Ratification by the General Meeting

1970 ◽  
Vol 5 (2) ◽  
pp. 249-255 ◽  
Author(s):  
Aharon Barak
Keyword(s):  
General Meeting ◽  
Third Party ◽  
Simple Majority ◽  
Minority Shareholders ◽  
Fiduciary Duties ◽  
The Third ◽  
Bona Fide ◽  
A Company ◽  
Court Of Appeal ◽  
Residual Power

Can the members of a company in general meeting ratify a transaction of the directors by simple majority, when the latter—in breach of their fiduciary duties—have not acted “bona fide in the interests of the company”? This question is likely to prove of importance in a number of different contexts. In Bamford v. Bamford it arose in connection with the validity of an act of the directors in the sphere of the company's relations with a third party—the contention that the act was invalid having been made by the minority shareholders, who objected to ratification, and not by the third party himself. The possibility of ratification gives rise to two questions: is the general meeting of the company the competent organ to exercise this power? And, assuming that it is, can the act done in breach of a duty be ratified by it by simple majority? In the Bamford case it is only the former aspect of the problem that is considered.The articles of the company vested the power to allot shares in the directors. In exercising this power the directors failed to act “bona fide in the interests of the company”. Their act was ratified by the members in general meeting by simple majority and the validity of the ratification was challenged. Both the judge of first instance and those sitting on appeal decided that it was valid. Plowman J., in the Chancery Division, held that, since the directors had been actuated by an improper motive, they thereby lost their power of allotment, which accordingly vested in the general meeting, as the organ of the company with residual power in this respect. The general meeting—he went on to hold—could ratify the directors' action by simple majority. Harman L.J. and Russel L.J., in the Court of Appeal, reached the same conclusion— but for different reasons. In their opinion, the fact that the directors allotted the shares for an improper motive does not mean that what they did was in excess of their powers; the allotment simply became voidable. The power to remedy the defect—they held—is in the hands of the general meeting, which can exercise this power by simple majority.

Majority and Minority Shareholders

2020 ◽  
pp. 119-174
Author(s):  
Paul Davies
Keyword(s):  
At Risk ◽  
High Risk ◽  
Small Group ◽  
Company Law ◽  
Minority Shareholders ◽  
Private Benefits ◽  
Controlling Shareholders ◽  
The Third ◽  
Wide Range ◽  
A Company

Where a company has a controlling or a small group of controlling shareholders, the non-controlling shareholders are at risk that the controllers will extract private benefits of control at the expense of the non-controllers. UK company law contains a wide range of techniques for addressing this issue, some more effective than others. This chapter begins by examining the various ways in which well-advised investors can contract for protection before they enter the company and how the law protects the agreements reached. The second part discusses rights to exit the company upon the occurrence of certain events. The third part discusses disclosure rights, designed to bring self-dealing transactions into the open. The fourth focuses on ways of structuring the board or shareholder body when the decision before it carries a high risk of self-dealing. The final part considers cases where the courts review the substantive fairness of the controllers’ conduct, notably, but not only, the provisions on ‘unfair prejudice.

5. Majority and Minority Shareholders

2020 ◽  
pp. 119-174
Author(s):  
Paul Davies
Keyword(s):  
At Risk ◽  
High Risk ◽  
Small Group ◽  
Company Law ◽  
Minority Shareholders ◽  
Private Benefits ◽  
Controlling Shareholders ◽  
The Third ◽  
Wide Range ◽  
A Company

Where a company has a controlling or a small group of controlling shareholders, the non-controlling shareholders are at risk that the controllers will extract private benefits of control at the expense of the non-controllers. UK company law contains a wide range of techniques for addressing this issue, some more effective than others. This chapter begins by examining the various ways in which well-advised investors can contract for protection before they enter the company and how the law protects the agreements reached. The second part discusses rights to exit the company upon the occurrence of certain events. The third part discusses disclosure rights, designed to bring self-dealing transactions into the open. The fourth focuses on ways of structuring the board or shareholder body when the decision before it carries a high risk of self-dealing. The final part considers cases where the courts review the substantive fairness of the controllers’ conduct, notably, but not only, the provisions on ‘unfair prejudice.

Can Estoppel be Raised Against an Eviction in Terms of PIE?

2017 ◽  
Vol 30 (2) ◽  
pp. 434-455
Author(s):  
Elmien WJ Du Plessis
Keyword(s):  
Case Law ◽  
Third Party ◽  
The Real ◽  
The Third ◽  
Tacit Consent ◽  
Bona Fide ◽  
The Third Party

Estoppel is a well-known defence against (or limitation on) the rei vindicatio. This would be the case for example where the owner by some representation creates the impression that a third party is the owner of a thing and that the third party has the capacity to alienate the property. The bona fide third party can, when the owner then institutes the rei vindication to recover his property, raise estoppel and preclude the real owner from claiming his property. Before 2002, if one wanted to evict an unlawful occupier from certain residential premises, one would institute the rei vindicatio. In Ndlovu v Ngcobo; Bekker v Jika [2002] 4 All SA 384 (SCA) the court, however, ruled that the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE) must be used in all instances of evicting people from urban residential premises. The question is: does estoppel serve as a defence/limit in the application of PIE? Surprisingly few cases deal with this issue. The court in Joe Slovo made a few remarks about the possibility of using estoppel as a defence against the rei vindicatio by looking at the interpretation of ‘tacit consent’ required by PIE. This article will interpret provisions of PIE and look at case law that deals with the use of estoppel in lease cases. It will conclude by remarking on the feasibility of using estoppel as a defence in PIE eviction cases.

binds a company and its members under the terms of the memorandum and articles of association. In each case, there is separate provision for these varieties of contract under other legislation. Apart from the provisions of the 1999 Act, the third party’s rights arising under some other rule of law will remain unaffected. Thus, if an existing common law or equitable exception to the doctrine of privity of contract applies in favour of T, he may rely on that instead of invoking the provisions of the 1999 Act. This will be particularly important in cases in which T is unable to prove that he has relied on the term in the contract between A and B or in any other case in which the restrictive provisions of s 1 and s 2 might work against T. Thus, if T can establish the existence of a trust of the promise made in his favour or if he has an action in the tort of negligence or if some other statutory exception applies in his favour, T will still be able to avail himself of that alternative route. Although s7(1) only refers to T’s right under s 1, it must follow that the provisions of ss 2 and 3 are also inapplicable, since both of these provisions expressly state that they apply where T has relied on s 1. It has been seen above that at common law there is nothing to prevent the promisee from enforcing a term expressed to be for the benefit of the third party, if he wishes to do so. This position is preserved under s 4 of the 1999 Act.

1995 ◽  
pp. 805-806
Keyword(s):  
Rule Of Law ◽  
Common Law ◽  
Third Party ◽  
Alternative Route ◽  
The Third ◽  
The Third Party ◽  
Privity Of Contract ◽  
A Company ◽  
Made In ◽  
Do So

scholarly journals Restitution, Coercion by a Third Party, and the Proper Role of Notice

1997 ◽  
Vol 56 (1) ◽  
pp. 71-79
Author(s):  
Eoin O'Dell
Keyword(s):  
Third Party ◽  
The Third ◽  
Proper Role ◽  
Bona Fide

If a plaintiff makes a payment to a defendant under the coercion of a third party, it has been said that the plaintiff's action in restitution to recover the payment from the defendant is dependent upon whether the defendant had notice of the third party's coercion. That is an error, to which the analysis here is intended as a corrective. The true view is that the plaintiff's action in restitution is dependent only upon the fact of the coercion vitiating his consent; notice is relevant only to separate the question whether the defendant can rely on the defence of bona fide purchase for value without notice.

scholarly journals Third Party Fraud inducing Material Mistake Slip Knot Investments 777 (Pty) Ltd v du Toit 2011 4 SA 72 (SCA)

2017 ◽  
Vol 14 (7) ◽  
pp. 186
Author(s):  
Chris James Pretorius
Keyword(s):  
Supreme Court ◽  
General Rule ◽  
Case Law ◽  
Third Party ◽  
The Third ◽  
The Supreme Court ◽  
The Law ◽  
The Third Party ◽  
Court Of Appeal ◽  
Slip Knot

In Slip Knot Investments v Du Toit 2011 4 SA 72 (SCA) the Supreme Court of Appeal had to determine if the material mistake of a contractual party induced by the fraud of an independent third party could sustain a plea of iustus error raised by the mistaken party. The position prior to this decision was uncertain and characterised by inconsistency, mostly occasioned by the application of the iustus error doctrine together with fault. The Supreme Court of Appeal found that in the circumstances the mistaken party was liable, despite the fraud of the third party, on the basis of the reliance theory. The decision is commendable for bringing a measure of certainty to the law of mistake on this point and indicating that the reliance theory (as opposed to the iustus error doctrine) is the appropriate means to resolving such cases. Nevertheless, it is suggested that although the general rule implied by the court's approach is entirely apposite, there may well be exceptional instances where on the basis of relevant policy considerations the reliance theory should not prevail and the mistaken party should be absolved from contractual liability. In this manner reliance, which at first seems reasonable for being induced by the conduct of the contract denier, may upon further reflection be regarded as unreasonable based on the consideration of risk creation at the hand of the contract assertor, for instance. Admitting exceptions in appropriate circumstances would also provide a degree of consonance with earlier case law, where, even if the court's approach was open to theoretical criticism, a court has intuitively felt that liability should not lie.

scholarly journals Interference of the intervener in contractual relations: means of protecting a bona fide creditor

2021 ◽  
pp. 83-98
Author(s):  
Mikhail Leonidovich Osipov ◽  
Anastasiya Aleksandrovna Guseva
Keyword(s):  
Burden Of Proof ◽  
Third Party ◽  
Economic Losses ◽  
The Third ◽  
Bona Fide ◽  
The Subject ◽  
Contractual Relations ◽  
The Third Party

The subject of this article is relations that arise to interference of the third party (intervener) in contractual relations of the parties. The author considers the question of possible means of protecting a bona fide creditor from the actions of an intervener, such as challenging of the transaction consummated between the obligator and the intervener, as well as recovery of tort damages from the intervener for the benefit of a bona fide creditor. The article examines the issues emerging in the context of application of both methods of protection. The conclusion is made on the possibility of use of both methods, in preference to recovery of damages. It is noted that challenging of the transactions allows to equitably redistribute the burden of proof in disputes with a mala fide intervener, while the tort claim implies the possibility of recovering pure economic losses from a mala fide intervener. The authors indicate that the current Russian legislation does not contain dogmatic obstacles for application of such method of protecting a mala fide intervener.

scholarly journals Evidence and Variation of Confiscation Orders: R v O'Flaherty (Carl Anthony) (Court of Appeal Criminal Division, 29th of October 2018)

2018 ◽  
Vol 15 (1) ◽  
Author(s):  
Charanjit Singh
Keyword(s):  
Third Party ◽  
The Third ◽  
Proceeds Of Crime ◽  
The Third Party ◽  
Court Of Appeal ◽  
Adequate Evidence

Abstract The appellant (O'Flaherty) (O) was appealing against two confiscation orders. In short, this case demonstrates that a judge can increase the value of a confiscation order made pursuant to s. 22 of the Proceeds of Crime Act 2002 (POCA) where adequate evidence is presented. The increase resulted from the fact that the Crown had discovered a further asset (property) that could be realized. O contended that a third party had an interest in the property and the value of the confiscation orders should not be increased. After questioning O and the third party the judge concluded that O's claim was not made out and the judge had not erred.

Resolving tension from the third-party forgiveness effect

2014 ◽  
Author(s):  
Jaclyn M. Moloney ◽  
Chelsea A. Reid ◽  
Jody L. Davis ◽  
Jeni L. Burnette ◽  
Jeffrey D. Green
Keyword(s):  
Third Party ◽  
The Third ◽  
The Third Party
Sign in / Sign up

Export Citation Format

Share Document