Company Law Cases

Question 1

Adams v Cape Industries plc

Answer 1

1990: Parent company is not automatically liable for act of its subsidiaries

Question 2

Ashbury Railway carraige and Iron Co Ltd v Riche

Answer 2

1875: Held that a company cannot undertake activities outside its stated objects in its memorandum of association

Question 3

Re produce marketing consortium Ltd

Answer 3

1989: directors found liable for wrongful trading as they continued when they knew no reasonable prospect of avoiding insolvent liquidation

Question 4

Lee v Lee’s air farming Ltd

Answer 4

1961: affirmed company and controlling shareholder are separate legal entities, allowing shareholder to be employee and claim workers compensation

Question 5

Macaura v Norhtern Assurance Co Ltd

Answer 5

1925: established shareholders have insurable interest in company’s asset, reinforcing separation between company and shareholders ownership

Question 6

Eclairs Group Ltd v JVK Oil & Gas plc

Answer 6

directors must exercise their powers for proper purposes

Question 7

Howard Smith Ltd v Ampol Petroleum Ltd

Answer 7

Held that directors must use their powers for proper purposes

Question 8

mutual life insurance co of new york v Rank Organisation Ltd

Answer 8

Concerned the validity of a company’s decision under its articles of association, emphasising the importance of compliance with corporate governance procedures

Question 9

re Barings plc

Answer 9

adressed directors duties of care and diligence, holding directors personally liable for faiing to supervise the activities leading to companys collapse

Question 10

Bhullaar v Bhullar

Answer 10

Directors breached their fiduciary dduties by purchasing property for themselves that was an opportunity for the company

Question 11

Re produce marketing consortium ltd

Answer 11

Same as earlier mentioned case, focusing on directors libaility for wrongful trading when they allowed the company to incur debts knowing it couldnt avoid insolvency