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These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.  














Company - From: 1980 To: 1984

This page lists 41 cases, and was prepared on 02 April 2018.

 
Re A Company [1980] 1 CA 138
1980
CA
Lord Denning MR, Shaw and Templeman LJJ
Company
The court considered that even when not narrowly construing the word "officer" in the Act, that word meant, in that context, "a person in a managerial position in regard to the company's affairs"
Companies Act 1948
1 Citers


 
Central and Eastern Trust Co v Irving Oil Ltd (1980) DLR (3d) 257
1980


Company, Commonwealth
(Canada) Indirect financial assistance in purchase of company's shares.
1 Citers



 
 Armour Hick Northern Ltd v Whitehouse; Armour Trust Ltd; ChD 1980 - [1980] 1 WLR 1520; [1980] 3 All ER 833
 
Belmont Finance Corporation Ltd v Williams Furniture Ltd (No 2) [1980] 1 All ER 393
1980

Buckley LJ, Browne-Wilkinson LJ, Waller LJ
Equity, Company
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 receipt'. The court was not swayed by the parties having obtained counsel's advice that the scheme was lawful, apparently on the basis that: "if all the facts which make the transaction unlawful were known to the parties . . ignorance of the law will not excuse them" and "A limited company is of course not a trustee of its own funds: it is their beneficial owner; but in consequence of the fiduciary character of their duties the directors of a limited company are treated as if they were trustees of those funds."
Brown-Wilkinson LJ: ". . . If a transaction falls within the objects, and therefore the capacity, of the company, it is not ultra vires the company and accordingly it is not absolutely void. (5) If a company enters into a transaction which is intra vires (as being within its capacity) but in excess or abuse of its powers, such transaction will be set aside at the instance of the shareholders. (6) A third party who has notice - actual or constructive - that a transaction, although intra vires the company, was entered into in excess or abuse of the powers of the company cannot enforce such transaction against the company and will be accountable as constructive trustee for any money or property of the company received by the third party. (7) The fact that a power is expressly or impliedly limited so as to be exercisable only “for the purposes of the company’s business” (or other words to that effect) does not put a third party on inquiry as to whether the power is being so exercised, i.e. such provision does not give him constructive notice of excess or abuse of such power.”
Buckley LJ: "In my judgment, the alleged conspiracy is established in respect of these three defendants, and they are not exempt from liability on account of counsel's opinion or because they may have believed in good faith that the transaction did not transgress s 54. If all the facts which make the transaction unlawful were known to the parties, as I think they were, ignorance of the law will not excuse them: see Churchill v Walton ([1967] 2 AC 224 at 237). That case was one of criminal conspiracy, but it seems to me that precisely similar principles must apply to a conspiracy for which a civil remedy is sought. Nor, in my opinion, can the fact that their ignorance of, or failure to appreciate, the unlawful nature of the transaction was due to the unfortunate fact that they were, as I think, erroneously advised excuse them (Cooper v Simmons, and see Shaw v Director of Public Prosecutions, where the appellant had taken professional legal advice).
If they had sincerely believed in a factual state of affairs which, if true, would have made their actions legal, this would have afforded a defence (Kamara v Director of Public Prosecutions ([1974] AC 104 at 119)); but on my view of the effect of s 54 in the present case, even if £500,000 had been a fair price for the share capital of Maximum and all other benefits under the agreement, this would not have made the agreement legal."
Waller LJ: "A person is a party to a conspiracy if he knows the essential facts to constitute that conspiracy even though he does not know that they constitute an offence (see Churchill v Walton). Since there was a breach of s 54 and the defendants through their directors made all the arrangements and knew all the facts constituting the breach, it would follow that they conspired together to contravene s 54, the object of their conspiracy being Belmont, and if Belmont suffered damage they are liable."
Companies Act 1948 54
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Stonegate Securities Ltd v Gregory [1980] Ch 576
1980
CA
Buckley LJ
Company, Insolvency
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 liability in respect of the alleged debt, the petition will be dismissed, or if the matter is brought before a court before the petition is issued, its presentation will in normal circumstances be restrained. That is because a winding up petition is not a legitimate means of seeking to enforce payment of a debt which is bona fide disputed."
1 Citers


 
Adams v Cape Industries plc [1990] 1 Ch 433
1980
ChD
Scott J
Company, Jurisdiction
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 foreign judgment is impeachable on the ground of denial of procedural fairness, its enforcement would be contrary to public policy.
Scott J cautioned against ignoring the principle in Salomon merely because justice may be seen to require it, but at the same time recognised that the question is in each case the fact of presence and not some law of individual personality.
An agreement to accept jurisdiction must be express and cannot be implied.
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Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627
1980
HL
Lord Diplock
Company, Litigation Practice
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" of its parent company for the purposes of disclosure in litigation, simply by virtue of the latter's ownership and control of the group. Lord Diplock defined the term "power" to mean: "a presently enforceable legal right to obtain from whoever actually holds the document inspection of it without the need to obtain the consent of anyone else. Provided that the right is presently enforceable, the fact that for physical reasons it may not be possible for the person entitled to it to obtain immediate inspection would not prevent the document from being within his power; but in the absence of a presently enforceable right there is, in my view, nothing in Order 24 to compel a party to a cause or matter to take steps that will enable him to acquire one in the future."
It is the duty of each director to form an independent judgment as to whether acceding to a shareholder's request is in the best interests of the company.
1 Citers


 
N V Slavenburg's Bank v Intercontinental Natural Resources Ltd [1980] 1 WLR 1076
1980
ChD
Lloyd J
Contract, Company
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 for registration from an overseas company with a place of business in England. Held: The absence of a file for a company at Companies House, through the failure of the oversea company to register its place of business, did not avoid the need to give particulars of any charge to the Registrar. The Bills of Exchange Acts apply to individuals only and not to corporations at all.
Bills of Sale Act 1878 6 8
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 In re Racal Communications Ltd; In Re a Company; HL 3-Jul-1980 - [1981] AC 374; [1980] UKHL 5; [1980] 2 All ER 634; [1980] 3 WLR 181
 
Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1982] 1 WLR 522; [1981] EWCA Civ 2; [1982] 2 All ER 1
10 Dec 1981
CA
Lawton, Brightman, Fox LJJ
Company, Income Tax
An unincorporated association is defined as "two or more persons bound together for one or more common purposes, not being business purposes, by mutual undertakings each having mutual duties and obligations, in an organisation which has rules which identify in whom control of it and its funds rests and on what terms and which can be joined or left at will."
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[ Bailii ]

 
 Safeguard Industrial Investments Ltd v National Westminster Bank Ltd; CA 1982 - [1982] 1 WLR 589
 
In re Lines Bros Ltd [1983] Ch 1; [1982] 2 WLR 1010; [1982] 2 All ER 183
1982
CA
Brightman LJ
Insolvency, Company
The liquidators in a creditors voluntary liquidation converted foreign currency debts of the company into Sterling at the rate of exchange prevailing at the date of the resolution to wind up. As a result of the depreciation of Sterling against the Swiss Franc, the creditor bank, on converting their Sterling dividends into Swiss Francs, received only 58.7% of the 18.5 million Swiss Francs owed to them by the company. The bank sought to recover the loss from the surplus after paying all the provable debts. The liquidators applied to the English court for directions. Held: The bank's foreign currency debt was properly converted at the date the resolution was passed to wind up the company and they were not entitled to further participate in the assets of the company.
A winding up petition is sui generis, being in the nature of a wider legal proceeding available for the collective enforcement of the admitted or proved debts of the company for the benefit of the general body of creditors on a pari passu basis. The court may incidentally in the course of bankruptcy proceedings have to establish rights which are challenged: proofs of debt may be rejected; or there may be a dispute over whether or not a particular item of property belonged to the debtor and is available for distribution. There are procedures by which these questions may be tried summarily within the bankruptcy proceedings or directed to be determined by ordinary action. But these are incidental procedural matters and not central to the purpose of the proceedings.
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Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204
1982
CA
Cumming-Bruce, Templeman and Brightman LJJ
Company, Damages
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 dividend, because such a 'loss' is merely a reflection of the loss suffered by the company. The shareholder does not suffer any personal loss. His only 'loss' is through the company, in the diminution in the value of the net assets of the company, in which he has (say) a 3 per cent, shareholding. The plaintiff's shares are merely a right of participation in the company on the terms of the articles of association. The shares themselves, his right of participation, are not directly affected by the wrongdoing. The court rejected the notion that there is any general discretion to ignore the "proper plaintiff" rule whenever the justice of the case so requires. "A derivative action is an exception to the elementary principle that A cannot, as a general rule, bring an action against B to recover damages or secure other relief on behalf of C for an injury done by B to C. C is the proper plaintiff because C is the party injured, and, therefore, the person in whom the cause of action is vested."
"What [a shareholder] cannot do is to recover damages merely because the company in which he is interested 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 dividend, because such a "loss" is merely a reflection of the loss suffered by the company. The shareholder does not suffer any personal loss. His only "loss" is through the company, in the diminution in the value of the net assets of the company, in which he has (say) a 3 per cent shareholding."
If the fraud was not admitted by the insiders, how was it to be proved? "It cannot have been right to have subjected the company to a 30-day action (as it was then estimated to be) in order to enable him to decide whether the plaintiffs were entitled in law to subject the company to a 30-day action. Such an approach defeats the whole purpose of the rule in Foss v. Harbottle and sanctions the very mischief that the rule is designed to prevent. By the time a derivative action is concluded, the rule in Foss v. Harbottle can have little, if any, role to play. Either the wrong is proved, thereby establishing conclusively the rights of the company; or the wrong is not proved, so cadit quaestio." and answered: "In our view, whatever may be the properly defined boundaries of the exception to the rule, the plaintiff ought at least to be required before proceeding with his action to establish a prima facie case (i) that the company is entitled to the relief claimed, and (ii) that the action falls within the proper boundaries of the exception to the rule in Foss v. Harbottle."
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In re Christonette International Ltd [1982] 1 WLR 1245
1982


Company, Insolvency
In the case of a compulsory liquidation the date on which a floating charge is crystallised was the date on which the winding up order was made and not the date on which the winding up petition was presented.
1 Citers


 
Z Ltd v A-Z and AA-LL [1982] 1 All ER 556; [1982] 2 WLR 288; [1982] 1 QB 558
1982
CA
Lord Denning MR, Kerr LJ, Eveleigh LJ
Company, Torts - Other, Banking
The plaintiffs, an oversea company with an office in London had been defrauded here. They sought and obtained Mareva injunctions against defendants and against six clearing banks. The banks sought clarification of their duties. Held: The injunctions were properly granted. An innocent third party such as a bank had a duty to do what it could to comply with a court order, and such an order served on a bank may have the effect of revoking the client's mandate, allowing the bank to refuse to pay on cheques. The necessary mental ingredients for the tort of deceit have a close relationship to the mental ingredients for misfeasance.
Lord Denning MR said: "Even though the order has not then been drawn up - even though it has not then been served on the defendant - it has immediate effect on every asset of the defendant covered by the injunction. Every person who has knowledge of it must do what he reasonably can to preserve the asset. He must not assist in any way in the disposal of it. Otherwise he is guilty of a contempt of court." and
"As soon as the bank is given notice of the Mareva injunction, it must freeze the defendant's bank account. It must not allow any drawings to be made on it, neither by cheques drawn before the injunction nor by those drawn after it. The reason is because, if it allowed any such drawings, it would be obstructing the course of justice - as prescribed by the court which granted the injunction - and it would be guilty of a contempt of court." and
"Carelessness or even recklessness on the part of banks ought not in my opinion to make them liable for contempt unless it can be shown that there was indifference to such a degree that was contumacious . . it seems to me to be undesirable that those who are not immediate parties should be in danger of being held in contempt of court unless they can be shown to have been contumacious."
Eveleigh LJ described the consequences of acts or omissions in breach of an injunction: "(1) The person against whom the order is made will be liable for contempt of court if he acts in breach of the order after having notice of it. (2) A third party will also be liable if he knowingly assists in the breach, that is to say if knowing the terms of the injunction he wilfully assists the person to whom it was directed to disobey it. This will be so whether or not the person enjoined has had notice of the injunction.
The first proposition is clear enough. As to the second, however, it was submitted that until the defendant had notice of the injunction nothing done by the bank could amount to contempt of court. Also two opposing views were canvassed (I use this expression as the arguments were not strictly contentious) as to the extent to which mens rea was a necessary ingredient in determining the bank's responsibility to the court.
I will give my reasons for the second proposition and take first the question of prior notice to the defendant. It was argued that the liability of a third party arose because he was treated as aiding and abetting the defendant (i.e. he was an accessory) and as the defendant could himself not be in breach unless he had notice it followed that there was no offence to which the third party could be an accessory. In my opinion this argument misunderstands the true nature of the liability of the third party. He is liable for contempt of court committed by himself. It is true that his conduct may very often be seen as possessing a dual character of contempt of court by himself and aiding and abetting the contempt by another, but the conduct will always amount to contempt of court by himself. It will be conduct which knowingly interferes with the administration of justice causing the order of the court to be thwarted." and
As to the argument that a third party was culpable as an accessory: "In my opinion this argument misunderstands the true nature of the liability of the third party. He is liable for contempt of court committed by himself. It is true that his conduct may very often be seen as possessing a dual character of contempt of court by himself and aiding and abetting the contempt by another, but the conduct will always amount to contempt of court by himself. It will be conduct which knowingly interferes with the administration of justice by causing the order of the court to be thwarted."
Kerr LJ “However, once the bank has been served, it will no doubt consider it prudent to take steps to withdraw such facilities from the defendant in so far as it is in its power to do so.”
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Clark v Watson 1982 SLT 450
1982

Lord Dunpark
Scotland, Company
Two dentists practised in partnership. The co-partner said that on the death of one, to his estate should be paid "the Capital standing to the credit of the deceased Partner in the Accounts of the Partnership". The court was asked whether that provision would require accounts to be taken as at the date of death. Held: The practice would have to draw up accounts to the date of death, but: "If this conclusion is incorrect and, contrary to my opinion, the phrase "the Accounts of the Partnership" in cl. Fourteenth falls to be construed as meaning inter alia a balance sheet as at 31 March 1977, it nevertheless follows from my opinion that there is nothing in this contract of copartnery to take it outwith the scope of the general rule that the pursuer qua executrix of the deceased is entitled to have the assets entered at their fair value in a fresh balance sheet as at 31 March 1977. This is certainly so if the deceased is not proved to have approved these existing accounts prepared as at 31 March 1977. Although I have heard no debate on what would be the effect of his approval of the accounts, I venture to think that his approval would not bind the pursuer to accept payment in accordance with these accounts. They were prepared upon the assumption that the partnership would continue. The deceased may have agreed to the assets being inserted at a book value in accounts prepared upon that assumption, but I do not, as at present advised, see how the deceased's approval of accounts for that purpose can bind the pursuer to accept that valuation of the assets for the purpose of obtaining payment of the deceased's share of capital on dissolution of the partnership by his death."
1 Citers


 
Schering Chemicals Ltd v Falkman Ltd [1982] QB 1
1982
CA
Sach LJ, Shaw LJ, Lord Denning MR (dissenting)
Media, Company, Human Rights
The Defendants' professional skills were engaged to present the plaintiff company in a good light, and an injunction was granted to restrain them from doing the opposite. Sach LJ said: "even in the commercial field, ethics and good faith are not to be regarded as merely opportunist or expedient" and Shaw LJ: "There is the larger question of the undesirability of presenting simulated trials of the subject matter of pending or prospective litigation on so influential a medium of publicity as television. This must be a matter of degree. When the presentation appears to encroach upon the function and authority of the judicature, the limits of tolerance are clearly exceeded".
Lord Denning MR emphasised that the right of privacy is fundamental. English law "should conform as far as possible with the provisions of the European Convention of Human Rights."
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 Hitchman v Crouch Butler Savage Associates; 1982 - [1982] 80 LS Gaz 550

 
 Barclays Bank Trust Co Ltd v Bluff; 1982 - [1982] Ch 172
 
Fletcher Challenge Ltd v Fletcher Challenge Pty Ltd (1982) FSR 1
1982

Powell J
Intellectual Property, Company
(Supreme Court of New South Wales) The plaintiff company was formed from three companies well-known in New Zealand. The defendant company were formed anticipating being sold to the plaintiffs at a substantial profit. Defence Counsel told the judge that the defendants had not traded and offered undertakings that they would not trade without making it clear that they were not associated with the plaintiffs, and that therefore the defendants would not make a misrepresentation which could found a passing-off action. Held: The judge considered each of the characteristics of passing-off set out in the Warnink case. If the defendants started trading, they would be associated with or treated as part of the plaintiffs and that could affect the plaintiffs' reputation. He granted injunctions preventing passing-off and requiring the name to be changed. The name of the company was an instrument of fraud as its use would mean that passing-off would result.
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Victoria Housing Estates Ltd v Ashpurton Estates Ltd [1982] 3 All ER 66; [1982] 3 WLR 964
1982
CA

Company, Insolvency
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 registration should be made on realisation that the deadline had been missed, and any delay may be taken to indicate a calculation fatal to the application.
The rationale of the rule was explained: "Ever since [the decision of Buckley J in Re Joplin Brewery Co Ltd [1902] 1 Ch 79] it has been the practice to insert in an order extending the time for registration some such words as: 'but that this order be without prejudice to the rights of parties acquired prior to the time when the debentures shall be actually registered.' The reason for the proviso is as valid today as it was then. Such an application would be made either ex parte by the chargor company, which had the statutory duty to register, or by the chargee, in which case the company would be joined as the only respondent, if there were any respondent at all. It was not the practice to advertise for creditors and to make one of them a respondent. Consequently, it was necessary to protect persons whose rights would otherwise be overridden in their absence . .
It soon became established that, so long as the company was a going concern at the date of registration, the proviso did not protect, and was not intended to protect, an unsecured creditor who had lent money at a time when the charge should have been but was not registered . . The reason for this was that such unsecured creditor could not have intervened to prevent payment being made to the lender whose charge was not registered (whom we will call 'the unregistered chargee'). Nor could such unsecured creditor have prevented the creation of a new charge, duly registered, to take the place of the unregistered charge. The proviso was intended to protect only rights acquired against, or affecting, the property comprised in the unregistered charge, in the intervening period between the date of the creation of the unregistered charge and the registration of such charge. Such persons would include a subsequent chargee of the relevant property, a creditor who has levied execution against the relevant property, and an unsecured creditor if, but only if, the company has gone into liquidation before registration is effected. Once the company has gone into liquidation, the existing unsecured creditors are interested in all the assets of the company, since the liquidator is bound by statute to distribute the net proceeds pari passu among the unsecured creditors, subject to preferential debts. The assets of the company are at that stage vested in the company for the benefit of its creditors. The unsecured creditors are in the nature of cestuis que trust with beneficial interests extending to all the company's property.
It follows from this approach that the court must invariably refuse to extend the time for registration once the company has gone into liquidation. If an order extending time were made and the proviso included, registration would be of no assistance whatever to the unregistered chargee because the unsecured creditors at that stage would be protected by the proviso. Such an order after liquidation would be futile and will be refused . .
The position accordingly became firmly established that the court (i) invariably adds to an order extending time the proviso which we have mentioned and (ii) will not make an order once liquidation has supervened, because the effect of the proviso would be to render the order futile. This is a matter of discretion and not of law. It is possible to imagine a case, for example where fraud is involved, in which the court might extend the time for registration after the commencement of liquidation and omit the proviso which would render the order futile; we do not know of such a case in practice, and certainly the instant case does not fall into the category of fraud."
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Re Orwell's Trust [1982] 1 WLR 1337
1982
ChD
Vinelott J
Wills and Probate, Legal Professions, Company
The term "firm" may include a company: "Whilst the term 'firm' in its narrowest sense is apt to describe an unincorporated partnership it is in ordinary usage frequently applied as a description of a private company."
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Re GKN Bolts and Nuts Ltd etc Works Sports and Social Club [1982] 1 WLR 774
1982
ChD
Megarry J VC
Trusts, Company
There was a sports and social club associated with GKN, whose members were all employees of GKN. The main issue in the case was whether the club had ceased to exist. But one subsidiary issue was whether a meeting had been validly convened. The club rules required 14 days' notice to be given, but in fact only three days' notice were given. Notice of the meeting was posted in the company's canteen, to which all the members had access. However, the requirement of 14 days' notice had hardly ever been followed. Seven or three days' notice were not unusual and there was no evidence that anyone had ever objected to short notice. The subject matter of the meeting was to discuss the sale of the club's sports ground The court also considered the status of associate members of a club, who obtained that status merely by signing a vistors book. Held: The rules did not make such associate members members properly. Despite the short notice, the resolution to sell the sports ground was validly passed: "with the prospect that a sale would bring some money to each member of the club, it seems obvious that news of the meeting would speedily reach all, if not quite all, of the members of the club."
However, the same meeting (convened by the same notice) also passed resolutions altering the way in which the proceeds of sale of the sports ground would be distributed among the members, and Megarry V-C held that insufficient notice of that business had been given, with the consequence that those resolutions were invalid.
Megarry V-C said: "As is common in club cases, there are many obscurities and uncertainties, and some difficulty in the law. In such cases, the court usually has to take a broad sword to the problems, and eschew an unduly meticulous examination of the rules and resolutions. I am not, of course, saying that these should be ignored; but usually there is a considerable degree of informality in the conduct of the affairs of such clubs, and I think that the courts have to be ready to allow general concepts of reasonableness, fairness and common sense to be given more than their usual weight when confronted by claims to the contrary which appear to be based on any strict interpretation and rigid application of the letter of the rules. In other words, allowance must be made for some play in the joints."
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Re Halt Garage (1964) Ltd [1982] 3 All ER 1016
1982
ChD
Oliver J
Company
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 became seriously ill and the couple decided to move to the Isle of Wight. They failed to sell the business and the husband was commuting between the Isle of Wight and Bedfordshire looking after his wife and the ailing business. Other misfortunes followed and the company went into insolvent liquidation in 1971. The liquidator challenged the propriety of director's remuneration paid to the husband and wife during the company's decline. Held: The court upheld the husband's remuneration but disallowed most of the wife's last two years' remuneration.
The amount of remuneration awarded to a director is a matter of company management, and that provided there has been a genuine exercise of the company's power to award remuneration, it is not for the court to determine if, or to what extent, the remuneration awarded was reasonable. However,, if the director's remuneration was excessive or unreasonable, it would not avail him to argue that the matter had been decided by the company as a matter of company management.
Oliver J said: "The real question is, were these payments genuinely director's remuneration? If your intention is to make a gift out of the capital of the company, you do not alter the nature of that by giving it another label and calling it 'remuneration'." If the label of remuneration does not square with the facts, the facts will prevail and the result may be an unlawful distribution, even if the directors in question intended no impropriety. Oliver J said: "In the absence of any evidence of actual motive, the court must, I think, look at the matter objectively and apply the standard of reasonableness."
and "But it is said that Parke's case and the cases which preceded it were all cases where what the court had to consider was the test to be applied where reliance was being placed, either by directors or by a general meeting, on an implied power, whereas the power in the instant case, which is written into the company's constitution and is not subject to any expressed limitation, is an express power."
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 Cayne and Another v Global Natural Resources Plc; ChD 12-Aug-1982 - Unreported, 12 August 1982; [1984] 1 All ER 225
 
Horcal Ltd v Gatland [1983] BCLC 60
1983
ChD
Glidewell J
Company
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 terms advantageous to the director) void on the grounds of mistake. Bell v Lever did not apply where there was a fiduciary relationship between the parties.
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Tse Kwong Lam v Wong Chit Sen [1983] 1 WLR 1349
1983
HL
Lord Templeman
Land, Company
A company associated with the mortgagee purchased the land taken into possession by the mortgagee. The court considered the extent of its duties. Held: "The mortgagee and the company seeking to uphold the transaction must show that the sale was in good faith and that the mortgagee took reasonable precautions to obtain the best price reasonably obtainable at the time." It does not matter that the time may be unpropitious and that by waiting a higher price could be obtained: he is not bound to postpone in the hope of obtaining a better price.
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 Sybron Corporation v Rochem; CA 1983 - [1983] 2 All ER 706; [1984] Ch 112

 
 Re a Company No 001573 of 1983; ChD 1983 - [1983] 1 BCC 98937
 
Multinational Gas and Petrochemical Co Ltd v Multinational Gas and Petrochemical Services Ltd [1983] Ch 258
1983
CA
Dillon LJ
Company, Trusts
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 company though not to the creditors, present or future, or to individual shareholders." 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.
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 Thom's Executrix v Russel and Aitken; 1983 - 1983 SLT 335
 
Heron International v Lord Grade, Associated Communications Corp. Plc. and Others [1983] BCLC 244
1983
CA
Lawton LJ
Company, Damages
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 would reduce the value of the company's assets and hence of its shares and induce the shareholders to accept the lower of two rival offers. Held: A breach of a director's fiduciary duties may cause loss to the shareholders because: "they are deprived of the opportunity of realising their shares to greater advantage". Foss v. Harbottle has nothing whatever to do with a shareholder's right of action for a direct loss caused to his own pocket as distinct from a loss caused to the coffers of a company in which he holds shares. The case occurred where, as a result of the breach of the duty of care on the part of directors to advise their shareholders in relation to a prospective takeover bid, the plaintiff (and other shareholders) was induced or compelled to dispose of his shares to a bidder at an under-value. The wrong is done not to the company, but the shareholders. Its assets are not depleted; its coffers remain unaffected. The court distinguished the facts on the bais that the reckless decision of the directors, if implemented, will cause losses in two directions. The company in question will suffer a loss to the extent that its shares in a subsidiary are depreciated in value. That is a loss exclusively to the coffers of ACC. It is not a loss to the pockets of the shareholders in ACC, although it might, in theory, cause the market value of ACC shares to fall. No shareholder in ACC could sue the directors for a diminution in the value. In this case, however the loss which would be suffered is the loss to the pockets of the shareholders because they are deprived of the opportunity of realising their shares to greater advantage. That is a loss suffered exclusively to the pockets of the shareholders, and is in no sense a loss to the coffers of the company, which remain totally unaffected.
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 In re a Company (Bond Jewellers); ChD 21-Dec-1983 - [1986] BCLC 261
 
UBAF Ltd v European American Banking Corporation [1984] QB 713; [1984] 1 WLR 508; [1984] CLY 1579
1984
CA
Ackner LJ
Banking, Company, Limitation, Torts - Other
The defendant invited the plaintiff to take part in a syndicated loan. The defendant's assistant secretary signed a letter to the plaintiff making representations, now claimed to be fraudulent. The defendant succeeded at first instance arguing that the signature was not that of the bank, and that even if it was, the action would be statute barred. Held: The court refused to strike out the claim. A company itself made a representation, if it produced a document which was signed by an authorised officer or agent acting within the scope of his actual authority. This applied to bind the defendant bank. The nature of a syndicated loan was a fiduciary arrangement, and the obligations on a lead bank were continuing for limitation purposes, time did not run, and the obligation was not time barred. The issue would be settled at trial when it was established when the defendant could be said to have come to know of the alleged deceit.
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Re a Company (No 003729 of 1982 ) [1984] 1 WLR 1090; [1984] 3 All ER 78
1984
ChD
Mervyn Davies J
Insolvency, Company
A creditor had claimed that the company owed it some £12,000 for work done by the creditor for the company. The company refused to pay that sum but offered to pay some £2,000. Two years later the creditor served a statutory demand for the original sum claimed and, when there was no payment, presented a winding-up petition. The company then paid the sum which it had previously offered to pay. An issue in the proceedings was whether the company had neglected to pay the sum demanded and it was argued by the creditor that the company had neglected to pay a sum exceeding £200, the then statutory minimum, when it did not pay the sum it had previously offered and subsequently paid. Held: The creditor was not in a position to make a genuine demand for a specified sum. A winding-up order may not be made on a debt which is disputed in good faith by the company.
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 In re Bird Precision Bellows Ltd; ChD 1984 - [1984] 3 All ER 444; [1984] Ch 419; [1984] BCLC 195; [1983] 1 BCC 98; [1984] 2 WLR 869
 
Horcal Ltd v Gatland [1984] BCLC 549
1984
CA
Robert Goff LJ
Company
The court considered the arguments presented as to the duty of a director of a company to disclose his own breach of fiduciary duty: "Counsel . . submitted, as a general proposition, that, putting fraud on one side, there is no general duty on directors or employees to disclose a breach of duty on their part. As I understood his argument he recognised in the case of fiduciaries, such as directors, if they have failed to account for secret profits which they had made, then their failure to account must necessarily involve in consequence a failure to reveal a breach of duty which had given rise to that duty to account. Counsel . . put in the forefront of the authorities on which he relied a dictum . . in Bell and Lever Bros Ltd . . There is, in my judgment, much force in counsel's (Mr Powles) submission. Indeed counsel for the plaintiff's (Mr Thoresby) argument, that a director is under a duty to disclose any breach of duty on his part before an agreement of the kind in the present case was entered into, could lead to the extravagant consequence that the director might have to make what counsel for the defendant (Mr Powles) has called a 'confession' as a prerequisite of such an agreement. But, in my judgment, it is not necessary to decide in this case whether counsel for the defendant's (Mr Powles) submission is correct, because, as I have read the judgment of the judge, having regard to the facts found by him, no breach of duty was committed by the defendant in this case, before the termination agreement was made."
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Kak Loui Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36
1984

Gibbs C.J.(1), Murphy(2), Brennan(3), Deane(4) and Dawson(5) JJ
Commonwealth, Company
(High Court of Australia) The fundamental rule that obliged fiduciaries to account for personal benefit or gain had two separate themes: "The variations between more precise formulations of the principle governing the liability to account are largely the result of the fact that what is conveniently regarded as the one "fundamental rule" embodies two themes. The first is that which appropriates for the benefit of the person to whom the fiduciary duty is owed any benefit or gain obtained or received by the fiduciary in circumstances where there existed a conflict of personal interest and fiduciary duty or a significant possibility of such conflict: the objective is to preclude the fiduciary from being swayed by considerations of personal interest. The second is that which requires the fiduciary to account for any benefit or gain obtained or received by reason of or by use of his fiduciary position or of opportunity or knowledge resulting from it: the objective is to preclude the fiduciary from actually misusing his position for his personal advantage." and 'it is immaterial that there was no absence of good faith or damage to the person to whom the fiduciary obligation was owed.'
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[ Austlii ]
 
Nicholas v Nicholas [1984] FLR 285
1984
CA
Cumming-Bruce and Dillon LJJ
Family, Company
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 the court suggested, obiter, that the result might have been different had it not been for the position of the minority shareholders.
Cumming-Bruce LJ thought that, in that situation: "the court does and will pierce the corporate veil and make an order which has the same effect as an order that would be made if the property was vested in the majority shareholder."
Dillon LJ said: "if the company was a one-man company and the alter ego of the husband, I would have no difficulty in holding that there was power to order a transfer of the property."
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Oswald Hickson Collier and Co (a firm) v Carter Ruck [1984] AC 720; [1984] 2 All ER 15
1984
HL
Lord Denning MR
Legal Professions, Company
A firm is a partnership of two or more persons, and a one man practice is not a firm.
Lord Denning MR said: "It was submitted by Mr Cullen that - as the relationship between a solicitor and his client is a fiduciary relationship - it would be contrary to public policy that he should be precluded from acting for a client when that client wanted him to act for him: especially in pending litigation. It seems to me that that submission is right. I cannot see that it would be proper for a clause to be inserted in a partnership deed preventing one of the partners from acting for a client in the future. It is contrary to public policy because there is a fiduciary relationship between them. The client ought reasonably to be entitled to the services of such solicitor as he wishes. That solicitor no doubt has a great deal of confidential information available to him. It would be contrary to public policy if the solicitor were prevented from acting for him by a clause of this kind."
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Attorney-General's Reference (No. 2 of 1982) [1984] QB 624; [1984] 2 WLR 447; [1984] 2 All ER 216; (1983) 78 Cr App R 131; [1984] Crim LR 241; [1984] BCLC 60
1984
CACD
Kerr LJ
Crime, Company
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 transferred, the goods had remained the property of the company. Held: The actions of the directors were ultra vires. The principle that the dishonesty of the directors was not to be imputed to the company applied also in criminal law. The issue of dishonesty was for the jury. Where as here there was an effective identity between the dirtector appropriating the property and the company, whether the acts were ultra vires in the context of the company's articles of association was not conclusive. The acts of the defendants could amount to stealing.
The decision in Belmont Finance "directly contradicts the basis of the defendants' argument in the present case. There can be no reason, in our view, why the position in the criminal law should be any different".
Theft Act 1968 2(1)(a) 2(1)(b)
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