Please use this identifier to cite or link to this item:
|Title: ||The Deep Veins of the Sons of Gwalia Litigation|
|Authors: ||Di Lernia, Cary|
|Issue Date: ||Dec-2009|
|Publisher: ||Business and Labour History Group, The University of Sydney|
|Citation: ||History in Australian and New Zealand Business Schools: The Proceedings of the First AAHANZBS Conference, The University of Sydney, 14-15 December 2009 / edited by Greg Patmore|
|Abstract: ||This paper engages in a doctrinal analysis of historical precedent on aggrieved shareholder claims in the UK. It does so in order to expose the basis for the judgment of the House of Lords in the foundational case of Houldsworth v City of Glasgow Bank (1880) 5 App Cas 317, which held in cases involving fraudulent or misleading behaviour inducing share purchase that it would be inconsistent with a shareholder’s membership contract to ‘claim back’ amounts originally committed to the company for the pursuit of its business objects and the payment of its liabilities. This analysis will demonstrate that the judgments in Houldsworth (which have prevented shareholders ranking on par with unsecured creditors up until the determination of the High Court in Sons of Gwalia Ltd (admin apptd) v Margaretic (2007) HCA 1) ignored relevant legislation in the form of s 38(7) of the Companies Act 1862 UK which was specifically applicable to cases involving aggrieved shareholder claims, instead relying on principles drawn from the law of partnerships to decide the case. While it is submitted that the High Court was justified in choosing not to apply Houldsworth, the rule may still prove good law in certain circumstances. Having been the subject of a recent Corporations and Markets Advisory Committee review the issue of aggrieved shareholder claims is current as ever, though the veins of the problem run rather deep in the history of Australian and UK corporations law. This paper seeks to illustrate the value of a deeper understanding of the history of such claims to making informed policy decisions going forward. The paper argues that the rule in Houldsworth’s case should be abrogated by legislation in order to provide certainty in this technical area of the law.|
|Description: ||Peer reviewed|
|Rights and Permissions: ||The author retains copyright of this work.|
|Type of Work: ||Conference paper|
|Appears in Collections:||History in Australian and New Zealand Business Schools: The Proceedings of the First AAHANZBS Conference.|
This work is protected by Copyright. All rights reserved. Access to this work is provided for the purposes of personal research and study. Except where permitted under the Copyright Act 1968, this work must not be copied or communicated to others without the express permission of the copyright owner. Use the persistent URI in this record to enable others to access this work.
|DiLernia.pdf||216.04 kB||Adobe PDF|
Items in Sydney eScholarship Repository are protected by copyright, with all rights reserved, unless otherwise indicated.