Lanbuk on the Law of Companies: cases
57 cases, each with its facts, the issue, what was held and the principle.
Posted By lanbuk.com
- Salomon v A Salomon and Co Ltd (1897)A registered company is a separate legal person from its members, even where one person holds nearly all the shares.
- Macaura v Northern Assurance Co Ltd (1925)A company's property belongs to the company, not to its members.
- Lee v Lee's Air Farming Ltd (1960)A controlling shareholder and director can also be employed by his company.
- Battle v Irish Art Promotion Centre Ltd (1968)Because a company is a separate legal person, its controller cannot appear for it in person as of right.
- Gilford Motor Co Ltd v Horne (1933)The court will not allow a company to be used to evade an existing legal obligation of its controller.
- Jones v Lipman (1962)A company formed or used to evade a contractual obligation can be ordered to perform it.
- Prest v Petrodel Resources Ltd (2013)The veil may be pierced only under the evasion principle, and other doctrines such as trust and agency should be considered first.
- Adams v Cape Industries plc (1990)The court will not lift the veil merely because justice seems to require it or because companies form a group.
- Woolfson v Strathclyde Regional Council (1978)Related companies and their controller are not treated as one merely for convenience.
- DHN Food Distributors Ltd v Tower Hamlets LBC (1976)A closely integrated group was treated as one unit for compensation.
- Ord v Belhaven Pubs Ltd (1998)A company in a group is not liable for another's debts just because assets have been moved within the group.
- Daimler Co Ltd v Continental Tyre and Rubber Co (Great Britain) Ltd (1916)In wartime the court may look at who controls a company to decide its character.
- Twycross v Grant (1877)Whether someone is a promoter is a question of fact about what they did to form the company.
- Erlanger v New Sombrero Phosphate Co (1878)A promoter selling to the company must make full disclosure to an independent board or to the members as a whole.
- Gluckstein v Barnes (1900)A promoter must account for any secret profit not properly disclosed to the company.
- Re English and Colonial Produce Co Ltd (1906)A company is not liable for pre-incorporation expenses unless it makes a fresh contract to pay them.
- Kelner v Baxter (1866)At common law a person who contracts for an unformed company is personally liable, and the company cannot ratify.
- Newborne v Sensolid (Great Britain) Ltd (1953)A contract signed in the name of a company that does not exist may be a nullity.
- Phonogram Ltd v Lane (1981)An agreement excluding the agent's personal liability must be clear.
- Hickman v Kent or Romney Marsh Sheepbreeders' Association (1915)The articles are a contract between the company and each member, in his capacity as member.
- Eley v Positive Government Security Life Assurance Co (1876)Outsider rights in the articles cannot be enforced through the statutory contract.
- Allen v Gold Reefs of West Africa Ltd (1900)Articles may be altered by special resolution if done in good faith for the benefit of the company as a whole.
- Ashbury Railway Carriage and Iron Co Ltd v Riche (1875)At common law an act outside the objects in the memorandum is void.
- Royal British Bank v Turquand (1856)An outsider dealing in good faith may assume that the company's internal procedures have been complied with.
- Lloyd v Grace, Smith and Co (1912)A principal is liable for an agent's fraud within the scope of his employment, even if done for the agent's own benefit.
- Morris v CW Martin and Sons Ltd (1965)An employer who entrusts goods to an employee is liable if the employee steals them.
- Lister v Hesley Hall Ltd (2001)The test for vicarious liability is close connection between the wrong and the employment.
- Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd (1915)The state of mind of a company's directing mind is attributed to the company.
- Tesco Supermarkets Ltd v Nattrass (1971)Only those who represent the directing mind of the company, usually the board and senior managers, are identified with it.
- Bushell v Faith (1969)Under English law, weighted voting articles can entrench a director against removal.
- Re Barings plc (No 5) (1999)Serious incompetence, without dishonesty, can show unfitness, and directors must supervise those to whom they delegate.
- Percival v Wright (1902)Directors' fiduciary duties are owed to the company.
- Re Smith and Fawcett Ltd (1942)The good faith duty is subjective: what the directors honestly believe is in the company's interests.
- Howard Smith Ltd v Ampol Petroleum Ltd (1974)Directors must exercise powers for the purpose for which they were given.
- Re City Equitable Fire Insurance Co Ltd (1925)The older standard of care was largely subjective.
- Re D'Jan of London Ltd (1993)Directors are judged by an objective minimum standard of care.
- Aberdeen Railway Co v Blaikie Bros (1854)The no-conflict rule is strict.
- Regal (Hastings) Ltd v Gulliver (1942)Directors must account for profits made from their position unless the company consents.
- Industrial Development Consultants Ltd v Cooley (1972)A director must not divert to himself an opportunity that came to him in his capacity as director.
- Item Software (UK) Ltd v Fassihi (2004)A director's duty of loyalty may require him to disclose his own breaches of duty.
- Bristol and West Building Society v Mothew (1996)Not every breach of duty by a fiduciary is a breach of fiduciary duty.
- Pender v Lushington (1877)A member's personal rights under the articles, such as voting, are enforceable by him.
- Ooregum Gold Mining Co of India Ltd v Roper (1892)Shares may not be issued at a discount to their nominal value, except as statute allows.
- Trevor v Whitworth (1887)A company may not return capital to its members except as statute allows.
- Re Yorkshire Woolcombers Association Ltd (1903)A floating charge hovers over a changing class of assets that the company may deal with in the ordinary course of business.
- Re Spectrum Plus Ltd (2005)Whether a charge is fixed depends on the chargee's control over the asset and its proceeds, not on the label.
- Sharp v Dawes (1876)One person alone cannot usually constitute a meeting.
- Foss v Harbottle (1843)Only the company can sue for a wrong done to it, and the court will not interfere with what the majority can ratify.
- Edwards v Halliwell (1950)Foss v Harbottle does not apply where a special majority is needed, or to members' personal rights.
- Cook v Deeks (1916)A majority cannot ratify its own appropriation of company property; this is fraud on the minority.
- Daniels v Daniels (1978)Self-serving negligence by controlling directors can be challenged by the minority.
- Burland v Earle (1902)The court generally leaves internal management to the majority.
- Scottish Co-operative Wholesale Society Ltd v Meyer (1958)A majority that runs down a company to the prejudice of the minority acts oppressively, and the court may order a buy-out.
- O'Neill v Phillips (1999)Unfair prejudice usually means a breach of the company's rules or of an understanding on which the members associated.
- Ebrahimi v Westbourne Galleries Ltd (1972)Exclusion from management in a quasi-partnership company can make winding up just and equitable.
- Re Yenidje Tobacco Co Ltd (1916)Deadlock in a quasi-partnership company can justify just and equitable winding up.
- Re Patrick and Lyon Ltd (1933)Fraudulent trading requires real dishonesty, not just trading while insolvent.