity; firstly I am not persuaded that in fact there is a complete separation between the two applicants, because it appears that the Insolvency Service was in liaison with the prosecutor when he made his application for HHJ Rundell to consider disqualification, so that even if as Mr. Morgan submits, there are criticisms that can be made of that application, it would appear the Secretary of State was content at the time to allow the matter to be pursued in the criminal court rather than at that stage bringing it to the civil court and to some extent at least participated in the application made. Secondly there is the general point that where the basis of the claim and the relief sought is essentially identical it is just as much unfair to the defendant to have to face it twice at the hands of two applicants as it would be if there were only one’.

Cooke David HHJ
[2014] EWHC 2933 (Ch)
Bailii
Company Directors Disqualification Act 1986 2
England and Wales
Citing:
Cited – Re Barings and Others (No 3) ChD 1999
The disqualified director sought leave under section 17 to act as a director in circumstances which did not involve him assuming any executive responsibilities, other than of a trivial nature, and left him free to contract as a consultant.
Cited – In Re Cedarwood Productions Ltd; In Re Inter City Print and Finishing Ltd; Secretary of State for Trade and Industry v Rayna and Another ChD 3-Apr-2001
S6 of the 1986 Act proceedings had been stayed pending criminal proceedings in which the defendant was eventually convicted of conspiracy to defraud, sentenced to imprisonment and given a two year disqualification order under s2 by the trial judge, . .
Cited – In Re Cedarwood Productions Ltd; In Re Inter City Print and Finishing Ltd; Secretary of State for Trade and Industry v Rayna and Another CA 26-Jun-2001
Company directors had had civil proceedings for disqualification suspended pending the outcome of criminal proceedings arising from the circumstances of the failure of their companies. They had variously suffered penalties including criminal . .
Cited – Re Denis Hilton Ltd ChD 2002
A director was prosecuted for the criminal offence of fraudulent trading, and in light of that the Disqualification Unit at the Insolvency Service decided not to pursue its own disqualification application under s6 but to ask the prosecution to seek . .
Criticised – Secretary of State v Nimley ChD 5-Feb-2002
Directors had been tried and convicted of offences which could have founded a s2 disqualification order. After they had been sentenced and left the dock, prosecuting counsel said to the judge: ‘Your Honour has made no reference to disqualification . .
Cited – Iberian UK Ltd v BPB Industries plc ChD 1996
Proceedings in front of an administrative body (the Commission) which were subsequently appealed to a court (CFI and ECJ) did not give rise to an issue of estoppel between the investigatee/appellant and the complainant / intervener. The fact that . .
Cited – Ashmore v British Coal Corporation CA 1990
The plaintiff was one of many female employees who complained to the industrial tribunal that she was paid less by the defendant than her male counterparts. Sample cases were selected for trial and the others stayed pending a decision. It was an . .
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 by:
Distinguished – Spicer v The Commissioner of Police of The Metropolis QBD 6-Jul-2020
The claimant alleged defamation. He had been acquitted of a criminal offence and said that material published by the defendant continued to imply or assert his guilt of the offence. The defendant argued truth. The claimant now sought a strike out of . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 11 November 2021; Ref: scu.536424

Hammonds LLP v Jones: CA 21 Dec 2009

Partners had left the solicitors firm during the year. They had taken drawings calculated on the basis of anticipated profits, which not being met, the partnership sought to recover. The outgoing partners objected to being bound by accounts drawn after they had left.
Held: The defendant’s appeal failed. On a true construction of the deed, he was bound by the accounts, even though it required two different interpretations of the word ‘partner’ in the same clause, and even though he might be excluded from the meeting voting on the accounts. The clause was intended to provide a procedure for settling accounts so that they would in fact be binding on all partners.

Lord Justice Sedley, Lord Justice Lloyd and Lord Justice Sullivan
[2009] EWCA Civ 1400
Times, Bailii
England and Wales
Citing:
Appeal from – Hammonds (A Firm) v Danilunas and others ChD 13-Feb-2009
The claimant firm of solicitors sought repayment of sums which it said were excess drawing from the defendants, former partners. Drawings had been taken against anticipated profits, and the retiring partners left as profits declined. The defendants . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 11 November 2021; Ref: scu.392502

Saunders v The United Kingdom: ECHR 17 Dec 1996

(Grand Chamber) The subsequent use against a defendant in a prosecution, of evidence which had been obtained under compulsion in company insolvency procedures was a convention breach of Art 6. Although not specifically mentioned in Article 6 of the Convention the right to silence and the right not to incriminate oneself are generally recognised international standards which lie at the heart of the notion of a fair procedure under Article 6. The right not to incriminate oneself is primarily concerned, however, with respecting the will of an accused person to remain silent. As commonly understood in the legal systems of the contracting parties to the Convention and elsewhere, it does not extend to the use in criminal proceedings of material which may be obtained from the accused through the use of compulsory powers but which has an existence independent of the will of the suspect such as, inter alia, documents acquired pursuant to a warrant, breath, blood and urine samples and bodily tissue for the purpose of DNA testing.
Hudoc ‘The Court recalls that, although not specifically mentioned in Article 6 of the Convention, the right to silence and the right not to incriminate oneself, are generally recognised international standards which lie at the heart of the notion of a fair procedure under Article 6. Their rationale lies, inter alia, in the protection of the accused against improper compulsion by the authorities thereby contributing to the avoidance of miscarriages of justice and to the fulfilment of the aims of Article 6. The right not to incriminate oneself, in particular . . that the prosecution in a criminal case seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused. In this sense the right is closely linked to the presumption of innocence contained in Article 6(2) of the Convention.
The right not to incriminate oneself is primarily concerned, however, with respecting the will of an accused person to remain silent. As commonly understood in the legal systems of the contracting parties to the Convention and elsewhere, it does not extend to the use in criminal proceedings of material which may be obtained from the accused through the use of compulsory powers, but which has an existence independent of the will of the suspect, such as, inter alia, documents acquired pursuant to a warrant, breath, blood and urine samples and bodily tissue for the purpose of DNA testing.’
‘The court does not accept the Government’s premise on this point since some of the Applicant’s answers were in fact of an incriminating nature in the sense that they contained admissions to knowledge of information which tended to incriminate him . . In any event, bearing in mind the concept of fairness in Article 6, the right not to incriminate oneself cannot reasonably be confined to statements of admission of wrongdoing or to remarks which are directly incriminating. Testimony obtained under compulsion which appears on its face to be of a non-incriminating nature – such as exculpatory remarks or mere information on questions of fact – may later be deployed in criminal proceedings in support of the prosecution case, for example to contradict or cast doubt upon other statements of the accused or evidence given by him during the trial or to otherwise undermine his credibility. Where the credibility of an accused must be assessed by a jury, the use of such testimony may be especially harmful. It follows that what is of the essence in this context is the use to which evidence obtained under compulsion is put in the course of the criminal trial.’

MM. R. Bernhardt, President
Times 18-Dec-1996, 19187/91, [1997] 23 EHRR 313, 1996-VI, [1998] 1 BCLC 362, [1996] ECHR 65, 2 BHRC 358, [1997] BCC 872
Worldlii, Bailii
European Convention on Human Rights 6.1, Companies Act 1985 434(5)
Human Rights
Citing:
See Also – Saunders v United Kingdom ECHR 30-Sep-1994
Link between self-incrimination and presumption of innocence – use of compulsion. . .
Cited – in re Pergamon Press Ltd CA 1971
The court was asked as to the duties of inspectors appointed under the 1948 Act. Sachs LJ said: ‘The inspectors’ function is in essence to conduct an investigation designed to discover whether there are facts which may result in others taking . .
Cited – Deweer v Belgium ECHR 27-Feb-1980
The applicant, a Belgian butcher, paid a fine by way of settlement in the face of an order for the closure of his shop until judgment was given in an intended criminal prosecution or until such fine was paid.
Held: Since the payment was made . .
Cited – Orkem v Commission (Judgment) ECJ 18-Oct-1989
The court considered the powers of the Commission to demand information in an investigation of possible offences against the Community competition laws. Article 11 of Regulation 17 of 1962 gave the Commission power, for the purposes of ensuring the . .
Cited – Funke v France ECHR 25-Feb-1993
M. Funke successfully challenged his conviction for failing to provide documents which the customs authorities had demanded of him, on the grounds that his rights under Article 6 had been infringed: ‘The Court notes that the customs secured Mr. . .
Cited – Fayed v United Kingdom ECHR 6-Oct-1994
The Secretary of State had appointed inspectors to investigate and report on a company takeover. In their report, which was published, the inspectors made findings which were critical of and damaging to the applicants, who relied on the civil limb . .
Cited – Murray v The United Kingdom ECHR 8-Feb-1996
The applicant had been denied legal advice for 48 hours after he had been taken into custody.
Held: There had been a violation of article 6(1) read with article 6(3)(c). However, it was not a breach of human rights to draw inferences from the . .

Cited by:
Cited – Regina v Kearns CACD 22-Mar-2002
The defendant had failed to account for the disappearance of a substantial part of his estate to the official receiver following his bankruptcy. He appealed his conviction for failing to provide an account, saying that the requirement to provide . .
Cited – Luca v Italy ECHR 27-Feb-2001
The accused had been convicted. After exercising his right to silence, there were read to the court accounts of statements made by co-accused but without an opportunity for him to cross examine the witnesses.
Held: Saunders had established the . .
Cited – Regina v Sewa Singh Gill and Paramjit Singh Gill CACD 31-Jul-2003
The appellants sought to challenge their convictions for cheating the Inland Revenue. They were accused of having hidden assets and income from the revenue. The appellants objected to the use at trial of material obtained in a ‘Hansard’ interview. . .
Cited – Kansal v The United Kingdom ECHR 27-Apr-2004
Hudoc Judgment (Merits and just satisfaction) Violation of Art. 6-1 ; Pecuniary damage – claim rejected ; Non-pecuniary damage – finding of violation sufficient ; Costs and expenses (Convention proceedings) – . .
Cited – Regina v Mushtaq HL 21-Apr-2005
The defendant was convicted of fraud charges. He sought to have excluded statements made in interview on the basis that they had been obtained by oppressive behaviour by the police. His wife was very seriously ill in hospital and he had made the . .
Cited – Her Majesty’s Attorney General for Gibraltar v Shimidzu (Berllaque, Intervenor) PC 28-Jun-2005
(Gibraltar) The appellants sought to argue that the failure to allow an acquitted defendant any possible order for costs was a breach of the Constitution.
Held: Section 8 of the Constitution, like its analogue article 6 of the European . .
Cited – Holder v The Law Society Admn 26-Jul-2005
The applicant challenged the independence of the respondent’s disciplinary tribunal.
Held: The claim failed: ‘the nature of the Tribunal is entirely adequately independent and impartial for the purposes for which it is constituted. The . .
Cited – A and others v Secretary of State for the Home Department (No 2) HL 8-Dec-2005
The applicants had been detained following the issue of certificates issued by the respondent that they posed a terrorist threat. They challenged the decisions of the Special Immigration Appeals Commission saying that evidence underlying the . .
Cited – Regina v Hertfordshire County Council, ex parte Green Environmental Industries Ltd and Another HL 17-Feb-2000
A notice was given to the holder of a waste disposal licence to require certain information to be provided on pain of prosecution. The provision of such information could also then be evidence against the provider of the commission of a criminal . .
Cited – Hammerton v Hammerton CA 23-Mar-2007
The husband appealed against his committal for contempt of a court order in family proceedings. The court had heard the wife’s application for his committal at the same time as his application for contact with the children.
Held: The appeal . .
Cited – C Plc v P and Attorney General Intervening CA 22-May-2007
The respondent had been subject to a civil search, which revealed the existence of obscene images of children on his computer. He appealed against refusal of an order that the evidence should not be passed to the police as evidence. He said that the . .
Cited – Eastaway v Secretary of State for Trade and Industry CA 10-May-2007
The applicant had been subject to company director disqualification proceedings. Eventually he gave an undertaking not to act as a company director, but then succeeded at the ECHR in a complaint of delay. He now sought release from his undertaking . .
Cited – Regina v S and A CACD 9-Oct-2008
The defendant appealed against his conviction under the 2000 Act for failing to disclose the key used to encrypt a computer file. He was subject to a control order as a suspected terrorist. As the police raided his house, they found the key had been . .
Cited – In re Rottmann (a Bankrupt) CA 18-Mar-2009
The bankrupt renewed his request for permission to appeal against a refusal to adjourn his public examination in bankruptcy. The court had allowed a private examination so as not to prejudice pending criminal proceedings in Germany.
Held: The . .
Cited – K, Regina v CACD 28-Jul-2009
The defendant appealed against orders allowing the use in evidence against him of information provided by him in ancillary relief proceedings, and without prejudice negotations with his wife’s solicitors.
Held: The information provided through . .
Cited – Hundal and Dhaliwal, Regina v CACD 3-Feb-2004
The defendants appealed against conviction and sentence for membership of an organisation proscribed under the 2000 Act. The defendants said that at the time they joined the organisation was not proscribed, and had left before it became proscribed. . .
Cited – Phillips v Newsgroup Newspapers Ltd and Others ChD 17-Nov-2010
The claimant had been assistant to a well known publicist. The defendant had settled an action brought by her principal for hacking his mobile telephone, in the course of which it appeared that the claimant’s phone had also been hacked. She now . .
Cited – Greater Manchester Police v Andrews Admn 23-May-2011
The CC appealed by case stated against a refusal of an order under the 2000 Act for the disclosure by the defendant of a cryptography key. The defendant had a history of sexual offences against children and had failed to keep to the terms of a . .
Cited – Her Majesty’s Advocate v P SC 6-Oct-2011
(Scotland) The appellant had been interviewed by police without being offered access to a solicitor. He complained that the interview and information obtained only through it had been used to found the prosecution.
Held: The admission of the . .
Cited – Ambrose v Harris, Procurator Fiscal, Oban, etc SC 6-Oct-2011
(Scotland) The appellant had variously been convicted in reliance on evidence gathered at different stages before arrest, but in each case without being informed of any right to see a solicitor. The court was asked, as a devolution issue, at what . .
Cited – Beghal v Director of Public Prosecutions SC 22-Jul-2015
Questions on Entry must be answered
B was questioned at an airport under Schedule 7 to the 2000 Act, and required to answer questions asked by appropriate officers for the purpose set out. She refused to answer and was convicted of that refusal , contrary to paragraph 18 of that . .
Cited – Regina v Kansal (2) HL 29-Nov-2001
The prosecutor had lead and relied at trial on evidence obtained by compulsory questioning under the 1986 Act.
Held: In doing so the prosecutor was acting to give effect to section 433.
The decision in Lambert to disallow retrospective . .
Cited – River East Supplies Ltd, Regina (on The Application of) v Crown Court At Nottingham Admn 28-Jul-2017
Privilege against self incrimination and application for production order by foreign state . .
Cited – Gold Nuts Ltd and Others v Revenue and Customs FTTTx 8-Feb-2016
INCOME TAX – CORPORATION TAX – preliminary hearing on matters of law – COP9 letter issued to Mr Budhdeo (‘Mr B’) – contractual disclosure offered and refused – whether FTT has jurisdiction to close a ‘COP9 enquiry’ – no -whether HMRC using SA and CT . .
Cited – RJ, Regina (on The Application of) v The Director of Legal Aid Casework Admn 22-Mar-2016
The claimant challenged a decision of the Director of Legal Aid Casework to refuse her application for legal aid to enable her to be represented at an inquest. . .
Cited – PNPF Trust Company Ltd (Pilots’ National Pension Fund, Trustee of) v Taylor and Others ChD 10-Jul-2009
Application to be joined to proceedings . .
Cited – JS v R CACD 29-Sep-2009
. .
Cited – JSC BTA Bank v Ablyazov and Others CA 27-Oct-2009
Appeal against disclosure orders made in support of freezing order. . .
Cited – Child Maintenance Enforcement Commission v Forrest Admn 14-May-2010
. .
Cited – The PNPF Trust Company Ltd v Taylor and Others ChD 28-Jun-2010
. .
Cited – Cadder v Her Majesty’s Advocate SC 26-Oct-2010
Statement without lawyer access was inadmissible
The accused complained that he had been convicted for assault and breach of the peace on the basis of a statement made by him during an interview with the police where, under the 1995 Act, he had been denied access to a lawyer.
Held: The . .
Cited – Maclean v Procurator Fiscal, Glasgow HCJ 19-Jan-2012
. .
Cited – Coogan v News Group Newspapers Ltd etc CA 1-Feb-2012
The claimants said that their voicemail accounts had been hacked by one defendant on behalf of the other. They sought discovery of records, and the defendants argued for the benefit of the privilege against self incrimination.
Lord Neuberger MR . .
Cited – Barclay and Others v HM Advocate HCJ 11-Apr-2012
. .
Cited – Lukstins v Her Majesty’s Advocate HCJ 14-Nov-2012
The appellant challenged his conviction for sexual crimes, saying that the taking of a swab from his mouth for a DNA test had been unlawful, and the evidence consequent to that should not have been admitted.
Held: The appeal was refused. Cowie . .
Cited – Akcine Bendrove Bankas Snoras v Antonov and Another ComC 4-Feb-2013
Application for discharge of world wide asset freezing order. . .
Cited – Mohan v Mohan CA 22-May-2013
Appeal from order dismissing the wife’s endeavour to rely on documents and statements made by the husband during the course of complex proceedings to enforce a financial remedy order in the wife’s favour. . .
Cited – Beghal v Director of Public Prosecutions Admn 28-Aug-2013
The court considered the compatibility of the powers in Schedule 7 of the 2000 Act to ‘stop, question, and search’ with a detainee’s human rights.
Held: The powers were valid and required. . .
Cited – JSC BTA Bank v Ablyazov and Others ComC 8-Aug-2014
The Claimant sought disclosure from the First and Second Respondents of documents relating to their assets which would attract legal professional privilege unless falling within the iniquity exception to such privilege, and which are currently held . .
Cited – Malik v Manchester Crown Court and others; Re A Admn 19-Jun-2008
The claimant was a journalist writing about terrorism. He had interviewed a man with past connections with Al-Qaeda, and he now objected to a production order for documents obtained by him in connecion with his writings. The court had acted on . .
Cited – Rottmann v Brittain CA 12-Nov-2008
The applicant sought leave to appeal against a refusal to adjourn his examination in bankruptcy fearing that the contents would become public prejudicing his criminal trial abroad. The court had allowed a private examination, but he felt this was . .

Lists of cited by and citing cases may be incomplete.

Human Rights, Criminal Practice, Company, Criminal Evidence, Insolvency

Leading Case

Updated: 11 November 2021; Ref: scu.165463

In re Horsley and Weight Ltd: CA 1892

The liquidator sought to set aside a pension policy acquired by the company for the benefit of a retiring director. The question was whether the decision to acquire the pension had been ratified by the shareholders.
Held: There had been no misfeasance by the directors.
A company is bound in a matter which is intra vires the company by the unanimous agreement of its members, even where that agreement is given informally and without any meeting.
Templeman LJ said: ‘There could have been gross negligence, amounting to misfeasance. If the company could not afford to pay out andpound;10,000 and was doubtfully solvent so that the expenditure threatened the continued existence of the company, the directors ought to have known the facts and ought at any rate to have postponed the grant of the pension until the financial position of the company was assured.’
Cumming-Bruce LJ referred to a suspicion that at the time of the decision the company was not in a position to pay the money to the respondent. But that evidence ‘fell far short of proof that the directors should at the time have appreciated that the payment was likely to cause loss to the creditors’.
Buckley LJ emphasised that the good faith of the directors was not questioned and there was no suggestion that they had failed to apply their minds honestly to the question whether the decision was a fair and proper thing for the company to do in the light of the company’s financial state as known to them at the time.

Templeman, Cumming-Bruce LJ
[1982] Ch 442, [1982] 3 WLR 431, [1982] 3 All ER 1045
England and Wales

Company, Insolvency

Leading Case

Updated: 11 November 2021; Ref: scu.570504

Helmet Integrated Systems Ltd v Tunnard and others: CA 15 Dec 2006

Whilst employed by the claimants as a salesman, the defendant came to want to develop his idea for a modular helmet suitable for fire-fighters and others. He took certain steps including showing the proposal confidentially to a competitor, and then left the company. The claimant brought proceedings alleging breach of a duty of confidentiality toward them, and now appealed against refusal of relief.
Held: The claimant’s appeal was dismissed. It was proper for the claimant to refer to the provisions of the contract and the job specification, requiring him to advise the company on the activity of competitors. When examining his action before leaving, those contractual obligation could create additional duties. In this case the defendant should have disclosed information about the competitor’s intentions, and to deploy such information exclusively for the benefit of the claimant. He was not however under a duty to disclose his own activities preparatory to leaving. He was therefore not in breach of any fiduciary duty to the claimant.
Moses L.J. said: ‘This freedom to compete, once an employee has left, unrestrained by any enforceable covenant, carries with it a freedom to prepare for future activities, which the employee plans to undertake, once he has left. In Robb v. Green (q.v. supra) Hawkins J. concluded that a manager who had copied a list of customers was liable in damages for breach of an implied term not to use such information to the detriment of his employer. But he observed, in words echoed frequently thereafter, that each case would depend upon its own circumstances and there will be cases where an employee may legitimately canvas, issue circulars, have a place of business ready and hire employees . . The Court of Appeal made no observation suggesting disagreement when it affirmed Hawkins J.’s conclusion.
The legitimacy of preparatory activity
The battle between employer and former employee, who has entered into competition with his former employer, is often concerned with where the line is to be drawn between legitimate preparation for future competition and competitive activity undertaken before the employee has left. This case has proved no exception. But in deciding on which side of the line Mr. Tunnard’s activities fall, it is important not to be beguiled into thinking that the mere fact that activities are preparatory to future competition will conclude the issues in a former employee’s favour. The authorities establish that no such clear line can be drawn between that which is legitimate and that which breaches an employee’s obligations.’

May, Lloyd, Moses LJJ
[2006] EWCA Civ 1735, [2007] FSR 16, [2007] IRLR 126
Bailii
England and Wales
Citing:
Cited – Bell v Lever Brothers Ltd HL 15-Dec-1931
Bell was director and chairman of Niger, a subsidiary of Lever Brothers Ltd who dismissed him, offering and paying andpound;30,000 compensation. Lever then discovered that Mr Bell had made secret profits at the expense of Niger for which he could . .
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 . .
Cited – Robb v Green 1895
An employee intending to enter business for himself may prepare for that step, provided he does not breach terms of his contract of employment or breach the confidence reposed in him by his employers. The duty may be breached by an employee . .
Cited – Robb v Green CA 2-Jan-1895
The lower court had relief granted an order for delivery up to the plaintiff employer of all copies or extracts from the plaintiff’s papers in the defendant’s possession or under his control.
Held: The former employee’s appeal failed.
Cited – Balston Ltd v Headline Filters Ltd and Another 1987
The second defendant, whilst still during his notice period to leave employment by the plaintiff, began to make arrangements to start his own competing business, and solicited future business from a customer of the plaintiff. The plaintiff sought an . .
Cited – Faccenda Chicken Ltd v Fowler CA 1986
Nature of Confidentiality in Information
The appellant plaintiff company had employed the defendant as sales manager. The contract of employment made no provision restricting use of confidential information. He left to set up in competition. The company now sought to prevent him using . .
Cited – Industrial Development Consultants Ltd v Cooley 1972
Mr Cooley was the managing director of the claimant. His duties included procuring business in the field of developing gas depots. The company had unsuccessful negotiations with the Eastern Gas Board for the development of four depots. However, the . .
Cited – Nottingham University v Fishel QBD 19-Jan-2000
When a university embryologist, the respondent, worked abroad he did not act in any breach of fiduciary duty. He remained under a specific duty to direct his fellow embryologists to work in the interests of the university and not in his own . .
Cited – British Midland Tool Limited v Midland International Tooling ChD 2003
Four former employees had set out to create a business in competition with the claimant. They had agreed to use unlawful means to do so.
Held: A director who decided to set up a competing business and took preparatory steps could rely upon the . .
Cited – Shepherds Investments Ltd and Another v Walters and others ChD 12-Apr-2006
The claimant company accused former directors and employee of setting up a competing business, of diverting business opportunities and of misusing confidential information. They said that they had acted in breach not only of their fiduciary . .
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 by:
Cited – Customer Systems Plc v Ranson CA 29-Mar-2012
Leave to appeal granted. . .
Cited – Imam-Sadeque v Bluebay Asset Management (Services) Ltd QBD 10-Dec-2012
Popplewell J said: ‘In general terms, it can be said that the duty of fidelity requires an employee not to engage in competitive activity. Nevertheless, it is legitimate for him to undertake competitive activity as soon as he ceases the employment . .
Cited – Whitmar Publications Ltd v Gamage and Others ChD 4-Jul-2013
Whitmar claimed damages for breach of contract; an account of profits; damages for breach of fiduciary duty and/or for infringement of its Database Rights under the Copyright and Rights in Database Regulations 1997; and for a permanent injunction . .

Lists of cited by and citing cases may be incomplete.

Intellectual Property, Company, Employment

Updated: 11 November 2021; Ref: scu.247402