Category: Company

Shaw v The Port Phillip and Colonial Gold Mining Company Ltd: 1884

A company secretary was to procure execution of certificates of shares in accordance with prescribed formalities. A certificate was issued and presented by the secretary in favour of a purchaser in the usual form with signature of director and secretary and bearing the company’s seal. But the signature of the director appended was, in fact, a forgery made by the secretary. The seal had also been affixed without authority of the board. The purchaser in due course lodged the share certificates as security and executed a transfer in favour of the plaintiff. Both purchaser and plaintiff acted throughout in good faith. The company argued that the signature of the director being forged, the whole document was a nullity.
Held: The forgery being by its own employee, the company could not reject the transfers.
Steven J said: ‘It is said in answer that here the secretary carried out his fraud by means of forgery. It appears to me that this fact does not make any material difference. The defendants’ counsel said it did make a difference on the ground, so far as I understand his argument, that nothing can give validity to a forged instrument as against anybody. That does not seem to me to be the case, and I think the authorities cited for the plaintiff are applicable. The company appear in this case to have prescribed certain formalities with regard to the use of the seal and the issue of certificates. The certificate is to be signed by a director and the secretary. In the present case it apparently does comply with those formalities; it is apparently so signed, and it is I stated to be in the usual and authorised form. The company made it the duty of the secretary to procure the preparation, execution, and signature of certificates with the prescribed formalities, and thereupon to issue them to the persons entitle to receive them. They thereby gave the secretary the opportunity of doing what he has done in this case. A person can inform himself whether the certificate comes from the secretary because he gets it from the secretary’s office, but I do not see how, according to any practicable course of business, he can go behind the certificate and ascertain for himself such matters as whether the signature of the director is genuine. It appears to me, therefore, that the company have authorised the secretary, and made it his official duty, to act in such a way that his acts amount to a warranty by them of the genuineness of the certificate issued by him. For these reasons I think the question put to us should be answered in favour of the plaintiff.’
Matthew J commented: ‘I am of the same opinion, on the ground that the company is responsible for the fraud committed by its agent while acting within the ordinary scope of his employment. Upon the statements contained in the case I cannot doubt that it was within the scope of their secretary’s employment to do what he did here. It is stated to have been the duty of the secretary to procure the execution of the certificate with the prescribed formalities, and to issue it to the person entitled thereto. It is obviously indispensable in the ordinary course of business that the secretary should perform these duties, and it never could have been contemplated that the purchaser of shares should himself ascertain that each of the prescribed formalities had, in fact, been complied with. It seems to me, therefore, that the secretary is held out by the company as their agent to warrant the genuineness of the certificate. It was argued by the counsel for the defendants that the fact that the certificate was a forgery prevented their being liable for the act of their agent, but he failed, as it appeared to me, to establish any difference for this purpose between a fraud carried out by means of forgery and any other fraud. For these reasons I am of the opinion that our judgment should be for the plaintiff.’

Judges:

Steven J

Citations:

[1884] 34 QB 103

Jurisdiction:

England and Wales

Cited by:

Cited – Ruben v Great Fingall Consolidated HL 1906
The company secretary, to pursue a fraudulent objective of his own, presented to innocent lenders a share certificate appearing to be that of the company and appearing to be signed by two directors as well as by the secretary. However, the seal had . .
Cited – Stuart Peters Limited v Bell EAT 22-Oct-2008
EAT UNFAIR DISMISSAL: Compensation/Mitigation of loss
The employee was unfairly constructively dismissed. She was entitled to a 6 month notice period that was not paid by the employees in that period, . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 09 November 2022; Ref: scu.374702

Fomento (Sterling Area) Ltd v Selsdon Fountain Pen Co Ltd: 1958

Lord Denning said: ‘What is the proper function of an auditor? It is said that he is bound only to verify the sum, the arithmetical conclusion, by reference to the books and all necessary vouching material and oral explanations, and that it is no part of his function to inquire whether an article is covered by patents or not. I think this is too narrow a view. An auditor is not to be confined to the mechanics of checking vouchers and making arithmetic computations. He is not to be written off as a professional ‘adder-upper and subtractor’. His vital task is to take care to see that errors are not made, be they errors of computation, or errors of omission or commission, or downright untruths. To perform his task properly, he must come to it with an inquiring mind – not suspicious of dishonestly, I agree – but suspecting that someone may have made a mistake somewhere and that a check must be made to ensure that there has been none. ‘

Citations:

[1958] 1 All ER 11

Jurisdiction:

England and Wales

Company

Updated: 09 November 2022; Ref: scu.373981

Townsend v Jarman: 1900

A partner gave a covenant not to carry on the business of a corn, seed or manure merchant or nurseryman within a distance of 40 miles from Chard. The partners sold the business to a company, of which they remained directors. It was wound up, and the goodwill sold to Mr Townsend.
Held: The benefit of the restrictive covenant passed as incident to the goodwill. Where there is a sale of the goodwill of a business, an assignment of a restrictive covenant will be implied, if it is not expressly excluded.

Judges:

Farwell J

Citations:

[1900] 2 Ch 698

Jurisdiction:

England and Wales

Cited by:

Cited – New ISG Ltd v Vernon and others ChD 14-Nov-2007
The claimant sought to continue an interim injunction obtained without notice. The claimant sought to restrain former employees misusing information it claimed they had taken with them. The claimants said that having objected to a transfer of their . .
Lists of cited by and citing cases may be incomplete.

Company, Contract

Updated: 09 November 2022; Ref: scu.304583

Stein v Blake and others: CA 13 Oct 1997

The defendants challenged leave to appeal given to the plaintiff against dismissal of his claim following the Prudential Assurance case.
Held: The issue was whether the plaintiff can recover the loss which he has allegedly sustained by reason of the misappropriation of the business and assets of companies in which he was a shareholder. Leave to appeal was set aside, though such applications would normally be discouraged. There may be special circumstances in which a fiduciary duty is owed by a director to a shareholder personally and in which breach of such a duty has caused loss to him directly (e.g. by being induced by a director to part with his shares in the company at an undervalue), as distinct from loss sustained by him by a diminution in the value of his shares (e.g. by reason of the misappropriation by a director of the company’s assets), for which he (as distinct from the company) would not have a cause of action against the director personally.
Millett LJ said: ‘If this action were allowed to proceed and the plaintiff were to recover for the lost value of his shareholding from the first defendant, this would reduce his ability to meet any judgment which might thereafter be obtained by the liquidators, or by any of the old companies which were not in liquidation, to the prejudice of their creditors. The plaintiff would have obtained by a judgment of the court the very same extraction of value from the old companies at the expense of their creditors that the first defendant is alleged to have obtained by fraud and deceit.’

Judges:

Lord Woolf MR, Millett LJ, Mummery LJ

Citations:

[1997] EWCA Civ 2474, [1998] 1 All ER 724, [1997] EWCA Civ 4002, [1998] 1 BCLC 573, [1998] BCC 316

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – 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 – Heron International v Lord Grade, Associated Communications Corp. Plc. and Others CA 1983
In the course of a contested take-over bid, the directors of the target company who owned a majority of the company’s voting shares were alleged, in breach of their duties both to the company and to its shareholders, to have accepted proposals which . .
Cited – Smith v Cosworth Casting Processes Limited CA 26-Feb-1997
A right of appeal is not dependant upon an assessment of the chances of success on appeal. An appeal against the grant of leave to appeal should not anticipate the full appeal. There is a heavy onus on a respondent who seeks to set aside leave to . .
See Also – Stein v Blake CA 13-May-1993
The plaintiff argued that: ‘Nothing in the wording of section 323 changes the nature of set-off as it operates between solvent parties; it merely widens the categories of claim capable of being, and which must be, set off.’
Held: The decision . .
See Also – Stein v Blake CA 13-May-1993
The plaintiff argued that: ‘Nothing in the wording of section 323 changes the nature of set-off as it operates between solvent parties; it merely widens the categories of claim capable of being, and which must be, set off.’
Held: The decision . .
See Also – Stein v Blake HL 18-May-1995
Where A and B each have claims against each other and A is insolvent, the common amount is set off, and the net difference remains as a debt due.
Hoffmann L said: ‘It is a matter of common occurrence for an individual to become insolvent while . .
See Also – Stein v Blake HL 18-May-1995
Where A and B each have claims against each other and A is insolvent, the common amount is set off, and the net difference remains as a debt due.
Hoffmann L said: ‘It is a matter of common occurrence for an individual to become insolvent while . .

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 – 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 . .
See Also – Stein v Blake ChD 31-Oct-2000
When a Legal Aid certificate was withdrawn, leading to an opposing party suffering abortive costs in continuing the action, it was not a duty of the Legal Services Commission to inform the opposing side. They would have no access to arrangements . .
Lists of cited by and citing cases may be incomplete.

Company, Litigation Practice, Insolvency, Torts – Other

Updated: 09 November 2022; Ref: scu.142872

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 were not satisfied and the Secretary of State was not entitled to rely on the section as the basis for the disqualification proceedings.
Held: Neither the company nor the appointor was party to the proceedings. It was not appropriate to challenge a debenture over company assets in director disqualification proceedings many years later.
Millett LJ: ‘So it comes about that we are asked to pronounce upon the conditional or unconditional nature of a debenture and guarantee and the validity of an appointment of an administrative receiver in proceedings to which neither the company which granted the debenture, nor the bank to which it was granted, nor even the administrative receiver whose appointment is challenged, are made parties. In my judgment the proceedings are completely misconceived. If the debenture and guarantee were indeed conditional and the condition was not satisfied, or if the appointment of the administrative receiver was invalid, then McIvor could have brought proceedings against the bank to have the appointment declared void. Despite the passage of more than five years since the administrative receiver was appointed, McIvor has never challenged the appointment. The administrative receivership is long since spent. The assets of McIvor have been distributed, no doubt to the prejudice of the unsecured creditors and to the advantage of the bank. The appellants, who remained directors of McIvor . . never took any steps either to replace themselves as directors of McIvor or to procure McIvor to bring proceedings to challenge the appointment of the administrative receiver. They themselves never had any standing to challenge the appointment even in proceedings properly constituted against the bank. But they seek to do so now in their own right as directors or former directors of McIvor and not as creditors, in the absence of McIvor and in proceedings brought by the Secretary of State to which the bank is not a party. In my judgment they have no standing to do so.’

Judges:

Millett LJ

Citations:

Times 05-Aug-1997, Gazette 17-Sep-1997, [1997] EWCA Civ 2162

Statutes:

Company Directors Disqualification Act 1986

Jurisdiction:

England and Wales

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 – 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 . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 09 November 2022; Ref: scu.89139

European Commission, v Hellenic Republic: ECJ 8 Nov 2012

ECJ Failure of a Member State to fulfil obligations – Articles 43 EC and 56 EC – Scheme under which prior authorisation is required for the acquisition of voting rights representing 20% or more of the share capital in certain ‘strategic public limited companies’ – Arrangements for ex post control of certain decisions taken by those companies

Judges:

L. Bay Larsen

Citations:

C-244/11, [2012] EUECJ C-244/11

Links:

Bailii

European, Company

Updated: 06 November 2022; Ref: scu.465986

Certain Limited Partners In Henderson PFI Secondary Fund II Llp v Henderson PFI Secondary Fund II Lp and Others: ComC 16 Nov 2012

Cooke J said that he had to determine 10 preliminary issues, the form of which has been agreed between the parties, following an order by Teare J in respect of the first three, which relate to the question whether the claimants can bring a derivative action against the defendants and, if so, the effect of it. The balance relate to issues of construction of two agreements, with reference to a third document, which are said to govern the relationship between the parties and the conduct of the Limited Partnership which is central to the dispute between them.

Judges:

Cooke J

Citations:

[2012] EWHC 3259 (Comm), [2012] WLR(D) 348, [2013] 2 WLR 1297, [2013] 3 All ER 887, [2013] 2 All ER (Comm) 189, [2013] 1 QB 934, [2012] 2 CLC 905

Links:

Bailii, WLRD

Company

Updated: 06 November 2022; Ref: scu.465841

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 wife in satisfaction of the husband’s judgment debt. The order had been made following the standard practice in the Family Division to treat the assets of companies substantially owned by one party to the marriage as available for distribution under section 24 of the Matrimonial Causes Act, provided that the remaining assets of the company are sufficient to satisfy its creditors.
Held: The appeals succeeded (Thorpe LJ dissenting). The practice developed by the Family Division was beyond the jurisdiction of the court unless (i) the corporate personality of the company was being abused for a purpose which was in some relevant respect improper, or (ii) on the particular facts of the case it could be shown that an asset legally owned by the company was held in trust for the husband. The judge having rejected both possibilities on the facts, he ought not therefore to have made the order.
The order had been made without jurisdiction because its effect was to equate control of a company with the beneficial ownership of its assets. Rimer LJ said that: ‘The flaw in the ‘power equals property’ approach is that it ignores the fundamental principle that the only entity with the power to deal with assets held by it is the company. Those who control its affairs – even if the control is in a single individual – act merely as the company’s agents. Their agency will include the authority to procure an exercise by the company of its dispositive powers in respect of its property, but those powers are still exclusively the company’s own: they are not the agents’ powers. When and if the agents act as such, and procure a corporate disposition, the property which immediately before the disposition belonged to the company will become the property of the disponee. Until then, it remains the property of the company and belongs beneficially to no-one else. The judge’s point that the agent is automatically the owner of all the company’s assets by the mere fact of his authority to procure the company to dispose of them to himself is astonishing and does not begin to pass muster. And why should it? The proposition was simply the fruit of a judicial attempt to shoehorn into section 24(1)(a) assets which manifestly do not fit there. The judge’s finding that the husband’s mastery of the companies meant that they and their assets were his, and that they were the equivalent of mere nominees or agents for him (see, for example, his paragraph 225), could have been lifted directly from the argument of counsel for the respondents that was rejected in Salomon (see [1897] AC 22, at 28, 29).
That is probably all that needs to be said about the judge’s ‘power equals property’ theory. I shall, however, add a little more. A further reason why the theory does not work is that the judge overlooked that even the one-man in such a company does not have unlimited power to procure the company to deal as he would wish with the company’s assets. He may in practice be able to do so, by procuring the payment of its money and the execution of corporate dispositions right, left and centre, all perhaps for nothing in return. But he will not be able to do so lawfully. Even he will be constrained by the capital maintenance provisions which limit such wholesale disposals. He cannot, for example, lawfully procure the making of distributions by the company save out of its distributable profits and, if he does, the distribution will be unlawful and void. I discussed such problems in Inn Spirit Ltd v. Burns and Another [2002] 2 BCLC 780, which concerned a one-man corporate group, in which the one-man purported to pay himself a dividend. The one-man is not in a position lawfully to distribute to himself the entirety of his company’s assets at any time. To revert to the judge’s paragraph 225, there is a ‘legal impediment’ to wholesale transfers by a company in favour of its one-man controller. Only when the one-man lawfully procures the exercise of the corporate power of disposition in his own favour is it possible to identify which property has ceased to belong to the company and has become his.’

Judges:

Thorpe, Rimer, Patten LJJ

Citations:

[2012] EWCA Civ 1395, [2013] 2 FLR 576, [2013] 2 WLR 557, [2013] 1 All ER 795, [2012] 3 FCR 588, [2013] 2 Costs LO 249, [2012] WLR(D) 296, [2013] Fam Law 150

Links:

Bailii

Statutes:

Matrimonial Causes Act 1973 24

Jurisdiction:

England and Wales

Citing:

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:

Appeal from – 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 . .
Lists of cited by and citing cases may be incomplete.

Family, Company

Updated: 06 November 2022; Ref: scu.465369

Nathan v Smilovitch: CA 8 Nov 2002

Judges:

Lord Justice Mance

Citations:

[2002] EWCA Civ 1607

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Nathan v Smilovitch and Another CA 1-Mar-2002
Application for leave to appeal. . .
See Also – Nathan v Smilovitch and Another CA 13-May-2002
Application to set aside leave to appeal.
Held: It is a rare case in which, once permission to appeal has been granted it is appropriate to set it aside. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 05 November 2022; Ref: scu.188969

Secretary of State for Trade and Industry v Ashcroft and Others: CA 26 Feb 1997

A liquidator’s affidavit was admissible in company director disqualification action, even though it contained hearsay evidence.

Citations:

Gazette 19-Mar-1997, Times 04-Mar-1997, [1997] EWCA Civ 1101

Statutes:

Company Directors Disqualification Act 1986

Jurisdiction:

England and Wales

Company, Evidence, Jury

Updated: 05 November 2022; Ref: scu.141497

Antoniades v Kin ; Re Full Cup International Trading Ltd: CA 5 Mar 1997

The form of relief under section 461 is discretionary and on an appeal as to the judge’s choice of remedy or relief it has to be shown that his order was outside the generous ambit within which disagreement is possible or is otherwise reviewable on the grounds of which an exercise of discretion can be reviewed on appeal. The judge correctly exercised his wide discretion on unfair conduct by saying that no relief would meet the justice of the case. He had not been asked to wind up the business and left the provisional liquidator to make the relevant investigation.

Judges:

Mummery J

Citations:

[1997] EWCA Civ 1162, [1998] BCC 58

Statutes:

Companies Act 1985 451

Jurisdiction:

England and Wales

Cited by:

Cited – Bonham v Crow and others CA 13-Dec-2001
The petitioner complained of unfair prejudice in the way the company had been operated, and sought an order that his shares be bought out. However the judge found that the net value of the company was negative and the shares worthless. The judge had . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 05 November 2022; Ref: scu.141558

Malhotra v Dhawan: CA 26 Feb 1997

There had been litigation as to the payment due on fees earned during the partnership. One party had destroyed the evidence which would have settled many issues. The court discussed the principle that it should presume all against a destroyer of evidence, and dismissed the appeal. The case was one for an account, and therefore a payment in was not appropriate, and the court was correct to allow for the Calderbank letter. The judge, in view of his findings was free to make the order for payment of indemnity costs.
‘First if it is found that the destruction of the evidence was carried out deliberately so as to hinder the proof of the plaintiffs claim then such finding will obviously reflect on the credibility of the destroyer. In such circumstances it would enable the court to disregard the evidence of the destroyer in the application of the presumption. That is not this case.
Second, if the court has difficulty in deciding which party’s evidence to accept then it would be legitimate to resolve that doubt by the application of the presumption. But, thirdly, if the judge forms a clear view, having borne in mind all the difficulties which may arise from the unavailability of material documents, as to which side is telling the truth I do not accept that the application of the presumption can require the judge to accept evidence he does not believe or to reject evidence he finds to be truthful.’

Judges:

Lord Justice Saville Lord Justice Morritt Sir Patrick Russell

Citations:

[1997] EWCA Civ 1096, [1997] 8 Med LR 319

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Armory v Delamirie KBD 1722
A jeweller to whom a chimney sweep had taken a jewel he had found, took the jewel out of the socket and refused to return it. The chimney sweep sued him in trover. On the measure of damages, the court ruled ‘unless the defendant did produce the . .
Cited – Gray v Haig and Son 1855
Gray was the agent for Haig and Son, selling whisky on commission. On the termination of the agency a dispute arose as to the amount of the commission due and an account was ordered. Gray had destroyed his books, which were essential to the taking . .
Cited – Indian Oil Corporation v Greenstone Shipping SA 1988
A ship had on board some oil of the shipowners and it was mixed with oil, the property of the receivers, and transported to India. The mixture could not be separated for practical purposes and the question was how much of the oil were the receivers . .
Cited – Bartlett v Barclays Bank Trust Co Ltd (Nos 1 and 2) ChD 1980
A claim was made against a trustee for compensation for losses incurred during the administration of the trust.
Held: For a court to order an account by a trustee on the basis of wilful default, and make the defendant liable not only for . .
Cited – Willis v Redbridge Health Authority CA 22-Dec-1995
An unsuccessful Defendant cannot be ordered to pay costs on an indemnity basis to a legally aided Plaintiff, even if it might otherwise be justified. The normal basis is for standard costs. . .
Cited – Nichols v Evens 1883
. .

Cited by:

Cited – IS Innovative Software Ltd v Howes CA 19-Feb-2004
It was alleged that the defendant had backdated contracts of employment to a time when he had been employed by the claimant, and had induced staff to leave. The company appealed dismissal of its claim.
Held: The advantage of the court . .
Cited – Zabihi v Janzemini and Others CA 30-Jul-2009
The claimant said that he had left valuable jewelry with the defendant for sale. The defendant said at first they had been stolen, but then returned jewelry which the claimant denied was what had been left. The defendant appealed a finding that he . .
Lists of cited by and citing cases may be incomplete.

Evidence, Company, Costs

Updated: 05 November 2022; Ref: scu.141492

Hurst v Bryk: CA 4 Feb 1997

The end of a partnership did not break a former partner’s obligation to the other partners on a lease held for the partnership.

Citations:

Times 20-Mar-1997, [1997] EWCA Civ 916

Jurisdiction:

England and Wales

Cited by:

Appeal From – Hurst v Bryk and others HL 30-Mar-2000
Where other partners committed a fundamental breach of their duties as partners, that did not release the innocent partner from existing obligations of the partnership, nor from the debts of the partnership on dissolution or even accruing after . .
Lists of cited by and citing cases may be incomplete.

Company, Landlord and Tenant

Updated: 05 November 2022; Ref: scu.141312

Moore and Another v Gadd and Another: CA 5 Feb 1997

The normal limitation period applies to directors’ disqualification applications.

Citations:

Gazette 26-Feb-1997, [1997] EWCA Civ 931, Times 17-Feb-1997

Statutes:

Limitation Act 1980 39

Jurisdiction:

England and Wales

Cited by:

Cited – Halstead v Council of City of Manchester CA 23-Oct-1997
Land had been compulsorily purchased, and the compensation agreed, but after long delays in payment, not as to the calculation of interest.
Held: Interest would be payable from the date of entry. The limitation period arose only once the . .
Lists of cited by and citing cases may be incomplete.

Limitation, Company

Updated: 05 November 2022; Ref: scu.141327

In Re Premier Electronics (GB) Ltd: ChD 27 Feb 2001

The petitioners brought an action under s459 and obtained freezing orders both in relation to the property of the subject company and in relation to the assets of its two executive directors up to the value of pounds 500,000 each. On the adjourned return day Pumfrey J discharged the orders in relation to the executive directors on the grounds that the petition disclosed no cause of action against them sufficient to confer jurisdiction to grant or continue such orders. By the adjourned return date sufficient protection against the dissipation of the company’s assets was in place to make the continuation of a freezing order in relation to the company’s assets unnecessary. In proceedings alleging unfair prejudice to minority shareholders, but where there was no allegation in the proceedings which might lead to personal liability on a company’s directors, and notwithstanding any balance of convenience, it was wrong to order the freezing of the directors assets.
Pumfrey J said: ‘In the context of a s459 petition I can well understand that it may be appropriate to grant Mareva relief against the company itself, in order to preserve the value of the interests of the members of the company. The petition, if it has a respondent, is primarily the company itself.’

Judges:

Pumfrey J

Citations:

Times 27-Feb-2001, [2002] 2 BCLC 634

Statutes:

Companies Act 1985 459

Jurisdiction:

England and Wales

Cited by:

Cited – HM Revenue and Customs v Egleton and others ChD 19-Sep-2006
The claimants had applied for the winding up of a company for very substantial sums of VAT due to it. Anticipating that hearing, it now sought restraining orders against the director defendants, alleging that there had been a carousel or missing . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 05 November 2022; Ref: scu.82128

Cartwright and Another v The Registrar of Companies: CA 24 Aug 2012

The court was asked whether an administrator of a company may convert the administration into a creditors’ voluntary liquidation simply by giving notice to the registrar of companies, or whether, as the registrar contends, that conversion occurs only once the registrar has registered the conversion notice on the company’s file at Companies House.

Judges:

Lord Neuberger MR, Arden, Moses LJJ

Citations:

[2012] EWCA Civ 1159

Links:

Bailii

Jurisdiction:

England and Wales

Company, Insolvency

Updated: 04 November 2022; Ref: scu.463722

Standard Chartered Bank v Ceylon Petroleum Corporation: CA 27 Jul 2012

The defendant company appealed against a finding that it was liable to the claimant for payments due under derivative contracts. They argued that transactions were ultra vires since the company was a commercil entity created by statute.
Held: Absent indications to the contrary in an establishing statute, such a commercia body which engaged in substantial international and domestic trade had the capacity to undertake the whole range of transactions which a similar commercial organisation in that field might ordinarily undertake, including entering into hedging or speculative transactions.

Judges:

Rix, Moore-Bick, Rimer LJJ

Citations:

[2012] EWCA Civ 1049, [2012] WLR(D) 232

Links:

Bailii, WLRD

Jurisdiction:

England and Wales

Citing:

Appeal from – Standard Chartered Bank v Ceylon Petroleum Corporation ComC 11-Jul-2011
The parties had entered into financial arrangements intended to protect the defendant against fluctuations in the price of oil. The bank now claimed very substantial sums said to be due under the contracts. . .
See Also – Standard Chartered Bank v Ceylon Petroleum Corporation ComC 1-Aug-2011
The court considered orders to be made as to post judgment interest after the main judgment in favour of the claimant. . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 04 November 2022; Ref: scu.463276

Peach Publishing Limited v Slater and Co (a Firm): CA 14 Jan 1997

The respondent sought security for costs against an appeal by the plaintiff company.
Held: Substantial sums had been paid into court, and which could be treated as money belonging to the plaintiff. Accordingly there was no need for any security for costs.

Judges:

Lord Justice Nourse Mr. Justice Cazalet

Citations:

[1997] EWCA Civ 769

Jurisdiction:

England and Wales

Professional Negligence, Costs

Updated: 04 November 2022; Ref: scu.141165

National Rivers Authority v Alfred McAlpine Homes East Ltd: QBD 3 Feb 1994

A company was criminally liable for the acts of its employees which had been carried out within the normal course of their employment.

Citations:

Times 03-Feb-1994, Independent 03-Feb-1994, [1994] 4 All ER 286

Jurisdiction:

England and Wales

Environment, Vicarious Liability, Company

Updated: 04 November 2022; Ref: scu.84187

Alipour v Ary and Schweininger: CA 17 Dec 1996

The petitioner appealed against rejection of his contributor’s winding up petition.
Held: The Companies court was the appropriate place to determine a dispute on winding up petition. A dispute on locus standi can be dealt with in the winding-up proceedings without necessitating a stay of the petition, provided that the petition is not likely to cause substantial damage or inconvenience to the company.

Judges:

McGowan LJ, Sir Peter Gibson, Hutchison LJ

Citations:

Times 18-Dec-1996, [1996] EWCA Civ 1229, [1997] 2 BCLC 770, [1997] 1 WLR 534

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Re JN 2 Ltd ChD 1978
The court will require any dispute as to the status or locus standi of a party to be resolved in separate proceedings before a winding-up petition is heard. The Court highlighted the extent and applicability of Section 224(1) of the 1948 Act, . .

Cited by:

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

Insolvency, Company

Updated: 04 November 2022; Ref: scu.77736

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 shown that he assumed personal responsibility for the negligent misstatement made on behalf of the company. Because of the importance of the status of limited liability, a company director is only to be held personally liable for the company’s negligent misstatements if there is established some special circumstance; and in the case of a director of a one-man company particular vigilance is needed, lest the protection of incorporation should be virtually nullified. But once such special circumstances are established, the fact of incorporation does not preclude the establishment of personal liability. The decision is one of fact and degree. Where representations are made negligently by a company so as to attract tortious liability under the principle of Hedley Byrne, the primary liability is that of the corporate representor. In the vast majority of cases it is also the sole liability. The law does, however, recognise a rare and restricted category of case in which a director will be personally liable for the negligent misstatement. The question to be asked is ‘do the circumstances, when viewed as a whole, involve an assumption by the director of personal responsibility for the impugned statement?’

Judges:

Hirst and Waite L.JJ, Sir Patrick Russell

Citations:

Times 09-Jan-1997, [1996] EWCA Civ 1110, [1997] 1 BCLC 131

Jurisdiction:

England and Wales

Citing:

Appeal from – 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 by:

Appeal from – 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 . .
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 . .
Lists of cited by and citing cases may be incomplete.

Company, Negligence

Updated: 03 November 2022; Ref: scu.140977

Sir Henry Royce Memorial Foundation v Hardy: ChD 26 Mar 2021

Claim under CPR Part 8 between a company limited by guarantee and registered charity (the claimant) and one of its members (the defendant), for orders under section 117 of the Companies Act 2006, relating to a request made by the defendant of the claimant under section 116 of that Act for access to the register of members.

Judges:

HHJ Paul Matthews

Citations:

[2021] EWHC 714 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

See Also – Sir Henry Royce Memorial Foundation v Hardy ChD 1-Apr-2021
. .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 03 November 2022; Ref: scu.660797

Stekel v Ellice: ChD 1973

The question of whether persons are in partnership is a question of substance and not form: the label which the parties choose to give to their relationship is not determinative.
Megarry J considered the status of a salaried partner: ‘Certain aspects of a salaried partnership are not disputed. The term ‘salaried partner’ is not a term of art, and to some extent it may be said to be a contradiction in terms. However, it is a convenient expression which is widely used to denote a person who is held out to the world as being a partner, with his name appearing as a partner on the notepaper of the firm and so on. At the same time, he receives a salary as remuneration, rather than a share of the profits, though he may, in addition to his salary, receive some bonus or other sum of money dependent upon the profits. Quoad the outside world it often will matter little whether a man is a full partner or a salaried partner; for a salaried partner is held out as being a partner, and the partners will be liable for his acts accordingly. But within the partnership it may be important to know whether a salaried partner is truly to be classified as a mere employee, or as a partner.
I have found it impossible to deduce any real rule from the authorities before me, and I think that, while paying due regard to those authorities, I must look at the matter on principle. It seems to me impossible to say that as a matter of law a salaried partner is or is not necessarily a partner in the true sense. He may or may not be a partner, depending on the facts. What must be done, I think, is to look at the substance of the relationship between the parties, and there is ample authority for saying that the question whether or not there is a partnership depends on what the true relationship is, and not on any mere label attached to that relationship. A relationship that is plainly not a partnership is no more made into a partnership by calling it one than a relationship that is plainly a partnership is prevented from being one by a clause negativing partnership. If, then, there is a plain contract of master and servant, and the only qualification of that relationship is that the servant is being held out as being a partner, the name ‘salaried partner’ seems perfectly apt for him, and yet he will be no partner in relation to the members of the firm. At the other extreme, there may be a full partnership deed under which all the partners save one take a share of the profits, with that one being paid a fixed salary not dependent on profits. Again, ‘salaried partner’ seems to me an apt description of that one. I do not see why he should not be a true partner at all events if he is entitled to share in the profits of a winding-up .’

Judges:

Megarry J

Citations:

[1973] 1 WLR 191

Statutes:

Partnership Act 1890

Jurisdiction:

England and Wales

Cited by:

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 . .
Lists of cited by and citing cases may be incomplete.

Company, Employment

Updated: 03 November 2022; Ref: scu.450546

Re NP Engineering and Security Products Ltd; Official Receiver and Another v Pafundo and Another: CA 22 Oct 1996

The official receiver began director disqualification proceedings, but before the proceedings commenced, the company was wound up. Where, on an application for the disqualification of a director, the official receiver and the Secretary of State became aware that the company had in fact already been dissolved, the normal course would be to transfer the proceedings from the County Court to the High Court and to substitute the Secretary of State as applicant in the place of the official receiver.
The court gave guidance on the application of section 42(1)(b) of the 1984 Act, saying: ‘provided proceedings are started within the time permitted by the statute of limitations, are not frivolous, vexatious or an abuse of the process of the court and disclose a cause of action, they will not as a rule be struck out because of some mistake in procedure on the part of the plaintiff or his advisers . . No injustice is involved to the defendant in transferring an action which has been started in the wrong court to the correct court.’

Judges:

Simon Brown, Waite, Morritt LJ

Citations:

[1996] EWCA Civ 782, [1998] 1 BCLC 208

Statutes:

County Courts Act 1984 40 42(1)(b), Company Directors Disqualification Act 1986 6, Insolvency Act 1986 205(2)

Jurisdiction:

England and Wales

Citing:

Cited – In Re the Working Project Ltd; In Re Fosterdown Ltd and Others ChD 27-Oct-1994
Company disqualification proceedings may conclude in the county court after a winding up of the company in that court. The power to disqualify directors survives the finishing of the winding up of the company, even though the Official Receiver had . .

Cited by:

Cited – Schmidt v Wong CA 7-Dec-2005
The claimant began a personal injury claim against her landlord. She wanted a freezing order, but began her claim in the County court. When she became aware that the county court had no jurisdiction to grant such an order, he sought to have the . .
Cited – Howarth v Gwent Constabulary and Another QBD 1-Nov-2011
The claimant alleged malicious prosecution and misfeasance in public office against the defendant. He had been charged with perverting the course of justice. He had worked for a firm of solicitors specialising in defending road traffic prosecutions. . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Company, Insolvency

Updated: 01 November 2022; Ref: scu.237553

Gardner v Parker: CA 25 Jun 2004

The court considered the extent to which a shareholder or creditor of a company who has suffered loss, as the result of a breach of duties owed both to him and the company by a defendant, is nonetheless debarred from recovering that loss, because the breach of duty also caused the company loss, which it is or was entitled to recover from the defendant.

Judges:

Lord Justice Mance Mr Justice Bodey Lord Justice Neuberger

Citations:

[2004] EWCA Civ 781, [2004] 2 BCLC 554, [2005] BCC 46

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Giles v Rhind ChD 24-Jul-2001
The company had suffered losses after an alleged breach of confidence by a director. The applicant sought to recover his losses as a shareholder, after the company became unable or unwilling itself to pursue an action to recover the losses it had . .

Cited by:

See Also – Gardner v Parker CA 16-Jul-2004
. .
Cited – Shahar v Tsitsekkos and others ChD 17-Nov-2004
The defendant wished to make a claim against another party outside the jurisdiction and was granted permission to serve documents which were headed ‘defence and counterclaim’. The proposed defendant argued that such a document could be served in . .
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 . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 01 November 2022; Ref: scu.198412

Regina (POW Trust and Al’s Bar and Restaurant Limited) v The Chief Executive and Registrar of Companies, The Secretary of State for Trade and Industry: Admn 18 Dec 2002

The complainants were companies fined for late delivery of their accounts. They said that the automatic imposition of the fines infringed their rights.
Held: The procedure allowed a challenge in the County Court, and also the manner of the exercise of the registrar’s discretion allowed application for judicial review in appropriate circumstances. The procedure did not infringe the applicants’ rights. However the manual which contained the guidance as to how the registrar’s discretion was to be exercised should be made public.

Judges:

The Hon Mr Justice Lightman

Citations:

Times 02-Jan-2003, Gazette 13-Mar-2003, [2002] EWHC 2783 (Admin)

Links:

Bailii

Statutes:

European Convention on Human Rights 56, Companies Act 1985 242A

Jurisdiction:

England and Wales

Company, Human Rights

Updated: 01 November 2022; Ref: scu.178557

Robertson v Banham and Co (a Firm): CA 31 Oct 1996

The service of a writ on a professional person at his last known business address was proper.

Citations:

Gazette 05-Feb-1997, Gazette 29-Jan-1997, Gazette 22-Jan-1997, Times 26-Nov-1996, [1996] EWCA Civ 860, [1997] 1 WLR 446

Links:

Bailii

Statutes:

Rules of the Supreme Court 10 1(2)(b) 83(3), County Court Rules 1981 3(1)(a)

Jurisdiction:

England and Wales

Litigation Practice, Company

Updated: 01 November 2022; Ref: scu.140727

Sir Henry Royce Memorial Foundation v Hardy: ChD 1 Apr 2021

Judges:

HHJ Paul Matthews

Citations:

[2021] EWHC 817 (Ch)

Links:

Bailii

Statutes:

Companies Act 2006 117

Jurisdiction:

England and Wales

Citing:

See Also – Sir Henry Royce Memorial Foundation v Hardy ChD 26-Mar-2021
Claim under CPR Part 8 between a company limited by guarantee and registered charity (the claimant) and one of its members (the defendant), for orders under section 117 of the Companies Act 2006, relating to a request made by the defendant of the . .
Lists of cited by and citing cases may be incomplete.

Company, Litigation Practice

Updated: 01 November 2022; Ref: scu.660803

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 accounting practice changed requiring the unrealised gain to be moved into the profit and loss accounts. The Foundation appealed against rejection of its claim to a payment based on the published accounts.
Held: The appeal succeeded. Though the deed was charitable, its commercial context required that it be construed as a commercial document. Though the particular change in standards could not have been foreseen, changes had been, and indeed the parties had already executed one deed of variation to cater for such.
The deed referred to the group profit as shown in the audited accounts: ‘the relevant reasonable person would address how the parties had chosen to formulate the obligation in question. He would see that they had selected in clause 2(1)(a) a precise percentage of ‘Pre-Tax Profits’ as the amount to be paid for each Accounting Reference Period. He would also see that ‘Pre-Tax Profit’ was defined as ‘group profit before taxation’ (that expression appearing in the definition in inverted commas) shown in the Audited Accounts’ and would not be expected then to carry outfurther adjustments.

Judges:

Lord President, Lord Carloway, Lord Kingarth

Citations:

[2011] ScotCS CSIH – 87, 2012 GWD 5-81

Links:

Bailii

Jurisdiction:

Scotland

Citing:

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 . .

Cited by:

At Inner House – 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. . .
Lists of cited by and citing cases may be incomplete.

Contract, Company

Updated: 01 November 2022; Ref: scu.460296

Oakdale (Richmond) Limited v National Westminster Bank Plc: CA 6 Aug 1996

The plaintiff sought to have the bank’s form of debenture deemed anti-competitive under the treaty and void.
Held: The bank’s security finished when the sums due were repaid. It was not a clog on the equity of redemption. A provision against the freedom to give a second charge was appropriate because the charge was a continuing one securing an overdraft. A second charge would take priority over subsequent advances under the debenture. It was also necessary for the bank to take control of the collection of book debts to avoid that part of the charge being a floating charge. The provisions were reasonable and not anti-competitive. The arguments had no prospect of success and leave to appeal was refused.

Citations:

Times 20-Aug-1996, [1996] EWCA Civ 568

Statutes:

EC Treaty 85 86

Jurisdiction:

England and Wales

Citing:

Cited – Gottrup-Klim v Danks Landbrugs Grovvaresekskab AmbA ECJ 1994
‘agreements capable of performing a more complex function will not be regarded as having an anti-competitive object. That applies to clauses which form an integral part of a contract and in that way contribute to defining the basis and the balance . .
Lists of cited by and citing cases may be incomplete.

Company, Banking, European

Updated: 31 October 2022; Ref: scu.140435

Mcgladdery v Mcgladdery: CA 26 Sep 1996

Implementation of ancillary relief order for transfer of shares in family company.

Citations:

[1996] EWCA Civ 613

Jurisdiction:

England and Wales

Citing:

See also – McGladdery v McGladdery CA 21-Jul-1999
A husband having been ordered to transfer his shares in a private company to his wife, found that she had breached the undertaking she had given as part of the order, and had used her majority shareholding to dispose of company assets out of the . .

Cited by:

See also – Mcgladdery v Mcgladdery CA 21-Jul-1999
. .
See also – McGladdery v McGladdery CA 21-Jul-1999
A husband having been ordered to transfer his shares in a private company to his wife, found that she had breached the undertaking she had given as part of the order, and had used her majority shareholding to dispose of company assets out of the . .
Lists of cited by and citing cases may be incomplete.

Family, Company

Updated: 31 October 2022; Ref: scu.140480

Whitehouse v Wilson (Liquidator of Vol-Mec Ltd) and Another: CA 7 Dec 2006

Citations:

[2006] EWCA Civ 1688

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – In re Edennote Ltd (No 2) ChD 1997
Sanction was sought against a liquidator. Lightman J said: ‘The question is the commercial best interests of the company, reflected prima facie, by the commercial judgment of the liquidator, a judgment in my view which, in the circumstances and in . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 31 October 2022; Ref: scu.246805

Neville and Another v Wilson and Others: CA 4 Apr 1996

A parole agreement by all the shareholders in a company, to liquidate it, created a constructive trust. That a specifically enforceable agreement to assign an interest in property, created an equitable interest in the assignee, was unquestionably correct. A trust deed governed by s53(2) is not subject to the requirement to be in writing.

Judges:

Lord Justice Nourse, Lord Justice Rose and Lord Justice Aldous

Citations:

Times 04-Apr-1996, [1997] Ch 14

Statutes:

Law of Property Act 1925 53(2)

Jurisdiction:

England and Wales

Citing:

Cited – London and South Western Railway Co v Gomm CA 1882
A grant was given to repurchase property, but was void at common law for the uncertainty of the triggering event.
Held: The ‘right’ to ‘take away’ the claimants’ estate or interest in the farm was immediately vested in the grantee of the right . .

Cited by:

Cited – Slater v Simm ChD 27-Apr-2007
The deceased and her partner did not marry but owned three properties together. They could not agree on the interpretation of the documents setting out their interests, and whether they had been varied.
Held: The court set out the various . .
Lists of cited by and citing cases may be incomplete.

Company, Equity

Updated: 31 October 2022; Ref: scu.84261

Secretary of State for Trade and Industry v Davies and Others: CA 7 Jun 1996

The lack of a good reason for delay was not terminal to a company director disqualification application.

Citations:

Times 07-Jun-1996

Statutes:

Company Directors Disqualification Act 1986 6

Jurisdiction:

England and Wales

Cited by:

Cited – Davies v The United Kingdom ECHR 16-Jul-2002
The applicant had been subject to applications for his disqualification from acting as a company director. The Secretary of State waited until the last day before issuing proceedings, and the proceedings were then delayed another three years pending . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 31 October 2022; Ref: scu.89131

In Re Edennote Ltd; Tottenham Hotspur plc v Ryman: CA 21 May 1996

The company was in liquidation. Terence Venables, who had owned the shares, had taken an assignment of a cause of action against the football club. The court had set aside that assignment, and removed the liquidator. Venables now appealed saying that the court had been wrong to intervene.
Held: The appeal succeeded in part. The assignment was not re-instated, but the liquidator was. An unsecured creditor did have the right to ask a court to impugn a liquidator’s transactions. Although the words ‘on cause shown’ in section 108(2) do not appear in section 172(2), the difference in the language of the two provisions was immaterial for the purposes of the case. In the case of a compulsory liquidation, the court will not lightly remove its own officer; and the court will, among other considerations, pay a due regard to the impact of removal on the liquidator’s professional standing and reputation. Sir John Vinelott’s statement was correct with the addition that any belief of the creditors must be reasonable. In this case, although the liquidator had made a serious mistake, it was honest, and his integrity and good faith were accepted, and, in all the circumstances, this liquidator ought not to have been removed. No adequate or reasonable grounds had been shown for his removal. When liquidators are exercising their administrative powers to realise assets, the court will be very slow to substitute its judgment for that of the liquidators’ on what is essentially a businessman’s decision.
Nourse LJ said about counsel’s propostion that the correct test for intervening was: ‘namely (fraud and bad faith apart) that the court will only interfere with the act of a liquidator if he has done something so utterly unreasonable and absurd that no reasonable man would have done it’ that ‘it is certainly possible for a liquidator to do something so utterly unreasonable and absurd that no reasonable man would have done it, simply by selling an asset of the company without taking into account the possibility that a third party might well have made a better offer than he to whom it was sold. That was what Sir John Vinelott found Mr Ryman had done in this case and that, no doubt, was why he expressed himself as he did. It does not mean that he applied the wrong test. I am that satisfied that he did not.’ The applicant was a disappointed purchaser and ‘In the latter capacity alone, like any other outsider to the liquidation, they would not have had the locus standi to apply under section 168(5).’

Judges:

Nourse LJ, Millett LJ

Citations:

Times 03-Jun-1996, Gazette 03-Jul-1996, [1996] 2 BCLC 389

Statutes:

Insolvency Act 1986 108(2) 168(5) 172

Jurisdiction:

England and Wales

Citing:

Approved – In re Keypak Homecare Ltd ChD 1987
The court considered an application under section 108 to remove the liquidator, and reviewed the case law on the topic: ‘The section authorises the court to remove the liquidator ‘on cause shown’. That is not the same as saying ‘if the court shall . .
Appeal from – In Re Edennote Ltd; Tottenham Hotspur plc v Ryman ChD 1-Nov-1994
The company Edennote had been wound up on insolvency. It had a possible claim for fees against Tottenham, owned by Mr Sugare. The shareholder, Terry Venables, took an assignment of that action. An application was made to set aside the assignment and . .

Cited by:

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. . .
See Also – In re Edennote Ltd (No 2) ChD 1997
Sanction was sought against a liquidator. Lightman J said: ‘The question is the commercial best interests of the company, reflected prima facie, by the commercial judgment of the liquidator, a judgment in my view which, in the circumstances and in . .
Cited – In re Buckingham International Plc and In the Matter of Insolvency Act 1986; Mitchell v Buckingham International Plc CA 16-Feb-1998
. .
Cited – Mahomed and Another v Morris and Others CA 17-Feb-2000
. .
Cited – Ultraframe (UK) Ltd v Rigby and others CA 19-Jan-2005
Appeal against strike out of application to have set aside deeds of assignment. . .
Cited – Cintec International Ltd, Re Sequestration ScSf 12-May-2006
. .
Cited – Sisu Capital Fund Ltd and others v Tucker and others ChD 9-Sep-2005
. .
Lists of cited by and citing cases may be incomplete.

Insolvency, Company

Updated: 31 October 2022; Ref: scu.81864

Tugushev v Orlov and Others: ComC 27 Mar 2019

Held: Challenge to jurisdiction rejected.

Judges:

Carr J

Citations:

[2019] EWHC 645 (Comm)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Tugushev v Orlov and Others ComC 14-Dec-2018
Defendant’s application for security for costs. . .

Cited by:

See Also – Tugushev v Orlov and Others (No 2) ComC 26-Jul-2019
. .
Lists of cited by and citing cases may be incomplete.

Company, Torts – Other, Jurisdiction

Updated: 31 October 2022; Ref: scu.642112

Ryanair Holdings Plc v The Office of Fair Trading and Another: CA 22 May 2012

Where there are possibly competing decisions of a court of a member state and of the European Courts the duty of co-operation goes beyond avoiding inconsistent decisions, extending to the exercise of overlapping jurisdictions.

Judges:

Chancellor, Hughes, MacFarlane LJJ

Citations:

[2012] EWCA Civ 643

Links:

Bailii

Statutes:

EC Merger Regulation 139/2004, Enterprise Act 2002

Jurisdiction:

England and Wales

Cited by:

Cited – Television Autonomica Valenciana, Sa v Imagina Contenidos Audiovisuales, Sl ChD 8-Feb-2013
The defendant sought a stay of these proceedings pending the outcome of related proceedings in Spain. The claimant sought a declaration that a contract was terminated and damages for such breach. The Spanish proceedings were first in time.
Lists of cited by and citing cases may be incomplete.

European, Company, Commercial

Updated: 28 October 2022; Ref: scu.459542

Churchill and Another v First Independent Factors and Finance Ltd.: CA 30 Nov 2006

‘the circumstances in which a person who was a director of a company when it went into insolvent liquidation may be brought within an exception to the provisions of sections 216 and 217 of the Insolvency Act 1986 (‘the Act’) – provisions which would otherwise render that person liable for the debts and liabilities of a new company of which he is a director, being a company having a name which is so similar to the name of the company in liquidation as to suggest an association with that company (i.e. a ‘prohibited name’ within the meaning of section 216). ‘

Citations:

[2006] EWCA Civ 1623, Times 11-Jan-2007, [2007] Bus LR 676

Links:

Bailii

Statutes:

Insolvency Act 1986 216 217

Jurisdiction:

England and Wales

Insolvency, Company

Updated: 27 October 2022; Ref: scu.246724

Secretary of State for Trade and Industry v McTighe (No 2): CA 1996

The court accepted that it was misconduct for a director to pursue: ‘the policy of not paying the debts of creditors who are not pressing when it is known that the company has insufficient reserves enabling it to trade except at the risk of such creditors.’

Citations:

[1996] 2 BCLC 477

Statutes:

Company Directors Disqualification Act 1985

Jurisdiction:

England and Wales

Cited by:

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

Company

Updated: 27 October 2022; Ref: scu.188613

Fulham Football Club Ltd v Cabra Estates plc: CA 1994

Fulham, as lessees of Craven Cottage, agreed with CABRA, a developer, who had applied for planning permission to redevelop the ground, shortly before a public inquiry which had been set up to consider the planning application; and also a proposal by the local authority (which Fulham FC had supported) for the making of a compulsory purchase order of the ground. Fulham were to receive payment from CABRA in return not providing witnesses or written material in support of the CPO. If called upon to do so, they were to write in support of the planning application.
Held: Directors of a company may have power make a contract which fetters their discretion in any event. Neil LJ said: ‘It is trite law that directors are under a duty to act bona fide in the interests of their company. However, it does not follow from that proposition that directors can never make a contract by which they bind themselves to the future exercise of their powers in a particular manner, even though the contract taken as a whole is manifestly for the benefit of the company. Such a rule could well prevent companies from entering into contracts which were commercially beneficial to them.’
‘The principle which underlies both the law of contempt of court and the rules governing the immunity of witnesses from suit, however, is that, as a matter of public policy, the court will prevent and, if necessary punish, conduct which interferes with the proper administration of justice. Thus, ‘any contract which has a tendency to affect the due administration of justice is contrary to public policy’: see Halsbury’s Laws of England. In any individual case therefore the question is: has the act impugned interfered with, or will it interfere with, the due administration of justice? It is not sufficient merely to pose the question: is the effect of the agreement that a party or a witness may be prevented from putting forward a particular contention in court or before a tribunal? It is necessary to take a broad view of the public interest and, where necessary, seek to achieve a balance between countervailing public policy considerations. Thus in the present case there is the public interest in allowing business to be transacted freely and in holding commercial men to their bargains.
There are many circumstances where parties can properly and legally reach agreements as to the future course of legal proceedings. The law favours rather than disapproves of the compromise of a civil action, and the court will intervene to prevent a party pursuing a legal remedy in breach of a valid compromise. . .
The court will consider the facts of each case. But where, as here, a commercial agreement relating to land has been entered into between parties as arm’s, length and one party agrees in return for a very substantial payment to support the other party’s applications for planning permission we can see no rule of public policy which renders such an agreement illegal or unenforceable. This does not mean of course that a witness could be prevented by agreement from giving evidence on subpoena, because this could involve an interference with the course of justice. But we are satisfied that on the facts of this case the covenantors cannot rely on any rule of public policy which would enable them to ignore the provisions in . . the letter of undertaking and to volunteer to oppose [Cabra’s] application. Nor can we find any ground of public policy which could be invoked to prevent the first plaintiffs and the club writing a letter to the Secretary of State and the planning authority in strict accordance with . . the letter of undertaking stating that ‘the Companies’ support the planning application and are in favour of it being granted. We see no objection to the inclusion of a sentence in the letter to the effect that it is written in accordance with the letter of undertaking.’

Judges:

Neil LJ

Citations:

[1994] 1 BCLC 363

Jurisdiction:

England and Wales

Citing:

Cited – Thorby v Goldberg 29-Jul-1964
(High Court of Australia) If, when a contract is negotiated on behalf of a company, the directors bona fide think it in the interests of the company as a whole that the transaction should be entered into and carried into effect they may bind . .

Cited by:

Cited – Bonham v Crow and others CA 13-Dec-2001
The petitioner complained of unfair prejudice in the way the company had been operated, and sought an order that his shares be bought out. However the judge found that the net value of the company was negative and the shares worthless. The judge had . .
Cited – Barrett v Universal-Island Records Ltd and others ChD 15-May-2006
The claimant was entitled to share in the copyright royalties of Bob Marley and the Wailers, and claimed payment from the defendants. The defendants said that the matters had already been settled and that the claim was an abuse of process, and also . .
Cited – Australia and New Zealand Banking Group Ltd v Compagnie Noga D’Importation Et D’Exportation Sa and Another ComC 21-Feb-2007
Non-payment of bills of exchange – construction of settlement agreement. It was said that the compromise agreement ws unenforceable as being against public policy in restraining one party.
Held: The restraint ‘does not affect the course of . .
Lists of cited by and citing cases may be incomplete.

Company, Contempt of Court

Updated: 27 October 2022; Ref: scu.241636

Re Arrows Ltd (No 4): CA 8 Apr 1993

A Civil Court cannot stop the Serious Fraud Office using evidence which had been gathered under compulsion during Insolvency interviews under s236. Any element of confidentiality was overriden.

Citations:

Independent 08-Apr-1993, Gazette 09-Jun-1993

Statutes:

Criminal Justice Act 1987 2(8) 3, Insolvency Act 1986 236

Jurisdiction:

England and Wales

Citing:

Appeal from – Re Arrows Ltd (In Liquidation) Chd 1-Jul-1992
Liquidators seeking information from directors were allowed to undertake not to disclose any information gathered to the Serious Fraud Office. Such an undertaking having been given a former company director was not able to refuse to answer questions . .

Cited by:

Appeal from – Re Arrows Ltd No 4 HL 1995
The Court of Appeal had allowed an appeal from the judge who had directed that the transcripts of examinations of a director of an insolvent company under section 236 on the Director of the Serious Fraud Office undertaking that the transcripts would . .
Lists of cited by and citing cases may be incomplete.

Criminal Practice, Company

Updated: 26 October 2022; Ref: scu.85711

National Westminster Bank Plc and Another v Inland Revenue Commissioners: CA 10 Jan 1994

Shares in Business Expansion Scheme were not to be treated as issued until they were entered in the company’s share register. The scheme was ineffective being a scheme to avoid Income Tax by financial manipulation.

Citations:

Gazette 16-Mar-1994, Times 10-Jan-1994, Ind Summary 24-Jan-1994

Jurisdiction:

England and Wales

Citing:

Appeal from – National Westminster Bank Plc and Another and Barclays Bank Plc and Another v Inland Revenue Commissioners ChD 6-Aug-1993
A business expansion tax plan was valid if it was issued before the Income and Corporation Taxes Act. Shares were issued on the sending of the allotment letter, not when the shares came to be registered in the company’s books. . .

Cited by:

Appealed to – National Westminster Bank Plc and Another and Barclays Bank Plc and Another v Inland Revenue Commissioners ChD 6-Aug-1993
A business expansion tax plan was valid if it was issued before the Income and Corporation Taxes Act. Shares were issued on the sending of the allotment letter, not when the shares came to be registered in the company’s books. . .
Appeal from – 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 . .
Lists of cited by and citing cases may be incomplete.

Income Tax, Income Tax, Company

Updated: 26 October 2022; Ref: scu.84209

In Re Supply of Ready Mixed Concrete (No 2): CA 8 Jul 1993

An employer was not liable for its employee’s action in contempt of court against the company’s clear instructions with regard to anti-competitive agreements.

Citations:

Times 08-Jul-1993, Independent 14-Jul-1993

Jurisdiction:

England and Wales

Citing:

See Also – Director General of Fair Trading v Smiths Concrete: re Supply of Ready Mixed Concrete 1992
For a person to be found in contempt of a court order it is necessary to show that that he knew of the relevant order and with that knowledge he intended to do the act which amounted to a breach of the court order. It is not necessary to show that . .

Cited by:

Appeal from – Director General of Fair Trading v Pioneer Concrete (UK) Ltd, sub nom Supply of Ready Mixed Concrete (No 2) HL 25-Nov-1994
The actions of company employees, acting in the course of their employment and in contempt may put the company employer in contempt also, and even though the company may have given explicit instructions that no infringing agreement should be entered . .
Lists of cited by and citing cases may be incomplete.

Company, Contempt of Court, Commercial

Updated: 26 October 2022; Ref: scu.82208

In Re New Bullas Trading Ltd: CA 12 Jan 1994

A company debenture, which purported to create a fixed charge on book debts, and a second floating charge over the proceeds when paid, was valid and effective to create a fixed charge. The chargee was not a bank, and therefore no facility could be provided for payment of book debts. However ‘Just as it is open to contracting parties to provide for a fixed charge on future book debts, so it is open to them to provide that they shall be subject to a fixed charge while they are uncollected and a floating charge on realisation. No authority to the contrary has been cited and, the principle being as spacious as it has been expressed to be, no objection is on that account sustainable. For these reasons, I would accept [Counsel’s] second main submission and hold that the charge over book debts of the company, as created by the debenture, was, unless and until their proceeds were paid into the specified account, a valid fixed charge.’

Judges:

Nourse LJ, Russell LJ and Scott Baker J

Citations:

Times 12-Jan-1994, Ind Summary 17-Jan-1994, [1994] 1 BCLC 449

Jurisdiction:

England and Wales

Citing:

Appeal from – 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. . .
Applied – 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 . .

Cited by:

Reversed – 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 . .
Appealed to – 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 – National Westminster Bank Plc v Spectrum Plus Ltd and others ChD 15-Jan-2004
The company granted a debenture to the claimant purporting to secure its book debts. The company went into liquidation. The liquidator challenged the bank’s charge.
Held: Siebe was wrongly decided. The charge was ineffective over the book . .
Cited – 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 – National Westminster Bank plc v Spectrum Plus Limited and others HL 30-Jun-2005
Former HL decision in Siebe Gorman overruled
The company had become insolvent. The bank had a debenture and claimed that its charge over the book debts had become a fixed charge. The preferential creditors said that the charge was a floating charge and that they took priority.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Company, Banking, Insolvency

Updated: 26 October 2022; Ref: scu.82072

Barrett v Duckett: CA 15 Aug 1994

A shareholder is to show the court justification for derivative action in company name.
Peter Gibson LJ said: ‘The shareholder will be allowed to sue on behalf of the company if he is bringing the action bona fide for the benefit of the company for wrongs to the company for which no other remedy is available. Conversely if the action is brought for an ulterior purpose or if another adequate remedy is available, the court will not allow the derivative action to proceed.’

Judges:

Peter Gibson LJ

Citations:

Ind Summary 15-Aug-1994, [1995] 1 BCLC 243

Jurisdiction:

England and Wales

Cited by:

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 . .
Lists of cited by and citing cases may be incomplete.

Company

Updated: 26 October 2022; Ref: scu.78250

Euromin Holdings (Cyprus) (Judgment): ECJ 10 Dec 2020

Reference for a preliminary ruling – Company law – Directive 2004/25 / EC – Public takeover offer – Article 5, paragraph 4, first and second paragraphs – Protection of minority shareholders – Compulsory takeover offer – Method for calculating the value of actions to determine the fair price – Power to modify the fair price – Exceptions to the standard method of calculation in circumstances and according to clearly determined criteria – Liability of the Member State concerned – Damage suffered by the offeror resulting from an offer of price too high

Citations:

ECLI:EU:C:2020:1014, C-735/19, [2020] EUECJ C-735/19

Links:

Bailii

Statutes:

Directive 2004/25/EC

Jurisdiction:

European

Company

Updated: 26 October 2022; Ref: scu.660713