Company Regulations in UK Law

What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of "proximity" or "neighbourhood" and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other.

It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is, of a personal character arising between one individual and another, which may make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way.

In carrying out his investigation and informing his opinion the auditor necessarily works very closely with the directors and officers of the company. But he is employed by the company to exercise his professional skill and judgment for the purpose of giving the shareholders an independent report on the reliability of the company's accounts and thus on their investment.

It was a convenient phrase designed to broaden rather than restrict the scope of the court's jurisdiction in relation to schemes. It was designed simply to identify the types of company and association to which the jurisdiction applies. At least so far as concerns solvent companies, nothing in either the Judgments Regulation or the Insolvency Regulation was intended to impact restrictively upon the scope of that jurisdiction.

In our judgment, oppression occurs when shareholders, having a dominant power in a company, either (1) exercise that power to procure that something is done or not done in the conduct of the company's affairs or (2) procure by an express or implicit threat of an exercise of that power that something is not done in the conduct of the company's affairs; and when such conduct is unfair or, to use the expression adopted by Lord Simonds in Scottish Co-operative Wholesale Society Ltd v. Meyer 1959 Appeal Cases, page 324, "burdensome, harsh and wrongful" to the other members of the company or some of them, and lacks that degree of probity which they are entitled to expect in the conduct of the company's affairs.

Otherwise dissentient creditors may disregard the scheme and enforce their claims against assets (including security for the debt) in countries outside the country of incorporation.

The Company had power to deal in shares, they bought shares, they received a dividend on these shares, they sold the shares. This was just the ordinary commercial transaction of a dealer in shares. I ask myself the question put by Lord Radcliffe in Edwards (H.M.I.T.) v. Bairstow & Harrison [1956] A.C. 14 at page 37: