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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: 1991 To: 1991

This page lists 16 cases, and was prepared on 02 April 2018.

 
Re Cleveland Trust plc [1991] BCLC 424
1991
ChD
Scott J
Company
The issue and allotment of bonus shares, once accepted by the allottee shareholder, involves a relationship between the company and the shareholder analogous to a contractual relationship.
1 Citers


 
Atlas Maritime Co SA v Avalon Maritime Ltd ('the Coral Rose') (No 1) [1991] 4 All ER 769; [1991] 1 WLR 917
1991
CA
Staughton LJ
Company
Whilst it would be wrong to find a principal/agency relationship between a creditor and a debtor which was a shell company whose sole activity was sponsored, funded and controlled by the creditor (a proposition described by Staughton LJ as "revolutionary doctrine"), the reality of the relationship meant that payment to the creditor would not be in the ordinary course of business so that release of the debtor's assets from a Mareva injunction for that purpose would be inappropriate.
Staughton LJ observed: "The creation or purchase of a subsidiary company with minimal liability, which will operate with the parent's funds and on the parent's directions but not expose the parent to liability, may not seem to some the most honest way of trading. But it is extremely common in the international shipping industry, and perhaps elsewhere. To hold that it creates an agency relationship between the subsidiary and the parent would be revolutionary doctrine".
He expressly separated the two concepts of ifting and piercing the corporate veil, on the basis that "pierc[ing] . . is reserve[d] for treating the rights or liabilities or activities of a company as the rights or liabilities or activities of its shareholders", whereas "lift[ing] . . [is] to have regard to the shareholding in a company for some legal purpose".
1 Citers


 
Re a company (No 003102 of 1991), ex parte Nyckeln Finance Co Ltd [1991] 1 BCLC 539
1991
ChD
Harman J
Company, Insolvency

1 Citers


 
Secretary of State for Trade and Industry v Langridge [1991] Ch 402
1991
CA
Lord Justice Balcombe
Company
The lower court had dismissed a petition for a director disqualification because of the failure to comply with the ten day requirement in section 16. Held: (Majority) The provisions of section 16 were directory only and not mandatory. Directors owe responsibilities to the public (in the form of creditors, shareholders and employees). The public needs to be protected from persons whose conduct has shown that they have abused the privileges to trade through a company with the protection of limited liability, and with the use of capital subscribed by third parties.
Lord Justice Balcombe said “In my judgment the scope and purpose of the [Act] is clear. The ability to trade through a company with the protection of limited liability, and with the use of capital subscribed by third parties, is of great economic advantage and confers considerable privileges on persons so enabled. These privileges involve corresponding responsibilities and the public (in the form of creditors shareholders and employees . .) needs to be protected from persons whose conduct has shown that they have abused those privileges . . accordingly the purpose of the Act is to protect the public and its scope is the prevention of persons who have previously misconducted themselves in relation to companies, or who have otherwise shown themselves as unfit to be concerned in the management of a company, from being so concerned.”
and concluded: "In those circumstances, and applying the principles to which I have referred above, I would have no hesitation in holding that in this case, the failure to serve a proper ten day notice was a procedural irregularity which did not render the Secretary of State's application for a disqualification order against Mr Langridge either void or voidable, and that the Secretary of State originating summons should not be struck out."
Company Directors Disqualification Act 1986 6
1 Cites

1 Citers


 
In re Osiris Insurance Ltd [1991] 1 BCLC 182
1991
ChD
Neuberger J
Company
The turn-out at the creditors meeting was low in number (35 out of 971) but creditors with claims worth about 41% of the total value attended the meeting. Held: Neuberger J said: "It is true that the numbers of those who voted was pretty small compared to the number of those entitled to vote, but that is by no means unusual in the context of votes at meetings called pursuant to s 425. In any event, that does not call into question the fact that not a single scheme creditor thought it right to vote against the scheme. Furthermore, if one looks at the value of the scheme claims held by those who voted, they did represent a substantial proportion of those entitled to vote."
1 Citers


 
Re Nuneaton Borough AFC Ltd (No 2) [1991] BCLC 267
1991

Harman J
Company

1 Citers


 
Brink's Mat Ltd v Noye [1991] 1 Bank LR 68
1991
CA
Mustill and Nicholls LJJ and Sir Roualeyn Cumming-Bruce
Banking, Company
The proceeds of the theft of gold bullion from a warehouse owned by the plaintiffs were laundered through the bank account of a company called Scadlynn Ltd with Barclays Bank. The directors and sole shareholders of Scadlynn were signatories of the account and drew cheques on it for cash totalling nearly £8m over four months. The plaintiffs sought to enforce rights which Scadlynn was said to possess against the bank in consequence of the payments out of its account. The court was asked whether the pleading should be permitted, raising in turn the question, among others, whether it was open to Scadlynn to sue the bank in respect of withdrawals made or authorised by the company's sole directors and shareholders. Held: there was no reason why Scadlynn, which was being put into compulsory liquidation, should be prevented from enforcing such a claim for the benefit of the creditors who would look to the assets for the satisfaction of their debts.
Nicholls LJ described the existence of the directors' fiduciary duties to the company as a means by which the law sought to protect the company's creditors.
Mustill LJ rightly described Scadlyn as being an intended victim of arrangements intended dishonestly to deprive it of a large part of its assets and Nicholls LJ agreed with him.
1 Citers


 
The Rewia [1991] 2 Lloyds Rep 325
1991
CA
Leggatt LJ
Jurisdiction, Company
The court considered a jurisdiction clause in a bill of lading which referred to the carrier's principal place of business. The central management and control of the company was in Germany and the question was whether that was also its principal place of business. Held: It was. The shareholders and officers of the shipowning company were all German, directors' meetings were held in Hamburg, contractual commitments such as vessel charters had to be authorised from Hamburg and all earnings were remitted to Hamburg. Germany was the principal place of business rather than Hong Kong. Hong Kong was the principal place of business of the vessel's managing agents. That company was in fact and not merely legal fiction a separate entity. The 'principal' place of business of a corporation within the article meant the 'chief' or 'most important' place of its business. The principal place was not necessarily where most of its business was carried out.
Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 60
1 Citers


 
Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] ICR 524; [1991] 2 All ER 597; [1991] 1 WLR 589
1991

Sir Nicolas Browne-Wilkinson VC
Company, Employment, Trusts
A company pension scheme had been operating for many years, with increases being provided for under one rule. A new rule was introduced to provide regular increases. The company was taken over, and the trustees sought clarification of the company's obligations. Held: The new rule provided a minimum increase but no right for the trustees to grant unilateral increases above that minimum. It was not possible to imply a condition of reasonableness as to the exercise of the company's discretion, but there was an obligation to act in good faith as in every contract of employment. There existed an implied obligation that the discretion should not be exercised so as to destroy or seriously damage the relationship of trust and confidence between the company and its employees and former employees. The power of the company to withhold consent to benefit increases must be exercised in good faith. "Pension scheme trusts are of quite a different nature to traditional trusts. The traditional trust is one under which the settlor, by way of bounty, transfers property to trustees to be administered for the beneficiaries as objects of his bounty. Normally, there is no legal relationship between the parties apart from the trust. The beneficiaries have given no consideration for what they receive. The settlor, as donor, can impose such limits on his bounty as he chooses, including imposing a requirement that the consent of himself or some other person shall be required to the exercise of the powers. As the Court of Appeal have pointed out in Mihlenstedt v. Barclays Bank International Ltd [1989] I.R.L.R. 522 a pension scheme is quite different. Pension benefits are part of the consideration which an employee receives in return for the rendering of his services. In many cases, including the present, membership of the pension scheme is a requirement of employment. In contributory schemes, such as this, the employee is himself bound to pay for his or her contributions. Beneficiaries of the scheme, the members, far from being volunteers have been given valuable consideration. The company employer is not conferring a bounty. In my judgment, the scheme is established against the background of such employment and falls to be interpreted against that background"
Sir Nicolas Browne-Wilkinson VC discussed the implied term of trust and confidence between employer and employee: "I will call this implied term 'the implied obligation of good faith.' In my judgment, that obligation of an employer applies as much to the exercise of his rights and powers under a pension scheme as they do to the other rights and powers of an employer. Say, in purported exercise of its right to give or withhold consent, the company were to say, capriciously, that it would consent to an increase in the pension benefits of members of union A but not of the members of union B. In my judgment, the members of union B would have a good claim in contract for breach of the implied obligation of good faith: see Mihlenstedt v Barclays Bank International Ltd [1989] IRLR 522".
1 Cites

1 Citers


 
In re Samuel Sherman Plc [1991] 1 WLR 1070
1991


Company
Disqualifications under section 8 should be of similar length to those recommended in the Sevenoaks Stationers for disqualifications under section 6.
Company Directors Disqualification Act 1986 8
1 Cites

1 Citers


 
Re Cedac Ltd [1991] Ch 402
1991
CA
Balcombe LJ, Leggatt LJ
Company, Administrative, Natural Justice
The Secretary of State's notice of intention to bring disqualification proceedings was served and the proceedings begun 10 days later just inside the 2 year limitation period specified by s 7(2) of the Act. Both parties believed the 10 day notice period had been complied with, and the director raised no objection at first. Following Jaymar, he objected to the short service. Held: The court asked four questions: (1) What is the scope and purpose of the Act of 1986? (2) What is the importance of the 10-day notice requirement in section 16(1)? (3) What is the relation of that requirement to the general object intended to be secured by the Act of 1986? (4) What are the relevant circumstances of the present case? The Act was intended to protect the public, and the requirement was important, but a breach did not create an automatic nullity. The court could make an order without such formal notice, provided the principles of natural justice were followed. (Legatt LJ) "The notice here fulfils no such function (i.e. to protect the director): its importance in the proceedings is minimal, and no one has been able to point to any real benefit that the director may derive from it." The third question is a balancing exercise with the protection afforded to the director by the provision of the notice period being set against the need to protect the public. As to the fourth, in these circunstances there was no prejudice to the director.
Company Director Disqualification Act 1986 7(2) 16(1)
1 Cites

1 Citers


 
In re Elgindata Ltd (1991) BCLC 959
1991
ChD
Warner J
Company
The plaintiff obtained a patent which was then to be utilised through the company, of which the plaintiff had one third shares. He later complained that the majority shareholder had acted prejudicially. Held: Mismanagement could amount to prejudicial conduct of the business. There was no evidence of failure to consult but some evidence of misuse of assets. It would be wrong to leave the plaintiff with the shareholding, and an order was made for the purchase of the shares by the co-shareholder at a discount to reflect the minority status. Whether or not it would be fair to value as at the date of the order can depend on whether irregularities in the accounts have been corrected.
1 Citers


 
Neilson v Stewart [1991] UKHL 13; 1991 SC (HL) 22; 1991 SLT 523; [1991] BCC 713
21 Mar 1991
HL
Lord Jauncey of Tullichettle
Scotland, Contract, Company
The parties disputed whether a completed agreement existed between them. Held: Lord Jauncey of Tullichettle said: "The fact that in the usual case a particular term will be considered essential to the existence of a concluded agreement does not prevent parties from contracting in a peculiar case that it shall not be essential."
1 Citers

[ Bailii ]
 
Exeter Trust Ltd v Screenways Ltd Times, 14 May 2003; [1991] BCLC 888
14 May 1991
CA

Company
The existence of the limited staturtory jurisdiction to order rectification under section 404 displaced and was inconsistent with the continuation of any common law power to order rectification.
Companies Act 1985 404
1 Citers


 
Lonhro plc v Fayed [1990] AC 479; Guardian, 28 June 1991; [1991] 3 All ER 303
28 Jun 1991
HL

Torts - Other, Company
The parties had competed in bidding to acquire a public company. The plaintiff alleged that the defendant had used a fraudulent misrepresentation to the Secretary of State to achieve an advantage. Held: To establish the tort of conspiracy to injure, it was sufficient that the conspirators intentionally caused injury to the plaintiff, and that they had used unlawful means to do so. It was not a defence to show that their predominant purpose was to protect their own interests.
1 Cites

1 Citers



 
 Cheah Theam Swee v Equitcorp Finance Group Ltd and Another; PC 5-Nov-1991 - Gazette, 08 January 1992; [1991] 4 All ER 989; [1991] UKPC 39
 
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