1966 (2) TMI 42

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.... by such cases as In re Yenidje Tobacco Co. Ltd. [1916] 2 Ch. 426 and In re Davis & Collett Ltd. [1935] Ch. 693; [1935] 5 Comp. Cas. 467 namely, that where in substance a partnership in the business carried on by a company subsists between the persons owning its share capital, the same circumstances which would entitle a partner to have the partnership wound up may entitle a contributory in the analagous position to have the company wound up under the "just and equitable" provision of section 222 of the Companies Act, 1948. The petition also alleges certain other grounds of winding up, namely, (1) deadlock; (2) oppression of the petitioner as a member of the company; and (3) that the substratum of the company has gone. I can deal with....

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....d faith ; and continued: ] As indicated earlier, objection to the petition has been taken on the ground that the petitioner has no locus standi to present it. It is said, and not denied, that the company is insolvent. [His Lordship reviewed the company's trading record as set out above and continued:] On the evidence and notwithstanding an allegation to the contrary in the petition, I am satisfied that if the company were wound up, there would be no surplus for the contributories. In these circumstances is the petitioner entitled to present a petition as a contributory? In my judgment, he is not. The general principle was stated by Jessel M.R. in In re Rica Gold Washing Co. [1879] 11 Ch. D. 36 CA as follows: "Now I will say a word ....

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....ons to the general rule, and submitted that the partnership cases constitute one such exception. I think, however, that Mr. Walton was right in submitting that Mr. Finer's argument placed too much stress on the partnership aspect of the case. I am concerned here with a company and not with a partnership, and while it is true that the partnership analogy may be of assistance in certain circumstances in considering whether it is just and equitable to wind a company up, the analogy must not be pressed too far and, in particular it cannot, in my judgment judgment, be invoked for the purpose of giving a locus standi to a petitioner who, by company law, is denied one. Moreover over, there seems to me to be no a priori reason why a quasi-partne....

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....olders." Then later he said: "I have been referred to no authority which suggests that when the circumstances are such that it is clear on the facts alleged in the petition that there will be nothing available for distribution among the shareholders, or that the petitioner himself has got no interest in the relief sought, he can act, as it were, as an amicus curiae and present the petition to the court merely with a view to bringing to the court's attention some state of affairs which he considers to be open to criticism in the way in which the company's business is being conducted. " And finally he says [1966] 1 WLR 69, 75; [1966] 36 Comp. Cas. 350 "Nevertheless it remains the rule that before a contributory can petition succes....

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....1937] Ch. 392; 53 TLR 548; [1937] 2 All. ER 466; [1938] 8 Comp. Cas. 131 where he said this [1937] Ch. 392, 398; [1938] 8 Comp. Cas. 131 : "It has been pressed on me in considering this case that I am to be guided by the principles which influence the court in determining whether or not a partnership shall be wound up. I propose faithfully to follow that injunction, laid down as it is by the Court of Appeal in In re Yenidje. Tobacco Co. Ltd. [1916] 2 Ch. 426 and followed recently in In re Davis & Collet Ltd. [1935] Ch. 693; [1935] 5 Comp. Cas. 467 by Crossman J. Whether it be a matter of articles of association or articles of partnership the rights of the parties are determined by those articles, and the question whether it is right for ....

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....s, and, as I have already said, was effected without objection from the petitioner's solicitor. Its immediate purpose was, no doubt, to ensure the passing of the company's accounts for the year ending March 31, 1963. The chairman's casting vote was exercised on the three occasions to which I have already referred. In order to succeed on this petition, the petitioner, in my judgment, has to establish that the matters of which he complains, all of which were carried out within the framework of the articles, were not carried out bona i fide in the interests of the company. This, in my judgment, he has failed to establish. All the challenged decisions were decisions which, in my view, were capable of being regarded as being in the best in....