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Description
Flashcards by Fauziah Hanim, updated more than 1 year ago
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Created by Fauziah Hanim
over 9 years ago
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| Question | Answer |
| Salomon’s case | Definition persons who are forming a company to run a business, promoter sells his own business to the new company, or make arrangements to float a company already in existence, and offer the shares of that company to others. |
| Twycross v Grant | Cockburn CJ defines a promoter as a person who undertakes to form a company with reference to a given project and to set it going, and who takes the necessary steps to accomplish that purpose |
| Tracey v Mandalay Pty Ltd | the court considered the term ‘promoter’ involves the idea of exertion for the purpose of getting up and starting a company and also the idea of some duty towards the company imposed by or arising from the position which the so-called promoter assumes towards it. |
| In Erlanger v New Sombrero Phosphate Co. | The appellant, Erlanger, and some friends formed a syndicate to acquire a lease of an island for the mining phosphates. A co. was formed by the members of the syndicate to purchase the lease. The board of directors of the co. which was nominated by the head of the syndicate ratified the contract. The co. then offered its shares to the public. The phosphate business failed, and so the board of directors was removed by the members. A new board was appointed and they took action to rescind the contract to purchase the lease. The House of Lords decided that the disclosure made by the promoters was not to an in dependent board of directors and so the contract could be rescinded. |
| Gluckstein v Barnes | Gluckstein and some friends formed a syndicate and purchased the Olympia Exhibition Hall that has been charged under a mortgage and debentures bonds. The mortgage and bonds were acquired by the syndicate at a discount. The syndicate formed a co. and sold the Hall to the co. at a profit. This was disclosed in the co.’s prospectus. The mortgage and debenture bonds were repaid at face value, giving the promoters profit which they did not disclose to the co. The co. later went into liquidation, and the liquidator tried to recover from Gluckstein the profits he had received that had not been disclosed. The House of Lords held that the partial disclosure of the profits he had gained was not sufficient. It did not amount to a disclosure, and therefore the profits made by Gluckstein were recoverable by the liquidator. #duty to make full disclosure #A partial disclosure is not sufficient. |
| Whaley Bridge Calico Printing Co. v Green and Smith | The duty to disclose imposed on a promoter includes a disclosure of all commissions or payments he receives upon any transfer of property The court held that the failure of the promoter to disclose the promise of payment of commission, makes him liable for the money had it been paid over to him. Although he had not received the commission promised, the company could recover the unpaid balance of the secret commission. |
| Habib Abdul Rahman v Abdul Cader | The company that was promoted by Abdul Cader and another person bought a piece of land from another company. This land was divided and offered for sale to the public. Abdul Cader set up a partnership with three others and bought one lot. He did not disclose that he had an interest in the purchase. The other shareholders sought to have the sale rescinded on the grounds of his failure to disclose his interest. The court held that the fact that the promoter did not disclose his interest when he bought the land from the company he had promoted was grounds to allow rescission of the contract. #duties of promoters |
| Lagunas Nitrate Co. v Lagunas Syndicate | Where the parties involved cannot be restored to their original position. This is in cases where the subject matter of the contract had altered to an extent that is not possible to have it in the same condition as when the contract was entered into #Remedies for breach of promoter’s duties #cannot rescind |
| Re Leeds & Hanley Theatres of Varieties Ltd. | Where third parties have acquired rights that cannot be defeated. This is when innocent third parties have acquired interest in the property #Remedies for breach of promoter’s duties #cannot rescind |
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