Caselaw summary

Ball (PV Solar Solutions Ltd) v Hughes [2017]

Directors of a company who sought to avoid tax could be found to have breached their duty under section 172 to promote the success of the company.  They could not have reasonably concluded this would have been benefited the company's creditors.

Bushell v Faith [1970]

A clause in the Articles stating that on a vote to dismiss a director, any shares held by that director on a poll were to be counted as three votes per share was held to be valid.  Section 168 requires an ordinary resolution and so in this case, a director with 30% of the shares could block a resolution to dismiss him.

Foss v Harbottle [1957]

This case sets out the doctrine that if a company is in a position to bring a claim in the civil Courts, the company itself is the proper Claimant for that action and not the shareholders.

Ebrahimi v Westbourne Galleries Ltd [1973]

This case involved a "quasi-partnership" company. The three directors were also the three equal shareholders. Two of the directors (a father and son) had the other director removed under an ordinary resolution and the Court held this breached the third director's legitimate expectations and so the it was just and equitable to wind up the company.

Pender v Lushington [1877]

This case made it clear that a shareholder's right to vote was part of that member's property and any interference in it could lead to a derivative action or even a personal claim.  Lord Jessel MR was keen to stress a member could vote anyway they saw fit, even in a conflict of interest.

Re Duomatic [1969]

Here the Court decided that a company could take a decision in a way without necessarily suing all the requisite formalities of a general meeting. If all the members attended and voted at a general meeting, the decision they took at the meeting would be held to have the same binding effect as a formal resolution. There have been exceptions since then.

Salomon v A Salomon Co Ltd [1896]

In the House of Lords it was held that a company was entirely independent from the shareholders with a totally different legal personality.  This was the concept of limited liability.

O'Neill v Philips [1999]

Here the House of Lords held there was no unfair prejudice because the company had not breached any formal arrangements with the shareholder in question.  The concept of legitimate expectations was based on an expectation that the company's affairs would be conducted in the manner agreed by all the members.

Cook v Deeks [1916]

This case involves setting aside a fraud on a minority shareholder. The majority of shareholders had entered into a contract that competed with the company's business and the fourth shareholder applied to the Court in this regard. The Court held the majority had to account for this to the company.

Henry George Dickinson v NAL Realisations (Staffordshire) Limited [2017]

This case shows that the Courts do not have to wait for a company to be insolvent before they find that a transaction was aimed at defrauding creditors.

W T Ramsey v IRC [1982]

A Court can look over a whole series of transactions and form a view that they are being entered into with the aim of avoiding tax.  Here, the Court noted that the activities involved had no commercial significance apart from lowering the tax liability.

Eclairs Group Ltd and Glengary Overseas Ltd v JKX Oil & Gas plc [2015]

This case involved the "proper purpose" duty under section 171. The Court held that the company had only behaved in the way it did to prevent shareholders from taking the action they wanted, which breached the proper purpose test.

Hosking v Marathon Asset Management LLP [2016]

Here the Court held that a partner who breaches his fiduciary duties can be required to forfeit partnership profits.

Khan and Another v Miah and Another [2000]

This case looked at when a partnership can be said to have commenced; here it was held that it didn't necessarily when the business started trading as preparatory activities carried out with a common view to an eventual profit could be said to be the start of the partnership.

Dickenson v Gross (HM Inspector of Taxes) [1926]

A partnership deed had been entered into but it was ruled that in truth no such partnership existed as none of the terms of the deed had been put into practice.

Trego v Hunt [1896]

The Court looked at the meaning of goodwill in a business.  What goodwill meant would depend on the character and nature of the business. It was the "very sap and life of the business".

Greenhalgh v Arderne Cinema Ltd [1951]

This case was concerned with the concept of a fraud on the minority and the possibility of this being an exception to the rule in Foss v Harbottle. Here it was held there was no such fraud as the alteration to the Articles did not discriminate against minority shareholders.