Cox v Cox and Skan Dansk Design Limited: ChD 27 Apr 2006

Mrs Cox sought to declarations as to the effect of arrangements made on her divorce in an attempt to avoid contentious proceedings. The couple held equal shares in the family business, but the company registers were missing or had never existed. The husband claimed that the arrangements were provisional pending valuations of the assets. The wife asked whether the arrangements were unlawful assistance to the husband to purchase shares in the company.
Held: Despite the absence of formal registers, the parties acted as and therefore were directors of the company under s741(1). Applying the principles set out in Pagnan, the arrangements as set out were too uncertain to be binding. At best it came to heads of agreement. It was open to the company in general meeting to release the directors from liability for breaches of s151.
John Powell QC J
[2006] EWHC 1077 (Ch)
Companies Act 1985 151 741(1), Law of Property (Miscellaneous Provisions) Act 1989 2
England and Wales
CitedPagnan SpA v Feed Products Ltd ChD 1987
An agreement can be enforceable as an agreement on main terms only, with the detailed terms to be agreed later. Bingham J said: ‘The Court’s task is to review what the parties said and did and from that material to infer whether the parties’ . .
CitedPagnan SpA v Feed Products Ltd CA 2-Jan-1987
Contractually Bound – but Further Terms to Agree
The parties had gone ahead with performance of the arrangement between them, but without a formal agreement being in place.
Held: Parties may intend to be bound forthwith even though there are further terms still to be agreed. If they then . .
CitedXydhias v Xydhias CA 21-Dec-1998
The principles of contract law are of little use when looking at the course of negotiations in divorce ancillary proceedings. In the case of a dispute the court must use its own discretion to determine whether agreement had been reached. Thorpe LJ . .
CitedBrady v Brady HL 1988
An employment agreement contravening section 151 of the 1985 Act is unenforceable. The obvious mischief to which section 151 is directed is the case of a bidder financing his bid from the funds of the company acquired. The larger purpose had to be . .
CitedBaker v Anthony Potter and Bellevue Garages Limited ChD 22-Jun-2004
A company in general meeting can release or compromise a claim for breach of section 151. . .
CitedBowthorpe Holdings Limited, Yasaiwa Securities Limited v Hills and others ChD 8-Nov-2002
. .

These lists may be incomplete.
Updated: 23 March 2021; Ref: scu.241784