Securities Trust Ltd v Hugh Moore Alexander Ltd

• Jurisdiction: Ireland
• Court: High Court
• Judgment Date: 02 July 1964
• Date: 02 July 1964

Securities Trust Ltd. v. Hugh Moore & Alexander Ltd.

SECURITIES TRUST LIMITED

Plaintiffs

and

HUGH MOORE & ALEXANDER LIMITED

Defendants.

Company - Right of member to copy of memorandum and articles of association - Inaccurate copy supplied - Duty to member to supply accurate copy - No such duty owed to non-member - Negligence - Companies Act, 1908 (8 Edw.7, c. 69), s. 18, sub-s. 1.

In April, 1962, K. A., who was a registered shareholder of the defendant Company, applied for, and obtained from the defendant Company a copy of the Memorandum and Articles of Association of the defendant Company.K. A. held his shares in the defendant Company as trustee for the plaintiff Company. His application for the Memorandum and Articles of Association of the defendant Company was in his own name and the defendant Company was unaware that he held his shares in trust. The copy Articles supplied to him contained an error which suggested that on a winding up of the defendant Company both ordinary and preference shareholders would participate in a distribution of surplus assets. On the faith of this copy of the Articles, the plaintiff Company made several purchases of preference shares in the defendant Company at prices in excess of their true value. Subsequent to these purchases, the said error was discovered by the defendant Company and the defendant Company notified K. A. that the error existed in the copy Articles supplied to him. On the winding up of the defendant Company, the plaintiff Company claimed to be entitled to participate in the distribution of surplus assets in respect of their holding of preference shares. The liquidator refused to allow their claim, and the plaintiff Company commenced proceedings against the defendant Company for damages for negligent misrepresentation.

Held by Davitt P. 1, that the Memorandum and Articles of Association of the defendant Company were supplied to K. A. in his personal capacity as a member of the defendant Company and not as agent for the plaintiff Company;

2, That the defendant Company owed a duty to K. A. to ensure that the copy supplied was accurate;

3, That this duty was owed only to K. A. as a member of the defendant Company and was not owed to the community at large, including the plaintiff Company.

Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C. 465 approved.

Witness Action.

The plaintiff Company, Securities Trust Ltd., brought proceedings in the High Court, claiming damages for negligent misrepresentation in that they were, as alleged, induced to buy preference shares in the defendant Company, Hugh Moore & Alexander Ltd., as the result of an inaccuracy which appeared in a copy of the Articles of Association of the defendant Company supplied by the defendant Company to Kevin Anderson, the chairman and managing director of the plaintiff Company and a registered shareholder of the defendant company. The defendant Company contended that the Memorandum and Articles of Association of the defendant Company supplied to Kevin Anderson were supplied to him in his personal capacity as a member of the defendant Company and not as all agent for the plaintiff Company, that no duty was owed by them to the plaintiff Company to supply an accurate copy, and that they were not negligent.

Cur. adv. vult.

Davitt P. :—

The facts of this case, briefly summarised, appear to be as follows: Mr. Kevin...