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