Chase Manhattan Equities Ltd v Goodman and Others
| Jurisdiction | England & Wales |
| Judgment Date | 27 July 1990 |
| Date | 27 July 1990 |
| Court | Chancery Division |
Chancery Division
Before Mr Justice Knox
Company - insider dealing - gift of shares - sham
A gift of shares by a company director who had unpublished price-sensitive information relating to shares in the company, prior to their sale on the Stock Exchange, was held to be a sham, and the agreement for sale of the shares was held to be unenforceable.
The director, who gave the instructions for sale, acted in contravention of section 1 of the Company Securities (Insider Dealing) Act 1985. Although section 8(3) of that Act provided that no transaction was to be void or voidable by reason only of the fact that it was entered into in contravention of the Act, that section was intended to protect the working of the Stock Exchange, and the court would not enforce the sale because to do so would be an affront to the public conscience in that the court would be appearing to assist the director in his illegal conduct.
Mr Justice Knox so held in the Chancery Division in a judgment ordered not to be published before the completion of criminal proceedings against the director, Mr Ivor Goodman.
Mr Michael Tugndhat, QC and Mr David Parsons for the plaintiff; Mr Paul Collins for the first defendant, Mr Goodman; Mr William Blackburne, QC and Mr Raphael Cohen for the second defendant, Mrs Linda Lesley Fitzgerald; Mr Michael Lerego for the third, fourth and fifth defendants, Natwest Nominees Ltd, National Westminster Bank plc, and Natwest Stockbrokers Ltd.
MR JUSTICE KNOX said the action and counterclaim concerned the validity and enforceability of a sale agreement made on the Stock Exchange on Monday October 5, 1987 between the plaintiff, Chase Manhattan Equities Ltd, acting as market maker, and Natwest Stockbrokers Ltd, the fifth defendant, as broker, whereby Chase Equities agreed to buy some 692,209 ordinary shares in Unigroup plc (the company) at £1.67 per share, the shares being registered in the name of Natwest Nominees Ltd, the third defendant, and being subject to a charge in favour of the National Westminster Bank plc, the fourth defendant.
Apart from a small parcel of 1,309 shares, there was an issue as to their beneficial ownership, since the remaining 690,900 shares had purportedly been given by Mr Goodman to Mrs Fitzgerald by a deed of gift dated October 1, 1987. Mr Goodman was living with Mrs Fitzgerald, although not married to her, both...
To continue reading
Request your trial
-
Quinn v IBRC (in special liquidation)
...(Ireland) Inc. (in liquidation) v. Credit Suisse Canada [1999] 4 I.R. 542. Chase Manhattan Equities v. Goodman [1991] B.C.L.C. 897; [1991] B.C.C. 308. Devine v. Scott and Johnston (1932) 66 I.L.T.R. 107. Equuscorp v. Bassat [2007] VSC 553, (2007) 216 F.L.R. 1. Euro-Diam Ltd. v. Bathurst [19......
-
Fyffes Plc (plaintiff) v DCC Plc, S&L Investments Ltd, James Flavin and Lotus Green Ltd
...be determined. 614 The plaintiff referred the court to the decision of the English High Court in Chase Manhattan Equities v. Goodman [1991] B.C.L.C. 897. One of the issues in that very complex case was whether a share sale was illegal as being in breach of the legislation then in force in t......
-
Fyffes Plc v DCC Plc
...... by benefiting certain investors as compared with others, insider dealing is likely to undermine that confidence and ...In Chase Manhattan Equities v Goodma n [1991] B.C.L.C. 897 the ... (1983) 570 F Supp 1397, Chase Manhattan Equities v Goodman [1991] BCLC 897 and SEC v Falbo (1998) 14 F Supp 2d 508 ......
-
Patel v Mirza
...with the express provisions of section 63(2). 70 Third, the transaction which Mr Patel is seeking to enforce is not (contrast Chase Manhattan Equities v Goodman) the legally objectionable agreement to speculate on the index on the basis of insider information. His claim is not to enforce th......