The Secretary of State sought the winding up of a company. The court considered the discretion to accept undertakings as to the company’s future conduct: ‘Quite clearly the Company has been engaged in a disreputable system of trading. The Company has offered a series of undertakings which are designed to secure that its future trading activities are free from objection. These undertakings are not acceptable to the petitioner. In case this matter goes to a higher court it may be helpful if I say something about the undertakings. First, the undertakings offered, assuming as I do that they were implemented, would in my view make the Company’s trading activities free from legitimate complaint however useless those trading activities may be from the point of view of the public interest. The reason that I reject the undertakings is this. Petitions under Section 35 of the Companies Act 1967 are common. Many petitions go by default. A few are opposed. If it were open to a company to oppose a petition under s.35 on the basis that undertakings are offered to regulate the future conduct of the company’s business, the Department of Trade would end with a mass of delinquent companies on probation. It is not the function of this Court, or at any rate of the Chancery Division, to police undertakings given to it except perhaps in the limited field of the welfare of infants. It is for the litigant to bring to the attention of the Court, if he so wishes but not otherwise, any activity which he considers a breach of an undertaking given to the Court If this Court accepted undertakings by a company, which is the object of a s.35 petition, there would be thrown upon the Department of Trade, and not upon the Court, the obligation of policing those undertakings. That is not the function of the Department. I take the view that the Court ought not to pay any attention to undertakings offered by a company, which is the object of a s.35 petition, relating to its future conduct owing to the burden which would thereby be thrown upon the Department of Trade, unless the Department is willing in a particular case that such undertakings should be accepted by the Court; and I do not think that the Department is under the smallest obligation to exhibit such willingness.’
Judges:
Brightman J
Citations:
Unreported, 2 June 1977
Statutes:
Jurisdiction:
England and Wales
Cited by:
Applied – In the Matter of the Supporting Link; In the Matter of the Insolvency Act 1986 ChD 19-Mar-2004
The Secretary of State sought the winding up of the company. Directors offered undertakings as to their future behaviour.
Held: The Court should be slow to accept such undertakings unless the Secretary consented. The company was solvent, but . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 27 June 2022; Ref: scu.196722