Howard Smith Limited v Ampol Petroleum Limited: PC 14 Feb 1974

(New South Wales) The court considered the use by directors of their fiduciary power of allotment of shares for a different purpose than that for which it was granted, and so as to dilute the voting power of the majority shareholding of issued shares. Lord Wilberforce said: ‘Having ascertained, on a fair view, the nature of this power, and having defined as can best be done in the light of modern conditions the, or some, limits within which it may be exercised, it is then necessary for the court, if a particular exercise of it is challenged, to examine the substantial purpose for which it was exercised, and to reach a conclusion whether that purpose was proper or not. In doing so it will necessarily give credit to the bona fide opinion of the directors, if such is found to exist, and will respect their judgment as to matters of management; having done this, the ultimate conclusion has to be as to the side of a fairly broad line on which the case falls’.
. . And: ”when a dispute arises whether directors of a company made a particular decision for one purpose or for another, or whether, there being more than one purpose, one or another purpose was the substantial or primary purpose, the court, in their Lordships’ opinion, is entitled to look at the situation objectively in order to estimate how critical or pressing, or substantial or, per contra, insubstantial an alleged requirement may have been. If it finds that a particular requirement, though real, was not urgent, or critical, at the relevant time, it may have reason to doubt, or discount, the assertions of individuals that they acted solely in order to deal with it, particularly when the action they took was unusual or even extreme.’
Lord Wilberforce said: ‘it is correct to say that where the self-interest of the directors is involved, they will not be permitted to assert that their action was bona fide thought to be, or was, in the interest of the company’ pleas to this effect have invariably been rejected just as trustees who buy trust property are not permitted to assert that they paid a good price.
No more, in their Lordships’ view, can this be done by the use of a phrase – such as ‘bona fide in the interest of the company as a whole’ or ‘for some corporate purpose’. Such phrases, if they do anything more than restate the general principle applicable to fiduciary powers, at best serve, negatively, to exclude from the area of validity cases where the directors are acing sectionally, or partially: ie improperly favouring one section of the shareholders against another. Of such cases it has said:
The question which arises is sometimes not a question of the interest of the company at all, but a question of what is fair as between different classes of shareholders.’

Lord Wilberforce
[1974] AC 821, [1974] UKPC 3
Bailii
Australia
Citing:
Approved – Harlowe’s Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Company No Liability 1968
. .
Approved – Teck Corporation Ltd v Millar 1972
The court discussed the validity of steps which might be taken by a company director to resist a take-over. Berger J said: ‘So how wide a latitude ought the directors to have? If a group is seeking to obtain control, must the directors ignore them? . .

Cited by:
Cited – Bruce Peskin; Kevin Milner v John Anderson and Others CA 14-Dec-2000
The Royal Automobile Club (RAC) had been demutualised. The claimants were former members who sought damages from former directors because they had received no benefit. They had ceased to be members before the re-organisation and claimed they should . .
Cited – Criterion Properties Plc v Stratford UK Properties and others CA 18-Dec-2002
The parties came together in a limited partnership to develop property. The appeal was against a refusal to grant summary judgment on a claim that one party had been induced to enter the contract by a fraudulent misrepresentation.
Held: In . .
Cited – Cayne and Another v Global Natural Resources Plc ChD 12-Aug-1982
The court gave this example of the legitimate use of the directors’ powers to defeat a take-over: ‘If Company A and Company B are in business competition, and Company A acquires a large holding of shares in Company B with the object of running . .
Cited – Criterion Properties Plc v Stratford UK Properties Llc and others ChD 27-Mar-2002
Criterion sought to set aside a shareholders agreement. Their partner had said they were concerned that another party was taking Criterion over and that this would put at risk their working relationships. The agreement sought to add a poison pill to . .
Cited – 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 . .
Followed – Ex parte Glossop; Re a Company (No 00370 or 1987) ChD 1988
The court heard a complaint as to the non payment of dividends. Harman J said: ‘It is, in my judgment, vital to remember that actions of boards of directors cannot simply be justified by invoking the incantation ‘a decision taken bona fide in the . .
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 . .
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.

Company

Leading Case

Updated: 10 November 2021; Ref: scu.185794

Prest v Petrodel Resources Ltd and Others: SC 12 Jun 2013

In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. The judge had made such an order, finding evidence that the companies had been used to attempt to circumvent the divorce court’s powers.
Held: The appeal succeeded, but on the ground that the properties at issue were held in trust for the wife by the company. The appeal was dismissed as regards her request that the court pierce the company veil.
The principle that the court may be justified in piercing the corporate veil if a company’s separate legal personality is being abused for the purpose of some relevant wrongdoing is well established in the authorities: ‘there is a limited principle of English law which applies when a person is under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. The court may then pierce the corporate veil for the purpose, and only for the purpose, of depriving the company or its controller of the advantage that they would otherwise have obtained by the company’s separate legal personality.’ No wider principle applied in cases under the 1973 Act.
Lord Neuberger set out what he thought of the doctrine that is open to a court, without statutory authority (or, possibly, in the absence of the intention of contracting parties), to pierce the veil of incorporation: ‘It is . . clear from the cases and academic articles that the law relating to the doctrine is unsatisfactory and confused. Those cases and articles appear to me to suggest that (i) there is not a single instance in this jurisdiction where the doctrine has been invoked properly and successfully, (ii) there is doubt as to whether the doctrine should exist, and (iii) it is impossible to discern any coherent approach, applicable principles, or defined limitations to the doctrine.’
Lord Sumption said: ‘The recognition of a jurisdiction such as the judge sought to exercise in this case would cut across the statutory schemes of company and insolvency law. These include elaborate provisions regulating the repayment of capital to shareholders and other forms of reduction of capital, and for the recovery in an insolvency of improper dispositions of the company’s assets. These schemes are essential for the protection of those dealing with a company, particularly where it is a trading company like PRL and Vermont. The effect of the judge’s order in this case was to make the wife a secured creditor. It is no answer to say, as occasionally has been said in cases about ancillary financial relief, that the court will allow for known creditors. The truth is that in the case of a trading company incurring and discharging large liabilities in the ordinary course of business, a court of family jurisdiction is not in a position to conduct the kind of notional liquidation attended by detailed internal investigation and wide publicity which would be necessary to establish what its liabilities are. In the present case, the difficulty is aggravated by the fact that the last financial statements, which are not obviously unreliable, are more than five years old. To some extent that is the fault of the husband and his companies, but that is unlikely to be much comfort to unsatisfied creditors with no knowledge of the state of the shareholder’s marriage or the proceedings in the Family Division. It is clear from the judge’s findings of fact that this particular husband made free with the company’s assets as if they were his own. That was within his power, in the sense that there was no one to stop him. But, as the judge observed, he never stopped to think whether he had any right to act in this way, and in law, he had none. The sole shareholder or the whole body of shareholders may approve a foolish or negligent decision in the ordinary course of business, at least where the company is solvent: Multinational Gas and Petrochemical Co v Multinational Gas and Petrochemical Services Ltd [1983] Ch 258. But not even they can validly consent to their own appropriation of the company’s assets for purposes which are not the company’s: Belmont Finance Corpn Ltd v Williams Furniture Ltd [1979] Ch 250, 261 (Buckley LJ), Attorney-General’s Reference (No 2 of 1982) [1984] QB 624, Director of Public Prosecutions v Gomez [1993] AC 442, 496-497 (Lord Browne-Wilkinson). Mr Prest is of course not the first person to ignore the separate personality of his company and pillage its assets, and he will certainly not be the last. But for the court to deploy its authority to authorise the appropriation of the company’s assets to satisfy a personal liability of its shareholder to his wife, in circumstances where the company has not only not consented to that course but vigorously opposed it, would, as it seems to me, be an even more remarkable break with principle.
It may be said, as the judge in effect did say, that the way in which the affairs of this company were conducted meant that the corporate veil had no reality. The problem about this is that if, as the judge thought, the property of a company is property to which its sole shareholder is ‘entitled, either in possession or reversion’, then that will be so even in a case where the sole shareholder scrupulously respects the separate personality of the company and the requirements of the Companies Acts, and even in a case where none of the exceptional circumstances that may justify piercing the corporate veil applies. This is a proposition which can be justified only by asserting that the corporate veil does not matter where the husband is in sole control of the company. But that is plainly not the law.’

Lord Neuberger, President, Lord Walker, Lady Hale, Lord Mance, Lord Clarke, Lord Wilson, Lord Sumption
[2013] UKSC 34, [2013] WLR(D) 237, [2013] 3 FCR 210, [2013] 4 All ER 673, [2013] Fam Law 953, [2013] 2 FLR 732, [2013] BCC 571, [2013] 2 AC 415, [2013] WTLR 1249, [2013] 3 WLR 1, UKSC 2013/0004
Bailii, Bailii Summary, SC Summary, SC
Matrimonial Causes Act 1973 23
England and Wales
Citing:
Appeal from – Petrodel Resources Ltd and Others v Prest and Others CA 26-Oct-2012
The parties had disputed ancillary relief on their divorce. The three companies, each in the substantial ownership of the husband, challenged the orders made against them saying there was no jurisdiction to order their property to be conveyed to the . .
Cited – The Duchess of Kingston’s Case 1-Apr-1776
On plea, sentence in ecclesiastical Court ex directo in a matter properly cognizable there, is conclusive evidence where the same matter comes into question collaterally in a court of law or equity.
A sentence of jactitation is not conclusive . .
Cited – Salomon v A Salomon and Company Ltd HL 16-Nov-1896
A Company and its Directors are not same paersons
Mr Salomon had incorporated his long standing personal business of shoe manufacture into a limited company. He held nearly all the shares, and had received debentures on the transfer into the company of his former business. The business failed, and . .
Cited – Lazarus Estates Ltd v Beasley CA 1956
There was a privative clause in the 1954 Act. A landlord’s declaration under the Act that work of a specified value, supporting an increase in rent, had been carried out on leased premises, could not be questioned after 28 days of its service on the . .
Cited – In re Barcelona Traction, Light and Power Co Ltd (Belgium v Spain) (second phase) ICJ 5-Feb-1970
ICJ The claim arose out of the adjudication in bankruptcy in Spain of Barcelona Traction, a company incorporated in Canada. Its object was to seek reparation for damage alleged by Belgium to have been sustained . .
Cited – Lonrho Ltd v Shell Petroleum Co Ltd HL 1980
In the absence of a presently enforceable right there was nothing in the court rules for discovery to compel a party to take steps that would enable that party to acquire such a right in the future. Documents of a subsidiary were not in the ‘power’ . .
Cited – Puttick v Attorney General etc FD 1980
Astrid Proll, a former member of the Baader-Meinhof gang absconded while awaiting trial in Germany. She entered the UK using a passport which she had bought in the name of Senta Sauerbier, and married Robin Puttick under that name. The German . .
Cited – Bank of Tokyo Ltd v Karoon (Note) 1986
Robert Goff LJ considering a request for an anti-suit ijunction, said: ‘foreign proceedings are to be viewed as vexatious or oppressive only if there is nothing which can be gained by them over and above what may be gained in local proceeding’. He . .
Cited – Secretary of State for Communities and Local Government and Another v Welwyn Hatfield Borough Council SC 6-Apr-2011
The land-owner had planning permission to erect a barn, conditional on its use for agricultural purposes. He built inside it a house and lived there from 2002. In 2006. He then applied for a certificate of lawful use. The inspector allowed it, and . .
Cited – Woolfson v Strathclyde Regional Council HL 15-Feb-1978
The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name.
Held: The House declined to allow the principal shareholder of a company to recover compensation for the . .
Cited – Adams v Cape Industries plc CA 2-Jan-1990
Proper Use of Corporate Entity to Protect Owner
The defendant was an English company and head of a group engaged in mining asbestos in South Africa. A wholly owned English subsidiary was the worldwide marketing body, which protested the jurisdiction of the United States Federal District Court in . .
Cited – Nicholas v Nicholas CA 1984
The Court upheld an appeal against an order for the husband to procure the transfer to the wife of a property belonging to a company in which he held a 71% shareholding, the other 29% being held by his business associates. However, both members of . .
Cited – Green v Green FD 1993
In an ancillary relief application, Connell J awarded to the wife assets vested in a limited company whose entire share capital was owned by the husband. . .
Cited – Mubarak v Mubarak FD 30-Nov-2000
In ancillary relief proceedings, where a respondent company director conceded that the assets and income of a company could be treated as his own, it could be proper to draw aside the veil of incorporation. Nevertheless the court should be careful . .
Criticised – Trustor Ab v Smallbone and Another (No 2) ChD 30-Mar-2001
Directors of one company fraudulently diverted substantial sums to another company owned by one of them. The defrauded company sought return of the funds, from the company and from the second director on the basis that the corporate veil should be . .
Cited – Kremen v Agrest (No 2) FD 3-Dec-2010
An application was made in ancillary relief case to set aside the transfer of a share in a company said to have been backdated to defeat the court’s jurisdiction.
Held: Mostyn J considered an There was a ‘strong practical reason why the cloak . .
Cited – Gilford Motor Co Ltd v Horne CA 1933
The defendant was the plaintiff’s former managing director. He was bound by a restrictive covenant after he left them. To avoid the covenant, he formed a company and sought to transact his business through it. At first instance, Farwell J had found . .
Cited – A v A FD 29-Jan-2007
Munby J referred to the robust approach which had always been adopted in the Family Division in seeing through sham arrangements designed to hide the ownership of assets of the marriage by vesting them in relatives or companies which were in reality . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .
Cited – VTB Capital Plc v Nutritek International Corp and Others ChD 29-Nov-2011
The appellant bank had granted very substantial lending facilities to the defendant companies, and now alleged fraudulent misrepresentation. The defendants now sought to have the service set aside. The claimants also sought permission to amend the . .
Cited – VTB Capital Plc v Nutritek International Corp and Others CA 20-Jun-2012
The claimant bank said that it had been induced to create very substantial lending facilities by fraudulent misrepresentation by the defendants. They now appealed against findings that England was not clearly or distinctly the appropriate forum for . .
Cited – VTB Capital Plc v Nutritek International Corp and Others SC 6-Feb-2013
The claimant bank said that it had been induced to create very substantial lending facilities by fraudulent misrepresentation by the defendants. They now appealed against findings that England was not clearly or distinctly the appropriate forum for . .
Cited – Jones v Lipman and Another ChD 1962
The defendant had contracted to sell his land. He changed his mind, and formed a company of which he was owner and director, transferred the land to the company, and refused to complete. The plaintiff sought relief.
Held: Specific performance . .
Doubted – Gencor ACP Ltd v Dalby ChD 2000
The plaintiff made a large number of claims against a former director, Mr Dalby, for misappropriating its funds. These included a claim for an account of a secret profit which Mr Dalby was said to have been procured to be paid by a third party, . .
Cited – British Railways Board v Herrington HL 16-Feb-1972
Land-owner’s Possible Duty to Trespassers
The plaintiff, a child had gone through a fence onto the railway line, and been badly injured. The Board knew of the broken fence, but argued that they owed no duty to a trespasser.
Held: Whilst a land-owner owes no general duty of care to a . .
Cited – Belmont Finance Corporation Ltd v Williams Furniture Ltd CA 1979
The company directors operated an elaborate scheme to extract value from Belmont by causing it to buy the shares of a company called Maximum at a considerable overvalue. This was a breach of the fiduciary duties of the directors. They sought to . .
Cited – Multinational Gas and Petrochemical Co Ltd v Multinational Gas and Petrochemical Services Ltd CA 1983
The court considered the way that the duty of a director to his company arose: ‘The directors indeed stand in a fiduciary relationship to the company, as they are appointed to manage the affairs of the company and they owe fiduciary duties to the . .
Cited – Attorney-General’s Reference (No. 2 of 1982) CACD 1984
Two men were charged with theft from a company which they wholly owned and controlled. The court considered the actions of company directors in dishonestly appropriating the property of the company, and whether since the title to the goods was . .
Cited – Regina v Inland Revenue Commissioners, Ex parte T C Coombs and Co HL 1991
The House heard an application judicially to review a notice served by an inspector of taxes under section 20 of the 1970 Act, requiring T C Coombs and Co to deliver or make available for inspection documents in their possession relevant to the tax . .
Cited – Director of Public Prosecutions v Gomez HL 3-Dec-1992
The defendant worked as a shop assistant. He had persuaded the manager to accept in payment for goods, two cheques which he knew to be stolen. The CA had decided that since the ownership of the goods was transferred on the sale, no appropriation of . .
Cited – Wisniewski v Central Manchester Health Authority CA 1997
The court considered the effect of a party failing to bring evidence in support of its case, as regards the court drawing inferences: ‘(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a . .
Cited – Atlas Maritime Co SA v Avalon Maritime Ltd (‘the Coral Rose’) (No 1) CA 1991
Whilst it would be wrong to find a principal/agency relationship between a creditor and a debtor which was a shell company whose sole activity was sponsored, funded and controlled by the creditor (a proposition described by Staughton LJ as . .
See Also – Prest v Prest and Others CA 16-Feb-2012
. .

Cited by:
Cited – Jetivia Sa and Another v Bilta (UK) Ltd and Others CA 31-Jul-2013
Defendants appealed against refusal of their request for a summary striking out for lack of jurisdiction, of the claims against them arising from their management of the insolvency of the first defendant. . .
Cited – Gohil v Gohil SC 14-Oct-2015
The Court was asked ‘Do the principles referable to the admissibility of fresh evidence on appeal, as propounded in the decision of the Court of Appeal in Ladd v Marshall [1954] 1 WLR 1489, have any relevance to the determination of a spouse’s . .
See Also – Prest v Prest FD 28-Jul-2014
W sought H’s committal to prison for failing to pay sums due under the provisions an Order for the payment of periodical payments to the wife for her own benefit and for the benefit of the children of the parties, so accordingly maintenance orders. . .
See Also – Prest v Prest FD 29-Jul-2014
. .
See Also – Prest v Prest CA 7-Jul-2015
H appealed against an order made under the 1869 Act as respects arrears under a maintenance order. . .
Cited – Goldtrail Travel Ltd v Onur Air Tasimacilik As SC 2-Aug-2017
At first instance the appellant had dishonestly assisted another party to defraud the respondent, and ordered payment of substantial damages. The defendant, non-resident, sought to appeal, and the respondent asked the court to order payment into . .

Lists of cited by and citing cases may be incomplete.

Family, Company

Leading Case

Updated: 10 November 2021; Ref: scu.510793

Secretary of State for Business, Enterprise and Regulatory Reform v Neufeld and Another: CA 2 Apr 2009

The claimant had been majority shareholder and a director of his company which had become insolvent owing him arrears of wages. He had successfully claimed re-imbursement of the arrears and redundancy pay, and notice and holiday pay from the appellant.
Held: Provided that the employment contract was not a sham, and was properly a contract of employment rather than a contract for services, the claims were proper. The details might deserve close investigation, and the circumstances would need to be continuing at the time of the insolvency.

Lord Justice Rix, Lord Justice Toulson and Lord Justice Rimer
[2009] EWCA Civ 280, Times 10-Apr-2009, [2009] ICR 1183, [2009] IRLR 475, [2009] BPIR 909, [2009] 3 All ER 790
Bailii
Employment Rights Act 1996 182
England and Wales

Employment, Company

Updated: 10 November 2021; Ref: scu.329545

Secretary of State for Business, Enterprise and Regulatory Reform v Amway (UK) Ltd: CA 29 Jan 2009

The Secretary challenged the refusal to order the winding up of the company after the court accepted undertakings as to the future business model and conduct of the company.
Held: Where the insolvency proceedings were on the basis that the trading methods of a company were ‘inherently objectionable’ unders section 124A, the court had power to accept appropriate undertakings from the company as to its future business models and practices and to reject the Secretary of State’s petition.

Lord Justice Rix, Lord Justice Toulson and Lord Justice Rimer
[2009] EWCA Civ 32, Times 18-Mar-2009, [2009] Bus LR D121
Bailii
Insolvency Acy 1986 124A
England and Wales

Company, Insolvency

Updated: 10 November 2021; Ref: scu.280242

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 court an unlimited judicial discretion to make such order as it thinks fit with a view to bringing to an end the matters complained of, including an order for buying out one faction by the other. It is not disputed on behalf of the respondents that in prescribing the basis on which the price of such a sale is to be calculated the court can in effect provide compensation for whatever injury has been inflicted by the oppressors.’

Pennycuick J
[1970] 1 WLR 1194, [1970] 3 All ER 57
Companies Act 1948 201
England and Wales
Cited by:
Cited – 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 . .
Appeal from – In re Jermyn Street Turkish Baths Ltd CA 1971
The finding of oppression was overturned. . .

Lists of cited by and citing cases may be incomplete.

Company

Leading Case

Updated: 10 November 2021; Ref: scu.192622

Gilford Motor Co Ltd v Horne: CA 1933

The defendant was the plaintiff’s former managing director. He was bound by a restrictive covenant after he left them. To avoid the covenant, he formed a company and sought to transact his business through it. At first instance, Farwell J had found that the company had been set up to enable the business to be carried on under his own control but without incurring liability for breach of the covenant. The reality was however that the company was being used as ‘the channel through which the defendant Horne was carrying on his business.’ In fact, he dismissed the claim on the ground that the restrictive covenant was void.
Held: The ruse was ineffective, and an injunction was issued to prevent Horne and his company from breaching the covenant he had given. The company was (as Lord Hanworth MR put it) formed in order to mask the effective carrying on of a business by Mr Horne, the purpose being to enable him to carry on that business in breach of a covenant he had entered into. The shareholders and directors of the company were Mr Horne’s wife and one Howard, an employee of the company.
Lord Hanworth MR said: ‘I have not any doubt on the evidence I have had before me that the Defendant Company was the channel through which the Defendant Horne was carrying on his business. Of course, in law the Defendant Company is a separate entity from the Defendant Horne but I cannot help feeling quite convinced that at any rate one of the reasons for the creation of the company was the fear of Horne that he might commit breaches of covenant . . and that he might possibly avoid that liability if he did it through the Defendant company . . I am quite satisfied that this company was formed as a device, a stratagem, in order to mask the effective carrying on of the business of Horne. The purpose of it was to try to enable him under what is a cloak or a sham, to engage in business which, on consideration of the agreement which had been sent to him before the company was incorporated, was a business in respect of which he had a fear that plaintiffs might intervene and object.’

Lord Hanworth MR, Lawrence and Romer LJJ
[1933] All ER 109, [1933] Ch 935
England and Wales
Cited by:
Cited – Jones v Lipman and Another ChD 1962
The defendant had contracted to sell his land. He changed his mind, and formed a company of which he was owner and director, transferred the land to the company, and refused to complete. The plaintiff sought relief.
Held: Specific performance . .
Cited – Coles and others (Trustees of the Ward Green Working Mens Club) v Samuel Smith Old Brewery (Tadcaster) (Unltd Company) and Another CA 29-Nov-2007
The claimants appealed refusal of an order for specific performance of a contract for the purchase of land under the exercise of an option agreement. The defendant had conveyed the land to a subsidiary in order to defeat the option.
Held: ‘The . .
Distinguished – M and S Drapers (a Firm) v Reynolds CA 1956
The defendant, a collector salesman entered the employment of a firm of credit drapers at a weekly wage of andpound;10. He brought with him the connection of customers acquired in previous employments. He entered into a restrictive covenant that he . .
Cited – Associated Foreign Exchange Ltd v International Foreign Exchange (UK) Ltd and Another ChD 26-May-2010
The claimant sought interim injunctions to enforce a restrictive covenant against solicitation of customers in a former employee’s contract. The employee, a FOREX dealer, had been placed on garden leave for three months and then his contract . .
Cited – VTB Capital Plc v Nutritek International Corp and Others SC 6-Feb-2013
The claimant bank said that it had been induced to create very substantial lending facilities by fraudulent misrepresentation by the defendants. They now appealed against findings that England was not clearly or distinctly the appropriate forum for . .
Cited – Prest v Petrodel Resources Ltd and Others SC 12-Jun-2013
In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. The . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .
Cited – Alec Lobb (Garages) Ltd v Total Oil Ltd CA 1985
The court was asked whether the terms of a lease and lease back amounted to an unconscionable bargain and was unenforceable.
Held: The court affirmed the decision at first instance, but emphasised the need for unconscientious behaviour rather . .

Lists of cited by and citing cases may be incomplete.

Company

Leading Case

Updated: 10 November 2021; Ref: scu.259222

Sugarman and Others v CJS Investments Llp and Others: CA 19 Sep 2014

The parties were apartment owners in a development, each owning shares in the management company. They disputed the interpreation of the Articles as to whether the owner of more than one apartment was still restricted to one vote at member meetings, or had a number of votes equal to the number of apartments. The articles disapplied Regulation 54 of Table A which would have given votes at a number equal to the shares/apartments held.
Held: The appeal succeeded. Floyd LJ said: ‘the language of the voting provision in article 13(a) is clear and unambiguous and that I am bound to apply it. The language used is simply not flexible enough to admit of the respondents’ construction of it.’ And ‘my first task is to enquire whether the language used in the main voting provision in article 13(a) is capable of bearing the meaning contended for by the respondents, or whether, as the appellants submit, it is clear and unambiguous. It is only if I consider that the language is capable of bearing both meanings, that I am entitled to prefer that which most accords with common sense. I am not entitled, under the guise of construing the contract, to rewrite it in order to arrive at a meaning which most accords with our view of business common sense.’
Briggs LJ discussed whether the provision was absurd: ‘There can unfortunately be a fine dividing line between that which appears commercially unattractive and even unreasonable and that which appears nonsensical or absurd. . . The real question is whether the parties can really be taken to have meant by those words to prescribe one member one vote on a poll. It is truly bizarre to think that the promoters of this management company really meant to confer power on (say) 2 flat owners to control the management policy for the whole block where all the other 102 flats were owned by a single investor owner which would be powerless to use its single vote to intervene. Furthermore the care with which these Articles prescribe that each flat owner (whether an individual or co-owning group) has one share and no more (in circumstances where share ownership confers voting rights and nothing else) suggests at least at first sight that Art 13 was not meant to distribute votes, at least on a poll, regardless of the number of shares held. These considerations seemed to me, at least initially, to provide real force in favour of the judge’s view that the literal meaning of the relevant words in Art 13(a) produced a commercial absurdity which could not be its intended or real meaning.
There are however two factors which have persuaded me, on a narrow balance, that the judge was wrong in his finding of commercial absurdity. The first is that there is, as Mr Chaisty pointed out, a good reason for the prescription of one share per flat owner, quite apart from an implication that the number of a member’s shares should govern the number of his votes. It creates a structure where a member who owns multiple flats can confer membership and therefore voting participation on the buyer of one of his flats, while remaining a voting member in respect of the remainder.
The second, perhaps more fundamental, point is that it is dangerous to test commercial absurdity by reference to extreme examples, such as the 102 flats under single ownership, capable of being out-voted by the separate owners of the remaining 2 flats. The court looks at the words used in the context of what the promoters might have thought was a typical or not unlikely ownership pattern, because that is the context in which the assertion of a commercially absurd meaning must be tested. It strikes me as wholly unlikely that the promoters would have given any thought at all to the possibility of one person owning all but 2 of the flats or, for that matter (although this is what later occurred), that as many as 66 flats would come to be owned by a single investor.’

Briggs, Floyd, Macur LJJ
[2014] EWCA Civ 1239
Bailii
Companies Act 2006 321(1)
England and Wales
Citing:
Cited – In Re Horbury Bridge Coal Iron and Waggon Co CA 1879
Lord Jessell MR described the position at common law as regards the rights of members with different numbers of shares in the company, saying: ‘We first of all consider what may be termed the common law of the country as to voting at meetings. It is . .
Cited – F L Schuler AG v Wickman Machine Tools Sales Limited HL 4-Apr-1973
The parties entered an agreement to distribute and sell goods in the UK. They disagreed as to the meaning of a term governing the termination of the distributorship.
Held: The court can not take into account the post-contractual conduct or . .
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 – Kookmin Bank v Rainy Sky Sa and Others CA 27-May-2010
The defendant bank appealed against summary judgment given on a claim on its obligations under an advance payment bond given to support ship-building contracts.
Sir Simon Tuckey (dissenting) said: ‘There is no dispute about the principles of . .
Cited – Rainy Sky Sa and Others v Kookmin Bank SC 2-Nov-2011
Commercial Sense Used to Interpret Contract
The Court was asked as to the role of commercial good sense in the construction of a term in a contract which was open to alternative interpretations.
Held: The appeal succeeded. In such a case the court should adopt the more, rather than the . .
Cited – Mannai Investment Co Ltd v Eagle Star Assurance HL 21-May-1997
Minor Irregularity in Break Notice Not Fatal
Leases contained clauses allowing the tenant to break the lease by serving not less than six months notice to expire on the third anniversary of the commencement date of the term of the lease. The tenant gave notice to determine the leases on 12th . .
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: . .

Lists of cited by and citing cases may be incomplete.

Company, Landlord and Tenant, News

Updated: 10 November 2021; Ref: scu.536776

Pressdram Ltd v Whyte: ChD 30 May 2012

The respondent had been involved in company director disqualification proceedings some 12 years earlier. The claimant, publisher of Private Eye sought disclosure of the associated court papers.
Held: The applicant had provided appropriate details of the papers required. The basic principle of open justice applied, and the papers were required for a proper jurnalistic purpose.The order was made.

Morgan J
[2012] EWHC 1885 (Ch)
Bailii
Company Directors Disqualification Act 1986, Civil Procedure Rules 5.4C(2)
England and Wales
Citing:
Cited – Scott v Scott HL 5-May-1913
Presumption in Favour of Open Proceedings
There had been an unauthorised dissemination by the petitioner to third parties of the official shorthand writer’s notes of a nullity suit which had been heard in camera. An application was made for a committal for contempt.
Held: The House . .
Cited – Dian AO v Davis, Frankel and Mead QBD 2005
Application was made for the disclosure of documents from an earlier court case involving the defendants.
Held: The application as made was disallowed. The right thing to do was to identify the documents it sought with reasonable precision and . .
Cited – Chan v Alvis Vehicles Ltd and Another ChD 8-Dec-2004
The parties had had a part trial, and settled. The Gardian Newspaper now applied for disclosure of various documents to support a proposed news story. The parties had disputed payment to the claimant of commissions on the sales of military vehicles . .
Cited – Guardian News and Media Ltd, Regina (on The Application of) v City of Westminster Magistrates’ Court CA 3-Apr-2012
The newspaper applied for leave to access documents referred to but not released during the course of extradition proceedings in open court.
Held: The application was to be allowed. Though extradition proceedings were not governed by the Civil . .

Lists of cited by and citing cases may be incomplete.

Litigation Practice, Media, Company

Updated: 10 November 2021; Ref: scu.462434

Hosking v Marathon Asset Management Llp: ChD 5 Oct 2016

Loss of agent’s share for breach within LLP

The court was asked whether the principle that a fiduciary (in particular, an agent) who acts in breach of his fiduciary duties can lose his right to remuneration, is capable of applying to profit share of a partner in a partnership or a member of a limited liability partnership.
Held: The profit share of a partner or LLP member can potentially be subject to forfeiture. A partner or LLP member is an agent the mere fact that someone is a partner or LLP member as well as an agent should not preclude the operation of a principle which affects agents more generally.

Newey J
[2016] EWHC 2418 (Ch), [2016] WLR(D) 501, [2017] Ch 157, [2017] 2 WLR 746,
Bailii, WLRD
Arbitration Act 1996, Partnership Act 1890, Limited Liability Partnerships Act 2000, Limited Liability Partnership Regulations 2001
England and Wales
Citing:
Cited – Andrews v Ramsay 1903
The plaintiff asked the defendant estate agents to find a purchaser for his property at a price of pounds 2,500 and if one such was found the agents’ fee would be pounds 50. A purchaser, one Clutterbuck, at pounds 2,100 was found. He paid the agents . .
Cited – Keppel v Wheeler CA 1927
The plaintiff engaged the defendant estate agents to sell a property, instructing them to market it at 6,500 pounds but that he would accept 6,000 pounds. The plaintiff accepted an offer of 6,150 pounds ‘subject to contract’. Before exchange, . .
Cited – Imageview Management Ltd v Jack CA 13-Feb-2009
The appellant company acted for the respondent footballer in placing him with a football club. The respondent said that he had also taken a payment from the club, nominally for arranging a work permit. The respondent said this was improper. The . .
Cited – Bank of Ireland and Another v Jaffery and Another ChD 23-May-2012
Claim for breach of fiduciary duty brought by the Bank against one of its erstwhile senior executives.
Held: Vos J concluded that forfeiture of agency fees would be disproportionate and inequitable for breach of an employment or agency . .
Cited – Dunne v English CA 1874
A partner had made a secret profit from the sale of partnership property.
Held: The other partner sought and obtained relief ‘substantially in accordance with the first and second paragraphs of the prayer of the bill’, which had sought ‘a . .
Cited – Helmore v Smith 1886
The relationship between partners is of a fiduciary nature.
Bacon V-C said: ‘If fiduciary relation means anything I cannot conceive a stronger case of fiduciary relation than that which exists between partners. Their mutual confidence is the . .
Cited – Hilton v Barker Booth & Eastwood (a Firm) CA 22-May-2002
The firm of solicitors acted for both parties in a conveyancing transaction, in a situation when they were permitted to do so. The firm had previously acted for one party in a case where he had been convicted of a crime. The other party said the . .
Cited – Avrahami and Others v Biran and Others ChD 25-Jun-2013
Management fees were to be forfeited for breach of a fiduciary duty by an agent. . .
Cited – Premium Real Estate Ltd v Stevens 6-Mar-2009
Supreme Court of New Zealand – The court was asked as to the forfeiture of remuneration by an agent for breach of fiduciary duty.
Held: In relation to remoteness of damage, it was observed that the question of foreseeability in common law . .
Cited – F and C Alternative Investments (Holdings) Ltd v Barthelemy and Another (No 2) ChD 14-Jul-2011
The court was asked as to the fiduciary obligations owed by members of the board of a limited liability company.
Held: Sales J said that: ‘there is nothing in the Act to qualify the usual fiduciary obligations which an agent owes his principal . .
Cited – Erikson v Carr 1945
New South Wales – an individual was alleged to have disentitled himself to commission as a result of a breach of duty.
Held: Though the legal rights of the parties would depend on the jury’s conclusions as to, among other things, ‘whether it . .
Cited – Olson v Gullo 1994
(Court of Appeal for Ontario) A Mr Olson and a Mr Gullo had formed a partnership to develop a tract of land. Mr Gullo nevertheless bought and sold part of the land for his own account at a substantial profit which he planned to pocket. The trial . .
Cited – Zahid v M Young Legal Associates Ltd and others CA 16-May-2006
Is it possible for a person to be a partner in a firm, and thus liable jointly with the other partners to creditors of the firm, even if his agreement with them is not that he should be entitled to participate in its profits but that he should be . .
Cited – Zahid v M Young Legal Associates Ltd and others CA 16-May-2006
Is it possible for a person to be a partner in a firm, and thus liable jointly with the other partners to creditors of the firm, even if his agreement with them is not that he should be entitled to participate in its profits but that he should be . .
Cited – Reinhard v Ondra Llp and Others ChD 14-Jan-2015
The parties disputed whether the claimant had become a member of the defendant limited liability partnership.
Warren J said: ‘the ‘share’ of a member [of an LLP] is the totality of the contractual or statutory rights and obligations of that . .

Lists of cited by and citing cases may be incomplete.

Agency, Equity, Company

Updated: 10 November 2021; Ref: scu.569924

Barclays Bank Ltd v Quistclose Investments Ltd; etc: HL 31 Oct 1968

R Ltd were in serious financial difficulties. The company’s overdraft with the appellant bank was almost twice its permitted limit. The company sought a loan of 1 million pounds from a financier, who was willing to lend the company that sum provided the company found the money necessary to pay the ordinary share dividend, a sum of pounds 209,719-8s-6d. The company succeeded in obtaining a loan in that sum and for that purpose from the respondents. The respondents cheque was paid into a special account opened by the company with the appellants which was to be used only for the purpose of paying the dividend. The company went into voluntary liquidation, before the dividend was paid. The respondents brought an action against the company and the appellants claiming the money in the special account.
Held: This gave rise to a trust in favour of the creditors and if the trust failed, in favour of the third person. When the money was advanced, the lender acquired a right, enforceable in equity, to prevent its application for any other purpose. This prevents the borrower from obtaining any beneficial interest in the money while the designated purpose is still capable of being carried out. Once the purpose has been carried out, the lender has his normal remedy in debt. If the purpose cannot be carried out, the question arises whether the money falls within the general fund of the borrower’s assets, in which case it passes to his trustee-in-bankruptcy in the event of his insolvency and the lender is merely a loan creditor; or whether it is held on a resulting trust for the lender. This is determined by the particular facts.
Lord Wilberforce observed: ‘The mutual intention of the respondents and of Rolls Razor Ltd, and the essence of the bargain, was that the sum advanced should not become part of the assets of Rolls Razor Ltd, but should be used exclusively for payment of a particular class of its creditors, namely those entitled to the dividend. A necessary consequence from this, by process simply of interpretation, must be that if, for any reason, the dividend could not be paid, the money was to be returned to the respondent: the word ‘only’ or ‘exclusively’ can have no other meaning or effect.’

Lord Wilberforce, Reid, Morris, Guest, Pearce LL
[1970] AC 567, [1968] UKHL 4
Bailii
England and Wales
Cited by:
Cited – Sir Graham Stanley Latimer and others – Trustees for the Crown Forestry Rental Trust v The Commissioner of Inland Revenue PC 25-Feb-2004
PC (New Zealand) The Crown created a charitable trust for certain Maori people. Upon exhaustion of the purpose, the fund was to revert to the Crown. The trustees appealed a finding of liability to income tax.
Cited – Potter v Potter PC 22-Jul-2004
PC (New Zealand) The parties’ relationship failed. They had bought a house together and entered into a trust deed.
Held: ‘Defeasible interests in land are certainly conceptually possible. In England such . .
Cited – AbouRahmah and Another v Abacha and others QBD 28-Nov-2005
Claims were made as to an alleged fraud by some of the respondents. . .
Cited – Leisure Employment Services Ltd v Revenue and Customs CA 16-Feb-2007
The company appealed a finding that it had been paying workers at less than the minimum hourly rate. Its workers resided at their places of work, and deductions were made toward the cost of providing accomodation etc. The company claimed that the . .
Cited – Annabel’s (Berkeley Square) Ltd and Others v Revenue and Customs CA 7-May-2009
The court considered whether tips paid at a restaurant by means of a credit card or cheque thus becoming the employer’s money could properly count toward the minimum wage when paid on to the employee. The revenue contended that the money received . .
Cited – Power and Another v HM Revenue and Customs and Another ChD 23-Oct-2009
The company had collected savings from consumers toward ‘christmas packs’. It went into liquidation. The revenue asserted claims for unsecured creditors saying that no trust had been created in favour of the savers.
Held: No Quistclose type . .
Cited – Regina v Common Professional Examination Board, Ex Parte Mealing-Mcclead CA 19-Apr-2000
A party was required to pay money into court before pursuing an appeal. She borrowed money for this purpose but on the express condition that it should be used for this purpose only and was not to become part of her general assets. The money was . .
Cited – Regina v Common Professional Examination Board, Ex Parte Mealing-Mcclead CA 19-Apr-2000
A party was required to pay money into court before pursuing an appeal. She borrowed money for this purpose but on the express condition that it should be used for this purpose only and was not to become part of her general assets. The money was . .
Cited – Neste Oy v Lloyd’s Bank Plc ChD 1983
A shipping agent (PSL), a client of the defendant, had become insolvent. The defendant sought to combine the accounts. PSL settled on behalf of their shipowner clients bills payable to harbour authorities, pilots, fuel merchants, and other providers . .
Cited – Bailey and Another v Angove’s Pty Ltd SC 27-Jul-2016
The defendant had agreed to act as the claimant’s agent and distributor of the claimant’s wines in the UK. It acted both as agent and also bought wines on its own account. When the defendant went into litigation the parties disputed the right of the . .
Cited – Revenue and Customs v The Investment Trust Companies SC 11-Apr-2017
Certain investment trust companies (ITCs) sought refunds of VAT paid on the supply of investment management services. EU law however clarified that they were not due. Refunds were restricted by the Commissioners both as to the amounts and limitation . .
Cited – LB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Company, Trusts

Leading Case

Updated: 10 November 2021; Ref: scu.194638

Macom Gmbh v Bozeat and Others: ChD 21 Jun 2021

Order regulating company’s affairs

COMPANY – Unfair prejudice – Petitioner 60% shareholder – Respondents 40% shareholders – Alleged breaches of director’s duties and failures to observe Shareholders’ Agreement – Undermining company’s corporate governance – Appropriate remedy – Buy-out order or order regulating company’s affairs

Judge Hodge QC
[2021] EWHC 1661 (Ch)
Bailii
England and Wales
Citing:
Cited – Gerrard v Koby and Another ChD 8-Jul-2004
Baumler (UK) Ltd
The court recognised: ‘in the case of a quasi-partnership company a breach of duty by one participant may not in the event be causative of ‘prejudice or loss’ to the company, but may nevertheless lead to such a loss of . .
Cited – Gray and Others, Re Braid Group (Holdings) Ltd SCS 30-Oct-2015
Application for orders under section 996 of the Companies Act 2006 on the ground that the affairs of Braid Group (Holdings) Limited (‘BGHL’) have been conducted in a manner that was unfairly prejudicial to the interests of some of its members. The . .
Cited – Brown v Bray and Another ChD 29-Aug-2019
Re Audas Group Limited – Unfair prejudice petition – breaches of reserved matters provisions amounted to unfairly prejudicial conduct. . .
Cited – In re Cumana Ltd CA 1986
The court considered the date at which shares are to be valued in a possible order for one set of shareholders to buy the shares of another.
Held: The choice was a matter of the judge’s discretion. Where a minority shareholder has a petition . .
Cited – Grace v Biagioli and others CA 4-Nov-2005
The petitioner complained that he had first been removed as director, and that the remaining directors had misdescribed the company’s profits and paid those profits to themselves as management expenses and in breach of a resolution requiring an . .
Cited – McKillen v Misland (Cyprus) Investments Ltd and Others ChD 21-Dec-2011
‘prejudice need not be financial in character. A disregard of the rights of a member as such, without any financial consequences, may amount to prejudice falling within the section.’ . .
Cited – Estera Trust (Jersey) Ltd and Another v Singh and Others ChD 5-Jul-2018
Re Edwardian Group Ltd
Claim for relief under sections 994-996 of the Companies Act 2006 on the ground that the affairs of the Company have been and are being conducted in a manner unfairly prejudicial to their interests as members of the . .
Cited – Hawkes v Cuddy and others ChD 13-Dec-2007
The court found that the petitioner had been unfairly prejudiced; but it granted the relief sought by the respondent. The court may exercise its own creativity in matching its remedy to the unfair prejudice which has been established. . .
Cited – Hawkes v Cuddy and Others CA 2-Apr-2009
Affirmed
Stanley Burnton LJ rejected the suggestion that on a petition under s. 994 the court cannot award relief that the petitioner does not seek. He commented: ‘In the present case, the correctness or otherwise of that proposition is . .
Cited – Michael Wilson and Partners Ltd v Sinclair and Another (No 2) QBD 28-Apr-2020
Chamberlain J discussed the reactions to his draft judgment: ‘This judgment, exactly as it appears above, was produced in draft in the usual way and sent, under embargo, to the parties for their editorial corrections. Professional lawyers ought to . .
Cited – McKillen v Misland (Cyprus) Investments Ltd and Others ChD 10-Aug-2012
Re Coroin
The parties battled for the control of major London hotels. The claimant alleged unfair dealings in attempts to secure that control.
Held: David Richards J said that prejudice: ‘will certainly encompass damage to the financial . .
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 – Sikorkski v Sikorksi ChD 2012
Briggs J recognised that the court has very wide powers under s. 996, and referred to the submission that it would be wrong in principle for the court to perpetuate a dysfunctional relationship between the parties into the indefinite future, and . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 10 November 2021; Ref: scu.663845

Tito v Wadell (No 2): ChD 1977

The liability to account for profits on breach of the self-dealing rule and the fair-dealing rule does not arise from a breach of duty at all. In his judgment such liability is the consequence of an equitable disability rather than of a breach of duty, such as a breach of trust by a trustee or, it appears, a breach of an analogous duty, such as the fiduciary obligations of a company director to his company. The claim for an account of profits is a claim for unjust enrichment, which may succeed, even in the absence of the commission of any wrong, such as a breach of trust or of fiduciary duty or the misuse or misapplication of any of the assets of the beneficiary of the duty. the fair-dealing rule was not confined to trustees, but ‘to many others, such as agents, solicitors and company directors’. It would be anomalous if the limitation applied to trustees, but not to others subject to the same rule. ‘A possible line of escape from the anomaly would be to treat agents, solicitors and the rest as constructive trustees for this purpose, so that all would be subject to the six years period: but I should be reluctant to resort to such artificiality unless driven to it.’

Sir Robert Megarry VC
[1977] 1 Ch 107
Limitation Act 1939 19(2)
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 . .
Cited – Bhullar and Another v McArdle CA 10-Apr-2001
The defendant had registered a caution against the claimant’s land at the Land Registry. The claimant sought its removal and now appealed an order for rectification of the register against him. The parties had reached oral agreements as to the . .

Lists of cited by and citing cases may be incomplete.

Company, Limitation

Leading Case

Updated: 10 November 2021; Ref: scu.187427

Wragg and Another v Partco Group Ltd UGC Ltd: CA 1 May 2002

A claim was made against directors of a company involved in a takeover, for failure to make proper disclosure. The case involved also other issues. The defendants appealed against a refusal to strike out the claim.
Held: The rules made specific reference to cases in areas of law involving developing jurisprudence. This was one such, and the case should go ahead. The personal liability of directors on takeovers is evolving. The trial might well establish facts which would assist the claimants make out their case.
A court should consider carefully before dealing summarily with single issues if the claim will in any event, go to trial.
Potter LJ summarised the principles to be applied on an application for a summary disposal of a case: ‘It seems to me that the following principles are well established, at least as articulated in relation to summary disposal under Part 24 of the CPR. (1) The purpose of resolving issues on a summary basis and at an early stage is to save time and costs and courts are encouraged to consider an issue or issues at an early stage which will either resolve or help to resolve the litigation as an important aspect of active case management: see Kent – v- Griffiths [2001] QB 36. This is particularly so where a decision will put an end to an action.
In deciding whether to exercise powers of summary disposal, the court must have regard to the overriding objective.
The court should be slow to deal with single issues in cases where there will need to be a full trial on liability involving evidence and cross examination in any event and/or where summary disposal of the single issue may well delay, because of appeals, the ultimate trial of the action.
The court should always consider whether the objective of dealing with cases justly is better served by summary disposal of the particular issue or by letting all matters go to trial so that they can be fully investigated and a properly informed decision reached. The authority for principles (2)-(4) is to be found in: Three Rivers District Council v Bank of England (No.3) [2001] UKHL 16; [2001] 2 All ER 513 per Lord Hope, considering Swain v Hillman [2001] 1 All ER 91; Green v Hancocks [2001] Lloyds Rep. PN212, per Chadwick LJ; and Killick v Price Waterhouse Coopers [2001] Lloyds Rep. PN17 per Neuberger J. . .
Summary disposal will frequently be inappropriate in complex cases. If an application involves prolonged serious argument, the court should, as a rule, decline to proceed to the argument unless it harbours doubt about the soundness of the statement of case and is satisfied that striking out will obviate the necessity for a trial or will substantially reduce the burden of the trial itself: see the Three Rivers case per Lord Hope . . considering the Williams and Humbert case. (6) It is inappropriate to deal with cases at an interim stage where there are issues of fact involved, unless the court is satisfied that all the relevant facts can be identified and clearly established: see Killick v Price Waterhouse . .
It is inappropriate to strike-out a claim in an area of developing jurisprudence. In such areas, decisions should be based upon actual findings of fact: see Farah v British Airways (unreported) 6th December 1999 (CA) per Lord Woolf MR and per Chadwick LJ, applying Barratt v London Borough of Islington [1999] 3 WLR 83 and X (Minors) v Bedfordshire CC [1995] 2 AC 633.’

Potter LJ
Times 10-May-2002, Gazette 07-Jun-2002, [2002] EWCA Civ 594, [2002] 2 BCLC 323, [2002] 2 LLR 343
Bailii
Civil Procedure Rules 3.4(2)(a)
England and Wales
Cited by:
Cited – Smith and Others v Ministry of Defence QBD 30-Jun-2011
Claims were made after the deaths of British troops on active service in Iraq. In one case the deaths were from detonations of improvised explosive devices, and on others as a result of friendly fire. It was said that there had been a foreseeable . .
Cited – Smith and Others v Ministry of Defence QBD 30-Jun-2011
Claims were made after the deaths of British troops on active service in Iraq. In one case the deaths were from detonations of improvised explosive devices, and on others as a result of friendly fire. It was said that there had been a foreseeable . .
Cited – Bristol Alliance Ltd v Williams and Another QBD 1-Jul-2011
bristol_williamsQBD11
The driver had crashed into the insured’s building causing substantial damage. The court was asked which of the driver’s and building’s insurers should bear the costs. The driver’s insurers said that he had acted deliberately and therefore they were . .
Cited – Pickenham Romford Ltd v Deville ChD 31-Jul-2013
The claimant company’s administrators sought an order to have vacated unilateral notices entered against land titles registered to the claimant. The court now gave its reasons for making the order as requested by way of summary relief. The notices . .
Cited – Boyse (International) Ltd v Natwest Markets Plc and Another ChD 27-May-2020
Claim alleging misselling of interest rate hedging products. The court considered the defendants strike out application, and applications for leave to amend pleadings.
Held: it will normally be appropriate for summary judgment to be pursued on . .

Lists of cited by and citing cases may be incomplete.

Civil Procedure Rules, Litigation Practice, Company

Leading Case

Updated: 10 November 2021; Ref: scu.171237

Williams and Another v Natural Life Health Foods Ltd and Another: HL 30 Apr 1998

A company director was not personally reliable in negligence for bad advice given by him as director unless it could clearly be shown that he had willingly accepted such personal responsibility. A special relationship involving an assumption of personal liability must be established before a company director can become liable for negligent misstatement under the Hedley Byrne principles.
Lord Steyn said: ‘The touchstone of liability is not the state of mind of the defendant. An objective test means that the primary focus must be on things said and done by the defendant or on his behalf. Obviously the impact of what a defendant says or does must be judged in the light of the relevant contextual scene. Subject to this qualification the primary focus must be on exchanges (in which term I include statements and conduct) which cross the line between the defendant and the plaintiff.’ As to whether he was liable as a joint tortfeasor: ‘In any event, the argument is unsustainable. A moment’s reflection will show that, if the argument were to be accepted in the present case, it would expose directors, officers and employees of companies carrying on business as providers of services to a plethora of new tort claims. The fallacy in the argument is clear. In the present case liability of the company is dependent on a special relationship with the plaintiffs giving rise to an assumption of responsibility. M was a stranger to that particular relationship. He cannot therefore be liable as a joint tortfeasor with the company. If he is to be held liable to the plaintiffs, it could only be on the basis of a special relationship between himself and the plaintiffs. There was none. I would therefore reject this alternative argument.’

Lord Goff of Chieveley, Lord Steyn, Lord Hoffmann, Lord Clyde, Lord Hutton
Times 01-May-1998, Gazette 28-May-1998, [1998] UKHL 17, [1998] 1 WLR 830, [1998] BCC 428, (1998) 17 Tr LR 152, [1998] 1 BCLC 689, [1998] 2 All ER 577
House of Lords, Bailii
England and Wales
Citing:
Appeal from – Williams; Reid v Natural Life Health Foods Limited and Mistlin CA 5-Dec-1996
(Majority) A director of a one man company himself could himself be liable for negligent advice outside his duties as a director where his personal character known to be relied upon. In order to fix a director with personal liability, it must be . .
Cited – Hedley Byrne and Co Ltd v Heller and Partners Ltd HL 28-May-1963
Banker’s Liability for Negligent Reference
The appellants were advertising agents. They were liable themselves for advertising space taken for a client, and had sought a financial reference from the defendant bankers to the client. The reference was negligent, but the bankers denied any . .
At first instance – Williams and Another v Natural Life Health Foods Ltd and Another QBD 18-Jan-1996
A company director can be liable for the negligent mis-statement of the company if he warrants his own personal skill. . .
Cited – Salomon v A Salomon and Company Ltd HL 16-Nov-1896
A Company and its Directors are not same paersons
Mr Salomon had incorporated his long standing personal business of shoe manufacture into a limited company. He held nearly all the shares, and had received debentures on the transfer into the company of his former business. The business failed, and . .

Cited by:
Cited – Chagos Islanders v The Attorney General, Her Majesty’s British Indian Ocean Territory Commissioner QBD 9-Oct-2003
The Chagos Islands had been a British dependent territory since 1814. The British government repatriated the islanders in the 1960s, and the Ilois now sought damages for their wrongful displacement, misfeasance, deceit, negligence and to establish a . .
Cited – Niru Battery Manufacturing Company, Bank Sepah Iran v Milestone Trading Limited CA 23-Oct-2003
The claimant had contracted to purchase lead from some of the defendants. There were delays in payment but when funds were made available they should have been repaid. An incorrect bill of lading was presented. The bill certified that the goods had . .
Cited – Commissioners of Customs and Excise v Barclays Bank Plc ComC 3-Feb-2004
The claimant had obtained orders against two companies who banked with the respondent. Asset freezing orders were served on the bank, but within a short time the customer used the bank’s Faxpay national service to transfer substantial sums outside . .
Cited – Customs and Excise v Barclays Bank Plc CA 22-Nov-2004
The claimant had obtained judgment against customers of the defendant, and then freezing orders for the accounts. The defendants inadvertently or negligently allowed sums to be transferred from the accounts. The claimants sought repayment by the . .
Cited – Precis (521) Plc v William M Mercer Ltd CA 15-Feb-2005
Purchasers of a company sought to claim in negligence against the respondent actuaries in respect of a valuation of the company’s pension funds.
Held: There was a paucity of authority as to when a duty of care was assumed. The words used and . .
Cited – MCA Records Inc and Another v Charly Records Ltd and others (No 5) CA 5-Oct-2001
The court discussed the personal liability of a director for torts committed by his company: ‘i) a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the . .
Cited – HM Customs and Excise v Barclays Bank Plc HL 21-Jun-2006
The claimant had served an asset freezing order on the bank in respect of one of its customers. The bank paid out on a cheque inadvertently as to the order. The Commissioners claimed against the bank in negligence. The bank denied any duty of care. . .
Cited – Patchett and Another v Swimming Pool and Allied Trades Association Ltd CA 15-Jul-2009
The claimant suffered damages when the contractor he engaged to construct his swimming pool went into liquidation. Before employing him, he had consulted the defendant’s web-site which suggested that its members were checked for solvency on becoming . .
Cited – Jeremy D Stone Consultants Ltd and Another v National Westminster Bank Plc and Another ChD 11-Feb-2013
The claimants asserted an equitable claim against funds held by the defendant bank in the name of a company owned by another defendant who they said defrauded them through a Ponzi investment scheme.
Held: The claim failed. On the evidence, the . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .

Lists of cited by and citing cases may be incomplete.

Company, Negligence

Leading Case

Updated: 10 November 2021; Ref: scu.158948

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 amounted to an implied waiver of the rule. Considering the evidence some elements of unfair prejudice had been shown, and orders were made for the purchase of the claimant’s shares at an undiscounted value.
Purle QC said: ‘There must be both prejudice and unfairness. Prejudice will most often be established by reference to conduct having a depressive effect (actual or threatened) on the value of the petitioner’s shareholding, which will in most cases be a minority holding, typically in a private company with restrictions on transfer. Unfairness, in turn, most often connotes some breach of the articles, statute, or general principles of company law. However, the operation of the section is not necessarily limited to such cases. The test is an objective one. There may be mutual understandings between shareholders giving rise to special rights of a quasi-partnership kind. Even without that, the conduct of the company’s directors may, whether by reason of malevolence, crass stupidity, or something in between, fall so far short of the standards to be expected of them as to lead to the conclusion that the petitioning shareholder cannot reasonably be expected to have the minimum of trust and confidence in the integrity or basic competence of the board that any shareholder is entitled ordinarily to expect. This is so irrespective of any impact on the value of his or her shares, and irrespective of whether any specific breach of the articles, statute, or the general principles of company law is involved.’

Purle QC
[2009] EWHC 2893 (Ch)
Bailii
Companies Act 2006 994, Companies Act 1985 320
England and Wales
Citing:
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 – Muller and Another v Linsley and Mortimer (A Firm) CA 8-Dec-1994
The plaintiff sued his former solicitors for professional negligence. The damages he sought to recover related to loss he suffered when dismissed as a director of a private company leading to a forced sale of his shares in the company. The plaintiff . .
Cited – In re a Company ChD 1985
While a section 75 petition proceeded it is of great importance to preserve the status quo, to hold the ring, to ensure that the assets remained undiluted, undiverted and properly administered; so that, if the court came to the conclusion, as it . .
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 – Ofulue and Another v Bossert HL 11-Mar-2009
The parties disputed ownership of land, one claiming adverse possession. In the course of negotations, the possessor made a without prejudice offer to purchase the paper owner’s title. The paper owner claimed that this was an acknowledgement under . .
Cited – Re a Company (No 007623 of 1986) 1986
A petition sought relief for prejudicial conduct of the company by majority shareholders, where further shares had been issued and the petitioner had been unable to purchase them.
Held: The petition was dismissed. Hoffmann J said: . .
Cited – Re McCarthy Surfacing Ltd ChD 2009
The court found that certain bonus payments, and the non-declaration of dividends, amounted to an unfair prejudice. The bonus payments had deprived shareholders of 81% of net profits estimated at andpound;1.4million. The directors had acted in . .
Cited – Fisher v Cadman and Others ChD 14-Jun-2005
The trial was concluded and the judgment had been given, but before the order was handed down, the defendants applied to be allowed to provide further evidence.
Held: The standards of Ladd v Marshall might be applied in such a situation, but . .
Cited – Abacus Trust Company (Isle of Man) Colyb Limited v Barr, Barr, and Barr ChD 6-Feb-2003
The court considered the Rule in Hastings-Bass, and specifically (1) whether the trustee’s decision is open to challenge when the failure to take a consideration into account is not attributable to a breach of fiduciary duty on the part of the . .
Cited – Ex parte Glossop; Re a Company (No 00370 or 1987) ChD 1988
The court heard a complaint as to the non payment of dividends. Harman J said: ‘It is, in my judgment, vital to remember that actions of boards of directors cannot simply be justified by invoking the incantation ‘a decision taken bona fide in the . .
Cited – Re BSB Holdings Ltd (No 2) ChD 1996
Arden J considered a submission that there could be no breach of duty by the directors unless the substantial purpose of their acts was to discriminate improperly against a group of shareholders. In rejecting that submission she commented as . .
Cited – Howard Smith Limited v Ampol Petroleum Limited PC 14-Feb-1974
(New South Wales) The court considered the use by directors of their fiduciary power of allotment of shares for a different purpose than that for which it was granted, and so as to dilute the voting power of the majority shareholding of issued . .
Cited – In re Cumana Ltd CA 1986
The court considered the date at which shares are to be valued in a possible order for one set of shareholders to buy the shares of another.
Held: The choice was a matter of the judge’s discretion. Where a minority shareholder has a petition . .
Cited – Hunter v Senate Support Services Ltd and others ChD 2005
The court set aside a forfeiture of shares for non-payment of a call. The decisions of the directors to forfeit the shares and to transfer the forfeited shares to the group holding company were flawed, though not improperly motivated, because the . .
Cited – in Re Kenyon Swansea Ltd ChD 1987
Vinelott J said: ‘There is . . one matter that has given me considerable concern. At a meeting of the board of directors of the company . . it was resolved to instruct solicitors to act on behalf of the company. In reliance on that resolution . .
Cited – West Coast Capital (Lios) Ltd, Re an Order Under Section 994 of the Companies Act 2006 SCS 15-May-2008
‘Thus, it is at least possible that a decision of the board to seek approval for a share issue could be regarded as unfair prejudice, even though the offer could be taken up pro rata by existing shareholders, if it were shown that the board or the . .
Cited – Hale v Waldock: re Metropolis Motorcycles Ltd ChD 6-Mar-2006
Complaint of unfairly prejudicial conduct of management of a company. . .
Cited – Sieff v Fox ChD 23-Jun-2005
The advisers to trustees wrongly advised the trustees about the tax consequences of exercising a power of appointment in a certain way. As a result a large unforeseen Capital Gains Tax liability arose. The trustees sought to set aside the . .
Cited – 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, Litigation Practice

Updated: 10 November 2021; Ref: scu.377911

Williams and Others v Redcard Ltd and Others: CA 20 Apr 2011

The parties disputed whether the defendant company had effectively executed a contract for the sale of land. Two authorised signatories of the company had signed it, but there was no wording to attribute their acts to the company.
Held: The defendant’s appeal against a finding that it had executed the agreement failed. The words in subsection (2) must be read so as to add to the sense otherwise of the section, however there need not be in addition to the signatures of the individuals who are the authorised signatories, words spelling out that those signatures are ‘by or on behalf of’ the company.

Mummry, Hughes, Black LJJ
[2011] EWCA Civ 466
Bailii
Companies Act 2006 44(4), Law of Property (Miscellaneous Provisions) Act 1989 2
England and Wales
Citing:
Cited – Lovett and Another v Carson Country Homes Ltd and Others ChD 1-May-2009
The applicant said that a signature on a debenture purporting to be his was a forgery. It was argued that the section was capable of validating the signature even if it was a forgery.
Held: The appointment of the administrators under the deed . .
Cited – Hilmi and Associates Ltd v 20 Pembridge Villas Freehold Ltd CA 30-Mar-2010
The tenants gave a notice seeking to exercise their right to acquire the freehold building. The landlord challenged the validity of the notice saying that for a company tenant, the notice had been signed only by a director using his own name with . .

Lists of cited by and citing cases may be incomplete.

Company, Land, Contract

Updated: 10 November 2021; Ref: scu.432926

Liverpool and District Hospital for Diseases of the Heart v Attorney-General: ChD 1981

Charitable Company is Trustee of Assets

The court was asked as to the distribution of surplus assets of a charitable company which was in winding up, and the question whether or not s 257 et seq. Companies Act 1948 applied, including s 265 which made provision for the distribution of surplus assets to members.
Held: The position of a charitable company in relation to its assets had ‘at all times been analogous to that of a trustee for charitable purposes’ and that that ‘suffices to give rise to the jurisdiction of the court to order a cy-pres scheme’. Slade J ordered a cy-pres scheme on the basis that the jurisdiction to do that was not limited to a case where there was a strict trust, and applied on the facts because the association’s constitution obliged the assets to be held for charitable purposes.
Slade J said: ‘The expressions ‘trust’ and ‘trust property’ may be, and indeed have been, used by the court in rather different senses in different contexts. Examples of cases where the court has used the expression otherwise than in their strict traditional sense are to be found in Lord Diplock’s review of certain earlier authorities in Ayerst v C. and K. (Construction) Ltd. [1976] AC 167, 179-180[7]. In a broad sense a corporate body may no doubt aptly be said to hold its assets as a ‘trustee’ for charitable purposes in any case where the terms of its constitution place a legally binding restriction upon it which obliges it to apply its assets for exclusively charitable purposes. In a broad sense it may even be said, in such a case, that the company is not the ‘beneficial owner’ of its assets. In my judgment, however, none of the authorities on which Mr Mummery has relied, including the decision in Construction Industry Training Board v Attorney-General [1973] Ch 173 , establish that a company formed under the Companies Act 1948 for charitable purposes is a trustee in the strict sense of its corporate assets, so that on a winding up these assets do not fall to be dealt with in accordance with the provisions of section 257 et seq. of that Act. They do, in my opinion, clearly establish that such a company is in a position analogous to that of a trustee in relation to its corporate assets, such as ordinarily to give rise to the jurisdiction of the court to intervene in its affairs; but that is quite a different matter.’

Slade J
[1981] Ch 193, [1981] 1 All ER 994, [1981] 2 LR 379, (1980) 125 SJ 79
Companies Act 1948 257 265
England and Wales
Citing:
Applied – Von Ernst and Cie SA v Inland Revenue Commissioners CA 1979
The assets of a corporate charity were held on charitable trusts: ‘We were referred to certain authorities which give support to the view that a company incorporated for exclusively charitable purposes is in the position of a trustee of its funds or . .

Cited by:
Cited – Hope Community Church (Wymondham) v Phelan and Others ChD 22-May-2020
The Church, a private company limited by guarantee, sought a declaration that it had the right to enfranchise its church premises under the 1920 Act. . .
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 v The Children’s Investment Fund Foundation (UK) and Others CA 6-Jul-2018
A charity established by H and W wanted to transfer part of its fund to a new charity headed by W in return for her resignation from the first charity on the breakdown of the marriage. Court approval was sought for a transfer, but the remaining . .
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.

Charity, Company

Leading Case

Updated: 10 November 2021; Ref: scu.652836

George Pritchard v Carter Draper And Sir Thomas Maryon Wilson, Bart: 28 Jan 1830

[1830] EngR 316, (1830) Taml 332, (1830) 48 ER 132
Commonlii
England and Wales

Company

Updated: 10 November 2021; Ref: scu.321196

Regina v Take-over Panel, ex parte Datafin PLC: CA 1986

Amenability to judicial review

The issue of amenability to judicial review often requires an examination of the nature of the power under challenge as well as its source: ‘In all the reports it is possible to find enumerations of factors giving rise to the jurisdiction [of judicial review], but it is a fatal error to regard the presence of all those factors as essential or as being exclusive of other factors. Possibly the only essential elements are what can be described as a public element, which can take many different forms, and the exclusion from the jurisdiction of bodies whose sole source of power is a consensual submission to its jurisdiction.’ Where the source of the power did not clearly provide the answer, then the nature of the power fell to be examined.
Lloyd LJ said: ‘If the body in question is exercising public law functions, or if the exercise of its functions have public law consequences, then that may, as Mr Lever submitted, be sufficient to bring the body within the reach of judicial review. It may be said that to refer to ‘public law’ in this context is to beg the question. But I do not think it does. The essential distinction, which runs through all the cases to which we were referred, is between a domestic or private tribunal on the one hand and a body of persons who are under some public duty on the other’.
An unincorporated association may be amenable to judicial review, where it would otherwise be ‘without legal personality’.
Sir John Donaldson MR said: ‘In all the reports it is possible to find enumerations of factors giving rise to the jurisdiction, but it is a fatal error to regard the presence of all those factors as essential or as being exclusive of other factors. Possibly the only essential elements are what can be described are a public element, which can take many different forms, and the exclusion from the jurisdiction of bodies whose sole source of power is a consensual submission to its jurisdiction.’

Sir John Donaldson MR, Lloyd LJ
[1987] 1 QB 815, [1986] 2 All ER 257, [1986] 1 WLR 763, (1986) 2 BCC 99086, [1986] EWCA Civ 8
Bailii
England and Wales
Cited by:
Cited – Regina v British Broadcasting Corporation, ex parte Referendum Party; Regina v Independent Television Commission, ex parte Referendum Party Admn 24-Apr-1997
The Referendum Party challenged the allocation to it of less time for election broadcasts. Under the existing agreements, having fielded over 50 candidates, they were allocated only five minutes.
Held: Neither the inclusion of past electoral . .
Cited – Hampshire County Council v Beer (T/A Hammer Trout Farm); Regina (Beer) v Hampshire Farmers’ Market Ltd CA 21-Jul-2003
The applicant had been refused a licence to operate within the farmer’s market. It sought judicial review of the rejection, but the respondent argued that it was a private company not susceptible to review.
Held: The decisions of the Farmers . .
Cited – Royal Mail Group Plc v The Consumer Council for Postal Services CA 7-Mar-2007
The Royal Mail appealed a grant of judicial review of the decision of the Post regulator not to penalise the company for its failure to meet its service conditions as regards enforcement of credit terms for bulk mail customers.
Held: The . .
Cited – Boyle, Regina (On the Application of) v Haverhill Pub Watch and Others Admn 8-Oct-2009
The claimant had been banned from public houses under the Haverhill Pub Watch scheme. He now sought judicial review of a decision to extend his ban for a further two years. The Scheme argued that it was not a body amenable to judicial review, and . .
Cited – Regina (Tucker) v Director General of the National Crime Squad CA 17-Jan-2003
The applicant was a senior officer seconded to the National Crime Squad. He complained that his secondment had been terminated in a manner which was unfair, and left him tainted without opportunity to reply. He appealed against rejection of his . .
Cited – Regina v The Imam of Bury Park Mosque, Luton and others ex parte Sualiman Ali CA 12-May-1993
The court had been asked to intervene in an internal dispute as to the role of an Imam in a mosque community.
Held: The request was denied. The case was not one of public law: ‘ the particular function which the Imam was performing affected . .

Lists of cited by and citing cases may be incomplete.

Judicial Review, Company

Leading Case

Updated: 09 November 2021; Ref: scu.181976

Online Catering Ltd v Acton and Another: CA 10 Feb 2010

The claimant agreed for the defendant to repair its fleet of vehicles. The defendant, having fees outstanding, entered the claimants’ premises and removed vehicles saying falsely that they were to be repaired, and then refused to return them. The claimants said that they were not bound by the defendants terms saying that they had not been provided, and that a term allowing such removal of vehicles was void as unfair, and as an unregistered bill of sale. Leave to appeal was given on the last point.
Held: The appeal failed since the 1878 Act did not apply to companies. A contract would not become unenforceable as against a company under the Act only because the agreement had not been registered. This was not a bill of sale to which the Acts applied.

Lord Justice Ward, Lady Justice Smith and Lord Justice Rimer
[2010] EWCA Civ 58, [2010] 3 All ER 869, [2010] Bus LR 1257
Bailii, Times
Law of Distress Amendment Act 1888, Distress for Rent Rules 1988, Bills of Sale Act 1878 6 8
England and Wales
Citing:
Cited – Read v Joannon 1890
The court considered the application of the 1878 Act.
Held: Where there are a series of Acts dealing with a topic and with similar names, the words ‘this Act’ in expressions such as ‘in this Act’ or ‘under this Act’ must be construed to mean . .
Cited – In re Standard Manufacturing Co CA 1891
Company debentures were expressly excepted from the operation of the Bills of Sales Act (1878) Amendment Act 1882 by section 17 of that Act because they were debentures ‘issued by any mortgage, loan, or other incorporated company’. Nor were . .
Cited – Great Northern Railway Co v Cole Co-Operative Society 1896
A business created under the Industrial and Provident Societies Acts is not a company in any standard legal sense. Vaughan Williams J distinguished Standard Manufacturing on the basis that the Court of Appeal was not excluding companies generally . .
Cited – Clark v Balm, Hill and Co 1908
A company registered in Guernsey issued debentures creating floating charges over real and personal property in England. The court was asked whether the debentures ought to be deemed to be within the Bills of Sales Acts and so ought to have been . .
Cited – N V Slavenburg’s Bank v Intercontinental Natural Resources Ltd ChD 1980
The Bermudan company defendant had assigned stocks as a security. The security was not registered, and nor did the company have any registration within the UK. It was not the practice of the Registrar of Companies to accept particulars of charges . .
Cited – Trident International Limited v Barlow; Hughes and Goodman (the Joint Administrators of Hamley Plc and Jeffrey (Rogers) Imports Limited CA 30-Jul-1999
A contractual possessory lien, coupled with a right to sell and use the proceeds to discharge the customer’s outstanding indebtedness was not a floating charge because the company did not purport to have any right to exercise any right to take . .
Cited – Ex parte Parsons, In re: Townsend CA 1886
Parsons was to advance money to Townsend. As security he was to have the right to take immediate possession of the goods and sell them.
Held: As a licence to take possession of goods as between two private individuals, it fell within sections . .
Cited – Smith (Administrator of Cosslett (Contractors) Limited) v Bridgend County Borough Council; In re Cosslett (Contractors) Ltd HL 8-Nov-2001
The standard building contract allowed a contractor to take plant and equipment from a site and sell it in payment of sums due under the contract, upon the other contractor becoming insolvent. It was said that this power amounted to a charge over . .

Lists of cited by and citing cases may be incomplete.

Contract, Company

Updated: 09 November 2021; Ref: scu.396716

Cream Holdings Ltd and others v Davenport: CA 9 Dec 2008

There was to be a compulsory transfer of shares. Shareholders objected that the accountant was not independent as was required by the articles. The company appealed an order that the accountants had not been properly appointed. Though the accountant was one of the ones named by the shareholder, he had not been given chance to approve the terms of the appointment nor to make representations.
Held: The company’s appeal failed. The drafting of the clause providing for such an appointment was open to criticism. However: ‘The TPA’s role is to produce an expert valuation of shares held in the Company by the person who is liable to be compelled to offer his shares for sale at that valuation to those who remain. The TPA also has power to decide who should bear the costs of the exercise. The firm of accountants appointed would also lay down the terms, such as limitation of liability, on which it would be prepared to act.
In those circumstances it would be very surprising if a firm of accountants could become the TPA solely as a result of nomination by the parties and without any agreement by both parties and the firm on the terms of engagement as the TPA.’ Nor was the shareholder estopped from accepting the accountant.

Mummery LJ, Sedley LJ, Wilson LJ
[2008] EWCA Civ 1363, [2009] BCC 183
Bailii
England and Wales

Company

Updated: 09 November 2021; Ref: scu.278600

In re Sevenoaks Stationers (Retail) Ltd: CA 1990

The court gave guidelines for the periods of disqualification to be applied for company directors under the Act. The maximum period of ten years should be reserved for only the most serious of cases. Periods of two to five years should apply to cases at the bottom end, and the middle bracket of 6 to 10 years for serious cases. The period should be fixed by the allegations made in the charge, not in the evidence coming out later. Non-payment of crown debts was to be treated more seriously than for other debts, though non-payment of Crown debts is not per se evidence of unfitness: ‘it is necessary to look more closely in each case to see what the significance, if any, of the non-payment of the Crown debt is.’ ‘(i) the top bracket of disqualification for periods over ten years should be reserved for particularly serious cases. These may include cases where a director who has already had one period of disqualification imposed on him falls to be disqualified yet again. (ii) the minimum bracket of two to five years’ disqualification should be applied where, though disqualification is mandatory, the case is, relatively, not very serious. (iii) the middle bracket of disqualification for from six to 10 years should apply for serious cases which do not merit the top category.’
As to the words of section 6 of the 1986 Act, these were ‘ordinary words of the English language’, and, then referring to earlier judicial statements, Dillon LJ said: ‘Such statements may be helpful in identifying particular circumstances in which a person would clearly be unfit. But there seems to have been a tendency, which I deplore, on the part of the Bar, and possibly also on the part of the official receiver’s department, to treat the statements as judicial paraphrases of the words of the statute, which fall to be construed as a matter of law in lieu of the words of the statute. The result is to obscure that the true question to be tried is a question of fact – what used to be pejoratively described in the Chancery Division as ‘a jury question’.’

Dillon Butler-Sloss and Staughton LJJ
[1991] Ch 166, [1990] BCC 765
Company Directors Disqualification Act 1986 6, Companies (Disqualification of Unfit Directors) Proceedings Rules 1987
England and Wales
Citing:
Cited – In re Lo-Line Electric Motors Ltd 1988
When considering the filing of additional evidence changing allegations made under the 1986 Act, the paramount requirement is that the director facing disqualification must know the charge he has to meet. As to the standard of misbehaviour required . .

Cited by:
Cited – Secretary of State for Trade and Industry v Christopher Paul Reynard CA 18-Apr-2002
A company director was examined in court, in the course of company director disqualification proceedings. The judge was so concerned by his behaviour as a witness, as to extend the period of disqualification. He had appealed, and the Secretary of . .
Cited – Simpson v Regina CACD 23-May-2003
The appellant challenged a confiscation order made on his conviction of VAT fraud. It was argued that one could not be made unless a proper notice had been given, and none of the offences occurred before 1995. On the assumption that section 1 of the . .
Cited – The Secretary of State for Trade and Industry v Swan and Othes ChD 22-Jul-2003
When commencing proceedings under the Act, the papers were defective. The secretary of state had failed to give appropriate notice, and thus prevented him from making representations as to the allegations. The allegations involved the manipulation . .
Cited – The Secretary of State for Trade and Industry v Michael Hamilton Amiss, Jonathan Andrew Chapman, Roger Rex Ingles ChD 20-Mar-2003
The Secretary sought disqualification orders, under section 8 which left the court with a discretion as to whether an order should be made.
Held: It was not necessary to establish dishonesty to a Twinsectra standard to justify an order. The . .
Cited – In re Samuel Sherman Plc 1991
Disqualifications under section 8 should be of similar length to those recommended in the Sevenoaks Stationers for disqualifications under section 6. . .
Cited – The Secretary of State for Trade and Industry v Goldberg, Mcavoy ChD 26-Nov-2003
The Secretary of State sought a disqualification order. The director argued that one shoul not be made in the absence of some breach of legal duty, some dishonesty should be shown.
Held: The answer was a mixture of fact and law. A breach of . .
Cited – 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 . .
Cited – Secretary of State for Business Enterprise and Regulatory Reform v Sullman and Another ChD 19-Dec-2008
An application was made to disqualify as a company director a former director of Claims Direct Limited. He had been accused of several actions which might justify a disqualification.
Held: The court found misconduct but delayed a decision on . .
Cited – Secretary of State for Business Innovation and Skills v Aaron and Others ChD 10-Dec-2009
The claimant sought a disqualification after the defendants had been directors of a company mis-selling Structured Capital at Risk products. The FSA had reported that they had been negligent.
Held: ‘I do not have to decide whether or not the . .
Cited – Jones v Director of Public Prosecutions Admn 27-Jan-2011
The driver appealed against his conviction for exceeding the relevant maximum speed on a Special Road, the A55 in North Wales. The speed limit signs were designed to be illuminated, but the lamps were not working. Instructions had been given not to . .
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 . .
Cited – Secretary of State for Trade and Industry v Langridge CA 1991
The lower court had dismissed a petition for a director disqualification because of the failure to comply with the ten day requirement in section 16.
Held: (Majority) The provisions of section 16 were directory only and not mandatory. . .
Cited – Secretary of State for Trade and Industry v McTighe CA 1997
Morritt LJ, giving the judgment of the court, distinguished between the conduct of two directors, disqualifying one for twelve years and the other for eight. He said: ‘The period for disqualification is a matter for the discretion of the judge . .
Cited – Cathie and Another v Secretary of State for Business, Innovation and Skills CA 1-Jun-2012
The directors appealed against disqualification orders made against them under the 1986 Act. Their company had become insolvent, owing substantial arrears of PAYE and NI contributions. The revenue had said that they had paid other creditors first. . .
Cited – Re Tech Textiles Ltd ChD 1998
A disqualified director sought leave under section 17 to act as a director or be concerned or take part in the management of 3 companies and was successful in respect of 1 company. Arden J looked at the statutory basis and observed that the purpose . .
Cited – Harris v Secretary of State for Business, Innovation and Skills ChD 9-Aug-2013
The claimant had offered an undertaking not to act as a company director for a period of time, to avoid applications for his disqualification. He now sought leave to act.
Held: The applicant had: ‘put forward ample evidence to justify a . .

Lists of cited by and citing cases may be incomplete.

Company

Leading Case

Updated: 09 November 2021; Ref: scu.182389

In re Brightlife Ltd: ChD 1987

Parties contractual freedom to be respected

A clause in a debenture gave a charge which provided that the chargor should not: ‘deal with its book or other debts or securities for money otherwise than in the ordinary course of getting in and realising the same which expression shall not authorise the selling, factoring or discounting . . of its book debts or other negotiable instruments’
Held: Whilst purporting to create a fixed charge over present and future book debts and imposing restrictions on the sale, factoring or discounting of book debts, the debenture did not require the chargor to pay them into an account with the chargee. Reference to a ‘first specific charge’ over book debts had to yield to the only conclusion from the rights in fact granted that the charge over book debts was a floating charge only.
Hoffmann J said: ‘But a floating charge is consistent with some restriction upon the company’s freedom to deal with its assets. For example, floating charges commonly contain a prohibition upon the creation of other charges ranking prior to or pari passu with the floating charge. Such dealings would otherwise be open to a company in the ordinary course of its business.’ and
‘I do not think that the bank balance falls within the term ‘book debts or other debts’ as it is used in the debenture. It is true that the relationship between banker and customer is one of debtor and creditor. It would not therefore be legally inaccurate to describe a credit balance with a banker as a debt. But this would not be a natural usage for a businessman or accountant. He would ordinarily describe it as ‘cash at bank’: compare the balance sheet formats in Part I, section B of Schedule 4 to the Companies Act 1985′ and ‘In this debenture, the significant feature is that Brightlife was free to collect its debts and pay the proceeds into its bank account. Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge.’
The significant feature of the Brightlife debenture was that the company was free to collect its debts and pay the proceeds into its bank account: ‘Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge.’
The company had given a charge over its book debts to te bank. The bank asserted that it was a first specific charge and purported to restrict the company’s right to factor its debts without the bank’s consent. A debenture holder then gave notice to fix the charge, but only a week before a voluntary winding up resolution.
Held: The charge on the book debts was a floating charge, and having crystallised a week before, it had priority over the other debts.
Although clause 3(A)(ii)(a) referred to a ‘first specific charge’ over book debts and others, ‘the rights over the debts created by the debenture were in my judgment such as to be categorised in law as a floating charge.’ . . And a ‘significant feature is that Brightlife was free to collect its debts and pay the proceeds into its bank account. Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgment a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge . . I do not think that it is open to the courts to restrict the contractual freedom of parties to a floating charge on such grounds. The floating charge was invented by Victorian lawyers to enable manufacturing and trading companies to raise loan capital on debentures . . without inhibiting its ability to trade. . The public interest requires a balancing of the advantages to the economy of facilitating the borrowing of money against the possibility of injustice to unsecured creditors . . arguments for and against the floating charge are matters for Parliament rather than the courts.’

Hoffmann J
[1987] 1 Ch 200, [1988] VLY 306
England and Wales
Citing:
Distinguished – Siebe Gorman and Co Ltd v Barclays Bank Ltd ChD 1979
It was possible to create a fixed charge over present and future book debts and on its true construction, the debenture granted to Barclays Bank Ltd in this case had done so. If the chargor of book debts, having collected the book debts, ‘[had] had . .
Distinguished – In Re Keenan Bros Ltd 1986
(Supreme Court of the Republic of Ireland) A debenture conferred a fixed charge on book debts. It specifically provided that withdrawals from the account to which the proceeds of the book debts had to be credited might only be made with the prior . .

Cited by:
Applied – Agnew and Kevin James Bearsley v The Commissioner of Inland Revenue, and Official Assignee for the Estate In Bankruptcy of Bruce William Birtwhistle and Mark Leslie Birtwhistle PC 5-Jun-2001
(New Zealand) A charge had been given by a company over its book debts. The charge was expressed to create a fixed charge over debts uncollected when a receiver was appointed, so that on collection they became payable to the bank. Until the receiver . .
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 . .
Considered – Re: A Company (No. 005009 of 1987), ex parte Copp ChD 1988
MC Bacon Ltd had borrowed money from a bank. The loan was unsecured. The company got into financial difficulty. The bank commissioned a report on the company’s financial affairs; and insisted on the grant of a debenture to secure the company’s . .
Applied – Re: New Bullas Trading Ltd ChD 5-Apr-1993
A fixed charge in a debenture without restrictions on dealing with monies received must be a floating charge. . .
Cited – Buchler and another (as joint liquidators of Leyland DAF Limited) v Talbot and another (as joint administrative receivers of Leyland DAF Limited) and Stichting Ofasec and others HL 4-Mar-2004
The liquidator sought to recover his expenses from assets charged under a floating charge in priority to the chargee.
Held: Barleycorn was decided in error. The liquidators costs incurred in an insolvent winding up were not to be charged . .
Cited – National Westminster Bank Plc v Spectrum Plus Ltd; In re Spectrum Plus CA 26-May-2004
The court was asked whether a charge given over book debts in a debenture was floating or fixed.
Held: Since the charge asserted some control over receipt of the payments, it was a fixed charge. Upon payment into the account, title to the . .
Cited – Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
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 . .

Lists of cited by and citing cases may be incomplete.

Banking, Company, Insolvency

Leading Case

Updated: 09 November 2021; Ref: scu.181234

In Re Smith and Fawcett Ltd: CA 1942

Directors to act Without Collateral Purpose

The primary duty of a director imposed by the general law is that he should act in what he considers to be the best interests of the company, and not for any collateral purpose. That duty is a subjective one that depends on the directors exercising their discretionary powers bona fide in what they, and not the court, consider to be in the interests of the company. Lord Greene MR said: ‘The principles to be applied in cases where the articles of a company confer a discretion on directors . . are, for present purposes, free from doubt. They must exercise their discretion bona fide in what they consider – not what a court may consider – is in the interests of the company, and not for any collateral purpose . . The question, therefore, simply is whether on the true construction of the particular article the directors are limited by anything except their bona fide view as to the interests of the company.’
As to the practice of making findings as to a director’s motives by way of affidavit evidence, Lord Greene MR said: ‘I strongly dislike being asked on affidavit evidence alone to draw inferences as to the bona fides or mala fides of the actors. If it is desired to charge a deponent with having given an account of his motives and his reasons which is not the true account, then the person on whom the burden of proof lies shall take the ordinary and obvious course of requiring the deponent to submit himself to cross-examination. That does not mean that it is illegitimate in a proper case to draw inferences as to bona fides or mala fides in cases where there is on the face of the affidavit sufficient justification for doing so, but where the oath of the deponent is before the court, as it is here, and the only grounds on which the court is asked to disbelieve it are matters of inference, many of them of a doubtful character, I decline to give to those suggestions the weight which is desired.’

Lord Greene MR
[1942] Ch 304, [1942] 1 All ER 542
England and Wales
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. . .
Cited – Cayne and Another v Global Natural Resources Plc ChD 12-Aug-1982
The court gave this example of the legitimate use of the directors’ powers to defeat a take-over: ‘If Company A and Company B are in business competition, and Company A acquires a large holding of shares in Company B with the object of running . .
Cited – Criterion Properties Plc v Stratford UK Properties and others CA 18-Dec-2002
The parties came together in a limited partnership to develop property. The appeal was against a refusal to grant summary judgment on a claim that one party had been induced to enter the contract by a fraudulent misrepresentation.
Held: In . .
Cited – 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 – Mactra Properties Ltd v Morshead Mansions Ltd and Others ChD 6-Nov-2008
The block of flats was owned by a company in which each tenant owned one share. The claimant company had bought twenty five flats, and now sought to sell them, but the freeholder refused to register share transfers saying that the claimant was in . .
Cited – Lloyd v McMahon HL 12-Mar-1987
The district auditor had issued a certificate under the 1982 Act surcharging the appellant councillors in the sum of 106,103, pounds being the amount of a loss incurred or deficiency caused, as the auditor found, by their wilful misconduct.
Company, Litigation Practice

Leading Case

Updated: 09 November 2021; Ref: scu.181877

Kinsela v Russell Kinsela Pty Ltd (In Liq): 1986

(New South Wales) If directors act in a way to promote their own interest or promote the private interest of others, they have not acted in the best interests of the company.
Street CJ said: ‘In a solvent company the proprietary interests of the shareholders entitle them as a general body to be regarded as the company when questions of the duty of directors arise. If, as a general body, they authorise or ratify a particular action of the directors, there can be no challenge to the validity of what the directors have done. But where a company is insolvent the interests of the creditors intrude. They become prospectively entitled, through the mechanism of liquidation, to displace the power of the shareholders and directors to deal with the company’s assets. It is in a practical sense their assets and not the shareholders’ assets that, through the medium of the company, are under the management of the directors pending either liquidation, return to solvency, or the imposition of some alternative administration.’

Street CJ, Hope and McHugh JJA
(1986) 4 NSWLR 722, (1986) 4 ACLC 215, 10 ACLR 395
Cited by:
Approved – West Mercia Safetywear Ltd v Dodds CA 1988
If a company continues to trade whilst insolvent but in the expectation that it would return to profitability, it should be regarded as trading not for the benefit of the shareholders, but for the creditors also. If there is a possibility of . .

Lists of cited by and citing cases may be incomplete.

Company, Commonwealth

Leading Case

Updated: 09 November 2021; Ref: scu.565823

Secretary of State for Business Innovation and Skills v Aaron and Others: ChD 10 Dec 2009

The claimant sought a disqualification after the defendants had been directors of a company mis-selling Structured Capital at Risk products. The FSA had reported that they had been negligent.
Held: ‘I do not have to decide whether or not the defendants were negligent. The question is whether their risk ratings were so flawed that they could not sensibly be arrived at. I do not think that DMA’s evaluation can be considered to have been so obviously incompetent that it would by itself render these defendants unfit to be concerned in the management of a company.’ However marketing considerations had overtaken the need to explain the underlying risks properly, and the products were mis-sold. This conclusion was not dependent on the report: ‘It flies in the face of common sense to say that these two individuals were, despite all this, fit to act as directors. While I stress that there was no dishonesty, it seems to me that the wrong balance was struck between marketing considerations and the interests of the consumer. That is where lack of commercial probity comes in and that is the conduct from which the public needs to be protected.’

Proudman J
[2009] EWHC 3263 (Ch)
Bailii
Company Directors Disqualification Act 1986 7
England and Wales
Citing:
Cited – In re Sevenoaks Stationers (Retail) Ltd CA 1990
The court gave guidelines for the periods of disqualification to be applied for company directors under the Act. The maximum period of ten years should be reserved for only the most serious of cases. Periods of two to five years should apply to . .
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 – In re Lo-Line Electric Motors Ltd 1988
When considering the filing of additional evidence changing allegations made under the 1986 Act, the paramount requirement is that the director facing disqualification must know the charge he has to meet. As to the standard of misbehaviour required . .
Cited – In re Grayan Building Services Ltd CA 1995
The degree to which an appellate court will be willing to substitute its own judgment for that of the tribunal will vary with the nature of the question. Hoffmann LJ said: ‘The concept of limited liability and the sophistication of our corporate law . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 09 November 2021; Ref: scu.383827

Lennard’s Carrying Company Limited v Asiatic Petroleum Company Limited: HL 1915

The House was asked as to when the acts of an individual became those of his employer under section 502 (‘any loss or damage happening without (the ship owner’s) actual fault or privity’).
Held: Viscount Haldane LC said: ‘It must be upon the true construction of that section in such a case as the present one that the fault or privity is the fault or privity of somebody who is not merely a servant or agent for whom the company is liable on the footing of respondeat superior but somebody for whom the company is liable because his action is the very action of the company itself. It is not enough that the fault should be the fault of a servant in order to exonerate the owner, the fault must also be one which is not the fault of the owner, or a fault to which the owner is not privy . .’
Viscount Haldane LC said: ‘My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation. That person may be under the direction of the shareholders in general meeting; that person may be the board of directors itself, or it may be, and in some companies it is so, that that person has an authority co-ordinate with the board of directors given to him under the articles of association, and is appointed by the general meeting of the company, and can only be removed by the general meeting of the company.’

Viscount Haldane LC
[1915] AC 705, [1914-15] All ER 280
Merchant Shipping Act 1894 502
England and Wales
Cited by:
Cited – HL Bolton (Engineering) Co Ltd v TJ Graham and Sons Ltd CA 1957
The landlord asserted that a tenancy should not be renewed and claimed to have held the freehold for more than 5 years.
Held: The Landlord had only become the reversioner to the lease after accepting a surrender of the head lease. The Act . .
Cited – KR and others v Royal and Sun Alliance Plc CA 3-Nov-2006
The insurer appealed findings of liability under the 1930 Act. Claims had been made for damages for child abuse in a residential home, whom they insured. The home had become insolvent, and the claimants had pursued the insurer.
Held: The . .
Cited – Tesco Supermarkets Ltd v Nattrass HL 31-Mar-1971
Identification of Company’s Directing Mind
In a prosecution under the 1968 Act, the court discussed how to identify the directing mind and will of a company, and whether employees remained liable when proper instructions had been given to those in charge of a local store.
Held: ‘In 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 – Ferguson v British Gas Trading Ltd CA 10-Feb-2009
Harassment to Criminal Level needed to Convict
The claimant had been a customer of the defendant, but had moved to another supplier. She was then subjected to a constant stream of threatening letters which she could not stop despite re-assurances and complaints. The defendant now appealed . .
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 . .
Cited – A Ltd and Othersi, Regina v CACD 28-Jul-2016
The Serious Fraud Office appealed against rulings on the admission of evidence after its exclusion under section 78.
Held: The appeal was allowed. The appeal had been brought within time and could proceed. Police and Criminal Evidence Act . .

Lists of cited by and citing cases may be incomplete.

Company, Transport

Leading Case

Updated: 09 November 2021; Ref: scu.245858

Goknur v Aytacli: CA 13 Jul 2021

Third Party Costs – Director of Insolvent Company

(Organic Village) The Court considered the circumstances Limited in which a director and shareholder of an insolvent company may be personally liable for some or all of that company’s costs liabilities incurred in unsuccessful litigation, pursuant to s.51 of the Senior Courts Act 1981. The particular question is whether it is enough to show that the director controlled and funded the company’s conduct of the litigation or whether, in order for a s.51 order to be made, it is also necessary to show either that he or she benefited (or sought to benefit) personally from that litigation, or acted in bad faith or was responsible for impropriety of some kind.
Held: The appeal failed. The absence of either personal benefit to Mr Aytacli, or bad faith/impropriety on his part, meant that the judge was right to conclude that it would be unjust to make a s.51 order.
‘For those who believe that most civil litigation does not end up being about the costs that were incurred in pursuing that same litigation in the first place, look away now.’
The court summarised the jurisdiction: ‘a) An order against a non-party is exceptional and it will only be made if it is just to do so in all the circumstances of the case (Gardiner, Dymocks, Threlfall).
b) The touchstone is whether, despite not being a party to the litigation, the director can fairly be described as ‘the real party to the litigation’ (Dymocks, Goodwood, Threlfall).
c) In the case of an insolvent company involved in litigation which has resulted in a costs liability that the company cannot pay, a director of that company may be made the subject of such an order. Although such instances will necessarily be rare (Taylor v Pace), s.51 orders may be made to avoid the injustice of an individual director hiding behind a corporate identity, so as to engage in risk-free litigation for his own purposes (North West Holdings). Such an order does not impinge on the principle of limited liability (Dymocks, Goodwood, Threlfall).
d) In order to assess whether the director was the real party to the litigation, the court may look to see if the director controlled or funded the company’s pursuit or defence of the litigation. But what will probably matter most in such a situation is whether it can be said that the individual director was seeking to benefit personally from the litigation. If the proceedings were pursued for the benefit of the company, then usually the company is the real party (Metalloy). But if the company’s stance was dictated by the real or perceived benefit to the individual director (whether financial, reputational or otherwise), then it might be said that the director, not the company, was the ‘real party’, and could justly be made the subject of a s.51 order (North West Holdings, Dymocks, Goodwood).
e) In this way, matters such as the control and/or funding of the litigation, and particularly the alleged personal benefit to the director of so doing, are helpful indicia as to whether or not a s.51 order would be just. But they remain merely elements of the guidance given by the authorities, not a checklist that needs to be completed in every case (SystemCare).
f) If the litigation was pursued or maintained for the benefit of the company, then common sense dictates that a party seeking a non-party costs order against the director will need to show some other reason why it is just to make such an order. That will commonly be some form of impropriety or bad faith on the part of the director in connection with the litigation (Symphony, Gardiner, Goodwood, Threlfall).
g) Such impropriety or bad faith will need to be of a serious nature (Gardiner, Threlfall) and, I would suggest, would ordinarily have to be causatively linked to the applicant unnecessarily incurring costs in the litigation.2

Coulson LJ
[2021] EWCA Civ 1037
Bailii, Judiary
Senior Courts Act 1981 51
England and Wales
Citing:
Appeal from – Goknur Gida Maddeleri Enerji Imalat Ithalat Ihracat Ticaret Ve Sanati AS (Goknur) v Organic Village Ltd QBD 12-Aug-2019
. .
Cited – Aiden Shipping Co Ltd v Interbulk Ltd (The ‘Vimeira’) HL 1986
Wide Application of Costs Against Third Party
A claim had been made against charterers by the ship owners, and in turn by the charterers against their sub-charterers. Notice of motion were issued after arbitration awards were not accepted. When heard, costs awards were made, which were now . .
Cited – Taylor v Pace Developments CA 1991
Lloyd LJ said: ‘There is only one immutable rule in relation to costs, and that is that there are no immutable rules.’
Lloyd LJ baulked at the suggestion that every director who funded and controlled litigation on behalf of an insolvent company . .
Cited – Symphony Group Plc v Hodgson CA 4-May-1993
Nine rules were set out for allowing a costs order against someone who is not a party to the action. Such orders should be exceptional. The normal rule is that witnesses in either civil or criminal proceedings enjoy immunity from any form of civil . .
Cited – Metalloy Supplies Ltd (In Liquidation) v MA (UK) Ltd CA 7-Oct-1996
A costs order against liquidator of company in litigation is only rarely to be given. The court should ask who is the ‘real’ party to the litigation.
Millett LJ said: ‘[An order] may be made in a wide variety of circumstances where the third . .
Cited – Gardiner v FX Music Limited ChD 27-Mar-2000
Geoffrey Vos QC faced an application for an order for costs against a third party. He reminded himself: ‘The court must ask whether, in all the circumstances, it is just to exercise the power under s.51 to make the non-party liable for the costs (or . .
Cited – Dymocks Franchise Systems (NSW) Pty Ltd v Todd and others (No. 2) PC 21-Jul-2004
PC (New Zealand) Costs were sought against a non-party, following an earlier determination by the Board.
Held: Jurisdiction to make such an order was not complete. Where the order sought was against a . .
Cited – Arklow Investments Ltd v Maclean 19-May-2000
(High Court of New Zealand) The court considered the potential personal responsibility of a directors for costs incurred by the company in litigation: ‘Where a person is a major shareholder and dominant director in a company which brings . .
Cited – Secretary of State for Trade and Industry v Blackhouse CA 26-Jan-2001
In Re North West Holdings PLC and Another
A non-party costs order was made against the director, because the defence to the petitions was not conducted in the bona fide belief that it was in the interests of the companies. Instead the director, . .
Cited – Goodwood Recoveries Ltd v Breen CA 19-Apr-2005
A claim against the defendant for money owed to someone else had been bought by the claimant of which Slater, a solicitor, was a director and shareholder. The claim was pursued in the name of the claimant by Slater as its solicitor and principal . .
Cited – Systemcare (UK) Ltd v Services Design Technology Ltd and Another CA 11-May-2011
The claimant having obtained judgment in an action against the defendant company when it was solvent, and the case having become disproportionate through the dishonest actions of the owner of the defendant, the defendant company then being put into . .
Cited – Mars UK Ltd v Teknowledge Ltd PatC 11-Jun-1999
The public policy defence of a right to repair by creation of ‘spare parts’ to a copyright infringement claim depended upon the right being so clear that no right thinking person would quarrel with it. An equitable duty of confidence falls on a . .
Cited – Housemaker Services Ltd and Another v Cole and Another ChD 26-Apr-2017
Appeal from limitation direction, and third party costs order: ‘in order to make it just to order a director to pay the costs of unsuccessful company litigation, it is necessary to show something more. This might be, for example, that the claim is . .
Cited – Threlfall v ECD Insight Ltd and Another CA 29-Oct-2013
. .

Lists of cited by and citing cases may be incomplete.

Costs, Company

Updated: 09 November 2021; Ref: scu.665593

MCA Records Inc and Another v Charly Records Ltd and others (No 5): CA 5 Oct 2001

The court discussed the personal liability of a director for torts committed by his company: ‘i) a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the governance of the company–that is to say, by voting at board meetings.
ii) there is no reason why a person who happens to be a director or controlling shareholder of a company should not be liable with the company as a joint tortfeasor if he is not exercising control though the constitutional organs of the company and the circumstances are such that he would be so liable if he were not a director or controlling shareholder. In other words, if, in relation to the wrongful acts which are the subject of complaint, the liability of the individual as a joint tortfeasor with the company arises from his participation or involvement in ways which go beyond the exercise of constitutional control, then there is no reason why the individual should escape liability because he could have procured those same acts through the exercise of constitutional control.
iii) liability as a joint tortfeasor may arise where the individual ‘intends and procures and shares a common design that the infringement takes place’.
iv) whether or not there is a separate tort of procuring an infringement of a statutory right, actionable at common law, an individual who does ‘intend, procure and share a common design’ that the infringement should take place may be liable as a joint tortfeasor.’ (Chadwick LJ)

Lord Justice Simon Brown, Lord Justice Chadwick And Lord Justice Tuckey
[2001] EWCA Civ 1441, [2002] FSR 26, [2002] BCC 650, [2002] ECDR 37, [2003] 1 BCLC 93, [2002] EMLR 1
Bailii
England and Wales
Citing:
See Also – MCA Records Inc v Charly Records Ltd and others (No 5) CA 29-Nov-2001
Thre had been an action for copyright and trade mark infringement. The court considered the personal liability of directors of the company for the costs of the action. . .
Cited – Unilever Plc v Gillette (UK) Limited CA 1989
Unilever claimed infringement of its patent. The court was asked whether there was a good arguable case against the United States parent company of the existing defendant sufficient to justify the parent company to be joined as a defendant and to . .
Cited – Townsend v Haworth CA 1875
The defendant sold chemicals to be used by the purchaser in infringement of patent and agreed to indemnify the purchaser if the patent should prove to be valid.
Held: Only the person who actually manufactures or sells infringing goods is the . .
Cited – The Koursk CA 1924
The navigators of two ships had committed two separate torts or one tort in which they were both tortfeasors.
Held: Three situations were identified where A might be jointly liable with B for B’s tortious act. Where A was master and B servant; . .
Cited – Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd 1924
The court looked at personal responsibility of the directors of a company for torts committed by the company: ‘Prima facie a managing director is not liable for tortious acts done by servants of the company unless he himself is privy to the acts, . .
Cited – Brooke v Bool 1928
Volunteer Was Joint Tortfeasor
A and B set out together to investigate the source of a gas leak which was B’s direct concern alone. A had come with him to help. Because B was too old to carry out a particular task, A carried it out instead. The means of investigation was . .
Cited – Lumley v Gye 1853
Inducing breach of contract is a Tort
An opera singer (Miss Wagner) and the defendant theatre owner were joint wrongdoers. They had a common design that the opera singer should break her contract with the plaintiff theatre owner, refuse to sing in the plaintiff’s theatre and instead . .
Cited – Belegging-en Exploitatiemaatschappij Lavender BV v Witten Industrial Diamonds Ltd 1979
The defendants sold diamond grit allegedly for the sole purpose of making grinding tools in which it was to be embedded in a resin bond as part of a grinding material patented by the plaintiffs.
Held: The defendants could not be infringers . .
Cited – Rainham Chemical Works Ltd (in liquidation) and others v Belvedere Fish Guano Co Ltd HL 1921
At a time of war, a process was invented where picric acid was manufactured from dinitrophenol (DNP) and nitrate of soda. DNP had been used mainly for the manufacture of dyes, and was a stable compound which did not explode easily. It was not in . .
Cited – PLG Research Ltd and Another v Ardon International Ltd and Others ChD 25-Nov-1994
A patent infingement claim was met by the assertion that the material covered had been disclosed before the patent had been obtained. The court was asked as to the test of whether the information in a claim had been disclosed. Aldous J said: ‘Mr. . .
Cited – C Evans and Sons Ltd v Spritebrand Ltd and another CA 1985
The court considered when a company director might be personally liable for acts of the company: ‘in order to make a director, other officer or employee of a company personally liable for the company’s tort, it is necessary to show either that he . .
Cited – CBS Songs Ltd v Amstrad Consumer Electronics Plc HL 12-May-1988
The plaintiffs as representatives sought to restrain Amstrad selling equipment with two cassette decks without taking precautions which would reasonably ensure that their copyrights would not be infringed by its users.
Held: Amstrad could only . .
Cited – Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing Co Inc 1978
(Federal Court of Appeal of Canada) The court described the question whether, and if so in what circumstances, a director should be liable with the company as a joint tortfeasor as ‘a very difficult question of policy.’ Mr Justice Le Dain: ‘On the . .
Cited – Standard Chartered Bank v Pakistan National Shipping Corporation, Seaways Maritime Ltd, SGS United Kingdom Ltd, Oakprime International Ltd, Arvind Mehra (No 2) CA 27-Jul-2000
Where a deceit was established leading to an award of damages, that award of damages was not capable of being reduced under the 1949 Act through a contribution to the loss occasioned by the claimant’s own behaviour, where that behaviour did not fall . .
Cited – Williams and Another v Natural Life Health Foods Ltd and Another HL 30-Apr-1998
A company director was not personally reliable in negligence for bad advice given by him as director unless it could clearly be shown that he had willingly accepted such personal responsibility. A special relationship involving an assumption of . .
Appeal from – MCA Records Inc and Another v Charly Records Ltd and others ChD 22-Mar-2000
A licence to record is a one-off event authorising recording for the period of the licence. . .

Cited by:
See Also – MCA Records Inc v Charly Records Ltd and others (No 5) CA 29-Nov-2001
Thre had been an action for copyright and trade mark infringement. The court considered the personal liability of directors of the company for the costs of the action. . .
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 . .
Cited – Anderson Antiques (UK) Ltd v Anderson Wharf (Hull) Ltd and Another ChD 23-May-2007
anderson_andersonChD2008
The claimants owned land against which they said, the defendant had wrongfully registered notices. They sought removal of the notices, damages, and an injunction to prevent further notices being registered. The first defendant asserted an oral . .
Cited – Global Projects Management Ltd v Citigroup Inc and Others ChD 17-Oct-2005
GPM had acquired an internet domain name ‘citigroup.co.uk’. Citigroup alleged passing off and trade mark infringement. The claimant complained of an unjustified threat. The defendant counterclaimed, and sought summary judgment.
Held: The . .
Applied – Future Publishing Ltd v The Edge Interactive Media Inc and Others ChD 13-Jun-2011
The claimant said that the defendant had infriged its rights by the use of its logo on their publications. . .

Lists of cited by and citing cases may be incomplete.

Intellectual Property, Company

Leading Case

Updated: 09 November 2021; Ref: scu.201414

Macaura v Northern Assurance Company Limited: HL 1925

Macaura owned the large majority of shares in a limited company, trading in timber. The company also owed him substantial sums. He kept on the insurance of timber and other assets within the business but in his own name. When he came to claim, his claim was refused by the insurers.
Held: His appeal failed. An insurable interest in property could only arise where the insured held a legal or equitable interest in the insured property.
Neither a shareholder nor a simple creditor of a company had any insurable interest in any particular asset of the company because as such he had no legal or equitable interest in it.
Lord Buckmaster said: ‘Turning now to his position as shareholder, this must be independent of the extent of his share interest. If he were entitled to insure holding all the shares in the company, each shareholder would be equally entitled, if the shares were all in separate hands. Now, no shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein. He is entitled to a share in the profits while the company continues to carry on business and a share in the distribution of the surplus assets when the company is wound up. If he were at liberty to effect an insurance against loss by fire of any item of the company’s property, the extent of his insurable interest could only be measured by determining the extent to which his share in the ultimate distribution would be diminished by the loss of the asset – a calculation almost impossible to make. There is no means by which such an interest can be definitely measured and no standard which can be fixed of the loss against which the contract of insurance could be regarded as an indemnity . . In the present case, though it might be regarded as a moral certainty that the appellant would suffer loss if the timber which constituted the sole asset of the company were destroyed by fire, this moral certainty becomes dissipated and lost if the asset be regarded as only one in an innumerable number of items in a company’s assets and the shareholding interest be spread over a large number of individual shareholders.’ and ‘No shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein. He is entitled to a share in the profits while the company continues to carry on business and a share in the distribution of the surplus assets when the company is wound up.’
Lord Sumner also said that the appellant had no insurable interest: ‘It is clear that the appellant had no insurable interest in the timber described . . He had no lien or security over it and, though it lay on his land by his permission, he had no responsibility to its owner for its safety, nor was it there under any contract that enabled him to hold it for his debt. He owned almost all the shares in the company, and the company owed him a good deal of money, but, neither as creditor nor as shareholder, could he insure the company’s assets. The debt was not exposed to fire nor were the shares, and the fact that he was virtually the company’s only creditor, while the timber was its only asset, seems to me to make no difference. He stood in no ‘legal or equitable relation to’ the timber at all. He had no ‘concern in’ the subject insured. His relation was to the company, not its goods, and after the fire he was directly prejudiced by the paucity of the company’s assets, not by the fire.’
Lord Wrenbury said: ‘My Lords, this appeal may be disposed of by saying that the corporator even if he holds all the shares is not the corporation, and that neither he nor any creditor of the company has any property legal or equitable in the assets of the corporation.’

Lord Buckmaster, Lord Wrenbury, Lord Sumner
[1925] AC 619, (1925) 133 LT 152, [1925] All ER 51, [1925] AC 619, [1925] All ER Rep 51, 94 LJPC 154, 133 LT 152, 41 TLR 447, 69 Sol Jo 777, 31 Com Cas 10 HL
England and Wales
Cited by:
Distinguished – Sharp v Sphere Drake Insurance plc (The Moonacre) 1992
S, a retired businessman, had bought a vessel and insured it in his name, but registered it in the name of company, R. In the winter, the boat was laid up, but occupied by a workman who maintained it and kept it secure. The boat was destroyed by a . .
Cited – Feasey v Sun Life Assurance Company of Canada and Another: Steamship Mutual Underwriting Association (Bermuda) Ltd v Feasey ComC 17-May-2002
The fact that there was more than one insurance policy in place for the same interest would not preclude a claim under one of them. A mutual underwriting group insured members against personal injury and so forth through ‘lineslip’ policies. The . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .

Lists of cited by and citing cases may be incomplete.

Insurance, Company

Leading Case

Updated: 09 November 2021; Ref: scu.184482

In Re Selectmove Ltd: CA 21 Dec 1993

Promisse to Pay Tax due is not Consideration

The company appealed against an order for its winding up, saying that the debt was disputed, an accomodation having been reached with the Revenue.
Held: The court declined to regard a promise to the Revenue by a company to pay its existing liabilities by instalments and future liabilities when they fell due as good consideration for an alleged promise by the Revenue not to put the company into liquidation. The Inland Revenue is not bound by acceptance of payment by instalments – no additional consideration having been given by the debtor. Silence is not alone to be taken as acceptance of an offer.

Balcombe LJ, Stuart Smit LJ, Peter Gibson LJ
Times 13-Jan-1994, Ind Summary 17-Jan-1994, [1995] 1 WLR 474, [1993] EWCA Civ 8, [1995] STC 406, [1995] 2 All ER 531
Bailii
England and Wales
Citing:
Not followed – Williams v Roffey Brothers and Nicholls (Contractors) Ltd CA 23-Nov-1989
The defendant subcontracted some of its work under a building contract to the plaintiff at a price which left him in financial difficulty and there was a risk that the work would not be completed by the plaintiff. The defendant agreed to make . .
Cited – Pinnel’s Case, Penny v Core CCP 1602
Payment of Lesser Sum Not Satisfaction
(Court of Common Pleas) The payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole. The gift of a horse, hawk, robe, etc., in satisfaction, is good. Payment of part before the day and acceptance may . .
Applied – Foakes v Beer HL 16-May-1884
Mrs Beer had obtained judgment against Dr Foakes for andpound;2,090 19s. He asked for time to pay and they agreed with him, acknowledging the debt, and paying part immediately and undertaking to pay the balance over a period of time. In . .
Cited – Stonegate Securities Ltd v Gregory CA 1980
The practice of the Companies Court is to dismiss a creditor’s petition based on a debt which is disputed by the company in good faith and on substantial grounds. Buckley LJ said: ‘If the Company in good faith and on substantial grounds disputes any . .
Cited – Allied Marine Ltd v Vale do Rio Doce SA (The Leonidas D) CA 1985
One party sought to construct an agreement to abandon an ongoing, if stalled, arbitration out of mere silence.
Held: Robert Goff LJ said that silence will not normally amount to acceptance of an offer since acceptance cannot be inferred from . .
Cited – Gebr. van Weelde Scheepvaartkantor B.V. v Cia. Naviera Sea Orient S.A. ChD 1985
Evans J considered the significance of silence in acceptance of a contractual offer: ‘The significance of silence, as a matter of law, may also be different when there is an express undertaking or an implied obligation to speak, in the special . .
Cited – Stilk v Myrick KBD 16-Dec-1809
No Obligation Incurred without Consideration
The plaintiff agreed to sail with the defendant on a voyage being paid pounds 5.00 a month. Two crew deserted and the captain asked the remainder to do their work sharing the wages saved. The plaintiff sought the additional sum above the articled . .
Cited – Vanbergen v St Edmunds Properties Ltd CA 1933
Where a variation to a contract agreed upon enables one party to alter its performance under the existing agreement, for it to amount to consideration it must be of some benefit to the other party, and if the variation is introduced entirely for the . .
Cited – D and C Builders Ltd v Rees CA 1966
The plaintiff builders had been chasing payment of their undisputed invoice. Knowing that the builders were in financial difficulties, the defendant offered rather less, saying that if it was not accepted, she would pay nothing. She made the payment . .
Cited – The Magnavox Electronics Company Limited v Hall (HM Inspector of Taxes) 1986
. .
Cited – Armagas Ltd v Mundogas SA (‘The Ocean Frost’) CA 1985
Proof of corruption not needed for bribe
In establishing that money was paid as an improper inducement or bribe, proof of corruptness or a corrupt motive was unnecessary.
When a court looks at a decision of a judge at first instance, the court stressed the need to look at the . .

Cited by:
Cited – Collier v P and M J Wright (Holdings) Ltd CA 14-Dec-2007
Agreement for payment by joint debtor not contract
The claimant appealed against refusal of an order to set aside a statutory demand. He said that he had compromised a claim by the creditors. He argued for an extension to the Rule in Pinnel’s case, so that where a debtor agrees to pay part of a . .
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 – Rock Advertising Ltd v MWB Business Exchange Centres Ltd SC 16-May-2018
The parties disputed whether a contract (licence to occupy an office) had been varied by an oral agreement, where the terms prohibited such.
Held: The ‘no oral variation’ clause applied. Such clauses were in common commercial use and served a . .

Lists of cited by and citing cases may be incomplete.

Contract, Company

Leading Case

Updated: 09 November 2021; Ref: scu.82189

In re Racal Communications Ltd; In Re a Company: HL 3 Jul 1980

Court of Appeal’s powers limited to those Given

The jurisdiction of the Court of Appeal is wholly statutory; it is appellate only. The court has no original jurisdiction. It has no jurisdiction itself to entertain any original application for judicial review; it has appellate jurisdiction over judgments and orders of the High Court made by that court on applications for judicial review: ‘There is in my view, however, also an obvious distinction between jurisdiction conferred by a statute on a court of law of limited jurisdiction to decide a defined question finally and conclusively or unappealable, and a similar jurisdiction conferred on the High Court or a judge of the High Court acting in his judicial capacity. The High Court is not a court of limited jurisdiction and its constitutional role includes the interpretation of written laws. There is thus no room for the inference that Parliament did not intend the High Court or the judge of the High Court acting in his judicial capacity to be entitled and, indeed, required to construe the words of the statute by which the question submitted to his decision was defined. There is simply no room for error going to his jurisdiction, nor, as is conceded by counsel for the respondent, is there any room for judicial review. Judicial review is available as a remedy for mistakes of law made by inferior courts and tribunals only. Mistakes of law made by judges of the High Court acting in their capacity as such can be corrected only by means of appeal to an appellate court; and if, as in the instant case, the statute provides that the judge’s decision shall not be appealable, they cannot be corrected at all.’
Lord Diplock said: ‘The break-through made by Anisminic . . was that, as respects administrative tribunals and authorities, the old distinction between errors of law that went to jurisdiction and errors of law that did not, was for practical purposes abolished. Any error of law that could be shown to have been made by them in the course of reaching their decision on matters of fact or of administrative policy would result in their having asked themselves the wrong question with the result that the decision they reached would be a nullity.’ But there was: ‘no similar presumption that where a decision-making power is conferred by statute upon a court of law, Parliament did not intend to confer upon it power to decide questions of law as well as questions of fact. Whether it did or not and, in the case of inferior courts, what limits are imposed on the kinds of questions of law they are empowered to decide, depends upon the construction of the statute unencumbered by any such presumption. In the case of inferior courts where the decision of the court is made final and conclusive by the statute, this may involve the survival of those subtle distinctions formerly drawn between errors of law which go to jurisdiction and errors of law which do not that did so much to confuse English administrative law before Anisminic . . ; but upon any application for judicial review of a decision of an inferior court in a matter which involves, as so many do, interrelated questions of law, fact and degree the superior court conducting the review should not be astute to hold that Parliament did not intend the inferior court to have jurisdiction to decide for itself the meaning of ordinary words used in the statute to define the question which it has to decide.’

Lord Diplock, Lord Salmon, Lord Edmund-Davies, Lord Keith of Kinkel, Lord Scarman
[1981] AC 374, [1980] UKHL 5, [1980] 2 All ER 634, [1980] 3 WLR 181
Bailii
Supreme Court Act 1981 15, Companies Act 1948 441
England and Wales
Citing:
Cited – Regina v Medical Appeal Tribunal ex parte Gilmore; Re Gilmore’s Application CA 25-Feb-1957
The claimant had received two injuries resulting in his total blindness. He sought an order of certiorari against the respondent who had found only a 20% disability. The tribunal responded that its decision, under the Act was final.
Held: In . .
Majority Overruled – Pearlman v Keepers and Governors of Harrow School CA 14-Jul-1978
The court considered the finality of decision of a county court judge regarding the interpretation of the phrase ‘structural alteration’ in the 1974 Act. Paragraph 2 (2) of Schedule 8 provided that the determination of the county court judge ‘shall . .
Cited – Deighton v Cockle CA 2-Dec-1911
Where, an order haying been obtained for judgment under Order xiv., judgment is not signed until more than twelve months afterwards, the case does not come within Order lxiv., r. 13, and therefore it is not necessary that the notice of intention to . .
Cited – Anisminic Ltd v Foreign Compensation Commission HL 17-Dec-1968
There are no degrees of nullity
The plaintiffs had owned mining property in Egypt. Their interests were damaged and or sequestrated and they sought compensation from the Respondent Commission. The plaintiffs brought an action for the declaration rejecting their claims was a . .

Cited by:
Cited – Kemper Reinsurance Company v The Minister of Finance and others PC 5-May-1998
(Bermuda) An appeal Court did have jurisdiction to hear an appeal against the discharge of leave to apply for certiorari order, since this was outside scope of the rule in Lane v Esdaille.
Lord Hoffmann said: ‘Nevertheless, the limited nature . .
Cited – G v Secretary of State for the Home Department (Interim Decision) CA 9-Mar-2004
A certificate had been granted by the Home Secretary that the applicant was suspected of terrorism, and he had accordingly been detained under special procedures. When his case had come before the Special Immigration Appeal Tribunal, they had . .
Applied – Westminster City Council v O’Reilly and others CA 1-Jul-2003
The defendant sought to appeal against a decision of the High Court on a case stated by the Magistrates.
Held: A decision by the High Court on an appeal by way of case stated from the Magistrates was final, and no further appeal lay to the . .
Cited – Regina (G) v Immigration Appeal Tribunal; Regina (M) v Immigration Appeal Tribunal Admn 25-Mar-2004
The applicants sought judicial review of the Immigration Appeal Tribunal’s refusal of leave to appeal. The court had to decide whether such a right survived section 101 of the 2001 Act.
Held: The right to have a judicial review could only be . .
Cited – Sinclair Gardens Investments (Kensington) Ltd, Regina (on the Application of) v The Lands Tribunal CA 8-Nov-2005
The claimant appealed against a refusal of judicial review of a decision of the Lands Tribunal.
Held: A decision of the Lands Tribunal could only be judicially reviewed in exceptional cases where there was either a jurisdictional error or a . .
Cited – Regina v Manchester Crown Court ex parte Williams and Simpson 1990
If an application to prefer a Voluntary Bill is successful there is no right of appeal, and nor can the decision be made subject to judicial review. . .
Cited – Lumba (WL) v Secretary of State for The Home Department SC 23-Mar-2011
The claimants had been detained under the 1971 Act, after completing sentences of imprisonment pending their return to their home countries under deportations recommended by the judges at trial, or chosen by the respondent. They challenged as . .
Cited – Evans and Another, Regina (on The Application of) v Attorney General SC 26-Mar-2015
The Attorney General appealed against a decision for the release under the Act and Regulations of letters from HRH The Prince of Wales to various ministers and government departments.
Held: The appeal failed (Majority). The A-G had not been . .
Cited – Regina v Hull University Visitor, Ex parte Page; Regina v Lord President of the Privy Council ex Parte Page HL 3-Dec-1992
The decisions of University Visitors are subject to judicial review in that they exercise a public function. English law no longer draws a distinction between jurisdictional errors of law and non-jurisdictional errors of law.
However, the . .
Cited – Lee v Ashers Baking Company Ltd and Others SC 10-Oct-2018
The court considered whether a power of appeal to the existed.
Held: A power did exist under FETO, and the CANI having mistakenly excluded a power to appeal the Supreme Court could nevertheless hear it. Both appeals were allowed. . .

Lists of cited by and citing cases may be incomplete.

Litigation Practice, Company, Constitutional

Leading Case

Updated: 09 November 2021; Ref: scu.182917

Foster v McNicol and Another: QBD 28 Jul 2016

Incumbent Labour leader did not need nominations

The claimant challenged a decision of the National Executive Committee of the Labour Party to allow its present Leader to stand in the leadership election challenging his position without the need for him to submit first the otherwise standard nominations from a certain percentage of the party.
Held: The challenge failed. Properly read, the rules required nominations from a challenger only. As the incumbent, he was not a challenger, and was not to be required to go through the procedure requiring nomination.
Foskett J summarised the effect of the rules: ‘(a) where there is a vacancy for Leader, anyone who wishes to be considered for the position would require nominations from 15% of the combined Commons members of the PLP and EPLP in order to be a candidate in the election;
(b) where there is no vacancy (because the Leader is still in place), anyone who wishes to challenge the Leader’s right to continue as Leader would need nominations from 20% of the combined Commons members of the PLP and EPLP in order to mount such a challenge;
(c) the Leader would not in that situation (where there is no vacancy) be someone who was a ‘challenger’ for the leadership and, accordingly, would require no nominations in order to compete in the ballot to retain his/her position as Leader.’
It was argued that in attempting to oust the jurisdiction of the court, that part f the rules were void.
Held: Since the question was not directly in issue, a proper resolution must await a case raising it more directly: ‘ because of the court’s reluctance to be drawn into any kind of political debate, I do accept unreservedly that where a decision, certainly about the application of any rule that is ambiguous, requires consideration of background material beyond the precise words used in the rule that has significant political connotations, the NEC may well be better placed than the court to consider those implications and to decide accordingly. In this case, had it been necessary to consider the competing contentions about what were said by each side to be the ‘absurd’ and ‘obviously unintended’ consequences arising from the acceptance of the other side’s view of the meaning of Clause II.B.2(ii), the court would have found itself in the midst of what Mr Henderson correctly characterised as ‘intensely political’ considerations. Because the problem has not arisen, it is not necessary to speculate on what might have been the result, but I highlight the issue because it brings clearly and vividly into focus the importance of recognising the vital dividing line between the world of politics and the world of the law.’

Foskett J
[2016] EWHC 1966 (QB)
Bailii, Judiciary Summmary, Judiciary
England and Wales
Citing:
Cited – Choudry and others v Triesman ChD 31-Mar-2003
The applicants sought an order requiring the respondent general secretary of the Labour Party to allow them to stand as candidates for the party in the forthcoming local elections. After allegations about the way in which selection had been carried . .
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 – Bank of Credit and Commerce International SA v Ali, Khan and others (No 1); BCCI v Ali HL 1-Mar-2001
Cere Needed Releasing Future Claims
A compromise agreement which appeared to claim to settle all outstanding claims between the employee and employer, did not prevent the employee later claiming for stigma losses where, at the time of the agreement, the circumstances which might lead . .
Cited – Arnold v Britton and Others SC 10-Jun-2015
Absurdity did not defeat a clear clause
A standard lease of plots on a caravan park, contained a provision which appeared to increase the rent by 10% in each year. The tenants argued that such a substantial increase could not have been intended.
Held: The tenants’ appeal failed . .
Cited – Lee v Showmens Guild of Great Britain CA 1952
Decisions of inferior tribunals, including arbitrators, were reviewable on the basis of general error of law on record for which certiorari might issue. A decision may be reviewable where there was no evidence supporting particular conclusions.
Cited – Baker v Jones 1954
There was a dispute within an unincorporated weightlifting association about an alleged misuse of its funds.
Held: Words in an agreement are void to the extent that they seek to oust the jurisdiction of the court.
Lynsey J said: ‘The . .
Cited – Leigh v National Union of Railwaymen 1970
. .
Cited – Jacques v Amalgamated Union of Engineering Workers 1986
The rules of a Trades Union are not to be construed as if they were a statute but are ‘to be given a reasonable interpretation which accords with their intended meaning; bearing in mind their authorship, their purpose and the readership to which . .
Cited – British Equity v Goring CA 1997
Roskill LJ considered the ‘inelegant draftsmanship’ of a trades union’s rules, saying: ‘Some reliance was placed upon the differing and somewhat indiscriminate use of words such as ‘motion,’ ‘resolution’ and ‘questions’ in the various rules as . .

Lists of cited by and citing cases may be incomplete.

Company, Contract, Elections

Leading Case

Updated: 09 November 2021; Ref: scu.567799

The Crown Prosecution Service v Aquila Advisory Ltd: CA 9 Apr 2019

The issue on this appeal was whether the Crown Prosecution Service had a claim under a confiscation order which it could enforce against the identified proceeds of a fraud in priority to the proprietary claim of a company whose directors were the chief engineers of the fraud.

[2019] EWCA Civ 588
Bailii
England and Wales
Cited by:
Appeal from (CA) – Crown Prosecution Service v Aquila Advisory Ltd SC 3-Nov-2021
. .

Lists of cited by and citing cases may be incomplete.

Criminal Sentencing, Company

Updated: 09 November 2021; Ref: scu.635642

Regina v Schildkamp: HL 1971

The defendant was accused of defrauding the company’s creditors.
Held: Not guilty. When interpreting a statute, the words of a heading cannot have equal weight with the words of the Act. The courts sometimes have to fill lacunae in legislation. Punctuation could be used as aids in cases of ambiguity as could the long title of the Act, headings and side note. Titles and cross-headings need to be treated with caution because they are not normally directly considered by Parliament and whilst they ought to indicate the scope of the sections which follow, there is always the possibility that the scope of one of these sections may have been widened, for example by amendment.
Lord Upjohn said: ‘The argument of counsel for the appellant was straightforward. Reading subsection (3) he submits truly that its terms are perfectly clear and simple. There is no ambiguity; the subsection clearly applies so as to create an offence on the part of a person knowingly carrying on a business – with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, and the circumstance that the company may subsequently have been wound up is quite irrelevant. The subsection plainly applies as a matter of language to the case where there has been no subsequent winding up. Looking at that subsection alone, I agree. Naturally he relies upon the contrast between subsection (1) where there is a reference to winding up and subsection (3) where there is not; a point to which I shall return later.
‘But, my Lords, this, in my opinion, is the wrong approach to the construction of an Act of Parliament. The task of the court is to ascertain the intention of Parliament; you cannot look at a section, still less a subsection, in isolation, to ascertain that intention; you must look at all the admissible surrounding circumstances before starting to construe the Act. The principle was stated by Lord Simonds in Attorney-General v. Prince Ernest Augustus of Hanover [1957] A.C. 436, 461:
‘For words, and particularly general words, cannot be read in isolation: their colour and content are derived from their context. So it is that I conceive it to be my right and duty to examine every word of a statute in its context, and I use ‘context’ in its widest sense, which I have already indicated as including not only other enacting provisions of the same statute, but its preamble, the existing state of the law, other statutes in pari materia, and the mischief which I can, by those other legitimate means, discern the statute was intended to remedy.’
‘So I look to the Companies Act, 1948, as a whole and the very first thing that I notice from the Long Title is that it is a consolidation Act. Therefore, bearing in mind that a consolidation Act is presumed not to alter the law, it becomes material to trace this subsection to its original source.’
Otherwise: Director of Public Prosecutions v Schildkamp
‘A side-note is a poor guide to the scope of a section, for it can do no more than indicate the main subject with which the section deals.’ though: ‘…I can conceive of cases where very rarely it might throw some light on the intentions of Parliament just as a punctuation mark.’

Upjohn L, Lord Reid
[1971] AC 1
Companies Act 1948
England and Wales
Citing:
Approved – Attorney-General v Prince Earnest Augustus of Hanover HL 1957
‘legislative antecedents’ may in some circumstances constitute relevant background for the interpretation of statutes in pari materia. Words in a preamble cannot of themselves restrict the scope of enacting words, where the latter are wider or more . .

Cited by:
Mentioned – Amiri Flight Authority v BAE Systems Plc CA 17-Oct-2003
The appellant had contracted to purchase maintenance from the defendant of aircraft it had also purchased from them. They sought damages for negligence, saying the defendants had failed to prevent a known risk of corrosion. The defendants argued . .
Cited – Green, Regina (on the Application of) v The City of Westminster Magistrates’ Court, Thoday, Thompson Admn 5-Dec-2007
The claimant appealed from the refusal by the magistrate to issue summonses for the prosecution for blashemous libel of the Director General of the BBC and the producers of a show entitled ‘Jerry Springer – The Opera.’
Held: The gist of the . .
Cited – Regina v Secretary of State for the Environment Transport and the Regions and another, ex parte Spath Holme Limited HL 7-Dec-2000
The section in the 1985 Act created a power to prevent rent increases for tenancies of dwelling-houses for purposes including the alleviation of perceived hardship. Accordingly the Secretary of State could issue regulations whose effect was to limit . .

Lists of cited by and citing cases may be incomplete.

Crime, Litigation Practice, Company, Constitutional

Leading Case

Updated: 09 November 2021; Ref: scu.186852

Crown Prosecution Service v Aquila Advisory Ltd: SC 3 Nov 2021

Lord Lloyd-Jones, Lord Sales, Lord Burrows, Lord Stephens, Lady Rose
[2021] UKSC 49
Bailii, Bailii summary, Bailii Issues and Facts
England and Wales
Citing:
Appeal from (CA) – The Crown Prosecution Service v Aquila Advisory Ltd CA 9-Apr-2019
The issue on this appeal was whether the Crown Prosecution Service had a claim under a confiscation order which it could enforce against the identified proceeds of a fraud in priority to the proprietary claim of a company whose directors were the . .
Cited – FHR European Ventures Llp and Others v Cedar Capital Partners Llc SC 16-Jul-2014
Approprietary remedy against Fraudulent Agent
The Court was asked whether a bribe or secret commission received by an agent is held by the agent on trust for his principal, or whether the principal merely has a claim for equitable compensation in a sum equal to the value of the bribe or . .

Lists of cited by and citing cases may be incomplete.

Company, Criminal Sentencing

Updated: 09 November 2021; Ref: scu.669014

Kosar v Bank of Scotland Plc (T/A Halifax): Admn 18 Jan 2011

The claimant appealed against an order which had rejected his claim against the defendant under the 1997 Act on the basis that a company could not commit the offence.
Held: The appeal was allowed. Under the 1978 Act, a ‘person’ included a body corporate unless the contrary was shown. The restriction created by section 7(5) applied only to the victim.

Silber J
[2011] EWHC 1050 (Admin), [2011] BCC 500
Bailii
Protection from Harassment Act 1997 7(5), Interpretation Act 1978
England and Wales

Crime, Company

Updated: 02 November 2021; Ref: scu.434859

Milroy v Lord: CA 26 Jul 1862

The donor executed a transfer of 50 shares. The shares were only transferable by entry in the books of the bank. No such transfer was ever made. The defendant had a power of attorney authorising him to transfer the donor’s shares and after the deed the donor gave him a further power of attorney authorising him to receive dividends on the shares. The donor died and an action was bought to enforce the transfer.
Held: The transaction was imperfect and incomplete and that the donor might have perfected it and completed it by a transfer.
Turner LJ said: ‘in order to render a voluntary settlement valid and effectual, the settlor must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him. He may of course do this by actually transferring the property to the persons for whom he intends to provide, and the provision will then be effectual, and it will be equally effectual if he transfers the property to a trustee for the purposes of the settlement, or declares that he himself holds it in trust for those purposes; and if the property be personal, the trust may, as I apprehend, be declared either in writing or by parol; but, in order to render the settlement binding, one or other of these modes must, as I understand the law of this Court, be resorted to, for there is no equity in this Court to perfect an imperfect gift. The cases I think go further to this extent, that if the settlement is intended to be effectuated by one of the modes to which I have referred, the Court will not give effect to it by applying another of those modes. If it is intended to take effect by transfer, the Court will not hold the intended transfer to operate as a declaration of trust, for then every imperfect instrument would be made effectual by being converted into a perfect trust. These are the principles by which, as I conceive, this case must be tried.’

Knight-Bruce LJ and Turner LJ
(1862) 4 De GF and J 264, [1862] EWHC Ch J78, [1862] EngR 951, (1862) 4 De G F and J 264, (1862) 45 ER 1185
Bailii, Commonlii
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, . .
Cited – Macedo v Stroud PC 1922
(Trinidad) The donor purported to give real property (in part) by memorandum which was not registered. Under the law of Trinidad the transfer did not pass any estate or interest in the land. The donor delivered the instrument to his solicitor . .
Distinguished – 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 . .

Lists of cited by and citing cases may be incomplete.

Company, Equity, Trusts

Leading Case

Updated: 02 November 2021; Ref: scu.179865

Standard Chartered Bank v Pakistan National Shipping Corporation, Standard Chartered Bank v Pakistan National Shipping Corporation and Others and Another and Others (Nos 2 and 4): HL 6 Nov 2002

Fraudulent Misrepresentation by Company Director

Fraudulent bills of lading had been issued in order to rely upon letters of credit issued by the bank. The director signing the bills sought to avoid personal liability, saying it was the Act of the company. The defendant company also appealed on the basis that the claimant bank had itself been at fault and contributorily negligent.
Held: In the case of a plaintiff, ‘fault’ meant ‘negligence, breach of statutory duty, or other act or omission’ which would give rise to a common law defence of contributory negligence. Under Edgington, if a fraudulent representation was relied upon, other reasons for making the payment were irrelevant. As to the liability of the director his representation was also that of the company, but he did not escape personal liability.
Lord Hoffmann said: ‘if a fraudulent representation is relied upon, in the sense that the claimant would not have parted with his money if he had known that it was false, it does not matter that he also had some other negligent or irrational belief about another matter and, but for that belief, would not have parted with his money either. The law simply ignores the other reasons why he paid.’

Slynn, Mustill, Hoffmann, Hobhouse, Rodger LL
Times 07-Nov-2002, Gazette 09-Jan-2003, [2002] UKHL 43, [2002] 3 WLR 1547, [2003] 1 AC 959, [2003] 1 All ER 173, [2002] CLC 1330, [2003] 1 LLR 227, [2002] BCC 846, [2002] 2 All ER (Comm) 931, [2003] 1 BCLC 244, [2003] 1 Lloyd’s Rep 227
House of Lords, Bailii
Law Reform (Contributory Negligence) Act 1945 1(1), Statute of Frauds (Amendment) Act 1828
England and Wales
Citing:
Re-affirmed – Edgington v Fitzmaurice CA 7-Mar-1885
False Prospectus – Issuers liable in Deceit
The directors of a company issued a prospectus, falsely stating that the proceeds were to be used to complete alterations to the buildings of the company, to purchase horses and vans and to develop the trade of the company. In fact it was to pay off . .
See Also – Standard Chartered Bank v Pakistan National Shipping Corporation and Another CA 17-Dec-1996
. .
See Also – Standard Chartered Bank v Pakistan National Shipping Corporation 1998
‘The tort of deceit involves a false representation made by the defendant, who knows it to be untrue, or who has no belief in its truth, or who is reckless as to its truth. If the defendant intended that the plaintiff should act in reliance on such . .
See Also – Standard Chartered Bank v Pakistan National Shipping Corporation and Others (No 3) ComC 27-May-1998
A company making a false statement on a bill of lading would be held liable for the tort of deceit when it knew that the bill must be relied upon by bankers and others making arrangements on its contents. A claimant ‘cannot recover for a loss . .

Cited by:
Cited – Advanced Industrial Technology Corporation Ltd v Bond Street Jewellers Ltd CA 4-Jul-2006
The claimant left a valuable necklace with the defendant jewellers for sale. The jewellers fell into financial difficulties, and the director gave the necklace as security for a loan to the company. The jeweller failed to maintain payments on the . .
Cited – Contex Drouzhba Ltd v Wiseman and Another CA 20-Nov-2007
The defendant was a director of a company. He signed a letter for the company promising to pay for goods ordered. The representation was found to have been made fraudulently because he knew the company was insolvent, and unable to pay. He now . .
Cited – Cheltenham Borough Council v Laird QBD 15-Jun-2009
The council sought damages saying that their former chief executive had not disclosed her history of depressive illness when applying for her job.
Held: The replies were not dishonest as the form could have been misconstrued. The claim failed. . .
Cited – Lindsay v O’Loughnane QBD 18-Mar-2010
lindsay_oloughnaneQBD11
The claimant had purchased Euros through a foreign exchange dealer. The dealer company became insolvent, causing losses to the claimant, who sought to recover from the company’s managing director, the defendant, saying that he was aware of the . .
Cited – Hayward v Zurich Insurance Company Plc SC 27-Jul-2016
The claimant had won a personal injury case and the matter had been settled with a substantial payout by the appellant insurance company. The company now said that the claimant had grossly exaggerated his injury, and indeed wasfiully recovered at . .

Lists of cited by and citing cases may be incomplete.

Company, Torts – Other

Leading Case

Updated: 02 November 2021; Ref: scu.177935

Salvesen’s Trustees v Inland Revenue Commissioners: SCS 1930

The court considered the valuation of shares in a notional purchase. The company’s articles of association contained a provision that the company might at any time, by extraordinary resolution, resolve that any shareholder, other than a director or a person holding more than 10 per cent of the shares of the company do transfer his shares, and, to put it shortly, that upon such a transfer the vendor would only be entitled to their nominal value if fully paid.
Held: The court fixed the value of the fully paid andpound;1 shares for the purposes of duty at andpound;3. The court had to postulate a willing purchaser and a willing seller meeting in a free agreement; the willing seller being armed with the information which any holder of the shares would be untitled to demand of his directors and the willing purchaser with that which could have been reasonably ascertained by him as at the date of death.
Lord Fleming said: ‘The Act of Parliament requires, however, that the assumed sale, which is to guide the Commissioners in estimating the value, is to take place in the open market. Under these circumstances I think that there is no escape from the conclusion that any restrictions which prevent the shares being sold in an open market must be disregarded so far as the assumed sale under section 7(5) of the Act of 1894 is concerned. But, on the other hand, the terms of that subsection do not require or authorise the Commissioners to disregard such restrictions in considering the nature and value of the subject which the hypothetical buyer acquires at the assumed sale. Though he is deemed to buy in an open and unrestricted market, he buys a share which, after it is transferred to him, is subject to all the conditions in the articles of association, including the restrictions on the right of transfer, and this circumstance may affect the price which he would be willing to offer.’

Lord Fleming
1930 SLT 387
Finance Act 1894 7(5)
Scotland
Cited by:
Cited – Grays Timber Products Ltd v Revenue and Customs SC 3-Feb-2010
An assessment to income tax had been raised after the employee resold shares in the company issued through the employees’ share scheme at a price which the Revenue said was above the share value. The company appealed against a finding that tax was . .
Cited – Watkins and Another v Revenue and Customs FTTTx 17-Nov-2011
FTTTx Inheritance tax – discounted gift trust – valuation of retained interest to income stream – s160 IHTA 1984 – burden of proof – adequacy of comparables – appeal dismissed . .

Lists of cited by and citing cases may be incomplete.

Stamp Duty, Company

Leading Case

Updated: 02 November 2021; Ref: scu.396597

Zoya Ltd v Sheikh Nasir Ahmed (T/A Property Mart) and Others: ChD 7 Oct 2016

No warranty of authority on claimas to authority

Complaint was made that proceedings had been made by the claimant company when the solicitors acted on the instructions of somebody describing himself wrongly as a director of the company.
Held: The defendant’s request for costs against the solicitors failed. There could be no warranty of authority where the litigation was itself about the very issue alleged to have been warranted. The defendant had not relied on the warranty claimed.

William Trower QC
[2016] EWHC 2249 (Ch), [2016] WLR(D) 527
Bailii, WLRD
England and Wales
Citing:
Applied – Aidiniantz v The Sherlock Holmes International Society Ltd ChD 15-Jun-2016
Solicitor does not warrant his client’s case
The company had appealed from an order for its winding up. The solicitors had acted on the instructions of a director, whose authority was now challenged.
Held: The claim for costs against the solicitors failed. They had been properly retained . .

Lists of cited by and citing cases may be incomplete.

Company, Legal Professions

Updated: 02 November 2021; Ref: scu.570349

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 first defendant had been found dishonest through non-disclosure, and that section 21 of the 1980 Act applied to leave the claim not out of time.
Held: The authorities suggested that when looking at fiduciaries, a six year period would apply unless excluded under 21(1)(a) or (b). A claim for an account from someone acting as a trustee was such, since it was a claim against his personal liability for his own acts as director, and if fraud was established his case would fall within 21(1)(a), but not (b).
Mummery LJ said that: ‘For limitation purposes the two classes of trust and/or fiduciary duty are treated differently. The first class of case arising from the breach of a pre-existing duty is, or is treated by analogy, as an action by the beneficiary for breach of trust falling within section 21(1) of the 1980 Act. This means that there is no limitation period for the cases falling within section 21(1)(a) or (b); but that there is a six-year limitation period for cases falling with s21(3).’

Mummery, Hale, Carnwath LJJ
[2003] EWCA Civ 1048, Times 09-Sep-2003, [2004] 1 BCLC 131
Bailii
Limitation Act 1980 21(1)
England and Wales
Citing:
Appeal from – Deg-Deutsch Investitions Und Entwicklungsgesellschaft Mbh v Koshy (No 3) Gwembe Valley Development Co Ltd v Same (No 3) ChD 26-Oct-2001
A claim against a company director which alleged a misapplication of company assets involving a fraudulent, or dishonest breach of trust, was not subject to a limitation period. A company was alleged to have fraudulently hidden certain profits. The . .
Cited – Companhia De Seguros Imperio v Heath (REBX) Ltd and Others CA 20-Jul-2000
Although a claim for breach of fiduciary duty, as a claim in equity, was not subject to the same limitation periods imposed by the Act as claims in tort or contract, a court exercising an equitable jurisdiction should apply similar periods under the . .
Cited – Furs Ltd v Tomkies 1936
(High Court of Australia) ‘the inflexible rule that, except under the authority of a provision in the articles of association, no director shall obtain for himself a profit by means of a transaction in which he is concerned on behalf of the company . .
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 – Tito v Wadell (No 2) ChD 1977
The liability to account for profits on breach of the self-dealing rule and the fair-dealing rule does not arise from a breach of duty at all. In his judgment such liability is the consequence of an equitable disability rather than of a breach of . .
Cited – Movitex v Bulfield ChD 1988
The court considered a company’s articles of association which excused a director taking an interest in a contract with the company. The court treated the general exclusion of the self-dealing rule in the Articles as subject to the duty of the . .
Cited – Guinness plc v Saunders CA 1988
. .
Cited – Kelly v Cooper and Another PC 25-Nov-1992
There was a dispute between a client and an estate agent in Bermuda. The client sued the estate agent for damages for breach of duty in failing to disclose material information to him and for putting himself in a position where his duty and his . .
Cited – In Re Neptune (Vehicle Washing Equipment) Ltd: Neptune (Vehicle Washing Equipment) Ltd v Fitzgerald ChD 2-Mar-1995
A sole company director must still have company meetings before entering into a contract even if only he will be present. When a director’s claim to the validity of a contract or arrangement depends upon his disclosure of it at a meeting, he must . .
Cited – Knox v Gye HL 1872
A court will, by analogy, apply a statutory limitation period if the remedy in equity, specific performance, is ‘correspondent to the remedy at law’ and where ‘the suit in equity corresponds with an action at law’. Lord Westbury said: ‘For where the . .
Cited – In Re Sharpe 1892
The misapplication of company money in the form of ultra vires payments of interest to shareholders was treated as a breach of trust by the directors. . .
Cited – Re Lands Allotment Company CA 1894
A limited company is not a trustee of its funds, but their beneficial owner. However, the fiduciary character of the duties of its directors mean that they are treated as if they were trustees of those funds of the company which are in their hands . .
Cited – Taylor v Davies PC 19-Dec-1919
(Ontario) An assignee for the benefit of creditors conveyed mortgaged property to the mortgagee in satisfaction of part of the debt due to him. The mortgagee was also one of the inspectors required by the Canadian legislation to supervise the . .
Cited – Clarkson v Davies PC 1923
In a case involving fraud, referring to Taylor v Davies, Lord Justice Clerk said that: ‘it was there laid down that there is a distinction between a trust which arises before the occurrence of the transaction impeached and cases which arises only by . .
Cited – Mothew (T/a Stapley and Co) v Bristol and West Building Society CA 24-Jul-1996
The solicitor, acting in a land purchase transaction for his lay client and the plaintiff, had unwittingly misled the claimant by telling the claimant that the purchasers were providing the balance of the purchase price themselves without recourse . .
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 – Bairstow and Others v Queens Moat Houses plc CA 17-May-2001
The court considered the liability of directors for an unlawfully paid dividend.
Held: Robert Walker LJ: ‘The prospect of the former directors being able to obtain contribution from innocent recipients of unlawful dividends was debated . .
Cited – J J Harrison v Harrison 2002
A company director, having concealed relevant information from the board, obtained company property at a substantial undervalue. . .
Cited – In re H and R (Minors) (Child Sexual Abuse: Standard of Proof) HL 14-Dec-1995
Evidence allowed – Care Application after Abuse
Children had made allegations of serious sexual abuse against their step-father. He was acquitted at trial, but the local authority went ahead with care proceedings. The parents appealed against a finding that a likely risk to the children had still . .
Cited – Armitage v Nurse; etc CA 19-Mar-1997
A clause in a trust deed may validly excuse trustees from personal liability for even gross negligence. The trustee was exempted from liability for loss or damage ‘unless such loss or damage shall be caused by his own actual fraud’.
Held: The . .
Cited – Brickenden v London Loan and Savings Co PC 10-May-1934
In order to establish breach of the fiduciary dealing rules, the company does not have to prove that it would not have entered into the transaction if there had been compliance by the director with the fiduciary-dealing rules and he had made . .
Cited – Gross v Lewis Hillman Ltd CA 1970
Where there has been no misdirection on an issue of fact by the trial judge the presumption is that his conclusion on issues of fact is correct. The Court of Appeal will only reverse the trial judge on an issue of fact when it is convinced that his . .
Cited – Armagas Ltd v Mundogas SA (‘The Ocean Frost’) CA 1985
Proof of corruption not needed for bribe
In establishing that money was paid as an improper inducement or bribe, proof of corruptness or a corrupt motive was unnecessary.
When a court looks at a decision of a judge at first instance, the court stressed the need to look at the . .
See Also – Gwembe Valley Development Company Ltd v Koshy and others CA 3-Dec-2002
Second application further to amend court order . .

Cited by:
Cited – Newgate Stud Company, Newgate Stud Farm Llc v Penfold, Penfold Bloodstock Limited ChD 21-Dec-2004
The claimants sought damages from the defendant. He had been employed to manage their horse-racing activities, and it was alleged that he had made secret profits. The defendant denied any dishonesty, saying all matters were known to the deceased . .
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 . .
Cited – Berezovsky v Abramovich ComC 22-May-2008
Applications were made to amend pleadings and for consequential orders. The claimant sought damages of $4.3 billion alleging breach of trust. The claimant sought to add claims which the defendant said were out of time.
Held: The proposed . .
Cited – Green and others v Gaul and Another; In re Loftus deceased ChD 18-Mar-2005
The claimants began an action in January 2003 to seek to set aside the appointment of an administrator from December 1991, and to have set aside transfers of property made within the estate.
Held: The limitation period against a personal . .
Cited – Williams v Central Bank of Nigeria SC 19-Feb-2014
Bank not liable for fraud of customer
The appellant sought to make the bank liable for a fraud committed by the Bank’s customer, the appellant saying that the Bank knew or ought to have known of the fraud. The court was asked whether a party liable only as a dishonest assistant was a . .
Cited – Halton International Inc Another v Guernroy Ltd CA 27-Jun-2006
The parties had been involved in investing in an airline to secure its future, but it was now said that one party had broken the shareholders’ or voting agreement in not allowing further investments on a pari passu basis. The defendants argued that . .

Lists of cited by and citing cases may be incomplete.

Company, Trusts, Limitation, Equity

Updated: 02 November 2021; Ref: scu.186028

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 were six directors on its board, who included the five directors of Regal. Regal was only prepared to subscribe 2,000 pounds. It was agreed that each of the directors of Amalgamated would themselves subscribe for 500 shares each, with the exception of Mr Gulliver. He said that he would find investors. He did so, and as a result 200 shares in Amalgamated were allotted to a Swiss company called Seguliva; 200 to a company called South Downs Land Co Ltd and 100 to a Miss Geering. Mr Gulliver himself held 85 out of 500 shares in Seguliva and 100 out of 1,000 shares in South Downs Land Co. He was a director of Seguliva and the managing director of South Downs Land Co, and signed the subscription cheques on their behalf. Miss Geering was a friend of his. The shares in Amalgamated were subsequently sold at a profit; and the court was asked whether the directors were liable to account to Regal for their profit.
Held: Directors are liable to account for activities outside the company if (i) what the directors did was so related to the affairs of the company that it can properly be said to have been done in the course of their management and in utilisation of their opportunities and special knowledge as directors and (ii) what they did resulted in profit for themselves.
Viscount Sankey said: ‘In my view, the respondents were in a fiduciary position and their liability to account does not depend upon proof of mala fides. The general rule of equity is that no one who has duties of a fiduciary nature to perform is allowed to enter into engagements in which he has or can have a personal interest conflicting with the interests of those whom he is bound to protect. If he holds any property so acquired as trustee, he is bound to account for it his cestui que trust.’
Lord Russel of the Killowen said: ‘The rule of equity which insists on those, who by use of a fiduciary position make profit, being liable to account for the profit, in no way depends on fraud, or absence of bona fides; or upon such questions or considerations as whether profit would or would otherwise have gone to the plaintiff, or whether the profiteer was under a duty to obtain the source of the profit for the plaintiff, or whether he took a risk or acted as he did for the benefit of the plaintiff, or whether the plaintiff has in fact been damaged or benefited by his action. The liability arises from the mere fact of a profit having, in the stated circumstances, been made. The profiteer, however honest and well-intentioned, cannot escape the risk of being called upon to account.’
Lord Wright said: ‘That question can be briefly stated to be whether an agent, a director, a trustee or other person in an analogous fiduciary position, when a demand is made upon him by the person to whom he stands in the fiduciary relationship to account for profits acquired by him by reason of his fiduciary position, and by reason of the opportunity and the knowledge, or either, resulting from it, is entitled to defeat the claim upon any ground save that he made profits with the knowledge and assent of the other person. The most usual and typical case of this nature is that of principal and agent. The rule in such cases is compendiously expressed to be that an agent must account for net profits secretly (that is, without the knowledge of his principal) acquired by him in the course of his agency. The authorities show how manifold and various are the applications of the rule. It does not depend on fraud or corruption.’

Lord MacMillan, Lord Russell of Killowen, Viscount Sankey Lord Wright, Lord Porter
[1967] 2 AC 134, [1942] UKHL 1, [1942] 1 All ER 378
Bailii
England and Wales
Cited by:
Cited – CMS Dolphin Ltd v Paul M Simonet and Another ChD 23-May-2001
The claimant asserted that the defendant had, having at one point been a creative director of the claimant, left to set up an alternate competing business, and diverted business from the first company to the new one. There had been disagreements . .
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 – 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 . .
Cited – 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 – 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 – 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 – Devenish Nutrition Ltd v Sanofi-Aventis Sa (France) and others CA 14-Oct-2008
The defendant had been involved in price fixing arrangements, and the claimant sought damages for breach of its proprietary rights. The claimant appealed refusal of an award an account of profits for what was akin to a breach of statutory duty.
Cited – Jones and others v Firkin-Flood ChD 17-Oct-2008
The trustees had contracted to sell shares in a private company held within the estate. A family member now claimed that they were held in trust after a settlement of a possible challenge to the will based in lack of testamentary capacity and undue . .
Cited – O’Donnell v Shanahan and Another CA 22-Jul-2009
The claimant appealed against dismissal of her petition for an order for the defendants to purchase her shares at a fair value, saying that they had acted unfairly toward her. Her co-directors had acquired, for another company of which they were . .
Cited – FHR European Ventures Llp and Others v Cedar Capital Partners Llc SC 16-Jul-2014
Approprietary remedy against Fraudulent Agent
The Court was asked whether a bribe or secret commission received by an agent is held by the agent on trust for his principal, or whether the principal merely has a claim for equitable compensation in a sum equal to the value of the bribe or . .
Cited – Halton International Inc (Holding) and Another v Guernroy Ltd ChD 9-Sep-2005
Parties had entered into a shareholders’ agreement as to voting arrengemets within a company. Thay disputed whether votes had been used in reach of that agreement, particularly as to the issue of new shares and their allotment, but the court now . .
Cited – Halton International Inc Another v Guernroy Ltd CA 27-Jun-2006
The parties had been involved in investing in an airline to secure its future, but it was now said that one party had broken the shareholders’ or voting agreement in not allowing further investments on a pari passu basis. The defendants argued that . .

Lists of cited by and citing cases may be incomplete.

Company, Equity

Leading Case

Updated: 02 November 2021; Ref: scu.180409

Re Kaytech International plc; Secretary of State for Trade and Industry v Kaczer and others: CA 1999

Robert Walker LJ said that the expression ‘de facto director’ had been in use for a long time, and commented on the failure to distinguish in pleadings between pleas that someone was a shadow or a de facto director. The two different labels were not necessarily mutually exclusive. He said: ‘However the two concepts do have at least this much in common, that an individual who was not a de jure director is alleged to have exercised real influence (otherwise than as a professional adviser) in the corporate governance of a company. Sometimes that influence may be concealed and sometimes it may be open. Sometimes it may be something of a mixture, as the facts of the present case show.’ and ”the crucial issue is whether the individual in question has assumed the status and function of a company director so as to make himself responsible under the [Company Directors Disqualification Act 1986] as if he were a de jure dir’
Rimer J referred to Jabble, ‘In my judgment, the principle reflected in that case is applicable here. If, following the service of these proceedings on [the respondent], he wanted to challenge [the Secretary of State’s] assertion that [the company] went into liquidation in 1993, then his correct course was to apply promptly for a stay or adjournment of these proceedings so that he could in the meantime start separate proceedings challenging Mr Alexander’s status as liquidator, being proceedings in which all parties affected by the challenge would be joined as defendants. That would include Mr Alexander and presumably also [the company] itself. [Counsel for the respondent] submitted that such a course would not have been open to the [respondent], since he would have no locus standi to commence such proceedings. I am not convinced of that, since I consider it probable that his status as a respondent to the disqualification proceedings would have given him a sufficient interest, but whether that is right or not, he has anyway not sought to put it to the test, but simply expects the court to decide the point in proceedings to which neither Mr Alexander nor [the company] are parties.’
Robert Walker LJ spoke of the Tjolle cases, saying: ‘I do not understand Jacob J in the first part of that passage to be enumerating tests which must all be satisfied if de facto directorship is to be established. He is simply drawing attention to some (but not all) of the relevant factors, recognising that the crucial issue is whether the individual in question has assumed the status and functions of a company director so as to make himself responsible under the 1986 Act as if he were a de jure director.’

Robert Walker LJ, Rimer J
[1999] 2 BCLC 351
Company Director Disqualifications Act 1986
England and Wales
Citing:
Cited – Secretary of State for Trade and Industry v Jabble and Others CA 22-Jul-1997
The Secretary of State sought company director disqualification orders. The defendants challenged the administrative receivership, saying that the appointment of the administrative receiver was invalid, and hence that the conditions of section 6 . .
Explained – 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:
Cited – Cabvision Ltd v Feetum and others CA 20-Dec-2005
The company challenged the appointment of administrative receivers, saying there had been no insolvency.
Held: No question arises of a derivative action arose here. The claimant had standing to apply for declaratory relief since they were . .
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: 02 November 2021; Ref: scu.230271

In re Hydrodam (Corby) Limited: ChD 1994

ET plc wholly owned MCP Ltd which wholly owned Landsaver MCP Limited, which wholly owned Hydrodam (Corby) Limited (‘HCL’). The only de jure directors of HCL were two Channel Island companies. HCL went into compulsory liquidation and its liquidator brought claims under section 214 of the 1986 Act for wrongful trading against 14 defendants, including ET, one of its subsidiaries and all its directors. Two of those directors were Mr Thomas and Dr Hardwick, who applied for the proceedings against them to be struck out.
Held: The liquidator had failed to plead or adduce any evidence to support the allegation that the directors of Eagle Trust were at any material time directors of Hydrodam, and the proceedings were struck out.
Directors may be of three kinds: ‘de jure directors, that is to say those who have been validly appointed to the office; de facto directors, that is to say, directors who assume to act as directors without having been appointed validly or at all; and shadow directors who are persons falling within the definition I have read [‘a person in accordance with whose directions or instructions the directors of the company are accustomed to act’]’
Millett J then explained that liability under section 214 extended to de facto as well as to de jure and shadow directors, but the statutory liability was ‘imposed exclusively upon directors of one or other of the three kinds that I have mentioned.’ That meant that the liquidator had to plead and prove against each defendant that he was such a director of HCL.
He explained the difference between a shadow and a de facto director, saying that the latter ‘is one who claims to act and purports to act as a director, although not validly appointed as such.’ A shadow director does not so claim or purport. HCL had two titular directors, namely the two Channel Island companies, a fact that might itself justify the inference that they were accustomed to act in accordance with the directions of others, in which case those others would be shadow directors. But no such case was pleaded.
Millett J said: ‘The liquidator submitted that where a body corporate is a director of a company, whether it be a de jure, de facto or shadow director, its own directors must ipso facto be shadow directors of the company. In my judgment that simply does not follow. Attendance at board meetings and voting, with others, may in certain limited circumstances expose a director to personal liability to the company of which he is a director or its creditors. But it does not, without more, constitute him a director of any company of which his company is a director.’

Millett J
[1994] 2 BCLC 180
Insolvency Act 1986 214
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, Insolvency

Leading Case

Updated: 02 November 2021; Ref: scu.377315

Evangelou and Others v McNicol: CA 12 Aug 2016

Party free to set cut off date for leadership vote

The court heard an appeal against orders as to the right to vote in a forthcoming Labour party leadership election. At first instance the judge had found that the claimants should have been given the right to participate.
Held: The appeal was allowed. A correct interpretation of the party’s Rule Book, the National Executive did have the right to fix such a cut off date. It was inescapable, that in any vote, some members would be excluded.

Beatson , Macur , Sales LJJ
[2016] EWCA Civ 817, [2016] WLR(D) 460
Bailii, WLRD
England and Wales

Company

Updated: 02 November 2021; Ref: scu.568626

W Stevenson and Sons (A Partnership) and Another v Regina: CACD 25 Feb 2008

The defendant partnership had been convicted of offences of failing to submit sales notes of the results of its fish auctions. Some individual partners sought to appeal.
Held: The statute could make a partnership liable as a separate entity. That being the case here, the applicants had not themselves been convicted, and so had no individual standing to appeal against the conviction of the partnership. However also any penalty attached only to assets clearly part of the partnership property, and did not apply to the personal assets of individual partners.

Lord Phillips CJ
[2008] EWCA Crim 273, Times 05-Mar-2008
Bailii
Sea Fishing (Enforcement of Community Control Measures) Order 2000
England and Wales
Cited by:
Cited – Regina v RL and JF CACD 28-Aug-2008
Club, nt members, prosecutable for breach
The Environment Agency appealed against dismissal of charges against the defendants who were officers in an unincorporated members’ golf club on whose land there had been pollution. The judge had ruled that the unincorporated association could have . .

Lists of cited by and citing cases may be incomplete.

Crime, Company

Updated: 02 November 2021; Ref: scu.265922

Nokes v Doncaster Amalgamated Collieries Ltd: HL 1948

A Contract of Service is not a form of property

The employee coal miner was prosecuted for absenting himself from work. He was found liable by the justices and appealed. The basis of the appeal was that he had formerly been employed by the Hickleton Mining Company Limited. That had become amalgamated with other companies pursuant to a court order made under section 154 of the Companies Act 1929. He contended that his contract did not transfer when that amalgamation occurred and he could be criminally liable only if he was employed by the new company. Section 154(1)(a) provided that the court, in ordering the amalgamation, could make an order for the transfer to the transferee company of ‘the property’ of the transferor company. Section 154(4) then went on to provide that: ‘In this section the expression ‘property’ includes property rights and powers of every description and the expression ‘liabilities’ includes duties.’ The question was whether a contract of employment between the transferor company and an employee was included within the definition of ‘the property’ of the transferor company, such that on the amalgamation, the employment contract was, thereby, transferred from the transferor company to the transferee company without the consent of the employee.
Held: Section 154 did not apply to contracts of service.
It is a fundamental principle of the common law that an employee should not be compulsorily transferred against his will, and that it would require very clear language to achieve that result. (Lord Romer dissented)
Lord Thankerton said: ‘If it had been intended [by Parliament] to extinguish the rights of third parties, that should have been done ‘ by a clear, definite and positive enactment, not by an ambiguous one such as the section relied on in this case”
Lord Atkin said: ‘I confess it appears to me astonishing that apart from overriding questions of public welfare power should be given to a court or anyone else to transfer a man without his knowledge and possibly against his will from the service of one person to the service of another. I had fancied that ingrained in the personal status of the citizen under our laws was a right to choose for himself whom he would serve and that this right of choice constituted the main difference between a servant and a serf.’
Viscount Simon LC observed that Parliament would legislate only for the purpose of bringing about an effective result. Its intention can ordinarily be taken to be that an enactment, when brought into force, will not be futile but will have practical consequences for the life of the community. And it is for Parliament, not the Executive – unless Parliament confers the necessary power upon it – to determine when an enactment comes into force.
And: ‘a free citizen, in the exercise of his freedom, is entitled to choose the employer whom he promises to serve . .’
Lord Porter observed: ‘Having regard to these considerations I find myself thrown back upon a consideration of the meaning to be placed on the word ‘property’ in sub-s 1 (a). Prima facie I should not expect it to include non-transferable contracts. In truth the word ‘property’ is not a term of art but takes its meaning from its context and from its collocation in the document or Act of Parliament in which it is found and from the mischief with which that Act or document is intended to deal. The word is used in many Acts of Parliament but I propose to confine myself to the Companies Acts themselves. The Companies (Consolidation) Act, 1908, s 122 and following sections, and the Companies Act, 1929, s 156 and following sections, deal with winding-up. Sect 151, sub-s 2, of the former Act enacts that: ‘(2) The liquidator in a winding up by the Court shall have power, but (subject to the provisions of this section) in the case of a winding up in Scotland or Ireland only with the sanction of the court, – (a) to sell the real and personal property, and things in action of the company by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels: . . (g) to do all such other things as may be necessary for winding up the affairs of the company and distributing its assets.’
Sect 189 of the latter Act contains similar provisions. In neither case has it ever, so far as I know, been suggested that ‘property’ included anything other than property of which the company then in course of being wound up could dispose.’

Viscount Simon LC, Lord Thankerton, Lord Atkin, Lord Porter, Lord Romer
[1940] AC 1014, [1940] 3 All ER 549, [1940] 3 Al 1
Companies Act 1929 154
England and Wales
Cited by:
Cited – Unison v Allen and others EAT 26-Jul-2007
EAT Equal pay Act – Out of time
The claimants before the Employment Tribunal alleged that when they were employed by NUPE, that union had breached their rights under the Equal Pay Act in connection with . .
Cited – Biffa Waste Services Ltd and Another v Maschinenfabrik Ernst Hese Gmbh and others CA 12-Nov-2008
The defendant contracted to build a plant for the claimant. The plant was damaged by a fire caused by the defendant’s independent sub-contractor. The defendant appealed against the finding that it was responsible for the sub-contractor’s failure. . .
Cited – RM v The Scottish Ministers SC 28-Nov-2012
The pursuer was held in a secure mental hospital. When moved to a highersecurity section, he challenged the move. He lost but then was unable to make an apeal as allowed iunder the 2003 Act because the Scottish Parliament had not created the . .

Lists of cited by and citing cases may be incomplete.

Employment, Company, Constitutional

Leading Case

Updated: 02 November 2021; Ref: scu.280083

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 defendant’s appeal succeeded. Though the appellant was not himself a director in the companies, his company was and it in turn held the directorships, and such a person might according to the circumstances be personally liable for misfeasance as a de facto director of them under section 744. In this case he was not.

Ward, Rimer, Elias LJJ
[2009] EWCA Civ 625, [2009] STC 1639, [2009] STI 2026, Times 28-Jul-2009, [2009] 2 BCLC 309
Bailii
Insolvency Act 1986 212, Companies Act 1985 727 744
England and Wales
Citing:
Appeal from – HM Revenue and Customs v Holland and Another ChD 24-Jun-2008
The Revenue sought to recover from the defendant substantial sums in respect of allegedly unlawful dividends paid from an insolvent company. They said that the defendant and his wife were de facto directors.
Held: Claims agains the second . .
Cited – Salomon v A Salomon and Company Ltd HL 16-Nov-1896
A Company and its Directors are not same paersons
Mr Salomon had incorporated his long standing personal business of shoe manufacture into a limited company. He held nearly all the shares, and had received debentures on the transfer into the company of his former business. The business failed, and . .
Cited – In re Hydrodam (Corby) Limited ChD 1994
ET plc wholly owned MCP Ltd which wholly owned Landsaver MCP Limited, which wholly owned Hydrodam (Corby) Limited (‘HCL’). The only de jure directors of HCL were two Channel Island companies. HCL went into compulsory liquidation and its liquidator . .
Cited – In re Bulawayo 1907
The court asked as to the possibility of appointing a company as a director of another company in the absence of an express power in the articles. . .
Cited – 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 . .
Cited – Re Kaytech International plc; Secretary of State for Trade and Industry v Kaczer and others CA 1999
Robert Walker LJ said that the expression ‘de facto director’ had been in use for a long time, and commented on the failure to distinguish in pleadings between pleas that someone was a shadow or a de facto director. The two different labels were not . .

Cited by:
Appeal from – 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, Corporation Tax

Updated: 02 November 2021; Ref: scu.347298

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 advantages attached to the shares as from the date on which the transfers were executed and delivered subject, as regards the legal title, to the provisions of the articles as to registration and the directors’ discretionary power to refuse registration. A transfer under seal in the form appropriate under the company’s regulations, coupled with delivery of the transfer and certificate to the transferee, does suffice, as between transferor and transferee, to constitute the transferee the beneficial owner of the share, and the circumstance that the transferee must do a further act in the form of applying for and obtaining registration in order to get in and perfect his legal title, having been equipped by the transferor with all that is necessary to enable him to do so, does not prevent the transfer from operating, in accordance with its terms as between the transferor and transferee, and making the transferee the beneficial owner. Milroy v Lord did not prevent the imposition of a trust as a matter of law if the gift was complete but the donor retained the subject-matter.

Evershed MR L, Jenkins LJ
[1952] 1 Ch 499, [1952] EWCA Civ 4, [1952] 1 All ER 1217, [1952] 1 TLR 1577, (1952) 31 ATC 138, [1952] TR 175
Bailii
England and Wales
Citing:
Distinguished – Milroy v Lord CA 26-Jul-1862
The donor executed a transfer of 50 shares. The shares were only transferable by entry in the books of the bank. No such transfer was ever made. The defendant had a power of attorney authorising him to transfer the donor’s shares and after the deed . .
Approved – 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 . .
Appeal from – 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 . .

Cited by:
Distinguished – The Trustee of the Property of Jan Yngve Pehrsson, a bankrupt v Madeleine von Greyerz PC 16-Jun-1999
PC (Gibraltar) The mere appointment of trustees of shares without the delivery to the trustees of forms of transfer did not give rise to a trust.
Held: A gift was intended to take effect by a transfer of . .
Cited – Scribes West Ltd v Relsa Anstalt and others CA 20-Dec-2004
The claimant challenged the forfeiture of its lease by a freeholder which had acquired the registered freehold title but had not yet registered its ownership. The second defendant had forfeited the lease by peacable re-entry for arrears of rent, and . .
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, Equity

Leading Case

Updated: 02 November 2021; Ref: scu.183420

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 company’s profits and a salary. Later the respondent in negotiations with the petitioner said he agreed in principle to the petitioner increasing his shareholding to 50% if certain profit targets were reached. No final agreement was arrived at however before the respondent changed his mind and revoked the profit sharing arrangement. The petition was based on the respondents ‘unfair’ refusal to make good the petitioners reasonable expectations that, on achieving the target set, he would be made a 50% shareholder in the company and that meanwhile the profit sharing arrangement would continue.
Held: The majority shareholder’s appeal succeeded. A minority shareholder, seeking relief for oppressive conduct by a majority shareholders, must plead something beyond a mere lack of faith in the management of the company, and show breach of some agreement as to the conduct of the business.
Lord Hoffmann said: ‘In the case of section 459, the background [against which the concept of `fairness’ has to be applied] has the following two features. First, a company is an association of persons for an economic purpose, usually entered into with legal advice and some degree of formality. The terms of the association are contained in the articles of association and sometimes in collateral agreements between the shareholders. Thus the manner in which the affairs of the company may be conducted is closely regulated by rules to which the shareholders have agreed. Secondly, company law has developed seamlessly from the law of partnership, which was treated by equity, like the Roman societas, as a contract of good faith. One of the traditional roles of equity, as a separate jurisdiction, was to restrain the exercise of strict legal rights in certain relationships in which it considered that this would be contrary to good faith. These principles have, with appropriate modification, been carried over into company law. The first of these two features leads to the conclusion that a member of a company will not ordinarily be entitled to complain of unfairness unless there has been some breach of the terms on which he agreed that the affairs of the company should be conducted. But the second leads to the conclusion that there will be cases in which equitable considerations make it unfair for those conducting the affairs of the company to rely on their strict legal powers. Thus unfairness may consist in a breach of the rules or in using the rules in a manner which equity would regard as contrary to good faith.’
Lord Hoffmann discussed the basis of calculation of the value of shares in a buyout in an unfair prejudice petition: ‘I think that parties ought to be encouraged, where at all possible, to avoid the expense of money and spirit inevitably involved in such litigation by making an offer to purchase at an early stage. This was a somewhat unusual case in that Mr Phillips, despite his revised views about Mr O’Neill’s competence, was willing to go on working with him. This is a position which the majority shareholder is entitled to take, even if only because he may consider it less unattractive than having to raise the capital to buy out the minority. Usually, however, the majority shareholder will want to put an end to the association. In such a case, it will almost always be unfair for the minority shareholder to be excluded without an offer to buy his shares or make some other fair arrangement . . the unfairness does not lie in the exclusion alone but in exclusion without a reasonable offer. If the respondent to a petition has plainly made a reasonable offer, then the exclusion as such will not be unfairly prejudicial and he will be entitled to have the petition struck out. It is therefore very important that participants in such companies should be able to know what counts as a reasonable offer.
In the first place, the offer must be to purchase the shares at a fair value. This will ordinarily be a value representing an equivalent proportion of the total issued share capital, that is, without a discount for its being a minority holding . .
Secondly, the value, if not agreed, should be determined by a competent expert. The offer in this case to appoint an accountant agreed by the parties or in default nominated by the President of the Institute of Chartered Accountants satisfied this requirement. One would ordinarily expect the costs of the expert to be shared but he should have the power to decide that they should be borne in some different way.
Thirdly, the offer should be to have the value determined by the expert as an expert. I do not think that the offer should provide for the full machinery of arbitration or the half-way house of an expert who gives reasons. The objective should be economy and expedition, even if this carries the possibility of a rough edge for one side or the other (and both parties in this respect take the same risk) compared with a more elaborate procedure . .
Fourthly, the offer should, as in this case, provide for equality of arms between the parties. Both should have the same right of access to information about the company which bears upon the value of the shares and both should have the right to make submissions to the expert, though the form (written or oral) which these submissions may take should be left to the discretion of the expert himself.
Fifthly, there is the question of costs. In the present case, when the offer was made after nearly three years of litigation, it could not serve as an independent ground for dismissing the petition, on the assumption that it was otherwise well founded, without an offer of costs. But this does not mean that payment of costs need always be offered. If there is a breakdown in relations between the parties, the majority shareholder should be given a reasonable opportunity to make an offer (which may include time to explore the question of how to raise finance) before he becomes obliged to pay costs. As I have said, the unfairness does not usually consist merely in the fact of the breakdown but in failure to make a suitable offer. And the majority shareholder should have a reasonable time to make the offer before his conduct is treated as unfair. The mere fact that the petitioner has presented his petition before the offer does not mean that the respondent must offer to pay the costs if he was not given a reasonable time. ‘

Lord Hoffmann, Lord Jauncey of Tullichettle, Lord Clyde, Lord Hutton, Lord Hobhouse of Wood-borough
Gazette 09-Jun-1999, Times 21-May-1999, Gazette 02-Sep-1999, [1999] UKHL 24, [1999] 1 WLR 1092, [1999] BCC 600, [1999] 2 All ER 961, [1999] 2 BCLC 1
House of Lords, Bailii
Companies Act 1985 459(1)
England and Wales
Citing:
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 – 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 . .
Cited – In re A Company (No 006834 of 1988) 1989
. .
Appeal from – 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 – In re H R Harmer Ltd CA 1958
Shareholders who receive their shares as a gift but afterwards work in the business may become entitled to enforce equitable restraints upon the conduct of the majority shareholder. To succeed the applicant must show some detriment in their capacity . .

Cited by:
Cited – Anderson v Hogg IHCS 14-Dec-2001
The appellant sought an order under the section for repayment to the company of sums paid to a director by way of extra redundancy payments. He said the payments were improper. His application had been refused, in part because he had not chosen 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 – 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 . .
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 . .
Explained – Grace v Biagioli and others CA 4-Nov-2005
The petitioner complained that he had first been removed as director, and that the remaining directors had misdescribed the company’s profits and paid those profits to themselves as management expenses and in breach of a resolution requiring an . .
Cited – Allmark v Ervel Curt Burnham, Distinct Services Ltd ChD 30-Nov-2005
The petitioner sought for relief from alleged prejudicial conduct by the respondents in the management of the company. . .
Cited – Bonham v Crow and others CA 13-Dec-2001
The petitioner complained of unfair prejudice in the way the company had been operated, and sought an order that his shares be bought out. However the judge found that the net value of the company was negative and the shares worthless. The judge had . .
Cited – Bee Tee Alarms, Re ChD 10-Mar-2006
. .
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 . .
Cited – Bilkus v Stockler Brunton (A Firm) CA 16-Feb-2010
Solicitors appealed against the rejection of their claim for an uplift in their fees amounting to andpound;50,000, based on the value element in the transaction in the 1994 Order. The court had to decide whether the matter came under the rules as a . .
Cited – Harborne Road Nominees Ltd v Karvaski and Another ChD 19-Aug-2011
The claimant asked the court to set aside as an abuse the petition issued by the defendants, saying that it was only an attempt to obtain control of the company.
Held: The application failed. To succeed the claimant must show that his offer . .
Cited – 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 – Kaneria v Kaneria and Others ChD 15-Apr-2014
The parties were embroiled in a company dispute with allegations of conduct prejudicial to minority shareholders. An application was now made for sanctions for a failure to comply with court directions.
Held: Unless and until a higher Court . .
Cited – Macom Gmbh v Bozeat and Others ChD 21-Jun-2021
Order regulating company’s affairs
COMPANY – Unfair prejudice – Petitioner 60% shareholder – Respondents 40% shareholders – Alleged breaches of director’s duties and failures to observe Shareholders’ Agreement – Undermining company’s corporate governance – Appropriate remedy – . .

Lists of cited by and citing cases may be incomplete.

Company, Damages

Leading Case

Updated: 01 November 2021; Ref: scu.84457

Pacific International Sports Clubs Ltd v Soccer Marketing International Ltd and Others: ChD 24 Jul 2009

The parties disputed ownership of shares in the football club Dynamo Kiev. Claims were to be made under Ukrainian company law and in equity. The claimant (a company registered in Mauritius) sought to proceed here. The defendants (largely companies registered in the UK) said that the Ukraine was the proper jurisdiction.
Held: The court declined jurisdiction. The question of whether a party would receive a fair trial in a particular jurisdiction is peculiarly fact sensitive. Though there were grave doubts about the consistency of the Ukrainian courts, they were not sufficient to conclude that a fair trial was not possible. The dispute had no real connection with this country. The documents would be be Ukrainian and the witnesses would all have Ukrainian as their first language: ‘ the nature of dispute, the identity of the persons whose evidence will be material, the sensitivities involved (control of Ukraine’s most celebrated football club) and the very difficult legal issues that will have to be decided point overwhelmingly to Ukraine as the appropriate and indeed only natural forum fort the trial.’
The case of Owusu might still not allow a british court to decline jurisdiction in a case against the first defendant. However, that defendant was only a minor player in the action, and the tail should not be allowed to wag the dog.

Blackburne J
[2009] EWHC 1839 (Ch)
Bailii
Council Regulation (EC) 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters
England and Wales
Citing:
Cited – Spiliada Maritime Corporation v Cansulex Ltd, The Spiliada HL 1986
Forum Non Conveniens Restated
The House reviewed the authorities on the principle of forum non conveniens and restated how to apply the principle where the defendant seeks a stay of proceedings on the ground that there is another more appropriate forum.
Held: ‘In the . .
Cited – Owusu v Jackson ECJ 1-Mar-2005
ECJ Brussels Convention – Territorial scope of the Brussels Convention – Article 2 – Jurisdiction – Accident which occurred in a non – Contracting State – Personal injury – Action brought in a Contracting State . .
Cited – The Abidin Daver HL 1984
The House considered the application of the doctrine of forum conveniens.
Held: A stay of an English action on the ground of forum non conveniens could be resisted on the ground that justice could not be obtained in the otherwise more . .
Cited – Cherney v Deripaska ComC 3-Jul-2008
Renewed application for leave to serve proceedings out of jurisdiction. The court considered a submission that a fair trial would not be possible in Russia: ‘An English court will approach with considerable circumspection any contention that a . .
Cited – Connelly v RTZ Corporation Plc and others HL 24-Jul-1997
The availability of legal aid to a party is not part of criteria for choosing jurisdiction save in exceptional circumstances.
Lord Goff discussed the Spiliada case: ‘the burden of proof rests on the defendant to persuade the court to exercise . .
Cited – OJSC Oil Company Yugraneft v Abramovich and others ComC 29-Oct-2008
The claimants sought damages alleging a massive fraud by the defendants. The court considered whether the parties could receive a fair trial of the action in Russia.
Held: They could. Christopher Clarke J said: ‘Firstly, this case is in no way . .
Cited – Amin Rasheed Shipping Corp v Kuwait Insurance Co HL 1983
A claimant must show good reason why service on a foreign defendant should be permitted. This head of jurisdiction was an exorbitant jurisdiction, one which, under general English conflict rules, an English court would not recognise as possessed by . .
Cited – Dexter Ltd v Vlieland-Boddy CA 2003
The court discussed the significance of Johnson v Gore Wood.
Clarke LJ said: ‘The principles to be derived from the authorities, of which by far the most important is Johnson v Gore Wood and Co [2002] 2 AC 1, can be summarised as follows:
Company, Jurisdiction

Updated: 01 November 2021; Ref: scu.361471

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, at the invitation of the defendants own counsel. The Secretary of State then applied to restore the s6 proceedings, which was opposed on the grounds it would be unjust to do so in light of the order made under s2. It was said that there was such a degree of overlap between the criminal and civil proceedings that to allow the s6 application to proceed would effectively expose the director to double jeopardy.
Held: There was no abuse of process in reviving an application for a company director disqualification order which had been adjourned to allow criminal prosecutions to be concluded, after those proceedings had been finished. There was no double jeopardy as between civil and criminal proceedings, and the parties were different, as was the nature and statutory jurisdiction of the proceedings. In this case the Secretary of State was not party to and should not be bound by the form of adjournment.
Anthony Mann QC said: ‘I have been told that (not surprisingly) this sort of situation (criminal and civil disqualification orders potentially overlapping) is not uncommon. There are reported and unreported cases in which it is apparent that civil proceedings have continued after s 2 disqualification orders have been made in relation to the respondents to criminal proceedings (for example, Secretary of State for Trade and Industry v Tjolle [1998] BCLC 333, [1998] BCC 282 in which it can be seen that a 10 year disqualification under s 2 was followed by a 15 year disqualification under s 6). However, there is no authority which in terms addresses the points raised by Mr Ayres. Accordingly I have to approach this matter as one of principle. It seems to me that the following principles and factors should be applied and considered in resolving the issues which arise in this case.
(i) I do not think that the doctrine of former recovery is applicable bearing in mind the different parties to the two sets of proceedings, their different natures, the different interests of the two ‘prosecutors’ (for want of a better word) involved and the two different statutory jurisdictions involved. I can see how the doctrine, in its autrefois convict form, might apply if one disqualification under s 2 was sought to be followed by another s 2 disqualification based on the same facts. That, however, is not the case where the clash of proceedings is between criminal proceedings and civil proceedings under s 6 . .
(ii) Nor do I think that the doctrine of double jeopardy applies. The operation of the doctrine in relation to civil proceedings was considered in Saeed v GLC [1986] IRLR 2. In that case an acquittal on a charge of assault did not bar a domestic tribunal disciplinary charge based on the same alleged assault. Popplewell J cited Connolly v Director of Public Prosecutions [1964] AC 1254, [1964] 2 All ER 401, where there are dicta which refer to the impropriety of trying a man twice for the same crime and said:
‘Mr Geddes points out, and I accept, that double jeopardy cannot apply as between criminal and civil proceedings.’
I apply the same principles.
(iii) The correct principles to apply are those relating to abuse of process. That was the basis of the consideration of the Court of Appeal in Re Barings plc (No [3]) where the alternative proceedings were disciplinary proceedings . .
(iv) The burden is on the party alleging abuse to establish it – Johnson v Gore Wood and Co [[2001] 2WLR 72].
(v) The jurisdiction to stay or strike out proceedings as an abuse on the footing that a point has been decided in earlier proceedings is not a jurisdiction that will be exercised lightly. I should be looking for circumstances which demonstrate that it would be:
‘manifestly unfair to a party to litigation before it, or [it] would otherwise bring the administration of justice into disrepute among right-thinking people,’
if I were to allow the present proceedings to continue – Hunter v Chief Constable of West Midlands [1982] AC 529 at page 526, cited by Waller LJ in Re Barings plc (No 3) at page 257.
(vi) This point is even stronger where the person who is sought to be debarred in the second set of proceedings was not even a party to the first set. While a non-coincidence of parties is not necessarily a bar to a finding of abuse, it must be an important pointer against it.
(vii) It will be essential to examine:
‘whether the issues upon which the court will need to adjudicate in the present proceedings are the same, or substantially the same, as those which have already been investigated and adjudicated upon in the [criminal proceedings].’ (per Chadwick LJ in re Barings plc (No [3]) [1999] 1 BCLC 226 at page 253)
(viii) I must bear in mind that the Secretary of State is the person to whom Parliament has entrusted the task of considering whether to seek disqualification orders in the public interest under s 6. This court is not entitled to substitute its own view as to the desirability of continuing proceedings for the view taken by the Secretary of State – see again Re Barings plc (No [3]) [1999] 1 BCLC 226 at p 252. I can only intervene if the continuation of the proceedings amounts to an abuse of the process, and the public interest factor must be borne heavily in mind in considering that question. In this context it is again important to remember that the Secretary of State was not a party to the criminal proceedings; nor was he given an opportunity to appear. A finding that the Secretary of State’s continued pursuit of proceedings that he considers to be in the public interest is an abuse of the process on the basis of findings in proceedings to which he was not a party would be a strong finding. It might not be absolutely inconceivable; but it would require a very strong and clear case. It is no answer to say, as Mr Ayres says, that the prosecuting authorities and the Secretary of State are both ’emanations of the state’. That might be an accurate description is some contexts, but they are emanations with different functions and with different interests in mind.
(ix) It is important to bear in mind the difference in focus and emphasis of the criminal proceedings when compared to the civil proceedings. The purpose of the criminal proceedings is to consider the evidence with a view to determining whether the crime has been committed. That will usually involve considering the existence or non-existence of dishonesty. If there is a conviction, then disqualification may be considered as part of the sentencing process, but the focus of the criminal proceedings is such that any detailed consideration of the conduct of the directors in question, so far as it bears on their unfitness to be directors, is unlikely to take place during the trial and will arise, if at all, at the stage of sentencing by which time all the evidence has been given. The disqualification will be considered by reference to the facts germane to the conviction. Civil proceedings under s 6 are different. The whole focus of those proceedings is on the conduct of the directors and what it says about their fitness or unfitness to be directors, and that focus exists throughout the proceedings. One also has to bear in mind the differing standards of proof in the two sets of proceedings. There may be various things not proved to the criminal standard which might be provable to the civil standard in the civil proceedings, so that decisions in the former might justifiably be revisited in the latter.
(x) It seems to me that a combination of the last two points means that in most cases it is going to be unlikely that a disqualification in criminal proceedings will make concurrent civil proceedings an abuse of process. It is likely to be only in clear cases, which can clearly be said to be on all fours with each other, that it might be said that the criminal proceedings have covered all the bases in a way which makes the civil proceedings otiose and oppressive’

Anthony Mann QC
Times 03-Apr-2001, Gazette 17-May-2001, [2001] 2 BCLC 48
Company Directors Disqualification Act 1986
England and Wales
Cited by:
Appeal from – 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 – 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 . .

Lists of cited by and citing cases may be incomplete.

Company

Leading Case

Updated: 01 November 2021; Ref: scu.81843

Camera di Commercio, Industria, Artigianato e Agricoltura di Lecce v Manni: ECJ 9 Mar 2017

Individual data on Company registers not erasable

ECJ (Approximation of Laws Approximation of Laws Data Protection Freedom of Establishment – Judgment) Reference for a preliminary ruling – Personal data – Protection of individuals with regard to the processing of personal data – Directive 95/46/EC – Article 6(1)(e) – Data subject to disclosure in the companies register – First Directive 68/151/EEC – Article 3 – Winding-up of the company concerned – Restriction of access to that data by third parties

[2017] WLR(D) 163, [2017] EUECJ C-398/15, ECLI:EU:C:2017:197
Bailii, WLRD
Directive 95/46/EC
European

Information, Company

Updated: 01 November 2021; Ref: scu.580710

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 sought the court’s direction. The widow and deceased had lived seperately for over 20 years, and his more recent partner said that he had informally given the shares to her. The widow and children appealed a finding in favour of the gift in respect of one share, and against the costs order.
Held: The appeal succeeded. The steps taken by the deceased to transfer the share fell short of what was required. He had not been himself registered as owner, and could not execute a share transfer. The company was in liquidation, and no share certificate was handed over. The deceased had not done all he could to transfer the share.

Dyson, Maurice Kay, Rimer LJJ
[2010] EWCA Civ 159
Bailii
England and Wales
Citing:
Mentioned – 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 . .
Mentioned – 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 – 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, . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Trusts, Company

Updated: 01 November 2021; Ref: scu.402536

Rehman v Chamberlain and Another: ChD 6 Sep 2011

The claimant asserted as against the liquidator, a floating and registered charge over the company’s assets. The liquidator said that it had been granted within the twelve months prior to the onset of the insolvency, was caught by section 245(3)(b), and requested rectification of the register. The claimants relied on an opinion from senior counsel.
Held: The request for rectification of the register of charges was refused. The claimant had not a security interest at the time when he advanced the money; and, even had such a security interest existed, it would not be appropriate to exercise the discretion under section 404 in the claimant’s favour.

Keyser QC J
[2011] EWHC 2318 (Ch)
Bailii
Insolvency Act 1986 245(3)(b), Companies Act 2006 1096 1097, Companies Act 1985 395(1) 404, Companies Act 2006 (Commencement No. 8 Transitional Provisions and Savings) Order 2008
England and Wales
Citing:
Cited – Re Joplin Brewery Co Ltd ChD 1902
The applicants, owners of a solvent family business, sought to register a charge over the company’s assets out of time.
Held: Buckley J saw the application under s 15 of the 1900 Act as a similar application to the application to register out . .
Cited – in Re Resinoid and Mica Products Ltd CA 1967
(From 1967) An order extending time for registration of a charge will not normally be made after a company has gone into liquidation. . .
Cited – Victoria Housing Estates Ltd v Ashpurton Estates Ltd CA 1982
Although the Court has jurisdiction to extend the time for registration of a charge, its settled practice is not to do so when the company that granted the charge has already entered into liquidation. An application to extend the time for . .
Cited – In re Anglo-Oriental Carpet Manufacturing Company ChD 1903
Debentures creating a charge had been issued, but not registered within 21 days. On 1 November 1901, an order was made with the usual proviso (‘without prejudice to the rights of parties acquired prior to the time when such trust deed and debentures . .
Mentioned – In Re Jackson and Bassford Ltd ChD 1906
Buckley J distinguished between (1) an agreement to give security which was ‘so expressed as to create a present equitable right to a security’ and was thus registrable against te company registers; and (2) an agreement to give security which was so . .
Cited – In re Ehrmann Brothers Ltd CA 1906
Debentures had been issued after 1 January 1901 secured by a floating charge. It was was not registered in time. The judge had permitted registration, with a proviso as contained in In re I C Johnson, and registration was completed. A compulsory . .
Cited – Re Shoe Lace Ltd, Power v Sharp Investments Ltd CA 1993
A debenture was executed on 24th July 1990. Money earlier advanced by the chargee in anticipation of and in consideration for the debenture, including an advance made on 16th July 1990, had not been made ‘at the same time as’ the creation of the . .
Cited – In re MIG Trust Ltd CA 1933
An application under section 85 of the 1929 Act was opposed by the company at an early stage and before the matter came on for hearing. The mortgagor company was hopelessly insolvent and a winding up petition was impending. A few days later, on the . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 02 November 2021; Ref: scu.444302

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 with fraudulent transactions misapplying the company’s assets, that there had ceased to be a sufficient number of qualified directors to make up a board, and the company had no clerk or office, that in such circumstance the proprietors had no power to take the property out of the hands of the defendant directors.
Held: If a company suffers a legal wrong it is the company itself which must sue in respect of damage resulting from it. The company has its own separate legal identity which must be respected. Observations were made on the point at which a relationship of trust arises between company promoters and the company. The possibility of avoiding a transaction does not necessarily create a void transaction. A corporation may later choose to adopt the transaction, and hold the directors bound by them. They can be confirmed if a transaction is a mortgage not authorised by powers given by the Act, this is an act beyond the powers of the corporation and can not be confirmed whilst there is any one dissenting voice raised against it.
Jenkins LJ said: ‘The proper plaintiff in an action in respect of a wrong alleged to be done to a corporation is, prima facie, the corporation.’

Wigram VC, Jenkins LJ
[1843] 67 ER 189, [1843] EngR 478, (1843) 2 Hare 461
Commonlii
England and Wales
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 – Heyting v Dupont CA 1964
The plaintiff owned shares in a company registered in Jersey and created to make the most of an invention. The articles contained a deadlock provision.
Held: This was ‘essentially a dispute between two discordant partners’ There was a general . .
Explained – Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) CA 1982
A plaintiff shareholder cannot recover damages merely because the company in which he has an interest has suffered damage. He cannot recover a sum equal to the diminution in the market value of his shares, or equal to the likely diminution in . .
Cited – Cabvision Ltd v Feetum and others CA 20-Dec-2005
The company challenged the appointment of administrative receivers, saying there had been no insolvency.
Held: No question arises of a derivative action arose here. The claimant had standing to apply for declaratory relief since they were . .
Cited – Stuart v Goldberg and Linde (a firm) CA 17-Jan-2008
The claimant appealed against orders preventing him from suing his former solicitors in respect of heads of claim which the court said should have been included in earlier proceedings.
Held: When deciding whether a claim was an abuse of . .
Cited – Webster v Sandersons Solicitors (A Firm) CA 31-Jul-2009
The claimant apealed against refusal of permission to amend his claim for negligence against his former solicitors by adding claims from 1993 and 1994 . .
Cited – 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 . .
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 (No 3) ChD 1987
Knox J said: ‘Ultimately the question which has to be answered in order to determine whether the rule in Foss v. Harbottle applies to prevent a minority shareholder seeking relief as plaintiff for the benefit of the company is, ‘Is the plaintiff . .
Cited – Bracken Partners Ltd v Gutteridge and Others ChD 31-Mar-2003
The claimant sought to claim against former directors of a company in which it held shares under the rule in Foss v Harbottle. . .
Cited – Smith v Croft (No 2) 1987
A registered shareholder who is absolute beneficial owner can vote as he pleases, subject only to rather imprecise constraints imposed by company law.
It is essential to the exception to the rule in Foss v Harbottle that the alleged wrongdoing . .

Lists of cited by and citing cases may be incomplete.

Company, Damages

Leading Case

Updated: 02 November 2021; Ref: scu.180903

Lloyds TSB Foundation for Scotland v Lloyds Banking Group Plc: SC 23 Jan 2013

A predecessor bank had created a trust into which it paid a small proportion of its profits. The parties now disputed the calculation of profits when the Bank declared a loss which allowed for an unrealised gain on the acquisition of HBOS. Accounting standards had changed on the introduction of the EC Regulations, which now required any ‘gain on acquisition’ arising from a bargain purchase be recognised on the profit and loss account as of the acquisition date in line with International Financial Reporting Standards requirements. This converted a loss of over andpound;10 billion, to a profit of andpound;1 billion. The Outer House had dimissed the trustees’ claim, granting a decree of absolvitor, but the Inner House allowed the appeal. The bank now appealed.
Held: The appeal succeeded. It was necessary to construe the deed in the legal and accounting context of the time when they were made, when the deeds clearly anticipated reference only to realised gains. The alteration in accounting methods was wholly without the parties anticipations, and would have been rejected at the time.
This led to a frustration of the deed, which was to be resolved by ignoring the unrealised gain shown in the current accounts.
Though the doctrine of equitable adjustment remains part of Scots law and resort may be made to it in cases where the contract has become impossible of performance or otherwise, a Court cannot equitably adjust a contract on the basis that its performance, while not frustrated, is no longer that originally contemplated.

Lord Hope, Deputy President, Lord Mance, Lord Clarke, Lord Reed, Lord Carnwath
[2013] UKSC 3, UKSC 2012/0042
Bailii, Bailii Summary, SC Summary, SC
Companies Act 1985 230(1)
Scotland
Citing:
Cited – Prenn v Simmonds HL 1971
Backgroun Used to Construe Commercial Contract
Commercial contracts are to be construed in the light of all the background information which could reasonably have been expected to have been available to the parties in order to ascertain what would objectively have been understood to be their . .
Cited – Charter Reinsurance Co Ltd v Fagan and Others HL 24-May-1996
The re-insurers appealed against a finding that they were liable to make payment under a contract which required them to pay ‘sums actually paid.’ They said that the company having become insolvent, no payment would in fact be made.
Held: The . .
Cited – Bromarin Ab and Another v IMD Investments Limited CA 29-Jan-1999
Construction of share purchase agreements. . .
Cited – Cantiere San Rocco Sa v Clyde Shipbuilding and Engineering Co SCS 20-Jul-1922
The pursuers maintained that, in consequence of the contract having become incapable of fulfilment, they were entitled to recover the money paid by them to the defenders in terms of the contract. The defenders contended that rights acquired under . .
Cited – Shilliday v Smith SCS 2-Apr-1998
The phrase ‘causa data causa non secuta’ is used not to describe a remedy as such, but rather to describe one particular group of situations in which the law may provide a remedy because one party is unjustifiably enriched at the expense of the . .
Cited – Bank of Credit and Commerce International SA v Ali, Khan and others (No 1); BCCI v Ali HL 1-Mar-2001
Cere Needed Releasing Future Claims
A compromise agreement which appeared to claim to settle all outstanding claims between the employee and employer, did not prevent the employee later claiming for stigma losses where, at the time of the agreement, the circumstances which might lead . .
Cited – Debenhams Retail Plc and Another v Sun Alliance and London Assurance Company Ltd CA 20-Jul-2005
The landlord appealed against a decision that VAT was not to be included when calculating a rent based upon the turnover in the premises, when it had been expressed to include purchase taxes.
Held: The appeal succeeded: ‘it would be wrong to . .
At Inner House – Lloyds TSB Foundation for Scotland v Lloyds Banking Group Plc SCS 29-Dec-2011
(Inner House) The bank had created a trust deed providing for a share of realised profits to be paid each year to the pursuer charitable foundation. The bank had acquired another bank leading to a substantial but unrealised gain. Regulations on . .
At Outer House – Lloyds TSB Foundation for Scotland v Lloyds Banking Group Plc SCS 17-Jun-2011
(Outer House) The bank had covenanted to provide a certain proportion of its profits to the pursuer charitable foundation. The bank had acquired another at an accounting loss, but in 2005, a change in accounting standards turned that substantial . .

Lists of cited by and citing cases may be incomplete.

Trusts, Company

Leading Case

Updated: 01 November 2021; Ref: scu.470522

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 the private assets of the testator, as sole shareholder in a capital company with its registered office in a third country – Provision of national law providing tax advantages for companies having their registered office or principal place of business in the national territory

A-G Trstenjak
C-31/11, [2012] EUECJ C-31/11
Bailii
Cited by:
Opinion – 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 . .

Lists of cited by and citing cases may be incomplete.

European, Inheritance Tax, Company

Updated: 01 November 2021; Ref: scu.463192

Draycott Place RTM Company Ltd v Bordelais: QBD 10 Jul 2013

[2013] EWHC 1949 (QB)
Bailii
England and Wales

Costs, Company

Updated: 01 November 2021; Ref: scu.512289

Adams v Cape Industries plc: CA 2 Jan 1990

Proper Use of Corporate Entity to Protect Owner

The defendant was an English company and head of a group engaged in mining asbestos in South Africa. A wholly owned English subsidiary was the worldwide marketing body, which protested the jurisdiction of the United States Federal District Court in Texas in a suit by victims of asbestos. The defendant took no part in the United States proceedings and default judgments were entered. Actions on the judgment in England failed.
Held: The court declined to pierce the veil of incorporation. It was a legitimate use of the corporate form to use a subsidiary to insulate the remainder of the group from tort liability. There was no evidence to justify a finding of agency or facade.
There is an exception to the general rule, that steps which would not have been regarded by the domestic law of the foreign court as a submission to the jurisdiction ought not to be so regarded here, notwithstanding that if they had been steps taken in an English Court they might have constituted a submission to jurisdiction.
Slade LJ said: ‘Two points at least are clear. First, at common law in this country foreign judgments are enforced, if at all, not through considerations of comity but upon the basis of the principle explained thus by Parke B. in Williams v Jones
Secondly, however, in deciding whether the foreign court was one of competent jurisdiction, our courts will apply not the law of the foreign court itself but our own rules of private international law . .’ and ‘First, in determining the jurisdiction of the foreign court in such cases, our court is directing its mind to the competence or otherwise of the foreign court ‘to summon the defendant before it and to decide such matters as it has decided:’ see Pemberton v Hughes [1899] 1 Ch. 781, 790 per Lindley M.R. Secondly, in the absence of any form of submission to the foreign court, such competence depends on the physical presence of the defendant in the country concerned at the time of suit.
. . we would, on the basis of the authorities referred to above, regard the source of the territorial jurisdiction of the court of a foreign country to summon a defendant to appear before it as being his obligation for the time being to abide by its laws and accept the jurisdiction of its courts while present in its territory. So long as he remains physically present in that country, he has the benefit of its laws, and must take the rough with the smooth, by accepting his amenability to the process of its courts.’
‘[Counsel for Adams] described the theme of all these cases as being that where legal technicalities would produce injustice in cases involving members of a group of companies, such technicalities should not be allowed to prevail. We do not think that the cases relied on go nearly so far as this. As [counsel for Cape] submitted, save in cases which turn on the wording of particular statutes or contracts, the court is not free to disregard the principle of Salomon v Salomon and Co Ltd [1897] AC 22 merely because it considers that justice so requires. Our law, for better or worse, recognises the creation of subsidiary companies, which though in one sense the creatures of their parent companies, will nevertheless under the general law fall to be treated as separate legal entities with all the rights and liabilities which would normally attach to separate legal entities.’

Slade, Mustill and Ralph Gibson LJJ
[1990] Ch 433, [1991] 1 All ER 929, [1990] 2 WLR 657, [1990] BCLC 479, [1990] BCC 786
England and Wales
Citing:
Cited – Pemberton v Hughes CA 1899
Lindley MR said: ‘There is no doubt that the courts of this country will not enforce the decisions of foreign courts which have no jurisdiction in the sense explained above – i.e., over the subject matter or over the persons brought before them . . . .
Cited – Williams v Jones 22-Jan-1845
An action of debt lies upon a judgment of a county court. And the declaration need not state that the defendant resided within the jurisdiction of the county court, or was liable to be summoned to that court for the debt ; it is enough to state that . .
Applied – Woolfson v Strathclyde Regional Council HL 15-Feb-1978
The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name.
Held: The House declined to allow the principal shareholder of a company to recover compensation for the . .
Appeal from – Adams v Cape Industries plc ChD 1990
The piercing of the veil argument was used to attempt to bring an English public company, which was the parent company of a group which included subsidiaries in the United States, within the jurisdiction of the courts of the United States. Where a . .

Cited by:
Applied – Rakusens Ltd v Baser Ambalaj Plastik Sanayi Ticaret AS CA 11-Oct-2001
A company had sought and obtained leave to serve proceedings on a foreign based company, by serving documents on a local agent. The local agent was an independent contractor, who received and transmitted orders to the company, but who, themselves, . .
Cited – Motorola Credit Corporation v Uzan and others (No 2) CA 12-Jun-2003
World-wide freezing orders had been made under the 1982 Act. The defendants were members of a Turkish family with substantial business interests in the telecommunications industry. In breach of orders made in the US some defendants had sought to . .
Cited – Harding v Wealands HL 5-Jul-2006
Claim in UK for Accident in Australia
The claimant had been a passenger in a car driven by his now partner. They had an accident in New South Wales. The car was insured in Australia. He sought leave to sue in England and Wales because Australian law would limit the damages.
Held: . .
Cited – Rubin and Another v Eurofinance Sa and Others SC 24-Oct-2012
The Court was asked ‘whether, and if so, in what circumstances, an order or judgment of a foreign court . . in proceedings to adjust or set aside prior transactions, eg preferences or transactions at an undervalue, will be recognised and enforced in . .
Cited – Rubin and Another (Joint Receivers and Managers of The Consumers Trust) v Eurofinance Sa and Others CA 30-Jul-2010
. .
Cited – Prest v Petrodel Resources Ltd and Others SC 12-Jun-2013
In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. The . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .
Cited – Public Joint Stock Company (‘Rosgosstrakh’) v Starr Syndicate Ltd and Others ComC 17-Jun-2020
Reserved judgment on the claimant’s application for summary judgment on its claim for recognition and enforcement of three judgments obtained in its favour in the Russian courts . .
Cited – Fetch.AI Ltd and Another v Persons Unknown Category A and Others ComC 15-Jul-2021
Cryptocurrency Action
The claimants sought damages and other remedies saying that the unknown defendants had obtained access to the private key guarding their crypto currency assets, and then sold them at an undervalue, acquiring substantial profits for themselves in . .

Lists of cited by and citing cases may be incomplete.

Jurisdiction, Company

Leading Case

Updated: 01 November 2021; Ref: scu.179853

Farstad Supply As v Enviroco Ltd: SC 5 May 2010

The defendants (E) were liable to F after a serious offshore accident, but sought a contribution from a third party (A), the main charterers, seeking to rely on section 3(2) o the 1940 Act saying that ‘if sued they might have been liable’. The court was asked to interpret the section, saying whether this answer was affected the existing charterparty under which F had in any event given an indemnity to A, and if so, the existence of the indemnity disqualified A as a person who might have been held liable.
Held: E was not entitled to a contribution from A because the indeminty provision meant that it could not satisfy the requirement that ‘if sued’ A would have been liable. The charterparty agreement affected the situation because it effectively excused A from liability.
Lord Clarke said: ‘if Asco is not liable to the owner because it has a contractual defence under the charterparty, Enviroco will not be entitled to contribution from Asco and . . the reason for that cannot be described as the result of a ‘whim’ on the part of the owner but is the result of deliberate contractual arrangements apportioning risk between them as owner and charterer under the charterparty.’
Lord Collins of Mapesbury JSC considered what was ‘membership’ of a company, saying: ‘The starting point is that the definition of ‘member’ in what is now section 112 of the 2006 Act . . reflects a fundamental principle of United Kingdom company law, namely that, except where express provision is made to the contrary, the person on the register of the members is the member to the exclusion of any other person . . Ever since the Companies Clauses Consolidation Act 1845 and the Companies Act 1862 . . membership has been determined by entry on the register of members. The company’s legislation proceeds on that basis and would be unworkable if that were not so . . For those and other purposes the legislation makes it clear that the member is the person on the register, and where it is necessary to apply the legislation to persons who are not on the register, special provision is made . .’

Lord Phillips, President, Lord Hope, Deputy President, Lord Rodger, Lord Mance, Lord Clarke
[2010] UKSC 18, [2010] WLR (D) 113, [2010] 1 CLC 692, [2010] 2 Lloyd’s Rep 387, [2010] Bus LR 1087, 2010 SCLR 379
SC, SC Summ, Bailii, Bailii Summary, WLRD
Law Reform (Miscellaneous Provisions) (Scotland) Act 1940 3, Companies Act 2006 112, Companies Clauses Consolidation Act 1845, Companies Act 1862
Scotland
Citing:
See also – Farstad Supply As v Enviroco Ltd and Another SCS 23-Apr-2008
(Outer House) The pursuers alleged that the defendant service company was responsible in negligence for damage by fire to its oil rig supply vessel. It was said that oil they had failed to clear was released by piping when opened flowing onto a hot . .
Cited – Comex Houlder Diving Ltd v Colne Fishing Co Ltd HL 19-Mar-1987
The House considered the means of imposing liability under the 1940 Act. The House was asked whether or not a draft agreement was binding notwithstanding that it had not been formally executed as apparently envisaged by the parties.
Held: No . .
See Also – 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. . .
Appeal from – Farstad Supply AS v Enviroco Ltd and Another SCS 1-May-2009
. .
Cited – Power v Central SMT Co Ltd SCS 23-Mar-1949
Lord Keith said that the words ‘if sued’ in the subsection assume that the person from whom the contribution was sought had been: ‘relevantly, competently and timeously sued; in other words, that all the essential preliminaries to a determination of . .
Cited – Post Office v Hampshire County Council 1980
Leading counsel for the appellants argued unsuccessfully that a pre-1875 edition of Bullen and Leake’s Precedents of Pleadings had referred to an equitable doctrine of circuity in certain classes of cases, but that nothing had been heard of it for a . .
Cited – French Marine v Compagnie Napolitaine d’Eclairage et de Chauffage par le Gaz HL 1921
A ship had been requisitioned after an instalment of advance hire had become due, leading to the frustration of the charterparty. The parties disputed whether the charterers were still liable to pay the hire in full.
Held: They were. The . .
Cited – Post Office v Hampshire County Council 1980
Leading counsel for the appellants argued unsuccessfully that a pre-1875 edition of Bullen and Leake’s Precedents of Pleadings had referred to an equitable doctrine of circuity in certain classes of cases, but that nothing had been heard of it for a . .
Cited – Workington Harbour and Dock Board v Towerfield (Owners) (‘The Towerfield’) HL 1951
The occasions upon which the master is called upon to exercise his reserve of authority either by interfering with the conduct of the ship or by taking the navigation out of the hands of a competent pilot are rare and should the master exercise that . .

Cited by:
Cited – Eckerle and Others v Wickeder Westfalenstahl Gmbh and Another ChD 23-Jan-2013
By acting together, two shareholders had first refused the proposed dividend, and replaced the board. They then acquired fiurther shares and achieved a majority of more than 75%, sufficient to pass a special resolution, and proposed the cancellation . .

Lists of cited by and citing cases may be incomplete.

Damages, Contract, Company

Updated: 01 November 2021; Ref: scu.409978

Eckerle and Others v Wickeder Westfalenstahl Gmbh and Another: ChD 23 Jan 2013

By acting together, two shareholders had first refused the proposed dividend, and replaced the board. They then acquired fiurther shares and achieved a majority of more than 75%, sufficient to pass a special resolution, and proposed the cancellation of the company’s listing on the German Stock exchange, affecting the value of the remaining minority shares. Minority shareholders asked the court to reverse the de-listing decision and to order the purchase of their shares for a fair value. The majority shareholders now sought summary dismissal of the claims. The shareholdings were dematerialised and held as ‘Clearstream Interests’ and the defendants argued that on that basis the claimants did not hold the 5% of the shares necessary to make such an application.
Held: The application for summary dismissal of the claim succeeded. On its true construction, section 98 applied to the hoders of shares and not to holders of economic interests in shares: ‘a ‘shareholder’ or ‘the holder of a share’ (the terms are interchangeable) is one (and only one) whose name is registered in the register of members. There would in my view have to be an extremely strong reason to read the expression ‘the holders of not less in the aggregate than 5% in nominal value of the company’s issued share capital’ in a sense different from that indicated by the orthodox understanding of company law.’
Some of the claimants had originally voted for the resolution, and under section 98 were not permitted to seek the reveresal of the delisting.

Norris J
[2013] EWHC 68 (Ch), [2013] WLR(D) 24, [2014] BCC 1, [2014] 1 Ch 196, [2013] 3 WLR 1316
Bailii, WLRD
Companies Act 2006 97 98, Civil Procedure Rules 24
England and Wales
Citing:
Cited – National Westminster Bank Plc and Another v Inland Revenue Commissioners HL 24-Jun-1994
Shares are allotted to a person when that person acquires an unconditional right to be entered on a company’s register of members. The issue of shares only becomes complete after they are registered in the company’s books for the purposes of the BES . .
Cited – Farstad Supply As v Enviroco Ltd SC 5-May-2010
The defendants (E) were liable to F after a serious offshore accident, but sought a contribution from a third party (A), the main charterers, seeking to rely on section 3(2) o the 1940 Act saying that ‘if sued they might have been liable’. The court . .
Cited – Re Astec (BSR) Plc ChD 1999
Jonathan Parker J said: ‘The concept of ‘legitimate expectation’ . . can have no place in the context of public listed companies . . Its introduction in that context would, as it seems to me, in all probability prove to be a recipe for chaos. If the . .

Lists of cited by and citing cases may be incomplete.

Company

Leading Case

Updated: 01 November 2021; Ref: scu.470529

Re County Marine Insurance Co (Rance’s Case): 1870

The directors of an insurance company had declared a bonus by means of a an account of receipts which failed to deal properly with the risks underwritten. They then sought to have the company wound up voluntarily.
Held: The Directors could be ordered to repay the bonuses declared and paid.
Where a bonus was decided upon after a proper investigation and account, the court should be slow to iinterfere, but where there had been no such investigation it was able to intervene.

(1870) LR 6 Ch App 104, (1870) 40 LJ Fh 277, (1870) LT 828, (1870) WR 291 LJ
England and Wales
Cited by:
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, Insolvency

Leading Case

Updated: 01 November 2021; Ref: scu.467095

Smithson and others v Hamilton: ChD 10 Dec 2007

It is settled law that ‘the Hastings-Bass principle’ was not restricted to cases where the trustees failed to achieve the direct legal effect which they intended. The usual situation is that the action which the trustees have taken achieves exactly the legal effect intended but has unwelcome consequences (usually tax consequences) which the trustees failed to foresee.

Sir Andrew Park
[2007] EWHC 2900 (Ch), [2008] 1 WLR 1453
Bailii
England and Wales
Cited by:
Appeal from – Smithson and others v Hamilton CA 23-Jul-2008
. .
Cited – Futter and Another v Futter and Others ChD 11-Mar-2010
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .

Lists of cited by and citing cases may be incomplete.

Company, Trusts

Updated: 01 November 2021; Ref: scu.261961

Jones v Lipman and Another: ChD 1962

The defendant had contracted to sell his land. He changed his mind, and formed a company of which he was owner and director, transferred the land to the company, and refused to complete. The plaintiff sought relief.
Held: Specific performance is available against a contracting vendor who has it in his power to compel another person to convey the property in question. An order for specific performance was made against both the director and the company. The company could not escape from or divest itself of its knowledge gained through the director. The company was: ‘A creature of [the controlling director], a device and a sham, a mask which he holds before his face in an attempt to avoid recognition by the eye of equity.’

Russell J
[1962] 1 WLR 832, [1962] 1 All ER 442
England and Wales
Citing:
Cited – Gilford Motor Co Ltd v Horne CA 1933
The defendant was the plaintiff’s former managing director. He was bound by a restrictive covenant after he left them. To avoid the covenant, he formed a company and sought to transact his business through it. At first instance, Farwell J had found . .
Cited – Elliott and H Elliott (Builders) Ltd v Pierson ChD 1948
Harmon J: ‘At law A may contract to sell to B any defined subject matter and can enforce the contract if by the time when he is obliged to do so he has obtained a sufficient interest or can compel other interested parties to concur in the sale. It . .

Cited by:
Cited – Crawford v Financial Institutions Services Ltd PC 2-Nov-2005
(Jamaica) The government had intervened in banking institutions under the control of the appellant. Subsequently orders had been made against him for compensation in respect of loans made negligently or otherwise than in accordance with good banking . .
Cited – Coles and others (Trustees of the Ward Green Working Mens Club) v Samuel Smith Old Brewery (Tadcaster) (Unltd Company) and Another CA 29-Nov-2007
The claimants appealed refusal of an order for specific performance of a contract for the purchase of land under the exercise of an option agreement. The defendant had conveyed the land to a subsidiary in order to defeat the option.
Held: ‘The . .
Cited – Prest v Petrodel Resources Ltd and Others SC 12-Jun-2013
In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. The . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .

Lists of cited by and citing cases may be incomplete.

Company, Equity

Leading Case

Updated: 01 November 2021; Ref: scu.237486

Cathie and Another v Secretary of State for Business, Innovation and Skills: CA 1 Jun 2012

The directors appealed against disqualification orders made against them under the 1986 Act. Their company had become insolvent, owing substantial arrears of PAYE and NI contributions. The revenue had said that they had paid other creditors first.
Held: When considering appeals to avoid disqualification, a court would be better guided by the use of the phrase ‘extenuating circumstances’ than by the phrase ‘exceptional circumstances’. The court must look at the situation as a whole, to see whether the director had fallen below standards of probity and competence appropriate for persons fit to be company directors.
On a second appeal, the court should conduct a full rehearing, but give proper respect to factual findings made by the first court, and depart from such findings only for good cause.

Pill, Sullivan, Kitchin LJJ
[2012] EWCA Civ 739, [2012] WLR(D) 168
Bailii
Company Directors Disqualification Act 1986 6
England and Wales
Citing:
Cited – In re Lo-Line Electric Motors Ltd 1988
When considering the filing of additional evidence changing allegations made under the 1986 Act, the paramount requirement is that the director facing disqualification must know the charge he has to meet. As to the standard of misbehaviour required . .
Cited – In re Sevenoaks Stationers (Retail) Ltd CA 1990
The court gave guidelines for the periods of disqualification to be applied for company directors under the Act. The maximum period of ten years should be reserved for only the most serious of cases. Periods of two to five years should apply to . .
Cited – In re Grayan Building Services Ltd CA 1995
The degree to which an appellate court will be willing to substitute its own judgment for that of the tribunal will vary with the nature of the question. Hoffmann LJ said: ‘The concept of limited liability and the sophistication of our corporate law . .
Cited – Secretary of State for Trade and Industry v McTighe CA 1997
Morritt LJ, giving the judgment of the court, distinguished between the conduct of two directors, disqualifying one for twelve years and the other for eight. He said: ‘The period for disqualification is a matter for the discretion of the judge . .
Cited – Re Verby Print For Advertising Ltd ChD 1998
An application for disqualification orders was made on the basis of the directors’ failure to pay tax.
Held: Neuberger J said: ‘I would accept the grave nature of an allegation of unfitness under section 6(1)(b) of the 1986 Act must be borne . .
Cited – In Re Structural Concrete Ltd, Barnes and Others ChD 29-Jun-2000
In order to try to trade out of difficulties, company directors decided to give priority to the payment of trade and banking debts over debts due to the revenue.
Held: An appeal against the refusal to disqualify the Directors succeeded. There . .
Cited – In Re Carecraft Construction Co Ltd ChD 13-Oct-1993
A court must hear evidence before disqualifying directors. Though the Director and the Secretary of State might reach an agreement as to what should happen, they could not displace the court in deciding what order should be made, and in making that . .
Cited – Re Moonlight Foods Ltd , Secretary of State for Trade and Industry v Hickling 1996
The Secretary of State, when presenting an application for the disqualification of a company director is obliged to present a balanced picture. ‘It is accepted that these are not ordinary adversarial proceedings but have an element of public . .
Cited – Secretary of State for Business, Innovation and Skills v Doffman and Another ChD 11-Oct-2010
The defendants applied for directors’ disqualification proceedings for the claim to be struck out or dismissed on the ground that the respondent had breached their rights to a fair trial under Article 6 of the European Convention on Human Rights . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 November 2021; Ref: scu.460368

Burnden Holdings (UK) Ltd v Fielding and Another: CA 17 Jun 2016

The company, now in liquidation sought to claim for the alledged misapplication by former directors of its funds in 2007. It now appealed against a summary rejection of its claim as time barred.
Held: The appeal succeeded. Section 21(1)(b) provides that no period of limitation prescribed by the Act applies to an action by a beneficiary under a trust ‘to recover from the trustee trust property or the proceeds of trust property in the possession of the trustee, or previously received by the trustee and converted to his use.’ That was to be taken not to be restricted to the personal receiot by the defendant but should include sums paid into a third party company to achieve a similar effect.

Arden , Tomlinson , David Richards LJJ
[2016] EWCA Civ 557, [2016] WLR(D) 313
Bailii, WLRD
Limitation Act 1980 21, Companies Act 1985 263
England and Wales
Citing:
Appeal from – Burnden Holdings (UK) Ltd v Fielding and Another ChD 5-Sep-2014
The company sought to recover from the defendants, two former directors.
Held: The claim was statute barred.
Hodge QC dealt with the claimant’s reliance on section 32: ‘That leaves the claimant’s reliance upon section 32. There the . .
Approved – In re Pantone 485 Ltd ChD 29-Nov-2001
The respondent Bain was a director of a number of connected companies, including Smarturgent and Pantone, both of which he indirectly controlled. The liquidator of both companies brought proceedings against Bain on a number of claims for breach of . .
Cited – Cave v Robinson Jarvis and Rolf (a Firm) HL 25-Apr-2002
An action for negligence against a solicitor was defended by saying that the claim was out of time. The claimant responded that the solicitor had not told him of the circumstances which would lead to the claim, and that deliberate concealment should . .
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 . .
Cited – JD Wetherspoon Plc v Van De Berg and Co Ltd and others ChD 4-May-2007
Lewison J summarised the approach to be taken by courts hearing an application by defendants to strike out claims: ‘Both the application to strike out and the application for summary judgment are summary applications. The application for summary . .

Lists of cited by and citing cases may be incomplete.

Company, Limitation, Trusts

Updated: 01 November 2021; Ref: scu.565725

Harris v Secretary of State for Business, Innovation and Skills: ChD 9 Aug 2013

The claimant had offered an undertaking not to act as a company director for a period of time, to avoid applications for his disqualification. He now sought leave to act.
Held: The applicant had: ‘put forward ample evidence to justify a finding that he is skilled and experienced at marketing and sales and would be valuable to any company in that role at a managerial level. As to what the evidence does not show, it does not demonstrate that H has a track record, experience, skills or training in successful or competent financial management of a company or business; it also does not demonstrate that H has any background or training in licensed credit finance, whether for hire or sale.’
Applying the principles from the authorities in this case, any permission would have been subject to additional conditions appropriate to the situation, but he had not demonstrated the level of need required to permit his involvement in companymanagement.

Simon Barker QC
[2013] EWHC 2514 (Ch)
Bailii
Company Directors Disqualification Act 1986 1A
England and Wales
Citing:
Cited – In re Sevenoaks Stationers (Retail) Ltd CA 1990
The court gave guidelines for the periods of disqualification to be applied for company directors under the Act. The maximum period of ten years should be reserved for only the most serious of cases. Periods of two to five years should apply to . .
Cited – Re Tech Textiles Ltd ChD 1998
A disqualified director sought leave under section 17 to act as a director or be concerned or take part in the management of 3 companies and was successful in respect of 1 company. Arden J looked at the statutory basis and observed that the purpose . .
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 – Re Dawes and Henderson Agencies Ltd ChD 1999
Sir Richard Scott V-C considered the effect of the relative strength of the case as to need on the degree of risk to the public that might be acceptable on any resumption of company director responsibilities, and concluded that in a strong case of . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 November 2021; Ref: scu.514979

Secretary of State for Business Enterprise and Regulatory Reform v Sullman and Another: ChD 19 Dec 2008

An application was made to disqualify as a company director a former director of Claims Direct Limited. He had been accused of several actions which might justify a disqualification.
Held: The court found misconduct but delayed a decision on whether it was sufficient to found a disqualification. The court should look at such matters properly but in the round; ‘unfitness may be demonstrated by conduct which does not involve a breach of any statutory or common-law duty, but which, for example, constitutes a failure to achieve an acceptable standard of commercial probity. ‘ On that basis the failure to warn policy holders that their premiums would not be recoverable was a sufficient fault. The director had also misrepresented the viability of the actions being funded; it was at about 50% rather than 90%. He had also misled investors on the flotation of the company. ‘Each instance of conduct has the hallmark that it was undertaken either (a) to acquire business or capital for the company or (b) to confer a personal advantage on a director; and in each case it did so to the prejudice of those who had entered or were about to enter commercial relationships with Claims Direct or who would be affected by the entry of such relationships. The prejudice consisted in inviting a section of the public to deal with the company on what was a false basis in a material particular (or suffer the consequences of some-one else having done so). In my judgement companies should not be conducted on that basis if their liability to those with whom they deal is limited. It falls below the standards of commercial probity which the law is entitled to expect’

Norris J
[2008] EWHC 3179 (Ch)
Bailii
Company Directors Disqualification Act 1986 8(1), The Solicitors’ Introduction and Referrals Code 1990 2(3)
England and Wales
Citing:
Cited – In re Sevenoaks Stationers (Retail) Ltd CA 1990
The court gave guidelines for the periods of disqualification to be applied for company directors under the Act. The maximum period of ten years should be reserved for only the most serious of cases. Periods of two to five years should apply to . .
Cited – Secretary of State for Trade and Industry v Griffiths; Conway and Wassell; In Re Westmid Packing Services Ltd CA 16-Dec-1997
Guidance given on what evidence should be admitted to affect the length of disqualification and conditions of Director’s disqualification.
A director’s duty to exercise his powers in the best interests of the company and to recognise the . .
Cited – British and Commonwealth Holdings Plc (In Administration) v Barclays De Zoete Wedd Ltd; Same v Atlantic Computers Plc, David Mccormick and Others; Etc ChD 13-Nov-1998
The fact that evidence had been obtained under compulsion was not sufficient reason to prevent its disclosure for other civil matters if the Rule’s requirements were met and it was necessary to achieve fairness or reduction in costs. . .
Cited – in Re Atlantic Computers PLC ChD 15-Jun-1998
Timothy Lloyd J summarised the authorities on the standard of misbehaviour to be shown to found disqualification of a company director and said: ‘ In order to disqualify a respondent the court has to be satisfied that he or she ‘has fallen below the . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 November 2021; Ref: scu.278996

Aluminium Industrie Vaassen B V v Romalpa Aluminium Ltd: CA 16 Jan 1976

The seller sold aluminium to the defendant, but included a clause under which they retained title in the materials sold, even if mixed in with manufactured goods, until they had been paid for the metal. The defendants appealed a finding that the receivers held the proceeds of sale of the manufactured goods on trust for the plaintiffs.
Held: The appeal failed. The intention of the clause was to secure for as long as possible payment of the purchase price of the aluminium. There had to be read into the contract a duty on the defendant to act under the fiduciary relationship of principal and agent, bailor and bailee, as was contemplated in the clause. The plaintiffs could trace the proceeds of the sub-sales, and recover them.

Megaw, Roskill and Goff L.JJ
[1976] 1 WLR 676
lip
England and Wales
Citing:
Cited – In re Hallett’s Estate; Knatchbull v Hallett CA 1880
Where a trustee of a policy used money received from others to make payment of premiums on an insurance policy, they would be entitled to a lien on the policy. Where an asset was acquired exclusively with trust money, the beneficiary could either . .

Lists of cited by and citing cases may be incomplete.

Insolvency, Company, Equity, Agency

Leading Case

Updated: 01 November 2021; Ref: scu.174733

Marleasing SA v La Comercial Internacional de Alimentacion SA: ECJ 13 Nov 1990

Sympathetic construction of national legislation

LMA OVIEDO sought a declaration that the contracts setting up Commercial International were void (a nullity) since they had been drawn up in order to defraud creditors. Commercial International relied on an EC Directive designed to protect companies and third parties from the adverse effects of the doctrine of nullity. The Directive should have been implemented in 1986 but the Spanish authorities had failed to implement the Directive. The Spanish judge sought a ruling under Art.177[Art.234] EC as to whether the (non-implemented) Directive was directly effective.
Held: ECJ ruled (ruling is usually applied in the case of unimplemented directives in preference to Von Colson).

Upholding Marshall decision that a Directive cannot impose obligations on private parties (no HDE).

Re-affirmed the position in Van Colson and Harz ‘that national courts must as far as possible interpret national law in the light of the wording and purpose of the Directive in order to achieve the result pursued by the Directive’ whilst ‘having regard to the usual methods of interpretation in its legal system, give precedence to the method which enables it to construe the national provision concerned in a manner consistent with the directive.’

Adding, that this obligation applied, whether the national provisions in question were adopted before or after the Directive was issued.

National courts are ‘required’ to interpret domestic law in such a way as to ensure that the objectives of the Directive were achieved.
Europa The Member States’ obligation arising from a directive to achieve the result envisaged by the directive and their duty under Article 5 of the Treaty to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts. It follows that, in applying national law, whether the provisions in question were adopted before or after the directive, the national court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by it and thereby comply with the third paragraph of Article 189 of the Treaty,
A national court hearing a case which falls within the scope of Directive 68/151 on the coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community, is required to interpret its national law in the light of the purpose and the wording of that directive in order to preclude a declaration of nullity of a public limited company on a ground other than those listed in Article 11 of the directive. Those grounds must themselves be strictly interpreted, in the light of that purpose, so as to ensure that nullity on the ground that the objects of the company are unlawful or contrary to public policy must be understood as referring exclusively to the objects of the company as described in the instrument of incorporation or the articles of association.
‘in applying national law, whether the provisions in questions were adopted before or after the directive, the national court called upon to interpret it is required to do so, as far as possible, in the light of the wording and purpose of the directive in order to achieve the result pursued by the latter . . ‘

(1992) 1 CMLR 305, C-106/89, [1990] ECR I-4135, [1990] EUECJ C-106/89, [1990] 1 ECR 3313
Bailii
EEC Treaty 5 189, Council Directive 68/151 A-11
European
Cited by:
Cited – Regina v Johnstone HL 22-May-2003
The defendant was convicted under the 1994 Act of producing counterfeit CDs. He argued that the affixing of the name of the artist to the CD was not a trade mark use, and that the prosecution had first to establish a civil offence before his act . .
Cited – Inter Lotto (Uk) Ltd v Camelot Group Plc CA 30-Jul-2003
The claimant and defendant had each operated using a the name ‘HotSpot’ for a name for its lottery. The respondent had registered the name as a trade mark. The claimant began to use the name first and claimed in passing off, and the respondent . .
Cited – Jones, Regina (on the Application of) v Mansfield District Council and Another CA 16-Oct-2003
Plannning permission was sought. Objectors said that it would have such an impact that an environmental impact assessment was required. They now sought judicial review of the decision to proceed without one.
Held: The judge had explained the . .
Cited – Clarke v Kato and Others; Cutter v Eagle Star Insurance Co Ltd HL 25-Nov-1998
Save exceptionally, a car park is not a road for the purposes of road traffic legislation on obligatory insurance. It is an unjustified strain on the language. A distinction made between the road ways and the parking bays was artificial and . .
Cited – Regina (Amicus etc) v Secretary of State for Trade and Industry Admn 26-Apr-2004
The claimants sought a declaration that part of the Regulations were invalid, and an infringement of their human rights. The Regulations sought to exempt church schools from an obligation not to discriminate against homosexual teachers.
Held: . .
Cited – Ghaidan v Godin-Mendoza HL 21-Jun-2004
Same Sex Partner Entitled to tenancy Succession
The protected tenant had died. His same-sex partner sought a statutory inheritance of the tenancy.
Held: His appeal succeeded. The Fitzpatrick case referred to the position before the 1998 Act: ‘Discriminatory law undermines the rule of law . .
Cited – Derbyshire Waste Ltd v Blewett and Another CA 11-Nov-2004
Glapswell Colliery had closed. The owners sought to use it for waste disposal by landfill. The objector had obtained judicial review of the permission granted.
Held: The intention of the Landfill Directive was to discourage its use other than . .
Cited – British Airways Plc v Ryanair Limited ChD 25-Oct-2000
The claimant alleged that disparaging adverts by the defendant infringed its trade marks and amounted to the tort of malicious falsehood.
Held: There was no dispute that the mark had been used. The Act could not be used to prevent any use of . .
Cited – Bowman v Fels (Bar Council and Others intervening) CA 8-Mar-2005
The parties had lived together in a house owned in the defendant’s name and in which she claimed an interest. The claimant’s solicitors notified NCIS that they thought the defendant had acted illegally in setting off against his VAT liability the . .
Cited – Percy v Church of Scotland Board of National Mission HL 15-Dec-2005
The claimant appealed after her claim for sex discrimination had failed. She had been dismissed from her position an associate minister of the church. The court had found that it had no jurisdiction, saying that her appointment was not an . .
Cited – Webb v EMO Air Cargo (UK) Ltd (No 1) HL 3-Mar-1993
Questions on pregnancy dismissals included unavailability at required time. The correct comparison under the Act of 1975 was between the pregnant woman and: ‘a hypothetical man who would also be unavailable at the critical time. The relevant . .
Cited – Feakins and Another v Department for Environment Food and Rural Affairs (Civ 1513) CA 9-Dec-2005
The department complained that the defendants had entered into a transaction with their farm at an undervalue so as to defeat its claim for recovery of sums due. The transaction used the grant of a tenancy by the first chargee.
Held: The . .
Cited – Revenue and Customs v IDT Card Services Ireland Ltd CA 27-Jan-2006
Under the Marleasing principle, or principle of conforming interpretation, the domestic court of a member state must interpret its national law so far as possible in the light of the wording and purpose of the Directive in question. However this . .
Cited – Vibixa Ltd, Polestar Jowetts Ltd v Komori UK Ltd and Another, Spectral Technology Ltd CA 9-May-2006
The claimants sought damages for damage to property alleging breach of statutory duty. The defendant said that the regulations were made under European not English law, and that the Secretary of State did not have power to make regulations under the . .
Cited – It’s A Wrap (UK) Ltd v Gula and Another CA 11-May-2006
The company was said to have paid dividends unlawfully, in that the directors who were the shareholders had paid themselves dividends knowing that the company had not earned enough to pay them.
Held: Where shareholders had knowledge of the . .
Cited – Nova Productions Ltd v Mazooma Games Ltd and others CA 14-Mar-2007
The defendant appealed against a finding of copyright infringement in a computer game.
Held: The appeal failed. The court must identify the artistic work relied upon and then decide whether it has been reproduced by copying of the work as a . .
Cited – Murphy v Media Protection Services Ltd Admn 21-Dec-2007
The prosecutor appealed dismissal of a charge of receiving a broadcast television programme with intent to avoid payment. The defendant ran a public house. She acquired a card which allowed her to receive transmissions from a Greek satellite . .
Cited – Hurst, Regina (on the Application of) v Commissioner of Police of the Metropolis v London Northern District Coroner HL 28-Mar-2007
The claimant’s son had been stabbed to death. She challenged the refusal of the coroner to continue with the inquest with a view to examining the responsibility of any of the police in having failed to protect him.
Held: The question amounted . .
Cited – Age UK, Regina (On the Application of) v Attorney General Admn 25-Sep-2009
Age UK challenged the implementation by the UK of the Directive insofar as it established a default retirement age (DRA) at 65.
Held: The claim failed. The decision to adopt a DRA was not a disproportionate way of giving effect to the social . .
Cited – British Airways Plc v Williams and Others SC 24-Mar-2010
The court was asked as to the calculation of annual leave pay for crew members in civil aviation under the Regulations. The company argued that it was based on the fixed annual remuneration, and the pilots argued that it should include other . .
Cited – Churchill Insurance Company Ltd v Wilkinson and Others CA 19-May-2010
The various insured defendants had been driven in the insured vehicles by a non-insured driver. Suffering injury at the negligence of the driver, they recovered variously damages. Their insurance companies sought recovery of the sums paid from their . .
Cited – O’Brien v Ministry of Justice SC 28-Jul-2010
The appellant had worked as a part time judge. He now said that he should be entitled to a judicial pension on retirement by means of the Framework Directive. The Regulations disapplied the provisions protecting part time workers for judicial office . .
Cited – Bloomsbury International Ltd v Sea Fish Industry Authority and Department for Environment, Food and Rural Affairs SC 15-Jun-2011
The 1995 Regulations imposed a levy on fish both caught and first landed in the UK and also on imported fish products. The claimants, importers challenged the validity of the latter charges, saying that they went beyond the power given by the 1981 . .
Cited – Twentieth Century Fox Film Corp and Others v British Telecommunications Plc ChD 28-Jul-2011
The claimant rights holders sought an order to require the defendant broadband internet provider to deny access to its users to websites which were said to facilitate the distribution of infringing copies of their films. An earlier judgment had . .
Cited – Jivraj v Hashwani SC 27-Jul-2011
The parties had a joint venture agreement which provided that any dispute was to be referred to an arbitrator from the Ismaili community. The claimant said that this method of appointment became void as a discriminatory provision under the 2003 . .
Cited – Houldsworth and Another v Bridge Trustees Ltd and Another SC 27-Jul-2011
The court was asked as to the dividing line, for regulatory purposes, between defined benefit (normally earnings-related) schemes and defined contribution (or money purchase) schemes. The Secretary of State asserted that some methods used to . .
Cited – Rossetti Marketing Ltd v Diamond Sofa Company Ltd and Another QBD 3-Oct-2011
Rossetti_diamondQBD2011
The claimants sought compensation under the 1993 Rules. The defendants denied that the claimants were agents within the rules, since they also acted as agents for other furniture makers.
Held: Whether a party is a commercial agent within the . .
Cited – Forensic Telecommunications Services Ltd v West Yorkshire Police and Another ChD 9-Nov-2011
The claimant alleged infringement by the defendant of assorted intellectual property rights in its database. It provided systems for recovering materials deleted from Nokia mobile phones.
Held: ‘the present case is concerned with a collection . .
Cited – Russell and Others v Transocean International Resources Ltd and Others SC 7-Dec-2011
russell_transocean
The appellants worked on various shifts for the defendants in off-shore oil-fields. They were given on-shore rest breaks, which the employers said should count toward their holiday entitlements.
Held: The Court dismissed the employees’ appeal . .
Cited – Test Claimants In The Franked Investment Income Group Litigation v Inland Revenue SC 23-May-2012
The European Court had found the UK to have unlawfully treated differently payment of franked dividends between subsidiaries of UK companies according to whether all the UK subsidiaries were themselves UK based, thus prejudicing European . .
Cited – X v Mid Sussex Citizens Advice Bureau and Another SC 12-Dec-2012
The appellant was disabled, had legal qualifications, and worked with the respondent as a volunteer. She had sought assistance under the Disability Discrimination Act, now the 2012 Act, saying that she counted as a worker. The tribunal and CA had . .
Cited – The Newspaper Licensing Agency Ltd and Others v Meltwater Holding Bv and Others ChD 26-Nov-2010
The claimant newspapers complained of the spidering of the web-sites and redistribution of the materials collected by the defendants to its subscribers. The defendants including the Public Relations Consultants Association (PRCA) denied that they . .
Cited – Digital Satellite Warranty Cover Ltd and Another v Financial Services Authority SC 13-Feb-2013
The appellants challenged an order for the dissolution of their company under the 2000 Acts. They had provided warranties for assorted consumer electrical goods which amounted to insurance, but said that they were not required to be registered under . .
Cited – EM (Eritrea), Regina (on The Application of) v Secretary of State for The Home Department SC 19-Feb-2014
SSHD must examine safety of country for return
The Court was asked: ‘Is an asylum seeker or refugee who resists his or her return from the United Kingdom to Italy (the country in which she or he first sought or was granted asylum) required to establish that there are in Italy ‘systemic . .
Cited – NATS (Services) Ltd v Gatwick Airport Ltd and Another TCC 2-Oct-2014
NATS had tendered unsuccessfully for a contract to provide air traffic control services at Gatrwick airport, and challenged the award. GAL denied that the Regulations applied and now sought disapplication of the automatic suspension from the award . .
Cited – Miller and Another, Regina (on The Application of) v Secretary of State for Exiting The European Union SC 24-Jan-2017
Parliament’s Approval if statute rights affected
In a referendum, the people had voted to leave the European Union. That would require a notice to the Union under Article 50 TEU. The Secretary of State appealed against an order requiring Parliamentary approval before issuing the notice, he saying . .
Cited – The United States of America v Nolan SC 21-Oct-2015
Mrs Nolan had been employed at a US airbase. When it closed, and she was made redundant, she complained that the appellant had not consulted properly on the redundancies. The US denied that it had responsibility to consult, and now appealed.
Cited – Moreno v The Motor Insurers’ Bureau SC 3-Aug-2016
The claimant had been severely injured when hit by a car in Greece. The car’s driver was uninsured. The Court was now asked whether the scope of her claim to damages was to be determined in accordance with English or Greek law. The implementation of . .
Cited – Nuclear Decommissioning Authority v Energysolutions EU Ltd (Now Called ATK Energy EU Ltd) SC 11-Apr-2017
This is an appeal on preliminary points of European Union and domestic law regarding the circumstances in which damages may be recoverable for failure to comply with the requirements of the Public Procurement Directive (Parliament and Council . .
Cited – P v Commissioner of Police of The Metropolis SC 25-Oct-2017
This appeal concerns the directly effective right of police officers under EU law to have the principle of equal treatment applied to them. The question raised is whether the enforcement of that right by means of proceedings in the Employment . .
Cited – Z and Another, Regina (on The Application of) v Hackney London Borough Council and Another SC 16-Oct-2020
Housing Orthodox Jewish Only not Discriminatory
Hackney had statutory housing functions as to allocating social housing. It also nominated applicants to properties owned by housing associations, including AIHA, which only accepted for such nominations households belonging to the Orthodox Jewish . .

Lists of cited by and citing cases may be incomplete.

Company, Constitutional

Leading Case

Updated: 01 November 2021; Ref: scu.160251

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 abuse of process where a Plaintiff issues a Writ and then maintains the action in being, neither desiring nor intending to bring it to trial, but merely hoping to place a gag upon his critics.
The court is cautious about making declarations on the basis of admissions or concessions; declaration cannot be granted by consent or by default. There must be a proper examination by the court of the relevant facts, assessed in the light of the applicable law, before a judge can be satisfied, as he must be if the relief sought is to be granted, that the claim for the declaration is indeed made out
Lord Denning MR described the companies as being ‘just the puppets of Dr Wallersteiner’ which ‘danced to his bidding’ as ‘he pulled the strings’ and were according his ‘creatures’.

Buckley LJ, Lord Denning MR, Scarman LJ
[1974] 1 WLR 991
England and Wales
Cited by:
Cited – Point Solutions Ltd v Focus Business Solutions Ltd and Another ChD 16-Dec-2005
It was claimed that the defendant’s computer software infringed the copyright in software owned by the claimant. A declaration was sought beacause of allegations that assertions about infringement had been made to third parties.
Held: The . .
Cited – Buckley v Dalziel QBD 3-May-2007
There was a heated dispute between neighbours, culminating in some generous or perhaps over-generous pruning by the claimant of the defendant’s trees and shrubs on the boundaries. The defendants reported the matter to the police. Both Mr and Mrs . .
Cited – Office of Fair Trading v Abbey National Plc and others ComC 8-Oct-2008
The director sought a further judgment as to whether charges imposed by banks on a customer taking an unauthorised overdraft, and otherwise were unlawful penalties. . .
See Also – 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 . .
Cited – In the matter of the Human Fertilisation and Embryology Act 2008 ; A and Others FD 11-Sep-2015
The court was asked: ‘who, in law, is or are the parent(s) of a child born as a result of treatment carried out under this legislation’
Held: The court pointed again to the failures to keep proper records within several fertility clinics. . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .

Lists of cited by and citing cases may be incomplete.

Litigation Practice, Company

Leading Case

Updated: 01 November 2021; Ref: scu.237718

Ferster v Ferster and Others: CA 12 Jul 2016

Appeal from a decision allowing an application by the respondent to amend his petition under the unfair prejudice provisions of te 2006 Act so as to refer to the contents of an email sent in the context of a mediation, and thus would normally be the subject of mediation/without prejudice privilege. The judge held, however, that the contents of the email showed that it fell within the ‘unambiguous impropriety’ exception to that privilege, and thus was available for use in the petition.

Patten, Floyd LJJ, Baker J
[2016] EWCA Civ 717
Bailii
Companies Act 2006 994
England and Wales

Litigation Practice, Company

Updated: 01 November 2021; Ref: scu.566849

889457 Alberta Inc v Katanga Mining Ltd and others: ComC 5 Nov 2008

The parties had set out on a joint venture with deeds providing for control of the shareholdings in each other. The claimant asserted a breach of the deed and sought a remedy. The first defendant company, incorporated in Bermuda argued that the court should decline jurisdiction infavour of the courts in Congo. The second and third defendants argued against this saying that they were the principle defendants and that the case should be tried in England.
Held: Congo was not an appropriate forum since the normal infrastructure of state was not available.

Tomlinson J
[2008] EWHC 2679 (Comm), [2009] 1 BCLC 189, [2009] ILPr 14
Bailii
England and Wales
Citing:
Cited – Owusu v Jackson ECJ 1-Mar-2005
ECJ Brussels Convention – Territorial scope of the Brussels Convention – Article 2 – Jurisdiction – Accident which occurred in a non – Contracting State – Personal injury – Action brought in a Contracting State . .
Cited – Sim v Robinow 1892
The task of the court in deciding jurisdiction is to identify the forum in which the case can be suitably tried for the interests of all the parties and for the ends of justice: . .
Cited – Spiliada Maritime Corporation v Cansulex Ltd, The Spiliada HL 1986
Forum Non Conveniens Restated
The House reviewed the authorities on the principle of forum non conveniens and restated how to apply the principle where the defendant seeks a stay of proceedings on the ground that there is another more appropriate forum.
Held: ‘In the . .
Cited – The Rewia CA 1991
The court considered a jurisdiction clause in a bill of lading which referred to the carrier’s principal place of business. The central management and control of the company was in Germany and the question was whether that was also its principal . .
Cited – Ministry of Defence and Support of the Armed Forces for the Islamic Republic of Iran v Faz Aviation Ltd and Another ComC 9-May-2007
Challenge by defendant to jurisdiction to bring claim. . .
Cited – King v Crown Energy Trading AG and another ComC 11-Feb-2003
The defendant, a company incorporated in Russia, sought to set aside proceedings served on it. The contract made the agreement subject to the laws of England and Wales, but the Convention made the jurisdiction clause unenforceable. Evidence . .
Cited – Canada Trust Co and Others v Stolzenberg and Others (No 2) HL 12-Oct-2000
The plaintiffs alleged the involvement of the defendant in a conspiracy to defraud. He had been domiciled in England, but had moved to Germany. He denied that the UK court had jurisdiction. The court of appeal said that jurisdiction was determined . .
Cited – British Aerospace v Dee Howard 1993
Where a contract contained an exclusive jurisdiction clause providing for a case to be tried in the UK, it was relevant that the circumstances which might now suggest a trial elsewhere were perfectly foreseeable at the time of the contract. The new . .
Cited – United Film Distribution Limited; United Pictures (India) Exports Private Limited v Chhabria; Chhabria; Spark Entertainments Limited; Spark Media Limited; Fairdeal Exports Private Limited and Mathilda International SA CA 28-Mar-2001
The court rules, which dealt with the grant of permission to serve documents out of the jurisdiction under rule 6.20(2), were no less wide than the power in the court with regard to the substitution, or addition, of parties under Rule 19.1(2). The . .
Cited – Konkola Copper Mines Plc v Coromin Admn 10-May-2005
Re-insurers liability under Part 20 claims. . .

Lists of cited by and citing cases may be incomplete.

Jurisdiction, Company

Updated: 01 November 2021; Ref: scu.277553

Aluminium Industrie Vaassen B V v Romalpa Aluminium Ltd: ChD 11 Feb 1975

The plaintiffs sold aluminium to the defendant and by a clause in the contract retained their title in the materials sold until payment was received. The purchaser went into insolvent receivership, and the seller sought recovery of the equipment and proceeds of sale of articles made from the materials. The defendants allowed that they had been bailees of the material supplied by the plaintiffs until all debts were paid, but claimed that this was overridden by sales to bona fide purchasers.
Held: The clause showed an intention to create a fiduciary arrangement between seller and buyer, and the plaintiffs were entitled to recover the proceeds of sales to third parties.

Mocatta J
[1976] 1 WLR 676
lip
England and Wales
Citing:
Cited – King v Hutton CA 1900
‘The most compelling indicator for or against a trusteeship of an agent’s receipts is the nature of the account agreed to be kept by the agent with his principal. If, after each individual transaction or group of related transactions he effects for . .
Cited – Henry v Hammond KBD 1913
Channell J said: ‘It is clear that if the terms upon which the person receives the money are that he is bound to keep it separate, either in a bank or elsewhere, and to hand that money so kept as a separate fund to the person entitled to it, then he . .
Cited – In re Hallett’s Estate; Knatchbull v Hallett CA 1880
Where a trustee of a policy used money received from others to make payment of premiums on an insurance policy, they would be entitled to a lien on the policy. Where an asset was acquired exclusively with trust money, the beneficiary could either . .
Cited – In re Diplock’s estate CA 1948
After considering a situation in which trust money had been applied in making alterations to the property of an innocent third party but had not added to the value of the property,
Held: The origin of the equitable rules of tracing were . .

Lists of cited by and citing cases may be incomplete.

Company, Contract, Insolvency, Equity

Leading Case

Updated: 01 November 2021; Ref: scu.174718

Leventis and Vafias v Malcon Navigation Co Ltd and another: ECJ 28 Jun 2017

Third Party not bound by jurisdiction clause

ECJ (Judicial Cooperation In Civil Matters Area of Freedom, Security and Justice : Judgment) Language of the case: Greek. for a preliminary ruling – Judicial cooperation in civil matters – Jurisdiction and the enforcement of judgments in civil and commercial matters – Regulation (EC) No 44/2001- Article 23 – Jurisdiction clause – Jurisdiction clause in a contract between two companies – Action for damages – Joint and several liability of representatives of one of those companies for tortious acts – Ability of the representatives to rely upon that clause

A Prechal P
ECLI:EU:C:2017:497, [2017] WLR(D) 428, [2017] EUECJ C-436/16
WLRD, Bailii
Council Regulation (EC) No 44/2001 23
European

Jurisdiction, Contract, Company

Updated: 01 November 2021; Ref: scu.588732

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 composite company scheme, and in each of which he retained one share. When the companies became insolvent, HMRC said that the companies had paid dividends without the supporting assets, and that H was a de facto director having retained a single share in each company through his own company. No allegation was made that this structure was a sham and there was never any pleading of dishonesty. HMRC now appealed a finding that he was not so liable.
Held: The appeal failed (Lords Walker and Clarke dissenting). The mere fact of acting as a director of a corporate director will not be enough for an individual to become a de facto director of the subject company. Acts entirely within the ambit of the duties and responsibilities of a director of the corporate director, are to be attributed to that capacity. The court must respect the separate identities in law of the various companies. The court must look to the actual actions of the person to see whether they amounted to an assumption of the responsibilities of a director.
Lord Walker said that a person which takes all the important decisions of a company’s management, and ensures that they are given effect to acts as a director. He would have allowed the appeal.

Lord Hope, Deputy President, Lord Walker, Lord Collins, Lord Clarke, Lord Saville
[2010] UKSC 51, UKSC 2009/0131, [2010] STI 3074, [2010] 1 WLR 2793, [2011] BCC 1, [2011] 1 All ER 430, [2011] Bus LR 111
Bailii, SC Summary, SC, Bailii Summary
Insolvency Act 1986 212
England and Wales
Citing:
At First Instance – HM Revenue and Customs v Holland and Another ChD 24-Jun-2008
The Revenue sought to recover from the defendant substantial sums in respect of allegedly unlawful dividends paid from an insolvent company. They said that the defendant and his wife were de facto directors.
Held: Claims agains the second . .
Appeal from – 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 – Salomon v A Salomon and Company Ltd HL 16-Nov-1896
A Company and its Directors are not same paersons
Mr Salomon had incorporated his long standing personal business of shoe manufacture into a limited company. He held nearly all the shares, and had received debentures on the transfer into the company of his former business. The business failed, and . .
Cited – In re Lo-Line Electric Motors Ltd 1988
When considering the filing of additional evidence changing allegations made under the 1986 Act, the paramount requirement is that the director facing disqualification must know the charge he has to meet. As to the standard of misbehaviour required . .
Cited – Re Kaytech International plc; Secretary of State for Trade and Industry v Kaczer and others CA 1999
Robert Walker LJ said that the expression ‘de facto director’ had been in use for a long time, and commented on the failure to distinguish in pleadings between pleas that someone was a shadow or a de facto director. The two different labels were not . .
Cited – Re Canadian Land Reclaiming and Colonizing Co CA 1880
The court was asked whether two individuals who had been appointed and acted as directors while they were ineligible were directors or other officers liable to a summons for misfeasance.
Held: The test was was whether a man who had assumed a . .
Cited – In re Hydrodam (Corby) Limited ChD 1994
ET plc wholly owned MCP Ltd which wholly owned Landsaver MCP Limited, which wholly owned Hydrodam (Corby) Limited (‘HCL’). The only de jure directors of HCL were two Channel Island companies. HCL went into compulsory liquidation and its liquidator . .
Cited – Re County Marine Insurance Co (Rance’s Case) 1870
The directors of an insurance company had declared a bonus by means of a an account of receipts which failed to deal properly with the risks underwritten. They then sought to have the company wound up voluntarily.
Held: The Directors could be . .
Cited – Re Exchange Banking Co, Flitcroft’s Case CA 1882
For several years, the company had paid dividends drawn against false accounts, and paid them to the directirs as shareholders. When in insolvent liquidation, the copany sued thosee directors for the return of all the dividends wrongly paid out.
Cited – Re Lands Allotment Company CA 1894
A limited company is not a trustee of its funds, but their beneficial owner. However, the fiduciary character of the duties of its directors mean that they are treated as if they were trustees of those funds of the company which are in their hands . .
Cited – In re Kingston Cotton Mill (No 2) ChD 1895
The power to order a director to repay a company’s funds lost as a result of ‘misfeasance’ does not apply to conduct engaged in honestly and reasonably.
Vaughan Williams J disused the general principle the directors will be liable to restore . .
Cited – 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 . .
Cited – Re Loquitur Ltd ChD 2003
. .
Cited – Belmont Finance Corporation Ltd v Williams Furniture Ltd (No 2) 1980
It had been alleged that there had been a conspiracy involving the company giving unlawful financial assistance for the purchase of its own shares.
Held: Dishonesty is not a necessary ingredient of liability in an allegation of a ‘knowing . .
Cited – Dovey and The Metropolitan Bank (of England and Wales), Limited v Cory HL 1901
In fulfilling this personal fiduciary responsibility, a director is entitled to rely upon the judgment, information and advice of a fellow director whose integrity skill and competence he has no reason to suspect.
Earl of Halsbury LC said ‘The . .
Cited – Selangor United Rubber Estates Ltd v Cradock (No 3) ChD 1968
The expressions ‘constructive trust’ and ‘constructive trustee’ are ‘nothing more than a formula for equitable relief. It is the actual control of assets belonging beneficially to a company which causes the law to treat directors as analogous to . .

Lists of cited by and citing cases may be incomplete.

Company, Corporation Tax

Leading Case

Updated: 01 November 2021; Ref: scu.426472

Progress Property Company Ltd v Moorgarth Group Ltd: SC 8 Dec 2010

The appellants appealed against rejection of their claim that there had been an unlawful distribution of capital when the appellant had sold the share capital of a subsidary at an undervalue to the respondent purchaser. The valuation had miscalculated the existence of an indemnity against liability to repair leasehold properties.
Held: The appeal failed. The question of whether there had been an unlawful distribution of capital at common law was an issue of the substantial effect of the transaction, and not its form. An entirely objective view would be repressive and unworkable, and the court should look to the true nature and purpose of the transaction. In this case the parties had intended a true commercial sale and purchase, and it was not to be set aside.

Lord Phillips, President, Lord Walker, Lord Mance, Lord Collins, Lord Clarke
[2010] UKSC 55, UKSC 2009/0146, [2011] 2 All ER 432, [2011] 1 WLR 1, [2011] BCC 196, [2011] WLR 1, [2011] Bus LR 260
Bailii, SC Summary, SC, Bailii Summary
England and Wales
Citing:
Cited – Parke v Daily News Ltd 1962
The company which had sold its business, through its Board of Directors, had resolved to pay 1 million pounds to its former workers and the widows of such former workers. A shareholder sought to prevent this happening on the ground that such a . .
Appeal from – Progress Property Company Ltd v Moorgarth Group Ltd CA 26-Jun-2009
What are the circumstances in which a sale of assets at an undervalue by a company to, or at the behest of, a shareholder in the company should be held ultra vires on the ground that, in substance, the sale is an unlawful distribution in disguise? . .
Cited – Ridge Securities Ltd v Inland Revenue Commissions ChD 1964
The taxpayer companies had purported to pay interest on debentures, but these payments were ultra vires and void.
Held: The court upheld the Special Commissioners’ disallowance of payments of interest ‘grotesquely out of proportion to the . .
At First Instance – Progress Property Co Ltd v Moore and Another ChD 15-Oct-2008
There had been a complex deal between companies transferring shares from one to another. It was now sought to have the transaction set aside on the basis that there had been such an undervaluation of its shares as to amount to an unlawful . .
Cited – Rolled Steel Products (Holdings) Ltd v British Steel Corporation and Others CA 1986
The plaintiff company had guaranteed borrowings, using powers within the memorandum of association, but for purposes which were held to be improper, because they were not in the interests of the plaintiff company itself. One issue was whether the . .
Cited – Re Halt Garage (1964) Ltd ChD 1982
The company was a husband-and-wife business running a garage. They worked hard to build up the business, which included recovering broken-down vehicles from the nearby M1. They paid themselves modest remuneration as directors. In 1967 the wife . .

Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 November 2021; Ref: scu.426898

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 ourselves and yourselves as principals, we alone being liable to you for its performance’ is effective to preclude any contention that the parties named in the contract are contracting as agents for others. Municipal courts could not adjudicate on or enforce rights arising out of international treaties, unless they had been incorporated into domestic law. ‘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 are not self-executing. 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 an obligations, it is irrelevant.’

Lord Oliver
[1990] 2 AC 418, [1989] 3 WLR 969, [1989] Ch 72, [1989] 3 All ER 523
England and Wales
Citing:
Cited – 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 . .
Appeal from – JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry 1989
. .

Cited by:
Cited – Higgs and Mitchell v The Minister of National Security and others PC 14-Dec-1999
(Bahamas) The applicants appealed against sentences of death, saying that the executions would be unlawful while there was a pending appeal to the OAS.
Held: The appeals failed. The Bahamas was a member of the Organisation of American States, . .
Cited – European Roma Rights Centre and others v Immigration Officer at Prague Airport and Another CA 20-May-2003
A scheme had been introduced to arrange pre-entry clearance for visitors to the United Kingdom by posting of immigration officers in the Czech Republic. The claimants argued that the system was discriminatory, because Roma visitors were now . .
Cited – Chagos Islanders v The Attorney General, Her Majesty’s British Indian Ocean Territory Commissioner QBD 9-Oct-2003
The Chagos Islands had been a British dependent territory since 1814. The British government repatriated the islanders in the 1960s, and the Ilois now sought damages for their wrongful displacement, misfeasance, deceit, negligence and to establish a . .
Cited – Shogun Finance Limited v Hudson HL 19-Nov-2003
Thief acquired no title and could not sell
A purchaser used a stolen driving licence to obtain credit for and purchase a car. He then purported to sell it to the respondent, and then disappeared. The finance company sought return of the car.
Held: (Lords Nicholls and Millett . .
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 . .
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 . .
Cited – Regina (on the Application of Gjovalin Pepushi) v Crown Prosecution Service Admn 11-May-2004
The claimant was stopped when boarding a flight to Canada, having previously stopped in France and Italy. He bore a false Swedish passport, and intended to claim asylum in Canada. He now claimed the benefit of the article 31 (per Adimi), to defend a . .
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 . .
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 – 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 Jones (Margaret), Regina v Milling and others HL 29-Mar-2006
Domestic Offence requires Domestic Defence
Each defendant sought to raise by way of defence of their otherwise criminal actions, the fact that they were attempting to prevent the commission by the government of the crime of waging an aggressive war in Iraq, and that their acts were . .
Cited – Gentle and Clarke, Regina (on the Application Of) v Prime Minister and others CA 12-Dec-2006
The claimants appealed refusal of a judicial review of the defendant’s decision to enter into the war in Iraq. The claimants were parents of troops who had died in the war. They said that the legal advice given to the government was incorrect.
Cited – Gentle, Regina (on the Application of) and Another v The Prime Minister and Another HL 9-Apr-2008
The appellants were mothers of two servicemen who had died whilst on active service in Iraq. They appealed refusal to grant a public inquiry. There had already been coroners inquests. They said that Article 2 had been infringed.
Held: The . .
See Also – J H Rayner (Mincing Lane) Limited and others v Federative Republic of Brazil CA 29-Jul-1999
. .
Cited – Mohamed, Regina (on the Application of) v Secretary of State for Foreign and Commonwealth Affairs (No 1) Admn 21-Aug-2008
The claimant had been detained by the US in Guantanamo Bay suspected of terrorist involvement. He sought to support his defence documents from the respondent which showed that the evidence to be relied on in the US courts had been obtained by . .
Cited – SG and Others, Regina (on The Application of) v Secretary of State for Work and Pensions SC 18-Mar-2015
The court was asked whether it was lawful for the Secretary of State to make subordinate legislation imposing a cap on the amount of welfare benefits which can be received by claimants in non-working households, equivalent to the net median earnings . .
Cited – Miller and Dos Santos v The Secretary of State for Exiting the European Union and Others QBD 13-Nov-2016
Article 50 Notice Requires Parliament’s Authority
The applicant challenged a decision by the respondent that he could use Crown prerogative powers to issue a notice under section 50 TUE to initiate the United Kingdom leaving the EU following the referendum under the 2015 Act.
Held: Once the . .
Cited – Miller and Another, Regina (on The Application of) v Secretary of State for Exiting The European Union SC 24-Jan-2017
Parliament’s Approval if statute rights affected
In a referendum, the people had voted to leave the European Union. That would require a notice to the Union under Article 50 TEU. The Secretary of State appealed against an order requiring Parliamentary approval before issuing the notice, he saying . .
Cited – References (Bills) By The Attorney General and The Advocate General for Scotland – United Nations Convention On The Rights of The Child and European Charter of Local Self-Government SC 6-Oct-2021
Scots Bills were Outwith Parliament’s Competence
The AG questioned the constitutionaliity of Bills designed to give effect to two treaties to which the UK is a signatory, and passed by the Scottish Parliament as to the care of children.
Held: The laws had effect also outside Scotland . .

Lists of cited by and citing cases may be incomplete.

Constitutional, Agency, Company, Contract

Leading Case

Updated: 01 November 2021; Ref: scu.182469

Etat Belge v Gimle Sa: ECJ 3 Oct 2013

belge_gimleECJ102013

Fourth Directive 78/660/EEC – Article 2(3) – Principle that a true and fair view must be given – Article 2(5) – Obligation to depart from that principle – Article 32 – Valuation method based on historical cost – Purchase price manifestly lower than the real value

A. Rosas, P
C-322/12, [2013] EUECJ C-322/12
Bailii
Fourth Directive 78/660/EEC 2(3)

European, Company

Updated: 31 October 2021; Ref: scu.516344

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 and claimed also in sex discrimination. The company appealed findings as to jurisdiction saying that she was not a worker under whistleblowing legislation, and did not work within the jurisdiction for discrimination purposes.
Held: The claimant, as a member, was not a worker within the legislation so as to receive protection under the whistle blowing provisions. Applying the Tiffin case, the test was whether under the 1890 Act in an unlimited partnership, she would have been a partner and therefore not an employee: ‘whatever the employment status of the partners under the 1890 Act, it should not alter as a result of incorporation. Rights should neither be gained nor lost when partners under the 1890 Act are transformed into members of the LLP under the 2000 Act. On any view Section 4(4) makes it plain that Parliament did not intend to change their status as regards the question whether they are employees under limb (a), as Mr Linden accepts. I can see no logical reason why Parliament would have adopted a different position with respect to the question whether they may be limb (b) workers.’
As to the discrimination case, the evidence that the claimant was employed wholly abroad was not entirely one way, and that case should proceed at the tribunal. It was necessary only that the connection with the UK was so strong as to allow the tribunal to conclude that she should come within the protection afforded by Parliament.

Lloyd, Richards, Elias LJJ
[2012] EWCA Civ 1207
Bailii, Gazette
Employment Rights Act 1996 47B 230(3)(b), Equality Act 2010 45, Limited Liability Partnership Act 2000, Partnership Act 1890
England and Wales
Citing:
See Also – Clyde and Co Llp and Another v Winkelhof QBD 22-Mar-2011
The claimant firm of solicitors sought an order requiring the defendant to amend her employment tribunal claim so as to accord with the partnership agreement to which she was party, and to submit to arbitration. The defendant said that statutory . .
See Also – Van Winkelhof v Clyde and Co Llp and Another 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. . .
Appeal from – 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. . .
Cited – Ready Mixed Concrete Southeast Ltd v Minister of Pensions and National Insurance QBD 8-Dec-1967
Contracts of service or for services
In three cases appeals were heard against a finding as to whether a worker was entitled to have his employer pay National Insurance contributions on his behalf which would apply if he were an employee. He worked as an ‘owner-driver’
Held: The . .
Cited – Allonby v Accrington and Rossendale College for Education and Employment ECJ 13-Jan-2004
ECJ Principle of equal pay for men and women – Direct effect – Meaning of worker – Self-employed female lecturer undertaking work presumed to be of equal value to that which is undertaken in the same college by . .
Cited – Byrne Brothers (Formwork) Limited v Baird EAT 18-Sep-2001
EAT The Tribunal was asked whether the claimant was a worker within the meaning of the Regulations and so entitled to their protection in receiving holiday pay.
Held: The appropriate classification of a . .
Cited – Deborah Lawrie-Blum v Land Baden-Wuerttemberg ECJ 3-Jul-1986
The Equal Treatment Directive is concerned with ‘workers’ which is a term of art in Community law: ‘That concept must be defined in accordance with objective criteria which distinguish the employment relationship by reference to the rights and . .
Cited – Kurz (ne Yuce) v Land Baden-Wurttemberg ECJ 19-Nov-2002
ECJ EEC-Turkey Association Agreement – Freedom of movement for workers – Article 6(1) of Decision No 1/80 of the Association Council – Scope – Registration as duly belonging to the labour force of a Member State . .
Cited – James v Redcats (Brands) Ltd EAT 21-Feb-2007
EAT National Minimum Wage
Who is a ‘worker’?
Was the Appellant who worked as a courier for the Appellant company, providing her own vehicle, a worker or home worker within the meaning of ss.54(3) and . .
Cited – Jivraj v Hashwani SC 27-Jul-2011
The parties had a joint venture agreement which provided that any dispute was to be referred to an arbitrator from the Ismaili community. The claimant said that this method of appointment became void as a discriminatory provision under the 2003 . .
Cited – Jones v Governing Body of Burdett Coutts School CA 2-Apr-1998
The Employment Appeal Tribunal must give reasons for its decision, if it chooses to allow the amendment of appeal the papers in order to hear a point of law which had been conceded in the industrial tribunal. Citing Liverpool Corporation v Wilson, . .
Cited – Tiffin v Lester Aldridge Llp CA 1-Feb-2012
The claimant had been a partner with the respondent firm. He appealed against the rejection of his claim for unfair dsmissal on the basis that he had not been an employee.
Held: The appeal failed. Had this been an unlimited partnership under . .
Cited – 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 . .
Cited – Glennie v Independent Magazines (UK) Limited CA 17-Jun-1999
A party is under a duty to present his entire case at the first hearing in the Employment Tribunal. Where a claimant’s representative had decided to adopt a particular position in law when making representations to the original industrial tribunal, . .
Cited – Zahid v M Young Legal Associates Ltd and others CA 16-May-2006
Is it possible for a person to be a partner in a firm, and thus liable jointly with the other partners to creditors of the firm, even if his agreement with them is not that he should be entitled to participate in its profits but that he should be . .
Cited – Unison v Leicestershire County Council CA 29-Jun-2006
The council had dismissed all workers within a group of employees, and invited them to re-apply for their jobs. The council now appealed a protective award made on the basis that there had been inadequate consultation with the union.
Held: The . .
Cited – Duncombe and Others v Secretary of State for Children, Schools and Families (No 2) SC 15-Jul-2011
The court considered whether a teacher employed by the Secretary of State to teach in one of its European Schools was entitled to protection against unfair dismissal.
Held: The claimants’ appeals were allowed and the cases remitted to the . .
Cited – Ravat v Halliburton Manufacturing and Services Ltd SC 8-Feb-2012
The respondent was employed by the appellant. He was resident in GB, and was based here, but much work was overseas. At the time of his dismissal he was working in Libya. The company denied that UK law applied. He alleged unfair dismissal.
Cited by:
Cited – UK Mail Ltd v Creasey EAT 26-Sep-2012
EAT JURISDICTIONAL POINTS – Worker, employee or neither
As a matter of construction of the contract, the Claimant was not required to perform work personally since he had an unfettered right to send others, . .
Appeal from – 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 . .
Cited – Macalinden (T/A Charm Offensive) v Lazarov and Others EAT 17-Oct-2014
macalindenEAT1410
EAT JURISDICTIONAL POINTS – Worker, employees or neither
WORKING TIME REGULATIONS – Worker
NATIONAL MINIMUM WAGE
The Employment Judge did not approach the question of whether the Claimants were . .
Cited – Halawi v WDFG UK Ltd (T/A World Duty Free) CA 28-Oct-2014
The claimant said that she had been discriminated against on the grounds of her religion. She worked as a beauty consultant at the airport, but through a limited company. Her airside pass had been withdrawn. She now appealed against rejection of her . .

Lists of cited by and citing cases may be incomplete.

Employment, Discrimination, Company

Updated: 31 October 2021; Ref: scu.464554

Wise v The Perpetual Trustee Company Limited (Executors of WH Paling (Deceased): PC 13 Dec 1902

(New South Wales) A trust instrument may exclude by implication any right of the trustee to claim an indemnity against the beneficiaries personally.
Lord Lindley said: ‘Clubs are associations of a peculiar nature. They are societies the members of which are perpetually changing. They are not partnerships; they are not associations for gain; and the feature which distinguishes them from other societies is that no member as such becomes liable to pay to the funds of the society or to any one else any money beyond the subscriptions required by the rules of the club to be paid so long as he remains a member. It is upon this fundamental condition, not usually expressed but understood by every one, that clubs are formed, and this distinguishing feature has been often judicially recognised. It has been so recognised in actions by creditors and in winding-up proceedings.’
Unless a member of an unincorporated association has agreed otherwise, the member will not be liable under contract purportedly entered into on their behalf.

Lord Lindley
[1902] UKPC 59, [1903] AC 139
Bailii
Commonwealth

Commonwealth, Trusts, Company

Leading Case

Updated: 31 October 2021; Ref: scu.419485

In Re Ritson: ChD 1898

Romer J
[1898] 1 Ch 667
England and Wales
Cited by:
Appeal from – In Re Ritson, Ritson v Ritson CA 1899
The joint debts of a partnership are payable out of the joint assets if sufficient even though secured on the separate property of one partner.
Chitty LJ said of a deceased partner that his ‘interest in the joint assets [of the partnership] . .
Cited – Highbury Pension Fund Management Company and Another v Zirfin Investments Ltd and Others ChD 14-Feb-2013
The court was asked: ‘a) Does the doctrine of marshalling permit the marshalling of securities held over property that does not belong to the common debtor? In particular, is a creditor of a guarantor entitled to marshal (or be subrogated to) . .
Cited – McLean and Another v Trustees of The Bankruptcy Estate of Dent and Others ChD 26-Oct-2016
Marshalling your Dogs Equitably
Application by the joint administrators of a partnership affording the opportunity to consider the application of the equitable doctrines of marshalling and subrogation in relation to a fixed charge over a dog.
Held: The equitable principle of . .

Lists of cited by and citing cases may be incomplete.

Equity, Company

Leading Case

Updated: 31 October 2021; Ref: scu.570480

In Re Horbury Bridge Coal Iron and Waggon Co: CA 1879

Lord Jessell MR described the position at common law as regards the rights of members with different numbers of shares in the company, saying: ‘We first of all consider what may be termed the common law of the country as to voting at meetings. It is undoubted, and it was admitted by Sir Henry Jackson in his argument for the Respondents, that, according to such common law, votes at all meetings are taken by show of hands. Of course it may not always be a satisfactory mode – persons attending in large numbers may be small shareholders and persons attending in small numbers may be large shareholders, and therefore in companies provision is made for taking a poll, and when a poll is taken the votes are to be counted according to the number of shares . .’
At common law there is no need for a motion to be seconded at a company meeting, unless the custom and practice of the company as been so to do.
James LJ said that a chairman may himself move a motion.

Lord Jessell MR, James LJ
(1879) 11 ChD 109
England and Wales
Cited by:
Cited – Sugarman and Others v CJS Investments Llp and Others CA 19-Sep-2014
The parties were apartment owners in a development, each owning shares in the management company. They disputed the interpreation of the Articles as to whether the owner of more than one apartment was still restricted to one vote at member meetings, . .

Lists of cited by and citing cases may be incomplete.

Company

Leading Case

Updated: 31 October 2021; Ref: scu.536997

Revenue and Customs v SED Essex Ltd: ChD 14 Jun 2013

Liquidator confirmed despite VAT challege

The Revenue sought the winding up of the company for non-payment of substantial arrears of VAT. The revenue had declined to allow VAT input claims. The company said that the petition was wrong since the debt was genuinely disputed.
Held: The decision to appoint the provisional liquidator was maintained.
The court in the Rochdale Drinks case had now modified the test for the appointment of a provisional liquidator so that: ‘ the law now is that a judge dealing with such an application should consider it in 2 stages. The first and threshold stage is to consider whether the petitioner and applicant has demonstrated that it is likely to obtain a winding-up order on the hearing of the petition. Any views the judge may express about that will of course be provisional, because the petition itself is not being tried at the time of the application. If such likelihood is not demonstrated, it would not, at least ordinarily, be right to appoint a provisional liquidator. If on the other hand it is demonstrated, and the threshold thus crossed, then the second stage is to consider whether in the circumstances of the particular case, it is – as a matter of judicial discretion – right that a provisional liquidator should be appointed (or, where as here one has already been appointed, should be maintained in office) pending the hearing of the petition.’
The Revenue had satisfied the court that ‘both:
(a) there was fraudulent evasion of VAT connected (at whatever stage) to the Company’s purchases during the relevant 12 months, and
(b) the Company, in the person of Holly Sawyer, either knew that its purchases during that period were connected with the fraudulent evasion of VAT, or should have known that the only reasonable explanation for the circumstances in which they took place was that they were so connected or ignored obvious inferences to that effect from the facts and circumstances in which the Company had been trading’ and ‘the evidence in this case does raise real questions as to the integrity of the Company’s management, and the quality of the Company’s business documentation, and accounting and record keeping functions.’ Both stages of the test were satisfied.

John Randall QC
[2013] EWHC 1583 (Ch)
Bailii
Insolvency Act 1986 122(1)(e) 123
England and Wales
Citing:
Cited – Revenue and Customs v Rochdale Drinks Distributors Ltd CA 13-Oct-2011
The revenue appealed against refusal of its petition for the winding up of the company for non-payment of a VAT assessment. The company said that the assessment was disputed. The revenue said that the company had been run for the purpose of . .
Cited – Re Union Accident Insurance Co Ltd ChD 1972
A provisional liquidator cannot be appointed on a baseless petition. There are two conditions to be met. The first was that the petition must disclose a prima facie case, the second was that there were circumstances that require that a provisional . .
Cited – The Niedersachsen ChD 1983
In order to obtain, or to enlarge a freezing order, the applicant must show that in considering the evidence as a whole he has, at a minimum, a ‘good arguable case’, and also the existence of a real risk of dissipation or secretion of assets. . .
Cited – Mobilx Ltd and Others v HM Revenue and Customs; Blue Sphere Global Ltd v Same and similar CA 12-May-2010
Each company sought repayment of input VAT. HMRC refused, saying that the transactions were the end-product of a fraud on it, and that even if the taxpayer did not know that a fraud was involved, it should have been aware that one was and acted . .
Cited – Axel Kittel v Belgian State; Belgian State v Recolta Recycling SPRL ECJ 6-Jul-2006
ECJ Sixth VAT Directive – Deduction of input tax – ‘Carousel’ fraud – Contract of sale incurably void under domestic law.
The right of a taxpayer to deduct Input Tax may be refused if: ‘it is ascertained, . .
Cited – Commissioners of Customs and Excise v Anglo German Breweries Limited ChD 29-Nov-2002
The respondents appealed against imposition of assessments for the diversion of alcohol products from bonded warehouses without payment of duties. Pretence had been made of deliveries abroad, but the goods were later diverted. The company was . .
Cited – The Commissioners for Customs and Excise, The Arena Corporation Limited v The Arena Corporation Limited / Schroeder ChD 12-Dec-2003
. .
Cited – Customs and Excise v Anglo Overseas Ltd ChD 5-Oct-2004
. .
Cited – In re The Arena Corporation Limited; Commissioners for Customs and Excise v The Arena Corporation Limited; the Arena Corporation Limited v Schroeder CA 25-Mar-2004
Sir Andrew Morritt V-C said that in the context of winding up proceedings the test for whether there is a genuine triable issue in a disputed claim, is whether the debt is bona fide disputed on substantial grounds, which, for practical purposes, is . .
Cited – HM Customs and Excise v Jack Baars Wholesale, Baars, and Baars CmpC 16-Jan-2004
. .
Cited – Re Autotech Design Ltd, HMRC v Autotech Design Ltd ChD 2006
Michael Briggs QC summarised the approach to be adopted by the court at the hearing of for the appointment of an interim liquidator pending the hearing of an insolvency petition brought by the Revenue: ‘Although the formulations of the approach to . .
Cited – Red 12 Trading Ltd v Revenue and Customs ChD 20-Oct-2009
Appeal against refusal to allow reclaim of input tax in case of alleged ‘Missing Trader Intracommunity Fraud’.
Held: Christopher Clarke J said: ‘Examining individual transactions on their merits does not, however, require them to be regarded . .
Cited – Payless Cash and Carry Ltd v Patel and Others ChD 29-Jul-2011
The claimant company, in liquidation, claimed large sums from the first defendant as a director who wrongfully and fraudulently caused it to incur a liability to HMRC for wrongfully claimed input tax on various liquor purchases.
Held: Mann J . .

Lists of cited by and citing cases may be incomplete.

Insolvency, VAT, Company

Leading Case

Updated: 31 October 2021; Ref: scu.510872

NAHG, Re Judicial Review: SCS 31 May 2013

(Outer House) – Applications for interim orders: ‘The petition seeks reduction, suspension and interdict in respect of certain disciplinary actions taken against a company director with further proceedings in contemplation against him. The background is a complex corporate struggle in a group of companies involving a number of individuals who are now very much at arms length.’

Lord McEwan
[2013] ScotCS CSOH – 88
Bailii

Scotland, Company

Updated: 31 October 2021; Ref: scu.510216

Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd and Others: ChD 30 Jun 2010

Lord Neuberger MR said that Carl Zeiss ‘supports the proposition that notice of a claim is not the same as notice of a right’.
Lord Neuberger MR
[2010] EWHC 1614 (Ch)
Bailii
England and Wales
Citing:
See Also – Sinclair Investment Holdings Sa v Versailles Trade Finance Ltd and others CA 25-Jan-2005
leave . .
See Also – Sinclair Investment Holdings Sa v Versailles Trade Finance Ltd and Another CA 12-May-2005
. .
Cited – Carl Zeiss Stiftung v Herbert Smith No.2 CA 1969
There had been long running disputes between the plaintiffs and a defendant in which the plaintiffs claimed that all of the defendant’s assets were held for the plaintiffs on trust. Before those claims had been resolved the plaintiff brought a . .

Cited by:
Appeal from – Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd and Others CA 29-Mar-2011
The appellant challenged a decision that it was not entitled to a proprietary interest in the proceeds of sale of some shares which had been acquired with the proceeds of a breach of trust. Specifically, the claims gave rise to (i) an issue as to . .
Cited – XX and Others v YY and Others ChD 2-Jul-2021
The first defendant applies for an order that the claimants are not entitled to pursue legal action against his lawyers in respect of funds over which the claimants claim a proprietary interest and paid to the first defendant’s lawyers as legal fees . .

Lists of cited by and citing cases may be incomplete.
Updated: 30 October 2021; Ref: scu.420220

Harbinger Capital Partners v Caldwell (As The Independent Valuer of Northern Rock Plc and Another: CA 9 May 2013

Upon nationalisation all existing shares in Northern Rock passed into Government hands. The issue on this appeal is the basis on which compensation for those shares is to be determined.
Mummery, Lewison, Beatson LJJ
[2013] EWCA Civ 492
Bailii
England and Wales

Updated: 27 October 2021; Ref: scu.503506

Rloans Llp v The Registrar of Companies: ComC 30 Nov 2012

The company sought its restoration to the Register of Companies, and a backdating of the winding up.
Mr Registrar Jones
[2012] EWHC B33 (Comm)
Bailii
Companies Act 1986, Insolvency Act 1986

Updated: 27 October 2021; Ref: scu.503480

Jones v Jones and Others: CA 12 Jul 2002

Lady Justice Arden
[2003] BCC 226, [2002] EWCA Civ 961
Bailii
Companies Act 1985 459
England and Wales

Updated: 27 October 2021; Ref: scu.346816

Arif v Excess Insurance Group Ltd: 1987

1987 SLT 473
Scotland
Cited by:
Cited – Anson v Revenue and Customs SC 1-Jul-2015
Interpretation of Double Taxation Agreements
This appeal is concerned with the interpretation and application of a double taxation agreement between the United Kingdom and the United States of America. A had been a member of an LLP in Delaware, and he was resident within the UK, but not . .

Lists of cited by and citing cases may be incomplete.
Updated: 26 October 2021; Ref: scu.573163

Mitchell v Scottish Eagle Insurance Ltd: 1997

1997 SLT 793
Scotland
Cited by:
Cited – Anson v Revenue and Customs SC 1-Jul-2015
Interpretation of Double Taxation Agreements
This appeal is concerned with the interpretation and application of a double taxation agreement between the United Kingdom and the United States of America. A had been a member of an LLP in Delaware, and he was resident within the UK, but not . .

Lists of cited by and citing cases may be incomplete.
Updated: 26 October 2021; Ref: scu.573164

Dyer v Piclux Sa and Another: ComC 28 May 2004

[2004] EWHC 1266 (Comm)
Bailii
England and Wales

Updated: 26 October 2021; Ref: scu.197846

Attorney-General v The Master And Wardens Of The Haberdashers’ Company: 12 Mar 1834

A gift of a specific sum, out of the rents of an estate, to one of the chartered companies in the city of London, ‘for the increase of the stock of corn for the service of the market in London’; and a gift of the Residue of such funds to the same company, ‘for the further increase of their stock of corn’, are donations for the benefit of the company and its revenues, and not subject, therefore, to the jurisdiction of the court as charities.
[1834] EngR 583, (1834) 1 My and K 420, (1834) 39 ER 741
Commonlii
England and Wales

Updated: 17 October 2021; Ref: scu.317259

Secretary of State for Business, Energy and Industrial Strategy v Rahman: ChD 14 Aug 2020

Judgment on a claim brought by the Secretary of State for Business, Energy and Industrial Strategy against the defendant for an order under section 8 of the Company Directors Disqualification Act 1986. The allegation against the defendant is that he was a de facto director (though not a de jure or a shadow director) of a company and that his conduct as such director makes him unfit to be concerned in the management of a company.
Held: Rejected: ‘there is in my judgment nothing to show that the defendant assumed the duties of a director, nothing to show that he had any role in the governance of the company, or in fact that he ever did anything for the company (even supervising the sale of alcohol) and nothing to show that anyone else thought he was a director. In my judgment, the evidence presented in this case, properly viewed in its own context, and having regard to the oral evidence given to me, does not demonstrate on the balance of probabilities that the defendant was a de facto director of the company.’
HHJ Paul Matthews
[2020] EWHC 2213 (Ch)
Bailii
Company Directors Disqualification Act 1986 8
England and Wales

Updated: 17 October 2021; Ref: scu.653110

Re Virgin Atlantic Airways Ltd: ChD 4 Aug 2020

Application by Virgin Atlantic Airways Limited under s.901C(1) of the Companies Act 2006, for an order summoning meetings of certain of its creditors for the purpose of considering and, if thought fit, approving a compromise or arrangement within s.901A of the Act.
[2020] EWHC 2191 (Ch)
Bailii
Companies Act 2006 901C(1)
England and Wales

Updated: 17 October 2021; Ref: scu.653111

Quantum Advisory Ltd v Quantum Actuarial Llp: ComC 5 May 2020

[2020] EWHC 1072 (Comm)
Bailii
England and Wales

Updated: 17 October 2021; Ref: scu.651175

Equitix EEEF Biomass 2 Ltd v Fox and Others: TCC 27 Sep 2021

Action for breach of warranty in company share capital sale contract.
Mr Justice Kerr
[2021] EWHC 2531 (TCC)
Bailii
England and Wales

Updated: 17 October 2021; Ref: scu.668320

In re Windsor Steam Coal Co. (1901) Ltd: 1929

The courts look more favourably on applications by gratuitous trustees than on those by paid trustees. In a company winding up the liquidator may be liable to the company for negligence on his part in making a compromise.
[1929] 1 Ch 151
Cited by:
Cited – Johnson v Gore Wood and Co HL 14-Dec-2000
Shareholder May Sue for Additional Personal Losses
A company brought a claim of negligence against its solicitors, and, after that claim was settled, the company’s owner brought a separate claim in respect of the same subject-matter.
Held: It need not be an abuse of the court for a shareholder . .

Lists of cited by and citing cases may be incomplete.
Updated: 16 October 2021; Ref: scu.252499