Corporate Attribution in Private Law (Hart Studies in Private Law)

Product Information

Minority protection doctrines: from equity and company law to strata title” [2011] Conveyancer and Property Lawyer 96-114 Ministerial Acts’ in Paul Davies and Cheng-Han Tan (ed), Intermediaries in Commercial Law (Hart Publishing, 2022) A claim was brought by liquidators against (amongst others) directors of the insolvent company alleging a conspiracy to defraud the company. The allegation was that there had been a carousel fraud relating to European Emissions Trading Scheme Allowances. The defendants applied to strike out the claim on the ground of ex turpi causa and in particular, it was argued that the knowledge of the directors should be attributed to the company.

Change of Position in Restitution for Wrongs – A View from Singapore’ (2014) 130 Law Quarterly Review 18-21Four Misconceptions about Charity Law in Singapore” [2012] Singapore Journal of Legal Studies 37-54 We look at the recent Supreme Court decision in Jetivia v Bilta [2015] UKSC 23 in relation to the question of in what circumstances will the knowledge of a director or officer of a company be attributed to the company itself. Birksian Themes and their Impact in England and Singapore: Three Points of Divergence’ [2021] Lloyd’s Maritime and Commercial Law Quarterly 350-379 (with T Liau).

Two Kinds of Agency’ (2019) 93 Supreme Court Law Review 385-411 (reprinted as ‘Two Kinds of Agency’ in Jason Neyers, Andrew Botterell, Zoe Sinel (eds), Gerald Fridman and the Law of Obligations: Past, Present and Future (LexisNexis Canada, 2019)) The Evolution of Charity Law in Singapore - From Pre-Independence to the 21st Century” [2012] Trust Law International 83-95 For example, what is the position where the claim is brought on behalf of the company itself, for example by a liquidator, for losses caused to the company as a result of the (former) employee or officer’s conduct? Should the knowledge or conduct of the director/employee be attributed to the company, thereby providing the director or employee with a defence to the company’s claim on the grounds of ex turpi causa– in other words that the company should be precluded from claiming as a result of its own illegality? A Principal’s Mental Incapacity and ‘Termination’ of the Agent’s Authority’ (2024) LQR (forthcoming) The Court of Appeal decided that the knowledge of directors in such circumstances should not be attributed to the company. It is notable that the Court of Appeal’s view was that such conclusion should apply irrespective of whether or not there was a ‘sole actor’ in control of the company and indeed earlier authorities had moved away from the position where the concept of ‘the directing mind and will’ was of principal significance in determining a question of attribution. Further, the Court of Appeal considered that the question of ex turpi causa was irrelevant to the present case.

Introduction

Corporate attribution is the process by which the acts and states of mind of human individuals are treated as those of a company to establish the company's rights, duties, and liabilities. But when and why are acts and states of mind attributed in private law? Meridian, Allocated Powers and Systems Intentionality Compared’ in Elise Bant (ed), The Culpable Corporate Mind (Hart Publishing 2023), Chapter 6 This issue had previously been looked at by the House of Lords in Stone & Rolls v Moore Stephens [2009] 1 AC 1391. That case concerned a claim by a company in liquidation against its auditors. The claim was for alleged negligence on the basis that the auditors had failed to detect and prevent wrongdoing by the company’s sole director, as a result of which, the company became liable to various defrauded banks. The majority of the House of Lords held that the claim failed on the basis that the fraud in that case should be attributed to the company. However, the reasoning behind this decision and the question of what principles may be derived from it has given rise to much debate. Over the Horizon: Where Agency, Equity and Collective Sales Meet’ (2010) 28 Singapore Law Review 39-53

Where a company has been the victim of wrong-doing by its directors, or of which its directors had notice, then the wrong-doing, or knowledge, of the directors cannot be attributed to the company as a defence to a claim brought against the directors by the company’s liquidator, in the name of the company and on behalf of its creditors, for the loss suffered by the company as a result of the wrong-doing, even where the directors were the only directors and shareholders of the company, and even though the wrongdoing or knowledge of the directors may be attributed to the company in many other types of proceedings.’ Rescuing Uncertain Leases in English Law: A Study in Compatibility for Transplantation: Berrisford v Mexfield Housing Co-Operative Ltd’ [2012] Singapore Journal of Legal Studies 481-490 (with K Low) A similar question came before the Supreme Court in the case of Jetivia v Bilta [2015] UKSC 23. However, unlike Stone & Rolls, which involved a claim by the company against a third party, in Bilta the defendants were the alleged wrongdoers themselves. Meridian, Allocated Powers, and Systems Intentionality Compared’ in Elise Bant (ed), Culpable Corporate Minds (Hart Publishing, forthcoming Sept 2023) As a matter of English law, it is generally the case that a company will be responsible for the actions of its directors and, in many cases, its employees. In contract, this manifests itself through the rules of agency; in tort, through the doctrine of vicarious liability.Proprietary Restitution’ in Elise Bant, Kit Barker, and Simone Degeling (eds), Unjust Enrichment and Restitution Handbook (Edward Elgar 2020) 476-97 (with T Liau). The Supreme Court also confirmed that s.213 of the Insolvency Act 1986 (which allows liquidators to seek a contribution from any person who was knowingly party to fraudulent trading by the company) has extra-territorial effect as had been previously assumed. In other words, claims can be brought against any person, wherever they are in the world. The decision by the Supreme Court in relation to the appeal was unanimous and there appears to have been general agreement as to the above proposition, although there were four different judgments produced by the panel of seven Justices, each containing differing analysis and reasoning. For example, the majority considered that the purpose and scope of the defence of illegality should be left for another occasion, whereas Lords Toulson and Hodge (jointly) and Lord Sumption each give detailed and differing analyses of illegality. Lords Toulson and Hodge and Lord Sumption also differed as to the principles to be derived from the decision in Stone & Rolls. For his part, Lord Neuberger (with whom Lords Clarke and Carnwarth agreed), took the view that Stone & Rolls should no longer be treated as being of assistance and is to be confined to its own facts.