¹ By the Companies Act 1985, s. 1(1) a company must have at least two shareholders. This requirement is fulfilled even if one shareholder has only one share, which he holds on behalf of the other shareholder, and subject to his instructions. This type of arrangement was accepted by the House of Lords in Salomon v. A. Salomon & Co. Ltd. [1897] A.C. 22, where the company was absolutely controlled by Salomon who owned all the shares bar six, which were owned by his wife and children to satisfy the statutory requirement at the time that there be at least seven shareholders. As Lord Macnaghten said (at 50): “There is nothing in the [Companies Act 1862] requiring that the subscribers to the memorandum should be independent or unconnected, or that they or any one of them should take a substantial interest in the undertaking, or that they should have a mind and will of their own … or that there should be anything like a balance of power in the constitution of the company”. The issue of absolutely controlled companies will become increasingly important when the EC Twelfth Directive on single-member private limited liability companies is implemented (Dir. 1989/667/EEC, O.J. No. L 395, 30.12.89, p. 40).Google Scholar

² [1897] A.C. 22, 53.

³ (1989) 89 Cr.App.R. 290.

⁴ The other accused fell ill during the trial and so the case proceeded only against Philippou.

⁵ Every person who “being a director, member or officer of any body corporate or public company, fraudulently takes or applies for his own use or benefit, or for any use or purposes other than the use or purposes of such body corporate or public company, any of the property of such body corporate or public company shall be guilty of a misdemeanour and on conviction thereof liable to penal servitude for any term not exceeding seven years”. “Public company” was interpreted in Davies [1955] 1 Q.B. 71Google Scholar, as including companies incorporated under the Companies Act, even if they were private companies. In Grubb [1915] 2 K.B. 683 a director who had “complete control” was convicted of fraudulent conversion. Such an offence still exists in certain of the Australian territories, under which there may be convictions of directors in similar circumstances to Philippou: e.g. the South Australian case ofGoogle ScholarAttorney-General's Reference No. I of 1985 [1986] 41 S.A.S.R. 147.Google Scholar

⁶ “Theft and Related Offences”, Cmnd. 2977 (1966).

⁷ Ibid., pan. 33.

⁸ Ibid., para. 15.

⁹ First recognised by the House of Lords in Salomon v. A. Salomon & Co. Ltd. [1897] AC. 22.Google Scholar

¹⁰ Adams v. Cape Industries p.l.e. [1990] Ch. 433, 536.Google Scholar

¹¹ J.H. Rayner (Mincing Lane) Ltd. v. Department of Trade and Industry [1990] 2 A.C. 433, 482 (Lord Templeman), 515 (Lord Oliver).Google Scholar

¹² [1967] Crim. L.R. 298; decided before the Theft Act 1968 was enacted. Other cases where directors have been convicted of stealing from the company include Kohn (1979) 69 Cr. App. R. 395Google Scholar, Mainwaring (1981) 74 Cr. App. R. 99Google Scholar and McHugh and Tringham (1989) 88 Cr. App. R. 385.Google Scholar

¹³ [1925] A.C. 619, 633.

¹⁴ (1981) 74 Cr. App.R. 81.

¹⁵ Contrary to the Criminal Damage Act 1971, ss. 1(1) and 1(3).

¹⁶ (1981) 81 Cr.App.R. 319. It is unclear whether the defendant had absolute control of the company.

¹⁷ Lord Keith of Kinkel, Woolfson v. Strathclyde Regional Council (1979) 38 P. & C.R. 521, 525. In “From Peeping Behind the Corporate Veil, to Ignoring it Completely” (1990) 53 M.L.R. 338 Ottolenghi argues cogently that the courts deal with the veil in different ways, depending on the circumstances. An absolute shareholder will only be held to own “corporate” property where the veil is ignored completely.Google Scholar

¹⁸ In Adams v. Cape Industries p.l.e. [1990] Ch. 433, 544 it was accepted that the right to use the corporate structure to reduce tax liability or to prevent legal obligations from arising was inherent in company law; but this did not permit the evasion of legal obligations which had already arisen, as exemplifiedGoogle Scholarby Gilford Motor Co. Ltd. v. Home [1933] Ch. 935; Jones v. Lipman [1962] 1 W.L.R. 832.Google Scholar

¹⁹ On the basis of the criteria in Smith, Stone and Knight Ltd. v. Birmingham Corp. [1939] 4 All E.R. 116.Google Scholar

²⁰ Ibid., p. 121.

²¹ [1984] Q.B. 624. Discussed by Fox in “Stealing from one's own Company” (1984) J.P. 180.

²² Judge Blaker Q.C. in a case reported as Pearlberg and O'Brien [1982] Crim. L.R. 829 (Winchester Crown Court).Google Scholar

²³ As reported in Attorney-General's Reference (No, 2 of 1982) [1984] Q.B. 624, 639.Google Scholar

²⁴ At p. 639.

²⁵ As held in Painter [1983] Crim. L.R. 189.Google Scholar

²⁶ A number of recent decisions have examined when it is appropriate to give such a direction: Wootton and Peake [1990] Crim. L.R. 201Google Scholar, Ravenshad [1990] Crim. L.R. 398.Google ScholarIn Price (1990) Cr. App. R. 409 it was held that a Ghosh direction should only be given where the accused might have believed that what he was alleged to have done was in accordance with the ordinary person's idea of honesty. It will be unnecessary to give a Ghosh direction where the claim to have acted honestly comes within the Theft Act 1968, s. 2(1), discussed below.Google Scholar

²⁷ [1982] Q.B. 1053.

²⁸ [1982] Crim. L.R. 829, 831.

²⁹ Although there is some authority suggesting that collateral dishonesty towards third parties is sufficient, such as Wilkinson and Marsden (1821) Russ and Ry 470 and Hale 1 P.C. 153Google Scholar, the preferable view is that it does not suffice; the dishonesty must relate to the person to whom the property belongs. The rationale behind the law of theft is to protect the property rights of the owner or of those with a proprietary interest. This was implicitly accepted in Whiteside and Anloniou [1989] Crim. L.R. 436 where the defendants were charged with going equipped for cheating, contrary to the Theft Act 1968, s. 25. They were found equipped to sell counterfeit cassettes. The trial judge had ruled that the breach of copyright in selling such counterfeit tapes amounted to evidence of dishonesty. The Court of Appeal held that breach of copyright was irrelevant. The reasons for this conclusion are unclear, but it would appear that, because the deception was to be practised against the buyers of the tapes, any dishonesty had to relate to the buyers and dishonesty against the holders of the copyright would be collateral and insufficient. I am grateful to Dr. A.T.H. Smith for this point.Google Scholar

³⁰ Walker v. Wimborne (1976) 137 C.L.R. 1Google Scholar; Sutlon, Ring v. (1980) 5 A.C.L.R. 546Google Scholar; Nicholson v. Permakraft (N.Z.) Lid. [1985] 1 N.Z.L.R. 242Google Scholar; Kinsela v. Russell Kinsela Pty. Ltd. (in liq.) (1986) 4 N.S.W.L.R. 722.Google ScholarThese cases were adopted in England in Liquidator of West Mercia Saferywear Ltd. v. Dodd [1988] B.C.L.C. 250.Google Scholar

³¹ (1986) 4 N.S.W.L.R. 722 at p. 730.

³² Likewise in Nicholson v. Permakraft (N.Z.) Ltd. [1985] 1 N.Z.L.R. 242, 249 Cooke J. stated: “In a situation of marginal commercial solvency such creditors may fairly be seen as beneficially interested in the company or contingently so”.Google Scholar

³³ This must be an “honest belief in a true consent, honestly obtained”, Attorney-General's Reference, note 22 above, at p. 641.Google Scholar

³⁴ A belief in the application of the alter ego principle, discussed infra.

³⁵ [1984] A.C. 320.

³⁶ Lord Roskill at p. 332.

³⁷ (1989) 88 Cr.App.R. 385.

³⁸ Other cases decided before and after Morris that are consistent with it include Meech [1974] Q.B. 549Google Scholar; Skipp [1975] Crim. L.R. 114Google Scholar; Hircock (1978) 67 Cr.App.R. 278Google Scholar; Niman, Eddy v. (1981) 73 Cr.App.R. 237Google Scholar; Kell [1985] Crim. L.R. 239Google Scholar; Morgan [1985] Crim. L.R. 447; Fritschy [1985] Crim. L.R. 745.Google Scholar

³⁹ [1972] A.C. 626.

⁴⁰ [1985] V.R. 511 (Supreme Court of Victoria), discussed by Nessen, von [1986] Crim. L.R. 154Google Scholar and by Smith, (1985) 9 Crim. L.J. 320Google Scholar. A similar decision was reached on similar facts in the New Zealand case of Craig v. Police (1983) B.C.R. 141Google Scholar, discussed by Williams, in (1989) 38 I.C.L.Q. 913.Google Scholar

⁴¹ (1989) 89 Cr. App. R. 290, 299.

⁴² At p. 300.

⁴³ This is an odd way of putting it. In Morris appropriation is defined as “adverse interference with or usurpation of rights”. On this definition appropriation is ex hypothesi adverse, so how can appropriation, when it exists, be made adverse?

⁴⁴ It is noteworthy that “unauthorised” in the Computer Misuse Act 1990, s. 17(5) is defined as where the accused does not have consent to gain access to the program data from the person entitled to give consent. In Gomez [1991] 3 All E.R. 394, 399 Lord Lane C.J. said that “at least so far as the criminal law is concerned we find it difficult to draw a line between express authority and consent”.

⁴⁵ [1990] 1 Q.B. 274.

⁴⁶ ” At p. 286.

⁴⁷ [1984] V.R. 685. In Jona, R. V. 1961 (2) S.A. 301(W), 318Williamson, J. stated ”… where property is taken with the owner consenting it is never theft, unless it is misrepresented to him in some way and he has given his consent through a misapprehension”.Google Scholar

⁴⁸ [1990] 1 Q.B. 274.

⁴⁹ Contrary to the Theft Act 1968, s. 15(1).

⁵⁰ At p. 289.

⁵¹ [1991] 3 All E.R. 394.

⁵² [1985] V.R. 511.

⁵³ Thus stated, Crockett J., at p. 520Google Scholar, that “the question whether the disposition is ultra vires the company and therefore void or voidable is not one which should be allowed to intrude into this branch of the criminal law”. He relied upon a dictum of Lord Roskill in Morris, at p. 334Google Scholar, that it was “wrong to introduce into this branch of the criminal law questions whether particular contracts are void or voidable on the ground of mistake or fraud or whether any mistake is sufficiently fundamental to vitiate a contract. These difficult questions should so far as possible be confined to those fields of law to which they are immediately relevant and I do not regard. them as relevant questions under the Theft Act 1968”. There are similar dicta in Mainwaring (1981) 74 Cr.App.R. 99, 108Google Scholar; McHugh and Tringham (1989) 88 Cr.App.R. 385, 393Google Scholar; Gomez [1991] 3 All E.R. 394, 399.Google Scholar

⁵⁴ (1985) Crim. L.J. 320, 322.

⁵⁵ This was the dissenting view of Brooking, J. who, at p. 527Google Scholar, said: “At what point does one stop having regard to the company law? Account is taken of the position of the applicant and his wife as directors and shareholders. How much further is a jury to be permitted to enter the forbidden realm of company law?” Professor Smith has examined this general issue in “Civil Law Concepts in the Criminal Law” [1972B] C.L.J. 197.Google Scholar

⁵⁶ This was particularly exemplified by the doctrine of ultra vires (considered infra). This doctrine limited the capacity of companies. If the effect of this were ignored by the criminal law it could result in capacity being given to a legal person, which only exists by virtue of the civil law, but which would be regarded as lacking capacity by the civil law. There is no need for such a different approach to be adopted. There should be a unified, and so a consistent, legal system comprising both criminal and civil law.

⁵⁷ Rolled Steel Products (Holdings) Ltd. v. British Steel Corporation [1986) Ch. 246.Google Scholar

⁵⁸ Ashbury Railway Carriage and Iron Company Limited v. Riche (1875) L.R. 7 H.L. 653Google Scholar; Re Woking Urban District Council (Basingstoke Canal) Act 1911 [1914] 1 Ch. 300.Google Scholar In Evans, Spackman v. (1868) L.R. 3 H.L. 171, 244, Lord Romilly said “if this company had bought mines or entered into a contract to set up a steam packet business, this would have been simply void, and would not have bound the company or any one, because they could do nothing that was beyond the objects of the company; but, on the other hand, the directors might do anything, however irregular, in promoting the objects of the company, provided it was done bona fide; and this could not be avoided unless steps were speedily taken for this purpose”.Google Scholar

⁵⁹ Gower, L.C.B., Gower's Principles of Company Law 4th ed. (Stevens, 1979) pp. 169–170. However, he does say that “[it] can therefore be taken as established that the doctrine has no application except in relation to contract and property transactions which are the only cases where, in practice, it is invoked”. With the abrogation of the ultra vires doctrine by the Companies Act 1989 (analysed infra) the criminal liability of a company is now placed on a “firmer conceptual basis” (Prentice, “Reform of the Ultra Vires Rule—A Consultative Document”, (D.T.I. 1986) p. 71).Google Scholar

⁶⁰ Sullivan, “Company Controllers, Company Cheques and Theft” [1983] Crim. L.R. 512; Dine, “Company Controllers, Company Cheques and Theft-Another View” [1984] Crim. L.R. 397; Sullivan, “A Reply” [1984] Crim. L.R. 405.

⁶¹ [1982] Ch. 442.

⁶² In Attorney-General's Reference (No. 2 of 1982), note 22 above, the defendants withdrew millions of pounds, much of which was used for personal expenditure.

⁶³ Sullivan [1984] Crim. L.R. 405, 409.

⁶⁴ This section came into force on July 31, 1990. It is unlikely that the old section 35 would have applied to the present context. That section deemed transactions to be within the capacity of the company. However, it only applied if (i) there was a dealing with the company-it was unclear whether this covered gratuitous transactions; (ii) the transaction was decided upon by the directors-thus, not applying if there were directors other than the accused; (iii) the person dealing with the company was acting in good faith-this was given a subjective interpretation (Barclays Bank Ltd. v. T.O.S.G. Trust Fund Ltd. [1984] B.C.L.C. 1, 18), but presumably was not fulfilled if the accused knew that the transaction was beyond the capacity of the company. These interpretative difficulties were analysed by Prentice in “Reform of the Ultra Vires Rule A Consultative Document” (D.T.I. 1986) pp. 7–12. None of these difficulties would now arise under the new section 35.Google Scholar

⁶⁵ Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. [1915] A.C. 705; D.P.P. v. Kent and Sussex Contractors Ltd. [1944] K.B. 146; I. C. R. Haulage Ltd. [1944] K.B. 551; Moore v. I. Bresler Ltd. [1944] 2 All E.R. 515; H. L. Bolton (Engineering) Co. Ltd. v. T.J. Graham & Sons Ltd. [1957] 1 Q.B. 159; Tesco Supermarkets Ltd. v. Nattrass [1972] A.C. 153.Google Scholar

⁶⁶ Thus I disagree with the view of Lord Reid in Tesco Supermarkets Ltd. v. Nattrass [1972] A.C. 153, 171, who said that “The person who speaks and acts as the company is not alter. He is identified with the company”. Likewise, in Canadian Dredge & Dock Co. Ltd. v. The Queen (1985) 19 C.C.C. (3d) 1, 15 (Supreme Court of Canada) Estey J. called the alter ego theory the identification theory. However, a doctrine of identification is more appropriate where the corporate veil is pierced; it is a misnomer so far as the directing mind and will is concerned, since there is not total identification but only “identification” for purposes of attribution of mens rea. This explains why there cannot be a conspiracy between the directing mind and the company (McDonnell [1966] 1 Q.B. 233); because there is only one mental element, that of the directing mind, and an agreement, requiring at least two minds, is essential for a conspiracy. If the directing mind principle is founded upon identification, it is difficult to explain the limitation on it where there is fraud upon the company (discussed infra). If a doctrine of identification is adopted then the directing mind is the company, and it is not possible to defraud oneself. For these reasons the directing mind principle will be referred to as the “alter ego” doctrine. Alter ego is more accurate since it means “second self’ rather than “same self”.Google Scholar

⁶⁷ This was accepted by Schroeder J.A. in St. Lawrence Corp. Ltd. [1969] 5 D.L.R. (3d) 263, 278 who said that if the agent “is a vital organ of the body corporate and virtually its directing mind and will in the sphere of duty and responsibility assigned to him so that his action and intent are the very action and intent of the company itself, then his conduct is sufficient to render the company indictable by reason thereof”.

⁶⁸ [1965] P. 294, noted by Leigh (1965) 28 M.L.R. 584.

⁶⁹ Denning L.J. stressed the importance of control in H. L. Bolton (Engineering) Co. Ltd. v. T.J. Graham & Sons Ltd. [1957] 1 Q.B. 159, 172: “Others are directors and managers who represent the directing mind and will of the company, and control what it does”. Likewise, Viscount Dilhorne in Tesco Ltd. v. Nattrass [1972] A.C. 153, 187. However Lord Diplock, at p. 200, stressed that the directing mind must be entitled to exercise the powers of the company under its articles of association. This would not exclude an absolute controller. Table A, article 70 (S.I. 1985/805) recognises that directors may exercise all the powers of the company “subject … to any directions given by special resolution” by the general meeting.Google Scholar

⁷⁰ 1961 (2) S.A. 301 (W), 317–318.

⁷¹ 1965 (2) S.A. 616 (A.D.), discussed by Beuthin in “Theft by a Director” (1965) 82 S.A.L.J. 479.

⁷² Note 22 above, at p. 640.

⁷³ Criminal Law, 5th ed. (The Law Book Co. Ltd. 1990), ed. Fisse, .Google Scholar

⁷⁴ Leigh asserts, in his seminal work on corporate criminal liability The Criminal Liability of Corporations in English law, (L.S.E. Research Monographs 2, 1969) at p. 107, that the agent “is not for all purposes to be identified with the company”.

⁷⁵ D.P.P. v. Kent and Sussex Contractors Ltd. [1944] K.B. 146, 156; Beamish Construction Co. Ltd. [1967] 1 C.C.C. 301, 328–330; St. Lawrence Corp. Ltd. [1969] 5 D.L.R. (3d) 263, 278 (Schroeder J.A.). In Canadian Dredge and Dock Co. Ltd. (1985) 19 C.C.C. (3d) 1, 17 it was stated that the “act in question must be done by the directing force of the company when carrying out his assigned function in the corporation”. Since an absolute controller will have power to authorise an abstraction the requirement of authorisation would not appear to cause any problems. However, there are limitations upon the ability of an absolute controller to authorise, as will be examined infra. 77

⁷⁶ (1985) 19 C.C.C. (3d) 1 (Supreme Court of Canada). Judgment was delivered by Estey J.

⁷⁷ At p. 37.

⁷⁸ At p. 42.

⁷⁹ [1944] 2 All E.R. 515.

⁸⁰ This defence was rejected by Humphreys J. (with Birkcli J. concurring) at p. 517.

⁸¹ Standard Oil Co. of Texas v. U.S., 307 F. 2d 120 (5th Cir. 1962)Google Scholar; Clarkson and Lyon (1986) 2 A.Crim.R. 54Google Scholar; Clarkson (1987) 25 A.Crim.R. 277Google Scholar; Maher (1986) 83 F.L.R. 332.Google Scholar

⁸² (1988) 86 Cr.App.R. 174.

⁸³ At p. 178.

⁸⁴ [1984] Q.B. 624, 640. See also Sullivan “Company Controllers, Company Cheques and Theft” [1983] Crim. L.R. 512, 519.

⁸⁵ [1928] A.C. 1.

⁸⁶ In the civil case of Belmont Finance Corporation Ltd. v. Williams Furniture Ltd. [1979] Ch. 250, Buckley L.J. stated, at p. 262, that “if the agent is acting in fraud of his principal and the matter of which he has notice is relevant to the fraud, that knowledge is not to be imputed to the principal”.Google Scholar

⁸⁷ (1989) 89 Cr.App.R. 299, 300.

⁸⁸ [1976] 1 N.Z.L.R. 194, 202.

⁸⁹ Cooke J. did recognise a qualification upon this principle in that (at p. 202) he said: “Presumably the identification does not extend to matters totally unconnected with the business of the company.” Such a qualification is in fact a lot wider in that it covers any transaction from which the company does not benefit.

⁹⁰ (1989) 88 Cr.App.R. 385, 393.

⁹¹ Mustill L.J. distinguished this principle from the alter ego doctrine. It is submitted that this is correct; the principles are different, although they have the same effect.

⁹² Salomon v. A. Salomon & Co. Ltd. [1897] AC. 22, 57Google Scholar; Re Express Engineering Works Ltd. [1920] 1 Ch. 466;Google Scholar Parker and Cooper Ltd. v. Reading [1926] Ch. 975; Re Horsley and Weight Ltd. [1982] Ch. 442, 454Google Scholar, per Buckley L.J.: “A company is bound in a matter which is intra vires the company by the unanimous agreement of its members … even where that agreement is given informally”; Re Fletcher Hunt (Bristol) Ltd. [1989] B.C.L.C. 108.Google ScholarE.B.M. Co. Ltd. v. Dominion Bank [1937] 3 All E.R. 555 stressed that the informal consent must be unanimous, even if a shareholder only has an insignificant shareholding.Google ScholarRe Bailey, Hay and Co. Ltd. [1971] 1 W.L.R. 1357 held that acquiescence is enough.Google Scholar

⁹³ This informal approach has been adopted by Companies Act 1989. s. 113. which inserts a new section 381A into the Companies Act 1985. This section authorises private companies to adopt unanimous written resolutions instead of calling a meeting at which resolutions would be passed. Such written resolutions must be signed by, or on behalf of. all the members of the company, who at the date of the resolution would have been entitled to attend and vote at general meetings. This written resolution procedure is, however, different to the common law recognition of informal resolutions in that a copy of any written resolution must be sent to the company's auditors who have a power to requisition, attend and be heard at any general meeting. If wrongdoers seek to abstract corporate property this would concern auditors—but they could only requisition a general meeting and not stop those in absolute control from passing the resolution authorising the abstraction. It is most unlikely that those in absolute control would follow this procedure, particularly because it does not affect the common law's recognition of informal authorisation.

⁹⁴ [1926] Ch. 975.

⁹⁵ [1955] A.C. 516n. (S.C. Eire).

⁹⁶ The Attorney General for the Dominion of Canada v. The Standard Trust Company of New York [1911] A.C. 498, 505 (Viscount Haldane).

⁹⁷ See note 31.

⁹⁸ [1985] 1 N.Z.L.R. 242, 249.

⁹⁹ [1986] Ch. 246, 296.

¹⁰⁰ Also In re Hall Garage (1964) Lid. [1982] 3 All E. R. 1016, 1037, per Oliver, J.Google Scholar; Re Horsley and Weight Ltd. [1982] Ch. 442, 454Google Scholar; Aveling Barford v. Perion (1989) 5 B.C.C. 677, 683.Google Scholar In Re D.K.G. Contractors (1990) 6 B.C.C. 903, 908, the principle was applied where there was an absolute controller.Google Scholar

¹⁰¹ Kinsela v. Russell Kinsela Ply. Ltd. (In Liq.) (1986) 4 N.S.W.L.R. 722, 732.Google Scholar

¹⁰² [1951] Ch. 286, 291 (Evershed, M.R.).Google Scholar

¹⁰³ This was the approach adopted in the leading alteration of articles case of Allen v. Gold Reefs of West Africa Ltd. [1900] 1 Ch. 656.Google Scholar

¹⁰⁴ This is analysed very well by Williams, G. in “Theft by Company Controllers—A New Zealand View” (1989) 38 I.C.L.Q. 913, 921–923.Google Scholar

¹⁰⁵ MacDougall v. Jersey Imperial Hotel Co. Ltd. (1864) 2 H. and M. 527Google Scholar; Re Exchange Bank Co. (1882) 21 Ch. D. 519Google Scholar; Guinness v. Land Corp. of Ireland (1882) 22 Ch.D. 349Google Scholar; Whitworth, Trevor v. (1887) 12 App. Cas. 409. It is possible to return capital to shareholders under the Companies Act 1985, but strict conditions must be complied with. Return of capital is now governed by ss. 135ff. (reduction of capital) and ss. 159ff. (redemption or repurchase of shares) Companies Act 1985.Google Scholar

¹⁰⁶ [1985] V.R. 511, 525.

¹⁰⁷ As with an ultra vires disposition, a disposition of company property in contravention of the maintenance of capital doctrine cannot be ratified, even by the unanimous decision of all shareholders: Re Exchange Banking Co. (1882) 21 Ch.D. 519.Google Scholar

¹⁰⁸ Re Exchange Banking Co. (1882) 21 Ch.D. 519Google Scholar; Ridge Securities Ltd. v. l.R.C. [1964] 1 All E.R. 275Google Scholar; Re Halt Garage (1964) Ltd. [1982] 3 All E.R. 1016Google Scholar; Aveling Barford v. Perion (1989) 5 B.C.C. 677, 682.Google Scholar

¹⁰⁹ Horrwitz, , “Company Law Reform and the Ultra Vires Doctrine” (1946) 62 L.Q.R. 66. 73–74Google Scholar; Williams, (1989) 38 I.C.L.Q. 913, 922: “The ultra vires doctrine pertains to the capacity of the company to undertake a particular act, and is not relevant to an act which is capable of performance, but is prohibited from being so performed.”Google Scholar

¹¹⁰ Ridge Securities Ltd. v. I.R.C.Google Scholar [1964] 1 W.L.R. 479; Re Horsley and Weight [1982]Google Scholar Ch. 442. 454; Aveling Barford v. Perion (1989) 5 B.C.C. 677, 682.Google Scholar

¹¹¹ [1982] 3 All E.R. 1016, 1038.

¹¹² Re George Newman & Co. [1895] 1 Ch. 674, 686: “to make presents out of profits is one thing and to make them out of capital or out of money borrowed by the company is a very different matter” (Lindley, L.J.). Also Verner v. General and Commercial Investment Trust [1894] 2 Ch. 239.Google Scholar

¹¹³ Thus, Holmes, J.A. in S. v. de Jager 1965 (2) S.A. 616 (A), 625 said that “the appellant's contention is an attempt to have it both ways. On the one hand he would retain the advantage of limited liability as a shareholder. On the other hand he would seek to absolve himself from the fiduciary duty which a director owes to the company, helping himself to its assets via its supposed consent to which he was a party. … To combine in substance the common law advantages of individual ownership with the statutory benefits of limited liability without regard to fiduciary duties as director-this would not be company law at all”.Google Scholar

¹¹⁴ Especially the Insolvency Act 1986, s. 213 (liability for fraudulent trading) and s. 214 (liability for wrongful trading).

¹¹⁵ Other measures that protect the interests of creditors include the Insolvency Act 1986, s. 238 (transactions at an undervalue) and s. 239 (preferences).

¹¹⁶ Bonner [1970] 1 W.L.R. 838.Google Scholar

¹¹⁷ Analysed by B.A.K. Rider in “Partnership Law and its Impact on ‘Domestic Companies’” [1979] C.L.J. 148. Such a company is exemplified by the small family business. This was recognised by Crockett J. in Roffel, at p. 519, where he described the company there as a “family partnership business … in a corporate shell”.

¹¹⁸ [1916] 2 Ch. 426, 432.

¹¹⁹ Insolvency Act 1986, s. 122(1)(g).

¹²⁰ Coleman v. Myers [1977] 2 N.Z.L.R. 225; Clemens v. Clemens Bros. Ltd. [1976] 2 All E.R. 268.Google Scholar

¹²¹ In Roffel, ibid. Young C.J. said that common sense would regard the defendant as a thief.

¹²² “Why are certain kinds of action forbidden by law and so made crimes or offences? The answer is: to announce to society that these actions are not to be done and to secure that fewer of them are done” (Hart, , Punishment and Responsibility-Essays in the Philosophy of Law (Oxford 1986), p. 6).Google Scholar

¹²³ Anomey-General's Reference (No. 1 of 1985) (1985) 41 S.A.S.R. 147, 153 (Prior J.).Google Scholar