FORMENTO (STERLING AREA) LTD V. SELSDON FOUNTAIN P... MERCHANTS OF STAPLE OF ENGLAND v. BANK OF ENGLAND ... GENERAL AUCTION ESTATE CO. v. SMITH (1891). The promise to Mr. Booth was made some months before the new scheme was submitted to the bondholders. 350 case, a company was formed to lay down a transatlantic telegraph cable which was to be made by Hooper’s Telegraph Works Ltd. 7 Allen v. Hyatt (1914) 30 T.L.R. Courts will treat it within meaning of fiduciary duty . Minority shareholder must prove that there is a fraud- Peter's American Delicacy Co Ltd v. Heath 7. interest and at 20 per cent premium, to be a first charge on the property of the Corporation. Harbottle. MENIER V HOOPER’S TELEGRAPH WORKS Hooper’s Telegraph Works (Hooper’s) had contracted with another company (European Telegraph) to lay a cable to South America. Co. v. Hill, 67 F.2d 487, 1933 U.S. App. The Norwegian group purchased both debenture stock and ordinary stock in large amounts. MENIER V HOOPER’S TELEGRAPH WORKS Hooper’s Telegraph Works (Hooper’s) had contracted with another company (European Telegraph) to lay a cable to South America. The reasoning of Danckwerts J. is hardly consistent with the approach apparent in Menier v.Hooper's Telegraph Works (1874) 9 Ch.App. The second principle is a negative one, one which puts a restriction on the completeness of freedom under the first, without excluding such freedom wholly. It was held that the question, being in no way one of ultra vires action, was one of internal management only, and that any action that could be taken required that the company itself should be plaintiff. It was further provided by the scheme that a committee of four persons (one appointed by the first mortgage bondholders other than the British Government; one by the Debenture Stock-holders; one by the bank, the Canadian Bank of Commerce, and a certain Dr. Eyde, representing the Norwegian interests; and one by the British Government should have power to modify the scheme without confirmation by extraordinary resolution of the bondholders. Then we have North-West Transportation Company v. Beatty (1887) 12 App. This stock was at the time of little value, but it was evident that if the price of nickel rose it might become of value. It was held that the affirmance of the voidable contract, being matter only of internal policy, was binding on the company, and further that every shareholder, including the vendor, had a right to vote on such a question, notwithstanding that he might have a personal interest in the subject-matter in conflict with the interest of the company itself. 350. If their Lordships took the view 350: 43 L. J. Ch. Copy link Link copied. Their Lordships are of opinion that judgment was rightly given for the respondents in this appeal. English approach: Menier v Hooper’s Telegraph Works (1874) Co obtained a licence to lay cables. 330 : 30 L. T. 209 : 22 W. R. 396 inasmuch as it does not depend on misappropriation or fraud being proved. At this meeting the ratification was actually obtained by the aid of the votes of the vendor director himself and his nominees, which produced a majority of shareholders' votes at that general meeting. Pender v Lushington Court Court of Appeal Decided 2 March 1877 Citation(s) (1877) 6 Ch D 70 Keywords Vote, property, derivative claim has a right to say, "Whether I vote in … The original core works were … RE INDUSTRIAL OIL PRODUCTS CORPORATION LTD, BUGANDA TIMBER CO. LTD v. MULJI KANJI MEHTA, M.N. The Court of Appeal, in Berendsen, Ltd. v. APP. I & 2 (Ottawa: Information Canada, 1971). There the question arose, not as regarded a class of creditors, but of shareholders. LENNARD’S CARRYING CO. LTD V. ASIATIC PETROLEUM CO... BRATTON SEYMOUR SERVICE CO. LTD v. OXENBOROUGH. The appellant Trust Company was the trustee of a deed which constituted the floating security, and is also trustee of the securities in question in this appeal. might be awarded: see Menier v. Hooper’s Telegraph Works (1874) 9 Ch App 350. In Allen v.Gold Reefs of West Africa (1900) I Ch 656 case, the Court held that alteration of articles with retrospective effect is valid provided it was bonafide and for the benefit of the company as a whole. 350; 43 L.J. It often enables them to modify, by resolution properly passed, the security itself. There was an appeal to the Court of appeal, where Ferguson, J. Ch. This is a principle which goes beyond that applied in Menier v. Hooper’s Telegraph Works, inasmuch as it does not depend on misappropriation or fraud being proved. 444. ... and is usually referred to by reference to the case of Menier v. Hooper's Telegraph Works (1874) L.R. Subject to this, the power may be unrestricted. 9 Ch.App. Before confirming, please ensure that you have thoroughly read and verified the judgment. v. Hooper Telegraph Works. 350 and . This is a principle which goes beyond that applied in Menier v. Hooper’s Telegraph Works, inasmuch as it does not depend on misappropriation or fraud being proved. enced by statutes in the United States; see R.W.V. The Corporation was also to be at liberty to issue $6,000,000 of first income bonds at 10 per cent. See Daniels V Daniels: Frank and Ors V Abdu: Prudential Assurance Co Ltd V Newman Industries (No.2). 1. Ala. Nov. 8, 1933) Brief Fact Summary. 1. Hooper's Telegraph Works 28 and Cook v. Deeks,29 but by applying to a majority share-1xolder the Daniels v. Daniels 30 principle that directors are liable for using power to benefit themselves at the company's expense, The court 330. They must be exercised subject to a general principle, which is applicable to all authorities conferred on majorities of classes enabling them to bind minorities. Before their Lordships proceed to consider the somewhat involved circumstances in which the question arises, it will be convenient that they should refer to the principle to be applied in weighing the outcome of these circumstances. Mr Goldblatt started with the proposition that "a majority of shareholders cannot put company assets into their own pockets to the exclusion of the minority", for which he cited Menier v Hooper's Telegraph Works (1874) LR 9 Ch 350. Dickerson et at, Proposals for a New Business Corporations Law for Canada, vols. Following cases such as Foss v Harbottle (1843), (77) Menier v Hooper's Telegraph Works (1874) (78) and MacDougall v Gardiner (1875), (79) British Parliament introduced a statutory remedy against oppression in the Companies Act, 1948 (UK). In Burland v. Earle [1902] A. C. 83 : 71 L. J. P. C. 1 : 85 L.T. 350: 43 L. J. Ch. Having regard to the constitution of the company this could not be said to be oppressive so as to invalidate the voting. But as that vote had come to him as a member of a class he was bound to exercise it with the interests of the class itself kept in view as dominant. The remedy against oppression is adopted from UK company law. * Enter a valid Journal (must App. It may be that, as Ferguson, J. The main aim of this research work is to provide a jurisprudential approach towards the study of this case law. 1 Menier v Hooper’s Telegraph Works [1874] LR 9. This is an appeal against a judgment of the Court of Appeal of Ontario, affirming the judgment of Kelly, J., by which it was found in favour of the minority of a class of secured debenture-holders of the appellant corporation that the minority were not bound by resolutions passed by the majority of the class of such debenture-holders. It was laid down in Burland v. Earle [1902] A. C. 83 : 71 L. J. P. C. 1 : 85 L.T. In the case of Menier v Hooper’s . The resolutions in question sought to modify the rights of the debenture-holders as an entire class. It was there held that while the power conferred by a trust deed on a majority of debenture-holders to bind a minority must be exercised bona fide, and while the Court has power to prevent some sorts at least of unfairness or oppression, a debenture-holder may, subject to this, vote in accordance with his individual interests, though these may be peculiar to himself and not shared by the other members of the class. Mason v. Harris (1879) 11 Ch.D. Western Union Telegraph Co. v. Hill Case Brief - Rule of Law: For assault to occur, there must be an intentional and unlawful offer or attempt to touch. The reason was that it had been ratified by the shareholders at a general meeting. contains alphabet), British America Nickel Corporation Limited, And Others v. M.J. O'Brien Limited. (1876) 4 Ch.D 327 La Cie. Mayville v. Whitley [1895] 1 Ch. Get 1 point on providing a valid sentiment to this BOARD’S POWERS Power of management – RR s 198A, except 198A(2) : Automatic Self-Cleansing Filter Syndicate Co Ltd v RE IMPERIAL LAND CO OF MARSEILLES (1870) L.R. 350. Author: K John Beaumont. DAFEN TINPLATE CO. LTD V. LLANELLY STEEL CO. BRITISH AMERICAN NICKEL CORP LTD V. M.J. O’BRIEN LTD, BORDEN (UK) LTD v. SCOTTISH TIMBER PRODUCTS LTD, TESCO SUPERMARKETS v. NATTRASS [1972] AC 153. Menier v. Hooper’s Telegraph Works Ltd., (1874) 9 C App. GRAPHICAL PAPER AND MEDIA UNION v. DERRY PRINT AND... J.H. No comments: Post a Comment. Cas. 8 Ch. The provision of such a power to a majority bears some analogy to such a power as that conferred by S. 13 of the English Companies Act of 1908, which enables a majority of the shareholders by special resolution to alter the Articles of Association. D 705 case, the Court held that the power to alter articles cannot be taken away by any provision in the memorandum or articles”. 50 See, e.g., Re Darby [1911] 1 K.B. Cook v. Deeks and the dicta in Pavlides v. Jensen are properly sub- sumed into the category of "expropriation of company property".23 No resolution by the majority can authorize a breach of the direc- Product Description [Law Assginment- Script Moot Court] Corporate Law In Parke v Daily News [1962] Ch 927, minority shareholders sought to prevent this happening on the ground that such a payment went beyond the articles of association of the company, and such payment to ex-employees was not reasonably incidental to the carrying on of the business of the company. Lake Superior Ship Canal, Railway & Iron Co. v. Finan Citation: 155 U.S. 385 Court: US Supreme Court Date: December 10, 1894 In order to carry out a deep analysis of the case, various articles, research papers and books on Company Law have been made as a source of study. Get 2 points on providing a valid reason for the above The vendor in exercising his votes had thus a direct personal interest. In this case, where Menier a minority shareholder complained that there were self-interested transactions between a majority member and the company, the court held that a minority shareholder's action was properly bought in these circumstances. seem that the rule and its exceptions extend to them as well: Menier v. Hooper's Telegraph Works (1874) L.R. The effect of the war was to disorganize the markets of the appellant Corporation, so that it was mainly by the aid of purchases of its stock by a Norwegian nickel group, and by the cooperation of the British Government, that the appellant Corporation carried on its business between 1916 and 1919. App. Menier v Hooper’s Ts Telegraph Works Ltd [1874] 9 Ch App 350 Case facts: The European and South American Telegraph Co was formed to lay a transatlantic cable to be made by Hooper’s, who was the majority shareholder in E & SA Telegraph. Furthermore, the position in the tax cases seems to be exactly the opposite to that v. The Hooper's Telegraph Works Ltd was established by William Hooper in 1870 to manufacture and lay submarine communications cable using his patented vulcanized rubber core. 9 Ch. Nagappa Chettiar v. Madras Race Club, (1949) 1 MLJ 662. INDEPENDENT AUTOMATIC SALES LTD V. KNOWLES AND FOSTER. There is, however, this restriction of such powers, when conferred on a majority of a special class in order to enable that majority to bind a minority. 2 In Burland v. Earle [1902] A.C. 83, 93. Appeals 3501 and Burland v Earle (1902. Before the company was formed to produce finished submarine cable Hooper had furnished core for other companies, particularly that of William Thomas Henley, to armor and sheathe. In the first place, it is plain, even from his own letters, that before Mr. J. R. Booth would agree to the scheme of 1921 his vote had to be secured by the promise of $2,000,000 ordinary stock of the Nickel Corporation. Per James LJ: “I think it would be a shocking thing if that could be done, because if so the majority might divide the whole assets of the company, and pass a Menier v. Hooper's Telegraph Works (1874) L.R. I am confirmed in that view by the case of Menier v Hooper's Telegraph Works, where Lord Justice Mellish observes: “I am of opinion that, although it may be quite true that the shareholders of a company may vote as they please, and for the purpose of their own interests, yet that the majority of shareholders cannot sell the assets of the company and keep the consideration.” In other words, he admits that a … Majority have fiduciary duties vis-à-vis minority . It is that the power given must be exercised for the purpose of benefiting the class as a whole, and not merely individual members only. The bank and the Norwegian creditors were, by means of these issues, to have their claims reduced. ii. A., delivered the judgment. A scheme for reconstruction was prepared on behalf, of the Corporation and was laid before a meeting of the first mortgage bondholders on 31st March 1921. Click here to remove this judgment from your profile. 194. U.S. Supreme Court Southern Pacific Co. v. Bogert, 250 U.S. 483 (1919) Southern Pacific Co. v. Bogert No. Furthermore, the position in the tax cases seems to be exactly the opposite to that which he took up in Pavlides' case. As has been pointed out the appointment of the majority of this Committee was not entrusted to the mortgage bond-holders themselves. ss. In Menier v. Hooper’s Telegraph Works Ltd., (1874) 9 C App. Goodall v Hoogendoorn Ltd 1926 AD 11 Gray v Lewie (1873) 8 Ch. On a reorganization, to be presently referred to, these bonds were exchanged for bonds secured under a trust deed. The business interests of the company may render such a power expedient, even in the interests of the class of debenture-holders as a whole. Rather, they are examples of the established exception of "fraud on the minority" in its broad sense. 350. But their Lordships do not think that there is any real difficulty in combining the principle that while usually a holder of shares or debentures may vote as his interest directs, he is subject to the further principle that where his vote is conferred on him as a member of a class he must conform to the interest of the class itself when seeking to exercise the power conferred on his capacity of being a member. i. Menier v. Hooper Te legraph Works 1. Dhakeswari Cotton Mills v. Nil Kamal Chakravarty, AIR 1937 Cal 435. Company law member and membership rights Part B 1. Other points referred to in the judgments were raised in criticizm of the scheme, but it is not necessary for their Lordships to enter on them. 34 The Legal Risk Review Committee, the forerunner to the Financial Law Panel, was established by the Bank of England in April 1991 to review any potential legal risks in the UK wholesale financial markets. ICICI v. Parasrampuria Synthetic Ltd., Suit Appeal No. Email This BlogThis! There was also given power by extraordinary resolution to sanction the exchange of the "A" income bonds into other securities, and the British Government was to be relieved of its obligation to purchase nickel. But they had something else to consider in the first place. Telegraph Works where Menier was a minority shareholder who complained that . North-West Transportation Company v. Beatty. MacDougall v Gardiner [1875-76] L.R. Case on Misappropriation of corporate opportunities. 156 MAR. It has been suggested that the decision in these two cases on the last point is difficult to reconcile with the restriction already referred to, where the power is conferred, not on shareholders generally but on a special class, say, of debenture-holders, where a majority in exercising a power to modify the rights of a minority, must exercise that power in the class as a whole. ... 2,184,000, The British Government, B Bonds ... 3,000,000. Hooper’s was a majority shareholder in European Telegraph. It was true that a secret bargain to secure his vote by special treatment might be treated as bribery, but where the scheme to be voted upon itself provides, as it did in that case, openly for special treatment of a debenture-holder with a special interest, he may vote, inasmuch as the other members of the class had themselves known from the first of the scheme. 350. He also thought that it was outside the powers of the majority to confer on a Committee, not necessarily representing the interests of the first mortgage bond-holders, powers which belonged to these bond-holders alone, and to authorize the substitution for their security of something which was not a satisfactory security.