| Bairstow v Queens Moat Houses Plc | |
|---|---|
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| Court | Court of Appeal of England and Wales |
| Full case name | Bairstow & Others v Queen's Moat Houses Plc |
| Decided | May 17, 2001 (2001-05-17) |
| Citation | [2001] EWCA Civ 712 |
| Case opinions | |
| Robert Walker LJ | |
| Keywords | |
| Unlawful distribution | |
Bairstow v Queens Moat Houses Plc EWCA Civ 712 is a UK company law case concerning shares.
Facts
Counsel argued that directors should be liable for unlawful distributions even when the company was solvent.
Judgment
Robert Walker LJ held that the idea that investors were getting a windfall was wrong. However it may be possible that in suing the directors, an equitable contribution from shareholders could be payable. That argument was not, however, raised here.
45. In considering this windfall objection it is no doubt right to ignore the fact that the appellants are in practice unlikely, in view of the very large sums involved and the costs orders already made against them, to be able to meet even a small part of any judgments against them. It is not so easy to ignore the fact that the present shareholders in Queens Moat are probably a very different body of investors than those who received the unlawful dividends ten years ago. Some of those early investors may have cut their losses by selling their shares at the bottom of the market. Some of the present investors may have been astute enough or lucky enough to have bought their shares at the bottom of the market. Some may even have formed a view, in deciding to invest in Queens Moat, as to the prospects of a successful recovery on the counterclaim. These considerations put some flesh on the Salomon v Salomon point. They are matters which the court cannot easily take into account, however strong its instinct to achieve a fair result and avoid anything which resembles double recovery. Nevertheless it may be assumed that some of the present shareholders did receive and benefit from unlawful dividends paid between 1991 and 1993.
Sedley LJ concurred.
See also
| Sources on company shares | |
|---|---|
| Birch v Cropper (1889) 14 App Cas 525 | |
| Andrews v Gas Meter Co 1 Ch 361 | |
| Borland’s Trustee v Steel Brothers & Co Ltd 1 Ch 279 | |
| Companies Act 2006 ss 33 and 282-4 | |
| Scottish Insurance Corp v Wilsons & Clyde Coal Ltd AC 462 | |
| Dimbula Valley (Ceylon) Tea Co v Laurie Ch 353 | |
| Will v United Lankat Plantations Co Ltd AC 11 | |
| Re Bradford Investments Ltd BCLC 224 | |
| Second Company Law Directive 77/91/EEC | |
| Companies Act 2006 ss 549-551 and 561-571 | |
| Companies Act 2006 ss 10 and 617 | |
| Re Scandinavian Banking Group plc Ch 87 | |
| see UK company law |