A company director entering into an unapproved contract with his own company was liable to the company for the loss as at the time that loss was realised, not at the time of the breach. Where directors had entered into contracts with their company in contravention of the Act, the damages were to be assessed at the date necessary to make sure that shareholders were properly compensated. The transactions to which section 320 applies are not limited to arrangements purporting to have contractual effect, and included understandings having no contractual effect. Nourse LJ said that the application of section 727 should not be restricted unless it is necessary to do so.
Judges:
Nourse, Pill, Thorpe LJJ
Citations:
Gazette 20-May-1998, Times 18-May-1998, Gazette 03-Jun-1998, [1998] EWCA Civ 803, [1999] Ch 253, [1998] 2 BCLC 315
Statutes:
Companies Act 1985 320 322(3) 727
Jurisdiction:
England and Wales
Citing:
Appeal from – In Re Duckwari Plc ChD 23-Jul-1996
The company had purchased property, but it suffered a fall in value.
Held: The fall was irrecoverable despite the fact that it had been purchased from a director, because it had been made at full value. . .
See also – Duckwari Plc v Offerventure Ltd and Brian Stanley Cooper; In Re Duckwari Plc (No 2) CA 19-Nov-1998
The company made a claim to recover the borrowing costs incurred to buy property in breach of s320 (no shareholder approval). The acquisition of the property had been unprofitable, and the company was held to be entitled to recover from the . .
Cited by:
Appealed to – In Re Duckwari Plc ChD 23-Jul-1996
The company had purchased property, but it suffered a fall in value.
Held: The fall was irrecoverable despite the fact that it had been purchased from a director, because it had been made at full value. . .
Cited – Murray v Leisureplay Plc QBD 5-Aug-2004
The claimant sought payment of three years’ salary after termination of his service contract. He said that an agreement had been made by the company to purchase a ‘financial institution’, which would trigger the additional payments. The defendants . .
See also – Duckwari Plc v Offerventure Ltd and Brian Stanley Cooper; In Re Duckwari Plc (No 2) CA 19-Nov-1998
The company made a claim to recover the borrowing costs incurred to buy property in breach of s320 (no shareholder approval). The acquisition of the property had been unprofitable, and the company was held to be entitled to recover from the . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.
Company, Contract
Updated: 18 November 2022; Ref: scu.144281