When considering applications to strike out parts of pleadings in a s459 application, the courts had to recognise the need to be careful not to allow the parties to trawl through irrelevant grievances. B The statutory definition of ‘shadow director’ is that he is a person on whose instructions or directions ‘the directors of the company’ are accustomed to act: ‘In my view, there can be no way in which the acts of any one of several directors of a company in complying with the directions of an outsider could constitute that outsider a shadow director of that company. Of course, if the board of the company be one person only and that person is a ‘cat’s paw’ for an outsider, the outsider may be the shadow director of that company. But in a case such as this, with a multi-member board, unless the whole of the board, or at the very least a governing majority of it – in my belief the whole, but I need not exclude a governing majority – are accustomed to act on the directions of an outsider, such an outsider cannot be a shadow director.’ and ‘[The directors] must be people who act on the directions or instructions of the shadow director as a matter of regular practice. That last requirement follows from the reference in the subsection to the directors being ‘accustomed to act’. That must refer to acts not on one individual occasion but over a period of time and as a regular course of conduct.’
Harman J
[1994] 1 BCLC 609
Companies Act 1985 459 741(2)
England and Wales
Citing:
See Also – Re Unisoft Group (No 2) 1993
Inability to pay means to pay when the costs fall due for payment . .
Cited by:
Cited – Wilkinson v West Coast Capital and others ChD 22-Jul-2005
A claim was to be made about actions of unfair prejudice by the directors against the minor shareholder. The court considered a preliminary issue as to the admissibility of evidence, including without prejudice correspondence.
Held: 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
Updated: 17 January 2022; Ref: scu.228979