英国公司法判例选.doc

COMAPANY LAW - CASESPromoters 1. Twycross v Grant (1877) 2 CPD 469 In describing the role and function of a promoter, Lord Cockburn said: A promoter, I apprehend, is one who undertakes to form a company with reference to a given project and to set it going, and who undertakes the necessary steps to accomplish that purpose.and so long as the work of formation continues, those who carry on that work must, I think, retain the character of promoters. Of course, if a governing body, in the shape of directors, has once been formed, and they take what remains to be done in the way of forming the company into their own hands, the functions of the promoter are at an end. 2. Whaley Bridge Calico Printing Co v Green (1880) 5 QBD 109 A promoter negotiated the sale of a business from the seller to the company which he was intending to form. The seller agreed to pay a share of the profit he received from the sale to the promoter. It was held that the promoter was accountable to the company for that profit. In an attempt to define the term promoter, Bowen J said: The term promoter is a term not of law, but of business, usefully summing up in a single word a number of business operations familiar to the commercial world by which a company is generally brought into existence. 3. Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 A syndicate headed by Erlanger acquired the lease of an island in the Caribbean for 55,000. The leaseholder was a nominee of the syndicate. The syndicate later incorporated the New Sombrero Phosphate Co. At a meeting of the directors (some of whom were members of the syndicate) it was agreed that the company would buy the lease from the nominee. The Company issued a prospectus which did not mention that anyone other than the nominee had any interest in the lease. Held: As there had been no disclosure by the promoters of the profit they were making, the company could rescind the contract and recover the price from Erlanger and the other members of the syndicate. 4. Gluckstein v Barnes 1900 AC 240 A syndicate bought property intending to sell it to a company they were forming. They nominally bought it for 140,000 but actually got it at a discount, so that it cost them 120,000. They then sold it to the newly formed company, of which they had become directors, for 180,000. A prospectus issuing to the public disclosed a profit of 40,000, but not the 20,000 discount. The company later failed and the liquidator claimed repayment of the 20,000. The House of Lords upheld the liquidators claim. 5. Re Leeds and Hanley Theatre of Varieties 1902 2 Ch 809 F Co contracted to purchase two music halls for 24,000 and had the property conveyed to a nominee, R, intending to sell it to the Leeds and Hanley when the company was formed. F Co then promoted the formation of Leeds and Hanley and agreed to sell it the music halls for 75,000. The board of directors of Leeds and Hanley was not an independent board. A prospectus for issuing shares to the public gave R as the seller of the property and did not disclose the interest of F Co or the profit it was making. For breach of fiduciary duty to those invited to take shares the promoters were liable in damages to the company; the measure of damages being the promoters profit. Pre-incorporation Contracts 6. Tinnevelly Sugar Refining Co Ltd v Mirrlees Watson & Yaryan Co Ltd (1894) 21R 1009. A business ordered machinery from Mirrlees Watson & Yaryan Co Ltd on behalf of the Tinnevelly Sugar Refining Co Ltd, a company that had not yet been formed at the time the contract was made. The machinery proved defective, and once the Tinnevelly Sugar Refining Co Ltd has been formed, it sued Mirrlees Watson & Yaryan Co Ltd for damages for loss caused by the defective equipment. It was held on appeal to the Inner House of the Court of Session that the Tinnevelly Sugar Refining Co Ltd had not title to sue, as it was not a party to the contract, and the party who made the contract on its behalf could not do so as agent at a time when the Tinnevelly company had not yet been formed. 7. Phonogram Ltd v Lane 1982 QB 938 A rock group intended to perform under the name Cheap Mean and Nasty and to form a company for the purpose to be called Fragile Management Ltd. Mr Lane accepted a cheque from Phonogram for 6,000, signing his name for and on behalf of Fragile Management Ltd. The money was to be used to finance production of an album and was repayable if this was not achieved. When the album was not produced, Phonogram sought to recover the money from Lane, the company having not been in existence at the time the contract was made. Lane argued that his signature for and on behalf of the company amounted to an agreement that he was not to be personally liable on it - an agreement to the contrary in terms of s.36C. (Then s.9(2) of the European Communities Act 1972). Held: This was not sufficient to exclude the operation of the section, which would be given full effect unless there was a clear and express exclusion of personal liability. Lane was thus liable to repay the money. Refusal to Register 8. R v Registrar of Joint Stock Companies, ex p More 1931 2 KB 197 The Registrar refused to register a company because its main object was to sell in great Britain tickets to a Republic of Ireland lottery known as the Irish Sweep. The companys promoters applied for judicial review of the refusal to register. The court found that selling the tickets would have been an offence under legislation then in force, and the Registrar was right to refuse to register a company which was not formed for a lawful purpose. 9. R v Registrar of Companies, ex p Attorney-General 1991 BCLC 476 In 1979 Lindi St Clair, a prostitute, attempted on the advice of her accountants to register a private limited company which had its stated object: to carry on the business of prostitution. The Registrar accepted the registration under the name Lindi St Clair (Personal Services) Ltd. In 1980, the Attorney-General applied to the court to quash the registration on the basis that the company had been formed for an unlawful purpose. The court held that the registration should be quashed. Though the companys objects did not necessarily involve the commission of a criminal offence, contracts for the services of a prostitute would be illegal and unenforceable as contrary to public policy. The company had not therefore been formed for a lawful purpose. Separate Legal Personality 10. Salomon v A Salomon & Co Ltd 1897 AC 22 Salomon had run a bootmaking business as a sole trader. He formed a limited company and sold the business to it for nearly 40,000 (an overvaluation of around 8,000). The subscribers to the memorandum were S and 6 members of his family, who subscribed for 1 share each. S also took 20,000 1.00 shares in the company as part of the purchase price of his business, the remainder of the price being paid partly in cash and partly by way of a secured debenture for 10,000. The company did not prosper and was wound up a year later, at which time its liabilities, including the debenture, exceeded the assets by 7,700. The liquidator, on behalf of the unsecured creditors, resisted Ss claim and argued that S should in fact be liable for all the debts of the company. The House of Lords held that S was entitled to be paid under the debenture, and that he could not be made liable for the companys other debts. Lord Macnaghton said: “The company is at law a different person altogether from the subscribers to the memorandum; and though it may be that after incorporation the business is precisely the same as it was before, and the same persons are managers, and the same hands receive the profits, the company is not at law the agent of the subscribers or trustee for them. Nor are the subscribers liable, in any shape or form, except to the extent and in the manner provided by the Act. 11. Lee v Lees Air Farming Ltd 1961 AC 12 The husband of the plaintiff was the controlling shareholder and director of a company formed by him. He was also employed by the company as a pilot. The company had employers liability insurance. He was killed in an accident when flying a company plane on company business and his wife claimed compensation from the company (effectively claiming from the insurers). Her claim was successful. It was held that Lee and the company had separate legal personalities and the deceased could, as director, enter into a contract on behalf of the company between the company and himself as an employee. 12. Macaura v Northern Assurance Co 1925 AC 619 Macaura owned an estate in Ireland and insured some timber on the estate. He transferred the estate and the timber to a company (which he controlled), but failed to have the insurance re- issued in the companys name. There was a fire and the timber was mostly destroyed. Held: Macaura could not claim on the policy. The timber was no longer his to insure. Companies and Crime 13. Richmond on Thames Borough Council v Pinn & Wheeler 1989 RTR 354 The company was charged with a driving offence. It was held that a company could not be guilty of an offence which required for its commission the physical act of driving a lorry. 14. Tesco Supermarkets v Nattrass 1972 AC 153 (HL) An assistant at a branch of Tesco had stocked shelves with washing powder showing the normal price when posters in the store were advertising a lower price. The store manager failed to notice the error and the company was charged with misstating the price under the Trade Descriptions Act 1968. s.24(1) of the TDA 1968 allowed a defence where the offence had been committed owing to the fault or default of another person and the accused had exercised all due diligence to avoid committing an offence. The prosecution argued that the defence did not apply as the manager had not done all he could to avoid the offence. Held: The store manager was not the directing mind and will of the company - the company had done all it could to avoid committing an offence and the offence was the fault of another person (an employee). The company was acquitted. 15. R v P & O Ferries (Dover) Ltd (1990) 93 Cr App R 72 P & O, along with five of its managers was indicted for manslaughter after the cross-Channel ferry Herald of Free Enterprise capsized in 1987 with the loss of 192 lives. The judge held that the indictment was valid, saying: .where a corporation, through the controlling mind of one of its agents, does an act which fulfils the prerequisites of the crime of manslaughter, it is properly indictable for the crime of manslaughter. (In October 1990 the judge directed the jury to find all of the defendants not guilty, as there was insufficient evidence that any of the managers had the necessary mens rea - mens rea could not therefore be attributed to the company.) 16. R v Kite and OLL Ltd (1994) Unreported OLL was a company specialising in organising outdoor activities. On a canoeing trip prganised by the company, four sixth year school pupils were drowned. There was evidence that the company did not employ qualified instructors and gave its instructors no training. The company was convicted of manslaughter and fined 60,000. Peter Kite, the managing director, who had total control of the company, was sentenced to three years in prison. 17. Transco plc v HM Advocate (No 1) 2004 JC 29; 2004 SLT 41 Transco plc, a gas transporter, had been charged with culpable homicide in Scotland, following a gas explosion that caused the death of a family of four. This was the first time that a company had been charged with this crime in Scotland, a crime for which proof of mens rea is required. To establish the criminal responsibility of the company, the indictment pointed to the collective knowledge of defects in pipes between various committees and post holders within the company, as the directing mind and will of the company, rather than to one individual. At first instance this argument was accepted, but on appeal the High Court of Justiciary held that the aggregation of separate states on mind belonging to different post holders and committee members to constitute mens rea was contrary to Scots criminal law; there was no individual or group if individuals who acted with the requisite mens rea in this case to make the organisation criminally liable for culpable homicide at common law. 18. R v Philippou (1989) 89 Cr App R (CA) Philippou and another were the sole directors and shareholders of Sunny Tours Ltd which went into liquidation leaving unpaid debts of 11.5 million. They had withdrawn 369,000 from the companys account in London to buy themselves a property in Spain just before the company collapsed, and were charged with theft. It was argued for the accused that, as they were the sole will and directing mind of the company, if they consented to the removal of the funds, so did the company - there was therefore no dishonesty. Held: The money was effectively going into the pockets of the two shareholders. There was evidence from which it could be inferred that they had acted dishonestly and had intended to permanently deprive the company of its money. The charge was therefore relevant. Piercing the Corporate Veil 19. Dimbleby & Sons Ltd v National Union of Journalists 1984 1 WLR 427 The NUJ was involved in a trade dispute with T Bailey Forman Ltd. NUJ members had also been picketing a company called TBF (Printers) Ltd and the question arose as to whether this amounted to unlawful secondary picketing. The NUJ argued that it did not, as both companies were wholly owned subsidiaries of the same holding company, and were therefore both employers who were party to the dispute, within the meaning of s.17(3) of the Employment Act 1980.Held: Both companies were separate entities and the picketing was therefore unlawful. Lord Diplock said: The corporate veil in the case of companes incorporated under the Companies Acts is drawn by statute and it can be pierced by some other statute if such other statute so provides; but, in view of its raison detre and its consistent recognition by the courts since Salomon v A Salomon & Co Ltd, one would expect that any Parliamentary intention to pierce the corporate veil would be expressed in clear and unequivocal language. 20. Durham Fancy Goods v Michael Jackson (Fancy Goods) Ltd 1968 2 All ER 987 Durham Fancy Goods drew a bill of exchange on the defendants which was accepted on behalf of the company by M Jackson, who was a director and a company secretary. The bill and the form of acceptance, both of which were drawn up by the plaintiffs, referred to M Jackson (Fancy Goods) Ltd, whereas the proper name of the company was Michael Jackson (Fancy Goods) Ltd. The bill was dishonoured and the plaintiffs brought an action against M Jackson personally, arguing that by signing a document which did not correctly state the companys name, he had made himself personally liable on the bill. Held: There was sufficient misdescription to impose personal liability under what is now s.349 CA 1985. (Mr Jackson in fact escaped liability because it was the plaintiffs who had prepared the bill with the incorrectly stated name - they were therefore personally barred from going back on their implied representation that it was acceptable to them.) 21. Gilford Motor Co v Horne 1933 Ch 935 Horne had been employed by Gilford Motor Company under a contract in which he undertook not to compete with the company. He tried to evade the covenant by getting his wife to set up a company. All the shares in the company were held by Hornes wife and an employee. The new company then carried on business in competition with Hornes employer. The court was prepared to look behind the corporate identity and issued an injunction to prevent the company trading in competition with Gilford Motor Co. Lord Hanworth said: I am quite satisfied that this company was formed as a device, a strategem, in order to mask the effective carrying on of a business by Mr E B Horne. 22. Jones v Lipman 1962 1 WLR 832 Lipman sold land to Jones by a written contract but refused to complete the sale, offering damages for breach of contract. To put the house out of reach of Jones, he bought a company off the shelf and conveyed the house to it. Jones brought an action against Lipman and the company for specific performance. The court granted the decree. The defendant company is the creature of the first defendant, a device and a sham, a mask which he holds before his face in an attempt to avoid recognition by the eye of equity. 23. Re Bugle Press 1960 3 All ER 791 A comp