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TMI Blog1967 (4) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... aintiff company and the defendants Cradock and Burden with the defendant bank. The action was so brought in purported pursuance of the powers given to the Board of Trade by section 169 (4) of the Companies Act, 1948. The defendant bank, which is one of standing and reputation, claims that, whether or not it has incurred any liability to the plaintiff company, the case, so far as it is concerned, does not fall within the subsection and by this summons seeks to stay all further proceedings against it in the action. The question is one of construction of the subsection, which I will now read. "If from any such report as aforesaid it appears to the Board of Trade that proceedings ought, in the public interest to be brought by any body corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction of that section and its predecessors because they must not be so construed as to cover any misconduct by an officer at the company as such. He relies on a passage in the judgment of Lopes L.J. in In re Kingston Cotton Mill Co. ( No. 2), [1896] 2 Ch. 279 ; 12 TLR 430, CA which was cited in In re B. Johnson Co. (B uilders) Ltd. [1955] Ch. 634; [1955] 3 WLR 269; [1955] 2 All ER 775; [1953] 25 Comp. Cas. 317, C.A. by Lord Evershed M.R. [1955] Ch. 634, 650. as follows: " ' The learned judge in the court below held that misfeasance covered any misconduct by an officer of the company as such for which such officer might have been sued apart from the section. In my judgment this is too wide. It would cover any act of negli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nception of other misconduct ejusdem generis with fraud and misfeasance is, in my judgment sufficiently clear and precise; and I ask myself why should the legislature refer specifically to fraud and misfeasance if it really meant any breach of duty ? If I am right so far, the bank entitled to succeed on his part of the argument because there is really no allegation in the statement of claim of anything wrong on its part other than negligence or breach of duty as a banker. There is no suggestion of anything approaching fraud or misfeasance or other misconduct as I have construed that expression. I was at one time somewhat concerned with the allegation in paragraph 12 of the statement of claim that the defendant bank was party or privy to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion with "may embrace, they are altogether too narrow to include merely acting I as the company's bankers even negligently or honouring cheques drawn/ without authority, which is all that is alleged in this case. There remains the second part of section 169 (4): "or for the recovery of any property of the body corporate which has been misapplied or wrongfully retained." Here Mr. Harman argues that there must be specific property to be recovered and that the section cannot apply to an action to make a bank liable to replace money which it has, so it is said, wrongly debited to the company's account. In many contexts money is property and he concedes that this section would apply to an action to recover specific money, as, for example, a b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, a claim to recover property which has been misapplied. It proceeds on the footing that the payment by Cradock to the company was rightly made, but that the payment by the company to Burden was not, and that the latter payment should, therefore, be disregarded, leaving the otherwise small credit balance on the company's account enlarged by the 44,000. This, however, simply results in the banker/customer relation ship of debtor and creditor. Even if the claim to enforce payment of that debt can be said to be an action to recover property, it is not, in my judgment, recovering property misapplied. J In my judgment, therefore, as things stand, the defendant bank must succeed, but Mr. Warner has argued that inasmuch as the Boards of Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ is issued. In many cases the delay might amount to a denial of justice. In a case of urgency, the intending plaintiffs may use the company's name at their peril, and subject to their being able to show that they have the support of the majority. In an action so constituted, the court may give interlocutory relief, taking care that a meeting be called at the earliest possible date to determine whether the action really has the support of the majority or not.' That passage, where it refers to the calling of a meeting, accords with the well-settled practice of the court in cases in which, in proceedings brought by a company, a dispute arises as to the authority with which the company's name has been used as plaintiff. It is common practi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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