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GAZETTE
JULY-AUGUST 1978
something entirely different". One might argue that the
cynical reference to directors making huge profits because
of their own "foolishness" shows that Templeman J.
found it difficult to make the mental transition from fraud
to carelessness in this particular context. One might
therefore surmise that what he wishes to refer to is
carelessness which is in some way deliberate so as to
profit the careless person. However, Templeman J. had
made it quite clear earlier in his judgment, and indeed it is
quite clear from the facts of the case, that the actual
carelessness in this case was innocent carelessness. The
profit was the result of a happy chance which could have
worked out either way. The Judge went on to nail his
colours firmly to the mast, when a few sentences further
on, he said:—
"The principle is . . . that a minority shareholder who
has no other remedy may sue where directors use their
powers intentionally or unintentionally, fraudulently or
negligently in a manner which benefits themselves at the
expense of the company".
Therefore it is not the fact that the company is injured
by the Acts of the majority which gives rise to the action,
or even the degree of injury, but rather the fact that the
directors themselves benefit. This is at best curious, at
worst illogical. It is not very often that a person will
positively benefit from the result of his own carelessness.:
Usually it will be the other way around and Templeman J.
suggests that, in the more usual case, the individual
shareholder will have no action. Perfectly innocent
carelessness on the part of management which does not
result in any profit for management can injure a company
far more than carelessness which by chance results in a
profit for management. Yet in the latter case the
individual shareholder will be able to bring an action in
his own right while in the former case he will not.
Templeman J. apparently felt that it was quite reasonable
for individual minority shareholders to be placed at the
mercy of amiable lunatics who happen to have voting
control if their lunacy does not result in their making a
profit for themselves at the expense of the company!
Gower points (at p585) to dicta in certain cases which
suggest that there may be a fifth exception to
Foss
v.
Harbottie
i.e. "Any other case where the interests of
Justice require that the general rule should be
disregarded." It is suggested that Templeman J. should
have accepted this and treated this case as one instance of
it. If he did not wish to go this far he could at least have
accepted the principle that negligence simpliciter is an
exception to the rule in
Foss
v.
Harbottie.
Mergers, Takeovers and
Monopolies (Control) Act
1978
The above Act became law on the 3rd day of
July, 1978 on the signing by the President of
Ireland of the Bill, which was passed by both
houses of the Oireachtas.
Companies Registration Office.
Dublin Castle,
Dublin 2.
11 August, 1978.
Time in the Incorporation of Companies
Dear Mr. Ivers,
As requested in our recent telephone conversation, I
am writing to you on the subject of the time involved in
the incorporation of new companies.
The precise position now is that the time between
lodgement of documents and incorporation of a company
is 31 weeks. It will be difficult over the next few weeks to
maintain the position as it will be affected by annual leave
requirements: be assured, however, that every effort will
be made to give the best possible service.
You will be aware that this aspect of Companies Office
operations has been seriously affected as a result of the
coming into operation of the Companies (Amendment)
Act 1977, but it may be of assistance to go into some
detail in this regard. Pursuant to this new legislation, the
citation "Companies Act 1963" on the Memorandum
and Articles must be amplified to read "Companies
Acts 1963 to 1977". In addition, where, in
accordance with Section 13 of the 1963 Act, the Articles
adopt (in whole or in part), Part 1 of Table A, Regulation
8 must be added to the usual list of excepted Regulations.
Also, new Regulation 10 of Part II of Table A is
mandatory of inclusion whether or not the remainder of
that Part is adopted. The Act came into operation on 1st
April, 1978, yet, in very few cases are documents in order
for registration when lodged initially — it is perhaps an
extreme instance, but a spot check of documents lodged
on 11th July showed, that of 20 sets of documents
received 19 had to be sent back for amendments of one
kind or another. The double handling and correspondence
arising from this state of affairs has of course a very
retarding effect.
I note your concern in the matter of priority treatment
in certain circumstances. Among the reasons usually
advanced for requesting priority are the requirements of
the banks or the necessity to have urgent contracts in
respect of the company concerned engrossed in the name
of the corporate body. This office has no means of
verifying these details, but every effort is made to meet
such difficulties as far as possible, especially if
employment potential is involved. As mentioned earlier,
we look forward to a substantial improvement in the not-
too-distant future, and it is hoped that the question of
priorities, happily, will then cease to be a problem.
Yours faithfully,
P. Brown.
James J. Ivers, Esq.,
Director General,
The Law Society.
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