Misfeasance in UK Law

Leading Cases
  • Hussain v Chief Constable of West Mercia Constabulary
    • Court of Appeal (Civil Division)
    • 03 November 2008

    Misfeasance in public office is an intentional tort of considerable gravity. It seems to me that what Lord Bridge was concerned to discount in McLoughlin v O'Brien (above, paragraph 14) was “normal human emotions”, not significantly abnormal manifestations of non-physical sequelae.

  • Re Horsley & Weight Ltd
    • Court of Appeal (Civil Division)
    • 30 July 1980

    The ratification by the shareholders was effective unless the decision of the directors was proved to have been misfeasance on their part. The evidence gives rise to suspicion that at the time of the decision by the directors and of the purported ratification the company was not in a position to pay £10,000 to Mr. Horsley. But that evidence fell far short of proof that the directors should at the time have appreciated that the payment was likely to cause loss to creditors.

    There remains the question whether the grant of the pension was in the circumstances a misfeasance committed by the two directors who procured the grant and by Mr. Horsley Senior, the director who accepted the grant. If the company had been doubtfully solvent at the date of the grant to the knowledge of the directors, the grant would have been both a misfeasance and a fraud on the creditors for which the directors would remain liable. But the good faith of the directors is not impugned.

    In the absence of fraud there could still have been negligence on the part of the directors. If the company could not afford to spend £10,000 on the grant of a pension, having regard to problems of cash-flow and profitability, it was negligent of the directors to pay out £10,000 for the benefit of Mr. Horsley Senior at that juncture. There could have been gross negligence, amounting to misfeasance.

    If the company could not afford to pay out £10,000 and was doubtfully solvent so that the expenditure threatened the continued existence of the company, the directors ought to have known the facts and ought at any rate to have postponed the grant of the pension until the financial position of the company was assured.

    The findings of the learned judge are sufficient to support the suspicion that the company could not afford to pay out £10,000 for the benefit of Mr. Horsley Senior, but this suspicion is largely based on hindsight. The accounts show that business was expanding, that there were no discernible cash-flow problems and that past profits were sufficient to absorb half of the payment for the pension, leaving the other half to be absorbed in the future.

  • Mullarkey and Others v Broad and another
    • Court of Appeal (Civil Division)
    • 21 January 2009

    A party who seeks to advance a different case, in circumstances such as this, bears a heavy burden as regards showing that the case could not have been conducted differently, in any material respect, as regards the evidence.

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Legislation
  • Company Directors Disqualification Act 1986
    • UK Non-devolved
    • January 01, 1986
    ...... I . Matters Applicable in All Cases Part I . Matters Applicable in All Cases . SCH-1.1 .   . 1. Any misfeasance or breach of any fiduciary or other duty by the director in relation to the company. SCH-1.2 .   . 2. Any misapplication or retention by the ......
  • Small Business, Enterprise and Employment Act 2015
    • UK Non-devolved
    • January 01, 2015
    ...... . Additional matters to be taken into account where person is or has been a director . . 5 Any misfeasance or breach of any fiduciary duty by the director in relation to a company or overseas company. . . 6 Any material breach of any legislative or other ......
  • Companies (Consolidation) Act 1908
    • UK Non-devolved
    • January 01, 1908
    ......misapplied or retained or become liable or accountable for. any money or property of the company, or been guilty of any. misfeasance or breach of trust in relation to the company, the. court may, on the application of the official receiver, or of the. liquidator, or of any creditor ......
  • Insolvency Act 1986
    • UK Non-devolved
    • January 01, 1986
    ...... . . has misapplied or retained, or become accountable for, any. money or other property of the company, or been guilty of any. misfeasance or breach of any fiduciary or other duty in relation. to the company. . (2) The reference in subsection (1) to any misfeasance or. breach of any ......
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Books & Journal Articles
  • Banking regulation and the tort of misfeasance in public office: The difficulties in suing regulators Three Rivers District Council and others (1) Bank of Credit and Commerce International SA (in liquidation) (2) v Bank of England
    • Nbr. 5-1, January 1997
    • Journal of Financial Regulation and Compliance
    • 70-72
    The Plaintiffs were depositors who had lost monies in the collapse of Bank of Credit and Commerce International (BCCI). BCCI itself was named as a Plaintiff since it was an assignee of the claims o...
  • Three Rivers District Council and Others v Governor and Company of the Bank of England
    • Nbr. 7-3, March 1999
    • Journal of Financial Regulation and Compliance
    • 274-280
    The factual background to this appeal was set out in Vol. 5, No. 1, pp. 70–72 of the Journal of Financial Regulation and Compliance and concerned the 1991 collapse of the Bank of Credit and Commerc...
    ...... the Plaintiffs' claim against the Bank of England and dismissed the proceedings, on the basis that the essen-tial elements of the tort of misfeasance in public office were not present and thus the claim was bound to fail. THE ISSUES The Appellants appealed to the Court of Appeal requesting that ......
  • Misconduct in a Public Office—Should it Still Be Prosecuted?
    • Nbr. 76-2, April 2012
    • Journal of Criminal Law, The
    This article examines the common law crime of misconduct in a public office from its ancient origins, and considers the difficulties in defining the crime. These difficulties arise from the crime b...
    ......These difficulties arise from the crime being very widely defined as it includes non-feasance, misfeasance, frauds and de- ceits, malfeasance and oppression. It is unclear whether these are separate categories or if they run into one another. It is also ......
  • Three Rivers District Council v Governor and Company of Bank of England
    • Nbr. 9-3, March 2001
    • Journal of Financial Regulation and Compliance
    • 279-283
    The various pre‐trial stages of these complex proceedings have been discussed in previous issues of this Journal in Vol. 5, No. 1, pp. 70–72, Vol. 7, No. 3, pp. 274–280, Vol. 8, No. 4, pp. 359–364 ...
    ......In the same judgment the House of Lords ruled as a matter of law that the essential elements of the tort of misfeasance in public office (which by this stage is the only possible legal ground of claim avail-able to the depositors) were to be found 'where a public ......
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Law Firm Commentaries
  • Bribery of public officials: Judicial review and misfeasance in public office
    • LexBlog United Kingdom
    You're unsuccessful in a tendering process run by a UK government authority. Later you learn that the rival organisation that was awarded the contract paid a sizeable bribe to the official responsi...
  • De-Facto Directors: Case 1: Re Snelling House: Directors' Misfeasance
    • Mondaq United Kingdom
  • Stashing Cash & Assets Through Nominees
    • LexBlog United Kingdom
    The very last paragraph of my post Fighting Financial Fraud At UK Banks, featured a former vice-president of a global bank who indicated: “there was little standing in the way of a determined crimi...
    ...... of a global bank who indicated: “there was little standing in the way of a determined criminal because of the ‘complicity or misfeasance’ of many banks and the use of nominees to open bank accounts.” I believe that little has changed since Fighting Financial Fraud At UK Banks was ......
  • Have UK Insolvency Practitioners Lost the Protection of Release Clauses?
    • LexBlog United Kingdom
    In the third (and final) of our blog series on recent CVA cases, in Rhino Enterprises Properties Ltd & Anor [2020] EWHC 2370 (Ch), the High Court gave permission for misfeasance proceedings to ...
    ...... our blog series on recent CVA cases, in Rhino Enterprises Properties Ltd & Anor [2020] EWHC 2370 (Ch), the High Court gave permission for misfeasance proceedings to be brought against two former joint administrators. This was despite an approved Company Voluntary Arrangement (“CVA”) containing ......
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