Untitled

Commonwealth Caribbean Company
Law
In the last twenty-five years, company law in the Commonwealth Caribbean

has undergone dramatic changes, from a model influenced by English law to a
new, harmonised collection of regional legislation based on the Caricom and
CLI Model Acts, varying substantially across Caricom member states.
The variation within Caribbean company law presents an enormous challenge,

both in terms of the breadth of the subject and in addressing the difference in
provisions of one state’s Company Law Act as opposed to that of another.
Using the Caricom Model Act and CLI Model Act as a basis for its structure,
Commonwealth Caribbean Company Law examines and compares regional
implementation of company law in an accessible and comprehensive manner
that will be invaluable to students and practitioners in the region.
Andrew Burgess is a Professor of Corporate and Commercial Law and is

currently serving as a Justice of Appeal on the Barbados Court of Appeal. He
is a former Dean of the Faculty of Law of the University of the West Indies
and a former Judge and President of the Inter-American Development Bank
Administrative Tribunal in Washington, DC.
COMMONWEALTH CARIBBEAN LAW SERIES
The Commonwealth Caribbean Law Series is the only series of law books that
covers the jurisdiction of the English speaking Caribbean nations. The titles in
the series were first published in 1995 to acclaim from academics, practitioners
and the judiciary in the region. Several editions followed, and they have now
become essential reading for those learning and practising Caribbean law.
This must have series is required holdings for any law library specialising in
Caribbean legal information.
Titles in this series include:
Alternative Dispute Resolution

Albert Fiadjoe
Commonwealth Caribbean Administrative Law

Eddy Ventose
Commonwealth Caribbean Business Law 2/e

Rajendra Ramlogan and Natalie Persadie
Commonwealth Caribbean Civil Procedure 2/e

Gilbert Kodilinye and Vanessa Kodilinye
Commonwealth Caribbean Constitutional Law

Sir Fred Phillips
Commonwealth Caribbean Criminal Practice and Procedure 3/e

Dana S. Seetahal
Commonwealth Caribbean Land Law 1/e

Sampson Owusu
Commonwealth Caribbean Law and Legal Systems 2/e
Rose-Marie Belle Antoine
Commonwealth Caribbean Property Law 3/e

Gilbert Kodilinye
Commonwealth Caribbean Public Law 3/e

Albert Fiadjoe
Commonwealth Caribbean Tort Law 4/e

Gilbert Kodilinye
Commonwealth Caribbean Law of Trusts 3/e

Gilbert Kodilinye and Trevor Carmichael
Judicial Review in the Commonwealth Caribbean

Rajendra Ramlogan
Forthcoming titles:
Commonwealth Caribbean Contract Law

Gilbert Kodilinye and Maria Kodilinye
Commonwealth Caribbean Employment and Labour Law

Natalie Corthésy and Carla-Anne Harris-Roper
Commonwealth Caribbean
Company Law
Andrew Burgess
First published 2013
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Simultaneously published in the USA and Canada

by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2013 Andrew Burgess
The right of Andrew Burgess to be identified as author of this work has been asserted by him in accordance
with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any
electronic, mechanical, or other means, now known or hereafter invented, including photocopying and
recording, or in any information storage or retrieval system, without permission in writing from the
publishers.
Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only
for identification and explanation without intent to infringe.
British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data

A catalog record for this book has been requested
ISBN 978-0-415-66006-8 (hbk)

ISBN 978-0-415-66007-5 (pbk)
Typeset in Baskerville by RefineCatch Ltd, Bungay, Suffolk

This book is dedicated to Sandra, and also to Ayo and Leah, Akil and Ashley,
and Kwame and Karey
And
To all students of Commonwealth Caribbean Company Law.

Contents
Preface
Table of Cases
Table of Statutes
1 MODERN COMMONW EALT H CARIBBEAN COMPANY LAW IN

PERSPECT IVE
INTRODUCTION
ENGLISH ORIGINS OF COMMONWEALTH CARIBBEAN COMPANY
LAW
Legislative roots
Summary of English Company Legislation in the Commonwealth
Caribbean
ENGLISH CASE LAW DEVELOPMENTS AND COMMONWEALTH
CARIBBEAN COMPANY LAW
An overview
NEW COMPANIES LEGISLATION IN THE COMMONWEALTH
CARIBBEAN
Caricom Draft Model Act and the Barbados Act
Purposes of the new Companies Acts
Major changes introduced by new Companies Acts
Canadian cases in Commonwealth Caribbean company law
Methodological problems and solutions
CONCLUSION
2 CLASSIFICAT ION OF COMPANIES
INTRODUCTION
MEANING OF ‘COMPANY’
PRIVATE AND PUBLIC COMPANIES
PUBLIC COMPANIES AND COMPANIES WHICH ARE NOT PUBLIC
COMPANIES
Non-profit companies
Incorporation
Directors
Membership
Bye-laws
Dissolution and distribution of property
COMPANIES LIMITED BY GUARANTEE
Meaning of company limited by guarantee
Uses of company limited by guarantee
Incorporation of companies limited by guarantee
COMPANIES INCORPORATED OUTSIDE THE TERRITORY
CONCERNED
Overview of the provisions in the Acts
EXTERNAL COMPANIES
Carrying on of undertaking by external company
Obligation to register
Requirements for registration
Restrictions on activities
Obligation to name attorney
Certificate of registration
Effect of registration
Suspension of registration
Cancellation of registration
Revival of registration
Name display
Fundamental changes
Returns
Incapacity of external company
Resumption of action
OUTSIDE COMPANIES
Obligation to deliver documents to Registrar
Power of Registrar to direct name change of outside company
Power of outside company to hold land
Duty of outside company to deliver to Registrar alteration of documents
Duty in respect of outside company’s accounts
Obligation to state name of its country of incorporation
Service on outside company
Removing outside company’s name from the register
FORMER-ACT COMPANIES
CONSTRAINED SHARE COMPANIES
CONCLUSION
3 COMPANY FORMAT ION
INTRODUCTION
NATURE OF THE RIGHT TO INCORPORATE
Voluntary and involuntary incorporation
Registrar’s duty to register
Certificate of incorporation
Right to incorporate in a foreign language
EXERCISING THE RIGHT TO INCORPORATE
Who may exercise the right to incorporate
Formalities for incorporation
Articles of incorporation Acts
Articles of incorporation
Memorandum of Association Acts
CORPORATE NAME
Overview
Request for name search and reservation application
Principles applicable to the granting of a name
THE BYE-LAWS
LEGAL STATUS OF ARTICLES OF INCORPORATION
Articles of Incorporation Acts other than the Jamaican Act
Under the Jamaican Act
ARTICLES OF CONTINUANCE
CONCLUSION
4 PROMOT ION AND PRE-INCORPORAT ION T RANSACT IONS
INTRODUCTION
COMPANY PROMOTERS
Meaning of promoter
Need to regulate company promoters
Duties of promoters
Remedies for breach of promoter’s fiduciary duties
PRE-INCORPORATION CONTRACTS
Basic statutory provisions
The common law and statutory intervention
The scope of section 16
Section 16(1) and personal liability and rights
Section 16(2): adoption by the company
Section 16(4) and apportionment of liability by the court
Exemption from personal liability
CONCLUSION
5 CORPORAT E PERSONALIT Y
INTRODUCTION
SEPARATE LEGAL PERSONALITY
The Salomon principle
Separate legal personality and constitutional fundamental rights
Separate legal personality and the ‘one-man company’
Corporate personality and corporate groups
Separate legal personality and limited liability
‘PIERCING OR LIFTING THE CORPORATE VEIL’
Concepts and definitions
Under case law
Corporate structure a device to evade limitations imposed on conduct by
law
Under legislation
SEPARATE LEGAL PERSONALITY AND CORPORATE CIVIL AND
CRIMINAL LIABILITY
Rules of attribution
Attribution of corporate civil liability
Attribution of corporate criminal liability
CONCLUSION
6 CORPORAT E CAPACIT Y AND CORPORAT E AGENCY
INTRODUCTION
CORPORATE CAPACITY
The basic statutory provisions
Rules on corporate capacity
THE EXERCISE OF CORPORATE POWER
Corporate agency
The Companies Acts and the constructive notice doctrine
The Companies Acts and the rule in Turquand’s Case
CONCLUSION
7 RAISING SHARE CAPITAL
INTRODUCTION
SHARE CAPITAL
Legal concept of capital
Nominal or authorised capital
Authorised minimum share capital
SHARE ISSUE
Meaning of share issue
Nominal or par value and no par value
Issue at discount
Issue at premium
Bearer shares or share warrants and bearer certificates
Pre-emptive rights issue
Conversion privileges, options and rights issue
PAYMENT FOR SHARES
The basic rule
Payment in money
Payment in property or past services
STATED CAPITAL ACCOUNT
Meaning of stated capital account
Rules governing operation of stated capital account
CONCLUSION
8 CAPITAL MAINT ENANCE

INTRODUCTION
THE CAPITAL MAINTENANCE DOCTRINE
Common law doctrine
STATUTORY RULES ON OWN-SHARE OWNERSHIP
The general statutory prohibition
The statutory exceptions to the general prohibition
Statutory rules on own-share purchase
Statutory rules on share redemption
Donated shares
FINANCIAL ASSISTANCE IN OWN-SHARE ACQUISITION
Rationale for statutory provisions
Overview of the statutory provisions
Acts other than Guyanese Act
Cases where company permitted to give financial assistance
Under the Guyanese Act
DIVIDENDS
Authority to declare dividends
Payment of dividends
Form of dividend
STATED CAPITAL REDUCTION
Rationale of the stated capital reduction rules
Permitted reduction of stated capital
Procedure for reduction
Protection of creditors in stated capital reduction
Directors’ liability for improper capital reduction
STATED CAPITAL ADJUSTMENT
PAYMENT OF COMMISSIONS OUT OF STATED CAPITAL ACCOUNT
CONCLUSION
9 SHARES, CLASSES OF SHARES AND CLASS RIGHTS
INTRODUCTION
LEGAL NATURE OF SHARES
Statutory provisions
Legal nature of shares
CLASSES OF SHARES
Concept of classes of shares
Power to issue classes of shares
Issue of shares in series
Rights attaching to different classes of shares
Ordinary shares
Preference shares
Redeemable shares
CLASS RIGHTS
Construction of class rights articles
Equality of rights
Rights set out in articles are exhaustive
Cumulative dividends
ALTERATION OF CLASS RIGHTS
Power to alter class rights
Protection of class rights from prejudicial alteration
CONCLUSION
10 DIRECTORS AND OT HER OFFICERS
INTRODUCTION
WHO ARE COMPANY DIRECTORS?
De jure and de facto directors
Shadow directors
Alternate directors
DIRECTORS’ MANDATE TO MANAGE
Legal basis of management mandate
Nature of management mandate
The management mandate and the unanimous shareholder agreements
Management mandate and the articles of incorporation
Directors’ role in relation to bye-laws
Delegation of directors’ powers
NUMBER OF DIRECTORS
Setting the number
Alteration of number
DISQUALIFICATION OF DIRECTORS
Minors and persons of unsound mind
Bankrupt persons
Court disqualified directors
Person persistently in default of the Companies Act
Company as corporate director
SHARE QUALIFICATION OF DIRECTORS
APPOINTMENT AND ELECTION OF DIRECTORS
Appointment of first directors
Consent to appointment
Election of subsequent directors
Filling directors’ vacancies
Defective appointment or election of directors
Tenure of directors
REMUNERATION OF DIRECTORS
REMOVAL OF DIRECTORS
Shareholders’ power of removal
Limitations on shareholders’ power of removal
Filling vacancy on removal of a director
Director’s right to state case to shareholders
Removal of director under the Jamaican Act
DIRECTORS’ MEETINGS
Organisational meeting
Regular directors’ meetings
Alternative to directors’ meetings
Other officers
The secretary of the company
CONCLUSION
11 DIRECTORS’ STAT UTORY FIDUCIARY DUT Y
INTRODUCTION
THEORETICAL UNDERPINNINGS OF THE STATUTORY FIDUCIARY
DUTY
TO WHOM AND BY WHOM IS THE STATUTORY DUTY OWED?
To whom is the duty owed?
Who owes the duty?
NATURE OF THE DUTY TO ACT ‘HONESTLY AND IN GOOD FAITH
WITH A VIEW TO THE BEST INTERESTS OF THE COMPANY’
What is acting honestly and in good faith?
Determining the best interests of the company
THE STATUTORY FIDUCIARY DUTY AND THE PROPER PURPOSE
TEST
The basic statutory provision and the proper purpose test
Does the statutory provision exclude the proper purpose test?
THE STATUTORY FIDUCIARY DUTY AND THE DUTY NOT TO
FETTER DISCRETION
The basic statutory provision and the no-fetter rule
The case authority
Interpretation of the basic statutory provision
CONCLUSION
12 DIRECTORS’ DUT Y OF LOYALT Y
INTRODUCTION
STATUTORY DUTY TO DISCLOSE INTERESTS IN CONTRACTS WITH
COMPANY
Basic statutory provision
Common law background to statutory provisions
Analysis of the statutory provision
COMMON LAW NO-PROFIT DUTIES
Applicability of common law no-profit rules
No-profit rule stated
Misuse of corporate opportunities or information
DUTY TO AVOID COMPETITION
CONCLUSION
13 DIRECTORS’ STAT UTORY NON-FIDUCIARY DUT IES
INTRODUCTION
DUTY OF CARE, DILIGENCE AND SKILL
Content of the statutory duty
‘Care’ and ‘skill’ in conducting company’s affairs
Standard of care, diligence and skill
Statutory defences to breach of care and skill duty
DUTY TO COMPLY WITH THE ACT, ARTICLES AND UNANIMOUS
SHAREHOLDER AGREEMENT
CONCLUSION
14 DIRECTORS’ LIABILIT IES
INTRODUCTION
SPECIFIC STATUTORY LIABILITIES
Liability for shares issue
Liability for certain other dealings with share capital
Liability to contribute to judgment
Limitation on actions to enforce liability
STATUTORY DEFENCES TO LIABILITY
Defence based on lack of consent
The good faith reliance defence
WAIVER OF BREACHES OF DUTY
INDEMNITIES
Policy goals of indemnity provisions
Discretionary indemnity
As of right indemnity
INSURANCE
CONCLUSION
15 SHAREHOLDERS’ DECISION-MAKING RIGHTS
INTRODUCTION
MEETINGS AND CORPORATE DECISION-MAKING
The theory
Different types of meetings
Place of meetings
Calling meetings
PROPOSALS AND MEMBERS’ RESOLUTIONS AND CIRCULARS
Background to the statutory provisions
Proposals
Members’ resolutions and circulars
Shareholders’ list
Quorum
Voting the shares
PROXIES
Background to the proxy provisions
The proxy voting machinery
The proxy solicitation machinery
SHARE REGISTRANTS
RESOLUTIONS IN LIEU OF MEETINGS
SHAREHOLDERS’ AGREEMENTS
Pooling agreements and voting trusts
Pooling agreements
Unanimous shareholder agreements
CONCLUSION
16 SHAREHOLDERS AND T HE COMPLAINANT REMEDIES
INTRODUCTION
THE CONCEPT OF COMPLAINANT
Shareholders and debenture-holders
Directors and officers
The Registrar
‘Proper person’
DERIVATIVE ACTION
Background to statutory provisions
Statutory derivative action
THE OPPRESSION REMEDY
Basic oppression remedy provisions
Background to the oppression remedy provisions
Analysis of the oppression remedy provisions
Court orders
Shareholder ratification and derivative and oppression actions
Settlement of derivative and oppression actions
Interim costs in derivative and oppression actions
CONCLUSION
17 OT HER SHAREHOLDERS’ REMEDIES
INTRODUCTION
INVESTIGATIONS
Types of investigations
Nature and function of investigations
Court-ordered investigations
Registrar’s investigations
Minister’s investigations
Registrar’s inquiries into proxies and insider trading
Compliance and restraining orders
Rectification orders
CONCLUSION
18 DISSENT ING SHAREHOLDER’S APPRAISAL REMEDY
INTRODUCTION
NATURE OF THE APPRAISAL REMEDY
Overview of the dissent right provisions
Unconditional right to dissent
Conditional right to dissent
Right to dissent non-exclusive
Interpreting the dissent provisions
THEORIES OF THE ROLE OF THE APPRAISAL REMEDY
Legislative balance of minority and majority rights theory
Solution to asset substitution problem theory
Solution to the agency problem theory
DETERMINING FAIR VALUE
Overview
Time of valuation
Value arising from the fundamental change
Approaches to determining fair value
Fair value and premiums
DISSENT PROCEDURE
Who may exercise the right
Initiating the dissent process
Notice to dissenter of adoption of the resolution
Dissenter’s notice of demand for payment
Dissenter’s share certificates
Legal effect of notice of demand for payment
Written offer to pay
Notification of inability lawfully to pay
Payment for shares
FIXING FAIR VALUE BY THE COURT
Application to the court
Directions by the court
Appointment of appraiser
Final order of the court
Power to allow a reasonable rate of interest
FIXING FAIR VALUE UNDER THE BAHAMAS ACT
CONCLUSION
19 PROSPECT USES
INTRODUCTION
PROSPECTUS PROVISIONS
Aims and objectives of the prospectus provisions
What is a prospectus?
Contents of a prospectus
When is a prospectus required?
NOTICES PROVISIONS
General prohibition against notices
Exceptions to the prohibition
Application of the notices rules
Certificate of non-contravention of notices rules
REGISTRATION OF PROSPECTUS
Requirement for registration
Conditions to be satisfied for registration
Refusal of registration by Registrar
PROSPECTUS PRESUMED
CONTRACTS TO SUBSCRIBE FOR OR PURCHASE SHARES OR
DEBENTURES IN A PROSPECTUS
Making the contract
Subscription lists
Minimum subscription
STATEMENTS IN LIEU OF PROSPECTUS
CONCLUSION
20 LIABILIT IES FOR MISLEADING PROSPECT USES
INTRODUCTION
DAMAGES AT COMMON LAW
Contractual claims
Tort claims
DAMAGES UNDER THE MISREPRESENTATION ACTS
RESCISSION IN EQUITY
Overview of the rescission remedy
What must be proved
Summary of applicable rules
Rescission against the company
Loss of the right to rescind
REMEDIES UNDER THE COMPANIES ACTS
Claim for loss or damage
Defences to claim for loss or damage
Indemnification of persons named without their consent
STATUTORY RESCISSION AND REPAYMENT
Nature and scope of the remedy
Who may claim the remedy
When may the remedy be claimed
Effect of rescission and repayment judgment
Effect of liquidation or insolvency of company on remedy
Defences to rescission and repayment action
Underwriting contracts and rescission and repayment
CONCLUSION
21 COMPANY CHARGES
INTRODUCTION
LEGAL NATURE OF A COMPANY CHARGE
Charges and security interests
A charge distinguished from personal rights
A charge distinguished from other forms of consensual real security
A charge and retention of title agreements
DETERMINING WHETHER A CHARGE EXISTS
TYPES OF COMPANY CHARGE
Overview
Fixed charges
Floating charges
Unsettled aspects of the floating charge
Nature of the interest created by floating charge
Theoretical basis of power to carry on business
Crystallisation
REGISTRATION OF CHARGES
General comment
Registration of charge on acquisition
Registration with the Registrar of Titles
Charges requiring registration
Effect of non-registration
Effect of insufficient stamp duty
Endorsement on debenture
Memorandum of satisfaction and payment
Rectification of omission or misstatement
Company’s duty to retain copy of charge instrument
Registration of charges created by external companies
REGISTRATION OF CHARGES IN ANGUILLA
CONCLUSION
22 DEBENT URES AND T RUST DEEDS
INTRODUCTION
DEBENTURES
Debentures defined
Power to issue debentures
LEGAL REQUIREMENTS OF DEBENTURES
Overview
Unsecured debenture
Debenture covered by trust deed
Debenture without a covering trust deed
Consequences of non-inclusion of statements
TRUST DEEDS
Meaning and advantages of covering trust deeds
Legal recourse for non-execution of covering trust deed
Formalities of a covering trust deed
Trustees of trust deeds
Duties of trustees
Rights of trustees
Rights of debenture-holders
CONCLUSION
23 RECEIVERS AND RECEIVER-MANAGERS
INTRODUCTION
APPLICABILITY OF THE COMPANIES ACTS AND THE BIAs
CONCEPTS AND DEFINITIONS
Meaning of receivers and receiver-managers
Meaning of receiver
Meaning of receiver-manager
APPOINTMENT OF RECEIVERS AND RECEIVER-MANAGERS
Who may be appointed a receiver or receiver-manager?
Who may appoint a receiver or receiver-manager?
Time at which right to appoint arises
Procedure to be followed in appointing
Registration of the receiver
Validity of appointment
Judicial guidance on validity of appointment
REMOVAL, REPLACEMENT AND RESIGNATION OF RECEIVERS AND
RECEIVER-MANAGERS
Removal and replacement
Resignation
EFFECT OF APPOINTMENT OF RECEIVERS AND RECEIVER-
MANAGERS
Effect upon company’s personality
Effect upon company’s management
POWERS OF RECEIVER AND RECEIVER-MANAGER
Power to take possession of assets subject to security interest
Power of sale
Power to carry on the business of the company
Powers conferred by the instrument of appointment
DUTIES OF RECEIVERS AND RECEIVER-MANAGERS
Overview
Duty to act honestly and in good faith
Duty to deal with company property in a commercially reasonable
manner
Duty to give notice of appointment
Duty to take company’s property in custody
Accounting duties
Duty to take action in relation to statement of affairs
Duty in respect of preferential debts
Recoupment of payments to preferential creditors
Duty to cease acting
LIABILITY OF RECEIVER AND RECEIVER-MANAGERS
Contractual liability
Liability in respect of invalid appointment
CONCLUSION
24 INSIDER T RADING
INTRODUCTION
INSIDER TRADING AT COMMON LAW
An overview
Directors’ fiduciary duties
Breach of confidence
Misrepresentation
STATUTORY CIVIL ACTION FOR INSIDER TRADING
Overview
Who may bring an action
What must be proved
Measure of damages
Onus of proof
Liability to compensate claimant
Liability to account to the company
Time limit on action
PROHIBITIONS AGAINST AN INSIDER SELLING SHORT, SELLING
CALLS OR BUYING PUTS
Prohibition against selling short
Prohibition against selling a call or buying a put
Liability for contravention of prohibitions against selling short, selling a
call or buying a put
CONCLUSION
25 FUNDAMENTAL COMPANY CHANGES
INTRODUCTION
FUNDAMENTAL CHANGES TO ARTICLES
An overview
List of fundamental amendments allowed
Procedure for amendments to articles
Amendments and class votes
Registration of amendments
Re-stated articles
ALTERATION OF ARTICLES (BAHAMAS, BELIZE, JAMAICA, ST
CHRISTOPHER/NEVIS)
Nature of the power of alteration
Judicial review of the statutory power of alteration
The Allen v Gold Reefs of West Africa Ltd test
AMALGAMATIONS
An overview
Definitions and concepts
Legal consequences of an amalgamation
Procedure for effecting amalgamations
Amalgamations by agreement
Vertical short-form amalgamation
Horizontal short-form amalgamation
Registration of the amalgamation
Certificate of amalgamation
MERGERS AND CONSOLIDATIONS (BAHAMAS)
Conditions for mergers or consolidations
Procedure for merger or consolidation
Merger with subsidiary
Legal effect of mergers and consolidations
REORGANISATIONS
Powers of the court in making reorganisation order
Implementation of reorganisation order
No dissent rights
ARRANGEMENTS
Application to court for approval of arrangement
Powers of the court in respect of applications
Filing of articles of arrangement
CONCLUSION
26 FINANCIAL DISCLOSURE AND AUDIT REQUIREMENTS
INTRODUCTION
DISCLOSURE REQUIREMENTS
Maintaining financial records
Annual accounts
Auditors’ report
Further financial information
Exemption from disclosure of financial statements
Directors’ approval of financial statements
ACCESS TO FINANCIAL STATEMENTS
Shareholder access
Public access
AUDIT REQUIREMENTS
Audit committees
Auditors
Rights and powers of auditors
Auditor’s duty in the conduct of the audit
Liability for negligent audit
Exemption from liability for defamation
CONCLUSION
27 T RANSFERS OF SHARES AND DEBENT URES
INTRODUCTION
RIGHT TO TRANSFER SHARES AND DEBENTURES
Transfer of shares
Transfer of debentures
Transfer of shares or debentures by person entitled by operation of law
Effect of provisions in articles or bye-laws on statutory transfer rules
RESTRICTIONS ON THE RIGHT TO TRANSFER
Basic rules relating to restrictions on the transfer of shares
General approach to restriction provisions
Approach to restrictions in pre-emption provisions
Approach to restrictions conferring discretion on directors
MANNER OF TRANSFERRING SHARES AND DEBENTURES
Sale and purchase
Share certificates and debentures
GIFT TRANSACTIONS
LIENS ON SHARES
CONCLUSION
28 CORPORAT E REGIST ERS AND RECORDS
INTRODUCTION
REGISTERED OFFICE OF COMPANY
COMPANY REGISTERS AND RECORDS
Company registers
Company records
ACCESS TO REGISTERS AND RECORDS
Access by directors and shareholders
Access by creditors
Access by the public
Access to shareholders’ lists
Access to options list
CONCLUSION
29 TAKEOVER BIDS
INTRODUCTION
TAKEOVER BIDS UNDER THE COMPANIES ACTS
Companies Acts provisions
COMPANIES REGULATIONS ON TAKEOVER BIDS
Overview
The mandatory offers rules
The takeover bid circular rules
Information in takeover bid circulars generally
The rules on permissible conditions on a formal offer
The Directors’ Circular Rules
The rule against unequal consideration
The rule against lock-up of shares
The rule that offeror must take up and pay for shares
The rule that offeror must appoint member of the Exchange as manager
The special rules in respect of listed companies
TAKEOVER BID DEFENCES
The poison pill defence
Validity of takeover bid defences
CONCLUSION
Index
Preface
The most recent company legislation in the Bahamas, Barbados, Guyana,

Jamaica, the Organisation of Eastern Caribbean States and Trinidad and
Tobago presents a particular challenge. It is this. The company law regime in
these territories has developed over the last 200 years or so based on English
company legislation, case law and jurisprudence. The recent regional
legislation, however, has as its foundation Canadian legislative provisions,
which are new and distinct both in character and purpose in the context of the
regional company law regime. Inevitably, therefore, a challenge arises in
relating these recent provisions to the existing body of law governing
companies in the region.
This book has been written with a view to meeting this challenge. It seeks
to provide a logically ordered guide to the substantive law found in the most
recent Companies Acts in the Commonwealth Caribbean. The ultimate aim is
to enable legal practitioners to identify and solve particular problems which
confront them while at the same time affording students a thematic
knowledge of an admittedly complex subject matter. The discussions of the
new provisions together with the comparative references to the provisions in
the various Acts and the Tables of Statutes and Cases should make it a useful
reference for the practising lawyer. For the law student, it is intended to be
used as a supplement to the course materials in the basic company law and
related courses in undergraduate programmes and as a starting point for
further research in postgraduate corporate law courses.
While writing this book, I have received the generous advice, support and
assistance of numerous people. Of these, I wish first to express my gratitude to
the various generations of my company law students who through the years
subjected my tutorials to the most searching analyses and argumentation.
Those tutorials have contributed in no small way to this book. But, I wish to
thank in particular two of these students, Deandra Butler and Kristen Edwards,
and my dear daughter-in-law Ashley Willoughby for providing invaluable
research assistance. Donna Young laboured painstakingly over the Table of
Cases and I greatly appreciate her effort.
My colleagues in the Faculty of Law have inspired and helped me in
numerous ways. The Faculty of Law Consultancy Fund provided invaluable
research funding. John Jeremie read and criticised portions of the manuscript.
Lesley Walcott and Suzanne Ffolkes-Goldson have been always willing to
discuss points with me. Tracy Robinson and David Berry were constant
sources of inspiration. The staff of the Law Library, in particular Larry Craig
and Erene Knight, rendered inestimable assistance.
My true friend and brother on the Barbados Court of Appeal, Justice
Sherman Moore, CHB, a veritable legal savant, was a constant source of
inspiration. Sir Henry Forde QC and former Chief Justice of Barbados, Sir
David Simmons, by their commitment to excellence in legal scholarship, have
always perennially reminded me of the importance and deeper possibilities of
rigorous legal analysis.
I have been blessed with a wonderful group of people who contributed
indirectly to the completion of this book. The members of Paragon Tennis
Club are among these. My dear wife, Sandra, offered suggestions and was a
constant source of encouragement and strength and I thank her for that. My
sons, Ayo and Akil, and my daughters-in-law, Ashley and Leah, provided
ineffable support: I greatly appreciate that.
Special thanks are due to Emma Nugent and Jackie Day of Routledge and
Mel Dyer of RefineCatch Ltd whose patience and confidence made it possible.
I would also like to thank the publishers for providing the Index and Table of
Statutes.
The manuscript was submitted at the end of June 2012 and subject to a few
minor amendments at proof stage, the law is as stated at that date.
Table of Cases
A Company, Re [1990] 2 BCLC 500 Eng CA 95

A Company, Re (No 008699 of 1985) [1986] BCLC 382 233
Aberdeen Rly Co v Blaikie Bros (1854) 1 Macq 461 HL Sc 250
Abraham v Prosoccer Ltd (1980) 31 OR (2d) 475 Ont HC 329
Abraham and Inter Wide Investments Ltd, Re (1985) 51 OR (2d)
337
460 Ont HC
86, 88, 90, 93,
Adams v Cape Industries plc [1990] Ch 433 Eng CA 94, 95, 96, 98,
100
Adecco Canada Inc v J Ward Broome Ltd (2001) 12 BLR (3d)
340
275 Ont SCJ [Commercial List]
AE Realisations (1985) Ltd v Time Air Inc [1995] 17 BLR (2d)
322
203 Sask QB, affd [1995] 6 WWR 423 Sask CA
AG v Antigua Times Ltd [1976] AC 16, PC 88
AG v Great Eastern Railway (1880) 5 APP Cas 473 Eng HL 113
AG v Mersey Railway [1907] AC 415 Eng HL 114
AG’s Reference (No 2 of 1999) [2000] 2 BCLC 257 Eng CA 107
A-G v Weymouth (1743) Ambl. 20 453
Agnew v IRC, Re Brumark Investments Ltd [2001] 2 AC 710 PC 414, 415
Agricultural Mortgage Corp v IRC [1978] Ch 72 Eng CA 136
Agrium Inc v Hamilton (2005) AQQB 54 Alta QB 478
Airline Industry Revitalisation Co v Air Canada (1999) 178
288, 290, 293
DLR (4th) 740 Ont SCJ [Commercial List]
Al Nakib Investments (Jersey) Ltd v Longcroft [1990] 3 All ER
321 Eng Ch D 394
Al Saudi Banque v Clark Pixley [1989] 3 All ER 361 Eng Ch D 543

Alabama, New Orleans, Texas and Pacifi c Junction Railway
513
Co, Re [1891] 1 Ch 213 Eng CA
Albazero, The. Sea Owners of Cargo Laden on Board the
91
Albacruz v Owners of the Albazero [1977] AC 774
Alberta (Treasury Branches) v SevenWay Capital Corp (1999),
360, 369
92 ACWS (3d) 617 Alta QB; (2000) 261 AR 278 Alta CA
Alexander v Westeel-Rosco Ltd (1978) 93 DLR (3d) 116 Ont HC;
336, 339
(1978) 4 BLR 313 Ont HC
Aleyn v Blecker (1758) 1 Eden 132 232
Algonquin Mercantile Corp v Enfi eld Corp (1990) 74 OR (2d)
338
457 Ont HC
490, 491, 492,
Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656 Eng CA
493, 494
Allen v Hyatt (1914) 30 TLR 444 PC 234, 474
Alles v Maurice (1992) 5 BLR (2d) 146 Ont Gen Div 342
Aluminium Industries Vasen BV v Romalpa Aluminium Ltd
412
[1976] 2 All ER 552 Eng CA
Ambrose Lake Tin and Copper Co (Clarke’s Case) (1878) 8 Ch
136
D 635
Ambrose Lake Tin Co, Re (1880) 14 Ch D 390 Eng CA 69
Amersey et al v Attorney General et al (1992) 27 Barb LR 96
319
B’dos CA
Ames & Co, Re [1972] 3 OR 293 Ont CA 522
Ammonia Soda Co v Chamberlain [1918] 1 Ch 266 Eng CA 169, 170
Anderson Lumber Co v Canadian Conifer Ltd [1977] 77 DLR
126, 127
(3d) 126 Alta CA
Andrews v Mockford [1896] 1 QB 372 Eng CA 394
Angus v R. Angus Alberta Ltd (1988) 39 BLR 1 Alta CA 272
ANZ Banking Group (NZ) Ltd v Gibson [1981] 2 NZLR 513 NZ
CA 458
Anthem Works Ltd, Re [2005] 5 BLR (4th) 298 BC SC 573, 575

Appotive v Computrex Centres Ltd (1981) 16 BLR 133 BC SC 329
Aqua-Land Exploration Ltd [1966] SCR 133 SCC 89
Archibald v Sutherland (2006) 23 BLR (4th) 188 BC SC 329
Argo Protective Coatings Inc, Re (2006) 23 BLR (4th) 38 NS SC 340
Armco Can Ltd and the Minister of Department of Consumer
522
and Corporate Affairs, Re (1975) 8 OR (2d) 741 Ont CA
Armstrong v Gardner (1978) 20 OR (2d) 648 Ont HC 328
Arnison v Smith (1889) 41 Ch D 348 Eng CA; Re VGM Holdings
400
Ltd [1942] Ch 235 Eng CA
Arthur v Bohenham (1708) 11 Mod 148 169
Arthur v Signun Communications Ltd (1993) 42 ACWS (3d) 332
360
Ont Div Ct
10, 108, 110,
Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7
111, 113, 114,
HL 653 Eng HL
138
Ashton Mining of Canada Inc v Kwantes (2007) 33 BLR (4th)
364
187 BC SC
ASI holdings Inc, Re (1996) 63 ACWS (3d) 52 Nfld TD 339
Atlas Maritime Co SA v Avalon Maritime Ltd, The Coral Rose
98
[1991] 4 All ER 769 Eng CA
Australian Auxilliary Clipper Co v Mounsey (1858) 4 K&J 733 324
Automatic Phone Recorder Co, Re (1955) 15 WWR 666 BC SC 345
Automatic Self-Cleaning Filter Syndicate Co v Cunninghame
313
[1906] 2 Ch 34, Eng CA
Awad v Dover Investments Ltd (2005) 1 BLR (4th) 173 Ont SCJ 340
B Johnson & Co (Builders) Ltd, Re [1955] Ch 654 Eng CA 465
Bagnall v Carlton (1877) 6 Ch D 371 Eng CA 66
Bahamasair Employees Provident Fund v Galleria Cinemas Ltd
9, 324
(Unreported) Suit No CLE/Gen/402 of 2004 HC of Bahamas
Baker and Paddock Inn Peterborough Ltd, Re (1977) 2 BLR
345, 346
101Ont HC
Balestreri v Roberts (1985) 30 BLR 283 Que SC, aff’d (1992)
278
[1993] RL 4 CA Que
Bamford v Bamford [1970] Ch 212 Eng CA 62, 244
Banbury Foods Pty Ltd v National Bank of Australasia (1984)
458
51 ALR 609 HCA
Baniuk v Carpenter et al (No 1) (1986) 85 NBR (2d) 372 NB QB 345
Bank Leu AG v Gaming Lottery Corp (2001) 29 BLR (3d) 68
339
Ont SCJ [Commercial List]
Bank of Nova Scotia v Williams (1976) 12 OR (2d) 709, 70 DLR
84
(3d) 108 Ont HC
Bank voor Handel en Sheepvaart NV v Slatford [1953] 248 Eng
93
Ch D
Bannerman v White (1861) 10 CBNS 844 Eng Com Pleas 392
Baranowski v Binks Manufacturing Co (2000) 49 C Cel (2d)
125, 126
107 Ont SCJ
Barclays Bank Plc v Clarke et al (Unreported) (Suit No 517 of
96, 97
1996, Supreme Court of the Bahamas)
Barnett v Tsang (1985) 29 BLR 196 Alta QB 340
Baroness Wenlock v River Dee Co (1885) 10 App Cas 354 Eng
108
HL
Bayley v Went (1884) 51 LT 764 467
Bayliss v Harris (1993) 43 ACWS (3d) 754 Ont Gen Div
318
[Commercial List]
Beattie v E & F Beattie Ltd [1938] Ch 708 Eng CA 62
Beatty v First Exploration Fund 1987 & Co (1988) 40 BLR 90 BC
303
SC
Beauchamp v Contenants Sanitaires C S Inc (1979) 7 BLR 200
245
Que SC
Becke v Smith (1836) 2 M&W 191 410
Bede Steam Shipping Co, Re [1917] 1 Ch 123 Eng CA 549
Bell v Counsel Ltd (Unreported) Suit No. AXA HCV No.
327
2003/023 HC Anguilla
Bell v Lever Bros. [1932] AC 161 Eng HL 263, 393
Bell Houses Ltd v City Wall Properties Ltd [1966] QB 207 Eng
115
CA
Bellman v Western Approaches Ltd (1981) 117 DLR (3d) 193 BC
329
CA
Bellman and Western Approaches Ltd, Re (1981) 17 BLR 117
328
BC CA
Bennett v Reim (2004) 50 BLR (3d) 128 Ont SCJ [Commercial
235
List]
Berdugo v Lalique Glassworks Inc (1992) 37 ACWS (3d) 336
318, 319, 339
Ont Gen Div
Bernhardt v Main Outboard Centre Ltd (1995) 17 BLR (2d) 219
340
Man QB
Bevan v Webb [1910] 2 Ch 59 540
Bhullar v Bhullar, Re Bhullar Bros Ltd [2003] 2 BCLC 241 Eng
260, 261
CA
Birch v Cropper (1889) 14 App Cas 525 Eng HL 189, 192
Biggerstaff v Rowatt’s Wharf Ltd [1896] 2 Ch 93 Eng CA 420, 439
Bissell v Ariel Motors (1906) Ltd (1910) 27 TLR 73 471
Bisset v Wilkinson [1927] AC 177 PC 393
73, 75, 78, 79,
Black v Smallwood [1966] ALR 744 HCA
80, 83
Black & Decker Manufacturing Co Ltd [1975] 1 SCR 411 SCC 497
Black-Clawson International Ltd. v Papierwerke Waldhof-
453
Aschaffenburg AG [1975] AC 591 Eng HL
Blair v Consolidated Enfi eld Corp [1995] 4 SCR 5 SCC 278, 279
221, 250, 251,
Boardman v Phipps [1967] 2 AC 46 Eng HL
474
Bolivar Gold Corp., Re (2006) 16 BLR (4th) 10 YT CA affg
(2006) 16 BLR (4th) 17 YT SC 513
Bond v Barrow Haematite Steel Co [1902] 1 Ch 353 Eng Ch D 168, 169

Bond Brewery Holdings Ltd v National Australian Bank Ltd
457
(1991) 448 Vic CA
Bond Worth Ltd, Re [1980] Ch 228 Eng Ch D; [1979] 3 All ER 411, 412, 413,
919 Eng Ch D 420
Borax Co, Re, Foster v Borax Co [1899] 2 Ch 130 420
Borden (UK) Ltd v Scottish Timber Products Ltd [1981] Ch 25
411, 412, 413
Eng CA
Borland’s Trustee v Steel [1901] 1 Ch 279 184
Boulting v Association of Cinematograph, Television and 234, 250, 251,
Allied Technicians [1963] 2 QB 606 Eng CA 256
Bowater Cdn. Ltd v RL Crain (1987) 39 BLR 34 Ont CA 185
Bowman v Secular Society Ltd 43
Boyea et al v Eastern Caribbean Flour Mills Ltd (Unreported)
(Suit No. SVGHCV 211 of 1997 of High Court of St.Vincent and 64
the Grenadines)
Bradbury v English Sewing Cotton Co [1923] AC 744 Eng HL 183
Bradford Banking Co v Briggs, Son and Co (1886) 12 App Cas
556
29 Eng HL
Brady v Brady [1989] AC 755 Eng HL 112
Brant Investments v KeepRite Inc (1991) 80 DLR (4 th) 161 Ont 242, 335, 363,
CA; (1991) 3 OR (3d) 289 Ont CA 364, 366
Bratton Seymour Services Co Ltd v Oxborough [1992] BCLC
60, 63
693 Eng CA
Brazilian Rubber Plantations and Estates Ltd, Re [1911] 1 Ch
270
425
Breckland Group Holdings v London and Suffolk Properties
62
[1989] BCLC 100 Eng Ch D
Bridgewater Navigation Co, Re [1891] 2 Ch 317 Eng CA 190
Briess v Wooley [1954] AC 333 Eng HL 234, 394, 474
Briggs v James Hardie & Co. Pty. Ltd (1989) NSWLR 549 NSW 93
CA
Brightlife Ltd, Re [1987] 1 Ch 200 Eng Ch D 422, 423
Bristol & West Building Society v Mothew [1998] Ch 1 Eng CA 265
British Indian Steam Navigation Co v IRC (1881) 7 QBD 165
436
Eng QBD
Brown v British Abrasive Wheel Co Ltd [1919] 1 Ch 290 Eng Ch
493
D
Brown v Maxim Restoration Ltd (1998) 42 BLR (2d) 243 Ont
345
Gen Div
414, 415, 417,
Brumark, Re (Agnew v IRC) [2001] 2 AC 710 PC
418
Brunninghausen v Glvanics (1999) 46 NSWLR 538 NWS CA 233, 234, 235
Burdon v Zeller’s Ltd (1981) 16 BLR 59 Que SC 191, 336
Burland v Earle [1902] AC 83 Eng HL 326
Burnett v Tsang (1985) 29 BLR 196 Alta QB 340
C A Macdonald & Co, Re (1959) 18 DLR (2d) 731 183
C L Nye Ltd, Re [1971] Ch 442 Eng CA 426
Cairney v Golden Key Holdings Ltd (No. 1) (1987) 40 BLR 263
318, 338
BC SC (No 2); (1988) 40 BLR 289 BC SC
Campbell’s Case (1876) 4 Ch D 470 254
Canadian Aero Service Ltd v O’Malley (1973) 40 DLR (3d) 371
235, 260, 261
SCC
Canadian Airlines Corp., Re [2000] 10 WWR 269 Alta QB 507
Canadian Cottons Ltd, Re (1951) 33 CBR 38 Que SC 513
Canadian Gas & Energy Fund v Sceptre Resource Ltd (1985) 29
359, 365
BLR 178 Alta QB; [1985] 5 WWR 43 Alta QB
Canadian Jorex Ltd v 477749 Alberta Ltd (1991) 4 BLR (2d) 174
205
Alta CA
Canadian Opera Co v 670800 Ont Inc (1989) 69 OR (2d) 532 321
Canadian Rocky Mountain Properties Inc., Re (2006) 3 BLR 1
364
BC SC
Candler v Crane, Christmas & Co [1951] 2 KB 164 Eng CA 395
Canwest International Inc and anor v Atlantic Television Ltd
13, 317, 318,
and anor (1994) 48 WIR 40 B’dos CA; (1998) 48 WIR 40 B’dos
319
CA
527, 528, 541,
Caparo Industries plc v Dickman [1990] 2 AC 605 Eng HL
542, 543, 544
Carew’s Estate Act, Re (1862) 31 Beav 39, 54 ER 1051 104
Carlen v Drury (1812) 1 Ves & B 154 325
Carmichael et al v Viajes International (Barbados) Ltd et al
298
(Unreported) (Suit No. 2401 of 2001 HC B’dos
Carr v Cheng (2005) BCSC 445 BC SC 270
Catalyst Fund General Partners Inc v Hollinger Inc (2006) 266
339
DLR (4th) 288 Ont CA
Central Capital Corp, Re (1996) 26 BLR (2d) 88 Ont CA 158, 172, 179
Chan v Zacharia (1984) 154 CLR 178 249
Charge Card Services Ltd, Re [1987] Ch 150 Eng Ch D 412
Charlebois et al v Bienvenue et al (1968) 68 DLR (2d) 578 Ont
304
CA
Charterbridge Corporation Ltd v Lloyds Bank Ltd [1970] Ch 62
112, 113, 238
Eng Ch D
Chez Nico (Restaurants) Ltd, Re [1992] BCLC 192 Eng Ch D 235, 572
Chromex Nickel Mines Ltd v British Columbia (Securities
279, 280
Commission) (1991) 4 BLR (2d) 189 BC CA
Chrysler Canada Ltd v Shury (April 12, 1988) Doc Vancouver
318
C850504 BC SC, affd ( June 5, 1989) Doc CA009426 BC CA
Citco Banking Corp NV v Pusser’s Ltd [2007] 2 BCLC 483 PC 491, 492, 494
205, 232, 266,
City Equitable Fire Insurance Co. Ltd, Re [1925] Ch 407, Eng
267, 268, 270,
Ch D
271
C-L & Associates Inc v Equipment Sales Inc (2003) 35 BLR (3d)
321
124 Man QB
Clark v Urquhart [1930] AC 28 HL (NI) 399
Clark v Workman [1920] 1 IR 107 246
Clarke v Technical and Marketing Associates Ltd Estate (1992)
163
8 OR (3d) 734 Ont Gen Div
Clarke’s Case (1878) 8 Ch D 635 Eng CA 136
Classic Organ Co v Artisan Organ Ltd (197) 35 BLR 285 Ont
340
Gen Div
Clayton v Green (1868) LR 3 CP 511 453
CMS Dolphin Ltd v Simonet [2001] 2 BCLC 704 Eng Ch D 249
Cohen v Jonco Holdings Ltd (2005) 4 BLR (4th) 232 Man CA 334, 335
Coleman v Myers [1972] 2 NZLR 225 NZ CA 233, 234, 235
Coles v White City (Manchester) Greyhound Assn Ltd (1928) 45
397
TLR 230
Colonial Bank v Whinney (1886) 11 App Cas 426 Eng HL 183
Colonial Trusts Corporation, Re, Ex parte Bradshaw (1879) 15
418, 421
Ch D 645, 472 Eng CA
Communities Economic Development Fund v Canadian Pickles
109, 110, 119
Corp [1992] 85 DLR (4th) 88 SCC
Continental Assurance Co of London plc, Re, Secretary for
267
Trade and Industry v Burrow [1997] 1 BCLC 48
Cook v Deeks [1916] AC 554 PC 249, 259
Copal Varnish Co, Re [1917] 2 Ch 349 549
Corporacion Americana de Equipamientos Urbanos SL v Olifas
339
Marketing Group Inc (2003) 38 BLR (3d) 156 Ont SCJ
Corporate Affairs Commission v David James Finance Ltd
382
[1975] 2 NSWLR 710 NSW Sup Ct
Cosslett (Contractors) Ltd, Re [1998] Ch 495 Eng CA 409, 410, 411
Costa Rica Railway v Forwood [1901] 1 Ch 746 Eng CA 252
Cotman v Brougham [1918] AC 514 Eng HL 114, 115
Cousins v International Brick Co [1931] 2 Ch 90 Eng CA 303
Covacich v Riordan [1994] 2 NILR 502 423
Cox v Roberts (Unreported) Civil Suit No 1948 of 2003 B’dos
HC 337
CPW Valve & Instruments Ltd v Scott (1978) 3 BLR 204 Alta
42, 43
CA
Craven-Ellis v Cannons Ltd [1936] 2 KB 403 Eng CA 221
Creasey v Breachwood Motors Ltd [1993] BCLC 480 Eng QBD 101
Creative Realty Corp v 333 Terminal Holdings Ltd (1011) BCSC
270
638 BC SC
Credit Foncier Franco-Canadien v CSW Enterprises Ltd (1986)
318
54 Sask R 97 Sask QB
Crichton’s Oil Co, Re [1902] 2 Ch 86 Eng CA 193
Cripps (Pharmaceuticals) Ltd v Wickenden [1973] 2 All ER 606 456, 457
Crompton & Co Ltd, Re, Player v Crompton & Co Ltd [1914] 1
420, 421
Ch 954
Crown Bank, Re (1890) 44 Ch D 634 115
Cumbrian Newspaper Group Ltd v Cumberland and
186, 187
Westmoreland Herald Ltd [1987] Ch 1 Eng Ch D
Curtain Dream Plc, Re [1990] BCLC 925 Eng Ch D 411, 412
Cybulski v MNR [1988] 2 CTC 2180 TCC 266
Cyprus Anvil Mining Corp v Dickson (1986) 33 DLR (4th) 641
364, 576
BC CA; (1986) 8 BCLR (2d) 145 BC CA
D’Amore v McDonald [1973] 40 DLR (3d) 354 Ont CA 329
D’Jan of London Ltd, Re [1994] BCLC 561 Eng Ch D 267
Dafen Tin Plate Co v Llanelly Steel Co [1920] 2 Ch 124 493, 494
Dancey v 229281 Alta Ltd (1988) 40 BLR 180 Alta QB 334
Daniels v Anderson (1995) 16 ACSR 607 NSW CA 269
Daniels v Fielder (1988) 52 DLR (4th) 424 Ont HC 339
Daon Development Corp, Re (1984) 54 BCLR 235 BC SC 328
Davey & Co v Williamson & Sons Ltd [1898] 2 QB 194 Eng CA 420, 422
David Payne & Co Ltd, Re [1904] 2 Ch 608 Eng CA 111
Dawi v Armstrong (1992) 17 C.P.C (3d) 196 (Ont. Gen. Div.);
affd (1993) 43 ACWS (3d) 65 Ont. CA 75
Dawson International Plc v Coats Paton Plc (1989) BCLC 233
233, 246
Ct of Sess (Outer House)
Denham & Co, Re (1883) 25 Ch D 752 268
Denischuk v Bonn Energy Corp (1983) 29 Sask R 156 Sask QB 367, 370, 371
Denton v Equus Petroleum Corp (1986) 33 BLR 314 BC SC 279
Deputy Federal Commissioner of Taxation v Horsburgh [1983]
423
83 ATC 4823; affd [1984] VR 773
Derry v Peek (1889) 14 App Cas 337 Eng HL 394, 395, 399
Design Home Associations v Raviv (2004) 44 BLR (3d) 124 Ont
82
SCJ
Devaux v Duboulay Holdings Ltd (Unreported) SLUHCV 0424
335
of 2003 St L HC
DHN Foods Distributors Ltd v Borough of Town Hamlets [1976]
99, 100
1 WLR 852 Eng CA
Dicore Resources Ltd v Gulfstream Resources Ltd (1986) 38
329
ACWS (2d) 430 BC SC
Diligenti v RWMD Operations Kelowna (1976) 1 BCLR 36 SC;
336, 339, 364
(No 2) (1977) 4 BCLR 134 BC SC
Dimbley & Sons v National Union of Journalists [1984] 1 WLR
101
427 Eng HL
Dimbula Valley Ceylon Tea Co Ltd v Laurie [1961] Ch 353 Eng
170, 173
Ch D
Dimo Holdings Ltd v Jager Developments Inc (1998) 43 BLR
252
124 Alta QB
Directors, Central Ry Co of Venezuela v Kisch (1867) LR 2 HL
375
99 Eng HL
Discoveries Finance Corp, Re, Lindlar’s Case [1910]1 Ch 312
355
Eng CA
Discovery Enterprises Inc v ISE Research Ltd (2002) 29 BLR (3d)
340
318 BC SC
Distributelite Ltd v Toronto Board of Education Staff Credit
118, 119
Union Ltd (1987) 45 DLR (4th) 16 Ont HC
Domglas Inc v Jarislowsky, Fraser & Co (1980) 13 BLR 135 Que 363, 365, 366,
SC; affd 22 BLR 121 Que CA 371, 372
Don King Productions Inc v Warren [2000] 1 BCLC 607 249
Dorchester Finance Co Ltd v Stebbing [1989] BCLC 498 Eng Ch
268
D
Dorset Seafoods Ltd v Dorset Fisheries Ltd (1987) 64 Nfld &
PEIR 234 Nfld TD; affirmed (1988) 69 Nfld &PEIR 105 Nfld 56
CA
Dovey v Corey [1901] AC 447 Eng HL 168, 169
Downes v Ship (1868) LR 3 HL 343 398
Downsview Nominees Ltd v First City Corp Ltd [1993] 2 AC 295
465
PC
DPP v Kent & Sussex Contactors Ltd [1944] KB 146 Eng KBD 103
Driver v Broad [1893] 1 QB 744; Wallace v Evershed [1889] 1
420
Ch 891
Duha Printers (Western) Ltd v The Queen [1998] 159 DLR (4th) 205, 310, 311,
457 SCC 312, 313, 314
Dunderland Iron Ore Co Ltd, Re [1909] 1 Ch 446 436
Duomatic Ltd, Re [1969] 2 Ch 365 Eng Ch D 313
Dusik v Newton (1985) 62 BCLR 1 BC CA 476, 478
E. Pfeiffer Weinkellerei – Weineinkauf Gmb H v Arbuthnot
412
Factors Ltd [1978] BCLC 522
Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 Eng HL 332
Edgecombe v St. Lucia Coconut Growers Association Ltd
113
(Unreported) (Civil Appeal No. 116 of 1986 St L CA)
Edgington v Fitzmaurice (1885) 29 Ch D 459 Eng CA 393
Edmonds v Blaina Furnaces Co (1887) 36 Ch D 215 Eng Ch D 436
Edmonton Place Ltd v 315888 Atlanta Ltd 40 Business Law
13
Reports 28
Edwards v Edwards Dockrill Horwich Inc (2005) 12 BLR (4th)
339
36 NS SC
Edwards v Halliwell (1950) 2 All E.R. 1064 Eng CA 325
Egyptian International Foreign Trade Co v Soplex Wholesale
128
Supplies Ltd, The Raffaella [1985] 404 Eng CA
Eiserman v Ara Farms Ltd [1988] 5 WWR 97 Sask CA 339
El Ajou v Dollar land Holdings plc [1994] 1BCLC 464 Eng CA 104, 105
Electra Private Equity Partners v KPMG Peat Marwick [2001] 1
543
BCLC 589 Eng CA
Electrohome Ltd, Re (1998) 40 BLR (2d) 210 Ont Gen Div
513
[Commercial List]
Eley v Positive Government Security Life Assurance Ltd (1876)
62
1 Ex D 88 Eng Ex D
Elgindata Ltd, Re [1991] BCLC 959 337
Emma Silver Mining Co v Grant (1879) 11 Ch D 918 Eng CA 66, 70
Emma Silver Mining Co v Lewis & Son (1879) 396 Eng CA 67, 68
Emmadart, Re [1979] Ch 540 462
Empire Assurance Corporation, Re, ex p. Bagshaw (1867) LR 4
495
Eq. 341
Enterprise Saint-Boniface Inc v Innovision Window Fashions
159
Inc (1998) 39 BLR (2d) 151 Man QB
Eric Holmes (Property) Ltd, Re [1965] Ch 1052 Eng Ch D 426
Erlanger v New Sombrero Phosphate Co (1878) 3 App. Cas 1218 66, 67, 68, 69,
Eng HL 70
Ernest v Nicholls (1857) 6 HL Cas 401 Eng HL 123
Essanda Finance Corp Ltd v Peat Marwick Hungerford (1997)
543
188 CLR 241 HCA
Estmanco (Kilner House) Ltd v Greater London Council [1982]
326
1 All ER 437
Evans Coleman Evans v Evans Nelson (RA) Construction Ltd
416
(1959) 16 DLR (2d) 123
Evans v Rival Granite Quarries Ltd [1910] 2 KB 979 Eng CA 419, 420, 422
Everitt v Automatic Weighing Machine Co [1892] 3 Ch 506 556
189
Evling v Israel & Oppenheimer [1918] 1 Ch 101
Exchange Banking Co, Re, Flitcroft’s Case (1882) 21 Ch D 519
Eng CA 132, 151, 169
Exco Corporation v Nova Scotia Savings & Loan Co (1987) 35

588
BLR 149 NS SC
Exide Canada Inc v Hilts (2005 11BLR (4th) 311 Ont SCJ 252
Explo Syndicates v Explo Inc (1989) 16 ACWS (3d) 218 Ont SCJ 339
F De Jong Ltd, Re [1946] Ch 211 Eng CA 193
Farnham v Fingold [1973] 37 DLR (3d) 156 Ont CA 327
Fayed v United Kingdom (1994) 18 EHRR 393 ECHR 345
Feder v Grossman (2000) Carswell Ont 4293 Ont SCJ 523
Federal High School Ltd v Barclays Bank (International) Ltd
10, 115
(1979) 37 WIR 53 B’dos CA
Federated Business Development Bank v Shearwater Marine
463
Ltd [1979] 102 DLR (3d) 257 BC CA
Federated Strategic Income Fund et al v Mechala Group
Jamaica Ltd et al (Unreported) Supreme Court Civil Appeal 509
No. 47 of 2000 J’ca SC
Feld v Glick (1978) 56 DLR (3d) 649 Ont HC 329
Ferguson v Imax Systems Corp (1983)150 DLR (3d) 718 Ont CA;
330, 339, 340
(1984) 11 DLR (4th) 249 Ont Div Ct
FG (Films) Ltd, Re [1953] 1 All ER 615 Eng Ch D 98
Fiber Connections Inc v SBCM Capital Ltd (2005) 5 BLR (4th)
339
271 Ont SCJ
Fire Nymph Products Ltd v The Heating Centre Pty Ltd (1992) 7
421, 422
ACSR 375
Fireproof Doors Ltd, Re [1916] 2 Ch 142 439
First Edmonton Place Ltd v 315888 Alberta Ltd (1988) 40 BLR 28 319, 320, 321,
Alta QB; vard (1989) 45 BLR 110 Alta CA 324, 331
First Investors Corp, Re [1988] 4 WWR 22 Alta QB, affd (1988)
346
59 Alta LR (2d) 334 Alta CA
Fisher Investments Ltd v Nusbaum (1988) 71 CBR (NS) 185 Ont 339
HC
Fitch v Churchill Corp (1990) 66 DLR (4th) 569 Alta CA 367
Five Star Medical Ltd v Telecommunications Services of
322
Trinidad and Tobago (Unreported) HCA No 1593 of 2001
Florence Land and Public Works Co, Re, Ex parte Moor (1878)
418
10 Ch D 530
Fomento (Sterling Area) Ltd v Selsdon Fontain Pen Co [1958] 1
539
All ER 11 Eng HL
Ford Motor Co. of Canada Ltd v Ontario Municipal Employees
191, 340, 360,
Retirement Board (2006) 12 BLR (4th) 139 Ont CA; (2006) BLR
361, 364, 366
(4th) 189 Ont CA
Forest of Dean Coal Mining Co, Re (1878) 10 Ch D 450 Eng CA 232, 270
9, 62, 324, 325,
Foss v Harbottle (1843) 2 Hare 461 Eng Ct of Chancery 326, 327, 330,
341, 343
Foster v New Trinidad Co [1901] 1 Ch 208 170
Foster Bryant Surveying Ltd v Bryant [2007] 2 BCLC 239 Eng
262
CA
Fraser (Trustee of) v MNR [1987] 1CTC 2311 204
Freeman and Lockyer v Buckhurst Park Properties (Mangal)
121, 128, 129
Ltd [1964] 2 QB 480 Eng CA
Fulham Football Club Ltd v Cabra Estates plc [1994] 1 BCLC
247
363 Eng CA
G & T Earle Ltd v Hensworth RDC (1928) 44 LTR 605; affd
428
[1928] All ER 602 Eng CA
Galloway v Hallé Concerts Society [1915] 2 Ch 233 Eng Ch D 238
Galoo Ltd v Bright Grahame Murray [1994] 2 BCLC 492 Eng
543
CA
Gambotto v WCP Ltd (1995) 127 ALR 417 HCA 494
Gandalman Investments Inc. and Fogle, Re (1985) 52 OR (2d)
318
614 Ont HC
Gencor ACP Ltd v Dalby [2000] BCLC 734 Eng Ch D 93, 100, 249
George Baker (Transport) Ltd v Eynon [1974] 3 All ER 374 Eng
CA 421
George Newman & Co, Re [1895] 1 Ch 674 Eng CA 226

George Wimpey & Co Ltd v BOAC [1955] AC 169 Eng HL 169
German Date Coffee Co, Re (1882) 20 CH D 169 Eng CA 114
Gestion Michel Noel ltee c. 2323–0220 Que inc (1998) (sub nom)
2323–0220 Que inc c. Gestion Michel Noel ltee [1998] RJQ 1714 156
Que CA
Gething v Kilner [1972] 1 All ER 1166 233
Gilford Motors Co. Ltd v Horne [1933] Ch 935 Eng CA 95
Gillespie v Overs (August 14, 1987) Doc. RE 1088/87 (Ont HC)
339
[Unreported]
Gluckstein v Barnes [1900] AC 240 Eng HL 68, 69, 70
Goft v 1206468 Ontario Ltd (2001) 11 BLR (3d) 131 Ont SCJ
339
[Commercial List]
Goldburg, Re (No 2) [1912] 1 KB 606 472
Golden West Restaurants Ltd v Canadian Imperial Bank of
463
Commerce (1989) 5 WWR 471 Sask QB
Goldex Mines Ltd v Revill (1974) 54 DLR (3d) 672 Ont CA 327
Gottlieb v Adam (1994) 16 BLR (2d) 271 Ont Gen Div 340
Governments Stock and other Securities Investment Co v
400
Christopher [1956] 1 All ER 490
Government Stock Investment and Securities Co. v Manilla Co.
418, 421, 422
Ry. Ltd [1897] AC 81 Eng HL; [1895] 2 Ch 551 Eng CA
Grace v Biagioli [2006] 2 BCLC 70 Eng CA 336
Gray v New Augarita Porcupine Mines [1952] 3 DLR 1 PC 253
Great Eastern Rly Co. v Turner (1872) 8 Ch App 149 232
Great Lakes Petroleum Co Ltd v Border Cities Oil Co Ltd (1934)
421
2 DLR 743
Green v Charterhouse Group Canada Ltd (1976) 68 DLR (3d) 476, 478, 479
592 Ont CA; (1973) 35 DLR (3d) 161 Ont HCJ, affd 68 DLR (3d
592 Ont CA
Greenhalgh v Arderne Cinema Ltd [1950] 2 All ER 1120 Eng
CA 492
Greenhalgh v Mallard [1943] 2 All ER 234 Eng CA; [1943] 2 All

48, 547
ER 1044 Eng CA
Greenpeace Foundation of Canada & Inco Ltd, Re (1984) 24
ACWS (2d) 176 Ont HC, affirmed (1984) 25 ACWS (2d) 149 292
Ont CA
Greenwell v Porter [1902] 1 Ch 530 309
Gregory Love & Co, Re [1916] 1 Ch 203 427
Grenada General Insurance Co. Ltd, Jonas Browne & Hubbard
13, 332, 333,
(Grenada) Ltd et al v Grenada Insurance Services Ltd
335, 336
(Unreported) (Civ App No 12 of 1999 Gren CA)
Grierson, Oldham and Adams Ltd, Re [1968] Ch 17 Eng Ch D 576
Grouse Mountain Resorts v Angeli (1989) 42 BLR 219 BC CA 510
GT Campbell & Associates Ltd v Hugh Carson Co (1979) 24 OR
322
(2d) 758 Ont CA
Guaranty Properties Ltd v R (1990) 47 BLR 197 497
Guardian Assurance Co, Re [1917] 1 Ch 431Eng CA 509
Guiness v Land Corporation of Ireland (1882) 22 Ch D 349 Eng
151
CA
62, 221, 251,
Guinness Plc v Saunders [1990] 2 AC 663 Eng HL
256
H R Harmer Ltd, Re [1958] 3 All E R 689 62
Hadeed v Crawford et al (Unreported) Suit No CLH 047 of 1989
9
J’ca SC
Hallett v Dowdall (1852) 21 LJQB 98 Eng Exch Ch 92
Hamilton v Hunter (1982) 7 ACLR 295 HCA 420
Harben v Philips (1883) 23 Ch D 14 Eng CA 301
Harmer v McNeely Engineering Consultants Ltd (1997) 44 BLR 339
(2d) 254 Ont Gen Div
Harmony and Montague Tin and Copper Co, Re, Spargo’s Case
145
(1873) 8 Ch App 404
Harris & Lewin Pty Ltd v Harris & Lewin Agents (1975) ACLC 458
28 HCA
Haven Gold Mining Co, Re (1882) 20 Ch.D 151 Eng CA 114
Hedley Byrne & Co Ltd v Heller & Partner Ltd [1964] AC 465
393, 395, 541
HL; [1963] 2 All ER 575 PC
Hellenic & General Trust Ltd, Re [1975] 3 All ER 382 Eng Ch D 186
Hely-Hutchinson v Brayhead Ltd [1967] 3 All ER 98 Eng Ch D
(affd. by the Court of Appeal on other grounds, [1968] 1 QB 121, 127
549 Eng CA)
Henry v 609897 Saskatchewan Ltd (2002) 31 BLR (3d) 36 Sask
329
QB
Henry et al v National Flour Mills Ltd (Unreported) (Suit No.
64
CV 1372 of 1998 of High Court of Trinidad and Tobago)
Henry Squire, Cash Chemist Ltd v Ball, Baker & Co (1911) 28
543
TLR 81
Hercules Management Ltd v Ernst & Young (1997) 146 DLR
543
(4th) 577 SCC
Hichens v Congreve (1829) 1 Russ & M 150 69
Hickman v Romney Marsh Sheepbreeders Assoc. [1915] 1 Ch
61, 62
881 Eng Ch D
HiFi Equipment (Cabinets) Ltd, Re [1988] BCLC 65 Eng Ch D 415
Highway Advertising Co v Ellis (1904) 7 OLR 504 Ont CA 69
Hill v Permanent Trustee Co of New South Wales Ltd [1930] 720
151
PC
HMO-W Incorporated v SSM Health Care System 611 NW 2d
361
250 (2000) Wis SC
Hobson, Houghton & Co, Re [1929] 1 Ch 300 547
Hogg v Cramphorn Ltd [1967] Ch 254 Eng Ch D 243, 244
Holdex Group Ltd, Re [1972] 3 OR 435 Ont HC 514
Holroyd v Marshall (1862) 10 HL Cas 191 Eng HL 414, 415
Hong v Rice Bowl Ltd (1985) 153 APR 329 Nfld TD 345
Horbury Bridge, Coal, Iron & Waggon Co, Re (1879) 11 Ch D 324
109 Eng CA
Horsfall v Thomas (1862) 1 H & C 90 Eng Exch Ch 393
Horsley & Weight Ltd, Re [1982] Ch 442 Eng CA 112
Hoskin v Price Waterhouse Ltd (1982) 136 DLR (3d) 553 Ont
328
Div Ct
Houldsworth v City of Glasgow Bank (1880) 5 App Cas 317 Eng
394
HL
Howard Marine and Dredging Co Ltd v Ogden & Sons
396
(Excavations) Ltd [1978] QB 574 Eng CA
Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821 PC; 243, 244, 325,
[1974] 1 All ER 1126 HL 587
Howestead Development Ltd v Lehman Resources Ltd (1988) 40
339
BLR 1 BC SC
HSBC Capital Canada Inc v First Mortgage Alberta Fund (V)
322, 340
Inc (1999) 47 BLR (2d) 180 Alta QB
Huckerby v Elliott [1970] 1 All ER 189 269
Hudson Bay Mining & Smelting Co v Lueck (1980) 10 BLR 113
575
BC SC
Hui v Yamato Japanese Steak House Inc (1988) 7 ACWS (3d)
340
388 Ont HC
Hutton v Hutton [1917] 1 KB 813 Eng CA 397
Hutton v West Cork Rly Co (1883) 23 Ch D 654 Eng CA 221
Hydrodam (Corby) Ltd, Re [1994] 2 BCLC 180 Eng Ch D 202
Illingworth v Houldsworth [1904] AC 355 Eng HL 414, 419, 421
Imperial Bank of China v Bank of Hindustan (1868) LR 6 Eq 91 463
Imperial Hydropathic Hotel Co., Blackpool v Hampson (1882) 23
221
Ch D 1 Eng CA
Imperial Mercantile Credit Association v Coleman (1871) LR 6 251
Ch App 558 Eng CA
In Plus Group Ltd v Pyke [2002] 2BCLC 201 Eng CA 262, 263
Inbro Citygate Insurance Brokers Ltd v Worldwide Insurance
Ltd (Unreported) Suit No 602 of 1996 HC Gren 33
Incorporated Interest Pty Ltd. v Federal Commissioner of

132
Taxation (1943) 67 CLR 508 HCA
Indo-China Steam Navigation Co, Re [1917] 1 Ch 100 355
Industrial Development Bank v Valley Dairy Ltd (1953) OR 70 421
Industrial Development Consultants v Cooley [1972] 2 All ER
260, 261
162
Introductions Ltd, Re [1970] Ch 199 Eng CA 115
Inversiones Montfore SA v Javelin Int Ltd (1982) 17 BLR 230
339
Que SC
Investissements Mont-Soleil Inc v National Drug Ltd (1982)
366
22BLR 139 Que SC
IRC v Crossman [1937] AC 26 Eng HL 184
IRC v Goldblatt [1972] Ch 498 469, 470
IRC v Lonbridge Overseers (1884) 13 QBD 339 410
Irvine v Union Bank of Australia (1877) 2 App Cas 366 PC 123
Island Export Finance Ltd v Umunna [1986] BCLC 460 261, 262
Isle of Thanet Electric Co, Re [1950] Ch 161 Eng CA 189, 193
It’s a Wrap (UK) Ltd v Gula [2006] 2 BCLC 634 Eng CA 168
Jacobsen v United Canso Oil & Gas Ltd [1980] 113 DLR (3d)
191
427 Alta QB
Jacobus Marler Estates Ltd v Marler (1913) 85 LJPC 167n 69
Jamaican case of Arawak Woodworking Establishment Ltd v
461
Jamaica Development Bank (1978) 24 JLR 15
James v Beaver Consolidated Mines Ltd [1927] 3 DLR 163 Ont
206
HC
James McNaughton Papers Group Ltd v Hicks Anderson &
[1991] BCLC 163 Eng CA 543
JEB Fasteners Ltd v Marks Bloom & Co [1981] 3 All ER 289;
543
affirmed on other grounds [1983] 1 ALL ER 583 Eng CA
Jepson v Canadian Salt Co (1979) 99 DLR (3d) 513 SCC; (1979)
360, 369
4 WWR 35 SCC
Jerry v Gillard (2005) 3 BLR (4th) 169 Alta SC 329
JH Rayner (Mincing Lane) Ltd v Department of Trade and
86, 97
Industry [1990] 2 AC 22 Eng HL; [1989] Ch 72 Eng CA
John Crowther Group plc v Carpets International plc [1990]
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BCLC 460
Johnson v Gore Wood & Co [2003] All ER (D) 58 (Dec) 544
Johnson v Meyer (1987) 57 Sask R 161 Sask QB 328
Jones v Lipman [1962] 1 All ER 442 Eng Ch D 94, 95
Journet v Superchef Food Industries Ltd (1984) 29 BLR 206 Que 335, 337, 339,
SC; (1984) 29 BLR 263 BC SC 340
Jubilee Cotton Mills Ltd v Lewis [1924] AC 958 Eng HL 42
K & L Higgins Ltd v Yonge-Eglinton Buildings Ltd (1974) 51
DLR (3d) 47 reversed on other grounds but affirmed on s. 14 82
(2) (1976) 12 DLR (4th) 265 Ont CA
Karak Rubber Co v Burden (No. 2) [1972] 1 All ER 1210 Eng Ch
162
D
Karsberg’s Case, Re Metropolitan Consumers Association
396, 398
[1892] 3 Ch 1 Eng CA
Kasofsky v Kreegers [1937] 4 All ER 374 459
Kavcar Investments Ltd v Aetna Financial Services Ltd (1989)
458
62 DLR (4th) 277 Ont CA
Kaytech International plc, Re, Secretary of State for Trade and
201
Industry v Kaczer [1999] 2 BCLC 351 Eng CA
Keele-Wilson Supermarket Ltd v Tops Inc (1983) 78 CPR (2d)
56
146 TM Opp Bd
Keech v Sandford (1726) Sel Cas t King 61 258
Keho Holdings Ltd v Noble (1987) 38 DLR (4th) 368 Alta CA 340
Kellar v Williams [2000] 2 BCLC 390 133
66, 70, 72, 73,
Kelner v Baxter (1866) LR 2 CP 174 Eng CCP
75, 78, 81, 83
Kelvin Energy Ltd v Bahan (1987) 52 Alta LR (2d) 71 Alta QB 364, 365
Kings Beach Hotel Ltd et al v Marks (Unreported) Civil Suit
No. 995 of 2006 B’dos HC 461, 463
Kingston Cotton Mill Co, Re (No 2) [1896] 2 Ch 279 Eng CA 539

Kinsela v Russell Kinsela Pty Ltd (1986) 4 ACLC 215 NSW CA 241
Korogonas v Andrew [1992] 4 WWR 339 Alta QB 338
Kosmopoulos v Constitution Insurance Co. [1987] SCR 2 SCC 89, 321, 332
Kreditbank Cassel v Schenkers [1927] 1 KB 826 Eng CA 129
332, 335, 336,
Krynen v Bugg (2003) 32 BLR (3d) 61 Ont SCJ
339
Labatt Brewing Co v Trilon Holdings Inc (1998) 41 OR (3d) 384
523
Ont Gen Div [Commercial List]
Ladywell Mining Co. v Brookes (1887) 35 Ch D 400 Eng CA 69
Lagunas Nitrate Co v Lagunas Syndicate [1899] 2 Ch 392 Eng
68, 70
CA
Lalla v Trinidad Cement Ltd et al (Unreported) (HCA No. Cv.
318, 334
S -852/98 T’dad HC)
Landall Holdings Ltd v Caratti (1979) WAR 977 419
Landmark Inns of Canada Ltd v Horeak [1982] 2WWR 377
81, 84
Sask QB
Larmond v Synergy Hospitality Inc (2004) 1 BLR (4th) 244 Ont
318
SCJ
Lawerence v West Somerset Mineral Railway [1918] 2 Ch 250 170
Le Lievre v Gould [1893] 1 QB 491 Eng CA 395
Leaf v International Galleries [1950] 2 KB 86 Eng CA 397
Lecce v Lecce (1990) 72 OR (2d) 540 Ont HC 339
Lee v Lee’s Air Farming Ltd [1961] AC 12 PC 88
Lee v Neuchatel Asphalt Co (1889) 41 Ch D 1Eng CA 170
Lee, Behrens & Co Ltd, Re [1932] 2 Ch 46 Eng Ch D 112
Leeds and Hanley Theatres of Varieties Ltd, Re [1902] 2 Ch 809
69, 70
Eng CA
Leiste v Grenada National Air Services Ltd (Unreported) (Suit
72
No. 149 of 1967) Gren HC
Lemon v Austin Friars Investment Trust Ltd [1926] Ch 1 Eng
CA 439
Lennard’s Carrying Co. Ltd v Asiatic Petroleum Co. Ltd [1915]

103
AC 705 Eng HL
Leske v SA Real Estate Investment Company Ltd 45 CLR 22 89
Levy v Abercorris Slate and Slab Co (1887) 37 Ch D 260 136, 435
Levy-Russell Ltd v Shieldings Inc (1998) 41 BLR (2d) 134 Ont
322, 340
Gen Div; (1995) 53 ACWS (3d) 979 Ont Gen Div
Levy-Russell Ltd v Tecmotiv Ltd (1994) 13 BLR (2d) 1 Ont Gen 255, 257, 465,
Div 466
Lister, Re [1926] Ch 149 457
Little Olympian Each-Ways Ltd, Re (No. 3) [1995] 1 BCLC 636
335
Eng Ch D
Littlewoods Mail Order Stores Ltd v IRC [1969] 3 All ER 855
86, 88
Eng CA
Liquidators of Imperial Mercantile Credit Assn v Coleman
252
(1873) LR 6 HL 189 Eng HL
Lloyd v Grace, Smith & Co [1912] AC 716 Eng HL 129, 130
Lloyd Cheyham & Co Ltd v Littlejohn & Co [1987] BCLC 303 540
Lochab Bros v Kenya Furfural [1995] LRC (Comm) 737 459
363, 364, 366,
LoCicero v BACM Industries (1988) 49 DLR (4th) 159 SCC
372
Loeb Inc v Cooper (1991) 3 BLR (2d) 8 Ont Gen Div 497
London & Cheshire Insurance Co Ltd v Laplagrene Property Co
427
Ltd [1971] Ch 203 Eng Ch D
London & General Bank, Re (No. 2) [1895] 2 Ch 673 Eng CA 538
London and New York Investment Corpn, Re [1895] 2 Ch 860 123
London Finance Corp. v Banking Services Corp [1925] 1 DLR
221
319 Ont HC
Long v Lloyd [1958] 2 All ER 402 Eng CA 397
Lonrho plc v Secretary of State for Trade and Industry [1989] 2
ALL ER 609; sub nom R v Secretary of State for Trade and 351
Industry, ex p Lonrho plc [1989] 1 WLR 525 Eng HL
Lopez v Telecommunication Services of Trinidad and Tobago 316, 319, 320,

(Unreported) (HCA No Cv 1997 of 2003) (TT2004 HC 84) 322, 323
Lough v Canadian Resources Ltd (1985) 45 BCLR 335 SCC 365
Loveridge Holdings Ltd v King-Pin Ltd (1991) 5 BLR (2d) 195
341
Ont Gen Div
LSI Logic Corp of Canada Inc v Logani [2002] 100 Alta LR (3d)
179, 360
49 Alta QB; [2002] 4 WWR 531 Alta QB
Lubbock v British Bank of South America [1892] 2 Ch 198 170
Luckins v Highway Motel (Carnavan) Pty Ltd (1975) 133 CLR
419
164 HCA
Lyle & Scott v Scott’s Trustees [1959] AC 763 Eng HL 548, 549
M. Wheeler & Co v Warren [1928] Ch 840 Eng CA 464
Macaura v Northern Assurance Co [1925] AC 619 Eng HL 86, 89
MacDonald v Master Cartage Inc (1999) 49 BLR (2d) 146 Ont
339
SCJ
Macro (Ipswich) Ltd, Re [1994] 2 BCLC 354 337
Maddison v Alderson (1883) 8 App Cas 467 Eng HL 393
Mahoney v Taylor (1996) 64 ACWS (3d) 329 BC SC 340
Mahony v East Holyford Mining Co (1875) LR 7 HL 869 Eng
125, 126, 130
HL
Main v Delcan Group Inc (1999) 47 BLR (2d) 200 Ont SCJ 340
Man Nutzfahrzeuge AG v Freightliner Ltd [2005] All ER (D)
102
357 (Oct) Eng QBD
Manchester and Milford Ry. Co., Re, Ex parte Cambrian Ry. Co. 453
(1880) Ch D 645 Eng CA
Manitoba (Securities Commission) v Versatile Cornat Corp
367
(1979) 7 BLR 38 Man. QB
Mann v Edinburgh Northern Tramways Co [1893] AC 69 Eng
66
HL
Manning v Harris Steel Group Inc [1987] 1 WWR 86 SCC;
366, 575, 576
(1989) 63 DLR 125 BC CA
Manuel v A-G [1983] Ch 77 453
Manurewa Transport Ltd, Re [1971] NZLR 909 422

Martin v FP Bourgault Industries Air Seeder Division Ltd (1987)
358
38 BLR 90 Sask CA
London and Mashonaland Exploration Co v New Mashonaland
263
Exploration Co [1891] WN 165
Maskelyne British Typewriters, Re [1898] 1 Ch 113 460
Mason and Intercity Properties Ltd, Re (1987) 59 OR (2d) 631
334
Ont CA
Massey v Sladen (1868) LR 4 Ex 13 457
Mathers v Mathers (1989) 42 BLR 228; affirmed (1989) 90 NSR
48, 547
(2d) 354 NS CA
Mathews v Muroff (1998) 79 ACWS (3d) 932 Ont Gen Div 340
McAteer v Devoncraft Developments Ltd (2001) 24 BLR (3d) 1 125, 126, 331,
Alta QB 338
McClurg v Minister of National Revenue (1991) 50 BLR 161 167, 168, 185,
SCC; [1990] 3 SCR 1020 SCC 187, 191
McConnell v Newco Financial Corp (1979) 8 BLR 180 BC SC 358
McEnearney Alstons Ltd v McEnearney Alstons (B’dos) Ltd et
304, 305
al (Unreported) (Suit No 436 of 1989) B’bos HC
Mckay and Hughes (1973) Ltd v Martin Potatoes Ltd (1984) 9
456
DLR (4th) 439
McKay-Cocker Construction Ltd v Mc Murdo (2001) Carswell
277
Ont 3883 Ont SCJ
Mechanisations (Eaglescliffe) Ltd, Re [1966] Ch 120 Eng Ch D 426
Med Chem Health Care Ltd v Misir [2010] ONCA 380 278
Menier v Hooper’s Telegraph Works (1874) LR 9 Ch App 350
326
CA in Chancery
Mentmore Manufacturing Co v National Merchandising Co
395
(1978) 89 DLR (3d) 195 Fed CA
Mercantile Investment and General Trust Co v International Co
509
of Mexico [1893] 1 Ch 484n Eng CA
Meridian Global Funds Management Asia Ltd v Securities 102, 106, 108,
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Metropolitan Fire Insurance Co, Re, Wallace’s Case [1900] 2 Ch

392
App 322
Metropolitan Rlys Co, Re, Robinson’s Case [1900] 2 Ch 671 388
Michalak v Biotech Electronics Ltd (1986) 35 BLR 1 Que SC 317
Millar v McNally (1991) 3 BLR (2d) 102 Ont Gen Div 338, 339
Millard v North George capital Management Ltd (1999) 1 BLR
339
(3d) 106 Ont SCJ [Commercial List]
Miller v F Mendel Holdings Ltd (1984) 26 BLR 85 Sask QB 335, 339, 340
Mills v Mills 1938) 60 CLR 150 HCA 232, 239
Milroy v Lord (1862) 4 De G., F and J 264 555
Ming Minerals Inc v Blagdon and Dimmell [1998] 163 Nfld &
312
PEIR 351
Moffat v Farquhar (1878) 7 Ch D 591 60
Monolithic Building Co, Re [1915] 1 Ch 643 Eng Ch D 430
Montgomery and Shell Canada Ltd, Re (1980) 111 DLR (3d) 116
365
Sask QB
Montreal Trust Co of Canada v Scotia McLeod Inc (1995) 23
395
BLR (2d) 165 Ont CA
Montreal Trust of Canada v Call-Net Enterprises Inc (2002) 20
301
BLR (3d) 279 Ont SCJ: affirmed (2004) 40 BLR (3d) 108 Ont CA
Moodie v Shepherd (Bookbinders) Ltd [1949] 2 All ER 1044 Eng
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Moore v Bresler Ltd [1944] 2 All ER 515 Eng KBD 103
Moorgate Metals Ltd, Re [1995] 1 BCLC 503 Eng Ch D 201
Morgan Crucible Co plc v Hill Samuel Bank [1991] BCLC 18
543
Eng CA
Morris v Kanssen [1946] AC 459 Eng HL 126
Mosely v Koffyfontein Mines Ltd [1911] 1 Ch 73 Eng CA 136
Moss v Hancock [1899] 2 QB 111 144
Moss Steamship Co. Ltd. v Whinney [1912] AC 254 Eng HL 460
Motherwell v Schoof [1949] 4 DLR 812 Alta SC 246, 312

Movitex Ltd v Bulfi eld [1988] BCLC 104 Eng Ch D 250, 251
Mozley v Alston (1847) 1 Ph 790 326
Mr Broadloom Corp (1968) Ltd v Bank of Montreal (1984) 4
458
DLR (4th) 74 Ont CA
Multinational Gas and Petrochemical Co. v Multinational Gas
233
and Petrochemical Services Ltd [1983] Ch 258 Eng CA
Murphy v Phillips (1993) 12 BLR (2d) 58, supp. Reasons 12 BLR
318, 340
(2d) 91 Ont Gen Div [Commercial List]
Mutual Ins. Co of New York v Rank Organisation Ltd [1985]
238
BCLC 11
Mutual Life and Citizens Assurance Co Ltd v Evatt [1971] AC
395
793 PC
National Bank of New Zealand Ltd v CIR [1992] 1 NZLR 250
415
NZ HC
National Bank of Wales, Re [1899] 2 Ch 629 Eng CA 169
National Provincial and Union Bank of England v Charhley
426
[1924] 1 KB 431 Eng CA
National Westminister Bank plc v IRC [1995] 1 AC 119 Eng HL 136
Nelson v Rentown Enterprises Inc (1992) 5 Alta LR (3d) 149
157, 163
Alta QB; (1994) 16 Alta LR (3d) 212 Alta CA
Neonex Int’l v Kolasa [1978] 84 DLR (3d) 446 BC SC 363, 365, 575
Netmar Inc. v Aquilina ( January 20, 1999) Doc. Kitchener
81
1243/96 Ont Gen Div
New British Iron Co, Re, ex parte Beckwith [1898] 1 Ch 324 62
New Brunswick and Canada Railway Co v Muggerigde 1 Dr &
375
Sm 381
New Bullas Trading Ltd, Re [1994] 1 BCLC 485 Eng CA 417, 418
New Zealand Gold Extraction Co (Newbury Vautin Process)
495
Ltd v Peacock [1894] 1 QB 662
Newborne v Sensolid (Great Britain) Ltd [1954] 1 QB 45 Eng 66, 70, 73, 75,
CA 80, 83
Newdigate Colliery Ltd, Re [1912] 1 Ch 468 Eng CA 454

Newhart Development Ltd v Cooperative Commercial Bank Ltd
461, 462, 467
[1978] 1 QB 814 Eng CA; [1970] QB 814 Eng CA
Ngo v South Pacifi c Development Ltd (2006) 20 BLR (4th) 115
340
BC SC
Ngurli Ltd v McCaan (1953) 90 CLR 425 HCA 490
Nicholson v Permakraft (NZ) Ltd [1985] 1 NZLR 242 NZ CA 241
Nicol’s Case (1885) 29 Ch D 421 Eng CA 382
Nicoll v Cutts [1985] BCLC 322 Eng CA 471
NIR Oil Ltd v Bodrug (1985) 18 DLR (4th) 608 Alta CA; leave to
appeal to the SCC refused (1985) 39 Alta LR (2d) xlvi (note) 477, 479
SCC
Nord Resources Corp v Nord Pacifi c Ltd (2003) 37 BLR (3d) 120
339
NB QB
Norgard v Deputy Commissioner of Taxation (1987) 5 ACLC
423
257
Normand v Theodore Goddard [1991] BCLC 1028 269
North Eastern Insurance Co, Re [1919] 1 Ch 198 Eng Ch D 254
North-West Transportation Ltd and Beatty v Beatty (1887) 12
244
App Cas 589 PC
Norton v Ellam (1837) 2 M&W 451 457
Nunachiaq Inc v Chow (1993) 8 BLR (2d) 109 BC SC 575, 576
Nurcombe v Nurcombe [1985] 1 WLR 370 323
Oliver v Elliot (1960) 23 DLR (2d) 486 Alta SC 219
Olson v Phoenix Industrial Supply Ltd (1984) 26 BLR 183 Man
245
CA
Olympia & York Developments Ltd (Trustee of) v York Realty
320
Corp (2003) 42 BLR (3d) 14 Ont CA
Olympia & York Enterprise Ltd v Hiram Walker Resources Ltd
(1986) 37 DLR (4th) 193 Ont HC, affirmed (1986) 37 DLR (4th) 153, 588
193 Ont Div Ct; (1986) 59 OR (2d) 254 Ont Div Ct
O’Neill v Phillips [1999] 2 All ER 961 Eng HL; [1999] 2BCLC 1
13, 332
Eng HL
Ontario Development Corporation v Synatac Construction Ltd
419
(1976) 69 DLR (3d) 353
10, 137, 138,
Ooregum Gold Mining Co v Roper (1892) AC 125 Eng HL
139
Ord v Belhaven Pubs Ltd [1998] 2 BCLC 447 Eng CA 95, 100, 101
Organ v Barnett (1992) 11 OR (3d) 210 Ont Gen Div 343
Oriental Commercial Bank, Re, Alabaster’s Case (1868) LR 7 Eq
388, 392
273
Overend Gurney & Co v Gibb (1872) LR 5 HL 480 Eng HL 270
Pacaya Rubber & Produce Co, Re, Burn’s Application [1914] 1
398
Ch 542
Palmer v Carling O’Keefe Breweries of Can Ltd (1989) 56 DLR
234
(4th) 128 Ont Div Ct
Panama, New Zealand and Australian Royal Mail, Re (1870) 5
418, 421
Ch App 318 Eng CA
Pandora Select Partners LP v Strategy Real Estate Investments
528
Ltd (2007) 27 BLR (4th) 299 Ont SCJ
Pappas v Acan Windows Inc (1991) 2 BLR (2d) 180 Nfld TD 328, 341
Parke v Daily News Ltd [1962] Ch 927 Eng Ch D 112, 239
Parlett v Guppy (Bridgeport) Ltd [1996] 2 BCLC 34 Eng CA 113
Parsons v Sovereign Bank of Canada [1913] AC 160 PC 461
Paulin, Re [1935] 1 KB 26 Eng CA 184
Paulson & Co Inc v Algoma Steel Inc (2006) 79 OR (3d) 191 Ont
267
SCJ
PCM Construction Control Consultants Ltd v Heeger (1989) 44
340
BLR 289 Alta QB
Peek v Gurney (1873) LR 6 HL 337 Eng HL 393, 394
Pennington and another v Waine and others [2002] 2 BCLC
555
448 Eng CA
Pender v Lushington (1877) 6 Ch D 70 Eng Ch D 61
Pente Investment Management Ltd v Schneider Corp (1998)
267, 332, 335,
(sub nom Maple Leaf Foods Inc v Schneider Corp) 42 OR (2d)
336
177 Ont CA
Peoples Department Stores Ltd (1992) Inc (sub nom Peoples 205, 231, 233,
Department Stores Inc (Trustees of) v Wise) [2004] 3 SCR 461 242, 257, 266,
SCC 267, 270, 276
Percival v Wright [1902] 2 Ch 421 Eng Ch D 233, 473, 474
Permanent Houses (Holdings) Ltd, Re [1988] BCLC 563 423
Peruvian Rlys Co v Thames and Mersey Marine Ins, Re
115
Peruvian Rlys Co (1867) 2 Ch App 617 Eng CA
Peskin v Anderson [2001] 1 BCLC 372 Eng CA 234, 235
Peso Silver Mines Ltd v Copper (1966) 58 DLR (2d) 1 SCC 262
Peter Buchanan Ltd v McVey (1950) reported at [1955] AC
171
516n, 521
Peters’ American Delicacy Co Ltd v Heath (1939) 61 CLR 457
490
HCA
Peterson v Kanata Investments Ltd (1975) 60 DLR (3d) 527 BC
339
SC
Petro-Canada v Cojef Ltd (1992) [1993] 3 WWR 76 Man CA 164
PetroKazakhstan Inc v Lukoil Overseas Kumkol BV (2005) 12
511
BLR (4th) 128 Alta QB
Phonogram Ltd v Lane [1982] 1 QB 938 Eng CA 79, 80
Pinehurst Woodworking Co v Rocco (1986) 38 RPR 116 Ont Div
75, 77
Ct
PMSM Investments Ltd v Bureau (1995) 24 BLR (2d) 295 Ont
339, 340
Gen Div
Polly Peck International plc, Re (No 3) [1996] 1BCLC 428 Eng
100
Ch D
Power v Vitrak Systems Inc (2006) 21 BLR (4th) 103 PEI TD;
272, 310
(2006) 258 Nfld & PEIR 38 PEITD
Powles v Page (1846) 3 CB 16, 136 ER 7 104
Powlter’s Case (1610) 11 Co Rep 29a 453
Precision Feeds Ltd v Rock Lake Colony Ltd (1993) 93 Man R
(2d) 1 Man QB reversed in part (1994) 92 Man R (2d) 292 Man 340
CA
Priceville Fox Co v Jordan [1929] 3 DLR 907 Ont CA 173
Prime Computer of Canada Ltd v Jeffrey (1991) 6 OR (3d) 733
321, 340
Gen Div
Prime Resources Group Inc v Pezin (1991) 1 BLR (2d) 140 BC
279
SC
Prudential Assurance Co Ltd v Newman Industries Ltd (No 2)
326
[1982] Ch 204 Eng CA
Punt v Symons & Co Ltd [1903] 2 Ch 506 Eng Ch D 243
Quarter Master UK Ltd v Pyke [2005] 1 BCLC 245 249
Queensland Mines Ltd v Hudson (1978) 52 ALJR 399 PC 262
Quinn & Axtens Ltd v Salmon [1909] 1 Ch 311 Eng CA, affd
62, 63
[1909] AC 442, Eng HL
R v Andrews Weatherfoil Ltd [1972] 1 WLR 118 106
R v Bata Industries Ltd (1995) 22 BLR (2d) 135 Ont CA 278
R v Black & Decker Manufacturing Co Ltd [1975] 1 SCR 411
496
SCC
R v Findlater [1939] 1 KB 594 439
R v ICR Haulage Ltd [1944] KB 551Eng Ct Crim App 103
R v Registrar of Companies, ex parte A-G [1991] BCLC 476 Eng
42, 43
QB
R v Registrar of Companies, ex p Bowen [1914] 3 KB 1161 Eng
41, 42
KB
R v Registrar of Joint Stock Companies, ex p More [1931] 2 KB
42
197 Eng QB
R v Sands Motor Hotel Ltd (1984) 28 BLR 122 Sask QB 159, 172
R v Saunders, Times Law Reports, November 15, 2002 345
RA Noble & Sons (Clothing) Ltd, Re [1983] BCLC 273 335
Rainham Chemical Works v Belvedere Fish Guano Co [1921] 2
96
AC 465 Eng HL
Ramsgate Victoria Hotel Co v Montefi ore (1868) LR 1 Exch 109 388
Rayfi eld v Hands [1960] Ch 1 Eng Ch D 60, 61
R E Lister Ltd v Dunlop Canada Ltd (1982) 135 DLR (3d) 1 SCC 458
Real Meat Co Ltd, Re [1996] BCC 254 421
Redekop v Robco Construction Ltd (1978) 89 DLR (3d) 507 SCC 253, 336
Reese River Silver Mining Co v Smith (1869) LR 4 HL 64 Eng
397
HL
Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134n Eng HL 232, 258, 474
Rendall v Royal Insurance Can 34 OR (3d) 762 Ont Gen Div;
497
affd (1998) 79 ACWS (3d) 374 Ont CA
Revere v Whitmore (1863) 33 LJ Ch 63 414, 415
Reynolds v Texas Gulf Sulphur Co 309 F Supp 548 (DC Utah,
479
1970) varied on other grounds, 446 F 2d (10th Circ 1971)
Rhyolite Resources Inc v CanQuest Resource Corp (1990) 50 BLR
251, 277
275 BC SC
Richardson v Control Fire Holdings Inc (2002) 29 BLR 208 Ont
339
SCJ
Richardson Green Shields of Canada Ltd v Kalmacoff (1995)
328
123 DLR (4th) 628 Ont CA
Richmond Gate Property Co Ltd, Re [1964] 3 All ER 936 62
Rideau Carleton Raceway Holdings Ltd, Re (1984) 28 BLR 89
484, 510
Ont Div Ct
Ringuet v Bergeron [1960] SCR 672 SCC 309
Risdel, Re, Risdel v Rawinson [1947] 2 All ER 312 539
River Wear Commissioners v Adamson (1877) 1 QBD 546 Eng
169
CA
Roberts v Hopwood [1925] AC 578 Eng HL 539
Roberts v Letter “T” Estate Ltd [1961] AC 795 PC 547
Roberts v Pelling (1981) 16 BLR 150 BC SC 478
Robertson v Canadian Canners Ltd (1978) 4 BLR 90 Ont HC 371
Robson v Byrne [1895] 2 Ch 118 436

Rolled Steel Products (Holdings) Ltd v British Steel Corpn [1982] 111, 112, 120,
Ch 478 Eng Ch D; [1984] BCLC 466; [1986] Ch 246 Eng CA 472
Roman Corp v Peat Marwick Thorne (1993) 12 BLR (2d) 10 Ont
527
Gen Div
Rose v McGivern [1998] 2 BCLC 593 Eng Ch D 168
Rose, Re [1952] Ch 499 555
Rosemont Enterprises Ltd v Mercury Industrial Inc (2005) 9
345
BLR (4th) 285 BC SC
Rother Iron Works Ltd v Canterbury Precision Engineering Ltd
421
[1974] 1 QB 1 Eng CA
Rottenburg v Monjack (1992) BCC 688 470
Roundwood Colliery Co, Re [1897] 1 Ch 373 Eng CA 421
Routledge v Mckay [1954 1 All ER 855 Eng CA 392
Rover International Ltd v Canon Film Sales Ltd (No 3) [1987]
77
BCLC 540 Eng CA
Rowe v Sunshine Developers Ltd et al (Unreported) Suit No
9, 323, 324
CLR 095 of 2002 J’ca SC
Royal Bank v Ag-Com Trading Inc (2001) 2 PPSAC (3d) 1 Ont
125, 126
SCJ [Commercial List
Royal Bank v Amatilla Holdings Ltd (1994) 45 ACWS (3d) 859 340
Ont Gen Div
Royal Bank of Canada v Stewart et al (1979) 8 BLR 77 BC SC;
164
affd (1981) 31 BCLR33 BC CA
Royal British Bank v Turquand [1843–60] All ER Rep 435;
10, 109, 125
(1856) 6 E & B 327 Eng Exch Ch
Royal Trust Co v Norrie [1951] 3 DLR 561 BC SC; affirmed
483
(1951) 3 WWR (NS) 503 BC CA
Royal Trust Corp of Canada v Hordo (1993) 10 BLR (2d) 86 Ont
317
Gen Div
Royal Trustco Ltd, Re (1981) 2 OSCB 322C Ont SC; (No.3) 245, 346
(1981) 14 BLR 307 Ont HC
Ruben v Great Fingall Consolidated [1906] AC 439 Eng HL 129, 554
Rudd & Sons Ltd, Re (1986) 2 BCC 98 470
Rylands Glass Co, Re (1905) 49 Sol J 67 471
Sabex Internationale Ltee, Re (1979) 6 BLR 65 Que SC 339, 346, 372
Safarik v Hall (2006) 15 BLR (4th) 321 BC SC 329
Safeguard Industrial Investments Ltd v National Westminster
548
Bank Ltd [1982] 1 All ER 449 Eng CA
68, 69, 86, 88,
Salomon v Salomon & Sons Co Ltd [1897] AC 22 Eng HL;
96, 100, 101,
[1895] 2 Ch 323 Eng Ch D
324
Sanitary Carbon Co, Re [1877] WN 223 297
Santley v Wilde [1899] 2 Ch. 474 410
Sasea Finance Ltd v KPMG [2000] 1 BCLC 236 Eng CA 540
Saul D Harrison and Sons plc, Re [1995] 1 BCLC 14 Eng CA 332, 333, 335
Saunders v United Kingdom (Case 43/1994/490/572) [1997]
162, 345
BCC ECHR; [1997] EHRR 313 ECHR
Savage v Amoco Acquisition Co (1988) 40 BLR 188 Alta CA 511
Schelew v Schelew (2004) 49 BLR (3d) 68 NB QB 319, 327
Schering Chemicals Ltd v Falkman Ltd [1982] QB 1 Eng CA 474
Scott v Robb (2005) 7 BLR (4th) 273 Sask QB 339
Scott v Scott [1943] 1 All ER 582 Eng Ch D 168
Scottish Co-operative Wholesale Society Ltd v Meyer [1959] AC
234, 334
324 Eng HL
Scottish Insurance Corporation v Wilson & Clyde Coal Co
192
[1949] AC 512 Sc HL
Scottish Petroleum Co, Re (1883) 23 Ch D 413 397
Seaboard Offshore Ltd v Sec. of State for Transport [1994] 2 All
104
ER 99 Eng HL
Secretary of State for Trade and Industry v Deverell [2000] 2
202, 203
BCLC 133 Eng CA
Secretary of State for Trade and Industry v Hollier [2007] BCC
11 Eng Ch D 201
Seddon v North Eastern Salt Co [1905] 1 Ch 326 397

Sedgefi eld Steeplechase Co (1927) Ltd, Re, Scotto v Petch [2000]
549
2 BCLC 211 Eng Ch D; affd [2001] BCC 889 Eng CA
Selangor United Rubber Estates Ltd v Craddock (No. 3) [1968] 2
162, 232, 246
All ER 1073; [1968] 1 All ER 1073 Eng Ch D
SG & S Investments (9172) Ltd v Golden Boy Foods Inc (1991) 3
BLR (2d) 80 BC CA, additional reasons at (1991) 84 DLR (4th) 340
751 BC CA
Sharp v Dawes (1876) 2 QBD 26 Eng CA 297
Shaw & Sons Ltd v Shaw [1935] 2 KB 113 Eng CA 168, 313
Shepperd & Cooper Ltd v TSB Bank plc [1996] 2 All ER 751 458
Sherwood Design Services Inc v 872935 Ontario Ltd (1998) 38
74, 78, 82
BLR (2d) 157 Ont CA
Shield Development Co v Snyder [1976] 3 WWR 44 BC SC 327
Shoom (in trust) v Great-West Lifeco Inc (1998) 40 OR (3d) 672
570, 573, 575
Ont SC; affd 42 OR (3d) 732 Ont CA
Short v Treasury Commissioners [1948] AC 534 Eng HL 86
Shuttleworth v Cox Bros & Co (Maidenhead) Ltd [1927] 2 KB 9
491, 492, 494
Eng CA
Sidebottom v Kershaw, Leese & Co Ltd [1920] 1 Ch 154 Eng CA 492, 493
Siebe Gorman & Co Ltd v Barclays Bank Ltd (1979) 2 Lloyd’s 415, 416, 428,
Rep 142 Eng Ch D 429
Silber v BGR Precious Metals Inc (1998) 46 BLR (2d) 75 Ont
367
Gen Div
Skye Resources Ltd and Camskye Holdings Inc, Re (1982) 38 OR
367
(2d) 253; affd (1983) 40 OR (2d) 416 Ont CA
Slogger Automatic Feeder Co Ltd, Re [1915] 1 Ch 478 460
363, 364, 370,
Smeenk v Dexleigh Corp. (1990) 74 OR (2d) 385 Ont HC
371, 372
Smith v Croft (No 2) [1988] Ch 114 Eng Ch D 326
Smith v Paringa Mines Ltd [1906] 2 Ch 193 205
236, 238, 242,
Smith & Fawcett Ltd, Re [1942] Ch 304 Eng CA
547, 549
Smith, Knight & Co, Re, Weston’s Case (1868) 4 Ch App 20 CA 545
Smith, Stone & Knight Ltd v Birmingham Corpn [1939] 4 All
97
ER 116 Eng KBD
Smith Transportation Co, Re (1928) 62 OLR 203 Ont HC 557
Sneath v Valley Gold Ltd [1893] 1 Ch 447 Eng CA 509
Solle v Butcher [1950] 1 KB 671 Eng CA 397
Solmon v Elkind (1976) 3 CPC 31 Ont HC 328
Sopher v Canada [1998] 1 FC 124 270
South Africa Supply & Cold Storage Co Ltd, Re [1904] 2 Ch 268 495
South London Greyhound Racecourses v Wake [1931] 1 Ch 496
129
Eng Ch D
Southard & Co Ltd, Re [1979] 3 All ER 556 Eng CA 98
Southern v Watson [1940] 3 All ER 439 Eng CA 96
Southside Property Management (London) Inc v Sibold Estate
81
(2004) Carswell Ont 1635 CA
Sovereign Life Assurance Co v Dodd [1892] 2QB 573 Eng CA 186
Sparling v Javelin International Ltd (1987) 37 BLR 265 Que SC 172
Spectrum Plus Ltd, Re, National Westminster Bank plc v 414, 415, 416,
Spectrum Plus Ltd [2005] 2 AC 680 Eng HL 418, 428, 429
Springate v Questier [1952] 2 All ER 21 Eng CA 56
Standal’s Patents Ltd v 160088 Can Inc (1993) 53 ACWS (3d)
172, 321, 335
425 Que SC; [1991] 1 RJQ 1996 Que SC
Standard Chartered Bank Ltd v Walker [1982] 2 All ER 938
465
Eng CA
Standard Manufacturing Co v Baird (1984) 5 DLR (4th) 697
513
Nfld TD
Standard Rotary Machine Co Ltd, Re (1906) 95 LT 829; [1903]
Ch 654 123, 428
Stanley, Re [1906] 1 Ch 131 15

Staples v Eastman Photographic Materials Co [1896] 2 Ch 303
193
Eng CA
Stech v Davies [1987] 5 WWR 563 Alta QB 337, 339
Steen v Law [1964] AC 287 PC 164, 166
Stenna Finance BV v Sea Containers Ltd (1989) 39 WIR 83 Ber
587, 588
SC
Stewart’s Case (1866) LR I Ch 574 398
St. Lawernce Starch Co, Re [1972] 1 OR 293 Ont CA 522
St. Michael Uranium Mines Ltd v Rayrock Mines Ltd (1958) 15
132
DLR (2d) 609 Ont CA
Stone & Rolls Ltd v Moore Stephens (A fi rm) [2009] 1 AC 1391
103, 541
Eng HL
Stoneleigh Finance Ltd v Phillips [1965] 2 QB 537 Eng CA 413
Stothers v William Steward (Holdings) Ltd [1994] 2 BCLC 266 547
Strachan v MacCosham Administrative Services Ltd (1986) 46
463
Alta LR (2d) 146 Alta QB
Such v RW-LB Holdings Ltd (1993) 11 BLR (2d) 122 Alta QB 334, 335, 339
Sunrose Construction (Dixie) Ltd v Don-Com Venture Capital
302
Corp (1983) 24 BLR 192 Ont Co Ct
Supply of Ready Mixed Concrete, Re (No 2) [1995] 1 AC 456 HL 106
Szecket v Huang (1998) 168 DLR (4th) 402 Ont CA; (1998) 42
75, 77, 84
BLR (2d) 1 Ont CA
T Eaton Co, Re (1999) 15 CBR (4th) 311 Ont SCJ [Commercial
513
List]
Tatung (UK) Ltd v Galex Telesure Ltd [1988] 5 BCC 325 Eng
427
QBD
Teck Corp Ltd v Millar [1973] 33 DLR (3d) 288 BC SC 206, 245, 588
Tesari Holdings Ltd v Pizza Pizza Ltd (1987) 5 ACWS (3d) 430
Ont HC 339
Tesco Stores Ltd v Brent London Borough Council [1993] 2 All

106
ER 718 Eng CA
Tesco Supermarkets Ltd v Nattrass [1972] AC 153 Eng HL 104, 106
Tewkesbury Gas Co, Re, Tysoc v Tewkesbury Gas Co [1911] 2
392, 457
Ch 279, affd [1912] 1 Ch 1 Eng CA
The Australasian Temperance and General Mutual Life
89
Assurance Society Ltd v Howe 31 CLR 290
The Queen v Cognos (1993) 1 SCR 395
The Queen v Consolidated Churchill Ltd (1978) 90 DLR (3d) 357 423
Thomas Gerrard & Son Ltd, Re [1967] 2 All ER 525 540
Thompson, Re [1930] 1 Ch 203 263
Thorby v Goldberg (1964) 112 CLR 597 HCA 247
Tillotson Ltd v IRC [1933] 1 KB 134, Eng CA 136
Title Estate v Harris (1990) 67 DLR (4th) 619 Ont HC 328, 329
Tongue v Vencap Equities Alta Ltd (1996) 39 Alta LR (3d) 29
478
Alta CA
Toronto Dominion Bank v Fortin [1978] 85 DLR (3d) 111 BC
463
SC
Torzillu Pty Ltd v Byrnac Pty Ltd (1983) 8 ACLR 52 420
Town Topics Co, Re (1911) 20 Man 574 Man KB 345
Toyota Canada Inc v Imperial Richmond Holdings Ltd [1997] 15
54 Alta LR 183
151, 152, 153,
Trevor v Whitworth (1887) 12 App Cas 409 Eng HL
154, 155, 162
Tricentennial Corporation Ltd v Federal Commissioner of
419
Taxation (1988) 1 Qd R 474
Trizec Corp, Re [1994] 10 WWR 127 Alta QB 511, 513
Trustee of 633746 Ont Inc v Salvati (1990) 73 OR (2d) 774 Ont
172
SC
Trustor AB v Smallbone [2001] BCLC 436 Eng Ch D 93, 95, 100
Tse Kwong Lam v Wong Chit Sen [1983] 3 All ER 54 PC 465
Tudor Grange Holdings Ltd. v Citibank N.A [1992] Ch 53 Eng
462
Ch D
Tudor Heights Ltd. v United Dominion Corp. Finance Ltd
415
[1977] 1 NZLR 532 NZ HC
Twycross v Grant (1877) 2 CPD 469 Eng CA 66
Tyrell v Bank of London (1862) 10 HLC 26 69
UCB Corporate Services Ltd v Thomason [2005] 1 All ER
396
(Comm) 601
Ultramar Canada Inc v Montreal Pipeline Ltd (1990) 49 BLR
245, 363, 371,
279 Ont HC; (1990) 74 OR (2d) 136 Ont HC; additional reasons
469
at (1990) 75 OR (2d) 184 Ont Gen Div
Union Enterprise Ltd, Re (1985) 29 BLR 128 (Director of the
188
Ontario Business Corporations Act)
Unisource Canada Inc v Hongkong Bank of Canada (1998) 43
175, 176, 178
BLR (2d) 226 Ont Gen Div; varied (2000) 131 OAC 24 Ont CA
Uruguay Central and Hugueritas Ry Co of Monte Video, Re
436
[1879] 11 Ch D 372
Uxbridge Building Society v Pickard [1939] 2 KB 248 Eng CA 130, 554
Vacation Brokers Inc. v Penney (1998) 82 ACWS (3d) 62 (Ont.
82
Gen. Div)
Vallée v Pickard (2007) 28 BLR (4th) 149 Ont SCJ 339
Varity Corp v Jesuits Fathers of Upper Canada (1987) 41 DLR 294
(4th) 384 Ont CA
Vedova v Garden House Inn Ltd (1985) 29 BLR 236 Ont HC 318, 329
Verdun v Toronto Dominion Bank [1996] 3 SCR 550 SCC 292
Verner v General and Commercial Investment Trust [1894] 2
151, 170
Ch 239 Eng CA
Vilamar SA v Sparling [1987] RJR 2186 Que SC 340
W & M Roith Ltd, Re [1967] 1All ER 427 Eng Ch D 112, 236
Wade v Kendrick (1905) 37 SCR 32 SCC 254
Waitomo Wools (NZ) Ltd v Nelsons (NZ) Ltd [1974] 1 NZLR
484 408
Waldhof-Aschaffenburg AG [1975] AC 591 Eng HL 453

Walker v Betts (2006) 20 BLR (4th) 152 BC SC 339
Walker v Wimborne (1976) 50 ALJR 446 241
Walker’s Settlement, Re [1935] 1 Ch 567 Eng CA 495, 496
Wallersteiner v Moir [1974] 3 All ER 217 Eng CA 97
Wallinder v Target Tunnelling Ltd (1988) 62 Alta LR (2d) 125
157
Alta QB
Walton v Mascoll (1844) 13 M&W 452 457
Watkin v Open Window Bakery Ltd (1996) 26 BLR (2d) 301
Ont Gen Div [Commercial List]; (1996) 28 OR (3d) 441 Ont Div 293, 338
Ct
Watkinson v Hollington [1944] KB 16 453
Waxman v Waxman (2004) 44 BLR (3d) 165 Ont CA 338
Webb v Earle (1875) LR 20 Eq 556 193
Welch v Bowater (Ireland) Ltd [1980] IR 251 428
Weldtech Equipment, Re [1991] BCLC 393 412
Welfab Engineers Ltd, Re [1990] BCLC 833 Eng Ch D 242
Welton v Saffery [1897] AC 299 Eng HL 60
West v Edson Packing Machinery Ltd (1993) 16 OR (3d) 24 Ont
316, 320
Gen Div
West Humber Apartments Ltd, Re (1968) 2 DLR (3d) 110 Ont
510
HC
West Mercia Safetywear Ltd v Dodd [1988] BCLC 250 Eng CA 241
Westburn Sugar Refi neries v IRC [1960] TR 105 IH (I Div) 170
Westcom Radio Group Ltd v MacIsaac (1989) 63 DLR (4th) 433
77, 78
Ont Div Ct
Westfair Foods Ltd v Watt (1991) 5 BLR (2d) 160 Alta CA;
330, 366
(1992) 94 DLR (4th) 733 Alta CA
Westmin Resources Ltd v Hamilton [1991] 3 WWR 716 BC SC 367, 368
Westminster Corp v Haste [1950] Ch 442 470
Westminster Bank v Residential Properties Improvement Co Ltd
420
[1938] Ch 639
Whitehorse Copper Mines Ltd, Re (1980) 10 BLR 135 BC SC 365
Wilkinson v Todays Carpets Ltd 2000 Carswell BC 2090 BC SC 339
Will v United Lankat Co Ltd [1914] AC 11 Eng HL 192
William Gaskell Group Ltd v Highley [1994] BCLC 197 421
Wilson v Conley (1990) 1 BLR (2d) 220 Ont Gen Div 342
Wilson v Kelland [1910] 2 Ch 306 Eng Ch D 123, 428
Wimpey & Co Ltd v BOAC [1955] AC 169 Eng HL 169
Winchell v Del Zrotto (1976) 1 CPC 338 Ont HC 327
Windows Ltd v Win-Doors Ltd (Unreported) (Supreme Court of
52, 56
Jamaica Suit No. EW 170 of 1984)
Windsor Refrigerator Co Ltd v Branch Nominees Ltd [1961] 1
456, 457
Ch 375 Eng CA
Winifred Enterprise Ltd v Barbados Development Bank (1990)
459, 461
25 B’dos LR 78 B’dos CA
Wise v USDAW [1966] ICR 691 62
Wolfedale Electric Ltd v RPM’s Systems Automation & Design
77
Qualify in Motion Inc (2004) 47 BLR (3d) 1 Ont SCJ
Wonsch (Litigation Guardian of) v Wonsch (2007) Carswell
332
Ont 3914 Ont CA
Wood v Odessa Waterworks Co (1889) 42 Ch D 636 Eng Ch D 60, 61
Woodford v Smith [1970] 1 WLR 806 301
Woodroff’s (Musical Instruments) Ltd, Re [1986] Ch 366 Eng Ch
421
D
Woolfson v Strathclyde Regional Council (1978) SLT 159; (1978)
93, 100
SC (HL) 90 SC HL
Working Ventures Canadian Fund Inc v Angoss Software Corp
2000 Carswell Ont 4554 Ont SCJ [Commercial List] aff’d 2001 339
Carswell Ont 2752 Ont CA
Wragg Ltd, Re [1897] 1 Ch 796 Eng CA 145
Wright v Donald S Montgomery Holdings Ltd (1998) 39 BLR
316, 341
(2d) 266 Ont Gen Div
Wright v Horton (1887) 12 App Cas 371 Eng HL 433
Wright v Peartree Software Inc (1997) 76 ACWS (3d) 308 Ont
339
Gen Div
Yordanes v Bank of Nova Scotia (2006) 78 OR (3d) 590 Ont SCJ 15
Yorkshire Woolcombers Association Ltd, Re [1903] 2 Ch 284
414
Eng CA
Young v Ladies’ Imperial Club Ltd [1920] 2 KB 523 Eng CA 225
Yourell v Hibernia Bank Ltd [1918] AC 372 Eng HL 469
Yukong Line Ltd v Rendsburg Investments Corp of Liberia
235
[1998] 1 WLR 294 Eng QBD (Comm)
Yustin Construction Ltd, Re (1986) 57 CBR (NS) 320 Ont SC 497, 498
Zurich Insurance Co and Troy Woodworking Ltd, Re (1984) 45
456
OR (2d) 343
Zysko v Thorarinson (2003) 42 BLR (3d) 75 Alta QB 252
347883 Alberta Ltd v Producers Pipelines Ltd (1991) 3 BLR (2d)
245, 588, 589
237 Sask CA; (1991) 4 WWR 577 Sask CA
719946 Alberta Ltd v Alberta’s BEST Inc (2005) 10 BLR (4th) 56
340
Alta QB
781952 Alberta Ltd v 781944 Alberta Ltd (2003) 40 BLR (3d) 278
Alta SC 339
820099 Ont Inc v Harold E Ballard Ltd (1991) 3 BLR (2d) 113
205, 234, 339
Ont Gen Div
1080409 Ontario Ltd v Hunter (2000) 50 OR (3d) 145 Ont SCJ 71, 74, 77
1184760 Alberta Ltd v Falconbridge Ltd (2006) 20 BLR (4th) 6
497
Ont SCJ
1394918 Ontario Ltd v 1310210 Ontario Inc (2002) 57 OR (3d) 71, 74, 78, 83,
607 Ont CA 85
Table of Statutes
Anguilla
5, 11, 13, 15, 18–21, 23–25, 37, 44, 45, 47–50, 52, 53, 55, 63,
65, 91, 92, 119, 120, 131, 137, 138, 143, 150, 152, 153,
155–157, 163, 164, 168, 172, 173, 180, 182, 186, 195, 201, 203,
205–208, 215, 217, 218, 220–226, 228, 230, 237, 265, 273–277,
Companies Act
280, 281, 284, 286–292, 295–300, 308, 309, 315, 319, 323, 327,
1994
330, 331, 333, 340, 342, 344, 347, 354–356, 374–376, 382, 383,
389, 398–403, 407, 435–438, 440–444, 447, 451–454, 483–486,
488, 515–518, 522–526, 528, 530, 532–537, 540, 543–546, 551,
554, 556, 557, 562
Pt 2, Div 1 39
Pt 2, Div 3 133, 182
Pt 2, Div 8 483
s 1 15, 18, 25, 39, 76, 77, 125, 200, 227, 317, 435
s 2 182
s 2(a) 187
s 2(2), (3) 90
s 4(1) 381
s 4(2) 382
s 5(1) 39, 44, 45, 90, 297
s 5(2) 44
s 5(2)(a)–(c) 44
s 6(1) 117
s 6(b), (c) 24
s 7 46, 117
s 7(1) 46, 49
s 7(1)(a), (b) 47
s 7(1)(c), (d) 48
s 7(1)(e) 47, 133, 134, 484
s 7(1)(e)(i) 47
s 7(1)(e)(ii), (f) 48
s 7(1)(g) 49, 209, 213
s 7(1)(g)(i), (ii) 49
s 7(1)(h) 49, 486
s 7(1)(i), (ii) 48
s 7(2) 46, 49, 486
s 8 40
s 9 40, 42, 43
s 10 43
ss 11–15 52
s 11(1) 56
s 12(a), (b) 53
s 13 56
s 13(a) 56
s 14(1)–(3) 57
s 16 71, 74, 78, 79
s 16(1) 75–78, 80, 85
s 16(2) 75, 77, 81–83, 85
s 16(3) 83
s 16(3)(a), (b) 83
s 16(4) 83, 84
s 16(5) 75, 77, 84, 85
ss 17–25 108
s 17 109, 110, 119
s 17(1) 41, 116, 117
s 17(2) 116, 117
s 17(3) 117
s 17(4)(a), (b) 118
s 18 109
s 18(a), (b) 118
s 19 109, 110, 118, 119
s 20 122, 123, 429
s 21 122, 124–127
s 21(a), (b) 130, 131
s 21(c) 131
s 21(d) 128, 129
s 21(e) 129, 130
s 21(f) 130
ss 28–58 132
s 28(1) 182–184, 545
s 28(2) 137, 138
s 28(5) 140
s 29 186, 189, 190
s 29(a)–(c) 186
s 30 185, 187, 188
s 30(a) 185, 187, 192, 193
s 30(b) 187, 188
s 31(1) 91, 136
s 32(1) 144
s 32(1)(a) 144
s 32(1)(b) 144–146
s 32(2) 146
s 32(3) 145, 146
s 33(1) 147
s 33(2), (3) 148
s 33(4) 148
s 33(5) 148
s 33(6)(a) 148, 148
s 33(6)(b), (c) 149
s 33(7)(a), (b) 149
s 35(1) 187, 188
s 35(4)–(6) 188
s 36 142
s 36(1) 142
s 36(2), (3) 143
s 36(3)(a)–(c) 143
s 37(1) 143
s 37(2) 143
s 38 143, 144
s 39(1) 152, 153, 155
s 39(2) 153
s 39(2)(a), (b) 153
s 39(3), (4) 153
s 40 152, 155
s 40(2) 155
s 40(2)(a), (b) 155
s 41 155, 156
s 41(1)(a), (b) 156
s 41(1)(c) 157
s 41(2)(a), (b) 157
s 42(1) 158, 190
s 42(2) 158, 159
s 43 161
s 45 175
s 45(1) 175, 179
s 45(1)(a)–(c) 175
s 45(2), (3) 176
s 45(3)(a) 176
s 45(3)(b) 177
s 45(4), (5) 176, 177
s 45(5)(a) 177
s 45(5)(b) 178
s 45(6) 176, 178
s 46(1)–(3) 179
s 46(4)(a), (b) 180
ss 47, 48 180
s 50 157
s 50(1), (2) 157
s 50(3)(a), (b) 157
s 51 180
s 52 167, 172, 174
s 52(a), (b) 172
s 53 167
s 53(1), (2) 173, 174
s 53(3) 174
ss 54–56 162
s 54 124, 130, 163
s 54(1), (2) 163
s 54(2)(a), (b) 163
s 55 163
s 55(a)–(d) 165
s 55(e)(i)–(iii) 165
s 56 164
s 58(1) 556
s 58(2) 556
s 59(1) 119, 203, 205, 228
s 59(1)(a) 200, 268
s 59(1)(b) 167, 168, 200
s 59(2) 228, 229
s 59(3) 229
s 59(3)(a)–(e) 229
s 60 18, 209
s 61 119, 206
s 63(1)–(4) 207
s 64 224
s 64(1)(a), (b) 224
s 64(2) 224
s 65(1) 210
s 65(2) 211
s 66(1) 211
s 66(1)(a), (b) 211
s 66(2)–(4) 211
s 67 212
s 68 124, 215
s 68(1) 46, 50
s 68(2) 46, 214
s 68(3) 46, 201, 214, 215, 217, 220, 282, 284
s 68(4)–(6) 215, 220
s 68(7), (8) 216
s 69(1) 203
s 69(2) 203
s 70 209, 217
s 70(a) 209, 217
s 70(b)–(e) 218
s 70(h) 210
s 71 220
s 72 221
s 72(1) 222
s 72(1)(a), (b) 221
s 72(2), (3) 222
s 73(1), (2) 222

s 73(3), (4) 223
s 74(1), (2) 218
s 74(3)(a), (b) 219
s 74(4)(a), (b) 219
s 74(5) 219, 220
s 75 209
s 76 124
s 77 225
s 77(1) 224
s 77(2) 225
s 78(2) 225
s 78(1) 224
s 79 225
s 80(a) 226
s 80(1), (2) 226
s 82(1), (2) 208
s 82(2)(a)–(c) 208
s 82(2)(d) 167, 208
s 82(2)(e) 820
s 82(2)(f)–(h) 208
s 83 201, 219, 228
s 84(1) 226
s 84(1)(b) 226
s 84(2) 227
ss 85–86 178, 180
s 85 178, 273
s 86 274
s 86(a)–(d) 179, 273, 274
s 86(e) 178
s 87 275
s 88(1), (2) 274
s 88(2)(a)–(c) 274
s 89 274
s 90 275
s 91(1) 249, 251, 253, 257
s 91(1)(a), (b) 252
s 91(2)(a)–(d) 253
s 91(3)(a)–(c) 253
s 91(4), (5) 254
s 91(5)(a)–(e) 254
s 92 255
s 93 251, 255
s 94 256
s 96(1)(b) 437
s 97 257
s 97(1) 234, 235, 242, 245–247, 257
s 97(1)(a) 231–233, 236, 588, 589
s 97(1)(b) 265–267, 270
s 97(2) 234, 236–240, 257
s 97(3) 234, 237, 257
s 97(4) 265, 271
s 97(5) 120
s 97(6) 277
s 98 275
s 98(1) 275, 276
s 98(1)(a)–(c) 276
s 98(2) 276
s 98(3)(a), (b) 276
s 98(4)(a), (b) 277
s 99–101 278
s 99(1) 278
s 99(2)(a) 278
s 99(2)(b) 279
s 100 279
s 100(a)–(c) 280
s 101 280
s 102 280, 281
s 103 278
s 103(1)–(3) 280
s 104 221
s 105(1)–(3) 289
s 106(1) 282, 283
s 106(1)(a) 283
s 106(1)(b) 286
s 107(2) 290
s 108(a)(i), (ii) 291
s 109 290
s 110(1) 290
s 110(1)(a)–(c) 290
s 110(2)–(4) 291
s 111 284
s 111(1) 284
s 113(1) 295, 296
s 113(1)(b)(i),
296
(ii)
s 113(2) 296
s 113(3)(a), (b) 296
s 113(4) 296
s 114 296
s 114(a), (b) 296
s 115(1), (2) 297
s 115(3) 298
s 115(4) 297
s 116 217, 299
s 117(1), (2) 300
s 118 300
s 119(1), (2) 299
s 120(1) 308
s 120(1)(a), (b) 308
s 120(2) 308
s 121 286
s 121(1) 121, 286
s 121(2), (3) 286
s 121(3)(a)–(c) 287
s 121(4) 287
s 123 308
s 124 309
s 124(1) 310
s 124(2) 310, 313
s 124(3) 310
s 124(4) 314
s 125 124, 130
s 128(1) 517
s 128(1)(a) 284, 517, 518
s 128(1)(a)(i),
518
(ii)
s 128(1)(b) 284, 517, 522
s 128(1)(c) 517, 522
s 128(2), (3) 518
s 129 522
s 129(2) 217
s 130(1) 91
s 130(1), (2) 524
s 130(3), (4) 525
s 131(1), (2) 523
s 132(1) 523
s 133(1) 525, 526
s 133(2) 525
s 133(3)(a), (b) 526
s 133(4) 526
s 134(1) 530
s 135(1) 533
s 135(1)(a), (b) 530, 532
s 135(2), (3) 530, 533
s 136(1)–(3) 533
ss 137–148 300
s 137(1) 282
s 137(1) 527, 528, 530
s 137(2), (3) 529
s 138(1)(a) 533
s 138(1)(b) 534
s 138(2) 534
s 139(2) 534
s 140(1)–(4) 534
ss 141, 142 535
s 144(1), (2) 536
s 145(1) 527, 535, 540
s 145(2), (4) 540
s 146 537
s 146(1), (2) 537
s 147 308
s 147(1)–(3) 538
s 148 544
s 149(1)–(3) 557
s 152 124
s 152(1) 563
s 152(1)(a) 58, 206, 563
s 152(1)(c) 563
s 152(1)(d) 557
s 154(1), (2) 516
s 154(3) 517
s 161(1) 484
s 161(1)(a),)(b) 484
s 161(1)(c)–( j) 485
s 161(1)(k) 485, 486
s 161(1)(l), (m) 486
s 161(2), (3) 486
s 162(1) 194
s 162(1)(c)–(f) 194
s 162(1)(g)–( j) 195
s 163(1), (3), (4) 488
s 163(5)(a), (b) 488
s 173(1)–(3) 443
s 173(3)(a)–(c) 443
s 174 438
s 174(1) 438
s 174(1)(a)–(d) 439
s 174(2) 439
s 174(2)(a), (b) 439
s 175 440, 442
s 177 440
s 177(1) 437, 440
s 177(1)(a) 440
s 177(1)(b) 440, 441
s 177(1)(c)–(f) 441
s 177(1)(h) 438, 441
s 177(1)(i), ( j),
441
(l), (m)
s 177(2) 442
s 181(i) 376
s 182(a) 390
s 184 399
s 184(1) 399–401
s 184(1)(a)–(d) 401
s 184(2)(a)–(c) 402
s 184(2)(d)(i)–
402
(iii)
s 184(3) 403
s 184(3)(a), (b) 403
s 186 20
s 186(1) 19, 20, 92
s 186(2) 20
s 187(1)(a) 92
ss 244–248 52
s 244 52
s 246 53, 55
s 246(a) 53, 55
s 246(a)(i), (ii) 53, 55
s 246(a)(iii) 55
s 246(b) 53
s 246(b)(i)–(iv) 55
s 246(c)–(e) 54, 55
s 246(f) 54
ss 249–258 344
ss 249–255 344
s 250(1), (2) 346
s 250(2)(a)–(d) 346
s 250(3) 347
s 250(4), (5) 348
s 251(1) 347
s 251(1)(a)–(l) 347
s 252(1), (2) 348
s 253(1), (2) 348
ss 254, 255 348
ss 256–258 344
s 256(1) 354
s 258 354
ss 259–261 315
s 259(b)(i) 239
s 259(b)(iv) 240
s 260 59, 344, 354, 355
s 260(3)(a), (h) 121
ss 261–264 315
s 261 323, 324, 327
s 261(1), (2) 328
s 261(2)(a), (b) 328
s 261(2)(b) 329
s 262(1) 342
s 263 323, 329
s 263(a), (b) 329
s 263(c), (d) 330
s 264 342
s 266 239, 240, 315, 330, 331
s 266(2) 334
s 266(2)(a) 339
s 266(2)(b) 340
s 266(2)(d), (e) 339
s 266(2)(f) 340, 344
s 266(2)(g) 340
s 266(3) 337
ss 277–288 37
s 277 64
s 277(1)(a) 64
s 279 63
s 290 438
s 410(1) 40
Foreign
Jurisdiction Act
RSA 2000 C.
F 50 33
Securities Act
2001 IRSA Cap
s 13 374, 473, 569
Antigua and
Barbuda
Companies Act
1885 19 & 20 Vict. 3
c. 47
5, 13, 15, 18, 19, 24, 25, 37, 44, 45, 53, 55, 63, 65, 76, 77, 91, 92,
119, 120, 131, 137, 138, 143, 150, 152, 153, 155–157, 163, 164,
168, 172, 173, 180, 182, 195, 201, 203, 205–208, 215–218,
220–228, 230, 237, 265, 273–277, 280, 281, 284, 286–292,
Companies Act 295–303, 307–309, 315, 316, 318–320, 323, 327, 330, 331, 333,
1995 340–342, 344, 347, 354–357, 359, 362, 363, 366–371, 374–380,
382, 383, 385–393, 396, 398–410, 412, 423, 427, 429–445, 447,
448, 451–456, 458–470, 472, 473, 475–477, 483–489, 494, 496,
499–501, 503, 507–513, 515–518, 522–526, 528–537, 540,
543–547, 550–554, 556–566, 568–572, 575, 589
Pt I, Div A 39
Pt I, Div C 133, 182
Pt I Div I 545
Pt I Div J 569
Pt I Div K 483
s 3 39
s 4(1) 39, 44, 45, 90, 117, 297
s 4(2) 44
s 4(2)(a)–(c) 44
s 4(3) 51
s 5 46, 117
s 5(1) 46, 49
s 5(1)(a) 47
s 5(1)(b) 47, 133, 134, 484
s 5(1)(b)(i) 47
s 5(1)(b)(ii) 48
s 5(1)(c) 48
s 5(1)(d) 49, 209
s 5(1)(e) 49, 118, 486
s 5(2) 46, 49, 486
s 7 46
s 8 40, 42, 43
s 9 43
ss 10–15 52
s 10(1 56
s 11(a), (b) 53
s 12 56
s 12(a), (b) 56
s 14 57
s 15(1), (2) 57
s 16 71, 79
s 16(1) 80
s 16(2) 71
s 16(4) 71, 84
s 16(5) 71
ss 17–25 108
s 17 109, 110, 119
s 17(1) 41, 116, 117
s 17(2) 116, 117
s 17(3) 117
s 17(4)(a), (b) 118
s 18 109
s 18(1) 118
s 19 109, 110, 118, 119
s 20 122, 123, 429
s 21 122, 124–127
s 21(a) 130, 131
s 21(b) 130, 131
s 21(c) 131
s 21(d) 128, 129
s 21(e) 129, 130
s 21(f) 130
ss 26–57 132
s 26(1) 182–184, 545
s 26(2) 137, 138
s 27 186, 189, 190
s 27(a)–(c) 186
s 28 185, 187, 188
s 28(a) 185, 187, 192, 193
s 28(b) 187, 188
s 29(1) 91, 136
s 29(2) 140
s 30(1) 144
s 30(1)(a) 144
s 30(1)(b) 144–146
s 30(2) 146
s 30(3) 145, 146
s 31(1) 147
s 31(2)–(5) 148
s 31(6)(a) 148, 149
s 31(6)(b), (c) 149
s 31(7)(a), (b) 149
s 33(1), (4)–(6) 188
s 34 142
s 34(1) 142, 143
s 34(2) 143
s 34(2)(a)–(c) 143
s 35(1), (2) 143
s 36 143, 144
s 37(1) 152, 153, 155
s 37(2) 153
s 37(2)(a), (b) 153
s 38(1), (2) 153
s 39 152, 155
s 39(2) 155
s 39(2)(a), (b) 155
s 40 155, 156
s 40(1)(a), (b) 156
s 40(1)(c) 157
s 40(2)(a), (b) 157
s 41(1) 158, 190
s 41(2) 158, 159
s 42 161
s 44 175
s 44(1) 175, 179
s 44(1)(a)–(c) 175
s 44(2), (3) 176
s 44(3)(a) 176
s 44(3)(b) 177
s 44(4), (5) 176, 177
s 44(5)(a) 177
s 44(5)(b) 178
s 44(6) 176, 178
s 45(1)–(3) 179
s 45(4)(a), (b) 180
ss 46, 47 180
s 49 157
s 49(1), (2) 157
s 49(3)(a), (b) 157
s 50 180
s 51 167, 172, 174
s 51(a), (b) 172
s 52 167
s 52(1), (2) 173, 174
s 52(3) 174
ss 53–55 162
s 53 124, 130, 163
s 53(1), (2) 163
s 53(2)(a), (b) 163
s 54 163
s 54(a) 164
s 54(b)–(d) 165
s 54(e)(i)–(iii) 165
s 55 164
s 57(1), (2) 556
s 58(1) 119, 203, 205, 228
s 58(1)(a) 200, 268
s 58(1)(b) 167, 168, 200
s 59 228
s 59(2) 228
s 60 228
s 60(1) 229
s 61 228
s 61(1), (2) 229
s 61(2)(a)–(e) 229
s 62(1) 18, 209
s 63 119, 206
s 64(1) 207
s 64(2)–(4) 207
s 65 224
s 65(1), (2) 224
s 66(1) 210
s 66(2) 211
s 66(3) 201
s 67(1) 211
s 67(1)(a), (b) 211
s 67(2)–(4) 211
s 68 212
s 69 124, 215, 502
s 69(1) 46, 50, 213
s 69(2) 46, 214
s 69(3) 46, 214, 215, 217, 220, 282, 284
s 69(4)–(6) 215, 220
s 69(7), (8) 216
s 70(1), (2) 203
s 71 209, 217
s 71(a) 209, 217
s 71(b)–(e) 218
s 71(h) 210
s 72 220
s 73 221
s 73(1) 222
s 73(1)(a), (b) 221
s 73(2), (3) 222
s 74(1), (2) 222
s 74(3) 223
s 74(3)(a), (b) 219
s 74(4) 223
s 74(4)(a), (b) 219
s 75(1), (2) 218
s 75(5) 219, 220
s 76 209
s 77 124
s 78 225
s 78(1) 224
s 78(2) 225
s 79(1) 224
s 79(2) 225
s 80 225
s 81(1), (2) 226
s 82(1), (2) 208
s 82(2)(a) 167, 208
s 82(2)(b)–(i) 208
s 83 201, 219, 228
s 84 226
s 84(1) 226
s 84(1)(b) 226
s 84(2) 227
ss 85–86 178, 180
s 85 178, 273
s 86 274
s 86(a)–(d) 179, 273, 274
s 86(e) 178, 274
s 87 275
s 88(1), (2) 274
s 88(2)(a)–(c) 274
s 89 274
s 90 275
s 91(1) 249, 251, 253, 257
s 91(1)(a), (b) 252
s 91(2)(a)–(d) 253
s 91(3)(a)–(c) 253
s 91(4), (5) 254
s 91(5)(a)–(e) 254
s 92 255
s 93 251, 255
s 94 256
s 95(a)–(c) 228
s 96(1)(b) 437
s 97 257
s 97(1) 234, 235, 242, 245–247, 257
s 97(1)(a) 231–233, 236, 588, 589
s 97(1)(b) 266, 267, 270
s 97(2) 234, 236–240, 257
s 97(3) 234, 237, 257
s 97(4) 265, 271
s 97(5) 120
s 97(6) 277
s 98 275
s 98(1) 275, 276
s 98(1)(a)–(c) 276
s 98(2) 276
s 98(3)(a), (b) 276
s 98(4)(a), (b) 277
s 99–101 278
s 99(1) 278
s 99(2)(a) 278
s 99(2)(b) 279
s 100 279
s 100(a)–(c) 280
s 101 280
s 102 280, 281
s 103 278
s 103(1)–(3) 280
s 104 221
s 105(4)–(6) 289
s 106 289
s 107 282, 283, 462
s 107(a) 283
s 107(b) 286
s 108(2) 290
s 109(a)(i), (ii) 291
s 110 290
s 111 500
s 111(1) 290
s 111(1)(a)–(c) 290
s 111(2)–(4) 291
s 112 284
s 112(1) 284
ss 114–122 292
s 114 487
s 114(a), (b) 292
s 115 216
s 115(1), (2) 293
s 116 216, 294
s 116(a), (b) 294
s 117 293
s 117(a) 216, 293
s 117(b)–(e) 293
s 118 294
s 119 294
s 120 295
s 121 293
s 122 294, 295
s 123(1) 295, 296
s 123(1)(a) 296
s 123(1)(b)(i),
296
(ii)
s 123(2) 296
s 123(3)(a), (b) 296
s 123(4) 296
s 124 52, 296
s 124(a), (b) 296
s 125(1), (2) 297
s 125(3) 298
s 125(4) 297
s 126 217, 299
s 127(1), (2) 300
s 128 300
s 129(1) 217, 299

s 129(2) 299
s 130(1) 308
s 130(1)(a), (b) 308
s 130(2) 308
s 131(1) 121, 286
s 131(2), (3) 286
s 131(3)(a) 286
s 131(3)(b), (c) 287
s 131(4)–(6) 287
s 132(1) 287
s 132(1)(a)(i),
287
(ii)
s 132(1)(c) 287
s 132(2), (3) 288
s 134 308
s 135 309
s 135(1) 310
s 135(2) 310, 313
s 135(3) 310
s 135(4) 314
s 136 124, 130
s 137(1)(a), (b) 301
s 137(1)(c) 307
s 137(1)(d) 303
s 137(1)(d)(i)–
303
(iii)
s 137(1)(d)(iv) 304
s 137(1)(e) 304
s 137(2)(a)–(d) 304
s 138(1)–(3) 302
s 139 302
s 139(a) 302
s 139(a)(i), (ii) 302
s 139(b) 302
s 140(1), (2) 303
s 141(1) 304
s 141(2) 18
s 142 305
s 142(a), (b) 305
ss 143, 144 305
s 145 308
s 145(1) 306
s 145(1)(a), (b) 306
s 145(2)(a)–(c) 306
ss 146–147 307
s 146(1) 307
s 146(1)(a), (b) 307
s 146(2)–(6) 307
s 148(1) 306
s 148(1)(a), (b) 306
s 148(2) 306
s 148(2)(a)–(c) 306
s 148(3) 306
s 149 462
s 149(1) 517
s 149(1)(a) 284, 517, 518
s 149(1)(a)(i),
518
(ii)
s 149(1)(b) 284, 517, 522
s 149(1)(c) 517, 522
s 149(2), (3) 518
s 150 522
s 151(1) 91, 524
s 151(2) 524
s 151(3), (4) 525
s 152 462
s 152(1), (2) 523
s 153(1) 523
s 153(2), (3) 524
s 153(4)(a)–(c) 524
s 153(4)(d)(i)–
524
(iii)
s 154(1) 18, 19, 525
s 154(1)(a) 525, 526
s 154(2), (3) 525
s 154(4)(a), (b) 526
s 154(5) 526
s 156(1) 526
s 156(2) 527
s 156(3) 526
s 156(4) 527
s 156(5) 527
s 157 528
s 158(1) 530
s 158(1)(a), (b) 530
s 158(2), (3) 530
s 160(1) 533
s 160(1)(a), (b) 532
s 160(2), (3) 533
s 161(1)–(4) 533
s 162(1) 282, 527, 528
s 162(2), (3) 529
s 163 529
s 163(1) 18, 527, 529
s 163(2), (3) 527, 529
s 164(1)(a) 533
s 164(1)(b) 534
s 164(2) 534
s 165(2) 534
s 166(1)–(4) 534
s 167(1), (2) 535
s 168 535
s 170(1), (2) 536
s 171(1) 527, 535, 540
s 171(2), (4) 540
s 172 434, 537
s 172(1), (2) 434, 537
s 172(3) 434
s 173(1)–(3) 538
s 174 544
s 175(1)–(2) 557
s 176 124, 502
s 176(1) 50, 557
s 176(2) 557
s 177(1) 563
s 177(1)(a) 58, 206, 563
s 177(1)(b), (c) 563
s 177(2) 557
s 177(2)(a)–(c) 558
s 177(3) 559, 560
s 177(4) 558, 561
s 177(4)(a)–(f) 558
s 177(5) 559
s 177(6) 562
s 178(1) 559
s 178(1)(a)–(c) 559
s 178(2), (3) 559
s 178(3)(a)–(c) 560
s 178(5) 559
s 179(1) 560
s 179(2)(a)–(d) 560
s 179(3)(a)–(c) 560
s 179(3)(d) 561
s 179(4)–(8) 561
s 180(2) 561
s 180(2)(a), (b) 561
s 181(1) 561, 562
s 181(2) 562
s 182(2), (3) 562
s 183(1), (2) 562
s 184(1) 562
s 184(1)(a), (b) 562
s 186(1)(a), (b) 563
s 186(2) 563, 564
s 186(3)–(5) 563
s 187(1), (2) 516, 564
s 187(3) 517, 564
s 188(a), (b) 564
s 189 565
s 190(1), (2) 565
s 191(1) 566, 567
s 191(1)(a)–(c) 567
s 191(2), (3) 567
s 191(3)(a), (b) 567
s 191(4)(a)–(c) 566
s 191(5) 566
ss 192, 193 567
s 193(a)–(c) 567
s 195(1) 545, 546, 550
s 195(2) 550
s 195(3) 551
s 195(4)(a), (b) 551
s 195(5)–(7) 551
s 196(1)–(3) 546
s 197 552
s 197(1), (2) 552
s 197(3)(a), (b) 552
s 197(4), (5) 553
s 197(6)(a) 552
s 197(6)(b) 553
s 198 552
s 198(1)–(3) 553
s 199 555
s 199(1)–(3) 555
s 200(1)–(3) 554
s 201(a) 570
s 201(b) 571, 572
s 201(f) 571
s 201(f)(i), (ii) 571
s 201(g) 571
s 202 570, 571
s 203 570, 572
s 203(a), (b) 572
s 203(c)(i), (ii) 572
s 203(d), (e) 573
s 204 572
ss 205–208 573
s 208(a), (b) 573
s 208(c)(i) 573
s 208(c)(ii), (iii) 574
s 209(1)–(3) 574
s 210 574
s 210(a), (b) 574
s 211(1)–(3) 574
s 212 575
s 212(a)–(d) 575
s 213(1) 194, 484
s 213(1)(a), (b) 484
s 213(1)(c)–( j) 195, 485
s 213(1)(k) 485, 486
s 213(1)(l), (m) 486
s 213(2), (3) 486
s 214(1), (2) 487
s 215(1) 196, 197, 488
s 215(1)(a)–(c) 196
s 215(1)(c)(i)–
196
(iv)
s 215(1)(d)–(h) 196
s 215(2) 197, 488
s 215(3) 196, 488
s 215(4) 197, 488
s 216(1) 488
s 217(1)–(2) 488
s 217(3)(a)–(b) 488
s 218(1)–(4) 489
ss 219–225 494
s 219 496
ss 220–221 498
s 220(1) 498
s 220(1)(a)–(g) 499
s 220(2) 499, 500
s 221(1), (2) 500
s 221(2)(a), (b) 500
s 221(3)–(5) 500
s 221(6) 501
s 222 498, 501
s 222(a), (b) 501
s 222(b)(i)–(iii) 501
s 223 498, 501
s 223(a) 501
s 223(b)(i)–(iii) 502
s 224(1), (2) 502
s 224(2)(a) 502
s 224(2)(a)(i),
502
(ii)
s 224(2)(b)(i),
502
(ii)
s 224(3)(a)–(c) 503
s 225(1) 503
s 225(2)(a) 497, 503
s 225(2)(b), (c),
498
(e)–(g)
ss 226–235 357
s 226(1) 357–359, 366
s 226(1)(a)–(d) 358
s 226(2) 357, 513
s 226(3) 359
s 226(4) 359, 363
s 226(5)(b) 367
s 226(6) 367
s 226(7) 368
s 227(1) 368
s 227(1)(a)–(c) 368
s 227(2)–(4) 368
s 228 369
s 228(a)–(c) 369
s 228(c)(i)–(iii) 369
s 229(1) 369
s 229(1)(a) 369
s 229(2), (3) 370
s 230(1) 371
s 232(1), (2) 371
s 232(3) 372
s 233 372
s 234(1), (2) 370
s 234(2)(a), (b) 370
s 235 370
s 236 507
s 236(1)(a)–(c) 507
s 236(2) 507
s 236(3)(a), (b) 508
s 236(4–(6) 508
s 236(7) 359, 508
s 237 508
s 237(1)(a)–)(d) 509
s 237(1)(e)–(g) 510
s 237(2) 511
s 237(2)(a), (b) 511
s 237(3) 509, 510
s 237(4) 512
s 237(4)(a) 512
s 237(4)(b) 511, 512
s 237(4)(c) 357, 359, 512
s 237(4)(d) 513
s 237(5) 512
s 237(6)–(8) 514
s 238 321
s 238(b) 315, 316
s 238(b)(i) 239, 316
s 238(b)(ii) 318
s 238(b)(iii) 319
s 238(b)(iv) 240, 320
s 239 316, 323, 324, 327
s 239(1), (2) 328
s 239(2)(a), (b) 328
s 239(2)(c) 329
s 240 323, 329
s 240(a), (b) 329
s 240(c), (d) 330
s 241 239, 240, 315, 330, 331
s 241(1) 316, 321
s 241(2) 320, 321, 334
s 241(3) 337
s 241(3)(a) 121, 339
s 241(3)(b)–(g) 339
s 241(3)(h) 121, 340
s 241(3)(i)–(k) 340
s 241(3)(l) 340, 344
s 241(3)(m), (n) 340
s 241(4)(a), (b) 340

s 241(5), (6) 341
s 241(6)(a), (b) 341
s 242(1) 341
s 242(2) 342
s 243 342
s 244 344
s 244(1), (2) 355
s 244(3) 355
s 244(3)(a)–(d) 356
s 248 59, 344, 354, 355
ss 250–265 408
s 250 423, 426, 428
s 250(1) 423, 425, 428, 430
s 250(1)(a) 423
s 250(1)(b) 424
s 250(2) 430
s 250(3) 427
s 250(3)(a), (b) 427
s 251(1)(a)–(e) 424
s 251(1)(f) 424, 429
s 251(2) 424
s 251(2)(a)–(c) 424
s 251(3) 424, 425
s 253 430, 431
s 255 431
s 255(2) 431
s 256(1) 425
s 256(1)(a), (b) 425
s 256(2) 425
s 257(1)(a) 425
s 257(2) 425
s 258 423
s 258(2) 426
s 259 431
s 259(1)(a), (b) 432
s 259(2) 432
s 260(1) 432
s 260(1)(a), (b) 432
s 260(2) 432
s 260(3)(a), (h) 121
s 261 432, 433
s 261(a) 432
s 261(b), (c) 433
s 262(1), (2) 433
s 263 433
s 264(1) 458
s 264(2) 460, 470
s 265(1)(f) 433
s 266(b) 445
s 266(c) 442
s 267 18
s 268 445
s 268(1)–(5) 445
s 269(1) 446
s 269(1)(a)–(c) 446
s 269(2), (3) 446
s 269(4)(a), (b) 446
s 269(5)(a)–(c) 446
s 270(1) 448
s 270(1)(a)–(c) 448
s 270(2) 448
s 271 448
s 271(a), (b) 448
s 271(c) 449
s 272(a)–(c) 449
s 274 448
s 275 447
s 276(1) 438
s 276(2) 437
s 277(a), (b) 447
ss 278, 279 447
s 280(1), (2) 449
s 280(2)(a), (b) 449
s 280(3) 449, 450
s 280(3)(a)–(c) 450
s 281(1)–(3) 443
s 281(3)(a)–(c) 443
s 282 438
s 282(1) 438
s 282(1)(a)–(d) 439
s 282(2) 439
s 282(2)(a) 439
s 283 440, 442
s 285(1) 437, 440, 443
s 285(1)(a) 440, 443
s 285(1)(b) 440, 441, 443
s 285(1)(c) 443
s 285(1)(d), (e) 444
s 285(1)(f) 441, 444
s 285(1)(g) 444
s 285(1)(h) 438, 441, 444
s 285(1)(i), ( j) 441, 444
s 285(1)(k) 444
s 285(1)(l), (m) 441, 444
s 285(1)(n) 445
s 285(2) 442
s 286 439
s 286(1) 440
s 286(1)(a) 437, 440
s 286(1)(b), (c) 441
s 286(2) 439, 440
s 287 450
s 287(1) 450, 456
s 287(1)(a)–(d) 450
s 287(2) 456
s 287(2)(a)–(e) 451
s 287(3) 452, 456
s 287(3)(a), (b) 455, 456
s 287(4) 463
s 287(4)(a) 464
s 287(4)(b)(i)–
464
(vi)
s 287(5) 460, 464
s 288(1)(a) 455
s 288(1)(b) 455, 459
s 288(1)(c) 455, 459
s 288(2) 459, 460
s 289 454, 462
s 290 454
s 291 461, 463
ss 293, 294 465
s 294(a), (b) 465, 466
s 295 459, 463
s 295(c) 459
s 296 465, 466
s 296(b)–(f) 467
s 296(g), (h) 467, 470
s 297(1) 470
s 297(1)(a), (b) 471
s 297(2) 472
s 297(2)(a), (b) 472
s 298 467
s 299(1) 469
s 299(3) 470
s 300 465
s 300(1)(a) 466, 468
s 300(1)(b) 468
s 300(1)(c)(i)–
468
(iii)
s 300(1)(c)(iv) 469
s 300(2) 468
s 300(3)(a), (b) 468
s 300(4), (5) 469
s 301 465
s 301(1)(a)–(d) 468
s 302(b) 383
s 302(c) 375, 379
s 303 18
s 304(1)(a), (b) 379
s 304(2) 378
s 305(a), (b) 376
s 305(c)–(f) 377
s 306 377, 378
s 307 378
s 307(a), (b) 378
s 308(1)(a) 383
s 308(1)(b)(i)–
383
(iii)
s 308(2) 383
s 308(2)(a)–(c) 383
s 308(2)(c)(i), (ii) 383
s 308(2)(d)(i)–
384
(iv)
s 308(3) 383
s 308(3)(a)–(h) 384
s 308(4) 385
s 309(1) 385
s 309(1)(a)–(c) 385
s 309(2) 385
s 310 385
s 310(a)–(c) 385
s 311(1), (2) 386
s 311(2)(a)–d) 386
s 311(3) 386
s 311(4)–(6) 387
s 312(1) 380, 387
s 312(2) 387
s 312(2)(a), (b) 387
s 312(3) 387
s 312(4)(a), (b) 388
s 312(5) 388
s 313(1)(a), (b) 378
s 313(2) 378
s 314 399
s 314(1) 399–401
s 314(1)(a)–(d) 401
s 314(2) 401
s 314(3)(a)–(d) 402
s 314(4)(a), (b) 402
s 314(6) 403
s 314(6)(a)–(c) 403
s 314(7) 403
s 314(7)(a), (b) 403
s 315 388
s 315(1)–(3) 389
s 316(1)–(6) 390
s 317 391
s 318 393, 396, 397, 404
s 318(1) 404
s 318(1)(a), (b) 404
s 318(2)(a), (b) 404
s 318(3)–(7) 405
s 318(7)(a), (b) 406
s 318(8) 406
s 318(8)(a), (b) 406
s 318(9), (10) 406
s 318(12), (13) 407
s 318(14) 393, 397, 404
s 320 391
s 321(1)(a), (b) 391
ss 322–325 473
s 322(a)–(d) 476
s 322(e)(i), (ii) 477
s 323(1)(a), (b) 477
s 323(2)(a), (b) 477
s 323(3) 477
s 324 475
s 324(a) 479, 480
s 324(b) 480
s 325 480
s 326(1) 19, 92
s 326(3) 19
s 328 20
s 328(1), (2) 20
s 329 20
s 329(a)–(d) 20
s 330(1), (2) 20
s 331(1), (2) 20
s 332(1), (2) 21
s 333 21
s 333(a), (b) 21
s 334(1), (2) 21
s 335(1), (2) 21
s 336(1) 21
s 336(1)(a)–( j) 22
s 336(2) 22
s 336(2)(a)–(c) 22
s 336(2)(d)–(g) 23
s 336(3)–(6) 23
s 337(1)–(3) 23
s 338 25
s 338(a)–(c) 25
s 340(1)–(4) 26
s 341(1), (2) 28
s 342(1), (2) 28
s 342(3)(a)–(c) 28
s 343 29
s 344(1) 26
s 344(1)(a)–(m) 27
s 344(2)(a)–(d) 27
s 344(2)(e) 28
s 345 28
s 346(1), (2) 28
s 346(3) 29
s 347 29
s 348(1)–(3) 29
s 349(1), (2) 29
s 350 29
s 351(1), (2) 30
s 352(1), (2) 30
s 353(1), (2) 30
s 354 31
s 355(1)–(3) 31
s 355(4), (5) 32
s 356(1)–(3) 32
s 357(1)–(5) 33
s 358 33
ss 360–369 37
s 360 64
s 360(1)(a) 64
s 362(1) 63
s 503 488
s 503(1)(a) 50, 52
s 509(1) 40
s 509(1)(a) 40, 41
s 509(1)(b)–(f) 41
ss 514–517 52
s 514 52
s 515 53
s 515(a) 53
s 515(a)(i), (ii) 53
s 515(b) 53
s 515(c)–(f) 54
s 516 53, 55
s 516(a) 55
s 516(a)(i)–(iii) 55
s 516(b)(i)–(iv) 55
s 516(c)–(e) 55
ss 518–526 344
ss 518–523 344
s 518(1), (2) 346
s 518(2)(a)–(d) 346
s 518(3) 347
s 518(4), (5) 348
s 519(1) 347
s 519(1)(a)–(l) 347
s 520(1), (2) 348
s 521(1), (2) 348
ss 522, 523 348
ss 524–526 344
s 524(1) 354
s 526 354
s 531(1)(f) 354
s 533 433
ss 538, 540 90
s 540(a) 90
s 542(1) 381
s 542(2) 382
s 543 76, 77, 128, 408
s 543(1) 15, 18, 25, 39, 182, 187, 310, 317, 477
s 543(1)(a) 476
s 543(1)(f) 128, 200, 227, 434, 435
s 544(1) 438
Constitution—
s 15 89
Foreign
Jurisdiction Act 33
1890 (UK)
Joint Stock
Companies Act
2
1844 (7 & 8 Vict.
c. 110)
Misrepresentation
395, 396
Act 1992
s 1 397
s 3(1) 396
s 3(2) 396
Securities Act
374, 473, 569
2001
Bahamas
Bahamas
Companies Act 3, 5
1886
6, 11, 13, 16, 17, 19–21, 24–26, 31, 37, 43, 44, 51, 52, 54, 65,
90–92, 117, 119, 120, 131, 133, 134, 138–140, 147, 150, 155,
157, 163, 164, 168, 172, 173, 175–180, 182, 184, 187, 195, 197,
198, 201, 203, 205–208, 215, 218, 220, 222–228, 230, 265,
Bahamas
273–277, 280, 281, 283, 284, 286–289, 292, 296–302, 309, 315,
Companies Act
316, 318, 320, 323, 327, 330, 331, 333, 341, 342, 344, 347, 348,
1992
354–360, 367, 368, 370, 374, 376, 398–403, 407, 435–438,
452–456, 458–470, 472, 473, 475–477, 483, 484, 489, 490,
503–507, 510, 512–515, 522, 523, 528, 531–537, 540, 541,
543–546, 551, 554, 556, 557, 562, 568, 570, 571
Pt II 39
Pt III 133, 182, 374
Pt V 503
s 2 17, 19, 39, 76, 77, 182, 227, 317, 367, 376, 379, 435
s 2(1) 16
ss 3–21 39
ss 3–9 117
s 3 118
s 3(1) 39, 44, 51, 92
s 3(2) 44
s 3(2)(a)–(c) 44
s 4 92
s 4(1) 297
s 5(d) 133, 198
s 5(g) 198
s 7 24
s 7(a), (b) 24
s 7(c) 25
s 7(d) 24
s 8(1), (2) 24
s 10(1) 51
s 10(2) 198, 206
s 11 59, 184
ss 12–15 52
s 12(a) 53
s 12 54
s 12(1)(a), (b) 54
s 12(1)(b)(i)–(iii) 54
s 12(2) 56, 57
s 12(2)(a) 56
s 13 56
s 15(2) 52
s 16(1) 40, 42, 43, 85
s 16(2) 43, 85
s 16(5) 85
s 17(1)–(3) 557
s 18 563
s 18(a)–(d) 563
s 22 71, 74, 78, 79
s 22(1) 75–78, 80
s 22(2) 75, 77, 81–83
s 22(3) 83
s 22(3)(a), (b) 83
s 22(4) 84
s 22(5) 75, 77, 84
ss 24–28 108
s 24 109, 110, 119
s 24(1) 41, 116, 117
s 24(2) 116, 117
s 24(3) 109, 110, 118–113
s 24(4)(a), (b) 118
s 29 198, 209, 489
s 29(2) 207, 489
ss 30–32 162
s 30 163
s 30(a) 164
s 30(b)–(d) 165
s 30(e)(i)–(iii) 165
s 31 163
s 31(1), (2) 163
s 31(2)(a), (b) 163
s 32 164
ss 35–55 132
s 35(1) 182–184, 545
s 35(3) 138
s 36(1) 185–188, 192, 193
s 36(3) 142, 143
s 36(4) 143
s 36(4)(a)–(c) 143
s 37(1) 194, 197, 198
s 37(2), (3) 198
s 38 91
s 39(1) 144
s 39(1)(a) 144
s 39(1)(b) 144–146
s 39(2) 146
s 39(3) 145, 146
s 40 135
s 42 134
s 42(1) 134
s 42(1)(a), (b) 134
s 42(1)(c) 134, 135
s 42(1)(d) 135
s 42(2) 134, 135
s 44 152, 155
s 44(2) 155
s 44(2)(a), (b) 155
s 46 157
s 46(1), (2) 157
s 46(3)(a), (b) 157
s 47(1) 139, 180
s 47(2) 139
s 48(1) 140, 141
s 48(2) 141
s 48(2)(b), (c) 141
s 48(3)–(5) 141
s 48(5)(a) 141
s 50 175, 179
s 50(1) 175
s 50(1)(a)–(c) 175
ss 51–55 176, 178
s 51(1) 176
s 51(2) 176, 177
s 56(1) 558
s 56(1)(a)–(c) 558
ss 60–64 132
s 60 167
s 60(1) 173, 174
s 60(2) 173
s 60(3) 174
s 61 167, 172, 174
s 61(a), (b) 172
s 65 282, 283
s 65(1) 297, 302
s 65(2) 284, 297
s 65(3) 298
s 66 286
s 66(1) 286, 299
s 66(2) 286
s 66(3), (4) 287
s 67(1) 287, 300
s 67(1)(a)(i), (ii) 287
s 67(1)(b) 287
s 67(2), (3) 288, 300
s 68(1), (2) 289
s 69 289
s 71(2) 299
s 73 309
s 73(1) 311
s 73(2) 311, 313
s 73(4) 314
ss 74–77 300
s 74(1) 301, 302
s 76 302
s 76(1) 242, 245–247
s 77 302
s 77(a) 302
s 77(a)(i), (ii) 302
s 77(b) 302
s 79 119, 203, 205, 257
s 79(a) 200, 268
s 79(b) 167, 168, 200, 201
s 80(1) 209, 226
s 80(2) 212
s 80(3) 221
s 81(1) 234, 235, 257
s 81(1)(a) 231, 232, 236, 588, 589
s 81(1)(b) 265–267, 270
s 81(2) 234, 239, 257
s 81(3) 234, 257
s 81(4) 265, 271
s 82(1) 210
s 82(2) 211
s 83(1) 211
s 83(1)(a), (b) 211
s 83(2)–(4) 211
s 84 215
s 84(1) 213
s 84(2) 214
s 84(3) 214, 215, 220, 282, 284
s 84(4)–(6) 215, 220
s 84(7), (8) 216
s 85 220
ss 86, 87 221
s 87(1) 221
s 87(2), (3) 222
s 88(1), (2) 222
s 88(3), (4) 223
s 89(1), (2) 218
s 89(3) 219
s 89(3)(a), (b) 219
s 89(4)(a), (b) 219
s 89(5) 219, 220
s 92 225
s 92(1) 224
s 92(2) 225
s 93(1) 224
s 93(2) 225
s 94 225
s 95 226
s 96(1), (2) 226
ss 97, 98 208
s 98(a)–(c) 208
s 98(d) 167, 208
s 98(e) 820
s 98(f)–(h) 208
s 99 201, 219, 228
s 100(1) 226
s 100(1)(b) 226
s 100(2) 227
s 101 273
s 102 274
s 102(a)–(d) 273, 274
s 102(e) 274
s 103 275
s 104(1), (2) 274
s 104(2)(a)–(c) 274
s 105 274, 345
s 105(1) 228
s 106 275, 345
s 106(1)(b) 437
s 107(1) 249, 251, 253, 257
s 107(1)(a), (b) 252
s 107(2)(a)–(d) 253
s 107(3)(a)–(c) 253
s 107(4), (5) 254
s 107(5)(a)–(e) 254
s 107(6) 255
s 108 251, 255
s 109 256
s 112 275
s 112(1) 275, 276
s 112(1)(a)–(c) 276
s 112(2) 276
s 112(3)(a), (b) 276
s 112(4)(a), (b) 277
ss 113–115 278
s 113 462
s 113(1) 278
s 113(2)(a) 278
s 113(2)(b) 279
s 114 279
s 114(a)–(c) 280
s 115 280, 462
s 116(1)–(3) 280
s 117 280, 281
s 118(1) 517
s 118(1)(a) 284, 517, 518
s 118(1)(a)(i),
518
(ii)
s 118(1)(b) 284, 517, 522
s 118(1)(c) 517, 522
s 118(2), (3) 518
s 119 522
ss 120, 121 523
s 121(1) 17
s 122 523
s 125(1) 282, 527, 528
s 125(2) 529
s 126(1) 527
s 127(1), (2) 532
s 127(3)(a)–(c) 532
s 127(4)–(7) 532
s 128(1), (2) 530
s 128(2)(a), (b) 531
s 128(3) 531
s 129(1) 537
s 129(2) 527, 535, 540
s 130 534
s 131(1)–(3) 534
s 132 544
s 132(a) 533
s 132(b) 534
s 133 535
s 139(1) 455, 458
s 139(1)(b) 452, 456
s 139(2) 460
s 140 467
s 140(1)–(4) 536
s 141(1) 538
s 141(1)(a) 455
s 141(1)(b), (c) 455, 459
s 141(2) 459, 460, 538
s 141(3) 538
s 142 454, 462
s 143 454
s 146 465
s 146(1)(a), (b) 465, 466
s 147 465
s 147(a) 466
s 147(b)–(f) 467
s 147(g), (h) 467, 470
s 148 459, 463
s 148(c) 459
s 149(1) 470
s 149(1)(a), (b) 471
s 149(2) 472
s 149(2)(a), (b) 472
s 150 465
s 150(1)(a) 466
s 150(1)(b) 468
s 150(1)(c)(iv) 469
s 150(2) 468
s 150(3)(a), (b) 468
s 150(4), (5) 469
s 151(1)(a)–(c) 468
s 151(1)(c)(i)–
468
(iii)
s 151(1)(d) 468
s 152 20, 503
s 152(a)–(d) 20
s 153(1) 503, 504
s 153(2), (3) 504
s 153(3)(a) 504
s 153(3)(b)(i),
504
(ii)
s 153(3)(c)–(e) 504
s 153(5)(a) 504, 505
s 153(5)(b), (c) 504
s 153(5)(d) 505
s 153(5)(d)(i)–
505
(iii)
s 153(5)(e), (f) 505
s 153(6) 505
s 154 20
s 154(1), (2) 505
s 154(2)(a) 505
s 154(2)(b)(i),
(ii) 505
s 154(2)(c) 505
s 154(4) 505
s 154(5) 506
s 154(5)(a)–(c) 506
s 154(6)–(8) 506
s 155 21
s 155(1) 506
s 155(2)(a)–(d) 506
s 155(3)(a) 506
s 155(3)(b) 507
s 155(3)(b)(i),
507
(ii)
s 155(4)(a), (b) 507
ss 156, 157 21
s 157(a), (b) 21
s 158 508
s 158(1) 21
s 158(1)(a)–(d) 510
s 158(2) 21, 512
s 158(3), (4) 512
s 158(4)(a)–(c) 512
s 158(4)(e) 513
s 158(5)–(7) 514
s 158(7)(a)–(c) 515
s 158(8)–(11) 515
s 159 357
s 159(1) 21, 357, 358, 367
s 159(1)(a)–(c) 358
s 159(1)(c)(i)–
358
(iii)
s 159(1)(d) 359
s 159(1)(e) 357, 359
s 159(2) 21, 367
s 159(4), (5) 368
s 159(5)(a)–(c) 368
s 159(9) 373
s 159(9)(a)–(d) 373
s 159(11) 360
s 160(1)–(3) 23
s 161 16, 25
s 161(1), (2) 31
s 162(1) 25
s 162(1)(a) 25, 26
s 162(1)(b), (c) 26
s 162(2) 26
s 163(1) 26, 28
s 163(3) 26
s 164(1) 26
s 164(1)(a)–(m) 27
s 164(2)(a)–(d) 27
s 164(2)(e) 28
s 164(3) 28
s 165(1)(a), (b) 29
s 166 29
s 168(1)–(3) 30
s 169(1), (2) 30
s 169(1), (2) 30
s 182(1), (2) 32
s 270 344
s 270(1) 348
s 270(2) 349
s 270(3) 348
s 285 315, 316, 321
s 285(a) 316
s 285(b) 318
s 285(b)(i) 239
s 285(c) 240, 320
s 286 315, 323, 324, 327, 329
s 286(1) 316, 328
s 286(2) 328
s 286(2)(a)–(c) 329
s 286(3)(a), (b) 329
s 286(3)(c), (d) 330
s 287 198, 239, 240, 315, 330, 331
s 287(1) 316, 321
s 287(2) 320, 321, 334
s 287(3) 337
s 287(3)(a) 121, 339
s 287(3)(b)–(g) 339
s 287(3)(h) 121, 340
s 287(3)(i)–(k) 340
s 287(3)(l) 340, 344
s 287(3)(m), (n) 340
s 287(4) 341
s 287(4)(a), (b) 341
s 288(1) 341
s 288(2) 342
s 289 342
s 290 59, 344, 354, 355
s 303(1) 438
s 304 37
Sch 1, para 3 198
Companies (no
6
31) Act 1956
Companies (no
6
53) Act 1965
Control
140
Regulations Act
Public
531
Accountants Act
Security
Industries Act 374, 473, 569
1999 Ch 363
Barbados
Bankruptcy and
Insolvency Act 44, 452–455, 457, 458, 465, 472
No 34 of 2001
s 2 453, 454
s 10A 455
s 10B 456, 457
s 10B(1) 457
s 10B(2) 458
s 10C 465
s 10C(a), (b) 465
s 10C(c)(i) 466
s 10C(f) 468
s 10C(g) 467
s 10D 465
s 10D(d), (f)–(h) 467
s 10H 470
s 10H(a), (b) 471
s 10K 459
ss 165, 254 455
Companies Act 6, 37
1868
Companies Act
4, 6, 37
1910
s 4 6
6, 11, 13, 15, 18, 19, 24, 25, 31, 32, 37, 44, 45, 53, 55–57, 63,
65, 91, 92, 131, 137, 143, 150, 152, 153, 155–157, 163, 164,
168, 172, 173, 180, 182, 195, 203, 205–208, 212, 215–218, 220,
222–230, 237, 240, 265, 273–277, 280, 281, 284, 286–292,
295–303, 307–309, 315, 316, 318–320, 327, 330, 331, 333, 337,
Companies Act
340–342, 344, 347, 354–357, 359, 362, 363, 366–371, 374–380,
1982
382, 383, 385–393, 396, 398–410, 412, 423, 426, 427, 429–445,
447, 448, 451–456, 458–470, 472, 473, 475–477, 483–489, 494,
496, 499–501, 503, 507–513, 515–518, 522–526, 528, 529,
531–537, 540, 543–547, 550–554, 556–559, 568, 569, 571, 572,
575, 576, 589
Pt I, Div A 39
Pt I, Div C 133, 182
Pt I Div I 545
Pt I Div J 569
Pt I Div K 483
Pt III 374
s 2 76, 77
s 2(1) 39
s 2(1)(b) 15
s 2(1)(f) 128
s 2(1)(f)(i), (ii) 128
s 2(1)(g) 18
s 2(1)(i) 310
s 3 39
s 4(1) 39, 44, 45, 90, 117, 297
s 4(2) 44
s 4(2)(a)–(c) 44
s 4(3) 51
s 5 46, 117
s 5(1) 46, 49
s 5(1)(a) 47
s 5(1)(b) 47, 133, 134, 484
s 5(1)(b)(i) 47
s 5(1)(b)(ii) 48
s 5(1)(c) 48
s 5(1)(d) 49, 209
s 5(1)(e) 49, 118, 486
s 5(2) 46, 49, 486
s 7 46
s 8 40, 42, 43
s 9 43
ss 10–15 52
s 10(1) 44
s 10(2) 44, 56
s 11(a), (b) 53
s 12 56
s 12(b) 56
s 12(2) 56
s 14 57
s 15(1), (2) 57
s 16 71, 74, 78, 79
s 16(1) 75–78, 80, 85
s 16(2) 75, 77, 81–83, 85
s 16(3) 83
s 16(3)(a), (b) 83
s 16(4) 83, 84
s 16(5) 75, 77, 84, 85
ss 17–25 108
s 17 109, 110
s 17(1) 41, 116, 117

s 17(2) 116, 117
s 17(3) 117
s 17(4)(a), (b) 118
ss 18, 19 109, 118
s 20 122, 123, 429
s 21 122, 124, 126
s 21(a)–(c) 131
s 21(e) 129
s 21(f) 130
ss 26–57 132
s 26(1) 182–184, 545
s 26(2) 137, 138
s 27 186, 189, 190
s 27(a)–(c) 186
s 28 185, 187, 188
s 28(a) 185, 187, 192, 193
s 28(b) 187, 188
s 29(1) 91, 136
s 29(2) 140
s 30(1) 144
s 30(1)(a), (b) 144
s 30(2) 146
s 30(3) 145, 146
s 31(1) 147
s 31(2)–(5) 148
s 31(6)(a) 148, 149
s 31(6)(b), (c) 149
s 31(7)(a), (b) 149
s 33(1) 187, 188
s 33(4)–(6) 188
s 34 142
s 34(1) 142, 143
s 34(2) 143
s 34(2)(a)–(c) 143
s 35(1), (2) 143
s 36 143, 144
s 37(1) 152, 153, 155
s 37(2) 153
s 37(2)(a), (b) 153
s 38(1), (2) 153
s 39 152, 155
s 39(2) 155
s 39(2)(a), (b) 155
s 40 155, 156
s 40(1)(a), (b) 156
s 40(1)(c) 157
s 40(2)(a), (b) 157
s 41(1) 158, 190
s 41(2) 158, 159
s 42 161
s 44 175
s 44(1) 175, 179
s 44(1)(a)–(c) 175
s 44(2), (3) 176
s 44(3)(a) 176
s 44(3)(b) 177
s 44(4), (5) 176, 177
s 44(5)(a) 177
s 44(5)(b) 178
s 44(6) 176, 178
s 45(1)–(3) 179
s 45(4)(a), (b) 180

ss 46, 47 180
s 49 157
s 49(1), (2) 157
s 49(3)(a), (b) 157
s 50 180
s 51 167, 172, 174
s 51(a), (b) 172
s 52 167
s 52(1), (2) 173, 174
s 52(3) 174
ss 53–55 162
s 53 124, 125, 163
s 53(1), (2) 163
s 53(2)(a), (b) 163
s 54 163
s 54(a) 164
s 54(b)–(d) 165
s 54(e)(i)–(iii) 165
s 55 164
s 57(1), (2) 556
s 58(1) 119, 203, 205, 228
s 58(1)(a) 200, 268
s 58(1)(b) 167, 168, 200
s 58(2) 228, 229
s 58(3) 229
s 58(3)(a)–(e) 229
s 59 18, 209
s 60 119, 206
s 61(1)–(4) 207
s 62 224
s 62(1) 224
s 63(1) 210, 212, 229
s 63(2) 211, 229
s 63(2)(b) 212
s 64(1) 211
s 64(1)(a), (b) 211
s 64(2)–(4) 211
s 65 212
s 66 215, 502
s 66(1) 46, 50, 203, 213
s 66(2) 46, 203, 214
s 66(3) 46, 201, 214, 217, 282
s 66(3) 215, 220, 284
s 66(4)–(6) 215, 220
s 66(7), (8) 216
s 67 209, 217
s 67(a) 209, 217
s 67(b)–(e) 218
s 67(h) 210
s 68 220
ss 69, 70 221
s 70(1) 221, 222
s 70(2), (3) 222
s 71(1), (2) 222
s 71(3), (4) 223
s 72(1), (2) 218
s 72(3)(a), (b) 219
s 72(4)(a), (b) 219
s 72(5) 219, 220
s 73 209
s 75 225
s 75(1) 224
s 75(2) 225
s 76(1) 224
s 76(2) 225
s 77 225
s 79(1), (2) 226
s 80(1), (2) 208
s 80(2)(a)–(c) 208
s 80(2)(d) 167, 208
s 80(2)(e) 820
s 80(2)(f)–(i) 208
s 81 201, 219, 228
s 82(1) 226
s 82(1)(b) 226
s 82(2) 227
ss 83–84 178, 180
s 83 178, 273
s 84 274
s 84(a), (b) 179, 273, 274
s 84(c) 178, 273, 274
s 84(d) 179, 273, 274
s 84(e) 178, 274
s 84(1)(a) 233
s 85 275
s 86(1), (2) 274
s 86(2)(a)–(c) 274
s 87 274
s 88 275
s 89(1) 249, 251, 253, 257
s 89(1)(a), (b) 252
s 89(2)(a)–(d) 253
s 89(3)(a)–(c) 253
s 89(4), (5) 254
s 89(5)(a)–(e) 254
s 90 255
s 91 251, 255
s 92 256
s 94(1)(b) 437
s 94(3) 408
s 95 257
s 95(1) 234, 235, 242, 245, 246, 257
s 95(1)(a) 231–233, 236, 588, 589
s 95(1)(b) 265–267, 270
s 95(2) 234, 236–240, 257
s 95(3) 234, 237, 257
s 95(4) 120, 265, 271
s 95(5) 277
s 96 275
s 96(1) 275, 276
s 96(1)(a)–(c) 276
s 96(2) 276
s 96(3)(a), (b) 276
s 96(4)(a), (b) 277
ss 97–99 278
s 97(1) 278
s 97(2)(a) 278
s 97(2)(b) 279
s 98 279
s 98(a)–(c) 280
s 99 280
s 100 280, 281
s 101 278
s 101(1)–(3) 280
s 102 221
s 103(1)–(3) 289
s 104 289
s 105 282, 283, 462
s 105(a) 283
s 105(b) 286
s 106(2) 290
s 107(a)(i), (ii) 291
s 108 290
s 109 500
s 109(1) 290
s 109(1)(a)–(c) 290
s 109(2)–(4) 291
s 110 284
s 110(1) 284
ss 112–120 292
s 112 487
s 112(a), (b) 292
s 113 216
s 113(1), (2) 293
s 114 216, 294
s 114(a), (b) 294
s 115 293
s 115(a) 216, 293
s 115(b)–(e) 293
s 117 294
s 118 295
s 119 293
s 120 294, 295
s 121(1) 295, 296

s 121(1)(a) 296
s 121(1)(b)(i),
296
(ii)
s 121(2) 296
s 121(3)(a), (b) 296
s 121(4) 296
s 122 296
s 122(a), (b) 296
s 123(1), (2) 297
s 123(3) 298
s 123(4) 297
s 124 217, 299
s 125(1), (2) 300
s 126 300
s 127(1), (2) 217, 299
s 128(1) 308
s 128(1)(a), (b) 308
s 128(2) 308
s 129 286
s 129(1) 121, 286
s 129(2), (3) 286
s 129(3)(a) 286
s 129(3)(b), (c) 287
s 129(4)–(6) 287
s 130(1) 287
s 130(1)(a)(i),
287
(ii)
s 130(1)(b) 287
s 130(2), (3) 288
s 132 308
s 133 309, 310
s 133(1) 309–311
s 133(2) 310, 311, 314
s 133(3), (4) 310
s 134 124
ss 135–146 300
s 135(1)(a), (b) 301
s 135(1)(c) 307
s 135(1)(d) 303
s 135(1)(d)(i)–
303
(iii)
s 135(1)(d)(iv) 304
s 135(1)(e) 304
s 135(2)(a)–(d) 304
s 136(1)–(3) 302
s 137 302
s 137(a) 302
s 137(a)(i), (ii) 302
s 137(b) 302
s 138(1), (2) 303
s 139(1) 304
s 139(2) 18
s 140 305
s 140(a), (b) 305
ss 141, 142 305
s 143(1) 306
s 143(1)(a), (b) 306
s 143(2)(a)–(c) 306
s 145 308
ss 146–147 307
s 146(1) 306, 307
s 146(1)(a), (b) 306, 307
s 146(2) 306, 307
s 146(2)(a)–(c) 306
s 146(3) 306, 307
s 146(4)–(6) 307
s 147 462
s 147(1) 517
s 147(1)(a) 284, 517
s 147(1)(a)(i),
518
(ii)
s 147(1)(b) 284, 517, 522
s 147(1)(c) 517, 522
s 147(2), (3) 518
s 148 522
s 149(1) 91, 524
s 149(2) 524
s 149(3), (4) 525
s 150 462
s 150(1), (2) 523
s 151 523
s 152(1) 18, 19, 525
s 152(1)(a) 525, 526
s 152(2), (3) 525
s 152(4)(a), (b) 526
s 152(5) 526
s 153(1) 530
s 153(2)(a) 531
s 153(2)(b)(i),
531
(ii)
s 153(2)(c) 531
s 153(3)(a), (b) 531
s 153(4) 531
s 154(1), (2) 532
s 154(3)(a)–(c) 532
s 154(4)–(7) 532
s 155(1) 282, 527, 528
s 155(2), (3) 529
s 156 529
s 156(1) 18, 527, 529
s 156(2), (3) 529
s 157(1)(a)(i) 533
s 157(1)(a)(ii) 534
s 157(1)(b)(i)–
534
(iii)
s 157(2) 534
s 158(2) 534
s 159(1)–(4) 534
s 160(1), (2) 535
s 161 535
s 163(1)–(4) 536
s 164(1) 527, 535, 540
s 164(2), (4) 540
s 165 537
s 165(1), (2) 537
s 166(1)–(3) 538
s 167 544
s 168(1), (2) 557
s 169 502
s 169(1) 50, 557
s 169(2) 557
s 170(1) 563
s 170(1)(a) 58, 206, 563
s 170(1)(b), (c) 563
s 170(2) 557
s 170(2)(a)–(c) 558
s 170(3) 558
s 170(3)(a)–(f) 558
s 170(5) 562
s 171(1)(a), (b) 563
s 171(2) 563, 564
s 171(3)–(5) 563
s 172(1), (2) 516, 564
s 172(3) 517, 564
s 173(a), (b) 564
s 174 565
s 175(1)–(3) 565
s 175(4) 566
s 176(1) 566
s 176(4)(a)–(c) 566
s 176(5) 566
s 179(1) 545, 546, 550
s 179(2) 550
s 179(3) 551
s 179(4)(a), (b) 551
s 179(5)–(7) 551
s 180(1)–(3) 546
s 181 552
s 181(1), (2) 552
s 181(3)(a), (b) 552
s 181(4), (5) 553
s 181(6)(a) 552
s 181(6)(b) 553
s 182 552
s 182(1)–(3) 553
s 183 555
s 183(1)–(3) 555
s 184(1)–(3) 554
s 185(a) 570
s 185(b) 571, 572
s 185(f) 571
s 185(f)(i), (ii) 571
s 185(g) 571
s 186 570, 571
s 187 570, 572
s 187(a), (b) 572
s 187(c)(i), (ii) 572
s 187(d), (e) 573
s 188 572
ss 189–192 573
s 192(a), (b) 573
s 192(c)(i) 573
s 192(c)(ii), (iii) 574
s 193(1)–(3) 574
s 194 574
s 194(a), (b) 574
s 195(1)–(3) 574
s 195B 569
s 195B(1) 576
s 196 575
s 196(a)–(d) 575
s 197(1) 194, 484
s 197(1)(a), (b) 484
s 197(1)(c)–(f) 194, 485
s 197(1)(g)–( j) 195, 485
s 197(1)(k) 485, 486
s 197(1)(l), (m) 486
s 197(2), (3) 486
s 198 37
s 198(1) 487
s 198(1)(a) 487
s 198(1)(b)(i),
487
(ii)
s 198(2), (3) 487
s 200 487
s 201(1), (2) 487, 488
s 202(1) 196, 197
s 202(1)(a)–(c) 196
s 202(1)(c)(i)–
196
(iv)
s 202(1)(d)–(h) 196
s 202(2) 197
s 202(3) 196, 488
s 202(4) 197, 488
s 203(1) 488
s 204(1), 2) 488
s 204(3)(a), (b) 488
s 205(1)–(4) 489
ss 206–212 494
s 206 496
ss 207–208 498
s 207(1) 498
s 207(1)(a)–(g) 499
s 207(2) 499, 500
s 208(1), (2) 500
s 208(2)(a), (b) 500
s 208(3)–(5) 500
s 208(6) 501
s 209 498, 501
s 209(a), (b) 501
s 209(b)(i)–(iii) 501
s 210 498, 501
s 210(a) 501
s 210(b)(i)–(iii) 502
s 211(1), (2) 502
s 211(2)(a) 502
s 211(2)(a)(i),
502
(ii)
s 211(2)(b) 502
s 211(2)(b)(i),
502
(ii)
s 211(3)(a)–(c) 503
s 212(1) 503
s 212(2)(a) 497, 503
s 212(2)(b)–(g) 498
ss 213–222 357
s 213(1) 357–359, 366
s 213(1)(a)–(d) 358
s 213(2) 357, 513
s 213(3) 359
s 213(4) 359, 363
s 213(5)(b) 367
s 213(6) 367
s 213(7) 368
s 214(1) 368
s 214(1)(a)–(c) 368
s 214(2)–(4) 368
s 215 369
s 215(a), (b) 369
s 215(c)(i)–(iii) 369
s 216(1) 369
s 216(1)(a) 369
s 216(2), (3) 370
s 217(1) 371
s 219(1), (2) 371
s 219(3) 372
s 220 372
s 221(1), (2) 370
s 221(2)(a), (b) 370
s 222 370
s 223 507
s 223(1)(a)–(c) 507
s 223(2) 507
s 223(3)(a), (b) 508
s 223(4)–(6) 508
s 223(7) 359, 508
s 224 508
s 224(1)(a)–(d) 509
s 224(1)(e)–(g) 510
s 224(2) 511
s 224(2)(a), (b) 511
s 224(3) 509, 510
s 224(4) 512
s 224(4)(a) 512
s 224(4)(b) 511, 512
s 224(4)(c) 357, 359, 512
s 224(4)(d) 513
s 224(5) 512
s 224(6)–(8) 514
s 225 321
s 225(b) 315, 316
s 225(b)(i) 239
s 225(b)(ii) 318
s 225(b)(iii) 319
s 225(b)(iv) 240, 320
ss 226–227 315
s 226 323, 324, 327
s 226(1) 316, 323, 328
s 226(2) 323, 328
s 226(2)(a), (b) 328
s 226(2)(c) 329
ss 227–252 408
s 227 323, 329
s 227(a), (b) 329
s 227(c), (d) 330
s 228 239, 240, 315, 317, 318, 330, 331
s 228(1) 316, 321, 338
s 228(2) 320, 321, 338, 334
s 228(3) 317, 337, 338
s 228(3)(a) 121, 339
s 228(3)(b)–(g) 339
s 228(3)(h) 121, 340
s 288(3)(i)–(k) 340
s 288(3)(l) 340, 344
s 288(3)(m), (n) 340
s 288(4)(a), (b) 340
s 228(5), (6) 341
s 228(6)(a), (b) 341
s 229(1) 341
s 229(2) 342
s 230 342
s 231 317, 318, 344
s 231(1), (2) 355
s 231(3) 317, 355
s 231(3)(a)–(d) 356
s 235 59, 344, 354, 355
s 237 423, 426, 428
s 237(1) 423, 425, 428, 430
s 237(1)(a) 423
s 237(1)(b) 424
s 237(2) 430
s 237(3) 427
s 237(3)(a), (b) 427
s 238(1)(a)–(e) 424
s 238(1)(f) 424, 429
s 238(2) 424
s 238(2)(a)–(c) 424
s 238(3) 424, 425
s 240 430, 431
s 242 431
s 242(2) 431
s 243(1) 425
s 243(1)(a), (b) 425
s 243(2) 425
s 244(1)(a) 425
s 244(2) 425
s 245 423
s 245(2) 426
s 246 431
s 246(a)(ii) 55
s 246(1)(a), (b) 432
s 246(2) 432
s 247(1) 432
s 247(1)(a), (b) 432
s 247(2) 432
s 248 432, 433
s 248(a) 432
s 248(b), (c) 433
s 249(1), (2) 433
s 250 433
s 250(2) 434
s 251(1) 458
s 251(2) 460, 470
s 252(1) 433
s 253(b) 445
s 253(c) 442
s 254 18
s 255(1)–(5) 445
s 256(1) 446
s 256(1)(a)–(c) 446
s 256(2), (3) 446
s 256(4)(a), (b) 446
s 256(5)(a)–(c) 446
s 257(1) 448
s 257(1)(a)–(c) 448
s 257(2) 448
s 258 448
s 258(a), (b) 448
s 258(c) 449
s 259(a)–(c) 449
s 261 448
s 262 447
s 263(1) 438
s 263(2) 437
s 264(a), (b) 447
ss 265, 266 447
s 267(1), (2) 449
s 267(2)(a), (b) 449
s 267(3) 449, 450
s 267(3)(a)–(c) 450
s 268(1)–(3) 443
s 268(3)(a)–(c) 443
s 269 438
s 269(1) 438
s 269(1)(a)–(d) 439
s 269(2) 439
s 269(2)(a), (b) 439
s 270 440, 442
s 272(1) 440, 443
s 272(1)(a) 437, 440, 443
s 272(1)(b) 440, 441, 443
s 272(1)(c) 443
s 272(1)(d), (e) 444
s 272(1)(f) 441, 444
s 272(1)(g) 444
s 272(1)(h) 438, 441, 444
s 272(1)(i), ( j) 441, 444
s 272(1)(k) 444
s 272(1)(l), (m) 441, 444
s 272(1)(n) 445
s 272(2) 440, 442
s 273 439
s 273(1) 437, 440

s 273(1)(a) 440
s 273(1)(b), (c) 441
s 273(2) 439, 440
s 274 450
s 274(1) 450, 456
s 274(1)(a)–(d) 450
s 274(2) 456
s 274(2)(a)–(e) 451
s 274(3) 452, 456
s 274(3)(a), (b) 455, 456
s 274(4) 463
s 274(4)(a) 464
s 274(4)(b)(i)–
464
(iii)
s 274(4)(b)(iv)–
464
(vi)
s 274(5) 460, 464
s 275(1)(a) 455
s 275(1)(b), (c) 455, 459
s 275(2) 459, 460
s 276 454, 462
s 277 454
s 278 461, 463, 463
ss 280, 281 465
s 281(a), (b) 465, 466
s 282 459, 463
s 282(c) 459
s 283 465
s 283(a) 466
s 283(b)–(f) 467
s 283(g), (h) 467, 470
s 284(1) 470
s 284(1)(a), (b) 471
s 284(2) 472
s 284(2)(a), (b) 472
s 285 467
s 285.1(1) 469
s 285.1(3) 470
s 286 465
s 286(1)(a) 466
s 286(1)(b) 468
s 286(1)(c)(iv) 469
s 286(2) 468
s 286(3)(a), (b) 468
s 286(4), (5) 469
s 287 465
s 287(1)(a)–(c) 468
s 287(1)(c)(i)–
468
(iii)
s 287(1)(d) 468
s 288 375, 379
s 288(b) 383
s 288(c) 379
s 289 18
s 290(1)(a), (b) 379
s 290(2) 378
s 291(a), (b) 376
s 291(c)–(f) 377
s 292 377, 378
s 293 378
s 293(a), (b) 378
s 294(1)(a) 383
s 294(1)(b)(i)–
383
(iii)
s 294(2) 383
s 294(2)(a)–(c) 383
s 294(2)(c)(i), (ii) 383
s 294(2)(d)(i)–
384
(iv)
s 294(3) 383
s 294(3)(a)–(h) 384
s 294(4) 385
s 295(1) 385
s 295(1)(a)–(c) 385
s 295(2) 385
s 296 385
s 296(a)–(c) 385
s 297(1), (2) 386
s 297(2)(a)–(d) 386
s 297(3) 386
s 297(4)–(6) 387
s 298(1) 380, 387
s 298(2) 387
s 298(2)(a), (b) 387
s 298(3) 387
s 298(4)(a), (b) 388
s 298(5) 388
s 299(1)(a), (b) 378
s 299(2) 378
s 300 399
s 300(1) 399–401
s 300(1)(a)–(d) 401
s 300(2) 401
s 300(3)(a)–(d) 402
s 300(4)(a), (b) 402
s 300(6) 403
s 300(6)(a)–(c) 403
s 300(7) 403
s 300(7)(a), (b) 403
s 301 388
s 301(1)–(3) 389
s 302(1)–(6) 390
s 303 391
s 304 393, 397, 404
s 304(1) 404
s 304(1)(a), (b) 404
s 304(2)(a), (b) 404
s 304(3)–(7) 405
s 304(7)(a), (b) 406
s 304(8) 406
s 304(8)(a), (b) 406
s 304(9) 406
s 304(10) 406
s 304(12), (13) 407
s 304(14) 393, 397, 404
s 306 391
s 307(1)(a), (b) 391
ss 308–311 473
s 308(a)–(d) 476
s 308(e)(i), (ii) 477
s 309(1)(a), (b) 477
s 309(2)(a), (b) 477
s 309(3) 477
s 310 475
s 310(a) 479, 480
s 310(b) 480
s 311 480
s 312(1) 19, 92
s 312(3) 19
s 314 20
s 314(1), (2) 20
s 315 20
s 315(a)–(d) 20
s 316(1), (2) 20
s 317(1), (2) 20
s 318(1), (2) 21
s 319 21
s 319(a), (b) 21
s 320(1), (2) 21
s 321(1), (2) 21
s 322(1) 21
s 322(1)(a)–( j) 22
s 322(2) 22
s 322(2)(a)–(c) 22
s 322(2)(d)–(g) 23
s 322(3)–(6) 23
s 323(1), (2), (4) 23
s 324(1)(a) 25
s 324(2) 25, 26
s 324(2)(a) 26
s 324(2)(b) 25, 26
s 324(2)(c)–(e) 26
s 326(1)–(4) 26
s 327(1), (2) 28
s 328(1), (2) 28
s 328(3)(a)–(c) 28
s 329 29
s 330(1) 26
s 330(1)(a)–(m) 27
s 330(2)(a)–(d) 27
s 330(2)(e) 28
s 331 28
s 332(1), (2) 28
s 332(3) 29
s 333 29
s 334(1)–(3) 29
s 335(1) 29
s 335(1)(a), (b) 29
s 335(2) 29
s 336 29
s 337(1)–(3) 30
s 338(1)–(3) 30
s 339(1)–(3) 30
s 340 31
s 341(1), (2) 31
s 342(1)–(3) 31
s 342(4)(a) 32
s 342(4)(b) 32
s 342(5) 32
s 343(1)–(3) 32
s 344(1)–(5) 33
s 345 33
ss 347–355 37
s 347 64
s 347(1)(a) 64
s 349(1) 63
s 401 488
s 404(2)(a) 50, 52
s 410(1) 40
ss 415–419 52
s 415 52
s 416 53
s 416(a) 53
s 416(a)(i), (ii) 53
s 416(b) 53
s 416(c)–(f) 54
s 417 53, 55
s 417(b)(i)–(iv) 55
s 417(c), (d) 55
s 419 57
ss 420–428 344
ss 420–426 344
s 420(1), (2) 346
s 420(2)(a)–(d) 346
s 420(3) 347
s 420(4), (5) 348
s 421(1) 347
s 421(1)(a)–(l) 347
s 422(1), (2) 348
s 423(1), (2) 348
s 424 348
ss 426–428 344
s 426(1) 354
s 428 354
s 433(1)(f) 354
s 435 433
ss 440–442 90
s 444(1) 381
s 444(2) 382
s 448 182
s 448(b) 477
s 448(c) 187, 476
s 448(f) 15
s 448(h) 317, 383, 435
s 448(i) 128, 200, 227
s 448(u) 317
s 449(1) 438
s 516(a) 55
s 516(a)(i), (iii) 55
s 516(e) 55
Companies Act
55
no 9 1995
Companies
Regulations 1984
—
Reg 10 518
Reg 11(1) 517
Foreign and
Commonwealth
Judgments
33
(Reciprocal
Enforcement)
Act, Cap 201
Interpretation
Act, Cap 1—
s 29(1)(b) 453
Land Registration
Act Cap 229—
s 5 426
s 95(2) 425
s 96(1) 425
Law of Property
Act, Cap 236—
s 96(1) 410
Road Traffic Act,
26
Ch 295
Securities Act 374, 473
Cap 318A
Stamp Duty Act
Cap 91—
ss 3–30 431
s 31 431
Take-Over Bid
569, 576–578, 582, 583, 585, 586, 589
Regulations 2002
reg 4 576
reg 4(1) 576
reg 4(2)(a) 576
reg 4(2)(b)(i)–
577
(v)
reg 4(3), (4) 577
reg 5 578
reg 6(1) 578
reg 6(2) 578, 585
reg 7(a)–(i) 578
reg 7( j)–(p) 579
reg 8(a)–(d) 579
reg 9 580
reg 10 578
reg 10(a)–(i) 580
reg 10( j)–(u) 581
reg 10(v)–(z) 582
regs 11, 12 582
reg 12(a)–(c) 582
reg 13(a)–(d) 583
reg 14(a)–(f) 583
reg 14(g)–(r) 584
reg 15(2) 583
reg 16 585
reg 16(1)–(3) 585
reg 17 585
reg 18(1), (2) 585
reg 18(3), (4) 586
reg 19(1)–(3) 586
regs 20, 21 586
Belize/British
Honduras
Companies Act
1862 25 & 26 Vict. 3, 4
c. 118
Companies Act
3
1866
Companies
6
Ordinance 1866
4, 6, 11, 16, 24, 25, 35, 37, 43, 45, 51, 55, 57, 65, 71, 85, 90, 92,
108, 117, 119, 131, 133, 138, 140, 142, 145, 147, 150, 152, 155,
Companies Act
157, 161, 173, 175, 178, 179, 181–185, 187, 191, 194, 195, 200,
Ch 250 (Was
203, 206, 208–210, 213, 215, 219, 221, 227, 228, 230, 231, 248,
British Honduras
249, 264, 265, 272, 273, 277, 285, 286–289, 292, 297–300, 374,
Companies
376, 385, 386, 391, 398–401, 403, 407, 435–438, 452–456, 468,
Ordinance 1914)
471, 472, 483, 489, 490, 509, 529, 531, 535, 540, 543–546, 551,
554, 556, 557, 568, 570
Pt I 39
Pt II 133, 182
Pt III 374
Pt IX 34
s 2 39, 182, 183, 376, 379
s 2(1) 16, 200, 435
s 3(1), (2) 39
ss 4–13 39, 117
s 4 44, 51, 92
s 4(a) 133, 138
s 4(b) 24, 92
s 5(1)(a) 24
s 5(1)(b) 24, 557
s 5(3) 25
s 8 40
s 9 52
s 9(1) 53, 55
s 9(2) 56
s 10(1) 51, 204
s 11 51
s 13 194, 207, 489
s 14(1) 184, 204, 206
s 16(1) 40, 42, 59
s 16(2) 43
s 17(1) 40, 42
s 23(1) 182–184, 545
ss 38–58 132
s 42(1)(a) 133
s 64(1), (2) 557
s 66(1) 282, 283
s 66(2) 288
s 67(1) 284
s 67(2), (3) 285
s 67(3)(a)–(e) 285
s 67(4)–(8) 285
s 67(9) 286
s 68 286
s 68(1), (2) 286
s 68(3), (5) 287
s 70 300
s 75(1) 212
s 75(2), (3) 213
s 76 201, 219, 228
s 82 386
s 82(1) 376
s 82(2)–(4) 376
s 82(2) 386
s 84(1) 391
s 86 399
s 86(c)(i)–(iii) 402
s 86(1) 399–401
s 86(1)(a), (c) 402
s 86(1)(c)(ii) 402
s 86(3) 403
s 105 437, 438
s 106 437
s 113(1) 527, 529
s 113(2) 535
s 113(5) 529
s 113(6) 535
s 114(2) 527
s 121 509
ss 223–225 37
s 250 16, 34
s 251(1) 34
s 251(1)(a)–(c) 34
s 251(5) 35
s 251(5)(a)–(c) 35
s 251(6) 35
s 251(7)(a)–(d) 36
s 251(8) 37
s 252(4) 35
s 410(1) 40
Sch 1, Table A 51, 215
Sch 1, Table A,
298
Art 52
Sch 1, Table A,
214
Art 68
Sch 1, Table A,
204
Art 71
Sch 1, Table A,
210
Art 77
Sch 2 391
Canada
Canadian
Business
497
Corporation Act
1974
s 206 570
s 234 331
Canadian
Business
13, 110, 191, 216, 224, 242, 244, 272, 288, 311, 312, 360
Corporations Act
(RSC 1985 c. 44)
s 15 110
s 24(3) 191
s 122(1)(a) 271
s 122(1)(b) 270, 271

s 140(5) 311
s 144 288
s 146 310
ss 190, 238 360
s 241 331, 360
Ontario Business
74, 77, 83, 191
Corporations Act
s 14 71, 74, 78, 79
s 14(2) 82
s 16 71, 74, 78
s 16(2) 82
s 16(3) 118
s 29 82
s 108 310
s 136 278
Saskatchewan
Business
164
Corporations Act,
RSS 1978, c. B-10
s 34(2) 159
s 97(1) 167
Caribbean
Caricom Model
11, 12, 14
Act
Caribbean Law
Institute Model 11, 14
Act
Commonwealth
Caribbean
42, 43, 44, 53, 71, 90, 107, 108, 110, 113, 114, 116, 117, 122,
124, 131, 133, 134, 139, 142, 144–146, 152, 153, 155–157,
160–162, 165, 167, 175, 176, 178, 182, 184, 185, 187, 189, 190,
Companies Acts 193, 199, 201, 209, 212, 219–222, 228, 231, 234–236, 241, 248,
249, 251, 252, 257, 265, 273, 281, 282, 300, 302, 312, 313, 315,
324, 332, 335, 336, 344, 346, 347, 357, 375, 377, 527, 528, 530
International
Business 12
Companies Act
Dominica
Companies Act
7
(no 26) 1974
5, 13, 15, 18, 19, 24, 25, 37, 44, 45, 53, 55, 63, 65, 76, 77, 91, 92,
119, 120, 131, 137, 138, 143, 150, 152, 153, 155–157, 163, 164,
168, 172, 173, 180, 182, 195, 201, 203, 205–208, 215–218,
220–228, 230, 237, 265, 273–277, 280, 281, 284, 286–292,
Companies Act 295–303, 307–309, 315, 316, 318–320, 323, 327, 330, 331, 333,
1994 340–342, 344, 347, 354–357, 359, 362, 363, 366–371, 374–380,
382, 383, 385–393, 396, 398–410, 412, 423, 427, 429–445, 447,
448, 451–456, 458–470, 472, 473, 475–477, 483–489, 494, 496,
499–501, 503, 507–513, 515–518, 522–526, 528–537, 540,
543–547, 550–554, 556–566, 568–572, 575, 589
Pt I, Div A 39
Pt I, Div C 133, 182
Pt I Div I 545
Pt I Div J 569
Pt I Div K 483
s 3 39
s 4(1) 39, 44, 45, 90, 117, 297
s 4(2) 44
s 4(2)(a)–(c) 44
s 4(3) 51
s 5 46, 117
s 5(1) 46, 49
s 5(1)(a) 47
s 5(1)(b) 47, 133, 134, 484
s 5(1)(b)(i) 47
s 5(1)(b)(ii) 48
s 5(1)(c) 48
s 5(1)(d) 49, 209
s 5(1)(e) 49, 118, 486
s 5(2) 46, 49, 486
s 7 46
s 8 40, 42, 43
s 9 43
ss 10–15 52
s 10(1 56
s 11(a), (b) 53
s 12 56
s 12(a), (b) 56
s 14 57
s 15(1), (2) 57
s 16 71, 79
s 16(1) 80
s 16(2) 71
s 16(4) 71, 84
s 16(5) 71
ss 17–25 108
s 17 109, 110, 119
s 17(1) 41, 116, 117
s 17(2) 116, 117
s 17(3) 117
s 17(4)(a), (b) 118
s 18 109
s 18(1) 118
s 19 109, 110, 118, 119
s 20 122, 123, 429
s 21 122, 124–127
s 21(a) 130, 131
s 21(b) 130, 131
s 21(c) 131
s 21(d) 128, 129
s 21(e) 129, 130
s 21(f) 130
ss 26–57 132
s 26(1) 182–184, 545
s 26(2) 137, 138
s 27 186, 189, 190
s 27(a)–(c) 186
s 28 185, 187, 188
s 28(a) 185, 187, 192, 193
s 28(b) 187, 188
s 29(1) 91, 136
s 29(2) 140
s 30(1) 144
s 30(1)(a) 144
s 30(1)(b) 144–146
s 30(2) 146
s 30(3) 145, 146
s 31(1) 147
s 31(2)–(5) 148
s 31(6)(a) 148, 149
s 31(6)(b), (c) 149
s 31(7)(a), (b) 149
s 33(1), (4)–(6) 188
s 34 142
s 34(1) 142, 143

s 34(2) 143
s 34(2)(a)–(c) 143
s 35(1), (2) 143
s 36 143, 144
s 37(1) 152, 153, 155
s 37(2) 153
s 37(2)(a), (b) 153
s 38(1), (2) 153
s 39 152, 155
s 39(2) 155
s 39(2)(a), (b) 155
s 40 155, 156
s 40(1)(a), (b) 156
s 40(1)(c) 157
s 40(2)(a), (b) 157
s 41(1) 158, 190
s 41(2) 158, 159
s 42 161
s 44 175
s 44(1) 175, 179
s 44(1)(a)–(c) 175
s 44(2), (3) 176
s 44(3)(a) 176
s 44(3)(b) 177
s 44(4), (5) 176, 177
s 44(5)(a) 177
s 44(5)(b) 178
s 44(6) 176, 178
s 45(1)–(3) 179
s 45(4)(a), (b) 180
ss 46, 47 180

s 49 157
s 49(1), (2) 157
s 49(3)(a), (b) 157
s 50 180
s 51 167, 172, 174
s 51(a), (b) 172
s 52 167
s 52(1), (2) 173, 174
s 52(3) 174
ss 53–55 162
s 53 124, 130, 163
s 53(1), (2) 163
s 53(2)(a), (b) 163
s 54 163
s 54(a) 164
s 54(b)–(d) 165
s 54(e)(i)–(iii) 165
s 55 164
s 57(1), (2) 556
s 58(1) 119, 203, 205, 228
s 58(1)(a) 200, 268
s 58(1)(b) 167, 168, 200
s 59 228
s 59(2) 228
s 60 228
s 60(1) 229
s 61 228
s 61(1), (2) 229
s 61(2)(a)–(e) 229
s 62(1) 18, 209
s 63 119, 206
s 64(1) 207
s 64(2)–(4) 207
s 65 224
s 65(1), (2) 224
s 66(1) 210
s 66(2) 211
s 66(3) 201
s 67(1) 211
s 67(1)(a), (b) 211
s 67(2)–(4) 211
s 68 212
s 69 124, 215, 502
s 69(1) 46, 50, 213
s 69(2) 46, 214
s 69(3) 46, 214, 215, 217, 220, 282, 284
s 69(4)–(6) 215, 220
s 69(7), (8) 216
s 70(1), (2) 203
s 71 209, 217
s 71(a) 209, 217
s 71(b)–(e) 218
s 71(h) 210
s 72 220
s 73 221
s 73(1) 222
s 73(1)(a), (b) 221
s 73(2), (3) 222
s 74(1), (2) 222
s 74(3) 223
s 74(3)(a), (b) 219
s 74(4) 223
s 74(4)(a), (b) 219
s 75(1), (2) 218
s 75(5) 219, 220
s 76 209
s 77 124
s 78 225
s 78(1) 224
s 78(2) 225
s 79(1) 224
s 79(2) 225
s 80 225
s 81(1), (2) 226
s 82(1), (2) 208
s 82(2)(a) 167, 208
s 82(2)(b)–(i) 208
s 83 201, 219, 228
s 84 226
s 84(1) 226
s 84(1)(b) 226
s 84(2) 227
ss 85–86 178, 180
s 85 178, 273
s 86 274
s 86(a)–(d) 179, 273, 274
s 86(e) 178, 274
s 87 275
s 88(1), (2) 274
s 88(2)(a)–(c) 274
s 89 274
s 90 275
s 91(1) 249, 251, 253, 257
s 91(1)(a), (b) 252
s 91(2)(a)–(d) 253
s 91(3)(a)–(c) 253
s 91(4), (5) 254
s 91(5)(a)–(e) 254
s 92 255
s 93 251, 255
s 94 256
s 95(a)–(c) 228
s 96(1)(b) 437
s 97 257
s 97(1) 234, 235, 242, 245–247, 257
s 97(1)(a) 231–233, 236, 588, 589
s 97(1)(b) 266, 267, 270
s 97(2) 234, 236–240, 257
s 97(3) 234, 237, 257
s 97(4) 265, 271
s 97(5) 120
s 97(6) 277
s 98 275
s 98(1) 275, 276
s 98(1)(a)–(c) 276
s 98(2) 276
s 98(3)(a), (b) 276
s 98(4)(a), (b) 277
s 99–101 278
s 99(1) 278
s 99(2)(a) 278
s 99(2)(b) 279
s 100 279
s 100(a)–(c) 280
s 101 280
s 102 280, 281
s 103 278
s 103(1)–(3) 280
s 104 221
s 105(4)–(6) 289
s 106 289
s 107 282, 283, 462
s 107(a) 283
s 107(b) 286
s 108(2) 290
s 109(a)(i), (ii) 291
s 110 290
s 111 500
s 111(1) 290
s 111(1)(a)–(c) 290
s 111(2)–(4) 291
s 112 284
s 112(1) 284
ss 114–122 292
s 114 487
s 114(a), (b) 292
s 115 216
s 115(1), (2) 293
s 116 216, 294
s 116(a), (b) 294
s 117 293
s 117(a) 216, 293
s 117(b)–(e) 293
s 118 294
s 119 294
s 120 295
s 121 293
s 122 294, 295
s 123(1) 295, 296
s 123(1)(a) 296
s 123(1)(b)(i),
296
(ii)
s 123(2) 296
s 123(3)(a), (b) 296
s 123(4) 296
s 124 52, 296
s 124(a), (b) 296
s 125(1), (2) 297
s 125(3) 298
s 125(4) 297
s 126 217, 299
s 127(1), (2) 300
s 128 300
s 129(1) 217, 299
s 129(2) 299
s 130(1) 308
s 130(1)(a), (b) 308
s 130(2) 308
s 131(1) 121, 286
s 131(2), (3) 286
s 131(3)(a) 286
s 131(3)(b), (c) 287
s 131(4)–(6) 287
s 132(1) 287
s 132(1)(a)(i),
(ii) 287
s 132(1)(c) 287
s 132(2), (3) 288
s 134 308
s 135 309
s 135(1) 310
s 135(2) 310, 313
s 135(3) 310
s 135(4) 314
s 136 124, 130
s 137(1)(a), (b) 301
s 137(1)(c) 307
s 137(1)(d) 303
s 137(1)(d)(i)–
303
(iii)
s 137(1)(d)(iv) 304
s 137(1)(e) 304
s 137(2)(a)–(d) 304
s 138(1)–(3) 302
s 139 302
s 139(a) 302
s 139(a)(i), (ii) 302
s 139(b) 302
s 140(1), (2) 303
s 141(1) 304
s 141(2) 18
s 142 305
s 142(a), (b) 305
ss 143, 144 305
s 145 308
s 145(1) 306
s 145(1)(a), (b) 306
s 145(2)(a)–(c) 306
ss 146–147 307
s 146(1) 307
s 146(1)(a), (b) 307
s 146(2)–(6) 307
s 148(1) 306
s 148(1)(a), (b) 306
s 148(2) 306
s 148(2)(a)–(c) 306
s 148(3) 306
s 149 462
s 149(1) 517
s 149(1)(a) 284, 517, 518
s 149(1)(a)(i),
518
(ii)
s 149(1)(b) 284, 517, 522
s 149(1)(c) 517, 522
s 149(2), (3) 518
s 150 522
s 151(1) 91, 524
s 151(2) 524
s 151(3), (4) 525
s 152 462
s 152(1), (2) 523
s 153(1) 523
s 153(2), (3) 524
s 153(4)(a)–(c) 524
s 153(4)(d)(i)–
524
(iii)
s 154(1) 18, 19, 525
s 154(1)(a) 525, 526
s 154(2), (3) 525
s 154(4)(a), (b) 526
s 154(5) 526
s 156(1) 526
s 156(2) 527
s 156(3) 526
s 156(4) 527
s 156(5) 527
s 157 528
s 158(1) 530
s 158(1)(a), (b) 530
s 158(2), (3) 530
s 160(1) 533
s 160(1)(a), (b) 532
s 160(2), (3) 533
s 161(1)–(4) 533
s 162(1) 282, 527, 528
s 162(2), (3) 529
s 163 529
s 163(1) 18, 527, 529
s 163(2), (3) 527, 529
s 164(1)(a) 533
s 164(1)(b) 534
s 164(2) 534
s 165(2) 534
s 166(1)–(4) 534
s 167(1), (2) 535
s 168 535
s 170(1), (2) 536
s 171(1) 527, 535, 540
s 171(2), (4) 540
s 172 434, 537
s 172(1), (2) 434, 537
s 172(3) 434
s 173(1)–(3) 538
s 174 544
s 175(1)–(2) 557
s 176 124, 502
s 176(1) 50, 557
s 176(2) 557
s 177(1) 563
s 177(1)(a) 58, 206, 563
s 177(1)(b), (c) 563
s 177(2) 557
s 177(2)(a)–(c) 558
s 177(3) 559, 560
s 177(4) 558, 561
s 177(4)(a)–(f) 558
s 177(5) 559
s 177(6) 562
s 178(1) 559
s 178(1)(a)–(c) 559
s 178(2), (3) 559
s 178(3)(a)–(c) 560
s 178(5) 559
s 179(1) 560
s 179(2)(a)–(d) 560
s 179(3)(a)–(c) 560
s 179(3)(d) 561
s 179(4)–(8) 561
s 180(2) 561
s 180(2)(a), (b) 561
s 181(1) 561, 562
s 181(2) 562
s 182(2), (3) 562
s 183(1), (2) 562
s 184(1) 562
s 184(1)(a), (b) 562
s 186(1)(a), (b) 563
s 186(2) 563, 564
s 186(3)–(5) 563
s 187(1), (2) 516, 564
s 187(3) 517, 564
s 188(a), (b) 564
s 189 565
s 190(1), (2) 565
s 191(1) 566, 567
s 191(1)(a)–(c) 567
s 191(2), (3) 567
s 191(3)(a), (b) 567
s 191(4)(a)–(c) 566
s 191(5) 566
ss 192, 193 567
s 193(a)–(c) 567
s 195(1) 545, 546, 550
s 195(2) 550
s 195(3) 551
s 195(4)(a), (b) 551
s 195(5)–(7) 551
s 196(1)–(3) 546
s 197 552
s 197(1), (2) 552
s 197(3)(a), (b) 552
s 197(4), (5) 553
s 197(6)(a) 552
s 197(6)(b) 553
s 198 552
s 198(1)–(3) 553
s 199 555
s 199(1)–(3) 555
s 200(1)–(3) 554
s 201(a) 570
s 201(b) 571, 572
s 201(f) 571
s 201(f)(i), (ii) 571
s 201(g) 571
s 202 570, 571
s 203 570, 572
s 203(a), (b) 572
s 203(c)(i), (ii) 572
s 203(d), (e) 573
s 204 572
ss 205–208 573
s 208(a), (b) 573
s 208(c)(i) 573
s 208(c)(ii), (iii) 574
s 209(1)–(3) 574
s 210 574
s 210(a), (b) 574
s 211(1)–(3) 574
s 212 575
s 212(a)–(d) 575
s 213(1) 194, 484
s 213(1)(a), (b) 484
s 213(1)(c)–( j) 195, 485
s 213(1)(k) 485, 486
s 213(1)(l), (m) 486
s 213(2), (3) 486
s 214(1), (2) 487
s 215(1) 196, 197, 488
s 215(1)(a)–(c) 196
s 215(1)(c)(i)–
196
(iv)
s 215(1)(d)–(h) 196
s 215(2) 197, 488
s 215(3) 196, 488
s 215(4) 197, 488
s 216(1) 488
s 217(1)–(2) 488
s 217(3)(a)–(b) 488
s 218(1)–(4) 489
ss 219–225 494
s 219 496
ss 220–221 498
s 220(1) 498
s 220(1)(a)–(g) 499
s 220(2) 499, 500
s 221(1), (2) 500
s 221(2)(a), (b) 500
s 221(3)–(5) 500
s 221(6) 501
s 222 498, 501
s 222(a), (b) 501
s 222(b)(i)–(iii) 501
s 223 498, 501
s 223(a) 501
s 223(b)(i)–(iii) 502
s 224(1), (2) 502
s 224(2)(a) 502
s 224(2)(a)(i),
502
(ii)
s 224(2)(b)(i),
502
(ii)
s 224(3)(a)–(c) 503
s 225(1) 503
s 225(2)(a) 497, 503
s 225(2)(b), (c),
498
(e)–(g)
ss 226–235 357
s 226(1) 357–359, 366
s 226(1)(a)–(d) 358
s 226(2) 357, 513
s 226(3) 359
s 226(4) 359, 363
s 226(5)(b) 367
s 226(6) 367
s 226(7) 368
s 227(1) 368
s 227(1)(a)–(c) 368
s 227(2)–(4) 368
s 228 369
s 228(a)–(c) 369
s 228(c)(i)–(iii) 369
s 229(1) 369
s 229(1)(a) 369
s 229(2), (3) 370
s 230(1) 371
s 232(1), (2) 371
s 232(3) 372
s 233 372
s 234(1), (2) 370
s 234(2)(a), (b) 370
s 235 370
s 236 507
s 236(1)(a)–(c) 507
s 236(2) 507
s 236(3)(a), (b) 508
s 236(4–(6) 508
s 236(7) 359, 508
s 237 508
s 237(1)(a)–(d) 509
s 237(1)(e)–(g) 510
s 237(2) 511
s 237(2)(a), (b) 511
s 237(3) 509, 510
s 237(4) 512
s 237(4)(a) 512
s 237(4)(b) 511, 512
s 237(4)(c) 357, 359, 512
s 237(4)(d) 513
s 237(5) 512
s 237(6)–(8) 514
s 238 321
s 238(b) 315, 316
s 238(b)(i) 239, 316
s 238(b)(ii) 318
s 238(b)(iii) 319
s 238(b)(iv) 240, 320
s 239 316, 323, 324, 327
s 239(1), (2) 328
s 239(2)(a), (b) 328
s 239(2)(c) 329
s 240 323, 329
s 240(a), (b) 329
s 240(c), (d) 330
s 241 239, 240, 315, 330, 331
s 241(1) 316, 321
s 241(2) 320, 321, 334
s 241(3) 337
s 241(3)(a) 121, 339
s 241(3)(b)–(g) 339
s 241(3)(h) 121, 340
s 241(3)(i)–(k) 340
s 241(3)(l) 340, 344
s 241(3)(m), (n) 340
s 241(4)(a), (b) 340
s 241(5), (6) 341
s 241(6)(a), (b) 341
s 242(1) 341
s 242(2) 342
s 243 342
s 244 344
s 244(1), (2) 355
s 244(3) 355
s 244(3)(a)–(d) 356
s 248 59, 344, 354, 355
ss 250–265 408
s 250 423, 426, 428
s 250(1) 423, 425, 428, 430
s 250(1)(a) 423
s 250(1)(b) 424
s 250(2) 430
s 250(3) 427
s 250(3)(a), (b) 427
s 251(1)(a)–(e) 424
s 251(1)(f) 424, 429
s 251(2) 424
s 251(2)(a)–(c) 424
s 251(3) 424, 425
s 253 430, 431
s 255 431
s 255(2) 431
s 256(1) 425
s 256(1)(a), (b) 425
s 256(2) 425
s 257(1)(a) 425
s 257(2) 425
s 258 423
s 258(2) 426
s 259 431
s 259(1)(a), (b) 432
s 259(2) 432
s 260(1) 432
s 260(1)(a), (b) 432
s 260(2) 432
s 260(3)(a), (h) 121
s 261 432, 433
s 261(a) 432
s 261(b), (c) 433
s 262(1), (2) 433
s 263 433
s 264(1) 458
s 264(2) 460, 470
s 265(1)(f) 433
s 266(b) 445
s 266(c) 442
s 267 18
s 268 445
s 268(1)–(5) 445
s 269(1) 446
s 269(1)(a)–(c) 446
s 269(2), (3) 446
s 269(4)(a), (b) 446
s 269(5)(a)–(c) 446
s 270(1) 448
s 270(1)(a)–(c) 448
s 270(2) 448
s 271 448
s 271(a), (b) 448
s 271(c) 449
s 272(a)–(c) 449
s 274 448
s 275 447
s 276(1) 438
s 276(2) 437
s 277(a), (b) 447
ss 278, 279 447
s 280(1), (2) 449
s 280(2)(a), (b) 449

s 280(3) 449, 450
s 280(3)(a)–(c) 450
s 281(1)–(3) 443
s 281(3)(a)–(c) 443
s 282 438
s 282(1) 438
s 282(1)(a)–(d) 439
s 282(2) 439
s 282(2)(a) 439
s 283 440, 442
s 285(1) 437, 440, 443
s 285(1)(a) 440, 443
s 285(1)(b) 440, 441, 443
s 285(1)(c) 443
s 285(1)(d), (e) 444
s 285(1)(f) 441, 444
s 285(1)(g) 444
s 285(1)(h) 438, 441, 444
s 285(1)(i), ( j) 441, 444
s 285(1)(k) 444
s 285(1)(l), (m) 441, 444
s 285(1)(n) 445
s 285(2) 442
s 286 439
s 286(1) 440
s 286(1)(a) 437, 440
s 286(1)(b), (c) 441
s 286(2) 439, 440
s 287 450
s 287(1) 450, 456
s 287(1)(a)–(d) 450
s 287(2) 456
s 287(2)(a)–(e) 451
s 287(3) 452, 456
s 287(3)(a), (b) 455, 456
s 287(4) 463
s 287(4)(a) 464
s 287(4)(b)(i)–
464
(vi)
s 287(5) 460, 464
s 288(1)(a) 455
s 288(1)(b) 455, 459
s 288(1)(c) 455, 459
s 288(2) 459, 460
s 289 454, 462
s 290 454
s 291 461, 463
ss 293, 294 465
s 294(a), (b) 465, 466
s 295 459, 463
s 295(c) 459
s 296 465, 466
s 296(b)–(f) 467
s 296(g), (h) 467, 470
s 297(1) 470
s 297(1)(a), (b) 471
s 297(2) 472
s 297(2)(a), (b) 472
s 298 467
s 299(1) 469
s 299(3) 470
s 300 465
s 300(1)(a) 466, 468
s 300(1)(b) 468
s 300(1)(c)(i)–
468
(iii)
s 300(1)(c)(iv) 469
s 300(2) 468
s 300(3)(a), (b) 468
s 300(4), (5) 469
s 301 465
s 301(1)(a)–(d) 468
s 302(b) 383
s 302(c) 375, 379
s 303 18
s 304(1)(a), (b) 379
s 304(2) 378
s 305(a), (b) 376
s 305(c)–(f) 377
s 306 377, 378
s 307 378
s 307(a), (b) 378
s 308(1)(a) 383
s 308(1)(b)(i)– 383
(iii)
s 308(2) 383
s 308(2)(a)–(c) 383
s 308(2)(c)(i), (ii) 383
s 308(2)(d)(i)–
384
(iv)
s 308(3) 383
s 308(3)(a)–(h) 384
s 308(4) 385
s 309(1) 385
s 309(1)(a)–(c) 385
s 309(2) 385
s 310 385
s 310(a)–(c) 385
s 311(1), (2) 386
s 311(2)(a)–d) 386
s 311(3) 386
s 311(4)–(6) 387
s 312(1) 380, 387
s 312(2) 387
s 312(2)(a), (b) 387
s 312(3) 387
s 312(4)(a), (b) 388
s 312(5) 388
s 313(1)(a), (b) 378
s 313(2) 378
s 314 399
s 314(1) 399–401
s 314(1)(a)–(d) 401
s 314(2) 401
s 314(3)(a)–(d) 402
s 314(4)(a), (b) 402
s 314(6) 403
s 314(6)(a)–(c) 403
s 314(7) 403
s 314(7)(a), (b) 403
s 315 388
s 315(1)–(3) 389
s 316(1)–(6) 390
s 317 391
s 318 393, 396, 397, 404
s 318(1) 404
s 318(1)(a), (b) 404
s 318(2)(a), (b) 404
s 318(3)–(7) 405
s 318(7)(a), (b) 406
s 318(8) 406
s 318(8)(a), (b) 406
s 318(9), (10) 406
s 318(12), (13) 407
s 318(14) 393, 397, 404
s 320 391
s 321(1)(a), (b) 391
ss 322–325 473
s 322(a)–(d) 476
s 322(e)(i), (ii) 477
s 323(1)(a), (b) 477
s 323(2)(a), (b) 477
s 323(3) 477
s 324 475
s 324(a) 479, 480
s 324(b) 480
s 325 480
s 326(1) 19, 92
s 326(3) 19
s 328 20
s 328(1), (2) 20
s 329 20
s 329(a)–(d) 20
s 330(1), (2) 20
s 331(1), (2) 20
s 332(1), (2) 21
s 333 21
s 333(a), (b) 21
s 334(1), (2) 21
s 335(1), (2) 21
s 336(1) 21
s 336(1)(a)–( j) 22
s 336(2) 22
s 336(2)(a)–(c) 22
s 336(2)(d)–(g) 23
s 336(3)–(6) 23
s 337(1)–(3) 23
s 338 25
s 338(a)–(c) 25
s 340(1)–(4) 26
s 341(1), (2) 28
s 342(1), (2) 28
s 342(3)(a)–(c) 28
s 343 29
s 344(1) 26
s 344(1)(a)–(m) 27
s 344(2)(a)–(d) 27
s 344(2)(e) 28
s 345 28
s 346(1), (2) 28
s 346(3) 29
s 347 29
s 348(1)–(3) 29
s 349(1), (2) 29
s 350 29
s 351(1), (2) 30
s 352(1), (2) 30
s 353(1), (2) 30
s 354 31
s 355(1)–(3) 31
s 355(4), (5) 32
s 356(1)–(3) 32
s 357(1)–(5) 33
s 358 33
ss 360–369 37
s 360 64
s 360(1)(a) 64
s 362(1) 63
s 503 488
s 503(1)(a) 50, 52
s 509(1) 40
s 509(1)(a) 40, 41
s 509(1)(b)–(f) 41
ss 514–517 52
s 514 52
s 515 53
s 515(a) 53
s 515(a)(i), (ii) 53
s 515(b) 53
s 515(c)–(f) 54
s 516 53, 55
s 516(a) 55
s 516(a)(i)–(iii) 55
s 516(b)(i)–(iv) 55
s 516(c)–(e) 55
ss 518–526 344
ss 518–523 344
s 518(1), (2) 346
s 518(2)(a)–(d) 346
s 518(3) 347
s 518(4), (5) 348
s 519(1) 347
s 519(1)(a)–(l) 347
s 520(1), (2) 348
s 521(1), (2) 348
ss 522, 523 348
ss 524–526 344
s 524(1) 354
s 526 354
s 531(1)(f) 354
s 533 433
ss 538, 540 90
s 540(a) 90
s 542(1) 381
s 542(2) 382
s 543 76, 77, 128, 408
s 543(1) 15, 18, 25, 39, 182, 187, 310, 317, 477
s 543(1)(a) 476
s 543(1)(f) 128, 200, 227, 434, 435
s 544(1) 438
Companies Act
7
1995
Companies
3, 6, 7
Ordinance 1885
s 11 7
Securities Act
2001 374, 473, 569
Grenada
Companies
3, 4, 7
Ordinance 1880
Companies
4, 7
Ordinance 1927
5, 13, 15, 18, 19, 24, 25, 37, 44, 45, 53, 55, 63, 65, 76, 77, 91, 92,
119, 120, 131, 137, 138, 143, 150, 152, 153, 155–157, 163, 164,
168, 172, 173, 180, 182, 195, 201, 203, 205–208, 215–218,
220–228, 230, 237, 265, 273–277, 280, 281, 284, 286–292,
Companies Act 295–303, 307–309, 315, 316, 318–320, 323, 327, 330, 331, 333,
1994 340–342, 344, 347, 354–357, 359, 362, 363, 366–371, 374–380,
382, 383, 385–393, 396, 398–410, 412, 423, 427, 429–445, 447,
448, 451–456, 458–470, 472, 473, 475–477, 483–489, 494, 496,
499–501, 503, 507–513, 515–518, 522–526, 528–537, 540,
543–547, 550–554, 556–566, 568–572, 575, 589
Pt I, Div A 39
Pt I, Div C 133, 182
Pt I Div I 545
Pt I Div J 569
Pt I Div K 483
s 3 39
s 4(1) 39, 44, 45, 90, 117, 297
s 4(2) 44
s 4(2)(a)–(c) 44
s 4(3) 51
s 5 46, 117
s 5(1) 46, 49
s 5(1)(a) 47
s 5(1)(b) 47, 133, 134, 484
s 5(1)(b)(i) 47
s 5(1)(b)(ii) 48
s 5(1)(c) 48
s 5(1)(d) 49, 209

s 5(1)(e) 49, 118, 486
s 5(2) 46, 49, 486
s 7 46
s 8 40, 42, 43
s 9 43
ss 10–15 52
s 10(1 56
s 11(a), (b) 53
s 12 56
s 12(a), (b) 56
s 14 57
s 15(1), (2) 57
s 16 71, 79
s 16(1) 80
s 16(2) 71
s 16(4) 71, 84
s 16(5) 71
ss 17–25 108
s 17 109, 110, 119
s 17(1) 41, 116, 117
s 17(2) 116, 117
s 17(3) 117
s 17(4)(a), (b) 118
s 18 109
s 18(1) 118
s 19 109, 110, 118, 119
s 20 122, 123, 429
s 21 122, 124–127
s 21(a) 130, 131
s 21(b) 130, 131
s 21(c) 131
s 21(d) 128, 129
s 21(e) 129, 130
s 21(f) 130
ss 26–57 132
s 26(1) 182–184, 545
s 26(2) 137, 138
s 27 186, 189, 190
s 27(a)–(c) 186
s 28 185, 187, 188
s 28(a) 185, 187, 192, 193
s 28(b) 187, 188
s 29(1) 91, 136
s 29(2) 140
s 30(1) 144
s 30(1)(a) 144
s 30(1)(b) 144–146
s 30(2) 146
s 30(3) 145, 146
s 31(1) 147
s 31(2)–(5) 148
s 31(6)(a) 148, 149
s 31(6)(b), (c) 149
s 31(7)(a), (b) 149
s 33(1), (4)–(6) 188
s 34 142
s 34(1) 142, 143
s 34(2) 143
s 34(2)(a)–(c) 143
s 35(1), (2) 143
s 36 143, 144
s 37(1) 152, 153, 155

s 37(2) 153
s 37(2)(a), (b) 153
s 38(1), (2) 153
s 39 152, 155
s 39(2) 155
s 39(2)(a), (b) 155
s 40 155, 156
s 40(1)(a), (b) 156
s 40(1)(c) 157
s 40(2)(a), (b) 157
s 41(1) 158, 190
s 41(2) 158, 159
s 42 161
s 44 175
s 44(1) 175, 179
s 44(1)(a)–(c) 175
s 44(2), (3) 176
s 44(3)(a) 176
s 44(3)(b) 177
s 44(4), (5) 176, 177
s 44(5)(a) 177
s 44(5)(b) 178
s 44(6) 176, 178
s 45(1)–(3) 179
s 45(4)(a), (b) 180
ss 46, 47 180
s 49 157
s 49(1), (2) 157
s 49(3)(a), (b) 157
s 50 180
s 51 167, 172, 174
s 51(a), (b) 172
s 52 167
s 52(1), (2) 173, 174
s 52(3) 174
ss 53–55 162
s 53 124, 130, 163
s 53(1), (2) 163
s 53(2)(a), (b) 163
s 54 163
s 54(a) 164
s 54(b)–(d) 165
s 54(e)(i)–(iii) 165
s 55 164
s 57(1), (2) 556
s 58(1) 119, 203, 205, 228
s 58(1)(a) 200, 268
s 58(1)(b) 167, 168, 200
s 59 228
s 59(2) 228
s 60 228
s 60(1) 229
s 61 228
s 61(1), (2) 229
s 61(2)(a)–(e) 229
s 62(1) 18, 209
s 63 119, 206
s 64(1) 207
s 64(2)–(4) 207
s 65 224
s 65(1), (2) 224
s 66(1) 210
s 66(2) 211
s 66(3) 201
s 67(1) 211
s 67(1)(a), (b) 211
s 67(2)–(4) 211
s 68 212
s 69 124, 215, 502
s 69(1) 46, 50, 213
s 69(2) 46, 214
s 69(3) 46, 214, 215, 217, 220, 282, 284
s 69(4)–(6) 215, 220
s 69(7), (8) 216
s 70(1), (2) 203
s 71 209, 217
s 71(a) 209, 217
s 71(b)–(e) 218
s 71(h) 210
s 72 220
s 73 221
s 73(1) 222
s 73(1)(a), (b) 221
s 73(2), (3) 222
s 74(1), (2) 222
s 74(3) 223
s 74(3)(a), (b) 219
s 74(4) 223
s 74(4)(a), (b) 219
s 75(1), (2) 218
s 75(5) 219, 220
s 76 209
s 77 124
s 78 225
s 78(1) 224
s 78(2) 225
s 79(1) 224
s 79(2) 225
s 80 225
s 81(1), (2) 226
s 82(1), (2) 208
s 82(2)(a) 167, 208
s 82(2)(b)–(i) 208
s 83 201, 219, 228
s 84 226
s 84(1) 226
s 84(1)(b) 226
s 84(2) 227
ss 85–86 178, 180
s 85 178, 273
s 86 274
s 86(a)–(d) 179, 273, 274
s 86(e) 178, 274
s 87 275
s 88(1), (2) 274
s 88(2)(a)–(c) 274
s 89 274
s 90 275
s 91(1) 249, 251, 253, 257
s 91(1)(a), (b) 252
s 91(2)(a)–(d) 253
s 91(3)(a)–(c) 253
s 91(4), (5) 254
s 91(5)(a)–(e) 254
s 92 255
s 93 251, 255
s 94 256
s 95(a)–(c) 228
s 96(1)(b) 437
s 97 257
s 97(1) 234, 235, 242, 245–247, 257
s 97(1)(a) 231–233, 236, 588, 589
s 97(1)(b) 266, 267, 270
s 97(2) 234, 236–240, 257
s 97(3) 234, 237, 257
s 97(4) 265, 271
s 97(5) 120
s 97(6) 277
s 98 275
s 98(1) 275, 276
s 98(1)(a)–(c) 276
s 98(2) 276
s 98(3)(a), (b) 276
s 98(4)(a), (b) 277
s 99–101 278
s 99(1) 278
s 99(2)(a) 278
s 99(2)(b) 279
s 100 279
s 100(a)–(c) 280
s 101 280
s 102 280, 281
s 103 278
s 103(1)–(3) 280
s 104 221
s 105(4)–(6) 289
s 106 289
s 107 282, 283, 462
s 107(a) 283
s 107(b) 286
s 108(2) 290
s 109(a)(i), (ii) 291
s 110 290
s 111 500
s 111(1) 290
s 111(1)(a)–(c) 290
s 111(2)–(4) 291
s 112 284
s 112(1) 284
ss 114–122 292
s 114 487
s 114(a), (b) 292
s 115 216
s 115(1), (2) 293
s 116 216, 294
s 116(a), (b) 294
s 117 293
s 117(a) 216, 293
s 117(b)–(e) 293
s 118 294
s 119 294
s 120 295
s 121 293
s 122 294, 295
s 123(1) 295, 296

s 123(1)(a) 296
s 123(1)(b)(i),
296
(ii)
s 123(2) 296
s 123(3)(a), (b) 296
s 123(4) 296
s 124 52, 296
s 124(a), (b) 296
s 125(1), (2) 297
s 125(3) 298
s 125(4) 297
s 126 217, 299
s 127(1), (2) 300
s 128 300
s 129(1) 217, 299
s 129(2) 299
s 130(1) 308
s 130(1)(a), (b) 308
s 130(2) 308
s 131(1) 121, 286
s 131(2), (3) 286
s 131(3)(a) 286
s 131(3)(b), (c) 287
s 131(4)–(6) 287
s 132(1) 287
s 132(1)(a)(i),
287
(ii)
s 132(1)(c) 287
s 132(2), (3) 288
s 134 308
s 135 309
s 135(1) 310
s 135(2) 310, 313
s 135(3) 310
s 135(4) 314
s 136 124, 130
s 137(1)(a), (b) 301
s 137(1)(c) 307
s 137(1)(d) 303
s 137(1)(d)(i)–
303
(iii)
s 137(1)(d)(iv) 304
s 137(1)(e) 304
s 137(2)(a)–(d) 304
s 138(1)–(3) 302
s 139 302
s 139(a) 302
s 139(a)(i), (ii) 302
s 139(b) 302
s 140(1), (2) 303
s 141(1) 304
s 141(2) 18
s 142 305
s 142(a), (b) 305
ss 143, 144 305
s 145 308
s 145(1) 306
s 145(1)(a), (b) 306
s 145(2)(a)–(c) 306
ss 146–147 307
s 146(1) 307
s 146(1)(a), (b) 307
s 146(2)–(6) 307
s 148(1) 306
s 148(1)(a), (b) 306
s 148(2) 306
s 148(2)(a)–(c) 306
s 148(3) 306
s 149 462
s 149(1) 517
s 149(1)(a) 284, 517, 518
s 149(1)(a)(i),
518
(ii)
s 149(1)(b) 284, 517, 522
s 149(1)(c) 517, 522
s 149(2), (3) 518
s 150 522
s 151(1) 91, 524
s 151(2) 524
s 151(3), (4) 525
s 152 462
s 152(1), (2) 523
s 153(1) 523
s 153(2), (3) 524
s 153(4)(a)–(c) 524
s 153(4)(d)(i)–
524
(iii)
s 154(1) 18, 19, 525
s 154(1)(a) 525, 526
s 154(2), (3) 525
s 154(4)(a), (b) 526
s 154(5) 526
s 156(1) 526
s 156(2) 527
s 156(3) 526
s 156(4) 527
s 156(5) 527
s 157 528
s 158(1) 530
s 158(1)(a), (b) 530
s 158(2), (3) 530
s 160(1) 533
s 160(1)(a), (b) 532
s 160(2), (3) 533
s 161(1)–(4) 533
s 162(1) 282, 527, 528
s 162(2), (3) 529
s 163 529
s 163(1) 18, 527, 529
s 163(2), (3) 527, 529
s 164(1)(a) 533
s 164(1)(b) 534
s 164(2) 534
s 165(2) 534
s 166(1)–(4) 534
s 167(1), (2) 535
s 168 535
s 170(1), (2) 536
s 171(1) 527, 535, 540
s 171(2), (4) 540
s 172 434, 537
s 172(1), (2) 434, 537
s 172(3) 434
s 173(1)–(3) 538
s 174 544
s 175(1)–(2) 557
s 176 124, 502
s 176(1) 50, 557
s 176(2) 557
s 177(1) 563
s 177(1)(a) 58, 206, 563
s 177(1)(b), (c) 563
s 177(2) 557
s 177(2)(a)–(c) 558
s 177(3) 559, 560
s 177(4) 558, 561
s 177(4)(a)–(f) 558
s 177(5) 559
s 177(6) 562
s 178(1) 559
s 178(1)(a)–(c) 559
s 178(2), (3) 559
s 178(3)(a)–(c) 560
s 178(5) 559
s 179(1) 560
s 179(2)(a)–(d) 560
s 179(3)(a)–(c) 560
s 179(3)(d) 561
s 179(4)–(8) 561
s 180(2) 561
s 180(2)(a), (b) 561
s 181(1) 561, 562
s 181(2) 562
s 182(2), (3) 562
s 183(1), (2) 562
s 184(1) 562
s 184(1)(a), (b) 562
s 186(1)(a), (b) 563
s 186(2) 563, 564
s 186(3)–(5) 563
s 187(1), (2) 516, 564
s 187(3) 517, 564
s 188(a), (b) 564
s 189 565
s 190(1), (2) 565
s 191(1) 566, 567
s 191(1)(a)–(c) 567
s 191(2), (3) 567
s 191(3)(a), (b) 567
s 191(4)(a)–(c) 566
s 191(5) 566
ss 192, 193 567
s 193(a)–(c) 567
s 195(1) 545, 546, 550
s 195(2) 550
s 195(3) 551
s 195(4)(a), (b) 551
s 195(5)–(7) 551
s 196(1)–(3) 546
s 197 552
s 197(1), (2) 552
s 197(3)(a), (b) 552
s 197(4), (5) 553
s 197(6)(a) 552
s 197(6)(b) 553
s 198 552
s 198(1)–(3) 553
s 199 555
s 199(1)–(3) 555
s 200(1)–(3) 554
s 201(a) 570
s 201(b) 571, 572
s 201(f) 571
s 201(f)(i), (ii) 571
s 201(g) 571
s 202 570, 571
s 203 570, 572
s 203(a), (b) 572
s 203(c)(i), (ii) 572
s 203(d), (e) 573
s 204 572
ss 205–208 573
s 208(a), (b) 573
s 208(c)(i) 573
s 208(c)(ii), (iii) 574
s 209(1)–(3) 574
s 210 574
s 210(a), (b) 574
s 211(1)–(3) 574
s 212 575
s 212(a)–(d) 575
s 213(1) 194, 484
s 213(1)(a), (b) 484
s 213(1)(c)–( j) 195, 485
s 213(1)(k) 485, 486
s 213(1)(l), (m) 486
s 213(2), (3) 486

s 214(1), (2) 487
s 215(1) 196, 197, 488
s 215(1)(a)–(c) 196
s 215(1)(c)(i)–
196
(iv)
s 215(1)(d)–(h) 196
s 215(2) 197, 488
s 215(3) 196, 488
s 215(4) 197, 488
s 216(1) 488
s 217(1)–(2) 488
s 217(3)(a)–(b) 488
s 218(1)–(4) 489
ss 219–225 494
s 219 496
ss 220–221 498
s 220(1) 498
s 220(1)(a)–(g) 499
s 220(2) 499, 500
s 221(1), (2) 500
s 221(2)(a), (b) 500
s 221(3)–(5) 500
s 221(6) 501
s 222 498, 501
s 222(a), (b) 501
s 222(b)(i)–(iii) 501
s 223 498, 501
s 223(a) 501
s 223(b)(i)–(iii) 502
s 224(1), (2) 502
s 224(2)(a) 502
s 224(2)(a)(i),
502
(ii)
s 224(2)(b)(i),
502
(ii)
s 224(3)(a)–(c) 503
s 225(1) 503
s 225(2)(a) 497, 503
s 225(2)(b), (c), 498
(e)–(g)
ss 226–235 357
s 226(1) 357–359, 366
s 226(1)(a)–(d) 358
s 226(2) 357, 513
s 226(3) 359
s 226(4) 359, 363
s 226(5)(b) 367
s 226(6) 367
s 226(7) 368
s 227(1) 368
s 227(1)(a)–(c) 368
s 227(2)–(4) 368
s 228 369
s 228(a)–(c) 369
s 228(c)(i)–(iii) 369
s 229(1) 369
s 229(1)(a) 369
s 229(2), (3) 370
s 230(1) 371
s 232(1), (2) 371
s 232(3) 372
s 233 372
s 234(1), (2) 370
s 234(2)(a), (b) 370
s 235 370
s 236 507
s 236(1)(a)–(c) 507
s 236(2) 507
s 236(3)(a), (b) 508
s 236(4–(6) 508
s 236(7) 359, 508
s 237 508
s 237(1)(a)–(d) 509
s 237(1)(e)–(g) 510
s 237(2) 511
s 237(2)(a), (b) 511
s 237(3) 509, 510
s 237(4) 512
s 237(4)(a) 512
s 237(4)(b) 511, 512
s 237(4)(c) 357, 359, 512
s 237(4)(d) 513
s 237(5) 512
s 237(6)–(8) 514
s 238 321
s 238(b) 315, 316
s 238(b)(i) 239, 316
s 238(b)(ii) 318
s 238(b)(iii) 319
s 238(b)(iv) 240, 320
s 239 316, 323, 324, 327
s 239(1), (2) 328
s 239(2)(a), (b) 328
s 239(2)(c) 329
s 240 323, 329
s 240(a), (b) 329
s 240(c), (d) 330
s 241 239, 240, 315, 330, 331
s 241(1) 316, 321
s 241(2) 320, 321, 334
s 241(3) 337
s 241(3)(a) 121, 339
s 241(3)(b)–(g) 339
s 241(3)(h) 121, 340
s 241(3)(i)–(k) 340
s 241(3)(l) 340, 344
s 241(3)(m), (n) 340
s 241(4)(a), (b) 340
s 241(5), (6) 341
s 241(6)(a), (b) 341
s 242(1) 341
s 242(2) 342
s 243 342
s 244 344
s 244(1), (2) 355
s 244(3) 355
s 244(3)(a)–(d) 356
s 248 59, 344, 354, 355
ss 250–265 408
s 250 423, 426, 428
s 250(1) 423, 425, 428, 430
s 250(1)(a) 423
s 250(1)(b) 424
s 250(2) 430
s 250(3) 427
s 250(3)(a), (b) 427
s 251(1)(a)–(e) 424
s 251(1)(f) 424, 429
s 251(2) 424
s 251(2)(a)–(c) 424
s 251(3) 424, 425
s 253 430, 431
s 255 431
s 255(2) 431
s 256(1) 425
s 256(1)(a), (b) 425
s 256(2) 425
s 257(1)(a) 425
s 257(2) 425
s 258 423
s 258(2) 426
s 259 431
s 259(1)(a), (b) 432
s 259(2) 432
s 260(1) 432
s 260(1)(a), (b) 432
s 260(2) 432
s 260(3)(a), (h) 121
s 261 432, 433
s 261(a) 432
s 261(b), (c) 433
s 262(1), (2) 433
s 263 433
s 264(1) 458
s 264(2) 460, 470

s 265(1)(f) 433
s 266(b) 445
s 266(c) 442
s 267 18
s 268 445
s 268(1)–(5) 445
s 269(1) 446
s 269(1)(a)–(c) 446
s 269(2), (3) 446
s 269(4)(a), (b) 446
s 269(5)(a)–(c) 446
s 270(1) 448
s 270(1)(a)–(c) 448
s 270(2) 448
s 271 448
s 271(a), (b) 448
s 271(c) 449
s 272(a)–(c) 449
s 274 448
s 275 447
s 276(1) 438
s 276(2) 437
s 277(a), (b) 447
ss 278, 279 447
s 280(1), (2) 449
s 280(2)(a), (b) 449
s 280(3) 449, 450
s 280(3)(a)–(c) 450
s 281(1)–(3) 443
s 281(3)(a)–(c) 443
s 282 438
s 282(1) 438
s 282(1)(a)–(d) 439
s 282(2) 439
s 282(2)(a) 439
s 283 440, 442
s 285(1) 437, 440, 443
s 285(1)(a) 440, 443
s 285(1)(b) 440, 441, 443
s 285(1)(c) 443
s 285(1)(d), (e) 444
s 285(1)(f) 441, 444
s 285(1)(g) 444
s 285(1)(h) 438, 441, 444
s 285(1)(i), ( j) 441, 444
s 285(1)(k) 444
s 285(1)(l), (m) 441, 444
s 285(1)(n) 445
s 285(2) 442
s 286 439
s 286(1) 440
s 286(1)(a) 437, 440
s 286(1)(b), (c) 441
s 286(2) 439, 440
s 287 450
s 287(1) 450, 456
s 287(1)(a)–(d) 450
s 287(2) 456
s 287(2)(a)–(e) 451
s 287(3) 452, 456
s 287(3)(a), (b) 455, 456
s 287(4) 463
s 287(4)(a) 464
s 287(4)(b)(i)–
464
(vi)
s 287(5) 460, 464
s 288(1)(a) 455
s 288(1)(b) 455, 459
s 288(1)(c) 455, 459
s 288(2) 459, 460
s 289 454, 462
s 290 454
s 291 461, 463
ss 293, 294 465
s 294(a), (b) 465, 466
s 295 459, 463
s 295(c) 459
s 296 465, 466
s 296(b)–(f) 467
s 296(g), (h) 467, 470
s 297(1) 470
s 297(1)(a), (b) 471
s 297(2) 472
s 297(2)(a), (b) 472
s 298 467
s 299(1) 469
s 299(3) 470
s 300 465
s 300(1)(a) 466, 468
s 300(1)(b) 468
s 300(1)(c)(i)–
(iii) 468
s 300(1)(c)(iv) 469
s 300(2) 468
s 300(3)(a), (b) 468
s 300(4), (5) 469
s 301 465
s 301(1)(a)–(d) 468
s 302(b) 383
s 302(c) 375, 379
s 303 18
s 304(1)(a), (b) 379
s 304(2) 378
s 305(a), (b) 376
s 305(c)–(f) 377
s 306 377, 378
s 307 378
s 307(a), (b) 378
s 308(1)(a) 383
s 308(1)(b)(i)–
383
(iii)
s 308(2) 383
s 308(2)(a)–(c) 383
s 308(2)(c)(i), (ii) 383
s 308(2)(d)(i)–
384
(iv)
s 308(3) 383
s 308(3)(a)–(h) 384
s 308(4) 385
s 309(1) 385
s 309(1)(a)–(c) 385
s 309(2) 385
s 310 385
s 310(a)–(c) 385
s 311(1), (2) 386
s 311(2)(a)–d) 386
s 311(3) 386
s 311(4)–(6) 387
s 312(1) 380, 387
s 312(2) 387
s 312(2)(a), (b) 387
s 312(3) 387
s 312(4)(a), (b) 388
s 312(5) 388
s 313(1)(a), (b) 378
s 313(2) 378
s 314 399
s 314(1) 399–401
s 314(1)(a)–(d) 401
s 314(2) 401
s 314(3)(a)–(d) 402
s 314(4)(a), (b) 402
s 314(6) 403
s 314(6)(a)–(c) 403
s 314(7) 403
s 314(7)(a), (b) 403
s 315 388
s 315(1)–(3) 389
s 316(1)–(6) 390
s 317 391
s 318 393, 396, 397, 404
s 318(1) 404
s 318(1)(a), (b) 404
s 318(2)(a), (b) 404
s 318(3)–(7) 405
s 318(7)(a), (b) 406
s 318(8) 406
s 318(8)(a), (b) 406
s 318(9), (10) 406
s 318(12), (13) 407
s 318(14) 393, 397, 404
s 320 391
s 321(1)(a), (b) 391
ss 322–325 473
s 322(a)–(d) 476
s 322(e)(i), (ii) 477
s 323(1)(a), (b) 477
s 323(2)(a), (b) 477
s 323(3) 477
s 324 475
s 324(a) 479, 480
s 324(b) 480
s 325 480
s 326(1) 19, 92
s 326(3) 19
s 328 20
s 328(1), (2) 20
s 329 20
s 329(a)–(d) 20
s 330(1), (2) 20
s 331(1), (2) 20
s 332(1), (2) 21
s 333 21
s 333(a), (b) 21
s 334(1), (2) 21
s 335(1), (2) 21
s 336(1) 21
s 336(1)(a)–( j) 22
s 336(2) 22
s 336(2)(a)–(c) 22
s 336(2)(d)–(g) 23
s 336(3)–(6) 23
s 337(1)–(3) 23
s 338 25
s 338(a)–(c) 25
s 340(1)–(4) 26
s 341(1), (2) 28
s 342(1), (2) 28
s 342(3)(a)–(c) 28
s 343 29
s 344(1) 26
s 344(1)(a)–(m) 27
s 344(2)(a)–(d) 27
s 344(2)(e) 28
s 345 28
s 346(1), (2) 28
s 346(3) 29
s 347 29
s 348(1)–(3) 29
s 349(1), (2) 29
s 350 29
s 351(1), (2) 30
s 352(1), (2) 30
s 353(1), (2) 30
s 354 31
s 355(1)–(3) 31
s 355(4), (5) 32
s 356(1)–(3) 32
s 357(1)–(5) 33
s 358 33
ss 360–369 37
s 360 64
s 360(1)(a) 64
s 362(1) 63
s 503 488
s 503(1)(a) 50, 52
s 509(1) 40
s 509(1)(a) 40, 41
s 509(1)(b)–(f) 41
ss 514–517 52
s 514 52
s 515 53
s 515(a) 53
s 515(a)(i), (ii) 53
s 515(b) 53
s 515(c)–(f) 54
s 516 53, 55
s 516(a) 55
s 516(a)(i)–(iii) 55
s 516(b)(i)–(iv) 55
s 516(c)–(e) 55
ss 518–526 344
ss 518–523 344
s 518(1), (2) 346
s 518(2)(a)–(d) 346
s 518(3) 347
s 518(4), (5) 348
s 519(1) 347
s 519(1)(a)–(l) 347
s 520(1), (2) 348
s 521(1), (2) 348
ss 522, 523 348
ss 524–526 344
s 524(1) 354
s 526 354
s 531(1)(f) 354
s 533 433
ss 538, 540 90
s 540(a) 90
s 542(1) 381
s 542(2) 382
s 543 76, 77, 128, 408
s 543(1) 15, 18, 25, 39, 182, 187, 310, 317, 477
s 543(1)(a) 476
s 543(1)(f) 128, 200, 227, 434, 435
s 544(1) 438
Foreign
Judgments
(Reciprocal 33
Enforcement)
Act, Cap 113
Securities Act
374, 473, 569
2001
Guyana (British
Guiana)
7, 11, 13, 15, 18, 19, 25, 31, 32, 37, 44, 45, 47, 48, 53, 55, 57, 63,
65, 91, 92, 119, 131, 137, 138, 143, 147, 150, 155–157,
162–177, 180, 182, 195, 203, 205–208, 213–218, 220, 228, 230,
237, 265, 273–277, 280, 281, 284, 286–290, 292, 295, 297, 299,
Companies Act 302, 303, 307, 308, 315, 316, 318–320, 323, 327, 330, 331, 333,
1991 340–342, 344, 347, 354–356, 374–380, 382, 383, 385–393,
398–410, 412, 423, 427, 429–445, 447, 448, 451–456, 458–470,
472, 473, 475–477, 480–483, 484, 509 516–518–520, 522, 523,
525, 528, 529, 531–537, 540, 543–547, 550–560, 562–566,
568–572, 575, 589
Pt II, Div A 39
Pt II Div C 133, 182
Pt II Div I 545
Pt II Div J 569
s 1(b) 39
s 1(g) 128
s 2 76, 77
s 2(1)(b) 15
s 2(1)(h) 18
s 3 39
s 4(1) 39, 44, 45, 90, 117, 297
s 4(2) 44
s 4(2)(a)–(c) 44
s 4(3) 46, 51
s 5 46, 117
s 5(1) 46, 49
s 5(1)(a) 47
s 5(1)(b) 47, 484
s 5(1)(b)(i) 47
s 5(1)(b)(ii) 48
s 5(1)(c) 48, 133, 134
s 5(1)(d) 48, 49, 209
s 5(1)(e) 49, 118, 486
s 5(2) 46, 486
s 7 46
s 8(1) 40, 42, 43
s 8(2) 43
ss 9–14 52
s 9 56
s 10(a), (b) 53
s 11 56
s 11(a), (b) 56
s 13 57
s 14(1), (2) 57
s 15 71, 74, 78, 79
s 15(1) 75–78, 80
s 15(2) 75, 77, 81–83
s 15(3) 83
s 15(3)(a), (b) 83
s 15(4) 84
s 15(5) 75, 77, 84
s 16 109, 110, 119
s 16(1) 41, 116, 117
s 16(2) 116, 117
s 16(3) 117
s 16(4)(a), (b) 118
ss 17–25 108
s 17 109, 118, 119
s 18 109, 110
s 19 122, 123, 429
s 20 122, 124–127
s 20(a), (b) 130, 131
s 20(c) 131
s 20(d) 128, 129
s 20(e) 129, 130
s 20(f) 130
ss 25–58 132
s 25(1) 182–184, 545
s 25(2) 137, 138
s 26 186, 189, 190
s 26(a)–(c) 186
s 27 185, 187, 188
s 27(a) 185, 187, 192, 193
s 27(b) 187, 188
s 28(1) 136
s 28(3) 91
s 28(9) 140
s 29(1) 91, 144
s 29(1)(a) 144
s 29(1)(b) 144–146
s 29(2) 146
s 29(3) 145, 146
s 30(1) 147
s 31(1) 147
s 31(2)–(5) 148
s 31(6)(a) 148, 149
s 31(6)(b), (c) 149
s 31(7)(a), (b) 149
s 32(1) 187, 188
s 32(4)–(6) 188
s 33 142
s 33(1) 142, 143
s 33(2) 143
s 33(2)(a)–(c) 143
s 34(1), (2) 143
s 35 143, 144
s 37(1) 152, 153
s 37(2) 153
s 37(2)(a), (b) 153
s 38 152, 155
s 38(1) 153
s 38(2) 153, 155
s 38(2)(a), (b) 155
s 39 155, 156
s 39(1)(a), (b) 156
s 39(1)(c) 157
s 39(2)(a), (b) 157
s 40(1) 158, 190
s 40(2) 158, 159
s 41 161
s 43 175
s 43(1) 175, 179
s 43(1)(a)–(c) 175
s 43(2) 176
s 43(3)–(5) 176, 177
s 43(5)(a) 177
s 43(5)(b) 178
s 43(6) 176, 178
s 44(1)–(3) 179
s 44(4)(a), (b) 180
ss 45, 46 180
s 48 157
s 48(1), (2) 157
s 48(3)(a), (b) 157
s 49 180
s 49(1) 180
s 50(3) 168
s 50(4) 174
s 50(5) 171
s 50(5)(a), (b) 172
s 50(6) 174
s 51 167
s 51(1) 167, 169
s 51(2) 170
s 52 171
s 52(1) 171
s 52(2)(a), (b) 171
s 52(3)(a), (b) 171
s 52(4) 171
s 52(5) 172
s 53 172
s 54 124, 130, 162, 166
s 54(1), (2) 165
s 54(2)(a) 165
s 54(2)(a)(i), (ii) 165
s 54(2)(b) 166
s 54(2)(c)(i), (ii) 166
s 54(3) 165
s 54(4), (5) 166
s 54(6)(a) 166
s 54(6)(b)(i), (ii) 166
s 55 162, 166
s 55(1)(a)–(c) 166
s 55(2)(a), (b) 166
s 55(2)(c), (d) 167
s 55(3) 166
s 58(1), (2) 556
s 59(1) 119, 203, 205, 228
s 59(1)(a) 200, 268
s 59(1)(b) 200
s 59(2) 228, 229
s 59(2)(a)–(e) 229
s 60 18, 209
s 61 119, 206
s 62(1)–(4) 207
s 63 224
s 63(1), (2) 224
s 64(1) 210
s 64(2) 211
s 65(1) 211
s 65(1)(a), (b) 211
s 65(2)–(4) 211
s 66(1) 212
s 66(2)–(5) 213
s 67 124, 213
s 67(1) 46, 50
s 67(1)(a) 50
s 67(2) 50, 214
s 68 215, 220
s 68(1) 201, 214, 215, 217, 220, 282, 284
s 68(2)–(4) 214
s 68(5) 216
s 69 220
ss 70, 71 221
s 71(1) 221, 222
s 71(2), (3) 222
s 72(1), (2) 218, 222
s 72(3), (4) 223
s 73(1), (2) 218
s 73(3)(a), (b) 219
s 73(4)(a), (b) 219

s 73(5) 219, 220
s 74 209
s 75 124
s 76 225
s 76(1) 224
s 76(2) 225
s 77(1) 224
s 77(2) 225
ss 78, 79 225
s 80(a) 226
s 80(1), (2) 226
s 81(1), (2) 208
s 81(2)(a)–(c) 208
s 81(2)(d) 167, 208
s 81(2)(e) 820
s 81(2)(f)–(i) 208
s 82 201, 219, 228
s 83(2) 227
ss 84–85 178, 180
s 84 178, 273
s 84(1) 226
s 84(1)(b) 226
s 85 274
s 85(a)–(d) 179, 273, 274
s 85(e) 178, 274
s 86 275
s 87(1), (2) 274
s 87(2)(a)–(c) 274
s 88 274
s 89 275
s 90(1) 249, 251, 253, 257

s 90(1)(a), (b) 252
s 90(2)(a)–(d) 253
s 90(3)(a)–(c) 253
s 90(4), (5) 254
s 90(5)(a)–(e) 254
s 91 255
s 92 251, 255
s 93 256
s 95(1)(b) 437
s 95(3) 408
s 96 257
s 96(1) 234, 235, 242, 245–247, 257
s 96(1)(a) 231–233, 236, 588, 589
s 96(1)(b) 265–267, 270
s 96(2) 234, 236–240, 257
s 96(3) 234, 237, 257
s 96(4) 120, 265, 271
s 97(6) 277
s 98 275
s 98(1) 275, 276
s 98(1)(a)–(c) 276
s 98(2) 276
s 98(3)(a), (b) 276
s 98(4)(a), (b) 277
s 99–101 278
s 99(1) 278
s 99(2)(a) 278
s 99(2)(b) 279
s 100 279
s 100(a)–(c) 280
s 101 280
s 102 280, 281
s 103 278
s 103(1)–(3) 280
s 104 221
s 105(1) 289
s 106 289
s 107 462
s 107(1) 282, 283
s 107(1)(a) 283
s 107(1)(b) 286
s 108(2) 290
s 109(a)(i), (ii) 291
s 110 290
s 111(1) 290
s 112(1) 284
ss 114–122 292
s 114(a), (b) 292
s 115 216
s 115(1), (2) 293
s 116 216, 294
s 116(a), (b) 294
s 117 293
s 117(a) 216, 293
s 117(b)–(e) 293
ss 118, 119 294
s 120 295
s 121 293
s 122 294, 295
s 123(1) 295, 296
s 123(1)(a) 296
s 123(1)(b)(i),
296
(ii)
s 123(2) 296
s 123(3)(a), (b) 296
s 123(4) 296
s 124 296
s 124(a), (b) 296
s 125(1)–(3) 297
s 125(4) 298
s 129 217, 299
s 130(1), (2) 300
s 131 300
s 132(1), (2) 217, 299
s 134(1) 308
s 134(1)(a), (b) 308
s 134(2) 308
s 135 286
s 135(1) 121, 286
s 135(3), (4) 286
s 135(4)(a) 286
s 135(4)(b), (c) 287
s 135(5)–(7) 287
s 136(1) 287
s 136(1)(a)(i), 287
(ii)
s 136(1)(b) 287
s 136(2), (3) 288
s 140 124, 130
ss 141–152 300
s 141(1)(a), (b) 301
s 141(1)(c) 307
s 141(1)(d) 303
s 141(1)(d)(i)–
303
(iii)
s 141(1)(d)(iv) 304
s 141(1)(e) 304
s 141(2)(a)–(d) 304
s 142(1)–(3) 302
s 143 302
s 143(a) 302
s 143(a)(i), (ii) 302
s 143(b) 302
s 144(1), (2) 303
s 145(1) 304
s 145(2) 18
s 146 305
s 146(a), (b) 305
ss 147, 148 305
s 149(1) 306
s 149(1)(a), (b) 306
s 149(2)(a)–(c) 306
ss 150–151 307
s 150(1) 307
s 150(1)(a), (b) 307
s 150(2)–(6) 307
s 151 308
s 151(1) 91
s 152(1) 306
s 152(1)(a), (b) 306
s 152(2) 306
s 152(2)(a)–(c) 306
s 152(3) 306
s 153 462
s 154(1) 523
s 154(1)(b) 522
s 155 523
s 156 525
s 156(a) 18, 19, 525
s 157(1), (2) 516
s 157(4) 517, 564
s 158(1) 284, 517
s 158(2) 284
s 159(1), (2) 518
s 159(4) 519, 523
s 159(5)(a), (b) 518
s 160(1)–(3) 519
s 160(3)(a) 519
s 160(3)(b)(i)–
519
(iii)
s 161(1) 520
s 161(1)(b) 520
s 161(2)–(4) 520
s 168 284
s 170(1) 530
s 170(2)(a), (b) 531
s 170(3)(a), (b) 531
s 170(4) 531
s 171(1)–(3) 532
s 171(3)(a)–(c) 532
s 171(4)–(7) 532
s 172(1) 282, 527, 528
s 172(2), (3) 529
s 173 529
s 173(1) 18, 527, 529

s 173(2), (3) 529
s 174(1)(a) 533
s 174(1)(b) 534
s 174(2) 534
s 175(2) 534
s 176(1)–(4) 534
s 177(1), (2) 535
s 178 535
s 179 459
s 180(1)–(4) 536
s 181(1) 527, 535, 540
s 181(2), (4) 540
s 182 537
s 182(1), 2) 537
s 183(1)–(3) 538
s 185(1) 284
s 186 544
s 187(1), (2) 557
s 188 124
s 188(1) 46, 50, 557
s 188(2) 557
s 188(7) 560
s 189(1) 563
s 189(1)(a) 58, 206, 563
s 189(1)(b), (c) 563
s 189(2) 557
s 189(2)(a)–(c) 558
s 189(3) 558
s 189(3)(a)–(f) 558
s 189(4), (5) 559
s 189(5)(a)–(c) 559
s 189(6) 559
s 189(6)(a)–(c) 560
s 189(8) 560
s 189(8)(i) 559, 561
s 189(10) 561
s 189(11) 562
s 190(1)(a), (b) 563
s 190(2) 563, 564
s 190(3)–(5) 563
s 191(1), (2) 564
s 192(a), (b) 564
s 193 565
s 194(1)–(4) 566
s 195(1) 566, 567
s 195(1)(a)–(c) 567
s 195(2), (3) 567
s 195(3)(a), (b) 567
s 195(4)(a)–(c) 566
s 195(5) 566
ss 196, 197 567
s 197(a)–(c) 567
s 199(1) 545, 546, 550
s 199(2) 550
s 199(3) 551
s 199(4)(a), (b) 551
s 199(5)–7) 551
s 200(1), (2) 546
s 200(3) 547
s 200(4) 546
s 201 552
s 201(1), (2) 552
s 201(3)(a), (b) 552
s 201(4), (5) 553
s 201(6)(a) 552
s 201(6)(b) 553
s 202 552
s 202(1)–(3) 553
s 203 555
s 203(1)–(3) 555
s 204(1)–(3) 554
s 205(a) 570
s 205(b) 571, 572
s 205(f) 571
s 205(f)(i), (ii) 571
s 205(g) 571
s 206 570, 571
s 207 570, 572
s 207(a), (b) 572
s 207(c)(i), (ii) 572
s 207(d), (e) 573
s 208 572
ss 209–212 573
s 212(a), (b) 573
s 212(c)(i) 573
s 212(c)(ii)–(iii) 574
s 213(1)–(3) 574
s 214 574
s 214(a), (b) 574
s 215(1)–(3) 574
s 216 575
s 216(a)–(d) 575
ss 217–220 509
s 221 321
s 221(b) 315, 316
s 221(b)(i) 239, 316
s 221(b)(ii) 318
s 221(b)(iii) 319
s 221(b)(iv) 240, 320
ss 222–223 315
s 222 323, 324, 327
s 222(1) 316, 328
s 222(2) 328
s 222(2)(a), (b) 328
s 222(2)(c) 329
s 223 323, 329
s 223(a), (b) 329
s 223(c), (d) 330
s 224 239, 240, 315, 330, 331
s 224(1) 316, 321
s 224(2) 320, 321, 334
s 224(3) 337
s 224(3)(a) 121, 339
s 224(3)(b)–(g) 339
s 224(3)(h) 121, 340
s 224(3)(i)–(k) 340
s 224(3)(l) 340, 344
s 224(3)(m), (n) 340
s 224(4)(a), (b) 340
s 224(5), (6) 341
s 224(6)(a), (b) 341
s 225(1) 341
s 225(2) 342
s 226 342
s 227 344
s 227(1)–(3) 355
s 227(3)(a)–(d) 356
s 228(a), (b) 376
s 231 59, 344, 354, 355
ss 233–249 408
s 233 423, 426, 428
s 233(1) 423, 425, 428, 430
s 233(1)(a) 423
s 233(1)(b) 424
s 233(2) 430
s 233(3) 427
s 233(3)(a), (b) 427
s 235(1)(a)–(e) 424
s 235(1)(f) 424, 429
s 235(2) 424
s 235(2)(a)–(c) 424
s 235(3) 424, 425
s 237 430, 431
s 239 431
s 239(2) 431
s 240(1) 425
s 240(1)(a),)(b) 425
s 241(1)(a) 425
s 241(2) 425
s 242 423
s 242(2) 426
s 243 431
s 243(1)(a), (b) 432
s 243(2) 432
s 244(1) 432
s 244(1)(a), (b) 432
s 244(2) 432
s 245 432, 433
s 245(a) 432
s 245(b), (c) 433
s 246(1), (2) 433
s 247 433
s 247(2) 434
s 248(1) 458
s 248(2) 460, 470
s 249(1) 433
s 250(b) 445
s 250(c) 442
s 251 18
s 252(1) 433, 445
s 252(2)–(5) 445
s 253(1) 446
s 253(1)(a)–(c) 446
s 253(2), (3) 446
s 253(4)(a), (b) 446
s 253(5)(a)–(c) 446
s 254(1) 448
s 254(1)(a)–(c) 448
s 254(2) 448
s 255 448
s 255(a), (b) 448
s 255(c) 449
s 256(a)–(c) 449
s 256(2) 425
s 258 448
s 259 447
s 261(a), (b) 447
ss 262, 263 447
s 264(1), (2) 449
s 264(2)(a), (b) 449
s 264(3) 449, 450
s 264(3)(a)–(c) 450
s 265(1) 443
s 265(2) 443
s 265(3) 443
s 265(3)(a)–(c) 443
s 266 438
s 266(1) 438
s 266(1)(a)–(d) 439
s 266(2) 439
s 266(2)(a), (b) 439
s 267 440, 442
s 269(1) 443
s 269(1)(a) 440, 443
s 269(1)(b) 440, 441, 443
s 269(1)(c) 443
s 269(1)(d), (e) 444
s 269(1)(f) 441, 444
s 269(1)(g) 444
s 269(1)(h) 438, 441, 444
s 269(1)(i), ( j) 441, 444
s 269(1)(k) 444
s 269(1)(l), (m) 441, 444
s 269(1)(n) 445
s 269(2) 440, 442
s 270 439
s 270(1) 440
s 270(1)(a) 437, 440
s 270(1)(b), (c) 441
s 270(2) 439, 440
s 271 450
s 271(1) 450, 456
s 271(1)(a)–(d) 450
s 271(2) 456
s 271(2)(a)–(e) 451
s 271(3) 452, 456
s 271(3)(a), (b) 455, 456
s 271(4) 463
s 271(4)(a) 464
s 271(4)(b)(i)–
(vi) 464
s 271(5) 460, 464
s 272(1)(a) 455
s 272(1)(b), (c) 455, 459
s 272(2) 459, 460
s 273 454, 462
s 274 454
s 275 461, 463
s 276(1) 438
s 276(2) 437
ss 277, 278 465
s 278(a), (b) 465, 466
s 279 463
s 279(c) 459
s 280 465
s 280(a) 466
s 280(b)–(f) 467
s 280(g), (h) 467, 470
s 281(1) 470
s 281(1)(a), (b) 471
s 281(2) 472
s 281(2)(a), (b) 472
s 283 465
s 283(1)(a) 466
s 283(1)(b) 468
s 283(1)(c)(iv) 469
s 283(2) 468
s 283(3)(a), (b) 468
s 283(4), (5) 469
s 284 465
s 284(1)(a)–(c) 468
s 284(1)(c)(i)–
468
(iii)
s 284(1)(d) 468
s 285(b) 383
s 285(c) 375, 379
s 285(1) 437, 440
s 286 18
s 287(1)(a), (b) 379
s 287(2) 378
s 288(c)–(f) 377
s 289 377, 378
s 290 378
s 290(a), (b) 378
s 291(1)(a) 383
s 291(1)(b)(i)–
383
(iii)
s 291(2) 383
s 291(2)(a)–(c) 383
s 291(2)(c)(i), (ii) 383
s 291(2)(d)(i),
384
(iv)
s 291(3) 383
s 291(3)(a)–(h) 384
s 291(4) 385
s 292 467
s 292(1) 385
s 292(1)(a)–(c) 385
s 292(2) 385
s 293 385
s 293(a)–(c) 385
s 294(1), (2) 386
s 294(2)(a)–(d) 386
s 294(3)–(6) 387
s 295(1) 380, 387
s 295(2) 387
s 295(2)(a), (b) 387
s 295(3) 387
s 295(4)(a), (b) 388
s 295(5) 388
s 295(1)(a) 378
s 295(1)(b) 378
s 295(2) 378
s 297 399
s 297(1) 399–401
s 297(1)(a)–(d) 401
s 297(2) 401
s 297(3)(a)–d) 402
s 297(4)(a), (b) 402
s 297(6) 403
s 297(6)(a)–(c) 403
s 297(7) 403
s 297(7)(a), (b) 403
s 298 388
s 298(1)–(3) 389
s 299(1)–(6) 390
s 300 391
s 301 393, 397, 404
s 301(1) 404
s 301(1)(a), (b) 404
s 301(2)(a), (b) 404
s 301(3)–(7) 405
s 301(7)(a), (b) 406
s 301(8) 406
s 301(8)(a), (b) 406
s 301(9), (10) 406
s 301(12), (13) 407
s 301(14) 393, 397, 404
s 303 391
s 304(1)(a), b) 391
s 305(1)(a) 477
s 306(1)(a) 482
s 306(1)(b) 481
s 306(1)(c)(i)–
481
(iii)
s 306(1)(d) 482
s 306(2) 481
s 306(2)(a), (b),
481
(d)
s 306(3) 481
s 306(3)(a), (b) 481
s 307 482
s 307(1) 480
s 307(3) 481
s 307(3)(a), (b) 481
ss 308–309 473
s 308(a)–(d) 476
s 308(e)(i), (ii) 477
s 308(2)(a), (b) 477
s 308(3)(a), (b) 477
s 309 475
s 309(1)(a) 479, 480
s 309(1)(b) 480
s 309(2) 480
s 310(1)(a) 25
s 310(2) 25
s 310(2)(a), (b),
25
(e)
s 310(3) 26
s 312(1)–(4) 26
s 313(1), (2) 28
s 314(1), (2) 28
s 314(3)(a)–(c) 28
s 315 29
s 316(1) 26
s 316(1)(a)–(m) 27
s 316(2)(a)–(d) 27
s 316(2)(e) 28
s 317 28
s 318(1), (2) 28
s 318(3) 29
s 319 29
s 320(1)–(3) 29
s 321(1) 29
s 321(1)(a), (b) 29
s 321(2) 29
s 322 29
s 323(1)–(3) 30
s 324(1)–(3) 30
s 325(1)–(3) 30
s 326 31
s 327(1), (2) 31
s 328(1)–(3) 31
s 328(4)(a) 32
s 328(5) 32
s 329 32
s 329(2), (4) 32
s 330(1)–(5) 33
s 331 33
ss 334–343 37
s 334 64
s 334(1)(a) 64
s 336(1)(a) 63
s 479(1)(a) 50, 52
s 485(1) 40
s 485(1)(a) 40, 41
s 485(1)(b)–(f) 41
ss 490–494 52
s 490 52
s 491 53
s 491(a) 53
s 491(a)(i), (ii) 53
s 491(b) 53
s 491(c)–(f) 54
s 492 53, 55
s 492(a) 55
s 492(a)(i)–(iii) 55
s 492(b)(i)–(iv) 55
s 492(c), (d) 55
s 492(e) 55
s 494 57
ss 506–511 344
s 506(1), (2) 346
s 506(2)(a)–(d) 346
s 506(3) 347
s 506(4), (5) 348
s 507(1) 347
s 507(1)(a)–(l) 347
s 508(1), (2) 348
s 509(1), (2) 348
ss 510, 511 348
ss 512–514 344
s 512(1) 354
s 514 354
s 520(1)(f) 354
s 522 433, 482
ss 527–529 90
s 531(1) 381
s 531(2) 382
s 535 182
s 535(b) 477
s 535(c) 476
s 535(f) 15
s 535(h) 317, 435
s 535(i) 128, 200, 227
s 535(t) 187
s 535(v) 317
s 543(1) 383
s 535(h) 383
s 541(1) 438
Sch 4, Pt I, para
194
1(1)(a)(ii), (iii)
Sch 4, Pt I, para
194
4
Sch 4, Pt I, para 194
4(a)–(d)
Sch 4, Pt I, para
195
4(e)
Sch 4, Pt I, para
196, 197
6(1)
Sch 6 518, 520
Companies’
Clauses and
Powers 7
Consolidation
Ordinance 1846
Companies’
Clauses and
Powers 7
Consolidation
Ordinance 1877
Companies
Clauses
(Completion of
7
Titles) Ordinance
1898
Companies
(Consolidation) 4, 7
Ordinance 1913
Securities
Industry Act 1998 374, 569
Cap 83
s 3 473
Jamaica
Banking Act 521, 530
Building Societies
521, 530
Act
Companies Act 7, 8
1864
Companies Act
3
1865
s 56 140
s 58 139
Companies Act
4
1965
8, 11–14, 16–19, 24, 25, 35–37, 43, 44–52, 54–60, 63, 65, 92,
120, 134–138, 140, 141, 144, 146, 148, 150, 156, 158–161, 163,
164, 167–173, 175–180, 182–184, 187, 190, 195, 197, 198, 200,
202–204, 206, 208, 210, 212–215, 219, 221–223, 227, 229, 237,
Companies Act 240, 254, 265, 271, 273, 281, 285, 286–289, 292, 295, 297–299,
2004 302, 303, 315, 316, 318, 323, 327, 330, 331, 333, 341, 344, 347,
349–355, 374, 376, 378, 383, 385–391, 396, 398–403, 408–410,
412, 423, 425, 427–438, 447, 452, 455, 456, 468, 471, 472, 483,
489, 490, 509, 516–518, 520, 522, 523, 529–531, 533–537, 540,
541, 543–546, 551–558, 568, 570
Pt I 39
Pt II 133, 182, 374
Pt VI 452
Pt X 34
s 2 182, 183, 202, 376, 379
s 2(1) 16, 39, 200, 227, 317, 383, 435
s 3 39
s 3(1) 39, 44, 46, 90, 117, 297
s 3(2)(a) 92
s 3(2)(b) 24, 92
s 3(2)(c) 92
ss 4–7 108
s 4 109, 110, 119, 120, 437
s 4(1) 41, 116, 117
s 4(2) 116, 117
s 4(3) 58, 117
s 4(4)(a), (b) 118
s 5 109, 118
s 6 109, 110, 118, 119
s 7 46, 51, 122, 123
s 7(a), (b) 51
ss 8–18 39
s 8 40, 46, 117
s 8(c) 186
s 8(1) 49, 58
s 8(1)(a) 47, 56
s 8(1)(b) 47
s 8(1)(c) 48, 133, 134, 198
s 8(1)(d) 48
s 8(1)(e) 49, 209
s 8(1)(f) 49, 118, 486
s 8(2) 49
s 8(2)(a)–(d) 50
s 8(3) 46, 49, 486
s 8(5) 47
s 8(6) 46, 58, 204, 206

s 8(6)(a)–(d) 46
s 8(7) 185–188
s 8(7)(a) 185, 187, 192, 193
s 8(7)(b) 187, 188
s 9(1) 24, 49
s 10 198, 489
s 10(1) 207, 209, 489
s 10(2) 60, 489
ss 11–14 40
s 11 58
s 12(1) 40, 42, 43
s 12(2) 43
s 13(1) 40, 42
ss 15–18 52
s 15(1) 53–55
s 15(2) 56
s 15(3) 56, 57
s 15(4), (5) 57
s 18 52
s 19 184
s 19(1) 59–63, 204
s 20(1) 63
s 25 17, 47
s 25(3), (6) 17
s 26 17
s 26(1) 18
s 26(4)(a) 18
s 27 17
s 28 108
s 29 71, 74, 79, 84
s 29(1) 75–77, 79, 80, 85

s 29(2) 75, 77, 81, 82, 85
s 29(3) 83
s 29(5) 75, 77, 84, 85
ss 30–33 108
ss 34–39 132
s 34 134
s 34(1)–(3) 135
s 34(3)(a)–(c) 135
s 34(3)(d) 136
s 35(1) 135
s 35(2)(a) 135
s 35(2)(b)(i), (ii) 135
s 35(2)(c) 135
ss 36–37 137, 138
s 36(a), (b) 137
s 37(1), (2) 137
s 37(5) 139, 140
s 37(6) 137
s 38(1) 144
s 38(1)(a) 144
s 38(1)(b) 144–146
s 38(2) 146
s 38(3) 145, 136
s 38(4) 144, 146
s 38(4)(a), (b) 146
s 38(5) 146
s 38(5)(a), (b) 147
s 38(6) 146, 147
s 38(7) 144, 146, 147
s 39(1) 147
s 39(2)–(4) 148
s 39(5)(a), (b) 148
s 39(6)(a) 148, 149
s 39(6)(b), (c) 149
s 39(7) 149
s 40(1) 376
s 40(2) 376, 386
s 40(2)(a) 386
s 40(3) 376, 386
s 40(4) 386
s 41(2) 378
s 42(1)(a), (b) 378
s 44 399
s 44(1) 399–401
s 44(1)(a)–(d) 401
s 44(2)(a)–(d) 402
s 44(2)(d)(i)–(iii) 402
s 44(3) 403
s 44(3)(a)–(c) 403
s 44(4) 403
s 44(4)(a), (b) 403
s 46(1) 380, 387
s 46(2) 387
s 46(2)(a), (b) 387
s 46(3) 387
s 46(3)(a), (b) 388
s 46(4) 388
ss 48–72 132
s 48(1)–(6) 390
s 49(1) 391
s 51 388
s 51(1) 167, 389
s 51(2), (4), (6) 389
s 53 180
s 55(1) 381
s 55(2) 382
s 56(1) 159, 190
s 56(2), (3) 159
s 56(4) 160
s 56(4)(a) 160
s 57(1) 159
s 57(2), (3) 160
s 58 152, 155
s 58(4)–(7) 155
s 58(4) 156
s 58(4)(a)–(c) 156
s 58(5)(a) 156
s 59 155, 156
s 59(1)(a), (b) 156
s 59(1)(c) 157
s 59(3) 157
s 61 142
s 61(1) 142
s 61(2), (3) 143
s 61(3)(a)–(c) 143
s 62 160
s 62(1) 158, 160
s 62(1)(a), (b) 160
s 62(1)(c), (d) 161
s 62(2)–(4), (6) 161
s 71 175
s 71(1) 175, 179
s 71(1)(a)–(c) 175
s 71(3) 176, 177, 179
s 71(4)(a)–(c) 177
s 71(5) 176, 177
s 71(5)(a), (b) 177
s 71(6) 176, 178
s 71(7) 179
s 73(1)(a) 194, 197, 198
s 73(1)(b) 198
s 73(2), (3) 198
s 74(1) 545
s 75(1) 555
s 76 555
s 77(1), (2) 555
s 78 552
s 78(1) 552
s 78(2) 553
s 78(3) 552
s 78(3)(c)(i), (ii) 553
s 79 552
s 79(1), (2), (4) 553
s 80(1) 554
s 82 141
s 82(1) 141
s 84(1) 558
s 84(1)(i), (ii) 558
s 84(1)(a)–(d) 558
s 88(1) 447
s 89 438
ss 93–105 408
s 93 426
s 93(1) 423, 424, 430
s 93(3) 427, 428
s 93(3)(a)–(i) 428
s 93(7) 424, 425
s 93(7)(a)–(d) 424
s 94 429
s 94(1)(a), (b) 429
s 95(1), 2) 425
s 96(1), (2) 425
s 97(1) 423
s 97(1)(a) 424
s 97(1)(b)(i)–(iv) 424
s 97(2) 426
s 98(1) 431, 432
s 99 432
s 99(a), (b) 432
s 100 432, 433
s 103(1), (2) 433
s 104(1) 433
s 105 433, 434
s 106(1) 557
s 106(1)(a) 557
s 106(2) 557
s 109(1) 558
s 109(1)(a), (c),
558
(d)
s 126(1) 282, 283
s 126(2) 288
s 126(3), (4) 289
s 127(1) 284
s 127(2), (3) 285
s 127(3)(a)–(e) 285
s 127(4)–(8) 285
s 127(9) 286
s 127(10) 284
s 128 121, 286
s 128(1), (2) 286
s 128(3–(5) 287
s 130(1)(c) 297
s 130(1)(e) 299
s 130(2) 287, 288
s 130(3) 287
s 131 300
s 131(1) 301, 302
s 131(3) 302
s 132 299
s 132(1)(a), (b) 299
s 132(2) 299
s 133 299
s 134(1)(a) 300
s 134(2)(a) 300
ss 135–137 292
s 135(1), (2) 295
s 141(1)–(2) 226
s 144(1)–(3) 516
s 144(4) 517
s 145(1) 284, 517
s 145(2) 284
s 146(1), (2) 518
s 146(4) 519, 523
s 146(5)(a), (b) 518
s 147(1), (2) 519
s 147(2)(a) 519
s 147(2)(b)(i)–
519
(iii)
s 148(1)–(3) 520
s 149(1)–(3) 520
s 152(1), (5) 523
s 154(1) 282, 527, 529
s 154(2) 529
s 154(3), (4) 535
s 154(5), (6) 536
s 154(7) 536, 537
s 154(9) 529
s 154(9)(b) 529
s 154(10) 535
s 155 531
s 156 533
s 156(a)–(c) 533
s 157(1) 284, 522, 527, 535, 540
s 157(3) 537
s 157(4) 535
s 158(1), (2) 167
s 158(3) 168
s 158(4) 171
s 158(4)(a), (b) 172
s 159 529
s 159(1) 530
ss 160–171 344
s 160 349
s 160(1)(a), (b) 349
s 161 349
s 161(a) 349
s 161(a)(i), (ii) 349
s 161(b)(i)–(iii) 349
s 162 350
s 163(1)–(4) 350
s 163(4)(a)–(c) 350
s 164(1)–(3) 351
s 164(3)(a)–(d) 351
s 165 351
s 165(1), (2), (4) 351
s 165(5) 352
s 167 352
s 168 352
s 168(1)–(3), (5) 352
s 168(5)(a) 353
s 169(1) 353
s 170(1) 353
s 170(2)(a)–(d) 353
s 170(3) 353
s 171 354
s 171(a), (b) 354
s 172(1) 209
s 172(2)–(6) 228
s 172(2) 228
s 172(3), (4) 229
s 174 257
s 174(1) 234–236, 242, 245, 246, 248, 257
s 174(1)(a) 231–233, 588, 589
s 174(1)(b) 265–267, 271
s 174(2) 266, 271
s 174(3) 266, 269, 271
s 174(4) 234, 236–240, 257

s 174(5) 234
s 175 214
s 175(1) 214
s 175(1)(a), (b) 214
s 175(2) 214
s 175(3) 215
s 176 201, 219, 228
s 177 212, 213
s 177(1)–(5) 213
s 178 282
s 179 221
s 179(1) 221
s 179(2), (3) 223
s 179(3)(a), (b) 223
s 179(4) 222
s 180(6) 211
s 180(6)(a), (b) 211
s 180(7)–(9) 211
s 181(1) 210, 211
s 182(1), (2) 212
s 182(3)(a), (b) 212
s 182(5) 212
ss 184–185 162
s 184 163
s 184(1), (2) 163
s 184(2)(a), (b) 163
s 184(3) 164
s 185 163
s 185(a) 164
s 185(b)–(e) 165
s 193(1) 249, 251, 253, 257

s 193(1)(a)–(c) 252
s 193(2) 254
s 193(4)(a)(i–
253
(iii)
s 193(4)(b)(i)–
253
(iv)
s 193(6) 255
s 193(7) 251, 255
s 193(8) 256
ss 194, 195 202
ss 201–203 278
s 201(1) 278
s 201(2)(a) 278
s 201(2)(b) 279
s 202 279
s 202(a)–(c) 280
s 203 280
s 204 280, 281
s 205 278
s 205(1)–(3) 280
ss 206–211 509
ss 212–213 315
s 212 240, 323, 324, 327
s 212(1) 63, 316, 328
s 212(2) 328
s 212(2)(a), (b) 328
s 212(2)(c) 329
s 212(3) 240, 315, 316, 321
s 212(3)(a) 239, 316
s 212(3)(b) 316
s 212(3)(c) 318
s 213 323, 329
s 213(a), (b) 329
s 213(c), (d) 330
s 213(2) 341
s 213A 198, 239, 330, 331
s 213A(1) 63, 315, 316, 321
s 213A(2) 320, 321, 334
s 213A(3) 337
s 213A(3)(a) 121, 339
s 213A(3)(b)–
339
(g)
s 213A(3)(h) 121, 340
s 213A(3)(i)–(k) 340
s 213A(3)(l) 340, 344
s 213A(3)(m),
340
(n)
s 213A(4) 341
s 213A(4)(a), (b) 341
s 241(1) 455
ss 341–350 452
s 341(2) 455
s 343 467
s 345(1)(a) 466
s 345(1)(b), (c) 468
s 345(1)(c)(ii) 468
s 345(1)(c)(iii) 468, 469
s 345(2) 468
s 345(4), (6) 469
s 346(1) 468
s 347(1) 468
s 349(1) 471
s 354 37
s 362 16, 25, 34
s 363 16
s 363(1) 34
s 363(1)(a)–(c) 34
s 363(3) 34
s 363(4) 34, 35
s 364 16, 35
s 365(1) 35
s 365(1)(a)–(c) 35
s 365(2) 35
s 366(1) 35
s 366(2) 35, 36
s 366(2)(a)–(c) 36
s 367(1)(a)–(d) 36
ss 368, 369 37
s 378 39
s 410(1) 40
Sch 1 47
Sch 1, Tables
46, 58
A–D
Sch 1, Table A 215
Sch 1, Table A,
298
Art 60
Sch 1, Table A,
214
Art 81
Sch 1, Table A,
204
Art 86
Sch 1, Table A,
210
Art 94
Sch 3, s 2 390
Sch 7 519–521
Sch 7, Pt II 521
Sch 7, r 1 521
Sch 7, r 2(a) 519, 540
Sch 7, r 2(b) 519
Sch 7, r 3 519
Sch 7, r 5 521, 522
Sch 7, r 6 521
Sch 7, r 7(a)–(c) 521
Sch 7, r 8 521
Sch 7, r 9 521
Sch 7, r 10 521
Sch 7, r 10(a)–
521
(c)
Sch 7, r 11 521
Companies
(Amendment) 8
Act 1975 (no 32)
Cooperative
521, 530
Societies Act
Financial
521, 530
Institutions Act
Insurance Act 521, 530
Jamaican Public
Accountancy Act
—
s 2 531
Securities Act
374, 473, 521, 530, 569
1993
Stamp Duty Act 161
Leeward Islands
Companies Act 3, 5, 6, 8
1885
Montserrat
Montserrat
Companies Act 3, 8
1885
5, 13, 15, 18, 19, 24, 25, 37, 44, 45, 53, 55, 63, 65, 76, 77, 91, 92,
119, 120, 131, 137, 138, 143, 150, 152, 153, 155–157, 163, 164,
168, 172, 173, 180, 182, 195, 201, 203, 205–208, 215–218,
220–228, 230, 237, 265, 273–277, 280, 281, 284, 286–292,
Companies Act 295–303, 307–309, 315, 316, 318–320, 323, 327, 330, 331, 333,
1998 340–342, 344, 347, 354–357, 359, 362, 363, 366–371, 374–380,
382, 383, 385–393, 396, 398–410, 412, 423, 427, 429–445, 447,
448, 451–456, 458–470, 472, 473, 475–477, 483–489, 494, 496,
499–501, 503, 507–513, 515–518, 522–526, 528–537, 540,
543–547, 550–554, 556–566, 568–572, 575, 589
Pt I, Div A 39
Pt I, Div C 133, 182
Pt I Div I 545
Pt I Div J 569
Pt I Div K 483
s 3 39
s 4(1) 39, 44, 45, 90, 117, 297
s 4(2) 44
s 4(2)(a)–(c) 44
s 4(3) 51
s 5 46, 117
s 5(1) 46, 49
s 5(1)(a) 47
s 5(1)(b) 47, 133, 134, 484
s 5(1)(b)(i) 47
s 5(1)(b)(ii) 48
s 5(1)(c) 48
s 5(1)(d) 49, 209
s 5(1)(e) 49, 118, 486
s 5(2) 46, 49, 486
s 7 46
s 8 40, 42, 43
s 9 43
ss 10–15 52
s 10(1 56
s 11(a), (b) 53
s 12 56
s 12(a), (b) 56
s 14 57
s 15(1), (2) 57
s 16 71, 79
s 16(1) 80
s 16(2) 71
s 16(4) 71, 84
s 16(5) 71
ss 17–25 108
s 17 109, 110, 119
s 17(1) 41, 116, 117
s 17(2) 116, 117
s 17(3) 117
s 17(4)(a), (b) 118
s 18 109
s 18(1) 118
s 19 109, 110, 118, 119
s 20 122, 123, 429
s 21 122, 124–127
s 21(a) 130, 131
s 21(b) 130, 131
s 21(c) 131
s 21(d) 128, 129
s 21(e) 129, 130
s 21(f) 130
ss 26–57 132
s 26(1) 182–184, 545
s 26(2) 137, 138
s 27 186, 189, 190
s 27(a)–(c) 186
s 28 185, 187, 188
s 28(a) 185, 187, 192, 193
s 28(b) 187, 188
s 29(1) 91, 136
s 29(2) 140
s 30(1) 144
s 30(1)(a) 144
s 30(1)(b) 144–146
s 30(2) 146
s 30(3) 145, 146
s 31(1) 147
s 31(2)–(5) 148
s 31(6)(a) 148, 149
s 31(6)(b), (c) 149
s 31(7)(a), (b) 149
s 33(1), (4)–(6) 188
s 34 142
s 34(1) 142, 143
s 34(2) 143
s 34(2)(a)–(c) 143
s 35(1), (2) 143
s 36 143, 144
s 37(1) 152, 153, 155
s 37(2) 153
s 37(2)(a), (b) 153
s 38(1), (2) 153
s 39 152, 155
s 39(2) 155
s 39(2)(a), (b) 155
s 40 155, 156
s 40(1)(a), (b) 156
s 40(1)(c) 157
s 40(2)(a), (b) 157
s 41(1) 158, 190
s 41(2) 158, 159
s 42 161
s 44 175
s 44(1) 175, 179
s 44(1)(a)–(c) 175
s 44(2), (3) 176
s 44(3)(a) 176
s 44(3)(b) 177
s 44(4), (5) 176, 177
s 44(5)(a) 177
s 44(5)(b) 178
s 44(6) 176, 178
s 45(1)–(3) 179
s 45(4)(a), (b) 180
ss 46, 47 180
s 49 157
s 49(1), (2) 157
s 49(3)(a), (b) 157
s 50 180
s 51 167, 172, 174
s 51(a), (b) 172
s 52 167
s 52(1), (2) 173, 174
s 52(3) 174
ss 53–55 162
s 53 124, 130, 163
s 53(1), (2) 163
s 53(2)(a), (b) 163
s 54 163
s 54(a) 164
s 54(b)–(d) 165
s 54(e)(i)–(iii) 165
s 55 164
s 57(1), (2) 556
s 58(1) 119, 203, 205, 228
s 58(1)(a) 200, 268
s 58(1)(b) 167, 168, 200
s 59 228
s 59(2) 228
s 60 228
s 60(1) 229
s 61 228
s 61(1), (2) 229
s 61(2)(a)–(e) 229
s 62(1) 18, 209
s 63 119, 206
s 64(1) 207
s 64(2)–(4) 207
s 65 224
s 65(1), (2) 224
s 66(1) 210
s 66(2) 211
s 66(3) 201
s 67(1) 211
s 67(1)(a), (b) 211
s 67(2)–(4) 211
s 68 212
s 69 124, 215, 502
s 69(1) 46, 50, 213
s 69(2) 46, 214
s 69(3) 46, 214, 215, 217, 220, 282, 284
s 69(4)–(6) 215, 220
s 69(7), (8) 216
s 70(1), (2) 203
s 71 209, 217
s 71(a) 209, 217
s 71(b)–(e) 218
s 71(h) 210
s 72 220
s 73 221
s 73(1) 222
s 73(1)(a), (b) 221
s 73(2), (3) 222
s 74(1), (2) 222
s 74(3) 223
s 74(3)(a), (b) 219
s 74(4) 223
s 74(4)(a), (b) 219
s 75(1), (2) 218
s 75(5) 219, 220
s 76 209
s 77 124
s 78 225
s 78(1) 224
s 78(2) 225
s 79(1) 224
s 79(2) 225
s 80 225
s 81(1), (2) 226
s 82(1), (2) 208
s 82(2)(a) 167, 208
s 82(2)(b)–(i) 208
s 83 201, 219, 228
s 84 226
s 84(1) 226
s 84(1)(b) 226
s 84(2) 227
ss 85–86 178, 180
s 85 178, 273
s 86 274
s 86(a)–(d) 179, 273, 274
s 86(e) 178, 274
s 87 275
s 88(1), (2) 274
s 88(2)(a)–(c) 274
s 89 274
s 90 275
s 91(1) 249, 251, 253, 257
s 91(1)(a), (b) 252
s 91(2)(a)–(d) 253
s 91(3)(a)–(c) 253
s 91(4), (5) 254
s 91(5)(a)–(e) 254
s 92 255
s 93 251, 255
s 94 256
s 95(a)–(c) 228
s 96(1)(b) 437
s 97 257
s 97(1) 234, 235, 242, 245–247, 257
s 97(1)(a) 231–233, 236, 588, 589
s 97(1)(b) 266, 267, 270
s 97(2) 234, 236–240, 257
s 97(3) 234, 237, 257
s 97(4) 265, 271
s 97(5) 120
s 97(6) 277
s 98 275
s 98(1) 275, 276
s 98(1)(a)–(c) 276
s 98(2) 276
s 98(3)(a), (b) 276
s 98(4)(a), (b) 277
s 99–101 278
s 99(1) 278
s 99(2)(a) 278
s 99(2)(b) 279
s 100 279
s 100(a)–(c) 280
s 101 280
s 102 280, 281
s 103 278
s 103(1)–(3) 280
s 104 221
s 105(4)–(6) 289
s 106 289
s 107 282, 283, 462
s 107(a) 283
s 107(b) 286
s 108(2) 290
s 109(a)(i), (ii) 291
s 110 290
s 111 500
s 111(1) 290
s 111(1)(a)–(c) 290
s 111(2)–(4) 291
s 112 284
s 112(1) 284
ss 114–122 292
s 114 487
s 114(a), (b) 292
s 115 216
s 115(1), (2) 293
s 116 216, 294
s 116(a), (b) 294
s 117 293
s 117(a) 216, 293
s 117(b)–(e) 293
s 118 294
s 119 294
s 120 295
s 121 293
s 122 294, 295
s 123(1) 295, 296
s 123(1)(a) 296
s 123(1)(b)(i),
296
(ii)
s 123(2) 296
s 123(3)(a), (b) 296
s 123(4) 296
s 124 52, 296
s 124(a), (b) 296
s 125(1), (2) 297
s 125(3) 298
s 125(4) 297
s 126 217, 299
s 127(1), (2) 300
s 128 300
s 129(1) 217, 299
s 129(2) 299
s 130(1) 308
s 130(1)(a), (b) 308
s 130(2) 308
s 131(1) 121, 286
s 131(2), (3) 286
s 131(3)(a) 286
s 131(3)(b), (c) 287
s 131(4)–(6) 287
s 132(1) 287
s 132(1)(a)(i),
287
(ii)
s 132(1)(c) 287
s 132(2), (3) 288
s 134 308
s 135 309
s 135(1) 310
s 135(2) 310, 313
s 135(3) 310
s 135(4) 314
s 136 124, 130
s 137(1)(a), (b) 301
s 137(1)(c) 307
s 137(1)(d) 303
s 137(1)(d)(i)–
303
(iii)
s 137(1)(d)(iv) 304
s 137(1)(e) 304
s 137(2)(a)–(d) 304
s 138(1)–(3) 302
s 139 302
s 139(a) 302
s 139(a)(i), (ii) 302
s 139(b) 302
s 140(1), (2) 303
s 141(1) 304
s 141(2) 18
s 142 305
s 142(a), (b) 305
ss 143, 144 305
s 145 308
s 145(1) 306
s 145(1)(a), (b) 306
s 145(2)(a)–(c) 306
ss 146–147 307
s 146(1) 307
s 146(1)(a), (b) 307
s 146(2)–(6) 307
s 148(1) 306
s 148(1)(a), (b) 306
s 148(2) 306
s 148(2)(a)–(c) 306
s 148(3) 306
s 149 462
s 149(1) 517
s 149(1)(a) 284, 517, 518
s 149(1)(a)(i),
518
(ii)
s 149(1)(b) 284, 517, 522
s 149(1)(c) 517, 522
s 149(2), (3) 518
s 150 522
s 151(1) 91, 524
s 151(2) 524
s 151(3), (4) 525
s 152 462
s 152(1), (2) 523
s 153(1) 523
s 153(2), (3) 524
s 153(4)(a)–(c) 524
s 153(4)(d)(i)–
524
(iii)
s 154(1) 18, 19, 525
s 154(1)(a) 525, 526
s 154(2), (3) 525
s 154(4)(a), (b) 526
s 154(5) 526
s 156(1) 526
s 156(2) 527
s 156(3) 526
s 156(4) 527
s 156(5) 527
s 157 528
s 158(1) 530
s 158(1)(a), (b) 530
s 158(2), (3) 530
s 160(1) 533
s 160(1)(a), (b) 532
s 160(2), (3) 533
s 161(1)–(4) 533
s 162(1) 282, 527, 528
s 162(2), (3) 529
s 163 529
s 163(1) 18, 527, 529
s 163(2), (3) 527, 529
s 164(1)(a) 533
s 164(1)(b) 534
s 164(2) 534
s 165(2) 534
s 166(1)–(4) 534
s 167(1), (2) 535
s 168 535
s 170(1), (2) 536
s 171(1) 527, 535, 540
s 171(2), (4) 540
s 172 434, 537
s 172(1), (2) 434, 537
s 172(3) 434
s 173(1)–(3) 538
s 174 544
s 175(1)–(2) 557
s 176 124, 502
s 176(1) 50, 557
s 176(2) 557
s 177(1) 563
s 177(1)(a) 58, 206, 563
s 177(1)(b), (c) 563
s 177(2) 557
s 177(2)(a)–(c) 558
s 177(3) 559, 560
s 177(4) 558, 561
s 177(4)(a)–(f) 558
s 177(5) 559
s 177(6) 562
s 178(1) 559
s 178(1)(a)–(c) 559
s 178(2), (3) 559
s 178(3)(a)–(c) 560
s 178(5) 559
s 179(1) 560
s 179(2)(a)–(d) 560
s 179(3)(a)–(c) 560
s 179(3)(d) 561
s 179(4)–(8) 561
s 180(2) 561
s 180(2)(a), (b) 561
s 181(1) 561, 562
s 181(2) 562
s 182(2), (3) 562
s 183(1), (2) 562
s 184(1) 562
s 184(1)(a), (b) 562
s 186(1)(a), (b) 563
s 186(2) 563, 564
s 186(3)–(5) 563
s 187(1), (2) 516, 564
s 187(3) 517, 564
s 188(a), (b) 564
s 189 565
s 190(1), (2) 565
s 191(1) 566, 567
s 191(1)(a)–(c) 567
s 191(2), (3) 567
s 191(3)(a), (b) 567
s 191(4)(a)–(c) 566
s 191(5) 566
ss 192, 193 567
s 193(a)–(c) 567
s 195(1) 545, 546, 550
s 195(2) 550
s 195(3) 551
s 195(4)(a), (b) 551
s 195(5)–(7) 551
s 196(1)–(3) 546
s 197 552
s 197(1), (2) 552
s 197(3)(a), (b) 552
s 197(4), (5) 553
s 197(6)(a) 552
s 197(6)(b) 553
s 198 552
s 198(1)–(3) 553
s 199 555
s 199(1)–(3) 555
s 200(1)–(3) 554
s 201(a) 570
s 201(b) 571, 572
s 201(f) 571
s 201(f)(i), (ii) 571
s 201(g) 571
s 202 570, 571
s 203 570, 572
s 203(a), (b) 572
s 203(c)(i), (ii) 572
s 203(d), (e) 573
s 204 572
ss 205–208 573
s 208(a), (b) 573
s 208(c)(i) 573
s 208(c)(ii), (iii) 574
s 209(1)–(3) 574
s 210 574
s 210(a), (b) 574
s 211(1)–(3) 574
s 212 575
s 212(a)–(d) 575
s 213(1) 194, 484
s 213(1)(a), (b) 484
s 213(1)(c)–( j) 195, 485
s 213(1)(k) 485, 486
s 213(1)(l), (m) 486
s 213(2), (3) 486
s 214(1), (2) 487
s 215(1) 196, 197, 488
s 215(1)(a)–(c) 196
s 215(1)(c)(i)–
196
(iv)
s 215(1)(d)–(h) 196
s 215(2) 197, 488
s 215(3) 196, 488
s 215(4) 197, 488
s 216(1) 488
s 217(1)–(2) 488
s 217(3)(a)–(b) 488
s 218(1)–(4) 489
ss 219–225 494
s 219 496
ss 220–221 498
s 220(1) 498
s 220(1)(a)–(g) 499
s 220(2) 499, 500
s 221(1), (2) 500
s 221(2)(a), (b) 500
s 221(3)–(5) 500
s 221(6) 501
s 222 498, 501
s 222(a), (b) 501
s 222(b)(i)–(iii) 501
s 223 498, 501
s 223(a) 501
s 223(b)(i)–(iii) 502
s 224(1), (2) 502
s 224(2)(a) 502
s 224(2)(a)(i),
502
(ii)
s 224(2)(b)(i),
502
(ii)
s 224(3)(a)–(c) 503
s 225(1) 503
s 225(2)(a) 497, 503
s 225(2)(b), (c),
498
(e)–(g)
ss 226–235 357
s 226(1) 357–359, 366
s 226(1)(a)–(d) 358
s 226(2) 357, 513
s 226(3) 359
s 226(4) 359, 363
s 226(5)(b) 367
s 226(6) 367
s 226(7) 368
s 227(1) 368
s 227(1)(a)–(c) 368
s 227(2)–(4) 368
s 228 369
s 228(a)–(c) 369
s 228(c)(i)–(iii) 369
s 229(1) 369
s 229(1)(a) 369
s 229(2), (3) 370
s 230(1) 371
s 232(1), (2) 371
s 232(3) 372
s 233 372
s 234(1), (2) 370

s 234(2)(a), (b) 370
s 235 370
s 236 507
s 236(1)(a)–(c) 507
s 236(2) 507
s 236(3)(a), (b) 508
s 236(4–(6) 508
s 236(7) 359, 508
s 237 508
s 237(1)(a)–(d) 509
s 237(1)(e)–(g) 510
s 237(2) 511
s 237(2)(a), (b) 511
s 237(3) 509, 510
s 237(4) 512
s 237(4)(a) 512
s 237(4)(b) 511, 512
s 237(4)(c) 357, 359, 512
s 237(4)(d) 513
s 237(5) 512
s 237(6)–(8) 514
s 238 321
s 238(b) 315, 316
s 238(b)(i) 239, 316
s 238(b)(ii) 318
s 238(b)(iii) 319
s 238(b)(iv) 240, 320
s 239 316, 323, 324, 327
s 239(1), (2) 328
s 239(2)(a), (b) 328
s 239(2)(c) 329
s 240 323, 329
s 240(a), (b) 329
s 240(c), (d) 330
s 241 239, 240, 315, 330, 331
s 241(1) 316, 321
s 241(2) 320, 321, 334
s 241(3) 337
s 241(3)(a) 121, 339
s 241(3)(b)–(g) 339
s 241(3)(h) 121, 340
s 241(3)(i)–(k) 340
s 241(3)(l) 340, 344
s 241(3)(m), (n) 340
s 241(4)(a), (b) 340
s 241(5), (6) 341
s 241(6)(a), (b) 341
s 242(1) 341
s 242(2) 342
s 243 342
s 244 344
s 244(1), (2) 355
s 244(3) 355
s 244(3)(a)–(d) 356
s 248 59, 344, 354, 355
ss 250–265 408
s 250 423, 426, 428
s 250(1) 423, 425, 428, 430
s 250(1)(a) 423
s 250(1)(b) 424
s 250(2) 430
s 250(3) 427
s 250(3)(a), (b) 427
s 251(1)(a)–(e) 424
s 251(1)(f) 424, 429
s 251(2) 424
s 251(2)(a)–(c) 424
s 251(3) 424, 425
s 253 430, 431
s 255 431
s 255(2) 431
s 256(1) 425
s 256(1)(a), (b) 425
s 256(2) 425
s 257(1)(a) 425
s 257(2) 425
s 258 423
s 258(2) 426
s 259 431
s 259(1)(a), (b) 432
s 259(2) 432
s 260(1) 432
s 260(1)(a), (b) 432
s 260(2) 432
s 260(3)(a), (h) 121
s 261 432, 433
s 261(a) 432
s 261(b), (c) 433
s 262(1), (2) 433
s 263 433
s 264(1) 458
s 264(2) 460, 470
s 265(1)(f) 433
s 266(b) 445
s 266(c) 442
s 267 18
s 268 445
s 268(1)–(5) 445
s 269(1) 446
s 269(1)(a)–(c) 446
s 269(2), (3) 446
s 269(4)(a), (b) 446
s 269(5)(a)–(c) 446
s 270(1) 448
s 270(1)(a)–(c) 448
s 270(2) 448
s 271 448
s 271(a), (b) 448
s 271(c) 449
s 272(a)–(c) 449
s 274 448
s 275 447
s 276(1) 438
s 276(2) 437
s 277(a), (b) 447
ss 278, 279 447
s 280(1), (2) 449
s 280(2)(a), (b) 449
s 280(3) 449, 450
s 280(3)(a)–(c) 450
s 281(1)–(3) 443
s 281(3)(a)–(c) 443
s 282 438
s 282(1) 438
s 282(1)(a)–(d) 439
s 282(2) 439
s 282(2)(a) 439
s 283 440, 442
s 285(1) 437, 440, 443
s 285(1)(a) 440, 443
s 285(1)(b) 440, 441, 443
s 285(1)(c) 443
s 285(1)(d), (e) 444
s 285(1)(f) 441, 444
s 285(1)(g) 444
s 285(1)(h) 438, 441, 444
s 285(1)(i), ( j) 441, 444
s 285(1)(k) 444
s 285(1)(l), (m) 441, 444
s 285(1)(n) 445
s 285(2) 442
s 286 439
s 286(1) 440
s 286(1)(a) 437, 440
s 286(1)(b), (c) 441
s 286(2) 439, 440
s 287 450
s 287(1) 450, 456
s 287(1)(a)–(d) 450
s 287(2) 456
s 287(2)(a)–(e) 451
s 287(3) 452, 456
s 287(3)(a), (b) 455, 456
s 287(4) 463
s 287(4)(a) 464
s 287(4)(b)(i)–
464
(vi)
s 287(5) 460, 464
s 288(1)(a) 455
s 288(1)(b) 455, 459
s 288(1)(c) 455, 459
s 288(2) 459, 460
s 289 454, 462
s 290 454
s 291 461, 463
ss 293, 294 465
s 294(a), (b) 465, 466
s 295 459, 463
s 295(c) 459
s 296 465, 466
s 296(b)–(f) 467
s 296(g), (h) 467, 470
s 297(1) 470
s 297(1)(a), (b) 471
s 297(2) 472
s 297(2)(a), (b) 472
s 298 467
s 299(1) 469
s 299(3) 470
s 300 465
s 300(1)(a) 466, 468
s 300(1)(b) 468
s 300(1)(c)(i)–
468
(iii)
s 300(1)(c)(iv) 469
s 300(2) 468
s 300(3)(a), (b) 468
s 300(4), (5) 469
s 301 465
s 301(1)(a)–(d) 468
s 302(b) 383
s 302(c) 375, 379
s 303 18
s 304(1)(a), (b) 379
s 304(2) 378
s 305(a), (b) 376
s 305(c)–(f) 377
s 306 377, 378
s 307 378
s 307(a), (b) 378
s 308(1)(a) 383
s 308(1)(b)(i)–
383
(iii)
s 308(2) 383
s 308(2)(a)–(c) 383
s 308(2)(c)(i), (ii) 383
s 308(2)(d)(i)–
384
(iv)
s 308(3) 383
s 308(3)(a)–(h) 384
s 308(4) 385
s 309(1) 385
s 309(1)(a)–(c) 385
s 309(2) 385
s 310 385
s 310(a)–(c) 385
s 311(1), (2) 386
s 311(2)(a)–d) 386
s 311(3) 386
s 311(4)–(6) 387
s 312(1) 380, 387
s 312(2) 387
s 312(2)(a), (b) 387
s 312(3) 387
s 312(4)(a), (b) 388
s 312(5) 388
s 313(1)(a), (b) 378
s 313(2) 378
s 314 399
s 314(1) 399–401
s 314(1)(a)–(d) 401
s 314(2) 401
s 314(3)(a)–(d) 402
s 314(4)(a), (b) 402
s 314(6) 403
s 314(6)(a)–(c) 403
s 314(7) 403
s 314(7)(a), (b) 403
s 315 388
s 315(1)–(3) 389
s 316(1)–(6) 390
s 317 391
s 318 393, 396, 397, 404
s 318(1) 404
s 318(1)(a), (b) 404
s 318(2)(a), (b) 404
s 318(3)–(7) 405
s 318(7)(a), (b) 406
s 318(8) 406
s 318(8)(a), (b) 406
s 318(9), (10) 406
s 318(12), (13) 407
s 318(14) 393, 397, 404
s 320 391
s 321(1)(a), (b) 391
ss 322–325 473
s 322(a)–(d) 476
s 322(e)(i), (ii) 477
s 323(1)(a), (b) 477
s 323(2)(a), (b) 477
s 323(3) 477
s 324 475
s 324(a) 479, 480
s 324(b) 480
s 325 480
s 326(1) 19, 92
s 326(3) 19
s 328 20
s 328(1), (2) 20
s 329 20
s 329(a)–(d) 20
s 330(1), (2) 20
s 331(1), (2) 20
s 332(1), (2) 21
s 333 21
s 333(a), (b) 21
s 334(1), (2) 21
s 335(1), (2) 21
s 336(1) 21
s 336(1)(a)–( j) 22
s 336(2) 22
s 336(2)(a)–(c) 22
s 336(2)(d)–(g) 23
s 336(3)–(6) 23
s 337(1)–(3) 23
s 338 25
s 338(a)–(c) 25
s 340(1)–(4) 26
s 341(1), (2) 28
s 342(1), (2) 28
s 342(3)(a)–(c) 28
s 343 29
s 344(1) 26
s 344(1)(a)–(m) 27
s 344(2)(a)–(d) 27
s 344(2)(e) 28
s 345 28
s 346(1), (2) 28
s 346(3) 29
s 347 29
s 348(1)–(3) 29
s 349(1), (2) 29
s 350 29
s 351(1), (2) 30
s 352(1), (2) 30
s 353(1), (2) 30
s 354 31
s 355(1)–(3) 31
s 355(4), (5) 32
s 356(1)–(3) 32
s 357(1)–(5) 33
s 358 33
ss 360–369 37
s 360 64
s 360(1)(a) 64
s 362(1) 63
s 503 488
s 503(1)(a) 50, 52
s 509(1) 40
s 509(1)(a) 40, 41
s 509(1)(b)–(f) 41
ss 514–517 52
s 514 52
s 515 53
s 515(a) 53
s 515(a)(i), (ii) 53
s 515(b) 53
s 515(c)–(f) 54
s 516 53, 55
s 516(a) 55
s 516(a)(i)–(iii) 55
s 516(b)(i)–(iv) 55
s 516(c)–(e) 55
ss 518–526 344
ss 518–523 344
s 518(1), (2) 346
s 518(2)(a)–(d) 346
s 518(3) 347
s 518(4), (5) 348
s 519(1) 347
s 519(1)(a)–(l) 347
s 520(1), (2) 348
s 521(1), (2) 348
ss 522, 523 348
ss 524–526 344
s 524(1) 354
s 526 354
s 531(1)(f) 354
s 533 433
ss 538, 540 90
s 540(a) 90
s 542(1) 381
s 542(2) 382
s 543 76, 77, 128, 408
s 543(1) 15, 18, 25, 39, 182, 187, 310, 317, 477
s 543(1)(a) 476
s 543(1)(f) 128, 200, 227, 434, 435
s 544(1) 438
Securities Act
374, 473
2001
New Zealand
Securities
Amendment Act 107
1988
St Christopher
and Nevis (St
Kitts and Nevis)
St Kitts-Nevis-
Anguilla
3, 5, 8
Companies Act
1885
8, 12, 15, 17, 24, 25, 37, 43, 45, 51, 54, 56, 57, 65, 71, 90, 92,
109, 110, 117, 120, 133, 138–142, 145, 147, 150, 155, 158–161,
163–165, 167–173, 175–185, 187, 190, 191, 195, 197, 198, 200,
Companies Act 203, 206, 208, 212, 215, 219, 221, 227, 229, 230, 248, 253, 255,
1996 273, 277, 286–289, 292, 297, 299–303, 308, 315, 330, 331, 335,
347, 349–352, 355, 374, 376, 383, 398–401, 407, 435–438,
452–454, 472, 483, 484, 489, 490, 509, 529, 530, 533, 540,
543–546, 551, 554, 556, 557, 568, 570
Pt II 39
Pt II Div 3 133
Pt VII 133, 182, 374
s 2 39, 138, 182, 183
s 2(1) 15, 25, 200, 227
ss 4–5 117
s 4(1) 24, 39, 44, 297
s 4(2) 90
s 5(2)(a) 24
s 5(2)(c) 133, 138
s 5(2)(d), (g) 24
s 6(1) 51, 204, 206
s 7(1) 51
s 7(1)(e) 133
s 8 40
s 8(1)(a) 557
s 8(1)(f) 213
s 9(1) 42, 43, 51
s 9(2)(b) 40
s 9(4) 40, 42
s 9(5) 43
s 10 184
s 10(1) 59, 204
s 11 209, 489
s 11(1) 207
s 11(3) 489
s 11(4)(a) 489
s 11(4)(b) 490
s 13 52
s 13(1) 56
s 13(3) 53–55
s 14 52
s 15(1) 56
s 15(2), (4) 57
ss 16, 17 17
ss 18–20 108
s 18 109, 119, 437
s 18(1) 41, 109, 110, 116, 117
s 18(2)(a), (b) 118
s 18(3) 109, 118
s 18(4) 109, 110, 118, 119
s 19 122, 123
s 21 71, 75
ss 22–24 108
s 29(4) 376, 379
s 30 399
s 30(1) 399–401
s 30(1)(a)–(d) 401
s 30(2) 401
s 31(a), (c), (d) 402
ss 34–40 132
s 34(1)(a) 182–184, 545
s 34(1)(b) 545
s 35(1), (3) 139
s 36 139
s 36(1) 139, 180
s 36(1)(a)–(c) 139
s 38(1)(a) 133
s 39 140
s 41(1) 558
s 41(1)(a) 557
s 41(1)(b)–(d) 558
s 51(1)–(5) 142
s 52(1) 186–188
s 52(3) 194, 195, 197, 198
s 52(3)(a), (b) 198
s 53(1), (2), (4) 198
ss 55–66 132
s 55(1) 159, 190
s 55(2) 159
s 55(3) 158, 160
s 55(8), (9) 160
s 56(a), (b) 155
s 57 152, 155
s 57(5) 155
s 58 161–163
s 58(1), (2) 163
s 58(2)(a) 164
s 58(2)(d) 165
s 58(3) 165
s 61 175
s 61(1) 179
s 61(2) 175
s 61(2)(b), (c) 175
ss 62–66 178
ss 62–65 176
s 62(1) 176
s 62(3) 176, 177
s 67(1), (3), (4) 557
s 73(1) 209
s 73(2) 210
s 73(2)(d) 212
s 74 257
s 74(1) 234, 235, 242, 245–247, 257
s 74(1)(a) 231–233, 236, 588, 589
s 74(1)(b) 265–267, 270
s 74(3) 234
s 75(1) 249, 251–253, 257
s 75(2) 254
s 75(3) 255
s 76(1) 256
s 77(1), (2) 277
s 78(1)–(3) 211
s 80 201, 219, 228
s 81 228
s 81(3), (4) 229
s 82 228
s 82(1), (2) 229
s 82(2)(a)–(c),
229
(e)
ss 83, 85 228
s 86(2) 226
s 87 282, 283
s 87(2), (3) 283
s 88(1), (2) 288
s 88(4), (5) 289
s 89 121, 286
s 89(1) 286
s 89(2)(a) 286
s 89(3) 286
s 89(4)–(6) 287
s 92(d) 297
s 92(e) 297, 298
s 92(g) 299
s 92(h) 297
s 92(i) 299
s 93(1), (2) 300
s 94(1), (3) 287
s 95(1) 308
s 96 300
s 96(1) 301, 302
s 96(4) 302
s 104(4)(b) 284
s 109(1)(a) 282
s 110(2) 540
s 113(1) 531
s 114(2) 168
s 141 121
s 114(2)(a) 170
s 114(2)(b) 171
s 114(2)(b)(i),
172
(ii)
s 114(3) 171
s 114(3)(a), (b) 171
s 114(6) 171
ss 125–127 509
s 128 349
s 128(1), (2) 349
s 129(1) 350
s 130(2) 350
s 134(1), (2) 350
s 135(c) 351
s 135(1) 351
s 135(2)(a), (b) 351
s 136(1) 352
s 141–154 239
s 141 315
s 143(2) 121
s 220 37
s 220(1)(a) 438
s 241 331, 335
s 241(1), (2) 331
s 410(1) 40
Sch 1, Standard
204, 215
Table A
Securities Act
374, 473, 569
2001
St Lucia
Commercial
Code Title IV 4, 8
‘Companies’
Commercial
Code
8
(Amendment)
Act 1975 (no 10)
Companies Act
8
1977
5, 13, 15, 18, 19, 24, 25, 37, 44, 45, 53, 55, 63, 65, 76, 77, 91, 92,
119, 120, 131, 137, 138, 143, 150, 152, 153, 155–157, 163, 164,
168, 172, 173, 180, 182, 195, 201, 203, 205–208, 215–218,
220–228, 230, 237, 265, 273–277, 280, 281, 284, 286–292,
Companies Act 295–303, 307–309, 315, 316, 318–320, 323, 327, 330, 331, 333,
1996 340–342, 344, 347, 354–357, 359, 362, 363, 366–371, 374–380,
382, 383, 385–393, 396, 398–410, 412, 423, 427, 429–445, 447,
448, 451–456, 458–470, 472, 473, 475–477, 483–489, 494, 496,
499–501, 503, 507–513, 515–518, 522–526, 528–537, 540,
543–547, 550–554, 556–566, 568–572, 575, 589
Pt I, Div A 39
Pt I, Div C 133, 182
Pt I Div I 545
Pt I Div J 569
Pt I Div K 483
s 3 39
s 4(1) 39, 44, 45, 90, 117, 297
s 4(2) 44
s 4(2)(a)–(c) 44
s 4(3) 51
s 5 46, 117
s 5(1) 46, 49
s 5(1)(a) 47
s 5(1)(b) 47, 133, 134, 484
s 5(1)(b)(i) 47
s 5(1)(b)(ii) 48
s 5(1)(c) 48
s 5(1)(d) 49, 209
s 5(1)(e) 49, 118, 486
s 5(2) 46, 49, 486
s 7 46
s 8 40, 42, 43
s 9 43
ss 10–15 52
s 10(1 56
s 11(a), (b) 53
s 12 56
s 12(a), (b) 56
s 14 57
s 15(1), (2) 57
s 16 71, 79
s 16(1) 80
s 16(2) 71
s 16(4) 71, 84
s 16(5) 71
ss 17–25 108
s 17 109, 110, 119
s 17(1) 41, 116, 117
s 17(2) 116, 117
s 17(3) 117
s 17(4)(a), (b) 118
s 18 109
s 18(1) 118
s 19 109, 110, 118, 119
s 20 122, 123, 429
s 21 122, 124–127
s 21(a) 130, 131
s 21(b) 130, 131
s 21(c) 131
s 21(d) 128, 129
s 21(e) 129, 130
s 21(f) 130
ss 26–57 132
s 26(1) 182–184, 545
s 26(2) 137, 138
s 27 186, 189, 190

s 27(a)–(c) 186
s 28 185, 187, 188
s 28(a) 185, 187, 192, 193
s 28(b) 187, 188
s 29(1) 91, 136
s 29(2) 140
s 30(1) 144
s 30(1)(a) 144
s 30(1)(b) 144–146
s 30(2) 146
s 30(3) 145, 146
s 31(1) 147
s 31(2)–(5) 148
s 31(6)(a) 148, 149
s 31(6)(b), (c) 149
s 31(7)(a), (b) 149
s 33(1), (4)–(6) 188
s 34 142
s 34(1) 142, 143
s 34(2) 143
s 34(2)(a)–(c) 143
s 35(1), (2) 143
s 36 143, 144
s 37(1) 152, 153, 155
s 37(2) 153
s 37(2)(a), (b) 153
s 38(1), (2) 153
s 39 152, 155
s 39(2) 155
s 39(2)(a), (b) 155
s 40 155, 156
s 40(1)(a), (b) 156
s 40(1)(c) 157
s 40(2)(a), (b) 157
s 41(1) 158, 190
s 41(2) 158, 159
s 42 161
s 44 175
s 44(1) 175, 179
s 44(1)(a)–(c) 175
s 44(2), (3) 176
s 44(3)(a) 176
s 44(3)(b) 177
s 44(4), (5) 176, 177
s 44(5)(a) 177
s 44(5)(b) 178
s 44(6) 176, 178
s 45(1)–(3) 179
s 45(4)(a), (b) 180
ss 46, 47 180
s 49 157
s 49(1), (2) 157
s 49(3)(a), (b) 157
s 50 180
s 51 167, 172, 174
s 51(a), (b) 172
s 52 167
s 52(1), (2) 173, 174
s 52(3) 174
ss 53–55 162
s 53 124, 130, 163
s 53(1), (2) 163

s 53(2)(a), (b) 163
s 54 163
s 54(a) 164
s 54(b)–(d) 165
s 54(e)(i)–(iii) 165
s 55 164
s 57(1), (2) 556
s 58(1) 119, 203, 205, 228
s 58(1)(a) 200, 268
s 58(1)(b) 167, 168, 200
s 59 228
s 59(2) 228
s 60 228
s 60(1) 229
s 61 228
s 61(1), (2) 229
s 61(2)(a)–(e) 229
s 62(1) 18, 209
s 63 119, 206
s 64(1) 207
s 64(2)–(4) 207
s 65 224
s 65(1), (2) 224
s 66(1) 210
s 66(2) 211
s 66(3) 201
s 67(1) 211
s 67(1)(a), (b) 211
s 67(2)–(4) 211
s 68 212
s 69 124, 215, 502
s 69(1) 46, 50, 213
s 69(2) 46, 214
s 69(3) 46, 214, 215, 217, 220, 282, 284
s 69(4)–(6) 215, 220
s 69(7), (8) 216
s 70(1), (2) 203
s 71 209, 217
s 71(a) 209, 217
s 71(b)–(e) 218
s 71(h) 210
s 72 220
s 73 221
s 73(1) 222
s 73(1)(a), (b) 221
s 73(2), (3) 222
s 74(1), (2) 222
s 74(3) 223
s 74(3)(a), (b) 219
s 74(4) 223
s 74(4)(a), (b) 219
s 75(1), (2) 218
s 75(5) 219, 220
s 76 209
s 77 124
s 78 225
s 78(1) 224
s 78(2) 225
s 79(1) 224
s 79(2) 225
s 80 225
s 81(1), (2) 226
s 82(1), (2) 208
s 82(2)(a) 167, 208
s 82(2)(b)–(i) 208
s 83 201, 219, 228
s 84 226
s 84(1) 226
s 84(1)(b) 226
s 84(2) 227
ss 85–86 178, 180
s 85 178, 273
s 86 274
s 86(a)–(d) 179, 273, 274
s 86(e) 178, 274
s 87 275
s 88(1), (2) 274
s 88(2)(a)–(c) 274
s 89 274
s 90 275
s 91(1) 249, 251, 253, 257
s 91(1)(a), (b) 252
s 91(2)(a)–(d) 253
s 91(3)(a)–(c) 253
s 91(4), (5) 254
s 91(5)(a)–(e) 254
s 92 255
s 93 251, 255
s 94 256
s 95(a)–(c) 228
s 96(1)(b) 437
s 97 257
s 97(1) 234, 235, 242, 245–247, 257
s 97(1)(a) 231–233, 236, 588, 589
s 97(1)(b) 266, 267, 270
s 97(2) 234, 236–240, 257
s 97(3) 234, 237, 257
s 97(4) 265, 271
s 97(5) 120
s 97(6) 277
s 98 275
s 98(1) 275, 276
s 98(1)(a)–(c) 276
s 98(2) 276
s 98(3)(a), (b) 276
s 98(4)(a), (b) 277
s 99–101 278
s 99(1) 278
s 99(2)(a) 278
s 99(2)(b) 279
s 100 279
s 100(a)–(c) 280
s 101 280
s 102 280, 281
s 103 278
s 103(1)–(3) 280
s 104 221
s 105(4)–(6) 289
s 106 289
s 107 282, 283, 462
s 107(a) 283
s 107(b) 286
s 108(2) 290
s 109(a)(i), (ii) 291
s 110 290
s 111 500
s 111(1) 290
s 111(1)(a)–(c) 290
s 111(2)–(4) 291
s 112 284
s 112(1) 284
ss 114–122 292
s 114 487
s 114(a), (b) 292
s 115 216
s 115(1), (2) 293
s 116 216, 294
s 116(a), (b) 294
s 117 293
s 117(a) 216, 293
s 117(b)–(e) 293
s 118 294
s 119 294
s 120 295
s 121 293
s 122 294, 295
s 123(1) 295, 296
s 123(1)(a) 296
s 123(1)(b)(i),
296
(ii)
s 123(2) 296
s 123(3)(a), (b) 296
s 123(4) 296
s 124 52, 296
s 124(a), (b) 296
s 125(1), (2) 297
s 125(3) 298
s 125(4) 297
s 126 217, 299
s 127(1), (2) 300
s 128 300
s 129(1) 217, 299
s 129(2) 299
s 130(1) 308
s 130(1)(a), (b) 308
s 130(2) 308
s 131(1) 121, 286
s 131(2), (3) 286
s 131(3)(a) 286
s 131(3)(b), (c) 287
s 131(4)–(6) 287
s 132(1) 287
s 132(1)(a)(i),
287
(ii)
s 132(1)(c) 287
s 132(2), (3) 288
s 134 308
s 135 309
s 135(1) 310
s 135(2) 310, 313
s 135(3) 310
s 135(4) 314
s 136 124, 130
s 137(1)(a), (b) 301
s 137(1)(c) 307
s 137(1)(d) 303
s 137(1)(d)(i)–
303
(iii)
s 137(1)(d)(iv) 304
s 137(1)(e) 304
s 137(2)(a)–(d) 304
s 138(1)–(3) 302
s 139 302
s 139(a) 302
s 139(a)(i), (ii) 302
s 139(b) 302
s 140(1), (2) 303
s 141(1) 304
s 141(2) 18
s 142 305
s 142(a), (b) 305
ss 143, 144 305
s 145 308
s 145(1) 306
s 145(1)(a), (b) 306
s 145(2)(a)–(c) 306
ss 146–147 307
s 146(1) 307
s 146(1)(a), (b) 307
s 146(2)–(6) 307
s 148(1) 306
s 148(1)(a), (b) 306
s 148(2) 306
s 148(2)(a)–(c) 306
s 148(3) 306
s 149 462
s 149(1) 517
s 149(1)(a) 284, 517, 518
s 149(1)(a)(i),
518
(ii)
s 149(1)(b) 284, 517, 522
s 149(1)(c) 517, 522
s 149(2), (3) 518
s 150 522
s 151(1) 91, 524
s 151(2) 524
s 151(3), (4) 525
s 152 462
s 152(1), (2) 523
s 153(1) 523
s 153(2), (3) 524
s 153(4)(a)–(c) 524
s 153(4)(d)(i)–
524
(iii)
s 154(1) 18, 19, 525
s 154(1)(a) 525, 526
s 154(2), (3) 525
s 154(4)(a), (b) 526
s 154(5) 526
s 156(1) 526
s 156(2) 527
s 156(3) 526
s 156(4) 527
s 156(5) 527
s 157 528
s 158(1) 530
s 158(1)(a), (b) 530
s 158(2), (3) 530
s 160(1) 533
s 160(1)(a), (b) 532
s 160(2), (3) 533
s 161(1)–(4) 533
s 162(1) 282, 527, 528
s 162(2), (3) 529
s 163 529
s 163(1) 18, 527, 529
s 163(2), (3) 527, 529
s 164(1)(a) 533
s 164(1)(b) 534
s 164(2) 534
s 165(2) 534
s 166(1)–(4) 534
s 167(1), (2) 535
s 168 535
s 170(1), (2) 536
s 171(1) 527, 535, 540
s 171(2), (4) 540
s 172 434, 537
s 172(1), (2) 434, 537
s 172(3) 434
s 173(1)–(3) 538
s 174 544
s 175(1)–(2) 557
s 176 124, 502
s 176(1) 50, 557
s 176(2) 557
s 177(1) 563
s 177(1)(a) 58, 206, 563
s 177(1)(b), (c) 563
s 177(2) 557
s 177(2)(a)–(c) 558
s 177(3) 559, 560
s 177(4) 558, 561
s 177(4)(a)–(f) 558
s 177(5) 559
s 177(6) 562
s 178(1) 559
s 178(1)(a)–(c) 559
s 178(2), (3) 559
s 178(3)(a)–(c) 560
s 178(5) 559
s 179(1) 560
s 179(2)(a)–(d) 560
s 179(3)(a)–(c) 560
s 179(3)(d) 561
s 179(4)–(8) 561
s 180(2) 561
s 180(2)(a), (b) 561
s 181(1) 561, 562
s 181(2) 562
s 182(2), (3) 562
s 183(1), (2) 562
s 184(1) 562
s 184(1)(a), (b) 562
s 186(1)(a), (b) 563
s 186(2) 563, 564
s 186(3)–(5) 563
s 187(1), (2) 516, 564
s 187(3) 517, 564
s 188(a), (b) 564
s 189 565
s 190(1), (2) 565
s 191(1) 566, 567
s 191(1)(a)–(c) 567
s 191(2), (3) 567
s 191(3)(a), (b) 567
s 191(4)(a)–(c) 566
s 191(5) 566
ss 192, 193 567
s 193(a)–(c) 567
s 195(1) 545, 546, 550
s 195(2) 550
s 195(3) 551
s 195(4)(a), (b) 551
s 195(5)–(7) 551
s 196(1)–(3) 546
s 197 552
s 197(1), (2) 552
s 197(3)(a), (b) 552
s 197(4), (5) 553
s 197(6)(a) 552
s 197(6)(b) 553
s 198 552
s 198(1)–(3) 553
s 199 555
s 199(1)–(3) 555
s 200(1)–(3) 554
s 201(a) 570
s 201(b) 571, 572
s 201(f) 571
s 201(f)(i), (ii) 571
s 201(g) 571
s 202 570, 571
s 203 570, 572
s 203(a), (b) 572
s 203(c)(i), (ii) 572
s 203(d), (e) 573
s 204 572
ss 205–208 573
s 208(a), (b) 573
s 208(c)(i) 573
s 208(c)(ii), (iii) 574
s 209(1)–(3) 574
s 210 574
s 210(a), (b) 574
s 211(1)–(3) 574
s 212 575
s 212(a)–(d) 575
s 213(1) 194, 484
s 213(1)(a), (b) 484
s 213(1)(c)–( j) 195, 485
s 213(1)(k) 485, 486
s 213(1)(l), (m) 486
s 213(2), (3) 486
s 214(1), (2) 487
s 215(1) 196, 197, 488
s 215(1)(a)–(c) 196
s 215(1)(c)(i)–
196
(iv)
s 215(1)(d)–(h) 196
s 215(2) 197, 488
s 215(3) 196, 488
s 215(4) 197, 488
s 216(1) 488
s 217(1)–(2) 488
s 217(3)(a)–(b) 488
s 218(1)–(4) 489
ss 219–225 494
s 219 496
ss 220–221 498
s 220(1) 498
s 220(1)(a)–(g) 499
s 220(2) 499, 500
s 221(1), (2) 500
s 221(2)(a), (b) 500
s 221(3)–(5) 500
s 221(6) 501
s 222 498, 501
s 222(a), (b) 501
s 222(b)(i)–(iii) 501
s 223 498, 501
s 223(a) 501
s 223(b)(i)–(iii) 502
s 224(1), (2) 502
s 224(2)(a) 502
s 224(2)(a)(i),
502
(ii)
s 224(2)(b)(i),
502
(ii)
s 224(3)(a)–(c) 503
s 225(1) 503
s 225(2)(a) 497, 503
s 225(2)(b), (c),
498
(e)–(g)
ss 226–235 357
s 226(1) 357–359, 366
s 226(1)(a)–(d) 358
s 226(2) 357, 513
s 226(3) 359
s 226(4) 359, 363
s 226(5)(b) 367
s 226(6) 367
s 226(7) 368
s 227(1) 368
s 227(1)(a)–(c) 368
s 227(2)–(4) 368
s 228 369
s 228(a)–(c) 369
s 228(c)(i)–(iii) 369
s 229(1) 369
s 229(1)(a) 369
s 229(2), (3) 370
s 230(1) 371
s 232(1), (2) 371
s 232(3) 372
s 233 372
s 234(1), (2) 370
s 234(2)(a), (b) 370
s 235 370
s 236 507
s 236(1)(a)–(c) 507
s 236(2) 507
s 236(3)(a), (b) 508
s 236(4–(6) 508
s 236(7) 359, 508
s 237 508
s 237(1)(a)–(d) 509
s 237(1)(e)–(g) 510
s 237(2) 511
s 237(2)(a), (b) 511
s 237(3) 509, 510
s 237(4) 512
s 237(4)(a) 512
s 237(4)(b) 511, 512
s 237(4)(c) 357, 359, 512
s 237(4)(d) 513
s 237(5) 512
s 237(6)–(8) 514
s 238 321
s 238(b) 315, 316
s 238(b)(i) 239, 316
s 238(b)(ii) 318
s 238(b)(iii) 319
s 238(b)(iv) 240, 320
s 239 316, 323, 324, 327
s 239(1), (2) 328
s 239(2)(a), (b) 328
s 239(2)(c) 329
s 240 323, 329
s 240(a), (b) 329
s 240(c), (d) 330
s 241 239, 240, 315, 330, 331
s 241(1) 316, 321
s 241(2) 320, 321, 334
s 241(3) 337
s 241(3)(a) 121, 339
s 241(3)(b)–(g) 339
s 241(3)(h) 121, 340
s 241(3)(i)–(k) 340
s 241(3)(l) 340, 344
s 241(3)(m), (n) 340
s 241(4)(a), (b) 340
s 241(5), (6) 341
s 241(6)(a), (b) 341
s 242(1) 341
s 242(2) 342
s 243 342
s 244 344
s 244(1), (2) 355
s 244(3) 355
s 244(3)(a)–(d) 356
s 248 59, 344, 354, 355
ss 250–265 408
s 250 423, 426, 428
s 250(1) 423, 425, 428, 430
s 250(1)(a) 423
s 250(1)(b) 424
s 250(2) 430
s 250(3) 427
s 250(3)(a), (b) 427
s 251(1)(a)–(e) 424
s 251(1)(f) 424, 429
s 251(2) 424
s 251(2)(a)–(c) 424
s 251(3) 424, 425

s 253 430, 431
s 255 431
s 255(2) 431
s 256(1) 425
s 256(1)(a), (b) 425
s 256(2) 425
s 257(1)(a) 425
s 257(2) 425
s 258 423
s 258(2) 426
s 259 431
s 259(1)(a), (b) 432
s 259(2) 432
s 260(1) 432
s 260(1)(a), (b) 432
s 260(2) 432
s 260(3)(a), (h) 121
s 261 432, 433
s 261(a) 432
s 261(b), (c) 433
s 262(1), (2) 433
s 263 433
s 264(1) 458
s 264(2) 460, 470
s 265(1)(f) 433
s 266(b) 445
s 266(c) 442
s 267 18
s 268 445
s 268(1)–(5) 445
s 269(1) 446
s 269(1)(a)–(c) 446
s 269(2), (3) 446
s 269(4)(a), (b) 446
s 269(5)(a)–(c) 446
s 270(1) 448
s 270(1)(a)–(c) 448
s 270(2) 448
s 271 448
s 271(a), (b) 448
s 271(c) 449
s 272(a)–(c) 449
s 274 448
s 275 447
s 276(1) 438
s 276(2) 437
s 277(a), (b) 447
ss 278, 279 447
s 280(1), (2) 449
s 280(2)(a), (b) 449
s 280(3) 449, 450
s 280(3)(a)–(c) 450
s 281(1)–(3) 443
s 281(3)(a)–(c) 443
s 282 438
s 282(1) 438
s 282(1)(a)–(d) 439
s 282(2) 439
s 282(2)(a) 439
s 283 440, 442
s 285(1) 437, 440, 443
s 285(1)(a) 440, 443

s 285(1)(b) 440, 441, 443
s 285(1)(c) 443
s 285(1)(d), (e) 444
s 285(1)(f) 441, 444
s 285(1)(g) 444
s 285(1)(h) 438, 441, 444
s 285(1)(i), ( j) 441, 444
s 285(1)(k) 444
s 285(1)(l), (m) 441, 444
s 285(1)(n) 445
s 285(2) 442
s 286 439
s 286(1) 440
s 286(1)(a) 437, 440
s 286(1)(b), (c) 441
s 286(2) 439, 440
s 287 450
s 287(1) 450, 456
s 287(1)(a)–(d) 450
s 287(2) 456
s 287(2)(a)–(e) 451
s 287(3) 452, 456
s 287(3)(a), (b) 455, 456
s 287(4) 463
s 287(4)(a) 464
s 287(4)(b)(i)–
464
(vi)
s 287(5) 460, 464
s 288(1)(a) 455
s 288(1)(b) 455, 459
s 288(1)(c) 455, 459

s 288(2) 459, 460
s 289 454, 462
s 290 454
s 291 461, 463
ss 293, 294 465
s 294(a), (b) 465, 466
s 295 459, 463
s 295(c) 459
s 296 465, 466
s 296(b)–(f) 467
s 296(g), (h) 467, 470
s 297(1) 470
s 297(1)(a), (b) 471
s 297(2) 472
s 297(2)(a), (b) 472
s 298 467
s 299(1) 469
s 299(3) 470
s 300 465
s 300(1)(a) 466, 468
s 300(1)(b) 468
s 300(1)(c)(i)–
468
(iii)
s 300(1)(c)(iv) 469
s 300(2) 468
s 300(3)(a), (b) 468
s 300(4), (5) 469
s 301 465
s 301(1)(a)–(d) 468
s 302(b) 383
s 302(c) 375, 379

s 303 18
s 304(1)(a), (b) 379
s 304(2) 378
s 305(a), (b) 376
s 305(c)–(f) 377
s 306 377, 378
s 307 378
s 307(a), (b) 378
s 308(1)(a) 383
s 308(1)(b)(i)–
383
(iii)
s 308(2) 383
s 308(2)(a)–(c) 383
s 308(2)(c)(i), (ii) 383
s 308(2)(d)(i)–
384
(iv)
s 308(3) 383
s 308(3)(a)–(h) 384
s 308(4) 385
s 309(1) 385
s 309(1)(a)–(c) 385
s 309(2) 385
s 310 385
s 310(a)–(c) 385
s 311(1), (2) 386
s 311(2)(a)–d) 386
s 311(3) 386
s 311(4)–(6) 387
s 312(1) 380, 387
s 312(2) 387
s 312(2)(a), (b) 387

s 312(3) 387
s 312(4)(a), (b) 388
s 312(5) 388
s 313(1)(a), (b) 378
s 313(2) 378
s 314 399
s 314(1) 399–401
s 314(1)(a)–(d) 401
s 314(2) 401
s 314(3)(a)–(d) 402
s 314(4)(a), (b) 402
s 314(6) 403
s 314(6)(a)–(c) 403
s 314(7) 403
s 314(7)(a), (b) 403
s 315 388
s 315(1)–(3) 389
s 316(1)–(6) 390
s 317 391
s 318 393, 396, 397, 404
s 318(1) 404
s 318(1)(a), (b) 404
s 318(2)(a), (b) 404
s 318(3)–(7) 405
s 318(7)(a), (b) 406
s 318(8) 406
s 318(8)(a), (b) 406
s 318(9), (10) 406
s 318(12), (13) 407
s 318(14) 393, 397, 404
s 320 391
s 321(1)(a), (b) 391
ss 322–325 473
s 322(a)–(d) 476
s 322(e)(i), (ii) 477
s 323(1)(a), (b) 477
s 323(2)(a), (b) 477
s 323(3) 477
s 324 475
s 324(a) 479, 480
s 324(b) 480
s 325 480
s 326(1) 19, 92
s 326(3) 19
s 328 20
s 328(1), (2) 20
s 329 20
s 329(a)–(d) 20
s 330(1), (2) 20
s 331(1), (2) 20
s 332(1), (2) 21
s 333 21
s 333(a), (b) 21
s 334(1), (2) 21
s 335(1), (2) 21
s 336(1) 21
s 336(1)(a)–( j) 22
s 336(2) 22
s 336(2)(a)–(c) 22
s 336(2)(d)–(g) 23
s 336(3)–(6) 23
s 337(1)–(3) 23
s 338 25
s 338(a)–(c) 25
s 340(1)–(4) 26
s 341(1), (2) 28
s 342(1), (2) 28
s 342(3)(a)–(c) 28
s 343 29
s 344(1) 26
s 344(1)(a)–(m) 27
s 344(2)(a)–(d) 27
s 344(2)(e) 28
s 345 28
s 346(1), (2) 28
s 346(3) 29
s 347 29
s 348(1)–(3) 29
s 349(1), (2) 29
s 350 29
s 351(1), (2) 30
s 352(1), (2) 30
s 353(1), (2) 30
s 354 31
s 355(1)–(3) 31
s 355(4), (5) 32
s 356(1)–(3) 32
s 357(1)–(5) 33
s 358 33
ss 360–369 37
s 360 64
s 360(1)(a) 64
s 362(1) 63
s 503 488
s 503(1)(a) 50, 52
s 509(1) 40
s 509(1)(a) 40, 41
s 509(1)(b)–(f) 41
ss 514–517 52
s 514 52
s 515 53
s 515(a) 53
s 515(a)(i), (ii) 53
s 515(b) 53
s 515(c)–(f) 54
s 516 53, 55
s 516(a) 55
s 516(a)(i)–(iii) 55
s 516(b)(i)–(iv) 55
s 516(c)–(e) 55
ss 518–526 344
ss 518–523 344
s 518(1), (2) 346
s 518(2)(a)–(d) 346
s 518(3) 347
s 518(4), (5) 348
s 519(1) 347
s 519(1)(a)–(l) 347
s 520(1), (2) 348
s 521(1), (2) 348
ss 522, 523 348
ss 524–526 344
s 524(1) 354
s 526 354
s 531(1)(f) 354
s 533 433
ss 538, 540 90
s 540(a) 90
s 542(1) 381
s 542(2) 382
s 543 76, 77, 128, 408
s 543(1) 15, 18, 25, 39, 182, 187, 310, 317, 477
s 543(1)(a) 476
s 543(1)(f) 128, 200, 227, 434, 435
s 544(1) 438
Securities Act
374, 473, 569
2001
St Vincent and
the Grenadines
Bankruptcy and
Insolvency Act 44, 452–455, 457, 458, 465, 472
No 43 of 2007
s 2 453, 454
s 11 455
s 12 456, 457
s 12(1) 457
s 12(2) 458
s 13 465
s 13(a), (b) 465
s 13(c)(i) 466
s 13(f) 468
s 13(g) 467
s 14 465
s 14(d), (f)–(h) 467
s 18 470
s 18(a), (b) 471
s 21 459
ss 180, 267 455
Companies Act,
CAP. 6 Tittle
XXIII of the 1966
Revised Laws of
St Vincent
s 14(1) 64
Companies Act
8
1994
5, 13, 15, 18, 19, 24, 25, 37, 44, 45, 53, 55, 63, 65, 76, 77, 91, 92,
119, 120, 131, 137, 138, 143, 150, 152, 153, 155–157, 163, 164,
168, 172, 173, 180, 182, 195, 201, 203, 205–208, 215–218,
220–228, 230, 237, 265, 273–277, 280, 281, 284, 286–292,
Companies Act 295–303, 307–309, 315, 316, 318–320, 323, 327, 330, 331, 333,
(no 8) 1994 340–342, 344, 347, 354–357, 359, 362, 363, 366–371, 374–380,
382, 383, 385–393, 396, 398–410, 412, 423, 427, 429–445, 447,
448, 451–456, 458–470, 472, 473, 475–477, 483–489, 494, 496,
499–501, 503, 507–513, 515–518, 522–526, 528–537, 540,
543–547, 550–554, 556–566, 568–572, 575, 589
Pt I, Div A 39
Pt I, Div C 133, 182
Pt I Div I 545
Pt I Div J 569
Pt I Div K 483
s 3 39
s 4(1) 39, 44, 45, 90, 117, 297
s 4(2) 44
s 4(2)(a)–(c) 44
s 4(3) 51
s 5 46, 117
s 5(1) 46, 49
s 5(1)(a) 47
s 5(1)(b) 47, 133, 134, 484
s 5(1)(b)(i) 47
s 5(1)(b)(ii) 48
s 5(1)(c) 48
s 5(1)(d) 49, 209
s 5(1)(e) 49, 118, 486
s 5(2) 46, 49, 486
s 7 46
s 8 40, 42, 43
s 9 43
ss 10–15 52
s 10(1 56
s 11(a), (b) 53
s 12 56
s 12(a), (b) 56
s 14 57
s 15(1), (2) 57
s 16 71, 79
s 16(1) 80
s 16(2) 71
s 16(4) 71, 84
s 16(5) 71
ss 17–25 108
s 17 109, 110, 119
s 17(1) 41, 116, 117
s 17(2) 116, 117
s 17(3) 117
s 17(4)(a), (b) 118
s 18 109
s 18(1) 118
s 19 109, 110, 118, 119
s 20 122, 123, 429
s 21 122, 124–127
s 21(a) 130, 131
s 21(b) 130, 131
s 21(c) 131
s 21(d) 128, 129
s 21(e) 129, 130
s 21(f) 130
ss 26–57 132
s 26(1) 182–184, 545
s 26(2) 137, 138
s 27 186, 189, 190
s 27(a)–(c) 186
s 28 185, 187, 188
s 28(a) 185, 187, 192, 193
s 28(b) 187, 188
s 29(1) 91, 136
s 29(2) 140
s 30(1) 144
s 30(1)(a) 144
s 30(1)(b) 144–146
s 30(2) 146
s 30(3) 145, 146
s 31(1) 147
s 31(2)–(5) 148
s 31(6)(a) 148, 149
s 31(6)(b), (c) 149
s 31(7)(a), (b) 149
s 33(1), (4)–(6) 188
s 34 142
s 34(1) 142, 143
s 34(2) 143
s 34(2)(a)–(c) 143
s 35(1), (2) 143
s 36 143, 144
s 37(1) 152, 153, 155
s 37(2) 153
s 37(2)(a), (b) 153
s 38(1), (2) 153
s 39 152, 155
s 39(2) 155
s 39(2)(a), (b) 155
s 40 155, 156
s 40(1)(a), (b) 156
s 40(1)(c) 157
s 40(2)(a), (b) 157
s 41(1) 158, 190
s 41(2) 158, 159
s 42 161
s 44 175
s 44(1) 175, 179
s 44(1)(a)–(c) 175
s 44(2), (3) 176
s 44(3)(a) 176
s 44(3)(b) 177
s 44(4), (5) 176, 177
s 44(5)(a) 177
s 44(5)(b) 178
s 44(6) 176, 178
s 45(1)–(3) 179
s 45(4)(a), (b) 180
ss 46, 47 180
s 49 157
s 49(1), (2) 157
s 49(3)(a), (b) 157
s 50 180
s 51 167, 172, 174
s 51(a), (b) 172
s 52 167
s 52(1), (2) 173, 174
s 52(3) 174
ss 53–55 162
s 53 124, 130, 163
s 53(1), (2) 163
s 53(2)(a), (b) 163
s 54 163
s 54(a) 164
s 54(b)–(d) 165
s 54(e)(i)–(iii) 165
s 55 164
s 57(1), (2) 556
s 58(1) 119, 203, 205, 228
s 58(1)(a) 200, 268
s 58(1)(b) 167, 168, 200
s 59 228
s 59(2) 228
s 60 228
s 60(1) 229
s 61 228
s 61(1), (2) 229
s 61(2)(a)–(e) 229
s 62(1) 18, 209
s 63 119, 206
s 64(1) 207
s 64(2)–(4) 207
s 65 224
s 65(1), (2) 224
s 66(1) 210
s 66(2) 211
s 66(3) 201
s 67(1) 211
s 67(1)(a), (b) 211
s 67(2)–(4) 211
s 68 212
s 69 124, 215, 502
s 69(1) 46, 50, 213
s 69(2) 46, 214
s 69(3) 46, 214, 215, 217, 220, 282, 284
s 69(4)–(6) 215, 220
s 69(7), (8) 216
s 70(1), (2) 203
s 71 209, 217
s 71(a) 209, 217
s 71(b)–(e) 218
s 71(h) 210
s 72 220
s 73 221
s 73(1) 222
s 73(1)(a), (b) 221
s 73(2), (3) 222
s 74(1), (2) 222
s 74(3) 223
s 74(3)(a), (b) 219
s 74(4) 223
s 74(4)(a), (b) 219
s 75(1), (2) 218
s 75(5) 219, 220
s 76 209
s 77 124
s 78 225
s 78(1) 224
s 78(2) 225
s 79(1) 224
s 79(2) 225
s 80 225
s 81(1), (2) 226
s 82(1), (2) 208
s 82(2)(a) 167, 208
s 82(2)(b)–(i) 208
s 83 201, 219, 228
s 84 226
s 84(1) 226
s 84(1)(b) 226
s 84(2) 227
ss 85–86 178, 180
s 85 178, 273
s 86 274
s 86(a)–(d) 179, 273, 274
s 86(e) 178, 274
s 87 275
s 88(1), (2) 274
s 88(2)(a)–(c) 274
s 89 274
s 90 275
s 91(1) 249, 251, 253, 257
s 91(1)(a), (b) 252
s 91(2)(a)–(d) 253
s 91(3)(a)–(c) 253
s 91(4), (5) 254
s 91(5)(a)–(e) 254
s 92 255
s 93 251, 255
s 94 256
s 95(a)–(c) 228
s 96(1)(b) 437
s 97 257
s 97(1) 234, 235, 242, 245–247, 257
s 97(1)(a) 231–233, 236, 588, 589
s 97(1)(b) 266, 267, 270
s 97(2) 234, 236–240, 257
s 97(3) 234, 237, 257
s 97(4) 265, 271
s 97(5) 120
s 97(6) 277
s 98 275
s 98(1) 275, 276
s 98(1)(a)–(c) 276
s 98(2) 276
s 98(3)(a), (b) 276
s 98(4)(a), (b) 277
s 99–101 278
s 99(1) 278
s 99(2)(a) 278
s 99(2)(b) 279
s 100 279
s 100(a)–(c) 280
s 101 280
s 102 280, 281
s 103 278
s 103(1)–(3) 280
s 104 221
s 105(4)–(6) 289
s 106 289
s 107 282, 283, 462
s 107(a) 283
s 107(b) 286
s 108(2) 290
s 109(a)(i), (ii) 291
s 110 290
s 111 500
s 111(1) 290
s 111(1)(a)–(c) 290
s 111(2)–(4) 291
s 112 284
s 112(1) 284
ss 114–122 292
s 114 487
s 114(a), (b) 292
s 115 216
s 115(1), (2) 293
s 116 216, 294
s 116(a), (b) 294
s 117 293
s 117(a) 216, 293
s 117(b)–(e) 293
s 118 294
s 119 294
s 120 295
s 121 293
s 122 294, 295
s 123(1) 295, 296
s 123(1)(a) 296
s 123(1)(b)(i),
296
(ii)
s 123(2) 296
s 123(3)(a), (b) 296
s 123(4) 296
s 124 52, 296
s 124(a), (b) 296
s 125(1), (2) 297
s 125(3) 298
s 125(4) 297
s 126 217, 299
s 127(1), (2) 300
s 128 300
s 129(1) 217, 299
s 129(2) 299
s 130(1) 308
s 130(1)(a), (b) 308
s 130(2) 308
s 131(1) 121, 286
s 131(2), (3) 286
s 131(3)(a) 286
s 131(3)(b), (c) 287
s 131(4)–(6) 287
s 132(1) 287
s 132(1)(a)(i),
287
(ii)
s 132(1)(c) 287
s 132(2), (3) 288
s 134 308
s 135 309
s 135(1) 310
s 135(2) 310, 313
s 135(3) 310
s 135(4) 314
s 136 124, 130
s 137(1)(a), (b) 301
s 137(1)(c) 307
s 137(1)(d) 303
s 137(1)(d)(i)–
303
(iii)
s 137(1)(d)(iv) 304
s 137(1)(e) 304
s 137(2)(a)–(d) 304
s 138(1)–(3) 302
s 139 302
s 139(a) 302
s 139(a)(i), (ii) 302
s 139(b) 302
s 140(1), (2) 303
s 141(1) 304
s 141(2) 18
s 142 305
s 142(a), (b) 305
ss 143, 144 305
s 145 308
s 145(1) 306
s 145(1)(a), (b) 306
s 145(2)(a)–(c) 306
ss 146–147 307
s 146(1) 307
s 146(1)(a), (b) 307
s 146(2)–(6) 307
s 148(1) 306
s 148(1)(a), (b) 306
s 148(2) 306
s 148(2)(a)–(c) 306
s 148(3) 306
s 149 462
s 149(1) 517
s 149(1)(a) 284, 517, 518
s 149(1)(a)(i),
518
(ii)
s 149(1)(b) 284, 517, 522
s 149(1)(c) 517, 522
s 149(2), (3) 518
s 150 522
s 151(1) 91, 524
s 151(2) 524
s 151(3), (4) 525
s 152 462
s 152(1), (2) 523
s 153(1) 523
s 153(2), (3) 524
s 153(4)(a)–(c) 524
s 153(4)(d)(i)–
(iii) 524
s 154(1) 18, 19, 525

s 154(1)(a) 525, 526
s 154(2), (3) 525
s 154(4)(a), (b) 526
s 154(5) 526
s 156(1) 526
s 156(2) 527
s 156(3) 526
s 156(4) 527
s 156(5) 527
s 157 528
s 158(1) 530
s 158(1)(a), (b) 530
s 158(2), (3) 530
s 160(1) 533
s 160(1)(a), (b) 532
s 160(2), (3) 533
s 161(1)–(4) 533
s 162(1) 282, 527, 528
s 162(2), (3) 529
s 163 529
s 163(1) 18, 527, 529
s 163(2), (3) 527, 529
s 164(1)(a) 533
s 164(1)(b) 534
s 164(2) 534
s 165(2) 534
s 166(1)–(4) 534
s 167(1), (2) 535
s 168 535
s 170(1), (2) 536

s 171(1) 527, 535, 540
s 171(2), (4) 540
s 172 434, 537
s 172(1), (2) 434, 537
s 172(3) 434
s 173(1)–(3) 538
s 174 544
s 175(1)–(2) 557
s 176 124, 502
s 176(1) 50, 557
s 176(2) 557
s 177(1) 563
s 177(1)(a) 58, 206, 563
s 177(1)(b), (c) 563
s 177(2) 557
s 177(2)(a)–(c) 558
s 177(3) 559, 560
s 177(4) 558, 561
s 177(4)(a)–(f) 558
s 177(5) 559
s 177(6) 562
s 178(1) 559
s 178(1)(a)–(c) 559
s 178(2), (3) 559
s 178(3)(a)–(c) 560
s 178(5) 559
s 179(1) 560
s 179(2)(a)–(d) 560
s 179(3)(a)–(c) 560
s 179(3)(d) 561
s 179(4)–(8) 561
s 180(2) 561
s 180(2)(a), (b) 561
s 181(1) 561, 562
s 181(2) 562
s 182(2), (3) 562
s 183(1), (2) 562
s 184(1) 562
s 184(1)(a), (b) 562
s 186(1)(a), (b) 563
s 186(2) 563, 564
s 186(3)–(5) 563
s 187(1), (2) 516, 564
s 187(3) 517, 564
s 188(a), (b) 564
s 189 565
s 190(1), (2) 565
s 191(1) 566, 567
s 191(1)(a)–(c) 567
s 191(2), (3) 567
s 191(3)(a), (b) 567
s 191(4)(a)–(c) 566
s 191(5) 566
ss 192, 193 567
s 193(a)–(c) 567
s 195(1) 545, 546, 550
s 195(2) 550
s 195(3) 551
s 195(4)(a), (b) 551
s 195(5)–(7) 551
s 196(1)–(3) 546
s 197 552
s 197(1), (2) 552
s 197(3)(a), (b) 552
s 197(4), (5) 553
s 197(6)(a) 552
s 197(6)(b) 553
s 198 552
s 198(1)–(3) 553
s 199 555
s 199(1)–(3) 555
s 200(1)–(3) 554
s 201(a) 570
s 201(b) 571, 572
s 201(f) 571
s 201(f)(i), (ii) 571
s 201(g) 571
s 202 570, 571
s 203 570, 572
s 203(a), (b) 572
s 203(c)(i), (ii) 572
s 203(d), (e) 573
s 204 572
ss 205–208 573
s 208(a), (b) 573
s 208(c)(i) 573
s 208(c)(ii), (iii) 574
s 209(1)–(3) 574
s 210 574
s 210(a), (b) 574
s 211(1)–(3) 574
s 212 575
s 212(a)–(d) 575
s 213(1) 194, 484
s 213(1)(a), (b) 484
s 213(1)(c)–( j) 195, 485
s 213(1)(k) 485, 486
s 213(1)(l), (m) 486
s 213(2), (3) 486
s 214(1), (2) 487
s 215(1) 196, 197, 488
s 215(1)(a)–(c) 196
s 215(1)(c)(i)–
196
(iv)
s 215(1)(d)–(h) 196
s 215(2) 197, 488
s 215(3) 196, 488
s 215(4) 197, 488
s 216(1) 488
s 217(1)–(2) 488
s 217(3)(a)–(b) 488
s 218(1)–(4) 489
ss 219–225 494
s 219 496
ss 220–221 498
s 220(1) 498
s 220(1)(a)–(g) 499
s 220(2) 499, 500
s 221(1), (2) 500
s 221(2)(a), (b) 500
s 221(3)–(5) 500
s 221(6) 501
s 222 498, 501
s 222(a), (b) 501
s 222(b)(i)–(iii) 501
s 223 498, 501
s 223(a) 501
s 223(b)(i)–(iii) 502
s 224(1), (2) 502
s 224(2)(a) 502
s 224(2)(a)(i),
502
(ii)
s 224(2)(b)(i),
502
(ii)
s 224(3)(a)–(c) 503
s 225(1) 503
s 225(2)(a) 497, 503
s 225(2)(b), (c),
498
(e)–(g)
ss 226–235 357
s 226(1) 357–359, 366
s 226(1)(a)–(d) 358
s 226(2) 357, 513
s 226(3) 359
s 226(4) 359, 363
s 226(5)(b) 367
s 226(6) 367
s 226(7) 368
s 227(1) 368
s 227(1)(a)–(c) 368
s 227(2)–(4) 368
s 228 369
s 228(a)–(c) 369
s 228(c)(i)–(iii) 369
s 229(1) 369
s 229(1)(a) 369
s 229(2), (3) 370
s 230(1) 371
s 232(1), (2) 371
s 232(3) 372
s 233 372
s 234(1), (2) 370
s 234(2)(a), (b) 370
s 235 370
s 236 507
s 236(1)(a)–(c) 507
s 236(2) 507
s 236(3)(a), (b) 508
s 236(4–(6) 508
s 236(7) 359, 508
s 237 508
s 237(1)(a)–(d) 509
s 237(1)(e)–(g) 510
s 237(2) 511
s 237(2)(a), (b) 511
s 237(3) 509, 510
s 237(4) 512
s 237(4)(a) 512
s 237(4)(b) 511, 512
s 237(4)(c) 357, 359, 512
s 237(4)(d) 513
s 237(5) 512
s 237(6)–(8) 514
s 238 321
s 238(b) 315, 316
s 238(b)(i) 239, 316
s 238(b)(ii) 318
s 238(b)(iii) 319
s 238(b)(iv) 240, 320
s 239 316, 323, 324, 327
s 239(1), (2) 328
s 239(2)(a), (b) 328
s 239(2)(c) 329
s 240 323, 329
s 240(a), (b) 329
s 240(c), (d) 330
s 241 239, 240, 315, 330, 331
s 241(1) 316, 321
s 241(2) 320, 321, 334
s 241(3) 337
s 241(3)(a) 121, 339
s 241(3)(b)–(g) 339
s 241(3)(h) 121, 340
s 241(3)(i)–(k) 340
s 241(3)(l) 340, 344
s 241(3)(m), (n) 340
s 241(4)(a), (b) 340
s 241(5), (6) 341
s 241(6)(a), (b) 341
s 242(1) 341
s 242(2) 342
s 243 342
s 244 344
s 244(1), (2) 355
s 244(3) 355
s 244(3)(a)–(d) 356
s 248 59, 344, 354, 355
ss 250–265 408
s 250 423, 426, 428
s 250(1) 423, 425, 428, 430
s 250(1)(a) 423
s 250(1)(b) 424
s 250(2) 430
s 250(3) 427
s 250(3)(a), (b) 427
s 251(1)(a)–(e) 424
s 251(1)(f) 424, 429
s 251(2) 424
s 251(2)(a)–(c) 424
s 251(3) 424, 425
s 253 430, 431
s 255 431
s 255(2) 431
s 256(1) 425
s 256(1)(a), (b) 425
s 256(2) 425
s 257(1)(a) 425
s 257(2) 425
s 258 423
s 258(2) 426
s 259 431
s 259(1)(a), (b) 432
s 259(2) 432
s 260(1) 432
s 260(1)(a), (b) 432
s 260(2) 432
s 260(3)(a), (h) 121
s 261 432, 433
s 261(a) 432
s 261(b), (c) 433
s 262(1), (2) 433
s 263 433
s 264(1) 458
s 264(2) 460, 470
s 265(1)(f) 433
s 266(b) 445
s 266(c) 442
s 267 18
s 268 445
s 268(1)–(5) 445
s 269(1) 446
s 269(1)(a)–(c) 446
s 269(2), (3) 446
s 269(4)(a), (b) 446
s 269(5)(a)–(c) 446
s 270(1) 448
s 270(1)(a)–(c) 448
s 270(2) 448
s 271 448
s 271(a), (b) 448
s 271(c) 449
s 272(a)–(c) 449
s 274 448
s 275 447
s 276(1) 438
s 276(2) 437
s 277(a), (b) 447
ss 278, 279 447
s 280(1), (2) 449
s 280(2)(a), (b) 449
s 280(3) 449, 450
s 280(3)(a)–(c) 450
s 281(1)–(3) 443
s 281(3)(a)–(c) 443
s 282 438
s 282(1) 438
s 282(1)(a)–(d) 439
s 282(2) 439
s 282(2)(a) 439
s 283 440, 442
s 285(1) 437, 440, 443
s 285(1)(a) 440, 443
s 285(1)(b) 440, 441, 443
s 285(1)(c) 443
s 285(1)(d), (e) 444
s 285(1)(f) 441, 444
s 285(1)(g) 444
s 285(1)(h) 438, 441, 444
s 285(1)(i), ( j) 441, 444
s 285(1)(k) 444
s 285(1)(l), (m) 441, 444
s 285(1)(n) 445
s 285(2) 442
s 286 439
s 286(1) 440
s 286(1)(a) 437, 440
s 286(1)(b), (c) 441
s 286(2) 439, 440
s 287 450
s 287(1) 450, 456
s 287(1)(a)–(d) 450
s 287(2) 456
s 287(2)(a)–(e) 451
s 287(3) 452, 456
s 287(3)(a), (b) 455, 456
s 287(4) 463
s 287(4)(a) 464
s 287(4)(b)(i)–
464
(vi)
s 287(5) 460, 464
s 288(1)(a) 455
s 288(1)(b) 455, 459
s 288(1)(c) 455, 459
s 288(2) 459, 460
s 289 454, 462
s 290 454
s 291 461, 463
ss 293, 294 465
s 294(a), (b) 465, 466
s 295 459, 463
s 295(c) 459
s 296 465, 466
s 296(b)–(f) 467
s 296(g), (h) 467, 470
s 297(1) 470
s 297(1)(a), (b) 471
s 297(2) 472
s 297(2)(a), (b) 472
s 298 467
s 299(1) 469
s 299(3) 470
s 300 465
s 300(1)(a) 466, 468
s 300(1)(b) 468
s 300(1)(c)(i)–
468
(iii)
s 300(1)(c)(iv) 469
s 300(2) 468
s 300(3)(a), (b) 468
s 300(4), (5) 469
s 301 465
s 301(1)(a)–(d) 468
s 302(b) 383
s 302(c) 375, 379
s 303 18
s 304(1)(a), (b) 379
s 304(2) 378
s 305(a), (b) 376
s 305(c)–(f) 377
s 306 377, 378
s 307 378
s 307(a), (b) 378
s 308(1)(a) 383
s 308(1)(b)(i)–
383
(iii)
s 308(2) 383
s 308(2)(a)–(c) 383
s 308(2)(c)(i), (ii) 383
s 308(2)(d)(i)–
384
(iv)
s 308(3) 383
s 308(3)(a)–(h) 384
s 308(4) 385
s 309(1) 385
s 309(1)(a)–(c) 385
s 309(2) 385
s 310 385
s 310(a)–(c) 385
s 311(1), (2) 386
s 311(2)(a)–d) 386
s 311(3) 386
s 311(4)–(6) 387
s 312(1) 380, 387
s 312(2) 387
s 312(2)(a), (b) 387
s 312(3) 387
s 312(4)(a), (b) 388
s 312(5) 388
s 313(1)(a), (b) 378
s 313(2) 378
s 314 399
s 314(1) 399–401
s 314(1)(a)–(d) 401
s 314(2) 401
s 314(3)(a)–(d) 402
s 314(4)(a), (b) 402
s 314(6) 403
s 314(6)(a)–(c) 403
s 314(7) 403
s 314(7)(a), (b) 403
s 315 388
s 315(1)–(3) 389
s 316(1)–(6) 390
s 317 391
s 318 393, 396, 397, 404
s 318(1) 404
s 318(1)(a), (b) 404
s 318(2)(a), (b) 404
s 318(3)–(7) 405
s 318(7)(a), (b) 406
s 318(8) 406
s 318(8)(a), (b) 406
s 318(9), (10) 406
s 318(12), (13) 407
s 318(14) 393, 397, 404
s 320 391
s 321(1)(a), (b) 391
ss 322–325 473
s 322(a)–(d) 476
s 322(e)(i), (ii) 477
s 323(1)(a), (b) 477
s 323(2)(a), (b) 477
s 323(3) 477
s 324 475
s 324(a) 479, 480
s 324(b) 480
s 325 480
s 326(1) 19, 92
s 326(3) 19
s 328 20
s 328(1), (2) 20
s 329 20
s 329(a)–(d) 20
s 330(1), (2) 20
s 331(1), (2) 20
s 332(1), (2) 21
s 333 21
s 333(a), (b) 21
s 334(1), (2) 21
s 335(1), (2) 21
s 336(1) 21
s 336(1)(a)–( j) 22
s 336(2) 22
s 336(2)(a)–(c) 22
s 336(2)(d)–(g) 23
s 336(3)–(6) 23
s 337(1)–(3) 23
s 338 25
s 338(a)–(c) 25
s 340(1)–(4) 26
s 341(1), (2) 28
s 342(1), (2) 28
s 342(3)(a)–(c) 28
s 343 29
s 344(1) 26
s 344(1)(a)–(m) 27
s 344(2)(a)–(d) 27
s 344(2)(e) 28
s 345 28
s 346(1), (2) 28
s 346(3) 29
s 347 29
s 348(1)–(3) 29
s 349(1), (2) 29
s 350 29
s 351(1), (2) 30
s 352(1), (2) 30
s 353(1), (2) 30
s 354 31
s 355(1)–(3) 31
s 355(4), (5) 32
s 356(1)–(3) 32
s 357(1)–(5) 33
s 358 33
ss 360–369 37
s 360 64
s 360(1)(a) 64
s 362(1) 63
s 503 488
s 503(1)(a) 50, 52
s 509(1) 40
s 509(1)(a) 40, 41
s 509(1)(b)–(f) 41
ss 514–517 52
s 514 52
s 515 53
s 515(a) 53
s 515(a)(i), (ii) 53
s 515(b) 53
s 515(c)–(f) 54
s 516 53, 55
s 516(a) 55
s 516(a)(i)–(iii) 55
s 516(b)(i)–(iv) 55
s 516(c)–(e) 55
ss 518–526 344
ss 518–523 344
s 518(1), (2) 346
s 518(2)(a)–(d) 346
s 518(3) 347
s 518(4), (5) 348
s 519(1) 347
s 519(1)(a)–(l) 347
s 520(1), (2) 348
s 521(1), (2) 348
ss 522, 523 348
ss 524–526 344
s 524(1) 354
s 526 354
s 531(1)(f) 354
s 533 433
ss 538, 540 90
s 540(a) 90
s 542(1) 381
s 542(2) 382
s 543 76, 77, 128, 408
s 543(1) 15, 18, 25, 39, 182, 187, 310, 317, 477
s 543(1)(a) 476
s 543(1)(f) 128, 200, 227, 434, 435
s 544(1) 438
Companies
3
Ordinance 1874
Companies
8
Ordinance 1885
Joint Stock
Companies Act
2
1844 (7 & 8 Vict.
c. 110)
Securities Act
374, 473, 569
2001
Trinidad and
Tobago
Bankruptcy and
Insolvency Act 44, 452–455, 457, 458, 465, 472
No 26 of 2007
s 3 453, 454
s 12 455
s 13 456, 457
s 13(1) 457
s 13(2) 458
s 14 465
s 14(a), (b) 465
s 14(c)(i) 466
s 14(f) 468
s 14(g) 467
s 15 465
s 15(d), (f)–(h) 467
s 18 470
s 18(a), (b) 471
s 22 459
ss 178, 267 455
9, 11, 13, 15, 18–20, 24, 25, 31, 37, 44, 45, 48, 49, 53, 54, 57,
63–65, 91, 92, 119, 131, 137, 138, 142, 143, 150, 152, 153,
155–157, 163, 164, 168, 172, 173, 180, 182, 195, 203, 205–208,
215–218, 220–228, 230, 237, 265, 273–277, 280, 281, 284,
Companies Act 286–292, 295–303, 307–309, 315, 316, 318–320, 322, 323, 327,
1995 330, 331, 333, 340–342, 344, 347, 354–357, 359, 362, 363,
366–371, 397, 408–410, 412, 423, 425, 427, 429–445, 447, 448,
451– 470, 472, 483–489, 494, 496, 499–501, 503, 507–513,
515–518, 522–526, 528–537, 540, 543–547, 550–554,
556–566, 568–572, 575, 576, 589
Pt III Div 1 39
Pt III Div 3 133, 182
Pt III Div 9 545
Pt III Div 10 569
Pt III Div 11 483
s 3 39
15, 18, 19, 24, 25, 39, 76, 77, 90, 128, 182, 187, 200, 227, 310,
s 4
317, 408, 434, 435
s 5(1), (2) 90
s 8(1) 39, 44, 45, 90, 92, 117, 297
s 8(2) 44
s 8(2)(a)–(c) 44
s 8(3) 51
s 9 46, 117
s 9(1) 46, 49
s 9(1)(b) 47, 49, 484
s 9(1)(b)(i) 47
s 9(1)(b)(ii) 48
s 9(1)(c) 48
s 9(1)(d) 49, 209
s 9(1)(da) 48
s 9(1)(db) 49
s 9(1)(f) 49, 118, 486
s 9(2) 46, 49, 133, 134, 486
s 9(2A) 24
s 9(2A)(a) 24, 25
s 11 46
s 12 40, 42, 43
s 13 43
ss 14–19 52
s 14(1)(a) 56
s 15(a), (b) 53
s 16 56
s 16(a), (b) 56
s 17(1) 41
s 18 57
s 19(1), (2) 57
s 20 71, 74, 78, 79
s 20(1) 75–78, 80, 85
s 20(2) 75, 77, 81–83, 85
s 20(3) 83
s 20(3)(a), (b) 83
s 20(4) 84
s 20(5) 75, 77, 84, 85
ss 21–29 108
s 21 109, 110, 119
s 21(1), (3) 116, 117
s 21(4) 117
s 21(5)(a), (b) 118
s 22 109, 118
s 23 109, 110, 118, 119
s 24 122, 123
s 24(1), (2) 429
s 25 122, 124–127
s 25(a), (b) 130, 131
s 25(c) 131
s 25(d) 128, 129
s 25(e) 129, 130
s 25(f) 130
ss 30–57 132
s 30(1) 182–184, 545

s 30(2) 137, 138
s 31 186, 189, 190
s 31(a)–(c) 186
s 32 185, 187, 188
s 32(a) 185, 187, 192, 193
s 32(b) 187, 188
s 33(1) 91, 136
s 33(2) 140
s 34(1) 144
s 34(1)(a) 144
s 34(1)(b) 144–146
s 34(2) 146
s 34(3) 145, 146
s 35(1) 147
s 35(2)–(5) 148
s 35(6)(a) 148, 149
s 35(6)(b), (c) 149
s 35(7)(a), (b) 149
s 37(1) 187, 188
s 37(4) 188
s 38 142
s 38(1) 142, 143
s 38(2) 143
s 39(1), (2) 143
s 40 143, 144
s 41(1) 152, 153, 155
s 41(2) 153
s 41(2)(a), (b) 153
s 42(1), (2) 153
s 43 152, 155
s 43(2) 155
s 43(2)(a), (b) 155
s 44 155, 156
s 44(1)(a), (b) 156
s 44(1)(c) 157
s 44(2)(a), (b) 157
s 45(1) 158, 190
s 45(2) 158, 159
s 46 161
s 48 175, 180
s 48(1) 175, 179
s 48(1)(a)–(c) 175
s 48(2), (3) 176
s 48(3)(a) 176
s 48(3)(b) 177
s 48(4), (5) 176, 177
s 48(5)(a) 177
s 48(5)(b) 178
s 48(6) 176, 178
s 49(1)–(3) 179
s 49(4)(a), (b) 180
ss 50, 51 180
s 53 157, 167
s 53A 180
s 53(1), (2) 157
s 53(3)(a), (b) 157
s 54 167, 172, 174
s 54(a), (b) 172
s 55(1), (2) 173, 174
s 55(3) 174
s 56 124, 130, 162, 163
s 56(1), (2) 163
s 56(2)(a), (b) 163
s 57 162, 164
s 59(1) 556
s 60 119, 120
s 60(1) 203, 205, 209, 228
s 60(1)(a) 200, 268
s 60(1)(b) 167, 168, 200
s 61 228
s 61(1), (2) 228
s 62 228
s 62(1) 229
s 63 228
s 63(1), (2) 229
s 63(2)(a)–(e) 229
s 64(1) 18, 209
s 65 120, 206
s 66(1)–4) 207
s 67 224
s 67(1), (2) 224
s 68(1) 210
s 68(2) 211
s 69(1) 211
s 69(1)(a), (b) 211
s 69(2)–(4) 211
s 70 212
s 71 124, 215, 502
s 71(1) 46, 50, 213, 214
s 71(2) 46
s 71(3) 46, 201, 214, 215, 217, 220, 282, 284
s 71(4)–(6) 215, 220
s 71(7), (8) 216
s 72(1), (2) 203
s 73 209, 217
s 73(a) 209, 217
s 73(b)–(e) 218
s 73(h) 210
s 74(1) 220
s 74(2) 221
s 75 221
s 75(1) 222
s 75(1)(a), (b) 221
s 75(2), (3) 222
s 76(1), (2) 222
s 76(3), (4) 223
s 77(1), (2) 218
s 77(3)(a), (b) 219
s 77(4)(a), (b) 219
s 77(5) 219, 220
s 78(1), (2) 209
s 79 124
s 80 225
s 80(1) 224
s 80(2) 225
s 81(1) 224
s 81(2) 225
s 82 225
s 83(1), (2) 226
s 84(1), (2) 208
s 84(2)(a)–(c) 208
s 84(2)(d) 167, 208
s 84(2)(e) 820
s 84(2)(f)–(h) 208
s 85 201, 219, 228
s 86(1) 226
s 86(1)(b) 226
s 86(2) 227
ss 87–88 178, 180
s 87 178, 273
s 88 274
s 88(a)–(d) 179, 273, 274
s 88(e) 178, 274
s 89 275
s 90(2) 274
s 90(2)(a)–(c) 274
ss 91, 92 274
s 93(1) 249, 251, 253, 257
s 93(1)(a), (b) 252
s 93(2)(a)–(d) 253
s 93(3)(a)–(c) 253
s 93(4), (5) 254
s 93(5)(a)–(e) 254
s 94 255
s 95 251, 255
s 95(4) 254
s 96 256
s 97(a)–(c) 228
s 97(2) 236
s 98(1) 275
s 98(1)(b) 437
s 99 257
s 99(1) 234, 235, 242, 257
s 99(1)(a) 231–233, 588, 589

s 99(1)(b) 265–267, 270
s 99(2) 234, 236–240, 245–247, 257
s 99(3) 234, 237, 257
s 99(4) 265, 271
s 99(5) 120
s 99(6) 277
s 100 275
s 100(1) 275, 276
s 100(1)(a)–(c) 276
s 100(2) 276
s 100(3)(a), (b) 276
s 100(4)(a), (b) 277
ss 101–103 278
s 101(1) 278
s 101(2)(a) 278
s 101(2)(b) 279
s 102 279
s 102(a)–(c) 280
s 103 280
s 104 280, 281
s 105 278
s 105(1)–(3) 280
s 106 221
s 107(4)–(6) 289
s 108(1) 289
s 109 282, 283, 462
s 109(a) 283
s 109(b) 286
s 110(2) 290
s 111(a)(i), (ii) 291
s 112 290
s 113 500
s 113(1) 290
s 113(1)(a)–(c) 290
s 113(2)–(4) 291
s 114 284
s 114(1) 284
ss 116–124 292
s 116 487
s 116(a), (b) 292
s 117 216
s 117(1), (2) 293
s 118 216, 294
s 118(a), (b) 294
s 119 293
s 119(a) 216, 293
s 119(b)–(e) 293
ss 120, 121 294
s 122 295
s 123 293
s 124 294, 295
s 124(1), (2) 311
s 125(1) 295, 296
s 125(1)(a) 296
s 125(1)(b)(i),
296
(ii)
s 125(2) 296
s 125(3)(a), (b) 296
s 125(4) 296
s 126 296
s 126(a), (b) 296
s 127(1), (2) 297

s 127(3) 298
s 127(4) 297
s 128 217, 299
s 129(1), (2) 300
s 130 300
s 131(1), (2) 217, 299
s 132(1) 308
s 132(1)(a), (b) 308
s 132(2) 308
s 133 286
s 133(1) 121, 286
s 133(2), (3) 286
s 133(3)(a) 286
s 133(3)(b), (c) 287
s 133(4)–(6) 287
s 134(1) 287
s 134(1)(a)(i),
287
(ii)
s 134(1)(c) 287
s 134(2), (3) 288
s 136(1) 308
s 137 309
s 137(1) 310, 311
s 137(2) 310, 311, 313
s 137(3) 310
s 137(4) 314
s 138 124, 130
ss 139–149 300
s 139(1) 301, 303, 304, 307
s 139(1)(a)–(c) 303
s 139(1)(d) 304
s 139(2)(a)–(d) 304
s 140(1)–(3) 302
s 141 302
s 141(a) 302
s 141(a)(i), (ii) 302
s 141(b) 302
s 142(1), (2) 303
s 143(1) 304
s 143(2) 18
s 144 305
s 144(a), (b) 305
ss 145, 146 305
s 147(1) 306
s 147(1)(a), (b) 306
s 147(2)(a)–(c) 306
ss 148–149 307
s 148(1) 307
s 148(1)(a), (b) 307
s 148(2)–(6) 307
s 149 308
s 150(1) 306
s 150(1)(a), (b) 306
s 150(2) 306
s 150(2)(a)–(c) 306
s 150(3) 306
s 151 462
s 151(1)(a), (b) 284
s 152(1) 517
s 152(1)(a) 517, 518
s 152(1)(a)(i),
(ii) 518
s 152(1)(b), (c) 517, 522
s 152(2), (3) 518
s 153 522
s 153(1) 91, 524
s 153(2) 524
s 153(3), (4) 525
s 154 462
s 154(1), (2) 523
s 155(1) 523
s 155(2), (3) 524
s 155(4)(a)–(c) 524
s 155(4)(d)(i)–
524
(iii)
s 156(1) 18, 19, 525, 526
s 156(2) 525
s 156(3)(a), (b) 526
s 156(4) 526
s 157(1) 526
s 157(2) 527
s 157(3) 526
s 157(4), (5) 527
s 158(1) 530
s 158(1)(a), (b) 530
s 158(2), (3) 530
s 159 531
s 159(1)(a), (b) 531
s 159(2) 531
s 161(1)(a), (b) 532
s 161(2)–(4) 533
s 162(1)–(3) 533
s 163(1) 282, 527, 528
s 163(2), (3) 529
s 164 529
s 164(1) 18, 527, 529
s 164(2), (3) 529
s 165(1)(a) 533
s 165(1)(b) 534
s 165(2) 534
s 166(2) 534
s 167(1)–(4) 534
s 168(1), (2) 535
s 169 535
s 171(1), (2) 536
s 172(1) 527, 535, 540
s 172(2), (4) 540
s 173 537
s 173(1), (2) 537
s 174(1)–(3) 538
s 175(1) 557
s 176 124, 502
s 176(1) 50, 557
s 176(2) 557
s 177(1) 563
s 177(1)(a) 58, 206, 563
s 177(1)(b), (c) 563
s 177(2) 557
s 177(2)(a)–(c) 558
s 177(3) 559, 560
s 177(4) 558
s 177(4)(a)–(f) 558
s 177(5) 559
s 177(6) 562
s 178(1) 559
s 178(1)(a)–(c) 559
s 178(2), (3) 559
s 178(3)(a)–(c) 560
s 178(5) 559
s 179(1) 560
s 179(2)(a)–(d) 560
s 179(3)(a)–(c) 560
s 179(3)(d) 561
s 179(4)–(8) 561
s 180(2) 561
s 180(2)(a), (b) 561
s 181(1) 561
s 181(2) 561, 562
s 182(2), (3) 562
s 183(1), (2) 562
s 184(1) 562
s 184(1)(a), (b) 562
s 186(1)(a), (b) 563
s 186(2) 563, 564
s 186(3)–(5) 563
s 187(1), (2) 516, 564
s 187(3) 517, 564
s 188(a), (b) 564
s 189 565
s 190(1), (2) 565
s 190(3) 566
s 191(1) 566, 567
s 191(1)(a)–(c) 567
s 191(2), (3) 567
s 191(3)(a), (b) 567

s 191(4)(a)–(c) 566
s 191(5) 566
s 192 567
s 193 567
s 193(a)–(c) 567
s 195(1) 545, 546, 550
s 195(2) 550
s 195(3) 551
s 195(4)(a), (b) 551
s 195(5)–(7) 551
s 196(1)–(3) 546
s 197 552
s 197(1), (2) 552
s 197(3)(a), (b) 552
s 197(4), (5) 553
s 197(6)(a) 552
s 197(6)(b) 553
s 198 552
s 198(1)–(3) 553
s 199 555
s 199(1)–(3) 555
s 200(1)–(3) 554
s 201(a) 570
s 201(b) 571, 572
s 201(f) 571
s 201(f)(i), (ii) 571
s 201(g) 571
s 202 570, 571
s 203 570, 572
s 203(a), (b) 572
s 203(c)(i), (ii) 572
s 203(d), (e) 573
ss 204–208 573
s 208(a), (b) 573
s 208(c)(i) 573
s 208(c)(ii), (iii) 574
s 209(1)–(3) 574
s 210 574
s 210(a), (b) 574
s 211(1)–(3) 574
s 212 575
s 212(a)–(d) 575
s 213(1) 576
s 214(1) 194, 484
s 214(1)(a), (b) 484
s 214(1)(c)–(h) 195, 485
s 214(1)(i) 195, 485, 485
s 214(1)( j) 195, 485
s 214(1)(k) 485, 486
s 214(1)(l), (m) 486
s 214(2), (3) 486
s 215(1), (2) 487
s 216(1) 196, 197, 488
s 216(1)(a)–(c) 196
s 216(1)(c)(i)–
196
(iv)
s 216(1)(d)–(h) 196
s 216(2) 197, 488
s 216(3) 196, 488
s 216(4) 197, 488
s 218(1), (2) 488
s 218(3)(a), (b) 488
s 219(1)–(4) 489
ss 220–226 494
s 220 496
ss 221–222 498
s 221(1) 498
s 221(1)(a)–(g) 499
s 221(2) 499, 500
s 222(1), (2) 500
s 222(2)(a), (b) 500
s 222(3)–(5) 500
s 222(6) 501
s 223 498, 501
s 223(a), (b) 501
s 223(b)(i)–(iii) 501
s 224 498, 501
s 224(a) 501
s 224(b)(i)–(iii) 502
s 225(1), (2) 502
s 225(2)(a) 502
s 225(2)(a)(i),
502
(ii)
s 225(2)(b)(i),
502
(ii)
s 225(3)(a)–(c) 503
s 226(1) 503
s 226(2)(a) 497, 503
s 226(2)(b)–(g) 498
ss 227–236 357
s 227(1) 357–359, 366
s 227(1)(a)–(d) 358
s 227(2) 357, 513

s 227(3) 359
s 227(4) 359, 363
s 227(5)(b) 367
s 227(6) 367
s 228(7) 368
s 228(1) 368
s 228(1)(a)–(c) 368
s 228(2)–(4) 368
s 229 369
s 229(a)–(c) 369
s 229(c)(i)–(iii) 369
s 230(1) 369
s 230(1)(a) 369
s 230(2), (3) 370
s 231(1) 371
s 233(1), (2) 371
s 233(3) 372
s 234 372
s 235(1), (2) 370
s 235(2)(a), (b) 370
s 236 370
s 237 507
s 237(1)(a)–(c) 507
s 237(2) 507
s 237(3)(a), (b) 508
s 237(4)–(6) 508
s 237(7) 359, 508
s 238 363, 508
s 238(1)(a)–(d) 509
s 238(1)(e)–(g) 510
s 238(2) 511
s 238(2)(a), (b) 511
s 238(3) 509, 510
s 238(4) 512
s 238(4)(a) 512
s 238(4)(b) 511, 512
s 238(4)(c) 357, 359, 512
s 238(4)(d) 513
s 238(5) 512
s 238(6)–(8) 514
ss 239–240 315
s 239 321
s 239(b) 315, 316, 316
s 239(b)(i) 239, 316
s 239(b)(ii) 318
s 239(b)(iii) 319
s 239(b)(iv) 320
s 239(d) 240
ss 240–241 315
s 240 315, 323, 324, 327
s 240(1) 316, 328
s 240(2) 328
s 240(2)(a), (b) 328
s 240(2)(c) 329
s 241 323, 329
s 241(a), (b) 329
s 241(c), (d) 330
s 242 239, 240, 315, 330, 331
s 242(1) 321, 316
s 242(2) 320–322, 334
s 242(3) 337
s 242(3)(a) 121, 339
s 242(3)(b)–(g) 339
s 242(3)(h) 121, 340
s 242(3)(i)–(k) 340
s 242(3)(l) 340, 344
s 242(3)(m), (n) 340
s 242(4)(a), (b) 340
s 242(5), (6) 341
s 242(6)(a), (b) 341
s 243(1) 341
s 243(2) 342
s 244 322, 342
s 245 344
s 245(1)–(3) 355
s 245(3)(a)–(d) 356
s 249 59, 354, 355
ss 251–266 408
s 251 423, 426, 428
s 251(1) 423, 425, 428, 430
s 251(1)(a) 423
s 251(1)(b) 424
s 251(2) 430
s 251(3) 427
s 251(3)(a), (b) 427
s 252(1)(a), (e) 424
s 252(1)(f) 424, 429
s 252(2) 424
s 252(2)(a)–(c) 424
s 252(3) 424, 425
s 254 430, 431
s 256 431
s 256(2) 431
s 257(1) 425
s 257(1)(a), (b) 425
s 257(2) 425
s 258(1)(a) 425
s 258(2) 425
s 259 423
s 259(2) 426
s 260 431
s 260(1)(a), (b) 432
s 260(2) 432
s 261(1) 432
s 261(1)(a), (b) 432
s 261(2) 432
s 262 432, 433
s 262(a) 432
s 262(b), (c) 433
s 263(1), (2) 433
s 264 433
s 265(1) 458
s 265(2) 460, 470
s 266 433, 447
s 267(b) 445
s 267(c) 442
s 268 18
s 269(1)–(5) 445
s 270(1) 446
s 270(1)(a)–(c) 446
s 270(2), (3) 446
s 270(4)(a), (b) 446
s 270(5)(a)–(c) 446
s 271(1) 448
s 271(1)(a)–(c) 448
s 271(2) 448
s 272 448
s 272(a), (b) 448
s 272(c) 449
s 273(a)–(c) 449
s 275 448
s 277(1) 438
s 277(2) 437
s 278(a), (b) 447
ss 279, 280 447
s 281(1), (2) 449
s 281(2)(a), (b) 449
s 281(3) 449, 450
s 281(3)(a)–(c) 450
s 282(1)–(3) 443
s 282(3)(a)–(c) 443
s 283 438
s 283(1) 438
s 283(1)(a)–(d) 439
s 283(2) 439
s 283(2)(a) 439
s 284 440, 442
s 286(1) 437, 440, 443
s 286(1)(a) 440, 443
s 286(1)(b) 440, 441, 443
s 286(1)(c) 443
s 286(1)(d), (e) 444
s 286(1)(f) 441, 444
s 286(1)(g) 444
s 286(1)(h) 438
s 286(1)(h)–( j) 441, 444
s 286(1)(k) 444
s 286(1)(l), (m) 441, 444
s 286(1)(n) 445
s 286(2) 440
s 287 439
s 287(1) 440
s 287(1)(a) 437, 440
s 287(1)(b), (c) 441
s 287(2) 439, 440, 442
s 288 450
s 288(1) 450, 456
s 288(1)(a)–(d) 450
s 288(2) 456
s 288(2)(a)–(e) 451
s 288(3) 452, 456
s 288(3)(a), (b) 455, 456
s 288(4) 463
s 288(4)(a) 464
s 288(4)(b)(i)–
464
(vi)
s 288(5) 460, 464
s 289(1)(a) 455
s 289(1)(b), (c) 455, 459
s 289(2) 459, 460
s 290 454, 462
s 291 454
s 292 461, 463
s 293(a), (b) 465, 466
ss 294, 295 465
s 296 459, 463
s 296(c) 459
s 297 465
s 297(a) 466
s 297(b)–(f) 467
s 297(g), (h) 467, 470
s 298(1) 470
s 298(1)(a), (b) 471
s 298(2) 472
s 298(2)(a), (b) 472
s 299 467
s 300(1) 469
s 300(3) 470
s 301 465
s 301(1)(a) 466
s 301(1)(b) 468
s 301(1)(c)(iv) 469
s 301(2) 468
s 301(3)(a), (b) 468
s 301(4), (5) 469
s 302 465
s 302(1)(a)–(c) 468
s 302(1)(c)(i)–
468
(iii)
s 302(1)(d) 468
s 307(3) 19
s 308 20
s 308(1), (2) 20
s 309 20
s 309(a)–(d) 20
s 310(1), (2) 20
s 311(1), (2) 21
s 312 21
s 312(a), (b) 21
s 313(1), (2) 21
s 314(1), (2) 21
s 315(1) 21
s 315(1)(a)–( j) 22
s 315(2) 22
s 315(2)(a)–(c) 22
s 315(2)(d)–(g) 23
s 315(3)–(6) 23
s 316 23
s 316(1) 23
s 317 25
s 317(a), (c) 25
s 318(1) 26
s 318(1)(a)–(m) 27
s 318(2)(a)–(d) 27
s 318(2)(e) 28
s 319(1)–(4) 26
s 320 28
s 321 28, 29
s 323(1), (2) 28
s 323(3) 29
ss 324, 325 29
s 325(1)–(3) 29
s 325(2) 29
s 326(1), (2) 29
s 327 29
s 328(1), (2) 30
s 329(1), (2) 30
s 330(1), (2) 30
s 331 31
s 333(1)–(3) 32
s 334(1)–(5) 33
s 335 31
s 335(a), (b) 31
s 335(1)–(3) 31
s 335(4), (5) 32
s 336 33
s 336(1) 32
ss 338–347 37
s 338 64
s 338(1)(a) 64
s 340(1) 63
s 480(1)(a) 50
s 481 488
s 481(1)(a) 52
s 487(1) 40
s 487(1)(a) 40, 41
s 487(1)(b)–(f) 41
s 488(1) 346
ss 492–493 52
s 492 52
s 493 53, 54
s 493(a) 53
s 493(a)(i), (ii) 53
s 493(b), (ba),
54
(c)–(f)
s 496 57
ss 497–503 344
ss 497–499 344
s 498(2) 346
s 498(2)(a)–(d) 346
s 498(3) 347
s 498(4), (5) 348
s 499(1) 347
s 499(1)(a)–(l) 347
s 500(1), (2) 348
s 501(1), (2) 348
ss 502, 503 348
ss 504–506 344
s 511(1)(f) 354
s 518(1) 438
s 529 433
s 544(1) 354
s 546 354
Companies
8
Ordinance 1868
Companies
3, 4
Ordinance 1889
Companies
4, 8, 9
Ordinance 1914
Companies
4, 9, 64
Ordinance 1950
Judgments
Extension Act, 33
Chap. 5: 02
Misrepresentation
395, 396
Act Ch 82: 35
s 1 397
Securities
Industries Act, 374
Chap 83: 02
Securities
Industries Act, 374
Chap 83: 03
Securities
569
Industry Act 1995
Trade Marks Act
—
s 13A 53
United
Kingdom
Bills of Sale Act
436
1882
Cinematograph
98
Films Act 1938
Companies Act
1862 (25 & 26 1, 2–8, 86–88, 108, 110, 151, 428
Vict. c. 89)
Companies Act
1867 (30 & 31 4, 6, 428
Vict. c. 131)
Companies Act
1900 (63 & 64 4, 428
Vict. c. 48)
Companies Act 4, 16, 17, 428
1907 (7 Edw. 7, c.
50)
Companies Act
6–8, 428
1908
Companies Act
1911 (7 Edw. 7 c. 16, 428
50)
Companies Act
1929 (19 & 20
4, 428
Geo. 5, c. 23)
Sch 1, table A 5
Companies Act
1947 (10 & 11 4, 428
Geo. 6, c. 47)
Sch 1, table A 5
Companies Act
1948 (11 & 12 2, 4, 8, 331, 332, 428
Geo. 6, c. 38)
s 210 331, 334–336
s 222(f) 332
s 349(2) 471
s 369(2) 470, 471
Sch 1, table A 5
Companies Act
77, 202, 267
1985
s 14 60, 64
s 36C 71, 75
s 125 186
Companies Act
65
2006
s 583(3) 145
Companies
Clauses Act 1863
(25 & 26 Vict. c.
118)—
s 1(1) 42
s 16 184
Companies
(Consolidation)
2, 4, 16
Act 1908 (8 Edw.
7, c. 69)
Dentists Act 1878 41, 42
Directors
Liability Act 1890 394, 399
Employment Act
1980—
s 17(3) 101
European
Communities Act
—
s 9(2) 79, 80
Foreign
Jurisdiction Act 33
1890 (UK)
Joint Stock
Companies Act
1, 2, 59, 122
1844 (7 & 8 Vict.
c. 110)
s 7 123
Joint Stock
Companies Act 92
1855
Joint Stock
Companies Act
1, 3, 114
1856 (19 & 20
Vict. c. 47)
Limited Liability
Act 1855 (18 & 19 2, 3
Vict. c. 133)
Mental Health
44
Act 1983
Merchant
Shipping Act
1894—
s 502 103
Misrepresentation
395, 397
Act 1967
Statute of Frauds 420
Trade Description
104, 105
Act 1968
s 24 106
s 24(1) 105
Video Recordings
106
Act 1984
s 11(2) 106
s 11(2)(b) 106
Winding-Up Act
2
1844
Winding-Up Act
1848 (11 & 12 2
Vict. c. 45)
Winding-Up Act
1849 (12 & 13 2
Vict. c. 108)
Chapter 1
Modern Commonwealth Caribbean
Company Law in Perspective
Introduction
Modern Commonwealth Caribbean company law has its origins in English
legislative and case-law developments. These developments occurred mainly
during the second half of the nineteenth century. By this time almost all of the
territories in the Commonwealth Caribbean were either settled or conquered
by, or ceded to, England.1 The legal consequence of this was that English
company legislation was not introduced into the region on general principles
governing what is called reception of law.2 Rather, Commonwealth Caribbean
company legislation was introduced by the local legislatures adopting and
repeating the provisions of one English Companies Act or another. In the
meantime, English company case law was introduced with the adoption of the
legislation on the general principles governing the authority of English judicial
precedents on adopted English legislation.3
The company as a legal creature evolved in the Commonwealth Caribbean
for over a century in the image of its English progenitor.4 Indeed, as will be
seen, recent companies legislation in the region, although introducing
significant changes intended to modernise company law, does not
fundamentally alter or replace the company as it had been known up to the
time of the recent legislation. Put simply, recent company legislation in the
Commonwealth Caribbean has not ‘invented any new legal creature’;5 it has
merely preened the existing legal creature. Thus, a better understanding of the
present law on companies in the Commonwealth Caribbean may be derived
against the backdrop of a quick outline of the development of company law in
England.
English Origins of Commonwealth Caribbean
Company Law6
Legislative roots
The company as a legal construct in English law grew out of five major pieces
of legislation. These are the Joint Stock Companies Act 1844,7 the Joint Stock
Companies Act 1856,8 the Companies Act 1862,9 the Companies
(Consolidation) Act 190810 and the Companies Act 1948.11
As will be seen, these are the main Acts on which Commonwealth
Caribbean states modelled their company legislation. Accordingly, a brief
outline of these Acts will assist in understanding the development of company
law in the region.
English Joint Stock Companies Act 1844
The tap-root of modern Commonwealth Caribbean company law is

undoubtedly the English Joint Stock Companies Act 1844. The importance of
this Act in Commonwealth Caribbean company jurisprudence does not reside
in its widespread adoption in the region; after all, the only Commonwealth
Caribbean territories in which it was adopted were Antigua in 1844 and St
Vincent in 1846. The real importance of this Act is that it introduced three
fundamental principles which have remained from that time at the bedrock of
English, and consequently Commonwealth Caribbean, company law.
The first principle which the Act introduced was the principle that a clear
distinction was to be drawn between private partnerships and joint stock
companies. This was achieved in this Act by providing for the registration of
all companies with more than twenty-five members, or with shares
transferable without the consent of all the members.
The second principle was the principle of incorporation by mere
registration, as opposed to incorporation by an Act of Parliament or by Royal
Charter. The system of registration which was introduced by this Act,
however, was somewhat ponderous. It consisted of provisional registration,
which only authorised the company to function for strictly limited preliminary
purposes. This was followed by complete registration on the filing of a deed of
settlement containing prescribed particulars and other documents. It was only
after the filing of the deed of settlement that the company for the first time
became incorporated.
The third principle was the principle of full publicity of the company’s
affairs in order to protect the investing public. This was achieved by the
establishment of the Office of Registrar and the requirement of the filing of
certain specified documents dealing with the affairs of the company.
There were two noteworthy principles which were not embraced by the
1844 Act. The first of these is that the Act did not include any provisions on
winding up as a distinct aspect of company law. Winding up was dealt with by
a separate Act, the Winding-Up Act 1844 which made companies subject to
general bankruptcy law. Subsequent Winding-Up Acts were passed in 184812
and 184913 conferring winding-up jurisdiction on the Court of Chancery.
The second is that the Joint Stock Companies Act 1844 did not provide for
limited liability. The concept of the limited liability of a registered company
was introduced for the first time by the Limited Liability Act 1855.14 This Act
was passed as an amendment to the 1844 Act and provided for the liability of
members of companies with at least twenty-five members holding £10 shares,
of which 20 per cent had been paid up, three-quarters of their capital
subscribed and the word ‘Limited’ after the company name to be limited to
the amount unpaid on shares. These requirements for limited liability, except
the requirement that the word ‘Limited’ be added to the company’s name,
were removed by the Joint Stock Companies Act 1856,15 which was enacted a
few months after the Limited Liability Act 1855.
English Joint Stock Companies Act 1856
It is worth noting here that the Joint Stock Companies Act 1856 is generally
regarded as the first of the modern English, and therefore, Commonwealth
Caribbean Companies Acts. In addition to liberalising the requirements for
limited liability, the Act also abolished the old system of provisional
registration and introduced the more modern form of incorporation by
registration of memorandum and articles of association as well as separate
winding-up procedures for companies. Incorporation of companies with or
without limited liability only required seven persons, associated for a lawful
purpose (not being banking or insurance), to sign a memorandum and comply
with other requirements.
English Companies Act 1862
The English Act which has had the most influence as a legislative model in
Commonwealth Caribbean company law is the English Companies Act 1862.16
This was the first Act to bear the modern title of Companies Act. It was
essentially a consolidation and amendment of the various enactments in
England up to that time. However, it introduced two significant provisions.
The first is a prohibition on any new company, association or partnership
having more than ten persons carrying on any business of banking or with
more than twenty persons carrying on any business for the procurement of
gain without being registered as a company under it. The second is provisions
for liability to be limited either by shares or by guarantee to such amount as
members might respectively undertake by the memorandum to contribute to
the assets of the company in the event of its being wound up.
The English Companies Act 1862 formed the basis of the Leeward Islands
Companies Act and consequently the basis of the Antigua Companies Act
1885, the Dominica Companies Ordinance 1885, the Montserrat Companies
Act 1885 and the St Kitts-Nevis-Anguilla Companies Act 1885. It was also the
basis of the Bahamas Companies Act 1886, the Grenada Companies Ordinance
1880, the Jamaica Companies Act 1865, the St Vincent Companies Ordinance
1874 and the Trinidad and Tobago Companies Ordinance 1889.
The 1862 Act was legislated into Belizean law by a peculiar legislative
technique in the Honduras Companies Act 1866. The Honduras Companies
Act 1866 declared that the law in England relating to companies was to be in
force in the colony. In this way, the law on companies up to 1866, including the
1862 Act, was incorporated into the law of Belize.
These regional Acts were virtual carbon copies of the English 1862 Act and
in Antigua, Bahamas, Dominica, Montserrat, St Kitts-Nevis-Anguilla and St
Vincent, except for a few minor amendments, remained the basic statutory
framework for regulating companies until their repeal and replacement by the
most recent Companies Acts in those territories.
English Companies (Consolidation) Act 1908
The fourth English statute to exert significant influence on the development of

company law in the Commonwealth Caribbean is the Companies
(Consolidation) Act 1908.17 This Act repealed the Companies Acts 1862 to 1908
and re-enacted their net effect. The three most important of the post-1862 Acts
were the Companies Act 1867,18 the Companies Act 190019 and the Companies
Act 1907.20
The first of these Acts, the Companies Act 1867, enabled companies with
limited liability to impose unlimited liability upon their directors or managing
directors in their memorandum. Provision was also made for companies
formed for the purpose of promoting commerce, art, science, religion, charity,
or any other useful object, and applying its profits or other income in
promoting its objects, and prohibiting payments of dividend to its members, to
be registered with limited liability without the use of the word ‘Limited’ as
part of its name.
The importance of the second of these Acts, the Companies Act 1900, is that
it established certificates of incorporation more clearly in relation to due
compliance with all requirements for registration. The innovations wrought by
the third Act, the Companies Act 1907, were more far reaching. Until this
time, the Companies Acts contemplated mainly public companies. However,
the Act of 1907 enabled two or more persons to register themselves as a
private company, or in other words, a company which by its articles restricted
the right to transfer its shares, limited its members to fifty and prohibited an
invitation to the public to subscribe for any of its shares or debentures. Such a
company was permitted, unless prohibited by its memorandum, to turn itself
into a public company by special resolution and the filing of certain
documents.21 Provisions were also introduced with respect to foreign
companies.22
The English Companies (Consolidation) Act 1908 spawned a number of
Companies Acts in the Commonwealth Caribbean. These include the first
companies statute to be enacted in Barbados, namely, the Barbados
Companies Act 1910; the British Honduras Companies Ordinance 1914 in
Belize, repealing and replacing the Honduras Companies Act 1866; the
Grenada Companies Ordinance 1927 which repealed and replaced the
Grenada Companies Ordinance 1880; the Guyana Companies (Consolidation)
Ordinance 1913; the St Lucia Title IV ‘Companies’ of the Commercial Code;
and the Trinidad and Tobago Companies Ordinance 1914, which repealed and
replaced the 1869 Ordinance.
Other English Acts up to and including 1948 Companies Act
What followed were a number of English Companies Acts which refined the
law in 1929,23 194724 and 1948,25 the last major English companies legislation to
be adopted in the Commonwealth Caribbean. Of these, the English
Companies Act 1929 was adopted by Trinidad and Tobago in their Companies
Ordinance 1950, and the English Companies Act 1948 was the cornerstone of
the Jamaica Companies Act 1965.
These enactments made provision for alteration of the constitution and
objects of the company, reduction of share capital and the statement of the
nominal or par value of shares in the memorandum of association. They also
introduced in Table A of the First Schedule certain rules and regulations for
the management of companies. Most notable of these was the express
stipulation that directors were to manage the affairs and business of the
company. However, for unlimited companies or those limited by guarantee,
Table A could be adopted in whole or in part. For any company limited by
shares, in so far as the articles of association did not exclude Table A, it was
taken to provide the regulations therefor.
Summary of English Company Legislation in the

Commonwealth Caribbean
Anguilla
The first legislation on companies in Anguilla was the St Kitts, Nevis and
Anguilla Companies Act 1885. This Act was an adoption of the Leeward
Islands Companies Act 1885. The Leeward Islands Companies Act 1885 itself
was enacted by the General Legislative Council of the Leeward Islands
Federation to regulate the formation and affairs of corporations in the
member colonies of the Leeward Island Federation. These member colonies
included the then tri-island colony of St Kitts, Nevis and Anguilla, the British
Virgin Islands, Montserrat, Dominica and Antigua and Barbuda.
The Leeward Islands Companies Act was passed in 1884 but came into force
on March 2, 1885 in St Kitts, Nevis and Anguilla as the St Kitts, Nevis and
Anguilla Companies Act 1885. The Leeward Islands Companies Act 1885 was
basically an adoption of the English 1862 Act and, as did the St Kitts, Nevis
and Anguilla Companies Act 1885, naturally reflected the provisions of the
English Act. Between 1885 and 1961 several amendments were made to the St
Kitts, Nevis and Anguilla Companies Act 1885 which applied to Anguilla as
part of St Christopher-Nevis-Anguilla. (For convenience, these amendments
are noted in the summary on St Christopher/Nevis.) In 1980, Anguilla became
a separate British Overseas Territory and in 1994 repealed and replaced the St
Kitts, Nevis and Anguilla Companies Act 1885 by the Anguilla Companies Act
1994.
Antigua and Barbuda
As a member of the Leeward Islands Federation, the Leeward Islands

Companies Act 1885 became operative in Antigua and Barbuda on March 2,
1885 as the Antigua and Barbuda Companies Act 1885. This Act was the first
major piece of legislation on companies in Antigua Barbuda. But for a number
of minor amendments between 1921 and 1982, the 1885 Act remained in force
for 110 years before it was repealed and replaced by the Antigua and Barbuda
Companies Act 1995.
Bahamas
The Bahamas Companies Act 1886 was the earliest legislation on companies to
be enacted in the Bahamas to provide for the incorporation and regulation of
trading companies and other associations in the Bahamas. This Act was
essentially a carbon copy of the English Companies Act of 1862. As such, it
applied solely to public companies. The mode of incorporation was by five or
more persons subscribing their names to the memorandum and articles of
association. No prohibitions were placed on subscribers apart from that they
had to be associating for a legal purpose. All other features common to the
English 1862 Act were present in the Bahamas Act.
The 1886 Act was amended a number of times – in 1868, 1926, 1936, 1944,
1948, 1955, 1956, 1961, 1962, 1964, 1965, 1967, 1969, 1975 and 1987. Of these
amendments, three are of note. First of all, in 1868, an Act was passed based
on the English Companies Act 1867 providing for unlimited liability of
directors if so permitted by the articles as well as declaring the application in
the Bahamas of the Statute of Imperial Parliament pertaining to winding up.
Secondly, in Act no 31 of 1956, provision was made for the alteration of the
company’s objects in the company’s memorandum by special resolution.
Finally, in the most extensive amendment, Act no 53 of 1965, changes were
made to the provisions permitting companies to be limited both by guarantee
and shares as well as pertaining to the reduction of capital by special
resolution.
The 1886 Act was finally repealed and replaced by the Bahamas Companies
Act 1992.
Barbados
The Barbados Companies Act 1910, enacted on November 22, 1910, was the
first piece of company legislation in the island. This statute, based on the
English 1908 Companies Act was described in its long title as ‘an Act to
provide for the incorporation, management and winding up of companies’ and
provided for both private and public companies.
According to section 4 of the 1910 Act any five or more persons could
incorporate for any lawful purpose by subscribing their names to a
memorandum and articles of association and registering the memorandum
and articles with the Registrar of Companies established under the 1910 Act.
After registration of these documents and compliance with any other
requirements under the Act, the Registrar issued a certificate of incorporation
to the company and that certificate was conclusive evidence of incorporation
of the company so registered.
The Act provided for unlimited companies and companies limited by
guarantee and companies limited by shares. The Act also provided three
methods for the winding up of a company. These are by the court, voluntary
winding up and through the supervision of the court.
The 1910 Act was amended a number of times between the years of 1910
and 1984 when it was repealed and replaced by the Companies Act 1982.
Belize
The Honduras Companies Ordinance, 1866 was the first company legislation
to be enacted in Belize (then British Honduras). It declared that the law in
England relating to companies was to be in force in the colony. This Act
remained the law until the British Honduras Companies Ordinance 1914,
which adopted the 1908 English Companies Act was passed on April 23, 1914.
Naturally, the provisions of this Ordinance reflected the same features of the
1908 UK Act. The Ordinance was amended in 1985, 1993 and 1995 and was
revised in 2000 and again in 2003 and is now cited as the Companies Act Cap.
250.
Dominica
The Dominica Companies Ordinance 1885, which came into force on March 2,
1885, was an adoption of the Leeward Islands Companies Act 1885. As has
already been pointed out, the Leeward Islands Companies Act 1885 was based
on the English 1862 Act and not surprisingly, the Dominica Companies
Ordinance, 1885 mirrored the English 1862 Act.
The Dominican 1885 Ordinance remained in force for more than one
hundred years and during this time was subject only to a few minor
amendments. The amendment in Act no 26 of 1974 was arguably the most
important amendment. That amendment repealed section 11 of the 1885
Ordinance and introduced provision for limiting the liability of members by
shares and by guarantee. The 1885 Ordinance continued in force until it was
repealed and replaced by the Dominica Companies Act 1995.
Grenada
The Grenada Companies Ordinance 1880, which was basically a copy of the
English 1862 Act, was the first piece of company legislation to be introduced
into Grenada. This Ordinance was replaced by the Grenada Companies
Ordinance 1927, which was itself a copy of the English 1908 Act. The 1927
Ordinance remained in force until it was repealed and replaced by the
Grenada Companies Act 1994.
Guyana
The Companies’ Clauses & Powers Consolidation Ordinance 1846, the first
company legislation enacted in Guyana (then British Guiana), was passed on
July 15, 1846 ‘to regulate the Constitution of Joint Stock Companies for
carrying on undertakings of a public nature & to authorise the taking of lands
for such purposes’. Under this Act a company only qualified as a company for
the purposes of the Act if it was so authorised by a ‘Special Ordinance’.
The next piece of company legislation in Guyana was the Companies’
Clauses & Powers Consolidation Ordinance 1877. This was ‘an Ordinance for
the consolidation in one Ordinance of certain provisions usually inserted in
Ordinances relating to the Constitution & Management of Companies
incorporated for carrying on undertakings of a public nature.’ It would appear,
therefore, that this Ordinance only applied to public companies.
Further, the definitions of company (a company constituted by the Special
Ordinance) and ‘Special Ordinance’ (any ordinance which may be passed
incorporating any company for the purpose of carrying on any undertaking
and with which this Ordinance may be incorporated) clearly necessitated that
an Ordinance had to be passed for a company to be incorporated.
The Companies Clauses (Completion of Titles) Ordinance was passed in
1898. This Ordinance was to be read with the Companies’ Clauses & Powers
Ordinance 1846, in respect of the completion of the title of land acquired by
undertakings of a public nature.
The Companies (Consolidation) Ordinance 1913 was passed into law in
Guyana on August 30, 1913. Based on the English 1908 Act it consolidated and
amended all the existing company legislation. In all other respects, it
resembled the English 1908 Act.
Apart from a few minor amendments, the Ordinance remained in force
until it was repealed and replaced by the Guyana Companies Act 1991.
Jamaica
The Companies Act 1864, enacted for the incorporation and regulation of
trading Companies and other associations in Jamaica, was the first piece of
company legislation to be introduced in Jamaica. The 1864 Act was based on
the English 1862 Act and, despite amendments in 1886, 1906, 1908, 1909 and
1923, it remained substantially unchanged until 1965. In that year, the
Companies (Amendment Act) 196526 made sweeping changes to the 1864 Act
to incorporate many of the innovations introduced by the English 1948 Act.
The 1864 Act as amended, was eventually repealed and replaced in 2004 by
the Companies Act 2004.
Montserrat
As a member colony of the Leeward Island Federation, the Leeward Islands

Companies Act 1885 was adopted by the Montserrat Legislative Council as the
Montserrat Companies Act 1885. This Act was the earliest legislation on
companies in Montserrat. There were several minor amendments to this Act,
which remained in force until it was repealed and replaced by the Montserrat
Companies Act 1998.
St Christopher/Nevis
As has already been seen, on March 2, 1885 the St Kitts, Nevis and Anguilla
Companies Act 1885 was passed into law. This Act was based on the UK 1862
Act and mirrored the provisions of its UK progenitor. It was the earliest
company legislation in these territories.
The Act was amended in 1884, 1921, 1925, 1932 and 1938. These
amendments were of a minor character and so the 1885 Act remained
substantially intact until it was repealed and replaced by the St
Christopher/Nevis Companies Act 1996.
St Lucia
The UK 1908 Act was incorporated into the St Lucia Commercial Code as
Title IV ‘Companies’. The Commercial Code was amended in 1975 by Act no
10 of 1975, the Commercial Code (Amendment) Act 1975, to incorporate some
of the English 1948 Act amendments into the Commercial Code. The
Commercial Code provisions were finally repealed and replaced in 1997 by
the St Lucia Companies Act 1997.
St Vincent and the Grenadines
The St Vincent and the Grenadines Companies Ordinance 1885 was the
earliest company legislation enacted in St Vincent and the Grenadines. This
Ordinance was based on the English 1862 Act and apart from amendments in
1943 and 1976 remained the law until it was repealed and replaced by the St
Vincent and the Grenadines Companies Act 1994.
Trinidad and Tobago
Trinidad and Tobago has had a long, active history in adopting company-law
developments in English legislation. This started in 1868 with the enactment of
the Trinidad and Tobago Companies Ordinance 1968. This Ordinance was
patterned on the English 1862 Act and was repealed and replaced on January
1, 1914 by the Trinidad and Tobago Companies Ordinance 1914. The 1914
Ordinance itself was an adoption of the English 1908 Act.
The 1914 Ordinance was repealed and replaced by the Companies
Ordinance 1950. After a number of amendments, the 1950 Ordinance was
finally repealed and replaced by the Trinidad and Tobago Companies Act
1995.
English Case Law Developments and Commonwealth
Caribbean Company Law
An overview
It would be wrong to believe that Commonwealth Caribbean company law

has developed exclusively as a result of English company legislation and that
company legislation represents a complete code on company law. On the
contrary, English courts and English case law imparted jurisprudential
coherence to the legislative initiatives, and in so doing developed, especially in
the latter half of the nineteenth century, a comprehensive body of company
law to fill substantial gaps in the legislation. Indeed, many of the most
fundamental principles in company law have emerged from court decisions
and constitute important landmarks in company jurisprudence. Based on the
general principles of the application of English judicial precedents in the
Commonwealth Caribbean, these case-law developments, as a matter of law,
formed part of company law in the Commonwealth Caribbean.27 By way of
example, a few of these case law developments may be quickly cited.
The rule in Foss v Harbottle (1843)28
One good example of English case-made company law which undoubtedly

was regarded as the law in the Commonwealth Caribbean is the rule in Foss v
Harbottle. This rule will be discussed in some detail later.29 Suffice to say here,
this rule arises where the directors or controllers of an incorporated company
are in breach of their fiduciary duties owed to the company. Given that the
wrongdoing is suffered by the company as a legal entity and not by the
shareholders of the company, the question then arises as to who is to bring an
action to remedy this wrong. The rule in Foss v Harbottle lays down that it is
the company which must take action to redress the wrong, and not individual
shareholders.
A number of Commonwealth Caribbean cases make it plain that the rule in
Foss v Harbottle is part of regional company jurisprudence.30 Thus, in the
Jamaican Supreme Court decision of Rowe v Sunshine Developers Ltd et al,31
Sinclair-Haynes J (Ag), in accepting this rule as applicable in Jamaica, said:
In an action to redress a wrong done to a company or to recover money or damages alleged to be due to
it, the company is the only proper plaintiff. (Halsbury’s Laws of England (4th edn.) vol. 7, para. 76). This is
the rule in Foss v Harbottle (1843) 2 Hare 461–67 ER 189. In that case, an action was brought by two
shareholders of a company nominally on behalf of themselves and all other shareholders against the
company and three directors. Sir James Wigram in the Court of Chancery established that it was not
appropriate for the plaintiffs to sue personally (although representative) as the conduct with which the
defendants were charged was not an injury to the plaintiffs but to the whole corporation.
The rule in Royal British Bank v Turquand (1855)32
The rule in Royal British Bank v Turquand affords another example where
English case law established fundamental principles in company law which
were generally accepted as the law in the Commonwealth Caribbean.33 This
rule answers the question whether a third party dealing with the company is
bound to ensure that all the internal regulations of the company have been
complied with as regards the exercise and delegation of authority. The
Turquand case lays down the rule that third party outsiders are entitled to
assume that internal maters have been complied with.
The rule in Ooregum Gold Mining Co v Roper (1892)34
The rule in Ooregum Gold Mining Co v Roper is yet another example of

English case law adding important jurisprudential weight to the development
of company law. This rule concerns the power of a company to issue shares,
and postulates that a company cannot issue shares at a discount. This rule was
developed to afford the public some protection against potential abuses of
limited liability. Even though there are no Commonwealth Caribbean cases in
which this rule has been applied, there is no doubt that it forms part of
Commonwealth Caribbean company jurisprudence.35
The rule in Ashbury Railway Carriage Co v Riche (1875)36
Finally, the famous/notorious rule in Ashbury Railway Carriage Co v Riche,

the ultra vires rule, was also judicially developed to afford the public some
protection against the potential abuses of limited liability. It laid down that
companies only had capacity to conduct business expressly or impliedly
authorised in the object clauses of their memoranda of association. Any
transaction entered into by a company which was not authorised in its objects
was ultra vires and void.
The rule in Ashbury Railway Carriage Co v Riche was applied in the
Barbadian Court of Appeal decision of Federal High School Ltd v Barclays
Bank (International) Ltd.37 In this case, the question was whether a debenture
granted by the plaintiff (Federal) to the defendant as security for the continued
use of banking facilities by a company concerned with agricultural
development and with which Federal had no common business interests or
relationships was within the corporate capacity of Federal and therefore valid.
The objects clause in the memorandum of association of Federal stated that
Federal was incorporated as an educational institution. Federal also had a
power in the objects clause to borrow and lend as the directors saw fit.
The Barbados Court of Appeal held the security given by Federal was void
as Federal had acted ultra vires its objects. Although Federal was empowered
in its objects to borrow and lend money as the directors saw fit, that power
had to be read in light of the objects of the company as well as the provision
granting such power to the directors ‘for the purposes of the company’.
New Companies Legislation in the Commonwealth
Caribbean
Caricom Draft Model Act and the Barbados Act
Historically, then, the major inspiration for company legislation in the

Commonwealth Caribbean has been English developments. In the last twenty-
five years or so, however, this has changed dramatically. The major impetus
for this change occurred in March 1971 when the Eighth Meeting of the
Council of Ministers of the Caribbean Free Trade Association launched a
project for the harmonisation of company law within Member Territories.
That Council of Ministers asked that the Secretary-General of Caricom take
steps to implement a research project in company law with a view to
achieving their harmonisation.38
A working party was appointed by the Secretary-General to carry out the
project. A Draft Model Act was prepared in 1978 by the Working Party and
this was approved by the Council of Ministers, supporting the proposal for the
adoption of a harmonised approach to the enactment of company legislation
within the region and that the model legislation should be the basis for that
legislation.39
Following this report and the Draft Model Act, most territories within the
region have passed new Companies Acts. This started with Barbados which, in
1982, enacted the Companies Act 1982. The Barbadian exercise benefited from
the Working Party Report and the Model Draft Act. It was also heavily
influenced by the Dickerson Report of 1971 from Canada,40 and the Draft
Canada Business Corporations Act (1971).41
The Barbados Act was updated in the early 1990s by the Caribbean Law
Institute and presented to the region as the Caribbean Law Institute Model
Act. Most territories in the Commonwealth Caribbean have recently enacted
legislation based on the Caribbean Law Institute Model Act, which is
remarkably similar in form and substance to the Barbados Act. These include
the Anguilla Companies Act 1994; the Dominica Companies Act 1994; the
Guyana Companies Act 1991; the Grenada Companies Act 1994; the
Montserrat Companies Act 1998; the St Lucia Companies Act 1996; the St
Vincent Companies Act 1994; and the Trinidad and Tobago Companies Act
1995.
Other new Acts in the Commonwealth Caribbean
As for the remainder of the territories in the Commonwealth Caribbean, the

Bahamas Companies Act 1992 has incorporated a substantial number of the
provisions of the Barbadian Act, but differs from the Barbadian Act in many
respects. The same is true of the Jamaica Companies Act 2004. The Revised
Edition 2003 of the Belize Companies Act Ch. 250 does not incorporate any of
the provisions of the Caricom Model Act and is nothing but a consolidation of
company legislation in Belize up to 2003. The St Christopher/Nevis Companies
Act 1996 is sui generis. It incorporates a few Caricom Model Act provisions
but in the end is substantially different from any other Act in the region.
Purposes of the new Companies Acts
Except in Jamaica and St Christopher/Nevis, the purpose clauses in the new

Companies Acts in the Commonwealth Caribbean state the purpose of the
Acts to be to revise and amend the law relating to companies. In Jamaica, the
purpose of the Act is declared to be the repeal and replacement of the existing
Companies Act, and in St Christopher/Nevis the replacement of the existing
Companies Act and the International Business Companies Act. Despite the
different wording of the purpose clauses in the Jamaica and St
Christopher/Nevis Acts, it is clear that all the Acts are intended to effect ‘law
revision’ or modernisation of the law rather than ‘law reform’ which connotes
a fundamental change in legislative policy. It is true that the new Acts have
introduced significant changes. Be that as it may, these changes have not
replaced the fundamental structure of the company as it was before the new
Acts.
Major changes introduced by new Companies Acts
The new Companies Acts in the Commonwealth Caribbean have introduced a

number of radical changes, which are fully explored in the various chapters of
this text. At this point, however, it may be useful to summarise the most
important of these changes. They are as follows:
Except in the Bahamas, Belize, Jamaica and St Christopher/Nevis, the

removal of the distinction between private and public companies.
Except in the Bahamas, Belize and St Christopher/Nevis, a new form
of constituent document, ‘articles of incorporation’, instead of the
memorandum and articles under the old legislation.
Except in Belize, abolition of the ultra vires and constructive notice
doctrines and the investing of the capacity of an individual in
companies.
Except in the Bahamas, Belize and St Christopher/Nevis, the
substitution of a system of no par value shares for the nominal or par
value arrangements.
Except in Belize, Jamaica and St Christopher/Nevis, a requirement that
shares are to be issued fully paid up in all cases.
Except in Belize and St Christopher/Nevis, detailed statutory rules in
the Acts for dealing with share capital including extensive provisions
for permitted capital reductions.
The establishment in the Acts, except in Belize, Jamaica and St
Christopher, of a clear quantitative objective test of solvency to
determine whether or not a dividend may be paid.
Except in Belize, codification of directors’ duties, powers and liabilities.
Except in Belize and St Christopher/Nevis, a suite of statutory
remedies which protect the interests of minority shareholders and
other complainants including in some Acts an appraisal remedy, a
statutory derivative action and a flexible oppression remedy.
Statutory controls on insider trading.
Detailed rules on accounting and audits.
Statutory controls of take over bids.
A statutory regime for effecting fundamental company changes
including comprehensive provisions on amalgamations.
Canadian cases in Commonwealth Caribbean company law
As already noted, the Canadian Business Corporations Act42 has inspired to a

large extent the provisions of the Companies Acts in Anguilla, Antigua,
Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia, St Vincent and
Trinidad and Tobago, and to a lesser extent in the Bahamas and Jamaica. Not
surprisingly, Commonwealth Caribbean courts in these territories have been
placing considerable reliance on Canadian case authority in interpreting the
provisions of these Acts.
A statement of Williams C.J. in the Barbados Court of Appeal case of
Canwest International Inc and anor v Atlantic Television Ltd and anor43 tells
the story. Williams CJ, in adopting dicta from a Canadian case, said: ‘It is
common knowledge that the Barbados Companies Act borrowed heavily
from Canadian precedents and I do not think it amiss to refer to the judgment
of McDonald J in the Alberta Court of Queen’s Bench in Edmonton Place Ltd v
315888 Atlanta Ltd 40 Business Law Reports 28 …’. Put simply, Commonwealth
Caribbean courts have not been and will not be bashful in having regard to
the reasoning in Canadian company law cases on Canadian provisions in pari
materia with Commonwealth Caribbean provisions.
The emerging importance of Canadian case-law developments in
Commonwealth Caribbean company law has not eclipsed the importance of
English company law precedents. One reason why this has not happened is
because many of the provisions in the Canadian legislation have their origins
in English legislation. English case law on such provisions remains of
persuasive authority in the Commonwealth Caribbean.
Another reason is that company law jurisprudence sometimes emerges
from general principles of law and equity. Where this occurs, English case law
will continue to be an important authoritative source. This is plainly evident in
the Grenadian Court of Appeal decision of Grenada General Insurance Co Ltd,
Jonas Browne & Hubbard (Grenada) Ltd et al v Grenada Insurance Services
Ltd.44 In this case, the Grenada Court of Appeal relied on the English House of
Lords’ decision in O’Neill v Phillips45 as authority that effect is to be given to
the general principle of legitimate expectation in company law.
Methodological problems and solutions
As has been seen, the objective of the Caricom company law project was to
achieve harmonisaton, not uniformity, of company laws within the
Community. It is important to stress this. For as Dr Peter Maynard points out
in his article, ‘Harmonisation of Companies Laws in the Caribbean’:46
Harmonisation, as opposed to uniformity, of laws aims at amending or adding to the existing laws of the
Member States so that the operation of those laws together beneficially affects the operation of the
common market. In contrast, uniformity of laws involves the adoption by all parties of the same legislative
form and substance.
Because the exercise in modernising company laws in the Commonwealth

Caribbean involves harmonisation, rather than uniformity, of laws, there is
tremendous variation in the form and substance of the most recently enacted
Companies Acts. This has presented an enormous challenge not only in
arranging the subject matter covered in this book, but also in addressing all
the minute differences in the provisions of one Act as opposed to another.
This book attempts to solve these problems in two ways. First, its chapters
are arranged along the lines of the statutory scheme followed in the
Companies Acts based on the Caricom Model Act and the CLI Model Act.
This has meant, for instance, that although there is no concept of ‘fundamental
company changes’ in the Jamaican Act, the provisions in that Act dealing with
alteration of articles are discussed in the chapter entitled ‘Fundamental
Company Changes’. This chapter itself is included in this book because of a
division in the Acts based on the Caricom Model Act and the CLI Act headed
‘Fundamental Company Changes’.
The second way in which the book attempts to deal with the multitude of
differences in the statutory provisions in the Companies Acts in the
Commonwealth Caribbean is to state explicitly in the text the territory whose
law is being discussed, and to use extensive footnotes. In some cases this might
be thought to have compromised the literary quality of the text. However,
given that there is not even a single text on Commonwealth Caribbean
company law, this appears to be a not unreasonable price to pay.
Conclusion
It is hoped that this overview of company law in the Commonwealth
Caribbean will assist in understanding the legislation and case law which will
be encountered in the remainder of this book. Readers are encouraged,
therefore, to study this chapter closely for the perspective which it gives to
company law in the Commonwealth Caribbean.
Notes
1 See generally Patchett, ‘Reception of Law in the West Indies’ (1973) JLJ 17; Antoine, Commonwealth
Caribbean Law and Legal System (London: 1999) 55–69.
2 See Patchett ibid.
3 See generally Burgess ‘Judicial Precedent in the West Indies’ (1978) 7 Anglo-American LR 113.
4 See the Report of the Working Party on the Harmonisation of Company Law in the Caribbean Community
(Undated) Chapter I para 1.11. (Hereinafter this Report is referred to as the Caricom Report.)
5 This expression is borrowed from Dickerson, Howard, Getz, Proposals for a New Business Corporations Law
for Canada Vol 1 para 5. (Hereinafter the Federal Proposals.)
6 For an in-depth analysis of the history of English company legislation, see Formoy, The Historical
Foundations of Modern Company Law (London: 1923); Gower, Gower’s Principles of Modern Company Law
(4th edn London: 1979) 39–57. And for a brief sketch of company legislation in the Commonwealth
Caribbean see Rattray, ‘Company Law Reform—The Challenge of the 1990s’ (unpublished: Faculty of Law
Library, University of the West Indies).
7 7 & 8 Vict. c. 110.
8 19 & 20 Vict. c. 47.
9 25 & 26 Vict. c. 89.
10 8 Edw. 7 c. 69.
11 11 & 12 Geo. 6 c. 38.
12 11 & 12 Vict. c. 45.
13 12 & 13 Vict. c. 108.
14 18 & 19 Vict. c. 133.
15 19 & 20 Vict. c. 47.
16 25 & 26 Vict. c. 118.

17 8 Edw. 7 c. 69.
18 30 & 31 Vict. c. 131.
19 63 & 64 Vict. c. 48.
20 7 Edw. 7 c. 50.
21 Discussed more fully in Chapter 3.
22 Discussed more fully in Chapter 3.
23 19 & 20 Geo. 5 c. 23.
24 10 & 11 Geo. 6 c. 47.
25 11 & 12 Geo. 6 c. 38.
26 Act no 7 of 1965.
27 See generally Burgess ‘Judicial Precedent in the West Indies’ (1978) 7 Anglo-American LR 113.
28 (1843) 2 Hare 461 Eng Ct of Chancery.
29 See Chapter 16.
30 See, e.g., Hadeed v Crawford et al (Unreported) Suit No CLH 047 of 1989 J’ca SC; Bahamasair Employees
Provident Fund v Galleria Cinemas Ltd (Unreported) Suit No CLE/Gen/402 of 2004; Rowe v Sunshine
Developers Ltd et al (Unreported) Suit No CLR 095 of 2002 J’ca SC.
31 (Unreported) Suit No CLR 095 of 2002 J’ca SC.
32 (1856) 6 E & B 327.
33 There is no case law actually deciding this point. It is generally accepted by company lawyers in the
region, however, that this rule is part of regional company jurisprudence. See, e.g., Caricom Report paras
4.24–4.29.
34 [1892] AC 125.
35 See Caricom Report para 5.09.
36 (1875) LR 7 Eng HL 653.
37 (1979) 37 WIR 53 B’dos CA.
38 Caricom Report paras 1.01–1.02.

40 In this book referred to as the Federal Proposals. As to this see above n 5.
41 This was contained in Vol 2 of the Federal Proposals.
42 RSC 1985 c. 44 as amended.
43 (1994) 48 WIR 40 B’dos CA.
44 (Unreported) Civ App No 12 of 1999 Gren CA.
45 [1999] 2 All ER 961 Eng HL.
46 (1982) JBL 421, 422.

Chapter 2
Classification of Companies
Introduction
Successive Companies Acts in the Commonwealth Caribbean have allowed
for the incorporation and registration of a variety of forms of companies.
Without doubt, the corporate form which has always occupied the
commanding socio-economic space in Caribbean society is that used for
profit-making activities, namely, the company with a share capital. Put bluntly,
the company with a share capital is by far the most common corporate form
of incorporation in the Commonwealth Caribbean.
Given the foregoing, the company with a share capital is the major focus of
this book. This notwithstanding, it is thought desirable to provide some
introduction to the more important of the other corporate forms available
under the Acts. The objective of this chapter is to afford such an introduction.
Meaning of ‘Company’
Before embarking upon an exploration of the different types of companies
which may be incorporated or registered under regional Companies Acts, it is
thought useful to begin by exploring the exact legal meaning of the word
‘company’ under Commonwealth Caribbean company law. This is especially
so because in the English case of Re Stanley, Buckley J opined that ‘the word
company has no strictly legal meaning’.1 Does this represent the legal position
in Commonwealth Caribbean jurisdictions?
All the Companies Acts in the Commonwealth Caribbean contain a
definition of the expression ‘company’. The Acts in Anguilla, Antigua,
Barbados, Dominica, Grenada, Guyana, Montserrat, St Christopher/Nevis, St
Lucia, St Vincent and Trinidad and Tobago provide to the effect that
‘company’ means a body corporate that is incorporated or continued under the
Act in question.2 These Acts further clarify the meaning of the word
‘company’ by defining the expression ‘body corporate’. ‘Body corporate’ is
defined under these Acts as including a company incorporated or continued
under those Acts ‘or other body corporate, wherever or however incorporated,
other than a corporation sole’.3 The expression ‘body corporate’ therefore
encompasses much wider types of bodies corporate than does the expression
‘company’.
The definition of ‘company’ found in these Acts was considered in the
Alberta Court of Queen’s Bench in the case of Toyota Canada Inc v Imperial
Richmond Holdings Ltd.4 This case underlined the principle that the meaning
which is to be given to ‘company’ is that ascribed to it in the respective
Companies Acts. On the plain words of these Acts, a ‘company’ is restricted to
a body corporate incorporated or continued under the Act in question. A body
corporate incorporated under any Act other than the regional Act in question
cannot therefore be a company. Such a body is, for the purposes of these
regional Acts, a body corporate.
The position in Jamaica is somewhat less clear. The Act in Jamaica defines a
company as ‘a company formed and registered under the Act’ in Jamaica.5
This definition of a ‘company’ suggests that the only entity which can be
classified as a company is an entity incorporated or formed and registered as a
company under the Jamaican Act. The problem is that in the Jamaican Act, a
‘company’ incorporated outside of Jamaica but which establishes a place of
business in that island is constantly referred in that Act as a company
incorporated outside Jamaica.6
The Acts in the Bahamas and Belize, like the Act in Jamaica, define a
company as ‘a company incorporated under the Act’ in the Bahamas or
Belize,7 as the case may be. The Acts in the Bahamas and Belize, however,
avoid the definitional problem in the Act in Jamaica by providing, in the
Bahamas, that ‘any incorporated or unincorporated body formed under the
laws of a country other than The Bahamas’ is a ‘foreign company’8 and, in
Belize, that ‘companies incorporated outside of Belize’ are ‘overseas
companies’.9 The consequence of this provision is that there is no doubt that
the expression ‘company’ only refers to a company incorporated under the
Acts in the Bahamas or Belize as the case may be.
Private and Public Companies
Based as it was on English company legislation,10 early Commonwealth

Caribbean company legislation was predicated on the assumption that there
was just one basic type of company limited by shares, the widely held
company or public company, and so that legislation was designed to regulate
only this kind of company. It was the English Companies Act 1907,11
subsequently consolidated in the English Companies (Consolidation) Act
190812 adopted in some Commonwealth Caribbean jurisdictions,13 which
introduced a distinction between private and public companies into
Commonwealth Caribbean company law.14
The introduction of this distinction between private and public companies
represents an early recognition that the company limited by shares was
equally appropriate whether the company was large and widely held, or a
closely held, private concern carrying on business in corporate form. This
distinction was, however, only perceived in a very limited way, namely, as
relating to compliance with certain regulatory requirements which were
mandated by existing legislation to safeguard the public investing in
companies. Thus, the UK Companies Act 1907 exempted a ‘private company’
from the requirement regarding the statement in lieu of prospectus as well as
the obligation to file accounts. The Act defined a private company as a
company which (a) limited the membership to fifty, (b) restricted the right to
transfer shares and (c) prohibited any invitation to the public. Any company
not falling within this description was defined as a ‘public company’ and
required to comply with these regulations.
The traditional distinction between private and public companies has been
continued in the Acts in the Bahamas, Jamaica and St Christopher/Nevis.15 The
Acts in the Bahamas and St Christopher/Nevis have not added much to the
provisions on private and public companies in the English Companies Act
1907. On the other hand, the Jamaican Act contains substantial provisions on
private and public companies, in a section headed ‘Private Companies’, which
demand careful examination.
A private company is defined in section 25 of the Jamaican Act as a
company which by its articles (i) restricts the right to transfer its shares; (ii)
limits the number of its members to twenty, not including persons who are in
the employment of the company and persons who, having been formerly in
the employment of the company were while in that employment, and have
continued after the determination in that employment to be, members of the
company; (iii) prohibits invitation to the public to subscribe for any shares or
debentures of the company; (iv) prohibits any invitation to the public to
deposit money for fixed periods or payable on call whether bearing or not
bearing interest; and (v) prohibits any person other than the holder from
having any interest in any of the company’s shares.
It is to be noted parenthetically, that unlike with private companies, there is
no specific section in the Jamaican Act on public companies. The Act merely
provides that a public company, for the purposes of the Act, is a company that
is not a private company.16 A public company is therefore the residual
category of company under the Act and consequently all the compliance
requirements under the Act apply to public companies.
It is clear that the elements contained in the definition of a private company
in the Jamaican Act seek to make a private company a legal identity that is
more compatible with the economic reality of a small business concern
operating in corporate form. Thus, for instance, the requirement that the
articles of the company limits the number of its members to twenty, though
admittedly arbitrary, seems to have as its objective the ensuring of the unity of
ownership and management which is the hallmark of small closely held
business concerns. It should be noted, however, that the exclusion of
shareholders who are present or past employees of the company in
ascertaining the number of members mitigates this objective. The first and
third requirements in the definition (the restriction on the transfer of shares
and the prohibition of public invitation to subscribe for any shares or
debentures of the company) are traditional, and their objective self-evident.
The fourth element in the definition seeks to restrict the kind of business that
may be carried on by a private company and the fifth to safeguard against
evasion of the limitations on numbers by the splitting of ownership in shares
between a legal owner and a beneficial owner.
The Act contains two provisions aimed at preventing the use of private
companies by public companies to evade regulatory requirements. The first
relates to the obligation to file accounts. Here, the Act provides that a private
company is not obliged to file accounts.17 However, if any of the shares in the
company are held by a body corporate, the company must file accounts.18
Because of this provision, large public companies wishing to be eligible for the
regulatory exemptions available to a private company cannot operate through
subsidiary private companies thereby undermining the protection which was
included in the Act for the investor in a public company.
The second provision with the objective of preventing the use of private
companies to evade regulatory requirements relates to the filing of a
prospectus or statement in lieu of a prospectus. Here, the Act provides that if a
company, being a private company, alters its articles in such a manner that
they no longer include the provisions which are required to be included in
order to constitute it a private company, the company shall, as on the date of
the alteration, cease to be a private company.19 The company is then required
to, within a period of fourteen days after that date, deliver to the Registrar for
registration a prospectus or statement in lieu of prospectus.20 Failure to comply
with these requirements renders the company and every officer in the
company who is in default liable to a fine not exceeding $50,000, or to
imprisonment.21
Public Companies and Companies which are Not
Public Companies
The Companies Acts in Anguilla, Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago have
eschewed the traditional distinction between private and public companies.
These Acts differentiate between companies whose issued shares or
debentures are or were part of a distribution to the public, or are intended for
distribution to the public, defined as public companies, and companies where
no such public distribution is involved.22 Specific statutory requirements are
then imposed on public companies where it is thought appropriate to do so.
The most important of these requirements include the trust deeds provisions
which are applicable only where debt obligations are issued as part of a
distribution to the public;23 the number of directors stipulation that a company
must have at least one director, but a public company must have no fewer
than three directors, at least two of whom are not employees of the company
or any of its affiliates;24 the exemption of companies having fewer than fifteen
shareholders from the mandatory proxy solicitation provisions;25 the filing of
financial statements, which is required only in respect of a company that is a
public company or whose gross revenues exceed a statutorily prescribed
amount or whose assets exceed a statutorily prescribed amount;26 the
requirement to appoint an auditor, which is applicable only to a public
company or a company whose gross revenues exceed a statutorily specified
amount or its assets exceed a statutorily prescribed amount and the provision
that the shareholders of other companies may resolve unanimously not to
appoint an auditor;27 and the prospectus requirements that only persons
inviting applications from the public for shares or debentures are required to
register a prospectus with the Registrar.28
Despite the fact that these Acts do not maintain the traditional distinction
between private and public companies, the Acts contain provisions geared
towards the peculiar needs of the small closely held company. In this regard, a
closely held company may, in its basic incorporation document, its articles of
incorporation, impose limits on the number of shareholders, prohibit the issue
of shares to the public, restrict the transfer of shares and restrict the business
which the company can conduct29 and thus enjoy all the traditional features of
a private company. In addition, under all the Acts, a company may be
incorporated by one person alone.30
There are also a number of provisions in the Acts which are geared to
responding to the more practical management and control needs of a small
closely held company. These include provisions for compliance with the
shareholders’ meetings requirements by a resolution in writing signed by all
the shareholders entitled to vote at a meeting on that resolution.31 They also
include provisions which permit a company to provide in its articles that no
shares of a class of shares may be issued unless the shares have first been
offered to the shareholders of the company holding shares of that class.32
These provisions are clearly aimed at preserving shareholders’ proportionate
interest in the management and control of their company. They further include
provisions conferring appraisal rights to safeguard the rights of shareholders
who dissent from a fundamental change in the company.33 Perhaps, most
importantly, they include provisions for unanimous shareholder agreements
restricting the powers of the directors to manage the business of the company
and allowing direct shareholder management and control of the company.34
Non-profit companies
Despite the fact that company law and companies legislation have been
developed primarily with the commercial company in mind, the Acts in
Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago expressly provide for what is called
a ‘non-profit company’. A ‘non-profit company’ is defined in all these Acts,
except the Acts in Anguilla and the Bahamas, as a company without a share
capital.35 In the Acts in Anguilla and the Bahamas, a non-profit company is
defined as a company which satisfies the criteria in those Acts for a company
to be registered as a non-profit company.36
The enactment of these express provisions on non-profit companies appears
to be based on the assumption that the corporate form should be equally
available to non-profit organisations as to commercial ventures. Accordingly,
the Acts in Antigua, Barbados, Dominica, Grenada, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago carve out a special regime for nonprofit
companies by not only spelling out for the avoidance of uncertainty the
provisions of the Acts which apply to non-profit companies,37 but also
legislating special provisions which apply specifically to these companies. The
provisions in the Acts in Anguilla and the Bahamas merely enact special
provisions which apply specifically to non-profit companies.
Incorporation
One set of special provisions on non-profit companies in all the non-profit

companies Acts, except that in the Bahamas, relate to the incorporation of
these companies.38 Here, it is stipulated that no articles may be accepted for
filing in respect of a non-profit company without the prior approval of a
specified public authority.39 But, to qualify for approval a non-profit company
must restrict its undertaking to one that is of a patriotic, religious,
philanthropic, charitable, educational, scientific, literary, historical, artistic,
social, professional, fraternal, sporting or athletic nature or to the promotion of
some other useful object.40
The articles of a non-profit company in all the non-profit Companies Acts
must be in the prescribed form.41 In addition to this, the articles must state (i)
the restrictions on the undertaking that the company is to carry on,42 (ii) that
the company has no share capital and is to be carried on without pecuniary
gain to its members, and that any profits or other accretions to the company
are to be used in furthering its undertaking,43 (iii) if the undertaking of the
company is of a social nature, the address in full of the clubhouse or similar
building that the company is maintaining,44 and (iv) that each first director
becomes a member of the company upon its incorporation.45
Under all the non-profit Companies Acts, except those in Anguilla, the
Bahamas and Trinidad and Tobago, the word ‘incorporated’ or ‘corporation’,
or the abbreviation ‘inc’ or ‘corp’, must be the last word in the name of a non-
profit company.46 Nonetheless, a non-profit company may use and be legally
designated by either the full or the abbreviated form of these words.47 This
rule does not apply to a former-Act company without share capital continued
under the Acts.48 Nonetheless, where any such company changes its name, the
rule must be observed.49
Directors
Except under the Anguilla Act, a non-profit company must have at least three
directors.50 In this regard, the articles or the bye-laws of a non-profit company
may provide for individuals to become directors by virtue of holding some
office outside the company.51
Membership
Except in the Anguillan Act, all the non-profit Companies Acts contain
extensive provisions on membership in a non-profit company. Under these
Acts, unless its articles or bye-laws so provide, there is no limit on the number
of members of a non-profit company.52 Nevertheless, the articles or bye-laws
may provide for more than one class of membership.53 Where this is done, the
articles or bye-laws must set forth the designation of and the terms and
conditions attached to each class of members.54
Persons may be admitted to membership in a non-profit company by
resolution of the directors, provided the articles or bye-laws do not stipulate to
the contrary.55 In any event, the articles or bye-laws may provide that the
resolution is not effective until confirmed by the members in general
meeting.56 The articles or bye-laws may also provide that members can be
admitted by virtue of holding some office outside the company.57
The normal rule is that each member of each class of members of a non-
profit company has one vote.58 This rule is displaced where the articles provide
that each member of a specified class has more than one vote or has no vote.59
As a general rule, the interest of a member in a non-profit company is not
transferable, and lapses and ceases to exist upon his death or when he ceases
to be a member.60 However, the articles may provide otherwise.61 In any
event, where the articles provide that the interest of a member is transferable,
the bye-laws cannot restrict the transfer of that interest.62
Bye-laws
Except under the Act in the Bahamas, the directors of a non-profit company
may make bye-laws, not being contrary to the Acts or the articles of the
company, on a number of statutorily specified matters.63 These include the
following:
(i) the admission of persons and unincorporated associations as members

and as ex officio members, and the disqualifications of and the
conditions of membership;64
(ii) the fees and dues of members;65
(iii) the issue of membership cards and certificates;66
(iv) the suspension and termination of membership by the company and
by a member;67
(v) where the articles provide that the interest of a member is
transferable, the method of transferring the membership;68
(vi) the qualification of, and the remuneration of, the directors and the ex
officio directors, if any;69
(vii) the time and manner of election of directors;70
(viii) the appointment, remuneration, functions, duties and removal of
agents, officers and employees of the company, and the security, if any,
to be given by them to the company;71
(ix) the time and place, and the notice to be given, for the holding of
meetings of the members and of the board of directors, the quorum at
meetings of members, the requirements as to proxies, and the
procedure in all things at meetings of the members and at meetings of
the board of directors;72 and
(x) the conduct of all other particulars of the affairs of the company.73
The directors may also make bye-laws respecting the following matters:74
(a) the division of its members into groups, either territorially or on the
basis of common interest;75
(b) the election of some or all of the directors (i) by the groups on the
basis of the number of members in each group, (ii) for the groups in a
defined geographical area, by the delegates of the groups meeting
together, or (iii) by the groups on the basis of common interest;76
(c) the election of delegates and alternate delegates to represent each
group on the basis of the number of members in each group;77
(d) the number and qualifications of delegates and the method of their
election;78
(e) the holding of meetings of members or delegates;79
(f) the powers and authority of delegates at meetings;80 and
(g) the holding of meetings of members or delegates territorially or on
the basis of common interest.81
A bye-law passed under paragraph (f) may provide that a meeting of

delegates for all purposes is a meeting of the members with all the powers of
such a meeting.82 In the meantime, a byelaw respecting any of the matters (a)
to (g) is not effective until it is confirmed by at least two-thirds of the votes
cast at a general meeting of the members duly called for that purpose.83
Additionally, such a bye-law may not prohibit members from attending
meetings of delegates and participating in the discussions at the meeting.84 A
delegate has only one vote and may not vote by proxy.85
Dissolution and distribution of property
The distribution of the remaining property of a non-profit company upon its

dissolution depends upon the provisions of the articles of incorporation of that
company.86 In this respect, the articles may provide for distribution of such
property among the members or among the members of a class or classes of
members or to one designated organisation or more, or to any combination
thereof.87
Where the articles do not provide for the distribution of the remaining
property, the company must, by special resolution, after payment of all debts
and liabilities, distribute or dispose of that property to any organisation in the
territory in question the undertaking of which is charitable or beneficial to the
community.88 It is to be noted that, where the articles do not provide for the
distribution of the remaining property, the articles may not be amended to so
provide.89
These rules on the dissolution and distribution of the remaining property of
non-profit companies apply under all the non-profit companies Acts except
the Anguillan Act.
Companies Limited by Guarantee
Meaning of company limited by guarantee
The Companies Acts in Anguilla, the Bahamas, Belize, Jamaica and St

Christopher/Nevis and Trinidad and Tobago all make provision for the
incorporation of a company ‘limited by guarantee’ as opposed to a company
‘limited by shares’. Broadly speaking, a company limited by guarantee is a
company in which the liability of its members is limited by its constating
documents to such amount as its members undertake to contribute to the
assets of the company in the event of its being wound up.90 Such a company
does not ordinarily have a share capital, but may have a share capital.91
Usually, therefore, companies limited by guarantee have members rather than
shareholders.
Uses of company limited by guarantee
The major use of companies limited by guarantee is for carrying on non-profit

activities such as community and sporting ventures and for educational and
other charitable purposes. As has just been seen, the Companies Acts in
Anguilla, Antigua, Barbados, Dominica, Grenada, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago expressly provide a corporate form to
accommodate these activities and purposes, namely, the non-profit company.
In Belize, Jamaica and St Christopher/Nevis no such corporate form is
provided for and companies incorporated for non-profit activities are usually
incorporated under the provisions on companies limited by guarantees in the
Acts in these territories. It should be noted, however, that a company limited
by guarantee may be used for activities and purposes other than non-profit
activities and purposes. This explains why, notwithstanding the provisions in
the Anguilla, the Bahamas and Trinidad and Tobago Acts for non-profit
companies, those Acts still provide for the incorporation of companies limited
by guarantee.92
Incorporation of companies limited by guarantee
Under the provisions of the Acts permitting the incorporation of companies

limited by guarantee, the constating documents of a company limited by
guarantee must, in addition to the matters which must be stated in the
constating documents of companies generally, contain certain specified
statements. In the Bahamas, Jamaica St Christopher/Nevis and Trinidad and
Tobago, these documents must contain a statement as to the number of
members with which the company proposes to be registered93 and, except in
Trinidad and Tobago, if the company has a share capital, the amount of the
share capital with which the company proposes to be registered.94 In the
Bahamas, Belize and St Christopher/Nevis, the constating documents must
also state the name of company with the word ‘Limited’ (in the Bahamas and
Belize) or ‘Ltd’ (in the Bahamas alone) as the last word in such name;95 the
local address at which the registered office of the company is to be situated;96
and, in the Bahamas, Belize and Trinidad and Tobago that each member
undertakes to contribute to the assets of the company in the event of it being
wound up while he is a member, or within one year afterwards, for payment
of the debts and liabilities of the company contracted before the time at which
he ceases to be a member, and of the costs, charges, and expenses of winding
up, and for adjustment of the rights of the contributories among themselves,
such amount as maybe required, not exceeding a specified amount.97
Companies Incorporated Outside the Territory
Concerned
Overview of the provisions in the Acts
Under the Acts in Antigua, Barbados, Grenada, Guyana, Montserrat, St

Christopher/Nevis, St Lucia and St Vincent and Trinidad and Tobago, any
incorporated or unincorporated body formed under the law of a country other
than the territory in question which is carrying on an undertaking or business
in the territory concerned is referred to as an external company.98 In the
Anguillan and Bahamian Acts, a company incorporated under the laws of a
country other than the island concerned is called a foreign company. In the Act
in Belize, such a company is called an overseas company and in the Act in
Jamaica, it is simply referred to as a ‘company incorporated outside the island’.
External Companies
Carrying on of undertaking by external company
The provisions on external companies in the Acts in Antigua, the Bahamas

(foreign company), Barbados, Grenada, Guyana, Montserrat, St Lucia and St
Vincent and Trinidad and Tobago only apply where the external company is
carrying on an undertaking in the territory concerned. These Acts list a
number of circumstances in which an external company will be treated as
carrying on an undertaking in the territory concerned.99
The statutory lists include where the company (i) establishes a place of
business in the territory concerned;100 (ii) except in the Bahamas and Barbados,
establishes or uses a share transfer or share registration office in the territory
concerned;101 (iii) except in the Bahamas, Barbados and Trinidad and Tobago,
owns, possesses or uses assets situated in the territory concerned for the
purpose of carrying on or pursuing its business, if it seeks to obtain from those
assets, directly or indirectly, profit or gain whether realised in the territory
concerned or not;102 (iv) in Barbados, holds title to any land in Barbados or has
an interest in any such land;103 (v) in the Bahamas and Barbados, maintains an
office, warehouse or place of business in the territory concerned;104 (vi) in the
Bahamas and Barbados, is licensed or registered or required to be licensed or
registered under any law of the territory concerned that entitles it to do
business or to sell shares or debentures of its own issue;105 (vii) in Barbados, is
the holder of a certificate of registration under the Road Traffic Act, Cap 295
respecting a public service vehicle;106 or (viii) in the Bahamas and Barbados, in
any other manner carries on any undertaking or business in the territory
concerned.107 In addition, in the Bahamas, Barbados and Guyana, where an
external company is listed with a telephone number in the territory concerned
under the name of the external company in a directory published for use in
the territory concerned, the external company is presumed, in the absence of
evidence to the contrary, to be carrying on an undertaking in that territory.108
For an external company to begin or carry on an undertaking in Antigua, the

Bahamas (foreign company), Barbados, Grenada, Guyana, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago, it must be registered under the Act
in the territory concerned.109 Under the Bahamas Act, this obligation does not
apply to a foreign company carrying on an undertaking in the Bahamas prior
to the commencement of the Act in that country.110
Except in the Bahamas, every external company that was carrying on an
undertaking in these territories before the commencement of the relevant Act
must apply within a statutorily prescribed period for registration under the
relevant Act.111 If the name of the external company appears on the register
maintained by the Registrar, that company is presumed to be registered.112 If,
on the other hand, the name of the company does not appear on the register, it
is presumed not to be registered.113 In any event, an external company that
was carrying on an undertaking before the commencement of the relevant Act
is not required to register until the expiration of a statutorily specified period
after the commencement of that Act.114
Requirements for registration
In order to register, an external company must file with the Registrar a

statement in the prescribed form setting out the following:115
(i) the name of the company;116

(ii) the jurisdiction within which the company was incorporated;117
(iii) the date of its incorporation;118
(iv) the manner in which it was incorporated;119
(v) the particulars of its corporate instruments;120
(vi) the period, if any, fixed by its corporate instruments for the duration
of the company;121
(vii) the extent, if any, to which the liability of the shareholders or
members of the company is limited;122
(viii) the undertaking that the company will carry on;123
(ix) the date on which the company intends to commence any of its
undertakings;124
(x) the authorised, subscribed and paid-up or stated capital of the
company and the shares that the company is authorised to issue and
their nominal or par value, if any;125
(xi) the full address of the registered overseas head office;126
(xii) the full local address of the principal office of the company;127 and
(xiii) the full names, addresses and occupations of the directors of the
company.128
The statement must be accompanied by a statutory declaration by two

directors of the company that verifies on behalf of the company the particulars
set out in the statement;129 a copy of the corporate instruments of the
company;130 a statutory declaration by an attorney-at-law that the relevant
requirements of the Acts have been complied with;131 the prescribed fees;132
and, except in the Bahamas, a power of attorney.133 Where any document
required to be filed is not in the English language, a notarily certified
translation of that document must be provided unless the Registrar otherwise
directs.134
Upon the payment of the prescribed fee, an external company is entitled to
be registered for any lawful undertaking.135 However, an application by an
external company may be referred by the Registrar to the Minister, who is
statutorily empowered to order the Registrar to refuse registration.136
Restrictions on activities
The Registrar may restrict the powers or activities that an external company
can exercise or carry on in the prescribed circumstances.137 When the powers
or activities are so restricted, the company is forbidden exercising those
powers or carrying on those activities.138
Where the powers or activities of an external company are to be restricted
the Registrar must notify the company of what he intends to do.139 The
company has a right of appeal to the Minister within a statutorily prescribed
number of days from the date of such notification.140 Upon such appeal, the
Minister may confirm, vary or overrule the decision of the Registrar.141
Obligation to name attorney
An external company must file with the Registrar a fully executed power of
attorney in the prescribed form that will empower some local resident person
named in the power to act as the attorney of the company for the purpose of
receiving service of process in all local suits and proceedings by or against the
company and of receiving all lawful notices.142 The power of attorney must
declare that service of process in respect of suits and proceedings by or against
the company and of all lawful notices on the attorney will be binding on the
company for all purposes.143
The company may, by another power of attorney executed and deposited as
just described, appoint another local resident attorney for the purposes just
described, and replace the attorney previously appointed.144 In any event, if an
attorney named in a power of attorney executed by an external company
ceases to be resident locally or if the power becomes invalid or ineffectual for
any reason, the company must file another power of attorney.145
Service of process and notices on an attorney for an external company
appointed under a registered power of attorney is legal and binding service on
the company.146 Similarly, when such an attorney signs a deed on behalf of the
company, the deed is binding on the company locally if the company has
empowered the attorney to execute deeds and he executes it with his own
seal.147 A deed so executed has the same effect as if it were under the seal of
the company.148
An external company that has been continued from the amalgamation of
two or more companies must comply with these requirements as though it
were a new registration.149 This is so whether or not one or more of the
external companies that were continued by the amalgamated company had
been registered at the date of the amalgamation.150
After receiving the statements and other documents required for registration
in respect of an external company together with the registration fees, the
Registrar must issue a certificate showing that the company has been
registered as an external company.151 The Registrar must also publish in the
Gazette a notice of the registration of the company as an external company.152
These obligations on the Registrar are subject to his discretionary powers
under the Acts.153
A certificate of registration issued to an external company is conclusive
proof of the registration of the company on the date shown in the certificate
and of any other facts which the certificate purports to certify.154
When once a company is registered as an external company, it may carry on

its undertaking locally in accordance with its certificate of registration.155 It
may also exercise its corporate powers within the relevant territory.156
Suspension of registration
The Minister may suspend or revoke the registration of any external company
for failing to comply with the relevant provisions of the Acts or for any other
prescribed cause.157 The Minister may also remove a suspension or cancel a
revocation.158 The exercise of any of these powers by the Minister is subject to
such regulations as the Minister may make in that behalf.159
Where the registration of an external company is suspended or revoked by
the Minister, the Registrar must publish forthwith in the Gazette a notice of
such suspension or revocation.160 However, the rights of creditors of that
company are not affected by that suspension or revocation.161
Cancellation of registration
When an external company ceases to carry on its undertaking locally, the

company must file a notice to that effect with the Registrar. The Registrar
must thereupon cancel the registration of the company under the relevant
Act.162 The Registrar may also cancel the registration of an external company
if the company ceases to exist and he is made aware of that circumstance by
evidence satisfactory to him.163 Finally, in Barbados and in Guyana, if the
Minister is of the opinion that the public convenience will be served thereby,
he may, by publishing in the Gazette a notice to that effect, cancel the
registration of an external company.164
Revival of registration
Except where the registration of an external company has been cancelled by

the Minister, the Registrar may revive the registration of such a company.165
For the registration to be so revived, the company must file with the Registrar
such documents as he may require and must pay the prescribed fee.166 The
registration of such a company is revived when the Registrar issues a new
certificate of registration to the company.167 In Barbados and Guyana, where
the Registrar issues a new certificate, he may also require the external
company to which the certificate is issued to publish in the Gazette at its own
expense a notice of revival of its registration.168
Registration or revival of registration of an external company retroactively
authorises all previous acts of the company as though the company had been
registered at the time of those acts.169 This rule does not apply in respect of
prosecution for any offence relating to the provisions in the Acts on external
companies.170
Name display
Under the Acts in the Bahamas, Barbados, Guyana and Trinidad and Tobago,
an external company carrying on an undertaking locally is under an obligation
to display its name.171 In discharging this obligation, the company must paint
or affix its name and place of business, in a conspicuous place in easily legible
letters, and maintain that information so painted or affixed, on the outside of
its local head office and every other local office in which it carries on its
undertaking locally.172
An external company carrying on business locally is also under an
obligation to have its name mentioned in legible characters in the transactions
of its undertaking locally.173 This requirement applies in particular to (a) all
notices, advertisements and other official publications of the company, (b) all
bills of exchange, promissory notes, endorsements, cheques and orders for
money or goods purporting to be signed by or on behalf of the company, and
(c) all bills of parcels, invoices, receipts and letters of credit of the company.174
Fundamental changes
Except under the Act in the Bahamas, an external company may change its
name, alter its corporate instruments to reflects a fundamental change, alter
the objects of the company or restrict its business or make changes among its
directors.175 Where the company does any of these things, it must, within
thirty days after the change has been made, file with the Registrar duly
certified copies of the instruments by which the change has been made or
ordered to be made.176 If the company fails to file these instruments within
sixty days after a change is made or ordered, the registration of the company
ceases to be valid.177
Upon receipt of the duly certified copies of these instruments and the
prescribed fee, the Registrar must enter the change of name in the register.178
The Registrar may only enter a record of such other changes in the register as
the Minister approves as being in his consideration to be in the public
interest.179 Upon registration of a change in respect of an external company,
the Registrar must issue to the company a certificate of the change under his
hand in a form adapted to the circumstances.180 If the change involves a
change of name, under the Barbados and Guyana Acts, the Registrar must also
publish notice of the change of name in the Gazette.181
A certificate of change and a notice of change of name in the Gazette are
admissible in evidence as conclusive proof of the change set out in the
certificate of change and notice of change.182
Returns
Except under the Acts in the Bahamas and Guyana, an external company is
under a duty to send to the Registrar an annual return not later than April 1 in
each year after the date of its registration.183 The return must be in the
prescribed form and must contain the prescribed information made up to the
preceding December 31.184 The return must also be accompanied by the
prescribed fees.185 A director or officer of an external company may certify the
contents of the return.186 If a company neglects or refuses to file a return as
required, the Registrar may strike it off the register.187
Under the Act in the Bahamas, foreign companies are only required to
make returns where the Registrar makes a written demand for information
concerning any such company.188 Where the Registrar makes such a demand,
the company concerned must furnish the information demanded within
twenty-one days of the demand signed by at least one director.189 Failure to
comply with the Registrar’s demand entitles the Registrar to cancel the
registration if he is satisfied that there was wilful default in complying with
the demand.190
Section 329 of the Act in Guyana contains extensive provisions requiring
external companies to make out a balance sheet and loss account in every
calendar year. These provisions also stipulate the particulars that must be
contained in the annual accounts.191 This provision also confers a power on the
Minister to exempt by order any external company from the obligation to
submit annual accounts on such terms and conditions as he thinks fit.192
Incapacity of external company
An external company that is not registered under the relevant Act cannot
maintain any action, suit or other proceeding in any local court in respect of
any contract made in whole or in part locally in the course of or in connection
with any undertaking by the company.193 In the Grenada High Court decision
in Inbro Citygate Insurance Brokers Ltd v Worldwide Insurance Ltd194 it was
held that, for non-registration by an external company to operate as a bar
under this provision, the defendant must adduce evidence that the contract in
question was made in whole or part within the relevant territory and that the
contract was made in the course of, or in connection with the carrying on in
the relevant territory of the business of the external company.
If an unregistered external company becomes registered or has its
registration restored, as the case may be, the company may then maintain an
action, suit or other proceeding in respect of a local contract as though the
company had never been disabled.195 This is so whether or not the contract
was made or the proceeding instituted by the company before the date the
company was registered or had its registration restored.196 It is to be noted
that in the case of a company whose registration has been restored, the right
of the company to maintain an action, suit or other proceeding is subject to the
terms of any conditions imposed upon the company or to the terms of any
order of the court in respect of the restoration of the company’s registration.197
The assignment of a debt or any chose in action by an unregistered external
company is subject to special rules. Where such an assignment is made to an
individual or to a body corporate having the capacity to maintain any action
suit or other proceeding in a local court, that individual or body corporate, or
any person claiming under the individual or body corporate may not maintain
any action, suit or other proceeding that is based on the subject of the
assignment unless the external company is registered at the time the action,
suit or other proceeding is being proceeded with.198 This rule does not apply,
however, in respect of an external company that is a judgment creditor
applying to have a judgment registered under the foreign judgments
reciprocal enforcement statutes199 in the territory concerned.200
Resumption of action
If an action, suit or other proceeding has been dismissed or otherwise decided

against an external company on the ground that an act or transaction of the
company was invalid or prohibited by reason of the company’s not being
registered, the company may, when it becomes registered and upon such
terms as to costs as the court may order, maintain a new action, suit or other
proceeding as if no judgment had been given or entered therein.201
Outside Companies
Part X of the Jamaican Companies Act contains a number of provisions
regulating companies incorporated outside of Jamaica which establish a place
of business in Jamaica.202 Part IX of the Belizean Act is in many respects
similar to the Part X of the Jamaican Act, and is intended to have the same
purpose as Part X in the Jamaican Act.203 As we have seen, in the Jamaican Act
these companies are referred to simply as ‘companies incorporated outside the
Island’ and in the Belizean Act as ‘overseas companies’. For convenience, these
companies are referred to as ‘outside companies’ in this book.
Obligation to deliver documents to Registrar
An outside company which establishes a place of business in Belize or Jamaica

is under a statutory duty to deliver statutorily specified documents to the
Registrar for registration.204 These documents include the following:
(a) a certified copy of the charter, statutes or articles of the company, or

other instrument constituting or defining the constitution of the
company, and, if the instrument not written in the English language, a
certified translation thereof;205
(b) a list of the directors of the company, containing such particulars with
respect to the directors as are required to be contained with respect to
directors in the register of the directors of companies;206 and
(c) the names and addresses of some one or more persons resident in
Belize or Jamaica authorised to accept on behalf of the company
service of process and any notices required to be served on the
company.207
Power of Registrar to direct name change of outside company
Under the Jamaican Act, the Registrar has a power to direct a name change of
an outside company.208 The Registrar may do this where, within six months of
delivery to the Registrar of the documents required for registration by the
outside company, the Registrar forms the opinion that the name of that
company contained in the relevant instrument too closely resembles the name
registered in respect of any other company registered at the company
registry.209 In any such event, the Registrar may direct the outside company to,
within six weeks of the date of the direction, in addition to or in place of its
principal name, take an alternative name approved by the Registrar as the
name in which it proposes to carry on business in Jamaica.210
Where the Registrar directs a name change of an outside company, that
company must, on or before the time given by the Registrar, notify in writing
to the Registrar for the purpose of registration by him the approved
alternative name by the company pursuant to the direction.211 After the date
of such notification, the company must carry on business in Jamaica solely in
the alternative name.212
Power of outside company to hold land
An outside company has the same power to hold lands in Belize or Jamaica as
a company incorporated in the territory concerned.213
Duty of outside company to deliver to Registrar alteration of

documents
An outside company is under a statutory duty to deliver to the Registrar for

registration a return containing prescribed particulars of any alteration in its
charter, statutes or articles.214 A similar duty is statutorily imposed in respect
of changes to the directors of the company or the particulars contained in the
list of the directors215 or the names or addresses of the persons authorised to
accept service on its behalf.216 Whenever there is any such alteration, the
outside company is under a duty to, within twenty-one days after the date on
which particulars of the alteration could, in due course of post and if
dispatched with due diligence, have been received in Belize or Jamaica from
the place where the company is incorporated, deliver the return to the
Registrar.217
In Jamaica, where the alteration involves the name of the outside company,
the Registrar is at liberty to invoke his powers under the Act in relation to
directing a name change of outside companies.218
Duty in respect of outside company’s accounts
Under both the Belizean and Jamaican Acts, an outside company must in
every calendar year make out a balance sheet and profit and loss account.219
Under the Jamaican Act alone, if the outside company is a holding company, it
must prepare group accounts similar to the group accounts statutorily required
of a holding company incorporated under the Act.220 The outside company
must deliver a copy of those documents to the Registrar for registration.221
In lieu of complying with the foregoing, an outside company has the option
to deliver to the Registrar for registration a copy of its balance sheet and profit
and loss account.222 If the outside company is a subsidiary, it must deliver to
the Registrar a copy of the balance sheet of its holding company, prepared in
the form required under the law of the place of the outside company’s
incorporation.223
In any event, when an outside company exercises its option in respect of its
accounts, it must also deliver to the Registrar for registration three
documents.224 These are, first, a profit and loss account on the outside
company’s operations in Jamaica as if such operations had been conducted by
a separate company incorporated under that Act. The account must be
prepared in the English language and to the satisfaction of the Registrar and
made out as nearly as may be in the form and containing the particulars
required by the Jamaican Act in relation to a company incorporated under the
Jamaican Act.225 However, the outside company is entitled to make such
apportionments and to add such notes and explanations as in its opinion are
necessary or desirable to give a true and fair view of the profit and loss on its
operations in Jamaica.226 For this purpose, the outside company may debit a
reasonable rate of interest on capital employed in Jamaica.227
The second document which must also be delivered to the Registrar when
an outside company exercises its option is a statement as at the date to which
its profit and loss account is made up and prepared in the English language.228
This statement must also show the company’s assets locally situated in Jamaica
classified, distinguished and valued in accordance with the Jamaican Act
affecting the classifying, distinguishing and valuing of the assets of a company
under that Act, and the nature and amount of any specific charges on such
assets.229
The third document is a report prepared in English by an accountant
qualified under the Jamaican Companies Act for appointment as an auditor of
a company on the two foregoing documents, namely, the profit and loss
account and the statement.230 This report must state that in the opinion of the
accountant and to the best of his information such account and statement are
in accordance with the books and records of the company and give the
information statutorily required and in the manner so required, and give a fair
view of the matters stated in the account and statement.231
Obligation to state name of its country of incorporation
An outside company is under an obligation to state the name of the country in

which it is incorporated in any prospectus inviting subscription for shares or
debentures in Belize or Jamaica as the case may be.232 An outside company is
also under a duty to exhibit conspicuously on every place where it carries on
business in Belize or Jamaica the name of the company and the country in
which the company was incorporated.233 Again, an outside company must
state the name of the company and the country in which it was incorporated
in legible characters in all bill-heads and letter paper, and in all notices and
other official publications of the company.234 Finally, if the liability of the
members of an outside company is limited, the company must cause notices of
that fact to be stated in legible characters in any prospectus inviting
subscription for shares or debentures in Belize or Jamaica, in all bill-heads,
letter paper, notices and other official publications of the company in Belize or
Jamaica, and to be affixed on every place where it carries on business.235
Service on outside company
Any process or notice required to be served on an outside company is

sufficiently served if addressed to any person whose name has been delivered
to the Registrar and left or sent to the address that has been so delivered.236
Where, however, the company fails to deliver a name and address to the
Registrar or, if at any time the person whose name and address has been so
delivered is dead or has ceased to reside in Jamaica, a document may be
served on the company by leaving it at or sending it by post to any place of
business established by the company in Jamaica.237
Removing outside company’s name from the register
Under the Jamaican Act, if an outside company ceases to have a place of

business in Jamaica, that company must forthwith give notice of that fact to
the Registrar. From the date at which such notice is so given, the obligation of
the company to deliver any document to the Registrar ceases.238 The
company’s obligation to deliver any document to the Registrar may also cease
if the Registrar is satisfied by any other means that the company has ceased to
have a place of business in Jamaica and has closed the file of the company.239
Former-Act Companies
Under the Companies Acts in Anguilla, Antigua, Barbados, Dominica,
Grenada, Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, a
former-Act company is defined as a company formed and registered before
the commencement of the current Acts under the Acts immediately in force
before such commencement.240 Under the Acts in the Bahamas, Belize, Jamaica
and St Christopher/Nevis such a company is referred to as an ‘existing
company’.241 This category of company was created in the Acts to allow for
them to be regulated under the provisions of the current Acts.
Constrained Share Companies
Constrained share companies are a special category of company only found in
the Barbados Companies Act.242 As will be seen in Chapter 6, shares in a
company are inherently transferable except that they must be transferred in
the manner provided for in the relevant Act. What makes the constrained
share company special is that it is a company in which the transfer of shares is
constrained.
A constrained share company is defined in the Barbados Act as a public
company which has by special resolution amended its articles to constrain the
issue or transfer of its shares for the purpose of enabling a company or any of
its affiliates to qualify under the laws of the territory in question to obtain a
licence to carry on any business, or to acquire shares of a financial
intermediary.243 These companies are required to comply with the rather
complex special provisions in the Companies Regulations applicable to
constrained share companies.244
Conclusion
The Companies Acts in the Commonwealth Caribbean have in many cases
refashioned the traditional classification of companies based on UK company
legislation. These Acts have replaced old concepts and distinctions by new
ones and have revised the legal effect of these concepts and distinctions. The
Acts have also eliminated some formerly recognised special types of
companies and have introduced other special types to meet newly recognised
realities.
This chapter shows that there is considerable variation in the extent to
which this refashioning has occurred throughout the Commonwealth
Caribbean. Broadly speaking, alteration has been most pronounced in
Anguilla, the Bahamas, Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago. In Jamaica, many of
the traditional concepts and categorisations have been maintained but these
are significantly reformed to confront new corporate realities. In Belize and St
Christopher/Nevis, there has been little or no change.
Notes
1 [1906] 1 Ch 131, 134.
2 Ang s 1; Ant s 543(1); B’dos s 448(f); Dom s 543(1); Gren s 543(1); Guy s 2(1)(b); Mont s 543(1); St C/N s 2(1);
St L s 543(1); St V s 543(1); T’dad s 4.
3 Ang s 1; Ant s 543(1); B’dos s 2(1)(b); Dom s 543(1); Gren s 543(1); Guy s 535(f); Mont s 543(1); St C/N s 2(1):
note, however, the rather peculiar wording; St L s 543(1); St V s 543(1); T’dad s 4.
4 [1997] 54 Alta LR 183, 187–192. This case was cited with approval in Yordanes v Bank of Nova Scotia (2006)
78 OR (3d) 590 Ont SCJ.
5 J’ca s 2(1).
6 See, e.g., J’ca ss 362, 363 and 364.
7 Bah s 2(1); Bel s 2(1).
8 Bah s 170.
9 Bel s 250.
10 Discussed in Chapter 1.
11 7 Edw. 7 c. 50.
12 8 Edw. 7 c. 69.
15 Bah ss 2 and 126(1); J’ca s 25, 26 and 27; St C/N ss 16 and 17.
16 J’ca s 25(6).
17 J’ca s 25(3).
18 J’ca s 25(3).
19 J’ca s 26(1).
20 J’ca s 26(1).
21 J’ca s 26(4)(a).
22 Ang s 1; Ant s 543(1); B’dos s 2(1)(g); Dom s 543(1); Gren s 543(1); Guy s 2(1)(h); Mont s 543(1); St L s 543(1);
St V s 543(1); T’dad s 4.
23 Ant s 267; B’dos s 254; Dom s 267; Gren s 267; Guy s 251; Mont s 267; St L s 267; St V s 267; T’dad s 268.
24 Ang s 60; Ant s 62(1); B’dos s 59; Dom s 62(1); Gren s 62(1); Guy s 60; Mont s 62(1); St L s 62(1); St V s 62(1);
T’dad s 64(1).
25 Ant s 141(2); B’dos s 139(2); Dom s 141(2); Gren s 141(2); Guy s 145(2); Mont s 141(2); St L s 141(2); St V s
141(2); T’dad s 143(2).
26 Ant s 154(1); B’dos s 152(1); Dom s 154(1); Gren s 154(1); Guy s 156(a); Mont s 154(1); St L s 154(1); St V s
154(1); T’dad s 156(1).
163(1); T’dad s 164(1).
28 Ant s 303; B’dos s 289; Dom s 303; Gren s 303; Guy s 286; Mont s 303; St L s 303; St V s 303.
29 Discussed fully in Chapter 3.
30 Ant s 154(1); B’dos s 152(1); Dom s 154(1); Gren s 154(1); Guy s 156(a); Mont s 154(1); St L s 154(1); St V s
154(1); T’dad s 156(1).
35 Ant s 326(1); B’dos s 312(1); Dom s 326(1); Gren s 326(1); Mont s 326(1); St L s 326(1); St V s 326(1); T’dad s 4.
36 Ang s 186(1); Bah s 2.
37 Ant s 326(3); B’dos s 312(3); Dom s 326(3); Gren s 326(3); Mont s 326(3); St L s 326(3); St V s 326(3); T’dad s
307(3).
38 Ang s 186; Ant s 328; B’dos s 314; Dom s 328; Gren s 328; Mont s 328; St L s 328; St V s 328; T’dad s 308.
39 Ang s 186(1); Ant s 328(1); B’dos s 314(1); Dom s 328(1); Gren s 328(1); Mont s 328(1); St L s 328(1); St V s
328(1); T’dad s 308(1).
328(2); T’dad s 308(2).
41 Ant s 329; Bah s 161; B’dos s 315; Dom s 329; Gren s 329; Mont s 329; St L s 329; St V s 329; T’dad s 309.
42 Ant s 329(a); Bah s 161(a); B’dos s 315(a); Dom s 329(a); Gren s 329(a); Mont s 329(a); St L s 329(a); St V s
329(a); T’dad s 309(a).
43 Ant s 329(b); Bah s 161(b); B’dos s 315(b); Dom s 329(b); Gren s 329(b); Mont s 329(b); St L s 329(b); St V s
329(b); T’dad s 309(b).
44 Ant s 329(c); Bah s 161(c); B’dos s 315(c); Dom s 329(c); Gren s 329(c); Mont s 329(c); St L s 329(c); St V s
329(c); T’dad s 309(c).
45 Ant s 329(d); Bah s 161(d); B’dos s 315(d); Dom s 329(d); Gren s 329(d); Mont s 329(d); St L s 329(d); St V s
329(d); T’dad s 309(d).
46 Ant s 331(1); B’dos s 317(1); Dom s 331(1); Gren s 331(1); Mont s 331(1); St L s 331(1); St V s 331(1).
50 Ant s 330(1); Bah s 163; B’dos s 316(1); Dom s 330(1); Gren s 330(1); Mont s 330(1); St L s 330(1); St V s 330(1);
T’dad s 310(1).
T’dad s 310(2).
T’dad s 311(1).
T’dad s 311(2).
T’dad s 311(2).
56 Ant s 333(a); Bah s 166(a); B’dos s 319(a); Dom s 333(a); Gren s 333(a); Mont s 333(a); St L s 333(a); St V s
333(a); T’dad s 312(a).
57 Ant s 333(b); Bah s 166(b); B’dos s 319(b); Dom s 333(b); Gren s 333(b); Mont s 333(b); St L s 333(b); St V s
333(b); T’dad s 312(b).
58 Ant s 334(1); Bah s 167(1); B’dos s 320(1); Dom s 334(1); Gren s 334(1); Mont s 334(1); St L s 334(1); St V s
334(1); T’dad s 313(1).
334(2); T’dad s 313(2).
335(1); T’dad s 314(1).
335(1); T’dad s 314(1).
335(2); T’dad s 314(2).
315(1).
64 Ant s 336(1)(a); B’dos s 322(1)(a); Dom s 336(1)(a); Gren s 336(1)(a); Mont s 336(1)(a); St L s 336(1)(a); St V s
336(1)(a); T’dad s 315(1)(a).
65 Ant s 336(1)(b); B’dos s 322(1)(b); Dom s 336(1)(b); Gren s 336(1)(b); Mont s 336(1)(b); St L s 336(1)(b); St V s
336(1)(b); T’dad s 315(1)(b).
66 Ant s 336(1)(c); B’dos s 322(1)(c); Dom s 336(1)(c); Gren s 336(1)(c); Mont s 336(1)(c); St L s 336(1)(c); St V s
336(1)(c); T’dad s 315(1)(c).
67 Ant s 336(1)(d); B’dos s 322(1)(d); Dom s 336(1)(d); Gren s 336(1)(d); Mont s 336(1)(d); St L s 336(1)(d); St V s
336(1)(d); T’dad s 315(1)(d).
68 Ant s 336(1)(e); B’dos s 322(1)(e); Dom s 336(1)(e); Gren s 336(1)(e); Mont s 336(1)(e); St L s 336(1)(e); St V s
336(1)(e); T’dad s 315(1)(e).
69 Ant s 336(1)(f); B’dos s 322(1)(f); Dom s 336(1)(f); Gren s 336(1)(f); Mont s 336(1)(f); St L s 336(1)(f); St V s
336(1)(f); T’dad s 315(1)(f).
70 Ant s 336(1)(g); B’dos s 322(1)(g); Dom s 336(1)(g); Gren s 336(1)(g); Mont s 336(1)(g); St L s 336(1)(g); St V s
336(1)(g); T’dad s 315(1)(g).
71 Ant s 336(1)(h); B’dos s 322(1)(h); Dom s 336(1)(h); Gren s 336(1)(h); Mont s 336(1)(h); St L s 336(1)(h); St V s
336(1)(h); T’dad s 315(1)(h).
72 Ant s 336(1)(i); B’dos s 322(1)(i); Dom s 336(1)(i); Gren s 336(1)(i); Mont s 336(1)(i); St L s 336(1)(i); St V s
336(1)(i); T’dad s 315(1)(i).
73 Ant s 336(1)(j); B’dos s 322(1)(j); Dom s 336(1)(j); Gren s 336(1)(j); Mont s 336(1)(j); St L s 336(1)(j); St V s
336(1)(j); T’dad s 315(1)(j).
315(2).
336(2)(a); T’dad s 315(2)(a).
336(2)(b); T’dad s 315(2)(b).
336(2)(c); T’dad s 315(2)(c).
336(2)(d); T’dad s 315(2)(d).
336(2)(e); T’dad s 315(2)(e).
336(2)(f); T’dad s 315(2)(f).
336(2)(g); T’dad s 315(2)(g).
315(3).
315(4).
315(6).
315(5).
337(1).
337(1); T’dad s 316(1).
337(2); T’dad s 316.
337(3).
90 Bah s 7; Bel s 4(b); J’ca s 3(2)(b); St C/N s 4(1); T’dad s 9(2A)(a).
91 Ang s 6(c); Bah s 8(1); J’ca s 3(2)(b); T’dad s 4.
92 Ang s 6(b); Bah s 7; T’dad s 9(2A).
93 Bah s 7(d); J’ca s 9(1); St C/N s 5(2)(d); T’dad.
94 Bah s 8(2); J’ca s 9(1); St C/N s 5(2)(d).
95 Bah s 7(a); Bel s 5(1)(a); St C/N s 5(2)(a).
96 Bah s 7(b); Bel s 5(1)(b); St C/N s 5(2)(g).
97 Bah s 7(c); Bel s 5(3); T’dad s 9(2A)(a).
98 Ang s 1; Ant s 543(1); Bah s 170; B’dos s 324(1)(a); Dom s 543(1); Gren s 543(1); Guy s 310(1)(a); J’ca s 362;
Mont s 543(1); St C/N s 2(1): restricted to an incorporated body corporate; St L s 543(1); St V s 543(1); T’dad
s 4.
99 Ant s 338; Bah s 171(1); B’dos s 324(2); Dom s 338; Gren s 338; Guy s 310(2); Mont s 338; St L s 338; St V s
338; T’dad s 317.
100 Ant s 338(a); Bah s 171(1)(a); B’dos s 324(2)(b); Dom s 338(a); Gren s 338(a); Guy s 310(2)(a); Mont s 338(a); St
L s 338(a); St V s 338(a); T’dad s 317(a).
101 Ant s 338(b); Dom s 338(b); Gren s 338(b); Guy s 310(2)(b); Mont s 338(b); St L s 338(b); St V s 338(b); T’dad s
317(c).
102 Ant s 338(c); Dom s 338(c); Gren s 338(c); Guy s 310(2)(e); Mont s 338(c); St L s 338(c); St V s 338(c).
103 B’dos s 324(2)(a).
104 Bah s 171(1)(a); B’dos s 324(2)(b).

105 Bah s 171(1)(b); B’dos s 324(2)(c).
106 B’dos s 324(2)(d).
107 Bah s 171(1)(c); B’dos s 324(2)(e).
108 Bah s 171(2); B’dos s 324(2); Guy s 310(3).
109 Ant s 340(1); Bah s 172(1); B’dos s 326(1); Dom s 340(1); Gren s 340(1); Guy s 312(1); Mont s 340(1); St L s
340(1); St V s 340(1); T’dad s 319(1).
110 Bah s 172(3).
340(2); T’dad s 319(2).
340(3); T’dad s 319(3).
340(3); T’dad s 319(3).
340(4); T’dad s 319(4).
344(1); St V s 344(1); T’dad s 318(1).
116 Ant s 344(1)(a); Bah s 173(1)(a); B’dos s 330(1)(a); Dom s 344(1)(a); Gren s 344(1)(a); Guy s 316(1)(a); Mont s
344(1)(a); St L s 344(1)(a); St V s 344(1)(a); T’dad s 318(1)(a).
117 Ant s 344(1)(b); Bah s 173(1)(b); B’dos s 330(1)(b); Dom s 344(1)(b); Gren s 344(1)(b); Guy s 316(1)(b); Mont s
344(1)(b); St L s 344(1)(b); St V s 344(1)(b); T’dad s 318(1)(b).
118 Ant s 344(1)(c); Bah s 173(1)(c); B’dos s 330(1)(c); Dom s 344(1)(c); Gren s 344(1)(c); Guy s 316(1)(c); Mont s
344(1)(c); St L s 344(1)(c); St V s 344(1)(c); T’dad s 318(1)(c).
119 Ant s 344(1)(d); Bah s 173(1)(d); B’dos s 330(1)(d); Dom s 344(1)(d); Gren s 344(1)(d); Guy s 316(1)(d); Mont s
344(1)(d); St L s 344(1)(d); St V s 344(1)(d); T’dad s 318(1)(d).
120 Ant s 344(1)(e); Bah s 173(1)(e); B’dos s 330(1)(e); Dom s 344(1)(e); Gren s 344(1)(e); Guy s 316(1)(e); Mont s
344(1)(e); St L s 344(1)(e); St V s 344(1)(e); T’dad s 318(1)(e).
121 Ant s 344(1)(f); Bah s 173(1)(f); B’dos s 330(1)(f); Dom s 344(1)(f); Gren s 344(1)(f); Guy s 316(1)(f); Mont s
344(1)(f); St L s 344(1)(f); St V s 344(1)(f); T’dad s 318(1)(f).
122 Ant s 344(1)(g); Bah s 173(1)(g); B’dos s 330(1)(g); Dom s 344(1)(g); Gren s 344(1)(g); Guy s 316(1)(g); Mont s
344(1)(g); St L s 344(1)(g); St V s 344(1)(g); T’dad s 318(1)(g).
123 Ant s 344(1)(h); Bah s 173(1)(h); B’dos s 330(1)(h); Dom s 344(1)(h); Gren s 344(1)(h); Guy s 316(1)(h); Mont s
344(1)(h); St L s 344(1)(h); St V s 344(1)(h); T’dad s 318(1)(h).
124 Ant s 344(1)(i); Bah s 173(1)(i); B’dos s 330(1)(i); Dom s 344(1)(i); Gren s 344(1)(i); Guy s 316(1)(i); Mont s
344(1)(i); St L s 344(1)(i); St V s 344(1)(i); T’dad s 318(1)(i).
125 Ant s 344(1)(j); Bah s 173(1)(j); B’dos s 330(1)(j); Dom s 344(1)(j); Gren s 344(1)(j); Guy s 316(1)(j); Mont s
344(1)(j); St L s 344(1)(j); St V s 344(1)(j); T’dad s 318(1)(j).
126 Ant s 344(1)(k); Bah s 173(1)(k); B’dos s 330(1)(k); Dom s 344(1)(k); Gren s 344(1)(k); Guy s 316(1)(k); Mont s
344(1)(k); St L s 344(1)(k); St V s 344(1)(k); T’dad s 318(1)(k).
127 Ant s 344(1)(l); Bah s 173(1)(l); B’dos s 330(1)(l); Dom s 344(1)(l); Gren s 344(1)(l); Guy s 316(1)(l); Mont s
344(1)(l); St L s 344(1)(l); St V s 344(1)(l); T’dad s 318(1)(l).
128 Ant s 344(1)(m); Bah s 173(1)(m); B’dos s 330(1)(m); Dom s 344(1)(m); Gren s 344(1)(m); Guy s 316(1)(m);
Mont s 344(1)(m); St L s 344(1)(m); St V s 344(1)(m); T’dad s 318(1)(m).
132 Ant s 344(2)(d); Bah s 173(2)(d); B’dos s 330(2)(d); Dom s 344(2)(d); Gren s 344(2)(d); Guy s 316(2)(d); Mont s
133 Ant s 344(2)(e); Bah s 173(2)(e); B’dos s 330(2)(e); Dom s 344(2)(e); Gren s 344(2)(e); Guy s 316(2)(e); Mont s
134 Ant s 345; Bah s 173(3); B’dos s 331; Dom s 345; Gren s 345; Guy s 317; Mont s 345; St L s 345; St V s 345;
T’dad s 321.
341(1); St V s 341(1); T’dad s 320.
341(2).
342(1).
342(2).
139 Ant s 342(3)(a); B’dos s 328(3)(a); Dom s 342(3)(a); Gren s 342(3)(a); Guy s 314(3)(a); Mont s 342(3)(a); St L s
342(3)(a); St V s 342(3)(a).
140 Ant s 342(3)(b); B’dos s 328(3)(b); Dom s 342(3)(b); Gren s 342(3)(b); Guy s 314(3)(b); Mont s 342(3)(b); St L s
342(3)(b); St V s 342(3)(b).
141 Ant s 342(3)(c); B’dos s 328(3)(c); Dom s 342(3)(c); Gren s 342(3)(c); Guy s 314(3)(c); Mont s 342(3)(c); St L s
342(3)(c); St V s 342(3)(c).
346(1); T’dad s 323(1).
346(2); T’dad s 323(2).
346(3); T’dad s 323(3).
348(1); T’dad s 325(1).
348(2); T’dad s 325(2).
348(3); T’dad s 325(3).
151 Ant s 349(1); Bah s 174(1)(a); B’dos s 335(1)(a); Dom s 349(1); Gren s 349(1); Guy s 321(1)(a); Mont s 349(1); St
L s 349(1); St V s 349(1); T’dad s 326(1).
152 Ant s 349(1); Bah s 174(1)(b); B’dos s 335(1)(b); Dom s 349(1); Gren s 349(1); Guy s 321(1)(b); Mont s 349(1); St
L s 349(1); St V s 349(1); T’dad s 326(1).
349(1); T’dad s 326(1).
349(2); T’dad s 326(2).
155 Ant s 350; Bah s 175; B’dos s 336; Dom s 350; Gren s 350; Guy s 322; Mont s 350; St L s 350; St V s 350; T’dad
s 327.
s 327.
351(1); St V s 351(1); T’dad s 328(1).
351(1); St V s 351(1); T’dad s 328(1).
351(1); St V s 351(1); T’dad s 328(1).
160 Bah s 177(3); B’dos s 337(3); Guy s 323(3).
351(2); St V s 351(2); T’dad s 328(2).
352(1); St V s 352(1); T’dad s 329(1).
352(2); St V s 352(2); T’dad s 329(2).
164 B’dos s 338(3); Guy s 324(3).
353(1); St V s 353(1); T’dad s 330(1).
353(1); St V s 353(1); T’dad s 330(1).
353(2); St V s 353(2); T’dad s 330(2).
168 B’dos s 339(3); Guy s 325(3).
171 Bah s 170(1); B’dos s 341(1); Guy s 327(1); T’dad s 335.
172 Bah s 170(1); B’dos s 341(1); Guy s 327(1); T’dad s 335(a).
173 Bah s 170(2); B’dos s 341(2); Guy s 327(2); T’dad s 335(b).
174 Bah s 170(2); B’dos s 341(2); Guy s 327(2); T’dad s 335(b).
355(1); T’dad s 335(1).
355(1); T’dad s 335(1).
355(3); T’dad s 335(3).
355(2); T’dad s 335(2).
355(2); T’dad s 335(2).
180 Ant s 355(4); B’dos s 342(4)(a); Dom s 355(4); Gren s 355(4); Guy s 328(4)(a); Mont s 355(4); St L s 355(4); St V
s 355(4); T’dad s 335(4).
181 B’dos s 342(4)(b); Guy s 328(4)(b).
355(5); T’dad s 335(5).
336(1).
333(1).
333(1).
333(2).
333(3).
188 Bah s 182(1).
189 Bah s 182(1).
190 Bah s 182(2).
191 Guy s 329(2).
192 Guy s 329(4).
357(1); T’dad s 334(1).
194 (Unreported) Suit No 602 of 1996 Gren HC.
357(2); T’dad s 334(2).
357(2); T’dad s 334(2).
357(3); T’dad s 334(3).
357(4); T’dad s 334(4).
199 See, e.g., Ang Foreign Jurisdiction Act RSA 2000 C. F 50; Ant Foreign Jurisdiction Act 1890 (UK); B’dos
Foreign and Commonwealth Judgments (Reciprocal Enforcement) Act Cap. 201; Gren Foreign Judgments
(Reciprocal Enforcement) Act Cap. 113; T’dad Judgments Extension Act Ch. 5: 02.
357(5); T’dad s 334(5).
202 J’ca s 362.
203 Bel s 250.
204 Bel s 251(1); J’ca s 363(1).
205 Bel s 251(1)(a); J’ca s 363(1)(a).
206 Bel s 251(1)(b); J’ca s 363(1)(b).
207 Bel s 251(1)(c); J’ca s 363(1)(c).
208 J’ca s 363(3).
209 J’ca s 363(3).
210 J’ca s 363(3).
211 J’ca s 363(4).
212 J’ca s 363(4).
213 Bel s 252(4); J’ca s 364.
214 Bel s 251(5)(a); J’ca s 365(1)(a).
215 Bel s 251(5)(b); J’ca s 365(1)(b).
216 Bel s 251(5)(c); J’ca s 365(1)(c).
217 Bel s 251(5); J’ca s 365(1).
218 J’ca s 365(2).
219 Bel s 251(6); J’ca s 366(1).
220 J’ca s 366(1).
221 J’ca s 366(1).
222 J’ca s 366(2).
223 J’ca s 366(2).
224 J’ca s 366(2).
225 J’ca s 366(2)(a).
226 J’ca s 366(2)(a).

227 J’ca s 366(2)(a).
228 J’ca s 366(2)(b).
229 J’ca s 366(2)(b).
230 J’ca s 366(2)(c).
231 J’ca s 366(2)(c).
232 Bel s 251(7)(a); J’ca s 367(1)(a).
233 Bel s 251(7)(b); J’ca s 367(1) b).
234 Bel s 251(7)(c); J’ca s 367(1)(c).
235 Bel s 251(7)(d); J’ca s 367(1)(d).
236 Bel s 251(8); J’ca s 368.
237 Bel s 251(8); J’ca s 368.
238 J’ca s 369.
239 J’ca s 369.
240 Ang ss 277–288; Ant ss 360–369; B’dos ss 347–355; Dom ss 360–369; Gren ss 360–369; Guy ss 334–343; Mont
ss 360–369; St L ss 360–369; St V ss 360–369; T’dad ss 338–347.
241 Bah s 304; Bel ss 223–225; J’ca s 354; St C/N s 220.
242 B’dos s 198.
243 B’dos s 198(1).
244 See B’dos Companies Regulations, 1984 Pt VIII.

Chapter 3
Company Formation
Introduction
All Companies Acts in the Commonwealth Caribbean contain provisions
which deal with the incorporation of companies under those Acts.1 The
guiding principle which underlies the approach to incorporation in these Acts
is that incorporation is to be regarded as a matter of right, not as a privilege
conferred through the exercise of administrative discretion. As a result,
incorporators need only meet the requirements stipulated in the Acts to
incorporate a company. It is with these requirements that this chapter is
concerned.
Nature of the Right to Incorporate
Voluntary and involuntary incorporation
The basic provision governing the incorporation of companies in Anguilla,

Antigua, Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago is contained in a provision in the
Acts in these territories similar to section 4(1) of the Barbados Companies
Act.2 This subsection provides that ‘one or more persons may incorporate a
company by signing and sending articles to the Registrar’.3 Under section 3(1)
of the Bahamas Act, the provision is that two or more persons may
incorporate by ‘signing a memorandum’ and submitting it to the Registrar;
under section 3(1) of the Belize Act, that any seven or more persons may
incorporate ‘by subscribing their names to a memorandum of association’; and
under section 4(1) of the St Christopher/Nevis Act, that ‘any number of
persons’ may incorporate ‘by subscribing their names to a memorandum of
association’.
The undoubted effect of these provisions is to confer a right on a person or
persons, as the case may be, to incorporate a company. As was seen in Chapter
2, a company is defined in the Acts as a body corporate or a company that is
incorporated or continued under the Act in question.4 This means that the
right to incorporate is a right to incorporate any type of company that is
provided for under the Act in question in accordance with the relevant
stipulations required under the Act in question.
The incorporation contemplated by these provisions is what may be called
voluntary incorporation since incorporation results from the voluntary choice
of persons wishing to incorporate. Incorporation under these provisions may
be contrasted with incorporation under provisions similar to section 3 of the
Barbados Act.5 That section provides that ‘no association, partnership, society,
body or other group consisting of more than twenty persons may be formed
for the purpose of carrying on any or business for gain unless it is incorporated
under this Act or formed under some other enactment’. Under this section,
incorporation is compelled where the circumstances specified in that section
exist. Incorporation under this section may therefore be regarded as
compulsory.
Registrar’s duty to register
An interesting question which arises in respect of the right to incorporate

conferred by the incorporation provisions in Commonwealth Caribbean
Companies Acts is: how extensive is this right? It is submitted that the true
test of the amplitude of this right is best gauged by a demarcation of the
extent to which the Registrar has power to refuse to register signed articles of
incorporation sent to him by a person entitled to form a company under the
Act in question.
The Registrar’s power in respect of incorporation documents sent to him by
a person wishing to incorporate a company is governed by provisions in the
Acts similar to section 86 and section 410 (1)7 of the Barbados Act. Section 88
imposes a duty on the Registrar to issue a certificate of incorporation upon the
receipt of articles of incorporation. The wording of the section is instructive. It
mandates that ‘upon receipt of the articles of incorporation, the Registrar must
issue a certificate of incorporation…and the certificate is conclusive proof of
the incorporation of the company named in the certificate’.9 By the removal of
any hint of administrative discretion in the Registrar in the registration of a
company once the appropriate documents are submitted, the undeniable legal
effect of this section is that the incorporator’s right to incorporate is
entrenched. It is to be noted that the corresponding provisions in the
Anguilla,10 Belize,11 Jamaica12 and St Christopher/Nevis Acts,13 though worded
differently, have the same effect of guaranteeing the incorporator’s right of
incorporation.
Section 410(1) of the Barbados Act14 contains an express delineation of the
power on the Registrar to refuse to register any document submitted to him
for registration. According to this subsection, the Registrar can only refuse to
register any such document if he is of the opinion that the document (a)
contains matter contrary to the law;15 (b) by reason of any omission or error in
description, has not been duly completed;16 (c) does not comply with the
requirements of the Act;17 (d) contains an error, alteration or erasure;18 (e) is
not sufficiently legible;19 or (f) is not sufficiently permanent for his records.20
It is clear from this provision that the only substantive reason for which the
Registrar may refuse registration of a document sent to him for registration is
that the document contains matter contrary to law.21 Invariably, the matter
which is contrary to law in the case of incorporation documents is that the
purpose for which the company is being incorporated is illegal or unlawful.
Thus, the only real substantive limitation on the right to incorporate, where
the articles of incorporation comply with the requirements of the Companies
Act in question, is that the company must not be formed for an illegal purpose.
The conclusion that there is no right to incorporate a company for an illegal
or unlawful purpose may also be derived from the fact that the right to
incorporate is contained in Acts which provide that a company has the
capacity, rights, powers and privileges of an individual.22
Since an individual has no right to do what is illegal or unlawful, it follows
that a company cannot be incorporated to do what is illegal or unlawful.
The English decision in R v Registrar of Companies, ex p Bowen23 illustrates
how this limitation on the right to incorporate operates. That case concerned
an application to register a proposed company under the name ‘The United
Dental Service Ltd’. The subscribers to the memorandum were seven
unregistered dental practitioners. The Registrar refused to register the
company unless either the memorandum was altered so as to provide that the
work of the company should be undertaken only by registered dentists, or the
name was amended so as not to include the words ‘dental’ or ‘dentist’. The
applicants sought a writ of mandamus to compel the Registrar to register the
company.
It was held that the Registrar’s refusal was unjustified and that mandamus
would be granted. Lord Reading CJ stated:24
In my opinion the question turns in the main … upon whether the use of these words ‘The United Dental
Service’ would amount to an offence under the Dentists Act 1878 … I think that these words ‘The United
Dental Service’ imply a description of the acts to be performed, and do not imply that the persons who
will perform them are persons specially qualified under the statute of 1878. The Registrar of Companies
would be entitled, if the use of the proposed name would be an offence under the statute … to refuse to
register the company with that name; but having arrived at the conclusion that would not be the effect of
the words ‘United Dental Service’, I hold that the Registrar was wrong in refusing registration.
This case suggests, therefore, that the Registrar cannot refuse to register a
company which is not proposing to do that which is unlawful. If, on the other
hand, the incorporation documents submitted to the Registrar reveal that the
company is being incorporated for an illegal purpose, the Registrar may refuse
to register the company. This is the effect of the English Court of Appeal case
of R v Registrar of Companies, ex p More.25 In this case the Registrar refused to
register a company formed to sell tickets in an Irish lottery. It was held that
the lottery was illegal in England and that the Registrar’s refusal was right.
Admittedly, the relevant English Companies Act involved in these cases
provided expressly that a company could only be formed for a ‘lawful
purpose’.26 It is submitted that taken in its statutory context, as has been shown
above,27 even though the relevant provision in Commonwealth Caribbean
Acts does not expressly so provide, the requirement that a company be
formed for a lawful purpose is a logical limitation on the right to incorporate
and have the capacity of an individual given by those Acts.
Certificate of incorporation
As has already been seen, Commonwealth Caribbean Companies Acts

mandate that upon receipt of the articles of incorporation, the Registrar must
issue a certificate of incorporation.28 The Registrar has no discretion in this
matter, and as long as the documents are in order the incorporators have a
right to registration enforceable by mandamus.29 The certificate of
incorporation has two important implications for the right to incorporate.
The first importance of the certificate of incorporation is that, according to
the relevant provision in the Acts, the certificate of incorporation is ‘conclusive
proof of the incorporation of the company named in the certificate’.30 It
appears from the English House of Lords’ decision in Jubilee Cotton Mills Ltd
v Lewis,31 interpreting a provision in the UK Companies Act in pari materia
with the relevant section in Commonwealth Caribbean Acts,32 that the scope
of that section is to be taken at face value. In that case, the UK provision was
interpreted to mean that a certificate was conclusive as to the date of
incorporation even though the date stated in the certificate was wrong. The
Canadian case of CPW Valve & Instruments Ltd v Scott33 is to the same effect.
In that case the Alberta Court of Appeal stressed that the provision is a
statutory directive that is not open to debate so long as the certificate of
incorporation stands.
The foregoing cases dealt with a certificate issued to a company
incorporated for a legal purpose. If, however, the Registrar, for whatever
reason, issues a company which is being incorporated for some illegal purpose
with a certificate of incorporation a difficult question is raised. The question is
this: can the incorporation of such a company be challenged once the Registrar
has issued that certificate of incorporation?
This question arose in the English case of Bowman v Secular Society Ltd.34 In
that case, the Secular Society was registered as a company limited by
guarantee under the Companies Acts 1862 to 1893. The question which had to
be answered there was whether the company’s objects were legal, criminal or
otherwise. A preliminary matter of procedure which had to be dealt with was
whether, if the Registrar having issued a certificate of incorporation,
proceedings could be instituted to have the registration cancelled. It was held
that, in the circumstances of the case, the Attorney-General, on behalf of the
Crown, could institute proceedings by way of certiorari to cancel a
registration which the Registrar in discharge of his duties had improperly or
erroneously allowed.
Bowman v Secular Society Ltd was followed in the English case of R v
Registrar of Companies, ex p AG.35 In this case, the Attorney-General
successfully applied for an order to quash the incorporation of a company
called Lindi St Clair (Personal Services) Ltd which had been set up ‘to carry on
the business of prostitution’.
It is evident from these cases then, that despite the wording of the relevant
provision in Commonwealth Caribbean Acts,36 even after a certificate of
incorporation has been issued, an incorporation may be challenged on the
grounds of illegality in proceedings brought by the Attorney-General to have
the registration cancelled. It is submitted that this principle applies even
though a company may not be required under the relevant Companies Act to
set out its objects in its articles of incorporation.
The second importance of the certificate of incorporation is that, under the
provisions of Commonwealth Caribbean Acts, the company comes into
existence from the date shown on the certificate of incorporation.37 This is
important because, as was said in the Alberta Court of Appeal decision of
CPW Valve & Instruments Ltd v Scott,38 the certificate of incorporation is a
statutory directive as to the date at which corporate status is to be taken to
have been created and that that is not open to question so long as that
certificate stands. The implication of this is that, as is expressly stated in the
Bahamian, Belizean, Jamaican and St Christopher/Nevis Acts,39 from this date,
the incorporators who sign the articles of incorporation, together with persons
who subsequently become members, constitute a body corporate capable of
exercising all the functions of an incorporated company. It also means that the
company is capable of having perpetual succession and a common seal and
that the liability on the part of the shareholders of the company to contribute
to the assets of the company is limited.40
Right to incorporate in a foreign language
Importantly, under the Barbados Act but not under any of the other Acts, a
company may be incorporated in a language other than the English
language.41 Where a company is being incorporated in a language other than
English, a notarially certified translation of the name of the company must be
provided.42 Additionally, where the other language uses an alphabet or
characters other than the Latin alphabet, the name of the company must be
expressed in the Latin alphabet and a notarially certified translation
provided.43
Exercising the Right to Incorporate
Who may exercise the right to incorporate
Under most Commonwealth Caribbean Companies Acts,44 there is no

numerical limitation on who can incorporate since the relevant section
provides that one or more persons have the right to incorporate. However,
certain specified persons are forbidden from exercising the right to
incorporate. The Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica,
Grenada, Guyana, Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and
Tobago forbid three classes of individuals from forming or joining in the
formation of a company.45 Individuals so forbidden are (i) those who are less
than eighteen years of age;46 (ii) those who are of unsound mind and have
been so found by a tribunal in the relevant territory or elsewhere;47 or (iii)
those who have the status of bankrupt,48 or in the Bahamas and Trinidad and
Tobago, are undischarged bankrupts.49
The first two restricted classes, namely, persons less than eighteen years of
age and persons of unsound mind, unmistakably apply to natural persons and
their meaning is reasonably straightforward. They refer to individuals and not
to companies. With respect to the third class, namely those who have the
status of bankrupt or undischarged bankrupt, the position is not so
straightforward because in some jurisdictions a company may have the legal
status of bankrupt under Bankruptcy and Insolvency Acts.50 In these
jurisdictions, a question could thus arise as to whether this third category
includes bankrupt companies, which might therefore not have a right to
incorporate a company.
There is good reason for suggesting that it does not. This is because, on the
express words of the provision, the subsection applies only to an ‘individual’,
which according to its ordinary meaning refers to a natural person. Since a
company as defined in the Acts is a legal person, but not an individual, it
follows that the subsection does not apply to a company. This reasoning
compels the rather surprising conclusion that a bankrupt company may
incorporate another company under the Acts.
It is to be noted here that, under the Belize, the Jamaica and the St
Christopher/Nevis Companies Acts, there is no express provision disqualifying
any person from incorporating a company. It is submitted that the absence of
such a provision notwithstanding, the same categories of persons disqualified
from incorporating a company under the other Acts are also disqualified in
Belize, Jamaica and St Christopher/Nevis. This is so because, under the general
law, these categories of persons do not enjoy full legal capacity and would
only enjoy legal capacity if it were expressly conferred on them by the
Companies Acts.
Formalities for incorporation
A person wishing to exercise his right to incorporate must observe the

formalities stipulated by the relevant Act. In particular, certain specified
documents must be sent to the Registrar to be filed. Based on the documents
specified in the various Acts, the law on corporate incorporation in the
Commonwealth Caribbean may be conveniently divided into two categories.
These are what may be called ‘Articles of Incorporation Acts’ and the
‘Memorandum and Articles of Association Acts’. The law on the formalities
for incorporation in the Commonwealth Caribbean will now be explored
under these heads.
Articles of incorporation Acts
Overview
The articles of incorporation Acts are those Acts which have dispensed with
the requirement for the registration of a memorandum of association and
articles of association in favour of a single document called articles of
incorporation. The Acts which have done this include those in Anguilla,
Antigua, Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago. There are, however, important
differences between the Jamaican Act and the other Acts which require
separate treatment.
Basic incorporation documents
The general incorporation provisions in the Acts in Anguilla, Antigua,

Trinidad and Tobago state that a company must be incorporated by signing
and sending articles of incorporation to the Registrar of Companies.51 There
are, however, two other documents which must accompany the articles of
incorporation.52 These are a notice of the names of the directors,53 and a notice
of the address and registered office of the company.54 A further document, a
statutory declaration by an attorney-at-law, may also be submitted with these
documents.55
In the Jamaican Act, section 3(1) requires that articles of incorporation be
signed and sent to the registrar and that the other requirements of the Act,
which do not include the sending of the foregoing documents, be complied
with for a company to be formed. Where, however, a company has a share
capital, in addition to the articles, a document respecting classes of shares,
where applicable, must also be filed.56
Articles of incorporation
What are the ‘articles of incorporation’?

The ‘articles of incorporation’ are the document which contains the basic
provisions of a company’s constitution and is expressly regulated by
provisions in the Acts.57 Roughly speaking, the articles of incorporation
correspond to the memorandum of association under recently repealed
regional company legislation based on English company legislation. The
articles set out the mandatory or minimum constitutional particulars of a
company. However, the articles may, where necessary or desirable, include
other particulars.58
Form of the articles of incorporation
Under all of the articles of incorporation Acts, except the Jamaican Act, the
articles of incorporation must follow the form prescribed in the Companies
Regulations. This is so because these Acts expressly provide that ‘articles of
incorporation must follow the prescribed form’.59 This section is manifestly
mandatory, rather than directory. Thus, on the plain words of the section, the
prescribed form found in the Companies Regulations, must be followed.
Under the Jamaican Act, the form of the articles of incorporation is
prescribed in section 8(6) of that Act. This subsection stipulates that the form
of the articles of (a) a company limited by shares, (b) a company limited by
guarantee and not having share capital, (c) a company limited by guarantee
and having a share capital, (d) an unlimited company having a share capital
may be respectively in accordance with the forms set out in Tables A, B, C, D
in the First Schedule to the Act. The subsection further provides that these
forms may be excluded in whole or part or may be modified. The use of the
word ‘may’ in subsection 8(6) therefore supports a conclusion that use of the
forms set out in the First Schedule to the Act is not mandatory. In the case of a
private company, however, certain statutorily specified matters60 must be set
out in the articles.61
Contents of the articles of incorporation

According to the various stipulations in the Acts, the articles must set out the
following matters:
Name
The articles of incorporation must contain the proposed name of the

company.62 In Jamaica, the requirement is that the name of the company, with
‘Limited’ as the last word of the name in the case of a company limited by
shares or by guarantee, must be set out in the articles.63
Registered office
Under the Guyanese Act, the articles must set out that the registered office of
the company is to be situated in Guyana.64 A similar provision in the Jamaican
Act stipulates that the articles must include a statement that the registered
office of the company is to be situated in Jamaica.65 The provision in the
Anguillan Act is that the address and mailing address of the first registered
office of the company and the name, address and mailing address, if any, of
the first registered agent of the company must be set out in the articles.66
As will be seen, under the other Acts, the matter of the registered office of
the company is dealt with by the requirement of a notice of registered office
to be sent to the Registrar together with the articles of incorporation.67
Shares of the company
Certain particulars as to the shares that the company is authorised to issue are
required to be set out in the articles. Under the articles of incorporation Acts,
other than the Jamaican Act, it is required that the classes and any maximum
number of shares that the company is authorised to issue be set out.68 If there
are to be two or more classes of shares, the rights, privileges, restrictions and
conditions attaching each class of shares must also be stated in the articles.69
Further, if a class of share can be issued in series, the authority given to the
directors to fix the number of shares in, or to determine the designation of,
and the rights, privileges, restrictions and conditions attaching to, the shares of
each series must be set out in the articles.70 Finally, if the right to transfer
shares of the company is to be restricted, a statement that the right to transfer
shares is restricted and the nature of those restrictions must be set out in the
articles.71 The governing principle here is that shares, being personal property,
are prima facie transferable but the conditions of their transfer must be
contained in the articles. If the right of transfer, which is inherent in shares, is
to be taken away or cut down, it must be done by clear language.72
In addition to the foregoing particulars, the Guyanese Act and the Trinidad
and Tobago Act stipulate for other matters to be included in the articles. Under
the Guyanese Act, there is an additional requirement that the articles set out
the minimum issue price in respect of shares or classes of shares.73 Under the
Trinidad and Tobago Act the articles must additionally set out whether pre-
emptive rights with respect to the issue of shares provided for under section 38
of that Act are to be varied and, if so, a statement as to the nature of such
variations.74
The provisions on the particulars relating to the shares of a company which
must be set out in the articles under the Jamaican Act are somewhat different
from those under the other articles of incorporation Acts. This Act provides
that, in the case of a company having a share capital, the classes of shares, if
any, and the maximum number of shares, if any, that the company is
authorised to issue must be stated in the articles.75 The Act also provides that,
if the right to transfer shares in the company is to be restricted, the articles
must also contain a statement to that effect and must give the nature of the
restriction.76 The governing principle here is the same as that explained in
respect of the corresponding provision in the other articles of incorporation
Acts.77
Particulars based on the category of the company

Under the Anguillan, Jamaican and Trinidad and Tobago Acts, there are
requirements in respect of specific categories of companies that must be set
out in the articles.
Under the Anguillan Act, the articles must state whether the company is
limited by shares or guarantee.78 The articles must also state whether the
company is a non-profit company.79 In the case of a company limited by
shares, the articles must state that the liability of each shareholder shall be
limited to the amount paid on the shares held by him.80 In the case of a
company limited by guarantee and a company limited by shares and
guarantee, the articles must state that the liability of each shareholder shall be
limited to such amount as he may undertake by the articles of incorporation to
contribute to the assets of the company in the event it is wound up.81
Under the Jamaican Act, the articles of an unlimited company or a company
limited by guarantee must state the number of members with which the
company proposes to be registered.82 Further, if the company has a share
capital, the articles must state the amount of share capital with which the
company proposes to be registered.83
Under the Trinidad and Tobago Act, the articles are required to state if the
liability of the members is limited, whether it is limited by shares or by
guarantee or by both shares and guarantee.84 The articles are also required to
state whether the company is a public company.85
Directors of the company
It is a basic requirement under the articles of incorporation Acts that the

number of directors or the minimum and maximum of directors of the
company must be set out in the articles.86 In addition to this requirement, the
Anguillan Act requires that the articles state in respect of each person who has
consented to be a first director, in the case of an individual, his name,
nationality, address and mailing address,87 and, in the case of a corporation, its
name, country of registration, address and mailing address.88 Under the
Trinidad and Tobago Act, in additional to the basic requirement, there is a
requirement that the articles state whether the power of the directors to make,
amend or repeal the bye-laws of the company is restricted and, if so, a
statement as to the nature of the restrictions.89
Restriction on the business of the company
Under all the articles of incorporation Acts, the articles must state any
restriction on the business that the company may carry on.90
Particulars not statutorily required
The statutory requirement for the foregoing specified particulars to be set out
in the articles does not render inoperative the inclusion in the articles
provisions respecting any other particular which is not required to be included
in the articles.91
Format of the articles of incorporation
Under all of the articles of incorporation Acts, except the Jamaican Act, the
articles of incorporation must follow the prescribed form found in the relevant
Companies Regulations made under the Acts.92 Under the Jamaican Act,93 the
format of the articles of incorporation is set out in the Act itself. In this regard,
the Act provides that the articles must be printed or typewritten or be in some
legible form acceptable to the Registrar.94 It must be divided into paragraphs
numbered consecutively95 and bear the same stamp as if they were contained
in a deed.96 Finally, it must be signed by each subscriber to the articles in the
presence of at least one witness who must attest the signature.97
Notice of directors
In all the articles of incorporation Acts, except in the Anguillan and Jamaican
Acts, a second document, the notice of directors, must be sent to the Registrar
for filing at the time of the sending of the articles of incorporation of a
company.98 The notice of directors must be in the relevant form prescribed in
the Companies Regulations and must state the names of the directors.99 The
notice must be signed by a director or authorised officer of the company.100 At
the time of incorporation, an incorporator must sign the notice.101
Notice of address of registered office
Under all the articles of incorporation Acts except the Anguillan and Jamaican
Acts, at the time of sending the articles, a third document, the notice of the
address of the registered office of the company, must also be sent to the
Registrar for filing.102 The notice of the address of the registered office of the
company must be in the form prescribed in the Companies Regulations and
must set out the address of the company’s registered office and its mailing
address.103 The notice must be signed by a director or authorised officer of the
company.104 Upon incorporation, an incorporator must sign the notice.105
Attorney-at-law’s declaration
The final document which is usually submitted to the Registrar at the time of
sending the articles of incorporation, except in Anguilla and Jamaica, is a
statutory declaration by an attorney-at-law that to the best of his knowledge
and belief no signatory to the articles is an individual forbidden by the Act
from forming or joining in the formation of a company.106 This declaration is
usually submitted because it is, for purposes of the Act, conclusive of the facts
asserted in the declaration.107
It may be usefully noted here that, under the Bahamian Act, a statutory
declaration by a counsel or attorney accompanying a memorandum of
association has the same legal effect as a statutory declaration by an attorney-
at-law under the articles of incorporation Acts.
Document respecting classes of shares
In Jamaica alone, a company having a share capital must, where applicable,

file a document with the Registrar setting out certain matters respecting
classes of shares.108 The Jamaican Act provides that if two or more classes of
shares are issued, the rights, privileges, restrictions and conditions attaching to
each class of shares must be set out in such a document.109 Similarly, if a class
of shares may be issued in a series, the authority given to the directors to fix
the number of shares in, and to determine the designation of, and the rights,
privileges, restrictions and conditions attaching to the shares of each series
must be so set out.110
Memorandum of Association Acts
The Acts in three territories, the Bahamas, Belize and St Christopher/Nevis,

have maintained the traditional incorporation documents in the formation of a
company. Under these Acts, a company is incorporated by signing and sending
a memorandum of association to the Registrar.111 In the Bahamas, articles of
association must also be filed with the Registrar within six months after the
issue of the certificate of incorporation of the company.112
In Belize, a company limited by shares need not register articles of
association with the memorandum.113 If, however, it does not register articles
of association, the regulations contained in Table A in the First Schedule of the
Belizean Act become applicable to that company.114 A company limited by
guarantee or an unlimited company must register its articles of association
with the memorandum of association.115
In St Christopher/Nevis, articles of association must be delivered to the
Registrar with the memorandum of association.116 Sets of model tables called
Standard Tables may be prescribed by the Minister.117 Where these are so
prescribed, a company may adopt the whole or any part of the Standard
Tables provided for in the Act.118 In such an event, there is no need to deliver
articles to the Registrar.119
Corporate Name
Overview
The name of a company is of vital importance in facilitating the public in

identifying the persona of the corporate entity.120 Not surprisingly therefore,
Commonwealth Caribbean Acts and Regulations contain to a greater or lesser
extent provisions governing the acquisition of a corporate name.121 These
provisions include, in Anguilla, Antigua, the Bahamas, Barbados, Dominica,
Tobago, the procedure that must be followed in applying for a name and, in all
the territories, the rules for determining the granting of a name with which a
company may be incorporated.
Request for name search and reservation application
Before sending articles and other accompanying incorporation documents to

the Registrar in Anguilla, Antigua, the Bahamas, Barbados, Dominica,
Tobago, a request for a name search and name reservation application in the
form prescribed in the Companies Regulations must be sent to the Registrar.122
The purpose of this application is to request the reservation of a name or to
have checked the availability of a name so as to ensure that a company is not
incorporated, contrary to the Act, with or have a name that is statutorily
prohibited or that is reserved for another company. If the name requested is
not statutorily prohibited or not reserved for another company, the Registrar
may, upon the payment of the prescribed fee, reserve for ninety days the
name requested for an intended company or for a company about to change
its name.123
The request for name search and name reservation must set out a number
of items. These include the name, address and telephone number of the person
making the request and the proposed name or names in order of preference.
The request for name search and name reservation must also state the main
types of business to be carried on by the proposed company, provide any
information that may assist in deciding the suitability of the name, indicate
whether the first available name is to be reserved, state the purpose for which
the name is requested and if the purpose is for a change of name, state the
present name of the company.
All the Acts with the name reservation procedure, except the Anguilla, the
Bahamas and Jamaica Acts, expressly require that the documents relating to a
request for name search and name reservation must be completed in duplicate
and, with the prescribed fee, must be deposited at the office of the Registrar.124
Principles applicable to the granting of a name
Basic provisions
There are two sets of provisions to be found in Commonwealth Caribbean

Companies Acts regulating the name with which a company may be allowed
to be registered. The first set of provisions, which are found in all the Acts, bar
a company from having a name that is prohibited by the Acts125 or that is
reserved for another company or intended company.126 The Registrar has no
power to register a company with a prohibited name. However, under the
second set of provisions, which are found in the Acts in Anguilla, Antigua,
Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia and St Vincent,
the Registrar has a discretionary power to refuse or to accept a corporate
name in certain statutory stipulated circumstances.127
Prohibited names
The names which are prohibited are extensively set out in the Acts in
Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana, St Lucia, St Vincent
and Trinidad and Tobago.128 According to these Acts, the name of a company
must not be the same as or similar to the name or business name of any other
person or of any association, partnership or firm (or in Trinidad and Tobago,
any registered trade mark or any well-known trade mark as determined under
section 13A of the Trinidad and Tobago Trade Marks Act),129 if the use of that
name would be likely to confuse or mislead.130 Such a name may be used,
however, if the person, association, partnership or firm consents in writing to
the use of the name in whole or part131 or, if required by the Registrar in the
case of a person, that person undertakes to dissolve or change his name to a
different name within six months after the filing of the articles by which the
name is acquired.132 In the case of an association, partnership or firm, the
undertaking required by the Registrar may be either to cease to carry on its
business or activities or to change its name to a different name.133
The Acts in these territories also prohibit a name which is identical to a
name of a body corporate incorporated under the laws of the territory
concerned before the commencement date of the present Act in question.134
Also prohibited by these Acts is any name which implies a connection with
the Crown, or the Government or of any Ministry, department, branch,
bureau, service, agency or activity of Government, unless consent in writing to
the proposed name is duly obtained from the appropriate Minister.135 Further,
the Acts forbid the use of any name which suggests or implies a connection
with a political party or a leader of a political party136 or which suggests or
implies a connection with a university or a professional association recognised
by the laws of the territory in question, unless the university or professional
association concerned consents to the use of the proposed name.137 Finally, the
Acts forbid the use of any name that is prohibited by the Companies
Regulations.138
The Trinidad and Tobago Act contains some prohibitions which are found in
the other Acts under the discretionary provisions.139 These include prohibitions
against a name being primarily a geographic name used alone unless the
Registrar is satisfied that the name has through use acquired and continues to
have a secondary meaning;140 a name that is likely to be confusing with a
company that was dissolved;141 a name that contains the words ‘credit union’,
‘co-operative’ or ‘co-op’ when it connotes a cooperative venture;142 or, a name
that is in the opinion of the Registrar, for any reason, objectionable.143
The Act in the Bahamas144 contains provisions prohibiting certain corporate
names, but these are not as extensively stated as in Anguilla, Antigua,
Trinidad and Tobago. The prohibited names under the Act in the Bahamas
include a name that is identical with that under which an existing company is
already incorporated or which so nearly resembles such other name as to be
calculated to deceive or confuse except where the company in existence is in
the course of being dissolved or signifies its consent in a manner approved by
the Registrar;145 a name which contains, without the permission of the
Registrar, the words ‘Assurance’, ‘Bank’, ‘Building Society’, ‘Chamber of
Commerce’, ‘Chartered’, ‘Cooperative’, ‘Imperial’, ‘Insurance’, ‘Municipal’,
‘Royal’, or a word containing a similar meaning;146 a name that contains a
word that, in the opinion of the Registrar, suggests or is calculated to suggest
the patronage of the Government of the Bahamas or a Minister of the
Government of the Bahamas,147 a connection with any Ministry or
Department of the Government of the Bahamas,148 or a connection with any
local authority or a statutory board;149 or, a name which is indecent, offensive
or, in the opinion of the Registrar, otherwise objectionable.
The provision in the Jamaican and St Christopher/Nevis Acts is not as
detailed as in either the Bahamas or the other territories.150 These Acts merely
provide to the effect that a company may not be registered by a name which
in the opinion of the Registrar, is misleading or undesirable.151 Similarly, the
Act in Belize merely provides that a company may not be registered by a
name identical with that by which a company in existence is already
registered, or so nearly resembling that name as to be calculated to deceive.152
Names which may be refused in Registrar’s discretion
Under the second set of provisions found in the Acts in Anguilla, Antigua,
Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat, St Lucia, and St
Vincent, the Registrar has express discretionary power to refuse to accept
articles of incorporation or articles of continuation for a company or to
register articles amending the name of a company in certain specified
circumstances.153
The first such circumstance is where the name is not distinctive.154 In this
regard, a name may be held not to be distinctive if the name is too general;155
if it is descriptive only of the quality, function or other characteristics of the
goods or services in which the company deals or intends to deal;156 or if
primarily it is only a geographic name used alone.157 The name may not be
treated as ‘not distinctive’, however, if the applicant can establish that the
name has through use acquired and continues to have a secondary meaning.158
The second circumstance is where the name of the company is deceptively
inaccurate in describing the business, goods or services in association with
which it is proposed to be used;159 or, the conditions under which the goods or
services will be produced or supplied;160 or, the persons to be employed in the
production or supply of the goods or services;161 or, the place of origin of those
goods or services.162 The third is where the name is likely to be confused with
that of a company that was dissolved.163 The fourth is where the name
contains the word or words ‘credit union’, ‘cooperative’, or ‘coop’, when it
connotes a cooperative venture.164 The final is where the name is, in the
opinion of the Registrar, for any reason objectionable.165
Mandatory words in corporate name
There is a mandatory requirement in Commonwealth Caribbean company

law that some statutorily specified word indicating that the company is
incorporated with limited liability must be part of the name of the company.
The words most commonly specified are ‘Limited’ or the abbreviation ‘Ltd’,166
‘Corporation’ or the abbreviation ‘Corp’,167 or ‘Incorporated’ or the
abbreviation ‘Inc’.168 It bears stressing that a company may use and may be
legally designated by either the full or the abbreviated form.169
In the English Court of Appeal decision of Springate v Questier,170 it was
held that a summons served on a company omitting the word ‘Limited’ is not,
for that reason alone, bad. It is submitted that Commonwealth Caribbean
courts will take this approach to the words which are statutorily mandated
that must form part of the name of a company. After all, an omission of such
words in proceedings before the court can be easily remedied by an
appropriate amendment to the court documents.
Name change
Except under the St Christopher/Nevis Act, the Registrar has statutory power
to direct a company to change its name171 where, through inadvertence or
otherwise, a company comes into existence with a prohibited name172 or is
granted a prohibited name upon an application to change its name.173 Under
the Barbados Act, in addition to these eventualities, the Registrar also has
power to direct a company to change its name where that company has been
incorporated with a name to which objection has been taken and the Registrar
is satisfied that the name should be changed.174
Under the St Christopher/Nevis and Jamaican Acts, the Registrar may direct
a company to change its name if, at any time after a company has been
registered it appears to the Registrar that the name under which it is
registered is undesirable.175 In such an eventuality, under the Jamaican Act
alone, the Registrar may notify the company accordingly and issue a direction
to change its name in such notification.176 It appears from the unreported
Jamaican Supreme Court case of Windows Ltd v Win-Doors Ltd177 that any
action to enforce compliance with the Registrar’s direction to a company to
change its name has to be instituted by the Registrar at the instance of the
Attorney-General. A member of the public has no locus standi to bring an
action where there is a failure to observe the Registrar’s direction.
Where a company has been directed by the Registrar to change its name
and has not within sixty days from the service of the direction to that effect
changed its name to a name that complies with the Act, the Registrar, under
all the Acts, except the Belize, St Christopher/Nevis and the Jamaican Acts,
may revoke the name of the company and assign to it a name.178 In such a
case, the Registrar must issue a certificate of amendment showing the new
name of the company and must forthwith give notice of the change in the
Gazette.179 The issue of the certificate of amendment has the legal effect of
accordingly amending the articles of the company to which the certificate
refers from the date shown on the certificate.180 Until the name so assigned is
changed by the company by special resolution, the name of the company is
thereafter the name so assigned.181
Under the St Christopher/Nevis and the Jamaican Acts, where the Registrar
directs a company to change its name, it must do so within three months (St
Christopher/Nevis) or six weeks ( Jamaica) of such direction unless within that
time it has lodged an appeal to the Court against such direction.182 Where an
appeal is so lodged, the Court may either cancel or confirm the direction and
the Court’s decision is final and conclusive.183 If the direction of the Registrar is
confirmed by the Court, the company is obliged to change its name within a
period being not less than twenty-eight days (St Christopher/Nevis) or six
weeks ( Jamaica) of the Court’s confirmation.184
The Act in Belize does not specify any time period within which the name
change must be made. That Act merely provides that the name change must
be ‘with the sanction of the Registrar’.185 Presumably, the name change must
be effected within any time period specified by the Registrar.
Revival of name
The Acts in Barbados, Guyana and Trinidad and Tobago contain a provision
dealing with the case of the name of a company which has been revived under
those Acts.186 The provision in these Acts is that, if between the date of its
dissolution and the date of its revival another company has been granted a
name that is likely to be confused with the name of the revived company, the
Registrar may require as a condition of its revival that the revived company
does not carry on business, or, that it changes its name immediately after it is
revived.187
The Bye-Laws
The bye-laws are the internal regulations which govern the management of a
company incorporated under any of the articles of incorporation Companies
Acts, except under the Jamaican Act. Broadly speaking, the bye-laws are
equivalent to the articles of association under the old Companies Acts.
However, whereas the articles of association were required to be filed with the
Registrar as an incorporation document and were therefore public documents,
there is no such requirement in respect of the bye-laws. Thus the bye-laws are
not public documents, and under all the relevant Acts are merely required to
be kept at the company’s registered office as part of the company’s records.188
Even though not required to be registered, the bye-laws may have
important legal consequences for the operation of the company. For instance,
breach of the bye-laws may be the basis of a shareholder remedy under the
Acts189 and the alteration or modification of the articles of incorporation is
dealt with in the Acts under the provisions dealing with fundamental company
changes.190 Understandably, therefore, model general bye-laws for companies
incorporated under the Acts and model general bye-laws for non-profit
companies incorporated under the Acts are provided in the Companies
Regulations.
The Jamaican Act does not make any provision for bye-laws. Instead, that
Act sets out forms in Tables A, B, C and D in the First Schedule to the Act.
Table A sets out the articles for management of a company limited by shares;
Table B is the form of articles of a company limited by guarantee, and not
having a share capital; Table C is the form of articles of incorporation of a
company limited by guarantee, and having a share capital; and Table D is the
form of articles of incorporation of an unlimited company having a share
capital. These forms contain the rules for the internal regulation of the various
types of companies incorporated under that Act. These rules form part of the
articles of incorporation which are required to be registered.191
Section 8(6) of the Jamaican Act expressly provides that the form of articles
‘may’ be in accordance with the forms set out in Tables A, B, C, and D. Section
8(1), in the meantime, mandates what must be set out in the articles and this
does not include any regulations for the internal management of the company.
A question raised by these two subsections is whether it is at all necessary for
a company to have written internal regulations governing its management. It
is submitted that, on a proper interpretation of the Jamaican Companies Act,
and in particular section 4(3) of that Act,192 it is not so necessary even though
corporate law practice in Jamaica is to treat it as necessary.
Legal Status of Articles of Incorporation
As has been seen, the articles of incorporation constitute the basic corporate
constitutional document in the articles of incorporation Acts. A question of
some interest is this: what is the legal status of articles of incorporation after
registration?
It is submitted that the answer to this question is different under articles of
incorporation Acts other than under the Jamaica Act. Accordingly, answer to
the question will be dealt with, first, in respect of incorporation of articles Acts
other than the Jamaican Act and, second, in respect of the Jamaican Act.
Articles of Incorporation Acts other than the Jamaican Act
None of the articles of incorporation Acts, except the Jamaican Act, ascribes
any special legal status to the articles of incorporation after registration. Under
these Acts, the enforcement of the matters set out in the articles of
incorporation is dealt within the general remedial provision on compliance
and restraining orders. The remedy available under this provision is for a
complainant or creditor to apply to the court for an order directing any
director, officer, agent, receiver, receiver-manager or liquidator of a company
to comply with, or restraining any of these persons from acting in breach of,
any provisions of the Acts, regulations, articles, bye-laws or unanimous
shareholder agreement.193 Under these Acts then, the legal significance of
articles of incorporation after registration is that they constitute a basis for
claiming the remedies provided for in these Acts.

Articles of incorporation constitute a contract
The Jamaican Act expressly ascribes special legal status to the articles of
incorporation after registration. Section 19(1) of that Act, (which is almost
identical to section 11 of the Bahamian Act, section 16(1) of the Belizean Act
and section 10(1) of the St Christopher/Nevis Act), provides as follows:194
Subject to the provisions of this Act, the articles shall, when registered, bind the company and the
members thereof to the same extent as if they respectively had been signed and sealed by each member,
and contained covenants on the part of each member to observe all the provisions of the articles.
The origins of this provision (as is the case in the Bahamas, Belize and St
Christopher/Nevis), which constitute the articles of incorporation a contract,
can be traced back to the UK 1844 Joint Stock Companies Act.195 The nature of
the statutory contract created by section 19(1) has over time been extensively
analysed in the cases and by legal commentators. The interpretation of section
19(1) can, therefore, benefit from the principles which have emerged from this
analysis.
Nature of the contract
The first issue that arises in relation to section 19(1) is this: what is the nature
of the contract created by that subsection? In the English Court of Appeal case
of Bratton Seymour Services Co Ltd v Oxborough,196 the contract created by a
section in pari materia197 with section 19(1) was described as a statutory
contract with its own distinctive features. The distinctive features of the
statutory contract derive from the fact that the articles of incorporation after
registration become a public document intended to provide critical
information on the company to investors and creditors. The distinctive rules
applied to statutory contracts are therefore designed to ensure that the articles
are not treated as having a content substantially different from what appears
in the registered documents on which investors and creditors must rely.
One of the distinctive feature of the section 19(1) contract is that, unlike an
ordinary contract, it owes its binding force not to the agreement of the
company and its shareholders, but to the edict of the statute. One consequence
of this is that the section 19(1) contract can be varied unilaterally by the
company. This follows from the fact that section 19(1) expressly provides that
it is ‘subject to the provisions of the Act’. These provisions include section 10,
which empowers the company unilaterally to alter the contract by special
resolution. It is worth observing here, though, that any such alteration must be
registered in accordance with the Act,198 thereby protecting investors’ and
creditors’ right to accurate information on the company.
Another distinctive feature of the section 19(1) contract is that, as Steyn LJ
opined in Bratton Seymour Services Co Ltd v Oxborough,199 it is ‘not defeasible
on the ground of misrepresentation, common law mistake, mistake in equity,
undue influence or duress’. Consistent with this view, it was held in that case
that the remedy of rectification on the grounds of mistake was not a remedy
available to rectify the articles. Indeed, it is generally accepted that the only
remedies available for breach of the articles are injunctions and declarations.200
This treatment of the statutory contract clearly supports the policy of ensuring
the integrity of the information appearing in the company’s articles as
registered on which the investing public relies.
Enforcement of the contract
A second question which may arise in relation to the section 19(1) contract is
who can enforce the contract? In answering this question, the cases have
distinguished between enforcement among members of the company inter se,
enforcement by the company against members, enforcement by members
against the company, enforcement by outsiders and enforcement of outsiders’
rights.
Enforcement among members inter se

Since the English case of Rayfield v Hands,201 it is fairly well settled that the
contract created by section 19(1) is enforceable among members inter se.
Before this case, there was some conflict in the authorities on the law on this
point. Thus, for instance, dicta in the dissenting judgment of Lord Herschell in
the English House of Lords’ decision in Welton v Saffery202 suggested that all
actions in respect of the statutory contract had to be enforced through the
company. On the other hand, Stirling J in Wood v Odessa Waterworks Co203
supported the view that the articles took effect between each individual
shareholder and each other even though the matter before Stirling J in that
case was an application by shareholders for an injunction against the company
and its directors.
The view of the law expressed by Stirling J in Wood v Odessa Waterworks
Co204 was accepted and applied by Vaisey J in the case of Rayfield v Hands.205
In this case, the articles of a private company provided that any member
intending to transfer his shares should inform the directors who should take
the shares equally between them at fair value. A member gave notice but the
directors refused to purchase. Vaisey J, adopting a commercial construction of
the articles, held that the reference to directors was a reference to them as
members and that consequently the articles were directly enforceable by the
member against them.
Enforcement by company against member
The articles of incorporation constitute a contract between the company and

each member and may be enforced by the company against each member.
This principle is firmly established and its operation is well illustrated by the
case of Hickman v Romney Marsh Sheepbreeders Assoc206 the leading authority
on this principle. In that case, the articles of association provided for reference
of disputes between members and the company to arbitration. The plaintiff
brought an action against the company in connection with his expulsion from
the company. Astbury J held that the company was entitled to have the action
stayed because the articles amounted to a contract between the company and
the members and that as the articles referred such matters to arbitration, the
plaintiff was contractually bound to refer the matter to arbitration.
Enforcement by member against company
It is to be noted that, in Hickman’s Case, it was the company which was

allowed to enforce articles against the member. Pender v Lushington207 is a
case where the member was held to be able to enforce the articles against the
company. In this case, the articles limited a shareholder’s vote at a general
meeting to 100 in all. Certain shareholders before a meeting transferred shares
to nominees to increase their voting power. The chairman ruled the latter out
of order and the plaintiff’s votes were rejected on this ground. It was held that
the plaintiff was entitled to an injunction against the directors because under
the articles he had a right to have his votes counted. Even though the action
was against the directors and the company was joined as a co-defendant, the
claim appears, in substance, to be against the company.
Enforcement by ‘outsiders’
It is well settled as an overriding principle that the articles of incorporation

have contractual effect only in so far as they confer rights or obligations on a
member in his capacity as a member, or in other words, qua member. This
principle is also expressed as the rule that the articles do not constitute a
contract in respect of what is termed ‘outsider-rights’, that is, rights pertaining
to some capacity other than that of member.
In Hickman’s Case, Astbury J stated this principle as follows:208
An outsider to whom rights purport to be given by the articles in his capacity as an outsider, whether he is
or subsequently becomes a member, cannot sue on those articles treating them as contracts between
himself and the company to enforce those rights … [N]o right merely purporting to be given by an article
to a person, whether a member or not, in any capacity other than that of a member, as, for instance, as
solicitor, promoter, director, can be enforced against the company …
The English Court of Appeal decision in Beattie v E & F Beattie Ltd,209 where
there was a dispute between a director and the company, illustrates the
operation of this principle. The director in this case sought to have the dispute
referred to arbitration under one of the articles which provided that disputes
between the company and its members be referred to arbitration. The Court
of Appeal regarded this as a dispute qua director and not qua member. It
therefore applied the principle that the articles are only contractually binding
on a member qua member and refused the claim.
Another case which applies the principle is Eley v Positive Government
Security Life Assurance Ltd.210 In this case, articles provided that Eley, the
plaintiff, should be the company’s solicitor. It was held that Eley, who was in
fact also a member, could not rely directly on the articles as a contract to
enforce his right to be solicitor since the articles concerned him in his capacity
as an outsider, not qua member.
Even though it is well-settled, then, that outsider rights in the articles cannot
themselves constitute enforceable terms of the section 19(1) contract, such
rights in the articles may be expressly or tacitly incorporated into an ordinary
contract between the company and an outsider. Thus, in Re New British Iron
Co ex p Beckwith211 where directors acted for the company without an express
contract, it was held that the court would infer a contract intended to be on
the same terms of the articles as regards the director’s tenure and
remuneration.
Suit by member in personal capacity to restrain a breach
One issue which has not been settled in the case law is whether a member can
sue in his personal capacity, as opposed to suing in the name of the company,
despite the rule in Foss v Harbottle, to restrain a breach of the articles, even if
indirectly, that has the effect of enforcing outsider rights. Lord Wedderburn, in
a seminal article,212 relies mainly on the English House of Lords case of Quinn
& Axtens Ltd v Salmon213 to argue that a member has such a right.214
The facts of this case are that under Article 75 of the articles of Quin &
Axtens Ltd, the business of the company was to be managed by the directors
‘subject to such regulations (being not inconsistent with the provisions of the
articles) as may be prescribed by the company in general meeting’. Article 80
provided that no resolution of the directors on certain important matters
would be valid if either of two named managing directors voted against the
resolution. The plaintiff, one of the two managing directors, voted against such
a resolution to acquire and let premises but the company purported to ratify
the resolution by a simple majority. The plaintiff, therefore, brought an action
against the company and the directors involved for an injunction restraining
them from acting on the resolution. The House of Lords, affirming the decision
of the Court of Appeal, held that he could obtain the injunction.
Goldberg, in a very persuasive article, ‘The Enforcement of Outsider
Rights’,215 argued that this case does not support the broad principle stated by
Wedderburn, but rather a much narrower principle, namely, that:
A member of a company has under s. 20(1) of the Act a contractual right to have the affairs of the
company conducted by the particular organ of the company specified in the Act or the company’s
memorandum or articles … even if that may indirectly lead to the enforcement of an outsider’s rights.216
Goldberg’s thesis has been criticised as not offering a satisfactory explanation

as to why a shareholder’s right to enforce the contract should be qualified in
this way nor why the clear wording of section 19(1) should be so limited. GN
Prentice proposes the following answer:217
the terms of the memorandum and articles of the company which bind the company contractually to the
members are only those terms which of necessity must affect and can only affect each and every member
regardless of his individual capacity … the terms of the contract being those provisions which form the
basic constitution of the company and define the circumstances and limits of the company’s permissible
actions, together with any terms implied by reason of the general law relating to the functioning of the
company.
Despite these powerful academic arguments and the House of Lords’ decision
in Quin & Axten Ltd v Salmon,218 the principle which seems firmly established
in the cases is that members may only enforce the articles as they affect rights
and obligations between the company and the members acting in their
capacity as members.219
Section 19(1) and the ‘complainant’s remedies’ in section
212(1) and section 213A(1)
As is discussed in Chapter 17, section 212(1) and section 213A(1) respectively

confer rights on ‘complainants’ (which is defined to include shareholders as
well as some outsiders) to derivative action and oppression remedies. It may
very well be that the availability of these remedies which are discussed fully in
Chapter 16, render otiose the difficulties just discussed in interpreting section
19(1).
Articles of Continuance
The present Companies Acts in Anguilla, Antigua, Barbados, Dominica,
Grenada, Guyana, Jamaica, Montserrat, St Lucia, St Vincent and Trinidad
provide that companies which operated under the Companies Acts which
these Acts repealed and replaced (former-Act companies) must apply to the
Registrar for a certificate of continuance under the new Acts.220 The Acts also
make extensive provision for the legal status of all corporate instruments of a
former-Act company lawfully in force before the commencement of the
Acts.221
In Boyea et al v Eastern Caribbean Flour Mills Ltd,222 Alleyne J in the St
Vincent and Grenadines High Court appears to have interpreted these
provisions as also continuing the application of the provisions of the former
Acts to companies continued under the Acts. This case concerned a
preliminary point as to what was the effect of Article 138 of the Articles of
Association of the defendant company, a company incorporated under the
former Act and continued under the present Act. Alleyne J opined:
Section 14(1) of the Companies Act, CAP. 6 Title XXIII of the 1966 Revised Laws of St Vincent provides
that the articles of association of a company:-‘shall bind the company and the members thereof to the same
extent as if each member had subscribed his name and affixed his seal thereto, and there were in such
articles contained a covenant on the part of himself, his heirs, executors and administrators, to conform to
all regulations contained in such articles’.
This provision is continued in effect with respect to the defendant company by section 360223 of the
Companies Act no 8 of 1994.224
On this reasoning, Alleyne J thought that the legal effect of Article 138 in the
defendant company’s articles was to be found in the cases discussing section 20
of the English Companies Act.
It is submitted that this reasoning is difficult to understand. Section 360225
does not ‘in effect’ or in any other way continue any provision of the former
Act. Section 360 does nothing more than presume the corporate instruments of
former-Act companies, and cancellations, suspensions, proceedings, acts,
registrations and things lawfully done under the provisions of the former Act
to have been lawfully done under the new Act and to continue in effect as
though they had been lawfully done under the new Act.
Another issue which has been raised in respect of companies continued
under the new Acts is this: what is the legal status of conduct and acts which
occurred prior to continuance in determining the availability of rights and
remedies provided for under the present Acts but which were not available
under the former Act? This issue arose in the Trinidad and Tobago High Court
case of Henry et al v National Flour Mills Ltd,226 where the question was
whether the oppression remedy provided for in the 1995 Act was available
where the oppressive conduct took place prior to the continuance of the
company under that Act. On this question, Bereaux J opined as follows:
It seems to me that one of the purposes of providing for continuance under the 1995 Act is to draw a clear
distinction between companies which are governed by the old Companies Ordinance and companies which
are not. Companies which are not continued under the new Act continue to be governed by the old
Ordinance with the result that the relief and remedies of the new Act are not available to them and any
oppressive acts then occurring cannot subsequently be the subject of relief when the company is continued
under the new Act. However, in my judgment, previous acts which occurred prior to its continuance may
be taken into account by the Court in concluding whether any subsequent action may amount to
oppression under the 1995 Act.227
It is submitted that on any proper interpretation of the continuance provisions

this is an entirely plausible view of the law.
Conclusion
This chapter reveals that, basically, there are two categories of corporate
incorporation to be found in the Companies Acts in the Commonwealth
Caribbean, namely ‘articles of incorporation’ incorporation and ‘memorandum
of association and articles of association’ incorporation. The articles of
incorporation method of incorporation, which requires a single document of
incorporation, is provided for under the Acts in Anguilla, Antigua, Barbados,
Dominica, Grenada, Guyana, Jamaica, Montserrat, St Lucia, St Vincent and
Trinidad. This method represents a substantial reform of the traditional
memorandum of association and articles of association method, or two-
document method, which still obtains under the Acts in the Bahamas, Belize
and St Christopher/Nevis. The reforms adopted in the articles of incorporation
method have resulted in a significantly simplified method of incorporation
compared with the traditional memorandum of association and articles of
association method. Indeed, it may be noted that under the most recent
Companies Act in the UK, the Companies Act 2006, the two-document
method has been replaced by a single short prescribed-document method: a
memorandum of association.228
Notes
1 See Ang Pt 2 Div 1; Ant Pt I Div A; Bah Pt II ss 3–21; B’dos Pt I Div A; Bel Pt I ss 4–13; Dom Pt I Div A;
Gren Pt I Div A; Guy Pt II Div A; J’ca Pt I ss 3, 8–18; Mont Pt I Div A; St C/N Pt II; St L Pt I Div A; St V
Pt I Div A; T’dad Pt III Div 1.
2 See Ang s 5(1); Ant s 4(1); Dom s 4(1); Gren s 4(1); Guy s 4(1); J’ca s 3(1); Mont s 4(1); St L s 4(1); St V s 4(1);
T’dad s 8(1).
3 See Ang s 5(1); Ant s 4(1); Dom s 4(1); Gren s 4(1); Guy s 4(1); J’ca s 3(1); Mont s 4(1); St L s 4(1); St V s 4(1);
T’dad s 8(1).
4 See Ang s 1; Ant s 543(1); Bah s 2; B’dos s 2(1); Bel s 2; Dom s 543(1); Gren s 543(1); Guy s 1(b); J’ca s 2(1);
Mont s 543; St C/N s 2; St L s 543(1); St V s 543(1); T’dad s 4.
5 See Ang: no corresponding provision; Ant s 3; Bah: no corresponding provision; Bel s 3(2); Dom s 3; Gren s
3; Guy s 3; J’ca s 378 worded slightly differently; Mont s 3; St C/N: no corresponding provision; St L s 3; St
V s 3 worded slightly differently; T’dad s 3 worded differently and the numerical limitation is ten.
6 See Ang s 9; Ant s 8; Bah s 16(1); Bel s 16(1): worded differently; Dom s 8; Gren s 8; Guy s 8(1); J’ca s 12(1);
Mont s 8; St C/N s 9(2)(b); St L s 8; St V s 8; T’dad s 12.
7 Ang: no corresponding provision; Ant s 509(1); Bah: no corresponding provision; Bel: no corresponding
provision; Dom s 509(1); Gren s 509(1); Guy s 485(1); J’ca: no corresponding provision; Mont s 509(1); St L s
509(1); St V s 509(1); T’dad s 487(1).
8 See Ang s 9; Ant s 8; Bah s 16(1); Bel s 16(1): worded differently; Dom s 8; Gren s 8; Guy s 8(1); J’ca s 12(1);
Mont s 8; St C/N s 9(2)(b); St L s 8; St V s 8; T’dad s 12.
9 See Ant s 8: worded differently; Bah s 16(1); Bel s 17(1): worded differently; Dom s 8; Gren s 8; Guy s 8(1);
J’ca s 13(1): worded differently; Mont s 8; St C/N s 9(4) worded differently; St L s 8; St V s 8; T’dad s 12.
10 Ang s 9.
11 Bel s 17(1).
12 See J’ca ss 11–14.
13 St C/N s 9(4).
14 See Ang: no corresponding provision; Ant s 509(1); Dom s 509(1); Bah: no corresponding provision; Bel: no
corresponding provision; Gren s 509(1); Guy s 485(1); J’ca: no corresponding provision; Mont s 509(1); St
C/N: no corresponding provision; St L s 509(1); St V s 509(1); T’dad s 487(1).
15 Ang no corresponding provision; Ant s 509(1)(a); Bah: no corresponding provision; Bel: no corresponding
provision; Dom s 509(1)(a); Gren s 509(1)(a); Guy s 485(1)(a); J’ca: no corresponding provision; Mont s
509(1)(a); St C/N: no corresponding provision; St L s 509(1)(a); St V s 509(1)(a); T’dad s 487(1)(a).
16 Ang: no corresponding provision; Ant s 509(1)(b); Bah: no corresponding provision; Bel: no corresponding
provision; Dom s 509(1)(b); Gren s 509(1)(b); Guy s 485(1)(b); J’ca: no corresponding provision; Mont s
509(1)(b); St C/N: no corresponding provision; St L s 509(1)(b); St V s 509(1)(b); T’dad s 487(1)(b).
17 Ang: no corresponding provision; Ant s 509(1)(c); Bah: no corresponding provision; Bel: no corresponding
provision; Dom s 509(1)(c); Gren s 509(1)(c); Guy s 485(1)(c); J’ca: no corresponding provision; Mont s
509(1); St C/N: no corresponding provision; St L s 509(1)(c); St V s 509(1)(c); T’dad s 487(1)(c).
18 Ang: no corresponding provision; Ant s 509(1)(d); Bah: no corresponding provision; Bel: no corresponding
provision; Dom s 509(1)(d); Gren s 509(1)(d); Guy s 485(1)(d); J’ca: no corresponding provision; Mont s
509(1)(d); St C/N: no corresponding provision; St L s 509(1)(d); St V s 509(1)(d); T’dad s 487(1)(d).
19 Ang: no corresponding provision; Ant s 509(1)(e); Bah: no corresponding provision; Bel: no corresponding
provision; Dom s 509(1)(e); Gren s 509(1)(e); Guy s 485(1)(e); J’ca: no corresponding provision; Mont s
509(1)(e); St C/N: no corresponding provision; St L s 509(1)(e); St V s 509(1)(e); T’dad s 487(1)(e).
20 Ang: no corresponding provision; Ant s 509(1)(f); Bah: no corresponding provision; Bel: no corresponding
provision; Dom s 509(1)(f); Gren s 509(1)(f); Guy s 485(1)(f); J’ca: no corresponding provision; Mont s 509(1)
(f); St C/N: no corresponding provision; St L s 509(1)(f); St V s 509(1)(f); T’dad s 487(1)(f).
21 Ang: no corresponding provision; Ant s 509(1)(a); Bah: no corresponding provision; Bel: no corresponding
provision; Dom s 509(1)(a); Gren s 509(1)(a); Guy s 485(1)(a); J’ca: no corresponding provision; Mont s
509(1)(a); St C/N: no corresponding provision; St L s 509(1)(a); St V s 509(1)(a); T’dad s 487(1)(a).
22 Ang s 17(1); Ant s 17(1); Bah s 24(1); Bel: no provision; B’dos s 17(1); Dom s 17(1); Gren s 17(1); Guy s 16(1);
J’ca s 4(1); Mont s 17(1); St C/N s 18(1); St L s 17(1); St V 17(1); T’dad s 17(1).
23 [1914] 3 KB 1161.
24 [1914] 3 KB 1161, 1165–1167 Eng KB.
25 [1931] 2 KB 197 Eng CA. See also R v Registrar of Companies, ex p AG [1991] BCLC 476.
26 Section 1(1) of the English Companies Act 1862.
27 Above, text accompanying n 22.
28 See Ang s 9; Ant s 8; Bah s 16(1); B’dos s 8; Bel s 16(1); Dom s 8; Gren s 8; Guy s 8(1); J’ca s 12(1); Mont s 8;
St C/N s 9(1); St L s 8; St V s 8; T’dad s 12.
29 R v Regisrar of Joint stock Companies, ex p More [1931] 2 KB 197 Eng CA; R v Registrar of Companies, ex
p Bowen [1914] 3 KB 1161.
30 See Ang s 9; Ant s 8; Bah s 16(1); B’dos s 8; Dom s 8; Gren s 8; Guy s 8(1); Mont s 8; St C/N s 9(4); St L s 8;
St V s 8; T’dad s 12. Section 17(1) of the Belize Act and s 13(1) of the Jamaica Act provide: ‘A certificate of
incorporation given by the Registrar in respect of any association shall be conclusive evidence that all the
requirements of this Act in respect of registration and of matters precedent and incidental have been
complied with, and that the association is a company authorised to be registered and duly registered under
this Act.’
31 [1924] AC 958, Eng HL.
32 See Ang s 9; Ant s 8; Bah s 16(1); B’dos s 8; Bel s 17(1); Dom s 8; Gren s 8; Guy s 8(1); J’ca s 13(1); Mont s 8;
St C/N s 9(4); St L s 8; St V s 8; T’dad s 12.
33 (1978) 3 BLR 204 Alta CA.
34 [1917] AC 406 Eng HL.
35 [1991] BCLC 476.
36 See Ang s 9; Ant s 8; Bah s 16(1); B’dos s 8; Dom s 8; Gren s 8; Guy s 8(1); J’ca s 12(1); Mont s 8; St C/N s
9(1); St L s 8; St V s 8; T’dad s 12.
37 See Ang s 10; Ant s 9; Bah s 16(2); B’dos s 9; Dom s 9; Gren s 9; Guy s 8(2); J’ca s 12(2); Mont s 9; St C/N s
9(5); St L s 9; St V s 9; T’dad s 13.
38 (1978) 2 BLR 204, Alta CA.
39 Bah s 16(2); Bel s 16(2); J’ca s 12(2); St C/N s 9(5).
41 B’dos s 10.1(1).
42 B’dos s 10.1(1).
43 B’dos s 10.1(2).
44 Ang s 5(1); Ant s 4(1); B’dos s 4(1); Dom s 4(1); Gren s 4(1); Guy s 4(1); J’ca s 3(1); Mont s 4(1); St C/N s 4(1);
St L s 4(1); St V s 4(1); T’dad s 8(1). But note under s 3(1) of the Bahamas Act and s 4 of the Belize Act there
is a numerical limitation.
45 Ang s 5(2); Ant s 4(2); Bah s 3(2); B’dos s 4(2); Dom s 4(2); Gren s 4(2); Guy s 4(2); Mont s 4(2); St L s 4(2); St
V s 4(2); T’dad s 8(2).
46 Ang s 5(2)(a); Ant s 4(2)(a); Bah s 3(2)(a): wording is ‘less than the age of majority’; B’dos s 4(2)(a); Dom s
4(2)(a); Gren s 4(2)(a); Guy s 4(2)(a); Mont s 4(2)(a); St L s 4(2)(a); St V s 4(2)(a); T’dad s 8(2)(a).
47 Ang s 5(2)(b); Ant s 4(2)(b); Bah s 3(2)(b); B’dos s 4(2)(b); Dom s 4(2)(b); Gren s 4(2)(b); Guy s 4(2)(b); Mont s
4(2)(b); St L s 4(2)(b); St V s 4(2)(b); T’dad s 8(2)(b): ‘mentally ill within the meaning of the Mental Health
Act’.
48 Ang s 5(2)(c); Ant s 4(2)(c); B’dos s 4(2)(c); Dom s 4(2)(c); Gren s 4(2)(c); Guy s 4(2); Mont s 4(2)(c); St L s 4(2)
(c); St V s 4(2)(c).
49 Bah s 3(2)(c); T’dad s 8(2)(c).
50 See B’dos Bankruptcy and Insolvency Act 2001; St V Bankruptcy and Insolvency Act 2007; T’dad
Bankruptcy and Insolvency Act 2007.
51 Ang s 5(1); Ant s 4(1); B’dos s 4(1); Dom s 4(1); Gren s 4(1); Guy s 4(1); Mont s 4(1); St L s 4(1); St V s 4(1);
T’dad s 8(1).
52 Ant s 7; Bar s 7; Dom s 7; Gren s 7; Guy s 7; Mont s 7; St L s 7; St V s 7; T’dad s 11.
53 Ang s 68(1); Ant s 69(1); B’dos s 66(1); Dom s 69(1); Gren s 69(1); Guy s 67(1); Mont s 69(1); St L s 69(1); St V
s 69(1); T’dad s 71(1).
54 Ang s 68(2); Ant s 69(2); B’dos s 66(2); Dom s 69(2); Gren s 69(2); Guy s 188(1); Mont s 69(2); St L s 69(2); St
V s 69(2); T’dad s 71(2).
55 Ang s 68(3); Ant s 69(3); B’dos s 66(3); Dom s 69(3); Gren s 69(3); Guy s 4(3); Mont s 69(3); St L s 69(3); St V s
69(3); T’dad s 71(3).
56 J’ca s 7.
57 Ang s 7; Ant s 5; B’dos s 5; Dom s 5; Gren s 5; Guy s 5; J’ca s 8; Mont s 5; St L s 5; St V s 5; T’dad s 9.
58 Ang s 7(2); Ant s 5(2); B’dos s 5(2); Dom s 5(2); Gren s 5(2); Guy s 5(2); J’ca s 8(3); Mont s 5(2); St L s 5(2); St
V s 5(2); T’dad s 9(2).
59 Ang s 7(1); Ant s 5(1); B’dos s 5(1); Dom s 5(1); Gren s 5(1); Guy s 5(1); Mont s 5(1); St L s 5(1); St V s 5(1);
T’dad s 9(1).
60 As to these, see J’ca s 25.
61 J’ca s 8(5).
62 Ang s 7(1)(a); Ant s 5(1)(a); B’dos s 5(1)(a); Dom s 5(1)(a); Gren s 5(1)(a); Guy s 5(1); Mont s 5(1)(a); St L s 5(1)
(a); St V s 5(1)(a); T’dad s 9(1)(a).
63 J’ca s 8(1)(a).
64 Guy s 5(1)(b).
65 J’ca s 8(I)(b).
66 Ang s 7(1)(b).
67 See below, text accompanying nn. 102–105.
68 Ang s 7(1)(e); Ant s 5(1)(b); B’dos s 5(1)(b); Dom s 5(1)(b); Gren s 5(1)(b); Guy s 5(1)(b); Mont s 5(1)(b); St L s
5(1)(b); St V s 5(1)(b); T’dad s 9(1)(b).
69 Ang s 7(1)(e)(i); Ant s 5(1)(b)(i); B’dos s 5(1)(b)(i); Dom s 5(1)(b)(i); Gren s 5(1)(b)(i); Guy s 5(1)(b)(i); Mont s
5(1)(b)(i); St L s 5(1)(b)(i); St V s 5(1)(b)(i); T’dad s 9(1)(b)(i).
70 Ang s 7(1)(e)(ii); Ant s 5(1)(b)(ii); B’dos s 5(1)(b)(ii); Dom s 5(1)(b)(ii); Gren s 5(1)(b)(ii); Guy s 5(1)(b)(ii);
Mont s 5(1)(b)(ii); St L s 5(1)(b)(ii); St V s 5(1)(b)(ii); T’dad s 9(1)(b)(ii).
71 Ang s 7(1)(f); Ant s 5(1)(c); B’dos s 5(1)(c); Dom s 5(1)(c); Gren s 5(1)(c); Guy s 5(1)(c); Mont s 5(1)(c); St L s
5(1)(c); St V s 5(1)(c); T’dad s 9(1)(c). See also Mathers v Mathers (1989) 4 BLR 228, affd (1989) 90 NSR (2d)
354 NS CA.
72 See Greenhalgh v Mallard [1943] 2 All ER 234 Eng CA.
73 Guy s 5(1)(d).
74 T’dad s 9(1)(da).
75 J’ca s 8(1)(c).
76 J’ca s 8(1)(d).
77 See above.
78 Ang s 7(1)(c).
79 Ang s 7(1)(d).
80 Ang s 7(1)(i).
81 Ang s 7(1)(ii).
82 J’ca s 9(1).
83 J’ca s 9(1).
84 T’dad s 9(1)(b).
85 T’dad s 9(1).
86 Ang s 7(1)(g); Ant s 5(1)(d); B’dos s 5(1)(d); Dom s 5(1)(d); Gren s 5(1)(d); Guy s 5(1)(d); J’ca s 8(1)(e); Mont s
87 Ang s 7(1)(g)(i).
88 Ang s 7(1)(g) (ii).
89 T’dad s 9(1)(db).
90 Ang s 7(1)(h); Ant s 5(1)(e); B’dos s 5(1)(e); Dom s 5(1)(e); Gren s 5(1)(e); Guy s 5(1)(e); J’ca s 8(1)(f); Mont s
5(1)(e); St L s 5(1)(e); St V s 5(1)(e); T’dad s 9(1)(f).
V s 5(2); T’dad s 9(2).
V s 5(1); T’dad s 9(1).
93 J’ca s 8(2).
94 J’ca s 8(2)(a).
95 J’ca s 8(2)(b).
96 J’ca s 8(2)(c).
97 J’ca s 8(2)(d).
98 Ang s 68(1); Ant s 69(1); B’dos s 66(1); Dom s 69(1); Gren s 69(1); Guy s 67(1)(a); Mont s 69(1); St L s 69(1); St
V s 69(1); T’dad s 71(1).
s 69(1); T’dad s 71(1).
100 Ant s 503(1)(a); B’dos s 404(2)(a); Dom s 503(1)(a); Gren s 503(1)(a); Guy s 67(2); Mont s 503(1)(a); St L s 503(1)
(a); St V s 503(1)(a); T’dad s 480(1)(a).
101 Ant s 503(1)(a); B’dos s 404(2)(a); Dom s 503(1)(a); Gren s 503(1)(a); Guy s 479(1)(a); Mont 503(1)(a); St L s
503(1)(a); St V s 503(1)(a); T’dad s 480(1)(a).
176(1); T’dad s 176(1).
176(1); T’dad s 176(1).
503(1)(a); St V s 503(1)(a); T’dad s 480(1)(a).
503(1)(a); St V s 503(1)(a); T’dad s 480(1)(a).
106 Ant s 4(3); B’dos s 4(3); Dom s 4(3); Gren s 4(3); Guy s 4(3); Mont s 4(3); St L s 4(3); St V s 4(3); T’dad s 8(3).
107 Ant s 4(3); B’dos s 4(3); Dom s 4(3); Gren s 4(3); Guy s 4(3); Mont s 4(3); St L s 4(3); St V s 4(3); T’dad s 8(3).
108 J’ca s 7.
109 J’ca s 7(a).
110 J’ca s 7(b).
111 Bah s 3(1); Bel s 4; St C/N s 9(1).
112 Bah s 10(1).
113 Bel s 10(1).
114 Bel s 11.
115 Bel s 10(1).
116 St C/N s 6(1).
117 St C/N s 7(1).
118 St C/N s 7(1).
119 St C/N s 6(1).
120 Windows Ltd v Win-Doors Ltd (Unreported Suit No EW 170 of 1984 J’ca SC) per Harrison J.
121 Ang ss 11–15, 244–248; Ant ss 10–15, 514–517; Bah ss 12–15; B’dos ss 10–15, 415–419; Bel s 9; Dom ss 10–15,
514–517; Gren ss 10–15, 514–517; Guy ss 9–14, 490–494; J’ca ss 15–18; Mont ss 10–15, 514–517; St C/N ss 13–
14; St L ss 10–15, 514–517; St V ss 10–15, 514–517; T’dad ss 14–19, 492–493.
122 Ang s 244; Ant s 514; Bah s 15(2): name may be reserved for six weeks; B’dos s 415; Dom s 514; Gren s 513;
Guy s 490: name may be reserved for twelve months; J’ca s 18; Mont s 514; St L s 514; St V s 514; T’dad s
492.
123 Ang s 244; Ant s 514; Bah s 15(2): name may be reserved for six weeks; B’dos s 415; Dom s 514; Gren s 513;
Guy s 490: name may be reserved for twelve months; J’ca s 18; Mont s 514; St L s 514; St V s 514; T’dad s
492.
503(1)(a); St V s 503(1)(a); T’dad s 481(1)(a).
125 Ang s 12(a); Ant s 11(a); Bah s 12(a); B’dos s 11(a); Bel s 9(1); Dom s 11(a); Gren s 11(a); Guy s 10(a); J’ca s
15(1); Mont s 11(a); St C/N s 13(3); St L s 11(a); St V s 11(a); T’dad s 15(a).
126 Ang s 12(b); Ant s 11(b); Bah s 12(a); B’dos s 11(b); Dom s 11(b); Gren s 11(b); Guy s 10(b); Mont s 11(b); St L
s 11(b); St V s 11(b); T’dad s 15(b).
127 Ang s 246; Ant s 516; B’dos s 417; Dom s 516; Gren s 516; Guy s 492; Mont s 516; St L s 516; St V s 516.
128 Ang s 246; Ant s 515; Dom s 515; B’dos s 416; Gren s 515; Guy s 491; Mont s 515; St L s 515; St V s 515; T’dad
s 493.
129 T’dad s 493(a).
130 Ang s 246(a); Ant s 515(a); B’dos s 416(a); Dom s 515(a); Gren s 515(a); Guy s 491(a); Mont s 515(a); St L s
515(a); St V s 515(a); T’dad s 493(a).
515(a); St V s 515(a); T’dad s 493(a).
132 Ang s 246(a)(i); Ant s 515(a)(i); B’dos s 416(a)(i); Dom s 515(a)(i); Gren s 515(a)(i); Guy s 491(a)(i); Mont s
515(a)(i); St L s 515(a)(i); St V s 515(a)(i); T’dad s 493(a)(i).
133 Ang s 246(a)(ii); Ant s 515(a)(ii); B’dos s 416(a)(ii); Dom s 515(a)(ii); Gren s 515(a)(ii); Guy s 491(a)(ii); Mont s
515(a)(ii); St L s 515(a)(ii); St V s 515(a)(ii); T’dad s 493(a)(ii).
134 Ang s 246(b); Ant s 515(b); B’dos s 416(b); Dom s 515(b); Gren s 515(b); Guy s 491(b); Mont s 515(b); St L s
515(b); St V s 515(b); T’dad: no corresponding provision.
135 Ang s 246(c); Ant s 515(c); B’dos s 416(c); Dom s 515(c); Gren s 515(c); Guy s 491(c); Mont s 515(c); St L s
515(c); St V s 515(c); T’dad s 493(c).
136 Ang s 246(d); Ant s 515(d); B’dos s 416(d); Dom s 515(d); Gren s 515(d); Guy s 491(d); Mont s 515(d); St L s
515(d); St V s 515(d); T’dad: no corresponding provision.
137 Ang s 246(e); Ant s 515(e); B’dos s 416(e); Dom s 515(e); Gren s 515(e); Guy s 491(e); Mont s 515(e); St L s
515(e); St V s 515(e); T’dad s 493(e).
138 Ang s 246(f); Ant s 515(f); B’dos s 416(f); Dom s 515(f); Gren s 515(f); Guy s 491(f); Mont s 515(f); St L s
515(f); St V s 515(f); T’dad s 493(f).
139 See below, text accompanying nn 153–165.
140 T’dad s 493(b).
141 T’dad s 493(ba).
142 T’dad s 493(d).
143 T’dad s 493(f).
144 Bah s 12.
145 Bah s 12(1)(a).
146 Bah s 12(1)(b).
147 Bah s 12(1)(b)(i).
148 Bah s 12(1)(b)(ii).
149 Bah s 12(1)(b)(iii).
150 J’ca s 15(1); St C/N s 13(3).
151 J’ca s 15(1); St C/N s 13(3).
152 Bel s 9(1).
154 Ang s 246(a); Ant s 516(a); B’dos: corresponding provision repealed by Act no 9 of 1995; Dom s 516(a); Gren
s 516(a); Guy s 492(a); Mont s 516(a); St L s 516(a); St V s 516(a).
155 Ang s 246(a)(i); Ant s 516(a)(i); B’dos: corresponding provision repealed by Act no 9 of 1995; Dom s 516(a)
(i); Gren s 516(a)(i); Guy s 492(a)(i); Mont s 516(a)(i); St L s 516(a)(i); St V s 516(a)(i).
156 Ang s 246(a)(ii); Ant s 516(a)(ii); B’dos: corresponding provision repealed by Act no 9 of 1995; Dom s 516(a)
(ii); Gren s 516(a)(ii); Guy s 492(a)(ii); Mont s 516(a)(ii); St L s 516(a)(ii); St V s 516(a)(ii).
157 Ang s 246(a)(iii); Ant s 516(a)(iii); B’dos: corresponding provision repealed by Act no 9 of 1995; Dom s
516(a)(iii); Gren s 516(a)(iii); Guy s 492(a)(iii); Mont s 516(a)(iii); St L s 516(a)(iii); St V s 516(a)(iii).
158 Ang s 246(a); Ant s 516(a); B’dos: corresponding provision repealed by Act no 9 of 1995; Dom s 516(a); Gren
s 516(a); Guy s 492(a); Mont s 516(a); St L s 516(a); St V s 516(a).
159 Ang s 246(b)(i); Ant s 516(b)(i); B’dos s 417(b)(i); Dom s 516(b)(i); Gren s 516(b)(i); Guy s 492(b)(i); Mont s
516(b)(i); St L s 516(b)(i); St V s 516(b)(i).
160 Ang s 246(b)(ii); Ant s 516(b)(ii); B’dos s 417(b)(ii); Dom s 516(b)(ii); Gren s 516(b)(ii); Guy s 492(b)(ii); Mont
s 516(b)(ii); St L s 516(b)(ii); St V s 516(b)(ii).
161 Ang s 246(b)(iii); Ant s 516(b)(iii); B’dos s 417(b)(iii); Dom s 516(b)(iii); Gren s 516(b)(iii); Guy s 492(b)(iii);
Mont s 516(b)(iii); St L s 516(b)(iii); St V s 516(b)(iii).
162 Ang s 246(b)(iv); Ant s 516(b)(iv); B’dos s 417(b)(iv); Dom s 516(b)(iv); Gren s 516(b)(iv); Guy s 492(b)(iv);
Mont s 516(b)(iv); St L s 516(b)(iv); St V s 516(b)(iv).
163 Ang s 246(c); Ant s 516(c); B’dos s 417(c); Dom s 516(c); Gren s 516(c); Guy s 492(c); Mont s 516(c); St L s
516(c); St V s 516(c).
164 Ang s 246(d); Ant s 516(d); B’dos s 417(d); Dom s 516(d); Gren s 516(d); Guy s 492(d); Mont s 516(d); St L s
516(d); St V s 516(d).
165 Ang s 246(e); Ant s 516(e); B’dos: corresponding provision repealed by Act no 9 of 1995; Dom s 516(e); Gren
s 516(e); Guy s 492(e); Mont s 516(e); St L s 516(e); St V s 516(e).
166 Ang s 11(1); Ant s 10(1); Bah s 13; B’dos s 10(1); Dom s 10(1); Gren s 10(1); J’ca s 8(1)(a); Mont s 10(1); St C/N
s 13(1); St L s 10(1); St V s 10(1); T’dad s 14(1)(a).
167 Ang s 11(1); Ant s 10(1); Bah s 13; B’dos s 10(1); Dom s 10(1); Gren s 10(1); Mont s 10(1); St C/N s 13(1); St L
s 10(1); St V s 10(1).
168 Ang s 11(1); Ant s 10(1); Bah s 13; B’dos s 10(1); Dom s 10(1); Gren s 10(1); Guy s 9; Mont s 10(1); St C/N s
13(1); St L s 10(1); St V s 10(1).
169 Ang s 11(1); Ant s 10(1); Bah s 13; B’dos s 10(1); Dom s 10(1); Gren s 10(1); J’ca s 8(1)(a); Mont s 10(1); St C/N
s 13(1); St L s 10(1); St V s 10(1); T’dad s 14(1)(a). See Keele-Wilson Supermarket Ltd v Tops Inc (1983) 78
CPR (2d) 146 TM Opp Bd.
170 [1952] 2 All ER 21 Eng CA.
171 Ang s 13; Ant s 12; Bah s 12(2): worded differently; B’dos s 12; Bel s 9(2); Dom s 12; Gren s 12; Guy s 11; J’ca
s 15(2); Mont s 12; St L s 12; St V s 12; T’dad s 16. As to the general principles which are to guide the
Registrar in the exercise of this discretion see Dorset Seafoods Ltd v Dorset Fisheries Ltd (1987) 64 Nfld &
PEIR 234 Nfld TD, affd (1988) 69 Nfld & PEIR 105 Nfld CA.
172 Ang s 13(a); Ant s 12(a); B’dos s 12(a); Dom s 12(a); Gren s 12(a); Guy s 11(a); J’ca s 15(2); Mont s 12(a); St L s
12(a); St V s 12(a); T’dad s 16(a).
173 Ang s 13; Ant s 12(b); B’dos s 12(b); Dom s 12(b); Gren s 12(b); Guy s 11(b); J’ca s 15(2); Mont s 12(b); St L s
12(b); St V s 12(b); Trin s 16(b).
174 s 12(2).
175 St C/N s 15(1); J’ca s 15(3).
176 J’ca s 15(3).
177 (Unreported) Suit No 170 of 1984 J’ca SC.
178 Ang s 14(1) and (2); instead of a sixty-day limitation, the limitation is that stipulated by the Registrar; Ant s
14; Bah s 12(2); B’dos s 14; Dom s 14; Gren s 14; Guy s 13; Mont s 14; St L s 14; St V s 14; T’dad s 18.
179 Ang s 14(2); Ant s 15(1); Bah s 12(2); B’dos s 15(1); Dom s 15(1); Gren s 15(1); Guy s 14(1); Mont s 15(1); St L s
15(1); St V s 15(1); T’dad s 19(1): requires that the Registrar not only publishes the new name in the Gazette
but that he also publishes it in a daily newspaper.
180 Ang s 14(3); Ant s 15(2); Bah: no corresponding provision; B’dos s 15(2); Dom s 15(2); Gren s 15(2); Guy s
14(2); Mont s 15(2); St L s 15(2); St V s 15(2); T’dad s 19(2).
181 Ang s 14(1) and (2); Ant s 14; Bah: no corresponding provision; B’dos s 14; Dom s 14; Gren s 14; Guy s 13;
Mont s 14; St L s 14; St V s 14; T’dad s 18.
182 St C/N s 15(2); J’ca s 15(3).
183 J’ca s 15(4).
184 St C/N s 15(4); J’ca s 15(5).
185 Bel s 9(2).
186 B’dos s 419; Guy s 494; T’dad s 496.
187 B’dos s 419; Guy s 494; T’dad s 496.

188 Ang s 152(1)(a); Ant s 177(1)(a); B’dos s 170(1)(a); Dom s 177(1)(a); Gren s 177(1)(a); Guy s 189(1)(a); Mont s
189 As to this, see Chapter 17.
190 As to this see Chapter 25.
191 J’ca s 11.
192 This subsection reads: ‘It is not necessary for a bylaw to be passed to confer any particular power on a
company or its directors.’
193 Ang s 260; Ant s 248; Bah s 283; B’dos s 235; Dom s 248; Gren ss 248; Guy s 231; Mont s 248; St L s 248; St V
s 248; T’dad s 249. Discussed in Chapter 17.
194 Accordingly, the discussion here is applicable mutatis mutandi to those territories.
195 7 & 8 Vict. c. 110 & 111.
196 [1992] BCLC 693, 698 Eng CA.
197 s 14 Companies Act 1985(UK).
198 s 10(2).
199 [1992] BCLC 693, 698 Eng CA.
200 But see Moffat v Farquhar (1878) 7 Ch D 591 where Mallins V-C directed an inquiry as to damages.
201 [1960] Ch 1 Eng Ch D.
202 [1897] AC 299, 315 Eng HL.
203 (1889) 42 Ch D 636, 642 Eng Ch D.
204 (1889) 42 Ch D 636, 642 Eng Ch D.
205 [1960] Ch 1 Eng Ch D.
206 [1915] 1 Ch 881 Eng Ch D.
207 (1877) 6 Ch D 70 Eng Ch D.
208 [1915] 1 Ch 881, 897 and 900 Eng Ch D.
209 [1938] Ch 708 Eng CA.
210 (1876) 1 Ex D 88 Eng Ex D.

211 [1898] 1 Ch 324.
212 ‘Shareholders’ Rights and the Rule in Foss v Harbottle’ (1957) Camb LJ 19.
213 [1909] 1 Ch 311, Eng CA, affd [1909] AC 442, Eng HL.
214 For subsequent cases which have been cited as lending some support for his view, see Re H R Harmer Ltd
[1958] 3 All ER 689; Re Richmond Gate Property Co Ltd [1964] 3 All ER 936; Bamford v Bamford [1970] Ch
212; Breckland Group Holdings v London and Suffolk Properties [1989] BCLC 100; Guinness Plc v Saunders
[1990] 2 AC 663, Eng HL; Wise v USDAW [1966] ICR 691, 702.
215 (1972) 35 MLR 362.
216 (1972) 35 MLR 362.
217 ‘The Enforcement of “Outsider’ Rights”’ (1980) Co Law 179.
218 [1909] 1 Ch 311CA, affd [1909] AC 442 Eng HL.
219 See per Steyn LJ in Bratton Seymour Services Co Ltd v Oxborough [1992] BCLC 693, 698 Eng CA.
220 Ang s 279; Ant s 362(1); B’dos s 349(1); Dom s 362(1); Gren s 362(1); Guy s 336(1)(a); Mont s 362(1); St L s
362(1); St V s 362(1); T’dad s 340(1).
222 (Unreported) (Suit No SVGHCV 211 of 1997 St V HC).
223 For corresponding provision, see Ang s 277; Ant s 360; B’dos s 347; Dom s 360; Gren s 360; Guy s 334; St L s
360; Trin s 338.
224 Paras 10 and 11 of transcript of Alleyne J (Unreported) (Suit No SVGHCV 211 of 1997 St V HC).
225 For corresponding provision, see Ang s 277; Ant s 360; B’dos s 347; Dom s 360; Gren s 360; Guy s 334; Mont
s 360; St L s 360; T’dad s 338.
226 (Unreported) (Suit No CV 1372 of 1998 T’dad).
227 (Unreported) (Suit No CV 1372 of 1998 T’dad).
228 See Companies Act 2006, s 9(1) (UK).

Chapter 4
Promotion and Pre-Incorporation
Transactions
Introduction
Prior to incorporation, no entity with legal capacity to conduct transactions on
its own behalf exists.1 One implication of this is that, before incorporation,
someone must, without any authority from the proposed company, act on that
company’s behalf, for instance, attending to formalities involved in its
incorporation, arranging the initial finance needed for the running of its
business, and instructing and paying professionals to provide professional
services necessary to its formation. In a word, someone has to undertake to
bring the company into existence or, to adapt the metaphor of two American
writers, to be ‘the midwife of the company.’2
Given the foregoing anatomy, two major legal issues inevitably arise in the
pre-incorporation context. The first of these is what are the rights and
liabilities of those who undertake to bring the company into existence? The
second is what is the legal status of pre-incorporation agreements which are
intended to be legally binding entered into for the company’s benefit? It is
with these two topics that this chapter is concerned. These are explored under
the heads ‘Company promoters’ and ‘Pre-incorporation contracts’.
Company Promoters
Meaning of promoter
The expression ‘promoter’ has been in long usage in English, and consequently
Commonwealth Caribbean, company law but has never been legislatively
defined. There have, however, been judicial attempts at providing descriptions
of the term. For example, Cockburn CJ in the English case of Twycross v
Grant3 said that the term meant ‘one 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 the purpose’. But case law shows that a person, who has
been far less actively involved in the formation of the company, as for
instance, arranging for someone to become a director or placing shares, may
be held to be a promoter.4 The description in Tycross v Grant5 is, therefore,
inadequate since it does not include all those who may be promoters.
The description of Lord Blackburn in the English House of Lords case of
Erlanger v New Sombrero Phosphate Co6 is similarly inadequate. In that case,
Lord Blackburn said that the term was ‘a short and convenient way of
designating those who set in motion the machinery by which the Act …
enables them to create an incorporated company’.7 This description conceals
the fact that promotion can in certain circumstances continue even after
incorporation, as was made plain by Lindley LJ in the English Court of Appeal
in Emma Silver Mining Co v Lewis & Son, where he said:8
It is now clearly settled that persons who get up and form a company have duties towards it before it
comes into existence … Moreover, it is in our opinion an entire mistake to suppose that after a company is
registered its directors are the only persons who are in such a position towards it as to be under fiduciary
relations to it. A person not a director may be a promoter of a company which is already incorporated, but
the capital of which has not been taken up, and which is not yet in a position to perform the obligations
imposed on it by its creators.
It appears from the cases that, ultimately, the question as to whether or not a
person is a promoter in any particular case is a question of fact to be
determined in light of the totality of the circumstances in that case.9 Thus, the
case law is to be treated, not as giving any clear-cut definition of a promoter,
but merely as providing some indication as to the facts and circumstances that
will be taken into account in making a determination as to when a person will
be held to be a promoter.
Need to regulate company promoters
Persons who undertake the task of bringing a company into existence, (be
they professional company promoters or owners of a small family business
who convert it into a company), are in a position of enormous influence, with
undoubted potential for abuse both in relation to the proposed company and
those investing in the company. In Erlanger v New Sombrero Phosphate Co,10
Lord Cairns described the position of such persons, as follows:11
They have in their hands the creation and moulding of the company; they have the power of defining how,
and when, and in what shape, and under what supervision, it shall come into existence and begin to act as
a trading corporation.
Not surprisingly, rules have been developed in English company law, and
consequently Commonwealth Caribbean company law, around the concept of
promoters to regulate persons in such a position of influence. These rules are
not to be found in the provisions of company legislation and are therefore not
statute-based. Rather these rules have been developed by the courts of equity
utilising equitable principles applicable to fiduciaries.
The approach of the courts has been essentially thematic. Their approach
has been to categorise as a promoter a person involved in the bringing into
existence of the company who may incur liability. A promoter is then treated
as a fiduciary and as being under all those duties imposed by equity on a
fiduciary. Breach of these fiduciary duties by a promoter renders him liable to
all those remedies which are available in equity for breach of the duties of a
fiduciary.12
In light of the foregoing, it is convenient to examine the rules which
regulate promoters under two broad heads. The first of these is the duties of
promoters. The second is the remedies that are available to the company and
others for breach of these duties.
Duties of promoters
It is undoubted law that a person who can properly be regarded as a promoter

ipso jure stands in a fiduciary position towards the company upon its
incorporation.13 This position imposes upon such a person duties of disclosure
and accounting, the usual duties of a fiduciary, which begin on the
commencement of promotion and which usually, but not always, end after the
company is formed.14
A particular aspect of the duties of disclosure and accounting is that a
promoter as a fiduciary must not make any profit out of the promotion
without disclosing it to the company.15 But given that the company is a
persona ficta, an artificial person, and that no disclosure can literally be made
to it, the real question then becomes: to whom is the disclosure to be made?
An answer to this question was adumbrated in the leading English House of
Lords case of Erlanger v New Sombrero Phosphate Co.16 Here, the answer was
stated to be that it was the duty of the promoter to ensure that the company
had an independent board of directors, and that full disclosure was to be made
to them. Lord Cairns considered the law in the context of the owner of
property who is the promoter of a company. After noting that such a person
‘stands … undoubtedly in a fiduciary position’, he continued:17
I do not say that the owner of property may not promote and form a joint stock company and then sell his
property to it, but I do say that if he does he is bound to take care that he sells it to the company through
the medium of a board of directors who can and do exercise an independent and intelligent judgment on
the transaction.
The answer given in Erlanger v New Sombrero Phosphate Co was subsequently

modified in the English House of Lords in Salomon v Salomon.18 In Salomon’s
Case, the House of Lords decided that where there was not an independent
board of directors, disclosure of the material facts to the original members
would be equally effective.19 In that case it was held that the liquidator of the
company could not impugn the sale of Mr Salomon’s business to the company
at an obvious over-valuation, since the material facts surrounding the sale
were disclosed to all the original members and they had acquiesced in the sale.
The English House of Lords’ decision in Gluckstein v Barnes20 has added an
important gloss to the principle of disclosure laid down in Salomon v
Salomon.21 It is that the promoter cannot claim to satisfy the requirement of
disclosure by disclosing to a few cronies, who constitute the initial members,
when the scheme is intended to perpetrate a fraud on the public.
The facts of this case are instructive. Gluckstein was one of a syndicate of
four who bought property nominally for £140,000 but actually for £120,000,
and promoted a company of which they were the original members. The
company then bought the property for £180,000. A prospectus which was
issued offering the shares of the company to the public disclosed a profit of
£40,000 rather than the £60,000 which was the actual profit made on the deal.
A question arose as to whether Gluckstein was liable for his share of the
secret profit. Gluckstein’s defence was that disclosure had been made to the
original members of the company and that this was sufficient disclosure. The
House rejected Gluckstein’s defence and held him liable.
Of Gluckstein’s claim that there had been sufficient disclosure, Lord
Macnaughten quipped:22
‘Disclosure’ is not the most appropriate word to use when a person who plays many parts announces to
himself in one character what he has done and is doing in another. To talk of disclosure to the thing called
the company, when as yet there were no shareholders, is a mere farce. To the intended shareholders there
was no disclosure.
In light of the gloss added by Gluckstein v Barnes,23 it would appear that

disclosure is only made to the company where, either it is made to an entirely
independent board24 or to the existing25 and potential26 members as a whole.
The duty of the promoter to make full disclosure of any profits made is
undoubted. A question of some difficulty arises in respect of his liability for
property acquired by him. In such a case, it appears to be the law that where a
promoter acquires property after the commencement of the promotion he is
presumed to do so as a trustee of the yet-to-be-incorporated company.27
Consequently, unless he discloses not merely the profit which he proposes to
make but also informs the company of its right to call for the property, the
company can demand taking it at the price he paid for it.28
Where, on the other hand, the promoter acquires the property on his own
account before the commencement of promotion, it belongs to him both at
law and in equity, and he may sell it to the company on incorporation
provided that he discloses any profit made.29 This principle explains the old
Ontario Court of Appeal decision in Highway Advertising Co v Ellis.30 In this
case, the defendants acquired a patent before the incorporation of the
company and before they became promoters of the company. The Court held
that the defendants were entitled to retain the consideration they had
received. Moss CJO stressed that it would have been immaterial if the
defendants had acquired their interests without consideration so long as these
had not been acquired for the company.
Remedies for breach of promoter’s fiduciary duties
Overview
The promoter’s fiduciary duties of disclosure are equitable duties.

Consequently, where the promoter is in breach of his duty to disclose, all
appropriate equitable remedies are available against him. These include the
remedy of rescission for any contract with him, damages in lieu of such
rescission or for the recovery of any secret profits which he has made.
Rescission
If a promoter is in breach of either of his fiduciary duties, namely, duty not to

make secret profit and duty to disclose, the company has a right to rescind any
contract made with him consequent upon such breach and may recover any
consideration rendered by it under the contract. This was held to be so in
Erlanger v New Sombrero Phosphate Co.31 In this case, the promoters were in
breach of their fiduciary duties and the company was allowed to rescind a
contract for the purchase of the lease of the island made consequent upon the
breach.
As has already been noted, rescission is an equitable remedy. As such, the
availability of this remedy against a promoter is subject to the bars to
rescission.32 Thus, for instance, the right to rescission is lost if the parties
cannot be substantially restored to the status quo ante.33 Similarly, the right
may be lost if third parties have acquired rights for value.34
Damages in lieu of rescission
Where rescission is no longer possible, damages in lieu of rescission may be

recovered. This occurred in the English Court of Appeal case of Re Leeds &
Hanley Theatres of Varieties Ltd.35 In this case, promoters made a profit by
selling through a nominee and failed to disclose the profit. Meanwhile, a
mortgagee sold the property so that rescission was no longer possible. It was
held that damages in equity could be recovered.
Recovery of the secret profit
Where the company elects not to rescind the contract, it may still bring an
action to recover a secret profit made by the promoter in consequence of his
breach of fiduciary duty. Gluckstein v Barnes36 illustrates the operation of this
rule. In this case the facts of which have already been outlined,37 the company
did not rescind the contract of sale for the property on which the undisclosed
profit was made. It was nevertheless held that the promoters were liable to
account to the company for the secret profit.
It is worth noting that in computing the secret profit all bona fide expenses
of the promotion can be deducted. Accordingly, it was held in Emma Silver
Mining Co v Grant38 that the defendant could claim such promotional
expenses as sums expended in securing the services of directors and in
payment to brokers and the press.
Pre-Incorporation Contracts
As has already been stated, before a company is incorporated it has no legal

capacity to contract or to enter into any other legal transaction.39 Despite this,
it is sometimes necessary for persons who do not wish to assume personal
liability to enter into negotiations with third parties on behalf of the proposed
company. Where these negotiations reach the stage of an agreement which is
intended to be legally binding, complex legal questions arise in relation to that
agreement as to the respective rights and liabilities of the person who
negotiated on behalf of the as-yet-not-formed-company, the subsequently
formed company and the third party with whom the agreement is made.
The answers to these questions are to be found in the Commonwealth
Caribbean Companies Acts, except the Belize Companies Act, all of which
have included extensive provisions on pre-incorporation contracts.40 Section 16
of the Antiguan Act is typical of the provisions in regional legislation except
the St Christopher/Nevis Act. This section provides as follows:
(1) Except as provided in this section, a person who enters into a written
contract in the name of or on behalf of a company before it comes into
existence is personally bound by the contract and is entitled to the
benefits of the contract.
(2) Within a reasonable time after a company comes into existence, it
may, by any action or conduct signifying its intention to be bound
thereby, adopt a written contract made, in its name or on its behalf,
before it came into existence.
(3) When a company adopts a contract under subsection (2):
(a) the company is bound by the contract and is entitled to the

benefits thereof as if the company had been in existence at the
date of the contract and had been a party to it; and
(b) a person who purported to act in the name of the company or
on its behalf ceases, except as provided in subsection (4), to be
bound by or entitled to the benefits of the contract.
(4) Except as provided in subsection (5), whether or not a written contract

made before the coming into existence of the company is adopted by
the company, a party to the contract may apply to the court for an
order fixing obligations under the contract as joint or joint and several,
or apportioning liability between or among the company and a person
who purported to act in the name of the company or on its behalf, and
the court may, upon the application, make any order it thinks fit.
(5) If expressly so provided in the written contract, a person who
purported to act for or on behalf of a company before it came into
existence is not in any event bound by the contract or entitled to the
benefits of the contract.
The Ontario Court of Appeal decision in 1394918 Ontario Ltd v 1310210 Ontario
Inc41 suggests the approach which must be brought to the interpretation of the
provisions in the Acts in the Commonwealth Caribbean similar to section 16
of the Antigua Act. In that case, it was explained that section 14 of the Ontario
Business Corporations Act, a section in pari materia with section 16,42 is
intended to replace the common law and that as such, that section should be
read on its terms and in the interpretative context of the purpose it was
intended to fulfil.43 Given this, any proper interpretation of section 1644 must
start with an examination of the common law of pre-incorporation contracts
since section 1645 was intended to replace the common law on pre-
incorporation contracts.
The common law and statutory intervention

The decision of the English Court of Common Pleas in Kelner v Baxter46 is the
point of departure in any examination of the common law of pre-
incorporation contracts. The facts of this case are relatively straightforward
but deserve to be stated fully.
Kelner was a wine merchant and owner of a hotel. He and a number of
other gentlemen decided to form a company to take over the hotel business.
There were to be seven directors, including Kelner and the defendants Baxter,
Dales and Callister.
On February 20, 1866, the certificate of incorporation for the company was
issued. In the meantime, on January 27, 1866, Kelner had undertaken to sell it a
stock of wine that he owned and a contract was drawn up in the following
terms:
To John Baxter, Nathan Callister and John Dales, on behalf of the

proposed Gravesend Royal Alexandria Hotel Company Limited.
Gentlemen—I hereby propose to sell the extra stock now at the Assembly
Room, Gravesend, as per schedule thereto, for the sum of £900,
payable on the 28th of Feb., 1866.
(Signed) John Kelner
[Then followed the schedule of the stock of wine and at the end was
written]
To Mr. John Kelner.
Sir—We have received your offer to sell the extra stock as above and
hereby agree to and accept the terms proposed.
(Signed) JD Baxter NJ Callister J Dales
On behalf of the GRAH Co. Ltd.
On February 1, 1866, a meeting of the ‘directors’ purported to ratify the

contract on behalf of the company. Kelner was not paid on February 28, 1866
as promised, and he commenced an action against Baxter, Callister and Dales
in their personal capacity. On April 11, 1866, a new meeting of the directors
again purported to ratify the contract.
At trial, the plaintiff argued that the purported ratifications were ineffective
and that the defendants had made themselves, and remained, personally liable
on the contract. Erle CJ found for the plaintiff and refused to allow parol
evidence that the defendants never intended to be personally liable. The
defendants obtained a motion for retrial on the ground of misdirection in
respect of the exclusion of the parol evidence.
The new trial before the full Court of Common Pleas affirmed the original
judgment and found for the plaintiff, Kelner. In so doing, the Court seem to
establish two crucially important propositions. The first is that a company
cannot adopt or ratify a contract made in its name before it comes into
existence and, the second, that the person who purports to contract on behalf
of the company is personally liable on the contract.
With respect to the first proposition regarding ratification, the court
expressed the view that it was not legally possible for the company, when it
came into existence, to adopt or ratify a contract on its behalf.47 Willes J
reasoned that:48
Ratification can only be by a person ascertained at the time the act is done—by a person in existence either
actually or in contemplation of law.
With respect to the second proposition relative to the personal liability of the
person who purports to contract, the legal basis for the court’s decision was
nowhere so clearly stated. It was thought, however, that the court’s decision
rested on a wider agency principle that where an agent contracts in the name
of a non-existent principal, the agent is personally liable. Subsequent cases,
notably, the English Court of Appeal case of Newborne v Sensolid (Great
Britain) Ltd49 and the Australian High Court case of Black v Smallwood50 have
established that the Court of Common Plea’s decision is not based on any such
general agency principle.
Take first the case of Newbourne v Sensolid (Great Britain) Ltd.51 In his case
the plaintiff, a merchant, purported to enter a contract with the defendant,
Sensolid, to sell to them a consignment of tinned ham. The contract was
signed:
Leopold Newborne (London) Ltd. (typed)

Leopold Newborne (signature)
The plaintiff was then in the process of forming a company of which he was to
be a director and the controlling shareholder. Sensolid refused to take delivery
of or to pay for the ham, arguing that neither the unincorporated company nor
Mr Newborne could sue.
At trial, Parker J found for the defendants and this judgment was upheld by
the Court of Appeal. Here, it was stated that the basis of the decision in Kelner
v Baxter52 was not the application of any general principle of agency to the
effect that an agent who contracts on behalf of a non-existent principal incurs
personal liability. Rather, that decision turned on the fact that the defendants in
that case had by the form of their signature indicated that they had
undertaken personal liability.
The Court of Appeal, therefore, distinguished Kelner v Baxter53 on the basis
that the form of signature in the instant case indicated that Newborne was not
undertaking personal liability whereas in Kelner the defendants were
undertaking personal liability. Of this Lord Goddard CJ said:
This contract purports to be a contract by the company; it does not purport to be a contract by Mr.
Newborne. He does not purport to be selling his goods but to be selling the company’s goods. The only
person who had any contract here was the company, and Mr. Newborne’s signature merely confirmed the
company’s signature.
It followed from this that, since the company was not in existence at the time
of the purported contract was made, the contract was a nullity.
The decision in Newborne v Sensolid54 was followed by the Australian High
Court in Black v Smallwood.55 In this case the Blacks purported to enter into a
contract to sell a piece of land to a corporation. The contract was executed as
follows:
[Typed] Western Suburbs Holding Pty Limited

[Signed] R Smallwood, J L Cooper (Directors)
Contrary to the belief of both parties, the corporation was not in existence at
the time of the execution of the contract. When it came into existence it
refused to perform the contract, and the Blacks sued Smallwood and Cooper
for specific performance.
The Australian High Court held that their action failed. The majority
judgment appears to have accepted the distinction made in Newborne, and
held that the contract purported to be made by the corporation, with the
signatures of the two directors merely providing authentication. By contrast,
they considered that, in Kelner, the contract had been made by the individual
defendants.
It is clear from the foregoing examination that the common law on pre-
incorporation contracts, (which it is to be observed is still the law in Belize), is
uncertain, overly technical and results in unjustifiable inconvenience and
unpredictability. Put simply, the common law on pre-incorporation contracts
does not meet the commercial business concerns of parties who wish, and
have negotiated for liability to be assumed by an as-yet-unincorporated
company. It is this state of the law which the provisions in regional legislation
similar to section 16 of the Antiguan Act were enacted to remedy.56
The scope of section 1657
The scope of provisions in regional Acts similar to section 16 of the Antigua

Act58 is defined by the fundamental purpose of that provision. This was
explained in Sherwood Design Services Inc v 872935 Ontario Ltd59 in relation to
section 14 of the Ontario Business Corporations Act, a section in pari materia
with section 16.60 It was stated in this case that the major purpose of section 14
is to remedy the common law and to enable individuals, who are negotiating
transactions but do not intend to assume personal liability, to have an
expeditious way of inserting a company into that transaction without having
to wait for the incorporation of the company before striking a deal and
without having to rewrite the contract after the company comes into
existence. Consequently, according to the Ontario Court of Appeal in 1394918
Ontario Ltd v 1310210 Ontario Inc,61 the pre-incorporation contract established
by section 1662 must be interpreted as a statutory creation intended to meet
the commercial business concerns of parties who wish to and have negotiated
for liability to be assumed by an as-yet unincorporated company.
Section 1663 seeks to achieve its objective by establishing rules dealing with
four separate aspects of liability for pre-incorporation contracts. These are (i)
the personal liability of the person intending to act on behalf of the as-yet-
unincorporated company; (ii) the liability of the subsequently incorporated
company; (iii) the power of the court to apportion liability between the person
who contracted on behalf of the as-yet unincorporated company and the
subsequently incorporated company; and (iv) the ability of the person
contracting on behalf of the as-yet unincorporated company to exempt
himself from personal liability. The rules dealing with each of these four
separate aspects of pre-incorporation contractual liability will now be
explored fully.
Section 16(1)64 and personal liability and rights
Overview
As has already been seen, the common law imposes personal liability on
persons contracting on behalf of the as-yet unincorporated company in limited
circumstances under the principle in Kelner v Baxter.65 In most circumstances
at common law, however, a pre-incorporation contract is held to be a nullity in
accordance with Newborne v Sensoloid66 and Black v Smallwood67 and
consequently, no personal liability attaches the person contracting on behalf of
the as-yet unincorporated company.
The provision contained in section 16(1)68 is intended to supersede this
aspect of the common law. Section 16 (1) provides as follows:69
a person who enters into a written contract in the name of or on behalf of a company before it comes into
existence is personally bound by the contract and is entitled to the benefits of the contract.
Section 29(1) of the Jamaican Act is worded sufficiently differently to merit

separate analysis. This subsection reads as follows:
a person who enters into an oral or written agreement or contract in the name of or on behalf of a
company before it comes into existence or who purports to enter into such an agreement or contract is
personally bound by the agreement or contract and is entitled to the benefits of that agreement or contract.
It is plain from these provisions that they are predicated on the overriding
principle that persons entering into contracts in the name of or on behalf of an
as-yet-unincorporated company are personally liable for and entitled to the
benefits of pre-incorporation contracts. It may be added parenthetically that
this rule prevails unless the person contracting in the name of or on behalf of
the as-yet unincorporated company contracts out pursuant to section 16(5).70
The rule may also be displaced by the adoption of the contract by the
company upon incorporation pursuant to section 16(2).71
By the same token, it is also plain from section 16(1)72 and 29(1) that there
are a number of preconditions which must be satisfied in establishing personal
liability or personal benefits under these sections. As regards these
preconditions, the Ontario decision of Dawi v Armstrong73 underlines the view
that for this subsection to apply these preconditions must be strictly satisfied. It
becomes necessary, therefore, to consider these preconditions in detail.
Requirement that company be incorporated
A critical clause in sections 16(1)74 and 29(1) is that the contract must be
entered into ‘in the name of or on behalf of a company before it comes into
existence’. Two important questions arise from this clause. These are, first,
whether the imposition of personal liability or the claim to personal benefits
pursuant to the provision in section 16(1)75 and section 29(1) apply to contracts
made within a given jurisdiction in the name of a company to be incorporated
outside that jurisdiction, or whether the provision only applies to contracts
made in a given jurisdiction in the name of a company which is to be
incorporated under the Companies Act in that jurisdiction. And, second,
whether the clause means that section 16(1)76 and section 29(1) have no
application where the company in whose name or on whose behalf the
contract is made is never incorporated, and that, consequently, the person
contracting in the name of or on behalf of such a company incurs no personal
liability nor can claim any benefits under the contract.
Turning to the first question, namely whether a person contracting in the
name of or on behalf of a company is personally liable for, or correspondingly,
can claim benefits under, all contracts made in the jurisdiction in the name of a
company whether or not the company is subsequently incorporated under the
Companies Act in that jurisdiction. Sections 16(1)77 and 29(1) seem to make it
plain that the provisions apply only to companies incorporated under the Act
in question. It will be remembered that the express wording of section 16(1),78
in so far as is relevant, is as follows:
a person who enters into a written contract in the name of or on behalf of a company before it comes into
existence.
As was seen in Chapter 2, ‘company’ is defined in section 543 of the Antiguan

Act79 as ‘a body corporate that is incorporated or continued under this Act’.
This definition leads to the inevitable conclusion that section 16(1)80 applies
only to a pre-incorporation contract made in the name of or on behalf of a
company subsequently incorporated under the Act in the jurisdiction in which
the contract was made.
A consequence of this conclusion is that no personal liability would be
incurred pursuant to section 16(1)81 of the Antiguan Act by a person who
entered into a contract in Antigua on behalf of a company subsequently
incorporated, for example, under the law in Belize. The applicable law to such
a pre-incorporation contract would be the common law since pre-
incorporation contracts in Belize are still governed by the common law.
This conclusion finds some support in the English case of Rover
International Ltd v Canon Film Sales Ltd (No 3).82 In this case, the English
Court of Appeal held that the provision of the UK Companies Act 1985, which
imposes personal liability on a person making a pre-incorporation contract,
did not apply to a contract made on behalf of a company subsequently
incorporated under the law of Guernsey: instead the common law, which was
the applicable law in Guernsey, applied.
Turning next to the second question, namely whether personal liability
attaches or personal benefits accrue where a contract is made on behalf of a
company which is never incorporated. This question was first raised and
briefly considered in the case of Westcom Radio Group Ltd v MacIsaac.83 In
that case, the Ontario Divisional Court expressed the view obiter that an
analogous section in the Ontario Business Corporation Act might have no
application to a situation in which no company is subsequently incorporated.
There are two good lines of reasoning which appear to support the view
expressed in Westcom. The first is based on the actual wording of section
16(1)84 itself. The clause ‘in the name of or on behalf of the company before it
comes into existence’ in section 16(1)85 suggests that the company must come
into existence for the section to be operative. The second, and perhaps more
persuasive line of reasoning, is that, as has already been seen, because of the
definition of ‘company’ in section 543 of the Antiguan Act,86 the section is to
be interpreted as applying to companies incorporated under the Act. The
logical consequence of this is that, unless there is a company incorporated
under the Act, the section cannot apply.
Despite these powerful arguments in favour of the view expressed in
Westcom, it is submitted that that view does not sit well with the legislative
intention which underlies section 16(1)87 and section 29(1). There can be little
doubt that the manifest intention behind the enactment of these subsections is
to remedy the defects of the common law by imposing liability on the
promoter when the contract is made and to continue his liability unless he
expressly provides that he is not personally bound by the contract as is
contemplated by section 16(5)88 or unless and until the contract is adopted by
the company within a reasonable time of its incorporation.89 It follows
logically from this that, if effect is to be given to the intention of Parliament in
enacting these subsections, whether or not a company is incorporated the
promoter should continue to be personally liable. In any event, it appears from
the cases that where an as-yet unincorporated company is never incorporated,
but is knowingly held out as if it exists by the person who entered the contract
in the name of or on behalf of the company, personal liability attaches.90
Requirement that there be a contract
Section 16(1)91 makes express reference to a ‘contract’ made in the name of or

on behalf of a company. A question arises as to what is meant by ‘contract’ in
this context. Put another way, given the reason for the enactment of the
section, does ‘contract’ here refer to both a valid contract as well as a contract
which would be held to be a nullity at common law under the Kelner v
Baxter92 rule because it was made in the name of a non-existent company?
This question arose in the case of Westcom Radio Group Ltd v MacIsaac.93
The facts of this case are that what purported to be an advertising contract
was executed, in Hamilton Ontario, in the name of J.A./ Pat Enterprises Ltd, a
company the defendant believed to be incorporated but which was not and, in
fact, which never came into existence. The signature of Ms MacIsaac was
added as ‘contact’ and as ‘client’. An action was brought against Ms MacIsaac
personally. It was held by the Ontario Divisional Court that Ms MacIsaac was
not liable on the contract.
Austin J considered that section 14 of the Ontario Business Corporations
Act, a section in pari materia with section 16,94 is a complete codification on
the law pertaining to personal liability for pre-incorporation contracts. Austin J
opined that, in applying this section, the starting point in deciding whether Ms
MacIsaac was personally liable must be to determine whether the plaintiff
intended to contract with the non-existent company exclusively. If the answer
to this is in the affirmative, then the purported contract is a nullity and
incapable of imposing liability on the defendant. This is so, notwithstanding
the fact that the admitted intention of the section was to remedy the perceived
unfairness of the principle in Black v Smallwood.95
According to Austin J, this approach is based on the consideration that it is
questionable whether the wording of the section in question includes
‘purported agreements which are in law nullities’.96 Indeed, in his view, ‘the
literal wording of the statute does not apply to a classic Black scenario’.97
Logically, therefore, where the third party intends to contract with the
nonexistent company no contract exists at common law and consequently
there is nothing to which the Act applies.
It is doubtful whether the literal approach taken in Westcom represents the
law.98 In 1394918 Ontario Ltd v 1310210 Ontario Inc,99 Carthy JA in the Ontario
Court of Appeal stated emphatically that the correct interpretative approach
to section 14, a section in pari materia with section 16,100 is to read it on its
own terms and in the interpretative context of the purpose it was intended to
fulfil. Carthy JA pointed out that the purpose of the pre-incorporation
contracts statutory scheme is to jettison the confusion of the common law and
that this purpose should not be thwarted, for example, by concern that a
common law contract requires two parties with co-existent liabilities.
According to Carthy JA, a pre-incorporation contract must be treated as a
statutory creation intended to meet the commercial business concerns of a
party who wishes, and has negotiated for, liability to be assumed by an as-yet
unincorporated company.
Substantial support for this interpretative stance may be found in the
English Court of Appeal decision in Phonogram Ltd v Lane101 even though the
section which was in issue in that case (section 9(2) of the UK European
Communities Act) is differently worded from section 14 of the Ontario
Business Corporations Act or to section 16 of the Antiguan Act.102 It is to be
noted, however, that like these sections, section 9(2) is intended to reform the
common law on pre-incorporation contracts to impose personal liability on a
person contracting in the name of or on behalf of a company not yet in
existence.
The material facts of Phonogram Ltd v Lane103 are that prior to the
incorporation of a company called Fragile Management Ltd, the defendant
contracted with the plaintiff for a loan of £12,000 to finance a pop group called
Cheap Mean and Nasty. The plaintiff wrote a letter to the defendant in which
it referred to him undertaking to repay. He, nevertheless, was required to sign
and return a copy ‘for and on behalf of Fragile Management Ltd’. This
company, however, was never formed.
It was held that the defendant was personally liable under section 9(2) to
repay an amount advanced under the contract. Lord Denning MR, in the Court
of Appeal, expressly intimated that the courts will interpret section 9(2) to
give it content and in a way that will not defeat its purpose.
It appears from the foregoing then, that whatever its wording, section 16104
is to be treated as obliterating the subtleties of the common law on pre-
incorporation contracts. The section applies therefore to contracts which
would be regarded as a nullity under the rule in Black v Smallwood.105
Section 29(1) of the Jamaican Act is intended to avoid the uncertainty
created by Westcom and to make it clear that section 29 applies to contracts
which would be held to be a nullity at common law. That subsection reads:
a person who enters an oral or written agreement or contract in the name of or on behalf of a company
before it comes into existence or who purports to enter into such an agreement or contract, is personally
bound by the agreement or contract.
Two statutory devices are utilised in this subsection in an attempt to achieve

this result. The first is the statutory use of the alternative words ‘agreement or
contract’. This, it could be argued, is a statutory indication that even if the pre-
incorporation ‘thing’ is not a contract in the strict legal sense, it may still be an
agreement. It is submitted that there is a serious difficulty with this argument.
As a matter of fact and common sense, an agreement must be between two or
more persons. How, therefore, can it be said that an agreement exists where
there is only one person as must surely be the case where an agreement is
made in the name of a non-existent company?
The second device is the use of the clause ‘or who purports to enter into
such an agreement or contract’. The word ‘purports’, which means ‘professes’
or ‘pretends’, it may be argued, means that, where a person pretends or
professes to enter an agreement or contract, he is personally bound even
though he does not succeed in entering such an agreement or contract because
he has merely purported to enter into it. It is submitted that this argument is
not free from difficulty. This argument does not answer the objection that
what a person ‘purports’ to enter into does not redefine the identity of that
thing. That thing, in the context of section 29 (1), must still be proved to be an
‘agreement’ or a ‘contract’ and, on a literal interpretation, an ‘agreement’ or
‘contract’, by definition, must be between at least two parties. Since an
unincorporated company is not a legal person, it cannot be a party to an
agreement or contract so that anything made in the name of such cannot by
definition be an agreement or contract.
The upshot of the foregoing is that, on its literal interpretation and despite
its obvious intention so to do, section 29(1) does not avoid the Westcom
conundrum, namely, that the section does not apply to a classic Black v
Smallwood scenario.106 It is submitted, however, that the courts in Jamaica will
adopt a purposive interpretation of section 29(1) and hold that that section,
whatever its wording, is intended to remove the technicalities of the common
law on pre-incorporation contracts and to impose liability on persons acting in
the name or on behalf of the as-yet-unincorporated company.
Requirement for writing
Section 16(1)107 applies only to written contracts. The reason for so restricting
the application of the subsection may be that the common law cases with
which the subsection is intended to deal all involved written contracts. Be that
as it may, section 29(1) in Jamaica, on its plain words, applies to both oral and
written agreements and contracts.
Requirement that the contract be made in the name or on

behalf of the company
The requirement in section 16(1)108 and section 29(1) that the contract or
agreement be made ‘in the name of or on behalf of’ the company is not
intended to be a restriction on the operation of those sections. Rather, it is a
legislative attempt to avoid the possibility of the courts drawing the distinction
that was drawn in Newborne v Sensoloid109 between contracts made or
purported to be made by a company and those made on behalf of a company.
It is submitted that this is the approach which the courts will take to this
requirement. Thus, in the English Court of Appeal case of Phonogram Ltd v
Lane,110 Oliver LJ in approaching section 9(2) of the European Communities
Act, a section with a similar objective to sections 16(1)111 and 29(1), observed
that, in his words, ‘subtle distinctions which might have been raised at
common law in a case where a contract is either with a company or with the
agent of a company are rendered now irrelevant by section 9(2) of the
European Communities Act 1972’.112 Admittedly, section 9(2) is differently
worded from sections 16(1)113 and 29(1), but the mischief with which these
sections aim to treat is the same. For this reason the observation of Oliver LJ is
to be treated as highly persuasive in interpreting sections 16(1)114 and 29(1).
Section 16(2): adoption by the company
Overview
Perhaps one of the most egregious defects of the common law as was decided
in Kelner v Baxter115 is that the common law does not permit a company to
adopt or ratify a pre-incorporation contract once the company has been
incorporated. Sections 16(2)116 and 29(2) have been enacted to remedy this
defect. Section 16(2)117 reads:
Within a reasonable time after a company comes into existence, it may, by any action or conduct
signifying its intention to be bound thereby, adopt a written contract made, in its name or on its behalf,
before it came into existence.
Section 29(2) is almost identical, except that it provides for the adoption of ‘an
oral or written agreement or contract’.
Four questions arise in attempting to delineate the ambit of operation of
these subsections. These are (i) which contracts may be adopted under the
sections; (ii) which companies may adopt a contract under the sections; (iii) in
what manner may the contracts be adopted; (iv) when may a contract be
adopted; and (v) what is the legal effect of failure to adopt. Each of these will
be taken in turn.
Which contracts may be adopted
It is clear from the wording of section 16(2)118 that in order for a contract to be
capable of adoption it must satisfy three statutory requirements. It must first
of all be a written contract. Under section 29(2), however, it may be either oral
or written. The second is that, under both section 16(2)119 and section 29(2), the
contract must be one which is made in the name of or on behalf of a company.
Presumably, this means that the other party to the contract must indicate that
he is dealing with a company and not with the person acting on behalf of the
as-yet unincorporated company personally. The third is that the contract must
be one which is made before the company came into existence.120
Case law has established two important riders as to which contracts are
capable of adoption by a company after its incorporation. The first is that a
company cannot adopt a pre-incorporation contract after that contract has
been repudiated.121 The second is that there must be clear evidence of a pre-
incorporation contract. Thus, in the Ontario case of Netmar Inc v Aquilina122 it
was held that the opening of an account at a supplier was not a pre-
incorporation contact capable of adoption where the only evidence to support
it was from an employee that he had informed the supplier of the individual’s
intention to incorporate.
Which company may adopt
It is obvious from section 16(2)123 and section 29(2) that the only company
which may adopt a pre-incorporation contract is the company in whose name
or on whose behalf the contract was made. A particular difficulty arises,
however, where the company seeking to claim adoption of the contract was
not incorporated at the time the contract was made and the name of the
subsequently incorporated company differs from the name stated in the pre-
incorporation contract. This happened in the Ontario decision of Vacation
Brokers Inc v Penney.124 Here, the court held that such a contract was void and
incapable of adoption by the company seeking to enforce it.
The decision in Vacations Brokers Inc v Penney125 must be treated as
turning on its particular facts. This must be so since, on the clear words of
sections 16(2)126 and 29(2), a company can adopt a pre-incorporation contract
made in its name ‘or on its behalf’. Surely, this must mean that a subsequently
incorporated company can adopt a pre-incorporation contract where its name
differs from the name of the company stated in the pre-incorporation contract
as long as the subsequently incorporated company can show that it is
reasonably identifiable with the company named in the pre-incorporation
contract. In such a circumstance, the subsequently incorporated company
would in effect be showing that the contract was made ‘on its behalf’ even
though the name of another company is stated in the contract.
Manner in which contract may be adopted
Sections 16(2)127 and 29(2) do not require any formal procedure for the
adoption of a pre-incorporation contract.128 Both sections provide that the
company may adopt the contract ‘by any action or conduct signifying its
intention to be bound’. This means, it is submitted, that the question of
whether adoption has occurred is a question of fact and consequently, that
adoption may be implied from surrounding circumstances.
This view of the law was accepted in the recent Ontario Court of Appeal
decision in Design Home Associations v Raviv.129 In this case, a company was
held to have adopted a pre-incorporation lease agreement where the
company, after its incorporation, had requested that correspondence for rent
be sent to it, had paid the rent and had requested that the lease be assigned to
it. The Court expressed the view that there was no requirement for formal
adoption of a pre-incorporation contract or formal communication to the
other party. According to the Court, section 14(2) of the Ontario Business
Corporation Act, a section in pari materia with sections 16(2)130 and 29, does
not set out the manner of adoption of a pre-incorporation contract, and there
is no principled basis for imposing a stringent formality requirement. Under
this subsection, adoption is permitted ‘by any action or conduct signifying its
intention to be bound thereby’.
When may the contract be adopted?
Sections 16(2)131 and 29(2) provide very simply that the contract may be
adopted within a reasonable time after the company comes into existence.
What is a reasonable time will obviously depend upon the circumstances of
each case.
Effects of adoption or failure to adopt
Sections 16(3)132 and 29(3) contain provisions on what are the effects of
adoption. These sections are quite clear on the effects of adoption. If the
company adopts within a reasonable time after it comes into existence then
the company is bound by the contract and entitled to the benefits thereof as if
it had been a party to the pre-incorporation contract.133 The person acting in
the name or on behalf of the as-yet unincorporated company ceases to be
bound by or entitled to the benefits of the contract as soon as the contract is
adopted.134 By the same token, the person acting in the name or on behalf of
the as-yet unincorporated company remains liable and entitled unless and
until the company adopts the contract.
The Ontario Court of Appeal decision in 1394918 Ontario Ltd v 1310210
Ontario Inc135 presents a deeper insight into the effect of adoption under these
sections. In this case, the court expressed the view that the effect of the section
in the Ontario Business Corporations Act in pari materia with sections 16(3)136
and 29(3) was that after incorporation and notice of intention to adopt, the
company is bound by and entitled to the benefits of the contract retroactively
to the date the contract was signed. This means that the company can be liable
for any breach on the part of the person acting in the name or on behalf of the
as-yet unincorporated company and can sue on any breach by the other party
to the contract regardless of when the breach occurred. The position of the
company after adoption is the same regardless of whether the person acting in
the name or on behalf of the as-yet unincorporated company was personally
bound before adoption.
Section 16(4) and apportionment of liability by the court
As was seen in our examination of the common law on pre-incorporation

contracts, a major defect in the common law was that it sometimes produced
unjust result when it imposed liability on the promoter, as in Kelner v
Baxter,137 and more often did so when it refused to recognise the contract at
all, as in Newborne v Sensolid (Great Britain) Ltd138 and Black v Smallwood.139
Section 16(2)140 goes some way in mitigating these defects by providing for
the adoption of pre-incorporation contracts; but for sure this does not
completely eliminate the potential for injustice in these circumstances.
Section 16(4),141 which confers a discretion on courts to, in effect, ‘balance
the equities’ between the new corporation and the person acting in the name
or on behalf of the as-yet unincorporated company in appropriate
circumstances, is intended to deal further with the potential for unjust results
in pre-incorporation contracts. Section 16(4) reads:142
(4) Except as provided in subsection (5), whether or not a written contract made before the coming into
existence of the company is adopted by the company, a party to the contract may apply to the court for an
order fixing obligations under the contract as joint or joint and several, or apportioning liability between
or among the company and a person who purported to act in the name of the company or on its behalf,
and the court may, upon the application, make any order it thinks fit.
It seems clear from this wording that this subsection confers a wide discretion
on the court to issue either of two orders whether or not a contract has been
adopted by the company when it comes into existence. These two orders are
an order fixing obligations under the contract as joint or several or an order
apportioning liability between or among the company and a person acting in
the name or on behalf of the as-yet unincorporated company. The court will
not, however, exercise its discretion to fix or apportion liability between the
person acting in the name or on behalf of the as-yet unincorporated company
and the company where the other party to the pre-incorporation contract
knowingly contracted only with the company and was not in any way led to
believe that the person acting in the name or on behalf of the as-yet
unincorporated company would be personally liable.143
Exemption from personal liability
Section 16(5)144 enacts that the person acting in the name or on behalf of the
as-yet unincorporated company may in effect be exempted from personal
liability ‘if expressly so provided in the written contract’. The section continues
that where such provision is made, the promoter is not bound by the contract
or entitled to the benefits of the contract.
Case law has interpreted this section to mean that for a person acting in the
name or on behalf of the as-yet unincorporated company to limit liability
under this subsection, an express provision to that effect must be contained in
the pre-incorporation contract.145 Indeed, in Landmark Inns of Canada Ltd v
Horeak146 it was emphasised in the Saskatchewan Queen’s Bench that, in order
to exempt liability, a pre-incorporation contract must contain more than the
name of the proposed company and its execution under seal by an officer. It
must contain an express provision excluding the personal liability of the
person acting in the name or on behalf of the as-yet unincorporated company.
Section 29(5) is to the same effect. The only thing of note in this subsection
is that whereas all the other subsections in section 29 refer to ‘oral or written
agreement or contract’ this subsection refers to ‘an agreement or contract’. It is
not clear whether this is a drafting oversight, but it is thought that the
exemption provision applies to oral as well as written agreements or contracts.
The Ontario Court of Appeal decision in 1394918 Ontario Ltd v 1310210
Ontatio Inc147 throws some useful light on the operation of sections 16(5)148
and 29(5). That case explains that where a person acting in the name or on
behalf of the as-yet unincorporated company enters into a contract on behalf
of a company to be incorporated and that contract expressly provides that the
person acting in the name or on behalf of the as-yet unincorporated company
is not bound by the contract or entitled to the benefits thereof, then, that
person is not in any event bound by or entitled to the benefits of the contract
pursuant to sections 16(1)149 and 29(1). At the same time the company, prior to
incorporation and adoption of the contract pursuant to sections 16(2)150 and
29(2), is not bound by or entitled to the benefits of the contract. There is,
however, a nascent contract under the statute under which no one is bound by
or entitled to its benefits but under which enforceable ongoing obligations
subsist so that after incorporation and adoption, the company is bound by and
entitled to the benefits of the contract. Thus, contrary to the position at
common law, the company is after adoption bound by and entitled to the
benefits of the contract retroactively as if it had been in existence at the time
the contract arose. Accordingly, the company can be liable for any breach on
the part of the person acting in the name or on behalf of the as-yet-
unincorporated company that occurs prior to adoption and can sue on any
breach by the third party regardless of when it occurs.151
Conclusion
The law on the rights and rights and liabilities of those undertaking to bring
the company into existence has in general been left substantially untouched by
all the Companies Acts in the Commonwealth Caribbean. Accordingly, this
law is to be found in common law rules developed around the concept of
promoters. The one aspect of these rights and liabilities which has been
addressed in all of these Acts, except the Act in Belize, is that concerning pre-
incorporation contracts. Here, the Acts have introduced considerable
improvements over the common law position. The actual language used in
these Acts in some instances is not beyond criticism. However, given the clear
legislative intent in enacting the provisions in these Acts, it is thought that the
courts will overcome linguistic inadequacies by adopting a purposive approach
to the interpretation of these provisions.
Notes
1 Kelner v Baxter (1866) LR 2 CP 174 Eng CCP; Newborne v Sensolid (Great Britain) Ltd [1954] 1 QB 45 Eng
CA.
2 Henn and Alexander, Laws of Corporations (3rd edn New York: 1983) 237 used the metaphor ‘the midwife of
the business’.
3 (1877) 2 CPD 469, 541 Eng CA.
4 See Bagnall v Carlton (1877) 6 Ch D 371 Eng CA; Emma Silver Mining Co v Grant (1879) 11 Ch D 918 Eng
CA; Mann v Edinburgh Northern Tramways Co [1893] AC 69 Eng HL.
5 (1877) 2 CPD 469 Eng CA.
6 (1878) 3 App Cas 1218 Eng HL.
7 Ibid.
8 (1879) 396, 407 Eng CA.
9 See Gross ‘Who is a Company Promoter’ (1970) 86 LQR 1970.
10 (1878) 3 App Cas 1218 Eng HL.
11 (1878) 3 App Cas 1218, 1236 Eng HL.
12 Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218, 1236 Eng HL presents a good example of the
court adopting this approach.
13 See, e.g., Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218, 1236 Eng HL per Lord Cairns;
Emma Silver Mining Co v Lewis & Son (1879) 396, 400 Eng CA per Lindley LJ.
14 Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218, 1268 Eng HL per Lord Blackburn. But see
Emma Silver Mining Co v Lewis & Son (1879) 396, 400 Eng CA per Lindley LJ.
15 Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 Eng HL; Salomon v Salomon & Sons Co Ltd
[1897] AC 22 Eng HL; Gluckstein v Barnes [1900] AC 240 Eng HL.
16 (1878) 3 App Cas 1218 Eng HL.

17 (1878) 3 App Cas 1218, 1236 Eng HL.
18 [1897] AC 22 Eng HL.
19 See Lagunas Nitrate Co v Lagunas Syndicate [1899] 2 Ch 392, 426 per Lindley MR: ‘After Salomon’s Case I
think it impossible to hold that it is the duty of the promoters of a company to provide it with an
independent board of directors if the real truth is disclosed to those who are induced by the promoters to
join the company.’
20 [1900] AC 240 Eng HL.
21 [1897] AC 22 Eng HL.
22 [1900] AC 240, 249 Eng HL.
23 [1900] AC 240 Eng HL
24 Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 Eng HL.
25 Salomon v Salomon & Sons Co Ltd [1897] AC 22 Eng HL.
26 Gluckstein v Barnes [1900] AC 240 Eng HL.
27 Hichens v Congreve (1829) 1 Russ & M 150; Re Leeds and Hanley Theatres of Varieties Ltd [1902] 2 Ch 809
Eng CA; Jacobus Marler Estates Ltd v Marler (1913) 85 LJPC 167n.
28 Tyrell v Bank of London (1862) 10 HLC 26; Re Ambrose Lake Tin Co (1880) 14 Ch D 390 Eng CA; Ladywell
Mining Co v Brookes (1887) 35 Ch D 400 Eng CA.
29 Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 Eng HL.
30 (1904) 7 OLR 504 Ont CA.
31 (1878) 3 App Cas 1218 Eng HL.
32 Lagunas Nitrate Co v Lagunas Syndicate [1899] 2 Ch 392 Eng CA; Re Leeds and Hanley Theatres of
Varieties Ltd [1902] 2 Ch 809 Eng CA.
33 Lagunas Nitrate Co v Lagunas Syndicate [1899] 2 Ch 392 Eng CA.
34 Re Leeds and Hanley Theatres of Varieties Ltd [1902] 2 Ch 809 Eng CA.
35 [1902] 2 Ch 809 Eng CA.
36 [1900] AC 240 Eng HL.
37 Above.
38 (1879) 11 Ch D 918 Eng CPD.
39 Kelner v Baxter (1866) LR 2 CP 174 Eng CCP; Newborne v Sensolid (Great Britain) Ltd [1954] 1 QB 45 Eng
CA.
40 Ang s 16; Ant s 16; Bah s 22; B’dos s 16; Dom s 16; Gren s 16; Guy s 15; J’ca s 29: different wording
discussed in the text below; Mont s 16; St L s 16; St V s 16; T’dad s 20. Note that St C/N s 21 is worded
similarly to s 36C of the Companies Act 1985 (UK).
41 (2002) 57 OR (3d) 607 Ont CA.
42 For corresponding provision, see Ang s 16; Bah s 22; B’dos s 16; Dom s 16; Gren s 16; Guy s 15; J’ca s 29:
different wording discussed in the text below; St L s 16; St V s 16; Trin s 20.
43 See also 1080409 Ontario Ltd v Hunter (2000) 50 OR (3d) 145 Ont SCJ.
different wording discussed in the text above; St L s 16; St V s 16; Trin s 20.
different wording discussed in the text above; St L s 16; St V s 16; Trin s 20.
46 (1866) LR 2 CP 174.
47 This principle was applied in the High Court of Grenada in Leiste v Grenada National Air Services Ltd
(Unreported) Suit No 149 of 1967 Gren HC.
48 (1866) LR 2 CP 174, 180.
49 [1954] 1 QB 45 Eng CA.
50 [1966] ALR 744 HCA.
51 [1954] 1 QB 45 Eng CA.
52 (1866) LR 2 CP 174 Eng CCP.
53 (1866) LR 2 CP 174 Eng CCP.
54 [1954] 1 QB 45 Eng CA.
55 [1966] ALR 744 HCA.
56 See 1080409 Ontario Ltd v Hunter (2000) 50 OR (3d) 145 Ont SCJ discussing s 14 of the Ontario Business
Corporation Act, a section in pari materia with s 16.
57 Ang s 16; Bah s 22; B’dos s 16; Dom s 16; Gren s 16; Guy s 15; J’ca s 29: different wording discussed in the
text below; Mont s 16; St L s 16; St V s 16; T’dad s 20.
59 (1998) 38 BLR (2d) 157, 158 DLR (4th) 440 Ont CA.
61 (2002) 57 OR (3d) 607 Ont CA.
64 Ang s 16(1); Bah s 22(1); B’dos s 16(1); Dom s 16(1); Gren s 16(1); Guy s 15(1); Mont s 16(1); St L s 16(1); St V
s 16(1); T’dad s 20(1).
65 (1866) LR 2 CP 174 Eng CCP.
66 [1954] 1 QB 45 Eng CA.
67 [1966] ALR 744 HCA.
s 16(1); T’dad s 20(1).
s 16(1); T’dad s 20(1).
70 Ang s 16(5); Bah s 22(5); B’dos s 16(5); Dom s 16(5); Gren s 16(5); Guy s 15(5); J’ca s 29(5); Mot s 16(5); St L s
16(5); St V s 16(5); T’dad s 20(5). Note that St K s 21 is worded similarly to s 36C of the Companies Act
1985 (UK). For case law on this provision, see Szecket v Huang (1998) 168 DLR (4th) 402 Ont CA; Pinehurst
Woodworking Co v Rocco (1986) 38 RPR 116 Ont Div Ct.
71 Ang s 16(2); Bah s 22(2); B’dos s 16(2); Dom s 16(2); Gren s 16(2); Guy s 15(2); J’ca s 29(2); Mont s 16(2); St L s
16(2); St V s 16(2); T’dad s 20(2). For case law on this provision, see Szecket v Huang (1998) 168 DLR (4th)
402 Ont CA; Pinehurst Woodworking Co v Rocco (1986) 38 RPR 116 Ont Div Ct.
s 16(1); T’dad s 20(1).
73 (1992) 17 CPC (3d) 196(Ont Gen Div), affd (1993) 43 ACWS (3d) 65 Ont CA.
s 16(1); T’dad s 20(1).
s 16(1); T’dad s 20(1).
s 16(1); T’dad s 20(1).
s 16(1); T’dad s 20(1).
s 16(1); T’dad s 20(1).
79 Ang s 1; Bah s 2; B’dos s 2; Dom s 543; Gren s 543; Guy s 2; Mont s 543; St L s 543; St V s 543; T’dad s 4.
s 16(1); T’dad s 20(1).
s 16(1); T’dad s 20(1).
82 [1987] BCLC 540 Eng CA.
83 (1989) 63 DLR (4th) 433 Ont Div Ct.
s 16(1); T’dad s 20(1).
s 16(1); T’dad s 20(1).
s 16(1); T’dad s 20(1).
16(5); St V s 16(5); T’dad s 20(5). And see also Szecket v Huang (1998) 168 DLR (4th) 402 Ont CA; Pinehurst
16(2); St V s 16(2); T’dad s 20(2). And see also Szecket v Huang (1998) 168 DLR (4th) 402 Ont CA; Pinehurst
90 See 1080409 Ontario Ltd v Hunter (2000) 50 OR (3d) 145 Ont SCJ; Wolfedale Electric Ltd v RPM’s Systems
Automation & Design Qualify in Motion Inc (2004) 47 BLR (3d) 1 Ont SCJ.
s 16(1); T’dad s 20(1).
92 (1866) LR 2 CP 174 Eng CCP.
93 (1989) 63 DLR (4th) 433 Ont Div Ct.
95 [1966] ALR 744 HCA.
96 (1989) 63 DLR (4th) 433, 439 Ont Div Ct.
97 (1989) DLR (4th) 433, Ont Div Ct.
98 This case has been severely criticised by Zeigel, ‘Promoter’s Liability and Preincorporation Contracts:
Westcom Radio Group Ltd v MacIsaac’ (1990) Can Bus LJ 341. Also see per Borrins JA in Sherwood Design
Services Inc and Pino Tutino holdings Inc v 872935 Ontario Ltd (1998) 38 BLR (2d) 157 Ont CA.
99 (2002) 57 OR (3d) 10 Ont CA. See also, Sherwood Design Services Inc and Pino Tutino Holdings Inc v 872935
Ontario Ltd (1998), 38 BLR (2d) 157, 158 DLR (4th) 440 Ont CA.
101 [1982] 1 QB 938 Eng CA.
103 [1982] 1 QB 938 Eng CA.
105 [1966] ALR 744 HCA.
106 [1966] ALR 744 HCA.

s 16(1); T’dad s 20(1).
s 16(1); T’dad s 20(1).
109 [1954] 1 QB 45 Eng CA.
110 [1982] 1 QB 938 Eng CA.
s 16(1); T’dad s 20(1).
112 [1982] 1 QB 938, 945 Eng CA.
s 16(1); T’dad s 20(1).
s 16(1); T’dad s 20(1).
115 (1866) LR 2 CP 174.
s 16(2); T’dad s 20(2).
s 16(2); T’dad s 20(2).
s 16(2); T’dad s 20(2).
s 16(2); T’dad s 20(2).
120 Southside Property Management (London) Inc v Sibold Estate (2004) 2004 Carswell Ont 1635 CA.
121 Landmark Inns of Canada Ltd v Horeak [1982] 2 WWR 377 Sask QB.
122 (January 20, 1999) Doc. Kitchener 1243/96 Ont Gen Div.
s 16(2); T’dad s 20(2).
124 (1998) 82 ACWS (3d) 62 Ont Gen Div.

125 Ibid.
s 16(2); T’dad s 20(2).
s 16(2); T’dad s 20(2).
128 See Sherwood Design Services Inc v 872935 Ont Ltd (1998) 28 BLR (2d) 157 Ont CA.
129 (2004) 44 BLR (3d) 124. See also K & L Higgins Ltd v Yonge-Eglinton Buildings Ltd (1974) 51 DLR (3d) 47,
revsd on other grounds but affd on s 14(2) (1976) 12 DLR (4th) 265 Ont CA.
s 16(2); T’dad s 20(2).
s 16(2); T’dad s 20(2).
s 16(3); T’dad s 20(3).
133 Ang s 16(3)(a); Bah s 22(3)(a); B’dos s 16(3)(a); Dom s 16(3)(a); Gren s 16(3)(a); Guy s 15(3)(a); Mont s 16(3) (a);
St L s 16(3)(a); St V s 16(3)(a); T’dad s 20(3)(a).
134 Ang s 16(3)(b); Bah s 22(3)(b); B’dos s 16(3)(b); Dom s 16(3)(b); Gren s 16(3)(b); Guy s 15(3)(b); Mont s 16(3)
(b); St L s 16(3)(b); St V s 16(3)(b); T’dad s 20(3)(b).
135 (2002) 57 OR (3d) 607 Ont CA.
s 16(3); T’dad s 20(3).
137 (1866) LR 2 CP 174 Eng CCP.
138 [1954] 1 QB 45 Eng CA.
139 [1966] ALR 744 HCA.
s 16(2); T’dad s 20(2).
s 16(4); T’dad s 20(4).
s 16(4); T’dad s 20(4).
143 Bank of Nova Scotia v Williams (1976) 12 OR (2d) 709, 70 DLR (3d) 108 Ont HC.
s 16(5); T’dad s 20(5).
145 Szecket v Huang (1998) 42 BLR (2d) 1 Ont CA.
146 [1982] 2 WWR 377 Sask QB.
147 (2002) 57 OR (3d) 607 Ont CA.
s 16(5); T’dad s 20(5).
s 16(1); T’dad s 20(1).
s 16(2); T’dad s 20(2).
151 (2002) 57 OR (3d) 607 Ont CA.

Chapter 5
Corporate Personality
Introduction
One of the most fundamental principles of Commonwealth Caribbean
company law is the rule that a company incorporated under a Companies Act
is a legal entity separate and distinct from its members. What this means is
that a company is capable of enjoying rights and being subject to liabilities
different from those enjoyed or borne by its shareholders.1 This is captured in
company law theory by the metaphor that a company has a separate legal
personality.2 Indeed, the metaphor continues that on incorporation, a veil is
drawn between the company’s personality and that of its shareholders.3
The doctrine of separate legal personality is at the foundation of company
law, and helps to explain much of company law theory and practice.
Accordingly, this chapter is aimed at exploring the basic tenets of the doctrine,
the theoretical and practical problems occasioned by the doctrine and the
solutions which the law has provided to these problems. Because of its central
place in company law also, the separate legal personality doctrine is a
recurrent theme throughout this book.
Separate Legal Personality
The Salomon principle
The concept of separate legal personality was never at any stage expressly
spelt out in the provisions of any Commonwealth Caribbean company
legislation. As was seen in Chapter 1, such legislation has never provided
anything more than for subscribers to form themselves into an incorporated
company but have never stipulated as to the consequences of incorporation in
any detail. Instead, the concept of separate legal personality derives from the
1897 decision of the English House of Lords in Salomon v Salomon & Co Ltd.4
This case firmly established for the first time the separate legal personality of a
company as an implication of incorporation under the existing 1862 English
Companies Act.5 The facts and decision of this seminal case therefore deserve
a full consideration.
Salomon & Co Ltd was incorporated on July 28, 1892 with a capital of
£40,000, divided into 40,000 shares of £1 each. The company was incorporated
by Salomon for the purpose of taking over a profitable boot and
manufacturing business which he had carried on for over thirty years. As a
result of family pressure and a desire to extend the business, he decided to
convert it into a limited liability company. The memorandum of association of
the company was subscribed by Salomon, and his wife and five of his children
as nominees for Salomon, each subscribing in cash for one share. It is useful to
note parenthetically that at that time the legislation (the Companies Act 1862)
required a company to have a minimum of seven members. Salomon
afterwards had 20,000 shares allotted to him, and as a result of this he held
20,001 of the 20,007 shares issued. The company almost immediately after its
incorporation in 1892 became insolvent, and a year later went into compulsory
liquidation.
In an action brought by a debenture-holder on behalf of himself and all the
other debenture-holders, including Salomon, against the company, the
liquidator counterclaimed that Salomon was personally liable for the debts of
the company since the company was formed by him and was merely his
nominee or agent and that the company was entitled to be indemnified by
Salomon against all debts owing by the company to creditors other than
Salomon.
Vaughn-Williams J at first instance, in accepting the argument advanced by
the liquidator, said:6
It seems to me, however, that when one considers the fact that these shareholders were mere nominees of
Mr. Salomon’s, that he took the whole of the profits, and that his intention was to take the profits without
running the risk of the debts and expenses, one must also consider the position of the unsecured trading
creditors, whose debts amount to some £11,000. As I have said, the company was a mere nominee of
Salomon’s … and therefore I wish, if I can, to deal with this case exactly on the basis that I should do if the
nominee, instead of being a company, had been some servant or agent of Mr. Salomon’s to whom he had
purported to sell his business.
On appeal from his judgment, the Court of Appeal upheld the decision of
Vaughn-Williams J, but for different reasons. The Court of Appeal held that
the whole transaction was contrary to the intent of the Companies Act and
that the company was a mere sham, and an ‘alias’, agent, trustee or nominee
for Salomon who remained the real proprietor of the business. Lopes LJ
opined of the Companies Act 1862:7
It was never intended that the company to be constituted should consist of one substantial person and six
dummies, the nominees of that person, without any real interest in the company. The Act contemplated the
incorporation of seven independent bona fide members, who had a mind and will of their own, and were
not the mere puppets of an individual who, adopting the machinery of the Act, carried on his old business
in the same way as before, when he was a sole trader.
Salomon appealed to the House of Lords, which unanimously reversed the

decision of the Court of Appeal and held that Salomon was not liable to either
the company or its creditors. The reason for the House so holding was that,
since the Companies Act merely required seven members holding one share
each for a company to be validly formed, Salomon & Co Ltd was a valid
company. Consequently, the business belonged to the company, Salomon &
Co Ltd, and not to Salomon, and that Salomon was the agent of the company
and not the company an agent of Salomon.
Lord Halsbury LC made the point in this terse syllogism:8
Either the limited company was a legal entity or it was not. If it was, the business belonged to it and not to
Salomon. If it was not, there was no person and no thing to be an agent at all; and it is impossible to say at
the same time that there is a company and there is not.
Lord Macnaughten, whose judgment is a legal classic, stated the law as

follows:9
The company is at law a different person altogether from the subscribers … and though it may be that after
the incorporation the business is precisely the same as it was before, and the same hands receive the
profits, the company is not in law the agent of the subscribers or trustee for them. Nor are the subscribers,
as members liable, in any shape or form, except to the extent and in the manner provided by the Act.
Early academic opinion on the House of Lords’ decision criticised it as going

too far.10 Be that as it may, the principle in Salomon v Salomon is today
generally regarded as too firmly established to be questioned11 and courts
sometimes go to logical extremes in applying what is now called the Salomon
principle. The decision of the Privy Council in the New Zealand case of Lee v
Lee Air Farming Ltd12 presents a good example of this.
The facts of that case are that Lee incorporated a company for the purpose
of carrying on the business of aerial top-dressing. Lee was the beneficial
owner of all the shares in the company and was its sole ‘governing director’.
As governing director he had all the powers of management vested in him.
Lee was also appointed chief pilot of the company.
As was required of companies under New Zealand statutory law, Lee
caused the company to insure against liability to pay compensation under the
Workmen’s Compensation Act. Lee was killed in a flying accident. Lee’s
widow brought an action to recover compensation from the company (i.e.
from their insurers), and a question arose as to whether Lee was an employee
of the company for purposes of the legislation.
The Court of Appeal of New Zealand held that Lee was not to be regarded
as a ‘worker’ within the meaning of the Workmen’s Compensation Act, as he
was not sufficiently separate from the company. The Privy Council overturned
that decision on the basis of a strict application of the Salomon principle.
According to the Privy Council, Lee and his company were separate and
distinct legal persons. As such they were capable of entering, and had entered,
into contractual relationships under which Lee became, qua chief pilot, a
‘worker’ of the company. In his capacity as governing director he could, on
behalf of the company, give himself orders in his other capacity of pilot.
Consequently, the relationship between himself as pilot and the company was
that of employer and ‘worker’.
Separate legal personality and constitutional fundamental

rights
The Antiguan Privy Council decision in AG v Antigua Times Ltd13 is perhaps

not as dramatic an application of the Salomon principle as Lee v Lee Air
Farming Ltd.14 However, AG v Antigua Times Ltd15 discloses an equally
important aspect of the logic of the separate legal personality metaphor. That
case establishes that a company can claim to enjoy all the relevant
fundamental rights enshrined in modern Commonwealth Caribbean
constitutions.
In this case, a question arose as to whether the respondent, a company
registered in Antigua, could initiate proceedings under section 15 of the
Constitution of Antigua on the ground that it was a ‘person’ within the
meaning of that section. Lord Fraser, in delivering the judgment of the Privy
Council that it could, expressed the following view on the right of a company
to enjoy the fundamental rights and freedoms guaranteed under the Antiguan
Constitution:16
Having regard to the important place in the economic life of society occupied by corporate bodies, it
would seem natural for such a modern Constitution, dealing with inter alia rights to property, to use the
word ‘person’ to include corporations. As long ago as 1922 a view to that effect was expressed by Isaacs J
in The Australasian Temperance and General Mutual Life Assurance Society Ltd v Howe 31 CLR 290 at 301,
and in 1930 in Leske v SA Real Estate Investment Company Ltd 45 CLR 22 at 25 Rich and Dixon said this:
The time has passed for supposing that the legislature would use the word ‘person’ only to signify a
natural person in dealing with a class of business in which the utility of the proprietary company has
long been made manifest.
That statement was made with reference to an Act dealing with contracts for the sale of land but it is
also applicable … to a Constitution such as that of Antigua which includes provisions safe guarding the
ownership of property.
Of course, the rights and freedoms which are enjoyed by a company must
depend on the provisions of the sections respectively protecting them. In other
words, some of the fundamental rights and freedoms protected under the
Constitution cannot apply to companies but others can. In setting out this
principle, Lord Fraser relied on the following passage in the judgment of
Lewis CJ in the Court of Appeal of the West Indies Associated States Supreme
Court (Antigua) where Lewis CJ said:17
It is obvious that there are certain rights and freedoms in … the Constitution which from their very nature
cannot be enjoyed by a corporation, e.g. the right to life … the right to personal liberty … and the right to
be protected from inhuman treatment …; but there is nothing in principle which prevents a corporation
from enjoying the rights relating to the compulsory acquisition of property …, the securing of protection
of the law … and protection from discrimination on various grounds.
Separate legal personality and the ‘one-man company’
A particular application of the Salomon principle which merits special mention

is its applicability where one person is the sole beneficial owner of the shares
of a company, or to put it another way, its applicability to what is sometimes
called the ‘one-man’ or more recently the ‘one-person’ company. In such a
case, the beneficial owner may be in fact indistinguishable from the company.
This notwithstanding, Salomon case itself is early authority that the corporate
personality principle applies to such a company.18 To the same effect is the
well-known case of Macaura v Northern Assurance Ltd.19 The facts of this case
are that Macaura owned an estate in Ireland. He insured some timber on the
estate in his own name. He later transferred the timber and estate to a
company in which he was the beneficial owner of all the shares, but he forgot
to assign the insurance policy to the company and to obtain the necessary
consents of the insurers. The timber was substantially destroyed by fire and
Macaura sought to claim on the insurance policies. The question was whether
he had an insurable interest in the property of the company, given that he was
the beneficial owner of all of the shares of the company. The English House of
Lords, applying the Salomon principle, held that Macaura had no insurable
interest in the property of the company; only the company had an insurable
interest in its property.
The legal position of the ‘one-man’ company in regional company law is
now governed by express provision in the Companies Acts. All of these Acts,
except the Acts in the Bahamas and Belize, contain a provision stating that
‘one or more persons may incorporate a company’.20 The provision in the St
Christopher/Nevis Act is that ‘the number of persons who … may form a
company may be one or any greater number’.21
Corporate personality and corporate groups
Another particular application of the Salomon principle which is of some

interest is in the area of corporate groups. Typically, a corporate group is made
up of a holding company and its subsidiaries. A holding company is defined in
Commonwealth Caribbean Companies Acts as one which controls its
subsidiary.22 This control is usually achieved and expressed by the holding
company owning sufficient shares in its subsidiary to determine who are the
directors of the subsidiary and how the affairs of the subsidiary is conducted.23
Often, the holding company controls a number of subsidiaries and the
respective businesses of the companies within the group are managed as an
integrated whole and in economic reality constitute one economic unit.24
These are referred to as affiliated companies in Commonwealth Caribbean
companies Acts.25
The question as to what is the legal status of a holding company and
subsidiaries within a corporate group was extensively considered in the recent
English Court of Appeal decision in Adams v Cape Industries plc.26 In this case,
it was reaffirmed that English law has not developed any distinct body of rules
applicable to groups and that the Salomon principle applies equally to
companies within a corporate group.
The facts of this case are that Cape, an English company, mined asbestos in
South Africa. The products were marketed in the USA through a complex
range of subsidiaries or associated companies, including NAAC, Capasco, CPC
and AMC. In a series of actions, a large number of factory workers who had
suffered from inhaling asbestos dust obtained judgment against the holding
company, Cape. They sought to have the judgment enforced against Cape in
England on the basis that it had been present in the USA. In support of the
argument that Cape had been present in the USA, the so-called single
economic unit argument, which asserted that Cape and its subsidiaries was
really one economic unit, was raised.
The Court of Appeal, after a review of the existing cases held that in
English law, each company in a group is a separate entity, and consequently
Cape could not be said to have been present in the USA because its
subsidiaries were present there. In reaching this conclusion, Slade LJ, who
delivered the judgment of the Court, stated:27
There is no general principle that all companies in a group are to be regarded as one. On the contrary, the
fundamental principle is that ‘each company in a group of companies (a relatively modern concept) is a
separate legal entity possessed of separate legal rights and liabilities’: The Albazero [1977] AC 774, 807 per
Roskill LJ.
Our law, for better or worse, recognizes the creation of subsidiary companies, which though in one
sense the creatures of their parent companies, will nevertheless under the general law fall to be treated as
separate legal entities with all the rights and liabilities which would normally attach to separate legal
entities.
Generally speaking, there is nothing in Commonwealth Caribbean company

legislation to displace the law as stated by Slade LJ that companies in a
corporate group are to be treated as separate legal entities. The provisions in
the Acts in Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago which allow a
holding company to consolidate in its financial statements the accounts of each
of its subsidiaries28 are not intended to in any way subvert the Salomon
principle.
Separate legal personality and limited liability
Another fundamental company law concept which must be discussed in the

context of separate legal personality is the concept of limited liability. Separate
legal personality and limited liability are disparate, but interrelated, corporate
law concepts. It is not surprising, therefore that there is a tendency to equate
the two concepts. In order to understand fully many corporate law doctrines
therefore, it is important to establish the distinction between separate legal
personality and limited liability.
As has just been seen, separate legal personality concerns the company’s
capacity to acquire legal rights and incur legal responsibilities in its own name.
This implies that the shareholders of a company are not entitled without more
to the company’s rights nor are they liable for its obligations. Put another way,
the concept of separate legal personality means that it is the company, not its
shareholders, which must enforce rights acquired by it and the company, and
not its shareholders, which is liable for obligations incurred on its behalf. The
concept of limited liability under the Companies Acts, on the other hand,
operates to allow a company ultimately to recover a contribution from its
shareholders equal to the value as determined by the directors at which the
shares held by the shareholder is issued,29 to enable the company to discharge
its obligations. Limited liability, in other words, describes the extent to which a
company can require its shareholders to make a financial contribution based
on the value of the shares issued to him to meet the company’s liabilities. As
such the concept of limited liability is a logically distinct concept from separate
legal personality.
Limited liability was first introduced into Commonwealth company
legislation by the English Joint Stock Companies Act 1855. Prior to this Act in
England, complexly drafted clauses in deeds of settlement and convoluted
legal procedures were devised to achieve the effect of limited liability. In the
old case of Hallett v Dowdall30 the validity of these clauses was upheld by the
English Court of Exchequer Chamber as binding on third parties with express
notice. Commonwealth Caribbean Companies Acts, including the most recent
Acts, have embraced and institutionalised the concept of limited liability.
Under the Acts in Anguilla, Antigua, Barbados, Dominica, Guyana,
Montserrat, St Lucia and St Vincent, a company must be registered as limited
by shares or, except in Guyana, as a non-profit company which is defined as a
company without a share capital.31 Under the Acts in the Bahamas, Belize,
Jamaica, and Trinidad and Tobago a company can either be registered as
unlimited32 or in Anguilla, the Bahamas, Belize, Jamaica, St Christopher/Nevis
and Trinidad and Tobago as limited by shares or guarantee.33
In the case of a company limited by shares, the shareholder is liable to
contribute the value of the shares as determined by the directors which are
held by him.34 However, since shares may not be issued until fully paid in
Anguilla, Antigua, Barbados, Dominica, Guyana, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago, shareholders are under no further liability
when once shares are issued.35 In the case of an unlimited company, the
members are in effect guarantors of its obligations without any restriction on
their personal liability.36 Finally, in the case of a company limited by
guarantee, each member is liable to contribute a specified amount to the
capital of the company in the event of its being wound up while he is still a
member or within one year of his ceasing to be a member.37
‘Piercing or Lifting the Corporate Veil’
The foregoing makes it plain, then, that separate legal personality and limited
liability as corporate law principles are firmly entrenched in Commonwealth
Caribbean company law. There is no doubt, however, that separate legal
personality and limited liability can be and have been abused by incorporators.
An important company law response to the problem of these abuses is the
removal of the veil of incorporation and making the shareholders liable for the
debts and other obligations of the company, using what is variously called
‘piercing the veil’ and ‘lifting the veil’.
It was earlier noted that incorporation is said to cast a veil between the
members of a company and the company itself, and that the Salomon principle
renders this veil almost impenetrable. In other words, the shareholders and
their company are to be treated as separate and distinct legal entities with the
company having its own legal personality. The courts, however, have on some
occasions disregarded the Salomon principle and in so doing have what is
sometimes called ‘pierced the veil’ and other times ‘lifted the veil’. Similarly, it
has always been recognised that in the words of Devlin J ‘the legislature can
forge a sledgehammer capable of cracking open the corporate shell’38 or put
more directly, that legislation may authorise lifting of the veil.
The primary concern of what follows is to explore the approach of the
courts to lifting the veil both under case law and under legislation. The courts’
approach under case law will be discussed first.
Under case law

Overview
The courts have in exceptional cases ignored the Salomon principle and
pierced the corporate veil. The problem is that the courts have not done this in
any systematic way and it is difficult to find any unifying principle that
explains their approach to piercing the veil. As was said by Rogers AJA in the
Australian case of Briggs v James Hardie & Co Pty Ltd39 in describing the
problem posed by the case law on piercing the corporate veil:
The threshold problem arises from the fact that there is no common, unifying principle, which underlies
the occasional decision of courts to pierce the corporate veil. Although an ad hoc explanation may be
offered by a court which so decides, there is no principled approach to be derived from the authorities.
What follows is a discussion of the general explanations which are most often
invoked in the authorities for disregarding the Solomon principle.
The ‘mere façade’ test
In the Scottish House of Lords case of Woolfson v Strathclyde Regional

Council,40 Lord Keith asserted the law to be that the courts will only depart
from a strict observance of the Salomon principle and pierce the corporate veil
where special circumstances exist indicating that the company is a mere
façade concealing the true facts. In the leading English Court of Appeal case of
Adams v Cape Industries plc,41 Slade LJ accepted that the ‘mere façade’
exception adumbrated by Lord Keith as the ‘one well-recognised exception to
the rule prohibiting the piercing of the “corporate veil”’. The mere façade test
has also been accepted in the English cases of Trustor AB v Smallbone42 and
Gencor ACP Ltd v Dalby.43 Woolfson v Strathclyde Regional Council44 is
therefore an important case in explaining the ‘mere façade’ test.
The facts of this case are that Wolfson ran a shop in Glasgow specialising in
wedding garments. In 1966, the shop premises were compulsorily acquired for
road development. Part of the premises was owned by Wolfson and the
remainder by Solfred Holdings Ltd, whose shares were owned by Wolfson and
his wife. Wolfson and Solfred Holdings Ltd received compensation for the
value of the land, but their claim for compensation for disturbance of the
business was refused. This was because the business was operated by M & L
Campbell (Glasgow) Ltd, a company which was also owned by the Wolfsons.
Though Campbell occupied the premises, it had no interest in the land.
For a successful claim for disturbance, the regulations required that
occupation and a legal interest in land coincide. This would require the court
to lift the corporate veil and treat Wolfson and the two companies as one. In
refusing to lift the corporate veil, Lord Keith, who delivered the judgment of
the House, stated that the true principle to be applied in lifting the veil is that
‘it is only appropriate to pierce the corporate veil where special circumstances
exist indicating that it is a mere façade concealing the true facts’.45 The facts in
the instant case did not reveal any special circumstances suggesting that the
corporate structure involved was a mere façade concealing the true facts.
Therefore, the veil would not be lifted.
Principles on which the façade test is applied
In Adams v Cape Industries plc46 it was noted that ‘façade’ encapsulated the
medley of epithets47 which were used in earlier cases as justification for the
courts lifting the veil. The Court of Appeal acknowledged, however, that these
epithets provided ‘sparse guidance’ as to the principles which should guide the
courts in applying the façade test.
Without itself essaying a comprehensive definition of these principles, the
Court of Appeal, in what has been described by Gower as ‘a mammoth
judgment, involving a number of issues, subjecting lifting the veil to the most
exhaustive treatment that it has yet received in the English (or Scottish)
courts’,48 considered the circumstances in which it is appropriate to lift the
corporate veil. Counsel in the case had submitted that the court will lift the
corporate veil when the defendant by the device of a corporate structure
attempts to evade (i) limitations imposed on his conduct by law; (ii) such rights
of relief against him as third parties already possess; and (iii) such rights of
relief as third parties may in the future acquire. The exegesis of the Court of
Appeal consisted of an extensive review of the cases in the context of these
conditions and can conveniently be explored here using these conditions as
headings.
Corporate structure a device to evade limitations imposed on

conduct by law
The Court Appeal in Adams v Cape Industries plc49 accepted that this
condition entitles the court to lift the veil. The Court cited the case of Jones v
Lipman50 as an example of a case where the courts lifted the veil because the
corporate structure was being used to evade limitations imposed on the
defendant’s conduct by law. The facts of this case are that Jones sold to
Lipman a house by a written contract but refused to complete the sale,
offering instead damages for breach. In order to avoid an order for specific
performance, he transferred the house to a company owned by him. It was
held that specific performance could be ordered against the company.
According to Russell J this was because the company was ‘the creature of the
first defendant, a device and sham, a mask which he held before his face to
avoid recognition by the eye of equity’.51
Slade LJ opined that this case shows that where a façade is alleged, the
motive of the perpetrator may be highly material.52
To the same effect as Jones v Lipman53 is the English Court of Appeal case
of Gilford Motors Co Ltd v Horne.54 The facts of this case are that Horne, a
former managing director of the plaintiff company, entered into a covenant in
a service agreement not to solicit customers from the plaintiff company. Upon
leaving his employment, he attempted to evade his obligation not to solicit
customers by forming a company which undertook the soliciting. It was held
by the Court of Appeal that the company was being used as a mere sham to
cloak Horne’s wrong-doings, and that, consequently, an injunction would be
granted against both Horne and the company to restrain Horne from
committing the breach.
Corporate structure a device to evade rights of relief already
possessed by third parties
This condition was also accepted by the Court of Appeal in Adams v Cape
Industries plc55 as entitling the court to lift the corporate veil.
Trustor AB v Smallbone56 presents a good example of a case where the
corporate structure was used as a device to evade rights of relief already
possessed by a third party and where the corporate veil was lifted. In this case,
£39m had gone missing from the claimant company. £20m of the missing sum
ended up in I Ltd, a company which was basically a front for Smallbone, the
managing director of the claimant company. In order to pursue its claim
against Smallbone for the £20m which belonged to it, the claimant company
sought to pierce the corporate veil to establish that receipt by I Ltd was receipt
by Smallbone. Sir Andrew Morritt V-C held, applying the test laid down in
Wolfson, that I Ltd was a device used for the receipt of the claimant
company’s money which had been misapplied by Smallbone.
Another example of the application of this principle is to be found in the
English Court of Appeal case of Re a Company.57 In this case, after
proceedings against the defendant had been instituted by the plaintiffs against
the defendant, the defendant sought to use a chain of companies to insulate
assets from the reach of the plaintiffs. In these circumstances, it was held that
the corporate veil would be pierced to allow the plaintiffs to pursue the assets.
Ord v Bellhaven Pubs Ltd,58 however, is a case where the English Court of
Appeal refused to lift the veil on the principle under discussion. That case
concerned an action instituted in 1991 by the plaintiffs against the defendants,
a subsidiary in a corporate group, alleging that the defendants had
misrepresented the turnover and profitability of a public house which the
plaintiffs had leased from them. As a result of the restructuring of the group
assets in 1992, the defendants no longer had substantial assets. Consequently,
the plaintiffs sought leave to substitute the defendants with either the holding
company or another wholly owned subsidiary in the group.
The Court of Appeal, in refusing to lift the corporate veil, accepted that the
court has jurisdiction to pierce the corporate veil on the Wolfson principle.
However, as there were no allegations of impropriety in the group
restructuring, no evidence of transfer away of the assets of the defendant
company at an undervalue, no evidence of improper motive, and no evidence
that the restructuring was undertaken to evade any liability towards the
plaintiffs, the Court of Appeal held that it would not be appropriate to lift the
corporate veil to substitute the defendants with either the holding company or
another wholly owned subsidiary.
Corporate structure a device to evade such rights of relief as

third parties may in the future acquire
The Court of Appeal in Adams v Cape Industries plc59 was emphatic that this
condition as a matter of law does not entitle the court to lift the veil. Counsel
had urged on the Court that the purpose of the corporate structure in the
Adams v Cape case was in substance that Cape would have the practical
benefit of the group’s asbestos trade in the USA without the risk of tortious
liability, and that for this reason the veil should be lifted. In rejecting this
argument, Slade LJ said:60
we do not accept as a matter of law that the court is entitled to lift the corporate veil as against a defendant
company which is a member of a corporate group merely because the corporate structure has been used so
as to ensure that the legal liability (if any) in respect of particular future activities of the group (and
correspondingly the risk of enforcement of that liability) will fall on another member of the group rather
than the defendant company. Whether or not this is desirable, the right to use the corporate structure in
this way is inherent in our corporate law … in our judgment, Cape was in law entitled to organize the
group’s affairs in that manner and … to expect that the court would apply the principle in Salomon v
Salomon [1897] AC 22 in the ordinary way.
Agency principles
In Adams v Cape Industries plc,61 the English Court of Appeal accepted as

settled law that if it can be shown that the company acted as an agent of its
members or a subsidiary as agent of its parent, then, on ordinary agency
principles liability will attach to all or any of its individual members and not
the company or to the principal parent and not to the subsidiary. Admittedly,
the case of Salomon v Salomon62 makes it plain that a company is not
automatically an agent of its members. However, the House of Lords in that
case did not deny the possibility of a company being in fact an agent of its
members. The question as to whether or not a company is held to be the agent
of its members or a subsidiary the agent of its parent will depend on whether
factual circumstances can be interpreted as revealing an agency of the
company for its members or the subsidiary for its parent.63
Where there is an express agreement that a company should act as an agent
of its shareholders, no problem of interpretation arises. The company will be
held to be the agent of its shareholders.64 The real problem arises where an
agency relationship has to be inferred from the factual circumstances.
The leading case on an agency relationship of a company with its members
which is not express but which is inferred from the surrounding factual
circumstances is the English case of Smith, Stone & Knight Ltd v Birmingham
Corpn.65 The facts of this case are that a company acquired a partnership
concern, registered it as a subsidiary company but carried on its business as
part of the parent company’s business exactly as if the subsidiary was still a
partnership. The profits of the subsidiary were treated as the profits of the
parent company. When the premises of the subsidiary were compulsorily
acquired by the defendant corporation, the parent company, claimed
compensation. It was held that the parent, and not merely the subsidiary, was
entitled to claim compensation, on the ground that the subsidiary was
operating as an agent on behalf of the parent company.
The judgment of Atkinson J is interesting. According to him, the overall
question of whether the subsidiary was carrying on the business as the
parent’s business or its own was a question to be determined from the factual
circumstances. In answering it, six factors were to be weighed. These were (i)
whether the profits of the subsidiary were those of the parent company; (ii)
whether the persons conducting the business of the subsidiary were appointed
by the parent company; (iii) whether the parent company was the ‘head and
brains’ of the trading venture; (iv) whether the parent company governed the
adventure; (v) whether the profits made by the subsidiary company were
made by the skill and direction of the parent company; and (vi) whether the
parent company was in effective and constant control of the subsidiary. Based
on a review of the facts, Atkinson J concluded that an agency relationship
existed between the subsidiary and the parent company.
The approach advocated by Atkinson J has, with some justification, been
described as conceptually incoherent as (iv), (v) and (vi) cover very much the
same ground,66 and in the English Court of Appeal case of J H Rayner
(Mincing) Ltd v Department of Trade,67 Kerr LJ commented that, in his view,
no conclusion of principle can be drawn from Atkinson J’s judgment.
It appears from the case authority that something which may be of much
significance in the courts inferring an agency relationship is evidence of
serious impropriety which the court wishes to frustrate. This occurred in the
English Court of Appeal case of Wallersteiner v Moir68 on facts described by
Lord Denning MR as follows:
It is clear that Dr. Wallersteiner used many companies, trusts, or other legal entities as if they belonged to
him. He was in control of them as much as the ‘one man company’ is under the control of the one man
who owns all the shares and is the chairman and managing director. He made contracts of enormous
magnitude on their behalf on a sheet of notepaper without reference to anyone else … He used their
moneys as if they were his own.
In these premises, Lord Denning MR stated of the companies:

I am quite clear that they were just the puppets of Dr. Wallersteiner. He controlled their every movement.
Each danced to his bidding. He pulled the strings. No one else got within reach of them. Transformed to
legal language, they were his agents as he commanded. He was the principal behind them. I am of the
opinion that the court should pull aside the corporate veil and treat these concerns as being his creatures –
for whose doings he should be, and is, responsible.
Lord Denning MR’s description of the subsidiaries as ‘puppets’ ‘dancing’ to the

bidding of Dr Wallersteiner underlines the significance of evidence of serious
impropriety, in the court’s willingness to infer agency.
An agency relationship was similarly inferred in the English case of Re FG
(Films) Ltd,69 where there was evidence of serious impropriety which the court
wished to frustrate. The facts of this case were that an American parent
company sought to use a company which it incorporated in England to enable
films produced in its name to qualify as British under the Cinematograph
Films Act 1938 and thereby to attract certain tax advantages that were only
available for films which qualified as British films. Two of the three directors
of the company were English and the third, the president of the American
parent, who held ninety of the company’s hundred issued shares. Other than
its registered office, the company had no premises and it had no staff. The
English company contracted with its American parent to make the film in
question, but the financing of the film was to be supplied by the American
parent. All the contracts and arrangements for making the film were made by
the American parent in the name of the English company. On these facts, it
was held that the film did not qualify as a British film, since it had not been
made by the English company which was merely the agent and nominee of
the American parent.
The point cannot be made too strongly, however, that where there is no
evidence of serious impropriety, the courts will be slow to infer an agency,
even in the case of an under-capitalised company in a corporate group. As
Staughton LJ opined in Atlas Maritime Co SA v Avalon Maritime Ltd, The
Coral Rose:70
The creation or purchase of a subsidiary company with minimal liability, which will operate with the
parent’s funds and on the parent’s directions but not expose the parent to liability, may not seem to some
the most honest way of trading. But it is extremely common in the international shipping industry and
perhaps elsewhere. To hold that it creates an agency relationship between the subsidiary and the parent
would be revolutionary doctrine.
The ‘single economic unit’ argument
In the English Court of Appeal case of Re Southard & Co Ltd,71 Templeman LJ

outlined the problem posed by corporate groups for company law. He
observed:72
English company law possesses some curious features, which may generate curious results. A parent
company may spawn a number of subsidiary companies, all controlled directly or indirectly by its
shareholders of the parent company. If one of the subsidiary companies, to change the metaphor, turns out
to be the runt of the litter and declines into insolvency to the dismay of its creditors, the parent company
and the other subsidiary companies may prosper to the joy of the shareholders without any liability for the
debts of the insolvent subsidiary. It is not surprising that, when a subsidiary company collapses, the
unsecured creditors wish the finances of the company and its relationship with the other members of the
group to be narrowly examined, to ensure that no assets of the subsidiary company have leaked away, that
no liabilities of the subsidiary company ought to be laid at the door of other members of the group, and
that no indemnity from or right of action against any other company, or against any individual, is by some
mischance overlooked.
To ascertain whether the relationship between the parent company and a

subsidiary company should be examined, the court has to lift the corporate
veil. Two arguments are usually advanced for lifting the veil in the
circumstances of corporate groups.73 The first is the agency argument, which
has already been examined. The second is what is sometimes called the ‘single
economic unit’ argument. This argument posits that all the companies in a
corporate group should be regarded as a façade as, in economic reality, they
are one and should be regarded in law as such. The single economic unit
argument will now be considered.
The leading case which lends some support to the single economic unit
argument is the Court of Appeal decision in DHN Food Distributors Ltd v
Borough of Tower Hamlets.74 The facts of this case are that DHN Food
Distributors Ltd carried on business as grocery and provision merchants. The
premises from which the company traded were owned by a wholly owned
subsidiary of the company, Bronze Investment Ltd, and the vehicles used in
the business were owned by another wholly owned subsidiary, DHN Food
Transport Ltd. The business premises of DHN Food Distributors Ltd having
been compulsorily acquired by Tower Hamlets London Borough Council, and
no suitable alternative premises being available, the company and its two
subsidiaries went into voluntary liquidation.
Had the business, the business premises and the vehicle used in the business
been in the one ownership, compensation would have been payable under the
relevant legislation, both for the value of the land compulsorily acquired and
for the disturbance of the business. In the circumstances, however, the
acquiring authority paid compensation for the value of the land to the
registered proprietors, Bronze Investment, but contended that no
compensation for disturbance was payable, since Bronze Investment had
carried on no business, the business which had been disturbed being the
business of DHN Food Distributors, which company, having no interest in the
land, had no claim under the legislation.
The Court of Appeal held that, as a group, the three companies were
entitled to compensation not only for the value of the land, but also to
compensation for the disturbance of the business. Goff LJ stated that the case
was one in which the court was ‘entitled to look at the realities of the situation
and to pierce the corporate veil’.75 Lord Denning held that the three companies
‘should, for the present purposes, be treated as one’.76 Shaw LJ thought that the
three companies should be treated as ‘a single entity’.77
It is important to determine what this case decides on the single economic
unit explanation. Lord Denning MR said:78
We all know that in many respects a group of companies are treated together for the purpose of general
accounts, balance sheet, and profit and loss account. They are treated as one concern. Professor Gower in
Principles of Modern Company Law, 3rd ed. (1969), p.216 says: ‘there is evidence of a general tendency to
ignore the separate legal entity of various companies within a group, and to look instead at the economic
entity of the whole group’.
This statement could easily be interpreted as suggesting a principle that the

court is entitled to pierce the corporate veil whenever a group of companies is
involved. However, both Goff LJ and Shaw LJ made it plain that they were
not basing their decision on any such principle. In this regard, Goff LJ stated
that he ‘would not at this juncture accept that in every case where one has a
group of companies one is entitled to pierce the veil’79 and Shaw LJ indicated
that he was basing his decision on ‘the facts of the case’.80
The DHN Food Distributors case was closely considered by the Scottish
House of Lords in Woolfson v Strathclyde Regional Council81 when the single
economic entity argument was advanced with reliance on the DHN Food
Distributors case. As has been seen, Lord Keith of Kinkel, with whom Lord
Wilberforce, Lord Fraser of Tullybelton and Lord Russell of Killowen agreed,
poured considerable doubt on the suggestion in the DHN Food Distributors
case that there is a general principle that the court can pierce the corporate
veil whenever a corporate group was involved. Lord Keith stated the true
principle to be that ‘it is only appropriate to pierce the corporate veil where
special circumstances exist indicating that it is a mere façade concealing the
true facts’ and expressed doubt as to whether this principle was correctly
applied by the Court of Appeal in the DHN Food Distributors case. Lord Keith
then explained the DHN Food Distributors case as turning on is own special
facts.
The upshot of the exhaustive treatment of lifting the veil in the English
Court of Appeal decision in Adams v Cape Industries plc82 is to confirm the
conclusion in Wolfson v Strathclyde Regional Council that the Court of Appeal
decision in the DHN food Distributors case was an aberration. Adams v Cape
Industries plc83 also affirms the principle that ‘each company in a group of
companies … is a separate legal entity possessed of separate legal rights and
liabilities’ which is ‘now unchallengeable by judicial decision’.84
The cases subsequent to Cape have almost universally rejected the
suggestion that a corporate group might be regarded in law as a single unit.
For instance, Robert Walker J in Re Polly Peck International plc (No 3)85 denied
that it was open to the court, after the Court of Appeal decision in Cape, to
accede to a submission that the group of companies in that case could be
treated as a single economic unit. To do so would be to recognise a new
exception to the Salomon principle which was rejected in Cape. The English
Court of Appeal decision in Ord v Belhaven Pubs Ltd86 also rejected the single
economic unit argument. In that case, the plaintiffs had sought to invoke the
single economic argument for lifting the veil to substitute the defendant
company with either the holding company or another wholly owned
subsidiary in the group since the defendant, following a restructuring of the
group, no longer had substantial assets. Hobhouse LJ commented on the trial
judge’s decision to permit the substitution, apparently on the basis of the single
economic unit argument, as follows:87
The approach of the judge in the present case was simply to look at the economic unit, to disregard the
distinction between the legal entities which were involved and to say: since the company cannot pay, the
shareholders who are the people financially interested should be made to pay instead. That of course is
radically at odds with the whole concept of corporate personality and limited liability and the decision of
the House of Lords in Salomon v Salomon & Co Ltd [1897] AC 22.
The interests of justice
As was just seen, the ‘mere façade’ test was accepted by the English Court of
Appeal in Adams v Cape Industries plc.88 The mere façade test has also been
accepted in the English cases of Trustor AB v Smallbone89 and Gencor ACP Ltd
v Dalby.90 In all of these cases, the courts expressed considerable doubts on
authorities which suggested that there is a principle that the corporate veil
may be pierced where it is necessary to do so in the interests of justice.91 The
interests of justice may provide the policy impetus for piercing the veil, but,
according to these cases, the only principle on which the courts will pierce the
veil is that the corporate structure is a mere façade concealing the true facts.
Under legislation
There are numerous examples of provisions in various statutes, including the

Companies Acts, authorising lifting of the corporate veil. Given the aim of our
enquiry, namely to discover the approach of the courts to legislation which
may be interpreted as authorising lifting of the veil, little purpose would be
served here in listing and going through these statutes. What is more useful, it
is suggested, is to identify the interpretative stance which courts will take in
approaching such legislation.
It is for this reason that the English House of Lords’ decision of Dimbley &
Sons v National Union of Journalists92 assumes enormous importance. In this
case, Lord Diplock enunciated the approach which the courts ought to bring to
these statutes. He said:93
My Lords, the reason why English statutory law, and that of other trading countries, has long permitted the
creation of corporations as artificial persons distinct from their individual shareholders and from that of
any other corporation even though the shareholders of both companies are identical is to enable business
to be undertaken with limited financial liability in the event of the business proving to be a failure. The
‘corporate veil’ in the case of companies incorporated under the Companies Acts is drawn by statute and it
can be pierced by some other statute if such other statute so provides; but in view of the raison d’etre and
its consistent recognition by the courts since Salomon v A Salomon & Co Ltd [1897] AC 22, one would
expect that any parliamentary intention to pierce the corporate veil would be expressed in clear and
unequivocal language. I do not exclude the possibility that even in the absence of express words stating
that in specified circumstances one company although separately incorporated, is to be treated as sharing
the same legal personality of another, a purposive construction of the statute may nevertheless lead
inexorably to the conclusion that such must have been the intention of Parliament.
In this case, it was argued for the NUJ that, because TBF Printers Ltd and TBF
Ltd were operating companies with identical shareholding and were
companies of which a single holding company had control, TBF Printers Ltd
and TBF Ltd were ‘an employer who is a party to a dispute’ between the NUJ
and TBF Ltd within the meaning of that phrase where it is used in section
17(3) of the Employment Act 1980. The House of Lords held that the phrase
could not be so interpreted and that the companies should be treated as
separate entities.
Separate Legal Personality and Corporate Civil and
Criminal Liability
Rules of attribution
Another area in which the Salomon v Salomon doctrine poses significant

jurisprudential challenges is in reconciling the doctrine of separate legal
personality with the imposition of civil and criminal liability on companies.
The judgment of Lord Hoffmann in the Privy Council decision from New
Zealand of Meridian Global Funds Ltd v Securities Commission94 provides a
neat introduction to the problem. Lord Hoffmann explained the problem as
follows:95
A company exists because there is a rule (usually in a statute) which says that a persona ficta shall be
deemed to exist and to have certain of the powers, rights and duties of a natural person. But there would
be little sense in deeming such a persona ficta to exist unless there were also rules to tell one what acts
were to count as the acts of the company. It is therefore a necessary part of corporate personality that there
should be rules by which acts are attributed to the company.
Lord Hoffmann then noted that the rules by which acts are attributed to a
company are called ‘the rules of attribution’. He went on to set out these rules
as follows:96
The company’s primary rules of attribution will generally be found in the constitution, typically the
articles of association, and will say things such as ‘for the purpose of appointing members of the board, a
majority vote of the shareholders shall be the decision of the company’ or ‘the decisions of the board in
managing the company’s business shall be the decision of the company’. There are also primary rules of
attribution which are not expressly stated in the articles but implied by company law, such as ‘the
unanimous decision of all the shareholders in a solvent company about anything which the company under
its memorandum of association has power to do shall be the decision of the company’.
Finally, Lord Hoffmann recognised the limits of corporate law to provide in

itself a complete framework for attribution. Thus, he concluded on this
matter:97
These primary rules of attribution are obviously not enough to enable a company to go out into the world
and do business. Not every act on behalf of a company could be expected to be the subject of a resolution
of the board or a unanimous decision of the shareholders. The company therefore builds upon the primary
rules of attribution by using general rules of attribution which are equally available to natural persons,
namely, the principles of agency. It will appoint servants and agents whose acts, by a combination of the
general principles of agency and the company’s primary rules of attribution, count as the acts of the
company. And having done so, it will also make itself subject to the general rules by which liability for
the acts of others can be attributed to natural persons, such as estoppel or ostensible authority in contract
and vicarious liability in tort.
In summary, Lord Hoffmann’s exegesis reveals two sets of rules by which

liability may be attributed to a company. These are, first, those rules derived
from the constitution of the company as to which organ of the company shall
be regarded as the company for any specific purpose. Application of these
rules involves ‘the identification of the natural person or persons who are to
be regarded as representing the juridical person for the purposes of the
substantive rule in question’.98 The second set of rules are those based on basic
agency and vicarious liability principles applied with some modification to
companies.
Attribution of corporate civil liability
Application of the second set of rules has led to what is called the agency
approach to attributing liability to a company. The agency approach, as we
shall see, is usually employed in attributing contractual and tortious liability.
Under the agency approach, a company is liable for the acts of an agent or
employee acting within the scope of his authority or in the course of his
employment.
For the most part the second set of rules have proven to be adequate in
attributing civil liability and the first set of rules, the primary rules, are rarely
ever invoked. One of the rare occasions on which primary rule analysis was
invoked in attributing civil liability was in the recent English House of Lords’
decision in Stone & Rolls Ltd v Moore Stephens (A firm).99
The facts of this case are that the appellant company, which was owned,
controlled and managed by S, employed the respondent firm of chartered
accountants as its auditors. S, during the two years in which the respondent
firm were auditors of the appellant company, engaged in dishonest activities in
procuring the appellant company to commit frauds on banks, and in particular
a Czech bank. S benefited from the large amount of funds funnelled through
the appellant company.
The appellant company brought proceedings claiming damages for almost
US$174m alleging that the auditors had been negligent in carrying out the
audits in the relevant years in failing to detect S’s dishonest conduct. The
respondent firm raised the defence of ex turpi causa non oritur actio (a
defence which precludes actions based on illegality). The success of this
defence depended upon whether S’s fraud could be attributed to the appellant
company. The agency approach was palpably unhelpful in the determination
of this issue, and resort was had to the primary rules of attribution and the
directing mind and will doctrine. Applying this doctrine, the House of Lords
held (Lord Scott of Foscote and Lord Mance dissenting) that since S was the
beneficial owner and the directing mind and will of the company and who, as
its human embodiment, exercise exclusive control over it, the company was to
be imputed with awareness of the fraudulent activities against the banks and
was primarily liable for them.
Attribution of corporate criminal liability
The problem of attributing criminal liability to a company has invariably been

solved by identifying the acts and mens rea of the natural person or persons
who are to be regarded as the juridical person as those of the company. The
general approach to identification is based on the jurisprudence of what was
once called the organic or alter ego doctrine, but which is now called the
directing mind and will doctrine. According to this doctrine, the acts and
knowledge of a natural person or persons are to be identified as those of the
company only if the person or persons were the alter ego (in the early cases)
or the directing mind and will (in more recent cases) of the company. In fact,
although this doctrine was not referred to as such in the early leading cases of
DPP v Kent & Sussex Contactors Ltd,100 R v ICR Haulage Ltd101 and Moore v
Bresler Ltd,102 it has been confidently thought that these cases were impliedly
based on the view that certain officers were the company. They were not to be
regarded as merely its agents but as its alter ego. Later authorities have been
more explicit in their reliance on the organic or alter ego doctrine or directing
mind and will doctrine.
The genesis of the directing mind and will approach is the civil law case of
Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd.103 The facts of that case
are that the company, which owned a ship, was seeking to take advantage of
the limitation of liability under section 502 of the Merchant Shipping Act 1894.
The limitation is available only where the injury is caused without the owner’s
‘actual fault or privity’. The fault resulted from the default of Lennard, its
managing director The House of Lords held that the company could not rely
on the defence, since the fault of the managing director could be attributed to
the company. Viscount Haldane, delivering the judgment of the House, said:104
My Lords, a corporation is an abstraction. It has no mind of its own anymore than it has a body of its own;
its active and directing will must consequently be sought in the person of somebody who for some
purposes may be called an agent, but who is really the directing mind and will of the corporation, the very
ego and centre of the personality of the corporation. That person may be under the direction of the
shareholders in general meeting; that person may be the board of directors itself, or it may be, and in some
companies it is so, that that person has an authority co-ordinate with the board of directors given to him
under the articles of association, and is appointed by the general meeting of the company, and can only be
removed by the general meeting of the company.
In a word, the directing mind and will approach narrowly attributes to the
company the mind and will of the natural person or persons who manage and
control its affairs. In the English Court of Appeal case of El Ajou v Dollar Land
Holdings plc,105 Hoffmann LJ said of Viscount Haldane’s formulation:106
It is well known that Viscount Haldane derived the concept of the ‘directing mind’ from German law (see
Gower Principles of Company Law (5th edn, 1992) p 194, n 36)) which distinguishes between the agents and
organs of the company. A German company with limited liability (GmbH) is required by law to appoint
one or more directors (Geschaftsfuhrer). They are the company’s organs and for legal purposes represent
the company. The knowledge of any one director, however obtained, is the knowledge of the company
(Scholz, Commentary on the GmbH Law (7th edn, 1986), section 35). English law has never taken the view
that the knowledge of a director is ipso facto imputed to the director: Powles v Page (1846) 3 CB 16, 136 ER
7; Re Carew’s Estate Act (1862) 31 Beav 39, 54 ER 1051. Unlike the German Geschaftsfuhrer, an English
director may as an individual have no powers whatever. But English law shares the view of the German
law that whether a person is an organ or not depends upon the extent of the powers which in law he has
express or implied authority to exercise on behalf of the company.
Thus conceptualised, the directing mind and will approach provides a neat
theoretical solution to the jurisprudential challenge of reconciling the concept
of corporate separate legal personality with corporate criminal liability where
the criminal liability involves mens rea. The real bane of this solution,
however, rests in its actual application to practical situations.
The English House of Lords’ case of Tesco Supermarkets Ltd v Nattrass107
provides a good example of the potential for tension between theory and
practical application. The facts of this case are that an employee at a branch of
Tesco had stocked the shelf with goods showing the normal price, while
posters at the shop were advertising the goods at a lower special-offer price.
The branch had run out of specials and had replaced them by similar goods at
the normal price. The employee in question should have notified the store-
manager but failed to do so, and the store manager did not notice the error.
The company had more than 800 store managers and it had put in place an
extensive system designed to ensure compliance with the Trade Description
Act 1968.
The company was charged with an offence of misstating the price under the
1968 Act. Section 24(1) of that Act allowed a defence where ‘the commission
of the offence was due to the act or default of another person’ and where the
accused had taken ‘all reasonable precautions and exercised all due diligence
to avoid the commission of the offence’.
The prosecution argued that this defence was not available to the company
as the manager (representing the company) had not done all that he could to
avoid the offence. The House of Lords held that the store manager was not the
directing mind and will of the company. The company, through its officers at a
higher level, had done all they should have done to avoid the offence, and the
default was that of another person, namely, an employee. Accordingly, the
company was acquitted.
Lord Reid explained:108
It must be a question of law whether, once the facts have been ascertained, a person in doing particular
things is to be regarded as the company or merely as the company’s servant or agent. In that case any
liability of the company can only be a statutory or vicarious liability.
He concluded:109
[A] board of directors can delegate part of their functions of management so as to make their delegate an
embodiment of the company within the sphere of delegation. But here the board never delegated any part
of their functions. They set up a chain of command through regional and district supervisors, but they
remained in control. The shop managers had to obey their general directions and also take orders from
their superiors. The acts or omissions of shop managers were not acts of the company itself.
Lord Reid’s explanation of the decision in Tesco Supermarkets Ltd represents a

narrow attribution test that attributes to the company the acts and knowledge
of its directing mind and will as indicated in the corporate constitution. Put
simply, corporate criminal liability is to be imposed only if the acts or defaults
can be attributed to senior management.
In El Ajou v Dollar Land Holdings plc,110 the English Court of Appeal
propounded a somewhat broader approach to the application of directing
mind and will theory. In that case, the Court of Appeal acknowledged that,
generally, the practical application of the mind and will theory involves an
examination of the corporate constitution in question to determine those who
are not merely servants and agents from those whose action is that of the
company itself. Accordingly, the articles of association might identify the
board of directors or a managing director as the directing mind and will of the
company, that is, the constitutional organ which for a particular purpose is the
company. However, the Court noted that in some circumstances, a person not
identified in the company’s constitution may be held to be the directing mind
and will of the company. For example, a company which holds out or
acquiesces in representing that a person has authority to do a particular thing
may cause him to be treated as its directing mind and will for that purpose.
Nourse LJ’s observation on the application of the mind and will theory is
revealing. He said:111
The doctrine attributes to the company the mind and will of the natural person or persons who manage
and control its action … It is important to emphasise that management and control is not something to be
considered generally or in the round. It is necessary to identify the natural person or persons having
management and control in relation to the act or omission in point. This was well put by Eveleigh J in
delivering the judgment of the Criminal Division of this court in R v Andrews Weatherfoil Ltd [1972] 1
WLR 118 at 124:
It is necessary to establish whether the natural person or persons in question have the status and
authority which in law makes their acts in the matter under consideration the acts of the company so
that the natural person is to be treated as the company itself.
Decided cases show that, in regard to the requisite status and authority, the formal position, as
regulated by the company’s articles of association, service contracts and so forth, though highly
relevant, may not be decisive. Here Millett J adopted a pragmatic approach. In my view, he was right
to do so.
In the English Court of Appeal case of Tesco Stores Ltd v Brent London
Borough Council112 another approach, one based on statutory interpretation,
was invoked to achieve an acceptable doctrinal explanation of the imposition
of criminal liability on a company where the actus reus was that of a cashier
employed by the company. The statute in question was viewed as imposing a
non-delegable duty on the company.
The facts of the Tesco Stores case are that a video film with an ‘18’
classification certificate was supplied by a cashier employed by Tesco to a boy
aged fourteen, and Tesco was charged with an offence under the Video
Recordings Act 1984. Section 11(2)(b) provided a defence if the defendant
‘neither knew nor had reasonable grounds to believe’ that the boy was not
eighteen. Tesco raised this defence, arguing that those who were the directing
mind and will of the company did not know or have reasonable grounds to
believe that the boy was not eighteen. The Court of Appeal held that the
cashier did know or have reasonable grounds to believe that the boy was not
eighteen, and that it was her knowledge which was relevant to the defence.
Tesco was accordingly criminally liable.
The Court of Appeal distinguished Tesco Supermarket Ltd v Natrass113 in
reaching its decision. Staughton LJ pointed out that the Tesco Supermarkets
case was concerned with three principles.114 The first is the general rule that in
the ordinary case a company is not guilty of a crime unless the criminal
conduct and the guilty mind exist not merely in a servant or agent of the
company of a junior rank but in those who truly manage its affairs. The
second is that, in derogation of the general rule, statutes may and sometimes
do provide that an offence may in certain circumstances be committed by a
company through one of its junior employees acting on its behalf.115 The third
is that, consequent upon the second, the person whose conduct may be
attributed to the company for purposes of establishing corporate criminal
liability may depend upon the wording of the statute creating the offence.116
It was upon the application of the third principle that the Tesco Stores case
was distinguishable from Tesco Supermarkets. Section 11(2) of the Video
Recordings Act 1984 which was in issue in the Tesco Stores case was different
both in language and content from section 24 of the Trade Description Act
1968 with which Tesco Supermarkets was concerned. Consequently, as section
11(2) referred to the knowledge and information of the employee through
whom the company effects a supply, the guilty knowledge of the cashier was
sufficient to support the conviction of the company.
The approach based on statutory interpretation was perhaps best explained
by Lord Hoffmann in the Privy Council decision of Meridian Global Funds Ltd
v Securities Commission.117 In this case, Lord Hoffmann pointed out that
although the directing mind and will approach is usually invoked in the
attribution of corporate criminal liability, it may sometimes become necessary
in applying criminal provisions in legislation premised on individual autonomy
to companies to fashion a special rule of attribution for the particular
provision. Thus, in deciding what acts are to be attributed to the company, the
court may choose to apply either the directing mind and will theory or wider
principles of attribution. According to Lord Hoffman, this choice is to be made
as a matter of construction of the substantive criminal provision in order to
advance the terms and policy of the criminal provision.
The facts of this case are that the New Zealand Securities Amendment Act
1988 required any person acquiring shares in a public listed company to
inform the company and the stock exchange as soon as he knew or ought to
have known that he had become a ‘substantial security holder’, i.e., a holder of
5 per cent or more of the voting shares. Failure to do so could result in the
Securities Commission imposing penalties. Koo, the chief investment officer of
Meridian, used its money for a corrupt purpose to buy a substantial stake in a
public listed company, but did not notify his superiors, the company or the
stock exchange.
Meridian successfully appealed against a penal order imposed on it, arguing
that because Koo was not its directing mind and that it did not know that it
had acquired 5 per cent of the shares in the public listed company. The Privy
Council held that it was not necessary to show that Koo was Meridian’s
directing mind and will. Construing the Securities Amendment Act 1988 so
that its policy was not defeated, in order to prove that the company was a
substantial security holder, it was enough to prove the knowledge of the
person authorised to do the deal, namely, Koo. Koo’s corrupt purpose did not
affect this attribution.
The special rule of attribution introduced by the Meridian decision itself
does lead to some uncertainty as to the extent to which the court will ignore
the primary rule of attribution based on the ‘directing mind and will’ of the
company identified at board or ‘superior’ officer level. But, in this regard, it
must first of all be noted, as was stressed by the English Court of Appeal in
AG’s Reference (No 2 of 1999):118
Lord Hoffmann’s speech in the Meridian case, in fashioning an additional special rule of attribution geared
to the purpose of the statute, proceeded on the basis that the primary ‘directing mind and will’ rule still
applies although it is not determinative in all cases. In other words, he was not departing from the
identification theory but re-affirming its existence.
In the second place, the question as to whose acts and knowledge are to be
attributed to the company depends ex hypothesi on an analysis of the context
of the particular rule with which the court is dealing. In consequence, some
uncertainty is inevitable in formulating an additional special rule geared to the
purpose of the statute in question.
Conclusion
The concept of separate legal personality in company law is a concept which
has been developed by the courts. It is also the courts which have attempted to
formulate approaches to answering the practical and doctrinal difficulties
occasioned by this concept. It is clear from this Chapter that these approaches
have spawned considerable uncertainty in many important aspects of the
doctrine of separate legal personality. Despite this, Commonwealth Caribbean
Companies Acts, as other Commonwealth Companies Acts, have
conscientiously refused to touch this area of company law. The
Commonwealth Caribbean company lawyer must therefore look to the cases
for solutions to problems on separate legal personality.
Notes
1 Macaura v Northern Assurance Co [1925] AC 619, 626 Eng HL; Short v Treasury Commissioners [1948] AC
534, 545 Eng HL; JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry [1990] 2 AC 22 Eng
HL.
2 Salomon v Salomon & Co Ltd [1897] AC 22 Eng HL. See generally Grantham and Ricketts (eds), Corporate
Personality in the 20th Century (London: 1998).
3 See, e.g., Littlewoods Mail Order Stores Ltd v IRC [1969] 3 All ER 442 Eng CA per Lord Denning; Adams v
Cape Industries plc [1990] Ch 433 Eng CA.
4 [1897] AC 22 Eng HL.
5 25 & 26 Vict. c. 89.
6 [1895] 2 Ch 323, 329–330 Eng Ch D.
7 [1895] 2 Ch 323, 341 Eng Ch D and Eng CA.
8 [1897] AC 22, 31 Eng HL.
9 Ibid.
10 See the contemporary comment in (1897) 13 LQR 6. See also, Kahn-Freund, ‘Some Reflections on Company
Law Reform’ (1944) 7 MLR 54, who describes the decision as a ‘calamitous decision’. But see Goddard
‘Corporate Personality—Limited Recourse and its Limits’ in Granthum and Ricketts (eds), Corporate
Personality in the Twentieth Century (London: 1998).
11 See, e.g., Adams v Cape Industries plc [1990] Ch 433 Eng CA where Slade LJ opined that ‘save in cases
which turn on the wording of particular statutes or contracts, the court is not free to disregard the
principle of Salomon v Salomon & Co Ltd’. But, see, e.g., Littlewoods Mail Order Stores Ltd v IRC [1969] 1
WLR 1241, 1254 Eng CA, where Lord Denning MR said; ‘The doctrine laid down in Salomon v Salomon &
Co Ltd has to be watched very carefully.’
12 [1961] AC 12 PC.
13 [1976] AC 16, PC.

14 [1961] AC 12 PC.
15 [1976] AC 16, PC.
16 [1976] AC 16, 25 PC per Lord Fraser.
17 [1976] AC 16, 27 PC per Lord Fraser.
18 See in particular [1897] AC 22, 29–30 Eng HL per Lord Halsbury; at 45, per Lord Herschell; and at 53, per
Lord McNaughten.
19 [1925] AC 619 Eng HL. This case was followed in the Canadian Supreme Court case of Aqua-Land
Exploration Ltd [1966] SCR 133 SCC. However, in Kosmopoulos v Constitution Insurance Co [1987] SCR 2
the Supreme Court of Canada refused to follow Macaura and Aqua-Land, deciding that a shareholder in a
one-person company may be held to have an insurable interest if it can be shown that he has a ‘sufficient
interest’.
V s 4(1); T’dad s 8(1).
21 St C/N s 4(2).
22 Ang s 2(3); Ant s 540; B’dos s 442; Dom s 540; Gren s 540; Guy s 529; Mont s 540; St L s 540; St V s 540;
T’dad s 5(2).
23 Ang s 2(2); Ant s 540(a); B’dos s 441; Dom s 539; Gren s 539; Guy s 528; Mont s 539; St L s 539; St V s 539;
T’dad s 4.
24 See generally Hadden, Company Law and Capitalism (London: 1977); ibid. The Control of Corporate Groups
(London:1993); Eisner, ‘Corporate Groups’ in Gillooly (ed), The Law Relating to Corporate Groups (London:
1993) Ch 1.
25 Ang s 2(3); Ant s 538; B’dos s 440; Dom s 538; Gren s 538; Guy s 527; Mont s 538; St L s 538; St V s 538;
T’dad s 5(1).
26 [1990] Ch 433 Eng CA.
27 [1990] Ch 433, 532 Eng CA.
28 See Ang s 130(1); Ant s 151(1); B’dos s 149(1); Dom s 151(1); Gren s 151(1); Mont s 151(1); St L s 151(1); St V s
151(1); T’dad s 153(1).
29 See Ang s 31(1); Ant s 29(1); Bah s 38; B’dos s 29(1); Dom s 29(1); Gren s 29(1); Guy s 28(3); Mont s 29(1); St
L s 29(1); St V s 29(1); T’dad s 33(1).
30 (1852) 21 LJQB 98 Eng Exch Ch.
31 See Ang s 186(1); Ant s 326(1); B’dos s 312(1); Dom s 326(1); Gren s 326(1); Mont s 326(1); St L s 326(1); St V s
326(1).
32 Bah s 3(1); Bel s 4; J’ca s 3(2)(c); T’dad s 8(1).
33 Ang s 187(1)(a); Bah s 4; Bel s 4(b); J’ca s 3(2)(a) and (b); T’dad s 8(1).
38 Bank voor Handel en Sheepvaart NV v Slatford [1953] 248, 278 Eng Ch D.
39 (1989) NSWLR 549, 567 NSW CA.
40 (1978) SLT 159; (1978) SC (HL) 90 SC HL.
41 1990] Ch 433 Eng CA.
42 [2001] BCLC 436 Eng Ch D.
43 [2000] BCLC 734.
44 (1978) SLT 159; (1978) SC (HL) 90 SC HL.
45 (1978) SLT 159; (1978) SC (HL) 90.
46 [1990] Ch 433 Eng CA.
47 Such as, e.g., ‘sham’, ‘device’, ‘puppet’, ‘stratagem’, ‘mask’, and ‘creature’.
48 For a full discussion of the case see Gower and Davies, Gower’s Principles of Modern Company Law (8th
edn London: 2008) 202–208.
49 [1990] Ch 433, Eng CA.
50 [1962] 1 All ER 442 Eng Ch D.
51 [1962] 1 All ER 442, 445 Eng Ch D.
52 [1990] Ch 433 Eng CA.

53 [1962] 1 All ER 442 Eng Ch D.
54 [1933] Ch 935 Eng CA.
55 [1990] Ch 433 Eng CA.
56 [2001] BCLC 436 Eng Ch D.
57 [1990] 2 BCLC 500 Eng CA.
58 [1998] 2 BCLC 447 Eng CA.
59 [1990] Ch 433 Eng CA.
60 [1990] Ch 433, 544 Eng CA.
61 [1990] Ch 433 Eng CA.
62 [1897] AC 22 Eng HL.
63 Barclays Bank Plc v Clarke et al (Unreported) Suit No 517 of 1996 Bah SC.
64 Rainham Chemical Works v Belvedere Fish Guano Co [1921] 2 AC 465 Eng HL; Southern v Watson [1940] 3
All ER 439 Eng CA.
65 [1939] 4 All ER 116 Eng KBD.
66 See Farrar’s Company Law (London: 1998) 71.
67 [1989] Ch 72 Eng CA.
68 [1974] 3 All ER 217 Eng CA. See also Barclays Bank Plc v Clarke et al (Unreported) Suit No 517 of 1996
Bah SC.
69 [1953] 1 All ER 615 Eng Ch D.
70 [1991] 4 All ER 769, 779 Eng CA.
71 [1979] 3 All ER 556 Eng CA.
72 [1979] 3 All ER 556, 565 Eng CA.
73 See, e.g., Adams v Cape Industries plc [1990] Ch 433 Eng CA.
74 [1976] 1 WLR 852 Eng CA.
75 [1976] 1 WLR 852, 861 Eng CA.
76 [1976] 1 WLR 852, 860 Eng CA

77 [1976] 1 WLR 852, 867 Eng CA.
78 [1976] 1 WLR 852, 860 Eng CA.
79 [1976] 1 WLR 852, 861 Eng CA.
80 [1976] 1 WLR 852, 861 Eng CA.
81 (1978) SLT 159, (1978) SC (HL) 90 Sc HL.
82 [1990] Ch 433 Eng CA.
83 Ibid.
84 [1990] Ch 433, 532 Eng CA.
85 [1996] 1BCLC 428 Eng Ch D.
86 [1998] 2 BCLC 447 Eng CA.
87 [1998] 2 BCLC 447, 457 Eng CA.
88 [1990] Ch 433 Eng CA.
89 [2001] BCLC 436 Eng Ch D.
90 [2000] BCLC 734 Eng Ch D.
91 But see Creasey v Breachwood Motors Ltd [1993] BCLC 480 where the veil was lifted to avoid an injustice.
The reasoning in that case has been overruled by Ord v Belhaven Pubs Ltd [1998] 2 BCLC 447 Eng CA.
92 [1984] 1 WLR 427 Eng HL.
93 [1984] 1 WLR 427, 435 Eng HL.
94 [1995] 2 AC 500 PC.
95 [1995] 2 AC 500, 506 PC.
96 Ibid.
97 Ibid.
98 Man Nutzfahrzeuge AG v Freightliner Ltd [2005] All ER (D) 357 (Oct) Eng QBD para 154 per Moore Bick
LJ.
99 [2009] 1 AC 1391 Eng HL.
100 [1944] KB 146 Eng KBD.

101 [1944] KB 551 Eng Ct Crim App.
102 [1944] 2 All ER 515 Eng KBD.
103 [1915] AC 705 Eng HL.
104 [1915] AC 705, 713–714 Eng HL.
105 [1994] 1 BCLC 464 Eng CA.
106 Ibid.
107 [1972] AC 153 Eng HL. See also Seaboard Offshore Ltd v Sec. of State for Transport [1994] 2 All ER 99 Eng
HL.
108 [1972] AC 153, 170 Eng HL.
109 [1972] AC 153, 174–175 Eng HL.
110 [1994] 1 BCLC 464 Eng CA.
111 [1994] 1 BCLC 464, 473 Eng CA.
112 [1993] 2 All ER 718 Eng CA. This approach was subsequently adopted by the English House of Lords in Re
Supply of Ready Mixed Concrete (No 2) [1995] 1 AC 456 HL.
113 [1972] AC 153 Eng HL.
114 [1993] 2 All ER 718, 720 Eng CA.
115 [1993] 2 All ER 718, 720–721 Eng CA.
116 [1993] 2 All ER 718, 720 Eng CA.
117 [1995] AC 500 PC.
118 [2000] 2 BCLC 257, 268 Eng CA.

Chapter 6
Corporate Capacity and Corporate
Agency
Introduction
Lord Hoffmann in Meridian Global Funds Management Asia Ltd v Securities
Commission1 observed that a company exists as a separate legal person in
Commonwealth company jurisprudence because of the rule derived from the
relevant Companies Act that allows a persona ficta to be deemed to exist and
to have certain of the powers, rights and duties of a natural person.2 One
inevitable consequence of so viewing a company is that an issue inevitably
arises as to the company’s capacity both in terms of the extent of the powers,
rights and privileges it enjoys and in terms of determining when those powers,
rights and privileges are actually exercised.
With respect to the extent of the powers enjoyed by a company, the courts
have declared that a company incorporated by or under a statute possesses
only those powers and rights which are expressly or impliedly authorised by
that statute.3 Thus, unlike a natural person, the legal capacity of a company is
necessarily that conferred on it by or in accordance with the statute under
which it is incorporated.4 With respect to the determination of when a
company has exercised such powers, rights and privileges as are within its
capacity, it is axiomatic that because it is merely a persona ficta, it can only
exercise its powers through the agency of natural persons.5 The jurisprudential
challenge for Commonwealth Caribbean company law, therefore, is to
provide rules to define the boundaries of corporate capacity and rules to
determine the proper exercise of corporate powers through the agency of
natural persons.
All Commonwealth Caribbean Companies Acts, except the Belize
Companies Act, contain extensive provisions designed to legislate rules
defining corporate capacity and rules governing the exercise of corporate
power.6 Prior to these enactments, Commonwealth Caribbean company law
had developed a substantial body of common law rules around the ultra vires
doctrine,7 the constructive notice doctrine8 and the rule in Turquand’s Case (or,
as it is also called, the indoor management rule),9 to deal with the
jurisprudential challenges surrounding corporate capacity. The undeniable
objective of the provisions in Commonwealth Caribbean Companies Acts on
corporate capacity and corporate powers is to abolish the ultra vires doctrine10
and to clarify and modify the constructive notice doctrine and the rule in
Turquand’s Case. It must be stressed, however, that these common law rules
and doctrines continue unabated in Belizean company law.
In order to facilitate a proper interpretation of the provisions in regional
Companies Acts, it is necessary to have a full understanding of the mischief
which these provisions are aimed at remedying. Accordingly, this chapter will
discuss separately the statutory provisions on corporate capacity against the
backdrop of their objective to abolish the ultra vires doctrine, and the
statutory provisions on the exercise of corporate power in light of the
constructive notice doctrine and the rule in Royal British Bank v Turquand.11
This approach also allows for a statement of the law in Belize.
Corporate Capacity
The basic statutory provisions
The basic provision on corporate capacity in Commonwealth Caribbean

company law is to be found in provisions in regional Companies Acts with a
similar objective to section 17 of the Barbados Companies Act.12 Except in St
Christopher/Nevis,13 this section provides as follows:
17. (1) A company has the capacity, and, subject to this Act, the rights, powers and privileges of an
individual.
(2) A company has the capacity to carry on its business, conduct its affairs and exercise its powers in
any jurisdiction outside Barbados to the extent that the laws of Barbados and of that jurisdiction permit.
(3) It is not necessary for a by-law to be passed to confer any particular power on a company or its
directors.
(4) This section does not authorize any company to carry on any business or activity in breach of
(a) any enactment prohibiting or restricting the carrying on of the business or activity, or
(b) any provision requiring any permission or licence for the carrying on of the business or activity.
The provisions in these Acts similar to sections 1814 and 1915 of the Barbados
Act are as important as section 1716 in defining the capacity of companies
under regional company law.
Section 18 provides as follows:17
A company shall not carry on any business or exercise any power that is restricted by its articles from
carrying on or exercising, nor shall a company exercise any of its powers in a manner contrary to its
articles.
Section 19, in turn, provides as follows:18

For the avoidance of doubt, it is declared that no act of a company, including any transfer of property to or
by a company, is invalid by reason only that the act or transfer is contrary to its articles or this Act.
Together these provisions establish a framework of rules governing corporate

capacity which are explored hereafter.
Rules on corporate capacity
Rule 1
The effect of provisions similar to section 1719 is to abolish the ultra vires doctrine.
Purpose of the provisions
As already been noted, the provisions in Commonwealth Caribbean

Companies Acts similar to section 17 in the Barbados Companies Act20 were
intended to abolish the ultra vires rule. In the Canadian case of Communities
Economic Development Fund v Canadian Pickles Corpn,21 the Supreme Court
of Canada held that a section in the Canadian Business Corporations Act22 in
pari materia with section 1723 abolished the common law doctrine of ultra
vires. In the meantime, section 18(1) of the St Christopher/Nevis Companies
Act expressly states the intention to abolish the ultra vires rule by the blunt
declaration that ‘the doctrine of ultra vires in its application to companies is
abolished’.
What has been abolished
What exactly is meant by the abolition of the ultra vires rule? In order to
answer this question, which is especially relevant in the interpretation of the
provision in the St Christopher/Nevis Act that ‘the doctrine of ultra vires in its
application to companies is abolished’, it is necessary to fully examine the ultra
vires doctrine developed in the case law.
The ultra vires rule in relation to registered companies was first established
in the English House of Lords case of Ashbury Railway Carriage and Iron Co
Ltd v Riche.24 The facts of this case are that a company had been formed under
the Companies Act 1862 with the following objects:
to make and sell, or lend on hire, railway carriages and wagons, and all kinds of railway plant, fittings,
machinery, and rolling stock; to carry on the business of mechanical engineers and general contractors; to
purchase and sell, as merchants, timber, coal, metals, or other materials; and to buy and sell any such
materials on commission, or as agents.
The directors of the company entered into an agreement for financing the
construction of a railway in Belgium, and there was some evidence that the
contract had been ratified by all the members of the company. Later, however,
the company wanted to get out of the contract and consequently argued that
the contract was ultra vires.
The House of Lords held that the transaction was beyond the company’s
objects as expressed in its memorandum and was consequently ultra vires. The
House unanimously held that ratification was legally impossible, since the
contract was beyond the scope of the objects specified in the memorandum
and therefore void, and that it was not possible to ratify a void act.
The unmistakable legal effect of ultra vires which emerged from Ashbury
Railway Carriage and Iron Co Ltd v Riche,25 therefore, is that anything done
by the company which is outside its objects and powers as stated in its
memorandum of association is void.
One aspect of the ultra vires doctrine which bears emphasis is that ultra
vires transactions are not illegal transactions: they are transactions made by
the company without the requisite capacity. This was stressed by Lord Cairns
LC in the Ashbury Railway Carriage case, where he pointed out:26
I have used the expressions extra vires and ultra vires. I prefer either expression very much to one which
has been used in judgments in the present case, and has been used in other cases, namely, the expression
‘illegality’.
In a case such as that which Your Lordships have now to deal with, it is not a question of whether the
contract sued upon involves that which is malum proibitum or malum in se, or is a contract contrary to
public policy, and illegal in itself. I assume the contract in itself is perfectly legal, to have nothing in it
obnoxious to the doctrine involved in the expressions which I have used. The question is not as to the
legality of the contract; the question is as to the competency and power of the company to make the
contract.
Another aspect of the ultra vires doctrine which must be noted is the view
expressed in the English case of Rolled Steel Products (Holdings) Ltd v British
Steel Corpn27 by Vinelott J on the meaning of ultra vires. Vinelott J opined in
that case that, in addition to the use of ultra vires in the narrower Ashbury
Railway Carriage and Iron Co Ltd v Riche28 sense where ultra vires means
that a company does something beyond its objects as stated in the
memorandum, ultra vires is sometimes used in a wider sense. According to
Vinelott J, it is used in the wider sense where a transaction ostensibly within
the express or implied scope of the company is entered into in furtherance of a
purpose which is not authorised.29 Admittedly, this adumbration of the
meaning of ultra vires in the wider sense appears to explain some earlier cases
involving loans to companies.30 This notwithstanding, on the appeal of Rolled
Steel Products (Holdings) Ltd v British Steel Corpn,31 the English Court of
Appeal firmly rejected Vinelott J’s idea of ultra vires in the wider sense.
There has been some suggestion in the cases, springing from the English
decision in Re Lee, Behrens & Co Ltd,32 that the ultra vires doctrine involves an
overriding principle that, no matter what the objects clause may provide, any
activity not bona fide designed to further the financial prosperity of the
company is necessarily ultra vires. This principle appears to have been applied
in the English case of Parke v Daily News Ltd.33 The facts of that case are that
the defendant company was proposing to close down its operations. The
Cadbury family, which had a majority shareholding in the company, wished to
make gratuitous payments to redundant employees. The proposed payments
were challenged by Parke, who was a minority shareholder. Plowman J held,
applying Re Lee, Behrens & Co Ltd,34 that the proposed redundancy payments
were ultra vires.
Re Lee, Behrens & Co Ltd35 was also applied in the English case of Re W & M
Roith Ltd.36 In this case the controlling shareholder and director of two
companies had no pension arrangements with the companies. He fell ill and
one of the companies entered into a service agreement with him, making
provision for his wife after his death. The evidence was that no consideration
had been given to the question whether the arrangement was bona fide and in
the interest of the company. In these circumstances, it was held that the
agreement was ultra vires notwithstanding the fact that the issues raised in the
case appear to have more to do with breach of directors’ fiduciary duties than
with corporate capacity and ultra vires.
On the other side of the coin, Re Lee, Behrens & Co Ltd37 was rejected in the
English case of Charterbridge Corpn Ltd v Lloyds Bank Ltd38 by Pennycuick J.
He held that when a company was carrying out the purposes expressed in its
objects, and did an act within the scope of the power expressed in it, the act
was intra vires whether or not it was intended for the benefit of the company.
Charterbridge Corpn case was a case involving a group guarantee. The bank
had advanced money to the property development subsidiary in the group on
condition that each other company in the group gave a guarantee of the
indebtedness secured by a debenture on their assets. The question arose as to
whether the guarantees and debentures given by the other companies were
ultra vires. There was an express provision in the objects clauses providing for
the giving of guarantees and securities. Pennycuick J rejected Re Lee, Behrens
& Co Ltd39 and held that the guarantees and debentures were not ultra vires.
The matter was reviewed by the English Court of Appeal in Re Horsley &
Weight Ltd40 where the issue was whether a pension plan for a director and
employee was ultra vires. There was an express provision in the
memorandum of association to grant pensions. The Court of Appeal held that
this provision constituted a substantive object and not merely an ancillary
power. It was immaterial, therefore, whether the purchase of the pension plan
was for the benefit and prosperity of the company. Re Lee, Behrens & Co Ltd41
was rejected and Charterbridge Corpn Ltd v Lloyds Bank Ltd42 approved. The
subsequent English Court of Appeal decision in Rolled Steel Products
(Holdings) Ltd v British Steel Corpn43 and the House of Lords in Brady v
Brady44 have both disapproved of and rejected Re Lee Behrens & Co Ltd,45 so
that there is little doubt now that Charterbridge Corporation Ltd v Lloyds
Bank Ltd46 represents the law. The test is therefore not whether the activity
was bona fide in the interest of the company, but rather, whether it was
authorised by the objects clause. Indeed, this view was confirmed in the
English Court of Appeal case of Parlett v Guppy (Bridgeport) Ltd.47
The preponderance of authority therefore establishes that there is no
overriding principle that where a company does something which it has
capacity to do but which is not in the best financial interest of the company
such act is ultra vires. In fine, the ultra vires doctrine refers simply to
transactions where a company purports to do something not within its
capacity being held to be void.
Motivation for the abolition of the ultra vires doctrine
In Ashbury Railway Carriage and Iron Co Ltd v Riche,48 the House of Lords
advanced as the major justification for the ultra vires rule the protection of
creditors and investors in the company. Such protection was achieved because
the ultra vires rule ensured that the funds of the company to which creditors
must look for payment are not dissipated in unauthorised activities and
allowed investors to know the objects for which their money is to be used.
The history of the rule, however, has been characterised by the use of various
legal devices in attempts at evading perceived harshness in the operation of
the rule and, consequently, the systematic erosion of whatever protection the
rule may have been intended to afford creditors and investors. A highlight of
the history of these devices helps to explain the motivation for abolition of the
ultra vires doctrine in Commonwealth Caribbean Companies Acts.
Implied powers device
Shortly after the decision in the Ashbury Railway Carriage case, the English
House of Lords in AG v Great Eastern Railway49 attempted to attenuate the
strictness of the ultra vires rule by what is sometimes called the implied
powers device. In this case, the House of Lords laid down that the Ashbury
Railway Carriage rule is to be applied reasonably, so that any implied powers
fairly incidental to the objects expressly specified in the memorandum of
association will, unless expressly prohibited, be held to be intra vires. In other
words, where the objects clause does not expressly confer a power on a
company, the court will imply such a power so long as it is reasonably
incidental to the carrying out of the express objects in the objects clause. On
the other hand, an action will not be ultra vires if it is reasonably incidental to
the attainment of the objects of a company.
The implied powers principle was applied in the St Lucian Court of Appeal
case of Edgecombe v St Lucia Coconut Growers Association Ltd.50 In this case
an action seeking a declaration that a share transfer made without express
power in the memorandum of a company was ultra vires was dismissed on
the basis that the share transfer was reasonably conducive to the attainment of
the objects of the company and so the transfer was not ultra vires.
Drafting devices
The ultra vires doctrine in Commonwealth Caribbean company law was, and
is in Belize, intimately bound up with the statutory requirement in the
incorporation of a company for the registration of a memorandum of
association and the role of the memorandum of association in delineating the
capacity of a company.51 In Chapter 1 on the history of Commonwealth
Caribbean company law, it was noted that the Joint Stock Companies Act of
1856 introduced the requirement for the registration of a memorandum of
association, a requirement which, until the present regional companies
legislation, has characterised Commonwealth Caribbean Companies Acts.
A major importance of the memorandum of association is that it is in this
document that the capacity of the company is delineated. This is achieved
because the ‘object’ or ‘objects’ for which the company is being incorporated
must be specified in the memorandum of association. The object or objects so
specified define the capacity of the company.
Profusion of objects clauses in the memorandum

The logic of determination of corporate legal capacity by reference to the
objects stated in the objects clause means that the more objects expressly
stated in the objects clause, the greater the capacity of the company. Legal
draftsmen seized upon this reasoning to include in the memoranda of
companies a profusion of objects clauses with the clear purpose of
circumventing the ultra vires rule. Lord Wrenbury commented on this practice
in Cotman v Broughman52 as follows:
There has grown up a pernicious practice of registering memoranda of association which under the clause
relating to objects contain paragraph after paragraph not specifying or delimiting the proposed trade
purpose, but confusing power with purpose and indicating every class of act which the corporation is to
have power to do. The practice is not one of recent growth. It was in active operation when I was at the
Bar. After a vain struggle I had to yield to it, contrary to my own convictions. It has arrived now at a point
at which the fact that the function of the memorandum is taken to be, not to specify, not to disclose, but to
bury beneath a mass of words the real object or objects of the company, with the intent that every
conceivable form of activity shall be found included somewhere within its terms.
In an effort to thwart this practice, in Re Haven Gold Mining Co53 the English
Court of Appeal established the main objects rule of construction as the rule of
construction to be employed where more than one object is stated in the
objects clause. Under this rule, which is based on the ejusdem generis rule,
where objects are set out in a series of paragraphs, the paragraph which
appears to contain the main or dominant object is to be treated as the main
object. All other paragraphs, no matter how generally expressed, are to be
treated as ancillary to the main object and limited thereby.
Cotman v Broughman clauses
To get around the main objects rule of construction, what is called an

independent objects clause, or Cotman v Broughman clause, was added at the
end of the objects clause. This clause stipulated that the objects set out should
not be restrictively construed and that each and every paragraph should be
regarded as conferring a separate and independent object. The validity of such
a clause was raised in the English House of Lords’ case of Cotman v
Brougham.54 The facts of this case are that the company was a rubber
company with a long objects clause ending with an independent objects
clause. The company underwrote an issue of shares by an asphalt company.
The validity of the underwriting could only be upheld if underwriting, which
was set out as an object in the objects clause of the company, were held to be
a separate object. The House of Lords severely castigated the practice of
setting out of a profusion of objects but held that the independent objects
clause was effective so that the underwriting was intra vires and valid.
It should be noted, however, that the English Court of Appeal decision in Re
Introductions Ltd,55 a case which was followed in the Barbadian Court of
Appeal case of Federal High School v Barclays Bank (International) Ltd,56
suggested a limitation to the independent objects clause device. In the Re
Introductions Ltd57 case, a company was incorporated with its memorandum
of association limiting its objects to tourism. The memorandum also contained
in the objects clause a clause which empowered the company to borrow
money, and an independent objects clause. The company borrowed money
from the bank for the purpose of pig breeding and took security on the
company’s assets for the loan. In the insolvency proceedings of the company, a
question arose as to the validity of the bank’s security. The bank sought to rely
on Cotman v Brougham and to argue that the power to borrow and raise
money was an independent object and that consequently the borrowing by the
company was intra vires and their security valid. The English Court of Appeal
held that it was not. The Court reasoned that borrowing was intrinsically a
power and that an independent objects clause could not convert what was
intrinsically a power into an object. Since borrowing was a power and not an
object, borrowing could only be intra vires if it were exercised in pursuance of
an intra vires object. In the present case, pig breeding was admittedly ultra
vires and consequently borrowing in pursuance of that object was similarly
ultra vires.
Subjective objects clauses
Another device used by draftsmen to avoid the ultra vires doctrine is the so-
called subjective objects clause. Basically, these clauses are included in the
objects clause giving to the company power to carry on, in addition to is main
business stated in is objects, any other business which in the opinion of the
directors can be advantageously carried on by the company in connection with
or ancillary to any of the other objects set out in the objects clause.
Admittedly, such a clause comes very close to saying that the company can
carry on any business it chooses.
In the English Court of Appeal case of Peruvian Rlys Co v Thames and
Mersey Marine Ins, Re Peruvian Rlys Co,58 Lord Cairns LJ expressed the view
that such a clause was permissible.59 However, this view was doubted in the
later English case of Re Crown Bank.60 The matter has now been settled by the
English Court of Appeal decision of Bell Houses Ltd v City Wall Properties
Ltd.61 The facts of this case are that the objects of the plaintiff company were
to carry on business as civil and general engineering contractors, and in
particular to construct houses. By clause 3(c) the company was empowered ‘to
carry on any other trade or business whatsoever which can, in the opinion of
the board of directors, be advantageously carried on by the company in
connection with or ancillary to any of the above business or the general
business of the company’. The plaintiff company, in pursuance of a commission
contract for £20,000, introduced the defendant developers to a financier who
lent the defendants £1m for property development. The defendants later
refused to pay the agreed commission to the plaintiff company arguing that
the commission contract was ultra vires. The Court of Appeal held that the
commission contract was valid on the basis that the subjective objects clause
was effective to empower the plaintiff company to undertake any business
which the directors bona fide thought could be advantageously carried on as
an adjunct to its other business.
Effect of these devices
It is clear from the foregoing that the effectiveness of the ultra vires rule in
achieving its stated purpose has been so substantially compromised by
ingenious drafting and permissive interpretation by the courts as to render it
meaningless. It is for this reason that Commonwealth Caribbean Companies
Acts have abolished the doctrine.62
Rule 2
A company has the capacity and the rights, powers and privileges of an individual.
The ultra vires rule has been supplanted by a rule on corporate capacity to be
found in provisions in Commonwealth Caribbean Companies Acts similar to
section 17(1) of the Barbados Companies Act.63 By these provisions, the
capacity is statutorily declared to be that of an individual. This renders otiose
drafting shenanigans to amplify the capacity of a company and the
employment by the courts of interpretative techniques to avoid the strictures
of the ultra vires doctrine.
Rule 3
The capacity of a company includes the capacity to carry on business in a jurisdiction in which it is not
registered.
Section 17(2)64 amplifies the provision in section 17(1)65 that a company has
the capacity of an individual. Section 17(2)66 expressly provides that this
capacity includes the capacity of the company to carry on its business, conduct
its affairs and exercise its powers in any jurisdiction outside the one in which it
is incorporated. However, a company enjoys this capacity only to the extent
that the laws of the jurisdiction in which it is incorporated and that of the
outside jurisdiction permit.67
Rule 4
There is no requirement for a statement of ‘objects’ in the company’s articles.
As was seen in Chapter 3, except under the Companies Acts of the Bahamas,
Belize and St Christopher/Nevis,68 all the regional Acts have done away with
the memorandum of association and articles of association, and require that
articles of incorporation are the only incorporation document which must be
filed.69 In the meantime, provisions in these Acts similar to section 5 of the
Barbados Act stipulate what must be set out in the articles of incorporation.70
Most notably, in none of the Acts, including those in the Bahamas and St
Christopher/Nevis, is there any requirement for the inclusion in the articles of
incorporation of the objects and powers of the company. The fact that these
provisions do not require a statement of the ‘objects’ of the company in the
incorporation documents, a central plank of the ultra vires doctrine, is a
statutory indication of an intention to abolish the ultra vires doctrine.
Rule 5
It is not necessary to confer any powers on a company in its bye-laws.
The capacity, rights, powers and privileges conferred by provisions in regional

Acts similar to section 17(1)71 of the Barbados Act are complete in themselves.
However, for the avoidance of doubt, regional Acts, except in the Bahamas,
Belize and St Christopher/Nevis, contain a provision similar to section 17(3)72
of the Barbados Act which expressly states that ‘it is not necessary for a bye-
law to be passed to confer any particular power on a company or its directors.’
Rule 6
A company is not authorised to breach any enactment prohibiting or restricting any business activity or
requiring any permission or licence.
The authority conferred by Commonwealth Caribbean Companies Acts on

companies to conduct their business is unquestionably ample. However, this
authority does not extend to carrying on any business or activity in breach of
any enactment prohibiting or restricting the carrying on of that business or
activity.73 Similarly, this authority does not include the carrying on of any
business or activity in breach of any provision requiring any permission or
licence for the carrying on of the business or activity.74
Rule 7
A company may impose restrictions on its business in its articles. However, a transaction made contrary to
such restrictions is not invalid.
Provisions in regional Acts similar to section 5(1)(e) of the Barbados Act75

allow a company to set out in its articles of incorporation any restrictions on
the business that the company may carry on. Provisions similar to section 18 of
the Barbados Act,76 in turn, provide that:
A company shall not carry on any business or exercise any power that it is restricted by its articles from
carrying on or exercising, nor shall a company exercise any of is powers in a manner contrary to its
articles.
Despite this prohibition, provisions similar to section 19 of the Barbados Act77

declare as follows:
For the avoidance of doubt, it is declared that no act of a company, including any transfer of property to or
by a company, is invalid by reason only that the act or transfer is contrary to its articles or this Act.
It will be remembered that a critical characteristic of the ultra vires doctrine is

that its effect is to render void transactions entered into by a company which
do not fall within the objects of the company as stated in its memorandum. By
insisting that a transaction made contrary to restrictions in the company’s
articles is not invalid, section 1978 puts out of the terrain of argument the
conclusion that the ultra vires doctrine has no place in modern
Commonwealth Caribbean company law, except of course in Belize. This
interpretation is supported by the Ontario High Court decision of
Distributelite Ltd v Toronto Board of Education Staff Credit Union Ltd,79
where section 16(3) of the Ontario Business Corporations Act, a section similar
to section 19,80 was in question. The court held in that case that section 16(3)
was enacted to abolish the effects of the doctrine of ultra vires and to protect
third parties who deal in good faith with companies.
In sum, section 1981 and section 1782 must be read together. Thus read,
section 17,83 by statutorily conferring on a company the capacity of an
individual, will be seen as removing the legal possibility of a company
entering into transactions which are beyond its capacity and therefore ultra
vires. Section 19,84 on the other hand, will be seen as putting the matter
beyond doubt by removing the voiding of transactions entered into contrary
to the constituent document of the company, which is the legal effect of the
ultra vires doctrine.
Rule 8
Where a company acts in breach of its articles this is to be dealt with not as an issue of corporate capacity
but as a question of directorial authority.
It is beyond dispute that the ultra vires doctrine has been completely abolished
by the present Companies Acts in the Commonwealth Caribbean, except in
Belize.85 The question arises, therefore, as to how the law deals with the case
of a transaction entered into contrary to restrictions in the company’s articles.
The answer to this question is to be found in provisions in the Acts in Anguilla,
Antigua, the Bahamas, Dominica, Grenada, Guyana, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago similar to section 58(1)86 of the Barbados Act
and in the Acts in Anguilla, Antigua, the Bahamas, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent similar to section 6087 of the
Barbados Act which suggest that, what were formerly treated as corporate
capacity issues, are now to be treated as matters of directorial authority.
Section 58(1)88 mandates directors of a company to exercise the powers of
the company through the employees and agents of the company and to direct
the management of the business and affairs of the company. In other words,
the directors of a company are responsible for the exercise of the rights,
powers and privileges conferred on companies by section 17.89 Section 6090
deals with the exercise of these powers where the company’s business is
restricted. Section 60 provides, in so far as it is relevant, as follows:91
If the powers of the directors of a company to manage the business and affairs of the company are in
whole or part restricted by the articles of the company, the directors have all the rights, power and duties
to the extent that the articles do not restrict those powers.
This means that, under the Acts in Anguilla, Antigua, Barbados, Dominica,
Grenada, Guyana, Montserrat, St Lucia and St Vincent, directors who act in
excess of the restrictions in the articles of the company act in breach of their
express duties as directors to ‘comply with [the relevant] Act and the
regulations and with the articles and bye-laws of the company’.92 Under these
Acts, therefore, where a company does acts in excess of restrictions found in
the articles, no issue of corporate capacity is raised. The issue is entirely one of
directorial authority.
The position in Trinidad and Tobago appears to be the same as in Anguilla,
Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia and St
Vincent. This is because section 60 of the Trinidad and Tobago Act mandates
directors of the company to exercise the powers of the company. In the
meantime, section 65 of that Act provides that ‘the articles of a company may,
in whole or part, restrict the powers of the directors to manage the business of
the company’. Finally, section 99(5) imposes a duty on directors to comply
with the articles of the company. Since the powers of a company can only be
exercised by the directors of that company, it follows that, if the directors do
acts contrary to restrictions in the articles, no issue of corporate capacity is
raised, only questions of directorial authority.
The position under the Bahamian, Jamaican and St Christopher/Nevis Acts
is somewhat complicated. The Acts in these territories do not contain any
statutory indication whatsoever as to how the case of a transaction entered
into contrary to restrictions in the company’s articles is to be resolved. The
absence of any such indication notwithstanding, it is submitted that the
position is the same as in Anguilla, Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago. There is a
good reason why this is so.
As was pointed out in the English Court of Appeal decision in Rolled Steel
Products (Holdings) Ltd v British Steel Corpn,93 quite apart from any statutory
provision to this effect, a clear distinction has to be drawn between acts which
relate to the capacity of a company and acts which relate to the exercise of
directorial powers. In this regard, there may be no question that a company
has the capacity to enter into a given transaction. Yet, the directors may
breach their directorial powers in entering such a transaction on behalf of the
company. Where this happens, the relevant issue is as to the powers and duties
of the directors and not to the company’s capacity.
As has already been discussed, the Acts in the Bahamas, Jamaica and St
Christopher/Nevis all invest companies with the capacity, rights, powers and
privileges of an individual. This means that the issue of corporate capacity
cannot arise in relation to a transaction entered into by the directors on behalf
of their company. However, all of these Acts contemplate directorial liability
for abuse of directorial powers. This reasoning, it is submitted, compels the
conclusion that the position in Bahamas, Jamaica and St Christopher is the
same as in the other territories. Where the articles impose restrictions on the
business or powers of a company and the directors act contrary to these
restrictions, the directors may be liable for breach of their duties as directors.
Rule 9
An act in breach of restrictions on the company in the articles by the directors may be remedied by an
action under the Acts to restrain the directors acting in breach of the restrictions or to have any transaction
entered into by them in breach of the restrictions varied or set aside or by the shareholders requisitioning
the directors to call a meeting
There are two ways in which a breach of restrictions on the company in the
articles may be dealt with. First, in Anguilla, Antigua, the Bahamas, Barbados,
Dominica, Grenada, Guyana, Jamaica, Montserrat, St Christopher/Nevis, St
Lucia, St Vincent and Trinidad and Tobago, any shareholder or debenture-
holder, creditor, director or officer of the company may bring proceedings to
restrain the directors from entering into a transaction which is restricted by
the articles94 or to have any transaction or contract entered into by them in
breach of the restrictions varied or set aside.95 Second, in Anguilla, Antigua,
Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat, St
Christopher/Nevis, St Lucia, St Vincent and Trinidad and Tobago, the holders
of not less than 5 per cent of the share of the company that carry the right to
vote at a meeting may requisition the directors to call a meeting to deal with
the directors’ actions.96
The Exercise of Corporate Power
Corporate agency
As was noted above, a company is a persona ficta and can only exercise its
powers through natural persons acting as its agents. Such agents may be
referred to as corporate agents and may be either the company’s primary
organs, namely the board of directors or the members in general meeting, or
its officers, agents or employees. This necessarily requires rules to determine
what acts of corporate agents are to be counted as the company’s acts and
therefore binding on the company.97
Naturally, the question as to whether acts done by corporate agents bind the
company, thereby rendering it liable, will depend on the authority of such
agents to act for the company.98 Invariably, the scope of the authority of such
agents is found in the internal regulations of the company. This describes the
express actual authority of the corporate agent.99 Sometimes, also, authority
may be ascribed to corporate agents, where circumstances make it appear that
corporate agents have authority to act on behalf of the company in respect of
a given transaction. This may involve either the implied actual authority or
what is called ostensible or apparent authority.100
The question of whether the internal regulations of the company have been
complied with, and therefore, whether the company is bound, may raise a
particular difficulty of principle for a third party dealing with a company in
respect of a particular transaction. This difficulty is whether such a third party
dealing with the company is bound to ensure that all the internal regulations
of the company have in fact been complied with as regards the exercise and
the delegation of authority.101
Commonwealth Caribbean Companies Acts, except in the Bahamas and
Belize, have enacted provisions designed to deal with this difficulty.102 Prior to
these enactments, two sets of rules were developed by common law courts to
treat with the difficulty. These rules are the constructive notice doctrine and
the rule in Turquand’s Case or, as it is commonly called, the indoor
management rule. The provisions in Commonwealth Caribbean Companies
Acts are intended to modify and have modified these rules. Thus, these
statutory provisions are best explained against the backdrop of the common
law rules which they have modified.
The Companies Acts and the constructive notice doctrine
Provisions in Commonwealth Caribbean Companies Acts similar to the

provision in section 20 of the Barbados Act103 enact as follows:
No person is affected by, or presumed to have notice or knowledge of, the contents of a document
concerning a company by reason only that the document has been filed with the Registrar or is available
for inspection at any office of the company.
This provision and the corresponding provisions in regional Companies Acts

were passed to clarify the operation of the constructive notice doctrine in
Commonwealth Caribbean company law.
The constructive notice doctrine
In its essentials, the constructive notice doctrine, which remains unaffected by

statutory intervention in the Bahamas and Belize, asserts that a person dealing
with a company is deemed to have knowledge of the company’s publicly
registered documents. The doctrine itself is intimately bound up with a
fundamental principle which has underlain successive Commonwealth
Caribbean Companies Acts based on UK Acts starting with the 1844 Joint
Stock Act, namely the principle of public disclosure of corporate information.
In the context of corporate agents’ authority to bind the company, the
principle proposes that if the public and the members of the company can find
out all relevant information about the company, this would inevitably provide
investor and creditor protection against the unauthorised acts of corporate
agents by deeming notice to third parties of all express restrictions and
requirements relating to the conduct of the company’s business. Consistent
with this principle, regional company legislation has always required the filing
of certain documents with the Registrar as well as the maintenance of other
documents by the company to be made available for inspection at the office of
the company.104
There never has been any express provision in any Commonwealth
Caribbean company legislation providing that registration of company
documents should amount to notice. Nevertheless, from very early, the courts
have insisted that the constructive notice doctrine, developed in equity in
property cases, applied to companies.105 A statement of Lord Wensleydale in
the English House of Lords’ case of Ernest v Nicholls106 neatly explains the
policy behind the adoption of the constructive notice doctrine in company law
in the Commonwealth. Lord Wensleydale said:107
The Legislature then devised the plan of incorporating these companies in a manner unknown to the
common law, with special powers of management and liabilities, providing at the same time that all the
world should have notice who were the persons authorised to bind all the shareholders, by requiring the
co-partnership deed to be registered, certified by the directors, and made accessible to all; and, besides,
including some clauses as to the management, as in the Act 7 and 8 Vict c 110, s 7, etc. All persons,
therefore, must take notice of the deed and the provisions of the Act. If they do not choose to acquaint
themselves with the powers of the directors, it is their own fault, and if they give credit to any
unauthorized persons, they must be contented to look to them only, and not to the company at large. The
stipulations of the deed, which restrict and regulate their authority, are obligatory on those who deal with
the company; and the directors can make no contract so as to bind the whole body of shareholders, for
whose protection the rules are made, unless they are strictly complied with.
This statement makes it plain that the constructive notice doctrine originally
only applied to deem notice of the company’s constituent documents in
respect of the capacity of the company and the authority of its agents. In the
English case of Re London and New York Investment Corpn,108 the doctrine
was extended to apply to special resolutions and later, it was also held to apply
to company charges.109 There is, however, considerable doubt as to how far
the doctrine extends beyond these three instances to encompass the contents
of all documents required to be filed in the company registry or made
available for inspection at the company office.
Effect of the statutory provisions on constructive notice
The relationship between the provisions in Commonwealth Caribbean

Companies Acts similar to the provision in section 20 of the Barbados Act110
and the constructive notice doctrine is clear. That section establishes that the
mere fact that a document is filed with the Registrar or is available for
inspection at any office of the company does not per se fix the public with
notice of the contents of that document.
The expression ‘by reason only’ in the provision, appears to imply that the
courts, in the appropriate circumstances and based on the particular facts, may
fix third parties with notice of the contents of registered corporate documents.
In sum, the effect of the provision appears to be that while third parties are
freed of the responsibility of inspecting all registered corporate documents, the
courts are allowed to fix a third party with notice in cases where surrounding
circumstances indicate that this should be done.
The Companies Acts and the rule in Turquand’s Case
Section 21 of the Barbados Act is typical of provisions in Commonwealth

Caribbean Companies Acts, except in the Bahamas, Belize, Jamaica and St
Christopher/Nevis, and provides as follows:111
A company or guarantor of an obligation of the company may not assert against a person dealing with the
company or with any person who has acquired rights from the company
(a) that any of the articles, or bye-laws of the company or any unanimous shareholder agreement
has not been complied with;
(b) that the person named in the most recent notice to the Registrar under section 66112 or 74113 are
not the directors of the company;
(c) that the place named in the most recent notice sent to the Registrar under section 169114 is not
the registered office of the company;
(d) that a person held out as a director, an officer or an agent of the company has not been duly
appointed or has no authority to exercise the powers and perform the duties that are customary
in the business of the company or usual for such a director, officer or agent;
(e) that a document issued by any director, officer or agent of the company with actual or usual
authority to issue the document is not valid or not genuine; or
(f) that the financial assistance referred to in section 53115 or the sale, lease, or exchange of property
referred to in section 134116 was not authorized,
except where that person has, or ought to have by virtue of his position with or relationship to the
company, knowledge to the contrary.
Even a cursory reading of these provisions reveals that their objective is to

promote and facilitate corporate commercial dealings. They attempt to
achieve this by removing the need for third parties dealing with a company to
meticulously examine the company’s internal machinery to ensure that
corporate agents with whom they deal have actual authority or other
authority to bind the company. Put simply, the provisions are intended as a
restatement of the rule in Turquand’s Case.
The provisions are complex and are most conveniently discussed by way of
a statement of the rules which appear to emerge from these provisions.
Rule 1
The provisions in the Companies Acts similar to section 21 of the Barbados Act117 are to be treated as a
restatement of the rule in Turquand’s Case or, in other words, the indoor management rule.
This is manifest from the express words of the provisions. In any event,
Canadian case authority118 has consistently treated provisions in Canadian
company legislation in pari materia with the provisions in regional
Companies Acts similar to section 21of the Barbados Act119 as restatements of
the rule in Turquand’s Case.
The rule in Turquand’s Case, which remains the law in the Bahamas, Belize,
Jamaica and St Christopher/Nevis, was first established in the famous English
case of Royal British Bank v Turquand.120 The facts of that case are quite
straightforward. In that case, the Royal British Bank sued Turquand as the
liquidator of a mining and railway company for the repayment of money
borrowed on a bond from the Royal British Bank. The bond was signed by
two company directors and the secretary, and bore the company seal. Under
the registered deed of settlement, the board of directors were authorised to
borrow on bond such sums as from time to time were authorised by a
resolution of the company in general meeting. The resolution which was
required to authorise the borrowing had not been passed. It was held that
notwithstanding the fact that no resolution was passed by the company in
general meeting, the company was nevertheless bound. The reason for this
decision is ably stated in the judgment of Jervis CJ, where he said:121
We may now take for granted that the dealings with these companies are not like dealings with other
partnerships and that parties dealing with them are bound to read the statute and the deed of settlement.
But they are not bound to do more. And the party here, on reading the deed of settlement, would find not
a prohibition from borrowing, but a permission to do so on certain conditions. Finding that the authority
may be made complete by a resolution, he would be right to infer the fact of a resolution authorising that
on the face of the document appeared to be legitimately done.
This case was a particularly strong case since, as was argued by the company,
the fact that the authority to borrow was made subject to the resolution of the
company in general meeting in the deed of settlement could reasonably be
regarded as putting the bank on inquiry. Despite this, the court held that
because, under the deed of settlement, the directors might have had authority,
the bank was entitled to assume that they did in fact have authority.
Another very strong early case illustrating the operation of the rule is the
English House of Lords’ decision in Mahony v East Holyford Mining Co.122 In
this case, the company’s bank had received what purported to be a formal
copy of a resolution of the board authorising the payment of cheques signed
by any two of three named ‘directors’ and countersigned by the named
‘secretary’. This copy was itself signed by the secretary. In fact, according to
the articles of the company, the directors were to be nominated by the
subscribers to the memorandum and cheques were to be signed in such
manner as the board might determine. The bank paid the cheques accordingly.
The company’s liquidator claimed to recover the proceeds of the cheques from
the company’s bank on the basis that neither the directors nor the secretary
had ever been appointed, and as such the cheques were not signed in the
manner required by the articles. The House of Lords held that the liquidator’s
claim failed. A statement of the law in the judgment of Lord Hatherley
provides the ratio of the case:123
When they are persons conducting the affairs of the company in a manner which appears to be perfectly
consonant with the articles of association, then those so dealing with them externally are not to be affected
by any irregularities which may take place in the internal management of the company.
The policy justification for the rule in Turquand’s Case is that it furthers the
general interest of promoting and facilitating smooth commercial intercourse.
As was said by Lord Simmonds in the English House of Lords’ case of Morris v
Kanssen,124 ‘the wheels of business will not go smoothly round unless it may
be assumed that that is in order which appears to be in order’.
The basic tenets of the rule in Turquand’s Case may be easy to state and the
justification for its development by the courts readily understood. However,
the application of the rule by the courts has led to what has been described as
‘a jungle of irreconcilable decisions’.125 There is little wonder, therefore, that
Commonwealth Caribbean legislatures, accepting the jurisprudence which
compelled the judicial development of the rule in Turquand’s Case, have
sought to set out statutory rules in the Companies Acts aimed at restating and
clarifying the operation of the rule.
Rule 2
The statutory indoor management rule as stated in the provisions similar to section 21 of the Barbados
Act126 applies only to those persons dealing with the company externally. Put another way, the indoor
management rule protects only outsiders, not insiders.
Lord Hatherley, in the already quoted statement in Mahony v East Holyford

Mining Co,127 referred to those dealing with the company ‘externally’,
suggesting that the rule in Turquand’s Case could be relied on only by those
dealing with the company as outsiders and not to those dealing as insiders. It is
submitted that the words ‘except where that person has, or ought to have by
virtue of his position with or relationship to the company, knowledge to the
contrary’ in the proviso to section 21128 make it clear that the application of
the indoor management rule only to persons dealing with the company
externally or as outsiders, adumbrated by Lord Hatherley and applied in the
case law, is preserved in that proviso.
The Canadian case of Anderson Lumber Co v Canadian Conifer Ltd129 is one
of a number of Canadian cases130 which support this view of the interpretation
of the provisions in regional Acts similar to section 21 of the Barbados Act.131
In that case, it was held that a lending company was an insider and therefore
was not entitled to rely on the indoor management rule on the following facts.
The director who controlled the lending company was also a director, officer
and shareholder of the borrowing company and had knowledge that not all
the directors and shareholders had received proper notice of the meeting to
approve the borrowing of the funds and the granting of the security to the
lender. The knowledge of the controlling director was treated as knowledge of
the lending company and as such, the lending company was an insider.
The submission in respect of this rule is further amplified in the discussion
of Rule 3.
Rule 3
A person who has, or ought to have, by virtue of his position with or relationship to the company,
knowledge to the contrary is an insider and may not rely on the statutory indoor management rule.
The case of Anderson Lumber Co v Canadian Conifer Ltd132 exposes a

difficulty with the view of the law that the indoor management rule protects
only outsiders and not insiders, namely, the difficulty of deciding who is an
outsider or an insider for the purposes of Rule 2. In that case a director was
effectively held to be an insider and, on the face of it, a director would be
considered to be the quintessential insider. Despite this, Roskill J in the English
case of Hely-Hutchinson v Brayhead Ltd133 held that, in some circumstances, a
director may not be an insider. In this case, the plaintiff, a director, was seeking
to enforce a contract he had made in his private capacity with the company
acting through another director who was also chairman and who acted as
chief executive and de facto managing director, and who frequently entered
into contracts on behalf of the company with the knowledge and acquiescence
of the board. The defendant company argued that the plaintiff, because he was
a director, was an insider and, consequently, could not avail himself of the
indoor management rule.
On the foregoing facts, it was held by Roskill J that the plaintiff’s claim
would succeed, since the director could not be regarded as an insider.
According to Roskill J, a director was to be regarded an insider only if the
transaction with the company was so intimately connected with his position as
a director as to make it impossible for him not to be treated as knowing of the
limitations on the powers of the officers through whom he dealt.
It can be seen from these two cases that the question of who is an outsider
and who is an insider is far from clear. Section 21134 seeks to clarify this state
of affairs. The proviso to this section has the effect that, even where a director,
officer or agent of a company is acting with actual, usual or apparent
authority, a person that ‘has, or ought to have by virtue of his position with or
relationship to the company, knowledge to the contrary’ may not invoke the
indoor management rule against the company. This proviso is particularly
strong as it denies not only persons with knowledge to the contrary but also
those who ought to have by virtue of their position with or relationship to the
company, from invoking the indoor management rule against a company. In
effect, this proviso makes directors and other persons in a similar position with
a relationship with the company insiders. The section therefore reverses the
narrow approach of Roskill J in Hely-Hutchinson v BrayheadLtd135 on a
director being an outsider.
Rule 4
An outsider may invoke the statutory indoor management rule where a person has been held out by the
company as a director, officer or agent of the company but has not been duly appointed or has no
authority to exercise the powers and perform the duties that are customary in the business of the company
or usual for such a director, officer or agent.
This rule is derived from section 21(d)136 and is a codification of the rule in the
English Court of Appeal decision in Freeman and Lockyer v Buckhurst Park
Properties (Mangal) Ltd.137 In that case, a director was never appointed but
managed the property of a company which was formed to buy and resell a
large estate. He also acted on the company’s behalf as the managing director.
In that capacity, he appointed the plaintiffs architects to draw up plans for the
development of the land held by the company. The development ultimately
collapsed and the plaintiffs sued the company for their fees. The company
argued by way of defence the director’s lack of authority to employ the
architects.
The Court of Appeal held that although he had never been appointed
managing director of the company, and consequently had no actual or implied
authority, his actions were within the ordinary ambit of the authority of a
managing director of a property company, and the company had been aware
of his conduct and had acquiesced in it. In these circumstances, the plaintiffs
did not have to inquire whether he was properly appointed.
Three factors must be present for section 21(d)138 to apply. These are that
the person must be held out by the company as being ‘a director, officer or
agent’ of the company and that the powers exercised or the duties performed
by the person must be ‘customary in the business of the company or usual for
such a director, officer or agent’.
The requirement that the person must be ‘held out’ by the company seems
to be a requirement for a representation by the company that the person has
the authority in question.139 The question as to whether such a representation
was made is a question of fact, to be determined on the totality of the
company’s conduct. This having been said, where the company permits a
person to act in the conduct of its business,140 or where the company invests
the person with a particular office, e.g., ‘managing director’ or ‘chief financial
officer’,141 the company may be held to be holding out the person sufficient to
satisfy the requirements of section 21(d).142
The definition sections of the Companies Acts provide some indication as to
what must be shown to satisfy the requirement that the person being held out
is ‘a director, an officer or an agent of the company’. In relation to a ‘director’,
section 448(i) of the Barbados Act143 defines a director as a person occupying
in a company the position of director by whatever title he is called. ‘Officer’ is
defined in section 2(1)(f) of the Barbados Act144 as meaning:
(i) the chairman, deputy chairman, president or vice president of the

board of directors;
(ii) the managing director, the general manager, comptroller, the
secretary or the treasurer; or
(iii) any other person who performs for the body corporate functions
similar to those normally performed by the holder of any office
specified in sub-paragraph (i) or (ii).
Finally, an ‘agent’ is not statutorily defined. Thus on ordinary principles of

statutory interpretation, an agent for the purposes of the subsection means a
person, other than a director or an officer, who has the authority of the
company to act for the company in the conduct of its business.
The third factor that must be proved for section 21(d)145 to apply, namely,
that the powers exercised or the duties performed are customary in the
business of the company or usual for such a director, officer or agent is a
restatement of the principle laid down in Freeman and Lockyer v Buckhurst
Park Properties (Mangal) Ltd146 on apparent or ostensible authority. This
principle is that apparent authority is the authority of a director, officer or
agent as it appears to others and that it can operate to enlarge actual authority
or to create authority where no actual authority exists. Section 21 (d),147 on its
plain words, operates to create authority where no actual authority exists for
the exercise of the power or performance of the duty by the director, officer or
agent.
Rule 5
The statutory indoor management rule may even be relied on where a document issued by any director,
officer or agent of the company with actual or usual authority to issue the document is not valid or
genuine.
This rule is based on provisions in regional Acts similar to section 21(e) of the
Barbados Act.148 Prior to this enactment, the law on whether the indoor
management rule had any application where forgery was involved was
confused. There was, for instance, some suggestion in a dictum of Lord
Loreburn in the English House of Lords’ decision of Ruben v Great Fingall
Consolidated,149 that the rule in Turquand’s Case has no application to a
forgery. He opined there that a forgery ‘is a pure nullity’150 and that:151
It is quite true that persons dealing with limited liability companies are not bound to inquire into their
indoor management and will not be affected by irregularities of which they have not notice. But this
doctrine, which is well established, applies only to irregularities that otherwise might affect a genuine
transaction. It cannot apply to a forgery.
This dictum was applied by the English Court of Appeal in Kreditbank Cassel
v Schenkers152 and again in South London Greyhound Racecourses v Wake.153
The jurisprudential basis of the view expressed in these authorities that the
indoor management rule has no application to a forgery appears to be the idea
that an act could not be within the scope of the authority of an agent if it was
done fraudulently and for the agent’s own benefit and not for the benefit of
his principal. This view does not sit comfortably with the case of Lloyd v
Grace, Smith & Co154 where the English House of Lords held a principal liable
for the fraud of its agent committed in the course of the agent’s duties,
notwithstanding that it involved a forgery. Indeed, in the case of Uxbridge
Building Society v Pickard,155 the English Court of Appeal, in applying the
House of Lords’ decision in Lloyd v Grace, Smith & Co,156 denied that the rule
in Turquand’s Case was based on ordinary agency principles, stating that the
rule has always been held not to apply to cases of fraud. The problem with this
view of the law is that the rule was applied in the English landmark case of
Mahony v East Holyford Mining Co,157 a case involving fraud.
Section 21(e)158 has been enacted to clarify the law on the applicability of
the indoor management rule to all cases where the document is not valid or
genuine. The rule decreed by this subsection is that as long as the document is
issued by a director, officer or agent of the company with actual or usual
authority to issue it, an outsider may invoke the rule in Turquand’s Case.
Rule 6
The indoor management rule may be relied on where the company, without authorisation, gives statutory
forbidden financial assistance or enters into a statutory forbidden sale, lease, or exchange of property.
This rule is a logical extension of the original indoor management rule and is
laid down in provisions in regional Acts similar to section 21(f) of the
Barbados Act.159 The financial assistance forbidden by statute is financial
assistance rendered, when circumstances prejudicial to the company exist, by
means of a loan, guarantee or otherwise to a shareholder, director, officer or
employee of the company or affiliated company, an associate of any such
person, or to any person for the purpose of or in connection with a purchase of
a share issued by a company or a company with which it is affiliated.160 In the
meantime, the statutory forbidden sale, lease or exchange of property is a sale,
lease or exchange of all, or substantially all, the property other than in the
ordinary course of business of the company without the approval of the
shareholders of the company in accordance with the procedures stipulated in
the statute.161
Rule 7
The indoor management rule may be relied on where (i) any of the articles or bye-laws of the company or
any unanimous shareholder agreement has not been complied with;162 (ii) the persons named in the most
recent notice to the Registrar are not the directors of the company;163 or (iii) the place named in the most
recent document sent to the Registrar is not the registered office of the company.164
This rule is based on the provisions in Commonwealth Caribbean Acts similar

to those in section 21(a), (b) and (c) of the Barbados Act.165 This rule means
that a person dealing with a company is entitled to assume that all internal
matters required to be complied with in specified company documents have
been complied with. Where a matter stated in these documents does not
accord with the actual facts, the company cannot assert the fact that the
documents have not been complied with against the person dealing with it.
Conclusion
The Companies Acts in the Commonwealth Caribbean, except in Belize, have
introduced significant changes to the law which has traditionally governed
corporate capacity. All the Acts, except the Belizean Act, have abolished the
ultra vires doctrine and have conferred on companies instead the rights,
powers and privileges of an individual. Regional Acts, except in the Bahamas
and Belize, have also abolished the doctrine of notice by reason only of public
filing of corporate documents, the constructive notice doctrine, and have in its
place empowered courts to find notice where it deems it appropriate. Finally,
Montserrat, St Lucia, St Vincent, and Trinidad and Tobago have codified the
rule in Turquand’s Case and the principle of agency applied in company law
that a person dealing with a company is entitled to assume that an agent of a
company has the authority usual to persons in his position. These Acts have,
however, included important modifications and clarifications to the
Turquand’s rule. It is thought that the changes to the law governing corporate
capacity will eliminate many of the injustices which were a feature of the
traditional and will also result in the liberalisation of the capacity and powers
of companies for the protection of legitimate interests.
Notes
1 [1995] 2 AC 500 PC.
2 [1995] 2 AC 500, 506 PC.
3 Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7 HL 653, 693 Eng HL, per Lord Selborne:
‘I only repeat what Lord Cranworth in Hawkes v Eastern Counties Railway Co… stated to be settled
law, when he said that a statutory corporation, created by Act of Parliament for a particular purpose, is
limited, as to all its powers, by the purposes of its incorporation as defined in the Act. The present and
all other corporations incorporated by virtue of the Companies Act of 1862 appear to me to be
statutory corporations within this principle.’
4 See, e.g., Baroness Wenlock v River Dee Co (1885) 10 App Cas 354, 362 Eng HL per Lord Watson.
5 See Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, 506 PC per
Lord Hoffman.
6 Ang ss 17–25; Ant ss 17–25; Bah ss 24–28; B’dos ss 17–25; Dom ss 17–25; Gren ss 17–25; Guy ss 17–25; J’ca ss
4–7, 28, 30–33; Mont ss 17–25; St C/N ss 18–20, 22–24; St L ss 17–25; St V ss 17–25; T’dad ss 21–29.
7 Discussed below.
8 Discussed below.
9 Discussed below.
10 See Communities Economic Development Fund v Canadian Pickles Corpn [1992] 85 DLR (4th) 88 SCC.
11 [1843–60] All ER Rep 435.
12 See Ang s 17; Ant s 17; Bah s 24: note that s 24(3) is differently worded; Dom s 17; Gren s 17; Guy s 16; J’ca
s 4; Mont s 17; St C/N s 18(1); St L s 17; St V s 17; T’dad s 21.
13 St C/N s 18(1) reads: ‘The doctrine of ultra vires in its application to companies is abolished, and
accordingly a company has the capacity and subject to this Act, the rights, powers and privileges of an
individual.’
14 See Ang s 18; Ant s 18; Bah: no similar provision; Dom s 18; Gren s 18; Guy s 17; J’ca s 5; Mont s 18; St C/N
s 18(3); St L s 18; St V s 18; T’dad s 22.
s 18(4); St L s 19; St V s 19; T’dad s 23.
16 See Ang s 17; Ant s 17; Bah s 24; Dom s 17; Gren s 17; Guy s 16; J’ca s 4; Mont s 17; St C/N s 18; St L s 17; St
V s 17; T’dad s 21.
s 18(3); St L s 18; St V s 18; T’dad s 22.
s 18(4); St L s 19; St V s 19; T’dad s 23.
19 See Ang s 17; Ant s 17; Bah s 24: note that 24(3) is differently worded; Dom s 17; Gren s 17; Guy s 16; J’ca s
4; Mont s 17; St L s 17; St V s 17; T’dad s 21.
20 See Ang s 17; Ant s 17; Bah s 24: note that 24(3) is differently worded; Dom s 17; Gren s 17; Guy s 16; J’ca s
4; Mont s 17; St L s 17; St V s 17; T’dad s 21.
21 [1992] 85 DLR (4th) 88 SCC.
22 Section 15.
23 See Ang s 17; Ant s 17; Bah s 24; Dom s 17; Gren s 17; Guy s 16; J’ca s 4; Mont s 17; St L s 17; St V s 17;
T’dad s 21.
24 (1875) LR 7 HL 653 Eng HL.
25 (1875) LR 7 HL 653 Eng HL.
26 (1875) LR 7 HL 653, 672 Eng HL.
27 [1982] Ch 478 Eng Ch D.
28 (1875) LR 7 HL 653 Eng HL.
29 [1982] Ch 478.
30 See, e.g., Re David Payne & Co Ltd [1904] 2 Ch 608 Eng CA.
31 [1984] BCLC 466.
32 [1932] 2 Ch 46 Eng Ch D.
33 [1962] Ch 927 Eng Ch D.
34 [1932] 2 Ch 46 Eng Ch D.
35 Ibid.
36 [1967] 1All ER 427.
37 [1932] 2 Ch 46 Eng Ch D.
38 [1970] Ch 62 Eng Ch D.
39 [1932] 2 Ch 46 Eng Ch D.
40 [1982] Ch 442 Eng CA.
41 [1932] 2 Ch 46 Eng Ch D.
42 [1970] Ch 62 Eng Ch D
43 [1984] BCLC 466 Eng CA.
44 [1989] AC 755 Eng HL.
45 [1932] 2 Ch 46 Eng Ch D.
46 [1970] Ch 62 Eng Ch D.
47 [1996] 2 BCLC 34 Eng CA.
48 (1875) LR 7 HL 653 Eng HL.
49 (1880) 5 App Cas 473 Eng HL.
50 (Unreported) Civ App No 12 of 1986 St L CA.
51 Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7 HL 653 Eng HL; AG v Mersey Rly [1907] AC
415 Eng HL
52 [1918] AC 514, 523 Eng HL.
53 (1882) 20 Ch D 151 Eng CA. See also Re German Date Coffee Co (1882) 20 Ch D 169 Eng CA.
54 [1918] AC 514 Eng HL.
55 [1970] Ch 199 Eng CA.
56 (1979) 37 WIR 53 B’dos CA.
57 [1970] Ch 199 Eng CA.

58 (1867) 2 Ch App 617 Eng CA.
59 (1867) 2 Ch App 617, 624 Eng CA.
60 (1890) 44 Ch D 634.
61 [1966] QB 207 Eng CA.
62 See Caricom Report paras 4.01–4.15.
63 See Ang s 17(1); Ant s 17(1); Bah s 24(1); Dom s 17(1); Gren s 17(1); Guy s 16(1); J’ca s 4(1); Mont s 17(1); St
C/N s 18(1); St L s 17(1); St V s 17(1); T’dad s 21(1).
67 See Ang s 17(2); Ant s 17(2); Bah s 24(2); B’dos s 17(2); Dom s 17(2); Gren s 17(2); Guy s 16(2); J’ca s 4(2);
Mont s 17(2); St C/N: no corresponding provision; St L s 17(2); St V s 17(2); T’dad s 21(3).
68 Bah ss 3–9; Bel ss 4–13; St C/N ss 4–5.
V s 4(1); T’dad s 8(1).
70 See Ang s 7; Ant s 5; Dom s 5; Gren s 5; Guy s 5; J’ca s 8; Mont s 5; St L s 5; St V s 5; T’dad s 9.
72 See Ang s 17(3); Ant s 17(3); Dom s 17(3); Gren s 17(3); Guy s 16(3); J’ca s 4(3); Mont s 17(3); St L s 17(3); St
V s 17(3); T’dad s 21(4).
73 See Ang s 17(4)(a); Ant s 17(4)(a); Bah s 24(4)(a); B’dos s 17(4)(a); Dom s 17(4)(a); Gren s 17(4)(a); Guy s 16(4)
(a); J’ca 4(4)(a); Mont s 17(4)(a); St C/N s 18(2)(a); St L s 17(4)(a); St V s 17(4)(a); T’dad s 21(5)(a).
74 See Ang s 17(4)(b); Ant s 17(4)(b); Bah s 24(4)(b); B’dos s 17(4)(b); Dom s 17(4)(b); Gren s 17(4)(b); Guy s 16(4)
(b); J’ca 4(4)(b); Mont 17(4)(b); St C/N s 18(2)(b); St L s 17(4)(b); St V s 17(4)(b); T’dad s 21(5)(b).
75 See Ant s 5(1)(e); Bah: no corresponding provision; Dom s 5(1)(e); Gren s 5(1)(e); Guy s 5(1)(e); J’ca s 8(1)(f);
St C/N: no corresponding provision; Mont s 5(1)(e); St L s 5(1)(e); St V s 5(1)(e); T’dad s 9(1)(f).
76 See Ang s 18(a) and (b); Ant s 18(1); Bah: no corresponding section; Dom s 18(1); Gren s 18(1); Guys 17; J’ca
s 5; Mont s 18(1); St C/N s 18(3); St L s 18(1); St V s 18(1); T’dad s 22.
77 Ang s 19; Ant s 19; Bah: see s 24(3) which reads: ‘Any limitations in the memorandum or articles on the
objects or powers of the company or any limitations whether in the memorandum or articles or resulting
from a decision of the company in general meeting on the authority of the board of directors or officers of
the company, shall not affect a third party, unless that party actually knows of such limitations or the lack
of such authority relating to the relevant transaction.’; Dom s 19; Gren s 19; Guy s 17; J’ca s 6; Mont s 19; St
C/N s 18(4); St L s 19; St V s 19; T’dad s 23.
78 See Ang s 19; Ant s 19; Bah: see s 3; Dom s 19; Gren s 19; Guy s 17; J’ca s 6; Mont s 19; St C/N s 18(4); St L s
19; St V s 19; T’dad s 23.
79 (1987) 45 DLR (4th) 16 Ont HC.
80 See Ang s 19; Ant s 19; Bah: see s 24(3); Dom s 19; Gren s 19; Guy s 17; J’ca s 6; Mont s 19; St C/N s 18(4); St
L s 19; St V s 19; T’dad s 23.
L s 19; St V s 19; T’dad s 23.
82 See Ang s 17; Ant s 17; Bah s 24; Dom s 17; Gren s 17; Guy s 16; J’ca s 4; Mont s 17; St C/N s 18 (worded
differently) St L s 17; St V s 17; T’dad s 21.
83 See Ang s 17; Ant s 17; Bah s 24; Dom s 17; Gren s 17; Guy s 16; J’ca s 4; Mont s 17; St C/N s 18 (worded
differently) St L s 17; St V s 17; T’dad s 21.
L s 19; St V s 19; T’dad s 23.
85 Communities Economic Development Fund v Canadian Pickles Corpn [1992] 85 DLR (4th) 88 SCC;
Distributelite Ltd v Toronto Board of Education Staff Credit Union Ltd (1987) 45 DLR (4th) 16 Ont HC.
86 See Ang s 59(1); Ant s 58(1); Bah s 79; Dom s 58(1); Gren s 58(1); Guy s 59(1); Mont s 58(1); St L s 58(1); St V
s 58(1); T’dad s 60.
87 See Ang s 61; Ant s 63; Dom s 63; Gren s 63; Guy s 61; Mont s 63; St C/N: no similar provision; St L s 63; St
V s 63.
88 See Ang s 59(1); Ant s 58(1); Bah s 84; Dom s 58(1); Gren s 58(1); Guy s 59(1); Mont s 58(1); St L s 58(1); St V
s 58(1); T’dad s 60.
89 See Ang s 17; Ant s 17; Bah s 24; Dom s 17; Gren s 17; Guy s 16; J’ca s 4; Mont s 17; St C/N s 18: worded
differently; St L s 17; St V s 17; T’dad s 21.
90 See Ang s 61; Ant s 63; Dom s 63; Gren s 63; Guy s 61; Mont s 63; St L s 63; St V s 63.
91 See Ang s 61; Ant s 63; Dom s 63; Gren s 63; Guy s 61; Mont s 63; St L s 63; St V s 63.
92 See Ang s 97(5); Ant s 97(5); Bah s 24(3); B’dos s 95(4); Dom s 97(5); Gren s 97(5); Guy s 96(4); J’ca s 4; Mont
s 97(5); St L s 97(5); St V s 97(5); T’dad s 99(5).
93 [1984] BCLC 466 Eng CA.
94 Ang s 260(3)(a); Ant s 241(3)(a); Bah s 280(3)(a); B’dos s 228(3)(a); Dom s 241(3)(a); Gren s 97(5)(a); Guy s
224(3)(a); J’ca s 213A (3)(a); Mont s 241(3)(a); St C/N s 141 provides for an action for ‘unfair prejudice’; St L
s 241(3)(a); St V s 241(3)(a); T’dad s 242(3)(a).
95 Ang s 260(3)(h); Ant s 241(3)(h); Bah s 280(3)(h); B’dos s 228(3)(h); Dom s 241(3)(h); Gren s 97(5)(h); Guy s
224(3)(h); J’ca s 213A (3)(h); Mont s 241(3)(h); St C/N s 143(2); St L s 241(3)(h); St V s 241(3)(h); T’dad s 242(3)
(h).
96 Ang s 121(1); Ant s 131(1); B’dos s 129(1); Dom s 131(1); Gren s 131(1); Guy s 135(1); J’ca s 128; Mont s 131(1);
St C/N s 89 (provision differently worded) St L s 131(1); St V s 131(1); T’dad s 133(1).
97 See Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, 506–507 PC per
Lord Hoffmann.
98 See Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964 2 QB 480 Eng CA.
99 Hely Hutchinson v Brayhead Ltd [1968] 1 QB 549 Eng CA.
100 Ibid.
101 See Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 PC.
102 Ang ss 20 and 21; Ant ss 20 and 21; B’dos ss 20 and 21; Dom ss 20 and 21; Gren ss 20 and 21; Guy ss 19 and
20; J’ca s 7; Mont ss 20 and 21; St C/N s 19; St L ss 20 and 21; St V ss 20 and 21; T’dad ss 24 and 25.
103 See Ang s 20; Ant s 20; Dom s 20; Gren s 20; Guy s 19; J’ca s 7; Mont s 20; St C/N s 19: but note the different
wording; St L s 20; St V s 20; T’dad s 24: but note the proviso.
104 See discussion of these in Chapter 3.
105 See, e.g., Ernest v Nicholls (1857) 6 HL Cas 401 Eng HL; Irvine v Union Bank of Australia (1877) 2 App Cas
366 Aus PC.
106 (1857) 6 HL Cas 401 Eng HL.
107 (1857) 6 HL Cas 401, 418–419 Eng HL.
108 [1895] 2 Ch 860. See also Irvine v Union Bank of Australia (1877) 2 App Cas 366 Aus PC.
109 Re Standard Rotary Machine Co Ltd (1906) 95 LT 829; Wilson v Kelland [1910] 2 Ch 306.
110 See Ang s 20; Ant s 20; Dom s 20; Gren s 20; Guy s 19; J’ca s 7; Mont s 20; St C/N s 19: but note the different
wording; St L s 20; St V s 20; T’dad s 24: but note the proviso.
111 See Ang s 21; Ant s 21; Dom s 21; Gren s 21; Guy s 20; Mont s 21; St L s 21; St V s 21; T’dad s 25.
118 See, e.g., Baranowski v Binks Manufacturing Co (2000) 49 C Cel (2d) 107 Ont SCJ; Royal Bank v Ag-Com
Trading Inc (2001) 2 PPSAC (3d) 1 Ont SCJ [Commercial List]; McAteer v Devoncraft Developments Ltd
(2001) 24 BLR (3d) 1 Alta QB.
120 (1856) 6 E & B 327 Eng Exch Ch.
121 (1856) 6 E & B 327, 332 Eng Exch Ch.
122 (1875) LR 7 HL 869 Eng HL.
123 (1875) LR 7 HL 869, 894 Eng HL.
124 [1946] AC 459, 475 Eng HL.
125 Gower, Gower’s Principles of Modern Company Law (4th edn London: 1979) 184.
127 (1875) LR 7 HL 869, 894 Eng HL.

129 [1977] 77 DLR (3d) 126 Alta CA. See also Baranowski v Binks Manufacturing Co (2000) 49 CCel (2d) 107 Ont
SCJ; Royal Bank v Ag-Com Trading Inc (2001) 2 PPSAC (3d) 1 Ont SCJ [Commercial List]; McAteer v
Devoncraft Developments Ltd (2001) 24 BLR (3d) 1 Alta QB.
130 See, e.g., Baranowski v Binks Manufacturing Co (2000) 49 CCel (2d) 107 Ont SCJ; Royal Bank v Ag-Com
Trading Inc (2001) 2 PPSAC (3d) 1 Ont SCJ [Commercial List]; McAteer v Devoncraft Developments Ltd
(2001) 24 BLR (3d) 1 Alta QB.
132 [1977] 77 DLR (3d) 126 Alta CA.
133 [1967] 3 All ER 98 Eng Ch D (affd by the Court of Appeal on other grounds, [1968] 1 QB 549 Eng CA).
134 See Ang s 21; Ant s 21; Dom s 21; Gren s 21; Guy s 20; St L s 21; St V s 21; T’dad s 25.
135 [1967] 3 All ER 98 Ch D (affd by the Court of Appeal on other grounds [1968] 1 QB 549 Eng CA).
136 See Ang s 21(d); Ant s 21(d); Dom s 21(d); Gren s 21(d); Guy s 20(d); Mont s 21(d); St L s 21(d); St V s 21(d);
T’dad s 25(d).
137 [1964] 2 QB 480 Eng CA.
T’dad s 25(d).
139 Compare Browne-Wilkinson V-C in Egyptian International Foreign Trade Co v Soplex Wholesale Supplies
Ltd, The Raffaella [1985] 404, 411 Eng CA.
140 See, e.g., Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 Eng CA.
141 See, e.g., Browne-Wilkinson V-C in Egyptian International Foreign Trade Co v Soplex Wholesale Supplies
Ltd, The Raffaella [1985] 404, 411 Eng CA.
T’dad s 25(d).
143 See Ang s 1; Ant s 543(1)(f); Dom s 543(1)(f); Gren s 543(1)(f); Guy s 535(i); Mont s 543(1)(f); St L s 543(1)(f);
St V s 543(1)(f); T’dad s 4.
144 See Ang s 1; Ant s 543; Dom s 543; Gren s 543; Guy s 1(g); Mont s 543; St L s 543; St V s 543; T’dad s 4.
T’dad s 25(d).
146 [1964] 2 QB 480 Eng CA.
T’dad s 25(d).
148 See Ang s 21(e); Ant s 21(e); Dom s 21(e); Gren s 21(e); Guy s 20(e); Mont s 21(e); St L s 21(e); St V s 21(e);
T’dad s 25(e).
149 [1906] AC 439 Eng HL.
150 [1906] AC 439, 443 Eng HL.
151 Ibid.
152 [1927] 1 KB 826 Eng CA.
153 [1931] 1 Ch 496 Eng Ch D.
154 [1912] AC 716 Eng HL.
155 [1939] 2 KB 248 Eng CA.
156 [1912] AC 716 Eng HL.
157 (1875) LR 7 HL 869 Eng HL.
158 See Ang s 21(e); Ant s 21(e); Dom s 21(e); Gren s 21(e); Guy s 20(e); Mont s 21(e); St L s 21(e); St V s 21(e);
T’dad s 25(e).
159 See Ang s 21(f); Ant s 21(f); Dom s 21(f); Gren s 21(f); Guy s 20(f); Mont s 21(f); St L s 21(f); St V s 21(f);
T’dad s 25(f).
160 Ang s 54; Ant s 53; B’dos s 53; Dom s 53; Gren s 53; Guy s 54; Mont s 53; St L s 53; St V s 53; T’dad s 56.
161 Ang s 125; Ant s 136; B’dos s 134; Dom s 136; Gren s 136; Guy s 140; Mont s 136; St L s 136; St V s 136; T’dad
s 138.
162 Ang s 21(a); Ant s 21(a); B’dos s 21(a); Dom s 21(a); Gren s 21(a); Guy s 20(a); Mont s 21(a); St L s 21(a); St V
s 21(a); T’dad s 25(a).
163 Ang s 21(b); Ant s 21(b); B’dos s 21(b); Dom s 21(b); Gren s 21(b); Guy s 20(b); Mont s 21(b); St L s 21(b); St
V s 21(b); T’dad s 25(b).
164 Ang s 21(c); Ant s 21(c); B’dos s 21(c); Dom s 21(c); Gren s 21(c); Guy s 20(c); Mont s 21(c); St L s 21(c); St V
s 21(c); T’dad s 25(c).
165 See Ang s 21(a), (b) and (c); Ant s 21(a), (b) and (c); Dom s 21(a), (b) and (c); Gren s 21(a), (b) and (c); Guy s
20(a), (b) and (c); Mont s 21(a), (b) and (c); St L s 21(a), (b) and (c); St V s 21(a), (b) and (c); T’dad s 25(a), (b)
and (c).
Chapter 7
Raising Share Capital
Introduction
Traditionally, a critical starting point in Commonwealth Caribbean corporate
finance law is the premise that a limited liability company has only its share
capital, often also referred to as the equity of the company, to back its credit,
and that this being so, it is essential that the share capital of a limited liability
company should be carefully defined and, as far as possible, retained in the
business.1 That said, more recently, an attempt to balance the traditional
approach to share capital with the need to develop flexible share capital
dealings which encourage investment in the equity of companies has become
a common feature of corporate financing theory and practice.
Given the central place of share capital in corporate finance, it is not
surprising to find extensive provisions containing rules on the raising and
maintenance of share capital designed to achieve a balance between the
traditional approach and the modern approach in the Companies Acts in the
region.2 These rules are complex and must be approached carefully.
Accordingly, this chapter deals with the rules governing the raising of share
capital. The next chapter deals with the rules concerning maintenance of
capital.
Share Capital
Legal concept of capital
In the Ontario Court of Appeal case of St Michael Uranium Mines Ltd v

Rayrock Mines Ltd,3 Le Bel JA observed that the expression ‘capital’ is a word
of many different applications, and in legal, economic and accounting
applications is used loosely to describe different concepts at different times. Le
Bel JA said:4
I think … it is right to say that there is confusion commonly existing regarding the meaning of the term
capital in corporation financing. To the economist it usually signifies tangible instruments of production,
that is, physical assets used in the creation of other goods or services. The average man frequently thinks
of ‘money’ as ‘capital’ and uses the terms synonymously, and bankers often use the word capital, in the
sense of net worth. However, in business parlance the term ordinarily means the investment in the
enterprise, which from the legal point of view, may be thought of as being represented by money or
money’s worth consisting of property and valuable tangible assets, the corpus of the corporate business.
The same point was made in the Australian High Court case of Incorporated
Interest Pty Ltd v Federal Commissioner of Taxation5 by Latham CJ, who
opined that ‘it is impossible to say that “capital” has a single technical meaning
which prima facie should be attributed to the word in any statutory provision’.
Despite its lack of a technical legal meaning, and despite the fact that
Commonwealth Caribbean Companies Acts all contain either a ‘Division’6 or
a ‘Part’7 headed ‘Share Capital’, none of these Acts provide any statutory
definition of the expression ‘capital’. It is imperative, therefore, that some
attempt be made to explore the legal signification of the expression ‘share
capital’ as it appears in Commonwealth Caribbean Companies Acts.
Capital, or, as Le Bel JA calls it, the investment of money or money’s worth
in the corporate business, is necessary for a company to finance its operations.
Generally speaking, there are three sources from which companies derive
finance to fund their operations.8 These are share issues, debt and retained
earnings. Money or money’s worth raised by share issues constitute share
capital or equity and money or money’s worth raised by debt constitutes debt
capital. Retained earnings are the profits generated by the business of the
company which is retained by the company. Share capital then refers to that
part of a company’s capital which is raised by the issue of shares.9
In legal theory, the company is a separate legal person, the subject of rights
and duties. But the company is also the object of rights and duties. The capital
of a company may be viewed as represented by the fund of assets which
defines the company as the object of rights and liabilities. The share capital is
that part of the fund of assets received as consideration for the issue of shares
and which is maintained by the company in a stated capital account.10
Nominal or authorised capital
Prior to the enactment of the present Companies Acts in the region, it was a
requirement in Commonwealth Caribbean company law that the share capital
with which a company proposed to be registered and the nominal value of
each share into which the share capital was to be divided be stated in the
company’s memorandum of association.11 The share capital stated in the
company’s memorandum was known as its authorised or nominal capital, and
represented the maximum amount of share capital that a company could issue
at any given time. If a company wished to raise share capital beyond this
maximum, it could, if so authorised by its articles, alter this limit by an
ordinary resolution and increase its share capital by new shares of such
amount as it deemed expedient.12
Except in the Bahamas, Belize and St Christopher/Nevis,13 none of the
existing regional Companies Acts contain any requirement that a company
must have an authorised or nominal capital. Rather, these Acts permit a
company to impose traditional restrictions if its incorporators feel that such
restrictions are appropriate or desirable.14 Where they do so, the Acts merely
require that the maximum number of shares which the company is authorised
to issue be set out in the articles of incorporation.15
The approach of the regional legislation to do away with the authorised
capital requirement may be justified on two grounds. First, it reflects the
almost universally held view that the authorised capital concept is more or less
meaningless in contemporary corporate finance, as it gives no indication as to
how much finance has previously been raised by share issues. Second, it
simplifies corporate share structure by avoiding the necessity of having to
amend the articles in order to increase the authorised capital.
Authorised minimum share capital
The authorised minimum share capital is the minimum paid-up share capital
which a company is statutorily mandated to have before it commences
business. It is only in the Bahamas and Jamaica16 that there is a requirement in
Commonwealth Caribbean Companies Acts for an authorised minimum share
capital. The differences between the provisions in the Bahamian and Jamaican
Acts are substantial and consequently merit separate treatment.
Under the Bahamian Act
Under the Bahamian Act, a company cannot commence business or exercise

any borrowing power unless four conditions relating to a minimum paid-up
share capital are satisfied.17 The first of these is that shares, held subject to the
payment of the whole of the amount thereof in cash, must have been allotted
to an amount not less in the whole than the ‘minimum subscription’.18 The
‘minimum subscription’ is either the amount, if any, fixed by the
memorandum or articles and named in the prospectus as the minimum
subscription upon which the directors may proceed to allotment, or if no
amount is so fixed and named, then the whole amount of the share capital
offered for subscription, reckoned exclusive of an amount payable otherwise
than in cash.19
The second condition is that every director of the company must have paid
to the company on each of the shares taken or contracted to be taken by him,
and for which he is liable to pay in cash, a proportion equal to the proportion
payable on application and allotment of the shares offered for public
subscription.20 In the case of a company which does not issue a prospectus
inviting the public to subscribe for its shares, the amount which must have
been paid is a proportion equal to the proportion payable on application and
allotment on the shares payable in cash.21
The third condition is that there must have been filed with the Registrar a
‘statutory declaration’ by the company secretary or one of the company
directors.22 The ‘statutory declaration’ must be in the approved form and it
must state that the company has not made any allotment of any share capital
of the company offered to the public for subscription in breach of the
conditions specified in section 40 of the Act on restrictions on allotment of
share capital offered to the public for subscription.23
The fourth and final condition is that, in the case of a company which does
not issue a prospectus inviting the public to subscribe for its shares, a
statement in lieu of a prospectus must have been delivered to the Registrar.24
On the filing of a statutory declaration, the Registrar must certify that the
company is entitled to commence business. The certificate so issued by the
Registrar is conclusive evidence that the company is so entitled. However, in
the case of a company which does not issue a prospectus inviting the public to
subscribe for its shares, the Registrar may not issue such a certificate unless a
statement in lieu of a prospectus has been filed with him.25
Section 34(1) of the Jamaican Act forbids a public company, which has a share
capital on its original incorporation, from doing any business or exercising any
borrowing power unless the Registrar has issued it with a certificate or the
company is re-registered as a private company. In turn, the Registrar is only
permitted to issue such a certificate to a public company where he is satisfied
that the company’s allotted share capital is not less than the ‘authorised
minimum’ and there is delivered to the Registrar a statutory declaration as
prescribed in the Act.26
The ‘authorised minimum’ means J$500,000 or such other sum as the
Minister may by order prescribe.27 Where the Minister makes an order
increasing the authorised minimum, the order may require any public
company having an allotted share capital of which the value is less than the
amount specified in the order as the authorised minimum to increase that
value to not less than the amount or make application to be registered as a
private company.28 The order may also make, in connection with any such
requirement, provision for any of the matters for which provision is made by
the Act relating to a company’s registration, re-registration or change of
name,29 or payment for any shares and offers of shares in or debentures of a
company to the public.30 Finally the order may contain such supplemental and
transitional provisions as the Minister thinks appropriate, make different
provisions for different cases and in particular, provide for any provision of the
order to come into operation on different days for different purposes.31
The statutory declaration must be in the prescribed form and be signed by a
director or secretary of the company.32 It has to state that the value of the
company’s allotted share capital is not less than the authorised minimum.33 It
must specify the amount paid up, at the time of the application, on the
company’s allotted share capital.34 It must also specify the amount, or
estimated amount, of the company’s preliminary expenses and the persons by
whom any of those expenses have been paid or are payable.35 Finally, it must
specify the amount or benefit paid or given, or intended to be paid or given, to
any promoter of the company, and the consideration for the benefit of the
company.36
The rationale for authorised minimum share capital provisions is the
prevention of business failures arising from under-capitalisation. However, the
efficacy of these provisions may be questioned for a number of reasons. First,
for instance, the authorised minimum in the Jamaican Act which is defined as
J$500,000 could scarcely be expected to prevent under-capitalisation in most
businesses, given the value of the Jamaican dollar. Second, the authorised
minimum requirement only regulates capital at the time of incorporation but
does not deal with the problem when the company has grown and changed
considerably. Third, the requirement may represent an interference with the
role of management in settling questions of capitalisation.
Share Issue
Meaning of share issue
As has been seen, share capital is raised by the company issuing shares.
Provisions in regional Companies Acts similar to section 33(1) of the Trinidad
and Tobago Act contain the basic rule on share issue.37 This section provides
that, subject to the articles, bye-laws, and any unanimous shareholders’
agreement, shares may be issued at such times and to such persons and for
such consideration as the directors may determine.
Despite the express reference to share ‘issue’ in the Acts, the Acts do not
contain any definition of the term ‘issue’. However, in the English case of Levy
v Abercorris Slate and Slab Co,38 a case concerning an issue of debentures,
Chitty J commented that “‘issued” is not a technical term, it is a mercantile
term well understood’.39 There is no reason to believe that this comment is not
equally applicable to an issue of shares. This being so, an ‘issue’, for purposes
of the Acts, appears to connote some act done whereby the title to the share is
completed.40
It may be quickly noted that an ‘issue’ is something different and distinct
from an ‘allotment’.41 An allotment in respect of shares has been equated with
the forming of an enforceable contract for the issue of shares. Put another way,
an allotment creates an enforceable contract for the issue of shares. An issue,
on the other hand, occurs after an application to the company has been
followed by an allotment and notification to the purchaser and the title to the
shares completed by registration on the register of shareholders.42
Nominal or par value and no par value
The concept of nominal or par value shares has been a traditional feature of
Commonwealth Caribbean company legislation.43 This was because, as has
been seen, companies were required to state in their memorandum of
association the share capital with which they proposed to be registered and
the nominal value of each share into which the share capital was to be
divided.44 Par value was the value which was ascribed to shares in the
memorandum of association without any necessary reference to the actual
market value of the shares.
The par value rule forbade companies from issuing shares for less than their
par value.45 This rule was thought to ensure that the nominal capital stated by
the company in its memorandum was raised. The par value concept has been
criticised as taking away flexibility in raising share capital in some cases.46 It
has also been criticised as being sometimes misleading to the investing public
since it may encourage the belief that a meaningful relationship exists
between the par value of a share and its real value.47 In this regard, the authors
of the Federal Proposals commented as follows:48
A share is simply a proportionate interest in the net worth of a business. Par value obscures this reality,
while the concept of a share without par value precisely embodies it…. What matters to an investor is the
proportionate size of his investment in a corporation, not the arbitrary monetary denomination attributed
to that investment.
The present Companies Acts in the Commonwealth Caribbean reveal a

number of approaches to par value shares. The Acts in Anguilla, Antigua,
Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago have abolished par value shares and have
introduced a system of no par value.49 These Acts declare that ‘shares in a
company are to be without nominal or par value’.50 Under these provisions
also, when an existing company is continued under these Acts, a share with a
nominal or par value issued by the company before it was so continued is
deemed to be a share without nominal or par value.51
The regime in Jamaica is different. The Jamaican Act provides that from the
commencement of that Act, shares in a company are to be issued without
nominal or par value.52 A share with nominal or par value issued before the
commencement of the Act is deemed to be a share without nominal or par
value.53 An existing company may, however, by ordinary resolution within six
months of the commencement of the Act, elect to retain its existing shares
with a nominal or par value and to continue to issue shares with a nominal or
par value.54 An existing company, which fails to make such an election, is
deemed to have converted, at the end of six months after the commencement
of the Act, its existing shares to shares without nominal or par value and any
shares issued thereafter must be issued without a nominal or par value.55 At
the end of eighteen months from the election, an existing company which has
made an election is deemed to have converted its existing shares to shares
without a nominal or par value and any shares issued thereafter must be
issued without a nominal or par value.56 In this way, the Jamaican Act
provides for a phasing out of nominal or par value shares.
In the Bahamas, par value shares and no par value shares are optional. The
Act there provides that ‘shares may have a nominal or par value or may be of
no par value.’57
The par value system remains unaltered in Belize.58
In St Christopher/Nevis the system of par value shares is maintained. Under
the Act in that country, the ‘stated value’ of shares must be stated in the
memorandum.59 The ‘stated value’ of a share is defined as the minimum
amount per share to be received by a company for shares issued by it.60
‘Stated value’ is therefore another expression for par value.
Issue at discount
As has just been seen, under the Acts in Anguilla, Antigua, Barbados,
Trinidad and Tobago, shares in a company are to be without nominal or par
value.61 The question of issuing shares at a discount, or, in other words, for less
than their nominal or par value, does not therefore arise. But as has just been
also seen, under the Bahamian Act, the shares of a company may have a
nominal or par value or may be of no par value,62 under the Belize Act, shares
must have a nominal or par value,63 under the Jamaican Act, an existing
company may elect to continue to issue par value shares for up to eighteen
months after the commencement of that Act, and under the St
Christopher/Nevis Act the shares of a company must have a ‘stated value’, or
in other words a par value.64 Because of these provisions, the rules governing
the issuing of shares at a discount may arise.
Neither the Bahamian Act nor the Belizean Act contains any provision in
respect of issuing shares at a discount. This means that that the common law
still applies and so the rule laid down in the landmark English House of Lords
case of Ooregum Gold Mining Co of India v Roper65 that shares may not be
issued at a discount applies in the Bahamas and Belize.
The facts of Ooregum Gold Mining are that the market value of the shares
of the company was less than their nominal value. As it was not feasible to
issue them for the full nominal amount, the company issued new £1 shares for
5 shillings each, the remaining 15 shillings being credited as fully paid up. The
issue was entirely bona fide and in the interest of the company. It was held by
the House of Lords that there was no power under the relevant Companies
Act to issue shares at a discount, and consequently, upon the principle laid
down in Ashbury Railway Carriage and Iron Co Ltd v Riche,66 the issue of
shares at a discount by the company was ultra vires and void. The allottee,
therefore, remained liable to pay the amount by which the share was
discounted. Lord Macnaughten explained that, in a limited liability company,
shareholders purchase immunity from liability beyond the amount due on
their shares on the basis that they remained liable up to that limit. In his
words, ‘Nothing but payment, and payment in full, can put an end to
liability.’67
In Jamaica, the rule in Ooregum Gold Mining Co of India v Roper68 is
reflected in section 58 of the repealed Companies Act which prohibits a
company issuing shares at a discount. That section is made applicable to
existing companies which elect to retain their existing nominal or par value
shares by section 37(5) of the present Act.
The rule in Ooregum Gold Mining Co of India v Roper69 is also enacted into
law under the St Christopher/Nevis Act.70 Section 35(1) of that Act expressly
forbids any company issuing shares at a discount. However, that Act allows an
exception to the no discount rule in respect of a payment made or
remuneration given by a company to a broker making his usual charges for
services rendered to the company.71 The Act also allows an exception to the no
discount rule in relation to the payment of underwriting commissions.72 In this
regard, the Act provides that a company may pay a commission to a person in
consideration of his subscribing or agreeing to subscribe, whether absolutely
or conditionally, for shares in the company, or procuring or agreeing to
procure subscriptions for shares in the company.73 Certain stated conditions
must, however, be satisfied.74 These include (i) that the payment of the
commission is authorised by the company’s articles;75 (ii) that the commission
does not exceed 40 per cent of the price at which the shares are allotted or the
amount or rate authorised by the articles, whichever is less;76 and (iii) in the
case of a public company, the amount or rate per cent of commission, and the
number of shares which persons have agreed for a commission to subscribe
absolutely are disclosed either in a prospectus or statement in lieu of a
prospectus.77
The Bahamian Act permits companies to pay underwriting commissions,
provided they are made by the directors acting honestly and in good faith
with a view to the best interest of the company.78 The commission must not
exceed 10 per cent of the amount paid or to be paid for the shares.79 The effect
of this provision is to allow a more limited exception to the no discount rule
than the St Christopher/Nevis Act in the case of companies which opt to issue
par value shares.
Issue at premium
Because, as has been seen, under most Commonwealth Caribbean Companies

Acts shares are without nominal or par value, the question of issuing shares at
a premium or above a nominal or par value does not usually arise. It does
arise in Jamaica in relation to existing companies which elect to retain their
nominal or par value shares, in the Bahamas in relation to companies which
opt to issue nominal or par value shares, and in Belize and St
Christopher/Nevis in relation to all companies with a share capital.
At common law, there is no rule against a company issuing shares at a price
exceeding their nominal or par value, or in other words, at a premium. At
common law also, share premiums can be treated totally differently from
share capital and can be distributed as dividends. As neither the Bahamian Act
nor the Belizean Act legislates to the contrary, the common law is still the law
in these territories.
In Jamaica, section 37(5) makes section 56 of the repealed Companies Act
applicable to existing companies which elect to retain their nominal or par
value shares. Section 56 of the repealed Companies Act stipulates that, where
a company issues shares at a premium, a sum equal to the total amount of the
premium be transferred to the ‘share premium account’, which for most
purposes has to be treated as if it were share capital.
Section 56 of the repealed Companies Act provides that the share premium
account may be applied by the company for the following purposes:
(i) in paying up unissued shares to be allotted to members as fully paid

bonus shares; or
(ii) in writing off (a) the preliminary expenses of the company, or, (b) the
expenses of, or the commission paid or discount allowed on any issue
of shares of the company; or
(iii) in providing for the premium payable on redemption or purchase of
the shares of the company.
The provisions in the St Christopher/Nevis Act are identical to those in section

56 of the repealed Jamaican Companies Act.80
Bearer shares or share warrants and bearer certificates
Territories prohibiting bearer shares

There is a provision in regional Companies Acts, except in the Bahamas,
Belize, Jamaica and St Christopher/Nevis, expressly forbidding companies
from issuing bearer shares and bearer certificates.81 A bearer share, which is
sometimes called a share warrant, is a document sealed by the company
stating that the bearer is entitled to the shares specified therein. Usually,
provision is made in the document for obtaining dividends by a delivery to the
company of coupons detachable from the warrant. Bearer shares have
apparently been rarely used by regional companies and investors.82 In fact,
even where issued, there is usually some requirement that they be held by an
authorised bank as depository, thereby depriving them of their principal legal
value, their negotiability.83 In these circumstances it is not surprising that most
of the Acts in the region have expressly banned bearer shares.
Territories permitting share warrants
The Bahamas Act
The Bahamas Act permits a company limited by shares, subject to the

Exchange Control Regulations Act and if so authorised by its articles, to issue
share warrants with respect to fully paid up shares or to stock.84 The warrant
must state that the bearer is entitled to the shares or stock therein specified
and may provide, by coupon or otherwise, for the payment of future dividends
on the shares or stock included in the warrant.85 The warrant entitles the
bearer thereof (i) to the shares or stock specified in the warrant;86 (ii) to
transfer the shares or stock by delivery of the warrant;87 (iii) subject to the
articles, on surrendering the warrant for cancellation, to have his name
entered as a member in the register of members;88 (iv) to hold the company
responsible for any loss by any person by reason of the company entering in
its register the name of the bearer of a share warrant in respect of the shares
or stock therein specified without the warrant being surrendered or
cancelled;89 and (v) if the articles so provide, to be deemed a member of the
company. The bearer is not qualified in respect of shares or stock specified in
the warrant to be a director or manager of the company in cases where such a
qualification is required by the articles.90
On the issue of a share warrant, the company must strike out of its register
of members the name of the member then entered therein as holding the
shares or stock specified in the warrant as if he had ceased to be a member.91
The company must then enter in the register the fact of the issue of the
warrant;92 a statement of the shares or stock included in the warrant,
distinguishing each share by its number;93 and the date of the issue of the
warrant.94
The Belize Act
Section 38 of the Belize Act provides for the issue of share warrants. The
provisions in section 38 of that Act are almost identical to the provisions in the
Bahamas Companies Act which have just been discussed.
The Jamaica Act
The issue of share warrants is also permitted under the Jamaica Companies
Act.95 Under this Act, a company limited by shares, if so authorised by its
articles, may, with respect to fully paid up shares, issue a share warrant.96 The
warrant must be issued under the company’s common seal and must state that
the bearer of the warrant is entitled to the shares specified in the warrant.97
The warrant may provide, by coupon or otherwise, for the payment of the
future dividends on the shares included in the warrant.98 The bearer of a share
warrant is entitled to the shares specified in the warrant and to transfer those
shares by delivery of the warrant.
The St Christopher/Nevis Act

The issue of bearer certificates by a private company which carries on business
exclusively with persons who are not resident in St Christopher/Nevis, called
an ‘exempt company’, is permitted under the St Christopher/Nevis Act.99 A
condition of such an issue is that the issue must be authorised by the
company’s articles.100
The bearer certificate must state that the holder of the certificate is entitled
to the share or shares specified therein, and may provide, by coupons or
otherwise, for the payment of dividends on the shares included in such
certificate.101 The bearer certificate must be distinguished by its identification
number and it must state (i) the name of the company issuing the certificate;
(ii) the number of shares and the class of shares in the company contained in
the certificate; and (iii) the date recorded in the register of members of the
company as being the date on which the certificate was issued.102
The bearer certificate must not in any manner whatsoever bear any
indication of the ‘stated value’103 of the shares comprised in it.104 However,
once a bearer certificate is sealed by the company and signed by two of its
directors, or by one such director and its secretary, it is prima facie evidence
that its holder is entitled to the shares contained in it.105 Shares contained in
the bearer certificate may be transferred by delivery of the bearer
certificate.106
Pre-emptive rights issue
A pre-emptive rights issue describes the right of existing shareholders to have

shares first offered to them in proportion to their existing shareholdings before
any new issue of shares. The justification for such pre-emptive rights, as they
are called, has been stated by an American scholar as follows:107
[O]n the issue of additional shares, the existing shareholders, as the ultimate co-proprietors of the business,
have the right to proper protection against the dilution, without their consent, of their existing interests in
the corporate assets and earnings, and of their proportionate voting control.
On the other hand, opponents of pre-emptive rights argue that existing

shareholders’ protection against unwarranted dilution of their interest is best
achieved by reliance on the directors’ fiduciary duties. Further, they contend
that pre-emptive rights provisions impede the flexibility in the issuance of
shares which is demanded in corporate financing decision making.108
Whatever the merits of the arguments for and against pre-emptive rights,
all Commonwealth Caribbean Companies Acts, except the Belize and St,
Christopher/Nevis Companies Acts, contain provisions dealing with pre-
emptive rights issue.109 Except in the Trinidad and Tobago Act, the basic rule
laid down in these provisions is that, if the articles so provide, no shares of a
class of shares may be issued unless the shares have first been offered to the
shareholders of that company holding shares of that class.110 Under the
Trinidad and Tobago Act, the basic rule is that, unless the articles provide
otherwise, no shares of a class of shares may be issued unless the shares have
first been offered to the shareholders of that company holding shares of that
class.111
The important effect of these provisions is that, in territories with pre-
emptive rights provisions, other than Trinidad and Tobago, pre-emptive rights
vest only if the articles so provide. In Trinidad and Tobago, on the other hand,
pre-emptive rights vest unless the articles provide against such rights. It must
be stressed that the pre-emptive right which is conferred on shareholders
under all the Acts, including the Trinidad and Tobago Act, is the right to
acquire the offered shares in proportion to their holdings of the shares of the
class being issued, and at such price and on such terms as those shares are to
be offered to others holding shares of that class.112
It is to be noted that shareholders have no pre-emptive rights in respect of
certain shares to be issued by the company and this is so even though the
articles of a company provide for pre-emption.113 Under all the pre-emptive
rights Acts, except the Trinidad and Tobago Act, shareholders have no pre-
emptive rights where the shares to be issued by the company are for a
consideration other than money.114 Nor do they have any such rights under
these Acts where the shares are being issued by the company as a share
dividend.115 Finally, under all the Acts, including the Trinidad and Tobago Act,
they have no rights of pre-emption where the shares are being issued by the
company pursuant to the exercise of conversion privileges, options or rights
previously granted by the company.116
Conversion privileges, options and rights issue
Under the Acts in Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, a company has
statutory power to grant conversion privileges, options and rights to acquire
shares of that company.117 However, where it does so, it must set out the
conditions of such grant in any certificate or other instrument issued in respect
of the conversion privileges, options or rights to acquire shares.118
Conversion privileges, options and rights to acquire shares may be made
transferable or non-transferable.119 Additionally, options and rights to acquire
shares may be made separable from any debenture or shares to which they
are attached.120
A company which has granted conversion privileges or other rights to
acquire shares must reserve and continue to reserve a sufficient number of its
authorised shares so that holders of the rights can obtain the shares to which
they are entitled upon the exercise of their rights.121 The obligation to reserve
and continue to reserve a sufficient number of shares to satisfy exercise of
conversion privileges, options and rights only has application where the
articles limit the number of authorised shares.122
Payment for Shares
The basic rule
The basic rule governing the payment for shares in Commonwealth Caribbean
legislation on companies, except in Belize and St Christopher/Nevis, is laid
down in a provision which provides that a share of a company may not be
issued until it is fully paid.123 According to this provision, also, payment may
be in money124 or in property or past services.125
Payment in money
Meaning of money
Dr Francis Mann, in his monumental work The Legal Aspect of Money,

commented as follows on the legal meaning of ‘money’:126
It is suggested that, in law, the quality of money is to be attributed to all chattels which, issued by the
authority of the law and denominated with reference to a unit of account, are meant to serve as universal
means of exchange.
Money, in its technical legal sense, therefore, means physical money in the
form of notes and coins issued by the relevant regional Central Bank
distributed as currency, and not as a curio or other commodity.127 But, money
in economic theory is anything which is generally acceptable as a medium of
exchange or as payment of a debt.
In light of the foregoing, it is clear that the word ‘money’ takes its meaning
from the context in which it is used. This makes it necessary to explore what is
involved in the payment for shares in ‘money’ for purposes to the provisions
of Commonwealth Caribbean Companies Acts.128
Payment of cash
Except in the Jamaican Act, where there is a suggestion that the requirement
that shares be paid for in money is satisfied by the payment of cash,129 there is
no express statutory indication in Commonwealth Caribbean Companies Act
as to what is involved in payment ‘in money’. This notwithstanding, it is
submitted that the ordinary dictionary meaning of the word ‘money’
contemplates that the payment of cash will satisfy the requirement of
payment ‘in money’ under all the Acts.
Payment by cheque
What is not so obvious, though, is whether a cheque received in good faith and
which the directors have no reason to suspect will not be paid, also satisfies
the requirement for payment in money. In strict legal theory, a cheque is not
money; it is a bill of exchange drawn on a banker payable on demand.
However, regional commercial practice treats money as including cheques
received in good faith with no reason for suspecting it will not be paid. This
notwithstanding, it is submitted that the requirement for ‘money’ as a method
of payment for shares provided for in regional legislation on companies is
satisfied in the case of payment by cheque only when the cheque is honoured
by the banker on whom it is drawn.
Undertaking to pay cash in the future
In some jurisdictions, for example the UK,130 an undertaking to pay cash to the
company in the future is deemed to be cash. However, in most countries in the
Commonwealth Caribbean such an undertaking cannot, it appears, be treated
as money. This is not expressly stated in the Companies Acts. But all of these
Acts whilst expressly providing for payment not only to be in money but also
‘in property’, stipulate that “‘property” does not include a promissory note or a
promise to pay’.131 This stipulation would be otiose if promissory notes or
promises to pay in the future were comprehended in the statutory expression
‘money’ used in the Acts. Put another way, why stipulate that a promissory
note or a promise to pay does not constitute ‘property’ if they were included
the expression ‘money’?
Payment by release of a liability
A company indebted to a creditor may release its liability by issuing shares to

the creditor. Even though on its ordinary meaning ‘money’ would not include
such a release of a liability of a company, commercial practicality suggests that
it should be so treated in interpreting the requirement in Commonwealth
Caribbean companies legislation for payment for shares to be made in
money.132
Payment in property or past services
Commonwealth Caribbean Companies Acts, other than the Belize Act and the
St Christopher/Nevis Act, provide that payment for shares may be ‘in
property or past services that is the fair equivalent of the money that the
company would have received if the share had been issued for money.’133 This
provision appears to be a statutory expression of the principle stated by
Lindley LJ in the English Court of Appeal case of Re Wragg Ltd, that:134
Provided a limited company does so honestly and not colourably, and provided it has not been so imposed
upon as to be relieved from its bargain, it appears to be settled … that agreements by limited companies to
pay for property or services in paid-up shares are valid and binding on the companies and their creditors.
There is without doubt a potential peril in allowing this alternative method of

payment. The risk is the acceptance of property or past service which is
overvalued as consideration for the price of the shares and which consequently
results in the shares being ‘watered’, in the sense of being issued for less than
their true worth. If, for example, property with a market value of $10 is
credited as satisfying the issue of twenty $1 shares, the shares are effectively
issued at 50c per share. In other words, in an issue subscribed otherwise than
in money, there is a danger of something worth less than the market value of
the shares being received as consideration for the price of the shares issued.
Commonwealth Caribbean Companies Acts permitting property or past
services as payment for shares have utilised a number of statutory devices to
avoid the danger of share-watering. One such device found in these Acts is the
mandate that the property or past services must be ‘the fair equivalent of the
money that the company would have received if the share had been issued for
money’.135 This statutory stipulation is clearly intended to ensure that the value
of property or past services rendered as payment for shares is not colourable.
A second device in the Acts is the provision of a statutory method for
determining whether the property or past service is the fair equivalent of a
money consideration. In this regard, the Acts provide that in determining
whether property or past services is the fair equivalent of a money
consideration, only reasonable charges and expenses of organisation and
reorganisation, and payments for property and past services reasonably
expected to benefit the company may be taken into account.136
A third device utilised in the Acts is the restriction of the kinds of property
which may constitute non-money consideration. Here, all the Acts, except the
Jamaican Act, simply provide that property does not include a promissory
note or a promise to pay.137 The provisions in the Jamaican Act are more
elaborate. Section 38(3) of that Act provides that property does not include
any debt security other than (i) a debt security of a company as part of a
merger, acquisition, amalgamation or scheme of arrangement, reorganisation
or reconstruction, or (ii) promises to pay that are comprised of government
securities or debt instruments that are guaranteed by a financial institution as
defined by the Act.
The Jamaican Companies Act contains two additional devices, not found in
other Commonwealth Caribbean Companies Acts, aimed at dealing with the
problem of share-watering. The first consists of detailed provisions aimed at
regulating the payment for shares by non-cash consideration.138 The Act
forbids the allotment by a company of shares for non-cash consideration
unless the directors of the company have passed a resolution that the
allotment be made.139 Such a resolution must state the nature of the
consideration, its value and the extent to which the shares to be issued in
respect of it will be credited as paid up by virtue of it.140
Before passing such a resolution, the directors of the company must, where
the consideration consists of services, have a qualified accountant estimate the
value of the services to the company in money terms.141 In any other case, the
directors must have the consideration valued by a qualified accountant, valuer
or surveyor.142 In either case, no allotment should be made unless, not more
than 120 days before the allotment, the accountant, or as the case may be,
valuer or surveyor, reports that in his opinion the value of the services to the
company in money terms or the value of the other consideration in question is
worth at least as much as the amount which will be credited as paid-up on the
shares to be allocated in respect of those services or that consideration.143
The second is a set of special rules which are made applicable where non-
cash consideration is received for an allotment pursuant to a pre-incorporation
arrangement.144 In such a case, the nature and value of that consideration must
be stated in the company’s articles and the allotment must be approved by a
general meeting of the company.145
Stated Capital Account
Meaning of stated capital account
The Companies Acts in the Commonwealth Caribbean, except in the

Bahamas, Belize and St Christopher/Nevis, stipulate that a company must
maintain a separate stated capital account for each class and series of shares
that it issues.146 However, none of the Acts, except the Guyanese Act,147 define
what is meant by the ‘stated capital’ of a company. It appears from the
provisions on stated capital account in these Acts that the stated capital of a
company consists of the account of the subscribed share capital made up of the
total proceeds where the issue is for money and the value of the property or
past service where the payment is by way of property or past services. This is
the meaning of stated capital expressly legislated in the Companies Act of
Guyana.148
The provision requiring companies to maintain a separate stated capital
account for each class and series of shares that it issues is important for two
major reasons. First, it legislates what is generally considered to be good
accounting practice. And, second, it captures in statutory form the rule that the
total consideration received by the company upon issue of a share is capital.
Because of the stipulation that a company must maintain a separate stated
account for each class of share that it issues, all monies paid for shares must be
treated as capital.
Rules governing operation of stated capital account
The Acts contain a number of rules which govern the operation of the stated
capital account. The remainder of this section outlines these rules.
Rule 1
A company must add to the appropriate stated capital account the full
consideration that it receives for any shares that it issues.149
Rule 2
A company may not reduce its stated capital or any stated capital account
except in the manner provided in the relevant Act.150
Rule 3
A company must not, in respect of a share that it issues, add to a stated capital
account an amount greater than the amount of consideration that it receives
for the share.151
Rule 4
Except in Jamaica, when a company proposes to add an amount to a stated

capital account, such addition must be approved by special resolution if the
amount to be added was not received by the company as consideration for the
issue of shares, and the company has issued any outstanding shares of more
than one class or series of shares.152
In Jamaica, the circumstances in which the rule that a company which
proposes to add an amount to a stated capital account must obtain approval to
do so by special resolution applies are different. Under the Jamaican Act, that
rule applies if bonus shares are not being apportioned rateably among all
shareholders,153 and the effect of the bonus issue on voting rights is such that
the holders of one class of shares assume control of the company or are able to
pass a resolution which, prior to the bonus issue, they did not have sufficient
voting rights to carry if the other shareholders were against it.154
Rule 5
When, in exchange for property, a company issues shares either to a body

corporate that was an affiliate of the company immediately before the
exchange, or, to a person who controlled the company immediately before the
exchange, the company may add to the stated capital account the amount
agreed, by the company and the body corporate or person, to be the
consideration for the shares so exchanged.155 This rule applies notwithstanding
the statutory stipulation as to how the fair value of non-money consideration
is to be determined. This rule is, however, subject to Rule 3.156
Rule 6
When a company issues shares in exchange for shares of a body corporate that
was an affiliate of that company immediately before the exchange, the
company may add to the stated capital account an amount that is not less than
the amount set out, in respect of the acquired shares of the body corporate, in
the stated capital or equivalent accounts of the body corporate immediately
before exchange.157 This rule, like Rule 5, applies notwithstanding the statutory
stipulation as to how the fair value of non-money consideration is to be
determined and is also subject to Rule 3.158
Rule 7
When a company issues shares in exchange for shares in a body corporate that
becomes, because of the exchange, an affiliate of that company, the company
may add to the stated capital account an amount that is not less than the
amount set out, in respect of the acquired shares of the body corporate, in the
stated capital or equivalent accounts of the body corporate immediately
before the exchange.159 Like Rule 5 and Rule 6, this rule applies
notwithstanding the statutory stipulation as to how the fair value of non-
money consideration is to be determined and is also subject to Rule 3.160
Rule 8
When a former-Act company is continued under a present Act then,

notwithstanding Rule 2, it is not required to add to its stated capital account
any consideration received by it before it was continued.161 However, it must
add any consideration received by it in respect of shares issued after that
company is continued under the Act in question.162 It must also include any
amount unpaid in respect of a share issued by the former-Act company before
it was continued.163
Rule 9
The stated capital account of a former-Act company continued under the Acts,
for purposes of acquisition of own shares, stated capital reduction, illicit loans
by companies and amalgamations includes the amount that would have been
included if the company had been incorporated under the present Acts.164
Rule 10
The stated capital rules do not apply to open-ended mutual companies. Open-
ended mutual companies are public companies that carry on only the business
of investing the consideration they receive for the shares they issue, and that
all or substantially all of their issued shares are redeemable upon the demand
of shareholders.165
Conclusion
There is no doubt that the Acts in Anguilla, Antigua, the Bahamas, Barbados,
Trinidad recognise the perennial need to regulate carefully the share capital of
a limited liability company. Many of the traditional rules, such as, for instance,
the minimum paid up capital rule, the no par value shares rule and the
authorised capital rule, in regional company law had become antiquated and
even misleading in modern corporate theory and practice. Thus, these Acts
have sought to eliminate antiquated share capital rules and to introduce rules
and concepts which reflect modern corporate finance theory and practice in an
effort to achieve greater flexibility in share capital dealings.
There has been little or no change to the traditional rules in Belize and St
Christopher/Nevis. This state of affairs is understandable in the case of Belize
since the Companies Act in that territory is merely a revision of their
Companies Act 1914. The St Christopher/Nevis situation is less easy to
understand since the Companies Act 1996 in that territory was passed to
repeal and replace the Companies Act in existence at that time.
Notes
1 See, e.g., Re Exchange Banking Co, Flitcroft’s Case (1882) 21 Ch D 519, 533 Eng CA per Jessel MR.
2 See Ang ss 28–58; Ant ss 26–57; Bel ss 38–58; Bah ss 35–55 and 60–64; B’dos ss 26–57; Dom ss 26–57; Gren ss
26–57; Guy ss 25–58; J’ca ss 34–39 and 48–72; Mont ss 26–57; St C/N ss 34–40 and 55–66; St L ss 26–57; St V
ss 26–57; T’dad ss 30–59.
3 (1958) 15 DLR (2d) 609 Ont CA.
4 (1958) 15 DLR (2d) 609, 614–615 Ont CA.
5 (1943) 67 CLR 508, 515 HCA.
6 Ang Pt 2 Div 3; Ant Pt I Div C; B’dos Pt I Div C; Dom Pt I Div C; Gren Pt I Div C; Guy Pt II Div C; Mont
Pt I Div C; St L Pt I Div C; St V Pt I Div C; T’dad Pt III Div 3.
7 Bah Pt III; Bel Pt II; J’ca Pt II; St C/N Pt VII.
8 See generally, Ferran, Company Law and Corporate Finance (Oxford: 1999) Ch 2.
9 But note that in Kellar v Williams [2000] 2 BCLC 390 the Privy Council accepted that it was possible for an
investor to make a capital contribution to a company, other than in exchange for the purchase of shares.
10 Discussed below, text accompanying nn 147–166.
11 This is still a requirement in the Bahamas, Belize and St Christopher/Nevis. As to this see Bah s 5(d); Bel s
4(a); St C/N s 5(2)(c).
12 This is still the law in the Bahamas, Belize and St Christopher/Nevis. As to this see Bah s 49(1)(a); Bel s
42(1)(a); St C/N s 38(1)(a).
13 See Bah s 5(d); Bel s 4(a); St C/N s 5(2)(c).
14 See Ang s 7(1)(e); Ant s 5(1)(b); B’dos s 5(1)(b); Dom s 5(1)(b); Gren s 5(1)(b); Guy s 5(1)(c); J’ca s 8(1)(c);
Mont s 5(1)(b); St L s 5(1)(b); St V s 5(1)(b); T’dad s 9(2).
15 Ang s 7(1)(e); Ant s 5(1)(b); B’dos s 5(1)(b); Dom s 5(1)(b); Gren s 5(1)(b); Guy s 5(1)(c); J’ca s 8(1)(c); Mont s
5(1)(b); St L s 5(1)(b); St V s 5(1)(b); T’dad s 9(2).
16 See Bah s 42; J’ca s 34.

17 Bah s 42(1).
18 Bah s 42(1)(a).
19 Bah s 40(2).
20 Bah s 42(1)(b).
21 Bah s 42(1)(b).
22 Bah s 42(1)(c).
23 Bah s 42(1)(c).
24 Bah s 42(1)(d).
25 Bah s 42(2).
26 J’ca s 34(2).
27 J’ca s 35(1).
28 J’ca s 35(2)(a).
29 J’ca s 35(2)(b)(i).
30 J’ca s 35(2)(b)(ii).
31 J’ca s 35(2)(c).
32 J’ca s 34(3).
33 J’ca s 34(3)(a).
34 J’ca s 34(3)(b).
35 J’ca s 34(3)(c).
36 J’ca s 34(3)(d).
37 See Ang s 31(1); Ant s 29(1); B’dos s 29(1); Dom s 29(1); Gren s 29(1); Guy s 28(1); Mont s 29(1); St L s 29(1);
St V s 29(1).
38 (1887) 37 Ch D 260.
39 (1887) 37 Ch D 260, 264 per Chitty J.
40 Tillotson Ltd v IRC [1933] 1 KB 134 Eng CA; Agricultural Mortgage Corpn v IRC [1978] Ch 72 Eng CA.
41 National Westminster Bank plc v IRC [1995] 1 AC 119 Eng HL; Clarke’s Case (1878) 8 Ch D 635, 638 Eng
CA. See also, Ambrose Lake Tin and Copper Co (Clarke’s Case) (1878) 8 Ch D 635; Mosely v Koffyfontein
Mines Ltd [1911] 1 Ch 73 Eng CA.
42 National Westminister Bank plc v IRC [1995] 1 AC 119 Eng HL.
45 Ooregum Gold Mining Co of India v Roper [1892] AC 125 Eng HL.
46 Iacobucci, Pilkington & Prichard, Canadian Business Corporations (Toronto: 1977) 109.
47 See Sealy, Cases and Materials in Company Law (6th edn 1996) 383.
48 Federal Proposals para 98.
49 See Ang s 28(2); Ant s 26(2); B’dos s 26(2); Dom s 26(2); Gren s 26(2); Guy s 25(2); J’ca ss 36–37; Mont s 26(2);
St L s 26(2); St V s 26(2); T’dad s 30(2).
St V s 26(2); T’dad s 30(2).
St V s 26(2); T’dad s 30(2).
52 J’ca s 36(a).
53 J’ca s 36(b).
54 J’ca s 37(1).
55 J’ca s 37(2).
56 J’ca s 37(6).
57 Bah s 35(3).
58 Bel s 4(a).
59 St C/N s 5(2)(c).
60 St C/N s 2.
61 See Ang s 28(2); Ant s 26(2); B’dos s 26(2); Dom s 26(2); Gren s 26(2); Guy s 25(2); J’ca ss 36–37; Mont s 26(2);
St L s 26(2); St V s 26(2); T’dad s 30(2).
62 Bah s 35(3).
63 Bel s 4(a).
64 St C/N s 5(2)(c).
65 [1892] AC 125 Eng HL.
66 (1875) LR 7 HL 653 Eng HL.
67 [1892] AC 125, 145 Eng HL.
68 [1892] AC 125 Eng HL.
69 Ibid.
70 See St C/N s 35(1).
71 St C/N s 35(3).
72 St C/N s 36.
73 St C/N s 36(1).
74 St C/N s 36(1).
75 St C/N s 36(1)(a).
76 St C/N s 36(1)(b).
77 St C/N s 36(1)(c).
78 Bah s 47(1).
79 Bah s 47(2).
80 See St C/N s 39.
St V s 29(2); T’dad s 33(2).
83 Ibid.
84 Bah s 48(1).
85 Bah s 48(1).
86 Bah s 48(2).
87 Bah s 48(2).
88 Bah s 48(3).
89 Bah s 48(3).
90 Bah s 48(4).
91 Bah s 48(5).
92 Bah s 48(5)(a).
93 Bah s 48(2)(b).
94 Bah s 48(2)(c).
95 J’ca s 82.
96 J’ca s 82(1).
97 J’ca s 82(1).
98 J’ca s 82(1).
99 St C/N s 51(1).
100 St C/N s 51(1).
101 St C/N s 51(1).
102 St C/N s 51(2).
103 As to the meaning of this, see above, text accompanying nn 59–60.
104 St C/N s 51(3).
105 St C/N s 51(4).
106 St C/N s 51(5).
107 Drinker, ‘The Pre-emptive Rights to Subscribe to New Shares’ (1930) 43 Harv LR 586, 586.
108 See, e.g., Iacobucci, ‘Shareholders Under the Draft Canada Business Corporations Act’ (1973) 19 McGill LJ
246, 256. See also Caricom Report para 5.59.
109 See Ang s 36; Ant s 34; Bah s 36(3); B’dos s 34; Dom s 34; Gren s 34; Guy s 33; J’ca s 61; Mont s 34; St L s 34;
St V s 34; T’dad s 38.
Mont s 34(1); St L s 34(1); St V s 34(1); T’dad s 38(1).
111 T’dad s 38(1).
(a); J’ca s 61(3)(a); Mont s 34(2)(a); St L s 34(2)(a); St V s 34(2)(a).
(b); J’ca s 61(3)(b); Mont s 34(2)(b); St L s 34(2)(b); St V s 34(2)(b).
116 See Ang s 36(3)(c); Ant s 34(2)(c); Bah s 36(4)(c); B’dos s 34(2)(c); Dom s 34(2)(c); Gren s 34(2)(c); Guy s 33(2)
(c); J’ca s 61(3)(c); Mont s 34(2)(c); St L s 34(2)(c); St V s 34(2)(c); T’dad s 38(2).
St V s 35(1); T’dad s 39(1).
St V s 35(1); T’dad s 39(1).
St V s 35(1); T’dad s 39(2).
St V s 35(1); T’dad s 39(2).
121 See Ang s 38; Ant s 36; B’dos s 36; Dom s 36; Gren s 36; Guy s 35; Mont s 36; St L s 36; St V s 36; T’dad s 40.
123 See Ang s 32(1); Ant s 30(1); Bah s 39(1): section reads ‘fully or partly’; B’dos s 30(1); Dom s 30(1); Gren s
30(1); Guy s 29(1); J’ca s 38(1); Mont s 30(1); St L s 30(1); St V s 30(1); T’dad s 34(1).
124 See Ang s 32(1)(a); Ant s 30(1)(a); Bah s 39(1)(a); Dom s 30(1)(a); Gren s 30(1)(a); Guy s 29(1)(a); J’ca s 38(1)(a);
Mont s 30(1); St L s 30(1)(a); St V s 30(1)(a); T’dad s 34(1)(a).
(b); J’ca s 38(1)(b); Mont s 39(1); St L s 30(1)(b); St V s 30(1)(b); T’dad s 34(1)(b).
126 Mann, The Legal Aspects of Money (5th edn) 8.

127 Moss v Hancock [1899] 2 QB 111.
128 Ang s 32(1)(a); Ant s 30(1)(a); Bah s 39(1)(a); B’dos s 30(1)(a); Dom s 30(1)(a); Gren s 30(1)(a); Guy s 29(1)(a);
J’ca s 38(1)(a); Mont s 30(1)(a); St L s 30(1)(a); St V s 30(1)(a); T’dad s 34(1)(a).
129 See J’ca s 38(4) and (7).
130 See e.g., Companies Act 2006 s 583(3) (UK).
131 Ang s 32(3); Ant s 30(3); Bah s 39(3); B’dos s 30(3); Dom s 30(3); Gren s 30(3); Guy s 29(3); J’ca s 38(3); Mont s
30(3); St L s 30(3); St V s 30(3); T’dad s 34(3).
132 See Re Harmony and Montague Tin and Copper Co, Spargo’s Case (1873) 8 Ch App 404.
133 Ang s 32(1)(b); Ant s 30(1)(b); Bah s 39(1)(b); Dom s 30(1)(b); Gren s 30(1)(b); Guy s 29(1)(b); J’ca s 38(1) (b);
Mont s 30(1)(b); St L s 30(1)(b); St V s 30(1)(b); T’dad s 34(1)(b).
134 [1897] 1 Ch 796, 830 Eng CA.
135 Ang s 32(1)(b); Ant s 30(1)(b); Bah s 39(1)(b); Dom s 30(1)(b); Gren s 30(1)(b); Guy s 29(1)(b); J’ca s 38(1) (b);
136 Ang s 32(2); Ant s 30(2); Bah s 39(2); B’dos s 30(2); Dom s 30(2); Gren s 30(2); Guy s 29(2); J’ca s 38(2); Mont s
30(2); St L s 30(2); St V s 30(2); T’dad s 34(2).
30(3); St V s 30(3); T’dad s 34(3).
138 J’ca s 38(4), (5), (6) and (7).
139 J’ca s 38(4)(a).
140 J’ca s 38(4)(b).
141 J’ca s 38(5)(a).
142 J’ca s 38(5)(b).
143 J’ca s 38(6).
144 J’ca s 38(7).
145 J’ca s 38(7).
146 See Ang s 33(1); Ant s 31(1); B’dos s 31(1); Dom s 31(1); Gren s 31(1); Guy s 31(1); J’ca s 39(1); Mont s 31(1);
St L s 31(1); St V s 31(1); T’dad s 35(1).
147 Guy s 30(1).
148 Guy s 30(1).
St L s 31(2); St V s 31(2); T’dad s 35(2).
St L s 31(3); St V s 31(3); T’dad s 35(3).
St L s 31(4); St V s 31(4); T’dad s 35(4).
St V s 31(5); T’dad s 35(5).
153 J’ca s 39(5)(a).
154 J’ca s 39(5)(b).
155 See Ang s 33(6)(a); Ant s 31(6)(a); B’dos s 31(6)(a); Dom s 31(6)(a); Gren s 31(6)(a); Guy s 31(6)(a); J’ca s 39(6)
(a); Mont s 31(6)(a); St L s 31(6)(a); St V s 31(6)(a); T’dad s 35(6)(a).
157 See Ang s 33(6)(b); Ant s 31(6)(b); B’dos s 31(6)(b); Dom s 31(6)(b); Gren s 31(6)(b); Guy s 31(6)(b); J’ca s 39(6)
(b); Mont s 31(6)(b); St L s 31(6)(b); St V s 31(6)(b); T’dad s 35(6)(b).
159 See Ang s 33(6)(c); Ant s 31(6)(c); B’dos s 31(6)(c); Dom s 31(6)(c); Gren s 31(6)(c); Guy s 31(6)(c); J’ca s 39(6)
(c); Mont s 31(6)(c); St L s 31(6)(c); St V s 31(6)(c); T’dad s 35(6)(c).
161 See Ang s 33(7)(a); Ant s 31(7)(a); B’dos s 31(7)(a); Dom s 31(7)(a); Gren s 31(7)(a); Guy s 31(7)(a); J’ca s 39(7);
Mont 31(7)(a); St L s 31(7)(a); St V s 31(7)(a); T’dad s 35(7)(a).
162 See Ang s 33(7)(a); Ant s 31(7)(a); B’dos s 31(7)(a); Dom s 31(7)(a); Gren s 31(7)(a); Guy s 31(7)(a); J’ca s 39(7);
Mont 31(7)(a); St L s 31(7)(a); St V s 31(7)(a); T’dad s 35(7)(a).
163 See Ang s 33(7)(b); Ant s 31(7)(b); B’dos s 31(7)(b); Dom s 31(7)(b); Gren s 31(7)(b); Guy s 31(7)(b); J’ca: no
provision; Mont s 31(7)(b); St L s 31(7)(b); St V s 31(7)(b); T’dad s 35(7)(b).
164 See Ang s 33(7)(c); Ant s 31(7)(c); B’dos s 31(7)(c); Dom s 31(7)(c); Gren s 31(7)(c); Guy s 31(7)(c); J’ca: no
provision; Mont s 31(7)(c); St L s 31(7)(c); St V s 31(7)(c); T’dad s 35(7)(c).
165 See Ang s 34; Ant s 32; B’dos s 32; Dom s 32; Gren s 32; Guy s 32; J’ca: no provision; Mont s 32; St L s 32; St
V s 32; T’dad s 36.
Chapter 8
Capital Maintenance
Introduction
In the previous chapter, the rules governing the raising of share capital were
examined. The current chapter explores the rules relating to the maintenance
of the share capital so raised. Traditionally, these rules derived from a core
doctrine in Commonwealth Caribbean company law developed by the courts
that a limited liability company was required to maintain its subscribed capital
by not returning it to shareholders of that company. This doctrine is often
referred to as the capital maintenance doctrine and has supplied rules
governing such areas as the purchase and redemption by companies of their
own shares, the giving of financial assistance by companies to purchase their
own shares, the payment of dividends and the reduction of capital. This
doctrine has been significantly modified by regional companies Acts which
contain extensive provisions that now regulate these areas. It is the effect of
these provisions on the capital maintenance doctrine that is the main focus of
this chapter.
The Capital Maintenance Doctrine
Common law doctrine
In traditional company law theory, the capital maintenance doctrine is closely

tied to the idea that the privilege of limited liability requires restrictions on the
use of a company’s capital. In essence, the theory is that a creditor who deals
with a limited liability company takes the risk of the company becoming
unable to pay its debts as a result of the company losing its capital in trading,
but as a matter of public policy, a creditor should be protected from capital
being returned to shareholders in various ways prior to winding up of the
company. Lord McNaughten drew the link between the privilege of limited
liability and the capital maintenance doctrine in the landmark English House
of Lords’ case of Trevor v Whitworth as follows:1
It appears to me that the notion of a limited company taking power to buy its own shares is contrary to the
plain intention of the [Companies] Act of 1862, and inconsistent with the conditions upon which, and upon
which alone, Parliament has granted to individuals who are desirous of trading in partnership the privilege
of limiting their liability.
In Re Exchange Banking Co, Flitcroft’s Case,2 Jessel MR in the English Court

of Appeal explained the basic logic of the capital maintenance doctrine in the
following statement:
The creditor has no debtor but the impalpable thing the corporation, which has no property except the
assets of the business. The creditor, therefore, I may say, gives credit to that capital, gives credit to the
company on the faith of the representation that the capital shall be applied for the purposes of the business,
and he has therefore a right to say that the corporation shall keep its capital and not return it to the
shareholders, though it may be a right which he cannot enforce otherwise than on a winding up.
In the case of Trevor v Whitworth,3 Lord Watson explained that the doctrine
itself does not seek to guarantee that capital will remain intact until whenever
the creditors wish to have recourse to it. Instead, he said that, in pursuance of
this doctrine, the law prohibits:4
every transaction between a company and a shareholder, by means of which the money already paid to the
company in respect of his shares is returned to him, unless the court has authorised the transaction. Paid-
up capital may be diminished or lost in the course of the company’s trading; that is a result which no
legislation can prevent; but persons who deal with, and give credit to a limited company, naturally rely
upon the fact that the company is trading with a certain amount of capital already paid, as well as upon the
responsibility of its members for the remainder of the capital at call; and they are entitled to assume that
no part of the capital which has been paid into the coffers of the company has been subsequently paid out,
except in the legitimate course of its business.
It is apparent, therefore, that the major concern of the capital maintenance

doctrine is to provide a safeguard for creditors by establishing ‘a yardstick
fixing the minimum value of the net assets which must be raised initially and
then, so far as possible, retained in the business’5 and not returned to
shareholders.
The rule in Trevor v Whitworth
The rule in Trevor v Whitworth is a particular expression of the capital

maintenance doctrine. The fundamental premise of this rule is that allowing a
company to own its own shares is tantamount to allowing a return of capital
to shareholders. The rule embodies two major limbs to prevent this. The first
is the principle that a company cannot purchase its own shares even where
there is an express power to do so in its articles of association. The second is
an addendum to the first, and operates to prevent a company from issuing
redeemable shares, since future redemption would be synonymous with a
purchase by the company of its own shares.
The Companies Acts and the doctrine
The rule in Trevor v Whitworth is now subject to statutory regulation in

Commonwealth Caribbean company law. The Acts in Anguilla, Antigua,
Barbados, Dominica, Grenada, Montserrat, St Lucia, St Vincent and Trinidad
and Tobago have codified that rule in a general provision prohibiting a
company holding its own shares.6 It is to be noted that in the Bahamas, Belize,
Guyana, Jamaica and St Christopher/Nevis the common law version of the
first limb of the rule still applies unaffected by any statutory intervention. On
the other hand, all Commonwealth Caribbean Acts,7 except the Belize Act,
have enacted exceptions to both the statutory and common law version of the
Trevor v Whitworth rule in provisions dealing with own-shares acquisition and
own-share redemption.
Statutory Rules On Own-Share Ownership
The general statutory prohibition
As was just noted, the Acts in Anguilla, Antigua, Barbados, Dominica,

Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago contain a
general provision prohibiting, subject to certain statutory exceptions, a
company from holding shares in itself or in its holding company.8 If a
subsidiary company of a company holds shares in its holding company, the
holding company must cause the subsidiary to sell or otherwise dispose of
those shares.9 This must be done within five years from the date the company
became a subsidiary of the company10 or that the company was continued
under the Act in question.11
A company that holds shares in itself or in its holding company in the
capacity of a legal representative is exempted from the general prohibition
against own-share holding.12 This exemption does not apply, however, if the
company, the holding company or a subsidiary of either the company or the
holding company has a beneficial interest in the shares.13 A company that
holds shares in itself or in its holding company by way of security for the
purposes of a transaction entered into by it in the ordinary course of business
that includes the lending of money is also exempted.14
The prohibition against own-share holding in these Acts appears to be a
statutory embrace of the central assumption of the rule in Trevor v
Whitworth,15 that a company should not be allowed to acquire its own shares.
It is for this reason that in the Ontario case of Olympia & York Enterprise Ltd v
Hiram Walker Resources Ltd16 it was held that the provisions prohibiting own-
share holding reflect a fundamental principle of corporate law, a breach of
which cannot properly be described as technical or slight.
The statutory exceptions to the general prohibition
Overview of exceptions
The prohibition in Commonwealth Caribbean Companies Acts against a

company holding its own shares is subject to two important statutory
exceptions, namely, exceptions permitting corporate own-share purchases and
corporate share redemption in certain circumstances. The effect of these
exceptions is the modification of both the own-share purchase limb and the
share redemption limb of the rule in Trevor v Whitworth. Put another way, if
the general prohibition in regional Acts against a company holding its own
shares embraces the basic assumption of the capital maintenance doctrine and
the rule in Trevor v Whitworth, the exceptions to this prohibition permitting
corporate own-share purchases and corporate share redemption represent a
significant statutory incursion into that rule.
Rationale of the exceptions
The reason for the statutory incursion into the Trevor v Whitworth rule is
intimately linked to certain developments in modern corporate financing
theory and practice.17 In particular, own-share purchase and share redemption,
sometimes called share buy-back, has become a common feature of modern
corporate financing especially in small companies where there is no active
market in the company’s shares. In such a case, own-share purchase and share
redemption have been employed to encourage equity investment in these
companies. For instance, the issue of redeemable shares allows for shares to be
invested with economic attributes which make them similar to debt
obligations without being debt obligations in the legal sense. This allows
outsiders to advance their capital to a company whose shares are not easily
marketable without fear of being locked into the company since the company
itself will at some point in the future redeem the shares. At the same time,
because of these characteristics, small companies can raise capital through an
issue of shares without the fear of losing control to outsiders. In this way, the
issue of redeemable shares has resulted in added flexibility in corporate
financing techniques relating to share capital in small companies.
Large public companies have also in recent years been employing the
issuing of redeemable shares as an aspect of their financing strategy even
where there is an active market in the company’s shares. A number of reasons
have been advanced to explain this, but two may be cited here. The first is that
buy-backs may be used as a means of enhancing earnings per share when
market conditions make this difficult otherwise. A second reason for the use of
buy-backs is that buy-backs can be attractive to institutional investors who,
because of the size of their holdings, find it difficult to sell their holdings in the
market in the normal way.
Quite apart from share redemption, there are a number of useful purposes
which own-share purchases may serve. A company may utilise the power to
purchase its own shares to provide incentive plans, stock option plans or
similar plans without being required to extend its equity base; to contract its
equity base; to facilitate business combinations; or, in small companies, to
provide flexibility by having a purchaser available in the event of the death or
retirement from the company’s business of one of the principal shareholders.18
Own-share purchase and share redemption, however, have the undeniable
potential of resulting in prejudice to creditors, in that capital could be returned
to shareholders leaving a shell with inadequate assets to pay off the company’s
creditors. In other words, the concerns which prompted the formulation of the
Trevor v Whitworth rule are inherent dangers in own-share purchase and share
redemption. Consequently, as will be seen, the statutory regime in regional
legislation governing own-share purchase and share redemption imposes
conditions on own-share purchase and the redemption of shares aimed at
protecting creditors from the eventuality of such prejudice.
Statutory rules on own-share purchase

Overview
Except in the Belize Act, Commonwealth Caribbean Companies Acts typically

contain provisions conferring on companies a general power to purchase
shares issued by them19 and a special power to acquire shares issued by them
for statutorily specified purposes.20 It is worth noting here that, on the clear
wording of these Acts, there is no limitation on the type of share that can be
purchased under either the general power or the special power. It is worth
noting further that the power of companies to purchase or otherwise acquire
their own shares is a broad exception to the general statutory21 and common
law22 rule to the effect that a company cannot hold its own shares.
General power to acquire own shares
Commonwealth Caribbean Companies Acts, except in Belize, confer on a

company a general power to purchase or otherwise acquire shares issued by
it.23 There is therefore no need for the articles to contain an express power to
purchase or acquire the company’s own shares. However, except in St
Christopher/Nevis,24 the power conferred by these statutes is exercisable
subject to the company’s articles.25
The exercise of a company’s general power to purchase its own shares is
also subject to a solvency requirement.26 Thus, under the Acts in Anguilla,
Antigua, the Bahamas, Barbados, Dominica, Grenada, Guyana, Montserrat, St
Christopher/Nevis, St Lucia, St Vincent and Trinidad and Tobago, a company is
forbidden from making any payment to purchase or otherwise acquire shares
issued by it if there are reasonable grounds for believing that either of two
situations relating to the solvency of the company exists, or, would exist if the
payment were made.27 The first is that the company is unable, or would after
the payment be unable, to pay its liabilities as they become due.28 The second
is that the realisable value of the company’s assets would, after the payment,
be less than the aggregate of its liabilities and the amount required for
payment on a redemption or in liquidation of all the shares the holders of
which have the right to be paid before the holders of the shares to be
purchased or acquired.29
The solvency requirements under the Jamaican Act are more detailed.
Under that Act, a company may not make any payment to purchase or
otherwise acquire shares issued by it unless a statutory declaration as to the
solvency of the company is made by the company’s directors and lodged with
the Registrar.30 The statutory declaration must be to the effect that there are
no reasonable grounds for believing that the company is, or would after the
payment be, unable to pay its liabilities as they fall due,31 or that the realisable
value of the company’s assets would, after the payment, be less than the
aggregate of its liabilities and stated capital.32
The statutory declaration must be based on three things. First, it must be
based on the company’s audited accounts made up no more than twelve
months before the date of the statutory declaration.33 Second, it must be based
on the company’s unaudited accounts made up no more than forty-five days
before the date of the statutory declaration.34 Finally, it must be based on any
other relevant facts of which the directors are aware.35
The Jamaican Act creates an offence for the making of a false statutory
declaration. In this regard, the Act provides that the directors of a company
who willfully or recklessly make a statutory declaration that is false in any
material particular, shall be liable on summary conviction before a Resident
Magistrate, to a fine not exceeding 1m dollars or to imprisonment for a term
not exceeding two years or to both such fine and imprisonment.
A major difficulty that arises in determining solvency in corporate own
share acquisition under the provisions of all Commonwealth Caribbean
Companies Acts is the question of what is properly to be considered a liability
and what is properly to be considered an asset. This difficulty arose in the
Canadian case of Gestion Michel Noel ltee c. 2323–0220 Que inc.36 where the
question was whether the unexpired term of a lease was properly to be
considered a liability to be charged against assets in determining the solvency
of a corporation on the buy-back of its shares. It was held that it was not; it
was only a contingent liability. The directors were entitled to consider the
likelihood of the subtenants meeting the payment obligations in determining
whether to include these as liabilities in the financial statements and the
subtenant’s payment history raised no concern that the subtenant would
continue to pay rent as they came due. It is not clear, whether, or the extent to
which, the details in the Jamaican Act attenuate this difficulty.
Special power to acquire own shares
Under the Acts in Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana,

Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, a company
has power to acquire shares issued by it for certain statutorily specified
purposes.37 These purposes include a purchase to settle or compromise a debt
or claim asserted by or against the company;38 to eliminate fractional shares;39
or to fulfil the terms of a non-assignable agreement under which the company
has an option or is obliged to purchase shares owned by an officer or
employee of the company.40 The statutorily specified purposes also include a
purchase to satisfy the claim of a dissenting shareholder.41 Finally, included in
the specified purposes is a purchase to comply with an order of the court
under the Acts to restrain oppression.42
Enforcement of own-share purchase contracts
The Companies Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica,

Grenada, Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago
contain provision on the enforcement of contracts made by a company to
purchase that company’s own shares.43 Under these Acts, a contract with a
company providing for the purchase of shares of that company is specifically
enforceable against that company except to the extent that the company
cannot perform the contract without being in breach of the prohibition in the
Acts against own-share purchase.44 The burden is on the company to prove
that performance of the contract would result in such a breach.45 In any event,
until the company has fully performed the contract, the other party retains the
status of a claimant entitled to be paid as soon as the company is lawfully able
to do so,46 or, on a liquidation, to be ranked subordinate to the rights of
creditors but in priority to the shareholders.47
In the Canadian case of Nelson v Rentown Enterprises Inc,48 Hunt J in the
Alberta Court of Queen’s Bench pointed out that the policy behind the
statutory limitation on the enforcement of own-share purchase contracts is to
permit own-share purchases provided the position of creditors and other
shareholders is protected. He further noted that the legislative language used
in the limitation on the enforcement of own-share purchase contracts is broad.
Accordingly, this language should be interpreted liberally to give effect to the
legislative policy behind the statutory limitation.
Statutory rules on share redemption
Overview
Under Commonwealth Caribbean companies’ statutes, except those in the

Bahamas and Belize, a company has the power to purchase or redeem shares
issued by it on the footing that they are redeemable.49 This power, it must be
emphasised, is only exercisable where the statutorily specified stipulations are
satisfied.50 The stipulations in the Jamaican Act are significantly different from
those in the other regional Acts. Consequently, the statutory scheme
established under the other regional Acts will be dealt with separately from
that under the Jamaican Act. The provisions in the St Christopher/Nevis Act
are also different from other regional Acts. However, these differences are
sufficiently captured in the exploration of the Jamaican Act as to justify
dispensing with a separate detailed treatment of the St Christopher/Nevis Act.
Acts other than the Jamaican Act

The first stipulation on share redemption under these Acts relates to the
circumstances in which a company has power to redeem shares. In this regard,
the Acts provide as follows:51
a company, may, at prices not exceeding the redemption price thereof stated in the articles or calculated
according to a formula stated in the articles, purchase or redeem any redeemable shares issued by it.
Even though the Acts do not expressly empower companies to issue

redeemable shares, a necessary implication of this provision is that, not only
does a company have power to issue redeemable shares, but also that
redemption must be authorised by the articles of incorporation and must be
carried out in accordance with the Acts and the provisions in the articles of
incorporation.
It is worth noting here that these requirements establish an essential
difference between share redemption and own-share purchase. In the case of
share redemption, only shares issued on the footing that they are redeemable
may be redeemed. Own-share purchase does not have to be authorised in the
company’s articles and any shares issued by the company may be purchased
or otherwise acquired by the company.
The second stipulation found in the Acts is contained in the provisions
governing the redemption price of redeemable shares. The Acts expressly
provide that the price at which shares may be redeemed must not exceed the
redemption price of the shares stated in the articles of incorporation or
calculated in accordance with a formula stated in the articles.52
This provision is necessary since shares in a company can only be issued
without nominal or par value,53 and consequently there is a need to provide
some means of determining the redemption price of shares.
The third stipulation in the Acts relates to the solvency status of the
company making a payment to purchase or redeem redeemable shares. In
relation to this, the Acts stipulate that the redemption cannot be made if there
are reasonable grounds for believing that the company is insolvent or would
be rendered insolvent thereby.54 The purpose of this stipulation is to prevent
redemptions where this would allow a company to prejudice the claims of
creditors.55
Section 41 (2) of the Barbados Act is typical of the solvency status provision
in regional Acts.56 It reads:
(2) A company shall not make any payment to purchase or redeem any redeemable shares issued by it if
there are reasonable grounds for believing that
(a) the company is unable or would, after that payment, be unable to pay its liabilities as they become
due, or
(b) the realisable value of the company’s assets would, after that payment, be less than the aggregate of
(i) its liabilities, and

(ii) the amount that would be required to pay the holders of shares that have a right to be paid, on a
redemption or in a liquidation, rateably with or before the holders of the shares to purchased or
redeemed.
The operation of a solvency test provision similar to that in section 41(2)57 was
considered in the Canadian case of R v Sands Motor Hotel Ltd.58 Here it was
held that the payment of proceeds on the redemption of shares is unlawful
where there are reasonable grounds to believe that the company would be
unable to pay its liabilities. A payment in such circumstances may effect a
result that is unfairly prejudicial to and unfairly disregards the interest of a
creditor. This may entitle such creditor to an order setting aside the
redemption payments and requiring the recipient shareholders to disgorge the
payments received. On the other hand, it has been held in another Canadian
case that a company has a lawful excuse for failure to redeem shares where
redemption payment, if made, would render the company unable to pay its
liabilities as they become due.59
Under the Jamaican Companies Act
As has been noted above, the regime on share redemption in the Jamaican Act
is different from that in other regional Acts. This Act makes provision for
redemption of shares issued as redeemable shares as well as shares issued as
redeemable preference shares. It is to be noted also that the analysis of the
Jamaican provisions will cover the provisions of the St Christopher/Nevis Act
because of their similarity to the provisions in Jamaican Act.
Redeemable shares
Under the Jamaican Act, a company is expressly empowered to issue

redeemable shares and to redeem such shares if authorised to do so by its
articles.60 Redeemable shares cannot be issued at a time when the company
does not have other shares in issue which are not redeemable.61 Shares to be
redeemed must be fully paid up and the terms of redemption must provide for
payment when the shares are redeemed.62 Subject to the provisions in the Act,
redemption of shares may be effected on such terms and in such manner as
may be provided by the company’s articles.63
To guard against the danger of a redemption resulting in a return of capital
to the shareholders to the prejudice of creditors, the Jamaican scheme requires
the company to fund redemption either by the use of distributable profits
which could have gone to shareholders in the form of dividends or by new
capital brought in by a fresh issue of shares.64 It is to be noted that since the
redemption price is usually at a premium to the price for which the share is
issued, the scheme in Jamaica attempts to ensure the minimum premium
payable on redemption is also paid out of distributable profits or out of a fresh
issue of shares before the shares are redeemed. Thus, section 56(4) provides as
follows:65
Notwithstanding anything in the company’s articles—
(a) no shares … shall be redeemed except out of the company’s profits or revenue reserves which
would otherwise be available for the payment of dividends, or out of the proceeds of a fresh
issue of shares made for the purpose of the redemption; and
(b) the minimum premium (if any) payable on redemption shall be provided out of the company’s
profits or revenue reserves which would otherwise be available for payment of dividends or out
of a fresh issue of shares before the shares are redeemed.
A matter relating to the redemption of shares worth noting is that in no Act in

the Commonwealth Caribbean, other than the Jamaican Act and St
Christopher/Nevis Act, is there any detailed provision on what is the legal
effect of the redemption of shares. As to this, the Jamaican Act provides that,
where shares are redeemed, the voting rights attaching to those shares are
suspended and the amount of the company’s issued share capital diminished
by the value attributed to those shares in the stated capital account
accordingly.66 However, the redemption of shares by a company is not to be
taken as reducing the amount of the company’s authorised number of shares.67
Furthermore, where a company is about to redeem shares, it may issue shares
to the value of the shares to be redeemed as if those shares had never been
issued.68
Redeemable preference shares
No Commonwealth Caribbean Companies Act, other than the Jamaican Act,

differentiates between the redemption of shares generally and the redemption
of redeemable preference shares. In relation to this, the Jamaican Act contains
specific provisions dealing with the redemption of redeemable preference
shares.69 According to these provisions, a company may, if so authorised by its
articles, issue preference shares which are, or at the option of the company, are
liable to be redeemed.70
Redeemable preference shares may only be redeemed when fully paid.71
They may be redeemed out of the proceeds of a fresh issue.72 This is to ensure
that the capital of the new shares replaces the capital of the shares redeemed.
Alternatively, redeemable preference shares may be redeemed out of profits
that would otherwise be available for distribution as dividends.73 In such a
case, a sum equal to the amount of the shares to be redeemed must be
transferred out of profits that would otherwise have been available for
dividends to what is called ‘the capital redemption reserve fund’.74 ‘The capital
redemption reserve fund’ is to be treated as if it was the company’s paid-up
share capital and the provisions of the Act relating to the reduction of share
capital apply.75
Subject to the foregoing restrictions, the redemption of preference shares
may be effected on such terms and in such manner as may be provided in the
company’s articles.76 A caveat to this rule is that any premium which is
payable on redemption must have been provided for out of the company’s
profits before the shares are redeemed.77
Although the shares redeemed disappear upon redemption, the Act
expressly stipulates that the capital which they represent is not to be taken as
a reduction of the company’s stated capital.78 Where, also, preference shares
are redeemed or are about to be redeemed under the Act, a company is
empowered to issue shares up to the amount of the shares redeemed or about
to be redeemed as if those shares had never been issued.79 In the case of such
an issue and where the old shares are redeemed within a month after the issue
of the new shares, the company’s share capital is not, for the purposes of the
Stamp Duty Act, to be deemed to be increased by the issue of the shares.80
Finally, it is to be noted that the capital redemption reserve fund may be
applied by the company in paying up the company’s unissued shares to be
issued to the company’s members as fully paid bonus shares.81
Many of the rules in the Jamaican Act applicable to redeemable preference
shares are applicable to any share redemption under the St Christopher/Nevis
Act.82
Donated shares
A company in Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago may accept from
any shareholder a share of that company surrendered to it as a gift.83 This is an
exception to the general prohibition against a company holding its own shares.
However, a company may not extinguish or reduce a liability in respect of an
amount unpaid on a donated share except in accordance with the statutory
rules governing reduction of stated capital account.84
Financial Assistance in Own-Share Acquisition
Rationale for statutory provisions
Commonwealth Caribbean Companies Acts, other than the Act in Belize,

contain provisions regulating the giving of financial assistance by a company
in the acquisition of its own shares.85 The inclusion of these provisions in these
Acts is closely associated with a perceived need to rationalise a rule found in
Commonwealth Caribbean companies legislation based on UK companies
legislation enacted after 1929 that a company may not provide ‘financial
assistance’ to enable persons to purchase the company’s shares.86
This statutory rule against a company giving financial assistance in the
purchase or acquisition of its own shares has sometimes been viewed as an
aspect of the Trevor v Whitworth prohibition against a company purchasing its
own shares and of the capital maintenance rule. On this view, for a company
to give financial assistance to enable the purchase or acquisition of its own
shares is in substance no different from the purchase or acquisition by the
company itself and, similarly, results in the reduction of the company’s capital.
But, as Gower and Davies point out, the giving of financial assistance in own
share acquisition does not necessarily affect stated capital.87 For instance, if
financial assistance is given by means of an adequately secured loan, it merely
substitutes one asset for another88 with no necessary reduction of the
company’s net asset position.
The giving of financial assistance in own shares purchase, on the other hand,
has often been an aspect of what may be considered abusive schemes. An
excellent example of such an abusive scheme is a takeover scheme where the
bidder borrows money, makes a successful bid for the company and repays the
loan out of the company’s funds after the takeover.89 Another example of
abuse may occur in a takeover on a share-for-share basis where shareholders
in the target company are offered shares in the offeror company, rather than
cash, for their shares. Here, financial assistance given by a target company to
buy shares in the offeror company so as to maintain the value of the shares in
the offeror company at a level which makes them attractive to the
shareholders in the target company results in distortion of the offeror
company’s share price.90 It is the prevention of these kind of abuses which are
likely to arise from the giving of financial assistance in own share purchase
that is the major justification for the present provisions in regional Acts.91
Overview of the statutory provisions
The rule against a company giving financial assistance for the purchase of its
own shares is now substantially relaxed in Commonwealth Caribbean
Companies Acts. Because the provisions in the Guyanese Act are so different
from those in the other Acts, it will be convenient to examine the provisions
these Acts and those in the Guyanese Act separately.
Acts other than Guyanese Act
The regime established by Commonwealth Caribbean Companies Acts, other

than the Guyanese Act, consists of two sets of rules. The first set of rules relate
to a general prohibition in the Acts against the giving of financial assistance by
a company for the purchase of its own shares.92 The second consists of a list of
excepted ‘permitted’ cases where a company may give such financial
assistance.93
The general prohibition
The Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada,

Guyana, Jamaica, Montserrat, St Christopher/Nevis, St Lucia, St Vincent and
Trinidad and Tobago all provide that, when circumstances prejudicial to the
company exists, a company or any of it is affiliates must not directly or
indirectly give financial assistance by means of a loan, guarantee or otherwise
to any shareholder, director or employee of the company or any affiliated
company for any purpose.94 Similarly, a company or any of its affiliates must
not directly or indirectly give financial assistance by means of a loan,
guarantee or otherwise to any person for the purpose of or in connection with
a purchase of shares issued or to be issued by the company or any company
with which it is affiliated.95
On the clear wording of the Acts, circumstances prejudicial to the company
must exist for the general prohibition to be operative. Circumstances
prejudicial to the company exist when there are reasonable grounds for
believing that either of two states as to the solvency of the company exists.96
These are, first, that the company is unable or would, after giving financial
assistance, be unable to pay its liabilities as they become due.97 The second is
that the realisable value of the company’s assets, excluding the amount of any
financial assistance in the form of a loan and in the form of assets pledged or
encumbered to secure a guarantee, would, after giving the financial assistance,
be less than the aggregate of the company’s liabilities and stated capital of all
classes.98 In Nelson v Rentown Enterprises Inc99 it was held that the solvency
requirement must be satisfied both when the contract is made as well as when
it is performed.
It must be stressed that these general prohibitions do not apply if the giving
of the financial assistance falls within any of the cases permitted under the
Acts.100 The Canadian case of Clarke v Technical and Marketing Associates
Ltd Estate101 illustrates this point. That case concerned a leveraged buyout in
which there was a guarantee of the obligation to pay for the shares secured by
a general security agreement charging the assets of the purchased company.
The purchasing company and the company giving the guarantee were then
amalgamated and the amalgamated company subsequently went into
bankruptcy. A question arose as to the validly of the general security
agreement. It was held that the general security agreement was valid as it was
financial assistance to a body corporate by a wholly owned subsidiary. This
was permitted under the relevant provision of the Act and the general
prohibition in the Act against the giving of financial assistance was
inapplicable.
Contracts contravening the prohibition

Guyana, Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago
expressly enact that a contract made by a company in contravention of the
statutory prohibition against the giving of financial assistance may be enforced
by the company or by a lender for value in good faith without notice of the
contravention.102 This provision appears to be based on the assumption that a
contract made by a company in contravention of the statutory prohibition is
not enforceable and to be intended to protect a lender for value in good faith
without notice from this result.
The lender for value in good faith without notice protection was considered
in the case of Royal Bank of Canada v Stewart et al.103 The facts of this case
were that the bank was asked to lend sufficient funds for the purpose of
buying the shares of one of the shareholders. The loan was secured by a
corporate guarantee and collateral mortgage. The loan was not repaid and the
bank sued on its security. The evidence indicated that the assistant manager of
the bank knew the purpose of the loan. The bank’s solicitors also were
involved in the preparation of the security documents. In these circumstances,
it was held that the bank had imputed notice and consequently could not rely
on the good faith protection. Its claim to enforce the loan accordingly failed.
Arguably, then, Royal Bank of Canada v Stewart et al104 is authority for the
proposition that the lender for value in good faith without notice protection
does not avail where the lender has sufficient information or sufficient
information can be imputed to him to put him on enquiry.105
These niceties associated with the lender for value in good faith without
notice protection do not arise under the Jamaican Act. That Act provides that,
for the avoidance of doubt, a contract made by a company or by a person
giving financial assistance in contravention of the general statutory prohibition
shall not, by reason only of that contravention, be rendered void, or
unenforceable by the company or person giving financial assistance.106
Cases where company permitted to give financial assistance
Under the Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica,

Grenada, Guyana, Jamaica, Montserrat, St Christopher/Nevis, St Lucia and St
Vincent, a company is permitted to give financial assistance to any person by
means of a loan, guarantee or otherwise for the purchase of its own shares in
the ordinary course of business, if the lending of money is part of the ordinary
business of the company.107 Under all of these Acts, except the St
Christopher/Nevis Act, a company may also give financial assistance if the
assistance is on account of expenditures incurred or to be incurred on behalf of
the company.108
Under all these Acts, including the St Christopher/Nevis Act, a company is
also permitted to give financial assistance in certain corporate group situations.
Accordingly, a company which is a wholly owned subsidiary of a holding
company may give financial assistance to that holding company.109 Similarly, a
company may give financial assistance to any subsidiary of that company.110
Finally, under these Acts, a company may give financial assistance to
employees of that company or any of its affiliates (i) except in Jamaica and St
Christopher/Nevis, to enable or assist them to purchase or erect living
accommodation for their own occupation;111 (ii) in accordance with a plan for
the purchase of shares of the company or any of its affiliates to be held by
trustees;112 or (iii) except in Jamaica and St Christopher/Nevis, to enable or
assist them to improve their education or skills, or to meet reasonable medical
expenses.113
Under the Guyanese Act

As has been pointed out, the provisions in the Companies Act in Guyana
exhibit sufficiently significant differences from the other Commonwealth
Caribbean Companies Acts as to merit separate treatment. The regime
established under the Guyanese Act is examined in this section.
Section 54(1) of the Guyanese Act forbids a company or any company with
which it is affiliated giving financial assistance, whether directly or indirectly,
by means of a loan, guarantee or the provision of security or otherwise for the
purpose of, or in connection with, a purchase or subscription made or to be
made by any person of or for any shares in a company. Notwithstanding this
general prohibition, a company may give such financial assistance in three
statutorily specified cases.114
A company may give financial assistance where the transaction has been
approved by a special resolution of the company115 and a statutory declaration
is made by the directors of the company.116 The statutory declaration must be
to the effect that there are no reasonable grounds for believing that the
company is, or would after the giving of the financial assistance be, unable to
pay its liabilities as they become due;117 or that the realisable value of the
company’s assets, excluding the amount of any financial assistance in the form
of a loan and in the form of assets pledged or encumbered to secure a
guarantee, would, after giving the financial assistance be less than the
aggregate of the company’s liabilities and stated capital.118
A company may also give financial assistance in the ordinary course of
business, if the lending of money is part of the company’s ordinary business.119
Finally, a company may give financial assistance to an employee, other than
an employee who is also a director, of the company or an affiliated company
in accordance with a plan for the purchase of shares in the company or any
affiliated company to be held by a trustee,120 or to enable them to purchase
shares in the company or an affiliated company to be held by them by way of
beneficial ownership.121
A company may be presumed to have given financial assistance contrary to
the Act in statutorily defined circumstances.122 Such a presumption arises
where a person, or two or more persons, acting jointly or in concert, gain
control of a company and within one year after the person or persons gained
control, purchases any assets from that person or those persons or any of
them, or any company controlled by that person or those persons or any of
them, or any group of companies affiliated with the same group of companies
as that person or those persons or any of them.123 However, the presumption
does not apply where it is proved that the purchase can, in all the
circumstances, properly be regarded as a purchase made in the ordinary
course of carrying on the business of the company concerned.124
A company is controlled by a person if shares in that company carrying
voting rights sufficient to elect a majority the directors of that company are
held, directly or indirectly, other than by way of security, by or on behalf of
that person.125 A company is controlled by two or more persons if that
company is affiliated with the same group of companies as those persons,126 or
if shares in that company sufficient to elect a majority of the directors of that
company are held, directly or indirectly, other than by way of security, or by
or on behalf of those persons jointly, separately, or jointly in the case of some
shares and separately in the case of other shares.127
Section 55 of the Act prohibits a company from giving financial assistance
to an officer of the company or a company in the same group of companies as
the company.128 Also, financial assistance may not be given to any company in
which any director, or any of the directors collectively, hold, personally or by
way of nominee, shares which entitle the director or directors to exercise at
least 51 per cent of the unrestricted voting rights at a general meeting of the
company,129 to any subsidiary of any such company,130 or to an officer of any
such company or subsidiary.131 The prohibition against giving financial
assistance to an officer of the company extends to giving financial assistance to
the family of an officer.132
This prohibition does not apply to the giving of financial assistance to
purchase or subscribe for shares when authorised by section 54 of the Act to
do so.133 Nor does it apply where lending money is part of the ordinary
business of the company or where the lending of money by the company is in
the ordinary course of its business.134 It does not apply to anything done to
provide any person with funds to meet expenditure incurred by him for the
purposes of the company providing those funds.135 Finally, it does not apply to
the giving of financial assistance to employees of a company (other than
directors) to enable or assist them to purchase or erect living accommodation
for their occupation.136
Dividends
Authority to declare dividends
Except under the Jamaican and Guyanese Companies Acts,137 companies are
not expressly authorised in Commonwealth Caribbean Companies Acts to
declare dividends. It is submitted, however, that, other than in the St
Christopher/Nevis Act, such authority is unmistakably contemplated by those
Acts where there is no express statutory authority. The provisions in those
Acts prohibiting the declaration or payment of dividends in certain
circumstances138 and the provisions on the payment of dividends139 must be
predicated on an underlying statutory assumption that companies are
authorised to declare and pay dividends.
In the same way that Commonwealth Caribbean Companies Acts do not
expressly authorise the declaration or payment of dividends, except in
Guyana,140 and, arguably in Jamaica,141 these Acts do not identify the body
within the company which has the authority to declare dividends. Despite this,
it is thought that such authority inheres in the authority given to the directors
under the Acts to manage the business and affairs of the company.142 In any
event, the authority of directors to declare dividends is a logical conclusion to
be drawn from the express stipulation in the Acts that directors may not
delegate the power to declare dividends to a managing director, to a
committee of directors or to any officers of the company.143 This proscription
only makes sense if directors have the authority in the first place to declare
dividends.
It is important to note that the exercise of the power of directors to declare
dividends under the Acts is no different from the exercise of any other
directorial power.144 In the exercise of their power to declare a dividend,
directors are under a duty to act bona fide and with a view to the best
interests of the company.145
Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, the
authority of the directors to declare dividends is subject to the articles and the
bye-laws of the company.146 It is also subject to any unanimous shareholders’
agreement which may transfer the power to declare dividends from the
directors to the shareholders.147 Except for these qualifications, it is thought
that any attempt by shareholders to declare dividends would constitute a
usurpation of directorial authority in the financial management of the
company.148
Payment of dividends
Overview
There is an inherent risk in the payment of dividends that the capital

maintenance rule may be offended by the distribution of the company’s
capital to shareholders in the form of payments of capital masquerading as
dividends.149 Two different statutory regimes exist in Commonwealth
Caribbean company law to deal with this risk. In Guyana, Jamaica and St
Christopher/Nevis, the statutes appear to have codified the common law rules,
whereas in the remainder of the region, the Companies Acts appear to have
abolished the common law rules. It is to be noted that there is no statutory
regime on dividends in the Belize Act and that, consequently, the common law
rules apply.
Acts codifying the common law rules
The Companies Acts in Guyana and Jamaica stipulate that dividends may not
be paid to shareholders except out of profits.150 In St Christopher/Nevis the
statutory formulation is that a company may make a ‘distribution’, which is
defined to include the payment of a dividend, out of profits.151 The
requirement in these Acts that dividends be paid out of profits appear to be an
enactment of the common law’s insistence that, as was stated by Farwell J in
the English case of Bond v Barrow Haematite Steel Co,152 ‘dividends must not
be paid out of capital … dividends must be paid out of profits’.
Historically, the rule that dividends must not be paid out of capital but must
be paid out profits was not based on any direct legislative authority but
evolved as a logical postulate of the capital maintenance rule. This is evident
from the early English Court of Appeal decision in Re Exchange Banking Co,
Flitcroft’s Case.153 In this case, the directors of a company for several years
allowed bad debts, which they knew to be bad, to be credited in the
company’s accounts, thus creating fictitious profits. Dividends were paid by
the directors based on these accounts. The directors were held liable to refund
the dividends paid since these amounted to an unauthorised reduction of
capital. Jessel MR explained the rules on the payment of dividends as an aspect
of the capital maintenance doctrine as follows:154
The creditor has no debtor but that impalpable thing the corporation, which has no property except the
assets of the business. The creditor, therefore, I may say, gives credit to that capital, gives credit to the
company on the faith of the implied representation that the capital shall be applied only for purposes of
the business, and he has therefore a right to say that the corporation shall keep its capital and not return it
to the shareholders.
Although the Acts in Guyana, Jamaica and St Christopher/Nevis stipulate that

dividends must only be paid out of profits, they only make varying degrees of
provision as to how profits are to be determined. It is submitted that, where
the Acts are silent, the common law rules on profits available for distribution
as dividends apply in the determination of profits for purposes of the payment
of dividends under these Acts. This is because of principle of statutory
interpretation that where a statute is silent there is a presumption against
changes in the common law.155
An overriding common law rule in relation to the determination of profits
distributable as dividends under the Acts is that each accounting period is to
be treated as a separate period.156 Since the Acts in Guyana, Jamaica and St
Christopher/Nevis are silent on this overriding rule, the rule must be
presumed to apply under these Acts. One implication of this overriding rule is
that if, for instance, a company’s stated capital is reduced by a trading loss in
an accounting period there is no duty on the company to appropriate future
receipts to replace that loss.157 Consequently, the rule is that dividends may be
paid out of current trading profits without making good trading losses in
previous years.158 This rule is expressly enacted in section 51(1) of the
Guyanese Act which reads: ‘No company shall be required to eliminate past
revenue losses before dividends from profit of subsequent years are paid.’ The
Acts in Jamaica and St Christopher/Nevis are silent. However, on ordinary
principles of statutory interpretation this rule also applies in those territories.
Rules directed at whether capital losses (both in prior years and in the
current year) have to be made good before a dividend can be paid developed
in the case law are also instructive in determining profits under the Acts. In
this regard, the case law draws a distinction between losses of fixed capital
and losses of circulating capital. In the English Court of Appeal case of
Ammonia Soda Co v Chamberlain,159 Swinfen Eady LJ defined fixed capital
as:160
that which a company retains, in the shape of assets upon which the subscribed capital has been expended,
and which assets either themselves produce income, independent of any further action by the company, or
being retained by the company are made use of to produce income or gain profits.
And circulating capital as:161

a portion of the subscribed capital of the company intended to be used by being temporarily parted with
and circulated in business in the form of money, goods or other assets, and which, or the proceeds of
which, are intended to return to the company with an increment, and are intended to be used again and
again, and to always return with some accretion.
One common law rule based on this distinction is the rule that dividends may
be paid out of current trading profits without making good losses in fixed
capital in prior years or the current year.162 This rule is expressly enacted into
law by section 51(2) of the Guyanese Act.163 The application of this rule also
appears to be contemplated by section 114(2)(a) of the St Christopher/Nevis
Act, which provides that a company may make a distribution out of its
realised profits less its realised losses. The Act in Jamaica is silent and so the
common law rule applies.
Consistent with the foregoing principle, it has been held that it is not a legal
requirement that provision be made for depreciation before a dividend is
declared.164 Losses of circulating capital in the current accounting period are
on a different footing. All the cases are in agreement that such losses have to
be made good before a dividend may be declared as otherwise there is no
profit. However, Swinfen Eady LJ in the English Court Appeal case of
Ammonia Soda Co v Chamberlain165 expressed the view that this rule applies
only to circulating capital understood to mean stock in trade in the strictest
sense. The Acts in Jamaica, Guyana and St Christopher/Nevis are all silent on
these rules. For reasons already stated, these common law rules are applicable
in these territories.
Case law has also confronted the way in which the increase in value of
fixed capital is to be treated in the payment of dividends. In relation to this, it
has been firmly established that a dividend may be paid out of a realised profit
arising out of the sale of fixed assets as long as there is an overall surplus of
fixed and circulating assets over liabilities.166 This rule is contemplated by
section 114(2)(a) of the St Christopher/Nevis Act since that provision allows
for distributions out of ‘realised profits’ without differentiating between
capital and revenue profits. The Acts in Jamaica and Guyana are silent on this
rule and so the rule applies in these territories.
The cases are in conflict on the treatment of unrealised capital accretion on
a revaluation of assets. In the Scottish case of Westburn Sugar Refineries v
IRC,167 it was held that an unrealised capital profit was not available for
distribution even though it could be used to pay a bonus issue. On the other
hand, in the English case of Dimbula Valley Ceylon Tea Co Ltd v Laurie,168
Buckley J refused to follow this decision, holding instead that an unrealised
capital profit arising from a bona fide revaluation of fixed assets can be
distributed by way of a dividend or used to pay up a bonus issue.
The Jamaican Act is silent on this rule and it appears that the confused state
of the common law represents the law in Jamaica.
The Guyanese Act, on the other hand, contains elaborate provisions on the
treatment of unrealised capital profits in the payment of dividends.169 The
basic rule under that Act is that an unrealised capital surplus arising on the
revaluation of unrealised fixed assets must not be treated as a profit for the
purposes of the declaration or payment of dividends.170 Be this as it may, a
company may by special resolution upon the recommendation of the directors
apply an unrealised capital surplus, established as in excess of the previous
book value, for the purpose of issuing bonus shares.171 Alternatively, the
company may reorganise its balance sheet by applying an unrealised capital
surplus in writing off past capital and revenue losses provided that all reserves,
other than capital redemption reserves, have previously been exhausted.172
A realised capital surplus may be treated as established only if the fixed
assets in question have been revalued by an independent valuer173 and any
capital surplus thereby arising has been certified by an independent
accountant.174 A person cannot be an independent valuer or accountant if he is
an officer of the company whose assets are revalued or of any company which
belongs, or belonged when the assets were revalued, to the same group of
companies as the company, or is an employee or partner of any such officer.175
The St Christopher/Nevis Act provides that a company may, with the
sanction of a special resolution, pay a dividend out of its unrealised profits less
its losses, whether realised or unrealised.176 Such payment may only be made
if the directors reasonably believe that immediately after the payment has
been made the company will be able to discharge its liabilities as they fall
due177 and the value of the company’s assets will not be less than the
aggregate of its liabilities, the stated amount of its issued shares, any amount
standing to the credit of its share premium account and any amount standing
to the credit of its capital redemption reserve.178 If the directors of a company
are, after making all reasonable enquiries, unable to determine whether a
particular profit made before the Act came into force is realised or unrealised,
they may treat it as realised.179 On the contrary, where, after making such
enquiries, they are unable to determine whether a particular loss is made is
realised or unrealised, they may treat the loss as unrealised.180
Finally, one of the most basic common law rules governing the distribution
of dividends is that the payment of any dividend is subject to an overriding
condition of solvency. This elemental rule which means that dividends cannot
be paid if this would lead to the company not being able to pay its debts as
they fall due,181 is codified in the Acts in all three territories.182 These Acts
forbid a company from declaring or paying a dividend if there are reasonable
grounds for believing that the company is, or would be after payment, unable
to pay its liabilities as they become due183 or that the realisable value of the
company’s assets would thereby be less than the aggregate of its liabilities and
stated capital.184
The Guyanese Act contains two special rules which apply to the payment of
dividends among corporate groups. The first is that where a particular
company becomes a subsidiary of another company, any dividend paid to the
other company out of profits of the particular company, acquired before it
became a subsidiary of the other company, must be treated as capital, and not
as profit of the other company.185 The second is that where a company
acquires all or enough of the shares of another company to control all of the
other company’s activities, the pre-acquisition profits of the acquired company
must be treated as capital of the acquiring company.186
Acts abolishing the common law rules
The statutory system for the declaration of dividends under the Acts in
Lucia, St Vincent and Trinidad and Tobago is based on a simple prohibition
against a company declaring or paying a dividend if there are reasonable
grounds for believing that the company is or would be insolvent after the
payment of a dividend, and by providing a specific test for determining the
insolvency of a company.187 The test specified in the Acts for the payment of
dividends is a dual insolvency test.
According to the first test, insolvency exists where a company is unable or
would, after the payment of the dividend, be unable to pay its liabilities as
they become due.188 It has been held that this means that the company cannot
be insolvent at the time of the dividend declaration or payment.189 Nor may
the declaration or payment of the dividend render the company insolvent.190
The second test provides that a company is insolvent if the realisable value
of the company’s assets would, as a result of the payment of the dividend, be
less than the aggregate of its liabilities and stated capital of all classes.191 In the
Canadian case of Sparling v Javelin International Ltd,192 it was held that the
second test prohibits the payment of a dividend where there is every reason to
believe that, upon a liquidation and realisation of assets, the company would
be unable to fully reimburse the capital contributions of shareholders.
Similarly, this test prohibits the declaration of a dividend at a time when the
amount of the dividend exceeds the difference between the assets and
liabilities and stated capital as reflected in the most recent unaudited financial
statements of the company.193
The Acts in Anguilla, Antigua, Barbados, Dominica, Grenada, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago also contain an express prohibition
against a company paying a dividend out of unrealised profits.194 This
stipulation is clearly a reversal of the rule laid down in Dimbula Valley Ceylon
Tea Co Ltd v Laurie195 which permitted a company to declare a dividend on an
unrealised profit occurring on a revaluation of assets. It is submitted that the
wording of the provision strongly supports the view that the section relates
not only to unrealised capital accretions but also to any profits which are not
realised.
A modified version of the Dimbula Valley rule applies in the Bahamas.
Section 60(2) of the Act in that country provides as follows:
Subject to any limitations in the memorandum or articles a company may by resolution of directors,
include in the computation of surplus for the payment of a dividend, the net unrealised appreciation of
assets of the company, and, in the absence of fraud, the decision as to the value of the assets is conclusive
unless a question of law is involved.
It is clear from this provision that, if the statutorily specified conditions are
satisfied, dividends may be paid out of unrealised profit resulting from a
revaluation of the company’s assets.
It is significant that, generally speaking, the provisions on the payment of
dividends in the Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica,
Grenada, St Lucia, St Vincent and Trinidad and Tobago avoid any reference to
‘profits’, ‘capital’ or ‘solvency’. It is submitted that this is a statutory indication
that the common law rules and the cases based on these rules have no
application as such under the regime established by these Acts. The only
enquiry relevant to the declaration of a dividend under the Acts is whether the
insolvency test laid down in the Acts is or will be offended. If it is or will be,
then, a dividend may not be declared or paid. If it is not, then, a dividend may
be declared or paid.
Form of dividend
Overview
Except in Belize, Jamaica and St Christopher/Nevis, regional Acts contain

important provisions aimed at reversing the common law rule that dividends
must only be paid in cash.196 Under the Acts in Anguilla, Antigua, the
Bahamas, Barbados, Dominica, Grenada, Montserrat, St Lucia, St Vincent and
Trinidad and Tobago, these provisions permit a company to pay a dividend by
issuing fully paid shares, or to pay a dividend in money or property.197 The
provisions in the Guyanese Act are different from those in these Acts and
merit separate examination.
Stock dividends
If it so wishes, a company in Anguilla, Antigua, the Bahamas, Barbados,

Dominica, Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago
may pay a dividend by issuing fully paid shares of the company.198 Such a
dividend is sometimes called a stock dividend. When a stock dividend is paid,
the accounting rule for the adjustment to stated capital which must be
observed is stipulated in the Acts. In such a case, the value of the dividend
stated as an amount of money must be added to the stated capital account
maintained or to be maintained for the shares of the class or series issued in
payment of the dividend.199
Under the Guyanese Act, a company may direct payment of a dividend
wholly or partly by the distribution of fully-, but not partly-, paid shares in
another company.200 Under that Act, also, the equivalent of a stock dividend
may be paid in a statutorily specified circumstance. Where a company has
passed a special resolution to transfer an amount to stated capital from a
surplus of the company, the company may on the recommendation of the
directors, by the same or a subsequent resolution resolve that unissued shares
in the company be issued credited as fully paid to the members of the
company who would have been entitled to receive the sum had it been
lawfully distributed by way of dividend and in the same proportions and so
that the sum so transferred to stated capital shall be deemed to be paid,
otherwise than in cash, on those shares.201
In Belize, Jamaica and St Christopher/Nevis, companies do not have the
power to pay stock dividends. The common law rules apply and, unless
otherwise provided by law, dividends must be paid in cash.
Dividends in money or property
A company in Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago also has statutory
power to pay a dividend in money or property.202 The power to pay a
dividend in money or property is subject to the restriction that a dividend may
not be paid out of unrealised profits.203 Further, it is subject to the rule that a
dividend may not be paid if the company is unable or would, after the
payment, be unable to pay its liabilities as they become due, or the realisable
value of the company’s assets would thereby be less than the aggregate of its
liabilities and stated capital of all classes.204
Stated Capital Reduction
Rationale of the stated capital reduction rules
A reduction of stated capital is another example of a method whereby a

company may illegitimately return capital to its shareholders to the prejudice
of the company’s creditors. On the other hand, a company may quite
legitimately wish to reduce stated capital for accounting reasons, or to return
surplus capital to shareholders for legitimate business reasons. A company
could, for instance, as part of a rationalisation programme, sell off certain
divisions of its business, thereby realising capital in excess of its needs to
finance the resultant smaller business, and may wish to return the surplus
capital to its shareholders. However, given the overriding concern in corporate
law theory with share capital as a creditors’ fund, it becomes necessary to
balance legitimate business needs to reduce stated capital against the need to
protect corporate creditors’ interest in the maintenance of the company’s
capital. Commonwealth Caribbean Companies Acts, except the Belize Act,
contain provisions on stated capital reduction205 which are aimed at achieving
this balance.206
Permitted reduction of stated capital
Under Commonwealth Caribbean companies statutes, a company may by

special resolution reduce its stated capital, but only for certain statutorily
specified purposes.207 Under all these statutes, a company may reduce its stated
capital for the purpose of extinguishing or reducing a liability in respect of an
amount unpaid on any share.208 Reduction in stated capital for extinguishing or
reducing a liability in respect of an amount unpaid on a share is in practice
rarely used, since shares may not be issued which are not fully paid up.
Except under the Guyanese, Jamaican and St Christopher/Nevis Acts, stated
capital may also be reduced to return an amount in respect of consideration
that the company received for an issued share, whether or not the company
purchases, redeems or otherwise acquires any share or fraction thereof that it
issued.209 Reductions in respect of consideration which the company received
for an issued share and to reflect an amount not represented by realisable
assets are essentially an exercise in restoring reality to the company’s
accounts.
Under all the statutes, stated capital may be reduced to reflect an amount
that is not represented by realisable assets.210 Finally, under the Guyanese,
Jamaican and St Christopher/Nevis statutes, a company’s stated capital may be
reduced to return to its shareholders any of its assets which are in excess of the
wants of the company.211 Reduction for this purpose caters for occasions where
there are legitimate business reasons to return capital to shareholders.
Procedure for reduction
Under all the Companies Acts in the Commonwealth Caribbean, a company

may reduce its stated capital account by passing a special resolution reducing
its stated capital account.212 Except under the Acts in the Bahamas, Jamaica
and St Christopher/Nevis, the special resolution must specify the stated capital
account from which the reduction of stated capital effected by the special
resolution will be deducted.213
In the Bahamas and St Christopher/Nevis, where a company passes a
resolution for reducing share capital, it may apply to the court for an order
confirming the reduction.214 The Acts in both these territories contain detailed
provisions on the procedure to be followed in obtaining a court order
confirming the reduction.215
The Jamaican Act is silent on this matter.
Protection of creditors in stated capital reduction

Overview
In order to deal with the potential prejudice to creditors when companies

exercise a power to reduce their stated capital account, the Companies Acts in
the Commonwealth Caribbean stipulate a number of requirements which
must be satisfied before the stated capital may be reduced. These include a
solvency requirement except in the Bahamas and St Christopher/Nevis;216 a
requirement for notice of reduction to creditors;217 except in Jamaica, the
conferral of a right on creditors to apply to the court in respect of the
reduction;218 only in Jamaica, the imposition of restrictions on time for return
of assets to shareholders;219 except in the Bahamas, Jamaica and St
Christopher/Nevis, the imposition of a time for enforcement and the
imposition of liability on directors in respect of reductions.220
Solvency requirement221
Except in the Bahamas and St Christopher/Nevis, the Companies Acts in the

Commonwealth Caribbean impose a solvency requirement where a company
is reducing its stated capital for the purpose of either extinguishing liability in
respect of an amount unpaid on a share or for returning an amount in respect
of consideration that the company received for an issued share.222 In these
cases, these Acts, except in Guyana and Jamaica, simply forbid a stated capital
reduction if there are reasonable grounds for believing that the company is
either unable to pay its liabilities as they become due,223 or would not be able
to do so after the reduction or that the realisable value of the company’s assets
would be rendered less than the aggregate of its liabilities by the reduction.224
The Guyanese and Jamaican Acts require a ‘statutory declaration’ by the
directors of the company to the effect that there were no reasonable grounds
for believing that, after the reduction or return, the company would be unable
to pay its liabilities as they become due, or that the realisable value of the
company’s assets would thereby be less than the aggregate of its liabilities and
the stated capital remaining after the reduction.225 The Jamaican Act goes on
to further require that the statutory declaration must be based on the
company’s audited accounts made up no more than 12 months before the date
of the statutory declaration,226 the company’s unaudited accounts made up no
more than 45 days before the date of the statutory declaration,227 and any
other facts of which the directors are aware.228
Notice to creditors
Another requirement in Commonwealth Caribbean Companies Acts, except

in the Bahamas and St Christopher/Nevis, aimed at creditor protection is the
requirement that notice of a stated capital reduction be given to creditors.229 In
all these Acts, except in Jamaica, the stipulation is that a company that reduces
its stated capital must, not later than thirty days after the passing of the
resolution, serve notice of the resolution on all persons who on the date of the
passing of the resolution were creditors of the company.230 The notice
requirement is more stringent under the Jamaican Act. Here, it is provided
that the company must, at two intervals at least seven days apart, give notice
in a daily newspaper circulating in Jamaica of any reduction of its stated
capital,231 or of any intention to reduce its stated capital.232
Creditors’ right to apply to the courts
In all the territories except Jamaica, the Acts confer upon creditors the right to
apply to the court for certain orders.233 These orders include an order
compelling a shareholder or other recipient to pay to the company an amount
equal to any liability of the shareholder that was extinguished or reduced
contrary to the provisions in the Acts governing reduction of stated capital.234
They also include an order compelling a shareholder or other recipient to pay
or deliver to the company any money or property that was paid or distributed
to the shareholder or other recipient as a consequence of a reduction of capital
made contrary to the Acts.235
It has been held that the right of a creditor to an order for a stated capital
reduction violation is limited in nature. Thus, in such a case, the priority of any
proceeds loaned back to the company is postponed to the competing claim of
a secured creditor.236
It should be noted that under the Bahamian and St Christopher/Nevis Acts,
creditors’ rights in a stated capital reduction are protected in provisions
dealing with applications to the court for a confirmation order, objections by
creditors and settlement of objecting creditors.237
Restriction on time for return of assets to shareholders
A further creditor protection mechanism under the Jamaican Act, but not
under the other Acts, relates to the reduction of stated capital by way of a
return by a company to its shareholders of its assets which are in excess of the
wants of the company. Here, a company is forbidden from returning assets to
shareholders until a period of 180 days has expired after the publication of the
second notice required to be published under the Act in the case of a capital
reduction.238
Time for enforcement
Except in the Bahamas, Jamaica and St Christopher/Nevis, any action to

enforce a liability relating to a stated capital reduction may not be commenced
after two years from the date of the act complained of.239 This limitation
period will only be varied by the courts in exceptional circumstances, as for
instance, where the interest of justice requires it.240
Directors’ liability for improper capital reduction
Commonwealth Caribbean Companies Acts, except in the Bahamas, Belize,

Jamaica and St Christopher/Nevis, include provisions which impose liabilities
on directors for taking decisions which could lead to improper reduction of
their company’s capital.241 These decisions include voting or consenting to a
resolution authorising the issuing of shares at an undervalue,242 paying an
improper indemnity,243 paying improper dividends,244 redeeming or
purchasing shares when the company cannot satisfy the solvency tests,245 the
payment of a commission not statutorily permitted,246 and the giving of
financial assistance contrary to the Acts.247
It may be noted that the Acts, not surprisingly, do not impose any liability
on directors for improper reduction of stated capital. This is because a
reduction of stated capital can only be authorised by a special resolution of
shareholders,248 not the directors. Accordingly, there is no theoretical basis for
imposing liability on directors in respect of a stated capital reduction.
It will be remembered that under the Jamaican Act, a company cannot
reduce its stated capital unless a statutory declaration is made by the directors
that there are no reasonable grounds for believing that the company would be
insolvent after the stated capital reduction.249 A director of a company who
wilfully or recklessly makes, in such a statutory declaration, a statement which
is false in a material particular is subject to criminal prosecution in a resident
magistrates’ court. If convicted, he is liable to a fine not exceeding 1m dollars
or to imprisonment for a term not exceeding two years, or to both a fine and
imprisonment.250 This provision makes sense as a duty is imposed on directors
under the Jamaican Act to make a statutory declaration.251
Stated Capital Adjustment252
Except under the Companies Acts in the Bahamas, Belize, Jamaica and St
Christopher/Nevis, upon a purchase, redemption or other acquisition of shares
or fraction of shares issued by it, a company must deduct, from the stated
capital account maintained for the class or series of shares purchased,
redeemed or otherwise acquired, an amount equal to the average value of the
shares credited to the capital account upon the issue of shares of the same class
or series immediately before the purchase, redemption or other acquisition.253
A company must also deduct from its stated capital account the amount of any
payment by that company to a shareholder pursuant to an oppression order
directing it to pay a shareholder any part of the moneys paid by him for his
shares.254
A company must adjust its stated capital account in accordance with any
special resolution by the company to reduce its stated capital for any of the
purposes specified in the Acts.255
Where shares have been converted from one class or series to another, the
company must deduct from the stated capital account of the former class or
series the average value of the shares of that class or series256 and add the
same amount, and any additional consideration received by the company
pursuant to the change, to the stated capital account of the new class or series
of shares into which the shares in question have been converted or changed.257
Shares or fractions of shares issued by a company and purchased, redeemed
or otherwise acquired by that company must be cancelled.258 If, however, the
articles of the company limit the number of authorised shares, the shares or
fractions may be restored to the status of authorised but unissued shares.259 It
is to be noted that a company holding shares in itself as a legal representative
or in connection with the lending of money is deemed not to have purchased
redeemed or otherwise acquired those shares.260
Payment of Commissions Out of Stated Capital
Account
Commissions paid from share capital for the purchase of shares have the effect
of reducing the company’s stated capital account. This notwithstanding,
regional Acts provide that the directors of a company may authorise the
company to pay a reasonable commission to any person in consideration of his
purchasing or agreeing to purchase shares of the company from the company
or any other person, or procuring or agreeing to procure purchasers for such
shares.261 The provisions in these Acts, except in Jamaica and Trinidad and
Tobago, however, mandate that directors must act honestly and in good faith
with a view to the best interests of the company in authorising such a
commission.262 This standard protects the integrity of the company’s stated
capital account from payment of improper commissions. This standard is
buttressed by the provisions in the Acts, except in the Bahamas, Jamaica and
St Christopher/Nevis, which impose joint and several liability on directors
who vote for, consent to or fail to effectively dissent from a resolution
authorising an unreasonable commission on the purchase of the shares of a
company.263
Conclusion
Tobago have introduced many innovative improvements in the law relating to
capital maintenance. These innovations include substantial statutory rules on
own-share purchase, share redemption, the giving of financial assistance in
own-share acquisition, the payment of dividends, and stated capital reduction.
These rules are quite detailed and in some ways complex. The common theme
that defines these rules is that they represent an attempt at balancing the
flexibility embraced by modern corporate theory and practice with the need
for the protection of corporate creditors’ interest in the maintenance of share
capital. The Companies Acts in Belize and St Christopher/Nevis have not
embraced the innovations in the other regional Acts.
Notes
1 (1887) 12 App Cas 409, 433 Eng HL.
2 (1882) 21 Ch D 519, 533 Eng CA. See also Guiness v Land Corporation of Ireland (1882) 22 Ch D 349, 375
Eng CA per Cotton LJ; Vernier v General and Commercial Investment Trust [1894] 2 Ch 239, 264 Eng CA
per Lindley LJ; Hill v Permanent Trustee Co of New South Wales Ltd [1930] 720, 731 PC per Lord Russell of
Kilowen.
3 (1887) 12 App Cas 409 Eng HL.
4 (1887) 12 App Cas 409, 423–424 Eng HL
5 Gower’s Principles of Modern Company Law (4th edn London: 1979) 216.
6 See Ang s 39(1); Ant s 37(1); B’dos s 37(1); Dom s 37(1); Gren s 37(1); Mont s 37(1); St L s 37(1); St V s 37(1);
T’dad s 41(1).
7 See Ang s 40; Ant s 39; Bah s 44; B’dos s 39; Dom s 39; Gren s 39; Guy s 38; J’ca s 58; Mont s 39; St C/N s 57;
St L s 39; St V s 39; T’dad s 43.
T’dad s 41(1).
T’dad s 41(2).
10 See Ang s 39(2)(a); Ant s 37(2)(a); B’dos s 37(2)(a); Dom s 37(2)(a); Gren s 37(2)(a); Mont s 37(2)(a); St L s
37(2)(a); St V s 37(2)(a); T’dad s 41(2)(a).
11 See Ang s 39(2)(b); Ant s 37(2)(b); B’dos s 37(2)(b); Dom s 37(2)(b); Gren s 37(2)(b); Mont s 37(2)(b); St L s
37(2)(b); St V s 37(2)(b); T’dad s 41(2)(b).
St V s 38(1); T’dad s 42(1).
St V s 38(1); T’dad s 42(1).
St V s 38(2); T’dad s 42(2).
15 (1887) 12 App Cas 409 Eng HL.
16 (1986) 37 DLR (4th) 193, 194 Ont HC, affd (1986) 37 DLR (4th) 193 Ont Div Ct.
17 See Caricom Report paras 6.36–6.60. And see generally, Hinkley, Hunter and Ziff, Current Issues in Equity
Finance (London: 1998) Ch 5; Ferran, Company Law and Corporate Finance (London: 1999) Ch 13.
18 See Caricom Report para 6.44; Interim Report of the Select Committee on Company Law, Ontario, 27th
Legis., 5th Sess. (1967) (Lawrence Report) para 5.2.9.
St L s 39; St V s 39; T’dad s 43.
20 See Ang s 41; Ant s 40; Bah: no similar provision; B’dos s 40; Dom s 40; Gren s 40; Guy s 39; J’ca s 59; Mont
s 40; St C/N: no similar provision; St L s 40; St V s 40; T’dad s 44.
T’dad s 41(1).
22 Namely, the rule in Trevor v Whitworth (1887) 12 App Cas 409 Eng HL discussed above.
St L s 39; St V s 39; T’dad s 43.
24 See St C/N s 57.
25 See Ang s 40; Ant s 39; Bah s 44; B’dos s 39; Dom s 39; Gren s 39; Guy s 38; J’ca s 58; Mont s 39; St L s 39; St
V s 39; T’dad s 43.
26 See Ang s 40(2); Ant s 39(2); Bah s 44(2); B’dos s 39(2); Dom s 39(2); Gren s 39(2); Guy s 38(2); J’ca s 58(4)–(7);
Mont s 39(2); St C/N s 57; St L s 39(2); St V s 39(2); T’dad s 43(2).
27 See Ang s 40(2); Ant s 39(2); Bah s 44(2); B’dos s 39(2); Dom s 39(2); Gren s 39(2); Guy s 38(2); Mont s 39(2);
St C/N s 57(5); St L s 39(2); St V s 39(2); T’dad s 43(2).
(a); Mont s 39(2)(a); St C/N ss 57(5) and 56(a); St L s 39(2)(a); St V s 39(2)(a); T’dad s 43(2)(a).
(b); Mont s 39(2)(b); St C/Nss 57(5) and 56(b); St L s 39(2)(b); St V s 39(2)(b); T’dad s 43(2)(b).
30 See J’ca s 58(4).
31 See J’ca s 58(4)(a).
32 See J’ca s 58(4)(b).
33 See J’ca s 58(5)(a).
34 See J’ca s 58(4)(b).
35 See J’ca s 58(4)(c).
36 (1998) (sub nom 2323–0220 Que inc c. Gestion Michel Noel ltee) [1998] RJQ 1714 Que CA.
37 See Ang s 41; Ant s 40; B’dos s 40; Dom s 40; Gren s 40; Guy s 39; J’ca s 59; Mont s 40; St L s 40; St V s 40;
T’dad s 44.
41 See Ang s 41(2)(a); Ant s 40(2)(a); B’dos s 40(2)(a); Dom s 40(2)(a); Gren s 40(2)(a); Guy s 39(2)(a); Mont s
40(2)(a); St L s 40(2)(a); St V s 40(2)(a); T’dad s 44(2)(a). See also discussion of dissenting shareholders,
below.
42 See Ang s 41(2)(b); Ant s 40(2)(b); B’dos s 40(2)(b); Dom s 40(2)(b); Gren s 40(2)(b); Guy s 39(2)(b); J’ca s
59(3); Mont s 40(2)(b); St L s 40(2)(b); St V s 40(2)(b); T’dad s 44(2)(b). See also discussion of restraining
oppression, below.
43 See Ang s 50; Ant s 49; Bah s 46; B’dos s 49; Dom s 49; Gren s 49; Guy s 48; Mont s 49; St L s 49; St V s 49;
T’dad s 53.
St L s 49(1); St V s 49(1); T’dad s 53(1).
St L s 49(2); St V s 49(2); T’dad s 53(2). And see Wallinder v Target Tunnelling Ltd (1988) 62 Alta LR (2d)
125 Alta QB.
48 (1992) 5 Alta LR (3d) 149 Alta QB; (1994) 16 Alta LR (3d) 212 Alta CA.
49 See Ang s 42(1); Ant s 41(1); B’dos s 41(1); Dom s 41(1); Gren s 41(1); Guy s 40(1); J’ca s 62(1): worded
differently from other Acts; Mont s 41(1); St C/N s 55(3): worded differently from other Acts; St L s 41(1);
St V s 41(1); T’dad s 45(1).
50 Re Central Capital Corpn (1996) 26 BLR (2d) 88 Ont CA.
St V s 41(1); T’dad s 45(1).
St V s 41(1); T’dad s 45(1).
St V s 41(2); T’dad s 45(2).
55 Re Central Capital Corpn (1996) 26 BLR (2d) 88 Ont CA.
56 See Ang s 42(2); Ant s 41(2); Dom s 41(2); Gren s 41(2); Guy s 40(2); Mont s 41(2); St L s 41(2); St V s 41(2);
T’dad s 45(2).
57 Namely, s 34(2) of the Saskatchewan Business Corporations Act, RSS 1978, c. B-10.
58 (1984) 28 BLR 122 Sask QB.
59 Enterprise Saint-Boniface Inc v Innovision Window Fashions Inc (1998) 39 BLR (2d) 151 Man QB.
60 J’ca s 56(1). See St C/N s 55(1).
61 J’ca s 56(2). See St C/N s 55(2).
62 J’ca s 56(3). See St C/N s 55(3).
63 J’ca s 57(1). See St C/N s 55(3).
64 J’ca s 56(4)(a).
65 See St C/N s 55(3).
66 J’ca s 57(2). See St C/N s 55(8) which provides: ‘Upon the redemption of shares … the amount of the
company’s issued capital shall be diminished by the stated value of those shares but the redemption shall
not be taken as reducing the authorised share capital of the company.’
67 J’ca s 57(2). See St C/N s 55(8).
68 J’ca s 57(3). See St C/N s 55(9).
69 J’ca s 62.
70 J’ca s 62(1).
71 J’ca s 62(1)(b).
72 J’ca s 62(1)(a).
73 J’ca s 62(1)(a).
74 J’ca s 62(1)(d).
75 J’ca s 62(1)(d).
76 J’ca s 62(2).
77 J’ca s 62(1)(c).
78 J’ca s 62(3).
79 J’ca s 62(4).
80 J’ca s 62(4).
81 J’ca s 62(6).
82 See St C/N s 58.
85 See Ang ss 54–56; Ant ss 53–55; Bah ss 30–32; B’dos ss 53–55; Dom ss 53–55; Gren ss 53–55; Guy ss 54–55;
J’ca ss 184–185; Mont ss 53–55; St C/N s 58; St L ss 53–55; St V ss 53–55; T’dad ss 56–57.
87 Gower and Davies, Principles of Modern Company Law (8th edn London: 2008) 341–344.
88 Ibid, 342.
89 For examples of such a scheme, see Selangor United Rubber Estates Ltd v Craddock (No 3) [1968] 1 All ER
1073 Eng Ch D; Karak Rubber Co v Burden (No 2) [1972] 1 All ER 1210 Eng Ch D.
90 For an example of this type of share support scheme, see Saunders v United Kingdom (Case
43/1994/490/572) [1997] BCC ECtHR.
92 See Ang s 54; Ant s 53; Bah s 31; B’dos s 53; Dom s 53; Gren s 53; J’ca s 184; Mont s 53; St C/N s 58(1); St L s
53; St V s 53; T’dad s 56.
93 See Ang ss 55; Ant s 54; Bah s 30; B’dos ss 54; Dom s 54; Gren s 54; J’ca s 185; Mont s 54; St C/N s 58(2): the
list here is stated to be cases which are not prohibited; St L s 54; St V s 54; T’dad: no similar provision.
94 See Ang s 54(1); Ant s 53(1); Bah s 31(1); B’dos s 53(1); Dom s 53(1); Gren s 53(1); J’ca s 184(1); Mont s 53(1);
St C/N s 58(1) merely states that ‘it is not lawful for a company to give financial assistance directly or
indirectly for the purpose of, or in connection with, the acquisition made or to be made by any person of
any shares in the company or where the company is a subsidiary, in any holding company’; St L s 53(1); St
V s 53; T’dad s 56(1).
St C/N s 58: no similar provision; St L s 53(1); St V s 53(1); T’dad s 56(1).
St C/N: no similar provision; St L s 53(2); St V s 53(2); T’dad s 56(2).
97 See Ang s 54(2)(a); Ant s 53(2)(a); Bah s 31(2)(a); B’dos s 53(2)(a); Dom s 53(2)(a); Gren s 53(2)(a); J’ca s 184(2)
(a); Mont s 53(2)(a); St C/N: no similar provision; St L s 53(2)(a); St V s 53(2)(a); T’dad s 56(2)(a).
98 See Ang s 54(2)(b); Ant s 53(2)(b); Bah s 31(2)(b); B’dos s 53(2)(b); Dom s 53(2)(b); Gren s 53(2)(b); J’ca s
184(2)(b); Mont s 53(2)(b); St C/N: no similar provision; St L s 53(2)(b); St V s 53(2)(b); T’dad s 56(2)(b).
99 (1992) 5 Alta LR (3d) 149 QB, affd (1994) 16 Alta LR (3d) 212 CA.
St C/N: no similar provision; St L s 53(1); St V s 53(1); T’dad s 56(1).
101 (1992) 8 OR (3d) 734 Ont Gen Div.
102 See Ang s 56; Ant s 55; Bah s 32; B’dos s 55; Dom s 55; Gren s 55; J’ca s 184(3); Mont s 55; St L s 55; St V s
55; T’dad s 57. See also Petro-Canada v Cojef Ltd (1992) [1993] 3 WWR 76 Man CA.
103 (1979) 8 BLR 77 BC SC, affd (1981) 31 BCLR33 BC CA.
104 Ibid.
105 See also Petro-Canada v Cojef Ltd [1993] 3 WWR 76 Man CA.
106 J’ca s 184(3).
107 See Ang ss 55(a); Ant s 54(a); Bah s 30(a); B’dos s 54(a); Dom s 54(a); Gren s 54(a); J’ca s 185(a); Mont s 54(a);
St C/N s 58(2)(a); St L s 54(a); St V s 54(a). This, as interpreted in Steen v Law [1964] AC 287 PC, only avails
banks and similar ‘moneylending’ corporate institutions registered to lend money as part of the ‘ordinary
business of the company’. It does not avail a company which may incidentally lend money.
108 See Ang ss 55(b); Ant s 54(b); Bah s 30(b); B’dos s 54(b); Dom s 54(b); Gren s 54(b); J’ca s 185(b); Mont s
55(b); St L s 54(b); St V s 54(b).
109 See Ang ss 55(c); Ant s 54(c); Bah s 30(c); B’dos s 54(c); Dom s 54(c); Gren s 54(c); J’ca s 185(c); Mont s 54(c);
St C/N s 58(3); St L s 54(c); St V s 54(c).
110 See Ang ss 55(d); Ant s 54(d); Bah s 30(d); B’dos s 54(d); Dom s 54(d); Gren s 54(d); J’ca s 185(d); Mont s
54(d); St C/N s 58(3); St L s 54(d); St V s 54(d).
111 See Ang ss 55(e)(i); Ant s 54(e)(i); Bah s 30(e)(i); B’dos s 54(e)(i); Dom s 54(e)(i); Gren s 54(e)(i); Mont s 54(e)
(i); St L s 54(e)(i); St V s 54(e)(i).
112 See Ang ss 55(e)(ii); Ant s 54(e)(ii); Bah s 30(e)(ii); B’dos s 54(e)(ii); Dom s 54(e)(ii); Gren s 54(e)(ii); J’ca s
185(e); Mont s 54(e)(ii); St C/N s 58(2)(d); St L s 54(e)(ii); St V s 54(e)(ii).
113 See Ang ss 55(e)(iii); Ant s 54(e)(iii); Bah s 30(e)(iii); B’dos s 54(e)(iii); Dom s 54(e)(iii); Gren s 54(e)(iii);
Mont s 54(e)(iii); St L s 54(e)(iii); St V s 54(e)(iii).
114 Guy s 54(2).
115 This does not take effect before the expiration of the period of 28 days after it was passed; and if during that
period an application is made under the civil remedies provisions of the Act to the court with respect to
the resolution, it does not take effect until the application is determined, and it takes effect then, only if
having regard to the order made on the determination, it may take effect: Guy s 54(3).
116 Guy s 54(2)(a).
117 Guy s 54(2)(a)(i).
118 Guy s 54(2)(a)(ii).

119 Guy s 54(2)(b). See also Steen v Law [1964] AC 287 PC.
120 Guy s 54(2)(c)(i).
121 Guy s 54(2)(c)(ii).
122 Guy s 54(4).
123 Guy s 54(4).
124 Guy s 54(5).
125 Guy s 54(6)(a).
126 Guy s 54(6)(b)(i).
127 Guy s 54(6)(b)(ii).
128 Guy s 55(1)(a).
129 Guy s 55(1)(b).
130 Guy s 55(1)(c).
131 Guy s 55(1)(b).
132 Guy s 55(3).
133 Guy s 55(2)(a).
134 Guy s 55(2)(b).
135 Guy s 55(2)(c).
136 Guy s 55(2)(d).
137 J’ca s 158(1); Guy s 51(1) of the Jamaican and the Guyanese Acts respectively provide that ‘a company may,
in general meeting, declare dividends’.
138 See Ang s 52; Ant s 51; Bah s 61; B’dos s 51; Dom s 51; Gren s 51; Mont s 51; St L s 51; St V s 51; T’dad s 53.
140 Under Guy s 51, the directors recommend to the company in general meeting which is authorised to declare
dividends.
141 The same appears to be contemplated under the Jamaican Act. As to this see J’ca s 158(2) which provides:
‘Where, pursuant to the articles of a company, the recommendation of the directors of a company with
respect to the declaration of a dividend is rejected or varied by the company in general meeting, a
statement to that effect shall be included in the relevant directors’ annual report.’ This provision only
makes sense if it is contemplated that the directors are to recommend a dividend to the company in
general meeting.
142 See Ang s 59(1)(b); Ant s 58(1)(b); Bah s 79(b); B’dos s 58(1)(b); Dom s 58(1)(b); Gren s 58(1)(b); Mont s 58(1)
(b); St L s 58(1)(a); St V s 58(1)(a); T’dad s 60(1)(b). Support for this view is to be found in the judgment of
Dickson CJ in the Supreme Court of Canada decision in McClurg v MNR (1991) 50 BLR 161 SCC where he
said at p 170: ‘In my view, it cannot be disputed that the power to pay dividends is an integral component
of the broad grant of managerial power for directors found in s 97(1) of the [Saskatchewan Business
Corporation Act].’ Section 97(1) is in pari materia with the sections cited in this footnote.
143 See Ang s 82(2)(d); Ant s 82(2)(a); Bah s 98(d); B’dos s 80(2)(d); Dom s 82(2)(d); Gren s 82(2)(d); Guy s 81(2)
(d); Mont s 82(2)(d); St L s 82(2)(d); St V s 82(2)(d); T’dad s 84(2)(d).
144 McClurg v MNR (1991) 50 BLR 161 SCC.
145 Ibid.
(b); St L s 58(1)(a); St V s 58(1)(a); T’dad s 60(1)(b).
(b); St L s 58(1)(a); St V s 58(1)(a); T’dad s 60(1)(b).
148 Scott v Scott [1943] 1 All ER 582 Eng Ch D. And see Shaw & Sons Ltd v Shaw [1935] 2 KB 113 Eng CA; Rose
v McGivern [1998] 2 BCLC 593, 604 Eng Ch D.
149 See It’s a Wrap (UK) Ltd v Gula [2006] 2 BCLC 634 Eng CA at 641 per Arden LJ and at 645 per Sedley LJ.
150 Guy s 50(3); J’ca s 158(3).
151 St C/N s 114(2).
152 [1903] 1 Ch 353 365 Eng Ch D. The case of Dovey v Corey [1901] AC 447, 487 Eng HL points to the difficulty
in determining whether a specific dividend was being paid out of profits or capital.
153 (1882) 21 Ch D 519 Eng CA.
154 (1882) 21 Ch D 519, 533–534 Eng CA.
155 As to the general operation of this principle, see Arthur v Bohenham (1708) 11 Mod 148, 149 per Trevor CJ;
River Wear Commissioners v Adamson (1877) 1 QBD 546, 549 per Mellish LJ; George Wimpey & Co Ltd v
BOAC [1955] AC 169, 191 Eng HL per Lord Reid.
156 Re National Bank of Wales [1899] 2 Ch 629 Eng CA. But see the doubts expressed by Lord Davey on this
view of the law in the English House of Lords, sub nom Dovey v Cory [1901] AC 477, 493. These doubts
were supported by Farwell J in Bond v Barrow Haematite Steel Co [1902] 1 Ch 353. It appears, however,
that the English Court of Appeal’s decision in Ammonia Soda Co v Chamberlain [1918] 1 Ch 266 CA has
settled the law.
157 Ammonia Soda Co v Chamberlain [1918] 1 Ch 266 Eng CA.
158 Ibid.
159 [1918] 1 Ch 266 Eng CA.
160 [1918] 1 Ch 266, 286 Eng CA.
161 [1918] 1 Ch 266, 287 Eng CA.
162 Lee v Neuchatel Asphalt Co (1889) 41 Ch D 1 Eng CA; Verner v General & Commercial Investment Trust
[1894] 2 Ch 239 Eng CA; Lawerence v West Somerset Mineral Railway [1918] 2 Ch 250.
163 This subsection reads: ‘A company shall not be required to make good either realised or unrealised capital
losses before a distribution of dividends.’
164 Ammonia Soda Co v Chamberlain [1918] 1 Ch 266 Eng CA.
165 [1918] 1 Ch 266, 286 Eng CA.
166 Lubbock v British Bank of South America [1892] 2 Ch 198; Foster v New Trinidad Co [1901] 1 Ch 208.
167 [1960] TR 105 IH (I Div).
168 [1961] Ch 353.
169 Guy s 52.
170 Guy s 52(1).
171 Guy s 52(2)(a).
172 Guy s 52(2)(b).
173 Guy s 52(3)(a).
174 Guy s 52(3)(b).
175 Guy s 52(4).

176 St C/N 114(3).
177 St C/N 114(3)(a).
178 St C/N 114(3)(b).
179 St C/N 114(6).
180 St C/N 114(6).
181 See Peter Buchanan Ltd v McVey (1950), reported at [1955] AC 516n, 521–522.
182 Guy s 50(5); J’ca s 158(4); St C/N s 114(2)(b).
183 Guy s 50(5)(a); J’ca s 158(4)(a); St C/N s 114(2)(b)(i).
184 Guy s 50(5)(b); J’ca s 158(4)(b); St C/N s 114(2)(b)(ii).
185 Guy s 52(5).
186 Guy s 53.
188 See Ang s 52(a); Ant s 51(a); Bah s 61(a); B’dos s 51(a); Dom s 51(a); Gren s 51(a); Mont s 51(a); St L s 51(a);
St V s 51(a); T’dad s 54(a).
189 Standal’s Patents Ltd v 160088 Can Inc (1993) 53 ACWS (3d) 425 Que SC; Re Central Capital Corpn (1996) 26
BLR (2d) 88 Ont CA.
190 R v Sands Motor Hotel Ltd (1984) 28 BLR 122 Sask QB.
191 See Ang s 52(b); Ant s 51(b); Bah s 61(b); B’dos s 51(b); Dom s 51(b); Gren s 51(b); Mont s 51(b); St L s 51(b);
St V s 51(b); T’dad s 54(b).
192 (1987) 37 BLR 265 Que SC.
193 Trustee of 633746 Ont Inc v Salvati (1990) 73 OR (2d) 774 Ont SC.
T’dad s 55(2).
195 [1961] Ch 353.
196 As to the common law rule, see Priceville Fox Co v Jordan [1929] 3 DLR 907 Ont CA where it was held that,
in the absence of express authority, dividends must be paid in cash.
197 See Ang s 53(1); Ant s 52(1); Bah s 60(1); B’dos s 52(1); Dom s 52(1); Gren s 52(1); Mont s 52(1); St L s 52(1);
St V s 51(1); T’dad s 55(1).
St V s 51(1); T’dad s 55(1).
St V s 51(3); T’dad s 55(3).
200 Guy s 50(4).
201 Guy s 50(6).
St V s 51(1); T’dad s 55(1).
203 See Ang s 53(2); Ant s 52(2); Bah: see discussion above; B’dos s 52(2); Dom s 52(2); Mont s 52(2); Gren s
52(2); St L s 52(2); St V s 51(2); T’dad s 55(2).
St L s 44; St V s 44; T’dad s 48.
206 Unisource Canada Inc v Hongkong Bank of Canada (1998) 43 BLR (2d) 226 Ont Gen Div; varied (2000) 131
OAC 24 Ont CA.
207 See Ang s 45(1); Ant s 44(1); Bah s 50; B’dos s 44(1); Dom s 44(1); Gren s 44(1); Guy s 43(1); J’ca s 71(1); Mont
s 44(1); St C/N s 61(2); St L s 44(1); St V s 44(1); T’dad s 48(1).
208 See Ang s 45(1)(a); Ant s 44(1)(a); Bah s 50(a); B’dos s 44(1)(a); Dom s 44(1)(a); Gren s 44(1)(a); Guy s 43(1)(a);
J’ca s 71(1)(a); Mont s 44(1)(a); St C/N s 61(2); St L s 44(1)(a); St V s 44(1)(a); T’dad s 48(1)(a).
210 See Ang s 45(1)(c); Ant s 44(1)(c); Bah s 50(c); B’dos s 44(1)(c); Dom s 44(1)(c); Gren s 44(1)(c); Guy s 43(1)(c);
J’ca s 71(1)(b); Mont s 44(1)(c); St C/N s 61(2)(b); St L s 44(1)(c); St V s 44(1)(c); T’dad s 48(1)(c).
211 Guy s 43(1)(b); J’ca s 71(1)(c); St C/N s 61(2)(c).
44(1); St C/Ns 61(1); St L s 44(1); St V s 44(1); T’dad s 48(1).
St V s 44(2); T’dad s 48(2).
214 Bah s 51(1); St C/N s 62(1).
215 Bah ss 51–55; St C/N ss 62–65.
St L s 44(3); St V s 44(3); T’dad s 48(3).
St L s 44(4); St V s 44(4); T’dad s 48(4).
218 See Ang s 45(5); Ant s 44(5); Bah: s 51(2) provides for creditor to apply to the court in an order for
confirmation proceedings; B’dos s 44(5); Dom s 44(5); Gren s 44(5); Guy s 43(5); Mont s 44(5); St C/N: s
62(3) provides for creditor to object to reduction in order for confirmation proceedings; St L s 44(5); St V s
44(5); T’dad s 48(5).
219 J’ca s 71(6).
St V s 44(6); T’dad s 48(6).
221 Discussed extensively in Unisource Canada Inc v Hongkong Bank of Canada (1998) 43 BLR (2d) 226 Ont Gen
Div, varied (2000) 131 OAC 24 Ont CA.
St L s 44(3); St V s 44(3); T’dad s 48(3).
223 See Ang s 45(3)(a); Ant s 44(3)(a); B’dos s 44(3)(a); Dom s 44(3)(a); Gren s 44(3)(a); Mont s 44(3); St L s 44(3)
(a); St V s 44(3)(a); T’dad s 48(3)(a).
224 See Ang s 45(3)(b); Ant s 44(3)(b); B’dos s 44(3)(b); Dom s 44(3)(b); Gren s 44(3)(b); Mont s 44(3); St L s 44(3)
(b); St V s 44(3)(b); T’dad s 48(3)(b).
225 Guy s 43(3); J’ca s 71(3).
226 J’ca s 71(4)(a).
227 J’ca s 71(4)(b).
228 J’ca s 71(4)(c).
St L s 44(4); St V s 44(4); T’dad s 48(4).
St V s 44(4); T’dad s 48(4).
231 J’ca s 71(5)(a).
232 J’ca s 71(5)(b).
233 See Ang s 45(5); Ant s 44(5); Bah: s 51(2) provides for creditor to apply to the court in an order for
confirmation proceedings; B’dos s 44(5); Dom s 44(5); Gren s 44(5); Guy s 43(5); Mont s 44(5); St C/N: s
62(3) provides for creditor to object to reduction in order for confirmation proceedings; St L s 44(5); St V s
44(5); T’dad s 48(5).
234 See Ang s 45(5)(a); Ant s 44(5)(a); Bah: provisions are different; B’dos s 44(5)(a); Dom s 44(5)(a); Gren s 44(5)
(a); Guy s 43(5)(a); Mont s 44(5)(a); St C/N: provisions are different; St L s 44(5)(a); St V s 44(5)(a); T’dad s
48(5)(a).
235 See Ang s 45(5)(b); Ant s 44(5)(b); Bah: provisions are different; B’dos s 44(5)(b); Dom s 44(5)(b); Gren s 44(5)
(b); Guy s 43(5)(b); Mont s 44(5)(b); St C/N: provisions are different; St L s 44(5)(b); St V s 44(5)(b); T’dad s
48(5)(b).
236 Unisource Canada Inc v Hongkong Bank of Canada (1998) 43 BLR (2d) 226 Ont Gen Div, varied (2000) 131
OAC 24 Ont CA.
237 See Bah ss 51–55; St C/N ss 62–66.
238 J’ca s 71(6).
St V s 44(6); T’dad s 48(6).
240 Unisource Canada Inc v Hongkong Bank of Canada (1998) 43 BLR (2d) 226 Ont Gen Div; varied (2000) 131
OAC 24 Ont CA.
241 See Ang ss 85–86; Ant ss 85–86; B’dos ss 83–84; Dom ss 85–86; Gren ss 85–86; Guy ss 84–85; Mont ss 85–86;
St L ss 85–86; St V ss 85–86; T’dad ss 87–88.
243 See Ang s 86(e); Ant s 86(e); B’dos s 84(e); Dom s 86(e); Gren s 86(e); Guy s 85(e); Mont s 86(e); St L s 86(e);
St V s 86(e); T’dad s 88(e).
244 See Ang s 86(c); Ant s 86(c); B’dos s 84(c); Dom s 86(c); Gren s 86(c); Guy s 85(c); Mont s 86(c); St L s 86(c);
St V s 86(c); T’dad s 88(c).
245 See Ang s 86(a); Ant s 86(a); B’dos s 84(a); Dom s 86(a); Gren s 86(a); Guy s 85(a); Mont s 86(a); St L s 86(a);
St V s 86(a); T’dad s 88(a).
246 See Ang s 86(b); Ant s 86(b); B’dos s 84(b); Dom s 86(b); Gren s 86(b); Guy s 85(b); Mont s 86(b); St L s 86(b);
St V s 86(b); T’dad s 88(b).
247 See Ang s 86(d); Ant s 86(d); B’dos s 84(d); Dom s 86(d); Gren s 86(d); Guy s 85(d); Mont s 86(d); St L s 86(d);
St V s 86(d); T’dad s 88(d).
44(1); St C/Ns 61(1); St L s 44(1); St V s 44(1); T’dad s 48(1).
249 J’ca s 71(3).
250 J’ca s 71(7).
251 J’ca s 71(3).
252 See Re Central Capital Corpn (1996) 26 BLR (2d) 88 Ont CA; LSI Logic Corpn of Canada Inc v Logani [2002]
100 Alta LR (3d) 49 Alta QB.
253 See Ang s 46(1); Ant s 45(1); B’dos s 45(1); Dom s 45(1); Gren s 45(1); Guy s 44(1); Mont 45(1); St L s 45(1); St
V s 45(1); T’dad s 49(1).
V s 45(2); T’dad s 49(2).
V s 45(3); T’dad s 49(3).
256 See Ang s 46(4)(a); Ant s 45(4)(a); B’dos s 45(4)(a); Dom s 45(4)(a); Gren s 45(4)(a); Guy s 44(4)(a); Mont 45(4)
(a); St L s 45(4)(a); St V s 45(4)(a); T’dad s 49(4)(a).
257 See Ang s 46(4)(b); Ant s 45(4)(b); B’dos s 45(4)(b); Dom s 45(4)(b); Gren s 45(4)(b); Guy s 44(4)(b); Mont 45(4)
(b); St L s 45(4)(b); St V s 45(4)(a); T’dad s 49(4)(b).
261 See Ang s 51; Ant s 50; Bah s 47(1); B’dos s 50; Dom s 50; Gren s 50; Guy s 49; J’ca s 53; Mont s 50; St C/N s
36(1); St L s 50; St V s 50; T’dad s 53A.
262 See Ang s 51; Ant s 50; Bah s 47(1); B’dos s 50; Dom s 50; Gren s 50; Guy s 49(1); Mont s 50; St C/N s 36(1);
St L s 50; St V s 50.
263 See Ang ss 85–86; Ant ss 85–86; B’dos ss 83–84; Dom ss 85–86; Gren ss 85–86; Guy ss 84–85; St L ss 85–86; St
V ss 85–86; T’dad ss 87–88.
Chapter 9
Shares, Classes of Shares and Class
Rights
Introduction
The Companies Acts in the Commonwealth Caribbean contain either a
‘Division’1 or ‘Part’2 headed ‘Share Capital’. Included in this Division or Part
are extensive provisions dealing with shares, classes of shares and class rights.
These topics are of fundamental importance in understanding many themes in
company law as is apparent from the recurrent references to them throughout
this book. Accordingly, the current chapter seeks to explore these topics more
closely in the context of Commonwealth Caribbean company law.
Legal Nature of Shares
Statutory provisions
Despite the obvious importance accorded to ‘shares’ in Commonwealth

Caribbean Companies Acts, of these Acts, only the Belizean,3 Jamaican4 and St
Christopher/Nevis5 Acts purport to supply a definition of shares as such. In this
regard, the Belizean and Jamaican Acts enact that ‘“share” means a share in
the share capital of a company, and includes stock except where a distinction
between stock and shares is expressed or implied.’6 The definition in the St
Christopher/Nevis Act is similar to that in the Belizean and Jamaican Acts. The
Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago refrain
from stating what ‘shares’ mean; they simply declare that a ‘“share” includes
stock’.7 Finally, all Commonwealth Caribbean Companies Acts, except the Act
in Jamaica, also state that ‘shares in a company are personal estate and are not
of the nature of real estate’.8
Legal nature of shares
Overview
Some insight into the legal nature of shares in Commonwealth Caribbean

company law may be derived from an analysis of the foregoing statutory
provisions. Analysis of the case law also throws some useful light on the legal
nature of shares. Accordingly, recourse will be had to these two sources to
explore this very important topic.
Analysis of statutory provisions
First, as just noted, all the Acts, except the Act in Jamaica, declare that ‘shares
in a company are personal estate and are not of the nature of real estate’.9 By
declaring shares ‘personal estate’, these Acts make it clear that a share itself is
more than a mere contractual right in personam. The statutory
characterisation of shares as personal estate also makes it clear that shares are
the object of dominion, that is, of rights in rem and that any transactions in
shares will be legally recognised as long as such transactions are possible in
respect of other species of personal property.10 Finally, the characterisation of
shares as personal estate makes it clear that shares are choses in action, since
personal property divides broadly into two groups, namely tangible movables
and intangibles, which are usually called choses in action. Shares are certainly
not tangible movables; they must therefore be choses in action.11
Second, an aspect of a share which emerges from the definition of ‘share’ in
the Acts in Belize, Jamaica and St Christopher/Nevis is that a share is an
aliquot separate part of the capital of a company and also confers rights in a
company.12 This description of a share is more fully explained in a statement
of Lord Wrenbury in the English House of Lords case of Bradbury v English
Sewing Cotton Co,13 where he said:
A share is … part of the capital. It confers upon the holder a certain right to a proportionate part of the
assets of the corporation, whether by way of dividend or of distribution of assets in winding-up. It forms,
however, a separate right of property. The capital is the property of the corporation. The share, although it
is a fraction of the capital, is the property of the corporator. The aggregate of all the fractions if collected
in two or three hands does not constitute the corporators the owners of the capital—that remains the
property of the corporation. But, nevertheless, the share is a property in a fractional part of the capital.
Lord Wrenbury’s statement makes it plain that the company is to be regarded

not only as persona, and as such the subject of rights and duties, but also as res,
and the object of rights and duties. Lord Wrenbury’s statement also confirms
the conclusion that shares are choses in action, and that they do not confer
rights in or over any identifiable asset or fund of assets of a company. Rather,
they merely confer rights in or over the general assets of the company. This is
necessarily so, because the essence of choses in action is that they do not give
any entitlement to an identified asset or fund of assets, but merely a right in or
over general assets. Shares, therefore, do not entitle shareholders to any
property in common of the company, but merely to certain rights in respect of
the company’s capital.
Finally, the insistence in Commonwealth Caribbean Companies Acts that
shares in a company ‘are not of the nature of real estate’14 emphasises that
shares are the antithesis of real property. The major significance of this
distinction is that whereas a claim to real property is a vindicatory action, in
the sense that the plaintiff is entitled to possession of the property itself, a
share cannot be recovered by action: the court has the discretion to award the
plaintiff the value of the share as damages instead.
Case law analysis of shares
Beyond the clarification as to the proprietary nature of shares provided by

regional Acts, further enquiry into the juridical nature of shares must rely on
case-law analysis. In this regard, one of the most often cited descriptions of a
share in the cases is the dictum of Farwell J in the English case of Borland’s
Trustee v Steel,15 rejecting an argument by the plaintiff that shares are to be
treated as money or funds settled on the terms and conditions set out in the
company’s articles, which take effect in the same way as a deed constituting a
trust and defining the beneficial interests in it. Of this, Farwell J said:16
A share, according to the plaintiff’s argument, is a sum of money which is dealt with in a particular
manner by what are called executory limitations. To my mind it is nothing of the sort. A share is the
interest of a shareholder in the company measured by a sum of money, for the purpose of liability in the
first place, and of interest in the second but also consisting of a series of mutual covenants entered by the
shareholders inter se in accordance with s. 16 of the Companies Act 1862. The contract contained in the
articles of association is one of the original incidents of the share. A share is not a sum of money settled in
the way suggested, but is an interest measured by a sum of money and made up of various rights contained
in the contract, including the right to a sum of money of a more or less amount.
Farwell J’s description lays considerable emphasis on the contractual nature of

the shareholder’s rights. This is clearly inapposite in the regional context
where, except in the Bahamas,17 Belize,18 Jamaica19 and St Christopher/Nevis,20
regional Companies Acts do not contain any provision similar to section 16 in
the Companies Act 1862. If, however, the reference to the contractual nature
of the shareholder’s rights is ignored, Farwell J’s description exposes two
important aspects of the juridical character of shares.
The first is that, as is now evident under regional Companies Acts,21 shares
confer on shareholders rights in the company. These rights may include a right
to income in the form of dividends, a right to capital in a winding up of the
company and a right to vote in general meetings. These rights are not purely
in personam rights against the company, but instead, constitute a kind of
proprietary interest in the company though not in its property.
The second important aspect of the legal nature of a share revealed in
Farwell J’s dictum relates to his description of a share as the interest of a
shareholder measured by a sum of money as to the shareholder’s liability. This
reference to liability in the dictum discloses that shareholders qua members
may be under obligations to the company as well as having rights against it.
Farwell J’s description lays particular emphasis on the proprietary and
financial aspects of a share. An equally important aspect of a share which must
not be overlooked is that a share entitles a shareholder to become a member
of a company and to attend and vote in the company’s deliberations in its
general meetings. This aspect of a share becomes acutely obvious in any bid to
gain control of a company.22
Classes of Shares
Concept of classes of shares
Commonwealth Caribbean Companies Acts, except the Belize and St

Christopher/Nevis Acts, make repeated reference to ‘class of shares’ but do not
define what that expression means. The question then becomes: what is meant
by a ‘class of shares’? It appears from the relevant provisions in these Acts23
that where similar rights, privileges, restrictions and conditions are annexed to
a set of shares, this makes that set of shares with similar rights a class of
shares. The concept of a ‘class of shares’, then, is nothing more than the means
by which differential treatment of shares is achieved under these Acts.24
It is important to emphasise that Commonwealth Caribbean Companies
Acts expressly require that the rights, privileges, restrictions and conditions
must attach to the shares, as opposed to the shareholders, of each class.25 In
order to create a class of shares, therefore, it is not enough for the rights to be
conferred on shareholders in their capacity as shareholders. This submission
finds support in the Canadian decision of McClurg v Minister of National
Revenue26 where it was pointed out by Dickson CJ that the division of shares
into separate classes is the means by which shares, as opposed to shareholders,
are distinguished. The earlier Ontario Court of Appeal case of Bowater Cdn.
Ltd v RL Crain Inc,27 which was cited by Dickson CJ with approval in McClurg
v Minister of National Revenue,28 is even stronger authority. In this case, a
step-down provision contained in the articles, which provided that special
common shares held by the holder would be entitled to ten votes per share,
but would carry only one vote per share in the hands of a transferee, was held
to offend the company law principle that the rights attached to a class of
shares are provided equally to all shares of that class and do not attach to a
particular shareholder. Accordingly, the special common shares carried ten
votes each, irrespective of holder.
The upshot of the foregoing is that a class of shares in Commonwealth
Caribbean company law is a sub-group of shares with rights and conditions in
common which distinguish them from other shares issued by a company. The
rights and conditions must attach to the shares as opposed to the holder of the
share. In consequence, the often-cited definition of a class by Bowen LJ in the
English Court of Appeal case of Sovereign Life Assurance Co v Dodd29 as
‘those persons whose rights are not so dissimilar as to make it impossible for
them to consult together with a view to their common interest’ is inadequate
in the context of Commonwealth Caribbean company law because it does not
sufficiently indicate that persons in a class acquire their rights as a
consequence of their holding shares to which these rights attach.
In this context also, the formulation of Scott J in the English case of
Cumbrian Newspaper Group Ltd v Cumberland and Westmoreland Herald
Ltd30 to include rights conferred on a member of the company in his capacity
as a member and which rights are not attached to any particular set of shares
does not represent the law in the Commonwealth Caribbean. In that case, the
plaintiff was given by name certain rights of preemption and the right to
appoint a director and to transfer shares. Scott J thought that the shares for the
time being held by the member constituted a class for the purposes of the
statutory procedure for variation of class rights. He opined:31
In my view, a company which, by its articles, confers special rights on one or more of its members in the
capacity as member or shareholder thereby constitutes the shares for the time being held by that member a
class for the purposes of s 125 [the statutory provision governing variation of class rights]. The rights are
class rights.
It is submitted that the express wording of the regional Acts deny the
applicability of the Cumbrian Newspaper Group Ltd v Cumberland and
Westmoreland Herald Ltd32 approach to class rights in the Commonwealth
Caribbean.
Power to issue classes of shares

There are express provisions in the Companies Acts in Anguilla, Antigua,
Trinidad and Tobago dealing with companies which have only one class of
shares.33 Under these Acts, when a company has only one class of shares, the
rights of the holders are statutorily declared to be equal in all respects.34 These
rights include the right to vote at any meeting of shareholders,35 the right to
receive any dividend declared by the company,36 and the right to receive the
remaining property of the company on dissolution.37 These rights may be
conveniently referred to as voting rights, income rights and capital rights.
The provisions in the Acts in Anguilla, Antigua, Barbados, Dominica,
on companies with one class of shares is nothing more than a codification of
the well accepted common law presumption of equality amongst shares. This
presumption posits that prima facie, the rights carried by shares, namely,
income rights, capital rights and voting rights, rank pari passu. Thus, even
though the Acts in the Bahamas, Belize, Jamaica and St Christopher/Nevis do
not make any express provision for these rights, the rights attach to shares in
these territories because they are rights generally accepted as common law
rights attaching shares.38
In derogation from the statutory and the common law principle that the
rights of holders of shares are equal in all respects, a company may provide for
more than one class of shares under Commonwealth Caribbean Companies
Acts, except under the Belizean Act.39 Where a company so provides, it must
set out the rights, privileges, restrictions and conditions attaching to the shares
of each class in the company’s articles.40 It was explained by Dickson CJ in the
Canadian Supreme Court case of McClurg v Minister of National Revenue41
that the purpose of this requirement is to ensure that shareholders are fully
aware of their rights and entitlements to the extent that the principle of
equality among the holders of shares is rendered inapplicable. A company
providing for more than one class of shares must also attach voting, income
and capital rights to at least one class of shares, but all of those rights need not
be attached to the same class of shares.42
Issue of shares in series
Except in the Bahamas, Belize, Jamaica and St Christopher/Nevis, companies

have an express statutory power to issue any class of shares in ‘series’.43 The
issue of a class of shares in series means that there is a subdivision of the class
of shares issued.44
Normally, the need to issue shares in series only arises in case of shares
having a preferred dividend right. However, the provisions in regional Acts do
not limit the issue of shares in series to those circumstances. Instead, these Acts
provide that the articles of a company may authorise the issue of any class of
shares in one or more series.45 Further, the Acts provide that the articles may
also authorise the directors to fix the number of shares in, and to determine
the designation, rights, privileges, restrictions and conditions attaching to the
shares of, each series.46 In practice, the grant of this authority to directors could
facilitate companies responding quickly to changing market conditions for
shares since, in most companies, it is easier for directors to pass a resolution
creating a series of shares than to convene a meeting of shareholders to do so.
The power of the directors relating to the issue of classes of shares in a
series can only be exercised within statutory stipulated boundaries. In the first
place, directorial exercise of their power is subject to any limitations set out in
the articles.47 In this context, it has been held that the provisions in the articles
may confer upon the directors a wide discretion to create shares in series and
to fix their attributes. Such discretion may even include the right to determine
voting rights among the shares of various series of the class.48
The second limitation is that, where a company proposes to issue shares of a
series authorised by the articles, then, before such an issue, the directors must
send to the Registrar articles of amendment in the prescribed form to
designate a series of shares.49 Upon receipt of the articles of amendment
designating the series of shares, the Registrar must issue to the company a
certificate of amendment.50 The articles of the company are amended
accordingly on the date shown in the certificate of amendment.51
Rights attaching to different classes of shares
As has been seen, the basic rights which attach a share of a company are
income rights in the form of dividends, capital growth rights and voting rights.
These are the basic rights, but there are no limitations on the rights, privileges,
restrictions or conditions which may be attached to the shares of a company.52
Correspondingly, by attaching rights, privileges, restrictions or conditions to
shares, a company may create countless classes of shares.
In practice, most companies in the region, public and non-public, restrict
their capital structure to one class, namely, ordinary or common shares.
However, some companies find it expedient in raising equity financing to have
more classes of shares. In such cases, the capital structure typically consists of
ordinary and preference shares with possibly several variations of each of
these.
Ordinary shares
Ordinary shares are those shares to which the rights attached are the basic
rights which attach to all shares unless contrary provision is made in the
articles of incorporation. If the company’s shares are all of one class, then these
are necessarily ordinary shares. Indeed, a company cannot create different
classes of shares without creating among these classes a class of ordinary
shares.53
A basic characteristic of the income and capital rights attaching to an
ordinary share is that the return on the share is neither guaranteed nor fixed.
Dividends may vary depending upon the profitability of the company, and the
ultimate capital return depends upon the ultimate liquidation value of the
company. Thus, the income and capital position of the ordinary share is in
contrast to that of the preference share which has priority over the ordinary
share as to income and capital but only to a fixed amount. Simply put,
ordinary shares have no right to any fixed dividend or return of capital.
However, after the payment of the fixed dividends or return of capital to
preference shares, ordinary shares are entitled to the remainder of the surplus
distributable income or capital of the company. This, of course, is subject to the
preference share’s right to participate in income or capital.
For the foregoing reasons, ordinary shares may be said to ‘constitute the
residuary class in which is vested everything after the special rights of
preference classes, if any, have been satisfied.’54 Accordingly, ordinary shares
may be regarded as the owners of the ‘equity’ shares and ordinary
shareholders as the proprietors of the company.
The rights of the holders of ordinary shares are statutorily declared to be
equal in all respects in Anguilla, Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago55 and are
presumed to be so at common law in the Bahamas, Belize, Jamaica and St
Christopher/Nevis. This means that amongst themselves, ordinary
shareholders are entitled to share equally in income and capital distribution.
Ordinary shares, although usually carrying one vote per share, may attach
such voting rights as is considered expedient. Each ordinary share must,
however, have the same voting rights attached as each other ordinary share.
For these reasons ordinary shares are sometimes referred to as common
shares.
Preference shares
The expression preference share is a term which is widely used in corporate

finance but the expression has no precise legal designation under
Commonwealth Caribbean Companies Acts. Be that as it may, the
distinguishing characteristic of a preference share is that it confers on its
holder some priority in respect of either dividends or of repayment of capital
or both over the holder of an ordinary share. The major focus of a preference
share is the conferment of a financial advantage on the holder of such a share
and so it is usual for a preference share to have restricted voting rights limited
to matters which affect the financial rights attached to it.
There are various types of preference shares. For instance, one type of
preference shares participates with the other shareholders after their
preferential rights have been satisfied.56 This type of preference share exists
where it is provided in the articles of incorporation that the preference share
shall confer the right to a preferential dividend of a stated per cent and to
participate with the other shareholders in any dividends after the latter have in
turn receive the stipulated per cent. Such shares are called participating
preference shares. Preference shares which do not participate in this way are
called non-participating preference shares.
Another type of preference share is what is referred to as cumulative
preference shares.57 Cumulative preference shares entitle their holders to
arrears of dividends not paid in any given year to be made up in a subsequent
year when dividends are paid. Preference shares which do not entitle their
holders to an accumulation of arrears are referred to as a non-cumulative
preference share.
Preference shares are in some respects indistinguishable from debentures
and are sometimes described as hybrid between equity and debt.58 So, for
instance, the fixed dividend payable on preference shares is not dissimilar to
the fixed interest payable on debt. Similarly, the priority to a return of capital
on a winding up enjoyed by preference shares resembles the right of a creditor
to a return of the capital sum loaned. On the other hand, preference shares can
exhibit many of the characteristics of ordinary shares and preference shares
may be convertible into ordinary shares either on a set date or at the option of
the shareholder, or in some circumstances at the option of the company.
Redeemable shares
Redeemable shares are shares which are issued on terms that they are to be
redeemed or are liable to be redeemed by the company at some point in the
future. Apart from in Jamaica59 and St Christopher/Nevis,60 Commonwealth
Caribbean Companies Acts do not confer any express power on companies to
issue redeemable shares. This power may be implied, however, from the
provision in the Acts which permit companies to redeem redeemable shares.61
As a matter of common sense, the right to redeem redeemable shares implies
a right to issue such shares.
It appears that any class of shares may be issued as redeemable as long as
the right to redeem is provided for in the articles of incorporation of the
company. On the other hand, redeemable shares are usually issued as
preference shares. In any event, shares issued as redeemable constitute a class
separate from those not issued as redeemable.
Redeemable shares are usually issued to allow a company to obtain short
term financing without the long term loss of corporate control which could
result from an issue of shares to outsiders.
Class Rights
Construction of class rights articles
The rights which attach to a share are those which are spelt out the company’s
articles. Consequently, class rights can only be determined by a proper
construction of these articles. Case law has developed various canons of
construction in approaching the interpretation of these articles.
Equality of rights
The basic rule in approaching the rights attaching a share is a presumption that
all shares rank equally. This rule, which was developed in the case law,62 has
been given statutory expression in a provision in some regional Acts that
‘when a company has only one class of shares, the rights of the holders are
equal in all respects’.63
In the Ontario Court of Appeal case of Ford Motor Co of Canada Ltd v
Ontario Municipal Employees Retirement Board,64 a similar provision in the
Ontario Business Corporations Act was held to be expressive of the
fundamental principle of corporate law that all shareholders must be treated
equally. Accordingly, no matter when shareholders acquired their shares, all
shareholders, by virtue of their shareholding, are entitled to share equally in a
remedy that is derivative in nature.
The same principle is evident in the Quebec case of Burdon v Zeller’s Ltd.65
This case concerned a proposed amalgamation in which the successful offeror
under a take over bid would amalgamate the target company with a wholly
owned subsidiary of the offeror, the offeror would receive common shares of
the amalgamated company and the minority shareholders would receive
either a cash settlement or non-voting convertible preference shares of the
offeror. It was held that this arrangement discriminated against the minority
shareholders in that it did not treat their rights as equal to those of the
majority shareholders. This offended the equality rule enshrined in section
24(3) of the Canadian Business Corporations Act, a provision in pari materia
with that in regional Acts.
Where the company has only one class of shares the equality rule under the
statutes that the rights of the shareholders are equal in all respects cannot be
validly varied. Thus in the Alberta Queen’s Bench case of Jacobsen v United
Canso Oil & Gas Ltd,66 where the bye-laws of a company with only one class
of shares provided that no person should be entitled to vote more than 1,000
shares notwithstanding the number of shares held by him, it was held that this
provision contravened the Act and was therefore invalid. Parliament has
clearly specified in the Acts that it is only where there is more than one class
of shares that different rights, privileges, restrictions and conditions attaching
shares may arise.
Where, however, a company has more than one class of shares, the initial
presumption of equality as between shareholders does not apply. As has
already been seen, in McClurg v Minister of National Revenue,67 the use of the
share class is the means by which Commonwealth Caribbean statutes similar
to the Canadian Business Corporations Act achieve derogation from the
principle of equality.
Rights set out in articles are exhaustive
Where the articles of a company provide for more than one class of shares or
series of shares within a class, a question could arise as to whether such a
provision derogates from a right to equal participation in capital and income
after the rights set out in the provision have been obtained. As has been seen,
the initial presumption is that all shares rank equally. This general
presumption of equality between shareholders is obviously displaced where
classes of shares are created and are given, for instance, a prior entitlement, or
preference, to a fixed dividend. Despite this, a question may arise as to
whether preference shareholders can invoke the equality principle so as to
rank equally with ordinary shareholders in respect of either the surplus assets
(that is, capital) or any further distribution of distributable profits (that is,
income) where their fixed prior dividend entitlement is satisfied.
No clear answer to this question is to be found in any of the Companies
Acts in the Commonwealth Caribbean. However, all of these Acts, except
those in Belize and St Christopher/Nevis, stipulate that ‘the rights, privileges,
restrictions and conditions attaching to the shares of each class must be set out
in the articles’.68 It is submitted that this stipulation means that rights,
privileges, restrictions and conditions which are not set out in the articles
cannot attach to the shares of the class concerned. Put another way, the rights,
privileges, restrictions and conditions set out in the articles as attaching to
shares of a class are exhaustive of the rights of shareholders of shares of that
class. Consequently, preference shareholders cannot claim to rank equally with
ordinary shareholders in respect of either capital or income once their fixed
prior dividend entitlement is satisfied. The case law on this question is
somewhat confusing but in the end supports this conclusion.
There is some suggestion in the early case law that the presumption of
equality means that even an express provision for preference should not
derogate from a right to equal participation in capital after the preference has
been obtained, or in other words, that preference shares are to be construed as
participating in capital even though no such right of participation is expressly
attached to the share. The English House of Lords’ decision in Birch v
Cropper69 appears to support this view. The facts of this case are that, under
the original articles of the Bridgewater Navigation Co, it was provided that
‘the entire net profits of each year shall belong to the holders of the shares of
the company’. There was one class of shares only. Later preference shares
were created and the amended articles provided that the preference shares
should be entitled to a dividend of 5 per cent taking precedence over the
dividends of the original ordinary shares. The amended articles did not
expressly provide for the distribution of surplus assets between preference and
ordinary shareholders on winding up.
The company was voluntarily wound up, leaving a surplus of assets after
paying all debts and returning capital to members. A question arose as to how
these surplus assets were to be divided between the preference shareholders
and the ordinary shareholders. The House of Lords held that the surplus assets
were distributable among ordinary and preference shareholders in equal
proportions.
In the English case of Will v United Lankat Co Ltd,70 however, the question
whether the presumption of equality meant that preference shares which had
been paid a dividend could rank equally with ordinary shares in respect of
income was answered by the House of Lords in the negative. The shares in
this case had the right to a preferential dividend of 10 per cent, and the House
of Lords held that, as a matter of construction, that was the sum total of the
holder’s entitlement to dividends in respect of those shares.
These two House of Lords’ decisions created an anomalous distinction to
the effect that the presumption of equality rule meant that preference shares
were presumed to be participating in capital,71 but not in income.72 The House
of Lords in the leading Scottish case of Scottish Insurance Corporation v
Wilson & Clyde Coal Co73 appears to have removed this distinction by holding
that preference shares are not to be presumed to be participating in respect of
capital.
In this case the colliery assets of a coal mining company had been
transferred to the National Coal Board under a 1946 Act, in return for
compensation. The company, no longer trading, intended to go into
liquidation, but first proposed to reduce its capital by paying off the 7 per cent
cumulative preference shareholders. The preference shareholders
unsuccessfully objected to the reduction, on grounds that it deprived them of
the opportunity to share in a distribution of surplus assets on liquidation. The
articles stated that on a winding-up, the preference shares would rank before
the ordinary shares ‘to the extent of the amounts called up and paid thereon’.
The House of Lords held that the preference shareholders were not entitled
to surplus assets and that the reduction of capital was not unfair.
The present state of the law is best captured in the following two
propositions adumbrated by Wynn-Parry J in the English case of Re Isle of
Thanet Electric Co.74
First, that, in construing an article which deals with rights to share in profits, and rights to share in the
company’s property in a liquidation, the same principle is applicable; and, second, that the principle is
that, where the articles set out the rights attached to a class of shares to participate in profits while the
company is a going concern, or to share in the property of the company in a liquidation, prima facie, the
rights so set out are in each case exhaustive.
Cumulative dividends
The basic rule at common law is that preference dividends are presumed to be
cumulative, even in the absence of any such provision in the terms of the
issue.75 This means that any unpaid arrears accumulate and must be paid in a
later year before the payment of any ordinary dividends. This presumption is,
of course, rebuttable.76
It is arguable that this common law rule no longer obtains in
Commonwealth Caribbean company law. This is because of the provision in
regional Companies Acts which mandates that the rights, privileges,
restrictions and conditions attaching to a share must be set out in the
company’s articles.77 This requirement implies that rights which are not so set
out cannot be asserted.
A special problem may arise, however, where a company goes into
liquidation with the arrears of cumulative dividends unpaid and where the
articles do not contain any express provision as to whether the preference
shareholders are entitled to payment of arrears in this event. None of the
Companies Acts in the Commonwealth Caribbean contain any provision on
this matter. One must therefore turn to case law for an answer.
English case law establishes that there is a prima facie presumption that
dividends and arrears of dividends are only payable while the company is a
going concern, and not once the company has commenced liquidation.78
However, that presumption is rebuttable where there are express words in the
articles to the contrary. The English Court of Appeal decision in Re F De Jong
Ltd79 is authority which suggests that as long as the court can find some
reference to the payment of dividends in a liquidation, it will construe the
articles as containing words to the contrary and thus entitling preference
shares to payment of arrears in a winding-up. In that case, the Court of Appeal
had to construe an article which read:
the preference shares shall carry the right to a fixed cumulative preferential dividend at the rate of six per
cent per annum on the capital for the time being paid up thereon respectively , and shall have priority as
to dividend and capital over the other shares in the capital for the time being, but shall not carry any
further right to participate in the profits or assets.
The Court held that the non-italicised words secured the rights to the
preferential dividend while the company was a going concern and that
consequently, the italicised words must relate to rights in a winding-up.
Alteration of Class Rights
Power to alter class rights
Overview of statutory provisions
As was seen in Chapter 2, a company must state in its articles the classes and
any maximum number of shares it is authorised to issue. However, except in
the Bahamas, Belize and Jamaica, a company has express statutory powers to
alter the rights attaching to any class of shares by amending its articles by
special resolution.80 In the Bahamas, a company may only alter the rights
attached to a class of shares if provision is made for such alteration in the
memorandum or articles.81 In Jamaica, provision for the alteration must be
made in the articles.82 In Belize, the Act does not contain any specific provision
on the matter, but such alteration may be made under the general alteration
provision in section 13 of the Act.
Power to add classes or alter existing class rights
Except in the Bahamas, Belize and Jamaica, a company has express statutory
power to increase or decrease its authorised share capital by amending its
articles by special resolution to change the maximum number of shares that
the company is authorised to issue.83 By the same token, a company may
create additional classes or change the terms and conditions of existing shares,
or change the shares of any class or series into a different number of shares of
other classes or series. A company may do this to create new classes of
shares84 or to change the designation of all of its shares, and add, change or
remove any rights, privileges, restrictions and conditions, including rights to
accrued dividends, in respect of all or any of its shares, whether issued or
unissued.85
Power to change the issued or unissued shares of a class
Except in the Bahamas, Belize and Jamaica, a company also has express
statutory power to amend its articles by special resolution to change the issued
or unissued shares of any class or series into a different number of shares of
the same class or series or into the same or different number of shares of other
classes or series.86 Similarly, a company may amend its articles by special
resolution to divide a class of shares, whether issued or unissued, into a series
of shares and fix the number of shares in each series and the rights, privileges,
restrictions and conditions attached thereto.87
Power to divide any class of unissued shares
Finally, a company in Anguilla, Antigua, Barbados, Dominica, Grenada,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago may amend its
articles by special resolution to authorise the directors to divide any class of
unissued shares into series of shares and to fix the number of shares in each
series and the rights, privileges, restrictions and conditions attached thereto.88
In addition, the directors may be authorised to change the rights, privileges,
restrictions and conditions attached to unissued shares of any series.89
Directors may therefore be given significant powers in respect of the
division of a company’s unissued shares. However, a company may amend its
articles by special resolution to revoke, diminish or enlarge any of these
directors’ powers.90
Protection of class rights from prejudicial alteration

Rationale of class rights protection
It is apparent from the foregoing that rights attached to a class of shares are
not vested rights, but are rights which may be amended by a special resolution
of the shareholders or in accordance with the articles where the articles so
provide. Where a company issues only one class of shares no particular
injustice can occur through such amendment since every shareholder is aware
of this peculiar qualification of his rights and has an opportunity to participate
in the decision to amend them. Where, on the other hand, a company, in
addition to one class of voting shares, issues other classes to which particular
rights, privileges, restrictions and conditions are attached, an injustice may
arise if the voting class is permitted to amend these rights, privileges,
restrictions and conditions without the consent of the class shareholders
affected.
Commonwealth Caribbean Companies Acts, except in Belize and Anguilla,
contain provisions aimed at avoiding such injustice. The protection regime in
the Acts in Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago is basically the same and that in the
Bahamas, Jamaica and St Christopher very similar. The Belizean Act, as has
been seen, contains no provisions on class rights. Not surprisingly, therefore,
that Act does not contain any class protection provisions. Surprisingly,
however, the Anguillan Act which contains provisions on class rights does not
contain any class protection provisions.
Protection in Antigua, Barbados, Dominica, Grenada,

Guyana, Montserrat, St Lucia, St Vincent and Trinidad and
Tobago
In Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia, St

Vincent, and Trinidad and Tobago, class rights are protected from prejudicial
alteration by the conferment of special voting rights on class shareholders in
fairly straightforward statutory provisions.91 These rights may be conveniently
presented in a series of propositions.
First, whether or not voting rights are attached to the shares they hold,92
class shareholders have a right to vote separately on any proposed
amendment to the articles which is statutorily specified as triggering this
right.93 Amendments which trigger a separate class vote include any proposal
to: (a) increase or decrease any maximum number of authorised shares of that
class, or increase any maximum number of authorised shares of a class having
rights or privileges equal or superior to the shares of that class;94 (b) effect an
exchange, reclassification or cancellation of all or part of the shares of that
class;95 (c) add, change or remove the rights, privileges, restrictions or
conditions attached to the shares of that class and, in particular96 (i) remove or
change prejudicially rights to accrued dividends or to cumulative dividends,97
(ii) add, remove or change redemption rights prejudicially,98 (iii) reduce or
remove a dividend preference or a liquidation preference,99 or (iv) add,
remove or change prejudicially conversion privileges, options, voting, transfer
or pre-emptive rights, or rights to acquire shares or debentures of a company,
or sinking fund provisions;100 (d) increase the rights or privileges of any class
of shares having rights or privileges equal or superior to the shares of that
class;101 (e) create a new class of shares equal or superior to the shares of that
class;102 (f) make any class of shares having rights or privileges inferior to the
shares of that class equal or superior to the shares of that class;103 (g) effect an
exchange or create a right of exchange of all or part of the shares of another
class into the shares of that class;104 or (h) constrain the issue or transfer of the
shares of that class or extend or remove such constraint.105
It is evident from the foregoing that the right to a separate class vote in
many cases depends on a change to an existing class of shares, or the creation
of a new class of shares, which results in new shares ‘having rights or
privileges equal or superior to’ the class of shares with the separate vote.
Despite numerous references to the phrase ‘having rights or privileges equal
or superior to’, there is no legislative definition of it, nor is there any case law
guidance on its meaning. Taken in context, however, the phrase seems to
indicate that the question as to whether rights or privileges of a class of shares
are equal or superior to rights of another class must be determined by a
consideration of the rights and privileges of the classes concerned as a whole
and not to one particular term or condition of a share.
Second, the right to a separate class vote in the case of proposed
amendments described in the case of (a) and (b) above is subject to the
provisions of the articles.106 On the other hand, the rights of existing shares
may not be amended, new shares created, or share capital reorganised except
in accordance with the provisions of the Acts on class votes on proposals to
alter class rights.107
Third, a proposed amendment which does or might derogate from the
rights of a holder of shares of a class or series is adopted only if the holders of
shares of that class or series approve the amendment by special resolution.108
Fourth, where the proposed amendment does not affect class rights, if the
class has no voting rights attached to its shares, the class may not vote on the
issue.109
Fifth, whenever shares of a special class vote, they vote separately, or, in
other words, a separate special resolution is required from each class of
holders of shares voting.110
Sixth, the holders of a series of shares of a class are entitled to vote
separately as a series if the series is affected by an amendment in a manner
different from other shares of the same class.111
In voting, the power to amend the articles must be exercised bona fide and
with a view to the best interests of the company. This is examined fully in
Chapter 16.
Protection in the Bahamas, Jamaica and St Christopher/Nevis
In the Bahamas,112 Jamaica113 and St Christopher/Nevis,114 class rights are

protected by the conferment of the right on class shareholders to make an
application to the court to have the alteration cancelled or confirmed. It
appears that this protection is only available in the case where the class rights
are set out in the memorandum or articles (under the Bahamian115 and St
Christopher/Nevis116 Acts) and articles (under the Jamaican Act)117 and there is
provision in the memorandum or articles (Bahamas and St Christopher/Nevis)
or articles ( Jamaica) as the case may be for variation of these rights subject to
the consent of any specified proportion of the holders of the issued shares of
that class or the sanction of a resolution passed at a separate meeting of the
holders of those shares.118 Where there is such a provision and the class has
duly consented to a variation, the holders of not less than 15 per cent of the
issued shares of that class (Bahamas and Jamaica)119 and one-tenth of the
stated value of the shares of the class (St Christopher/Nevis),120 provided that
they are persons who did not vote for the variation, may apply to the court
within twenty-one (Bahamas)121 or twenty-eight ( Jamaica122 and St
Christopher/Nevis123) days after the date on which the resolution was passed
to have the variation cancelled.124
Where such an application is made, the variation will not take effect unless
and until it has been confirmed by the court.125 The court, on hearing the
application may, if it is satisfied having regard to all the circumstances, that the
variation would unfairly prejudice the shareholders of the class represented by
the applicant, disallow the variation.126 If the court does not so disallow, the
variation is confirmed.127
A particular question which arises under the Acts in the Bahamas and
Jamaica is this: given that these Acts only afford class shareholder protection
where there is a provision in the memorandum or articles for variation of class
rights subject to the consent of a specified proportion of the class affected,
what protection do class shareholders enjoy where there are no variation of
class rights provisions in the memorandum or articles?
As has been seen, these Acts require a company to set out in its
memorandum or articles (Bahamas)128 or its articles of incorporation
( Jamaica)129 the classes of shares, if any, into which its share capital is divided.
In the meantime, the Acts permit a company by resolution (Bahamas) or
special resolution ( Jamaica) to alter or add to its articles.130 Logically, this
means that, where there is no provision for variation, class rights may be
varied by a resolution (Bahamas) or a special resolution ( Jamaica) without the
specific consent of the shareholders of a class of shares that may be
prejudicially affected. The statutory right of class shareholders to object to a
variation of class rights procedure is, therefore, not available to such class
shareholders. However, a member of a class who feels aggrieved may have
recourse to the oppression remedy available under the Acts.131
This question does not arise under the St Christopher/Nevis Act, however.
This is because that Act makes provision for class shareholders’ protection
where there is no provision in the memorandum or articles for variation of
class rights.132 In such an eventuality, the Act provides that class rights may be
varied if, but only if, the holders of two-thirds in stated value of the shares of
the class consent in writing to the variation133 or a special resolution passed at
a separate meeting of the holders of that class sanctions the variation.134
Conclusion
The power to issue, in addition to one class of voting shares, different classes
and series of shares with particular rights, privileges, restrictions and
conditions undoubtedly conduces to a company tailoring the structure of its
share capital to the concerns of equity investors. But, where a company issues
different classes of shares, there is a danger of injustice if the voting class can
derogate from the rights of the special classes. The provisions in
Commonwealth Caribbean Companies Acts represent a compromise between
the need for the protection of the special classes, on the one hand, and the
desire not to unduly restrict amendment of the corporate structure to adapt
evolving business opportunities.
Notes
1 Ang Pt 2 Div 3; Ant Pt I Div C; B’dos Pt I Div C; Dom Pt I Div C; Gren Pt I Div C; Guy Pt II Div C; Mont
Pt I Div C; St L Pt I Div C; St V Pt I Div C; T’dad Pt III Div 3.
2 Bah Pt III; Bel Pt II; J’ca Pt II; St C/N Pt VII.
3 Bel s 2.
4 Bel s 2; J’ca s 2.
5 St C/N s 2.
6 J’ca s 2.
7 Ang s 2; Ant s 543(1); Bah s 2; B’dos s 448; Dom s 543(1); Gren s 543(1); Guy s 535; Mont s 543(1); St L s
543(1); St V s 543(1); T’dad s 4.
8 Ang s 28(1); Ant s 26(1); Bah s 35(1); B’dos s 26(1); Bel s 23(1) states that shares ‘are personal estate’; Dom s
26(1); Gren s 26(1); Guy s 25(1); J’ca: no such provision; Mont s 26(1); St C/N s 34(1)(a) states that shares ‘are
personal estate’; St L s 26(1); St V s 26(1); T’dad s 30(1).
10 See generally, Bell, Modern Law of Personal Property in England and Ireland (London: 1989); by Tyler and
Palmer, Crossley Vaines on Personal Property (5th edn 1973).
11 See Colonial Bank v Whinney (1886) 11 App Cas 426 Eng HL. But see Re C A Macdonald & Co (1959) 18
DLR (2d) 731 where the Alberta Court of Appeal concluded that shares represented a type of property
which only a very wide definition of the term choses in action would include.
12 Bel s 2; J’ca s 2; St C/N s 2.
13 [1923] AC 744, 767 Eng HL.
15 [1901] 1 Ch 279.
16 [1901] 1 Ch 279, 288. Approved by the Court of Appeal in Re Paulin [1935] 1 KB 26 Eng CA and by the
House of Lords ibid, sub nom IRC v Crossman [1937] AC 26 Eng HL.
17 Bah s 11.
18 S 14(1).
19 J’ca s 19.
20 St C/N s 10.
21 See discussion above.
22 See discussion of takeovers in Chapter 28.
23 See Ang s 30; Ant s 28; Bah s 36(1); B’dos s 28; Dom s 28; Gren s 28; Guy s 27; J’ca s 8(7); Mont s 28; St L s
28; St V s 28; T’dad s 32.
24 See McClurg v Minister of National Revenue [1990] 3 SCR 1020 SCC per Dickson CJ.
25 See Ang s 30(a); Ant s 28(a); Bah s 36(1); B’dos s 28(a); Dom s 28(a); Gren s 28(a); Guy s 27(a); J’ca s 8(7)(a);
Mont s 28(a); St L s 28(a); St V s 28(a); T’dad s 32(a).
26 [1990] 3 SCR 1020, 1038–1039 SCC.
27 (1987) 39 BLR 34 Ont CA.
28 [1990] 3 SCR 1020, 1038 SCC.
29 [1892] 2 QB 573 Eng CA. See also Re Hellenic & General Trust Ltd [1975] 3 All ER 382 Eng Ch D.
30 [1987] Ch 1 Eng Ch D.
31 [1987] Ch 1, 16 Eng Ch D.
32 [1987] Ch 1, 16 Eng Ch D.
33 Ang s 29; Ant s 27; Bah s 36(1); B’dos s 27; Dom s 27; Gren s 27; Guy s 26; J’ca: by necessary inference ss
8(c) and 8(7); Mont s 27; St C/N: by necessary inference s 52(1); St L s 27; St V s 27; T’dad s 31.
35 Ang s 29(a); Ant s 27(a); B’dos s 27(a); Dom s 27(a); Gren s 27(a); Guy s 26(a); Mont s 27(a); St L s 27(a); St V
s 27(a); T’dad s 31(a).
36 Ang s 29(b); Ant s 27(b); B’dos s 27(b); Dom s 27(b); Gren s 27(b); Guy s 26(b); Mont s 27(b); St L s 27(b); St
V s 27(b); T’dad s 31(b).
37 Ang s 29(c); Ant s 27(c); B’dos s 27(c); Dom s 27(c); Gren s 27(c); Guy s 26(c); Mont s 27(c); St L s 27(c); St V
s 27(c); T’dad s 31(c).
38 See Cumbrian Newspaper Group Ltd v Cumberland and Westmoreland Herald Ltd [1987] Ch 1 Eng Ch D.
39 Ang s 30; Ant s 28; Bah s 36(1); B’dos s 28; Dom s 28; Gren s 28; Guy s 27; J’ca s 8(7); Mont s 28; St C/N: by
necessary inference, s 52(1); St L s 28; St V s 28; T’dad s 32.
40 Ang s 30(a); Ant s 28(a); Bah s 36(1); B’dos s 28(a); Dom s 28(a); Gren s 28(a); Guy s 27(a); J’ca s 8(7)(a); Mont
s 28(a); St C/N: no similar provision; St L s 28(a); St V s 28(a); T’dad s 32(a).
41 [1990] 3 SCR 1020 SCC.
42 Ang s 30(b); Ant s 28(b); Bah s 36(1); B’dos s 28(b); Dom s 28(b); Gren s 28(b); Guy s 27(b); J’ca s 8(7)(b);
Mont s 28(b); St C/N: no similar provision; St L s 28(b); St V s 28(b); T’dad s 32(b).
s 33(1); T’dad s 37(1).
44 Ang s 2(a); Ant s 543(1); B’dos s 448(c); Dom s 543(1); Gren s 543(1); Guy s 535(t); Mont s 543(1); St L s
543(1); St V s 543(1); T’dad s 4.
s 33(1); T’dad s 37(1).
s 33(1); T’dad s 37(1).
s 33(1); T’dad s 37(1).
48 Re Union Enterprise Ltd (1985) 29 BLR 128 (Director of the Ontario Business Corporations Act).
s 33(4); T’dad s 37(4).
s 33(5); T’dad s 37(5).
s 33(6); T’dad s 37(6).
52 Ang s 30; Ant s 28; Bah s 36(1); B’dos s 28; Dom s 28; Gren s 28; Guy s 27; J’ca s 8(7); Mont s 28; St C/N: by
necessary inference, s 52(1); St L s 28; St V s 28; T’dad s 32.
53 Ang s 30(b); Ant s 28(b); Bah s 36(1); B’dos s 28(b); Dom s 28(b); Gren s 28(b); Guy s 27(b); J’ca s 8(7)(b);
Mont s 28(b); St C/N: no similar provision; St L s 28(b); St V s 28(b); T’dad s 32(b).
54 Gower and Davies, Principles of Modern Company Law (8th edn 2008) 826.
56 See, e.g., Birch v Cropper (1889) 14 App Cas 525 Eng HL.
57 See, e.g., Evling v Israel & Oppenheimer [1918] 1 Ch 101.
58 See, e.g., Re Isle of Thanet Electric Co [1950] Ch 161, 175 Eng CA per Evershed MR.
59 See J’ca s 56(1).
60 See St C/N s 55(1).
St V s 41(1); T’dad s 45(1).
62 See, e.g., Re Bridgewater Navigation Co [1891] 2 Ch 317 Eng CA.
64 (2006) 12 BLR (4th) 139 Ont CA.
65 (1981) 16 BLR 59 Que SC.
66 [1980] 113 DLR (3d) 427 Alta QB.
67 [1990] 3 SCR 1020 SCC.
s 28(a); St L s 28(a); St V s 28(a); T’dad s 32(a).
69 (1889) 14 App Cas 525 Eng HL.
70 [1914] AC 11 Eng HL.
71 Birch v Cropper (1889) 14 App Cas 525 Eng HL.
72 Will v United Lankat [1914] AC 11 Eng HL.

73 [1949] AC 512 Sc HL.
74 [1950] Ch 161, 171.
75 Webb v Earle (1875) LR 20 Eq 556.
76 Staples v Eastman Photographic Materials Co [1896] 2 Ch 303 Eng CA.
28(a); St C/N: no similar provision; St L s 28(a); St V s 28(a); T’dad s 32(a).
78 See e.g., Re Crichton’s Oil Co [1902] 2 Ch 86 Eng CA.
79 [1946] Ch 211 Eng CA.
80 Ang s 162(1); Ant s 213(1); B’dos s 197(1); Dom s 213(1); Gren s 213(1); Guy 4th Sch Pt I paras 1.(1)(a) (ii), (iii)
and 4; Mont s 213(1); St C/N s 52(3); St L s 213(1); St V s 213(1); T’dad s 214(1).
81 Bah s 37(1).
82 J’ca s 73(1)(a).
83 Ang s 162(1)(c); Ant s 213(1)(c); B’dos s 197(1)(c); Dom s 213(1)(c); Gren s 213(1)(c); Guy 4th Sch Pt I para
4(a); Mont s 213(1)(c); St C/N s 52(3); St L s 213(1)(c); St V s 213(1)(c); T’dad s 214(1)(c).
84 Ang s 162(1)(d); Ant s 213(1)(d); B’dos s 197(1)(d); Dom s 213(1)(d); Gren s 213(1)(d); Guy 4th Sch Pt I para
4(b); Mont s 213(1); St C/N s 52(3); St L s 213(1)(d); St V s 213(1)(d); T’dad s 214(1)(d).
85 Ang s 162(1)(e); Ant s 213(1)(e); B’dos s 197(1)(e); Dom s 213(1)(e); Gren s 213(1)(e); Guy 4th Sch Pt I para
4(c); Mont s 213(1)(e); St C/N s 52(3); St L s 213(1)(e); St V s 213(1)(e); T’dad s 214(1)(e).
86 Ang s 162(1)(f); Ant s 213(1)(f); B’dos s 197(1)(f); Dom s 213(1)(f); Gren s 213(1)(f); Guy 4th Sch Pt I para 4(d);
Mont s 213(1)(f); St C/N s 52(3); St L s 213(1)(f); St V s 213(1)(f); T’dad s 214(1)(f).
87 Ang s 162(1)(g); Ant s 213(1)(g); B’dos s 197(1)(g); Dom s 213(1)(g); Gren s 213(1)(g); Guy 4th Sch Pt I para
4(e); Mont s 213(1)(g); St C/N s 52(3); St L s 213(1)(g); St V s 213(1)(g); T’dad s 214(1)(g).
88 Ang s 162(1)(h); Ant s 213(1)(h); B’dos s 197(1)(h); Dom s 213(1)(h); Gren s 213(1)(h); Mont s 213(1)(h); St L s
213(1)(h); St V s 213(1)(h); T’dad s 214(1)(h).
89 Ang s 162(1)(i); Ant s 213(1)(i); B’dos s 197(1)(i); Dom s 213(1)(i); Gren s 213(1)(i); Mont s 213(1)(i); St L s
213(1)(i); St V s 213(1)(i); T’dad s 214(1)(i).
90 Ang s 162(1)(j); Ant s 213(1)(j); B’dos s 197(1)(j); Dom s 213(1)(j); Gren s 213(1)(j); Mont s 213(1)(j); St L s
213(1)(j); St V s 213(1)(j); T’dad s 214(1)(j).
91 Ant s 215(1); B’dos s 202(1); Dom s 215(1); Gren s 215(1); Guy 4th Sch Pt I para 6.(1); Mont s 215(1); St L s
215(1); St V s 215(1); T’dad s 216(1).
215(3); St V s 215(3); T’dad s 216(3).
215(1); St V s 215(1); T’dad s 216(1).
94 Ant s 215(1)(a); B’dos s 202(1)(a); Dom s 215(1)(a); Gren s 215(1)(a); Guy: no similar provision; Mont s 215(1)
95 Ant s 215(1)(b); B’dos s 202(1)(b); Dom s 215(1)(b); Gren s 215(1)(b); Guy: no similar provision; Mont s 215(1)
96 Ant s 215(1)(c); B’dos s 202(1)(c); Dom s 215(1)(c); Gren s 215(1)(c); Guy: no similar provision; Mont s 215(1)
(c); St L s 215(1)(c); St V s 215(1)(c); T’dad s 216(1)(c).
97 Ant s 215(1)(c)(i); B’dos s 202(1)(c)(i); Dom s 215(1)(c)(i); Gren s 215(1)(c)(i); Guy: no similar provision; Mont
s 215(1)(c)(i); St L s 215(1)(c)(i); St V s 215(1)(c)(i); T’dad s 216(1)(c)(i).
98 Ant s 215(1)(c)(ii); B’dos s 202(1)(c)(ii); Dom s 215(1)(c)(ii); Gren s 215(1)(c)(ii); Guy: no similar provision;
Mont s 215(1)(c)(ii); St L s 215(1)(c)(ii); St V s 215(1)(c)(ii); T’dad s 216(1)(c)(ii).
99 Ant s 215(1)(c)(iii); B’dos s 202(1)(c)(iii); Dom s 215(1)(c)(iii); Gren s 215(1)(c)(iii); Guy: no similar provision;
Mont s 215(1)(c)(iii); St L s 215(1)(c)(iii); St V s 215(1)(c)(iii); T’dad s 216(1)(c)(iii).
100 Ant s 215(1)(c)(iv); B’dos s 202(1)(c)(iv); Dom s 215(1)(c)(iv); Gren s 215(1)(c)(iv); Guy: no similar provision;
Mont s 215(1)(c)(iv); St L s 215(1)(c)(iv); St V s 215(1)(c)(iv); T’dad s 216(1)(c)(iv).
101 Ant s 215(1)(d); B’dos s 202(1)(d); Dom s 215(1)(d); Gren s 215(1)(d); Guy: no similar provision; Mont s 215(1)
(d); St L s 215(1)(d); St V s 215(1)(d); T’dad s 216(1)(d).
102 Ant s 215(1)(e); B’dos s 202(1)(e); Dom s 215(1)(e); Gren s 215(1)(e); Guy: no similar provision; Mont s 215(1)
(e); St L s 215(1)(e); St V s 215(1)(e); T’dad s 216(1)(e).
103 Ant s 215(1)(f); B’dos s 202(1)(f); Dom s 215(1)(f); Gren s 215(1)(f); Guy: no similar provision; Mont s 215(1)
(f); St L s 215(1)(f); St V s 215(1)(f); T’dad s 216(1)(f).
104 Ant s 215(1)(g); B’dos s 202(1)(g); Dom s 215(1)(g); Gren s 215(1)(g); Guy: no similar provision; Mont s 215(1)
(g); St L s 215(1)(g); St V s 215(1)(g); T’dad s 216(1)(g).
105 Ant s 215(1)(h); B’dos s 202(1)(h); Dom s 215(1)(h); Gren s 215(1)(h); Guy: no similar provision; Mont s 215(1)
(h); St L s 215(1)(h); St V s 215(1)(h); T’dad s 216(1)(h).
215(1); St V s 215(1); T’dad s 216(1).
215(1); St V s 215(1); T’dad s 216(1).
108 Ant s 215(4); B’dos s 202(4); Dom s 215(4); Gren s 215(4); Guy 4th Sch Pt I para 6.(1); Mont 215(4); St L s
215(4); St V s 215(4); T’dad s 216(4).
215(1); St V s 215(1); T’dad s 216(1).
215(1); St V s 215(1); T’dad s 216(1).
215(2); St V s 215(2); T’dad s 216(2).
112 Bah s 37(1).
113 J’ca s 73(1)(a).
114 St C/N s 52(2), (3).
115 Bah s 37(1).
116 St C/N s 52(2).
117 J’ca s 73(1)(a).
118 Bah s 37(1); J’ca s 73(1)(a).
119 Bah s 37(1); J’ca s 73(1)(b).
120 St C/N s 53(1).
121 Bah s 37(2).
122 J’ca s 73(2).
123 St C/N s 53(2).
124 Bah s 37(1); J’ca s 73(1)(b); St C/N s 53(1).
125 Bah s 37(1); J’ca s 73(1)(b).

126 Bah s 37(3); J’ca s 73(3) St C/N 53(4).
127 Bah s 37(3); J’ca s 73(3); St C/N s 53(4).
128 Bah ss 5(d), (g), 10(2) and 1st Sch para 3.
129 J’ca s 8(1)(c).
130 Bah s 29; J’ca s 10.
131 Bah s 280; J’ca s 213A.
132 St C/N s 52(3).
133 St C/N s 52(3)(a).
134 St C/N s 52(3)(b).

Chapter 10
Directors and other Officers
Introduction
The Companies Acts in the Commonwealth Caribbean, except in Belize,
Jamaica and St Christopher/Nevis, expressly vest the responsibility for the
management of the company in the directors.1 At the same time, these statutes
recognise that many of the administrative and executive tasks involved in
management can only be effectively performed by delegation to officers
acting under the supervision of the directors.2 In Belize, Jamaica and St
Christopher/Nevis, the management powers of directors are regarded as being
as supremely important as under the Acts in the other territories. However,
directors’ management powers in Belize, Jamaica and St Christopher/Nevis
are to be found, not in the statutes, but in the company’s articles of association
(Belize and St Christopher/Nevis) and the articles of incorporation ( Jamaica).
It is quite evident, then, that, in Commonwealth Caribbean company law,
directors play a central role in relation to directing the management of the
business and affairs of companies. Given the central role of directors and some
other officers in the management of companies in Commonwealth Caribbean
company law, this chapter seeks to examine in detail the nature and
functioning of company directors and the extent to which the rules conferring
powers on directors allows them to discharge their mandate to manage the
business and affairs of companies.
Who are Company Directors?
De jure and de facto directors
The expression ‘director’ as such is not defined in any of the Companies Acts
in the Commonwealth Caribbean. Typically, in their definition sections these
Acts simply provide that:3
‘director’ in relation to a body corporate, means a person occupying therein the position of a director by
whatever title he is called.
This description unmistakably indicates that as long as a person is in the

position of a director, no matter what he is called, he is a director. On the other
hand, it does not clearly disclose whether, to be a director, a person must be
formally and validly appointed to the board of directors, or, in other words be
a de jure director, or whether a person who has not been formally and validly
appointed but who has assumed the position and function of a de jure director,
a de facto director,4 is also a director.
It is submitted that this issue is best resolved by having recourse to
Commonwealth Caribbean company law theory. In this regard, it is to be
noted that there are two primary constitutional organs of companies through
which companies act. These are the general meeting and the board of
directors. The company in general meeting is in actuality the meeting of the
shareholders. The Companies Acts in Anguilla, Antigua, the Bahamas,
Trinidad and Tobago expressly stipulate that, at and after the first general
meeting, directors can only be directors if they are elected to the position of
director by the general meeting.5 This would seem to argue for a conclusion
that ‘director’ means a de jure director and does not include a de facto director.
There is, on the other hand, a provision in Commonwealth Caribbean
Companies Acts which states that the acts of a director are valid
notwithstanding any irregularity in his appointment or defect in his
qualification.6 This provision, it is submitted, supports the conclusion that, as
regards the validity of the acts of a de facto director, there is no difference
between a de jure director and a de facto director in Commonwealth
Caribbean company law. So, for instance, the acts of an undischarged
bankrupt, a person disqualified from being appointed a company director,7
who shared in the management of a company, and who may therefore be
regarded as a de facto director,8 would, because of this provision, be as valid as
those of a validly appointed director. In any event, the courts have from early
days applied common law and statutory duties to de facto directors.
The determination of who is a de jure director is easily resolved by having
regard to the resolution appointing a person as a director. Answering the
question whether a person, not validly appointed as a director, has assumed
the status of director, or, in other words, is a de facto director, presents more
difficulty. It is submitted that the judgment of Etherton J in the English case of
Secretary of State for Trade and Industry v Hollier9 sheds some useful light on
the principles to be applied in determining whether a person is a de facto
director. Etherton J opined as follows:10
(1) The touchstone is whether the defendant is part of the corporate

governing structure.
(2) Inherent in that touchstone is the distinction between someone who
participates, or has the right to participate, in collective decision
making on corporate policy and strategy and its implementation, on
the one hand, and others who may advise or act on behalf of, or
otherwise for the benefit of, the company, but do not participate in
decision making as part of the corporate governance of the company.
Accordingly, the test is not satisfied by someone who was at all times
and in all material decisions subordinate to the de jure directors.
(3) The defendant may have been a de facto director even though he or
she did not have day to day control of the company’s affairs, and even
though he or she was only involved in part of the company’s activities.
(4) The issue is to be determined objectively on the basis of all relevant
facts. Whether the defendant was held out by the company, or claimed
or purported, to be a director, and whether the defendant had access to
relevant company information is likely to be highly relevant and may
be decisive. Factors such as a family relationship with other admitted
directors and the defendant’s financial interest in the company may
also be relevant, sometimes supporting and sometimes negating the
allegation that the defendant was a de facto director.
Shadow directors
The Jamaican Companies Act has introduced the category of ‘shadow director’
to extend the reach of certain disclosure provisions in that Act11 to include
individuals who are influential in the running of the company but who do not
hold any position on the board of directors. It is therefore necessary to explore
the concept of shadow director.
A shadow director is defined in section 2 of the Jamaican Act as meaning ‘a
person in accordance with whose directions or instructions the directors of a
company are accustomed to act, so, however, that a person is not deemed a
shadow director by reason only that the directors act on the advise given by
him in a professional capacity’. A similar definition in the English Companies
Act 1985 was considered by Morritt LJ in the English Court of Appeal in
Secretary of State for Trade and Industry v Deverell.12 He stated the following
propositions as emerging from the definition:13
(1) The definition of a shadow director is to be construed in the normal

way to give effect to the parliamentary intention ascertainable from
the mischief to be dealt with and the words used.
(2) The purpose of the legislation is to identify those, other than
professional advisers, with real influence in the corporate affairs of the
company. But it is not necessary that such influence should be exercise
over the whole field of its corporate activities …
(3) Whether any particular communication from the alleged shadow
director, whether by words or conduct, is to be classified as a direction
or instruction must be objectively ascertained by the court in light of
all the evidence. In that connection I do not accept that it is necessary
to prove the understanding or expectation of either giver or receiver.
In many, if not most, cases it will suffice to prove the communication
and its consequences … Certainly the label attached by either or both
parties then or thereafter cannot be more than a factor in considering
whether the communication came within the statutory description of
direction or instruction.
(4) Non-professional advice may come within the statutory description.
The proviso excepting advice given in a professional capacity appears
to assume that advice generally is or may be included. Moreover all
the concepts of ‘direction’ and ‘instruction’ do not exclude the concept
of ‘advice’ for all three share the common feature of ‘guidance’.
(5) It will, no doubt, be sufficient to show that in the face of ‘directions or
instructions’ from the alleged shadow director the properly appointed
directors or some of them cast themselves in a subservient role or
surrendered their respective discretions. But I do not consider that it is
necessary to do so in all cases … Such a requirement would be to put a
gloss on the statutory requirement that the board are ‘accustomed to
act in accordance with’ such directions or instructions.
A shadow director is to be distinguished from a de facto director. In the

English case of Re Hydrodam (Corby) Ltd, Millett J pointed to the distinction as
follows:14
A de facto director … is one who claims to act and purports to act as a director, although not validly
appointed as such. A shadow director, by contrast, does not claim or purport to act as a director. He lurks
in the shadows, sheltering behind others who, he claims, are the only directors of the company to the
exclusion of himself.
It is to be noted here, however, that in Secretary of State for Trade and

Industry v Deverell, Morritt LJ observed that ‘lurking in the shadows may
occur, but it is not an essential ingredient to the recognition of a shadow
director’.15
Alternate directors
An alternate director is a person who acts as a director in the alternative to a

director of a company. The Companies Acts in Anguilla, Antigua, Barbados,
make express provision for such a director to be elected at a meeting of the
shareholders of a company by ordinary resolution.16 Under these Acts, an
alternate director may also be appointed by the directors if a meeting of
shareholders authorises the directors to make such appointments of alternate
directors as are necessary for the proper discharge of the affairs of the
company.17
An alternate director has all the rights and powers of the director for whom
he is elected or appointed in the alternative. However, he is not entitled to
attend and vote at any meeting of the directors otherwise than in the absence
of the director for whom he is an alternate.18
Directors’ Mandate to Manage
Legal basis of management mandate
As a general rule, the directors of a company in Commonwealth Caribbean

company law are under a mandate to manage the business and affairs of that
company. Under the Companies Acts in Anguilla, Antigua, the Bahamas,
Trinidad and Tobago this mandate is a statutory mandate contained in a
provision which states as follows:19
Subject to any unanimous shareholder agreement, the directors of a company must (a) exercise the powers
of the company directly or indirectly through the employees and agents of the company, and (b) direct the
management of the business and affairs of the company.
There are no similar statutory provisions in the Belize, Jamaica or St

Christopher/Nevis Acts mandating directors to manage the business of the
company. The position in these territories may be conveniently discussed with
specific reference to the Jamaican Act.
Under the Jamaican Act, it is arguable, and appears to be assumed, that the
directors’ management mandate is derived from the shareholders’ agreement
as expressed in the articles of incorporation.20 As has been seen, by section
19(1) of the Jamaican Act,21 the relationship between the board of directors
and the members of the company is a contractual relationship based on the
articles of incorporation. The theory is that, in so far as the Act does not
specify that powers must be exercised by either directors or the shareholders,
the shareholders are free to designate in the articles of incorporation the
powers to be exercised by directors. Put another way, shareholders are free to
spell out in the articles whatever powers of management they choose to
confer on the directors.
Pursuant to section 8(6) of the Jamaican Act,22 shareholders are free to adopt
the articles set out in the First Schedule, Table A. Where this is done, general
management powers will be vested in a board of directors. This is because
Article 86 of Table A23 provides that the business of the company shall be
managed by the directors, who may exercise all powers of the company which
are not required by the Companies Act or the articles to be exercised by the
company in general meeting. Article 86 also specifies that the exercise of
directors’ powers is subject to the Act, the articles and any resolution of the
company in general meeting which is not inconsistent with the Act or
articles.24
Nature of management mandate
Interpreted literally, the statutory management mandate provision could be

taken as imposing on directors an imperative duty actually to direct the day-
to-day management of the company. Such an interpretation, while perhaps
reflecting the management reality in closely held companies where the board
of directors often actually manages, could lead to the imposition of unrealistic
duties on the board of directors of large companies.25 This consideration is
especially significant given that, if directors fail to manage the business of a
company, they may be held liable for such failure.26
It may be useful at this juncture to recall the realities of the role of the
board of directors. As was explained by one commentator:27
The task of the board of directors is to provide for the establishment and execution of sound, consistent
business policies which foster a spirit of enterprise and maintain the solvency of the corporation. The day-
to-day conduct of operations is entrusted to the executive selected by the board. In short, its function is to
provide a broad perspective and a long-range view of company affairs, to establish and authorise the
operating management of the company, to act as a steward of corporate funds and to provide a locus of
legal responsibility.
It is submitted that the duty imposed on directors in the Acts to ‘direct the
management of the company’ is to be interpreted in light of these realities so
that the role of directors of small companies should be seen as being different
from that of directors of large and complex companies. Support for such an
approach may be found in the judgment of Romer J in the venerated English
case of Re City Equitable Fire Insurance Co Ltd,28 where he observed:
It is indeed impossible to describe the duties of directors in general terms, whether by way of analogy or
otherwise. The position of a director of a company carrying on a small retail business is very different
from that of the director of a railway company. The duties of the bank director may differ widely from
those of an insurance director, and the duties of one insurance company may differ from those of another.
In one company, for instance, matters may normally be attended to by the manager or other members of
the staff that in another company are attended to by the directors themselves. The larger the business
carried on by the company the more numerous, and the more important, the matters that must of necessity
be left to the managers, the accountants and the rest of the staff. The manner in which the work of the
company is to be distributed between the board of directors and the staff is in truth a business matter to be
decided on business lines.
The power conferred on directors to manage the affairs of the company by the
Acts is complete. It includes not only those powers which are expressly stated
in the Acts but also all residual powers necessary for the management of the
company’s business and affairs.29 This is to be contrasted with the position in
Belize, Jamaica or St Christopher/Nevis where directors enjoy only those
management powers delegated to them by the shareholders.30
The management mandate and the unanimous shareholder

agreements
It is clear from the proviso to the provisions in the Acts in Anguilla, Antigua,
the Bahamas, Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago mandating directors to manage the business
of the company ‘subject to any unanimous shareholder agreement’,31 that
shareholders can, by unanimous shareholder agreement, modify the general
rule that the management of the business and affairs of the company is vested
in the directors and reorder the persons on whom the management of the
business of the company is placed.32 The proviso also means that shareholders
can validly restrict, in whole or in part, the powers of the directors of a
company to manage the business and affairs of that company through a
unanimous shareholder agreement.33
Shareholders may by virtue of a unanimous shareholder agreement assume
all the rights, powers and duties of directors to manage the business and affairs
of the company. Where this is done, the directors are relieved of their duties
and liabilities to the same extent that the shareholders have assumed these
rights. In other words, shareholders may by virtue of a unanimous shareholder
agreement oust the directors’ authority to manage. In the absence of a
unanimous shareholder agreement to the contrary, however, it is the directors
elected by the shareholders and not the shareholders themselves, who are
responsible for running the company.34 Indeed, a majority of shareholders,
even if they pass a resolution at a meeting, cannot dictate to directors.35
Management mandate and the articles of incorporation
Read in isolation, the wording of the provision under consideration suggests

that the directors’ authority to manage the company is subject only to a
unanimous shareholders’ agreement. A different conclusion is drawn,
however, if this provision is read in light of another section in the Acts in
Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St
Lucia and St Vincent, which states as follows:36
If the powers of the directors of a company to manage the business and affairs of the company are in
whole or in part restricted by the articles of the company, the directors have all the rights, powers and
duties of the directors to the extent that the articles do not restrict those powers; but the directors are
thereby relieved of their duties and liabilities to the extent that the articles restrict their powers.
This section implies that the directors’ power to manage the company is
subject not only to a unanimous shareholders’ agreement, but also to
provisions in the articles of the company restricting the powers of directors. In
fact, the Trinidad and Tobago Act is quite explicit on this point. It states that
the articles of a company may, in whole or in part, restrict the powers of the
directors to manage the business and affairs of the company.37
Directors’ role in relation to bye-laws

Companies are required to have bye-laws under the Companies Acts in
Lucia, St Vincent and Trinidad and Tobago.38 The bye-laws of a company are
the permanent, continuing rules which regulate its affairs or internal
workings.39 Thus matters such as the manner of calling and holding meetings
of shareholders, the procedures at shareholders’ meetings, the manner of
calling meetings of the board of directors, the procedure at board meetings,
the use of corporate seal, the function and duties of various officers, the
execution of instruments on behalf of the company and like matters are all
dealt with in the bye-laws of the company. In the Jamaican Act, these
regulations are contained in the company’s articles of incorporation,40 and in
the Bahamas,41 Belize42 and St Christopher/Nevis Acts,43 in the articles of
association.
Under the Acts in Anguilla, Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, important
statutory powers reside in the directors of a company to make, amend, or
repeal any bye-laws for the regulation of the business or affairs of the
company. These powers are bestowed on directors in a provision which states
that, unless the articles, bye-laws or a unanimous shareholder agreement
otherwise provide, the directors of a company may by resolution make,
amend, or repeal any bye-laws for the regulation of the business or affairs of
the company.44 Where directors exercise these powers, they must submit the
bye-law, amendment or repeal of the bye-law made in pursuance of the
exercise of these powers to the next meeting of the shareholders and the
shareholders may by ordinary resolution confirm, amend or reject the bye-
law, amendment or repeal.45
A bye-law, or any amendment or repeal of a bye-law made by directors is
effective from the date of the resolution of the directors making, amending or
repealing the bye-law.46 The bye-law, amendment or repeal remains effective
until it is confirmed, amended or rejected by the shareholders.47 If the bye-law,
amendment or repeal is confirmed or amended by the shareholders, it
continues in effect in the form in which it was confirmed or amended.48
When a bye-law, or an amendment or repeal of a bye-law, is not submitted
to the next meeting of the shareholders as required by the Acts, or is rejected
by the shareholders, the byelaw, amendment or repeal ceases to be effective.49
Any subsequent resolution of the directors to make, amend or repeal a bye-
law having substantially the same purpose or effect as a bye-law, or
amendment or repeal of a bye-law which was rejected by the shareholders, is
ineffective until the resolution is confirmed, with or without amendment, by
the shareholders.50
These provisions recognise that whereas management power is best vested
in the directors, the power to control the internal government of the company
to the exclusion of the shareholders is not. Consequently, the provisions insist
on shareholder sanction of bye-law changes proposed by directors. This means
that while expedience may necessitate the directors making, amending or
repealing a bye-law, the ultimate authority for the force of the bye-law is the
meeting of the shareholders.
The position in the Bahamas, Belize, Jamaica and St Christopher/Nevis is
different. In these territories, directors have no express statutory power to
alter or add to the internal regulations of a company. Since these regulations
are contained in the articles of incorporation ( Jamaica) and articles of
association (the Bahamas, Belize and St Christopher/Nevis), the regulations
can only be altered or added to by special resolution (in the case of Belize,51
Jamaica52 and St Christopher/Nevis53) or resolution (in the case of the
Bahamas54) at a meeting of shareholders.
Delegation of directors’ powers

Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago contain
provisions authorising the directors of a company to appoint from their
number a managing director or a committee of directors and to delegate to
the managing director or committee of directors any of the powers of the
directors.55 However, there are certain statutorily specified powers which the
directors cannot delegate.56 These include (i) submitting to the shareholders
any question or matter requiring the approval of the shareholders;57 (ii) filling
a vacancy among the directors or in the office of auditor;58 (iii) issuing shares
except in the manner and on the terms authorised by the director;59 (iv)
declaring a dividend;60 (v) purchasing, redeeming or otherwise acquiring
shares issued by the company;61 (vi) paying a commission to any person in
consideration of that person purchasing or agreeing to purchase shares of the
company;62 (vii) approving a management proxy circular;63 (viii) approving
any financial statements required under the Act;64 and (ix) adopting, amending
or repealing bye-laws.65
These powers, which have been statutorily specified as being beyond
delegation, are all significant corporate powers regarded as belonging to the
shareholders in the first place, and which shareholders may be regarded as
having delegated to directors. Directors cannot delegate these powers which
themselves are exercisable by the directors only because of what amounts to a
delegation to directors by shareholders. Broadly speaking, then, the powers
which directors may delegate to a managing director or committee of
directors under the Acts in Anguilla, Antigua, the Bahamas, Barbados,
Dominica, Grenada, Guyana, Montserrat, St Lucia, St Vincent and Trinidad and
Tobago are limited to certain executive and administrative powers.
In Belize, Jamaica and St Christopher/Nevis, the directors can delegate any
of their powers as they think fit. As has been seen, directors’ powers of
management derive from the articles of incorporation ( Jamaica) and
association (Belize and St Christopher/Nevis). These powers are therefore
exercisable by directors because directors have a contractual right to do so and
not because of any delegation by shareholders. There is no danger of a
violation of the delegatus non potest delegare rule, and consequently, no
reason in theory why directors cannot delegate any of their management
powers.
Number of Directors
Setting the number
Except in Belize, Commonwealth Caribbean Companies Acts, concerned with

mandating an appropriate management structure for the different companies
recognised in the Acts, contain stipulations as to the minimum number of
directors which a company must have.66 In this respect, the Acts require that
every company must have at least one director.67 A public company, on the
other hand, must have no fewer than three directors, at least two of whom
must not be officers or employees of the company or of its affiliates.68 These
stipulations allow for a simple company whose shares are owned by one
person to have a board of directors consisting of one director, but recognise
the desirability of a large, complex company offering shares to the public at
large having a board of more than one director.
In Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana, Jamaica,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago, the company is
under an obligation to set out the number of directors in the articles of
incorporation.69 If the articles do not provide for cumulative voting, the
company is at liberty to specify either a fixed number of directors or a
minimum and maximum number of directors.70 Where, however, the articles
of incorporation provide for cumulative voting, the articles must state a fixed
number and not a minimum or maximum number of directors.71
Alteration of number
Under the Companies Acts in the Commonwealth Caribbean, except in Belize,

the number of directors of a company set out in the articles may be altered by
the shareholders of the company amending the articles to increase or to
decrease the number of directors or the minimum or maximum number of
directors.72 But a decrease cannot have the effect of shortening the term of an
incumbent director.73
In Anguilla, Antigua, Barbados, Dominica, Grenada, St Lucia, St Vincent
and Trinidad and Tobago, special rules apply to a decrease in the number of
directors where the articles provide for cumulative voting.74 In such a case, the
number of directors required by the articles may not be decreased if the votes
cast against the motion to decrease would be sufficient to elect a director and
those votes could be voted cumulatively at an election at which the same total
number of votes cast and the number of directors required by the articles were
then being elected.75 These rules are intended to protect the integrity of the
provisions for removing directors while at the same time to preserve the
objective of cumulative voting which is to permit the participation in the
decision making of the company by shareholders with relatively small
amounts of shares.
Disqualification of Directors
Minors and persons of unsound mind
Except in Belize and Jamaica, it is expressly decreed in Commonwealth

Caribbean Companies Acts that an individual who is prohibited under the
Acts from forming or joining in the formation of a company is disqualified
from serving as a director of a company.76 As has been seen, the persons who
are prohibited from forming or joining in the formation of a company include
an individual who is under the age of eighteen and an individual who is of
unsound mind and has been so found by a tribunal.77 The justification for the
disqualification of minors is that the law in respect of minors’ contracts could
place the board of directors in a difficult position. In addition to the nature of
the illness of a person of unsound mind, such a person suffers similar legal
disabilities to a minor, in the law of contract.
Disqualification of minors and persons of unsound mind is not dealt with in
the Companies Acts in Belize and Jamaica. Disqualification of persons of
unsound mind is dealt with in Belize, in Article 77 of Table A in the First
Schedule to the Belizean Act, and in Jamaica, in Article 94 of Table A to the
Jamaican Act. These articles stipulate that the office of director shall be
vacated if the director ‘becomes of unsound mind’. In the meantime, there is
no mention in Table A of the disqualification of minors. It is submitted that
minors are to be treated as disqualified under the general law on minors’
contracts.
Bankrupt persons
It has just been seen that, except in Belize and Jamaica, an individual who is
prohibited under regional Companies Acts from forming or joining in the
formation of a company is disqualified from serving as a director of a
company. An individual who has the status of a bankrupt is such an individual
and as such is disqualified from serving as a director.
In Belize and Jamaica, a bankrupt person is not expressly disqualified by the
Companies Act from serving as a director. In Jamaica, however,
disqualification is to be implied from the fact that the Jamaica Companies Act
makes it a criminal offence for an undischarged bankrupt to act as a director
of, or directly or indirectly, to take part in, or be concerned in the
management, of any company.78 However, it appears on the wording of that
Act that disqualification is not absolute since the bankrupt may apply to the
court which adjudged him bankrupt to permit him to act as a director while
still a bankrupt.79
Court disqualified directors
Another person who is statutorily disqualified from serving as a director of a

company in the Commonwealth Caribbean, except in Belize, is a court
disqualified director.80 Court disqualification occurs where the court, in
exercise of its jurisdiction to order that, without prior leave of the court, a
person who is made to appear to the court to be unfit to be concerned in the
management of a public company, orders a person not to be a director of the
company, or, in anyway, directly or indirectly, to be concerned in the
management of the company.81 Such an order may only be made on the
application of the Registrar.82 The order must be for such period, beginning
with the date of the order, or, if the person is undergoing, or is to undergo a
term of imprisonment and the court so directs, with the date on which he
completes that term of imprisonment or is otherwise released from prison.83
The order may not specify a disqualification period exceeding five years.84
This disqualification appears to be designed to forestall those who have
seriously abused the corporate status or breached their duties from serving as
directors. Nevertheless, strict guidelines must be followed in declaring a
person a court disqualified director. First, in determining whether or not to
make an order, the court must have regard to all the circumstances that it
considers relevant, including any previous convictions of the person in the
country concerned or elsewhere for an offence involving fraud or dishonesty
or in connection with the promotion, formation or management of any body
corporate.85 Second, before making an application, the Registrar must give the
person against whom the order is being sought not less than ten days’ notice
of the intention to make the application.86 Finally, on the hearing of the
application by the Registrar or an application by the person for leave to be
concerned in the management of a public company, the Registrar and any
person concerned with the application may appear and call attention to any
matters that are relevant, and may give evidence, call witnesses and be
represented by an attorney-at-law.87
Person persistently in default of the Companies Act
In Jamaica alone, a person may also be disqualified by a court order from

serving as a director of a company where it appears to the court that that
person has been persistently in default in relation to provisions of the
Companies Act requiring any return, account or other document to be filed,
delivered or sent, or notice of any matter to be given, to the Registrar.88 The
fact that a person is persistently in default may be conclusively proved by
showing that, in the five years ending with the date of the application to the
court, the person has been adjudged guilty, whether or not on the same
occasion, of three or more defaults.89 A person is to be treated as being
adjudged guilty of default in relation to a provision of the Companies Act if he
is convicted, whether on indictment or summarily, of an offence consisting in a
contravention of or failure on his part to comply with that provision.90 A
person may also be treated as being adjudged guilty of default if a default
order is made against him under any provision of the Companies Act
requiring the submission of returns, notices or other documents to the
Registrar, in respect of any such contravention of or failure on his part to
comply with the provision.91 A disqualification order for persistent breaches of
the Companies Act may be made for a period not exceeding five years.92
Company as corporate director
At common law, it appears to be the law that either a natural person or a

company may be a director. This notwithstanding, and it appears for the
avoidance of doubt, the Barbados Companies Act contains an express
provision declaring that a company may be a director of another company.93
But it is to be noted that, under this Act, a company may not have as the sole
director of that company a corporation the sole director of which is secretary
to the company.94 In St Christopher/Nevis, a body corporate, which includes a
company, is expressly disqualified from being a director.95
Share Qualification of Directors
In classical economic theory, enlightened self-interest is said to operate to
drive a director who has a personal financial stake in the equity of a company
to devote his best endeavours in the company’s service, if only to preserve the
value of his own investment. This is the rationale behind requiring a share
qualification in the Companies Acts in the Commonwealth Caribbean.
Commonwealth Caribbean Companies Acts have, however, recognised
that, unless the share qualification is substantial, it is meaningless and that it is
statutorily difficult to prescribe in the abstract what will amount to a
substantial share qualification. Consequently, all the Acts, except the Act in St
Christopher/Nevis, either expressly96 or by necessary implication,97 allow a
company to stipulate for a share qualification in its articles. These Acts, except
the Act in Belize, provide that a director of a company need not hold shares
issued by that company if the articles do not so stipulate. Despite the fact that
these Acts allow the articles to stipulate for a share qualification, only the
Belizean,98 Guyanese99 and Jamaican100 Acts contain any provisions regulating
share qualification where a share qualification is required by the articles.
The Acts in Belize, Guyana and Jamaica, first of all, impose a duty on every
director who is by the bye-laws or articles of the company required to hold a
specified share qualification, and who is not already qualified, to obtain his
qualification within two months after his appointment, or such shorter time as
may be fixed by the bye-laws or articles, as the case may be.101 Secondly, the
Jamaican Act stipulates that the bearer of a share warrant is not to be deemed
to be the holder of the share specified in the warrant for purposes of share
qualifications.102 Thirdly, all three Acts decree that the office of a director of a
company is vacated if the director does not within two months from the date
of his appointment, or within such shorter time as may be fixed by the articles,
obtain his qualification, or if, after the expiration of that period or shorter
time, he ceases a any time to hold his qualification.103 Fourthly, the Guyanese
and Jamaican Acts provide that a person vacating office for any of the
foregoing reasons is incapable of being reappointed director of a company
until he has obtained his qualification.104 Fifthly, the Belizean and Jamaican
Acts lay down that if after the expiration of the period or shorter time any
unqualified person acts as the director of the company, he is liable to a fine not
exceeding 25 dollars in Belize and 2,000 dollars in Jamaica for every day
between the expiration of the period or shorter time or the day on which he
ceased to qualified, as the case may be, and the last day on which it is proved
that he acted as director.105 Finally, the Guyanese Act decrees that, unless the
bye-laws otherwise provide, the qualification of any director of the company
must be held by him solely and not as one of several joint holders.106
Appointment and Election of Directors
Appointment of first directors
Except in Belize and Jamaica, express provision is made in regional

Companies Acts for the appointment of first directors. These Acts provide that
at the time of sending articles of incorporation of the company to the
Registrar, the incorporators must send to the Registrar, in the prescribed form,
a notice (statement under the Guyanese Act) of the names of the directors of
the company.107 The directors named in the notice hold office as a director of
the company from the issue of the certificate of incorporation of the company
until the first meeting of the shareholders.108 Thereafter, as a general rule, the
power to appoint directors is vested in the meeting of shareholders.109
It is to be noted that under the Guyanese Act, the statement required to be
sent to the Registrar must be signed by or on behalf of the subscribers of the
articles of incorporation. The statement must also contain a consent signed by
the person or each of the persons named in it as a director.110 It is to be noted
also that the Guyanese Act allows provision to be made in the articles with
respect to the appointment of the first directors.111 Be that as it may, any
provision in the articles on the manner of the appointment of directors which
conflicts with the manner provided for in the Act is void.112
In Belize and Jamaica, the manner of the appointment of the first directors
is determined entirely by the provisions of the articles of association (Belize)
or incorporation ( Jamaica). Article 68 of Table A in Belize and Article 81 of
Table A in Jamaica stipulate that the number and names of the first directors
must be determined in writing by the subscribers of the articles or a majority
of the subscribers.
Consent to appointment
The Jamaican Act, but not the other Acts in the Commonwealth Caribbean,
contains an elaborate provision on the necessity for a director’s consent to his
appointment in the case of a public company.113 That Act provides that a
person shall not be capable of being appointed a director of a company by the
articles unless, before the registration of the articles, he has, by himself or by
his agent, authorised in writing and signed and delivered to the Registrar for
registration a signed consent in writing to act as a director.114 In addition, he
must have either (i) signed the articles for a number of shares not less than his
qualification, if any; or (ii) have taken from the company and paid or agreed to
pay for his qualification shares, if any; or (iii) have signed and delivered to the
Registrar for registration an undertaking in writing to take from the company
and pay for his qualification shares, if any; or (iv) have made and delivered to
the Registrar for registration a statutory declaration to the effect that a
number of shares, not less than his qualification, if any, are registered in his
name.115 Where a person has signed and delivered an undertaking to pay for
his qualification shares, he must, as regards those shares, be in the same
position as if he had signed the articles for that number of shares.116
These same stipulations apply to a person being named as a director or
proposed director of a company in a prospectus issued by or on behalf of a
company, or in a statement in lieu of prospectus delivered to the Registrar by
or on behalf of a company.117
To ensure compliance with the consent provisions, the Act requires that, on
the application for registration of the articles of a company, the applicant
deliver to the Registrar a list of the persons who have consented to be the
directors of the company. If this list contains the name of any person who has
not so consented, the applicant becomes liable to a fine not exceeding 100,000
dollars.118
Election of subsequent directors

Source of applicable rules
The exercise of the power to elect directors is statutorily regulated in Anguilla,

Lucia, St Vincent and Trinidad and Tobago.119 In Belize, Jamaica and St
Christopher/Nevis, the power to elect directors is regulated by the provisions
of the articles of incorporation ( Jamaica) or the memorandum or articles of
association (Belize and St Christopher/Nevis).
The Companies Acts in Belize, Jamaica and St Christopher/Nevis do not
impose any restrictions on what the articles of incorporation or the
memorandum or articles of association may provide for in respect the power
to elect directors. Consequently, questions such as who has the right to elect
directors, the manner in which nominations may be made, the method of
electing directors, and the election or nomination of directors to fill vacancies
must all be answered by reference to the articles of incorporation or the
memorandum or articles of association. If these documents are silent on any
matter relating to the election of directors Table A (Belize and Jamaica) or
Standard Table A (St Christopher/Nevis) is applicable.
Shareholders’ statutory right to elect directors
In Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada, Guyana,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, shareholders are
statutorily authorised to elect directors to hold office. This must be done by
ordinary resolution at the first meeting of the company and, at each following
annual meeting at which an election of directors is required.120
Under the Acts in these territories where shareholders are statutorily
authorised to elect directors, other than in Guyana, four important statutory
rules apply to the election of directors. The first is that it is not necessary that
all the directors elected at a meeting of shareholders hold office for the same
term.121 The second is that, if a director is not elected for an expressly stated
term, he ceases to hold office at the close of the first annual meeting of
shareholders following his election.122 The third is that, if directors are not
elected at a meeting of shareholders, the incumbent directors continue in
office until their successors are elected.123 The fourth and final is that, if a
meeting of shareholders fails by reason of the disqualification, incapacity or
death of any candidates to elect the number of the minimum number of
directors required by the articles, the directors elected at the meeting may
exercise all the powers of the directors as if the number of directors so elected
constituted a quorum.124
It is also important to note that under all of these Acts, including the
Guyanese Act, corporate stakeholders, other than shareholders, may elect
directors to hold office. This is possible because of a statutory provision which
permits the articles or a unanimous shareholder agreement to provide for the
election or appointment of directors by the creditors or employees of the
company or by any classes of these creditors or employees.125 The tenure of
directors so elected or appointed is for terms expiring not later than the close
of the third annual meeting of the shareholders following the election.126
Nominations for directors
As has just been seen, under the Acts in Antigua, Barbados, Dominica,
Grenada, Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago,
the shareholders of a company have an express statutory right to elect the
directors of that company in general meeting. To afford shareholders an
opportunity to place their nominations before the general meeting, the Acts in
these territories establish a system whereby shareholders holding not less than
5 per cent of the voting shares of the company may submit to the company a
proposal including nominations for the election of directors.127
Under these Acts, if a nomination is submitted at least ninety days before
the anniversary of the last annual meeting of shareholders,128 a company that
solicits proxies must include the nomination in or attached to the management
proxy circular, together with any supporting statement of not more than 200
words.129 It is to be noted that because shareholders’ nominations may be
included in the proxy circular does not preclude nominations being made at
the meeting of shareholders.130
The significance of these provisions is best understood in light of the
possibility of the use of their control of the proxy machinery by the existing
directors of large companies to keep themselves in office and to name their
successors. Getz observes that, without similar provisions in the Canadian
Business Corporations Act, shareholders who wish to make nominations for
election:
are forced to resort to a counter-solicitation [of proxies], in cases in which this is appropriate, or to use
whatever rights they may have to nominate from the floor. The former is likely to be costly and
cumbersome for most shareholders. The latter is bound to be otiose since … management’s use of the
proxy machinery will have effectively procured the casting of most of the relevant votes.131
Method of election of directors
As has just been seen, directors are elected at an annual meeting of

shareholders by a vote of the holders of a majority of shares who are present
and entitled to vote. However, the exact mechanism for electing directors
differs from company to company. The most important difference is whether
or not shares are to be voted non-cumulatively or cumulatively.
Non-cumulative voting

Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago contain a
provision stipulating in effect that where the articles do not require cumulative
voting, directors may be elected by ordinary resolution at a general meeting
of shareholders.132 The procedure which must be followed under these Acts is
that voting must be by show of hands except when a ballot is demanded by a
shareholder or proxy holder entitled to vote at the meeting.133 The demand for
a ballot may be made either before or after a vote by show of hands.134
Where voting is by show of hands, each shareholder or proxy holder has
one vote.135 But, where a poll is demanded, a shareholder or proxy holder has
one vote for every share held.136 It is obvious that the right to demand a ballot
and thereby trigger the ‘one vote for every share’ rule has the potential of
freezing out participation by minority shareholders in the election of corporate
directors since, in such a case, the number of votes depend on the number of
shares held.
Cumulative voting
To avoid the drawbacks of ballot voting and to permit participation by

shareholders with relatively small amounts of shares in the election of
corporate directors, a company is permitted, but not mandated, to provide in
its articles for cumulative voting. The Acts in Anguilla, Antigua, Barbados,
Dominica, Grenada, St Lucia, St Vincent and Trinidad and Tobago have
established a set of rules designed to facilitate minority shareholding
participation in the election of directors which are to apply where the articles
of a company provide for cumulative voting.137
The key to cumulative voting as a method of procuring minority
shareholder participation is tied up in the first two rules set out in the Acts.
The first rule is that articles which provide for cumulative voting must require
a fixed number, and not a minimum and maximum number, of directors.138
The second rule is that each shareholder who is entitled to vote at an election
of directors has the right to cast a number of votes equal to the number of
votes attached to the shares held by him, multiplied by the number of
directors to be elected.139 The operation of the first rule and the second rule
allows the total number of votes of each shareholder to be determined by
multiplying the number of shares owned by the number of directors to be
elected. Having made this determination, the shareholder may then cast all his
votes in favour of one candidate, or distribute them among the candidates in
any manner.140
The third rule is that a separate vote of the shareholders must be taken with
respect to each candidate nominated for director. This procedure may be
dispensed with where a resolution is passed unanimously permitting two or
more persons to be elected by a single resolution.141
The fourth rule covers the case where a shareholder votes for more than
one candidate without specifying the distribution of his votes among the
candidates. The rule here is that he will be treated as distributing his votes
equally among the candidates for whom he votes.142
The fifth rule deals with the situation where the number of candidates
nominated for director exceeds the number of positions to be filled. Here, the
rule is that the candidates who receive the least number of votes must be
eliminated until the number of candidates remaining equals the number of
positions to be filled.143
Filling directors’ vacancies
Where a casual vacancy occurs on the board of directors, then, under the Acts
in Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago, unless the articles
require such a vacancy to be filled by the shareholders, a quorum of directors
has statutory power to appoint some person to fill the vacancy.144 This power
is excluded in the case of a vacancy resulting from an increase in the number
or minimum number of directors, or from a failure to elect the number or
minimum number of directors required by the articles of the company.145
Where a vacancy occurs among the directors and there is no quorum of
directors, or if there has been a failure to elect the number or minimum
number of directors required by the articles, the directors then in office must
call a special meeting of shareholders to fill the vacancy.146 If these directors
fail to call a meeting, or, if there are no such directors remaining, the meeting
may be called by a shareholder.147
Where a vacancy occurs among directors elected exclusively by any class or
series of shares of a company, the remaining directors elected by that class or
series are statutorily authorised to fill the vacancy.148 This statutory
authorisation is excluded in the case of a vacancy resulting from an increase in
the number or minimum number of directors of that class or series, or from a
failure to elect the number or minimum number of directors for that class or
series.149 If there are no such remaining directors, any holder of shares of that
class or series may call a meeting of the holders thereof for the purpose of
filling the vacancy.150
The articles of a company may provide that a vacancy among directors be
filled only by a vote of the shareholders.151 The articles may also provide that,
in the case of a vacancy occurring among directors elected by a class or series
of shares, that vacancy may be filled only by a vote of the holders of shares of
that class or series.152
Directors who are appointed or elected to fill a vacancy hold office for the
unexpired term of his predecessor.153
Defective appointment or election of directors
All the Companies Acts in the Commonwealth Caribbean contain provisions

governing the contingency of defective appointments and their effect upon
transactions affected by such appointments. The provision in section 82 of the
Guyana Act is typical.154 It provides that:
An act of a director or officer is valid notwithstanding any irregularity in his election or appointment, or
any defect in his qualification.
This provision is to be strictly construed as meaning that the acts of a director

cannot under any circumstances be challenged on the basis of a defect in his
appointment or qualification. Thus in the Canadian case of Oliver v Elliot,155 it
was held that the acts validated by a provision in pari materia with section 82
of the Guyana Act included the appointment by directors who were
themselves invalidly appointed.
Tenure of directors
Term for which office is held
Term limits are statutorily imposed on directors in Commonwealth Caribbean

Companies Acts, except in Belize, Jamaica and St Christopher/Nevis. The term
limits Acts provide that directors are to be elected to hold office for a term
expiring not later than the close of the third annual meeting of shareholders of
the company following the election.156 If a director is not elected for an
expressly stated term, under all of these Acts, except the Guyanese Act, he
ceases to hold office at the close of the first annual meeting of shareholders
following his election.157
Staggered terms of office are permitted under the Acts in Anguilla, Antigua,
the Bahamas, Barbados, Dominica, Grenada, Montserrat, St Lucia, St Vincent
and Trinidad and Tobago. This conclusion is to be drawn from the provision in
those Acts which expressly state that it is not necessary that all the directors of
the company elected at a meeting of shareholders hold office for the same
term.158
As has already been seen, where a director is appointed to fill a vacancy his
tenure of office is for only the unexpired portion of the term of his
predecessor.159
Re-election of directors
There is no specific statutory provision in Commonwealth Caribbean

Companies Acts, except in the Guyanese Act, to the effect that directors
retiring from office at the end of their term are eligible for re-election. By the
same token, there is no statutory provision disqualifying such directors from
being re-elected. The absence of an express statutory prohibition is widely
interpreted in the region to mean that retiring directors are eligible for re-
election. It is to be noted that section 68 of the Act in Guyana contains
extensive provisions on the eligibility of the reappointment of retiring
directors.
Shareholder deadlock on election of director
Occasionally, the term of office of the incumbent directors may expire, and
shareholders may be deadlocked or cannot agree on who should be elected as
directors in place of the incumbent directors. Where this occur, under the Acts
in Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada, Montserrat,
St Lucia, St Vincent and Trinidad and Tobago, the incumbent directors
continue in office until their successors are elected.160
Directors ceasing to hold office
The circumstances in which a director ceases to hold office are governed by

the Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago. Under these Acts, a
director ceases to hold office when he dies, resigns, is removed from office or
becomes disqualified to serve as a director.161 It is to be noted that a
resignation of a director becomes effective at the time a written resignation is
sent to the company, or at the time specified in the resignation, whichever is
later.162
Remuneration of Directors
The rule at common law is that the mere holding of the office of director by
itself does not entitle a director to remuneration.163 This rule has been
modified in regional statutes which have specified a procedure through which
directors’ remuneration may be determined. Accordingly, there is statutory
provision in Commonwealth Caribbean Companies Acts, except in the
Belizean, Jamaican and St Christopher/Nevis Acts, for the directors of a
company, subject to the articles, the bye-laws, or any unanimous shareholder
agreement, to fix their own remuneration.164
Where directors’ remuneration is not appropriately fixed, a director may be
forced to seek to claim on a quantum meruit basis for services rendered and
accepted by the company165 or on the basis of an equitable allowance.166 The
courts, however, are slow to uphold such claims by directors.167
Removal of Directors
Shareholders’ power of removal
At common law, shareholders do not have any inherent right to remove a

director before his term of office expires.168 But, such a right is universally
recognised as necessary in modern corporate governance, and this is so
especially in large publicly held companies. Not surprisingly, therefore,
modern Commonwealth Caribbean Companies Acts, except the Belize and St
Christopher/Nevis Acts, expressly confer this power on shareholders.169
Under all the Acts conferring the power of removal on shareholders,
shareholders are empowered to remove any director from office by an
ordinary resolution at a special meeting.170 Under the Acts in Anguilla,
Antigua, Dominica, Grenada, Montserrat, St Lucia, St Vincent and Trinidad
and Tobago, shareholders are also empowered to remove a director elected
for a term exceeding one year and who is not up for re-election at an annual
general meeting by ordinary resolution at that meeting.171
Limitations on shareholders’ power of removal
Shareholders’ power to remove directors is subject to two qualifications under

Commonwealth Caribbean Companies Acts which confer on shareholders the
power to remove a director, except under the Jamaican Act. The first is that,
where a director has been elected by cumulative voting, he cannot be
removed from office if the votes cast against his removal would be sufficient
to elect him and those votes could be voted cumulatively at an election at
which the same total number of votes were cast and the number of directors
required by the articles were being elected.172 The second is that where the
holders of any class or series of shares of a company have an exclusive right to
elect one or more directors, a director so elected may only be removed by an
ordinary resolution at a meeting of the shareholders of that class or series of
shares.173
Filling vacancy on removal of a director
Where a vacancy is created by the removal of a director, it may be filled at the

meeting of shareholders at which the director is removed under the Acts in
Lucia, St Vincent and Trinidad and Tobago.174 If the vacancy is not so filled, it
may be filled by the directors in accordance with the general statutory
provision conferring power on directors to fill directorial vacancies.175 Under
the Jamaican Act, the vacancy may be filled at the meeting at which he is
removed or may be filled as a casual vacancy.176
Director’s right to state case to shareholders
Again, under the Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica,
Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, a director
who resigns, learns of a meeting of shareholders called for the purpose of
removing him from office, or learns of a meeting of directors or shareholders
at which another person is to be appointed or elected to fill the office of
director, whether because of his resignation or his term of office has expired or
is about to expire has a statutory right to state his case to shareholders.177
Where this happens, he remains entitled to receive notice of, and to attend and
be heard at, every meeting of shareholders.178 He also has the right to submit a
written statement to the company giving the reasons for his resignation or the
reasons why he opposes any proposed action or resolution.179
Where the director submits such a written statement, the company must
forthwith send a copy of the statement to the Registrar and to every
shareholder entitled to receive notice of shareholders’ meetings.180 Neither the
company nor any person acting on its behalf incurs any liability by reason
only of circulating a director’s statement.181
Removal of director under the Jamaican Act
Under the Jamaican Act, special notice is required of any resolution to remove
a director or to appoint somebody instead of a director so removed at the
meeting at which he is removed.182 On receipt of an intended removal
resolution, the company must forthwith send a copy of the resolution to the
director concerned, and the director, whether or not he is a member of the
company, is entitled to be heard on the resolution at the meeting.183
Where notice is given of a removal resolution, the director concerned may
make representations in writing, not exceeding a reasonable length, with
respect to the resolution to the company and request their notification to
members of the company.184 Unless the representations are received by it too
late for it to do so, the company must, in a notice of the resolution given to its
members, state the fact of the representations having been made.185 The
company must also send a copy of the representations to all its members to
whom notice of the meeting is sent, and this is whether before or after receipt
of the representations by the company.186 If a copy of the representations is
not sent by the company either because it was received too late or because of
the company’s default, the director may, without prejudice to his right to be
heard orally, require that the representations be read out at the meeting.187
It is to be noted, however, that copies of the representations need not be
sent out nor read out at the meeting if, on the application either of the
company or of any other person who claims to be aggrieved, the court is
satisfied that the rights conferred on a director in respect of his removal from
office are being abused to secure needless publicity for defamatory matter. On
such an application, the court may order the company’s costs to be paid in
whole or part by the director concerned whether or not he is a party to the
application.188
Directors’ Meetings
Organisational meeting
The statutes on companies in Anguilla, Antigua, the Bahamas, Barbados,

establish a legal mechanism, called an organisatonal meeting, which enables
directors expeditiously to attend to matters preliminary to the operations of
newly formed companies. The organisational meeting is a novel procedure in
Commonwealth Caribbean company law and is based on the Canada Business
Corporations Act. According to the Federal Proposals on which the Canadian
Act itself is based, the advantage of the new procedure is that:189
it obviates most of the elaborate and meaningless ritual, especially the fictitious series of organisation
meetings of first directors and shareholders that characterises organisation procedure under the present
Act.
Section 67 of the Trinidad and Tobago Act which provides for organisational
meetings is typical of the provision in the other Acts.190 This section provides
that, after the issue of the certificate of incorporation, a meeting of the
directors of the company must be held at which the directors may make bye-
laws, adopt forms of security certificates and corporate records, authorise the
issue of shares, appoint officers, appoint the auditor to hold office until the first
annual meeting of shareholders, make banking arrangements and transact any
other business.191 It is to be noted that under the Anguillan Act, the directors
are not empowered to authorise the issue of shares. Instead, it is provided that
the directors must issue at least one share or else they must pass a resolution
to dissolve the company.192
The organisational meeting may be called by either an incorporator or
director by giving by post not less than seven days’ notice of the meeting to
each director and stating in the notice the time and place of the meeting.193
Regular directors’ meetings
Place and notice

Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago specify
that, unless the articles or bye-laws otherwise provide, the directors may meet
at any place, and upon such notice as the bye-laws may require.194 Similarly,
these Acts, probably reflecting the common law, expressly declare that, unless
the bye-laws provide otherwise, a notice of meeting need not state the
business to be transacted at the meeting.195 Where, however, the business to be
transacted at the meeting includes any matter which because of its corporate
importance may not be delegated by the board of directors to a managing
director or committee of directors, notice must be given of that matter.196 The
obvious legislative intent here is to ensure that directors are notified of and
can prepare for matters of particular corporate importance.
It appears from the English Court of Appeal case of Young v Ladies’
Imperial Club Ltd197 that the rule at common law is that notice of a meeting of
directors may not be waived. This rule has been reversed by a provision in
regional statutes similar to section 79(2) of the St Lucian Act, which reads as
follows:198
A director may, in any manner, waive a notice of a meeting of directors; and attendance of a director at a
meeting of directors is a waiver of notice of the meeting by the director except when he attended the
meeting for the express purpose of objecting to the transaction of any business on the grounds that the
meeting is not lawfully called.
This provision not only permits waiver of notice, but also deems a director’s
attendance at a meeting waiver of notice unless the express purpose of his
attendance is to object to the transaction of business at the meeting on the
grounds that the meeting is not lawfully called. In any case, notice of an
adjourned meeting of directors need not be given if the time and place of the
adjourned meeting is announced at the original meeting.199
Proceedings at directors’ meetings

Montserrat, St Lucia, St Vincent and Trinidad and Tobago include provisions
containing rules intended to govern directors’ meetings. According to these
Acts, these rules apply ‘unless the articles and bye-laws of a company
otherwise provide’ and are ‘subject to the articles or bye-laws’.200 Clearly then,
these statutes contemplate that companies may regulate the proceedings at
directors’ meetings in their articles and bye-laws. In the absence of any such
regulations, three statutorily specified rules apply.
Quorum at directors’ meetings
The first of these rules relates to a quorum at a directors’ meeting. The rule
here is that a quorum at a directors’ meeting consists of a majority of the
number of directors or minimum number of directors required by the
articles.201 On this matter of quorum rules, it is worth noting that,
notwithstanding any vacancy among the directors, a quorum of directors may
exercise all the powers of the directors.202
One director boards
The second rule relates to one director boards. In Barbados and Guyana, the
rule is simply that where a company has only one director, that director may
constitute a meeting.203 In Anguilla, the rule is stated differently. It is that
where a company has only one director, that director present in person or by
proxy constitutes a quorum at a meeting of directors.204 If the director takes
any decision that takes effect as a resolution, he must provide the company
with a written record of the resolution. In the Bahamas, because the minimum
number of directors which a company must have is two,205 the rule is that
where a private company has only two directors those directors may
constitute a meeting.206 The Acts in the other territories are silent on this rule.
Telephone participation in directors’ meetings
The third and final rule represents a modern innovation which allows
telephone participation in directors’ meetings. The rule here is, in all territories
except Belize, that subject to the company’s bye-laws, a director may, if all the
directors of the company give their consent, participate in a meeting of
directors of a company or of a committee of the directors by means of such
telephone or other means of communication facilities as permit persons
participating in the meeting to hear each other.207 A director participating in
such a meeting is deemed to be present at the meeting.208
Alternative to directors’ meetings
The English Court of Appeal decision of Re George Newman & Co209 firmly
laid down that the business of a company could be transacted only at properly
constituted directors’ meetings and that decisions made by any other
procedure would not bind the company. This rule has been reversed by
regional statutes, except in Belize, Jamaica and St Christopher/Nevis. The
reason for the reversal is that, firstly, even though the rule may be justified as
‘a logical conclusion from the corporate entity principle’,210 it is unnecessarily
restrictive and that, secondly, ‘the affairs of a company can be managed
satisfactorily without directors being required in each instance to meet
personally for decision making’.211
The provisions of the Antigua and Barbuda Act are typical of the provision
found in the Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica,
Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago. Section
84(1) of that Act specifies that a resolution in writing signed by all the
directors entitled to vote on that resolution at a meeting of directors or
committee of directors is as valid as if it had been passed at a meeting of
directors or a committee of directors.212 Section 84 of the Act places only two
restrictions on the use of resolutions in writing. The first, in section 84(1)(b), is
that the resolution must satisfy all the requirements of the Act relating to
meetings of directors or committees of directors.213 The second, in section
84(2), is that a copy of the resolution in writing must be kept with the minutes
of the proceedings of the directors or committee of directors.214
One noteworthy aspect of the regional provisions is that the resolution in
writing procedure is not made subject to the articles or bye-laws. This appears
to argue for the conclusion that the resolution in writing procedure cannot be
qualified or removed by stipulations in the articles or bye-laws.
Other officers
Overview
As is apparent from the foregoing, the responsibility for the management of a

company is firmly vested in the directors by company legislation in the
Commonwealth Caribbean. At the same time, this legislation recognises that
many of the administrative and executive tasks involved in management can
only be effectively performed by delegation to officers acting under the
supervision of the directors. Accordingly, directors are given considerable
latitude in this legislation in relation to officers of companies. Before
proceeding further, it may be useful to examine what is understood by the
expression ‘officer’.
Meaning of ‘officer’
The term ‘officer’, is statutorily defined in the general definition section in all
the Acts, except in Belize.215 In turn, the definition found in the Barbados Act
is typical of the definition found in these Acts, except in Jamaica and St
Christopher/Nevis. This definition reads as follows:
‘officer’ in relation to a body corporate means
(i) the chairman, deputy chairman, president, or vice president of the board of directors;
(ii) the managing director, the general manager, comptroller, the secretary or the treasurer; or
(iii) any other person who performs for the body corporate functions similar to those normally
performed by the holder of any office specified in sub-paragraph (i) and (ii).
In Jamaica, ‘officer’ is defined as, ‘in relation to a body corporate’, including ‘a

director, manager or secretary’ and in St Christopher/Nevis, as meaning ‘a
director or liquidator’.
Appointment and qualifications of officers
Despite the definition of officers in the Acts, there is no statutory requirement

that a company must have any particular office except a company secretary.
On the other hand, directors of a company are expressly empowered under
the Acts in Antigua, the Bahamas, Dominica, Grenada, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago, subject to the articles or bye-laws or any
unanimous shareholder agreement, to designate the offices of the company.216
Having designated offices, directors may appoint persons to fill these offices.217
There are no special qualification requirements for appointment of officers
generally. The only express statutory specification is in Acts in Antigua, the
Bahamas, Dominica, Grenada, Montserrat, St Lucia, St Vincent and Trinidad
and Tobago, where it is provided that the person so appointed must be of ‘full
capacity’.218 Being a director is not a disqualification from being appointed to
any office of the company and two or more offices may be held by the same
person.219
As is the case with a director, any act of an officer is valid, notwithstanding
any irregularity in his appointment or election, or any defect in his
qualification.220
Duties of officers
Directors have the authority under the Acts for specifying the duties of officers
of the company.221 Directors may also delegate to company officers powers to
manage the business and affairs of the company.222 It bears repeating here that
the powers which directors may delegate are those that involve administrative
and executive functions. Indeed all of the Acts forbid the delegation by
directors to officers of core corporate functions.223
The secretary of the company
Secretary of companies generally
The only officer, other than the director, for which express provision is made
under the Companies Acts in the Commonwealth Caribbean, except in the
Bahamas and Belize, is the company secretary.224 Companies are required to
have a company secretary, and may have one or more assistant secretaries,
under all the Acts with provisions on company secretaries, except under the
Acts in Anguilla, Barbados and Guyana.225 In fact, a company which carries on
business for more than one month without appointing a company secretary is
guilty of an offence under the Acts in Antigua, Dominica, Grenada,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago.226
If the office of company secretary is vacant, or if for any other reason the
secretary is not capable of acting, anything required to be done by the
secretary may be done by the assistant secretary.227 If there is no assistant
secretary capable of so acting, the directors of the company may authorise any
officer of the company to so act generally or specially.228
Secretary of a public company

Under the Acts which mandate the appointment of a company secretary, and
in Anguilla, Barbados and Guyana where a company chooses to have a
company secretary, he or she must be appointed by the directors.229 In making
such an appointment, the directors must take all reasonable steps to ensure
that the secretary or each assistant secretary of the company is a person who
appears to the directors to have the requisite knowledge and experience to
discharge the functions of the secretary of a public company.230
Except under the Act in Jamaica, that person must fall within one of five
statutorily specified categories.231 These are: (i) a person who held the office of
secretary, assistant secretary or deputy secretary of a public company,232 (ii)
except in St Christopher/Nevis, a person who, for at least three years of the
five years immediately preceding his appointment as secretary, held the office
of a public company,233 (iii) a person who is a member in good standing of a
named institute of accountants,234 (iv) a person who is an attorney at law,235 or
(v) a person who, by virtue of his holding or having held any other position or
having been a member of any other body, appears to be capable of
discharging the functions of a secretary of a public company.236
A company as secretary
The Barbados Act states expressly that a company may be a secretary of

another company.237 This is subject to the qualification, however, that no
company can have as secretary to the company a corporation the sole director
of which is the sole director of the company.238 Even though the Acts in
Jamaica and St Christopher/Nevis do not expressly provide that a company
may be a secretary of a company, they contain the qualification on a company
the sole director of which is the sole director of the company being a secretary
of a company.239 The other Acts are silent on the question of a company acting
as a corporate secretary.
Conclusion
It is undoubted that directors play a central role in relation to directing the
management of the business and affairs of companies in Commonwealth
Caribbean company law theory and practice. What has emerged very clearly
from this chapter is that the rules governing directors’ ability to perform this
critical role are by and large statute-based in Anguilla, Antigua, the Bahamas,
Trinidad. In these territories, the Acts contain extensive provisions on
directors’ power and mandate to manage the company, the number and
qualifications of directors, the election, tenure, remuneration and removal of
directors, and the meetings and proceedings of directors. Some of the rules in
Jamaica are statute-based, but the overriding philosophy of the law in that
territory is to reserve to the shareholders the right to determine how the
company is to be managed. This philosophy is also at the bottom of the law in
Belize and St Christopher/Nevis, where there are only minimal statutory rules
on the directors’ role in the management of companies.
Notes
1 Ang s 59(1)(b); Ant s 58(1)(b); Bah s 79(b); B’dos s 58(1)(b); Dom s 58(1)(b); Gren s 58(1)(b); Guy s 59(1)(b);
2 Ang s 59(1)(a); Ant s 58(1)(a); Bah s 79(a); B’dos s 58(1)(a); Dom s 58(1)(a); Gren s 58(1)(a); Guy s 59(1)(a);
Mont s 58(1)(a); St L s 58(1)(a); St V s 58(1)(a); T’dad s 60(1)(a).
3 Ang s 1; Ant s 543(1)(f); Bah: no definition; Bel s 2(1) reads: ‘“director” includes any person occupying the
position of director by whatever name called’; B’dos s 448(i); Dom s 543(1)(f); Gren s 543(1)(f); Guy s 535(i);
J’ca s 2(1) reads: ‘“director” includes any person occupying the position of director by whatever name
called’; Mont s 543(1)(f); St C/N: s 2(1) reads: ‘“director” means a person who occupies the position of
director, by whatever name called’; St L s 543(1)(f); St V s 543(1)(f); T’dad s 4.
4 As to these see, e.g., Re Kaytech International plc, Secretary of State for Trade and Industry v Kaczer [1999]
2 BCLC 351 Eng CA.
5 Ang s 68(3); Ant s 66(3); Bah s 79(b); B’dos s 66(3); Dom s 66(3); Gren s 66(3); Guy s 68(1); Mont s 66(3); St L
s 66(3); St V s 66(3); T’dad s 71(3).
6 Ang s 83; Ant s 83; Bah s 99; B’dos s 81; Bel s 76; Dom s 83; Gren s 83; Guy s 82; J’ca s 176; Mont s 83; St
C/Ns 80; St L s 83; St V s 83; T’dad s 85.
7 As to this see below.
8 See Re Moorgate Metals Ltd [1995] 1 BCLC 503 Eng Ch D.
9 [2007] BCC 11 Eng Ch D.
10 [2007] BCC 11, 27 Eng Ch D.
11 See J’ca ss 194 and 195.
12 [2000] 2 BCLC 133 Eng CA.
13 [2000] 2 BCLC 133, 144–145 Eng CA.
14 [1994] 2 BCLC 180, 183 Eng Ch D.
15 [2000] 2 BCLC 133, 146 Eng CA.

16 Ang s 69(1); Ant s 70(1); B’dos s 66.1(1); Dom s 70(1); Gren s 70(1); Mont s 70(1); St L s 70(1); St V s 70(1);
T’dad s 72(1).
T’dad s 72(1).
T’dad s 72(2).
19 Ang s 59(1); Ant s 58(1); Bah s 79; B’dos s 58(1); Dom s 58(1); Gren s 58(1); Guy s 59(1); St L s 58(1); St V s
58(1); T’dad s 60(1).
20 In Bel and St C/N ‘articles of association’: see Bel s 10(1); St C/N s 6(1).
21 See Bel s 14(1); St C/N s 10(1).
22 See Bel s 10(1); St C/N s 6(1).
23 See Bel 1st Sch Table A Art 71; St C/N 1st Sch Standard Table A.
24 See Bel 1st Sch Table A Art 71; St C/N 1st Sch Standard Table A.
25 See Zeigel, ‘The New Look in Canadian Corporation Laws’ 2 Studies in Canadian Company Law (Zeigel
ed, 1973) 41: ‘these boards fulfill largely an advisory role and only exceptionally, in the case of a crisis, are
likely to intervene actively in the management of the corporation.’
26 Fraser (Trustee of) v MNR [1987] 1 CTC 2311.
27 Palmer, ‘Directors’ Powers and Duties’, 1 Studies in Canadian Company Law (Zeigel ed, 1973) 365–366.
28 [1925] Ch 407, 426–427.
29 Canadian Jorex Ltd v 477749 Alberta Ltd (1991) 4 BLR (2d) 174 Alta CA.
30 Smith v Paringa Mines Ltd [1906] 2 Ch 193.
58(1); T’dad s 60(1).
32 Duha Printers (Western) Ltd v The Queen [1998] 159 DLR (4th) 457 SCC.
33 820099 Ont Inc v Harold E Ballard Ltd (1991) 3 BLR (2d) 113 Ont Gen Div.
34 Peoples Department Stores Ltd (1992) Inc (sub nom Peoples Department Stores Inc (Trustees of) v Wise) [2004]
3 SCR 461 SCC.
35 Teck Corpn v Millar [1973] 33 DLR (3d) 288 BC SC.
37 T’dad s 65.
39 James v Beaver Consolidated Mines Ltd [1927] 3 DLR 163 Ont HC.
40 J’ca s 8(6).
41 Bah s 10(2).
42 Bel s 14(1).
43 St C/N s 6(1).
s 64(1); T’dad s 66(1).
s 64(2); T’dad s 66(2).
s 64(3); T’dad s 66(3).
s 64(3); T’dad s 66(3).
48 Ang s 63(3); Ant s 64(3); B’dos s 61(3); Dom s 64(3); Gren s 64(3); Guy s 62(3); St L s 64(3); St V s 64(3); T’dad
s 66(3).
s 66(4).
s 66(4).
51 Bel s 13.
52 J’ca s 10(1).
53 St C/N s 11(1)
54 Bah s 29(2).
55 Ang s 82(1); Ant s 82(1); Bah s 97; B’dos s 80(1); Dom s 82(1); Gren s 82(1); Guy s 81(1); Mont s 82(1); St L s
82(1); St V s 82(1); T’dad s 84(1).
56 Ang s 82(2); Ant s 82(2); Bah s 98; B’dos s 80(2); Dom s 82(2); Gren s 82(2); Guy s 81(2); Mont s 82(2); St L s
82(2); St V s 82(2); T’dad s 84(2).
58 Ang s 82(2)(b); Ant s 82(2)(b); Bah s 98(b); B’dos s 80(2)(b); Dom s 82(2)(b); Gren s 82(2)(b); Guy s 81(2)(b);
59 Ang s 82(2)(c); Ant s 82(2)(c); Bah s 98(c); B’dos s 80(2)(c); Dom s 82(2)(c); Gren s 82(2)(c); Guy s 81(2)(c);
Mont s 82(2)(c); St L s 82(2)(c); St V s 82(2)(c); T’dad s 84(2)(c).
60 Ang s 82(2)(d); Ant s 82(2)(d); Bah s 98(d); B’dos s 80(2)(d); Dom s 82(2)(d); Gren s 82(2)(d); Guy s 81(2)(d);
Mont s 82(2)(d); St L s 82(2)(d); St V s 82(2)(d); T’dad s 84(2)(d).
61 Ang s 82(2)(e); Ant s 82(2)(e); Bah s 98(e); B’dos s 80(2)(e); Dom s 82(2)(e); Gren s 82(2)(e); Guy s 81(2)(e);
Mont s 82(2)(e); St L s 82(2)(e); St V s 82(2)(e); T’dad s 84(2)(e).
62 Ang s 82(2)(f); Ant s 82(2)(f); Bah s 98(f); B’dos s 80(2)(f); Dom s 82(2)(f); Gren s 82(2)(f); Guy s 81(2)(f);
Mont s 82(2)(f); St L s 82(2)(f); St V s 82(2)(f); T’dad: no similar provision.
63 Ang no similar provision; Ant s 82(2)(g); Bah: no similar provision; B’dos s 80(2)(g); Dom s 82(2)(g); Gren s
82(2)(g); Guy s 81(2)(g); Mont s 82(2)(g); St L s 82(2)(g); St V s 82(2)(g); T’dad s 84(2)(f).
64 Ang s 82(2)(g); Ant s 82(2)(h); Bah s 98(g); B’dos s 80(2)(h); Dom s 82(2)(a); Gren s 82(2)(h); Guy s 81(2)(h);
Mont s 82(2)(h); St L s 82(2)(h); St V s 82(2)(h); T’dad s 84(2)(g).
65 Ang s 82(2)(h); Ant s 82(2)(i); Bah s 98(h); B’dos s 80(2)(i); Dom s 82(2)(i); Gren s 82(2)(i); Guy s 81(2)(i); Mont
s 82(2)(i); St L s 82(2)(i); St V s 82(2)(i); T’dad s 84(2)(h).
66 Ang s 60; Ant s 62(1); Bah s 80(1); B’dos s 59; Dom s 62(1); Gren s 62(1); Guy s 60; J’ca s 172(1); Mont s 62(1);
St C/N s 73(1); St L s 58(1); St V s 58(1); T’dad s 60(1).
67 Ang s 60; Ant s 62(1); Bah s 80(1): note that the minimum number is two; B’dos s 59; Dom s 62(1); Gren s
62(1); Guy s 60; J’ca s 172(1); Mont s 58(1); St C/N s 73(1); St L s 58(1); St V s 58(1); T’dad s 60(1).
68 Ang s 60; Ant s 62(1); Bah s 80(1); B’dos s 59; Dom s 62(1); Gren s 62(1); Guy s 60: no stipulation in respect
of officers and employees; J’ca s 172(1): no stipulation in respect of officers; Mont s 62(1); St C/N s 73(1): no
stipulation in respect of officers; St L s 62(1); St V 62(1); T’dad s 64(1).
71 Ang s 70(a); Ant s 71(a); B’dos s 67(a); Dom s 71(a); Gren s 71(a); Mont s 71(a); St L s 71(a); St V s 71(a);
T’dad s 73(a).
72 Ang s 75; Ant s 76; Bah: by virtue of s 29; B’dos s 73; Dom s 76; Gren s 76; Guy s 74; J’ca: by virtue of s
10(1); Mont s 76; St C/N: by virtue of s 11; St L s 76; St V s 76; T’dad s 78(1).
73 Ang s 75; Ant s 76; Bah: no express provision; B’dos s 73; Dom s 76; Gren s 76; Guy s 74; J’ca: no express
provision; Mont s 76; St C/N: no express provision; St L s 76; St V s 76; T’dad s 78(2).
74 Ang s 70; Ant s 71; B’dos s 67; Dom s 71; Gren s 71; Mont s 71; St L s 71; St V s 71; T’dad s 73. Cumulative
voting is discussed fully below, see text accompanying nn. 137–143.
75 Ang s 70(h); Ant s 71(h); B’dos s 67(h); Dom s 71(h); Gren s 71(h); Mont s 71; St L s 71(h); St V s 71(h); T’dad
s 73(h).
76 Ang s 65(1); Ant s 66(1); Bah s 87(1); B’dos s 63(1); Dom s 66(1); Gren s 66(1); Guy s 64(1); Mont s 66(1); St
C/N s 73(2); St L s 66(1); St V s 66(1); T’dad ss 68(1).
77 See Chapter 3.
78 J’ca s 181(1).
79 J’ca s 181(1).
80 Ang s 65(2); Ant s 66(2); Bah s 82(2); B’dos s 63(2); Dom s 66(2); Gren s 66(2); Guy s 64(2); J’ca s 180(6); Mont
s 67(1); St C/N s 78(1): the application must be by the ‘Minister or the Attorney General’; St L s 67(1); St V
s 66(1); T’dad s 69(1).
J’ca s 180(6)(a); Mont s 67(1)(a); St C/N: no similar provision; St L s 67(1)(a); St V s 66(1)(a); T’dad s 69(1)(a).
84 Ang s 66(1)(b); Ant s 67(1)(b); Bah s 83(1)(b); B’dos s 64(1)(b); Dom s 67(1)(b); Gren s 67(1)(b); Guy s 65(1)(b);
J’ca s 180(6)(b); Mont s 67(1)(b); St C/N s 78(3); St L s 67(1)(b); St V s 66(1)(b); T’dad s 69(1)(b).
s 67(2); St C/N: no similar provision; St L s 67(2); St V s 66(2); T’dad s 69(2).
88 J’ca s 182(1).
89 J’ca s 182(2).
90 J’ca s 182(3)(a).
91 J’ca s 182(3)(b).
92 J’ca s 182(5).
93 B’dos s 63.1.
94 B’dos s 63.2(b).
95 St C/N s 73(2)(d).
96 Ang s 67; Ant s 68; Bah s 80(2); Bel s 75(1); B’dos s 65; Dom s 68; Gren s 68; Guy s 66(1); Mont s 68; St L s 68;
97 J’ca s 177.
98 Bel s 75(2)–(3).
99 Guy s 66(2)–(5).
100 J’ca s 177.
101 Bel s 75(2); Guy s 66(2); J’ca s 177(1).
102 J’ca s 177(2).
103 Bel s 75(2); Guy s 66(4); J’ca s 177(3).
104 Guy s 66(5); J’ca s 177(4).

105 Bel s 75(3); J’ca s 177(5).
106 Guy s 66(3).
107 Ang s 7(1)(g); Ant s 69(1); Bah s 84(1); B’dos s 66(1); Dom s 69(1); Gren s 69(1); Guy s 67; Mont s 69(1); St
C/N s 8(1)(f); St L s 69(1); St V s 69(1); T’dad s 71(1).
C/N: no similar provision; St L s 69(1); St V s 69(1); T’dad s 71(1).
C/N: no similar provision; St L s 69(3); St V s 69(3); T’dad s 71(3).
110 Guy s 67(2).
111 Guy s 68(2).
112 Guy s 68(4).
113 J’ca s 175.
114 J’ca s 175(1)(a).
115 J’ca s 175(1)(b).
116 J’ca s 175(2).
117 J’ca s 175(1).
118 J’ca s 175(3).
119 Ang s 68; Ant s 69; Bah s 84; B’dos s 66; Dom s 69; Gren s 69; Guy s 68; Mont 69; St L s 69; St V s 69; T’dad s
71.
120 Ang s 68(3); Ant s 69(3); Bah s 84(3); B’dos s 66(3); Dom s 69(3); Gren s 69(3); Guy s 68(1); Mont 69(3); St L s
69(3); St V s 69(3); T’dad s 71(3).
121 Ang s 68(4); Ant s 69(4); Bah s 84(4); B’dos s 66(4); Dom s 69(4); Gren s 69(4); Mont s 69(4); St L s 69(4); St V s
69(4); T’dad s 71(4).
69(5); T’dad s 71(5).
69(6); T’dad s 71(6).
69(7); T’dad s 71(7).
69(8); St V s 69(8); T’dad s 71(8).
69(8); T’dad s 71(8).
128 Ant s 117(a); B’dos s 115(a); Dom s 117(a); Gren s 117(a); Guy s 117(a); Mont s 117(a); St L s 117(a); St V s
117(a); T’dad s 119(a).
131 Getz, ‘The Structure of Shareholder Democracy’, 2 Studies in Canadian Company Law (Zeigel ed, 1973) 239,
272.
s 69(3); T’dad s 71(3).
133 Ang s 116; Ant s 129(1); B’dos s 127(1); Dom s 129(1); Gren s 129(1); Guy s 132(1); Mont s 129(1); St L s 129(1);
St V s 129(1); T’dad s 131(1).
129(2); T’dad s 131(2).
135 Ang s 116; Ant s 126; B’dos s 124; Dom s 126; Gren s 126; Guy s 129; Mont s 126; St L s 69(3); St V s 126;
T’dad s 128.
136 Ang s 116; Ant s 126; B’dos s 124; Dom s 126; Gren s 126; Guy s 129; Mont s 126; St L s 69(3); St V s 126;
T’dad s 128.
138 Ang s 70(a); Ant s 71(a); B’dos s 67(a); Dom s 71(a); Gren s 71(a); Mont s 71(a); St L s 71(a); St V s 71(a);
T’dad s 73(a).
139 Ang s 70(b); Ant s 71(b); B’dos s 67(b); Dom s 71(b); Gren s 71(b); Mont s 71(b); St L s 71(b); St V s 71(b);
T’dad s 73(b).
140 Ang s 70(b); Ant s 71(b); B’dos s 67(b); Dom s 71(b); Gren s 71(b); Mont s 71(b); St L s 71(b); St V s 71(b);
T’dad s 73(b).
141 Ang s 70(c); Ant s 71(c); B’dos s 67(c); Dom s 71(c); Mont s 71(c); Gren s 71(c); St L s 71(c); St V s 71(c);
T’dad s 73(c).
142 Ang s 70(d); Ant s 71(d); B’dos s 67(d); Dom s 71(d); Mont s 71(d); Gren s 71(d); St L s 71(d); St V s 71(d);
T’dad s 73(d).
143 Ang s 70(e); Ant s 71(e); B’dos s 67(e); Dom s 71(e); Gren s 71(e); Mont s 71(e); St L s 71(e); St V s 71(e);
T’dad s 73(e).
75(1); St V s 75(1); T’dad s 77(1).
75(1); St V s 75(1); T’dad s 77(1).
146 Ang s 74(2); Ant s 75(2); Bah: no similar provision; B’dos s 72(2); Dom s 75(2); Gren s 75(2); Guy s 73(2);
75(2); St V s 75(2); T’dad s 77(2).
148 Ang s 74(3)(a); Ant s 75(3)(a); Bah s 89(3); B’dos s 72(3)(a); Dom s 75(3)(a); Gren s 75(3)(a); Guy s 73(3)(a);
75(5); St V s 75(5); T’dad s 77(5).
154 Ang s 83; Ant s 83; Bah s 99; B’dos s 81; Bel s 76; Dom s 83; Gren s 83; J’ca s 176; Mont s 83; St C/N s 80; St
L s 83; St V s 83; T’dad s 85.
155 (1960) 23 DLR (2d) 486 Alta SC.
156 Ang s 68(3); Ant s 69(3); Bah s 84(3); B’dos s 66(3); Dom s 69(3); Gren s 69(3); Guy s 68(1): for a period not
exceeding five years; Mont s 69(3); St L s 69(3); St V s 69(3); T’dad s 71(3).
69(5); T’dad s 71(5).
69(4); T’dad s 71(4).
75(5); St V s 75(5); T’dad s 77(5).
69(6); T’dad s 71(6).
161 Ang s 71; Ant s 72; Bah s 85; B’dos s 68; Dom s 72; Gren s 72; Guy s 69; Mont s 72; St L s 72; St V s 72; T’dad
s 74(1).
s 74(2).
163 Hutton v West Cork Rly Co (1883) 23 Ch D 654 Eng CA.
164 Ang s 104; Ant s 104; Bah s 80(3); B’dos s 102; Dom s 104; Gren s 104; Guy s 104: note that, unlike the other
Acts, the provisions in this Act are extensive; Mont s 104; St L s 104; St V s 104; T’dad s 106: note that the
shareholders in general meeting may fix the fees payable to the directors.
165 Craven-Ellis v Cannons Ltd [1936] 2 KB 403 Eng CA; but see Guinness plc v Saunders [1990] 2 AC 663 Eng
HL.
166 Boardman v Phipps [1967] 2 AC 46 Eng HL.
167 See the restrictive approach of the House of Lords in Guinness plc v Saunders [1990] 2 AC 663 Eng HL. See
also Beatson and Prentice (1990) 106 LQR; Hopkins (1990) CLJ 220; and Birks [1990] LMCQ 330.
168 Imperial Hydropathic Hotel Co, Blackpool v Hampson (1882) 23 Ch D 1 Eng CA; London Finance Corpn v
Banking Services Corpn [1925] 1 DLR 319 Ont HC.
169 Ang s 72; Ant s 73; Bah s 87; B’dos s 70; Dom s 73; Gren s 73; Guy s 71; J’ca s 179; Mont s 73; St L s 73; St V
s 73; T’dad s 75.
170 Ang s 72(1)(a); Ant s 73(1)(a); Bah s 87(1); B’dos s 70(1); Dom s 73(1)(a); Gren s 73(1)(a); Guy s 71(1); J’ca s
179(1); Mont s 73(1)(a); St L s 73(1)(a); St V s 73(1)(a); T’dad s 75(1)(a).
171 Ang s 72(1)(b); Ant s 73(1)(b); Dom s 73(1)(b); Gren s 73(1)(b); St L s 73(1)(b); St V s 73(1)(b); T’dad s 75(1)(b).
172 Ang s 72(1); Ant s 73(1); Bah: not provided for; B’dos s 70(1); Dom s 73(1); Gren s 73(1); Guy s 71(1); Mont s
73(1); St L s 73(1); St V s 73(1); T’dad s 75(1).
73(2); St V s 73(2); T’dad s 75(2).
73(3); St V s 73(3); T’dad s 75(3).
73(3); St V s 73(3); T’dad s 75(3). This power is discussed above, text accompanying nn 144–153.
176 J’ca s 179(4).
74(2); St V s 74(2); T’dad s 76(2).
74(1); St V s 74(1); T’dad s 76(1).
74(2); St V s 74(2); T’dad s 76(2).
74(3); St V s 74(3); T’dad s 76(3).
74(4); St V s 74(4); T’dad s 76(4).
182 J’ca s 179(2).
183 J’ca s 179(2).
184 J’ca s 179(3).
185 J’ca s 179(3)(a).
186 J’ca s 179(3)(b).

187 J’ca s 179(3).
188 J’ca s 179(3).
190 See Ang s 64; Ant s 65; B’dos s 62; Dom s 65; Gren s 65; Guy s 63; Mont s 65; St L s 65; St V s 65.
191 s 67(1). See the corresponding provision in Ang s 64(1)(b); Ant s 65(1); B’dos s 62(1); Dom s 65(1); Gren s
65(1); Guy s 63(1); Mont s 65; St L s 65(1); St V s 65(1).
192 Ang s 64(1)(a).
193 s 67(2). See Ang s 64(2); Ant s 65(2); B’dos s 62(1): but note that the notice period is five days; Dom s 65(2);
Gren s 65(2); Guy s 63(2): but note that the notice period is five days; Mont s 65(2); St L s 65(2); St V s 65(2).
78(1); St V s 78(1); T’dad s 80(1).
79(1); St V s 79(1); T’dad s 81(1).
79(1); St V s 79(1); T’dad s 81(1).
197 [1920] 2 KB 523 Eng CA.
St V s 79(2); T’dad s 81(2).
s 82.
s 80.
78(2); St V s 78(2); T’dad s 80(2).
78(2); St V s 78(2); T’dad s 80(2).
203 B’dos s 77; Guy s 79.
204 Ang s 80(a).

205 Bah s 80(1).
206 Bah s 95.
209 [1895] 1 Ch 674 Eng CA.
210 Gower, Gower’s Principles of Modern Company Law (4th edn London: 1979) 551.
211 Lawrence Report para 9.1.6.
212 See Ang s 84(1); Bah s 100(1); B’dos s 82(1); Dom s 84(1); Gren s 84(1); Guy s 83(1); Mont s 84(1); St L s 84(1);
St V s 84(1); T’dad s 86(1).
213 See Ang s 84(1)(b); Bah s 100(1)(b); B’dos s 82(1)(b); Dom s 84(1)(b); Gren s 84(1)(b); Guy s 83(1)(b); Mont s
84(1)(b); St L s 84(1); St V s 84(1)(b); T’dad s 86(1)(b).
214 See the corresponding provision in Ang s 84(2); Bah s 100(2); B’dos s 82(2); Dom s 84(2); Gren s 84(2); Guy s
215 Ang s 1; Ant s 543(1)(f); Bah s 2; Bel: no definition; B’dos s 448(i); Dom s 543(1); Gren s 543(1); Guy s 535(i);
J’ca s 2(1); Mont s 543(1); St C/N: s 2(1); St L s 543(1); St V s 543(1); T’dad s 4.
216 Ant s 95(a); Bah s 110(1); Dom s 95(a); Gren s 95(a); Mont s 95(a); St L s 95(a); St V s 95(a); T’dad s 97(a).
217 Ant s 95(b); Bah s 110(2); Dom s 95(b); Gren s 95(b); Mont s 95(b); St L s 95(b); St V s 95(b); T’dad s 97(b).
218 Ant s 95(a); Bah s 110(1); Dom s 95(a); Gren s 95(a); Mont s 95(a); St L s 95(a); St V s 95(a); T’dad s 97(a).
219 Ant s 95(c); Bah s 110(3); Dom s 95(c); Gren s 95(c); Mont s 95(c); St L s 95(c); St V s 95(c); T’dad s 97(c).
220 Ang s 83; Ant s 83; Bah s 99; B’dos s 81; Bel s 76; Dom s 83; Gren s 83; Guy s 82; J’ca s 176; Mont s 83; St
C/N s 80; St L s 83; St V s 83; T’dad s 85.
58(1); T’dad s 60(1).
58(1); T’dad s 60(1).
223 Discussed above.

224 Ang s 59(2); Ant ss 59–61; B’dos s 58(2); Dom ss 59–61; Gren ss 59–61; Guy s 59(2); J’ca s 172(2)–(6); St C/N
ss 81–83 and 85; St L ss 59–61; St V ss 59–61; T’dad ss 61–63.
225 Ant s 59(1); Dom s 59(i); Gren s 59(1); J’ca s 172(2); St C/N s 81; St L s 59(1); St V s 59(1); T’dad s 61(1).
226 Ant s 59(2); Dom s 59(2); Gren s 59(2); St L s 59(2); St V s 59(2); T’dad s 61(2).
227 Ant s 60(1); Dom s 60(i); Gren s 60(1); J’ca s 172(4); St C/N s 81(3); St L s 60(1); St V s 60(1); T’dad s 62(1).
228 Ant s 60(1); Dom s 60(i); Gren s 60(1); J’ca s 172(4); St C/N s 81(3); St L s 60(1); St V s 60(1); T’dad s 62(1).
229 Ang s 59(2); Ant s 61(1); B’dos s 58(2); Dom s 61(i); Gren s 61(1); Guy s 59(2); J’ca s 172(4); St C/N s 82(1); St
L s 61(1); St V s 61(1); T’dad s 63(1).
230 Ang s 59(2); Ant s 61(1); B’dos s 58(2); Dom s 61(i); Gren s 61(1); Guy s 59(2); J’ca s 172(4); St C/N s 82(1); St
L s 61(1); St V s 61(1); T’dad s 63(1).
231 Ang s 59(3); Ant s 61(2); B’dos s 58(3); Dom s 61(2); Gren s 61(2); Guy s 59(2); St C/N s 82(2); St L s 61(2); St
V s 61(2); T’dad s 63(2).
232 Ang s 59(3)(a); Ant s 61(2)(a); B’dos s 58(3)(a); Dom s 61(2)(a); Gren s 61(2)(a); Guy s 59(2)(a); St C/N s 82(2)
233 Ang s 59(3)(b); Ant s 61(2)(b); B’dos s 58(3)(b); Dom s 61(2)(b); Gren s 61(2)(b); Guy s 59(2)(b); St L s 61(2)(b);
St V s 61(2)(b); T’dad s 63(2)(b).
234 Ang s 59(3)(c); Ant s 61(2)(c); B’dos s 58(3)(c); Dom s 61(2)(c); Gren s 61(2)(c); Guy s 59(2)(c); St C/N s 82(2)
(c); St L s 61(2)(c); St V s 61(2)(c); T’dad s 63(2)(c).
235 Ang s 59(3)(d); Ant s 61(2)(d); B’dos s 58(3)(d); Dom s 61(2)(d); Gren s 61(2)(d); Guy s 59(2)(d); St C/N s 82(2)
(b); St L s 61(2)(d); St V s 61(2)(d); T’dad s 63(2)(d).
236 Ang s 59(3)(e); Ant s 61(2)(e); B’dos s 58(3)(e); Dom s 61(2)(e); Gren s 61(2)(e); Guy s 59(2)(e); St C/N s 82(2)
(e); St L s 61(2)(e); St V s 61(2)(e); T’dad s 63(2)(e).
237 B’dos s 63.1.
238 B’dos s 63.2.
239 J’ca s 172(3); St C/N s 81(4).

Chapter 11
Directors’ Statutory Fiduciary Duty
Introduction
The Companies Acts in the Commonwealth Caribbean, except the Act in
Belize, contain a provision similar to section 95(1)(a) of the Barbados
Companies Act which reads as follows:1
(1) Every director and officer of a company in exercising his powers and discharging his duties must
(a) act honestly and in good faith with a view to the best interests of the company.
On its plain words, it is difficult to resist the conclusion that this provision
represents anything but a statutory embrace of a general common law
fiduciary principle which underlies the relationship between the company and
its directors, namely, the general duty of directors as fiduciaries to act honestly,
in good faith and with a view to the best interests of the company. The section
95(1)(a)2 duty was referred to by the Supreme Court of Canada in the case of
Peoples Department Stores Inc (Trustees of) v Wise3 as the directors’ statutory
fiduciary duty.
Section 95(1)(a),4 therefore, appears to have established the fiduciary duty to
act bona fide and with a view to the best interests of the company as the
central plank of the fiduciary duties owed by directors to their company. There
are, however, other directors’ common law fiduciary duties based on the rule
against directors putting themselves in a position where their personal
interests conflict with their duty to the company. These other fiduciary duties
are dealt with in other provisions in the Acts. The current chapter explores the
statutory duty to act honestly with a view to the best interests of the company
and the related duties not to exercise their power for a collateral purpose and
not to fetter their discretion. The other fiduciary duties relating to the
avoidance of conflicts of personal interests and the duty owed by directors to
the company are examined in Chapter 12.
Theoretical Underpinnings of the Statutory Fiduciary
Duty
The starting point in understanding the statutory fiduciary duty imposed on
directors to act honestly and in the best interests of their company, as well as
other directors’ fiduciary duties, is the reminder that directors of companies
have long been regarded as fiduciaries with fiduciary duties identical to those
applying to any other fiduciary.5 The jurisprudential challenge has always been
identifying a legal basis for regarding a director as a fiduciary. To meet this
challenge, the directors of companies have been sometimes said to be
trustees,6 sometimes partners7 and at other times agents.8 Classified as trustees,
partners, or agents, directors are ipso jure fiduciaries and the fiduciary duties
imposed upon them explained on this basis.
This approach to directors’ duties is evident in the early English case of
Great Eastern Rly Co v Turner, where Lord Selbourne said of company
directors:9
The directors are the mere trustees or agents of the company, trustees of the company’s money and
property and agents in the transactions which they enter into on behalf of the company.
It is also evident in a dictum of Dixon J in the Australian High Court case of

Mills v Mills, where he said:10
Directors of a company are fiduciary agents and a power conferred upon them cannot be exercised in
order to obtain some private advantage or for any purpose foreign to the power. It is only one application
of the general doctrine expressed by Lord Nottingham in Aleyn v Blecker (1758) 1 Eden 132 at 138. No
point is better established than that a person having power must exercise it bona fide for the end design
otherwise it is corrupt and void.
The categorisation of directors as trustees or agents is generally regarded as

neither always helpful nor strictly correct.11 Perhaps, Lord Russell’s description
of directors in Regal (Hastings) Ltd v Gulliver12 most accurately depicts the
position of corporate directors. He said there that ‘directors of a limited
liability company are the creatures of statute and occupy a position peculiar to
themselves’.13
Accurate though Lord Russell’s description is, it falls short because it does
not supply a jurisprudential springboard for treating directors as fiduciaries. Be
that as it may, one thing that is absolutely certain about directors in
Commonwealth Caribbean company law theory is that directors are
fiduciaries and as such are at common law subject as fiduciaries to an
overriding duty to act bona fide in the interest of the company,14 and to the
related duties not to exercise their power for a collateral purpose,15 and not to
fetter their discretion.16 The duty in section 95(1)(a) of the Barbados Act, and
the corresponding sections in the other Acts,17 is a statutory statement of the
consequences of the assumption that directors are fiduciaries.
To Whom and by Whom is the Statutory Duty Owed?
To whom is the duty owed?
General rule
The question as to whom the statutory duty in section 95(1)(a) of the Barbados
Act, and the corresponding sections in the other Acts,18 is owed is best
answered by reference to the rule at common law. At common law, the rule is
that directors’ fiduciary duties are owed to the company and the company
alone. This means, for instance, that the directors owe no duty to the
individual shareholder. This principle is generally regarded as being firmly
established in the English case of Percival v Wright.19 In this case, the
shareholders approached the directors of their company and offered to sell
their shares at a named price. The directors purchased the shares from the
shareholders without revealing that negotiations were in progress for a take-
over bid at a higher price. It was held that since the directors did not owe any
fiduciary duties to the shareholders they could not be liable for non-disclosure.
Notwithstanding the sharp criticisms20 of Percival v Wright,21 the principle
in that case has been consistently vindicated in the case law. This is particularly
evident in the English cases which have had to consider the relationship
between the directors and their shareholders in the context of takeover bids.
One rule which has been established in these cases is that where a takeover
bid has been made, the directors must give sufficient information to the
shareholders and refrain from misleading them.22
Rules like this could be viewed as supporting a theory of directors owing
secondary fiduciary duties to shareholders. In the Scottish case of Dawson
International plc v Coats Paton plc,23 however, Lord Cullen poured cold water
on any such suggestion. He said:24
If … directors take it on themselves to give advice to current shareholders, the cases … show clearly that
they have a duty to advise in good faith and not fraudulently, and not to mislead whether deliberately or
carelessly … However, these cases do not, in my view, demonstrate a preexisting fiduciary duty to the
shareholders but a potential liability arising out of their words or actions which can be based on ordinary
principles of law. This, I may say, appears to be a more satisfactory way of expressing the position of
directors in this context than by talking of a so-called secondary fiduciary duty to shareholders.
The rule that directors owe their fiduciary duties to the company and the
company alone means also that the directors do not owe any fiduciary duty to
the company’s creditors. This position was stated by Dillon LJ in the English
Court of Appeal case of Multinational Gas and Petrochemical Co v
Multinational Gas and Petrochemical Services Ltd where he said:25
The directors indeed stand in a fiduciary relationship to the company, as they are appointed to manage the
affairs of the company and they owe fiduciary duties to the company though not to the creditors, present
or future, or to individual shareholders.
It is worth noting here also that even where a director is appointed as a

nominee of a shareholder or class of shareholders, his fiduciary duties are still
owed to the company as a whole.26 This does not mean that a director may
not consider the individual desires of the shareholders who appointed him;
what it does mean is that it would be inappropriate for a director to only
consider the interests of certain shareholders and to either ignore the others or
act in a way detrimental to their interests.27
The common law rule that directors’ fiduciary duties are owed to the
company and the company alone has been expressly adopted in
Commonwealth Caribbean Companies Acts. Thus, as has been seen, section
95(1) of the Barbados Act, and the corresponding section in other regional
Acts,28 imposes the obligation on directors to act honestly and in good faith
with a view to the best interest of the company and to exercise care, diligence
and skill. Section 95(2), and the corresponding section in other regional Acts,29
then stipulates that, in determining what are the best interests of the company,
a director must have regard to the interests of the company’s employees as
well as the interests of its shareholders. Section 95(3), and the corresponding
section in other regional Acts,30 then emphasises that ‘the duty imposed by
subsection (2) on the directors of a company is owed to the company alone.’
Exceptions to the general rule
The statutory rule that the directors’ statutory duty is owed to the company
alone is undoubtedly, then, a codification of the common law. This being so
the statutory rule has to be interpreted in light of the common law
understanding of the rule. This means that, as an exception to the statutory
rule, even though directors owe their fiduciary duties to the company, as at
common law, one or more directors may be held to owe individual
shareholders the ordinary fiduciary duties which arise in an agency
relationship where such shareholders specifically appoint directors as their
agents.31
Equally, directors may be held to owe individual shareholders a fiduciary
duty where, quite apart from agency, a ‘special factual relationship’ places the
directors in a fiduciary relationship vis-à-vis such shareholders.32 The leading
authority on this exception is the New Zealand Court of Appeal decision of
Coleman v Myers.33 In this case it was held that, because of the existence of a
‘special factual relationship’, the directors owed a fiduciary duty of full
disclosure of the relevant facts about the company to the shareholders on the
sale of their shares. The ‘special factual relationship’ in this case was that the
company was a family company in which the minority shareholders habitually
looked to the directors for guidance on matters affecting their interests. The
principle adumbrated in Coleman v Myers34 was accepted by Browne-
Wilkinson V-C in the English case of Re Chez Nico (Restaurants) Ltd,35 by the
Court of Appeal of New South Wales in Brunninghausen v Glvanics,36 and by
the English Court of Appeal in Peskin v Anderson.37
In the Canadian case of Bennett v Reim,38 it was held that three criteria are
necessary to establish a special factual relationship. These are that the director
has scope for the exercise of some discretion or power; that the director can
exercise that discretion or power so as to affect the interests of the
shareholder; and that the shareholder is peculiarly vulnerable to the director
having such discretion or power.
Who owes the duty?
Another common law rule which has been given statutory life in
Commonwealth Caribbean company legislation is that directors’ fiduciary
duties are owed by each director individually. This rule is adopted in all the
Acts by the imposition of fiduciary duties in the express words of the Acts on
‘every director’.39 The clear import of this wording is that, although the
authority of the directors to bind the company as its agents normally depends
upon their acting collectively as a board, their fiduciary duties are owed by
each director individually.
The duty to act honestly and with a view to the best interests of the
company is owed by de jure directors as well as de facto directors. In Jamaica,
it appears that fiduciary duties may also be held to be owed by shadow
directors.40
It is important to note also that the wording in all the Acts makes it plain
that fiduciary duties are owed, not only by every director of a company, but
also by every ‘officer’ of a company.41 Given the definition of ‘officer’ in the
Acts, this means that fiduciary duties are imposed equally on all those officials
of a company who are authorised to act on its behalf, and in particular, to
senior executive managers of the company.42
Nature of the Duty to Act ‘Honestly and in Good
Faith with a View to the Best Interests of the
Company’
What is acting honestly and in good faith?
As has already been remarked, the duty to act honestly and in good faith with
a view to the best interests of the company mandated by Commonwealth
Caribbean Companies Acts is a statutory restatement of the common law that
directors of companies are under a fiduciary duty to act bona fide and in the
best interests of their companies. Accordingly, the statutory provisions are best
understood in light of the common law.
The judgment of Lord Greene MR in the English decision of Re Smith &
Fawcett Ltd43 is generally accepted as firmly establishing the common law rule
on the duty to act honestly and in the best interests of the company. In that
case, the articles of a company stated: ‘The directors may at any time in their
absolute and uncontrolled discretion refuse to register any transfer of shares.’
Smith and Fawcett were the sole directors and each held 50 per cent of the
issued shares. Fawcett died. Smith and a second newly appointed director
refused to register Fawcett’s shares in the name of his executors. Smith offered
to register half of them and to buy the remainder himself. The court, in the
absence of evidence of mala fides, refused to intervene in the exercise by the
directors of their discretion. Lord Greene MR said:44
The principles to be applied in cases where the articles of a company confer a discretion on directors with
regard to the acceptance of transfers of shares are, for the present purposes, free from doubt. They must
exercise their discretion bona fide in what they consider – not what a court may consider – is in the
interests of the company, and not for any collateral purpose.
Given that this dictum correctly expresses the common law, the statutory duty
in provisions similar to section 95(1)(a) of the Barbados Act45 is to be
interpreted to mean that directors are under a subjective duty to act bona fide
in what they consider, and not what the court may consider, is in the best
interests of the company.
It may be important to emphasise here that, if a director fails to consider
whether a transaction is in fact in the best interests of the company, he is in
breach of the section 95(1)(a)46 duty. The English decision in Re W & M Roith
Ltd47 is said to lend support to this conclusion.48 In that case, a director who
had no pension arrangements with the company fell ill and wished to make
provision for his wife after his death. On advice, he entered into a service
agreement with the company whereby, on his death, his widow would be
entitled to a pension for life. It was held that the agreement was ultra vires
and not binding on the company. The case has been doubted as being really a
case of ultra vires, but has been supported as one of breach of directors’ duty
to act bona fide and in the best interests of the company.
Determining the best interests of the company
Some general considerations
All Commonwealth Caribbean Companies Acts,49 other than the Bahamas and
St Christopher/Nevis Acts, contain an express stipulation as to the interests to
which regard is to be had in determining the best interests of the company.
There are important differences in the wording of these provisions which must
be specifically noted and explored.
The Anguilla and the Trinidad and Tobago Acts are identical and provide as
follows:50
In determining what are the best interests of a company, a director shall have regard to the interests of the
company’s employees in general as well as to the interests of its shareholders.
Similarly, the Antigua, Dominica, Grenada, Montserrat, St Lucia and St

Vincent Acts are identical and provide as follows:51
In determining what are the best interests of a company, a director may have regard to the interests of the
The Barbados and Guyana Acts both provide:52

In determining what are the best interests of a company, a director must have regard to the interests of the
Finally, section 174(4) of the Jamaican Act provides:

In determining what are the best interests of the company, a director may have regard to the interests of
the company’s shareholders and employees and the community in which the company operates.
Three things are noteworthy about these provisions. The first is that the
provisions extend the traditional categories of interests that are to be taken
into account in determining the best interests of the company. Traditionally,
the best interests of the company have been identified with the interests of the
shareholders. However, in all the Acts except the Jamaican Act, the categories
have been expanded to include the interests of the company’s employees.53
Under section 174(4) of the Jamaican Act, the categories have been expanded
not only to include the interests of the employees but also the interests of the
community in which the company operates.
The second thing to note is that, under all of the Acts, except the Jamaican
Act, directors are under an obligation to have regard to the interests of
shareholders and employees in determining what are the best interests of the
company. This is obviously so in the Anguilla and Trinidad and Tobago Acts
which expressly provide that directors ‘shall’, and under the Barbados and
Guyana ‘must’, take these interests into consideration and as such is
mandatory in its effect. Even though in the Acts in Antigua, Dominica,
Grenada, Montserrat, St Lucia and St Vincent the language used is ‘may’, the
directors are still under an obligation to have regard to the statutory stipulated
interests. This is because these Acts expressly describe the statutory imposition
to have regard to these interests as a ‘duty’.54 It is to be noted that a similar
provision in the Acts in Anguilla, Barbados, Guyana and Trinidad and
Tobago55 provides an additional argument why directors are obliged to take
the statutory stipulated interests into account.
The position in Jamaica is different. Section 174(4) provides that the
stipulated interests ‘may’ be taken into account. However, unlike in the Acts in
Antigua, Dominica, Grenada, Montserrat, St Lucia and St Vincent, the Act in
Jamaica does not refer to the provision in section 174(4) as imposing a duty.
For this reason, section 174(4) is thought to permit directors to take these
interests into account, but does not oblige directors to do so.
The third is that although the provisions indicate the interests which are to
be, or may be, taken into consideration in determining the best interests of the
company, the Acts do not provide any test for deciding whether directors have
properly discharged their duty to act honestly and in the best interests of their
company. It is submitted that as a general proposition, a useful approach to
this determination is that adumbrated in the English case of Charterbridge
Corpn Ltd v Lloyds Bank Ltd,56 namely, to consider whether an intelligent and
honest man in the position of a director of the company concerned could, in all
the circumstances, have reasonably believed that the transaction was for the
benefit of the company.
The interests to be considered
It may be appropriate at this point to consider in more detail the various

interests to which directors must, (or may in Jamaica), have regard in
determining what are the best interests of a company.
The interests of shareholders
The reason why corporate investors initially pool their resources is to attain
some corporate purpose. For this reason, generally speaking, shareholders’
interests are identical to the company’s interests, or in other words, the
interests of the shareholders and those of the company coincide. It is,
therefore, not surprising that, as has been seen, it is firmly established at
common law that the fiduciary obligation to act bona fide and in the best
interests of the company is to be treated as an obligation to act in the best
interests of the shareholders collectively, not individually. By the same token,
it is hardly surprising that this rule is also now given statutory expression in
section 95(2) of the Barbados Act and the corresponding sections in the other
Acts.57
In approaching the determination of what are the interests of the company,
and by extension, what are the shareholders’ interests it is important to
underline three rules. The first is, as has been seen, it is the subjective opinion
of the directors, and not what the courts may think, which matters in deciding
what is in the best interests of the company.58
The second is that the rule that a director, in the discharge of his duty to act
honestly with a view to the best interests of the company must take the
interests of the shareholders into consideration, is normally taken as requiring
the directors to treat all shareholders equally.59 However, circumstances may
justify differential treatment of shareholders. This was held to be the case in
the English decision of Mutual Ins Co of New York v Rank Organisation Ltd.60
In this case, the directors were held not to be in breach of their duty to treat
shareholders equally when they decided that it was in the best interests of the
company to make a rights issue to only some of the holders of ordinary shares.
That decision of the directors excluded the American and Canadian
shareholders from the rights issue and was done to avoid the onerous
regulatory requirements in those jurisdictions.
The third rule is that where, as is usually the case, the directors themselves
are shareholders, they are entitled to have regard to their own interests as
such and not to think only of other shareholders. This was made clear by
Latham CJ in the Australian High Court case of Mills v Mills, where he said
that directors are:61
not required by the law to live in an unreal region of detached altruism and to act in a vague mood of
ideal abstraction from obvious facts which must be present to the mind of any honest and intelligent man
when he exercises his powers as a director … It would be setting up an impossible standard to hold that if
an action by a director was affected in any degree by the fact that he was a preference or ordinary
shareholder, his action was invalid and should be set aside.
It may be quickly noted, that shareholders may enforce the duty placed on
directors to have regard to the interests of shareholders in determining the
best interests of the company by invoking sections 225(b)(i) and 228 of the
Barbados Act and the corresponding sections in the other Acts.62 Sections
212(3)(a) and 213A of the Jamaican Act are to the same effect.
The interests of employees
Section 95(2) of the Barbados Act and the corresponding sections in the other
Acts,63 and section 174(4) in the Jamaican Act have expanded the matters to
which directors must have regard in determining what is the best interests of
the company to include the interests of employees. The import of these
provisions is best understood against the backdrop of the common law on
directors’ fiduciary obligations in relation to the interests of employees of
companies.
The English decision in Parke v Daily News Ltd64 provides a good
illustration of the common law approach. In this case, the Daily News was
selling the News Chronicle and the Star. The Cadbury family, who controlled
the selling company, wished to distribute the whole of the selling price to the
employees who would become redundant. A minority shareholder instituted a
suit to restrain the directors from doing so.
Before Plowman J it was argued that ‘the prime duty must be to the
shareholders; but the board of directors must take into consideration their
duties to employees in these days’. To this argument Plowman replied: ‘But no
authority to support that proposition of law was cited to me; I know of none,
and in my judgment such is not the law’.65 The clear implication of this
statement is that the directors are under no obligation to consider the interests
of employees of a company, at least where the company is not a going
concern.
It is submitted that the rule stated by Plowman J in Parke v Daily News
Ltd66 has been reversed by section 95(2) of the Barbados Act, and the
corresponding sections in the other Acts,67 and section 174(4) in Jamaica.68 By
section 95(2) and corresponding sections in the other Acts,69 a director is
obliged to take the interests of employees into consideration in determining
the best interests of the company, whether or not the company is a going
concern. Under section 174(4), there is no obligation on the directors to take
such interest into consideration. But, they are permitted to do so.
Under the Barbados Act and the other regional Acts except the Jamaican
Act, an employee can enforce this duty directly because section 225(b)(iv)70
includes in the definition of ‘complainant’ – the person who can bring an
oppression action under section 22871 to enforce directors’ duties – ‘any other
person who, in the discretion of the court, is a proper person to make an
application under this part’. It is submitted that there is compelling persuasion
in the view that, because section 95(2) and the corresponding sections in the
other Acts72 impose an obligation on directors to take employees’ interests
into account, an ‘employee’ of a company may fall within the definition of a
‘complainant’ as being a proper person to make an application to the court to
bring an oppression action to enforce this directors’ duty.73
The Jamaican Act does not contain any similar provision in the definition of
‘complainant’ in section 212(3) of that Act. Consequently, it is not clear how an
employee can establish locus standi in respect of the authority conferred on
directors to have regard to the interests of employees. It may be that since, as
we have seen, the director under section 174(4) is not under an obligation to
consider employees’ interests, as in the other Acts, there is no need for a
provision similar to that in the other Acts.
The interests of the community
A growing debate in modern company law is whether a more inclusive

approach to determining what is in the best interests of a company is not more
appropriate. The argument, which has been labelled the stakeholders’ debate,
is that not just the interests of shareholders and employees should be
considered, but also the interests of broader stakeholders such as creditors,
suppliers, customers and the wider community.74 The idea behind the
stakeholders’ debate is that all the groups of interests which have stakes in the
company should be reflected in the way in which management conducts its
responsibilities.75
It appears that section 174(4) of the Jamaica Act is motivated by this debate.
Thus, that subsection provides that directors may have regard to the interests
of the community in determining the best interests of the company. The
problem with this provision is that, ‘the community’ being a diffused group
with no legal personality as such, it is not clear to whom the directors are
accountable in respect of this duty. This is an especially acute problem since
section 212 of the Jamaican Act which contains the remedial provision for
enforcing directors’ duties does not include any obvious provision to allow any
member of the community as such to enforce directors’ duties on behalf of the
community.
The interests of creditors
None of the Companies Acts in the Commonwealth Caribbean identify

creditors’ interests as interests directors are to take into consideration in
determining the best interests of a company in the discharge of their duty to
act honestly and in the best interests of their company. This is consistent with
the orthodox view that directors owe their fiduciary duties to the company,
and not creditors past, present or future. There is, however, a school of thought
that creditors’ interests should be treated at common law as being
encompassed in directors’ fiduciary duty to act honestly and in the best
interests of the company in circumstances where the company is insolvent or
in the vicinity of insolvency.76 This school of thought relies heavily on dicta in
a number of Australian and New Zealand cases.77
The approach of this school is encapsulated in a dictum of Cooke J in the
New Zealand Court of Appeal decision in Nicholson v Permakraft (NZ) Ltd,78
where he said:
the duties of directors are owed to the company. On the facts of particular cases this may require the
directors to consider inter alia the interests of creditors. For instance, creditors are entitled to
consideration, in my opinion, if the company is insolvent, or near insolvent, or of doubtful solvency, or if a
contemplated payment or other course of action would jeopardise its solvency.
The jurisprudential explanation of this approach was given by Street CJ in the

New South Wales Court of Appeal in Kinsela v Russell Kinsela Pty Ltd79 as
follows:
In a solvent company the proprietary interests of the shareholders entitle them as a general body to be
regarded as the company when questions of the duty of the directors arise. If, as a general body, they
authorise or ratify a particular action of the directors, there can be no challenge to the validity of what the
directors have done. But where a company is insolvent the interests of the creditors intrude. They become
prospectively entitled, through the mechanism of liquidation, to displace the power of the shareholders and
directors to deal with the company’s assets. It is in a practical sense their assets and not the shareholders’
assets that, through the medium of the company, are under the management of the directors pending either
liquidation, return to solvency, or the imposition of some alternative administration.
This statement was quoted with approval by Dillon LJ in the English Court of
Appeal case of West Mercia Safetywear Ltd v Dodd.80 This was a case where a
director of an insolvent company arranged for it to pay a debt in respect of
which he had given a personal guarantee. It was held that he was in breach of
his fiduciary duty to the company because he had acted in disregard of the
interests of the general creditors.
It is submitted that the presence of the provisions in regional statutes
imposing a statutory fiduciary duty on directors in respect of statutory
stipulated interests preclude any argument that there is a fiduciary duty on
directors to take into account the interests of the general creditors even where
the company is insolvent or in the vicinity of insolvency. This submission has
strong support in the recent Canadian Supreme Court decision in Peoples
Department Stores Ltd (1992) Inc (Trustee of) v Wise.81 In this case, the
Supreme Court of Canada held that the fiduciary duty imposed by the
Canadian Business Corporations Act does not extend beyond the corporation
directly to its creditors. The Court stated that:82
in determining whether [directors] are acting with a view to the best interests of the corporation it may be
legitimate, given the circumstances of a case, for the board of directors to consider, inter alia, the interests
of shareholders, employees, suppliers, creditors, consumers, governments and the environment’.
The Court emphasised, however, that the various shifts in interests that
naturally occur as a corporation’s fortunes rise and fall do not affect the
content of the statutory fiduciary duty. At all times, directors and officers owe
their fiduciary obligations to the corporation and these obligations do not
change depending on whether the corporation is insolvent or in the vicinity of
insolvency. The directors may, however, given the circumstances of a case,
balance the interests of multiple stakeholders, including creditors, and utilise
their business judgment to determine what the best interests of the company
are.83
The Statutory Fiduciary Duty and the Proper Purpose
Test
The basic statutory provision and the proper purpose test
As has been seen, both section 95(1) of the Barbados Act and the
corresponding provision in the other Acts84 and section 174(1) of the Jamaican
Act expressly impose a duty on directors to ‘act honestly and in good faith
with a view to the best interests of the company’. This duty is not qualified by
any proviso that they must exercise their power for proper purposes and not
for any collateral purposes.
However, in what is generally regarded as the classical statement of the
duty to act honestly and in good faith, Lord Greene in the English Court of
Appeal in Re Smith & Fawcett Ltd85 proposed that directors are under a duty
not only to act bona fide and in the best interests of the company but also not
to act for a collateral or improper purpose. This qualification on the directors’
duty to act bona fide and in what they consider to be the best interests of the
company that they must not act for any collateral or improper purpose is
sometimes called the proper purpose test or proper purpose doctrine.
Does the statutory provision exclude the proper purpose test?
Overview
There appear to be three not insubstantial arguments as to why the proper

purpose test does not qualify the statutory fiduciary duty imposed by regional
legislation on directors to act honestly and in the best interests of their
company. It is important to examine these arguments separately.
Test is complex and deflects attention from central statutory

consideration
The first argument is that the proper purpose test is complex and deflects
attention from the central statutory consideration which is whether the
directors have acted with a view to the best interests of the company. The
validity of this observation is evident from the application of the test in the
case law.
The English cases have interpreted the test strictly to mean that if the
directors exercise their managerial powers for any purpose other than that for
which the power was conferred, the transaction may be set aside
notwithstanding the fact that the directors acted honestly and in what they
believed to be the best interests of the company. Thus, in the English case of
Punt v Symons & Co Ltd86 an injunction was granted to restrain the company
from holding a meeting when an allotment of shares had been made for the
purpose of securing a resolution at that meeting and not for the purpose of
raising new capital. The English case of Hogg v Cramphorn Ltd87 is to the same
effect. This case concerned an allotment of shares by the directors to prevent a
take over in the honest belief that the take over was not in the best interests of
the company. It was held that the fiduciary power to issue shares had been
exercised for an improper purpose, namely, to prevent a take over and not for
raising new capital, the purpose for which the power had been given to the
directors.
The Privy Council in the leading decision of Howard Smith Ltd v Ampol
Petroleum Ltd,88 after reviewing the Commonwealth decisions on this subject,
refused to follow the strict English approach. This case concerned the power of
the directors to issue new shares. Based on the English authorities, it was
argued that the only proper purpose for which such a power could be
exercised was to raise new capital when the company needed it. This approach
was rejected by the Privy Council as being too narrow.
Lord Wilberforce, who delivered the judgment of the Privy Council,
outlined what he considered to be the proper approach. According to him, this
approach consists of two steps. The first step is to construe the instrument
conferring the power on the directors in order to ascertain the nature of the
power and the limits, if any, within which it may be exercised. The second step
is to determine the substantial purpose for which it was exercised and to reach
a conclusion whether that purpose was proper or not.
In the words of Lord Wilberforce, the correct approach is:89
to start with a consideration of the power whose exercise is in question, in this case a power to issue
shares. Having ascertained, on a fair view, the nature of this power, and having defined as can best be done
in light of modern conditions the, or some, limits within which it may be exercised, it is then necessary for
the court, if a particular exercise of it is challenged, to examine the substantial purpose for which it was
exercised, and to reach a conclusion whether that purpose was proper or not.
According to Howard Smith Ltd v Ampol Petroleum Ltd,90 then, the test is
applied only to the directors’ primary or substantial purpose in exercising their
powers. This means that, if the directors can convince the court that their
substantial purpose was proper, their action will be held valid regardless of
whether there was a substantial secondary purpose of advancing the directors’
personal advantage. Such a result does not appear to be permitted by the
statutes which mandate that the power be used solely in the best interests of
the company.
Common law ratification of breach of the test is not

restricted to breaches in the best interests of the company
The second argument against the proper purpose test qualifying the statutory
fiduciary standard is the common law rule that where directors’ utilise their
powers for an improper purpose their action can be validated by shareholder
ratification. This was held to be the law in the English case of Hogg v
Cramphorn Ltd91 where, as was just seen, it was decided that the directors had
exercised their powers of allotment for an improper purpose. However,
instead of setting aside the allotment the proceedings were adjourned to
enable a general meeting to be held which duly ratified the directors’ action.
This same principle was accepted and applied by the English Court of Appeal
in the decision of Bamford v Bamford.92 Harman LJ observed in that case that
ratification was ‘a perfectly good “whitewash” of that which up to that time
was a voidable transaction’.93
The essential justification for the ratification procedure is that it allows
shareholders an opportunity to validate abuse of directors’ power which they,
the shareholders, consider in the best interests of the company. However, there
does not appear to be anything in the ratification procedure which guarantees
that the only abuse which may be validated is that which is in the best
interests of the company. Indeed, subject to the rights of minority shareholders
against oppressive actions by the majority, directors, in their capacity as
shareholders, are not prohibited from voting to ratify an improper use of their
power.94 This being so, ratification may provide a means of avoiding rather
than enforcing directors’ statutory fiduciary duties. This could scarcely be the
intention of Parliament in enacting the duty on directors to act honestly and
with a view to the best interests of the company.
Drafters omitted the test because it was regarded as

unnecessary
The third argument is based on the reason why the proper purpose rule was
omitted from the statutory rule in the first place. The authors of the Federal
Proposals, on which the Canadian Business Corporation Act, and in turn the
provisions of the regional Acts, are based, concluded that the proper purpose
test is unnecessary since it is merely an indirect means of requiring directors to
exercise their powers ‘honestly and in good faith with a view to the best
interests of the company’. They therefore recommended the elimination of the
proper purpose test so as to ‘enable courts to deal with these cases on a more
rational basis, giving due regard to all the relevant interests at stake’.95 This,
then, is the reason why that test is excluded from provisions like sections
95(1)96 and 174(1).
Relevant case law
Persuasive though the foregoing arguments may be, there is no clear authority
which decides the question whether the proper purpose test constitutes a
qualification to directors’ statutory fiduciary duty. The British Columbia
Supreme Court decision of Teck Corpn Ltd v Millar97 appears to have rejected
the test. In that case, directors entered into an agreement to issue shares so as
to prevent a majority shareholder from controlling the company. It was held
that the directors were not in breach of their fiduciary duty to the company as
long as they acted in good faith in what they believed, on reasonable grounds
to be in the best interests of the company. However, this case was not based
on the interpretation of any legislative provision.
There have been a number of Canadian cases decided on legislative
provisions in pari materia with sections 95(1)98 and 174(1). These cases were
concerned variously with the exercise of directorial power to issue shares,99 to
refuse a transfer of shares in the company,100 or to deal with a take over bid.101
In none of these cases did the court interpret the legislative provision as
requiring an enquiry into whether the use of the directorial power in question
was for a proper purpose. The only question considered in all of the cases was
whether the exercise of the directorial power was bona fide and in the best
interests of the company. It is submitted that these cases suggest without
deciding that the proper purpose test is not contemplated by section 95(1)102
and 174(1).
The Statutory Fiduciary Duty and the Duty Not to
Fetter Discretion
The basic statutory provision and the no-fetter rule
By section 95(1) of the Barbados Act and the corresponding sections in the
other Acts103 and section 174(1) of the Jamaican Act, directors’ powers are
treated as fiduciary powers which must be exercised honestly and with a view
to the best interests of the company. It has been argued that directors, as
fiduciaries of the company, cannot, without the consent of the company, fetter
the future exercise of their discretion in relation to their powers.104 Put another
way, directors cannot validly contract, either with one another105 or with third
parties,106 as to how they will vote or otherwise conduct themselves in the
future exercise of their powers and discharge of their duties.
The foregoing argument naturally raises the question as to what is the
relationship between directors’ statutory fiduciary duty under section 95(1) of
the Barbados Act and the corresponding sections in the other Acts107 and
section 174(1) of the Jamaican Act and the no-fetter rule. To answer this
question resort must be had to the case authority.
The case authority
There is some suggestion in the cases that, because of the overriding nature of
directors’ duty to act bona fide and in the best interest of the company, as a
general proposition, directors can never bind themselves as to the future
exercise of their fiduciary powers and that the no-fettering rule is therefore
otiose. There is such a suggestion in the Scottish case of Dawson International
plc v Coats Paton plc.108 This case concerned an agreement between a target
company and a bidder company in which the board of the target company
agreed that they would recommend the bid to its shareholders, and would not
encourage or cooperate with any other bidder which might emerge. It was
accepted by the court that this agreement was subject to an implied
qualification that if circumstances altered materially, the board could decide, in
fulfillment of their continuing overriding duty to act bona fide and in the best
interests of the company, not to implement the agreement.
The English decision in John Crowther Group plc v Carpets International
plc109 is to the same effect. It was held in this case that an agreement to
recommend one particular bid had to be read in light of the overriding
principle that directors were under a continuing fiduciary duty to act bona fide
and in the best interest of their company. In consequence, the bidders were not
entitled to damages when the directors recommended that their offer should
be set aside and a more attractive offer accepted.
The relationship between the no-fettering principle and the duty to act bona
fide and in the best interests of the company was considered in the English
Court of Appeal case of Fulham Football Club Ltd v Cabra Estates plc.110 In
this case the directors entered into undertakings to support, and to refrain
from opposing, planning applications by another party for the redevelopment
of the football ground. Subsequently, the directors wished to give evidence to
a planning enquiry opposing the redevelopment of the ground. They,
therefore, applied to the court for a declaration that they were not bound by
the undertakings. Before the Court of Appeal it was argued in support of the
application that the undertakings by the directors amounted to an improper
fettering of the future exercise of their discretion. A second argument was
advanced that a term should be implied into the undertakings that the
directors would not be required to do anything that would be inconsistent
with their fiduciary duty to act bona fide and in the best interests of the
company and that consequently they were entitled to give such evidence to
the inquiry as they considered in the best interests of the company.
The Court of Appeal refused to grant the declaration. The Court held that
the undertakings did not involve any improper fettering of the future exercise
of their discretion by the directors, since the undertakings were part of
contractual arrangements which conferred substantial benefits on the
company. The Court also held that there was no scope for the implication into
the undertaking of the term argued for by the directors and enthusiastically
embraced the principle that directors may, in the bona fide exercise of their
discretion, enter into a contract on behalf of the company in which they
validly agree to take such further action at board meetings as are necessary to
carry out that contract.
Fulham Football Club Ltd v Cabra Estates plc111 therefore supports the view
that the distinction must be made between directors fettering their discretion
(which is invalid) and directors exercising their discretion in a way which
restricts their future action (which is valid). The basis of this distinction was
explained by Kitto J in the Australian High Court decision of Thorby v
Goldberg, where he said:112
There are many kinds of transactions in which the proper time for the exercise of the directors’ discretion
is the time of the negotiation of the contract and not the time at which the contract is to be performed … If
at the former time they are bona fide of opinion that it is in the best interests of the company that the
transaction should be entered into and carried into effect, I can see no reason in law why they should not
bind themselves to whatever under the transaction is to be done by the board.
Fulham Football Club Ltd v Cabra Estates plc,113 the Court of Appeal noted
that any suggestion in cases such as John Crowther Group plc v Carpets
International plc114 of a general proposition that directors can never bind
themselves as to the exercise to the future of their fiduciary powers is
wrong.115 The true position is that directors are under an overriding duty to act
bona fide and in the best interests of the company. However, the time at
which directors exercise their fiduciary powers is a business judgment for
them depending on the particular transaction involved. When once they have
chosen a time and at that time they are bona fide of opinion that it is in the
best interests of the company that the transaction should be entered into and
carried out, there is no reason why they should not be bound to whatever
under the transaction is to be done by them.116
Interpretation of the basic statutory provision

It is submitted that the relationship between directors’ duty to act bona fide
and in the best interests of the company stated in Fulham Football Club Ltd v
Cabra Estates plc,117 represents the law on the relationship between directors’
statutory fiduciary duty under section 95(1) of the Barbados Act and the
corresponding sections in the other Acts118 and section 174(1) of the Jamaican
Act and the no fetter rule. Directors may be bound by the terms of a
transaction entered into by them which at the time of the transaction they are
bona fide of opinion that it is in the best interests of the company that the
transaction should be entered into and carried out.
Conclusion
all codified the basic directors’ fiduciary duty to act honestly and in good faith
with a view to the best interests of the company. These Acts have not defined
what constitutes the best interests of the company. However, except in St
Christopher/Nevis, the Acts expressly state the interests to which directors
may have regard in determining the best interests of the company. These
interests have been expanded beyond the interests of the shareholders of the
company to include a wider range of stakeholders in an effort allow more
flexibility to directors in the discharge of their company’s social as well as
private responsibilities as members of the communities within which they
operate.
Notes
1 See Ang s 97(1)(a); Ant s 97(1)(a); Bah s 81(1)(a); Dom s 97(1)(a); Gren s 97(1)(a); Guy s 96(1)(a); J’ca s 174(1)
(a); Mont s 97(1)(a); St C/N s 74(1)(a); St L s 97(1)(a); St V s 97(1)(a); T’dad s 99(1)(a).
3 [2004] SCR 461 SCC at para [32].
5 See generally Heydon, ‘Directors’ Duties and the Company’s Interests’ in Finn (ed), Equity and Commercial
Relationships (London: 1987).
6 See, e.g., Great Eastern Rly Co v Turner (1872) 8 Ch App 149, 152 per Lord Selborne; Selangor United
Rubber Estates Ltd v Cradock (a bankrupt)(No 3) [1968] 2 All ER 1073, 1091–1094 Eng Ch D per Ungoed-
Thomas J. See also generally Sealy, ‘The Director as Trustee’ (1967) CLJ 83.
7 See Re Forest of Dean Coal Mining Co (1878) 10 Ch D 450, 453 Eng CA per Jessel MR.
8 See, e.g., Great Eastern Rly Co v Turner (1872) 8 Ch App 149, 152 per Lord Selborne.
9 (1872) 8 Ch App 149, 152.
10 (1938) 60 CLR 150, 185 HCA.
11 See Re City Equitable Fire Insurance [1925] Ch 407, 426 Eng Ch D per Romer J.
12 [1967] 2 AC 134n Eng HL.
13 [1967] 2 AC 134n, 147 Eng HL.
14 Discussed below.
15 Discussed below.
16 Discussed below.
19 [1902] 2 Ch 421 Eng Ch D.
20 See e.g., Coleman v Myers [1972] 2 NZLR 225 NZ CA; Brunninghausen v Glvanics (1999) 46 NSWLR 538
NWS CA.
21 [1902] 2 Ch 421 Eng Ch D.
22 See Re a Company (No 008699 of 1985) [1986] BCLC 382; Gething v Kilner [1972] 1 All ER 1166.
23 [1989] BCLC 233 Ct of Sess (Outer House).
24 [1989] BCLC 233, 244 Ct of Sess (Outer House).
25 [1983] Ch 258, 288 Eng CA. See also the important Canadian decision in Peoples Department Stores Inc
(Trustee of) v Wise [2004] 3 SCR 462 SCC.
26 Scottish Co-operative Wholesale Society Ltd v Meyer [1959] AC 324 Eng HL; Boulting v ACTT [1963] 2 QB
606 Eng CA; Palmer v Carling O’Keefe Breweries of Can Ltd (1989) 56 DLR (4th) 128 Ont Div Ct.
27 820099 Ont Inc v Harold E Ballard Ltd (1991) 3 BLR (2d) 113 Ont Div Ct.
31 Allen v Hyatt (1914) 30 TLR 444 PC; Briess v Wooley [1954] AC 333 Eng HL.
32 Coleman v Myers [1977] 2 NZLR 225 NZCA; Brunninghausen v Glvanics (1999) 46 NSWLR 538 NWS CA;
Peskin v Anderson [2001] BCLC 372 Eng CA.
33 [1977] 2 NZLR 225 NZCA.
34 Ibid.
35 [1992] BCLC 192, 208 Eng Ch D.

36 (1999) 46 NSWLR 538 NWS CA.
37 [2001] 1 BCLC 372 Eng CA.
38 (2004) 50 BLR (3d) 128 Ont SCJ [Commercial List].
39 See Ang s 97(1); Ant s 97(1); Bah s 81(1); B’dos 3 95(1); Dom s 97(1); Gren s 97(1); Guy s 96(1); J’ca s 174(1);
Mont s 97(1); St C/N s 74(1); St L s 97(1); St V s 97(1); T’dad s 99(1).
40 Yukong Line Ltd v Rendsburg Investments Corpn of Liberia [1998] 1 WLR 294 Eng QBD (Comm).
41 See Ang s 97(1); Ant s 97(1); Bah s 81(1); B’dos 95(1); Dom s 97(1); Gren s 97(1); Guy s 96(1); J’ca s 174(1);
42 Canadian Aero Service Ltd v O’Malley (1973) 40 DLR (3d) 371, 381 SCC.
43 [1942] Ch 304 Eng CA.
44 [1942] Ch 304, 306 Eng CA.
(a); Mont s 97(1)(a); St C/N s 74(1)(a); St L s 97(1)(a); St V s 97(1)(a); Trin s 99(1)(a).
(a); Mont 97(1)(a); St C/N s 74(1)(a); St L s 97(1)(a); St V s 97(1)(a); T’dad s 99(1)(a).
47 [1967] 1 All ER 427 Eng Ch D.
48 See Gower and Davies, Principles of Modern Company Law (8th edn London: 2003) 514.
St L s 97(2); St V s 97(2); T’dad s 99(2).
50 Ang s 97(2); T’dad s 99(2).
51 See Ant s 97(2); Dom s 97(2); Gren s 97(2); Mont s 97(2); St L s 97(2); St V s 97(2).
52 B’dos s 95(2); Guy s 96(2).
St V s 97(2); T’dad s 99(2).
54 See Ant s 97(3); Dom s 97(3); Gren s 97(3); Mont s 97(3); St L s 97(3); St V s 97(3).
55 See Ang s 97(3); B’dos s 95(3); Guy s 96(3); T’dad s 99(3).
56 [1970] Ch 62, 74 Eng Ch D.

57 See Ang s 97(2); Ant s 97(2); Dom s 97(2); Gren s 97(2); Guy s 96(2); J’ca s 174(4); Mont s 97(2); St L s 97(2); St
V s 97(2); T’dad s 99(2).
58 Re Smith & Fawcett Ltd [1942] Ch 304 Eng CA.
59 See, e.g., Galloway v Hallé Concerts Society [1915] 2 Ch 233 Eng Ch D.
60 [1985] BCLC 11.
61 (1938) 60 CLR 150, 164 HCA.
62 See Ang ss 259(b)(i) and 266; Ant ss 238(b)(i) and 241; Bah ss 278(b)(i) and 280; Dom ss 238(b)(i) and 241;
Gren ss 238(b)(i) and 241; Guy ss 221(b)(i) and 224; Mont ss 238(b)(i) and 241; St C/N ss 141–154; St L ss
238(b)(i) and 241; St V ss 238(b)(i) and 241; T’dad ss 239(b)(i) and 242.
T’dad s 99(2).
64 [1962] Ch 927 Eng Ch D.
65 [1962] Ch 927, 963 Eng Ch D.
66 [1962] Ch 927 Eng Ch D.
T’dad s 99(2).
68 This was recommended in the Caricom Report para 12.104.
69 See Ang s 97(2); Ant s 97(2); Bah s 81(2); Dom s 97(2); Gren s 97(2); Guy s 96(2); Mont s 97(2); St L s 97(2); St
V s 97(2); T’dad s 99(2).
70 See Ang s 259(b)(iv); Ant s 238(b)(iv); Bah s 278(c); Dom s 238(b)(iv); Gren s 238(b)(iv); Guy s 221(b)(iv);
Mont s 238(b)(iv); St L s 238(b)(iv); St V s 238(b)(iv); T’dad s 239(d).
71 See Ang s 266; Ant s 241; Bah s 280; Dom s 241; Gren s 241; Guy s 224; Mont s 241; St L s 241; St V s 241;
T’dad s 242.
72 See Ang s 97(2); Ant s 97(2); Dom s 97(2); Gren s 97(2); Guy s 96(2); St L s 97(2); St V s 97(2); T’dad s 99(2).
74 The literature on this subject is voluminous. But see, e.g., Dodd, ‘For Whom are Corporate Managers
Trustees?’ (1932) 45 Harv L Rev 1145; Freeman, Strategic Management: A Stakeholder Approach (Pitman,
Boston: 1984); Sternberg, ‘The Defects of the Stakeholder Doctrines’ in Corporate Governance in the
Marketplace (Institute of Economic Affairs, London: 2004) Ch 6; Goldenberg, ‘Shareholders v Stakeholders:
The Bogus Argument’ (1998) 19 Co Law 34; Hemraj ‘Corporate Governance: Rationalising Stakeholder
Doctrine in Corporate Accountability’ (2005) Co Law 211.
75 Ibid.
76 There is an impressive body of literature on this topic: but see, e.g., Grantham, ‘The Judicial Extension of
Directors’ Duties to Creditors’ (1991) JBL 1; Prentice, ‘Creditors’ Interests and Directors’ Duties’ (1990) 10
OJLS 265.
77 See in particular Walker v Wimborne (1976) 50 ALJR 446; Nicholson v Permakraft (NZ) Ltd [1985] 1 NZLR
242 NZ CA; Kinsela v Russell Kinsela Pty Ltd (1986) 4 ACLC 215 NSW CA.
78 [1985] 1 NZLR 242, 249 NZ CA.
79 (1986) 4 ACLC 215, 223 NSW CA.
80 [1988] BCLC 250, 252 Eng CA.
81 [2004] 3 SCR 461 SCC. See also the English decision in Re Welfab Engineers Ltd [1990] BCLC 833 Eng Ch
D (Comp Ct) where it was held that where a company is in the vicinity of insolvency, the directors may
not take any action which will jeopardise the interests of creditors; however, directors are not bound to
give creditors’ interests absolute priority.
82 [2004] 3 SCR 461 SCC at para [42].
83 Brant Investments v KeepRite Inc (1991) 80 DLR (4th) 161 Ont CA.
84 See Ang s 97(1); Ant s 97(1); Bah s 81(1); Dom s 97(1); Gren s 97(1); Guy s 96(1); Mont s 97(1); St C/N s 74(1);
St L s 97(1); St V s 97(1); T’dad s 99(1).
85 [1942] Ch 304 CA.
86 [1903] 2 Ch 506 Eng Ch D.
87 [1967] Ch 254 Eng Ch D.
88 [1974] AC 821 PC.
89 [1974] AC 821, 835 PC.
90 [1974] AC 821 PC.
91 [1967] 1 Ch 77 Eng Ch D.
92 [1967] 1 Ch 212 Eng CA.

93 [1967] 1 Ch 212, 238 Eng CA.
94 See North-West Transportation Ltd and Beatty v Beatty (1887) 12 App Cas 589, 593 PC.
St L s 97(2); St V s 97(2); T’dad s 99(2).
97 [1973] 33 DLR (3d) 288 BC SC.
St L s 97(2); St V s 97(2); T’dad s 99(2).
99 See Beauchamp v Contenants Sanitaires C S Inc (1979) 7 BLR 200 Que SC; Olson v Phoenix Industrial Supply
Ltd (1984) 26 BLR 183 Man CA.
100 See Ultramar Canada Inc v Montreal Pipeline Ltd (1990) 49 BLR 279 Ont HC.
101 See Re Royal Trustco Ltd (1981) 2 OSCB 322C Ont SC; 347883 Alberta Ltd v Producers Pipelines Ltd (1991) 3
BLR (2d) 237 Sask CA.
St L s 97(2); St V s 97(2); T’dad s 99(2).
St L s 97(1); St V s 97(1); T’dad s 99(2).
104 See Gower and Davies, Principles of Modern Company Law (7th edn London: 2003) 389.
105 Motherwell v Schoof [1949] 4 DLR 812 Alta SC.
106 Clark v Workman [1920] 1 IR 107 Eng Ch D; Selangor United Rubber Estates ltd v Craddock (a bankrupt)
(No 3) [1968] 1 All ER 1073; Dawson International Plc v Coats Paton Plc (1989) BCLC 233 Ct of Sess (Outer
House).
St L s 97(1); St V s 97(1); T’dad s 99(2).
108 [1989] BCLC 233 Ct Sess (Outer House).
109 [1990] BCLC 460.
110 [1994] 1 BCLC 363 Eng CA.
111 [1994] 1 BCLC 363 Eng CA.

112 (1964) 112 CLR 597, 605–606 HCA.
113 [1994] 1 BCLC 363 Eng CA.
114 [1990] BCLC 460.
115 [1994] 1 BCLC 363, 393 Eng CA.
116 Thorby v Goldberg (1964) 112 CLR 597, 605–606 HCA.
117 [1994] 1 BCLC 363 Eng CA.
St L s 97(1); St V s 97(1); T’dad s 99(2).
Chapter 12
Directors’ Duty of Loyalty
Introduction
Quite apart from the statutory fiduciary duty examined in the foregoing
chapter, all fiduciaries, including directors, are under a strict duty of loyalty.1
The duty of loyalty includes two main components. These are a duty to avoid
conflicts between self-interest and the interests of the company (the no-
conflict rule), and a duty not to make secret profits from their fiduciary
position (the no-profit rule).2 The no-conflict rule usually arises where a
director uses his position to procure advantageous contracts or other
transactions with the company. The no-profit rule usually arises where a
director diverts to his own use a corporate opportunity, a director uses for his
own purpose corporate information, or a director competes with his company.
The no-conflict rule and the no-profit rule are independent rules, and so
either or both may apply in a given situation.3 Indeed, typically, a director
exploits a conflict of interest for his personal advantage so that both the no-
conflict rule and the no-profit rule may be applicable.4 On the other hand, the
no-conflict rule alone will be applicable where a director is in a position of
conflict but does not seek to exploit it for his personal advantage; and the no-
profit rule alone will apply where the director resigns thereby removing the
situation of conflict,5 but exploits the corporate information for his personal
advantage.
The fiduciary principle of loyalty is dealt with in Commonwealth Caribbean
company law in different ways. Except in Belize, detailed statutory rules are to
be found in Companies Acts regulating directors’ interest in contracts and
other transactions with their company,6 but the other aspects of the duty are
generally left to be governed by the common law. This chapter examines first
of all the statutory rules on directors’ contractual interest in their company,
and then the common law rules on directors’ no-profit duties.
Statutory Duty to Disclose Interests in Contracts with
Company
Commonwealth Caribbean Companies Acts, except in Belize, contain a

provision that states as follows:7
(1) A director or officer of a company
(a) who is a party to a material contract or proposed material

contract with the company, or
(b) who is a director or an officer of any body, or has a material
interest in any body, that is a party to a material contract or
proposed material contract with the company
must disclose in writing to the company or request to have entered in the

minutes of meetings of directors the nature and extent of his interest.
This provision forms part of a statutory regime established in these Acts to

deal with perceived inadequacies in the common law rules on directors’ duty
to avoid conflict between their self-interest and the interests of their company.
For this reason, it is useful to begin by exploring the common law which the
provision is intended to replace.
Common law background to statutory provisions
As was just noted, the statutory provisions on directors’ duty to disclose an

interest in a contract with their company is inextricably bound up with the
general rule of equity that a fiduciary is under a duty to avoid conflict
between his self-interest and the interests of the person to whom he is in a
fiduciary position.8 This general equitable principle was applied to contracts
entered into by the board of directors on behalf of the company with one of
their number in the seminal case of Aberdeen Rly Co v Blaikie Bros.9 The facts
of this case are that a railway company agreed to buy chairs from a
partnership, Blaikie Bros. The chairman of the board of directors of the
company was also the managing partner of the partnership. When the partners
sought to enforce the contract, it was held that, because the chairman of the
board of directors was also a partner in the partnership, there was a conflict of
duty and interest and consequently the company could set aside the contract in
equity.
The operation of the principle as it relates to company directors is
admirably captured in the words of Lord Cranworth in that case where he
said:10
A corporate body can only act by agents, and it is, of course, the duty of those agents so to act as best to
promote the interests of the corporation whose affairs they are conducting. Such agents have duties to
discharge of a fiduciary nature towards their principal. And it is a rule of universal application that no one,
having such [fiduciary] duties to discharge, shall be allowed to enter into engagements in which he has, or
can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom
he is bound to protect. So strictly is this principle adhered to that no question is allowed to be raised as to
the fairness or unfairness of a contract so entered into.
Three key aspects of the no-conflict rule enunciated by Lord Cranworth have
been underlined in later cases. The first of these is that Lord Cranworth’s
enunciation of the rule makes it plain that it is not necessary to prove that
there is an actual conflict of interests: it is only necessary to prove that there is
a real possibility of a conflict.11 The second is that, as was stressed by Vinelott J
in the English case of Movitex Ltd v Bulfield,12 breach of the no-conflict rule
renders a contract voidable at the option of the company and the director in
breach liable to account for any profits received from the contract.13 The third
is that the strict equitable principle can only be avoided if the company’s
constitution permits such a contract14 or if the director makes full disclosure of
all the material facts to the shareholders of the company in general meeting,
not to the board, and they approve or ratify it. Disclosure to the board is
ineffective even if the interested director refrains from attending and voting so
that the decision is that of an independent quorum.15 Put simply, the
unyielding rule is that the only effective way of directors and officers avoiding
the no-conflict rule is for them to make full disclosure to the shareholders in
general meeting for approval or ratification of the contract.
The fundamental rationale for the imposition of the strict common law no-
conflict rule is to protect from abuse those to whom fiduciary duties are
owed.16 It is generally recognised, however, that the strict principle does not
prevent abuse in circumstances where the company’s articles authorise such
contracts or where an interested director controls a sufficient majority of votes
to secure a ratification of his action. On the other hand, the strictness of the
principle means that contracts which may be fair, reasonable and
advantageous to the company are ipso jure voidable. This is so, as has just
been seen, even where the interested director discloses his interest to an
independent board and refrains from participating in the board’s decision to
allow him to enter into the contract since the rule requires disclosure to the
shareholders in general meeting.
It is to avoid these inadequacies in the strict common law no-conflict rule
that modern Commonwealth Caribbean company legislation has introduced a
system of mandatory disclosure of directors’ and officers’ interests in contracts
with the company. The objective of the system is to absolve an interested
director from liability if he complies with the statutory disclosure
requirements.17 The overriding criterion is that the contract be reasonable and
fair to the company.18
Analysis of the statutory provision
When is disclosure required?
As has been seen, the basic provision in the Companies Acts in the
Commonwealth Caribbean containing provisions requiring disclosure
stipulates that the directors and officers of a company must disclose their
interests in a material contract or proposed material contract.19 The provision
appears to restrict the need for disclosure to a situation only where a director’s
or officer’s interest is in a ‘material contract’ or a ‘proposed material contract’.
None of the Acts define what is meant by a ‘material’ contract. However,
on its normal dictionary meaning the stipulation that the contract be a
‘material’ contract merely requires that the contract be one in which the
director or officer is interested. In such an eventuality, the contract would be
‘significant’ or ‘relevant’ and so within the dictionary meaning of ‘material’.
This appears to be the interpretation which is being adopted by the courts.
Thus, in the Alberta Queen’s Bench case of Dimo Holdings Ltd v Jager
Developments Inc,20 Fruman J said of a ‘material’ interest that ‘to be material it
must be more than insignificant’. In Zysko v Thorarinson,21 another Alberta
Queen’s Bench case, Chrumka J was more expansive. He opined that a
contract is material if there is a possibility that a director may obtain more
than a de minimis benefit from the contract. He proposed that a good rule of
thumb is that a contract is material whenever the involvement of the director
might be relevant to the company’s decision-making process. So that, if the
company would undertake additional due diligence to determine whether the
contract is in the best interests of the company or it would assign a director to
handle the negotiation of the contract, then the contract is a material contract.
Similarly, in the Ontario case of Exide Canada Inc v Hilts,22 it was held that a
contract is a material contract where a director has a close personal
relationship with a person with whom the company is involved in
negotiations, even though the director has no monetary interest in the person.
The requirement for a ‘contract’ is slightly more problematic. If that
expression is given its normal legal signification, it would mean that where the
director’s or officer’s interest is in an arrangement or transaction which does
not amount to an offer and acceptance ‘contract’, there is no need for
disclosure. This result is avoided, it is submitted, because the expression
‘proposed’ is to be read as expanding the meaning of ‘contract’ to comprehend
a proposal which does not at the relevant time constitute a contract in law but
which is intended to mature into such a contract. On this interpretation,
disclosure is required not only in respect of contracts as defined in the general
law of contract, but also to what may be called ‘arrangements’ or
‘transactions’.
Who must disclose?
Under all Commonwealth Caribbean Companies Acts containing provisions

requiring disclosure, disclosure must be made by any director or officer who is
a party to,23 or has a material interest in any body that is a party to a material
contract or proposed material contract with the company.24 In Jamaica alone,
however, a director who is an associate of a person who is a party to a
contract, proposed contract or has an interest in any body that is a party to a
contract or proposed contract with the company must also disclose.25
Nature and extent of disclosure
It has always been held that disclosure by a director of his interest in a

contract with his company must be full and frank.26 Accordingly, the
requirement for disclosure is not satisfied by the mere declaration of the
existence of an interest in a contract.27 That this is the law in the
Commonwealth Caribbean is evident from the provision in all the Acts
requiring that the nature and extent of the director’s or officer’s interest must
be disclosed in writing to the company or by a request to the company to have
the disclosure entered into the minutes of the directors’ meeting.28
In the leading Privy Council case of Gray v New Augarita Porcupine
Mines,29 it was pointed out that there is no precise formula that may be used
to determine the amount of detail that is required when a director declares his
interest or the nature of his interest. The amount of detail required will depend
in each case upon the nature of the contract and the context in which it arises.
That said, a director’s disclosure must inform his fellow directors fully, if this is
material to their judgment, not merely that he has an interest but what that
interest is and how far it goes. In that case, a director who stood to make a
large profit from a settlement with his company, where only he of the
directors had the means of knowing the full extent of his profit, was held
bound to disclose the exact extent of the profit which he would make as a
result of the settlement. His failure to make such disclosure rendered him
liable to account for all profit that he made by the settlement.
Time of disclosure of contracts requiring approval
Except in the St Christopher/Nevis Act, separate disclosure procedures for

directors, on the one hand, and for officers who are not directors, on the other,
are mandated in all regional Companies Acts containing provisions requiring
disclosure.
A director is required to disclose his interest at the meeting at which a
proposed contract is first considered.30 However, if the director was not then
interested in the proposed contract, he must disclose at the first meeting after
he becomes so interested.31 If the director becomes interested after a contract
is made, his disclosure must be made at the first meeting after he becomes so
interested.32 Finally, if a person who is interested in a contract later becomes a
director of the company, then, he must disclose at the first meeting after he
becomes a director.33
An officer who is not a director must disclose his interest in a contract
forthwith after he becomes aware that the contract or proposed contract is to
be considered, or has been considered, at a meeting of the directors of the
company.34 Where the officer becomes interested in a contract after it is made,
he must disclose forthwith after he becomes so interested.35 Finally, where a
person was interested in a contract and later becomes an officer of the
company, he must disclose his interest forthwith after he so becomes an
officer.36
In St Christopher/Nevis, disclosure of an interest must be ‘as soon as
practicable after the director becomes aware of the circumstances which gave
rise to his duty to make it.’37
Time of disclosure of contracts not requiring approval
Except in St Christopher/Nevis, special rules govern disclosure of an interest in

a contract which, in the ordinary course of the company’s business, would not
require approval by the directors or shareholders.38 This would include, for
instance, a subscription for debentures or shares of the company on the same
terms as the public.39 In such a case, the director or officer concerned must
disclose in writing to the company, or request to have entered in the minutes
of meetings of directors, the nature and extent of his interest forthwith after
the director or officer becomes aware of the contract or proposed contract.40
Director voting on disclosed contract
Under the strict common law rule, a director of a company may not vote on
any resolution to approve a contract or proposed contract in which he is
interested.41 However, except in Jamaica and St Christopher/Nevis, regional
Acts containing provisions requiring disclosure permit a director to vote on
such a resolution where certain statutorily specified contracts are involved.42
These include where the contract is (i) an arrangement by way of security for
money loaned to, or obligations undertaken by him for the benefit of the
company or an affiliate of the company;43 (ii) a contract which relates
primarily to his remuneration as a director, officer, employee or agent of the
company or affiliate of the company;44 (iii) a contract for indemnity insurance
within the terms of the Acts;45 (iv) a contract with an affiliate of the
company.46 In any other case, no resolution on which an interested director
voted is valid unless it is approved by not less than two-thirds of the votes of
the shareholders of the company to which notice of the nature and extent of
the director’s interest in the contract is declared and disclosed in reasonable
detail.47
Under the Jamaican Act, all material contracts, or proposed contracts, with
the company that are statutorily required to be disclosed are subject to the
approval of the board of directors of the company.48 The director concerned is
forbidden from being present during any proceedings of the board in
connection with that approval.49 By this mechanism, directors are indirectly
precluded from voting on a resolution to approve a contract or proposed
contract in which he is interested.
The St Christopher/Nevis Act is silent on this matter. The strict common
law rule therefore applies. This means that, in St Christopher/Nevis, a director
of a company may not vote on any resolution to approve a contract or
proposed contract in which he is interested.
Method of disclosing interests
Assuming that the requirement to declare a material interest arises, the

procedure established in the Acts must be followed. In this regard, the Acts
provide that the requirement for a declaration may be satisfied by a general
notice by the director or officer of the company to the directors of the
company declaring that he is a director or officer of, or has a material interest
in, another body, and is to be regarded as interested in any contract made with
that body.50
The Acts do not differentiate between a company with a sole director and a
company with more than one director in respect of the manner in which a
material interest must be disclosed. However, given that the object of the
requirement for a declaration is to ensure that a formal record of a director’s
or officer’s declaration forms part of the company’s record, it is submitted that
even in the case of a sole director, the declaration procedure established in the
Acts must be followed.
Effect of disclosure
Disclosure of his interest in a contract by a director or officer in accordance
with the Acts can have a validating effect on the contract. This is because all
the Acts containing provisions requiring disclosure, except the St
Christopher/Nevis Act, provide that where the directors or shareholders
approve the contract, and where the contract was fair and reasonable to the
company at the time it was approved, the contract is neither void nor voidable
by reason only that the director or officer has a material interest in the
contract or was counted to determine the presence of a quorum at, a meeting
of directors or a committee of directors, that authorised the contract.51 This
means that, though the interested director may not vote on the contract, he
may be counted in the quorum of the meeting and in the quorum for
considering the contract in which he is interested. In any event, once the
foregoing conditions are satisfied, disclosure will have the effect of avoiding
the voidness or voidability of such a contract.
Three very important points on the effect of disclosure on directors’
statutory fiduciary duty to act honestly and with a view to the best interests of
the company were made by Lane J in the Ontario case of Levy-Russell Ltd v
Tecmotiv Ltd.52 The first is that there is nothing in the Acts to suggest that, by
disclosure, a director is relieved of this overriding duty to act honestly and
with a view to the best interests of the company. The second is that disclosure
is indeed part of acting in good faith, but it is not the whole scope of that duty.
The third is that, having made disclosure, a director is not free to act as he
pleases. Disclosure is just the first step. A director must thereafter continue to
place the interests of the company ahead of his own.
Effect of failure to disclose
Where an interested director or an officer of a company fails to disclose his

interest in accordance with the Acts, it is expressly provided in all the Acts
that the court may, upon the application of the company or a shareholder of
the company, set aside the contract on such terms as the court thinks fit.53 The
Acts do not expressly state whether this provision prejudices the operation of
the general no-conflict rule that the contract is not only voidable but that the
director is also liable to account,54 or whether that rule applies. But, given that
the purpose of the disclosure provisions is to afford protection to directors and
officers who disclose their interests and not to do away with the no-conflict
rule, it would be strange if the provision in the Acts authorising the courts to
set aside the contract where a director or officer failed to disclose were
interpreted as abolishing the strict no-conflict rule in a case where there is no
disclosure. In any event the power of the court to ‘set aside the contract on
such terms as the court thinks fit’ is sufficiently ample to allow the court to
order a director who fails to disclose to account.
A corollary of the foregoing is that a director or officer who fails to disclose
an interest in a contract may not claim from the company either on a quantum
meruit basis or as an equitable allowance for services rendered to the
company under that contract. This principle was applied in the important
English House of Lords’ case of Guinness plc v Saunders55 which decided that
the director concerned was not entitled to reasonable remuneration on a
quantum meruit or to an equitable allowance for special services rendered to
the company, as his personal interests conflicted with his duty as a director. A
payment of £5.2m made to him by a committee of three directors (including
himself) and not authorised by the full board as required by the articles could
not be retained and was held by him on a constructive trust for the company.
The judgment of Lord Goff is of particular interest.56 He observed that
directors’ duty not to put themselves in a position where there is a conflict
between their personal interests and their duties as fiduciaries means that they
are precluded from contracting with the company for their services except as
authorised by the company’s articles of association and the general law of
companies. He pointed out that it would be inconsistent with this principle to
award remuneration in such circumstances as of right on a quantum meruit
basis. He opined that the principle, however, does not altogether exclude the
possibility of an equitable allowance in respect of services rendered. Such an
allowance was available only if it did not conflict with the policy underlying
the principle, namely, that it must not encourage fiduciaries to put themselves
in a position where their personal interests conflict with their duties as
fiduciaries. In the present case an equitable allowance was not available as the
interests of the director concerned were in violent conflict with his duty as
director of Guinness.
Common Law No-Profit Duties
Applicability of common law no-profit rules
Given the provisions in Commonwealth Caribbean Companies Acts similar to

section 95 of the Barbados Act which imposes a fiduciary duty on directors to
act honestly and with a view to the bests interests of the company,57 and the
provisions imposing a duty to disclose material interest in contracts with their
company,58 it is easy to raise an argument that these provisions can be
interpreted as exhausting the fiduciary duties applicable to directors. In other
words, these statutory interventions may be interpreted as extinguishing other
fiduciary duties imposed on directors at common law. It is submitted,
however, that there are a number of reasons why these provisions cannot be
so interpreted.
One reason why the Acts cannot be so interpreted is that the language of
the provisions in the Acts similar to section 95(3) of the Barbados Act59 argues
against such a conclusion. This subsection states that the duty imposed by the
provisions similar to section 95(2) of the Barbados Act60 to have regard to the
company’s employees as well as the interests of the company’s shareholders in
determining what is the best interests of the company is ‘enforceable in the
same way as any other fiduciary duty owed to the company by its directors’.
Clearly, this suggests that the Acts contemplate that fiduciary duties, other
than that in section 95(1) of the Barbados Act and the corresponding provision
in the other Acts,61 are enforceable against directors.
A second reason is that the other fiduciary principles are so firmly
entrenched in the common law that it would be strange if anything other than
an express statutory exclusion would be effective to oust these other common
law fiduciary principles. Yet a third reason is that the statutory formulation in
regional provisions similar to section 95(1) of the Barbados Act62 was, in any
event, not intended to replace or codify the common law. Rather, according to
the Federal Proposals, ‘its purpose is simply, and perhaps gratuitously, to give
statutory support to principles that are as difficult to apply as they are well
understood’.63
For the foregoing reasons, it seems clear that what has been described as
the statutory fiduciary duties of directors64 do not define the limits of directors’
fiduciary duties in the Commonwealth Caribbean.65 There is little doubt that
one major common law duty to which directors in the Commonwealth
Caribbean remain subject is the no-profit rule.
No-profit rule stated
It is an inflexible rule of equity that a person standing in a fiduciary position is

not, unless otherwise expressly allowed, entitled to profit from his position.
This rule is often referred to as the rule in Keech v Sandford,66 the leading
English House of Lords trust case, in which the rule was first firmly
established. The leading company law case applying this rule is the English
case of Regal (Hastings) Ltd v Gulliver.67 The facts of this case are that Regal
(Hastings) Ltd owned one cinema and the directors of that company decided
to acquire long leases of two other cinemas with a view to selling all three as a
going concern. For this purpose they formed a subsidiary, Hastings
Amalgamated Cinemas Ltd, to take a lease of the other two cinemas.
However, the owner of the cinemas was only willing to grant the leases if the
fully paid-up capital of the subsidiary was £5,000 or if the directors of Regal
gave personal guarantees for the rent.
The directors were not willing to give personal guarantees and Regal was
unable to subscribe in cash more than 2,000 £1 shares in the subsidiary.
Accordingly, the original plan was changed. Instead of Regal subscribing for
all the shares in the subsidiary, Regal took up 2,000 £1 shares and the
remaining 3,000 £1 shares were taken by the directors and their friends. The
deal went through with the subsidiary acquiring the leases. Then, instead of
selling the undertaking, all the shares in Regal and the individually held shares
in the subsidiary were sold. A profit of about £3 was made on each share in
the subsidiary. The new controllers of Regal caused it to bring an action
against the former directors to recover the profit they had made.
To fully appreciate the gravamen of the decision in this case, it is important
to underline two aspects of the facts of the case. The first is that recovery by
the company could only benefit the purchasers, who stood to recover a
windfall which would result in the reduction of the price which they had
freely agreed to pay. The second is that it appears that the directors had held a
majority of the shares in the company which would have allowed them to
obtain a ratification of their action by the company in general meeting.
Despite all of this, the House of Lords unanimously held, applying the rule
in the case of Keech v Sandford,68 that the former directors were liable to
account. In the words of Lord MacMillan only two things had to be established
for this rule to apply, namely:
(i) that what the directors did was so related to the affairs of the company that it can properly be said to
have been done in the course of their management and in the utilisation of their opportunities and special
knowledge as directors; and (ii) that what they did resulted in a profit to themselves.69
It is to be noted also that the fact that the directors had acted bona fide
throughout was immaterial. As Lord Russell observed:70
The rule of equity which insists on those, who by use of a fiduciary position make a profit, being liable to
account for that profit, in no way depends on fraud, or absence of bona fides; or upon such questions or
considerations as whether the profit would or should otherwise have gone to the plaintiff, or whether the
profiteer was under a duty to obtain the source of the profit for the plaintiff, or whether he took a risk or
acted as he did for the benefit of the plaintiff, or whether the plaintiff has in fact been damaged or
benefited by his action. The liability arises from the mere fact of a profit having, in the stated
circumstances, been made. The profiteer, however honest and well-intentioned, cannot escape the risk of
being called upon to account.
Regal Hastings, then, is clear authority for the principle that directors,
occupying, as they do, a fiduciary position, must not make a profit by reason
thereof. This principle has been especially invoked (i) in instances of directors
making profits as a result of opportunities presented to them by reason of
their position as corporate directors, and (ii) in instances where directors use
information acquired by virtue of their position as directors to trade to their
advantage in the securities of the company, insider trading. These instances
will be considered separately.
Misuse of corporate opportunities or information
Company has a continuing interest in opportunity
The leading case on the use of corporate opportunity by directors where the
company has a continuing interest in the opportunity is Cook v Deeks.71 The
facts of this case are that the Toronto Construction Co Ltd was very successful
in obtaining construction contracts from the Canadian Pacific Rly Co. Three of
four directors and shareholders of the Toronto Construction Co Ltd diverted a
contract in which that company was interested to another company which
they had formed. The three directors later used their controlling interest as
shareholders of Toronto Construction Co Ltd to secure the passing of a
resolution, inter alia, to declare that that company claimed no interest in the
contract.
The Privy Council held that the opportunity to obtain the contract had come
to the directors in their capacity and by virtue of their position as directors.
The contract was therefore one which in equity belonged to the company and
that the directors must be regarded as holding the benefits of the contract on
trust for the company. Their Lordships pointed out that directors, holding a
majority of shares, would not be permitted to make a present of the benefits
of the contract to themselves.72
The application of the rule against a director profiting from an opportunity
obtained in his capacity as director in this case was relatively straightforward.
The company had a continuing interest in the contractual opportunity, but was
denied it because the three directors used their position to divert the
opportunity to themselves. This case does not cover, however, two more
complicated instances of directors using corporate opportunities to make a
personal profit. These are, first, where the company could not in any event
secure the opportunity from which the director has profited, and second,
where the company considered and rejected the opportunity from which the
director subsequently profited.
Company unable to secure opportunity or use information
Let us take first of all the scenario where the company could not in any event
secure the opportunity. In such a case, as we have seen, Regal Hastings
suggests a strict approach, namely, that where the director has used the
opportunity or information to make a profit, the fact that the company could
not have secured the opportunity or turn the information to profit for itself is
irrelevant.73 According to Regal Hastings, the only question is whether the
profit or opportunity to make the profit was acquired by the directors by
reason of their position as directors and in the course of their fiduciary
relationship.74
The strict approach suggested by Regal Hastings was applied by Roskill J in
the leading English case of Industrial Development Consultants v Cooley.75 The
facts of this case are that the defendant was the managing director of the
plaintiff company. He entered into negotiations with the Eastern Gas Board in
this capacity to secure certain contracts for the company. The Gas Board
indicated that it would offer the contracts only to him personally and not to
the company. The defendant immediately resigned and personally took up the
contracts from the Gas Board.
Roskill J held that the defendant was liable to account as he had deliberately
concealed from the company information about the opportunity which he had
obtained in his capacity of managing director and had taken steps to turn the
information to personal advantage. Roskill J said:
Information which came to him while he was managing director and which was of concern to the plaintiffs
and relevant for the plaintiffs to know, was information which it was his duty to pass on to the plaintiffs.76
It is noteworthy that Roskill J in applying the Regal Hasting approach was not
concerned with any consideration other than that ‘if the defendant is not
required to account he will have made a large profit as a result of having
deliberately put himself into a position in which his duty to the plaintiffs who
are employing him and his personal interests conflicted.’77 The fact that, in the
words of Roskill J, ‘it is unlikely that they [the company] would have got it for
themselves had the defendant complied with his duty to them’78 was an
irrelevant consideration.
The English Court of Appeal adopted the approach in Industrial
Development Consultants v Cooley79 in the later case of Bhullar v Bhullar, Re
Bhullar Bros Ltd.80 The simple facts of this case were that the directors of a
family company acquired property adjacent to the company’s premises.
However, even though they knew that the property would have been
attractive to the company, they did not disclose to the company that the
property was up for sale. The Court of Appeal held that, notwithstanding the
fact that negotiations were underway for the sale of the company’s business,
the directors were in breach of their fiduciary duty to the company and
consequently held the property in trust for the company. Jonathan Parker LJ
quipped:81
Whether the Company could or would have taken that opportunity, had it been made aware of it, is not the
point: the existence of the opportunity was information which it was relevant for the Company to know,
and it follows that the appellants were under a duty to communicate it to the Company.
The judgment of Laskin J in the Supreme Court of Canada case of Canadian

Aero Services Ltd v O’Malley,82 on the other hand, suggests a more flexible
approach when testing the conduct of the director than was applied in
Industrial Development Consultants v Cooley83 and Bhullar v Bhullar, Re
Bhullar Bros Ltd.84 In the Canadian Aero Service case, the president and
executive vice-president of a company were held liable to account where,
having actively pursued a contract on behalf of the company, which the
company had been eager yet unlikely to win, they resigned, formed a new
company and acquired the contract for the new company. Laskin J admitted
that a strict standard governs directors’ fiduciary duties. Of this he said:85
An examination of the case law … shows the pervasiveness of a strict ethic in this area of the law. In my
opinion this ethic disqualifies a director or senior officer from usurping for himself or diverting to another
person or company with whom or with which he is associated a maturing business opportunity which his
company is actively pursuing; he is also precluded from so acting even after his resignation where the
resignation may fairly be said to be prompted or influenced by a wish to acquire for himself the
opportunity sought by the company, or where it was his position with the company rather than a fresh
initiative which led him to the opportunity which he later acquired.
Laskin J, however, expressed the view that it would be a mistake to try to

apply this rule solely by a consideration of the special knowledge acquired
while acting as director or the benefits acquired by reason of and during the
holding of that office. He said:86
In holding that on the facts found by the trial judge there was a breach of fiduciary duty by [the
defendants] which survived their resignation … [t]he general standards of loyalty, good faith and avoidance
of conflict of duty and self-interest to which the conduct of a director or senior officer must conform, must
be tested in each case by many factors which it would be reckless to attempt to enumerate exhaustively.
Among them are the factor of position or office held, the nature of the corporate opportunity, its ripeness,
its specificness and the director’s or managerial officer’s relation to it, the amount of knowledge possessed,
the circumstances in which it was obtained and whether it was special or, indeed, even private, the factor
of time in the continuation of the fiduciary duty where the alleged breach occurs after termination of the
relationship with the company, and the circumstances under which the relationship was terminated, that is
whether by retirement or resignation or discharge.
The strict approach of Roskill J in Industrial Development Consultants v

Cooley87 and the more flexible approach suggested by Laskin J in Canadian
Aero Service were considered by Hutchinson J in the English decision of Island
Export Finance Ltd v Umunna88 where Hutchinson J accepted the more
flexible approach advocated by Laskin J. The facts of Island Export Finance
are that Umunna was the managing director of IEF, a company which
specialised in seeking business in West Africa. In 1976, he secured a contract
for IEF from the Cameroon postal authorities. In 1977, he resigned as
managing director due to dissatisfaction with the company. He subsequently
obtained orders for his own company from the Cameroon postal authorities.
IEF brought an action alleging that Umunna was in breach of his fiduciary
duties even after his resignation.
Hutchinson J held that there was no breach by Umunna of his fiduciary
duty. In arriving at this conclusion, Hutchinson J, not only considered
Umunna’s capacity as IEF’s former managing director, but also examined the
nature of the opportunity which IEF was claiming as a corporate opportunity.
In particular, the fact that neither when Umunna resigned nor when he got the
orders was IEF actively pursuing further business with the Cameroon
authorities. Hutchinson J also considered the circumstances of Umunna’s
resignation, namely, that the even though Umunna may have in a general way
contemplated that on resignation that the Cameroon authorities might be a
good source of business for his company, the exploitation of that opportunity
was not his primary or indeed an important motive in his resignation.
The more flexible approach in Island Export Finance Ltd v Umunna89 was
adopted in the two fairly recent English Court of Appeal decisions in In Plus
Group Ltd v Pyke90 and Foster Bryant Surveying Ltd v Bryant.91
Company considers and rejects opportunity
The second scenario to be considered is where a director exploits an

opportunity which the company has been offered but which the board has
duly considered and rejected. Here, the English authority of Regal Hastings
would clearly preclude directors from exploiting the opportunity.
Commonwealth authorities appear to adopt a more flexible approach to the
problem, however.
The more flexible approach is evident, for instance, in the Canadian case of
Peso Silver Mines Ltd v Copper.92 In this case, a mining company was offered
an opportunity to acquire certain mineral claims. The opportunity was rejected
by the board because of the company’s strained finances and because the
company was thought to already have enough land. Three of the Peso
directors then personally acquired the claims at the price for which the claims
had been offered to Peso.
Subsequently, there was a change of directors at Peso and an action was
brought against the three directors for an account of the profits they had
realised. The Canadian Supreme Court accepted that the directors were in a
fiduciary relationship with Peso. This notwithstanding, that Court, relying on
dicta of Lord Greene in the Court of Appeal in Regal Hastings to the effect
that it was carrying the duties of directors too far to suggest that if the board
bona fide rejected an opportunity that an individual director could not acquire
it, took the view that, because the board had rejected the opportunity bona
fide and for sound business reasons, the directors could in those circumstances
take the opportunity for themselves. For these reasons the Court refused to
hold the directors accountable.
A similar approach was adopted by the Privy Council in the Australian
decision in Queensland Mines Ltd v Hudson.93 In this case, Queensland was
formed to exploit mining licences. Hudson, the managing director of
Queensland, was negotiating with the government for the licences when the
company ran into severe financial difficulties. Hudson took the licences in his
own name, subsequently resigned as managing director, formed his own
company to exploit the licences and eventually made substantial profits. The
directors of Queensland brought an action for an account for these profits. The
Privy Council held that as the director had disclosed the contract to and had
discussed it with the board and they had resolved not to pursue the contract
further, the director was entitled to take up the contract personally and to
retain any profit.
It appears from these cases that the critical consideration is whether the
opportunity was rejected by the directors bona fide and for sound business
reasons. As long as this is established, a director is free to take the opportunity
personally and exploit it.
Duty to Avoid Competition
One important situation in which conflict between a director’s private
interests and his duties may arise is where a director carries on or is associated
with a business competing with that of his company. Here, the question arises
as to whether the general equitable rule that fiduciaries, except with the
consent of their cestuis que trust, are under a strict duty not to compete with
their cestuis que trust,94 applies to directors.
There is some case authority in London and Mashonaland Exploration Co v
New Mashonaland Exploration Co95 to the effect that there is no principle
preventing a director from acting as a director of a rival company. This case
involved an interlocutory motion for an injunction to restrain a dummy
director who had never acted as a director or attended a meeting of the
plaintiff company from acting as a director of a competing company. Chitty J
refused to grant the injunctive relief on the principle that there is nothing
inherently wrong in the position of a company director who, without
breaching any express restrictive agreement or disclosing any confidential
information, becomes engaged, as a director of another company, in the same
business. The reasoning of Chitty J was applied with approval by Lord
Blanesburgh in the English House of Lords decision of Bell v Lever Bros.96
In the fairly recent decision of In Plus Group Ltd v Pyke,97 the English Court
of Appeal expressed some unease with the Mashonaland decision but declined
to engage in a delimitation of the scope of that decision. Sedley LJ remarked:
If one bears in mind the high standard of probity which equity demands of fiduciaries, and the reliance
which shareholders and creditors are entitled to place upon it, the Mashonaland principle is a very limited
one … A directorship brings with it not only voting rights and emoluments, but responsibilities of
stewardship and honesty, and those who cannot discharge them should not become or remain directors.
With this in mind, all three judges in In Plus Group Ltd v Pyke98 appear to
indicate that the Mashonaland decision is to be seen not as laying down any
rule that directors are in principle permitted to compete with their companies,
but as a case which is, in the words of Sedley LJ, ‘fact-specific’.99 In sum, the In
Plus Group Ltd v Pyke100 case, without deciding the matter, seems to suggest
that the question as to whether the rule against competition applies depends
on the facts of each case.
Conclusion
Directors and officers of a company are, in Commonwealth Caribbean
company law, under a strict duty to avoid any conflict between self-interest
and the interest of their company. Naturally, breaches of this fiduciary duty of
loyalty may occur in a number of situations. It is clear from this chapter that
breaches of this duty are dealt with in the Commonwealth Caribbean in two
different ways. First, all the Acts, except the Act in Belize, contain a detailed
statutory regime regulating a director’s or officer’s duty to disclose his interest
in a corporate transaction. Second, breaches of directors’ and other officers’
general duty to avoid conflict of duty and interests are left to be governed by
common law rules. The student of Commonwealth Caribbean company law
must therefore look beyond the Companies Acts in studying directors’
fiduciary duty of loyalty.
Notes
1 See generally Conaglen, ‘The Nature and Function of Fiduciary Loyalty’ (2005) 121 LQR 452.
2 Quarter Master UK Ltd v Pyke [2005] 1 BCLC 245, 263 per Paul Morgan QC, sitting as a Deputy Judge.
3 See Chan v Zacharia (1984) 154 CLR 178, 198; Don King Productions Inc v Warren [2000] 1 BCLC 607, 629–
630; Gencor ACP Ltd v Dalby [2000] 2 BCLC 734, 741 Eng Ch D.
4 See, e.g., Cook v Deeks [1916] AC 554 PC.
5 See Quarter Master UK Ltd v Pyke [2005] 1 BCLC 245, 263 per Paul Morgan QC, sitting as a Deputy Judge;
CMS Dolphin Ltd v Simonet [2001] 2 BCLC 704, 733 Eng Ch D.
6 Ang s 91(1); Ant s 91(1); Bah s 107(1); B’dos s 89(1); Dom s 91(1); Gren s 91(1); Guy s 90(1); J’ca s 193(1);
8 Discussed below.
9 (1854) 1 Macq 461 HL Sc.
10 (1854) 1 Macq 461, 471–472 HL Sc.
11 See Boulting v Association of Cinematograph, Television and Allied Technicians [1963] 2 QB 606, 637–638
Eng CA per Upjohn LJ; Boardman v Phipps [1967] 2 AC 46 Eng HL.
12 [1988] BCLC 104 Eng Ch D.
13 See also Boulting v Association of Cinematograph, Television and Allied Technicians [1963] 2 QB 606, 635
per Upjohn LJ Eng CA; Guinness plc v Saunders [1990] 2 AC 663 Eng HL.
14 See Movitex Ltd v Bulfield [1998] BCLC 104, 114 Eng Ch D.
15 Imperial Mercantile Credit Association v Coleman (1871) LR 6 Ch App 558, 567–568 per Lord Hatherley Eng
CA.
16 See Boulting v Association of Cinematograph, Television and Allied Technicians [1963] 2 QB 606, 636 Eng
CA per Upjohn LJ; Boardman v Phipps [1967] 2 AC 46 Eng HL; Guinness plc v Saunders [1990] 2 AC 663
Eng HL.
17 Rhyolite Resources Inc v CanQuest Resource Corpn (1990) 50 BLR 275 BC SC.
18 Ang s 93; Ant s 93; Bah s 113; B’dos s 91; Dom s 93; Gren s 93; Guy s 92; J’ca s 193(7); Mont s 93; St C/N: no
similar provision; St L s 93; St V s 93; T’dad s 95.
20 (1998), 43 BLR 124 Alta QB.
21 (2003) 42 BLR (3d) 75 Alta QB.
22 (2005 11BLR (4th) 311 Ont SCJ.
J’ca s 193(1)(a); Mont s 91(1)(a); St C/N s 75(1); St L s 91(1)(a); St V s 91(1)(a); T’dad s 93(1)(a).
24 Ang s 91(1)(b); Ant s 91(1)(b); Bah s 107(1)(b); B’dos s 89(1)(b); Dom s 91(1)(b); Gren s 91(1)(b); Guy s 90(1)
(b); J’ca s 193(1)(b); Mont s 91(1)(b); St C/N s 75(1); St L s 91(1)(b); St V s 91(1)(b); T’dad s 93(1)(b).
25 J’ca s 193(1)(c).
26 Costa Rica Railway v Forwood [1901] 1 Ch 746 Eng CA.
27 Liquidators of Imperial Mercantile Credit Assn v Coleman (1873) LR 6 HL 189, 200 Eng HL.
29 [1952] 3 DLR 1 PC. See also, Redekop v Robco Construction Ltd (1978) 89 DLR (3d) 507 SCC.
J’ca s 193(4)(a)(i); Mont s 91(2)(a); St L s 91(2)(a); St V s 91(2)(a); T’dad s 93(2)(a).
(b); J’ca s 193(4)(a)(ii); Mont s 91(2)(b); St L s 91(2)(b); St V s 91(2)(b); T’dad s 93(2)(b).
32 Ang s 91(2)(c); Ant s 91(2)(c); Bah s 107(2)(c); B’dos s 89(2)(c); Dom s 91(2)(c); Gren s 91(2)(c); Guy s 90(2)(c);
J’ca s (4)(b)(iv); Mont s 91(2)(c); St L s 91(2)(c); St V s 91(2)(c); T’dad s 93(2)(c).
33 Ang s 91(2)(d); Ant s 91(2)(d); Bah s 107(2)(d); B’dos s 89(2)(d); Dom s 91(2)(d); Gren s 91(2)(d); Guy s 90(2)
(d); J’ca s 193(4)(a)(iii); Mont s 91(2)(d); St L s 91(2)(d); St V s 91(2)(d); T’dad s 93(2)(d).
J’ca s 193(4)(b)(i); Mont s 91(3)(a); St L s 91(3)(a); St V s 91(3)(a); T’dad s 93(3)(a).
(b); J’ca s 193(4)(b)(ii); Mont s 91(3)(b); St L s 91(3)(b); St V s 91(3)(b); T’dad s 93(3)(b).
J’ca s 193(4)(b)(iii); Mont s 91(3)(c); St L s 91(3)(c); St V s 91(3)(c); T’dad s 93(3)(c).
37 St C/N s 75(2).
39 Compare Campbell’s Case (1876) 4 Ch D 470.
Mont s 91(4); St C/N s 75(2)St L s 91(4); St V s 91(4); T’dad s 95(4).
41 Wade v Kendrick (1905) 37 SCR 32, 53 SCC; Re North Eastern Insurance Co [1919] 1 Ch 198 Eng Ch D.
42 Ang s 91(5); Ant s 91(5); Bah s 107(5); B’dos s 89(5); Dom s 91(5); Gren s 91(5); Guy s 90(5); Mont s 91(5); St L
s 91(5); St V s 91(5); T’dad s 93(5).
46 Ang s 91(5)(d); Ant s 91(5)(d); Bah s 107(5)(d); B’dos s 89(5)(d); Dom s 91(5)(d); Gren s 91(5)(d); Guy s 90(5)
(d); Mont s 91(5)(d); St L s 91(5)(d); St V s 91(5)(d); T’dad s 93(5)(d).
47 Ang s 91(5)(e); Ant s 91(5)(e); Bah s 107(5)(e); B’dos s 89(5)(e); Dom s 91(5)(e); Gren s 91(5)(e); Guy s 90(5)(e);
Mont s (91(5)(e); St L s 91(5)(e); St V s 91(5)(e); T’dad s 93(5)(e).
48 J’ca s 193(2).
49 J’ca s 193(2).
50 Ang s 92; Ant s 92; Bah s 107(6); B’dos s 90; Dom s 92; Gren s 92; Guy s 91; J’ca s 193(6); Mont s 92; St C/N s
75(3); St L s 92; St V s 92; T’dad s 94.
51 Ang s 93; Ant s 93; Bah s 108; B’dos s 91; Dom s 93; Gren s 93; Guy s 92; J’ca s 193(7); Mont s 93; St L s 93;
52 (1994) 13 BLR (2d) 1 Ont Gen Div.
53 Ang s 94; Ant s 94; Bah s 109; B’dos s 92; Dom s 94; Gren s 94; Guy s 93; J’ca s 193(8); Mont s 94; St C/N s
76(1); St L s 94; St V s 94; T’dad s 96.
54 See Boulting v Association of Cinematograph, Television and Allied Technicians [1963] 2 QB 606, 635 per
Upjohn LJ Eng CA; Guinness plc v Saunders [1990] 2 AC 663 Eng HL.
55 [1990] 2 AC 662 Eng HL.
56 [1990] 2 AC 663, 700–701 Eng HL.
57 See Ang s 97; Ant s 97; Bah s 81; Dom s 97; Gren s 97; Guy s 96; J’ca s 174; Mont s 97; St C/N s 74; St L s 97;
59 See Ang s 97(3); Ant s 97(3); Bah s 81(3); Dom s 97(3); Gren s 97(3); Guy s 96(3); Mont s 97(3); St L s 97(3); St
V s 97(3); T’dad s 99(3).
60 See Ang s 97(2); Ant s 97(2); Bah s 81(2); Dom s 97(2); Gren s 97(2); Guy s 96(2); J’ca: similar provision in s
174(4), but not relevant because there is no provision corresponding to B’dos s 95(3); Mont s 97(2); Mont s
97(2); St L s 97(2); St V s 97(2); T’dad s 99(2).
64 Peoples Department Stores Inc (Trustee of) v Wise [2004] 3 SCR 462 SCC.
65 See Levy-Russell Ltd v Tecmotiv Ltd (1994) 13 BLR (2d) 1 Ont Gen Div per Lane J.
66 (1726) Sel Cas t King 61.
67 [1967] 2 AC 134n Eng HL.
68 (1726) Sel Cas t King 61.

69 [1967] 2AC 134n, 153 Eng HL.
70 [1967] 2 AC 134n, 144 Eng HL.
71 [1916] AC 554 PC.
72 [1916] AC 554, 564 PC.
73 [1967] 2 AC 134n Eng HL.
74 [1967] 2 AC 134n, 153 per Lord MacMillan Eng HL.
75 [1972] 2 All ER 162.
76 [1972] 2 All ER 162, 173.
77 [1972] 2 All ER 162, 174.
78 Ibid.
79 [1972] 2 All ER 162.
80 [2003] 2 BCLC 241 Eng CA.
81 [2003] 3 BCLC 241, 252 Eng CA.
82 (1974) 40 DLR (3d) 371 SCC.
83 [1972] 2 All ER 162.
84 [2003] 3 BCLC 241 Eng CA.
85 (1974) 40 DLR (3d) 371, 382 SCC.
86 (1974) 40 DLR (3d) 371, 390 SCC.
87 [1972] 2 All ER 162.
88 [1986] BCLC 460.
89 Ibid.
90 [2002] 2BCLC 201 Eng CA.
91 [2007] 2 BCLC 239 Eng CA.
92 (1966) 58 DLR (2d) 1 SCC.
93 (1978) 52 ALJR 399 PC.
94 See e.g., Re Thompson [1930] 1 Ch 203.

95 [1891] WN 165.
96 [1932] AC 161, 193–196 Eng HL. But see the criticism of this case by Christie, ‘The Director’s Fiduciary
Duty not to Compete’ (1992) 66 MLR 506.
97 [2002] BCLC 201, 214 Eng CA.
98 [2002] BCLC 201 Eng CA.
99 [2002] BCLC 201, 215 Eng CA.
100 [2002] BCLC 201 Eng CA.

Chapter 13
Directors’ Statutory Non-Fiduciary
Duties
Introduction
Except in Belize, Commonwealth Caribbean Companies Acts impose one or
both of two important non-fiduciary duties on directors. The first of these is
contained in a provision which typically stipulates that a director in
discharging his duties must exercise the care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances.1 The
second is contained in a provision in the Acts in Anguilla, Antigua, the
Bahamas, Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago that every director and officer of a company
must comply with the Act in question and the regulations, and with the
articles and bye-laws of the company, and any unanimous shareholder
agreement relating to the company.2 These two statutory duties may be
classified as statutory non-fiduciary duties.
The oft-cited analysis of the distinction between fiduciary and non-fiduciary
duties of Millett LJ in the English Court of Appeal decision in Bristol & West
Building Society v Mothew3 is useful in understanding the juridical
classification of these duties as non-fiduciary duties. In that case, Millett LJ
explained that the core of fiduciary duties is loyalty and that, consequently,
breach of fiduciary duties is primarily about disloyalty. He further explained
that breach of fiduciary duties attracts legal consequences different from those
consequent upon breach of other duties. Breach of fiduciary duties attracts
equitable remedies which are primarily restitutionary or restorative rather
than compensatory, as is usually the case for breach of non-fiduciary duties.
The statutory duties to exercise care, diligence and skill and to comply with
the Acts and regulations, articles and bye-laws and any unanimous
shareholder agreement are not concerned with disloyalty. Similarly, breach of
either of these duties does not attract restitutionary or restorative remedies.
The remedies for breach of these duties are compensatory remedies. For these
reasons, then, these two statutory duties are lumped together in this chapter
under the rubric of statutory non-fiduciary duties, and each of these duties
examine separately.
Duty Of Care, Diligence and Skill
All Commonwealth Caribbean Companies Acts which impose a duty of care,

diligence and skill on directors, except the Jamaican Act, contain a provision
identical to section 95(1)(b) of the Barbados Act.4 This provision imposes a
duty on directors to ‘exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances’.
Section 174(1)(b), (2) and (3) of the Jamaican Act spell out in much greater
detail the duty of care and skill expected of directors. Section 174(1)(b)
provides that directors shall ‘exercise the care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances,
including, but not limited to, the general knowledge, skill and experience of
the director or officer’. Section 174(2) provides further that ‘a director or
officer shall not be in breach of his duty of [care, diligence and skill] if the
director or officer exercised due care, diligence and skill in the performance of
that duty or believed in the existence of facts that, if true, would render the
director’s or officer’s conduct reasonably prudent’. Finally, section 174(3)
provides that ‘a director or officer shall be deemed to have acted with due
care, diligence and skill where, in the absence of fraud or bad faith, the
director or officer reasonably relied in good faith on documents relating to the
company’s affairs, including financial statements, reports of experts or on
information presented by other directors or, where appropriate, other officers
and professionals.’
Content of the statutory duty

Overview
It is apparent from the foregoing that the provisions in regional statutes,

including the Jamaican statute, impose on directors a duty of ‘care, diligence
and skill’ on the ‘reasonably prudent person’ standard. This statutory
formulation is intended to upgrade the common law duty of care and skill.5
However, the Acts provide little or no guidance as to the content of this duty.
Thus, to better understand these provisions, it is advisable to interpret them in
the context of the common law which they are intended to upgrade.
The common law on directors’ duty of care and skill must start with the
English decision in Re City Equitable Fire Ins Co.6 In this case, Romer J
reviewed the existing case law at that time and concluded that the duty of
care and skill involved three basic elements. These relate to competence and
care, to diligence and devotion to the company’s affairs and to the proper
delegation of their duties. The statutory provisions in the region appear to
have captured these three elements in the concept of ‘care, diligence and skill’.
These elements are complementary but disparate and will be considered
separately.
‘Care’ and ‘skill’ in conducting company’s affairs
The words care and skill in the provisions in regional Companies Acts similar
to section 95(1)(b) of the Barbados Act7 appear to be an enactment of the
common law duty of competence and care.8 Canadian cases applying
provisions in pari materia with these regional provisions have not sought to
develop any general principles as to what constitutes a breach of the statutory
duty of care and skill. On the other hand, the Supreme Court of Canada has
pointed out that, when applying the duty of care and skill, the courts will
recognise the difficulties by a posteriori analysis of decisions of directors taken
in the heat of action.9 Directors are entitled to make mistakes; but they must
act reasonably and fairly. The question for the courts is whether the directors
made a reasonable decision, not a perfect one.10
Two English cases are instructive examples of what may be held to
constitute a breach of the statutory duty of care. The first is the case of Re
D’Jan of London Ltd.11 In this case, a director signed without reading a simple
insurance proposal form which contained inaccurate information. The
insurance company subsequently repudiated liability on the policy when the
company’s stock was damaged by fire. It was held that the director was in
breach his duty of care.
The second is the case of Re Continental Assurance Co of London plc,
Secretary for Trade and Industry v Burrow.12 In this case, an insurance
company made transfers of assets to its parent company in breach of the
provisions of the Companies Act 1985 (UK) governing financial assistance for
the purchase of a company’s own shares. It was found that a non-executive
director of the insurance company, who was a corporate financier, and who
was also a non-executive director of the parent company had no knowledge of
the giving of the financial assistance as a result of his failure to read the
accounts of the parent company which would have given him the necessary
information. On these facts, Chadwick J held that the director had fallen short
of the minimum standard of competence expected of a director of his
knowledge and experience. A director who was a corporate financier should
be prepared to read and understand statutory accounts, and to satisfy himself
that transactions between the companies were properly reflected in the
accounts.
‘Diligence’ in conducting the company’s affairs
The reference to ‘diligence’ in the provisions in regional Companies Acts,

similar to section 95(1) (b) of the Barbados Act,13 captures two important
aspects of directors’ duty of care and skill. These are devotion to the affairs of
the company, and the delegation of directorial powers and duties.
Devotion to the company’s affairs

A very important question in the duty on directors to exercise diligence
concerns the extent to which a director is required to devote himself to the
affairs of his company. In Re City Equitable Fire Ins Co, Romer J in considering
this question, stated:14
A director is not bound to give continuous attention to the affairs of the company. His duties are of an
intermittent nature to be performed at periodical board meetings, and at meetings of any committee of the
board upon which he happens to be placed. He is not, however, bound to attend all such meetings, though
he ought to attend whenever in the circumstances he is reasonably able to do so.
In the older cases, this statement has been interpreted as imposing only a
minimal standard of diligence on directors, so that even non-attendance for
substantial periods of time, in one case four years,15 was held not to amount to
a breach of this standard. Statements of Major and DesChamps JJ in the
Supreme Court of Canada in Peoples Department Stores Inc (Trustees of) v
Wise16 strongly suggest that this minimalist approach to the director’s duty to
attend to the affairs of the company has been replaced in the provisions in
regional statutes by a higher standard.
It is submitted that the English case of Dorchester Finance Co Ltd v
Stebbing17 provides a good illustration of the standard which is required by
the provisions in regional statutes. The brief facts of this case are that no board
meetings were held, and two of the three directors rarely visited the
company’s premises or monitored the company’s accounting records. Losses
were incurred when unsecured loans were made by the third director which
subsequently turned out to be irrecoverable. Foster J held all three directors,
including the two inactive directors who had acted bona fide throughout,
liable. The inactivity of the two directors was sufficient to amount to a breach
of their duty of diligence.
The foregoing notwithstanding, it must be noted that the provisions in
regional statutes do not impose any duty on a director to undertake a
definitive role in the conduct of the company’s affairs. The statutory standard
of ‘a reasonably prudent person in comparable circumstances’ means that the
existence of a duty on a director to participate in the company’s affairs
depends upon how the particular company’s business is organised and the part
which the director could reasonably be expected to play.
Delegation and the management mandate
Another important aspect of directors’ duty to exercise diligence is the

question of the extent to which directors can justifiably rely on employees and
agents of the company in the day-to-day management of the company’s
affairs.18 This question is of particular importance given the exigencies of
business and the reality that directors as such are not expected to possess any
particular skill for the successful running of a business. This means that the
business success of a company depends upon the ability of directors to devolve
responsibility for the making of day-to-day managerial decisions in the
ordinary course of events to the company’s officers, agents and employees.
Except in Jamaica and St Christopher/Nevis, the practical necessity of
directorial reliance on the employees and agents of the company is recognised
in regional statutes in provisions which expressly mandate that directors must
exercise the powers of the company directly or indirectly through the
employees and agents of the company.19 It is clear from these provisions that
the statutes do not contemplate directors performing day-to-day managerial
functions. Rather, the statutes envision directors ‘directing the management of
the business and affairs of the company’20 or, in other words, monitoring the
employees and agents of the company who are responsible for the day-to-day
management of the company’s affairs. But, these statutes do not give any
indication as to the extent to which directors must supervise tasks performed
by the employees and agents of the company so as not to be in breach of their
duty of care, diligence and skill.
It is submitted that a logical conclusion from the statutory stipulation that
directors must exercise the company’s powers through its employees and
agents is that directors are entitled to rely on and trust these expert company
officials. The statement of Hoffmann J in the English case of Normand v
Theodore Goddard21 in defining the limits of justifiable reliance on experts by
non-executive directors in the modern context, that ‘business cannot be
carried on upon principles of distrust and men in responsible positions may be
trusted until there is some reason to distrust them’22 is a correct statement of
the law in the region. It is further submitted that this view of the law is
captured in section 174(3) of the Jamaican Act. Section 174(3) provides that ‘a
director or officer shall be deemed to have acted with due care, diligence and
skill where, in the absence of fraud or bad faith, the director or officer
reasonably relied in good faith on documents relating to the company’s affairs,
including financial statements, reports of experts or on information presented
by other directors or, where appropriate, other officers and professionals.’
The case of Normand v Theodore Goddard,23 provides a good illustration of
how the law will be applied under regional law. The facts of this case are that
a director relied on information regarding the company’s investments. This
information was supplied to him by a solicitor who was a partner in an
eminent firm of City solicitors, who had misappropriated the money rather
than investing it on the company’s behalf. Relying on this information, the
director did not check the safety and security of the investment. Hoffman J
held on these facts that the director was not in breach of his duty of care to the
company.
The earlier English case of Huckerby v Elliott24 is similarly instructive. In
that case, a director of a gaming club was held not to be in breach of his duty
of care where he failed to check whether the club had the appropriate licence
when the task of obtaining it had been delegated to someone else.
Perhaps, the most useful pointer to the limits of justifiable directorial
reliance under regional statutes is to be found in the Australian case of Daniels
v Anderson.25 In this case, the New South Wales Court of Appeal undertook a
careful review of the legal standard involved in directors’ duty of care and
skill, and in particular, the extent to which non-executive directors could rely
on others and trust them. The Court examined and adopted the standard
developed in the US courts. Accordingly, the Court held that the standard
required that all directors had a duty to acquire at least a rudimentary
understanding of the company’s business and to keep themselves informed
about its affairs. The standard did not require directors to perform detailed
inspections of the day-to-day activities of the company, but required them to
engage upon the general monitoring of its affairs and policies. The standard
also requires directors to maintain familiarity with the financial status of the
business by a regular review of its financial statements. These monitoring
functions cannot be met merely by relying on other people.
Standard of care, diligence and skill
Common law standard
In Re City Equitable Fire Ins Co,26 Romer J stated, with respect to the skill
involved in directors’ common law duty of care, diligence and skill, that ‘a
director need not exhibit in the performance of his duties a greater degree of
skill than may reasonably be expected from a person of his knowledge and
experience.’ This statement reflects the traditional view, which is still the law
in Belize, found in the older cases interpreting the test of care and skill as
subjective and as only requiring what can be reasonably expected of a director
by reference to the director’s own knowledge and experience, rather than by
reference to the functions which he performs.27 Under this view of directors’
duty of care, diligence and skill, a director need not possess any particular
skills to hold the position of director. As was said of a director in one case, ‘he
may undertake the management of a rubber company in complete ignorance
of everything connected with rubber’, and that errors of judgment resulting
from his ignorance do not result in liability.28
The problem with this interpretation of the standard of directors’ duty of
care and skill is that it in effect recognises incompetence as a defence. A highly
qualified and skilled director must observe a standard consistent with that
which can reasonably be expected of a director possessed of his skill and
qualification; a poorly qualified and unskilled director is only expected to
observe a standard consistent with that which can reasonably be expected of a
similarly poorly qualified and unskilled director.
Statutory standard
It is submitted that the provisions in regional Acts similar to section 95(1)(b) of

the Barbados Act29 have substituted the Re City Equitable Fire Ins Co30
subjective standard of skill with the objective standard of the ‘reasonably
prudent person’. The judgment of Major and DesChamps JJ in the Supreme
Court of Canada in Peoples Department Stores Inc (Trustees of) v Wise31
provides strong authority for this submission. In this judgment, in examining
section 122(1)(b) of the Canada Business Corporations Act, a section in pari
materia with the provisions in regional Acts similar to section 95(1)(b) of the
Barbados Act,32 it was said:33
The standard of care embodied in s. 122 (1) (b) of the CBCA was described by Robertson JA of the Federal
Court of Appeal in Sopher v Canada [1998] 1 FC 124, at para 41, as being ‘objective subjective’ … With
respect, we feel that Robertson JA’s characterisation of the standard as an ‘objective subjective’ one could
lead to confusion. We prefer to describe it as an objective standard. To say that the standard is an objective
makes it clear that the factual aspects of the circumstances surrounding the actions of the director or
officer are important in the case of the s. 122(1)(b) duty of care, as opposed to the subjective motivation of
the director or officer, which is the central focus of the statutory fiduciary duty of s. 122(1)(a) of the CBCA.
The formulation in section 174(1)(b) of the Jamaican Act, on the other hand,
suggests that the subjective test found in Re City Equitable Fire Ins. Co34 is
replaced by a partly subjective and partly objective standard. There are two
limbs to section 174(1)(b). The first limb requires the objective standard of the
‘reasonably prudent person’. The second limb adds the subjective standard of
‘the general knowledge, skill and experience of the director or officer’. The
second limb is to be ‘included’ as an aspect of the consideration of the
objective minimum standard of the ‘reasonably prudent person’. It is
submitted that the objective standard is a minimum standard which cannot be
lowered by the personal attributes of the director as otherwise, the subjective
standard would always apply. The purpose of including the subjective standard
is to obviate the courts setting unrealistically high standards.
Statutory defences to breach of care and skill duty

Under the Jamaican Act, provision is made for three statutory defences to a
breach of the care, diligence and skill duty. The first is that the director or
officer exercised due care, diligence and skill in the performance of the duty in
question.35 The second is that the director or officer believed in the existence
of facts that, if true, would render the director’s or officer’s conduct reasonably
prudent.36 The third is that the director or officer, without fraud or bad faith,
reasonably relied in good faith on documents relating to the company’s affairs,
including financial statements, reports of experts or on information presented
by other directors or, where appropriate, other officers and professionals. If
this is proved, the director or officer will be deemed to have acted with due
care, diligence and skill.37
Duty to Comply with the Act, Articles and
Unanimous Shareholder Agreement
The powers and duties of directors in Anguilla, Antigua, the Bahamas,
Trinidad and Tobago are to be found in the Companies Acts and regulations,
the articles of incorporation and bye-laws of the company, and in any
unanimous shareholders’ agreement relating to the company. It is hardly
surprising then that these Acts impose a duty on directors to exercise their
powers in compliance these instruments as follows:38
Every director and officer of a company must comply with this Act and the regulations, and with the
articles and bye-laws of the company, and any unanimous shareholder agreement relating to the company.
The express imposition of such a duty is particularly important in a company

law regime which has abolished the ultra vires doctrine39 and which no longer
declares the company’s constating documents a contract between shareholders
and company and shareholders inter se40 as it ensures that directors adhere to
the dictates of these documents.
Canadian case law on provisions in pari materia with this provision throws
some useful light on what is the effect of the provision.
In Angus v R. Angus Alberta Ltd,41 it was held that a provision in pari
materia with these regional provisions imposed on directors a duty owed to
shareholders to act according to law and according to the provisions of the
articles and bye-laws of the company. This duty is to be contrasted with the
statutory duty to act honestly and in good faith with a view to the best
interests of the company which is owed to the company alone.
The import of these provisions in respect of unanimous shareholder
agreements was considered in Power v Vitrak Systems Inc.42 In this case
Campbell J noted that generally agreements among shareholders addressing
such issues as voting rights and other arrangements give rise to contractual
obligations which are not considered legal or constitutional in nature.
However, the provision in the Canada Business Corporations Act which
requires every director and officer to comply with the Act, articles, bye-laws,
and unanimous shareholder agreement materially alters this position. As a
result of that provision, a unanimous shareholder agreement is to be read
along side the company’s constating documents and is to be considered in pari
materia with the company’s articles of incorporation. Consequently, a director
is accountable for failure to comply with a unanimous shareholder agreement.
Finally, the case of McActeer v Deconcraft Developments Ltd43 explains the
evidential value of the provision. In this case it was said that an implication of
the provision is that it is reasonable, in the absence of any evidence to the
contrary, to presume that directors and officers will comply with the relevant
Act, regulations, articles, bye-laws and any unanimous shareholders’
agreement.
Conclusion
Developing a statutory statement of directors’ and officers’ duties of care,
diligence and skill is problematic. Given that directors’ fees are usually
modest, difficult questions must arise as to extent to which directors should be
made liable to shareholders for breach of standards of care, diligence and skill.
met these difficulties by including provisions aimed at upgrading the common
law standards. Whether these provisions will have the effect raising the
standards of care, diligence and skill will depend very much on judicial
interpretation of these provisions.
Notes
J’ca s 174(1)(b); Mont s 97(1)(b); St C/N s 74(1)(b); St L s 97(1)(b); St V s 97(1)(b); T’dad s 99(1)(b).
s 97(4); St V s 97(4); T’dad s 99(4).
3 [1998] Ch 1, 16–18 Eng CA.
4 See Ang s 97(1)(b); Ant s 97(1)(b); Bah s 81(1)(b); Dom s 97(1)(b); Gren s 97(1)(b); Guy s 96(1)(b); Mont s 97(1)
(b); St C/N s 74(1)(b); St L s 97(1)(b); St V s 97(1)(b); T’dad s 99(1)(b).
5 Peoples Department Stores Inc (Trustees of) v Wise [2004] SCR 461 SCC; Cybulski v MNR [1988] 2 CTC 2180
TCC.
6 [1925] Ch 407 Eng Ch D.
7 See Ang s 97(1)(b); Ant s 97(1)(b); Bah s 81(1)(b); Dom s 97(1)(b); Gren s 97(1)(b); Guy s 96(1)(b); J’ca s 174(1)
(b); Mont s 97(1)(b); St C/N s 74(1)(b); St L s 97(1)(b); St V s 97(1)(b); T’dad s 99(1)(b).
8 Peoples Department Stores Inc (Trustees of) v Wise [2004] SCR 461 SCC; Cybulski v MNR [1988] 2 CTC 2180
TCC.
9 Peoples Department Stores Inc (Trustees of) v Wise [2004] 3 SCR 461 SCC.
10 Peoples Department Stores Inc (Trustees of) v Wise [2004] 3 SCR 461 SCC; Pente Investment Management
Ltd v Schneider Corpn (sub nom Maple Leaf Foods Inc v Schneider Corpn) (1998) 42 OR (2d) 177 Ont CA;
Paulson & Co Inc v Algoma Steel Inc (2006) 79 OR (3d) 191 Ont SCJ.
11 [1994] BCLC 561 Eng Ch D (Comp Ct).
12 [1997] 1 BCLC 48.
13 See Ang s 97(1)(b); Ant s 97(1)(b); Bah s 81(1)(b); Dom s 97(1)(b); Gren s 97(1)(b); Guy s 96(1)(b); J’ca s 174(1)
(b); Mont s 97(1)(b); St C/N s 74(1)(b); St L s 97(1)(b); St V s 97(1)(b); T’dad s 99(1)(b).
14 [1925] Ch 407, 429.
15 Re Denham & Co (1883) 25 Ch D 752.

16 [2004] 3 SCR 461 SCC at para 62.
17 [1989] BCLC 498 Eng Ch D.
18 See Re City Equitable Fire Ins Co [1925] 1 Ch 407, 427 Ch D per Romer J.
20 Discussed fully above, Chapter 10.
21 [1991] BCLC 1028.
22 [1991] BCLC 1028, 1031.
23 [1991] BCLC 1028.
24 [1970] 1 All ER 189.
25 (1995) 16 ACSR 607 NSW CA.
26 [1925] Ch 407 Eng Ch D.
27 See, e.g., Overend Gurney & Co v Gibb (1872) LR 5 HL 480 Eng HL; Re Forest of Dean Coal Mining Co (1878)
10 Ch D 450; Re Brazilian Rubber Plantations and Estates Ltd [1911] 1 Ch 425.
28 Re Brazilian Rubber Plantations and Estates Ltd [1911] 1 Ch 425, 437 per Neville J.
30 [1925] Ch 407.
31 [2004] 3 SCR 461 SCC at para 63. See also Carr v Cheng (2005) BCSC 445 BC SC; Creative Realty Corpn v
333 Terminal Holdings Ltd (1011) BCSC 638 BC SC.
33 [2004] 3 SCR 461 SCC.
34 [1925] Ch 407.
35 J’ca s 174(2).
36 J’ca s 174(2).
37 J’ca s 174(3).
s 97(4); St V s 97(4); T’dad s 99(4).
39 See Chapter 6.
40 See Chapter 3.
41 (1988) 39 BLR 1 Alta CA.
42 (2006) 21 BLR (4th) 103 PEI TD.
43 (2001) 24 BLR (3d) 1 Alta QB.

Chapter 14
Directors’ Liabilities
Introduction
Commonwealth Caribbean Companies Acts recognise that the effectiveness of
duties imposed on directors in the Acts ultimately depends upon the extent to
which directors and officers can avoid or otherwise mitigate liability for
breach of these duties. Consequently, these Acts, except in Belize, to a greater
or lesser extent include provisions on the liability of directors for breach by
directors of the duties imposed on them by these statutes.
Except in Jamaica and St Christopher/Nevis, Commonwealth Caribbean
Companies Acts which include provisions on the liability of directors for
breach of directors’ statutory duties contain provisions imposing specific
statutory liability on directors and officers for breach of directors’ and officers’
statutory duties in the raising and the maintenance of share capital.1 These
Acts also contain provisions regulating directors’ liability generally in
circumstances where questions of directors’ consent to a resolution passed or
action taken by directors at a directors’ meeting are involved in the
determination of directors’ liability. Further, these Acts contain provisions
regulating the waiver of liability for breaches of these duties. Finally, all the
Acts, including the Jamaica and St Christopher/Nevis Acts, contain provisions
on the circumstances in which a company may indemnify directors and
officers against liability or other expenses or purchase and maintain insurance
against directors’ and officers’ liabilities.
The current chapter examines all of the foregoing aspects of directors’ and
officers’ liability covered by the Acts.
Specific Statutory Liabilities
Liability for shares issue
Under Companies Acts in Anguilla, Antigua, the Bahamas, Barbados, Grenada,

Guyuana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, directors
of a company who vote for or consent to a resolution which authorises the
issue of a share in contravention of the relevant Act for a consideration other
than money incur joint and several liability to the company.2 A director who
so votes or consents is liable to make good any amount by which the
consideration received is less than the fair equivalent of the money that the
company would have received if the share had been issued for money on the
date of the resolution.3 On the other hand, a director incurs no liability if he
did not know and could not reasonably have known that the share was issued
for a consideration less than the fair equivalent of the money that the
company would have received if the share had been issued for money.4
Liability for certain other dealings with share capital
Joint and several liability is also imposed on directors of a company who vote
for, or consent to, a resolution authorising any of the following under the Acts
in Anguilla, Antigua, the Bahamas, Barbados, Grenada, Guyuana, Montserrat,
St Lucia, St Vincent and Trinidad and Tobago:5
(a) a purchase, redemption or other acquisition of shares contrary to the

Acts;6
(b) a commission contrary to the Acts;7
(c) a payment of a dividend contrary to the Acts;8
(d) financial assistance contrary to the Acts;9
(e) a payment of an indemnity contrary to the provisions of the Acts.10
In any of these circumstances, a director is liable to restore to the company

any amounts so distributed or paid and not otherwise recovered by the
company.11 But a director who is so liable may apply to the court for an order
compelling a shareholder or other recipient to pay or deliver to the director
any money or property that was distributed to the shareholder or other
recipient contrary to the Acts.12
Where a director applies to the court for an order against a shareholder or
other recipient, the court, if it is satisfied that it is equitable to do so, may
make any of three orders.13 First, the court may order a shareholder or other
recipient to pay or deliver to the director any money or property that was
distributed to the shareholder or other recipient contrary to the relevant
provisions of the Acts.14 Second, the court may order a company to return or
issue shares to a person from whom the company has purchased, redeemed or
otherwise acquired shares.15 Third, the court may make any other order it
thinks fit.16
Liability to contribute to judgment
A director who has satisfied a judgment founded on liability in respect of a

resolution authorising the issue of a share in contravention of the relevant Act
for a consideration other than money or a resolution authorising any other
prohibited share capital dealing is entitled to contribution from other directors
who voted for, or consented to the prohibited act upon which the judgment
was founded.17
Limitation on actions to enforce liability
There is a statutory time period within which an action to enforce any of these
statutory liabilities must be commenced. Under the Acts in Anguilla, Antigua,
the Bahamas, Barbados, Grenada, Guyuana, Montserrat, St Lucia, St Vincent
and Trinidad and Tobago, such an action cannot be commenced after two
years from the date of the resolution authorising the action complained of.18
Statutory Defences to Liability
Defence based on lack of consent
Overview of provisions
One particularly poignant issue in directors’ liability is determining whether

and when a director should be relieved of liability where his liability involves
questions of consent to a resolution passed or action taken at a directors’
meeting. Not surprisingly, the Acts in Anguilla, Antigua, the Bahamas,
Barbados, Grenada, Guyuana, Montserrat, St Lucia, St Vincent and Trinidad
and Tobago, contain two sets of provisions regulating when directors and
officers may be relieved of liability for resolutions passed or action taken at a
directors’ meeting. Broadly speaking, these provisions distinguish between
when a director is present at the meeting and where he was not present.
Where director present
The first set of provisions found in the Acts seeks to remove as a defence to
the personal liability of a director his lack of consent to any decision taken at a
meeting at which he was present.19 Thus, the Acts provide that a director is
presumed to have consented to any resolution passed or action taken at a
meeting of directors at which he was present unless he expressly dissented.20
To avoid this presumption, a director who is present at the meeting where
the resolution is passed or the action taken must request that his dissent be
entered in the minutes of the meeting.21 He may also avoid the presumption
by either sending his written dissent to the secretary of the meeting before the
meeting is adjourned,22 or by sending his dissent by registered post or
delivering it to the registered office of the company immediately after the
meeting is adjourned.23 It must be emphasised that only a director who has not
voted for, or consented to, a resolution may avail himself of these dissent
procedures.24
Where director not present
Where the director is not present when the resolution was passed or the action
taken, he is presumed to have consented to it unless, within seven days of the
resolution (twenty, in Trinidad and Tobago), he either causes his dissent to be
placed within the minutes of the meeting,25 or, sends his dissent by registered
post or delivers it to the registered office of the company.26 In Trinidad and
Tobago, but nowhere else, a director who fails to comply with these
stipulations may nevertheless apply to the court for relief. If the court is
satisfied that the director’s failure to comply was accidental or due to
inadvertence, or that it is just and equitable to grant relief, it may make an
order extending the time for the director to comply as it may think proper.27
It bears emphasis that these presumed consent provisions apply to any
resolution or action taken at a meeting of directors or a committee of
directors.28
The good faith reliance defence
In Peoples Department Stores Inc (Trustees of) v Wise,29 it was observed that,
given the statutory qualification requirements, directors cannot be expected to
be experts in all aspects of the company they manage and supervise. Directors
and officers must inevitably rely on experts and professionals in deploying the
considerable powers of management statutorily vested in them. It is in
recognition of this truism that the Companies Acts in Anguilla, Antigua, the
Bahamas, Barbados, Grenada, Guyuana, Montserrat, St Lucia, St Vincent and
Trinidad and Tobago include provisions designed to afford a statutory good
faith reliance defence to directors and officers for breach of certain specified
statutory duties.
The Acts in the named territories provide that where a director has relied in
good faith upon financial statements of the company represented to him by an
officer of the company, he will not be liable in respect of (i) a vote for or
consent to a resolution authorising the issue of a share for a consideration
other than money contrary to the Acts; (ii) a vote for, or consent to, a
resolution authorising share capital dealings prohibited by the Acts; or (iii)
breach of his statutory fiduciary duty or statutory duty of care and skill.30
Where a director relies in good faith on a report of an attorney-at-law,
accountant, engineer, appraiser or other person whose profession lends
credibility to a statement made to him, there is similarly no liability.31
Waiver of Breaches of Duty
The duties imposed on directors and officers of a company can be significantly
compromised by a company waiving liability for breaches of these duties. To
prevent this, the Companies Acts in Anguilla, Antigua, the Bahamas,
Barbados, Grenada, Guyuana, Montserrat, St Lucia, St Vincent and Trinidad
and Tobago make provision against this. These Acts stipulate that ‘no
provision in a contract, the articles of a company, its bye-laws or any
resolution, relieves a director or officer of the company from the duty to act in
accordance with this Act or the regulations, or relieves him from liability for a
breach of this Act or the regulation’.32 Section 77(1) of the St
Christopher/Nevis Act is to the same effect.
In the Ontario case of McKay-Cocker Construction Ltd v McMurdo,33 it was
observed that the policy of a similar non-waiver provision is to regulate the
conduct of corporate directors and officers whenever they serve in either
capacity. It was also pointed out that former directors are equally affected by
the provision inasmuch as it refers to ‘liability for breach of this Act or the
regulation’.
In the British Columbia Supreme Court case of Rhyolite Resources Inc v
CanQuest Resources Corpn,34 it was held that the provision operates to
invalidate bye-laws which purport to exempt a director from liability for acts
which constitute a breach of duty. The wording of the provision, however,
does not appear to preclude waiver of any common law duties which may not
be encompassed in the Acts.
Indemnities
Policy goals of indemnity provisions
The Companies Acts in the Commonwealth Caribbean, except in Belize and St

Christopher/Nevis,35 contain extensive provisions regulating the circumstances
in which a company may indemnify directors and officers against liability or
other expenses.36 In Blair v Consolidated Enfield Corpn,37 Iacobucci J in the
Supreme Court of Canada explained the broad policy goals underlying the
indemnification provisions in section 136 of the Ontario Business Corporations
Act,38 a provision in pari materia with the provisions in regional Acts. He
noted that the basic objective of the provisions is to allow reimbursement for
reasonable, good faith behaviour by directors, thereby discouraging the
hindsight application of perfection. Indemnification, he emphasised, is
designed to encourage responsible behaviour, while permitting enough leeway
to attract strong director candidates and thereby to foster ‘entrepreneurism’.
For this reason, indemnification should only be refused in cases of bad faith.
Under the indemnification provisions, there are two types of indemnities
available to a director or officer of a company. The first is what may be called
discretionary indemnity. The second is what may be called as-of-right
indemnity. These are expanded on hereafter.
Discretionary indemnity
Indemnity in actions other than derivative actions
The basic rule laid down by the Acts is that, except in respect of a derivative
action, a director or officer of the company, a former director or officer of the
company, or a person who acts or acted at the company’s request as a director
or officer of a body corporate of which the company is or was a shareholder
or creditor, or his legal representative, may be indemnified by a company.39 In
such a case, indemnification is available against all costs, charges and expenses,
including an amount paid to settle an action or satisfy a judgment, reasonably
incurred in respect of any civil, criminal or administrative action or
proceeding.40
To be eligible for indemnification in civil actions or proceedings, a director
or officer must satisfy three conditions.41 The first condition is that the director
or officer must have been made a party to the litigation by reason of being
director or officer of the company. The second is that the costs, charges and
expenses to be indemnified must have been reasonably incurred. The third is
that the director or officer must have acted honestly and in good faith with a
view to the best interests of the company.42 If he has not acted in good faith,
indemnification is not available. Thus, in the Quebec case of Balestreri v
Roberts,43 a director was held not to be entitled to an indemnity, as he was
found not to have acted in good faith.
Conversely, directors and officers may be indemnified for breaches of
specified statutory duties or the duty of care, diligence and skill, provided they
have not breached the general standard of honesty and good faith stipulated in
the Acts. So, in Prime Resources Group Inc v Pezin,44 an order was granted
permitting the company to indemnify three directors in defending proceedings
under the Securities Act where the Commission’s findings did not reveal
deceit or fraudulent intent. Blair v Consolidated Enfield Corpn45 is to the same
effect.
In the case of criminal or administrative action or proceeding that is
enforced by a monetary penalty, a director or officer, in addition to satisfying
the good faith requirement, must, in addition to the conditions to be satisfied
in a civil action or proceeding, also satisfy the criterion that he had reasonable
grounds for believing that his conduct was lawful.46 In Denton v Equus
Petroleum Corpn,47 the British Columbia Supreme Court held that to satisfy
the court that the director had reasonable grounds for believing that his
conduct was lawful, those grounds must be stated.
The British Columbia Court of Appeal case of Chromex Nickel Mines Ltd v
British Columbia (Securities Commission)48 enumerated a number of
important propositions governing the operation of indemnification in actions
other than derivative actions. The first of these is that indemnification in such
actions is not restricted to actions or proceedings where the applicant for
indemnity is not a defendant. The second is that there is no requirement that
the action be concluded before the indemnity may be given. The third is that
the approval of the court is not required before the indemnity is given. It is for
the company through its directors to determine whether the applicant for the
indemnity has satisfied the conditions imposed by the Acts. The fourth is that
the provisions call for indemnification for amounts ‘reasonably incurred by
him’. Thus, indemnification can be for only those amounts that have actually
been incurred and not to expenses to be incurred in the future.
Indemnity in derivative actions
Where a derivative action is brought by or on behalf of the company to obtain

a judgment in its favour and a director or officer is made a party in his
capacity of director or officer of the company, the director or officer cannot in
any event be indemnified for amounts paid in settlement.49 In such a case,
however, a company may with the approval of the court indemnify a director
or officer against all costs, charges and expenses reasonably incurred by him.50
Court approval may only be sought in actions and proceedings where the
director or officer has acted honestly and in good faith with a view to the best
interests of the company, and in the case of a criminal or administrative action
or proceeding that is enforced for monetary penalty, where the director or
officer had reasonable grounds for believing that his conduct was lawful.51
The British Columbia Court of Appeal case of Chromex Nickel Mines Ltd v
British Columbia (Securities Commission)52 underlines the principle that the
provisions on indemnification in derivative actions are permissive and do not
grant a right to indemnity. The approval of the court is required before a
company may indemnify and such approval will not be granted unless it is
established that the director or officer has fulfilled the conditions set out in the
Acts.
Court approval for an indemnity in a derivative action may be sought by an
application by either the company or the director or officer.53 The applicant
must give notice of the application to the Registrar who may appear and be
heard in person or by an attorney-at-law.54 Upon an application, the court may
order that notice be given to any interested person and that person may
appear and be heard in person or by an attorney-at-law.55 The court may also
approve the indemnity and make any further order it thinks fit.56
As of right indemnity
A director or officer of a company is entitled to an indemnity as of right,

provided certain statutorily specified conditions are satisfied.57 First, a director
or officer must have been substantially successful on the merits in the defence
of any civil, criminal or administrative action or proceeding to which he is
made a party by reason of being, or having been, a director or officer of the
company. In such a case, a director is entitled to indemnity from the company
in respect of all costs, charges and expenses reasonably incurred by him.58
Secondly, the director or officer must also have acted honestly and in good
faith in the best interests of the company and, in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty,
that he had reasonable grounds for believing that the conduct was lawful.59
Finally, the director or officer must be fairly and reasonably entitled to
indemnity.60
It is important to note that the effect of the case law61 is that unless a
director or officer can satisfy all these conditions no indemnity may be
claimed under the provisions.
Insurance
Insurance against directors’ and officers’ liabilities is in pith and substance a
form of indemnification. Despite this, the Companies Acts in Anguilla,
Antigua, the Bahamas, Barbados, Grenada, Guyuana, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago, which legislate on insurance against
directors’ and officers’ liabilities,62 treat insurance differently from
indemnification. As has just been seen, generally speaking, indemnification by
companies against directors’ and officers’ liability for breach of their duty of
care, diligence and skill is only permitted where the directors or officers have
acted honestly and in the best interests of the company. On the other hand,
under these Acts, a company is permitted to purchase and maintain insurance
for the benefit of directors or officers against liability for breach of the duty of
care, diligence and skill even where the director or officer is in breach of his
duty of honesty and good faith.63
This apparent substantial derogation from statutory stipulated standards has
been explained by the authors of the Federal Proposals by the observation that
in practice, directors and officers who are insured against breaches of the duty
of care, diligence and skill are not thereby shielded from personal liability.
They point out:64
To limit abuse by directors and officers, the insurers, under both standard form policies now on the
market, stipulate for a very large deductible (usually $20,000 for each loss) and for a form of co-insurance
(the insured pays 5% of the loss). The most important limitation, however, is the exclusion of coverage
where the director or officer obtains any personal profit from the alleged misconduct, an exclusion which
bars coverage in the case of self-dealing by a director or officer. Until experience shows that this board
power to obtain indemnity insurance from commercial carriers has been abused by directors and officers,
there appears to be no reason to limit the insurance coverage that may be obtained. As stated, the insurers
themselves will be compelled to stipulate exclusions that will limit their exposure in cases of misconduct
that cannot be characterised as in the interests of the corporation.
Conclusion
This chapter has revealed that the Companies Acts in Anguilla, Antigua, the
Bahamas, Barbados, Grenada, Guyana, Montserrat, St Lucia, St Vincent and
Trinidad and Tobago contain an elaborate statutory regime on directors’ and
other officers’ liability. These Acts include rules on directors’ liabilities in
respect of shares issue and other shares dealings, defences to directors’ general
liabilities, and rules governing waiver of liability for breaches of duty. In
addition, these Acts contain extensive rules on the indemnification of
directors’ and other officers’ and insurance against their liabilities. The Act in
Jamaica includes rules on indemnification.
The statutory regime in Commonwealth Caribbean Companies Acts is
important. It balances the broad statutory policy in these Acts of insisting on
good faith behaviour in the discharge of directorial duties with the need to
permit enough leeway to attract capable persons to accept directorships.
Accordingly, the regime consists of clear rules setting out the liabilities of
directors and clear rules for indemnification and insurance in respect of these
liabilities.
Notes
1 Ang ss 85, 86(a)–(d); Ant ss 85, 86(a)–(d); Bah ss 101, 102(a)–(d); B’dos ss 83, 84(a)–(d); Dom ss 85, 86(a)–(d);
Gren ss 85, 86(a)–(d); Guy ss 84, 85(a)–(d); Mont ss 85, 86(a)–(d); St L ss 85, 86(a)–(d); St V ss 85, 86(a)–(d);
T’dad ss 87, 88(a)–(c).
2 Ang s 85; Ant s 85; Bah s 101; B’dos s 83; Dom s 85; Gren s 85; Guy s 84; Mont s 85; St L s 85; St V s 85;
T’dad s 87.
T’dad s 87.
T’dad s 91.
T’dad s 88.
6 Ang s 86(a); Ant s 86(a); Bah s 102(a); B’dos s 84(a); Dom s 86(a); Gren s 86(a); Guy s 85(a); Mont s 86(a); St L
s 86(a); St V s 86(a); T’dad s 88(a).
7 Ang s 86(b); Ant s 86(b); Bah s 102(b); B’dos s 84(b); Dom s 86(b); Gren s 86(b); Guy s 85(b); Mont s 86(b); St
L s 86(b); St V s 86(b); T’dad: no similar provision.
8 Ang s 86(c); Ant s 86(c); Bah s 102(c); B’dos s 84(c); Dom s 86(c); Gren s 86(c); Guy s 85(c); Mont s 86(c); St L
s 86(c); St V s 86(c); T’dad s 88(b).
9 Ang s 86(d); Ant s 86(d); Bah s 102(d); B’dos s 84(d); Dom s 86(d); Gren s 86(d); Guy s 85(d); Mont s 86(d); St
L s 86(d); St V s 86(d); T’dad s 88(c).
10 Ang no similar provision; Ant s 86(e); Bah s 102(e); B’dos s 84(e); Dom s 86(e); Gren s 86(e); Guy s 85(e);
Mont s 86(e); St L s 86(e); St V s 86(e); T’dad s 88(d).
T’dad s 88.
s 88(1); St V s 88(1); T’dad s 90(1).
s 88(2); St V s 88(2); T’dad s 90(2).
T’dad s 89.
T’dad s 92.
T’dad s 100.
s 98(1); St V s 98(1); T’dad s 100(1).
s 98(2); St V s 98(2); T’dad s 100(2).
27 T’dad s 100(3)(b).
s 98(1); St V s 98(1); T’dad s 100(1).
29 [2004] SCR 461 SCC.
32 Ang s 97(6); Ant s 97(6); B’dos s 95(5); Dom s 97(6); Gren s 97(6); Guy s 96(5); Mont 97(6); St L s 97(6); St V s
97(6); T’dad s 99(6).
33 (2001) Carswell Ont 3883 Ont SCJ.
34 (1990) 50 BLR 275 BC SC.
35 Note, however, that s 77(2) of the St C/N Act allows companies to make provision for indemnifying ‘any
person’ against certain liabilities.
36 Ang ss 99–101, 103; Ant ss 99–101, 103; Bah ss 113–16; B’dos ss 97–99, 101; Dom ss 99–101, 103; Gren ss 99–
101, 103; Guy ss 99–101, 103; J’ca ss 201–203, 205; Mont ss 99–101; St L ss 99–101, 103; St V ss 99–101, 103;
T’dad ss 101–103, 105.
37 [1995] 4 SCR 5 SCC. See also Med Chem Health Care Ltd v Misir [2010] ONCA 380.
38 RSO 1990, c. B. 16.
41 Blair v Consolidated Enfield Corpn [1995] 4 SCR 5 SCC.
J’ca s 201(2)(a); Mont s 99(2)(a); St L s 99(2)(a); St V s 99(2)(a); T’dad s 101(2)(a). And see also, R v Bata
Industries Ltd (1995) 22 BLR (2d) 135 Ont CA.
43 (1985) 30 BLR 283 Que SC, affd (1992) [1993] RL 4 CA Que.
44 (1991) 1 BLR (2d) 140 BC SC.

45 [1995] 4 SCR 5 SCC.
(b); J’ca s 201(2)(b); Mont s 99(2)(b); St L s 99(2)(b); St V s 99(2)(b); T’dad s 101(2)(b).
47 (1986) 33 BLR 314 BC SC.
48 (1991) 4 BLR (2d) 189 BC CA.
49 Ang s 100; Ant s 100; Bah s 114; B’dos s 98; Dom s 100; Gren s 100; Guy s 100; J’ca s 202; Mont s 100; St L s
100; St V s 100; T’dad s 102.
100; St V s 100; T’dad s 102.
100; St V s 100; T’dad s 102.
52 (1991) 4 BLR (2d) 189 BC CA.
53 Ang s 103(1); Ant s 103(1); Bah s 116(1); B’dos s 101(1); Dom s 103(1); Gren s 103(1); Guy s 103(1); J’ca s
101; St V s 101; T’dad s 103.
58 Ang s 100(a); Ant s 100(a); Bah s 114(a); B’dos s 98(a); Dom s 100(a); Gren s 100(a); Guy s 100(a); J’ca s 202(a);
Mont s 100(a); St L s 100(a); St V s 100(a); T’dad s 102(a).
59 Ang s 100(b); Ant s 100(b); Bah s 114(b); B’dos s 98(b); Dom s 100(b); Gren s 100(b); Guy s 100(b); J’ca s
202(b); Mont s 100(b); St C/N: no similar provision; St L s 100(b); St V s 100(b); T’dad s 102(b).
60 Ang s 100(c); Ant s 100(c); Bah s 114(c); B’dos s 98(c); Dom s 100(c); Gren s 100(c); Guy s 100(c); J’ca s 202(c);
Mont s 100(c); St C/N: no similar provision; St L s 100(c); St V s 100(c); T’dad s 102(c).
61 See Chromex Nickel Mines Ltd v British Columbia (Securities Commission) (1991) 4 BLR (2d) 189 BC CA.
102; St V s 102; T’dad s 104.
102; St V s 102; T’dad s 104.

Chapter 15
Shareholders’ Decision-Making Rights
Introduction
In classical company law theory, shareholders form the dominant constituency
within the company, since as owners they are able to determine the
company’s course throughout its existence. In practice, however, most
decisions about a company’s business are taken by its directors. These
competing realities pose a problem in establishing an appropriate corporate
law regime creating mechanisms for meaningful shareholder participation in
corporate decision-making. Mindful of this, Commonwealth Caribbean
Companies Acts have embraced two major mechanisms for ensuring
shareholders participation in the governance of companies, namely, meetings
and shareholders’ agreements, and have enacted an elaborate statutory
framework for shareholder participation around these two mechanisms. This
chapter explores these mechanisms.
Meetings and Corporate Decision-Making
The theory
Examination of Commonwealth Caribbean Companies Acts reveals extensive

provisions concerning shareholders’ meetings, which are intended to entrench
such meetings as an important mechanism for shareholders to exert control in
corporate decision-making. A couple of examples may be cited to illustrate
the importance placed on meetings by these Acts in achieving shareholder
control in corporate decision-making. One good example is the reserving by
the Acts to shareholders of the exclusive right to make certain decisions (for
instance, the election of directors1 and the appointment of auditors)2 in
running the affairs of companies. Another is the statutory mandate imposed
on directors to convene annual general meetings.3 This mandate means that
shareholders are afforded at least one opportunity each year to insist on the
exercise of their decision-making rights. This mandate also guarantees an
opportunity for ensuring the accountability of the directors to the
shareholders, as at this meeting, shareholders may question directors on their
reports, the company’s accounts and other affairs of the company. Finally,
because it is at the annual general meeting that, normally, a proportion of the
directors retire and come up for re-election, this meeting is a time when
shareholders can try to exercise their most potent power of control over the
board, namely, the power of appointment and dismissal of directors.
It is possible, however, to overstate the importance of the meeting as a
mechanism for shareholders’ participation in corporate decision-making. As
was seen in Chapter 2, the Acts embrace two distinct types of companies,
namely companies owned by relatively small numbers of shareholders (closely
held companies), and companies owned by relatively large numbers of
shareholders (public companies). The meeting provisions do not differentiate
between these two types of companies. But, given the fact that shareholders
and managers are often the same persons, in closely held companies, it is
obvious that the meeting will not normally be the forum in which corporate
decisions are made in these companies.
The importance of the meeting has been doubted even in large public
companies, where management is clearly separated from the shareholders.4 As
Manning writes:5
It is commonplace to observe that the modern shareholder is a kind of investor and does not think of
himself as or act like an ‘owner’. He hires his capital out to the managers and they run it for him; how
they do it is their business, not his, and he always votes yes on the proxy.
This view of shareholders as being rationally apathetic has its origins mainly in
the seminal work of Berle and Means on the patterns of share ownership in
very large American corporations, with very large numbers of shareholders,
none of whom has a holding of any relative importance.6 On the other hand,
the fairly recent phenomenon of the concentration of the shareholdings in
public companies in the hands of institutional investors, such as the insurance
companies and pension funds, raises questions as to the appropriateness of this
analysis. For these institutional investors who hold major blocks of shares, the
meeting may afford an important mechanism for participation in corporate
decision-making.
Different types of meetings
The annual general meeting
Statutory requirement for annual general meeting
Under regional Companies Acts, the directors of a company must call an

annual meeting of shareholders.7 The first annual general meeting must be
called not later than eighteen months after the company comes into existence.8
Subsequent annual general meetings must be called not later than fifteen
months after the last preceding annual general meeting was held.9 It is to be
noted that no time period for the holding of annual general meetings is
specified in the Bahamas Act.
Business of annual general meeting
The Acts themselves do not state specifically what business must be conducted
at the annual general meeting. However, all the Acts contain provisions
requiring the directors to place before the shareholders at every annual
meeting of shareholders of the company comparative financial statements of
the financial year in question and those of the immediately preceding financial
year10 and the report of the auditor.11 The Acts in Anguilla, Antigua, the
Vincent and Trinidad and Tobago also provide that directors must be elected
and re-appointed as the case may be at an annual general meeting of the
company.12
The provisions in the Acts in Anguilla, Antigua, Barbados, Dominica,
suggest that the normal business of the annual general meeting includes the
consideration of the financial statements, the auditor’s report and the directors’
report (in Guyana),13 if any, the election of directors in place of those retiring,
and the declaration of dividends. Indeed, these are things which inevitably
have to be done in respect of each financial year and not surprisingly are
contemplated by the Acts as the business of the annual general meeting.
The foregoing apart, two further matters need to be emphasised here. The
first is that, under the Acts in Anguilla, Antigua, Barbados, Dominica,
most of the things that are done at the annual general meeting may also be
done at a special meeting of shareholders.14 The second is that, under these
Acts also, the business of the annual general meeting need not be restricted to
the usual matters stated in the Acts.15 There is, for instance, no compelling
reason why special business could not be considered at the annual general
meeting.
Statutory meetings
In the Bahamas ‘every company’,16 in Belize ‘every company limited by

shares’,17 and in Jamaica ‘every public company’18 must, within a period of not
less than one month nor more than three months from the date at which the
company is entitled to commence business, hold a general meeting of the
members of the company.19 This meeting is called ‘the statutory meeting’.
The statutory meeting is extensively regulated in the Belizean and Jamaican
Acts. Under these Acts, the directors of a company must, at least seven days
before the day on which the meeting is held, forward a report, called a
statutory report, to every member of the company.20 The statutory report
must be certified by not less than two directors of the company, or, where
there are less than two directors, by the sole director.21
Certain matters must be stated in the statutory report.22 These include (a)
the total number of shares allotted, distinguishing shares allotted as fully or
partly paid up otherwise than in cash, and stating in the case of shares partly
paid up the extent to which they are so paid up, and in either case, the
consideration for which they have been allotted;23 (b) the total amount of cash
received by the company in respect of all the shares allotted, distinguished as
outlined at (a);24 (c) an abstract of the receipts of the company and of the
payments made thereout, up to a date within seven days of the report,
exhibiting under distinctive headings the receipts of the company from shares
and debentures and other sources, the payments made thereout, and
particulars concerning the balance remaining in hand, and an account or
estimate of the preliminary expenses of the company;25 (d) the names,
addresses and descriptions of the directors, auditors, if any, managers, if any,
and secretary of the company;26 and (e) the particulars of any contract the
modification of which is to be submitted to the meeting for its approval,
together with the particulars of the modification or proposed modification.27
The statutory report must, so far as it relates to the shares allotted by the
company, and to the cash received in respect of such shares, and to the receipts
and payments of the company on capital account, be certified by the auditors,
if any, of the company.28
Immediately after sending a certified copy of the statutory report to
members of the company, the directors must cause a duly certified copy of the
statutory report to be delivered to the Registrar for registration.29 The
directors must also cause a list showing the names, descriptions and addresses
of the members of the company, and the number of shares held by them
respectively, to be produced at the commencement of the statutory meeting
and to remain open and accessible to any member during the continuance of
the meeting.30
The members of the company present at the meeting are free to discuss any
matter relating to the formation of the company or arising out of the statutory
report. In this regard, it does not matter whether previous notice has been
given or not. But no resolution of which notice has not been given in
accordance with the articles may be passed.31
The meeting may adjourn from time to time. At any adjourned meeting,
any resolution of which notice has been given in accordance with the articles,
either before or subsequently to the former meeting, may be passed. The
adjourned meeting has the same powers as an original meeting.32
Every director of a company who is knowingly and wilfully guilty of any
default in complying with the provisions on statutory meetings is liable to a
fine not exceeding 50,000 dollars!33
Special meeting
Under the Companies Acts in Anguilla, Antigua, Barbados, Dominica,

the directors of a company may at any time call a special meeting of
shareholders.34 This provision undoubtedly allows directors to call a meeting
other than the annual general meeting, either on their own motion or at the
request of shareholders, as the occasion warrants.
Requisitioned shareholders’ meeting or extraordinary

general meeting
To enhance shareholders’ ability to have the directors call a meeting at their

(the shareholders’) request, shareholders are statutorily permitted to
requisition the directors to convene a meeting of shareholders. This meeting is
called a requisitioned shareholders’ meeting, in Anguilla, Antigua, Barbados,
Dominica, Grenada, Montserrat, St Christopher/Nevis, St Lucia, St Vincent and
Trinidad and Tobago,35 and an extraordinary general meeting in the Bahamas,
Belize, Guyana and Jamaica.36
Under the Acts in all the territories, the holders of not less than a statutorily
stipulated percentage of the issued shares of a company that carry the right to
vote at a meeting sought to be held by them may requisition the directors to
call a meeting of shareholders for the purposes stated in the requisition.37 The
requisition may consist of several documents of like form, each signed by one
or more of the shareholders of the company.38 It must state the business to be
transacted at the meeting and must be sent to each director39 and to the
registered office of the company.40
Upon receiving a requisition, the directors must call a meeting of
shareholders to transact the business stated in the requisition.41 However,
under the Acts in Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago, the directors are not
obligated to call a requisitioned meeting if a record date for determining the
shareholders of the company has been fixed and notice thereof given.42
Similarly, if the directors have called a meeting of shareholders and have
given notice thereof,43 or if the business stated in the requisition includes
certain statutorily specified matters with which a company is not required to
comply in a management proxy circular,44 the directors do not have to call a
requisitioned meeting.
If, after receiving the requisition, the directors do not call a meeting of
shareholders within twenty-one days of such receipt, under the Acts in
Lucia, St Vincent and Trinidad and Tobago, any shareholder who signed the
requisition may call the meeting.45 Under the Acts in the Bahamas, Belize,
Jamaica and St Christopher/Nevis,46 the meeting may be convened by the
requisitioning shareholders, or any of them representing more than one-half of
the total voting rights of all of them.
Under all the Acts, except the Anguillan Act, a requisitioned meeting must
be called as nearly as possible in the manner in which meetings are to be
called pursuant to the bye-laws of the company and the relevant provisions of
the statute.47 Except under the Acts in Anguilla, the Bahamas and Belize, the
company is statutorily obligated to reimburse the shareholders who
requisitioned the meeting the expenses reasonably incurred by them in
requisitioning, calling and holding the meeting unless the shareholders
otherwise resolve at a meeting called by requisitioning shareholders because
the directors did not call the requisitioned meeting.48
Court-called meeting
Despite the numerous provisions in regional Acts relating to the calling of

meetings of shareholders, circumstances could still arise to make impracticable
the calling of a meeting of shareholders in the manner in which such meetings
can be called,49 or the conducting of the meeting in the manner prescribed by
the bye-laws and the Acts,50 or for some other reason which the court may
think fit.51 In any of these cases, upon an application by a director of a
company or a shareholder of the company who is entitled to vote at a meeting
of the shareholders, or the Registrar, the court may order a meeting of
shareholders to be called, held and conducted in such manner as the court may
direct.52 In Jamaica and St Christopher/Nevis, the power which is given to the
court includes a power to direct that one member of the company present in
person or by proxy be deemed to constitute a meeting.53
The provision for court-called meetings has been present in Commonwealth
Caribbean company legislation since 1862 and has been used to overcome
difficulties such as the company not having directors to validly call a meeting,
or the records of the membership having been destroyed. The Acts in Antigua,
Vincent and Trinidad and Tobago now, in addition, expressly allow court-
called meetings to be used to bypass quorum requirements stipulated in the
company’s bye-laws or in the Acts.54
The approach which the court should take to the provision in the Acts for
court-called meetings was persuasively stated in the Canadian case of Airline
Industry Revitalisation Co v Air Canada.55 In that case, Blair J opined on
section 144 of the CBCA, a similar provision to that in regional Acts, as
follows:
This provision gives the court a broad discretion to order that a shareholders’ meeting be called and held,
and to determine the manner in which the meeting shall be conducted. In my opinion, it is a discretion
which should be exercised cautiously, however, given the general scheme of the CBCA, which is to repose
in the directors of a corporation the general power to manage its business and affairs including the
primary responsibility for determining when shareholders will be consulted and asked to act at meetings. I
agree … that corporations are not run by plebiscite and that shareholders do not have a general power to
call shareholders’ meetings as and when they feel like it. The … jurisdiction given to the court under s. 144
[is an exception] to the primary role of the directors in this regard.
Any meeting of shareholders called, held and conducted in the manner

ordered by the court is for all purposes a meeting of the shareholders of the
company duly called, held and conducted.56
The provisions on court-called meetings in the Act in Belize are much less
detailed than in the other regional Acts. That Act merely provides that if
default is made in holding an annual general meeting, the court may, on the
application of any member of the company, call or direct the calling of a
general meeting of the company.57
The Anguillan Act does not make any provision for a court-called meeting.
Minister-called meetings
Under the Jamaica and St Christopher/Nevis Acts, the Minister is empowered

to call or direct the calling of a general meeting if default is made in the
holding of an annual general meeting.58 The Minister may exercise this power
on the application of any member of the company.59 In addition to convening
a general meeting, the Minister has power to give such ancillary or
consequential directions as he thinks fit, including directions modifying or
supplementing, in relation to the calling, holding and conducting of the
meeting, the operation of the company’s articles.60 The Minister may also
direct that one member of the company present in person or by proxy be
deemed to constitute a meeting.61
The meeting called or directed to be called by the Minister is deemed to be
an annual general meeting of the company.62 However, where a meeting so
held is not held in the year in which the default in holding the company’s
annual general meeting occurred, the meeting so held cannot be treated as the
annual general meeting for the year in which it is held unless at that meeting
the company resolves that it be so treated.63
Where a company passes a resolution that a Minister-called meeting is to be
treated as an annual general meeting, a copy of the resolution must, within
fifteen days of its passing, be delivered to the Registrar.64 The resolution must
be recorded by the Registrar.65
Place of meetings
Under the Acts in Anguilla, Antigua, Barbados, the Bahamas, Dominica,

meetings of shareholders of a company must be held at the place in the
territory where the company is incorporated as provided for in the company’s
bye-laws.66 In the absence of any such provision, the meeting may be held at a
place within the territory concerned that the directors determine.67 It is
submitted that in making such a determination, directors must not act
fraudulently, oppressively, or in a manner that would render it impossible or
inconvenient for shareholders to attend meetings. Put simply, directors must
convene meetings in a place that is practically suitable.68
Notwithstanding the general rule that meetings must be convened in the
territory where the company is incorporated, if, at a meeting of shareholders
all the shareholders agree, the meeting may be held outside that territory.69 A
shareholder who attends such a meeting of shareholders held outside of that
territory will be deemed to have agreed to its being so held unless he attends
the meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully held.70 By the same
token, where the articles so provide, meetings of shareholders may be held
outside the territory at one or more places specified in the articles.71
There are no provisions in the Acts in Belize, Jamaica or St
Christopher/Nevis on the place where meetings should be held. In these
territories, it is the practice to include a provision in the articles of association
(Belize and St Christopher/Nevis) or articles of incorporation ( Jamaica)
conferring a power on the directors to appoint a time and place for meetings.
Calling meetings
Notice of meetings
The notice of meetings requirements in Anguilla, Antigua, Barbados,

Dominica, Guyana, Grenada, Montserrat, St Lucia, St Vincent and Trinidad and
Tobago are statutorily regulated. The Acts in Anguilla, Antigua, Barbados,
stipulate that a notice of the time and place of a meeting of shareholders must
be sent to each shareholder entitled to vote at the meeting,72 to each director73
and to the auditor74 of the company. The notice must be sent not less than a
statutory specified number of days or more than a statutory specified number
of days before the meeting.75
The provisions in the Guyanese Act are somewhat different from those in
Vincent and Trinidad and Tobago. The requirement under the Guyanese Act is
for notice to be given to every member of the company, whether he is entitled
to attend and vote at the meeting or not.76 Notice under this Act must be
given not less than seven days before the record date is fixed.77
Record date of shareholders78
For the purpose of determining shareholders who are entitled to receive notice
of a meeting of shareholders of a company, under the Acts in Anguilla,
Antigua, Barbados, Dominica, Guyana, Grenada, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago, the directors may fix in advance a date as
the record date for the determination of shareholders.79 The record date,
however, must not precede by more than a statutory specified number of days
or by less than a statutory specified number of days the date on which the
meeting is to be held.80 Where the directors fix a record date, notice of it must,
not less than seven days before that date, be given by advertisement in a
newspaper published in the territory concerned.81 If no record date is so fixed,
the date of record is the close of business on the date immediately preceding
the day on which the notice is given.82 In the event that no notice is given, the
date of record is the day on which the meeting is held.83
Montserrat, St Lucia, St Vincent and Trinidad and Tobago, notice of a meeting
of shareholders of a company is not required to be sent to shareholders of the
company who were not registered on the records of the company or its
transfer agent on the record date.84 It is to be noted that failure to receive
notice does not deprive a shareholder of the right to vote at the meeting.85
Adjourned meetings

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, also, if a meeting of
shareholders is adjourned for less than thirty days, it is not necessary, unless
the bye-laws otherwise provide, to give notice of the adjourned meeting,
other than by announcement at the earlier meeting that is adjourned.86 If a
meeting of shareholders is adjourned by one or more adjournments for an
aggregate of thirty days or more, notice of the adjourned meeting must be
given as for an original meeting.87 Proxy forms must accompany the notice of
an adjourned meeting of shareholders unless the meeting is adjourned by one
or more adjournments for an aggregate of more than ninety days.88
Calling of meetings in Bahamas, Belize, Jamaica and St

Christopher/Nevis
In the Bahamas, Belize, Jamaica and St Christopher, the rules governing the
calling of meetings are not statute based. They are to be found in the articles
of association in the Bahamas, Belize and St Christopher/Nevis and the articles
of incorporation in Jamaica.
Proposals and Members’ Resolutions and Circulars
Background to the statutory provisions
The proposal mechanism is an important mechanism which allows for

shareholders, at the expense of the company, to communicate with fellow
shareholders on matters of common concern to be considered by the company
in meetings provided for in the Acts in Antigua, Barbados, Dominica,
Grenada, Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago.
There is a corresponding mechanism called members’ resolutions and circulars
in the Jamaican Act. The Acts in Anguilla, the Bahamas, Belize and St
Christopher do not establish any similar mechanism.
The importance of these mechanisms is best appreciated against the
backdrop of the relevant common law. At common law, the board of directors
was under no obligation to make any reference to any views other than its
own in any notice of meeting of shareholders or management proxy circular
or to include in the notice of the meeting of shareholders any proposal other
than their own. It goes without saying that this placed shareholders wishing to
have a matter considered at a meeting of shareholders at a significant
disadvantage. To redress this situation, the Acts in Antigua, Barbados,
Tobago include extensive provisions on the rights of shareholders to submit
proposals89 and, in Jamaica, members’ resolutions and circulars,90 to the
company and the way with which these proposals are to be dealt. The
provisions in the Jamaican Act are different, and are examined separately in
the section below titled ‘Members’ Resolutions and Circulars’.
Proposals
Meaning of proposals
The Acts in Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St

Lucia, St Vincent and Trinidad and Tobago contain a provision which stipulates
that a shareholder who is entitled to vote at an annual general meeting of
shareholders may submit to the company notice of any matter that he
proposes to raise at the meeting. Such a notice is called a ‘proposal’.91 The
shareholder may discuss at the meeting any matter in respect of which he
would have been able to submit a proposal.92
Limitations on use of proposal
One limitation on the proposal mechanism is that it may only be employed by

‘a shareholder who is entitled to vote at an annual general meeting’. In Verdun
v Toronto Dominion Bank,93 the Supreme Court of Canada held that reference
to ‘a shareholder entitled to vote’ in a similar provision to the provision in
regional Acts meant ‘a registered shareholder’ and that consequently, only a
registered shareholder can submit a valid shareholder proposal under the
provision. This interpretation means that a shareholder who opts to register
shares in the name of an intermediary, as is increasingly the case in modern
corporate practice, cannot submit a valid shareholder proposal.
Another limitation on a shareholder’s right to submit a proposal is that he
must be a shareholder at the date that the proposal is submitted to the
company.94 Nevertheless, as long as a shareholder a registered shareholder at
the date the proposal is submitted to the company, he is entitled to submit
notice of any matter he proposes to raise at a meeting and doing so does not
limit the right of the shareholder, at the annual meeting of shareholders, to
propose other matters such as, for instance, an amendment to the articles.95
Proposal which solicits proxies

Where a shareholder submits to a company a valid proposal which solicits
proxies, the company is statutorily obligated to set the proposal out in the
management proxy circular required under the Acts or attach it to that
circular.96 If so requested by a shareholder who submits a proposal to the
company, the company must include in the circular, or attach to it, a statement
by the shareholder of not more than 200 words in support of the proposal, and
the name and address of the shareholder.97
A company is not required to comply with these obligations in five
statutorily specified circumstances.98 The first is where the proposal is not
submitted to the company at least 90 days before the anniversary date of the
previous annual general meeting of shareholders of the company.99 The second
is where it clearly appears that the proposal is submitted by the shareholder
primarily for the purpose of enforcing a personal claim or redressing a
personal grievance against the company or its directors, officers, shareholders
or debenture-holders, or primarily for the purpose of promoting general
economic, political, racial, religious, social or similar causes.100 The third is
where the company, at the shareholder’s request, included a proposal in a
management proxy circular relating to a meeting of shareholders held within
two years preceding the receipt of that request and the shareholder failed to
present the proposal, in person or by proxy, at the meeting.101 The fourth is
where substantially the same proposal was submitted to the shareholders in a
management proxy circular or a dissident’s proxy circular relating to a
meeting of shareholders held within two years preceding the receipt of the
shareholder’s request and the proposal was defeated.102 The fifth and final is
where the rights conferred on a shareholder to give notice of a proposal are
being abused to secure publicity.103
A proposal may be omitted from the management proxy circular where a
company or any person claiming to be aggrieved by the proposal applies to
the court for an order permitting the company to omit the proposal.104 On
such an application, the court may, if it is satisfied that any of the statutorily
specified circumstances applies, make such order as it thinks fit.105
The exercise of the court’s discretion on such an application was considered
in the Ontario Court of Appeal case of Varity Corpn v Jesuits Fathers of Upper
Canada106 in relation to the second statutorily specified circumstance, namely,
that it clearly appeared that the proposal was submitted by the shareholder
primarily for the purpose of enforcing a personal claim or redressing a
personal grievance against the company or its directors, officers, shareholders
or debenture-holders, or primarily for the purpose of promoting general
economic, political, racial, religious, social or similar causes. It was held there
that, in reaching its conclusion, the court can consider the language of the
shareholder proposal and the supporting statement in determining the primary
purpose of the proposal. The Court opined that it is clear from the legislation
that, if the primary purpose is one of those statutorily specified, then, no
matter how commendable either the specific or general purpose of the
proposal may be, the company cannot be compelled to pay for its distribution.
An applicant to the court for an order permitting the company to omit a
proposal must give notice of the application to the Registrar.107 The Registrar
may appear before the court and be heard in person or by an attorney-at-
law.108
Proposal which includes nomination of directors
A proposal may include nominations for the election of directors.109 Such a

proposal must be signed by one or more holders of shares who represent in
the aggregate not less than 5 per cent of the shares of the company,110 or 5 per
cent of the shares of a class of shares of the company entitled to vote at the
meeting to which the proposal is to be presented.111 However, these
requirements do not preclude nominations made at a meeting of shareholders
that is not required to solicit proxies under the relevant provisions of the
Acts.112
Liability for contents of proposal or statement

Where a company circulates a proposal or statement in accordance with the
Acts, neither the company, nor any person acting on its behalf, incurs any
liability by reason only of circulating the proposal or statement.113
Refusal to include proposal in management proxy circular
Where a company refuses to include a proposal in a management proxy

circular, the company must, within ten days after receiving the proposal, notify
the shareholder submitting the proposal of its intention to omit the proposal
from the management proxy circular.114 The company must also send the
shareholder a statement of the reasons for its refusal.115
A shareholder who claims to be aggrieved by the company’s refusal to
include a proposal in the management proxy circular may apply to the court
for an order restraining the holding of the meeting to which the proposal is
sought to be presented and to make any other order which the court thinks
fit.116 A shareholder making such an application must give the Registrar notice
of the application, and the Registrar may appear and be heard in person or by
an attorney-at-law.117
Members’ resolutions and circulars
Under the Jamaican Act, any member who is entitled to attend and vote at an
annual general meeting may request to have included in the notice of that
annual general meeting any resolution which may properly be moved and is
intended to be moved at that meeting. The request must be in writing and the
resolution must not be more than 500 words. If these conditions are satisfied,
the expenses associated with the inclusion of the resolution are to be borne by
the company.118
If the proposed resolution is not passed at the annual general meeting, then
the same resolution or one substantially to the same effect cannot be moved at
any annual general meeting within three years except in two circumstances.119
The first is if the directors agree otherwise.120 The second is if the request is
within three years supported in writing by members of the company
representing between them not less than one-twentieth of the total voting
rights of all the members having at the date of the request a right to vote on
the resolution to which the request relates.121
Where a members request for the inclusion of the resolution is made, the
company is not obligated to give notice of the resolution unless the written
request, signed by the member or members concerned, together with the
resolution are deposited at the registered office of the company not less than
six weeks before the meeting.122 However, if after the resolution has been
deposited, an annual general meeting is called for a date six weeks or less
thereafter, the resolution is deemed to have been properly laid.123
Shareholders’ list
Preparation of list
In order to eliminate doubt as to shareholders who are entitled to vote at a

meeting of shareholders, it is statutorily mandated in the Acts in Anguilla,
Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia, St
Vincent and Trinidad and Tobago that a company must prepare a list of its
shareholders who are entitled to receive notice of a meeting.124 The list must
be arranged in alphabetical order and must show the number of shares held by
each shareholder.125 If a record date is fixed in advance by the directors, the list
of shareholders must be prepared not later than ten days after the record date
is so fixed.126 If, however, no record date is fixed, the list must be prepared
either at the close of business on the date immediately preceding the day on
which the notice is given,127 or, if no notice is given, as of the day on which the
meeting is held.128
Legal effect of list
When the directors of a company fix a record date in advance, a person named
in the shareholder list is entitled, at a meeting to which the list relates, to vote
the shares shown opposite his name.129 Where a person has transferred the
ownership of any of his shares in a company after the record date fixed by the
company, the transferee may vote his shares provided he can produce
properly endorsed certificates of the company or otherwise establish that he
owns the shares,130 and demands, not later than ten days before the meeting of
the shareholders of the company, that his name be included in the list of
shareholders before the meeting.131 When the directors of a company do not
fix a record date, a person named in the list of shareholders may also, at a
meeting to which the list relates, vote the shares shown opposite his name.132
Shareholders have a right to examine the list of shareholders.133 They may
exercise this right during usual business hours at the registered office of the
company, at the place where its register of shareholders is maintained,134 or at
the meeting of shareholders for which the list is prepared.135
Quorum
Quorum in companies generally
There must be a quorum for business to be validly transacted at a meeting of

shareholders. The Acts in Anguilla, Antigua, the Bahamas, Barbados,
all enact that, unless the bye-laws otherwise provide, a quorum of
shareholders is present at a meeting of shareholders if the holders of a
majority of the shares entitled to vote at the meeting are present in person or
represented by proxy.136 Under the Guyanese Act, two or more persons
present at a meeting constitute a quorum.137 Under the Jamaican Act, a
quorum consists of two members in the case of a private company, and in the
case of any other company three members personally present.138 The language
of the St Christopher/Nevis Act on what constitutes a quorum is less than
happy. It appears from section 92(d) of that Act that a quorum consists of ‘two
members present in person or by proxy together holding not less than one-
third in stated value of the issued shares carrying a right to vote at the
meeting or, in the case of a company limited by guarantee, together
representing not less than one-third of the total voting rights at the meeting of
all the members.’ The Act in Belize does not contain any provisions on
quorums.
Quorum in ‘one-person’ companies
As was seen in Chapter 3, the Acts in Anguilla, Antigua, Barbados, Dominica,

Grenada, Guyana, Jamaica, Montserrat, St Christopher/Nevis, St Lucia, St
Vincent and Trinidad and Tobago provide that ‘one or more persons may
incorporate a company’,139 in effect form a one-person company. The Acts in
all of these territories, except in Jamaica, have displaced the common law rule
that there must be at least two persons present for a meeting to take place140
by a provision which deals with companies which have only one shareholder
or has only one shareholder of any class or series of shares.141 Here, the Acts
provide that a shareholder present in person or by proxy constitutes a
meeting.142 Thus, instances such as the English case of Sharp v Dawes,143 where
only one member turned up to a meeting, took the chair, and, having
conducted the meeting, resolved ‘that a vote of thanks be given to the
chairman’ are not always funny in the law of meetings under regional
companies legislation.
Rather surprisingly, the Jamaican Act, although providing for one-person
companies, does not have any specific provisions on what constitutes a
quorum in such companies. Presumably, that Act will be interpreted to allow a
quorum of the shareholder present on the basis that Parliament could not have
intended anything else, which would be undoubtedly an absurdity!
Quorum during the meeting

Grenada, Guyana, Montserrat, St Christopher/Nevis, St Lucia, St Vincent and
Trinidad and Tobago, if a quorum is present at the opening of a meeting of
shareholders, the shareholders present may, unless the bye-laws otherwise
provide, proceed with the business of the meeting, notwithstanding that a
quorum is not present throughout the meeting.144 If, on the other hand, a
quorum is not present within thirty minutes of the time appointed for a
meeting of shareholders, the meeting stands adjourned to the same day two
weeks thereafter, at the same time and place.145 If at the adjourned meeting, a
quorum is not present within thirty minutes of the appointed time, the
shareholders present constitute a quorum.146
The question of a quorum at an adjourned meeting was considered in the
Barbados High Court case of Carmichael et al v Viajes International
(Barbados) Ltd et al.147 The facts of this case are that Dr Carmichael, the first
plaintiff, was the sole director and officer of Viajes, the first defendants. Burns,
the second plaintiff, was the registered owner of 65 per cent of the shares in
Viajes. Bagash, the second defendant, owned the remaining 35 per cent.
Bagash wrote to Dr Carmichael that a meeting of the shareholders of Viajes
be called to deal with certain matters. Dr Carmichael issued Notices of Special
Meetings of the shareholders for Tuesday, 23 October 2001at 2.30 pm with the
following agenda:
1. To accept the resignation of Trevor A Carmichael and to appoint

Member(s) to the Board of Directors
2. Any other business.
The meeting of 23 October was attended by Dr Carmichael who held proxies

to vote Burn’s 65 per cent of the shares in Viajes, and Ansari, holding proxies
for Bagash. Dr Carmicheal decided not to exercise his proxies and requested
that Burns be allowed to join the meeting via telephone. Ansari refused his
consent to this request. As a consequence, there was no quorum and the
meeting could not continue. Dr Carmichael then decided to continue as sole
director until the convening of the annual general meeting.
The main question raised in the case was whether these events resulted in
an adjournment of the meeting for the purposes of section 123(3) of the
Barbados Companies Act.148 Payne J held that the meeting was not adjourned.
Payne J reasoned that, Dr Carmichael having indicated his intention not to
resign, but to remain director until the next annual general meeting, the very
purpose of the meeting no longer existed. In any case, said Payne J, nothing
was said about an adjournment of the meeting.
In Belize and Jamaica, the Acts themselves do not regulate the quorum
during the meeting. The rules regulating the quorum during the meeting in
these territories are to be found in the articles of incorporation ( Jamaica) and
articles of association (Belize) and are very similar to statutory rules just
discussed.149
Voting the shares
Voting by show of hand

voting at a meeting of shareholders must be by show of hands unless the
articles provide to the contrary.150 Under these Acts also, as well as the Act in
St Christopher/Nevis, where voting is by show of hand, then, subject to the
articles, a shareholder or proxy-holder has only one vote.151
Voting on a poll
A shareholder or proxy-holder entitled to vote at the meeting has a right to

demand a ballot under the Acts in Anguilla, Antigua, Barbados, the Bahamas,
Trinidad and Tobago.152 Under all of these Acts, except the Jamaican Act, it is
expressly stipulated that the demand may be made either before or after a
vote by show of hands.153
The right to demand a poll is extensively protected under the Jamaican
Act.154 First, that Act provides that any provision contained in a company’s
articles is void in so far as it has the effect of excluding the right to demand a
poll at a general meeting on any question other than the election of the
chairman or the adjournment of a meeting.155 Second, the Act decrees that any
provision which would have the effect of making ineffective a demand of a
poll of any such question by certain statutorily specified members is also
void.156 Third, the Act deems any instrument appointing a proxy to vote at a
meeting to confer authority to demand or join in demanding a poll and a
demand by the person as proxy for a member the same as a demand by the
member.157
Upon a poll, a shareholder or proxy-holder has one vote for every share
held under the Acts in Anguilla, Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Christopher/Nevis, St Lucia, St Vincent and Trinidad
and Tobago.158 Under the Jamaican Act, the voting rights are different. Section
130(1)(e) of that Act provides that, in the case of a company originally having
a share capital, every member has one vote in respect of each share or each
1,000 dollars of stock held by him. In any other case every member has one
vote. Under the Jamaican Act also, upon a poll, a member entitled to more
than one vote need not, if he votes, use all his votes or cast all the votes he
uses in the same way.159
Voting by a body corporate or an association
A body corporate or an association obviously cannot itself attend meetings of

shareholders and vote. To circumvent this problem, the Acts in all the
territories, except Belize, contain a provision to the effect that where a body
corporate or association is a shareholder of a company, the company is under
an obligation to recognise any individual authorised by a resolution of the
directors or governing body of the body corporate or association to represent
it at meetings of shareholders of the company.160 An individual so authorised
has power to exercise, on behalf of the body corporate or association that he
represents, all the power it could exercise if it were an individual
shareholder.161 Of course, this includes the power to exercise a right to vote.
The Act in Belize deals with a company which is a member of another
company; not with other bodies corporate as in the other Acts. Here, section
70 of the Belize Act provides that a company which is a member of another
company may by resolution of the directors authorise any of its officials or
any other person to act as its representative at any meeting of the company of
which it is a member. The person so authorised is entitled to exercise the same
powers on behalf of the company which he represents as if he were an
individual shareholder of the other company. Interestingly, the Act does not
impose any obligation on the other company to recognise the authorised
representative.
Voting by joint shareholders
The voting rights of joint shareholders is statutorily regulated in Anguilla,

Christopher/Nevis, St Lucia, St Vincent and Trinidad and Tobago.162 The Acts
in these territories stipulate that, unless the bye-laws provide to the contrary, if
two or more persons hold shares jointly, one of those holders present at the
meeting of shareholders may, in the absence of the other, vote the shares.163 If,
however, two or more of those persons who are present, in person or by
proxy, vote, they must vote as one on the shares jointly held by them.164
Proxies
Background to the proxy provisions
The provisions in Commonwealth Caribbean Companies Acts deal with two

different aspects of proxies. First, except in Anguilla and Belize, these Acts
create relatively straightforward proxy voting machinery to enable
shareholders who wish to exercise their rights to participate in corporate
decision-making by proxy to do so.165 Second, the Acts in Antigua, Barbados,
Tobago establish elaborate machinery aimed at regulating the solicitation of
proxies by management and others.
The reason for statutory regulations on the shareholder proxy voting
machinery is quite simple. At common law, participation in company decision-
making requires the shareholder to attend in person at the meeting and vote
there.166 However, the stark reality is that, especially in large public
companies, shareholders are very unlikely to attend and vote at shareholders’
meetings; their participation is much more likely to be by proxy. Thus, the
reality of shareholder voting demands legislative reform of the common law
in order to confer on shareholders a right to vote by proxy and to set up
machinery to facilitate the exercise of this right.
The rationale for the regulation of the solicitation of proxies by
management and others is different. The major need for statutory intervention
in management proxy solicitation results from the widespread distribution of
corporate shareholding in large public companies and the concomitant
separation of ownership and management. In these circumstances, a problem
can arise in relation to management proxy solicitation because the proxy
voting machinery is controlled by management who can use their position to
accumulate voting power unfairly. The proxy voting regime for management
solicitation is meant to circumscribe management’s unfair use of their position
as controllers of the proxy solicitation machinery.
The proxy voting machinery
Meaning of proxy
Under the Acts in Antigua, Barbados, Dominica, Grenada, Guyana,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, the expression
‘proxy’ is used to describe the instrument appointing the person permitted to
attend and vote in place of the shareholder entitled to attend and vote at the
meeting. These Acts define a ‘proxy’ as meaning a completed and signed form
of proxy by means of which a shareholder appoints a proxy-holder to attend
and act on his behalf at a meeting of shareholders.167 A form of proxy is in
turn defined as a written or printed form that, upon the completion and
signature by or on behalf of the shareholder, becomes a proxy.168
In the Acts in the Bahamas, Jamaica and St Christopher, the word ‘proxy’ is
not defined. Under these Acts, the expression appears to understand a proxy as
being the agent permitted to attend and vote in place of the shareholder.169
It is clear from the Ontario case of Montreal Trust of Canada v Call-Net
Enterprises Inc170 that, as in the Bahamas, Jamaica and St Christopher, the
relationship between a proxy-holder and a shareholder in Antigua, Barbados,
Tobago is one of agency. In these territories, the form of proxy is essentially an
administrative mechanism to facilitate shareholder participation in the
corporate decision-making process.
Appointment of proxy-holder
Under Commonwealth Caribbean Companies Acts with proxy voting

provisions, any shareholder who is entitled to vote at a meeting of
shareholders has an unfettered right171 to, by means of a proxy, appoint a
proxy-holder, or one or more alternate proxy-holders.172 A proxy-holder or
alternate proxy-holder so appointed need not be a shareholder.173 A proxy-
holder or alternate proxy-holder’s appointment entitles him to attend and act
at the meeting in the manner and to the extent authorised by the proxy and
with the authority conferred by the proxy.174
Vincent and Trinidad and Tobago, a proxy must be executed in writing by the
shareholder or his attorney authorised in writing175 and is valid only at the
meeting in respect of which it is given or any adjournment of that meeting.176
In the Bahamas, Jamaica and St Christopher Nevis, the Acts do not contain
any express stipulation as to what constitutes a proxy instrument or the
duration of the proxy’s authority. However, these Acts appear to contemplate
that a proxy must be appointed under an ‘instrument’177 and that a proxy’s
authority is for the meeting in respect of which the instrument is given.178
Revocation of proxy
The Acts in Antigua, the Bahamas, Barbados, Dominica, Grenada, Guyana,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago make express
provision for the revocation of a proxy by a shareholder.179 To do so, the
shareholder must deposit an instrument in writing executed by him, or by his
attorney authorised in writing,180 at the registered office of the company. This
may be done at any time, up to and including the last business day preceding
the day of the meeting, or any adjournment of that meeting, at which the
proxy is to be used.181 The instrument may alternatively be deposited with the
chairman of the meeting on the day of the meeting or any adjournment of
that meeting.182 The proxy may in any event be revoked in any other manner
permitted by law.183
The Acts in Jamaica and St Christopher/Nevis do not contain any express
provision requiring any particular procedure for the revocation of proxies. It
appears that, in these territories, a shareholder who has given a proxy may at
any time revoke it and will be deemed to have done so if he, the shareholder,
attends the shareholders’ meeting in person and exercises his right to vote.184
Deposit of proxies

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, proxies to be used
at a meeting must be deposited with the company or its agent prior to that
meeting.185 In this regard, the directors may specify in a notice calling a
meeting of shareholders a time, not exceeding forty-eight hours preceding the
meeting or adjournment of the meeting, when the proxy must be deposited.186
In calculating this time, Saturdays and public holidays are to be excluded.187
In the Canadian case of Beatty v First Exploration Fund 1987 & Co,188 it was
held that faxed proxies meet the requirements for deposit of signed and in-
writing proxies. The court went further and stated obiter that, unless there are
compelling reasons for rejection, use of technological advances in
communication should be encouraged.
The proxy solicitation machinery
Meaning of proxy solicitation
As has already been noted, the Acts in Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago establish an
elaborate regime aimed at controlling the modern practice of solicitation of
proxies by corporate management. The entire edifice of these regulations rests
upon the concept of solicitation of proxies. Not surprisingly, then, the
expression ‘solicit’, which is treated by the Acts as synonymous with
‘solicitation’, is elaborately defined in the Acts.189 It is defined to include a
request for a proxy, whether accompanied with or included in a proxy form;190
a request to execute or not to execute a form of proxy or to revoke a proxy;191
the sending of a form of proxy or other communication to a shareholder under
circumstances reasonably calculated to result in the procurement, withholding
or revocation of a proxy;192 and the sending of a form of proxy to a
shareholder who the management of a company is mandated to send when
giving notice of a shareholders’ meeting.193 In the Barbados High Court case of
McEnearney Alstons Ltd v McEnearney Alstons (B’dos) Ltd et al,194 Chase J
expressed the view that the effect of this statutory formulation is to enlarge
the word ‘solicit’ or ‘solicitation’ ‘to mean a solicitation not only in the
colloquial sense but also a solicitation in the statutory sense.’
A ‘solicitation by or on behalf of the management of a company’ is also
statutorily defined. It means a solicitation by any person pursuant to a
resolution or instructions of, or with the acquiescence of, the directors or a
committee of directors of the company concerned.195
The expression ‘solicit’ or ‘solicitation’ does not, however, include the
sending of a form of proxy in response to an unsolicited request made by or
on behalf of a shareholder.196 It also does not include the performance of
administrative acts or professional services on behalf of a person soliciting a
proxy;197 the sending by a registrant of the documents required under the Acts
to be sent by a share registrant to the beneficial owner of shares;198 or a
solicitation by a person in respect of shares of which he is the beneficial
owner.199
Management proxy solicitation
The management of a company is mandated to send, concurrently with the

giving of notice of a meeting of shareholders, a form of proxy in the
prescribed form to each shareholder who is entitled to receive notice of the
meeting.200 Where the company has fewer than fifteen shareholders, two or
more joint shareholders being counted as one, the management of the
company is not obliged to send such a form of proxy.201 However, the
Barbados High Court case of McEnearney Alstons Ltd v McEnearney Alstons
(B’dos) Ltd et al202 emphasises that as long as the company has fifteen or more
shareholders, it must send such a form of proxy.
As has been seen, the expression ‘solicit’ is defined to include the sending of
a form of proxy to a shareholder who the management of a company is
mandated to send when giving notice of a shareholders’ meeting.203 This
means, as was held in McEnearney Alstons Ltd v McEnearney Alstons (B’dos)
Ltd et al,204 that the management of a company with fifteen or more
shareholders is deemed to solicit proxies whenever it sends out notice of a
shareholders’ meeting.
Prohibited solicitation
A person, including the management of a company which is statutorily

deemed to be soliciting proxies, is prohibited from soliciting proxies unless
certain statutorily specified documents are sent to the auditor of the company,
to each shareholder whose proxy is solicited and to the company if a
solicitation is not by or on behalf of the management of the company.205
Where the solicitation is by or on behalf of the management of the company,
the document statutorily required to be sent is a management proxy circular
in the prescribed form.206 The management proxy circular may be either as an
appendix to, or as a separate document accompanying the notice of the
meeting.207 In the case of solicitation by any other person, the document which
must be sent is a dissident’s proxy circular in the prescribed form stating the
purpose of the solicitation.208
Legal effect of non-compliance with prohibited solicitation

requirements
The legal effect of non-compliance with the solicitation provisions was

considered in the Barbadian High Court case of McEnearney Alstons Ltd et al
v McEnearney Alstons (B’dos) Ltd et al.209 In this case it was argued that non-
compliance with the requirements in these provisions renders the business
conducted at a meeting where there was such non-compliance invalid and
decisions taken at such a meeting null and void. Chase J held that,
notwithstanding the use of the word ‘shall’ in the provisions on prohibited
solicitation, non-compliance did not attract invalidity. Non-compliance was to
be treated as an irregularity which may be cured by a later compliance with
the provisions.
Registrar and proxy solicitation
A person who is required to send a management proxy circular or dissident’s

proxy circular must concurrently send a copy thereof to the Registrar.210 A
copy of the notice of the meeting, form of proxy and any other documents for
use in connection with the meeting must accompany the management proxy
circular or dissident’s proxy circular.211 The Registrar also has power, upon the
application of an interested person, to grant exemption, which may be
retroactive, from any of the requirements relating to a proxy solicitation.212
In the Barbadian High Court case of McEnearney Alstons Ltd et al v
McEnearney Alstons (B’dos) Ltd et al,213 the legal effect of failure to send the
required documents to the Registrar was considered. Chase J held that such a
failure did not have the effect of invalidating a meeting held where there was
such a failure. Breach of the obligation to send the required documents to the
Registrar rendered the person in breach liable to the remedies prescribed in
the Acts for a default in complying with the Act.
Obligations of a person appointed who solicited the proxy
Where a person solicits a proxy and is appointed proxy-holder, he is under

two important obligations.214 The first is that he must attend in person, or
cause an alternate proxy-holder to attend, the meeting in respect of which the
proxy is given.215 The second is that he must comply with the directions of the
shareholder who appointed him.216
A proxy-holder or alternate proxy-holder has the same rights as the
shareholder who appointed him to speak at the meeting of shareholders in
respect of any matter,217 to vote by way of ballot at the meeting,218 and, except
where the proxy-holder or alternate proxy-holder has conflicting instructions
from more than one shareholder, to vote at the meeting in respect of any
matter by way of show of hands.219
Remedial powers of the court
If a form of proxy, management proxy circular or dissident’s proxy circular

contains a materially untrue220 or misleading statement,221 any interested
person or the Registrar may apply to the court.222 On such application, the
court may make any order it thinks fit.223 The types of orders which may be
made by the court includes an order restraining the solicitation or the holding
of the meeting, restraining any person from implementing or acting upon any
resolution passed at the meeting to which the form of proxy, the management
proxy circular or the dissident’s proxy circular relates.224 It also includes an
order requiring correction of any form of proxy, management proxy circular
or dissident’s proxy circular,225 and an order adjourning the meeting.226
Where an application is made by any person other than the Registrar, notice
of the application must be given to the Registrar.227 The Registrar may appear
and be heard in person or by an attorney-at-law.228
Share Registrants
Under the Companies Acts in Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago, shares of
companies, not beneficially owned by a registrant, may be registered in the
name of a registrant or his nominee.229 A registrant is defined in these Acts as
a broker or dealer required to be registered to trade or deal in shares or
debentures under the law of any jurisdiction.230 The Acts contain provisions
whose purpose is to ensure that, in such a case, a registrant does not vote
shares which are held as nominee without seeking voting instructions from his
principal.231
Shares in a company held by a registrant or his nominee may not be voted
unless the registrant, forthwith after receipt of the notice of the meeting,
financial statements, management proxy circular, dissident’s proxy circular or
other documents sent to shareholders by or on behalf of a person for use in
connection with the meeting (other than the form of proxy), sends a copy of
these documents to the beneficial owner.232 The registrant has a right to
request these documents from any person by or on behalf of whom a
solicitation is made and such person must forthwith furnish to the registrant at
that person’s expense the necessary number of copies of the documents.233
The registrant must also send to the beneficial owner a written request for
voting instructions.234 If, however, the registrant has already received written
voting instructions from the beneficial owner, there is no need to send a
request for voting instructions.235 In any event, unless he receives voting
instructions from the beneficial owner of the shares, a registrant may not vote
or appoint a proxy-holder to vote any shares registered in his name or in the
name of his nominee that he does not own beneficially.236
The registrant must vote or appoint a proxy-holder to vote any shares held
by him or his nominee in accordance with any written instructions received
from the beneficial owner.237 In fact, if requested by the beneficial owner of
shares of a company, the registrant of those shares must appoint the beneficial
owner or a nominee of the beneficial owner as proxy-holder for those
shares.238 The failure of the registrant to comply with any of the stipulated
statutory requirements that he must follow in voting shares not beneficially
held by him does not, however, render void any meeting of shareholders or
any action taken at the meeting.239
A registrant has no right to vote shares that he is prohibited from voting.240
Resolutions in Lieu of Meetings
Guyana, Montserrat, St Christopher/Nevis, St Lucia, St Vincent and Trinidad
and Tobago contain two provisions on resolutions in writing by shareholders
that may be used to obviate the need for a vote at a meeting of
shareholders.241 The first provision enacts that a resolution in writing on any
matter signed by all the shareholders entitled to vote on that resolution at a
meeting of shareholders is as valid as if it had been passed at a meeting of
shareholders.242 The second states that a resolution in writing dealing with all
matters required by the Acts to be dealt with at a meeting of shareholders,
and signed by all the shareholders entitled to vote at that meeting, satisfies the
requirements of the Acts relating to meetings of shareholders.243 A copy of
any such resolution must be kept with the minutes of the meeting.244
Shareholders’ Agreements
Pooling agreements and voting trusts
The Acts in Anguilla, Antigua, Barbados, Dominica, Grenada, Montserrat, St

Lucia, St Vincent and Trinidad and Tobago contain a provision as follows:245
A written agreement between two or more shareholders of a company may provide that in exercising
voting rights the shares held by them will be voted as provided in the agreement.
This provision may be interpreted as giving statutory recognition to two

special shareholder agreements, namely, pooling agreements and voting trusts.
Pooling agreements
A pooling agreement is a contractual arrangement among shareholders to

combine their interests and voting powers to secure the advantages of
concerted action. At common law such an agreement is valid, since
shareholders may generally exercise their votes in any way they please and
such an agreement can be enforced by mandatory injunction. Accordingly, in
the Supreme Court of Canada case of Ringuet v Bergeron,246 an agreement
among shareholders who owned or proposed to own the majority of the
issued shares of a company to join forces in order to pursue a certain course of
action was held not to be illegal or contrary to public policy.
On ordinary privity of contract principles it is patent that no action for
enforcement of a pooling agreement can lie against the company. This
notwithstanding, it appears that ex abundante cautela the Trinidad and
Tobago Act has expressly enacted this rule in section 136(2) of that Act, which
provides:
An aggrieved party to an agreement [between two or more shareholders] may not bring any action or
make any claim against a company on the grounds that shares were voted in accordance with that
agreement.
Voting trusts
As was earlier noted, the provision in the Acts in Anguilla, Antigua, Barbados,
on voting agreements between two or more shareholders also authorises
voting trusts agreements between two or more shareholders. A voting trust
involves the voting rights of all or some of the shares in a company being
settled upon trusts.247 The shares are usually transferred to trustees irrevocably
and for a defined period so that there is a separation of voting rights from
beneficial ownership. The separation of voting rights from beneficial
ownership distinguishes a voting trust from a pooling agreement in that in a
pooling agreement each shareholder retains full ownership of his shares and
binds himself only to vote in a particular way. On ordinary principles of
statutory interpretation, the provision on voting agreements in the Acts in
Vincent and Trinidad and Tobago does not exclude voting trusts agreements.
Unanimous shareholder agreements
A provision similar to section 133 of the Barbados Companies Act is to be

found in all the Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica,
Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago.248 This
provision introduces for the first time into Commonwealth Caribbean
company law the ‘unanimous shareholder agreement’. Section 133 reads as
follows:249
(1) An otherwise lawful written agreement among all the shareholders of

a company, or among all the shareholders and a person who is not a
shareholder, that restricts, in whole or in part, the powers of the
directors of the company to manage the business and affairs of the
company is valid.
(2) A shareholder who is a party to any unanimous shareholder
agreement has all the rights, powers and duties, and incurs all the
liabilities of a director of the company to which the agreement relates,
to the extent that the agreement restricts the discretion or powers of
the directors to manage the business and affairs of the company; and
the directors are thereby relieved of their duties and liabilities to the
same extent.
(3) If a person who is the beneficial owner of all the issued shares of a
company makes a written declaration that restricts in whole or in part
the powers of the directors to manage the business and affairs of the
company, the declaration constitutes a unanimous shareholder
agreement.
(4) Where any unanimous shareholder agreement is executed or
terminated, written notice of that fact, together with the date of the
execution or termination thereof, must be filed with the Registrar
within 15 days after execution or termination.
This provision, which is derived from section 146 of the Canada Business
Corporation Act, though the actual statutory language is more similar in some
respects to section 108 of the Ontario Business Corporation Act, begs deeper
analysis.
Concept of unanimous shareholder agreement

Section 2(1)(i) of the Barbados Act provides that a ‘unanimous shareholder
agreement’ means an agreement described in section 133’.250 It is obvious from
section 133(1)251 that a unanimous shareholder agreement is a statutory
mechanism which allows shareholders of a company to divest the directors of
their directorial powers by the simple device of a lawful written agreement
among all the shareholders of the company. A written declaration by the
beneficial owner of all the issued shares of a company which restricts in whole
or in part the powers of the directors to manage the business and affairs of the
company also constitutes a unanimous shareholder agreement.252 A
unanimous shareholder agreement enjoys a status similar to the company’s
constating documents and is to be treated in pari materia with the company’s
articles and bye-laws.253
The simple procedure involved in a unanimous shareholder agreement
replaces the need at common law for the time consuming procedure of giving
notice of and convening a shareholders’ meeting to remove the directors from
the board.254 The unanimous shareholder agreement does not lead to the
removal of the directors from their position. It merely removes directorial
power to the extent set out in the unanimous shareholder agreement.255
In the leading case of Duha Printers (Western) Ltd v The Queen,256 Iacobucci
J in the Supreme Court of Canada, after noting that prior to the provision for
unanimous shareholder agreements in Canadian corporation law, the ability of
shareholders to control a corporation incorporated in Canadian jurisdictions
(which did not follow the English memorandum and articles system of
incorporation) was limited to the power to elect and dismiss directors, made
the following observation on the concept of a unanimous shareholder
agreement:257
The advent of the unanimous shareholder agreement, first in the Canada Business Corporation Act, and
then in other statutes modeled after it, materially altered this situation by providing a mechanism by
which the shareholders, through a unanimous agreement, could strip the directors of some or all of their
managerial powers as desired by the shareholders. Rather than removing the directors from their positions,
a unanimous shareholder agreement simply relieves them of their powers, rights, duties and associated
responsibilities. This may be accomplished without specific formality; all that is required appears to be
some unanimous written expression of shareholder will. The result, however, amounts to a fundamental
change in the management of the company, as s. 140 (5) of the Corporation Act provides that the
shareholders who are parties to the unanimous shareholder agreement assume all the rights, powers, duties
and liabilities of the directors which are removed by the agreement, and that the directors are relieved of
their duties and liabilities to the same extent. As I have already intimated, what is in effect created is an
‘incorporated partnership’ with statutory force.
In Duha Printers (Western) Ltd v The Queen258 it was also stated that a valid
unanimous shareholder agreement must satisfy three criteria, namely, the
agreement must be otherwise lawful, it must be among all the shareholders of
the company as well as, possibly, a non-shareholder, and it must restrict, in
whole or part, the powers of the directors to manage the business and affairs
of the company.
Legal effect of unanimous shareholder agreement provisions
One clear result of the unanimous shareholder agreement provisions is that

they give statutory validity to ‘an otherwise lawful written agreement’ among
shareholders to restrict, in whole or in part, the powers of the directors to
manage the business and affairs of the company.259 Another is that they confer
on a shareholder who is a party to a unanimous shareholder agreement all the
rights and powers of a director and correspondingly, impose on him the duties
of a director to manage the business and affairs of the company.260 Finally, the
provisions relieve the directors of their duties and liabilities to the same extent
that the agreement restricts the discretion or powers of he directors to manage
the business and affairs of the company.261
The net legal effect of the unanimous shareholder agreement provisions,
then, is that it puts the shareholders in the place of the directors both in respect
of rights and powers as well as duties and liabilities as regards the matters to
which the agreement relates and to the extent that the agreement restricts the
discretion or powers of the directors to manage the business and affairs of the
company. This much appears from the plain words of section 133(2) of the
Barbados Act.262 There is also a strong implication from this provision that the
shareholders, having taken the place of the directors and having assumed the
directors’ duties and liabilities, are thereby constituted fiduciaries and also
assume a duty of care as regards the matters to which the agreement relates
and to the extent that the agreement restricts the discretion or power of the
directors.
There has been some debate in Canada as to whether the fiduciary duties
assumed by the shareholders to a unanimous shareholder agreement include
the duty not to fetter their discretion.263 This debate springs from the fact that
the rationale which is usually given for the introduction of the provision on
unanimous shareholder agreement in Canadian corporate law is that it serves
to reverse the common law rule in Canada adumbrated in Motherwell v
Schoof264 that shareholders cannot validly bind themselves by agreement to
fetter the discretion of directors in the exercise of directorial powers. This is
because, even though the rule at common law is that agreements among
shareholders as to the manner in which they shall vote are valid, this rule is
subject to the qualification that the agreement must be for a lawful purpose.
An agreement which purports to bind the shareholders qua directors is not for
a lawful purpose since it is an invalid attempt to fetter the discretion of the
directors.
Given the rationale for the introduction of the unanimous shareholder
agreement in Canada, the view has been strongly expressed that the
provisions have changed the law and permit shareholders to agree
unanimously to fetter their discretion qua directors.265 In other words,
shareholders to a unanimous shareholders’ agreement who admittedly ipso
jure assume the capacity of directors can do precisely what was prohibited by
Motherwell v Schoof,266 namely, agree unanimously to fetter their discretion
qua directors. The opposite view has been equally strongly put forward.267
Thus, it has been propounded that, notwithstanding the stated rationale for the
introduction of the unanimous shareholder agreement in Canadian law, the
actual wording of the provisions compel the conclusion that each shareholder
to a unanimous shareholder agreement qua director is caught by the rule in
Motherwell v Schoof268 and cannot fetter his discretion. Accordingly, each
shareholder is required to remain free to exercise his judgment in the future
when voting on corporate affairs, his agreement in the unanimous shareholder
agreement notwithstanding.269
The debate on the Canadian provisions appears to be otiose in
Commonwealth Caribbean law since the explanation of the need for
unanimous shareholder provisions in Canadian company legislation is far from
persuasive in Commonwealth Caribbean company law. Prior to the enactment
of the unanimous shareholder agreement provisions in the region,
Commonwealth Caribbean company law was based on English company
legislation, under which the directors’ management powers were derived, not
from statute, but from the shareholders delegating these powers to the
directors in the articles of association. Shareholders could, therefore, validly
fetter the powers of directors to manage the affairs of companies by provision
in the articles of association.
Put simply, under English-based Commonwealth Caribbean company law,
powers that were not delegated to the directors, but reserved in the articles of
association for shareholders, necessarily constituted a fetter on directorial
power of management. In any event, the decision in Re Duomatic Ltd270 is
authority that under this law, shareholders can, by unanimous agreement,
override the articles of association and restrict the directors’ power in the
articles of association in matters which are intra vires the company. Prior to
the enactment of the unanimous shareholder agreement provisions in the
region, therefore, there was no common law rule to be reversed in
Commonwealth Caribbean company law similar to that in Canada that
shareholders could not validly bind themselves by agreement to fetter the
discretion of directors in the exercise of directorial powers.
It is submitted that the real reason for the enactment of the unanimous
shareholder agreement in regional statutes is to reverse the English common
law rule, which represented the common law in the region, expressed in
Automatic Self-Cleaning Filter Syndicate Co v Cunninghame.271 That case laid
down that the division of powers between the directors and the shareholders
in general meeting depended in the case of registered companies entirely upon
the construction of the articles of association and that where the articles vested
powers in the directors the shareholders in general meeting could not interfere
with their exercise.
This rule is well captured in the judgment of Greer LJ in the English Court
of Appeal case of Shaw & Sons (Salford) Ltd v Shaw, where he said:272
A company is an entity distinct alike from its shareholders and its directors. Some of its powers may,
according to its articles, be exercised by directors, and certain other powers may be reserved for the
shareholders in general meeting. If powers of management are vested in the directors, they and they alone
can exercise these powers. The only way in which the general body of the shareholders can control the
exercise of the powers vested by the articles in the directors is by altering their articles, or, if opportunity
arises under the article, by refusing to elect the directors of whose actions they disapprove. They cannot
themselves usurp the powers which by the articles are vested in the directors any more than the directors
can usurp the powers vested by the articles in the general body of shareholders.
The purpose of the unanimous shareholder agreement provisions in regional

statutes is to reverse this rule and to allow shareholders to divest directors of
their managerial powers without having to go through the time-consuming
procedure of giving notice of and convening a shareholders’ meeting to
remove the directors or to alter the articles of incorporation or the bye-laws,
as the case may be.273
In light of the foregoing, no absurdity can arise in interpreting the
unanimous shareholder agreement provisions as imposing on shareholders to
such an agreement a duty not to fetter their discretion in respect of the
matters to which the agreement relates and to the extent that the agreement
restricts the discretion or powers of the directors to manage the business and
affairs of the company. The effect of the unanimous shareholder agreement is
to put each shareholder into a director’s role vis-à-vis the matters to which the
agreement relates. The plain words of the provisions in section 133(2)274 are
then to be construed as imposing on each shareholder to a unanimous
shareholder agreement all, not some, of the duties of directors in respect of the
matters to which the agreement relate.
Requirement for filing of unanimous shareholder agreement
As has been seen,275 it was laid down by the Supreme Court of Canada in the
case of Duha Printers (Western) Ltd v The Queen276 that a unanimous
shareholder agreement has the same status of a constitutional document of the
company in the sense that it gives rise to obligations which are not only
contractual, but also legal and constitutional in nature. It is therefore not
surprising that, where any unanimous shareholder agreement is executed or
terminated, written notice of that fact, together with the date of the execution
or termination thereof, must be filed with the Registrar.277 Such filing must be
done within fifteen days after the execution or termination.278
Conclusion
Broadly speaking, the company law regime in the Commonwealth Caribbean
on shareholder participation in corporate decision-making may be divided into
two groups. The first group, consisting of Belize, Jamaica and St
Christopher/Nevis, relies substantially on the common law rules on meetings,
proxies, proxy solicitation, and shareholders’ agreements. The second group,
which includes Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, has
legislated technical provisions aimed at clarifying or modernising those more
ambiguous or anachronistic common law rules. By and large, the law in this
second group embodies reforms aimed at protecting certain minority rights
and avoiding unnecessary disputes over ambiguous rules without interfering
unduly with the right of the company to determine its own rules of internal
conduct.
Notes
1 Ang s 68(3); Ant s 69(3); Bah s 84(3); B’dos s 66(3); Dom s 69(3); Gren s 69(3); Guy s 68(1); J’ca s 178; Mont s
69(3); St L s 69(3); St V s 69(3); T’dad s 71(3).
2 Ang s 137(1); Ant s 162(1); Bah s 125(1); B’dos s 155(1); Dom s 162(1); Guy s 172(1); J’ca s 154(1); Mont s
162(1); St C/N s 109(1)(a); St L s 162(1); St V s 162(1); T’dad s 163(1).
3 See Ang s 106(1); Ant s 107; Bah s 65; Bel s 66(1); B’dos s 105; Dom s 107; Gren s 107; Guy s 107(1); J’ca s
126(1); Mont s 107; St C/N s 87; St L s 107; St V s 107; T’dad s 109.
4 The literature on the role of shareholders in the large modern corporation is extensive. For some examples,
see Berle and Means, The Modern Corporation and Private Property (revised edn New York: 1968); Chayes,
‘The Modern Corporation and the Rule of Law’ in Mason, Corporation in Modern Society (New York: 1960)
at 41; Manning, ‘The Shareholder Appraisal Remedy: An Essay for Frank Coker’ (1962) Yale LJ 223;
Eisenberg, ‘The Legal Role of Shareholders and Management in Modern Corporate Decision Making’
(1969) 57 Calif L Rev 1; Slutsky, ‘The Division of Power Between the Board of Directors and the General
Meeting’, 2 Studies in Canadian Company Law (Zeigel ed, Toronto: 1973) at 166; Davies, ‘Institutional
Investors in the United Kingdom’ in Baums et al (eds), Institutional Investors and Corporate Governance
(London: 1994).
5 ‘The Shareholder Appraisal Remedy: An Essay for Frank Coker’ (1962) Yale LJ 223, 261.
6 Berle and Means, The Modern Corporation and Private Property (revised edn New York: 1968).
7 Ang s 106(1); Ant s 107; Bah s 65; Bel s 66(1); B’dos s 105; Dom s 107; Gren s 107; Guy s 107(1); J’ca s 126(1);
Mont s 107; St C/N s 87; St L s 107; St V s 107; T’dad s 109.
8 Ang s 106(1)(a); Ant s 107(a); B’dos s 105(a); Dom s 107(a); Gren s 107(a); Guy s 107(1)(a); J’ca s 126(1); Mont
s 107(a); St C/N s 87(2); St L s 107(a); St V s 107(a); T’dad s 109(a).
9 Ang s 106(1)(a); Ant s 107(a); Bel s 66(1); B’dos s 105(a); Dom s 107(a); Gren s 107(a); Guy s 107(1)(a); J’ca s
126(1); Mont s 107(a); St C/N s 87(3): the period is eighteen months in the case of a public company and
twenty-two months in the case of a private company; St L s 107(a); St V s 107(a); T’dad s 109(a).
158(1): profit and loss account and s 158(2): balance sheet; J’ca s 145(1): profit and loss account and s 145(2):
balance sheet; Mont s 149(1); St C/N s 104(4)(b); St L s 149(1)(a); St V s 149(1)(a); T’dad s 151(1)(a).
11 Ang s 128(1)(b); Ant s 149(1)(b); Bah s 118(1)(b); B’dos s 147(1)(b); Dom s 149(1)(b); Gren s 149(1)(b); Guy s
185(1); J’ca s 157(1); Mont 149(1)(b); St C/N s 104(4)(b); St L s 149(1)(b); St V s 149(1)(b); T’dad s 151(1)(b).
s 69(3); St V s 69(3); T’dad s 71(3).
13 See Guy s 168.
15 See Ang s 111(1); Ant s 112(1); B’dos s 110(1); Dom s 112(1); Gren s 112(1); Guy s 112(1); Mont s 112(1); St L s
112(1); St V s 112(1); T’dad s 114(1).
16 Bah s 65(2).
17 Bel s 67(1).
18 J’ca s 127(10).
19 Bah s 65(2); Bel s 67(1); J’ca s 127(1).
20 Bel s 67(2); J’ca s 127(2).
21 Bel s 67(3); J’ca s 127(3).
22 Bel s 67(3); J’ca s 127(3).
23 Bel s 67(3)(a); J’ca s 127(3)(a).
24 Bel s 67(3)(b); J’ca s 127(3)(b).
25 Bel s 67(3)(c); J’ca s 127(3)(c).
26 Bel s 67(3)(d); J’ca s 127(3)(d).
27 Bel s 67(3)(e); J’ca s 127(3)(e).
28 Bel s 67(4); J’ca s 127(4).
29 Bel s 67(5); J’ca s 127(5).
30 Bel s 67(6); J’ca s 127(6).
31 Bel s 67(7); J’ca s 127(7).

32 Bel s 67(8); J’ca s 127(8).
33 Bel s 67(9); J’ca s 127(9).
34 Ang s 106(1)(b); Ant s 107(b); B’dos s 105(b); Dom s 107(b); Gren s 107(b); Guy s 107(1)(b); Mont s 107(b); St
L s 1107(b); St V s 107(b); T’dad s 109(b).
35 Ang s 121; Ant s 131; B’dos s 129; Dom s 131; Gren s 131; Mont s 131; St C/N s 89; St L s 131; St V s 131;
T’dad s 133.
36 Bah s 66; Bel s 68; Guy s 135; J’ca s 128.
37 Ang s 121(1): 5 per cent; Ant s 131(1): 5 per cent; Bah s 66(1): 10 per cent; Bel s 68(1): 10 per cent; B’dos s
129(1): 5 per cent; Dom s 131(1): 5 per cent; Gren s 131(1): 5 per cent; Guy s 135(1): 10 per cent; J’ca s 128: 10
per cent; Mont 131(1): 5 per cent; St C/N s 89(2)(a): 10 per cent; St L s 131(1): 5 per cent; St V s 131(1): 5 per
cent; T’dad s 133(1): 5 per cent.
38 Ang s 121(2); Ant s 131(2); Bah s 66(2); Bel s 68(2); B’dos s 129(2); Dom s 131(2); Gren s 131(2); Guy s 135(3);
J’ca s 128(2); Mont s 131(2); St C/N s 89(3); St L s 131(2); St V s 131(2); T’dad s 133(2).
39 Note that this is not a requirement under the Acts in the Bahamas, Belize, Jamaica and St
Christopher/Nevis.
40 Ang s 121(2); Ant s 131(2); Bah s 66(2); Bel s 68(1); B’dos s 129(2); Dom s 131(2); Gren s 131(2); Guy s 135(3);
43 Ang s 121(3)(b); Ant s 131(3)(b); B’dos s 129(3)(b); Dom s 131(3)(b); Gren s 131(3)(b); Guy s 135(4)(b); Mont s
44 Ang s 121(3)(c); Ant s 131(3)(c); B’dos s 129(3)(c); Dom s 131(3)(c); Gren s 131(3)(c); Guy s 135(4)(c); Mont s
45 Ang s 121(4); Ant s 131(4); B’dos s 129(4); Dom s 131(4); Gren s 131(4); Guy s 135(5); Mont 131(4); St L s
131(4); St V s 131(4); T’dad s 133(4).

47 Ant s 131(5); Bah s 66(4); Bel s 68(5); B’dos s 129(5); Dom s 131(5); Gren s 131(5); Guy s 135(6); J’ca s 128(4);
48 Ant s 131(6); B’dos s 129(6); Dom s 131(6); Gren s 131(6); Guy s 135(7); J’ca s 128(5); Mont s 131(6); St C/N s
89(6); St L s 131(6); St V s 131(6); T’dad s 133(6).
49 Ant s 132(1)(a)(i); Bah s 67(1)(a)(i); B’dos s 130(1)(a)(i); Dom s 132(1)(a)(i); Gren s 132(1)(a)(i); Guy s 136(1)(a)
(i); J’ca s 130(2); St C/N s 94(1); St L s 132(1)(a)(i); St V s 132(1)(a)(i); T’dad s 134(1)(a)(i).
50 Ant s 132(1)(a)(ii); Bah s 67(1)(a)(ii); B’dos s 130(1)(a)(ii); Dom s 132(1)(a)(ii); Gren s 132(1)(a)(ii); Guy s 136(1)
(a)(ii); J’ca s 130(2); St C/N s 94(1); St L s 132(1)(a)(ii); St V s 132(1)(a)(ii); T’dad s 134(1)(a)(ii).
51 Ant s 132(1)(c); Bah s 67(1)(b); B’dos s 130(1)(b); Dom s 132(1)(c); Gren s 132(1)(c); Guy s 136(1)(b); J’ca s
130(2); St C/N s 94(1); St L s 132(1)(c); St V s 132(1)(c); T’dad s 134(1)(c).
52 Ant s 132(1); Bah s 67(1); B’dos s 130(1); Dom s 132(1); Gren s 132(1); Guy s 136(1); St L s 132(1); St V s 132(1);
T’dad s 134(1).
53 J’ca s 130(3); St C/N s 94(3).
54 Ant s 132(2); Bah s 67(2); B’dos s 130(2); Dom s 132(2); Gren s 132(2); Guy s 136(2); St L s 132(2); St V s 132(2);
T’dad s 134(2).
55 (1999) 178 DLR (4th) 740 Ont SCJ [Commercial List].
56 Ant s 132(3); Bah s 67(3); B’dos s 130(3); Dom s 132(3); Gren s 132(3); Guy s 136(3); J’ca s 130(2); St L s 132(3);
St V s 132(3); T’dad s 134(3).
57 Bel s 66(2).
58 J’ca s 126(2); St C/N s 88(1).
59 J’ca s 126(2); St C/N s 88(1).
60 J’ca s 126(2); St C/N s 88(1).
61 J’ca s 126(2); St C/N s 88(2).
62 J’ca s 126(3); St C/N s 88(4).
63 J’ca s 126(3); St C/N s 88(4).
64 J’ca s 126(4); St C/N s 88(5).
65 J’ca s 126(4); St C/N s 88(5).

66 Ang s 105(2); Ant s 105(4); Bah s 68(1); B’dos s 103(1); Dom s 105(4); Gren s 105(4); Guy s 105(1); Mont s
105(4); St L s 105(4); St V s 105(4); T’dad s 107(4).
105(4); St L s 105(4); St V s 105(4); T’dad s 107(4).
68 See Re Atkinson [2002] 31 BLR (3d) 47 Alta QB.
69 Ang s 105(3); Ant s 105(5); Bah: no similar provision; B’dos s 103(2); Dom s 105(5); Gren s 105(5); Guy s
105(6); St L s 105(6); St V s 105(6); T’dad s 107(6).
71 Ang s 105(1); Ant s 106; Bah s 69; B’dos s 104; Dom s 106; Gren s 106; Guy s 106; Mont s 106; St L s 106; St V
s 106; T’dad s 108(1).
72 Ang s 110(1)(a); Ant s 111(1)(a); B’dos s 109(1)(a); Dom s 111(1)(a); Gren s 111(1)(a); Mont s 111(1)(a); St L s
111(1)(a); St V s 111(1)(a); T’dad s 113(1)(a).
73 Ang s 110(1)(b); Ant s 111(1)(b); Bah: no similar provision; B’dos s 109(1)(b); Dom s 111(1)(b); Gren s 111(1)
74 Ang s 110(1)(c); Ant s 111(1)(c); B’dos s 109(1)(c); Dom s 111(1)(c); Gren s 111(1)(c); Mont s 111(1)(c); St L s
111(1)(c); St V s 111(1)(c); T’dad s 113(1)(c).
75 Ang s 110(1): not less than seven nor more than thirty; Ant s 111(1): not less than seven nor more than
thirty; B’dos s 109(1): not less than twenty-one nor more than fifty; Dom s 111(1): not less than seven nor
more than thirty; Gren s 111(1): not less than seven nor more than thirty; Mont s 111(1): not less than seven
nor more than thirty; St L s 111(1): not less than seven nor more than thirty; St V s 111(1): not less than
seven nor more than thirty; T’dad s 113(1): not less than ten nor more than fifty.
76 Guy s 111(1).
77 Guy s 110.
78 For a case discussing the fixing of the record date, see Airline Industry Revitalisation Co v Air Canada
(1999) 178 DLR (4th) 740 Ont SCJ [Commercial List].
79 Ang s 107(2); Ant s 108(2); B’dos s 106(2); Dom s 108(2); Gren s 108(2); Guy s 108(2); Mont s 108(2); St L s
108(2); St V s 108(2); T’dad s 110(2).
80 Ang s 107(2): more than thirty or less than seven; Ant s 108(2): more than thirty or less than seven; B’dos s
106(2): more than fifty or less than twenty-one; Dom s 108(2): more than thirty or less than seven; Gren s
108(2): more than thirty or less than seven; Guy s 108(2): more than fifty or less than twenty-one; Mont s
108(2); St L s 108(2): more than thirty or less than seven; St V s 108(2): more than thirty or less than seven;
T’dad s 110(2): more than sixty or less than fourteen.
81 Ang s 109; Ant s 110; B’dos s 108; Dom s 110; Gren s 110; Guy s 110; Mont s 110; St L s 110; St V s 110;
T’dad s 112.
82 Ang s 108(a)(i); Ant s 109(a)(i); B’dos s 10 7(a)(i); Dom s 109(a)(i); Gren s 109(a)(i); Guy s 109(a)(i); Mont s
109(a)(i); St L s 109(a)(i); St V s 109(a)(i); T’dad s 111(a)(i).
83 Ang s 108(a)(ii); Ant s 109(a)(ii); B’dos s 10 7(a)(ii); Dom s 109(a)(ii); Gren s 109(a)(ii); Guy s 109(a)(ii); Mont
s 109(a)(ii); St L s 109(a)(ii); St V s 109(a)(ii); T’dad s 111(a)(ii).
111(2); T’dad s 113(2).
111(2); T’dad s 113(2).
111(3); T’dad s 113(3).
111(4); T’dad s 113(4).
88 Ang s 110(4); Ant s 111(4); B’dos s 109(4); Dom s 111(4); Gren s 111(4); Mont 111(4); St L s 111(4); St V s
111(4); T’dad s 113(4).
89 Ant ss 114–122; B’dos ss 112–120; Dom ss 114–122; Gren ss 114–122; Guy ss 114–122; Mont ss 114–122; St L
ss 114–122; St V ss 114–122; T’dad ss 116–124.
90 J’ca ss 135–137.
114(a); T’dad s 116(a).
92 Ant s 114(b); B’dos s 112(b); Dom s 114(b); Gren s 114(b); Guy s 114(b); Mont s 114(b); St L s 114(b); St V s
114(b); T’dad s 116(b).
93 [1996] 3 SCR 550 SCC.
94 Re Greenpeace Foundation of Canada & Inco Ltd (1984) 24 ACWS (2d) 176 Ont HC, affd (1984) 25 ACWS
(2d) 149 Ont CA.
95 Airline Industry Revitalisation Co v Air Canada (1999) 178 DLR (4th) 740 Ont SCJ [Commercial List].
96 Ant s 115(1); B’dos s 113(1); Dom s 115(1); Gren ss 115(1); Guy s 115(1); Mont s 115(1); St L s 115(1); St V s
115(1); T’dad s 117(1).
97 Ant s 115(2); Bah: no provisions; B’dos s 113(2); Dom s 115(2); Gren ss 115(2); Guy s 115(2); Mont s 115(2); St
L s 115(2); St V s 115(2); T’dad s 117(2).
117(a); T’dad s 119(a).
117(b); T’dad s 119(b). See also Watkin v Open Window Bakery Ltd (1996) 26 BLR (2d) 301 Ont Gen Div
[Commercial List].
101 Ant s 117(c); B’dos s 115(c); Dom s 117(c); Gren s 117(c); Guy s 117(c); Mont s 117(c); St L s 117(c); St V s
117(c); T’dad s 119(c).
102 Ant s 117(d); B’dos s 115(d); Dom s 117(d); Gren s 117(d); Guy s 117(d); Mont s 117(d); St L s 117(d); St V s
117(d); T’dad s 119(d).
103 Ant s 117(e); B’dos s 115(e); Dom s 117(e); Gren s 117(e); Guy s 117(e); Mont s 117(e); St L s 117(e); St V s
117(e); T’dad s 119(e).
106 (1987) 41 DLR (4th) 384 Ont CA.
116(a); T’dad s 118(a).
116(b); T’dad s 118(b).
118 J’ca s 135(1).
119 J’ca s 135(1).
120 J’ca s 135(1).
121 J’ca s 135(1).
122 J’ca s 135(2).
123 J’ca s 135(2).
123(1); St V s 123(1); T’dad s 125(1).
123(1); St V s 123(1); T’dad s 125(1).
126 Ang s 113(1); Ant s 123(1)(a); B’dos s 121(1)(a); Dom s 123(1)(a); Gren s 123(1)(a); Guy s 123(1)(a); Mont s
127 Ang s 113(1)(b)(i); Ant s 123(1)(b)(i); B’dos s 121(1)(b)(i); Dom s 123(1)(b)(i); Gren s 123(1)(b)(i); Guy s 123(1)
(b)(i); Mont s 123(1)(b)(i); St L s 123(1)(b)(i); St V s 123(1)(b)(i); T’dad s 125(1)(b)(i).
128 Ang s 113(1)(b)(ii); Ant s 123(1)(b)(ii); B’dos s 121(1)(b)(ii); Dom s 123(1)(b)(ii); Gren s 123(1)(b)(ii); Guy s
123(1)(b)(ii); Mont s 123(1)(b)(ii); St L s 123(1)(b)(ii); St V s 123(1)(b)(ii); T’dad s 125(1)(b)(ii).
123(2); St V s 123(2); T’dad s 125(2).
132 s 121(4) Ang s 113(4); Ant s 123(4); B’dos s 121(4); Dom s 123(4); Gren s 123(4); Guy s 123(4); Mont s 123(4); St
L s 123(4); St V s 123(4); T’dad s 125(4).
s 126.
124(a); St V s 124(a); T’dad s 126(a).
135 Ang s 114(b); Ant s 124(b); B’dos s 122(b); Dom s 124(b); Gren s 124(b); Guy s 124(b); Mont s 124(b); St L s
124(b); St V s 124(b); T’dad s 126(b).
136 Ang s 115(1); Ant s 125(1); Bah s 65(1); B’dos s 123(1); Dom s 125(1); Gren s 125(1); St L s 125(1); St V s 125(1);
T’dad s 127(1).
137 Guy s 125(1): provides that two or more persons present shall constitute a quorum.
138 J’ca s 130(1)(c).
139 See Ang s 5(1); Ant s 4(1); B’dos s 4(1); Dom s 4(1); Gren s 4(1); Guy s 4(1); J’ca s 3(1); Mont s 4(1); St C/N s
4(1); St L s 4(1); St V s 4(1); T’dad s 8(1).
140 Sharp v Dawes (1876) 2 QBD 26 Eng CA; Re Sanitary Carbon Co [1877] WN 223.
141 Ang s 115(4); Ant s 125(4); B’dos s 123(4); Dom s 125(4); Gren s 125(4); Guy s 125(2); Mont s 125(4); St C/N s
92(h); St L s 125(4); St V s 125(4); T’dad s 127(4).
142 Ang s 115(4); Ant s 125(4); B’dos s 123(4); Dom s 125(4); Gren s 125(4); Guy s 125(2); Mont s 125(4); St C/N s
92(h); St L s 125(4); St V s 125(4); T’dad s 127(4).
143 (1876) 2 QBD 26 Eng CA.
125(2); St C/N s 92(e); St L s 125(2); St V s 125(2); T’dad s 127(2).
145 Ang s 115(3); Ant s 125(3); Bah s 65(3); B’dos s 123(3); Dom s 125(3); Gren s 125(3); Guy s 125(4): permits the
persons present to adjourn the meeting to a fixed time and place; Mont s 125(3); St C/N s 92(e): meeting
stands adjourned to the same day in the next week; St L s 125(3); St V s 125(3); T’dad s 127(3).
146 Ang s 115(3); Ant s 125(3); Bah s 65(3); B’dos s 123(3); Dom s 125(3); Gren s 125(3); Guy: no similar
provision; Mont s 125(3); St C/N s 92(e): any member present in person or by proxy shall be a quorum; St
L s 125(3); St V s 125(3); T’dad s 127(3).
147 (Unreported) Suit no 2401 of 2001 B’dos HC.
148 See Ang s 115(3); Ant s 125(3); Bah s 65(3); B’dos s 123(3); Dom s 125(3); Gren s 125(3); Guy s 125(4); Mont s
125(3); St C/N s 92(e); St L s 125(3); St V s 125(3); T’dad s 127(3).
149 See Bel Art 52 of Table; J’ca Art 60 of Table A, 1st Sch.
129(1); St L s 129(1); St V s 129(1); T’dad s 131(1).
151 Ang s 116; Ant s 126; Bah: no similar provision; B’dos s 124; Dom s 126; Gren s 126; Guy s 129; Mont s 126;
St C/N s 92(g): worded somewhat differently; St L s 126; St V s 126; T’dad s 128.
152 Ang s 119(1); Ant s 129(1); Bah s 66(1); B’dos s 127(1); Dom s 129(1); Gren s 129(1); Guy s 132(1); J’ca s 132;
129(2); St L s 129(2); St V s 129(2); T’dad s 131(2).
154 J’ca s 132.
155 J’ca s 132(1)(a).
156 J’ca s 132(1)(b).
157 J’ca s 132(2).
158 Ang s 116; Ant s 126; B’dos s 124; Dom s 126; Gren s 126; Guy s 129; Mont s 126; St C/N s 92(g)(i); St L s 126;
St V s 126; T’dad s 128.
159 J’ca s 133.
160 Ang s 117(1); Ant s 127(1); Bah s 67(1); B’dos s 125(1); Dom s 127(1); Gren s 127(1); Guy s 130(1); J’ca s 134(1)
(a); Mont s 127(1); St C/N s 93(1); St L s 127(1); St V s 127(1); T’dad s 129(1).
161 Ang s 117(2); Ant s 127(2); Bah s 67(2); B’dos s 125(2); Dom s 127(2); Gren s 127(2); Guy s 130(2); J’ca s 134(2)
(a); Mont s 127(2); St C/N s 93(2); St L s 127(2); St V s 127(2); T’dad s 129(2).
162 Ang s 118; Ant s 128; Bah s 67(3); B’dos s 126; Dom s 128; Gren s 128; Guy s 131; Mont s 128; St L s 128; St V
s 128; T’dad s 130.
s 128; T’dad s 130.
s 128; T’dad s 130.
165 Ant ss 137–148; Bah ss 74–77; B’dos ss 135–146; Dom ss 137–148; Gren ss 137–148; Guy ss 141–152; J’ca s 131;
Mont ss 137–148; Ct C/N s 96; St L ss 137–148; St V ss 137–148; T’dad ss 139–149.
166 Harben v Philips (1883) 23 Ch D 14 Eng CA; and see Woodford v Smith [1970] 1 WLR 806, 810 per Megarry
J.
137(1)(b); St V s 137(1)(b); T’dad s 139(1).
168 Ant s 137(1)(a); B’dos s 135(1)(a); Dom s 137(1)(a); Gren s 137(1)(a); Guy s 141(1)(a); Mont s 137(a); St L s
137(1)(a); St V s 137(1)(a); T’dad s 139(1).
169 Bah s 74(1); J’ca s 131(1); St C/N s 96(1).
170 (2002) 20 BLR (3d) 279 Ont SCJ, affd (2004) 40 BLR (3d) 108 Ont CA.
171 Sunrose Construction (Dixie) Ltd v Don-Com Venture Capital Corpn (1983) 24 BLR 192 Ont Co Ct.
172 Ant s 138(1); Bah s 74(1); B’dos s 136(1); Dom s 138(1); Gren s 138(1); Guy s 142(1); J’ca s 131(1); Mont s
138(1); St C/N s 96(1); St L s 138(1); St V s 138(1); T’dad s 140(1).
175 Ant s 138(2); B’dos s 136(2); Dom s 138(2); Gren s 138(2); Guy s 142(2); Mont s 138(2); Mont s 138(2); St L s
138(2); St V s 138(2); T’dad s 140(2).
138(3); T’dad s 140(3).
177 Bah s 76; J’ca s 131(3); St C/N s 96(4).
178 Bah s 65(1); J’ca s 131(1); St C/N s 96(1).
179 Ant s 139; Bah s 77; B’dos s 137; Dom s 139; Gren s 139; Guy s 143; Mont s 139; St L s 139; St V s 139; T’dad s
141.
180 Ant s 139(a); Bah s 77(a); B’dos s 137(a); Dom s 139(a); Gren s 139(a); Guy s 143(a); Mont s 143(a); St L s
139(a); St V s 139(a); T’dad s 141(a).
181 Ant s 139(a)(i); Bah s 77(a)(i); B’dos s 137(a)(i); Dom s 139(a)(i); Gren s 139(a)(I); Guy s 143(a)(i); Mont s 139(a)
(i); St L s 139(a)(i); St V s 139(a)(i); T’dad s 141(a)(i).
182 Ant s 139(a)(ii); Bah s 77(a)(ii); B’dos s 137(a)(ii); Dom s 139(a)(ii); Gren s 139(a)(ii); Guy s 143(a)(ii); Mont s
139(a)(ii); St L s 139(a)(ii); St V s 139(a)(ii); T’dad s 141(a)(ii).
183 Ant s 139(b); Bah s 77(b); B’dos s 137(b); Dom s 139(b); Gren s 139(b); Guy s 143(b); Mont s 139(b); St L s
139(b); St V s 139(b); T’dad s 141(b).
184 Cousins v International Brick Co [1931] 2 Ch 90 Eng CA.
140(1); T’dad s 142(1).
140(1); T’dad s 142(1).
140(2); T’dad s 142(2).
188 (1988) 40 BLR 90 BC SC.
189 Ant s 137(1)(d); B’dos s 135(1)(d); Dom s 137(1)(d); Gren s 137(1)(d); Guy s 141(1)(d); Mont s 137(1)(d); St L s
137(1)(d); St V s 137(1)(d); T’dad s 139(1).
190 Ant s 137(1)(d)(i); B’dos s 135(1)(d)(i); Dom s 137(1)(d)(i); Gren s 137(1)(d)(i); Guy s 141(1)(d)(i); Mont 137(1)
(d)(i); St L s 137(1)(d)(i); St V s 137(1)(d)(i); T’dad s 139(1)(a).
191 Ant s 137(1)(d)(ii); B’dos s 135(1)(d)(ii); Dom s 137(1)(d)(ii); Gren s 137(1)(d)(ii); Guy s 141(1)(d)(ii); Mont s
137(1)(d)(ii); St L s 137(1)(d)(ii); St V s 137(1)(d)(ii); T’dad s 139(1)(b).
192 Ant s 137(1)(d)(iii); B’dos s 135(1)(d)(iii); Dom s 137(1)(d)(iii); Gren s 137(1)(d)(iii); Guy s 141(1)(d)(iii); Mont s
139(1)(d)(iii); St L s 137(1)(d)(iii); St V s 137(1)(d)(iii); T’dad s 139(1)(c).
193 Ant s 137(1)(d)(iv); B’dos s 135(1)(d)(iv); Dom s 137(1)(d)(iv); Gren s 137(1)(d)(iv); Guy s 141(1)(d)(iv); Mont s
139(1)(d)(iv); St L s 137(1)(d)(iv); St V s 137(1)(d)(iv); T’dad s 139(1)(d).
194 (Unreported) (Suit No 436 of 1989) B’dos HC. See also Charlebois et al v Bienvenue et al (1968) 68 DLR (2d)
578 Ont CA.
195 Ant s 137(1)(e); B’dos s 135(1)(e); Dom s 137(1)(e); Gren s 137(1)(e); Guy s 141(1)(e); Mont s 137(1)(e); St L s
137(1)(e); St V s 137(1)(e); T’dad s 139(1).
137(2)(a); St V s 137(2)(a); T’dad s 139(2)(a).
197 Ang no corresponding provision; Ant s 137(2)(b); B’dos s 135(2)(b); Dom s 137(2)(b); Gren s 137(2)(b); Guy s
141(2)(b); Mont s 137(2)(b); St L s 137(2)(b); St V s 137(2)(b); T’dad s 139(2)(b).
137(2)(c); St V s 137(2)(c); T’dad s 139(2)(c).
137(2)(d); St V s 137(2)(d); T’dad s 139(2)(d).
141(1); T’dad s 143(1).
141(1); T’dad s 143(1): ‘fewer than twenty five shareholders’.
202 (Unreported) (Suit No 436 of 1989) B’dos HC.
137(1)(d)(iv); St L s 137(1)(d)(iv); St V s 137(1)(d)(iv); T’dad s 139(1)(d).
204 (Unreported) Suit No 436 of 1989 B’dos HC.
142(a); T’dad s 144(a).
142(a); T’dad s 144(a).
142(b); T’dad s 144(b).
209 (Unreported) (Suit No 436 of 1989 B’dos HC).
213 (Unreported) Suit No 436 of 1989 B’dos HC.
145(1); T’dad s 147(1).
145(1)(a); St V s 145(1)(a); T’dad s 147(1)(a).
145(1)(b); St V s 145(1)(b); T’dad s 147(1)(b).
145(2)(a); St V s 145(2)(a); T’dad s 147(2)(a).
145(2)(b); St V s 145(2)(b); T’dad s 147(2)(b).
145(2)(c); St V s 145(2)(c); T’dad s 147(2)(c).
148(1)(a); St V s 148(1)(a); T’dad s 150(1)(a).
148(1)(b); St V s 148(1)(b); T’dad s 150(1)(b).
148(1); T’dad s 150(1).
148(2); T’dad s 150(2).
148(2)(a); St V s 148(2)(a); T’dad s 150(2)(a).
148(2)(b); St V s 148(2)(b); T’dad s 150(2)(b).
148(2)(c); St V s 148(2)(c); T’dad s 150(2)(c).
148(2); T’dad s 150(2).
148(3); T’dad s 150(3).
229 Ant s 146(1); B’dos s 144(1); Dom s 146(1); Gren s 146(1); Guy s 150(1); Mont 146(1); St L s 146(1); St V s
146(1); T’dad s 148(1).
137(1)(c); St V s 137(1)(c); T’dad s 139(1).
231 Ant ss 146–147; B’dos ss 144–145; Dom ss 146–147; Gren ss 146–147; Guy ss 150–151; Mont ss 146–147; St L ss
146–147; St V ss 146–147; T’dad ss 148–149.
146(1)(a); St V s 146(1)(a); T’dad s 148(1)(a).
146(3); T’dad s 148(3).
146(1)(b); St V s 146(1)(b); T’dad s 148(1)(b).
146(1)(b); St V s 146(1)(b); T’dad s 148(1)(b).
146(2); T’dad s 148(2).
146(4); T’dad s 148(4).
146(5); T’dad s 148(5).
146(6); T’dad s 148(6).
241 Ang s 120(1); Ant s 130(1); B’dos s 128(1); Dom s 130(1); Gren s 130(1); Guy s 134(1); Mont s 130(1);; St C/N s
95(1); St L s 130(1); St V s 130(1); T’dad s 132(1).
130(1)(a); St C/N s 95(1); St L s 130(1)(a); St V s 130(1)(a); T’dad s 132(1)(a).
130(1)(b); St C/N s 95(1); St L s 130(1)(b); St V s 130(1)(b); T’dad s 132(1)(b).
130(2); St V s 130(2); T’dad s 132(2).
245 Ang s 123; Ant s 134; B’dos s 132; Dom s 134; Gren s 134; Mont s 134; St L s 134; St V s 134; T’dad s 136(1).
246 [1960] SCR 672 SCC. See also Greenwell v Porter [1902] 1 Ch 530.
247 See Pickering ‘Shareholders’ Voting Rights and Company Control’ (1965) 81 LQR 248, 248.
248 Ang s 124; Ant s 135; Bah s 73; Dom s 135; Gren s 135; Mont s 135; St L s 135; St V s 135; T’dad s 137.
249 Ang s 124; Ant s 135; Bah s 73; Dom s 135; Gren s 135; Mont s 135; St L s 135; St V s 135; T’dad s 137.
250 Ang no similar definition; Ant s 543(1); Bah no similar definition; Dom s 543(1); Gren s 543; Mont s 543(1);
St L s 543(1); St V s 543(1); T’dad s 4.
251 Ang s 124(1); Ant s 135(1); Bah s 73(1); Dom s 135(1); Gren s 135(1); Mont s 135(1); St L s 135(1); St V s 135(1);
T’dad s 137(1).
252 Ang s 124(3); Ant s 135(3); Bah s 73(1); B’dos s 133(3); Dom s 135(3); Gren s 135(3); Mont s 135(3); St L s
135(3); St V s 135(3); T’dad s 137(3).
253 Duha Printers (Western) Ltd v The Queen [1998] 159 DLR (4th) 457 SCC; Power v Vitrak Systems Inc (2006)
258 Nfld & PEIR 38 PEITD.
254 See Duha Printers (Western) Ltd v The Queen [1998] 159 DLR (4th) 457, 482 SCC per Iacobucci J, citing
Welling, Corporate Law in Canada: The Governing Principles (Toronto: 1991) 481–488.
255 Ang s 124(2); Ant s 135(2); Bah s 73(2); B’dos s 133(2); Dom s 135(2); Gren s 135(2); Mont 135(2); St L s 135(2);
St V s 135(2); T’dad s 137(2).
256 [1998] 159 DLR (4th) 457 SCC.
257 [1998] 159 DLR (4th) 457, 483 SCC.
258 [1998] 159 DLR (4th) 457 SCC.
135(1); St V s 135(1); T’dad s 137(1).
135(2); St V s 135(2); T’dad s 137(2).
135(2); St V s 135(2); T’dad s 137(2).
262 For the corresponding provisions, see Ang s 124(2); Ant s 135(2); Bah s 73(2); Dom s 135(2); Gren s 135(2);
263 See, e.g., Disney, ‘The Unanimous Shareholder Agreement—A promise Unfulfilled’ in Sarna (ed), Corporate
Structure, Finance and Operations—Essays on the Law and Business Practice Vol 8 (Toronto: 1995) 83–135
cited with approval in Ming Minerals Inc v Blagdon and Dimmell [1998] 163 Nfld & PEIR 351; Welling,
Corporate Law in Canada: The Governing Principles (Toronto: 1991) 481–488 cited with approval in Duha
Printers (Western) Ltd v The Queen [1998] 159 DLR (4th) 457, 482 SCC per Iacobucci J.
264 [1949] 4 DLR 812 Alta SC.
265 Disney ‘The Unanimous Shareholder Agreement—A Promise Unfulfilled’ in Sarna (ed), Corporate Structure,
Finance and Operations—Essays on the Law and Business Practice Vol 8 (Toronto: 1995) 83–135; Ming
Minerals Inc v Blagdon and Dimmell [1998] 163 Nfld & PEIR 351, 361.
266 [1949] 4 DLR 812 Alta SC.
267 See Welling, Corporate Law in Canada: The Governing Principles (Toronto: 1991) 481–488 cited with
approval in Duha Printers (Western) Ltd v The Queen [1998] 159 DLR (4th) 457, 482 SCC per Iacobucci J.
268 [1949] 4 DLR 812 Alta SC.
269 Welling, Corporate Law in Canada: The Governing Principles (Toronto: 1991) 481–488.
270 [1969] 2 Ch 365 Eng Ch D.
271 [1906] 2 Ch 34 Eng CA.
272 [1935] 2 KB 113, 134 Eng CA.
273 Duha Printers (Western) Ltd v The Queen [1998] 159 DLR (4th) 457, 482 SCC per Iacobucci J.
T’dad s 137(2).
275 Above, text accompanying nn 256–258.
276 Duha Printers (Western) Ltd v The Queen [1998] 159 DLR (4th) 457, 482 SCC.
T’dad s 137(4).
278 Ang s 124(4); Ant s 135(4); Bah s 73(4); Dom s 135(4); Gren s 135(4); Mont 135(4); St L s 135(4); St V s 135(4);
T’dad s 137(4).
Chapter 16
Shareholders and the Complainant
Remedies
Introduction
The Companies Acts in Commonwealth Caribbean territories, excluding
Belize, provide for two major civil remedies, namely, the derivative action
remedy1 and the oppression remedy.2 Except in Anguilla and St
Christopher/Nevis, under the Acts these remedies may only be invoked by
‘complainants’. The remedies are in effect complainants’ remedies and may be
claimed by shareholders or other persons having an interest in a company
only if they themselves fall within the definition of complainant. In Anguilla3
and St Christopher/Nevis,4 the remedies are only available to shareholders.
‘Complainants’ constitutes a novel legal category in Commonwealth
Caribbean company law, and appears to be intended to protect the interests of
not only shareholders, but also creditors, management and the public in
general. Complainants’ remedies can be seen, therefore, as an attempt to
create a balance that ensures both adequate investor protection and
management flexibility in the overall context of the public interest. These
remedies seek to afford aggrieved persons a reasonable opportunity to initiate
civil action to resolve personal complaints in respect of infringement of
personal rights, representative complaints in respect of infringement of class
rights and derivative complaints in respect of wrongs done to the company.
This chapter explores this new remedial regime established by the Acts.
The Concept of Complainant
The concept of the ‘complainant’ is at the heart of the ‘Civil Remedies’ (in
Jamaica, ‘Complainant Remedies’) provisions in the Companies Acts in
Antigua, the Bahamas, Barbados, Dominica, Grenada, Guyana, Jamaica,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago. The centrality of the
‘complainant’ concept becomes evident from a consideration of the statutory
scheme in these Acts. The scheme in the Barbados Act is typical.
Section 225(b) of the Barbados Act, which is found in the ‘Civil Remedies’
provisions, defines ‘complainant’ as follows:5
‘complainant’ means—
(i) a shareholder or debenture holder, or a former holder of a share or debenture of a company or

any of its affiliates;
(ii) a director or an officer or former director or officer of a company or any of its affiliates;
(iii) the Registrar; or
(iv) any other person who, in the discretion of the court, is a proper person to make an application
under this part.
Following section 225(b),6 is the subhead, ‘Derivative Actions’, which contains

section 226(1).7 Section 226(1)8 provides for a ‘complainant’ to apply to the
court for leave to bring a derivative action. Following the subhead on
derivative actions is another subhead, ‘Restraining Oppression’, which contains
section 228(1).9 Section 228(1)10 provides for a ‘complainant’ to apply for an
order to remedy oppression. Thus, for an aggrieved person to avail himself of
either the derivative action remedy or the action to restrain oppression
remedy provided for in the ‘Civil Remedies’ provisions, he must first establish
that he is a ‘complainant’.
It has been pointed out in the case law that, given the intimate nexus
between the status of ‘complainant’ and the derivative action and the
oppression remedies, the interpretation of ‘complainant’ must be harmonised
with the intent and purpose of the derivative action and oppression
remedies.11 This being so, it is important to remember that the legislative
intention in enacting the derivative action and oppression remedies is to
ensure the settlement of intra-corporate disputes on equitable principles; not
by adherence to strict legal rights.12 Thus, the question whether an aggrieved
person falls within any of the categories of persons expressly designated in the
Acts as ‘complainants’ in any particular case must be determined with due
regard to the equitable principles contemplated by the provisions of the Acts.
Shareholders and debenture-holders
As has just been seen, the Companies Acts in Antigua, the Bahamas, Barbados,
Trinidad and Tobago specifically provide that a shareholder or a debenture-
holder, or a former holder of a share or debenture of a company or any of its
affiliates have standing as a ‘complainant’.13 A shareholder is defined in the
Acts to include a member of a company; the personal representative of a
deceased shareholder; the trustee in bankruptcy of a bankrupt shareholder;
and a person in whose favour a transfer of shares has been executed but
whose name has not been entered on the register, or, if two or more transfer
of those shares have been executed, the person in whose favour the most
recent transfer has been made.14 A debenture-holder is a person who holds a
debenture which is defined to include debenture stock and any bond or other
instrument evidencing an obligation or guarantee, whether secured or not.15
Despite the express inclusion of ‘shareholder’ in the definition of
complainant, it does not necessarily follow that a person who, for instance, is a
shareholder in that he owns or formerly owned shares in the company
automatically has standing as a ‘complainant’. The court retains a discretion to
deny such status in any case where the interest of equity and justice so
requires. Thus, in one case, a person who bought shares with a view to
bringing an oppression action and in full awareness of the circumstances
alleged to constitute oppression was denied standing as a ‘complainant’.16 In a
similar exercise of its discretion, the court denied standing to former
shareholders because there was no current oppression at the time of their
application.17
The same overriding concern to do justice and equity may persuade a court
to grant standing to a person to whom shares have been promised but not
issued and who is therefore not, strictly speaking, a shareholder. Thus, in the
Barbados Court of Appeal case of Canwest International et al v Atlantic TV
Ltd et al,18 it was held that the plaintiffs who were promised an interest in the
equity of a defendant company under an unexecuted pre-incorporation
minority shareholders’ agreement and who had done several acts in reliance
on this promise were not ‘complainants’ as shareholders. However, they were
allowed standing as ‘complainants’ under the ‘any other person who is a
proper person to make an application’ provision. Williams CJ justified the
courts’ approach by explaining that this provision was not so much a
definition as a grant to the court of a broad power to do justice and equity in
the circumstances of a particular case.19
A careful reading of the judgment of Williams CJ in Canwest International
et al v Atlantic TV Ltd et al,20 however, reveals that the exercise of the wide
powers of the court to do ‘justice and equity’, in the in the case of a person to
whom there is a pre-incorporation agreement to issue shares, is not at large.
Williams CJ reasoned:21
In my opinion the very wide powers of the court hearing an application under section 228 provide a clue
as to how the issue is to be resolved. Section 228(3) enacts that, in connection with an application under the
section, the court may make any interim or final order it thinks fit and specifies a variety of orders that the
court may make, including an order requiring the trial of any issue or an order directing rectification of
the registers and records of the company under section 231.
An application under section 231 can be made by an aggrieved person who alleges that his name has
been wrongly omitted from the registers or other records of a company and section 231(3) enacts that in
connection with an application under that section the court may make any order it thinks fit …
It seems clear from a reading of section 231 that a party to a pre-incorporation agreement can apply
under that section as an aggrieved person to have the terms of the agreement for the issue of shares to him
enforced against the other parties to the agreement. If an order under section 231 can be made on an
application under section 228, why should the category of persons whom the court can in its discretion
permit to be a complainant for the purpose of section 228, necessarily exclude a party to a pre-
incorporation agreement who is alleging oppressive conduct by the other parties to the agreement and
who would therefore fall within the category of aggrieved persons?
Put simply, what Williams CJ is saying is that the alleged oppression in

Canwest, the failure to issue shares as agreed, impacted on the interests of
members of a specified category in the oppression provisions, namely,
shareholders, and that there was a nexus between the applicant and the harm
done.22 Read in light of the other provisions of the Act, the court would
exercise its discretion under the ‘any other person who is a proper person to
make an application’ provision to hold that such a person qualifies as a
complainant.
The approach taken by the Barbadian Court of Appeal in Canwest
International et al v Atlantic TV Ltd et al23 is evident in the Ontario case of
Berdugo v Lalique Glassworks Inc.24 In that case, a person who paid cash on
account of the purchase of shares was held to be a ‘complainant’, even though
no share certificates were ever issued nor any written shareholder agreement
entered into. Similarly, it was held in another case from Ontario, Larmond v
Synergy Hospitality Inc,25 that an individual who, while not a shareholder, was
given an oral promise of 25 per cent equity interest in the company, and who
acted on that promise, had standing as a ‘complainant’.
The extent to which the court will have regard to the interest of equity and
justice in deciding whether a shareholder will be deemed a ‘complainant’ is
also seen in cases where shareholders hold a majority of the shares or where
control of the company is equally divided. Here, even though the derivative
action and the oppression remedies are undoubtedly intended to protect the
rights of minority shareholders,26 the preponderance of case authority suggests
that a majority shareholder or a shareholder with equal control may in some
circumstances be held to be a complainant under the ‘any other person who is
a proper person to make an application’ provision.27
Directors and officers

Directors, officers and former directors and former officers are all included in
the definition of ‘complainant’ in the Companies Acts in Antigua, the
Bahamas, Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago.28 As a general rule, if a person
qualifies as a de jure director or officer, he qualifies as a ‘complainant’.29 So in
the Trinidad and Tobago High Court case of Lalla v Trinidad Cement Ltd and
TCL Holdings Ltd,30 the plaintiff, who was dismissed from his position as a
director and managing director of the first and second defendants, instead of
suing for wrongful dismissal, sought relief under the oppression provisions of
the Trinidad and Tobago Companies Act. It was held that, being a director and
officer of the defendant companies, he was a complainant, and therefore had
standing to invoke these provisions.
It appears from the Ontario case of Berdugo v Lalique Glassworks Inc31 that
where corporate records do not show a person to be a de jure director or an
officer, if he has in fact occupied such position, in other words if he is a de
facto director or officer, the court in the exercise of its equitable discretion
may hold that he qualifies as a ‘complainant’. The same approach is evident in
the New Brunswick case of Schelew v Schelew.32 In this case the court
exercised its equitable jurisdiction and held that an applicant who had always
been the company’s directing mind, the person responsible for management of
the business and affairs of the company, and the person who received most of
the company’s income, though not a director, was a complainant under the
proper person provision. Finally, the Barbadian case of Canwest International
et al v Atlantic TV Ltd et al,33 is also authority that the court will exercise its
equitable discretion to hold a person a ‘complainant’ where there has been a
promise under an unexecuted minority shareholders’ agreement to appoint
him as a director and he has acted on that promise.
The courts will only exercise their equitable discretion and hold an applicant
who is a de facto director a ‘proper person’ where that applicant has some
particular legitimate interest in the manner in which the company’s affairs are
managed.34 In the case of the oppression remedy, a legitimate interest is
shown in this context only where the alleged oppressive conduct impacts on
members of the specified category and there is a nexus between the applicant
and the oppression.35
The Registrar
The Registrar appointed under the Companies Acts is specifically included in

the definition of complainant in the Companies Acts in Anguilla, Antigua,
Tobago.36 Neither the Acts nor the Regulations specify the circumstances in
which the Registrar may apply to the court for a remedy pursuant to the
oppression provisions. However, it is submitted that Registrar may make such
an application in any case where it is in the public interest that such an
application be made. That being said, it appears from the Barbados Court of
Appeal decision in Amersey et al v Attorney General et al37 that there are
occasions when the Attorney-General may qualify as a complainant to
represent the public interest.
The facts of Amersey are that the Government of Barbados entered into a
joint venture agreement with Amersey, one of the promoters of two
companies, Caribbean Sea Island Cotton Company (Cariscot) and Scothalls
Ltd (Scothalls), for the development of a sea-island cotton industry centred in
Barbados and involving neighbouring islands in which cotton was grown.
Under the agreement, the Government of Barbados and Scothalls were to own
shares in Cariscot.
Cariscot was incorporated and some directors were appointed. These
directors held their first meeting, and the company began to trade. However,
differences arose that prevented the company’s affairs from being regularised:
there was need to appoint a new director, shares had to be issued, and a
shareholders meeting had to be convened to confirm bye-laws and pass
accounts.
In the foregoing circumstances, the Court of Appeal of Barbados held that
the Attorney-General representing the Government of Barbados qualified as a
complainant, in the discretion of the court, under the ‘any other person who is
a proper person to make an application’ provision. This decision may be
justified on the basis that the alleged oppression, the failure to appoint a new
director, to issue shares and to convene a meeting, impacted on the interests of
members of the specified category in the oppression provisions, namely,
shareholders, debenture-holders and directors, and there was a nexus between
the Attorney-General and the harm done.38
‘Proper person’
The final category of person statutorily invested with the status of

complainant in the Companies Acts in Antigua, the Bahamas, Barbados,
Tobago, but notably not in the Act in Jamaica, is ‘any other person who, in the
discretion of the court, is a proper person to make an application’ for the
derivative action remedy or the oppression remedy.39 As has been seen, this
provision is not so much a definition as a grant to the court of a broad power
to do justice and equity in the circumstances of a particular case where a
person who otherwise would not be a ‘complainant’ ought to be permitted to
bring a derivative action or an oppression action.40
In deciding whether a person is a ‘proper person’, a court must have due
regard to whether the action which is being brought is a derivative action or
an oppression action, as different criteria as to the availability of each of these
remedies apply. In an oppression action, for instance, a person will not be held
to be a ‘proper person’ unless he satisfies the court that there is some evidence
of oppression, or unfair prejudice or unfair disregard for the interests of a
‘shareholder or debenture-holder, creditor, director or officer of the
company’.41 The reason for this is admirably articulated by Jamadar J, as he
then was, in the Trinidad and Tobago High Court decision of Lopez v
Telecommunications Services of Trinidad and Tobago.42
In that case, the learned judge reasoned that section 242(2) of the Trinidad
and Tobago Companies Act43 confers jurisdiction on the court to grant
substantive relief to rectify particular oppressive conduct impacting on
specified persons. In other words, section 242(2)44 creates substantive remedial
rights. In order to determine who may claim these rights, resort must be had
to section 239 of that Act,45 the complainant provision, which prescribes who
may have locus standi, or, in other words, the procedural right to invoke the
courts jurisdiction to grant substantive relief for oppression. Read together,
these provisions clearly suggests that Parliament intended to protect the rights
of persons within the specified category in section 242(2)46 or their interests as
such.
Jamadar J opined further:
the structure of the legislation itself suggests very clearly that Parliament intended, by creating a separate
subsection 242(1),47 to confer on persons within that subsection the rights prescribed therein—that is,
complainant rights. And, by also creating a separate subsection 242(2),48 to describe the boundaries of an
oppression action under the section. The layout and structure of the sections are clear and unambiguous.
No uncertainty arises in attempting to construe them. These sections are clearly interrelated, yet coexist
with clearly defined boundaries (of definition, purpose and policy).
As different criteria for determining whether a person qualifies as a ‘proper

person’ apply in a derivative action from those in an oppression action, a
person may be held, on the same facts, to be a ‘proper person’ in respect of a
derivative action but not in respect of an oppression action, and vice versa.
Thus in First Edmonton Place Ltd v 315888 Alberta Ltd49 where a creditor
brought an application for leave to bring an action in the name of the
respondent company pursuant to the oppression provisions or, alternatively,
the derivative action provisions of the Alberta Act, McDonald J allowed the
claimant to bring the derivative action but denied leave to bring the
oppression action.
In that case, McDonald J concluded that ‘proper person’ may include a
creditor. However, he opined that, in order to qualify as a ‘proper person’ in an
action for oppression, the creditor would have to point to evidence of
oppression of at least one of the persons specified in the oppression remedy
provision and that in the circumstances of the case, justice and equity require
the claim to be tried. McDonald J thought that there was no such evidence,
and so refused leave to bring the oppression action, but granted leave to bring
the derivative action because such evidence was not relevant to the derivative
action. The Court of Appeal reversed McDonald J’s decision to grant leave to
bring the derivative action on the facts of that case but did not express any
doubt on the principles enunciated by him.
Given the test laid down by McDonald J, it is easy to understand why
creditors generally are considered to fall within the category of ‘proper
person’.50 There is a flood of authority that creditors to whom a liquidated
debt is owed may fall within the category of ‘proper person’.51 There is also
some authority which suggests that a creditor to whom unliquidated claims
are owed may also qualify as a ‘proper person’.52
It is important to note that, in oppression remedy actions, a ‘proper person’
may also include a person outside of the category specified in the oppression
remedy provisions, namely, shareholder or debenture-holder, creditor, director
or officer of the company.53 In Lopez v Telecommunications Services of
Trinidad and Tobago,54 Jamadar J, after a thorough review of the Canadian
cases and the Trinidad and Tobago case of Five Star Medical Ltd v
Telecommunication Services of Trinidad and Tobago,55 laid down the two
basic principles to be applied in deciding whether a person outside the
specified categories qualifies as a ‘proper person’. The first is that a distinction
must be drawn between persons entitled to be complainants and persons
against whose interest oppression is alleged. In this regard, it is to be noted
that there is no policy or statutory necessity for synonymity between the two.
The second is that a proper person can be a complainant even if his personal
interests have not been affected provided that the alleged oppression impacts
on the interests of members of the specified category in the oppression
provisions and there is a nexus between the complainant and the harm done.
It is submitted that, based on these principles, the Trinidad and Tobago High
Court case of Five Star Medical Ltd v Telecommunication Services of Trinidad
and Tobago56 appears to have been wrongly decided.57 The facts of this case
are that, from October 1998, Five Star, the plaintiff, was in receipt of telephone
services provided by TSTT, the defendant, under terms and conditions of a
standard agreement which TSTT entered into with all its subscribers.
By letter of August 20, 1998, Five Star applied for forty-eight trunk lines, for
the purpose of introducing an automated telemarketing system. At the request
of Five Star, TSTT installed twenty-four of these trunk lines at Five Star’s
business premises. By letter dated 1 February 1999, the corporate sales
administration manager of TSTT wrote to Five Star indicating that Five Star’s
telephone service was being terminated with immediate effect because Five
Star was illegally switching overseas telephone traffic into TSTT domestic
network.
Negotiations between Five Star and TSTT in respect of the reconnection of
the disconnected lines started in February 1999 and continued through April
2000, when negotiations broke down. Five Star then filed an application with
the court claiming relief for oppression under section 244 of the Trinidad and
Tobago Companies Act, on the basis that the termination of its telephone
services by TSTT had substantially diminished the business of Five Star and
that it was unable to earn income. In these circumstances a question arose as
to whether Five Star was a ‘complainant’ within the meaning of the Act.
Ventour J held that Five Star qualified as a complainant, in the discretion of
the court, under the ‘any other person who is a proper person to make an
application’ provision. Ventour J reasoned that a person qualifies as a ‘proper
person’ where ‘equity and justice require that the Applicant should be given
an opportunity to have his claim tried.’ All that the applicant has to do is to
‘show some evidence of oppression or unfair disregard for the interests of the
applicant’.
Surely, Ventour J’s reasoning conflicts with that of Jamadar J in Lopez v
Telecommunications Services of Trinidad and Tobago58 as the alleged
oppression did not impact on the interests of any members of the specified
category in the oppression provisions and consequently there could not have
been any nexus between the applicant and harm done. In any event, Ventour
J’s reasoning has the effect of allowing what are Companies Act remedies for
breaches of company law duties to be available for alleged breaches by the
company of what are essentially contractual duties! It is doubtful that this was
the intention of Parliament in enacting the ‘proper person’ provision.
Derivative Action
A derivative action is an action brought by a shareholder or other complainant

in respect of a wrong done to the company where the wrongdoers are in
control of the company and refuse to bring an action in the name of the
company.59 Such actions are provided for in provisions in the Companies Acts
in Anguilla, Antigua, the Bahamas, Dominica, Grenada, Guyana, Jamaica,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago similar to sections
22660 and 22761 of the Barbados Companies Act. Section 226 provides as
follows:62
(1) Subject to subsection (2), a complainant may, for the purpose of prosecuting, defending or discontinuing
an action on behalf of a company, apply to the Court for leave to bring an action in the name and on
behalf of the company or any of its subsidiaries, or intervene in an action to which any such company or
any of its subsidiaries is a party.
(2) No action may be brought, and no intervention in an action may be made, under subsection (1)
unless the Court is satisfied
(a) that the complainant has given reasonable notice to the directors of the company or its
subsidiary of his intention to apply to the Court under subsection (1) if the directors of the
company or its subsidiary do not bring, diligently prosecute or defend, or discontinue, the action;
(b) that the complainant is acting in good faith; and
(c) that it appears to be in the interests of the company or its subsidiary that the action be brought,
prosecuted, defended or discontinued.
Section 227, in turn, provides:63

In connection with an action brought or intervened in under section 226,64 the Court may make such order
as it thinks fit, including
(a) an order authorising the complainant, the Registrar or any other person to control the conduct of
the action;
(b) an order giving directions for the conduct of the action;
(c) an order directing that any amount adjudged payable by a defendant in the action be paid, in
whole or in part, directly to former and present shareholders or debenture holders of the
company or its subsidiary, instead of to the company or its subsidiary; or
(d) an order requiring the company or its subsidiary to pay reasonable legal fees incurred by the
complainant in connection with the action.
Background to statutory provisions
Overview
The enactment of the statutory provisions on derivative actions in

Commonwealth Caribbean Companies Acts was intended to reform the
existing law governing derivative actions.65 Accordingly, the common law
derivative action and the interrelated rule in Foss v Harbottle66 provides
important legal context for the proper understanding of the statutory
derivative action in the Commonwealth Caribbean.
Derivative action at common law
The derivative action exists at common law as a shareholders’ remedial tool.67

However, two enormous theoretical problems confront a shareholder who
wishes to bring a derivative action at common law in respect of a wrong done
to the company. The first of these arises because the Salomon v Salomon rule68
has the logical consequence that wrongs done to the company are not wrongs
done to the shareholders, but are wrongs done to the company itself as a
separate legal person. Since the basic principle at common law is that only a
person who has suffered a wrong may maintain an action in respect of that
wrong, this means that, in strict legal theory, only a company itself can bring
an action to redress a wrong done to it or enforce a duty owed to it.
The second theoretical obstacle stems from the overriding principle that,
generally speaking, the will of the company is the will of the majority of its
shareholders. Thus, a majority vote of shareholders may cause to be done
whatever the company has power to do, and this against the will of the
minority.69 This principle of supremacy of the majority is, however, ultimately
susceptible to directorial influence in practice, since the directors in large
public companies control the proxy voting machinery, and in small companies,
are usually identified with the majority shareholders. What is more, directorial
influence over the supremacy of the majority rule is further enhanced because
common law courts have traditionally adopted the stance that they will not
second guess the business judgment of directors or interfere in the internal
management of the company. This stance is captured in the dictum of Lord
Eldon LC in the old case of Carlen v Drury,70 where he said that ‘the court
could not undertake the management of every brewhouse and playhouse in
the kingdom’.71
The rule in Foss v Harbottle
The logical consequence of the application of the two foregoing common law
principles of proper plaintiff and supremacy of the majority finds legal
expression in the rule in Foss v Harbottle.72 This is evident from the two
propositions that constitute the rule: first, that the proper plaintiff is prima
facie the company and, second, that where the wrong done to the company
may be made binding on the company by a simple majority of its members,
no individual member may maintain an action in respect of that matter. The
classic statement of this rule is to be found in judgment of Jenkins LJ in
Edwards v Halliwell, where he said:73
First, the proper plaintiff in an action in respect of a wrong alleged to be done to a company or association
of persons is prima facie the company or association of persons itself. Secondly, where the alleged wrong
is a transaction which might be made binding on the company or association and on all its members by a
simple majority of the members, no individual member of the company is allowed to maintain an action
in respect of that matter for the simple reason that, if a mere majority of the members of the company or
association is in favour of what has been done, then cadit quaesito.
Jenkins LJ also stated:74

The rule in Foss v Harbottle (1843) 2 Hare 461 … as I understand it, comes to no more than this. First the
proper plaintiff in respect of a wrong alleged to be done to a company or association of persons is prima
facie the company or the association of persons itself. Secondly, where the alleged wrong is a transaction
which might be made binding on the company or association and on all its members by a simple majority
of the members, no individual member of the company is allowed to maintain an action in respect of that
matter.
The case of Foss v Harbottle75 itself illustrates the principle that where there is
a wrong done to the company, the company is the proper plaintiff and that a
minority shareholder cannot bring an action on behalf of the company. In Foss
v Harbottle,76 two shareholders brought an action on behalf of a company of
which they were shareholders alleging that land had been sold to the company
by the directors at an exorbitant price. Since the conduct complained of was a
wrong done to the company, the Vice-Chancellor ruled that the plaintiffs could
not sue in the name of the company; only the company could sue.
The English case of Mozley v Alston77 illustrates the operation of the second
aspect of the rule in Foss v Harbottle,78 namely, that where the wrong done to
the company may be made binding on the company by a simple majority of
its members, no individual member may bring an action in the name of the
company. In this case, two shareholders tried unsuccessfully to restrain four
directors of the company from acing as such when they should have retired in
rotation under the articles of association. The court refused to allow them to
bring the action since the alleged wrong was one which might be made
binding on the company and all its members by a simple majority.
The problem with the rule in Foss v Harbottle79 is that where the wrong
done to the company is committed by a third party, the directors in the
exercise of their management powers may bring an action on behalf of the
company. Where, however, the wrong against the company is committed by
those in control of the company a problem may arise if those wrongdoers seek
to invoke the majority supremacy principle to prevent the company from
bringing an action against them. Not surprisingly, to circumvent this problem,
an exception to the Foss v Harbottle rule developed whereby, in limited
circumstances, a shareholder may be allowed to bring a derivative action to
obtain a remedy for the company. This was explained as follows by Lord
Davey in English House of Lords case of Burland v Earle:80
The cases in which the minority can maintain such an action are … confined to those in which the acts
complained of are of a fraudulent character or beyond the powers of the company. A familiar example is
where the majority are endeavouring directly or indirectly to appropriate to themselves money, property,
or advantages which belong to the company, or in which the other shareholders are entitled to participate,
as was alleged in the case of Menier v Hooper’s Telegraph Works.81 It should be added that no mere
informality or irregularity which can be remedied by the majority will entitle the minority to sue, if the
act when done regularly would be within the powers of the company and the intention of the majority of
the shareholders is clear.
Subsequent cases have emphasised that, for a claimant in a common law

derivative action to circumvent the Foss v Harbottle rule, he must establish
that the wrong constituted a fraud on the minority, in the sense of an
unratifiable wrong which is incapable of ‘cure’ by the majority;82 and that
wrongdoer control of the company prevented the company from bringing an
action in its own name.83 In any event, a common law derivative action is not
available where the majority of the shareholders who are independent of the
wrongdoers, for disinterested reasons, do not wish the proceedings to
continue.84
Recommendation for statutory intervention
So, the courts have allowed a common law derivative action to protect the
minority in exceptional cases where there is a ‘fraud on the minority’.
However, the circumstances in which the courts will intervene on the basis of
fraud on the minority elude precise definition, and in general the
circumstances must amount to arbitrariness or oppression. This difficulty and
the limitation of the rule in Foss v Harbottle on common law derivative actions
has meant that many injustices have gone unremedied. It is this state of the
law which led the authors of the Caricom Harmonisation Report to
recommend that ‘there is a clear need to seek more equitable balance between
the interests of those who “democratically” have the power, the majority, to
make their will effective and those who find that decisions or fundamental
changes are made in respect of the company’s activities which are grossly
unfair or unreasonable to them.’85
Statutory derivative action
Nature of the action
The statutory derivative action is the mechanism established by provisions in

the Companies Acts in Anguilla, Antigua, the Bahamas, Dominica, Grenada,
similar to section 226 of the Barbados Act,86 by which a suit may be brought
by a complainant for the purpose of prosecuting, defending or discontinuing
an action on behalf of a company. The statutory language is very broad and is
said to embrace not only all causes of action under any statute, but also all
causes of action in law or in equity that a shareholder may sue for on behalf of
the company.87 The breadth of the statutory language also means that the
common law derivative action is subsumed within the statutory derivative
action and no longer exists as such.88
It is clear from the language of the provisions of the Acts that the derivative
action is available only for the remedying of wrongs done to the company. It
is not available for the enforcement of rights of individual shareholders or
class of shareholders and is therefore to be distinguished from personal and
representative actions.89 The action is ‘derivative’ because it ‘derives’ from the
shareholder being a member of the company which is wronged and not
because of any wrong done to the shareholder per se.
The operation of these principles is illustrated by the Anguillan High Court
case of Bell v Counsel Ltd.90 The facts of this case are that the directors, who
were also shareholders in the defendant company, issued to themselves
additional shares which had the effect of altering the voting control by diluting
the voting proportion of the claimant from 50 per cent to 20 per cent in the
defendant company. In these circumstances, the claimant brought an action
under section 261 of the Anguillan Companies Act91 seeking leave to bring a
derivative action in the name of the company. It was held that this was not a
proper case for the bringing of a derivative action as the substance of the
complainant’s complaint was not that of a wrong was done to the company
but of an infringement of the shareholder’s individual right as a shareholder
for which the proper procedure was a suit in his own individual capacity as a
shareholder.
The derivative action is a class action brought in representative form in
respect of a wrong that is done to the company.92 The representative form of
the action makes it binding on all shareholders.93
The statutory derivative action serves a dual purpose. First, it ensures that a
shareholder has a right to recover property or enforce rights for the company
if the directors refuse to do so. Second, it helps guarantee accountability and
ensures that some shareholder control is exerted over the board of directors.94
Commencement of the derivative action
The statutory derivative action is commenced by the complainant applying to

the court for leave to bring an action in the name and on behalf of a company
or any of its subsidiaries, or intervene in an action to which any such company
or any of its subsidiaries is a party.95 The application for leave must be by way
of motion or notice of application and not by statement of claim.96 This is
because the application for leave is not intended to be an exhaustive analysis
of the merits of the claim.97
Before leave to bring an action or to intervene in an action is granted, the
court must be satisfied of three mandatory,98 statutory pre-conditions.99 First,
the court must be satisfied that the complainant has given reasonable notice to
the directors of the company or its subsidiary of his intention to institute a
derivative action if the directors of the company or its subsidiary do not bring,
diligently prosecute or defend, or discontinue an action.100 The requirement for
‘notice’ in this context is not to be construed in a technical or restrictive
manner.101 Thus, for example, the requirement for ‘notice’ has been held to
have been satisfied by a request to bring the action together with details of the
nature of the claim;102 and by a letter to the board of directors.103
Second, the court must be satisfied that the complainant is acting in good
faith.104 Good faith in this context is not statutorily defined, and each case must
therefore be decided on its own facts. An example of what the courts will treat
as satisfying the good faith requirement is to be found in the Ontario High
Court case of Solmon v Elkind.105 It was held in this case that the good faith
requirement was satisfied even where the complainant made the application
instead of another family member so that there was no opportunity to cross-
examine the other family member who was much more knowledgeable as to
the facts than the applicant. Another example is the case of Title Estate v
Harris106 where it was held that a complainant acted in good faith
notwithstanding that she would personally benefit from any recovery the
company may receive as a result of the derivative action. On the other hand,
the case of Vedova v Garden House Ltd107 provides an example of what will
not satisfy the good faith requirement. It was held in this case that, because the
applicant was motivated less by the potential return to the company than by
the tactical advantage to be gained against the defendant shareholders, he was
not acting in good faith. Another such example is the case of Abraham v
Prosoccer Ltd.108 In this case, a complainant who sought to substitute himself as
plaintiff and continue an action brought by another shareholder which had
been settled and who had previously taken no interest in the proceedings was
held not to satisfy the good faith requirement.
Finally, the court must be satisfied that it appears to be in the interests of
the company or its subsidiary that the action be brought, prosecuted, defended
or discontinued.109 The word ‘appears’ in the provision is indicative of a not
particularly heavy onus.110 Accordingly, this requirement is satisfied as long as
the action is prima facie in the interest of the company.111
Powers of the court in derivative actions
Power to grant leave
The express language of the statutory provisions appears to authorise the

courts to grant leave in any case in which the company or any of its
subsidiaries may sue. Some examples of where the courts have granted leave
are against a director for obtaining a secret profit or the commission of a fraud
on the minority,112 for alleged breaches of duty owed to the company,113 and
for an alleged undervaluation of shares issued in a private placement.114
Power to make orders
In connection with a derivative action brought under the Acts, ‘the court may
at any time make any order it thinks fit’ including the four orders specifically
identified in the Acts.115 These are (a) an order authorising the complainant,
the Registrar or any other person to control the conduct of the action,116 (b) an
order giving directions for the conduct of the action,117 (c) an order directing
that any amount adjudged payable in the action be paid, in whole or in part,
directly to former and present shareholders or debenture-holders of the
company or its subsidiary, instead of the company or its subsidiary,118 or (d) an
order requiring the company to pay reasonable legal fees incurred by the
complainant in connection with the action.119
The Oppression Remedy
Basic oppression remedy provisions
The typical oppression remedy provision in the Acts in Anguilla, Antigua, the
Lucia, St Vincent and Trinidad and Tobago reads as follows:120
(1) A complainant may apply to the court for an order under this section.
(2) If, upon an application under section (1), the court is satisfied that in
respect of a company or any of its affiliates
(a) any act or omission of the company or any of its affiliates

effects a result,
(b) the business or affairs of the company or any of its affiliates
are or have been carried on or conducted in a manner, or
(c) the powers of the directors of the company or any of its
affiliates are or have been exercised in a manner,
that is oppressive or unfairly prejudicial to, or that unfairly disregards the

interests of, any shareholder or debenture holder, creditor, director or
officer of the company, the court may make an order to rectify the
matters complained of.
These provisions are not a codification of the common law;121 rather, they are
intended to confer upon individual shareholders and other complainants a
remedy which removes the impediments of the rule in Foss v Harbottle and
ensures that they are insulated from conduct that is oppressive or unfairly
prejudicial or that unfairly disregards their interests. In Westfair Foods Ltd v
Watt,122 Kerrans JA opined that the oppression remedy provisions are nothing
more than a compendious way for Parliament saying to the courts that the
classes protected by the Act are to be fairly and justly treated. In fact, a review
of the operation of the oppression remedy supports this conclusion that the
remedy is to be viewed as an equitable remedy, ‘a broad and flexible tool,
designed to protect the interests of corporate stakeholders in a variety of
corporate circumstances’.123
Background to the oppression remedy provisions
The oppression remedy provisions in the Companies Acts in Anguilla,

Montserrat, St Christopher/Nevis St Lucia, St Vincent and Trinidad and
Tobago trace their origins to section 210 of the UK Companies Act 1948. That
section was the basis of section 234 of the Canada Business Corporations Act
1974, now section 241 of the Canada Business Corporations Act 1985.
However, section 234 of the Canada Business Corporations Act 1974 was
modified in accordance with the recommendations of the 1962 Report of the
Company Law Committee in the UK, commonly referred to as the Jenkins
Report, to remove the self-imposed judicial qualifications that limited the
application of section 210.124
The equivalent of section 234 of the Canada Business Corporation Act has
been incorporated into the Companies Acts in Anguilla, Antigua, the
Lucia, St Vincent and Trinidad and Tobago and so is the basis of the oppression
remedy provisions in these Acts.125 The St Christopher/Nevis Act provides for
an ‘unfair prejudice’ remedy.126 The provisions in that Act differ in details from
the provisions in the other regional Acts, but those provisions have the same
broad objective as the provisions in the other regional Acts. Accordingly, the
jurisprudence behind the St Christopher/Nevis provisions is encompassed in
the discussion of the provisions in the other regional Acts.
Analysis of the oppression remedy provisions
To whom is the remedy available?
On the express language of the provisions, the oppression remedy is available

to a complainant. The concept of ‘complainant’ has already been extensively
dealt with in this chapter.127
When is the remedy available?
The kernel of the oppression remedy provisions is that the conduct

complained of must be actionable conduct, in the sense that is ‘oppressive or
unfairly prejudicial, or that unfairly disregards the interests of a shareholder or
debenture-holder, creditor, director or officer of the company’. Therefore, the
two central foci in determining entitlement to the remedy are the ‘interests’ of
the protected category and the conduct that is ‘oppressive’, ‘unfairly
prejudicial’ or ‘unfairly disregards’ in light of these ‘interests’.128
Protected ‘interests’
There can be little doubt that the ‘interests’ sought to be protected in the
oppression provisions must be interpreted in light of the purpose of the
oppression remedy itself. The purpose of this remedy is to give relief for
thwarted expectations of persons in the protected category. Thus,
determination of the ‘interests’ of the protected category is essentially a
determination of the reasonable expectations of the persons in the protected
category.129
It is clear that the reasonable expectations of the protected category include
the expectations expressly embedded in their strict legal rights,130 as well as
the underlying expectations springing from these rights.131 It appears from the
case law132 that the provisions also protect a wider range of expectations
including, what is sometimes called in the English cases, the ‘legitimate
expectations’133 or, more recently, the ‘equitable considerations’134 of these
persons.
Legitimate expectation or equitable consideration has arisen more often
than not in relation to shareholders’ interests. In this regard, it has been
described as an expectation or consideration arising out of a fundamental
understanding between the shareholders, which formed the basis of their
association, but which was not written into the constituent document.135 In
such a case, the totality of shareholders’ rights may not be captured in the
company’s constituent documents.
The case which is most associated with introducing the legitimate
expectation or equitable consideration principle into Commonwealth
Caribbean company law is the English House of Lords’ case of Ebrahimi v
Westbourne Galleries Ltd.136 In this case, Lord Wilberforce opined that section
222(f) of the English Companies Act 1948 which enabled a winding-up order if
a court thought it just and equitable so to do allowed the court to recognise
that behind a limited liability company, or among it, are individuals with
rights, expectations and obligations inter se which are not necessarily
submerged in the company structure. He pointed out that in most cases what
are the interests of shareholders will be adequately and exhaustively defined
in the constituent documents of the company and the Companies Acts, but in
some cases equitable considerations might intrude. He observed further that
such cases typically may include one, or probably more, of the following
elements:137
(i) an association formed or continued on the basis of a personal relationship, involving mutual confidence
—this element will often be found where a pre-existing partnership has been converted into a limited
company; (ii) an agreement, or understanding, that all, or some (for there may be ‘sleeping’ members), of
the shareholders shall participate in the conduct of the business; (iii) restriction upon the transfer of the
members in the company—so that if confidence is lost, or a member is removed from management, he
cannot take out his stake and go elsewhere.
These elements are typically present in small closely held companies whose
shareholders tend to be associated by more than purely commercial interests,
to be actively involved in many instances in the day-to-day management of
the company and to be personally committed to the company. However, as
Lord Wilberforce explained, it would be impossible, and wholly undesirable,
to exhaustively define the circumstances in which equitable considerations
may be allowed to intrude in determining the interests of a shareholder. He
said:138
Certainly the fact that the company is a small one, or a private company, is not enough. There are many of
these where the association is a purely commercial one, of which it can safely be said that the basis of the
association is adequately and exhaustively laid down in the articles. The superimposition of equitable
considerations requires something more.
In the English Court of Appeal case of Re Saul D Harrison & Sons plc,139
Hoffmann LJ accepted the legitimate expectation principle but stressed that in
the absence of ‘something more’, there is no basis for the superimposition of
equitable considerations in determining the interests of a shareholder. This
approach was confirmed by the English House of Lords in the case of O’Neil v
Phillips,140 where their Lordships suggested a shift from the public law
language of ‘legitimate expectations’ to the more traditional private law
terminology of constraining the exercise of legal rights by reference to
‘equitable considerations’.
The equitable considerations principle was applied in the Grenadian Court
of Appeal decision of Grenada General Insurance Co Ltd, Jonas Browne &
Hubbard (Grenada) Ltd et al v Grenada Insurance Services Ltd.141 The facts of
this case are that GGIC Ltd was formed in 1990 pursuant to discussions
between GIS Ltd and JBH Ltd and a memorandum of intent was made and
signed by two representatives of each company. The relevant part of the
memorandum stated as follows:
It is proposed that Grenada Insurance Services (G.I.S) and the insurance department of Jonas Browne and
Hubbard (J.B.H) merge their respective portfolios to form a new national insurance company. The new
company will rapidly accelerate the localisation of the insurance industry in Grenada.
The objective is to create a partnership in which each party, G.I.S and G.B.H., contributes equally to the
decision-making process. However, it is understood that, in order for the results of the new company to be
incorporated into the consolidated accounts of J.B.H., it is preferred that J.B.H. owns 51 percent of the
shares.
The Grenada Court of Appeal held the provisions of the memorandum created
in G.I.S. ‘a legitimate expectation to contribute equally with the Appellant
[J.B.H.] in the decision-making process as it related to the affairs of the first
Appellant [GGIC Ltd].’ When, therefore, J.H.B. used its majority shareholding
to force through a change in the composition of the board, and following this
up, used its resultant majority position on the Board to remove the chairman,
who was G.I.S.’s nominee, and to replace him by its own nominee, the Court
of Appeal was of the view that this conduct was unfairly prejudicial to and
unfairly disregarded the interests of G.I.S.
Actionable conduct
The provisions in the Acts in Anguilla, Antigua, the Bahamas, Barbados,

Trinidad and Tobago expressly stipulate that the oppression remedy is
available where there is conduct that is oppressive or unfairly prejudicial to, or
that unfairly disregards the interests of shareholders or debenture-holders,
creditors, directors or officers of the company.142 There are therefore three
categories of conduct that can give rise to the oppression remedy. These are
‘oppressive’ conduct, ‘unfairly prejudicial’ conduct and conduct which ‘unfairly
disregards’ the interests of shareholders or debenture-holders, creditors,
directors or officers of the company. Each of these categories introduces a
separate category of conduct, which may overlap in any case, but each of
which, if proven, can constitute oppression as encoded in the provisions of
these Acts.143
Ex facie, the statutory juxtaposition of the words ‘oppressive’, ‘unfairly
prejudicial’ and ‘unfairly disregards’ appears to introduce, in descending order,
the stringency of the proof required to invoke the oppression remedy. Put
differently, the wording of the provisions seems to suggest that oppressive
conduct requires stricter proof than unfairly prejudicial conduct which, in turn,
requires stricter proof than unfair disregard.
On the balance of the authorities, this appears to be the interpretation to be
given to these words. Thus, in Such v RW-LB Holdings Ltd144 it was held that
the burden of proof required for unfair prejudice or unfair disregard is less
rigorous than the burden of proof required for oppression because what is at
issue is the unfair result of the conduct, not the state of the mind of the
wrongdoer. Similarly, in Re Mason and Intercity Properties Ltd,145 Blair JA
opined that ‘oppressive’ conduct involves a more rigorous standard than that
of ‘unfairly prejudicial’ or conduct which ‘unfairly disregards’. Again, in
Dancey v 229281 Alta Ltd146 it was held that the words ‘unfairly prejudicial’
had an effect different from and going beyond that ascribed to ‘oppressive’,
and in Re Abrahams and Inter Wide Investments Ltd,147 Griffiths J expressed a
similar view. In light of the foregoing, it is necessary to explore separately the
meaning of each of the standards contained in the three categories mentioned
in the provisions.
Oppressive conduct
Oppressive conduct is a concept borrowed from the English Companies Act

1948, section 210 and involves the most stringent requirements of the three
categories of conduct specified in regional Acts.148 Lord Simonds in Scottish
Cooperative Wholesale Society Ltd v Meyer149 interpreted the concept as used
in section 210 of the UK 1948 Act as connoting ‘burdensome, harsh and
wrongful’ conduct to some part of the members of the company. In turn, this
was held to necessitate a course of conduct, not mere isolated acts, continuing
up to time of the petition involving an invasion of legal rights, displaying lack
of probity on the part of those conducting the company’s affairs, and affecting
the petitioner in his capacity of a member.
Lord Simonds interpretation of oppressive conduct as burdensome, harsh
and wrongful conduct involving an invasion of a legal right was fairly recently
adopted in the Manitoba Court Appeal case of Cohen v Jonco Holdings Ltd.150
This case which was cited with approval in the St Lucian High Court case of
Devaux v Duboulay Holdings Ltd151 and, it is submitted, is to be viewed as a
correct interpretation of that expression as used in Commonwealth Caribbean
Companies Acts. On the other hand, Lord Simonds requirement that
oppressive conduct necessitates a course of conduct, not mere isolated acts is,
on the express language of the oppressive remedy provisions in regional Acts,
inapposite. It is plain from these provisions that isolated acts can constitute
oppressive conduct and that it is not necessary to prove a continuing course to
establish oppressive conduct under regional Acts.
Unfairly prejudicial conduct
The sole type of conduct that was covered by section 210 of the UK
Companies Act 1948 oppression remedy was conduct that was ‘oppressive’.
The Jenkins Committee thought that this was too narrow a basis for protection
and so recommended that the basis should be expanded to include conduct
that was ‘unfairly prejudicial’ to the interests of members. This
recommendation has been incorporated in the oppression remedy provisions
in Commonwealth Caribbean Companies Acts which include ‘unfairly
prejudicial’ conduct as a basis for invoking the oppression remedy. In fact, as
has been seen, unfairly prejudicial conduct is the sole basis of the oppression
remedy under the St Christopher/Nevis Act.152
Unfair prejudice is a less stringent concept than oppression. Thus, in the
Canadian case of Miller v F Mendel Holdings Ltd,153 it was held that conduct
complained of which may not be burdensome, harsh and wrongful and
therefore oppressive may nevertheless be unfairly prejudicial.
On the other hand, in approaching unfair prejudice, the courts have held
that the conduct complained of must be prejudicial in the sense of causing
prejudice or harm to the relevant interests of the shareholder (or, presumably,
other complainant) and that as such both unfairness and prejudice must be
proved.154 It also appears from case law that it is not necessary to show that
the conduct complained of is improper or illegal155 and that an exercise of a
legal right may have an unfairly prejudicial consequence.156 The approach of
the courts is to look at any alleged prejudicial conduct from an objective point
of view, to take into account any relevant circumstances and to give the
expression its natural meaning without any technical gloss.157
In deciding whether conduct is unfairly prejudicial, the court may take a
number of factors into consideration. For instance, although there is no
requirement that the complainant should come with clean hands,158 the
conduct of the complainant may be a factor taken into account.159 The court
may also look at such things as whether any offer was made to buy out the
complainant, the motive of the wrongdoer, any delay in bringing the
complaint, and any other relevant factors.160
It is clear from the cases that there are no set categories of what constitutes
unfairly prejudicial conduct. Be that as it may, the cases in which conduct is
held to be unfairly prejudicial tend to fall into certain well-defined categories.
One such category is where a shareholder is excluded from management or
removed from the board.161 Under the old section 210 oppression remedy,
where the complaint was essentially that of exclusion from management
and/or removal from the board, the remedy was not available as the
complainant was not oppressed qua member. However, there have been a
number of cases decided on provisions similar to the oppression remedy
provisions in Commonwealth Caribbean Companies Acts in which the courts
have held that a shareholder in a small company has an interest in continued
participation in the management of the company and that exclusion or
removal from that position in circumstances where there is a legitimate
expectation of continued participation can amount to unfairly prejudicial
conduct.162
Another category is where controlling shareholders make adverse changes
to an existing shareholder’s rights. Thus, in the Quebec Supreme Court case of
Burdon v Zeller’s Ltd163 a proposed amalgamation was held to be unfairly
prejudicial against minority shareholders on the following facts. Following an
unsuccessful bid for not less than 90 per cent of the target company’s shares
not already held by the offeror company, the offeror proposed an
amalgamation between its wholly own subsidiary and the target company.
The result of this amalgamation would be that the minority shareholders of
the target company would receive either a cash settlement or non-voting
convertible preferred shares of the majority shareholder. The court held that
the offeror would not be allowed to do indirectly what it was unsuccessful in
doing directly. To the same effect is the case of Alexander v Westeel-Rosco
Ltd.164 Here, the Ontario High Court held a proposed amalgamation to be
oppressive, discriminatory and unfairly prejudicial where the majority
shareholder proposed an amalgamation the result of which would be the
involuntary elimination of the shares of the minority shareholders who
collectively held 23.5 per cent of the shares of one of the amalgamating
companies.
Yet another category is where there is the diversion of business to another
company in which the majority shareholder has a greater interest. Thus, in
Redekop v Robco Construction Ltd,165 although paid by the company, the
director and majority shareholder formed a new company with a major
customer and became actively involved with in the affairs of the new
company to serve his own interests. He also improperly used his position as
the controlling force in the company to enter into a fixed price construction
contract on terms favourable to the new company. In fact, the contract
required the company to undertake the major risk of cost overruns. It was
held that this conduct constituted unfairly prejudicial conduct.
A fourth category is where there is failure to hold annual general meetings
and to have financial statements prepared in accordance with the Acts thus
depriving shareholders of their right to information on the state of the
company’s affairs.166 Likewise, failure to call a special general meeting of
shareholders to fill a vacancy on the board of directors resulting from the
bankruptcy of the second director has been held to amount to unfairly
prejudicial conduct.167
A final example is where there has been a serious departure from normal
and business-like practices. In Re Abraham and Inter Wide Investments Ltd,168
the Ontario High Court held that conduct was unfairly prejudicial where
payments which were characterised as directors’ fees had not been legally
authorised, did not have the character of directors’ fees, were not associated
with the duties and responsibilities of directors and had been paid to
companies related to the directors and where financial statements were
inadequate, inaccurate and not prepared ion accordance with accepted
accounting principles. Similarly, in the English case of Re Macro (Ipswich)
Ltd,169 conduct was held to be unfairly prejudicial where there was evidence of
specific acts of mismanagement repeated over many years resulting in
financial loss to the company. However, the decision in another English case,
Re Elgindata Ltd,170 shows that the court will normally be reluctant to hold
that managerial decisions constitute unfairly prejudicial conduct. Accordingly,
it was held in that case that a broad complaint that the shareholder was
disappointed as to the poor quality of the management was insufficient to
support a complaint of unfairly prejudicial conduct.
Unfair disregard
Even less stringent conduct that may constitute oppression than unfairly
prejudicial conduct is conduct that ‘unfairly disregards’ the interests of
shareholders, and others with interests, in the company. In Stech v Davies,171
‘unfairly disregards’ was interpreted to mean ‘unjustly or without cause pay
no attention to, ignore or treat as of no importance the interests of the security
holders, creditors, directors or officers’.
Court orders
When can orders be made?
If the court is satisfied that a case of oppression is established, it may make

any interim or final order it thinks fit.172 The Barbadian High Court decision in
Cox v Roberts173 makes it necessary to stress that such orders may only be
made where the court has found oppression.
In this case, the plaintiff, a shareholder and managing director of a
company, WOW Group Ltd, brought an action claiming relief under the
provisions of the Barbados Companies Act for oppressive and unfairly
prejudicial conduct by the majority shareholders of WOW. The plaintiff’s case
was that the oppressive or unfairly prejudicial conduct was manifested in the
majority’s decision to remove him as a director of WOW, their continuing
disregard of his interests as a shareholder, their exclusion of him from
participation in the management of WOW and by their refusal to make him a
reasonable offer for his shares in WOW.
Blackman J opined that, to invoke the oppression remedy, the standard of
proof was proof on a balance of probabilities, that each case turns on its own
facts and that the onus of proof is on the plaintiff. As the plaintiff in this case
had not provided details of the oppressive conduct alleged, Blackman J held
that the action would be dismissed, and stated:
Viewing the situation as a whole, I am not persuaded that the conduct of the defendants has been
oppressive, unfairly prejudicial or carried on in a manner that unfairly disregards the plaintiff’s interests as
a shareholder. In light of the conclusions that I have reached, the relief sought by the plaintiff does not fall
to be considered. Accordingly, the application is dismissed.
Having reached this conclusion, Blackman J rather curiously went on to rule:

Section 228(3) of the Act provides that in connection with an application under this section, the Court may
make any interim or final order it thinks fit. I am of the view that in the circumstances of the prevailing
relationship between Cox and the first and third defendants, so long as the shares in the WOW Group are
distributed between them, disputes will persist. As a consequence, I am of the view that it is in the best
interests of the company that the above relationship should come to an end.
Accordingly, there will be an order pursuant to s. 228(3) directing the first, and fourth defendants to sell
their shares to any of the first, third or fourth defendants.
It is respectfully submitted that this ruling of the learned judge was not
consistent with a proper interpretation of the power of the court to make
orders under section 228(3). Section 228(3) is inextricably tied to subsections
(1) and (2) of section 228. Subsection (1) states that ‘a complainant may apply
to the court for an order under this section’. Subsection (2) continues: ‘if upon
an application under subsection (1) the court is satisfied [that there is
oppression]’, and subsection (3) allows that ‘in connection with an application
under this section, the court may make any interim or final order it thinks fit’.
Clearly, the making of an order under subsection (3) is conditional upon the
prior satisfaction of subsections (1) and (2). For this reason, it is only where
there is a finding of oppression that a court may make an order under section
228(3). Put simply, the court only has power to make an order to remedy
oppression.174
Orders which a court may make
The power which is granted to the courts to make orders to remedy

oppression is wide.175 It is not limited by the specific list of remedies set out in
the oppression remedy provisions; this list is illustrative and not exhaustive.176
It is to be noted, however, that the court’s wide discretion to create an
equitable remedy tailored to fit the circumstances is limited only by the
qualification that the discretion is to be exercised only to rectify oppression
and that the oppression remedy may protect the complainant’s interests only
as a shareholder or debenture-holder, creditor, director or officer of the
company.177
The orders expressly mentioned in the Acts include orders: (i) restraining
the conduct complained of,178 (ii) appointing a receiver or receiver-manager,179
(iii) amending the articles or bye-laws or creating or amending a unanimous
shareholder agreement,180 (iv) directing an issue or exchange of shares or
debentures,181 (v) appointing directors in place of, or in addition to, all or any
of the directors then in office,182 (vi) directing a company or any other person
to purchase shares or debentures of a holder thereof,183 (vii) directing a
company or other person to pay a shareholder or debenture-holder any part of
the moneys paid by him for his shares or debentures,184 (viii) varying or
setting aside a transaction or contract to which a company is a party, and
compensating the company or any other party to the transaction or contract,185
(ix) requiring a company, within the specified by the court, to produce to the
court or an interested party financial statements in the form required under
the Acts or an accounting in such other form as the court may determine,186
(x) compensating an aggrieved person,187 (xi) directing rectification of the
registers or other records of the company,188 (xii) liquidating and dissolving the
company,189 (xiii) directing an investigation under the Acts to be made,190 and
(xiv) requiring the trial of any issue.191
Order directing amendment of articles or bye-laws

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, if an order is made
directing amendments of the articles or bye-laws, the directors have to send
forthwith articles of reorganisation in the prescribed form to the Registrar
together with a notice of directors and notice of address as prescribed under
the Acts, if applicable.192 Such an order prevents any further amendments
being made to the articles or bye-laws without the consent of the court or
until the court otherwise orders.193 Such an order does not give rise to the
dissenting shareholder’s appraisal remedy provided for under the Acts.194
Order directing payment to a shareholder
A court must have regard to the solvency of a company in ordering a payment

to a shareholder under the Acts in Antigua, the Bahamas, Barbados, Dominica,
Tobago.195 Such a payment order may not be made if there are reasonable
grounds for believing that the company is unable or would be unable, after the
payment, to pay its liabilities as they become due.196 However, in appropriate
cases, an order to pay a shareholder may be made against another person such
as the controlling shareholder who has conducted the oppressive or unfairly
prejudicial conduct.197 By the same token, such an order may not be made if
there are reasonable grounds for believing that the realisable value of the
company’s assets would thereby be less than the aggregate of its liabilities.198
Shareholder ratification and derivative and oppression actions
Provisions in the Acts in Antigua, the Bahamas, Barbados, Dominica, Grenada,

similar to section 229(1) of the Barbados Act199 set out rules relating to
shareholder ratification of an alleged breach that gives rise to an application
for either the derivative remedy or the oppression remedy. Section 229(1)
reads:
An application made or an action brought or intervened in [respect of a derivative or oppression remedy]
may not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty
owed to the company or its subsidiary has been or might be approved by the shareholders of the company
or its subsidiary; but evidence of approval by the shareholders may be taken into account by the court in
making an order [in respect of a derivative or oppression remedy].
Prior to this enactment, the rule in Foss v Harbottle, absolutely barred an

action by a minority shareholder to remedy any breach which has or might be
ratified by the majority shareholders in general meeting. In the Canadian case
of Pappas v Acan Windows Inc,200 it was held that a provision in pari materia
with section 229(1)201 abolishes this rule. Be that as it may, that subsection
leaves shareholder ratification as an evidentiary matter which the court can
consider in determining whether judicial intervention, either through approval
of a derivative action or through the granting of an order in respect of
oppression, is appropriate.
Settlement of derivative and oppression actions
To discourage strike suits to extort financial settlements from corporate

management, provisions in the Acts in Anguilla, Antigua, the Bahamas,
Trinidad and Tobago similar to section 229(2) of the Barbados Act202 provide
for court supervision of the settlement of derivative and oppression actions
before trial. That subsection provides that such actions may not be stayed,
discontinued, settled or dismissed for want of prosecution without the
approval of the court given upon such terms as the court thinks fit. Further,
under the subsection, if the court determines that the interests of any
complainant could be substantially affected by the stay, discontinuance,
settlement or dismissal, the court may order any party to the application or
action to give notice to the complainant.
Interim costs in derivative and oppression actions
To ensure that a complainant may institute a derivative or oppression action,

provisions in the Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica,
similar to section 230 of the Barbados Act203 empower the court to compel a
company to provide interim financing to the complainant in a derivative or
oppression application. That section provides that, in a derivative or
oppression application made or a derivative or oppression action brought or
intervened in, the court may at anytime order the company or its subsidiary to
pay to the complainant interim costs, including legal fees and disbursements.
However, the complainant may be held accountable for those interim costs
upon the final disposition of the application or action.
The criteria which are appropriate in determining whether the court may
order a company or its subsidiary to pay interim costs in an oppression
application appear to be now settled. In Wilson v Conley,204 it was held that an
order is appropriate where the applicant is in financial difficulty, the financial
difficulty arises out of the alleged oppressive conduct, and the applicant has
made out a prima facie case of oppression.
This statement of the law was doubted by Blair J in the case of Alles v
Maurice.205 Blair J accepted the first criterion stated in Wilson v Conley,206
namely, that the applicant must be genuinely in financial circumstances which,
but for an interim costs order, would preclude the claim from being brought.
However, he disagreed with the second and third criteria laid down in that
case. In his view, there is nothing in the language of the relevant provision or
in the purpose of the Act that would require an applicant to show a strong
prima facie case. Similarly, there is nothing in the language of the relevant
provision or the Act or in its purpose that the applicant demonstrates a cause
and effect relationship between the oppressive conduct and the need for
funding. He concluded that the power given to order interim costs is directed
at the inability to fund an otherwise meritorious lawsuit and the advantage
that that gives to the oppressive majority.
In Organ v Barnett,207 MacDonald J, agreeing with Blair J, held that, to
obtain interim costs, an applicant must first establish that there is a case of
sufficient merit to warrant pursuit and then establish that the applicant is
genuinely in financial need which, but for an interim costs order would
preclude the claim from being pursued. Subsequent cases have accepted this
statement of the law as the settled law.208
Conclusion
The provisions in the Companies Acts in the Commonwealth Caribbean on
complainants’ remedies follow the trend in modern company legislation to
provide increasing protection to minority shareholders against abuse of
majority rule, and the granting of new rights and new remedies to the
minority and other stakeholders. These provisions have significantly modified
and liberalised the principle of majority rule, procedurally captured in the rule
in Foss v Harbottle,209 and have removed much of the hardships and injustices
occasioned by this rule. This is achieved by granting the court wide power to
modify the company’s conduct so as to allow it to continue as a viable
enterprise while still protecting the interests of the minorities and other
stakeholders.
Notes
1 Ang ss 261–264; Ant ss 239–240; Bah s 279; B’dos ss 226–227; Dom ss 239–240; Gren ss 239–240; Guy ss 222–
223; J’ca ss 212–213; Mont ss 239–240; St C/N: no provision; St L ss 239–240; St V ss 239–240; T’dad ss 240–
241.
2 Ang s 266; Ant s 241; Bah s 280; B’dos s 228; Dom s 241; Gren s 241; Guy s 224; J’ca s 213A; Mont s 241; St
C/N s 141: provides for an ‘unfair prejudice’ remedy; St L s 241; St V s 241; T’dad s 242.
3 See Ang ss 259–261.
4 See St C/N s 141.
5 See Ant s 238(b); Bah s 278; Dom s 238(b); Gren s 238(b); Guy s 221(b); J’ca s 212(3) is differently worded.
That provision reads: ‘“complainant” means—(a) a shareholder or former shareholder of a company or an
affiliated company; (b) a debenture holder or former debenture holder of a company or an affiliated
company; (c) a director or officer or former director or officer of a company or an affiliated company’;
Mont s 238(b); St L s 238(b); St V s 238(b); T’dad s 239(b).
6 See Ant s 238(b); Bah s 278; Dom s 238(b); Gren s 238(b); Guy s 221(b); J’ca s 212(3); Mont s 238(b); St L s
238(b); St V s 238(b); T’dad s 239(b).
7 See Ant s 239(1); Bah s 279(1); Dom s 239(1); Gren s 239(1); Guy s 222(1); J’ca s 212(1); Mont s 239(1); St L s
239(1); St V s 239(1); T’dad s 240(1).
8 See Ant s 239(1); Bah s 279(1); Dom s 239(1); Gren s 239(1); Guy s 222(1); J’ca s 212(1); Mont s 239(1); St L s
239(1); St V s 239(1); T’dad s 240(1).
9 See Ant s 241(1); Bah s 280(1); Dom s 241(1); Gren s 241(1); Guy s 224(1); J’ca s 213A (1); Mont s 241(1); St L s
241(1); St V s 241(1); T’dad s 242(1).
10 See Ant s 241(1); Bah s 280(1); Dom s 241(1); Gren s 241(1); Guy s 224(1); J’ca s 213A (1); Mont s 241(1); St L s
241(1); St V s 241(1); T’dad s 242(1).
11 West v Edson Packing Machinery Ltd (1993) 16 OR (3d) 24 Ont Gen Div; Lopez v Telecommunication
Services of Trinidad and Tobago (Unreported) HCA No Cv 1997 of 2003 (TT2004 HC 84).
12 Wright v Donald S Montgomery Holdings Ltd (1998) 39 BLR (2d) 266 Ont Gen Div.
13 Ant s 238(b)(i); Bah s 278(a); B’dos s 225(b)(i); Dom s 238(b)(i); Gren s 238(b)(i); Guy s 221(b)(i); J’ca s 212(3)
(a) and (b); Mont 238(b)(i); St L s 238(b)(i); St V s 238(b)(i); T’dad s 239(b)(i).
14 Ang s 1; Ant s 543(1); Bah s 2 reads: ‘“shareholder” means a person who has acquired shares in a company
incorporated under this Act that is limited by shares’; B’dos s 448(h); Dom s 543(1); Gren s 543(1); Guy s
535(v); J’ca: not defined; Mont s 543(1); St C/N: not defined; St L s 543(1); St V s 543(1); T’dad s 4.
15 Ang s 1; Ant s 543(1); Bah s 2; B’dos s 448(h); Dom s 543(1); Gren s 543(1); Guy s 535(h); J’ca s 2(1); Mont s
543(1); St C/N: not defined; St L s 543(1); St V s 543(1); T’dad s 4.
16 Royal Trust Corpn of Canada v Hordo (1993) 10 BLR (2d) 86 Ont Gen Div.
17 Michalak v Biotech Electronics Ltd (1986) 35 BLR 1 Que SC.
18 (1998) 48 WIR 40 B’dos CA.
19 (1998) 48 WIR 40, 46 B’dos CA.
20 (1998) 48 WIR 40 B’dos CA.
21 (1998) 48 WIR 40, 45 B’dos CA.
22 As to this principle, see the discussion in text accompanying nn 39–58 below.
23 (1998) 48 WIR 40 B’dos CA.
24 (1992) 37 ACWS (3d) 336 Ont Gen Div. See also Bayliss v Harris (1993) 43 ACWS (3d) 754 Ont Gen Div
[Commercial List].
25 (2004) 1 BLR (4th) 244 Ont SCJ.
26 See Vedova v Garden House Inn Ltd (1985) 29 BLR 236 Ont HC; Credit Foncier Franco-Canadien v CSW
Enterprises Ltd (1986) 54 Sask R 97 Sask QB.
27 Re Gandalman Investments Inc and Fogle (1985) 52 OR (2d) 614 Ont HC; Cairney v Golden Key Holdings
Ltd (No 1) (1987) 40 BLR 263 BC SC; Chrysler Canada Ltd v Shury (April 12, 1988) Doc Vancouver C850504
BC SC, affd (June 5, 1989) Doc CA009426 BC CA.
28 Ant s 238(b)(ii); Bah s 285(b); B’dos s 225(b)(ii); Dom s 238(b)(ii); Gren s 238(b)(ii); Guy s 221(b)(ii); J’ca s
212(3)(c); Mont s 238(b)(ii); St L s 238(b)(ii); St V s 238(b)(ii); T’dad s 239(b)(ii).
29 See Murphy v Phillips (1993) 12 BLR (2d) 58, 91 Ont Gen Div [Commercial List].
30 (Unreported) HCA no Cv S-852/98 T’dad HC.
31 (1992) 37 ACWS (3d) 336 Ont Gen Div.

32 (2004) 49 BLR (3d) 68 NB QB.
33 (1998) 48 WIR 60 B’dos CA.
34 Schelew v Schelew (2004) 49 BLR (3d) 68 NB QB.
35 First Edmonton Place Ltd v 315888Alberta Ltd (1988) 40 BLR 28, 62 per McDonald J Alta QB, vard (1989) 45
BLR 110 Alta CA; Lopez v Telecommunication Services of Trinidad and Tobago (Unreported) HCA No Cv
1997 of 2003 (TT2004 HC 84).
36 Ant s 238(b)(iii); B’dos s 225(b)(iii); Dom s 238(b)(iii); Gren s 238(b)(iii); Guy s 221(b)(iii); Mont s 238(b)(iii);
St L s 238(b)(iii); St V s 238(b)(iii); T’dad s 239(b)(iii).
37 (1992) 27 Barb LR 96 B’dos CA.
38 See discussion below of First Edmonton Place Ltd v 315888 Alberta Ltd (1988) 40 BLR 28, 62 per McDonald J
Alta QB, vard (1989) 45 BLR 110 Alta CA; Lopez v Telecommunication Services of Trinidad and Tobago
(Unreported) HCA No Cv 1997 of 2003 (TT2004 HC 84).
39 Ant s 238(b)(iv); Bah s 278(c); B’dos s 225(b)(iv); Dom s 238(b)(iv); Gren s 238(b)(iv); Guy s 221(b)(iv); Mont s
238(b)(iv); St L s 238(b)(iv); St V s 238(b)(iv); T’dad s 239(b)(iv).
40 West v Edson Packing Machinery Ltd (1993) 16 OR (3d) 24 Ont Gen Div; Olympia & York Developments Ltd
(Trustee of) v York Realty Corpn (2003) 42 BLR (3d) 14 Ont CA.
41 First Edmonton Place Ltd v 315888 Alberta Ltd (1988) 40 BLR 28, 62 per McDonald J Alta QB, vard (1989) 45
BLR 110 Alta CA; Lopez v Telecommunication Services of Trinidad and Tobago (Unreported) HCA No Cv
1997 of 2003 (TT2004 HC 84).
42 (Unreported) HCA No Cv 1997 of 2003 (TT2004 HC 84).
43 See Ant s 241(2); Bah s 280(2); B’dos s 228(2); Dom s 241(2); Gren ss 241(2); Guy s 224(2); J’ca s 213A(2); Mont
s 241(2); St L s 241(2); St V s 241(2).
44 See Ant s 241(2); Bah s 280(2); B’dos s 228(2); Dom s 241(2); Gren ss 241(2); Guy s 224(2); J’ca s 213A (2);
Mont s 241(2); St L s 241(2); St V s 241(2).
45 See Ant s 238; Bah s 278; B’dos s 225; Dom s 238; Gren s 238; Guy s 221; J’ca s 212(3); Mont s 238; St L s 238;
St V s 238.
Mont s 241(2); St L s 241(2); St V s 241(2).
Mont s 241(1); St L s 241(1); St V s 241(1).
Mont s 241(2); St L s 241(2); St V s 241(2).
49 (1988) 40 BLR 28 Alta QB, revd [1990] 2 WWR 670 Alta CA.
50 See, e.g., Kosmopoulos v Constitution Ins. Co [1987] 1SCR 2 SCC; Cdn Opera Co v 670800 Ont Inc (1989) 69
OR (2d) 532; Standal’s Patents Ltd v 160088 [1991] RJQ 1996 Que SC; Peoples Department Stores Inc
(Trustee of) v Wise [2004] SCR 68 SCC.
51 Prime Computer of Canada Ltd v Jeffrey & Robinson & Jeffrey Ltd (1991) 6 OR (3d) 733 Gen Div; C-L &
Associates Inc v Equipment Sales Inc 35 BLR (3d) 124 Man QB.
52 GT Campbell & Associates Ltd v Hugh Carson Co (1979) 24 OR (2d) 758 Ont CA; AE Realisations (1985) Ltd
v Time Air Inc [1995] 17 BLR (2d) 203 Sask QB, affd [1995] 6 WWR 423 Sask CA; Levy-Russell Ltd v
Shieldings Inc (1998) 41 BLR (2d) 134 Ont Gen Div.
53 HSBC Capital Canada Inc v First Mortgage Alberta Fund (V) Inc [199]47 BLR (2d) 180 Alta QB; Five Star
Medical Ltd v Telecommunications Services of Trinidad and Tobago (Unreported) HCA No 1593 of 2001;
Lopez v Telecommunication Services of Trinidad and Tobago (Unreported) HCA No Civ 1997 of 2003.
54 (Unreported) HCA No Cv 1997 of 2003.
55 (Unreported) HCA No 1593 of 2001.
56 (Unreported) HCA No 1593 of 2001.
57 In Lopez v Telecommunication Services of Trinidad and Tobago (Unreported) HCA No Civ 1997 of 2003,
Jamadar J said of this case: ‘But for one case cited to this Court (Five Star Medical Ltd v TTST HCA No
1593 of 2001), all of the authorities implicitly or explicitly recognize that in order to obtain relief on an
oppression action brought under section 242(2) [or its equivalent in other jurisdictions], the alleged
oppressive conduct must affect the interests of one or more of the members of the specified category of
persons in section 242(2).’
58 (Unreported) HCA No Cv 1997 of 2003.
59 Rowe v Sunshine Developers Ltd (Unreported) Civil Suit No CLR 095 of 2002 J’ca HC; Nurcombe v Nurcombe
[1985] 1 WLR 370.
60 See Ang s 261; Ant s 239; Bah s 279; Dom s 239; Gren s 239; Guy s 222; J’ca s 212; Mont s 239; St L s 239; St
V s 239; T’dad s 240.
V s 240; T’dad s 241.
62 See Ang s 261: worded differently; Ant s 239; Bah s 279; Dom s 239; Gren s 239; Guy s 222; J’ca s 212; Mont s
239; St L s 239; St V s 239; T’dad s 240.
63 See Ang s 263: worded differently; Ant s 240; Bah s 279; Dom s 240; Gren s 240; Guy s 223; J’ca s 213; Mont s
240; St L s 240; St V s 240; T’dad s 241.
V s 239; T’dad s 240.
65 See First Edmonton Place Ltd v 315888 Alberta Ltd (1988) 40 BLR 28 Alta QB per McDonald J, revd [1990] 2
WWR 670 Alta CA; Maloney, ‘Whither the Statutory Derivative Action?’ (1986) Can Bar Rev 309.
67 Rowe v Sunshine Developers Ltd (Unreported) Civil Suit No CLR 095 of 2002 J’ca HC; Bahamasair
Employees Provident Fund v Galleria Cinemas Ltd (Unreported) Suit No CLE/GEN/402 of 2004 Bah HC.
69 Australian Auxilliary Clipper Co v Mounsey (1858) 4 K&J 733, 740; Re Horbury Bridge, Coal, Iron &
Waggon Co (1879) 11 Ch D 109 Eng CA.
70 (1812) 1 Ves & B 154.
71 (1812) 1 Ves & B 154, 158. See also Howard Smith Ltd v Ampol Petroleum Ltd [1974] 1 All ER 1126, 1131 HL
per Lord Wilberforce: ‘There is no appeal on merits from management decisions to courts of law; nor will
courts of law assume to act as a kind of supervisory board over decisions within the powers of
management honestly arrived at.’
73 (1950) 2 All ER 1064, 1066 Eng CA.
74 (1950) 2 All ER 1064 Eng CA.
76 Ibid.
77 (1847) 1 Ph 790.
79 Ibid.
80 [1902] AC 83, 93–94 Eng HL.
81 (1874) LR 9 Ch App 350 CA in Chancery.
82 Estmanco (Kilner House) Ltd v Greater London Council [1982] 1 All ER 437, 445 per Megarry V-C Vacation
Court.
83 Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204 Eng CA; Smith v Croft (No 2)
[1988] Ch 114 Eng Ch D.
84 Smith v Croft (No 2) [1988] Ch 114 Eng Ch D.
85 Caricom Report para 18:06.
V s 239; T’dad s 240.
87 Farnham v Fingold [1973] 37 DLR (3d) 156 Ont CA. And see Schelew v Schelew (2004) 49 BLR (3d) 68 NB
QB, which held that a broad interpretation should be given to legislation with respect to redressing
corporate wrongs.
88 Shield Development Co v Snyder [1976] 3 WWR 44 BC SC.
89 Goldex Mines Ltd v Revill (1974) 54 DLR (3d) 672 Ont CA; Winchell v Del Zrotto (1976) 1 CPC 338 Ont HC.
90 (Unreported) Suit No AXA HCV No 2003/023 Anguilla HC.
91 See Ant s 239; Bah s 279; B’dos s 226; Dom s 239; Gren s 239; Guy s 222; J’ca s 212; Mont s 239; St L s 239; St
V s 239; T’dad s 240.
92 Hoskin v Price Waterhouse Ltd (1982) 136 DLR (3d) 553 Ont Div Ct.
93 Ibid.
94 Richardson Green Shields of Canada Ltd v Kalmacoff (1995) 123 DLR (4th) 628 Ont CA.
212(1); Mont s 239(i); St L s 239(1); St V s 239(1); T’dad s 240(1).
96 Title Estate v Harris (1990) 67 DLR (4th) 619 Ont HC.
97 Ibid.
98 See Pappas v Acan Windows Inc (1991) 2 BLR (2d) 180 Nfld TD.
222(2)(a); J’ca s 212(2)(a); St L s 239(2)(a); St V s 239(2)(a); T’dad s 240(2)(a).
101 Re Daon Development Corpn (1984) 54 BCLR 235 BC SC; Johnson v Meyer (1987) 57 Sask R 161 Sask QB.
102 Re Bellman and Western Approaches Ltd (1981) 17 BLR 117 BC CA.
103 Armstrong v Gardner (1978) 20 OR (2d) 648 Ont HC.
222(2)(b); J’ca s 212(2)(b); Mont s 239(2)(b); St L s 239(2)(b); St V s 239(2)(b); T’dad s 240(2)(b).
105 (1976) 3 CPC 31 Ont HC.
106 (1990) 67 DLR (4th) 619 Ont HC. See also Jerry v Gillard (2005) 3 BLR (4th) 169 Alta SC.
107 (1985) 29 BLR 236 Ont CA.
108 (1980) 31 OR (2d) 475 Ont HC.
109 Ang s 261(2)(c); Ant s 239(2)(c); Bah s 279(2)(c); B’dos s 226(2)(c); Dom s 239(2)(c); Gren s 239(2)(c); Guy s
222(2)(c); J’ca s 212(2)(c); Mont s 239(2)(c); St L s 239(2)(c); St V s 239(2)(c); T’dad s 240(2)(c).
110 Henry v 609897 Saskatchewan Ltd (2002) 31 BLR (3d) 36 Sask QB.
111 Appotive v Computrex Centres Ltd (1981) 16 BLR 133 BC SC; Bellman v Western Approaches Ltd (1981) 117
DLR (3d) 193 BC CA; Henry v 609897 Saskatchewan Ltd (2002) 31 BLR (3d) 36 Sask QB; Safarik v Hall
(2006) 15 BLR (4th) 321 BC SC; Archibald v Sutherland (2006) 23 BLR (4th) 188 BC SC.
112 D’Amore v McDonald [1973] 40 DLR (3d) 354 Ont CA.
113 Feld v Glick (1978) 56 DLR (3d) 649 Ont HC.
114 Dicore Resources Ltd v Gulfstream Resources Ltd (1986) 38 ACWS (2d) 430 BC SC.
240; St V s 240; T’dad s 241.
116 Ang s 263(a); Ant s 240(a); Bah s 279(3)(a); B’dos s 227(a); Dom s 240(a); Gren s 240(a); Guy s 223(a); J’ca s
213(a); Mont s 240(a); St L s 240(a); St V s 240(a); T’dad s 241(a).
117 Ang s 263(b); Ant s 240(b); Bah s 279(3)(b); B’dos s 227(b); Dom s 240(b); Gren s 240(b); Guy s 223(b); J’ca s
213(b); Mont s 240(b); St L s 240(b); St V s 240(b); T’dad s 241(b).
118 Ang s 263(c); Ant s 240(c); Bah s 279(3)(c); B’dos s 227(c); Dom s 240(c); Gren s 240(c); Guy s 223(c); J’ca s
213(c); Mont s 240(c); St L s 240(c); St V s 240(c); T’dad s 241(c).
119 Ang s 263(d); Ant s 240(d); Bah s 279(3)(d); B’dos s 227(d); Dom s 240(d); Gren s 240(d); Guy s 223(d); J’ca s
213(d); Mont s 240(d); St L s 240(d); St V s 240(d); T’dad s 241(d).
120 Ang s 266; Ant s 241; Bah s 280; B’dos s 228; Dom s 241; Gren ss 241; Guy s 224; J’ca s 213A; Mont s 241; St L
s 241; St V s 241; T’dad s 242.
121 Ferguson v Imax Systems Corpn (1983) 150 DLR (3d) 718 Ont CA.
122 (1991) 5 BLR (2d) 160 Alta CA.
123 Peterson, Shareholders’ Remedies in Canada (Toronto: 1989) at para 18.21.
124 For a comprehensive historical analysis of these provisions see First Edmonton Place Ltd v 315888 Alberta
Ltd (1988) 40 BLR 28 Alta QB, vard 45 BLR 110 Alta CA.
125 See Ang s 266; Ant s 241; Bah s 280; B’dos s 228; Dom s 241; Gren ss 241; Guy s 224; J’ca s 213A; Mont s 241;
St L s 241; St V s 241; T’dad s 242.
126 St C/N s 241 reads: ‘(1) A member of a company may apply to the Court for an order … on the ground that
the company’s affairs have been conducted in a manner which is unfairly prejudicial to the interests of its
members generally or some part of its members (including himself) or that an actual or proposed act or
omission of the company (including an act or omission on its behalf) is or would be so prejudicial. (2) The
provisions in this Section … apply to a person who is not a member of a company but to whom shares in
the company have been transferred or transmitted by operation of law, as those provisions apply to a
member of the company.’
128 McAteer v Devoncraft Developments Ltd (2001) 24 BLR (3d) 1 Alta QB.
129 Pente Investment Management Ltd v Schneider Corpn (sub nom Maple Leaf Foods Inc v Schneider Corpn)
(1998) 44 BLR (2d) 115 Ont CA; Krynen v Bugg (2003) 32 BLR (3d) 61 Ont SCJ.
130 Wonsch (Litigation Guardian of) v Wonsch (2007) Carswell Ont 3914 Ont CA.
131 See Kosmopoulos v Constitution Ins Co [1978] 1 SCR 2 SCC where it was held that the interests of a creditor
included the expectation that the controlling shareholder would cause the company to take out insurance
on its assets.
132 See, e.g., Pente Investment Management Ltd v Schneider Corpn (sub nom Maple Leaf Foods Inc v Schneider
Corpn) (1998) 44 BLR (2d) 115 Ont CA; Grenada General Insurance Co Ltd, Jonas Browne & Hubbard
(Grenada) Ltd et al v Grenada Insurance Services Ltd (Unreported) Civ App No 12 of 1999 Gren CA.
133 This was the expression endorsed by the Court of Appeal in Re Saul D Harrison & Sons Plc [1995] 1 BCLC
14, 19 Eng CA per Hoffmann LJ.
134 In the House of Lords’ decision in O’Neill v Phillips [1999] 2 BCLC 1 Eng HL, the same judge adopted this
expression because he opined that the other expression carried connotations which were too wide.
135 Re Saul D Harrison & Sons Plc [1995] 1 BCLC 14, 19 Eng CA per Hoffmann LJ.
136 [1973] AC 360 Eng HL.
137 [1973] AC 360, 379 Eng HL.
138 [1973] AC 360, 379 Eng CA.
139 [1995] 1 BCLC 14 Eng CA.
140 [1999] 2 BCLC 1 Eng HL.
141 (Unreported) Civ App No 12 of 1999 Gren CA.
142 Ang s 266(2); Ant s 241(2); Bah s 280(2); B’dos s 228(2); Dom s 241(2); Gren ss 241(2); Guy s 224(2); J’ca s
213A (2); Mont s 241(2); St L s 241(2); St V s 241(2); T’dad s 242(2).
143 See Lalla v Trinidad Cement Ltd et al (Unreported) HCA no Cv S-852/98 T’dad HC per Jamadar J.
144 (1993) 11 BLR (2d) 122 Alta QB.
145 (1987) 59 OR (2d) 631 Ont CA.
146 (1988) 40 BLR 180 Alta QB.
147 (1985) 51 OR (2d) 460 HC.
148 Such v RW-LB Holdings Ltd (1993) 11 BLR (2d) 122 Alta QB; Cohen v Jonco Holdings Ltd (2005) 4 BLR (4th)
232 Man CA.
149 [1959] AC 324 Eng HL.
150 (2005) 4 BLR (4th) 232 Man CA. See also Brant Investments Ltd v Keeprite Inc (1991) 3 OR (3d) 289 Ont CA.
151 (Unreported) SLUHCV 0424 of 2003 St L HC.

152 St C/N s 241.
153 (1984) 26 BLR 85 Sask QB. See also Such v RW-LB Holdings Ltd (1993) 11 BLR (2d) 122 Alta QB; Cohen v
Jonco Holdings Ltd (2005) 4 BLR (4th) 232 Man CA.
154 Re Saul D Harrison and Sons plc [1995] 1 BCLC 14 Eng CA; Re RA Noble & Sons (clothing) Ltd [1983] BCLC
273.
155 Re RA Noble & Sons (clothing) Ltd [1983] BCLC 273; Re Little Olympian Each-Ways Ltd (No 3) [1995] 1
BCLC 636 Eng Ch D.
(1998) 44 BLR (2d) 115 Ont CA; Grenada General Insurance Co Ltd, Jonas Browne & Hubbard (Grenada)
Ltd et al v Grenada Insurance Services Ltd (Unreported) Civ App No 12 of 1999 Gren CA.
157 Re Saul D Harrison and Sons plc [1995] 1 BCLC 14 Eng CA.
158 See Journet v Superchef Food Industries Ltd (1984) 29 BLR 206 Que SC where it was explained that to require
perfect probity from a complainant would imply that dishonesty or improper management is to be
sanctioned if no spotless complainant may be found. See also, Standal’s Patents Ltd v 160088 Canada Inc
[1991] 1 RJQ 1996 Que SC; Krynen v Bugg (2003) 32 BLR (3d) 61 Ont SCJ.
159 Grace v Biagioli [2006] 2 BCLC 70 Eng CA.
160 Krynen v Bugg (2003) 32 BLR (3d) 61 Ont SCJ.
161 Diligenti v RWMD Operations Kelowna Ltd (1976) 1 BCLR 36 SC; Grenada General Insurance Co Ltd, Jonas
Browne & Hubbard (Grenada) Ltd et al v Grenada Insurance Services Ltd (Unreported) Civ App No 12 of
1999 Gren CA.
(1998) 44 BLR (2d) 115 Ont CA; Grenada General Insurance Co Ltd, Jonas Browne & Hubbard (Grenada)
Ltd et al v Grenada Insurance Services Ltd (Unreported) Civ App No 12 of 1999 Gren CA.
163 (1981) 16 BLR 59 Que SC.
164 (1978) 93 DLR (3d) 116 Ont HC.
165 (1978) 89 DLR (3d) 507 SCC.
166 Journet v Superchef Foods Industries Ltd (1984) 29 BLR 206 Que SC.
167 Ibid.
168 (1985) 51 OR (2d) 460 Ont HC.
169 [1994] 2 BCLC 354.
170 [1991] BCLC 959.
171 (1987) 53 Alta LR (2d) 373 Alta QB.
172 Ang s 266(3); Ant s 241(3); Bah s 280(3); B’dos s 228(3); Dom s 241(3); Gren ss 241(3); Guy s 224(3); J’ca s
213A (3); Mont s 241(3); St L s 241(3); St V s 241(3); T’dad s 242(3).
173 (Unreported) Civil Suit No 1948 of 2003 B’dos HC.
174 McAteer v Devoncraft Developments Ltd (2001) 24 BLR (3d) 1 Alta QB.
175 Algonquin Mercantile Corpn v Enfield Corpn (1990) 74 OR (2d) 457 Ont HC; Millar v McNally (1991) 3 BLR
(2d) 102 Ont Gen Div; Watkin v Open Window Bakery Ltd (1996) 28 OR (3d) 441 Ont Div Ct; Waxman v
Waxman (2004) 44 BLR (3d) 165 Ont CA.
176 Cairney v Golden Key Holdings (No 2) (1988) 40 BLR 289 BC SC.
177 McAteer v Devoncraft Developments Ltd (2001) 24 BLR (3d) 1 Alta QB. See also Korogonas v Andrew [1992] 4
WWR 339 Alta QB.
178 Ant s 241(3)(a); Bah s 280(3)(a); B’dos s 228(3)(a); Dom s 241(3)(a); Gren ss 241(3)(a); Guy s 224(3)(a); J’ca s
213A (3)(a); Mont s 241(3)(a); St L s 241(3)(a); St V s 241(3)(a); T’dad s 242(3)(a). Cases concerning injunctive
relief include Peterson v Kanata Investments Ltd (1975) 60 DLR (3d) 527 BC SC; Alexander v Westeel-Rosco
Ltd (1978) 4 BLR 313 Ont HC; Re Sabex Internationale Lteé (1979) 6 BLR 65 Que SC; Ferguson v Imax
Systems Corpn (1983) 150 DLR (3d) 718 Ont CA; Millar v McNally (1991) 3 BLR (2d) 102 Ont Gen Div;
Richardson v Control Fire Holdings Inc (2002) 29 BLR 208 Ont SCJ; Corporacion Americana de
Equipamientos Urbanos SL v Olifas Marketing Group Inc (2003) 38 BLR (3d) 156 Ont SCJ; Nord Resources
Corpn v Nord Pacific Ltd (2003) 37 BLR (3d) 120 NB QB.
179 Ang s 266(2)(e); Ant s 241(3)(b); Bah s 280(3)(b); B’dos s 228(3)(b); Dom s 241(3)(b); Gren ss 241(3)(b); Guy s
224(3)(b); J’ca s 213A (3)(b); Mont s 241(3)(b); St L s 241(3)(b); St V s 241(3)(b); T’dad s 242(3)(b). Cases
concerning appointment of receiver-manager include Peterson v Kanata Investments Ltd (1975) 60 DLR (3d)
527 BC SC; Inversiones Montfore SA v Javelin Int Ltd (1982) 17 BLR 230 Que SC; Journet v Superchef Food
Industries Ltd (1984) 29 BLR 263 BC SC; Fisher Investments Ltd v Nusbaum (1988) 71 CBR (NS) 185 Ont HC;
Standal’s Patents Ltd c 160088 Canada Inc [1991] RJQ 1996 Que SC; Millard v North George Capital
Management Ltd (1999) 1 BLR (3d) 106 Ont SCJ [Commercial List]; Goft v 1206468 Ontario Ltd (2001) 11
BLR (3d) 131 Ont SCJ [Commercial List]; 781952 Alberta Ltd v 781944 Alberta Ltd (2003) 40 BLR (3d) 278
Alta SC; Edwards v Edwards Dockrill Horwich Inc (2005) 12 BLR (4th) 36 NS SC.
180 Ang s 266(2)(d); Ant s 241(3)(c); Bah s 280(3)(c); B’dos s 228(3)(c); Dom s 241(3)(c); Gren ss 241(3)(c); Guy s
224(3)(c); J’ca s 213A (3)(c); Mont s 241(3)(c); St L s 241(3)(c); St V s 241(3)(c); T’dad s 242(3)(c). Cases
concerning amendment of articles, etc include Gillespie v Overs: Tesari Holdings Ltd v Pizza Pizza Ltd
(1987) 5 ACWS (3d) 430 Ont HC; Daniels v Fielder (1988) 52 DLR (4th) 424 Ont HC; Explo Syndicates v
Explo Inc (1989) 16 ACWS (3d) 218 Ont SCJ; Lecce v Lecce (1990) 72 OR (2d) 540 Ont HC; Harmer v McNeely
Engineering Consultants Ltd (1997) 44 BLR (2d) 254 Ont Gen Div; Krynen v Bugg (2003) 32 BLR (3d) 61 Ont
SCJ; Fiber Connections Inc v SBCM Capital Ltd (2005) 5 BLR (4th) 271 Ont SCJ.
181 Ant s 241(3)(d); Bah s 280(3)(d); B’dos s 228(3)(d); Dom s 241(3)(d); Gren ss 241(3)(d); Guy s 224(3)(d); J’ca s
213A (3)(d); Mont s 241(3)(d); St L s 241(3)(d); St V s 241(3)(d); T’dad s 242(3)(d). Cases concerning the issue
or exchange of shares etc include 820099 Ont Inc v Harold E Ballard Ltd (1991) 3 BLR (2d) 113, 123 Ont Gen
Div, affd (1991) 3 BLR (2d) 113 Ont Div Ct; PMSM Investments Ltd v Bureau (1995) 24 BLR (2d) 295 Ont Gen
Div; Re ASI holdings Inc (1996) 63 ACWS (3d) 52 Nfld TD; Working Ventures Canadian fund Inc v Angoss
Software Corpn 2000 Carswell Ont 4554 Ont SCJ [Commercial List], affd 2001 Carswell Ont 2752 Ont CA;
Bank Leu AG v Gaming Lottery Corpn (2001) 29 BLR (3d) 68 Ont SCJ [commercial List].
182 Ant s 241(3)(e); Bah s 280(3)(e); B’dos s 228(3)(e); Dom s 241(3)(e); Gren ss 241(3)(e); Guy s 224(3)(e); J’ca s
213A(3)(e); Mont s 241(3)(e); St L s 241(3)(e); St V s 241(3)(e); T’dad s 242(3)(e). Cases concerning
appointment of directors include Howestead Development Ltd v Lehman Resources Ltd (1988) 40 BLR 1 BC
SC; Explo Syndicates v Explo Inc (1989) 16 ACWS (3d) 218 Ont SCJ; Such v RW-LB Holdings Ltd (1993) 11
BLR (2d) 122 Alta QB; Wright v Peartree Software Inc (1997) 76 ACWS (3d) 308 Ont Gen Div; Catalyst Fund
General Partners Inc v Hollinger Inc (2006) 266 DLR (4th) 288 Ont CA; Walker v Betts (2006) 20 BLR (4th)
152 BC SC.
183 Ang s 266(2)(a); Ant s 241(3)(f); Bah s 280(3)(f); B’dos s 228(3)(f); Dom s 241(3)(f); Gren ss 241(3)(f); Guy s
224(3)(f); J’ca s 213A (3)(f); Mont s 241(3)(f); St L s 241(3)(f); St V s 241(3)(f); T’dad s 242(3)(f). Cases
concerning orders directing the company to purchase shares include Diligenti v RWMD Operations
Kelowna (No 2) (1977) 4 BCLR 134 BC SC; Miller v F Mendel Holdings Ltd (1984) 26 BLR 85 Sask QB; Stech
v Davies [1987] 5 WWR 563 Alta QB; Eiserman v Ara Farms Ltd [1988] 5 WWR 97 Sask CA; Such v RW-LB
Holdings Ltd (1993) 11 BLR (2d) 122 Alta QB; MacDonald v Master Cartage Inc (1999) 49 BLR (2d) 146 Ont
SCJ; Scott v Robb (2005) 7 BLR (4th) 273 Sask QB; Vallée v Pickard (2007) 28 BLR (4th) 149 Ont SCJ.
184 Ang no corresponding provision; Ant s 241(3)(g); Bah s 280(3)(g); B’dos s 228(3)(g); Dom s 241(3)(g); Gren ss
241(3)(g); Guy s 224(3)(g); J’ca s 213A (3)(g); Mont s 241(3)(g); St L s 241(3)(g); St V s 241(3)(g); T’dad s 242(3)
(g). Cases on repayment include Peterson v Kanata Investments Ltd (1975) 60 DLR (3d) 527 BC SC; Berdugo
v Lalique Glassworks Inc (1992) 37 ACWS (3d) 336 Ont Gen Div; Wilkinson v Todays Carpets Ltd 2000
Carswell BC 2090 BC SC.
185 Ang s 266(2)(b); Ant s 241(3)(h); Bah s 280(3)(h); B’dos s 228(3)(h); Dom s 241(3)(h); Gren ss 241(3)(h); Guy s
224(3)(h); J’ca s 213A (3)(h); Mont s 241(3)(h); St L s 241(3)(h); St V s 241(3)(h); T’dad s 242(3)(h). Cases on
rescission include Journet v Superchef Food Industries Ltd (1984) 29 BLR 206 Que CS; Hui v Yamato
Japanese Steak House Inc (1988) 7 ACWS (3d) 388 Ont HC; Royal Bank v Amatilla Holdings Ltd (1994) 45
ACWS (3d) 859 Ont Gen Div; Mathews v Muroff (1998) 79 ACWS (3d) 932 Ont Gen Div; Ford Motor Co of
Canada Ltd v Ontario Municipal Employees Retirement Board (2006) BLR (4th) 189 Ont CA.
186 Ant s 241(3)(i); Bah s 280(3)(i); B’dos s 228(3)(i); Dom s 241(3)(i); Gren ss 241(3)(i); Guy s 224(3)(i); J’ca s 213A
(3)(i); Mont s 241(3)(i); St L s 241(3)(i); St V s 241(3)(i); T’dad s 242(3)(i). Cases concerning production of
financial statements include Burnett v Tsang (1985) 29 BLR 196 Alta QB; Bernhardt v Main Outboard
Centre Ltd (1995) 17 BLR (2d) 219 Man QB; Mahoney v Taylor (1996) 64 ACWS (3d) 329 BC SC; Discovery
Enterprises Inc v ISE Research Ltd (2002) 29 BLR (3d) 318 BC SC; 719946 Alberta Ltd v Alberta’s BEST Inc
(2005) 10 BLR (4th) 56 Alta QB.
187 Ang s 266(2)(b); Ant s 241(3)(j); Bah s 280(3)(j); B’dos s 228(3)(j); Dom s 241(3)(j); Gren ss 241(3)(j); Guy s
224(3)(j); J’ca s 213A (3)(j); Mont s 241(3)(j); St L s 241(3)(j); St V s 241(3)(j); T’dad s 242(3)(j). Cases
concerning compensating an aggrieved person include Prime Computer of Canada Ltd v Jeffrey (1991) 6
OR (3d) 733 Gen Div; Precision Feeds Ltd v Rock Lake Colony Ltd (1993) 93 Man R (2d) 1 Man QB, revsd in
part (1994) 92 Man R (2d) 292 Man CA; Gottlieb v Adam (1994) 16 BLR (2d) 271 Ont Gen Div; Main v
Delcan Group Inc (1999) 47 BLR (2d) 200 Ont SCJ; Adecco Canada Inc v J Ward Broome Ltd (2001) 12 BLR
(3d) 275 Ont SCJ [Commercial List]; Ford Motor Co of Canada Ltd v Ontario Municipal Employees
Retirement Board (2006) BLR (4th) 189 Ont CA; Ngo v South Pacific Development Ltd (2006) 20 BLR (4th) 115
BC SC.
188 Ang s 266(2)(g); Ant s 241(3)(k); Bah s 280(3)(k); B’dos s 228(3)(k); Dom s 241(3)(k); Gren ss 241(3)(k); Guy s
224(3)(k); J’ca s 213A (3)(k); Mont s 241(3)(k); St L s 241(3)(k); St V s 241(3)(k); T’dad s 242(3)(k). A case
concerning rectification of records is Vilamar SA v Sparling [1987] RJR 2186 Que SC.
189 Ang s 266(2)(f); Ant s 241(3)(l); Bah s 280(3)(l); B’dos s 228(3)(l); Dom s 241(3)(l); Gren ss 241(3)(l); Guy s
224(3)(l); J’ca s 213A (3)(l); Mont s 241(3)(l); St L s 241(3)(l); St V s 241(3)(l); T’dad s 242(3)(l). Cases
concerning liquidation include Barnett v Tsang (1985) 29 BLR 196 Alta QB; Keho Holdings Ltd v Noble
(1987) 38 DLR (4th) 368 Alta CA; SG & S Investments (9172) Ltd v Golden Boy Foods Inc (1991) 3 BLR (2d) 80
BC CA, additional reasons at (1991) 84 DLR (4th) 751 BC CA; Murphy v Phillips (1993) 12 BLR (2d) 58, supp
reasons 12 BLR (2d) 91 Ont Gen Div [Commercial List]; Classic Organ Co v Artisan Organ Ltd (197) 35
BLR 285 Ont Gen Div.
190 Ant s 241(3)(m); Bah s 280(3)(m); B’dos s 228(3)(m); Dom s 241(3)(m); Gren ss 241(3)(m); Guy s 224(3)(m); J’ca
s 213A (3)(m); Mont s 241(3)(m); St L s 241(3)(m); St V s 241(3)(m); T’dad s 242(3)(m). Cases concerning
investigations include Ferguson v Imax Systems Corpn (1984) 11 DLR (4th) 249 Ont Div Ct; PCM
Construction Control Consultants Ltd v Heeger (1989) 44 BLR 289 Alta QB; PMSM Investments Ltd v Bureau
(1995) 24 BLR (2d) 295 Ont Gen Div; HSBC Capital Canada Inc v First Mortgage Alberta Fund (V) Inc (1999)
47 BLR 180 Alta QB; Re Argo Protective Coatings Inc (2006) 23 BLR (4th) 38 NS SC.
191 Ant s 241(3)(n); Bah s 280(3)(n); B’dos s 228(3)(n); Dom s 241(3)(n); Gren ss 241(3)(n); Guy s 224(3)(n); J’ca s
213A (3)(n); Mont s 241(3)(n); St L s 241(3)(n); St V s 241(3)(n); T’dad s 242(3)(n). Cases concerning requiring
a trial include Miller v F Mendel Holdings Ltd (1984) 26 BLR 85 Sask QB; Levy-Russell v Ltd v Shieldings
Inc (1995) 53 ACWS (3d) 979 Ont Gen Div; Awad v Dover Investments Ltd (2005) 1 BLR (4th) 173 Ont SCJ.
241(4)(a); St V s 241(4)(a); T’dad s 242(4)(a).
241(4)(b); St V s 241(4)(b); T’dad s 242(4)(b).
241(5); T’dad s 242(5).
195 Ant s 241(6); Bah s 280(4); B’dos s 228(6); Dom s 241(6); Gren ss 241(6); Guy s 224(6); J’ca s 213A (4); Mont s
241(6); St L s 241(6); St V s 241(6); T’dad s 242(6).
196 Ant s 241(6)(a); Bah s 280(4)(a); B’dos s 228(6)(a); Dom s 241(6)(a); Gren s 241(6)(a); Guy s 224(6)(a); J’ca s
213A (4)(a); Mont s 241(6)(a); St L s 241(6)(a); St V s 241(6)(a); T’dad s 242(6)(a).
197 Loveridge Holdings Ltd v King-Pin Ltd (1991) 5 BLR (2d) 195 Ont Gen Div; Wright v Donald S Montgomery
Holdings Ltd (1998) 39 BLR (2d) 266 Ont Gen Div.
198 Ant s 241(6)(b); Bah s 280(4)(b); B’dos s 228(6)(b); Dom s 241(6)(b); Gren ss 241(6)(b); Guy s 224(6)(b); J’ca s
213A (4)(b); Mont s 241(6)(b); St L s 241(6)(b); St V s 241(6)(b); T’dad s 242(6)(b).
199 See Ant s 242(1); Bah s 281(1); Dom s 242(1); Gren ss 242(1); Guy s 225(1); J’ca s 213(2): only in respect of a
derivative action; Mont s 242(1); St L s 242(1); St V s 242(1); T’dad s 243(1).
200 (1991) 2 BLR (2d) 180 Nfld TD.

201 See Ant s 242(1); Bah s 281(1); Dom s 242(1); Gren ss 242(1); Guy s 225(1); J’ca s 213(2); Mont s 242(1); St L s
242(1); St V s 242(1); T’dad s 243(1).
202 See Ang s 264: only in respect of a derivative action; Ant s 242(2); Bah s 281(2); Dom s 242(2); Gren ss 242(2);
Guy s 225(2); Mont s 242(2); St L s 242(2); St V s 242(2); T’dad s 243(2).
203 Ang s 262(1): only in respect of a derivative action; Ant s 243; Bah s 282; Dom s 243; Gren ss 243; Guy s 226;
Mont s 243; St L s 243; St V s 243; T’dad s 244.
204 (1990) 1 BLR (2d) 220 Ont Gen Div.
205 (1992) 5 BLR (2d) 146 Ont Gen Div.
206 (1990) 1 BLR (2d) 220 Ont Gen Div.
207 (1992) 11 OR (3d) 210 Ont Gen Div.
208 See, e.g., M v H (1993) 15 OR (3d) 721 Ont Gen Div; Hess v Proudfoot Motels Ltd (1993) 42 ACWS (3d) 645
Ont Gen Div; West v Edson Packaging Machinery Ltd (1994) ACWS (3d) 1262 Ont Gen Div.

Chapter 17
Other Shareholders’ Remedies
Introduction
In addition to the civil remedies discussed in the previous chapter,
Commonwealth Caribbean Companies Acts make provision for five
procedures which are not specifically labelled as shareholder remedies but the
effect of whose operation may be to facilitate remediation of some
shareholders’ disputes. These are, first, investigations, which are provided for
in all the Acts;1 second, Registrar’s inquiries, which are provided for in the
Acts in Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat,
St Lucia, St Vincent and Trinidad and Tobago;2 third, compliance and
restraining orders, which are provided for in the Acts in Anguilla, Antigua, the
Vincent and Trinidad and Tobago;3 fourth, rectification orders, which are
provided for in the Acts in Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago;4 and fifth,
liquidation and dissolution, which is provided for in the Acts in Anguilla,
This chapter examines these procedures and how they may be used for
remediation of disputes within companies, including shareholder disputes.
Investigations
Types of investigations
Commonwealth Caribbean Companies Acts contain provisions allowing for

the investigation of the affairs of companies.6 In Anguilla, Antigua, Barbados,
Tobago, these statutes make provision for court ordered investigation of the
company’s affairs conducted by a court appointed investigator where the court
is satisfied that there are circumstances suggesting wrongdoing.7 In the
Bahamas, the appointment is by the Registrar after consultation with the
Minister and in Jamaica and St Christopher/Nevis the provision is for the
Minister to make the appointment. In Belize, appointment may be by either
court order8 or by special resolution of the company.9
Nature and function of investigations
An investigation can be of tremendous importance to shareholders wishing to

bring an action involving mismanagement. Where an investigation is ordered,
the report produced by the inspector who carries out the investigation may
provide the factual basis for applications for a derivative action, relief from
oppression, a compliance order, a court-ordered winding-up, or other remedy.
That said, it must be emphasised, as was pointed out by the European Court of
Human Rights case of Fayed v United Kingdom,10 that the fundamental
justification for the investigation procedure is that the investigation is carried
out in the public interest to ensure the proper conduct of the affairs of public
companies.
Another facet of the investigation procedure which must also be stressed is
that evidence obtained pursuant to the investigation procedure may not be
used in derogation of an individual’s fundamental rights. The case of Saunders
v United Kingdom11 makes this point in relation to the right to fair procedure
under Article 6.1 of the European Convention on Human Rights which
provides that in any criminal charge, everyone is entitled to a fair hearing by
an independent and impartial tribunal. In this case, the European Court of
Human Rights, in litigation arising out of a highly controversial takeover of
another company by Guinness plc, held that evidence given by Saunders, the
chief executive of Guinness plc, to inspectors under threat of compulsion,
could not be used in a subsequent criminal trial against Saunders as this would
in effect be compelling him to incriminate himself. The public interest in
combating fraud could not be invoked to justify the right against self-
incrimination which is an aspect of the right to a fair hearing.
The case of Saunders v United Kingdom12 is undoubtedly persuasive
authority in the Commonwealth Caribbean. This must be so since all
Commonwealth Caribbean Constitutions contain a provision similar to Article
6.1, that guarantees the right to a fair hearing by an independent and impartial
tribunal.
Finally, it must be further emphasised that an investigation is an
extraordinary remedy which is, generally speaking, applicable only in limited
circumstances.13 For instance, to justify a court-ordered investigation on
application of the shareholders, the cases have insisted that there must be
reason, on substantive grounds, to believe that material information regarding
the affairs or management of the company is being concealed or withheld
from shareholders whose interests entitle them to the disclosure.14 In any
event, before the court will order an investigation, the investigation must be
shown to be prima facie in the interest of the company or its shareholders or
debenture-holders.15 Merely to show a difference of opinion as to how the
affairs of the company are being managed is not enough; it is only where
there is evidence of serious mismanagement or bad faith that an investigation
may be ordered.16
court-ordered investigations
Application for investigation order
Under the Companies Acts in the Commonwealth Caribbean which provide

for court-ordered investigations, any shareholder or debenture-holder of a
company or the Registrar may apply to the court ex parte or upon such notice
as the court may require, for an order that an investigation be made of the
company and any of its affiliates.17 The circumstances in which the court may
make such an order are statutorily stipulated.18 These include: (i) where the
business of the company or any of its affiliates is or has been carried on with
intent to defraud any person;19 (ii) where the business or affairs of the
company or any of its affiliates are or have been carried on in a manner, or the
powers of the directors are or have been exercised in a manner, that is
oppressive or unfairly prejudicial to, or that unfairly disregards, the interest of
a shareholder or debenture-holder;20 (iii) where the company or any of its
affiliates was formed for a fraudulent or unlawful purpose, or is to be
dissolved for a fraudulent or unlawful purpose;21 or (iv) where persons
concerned with the formation, business or affairs of the company or any of its
affiliates have in connection therewith acted fraudulently or dishonestly.22
The test of when a court may make an order for an investigation is if ‘it
appears to the court’ that the conduct complained of falls within any of these
statutorily stipulated circumstances.23 In Re Royal Trustco Ltd (No 3),24 it was
said that the statutory formulation ‘if it appears to the court’ means ‘if it
appears on the face of the materials submitted to the court that there is good
reason to think that the conduct complained of may have taken place.’
The Acts do not specify the standard of proof which an applicant must
satisfy to obtain an order. However, in Re First Investors Corpn,25 it was stated
that an applicant for an order is not required to prove beyond reasonable
doubt or on a balance of probabilities the conduct complained of. The only
proof which is necessary is that there are ‘sufficient grounds’ to warrant an
investigation.
Powers of the court

All of the Acts employing the court-ordered investigation procedure provide
that the court has power to make any order it thinks fit in connection with an
investigation, and expressly list a number of these orders.26 These include an
order: (i) to investigate;27 (ii) appointing an inspector, who may be the
Registrar, and fixing the remuneration of the inspector and replacing the
inspector;28 (iii) determining the notice to be given to any interested person, or
dispensing with notice to any person;29 (iv) authorising an inspector to enter
any premises in which the court is satisfied there might be relevant
information, and to examine anything, and to make copies of any documents
or records, found on the premises;30 (v) requiring any person to produce
documents or records to the inspector;31 (vi) authorising an inspector to
conduct a hearing, administer oaths and examine any person upon oath, and
prescribing rules of the hearing;32 (vii) requiring any person to attend a
hearing conducted by an inspector and to give evidence upon oath;33 (viii)
giving directions to an inspector or any interested person on any matter
arising in the investigation;34 (ix) requiring an inspector to make a final report
to the court;35 (x) determining whether a report of an inspector should be
published, and if so, ordering the Registrar to publish the report in whole or in
part, or to send copies to any person the court designates;36 (xi) requiring an
inspector to discontinue an investigation;37 or (xii) requiring the company to
pay the costs of the investigation.38
Procedural matters
A shareholder or debenture-holder who makes an application for an

investigation order must give the Registrar reasonable notice of the
application.39 The Registrar is entitled to appear and be heard in person or by
an attorney-at-law.40
Two special rules apply to an ex parte application for an investigation. First,
an ex parte application order must be heard in camera.41 Second, no person is
permitted to publish anything relating to an ex parte proceeding except with
the authorisation of the court or the written consent of the company that is
being, or to be, investigated.42
Inspector’s investigation
An inspector is appointed by an order of the court and his powers of

investigation are limited to those set out in the order appointing him.43 An
inspector must, upon request, produce to an interested person a copy of the
order appointing him.44
An interested person may apply to the court for an order that a hearing
conducted by an inspector be heard in camera and for directions on any
matter arising in the investigation.45 A person whose conduct is being
investigated or who is being examined at a hearing conducted by an inspector
may appear and be heard in person or may be represented by an attorney-at-
law.46 No person is excused from giving evidence to the inspector by reason
only that the evidence tends to incriminate him or subject him to any
proceeding or penalty.47 However, no evidence may be used in subsequent
proceedings against him, other than in a prosecution for perjury.48
An oral or written statement or report made by an inspector or any other
person in an investigation has absolute privilege.49 Consequently, any such
statement or report cannot constitute the basis for an action in defamation.
Registrar’s investigations
Under the Bahamas Companies Act, the Registrar has limited powers of
investigation. Section 270(1) of that Act provides that if the Registrar has
reasonable cause to suspect that the affairs of a company are being conducted
in a fraudulent manner he may, after consultation with the Minister, make a
preliminary investigation into the company. The findings of this investigation
are submitted to the court with a view to the company being wound up.
In the exercise of his investigative powers, the Registrar may, in writing,
request any document from the company under investigation or from an
affiliated company.50 The company must give effect to any such request.51
Upon receipt of the Registrar’s findings, the court may proceed to deal with
the company under the winding up provisions in the Act.52
Minister’s investigations
Appointment of inspectors
Sections 160 and 161 of the Jamaican Companies Act and section 128 of the St
Christopher/Nevis Companies Act set out the circumstances in which the
Minister is empowered to appoint one or more competent inspectors to
investigate the affairs of a company and to report thereon in such manner as
he, the Minister, may direct.
Under section 160 of the Jamaican Companies Act, the Minister has
discretion to make an appointment on an application by members of a
company in two situations. These are: (a) in the case of a company having a
share capital, on the application either of not less than 200 members or of
members holding not less than one-tenth of the shares issued;53 and (b) in the
case of a company not having a share capital, on the application of not less
than one-fifth in number of the persons on the company’s register of
members.54 There is no similar provision in the St Christopher/Nevis
Companies Act.
Under section 161 of the Jamaican Act, the Minister has a discretionary
power to make an appointment on his own motion if it appears to him that
any of three situations exists. The first of these is that the company’s business
is being conducted with intent to defraud its creditors or the creditors of any
other person, or otherwise for a fraudulent or unlawful purpose, or in a
manner oppressive of any part of its members, or that it was formed for any
fraudulent or unlawful purpose.55 The second is that persons concerned in the
formation or the management of the affairs of the company have, in
connection therewith, been guilty of fraud, misfeasance or other misconduct
towards it or towards its members.56 The third is that the members of the
company have not been given all the information with respect to its affairs
which they might reasonably expect.57
Section 128(1) of the St Christopher/Nevis Act appears to contemplate
conferring on the Minister a similar discretionary power of appointment to
that contained in section 161 of the Jamaican Act. Rather confusingly,
however, section 128(2) of the St Christopher/Nevis Act provides that: ‘The
appointment may be made on the application of the Registrar, the company or
a member, officer or creditor of the company.’ There is no prior or subsequent
reference to any ‘application’ in section 128, and section 128(2) affords no clue
as to whom the application is to be made to.
Under the Jamaican Act, the Minister is under an obligation to make an
appointment in two statutorily specified instances.58 These are, first, if the
company by special resolution declares that its affairs ought to be investigated
by an inspector appointed by the Minister,59 and, second, if the court by order
so declares.60
Powers of inspectors
Under both the Jamaican and St Christopher/Nevis Acts, an inspector

appointed to investigate the affairs of a company has power, if he thinks it
necessary for the purposes of his investigation, to investigate also the affairs of
any other body corporate which is or has at any relevant time been the
company’s subsidiary or holding company or a subsidiary of its holding
company or a holding company of its subsidiary.61 Where he exercises this
power, he must report on the affairs of the other body corporate so far as he
thinks the results of his investigation thereof are relevant to the investigation
original company.62
Under the Jamaican Act alone, an inspector also has power to require all
officers and agents of the company being investigated and all officers and
agents of any body corporate whose affairs are investigated to produce all
documents of or relating to the company or body corporate which are in their
custody and otherwise to give to the inspector all assistance which they are
reasonably able to give.63 Finally, under both the Jamaican and the St
Christopher/Nevis Acts, an inspector has power to examine on oath the
officers and agents of the company or other body corporate in relation to its
business and to administer an oath accordingly.64
Under both the Jamaican Act and the St Christopher/Nevis Act, if any
person refuses to produce to the inspector any book or document requested by
the inspector or refuses to answer any question put by the inspector for the
purposes of the investigation, the inspector may certify that fact in writing to
the court.65 Thereupon, the court may inquire into the case. After hearing any
witnesses produced against or on behalf of the alleged offender and after
hearing any statement that may be offered in defence, the court may punish
the offender as if he had been guilty of contempt of the court.66
Under the Jamaican Act alone, if an inspector thinks it necessary for the
purpose of his investigation that a person whom he has no power to examine
on oath should be examined, he may apply to the court.67 On such an
application, the court may if it sees fit order that person to attend and be
examined on oath before the Court on any matter relevant to the
investigation.68 On any such examination: (a) the inspector may take part
either personally or by an attorney-at-law;69 (b) the court may put such
questions to the person examined as the court thinks fit;70 (c) the person
examined must answer all such questions as the court may put or allow to be
put to him, but may at his own expense employ an attorney-at-law who shall
be at liberty to put for him such questions as the attorney-at-law may deem
just for the purpose of enabling him to explain or qualify any answers given
by him.71 Notes of the examination must be taken down in writing, and must
be read over to or by, and signed by the person examined, and may thereafter
be used in evidence against him.72
Inspectors’ report
The inspectors may and, if so directed by the Minister, must make interim
reports to the Minister, and on the conclusion of the investigation must make a
final report to the Minister under both the Jamaican Act and the St
Christopher/Nevis Act.73 Any such report must be written or printed as the
Minister may direct.74 The Minister must forward a copy of any report made
by the inspectors to the registered office of the company.75 The Minister may,
if thought fit, furnish a copy of any report on request and payment of a
prescribed fee, to any member of the company or other body corporate which
is dealt with in the report, or whose interests as a creditor of the company or
other body corporate appear to the Minister to be affected.76
In Jamaica, where the inspectors are appointed pursuant to an application of
members, the Minister must furnish at the request of the applicants for the
investigation a copy of the report to them.77 Where the inspectors are
appointed in pursuance of a court order, the Minister must furnish a copy to
the court.78
The Minister may cause the report to be printed and published under both
the Jamaican Act and the St Christopher/Nevis Act.79 In exercising his
discretion as to whether to publish the report, case law suggest that the
Minister must act in the public interest after taking such advice as he considers
appropriate.80 Case law also suggests that the Minister, in acting in the public
interest, is entitled to take the view that early publication might prejudice
further inquiries and possible criminal proceedings.81
Proceedings on inspector’s report
There are a number of actions which may be taken on an inspectors’ report

under the Jamaican Act.82 First, if it appears to the Minister that any person is
guilty of any offence for which he is criminally liable, the Minister must, if it
appears to him that the case is one in which the prosecution ought to be
undertaken by the Director of Public Prosecutions, refer the matter to the
Director of Public Prosecutions.83 If the Director of Public Prosecutions
considers that the case is one in which a prosecution ought to be instituted, he
must institute proceedings accordingly.84
Second, the Minister may present a petition to the court for the company to
be wound up if the court thinks it just and equitable that it should be wound
or for an order under the ‘complainant remedies’ provisions in the Companies
Act.85
Finally, if it appears that proceedings ought to be brought in the public
interest by any body corporate dealt with in the report for the recovery of
damages in respect of any fraud, misfeasance or other misconduct in
connection with the promotion or formation of that body corporate, or the
management of its affairs, the Minister may himself institute proceedings for
that purpose in the name of the body corporate.86 Similarly, the minister may
institute proceedings for the recovery of any property of the body corporate
which has been misapplied or wrongfully retained.87
It is important to note that a copy of the inspectors’ report, authenticated by
the seal of the company whose affairs have been investigated, is admissible in
any legal proceedings as evidence of the opinion of the inspectors in relation
to any matter contained in the report.88
Under the St Christopher/Nevis Act, the action which may be taken on an
inspector’s report is limited to the institution of civil proceedings by the
Minister if it appears to him that this would be in the public interest.89 Any
such proceedings may be brought by the Minister in the name and on behalf
of the company.90
Investigations into membership
The investigation just discussed relates to the investigation into the affairs of
the company in general. Under the Jamaican Act, the Minister also has a
specific power to investigate company membership.91
Power to appoint inspectors to investigate membership

Where there is good reason so to do, the Minister may of his own volition
appoint one or more competent inspectors to investigate and report on the
membership of any company, and otherwise in respect of the company, for the
purpose of determining the true persons who are or have been financially
interested in the success or failure (real or apparent) of the company, or able to
control or materially to influence the policy of the company.92 The
appointment of such an inspector may define the scope of his investigation,
whether as respects the matters or the period to which it is to extend or
otherwise, and in particular may limit the investigation to matters connected
with particular shares or debentures.93
The Minister is obliged to appoint an inspector if application is made by
members sufficient to instigate an appointment of inspectors under the general
provisions on investigations unless the Minister is satisfied that the application
is vexatious.94 The inspector’s appointment may not exclude from the scope of
his investigation any matter which the application seeks to have included
therein, except in so far as the Minister is satisfied that it is unreasonable for
that matter to be investigated.95
Many of the provisions discussed in relation to inspections of the company
in general apply here to the investigation of membership.96 These provisions
apply to officers and agents of the company and to all persons who are or
have been, or whom the inspector has reasonable cause to believe to be or
have been, financially interested in the apparent or real success or failure of
the company, or able to control or materially to influence its policy, including
persons concerned only on behalf of others.97
Power to require information on the ownership of shares and

debentures
The Minister has power to require certain information be given to him where
it appears to him that there is good reason to investigate the ownership of any
shares in or debentures of a company but that it is unnecessary to appoint
inspectors for the purpose.98 In such a case, any person whom the Minister has
reasonable cause to believe to be or to have been interested in those shares or
debentures, or to act or have acted in relation to those shares or debentures as
the attorney or agent of someone interested therein, may be required to give
the Minister any information which such person has or can reasonably be
expected to obtain as to the present and past interests in those shares or
debentures and the names and addresses of the persons interested and of any
person who act on their behalf in relation to the shares or debentures.99
Power to impose restrictions on shares or debentures
Where in connection with an investigation into membership it appears to the

Minister that there is difficulty in finding out relevant facts about any shares
and that the difficulty is due wholly or mainly to the unwillingness of the
persons concerned to assist in the investigation as required under the Act, he
may by order or direct that the shares be subject to statutory imposed
restrictions.100 These restrictions include the voiding of the transfer of those
shares, or in the case of unissued shares, any transfer of the right to be issued
therewith, and any issue thereof;101 the banning of the exercise of voting rights
in respect of those shares;102 the prohibition of the issuing of further shares in
right of those shares;103 and the forbidding, except in a liquidation, of the
payment of any sums due from the company on those shares, whether in
respect of capital or otherwise.104
The shares can be freed from these restrictions only in two statutorily
stipulated ways.105 The first of these is by an application made to the court by
any aggrieved person for an order removing the restrictions. Where such an
application is made, the court may, if it sees it fit, direct that the shares shall
cease to be subject to those restrictions.106 The second is by the Minister
issuing an order directing that the shares cease to be subject to the
restrictions.107
Attorneys-at-law and bankers’ privilege

The requirements for disclosure to the Minister or to inspectors appointed by
him provided for in the investigation provisions of the Jamaican Act do not
apply to attorneys-at-law or bankers.108 In respect of attorneys-at-law, it is
provided that an attorney may not be required to disclose any privileged
communication made to him in that capacity, except as regards the name and
address of his client.109 In respect of bankers, no disclosures may be required of
a company’s bankers as such of any information as to the affairs of any
customers other than the company.110
Registrar’s inquiries into proxies and insider trading

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, the Registrar is
given powers to make certain inquiries in relation to proxies and insider
trading.111 In either of these cases, if the Registrar is satisfied that there is
reason to inquire into the ownership or control of a share or debenture of a
company or any of its affiliates, he may require any person that he reasonably
believes has or has had interest in the share or debenture or who acts or has
acted for such person to provide information respecting present and past
interests in the share or debenture and the names and addresses of such
persons.112 Under the Act in Anguilla, if the Registrar wishes to conduct such
an enquiry, he has to apply to the court by summons for an order to do so.113
If a person does not comply with the Registrar’s request, that person is
guilty of an offence.114 It may be noted also that the Registrar is permitted to
make inquiries of any person relating to compliance with the Acts.115
Compliance and restraining orders
In order to ensure observance of the Acts, regulations, articles and bye-laws

and any unanimous shareholder agreements, the Acts in Anguilla, Antigua, the
Vincent and Trinidad and Tobago, have established a statutory compliance
procedure. All the Acts in these territories allow ‘a complainant or creditor’ of
the company to seek compliance by the company or any director, officer,
employee, agent, auditor, receiver, receiver-manager or liquidator of the
company with the Acts, regulations, articles, bye-laws, or any unanimous
shareholder agreement of the company.116 The remedy available to a
complainant or creditor is an application to the court for an order directing
any of the persons named to comply with, or restraining any of the persons
named from acting in breach of, any provisions of the Acts, regulations,
articles, bye-laws or unanimous shareholder agreement, as the case may be.117
Such an application is without prejudice to any other right the complainant or
creditor may have.118
Rectification orders
Application for order
As was seen in Chapter 3, all companies must maintain a register of

shareholders and debenture-holders and other records of the company. Under
Lucia, St Vincent and Trinidad, where a person’s name is alleged to be or to
have been wrongly entered or retained in, or wrongly deleted or omitted
from, the registers or other records of a company, the company, a shareholder
or debenture holder of the company, or any aggrieved person, may apply to
the court for an order that the registers or records of the company be
rectified.119
It is important to stress two aspects of these applications. The first is that the
application may be in respect of ‘the registers or other records of the
company’ and may be made by ‘a shareholder or debenture-holder of the
company, or any aggrieved person’.120 These phrases make the rectification
remedy very broad and, potentially to cover any dispute arising from the
registration or transfer of all types of corporate securities.
The second is that the provisions allow the ‘company’ to make an
application. Normally, it is the shareholder or debenture-holder or other
security-holder who would seek rectification. The company may, however, on
rare occasions wish to have the registers or records rectified, as for instance
where an officer of the company has wrongly completed the register121 or
where the company has been fraudulently induced to pass a transfer.122 These
provisions allow a company to apply in these rare circumstances.
A person applying for a rectification order must give notice of such
application to the Registrar and the Registrar is entitled to appear and be
heard in person or by an attorney-at-law.123 This provision is clearly intended
to ensure that the public interest is represented.
Power of the court
The court has power to make any order it thinks fit in connection with an
application for a rectification order.124 Where the court exercises its
jurisdiction, and it may be noted parenthetically that it is not bound to do so, it
may make an order simply requiring the registers or other records of the
company to be rectified.125 The court may, in order to limit disputes and avoid
continuing abuses, make an order restraining the company from calling or
holding a meeting of shareholders or paying a dividend before such
rectification.126 The court may also make an order determining the right of a
party to the proceedings to have his name entered or retained in, or deleted or
omitted from the registers or records of the company.127 In this regard, it does
not matter whether the issue arises between two or more shareholders or
debenture-holders or alleged debenture-holders, or between the company and
any shareholders or debenture-holders or alleged debenture-holders.128 Finally,
the court may make an order compensating a party who has incurred loss.129
Conclusion
The shareholder’s right to apply for the appointment of an inspector to
investigate the affairs of a company has traditionally been a feature of
legislation on companies in the Commonwealth Caribbean. Except in Belize,
the present Companies Acts in the region have significantly improved the
investigation as a tool for garnering corporate information which may not
otherwise be available to the shareholder to support the litigious remedies
available to him and as a mechanism for ensuring the public interest in the
proper conduct of corporate affairs. These Acts, at the same time, contain
provisions aimed at forestalling the investigation from being abused as a
method of harassing corporate management.
The compliance and restraining orders remedy in the Acts in Anguilla,
Lucia, St Vincent and Trinidad and Tobago is an important remedy. Under
these Acts, as was seen in Chapter 3, the relevant documents are not
statutorily declared to be contracts.
Notes
1 Ang ss 249–255; Ant ss 518–523; Bah s 270; B’dos ss 420–426; Dom ss 518–523; Gren ss 518–523; Guy ss 506–
511; J’ca ss 160–171; St C/N ss 128–140; St L ss 518–523; St V ss 518–523; T’dad ss 497–503.
3 Ang s 260; Ant s 248; Bah s 283; B’dos s 235; Dom s 248; Gren s 248; Guy s 231; Mont s 248; St L s 248; St V s
248; T’dad s 249.
5 Ang s 266(2)(f); Ant s 241(3)(l); Bah s 280(3)(l); B’dos s 228(3)(l); Dom s 241(3)(l); Gren s 241(3)(l); Guy s
224(3)(l); J’ca s 213A (3)(l); Mont s 241(3)(l); St L s 241(3)(l); St V s 241(3)(l); T’dad s 242(3)(l).
6 Ang ss 249–255; Ant ss 518–523; Bah s 270; B’dos ss 420–426; Bel ss 110–112; Dom ss 518–523; Gren ss 518–
523; Guy ss 506–511; J’ca ss 160–171; Mont ss 518–523; St C/N ss 128–140; St L ss 518–523; St V ss 518–523;
T’dad ss 497–503.
8 Bah s 110.
9 Bah s 111.
10 (1994) 18 EHRR 393 ECtHR. This case concerned the report into the takeover by the Fayeds of the House of
Fraser.
11 [1997] EHRR 313 ECtHR. For discussion of this case, see Davies, ‘Self-incrimination, Fair Trials and the
pursuit of Corporate and Financial Wrongdoing’ in Markesinis (ed), The Impact of the Human Rights Bill
on English Law (Oxford: 1998). But note that the House of Lords refused to quash the conviction despite the
breach of the Convention: R v Saunders, Times Law Reports, 15 November 2002.
12 [1997] EHRR 313 ECtHR.
13 As to court-ordered investigations, see Re Automatic Phone Recorder Co (1955) 15 WWR 666 BC SC; Re
Baker and Paddock Inn Peterborough Ltd (1977) 2 BLR 101Ont HC; Brown v Maxim Restoration Ltd (1998)
42 BLR (2d) 243 Ont Gen Div; Rosemont Enterprises Ltd v Mercury Industrial Inc (2005) 9 BLR (4th) 285 BC
SC.
14 Re Town Topics Co (1911) 20 Man 574, 576 per Robsob J Man KB. See also Baniuk v Carpenter et al (No 1)
(1986) 85 NBR (2d) 372 NB QB; Hong v Rice Bowl Ltd (1985) 153 APR 329 Nfld TD.
15 Re Baker and Paddock Inn Peterborough Ltd (1977) 2 BLR 101 Ont HC.
16 Ibid; Re Sabex Internationale Ltée (1979) 6 BLR 65 Que SC.
518(1); St V s 518(1); T’dad s 498(1).
518(2); St V s 518(2); T’dad s 498(2).
19 Ang s 250(2)(a); Ant s 518(2)(a); B’dos s 420(2)(a); Dom s 518(2)(a); Gren s 518(2)(a); Guy s 506(2)(a); Mont
22 Ang s 250(2)(d); Ant s 518(2)(d); B’dos s 420(2)(d); Dom s 518(2)(d); Gren s 518(2)(d); Guy s 506(2)(d); Mont s
518(2); St V s 518(2); T’dad s 498(2).
24 (1981) 14 BLR 307, 315 Ont HC.
25 [1988] 4 WWR 22, 32 Alta QB, affd (1988) 59 Alta LR (2d) 334 Alta CA.
519(1); St V s 519(1); T’dad s 499(1).
30 Ang s 251(1)(d); Ant s 519(1)(d); B’dos s 421(1)(d); Dom s 519(1)(d); Gren s 519(1)(d); Guy s 507(1)(d); Mont s
31 Ang s 251(1)(e); Ant s 519(1)(e); B’dos s 421(1)(e); Dom s 519(1)(e); Gren s 519(1)(e); Guy s 507(1)(e); Mont s
32 Ang s 251(1)(f); Ant s 519(1)(f); B’dos s 421(1)(f); Dom s 519(1)(f); Gren s 519(1)(f); Guy s 507(1)(f); Mont s
519(f); St L s 519(1)(f); St V s 519(1)(f); T’dad s 499(1)(f).
33 Ang s 251(1)(g); Ant s 519(1)(g); B’dos s 421(1)(g); Dom s 519(1)(g); Gren s 519(1)(g); Guy s 507(1)(g); Mont s
519(10(g); St L s 519(1)(g); St V s 519(1)(g); T’dad s 499(1)(g).
34 Ang s 251(1)(h); Ant s 519(1)(h); B’dos s 421(1)(h); Dom s 519(1)(h); Gren s 519(1)(h); Guy s 507(1)(h); Mont s
35 Ang s 251(1)(i); Ant s 519(1)(i); B’dos s 421(1)(i); Dom s 519(1)(i); Gren s 519(1)(i); Guy s 507(1)(i); Mont s
519(1) 9i); St L s 519(1)(i); St V s 519(1)(i); T’dad s 499(1)(i).
36 Ang s 251(1)(j); Ant s 519(1)(j); B’dos s 421(1)(j); Dom s 519(1)(j); Gren s 519(1)(j); Guy s 507(1)(j); Mont s
37 Ang s 251(1)(k); Ant s 519(1)(k); B’dos s 421(1)(k); Dom s 519(1)(k); Gren s 519(1)(k); Guy s 507(1)(k); Mont s
519(1)(k); St L s 519(1)(k); St V s 519(1)(k); T’dad s 499(1)(k).
38 Ang s 251(1)(l); Ant s 519(1)(l); B’dos s 421(1)(l); Dom s 519(1)(l); Gren s 519(1)(l); Guy s 507(1)(l); Mont s
518(3); St V s 518(3); T’dad s 498(3).
518(3); St V s 518(3); T’dad s 498(3).
518(4); St V s 518(4); T’dad s 498(4).
518(5); St V s 518(5); T’dad s 498(5).
520(1); St V s 520(1); T’dad s 500(1).
520(2); St V s 520(2); T’dad s 500(2).
521(1); St V s 521(1); T’dad s 501(1).
521(2); St V s 521(2); T’dad s 501(2).
T’dad s 502.
T’dad s 502.
T’dad s 503.
50 Bah s 270(3).
51 Bah s 270(3).
52 Bah s 270(2).
53 J’ca s 160(1)(a).
54 J’ca s 160(1)(b).
55 J’ca s 161(b)(i).
56 J’ca s 161(b)(ii).
57 J’ca s 161(b)(iii).
58 J’ca s 161(a).
59 J’ca s 161(a)(i).
60 J’ca s 161(a)(ii).
61 J’ca s 162; St C/N s 129(1).
62 J’ca s 162; St C/N s 129(1).
63 J’ca s 163(1).
64 J’ca s 163(2); St C/N s 130(2).
65 J’ca s 163(3); St C/N s 134(1).
66 J’ca s 163(3); St C/N s 134(2).
67 J’ca s 163(4).
68 J’ca s 163(4).
69 J’ca s 163(4)(a).
70 J’ca s 163(4)(b).
71 J’ca s 163(4)(c).
72 J’ca s 163(4).
73 J’ca s 164(1); St C/N s 135(1).
74 J’ca s 164(2).
75 J’ca s 164(3)(a); St C/N s 135(2)(a).
76 J’ca s 164(3)(b); St C/N s 135(2)(b).
77 J’ca s 164(3)(c).
78 J’ca s 164(3)(d).
79 J’ca s 164(3); St C/N s 135(c).
80 Lonrho plc v Secretary of State for Trade and Industry [1989] 2 ALL ER 609; sub nom R v Secretary of State
for Trade and Industry, ex p Lonrho plc [1989] 1 WLR 525 Eng HL.
81 Ibid.
82 J’ca s 165.
83 J’ca s 165(1).
84 J’ca s 165(2).
85 J’ca s 165(4).
86 J’ca s 165(5).
87 J’ca s 165(5).
88 J’ca s 167.
89 St C/N s 136(1).
90 St C/N s 136(1).
91 J’ca s 168.
92 J’ca s 168(1).
93 J’ca s 168(2).
94 J’ca s 168(3).
95 J’ca s 168(3).
96 J’ca s 168(5).
97 J’ca s 168(5)(a).
98 J’ca s 169(1).
99 J’ca s 169(1).
100 J’ca s 170(1).
101 J’ca s 170(2)(a).
102 J’ca s 170(2)(b).
103 J’ca s 170(2)(c).
104 J’ca s 170(2)(d).
105 J’ca s 170(3).
106 J’ca s 170(3).
107 J’ca s 170(3).
108 J’ca s 171.
109 J’ca 171(a).
110 J’ca s 171(b).
524(1); St V s 524(1); T’dad s 504(1).
524(1); St V s 524(1); T’dad s 504(1).
113 Ang s 256(1).
114 Ang s 256(1); Ant s 531(1)(f); B’dos s 433(1)(f); Dom s 531(1)(f); Gren s 531(1)(f); Guy s 520(1)(f); Mont s
531(1)(f); St L s 531(1)(f); St V s 531(1) f); T’dad s 511(1)(e).
s 506.
s 248; T’dad s 249.
s 248; T’dad s 249.
s 248; T’dad s 249.
244(1); T’dad s 245(1).
244(1); T’dad s 245(1).
121 Re Indo-China Steam Navigation Co [1917] 1 Ch 100.
122 Re Discoveries Finance Corpn, Lindlar’s Case [1910]1 Ch 312 Eng CA.
244(2); T’dad s 245(2).
244(3); T’dad s 245(3).
244(3)(a); St V s 244(3)(a); T’dad s 245(3)(a).
244(3)(b); St V s 244(3)(b); T’dad s 245(3)(b).
244(3)(c); St V s 244(3)(c); T’dad s 245(3)(c).
244(3)(c); St V s 244(3)(c); T’dad s 245(3)(c).
244(3)(d); St V s 244(3)(d); T’dad s 245(3)(d).
Chapter 18
Dissenting Shareholder’s Appraisal
Remedy
Introduction
The Companies Acts in Antigua, Barbados, Dominica, Grenada, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago1 have introduced for the first time
into Commonwealth Caribbean company law a shareholder’s right to dissent
from specified fundamental or structural changes in his company and to
require the company to purchase his shares at a judicially determined fair
value. This new right of a shareholder to dissent and require the company to
purchase his share at their fair value has also been enacted into the Bahamian
Companies Act.2 This new right is referred in all these statutes as dissenters’
rights.
Under the Acts in Antigua, Barbados, Dominica, Grenada, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago, in determining the fair value of the
dissenter’s shares, the courts are empowered to appoint an outside appraiser in
order to determine judicially the fair value of a dissenting shareholder’s
shares.3 Under the Bahamian Act, fair value is not judicially determined.
Rather, it is determined by an appraisal mechanism established under the
provisions of that Act. Because the new statutory right is so dependent upon
an appraisal in determining the fair value of a dissenter’s shares, the right is
also commonly referred to in company law as an appraisal right and
sometimes as an appraisal remedy.
Nature of the Appraisal Remedy
Overview of the dissent right provisions
All the Acts in the Commonwealth Caribbean which confer dissent rights
contain provisions stipulating certain actions by a company which ‘trigger’ a
shareholder’s right to dissent.4 These triggers may give rise to either an
unconditional right to dissent5 or a conditional right to dissent.6
Unconditional right to dissent
Under the Acts in Antigua, the Bahamas, Barbados, Dominica, Grenada,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, a shareholder of
any class of shares of a company has an unconditional right to dissent if the
company resolves to implement any of four statutorily specified fundamental
changes.7 The first specified fundamental change for which the dissent right is
available is a resolution by the company to amend its articles to add, change
or remove any provisions restricting or constraining the issue or transfer of
shares or class of shares.8 The second is a resolution to amend the company’s
articles to add, change or remove any restriction upon the businesses that the
company can carry on.9 The third is a resolution by the company to
amalgamate with another company otherwise than by way of a vertical or
horizontal short-form amalgamation.10 The fourth and final is where the
resolution is to sell, lease or exchange all or substantially all of a company’s
property.11
Canadian case law makes it clear that for the shareholder to claim the
dissent right he must show that the company’s resolution is in respect of one
of these statutorily specified fundamental changes. Thus, for instance, in the
cases of McConnell v Newco Financial Corpn,12 where the amendment to the
articles was not in respect of any of those statutorily specified, and Martin v FP
Bourgault Industries Air Seeder Division Ltd,13 where the company was not
selling all or substantially all of its property as statutorily stipulated, it was
held that the dissent right could not be invoked.
Under the Act in the Bahamas, the unconditional right to dissent is triggered
by four different statutorily specified events. These include, first of all, a
merger,14 if the company is an existing company that is participating in the
merger with one or more existing companies, or in other words what is
statutorily called a ‘constituent company’.15 If, however, the company is the
surviving company and the member continues to hold the same or similar
shares, the right to dissent is not triggered.16 The second statutorily specified
event is a consolidation17 if the company is a constituent company.18
The third event is any sale, transfer, lease, exchange or other disposition of
more than 50 per cent of the assets or business of the company, if not in the
usual or regular course of business carried on by the company.19 This event
does not, however, include a disposition pursuant to an order of a court having
jurisdiction in the matter;20 a disposition for money on terms requiring all or
substantially all net proceeds to be distributed to the members in accordance
with the respective interests within one year after the date of the disposition;21
or, a transfer of shares where the company by resolution of shareholders
resolve that all of its shares rank pari passu for all purposes.22 The fourth
triggering event is the redemption of members’ shares by the company where
shareholders holding 90 per cent of the votes of the outstanding shares entitled
to vote on a merger or consolidation instruct the company to redeem the
shares held by the remaining shareholders.23
Conditional right to dissent

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, a shareholder may
have the right to dissent on condition that, upon an application by a company
to the court for the approval of an arrangement, the court makes an order
permitting him to dissent.24 In all of these Acts, except the Act in the Bahamas,
a shareholder may have a similar conditional dissent right if the articles of a
company that is not a public company provide that the holders of a class or
series of shares are entitled to vote separately as a class or series in respect of
an amalgamation when the amalgamation agreement contains any provision
changing or altering their capital or income rights and he is a holder of shares
of that class or series, and the resolution is to amend the rights enjoyed by that
class or series.25
It is apparent from the foregoing that, except where the fundamental
change involved is a reorganisation under the Acts,26 fundamental changes
give rise to an unconditional dissent right, and a conditional dissent right
where the court so orders or where the articles so provide. In either case,
however, provided a dissenting shareholder complies with the relevant
provisions in the Act, the right of dissent obligates the company to purchase
the dissenting shareholder’s shares and to pay him the fair value of the shares
held by him in respect of which he dissents.27
In this regard, it is to be noted that the dissenting shareholder is entitled to
be paid in cash and need not accept securities.28
Right to dissent non-exclusive
The right of shareholders to dissent is expressly stated in the Acts in Antigua,

Barbados, Dominica, Grenada, Montserrat, St Lucia, St Vincent and Trinidad
and Tobago to be non-exclusive.29 This means that a dissenting shareholder
can exercise any other right available to him by statute or at common law in
relation to the transaction in question, in addition to his dissent right.30 The
dissent right is, however, expressly stated to be subject to the statutory
oppression remedy.31 Does this mean that the dissent right to a fair value
proceeding precludes the oppression remedy?
This question was considered in the Canadian case of LSI Logic Corpn of
Canada Inc v Logani.32 Here, it was held that it does not automatically have
this result. Fruman J explained as follows:
A fair value proceeding does not automatically preclude an oppression action: Alberta (Treasury Branches)
v SevenWay Capital Corp (2000) 261 AR 278 (CA). Section 190 of the CBCA, the dissent section, is made
subject to s. 241, the oppression section. An application under s. 241 must be made by a ‘complainant’,
which is defined to include a former shareholder (s.238). While a fair value proceeding arises from a
particular fundamental change to which the shareholder dissents, an oppression remedy can result from
corporate conduct that predates the fundamental change. Therefore, a former shareholder’s right to
complain about prior oppressive conduct is not necessarily extinguished because the shareholder dissented
to a fundamental change. SevenWay at 287 points out that ‘[i]t would be a rare case indeed where the very
same conduct that creates a right to dissent (which is exercised) will be found to be oppressive and
requiring a remedy’.
Under the Act in the Bahamas, the appraisal right is exclusive. Section 168(11)
expressly provides that the enforcement of that right by a member ‘shall
exclude the enforcement by the member of a right to which he might
otherwise be entitled by virtue of holding shares’ except the right to institute
proceedings to obtain relief on the ground that the action is illegal.
Interpreting the dissent provisions
It is submitted that, given their purpose, the provisions in the Acts granting the
appraisal right should be interpreted broadly, not restrictively. As long as any
single element of a fundamental change would attract dissent rights, minority
shareholders should be given the right to dissent. This approach was taken by
the Supreme Court of Canada in Jepson v Canadian Salt Co.33 In this case, it
was held that, since various provisions of the Canadian Business Corporation
Act can be used as a mechanism to force out minority shareholders, the courts
will be astute, so far as possible, to protect minority rights. Thus, provided that
a dissenting shareholder makes it plain in writing that he opposes a proposed
resolution, the requirement for written dissent will not be interpreted as
requiring any particular form.
Similarly, in the more recent decision of Ford Motor Co of Canada v Ontario
(Municipal Employees Retirement Board),34 the Ontario Court of Appeal
opined that the central plank of the appraisal right, ‘fair value’, is to be given a
broad and flexible meaning, that is not synonymous with market value, and
that embraces some notion of equitable treatment. Rosenberg JA explained it
this way:35
Since the provisions are an attempt to balance the different interests of minority and majority shareholders,
the courts have tended to give the term ‘fair value’ a broad and flexible meaning. Thus, most courts accept
that fair value is not synonymous with fair market value and that the concept embraces some notion of
equitable treatment. The need for this flexibility is especially evident where, as here, the act triggering the
dissent is a squeeze out or expropriation of the shares of the minority shareholders. In Dennis H. Petersen,
Shareholder Remedies in Canada (Butterworths, Markham: 2004), the author descrides the notion of fair
value as ‘what is just and equitable in all the circumstances’ which ‘confers a broad and flexible
jurisdiction on the courts to determine share values’.
Theories of the Role of the Appraisal Remedy 36
Legislative balance of minority and majority rights theory
The justification traditionally advanced for the usefulness of the appraisal

remedy is that the remedy operates as a mechanism for balancing the ability
of the majority shareholders to make fundamental adjustments to the
corporate structure necessitated by changing economic and business
considerations with the right of the minority opposed to such adjustments to
opt out of the venture. By this mechanism, minority dissenting shareholders
are given the right to opt out of the company and demand fair compensation
for their shares. As a consequence, minority shareholders are protected from
discrimination while, at the same time, flexibility within the company is
preserved allowing it to adapt to evolving business conditions. This theory of
the appraisal remedy was succinctly stated in the Wisconsin Supreme Court in
HMO-W Incorporated v SSM Health Care System37 where it was said that: ‘The
appraisal remedy has its roots in equity and serves as a quid pro quo: minority
shareholders may dissent and receive a fair value for their shares in exchange
for relinquishing their veto power.’
The theory that the appraisal remedy is part of a legislative model to
balance the rights and interests of minority shareholders with those of the
majority is based on statutory analysis.38 The theory stems from the argument
that the dissent right is an extension of the shareholder’s voting right since the
dissent right establishes a procedure for minority shareholders to surrender
their shares for fair market value if a majority of shareholders approve a
fundamental change in the structure or direction of the company. The
statutory link between the appraisal remedy and the removal of the minority
shareholders’ right to vote in the context of Commonwealth Caribbean
company law is evidenced in the fact that, as has been seen, the right to
dissent in regional Companies Acts is given only in respect of matters
requiring shareholders to vote their approval.
Solution to asset substitution problem theory
Another justification sometimes given for the appraisal remedy is that it

provides a solution to what is sometimes called in corporate finance theory an
asset substitution problem occasioned by a fundamental change in the
corporate structure or direction.39 An asset substitution problem arises because
the shareholder invested in a company with a particular mix of assets and
associated risks which are inevitably altered by a fundamental change. The
appraisal remedy is therefore justified because it permits the shareholder to
opt out of the change by receiving the pre-transaction value of his shares, in
cash, rather than a stake in the changed company.40 It has been argued,
however, that the only shareholders who might have cause to complain about
a change in the riskiness of the company’s assets are those who are both
illiquid and undiversified, which rules out listed public company shareholders.
Thus, the asset substitution problem is relevant, if at all, only in the private
company context.
Solution to the agency problem theory
A final powerful justification in market economic theory for the appraisal

remedy, even in the listed publicly held company, is that the appraisal remedy
serves as a check on management and thereby solves the so-called agency
problem. Mahoney and Weinstein present the agency problem justification for
the appraisal remedy in the context of merger as follows:41
Managers can use anti-takeover devices to guard against low-ball bids by outsiders, but shareholders lack
analogous structural protections against self-interested behavior by management itself. Managers may fail
to negotiate the highest price for the company because management is the acquirer (an MBO) or because
the bidder is perceived as friendly to management (a white knight acquisition). Similarly, when a parent
company or other controlling shareholder eliminates the minority through a freeze-out merger, the target’s
management will typically have been selected by the controlling shareholder. The managers’ incentives
will therefore be aligned more with those of the controlling shareholders than the minority. Not only may
shareholders be bought at a price less than the value of the firm under faithful management, but the
possibility of such an acquisition will depress the ex ante share price. Neither pre-nor post-announcement
market prices are reliable measures of the ‘fair value’ of the stock if the market price is depressed by
actual or prospective managerial self-dealing. The most sensible justification for judicial skepticism of
market prices as the measure of appraised value, then, is the existence of agency problems.
In a word, the theory runs that because the appraisal remedy is available as a
last resort to a dissenting shareholder who feels that a management decision
was so improvident that the market no longer offers a fair alternative,
management may be encouraged ‘to tailor their plans to minimise the number
of dissenters by getting the best deal possible’.42
Determining Fair Value
Overview
Three important issues arise in determining the fair value of shares. These are
the time at which fair value is to be determined, whether value arising from
the change complained of is to be included and what methods are to be used
in determining fair value. The Acts in Antigua, Barbados, Dominica, Grenada,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago contain provisions
on some of these issues. The Act in the Bahamas, on the other hand is
completely silent on these issues.
Time of valuation
The first major issue in determining fair value is the time at which the fair
value is to be determined. With respect to this issue, it is statutorily provided
in Antigua, Barbados, Dominica, Grenada, Montserrat, St Lucia, St Vincent and
Trinidad and Tobago that the fair value of shares is to be determined as of the
close of business on the day before the resolution was adopted or the order
made.43 In the Canadian case of Neonex Int’l v Kolasa,44 it was decided that,
because of this provision, any change in value reasonably attributable to the
anticipated adoption of the resolution must not be included in the calculation
of fair value.
Value arising from the fundamental change
The second important issue is whether the amount awarded to a dissenting

shareholder includes any benefit or value which accrues as a result of the
fundamental change to which he is dissenting. There is no statutory provision
on this issue in the Acts in Antigua, Barbados, Dominica, Grenada, Montserrat,
St Lucia and St Vincent. However, there is provision in the Trinidad and
Tobago Act that ‘in determining the fair value of the shares any change
reasonably attributable to the anticipated adoption of the resolution or the
order made under section 238 shall be excluded’.45
It appears from Canadian case law46 to be well settled that, quite apart from
statutory provision to this effect, dissenting shareholders are not entitled to
receive any advantage reasonably attributable to the fundamental change to
which they have dissented. This means that the principle in Antigua, Barbados,
Dominica, Grenada, Montserrat, St Lucia and St Vincent, where the Acts are
silent on the issue in question, is the same as that in Trinidad and Tobago.
Approaches to determining fair value
The different approaches
The third important issue is what is meant by the intrinsic fair value of shares
and how is such value to be determined. None of the Acts contains any
provisions on this issue. However, there is an abundance of case law which
provides valuable guidance on the way in which determination of fair value is
to be approached.
In Ultramar Canada Inc v Montreal Pipe Line Ltd,47 fair value was said to
be the highest price available in an open and unrestricted market between
informed, prudent parties acting at arm’s length and under no compulsion to
act, expressed in terms of money or money’s worth. In Domglas Inc v
Jarislowsky, Fraser & Co,48 Greenberg J, after an extensive consideration of
Canadian and American cases, stated that there are four generally approved
approaches to the determination of the fair value of shares. These are, first, the
stock market approach which involves ascertaining the quoted stock market
price of the shares. The second approach is the asset approach. This involves
the valuation of the net assets of the company at fair market value. The third
approach is the earnings or investment value approach. This approach involves
the capitalisation of maintainable earnings. The fourth and final approach
involves some combination of the three foregoing approaches. This statement
is now generally accepted as representing the law.49
It appears to be firmly established in Canadian jurisprudence that no one of
these four approaches to determining the fair value of shares is to be regarded
as a talisman. In Cyprus Anvil Mining Corpn v Dickson,50 it was said that the
problem of finding the fair value of corporate shares defies reduction to a set
of rules for selecting a method of valuation or to a mathematical formula or
equation. Each case must be decided on its own facts. The only true rule is that
all the evidence that might be helpful must be considered. Ultimately, fair
value is to be determined by the exercise of the prudent judgment of the
court.51
Stock market approach
The circumstances in which the stock market approach may be employed by

the courts in determining fair value have been extensively examined in the
cases. One obvious factual circumstance that has been highlighted by the
courts is the distinction between determining the fair value of the shares in the
case of a public company and fair value in the case of a closely held company.
In this regard it was held in the case of Diligenti v RWMD Operations
Kelowna Ltd (No 2),52 that the stock market value approach, which may be an
entirely appropriate approach in determining the fair value in the case of
certain public companies, is wholly inappropriate in the case of a private
company, since the shares of a closely held company are not traded on the
stock market.
In the case of public companies whose shares are listed on the stock market,
where shares are widely and actively traded between willing buyers and
willing sellers, it is tempting to assume that the stock market value approach
inevitably reveals the fair market value. But even here, the courts in the
exercise of their equitable jurisdiction have not automatically adopted the
stock market approach. Thus, in Canadian Gas and Energy Fund Ltd v Sceptre
Resources Ltd,53 where the shares of a public company were widely held,
where there was no controlling shareholder and where the shares were
actively traded, the stock market value was considered merely to form the
‘main criterion to be utilised in establishing fair value’. Accordingly, the court
checked the stock market value against the values arrived at by the other
approaches.
The courts have taken judicial notice that the stock market approach may
not be appropriate in the cases where the stock market does not work
perfectly and the traded price of shares may thus not be representative of the
true value of a pro rata share of the company. Examples of such cases are
where shares of a public company are thinly traded, and where a substantial
block of shares are held by a small group of dominant shareholders. It is clear
from the case law that, in these cases, the courts will not always utilise the
stock market approach in determining the fair value of shares.
Thus, in Neonex Int’l v Kolasa,54 the British Columbia Supreme Court was
concerned with fixing the fair market value of shares in a case where an
individual controlled almost 50 per cent of the shares of a public company. The
Supreme Court refused to adopt the stock market approach, as it was
determined that the substantial shareholding of the individual would have the
effect of depressing stock market prices. Re Whitehorse Copper Mines Ltd55 is
to the same effect.
In this case, two-thirds of the shares of a company were held by two groups
of shareholders. It was held that this, coupled with the fact that the remaining
shares were not traded, constituted grounds for not adopting the stock market
approach in fixing the value of the shares of the company.
It appears from the case of Re Montgomery and Shell Canada Ltd56 that,
where the stock market is considered to work perfectly and that the traded
price of shares may thus be regarded as representative of the true value of a
pro rata share of the company the stock market approach may be adopted by
the courts. This was a case which involved the fair valuation of shares in a
large public company. One shareholder held two-thirds of the shares in the
class of shares involved, and all of the other two classes of shares. Significantly,
the remaining one-third of the class of shares in question was publicly held
and there was active trading in a large number of these shares over an
extended period of time. In these circumstances, it was held that the stock
market value was the fair value.
Assets approach
The second approach to valuation referred to in Domglas Inc v Jarislowsky,

Fraser & Co,57 namely the assets approach, was considered in the case of
Kelvin Energy Ltd v Bahan.58 In this case it was held that where a company
sells all or substantially all of its property and thereby becomes a holding
corporation, the net asset approach is the most appropriate approach of the
four approaches in determining fair value. This is because where the sale is to
a knowledgeable, experienced, arm’s-length purchaser who has the
opportunity to perform a due diligence analysis of the assets it is acquiring, the
purchase price of those assets is a reasonable starting point in deciding fair
value. The court in this case went on to point out that it is not appropriate to
adjust such fair value downwards for unsubstantiated claims, litigation claims
which are before the court, income tax reassessments, contingent liabilities for
liquidated damages, or calculations on a fully diluted basis where the
convertible securities have not been converted as of valuation date.
Earnings or investment value approach
The third approach identified in Domglas, the earnings or investment value

approach, has also been considered in the cases. In Domglas itself, it was
pointed out that the earnings approach requires the court to arrive at the most
probable and reasonable stream of maintainable earnings projected into the
near future, and to capitalise those projected net earnings at an appropriate
price-earning multiple. The earnings approach is appropriate where the
company is not unduly capitalised and is fundamentally viable as a going
concern at the valuation date.
The earnings approach was adopted in Manning v Harris Steel Group Inc.59
This case concerned corporate shares which were publicly traded, but trading
was thin and the two largest shareholders, who had a combined holding of
approximately 71 per cent of the shares, had negotiated the price set out in the
takeover bid. These two shareholders also, both directly and indirectly,
received other collateral benefits such as salary for a fixed period, a post-
employment consultancy contract and an interest in another profitable
business. In these circumstances the court rejected the stock market approach
and adopted the earnings approach. The court reasoned that since a company
is in business to earn income, it follows that the value of a business must
depend on its capacity to earn income. Basically, then, a business is worth only
what it can earn, except where it is worth less on an earnings basis than its
liquidation value.
Fair value and premiums
An interesting question which has been confronted by the cases in

determining fair value is whether fair value should include a premium in
appropriate cases. On this question, there is case law which suggests that,
where a fundamental change involves a squeeze-out of minority shareholders,
the fair value of the dissenting shareholder’s share should include a premium.
Domglas Inc v Jarislowsky, Fraser & Co60 and Investissements Mont-Soleil Inc
v National Drug Ltd61 are two such cases in which minority shareholders were,
upon an amalgamation, given redeemable shares which were redeemed
immediately after the amalgamation. It was held that the dissenting
shareholders would be allowed a premium.
However, the most recent case law on the matter seems settled that the
right to such premium does not exist in Canadian company law.62 Thus, in the
case of Ford Motor Co of Canada v Ontario (Municipal Employees Retirement
Board),63 the Ontario Court of Appeal explained that, in a squeeze-out of
minority shareholders’ appraisal, ‘fair value’ involves an exercise in appraisal
of the present market value of shares while taking into account that it is a
forced sale that deprives shareholders of the opportunity to share in the
company’s fortunes. Consequently, fair value should not be reduced for a
minority discount. On the other hand, to include a component for historical
wrongs would represent a departure from the principle of paying dissenting
shareholders fair value for their shares in exchange for relinquishing their veto
power.
Dissent Procedure
Who may exercise the right
Although the Acts in Antigua, Barbados, Dominica, Grenada, Montserrat, St

Lucia, St Vincent and Trinidad and Tobago accord the dissent remedy to a
‘shareholder’,64 only a registered shareholder is allowed to exercise dissenting
shareholder’s rights,65 and this only with respect to all the shares of the class or
series held by him on behalf of any one beneficial owner which are registered
in the name of the dissenting shareholder.66
In the Act in the Bahamas, the remedy is stated to be available to a
‘member’.67 A ‘member’ is defined in that Act as a shareholder in the case of a
company limited by shares.68
In Manitoba (Securities Commission) v Versatile Cornat Corpn69 it was
emphasised that the expression ‘shareholder’ for purposes of the dissenting
rights provisions means a shareholder registered as such on the books of the
company. Thus, it was held in that case that a dissenting shareholder, who sent
to the company a written dissent but thereafter disposed of his shares, ceased
to be a registered shareholder and, therefore lost his right to dissent. The
written dissent sent by the shareholder was a nullity.
It should be noted that, under the Acts in Antigua, Barbados, Dominica,
Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, all
registered shareholders have a dissent right regardless of the time of purchase
of the shares, even where the shares are purchased after the announcement of
the fundamental change giving rise to the dissent.70
Initiating the dissent process

Under the Acts in Antigua, Barbados, the Bahamas, Dominica, Grenada,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago, the dissent process
is initiated by the dissenting shareholder sending to the company a written
dissent from the proposed resolution.71 The written dissent may be sent either
at or before the meeting of shareholders of the company at which the
resolution in question is to be voted on, unless the company did not give
notice to the shareholder of the purpose of the meeting and of his right to
dissent.72
It appears from the cases that, where no such notice is given, the
shareholder may give a written dissent promptly on learning of the action.73 If
a shareholder fails to send to the company a written dissent from the proposed
resolution in time, then he is not entitled to the rights of a dissenting
shareholder under the Acts in Antigua, the Bahamas, Barbados, Dominica,
Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago. This is
because the words ‘must send to the company’ in the relevant subsection74 will
be construed as mandatory.75
Notice to dissenter of adoption of the resolution
When a shareholder has dissented to a proposed resolution, the company

must, under the Acts in Antigua, the Bahamas, Barbados, Dominica, Grenada,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago, within ten days
after the shareholders of the company adopt the resolution, send to the
dissenting shareholder notice that the resolution has been adopted.76 Such
notice may, however, be dispensed with if the dissenting shareholder has
voted for the resolution or has withdrawn his dissent.77
Dissenter’s notice of demand for payment
A dissenting shareholder who wishes to continue his dissent after receiving the
notice of adoption of the resolution must, within twenty days after he receives
such notice, send to the company a written demand notice.78 This notice must
contain the name and address of the dissenter,79 the number and class or series
of shares in respect of which he dissents,80 and a demand for payment of the
fair value of the shares.81 If the dissenting shareholder does not receive a
notice of adoption of the resolution, his obligation to send a similar written
demand notice to the company within twenty days only arises after he learns
of the adoption of the resolution by the company.82
Dissenter’s share certificates
Under the Acts in Antigua, Barbados, Dominica, Grenada, Montserrat, St

Lucia, St Vincent and Trinidad and Tobago, within thirty days after sending a
demand notice, a dissenting shareholder must send to the company or its
transfer agent the certificates representing the shares in respect of which he
dissents.83 On receipt of the share certificates, the company or its transfer
agent must endorse on the share certificates a notice that the holder of the
shares is a dissenting shareholder and forthwith return the share certificate to
the dissenting shareholder.84
If a dissenting shareholder fails to send the share certificates to the company
within this time, he has no right to pursue his demand for payment of the fair
value of the shares in his demand for payment notice.85 It appears that this
requirement that the dissenting shareholder send to the company the share
certificates representing the shares in respect of which he dissents may be
waived by the company, and in Jepson v Canadian Salt Co,86 it was held that
this may be done inadvertently.
Legal effect of notice of demand for payment
After a notice demanding payment is sent, the dissenting shareholder who

sends such a notice ceases to have any rights as a shareholder other than the
right to be paid the fair value of his shares.87 There are, however, three
exceptions to this rule.
First, the rule does not apply where the dissenting shareholder withdraws
his notice before the company makes an offer to pay for the shares in
question.88 Second, the rule does not apply where the company fails to make
an offer to pay for the shares and the dissenting shareholder withdraws his
notice.89 Finally, the rule does not apply where the dissent is in respect of an
alteration of the articles and the directors revoke the resolution to amend the
articles of the company;90 or where the dissent is in respect of an
amalgamation and the directors terminate the amalgamation agreement;91 or
where the dissent is in respect of a sale, lease or exchange of property and the
directors abandon the sale, lease or exchange of property.92
In each such case, the shareholder’s rights are reinstated nunc pro tunc as of
the date when the notice of dissent was filed.93 The overall effect of these rules
is that if there is a period when there is a suspension of the dissenting
shareholder’s rights, these rights may be resumed where either the dissenting
shareholder repents or the offending resolution or action is negated.
Written offer to pay
The dissent process is completed under the Acts in Antigua, Barbados,

by the company sending to the dissenting shareholder a written offer to pay
for his shares in an amount considered by the directors of the company to be
the fair value of those shares.94 The written offer must be accompanied with a
statement showing how the fair value was determined.95 The sending of this
written offer is a statutory obligation on the company and the offer must be
sent not later than seven days after the action approved by the resolution is
effective or the day the notice of demand for payment from the dissenting
shareholder, which ever is the later date.96
Notification of inability lawfully to pay

If the company would be unable to pay its liabilities as they become due, or
the realisable value of the company’s assets would be less than the aggregate
of its liabilities by making payments to the dissenting shareholder, the
company is prohibited under the Acts in Antigua, the Bahamas, Barbados,
from making a payment to a dissenting shareholder.97 In such an event, the
company must send a notification to the dissenting shareholders that it is
unable to lawfully pay dissenting shareholders for their shares.98
Where a dissenting shareholder receives such notification, two alternative
courses of action are available to him.99 First, he may withdraw his notice of
dissent.100 In such a case, the company consents to the withdrawal and the
shareholder is reinstated to his full rights as a shareholder.101 Second, the
shareholder may retain a status as a claimant against the company entitled to
be paid as soon as the company is lawfully able to do so, or in a liquidation, to
be ranked subordinate to the rights of creditors of the company but in priority
to the company’s shareholders.102
Payment for shares
The Acts in Antigua, the Bahamas, Barbados, Dominica, Grenada, Montserrat,

St Lucia, St Vincent and Trinidad and Tobago provide that every offer made
for shares of the same class or series must be on the same terms.103 The
company must pay for the shares of the dissenting shareholder within ten days
after an offer to pay has been accepted.104 On the other hand, the offer lapses if
the company does not receive an acceptance of the offer within thirty days
after it has been made.105
Fixing Fair Value by the Court
Application to the court
Inevitably, there will be cases where the company fails to make an offer and
cases where a dissenting shareholder, or group of dissenting shareholders,
disagree on the fair value of shares held by the dissenting shareholder and fail
to accept an offer made by the company. In any such case, under the Acts in
Antigua, Barbados, Dominica, Grenada, Montserrat, St Lucia, St Vincent and
Trinidad and Tobago, the company may, within fifty days after the action
approved by the resolution is effective, apply to the court to fix a fair value for
the shares of the dissenting shareholders.106 If the company fails to apply to the
court to fix a fair value of the shares, a dissenting shareholder may, within a
further period of twenty days, apply to the court to have the fair value of the
shares of any dissenting shareholder fixed.107 Based on the wording of these
Acts, it does not appear that the court has power to extend the fixed time
period referred to therein.108
Directions by the court
Upon an application by either the company or a dissenting shareholder, the

court may direct a trial to determine whether any other person is a dissenting
shareholder who should be joined as a party to the action.109 After such
determination, the court is under a duty to enquire into and determine the
facts110 to enable it to fix a fair value for the shares of all dissenting
shareholders.111
Case law has interpreted this duty on the court to mean that there is no
onus of proof on any party before the court.112 However, since the information
relevant to fixing fair value is usually more accessible and readily available to
the company than to dissenting shareholders, the company is under an
obligation, as a first step, to supply all information necessary to assist the
court.113 Beyond this, the trial court has the power to require further or other
evidence from either or both parties.114
Appointment of appraiser
In discharging its duty to fix fair value, the court may appoint one or more
appraisers to assist it in fixing a fair value for the shares of the dissenting
shareholders.115 It bears emphasis that the court is given discretion to appoint
one or more appraisers but that the court is not required to do so.
It was held in Smeenk v Dexleigh Corpn116 that it is not part of the court’s
duty to obtain the necessary expert evidence to enable it to fix fair value, even
if one or more of the parties fail to do so. Accordingly, it was further held that
the court would not exercise its discretion to appoint an appraiser where one,
or both parties, has not presented expert evidence. To do so would encourage
applicants to bring frivolous applications for the purpose of extracting from
the company unwarranted increased share valuations and to rely on the courts
to obtain the evidence to support the applications.
Final order of the court
The final order of the court must be made against the company in favour of
each dissenting shareholder of the company and for the amount of the shares
of the dissenting shareholder as fixed by the court.117 The power of the court
to make a final order is limited to the application by the dissenting
shareholder in respect of the specific triggering event complained of.118
Power to allow a reasonable rate of interest

It is to be noted that the court has power to allow a reasonable rate of interest
on the amount payable to each dissenting shareholder.119 Where such interest
is allowed, it is calculated from the date the action approved by the resolution
is effective until the date of payment by the company.120
The rationale of these rules is that a dissenting shareholder is entitled to
receive payment on the valuation date. From that date, therefore, the
company has had the use of the shareholder’s money. Correspondingly, the
shareholder has been deprived of his money and the opportunity to earn a rate
of return on the same. Accordingly, the rules allow the court to fix interest at a
rate of return which more closely reflects what such shareholder would have
obtained by placing his funds in a long-term investment at the valuation date,
rather than at what it would have cost the company to borrow.121
The decision in Smeenk v Dexleigh Corpn122 on the award of interest in
fixing a fair value is important. In that case it was held that the court should
not exercise its discretion to require the company to pay interest on money
that it offered to pay at the outset and where the position of the dissenting
shareholder on the main issues is not justified or is unreasonable.
The justification for the Smeenk v Dexleigh Corpn123 rule is that the court’s
discretion as to interest is in part an instrument to distribute the financial
burden resulting from the court proceedings involved in fixing fair value. In
this regard, the parties must be reasonable: the company ought to be
encouraged to make its best offer of fair value, and the shareholder ought to
be encouraged to accept a reasonable offer. The court’s discretion to allow
interest ought to be exercised to achieve those objectives and to avoid fruitless
litigation by unreasonable parties. For these reasons, the court ought to look at
the reasonableness or otherwise of the mandatory offer, and the
reasonableness or otherwise of its rejection in deciding whether to allow
interest or not.
Fixing Fair Value Under the Bahamas Act
Section 168(9) of the Bahamas Act establishes a procedure for fixing fair value.
Under this provision, the right to invoke the fair value fixing procedure is
triggered if the company and a dissenting member, within the period of thirty
days immediately following an offer to purchase the shares of each dissenting
member made by the company, fail to agree on the price to be paid for the
shares owned by the member. Within twenty days of the triggering of this
right, the fair value fixing procedure becomes applicable.
The first step in this procedure is for the company and the dissenting
member each designating an appraiser.124 The next step is for the designated
appraisers to together designate a third appraiser.125 The third step is for the
three appraisers to fix the fair value of the shares owned by the dissenting
member.126
In fixing fair value, the appraisers must take the time for fixing such fair
value as the close of the business on the day prior to the date on which the
vote of the members authorising the action was taken.127 Alternatively, the
time may be taken as the date on which written consent of members without
a meeting authorising the action was obtained.128 In either case, any
appreciation or depreciation directly or indirectly induced by the action or its
proposal must be excluded.129 That value is binding on the company and the
dissenting member for all purposes.130
The fourth step is for the company to pay to the member the amount in
money upon the surrender by him of the certificates representing his shares.131
Conclusion
The appraisal remedy has introduced a novel corporate concept into
Commonwealth Caribbean company law. The remedy is intended to operate
as a device to reconcile the majority’s right to adjust the initial corporate
venture to changing economic conditions with the right of the minority to
refuse to participate in such adjustments. The difficult task for Commonwealth
Caribbean courts will be in fixing fair value in specific circumstances in a
manner that recognises the competing interests of the majority and the
minority.
Notes
1 Ant ss 226–235; B’dos ss 213–222; Dom ss 226–235; Gren ss 226–235; Mont ss 226–235; St L ss 226–235; St V
ss 226–235; T’dad ss 227–236.
2 Bah s 159.
3 Discussed below.
226(1); T’dad s 227(1).
5 Under Ant s 226(1); Bah s 159(1); B’dos s 213(1); Dom s 226(1); Gren s 226(1); Mont s 226(1); St L s 226(1); St
V s 226(1); T’dad s 227(1).
6 Under Ant ss 226(2) and 237(4)(c); Bah s 159(1)(e); B’dos ss 213(2) and 224(4)(c); Dom ss 226(2) and 237(4)(c);
Gren ss 226(2) and 237(4)(c); Mont ss 226(2) and 237(4)(c); St L ss 226(2) and 237(4)(c); St V ss 226(2) and
237(4)(c); T’dad ss 227(2) and 238(4)(c).
226(1); T’dad s 227(1).
8 Ant s 226(1)(a); B’dos s 213(1)(a); Dom s 226(1)(a); Gren 226(1)(a); Mont s 226(1)(a); St L s 226(1)(a); St V s
226(1)(a); T’dad s 227(1)(a).
226(1)(b); T’dad s 227(1)(b).
226(1)(c); T’dad s 227(1)(c).
226(1)(d); T’dad s 227(1)(d).
12 (1979) 8 BLR 180 BC SC.
13 (1987) 38 BLR 90 Sask CA.

15 Bah s 159(1)(a).
16 Bah s 159(1)(a). Discussed below at nn 124–131.
17 Discussed below at nn 124–131.
18 Bah s 159(1)(b).
19 Bah s 159(1)(c).
20 Bah s 159(1)(c)(i).
21 Bah s 159(1)(c)(ii).
22 Bah s 159(1)(c)(iii).
23 Bah s 159(1)(d).
24 Ant s 237(4)(c); Bah s 159(1)(e); B’dos s 224(4)(c); Dom s 237(4)(c); Gren s 237(4)(c); Mont s 237(4)(c); St L s
237(4)(c); St V s 237(4)(c); T’dad s 238(4)(c).
227(3).
26 See Ant s 236(7); B’dos s 223(7); Dom s 236(7); Gren s 236(7); Mont s 236(7); St L s 236(7); St V s 236(7); T’dad
s 237(7).
227(4).
28 Canadian Gas & Energy Fund v Sceptre Resource Ltd (1985) 29 BLR 178 Alta QB.
227(4).
227(4).
227(1).
32 [2002] 4 WWR 531 Alta QB. See also Arthur v Signun Communications Ltd (1993) 42 ACWS (3d) 332 Ont
Div Ct.
33 (1979) 99 DLR (3d) 513 SCC.

34 (2006) 12 BLR (4th) 189 Ont CA.
35 (2006) 12 BLR (4th) 180, 216 Ont CA.
36 There is a considerable number of articles in US law journals discussing the pros and cons of this remedy.
See, e.g., Lattin, ‘Minority and Dissenting Shareholders’ Rights in Fundamental Changes’ (1958) 23 Law and
Comtemp Problems 307; Manning, ‘The Shareholders’ Appraisal Remedy: An Essay for Frank Coker’
(1962) 72 Yale LJ 223; Vorenberg, ‘Exclusiveness of the Dissenting Shareholders’ Appraisal Right’ (1964) 77
Harv L Rev 1189; Eisenberg, ‘The Legal Roles of Shareholders and Management in Modern Corporate
Decision-making’ (1969) 57 Calif L Rev 1; Mahoney and Weinstein ‘The Appraisal Remedy and Merger
Premiums’ (1999) Amer Law & Econ Rev 239.
37 611 NW 2d 250(2000, Wis SC) at para 17.
38 Ford Motor Co of Canada v Ontario (Municipal Employees Retirement Board) (2006) 12 BLR (4th) 189 Ont
CA per Rosenberg JA.
39 For a discussion of this see Mahoney and Weinstein ‘The Appraisal Remedy and Merger Premiums’ (1999)
Amer Law & Econ Rev 239, 245.
40 See Manning, ‘The Shareholders’ Appraisal Remedy: An Essay for Frank Coker’ (1962) 72 Yale LJ 223, 240.
41 Mahoney and Weinstein, ‘The Appraisal Remedy and Merger Premiums’ (1999) Amer Law & Econ Rev 239,
246–247.
42 Folk, ‘De Facto Mergers in Delaware: Hariton v Arco Electronics Inc’ (1963) 49 Va LR 1261.
227(4).
44 [1978] 84 DLR (3d) 446 BC SC.
45 T’dad s 227(4).
46 See, e.g., Brant Investments Ltd v KeepRite Inc (1991) 3 OR (3d) 289 Ont CA; Smeenk v Dexleigh Corpn
(1990) 74 OR (2d) 385 Ont HC; LoCicero v BACM Industries (1988) 49 DLR (4th) 159 SCC.
47 (1990) 74 OR (2d) 136 Ont Gen Div.
48 (1980) 13 BLR 135 Que SC.
49 See Ashton Mining of Canada Inc v Kwantes (2007) 33 BLR (4th) 187 BC SC; Brant Investments Ltd v
KeepRite Inc (1991) 3 OR (3d) 289 Ont CA; Smeenk v Dexleigh Corpn (1990) 74 OR (2d) 385 Ont HC;
LoCicero v BACM Industries (1988) 49 DLR (4th) 159 SCC; Kelvin Energy Ltd v Bahan (1987) 52 Alta LR (2d)
71 Alta QB.
50 (1986) 33 DLR (4th) 641 BC CA. See also Smeenk v Dexleigh Corpn (1990) 74 OR (2d) 385 Ont HC; Ford
Motor Co of Canada v Ontario (Municipal Employees Retirement Board) (2006) 12 BLR (4th) 189 Ont CA; Re
Canadian Rocky Mountain Properties Inc (2006) 3 BLR 1 BC SC.
51 Re Canadian Rocky Mountain Properties Inc (2006) 3 BLR 1 BC SC.
52 (1977) 4 BCLR 134 BC CA.
53 [1985] 5 WWR 43 Alta QB.
54 [1978] 84 DLR (3d) 446 BC SC.
55 (1980) 10 BLR 135 BC SC.
56 (1980) 111 DLR (3d) 116 Sask QB. See also Lough v Canadian Resources Ltd (1985) 45 BCLR 335 SCC;
Canadian Gas & Energy Fund v Sceptre Resource Ltd (1985) 29 BLR 178 Alta QB.
57 (1980) 13 BLR 135 Que SC.
58 (1987) 52 Alta CR (2d) 71 Alta QB.
59 [1987] 1 WWR 86 SCC.
60 (1980) 13 BLR 135 Que SC, affd 22 BLR 121 Que CA.
61 (1982) 22BLR 139 Que SC.
62 LoCicero v BACM Industries (1988) 49 DLR (4th) 159 SCC; Brant Investments Ltd v KeepRite Inc (1991) 3 OR
(3d) 289 Ont CA; Westfair Foods Ltd v Watt (1992) 94 DLR (4th) 733 Alta CA.
63 (2006) 12 BLR (4th) 189 Ont CA.
227(1).
65 Ant s 226(5)(b); B’dos s 213(5)(b); Dom s 226(5)(b); Gren s 226(5); Mont s 226(5)(b); St L s 226(5)(b); St V s
226(5)(b); T’dad s 227(5)(b).
226(5)(b); T’dad s 227(5)(b).
67 Bah s 159(1).
68 Bah s 2.
69 (1979) 7 BLR 38 Man QB.
70 Silber v BGR Precious Metals Inc (1998) 46 BLR (2d) 75 Ont Gen Div.
226(6); T’dad s 227(6).
72 Ant s 226(6); Bah s 159(2): But note that the dissent must be sent ‘before’; B’dos s 213(6); Dom s 226(6); Gren
s 226(6); Mont s 226(6); St L s 226(6); St V s 226(6); T’dad s 227(6). See also Westmin Resources Ltd v
Hamilton [1991] 3 WWR 716 BC SC.
73 See Re Skye Resources Ltd and Camskye Holdings Inc (1982) 38 OR (2d) 253, affd (1983) 40 OR (2d) 416 Ont
CA; Fitch v Churchill Corpn (1990) 66 DLR (4th) 569 Alta CA.
74 Viz, Ant s 226(6); B’dos s 213(6); Dom s 226(6); Gren s 226(6); Mont s 226(6); St L s 226(6); St V s 226(6); T’dad
s 227(6).
75 Denischuk v Bonn Energy Corpn (1983) 29 Sask R 156 QB.
76 Ant s 226(7); Bah s 159(4): note that the period is ‘twenty days’; B’dos s 213(7); Dom s 226(7); Gren s 226(7);
226(7); T’dad s 227(7).
227(1); T’dad s 228(1).
79 Ant s 227(1)(a); Bah s 159(5)(a); B’dos s 214(1)(a); Dom s 227(1)(a); Gren s 227(1)(a); Mont s 227(1)(a); St L s
227(1)(a); St V s 227(1)(a); T’dad s 228(1)(a).
80 Ant s 227(1)(b); Bah s 159(5)(b); B’dos s 214(1)(b); Dom s 227(1)(b); Gren s 227(1)(b); Mont s 227(1)(b); St L s
227(1)(b); St V s 227(1)(b); T’dad s 228(1)(b).
81 Ant s 227(1)(c); Bah s 159(5)(c); B’dos s 214(1)(c); Dom s 227(1)(c); Gren s 227(1)(c); Mont s 227(1)(c); St L s
227(1)(c); St V s 227(1)(c); T’dad s 228(1)(c).
228(1). See also Westmin Resources Ltd v Hamilton [1991] 3 WWR 716 BC SC.
228(2).
228(4).
228(3).
86 (1979) 4 WWR 35 SCC.
87 Ant s 228; B’dos s 215; Dom s 228; Gren s 228; Mont s 228; St L s 228; St V s 228; T’dad s 229. See also
Alberta (Treasury Branches) v SevenWay Capital Corpn (1999) 92 ACWS (3d) 617 Alta QB.
88 Ant s 228(a); B’dos s 215(a); Dom s 228(a); Gren s 228(a); Mont s 228(a); St L s 228(a); St V s 228(a); T’dad s
229(a).
89 Ant s 228(b); B’dos s 215(b); Dom s 228(b); Gren s 228(b); Mont s 228(b); St L s 228(b); St V s 228(b); T’dad s
229(b).
90 Ant s 228(c)(i); B’dos s 215(c)(i); Dom s 228(c)(i); Gren s 228(c)(i); Mont s 228(c)(i); St L s 228(c)(i); St V s
228(c)(i); T’dad s 229(c)(i).
91 Ant s 228(c)(ii); B’dos s 215(c)(ii); Dom s 228(c)(ii); Gren s 228(c)(ii); Mont s 228(c)(ii); St L s 228(c)(ii); St V s
228(c)(ii); T’dad s 229(c)(ii).
92 Ant s 228(c)(iii); B’dos s 215(c)(iii); Dom s 228(c)(iii); Gren s 228(c)(iii); Mont s 228(c)(iii); St L s 228(c)(iii); St
V s 228(c)(iii); T’dad s 229(c)(iii).
93 Ant s 228; B’dos s 215; Dom s 228; Gren s 228; Mont s 228; St L s 228; St V s 228; T’dad s 229.
229(1)(a); T’dad s 230(1)(a).
229(1)(a); T’dad s 230(1)(a).
230(1).
97 Ant 235; B’dos s 222; Dom s 235; Gren s 235; Mont s 235; St L s 235; St V s 235; T’dad s 236.
235(1). And see Denischuk v Bonn Energy Corpn (1983) 29 Sask R 156 Sask QB; Smeenk v Dexleigh Corpn
(1990) 74 OR (2d) 385 Ont HC.
235(2).
234(2)(a); T’dad s 235(2)(a).
234(2)(a); T’dad s 235(2)(a).
234(2)(b); T’dad s 235(2)(b).
230(2).
230(3).
230(3).
231(1).
231(1). And see Smeenk v Dexleigh Corpn (1990) 74 OR (2d) 385 Ont HC.
108 Contra, Denischuk v Bonn Energy Corpn (1983) 29 Sask R 156 Sask QB where the relevant Act provided for
application to the court ‘within such further period as a court may allow’.
233(1).
110 Domglas Inc v Jarislowsky, Fraser & Co (1980) 13 BLR 135 Que SC, affd 22 BLR 121 Que CA.
111 Ant s 232(1); B’dos s 219(1); Dom s 232(1); St L s 232(1); St V s 232(1); T’dad s 233(1).
112 Ultramar Canada Inc v Montrreal Pipeline Ltd (1990) 74 OR (2d) 136 Ont HC; additional reasons at (1990) 75
OR (2d) 184 Ont Gen Div.
113 Robertson v Canadian Canners Ltd (1978) 4 BLR 90 Ont HC; Denischuk v Bonn Energy Corpn (1983) 29 Sask
R 156 Sask QB.
114 Denischuk v Bonn Energy Corpn (1983) 29 Sask R 156 Sask QB.
233(2).
116 (1990) 74 OR (2d) 385 Ont HC.
233(3).
118 Re Sabex Internationale Ltee (1979) 6 BLR 65 Que SC.
121 Domglas Inc v Jarislowsky, Fraser & Co (1980) 13 BLR 135 Que SC, affd 22 BLR 121 Que CA; LoCicero v
BACM Industries (1988) 49 DLR (4th) 159 SCC.
122 (1990) 74 OR (2d) 385 Ont HC, affd (1993) 105 DLR (4th) 193 Ont CA.
123 Ibid.
124 Bah s 159(9)(a).
125 Bah s 159(9)(b).
126 Bah s 159(9)(c).
127 Bah s 159(9)(c).
128 Bah s 159(9)(c).
129 Bah s 159(9)(c).
130 Bah s 159(9)(c).
131 Bah s 159(9)(d).

Chapter 19
Prospectuses
Introduction
One of the major economic justifications for the company is that it provides a
mechanism for facilitating business ventures. Suitable arrangements must,
however, be made to provide the company with capital to undertake its
business ventures. Sometimes, even though rarely, a company may be formed
to undertake a large-scale business venture. Where this happens it may be
difficult to raise private capital and thus it becomes necessary for the company
to offer its securities (its shares or debentures) to the public. More often than
not, however, it is existing companies which undertake new business ventures
and which find it necessary to offer shares and debentures to the public in
order to obtain the additional capital it may require to finance the venture.
This chapter examines the requirement to provide a prospectus where a
company proposes to use its securities to raise capital from the public.
A caveat must be immediately entered, however. The law relating to
corporate prospectuses forms part of the wider specialised subject area of
securities regulation or capital markets law. Indeed, in the Bahamas and
Trinidad and Tobago, the only law on corporate prospectuses to be found is
the Securities Industries Acts. Except in the Bahamas and Trinidad and
Tobago, though, the main rules governing the raising of capital by companies
from the public are contained in prospectus provisions in regional Companies
Acts. These provisions are to be found in the Part of the Acts in Anguilla,
Vincent which is headed ‘Protection of Creditors and Investors’. In Belize, in
Part III in provisions headed ‘Prospectus’ in Jamaica, in the prospectus
provisions in Part II of the Act in Jamaica which is headed ‘Share Capital and
Debentures’; and in St Christopher/Nevis, in Part VII of the Act in St
Christopher/Nevis in the provisions headed ‘Prospectuses’.
Given that the law on prospectuses forms part of the highly specialised
subject area of securities regulation, it cannot be addressed in the kind of
intricate detail it deserves in a book of this nature. Be that as it may, the
presence of the extensive provisions on prospectuses in regional Companies
Acts makes it imperative that a thorough examination of those provisions is
undertaken. That examination is the subject matter of this chapter.
Prospectus Provisions
Aims and objectives of the prospectus provisions
A company, be it a company being formed or an existing company which

wishes to raise capital from the public, must comply with the rules of law in
the Companies Acts as well as the relevant requirements in securities statutes,
where they exist.1 The rules are complex and may be better understood
against the backdrop of their basic aims and objectives.
It is undoubted that the rules on prospectuses in the Companies Acts in the
Commonwealth Caribbean are aimed at ensuring that a company discloses to
the investing public reliable information that is considered critical in assessing
the risk in investing in the securities, shares and debentures which the
company is offering to the public. The interplay between the company’s right
to offer its securities to the public, and the public’s right to reliable information
on such securities in the prospectus which is inviting the public to invest, is
admirably captured in an early statement of Lord Chelmsford in the English
House of Lords in Directors, Central Ry Co of Venezuela v Kisch, where he
said:2
But although, in its introduction to the public, some high colouring, and even exaggeration, in the
description of the advantages which are likely to be enjoyed by the subscribers to an undertaking, may be
expected, yet no misstatement or concealment of any material facts or circumstances ought to be
permitted. In my opinion, the public, who are invited by a prospectus to join in any new adventure, ought
to have the opportunity of judging of everything which has a material bearing on its true character, as the
promoters themselves possess. It cannot be too frequently or too strongly impressed upon those who,
having projected any undertaking, are desirous of obtaining the co-operation of persons who have no other
information on the subject than that which they choose to convey, that the utmost candour and honesty
ought to characterise their published statements. As was said by Vice-Chancellor Kindersley in the case of
New Brunswick and Canada Railway Co v Muggerigde 1 Dr & Sm 381
‘those who issue a prospectus holding out to the public the great advantages which will accrue to
persons who will take shares in a proposed undertaking, and inviting them to take shares on the faith
of the representations therein contained, are bound to state everything with strict and scrupulous
accuracy, no one fact within their knowledge the existence of which might in any degree affect the
nature, or extent, or quality of the privileges and advantages which the prospectus holds out as
inducements to take shares’.
The provisions in Commonwealth Caribbean Companies Acts on prospectuses

are best examined against this backdrop.
What is a prospectus?
Basically, a prospectus is a document which must be given to investors who

are being invited to apply or to offer to subscribe for or to purchase the
company’s shares or debentures, or to whom the company’s shares or
debentures are being offered for subscription or purchase. A prospectus is the
document which is intended to provide information relevant to an assessment
of whether or not to invest in these shares or debentures.
A prospectus is statutorily defined in the Companies Acts in Anguilla,
Vincent, as including ‘in relation to a company, any notice, prospectus, or other
document that (i) invites applications from the public, or invites offers from
the public, to subscribe for or purchase, or (ii) offers to the public for
subscription or purchase, directly or through other persons, any shares or
debentures of the company or any units of any shares or debentures of the
company’.3
It is clear from this definition of a prospectus, and in particular the words
‘any notice, prospectus or other document’, that a prospectus must be in
writing. An oral invitation to subscribe for or to purchase shares or debentures
seems to be clearly not a prospectus. By the same token, a television, internet
or film advertisement, because it is not a ‘document’, is not a prospectus either.
Such an advertisement would fall to be treated as a ‘notice’ and consequently
be subject to the rules discussed below on ‘notices.4 It is clear from this
definition also, that a document cannot be a prospectus unless it seeks to
induce the public to subscribe for or to purchase shares or debentures of a
company.
In the Belizean and Jamaican Acts, a prospectus is defined more broadly. In
these Acts, a prospectus is defined as meaning ‘prospectus, notice, circular,
advertisement, or other invitation, offering to the public for subscription or
purchase any shares or debentures of a company’.5 Under this definition, it
appears that a prospectus need not be in writing but may include an oral
invitation to subscribe or purchase shares or debentures. It may also include
television, internet or film advertisement. It may be noted that in St
Christopher/Nevis the definition is even wider and includes any invitation to
the public to acquire or apply for any shares or debentures or interests or
rights in any of a corporate body.6
Contents of a prospectus
A prospectus must include certain statutorily specified matters. These include

the following.
Dating of prospectus
In Anguilla, Antigua, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica,

Montserrat, St Lucia and St Vincent, the prospectus must be dated, and that
date, unless there is proof to the contrary, is to be taken as the date of the issue
of the prospectus.7
Statement on lodgment of prospectus with Registrar
In Antigua, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica,

Montserrat, St Lucia and St Vincent a copy of the prospectus must be lodged
with the Registrar and the pro-spectus must set out that a copy has been so
lodged.8 In Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St
Lucia and St Vincent, the prospectus must also state immediately thereafter
that the Registrar takes no responsibility as to the validity or veracity of its
contents.9
Statement on allotment of securities after date of issue of

prospectus
In Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St

Lucia and St Vincent, the prospectus must contain a statement that no shares
and debentures, or either, are to be allotted on the basis of the prospectus later
than three months after the date of issue of the prospectus.10
Statement in respect of copy from report from expert
If the prospectus contains any statement by an expert made or contained in

what purports to be a copy of or an extract from a report, memorandum or
valuation, then, in Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia and St Vincent, the date on which the statement, report,
memorandum or valuation was made must be stated in the prospectus.11 It
must also be stated in the prospectus whether or not the statement by the
expert was prepared by the expert for incorporation in the prospectus.12
Statement on commission authorised by directors
In Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia and

St Vincent, the prospectus must disclose any commission authorised by the
directors payable to persons in consideration of their purchasing or agreeing to
purchase shares of the company, or procuring or agreeing to procure
purchasers for any such shares.13
Other prescribed matters
In addition to the foregoing, in Antigua, Barbados, Dominica, Grenada,

Guyana, Montserrat, St Lucia and St Vincent, the prospectus must contain such
other matters as are prescribed.14
Matters that may not be included
The Companies Acts in the Commonwealth Caribbean which contain

prospectus provisions also prohibit the inclusion of certain statutorily specified
matters as follows.
Professional names of experts
The statutes in Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St

Lucia and St Vincent stipulate against certain professional names of experts
being included in a prospectus without relevant consent.15 It is stipulated in
these Acts that a prospectus must not contain the name of any person as
trustee for holders of debentures or as an auditor, a banker, an attorney-at-law,
a stockbroker, of the company or proposed company or for or in relation to
the issue or proposed issue of shares or debentures, unless that person
consented in writing, before the issue of the prospectus, to act in that capacity
in relation to the prospectus.16 A copy of the consent, verified by affidavit or
affirmation, must also have been lodged with the Registrar.17
The statements of experts
It is provided in the Acts in Antigua, Barbados, Dominica, Grenada, Guyana,

Jamaica,
Montserrat, St Lucia and St Vincent that a prospectus may not include a
statement purporting to be made by an expert unless he gives his written
consent to the statement in the form and context in which it is included in the
prospectus and does not withdraw it before delivery of a copy of the
prospectus for registration.18 A statement must also be included in the
prospectus that the expert has given and has not withdrawn his consent.19 It
should be noted that in Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia and St Vincent, but not in Jamaica, the fact that an expert
has consented to the inclusion of a statement is not to be treated as his having
authorised or caused the issue of the prospectus.20
Void conditions
Either of two conditions included in a prospectus in Antigua, Barbados,

Dominica, Grenada, Guyana, Jamaica, Montserrat, St Lucia and St Vincent is
statutorily declared to be void.21 One such condition is a condition which
purports to require or bind an applicant for shares or debentures of a company
to waive compliance with any statutory prospectus requirement.22 The other is
a clause which purports to affect the applicant with notice of any contract
document or matter not specifically referred to in the prospectus.23
When is a prospectus required?
It is statutorily stipulated in Antigua, Barbados, Dominica, Grenada, Guyana,

Montserrat, St Lucia and St Vincent that any person issuing any form of
application in connection with shares or debentures that are offered to the
public or that are intended for the public24 must register a prospectus with the
Registrar.25 A copy of the prospectus must also be issued with the form of
application or the form must specify a place in the territory in question where
a copy of the prospectus can be obtained.26 The reference to prospectus in this
stipulation means that the stipulation must be interpreted in light of the
statutory definition of prospectus. As has already been seen, a prospectus is
statutorily defined as a document which invites applications or offers from the
public to subscribe for or to purchase the company’s securities or which offers
the company’s securities for subscription or purchase by the public, directly or
through other persons.27
It is clear from the stipulation in the foregoing statutory provisions that
when once four requirements relating to an invitation or offer in connection
with shares or debentures are satisfied, the obligation to comply with the
prospectus provisions is triggered. These requirements are that there is (i) an
invitation or offer, (ii) to the public, (iii) to subscribe or purchase (iv) the shares
or debentures of the company. These requirements will be examined
separately in detail.
Invitations or offers
The first requirement that must obtain to trigger the prospectus provisions is
that there must be an invitation or offer made to the public.28 In practice,
companies employ a number of methods in offering for sale their shares and
debentures in raising capital.29 It is important therefore to consider the most-
often used of these methods with a view to determining which of them are to
be classified as invitations or offers.
Direct offers
A company may market its shares and debentures by way of a direct offer to
the public. Such an offer undoubtedly falls squarely within the statutory
definition of an offer in Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia and St Vincent as an offer made ‘directly’ by the
company.30
An example of a direct offer is where the company itself makes a direct
offer to the public by publishing a prospectus inviting subscriptions of an issue
of its shares and debentures. With a direct offer, the company bears the risk of
the issue failing and consequently usually arranges for the issue to be
underwritten. In practice, this means that the company will negotiate an
‘underwriting agreement’ wherein such matters as the obligations of the
underwriter, various covenants and representations of the company, and
conditions pertaining to the underwriter’s obligations and rights of
termination are set out. With larger issues of shares and debentures, an
underwriter may choose to spread the risk by syndicating the underwriting.
The method of marketing shares and debentures by direct offer to the
public was formerly the normal procedure but is used less and less today. Be
that as it may, a direct offer is still sometimes used by large companies in a
rights issue. This method is employed in a rights issue since, in a rights issue
the companies are issuing shares to their existing shareholders and can
therefore access potential purchasers from amongst their own shareholders. In
this way, the cost of hiring someone to sell the issue may be avoided.
Offer for sale or ‘bought deal’
A second method used by companies in the marketing of their shares and

debentures is an offer for sale or, as it is sometimes called, a ‘bought deal’. An
offer for sale is where the offer of shares or debentures to the public is not by
the company itself but by an existing shareholder or debenture-holder. In
practice this usually occurs where the company sells the shares or debentures
to an underwriter, who then offers them for sale to the public. With an offer
for sale or bought deal, the company bears no responsibility for the market
risk associated with the potential variation in price of the shares or debentures
during the period in which they are being distributed, since the underwriter is
contractually bound to subscribe for the whole issue of the shares or
debentures. However, the market risk is usually shared by the company
through a ‘market out’ clause. This is a clause which provides that if certain
specified events occur, for example, a material change in the affairs of the
company, or if a cease and desist order is issued by a regulatory body, then the
underwriter may not be obliged to take up the issue at the specified price.
Ex facie, an offer for sale may not be an offer made directly by the
company or indirectly by the company through other persons. However, the
Acts in Antigua, Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat,
St Lucia and St Vincent include a section which provides as follows:31
When a company allots or agrees to allot to any person shares or debentures of the company with a view
to all or any of those shares or debentures being offered to the public, the document by which the offer for
the sale to the public is made is for all purposes deemed to be a prospectus issued by the company; and all
enactments and rules of law as to the contents of prospectuses or otherwise relating to prospectuses, apply
and have effect accordingly as if the shares or debentures had been offered to the public and as if the
persons accepting the offer in respect of the issue of shares or debentures were subscribers for them, but
without affecting the liability, if any, of the person by whom the offer is made, in respect of statements or
non-disclosures in the document or otherwise.
This deeming section without doubt extends the meaning of prospectuses with
the effect that an offer for sale is an offer made by the company through
others.
Placings
Shares and debentures in a company may be marketed by yet another

method, known as a placing. A placing is a procedure under which the
company arranges for the broker sponsoring the issue to ‘place’ shares or
debentures with persons, usually institutional investors, interested in acquiring
these securities. The broker may purchase the shares or debentures from the
company and place them with its clients interested in acquiring these
securities, or, alternatively, the broker may place these securities without itself
purchasing them. The first alternative is in effect very similar to an offer for
sale except that the securities are placed privately, while the second is akin to
a direct offer to private persons instead of to the public.
A placing like an offer for sale is not without more an offer made directly
by the company or by the company through others. However, the deeming
section just discussed in relation to offers for sale has the effect that a placing
is deemed an offer made by the company through others within the extended
meaning of prospectuses.
Rights issues
A rights issue is where a company grants ‘rights’ to its existing shareholders to

buy additional shares at a subscription price on or before a specified date, the
exercise date, in proportion to their existing shareholding. The normal
procedure is for the shares to be offered to the existing shareholders at a
discount to the current market rate to encourage the exercise of the rights.
Rights to buy shares of a public company are offered to shareholders in a
letter of allotment which is normally renounceable. This means that a
shareholder who is granted rights may hold the rights and exercise them
before the exercise date or may sell the rights. Rights to buy may also be
offered to shareholders in a letter which is non-renounceable. Shareholders
who are granted such rights may exercise them before the exercise date, but
may not sell the rights.
As has been seen, rights issues are normally done by a direct offer by or on
behalf of the company to existing shareholders. They therefore fall within the
meaning of offer for sale and as such are capable of triggering the prospectus
requirements.
Conversion issues
A conversion issue is a variation of a rights issue. A conversion issue occurs

when the holders of one type of convertible corporate security is granted the
right to convert that security into corporate securities of another type as an
alternative to redemption. A good example of this is where debentures give
their holders the right to surrender the debentures held by them to the
company for ordinary shares of the company. In such a case, the offer of the
right is not made by a general invitation to the public but rather, as with a
rights issue, by an offer circular to the debenture-holders concerned. As with
rights issue, a conversion issue normally involves a direct offer by or on behalf
of the company
The ‘public’
The second condition necessary for the prospectus requirements to apply is

that the offer or invitation must be made to the ‘public’. The expression the
‘public’ is statutorily defined in the relevant the Acts as including ‘any section
of the public, whether selected as clients of the person issuing the prospectus
or in any other manner.’32 This definition is extremely wide. Indeed, without
more, it embraces invitations to participate in non-renounceable rights issues,33
conversion34 or bonus issues,35 as well as offers to place securities with the
clients of a broker.36 The breadth of this definition is, however, narrowed by
subsection (2) of the relevant section in the Acts in Anguilla, Antigua,
Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat, St Lucia and St
Vincent which provides as follows:37
Subsection (1) does not require that any offer or invitation be treated as being made to the public if the
offer or invitation can properly be regarded, in all the circumstances, as not being calculated to result,
directly or indirectly, in the shares or debentures becoming available for subscription or purchase by
persons other than those receiving the offer or invitation, or otherwise as being a domestic concern of the
persons making or receiving the offer or invitation.
This subsection makes it clear that an offer which is restricted to those

receiving it or which may be regarded as of ‘domestic concern’ is not an offer
to the public. This means, for instance, that an offer which can only be
accepted by the shareholders of a particular company (as, for instance, a non-
renounceable rights offer) is not an offer to the public.38 By the same token,
the provision makes it clear that an offer of shares or debentures in a public
company to a limited number of persons may be a public offer if it can be
regarded in all the circumstances as being calculated to result in the shares or
debentures becoming available for subscription or purchase by persons other
than those receiving the initial offer.
Under this provision also, where an offer to subscribe for or purchase shares
or debentures is a matter of ‘domestic concern’, it is not an offer to the public.
The expression ‘domestic concern’ has not been precisely defined. It is
thought, however, to contemplate private offers and invitations. An example
of this would be a private placing, where the directors of a company approach
a limited number of prospective investors to subscribe for or to purchase
shares or debentures of the company. Another example would be an offer to
place shares or debentures with the clients of a broker or merchant bank.
Offer to ‘subscribe or purchase’
The third requirement for the prospectus provisions to apply is that the offer
must be to ‘subscribe or purchase’ shares or debentures of the company. Case
law has interpreted ‘subscribe’ to mean the acquisition of securities by
allotment from the company for a cash payment, and ‘purchase’ a subsequent
acquisition from the original allotee or a subsequent holder also for a cash
payment.39 The logical consequence of this is that where shares or debentures
of a company are issued for a non-cash consideration the prospectus
requirements do not apply as there is by definition no offer to ‘subscribe or
purchase’.
Offer must relate to ‘shares or debentures’
The fourth requirement for the prospectus provisions to apply is that the offer
or invitation must relate to ‘shares and debentures of a company’. The
expression ‘share’ is defined in the Acts merely as including stock. However,
all the Acts contain extensive provisions on shares. ‘Debenture’, on the other
hand, is defined in the Acts as including ‘debenture stock and any bond or
other instrument evidencing an obligation or guarantee, whether secured or
not’.40
Notices Provisions
General prohibition against notices
There is a general prohibition in the Acts in Antigua, Barbados, Dominica,

Grenada, Guyana, Montserrat, St Lucia and St Vincent against any person
issuing any notice (defined as including any circular or advertisement)41 that
offers, for subscription or purchase, shares or debenture of a company or
invites subscription for, or purchase of, any such shares or debentures.42
Similarly, a person is prohibited from issuing any notice that calls attention to
(i) an offer, or intended offer, for subscription or purchase of shares or
debentures of a company;43 (ii) an invitation, or intended invitation, to
subscribe for or purchase any such shares or debentures;44 or (iii) a
prospectus.45
Exceptions to the prohibition
There are a number of notices to which the general prohibition does not
apply.46 It does not apply to a notice that relates to an offer or invitation not
made or issued to the public, directly or indirectly;47 nor does it apply to a
registered prospectus.48 It also does not apply to a notice that calls attention to
a registered prospectus,49 states that allotments of, or contracts with respect to,
the shares or debentures will be made only on the basis of one of the forms of
applications referred to in, and attached to, a copy of the prospectus,50 and that
contains no other information except the following:51
(i) the number and description of the shares or debentures of the

company to which the prospectus relates;52
(ii) the name of the company, the date of its incorporation and the
number of the company’s issued shares and the amount paid on its
issued shares;53
(iii) the general nature of the company’s main business, or its proposed
main business;54
(iv) the names addresses and occupations of the directors of the
company;55
(v) the names and addresses of the brokers or underwriters, if any, to the
issue of the shares or debentures or both, and, if the prospectus relates
to debentures, the name and address of the trustee for the debenture-
holders;56
(vi) the name of any stock or securities exchange of which the brokers or
underwriters to the issue are members;57
(vii) the particulars of the period during which the offer is effective;58
(viii) the particulars of the time and place at which copies of the
prospectus and form of application for the shares or debentures to
which it relates can be obtained.59
These notices to which the general prohibition does not apply may be
conveniently called excepted notices.
Finally, the general prohibition does not apply to a notice which
accompanies an excepted notice.60 For the general prohibition not to apply to
a notice which accompanies an excepted notice, the notice must be issued by a
person whose ordinary business is or includes advising clients in connection
with their investments and must be issued only to clients so advised in the
course of business.61 The notice must also contain a statement that the
investment to which it or the excepted notice relates is recommended by that
person.62 Finally, if the person issuing the notice is an underwriter or sub-
underwriter of an issue of shares or debentures to which the notice or
excepted notice relates, the notice must contain a statement that the person
making the recommendation is interested in the success of the issue as an
underwriter or sub-underwriter, as the case may be.63
Application of the notices rules
The rules on notices apply to any notice issued in the territory concerned by
newspapers, or by radio or television broadcasting, or by cinematograph or
any other means.64
Certificate of non-contravention of notices rules
Where a person issues a notice in contravention of the rules on notices, he may

be deemed not to have done so, if before doing so he obtains a certificate
which satisfies specified statutory requirements.65 First, the certificate must be
signed by two directors of the company or two directors of the proposed
company to which, or to the shares or debentures of which, the notice
relates.66 Secondly, it must specify the names of the directors and the company
or the proposed directors of the proposed company.67 Finally, the certificate
must be to the effect that the general statutory prohibition against notices does
not apply because of the operation of the statutory exceptions to the general
prohibition.68 Where a certificate satisfying these requirements is obtained,
each person who signed the certificate is deemed to have issued the notice,
and not the person who obtained the certificate.69
A certificate also has certain evidential value in proceedings for a
contravention of the rules governing the issuing of a notice.70 First of all, it is
prima facie proof that at the time the certificate was given, the persons named
as such in the certificate were directors of the company so named, or proposed
directors of the proposed company so named, as the case may be.71 Secondly,
the certificate is prima facie proof that the signatures in the certificate
purporting to be the signatures of those persons are their signatures.72 Finally,
the certificate is prima facie proof that publication of the notice to which the
certificate relates was authorised by those persons.73
Registration of Prospectus
Requirement for registration
Under the Companies Acts in Antigua, Barbados, Belize, Dominica, Grenada,

Guyana, Jamaica, Montserrat, St Lucia and St Vincent a prospectus may not be
issued unless a copy of it has first been registered by the Registrar.74 The
prospectus must then state on its face the fact of such registration and the date
on which registration was effected.75
Conditions to be satisfied for registration
In Antigua, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica,

Montserrat, St Lucia and St Vincent the Registrar may not register a copy of a
prospectus unless certain statutorily specified conditions are satisfied.76 First, a
copy of the prospectus must be lodged with the Registrar on or before the
date of its issue. It must be signed by every director and by every person who
is named in the prospectus as a proposed director of the company or by his
agent authorised in writing.77 Second, the prospectus must comply with the
requirements of the Acts.78 Third, there must also be lodged with the Registrar
copies of any consents of experts required under the Acts to the issue of the
prospectus.79 Similarly, copies of all material contracts referred to in the
prospectus or, where the contract is not in writing, a memorandum giving full
particulars of the contract must be lodged.80 Fourth and finally, the Registrar
must be of the opinion that the prospectus does not contain any statement or
matter that is misleading in any form or context in which it is included.81
Refusal of registration by Registrar

The Companies Acts in Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia and St Vincent contain provisions on the refusal of the
Registrar to register a prospectus. Under these Acts, if the Registrar refuses to
register a prospectus, he must give notice of this refusal to the person who
lodged the prospectus, giving in the notice the reasons for the refusal.82 By the
same token, if the Registrar registers a prospectus, he must give notice of that
fact to the person who lodged the prospectus.83 The notice must state the date
on which the registration was effected.84
A person who lodged a prospectus with the Registrar may, within thirty
days after he is notified of a refusal by the Registrar to register the prospectus,
require in writing that the Registrar refer the matter to the court.85 Where this
is done, the Registrar must refer the matter to the court for its determination.86
Where a refusal is referred to the court, the court may, after hearing the
person who lodged the prospectus, and if the court so wishes, the Registrar,
order the Registrar to register the prospectus.87 Alternatively, the court may
uphold the Registrar’s decision to refuse registration.88 The person who lodged
the complaint may be heard in person or by an attorney-at-law.89
Prospectus Presumed
Under the Acts in Antigua, Barbados, Dominica, Grenada, Guyana, Jamaica,
Montserrat, St Lucia and St Vincent, when a company allots or agrees to allot
to any person shares or debentures of the company with a view to any or all
of those shares or debentures being offered to the public, the document by
which the offer for sale to the public is made is for all purposes deemed to be
a prospectus issued by the company.90 In consequence, all the enactments and
rules of law as to the contents of prospectuses or otherwise relating to
prospectuses, apply as if the shares or debentures had been offered to the
public and as if the persons accepting the offer in respect of the shares and
debentures were subscribers for them.91 Any liability of the person by whom
the offer is made in respect of statements or non-disclosure in the document or
otherwise is, however, not affected.92
It is proof that an allotment of or an agreement to allot shares or debentures
of a company was made with a view to the shares or debentures being offered
to the public if either of two things are satisfied.93 The first is that the offer for
sale of the shares or debentures, or any of them, to the public was made
within six months after the allotment or agreement to allot.94 The second is
that at the date when the offer was made the whole consideration to be
received by the company in respect of the shares or debentures had not been
so received.95
The requirements set out in the Acts in respect of prospectuses are to have
effect as though the persons named in the document by which the offer for
sale to the public which is presumed a prospectus was made were persons
named in a prospectus as directors of the company.96 In addition to complying
with the requirements under the Acts as to prospectuses, the document
making the offer must set out the net amount of the consideration received or
to be received by the company in respect of the shares or debentures to which
the offer relates.97 The document must also set out the place and time at which
the contract under which the shares or debentures have been or are to be
allotted can be inspected.98
If an offer is made in a document making an offer to the public which is
presumed to be a prospectus by a company or a firm, it is sufficient if the
document is signed on behalf of the company or firm by two directors of the
company or not less than half the members of the firm.99 It is to be noted that
a director or member may sign by his agent authorised in writing to do so.100
Contracts to Subscribe for or Purchase Shares or
Debentures in a Prospectus
Making the contract
The legal effect of a transaction to subscribe for or purchase shares or

debentures offered by a company in a prospectus is governed by the ordinary
rules of the law of contract except where modified by the Companies Acts. On
the ordinary rules of the law of contract, when an offer of shares or
debentures for subscription or purchase is made in a prospectus, it constitutes
in law nothing more than an invitation to treat. It is the application form filled
in by the investor interested in acquiring shares or debentures for a particular
number of shares or debentures submitted to the company or issuing house
which constitutes the offer.101
This offer, like any other offer, lapses unless it is accepted within a
reasonable time, and may also be revoked at any time before it is accepted by
the company or issuing house.102 By the same token, it may either be rejected
or accepted by the company or issuing house. Acceptance occurs where the
shares or debentures applied for by the investor are allotted by the company
or issuing house and the investor is sent a letter of acceptance which is
normally renounceable.
Subscription lists
The acceptance of applications by the company or issuing house and the

revocation of applications by investors are subject to a timetable established
under the Acts in Antigua, Barbados, Dominica, Grenada, Guyana, Jamaica,
Montserrat, St Lucia and St Vincent for the opening of the subscription lists
and the revoking of applications when a prospectus is issued generally.103 This
statutory timetable is imposed to, first of all, give investors an opportunity to
assess the financial merits of the shares or debentures offered in the
prospectus, and secondly to stymie the abuse known as ‘stagging’. This abuse
occurs where an applicant does not intend to retain and pay for the securities
for which he applies. Instead, his intention is to speculate on the shares or
debentures by selling them as soon as they have been allotted to him if they
go to a premium on the market, and reimbursing himself out of the price paid
by the purchaser of them, or by revoking his application for the shares or
debentures before they are allotted where the shares or debentures go to a
discount.
In furtherance of the objective of giving applicants time to assess the merits
of the shares or debentures offered by the company, the Acts decree that no
allotment may be made of any shares or debentures of a company in
pursuance of a prospectus, and no proceedings may be taken on applications
made in pursuance of a prospectus, until the beginning of the fifth day104 after
that on which the prospectus was first issued or on such later time as is
specified in the prospectus.105 The beginning of the fifth day106 or specified
later time is called the ‘time of the opening of the subscription lists’.107
Except in the Jamaican Act, where an allotment is made before the time of
the opening of the subscription lists, it is void.108 Such an allotment does not,
however, affect an allotment of the shares or debentures later made to the
same applicant.109 In Jamaica, such an allotment does not affect the validity of
the allotment.110 However, it renders every officer of the company who is in
default liable to a fine not exceeding fifty thousand dollars.111
In respect of revocation of applications, the Acts provide that an application
for shares or debentures of a company may not be revoked until after the
expiration of the fifth day112 from the time of the opening of the subscription
lists, unless in the meantime a person responsible under the Acts for the
prospectus gives, before the expiration of the fifth day,113 a public notice
having the effect of excluding or limiting the responsibility of the person
giving it.114 The practical effect of this provision is to render applications under
prospectuses irrevocable in the absence of such a public notice by a person
responsible for the prospectus.
Minimum subscription
Acceptance of applications is also subject to provisions in the Acts in Anguilla,

Antigua, Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat, St Lucia
and St Vincent designed to ensure that the company will raise adequate capital
by its first issue of shares to give its business a fighting chance of success. In
this regard, a basic stipulation found in all the Acts in these territories is that,
unless all the shares or debentures offered for subscription by a prospectus
issued to the public are underwritten, the prospectus must state the minimum
amount of money required to be raised by the company issuing the shares or
debentures.115 This is called in the Acts the ‘minimum subscription’.116 In
Jamaica, the requirement to state the minimum subscription is found in section
2 of the Third Schedule to the Act.
The objective of the minimum subscription requirement is to deal with the
problem of companies allotting shares offered to the public even in a situation
where the capital raised by issuing such shares is insufficient to carry on the
company’s business after paying the expenses of promoting the company. The
minimum subscription provisions in these Acts do not necessarily prevent this
from occurring. The provisions, however, do allow subscribers an opportunity
to assess the adequacy of the initial capitalisation of the company.
Montserrat, St Lucia and St Vincent, an allotment of any shares or debentures
of a company that are offered to the public may not be made unless the
minimum subscription has been subscribed and the sum payable on
application for the shares or debentures has been received by the company.117
Where a cheque for the sum payable has been received by the company, the
sum is deemed not to have been received by the company until the cheque is
paid by the bank on which it is drawn in all of these territories except
Jamaica.118 In Jamaica, the sum is deemed to have been paid to and received
by the company if the cheque for that amount has been received in good faith
by the company and the directors of the company have no reason for
suspecting that the cheque will not be paid.119
If the minimum subscription is not subscribed within forty days after the
first issue of the prospectus, all moneys received from applicants for any
shares or debentures must be forthwith repaid to them without interest. If the
moneys are not repaid within forty days after the issue of the prospectus, the
directors of the company are jointly and severally liable to repay that money
with interest at the rate of 6 per cent per annum from the expiration of the
forty-eighth day.120 A director may, however, escape liability by showing that
the default in repayment of the moneys was not due to any default or
negligence on his part.121
Under all the Acts with minimum subscription provisions also, any
condition that purports to require or bind an applicant for shares or debentures
to waive compliance with the minimum subscription requirements is void.122 It
is to be noted that the minimum subscription requirements do not apply to the
allotment of shares subsequent to the first allotment of shares offered to the
public for subscription.123
Montserrat, St Lucia and St Vincent, all application money and other moneys
paid prior to an allotment by an applicant on account of shares or debentures
offered to the public must, until the allotment of the shares or debentures, be
held by the company.124 In the case of an intended company, such moneys
must be held by the persons named in the prospectus as proposed directors
and by the incorporators, upon trust for the applicant.125 There is, however, no
obligation or duty on any bank or third person with whom any such moneys
have been deposited to inquire into or see to the proper application of those
moneys so long as the bank or person acts in good faith.126
Statements in Lieu of Prospectus
Special rules apply to a public company which does not issue a prospectus on
or with reference to its formation in Antigua, Barbados, Belize, Dominica,
Grenada, Guyana, Jamaica, Montserrat, St Lucia and St Vincent. In such a case,
a company is restricted from allotting its shares or debentures unless, at least
three days before the first allotment of either shares or debentures, it has
lodged with the Registrar a statement in lieu of prospectus that complies with
the statutory provisions on prospectuses.127 To comply with the requirements
of these provisions, the statement in lieu of prospectus must be signed by
every person named therein as a director or proposed director of the company
or by his agent authorised in writing.128 The statement in lieu of prospectus
must also disclose any commission authorised by the directors as payment to
any person in consideration of his purchasing or agreeing to purchase shares of
the company.129
Conclusion
What has emerged from this chapter is that the Companies Acts in the
Commonwealth Caribbean, except in Trinidad and Tobago, contain elaborate
and detailed provisions on prospectuses. These provisions were in all cases,
except in Jamaica, enacted at a time when there was an absence of any legal
framework, such as stock exchanges, for supervising the public trading of
corporate securities. Accordingly, these provisions were intended to provide a
framework to protect and to facilitate the public investing in corporate
securities. This explains the full treatment in these provisions of such things as
the definition of a prospectus, the contents of a prospectus, invitations and
offers to the public, notices to the public, the registration of a prospectus,
contracts to purchase securities offered in a prospectus, minimum subscriptions
and statements in lieu of a prospectus.
Notes
1 See Ang Securities Act, IRSA c. s 13; Ant: Securities Act 2001; Bah: Security Industries Act, Ch 363; B’dos
Securities Act Cap 318A; Dom: Securities Act 2001; Gren: Securities Act 2001; Guy: Securities Act 1998;
J’ca: Securities Act 1993; Mont: Securities Act 2001; St C/N: Securities Act 2001; St L: Securities Act 2001;
St V: Securities Act 2001; T’dad: Securities Industry Act, Chap 83: 03.
2 (1867) LR 2 HL 99, 113 Eng HL.
3 Ant s 302(c); B’dos s 288; Dom s 302(c); Gren s 302(c); Guy s 285(c); Mont s 302(c); St L s 302(c); St V s
302(c).
4 Below, text accompanying nn 41–77.
5 Bel s 2; J’ca s 2.
6 St C/N s 29(4).
7 Ang s 181(i); Ant s 305(a); B’dos s 291(a); Bel s 82(1); Dom s 305(a); Gren s 305(a); Guy s 288(a); J’ca s 40(1);
St C/N: no provision; St L s 305(a); St V s 305(a).
8 Ant s 305(a); B’dos s 291(b); Bel s 82(2)–(4); Dom s 305(b); Gren s 305(b); Guy s 288(b); J’ca s 40(2)–(3); Mont
s 305(b); St L s 305(b); St V s 305(b).
305(b).
305(c).
11 Ant s 305(d); B’dos s 291(d); Dom s 305(d); Gren s 305(d); Guy s 288(d); Mont 305(d); St L s 305(d); St V s
305(d).
305(d).
305(e).
14 Ant s 305(f); B’dos s 291(f); Dom s 305(f); Gren s 305(f); Guy s 288(f); Mont s 305(f); St L s 305(f); St V s
305(f).
18 Ant s 313(1)(a); B’dos s 299(1)(a); Dom s 313(1)(a); Gren s 313(1)(a); Guy s 296(1)(a); J’ca s 42(1)(a); Mont s
313(1)(a); St L s 313(1)(a); St V s 313(1)(a).
19 Ant s 313(1)(b); B’dos s 299(1)(b); Dom s 313(1)(b); Gren s 313(1)(b); Guy s 296(1)(b); J’ca s 42(1)(b); Mont s
313(1)(b); St L s 313(1)(b); St V s 313(1)(b).
313(2).
21 Ant s 307; B’dos s 293; Dom s 307; Gren s 307; Guy s 290; J’ca s 41(2); Mont s 307; St L s 307; St V s 307.
22 Ant s 307(a); B’dos s 293(a); Dom s 307(a); Gren s 307(a); Guy s 290(a); J’ca s 41(2); Mont s 307(a); St L s
307(a); St V s 307(a).
23 Ant s 307(b); B’dos s 293(b); Dom s 307(b); Gren s 307(b); Guy s 290(b); J’ca s 41(2); Mont s 307(b); St L s
307(b); St V s 307(b).
313(2).
313(1)(a); St V s 313(1)(a).
313(1)(b); St V s 313(1)(b).
27 Ant s 302(c); B’dos s 288; Bel s 2; Dom s 302(c); Gren s 302(c); Guy s 285(c); J’ca s 2; Mont s 302(c); St C/N s
29(4); St L s 302(c); St V s 302(c).
28 Ant s 302(c); B’dos s 288; Bel s 2; Dom s 302(c); Gren s 302(c); Guy s 285(c); J’ca s 2; Mont s 302(c); St C/N s
29(4); St L s 302(c); St V s 302(c).
29 For background materials on these methods see, e.g., Francis & Kirzner, Investments: Analysis and
Management (3rd edn, McGraw Hill Ryerson, Toronto: 1988) Ch 2; Klein & Coffee Jr, Business
Organization and Finance: Legal and Economic Principles (Foundation Press, New York: 1996) Ch 4.
302(c).
31 Ant s 312(1); B’dos s 298(1); Dom s 312(1); Gren s 312(1); Guy s 295(1); J’ca s 46(1): worded slightly
differently; Mont s 312(1); St L s 312(1); St V s 312(1).
32 Ang s 4(1); Ant s 542(1); B’dos s 444(1); Dom s 542(1); Gren s 542(1); Guy s 531(1); J’ca s 55(1); Mont s 542(1);
St L s 542(1); St V s 542(1).
33 Discussed above.
34 Discussed above.
35 Discussed above.
36 Discussed above.
37 Ang s 4(2); Ant s 542(2); B’dos s 444(2); Dom s 542(2); Gren s 542(2); Guy s 531(2); J’ca s 55(2): worded
somewhat differently; Mont s 542(2); St L s 542(2); St V s 542(2).
38 Corporate Affairs Commission v David James Finance Ltd [1975] 2 NSWLR 710 NSW Sup Ct.
39 See, e.g., Nicol’s Case (1885) 29 Ch D 421, 426 Eng CA per Chitty J.
40 Ant s 543(1); B’dos s 448(h); Dom s 543(1); Gren s 543(1); Guy s 535(h); J’ca s 2(1); Mont s 543(1); St L s
543(1); St V s 543(1).
302(b).
308(1)(a); St V s 308(1)(a).
43 Ant s 308(1)(b)(i); B’dos s 294(1)(b)(i); Dom s 308(1)(b)(i); Gren s 308(1)(b)(i); Guy s 291(1)(b)(i); Mont s 308(b)
(i); St L s 308(1)(b)(i); St V s 308(1)(b)(i).
44 Ant s 308(1)(b)(ii); B’dos s 294(1)(b)(ii); Dom s 308(1)(b)(ii); Gren s 308(1)(b)(ii); Guy s 291(1)(b)(ii); Mont s
308(1)(b)(ii); St L s 308(1)(b)(ii); St V s 308(1)(b)(ii).
45 Ant s 308(1)(b)(iii); B’dos s 294(1)(b)(iii); Dom s 308(1)(b)(iii); Gren s 308(1)(b)(iii); Guy s 291(1)(b)(iii); Mont
s 308(1)(b)(iii); St L s 308(1)(b)(iii); St V s 308(1)(b)(iii).
308(2).
308(2)(a); St V s 308(2)(a).
308(2)(b); St V s 308(2)(b).
49 Ant s 308(2)(c)(i); B’dos s 294(2)(c)(i); Dom s 308(2)(c)(i); Gren s 308(2)(c)(i); Guy s 291(2)(c)(i); Mont s 308(2)
(c)(i); St L s 308(2)(c)(i); St V s 308(2)(c)(i).
50 Ant s 308(2)(c)(ii); B’dos s 294(2)(c)(ii); Dom s 308(2)(c)(ii); Gren s 308(2)(c)(ii); Guy s 291(2)(c)(ii); Mont s
308(2)(c)(ii); St L s 308(2)(c)(ii); St V s 308(2)(c)(ii).
51 Ant s 308(2)(c) and (3); B’dos s 294(2)(c) and (3); Dom s 308(2)(c) and (3); Gren s 308(2)(c) and (3); Guy s
291(2)(c) and (3); Mont s 308(2)(c) and (3); St L s 308(2)(c) and (3); St V s 308(2)(c) and s 308(3).
308(3)(a); St V s 308(3)(a).
308(3)(b); St V s 308(3)(b).
308(3)(c); St V s 308(3)(c).
308(3)(d); St V s 308(3)(d).
308(3)(e); St V s 308(3)(e).
57 Ant s 308(3)(f); B’dos s 294(3)(f); Dom s 308(3)(f); Gren s 308(3)(f); Guy s 291(3)(f); Mont s 308(3)(f); St L s
308(3)(f); St V s 308(3)(f).
58 Ant s 308(3)(g); B’dos s 294(3)(g); Dom s 308(3)(g); Gren s 308(3)(g); Guy s 291(3)(g); Mont s 308(3)(g); St L s
308(3)(g); St V s 308(3)(g).
59 Ant s 308(3)(h); B’dos s 294(3)(h); Dom s 308(3)(h); Gren s 308(3)(h); Guy s 291(3)(h); Mont s 308(3)(h); St L s
308(3)(h); St V s 308(3)(h).
60 Ant s 308(2)(d)(i); B’dos s 294(2)(d)(i); Dom s 308(2)(d)(i); Gren s 308(2)(d)(i); Guy s 291(2)(d)(i); Mont s 308(2)
(d)(i); St L s 308(2)(d)(i); St V s 308(2)(d)(i).
61 Ant s 308(2)(d)(ii); B’dos s 294(2)(d)(ii); Dom s 308(2)(d)(ii); Gren s 308(2)(d)(ii); Guy s 291(2)(d)(ii); Mont as
308(2)(d)(ii); St L s 308(2)(d)(ii); St V s 308(2)(d)(ii).
62 Ant s 308(2)(d)(iii); B’dos s 294(2)(d)(iii); Dom s 308(2)(d)(iii); Gren s 308(2)(d)(iii); Guy s 291(2)(d)(iii); Mont
s 308(2)(d)(iii); St L s 308(2)(d)(iii); St V s 308(2)(d)(iii).
308(2)(d)(iv); St L s 308(2)(d)(iv); St V s 308(2)(d)(iv).
308(4).
309(1).
309(1)(a); St V s 309(1)(a).
309(1)(b); St V s 309(1)(b).
309(1)(c); St V s 309(1)(c).
309(2).
310(a).
310(b).
310(c).
74 Ant s 311(1); B’dos s 297(1); Bel s 82(2); Dom s 311(1); Gren s 311(1); Guy s 294(1); J’ca s 40(2); Mont s 311(1);
St L s 311(1); St V s 311(1).
75 Ant s 311(1); B’dos s 297(1); Bel s 82(4); Dom s 311(1); Gren s 311(1); Guy s 294(1); J’ca s 40(3); Mont s 311(1);
St L s 311(1); St V s 311(1).
76 Ant s 311(2); B’dos s 297(2); Bel s 82; Dom s 311(2); Gren s 311(2); Guy s 294(2); J’ca s 40(4); Mont s 311(2); St
L s 311(2); St V s 311(2).
77 Ant s 311(2)(a); B’dos s 297(2)(a); Bel s 82(2); Dom s 311(2)(a); Gren s 311(2)(a); Guy s 294(2)(a); J’ca s 40(4)
and (2)(a); Mont s 311(2)(a); St L s 311(2)(a); St V s 311(2)(a).
78 Ant s 311(2)(b); B’dos s 297(2)(b); Bel: no similar provision; Dom s 311(2)(b); Gren s 311(2)(b); Guy s 294(2)
(b); J’ca: no similar provision; Mont s 311(2)(b); St L s 311(2)(b); St V s 311(2)(b).
79 Ant s 311(2)(c); B’dos s 297(2)(c); Bel: no similar provision; Dom s 311(2)(c); Gren s 311(2)(c); Guy s 294(2)(c);
J’ca: no similar provision; Mont s 311(2)(c); St L s 311(2)(c); St V s 311(2)(c).
80 Ant s 311(2)(c); B’dos s 297(2)(c); Bel: no similar provision; Dom s 311(2)(c); Gren s 311(2)(c); Guy s 294(2)(c);
J’ca: no similar provision; Mont s 311(2)(c); St L s 311(2)(c); St V s 311(2)(c).
81 Ant s 311(2)(d); B’dos s 297(2)(d); Dom s 311(2)(d); Gren s 311(2)(d); Guy s 294(2)(d); J’ca s 40(4): worded
differently; Mont s 311(2)(d); St L s 311(2)(d); St V s 311(2)(d).
311(3).
311(3).
311(3).
311(4).
311(4).
311(5).
311(5).
311(6).
90 Ant s 312(1); B’dos s 298(1); Dom s 312(1); Gren s 312(1); Guy s 295(1); J’ca s 46(1); Mont 312(1); St L s 312(1);
St V s 312(1).
91 Ant s 312(1); B’dos s 298(1); Dom s 312(1); Gren s 312(1); Guy s 295(1); J’ca s 46(1); Mont s 312(1); St L s
312(1); St V s 312(1).
312(1); St V s 312(1).
312(2); St V s 312(2).
312(a); St L s 312(2)(a); St V s 312(2)(a).
312(2)(b); St L s 312(2)(b); St V s 312(2)(b).
312(3); St V s 312(3).
312(4); St L s 312(4)(a); St V s 312(4)(a).
312(4); St L s 312(4)(b); St V s 312(4)(b).
312(5); St V s 312(5).
312(5); St V s 312(5).
101 Re Oriental Commercial Bank, Alabaster’s Case (1868) LR 7 Eq 273; Re Metropolitan Rlys Co, Robinson’s
Case [1900] 2 Ch 671.
102 Ramsgate Victoria Hotel Co v Montefiore (1868) LR 1 Exch 109.
103 Ant s 315; B’dos s 301; Dom s 315; Gren s 315; Guy s 298; J’ca s 51; Mont s 315; St L s 315; St V s 315.
104 In Jamaica, the third day: s 51(1).
315(1); St V s 315(1).
315(1); St V s 315(1).
315(3).
315(3).
110 J’ca s 51(4).
111 J’ca s 51(4).
315(2); St V s 315(2).
115 Ang s 182(a); Ant s 316(1); B’dos s 302(1); Dom s 316(1); Gren s 316(1); Guy s 299(1); Mont s 316(1); St L s
316(1); St V s 316(1).
116 Ang s 182(a); Ant s 316(1); B’dos s 302(1); Dom s 316(1); Gren s 316(1); Guy s 299(1); J’ca s 48(3); St C/N: no
similar provision; St L s 316(1); St V s 316(1).
316(2); St V s 316(2).
316(2).
119 J’ca s 48(2).
316(3); St V s 316(3).
316(4); St V s 316(4).
316(5); St V s 316(5).
316(6); St V s 316(6).
127 Ant s 320; B’dos s 306; Bel s 84(1); Dom s 320; Gren s 320; Guy s 303; J’ca s 49(1); Mont s 320; St L s 320; St V
s 320.
128 Ant s 321(1)(a); B’dos s 307(1)(a); Bel s 84(1); Dom s 321(1)(a); Gren s 321(1)(a); Guy s 304(1)(a); J’ca s 49(1);
Mont s 321(1)(a); St L s 321(1)(a); St V s 321(1)(a).
129 Ant s 321(1)(b); B’dos s 307(1)(b); Bel Second Sch to the Act; Dom s 321(1)(b); Gren s 321(1)(b); Guy s 304(1)
(b); J’ca s 49(1); Mont s 321(1)(b); St L s 321(1)(b); St V s 321(1)(b).
Chapter 20
Liabilities for Misleading Prospectuses
Introduction
As was seen in the previous chapter, the basic purpose of the statutory
provisions on prospectuses requirements is to ensure that investors have
available to them adequate, reliable information about companies and their
securities when the latter are offered to the public. Of course, there may be
adverse market consequences for companies which issue misleading
prospectuses. However, it is generally accepted that a major incentive for
issuers of securities to provide accurate information is a regime of legal
sanctions for misstatements or omissions in prospectuses.
Under Commonwealth Caribbean company law, where there is a
misstatement in a prospectus, the purchaser of shares or debentures may be
entitled in the general law under rules of common law and rules of equity and
under statute to the remedies of damages and rescission of any resulting
contract before the allotment of shares. In addition to remedies under the
general law, the Companies Acts in the region make specific provision for
other, and arguably, better remedies. To fully appreciate the way in which the
provisions in the Companies Acts in the Commonwealth Caribbean expand
upon the general rules of common law, equity and statute and which of these
rules are still available, it will be convenient in this chapter to examine first
the remedies of damages and rescission under the general law and then
explore the special provisions in the Companies Acts.
Damages at Common Law
Contractual claims
It is entirely possible for a misstatement of fact in a prospectus to become a

term of a contract, or indeed of a collateral contract, to acquire the shares or
debentures offered in the prospectus. To establish this, it must be shown that
the misstatement was intended to form part of the contract, or collateral
contract, at the time of sale of these shares or debentures.1 Where this is
established and shares or debentures are purchased from any seller other than
the company, an action for damages for breach of contract may be available to
the purchaser against the seller.
The position is different, however, where the purchase is direct from the
company. Here, it appears to be the law that a prospectus cannot be relied on
as a contractual document and that a contract with the company is concluded
only after allotment and entry in the company’s register.2 Consequently, the
rights attaching the shares or debentures after allotment and entry into the
register then depend on the Acts, articles of incorporation and the bye-laws
and not upon those of any prior prospectus.3
Tort claims
Some general considerations
Two types of tort claims may be available at common law for damages for
misstatements in a prospectus. These are an action in deceit for a fraudulent
misrepresentation, and an action for negligent misstatement under the rule in
Hedley Byrne & Co Ltd v Heller & Partners Ltd.4 In discussing these claims in
the context of Commonwealth Caribbean company law, it is to be noted that
the Companies Acts in Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia and St Vincent have abolished and replaced these two
tort claims by a statutory remedy of rescission5 in relation to claims connected
with prospectuses by shareholders and debenture-holders against a company,
but not against other persons.6 That said, two important principles which apply
both to actions in deceit and negligent misstatement may usefully be explored
right away.
The first is that, in order to maintain an action in tort for either fraudulent
misrepresentation or negligent misstatement, it must be established that the
misstatement constitutes a misrepresentation. A misrepresentation is legally
defined as a misstatement of fact which, while not forming part of the
contract, is one of the reasons that induces the contract.7 It is not a mere
promise,8 forecast or expression of opinion,9 unless, according to Bowen LJ in
Edgington v Fitzmaurice,10 the opinion stated is not actually held, so that the
representor misrepresents the state of his mind. For there to be a
misrepresentation also there must be a positive misstatement, and not a mere
omission to state a material fact.11 Finally for a misrepresentation to be
actionable it must have been intended to induce and did induce the contract
for the purchase of the shares or debentures.12
The second is that, in order to maintain an action in tort either for
fraudulent misrepresentation or negligent misstatement, the shareholder or
debenture-holder must establish as a fact some connection between the
persons responsible for the prospectus and his purchasing of the shares or
debentures. Thus, in the English House of Lords’ case of Peek v Gurney,13 an
investor purchased shares on the market on the faith of a prospectus which
was published on the issue of shares. It was held (overruling many previous
authorities) that he could not sue on a misrepresentation in the prospectus. The
prospectus was only intended to induce subscriptions of shares from the
company and not subsequent purchases in the market. When, therefore the
allotment was completed, the prospectus was exhausted so that a subsequent
purchaser in the market was not so connected to the prospectus as to render
those responsible for its issue liable to him for his loss.
The Peek v Gurney14 rule was reaffirmed in relation to liability for negligent
misstatement in the English case of Al Nakib Investments (Jersey) Ltd v
Longcroft.15 This case concerned allegedly misleading statements in a
prospectus issued by a company in connection with a rights issue to its
shareholders to subscribe for shares in a subsidiary it was promoting. The
plaintiff not only took up its rights but also purchased shares in the subsidiary
in the market. It was held that the plaintiff could claim in respect of the rights
taken up by him in reliance on the prospectus since the defendant knew that
the plaintiff might rely on the prospectus to subscribe for shares. However, the
plaintiff’s claim in respect of shares acquired on the market would be struck
out since the defendant had no knowledge that the plaintiff would rely on the
prospectus to make market purchases.
In Andrews v Mockford,16 on the other hand, the English Court of Appeal
held that where the prospectus is intended, not only to induce applications for
an allotment, but also to induce purchases in the market, the function of the
prospectus is not exhausted when allotment is completed. Consequently, those
responsible for the issue of the prospectus are liable for the loss of the
purchaser in the market.
With these two principles in mind, attention may now turn to a detailed
consideration of each of the heads of fraudulent misrepresentation and
negligent misstatement.
Fraudulent misrepresentation
The decision of the English House of Lords in Derry v Peek17 has laid down the
law on tort claims based on fraudulent misrepresentation. This case concerned
a misrepresentation in a prospectus on a proposal for a tramway. The House of
Lords held that, to claim damages in tort for misrepresentation, it was
necessary to show that the misrepresentation was fraudulent. This
requirement could only be satisfied where it was shown that the
misrepresentation was made with knowledge of its falsity or recklessly, not
caring whether it to be true or false. This decision was immediately reversed
as regards prospectuses in the UK by the Directors’ Liability Act 1890, which
was subsequently incorporated into company law statutes in the region.18
In the English House of Lords’ case of Briess v Woolley,19 it was held that an
action in deceit for fraudulent misrepresentation is available against those who
made the false statement intending it to be acted upon and having knowledge
of its falsity as well as those who were the principals of those who
fraudulently issued it while acting within the scope of their authority. In the
context of prospectuses, this means that, not only may the company itself be
liable if any of its officers have knowledge that the statement is false, but also
any directors acting on behalf of the company, issuing houses and experts in
respect of their reports who had knowledge of the falsity of the statement.
The implications of the House of Lords’ decision in Houldsworth v City of
Glasgow Bank20 is also to be noted. This case decides that damages for deceit
cannot be recovered against the company unless the allotment of shares is also
rescinded.
Negligent misstatement
The potential to maintain an action for common law damages for a

misstatement in a prospectus was exposed in the English House of Lords’
decision in Hedley Byrne & Co Ltd v Heller & Partners Ltd.21 In this case, the
House of Lords established that a claim for damages in tort was available for
negligent misstatements so long as there was a duty of care based on a ‘special
relationship’ between the representor and the representee.22 Prior to this case,
Derry v Peek was often cited as authority for the proposition that no duty of
care could arise between a representor and a representee unless there was a
pre-existing contractual or fiduciary relationship.23 It is now clear from Hedley
Byrne that a duty of care may arise in circumstances other than contractual or
fiduciary relationships.
Two approaches to the existence of a Hedley Byrne duty of care are evident
in these cases. The first is that based on the Hedley Byrne case itself where it
was held that a duty of care will be implied when the party seeking
information from a person possessed of special skill trusts that person to
exercise due care and that person knew or ought to have known that reliance
was being placed on his skill and judgment. The second is that based on the
majority in the Privy Council decision in Mutual Life and Citizens Assurance
Co Ltd v Evatt,24 where Lord Diplock stated that no duty of care can arise
unless the giver of the advice ‘lets it be known to the recipient of the advice
that he claims to possess that degree of skill and competence and is willing to
exercise that degree of diligence which is generally possessed and exercised by
persons who carry on the business or profession of giving advice of that kind
sought’.25
In the context of misstatements in prospectuses, it appears that, no matter
which approach is taken, in a Hedley Byrne action, the only persons liable will
be those who owed and broke a duty of care. Ex facie, this should clearly
include experts such as accountants or surveyors who must sign written
consents to their report appearing in the prospectus and who must surely be
warranting that their expert information contained in the prospectus is true.
The Ontario Court of Appeal decision in Montreal Trust Co of Canada v Scotia
McLeod Inc26 lends some support for the view that directors who have
accepted responsibility for negligent misstatements in a prospectus may also
be included. However, the concern expressed in Mentmore Manufacturing Co
v National Merchandising Co27 that a negligent misrepresentation action
against directors or officers of a company may amount to an ‘end run around
the corporate veil’ may, however, remain a serious limitation on directors’
liability under Hedley Byrne.
Damages Under the Misrepresentation Acts
Two territories in the region, Antigua and Barbuda28 and Trinidad and
Tobago,29 have enacted legislation based on the UK Misrepresentation Act
1967 which makes it possible for damages to be recovered for
misrepresentation other than fraudulent misrepresentation. The provisions of
the Antigua and Barbuda Act will be examined here since, as has been pointed
out earlier, prospectus liability in Trinidad and Tobago is treated as an issue of
securities law and is not being examined in this book.
Section 3(1) of the Antiguan Act provides as follows:
Where a person has entered into a contract after a misrepresentation has been made to him by another
party thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation
would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that
person shall be liable notwithstanding that the misrepresentation was not made fraudulently, unless that he
proves that he had reasonable grounds to believe and did believe up to the time the contract was made that
the facts represented were true.
It is clear that, under this subsection, damages may be recovered by a

purchaser of shares or debentures who was induced to purchase these
securities on the basis of a misrepresentation in a prospectus unless the seller
of the securities can show that he had reasonable grounds to believe and did
believe in the truth of the facts represented in the prospectus.30
Section 3(2) of the Antiguan Act goes even further. Under this subsection,
where a purchaser of securities has rescinded or is asking for rescission and the
court holds that he is entitled to rescission but that it would be more equitable
to award damages, the court may so award damages.31 On the plain language
of this subsection, such damages may be awarded even though the vendor’s
belief was honest and based on reasonable grounds. A clause in a contract
purporting to limit or exclude liability under the Acts is ineffective unless it is
shown to meet a statutory reasonableness test.32
Finally, it is clear from the language of the Act that only the other party to
the contract can be sued and only in respect of statements made by him. This
means that only the person from whom the purchaser of the security has
acquired the security may be sued under the Act for misstatements in a
prospectus. Directors and experts will not therefore normally be liable. The
company, however, will be liable where it is the party from whom the
purchaser acquired the security. Section 318 of the Antiguan Companies Act
only abolishes and substitutes common law actions for false statements by the
statutory remedy of rescission. That section therefore has no application to
actions under the Misrepresentation Act.
Rescission in Equity
Overview of the rescission remedy
Rescission is a general equitable remedy available in respect of a contract

entered into as a result of a misrepresentation. This general remedy is
available in the specific case of a misrepresentation in a prospectus. Here the
rule is that if a contract for the subscription for the purchase of corporate
securities is induced by a misrepresentation in a prospectus, the court may
rescind the contract and order restitution of the moneys paid under the
contract with interest.33 It is important to note that, under the Acts in Antigua,
Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia and St Vincent,
the general remedy of rescission in equity has been abolished and replaced by
a statutory remedy of rescission34 in relation to claims by shareholders and
debenture-holders against a company, but not other persons.35
What must be proved
For a purchaser of shares or debentures to maintain a claim for rescission in

equity, he must, first of all prove the essential elements of misrepresentation,
namely, that the misrepresentation was one of fact, that it was material and
that it induced the purchase of the shares or debentures.36 Significantly, it does
not matter whether the misrepresentation is innocent, negligent or fraudulent.
The only situation in which proof of fraud may be consequential is where
the contract has been fully executed and property in the shares or debentures
has passed. This is because, under the general law of contract, the so-called
rule in Seddon’s Case (Seddon v North Eastern Salt Co),37 is to the effect that a
contract cannot be rescinded on the ground of misrepresentation, unless fraud
is shown, so long as it has been executed and property passed.
Although this rule has been criticised in a number of subsequent cases,38 it is
generally thought to be the law in territories where it has not been abolished
by statute. Thus, it is only in Antigua and Trinidad and Tobago, which have
enacted legislation based on the UK Misrepresentation Acts, that this rule has
been abolished.39 In these territories rescission is possible as long as it can be
shown that the transferor or his agent was responsible for the
misrepresentation or knew that the contract was entered into in reliance on
the misrepresentation.
Summary of applicable rules
A number of well settled rules applicable to an action for rescission may be

quickly stated here. The first is that an action for rescission of an executed
contract to take shares or debentures lies only if the claim is based on a
fraudulent misrepresentation.40 Second, it is not necessary to prove damages in
an action for rescission.41 Third, it is not necessary to prove that the directors
had knowledge of the falsity of the statement.42 Fourth, as contracts to acquire
shares or debentures are not contracts uberrimae fidei (contracts where there
is duty to disclose all material facts), mere non-disclosure is insufficient to
maintain an action for rescission of these contracts. Where non-disclosure is
alleged, it must be proved that the facts not disclosed were such that the
failure to disclose them resulted in the statement actually made being
misleading.43 Fifth, if a statement in a prospectus was true at the date of the
prospectus but becomes untrue before allotment, rescission is possible.44
Rescission against the company
As has already been seen, the Acts in Antigua, Barbados, Dominica, Grenada,
Guyana, Jamaica, Montserrat, St Lucia and St Vincent have substituted the
common law right to rescission against a company by a statutory right to
rescission. In the other territories, namely, Anguilla, Belize, the Bahamas and
St Christopher/Nevis, a purchaser of shares or debentures may undoubtedly
maintain a claim for rescission of contract against a company where the
company issues shares or debentures and publishes the prospectus in which
the false statement was made.
Where, on the other hand, the prospectus is published by the promoter prior
to the incorporation of the company, a claim against a company may be
somewhat problematic. The jurisprudential difficulty here stems from the fact
that, apart from pre-incorporation contracts, a company, prior to incorporation
cannot have agents, nor can it ratify after incorporation acts purporting to be
done on its behalf.45 This should mean that it is legally impossible for a
company to be responsible for a false prospectus issued by a promoter.
In spite of the foregoing logic, it was held in the English Court of Appeal
case of Karsberg’s Case, Re Metropolitan Consumers Association46 that, if the
officers of a company know that the applications are based on a false pre-
incorporation prospectus, rescission may be available against the company
even though the company was not responsible for the false pre-incorporation
prospectus. Lindley LJ said in that case:47
Speaking generally, there is no doubt that a misrepresentation in order to vitiate a contract must be made
by a party to it, or by his agent. But this rule is not without exception: Stewart’s Case (1866) LR I Ch 574
and Downes v Ship (1868) LR 3 HL 343 warrant the proposition that an application to a company when
formed for shares, based upon a prospectus issued by the promoters of the company before its formation,
cannot be dissevered by the company from such prospectus.
A company is not, without more, responsible for a false statement in an

expert’s report in a prospectus, and thus rescission for such is not available
against the company. This is even more so where the company has dissociated
itself from the expert’s statement. If, on the other hand, the company adopts
the expert’s statement and represents it as fact, the company will be held
responsible for it unless it makes it absolutely clear that it does not vouch for
the accuracy of the statement.48
Loss of the right to rescind

As noted above, rescission is a general equitable remedy. Consequently,
rescission does not render a contract void, but only voidable. In other words,
the contract is valid until rescinded and the right to rescind may be lost on
grounds recognised in equity as bars to rescission.
Remedies under the Companies Acts
Claim for loss or damage
Nature and scope of the claim

Lucia and St Vincent contain provisions allowing a claim for any ‘loss or
damage’ resulting from a misstatement in a prospectus.49 Under the Acts in
Anguilla, Belize and Jamaica the claim is for ‘compensation’50 and in St
Christopher/Nevis it is for ‘damages’.51
Despite the different labeling of the claim available for misstatement in a
prospectus under these Acts, the provisions in each of these Acts trace their
roots back to the UK Directors’ Liability Act 1890 which, as we have seen, was
enacted to reverse the decision in Derry v Peek.52 Consequently, these
provisions must be regarded as superseding the common law action in deceit
for false prospectuses and thus removing the need to prove fraud as in an
action at common law for deceit. These provisions also shift the onus onto the
persons designated as liable for a false prospectus to disprove liability for the
prospectus, unlike at common law where the onus of proof rested on the
person claiming deceit. Finally, under these provisions, the claim is for ‘loss or
damage’53 or for ‘compensation’54 sustained as a result of the misstatement,
and except in the case of St Christopher/Nevis,55 clearly not ‘damages’ as at
common law.
It has been suggested that the reason for the use of the statutory language
of ‘loss or damage’ or ‘compensation’ rather than ‘damages’ is to emphasise
the fact that there is no need for any moral blame under the provisions.56 This
subtlety obviously did not impress the legislators in St Christopher/Nevis!
To whom the claim is available
In Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia and

St Vincent, the remedy is available to persons who, ‘on the faith of a
prospectus, subscribe for or purchase any shares or debentures’.57 In Anguilla,
Belize and Jamaica, the remedy is available to all persons who ‘subscribe for
any shares or debentures on the faith of the prospectus’.58 In St
Christopher/Nevis, the remedy is available to ‘a person who acquires or agrees
to acquire a security’.59 The wording in all cases means that the remedy is not
limited only to those to whom the prospectus was addressed. As long as a
person has subscribed for or purchased shares or debentures, or acquired
securities on the faith of a prospectus and suffered loss or damage, he is
entitled to claim.
As was just noted, under the Acts in Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia and St Vincent the claim is available to persons
who ‘subscribe for or purchase shares or debentures’,60 Under these Acts, then,
the claim is not limited to prospectuses issued by or on behalf of the company.
This must be so since, on its express words, the section applies not only to
persons who ‘subscribe for’ but also to persons who ‘purchase’ shares or
debentures.
Persons who ‘subscribe’ have been defined in the cases as those who take or
agree to take unissued shares for cash.61 On the other hand, persons who
‘purchase’ includes those who take issued shares for a consideration that may
be cash or may be other than cash.62 The remedy under the provisions is thus
available to market purchasers of shares or debentures after the original
allotment. By the same token, the provisions apply to offers for non-cash
consideration as well as offers to acquire shares or debentures. They may
therefore apply to takeover circulars.
Because of the wording of section 30(1) in the St Christopher/Nevis Act, the
position in St Christopher/Nevis appears to be the same as in Antigua,
Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia and St Vincent.
In Anguilla, Belize and Jamaica, where the claim is only available to persons
who ‘subscribe’ for shares or debentures,63 the claim is limited to prospectuses
issued by or on behalf of the company. This is so since, as has been just pointed
out, persons who ‘subscribe’ are legally defined as those who agree to take
unissued shares of the company for cash and does not include those who take
issued shares.
What the plaintiff must prove
To bring a claim under the Acts, a plaintiff must satisfy a number of statutorily
specified requirements.64 He must prove, first of all, that he subscribed for or
purchased shares or debentures, in Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia and St Vincent;65 in Anguilla, Belize and Jamaica,
that he subscribed for shares or debentures;66 and in St Christopher/Nevis, that
he acquired or agreed to acquire securities.67 He must then prove that the
subscription or purchase or acquisition was made on the faith of the
prospectus in question.68 Next, he must prove that the prospectus contained an
untrue statement, or that there was a wilful non-disclosure in the prospectus of
a matter that those persons designated in the Acts as bearing liability for a
prospectus had knowledge and knew to be material.69 Finally, a plaintiff must
show that he sustained loss or damage as a result of the untrue statement or
the non-disclosure.70
Persons designated as liable
All of the Acts expressly list the persons against whom a statutory civil action
for a false prospectus may be instituted.71 These include a person who is a
director of the company at the time of the issue of the prospectus.72 Also
included is a person who authorised or caused himself to be named and is
named in the prospectus as a director or as having agreed to become a
director immediately or after an interval of time.73 In Antigua, Barbados,
Dominica, Grenada, Guyana, Montserrat, St Lucia and St Vincent, an
incorporator,74 and in Anguilla, Belize and Jamaica, a promoter75 of the
company is also included, as well as, in all the territories, a person who
authorised or caused the issue of the prospectus.76
It is thought that this last category of person, namely, a person who
authorised or caused the issue of the prospectus, does not include the
company. Admittedly, on ordinary principles of interpretation ‘person’
includes a company. It would, however, be strange if the Acts intended to
designate a company as a person liable to an action for a false prospectus but
left it to be implied from the sweep-up provision ‘a person who authorised or
caused the issue of the prospectus’. It is to be noted that this interpretational
problem does not exist in St Christopher/Nevis since the Act in that country
expressly includes ‘the body corporate issuing the securities’.77
This sweep-up provision more naturally includes persons such as experts
who consented to the use of his expert report in the prospectus, trustees for
debenture-holders, auditors, bankers, attorneys-at-law, transfer agents and
stockbrokers. It is to be noted, however, that in Antigua, Barbados, Dominica,
Grenada, Guyana, Jamaica, Montserrat, St Christopher/Nevis, St Lucia and St
Vincent, where the consent of an expert is required in the issue of a
prospectus, he is not, by reason only of the consent, liable as a person who has
authorised or caused the issue of the prospectus, except in respect of an untrue
statement purporting to be made by him as an expert.78 By the same token, in
these territories, the inclusion in the prospectus of a name of a person as a
trustee for debenture-holders, auditor, banker, attorney-at-law, transfer agent
or stockbroker may not, for that reason alone, be taken as authorisation by
him of the issue of the prospectus.79
Defences to claim for loss or damage
Defences available to any person designated as liable
Several defences are available under the Acts to any of the persons designated
as liable under the Acts. Any such person may avoid liability by showing any
of the following:
(i) that the prospectus was issued without his knowledge or consent,80
and that forthwith after he became aware of its issue he gave public
notice of that fact;81
(ii) except in Belize, that, after the issue of the prospectus to which he had
given his consent and before allotment or sale under it, he became
aware of an untrue statement in it and withdrew his consent and gave
reasonable public notice of the withdrawal of his consent and the
reasons for it;82
(iii) that, as regards every untrue statement not purporting to be made on
the authority of an expert or of a public official document or
statement, he had reasonable ground to believe and did, up to the time
of the allotment or sale of the shares or debentures, believe that the
statement was true;83
(iv) except in Belize and St Christopher/Nevis, that, as regards every
untrue statement made by an expert or based on a statement made by
an expert, the statement was fairly represented, or was a correct and
fair copy of or extract from the expert’s report or valuation, and that
he had reasonable ground to believe and did, up to the time of the
issue of the prospectus, believe that the expert making the statement
was competent to make it, had duly given his consent to the issue of
the prospectus, had not withdrawn that consent before delivery of a
copy of the prospectus for registration; nor had the expert, to that
person’s knowledge, withdrawn consent before allotment or sale under
the prospectus;84
(v) except in St Christopher/Nevis, that, as regards every untrue
statement purporting to be made by an official person or contained in
what purports to be a copy of an extract from a public official
document, it was a correct and fair representation of the statement or
copy of, or extract from, the document.85
Defence available to directors alone
Under all regional Acts except that in St Christopher/Nevis, in addition to the

foregoing defences, a person who consented to become a director may avoid
liability by showing that he withdrew his consent before the issue of the
prospectus and that the prospectus was issued without his authority or
consent.86
Defences available to experts alone
The Acts in Antigua, Barbados, Dominica, Grenada, Guyana, Jamaica,

Montserrat, St Lucia and St Vincent contain special provisions on defences
available to experts who have given a consent required under the Acts.87
Under these Acts, such an expert will escape liability by showing any of the
following:
(i) that, having given his consent to the issue of the prospectus, he
withdrew his consent in writing before a copy of the prospectus was
lodged with the Registrar;88
(ii) that, after the copy of the prospectus was lodged with the Registrar
and before allotment or sale under the prospectus, he, on becoming
aware of the untrue statement, withdrew his consent in writing and
gave public notice of the withdrawal and of the reasons for the
withdrawal;89
(iii) that he was competent to make the statement and had reasonable
grounds to believe and did, up to the time of allotment or sale of the
shares or debentures, believe that the statement was true.90
Indemnification of persons named without their consent
Under the Acts in Anguilla, Antigua, the Bahamas, Barbados, Belize,

Dominica, Grenada, Guyana, Jamaica, Montserrat, St Lucia and St Vincent, any
person who authorises or causes the issue of a prospectus and the directors of
the company are liable to indemnify any person named in a prospectus as a
director of the company in either of two circumstances.91 The first is where the
prospectus contains the name of a person as the director of the company, or as
having agreed to become a director, and he has not consented to become a
director, or has withdrawn his consent before the issue of the prospectus and
has not consented to its issue.92 The second is where an expert has not given
his written consent to the inclusion of a statement in the form and content in
which it is included in the prospectus, or has withdrawn his consent before the
issue of the prospectus.93
In either of these two circumstances, the indemnity which may be claimed
is an indemnity against all damages, costs and expenses to which the wrongly
named director might be liable by reason of his name being inserted in the
prospectus or the inclusion therein of a statement purporting to be made by
the non-consenting expert, or in defending any action or legal proceedings
brought in respect thereof.94
Statutory Rescission and Repayment
Nature and scope of the remedy
The Acts in Antigua and Barbuda, Barbados, Dominica, Grenada, Guyana, St

Lucia and St Vincent and the Grenadines have abolished all rights to rescission
and restitution in equity and all rights to sue the company at common law for
deceit or for false statements made negligently in connection with
prospectuses.95 In substitution for these rights, the Acts contain provisions
conferring rights to rescission and repayment on shareholders and debenture-
holders against companies that have allotted shares or debentures under a
prospectus.96
The rescission right of shareholders or debenture-holders is to have all
shares or debentures under the prospectus rescinded. The claim for repayment
may be in respect of the whole or part of the issue price that has been paid in
respect of the shares or debentures.97 It is important to stress here, though, that
these statutory rights are against the company and are without prejudice to
claims by shareholders and debenture-holders for damages or compensation
against persons other than the company.98
Who may claim the remedy
The statutory right to rescission and repayment is expressly conferred on ‘a

shareholder or a debenture holder’. A ‘shareholder’ is defined in these Acts as
meaning the holder of any of the shares allotted under the prospectus,
whether the original allottee or a person deriving title under him.99 Similarly, a
‘debenture holder’ is defined as meaning the holder of any of the debentures
allotted under the prospectus, whether the original allottee or a person
deriving title under him.100 This means that the remedy of rescission and
repayment is not limited to the original allottee of shares or debentures but is
also available to a person claiming under such an allottee.
When may the remedy be claimed
To claim rescission and repayment under these Acts, the shareholder or

debenture-holder must establish either that the prospectus contained a
material statement, promise or forecast that was false, deceptive or
misleading,101 or that the prospectus did not contain a statement, report or
account required under the Acts to be contained in the prospectus.102 The
requirement that the prospectus contain a material statement, promise or
forecast is satisfied by showing that the statement, promise or forecast was
made in such a manner or context, or in such circumstances, as to be likely to
influence a reasonable man in deciding whether to invest in the shares or
debentures offered for subscription.103 In the same vein, a statement, report or
account is omitted from a prospectus if it is omitted entirely, or if it does not
contain all the information required by the Acts to be given in the statement,
report or account.104
In an action for rescission and repayment, the plaintiff does not have to
prove that he, or the person to whom the shares or debentures he holds were
allotted, was in fact influenced by the statement, promise or forecast that he
alleges to be false, deceptive or misleading, or by the omission of the report,
statement, or account required to be contained in the prospectus.105
However, the action must be brought not more than two years after the
first issue of the prospectus under which the shares or debentures were
allotted to the plaintiff or the person under whom the plaintiff derives title.106
Effect of rescission and repayment judgment
Where judgment is given in favour of a plaintiff for rescission and repayment,

the allotment of all shares or debentures under the same prospectus, whether
allotted to the plaintiff or the person under whom he derives title or to other
persons, is void.107 Judgment must be entered in favour of all such persons for
the payment by the company to them severally of the amount paid in respect
of the shares or debentures that they respectively hold.108 Where, on the other
hand, any shareholder or debenture-holder at the date judgment is so entered
signifies to the company in writing, whether before or after the entry of
judgment, that he waives his right to rescind the allotment of shares or
debentures that he holds, he is deemed not to be included among the persons
in whose favour judgment is entered.109
Effect of liquidation or insolvency of company on remedy
The right to rescission and repayment under the Acts is not affected by the
company’s being liquidated or ceasing to pay its debts as they fall due.110 In
the liquidation of the company, a repayment due under a rescission and
repayment judgment must be treated as a debt of the company payable
immediately before the repayment of the shares or debentures of the class in
question.111
In the case of the repayment of shares due under a rescission and
repayment judgment, repayment is payable before repayment of the capital
paid up on shares of the same class, and before any accumulated or unpaid
dividends or any premiums in respect of those shares, but after the payment of
all debts of the company and the satisfaction of all claims in respect of prior
ranking classes of shares.112 In the case of a repayment in respect of debentures
due under a rescission and repayment judgment, repayment is payable before
the repayment of the principal of the debentures of the same class, and before
any unpaid interest or any premium in respect of those debentures, but after
the repayment of all debts or liabilities of the company that the Acts require to
be paid before those debentures, and after the satisfaction of all rights in
respect of prior-ranking classes of debentures.113
Defences to rescission and repayment action
Two defences are available to a company in respect of statutory rescission and

repayment.114 The first is that the plaintiff was the allottee of the shares or
debentures in right of which the action was brought and that at the time they
were allotted to him he knew that the statement, promise or forecast of which
he complains was false, deceptive or misleading, or that he knew of the
omission from the prospectus of the matter of which he complains.115 The
second is that the plaintiff has received a dividend or payment of interest or
has voted at a meeting of shareholders or debenture-holders since he
discovered that the statement was false, deceptive or misleading, or since he
discovered the omission from the prospectus of the matter of which he
complains.116
An action for rescission and repayment may not be dismissed where there
are several plaintiffs merely because the company proves that one of the
foregoing defences is available to it.117 In any case in which the company has a
defence against a plaintiff or all of the plaintiffs, the court may instead of
dismissing the action, substitute some other shareholder or debenture-holder
of the same class as the plaintiff.118 Per contra, if a company would have a
defence but for the fact that the allottee of the shares or debentures in right of
which the action is brought has transferred or renounced them, the company
may bring an action against the allottee for an indemnity against any sum that
the court orders it to pay to the plaintiff in the action.119
Underwriting contracts and rescission and repayment
The provisions in the Acts relating to rescission and repayment apply to shares
and debentures allotted pursuant to an underwriting contract as if they were
allotted under the prospectus.120 Similarly, the provisions apply to shares or
debentures issued under a prospectus that offers them for subscription in
consideration of the transfer or surrender of other shares or debentures,
whether with or without the payment of cash by or to the company, as though
the issue price of the shares or debentures offered for subscription were the
fair value, as ascertained by the court, of the shares or debentures to be
transferred or surrendered, plus the amount of cash, if any, to be paid to the
company.121
Conclusion
The law governing liability for misleading prospectuses in the Commonwealth
Caribbean is to be found in common law contract and tort actions for
damages, in actions for rescission in equity, in actions available under statutes
of general application and in actions under the Companies Acts themselves.
The actions under the Companies Acts continue the theme highlighted in the
foregoing chapter. The prospectus provisions in these Acts in every territory,
except Jamaica, predated a legal framework regulating public trading of
corporate securities. The provisions on liability for misleading prospectuses
explored in this chapter are part of framework establish by these Acts to fill
this gap.
Notes
1 Bannerman v White (1861) 10 CBNS 844 Com Pleas; Routledge v McKay [1954] 1 All ER 855 Eng CA.
2 Re Oriental Commercial Bank, Alabaster’s Case (1868) LR 7 EQ 273; Re Metropolitan Fire Insurance Co,
Wallace’s Case [1900] 2 Ch App 322.
3 Re Tewkesbury Gas Co [1911] 2 Ch 279, affd [1912] 1 Ch 1 Eng CA.
4 [1964] AC 465 HL.
5 Ant s 318; B’dos s 304; Dom s 318; Gren s 318; Guy s 301; Mont s 318; St L s 318; St V s 318. Discussed
below.
6 Ant s 318(14); B’dos s 304(14); Dom s 318(14); Gren s 318(14); Guy s 301(14); Mont s 318(14); St L s 318(14); St
V s 318(14).
7 See generally Stoljar, Mistake and Misrepresentation (London: 1968); Spencer Bower, Turner and Handley,
The Law of Actionable Misrepresentation (4th edn London: 2000).
8 Maddison v Alderson (1883) 8 App Cas 467 Eng HL.
9 Bisset v Wilkinson [1927] AC 177 PC.
10 (1885) 29 Ch D 459, 483 Eng CA.
11 Bell v Lever Bros Ltd [1932] AC 161, 227 Eng HL per Lord Atkin.
12 Horsfall v Thomas (1862) 1 H & C 90 Eng Exch Ch.
13 (1873) LR 6 HL 337 Eng HL.
14 Ibid.
15 [1990] 3 All ER 321 Eng Ch D.
16 [1896] 1 QB 372 Eng CA.
17 (1889) 14 App Cas 337 Eng HL.
18 See Chapter 1.
19 [1954] AC 333 Eng HL.

20 (1880) 5 App Cas 317 Eng HL.
21 [1964] AC 465 Eng HL.
22 As to the requirements for a claim of negligent misrepresentation, see The Queen v Cognos (1993) 1 SCR 87,
110 SCC per Iacobucci J.
23 Le Lievre v Gould [1893] 1 QB 491 Eng CA; Candler v Crane, Christmas & Co [1951] 2 KB 164.
24 [1971] AC 793 PC.
25 [1971] AC 793, 805 PC.
26 (1995) 23 BLR (2d) 165 Ont CA.
27 (1978) 89 DLR (3d) 195 Fed CA.
28 Misrepresentation Act 1992.
29 Misrepresentation Act Chap 82: 35.
30 Howard Marine and Dredging Co Ltd v Ogden & Sons (Excavations) Ltd [1978] QB 574 Eng CA.
31 UCB Corporate Services Ltd v Thomason [2005] 1 All ER (Comm) 601.
32 Misrepresentation Act 1992 s (3)(1).
33 Karsberg’s Case, Re Metropolitan Consumers Association [1892] 3 Ch 1 Eng CA.
34 Ant s 318; B’dos s 304; Dom s 318; Gren s 318; Guy s 301; Mont s 318; St L s 318; St V s 318. Discussed below
in text accompanying nn 95–119.
V s 318(14).
36 See above text accompanying nn 7–16.
37 [1905] 1 Ch 326.
38 See, e.g., Solle v Butcher [1950] 1 KB 671 Eng CA; Leaf v International Galleries [1950] 2 KB 86 Eng CA;
Long v Lloyd [1958] 2 All ER 402 Eng CA.
39 Ant: Misrepresentation Act s 1; T’dad: Misrepresentation Act Chap 82:35 s 1.
40 Seddon v North Eastern Salt Co [1905] 1 Ch 326.
41 Hutton v Hutton [1917] 1 KB 813, 82 Eng CA.

42 Reese River Silver Mining Co v Smith (1869) LR 4 HL 64, 79 Eng HL.
43 Coles v White City (Manchester Greyhound Assn Ltd) (1928) 45 TLR 230.
44 Re Scottish Petroleum Co (1883) 23 Ch D 413, 438.
45 Discussed extensively in Chapter 4.
46 [1892] 3 Ch 1 Eng CA.
47 [1892] 3 Ch 1, 13 Eng CA.
48 Re Pacaya Rubber & Produce Co, Burn’s Application [1914] 1 Ch 542.
50 Ang s 184; Bel s 86; J’ca s 44.
51 St C/N s 30.
52 (1889) 14 App Cas 337 Eng HL.
314(1); St V s 314(1).
54 Ang s 184(1); Bah s 69(1); J’ca s 44(1).
55 St C/N s 30(1).
56 See Clark v Urquhart [1930] AC 28 HL (NI).
314(1); St V s 314(1).
58 Ang s 184(1); Bel s 86(1); J’ca s 44(1).
59 St C/N s 30(1).
60 See Ang s 184(1); Ant s 314(1); B’dos s 300(1); Dom s 314(1); Gren s 314(1); Guy s 297(1); Mont s 314(1); St L s
314(1); St V s 314(1).
61 Arnison v Smith (1889) 41 Ch D 348 Eng CA; Re VGM Holdings Ltd [1942] Ch 235 Eng CA; Governments
Stock and other Securities Investment Co v Christopher [1956] 1 All ER 490.
62 Arnison v Smith (1889) 41 Ch D 348 Eng CA; Re VGM Holdings Ltd [1942] Ch 235 Eng CA; Governments
Stock and other Securities Investment Co v Christopher [1956] 1 All ER 490.
63 See Ang s 184(1); Bel s 86(1); J’ca s 44(1).

64 Ang s 184(1); Ant s 314(1); Bel s 86(1); B’dos s 300(1); Dom s 314(1); Gren s 314(1); Guy s 297(1); J’ca s 44(1);
Mont s 314(1); St C/N s 30(1); St L s 314(1); St V s 314(1).
314(1).
66 Ang s 184(1); Bel s 86(1); J’ca s 44(1).
67 St C/N s 30(1).
68 Ang s 184(1); Ant s 314(1); Bel s 86(1); B’dos s 300(1); Dom s 314(1); Gren s 314(1); Guy s 297(1); J’ca s 44(1);
Mont s 314(1); St C/N s 30(1): prospectus must ‘relate’ to the securities; St L s 314(1); St V s 314(1).
69 Ang s 184(1); Ant s 314(1); B’dos s 300(1); Bel s 86(1); Dom s 314(1); Gren s 314(1); Guy s 297(1); J’ca s 44(1);
Mont s 314(1); St C/N s 30(1): worded differently; St L s 314(1); St V s 314(1).
72 Ang s 184(1)(a); Ant s 314(1)(a); B’dos s 300(1)(a); Bel s 86(1); Dom s 314(1)(a); Gren s 314(1)(a); Guy s 297(1)
(a); J’ca s 44(1)(a); Mont s 314(1)(a); St C/N s 30(1)(b); St L s 314(1)(a); St V s 314(1)(a).
73 Ang s 184(1)(b); Ant s 314(1)(b); B’dos s 300(1)(b); Bel s 86(1); Dom s 314(1)(b); Gren s 314(1)(b); Guy s 297(1)
(b); J’ca s 44(1)(b); Mont s 314(1)(b); St C/N s 30(1)(c); St L s 314(1)(b); St V s 314(1)(b).
74 Ant s 314(1)(c); B’dos s 300(1)(c); Dom s 314(1)(c); Gren s 314(1)(c); Guy s 297(1)(c); St L s 314(1)(c); St V s
314(1)(c).
75 Ang s 184(1)(c); J’ca s 44(1)(c).
76 Ang s 184(1)(d); Ant s 314(1)(d); B’dos s 300(1)(d); Bel s 86(1); Dom s 314(1)(d); Gren s 314(1)(d); Guy s 297(1)
(d); J’ca s 44(1)(d); Mont s 314(1); St C/N s 30(1)(d); St L s 314(1)(d); St V s 314(1)(d).
77 St C/N s 30(1)(a).
78 Ant s 314(2); B’dos s 300(2); Dom s 314(2); Gren s 314(2); Guy s 297(2); J’ca s 44(1); Mont s 314(2); St C/N s
30(2); St L s 314(2); St V s 314(2).
79 Ant s 314(2); B’dos s 300(2); Dom s 314(2); Gren s 314(2); Guy s 297(2); J’ca s 44(1); St C/N s 30(2); St L s
314(2); St V s 314(2).
80 St C/N s 31(a).
81 Ang s 184(2)(b); Ant s 314(3)(b); B’dos s 300(3)(b); Bel s 86(1)(c)(ii); Dom s 314(3)(b); Gren s 314(3)(b); Guy s
297(3)(b); J’ca s 44(2)(b); Mont s 314(3)(b); St L s 314(3)(b); St V s 314(3)(b).
82 Ang s 184(2)(c); Ant s 314(3)(c); B’dos s 300(3)(c); Dom s 314(3)(c); Gren s 314(3)(c); Guy s 297(3)(c); J’ca s
44(2)(c); Mont s 314(3)(c); St C/N s 31(c); St L s 314(3)(c); St V s 314(3)(c).
83 Ang s 184(2)(d)(i); Ant s 314(3)(d); B’dos s 300(3)(d); Bel s 86(1)(a); Dom s 314(3)(b); Gren s 314(3)(d); Guy s
297(3)(d); J’ca s 44(2)(d)(i); Mont s 314(3)(d); St C/N s 31(d): worded differently; St L s 314(3)(d); St V s 314(3)
(d).
84 Ang s 184(2)(d)(ii); Ant s 314(4)(a); B’dos s 300(4)(a); Dom s 314(4)(a); Gren s 314(4)(a); Guy s 297(4)(a); J’ca s
44(2)(d)(ii); Mont s 314(4)(a); St L s 314(4)(a); St V s 314(4)(a).
85 Ang s 184(2)(d)(iii); Ant s 314(4)(b); B’dos s 300(4)(b); Bel s 86(1)(c); Dom s 314(4)(b); Gren s 314(4)(b); Guy s
297(4)(b); J’ca s 44(2)(d)(iii); Mont s 314(4)(b); St L s 314(4)(b); St V s 314(4)(b).
86 Ang s 184(2)(a); Ant s 314(3)(a); B’dos s 300(3)(a); Bel s 86(c)(i), (ii) and (iii); Dom s 314(3)(a); Gren s 314(3)
(a); Guy s 297(3)(a); J’ca s 44(2)(a); Mont s St L s 314(3)(a); St V s 314(3)(a).
314(6); St V s 314(6).
314(6)(a); St L s 314(6)(a); St V s 314(6)(a).
314(6)(b); St L s 314(6)(b); St V s 314(6)(b).
90 Ant s 314(6)(c); B’dos s 300(6)(c); Dom s 314(6)(c); Gren s 314(6)(c); Guy s 297(6)(c); J’ca s 44(3)(c); Mont s
314(60(c); St L s 314(6)(c); St V s 314(6)(c).
St L s 314(7); St V s 314(7).
92 Ang s 184(3)(a); Ant s 314(7)(a); B’dos s 300(7)(a); Bel s 86(3); Dom s 314(7)(a); Gren s 314(7)(a); Guy s 297(7)
(a); J’ca s 44(4)(a); Mont s 314(7)(a); St L s 314(7)(a); St V s 314(7)(a).
93 Ang s 184(3)(b); Ant s 314(7)(b); B’dos s 300(7)(b); Bel s 86(3); Dom s 314(7)(b); Gren s 314(7)(b); Guy s 297(7)
(b); J’ca s 44(4)(b); Mont s 314(7)(b); St L s 314(7)(b); St V s 314(7)(b).
Mont s 314(7); St L s 314(7); St V s 314(7).
V s 318(14).
318(1).
V s 318(14).
318(2)(b); St V s 318(2)(b).
318(2)(a); St V s 318(2)(a).
318(1)(a); St V s 318(1)(a).
318(1)(b); St V s 318(1)(b).
318(3).
318(3).
318(4).
318(5).
318(6).
318(6).
318(6).
318(7).
318(7).
318(7)(a); St V s 318(7)(a).
318(7)(b); St V s 318(7)(b).
318(8).
318(8)(a); St V s 318(8)(a).
116 Ant s 318(8)(b); B’dos s 304(8)(b); Dom s 318(8)(b); Gren s 318(8)(b); Guy s 301(8)(b); Mont s 318(8)(a); St L s
318(8)(b); St V s 318(8)(b).
318(9).
318(9).
V s 318(10).
V s 318(12).
V s 318(13).
Chapter 21
Company Charges
Introduction
Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago contain
extensive provisions on company charges.1 The presence of these provisions is
predicated on the fact that, like any other borrower, a company is often
obliged by its creditors to provide security for the repayment of its debts.
A company obliged to provide security for its debt can use all of its present
and future assets as security. Land, whether freehold or leasehold, and the
fixtures and fittings attaching to it, tangible personal property such as the
company’s stock-in-trade (inventory) and intangible personal property such as
accounts receivable (debt) can all be used as security. In fact, charging these
corporate assets is one of the most common forms of security used in modern
corporate financing both in those Commonwealth Caribbean territories with
extensive provisions on company charges as well those without such
provisions.
It is evident from the foregoing that company charges is therefore an
extremely important topic in corporate secured debt financing in
Commonwealth Caribbean company law. Accordingly, this chapter presents a
detailed examination of the legal parameters of company charges. It explores
the legal nature of company charges, the statutory procedures for their
enforcement and the separate statutory system for the registration of these
charges.
Legal Nature of a Company Charge
Charges and security interests
What a company charge is is not defined in the Acts. The expression must,
therefore, be given its ordinary, accepted legal meaning.2 On this construction,
a company charge is a form of proprietary assignment given as security for a
company’s debt. Under a company charge, the debtor-company, as assignor,
vests in the creditor, as assignee, a proprietary right of nonpossessory control
which extends to the debtor-company’s right of free alienation of the property
appropriated to the charge.3 A charge is therefore a security interest.
Under the Companies Acts in Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago a charge is
defined as a security interest. ‘Security interest’ is defined in each of these Acts
as follows:4
For purposes of this Act ‘security interest’ means any interest in or charge upon any property of the
company, by way of mortgage, bond, lien, pledge or other means that is created or taken to secure the
payment of an obligation of the company.
In order to understand properly the legal nature of a charge, the rights

conferred on a secured charge holder and the system for the registration of
company charges, it is therefore essential to develop some understanding of
the definition of security interests in these Acts.
It is evident from the statutory definition that there are two fundamental
aspects to a security interest for purposes of these Acts. The first relates to the
essential quality of a security interest and the second to the methods by which
such an interest may be acquired.
With respect to the first aspect, the definition section stipulates that the
essence of a security interest is that it is a right given to a creditor in the
property of the company to secure the payment of an obligation owed by the
company to a creditor. It is submitted that, from this stipulation, a security
interest, either expressly or impliedly, embraces five important identifying
features.5
The first of these is that a security interest may arise only from a transaction
intended to create or give security.6 This feature is expressly provided for in
the definition which insists that a security interest must be created or taken ‘to
secure… payment’.
The second is that it is a right in rem.7 This is patently obvious from the
statutory definition which provides that a security interest is ‘any interest in or
charge upon any property of the company’. It is thus clear from this definition
that the creditor’s security right is a proprietary right exercisable against the
charged property.8
The third identifying feature is that a security interest within the statutory
definition may only be created by grant, and not by reservation.9 This is a
corrollary to the list of devices expressly set out in the definition namely,
‘mortgage, lien, pledge or other means’, by which a security interest may be
derived.10 As is argued hereafter, the expression ‘other means’ in the definition
can only be interpreted as pleonastic. It follows, therefore, that the categories
of security interest for purposes of the definition are closed, and that this being
so, a security interest must always lie in grant.
The fourth and fifth features are not expressly stated in the definition
section, but inhere in the essential nature of security.11 These are that, if fixed
or specific, a security interest implies a restriction on the company’s dominion
over the property concerned12 and that a security interest cannot be taken by
the company from its creditors over the company’s own obligation.13
Turning next to the security devices listed in the Acts by which a security
interest may be acquired. That list provides for a security interest to be
acquired ‘by way of mortgage, bond, lien, pledge or other means’. Each of
these will now be examined.
First, a mortgage does not present any difficulty of interpretation. Based on
the principle of interpretation that statutory expressions are to be given their
ordinary natural meaning,14 a mortgage within the statutory definition consists
of the transfer of ownership of the company’s property by way of security to
the company creditor upon the express or imputed condition that ownership
will be transferred to the company on the discharge of its obligation to
repay.15 A mortgage does not require delivery of possession of the company’s
property.16
Second, a bond within the contemplation of the statutory definition, on its
ordinary natural meaning, consists of an instrument issued by a company to
secure the repayment of money borrowed by the company. It consists of an
undertaking to pay principal and interest secured by hypothecation of the
property of the company. It is in essence a charge.
The reason the expression ‘bond’ is used in the statutory definition and not
the word ‘charge’ is because a mortgage of a legal estate in land in many
Commonwealth Caribbean territories can be effected at law only by ‘a charge
by deed’.17 The use of the word ‘bond’ therefore avoids the confusion which
may have resulted from the use of the word ‘charge’. For the foregoing
reasons, a bond means any charge other than a mortgage.
Third, on its ordinary meaning, a lien within the statutory definition is a
right in a company creditor to detain property of the company until money
owed by it to the creditor has been paid. A lien is thus a possessory security
created by contract (and sometimes by operation of law) but which does not
grant the creditor the right to sell the company’s property.18
Fourth, a pledge, on its ordinary meaning, is the actual or constructive
delivery of possession of property of a company to the creditor by way of
security. The interest of the creditor goes beyond a mere right to detain as
with a lien, and includes the right to use the property at the creditor’s risk and
the right to sell or assign his interest in the property.19
The expression ‘or other means’ in the statutory definition is problematic.
This expression, without more, suggests that a security interest may be
derived by way of security devices other than the four specifically listed,
namely, mortgage, bond, lien and pledge. In other words, the words ‘or other
means’, without more, appear to leave open the categories of security devices
by which security interests may be acquired. It is submitted, however, that the
express reference to ‘other means’ in the statutory definition does not suggest
a conclusion of open-endedness in the categories of security devices but rather
that the expression ‘other means’ is pleonastic, and consequently that the only
categories of security devices recognised by the definition are the four
specifically listed in that subsection.
Several arguments support this submission. The first is that the general
words ‘other means’ in the phrase ‘by way of mortgage, bond, lien, pledge or
other means’ are to be interpreted according to the ejusdem generis principle.20
As has already been seen, the only characteristic which is common to
‘mortgage, bond, lien, pledge’, the specific words used in the statutory
definition, is that they are all means of procuring a security interest. Beyond
this, they do not share any common characteristics, since, for instance,
mortgages and bonds are possessory securities, whereas liens and pledges are
non-possessory securities. Thus, applying the ejusdem generis rule, it is
impossible to import any meaning to the general words ‘or other means’ other
than ‘any other means of procuring a security interest.’ But this meaning
would be hopelessly tautological, since the statutory definition is intended to
provide a definition of the means of acquiring a security interest. Logically,
therefore, ‘other means’ must be viewed as being pleonastic.
The second argument rests on the fact that the statutory definition itself
appears to foreclose on devices, other than the four therein listed, satisfying
that subsection. The subsection, for instance, expressly limits a security interest
to ‘an interest in or charge upon any property of a company’. This means that
it is not possible to argue, for instance, that a retention of title clause can
confer a security interest as the interest secured by that device cannot by
definition be ‘in or upon the property of a company’. Similarly, the other
devices such as are employed by company creditors to procure security rights
to themselves procure rights of a personal non-proprietary nature and cannot
therefore be security interests as statutorily defined. These devices may
perform a security function, but do not do so by way of acquiring security
interests.
The third is that the classification of security contracts was recently
summarised by Millet LJ in Re Cosslett (Contractors) Ltd as follows:21
There are only four kinds of consensual security known to English law: (i) pledge; (ii) contractual lien; (iii)
equitable charge; and (iv) mortgage. A pledge and a contractual lien both depend upon delivery of
possession to the creditor. The difference between them is that in the case of a pledge the owner delivers
possession to the creditor as security whereas in the case of a lien the creditor retains possession of goods
previously delivered to him for some other purpose. Neither a mortgage nor [an equitable] charge depends
on the delivery of possession. The difference between them is that a mortgage involves a transfer of legal
or equitable ownership to the creditor, whereas an equitable charge does not.
Such direct judicial authority as there is on the point, then, supports the view
that the categories of security interests are closed. They are restricted to
pledges, liens, charges (bonds) and mortgages. There are no other means by
which a security interest may be created in law.
Finally, modern judicial exegesis is to the effect that the categories of
security interests are closed.22 Thus, where the courts have sought to give
effect to arrangements intended to perform a security function, they have
done so through the application of the substance over form doctrine and have
held such arrangements to be in substance one of the accepted security
devices, namely, a charge.23
A charge distinguished from personal rights
A charge may be contrasted with personal rights, such as rights of set-off,24

flawed assets arrangements,25 negative pledges,26 and subordination
agreements27 in unsecured loans. In all of these, the rights which accrue to the
creditors are of a personal, non-proprietary nature and are consequently not
security interests. As is seen in the foregoing description, the rights of a
creditor who is granted a charge are rights in rem.28
A charge distinguished from other forms of consensual real

security
A charge may also be contrasted with possessory securities, such as pledges

and liens, since, as has been seen,29 these involve the transfer of possession in
fact as well as the right to possession of the property appropriated. It may also
be conveniently added here that a charge is different from a mortgage, in that,
even though a mortgage is a non-possessory security, a mortgage, unlike a
charge, involves the transfer of the beneficial ownership in the title of the
property appropriated to it.30 These differences between a mortgage and a
charge have been rendered unimportant since the definition of security
interest in the Companies Acts has in effect assimilated the mortgage and the
charge, as regards available remedies.31
A charge and retention of title agreements
In light of recent developments in corporate credit and security, a charge may

be advantageously contrasted with retention of title by sellers agreements, or
as they are sometimes called, ‘Romalpa clauses’.32 A Romalpa clause in its
simple form is a term in a contract of sale of goods which stipulates that the
legal title to or property in goods is not to pass to the buyer until payment for
the goods has been received by the seller.33 More complex versions of the
Romalpa clause attempt, for instance, to retain title to raw materials after the
raw materials have lost their separate identity in the buyer’s manufacturing
process,34 or to obtain control over the proceeds of resale of goods into which
the raw materials have been mixed.35
The relationship between Romalpa clauses and charges has been
extensively explained in the cases.36 Two things emerge from these cases. The
first is that an effective retention of title clause is not a charge since the seller
merely reserves a right in his property and does not acquire any rights in the
buyer’s property.37 The second is that a clause which is drafted as a retention
of title agreement may be held to be a charge depending on the wording of
the particular contract involved and the commercial situation in which the
dispute arose. Thus in the English case of Re Curtain Dream plc,38 a retention
of title agreement was held to be a registrable charge. In that case, Curtain
Dream plc sold its entire stock of curtain fabric to CM Ltd for cash under an
arrangement which in the event entitled Dream Curtain plc to repurchase the
stock immediately on ninety days’ credit, subject to a retention of title by CM
Ltd until it received payment. The stock was not physically moved
corresponding to the separate parts of this transaction. Knox J held that what
occurred should be treated as a total transaction. Thus analysed, the retention
of the title agreement amounted to a charge on Curtain Dream plc’s fabric as
security for a loan made by CM Ltd.
In the English Court of Appeal case of Borden (UK) Ltd v Scottish Timber
Products Ltd,39 on the other hand, a retention of title agreement was held not
to be a charge. In this case, Borden supplied resin, which was one constituent
of the bonding medium used by STP Ltd in the making of chipboard. The
contract between Borden and STP Ltd contained a retention of title clause
which Borden argued gave them a charge on a certain percentage of the
chipboard that had been made using its resin. The court rejected this argument
on the basis that in the circumstances of the case, and in particular the fact that
Borden’s resin was inseparably mixed with other constituents, it was
impossible to determine what proportion of the value of the finished product
could be attributed to any specific raw material.
Determining Whether a Charge Exists
There is usually no difficulty in determining whether parties have created a
charge (even though the question whether the charge is a fixed or floating
charge can pose difficulties). In cases of doubt, the rule is that it is a question of
construction whether a transaction gives rise to a charge.
The basic rule of construction is that a charge may only arise from a
transaction intended to create a charge. In determining whether a charge is
intended to be created in a given transaction, the courts will have regard to
the substance of the transaction and not merely to its form. This point was
made by Russell LJ in the English case of Stoneleigh Finance Ltd v Phillips.40
He observed there that the provisions for registration of charges on company
property cannot be evaded ‘by making what is in fact a charge in form an
absolute assignment, or otherwise adopting a form which does not accord
with the real transaction between the parties’.41 The same point was made by
Slade J in the English case of Re Bond Worth Ltd, where he said:42
In my opinion, any contract which, by way of security for payment of debt, confers an interest in property
defeasible or destructible upon payment of such debt, or appropriates such property for the discharge of
the debt, must necessarily be regarded as creating a mortgage or charge, as the case may be.
Put simply, in determining whether a charge is intended, the emphasis is on

the substance or reality of the contract, not on the words used.
Types of Company Charge
Overview
Basically, there are two types of company charge. These are fixed charges and
floating charges. These two types of charge may advantageously be
considered separately. As these different types of company charge have
significantly different consequences for a charge holder, the courts do not
simply accept the labels attached by the debtor-company and the charge
holder in deciding whether a charge is a fixed charge or floating charge.
In the New Zealand Privy Council case of Agnew v Commissioner of Inland
Revenue (also known as Re Brumark),43 Lord Millett outlined the approach of
the court to determining the question whether a charge is to be classified as
fixed or floating. He said:44
in deciding whether a charge is a fixed charge or a floating charge, the court is engaged in a two stage
process. At the first stage, it must construe the instrument of the charge and seek to gather the intentions of
the parties from the language they have used… the object of this of the process… is to ascertain the nature
of the rights and obligations which the parties intended to grant to each other in respect of the charged
assets. Once these have been ascertained, the court can then embark on the second stage of the process,
which is one of categorisation [which] is a matter of law.
This approach was approved in the English House of Lords’ decision in Re

Spectrum Plus Ltd,45 where it was held that in characterising a charge as a
fixed or floating charge, the crucial determinant is the freedom of the
company to use the assets in the ordinary course of business, not the nature of
the assets charged.
Fixed charges
The legal nature
A fixed or specific charge may be described as a charge that attaches to a

particular piece of property which is identified when the charge is created and
whose identity does not change during the subsistence of the charge.46 This
occurs because, immediately a fixed charge, other than a legal mortgage, is
granted, then by virtue of the terms of the debenture, a proprietary interest is
absolutely and irrevocably47 transferred by way of a specific equitable
assignment to the debenture-holder.48 In the case of a legal mortgage, the
transfer is of both the proprietary interest as well as the legal interest.49 The
transfer of the proprietary interest, and in the case of the legal mortgage, the
property in the secured asset means that the company cannot deal with the
charged assets without the consent of the debenture-holder.50
A fixed charge may be created in equity over future corporate assets.51 This
is possible because, in equity, the proprietary interest does not pass at the time
of the debenture.52 The transfer takes place at the time when the assets come
into the possession of the debtor as an identifiable object.53 The charge
becomes effective as from this moment.54
Typically, corporate assets which are the subject matter of a fixed charge
are those assets which are not usually employed in the day-to-day business of
the company. It may be useful to consider the most commonly used of these.
Land
Land is one of the most common corporate asset which is made subject to a
fixed charge. This is usually done by way of legal mortgage where the
company has a legal interest in the land. Where the company has either a legal
or equitable interest in the land, it may create an equitable mortgage in
respect of this interest.55
Fixed plant and machinery

‘Fixed plant and machinery’ is also commonly subjected to a fixed legal or
equitable charge. In the English case of Re HiFi Equipment (Cabinets) Ltd,56
Harman J held that the expression ‘fixed plant and machinery’ is to be
construed as containing a single item, and that it connotes plant and
machinery which is in some way firmly attached to the company’s premises.
Henry J, in the New Zealand High Court case of National Bank of New
Zealand Ltd v CIR,57 adopted a similar approach to the expression. He held in
that case that a specific charge over fixed plant and machinery did not include
computer software. In arriving at this conclusion, Henry J refused to follow
Jeffries J in the earlier New Zealand decision of Tudor Heights Ltd v United
Dominion Corpn Finance Ltd,58 in which it had been decided that the
expression did not connote ‘fixtures’ as that term is used in land law but
merely meant assets which would be expected to be retained by the company
in its business.
Book debts (receivables)
One corporate asset which has spawned a considerable body of complex

jurisprudence as to whether it can be the subject matter of a fixed charge is
book debts or, as it is now sometimes called, receivables.59 Book debts or
receivables are amounts owed to the company as a result of the supply of
goods and services by the company in the course of its business. Book debts
therefore represent an income stream for the company over which creditors
may take security, but which, at the same time, constitute an important part of
the company’s cash flow. The practical and jurisprudential challenge presented
in the use of book debts as security is to reconcile the creditors’ wish for fixed
security to gain priority on insolvency with the company’s wish to have some
control over the use of the proceeds of book debts in its day-to-day business.60
Before the English case of Siebe Gorman & Co Ltd v Barclays Bank61 in
1978, it used to be assumed in the Commonwealth Caribbean that a fixed
charge could not be created over assets of a shifting character such as book
debts.62 In Siebe Gorman & Co Ltd v Barclays Bank,63 however, it was firmly
established that as a general principle a valid fixed charge can be created over
book debts. In this case a charge in a debenture which prohibited the debtor-
company from disposing of the charged debts without the plaintiffs’ consent,
which also required that the proceeds of the debts be paid into a blocked
account, but which left the debtor-company free to use the funds in the
account was held to be a valid fixed charge.
The English House of Lords’ decision in Re Spectrum Plus Ltd, National
Westminister Bank plc v Spectrum Plus Ltd (hereinafter Re Spectrum Plus)64
had to consider a charge over book debts expressed in the same terms as that
in Siebe Gorman & Co Ltd v Barclays Bank.65 The charge stated as follows:
With reference to the book debts and other debts hereby specifically charged the company shall pay into
the company’s account with the bank all moneys which it may receive in respect of such debts and shall
not without the prior consent of the bank sell factor discount or otherwise charge or assign the same in
favour of any person or purport to do so and the company shall if called upon so to do by the bank from
time to time execute legal assignments of such book debts and other debts to the bank.
Provided the overdraft limit was not exceeded, the company was free to draw
on the account, a current account, in the ordinary course of business.
In a decision that overruled Siebe Gorman & Co Ltd v Barclays Bank’s66
classification of the clause in question as a fixed charge, the House of Lords
held that the charge was not a fixed charge but a floating charge. This was
held to be so because the charge did not impose any restrictions on the
company’s right to operate the account. Re Spectrum Plus67 did not therefore
deny that a fixed charge can be created over book debts. Rather, that case was
a particular application of the general principle that a charge is to be regarded
as fixed if and only if the charge imposes a legal obligation on the chargor to
preserve the charged assets, or their permitted substitutes, for the benefit of
the chargee.
Another case which supported the proposition that book debts could be the
subject matter of a valid fixed charge is the English Court of Appeal decision
in Re New Bullas Trading Ltd.68 According to this case, where a charge
expressly restricts the debtor-company dealing with the charged debts, which
restricts the debtor-company dealing with the proceeds of the debt, but which
also expressly permits the debtor-company to deal with the proceeds of the
charged debts in specified circumstances, a valid fixed charge may be created.
The facts of Re New Bullas Trading Ltd are that a debenture contained what
was express to be a fixed charge over book debts and a floating charge over
the remainder of the company’s property and assets. The debenture also
contained clauses:
(i) requiring the debtor-company to deal with the debts in accordance

with any directions given by the debenture-holder from time to time,
but in the absence of such directions, to deal with the debts in the
ordinary course by getting them in, and not to sell, assign, factor or
discount the same;
(ii) requiring the debtor-company to pay the moneys received from the
debts into a separate designated account of that company with a
nominated bank and to deal with such moneys in accordance with any
directions given from time to time by the debenture-holder; and
(iii) providing that in the absence of any directions from the debenture-
holder under (ii) above, upon payment into the designated account, the
moneys would stand released from the fixed charge on debts and
would be subject only to the floating charge over the other property
and assets of the debtor-company.
A question arose as to whether, in the absence of any directions by the

debenture-holder, these provisions created a fixed or a floating charge.
It was held by Knox J at first instance that the freedom given to the debtor-
company to deal with the proceeds of the debts meant that the charge created
over the debts was a floating charge only. The Court of Appeal reversed this
decision and held that the terms of the debenture created a fixed charge.
According to the Court of Appeal the debenture satisfied the requirements of
a fixed charge since it stated that the debts did not cease to be subject to a
fixed charge solely at the will of the debtor-company, but only pursuant to an
express agreement of the parties that, once the proceeds of the debt were paid
into a designated account, the debt would be released from the fixed charge.
The decision of Re New Bullas Trading Ltd was considered to be wrongly
decided by the Privy Council in the New Zealand case of Re Brumark69 while
adjudicating on a charge closely modelled on the charge in Re New Bullas
Trading Ltd. In Re Brumark, the company created in favour of its bank a fixed
charge over all book debts of the company arising in the ordinary course of its
business and their proceeds. However, those proceeds of the book debts which
were received by the company were excluded from the fixed charge unless
the bank required them to be paid into an account with itself which the
company could not operate freely. If the bank so ordered, the proceeds were
to be treated as being subject to the fixed charge. If, however, the bank did not
so order, the proceeds were subject to a floating charge in favour of the bank.
The question was whether the charge over the uncollected book debts which
left the company free to collect them and use the proceeds in the ordinary
course of business was a fixed charge or a floating charge.
The Privy Council held that it was not a fixed charge but a floating charge.
Lord Millett, who delivered the judgment of the Court, stated in respect of the
fact that different charges were assigned to the debts and the proceeds as
follows:
While a debt and its proceeds are two assets, however, the latter are merely the traceable proceeds of the
former and represent its entire value. A debt is a receivable; it is merely a right to receive payment from
the debtor. Such a right cannot be enjoyed in specie; its value can be exploited only by exercising the right
or by assigning it for value to a third party. An assignment or charge of a receivable which does not carry
the right to the receipt has no value. It is worthless as a security. Any attempt in the present context to
separate the ownership of their proceeds (even if conceptually possible) makes no commercial sense.
Lord Millett expressed the view that the critical question in determining
whether a charge on a book debt is fixed or floating is who has control of the
proceeds. In other words, the issue is whether the charged assets are intended
to be under the control of the chargor or the charge holder. If control is
intended to in the charge holder, then the charge is a fixed charge, if in the
chargor, then the charge is a floating charge. In the present case, the
company’s freedom to collect and use the proceeds of the book debts for its
own benefit was inconsistent with the nature of a fixed charge.
It is important to note that neither the Privy Council in Re Brumark nor the
House of Lords in Re Spectrum Plus, which overruled Re New Bullas Trading
Ltd, denied that it is possible to create a fixed charge over book debts.
However, the very restrictive definition of fixed charge adopted in these cases
makes it extremely difficult to impose the degree of control over the proceeds
required by this definition without significantly compromising the company’s
ordinary business activities.
Floating charges
Settled aspects of the nature of the floating charge
The floating charge was first recognised in Commonwealth Caribbean law as

a security available to company creditors in a series of English cases in the
1870s.70 Today, the exact juridical nature of the floating charge has been
substantially worked out, even though there still remain some areas of
intractable difficulty.71
It is now well settled that a floating charge is an immediate equitable
charge on the assets of the company for the time being, which, unlike a fixed
charge, remains unattached to any specific property until crystallisation, when
it settles and becomes a fixed equitable charge. This was firmly laid down by
Lord McNaughten in the English House of Lords in Government Stock
Investment and Securities Co v Manilla Co Rly Ltd, where he said:72
A floating security is an equitable charge on the assets for the time being of a going concern. It attaches to
the subject charged in the varying conditions in which it happens to be from time to time. It is of the
essence of such a charge that it remains dormant until the undertaking charged ceases to be a going
concern, or until the person in whose favour the charge is created intervenes.
Lord McNaughten buttressed this formulation in the English House of Lords’

decision of Illingworth v Houldsworth, when he stated:73
I should have thought there was not much difficulty in defining what a floating charge is in contrast to
what is called a specific charge. A specific charge I think is one that without more fastens on ascertained
and definite property or property capable of being ascertained and defined; a floating charge, on the other
hand, is ambulatory and shifting in its nature, hovering over and so to speak, floating with the property
which it is intended to affect until some event occurs or some act is done which causes it to settle and
fasten on the subject of the charge within its reach and grasp.
The floating charge therefore secures to company creditors an immediate

security interest over future assets of the company and, at the same time,
leaves the company at liberty to deal with its assets in the ordinary course of
business, as it thinks fit, before crystallisation.
Unsettled aspects of the floating charge
There are three troublesome aspects of the floating charge which remain
unsettled, and which present tremendous difficulty. These include explaining
the nature of the interest created by the floating charge before crystallisation,
providing a theoretical basis for the power of the company to carry on
business notwithstanding the existence of a floating charge on its assets, and
explaining various aspects of crystallisation.
Nature of the interest created by floating charge
The first aspect of the floating charge that is not settled is whether the floating
charge creates a proprietary interest in the charge holder before crystallisation.
In Evans v Rival Granite Quarries Ltd74 it was decided by the English Court of
Appeal that it did not. Buckley LJ explained in that case that:75
A floating security is not a future security, it is a present security, which presently affects all the assets of
the company expressed to be included in it. On the other hand, it is not a specific security, the holder
cannot affirm that the assets are specifically mortgaged to him.
This view of the law was accepted in the Canadian case of Ontario
Development Corporation v Synatac Construction Ltd,76 where Horsland JA
stated that ‘[the] floating charge gives a present security from the time when
it is given, but does not create a specific security until it is crystal-lised.’77
Similarly, in the Australian case of Tricentennial Corporation Ltd v Federal
Commissioner of Taxation,78 it was held that a debenture-holder is entitled to
obtain an injunction to prevent a company from dealing with assets otherwise
than in the ordinary course of business, but that it had no proprietary right to
the assets which were subject to the debenture prior to crystallisation. In that
case Williams J expressly stated that ‘prior to crystallisation the holder of a
mortgage debenture has no proprietary interest’.79
Whereas the foregoing authorities suggest that the interest of the
debenture-holder before crystallisation amounts to, at most, what has been
described as ‘a mere equity or bundle of equities’,80 there are two situations in
the cases where the interest of the debenture-holder before crystallisation has
been recognised as being more than a ‘mere equity’. The first is where a
floating charge extends to land. Here it has been held that the interest of the
debenture-holder is an interest in the land for the purpose of the English
Statute of Frauds and that he is entitled to redeem the mortgage whether or
not the floating charge has crystallised.81 The other relates to the debenture-
holder’s interest where a transaction involving the assets comprised in the
charge is alienated not in the ordinary course of business. It has been held that
such a transaction is subject to the equitable charge even though crystallisation
has not taken place.82
Theoretical basis of power to carry on business
The second aspect of the floating charge which is not settled is the theoretical
basis of the power of the company to carry on business notwithstanding the
existence of a floating charge on its assets. In this regard, there are two major
competing theories.83 These are what have been referred to as ‘the licence
theory’ and ‘the mortgage of future assets theory’.84 According to the licence
theory, the floating charge fixes on the assets subject to it when the chargor
acquires a proprietary interest in them. The chargor has power to trade with
these assets because he is granted an implied licence by the chargee so to do.85
This theory was explained by Slade J in Re Bond Worth Ltd as follows:86
the mortgagee [gives] the company licence to use all the property comprised in the charge for the purpose
of its business until the licence comes to an end at crystallisation.
By contrast the mortgage of future assets theory explains the company’s
power to deal with the assets comprised in the charge by asserting that the
charge, while applying to all assets comprised in the charge, does not attach
specifically to any of the assets until crystallisation. The company is therefore
free to carry on business using the charged assets.
There are dicta in the cases to support both theories,87 but there is no clear
authority favouring either of them over the other. Notwithstanding the
doctrinal difficulties of explaining the company’s power to dispose of assets in
the ordinary course of business this power is firmly established as part of the
law relating to floating charges.88 Transactions which have been recognised as
being in the ordinary course of business include sales, leases, mortgages,
charges, liens, payments of debts and other transactions related to the carrying
on of the company’s business.89
Crystallisation
The third area of the floating charge where there is some doctrinal uncertainty
in the law is that of ‘crystallisation’. Crystallisation is perhaps the most critical
stage in the operation of the floating charge. When the floating charge
crystallises, it is converted into a fixed equitable charge on the assets of the
company.90 The assets comprised in the floating charge, identified at the
moment of crystallisation, are assigned in equity to the debenture-holder.91
The consequence of this is that a proprietary interest in the charged assets
passes to the debenture-holder.92 With the transfer of the proprietary interest
the company loses its right to carry on business and to deal freely with the
charged assets and thereafter can only apply these assets for the purpose of
satisfying the secured claims.93 The real question then is this: what events
cause a floating to crystallise?
The law appears to be well settled that the occurrence of either of two
events cause a floating charge to crystallise. These are: (i) where a company
goes into liquidation, whether such liquidation is of a compulsory or voluntary
nature;94 and (ii) where a receiver or receiver-manager is appointed.95 With
respect to the second event, the English authorities hold that crystallisation
does not occur merely because steps are being taken to appoint a receiver.96
There is, on the other hand, Canadian authority suggesting that, at least in
the case of court-appointed receivers, the mere taking of steps to appoint the
receiver may be enough.97
In the English case of Re Woodroff’s (Musical Instruments) Ltd,98 it was
decided that another event which occasions crystallisation is where the
company ceases to be a going concern or to carry on business. In this case,
Nourse J noted that although this event had been claimed to be an event
which causes crystallisation, there was no decision directly on point. In his
view, such authority as there was disclosed a uniform assumption in favour of
crystallisation in these circumstances, a position with which he agreed. Nourse
J also pointed to the distinction which was sought to be made between a
company ceasing ‘to be a going concern’ and a company ceasing ‘to carry on
business’,99 and opined that ‘these phrases are used inter-changeably in the
authorities’.100 The better view of the law, therefore, appears to be that when a
company ceases to be a going concern or to carry on business the floating
charge crystallises.
Another event which has been held to be a crystallisation event is, if the
debenture so provides, when the debenture-holder gives notice that the
floating charge is converted into a fixed charge on whatever assets are owned
by the company at the time that notice is given. The English case which
decided this is Re Brightlife Ltd.101 In this case, a debenture created a floating
charge over ‘the undertaking and all other property, assets and rights
whatsoever present and future’. The debenture also gave the debenture-holder
a right at any time to convert the floating charge into a fixed charge as
regards any assets specified in the relevant notice. The debenture-holder
served notice pursuant to this right before the company went into liquidation.
It was held that the notice operated effectively to crystallise the floating
charge.
There is some authority which suggests that a floating charge may
crystallise into a fixed charge where the company deals with charged assets
otherwise than with a view to carrying on its business.102
An area in the law relating to crystallisation which remains very unsettled is
that of the legal effectiveness of what are referred to as ‘automatic
crystallisation clauses’.103 Automatic crystallisation clauses are clauses found in
debentures which provide for the floating charge to crystallise on the
occurrence of specified events of default and this whether or not the
debenture-holder knows that the event has occurred and whether or not the
debenture-holder wants to enforce the charge as a result of the happening of
the event.
An evaluation of the case law indicates that the older authorities, without
deciding the issue, point to the theory that automatic crystallisation clauses are
legally ineffective. For instance, in the English House of Lords decision in
Government Stock and Other Securities Investment Co Ltd v The Manila
Railway Co,104 Lord McNaughten commented on the general issue of whether
intervention by a chargee was necessary to occasion crystallisation of a
floating charge follows:105
It is the essence of such a charge that it remains dormant until the undertaking charged ceases to be a
going concern, or until the person in whose favour the charge is created intervenes. His right to intervene
may of course be suspended by agreement. But if there is no agreement for suspension he may exercise his
right whenever he pleases after default.
This statement strongly suggests that intervention by the chargee is necessary.

Indeed, in the English Court of Appeal decision in Evans v Rival Granite
Quarries Ltd,106 Fletcher Moulton LJ was even more direct. He said:107
Mere default on the part of the company does not change the character of the security; the debenture
holder must actually intervene.
One of the older cases which has sometimes been relied on as supporting
automatic crystallisation is Davey & Co v Williamson & Sons Ltd.108 This case
has, however, been explained as a case of crystallisation on the bases of
cessation business.109
The more recent cases are somewhat equivocal but on balance appear to
incline in favour of the effectiveness of automatic crystallisation. The validity
of automatic crystallisation was upheld in cases such as the New Zealand case
of Re Manurewa Transport Ltd,110 the Australian cases of Deputy Federal
Commissioner of Taxation v Horsburgh111 and Fire Nymph Products Ltd v The
Heating Centre Pty Ltd112 and the English case of Re Brightlife.113 On the other
hand, cases such as the Canadian case of The Queen v Consolidated Churchill
Ltd114 and the Australian case of Norgard v Deputy Commissioner of
Taxation115 have rejected the concept of automatic crystallisation.
It is submitted that the crux of the doctrinal problem associated with
automatic crystallisation lies in whether parties are free to contract in respect
of crystallisation events.116 If they are, then automatic crystallisation clauses
are ipso jure legally valid; if they are not, but their contractual freedom is
restricted, then such clauses are invalid. The better view appears to be that
courts have no legal basis on which to ignore the contractual agreements of
parties.
Registration of Charges
General comment
Regional Companies Acts in Antigua, Barbados, Dominica, Grenada, Guyana,

Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago contain a
substantial body of provisions governing the registration of company charges
designed to provide creditor protection in respect of the security afforded by
these charges. Under these Acts, failure to observe these registration
requirements could have significant consequences for the value of charges as
security. It is therefore necessary to consider these provisions in detail.
In Antigua, Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat, St

Lucia, St Vincent and Trinidad and Tobago, the Registrar of Companies is
required by the Companies Acts to keep a register of company charges.117 This
register of charges is the linchpin of creditor protection, as it is the register to
which creditors may revert to ascertain whether or not a company has
encumbered its assets and, if so, the extent to which its assets are encumbered.
Where a charge required to be registered under these Acts is created by a
company that company must lodge with the Registrar of Companies two
documents for registration by him in the register of charges.118 These
documents are a statement of charge119 and, either any instrument by which
the charge is created or evidenced,120 or a copy of that instrument together
with a statutory declaration verifying the copy as being a true copy of the
instrument.121 The statement of charge must contain the following particulars:
(i) the date of the creation of the charge;122

(ii) the nature of the charge;123
(iii) the amount secured by the charge or the minimum sum deemed to
be secured by the charge;124
(iv) short particulars of the property charged;125
(v) the persons entitled to the charge;126 and
(vi) in the case of a floating charge, the nature of any restriction on the
power of the company to grant further charges ranking in priority to
or equal with the charge thereby created.127
Where a company creates a series of debentures containing a charge to the

benefit of which the debenture-holders of that series are entitled equally, the
particulars to be included in the statement of charge are different.128 Here, in
addition to the particulars just listed at (ii), (iv) and (vi) in respect of an
ordinary statement of charge, the statement of charge must contain the
following particulars:
(i) the total amount secured by the whole series;129

(ii) the date of the resolutions authorising the issue of the series and the
date of any covering instrument by which the security interest is
created;130 and
(iii) the name of the trustees for the debenture-holders.131
In Jamaica, in addition to the foregoing particulars, the statement must contain

a general description of the property charged.132
In the case of a series of debentures containing a charge also, the statement
of charge must be accompanied by the instrument containing the charge or a
copy of that instrument and a statutory declaration verifying the execution of
the instrument and verifying the copy to be true.133 If there is no such
instrument, then the statement must be accompanied by a copy of one of the
debentures of the series and a statutory declaration verifying the copy to be a
true copy.134
The obligation to register a charge on a company’s assets is the sole
responsibility of the company creating the charge.135 Where the company has
not registered a charge, any person interested in that charge has a right to
protect his interest by registering the charge.136 Any person who incurs
expenses in registering a charge, may recover those expenses from the
company.137
Registration of charge on acquisition
A company is under an obligation under regional Acts with provisions on the

compulsory registration of charges, to lodge specified particulars with the
Registrar of Companies for registration where it acquires any property that is
subject to a charge of any kind that would, if it had been created by the
company after the acquisition of the property, have been required to be
registered.138 This requirement is important, since a potential creditor wants to
know not only what charges have been created by the company, but also the
extent to which any of the company’s assets are charged.
The particulars which must be registered are a statement of charge,139 a
statement of the date of acquisition of the property,140 and the instrument by
which the charge was created or is evidenced, or a copy thereof.141 These
particulars must be accompanied by a statutory declaration verifying the
execution of the instrument and also verifying the copy as being a true copy of
the instrument.142
The foregoing particulars must be lodged with the Registrar of companies
within twenty-eight days in all territories (except Jamaica and Trinidad and
Tobago where the period is twenty-one days and thirty days respectively)
after the date on which the acquisition of the property was completed.143 In all
territories except in Jamaica, it is expressly provided in the Acts that failure by
a company to lodge these particulars for registration does not affect the
validity of the charge concerned.144 This result is implied in the Jamaican Act
in a provision that states that such a failure renders the company and every
officer of the company who is in default liable to a fine not exceeding 50,000
dollars.145
When once the documents required to be lodged with the Registrar of

Companies have been so lodged, the Registrar is obliged to issue a certificate
of registration stating, where applicable, the amount secured by the charge or
in the case of a charge securing a fluctuating amount, the maximum amount
secured by the charge.146 Such a certificate constitutes conclusive proof that
the requirements as to registration have been complied with.147 It appears
from the cases that the certificate will be held to be conclusive even where the
particulars lodged with the Registrar are defective.148 In fact, it seems that the
conclusiveness of the certificate cannot be challenged except possibly on
grounds of fraud or manifest error.149
It is apparent from the foregoing that the rule as to the conclusiveness of
the certificate can operate unfairly. For instance, the validity of the certificate
may be upheld where a date is inserted into a charge sometime after its
creation, which is then registered on the basis of that date.150 The rule,
however, does possess the advantage of giving to a debenture-holder who
appoints a receiver under a registered charge, the assurance that the charge is
not impeachable for want of registration. In turn, purchasers of a company’s
property from a receiver can rely on the certificate as evidence of his power of
sale.
Registration with the Registrar of Titles
Under the Barbados Companies Act, but not under the other Companies Acts,
special registration requirements apply where a charge created by a company
affects land owned by that company. In such a case, the company must lodge
with the Registrar of Titles151 a copy of the instrument creating or evidencing
the charge, together with a statutory declaration verifying the execution of the
charge and also verifying the copy as being a true copy of the instrument.152
Of course, the obligation to register land charges with the Registrar of Titles is
in addition to the duty to register the charge with the Registrar of Companies.
Charges requiring registration
The law governing which charges must be registered is statutorily regulated

under regional Acts with provisions on the compulsory registration of
charges.153 A provision in these Acts stipulate that, subject to certain specified
exceptions,154 ‘all charges created by a company’ must be registered.155 It is
clear from this provision that the issue of what charges are to be registered is
to be resolved on three considerations. The first is whether the right or interest
which is created constitutes a ‘charge’. The second is whether the ‘charge’ is
‘created’ by the company. The third is, assuming a charge has been created by
the company, whether that charge falls into any of the statutorily listed
exceptions.156 It is only where these three conditions are present that an
obligation to register arises. It is of crucial importance, therefore, to examine
these considerations more closely.
The first consideration, namely, when the transaction constitutes a charge,
has already been fully explored in this chapter.157 The second question, namely,
what constitutes a charge ‘created’ by a company will be now explored.
None of the Acts provide any statutory definition of what constitutes a
charge created by a company. Consequently the expression ‘created’ must be
given its ordinary, natural meaning. As a charge can only arise by way of a
contractual arrangement, it follows that a charge is ‘created’ by a company
only where the company contracts to create a charge. A company does not
therefore ‘create’ a charge where, for instance, a charge such as a vendor’s lien
for unpaid purchase money arises by operation of law.158 If, however, the
company by contract expressly provides for a consequence which arises by
operation of law, the company will be held to have ‘created’ a charge.
Thus, in the English case of Tatung (UK) Ltd v Galex Telesure Ltd,159 a
retention of title agreement provided that the purchaser company was to deal
with the goods as agent of the supplier, as security for the payment of debts
owed to the supplier. The agreement did not expressly impose upon the
purchaser any obligation to account for the proceeds of reselling the goods.
This obligation only arose, therefore, by operation of law as one of the legal
incidents of an agency relationship. On these facts, Phillip J held that the
supplier’s right to an account against resale proceeds arose out of the security
arrangement created by the purchaser, and therefore constituted a registrable
charge created by the purchaser company on its book debts.
Needless to say, an agreement to create a security at some future date does
not constitute a charge created by a company. It is only when the security is
actually given, that the charge is created.160
The third consideration, namely, whether the charge falls into one of the
statutory exception is easily resolved by having regard to the list of securities
enumerated in all the Acts, except the Jamaica Act, which, when created by a
company, are not required to be registered by the company.161 These are, first,
‘any pledge of, or possessory lien on goods’162 and secondly, ‘any charge by
way of pledge, deposit or trust receipt, or bills of lading, dock warrants or
other documents of title to goods, or of bills of exchange, promissory notes or
other negotiable securities for money’.163 It will be noticed that the securities
listed in the exception fall into one of two categories. The first category
consists of those securities where the creditor is entitled to possession of goods
or possession of the documents of title to goods. The second consists of
securities which are negotiable instruments. Both categories, unlike charges,
are possessory securities.
The approach in Jamaica in respect of this third consideration is different
from that in the other regional Acts. In Jamaica, section 93(3) of the
Companies Act lists the charges which must be registered under that Act.
These include (a) a charge for the purpose of securing any issue of
debentures;164 (b) a charge on uncalled share capital of the company;165 (c) a
charge created or evidenced by an instrument which, if executed by an
individual, would require registration as a bill of sale;166 (d) a charge on land,
wherever situated, or any interest therein but not including a charge for any
rent or other periodical sum issuing out of land;167 (e) a charge on book debts
of the company;168 (f) a floating charge on the undertaking or property of the
company;169 (g) a charge on calls made but not paid;170 (h) a charge on a ship
or any share in a ship;171 (i) a charge on goodwill, on a patent or a licence
under patent, on a trade mark or on a copyright or a licence under a
copyright.172
Except in the Jamaican Act, the only statutory indication as to the effect of due
registration of a charge required to be registered under the Acts is that such
registration ensures that the charge cannot be held void.173 No provision is
made in these other Acts as to what effect, with respect to notice, registration
of a charge by a company in accordance with the Acts has on third parties
dealing with that company. The principles applicable to the effect of
registration on the notice of subsequent charges must therefore be sought in
case authority.
It is well established that registration of a charge required to be registered
under provisions in the UK Companies Acts 1862–1948 in para materia with
the relevant provisions of these Acts,174 gives constructive notice of the
existence of that charge. The persons affected by this notice are those persons
who could reasonably be expected to search the register and these included
subsequent chargees.175 Constructive notice of a charge, however, does not
extend to constructive notice of particulars of any special terms contained in
the charge.176 Indeed, even where special terms, such as for example negative
pledge clauses, are voluntarily noted on the register, it is generally thought
that no one is affected by constructive notice of their existence by virtue of
registration of the charge in which they are contained.177
The operation of the foregoing principles presents a particular difficulty in
determining the efficacy of negative pledge clauses. As has already been
seen,178 except in Jamaica, all the Acts legislate that a negative pledge clause in
a debenture secured by a floating charge is a particular which must be
included in a statement of charged lodged with the Registrar of Companies for
registration.179 It is not clear whether, in consequence of this provision, a
subsequent chargee will be held to have constructive notice of a negative
pledge clause included in a statement of charge. In fact, except in Trinidad and
Tobago, resolution of this issue is complicated by the provision in these Acts
which reads as follows:180
No person is affected, or presumed to have notice or knowledge of, the contents of a document concerning
a company by reason only that the document has been filed with the Registrar or is available for
inspection at any office of the company.
It is submitted that this provision does not abolish the doctrine of constructive
notice generally, but only in respect of the constitutional documents of a
company. This submission is based on the fact that this provision is found in
that section of the Act which deals with the constitutional documents of
companies and the registration of these documents. The provision is not
intended to apply generally to all documents required to be registered under
the Acts, but only in respect of constitutional documents.
The consequence of the foregoing is that the constructive notice doctrine
applies to negative pledge clauses in floating charges and as such negative
pledge clauses are efficacious. This result is self-evident under the Trinidad and
Tobago Act since section 24(2) of that Act expressly stipulates that the
constructive notice doctrine is not abolished in respect of registered charges.
In Jamaica, section 94 of the Jamaican Act makes provision for the legal
effect which registration of a charge requiring registration under the Act has
on notice to third parties and on a subsequent registered charge. Section 94(1)
(a) expressly provides that registration of a charge required to be registered
under the Act constitutes notice to the world of the existence of that charge.
Constructive notice does not extend to extra-statutory clauses in a registered
charge.181 This means that negative pledge clauses are ineffective in Jamaica
since there is no statutory requirement to include these in the particulars of a
charge.
Section 94(1)(b) regulates the effect of registration of a subsequent charge
on a prior charge. This subsection provides that if written notice is given to the
prior chargee, the amount secured by the prior charge may not be increased to
the prejudice of the later charge. The subsection further stipulates that this rule
applies notwithstanding any provision in the document creating the earlier
charge.
Effect of non-registration

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, if a charge which is
required to be registered is not registered within a specified number of days in
accordance with the Acts, then that charge is void ‘so far as any security it
thereby purported to create’ is concerned.182 The Jamaican Act is worded
differently. Section 93(1) of that Act provides that ‘so far as any security on the
company’s property or undertaking is conferred’ by an unregistered charge, it
is void ‘against the liquidator and any creditor of the company’.
It must be noted that it is possible to distinguish two distinct and separate
instances of non-registration. These are first, instances where the documents
required to be lodged with the Registrar are not so lodged, and secondly,
instances where documents have been lodged but are incomplete or
inaccurate. The Acts do not differentiate between these two types of non-
registration. It appears, however, that in either instance the charge is rendered
void. Two further observations must be made in relation to the non-
registration provisions in the Acts in Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago. The first is
that the provisions invalidate the security itself, but do not affect the validity
of the contract to repay. Thus, it is expressly provided that the contract or
obligation for repayment of the money secured by a charge that is void for
non-registration is not affected and that money received under a void charge
becomes immediately payable.183
The second observation is that, subject to the provision in the Acts on later
charges,184 the general rule is that an unregistered charge is void against a
person who subsequently acquires an interest in or right over the charged
asset even if he has notice of it by some other means. This rule was applied in
Re Monolithic Building Co,185 where a company charged its land to secure
repayment of a loan made to it by T. The joint managing directors were
present when the company’s seal was put on the charge contract. Because of
an error in a standard textbook, the charge was not registered by the solicitor
who had arranged the charge transaction. Nine months later, the company
gave a floating charge over its property to one of its first managing directors
and this charge was registered. In these circumstances it was held that the
director was entitled to the land free of T’s charge.
The provisions in regional Acts on later charges186 have introduced an
important modification to the rule in Re Monolithic Building Co187 that an
unregistered charge is void against a subsequent chargee who acquires an
interest over the charged asset with knowledge of the charge. The Acts
provide that where a charge is created before the lapse of thirty days after the
creation of a prior registered charge which comprises all or any part of the
property comprised in the prior charge, and where the charge is given as
security for the same debt that is secured by the prior charge or any part of
that debt, then, to the extent to which the subsequent charge is security for the
same debt, the subsequent charge does not operate or is invalid except in the
two following cases.188 These are, first, where the charge was given in good
faith for the purpose of correcting some material error in the prior charge, or,
secondly, where the charge was given under proper circumstances and not for
the purpose of avoiding or evading the provisions of the Acts relating to
registration of charges.189
Effect of insufficient stamp duty
The instruments which create charges are subject to stamp duty pursuant to
the Stamp Duty Acts.190 However, an instrument which is subject to stamp
duty but which is either not stamped or insufficiently stamped is not thereby
rendered void.191 The Companies Acts in Antigua, Barbados, Dominica,
Tobago, have changed this rule in relation to a charge which is required to be
registered under those Companies Acts and which is expressed to secure all
sums due or to become due or some other fluctuating amount.192 These Acts
stipulate that such a charge must state the maximum sum that is deemed to be
secured by the charge and this sum must be the maximum covered by the
stamp duty paid on the charge instrument.193 The Acts render the charge void,
so far as any security interest is created by the charge, as regards any excess
over the stated maximum.194
Voidness for insufficient stamp duty may be cured by the payment of
additional stamp duty.195 To be effective, such additional payment must be
made before the commencement of the liquidation of the company and
amended particulars of the charge stating the increased maximum sum
deemed to be secured by the charge together with the original instrument by
which the charge was created, must be lodged with the Registrar for
registration.196 Where this is done, then, as from the date on which the charge
was lodged, the charge, if otherwise valid, is effective to the extent of the
increased maximum sum. There is an exception to this rule as regards persons
who, before the date on which the charge was lodged, had acquired
proprietary rights in, or a fixed or floating charge on, the property that is
subject to the charge.197
Endorsement on debenture

Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, where a
company creates a charge which is related to a debenture issued by that
company, the company must endorse certain matters on the debenture.198
First, under all these Acts, a copy of the certificate of registration of the
relevant charge must be endorsed on the debenture.199 Second, in all these
Acts, except the Jamaican Act, a statement that the registration of the charge
has been effected and the date of such registration must also be endorsed.200
These requirements to endorse the foregoing matters on a debenture do not
apply to a debenture issued by a company before the charge was created.201
Memorandum of satisfaction and payment

Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago provide
that where a charge on a company’s property which has been registered with
the Registrar ceases to affect the company’s property, either because the debt
for which the charge was given has been paid or satisfied in whole or part,202
or the property or the undertaking charged has been released from the charge
or has ceased to form part of the company’s property,203 then a memorandum
to that effect may be lodged with the Registrar for registration.204 Such a
memorandum is called a memorandum of satisfaction and payment, and must
be in the prescribed form.205 The Registrar has a duty to enter the particulars
of the memorandum of satisfaction and payment in the register of charges.206
The memorandum must, however, be supported by evidence sufficient to
satisfy the Registrar of the payment or satisfaction of the debt, or the release
or cessation of the charge on the property or undertaking.207
Rectification of omission or misstatement
Under the provisions of the Acts in Antigua, Barbados, Dominica, Grenada,

Guyana, Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago,
the court is empowered to make an order for the extension of time for the
registration of a charge which is required to be registered, or an order that an
omission or misstatement of any particular, with respect to a charge, be
rectified.208 Before the court can make any such order, however, it must be
satisfied of any of the following, namely:
(i) that the omission or misstatement was accidental, was due to

inadvertence, or was due to some other sufficient cause;209
(ii) that the omission or misstatement was not of a nature to affect
adversely the position of creditors or shareholders;210 or
(iii) that on other grounds, it was just and equitable to make an order.211
The application to the court for an order may be made by the company or by
any person with an interest.212 In making an order, the court may impose such
terms and conditions as appear to it to be just and expedient.213
Company’s duty to retain copy of charge instrument
Under the provisions of the Acts in Antigua, Barbados, Dominica, Grenada,

Guyana, Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago,
every company must retain at its registered office a copy of every instrument
creating a charge over its property which is required by the Act to be
registered.214 In the case of series debentures, the company need retain only a
copy of one debenture of the series.215
Every company must also record all charges specifically affecting its
property as well as all floating charges on the undertaking of any of its
property.216 In each of these instances, the company must give a short
description of the property charged, the amount of the charge, and the names
of the persons entitled to the charge.217 The copies of the instruments retained
by the company must be kept open for the inspection of creditors and
shareholders, free of cost.218
If the company fails to comply with these requirements, the validity of the
charges is not affected219 but the company may be guilty of an offence under
the Acts.220
Registration of charges created by external companies
In Antigua, Barbados, Dominica, Grenada, Guyana, Jamaica, Montserrat, St

Lucia, St Vincent and Trinidad and Tobago, it is statutorily stipulated that the
principles and rules relating to charges discussed in this chapter are applicable
to charges created or acquired by an external company.221 An external
company for these purposes is defined as any firm or other body of persons,
whether incorporated or unincorporated, which is formed under the laws of a
country other than the relevant territory.222
Registration of Charges in Anguilla
The only provision to be found in the Act in Anguilla is in section 172 of that
Act. This section requires a company to maintain a register of ‘all mortgages,
debentures and charges specifically affecting property of the company’.223 It
also requires the company to ‘enter in the register in respect of each mortgage,
debenture or charge, the amount of the charge created and the name of the
mortgagee, debenture-holder or person entitled to the charge’.224 The
company must keep the register of charges open to inspection by any creditor
or shareholder of the company at all reasonable times.225 If a company
contravenes these requirements, it commits an offence.226
Conclusion
It is apparent from this chapter that the Companies Acts in Antigua, Barbados,
Trinidad and Tobago contain extensive provisions on registration of company
charges. The registration regime established by these Acts no doubt are
intended to and do provide a substantial measure of protection for company
creditors. It is necessary, however, to make two observations on this regime.
The first is that the Acts confine themselves to charges but provide little or
no guidance as to what is a charge. One result of this, as was seen in the first
part of this chapter, the confusion in the common law on fixed and floating
charges is unintentionally imported into the statutory regime. Another is that
creditors’ security interests in a company’s assets may be affected by other
interests which do not require registration, since they are not charges, but
which have the same commercial effect as charges. As was seen, the retention
of title agreement, for example, puts a seller in the same position as a charge
holder vis-à-vis goods sold by him to the company, but there is no
requirement to register retention of title agreements.
The second is that the registration regime itself does not classify the effect
as regards notice. As was seen in the second part of this chapter, this failure
means that resort must be had to the rules developed in the case law. These
rules are not only complicated but in many respects can conduce to
commercial unfairness.
All in all, there is no doubt that the provisions in Acts in Antigua, Barbados,
Trinidad and Tobago represent an important recognition of the need for
corporate creditor protection. Equally, there is no doubt that these provisions
do not address corporate creditor protection problems occasioned by major
developments in modern corporate security law and practice. Perhaps, the
time is not far away when the registration regime in these Acts may need to
be looked at legislatively.
Notes
1 Ant ss 250–265; B’dos ss 237–252; Dom ss 250–265; Gren ss 250–265; Guy ss 233–249; J’ca ss 93–105; Mont ss
250–265; St L ss 250–265; St V ss 250–265; T’dad ss 251–266.
2 For a similar approach, see Waitomo Wools (NZ) Ltd v Nelsons (NZ) Ltd [1974] 1 NZLR 484, 492–493. For a
comprehensive, scholarly work on company charges, see Gough, Company Charges (2nd edn London:
1996).
3 Gough, ibid., chaps 1, 2, 3 and 4.
4 Ant s 543; B’dos s 94(3); Dom s 543; Gren s 543; Guy s 95(3); Mont s 543; St L s 543; St V s 543; T’dad s 4.
5 Compare Goode, Legal Problems of Credit and Security (London: 1988) 14.
6 Ibid.
7 Ibid.
8 Ibid.
9 Ibid. But see Oditah, Legal Aspects of Receivables Financing (London: 1991) 5–6, who disputes this
proposition.
10 Compare Goode, ibid., who posits that English law recognises only a closed category of security interests,
namely, mortgage, charge, pledge, and contractual lien. Oditah, ibid., disputes this. Oditah’s contention
must now be regarded as wrong, however, since Millet LJ in Re Cosslett (Contractors) Ltd [1998] Ch 495,
508 Eng CA expressly stated: ‘There are only four kinds of consensual security known to English Law: (i)
pledge; (ii) contractual lien; (iii) equitable charge; and (iv) mortgage.’ This statement of the law supports
Goode.
11 Goode op cit n 5.
12 Ibid.
13 Ibid.
14 As to this see, e.g., Becke v Smith (1836) 2 M&W 191, 195 per Parke B; IRC v Lonbridge Overseers (1884) 13
QBD 339, 342 per Brett LJ.
15 See Santley v Wilde [1899] 2 Ch. 474, 475 per Lindley MR.
16 Re Cosslett (Contractors) Ltd [1998] Ch 495, 508 Eng CA per Millet LJ.
17 See, e.g., s 96(1) Law of Property Act, Cap 236 B’dos.
18 Re Cosslett (Contractors) Ltd [1998] Ch 495, 508 Eng CA per Millet LJ.
19 Ibid.
20 See generally, Langan (ed), Maxwell on Interpretation of Statutes (London: 1969) 297–305.
21 [1998] Ch 495, 508 Eng CA.
22 See Re Bond Worth Ltd [1980] Ch 228; Borden (UK) Ltd v Scottish Timber Products Ltd [1981] Ch 25; Re
Curtain Dream plc [1990] BCLC 925.
23 See Re Dream Curtain plc [1990] BCLC; but see Borden (UK) Ltd v Scottish Timber Products Ltd [1981] Ch
25.
24 As to these, see generally Goode, op cit n 4, pp 132 et seq; Spry ‘Equitable Set-offs’ (1969) 43 ALJ 265.
25 As to these, see generally Oditah, op cit n 2, p, 8; Goode ibid pp 4–5.
26 See generally, Goode, ibid pp 12 and 17–23.
27 See generally, Goode, ibid pp 23–24.
28 Goode, ibid.
29 See above, text accompanying nn 24–28.
30 Re Coslett (Contractors) Ltd [1998] Ch 495, 508 Eng CA per Millett LJ.
31 The statutory definition reflects a trend in Commonwealth law. As to this see, e.g., Re Bond Worth Ltd
[1980] Ch 228, 248 Eng Ch D per Slade J; Gough, op cit n 2, p 19.
32 For a general discussion of these, see Parris, Effective Retention of Title Clauses (Oxford: 1989); Jones,
‘Retention Of Title Clauses Ten Years from Romalpa’ (1986) 7 Co Law 233; Williams, ‘Reservation of Title
– Some Recent Developments’ (1991) 12 Co Law 54.
33 Aluminium Industries Vasen BV v Romalpa Aluminium Ltd [1976] 2 All ER 552.
34 See, e.g., Borden (UK) Ltd v Scottish Timber Products Ltd [1981] Ch 25 Eng CA.
35 See, e.g., E. Pfeiffer Weinkellerei – Weineinkauf Gmb H v Arbuthnot Factors Ltd [1978] BCLC 522; Re
Weldtech Equipment [1991] BCLC 393.
36 See, e.g., Aluminium Industries Vasen BV v Romalpa Aluminium Ltd [1976] 2 All ER 552; Borden (UK) Ltd v
Scottish Timber Products Ltd [1981] Ch 25 Eng CA; Re Curtain Dream plc [1990] BCLC 925 Eng Ch D.
37 Re Charge Card Services Ltd [1987] Ch 150, 175 Eng Ch D per Millett J; Goode, op cit n 4 p 5 et seq. But see
Wood, ‘Three Problems of Set-Off: Contingencies, Build-ups and Charge-backs’ (1987) 8 Co Law 262.
38 [1990] BCLC 925 Eng Ch D.
39 [1981] Ch 25 Eng CA.
40 [1965] 2 QB 537 Eng CA.
41 [1965] 2 QB 537, 574 Eng CA.
42 [1980] Ch 228, 248 Eng Ch D.
43 [2001] 2 AC 710 PC. See Oditah, ‘Fixed Charges over Book Debts after Brumark’ (2001) Insolv Int 49;
Pennington, ‘The Interchangeability of Fixed and Floating charges’ (2003) Co Law 60.
44 [2001] 2 AC 710 PC, para [32].
45 [2005] 2 AC 680 Eng HL. There is a flood of commentaries on this case: see, e.g., Baird and Sidle, ‘Spectrum
Plus: House of Lords Decision – A Cloud With a Silver Lining?’ (2005)18 Insolv Int 113; Hare, ‘Charges
over Book Debts: The end of an Era’ [2005] LMCQ 440.
46 See, e.g., Illingworth v Houldsworth [1904] AC 355, 358 Eng HL per Lord Macnaughten.
47 Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284, 294 Eng CA per Vaughn-Williams LJ.
48 Holroyd v Marshall (1862) 10 Hl Cas 191, 218 Eng HL per Lord Westbury LC; Revere v Whitmore (1863) 33 LJ
Ch 63; Gough, op cit n 2, pp 25–26.
49 Gough, ibid, pp 92 et seq.
50 Agnew v IRC, Re Brumark Investments Ltd [2001] AC 701 PC; Re Spectrum Plus Ltd, National Westminister
Bank plc v Spectrum Plus Ltd [205] 2 AC 680 Eng HL.
51 Siebe Gorman & Co Ltd v Barclays Bank Ltd (1979) 2 Lloyd’s Rep 142, which was overruled in the House of
Lords in Re Spectrum Plus Ltd, National Westminister Bank plc v Spectrum Plus Ltd [205] 2 AC 680 Eng
HL, but this point was accepted as good law.
52 Gough, op cit n 2, pp 92–97.
53 Holroyd v Marshall (1862) 10 Hl Cas 191, 218 Eng HL per Lord Westbury LC.
54 Ibid; Revere v Whitmore (1863) 33 LJ Ch 63; Gough op cit n 2, pp 25–26.

55 See generally, Robbie and Gill ‘Fixed and Floating Charges: A New Look at the Bank’s Position’ (1981) JBL
95.
56 [1988] BCLC 65 Eng Ch D.
57 [1992] 1 NZLR 250 NZ HC.
58 [1977] 1 NZLR 532 NZ HC.
59 See generally, Worthington, ‘An Unsatisfactory Area of Law – Fixed and Floating Charges Yet Again’ (2004)
1 International Corporate Rescue 175–184 and ‘Floating Charges: Use and Abuse of Doctrinal Analysis’ in
Getzler and Payne, Company Charges: Spectrum and Beyond (Oxford: 2005) 28.
60 See generally Armour, ‘Should We Redistribute in Insolvency’ in Getzler and Payne, ibid.
61 (1979) 2 Lloyd’s Rep 142 Eng Ch D.
62 Note, however, that from as early as 1959 the Canadian case of Evans Coleman Evans v Evans Nelson (RA)
Construction Ltd (1959) 16 DLR (2d) 123 had suggested otherwise.
64 [2005] 2 AC 680 Eng HL.
67 [2005] 2 AC 680 Eng HL.
68 [1994] 1 BCLC 485 Eng CA.
69 [2002] AC 710 PC.
70 See, e.g., Re Panama, New Zealand and Australian Royal Mail (1870) 5 Ch App 318 Eng CA (generally
regarded as the first case in which the floating charge was recognised); Re Florence Land and Public Works
Co, ex p Moor (1878) 10 Ch D 530; Re Colonial Trusts Corporation, ex p Bradshaw (1879) 15 Ch D 645 Eng
CA. And see generally, Pennington ‘The Genesis of the Floating Charge’ (1960) 23 MLR 630.
71 See generally, Ferran ‘Floating Charges: The Nature of the Security’ (1988) CLJ 213.
72 [1987] AC 81, 86 Eng HL.
73 [1904] AC 355, 358 Eng HL.
74 [1910] 2 KB 979 Eng CA.

75 [1910] 2 KB 979, 999 Eng CA.
76 (1976) 69 DLR (3d) 353.
77 Ibid.
78 (1988) 1 Qd R 474. See also Luckins v Highway Motel (Carnavan) Pty Ltd (1975) 133 CLR 164. But see
Landall Holdings Ltd (1979) WAR 977.
79 (1988) 1 Qd R 474.
80 Gough, op cit n 2, p 225.
81 Driver v Broad [1893] 1 QB 744; Wallace v Evershed [1889] 1 Ch 891; Westminster Bank v Residential
Properties Improvement Co Ltd [1938] Ch 639.
82 Hamilton v Hunter (1982) 7 ACLR 295; Torzillu Pty Ltd v Byrnac Pty Ltd (1983) 8 ACLR 52.
83 See Curtis, ‘The Theory of the Floating Charge’ (1941–42) 4 UTLJ 131; Pennington, ‘The Genesis of the
Floating Charge’ (1960) 23 MLR 630; Gough, ‘The Floating Charge: Traditional Themes and New
Directions’ in Finn, Equity and Commercial Relationships (Sydney: 1978) 239.
84 Ibid.
85 Ibid.
86 [1979] 3 All ER 919, 957 Eng Ch D.
87 Cases supporting the licence theory include Davey & Co v Williamson & Sons Ltd [1898] 2 QB 194, 200 Eng
CA per Russell CJ; Re Borax Co, Foster v Borax Co [1899] 2 Ch 130; Re Crompton & Co Ltd, Player v
Crompton & Co Ltd [1914] 1 Ch 954. Cases supporting the mortgage of future assets theory include Evans v
Rival Granite Quarries Ltd [1910] 2 KB 979, 999 Eng CA per Buckley LJ; Biggerstaff v Rowatt’s Wharf Ltd
[1892] 2 Ch 93.
88 See Gough, op cit n 2, pp 85–93 and 348–373.
89 Ibid.
90 Government Stock Investment and Securities Co v Manila Co Rly Ltd [1897] AC 81, 88 Eng HL per Lord
McNaughten; Illingworth v Houldsworth [1904] AC 355, 358 Eng HL per Lord McNaughten.
91 George Baker (Transport) Ltd v Eynon [1974] 3 All ER 374 Eng CA; Rother Iron Works Ltd v Canterbury
Precision Engineering Ltd [1974] 1 QB 1 Eng CA.
92 See Gough, op cit n 2, p 135.

93 Fire Nymph Products Ltd v The Heating Centre Pty Ltd (1992) 7 ACSR 375, 373 per Gleeson CJ.
94 Re Colonial Trusts Corporation, ex p Bradshaw (1879) 15 Ch D 645, 472 Eng CA per Jessel MR; Re Crompton
& Co Ltd, Player v Crompton & Co Ltd [1914] 1 Ch 954.
95 See, e.g., Re Panama, New Zealand and Australian Royal Mail (1870) 5 Ch App 318 Eng CA; George Baker
(Transport) Ltd v Eynon [1974] 3 All ER 374 Eng CA.
96 Government Stock Investment and other Securities Co v Manila Rly [1895] 2 Ch 551 Eng CA; Re Roundwood
Colliery Co [1897] 1 Ch 373 Eng CA.
97 Industrial Development Bank v Valley Dairy Ltd (1953) OR 70; Great Lakes Petroleum Co Ltd v Border
Cities Oil Co Ltd (1934) 2 DLR 743.
98 [1986] Ch 366 Eng Ch D. See also William Gaskell Group Ltd v Highley [1994] BCLC 197. But note that this
is an implied term which may be excluded by express agreement: Re Real Meat Co Ltd [1996] BCC 254.
99 [1986] Ch 366, 377.
100 Ibid.
101 [1987] 1 Ch 200 Eng Ch D.
102 Fire Nymph Products Ltd v The Heating Centre Pty Ltd (1992) 7 ACSR 375.
103 For a full discussion of these see Gough, op cit n 2, pp 232–268.
104 [1897] AC 81 Eng HL.
105 [1897] AC 81, 86 Eng HL. See also [1897] AC 81, 87 Eng HL per Lord Shand.
106 [1910] 2 KB 979 Eng CA.
107 [1910] 2 KB 979, 993 Eng CA. See also [1910] 2 KB 979, 997 Eng CA per Vaughn-Williams LJ.
108 [1898] 2 QB 194 Eng CA.
109 See Evans v Rival Quarries Ltd [1910] 2 KB 979, 997 Eng CA per Fletcher-Moulton LJ.
110 [1971] NZLR 909.
111 [1983] 83 ATC 4823, affd [1984] VR 773.
112 (1992) ACSR 375.
113 [1987] Ch 200 Ch D.
114 (1978) 90 DLR (3d) 357.

115 (1987) 5 ACLC 257.
116 Re Brightlife Ltd [1987 Ch 200, 214–215 per Hoffmann J; Re Permanent Houses (Holdings) Ltd [1988] BCLC
563, 567 per Hoffmann J; Covacich v Riordan [1994] 2 NILR 502.
117 Ant s 258; B’dos s 245; Dom s 258; Gren s 258; Guy s 242; J’ca s 97(1); Mont s 258; St L s 258; St V s 258;
T’dad s 259.
T’dad s 251.
250(1); T’dad s 251(1). J’ca s 93(1) refers to this as ‘the prescribed particulars of the charge’.
120 Ant s 250(1)(a); B’dos s 237(1)(a); Dom s 250(1)(a); Gren s 250(1)(a); Guy s 233(1)(a); J’ca s 93(1); Mont s 250(1)
121 Ant s 250(1)(b); B’dos s 237(1)(b); Dom s 250(1)(b); Gren s 250(1)(b); Guy s 233(1)(b); J’ca s 93(1); Mont s
122 Ant s 251(1)(a); B’dos s 238(1)(a); Dom s 251(1)(a); Gren s 251(1)(a); Guy s 235(1)(a); J’ca s 97(1)(b)(i); Mont s
123 Ant s 251(1)(b); B’dos s 238(1)(b); Dom s 251(1)(b); Gren s 251(1)(b); Guy s 235(1)(b); J’ca: no similar
provision; Mont s 251(1)(b); St L s 251(1)(b); St V s 251(1)(b); T’dad s 252(1)(b).
124 Ant s 251(1)(c); B’dos s 238(1)(c); Dom s 251(1)(c); Gren s 251(1)(c); Guy s 235(1)(c); J’ca s 97(1)(b)(ii); Mont s
125 Ant s 251(1)(d); B’dos s 238(1)(d); Dom s 251(1)(d); Gren s 251(1)(d); Guy s 235(1)(d); J’ca s 97(1)(b)(iii); Mont
s 251(1)(d); St L s 251(1)(d); St V s 251(1)(d); T’dad s 252(1)(d).
126 Ant s 251(1)(e); B’dos s 238(1)(e); Dom s 251(1)(e); Gren s 251(1)(e); Guy s 235(1)(e); J’ca s 97(1)(b)(iv); Mont s
127 Ant s 251(1)(f); B’dos s 238(1)(f); Dom s 251(1)(f); Gren s 251(1)(f); Guy s 235(1)(f); J’ca: no similar provision;
Mont s 251(1)(f); St L s 251(1)(f); St V s 251(1)(f); T’dad s 252(1)(f).
128 Ant s 251(2); B’dos s 238(2); Dom s 251(2); Gren s 251(2); Guy s 235(2); J’ca s 97(1)(a); Mont s 251(2); St L s
251(2); St V s 251(2); T’dad s 252(2).
131 Ant s 251(2)(c); B’dos s 238(2)(c); Dom s 251(2)(c); Gren s 251(2)(c); Guy s 235(2)(c); J’ca s 93(7)(d); Mont s
132 J’ca s 93(7)(c).
133 Ant s 251(3); B’dos s 238(3); Dom s 251(3); Gren s 251(3); Guy s 235(3); J’ca s 93(7): the copy of the deed must
be certified by an attorney-at-law or an officer of the company; Mont s 251(3); St L s 251(3); St V s 251(3);
T’dad s 252(3).
251(3); St V s 251(3); T’dad s 252(3).
250(1); St V s 250(1); T’dad s 251(1).
136 Ant s 257(1)(a); B’dos s 244(1)(a); Dom s 257(1)(a); Gren s 257(1)(a); Guy s 241(1)(a); J’ca s 95(2); Mont 257(1)
257(2); St V s 257(2); T’dad s 258(2).
256(1); St V s 256(1) T’dad s 257(1).
140 Ant s 256(1)(a); B’dos s 243(1)(a); Dom s 256(1)(a); Gren s 256(1)(a); Guy s 240(1)(a); J’ca: no similar provision;
141 Ant s 256(1)(b); B’dos s 243(1)(b); Dom s 256(1)(b); Gren s 256(1)(b); Guy s 240(1)(b); J’ca s 96(1); Mont s
256(1); St V s 256(1); T’dad s 257(1).
256(1); St V s 256(1); T’dad s 257(1).
256(2); T’dad s 257(2).
145 J’ca s 96(2).
146 Ant s 258(2); B’dos s 245(2); Dom s 258(2); Gren s 258(2); Guy s 242(2); J’ca 97(2): but note that there is no
requirement under this provision in respect of a charge securing a fluctuating amount; St L s 258(2); St V s
258(2); T’dad s 259(2).
147 Ant s 258(2); B’dos s 245(2); Dom s 258(2); Gren s 258(2); Guy s 242(2); J’ca s 97(2); St L s 258(2); St V s 258(2);
T’dad s 259(2).
148 See, e.g., National Provincial and Union Bank of England v Charhley [1924] 1 KB 431 Eng CA; Re
Mechanisations (Eaglescliffe) Ltd [1966] Ch 120 Eng Ch D.
149 Re Eric Holmes (Property) Ltd [1965] Ch 1052 Eng Ch D.
150 Ibid; Re C L Nye Ltd [1971] Ch 442 Eng CA.
151 Appointed under s 5 of the Land Registration Act Cap 229.
152 B’dos s 237(1A).
153 Ant s 250; B’dos s 237; Dom s 250; Gren s 250; Guy s 233; J’ca s 93; Mont s 250; St L s 250; St V s 250: T’dad s
251.
154 These are discussed below, text accompanying nn 161–172.
155 Ant s 250; B’dos s 237; Dom s 250; Gren s 250; Guy s 233; J’ca s 93; Mont s 250; St L s 250; St V s 250: T’dad s
251.
156 Ant s 250(3) B’dos s 237(3); Dom s 250(3); Gren s 250(3); Guy s 233(3); Mont s 250(3); St L s 250(3); St V s
250(3); T’dad s 251(3). But see J’ca s 93(3) which is discussed below, text accompanying nn 143–151.
157 See above, text accompanying nn 2–142.
158 London & Cheshire Insurance Co Ltd v Laplagrene Property Co Ltd [1971] Ch 203 Eng Ch D.
159 [1988] 5 BCC 325 Eng QBD.
160 Re Gregory Love & Co [1916] 1 Ch 203.
161 These are contained in Ant s 250(3) B’dos s 237(3); Dom s 250(3); Gren s 250(3); Guy s 233(3); Mont s 250(3);
St L s 250(3); St V s 250(3); T’dad s 251(3).
250(3)(a); St V s 250(3)(a); T’dad s 251(3)(a).
250(3)(b); St V s 250(3)(b); T’dad s 251(b).
164 J’ca s 93(3)(a).
165 J’ca s 93(3)(b).
166 J’ca s 93(3)(c).
167 J’ca s 93(3)(d).
168 J’ca s 93(3)(e).
169 J’ca s 93(3)(f).
170 J’ca s 93(3)(g).
171 J’ca s 93(3)(h).
172 J’ca s 93(3)(i).
250(1); T’dad s 251(1).
174 Viz, Ant s 250; B’dos s 237; Dom s 250; Gren s 250; Guy s 233; Mont s 250; St L s 250; St V s 250: T’dad s 251.
175 Siebe Gorman & Co Ltd v Barclays Bank Ltd (1979) 2 Lloyd’s Rep 142 Eng Ch D. Overruled by the House of
HL but not on this point.
176 Re Standard Rotary Machine Co Ltd [1903] Ch 654; Wilson v Kelland [1910] 2 Ch 306 Eng Ch D; Siebe
Gorman & Co Ltd v Barclays Bank Ltd (1979) 2 Lloyd’s Rep 142 Ch D. Overruled by the House of Lords in
Re Spectrum Plus Ltd, National Westminister Bank plc v Spectrum Plus Ltd [2005] 2 AC 680 Eng HL, but
not on this point.
177 G & T Earle Ltd v Hensworth RDC (1928) 44 LTR 605, affd [1928] All ER 602 Eng CA; Welch v Bowater
(Ireland) Ltd [1980] IR 251.
178 Above, n 106.
251(1)(f); St V s 251(1)(f); T’dad s 252(1)(f).
180 Ang s 20; Ant s 20; B’dos s 20; Dom s 20; Gren s 20; Guy s 19; Mont s 20; St L s 20; St V s 20; T’dad s 24(1).
181 Siebe Gorman & Co Ltd v Barclays Bank Ltd (1979) 2 Lloyd’s Rep 142 Eng Ch D. Overruled by the House of
HL, but not on this point.
250(1); T’dad s 251(1).
250(2); St V s 250(2); T’dad s 251(2).
184 Viz, Ant s 253; B’dos s 240; Dom s 253; Gren s 253; Guy s 237; Mont s 253; St L s 253; St V s 253; T’dad s 254.
185 [1915] 1 Ch 643 Eng Ch D.
186 Viz, Ant s 253; B’dos s 240; Dom s 253; Gren s 253; Guy s 237; Mont s 253; St L s 253; St V s 253; T’dad s 254.
187 [1915] 1 Ch 643 Eng Ch D.
190 See, e.g., B’dos Stamp Duty Act, Cap 91 ss 3–30;
191 See, e.g., B’dos Stamp Duty Act, Cap 91 s 31
255(2); T’dad s 256(2).
196 Ant s 255(2); B’dos s 242(2); Dom s 255(2); Gren s 255(2); Guy s 239(2); St L s 255(2); St V s 255(2); T’dad s
256(2).
256(2).
T’dad s 260.
259(1)(b); St V s 259(1)(b); T’dad s 260(1)(b).
259(2); St V s 259(2); T’dad s 260(2).
202 Ant s 260(1)(a); B’dos s 247(1)(a); Dom s 260(1)(a); Gren s 260(1)(a); Guy s 244(1)(a); J’ca s 99(a); Mont s 260(1)
203 Ant s 260(1)(b); B’dos s 247(1)(b); Dom s 260(1)(b); Gren s 260(1)(b); Guy s 244(1)(b); J’ca s 99(b); Mont s
204 Ant s 260(1); B’dos s 247(1); Dom s 260(1); Gren s 260(1); Guy s 244(1); J’ca s 99; Mont s 260(1); St L s 260(1);
St V s 260(1); T’dad s 261(1).
St V s 260(1); T’dad s 261(1).
St V s 260(1); T’dad s 261(1).
207 Ant s 260(2); B’dos s 247(2); Dom s 260(2); Gren s 260(2); Guy s 244(2); J’ca s 99; Mont 260(2); St L s 260(2); St
V s 260(2); T’dad s 261(2).
208 Ant s 261; B’dos s 248; Dom s 261; Gren s 261; Guy s 245; J’ca s 100; Mont s 261; St L s 261; St V s 261; T’dad
s 262.
209 Ant s 261(a); B’dos s 248(a); Dom s 261(a); Gren s 261(a); Guy s 245(a); J’ca s 100; Mont s 261(a); St L s 261(a);
St V s 261(a); T’dad s 262(a).
210 Ant s 261(b); B’dos s 248(b); Dom s 261(b); Gren s 261(b); Guy s 245(b); J’ca s 100; Mont s 261(b); St L s
261(b); St V s 261(b); T’dad s 262(b).
211 Ant s 261(c); B’dos s 248(c); Dom s 261(c); Gren s 261(c); Guy s 245(c); J’ca s 100; Mont s 261(c); St L s 261(c);
St V s 261(c); T’dad s 262(c).
212 Ant s 261; B’dos s 248; Dom s 261; Gren s 261; Guy s 245; J’ca s 100; Mont s 261; St L s 261; St V s 261 s 248;
T’dad s 262.
213 Ant s 261; B’dos s 248; Dom s 261; Gren s 261; Guy s 245; J’ca s 100; Mont s 261; St L s 261; St V s 261; T’dad
s 262.
262(1); St V s 262(1); T’dad s 263(1).
262(1); St V s 262(1); T’dad s 263(1).
262(2); St V s 262(2); T’dad s 263(2).
262(2); St V s 262(2); T’dad s 263(2).
T’dad s 264.
219 Wright v Horton (1887) 12 App Cas 371 Eng HL.
T’dad s 529.
221 Ant s 265(1)(f); B’dos s 252(1); Dom s 265; Gren s 265; Guy s 249(1); J’ca s 105; St L s 265; St V s 265; T’dad s
266.
222 Ant s 543(1)(f); B’dos s 250(2); Dom s 543(1)(f); Gren s 543(1)(f); Guy s 247(2); J’ca s 105; St L s 543(1)(f); St V
s 543(1)(f); T’dad s 4.
223 Ang s 172(1).
224 Ang s 172(1).
225 Ang s 172(2).
226 Ang s 172(3).

Chapter 22
Debentures and Trust Deeds
Introduction
As was discussed in Chapter 21, companies in the Commonwealth Caribbean,
except in Belize, have the same borrowing powers as an individual. One
specific form of corporate borrowing which is commonly used by companies
is borrowing by means of the issue of debentures. Where this form of
borrowing is used, it is usual for debentures which are intended to be widely
held to be issued under a trust deed. It is for this reason that the Companies
Acts in the Commonwealth Caribbean contain provisions on this form of
borrowing.
In Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago, debentures and covering trust
deeds are extensively dealt with under a section of the Acts headed ‘Trust
Deeds and Debentures’. In Jamaica, debentures and trust deeds are less
extensively dealt with in a section of the Jamaican Act headed ‘Special
Provisions as to Debentures’. In Belize, debentures are dealt with under a
section headed ‘Debentures and Floating Charges’. There are no provisions on
debentures and/or trust deeds in the Bahamas and St Christopher/Nevis Acts.
This chapter examines the provisions on debentures and trust deeds in
regional Acts.
Debentures
Debentures defined
Basic statutory definition
The expression ‘debenture’ is defined in Anguilla, Antigua, Barbados,

Trinidad and Tobago as follows:1
‘debenture’ includes debenture stock and any bond or other instrument evidencing an obligation or
guarantee, whether secured or not.
In Belize, ‘debenture’ is defined: “debenture” includes debenture stock.’2

These definitions assume that the term ‘debenture’ has an already
understood meaning. Thus, they merely identify special types of instruments
creating or acknowledging a debt obligation, namely, debenture stock and
bonds, and stipulates for their inclusion in the expression ‘debenture’. Given
this assumption, the dictum of Chitty J in the English case of Levy v Abercorris
Slate and Slab Co3 becomes important. Chitty J said there:4
In my opinion, a debenture means a document which creates a debt or acknowledges it, and any document
which fulfils either of these conditions is a ‘debenture’. I cannot find any precise legal definition of the
term, it is not either in law or commerce a strictly technical term, or what is called a term of art.
Chitty J was concerned in that case with the meaning of ‘debenture’ in the UK
Bills of Sale Act 1882, but his dictum is generally accepted as also representing
the meaning of the expression in general company law.5
For purposes of Companies Acts in the Commonwealth Caribbean,
therefore, a debenture is to be regarded as consisting basically of an
instrument acknowledging indebtedness by a company which may or may not
be secured by a charge on the company’s property. Where it is secured by a
charge, the charge may be a fixed charge on some or all of the company’s
existing assets and/or a floating charge on the rest of the company’s
undertaking. Where the debenture is not secured by a charge on the
company’s property, the rights of the debenture-holder are merely contractual.
However, where the debenture is secured, the debenture-holder has, in
addition to contractual rights, in rem rights against the charged property.
The essence of a debenture is that it is an instrument evidencing a debt
obligation owed by the company to a specific loan creditor.6 So that, even
though in corporate practice a debenture invariably consists of one of a series
of contemporaneous instruments, a mortgage issued to a single mortgagee is a
‘debenture’ within the contemplation of regional company legislation.
Debenture stock
As has been seen, ‘debenture stock’ is expressly included in the statutory

definition of debenture, but there is an important difference between
debenture stock and a debenture. It is that whereas a debenture secures a
definite and generally equal amount of debt, with debenture stock the whole
sum of debt is treated as a single stock and certificates are issued in respect of
multiples of the stock. The mechanism whereby stock is created is for the
company to execute a trust deed in respect of a debenture or debentures under
which the collective debt of the company is consolidated into one trust fund
and then divided into units for the sake of convenience.7
When a trust is constituted, the contract to pay interest and repay principle
is between the company and trustee, not the company and stockholder.8 The
practical consequence of this is that only the trustee may take proceedings
against the company. Despite this, the covering trust deed invariably contains
a provision that the trustee of the trust deed is the proper person to appoint a
receiver or receiver-manager to realise the security interest covered by the
debenture. It follows, therefore, that a holder of debenture stock will not
normally be able to appoint a receiver or receiver-manager on his own
account. If a trustee is dilatory, then, the holder of the debenture stock may
ask the court to order the trustee to carry out his duties.
Bonds
Despite the fact that the expression ‘debenture’ is statutorily defined to include
a ‘bond’, the expressions ‘bond’ and ‘debenture’ are often used in
Commonwealth Caribbean law without any legal distinction of meaning.
Thus, although a word is usually included in the title of a debt obligation to
indicate generally the type of security behind the obligation, the fact that one
or other of the expressions ‘bond’ or ‘debenture’ appears in the designation of
corporate obligations cannot be taken as being indicative of the security (if
any) behind the obligation.
In general usage, the expression ‘bond’ is taken to mean unsecured
government debt and, in the context of companies, corporate debt which is
secured by a specific mortgage. Corporate debt which is secured by a first
mortgage on real estate is often referred to as a first mortgage bond.
Corporate debt secured by a specific mortgage or charge on collateral security
such as shares or debt obligations of other companies may be termed a
collateral trust bond or debenture.
Power to issue debentures
Basic statutory power
It is not in the terrain of dispute that companies in the Commonwealth

Caribbean have the power to issue debentures. The Companies Acts in
Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago confer on companies
express power issue debentures.9 The Acts in Belize, Jamaica and St
Christopher do not have any such provision. However, in Jamaica and St
Christopher the power of companies to issue debentures undoubtedly inheres
in the statutory conferment on companies of all the capacity and the rights,
powers and privileges of a natural person.10 In Belize, the power is implicit in
the provisions on perpetual debentures11 and the reissue of redeemed
debentures.12
Power to reissue redeemed debentures
At common law, where a debenture was redeemed or transferred to the

company, the debenture was discharged and the debenture cancelled. Under
Lucia, St Vincent and Trinidad and Tobago, this common law rule has been
abolished. It is now provided that, where debentures are redeemed or
otherwise acquired by a company, the company has the option of cancelling
the debentures or, subject to any applicable trust deed or other agreement,
reissuing, pledging or depositing the debentures to secure any existing or
future obligation of the company.13 Any such acquisition and reissue, pledge or
deposit of the debenture is not a cancellation of the debenture.14
The procedure for redemption must be stated in the debenture stock trust
deed.15 The procedures stated in the Acts include the payment of equal
instalments of principal in respect of each debenture, the selection of
debentures for redemption or the selection of debentures by drawing, ballot or
otherwise.16 It bears emphasis that debentures issued, pledged or deposited by
a company are not redeemed by reason only that the amount in respect of
which the debentures are issued, pledged or deposited is repaid.17
Power to issue irredeemable debentures
Usually, the date at which the principal of the debenture debt becomes
repayable is fixed as a matter of contract by the terms of issue of the
debenture or by the covering trust deed. However, debentures which are
secured on a company’s property are a species of mortgage. Consequently,
such debentures are subject to the rules of equity by which provisions in them
which clog or fetter the company’s right to redemption are void. A provision
in a debenture which postpones the redemption date for an excessive length of
time or one which renders the debenture irredeemable are examples of
provisions rendered void by this rule.
The Companies Acts in Belize and Jamaica have reversed the no-clogging
rule and allow companies to issue irredeemable debentures as well as
debentures payable at a long time in the future.18 The present Companies Acts
in all the other territories are silent irredeemable debentures. It is submitted
that despite this silence, irredeemable debentures are valid in these other
territories. The reasons for this are as follows.
The former Companies Acts in all the other territories contained a provision
similar to the provision in the Companies Acts in Belize and Jamaica which
allowed companies to issue irredeemable debentures as well as debentures
payable at a long time in the future. The express object of this provision was
to remove any doubt that the rule of equity against a clog on the equity of
redemption did not apply to company debentures. There is no such explicit
provision in the present Companies Acts in these territories, nor is the
provision in the former Companies Acts expressly saved by the present
Companies Acts.19 However, because the present Acts repeal the former Acts
and the former Acts had abrogated the rule in equity against a clog on the
equity of redemption in relation to companies, on ordinary principles of
statutory interpretation this rule must still be treated as abrogated. This means
that the rule is that companies wishing to may validly issue irredeemable
debentures as well as debentures payable at a long time in the future.
Power to issue different classes of debenture

Montserrat, St Lucia, St Vincent and Trinidad and Tobago expressly provide
that a company may issue different classes of debentures.20 Under these Acts, a
different class of debenture exists where different rights attach to the
debenture in respect of certain statutory specified rights.21
The first of these statutory specified rights is the right respecting the rate of
interest or the dates for payment of interest.22 The second relates to the dates
when, or the instalments by which, the principal of the debenture will be
repaid, unless the difference is solely that the class of debenture will be repaid
during a stated period of time and particular debentures will be repaid at
different dates during that period according to selections made by the
company or by drawings, ballots or otherwise.23 The third concerns any right
to subscribe for, or to convert the debenture into other shares or other
debentures of the company or any other body corporate.24 The fourth relates
to the powers of the debenture-holders to realise any security interest.25
Debentures belong to different classes, also, if they do not rank equally for
payment when any security interest is realised,26 or when the company is
liquidated.27 Finally, different classes exist, if in the event of a realisation of
security or liquidation of the company the security interest or the proceeds
thereof, or any assets available to satisfy the debentures, is or are not to be
applied in satisfying the debentures strictly in proportion to the amount of
principal, premium and arrears of interest to which the holders of them are
respectively entitled.28
Legal Requirements of Debentures
Overview
There are no specific legal formalities required for the creation of a debenture
in regional company law. Thus, for instance, a debenture need not be under
seal.29 Similarly, it is immaterial whether or not the document is called a
debenture by the company issuing it. As long as the document contains an
acknowledgement of indebtedness, that is enough to constitute it a
debenture.30
Be that as it may, the Companies Acts in Antigua, Barbados, Dominica,
stipulate that debentures must include certain specified statements.31 The
statements which must be included depend upon whether (a) the debenture is
an unsecured debenture;32 (b) the debenture is issued with a covering trust
deed;33 or (c) the debenture is issued without a covering trust deed.34 The Act
in Anguilla makes provision for only the two situations where the debenture is
issued with a covering trust deed and without a covering trust deed.35
Unsecured debenture
None of the Acts in Antigua, Barbados, Dominica, Grenada, Guyana,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago contain any
definition of ‘unsecured debenture’. However, all of these Acts contemplate
this type of debenture and suggest by necessary implication that an ‘unsecured
debenture’ is a debenture in which no security interest is vested in its holder or
any other person for his benefit as security for payment of principal and
interest.36 The only statutory requirement in respect of an unsecured
debenture is that it must state on its face in clearly legible print that it is
unsecured.37
Debenture covered by trust deed
The Acts in Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago all define a
debenture covered by a trust deed as one in which the debenture-holder is
entitled to participate in any money payable under a trust deed.38 If the
debenture-holder is entitled by the trust deed to the benefit of any security
interest, the debenture is similarly covered by a trust deed.39 In neither
instance does it matter whether the debenture-holder is entitled under the
trust deed alone or together with other persons.40 Correspondingly, a
debenture is not covered by a trust deed where the debenture-holder does not
enjoy any of the foregoing rights under a trust deed.
A debenture which is covered by a trust deed is required to include certain
specified statements.41 Where the debenture is covered by a trust deed, it must
stated either in the body of the debenture, or in a note forming part of it or
endorsed on it, the maximum sum that the company can raise by issuing
debentures of the same class,42 the maximum discount that can be allowed on
the issue or reissue of the debentures,43 and the maximum premium at which
the debentures can be made redeemable.44 The debenture must also state any
prohibition or restriction on the power of the company to issue debentures or
to create any security interest on any of its assets ranking in priority to or
equally with, the debentures issued under the trust deed.45
Further, a debenture which is covered by a trust deed must state the dates
on which interest on the debentures issued under the trust deed will be paid
and the manner in which the payment will be made;46 the dates on which the
principal of the debentures issued under the trust deed will be repaid, and,
unless the whole principal is to be repaid to all the debenture-holders at the
same time the manner in which redemption will be effected, whether by the
payment of equal instalments of principal in respect of each debenture or by
the selection of debentures for redemption by the company, or by drawing
ballot or otherwise.47
In the case of convertible debentures, the debenture must state the dates
and terms on which the debentures can be converted into shares and the
amounts that will be credited as paid upon those shares, and the dates and
terms on which the debenture-holders can exercise any right to subscribe for
shares in right of the debentures held by them.48 The debenture must in any
event state the power of the company to call meetings of the debenture-
holders, and the rights of debenture-holders to require the company or trustee
to call meetings of debenture-holders.49 It must also state whether the rights of
debenture-holders can be altered or abrogated, and, if so the conditions that
are to be fulfilled, and procedures that are to be followed, to effect an
alteration or an abrogation.50
Finally, the debenture which is covered by a trust deed must state whether
the trustee holds the security interest vested in him by the trust deed in trust
for the debenture-holders equally, or in trust for some only of the debenture-
holders, and if so, which debenture-holders.51 It must also state whether the
debenture is secured by a general floating charge vested in the trustee of the
covering trust deed or in the debenture-holders.52
Debenture without a covering trust deed
As has already been seen, a debenture is issued without a covering trust deed
if the debenture-holder is not entitled by the trust deed to participate in any
money payable under the trust deed or is not entitled by the trust deed to the
benefit of any security interest secured by the trust deed.53 Under the Acts in
Lucia, St Vincent and Trinidad and Tobago, all the statements required to be
included in respect of a covering trust deed must be included in each
debenture issued without a covering trust deed, or in a note forming part of
the debenture document, or endorsed on that document.54
Consequences of non-inclusion of statements
None of the Companies Acts in Anguilla, Antigua, Barbados, Dominica,

contain any explicit provisions as to what is the legal consequence of a
debenture not including the statutorily specified statements. Despite the
serious nature of the subject matter of the statements, it is doubted that non-
inclusion of the statements render the debenture void. The better view is that
non-inclusion of the statements in the debenture renders the debenture
unenforceable. This means, for instance, that the company, an aggrieved
debenture-holder or any other aggrieved person may apply to the court for a
rectification order under the Acts to have the required statements included.
Trust Deeds
Meaning and advantages of covering trust deeds
As has already been seen, debentures, even though complete in themselves,

may be covered by a trust deed. A trust deed is defined in the Acts in Antigua,
Trinidad and Tobago as any deed, indenture or other instrument, including any
supplement or amendment thereto, made by a company after its incorporation
or continuance, under which the company issues debentures and in which a
person is appointed trustee for the holders of the debentures issued
thereunder.55 Trust deeds are sometimes referred to in the USA and Canada as
trust indentures.
The use of a covering trust has practical advantages for the company
executing it as well as the debenture-holders in whose favour it is executed.
As far as the company is concerned, the trust deed, by separating the
debenture-holders from the security holder, namely, the trustee or trustees,
allows the company to deal with the trustee or trustees rather than a mass of
individual debenture-holders. The advantage for the debenture-holders is that
a trustee or trustees with expert knowledge may be appointed to protect the
interest of the debenture-holders who themselves may have little or no expert
knowledge of the company’s business.
Mandatory covering trust deed
As has been already noted, a debenture is covered by a trust deed if the

debenture-holder is entitled to participate in any money payable by the
company under the trust deed, or is entitled to the benefit of any security
interest whether alone or together with other persons.56 Trust deeds are
invariably used to secure debenture stock and it is mandatory under the Acts
in Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago that a public company, before
issuing any of its debentures, should execute a trust deed to cover any
debentures issued by it.57 Such a deed may not, however, cover more than one
class of debentures.58
Legal recourse for non-execution of covering trust deed
If, before issuing any of its debentures, a public company does not execute a
trust deed, the holder of any debenture issued by the company may apply to
the court to remedy this failure.59 On such an application, the court may (i)
order the company to execute a trust deed in respect of those debentures,60 (ii)
direct that a person nominated by the court be appointed a trustee of the
trust,61 and (iii) give such consequential directions as the court thinks fit
regarding the contents of the trust deed and its execution by the trustee.62
Formalities of a covering trust deed
As with debentures, there is no legal requirement for a trust deed to conform

to any specific formalities. On the other hand, under the Companies Acts in
Vincent and Trinidad and Tobago, every trust deed executed by a company
must state all of the following matters:63
i. the maximum sum that the company can raise by issuing debentures
of the same class;64
ii. the maximum discount that can be allowed on the issue or reissue of
the debentures, and the maximum premium at which the debentures
can be made redeemable;65
iii. the nature of any assets over which a security interest is created by
the trust deed in favour of the trustee for the benefit of the
debenture-holders equally, and, except where such an interest is a
floating charge or a general floating charge, the identity of the assets
subject to it;66
iv. the nature of the assets over which a security interest has been, or
will be, created in favour of any person other than the trustee for the
benefit of the debenture-holders equally, and, except where such an
interest is a floating charge or a general floating charge, the identity
of the assets subject to it;67
v. whether the company has created or will create any security interest
for the benefit of some, but not all of the holders of debentures issued
under the trust deed;68
vi. any prohibition or restriction on the power of the company to issue
debentures or to create any security interest on any of its assets
ranking in priority to or equally with, the debentures issued under the
trust deed;69
vii. whether the company will have power to acquire debentures under
the trust deed before the date for their redemption and to reissue the
debentures;70
viii. the dates on which interest on the debentures issued under the trust
deed will be paid and the manner in which the payment will be
made;71
ix. the dates on which the principal of the debentures issued under the
trust deed will be repaid, and, unless the whole principal is to be
repaid to all the debenture-holders at the same time the manner in
which redemption will be effected, whether by the payment of equal
instalments of principal in respect of each debenture or by the
selection of debentures for redemption by the company, or by
drawing ballot or otherwise;72
x. in the case of convertible debentures, the dates and terms on which
the debentures can be converted into shares and the amounts that
will be credited as paid upon those shares, and the dates and terms on
which the debenture-holders can exercise any right to subscribe for
shares in right of the debentures held by them;73
xi. the circumstances in which the debenture-holders will be entitled to
realise any security interest vested in the trustee or any other person
for their benefit, other than the circumstances in which they are
entitled to do so by the relevant Companies Act;74
xii. the power of the company and the trustee to call meetings of the
debenture-holders, and the rights of the debenture-holders to require
the company or the trustee to call meetings of the debenture-
holders;75
xiii. whether the rights of debenture-holders can be altered or abrogated,
and, if so the conditions that are to be fulfilled, and procedures that
are to be followed, to effect an alteration or an abrogation; and76
xiv. the amount or rate of remuneration to be paid to the trustee and the
period for which it will be paid in priority to the principal, interest
and costs in respect of debentures issued under the trust deed.77
Trustees of trust deeds
Meaning of trustee
A trustee is defined in the Companies Acts in Antigua, Barbados, Dominica,

Grenada, Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago as
any person appointed as trustee under the terms of a trust deed to which a
company is a party.78 Any successor of such a person is also included in the
definition of a trustee.79
Eligibility for appointment as trustee
Under the above-mentioned Acts, there is one very important stipulation on

the eligibility of a person for appointment as a trustee of a trust deed. It is that
no person may be appointed as trustee if there is a material conflict of interest
between his role as trustee and his role in any other capacity.80 A material
conflict of interest is deemed to exist where a person is an officer or
employee, or a shareholder of the company issuing the debentures.81
If a trustee becomes aware of a material conflict of interest, he must within
ninety days after becoming aware eliminate the conflict of interest or resign
from the office of trustee.82 Notwithstanding the material conflict of interest of
a trustee, a trust deed, any debentures issued thereunder and a security interest
effected thereby are valid.83
If a trustee is appointed where there is a material conflict of interest or
continues as a trustee after becoming aware of a material conflict of interest,
any interested person may apply to the court for an order that the trustee be
replaced.84 On such an application, the court has power to make an order on
such terms as it thinks fit.85
Duties of trustees
Duty to furnish list of debenture-holders
A trustee is under a duty to furnish a holder of a debenture issued under a

trust deed with a list of debenture-holders.86 This obligation arises only where
the debenture-holder pays to the trustee a reasonable fee and delivers to the
trustee a stipulated statutory declaration.87 The statutory declaration is a
declaration which states the name and address of the debenture-holder
requesting the list88 and that the list will not be used except in connection with
specified matters.89
The specified matters include use in an effort to influence the voting of the
debenture-holders,90 use in an offer to acquire debentures,91 or use in any
other matter relating to the debentures or the affairs of the issuer or guarantor
thereof.92 Where the debenture-holder making the statutory declaration is a
body corporate, the declaration must be made by a director or officer of the
body corporate.93
When once the debenture-holder satisfies these conditions, the trustee must
furnish him with a list setting out (i) the names and addresses of the registered
holders of the outstanding debentures of the issuer,94 (ii) the principal amount
of outstanding debentures owned by each such holder,95 and (iii) the aggregate
amount of debentures outstanding96 as shown on the records maintained by
the trustee on the day that the statutory declaration is delivered to him. The
trustee has a right to demand the issuer of the debentures to furnish him with
the information required to enable him to comply with his duty to furnish the
list.97
Duty of honesty and good faith
A trustee under a trust deed in exercising his powers and discharging his
duties is under a statutory duty of good faith similar to that imposed on
directors. He must act honestly and in good faith with a view to the best
interests of the holders of the debentures issued under the trust deed.98 A
trustee may escape liability for breach of this duty if he can show that he
relied in good faith upon statements contained in a statutory declaration,
certificate, opinion or report that complies with the statute in question or the
trust deed.99
Duty of care, diligence and skill
Again, like a director, a trustee under a trust deed in exercising his powers and
discharging his duties is under a statutory duty of care. He must exercise the
care, diligence and skill of a reasonably prudent trustee.100 As with breach of
the duty of honesty and good faith, a trustee may escape liability if he can
show that he relied in good faith upon statements contained in a statutory
declaration, certificate, opinion or report that complies with the statute or the
trust deed.101
Duty to give notice of event of default
Within thirty days after a trustee under a trust deed becomes aware of an
event of default under the trust, he must give to the holder of any debentures
issued under the trust deed notice of the event of default arising under the
trust deed and continuing at the time the notice is given.102 A trustee is only
relieved of this duty if he reasonably believes that it is in the best interests of
the debenture-holders to withhold the notice and so informs the issuer and
guarantor in writing.103
Non-exculpation from liability
It is common practice to include in trust deeds elaborate provisions

exculpating the trustee from liability for breach of his duty to give notice of an
event of default. Any such provision in a trust deed or in any agreement
between a trustee and the debenture-holders issued thereunder or between
the trustee and the issuer or guarantor which purports to relieve a trustee
from his obligation of honesty and good faith and to exercise the care,
diligence and skill of a reasonably prudent trustee is rendered ineffective by
It is to be noticed here that the Jamaican Act also contains a provision
forbidding the exculpation of the trustees of covering trust deeds from
liability. Section 88(1) of that Act provides that:
any provision contained in a trust deed for securing an issue of debentures, or in any contract with the
holders of debentures secured by a trust deed, shall be void in so far as it would have the effect of
exempting a trustee thereof from or indemnifying him against liability for breach of trust where he fails to
show the degree of care and diligence required of him as trustee, having regard to the provisions of the
trust deed conferring on him any powers, authorities or discretions.
Rights of trustees
Right to be furnished with evidence of compliance
An issuer or guarantor of debentures issued or to be issued under a trust deed

must, before doing certain specified acts relating to the trust deed, furnish the
trustee with evidence of compliance with the conditions in the trust deed.105
The complete list of specified acts comprise the issue, certification and delivery
of debentures under the trust deed;106 the release, or release and substitution,
of property that is subject to a security interest constituted in the trust deed;107
and the satisfaction and discharge of the trust deed.108
A trustee may also demand that the issuer or guarantor furnish him with
evidence of compliance in respect of any act to be done by the trustee at the
request of the issuer or guarantor.109 Upon such a demand, the issuer or
guarantor must furnish the trustee with evidence of compliance by the issuer
or guarantor in respect of these acts.110
Finally, at least once in each twelve-month period beginning on the date of
the trust deed and at any other time upon the demand of the trustee, the issuer
or guarantor must furnish the trustee with a certificate that the issuer or
guarantor has complied with all requirements contained in the trust deed that,
if not complied with, would, with the giving of notice, lapse of time or
otherwise, constitute an event of default.111 If, however, the issuer or guarantor
has failed to comply, they must give particulars of that failure.112
What is included in evidence of compliance is specified in the Acts.113 It
includes a statutory declaration or certificate made by a director or an officer
of the issuer or guarantor stating that the conditions in question in the trust
deed have been complied with.114 If the trust deed requires compliance with
conditions that are subject to review by an attorney-at-law, it also includes the
attorney-at-law’s opinion that those conditions have been complied with.115
Finally, if the trust deed requires compliance with conditions that are subject
to review by an auditor or accountant, it includes an opinion or report of the
auditor of the issuer or guarantor, or such other accountant as the trustee may
select, that those conditions have been complied with.116
The evidence of compliance must also include a statement by the person
giving the evidence (i) declaring that he has read and understands the
conditions of the trust deed;117 (ii) describing the nature and scope of the
examination or investigation upon which he based the certificate, statement or
opinion;118 and (iii) declaring that he has made such examination or
investigation as he believes necessary to enable him to make the statements or
give the opinion contained or expressed in the statement.119
Right to hold contracts
Unless the trust deed provides otherwise, the trustee holds all contracts,
stipulations and undertakings given to him and all mortgages, charges and
securities vested in him in connection with the debentures covered by the trust
deed, or some of those debentures, exclusively for the benefit of the
debenture-holders concerned.120
Rights of debenture-holders
Right to sue for payment and compensation
Every debenture-holder has a statutory right to sue the company that issued
the debenture he holds for payment of any amount payable to him in respect
of the debentures.121 Every debenture-holder also has a statutory right to sue
the trustee of the trust deed covering the debentures he holds for
compensation for any breach of the duties that the trustee owes him.122 In
bringing any such suit, it is not necessary for any other debenture-holders of
the same class or, if the suit is against the company, the trustee under the
covering deed, to be joined as a party.123
The statutory right of the debenture-holder to sue the company for
payment or the trustee for compensation applies despite anything contained in
a debenture, trust deed or other instrument.124 On the other hand, a provision
in a debenture or trust deed is valid and binding on all debenture-holders of
the class concerned to the extent that, by a resolution supported by the votes
of the holders of at least three-quarters in value of the debentures of that class
on the resolution, the provision enables a meeting of the debenture-holders to
take any of a statutory list of actions.125
These actions include (i) releasing any trustee from liability for any breach
of his duties to the debenture-holders that he has already committed, or
generally from liability for all such breaches, without necessarily specifying
them, upon his ceasing to be a trustee;126 (ii) consenting to the alteration or
abrogation of any rights, powers or remedies of the debenture-holders and the
trustee under the trust deed covering their debentures, except the powers and
remedies relating to realisation of security interests;127 (iii) consenting to the
substitution of debentures of a different class issued by the company or any
other company or body corporate for the debentures of the debenture-
holders;128 or (iv) consenting to the cancellation of the debentures in
consideration of the issue to the debenture-holders of shares credited as fully
paid in the company or other body corporate.129
Right to realise security interest
Debenture-holders have a statutory right to realise any security interest vested

in them or in any other person for their benefit.130 The circumstances under
which they may exercise this right, however, depend upon whether or not
their debentures are secured by a general floating charge.131
Where the debentures are not secured by a general floating charge, the
debenture-holder may realise his security interest if the company fails, within
one month after it becomes due, to pay any instalment of interest, the whole
or part of the principal or any premium owing under the debentures or the
trust deed covering the debentures.132 The debenture-holder may also realise
his security interest if the company fails to fulfil any of the obligations
imposed on it by the debentures or the trust deed.133 Again the debenture-
holder may realise his security interest if any circumstances occur that by the
terms of the debentures or trust deed entitle the holders of the debentures to
realise their security interest.134 Finally, the debenture-holder may realise his
security interest if the company is liquidated.135
Where the debentures are secured by a general floating charge, the
debenture-holder is additionally entitled to realise his security interest if any
creditor of the company issues a process of execution against any of its assets
or commences proceedings for liquidation of the company by the court.136 If
the company ceases to pay its debts as they fall due137 or ceases to carry on
business,138 the debenture is also additionally entitled to realise his security
interest. Similarly, if the company incurs, after the issue of debentures of the
class concerned, losses or diminution in the value of the assets that in
aggregate amount to more than half of the total amount owing in respect of
(a) debentures of the class held by the debenture-holders who seek to enforce
their security interest, and (b) debentures whose holders rank before them for
payment of principal and interest, the debenture-holder is additionally
entitled.139 Finally, a debenture-holder is additionally entitled if any
circumstances occur that entitle debenture-holders who rank for payment of
principal or interest in priority to the debenture secured by the general
floating charge to realise their security.140
Conclusion
What has emerged from this chapter is that the major intervention in the law
relating to debentures and debenture trust deeds in the Commonwealth
Caribbean is to be found in the Acts in Anguilla, Antigua, Barbados, Dominica,
Grenada, Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago.
The provisions in these Acts appear to be intended to achieve three objects.
The first is that debenture-holders will have the services of disinterested
debenture trustees and that such trustees will conform to the high standards of
conduct observed by the more conscientious trustees. The second is to provide
machinery whereby continuing full and fair disclosure may be made to
debenture-holders and whereby they may get together for the protection of
their own interests. The third is to provide full and fair disclosure, not only at
the time of the original issue of debentures, but throughout the life of the
debenture. These provisions, it is submitted, go a long way to meeting the
challenges confronted by corporate debt security holders in the modern
context.
Notes
1 Ang s 1; Ant s 543(1)(f); Bah s 2; B’dos s 448(h); Dom s 543(1)(f); Gren s 543(1)(f); Guy s 535(h); J’ca s 2(1);
Mont s 543(1); St L s 543(1)(f); St V s 543(1)(f); T’dad s 4.
2 Bel s 2(1).
3 (1887) Ch D 260 Eng Ch D.
4 (1887) Ch D 260, 264.
5 See, e.g., Schmitthoff (ed), Palmer’s Company Law (London: 1987) 672.
6 See, e.g., British Indian Steam Navigation Co v IRC (1881) 7 QBD 165, 172–173 Eng QBD per Lindley J;
Edmonds v Blaina Furnaces Co (1887) 36 Ch D 215, 219 Eng Ch D per Chitty J; Robson v Byrne [1895] 2 Ch
118.
7 See Palmer’s Company Law op cit n 5 pp 674–675.
8 Re Uruguay Central and Hugueritas Rly Co of Monte Video [1879] 11 Ch D 372; Re Dunderland Iron Ore Co
Ltd [1909] 1 Ch 446.
10 J’ca s 4; St C/N s 18.
11 Bel s 105.
12 Bel s 106.
276(2); T’dad s 277(2).
276(2); T’dad s 277(2).
15 Ang s 177(1); Ant s 286(1)(a) which makes s 285(1) applicable; B’dos s 273(1)(a) which makes s 272(1)
applicable; Dom s 286(1)(a) which makes s 285(1) applicable; Gren s 286(1)(a) which makes s 285(1)
applicable; Guy s 270(1)(a) which makes s 285(1) applicable; Mont s 286(1)(a) which makes s 285(1)
applicable; St L s 286(1)(a) which makes s 285(1) applicable; St V s 286(1)(a) which makes s 285(1)
applicable; T’dad s 287(1)(a) which makes s 286(1) applicable.
276(1); T’dad s 277(1).
18 Bel s 105; J’ca s 89.
19 Ang s 290; Ant s 544(1); Bah s 303(1); B’dos 449(1); Dom s 544(1); Gren s 544(1); Guy s 541(1); Mont s 544(1);
St C/N s 220(1)(a); St L s 544(1); St V s 544(1); T’dad s 518(1).
20 Ang s 174; Ant s 282; B’dos 269; Dom s 282; Gren s 282; Guy s 266; Mont s 282; St L s 282; St V s 282; T’dad
s 283.
21 Ang s 174(1); Ant s 282(1); B’dos 269(1); Dom s 282(1); Gren s 282(1); Guy s 266(1); Mont s 282(1); St L s
282(1); St V s 282(1); T’dad s 283(1).
22 Ang s 174(1)(a); Ant s 282(1)(a); B’dos 269(1)(a); Dom s 282(1)(a); Gren s 282(1)(a); Guy s 266(1)(a); Mont s
23 Ang s 174(1)(b); Ant s 282(1)(a); B’dos 269(1)(b); Dom s 282(1)(b); Gren s 282(1)(b); Guy s 266(1)(b); Mont s
24 Ang s 174(1)(c); Ant s 282(1)(a); B’dos 269(1)(c); Dom s 282(1)(c); Gren s 282(1)(c); Guy s 266(1)(c); Mont s
25 Ang s 174(1)(d); Ant s 282(1)(a); B’dos 269(1)(d); Dom s 282(1)(d); Gren s 282(1)(d); Guy s 266(1)(d); Mont s
26 Ang s 174(2)(a); Ant s 282(2)(a); B’dos 269(2)(a); Dom s 282(2)(a); Gren s 282(2)(a); Guy s 266(2)(a); Mont s
27 Ang s 174(2)(b); Ant s 282(2)(b); B’dos 269(2)(b); Dom s 282(2)(b); Gren s 282(2)(b); Guy s 266(2)(b); Mont s
28 Ang s 174(2); Ant s 282(2); B’dos 269(2); Dom s 282(2); Gren s 282(2); Guy s 266(2); Mont s 282(2); St L s
282(2); St V s 282(2); T’dad s 283(2).
29 Biggerstaff v Rowatt’s Wharf Ltd [1896] 2 Ch 93 Eng CA; Re Fireproof Doors Ltd [1916] 2 Ch 142.
30 Lemon v Austin Friars Investment Trust Ltd [1926] Ch 1 Eng CA; R v Findlater [1939] 1 KB 594.
286(2); T’dad s 287(2).
286(1); T’dad s 287(1).
285(2); T’dad s 286(2).
35 Ang ss 175 and 177.
36 See Ant s 286(2); B’dos s 273(2); Dom s 286(2); Gren s 286(2); Guy s 270(2); Mont s 286(2); St L s 286(2); St V s
286(2); T’dad s 287(2).
286(2); T’dad s 287(2).
T’dad s 284.
T’dad s 284.
40 Ang s 175; Ant s 283; B’dos s 270; Dom s 283; Gren s 283; Guy s 267; St L s 283; St V s 283; T’dad s 284.
41 Ang s 177(1); Ant s 286(1)(a) which makes s 285(1) applicable; B’dos s 273(1)(a) which makes s 272(1)
applicable; Dom s 286(1)(a) which makes s 285(1) applicable; Gren s 286(1)(a) which makes s 285(1)
applicable; Guy s 270(1)(a) which makes s 285(1) applicable; Mont s 286(1)(a) which makes s 285(1)
applicable; St L s 286(1)(a) which makes s 285(1) applicable; St V s 286(1)(a) which makes s 285(1)
applicable; T’dad s 287(1)(a) which makes s 286(1) applicable.
45 Ang s 177(1)(f); Ant s 285(1)(f); B’dos s 272(1)(f); Dom s 285(1)(f); Gren s 285(1)(f); Guy s 269(1)(f); Mont s
47 Ang s 177(1)(i); Ant s 285(1)(i); B’dos s 272(1)(i); Dom s 285(1)(i); Gren s 285(1)(i); Guy s 269(1)(i); Mont s
285(1)(i); St L s 285(1)(i); St V s 285(1)(i); T’dad s 286(1)(i).
48 Ang s 177(1)(j); Ant s 285(1)(j); B’dos s 272(1)(j); Dom s 285(1)(j); Gren s 285(1)(j); Guy s 269(1)(j); Mont s
49 Ang s 177(1)(l); Ant s 285(1)(l); B’dos s 272(1)(l); Dom s 285(1)(l); Gren s 285(1)(l); Guy s 269(1)(l); Mont s
50 Ang s 177(1)(m); Ant s 285(1)(m); B’dos s 272(1)(m); Dom s 285(1)(m); Gren s 285(1)(m); Guy s 269(1)(m);
Mont s 285(1)(m); St L s 285(1)(m); St V s 285(1)(m); T’dad s 286(1)(l).
51 Ang s 177(1)(c) and (e); Ant s 286(1)(b); B’dos s 273(1)(b); Dom s 286(1)(b); Gren s 286(1)(b); Guy s 270(1)(b);
Mont s 286(1)(b); St L s 286(1)(b); St V 286(1)(b); T’dad s 287(1)(b).
52 Ang s 177(1)(d); Ant s 286(1)(c); B’dos s 273(1)(c); Dom s 286(1)(c); Gren s 286(1)(c); Guy s 270(1)(c); Mont s
285(2); St V s 285(2); T’dad s 287(2).
266(c); T’dad s 267(c).
T’dad s 284.
281(1); St V s 281(1); T’dad s 282(1).
281(2); St V s 281(2); T’dad s 282(2).
281(3); St V s 281(3); T’dad s 282(3).
285(1); T’dad s 286(1).
285(1)(a); St V s 285(1)(a); T’dad s 286(1)(a).
285(1)(b); St V s 285(1)(b); T’dad s 286(1)(b).
285(1)(c); St V s 285(1)(c); T’dad s 286(1)(c).
285(1)(d); St V s 285(1)(d); T’dad s 286(1)(d).
285(1)(e); St V s 285(1)(e); T’dad s 286(1)(e).
285(1)(f); St V s 285(1)(f); T’dad s 286(1)(f).
70 Ant s 285(1)(g); B’dos s 272(1)(g); Dom s 285(1)(g); Gren s 285(1)(g); Guy s 269(1)(g); Mont s 285(1)(g); St L s
285(1)(g); St V s 285(1)(g); T’dad s 286(1)(g).
71 Ant s 285(1)(h); B’dos s 272(1)(h); Dom s 285(1)(h); Gren s 285(1)(h); Guy s 269(1)(h); Mont s 285(1)(h); St L s
285(1)(h); St V s 285(1)(h); T’dad s 286(1)(h).
72 Ant s 285(1)(i); B’dos s 272(1)(i); Dom s 285(1)(i); Gren s 285(1)(i); Guy s 269(1)(i); Mont s 285(1)(i); St L s
285(1)(i); St V s 285(1)(i); T’dad s 286(1)(i).
73 Ant s 285(1)(j); B’dos s 272(1)(j); Dom s 285(1)(j); Gren s 285(1)(j); Guy s 269(1)(j); Mont s 285(1)(j); St L s
285(1)(j); St V s 285(1)(j); T’dad s 286(1)(j).
74 Ant s 285(1)(k); B’dos s 272(1)(k); Dom s 285(1)(k); Gren s 285(1)(k); Guy s 269(1)(k); Mont s 285(1)(k); St L s
285(1)(k); St V s 285(1)(k); T’dad s 286(1)(k).
75 Ant s 285(1)(l); B’dos s 272(1)(l); Dom s 285(1)(l); Gren s 285(1)(l); Guy s 269(1)(l); Mont s 285(1)(l); St L s
285(1)(l); St V s 285(1)(l); T’dad s 286(1)(l).
76 Ant s 285(1)(m); B’dos s 272(1)(m); Dom s 285(1)(m); Gren s 285(1)(m); Guy s 269(1)(m); Mont s 285(1)(m); St
L s 285(1)(m); St V s 285(1)(m); T’dad s 286(1)(m).
77 Ant s 285(1)(n); B’dos s 272(1)(n); Dom s 285(1)(n); Gren s 285(1)(n); Guy s 269(1)(n); Mont s 285(1)(n); St L s
285(1)(n); St V s 285(1)(n); T’dad s 286(1)(n).
266(b); T’dad s 267(b).
266(b); T’dad s 267(b).
268(1); T’dad s 269(1).
268(2); T’dad s 269(2).
268(3); T’dad s 269(3).
268(4); T’dad s 269(4).
268(5); T’dad s 269(5).
268(5); T’dad s 269(5).
269(1); T’dad s 270(1).
269(1); T’dad s 270(1).
269(4)(a); St V s 26(4)(a); T’dad s 270(4)(a).
269(4)(b); St V s 26(4)(b); T’dad s 270(4)(b).
269(5)(a); St V s 26(5)(a); T’dad s 270(5)(a).
269(5)(b); St V s 26(5)(b); T’dad s 270(5)(b).
269(5)(c); St V s 26(5)(c); T’dad s 270(5)(c).
26(3); T’dad s 270(3).
269(1)(a); St V s 26(1)(a); T’dad s 270(1)(a).
269(1)(b); St V s 26(1)(b); T’dad s 270(1)(b).
269(1)(c); St V s 26(1)(c); T’dad s 270(1)(c).
97 Ant s 269(2); B’dos s 256(2); Dom s 269(2); Gren s 269(2); Guy s 253(2); Mont s 269(2); St L s 269(2); St V s 26
9(2); T’dad s 270(2).
277(a); T’dad s 278(a).
277(b); T’dad s 278(b).
270(1); T’dad s 271(1).
270(1)(a); St V s 270(1)(a); T’dad s 271(1)(a).
270(1)(b); St V s 270(1)(b); T’dad s 271(1)(b).
108 Ant s 270(1)(c); B’dos s 257(1)(c); Dom s 270(1)(c); Gren s 270(1)(c); Guy s 254(1)(c); Mont 270(1)(c); St L s
270(1)(c); St V s 270(1)(c); T’dad s 271(1)(c).
270(2); T’dad s 271(2).
270(2); T’dad s 271(2).
271(a); T’dad s 272(a).
271(b); T’dad s 272(b).
271(c); T’dad s 272(c).
272(a); T’dad s 273(a).
272(b); T’dad s 273(b).
119 s 272(c); B’dos s 259(c); Dom s 272(c); Gren s 272(c); Guy s 256(c); Mont s 272(c); St L s 272(c); St V s 272(c);
T’dad s 273(c).
280(1); T’dad s 281(1).
280(2)(a); St V s 280(2)(a); T’dad s 281(2)(a).
280(2)(b); St V s 280(2)(b); T’dad s 281(2)(b).
280(2); T’dad s 281(2).
280(3); T’dad s 281(3).
280(3); T’dad s 281(3).
280(3)(a); St V s 280(3)(a); T’dad s 281(3)(a).
280(3)(b); St V s 280(3)(b); T’dad s 281(3)(b).
280(3)(c); St V s 280(3)(c); T’dad s 281(3)(c).
280(3)(c); St V s 280(3)(c); T’dad s 281(3)(c).
287(1); T’dad s 288(1).
287(1)(a); St V s 287(1)(a); T’dad s 288(1)(a).
287(1)(b); St V s 287(1)(b); T’dad s 288(1)(b).
287(1)(c); St V s 287(1)(c); T’dad s 288(1)(c).
287(1)(d); St V s 287(1)(d); T’dad s 288(1)(d).
287(2)(a); St V s 287(2)(a); T’dad s 288(2)(a).
287(2)(b); St V s 287(2)(b); T’dad s 288(2)(b).
287(2)(c); St V s 287(2)(c); T’dad s 288(2)(c).
287(2)(d); St V s 287(2)(d); T’dad s 288(2)(d).
287(2)(e); St V s 287(2)(e); T’dad s 288(2)(e).
Chapter 23
Receivers and Receiver-Managers
Introduction
The appointment of a receiver or receiver-manager out of court or by the
court is a method provided for in the Companies Acts in Antigua, the
Vincent and Trinidad and Tobago,1 and the Bankruptcy and Insolvency Act
(BIA) in Barbados, St. Vincent and Trinidad and Tobago,2 by which debenture-
holders may enforce their security interest. The Jamaican Act does not
expressly confer such a right on debenture-holders, but it includes a number of
provisions on receivers and managers.3 In Jamaica, as in Belize and St
Christopher/Nevis, the appointment of receivers of companies is governed
almost exclusively by the provisions in the debenture which provides for their
appointment.
The law applicable to receivers and receiver-managers is especially
complex and is the subject of entire texts.4 Consequently, a detailed
examination of this subject is beyond the scope of this work. What is
attempted in this chapter is an exploration of the Companies Acts in Antigua,
Vincent and Trinidad and Tobago dealing with corporate receivership and
which fall under the heading ‘Receivers and Receiver-Managers’, and those in
Jamaica under the Part VI of the Companies Act headed ‘Receivers and
Managers’. Notes are also provided on how these provisions are affected by
the provisions of the BIA in Barbados, St Vincent and Trinidad and Tobago.
Applicability of the Companies Acts and the BIAs
Before embarking on an exploration of the law on company receivers and
receiver-managers, it is expedient to address the question of when the
Companies Acts’ provisions in Barbados, St Vincent and Trinidad and Tobago
apply to a secured creditor appointing a receiver over the assets of a debtor-
company, and when the BIAs’ provisions apply. The simple answer to this
seems to be that the Companies Acts’ provisions apply where a receiver or
receiver-manager is appointed over the assets of a solvent debtor-company,
and the BIAs’ provisions apply where the appointment is over the assets of an
insolvent company.
That conclusion is not to be obtained from any express provision in the
BIAs. Rather, it is be extrapolated from the purpose of those Acts stated in
their long titles. These long titles make it abundantly clear that the
fundamental purpose of the BIAs is to establish a special regime of regulations
to govern individual insolvency as well as corporate insolvency.5 Interpreted in
the context of their stated purpose, these Acts are clearly intended to apply at
to insolvent debtor-companies. By the same token, it would be remarkable if,
after the enactment of the BIAs, the provisions of the Companies Acts, rather
than the provisions of the BIAs which are intended to govern bankruptcy and
insolvency, applied to a receiver appointed over an insolvent debtor-company
is insolvent. In other words, Parliament must be taken to have intended an
amendment to the Companies Acts with respect to bankrupt and insolvent
debtor-companies by the enactment of the BIAs.6 Accepting, then, that the
BIAs are intended to be confined to insolvency and bankruptcy issues, it
becomes difficult to see how the receivership provisions in that Act, in the
absence of express words to that effect, could apply to the appointment of a
receiver of a solvent debtor-company. This interpretation compels the
conclusion that the provisions of the Companies Acts continue to be the only
provisions applicable to appointment over solvent debtor-companies.
Concepts and Definitions
Meaning of receivers and receiver-managers
The expressions ‘receivers’ and ‘receiver-managers’ are not given any special
statutory definition as such. However, since neither the former Companies
Acts in any of the territories, nor the present Companies Acts, contained any
provision ascribing a statutory meaning to ‘receivers’ or ‘receivers and
managers’, the principle of statutory interpretation relating to the presumption
against changes in the common law is applicable.7 It is worth noting that, even
though ‘receiver’ is defined in the BIAs,8 those definitions, as will be seen,
have not introduced any new concept of a receiver as a secured creditor’s
remedy.
Meaning of receiver
The common law meaning of the expression ‘receiver’ is widely accepted as

being correctly stated by Lord Jessel MR in the English case of Re Manchester
and Milford Rly Co, ex p Cambrian Rly Co.9 He said there:10
A receiver is a term which was well known in the Court of Chancery, as meaning a person who received
rents or other income, paying ascertained outgoings, but also who does not, if I may say so, manage the
property in the sense of buying or selling or anything of that kind. We were most familiar with the
distinction in the case of a partnership. If a receiver was appointed of partnership assets, the trade stopped
immediately. He collected all debts, sold the stock in trade and other assets and under the order of the
Court the debts of the concern were liquidated and the balance divided. If it was desired to continue the
trade at all it was necessary to appoint a manager, or a receiver and manager as it was generally called. He
could buy and sell and carry on the trade.
Following the logic that the common law meaning of ‘receiver’ is the
applicable law in the region, a corporate receiver in Commonwealth
Caribbean company law, then, is a person who is appointed by a debenture-
holder or trustee of a trust deed to receive the income of the company, sell
stock-in-trade and other assets, to pay ascertained outgoings and to realise the
security interest of his appointor. Significantly, he has, as such, no authority to
carry on the company’s business, unless he is given such authority by the
court.11
It is arguable, also, that the Companies Acts in the Commonwealth
Caribbean in effect legislates the common law meaning by providing as
follows:12
A receiver of any property of a company may, subject to the rights of secured creditors, receive the
income from the property, pay the liabilities connected with the property and realise the security interest
of those on behalf of whom he is appointed; but except to the extent permitted by the court, he may not
carry on the business of the company.
The BIAs have adopted the general corporate law concept of receiver as a
person appointed by a secured creditor to realise the security interest of the
secured creditor making the appointment. However, those Acts have imposed
the limitation that, for purposes of those Acts, the appointment must be in
respect of all or substantially all of the personal property that makes up the
current assets of the debtor-company.13
Meaning of receiver-manager
It is to be noted that Lord Jessel MR in the above-cited passage14 refers to a

person appointed with power to buy and sell and carry on the business of the
company as a ‘receiver and manager’. In Re Newdigate Colliery Ltd,15 Cozens-
Hardy MR in the English Court of Appeal threw some additional light on the
nature and function of a ‘receiver and manager’. He said there:16
The jurisdiction of the Court to appoint receivers is extremely old, but I believe the practice of appointing
a manager is far more modern, and I think it has been settled that the Court will never appoint a person
receiver and manager except with a view to a sale. The appointment is made by way of interlocutory order
with a view to a sale, it is not a permanency.
It is manifest that it is the ‘receiver and manager’ described by Cozens-Hardy
MR who is referred to as a ‘receiver-manager’ in the Companies Acts in
Lucia, St Vincent and Trinidad and Tobago. This conclusion, it is submitted, is
supported by a provision in these Acts, which reads as follows:17
A receiver of a company may, if he is also appointed manager of the company, carry on any business of
the company to protect the security interest of those on behalf of whom he is appointed.
The BIAs do not define receiver-manager as such, and interpreted literally, the
definition of ‘receiver’ in the BIAs does not include a receiver who is
appointed with power to carry on the business of the debtor-company to
protect the security interest of the secured creditor who appointed him, or in
other words, a receiver-manager. However, interpreted in the context of the
other provisions of the Acts, and in order to give effect to the intention of
Parliament and to avoid a patent absurdity, it is felt that the courts will treat
the definition of ‘receiver’ in the Acts as including a receiver-manager.
Appointment of Receivers and Receiver-Managers
Who may be appointed a receiver or receiver-manager?
No special qualifications are required by law for a person with full legal
capacity and who is not disqualified by regional Companies Acts to act as a
company receiver or receiver-manager. The persons so disqualified are a body
corporate,18 an undischarged bankrupt,19 or a person disqualified from being a
trustee under a trust deed executed by the company or would be so
disqualified if a trust deed had been executed by the company.20
The disqualification provisions in the Companies Acts suggest that all those
persons who are not disqualified are eligible for appointment. This means that
a debenture-holder can appoint, for instance, a person who has neither
practical nor professional qualification or, apparently, even himself as receiver
under a charge. In practice, however, accountants or attorneys-at-law are
usually appointed receivers and receiver-managers in the region.
The law on the qualification requirements for appointment as a receiver or
receiver-manager under the Companies Acts has been significantly altered by
the provisions of the BIAs. These Acts expressly stipulate that only a person
who is licensed as a trustee may be appointed as a receiver under a security
agreement.21 In turn, other provisions of those Acts clearly contemplate
regulations being made prescribing qualification requirements for persons
who wish to obtain a licence to act as a trustee.22
Who may appoint a receiver or receiver-manager?
The Companies Acts in the Commonwealth Caribbean make express

provision as to who may appoint a receiver out of court.23 According to these
Acts, the persons who may appoint a receiver out of court are trustees of a
covering trust deed24 or the holders of debentures in respect of which there is
owing more than half of the total amount in relation to all the debentures of
the same class.25 These rules have not been changed by the BIAs.26
Time at which right to appoint arises
The time at which a debenture-holder or a trustee for a debenture-holder

becomes entitled to appoint a receiver is stipulated statutorily in a provision in
regional Companies Acts which reads as follows:27
At any time after a class of debenture-holders become entitled to realise their security interest, a receiver
of any assets subject to such security interest or in favour of the class of debenture-holders or the trustee of
the covering deed or any other person may be appointed.
This provision is generally accepted as meaning that as long as one or more of

the statutory circumstances set out in the Acts28 occur, the debenture-holder is
entitled to appoint. This position is not altered by the BIAs.29
Procedure to be followed in appointing
Formality necessary for appointment
The Companies Acts in the Commonwealth Caribbean do not contain any

provision requiring any prescribed form for the appointment of a receiver or
receiver-manager out of court. Invariably, however, mortgage debentures do
provide that appointment shall be made ‘by writing’. In such cases, the
requirement for writing must be strictly followed.30 The written authority
should contain (i) the name and address of the debenture-holder making the
appointment, (ii) the grounds on which he relies for making the appointment,
(iii) where the debenture requires the consent of a certain proportion of
debenture-holders, a statement that the requisite consent has been obtained,
(iv) where the appointors are debenture-holders who are owed more than half
of the total amount owing in respect of all the debentures of the same class as
that of the appointors, a statement to this effect, and (v) a statement as to the
extent of the appointee’s powers.
The written authority may be completed and dated prior to its delivery to
the receiver or receiver-manager.31 However, the appointment only takes
effect when the written authority is presented to the receiver or receiver-
manager and it has been accepted by him.32 It is to be noted that the receiver’s
or receiver-manager’s acceptance may be either express or implied.33 But the
receiver or receiver-manager is at all times free to reject the offer of
appointment once there has been no acceptance by him.
Demand and appointment
Before a receiver or receiver-manager is appointed, it is usual practice to serve

a formal demand for payment of the debt on the debtor-company. However,
the question as to whether service of a formal demand for payment is a
necessary step in the appointment of a receiver is not free from difficulty.
There is some oblique support in the older cases for the view that there is no
need for service of demand.34 On the other hand, the more modern authorities
addressing the specific question of the service of demand as an essential step in
appointing a receiver consider the service of demand to be necessary to the
valid and effective appointment of a receiver. This is considered to be so both
in cases where the debenture itself contains a requirement for a demand as
well as where there is no requirement for it in the debenture.35
It is submitted that there is a good reason why service of a demand should
be regarded as necessary. It is this: receivership is an ‘extremely drastic
remedy’ which robs the company of its control over its own assets and
business.36 Given this, and given the importance of the company in modern
capitalist economies, it appears to be desirable that every opportunity should
be afforded a debtor-company to avoid receivership.37 The requirement of
service of demand as a necessary step in the appointment of receivers affords
the debtor-company some opportunity so to do.
It is worth noting that the demand for payment does not have to follow any
specific form. All that appears to be necessary is that the creditor, in writing,
demand all moneys secured by the debenture. It is further noted that a
demand for repayment can only be validly made if the debt is repayable on
demand or if a subsisting event of default has accrued at the date of
acceptance of the appointment by the receiver.
The BIAs have enacted an elaborate procedure which must be followed by
secured creditors in making an appointment.38 This procedure includes a
requirement that such a secured creditor must send to the debtor-company in
the prescribed form and manner, a notice of his intention to enforce his
security.39
Appointment after demand
The time within which a receiver may be appointed after service of a demand
is a moot issue. In the English case of Cripps (Pharmaceuticals) Ltd v
Wickenden, Goff J stated the law to be as follows:40
the cases show that all the creditor has to do is to give the debtor time to get [the money] from some
convenient place, not to negotiate a deal which he hopes will produce the money.
In another English case, Bank of Baroda v Parnessar,41 Walton J accepted this

statement which describes what he called the ‘mechanics of payment test’ as
representing English law on the question of the time within which a receiver
may be appointed after service of demand. In the most recent English decision
of Shepperd & Cooper Ltd v TSB Bank plc,42 Blackburne J affirmed the
mechanics of payment test adding the gloss that ‘if the debtor admits that the
debtor cannot pay, it is clearly unnecessary for the creditor to allow time for
the mechanics of payment which he knows cannot have any point’.43
There is, on the other hand, an impressive chain of Commonwealth
authority which states the law to be that a receiver may only be appointed
after the debtor has been given a reasonable time to comply with the
demand.44 According to these cases, what is a reasonable time depends upon
the circumstances of each case. The ‘reasonable time for payment test,’ it is
submitted, represents a more appropriate legal response given the drastic
nature of the remedy of receivership.
The law on appointment after demand has been clarified by the BIAs. These
Acts stipulate that where a notice required to be sent by a secured creditor is
sent, the secured creditor sending the notice cannot enforce the security in
respect of which the notice is sent until the expiry of ten days after the sending
of the notice.45 The ten-day rule does not apply where the debtor-company
consents to an earlier enforcement of the security by the secured creditor.46
Registration of the receiver
Under regional Companies Acts, within ten days from the appointment of a
receiver out of court, the person appointing the receiver must give notice to
the Registrar of such appointment.47 Upon such notification, the Registrar must
enter in the register of particulars of company charges the fact of the
appointment.48
Validity of appointment
The appointment of a receiver or receiver-manager may be affected by

requirements in the security instrument and by relevant statutory provisions.
Some examples of the kinds of requirements which may affect the validity of
an appointment are appointment without proper authority from either the
statute or the debenture or other security document,49 appointment before the
occurrence of an event stipulated in the debenture as a condition precedent to
an appointment50 or an appointment under the Acts before the occurrence of
one of the events listed in the Acts as necessary for the making of an
appointment. The validity of an appointment may also be affected by the
operation of legislation, such as exchange control legislation, which renders
invalid certain loans made without required statutory permissions.51
Judicial guidance on validity of appointment
A receiver or receiver-manager or any interested person may apply to the

court under the provisions of regional Companies Acts52 for guidance on any
matters affecting the appointment of a receiver or receiver-manager.
According to these provisions, upon an application by a receiver or receiver-
manager of a company, whether appointed by the court or under an
instrument, or upon an application by any interested person, the court may
make any order it thinks fit.53
These provisions do not expressly bestow upon the courts any specific
power in respect of determining the validity of the appointment of receivers
and receiver-managers. It is submitted that, despite this, the power in the
provisions to make ‘an order declaring the rights of persons before the court’54
is sufficiently ample to allow orders to be made by the court in respect of
matters relating to the validity of the appointment of receivers and receiver-
managers.
Removal, Replacement and Resignation of Receivers
and Receiver-Managers
Removal and replacement
Under the Companies Acts in the Commonwealth Caribbean, a person who is

properly appointed to be a receiver or receiver-manager may be removed if
he subsequently becomes disqualified by virtue of his becoming bankrupt55 or
his becoming a person disqualified from being a trustee under a trust deed
executed by the company.56
Where this occurs, another person may be appointed in his place by the
debenture-holders or by the trustee out of court, or, upon their application, by
order of the court.57 A receivership in these circumstances is not terminated or
interrupted by the occurrence of the disqualification.58
Quite apart from the statutory provisions for the removal of a receiver or
receiver-manager, the court has power to remove a receiver appointed by it or
under the provision of a security instrument out of court, and to appoint
another person to be the receiver in his stead.59 This power is usually exercised
where the original receiver has been less than diligent in seeking to protect
and enforce the rights of the secured creditors on whose behalf he was
appointed.60
Under the relevant Companies Acts, a receiver or receiver-manager
appointed out of court under the terms of a security instrument but who has
not subsequently become disqualified, may be removed and replaced in
accordance with the terms of the instrument by the persons empowered by
the instrument so to do.61 It is to be noted, however, that a receiver-manager
of the business or of any of the assets of a company may not be appointed
unless a receiver is in place.62
Resignation
It is open to a receiver or receiver-manager to resign his appointment at any

time. In such a case, a successor may be appointed in the same manner as the
original appointment. Under the relevant Companies Acts in the
Commonwealth Caribbean, when a receiver ceases to act as a receiver, he
must within ten days of his having done so, give notice of his having done so,
in the prescribed form to the Registrar.63 The Registrar must enter the notice in
the register of the particulars of charges relating to the company.64
Effect of Appointment of Receivers and Receiver-
Managers
Effect upon company’s personality
The appointment of a receiver and receiver-manager out of court does not

interfere with the legal persona of the company. This principle was recognised
the English House of Lords by Lord Atkinson in Moss Steamship Co Ltd v
Whinney, where he stated:65
[The] appointment of a receiver and manager over the assets and business of a company does not dissolve
or annihilate the company.
The only event which can destroy the legal personality of a company is a
liquidation and dissolution of the company.66 In the absence of this, the
company’s legal personality remains fully intact.67
Effect upon company’s management
Importance of whether appointment is of receiver or receiver-

manager appointed
The legal consequences of receivership for the management of a company, in

the Commonwealth Caribbean, depend upon whether a receiver or a receiver-
manager is appointed. This appears to be self-evident since, whereas the
Companies Acts in the Commonwealth Caribbean68 contain an express
provision delineating the relationship between a receiver-manager and the
directors, no such provision is to be found in these Acts in respect of a receiver.
However, this self-evident distinction was not expressly recognised by the
Barbados Court of Appeal in Winifred Enterprise Ltd v Barbados Development
Bank,69 nor by the Barbados High Court in Kings Beach Hotel Ltd v Marks.70
This non-recognition appears to have occurred more as a result of an oversight
on the part of the courts than as an adherence to any principle contrary to the
one being advanced here.
Effect of appointment of a receiver
As has just been pointed out, the Companies Acts in the Commonwealth
Caribbean do not contain any express provision which outlines the legal effect
of the appointment of a receiver upon the management of a company. On
ordinary principles of statutory interpretation, then, the position of a receiver
relative to that of the board of directors is governed by the common law.
The legal consequences of the appointment of a receiver for the powers of
the board of directors of a company at common law was extensively discussed
in the English Court of Appeal in Newhart Developments Ltd v Co-op
Commercial Bank Ltd.71 According to this case, the appointment of a receiver
does not destroy the internal management structure of the company, nor does
it render the directors functus officio. The directors remain in office and must
discharge their directorial duties. They, however, cannot exercise their powers
so as to interfere with the discharge by the receiver of his duties.
These principles were stated by Shaw L.J. in Newhart as follows:72
the appointment does not divest the directors of the company of their power as the governing body of the
company, of instituting proceedings in a situation where so doing does not in anyway infringe
prejudicially upon the position of the debenture-holders by threatening or imperiling the assets which are
subject to the charge.
Indeed, Shaw LJ went on to explain that the receiver has a real function only
within the scope of the company’s assets which are covered by the debenture,
and then only in so far as it is necessary to apply these assets in the best
possible way in the interest of the debenture-holders.73 He therefore concluded
that the appointment of a receiver, in general, only deprived directors of
power ‘to dispose of the assets within the debenture charge without the assent
or concurrence of the receiver’.74
In the English case of Tudor Grange Holdings Ltd v Citibank NA,75 Browne-
Wilkinson V-C said of the Newhart Developments Ltd v Co-op Commercial
Bank Ltd76 decision:
I have substantial doubts whether the Newhart case was correctly decided… The decision seems to ignore
the difficulty which arises if two different sets of people, the directors and the receivers, who may have
widely differing views and interests, both have powers to bring proceedings on the same cause of action.
Browne-Wilkinson V-C, despite his ‘substantial doubts’, accepted that Newhart

was binding authority.
Browne-Wilkinson V-C’s ‘substantial doubts’ notwithstanding, the
description of the legal relationship between the directors of a company and a
receiver appointed in respect of its assets given by Shaw LJ appears to be
contemplated in some of the provisions of the Companies Acts in the
Commonwealth Caribbean. For instance, the Acts define the function of a
receiver narrowly as being to ‘receive the income from the property, pay the
liabilities connected with the property and realise the security interest of those
on behalf of whom he is appointed’.77 Again, the Acts impose obligations on
directors such as the preparation of annual financial statements,78 the approval
of these financial statements79 and the calling of annual general meetings80
which continue to exist even though the company is in receivership. It is for
these reasons that the ‘substantial doubts’ on the correctness of the decision in
Newhart expressed by Browne-Wilkinson V-C in the later case of Tudor
Grange Holdings Ltd v Citibank NA81 appears to be unfounded, at least in the
context of Commonwealth Caribbean law.
The correct view of the law, therefore, seems to be that the width of the
receiver’s powers vis-à-vis those of the directors depends upon the terms of
the debenture. Thus, where the debenture confers wide powers on the
receiver, he will be held to hold these powers to the exclusion of the directors,
which powers may be enforced by way of an injunction restraining directorial
intervention.
These points are important because they underline the principle that the
powers of the directors of a company in receivership are residual and exist
only to the extent that they are not already held by the receiver. Given all of
this, the difficulty envisaged by Browne-Wilkinson V-C in Tudor Grange
Holdings Ltd v Citibank NA82 with the Newhart case of deciding whether it is
the board of directors or receiver who is entitled to take action in a given case
does not, with respect, arise. This is so because a prior determination based on
an interpretation of the actual provisions of the debenture has to be made in a
given case as to who has the power to take action. Under regional Companies
Acts, this may be done by an application to the court for directions under
provisions in these Acts.83
Effect of appointment of a receiver-manager
The Companies Acts in the Commonwealth Caribbean contain a provision

specifically regulating the legal effect of the appointment of a receiver-
manager, as distinct from a receiver, on the management of a company.84 This
provision reads as follows:
When a receiver-manager of a company is appointed… under an instrument, the powers of the directors of
the company that the receiver-manager is authorised to exercise may not be exercised by the directors
until the receiver-manager is discharged.
It is submitted, that on its plain words, such a provision operates to restrict the
powers of the board of directors, where a receiver-manager is appointed,85 but
only to the extent that the receiver-manager is ‘authorised’ to exercise a
directorial power.86
This simple point seems to have been missed by Blackman J in the Barbados
High Court case of Kings Beach Hotel Ltd et al v Marks.87
The question raised in this case was whether the directors of Kings Beach
Hotel Ltd had the right to instruct counsel to plead or appear in the action
before the court after the appointment of a receiver-manager of that company.
Blackman J held that the directors did have such a right on the basis that this
result was dictated by ‘common sense and reason’!88 Section 278 of the
Barbados Companies Act was cited to the court.89 However, Blackman J never
considered the debenture under which the receiver-manager was appointed to
ascertain whether the receiver-manager was authorised to exercise the
directorial power which, according to Blackman J, ‘common sense and reason’
dictated were vested in the directors.
Powers of Receiver and Receiver-Manager
Power to take possession of assets subject to security interest
Company receivers and receiver-managers appointed out of court under the

Companies Acts in the Commonwealth Caribbean are invested with extensive
powers by these Acts.90 A receiver or receiver-manager appointed under these
Acts has power to take possession of the assets that are subject to the security
interest.91 This power is an important prerequisite to the effective realisation
of debenture-holders’ security interest. It includes not only the power to take
physical possession of the charged assets, but also an implied power to
institute legal proceedings in the company’s name where necessary to get
possession of the company’s property.92
Power of sale
Another important statutory power conferred on a receiver and a receiver-

manager is the power to sell property of which possession has been taken.93
The provision for a power of sale is a legislative recognition of the fact that
the ultimate objective of the receiver or receiver-manager is to liquidate the
debt owing to the debenture-holder who appointed him, and that to achieve
this objective, it is sometimes necessary for some or all of the assets charged to
be sold by the receiver.
Power to carry on the business of the company
Where the security interest extends to such property, the receiver or receiver-
manager has power conferred by statute to collect debts owed to the
company,94 to enforce claims vested in the company,95 to compromise, settle
and enter into arrangements in respect of claims by or against the company,96
to carry on the company’s business with a view to selling it on the most
favourable terms,97 to grant or accept leases of land and licences in respect of
patents, designs, copyright, or trade, service or collective marks,98 and to
recover capital unpaid on the company’s issued shares.99
Powers conferred by the instrument of appointment
In addition to these statutory powers, receivers and receiver-managers

invariably have sweeping powers conferred on them by the instrument under
which they are appointed. Such powers are not affected by the powers
provided for under the Acts. All of the Acts enact that the powers conferred
under the Acts are in addition to, and not in substitution for, any other powers
provided for in the trust deed or debenture.100
Duties of Receivers and Receiver-Managers
Overview
The Companies Acts in the Commonwealth Caribbean contain substantial

provisions dealing with the duties of receivers and receiver-managers.101 These
provisions are not intended, it appears, to supplant pre-existing rules of equity
and common law on receivers’ and receiver-managers’ duties: they are
intended merely to supplement these rules. This section explores only those
provisions in these Companies Acts which seek to regulate the duties of
receivers and receiver-managers. It is worth noting that the duties imposed on
receivers in the BIAs are similar to those in the Companies Acts.102
Duty to act honestly and in good faith
A receiver or a receiver-manager is subject, under these Acts, to an express,

overriding statutory duty to ‘act honestly and in good faith’.103 There is,
however, no express statutory delineation of the nature and content of this
duty.
It is submitted that the statutory command of honesty and good faith does
not have the effect of constituting the receiver or receiver-manager a fiduciary
so as to make usual fiduciary obligations apply to him. What these Acts have
done is to enumerate a number of duties which attach the office of receiver
and receiver-manager.104 To establish the standard which is to be observed in
the discharge of these duties, the well-known duty of honesty and good faith
imposed by equity on receivers105 is restated in the Acts as a duty on receivers
and receiver-managers. Therefore, this statutory duty means nothing more
than that the receiver or receiver-manager must exercise powers honestly and
bona fide, and without fraud or mala fide, to serve the purposes for which he
was appointed.106
Duty to deal with company property in a commercially

reasonable manner
The Acts also mandate a receiver to ‘deal with any property of the company
in his possession or control in a commercially reasonable manner’.107 In Levy-
Russell v Tecmotiv Inc108 Lane J provided some guidelines as to the nature of
the standard of the duty to deal in a commercially reasonable manner. Broadly
speaking, these guidelines may be summarised in terms of five principles.
First, the question of whether a receiver or receiver-manager has dealt in a
commercially reasonable manner is one of fact and not one of law.
Consequently, determination as to whether there has been a breach of this
duty depends upon the facts of each case.
Second, the duty in the ‘commercially reasonable manner’ provision109
involves a duty to exercise reasonable business judgment. However,
reasonable business judgment can legitimately differ on the degree of
significance to be accorded to any facts. Thus, a receiver is not in breach of his
duty where it is not apparent that reasonable business people could not have
acted as he acted. The decisive factor is whether the receiver, faced with a
business judgement, chose a reasonable course of action.
Third, in deciding whether the receiver dealt in a commercially reasonable
manner, account must be taken of the information available to him. Thus, if
the directors fail to disclose important information to the receiver, this must be
taken into consideration.
Fourth, it appears that the duty to deal in a commercially reasonable
manner involves a duty to exhibit commercial probity. Lane J did not
expressly state this, but his insistence, in coming to his conclusion, that the
receiver in Levy-Russell Ltd v Tecmotiv was not guilty of a breach of this duty
and did not act fraudulently strongly suggests that Lane J was concerned with
commercial probity. In any event, this explanation of Lane J’s judgment on
this point is far more satisfactory than the alternative suggestion that fraud
and mala fides are relevant because the statutory duty on receivers to ‘act
honestly and in good faith’110 overrides their duty to deal in a commercially
reasonable manner.
Fifth, in deciding whether the duty to deal in a commercially reasonable
manner has been discharged, hindsight must not be used to decide
reasonableness. At most, future results may be used to test the reasonableness
of assumptions at the time.
Duty to give notice of appointment
A receiver or receiver-manager is under a duty imposed by regional Acts to

notify immediately the Registrar of his appointment.111 Under these Acts, a
receiver of the whole, or substantially the whole of the company’s assets must
also immediately upon his appointment send notice to the company of the fact
of his appointment.112
There is no prescribed form for the notice to the company. However, the
practice is for the receiver to advise the company of the date of the
appointment and the source of the authority of the appointment. The practice
is also for the receiver or receiver-manager to instruct the management of the
company not to enter into any further transactions in the company’s name
without the prior authorisation of the receiver or receiver-manager. In any
event, once the receiver or receiver-manager has been appointed he must
ensure that a statement to this effect is inserted on every invoice, order of
goods or business letter issued by or on behalf of the company.113
Duty to take company’s property in custody
The receiver or receiver-manager is under an express statutory duty to take

into his custody and control all the property included in his appointment.114 It
appears from the case law115 that, in the discharge of this duty, the receiver has
discretion to ignore particular assets and that he may exercise this discretion
where it would not benefit the debenture-holder to pursue such assets. Indeed,
the authorities establish that the court will restrain any attempt by the
company to interfere in such cases even if it appears that the receiver has
failed to exercise due care in the execution of his duty.116
Accounting duties
Commonwealth Caribbean Companies Acts impose a number of both general

and special accounting duties on a receiver and the receiver-manager. The
general statutory accounting duties of a receiver and the receiver-manager
include a duty to open and maintain a bank account in his name as receiver or
receiver-manager of the company for the moneys of the company coming
under his control;117 a duty to keep detailed accounts of all transactions carried
out by him as receiver or receiver-manager;118 a duty to keep accounts of his
administration which must be available during usual business hours for
inspection by the directors of the company;119 a duty to prepare financial
statements of his administration at such intervals and in such form as may be
prescribed;120 a duty, upon completion of his duties, to render a final account of
his administration in the same form used in the interim financial statements;121
and a duty to lodge with the Registrar a copy of all financial statements
prepared by him and the final account within fifteen days of the preparation of
the interim financial statements and final account as the circumstances
required.122
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, the
receiver of the whole, or substantially the whole, of the assets of a company is
under a special statutory obligation to send regular accounts to the Registrar,
to the trustees of trust deeds and to holders of debentures belonging to the
same class as the debentures in respect of which the receiver was appointed, in
an abstract the form of which must be approved by the Registrar.123 The
abstract must show the receiver’s or receiver-manager’s receipts and
payments during each period of twelve months dating from this
appointment124 and the aggregate amount of his receipts and his payments
during all preceding periods since his appointment.125
Section 345(2) and section 347(1) of the Jamaican Act impose substantially
similar accounting duties on receivers and managers.
Duty to take action in relation to statement of affairs
Under the Companies Acts in Antigua, the Bahamas, Barbados, Dominica,

Tobago, within fourteen days (or such longer period as may be allowed by the
receiver) after receipt of the notice of appointment of a receiver of the whole,
or substantially the whole, of the assets of a company by the company, the
company must submit to the receiver a statement as to the state of its
affairs.126 This statement must show such matters as the particulars of the
company’s assets, debts and liabilities,127 the names and addresses and
occupations of the company’s creditors,128 the security interests held by the
company’s creditors respectively,129 and the dates when the security interests
were respectively created.130
Within two months of the receipt of the statement of affairs of the
company, the receiver is bound to send a copy of that statement, any
comments he sees fit to make on the statement and a summary of the
statement and of his comments to the Registrar of Companies.131 Within this
two-month period, the receiver must also send to the company a copy of any
comments he may make on the statement of affairs or, where he does not so
comment, a notice to that effect.132 In addition, the receiver must send a copy
of the statement and any comments thereon to the trustee of the trust deed133
and to the holders of all debentures belonging to the same class as the
debentures in respect of which he was appointed, a copy of the summary
which is sent to the Registrar.134
Where a receiver dies or ceases to act before he has been discharged of his
duties in respect of the statement of affairs, these duties must be performed by
his successor or by any continuing receiver.135 In any event, where the
company is being wound up, the receiver’s obligations in respect of the
statement of affairs continue, notwithstanding that the receiver and the
liquidator may be the same person.136 These continuing obligations are subject
to any necessary modifications which arise from the fact that the receiver is
also liquidator.137
Duty in respect of preferential debts
The duty of a receiver respecting the distribution of the company’s assets is to

make payments in the order stipulated in the debenture.138 However, a
receiver appointed to realise a floating charge is, in addition, subject to a
statutory duty in respect of preferential debts.
The Companies Acts in the Commonwealth Caribbean typically provide as
follows:139
Where a receiver is appointed on behalf of the holders of any debentures of a company that are secured by
a floating charge, or where possession is taken by or on behalf of any debenture-holders of a company, of
any property of the company that is subject to a floating charge, then if the company is not at the time in
the course of being liquidated, the debts that in every liquidation are under [the Part of the Act] and the
regulations relating to preferential payments to be paid in order of priority to all other debts must be paid
in order of priority forthwith out of any assets coming into the hands of the receiver or person taking
possession of that property as the circumstances require, in priority to any claim for principal or interest in
respect of the debentures of the company secured by the floating charge.
The essence of this section is to impose a positive obligation on the receiver to

pay certain preferential debts out of assets subject to a floating charge in
priority to the principal and interest secured by the charge.140 Failure by the
receiver to discharge this obligation may render him personally liable to the
preferred creditors for breach of statutory duty in damages in the sum he
should have paid to them.141
The courts insist upon strict observance of this duty. Thus in the English
decision of Westminster Corp v Haste,142 a receiver who collected assets of the
company but declined to pay a preferential creditor was held to be in breach
of his statutory duty. Again, in IRC v Goldblatt,143 it was held by the English
Court of Chancery that even where the receiver was removed by the
debenture-holder as receiver he nevertheless remained liable for breach of this
statutory duty.
Recoupment of payments to preferential creditors
The Companies Acts in the Commonwealth Caribbean make provision for the
recoupment of payments made to preferential creditors out of assets of the
company available for the payment of general creditors as follows:144
Payments made pursuant to this section may be recouped as far as can be out of the assets of the company
that are available for the payment of general creditors.
On the clear words of this subsection, this provision has no application where
the assets of the company subject to the floating charge are sufficient to satisfy
both the preferential claims and the amounts owed to the debenture-holders.
Here the amounts owed to the debenture-holders are to be paid after the
preferential debts are satisfied.145
Duty to cease acting
As has already been pointed out, a receiver’s primary duty is to realise the
security interest of those who appointed him. When once, therefore, a receiver
has collected sufficient money to satisfy all the debts owed by the company
which he is bound to discharge, including all contingent liabilities secured by
the debenture,146 he is under a duty to cease acting with due expedition.147
When a person who had been appointed a receiver of a company ceases to
act as receiver, he must within ten days of so ceasing notify the registrar.148
The receiver is under a duty to give this notice to the Registrar in the
prescribed form and the Registrar is in turn obliged to enter this notice in the
register of company charges.149
Upon completion of his duties, a receiver is under a duty to render a final
account of his administration in the prescribed form.150 He is also under a duty
to file with the Registrar a copy of his final account within fifteen days of the
rendering of the final account.151
Liability of Receiver and Receiver-Managers
Contractual liability
The Companies Acts in Antigua, the Bahamas, Barbados, Dominica, Grenada,

Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago contain a
subsection which has its origins in section 369(2) of the UK Companies Act
1948, which reads as follows:152
A receiver of assets of a company appointed under [the Acts] or under the powers contained in any
instrument—
(a) is personally liable on any contract entered into by him in the performance of his functions,
except to the extent that the contract otherwise provides, and
(b) is entitled in respect of that liability to an indemnity out of the assets of which he is appointed.
Section 349(1) in the Jamaican Companies Act is essentially the same.

On their plain words, these subsections do two things. First, they impose
personal liability on the receiver or receiver-manager in respect of ‘any
contract entered into by him in the performance of his functions’.153 Second,
they allow the receiver or receiver-manager to claim an indemnity in respect
of such liability out of the assets over which he is appointed.154
The English Court of Appeal case of Nicoll v Cutts155 illustrates the
operation of this subsection. In that case, the plaintiff was the managing
director of a private company employed under a five-year service contract
with the company. The company issued a debenture secured by a floating
charge to its bank which subsequently appointed under the debenture a
receiver and manager over the company’s business and assets as agent of the
company. The plaintiff’s service contract was allowed by the receiver to
continue for six months after the receiver’s appointment before it was
terminated. The question which arose was whether the plaintiffs continued
employment after the appointment amounted to a fresh contract entered into
by the receiver under which the receiver was personally liable by reason of
section 369(2) of the Companies Act 1948 (UK).
It was held that there was no new contract with the receiver and
consequently the receiver was not personally liable. The court emphasised that
section 369(2) applied only to contracts ‘entered into’ by the receiver in the
performance of his functions.156 Thus, the receiver is not personally liable on
any contract made prior to his appointment which in the performance of his
functions he allows to continue after his appointment.157
Nicoll v Cutts concerned a contract of service existing between the company
and the employee at the time of the appointment of the receiver. It is arguably
the law that the same principles apply to contracts other than service contracts
existing between the company and another contractor at the time of the
appointment of the receiver.158
It is to be noted that although this subsection specifically refers to ‘a
receiver of assets of a company’, it is thought that it applies equally to a
receiver-manager. The absence of an express reference to ‘receiver-manager’
in the subsection is a result of the fact that its UK progenitor made no express
reference to a ‘receiver and manager’. It does not result from Parliament’s
intention to restrict the operation of the subsection to receivers alone.
Liability in respect of invalid appointment
Under the general law, a person who assumes the position of receiver or
receiver-manager may be held liable to account for his receipts.159 A person
may also be held liable as a trespasser if he enters into possession without
lawful authority.160 A provision in the Companies Acts in Antigua, the
Vincent and Trinidad and Tobago161 has now substantially modified this law.
That subsection empowers the court to do two things on an application being
made to it where the purported appointment of the receiver out of court is
invalid either because the charge under which he was appointed was invalid
or because, in the circumstances of the case, the charge was not exercisable.
The first thing the court may do is to relieve the receiver from personal
liability wholly or to the extent it thinks fit in respect of anything done, which
if the appointment had been valid would have been properly done or omitted
to be done.162 The second is to order that the person by whom the purported
appointment was made, be himself personally liable to the extent that the
appointee has been relieved of his liability.163
Conclusion
The Companies Acts in Antigua, the Bahamas, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago have
included extensive provisions on the appointment and removal of receivers
and receiver-managers, the legal effects of their appointment, their powers,
duties and liabilities. This is a new feature in Commonwealth Caribbean
company legislation as traditionally these matters were determined by
reference to the debenture document under which receivers and managers
were appointed and the common law rules on receivers and managers. The
traditional approach still obtains in Belize, Jamaica and St Christopher/Nevis.
The Companies Acts provisions on receivership have formed the basis on
the law of receivership in the BIAs in Barbados, St Vincent and Trinidad and
Tobago. The BIAs have only marginally altered this law.
Notes
1 Ant s 287(3); Bah s 139(1)(b); B’dos s 274(3); Dom s 287(3); Gren s 287(3); Guy s 271(3); Mont s 287(3); St L s
287(3); St V s 287(3); T’dad s 288(3).
2 B’dos Act No 34 of 2001; St V Act No 43 of 2007; T’dad Act No 26 of 2007.
3 J’ca ss 341–350.
4 See, e.g., Walton (ed) Kerr on Receivers (London: 1989); Lightman and Moss, The Law of Receivers of
Companies (London: 1994); Burgess, The Law of Corporate Receivers and Receiver-Managers (Kingston,
Jamaica: 2002).
5 There are many dicta in earlier cases to the effect that the long title is not part of the Act and is to be
disregarded in interpretation: see, e.g., Powlter’s Case (1610) 11 Co Rep 29a; A-G v Weymouth (1743) Ambl
20; Clayton v Green (1868) LR 3 CP 511. More recent authority regard the long title as being part of the Act
and as to be used in to help solve an ambiguity in an Act: Watkinson v Hollington [1944] KB 16; Manuel v
A-G [1983] Ch 77, 107 per Slade LJ. In Black-Clawson International Ltd v Papierwerke Waldhof-
Aschaffenburg AG [1975] AC 591, 647, Lord Simon of Glaisdale suggested that even greater regard may be
had to the long title where he said: ‘In these days, when the long title can be amended by both Houses, I
can see no reason for having recourse to it only in cases of an ambiguity – it is the plainest of all the
guides to the general objectives of a statute. But it will not always help as to particular provisions.’
6 As to implied amendment, see Bennion, Statutory Interpretation (London: 1992) 192–198.
7 This is so because of B’dos s 29(1)(b) of the Interpretation Act, Cap 1.
8 B’dos BIA s 2; St V BIA s 2: T’dad BIA s 3.
9 (1880) Ch D 645 Eng CA.
10 (1880) Ch D 645, 653 Eng CA.
s 290.
12 Ant s 289; Bah s 142; B’dos s 276; Dom s 289; Gren s 289; Guy s 273; St L s 289; Mont s 289; St V s 289; T’dad
s 290.
13 B’dos BIA s 2; St V BIA s 2: T’dad BIA s 3.
14 Above n 7.
15 [1912] 1 Ch 468 Eng CA.
16 [1912] 468, 472 Eng CA.
s 291.
241(1); Mont s 288(1); St L s 288(1)(a); St V s 288(1)(a); T’dad s 289(1)(a).
19 Ant s 288(1)(b); Bah s 141(1)(b); B’dos s 275(1)(b); Dom s 288(1)(b); Gren s 288(1)(b); Guy s 272(1)(b); J’ca s
341(2); Mont s 288(1)(b); St L s 288(1)(b); St V s 288(1)(b); T’dad s 289(1)(b).
21 B’dos BIA s 10.A; St V BIA s 11; T’dad BIA s 12.
22 B’dos BIA ss 165 and 254; St V BIA ss 180 and 267; T’dad BIA ss 178 and 267.
23 Ant s 287(3)(a) and (b); Bah s 139(1); B’dos s 274(3)(a) and (b); Dom s 287(3)(a) and (b); Gren s 287(3)(a) and
(b); Guy s 271(3)(a) and (b); Mont s 287(3)(a) and (b); St L s 287(3)(a) and (b); St V s 287(3)(a) and (b); T’dad s
288(3)(a) and (b).
24 Ant s 287(3)(a); Bah s 139(1): not provided for; B’dos s 274(3)(a); Dom s 287(3)(a); Gren s 287(3)(a); Guy s
271(3)(a); Mont s 287(3)(a); St L s 287(3)(a); St V s 287(3)(a); T’dad s 288(3)(a).
26 See B’dos BIA s 10.B; St V BIA s 12; T’dad BIA s 13.
27 Ant s 287(3); Bah s 139(1)(b): worded somewhat differently; B’dos s 274(3); Dom s 287(3); Gren s 287(3); Guy
s 271(3); St L s 287(3); St V s 287(3); T’dad s 288(3).
28 Ant s 287(1) and (2); Bah: no corresponding provision; B’dos s 274(1) and (2); Dom s 287(1) and (2); Gren s
287(1) and (2); Guy s 271(1) and (2); St L s 287(1) and (2); St V s 287(1) and (2); T’dad s 288(1) and (2).
30 Windsor Refrigerator Co Ltd v Branch Nominees Ltd [1961] 1 Ch 375 Eng CA; Cripps (Pharmaceuticals) Ltd
v Wickenden [1973] 2 All ER 606, 614–615 per Goff J.
31 Windsor Refrigerator Co Ltd v Branch Nominees Ltd [1961] 1 Ch 375 Eng CA; Re Zurich Insurance Co and
Troy Woodworking Ltd (1984) 45 OR (2d) 343; Mckay and Hughes (1973) Ltd v Martin Potatoes Ltd (1984) 9
DLR (4th) 439.
32 Cripps (Pharmaceuticals) Ltd v Wickenden [1973] 2 All ER 606.
33 Re Lister [1926] Ch 149.
34 See, e.g., Norton v Ellam (1837) 2 M&W 451, 458 per Parke B; Walton v Mascoll (1844) 13 M&W 452, 458 per
Parke B; Re Tewkesbury Co, Tysoc v Tewkesbury Gas Co [1911] 2 Ch 279.
35 Windsor Refrigerator Co Ltd v Branch Nominees Ltd [1961] 1 Ch 375 Eng CA; Cripps (Pharmaceuticals) Ltd
v Wickenden [1973] 2 All ER 606.
36 Bond Brewery Holdings Ltd v National Australian Bank Ltd (1991) 448, 456 Vic CA.
37 See Massey v Sladen (1868) LR 4 Ex 13, 19 per Cleasby B justifying the rule that the debtor must be given
reasonable time to satisfy the demand.
39 See B’dos BIA s 10.B (1); St V BIA s 12 (1); T’dad BIA s 13 (1).
40 [1973] 2 All ER 606, 616.
41 [1986] 3 All ER 751.
42 [1996] 2 All ER 751.
43 [1996] 2 All ER 751, 663.
44 See, e.g., ANZ Banking Group (NZ) Ltd v Gibson [1981] 2 NZLR 513 NZ CA; RE Lister Ltd v Dunlop Canada
Ltd (1982) 135 DLR (3d) 1 SCC; Mr Broadloom Corpn (1968) Ltd v Bank of Montreal (1984) 4 DLR (4th) 74
Ont CA; Kavcar Investments Ltd v Aetna Financial Services Ltd (1989) 62 DLR (4th) 277 Ont CA; Banbury
Foods Pty Ltd v National Bank of Australasia (1984) 51 ALR 609 HCA. For an excellent discussion of this
issue, see Ziegel, ‘The Enforcement of Demand Debentures-Continuing Uncertainties’ (1990) 69 Can B Rev
718.
45 See B’dos BIA s 10B(2); St V BIA s 12(2); T’dad BIA s 13(2).
46 See B’dos BIA s 10B(2); St V BIA s 12(2); T’dad BIA s 13(2).
264(1); St V s 264(1); T’dad s 265(1).
264(1); St V s 264(1); T’dad s 265(1).
49 Harris & Lewin Pty Ltd v Harris & Lewin Agents (1975) ACLC 28, 279.
50 Kasofsky v Kreegers [1937] 4 All ER 374; Lochab Bros v Kenya Furfural [1995] LRC (Comm) 737.
51 See Winifred Enterprise Ltd v Barbados Development Bank (1990) 25 B’dos LR 78 B’dos CA.
s 296. See also B’dos BIA s 10K; St V BIA s 21; T’dad BIA s 22.
s 296.
54 Ant s 295(c); Bah s 148(c); B’dos s 282(c); Dom s 295(c); Gren s 295(c); Guy s 279(c); Mont s 295(c); St L s
295(c); St V s 295(c); T’dad s 296(c).
55 Ant s 288(1)(b) and (2); Bah s 141(1)(b) and (2); B’dos s 275(1)(b) and (2); Dom s 288(1)(b) and (2); Gren s
288(1)(b) and (2); Guy s 272(1)(b) and (2); Mont s 288(1)(b) and (2); St L s 288(1)(b) and (2); St V s 288(1) (b)
and (2); T’dad s 289(1)(b) and (2).
56 Ant s 288(1)(c) and (2); Bah s 141(1)(c) and s 142(2); B’dos s 275(1)(c) and (2); Dom s 288(1)(c) and (2); Gren s
288(1)(c) and (2); Guy s 272(1)(c) and (2); Mont s 288(1)(c) and (2); St L s 288(1)(c) and (2); St V s 288(1)(c)
and (2); T’dad s 289(1)(c) and (2).
288(2); St V s 288(2); T’dad s 289(2).
288(2); St V s 288(2); T’dad s 289(2).
59 Re Slogger Automatic Feeder Co Ltd [1915 1 Ch 478.
60 Re Maskelyne British Typewriters [1898] 1 Ch 113.
287(5); T’dad s 288(5).
287(5); T’dad s 288(5).
264(2); St V s 264(2); T’dad s 265(2).
264(2); St V s 264(2); T’dad s 265(2).
65 [1912] AC 254, 263 Eng HL.
66 Parsons v Sovereign Bank of Canada [1913] AC 160 PC.
67 Ibid.
69 (1990) 25 B’dos LR 78 B’dos CA.
71 [1978] 1 QB 814 Eng CA. Followed in the Jamaican case of Arawak Woodworking Establishment Ltd v
Jamaica Development Bank (1978) 24 JLR 15.
72 [1978] 1 QB 814, 819 Eng CA.
73 Ibid.
74 [1978] 1 QB 814, 819–820. See also Re Emmadart [1979] Ch 540, 544 per Brightman J.
75 [1992] Ch 53 Eng Ch D.
76 [1978] 1 QB 814 Eng CA.
77 Ant s 289; Bah s 137; B’dos s 276; Dom s 289; Gren s 289; Guy s 273; St L s 289; St V s 289; T’dad s 290.
s 151.
81 [1992] Ch 53 Eng CA.
82 Ibid.
s 296.
85 Toronto Dominion Bank v Fortin [1978] 85 DLR (3d) 111 BC SC.
86 Federated Business Development Bank v Shearwater Marine Ltd [1979] 102 DLR (3d) 257 BC CA; Strachan v
MacCosham Administrative Services Ltd (1986) 46 Alta LR (2d) 146 Alta QB; Golden West Restaurants Ltd v
Canadian Imperial Bank of Commerce (1989) 5 WWR 471 Sask QB.
88 Ibid.
89 For the corresponding sections, see Ant s 291; Dom s 291; Gren s 291; Guy s 275; Mont s 291; St L s 291; St V
s 291; T’dad s 292.
287(4); T’dad s 288(4).
287(4)(a); St V s 287(4)(a); T’dad s 288(4)(a).
92 See M. Wheeler & Co v Warren [1928] Ch 840 Eng CA. And see Burgess, op cit n 4, pp 102–103.
287(4)(a); St V s 287(4)(a); T’dad s 288(4)(a).
94 Ant s 287(4)(b)(i); B’dos s 274(4)(b)(i); Dom s 287(4)(b)(i); Gren s 287(4)(b)(i); Guy s 271(4)(b)(i); Mont s 287(4)
(b)(i); St L s 287(4)(b)(i); St V s 287(4)(b)(i); T’dad s 288(4)(b)(i).
95 Ant s 287(4)(b)(ii); B’dos s 274(4)(b)(ii); Dom s 287(4)(b)(ii); Gren s 287(4)(b)(ii); Guy s 271(4)(b)(ii); Mont s
287(4)(b)(ii); St L s 287(4)(b)(ii); St V s 287(4)(b)(ii); T’dad s 288(4)(b)(ii).
96 Ant s 287(4)(b)(iii); B’dos s 274(4)(b)(iii); Dom s 287(4)(b)(iii); Gren s 287(4)(b)(iii); Guy s 271(4)(b)(iii); Mont
s 287(4)(b)(iii); St L s 287(4)(b)(iii); St V s 287(4)(b)(iii); T’dad s 288(4)(b)(iii).
97 Ant s 287(4)(b)(iv); B’dos s 274(4)(b)(iv); Dom s 287(4)(b)(iv); Gren s 287(4)(b)(iv); Guy s 271(4)(b)(iv); Mont s
287(4)(b)(iv); St L s 287(4)(b)(iv); St V s 287(4)(b)(iv); T’dad s 288(4)(b)(iv).
98 Ant s 287(4)(b)(v); B’dos s 274(4)(b)(v); Dom s 287(4)(b)(v); Gren s 287(4)(b)(v); Guy s 271(4)(b)(v); Mont s
287(4)(b)(v); St L s 287(4)(b)(v); St V s 287(4)(b)(v); T’dad s 288(4)(b)(v).
99 Ant s 287(4)(b)(vi); B’dos s 274(4)(b)(vi); Dom s 287(4)(b)(vi); Gren s 287(4)(b)(vi); Guy s 271(4)(b)(vi); Mont s
287(4)(b)(vi); St L s 287(4)(b)(vi); St V s 287(4)(b)(vi); T’dad s 288(4)(b)(vi).
287(5); T’dad s 288(5).
101 Ant ss 293, 294, 296, 300, 301; Bah ss 146, 147, 150; B’dos ss 280, 281, 283, 286, 287; Dom ss 293, 294, 296, 300,
301; Gren ss 293, 294, 296, 300, 301; Guy ss 277, 278, 280; 283, 284; Mont ss 293, 294. 296, 300, 301; St L ss 293,
294, 296, 300, 301; St V ss 293, 294, 296, 300, 301; T’dad ss 294, 295, 297, 301, 302.
102 See B’dos BIA ss 10C and 10D; St V BIA s 13 and 14; T’dad BIA s 14 and 15.
103 Ant s 294(a); Bah s 146(1)(a); B’dos s 281(a); Dom s 294(a); Gren s 294(a); Guy s 278(a); Mont 294(a); St L s
294(a); St V s 294(a); T’dad s 293(a). See also B’dos BIA s 10C(a); St V BIA s 13(a); T’dad BIA s 14(a).
104 Ant ss 293, 294, 296, 300, 301; Bah ss 146, 147, 150; B’dos ss 280, 281, 283, 286, 287; Dom ss 293, 294, 296, 300,
301; Gren ss 293, 294, 296, 300, 301; Guy ss 277, 278, 280; 283, 284; Mont ss 293, 294. 296, 300, 301; St L ss 293,
294, 296, 300, 301; St V ss 293, 294, 296, 300, 301; T’dad ss 294, 295, 297, 301, 302.
105 See, e.g., Re B Johnson & Co (Builders) Ltd [1955] Ch 654 Eng CA; Standard Chartered Bank Ltd v Walker
[1982] 2 All ER 938 Eng CA; Downsview Nominees Ltd v First City Corpn Ltd [1993] 2 AC 295 PC.
106 Tse Kwong Lam v Wong Chit Sen [1983] 3 All ER 54 PC; Downsview Nominees Ltd v First City Corpn Ltd
[1993] 2 AC 295 PC.
107 Ant s 294(b); Bah s 146(1)(b); B’dos s 281(b); Dom s 294(b); Gren s 294(b); Guy s 278(b); Mont s 294(b); St L s
294(b); St V s 294(b); T’dad s 293(b). See also B’dos BIA s 10C(b); St V BIA s 13(b); T’dad BIA s 14(b).
108 (1994) 13 BLR (2d) 1, 192–197 Ont Gen Div.
109 Ant s 294(b); Bah s 146(1)(b); B’dos s 281(b); Dom s 294(b); Gren s 294(b); Guy s 278(b); Mont s 294(b); St L s
294(b); St V s 294(b); T’dad s 293(b).
110 Ant s 294(a); Bah s 146(1)(a); B’dos s 281(a); Dom s 294(a); Gren s 294(a); Guy s 278(a); Mont 294(a); St L s
294(a); St V s 294(a); T’dad s 293(a).
111 Ant s 296; Bah s 147(a); B’dos s 283(a); Dom s 296(a); Gren s 296(a); Guy s 280(a); Mont s 296(a); St L s 296(a);
St V s 296(a); T’dad s 297(a). See also B’dos BIA s 10C(c)(i); St V BIA s 13(c)(i); T’dad BIA s 14(c)(i) where
notice must be given to the Supervisor of Insolvency.
113 Ant s 298; Bah s 140; B’dos s 285; Dom s 298; Gren s 298; Guy s 292; J’ca s 343; Mont s 298; St L s 298; St V s
298; T’dad s 299.
114 Ant s 296(b); Bah s 147(b); B’dos s 283(b); Dom s 296(b); Gren s 296(b); Guy s 280(b); Mont s 296; St L s
296(b); St V s 296(b); T’dad s 297(b). See also B’dos BIA s 10D(d); St V BIA s 14(d); T’dad BIA s 15(d).
115 See, e.g., Newhart Development Ltd v Cooperative Commercial Bank Ltd [1970] QB 814, 819 Eng CA per
Shaw LJ.
116 Bayley v Went (1884) 51 LT 764; Newhart Development Ltd v Cooperative Commercial Bank Ltd [1970] QB
814 Eng CA.
117 Ant s 296(c); Bah s 147(c); B’dos s 283(c); Dom s 296(c); Gren s 296(c); Guy s 280(c); Mont s 296(c); St L s
296(c); St V s 296(c); T’dad s 297(c). See also B’dos BIA s 10D(f); St V BIA s 14(f); T’dad BIA s 15(f).
118 Ant s 296(d); Bah s 147(d); B’dos s 283(d); Dom s 296(d); Gren s 296(d); Guy s 280(d); Mont s 296(d); St L s
296(d); St V s 296(d); T’dad s 297(d). See also B’dos BIA s 10D(g); St V BIA s 14(g); T’dad BIA s 15(g).
119 Ant s 296(e); Bah s 147(e); B’dos s 283(e); Dom s 296(e); Gren s 296(e); Guy s 280(e); Mont s 296(e); St L s
296(e); St V s 296(e); T’dad s 297(e).
120 Ant s 296(f); Bah s 147(f); B’dos s 283(f); Dom s 296(f); Gren s 296(f); Guy s 280(f); Mont s 296(f); St L s
296(f); St V s 296(f); T’dad s 297(f). See also B’dos BIA s 10D(h); St V BIA s 14(h); T’dad BIA s 15(h).
121 Ant s 296(g); Bah s 147(g); B’dos s 283(g); Dom s 296(g); Gren s 296(g); Guy s 280(g); Mont s 296(g); St L s
296(g); St V s 296(g); T’dad s 297(g). See also B’dos BIA s 10C(g); St V BIA s 13(g); T’dad BIA s 14(g).
122 Ant s 296(h); Bah s 147(h); B’dos s 283(h); Dom s 296(h); Gren s 296(h); Guy s 280(h); Mont s 296(h); St L s
296(h); St V s 296 (h); T’dad s 297(h).
300(2); St V s 300(2); T’dad s 301(2). See also B’dos BIA s 10C(f); St V BIA s 13(f); T’dad BIA s 14(f).
124 Ant s 300(3)(a); Bah 150(3)(a); B’dos s 286(3)(a); Dom s 300(3)(a); Gren s 300(3)(a); Guy s 283(3)(a); Mont s
300(3)(b); St L s 300(3)(b); St V s 300(3(b); T’dad s 301(3)(b).
127 Ant ss 300(1)(b) and 301(1)(a); Bah ss 150(1)(b) and 151(1)(a); B’dos ss 286(1)(b) and 287(1)(a); Dom ss 300(1)(b)
and 301(1)(a); Gren ss 300(1)(b) and 301(1)(a); Guy ss 283(1)(b) and 284(1)(a); J’ca ss 345(1)(b) and 346(1);
Mont ss 300(1)(b) and 301(1)(a); St L ss 300(1)(b) and 301(1)(a); St V ss 300(1)(b) and 301(1)(a); T’dad ss 301(1)
(b) and 302(1)(a).
346(1); Mont s 301(1)(b); St L s 301(1)(b); St V s 301(1)(b); T’dad s 302(1)(b).
129 Ant s 301(1)(c); Bah s 151(1)(c); B’dos s 287(1)(c); Dom s 301(1)(c); Gren s 301(1)(c); Guy s 284(1)(c); J’ca s
346(1); Mont s 301(1)(c); St L s 301(1)(c); St V s 301(1)(c); T’dad s 302(1)(c).
130 Ant s 301(1)(d); Bah s 151(1)(d); B’dos s 287(1)(d); Dom s 301(1)(d); Gren s 301(1)(d); Guy s 284(1)(d); J’ca s
346(1); Mont s 301(1)(d); St L s 301(1)(d); St V s 301(1)(d); T’dad s 302(1)(d).
131 Ant s 300(1)(c)(i); Bah s 150(1)(c)(i); B’dos s 286(1)(c)(i); Dom s 300(1)(c)(i); Gren s 300(1)(c)(i); Guy s 283(1)(c)
(i); J’ca s 345(1)(c); Mont s 300(1)(c)(i); St L s 300(1)(c)(i); St V s 300(1)(c)(i); T’dad s 301(1)(c)(i).
132 Ant s 300(1)(c)(ii); Bah s 150(1)(c)(ii); B’dos s 286(1)(c)(ii); Dom s 300(1)(c)(ii); Gren s 300(1)(c)(ii); Guy s
283(1)(c)(ii); J’ca s 345(1)(c)(ii); Mont s 300(1)(c)(ii); St L s 300(1)(c)(ii); St V s 300(1)(c)(ii); T’dad s 301(1)(c)
(ii).
133 Ant s 300(1)(c)(iii); Bah s 150(1)(c)(iii); B’dos s 286(1)(c)(iii); Dom s 300(1)(c)(iii); Gren s 300(1)(c)(iii); Guy s
283(1)(c)(iii); J’ca s 345(1)(c)(iii); Mont s 300(1)(c)(iii); St L s 300(1)(c)(iii); St V s 300(1)(c)(iii); T’dad s 301(1)
(c)(iii).
134 Ant s 300(1)(c)(iv); Bah s 150(1)(c)(iv); B’dos s 286(1)(c)(iv); Dom s 300(1)(c)(iv); Gren s 300(1)(c)(iv); Guy s
283(1)(c)(iv); J’ca s 345(1)(c)(iii); Mont s 300(1)(c)(iv); St L s 300(1)(c)(iv); St V s 300(1)(c)(iv); T’dad s 301(1)(c)
(iv).
300(4); St L s 300(4); St V s 300(4); T’dad s 301(4).
300(5); St L s 300(5); St V s 300(5); T’dad s 301(5).
300(5); St L s 300(5); St V s 300(5); T’dad s 301(5)
138 Yourell v Hibernia Bank Ltd [1918] AC 372 Eng HL.
139 Ant s 299(1); B’dos 285.1(1); Dom 299(1); Gren s 299(1); St L s 299(1); St V s 299(1); T’dad s 300(1).
140 IRC v Goldblatt [1972] Ch 498.
141 Ibid.
142 [1950] Ch 442.

143 [1972] Ch 498.
144 Ant s 299(3); B’dos 285.1(3); Dom 299(3); Gren s 299(3); Mont s 299(3); St L s 299(3); St V s 299(3); T’dad s
300(3).
145 Westminster Corp Haste v [1950] Ch 442; IRC v Goldblatt [1972] Ch 498.
146 Re Rudd & Sons Ltd (1986) 2 BCC98, 955.
147 Rottenburg v Monjack (1992) BCC 688.
264(2); T’dad s 265(2).
264(2); T’dad s 265(2).
150 Ant s 296(g); Bah s 147(g); B’dos s 283(g); Dom s 296(g); Gren s 296(g); Guy s 280(g); Mont s 296(g); St L s
296(g); St V s 296(g); T’dad s 297(g).
151 Ant s 296(h); Bah s 147(h); B’dos s 283(h); Dom s 296(h); Gren s 296(h); Guy s 280(h); Mont s 296(h); St L s
296(h); St V s 296(h); T’dad s 297(h).
297(1); St V s 297(1); T’dad s 298(1). See also B’dos BIA s 10H; St V BIA s 18; T’dad BIA s 18.
349(1); Mont s 297(1)(a); St L s 297(1)(a); St V s 297(1)(a); T’dad s 298(1)(a). See also B’dos BIA s 10H(a); St V
BIA s 18(a); T’dad BIA s 18(a).
349(1); Mont s 297(1)(b); St L s 297(1)(b); St V s 297(1)(b); T’dad s 298(1)(b). See also B’dos BIA s 10H(b); St
V BIA s 18(b); T’dad BIA s 18(b).
155 [1985] BCLC 322 Eng CA.
156 [1985] BCLC 322, 324 Eng CA per Dillon LJ.
157 Ibid.
158 See Re Rylands Glass Co (1905) 49 Sol J 67; Bissell v Ariel Motors (1906) Ltd (1910) 27 TLR 73.
159 See, e.g., Rolled Steel Products (Holding) Ltd v British Steel Corp [1986] Ch 246 Eng CA.
160 Re Goldburg (No 2) [1912] 1 KB 606.

297(2); St V s 297(2); T’dad s 298(2).
Chapter 24
Insider Trading
Introduction
Provisions designed to deal with the abuse of insider trading have been
introduced into Commonwealth Caribbean company law by the Companies
Acts in Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St Lucia,
St Vincent and Trinidad and Tobago.1 Insider trading is generally regarded as
having occurred where purchases or sales of securities of a company are
effected by or on behalf of a person whose relationship to the company is such
that he is likely to have access to price-sensitive information concerning the
company not known to the counterparty to the securities transaction.2 Use of
such inside information allows the insider to obtain more favourable terms in
the contract of sale than would have been the case if the counterparty had
equal access to the information in question. Thus, insider trading has the
potential of distorting market prices in a way which is unfavourable to
outsiders.
Insider trading may be viewed as properly a branch of securities law.
Indeed, securities legislation in the region contains important provisions
relating to insider trading and self dealing where a public or ‘reporting issuer’
company is concerned.3 Be that as it may, company law has always taken an
interest in the effective control of some instances of insider trading. Thus, for
instance, the common law has utilised rules which prevent directors in some
circumstances from personally profiting from the use of inside information to
confront some of the problems associated with insider trading.4 It is the
perceived inadequacy of these common law rules which the provisions in the
Companies Acts are intended to remedy.5
This chapter reviews the available common law rules which may be
employed in dealing with the problem of insider trading. This review is
intended to provide a background against which the insider trading provisions
in the Companies Acts in the Commonwealth Caribbean on insider trading,
and which is the main subject matter of the chapter, may be better understood.
The chapter also examines the special prohibitions in the Guyanese Company
Act against an insider selling short or buying puts or selling calls in respect of
his company or any of that company’s affiliates.
Insider Trading at Common Law
An overview
Specific rules to deal with the abuse of insider trading have never been
developed by the common law. There are, however, three general common
law doctrines which could be, and on occasions have been, invoked in seeking
remedies for insider trading. These are directors’ fiduciary duties, breach of
confidence and misrepresentation. But how adequate are these doctrines?
Directors’ fiduciary duties
As was seen in Chapter 11, directors of companies are fiduciaries. As

fiduciaries, directors who make use of confidential information acquired qua
director for their personal benefit (to all intents and purposes insider dealing),
do so in breach of their fiduciary duties to the company and thereby render
themselves liable to account to the company for any profits they have made.6
Directors’ liability as insiders for breach of their fiduciary duty not to misuse
confidential information does not depend upon their company suffering loss; it
depends entirely on the fact that the directors as fiduciaries have made a
profit.7
There are three major limitations to the action for breach of directors’
fiduciary duties as a remedy for insider trading. The first is that directors’
fiduciary duties are normally owed to the company and it is the directors who
initiate actions on behalf of the company.8 It is unlikely, therefore, that except
in cases where there is a change of control of the company, as happened in
Regal (Hastings) Ltd v Gulliver,9 action will be taken against directors for
misuse of confidential corporate information. The second is that because
directors’ fiduciary duties are not owed to shareholders,10 it is only on the rare
occasion where directors place themselves in the position of acting as agents
on behalf of individual shareholders or where the shareholders specifically
appoint the directors as their agents that shareholders can bring an action in
respect of directors’ insider dealings on the basis of breach of directors’
fiduciary duties.11 The third is that because the action for breach of directors’
fiduciary duties is only available against directors, it cannot deal with the full
range of potential insiders.
Breach of confidence
In the general law, an equitable duty of confidence arises where a person

receives information he knows or ought to know is confidential.12 Since an
initial confidential relationship is not required for this duty to arise, the range
of persons potentially subject to this duty is far greater than that in the case of
directors’ fiduciary duties. In the corporate context, it is thought to extend, not
only to fiduciaries like directors and officers, but also to professional advisers
of companies who, for instance, are involved in a takeover bid which the
company is contemplating, and to employees of such advisers.13
The essence of the duty of confidence is to prevent misuse of confidential
information. Consequently, once the duty arises the person on whom the duty
is imposed may not use or disclose confidential information without the
consent of the confider. A person who is in breach of the duty is liable to
account for any profits made by him as a result of the use of the confidential
information. However, this liability to account is to the confider alone. The
implication of this for insider trading is that the breach of confidence remedy
is not available to the person with whom the insider dealt in securities
transaction or other participants in the market at the time.
Misrepresentation
It is elementary learning that a claim for civil remedies may be available

against an inside dealer under the general law of misrepresentation. However,
to succeed in such a claim, a claimant would have to establish either that a
false statement of fact has been made to him, or that there was a duty on the
part of the insider making the representation to disclose information to the
claimant.
These requirements constitute significant impediments to the use of
misrepresentation as a remedial tool in the context of insider trading. In the
first place, the insider’s liability depends entirely upon his making a false
statement to the claimant in respect of the inside information which he, the
insider, holds. Where, therefore, the insider makes no statement but
nonetheless uses inside information, the misrepresentation remedy is useless.
In addition to the foregoing, the common law imposes a duty of disclosure
only in three sets of circumstances.14 These are, first, where non-disclosure
would result in a distortion of positive representations made, second, where
the contract requires uberrima fides, and, third, where there is fiduciary
relationship between the contracting parties. The first circumstance obviously
depends on the particular facts in question. In relation to the second and third
circumstances, there is little or no indication that the courts will expand the
categories of fiduciaries to include the relationship between an insider and his
counterparty. Similarly, there is no evidence that the courts are prepared to
treat securities contracts as contracts uberrimae fidei.
Statutory Civil Action for Insider Trading
Overview
As has been seen, no specific cause of action exists at common law for which
civil remedies may be awarded in respect of insider trading. This is now
remedied by the insider trading legislation in Antigua, Barbados, Dominica,
Grenada, Guyana, St Lucia, St Vincent and Trinidad and Tobago, which
provide for a statutory cause of action for insider trading which involves the
use of confidential information.15 Under these Acts, a cause of action lies
against an insider who, in connection with a transaction in a share of the
company or any of its affiliates, makes use of any specific confidential
information for his own benefit or advantage that is generally known might
reasonably be expected to affect materially the value of the share.16
Who may bring an action
It seems clear from the express language of the provisions of the insider
trading legislation that a statutory action for insider trading is available to any
person who has incurred direct loss as a result of an insider transaction to
which he was a party. Accordingly, this means that privity is a prerequisite to
recovery in a statutory action for insider trading under the insider trading
legislation in the Commonwealth Caribbean.
What must be proved
Overview
A plaintiff who claims a statutory action for insider trading must satisfy a
number of requirements. First, he must show that the defendant is an insider.
Secondly, he must prove that there was a share transaction. Thirdly, he must
establish that the insider made use of specific confidential information.
Fourthly, he has to show that the use of the confidential information was for
the benefit or advantage of the insider. Finally, he must prove that it is
generally known that the use of the confidential information might be
reasonably expected materially to affect the value of the share.17 Each of these
requirements will be explored hereafter.
Who is an ‘insider’?
As has just been seen, one glaring shortcoming of the common law is the
severely limited scope of those who can be reached as insiders. The insider
trading legislation has sought to remedy this defect in the common law by
providing a more realistic approach to those who may be treated as insiders.18
Accordingly, the term ‘insider’ is defined in these Acts by including within its
meaning a list of persons who have superior access to material information
relating to a company. Consistent with this statutory stance, a director or
officer of the company,19 a company that purchases or otherwise acquires
shares issued by it or any of its affiliates20 and a person who beneficially owns
more than 10 per cent of the shares of the company or who exercise control or
direction over more than 10 per cent of the votes attached to shares of the
company21 are all statutorily listed as ‘insiders’.
An associate or affiliate of a director or officer of the company, or of a
company that acquires shares issued by it or its affiliates, or of a person who
owns, or exercises control over, more than 10 per cent of the shares of the
company is also an ‘insider’.22 A person is an ‘associate’ of another person if
that person is a partner of that other person, a trust or estate in which that
other person has a substantial beneficial interest (or for which that other
person serves as trustee), or is a company or body corporate of which the
person owns or controls, directly or indirectly, shares or debentures
convertible into shares, that carry more than 20 per cent of the voting rights.23
An ‘affiliate’ is defined to mean the subsidiary of another body corporate, or
two subsidiaries of the same body corporate, or two bodies corporate each of
which is controlled by the same person, or two bodies corporate affiliated with
the same body corporate at the same time.24
The definition of ‘insider’ does not list employees or officers other than
senior officers as insiders. However, a person, whether or not he is employed
by the company, who receives specific confidential information from any of
the other persons statutorily defined as an ‘insider’25 and who has knowledge
that the person giving the information is a person statutorily defined as an
‘insider’ is also an ‘insider’.26
A director or officer of a body corporate that is an insider of a company is
an insider.27 Similarly, a director or officer of a body corporate that is a
subsidiary is an insider of its holding company.28
The insider trading legislation goes further and creates a category of
persons who are presumed to be insiders. In this regard, these Acts provide
that if a body corporate becomes an insider of a company, or enters into a
business combination with a company, a director or officer of the body
corporate is presumed to have been an insider of the company for the
previous six months or for such shorter period as he was a director or an
officer of the body corporate.29 Likewise, if a company becomes an insider of a
body corporate, or enters into a business combination with a body corporate, a
director or officer of the body corporate is presumed to have been an insider
of the company for the previous six months or for such shorter period as he
was a director or officer of the body corporate.30 A ‘business combination’
means an acquisition of all or substantially all the property of one body
corporate by another or an amalgamation of two or more bodies corporate.31
A transaction in a share
None of the insider trading legislation contains any definition of the

expression ‘transaction in a share’. However, it would seem logical to interpret
this expression expansively so as to give effect to the legislative objective in
enacting the provision on the liability of insiders. This approach appears to
have been adopted by the Alberta Court of Appeal case of NIR Oil Ltd v
Bodrug.32 In this case, it was argued that the expression ‘transaction in a
security’ (the equivalent of a ‘transaction in shares’) should be read as meaning
‘sale and purchase’ of a security, and that a transaction which deals with the
sale and purchase of a security but which involves other matters such as an
overall settlement agreement is not a transaction in a security. The Alberta
Court of Appeal rejected this argument, holding that the effect of such an
interpretation would be to defeat the legislative intention.
Making use of specific confidential information
In Tongue v Vencap Equities Alta Ltd,33 the Alberta Court of Appeal

considered the meaning of the phrase ‘makes use of’. The Court held that the
phrase connotes some positive act on behalf of the insider to take advantage
of the information possessed by him to profit in the market place. If profit is
truly a minimal and incidental aspect of the transaction, there may be no
‘making use of’ for purposes of the cause of action for inside trader use of
confidential information.34 In the meantime, it is to be noted that the onus of
establishing that profit is not a dominant motive is on the inside trader.
The further question of what amounts to specific confidential information
has been considered in a number of Canadian cases. In Green v Charterhouse
Canada Ltd,35 it was held that information as to quarterly earnings and as to
the state of the negotiations with respect to a potential takeover bid is specific
confidential information. In Roberts v Pelling,36 it was held that specific
confidential information can include corporate information (such as, for
example, information about oil discovered on corporate property) acquired by
a majority shareholder qua shareholder. In Dusik v Newton,37 it was held that
specific confidential information can consist of an approach to a director by a
prospective purchaser with a proposal to purchase all of the assets or shares of
the company.
‘For the benefit or advantage of the inside trader’
It appears from Dusik v Newton38 that the benefit or advantage to the inside
trader from the use of specific confidential information consists of all the
consideration received by him for the disposition of the corporate asset as part
of the sale of that asset. Thus in that case the benefit or advantage was held to
be all the consideration for the disposition of the company’s assets as part of
the sale as well as the payment of a portion of the purchase price to the
majority shareholder as a tax-free inter-corporate dividend out of the target
company’s retained earnings.
‘Generally known might reasonably be expected to affect

materially the value of the share’
In Roberts v Pelling,39 it was held that the expression ‘generally known’ means
known to the generality of shareholders, be they many or few. It was also held
that the best evidence of the ‘value of the share’ in a closely held company is
what a willing informed purchaser, dealing at arm’s length, would be prepared
to pay for the share.
Measure of damages
The provisions on the insider trading action use two expressions which delimit
the measurement of damages in a statutory action for insider trading. These
are ‘direct loss incurred’ and ‘direct benefit or advantage received or
receivable’. Neither of these terms has any accepted legal meaning, and
especially in the case of ‘direct loss incurred’, present much difficulty in
quantifying.
The Canadian case of Green v The Charterhouse Group Canada Ltd40 is
important in suggesting an approach to this difficulty. This case adopted the
approach affirmed in the US case of Reynolds v Texas Gulf Sulphur Co:41
The measure of damages in stock transactions is the highest intermediate value reached by the stock
between the time of the wrongful act complained of and a reasonable time after the injured party received,
or should have received notice of it, a time within which he has a reasonable opportunity to replace the
stock… we must draw the line somewhere and this is an attempt to give a twenty day trading period
within which the highest daily prices is the measure of damages, and a period within which the
shareholder received or should have received notice of [the relevant information].
This principle is important because it highlights the point that the essential
difficulty in quantifying the ‘direct loss incurred’ is identifying a timeframe in
which security prices may vary as new information comes to the market and
the plaintiff may take steps to mitigate it.
Onus of proof
It has been stated in a number of decided cases that the onus is on a person
who claims against an inside trader pursuant to the statutory cause of action
for making use of confidential information to establish that the inside trader
had specific confidential information and that it was a factor in the action
taken by the inside trader.42 When once this is established, the onus of proof
shifts to the inside trader who thereafter must show that he did not in fact
make use of the information in the transaction, or, in other words, that the
information was not a factor in what he did.43
Liability to compensate claimant
A claimant who can establish the requirements of the statutory cause of action
can claim to be compensated by the insider against whom the cause of action
is brought.44 In such an event, the insider is liable to compensate the claimant
for any direct loss incurred by him as a result of the transaction.45 However,
this liability may be avoided if it is shown that the information was known or,
in the exercise of reasonable diligence, should have been known to the
claimant at the time of the transaction.46
Liability to account to the company
An insider who incurs liability for use of specific confidential information is

also accountable to the company for any direct benefit or advantage received
or receivable by him as a result of the transaction.47
Time limit on action
A person bringing an action for compensation or a company for an account

has to commence such action within two years after the discovery of the facts
that gave rise to the cause of action.48
Prohibitions Against an Insider Selling Short, Selling
Calls or Buying Puts
The Companies Act in Guyana contains prohibitions against an insider selling
short the shares of a company in which he is an insider or from buying puts or
selling calls in respect of his company or any of that company’s affiliates.
These two prohibitions are explored below.
Prohibition against selling short
Overview
Selling short involves the sale of shares by an investor which the investor does
not actually own. The short sale imposes on the investor a contractual
obligation to supply the shares in return for payment by the person purchasing
the shares. The investor must at some point in time purchase the shares that
the investor has already sold in order to fulfil his contractual obligation.
Clearly, selling short is open to abuse by an insider.
Section 307(1) of the Guyanese Companies Act enacts a prohibition against
an insider selling short. This provision enacts that an insider shall not
knowingly sell, directly or indirectly, a share in a distributing company or any
company in the same group of companies as that distributing company if the
insider selling the share does not own, or has not fully paid for, the share to be
sold.
Meaning of insider
For purposes of this prohibition, the Act defines an insider to mean (a) an
officer of a distributing company;49 (b) a distributing company that purchases
or otherwise acquires shares, other than by way of redemption under the Act,
shares issued by it or a company in the same group of companies as it;50 or (c)
a person who beneficially owns51 more than 10 per cent of the shares in a
distributing company.52 An insider also means a person who exercises control53
or direction over more than 10 per cent of the votes attached to the shares in a
distributing company, excluding shares owned by an underwriter under an
underwriting agreement while those shares are being offered for sale to the
public.54
Deemed insider
The Act expands the concept of insider for purposes of the prohibition against
short selling by deeming certain persons insiders of a distributing company.55
These include an officer of a body corporate that is an insider distribution56
and an officer of a body corporate that is a subsidiary of a distributing
company.57 Finally, if a body corporate becomes an insider of a distributing
company, or enters into a business combination with a distributing company,58
or if a distributing company becomes an insider of a body corporate or enters
into a business combination with a body corporate,59 an officer of the body
corporate is deemed to have been an insider of the distributing company for
the previous six months of for such shorter period as he was an officer of the
body corporate.60
Exception to the prohibition
The prohibition against an insider selling a share he does not own does not
apply if he owns another share convertible into the share sold or an option or
right to acquire the share sold.61 He must, however, within ten days after the
sale, exercise the conversion privilege, option or right and deliver the share so
acquired to the purchaser.62 Alternatively, he must transfer the convertible
share, option or right to the purchaser.63
Prohibition against selling a call or buying a put
A call is an option, transferable by delivery, to demand delivery of a specified

number or amount of shares at a fixed price within a specified time.64 A call,
however, does not include an option or right to acquire shares of the company
that granted the option or right to acquire.65 A put, on the other hand, is an
option, transferable by delivery, to deliver a specified number or amount of
shares at a fixed price within a specified time.66 Section 307 of the Guyanese
Act imposes a prohibition against an insider, directly or indirectly, buying a
call or put in respect of a share in a distributing company or in any company
in the same group of companies as a distributing company.
Liability for contravention of prohibitions against selling

short, selling a call or buying a put
The Act does not expressly state whether breach of the prohibition against
selling short, selling calls or buying puts results in either civil or criminal
liability or how compliance with these prohibitions is to be enforced. But,
these prohibitions can scarcely be regarded as hortatory. Logically, therefore,
they are to be enforced under the general offence provision found in section
522 of the Companies Act. This section provides as follows:
Every person who, without reasonable cause contravenes… a provision of this Act or the regulations shall
be guilty of an offence and, if no punishment is elsewhere in this Act provided for that offence, shall be
liable on summary conviction to a fine of ten thousand dollars.
It is submitted that an insider who contravenes the provisions prohibiting

selling short, selling calls or buying puts incurs criminally under this section.
Conclusion
The insider trading legislation in the Commonwealth Caribbean makes
provision for a civil action for insider trading. This provision is useful in that it
goes some distance in correcting the deficiencies in the common law where
recovery by civil action in respect of insider dealing is very difficult, if not
impossible.
The provision in the Act in Guyana which goes a little further and adds
criminal penalties for certain specified insider transactions, namely, selling
short, selling calls or buying puts, is also significant. Admittedly, such
transactions are not necessarily based on insider information. However, the
prohibition in the Act in Guyana does not appear to occasion a hardship for
insiders which outweigh the public interest in banning such transactions.
Notes
1 Ant ss 322–325; B’dos ss 308–311; Dom ss 322–325; Gren ss 322–325; Guy ss 308–309; Mont ss 322–325; St L
ss 322–325; St V ss 322–325; T’dad ss 303–306.
2 See Caricom Report (1971) para 11.02.
3 See Ang: Securities Act IRSA c. s 13; Ant: Securities Act 2001; Bah: Security Industries Act Ch 363; B’dos:
Securities Act Cap 318A; Dom: Securities Act 2001; Gren: Securities Act 2001; Guy: Securities Act 1998;
J’ca: Securities Act 1993; Mont: Securities Act 2001; St C/N: Securities Act 2001; St. L: Securities Act 2001;
St V: Securities Act 2001; T’dad: Securities Industry Act Chap 83: 03.
4 See, e.g., Percival v Wright [1902] Ch 421 Ch D.
6 Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134n Eng HL.
7 Ibid.
8 Percival v Wright [1902] Ch 421 Eng Ch D.
9 [1967] 2 AC 134n Eng HL.
10 Percival v Wright [1902] Ch 421 Eng Ch D.
11 Allen v Hyatt (1914) 30 TLR 444 PC; Briess v Woolley [1954] AC 333 Eng HL.
12 Boardman v Phipps [1967] 2 AC 46 Eng HL.
13 Schering Chemicals Ltd v Falkman Ltd [1982] QB 1 Eng CA.
14 See generally Furmston Cheshire, Fifoot and Furmston, Law of Contract (15th edn Oxford: 2006) 372–381.
17 Green v Charterhouse Group Canada Ltd (1976) 68 DLR (3d) 592 Ont CA; Dusik v Newton (1985) 62 BCLR 1
BC CA.

322(a); T’dad s 303(a).
322(b); T’dad s 303(b).
322(c); T’dad s 303(c).
322(d); T’dad s 303(d).
23 Ant s 543(1)(a); B’dos s 4488(c); Dom s 543(1)(a); Gren s 543(1)(a); Guy s 535(c); Mont s 543(1)(a); St L s 543(1)
(a); St V s 543(1)(a); T’dad s 4.
24 Ant s 543(1); B’dos s 4488(b); Dom s 543(1); Gren s 543(1); Guy s 535(b); Mont s 543(1); St L s 543(1); St V s
543(1); T’dad s 4.
25 Ant s 322(e)(i); B’dos s 308(e)(i); Dom s 322(e)(i); Gren s 322(e)(i); Guy s 308(e)(i); Mont s 322(e)(i); St L s
322(e)(i); St V s 322(e)(i); T’dad s 303(e)(i).
26 Ant s 322(e)(ii); B’dos s 308(e)(ii); Dom s 322(e)(ii); Gren s 322(e)(ii); Guy s 308(e)(ii); Mont s 322(e)(ii); St L s
322(e)(ii); St V s 322(e)(ii); T’dad s 303(e)(ii).
27 Ant s 323(1)(a); B’dos s 309(1)(a); Dom s 323(1)(a); Gren 323(1)(a); Guy s 308(2)(a); Mont s 323(1)(a); St L s
323(1)(a); St V s 323(1)(a); T’dad s 304(1)(a).
28 Ant s 323(1)(b); B’dos s 309(1)(b); Dom s 323(1)(b); Gren s 323(1) b); Guy s 308(2)(b); Mont s 323(1)(b); St L s
323(1)(b); St V s 323(1)(b); T’dad s 304(1)(b).
323(2)(a); St V s 323(2)(a); T’dad s 304(2)(a).
323(2)(b); St V s 323(2)(b); T’dad s 304(2)(b).
31 Ant s 323(3); B’dos s 309(3); Dom s 323(3); Gren s 323(3); Guy s 305(1)(a); Mont s 323(3); St L s 323(3); St V s
323(3); T’dad s 304(3).
32 (1985) 18 DLR (4th) 608 Alta CA; leave to appeal to the SCC refused (1985) 39 Alta LR (2d) xlvi (note) SCC.
33 (1996) 39 Alta LR (3d) 29 Alta CA.

34 See, Agrium Inc v Hamilton (2005) AQQB 54 Alta QB.
35 (1976) 68 DLR (3d) 592 Ont CA.
36 (1981) 16 BLR 150 BC SC.
37 (1985) 62 BCLR 1 BC CA.
38 Ibid.
39 (1981) 16 BLR 150 BC SC.
40 (1973) 35 DLR (3d) 161 Ont HCJ, affd 68 DLR (3d) 592 Ont CA.
41 309 F Supp 548 (DC Utah, 1970), varied on other grounds, 446 F 2d (10th Circ 1971).
42 See, e.g., Green v Charterhouse Group Canada Ltd (1976) 68 DLR (3d) 592 Ont CA; NIR Oil Ltd v Bodrug
(1985) 18 DLR (4th) 608 Alta CA; leave to appeal to the SCC refused (1985) 39 Alta LR (2d) xlvi (note) SCC.
43 See, e.g., Green v Charterhouse Group Canada Ltd (1976) 68 DLR (3d) 592 Ont CA; NIR Oil Ltd v Bodrug
(1985) 18 DLR (4th) 608 Alta CA; leave to appeal to the SCC refused (1985) 39 Alta LR (2d) xlvi (note) SCC.
44 Ant s 324(a); B’dos s 310(a); Dom s 324(a); Gren s 324(a); Guy s 309(1)(a); Mont s 324(a); St L s 324(a); St V s
324(a); T’dad s 305(a).
324(a); T’dad s 305(a).
324(a); T’dad s 305(a).
47 Ant s 324(b); B’dos s 310(b); Dom s 324(b); Gren s 324(b); Guy s 309(1)(b); Mont s 324(b); St L s 324(b); St V s
324(b); T’dad s 305(b).
48 Ant s 325; B’dos s 311; Dom s 325; Gren s 325; Guy s 309(2); Mont s 325; St L s 325; St V s 325; T’dad s 306.
49 Guy s 306(1)(c)(i). A ‘distributing company’ is defined in Guy s 306(1)(b) for purposes of this prohibition, as
a company, any of the shares in, or debentures of, which are or were offered to the public and remain
outstanding and which has more than one shareholder or debenture-holder.
50 Guy s 306(1)(c)(ii).
51 Guy s 306(2)(d) provides that for purposes of this prohibition, a person is deemed to own beneficially shares
beneficially owned by a body corporate controlled by him directly or indirectly. In the meantime, a body
corporate is deemed to own shares beneficially owned by any company in the same group of companies as
the body corporate.
52 Guy s 306(1)(c)(iii).
53 For purposes of this prohibition, a body corporate is deemed to be controlled by a person if shares in the
body corporate carrying voting rights sufficient to elect a majority of the directors of the body corporate
are held, directly or indirectly, otherwise than by way of security only, by or on behalf of that person.
54 Guy s 306(1)(c)(iii).
55 Guy s 306(2).
56 Guy s 306(2)(a).
57 Guy s 306(2)(b).
58 Guy s 306(3)(a).
59 Guy s 306(3)(b).
60 Guy s 306(3).
61 Guy s 307(3).
62 Guy s 307(3)(a).
63 Guy s 307(3)(b).
64 Guy s 306(1)(a).
65 Guy s 306(1)(a).
66 Guy s 306(1)(d).
Chapter 25
Fundamental Company Changes
Introduction
Montserrat, St Lucia, St Vincent and Trinidad and Tobago contain a Division
entitled ‘Fundamental Company Changes’.1 This Division does not define the
expression ‘fundamental company changes’. Be that as it may, the objective of
the Division is obvious. It is to establish a statutory regime to facilitate
fundamental changes which a modern company may wish to make to its
corporate structure. For instance, a company may wish to change its name to
reflect more accurately its current business, or to change its capital structure to
make it more suitable to current market conditions, or it may be deemed
desirable to combine the company with another corporate entity to take
advantage of business or tax considerations.
There is a recognition in the fundamental company changes Division that,
as desirable as a fundamental company change may be considered to be, it is
necessary to impose both procedural and substantive constraints on the
fundamental changes that may be effected by a company and also to provide
remedies for shareholders who ‘dissent’ from the proposed changes. The
fundamental company changes divisions are therefore a complex of provisions
on fundamental amendments to articles, amalgamations, dissent by
shareholders, reorganisations and arrangements.
The major focus of this chapter is the working of these fundamental
company changes provisions in Commonwealth Caribbean company law.
Accordingly, the chapter explores the fundamental company changes
mechanisms found in the Acts in Anguilla, Antigua, Barbados, Dominica,
Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago. But for
completeness, the chapter also identifies analogues in the Acts in the Bahamas,
Belize, Guyana, Jamaica and St Christopher/Nevis, and discusses them within
the context of the fundamental company changes mechanism. The remedies
for shareholders who ‘dissent’ from the proposed fundamental company
changes are dealt with in Chapter 18.
Fundamental Changes to Articles
An overview
As was seen in Chapter 3, the articles of incorporation of a company must

state the name of the company, matters relating to the share capital of the
company, any restriction on the business of the company and the number of
directors. It is implicit in the right to incorporate that shareholders can use
their voting power to amend any provision in the articles of incorporation,
provided that such action is bona fide and in the best interests of the
company.2 This notwithstanding, the fundamental company changes
legislation has consolidated a non-exhaustive list of various kinds of
amendments that may be made to the articles of incorporation of a company.3
It may be quickly noted here that the Ontario Divisional Court decision in
Re Rideau Carleton Raceway Holdings Ltd4 makes it plain that the right to
amend the articles consolidated in the provisions the separate division does
not prevent the company from choosing other provisions in the Acts to effect
an amendment of the articles. Put another way, a company can choose
whatever provisions in the Act in question it chooses to amend its articles.
The list of amendments provided for in the fundamental amendments
provisions is examined below.
List of fundamental amendments allowed
Change of name
The first in the statutory list of fundamental amendments allowed is the

change of the name of a company. Here, the fundamental company changes
Division provides that a company may amend its articles to change its name
to any other name.5 Any name change must comply with the rules relating to
names, discussed in Chapter 2.
Change of business
As was discussed in Chapter 2, it is not necessary for companies in the

Commonwealth Caribbean, except in the Bahamas and St Christopher/Nevis,
to set out specific objects or powers in their articles or bye-laws. However,
companies are at liberty to set out any restriction on the business that they
may carry out. A company in Anguilla, Antigua, Barbados, Dominica,
Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago which has
not included any such restriction on its business in its articles may amend its
articles to add such restriction,6 and a company which has included such
restriction may also amend its articles to add, change or remove any such
restriction upon its business.7
Changes to share capital
Under the fundamental company changes legislation, a company must state in

its articles the classes and any maximum number of shares it is authorised to
issue.8 Where a company has so stated, it may for business reasons wish to
increase or decrease its authorised share capital. In such a case, the company
may do this by amending its articles by special resolution to change the
maximum number of shares that the company is authorised to issue.9 By the
same token, it may wish to create additional classes or change the terms and
conditions of existing shares, or to change the shares of any class or series into
a different number of shares of other classes or series. The provisions of these
Acts allow such a company to do this by amending its articles by special
resolution to create new classes of shares10 or to change the designation of all
of its shares, and add, change or remove any rights, privileges, restrictions and
conditions, including rights to accrued dividends, in respect of all or any of its
shares, whether issued or unissued.11
A company, desiring to do so, may amend its articles by special resolution
to change the issued or unissued shares of any class or series into a different
number of shares of the same class or series or into the same or different
number of shares of other classes or series.12 Similarly, a company may amend
its articles by special resolution to divide a class of shares, whether issued or
unissued, into a series of shares and fix the number of shares in each series and
the rights, privileges, restrictions and conditions attached thereto.13
Finally, a company may amend its articles by special resolution to authorise
the directors to divide any class of unissued shares into series of shares and to
fix the number of shares in each series and the rights, privileges, restrictions
and conditions attached thereto.14 In addition, the directors may be authorised
by special resolution to change the rights, privileges, restrictions and
conditions attached to unissued shares of any series.15 Put simply, directors
may be given significant powers in respect of making changes to the structure
of the company’s share capital. However, a company may amend its articles
by special resolution to revoke, diminish or enlarge any of these directors’
powers.16
Changes to directors
Sometimes a company may wish to increase or decrease the number of its

directors. In Anguilla, Antigua, Barbados, Dominica, Grenada, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago, this may be done by the company
amending its articles by special resolution to increase or decrease the
minimum or maximum number of directors stated in the articles.17 However,
there are two constraints on a company doing this.18 First, if the articles
provide for cumulative voting, the number of directors may not be decreased
if the votes cast against the motion would be sufficient to elect a director
under the cumulative voting procedure.19 Second, no amendment may shorten
the fixed term of an incumbent director.20
Changes to restrictions on share transfers
As was seen in Chapter 2, if the right to transfer shares of a company is to be

restricted, the articles must contain a statement that the right to transfer shares
is restricted and of the nature of those restrictions.21 Where such a statement is
included in the articles, under the fundamental company changes Acts, a
company may amend the articles by special resolution to add, change or
remove restrictions on the transfer of shares contained in the statement.22
Changes to other provisions in the articles
It is open to a company to set out in its articles any provision permitted by the
Acts or by law permitted to be set out in the bye-laws of the company.23
Under the fundamental company changes Acts, a company which has done
this may amend its articles by special resolution to add, change or remove any
such provision in the articles.24
Revocation of amendments to articles
The directors of a company in Anguilla, Antigua, Barbados, Dominica,

Grenada, Montserrat, St Lucia, St Vincent and Trinidad and Tobago may
revoke the resolution to amend the articles before it is acted upon without
further approval of the shareholders.25 However, this may only be done if the
special resolution effecting the amendment to the articles authorises such
revocation.26
Amendment to directors’ powers to manage
Sometimes the articles of a company contain a provision that restricts in

whole or part the powers of the directors to manage the business and affairs of
the company. In Anguilla, Antigua, Barbados, Dominica, Grenada, Montserrat,
St Lucia, St Vincent and Trinidad and Tobago, such a provision may not be
amended by a mere special resolution. The consent of all the shareholders is
required to effect an amendment.27
Removal of constraints on the issue and transfer of shares
Under the Barbados Companies Act, a public company may by special

resolution amend its articles to constrain the issue or transfer of its shares for
either of two purposes.28 The first purpose is to constrain the issue or transfer
of its shares to persons who are not resident in the country concerned.29 The
second is to enable the company or any of its affiliates to qualify to obtain a
licence to carry on any business30 or to acquire shares of a financial
intermediary.31 A company which has so constrained the issue or transfer of its
shares may by special resolution amend its articles to remove such
constraints.32 Indeed, the directors of the company may, if authorised by the
shareholders in the special resolution effecting the amendment to impose the
constraints, revoke the resolution before it is acted upon without further
approval of the shareholders.33
An issue or transfer of a share or act of a company is valid notwithstanding
any failure to comply with the statutory rules and regulations governing
constrained share companies.34
Procedure for amendments to articles
A director or shareholder who is entitled to vote at an annual general meeting

of shareholders may make a proposal to amend the articles under the Acts in
Trinidad and Tobago.35 In making such a proposal, notice of the articles
proposed to be amended must be submitted to the company.36
The notice of the meeting at which a proposal to amend the articles is to be
considered must set out the proposed amendment.37 Where applicable, it must
also state that a dissenting shareholder is entitled to be paid the fair value of
his shares in accordance with the Acts.38 However, failure to make that
statement does not invalidate an amendment.39
Amendments and class votes
Where an amendment to the articles is proposed, special statutory provisions

in Antigua, Barbados, Dominica, Grenada, Montserrat, St Lucia, St Vincent and
Trinidad and Tobago apply. These provisions entitle the holders of shares of a
class, or in some cases, of a series of shares to a separate vote as a class or
series on the proposed amendment40 whether or not such shares otherwise
carry the right to vote.41
These provisions have been fully explored in Chapter 7, but generally
speaking, the holder of shares of a class or series are automatically entitled to
a separate class vote where the proposed amendment would adversely affect
or impair their rights.42 In any event, a proposed amendment on which holders
of a class of shares or a series are entitled to vote is only adopted when such
holders have adopted the amendment by a special resolution.43
Registration of amendments
Under the fundamental company changes Acts, after a resolution amending

the articles has been adopted, duplicate original articles of amendment in the
prescribed form must be sent by the company to the Registrar.44 Upon receipt
of the articles of amendment, the Registrar must issue to the company a
certificate of amendment.45 More particularly, except under the Anguillan Act,
the Registrar must endorse on the duplicate original articles the word
‘registered’ and the date of filing.46 The Registrar must then send to the
company an original certificate of amendment with one of the duplicate
originals of the articles of amendment bearing the word ‘registered’ endorsed
on it attached to the certificate.47
An amendment to the articles of a company becomes effective on the date
shown in the certificate issued by the Registrar in respect of that company
under the Acts in Anguilla, Antigua, Barbados, Dominica, Grenada,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago.48 The articles are
amended accordingly.49
It is important to note that under these Acts, an amendment to the articles
does not affect an existing cause of action or claim or liability to prosecution in
favour of or against the company or its directors.50 Similarly, an amendment
does not affect any civil, criminal or administrative action or proceeding to
which a company or any of its directors or officers is a party.51
Re-stated articles
In order to allow for the consolidation of amendments to the articles, the

directors of companies have been given statutory authority under the Acts in
Trinidad and Tobago to, at any time, re-state the articles of the company as
amended.52 In any event, the directors are obligated to file re-stated articles
when reasonably so directed by the Registrar.53
Duplicate original re-stated articles in the prescribed form must be sent to
the Registrar.54 The re-stated articles, signed by the director or authorised
officer, must set out the original articles of incorporation as well as the re-
stated articles containing all amendments (other than deleted provisions,
which are omitted). All provisions normally set out in the articles of
incorporation must be included in the re-stated articles. The information
should be current as at the time of the re-stated articles.
Upon receipt of the re-stated articles, the Registrar must issue a re-stated
certificate of incorporation.55 Re-stated articles are effective on the date shown
in the re-stated certificate and supersede the original articles and amendments
thereto.56
Alteration of Articles (Bahamas, Belize, Jamaica, St
Christopher/Nevis)
Nature of the power of alteration
The Companies Acts in the Bahamas, Belize, Jamaica and St Christopher/Nevis

do not utilise the concept of ‘Fundamental Company Changes’. Rather, these
Acts confer a wide power on a company to, ‘by resolution of the members’ (in
the Bahamas Act)57 and by ‘special resolution’ (in the Belize, Jamaica and St
Christopher/Nevis Acts)58 alter or add to its articles.59 Under the Jamaica Act,
any alteration or addition so made is declared to be as valid as if it were
originally contained in the articles and is subject also to alteration by special
resolution.60 By the device of alteration of articles, companies in the Bahamas,
Belize, Jamaica and St Christopher/Nevis can effect fundamental or other
company changes to their articles.
It is to be noted here that the St Christopher/Nevis Act imposes an
important restriction on the company’s power to alter its articles. It is that an
alteration made after the date on which a person became a member does not
bind that member if the alteration requires him to take or subscribe for more
shares than the number held by him at the date the alteration was made61 or
in any way increases his liability to contribute to the company’s share capital
unless he agrees in writing, either before or after the alteration to be bound.62
Judicial review of the statutory power of alteration
The problem
Despite the wide powers of alteration of articles conferred on companies in
the Companies Acts in the Bahamas, Belize, Jamaica and St Christopher/Nevis,
these Acts, unlike the fundamental company changes Acts, do not contain any
statutory responses for those minority shareholders who disagree with the
alteration approved by the majority. However, judicial exegesis makes it plain
that the wide powers conferred by these Acts are subject not only to any
limitations imposed by these Acts themselves but also to equitable limitations
imposed by the courts.
Defining the limitations on companies’ powers of alteration is of the
greatest importance, since inherent in the exercise of the power of alteration is
the potential for abuse of their voting power by the majority shareholders in
securing some ulterior, special or peculiar advantage to the detriment of the
minority shareholders. But defining these limitations is significantly
complicated by the fact that, as Dixon J pointed out in the Australian case of
Peters’ American Delicacy Co Ltd v Heath,63 the power of alteration is not a
fiduciary power, and the right to vote is an incident of property which may be
exercised for the shareholder’s personal advantage. Put another way, defining
limitations must confront the undisputed principle that voting rights are
proprietary rights, to the same extent as any other incidents of shares, which
the holder of the share may exercise in his own best interests even if these are
opposed to those of the company.
The Allen v Gold Reefs of West Africa Ltd test
Basic tenets of the test
The classic statement of the equitable limits on the statutory powers of

alteration was first articulated by Lindley MR in the English Court of Appeal
case of Allen v Gold Reefs of West Africa Ltd.64 He said there:65
Wide, however, as the language of [the statute] is, the power conferred by it must, like all powers, be
exercised subject to those general principles of law and equity which are applicable to all powers
conferred on majorities and enabling them to bind minorities. It must be exercised, not only in the manner
required by law but also bona fide for the benefit of the company as a whole and it must not be exceeded.
In this case, the articles gave the company a lien for all debts owing by
members to the company ‘upon all shares (not being fully paid) held by such
members’. Z was the only holder of fully paid shares although he also held
shares which were not fully paid. Z died owing arrears on partly paid shares
and the company altered its articles by deleting the words ‘not being fully
paid’, thus extending the lien to fully paid shares which formed part of Z’s
estate. Z’s executors challenged the validity of the alteration. The Court of
Appeal held that the alteration was made bona fide and for the benefit of the
company as a whole and was therefore valid.
The case of Allen v Gold Reefs of West Africa Ltd66 itself, gave little
indication as to how the ‘bona fide test’ was to be applied. Thus, for instance,
the test as stated in that case does not differentiate between an alteration
which does not involve an actual or effective expropriation of shares or of
valuable proprietary rights attaching to shares, on the one hand, and, on the
other, an alteration that involves expropriation by the majority of the shares,
or valuable proprietary rights attaching to the shares, of the minority.
However, the cases have suggested that such a differentiation must be drawn
in approaching the Allen v Gold Reefs of West Africa Ltd test.
Alterations not involving expropriation
The English Court of Appeal case of Shuttleworth v Cox Bros & Co

(Maidenhead) Ltd67 is an important case in outlining the approach of the
courts to the Allen v Gold Reefs of West Africa Ltd test where an alteration
does not involve an expropriation of the shares or proprietary rights attaching
the shares of a minority. In this case, the plaintiff, a director, on twenty-two
occasions within twenty-two months failed to account for the company’s
money he received. Under the existing articles, there was no ground to
remove him. Accordingly, the articles were altered by adding an article that
on a request in writing signed by all the other directors, a director should
resign. Once the articles were altered, the plaintiff was later duly requested to
resign. He unsuccessfully challenged the validity of the alteration as being not
bona fide in the interests of the company.
Scrutton LJ summed up what was said to be the correct approach to
identifying whether a corporate benefit arises from the alteration as required
by the Allen v Gold Reefs of West Africa Ltd test as follows:68
when persons, honestly endeavouring to decide what will be for the benefit of the company and to act
accordingly, decide upon a particular course, then, provided there are grounds on which reasonable men
could come to the same decision, it does not matter whether the Court would or would not come to the
same decision or a different decision. It is not the business of the Court to manage the affairs of the
company. That is for the shareholders and directors.
Shuttleworth v Cox Bros & Co (Maidenhead) Ltd69 was applied the recent Privy
Council decision in Citco Banking Corp NV v Pusser’s Ltd,70 an appeal from
the Eastern Caribbean Court of Appeal. This case involved the alteration of
the articles which had the effect of giving the chairman of the company (who
before the alteration controlled 28 per cent of the company’s shares) voting
control of the company. The alteration permitted the conversion of the
chairman’s existing shares (carrying one vote per share) into a new class of
share carrying fifty votes per share. The majority claimed that the alteration
was necessary because it allowed the company to raise finance for expansion,
the financiers requiring that the chairman’s control of the company be
entrenched. The Privy Council dismissed a challenge to the validity of the
alteration.
The Privy Council reiterated that the burden of proving that an amendment
is not bona fide in the interests of the company is on those who challenge the
amendment. It also accepted as correct the Shuttleworth v Cox Bros & Co
(Maidenhead) Ltd71 formulation of the test as to whether reasonable
shareholders could consider the amendment to be for the benefit of the
company. Applying this formulation, the Privy Council held that the Allen v
Gold Reefs of West Africa Ltd test of bona fide in the interests of the company
was met since a reasonable shareholder could have formed the view that the
alteration was in the interests of the company.
The ‘reasonable shareholder’ gloss on the bona fide test accepted in Citco
Banking Corp NV v Pusser’s Ltd72 makes the test appear more objective than
subjective. However, the Citco Banking Corp NV v Pusser’s Ltd test is the
traditional test which has always involved subjective and objective elements,
namely, could the shareholders honestly have believed the amendment was
for the benefit of the company and was that belief one which a reasonable
shareholder could have held. It may be noted that it is not clear from the cases
whether the subjective or objective element is to be given primacy.73
It is clear from the dictum of Lindley MR in Allen v Gold Reefs of West
Africa Ltd74 that the central plank of the test laid down in that case is the
requirement that the amendment must be ‘for the benefit of the company as a
whole’. In Greenhalgh v Arderne Cinema Ltd,75 Lord Evershed MR, in the
English Court of Appeal, summarised the general principles which emerge
from the cases subsequent to Allen v Gold Reefs of West Africa Ltd76 as to what
is meant by the requirement that the amendment must be ‘for the benefit of
the company as a whole’ as follows:77
In the first place, it is now plain that ‘bona fide for the benefit of the company as a whole’ means not two
things but one thing. It means that the shareholder must proceed on what, in his honest opinion, is for the
benefit of the company as a whole. Secondly, the phrase ‘the company as a whole,’ does not (at any rate in
such a case as the present) mean the company as a commercial entity as distinct from the corporators. It
means the corporators as a general body. That is to say, you may take the case of an individual
hypothetical member and ask whether what is proposed is, in the opinion of those who voted in its favour,
for that person’s benefit.
According to Lord Evershed, then, ‘the company as a whole’ meant the

shareholders as a general body. But, how does one decide whether the
alteration is for the shareholders as a general body in a situation where, as was
the case in Greenhalgh v Arderne Cinema Ltd,78 it is not possible to identify a
corporate benefit arising from the amendment and where the dispute is
between two groups of shareholders.
Lord Evershed MR appears to have recognised this practical limitation of
the Allen v Gold Reefs of West Africa Ltd test that the amendment must be for
‘the company as a whole’ and to have attempted a reformulation of the test to
deal with this limitation as follows:79
I think the thing can, in practice, be more accurately and precisely stated by looking at the converse and
by saying that a special resolution of this kind would be liable to be impeached if the effect of it were to
discriminate between the majority shareholders and the minority shareholders so as to give the former an
advantage of which the latter were deprived. When the cases are examined in which the resolution has
been successfully attacked, it is on that ground that it has fallen down. It is, therefore, not necessary to
require that persons voting for a special resolution should, so to speak, disassociate themselves altogether
from the prospect of personal benefit and consider whether the proposal is for the benefit of the company
as a going concern. If, as commonly happens, an outside person makes an offer to buy all the shares, prima
facie, if the corporators think it is a fair offer and vote in favour of the resolution, it is no ground for
impeaching the resolution because they are considering the position of themselves as individual persons.
However, as the learned authors of Gower and Davies’ Principles of Modern

Company Law have observed,80 Lord Evershed MR’s reformulation of the test
as a test of non-discrimination as between shareholders appears to have only
very tenuous connection with the ‘bona fide and in the interests of the
company as a whole’ test, at any rate, as this test has been applied in the cases
subsequent to Allen v Gold Reefs of West Africa Ltd. In all of these cases the
effect of the resolution was to discriminate between the majority shareholders
and the minority shareholders so as to give the former an advantage of which
the latter were deprived. In some of the cases it was held that the resolution
could not be impeached since it was bona fide and in the interests of the
company as a whole, while in others it was held to be impeachable as being
not in the interests of the company as a whole. In none of the cases was there
any overt enquiry as to whether the resolution discriminated in favour of the
majority and against the minority.
The upshot of the foregoing is that the general approach of the courts to the
Allen v Gold Reefs of West Africa Ltd test in cases where the alteration does
not involve an expropriation of shares or proprietary rights attached to shares
is to accept the majority view of the need for the alteration as long as it was
arrived at in good faith. This is so even in cases where the alteration
discriminates in favour of the majority and against the minority.
Alterations involving expropriation
There is some authority in two English first instance decisions which suggests
that courts adopt a stricter approach where the alteration specifically concerns
the majority shareholders seeking an unrestricted power, in their own interest,
to expropriate the shares of the minority shareholders. This approach is
evident in the early decision on this matter in Brown v British Abrasive Wheel
Co Ltd.81 The majority shareholders in this case, who held 98 per cent of the
shares sought to acquire the shares of the remaining 2 per cent shareholders
by proposing a special resolution to add a provision to the effect that any
shareholder was bound to transfer his share upon the request of 90 per cent of
the shares. Despite the fact that such an article could have been validly
included in the original articles, and despite the fact that the good faith of the
majority was not questioned, the court rejected the proposed alteration as
being solely for the benefit of the majority and not of the company. Similarly,
in Dafen Tin Plate Co v Llanelly Steel Co,82 an alteration empowering the
majority to determine that the shares of any member should be offered for
sale by the directors to anyone they chose at a fair value to be fixed by the
directors was held to be invalid. Paterson J opined that to say that an
unrestricted and unlimited power of expropriation was for the benefit of the
company was to confuse the interests of the majority with the benefit of the
company as a whole.
The authority of both Brown v British Abrasive Wheel Co Ltd83 and Dafen
Tin Plate Co v Llanelly Steel Co84 is of doubtful pedigree. In Sidebottom v
Kershaw, Leese & Co Ltd,85 the English Court of Appeal distinguished Brown v
British Abrasive Wheel Co Ltd.86 Lord Sterndale MR made it clear that the
decision in Brown can only be explained on the basis that Astbury J ‘found as a
fact’ that the majority shareholders had acted entirely for their own benefit
and not for the benefit of the company or in the interest of the company at
large.87 In the later English Court of Appeal decision of Shuttleworth v Cox
Bros & Co (Maidenhead) Ltd,88 the case of Dafen Tin Plate Co v Llanelly Steel
Co89 was severely criticised as wrongly applying the Allen v Gold Reefs of West
Africa Ltd test. The doubt which has been poured on these two first instance
decisions leaves unclear the law on the permissible boundaries of alteration to
allow for expropriation of the shares of the minority shareholders.
The decision of the High Court of Australia in Gambotto v WCP Ltd90 on the
issue of alteration by the majority shareholders seeking an unrestricted power,
in their own interest, to expropriate the shares of the minority shareholders
further complicates the law. In this case, the proposed alteration of the articles
was to allow the acquisition by a 99.7 per cent majority shareholder of the
shares of the minority shareholders at full value. Such an acquisition would
have resulted in tax advantages of approximately $4m for the company. The
majority shareholder did not vote on the resolution which was passed by the
minority shareholders. The Australian High Court struck down the alteration.
Its reason for doing so is instructive.
The court identified the proposed alteration as raising an issue essentially of
a conflict between two groups of shareholders as to how their respective
rights and liabilities should be adjusted. In this regard, the Court refused to
regard the Allen v Gold Reefs of West Africa Ltd ‘bona fide and in the interests
of the company’ test as useful as ‘it does not attach sufficient weight to the
proprietary nature of a share’. Instead, the Court considered that the test to be
applied in this context was whether the alteration was ultra vires, beyond any
purpose contemplated by the articles or oppressive.
It may be quickly noted that in Citco Banking Corp NV v Pusser’s Ltd,91 the
Privy Council showed little or no enthusiasm for Gambotto v WCP Ltd.92 The
Privy Council commented on that case that ‘it has no support in English
authority’.
Amalgamations
An overview
The Companies Acts in Antigua, Barbados, Dominica, Grenada, Montserrat, St

Lucia, St, Vincent and Trinidad and Tobago expressly provide for a
fundamental company change called an amalgamation.93 Amalgamations
represent an extremely important innovation in Commonwealth Caribbean
corporate law and consequently demand a detailed examination.
At common law
The concept of an ‘amalgamation’ as a separate legal concept was virtually

unknown in Commonwealth Caribbean company law prior to the recent
company legislation in the region. However, the expression ‘amalgamation’
has been widely used in the articles of association of companies in England
and the Commonwealth Caribbean, especially in demarcating certain rights of
preference shareholders and debenture-holders. A good example of such use is
the clause which gave rise to the litigation in the English case of Re South
Africa Supply & Cold Storage Co Ltd.94 That clause read:
The… preference shares shall confer on holders thereof…the right in the event of winding up for the
purpose of reconstruction or amalgamation to a bonus of… per cent on their par value.
As a result of the presence of the term ‘amalgamation’ in clauses like this

there has been much discussion in the case law on the term as a general
corporate concept.
The approach in the earlier cases was to deny that the expression was a
term of art. Thus, Wood V-C in the English decision of Re Empire Assurance
Corporation, ex p Bagshaw said:95
It is difficult to say what the word amalgamation means. I confess at this moment I have not the least
conception of what the full legal effect of the word is. We do not find it in any law dictionary or
expounded in any competent authority.
The first judicial attempt at a general definition of amalgamation was that of

Buckley J in Re South Africa Supply & Cold Storage Co Ltd, where he said:96
[Y]ou must have a rolling, somehow of two concerns into one. You must weld two things together and
arrive at an amalgam – a blending of two undertakings. It does not necessarily follow that the whole of the
two undertakings must pass – substantially they must pass – nor need all the corporators be parties. The
difference between reconstruction and amalgamation is that in the latter is involved the blending of two
concerns one with the other, but not necessarily the continuance of one concern… It is not necessary that
you should have a new company. You may have a continuance of one of the two companies upon the terms
that the undertakings of both corporations shall substantially be merged in one corporation only.
According to this dictum, then, the essential characteristics of an

amalgamation is that there must be undertakings of different corporations
which must be joined together with the result afterwards that there is one
undertaking which is substantially a combination of itself and the other
undertaking. What is noteworthy is that the dictum does not require any
liquidation of the company whose undertaking has been transferred.
Buckley J’s description was accepted by Eve J at first instance in the English
case of Re Walker’s Settlement.97 In this same case, however, the majority of
the Court of Appeal gave a different emphasis to the essential characteristics
of an amalgamation. Hanworth MR stated, ‘where… all the issued shares in a
company were transferred to a holding company and where the first company
was not to be wound up there was nothing like an amalgam made of one
company with another.’98 Inferentially, then, in his view, a feature of an
amalgamation is that the company which is amalgamated must be put into
liquidation. Romer LJ was more explicit. He said:99
An amalgamation may be carried out by means of a purchase and sale by one company of all the shares in
another with which it is proposed to amalgamate. The purchase of the shares does not, by itself, result in
an amalgamation… amalgamation would, in such a case, eventually be brought about by the first company
being put in liquidation… and by the acquisition by the purchasing company of the undertaking of the first
company.
The need for the liquidation of the company whose undertaking has been
transferred emphasised in Re Walker’s Settlement,100 was apparently ignored
by the English Court of Appeal in Central and District Properties Ltd v IRC. In
this case, although the amalgamating company was not put in liquidation, the
Court of Appeal nevertheless seems to have held that there was an
amalgamation.
The common law on corporate amalgamation is therefore confused. The
earlier authorities, and which have not been overruled, deny that the
expression has any technical meaning. The later cases which attempt to give it
legal meaning conflict in major ways. Finally, the authorities do not establish
any method of effecting an amalgamation nor do they indicate the legal effect
of an amalgamation.
Under the Companies Acts
Despite the fact that no clear legal concept of amalgamation exists at common
law, the Companies Acts in Antigua, Barbados, Dominica, Grenada,
Montserrat, St Lucia, St, Vincent and Trinidad and Tobago which expressly
provide for companies to amalgamate do not contain any definition of
amalgamation as such. It is submitted that, despite this, some idea of the
juridical nature of an amalgamation under the Acts may be culled from the
provision in the Acts which lays down the basic law on amalgamations.101
The basic statutory provision on amalgamation states that ‘two or more
companies, including holding and subsidiary companies, may amalgamate and
continue as one’. Interpreted literally, this provision seems to indicate that the
separate legal existence of the amalgamating corporate entities does not cease
but that the amalgamated entity continues all the characteristics and contents
of each amalgamating company. In other words, the separate legal existence
of the amalgamating company, or companies, ceases, or cease, as regards the
amalgamating company or companies but is preserved and continues in the
amalgamated company.
Canadian cases interpreting provisions in Canadian company legislation
similar to the provision in regional Acts support the conclusion that, after
amalgamation, the amalgamated company continues as one and the same
entity as all the amalgamating companies. The Supreme Court of Canada
decision in R v Black & Decker Manufacturing Co Ltd102 is the starting point.
In this case, Dickson J quipped that the amalgamation of corporations under
provisions in pari materia with the relevant section in regional Acts103 did not
involve the ‘death by suicide or the mysterious disappearance’ of the
amalgamating corporations. Instead, the express statutory provision was that
the amalgamating corporation was ‘continued’ within the amalgamated
corporation, finding ‘security, strength and… survival in that union’.104
Dickson J’s explanation of an amalgamation in the context of other forms of
corporate combinations is useful in understanding the juridical nature of an
amalgamation. He said:105
There are various ways in which companies can be put together. The assets of one or more existing
companies may be sold to another existing company or to a company newly incorporated, in exchange for
cash or shares or other consideration. The consideration received may then be distributed to the
shareholders of the companies whose assets have been sold, and these companies wound up and their
charters surrendered. In this type of transaction a new company may be incorporated or an old company
may be wound up, but the legal position is clear. There is no fusion of corporate entities. Another form of
merger occurs when an existing company or a newly incorporated company acquires the shares of one or
more existing companies which latter companies may then be retained as subsidiaries or wound up after
their assets have been passed up to the parent company. Again, there is no fusion. But in an amalgamation,
a different result is sought and different legal mechanics adopted, usually for the express purpose of
ensuring the continued existence of the constituent companies. The motivating factor may be the Income
Tax Act or difficulties likely to arise in conveying assets if the merger were by assets or share purchase.
But whatever the motive, the end result is to coalesce to create a homogenous whole. The analogies of a
river formed by the confluence of two streams or the creation of a single rope through the intertwining of
strands have been suggested by others.
Earlier in his judgment, Dickson J had stated:106

upon an amalgamation under the Canadian Corporation Act, no new company is created and no old
company is extinguished… The effect is that of blending and continuance as one and the self same
company.
Black & Decker Manufacturing Co Ltd107 has been consistently followed in

Canadian courts, and the views expressed in that case appear to represent well
settled law.108
Legal consequences of an amalgamation
The detailed rules on the effect of an amalgamation contained in the Acts are
hinged on the idea of an amalgamation as the continuance of the
amalgamating companies in the amalgamated company. Indeed, the
foundational rule on the consequences of an amalgamation is that when once
the certificate of amalgamation, which is the formal recognition of an
amalgamation, is issued, the continuance of the amalgamating companies as
one becomes effective.109
Six other legal consequences ensue upon an amalgamation. First, the
property of each amalgamating company becomes the property of the
amalgamated company.110 Second, the amalgamated company becomes liable
for the obligations of each amalgamating company.111 Third, any existing
cause of action, claim or liability to prosecution continues in the amalgamated
company.112 Fourth, any civil, criminal or administrative action or proceeding
pending by or against an amalgamating company may be continued by or
against the amalgamated company.113 Fifth, any conviction against, or ruling,
order or judgment in favour of or against an amalgamating company may be
enforced by or against the amalgamated company.114 Finally, the articles of
amalgamation become the articles of incorporation of the amalgamated
company and the certificate of amalgamation becomes the certificate of
incorporation of the amalgamated company.115 It is self-evident that these
statutorily specified consequences contemplate the continuation of the rights
and liabilities of the amalgamating company in the amalgamated company.116
Procedure for effecting amalgamations
There are three different types of amalgamations provided for under the Acts.
These are amalgamations by agreement,117 vertical short-form
amalgamations118 and horizontal amalgamations.119 The procedure which must
be followed to effect an amalgamation depends on the type of amalgamation
adopted. Accordingly, in this section, each type of amalgamation and the
procedure required to effect the amalgamation will be analysed.
Amalgamations by agreement
Contents of the amalgamation agreement
Each company, other than a company in a group, proposing to amalgamate

must enter into an agreement which sets out the terms of the amalgamation
and the means by which it is to be effected.120 In particular, certain statutorily
specified matters must be set out in the agreement.121
The Acts stipulate that the amalgamation agreement must contain the
provisions that are required by these Acts to be included in the articles of
incorporation.122 This means that the agreement must state the proposed name
of the company, the classes and any maximum number of shares that the
company is authorised to issue, and conditions attaching to each class of
shares, including the directors’ authority to deal with shares, and any
restrictions on the transfer of shares.
The number of directors and any restrictions on the business that the
company may carry on must also be stated in the agreement. Indeed, there is a
further requirement that the amalgamation agreement must set out, in
addition to the number of directors, the name and address of each proposed
director of the amalgamated company.123
The manner in which the shares of each amalgamating company is to be
dealt with has to be spelt out in the amalgamation agreement.124 Thus, each
agreement must state the way in which the shares of each amalgamating
company are to be converted into shares or debentures of the amalgamated
company.125 Where, however, any shares of an amalgamating company are
not to be converted into shares or debentures of the amalgamated company,
then the agreement has to set out the amount of money or shares or
debentures of any body corporate which the holders of those shares are to
receive instead of the shares or debentures of the amalgamated company.126 If
the amalgamated company proposes to pay money instead of issuing
fractional shares of the amalgamated company or of any other body corporate
the shares or debentures of which are to be received in the amalgamation,
then the agreement must also expressly state the manner in which such
payment is to be made.127
The amalgamation agreement must also state whether the bye-laws of the
amalgamated company are to be those of one of the amalgamating
companies.128 If it is not to be the bye-laws of an amalgamating company, then
a copy of the proposed bye-laws must be contained in the agreement.129 In
any case, the agreement must state the details of any arrangements necessary
to perfect the amalgamation and provide for the subsequent management
operation of the amalgamated company.130
An eventuality for which the amalgamation agreement must make special
provision is where the shares of one of the amalgamating companies are held
by or on behalf of another of the amalgamating companies.131 In this event,
the amalgamation agreement must provide for the cancellation of those shares
when the amalgamation becomes effective.132 No repayment of capital in
respect of these cancelled shares can be provided for in the amalgamation
agreement;133 neither can the amalgamation agreement make provision for
the conversion of these shares into shares of the amalgamated company.134
Approval of the amalgamation agreement
After the amalgamation agreement has been drawn up, it must be submitted
by the directors of each amalgamating company for approval to a meeting of
shareholders of the amalgamating company of which they are directors.135 In
cases where the shares of an amalgamating company are divided into classes
or series, there must be approval by the holders of each class or series of
shares of that company.136 Each shareholder of each amalgamating company
must be given not less than twenty-one days’, nor more than fifty days’, notice
of the meeting.137 The notice must include, or be accompanied by, a copy or
summary of the amalgamation agreement.138 The notice must also state that a
dissenting shareholder is entitled to be paid the fair value of his share;139 but
failure to do so does not invalidate an amalgamation.140
Two special rules governing voting in a meeting to approve an
amalgamation are provided for in the Acts. In such a meeting, each share of an
amalgamating company carries the right to vote in respect of the
amalgamation whether or not the share otherwise carries the right to vote.141
The other special rule is that the holders of a class or series of shares are
entitled to vote separately as a class or series in respect of an amalgamation
when the amalgamation agreement contains any provision changing or
altering their capital or income rights.142
The process of amalgamation by agreement is complete when the
amalgamation agreement is adopted by the meeting duly called to approve
it.143 This occurs when the shareholders of each amalgamating company
approve the amalgamation by special resolutions of each class or series of the
shareholders entitled to vote on the amalgamation.144 Notwithstanding
approval of the agreement by the shareholders of all or any of the
amalgamating companies, an amalgamation can be terminated by the
directors of an amalgamating company if the amalgamation agreement
provides that at any time before the issue of the amalgamation certificate, the
directors of an amalgamating company may terminate the agreement.145
Vertical short-form amalgamation
The second type of amalgamation legislated for in the Acts is what is called in
the Acts vertical short-form amalgamation.146 This type of amalgamation
occurs where a holding company amalgamates with one or more of its wholly
owned subsidiary companies and continues as one company.147
With this type of amalgamation, the extensive procedure which is involved
in an amalgamation by agreement is dispensed with. All that is required to
effect this type of amalgamation is that the directors of each amalgamating
company approve the amalgamation by a resolution.148
A directors’ resolution approving an amalgamation must provide for three
things.149 First, it must provide for the shares of each amalgamating subsidiary
company to be cancelled without any repayment of capital in respect of the
cancellation.150 Second, it must stipulate that the articles of amalgamation will
be the same as the articles of incorporation of the amalgamating holding
company.151 Third, the resolution must forbid any shares or debentures being
issued by the amalgamated company in connection with the amalgamation.152
As long as a resolution containing these provisions is passed by the directors of
the amalgamating companies, the amalgamation is effective.
Horizontal short-form amalgamation
The third and final type of amalgamation available under the Acts is the
horizontal short-form amalgamation. This occurs where two or more wholly
owned subsidiary companies of the same holding company amalgamate and
continue as one.153
As with the vertical short-form amalgamation, the horizontal short-form
amalgamation is effected by a resolution of the directors of each
amalgamating company approving the amalgamation.154 However, the
contents of the resolution approving a horizontal short-form amalgamation
are different from those of a vertical short-form amalgamation.
In a horizontal short-form amalgamation, the resolution must provide, first
of all, for the shares of all but one of the subsidiaries to be cancelled without
any repayment of capital in respect of the cancellation.155 Secondly, the
resolution must contain a provision for the articles of amalgamation to be the
same as the articles of incorporation of the subsidiary company whose shares
are not cancelled.156 Finally, the resolution must provide that the stated capital
of the amalgamating subsidiary companies whose shares are cancelled will be
added to the stated capital of the amalgamating subsidiary whose shares are
not cancelled.157
Registration of the amalgamation
After an amalgamation has been adopted by the shareholders in the case of an

amalgamation by agreement or the directors in the case of a vertical short-
form amalgamation or horizontal short-form amalgamation, two executed
duplicate copies of articles of amalgamation in the prescribed form must be
sent to the Registrar.158 A notice of the registered office of the amalgamated
company159 and a notice of directors160 must accompany the articles of
amalgamation.
The executed articles of amalgamation must have attached thereto a
statutory declaration of a director or an officer of each amalgamating
company.161 Such declaration must establish to the satisfaction of the Registrar
that certain stipulated solvency requirements are met and creditors are
protected.162 More particularly, the declaration must establish that there are
reasonable grounds for believing that each amalgamating company is, and the
amalgamated company will be, able to pay its liabilities as they become due163
and that the realisable value of the amalgamated company’s assets will not be
less than the aggregate of its liabilities and stated capital of all classes.164 The
declaration must also state that there are reasonable grounds for believing that
no creditor will be prejudiced by the amalgamation,165 or, alternatively, that
adequate notice has been given to all known creditors of the amalgamating
companies and that no creditor objects to the amalgamation otherwise than on
grounds that are frivolous or vexatious.166
Adequate notice will be deemed to have been given to the creditor by the
company if a notice in writing is sent to each known creditor having a claim
against the company that exceeds a statutory specified sum167 and a notice is
also published once in a newspaper published or distributed in the country
where the company is incorporated.168 Each notice must state that the
company intends to amalgamate with one or more specified companies in
accordance with the relevant Act and that a creditor of the company can
object to the amalgamation within thirty days from the date of the notice.169
Certificate of amalgamation
Upon receipt of the articles of amalgamation and the accompanying

documents, the Registrar must issue a certificate of amalgamation.170 The
amalgamation takes effect on the date shown in the certificate of
amalgamation, in respect of the amalgamated company.171
Mergers and Consolidations (Bahamas)
Part V of the Bahamian Companies Act makes provision for the merger and
the consolidation of companies. Broadly speaking, these provisions establish a
form of corporate combination analogous to the amalgamation mechanism in
Trinidad and Tobago just discussed.
A merger is defined as the merging of two or more constituent companies
into one of the constituent companies.172 A consolidation, on the other hand, is
defined as the uniting of two or more constituent companies into a new
company.173 A constituent company is, in the meantime, defined as an existing
company that is participating in a merger or consolidation with one or more
existing companies.174 The fundamental difference between a merger and a
consolidation, therefore, is that in a merger the constituent companies
continue as one of the constituent companies whereas in a consolidation a new
company comes into existence.
Conditions for mergers or consolidations
Companies wishing to merge or consolidate must satisfy three conditions.

These are, first, that the constituent companies are solvent.175 It may be added
here parenthetically that the Act does not define ‘solvent’, but it is thought
that solvency in this context includes both commercial solvency as well as
balance sheet solvency. In other words, a company must not only be able to
pay its debts as they become due, but the liquidation value of its realisable
assets must exceed its liabilities. The second condition is that the constituent
companies must follow the procedure established in the Act for merging or
consolidating.176 The third is that the surviving company in the case of a
merger, or the consolidated company in the case of a consolidation, must
satisfy the requirements of the Act.177
Procedure for merger or consolidation
Where companies propose to merge or consolidate, the first step is for the
directors of each constituent company participating in the merger or
consolidation to approve a written plan of merger or consolidation as the case
may be.178 This plan must contain, as the case requires, statutorily specified
matters.179
First, the plan must state the name of each constituent company and the
name of the surviving company or the consolidated company.180 Second, the
plan must, in respect of each constituent company, state the designation and
number of outstanding shares of each class or series of shares specifying each
such class or series entitled to vote on the merger or consolidation.181 In
addition, the plan must include a specification of each such class or series, if
any, entitled to vote as a class or series in respect of each constituent
company.182 Third, the plan must state the terms and conditions of the
proposed merger or consolidation. Such statement must include the manner
and basis of converting shares in each constituent company into shares, debt or
other securities in the surviving company or consolidated company, or money
or other property, or combination thereof.183 Fourth, in respect of a merger,
the plan must contain a statement of any amendment to the memorandum or
articles of the surviving company to be brought about by the merger.184
Finally, in respect of a consolidation, the plan must state everything required
to be included in the memorandum or articles for a company except
statements as to facts not available at the time the plan of consolidation is
approved by the directors.185
The second step in a merger or consolidation is to have the plan authorised
by a resolution of members.186 If a meeting of members is to be held to obtain
authorisation, then notice of the meeting, accompanied by a copy of the plan,
has to be given to each member, whether or not entitled to vote on the
merger or consolidation.187 If, on the other hand, authorisation is to be
obtained by the written consent of members, a copy of the plan has to be sent
to each member, whether or not entitled to consent to the merger or
consolidation.188
In a vote authorising the plan, the outstanding shares of a class or series of
shares are entitled to vote on the merger or consolidation as a class or series if
the memorandum or articles so provide.189 This same rule applies if the plan
contains any provision that, if contained in a proposed amendment to the
memorandum or articles, would entitle the class or series to vote on the
proposed amendment as a class or series.190
The third step in a merger or consolidation is that, after approval of the plan
by the directors and members of each constituent company, articles of merger
or consolidation must be executed by each company.191 The articles of merger
or consolidation must contain the plan of merger or consolidation, and in the
case of consolidation, any statement required to be included in the
memorandum and articles of a company under the Act.192 The articles of
merger or consolidation must also contain the date on which the
memorandum and articles of each constituent company were registered with
the Registrar,193 and the manner in which the merger or consolidation was
authorised with respect to each constituent company.194
The fourth and final step is the submission of the articles of merger or
consolidation to the Registrar for his retention and registration in the register
of companies.195 Upon registration of the articles of merger or consolidation,
the Registrar is under a duty to issue a certificate under his hand and seal
certifying that the articles of merger or consolidation have been registered.196
This certificate constitutes prima facie evidence of compliance with all
requirements of the Act in respect of the merger or consolidation.197
Merger with subsidiary
A parent company may merge with one or more of its subsidiaries.198 In such
an event, there is no need for the authorisation of the members of any
company.199 All that is necessary is that the surviving company is a company
incorporated under the Bahamian Act and that it satisfies all the requirements
of that Act.200
In effecting a merger with a subsidiary, the first step is for the parent
company to approve a written plan of merger.201 This plan must contain the
name of each constituent company and the surviving company.202 It must also
contain, in respect of each constituent company, the designation and number
of outstanding shares of each class or series of shares,203 and the number of
shares of each class and series of shares in each subsidiary owned by the
parent.204 Finally, it must contain the terms and conditions of the proposed
merger.205 A copy or an outline of the plan of merger must be given to every
member of each subsidiary except to a member who waives his right to such
giving.206
After approval of the plan of merger and the giving of a copy or an outline
of that plan to members, the next step is for the parent company to execute
articles of merger.207 The articles of merger must contain the plan of merger,208
the date on which the memorandum and articles of each constituent company
were registered by the Registrar,209 and, if the parent company does not own
all the shares in each subsidiary company to be merged, the date on which a
copy or outline of the plan of merger was made available to the members of
each subsidiary company.210 The articles of merger must be submitted to the
Registrar to be retained and registered in the register of companies by the
Registrar.211
Upon registration of the articles of merger, the Registrar is under a duty to
issue a certificate under his hand and seal certifying that the articles of merger
have been registered.212 A certificate of merger so issued constitutes prima
facie evidence of compliance with all the requirements of the Act in respect of
the merger.213
Legal effect of mergers and consolidations

A merger or consolidation becomes effective on the date the articles of
merger or consolidation are registered by the Registrar or such subsequent
date, not exceeding thirty days, as is stated in the articles of merger or
consolidation.214 Upon the merger or consolidation becoming effective, certain
important legal consequences follow.
These consequences are, first, the surviving company or the consolidated
company, insofar as is consistent with its memorandum and articles as
amended or established by the articles of merger or consolidation, has all the
rights, privileges, immunities, powers, objects and purposes of each of the
constituent companies.215 Second, in the case of a merger, the memorandum
and articles of the surviving company are automatically amended to the
extent, if any, that changes in the memorandum or articles are contained in the
articles of merger.216 In the case of a consolidation, the statements contained in
the articles of consolidation that are required or authorised to be contained in
the memorandum or articles of a company incorporated under the Act are the
memorandum and articles of the consolidated company.217 Third, property of
every description, including choses in action and the business of each of the
constituent companies, immediately vest in the surviving company or
consolidated company.218 Fourth and final, the surviving company or the
consolidated company becomes liable for all claims, debts, liabilities and
obligations of each of the constituent companies.219
A merger or consolidation does not have the effect of impairing or releasing
any conviction, ruling, order, claim, debt, liability or obligation due or to
become due, or any cause existing, against a constituent company or against
any member, director, officer or agent of a constituent company.220 By the
same token, a merger or consolidation does not have the effect of abating or
discontinuing any proceedings, whether civil or criminal, pending at the time
of the merger or consolidation by or against a constituent company, or against
any member, director, officer or agent of a constituent company.221 However,
the proceedings may be enforced, prosecuted, settled or compromised by or
against the surviving company or the consolidated company or against the
member, director, officer or agent, as the case may be.222 Also, the surviving
company or the consolidated company may be substituted in the proceedings
for a constituent company.223
After the merger or consolidation becomes effective, the Registrar is under
a duty to strike off the register of companies any constituent company that is
not the surviving company in a merger,224 or a constituent company that
participated in a consolidation.225
Reorganisations
Under the Companies Acts in Antigua, Barbados, Dominica, Grenada, St

Lucia, St Vincent and Trinidad and Tobago, provisions are made for corporate
reorganisations.226 These provisions are basically procedural provisions. The
object of the provisions is to enable the court to effect certain fundamental
changes and other changes to a company where such changes are necessary to
implement an order of the court made pursuant to the oppression remedy
under the Acts or where other statutes require such changes to be made. Thus,
a reoganisation is defined in the Acts as meaning a court order which is made
pursuant to the oppression remedy provisions in the Acts,227 or a court order
approving a proposal under the relevant bankruptcy statute,228 or a court order
that is made under any other enactment and that affects the rights among the
company, shareholders and creditors.229
Powers of the court in making reorganisation order
The reorganisation procedure obviates the need for compliance with all the
formalities of the Acts, particularly shareholder approval of the proposed
amendment.230 Accordingly, if a company is subject to a reorganisation order,
its articles may be amended by the order to effect any change that could be
lawfully made by filing articles of amendment under the Acts.231 If the court
makes such an order, the court may also authorise the issue of debentures of
the company, whether or not convertible into shares of any class or series or
having attached any rights or options to acquire shares of any class or series,
and fix the terms thereof.232 Additionally, the court may appoint directors in
place of or in addition to all or any of the directors then in office.233
Implementation of reorganisation order
After a reorganisation order has been made, articles of reorganisation in the

prescribed form must be sent by the company to the Registrar together with
any applicable notice of change of directors and any applicable notice of
change of address of the registered office of the company.234 Upon receipt of
articles of reorganisation, the Registrar must follow the usual procedure and
issue a certificate of amendment.235 A reorganisation of a company becomes
effective on the date shown in the certificate of amendment and its articles of
incorporation are amended accordingly.236
No dissent rights
A shareholder of a company is not entitled to dissent if an amendment to the

articles of incorporation of the company is effected by a reorganisation
order.237
Arrangements
Traditional meaning
The Companies Acts of Antigua, Barbados, Dominica, Grenada, Montserrat, St

Lucia, St Vincent and Trinidad and Tobago make provision for companies to
effect fundamental changes by the machinery of ‘arrangements’.238
‘Arrangements’ are also provided for in the Bahamian Companies Act as part
of the merger and consolidation provisions in that Act.239 Arrangements have
been a part of Commonwealth Caribbean company law for some time now as
part of the mechanism of compromises and arrangements. Indeed the
compromise and arrangement mechanism remains part of the Company Acts
of Belize, Guyana, Jamaica and St Christopher/Nevis.240
Traditionally, in Commonwealth Caribbean company law, a compromise is
understood to be an agreement terminating a dispute between parties as to
the rights of one or more of them, or modifying the undoubted rights of a
party which he has difficulty in enforcing.241 An arrangement, on the other
hand, includes a much wider class of agreements, which need not in any way
be analogous to a compromise.242 Accordingly, arrangements include
agreements that modify rights about which there is no dispute and which can
be enforced without difficulty where the purpose of the agreement is simply
to alter the rights originally conferred.243
The mechanism of compromises and arrangements developed in
Commonwealth Caribbean law because claims or rights enforceable against a
company are often vested in large classes of persons with whom it would be
practically impossible to negotiate on an individual basis a compromise of
these claims or a modification of these rights. Compromises and
arrangements, therefore, are intended to provide machinery whereby the
claims of the classes collectively can be compromised or their rights modified
with the assent of a majority of their number given at a meeting called for the
purpose.
Under the Antigua, Barbados, Dominica, Montserrat, St

Lucia, St Vincent and Trinidad and Tobago Acts
Under the Companies Acts of Antigua, Barbados, Dominica, Montserrat, St

Lucia, St Vincent and Trinidad and Tobago, arrangements are now made
available as a procedure to be used in situations where it is not practicable for
a company that is solvent to effect a fundamental change, or even, a series of
fundamental changes under any other provision of the Acts. In such an
eventuality, the company may propose an arrangement and apply to the court
for an approval of the proposal.244
These Acts define ‘arrangements’ to include (a) an amendment of the
articles of a company;245 (b) an amalgamation of two or more companies;246 (c)
a division of the businesses carried on by a company;247 (d) a transfer of all or
substantially all the property of a company to another body corporate in
exchange for property, money or shares or debentures of the body
corporate;248 (e) an exchange of shares or debentures held by shareholders or
debenture-holders of a company for property, money or other shares or
debentures of the company, or property, money or shares or debentures of
another body corporate, if it is not a takeover bid within the meaning of the
Acts;249 (f) a liquidation and dissolution of a company;250 and (g) any
combination of the foregoing activities.251
It is apparent from the list of transactions included in the definition of
‘arrangements’, as well as the presence of the term ‘includes’ in that definition,
that the word ‘arrangement’ is to be given its widest signification.252
Furthermore, the fact that the arrangement is similar in form or result to
another form of fundamental change does not preclude the use of the
arrangement procedure.253 Consistent with this principle, case law has
established that the company has the right to decide in any given case whether
it wishes to amend its articles by way of the special resolution procedure or by
way of the arrangement procedure and that it is not up to the Registrar to
decide.254
Under the Bahamas Act
The objective of the arrangement provisions in the Bahamian Act appears to

be the same as that in the Acts in Antigua, Barbados, Dominica, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago. The definition of arrangement in
the Bahamian Act is somewhat different, however. That Act defines an
arrangement to mean a reorganisation or reconstruction of a company;255 a
merger or consolidation of one or more companies so long as the surviving
company satisfies the requirements of the Act;256 a separation of two or more
businesses carried on by a company;257 or any combination of the foregoing.258
Application to court for approval of arrangement
Under the Acts in Antigua, Barbados, Dominica, Montserrat,

St Lucia, St Vincent and Trinidad and Tobago
The Acts in Antigua, Barbados, Dominica, Montserrat, St Lucia, St Vincent and

Trinidad and Tobago require three conditions to be satisfied by a company
applying to the court to effect a fundamental change by way of an
arrangement.259 First, it must not be practicable for the company to make the
proposed change under any other provision of the Acts.260 Second, the
company must be solvent. Third, the arrangement must be proposed by the
company.261
With respect to the first requirement, the threshold for establishing
impracticability is low. All that is required is to show that other provisions of
the Act in question would be difficult to put into practice to achieve the same
result, or that reasonable business objectives could not otherwise be achieved
without onerous temporal and financial constraints. Thus, in Re Trisec
Corpn,262 it was held by the Alberta Queen’s Bench that it was not practicable
for a company to effect a plan under any other provision of the Act where no
other provision provided the flexibility to deal with a complex reorganisation
involving secured creditors, unsecured creditors and shareholders. Similarly, in
the Alberta Queen’s Bench case of PetroKazakhstan Inc v Lukoil Overseas
Kumkol BV,263 it was held that it was impracticable to effect a fundamental
change in the nature of the arrangement where the objectives include the
simultaneous acquisition of shares and treatment of all outstanding options
and thereby to obtain a 60 per cent premium over the closing market price of
shares on the last day before public dissemination.
With respect to the second requirement, the Acts define ‘insolvency’ for the
purposes of arrangements.264 According to this definition a company is
insolvent if it is unable to pay its liabilities as they become due.265
Alternatively, by the statutory definition, a company is insolvent if the
realisable value of the assets of the company is less than the aggregate of its
liabilities and stated capital of all classes.266
It is submitted that the third requirement, namely, that the arrangement
must be proposed by the company does not mean that the company has to
convene a meeting of shareholders to approve the arrangement prior to an
application to the court.267 Admittedly, a proposal ‘by the company’ generally
refers to a proposal approved by the company in general meeting. However,
the arrangement provisions have, in essence, vested a residual power in the
courts to facilitate fundamental changes that may be difficult, or impossible,
under the more precise rules governing specific fundamental changes which
themselves require shareholder approval.
It is worth noting, in this regard, that under the arrangements provisions the
courts have power to order the company to call, hold and conduct a meeting
of shareholders or debenture-holders or holders of options or rights to acquire
shares in the company.268 This provision implies that courts are at liberty to
order approval of an arrangement although there has been no approval of the
arrangement at a meeting of shareholders. In practice, however, it is advisable
for the company to propose an arrangement and to convene a meeting of the
relevant shareholders and debenture-holders at which the arrangement is
approved. After this, the application to the court for an order approving the
proposed arrangement is made.269
Whenever a company makes an application to the court for approval of an
arrangement, the company must give notice of the application to the
Registrar.270 The Registrar may appear and be heard in person or by an
attorney-at-law in respect of the application.271
Under the Bahamas Act
Under the Act in the Bahamas, a two-step procedure must be followed. First,
where the directors determine that it is in the best interests of their company
or the creditors or members of that company, the directors may by a
resolution of members, approve the plan of arrangement that contains the
details of the proposed arrangement.272 Second, upon approval of the plan of
arrangement by the members, the company may then make application to the
court for approval of the proposed arrangement.273
Powers of the court in respect of applications
Powers in respect of procedure and practice
In the Acts in Antigua, Barbados, Dominica, Montserrat, St Lucia, St Vincent

and Trinidad and Tobago as well as the Act in the Bahamas, the arrangement
provisions confer on courts broad powers in respect of procedure and practice
in connection with applications for approval of a proposed arrangement.274 In
particular, the court may make any of the following interim or final order it
thinks fit: (a) an order determining the notice to be given to any interested
person or dispensing with notice to any person other than the Registrar;275 or
(b) an order requiring a company, in such manner as the court directs, to call,
hold and conduct a meeting of shareholders or debenture-holders or holders of
options or rights to acquire shares in the company.276
Powers in respect of remedial rights
The courts have power under the arrangement provisions to grant two
important remedies in connection with an application for approval of a
proposed arrangement. The first is that the courts may make an order
allowing a shareholder to exercise the right to dissent provided for under the
Acts.277 Under the Acts in Antigua, Barbados, Dominica, Montserrat, St Lucia,
St Vincent and Trinidad and Tobago, this power is significant since, under the
dissenting provisions in these Acts,278 a shareholder does not have a vested
right to dissent in respect of fundamental changes effected by an arrangement.
A shareholder can only claim dissenters’ rights in such a circumstance
pursuant to an order of the court permitting the shareholder to dissent.279
The question as to when the court will exercise its discretion under these
Acts to require that a plan of arrangement provide dissent rights to
shareholders was considered in the Ontario case of Re Electrohome Ltd.280
Here, it was pointed out that, as a general principle, if a proposed arrangement
involves a transaction which, if not done as part of an arrangement, would
trigger dissent rights, the court should include dissent rights in the interim
order. On the other hand, a transaction which does not constitute a sale of all,
or substantially all, the property of the company if done outside an
arrangement should not trigger dissent rights when made part of an
arrangement. The fundamental principle by which the court should be guided
in deciding whether to provide dissent rights as part of a plan of arrangement
is to ensure that a shareholder is not locked-in when the company is taken in a
new direction with which the shareholder does not agree.
The second remedy which may be granted by the courts is an order
approving an arrangement as proposed by the company or as amended in
such manner as the court may direct.281 The essential test which the court must
apply in deciding whether to approve an arrangement is well settled as that
laid down in the English Court of Appeal decision of Re Alabama, New
Orleans, Texas and Pacific Junction Railway Co.282 A stream of decided cases
on provisions similar to that in regional statutes, relying on this decision, have
held that the tests are that the court must be satisfied (i) that there has been
compliance with the statutory provisions; (ii) that the class of shareholders is
fairly represented; (iii) that the statutory majority approving the arrangement
is acting in good faith in the interests of the class it purports to represent; (iv)
that the arrangement is one such as a man of business would reasonably
approve; and (v) that the arrangement is fair and reasonable as regards the
different classes of shareholders.283
It appears from the cases that no one of these tests is by itself determinative.
The court has absolute power to sanction or refuse to sanction an
arrangement. The purpose of requiring the court’s sanction is to ensure that
the whole arrangement is fully ventilated in public and that the rights of
shareholders, minority and majority, are fully considered. Consistent with this
purpose, the overriding concern of the court is to ascertain the merits and
fairness of a particular arrangement, as well as the degree of shareholder
acceptance. The court’s application of these tests may be usefully illustrated by
recourse to some decided Canadian cases.
In Re Canadian Cottons Ltd,284 it was held that there is no reason for the
court to approve an arrangement merely because the statutory super-majority
of shareholders approves it when a careful examination discloses provisions
which are objectionable. Similarly, in Re T Eaton Co,285 it was held that the
majority can bind the minority in an arrangement provided that the terms are
not unfair or unreasonable. In Re Holdex Group Ltd,286 which concerned
approval of a complicated reorganisation of the authorised capital and issued
share capital of a company, the creation of new classes of shares, mandatory
conversion of shares and variation of the share conditions attached to the
various classes of shares, the court examined whether the formalities required
by the Act had been complied with, the level of approval received from each
class of shares, whether there were any dissenting votes, the number of shares
represented at the meeting, the practical effect of the arrangement on the
shareholders and the company and whether approval would avoid the
considerable expense in a winding up.
Filing of articles of arrangement
In Antigua, Barbados, Dominica, Montserrat, St Lucia, St

Vincent and Trinidad and Tobago
Under the Acts in Antigua, Barbados, Dominica, Montserrat, St Lucia, St

Vincent and Trinidad and Tobago, after the court has made an order approving
an arrangement as proposed by the company or as amended in such manner
as the court may direct, articles of arrangement in the prescribed form must be
sent to the Registrar.287 The articles of arrangement must be accompanied by a
notice of change of directors and a notice of change of address.288
The Registrar is under a duty to issue a certificate of amendment upon
receipt of the articles of arrangement.289 An amendment becomes effective on
the date shown in the certificate of amendment.290
In the Bahamas
The provisions in the Act in the Bahamas on filing of articles of arrangement

are much more detailed than in the Acts in Antigua, Barbados, Dominica,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago. Under the Act in
the Bahamas, after the court makes an order approving a plan of arrangement,
the directors of the company, if they are still desirous of executing the plan,
must confirm the plan of arrangement as approved by the court, whether or
not the court has directed any amendments to be made to the plan of
arrangement.291 Upon confirming the plan of arrangement, the directors must
give notice to the persons to whom the order of the court requires notice to be
given and submit the plan to those persons for such approval, if any, as the
order of the court requires.292 After the plan has been so approved, articles of
arrangement must be executed by the company.293 The articles of arrangement
must contain the plan of arrangement;294 the order of the court approving the
plan;295 and the manner in which the plan was approved, if approval was
required by the order of the court.296
The articles of arrangement must be submitted to the Registrar to be
retained by him and registered by him in the register of companies.297 Upon
registration of the articles of amendment, the Registrar is under a duty to issue
a certificate certifying that the articles of arrangement have been registered.298
A certificate of arrangement issued by the Registrar is prima facie evidence of
compliance with the Act in respect of the arrangement.299 An arrangement is
effective on the date the articles of arrangement are registered by the
Registrar or on such subsequent date, not exceeding thirty days, as may be
stated in the articles of arrangement.300
Conclusion
It is clear from this chapter that the Companies Acts in Anguilla, Antigua, the
Bahamas, Barbados, Dominica, Montserrat, St Lucia, St Vincent and Trinidad
and Tobago have introduced a number of mechanisms whereby a modern
company may effect desired fundamental changes to its corporate structure.
Equally clear is that these Acts have imposed important procedural and
substantive constraints on the use of these mechanisms and have also provided
remedies for shareholders who ‘dissent’ from a proposed fundamental change.
In consequence, it is imperative that the fundamental company changes
discussed in this chapter be read in conjunction with Chapter 18 which deals
with the appraisal rights available to a shareholder who dissents from a
fundamental change.
Notes
1 Ang Division 8; Ant Division K of Pt I; B’dos Division K of Pt I; Dom Division K of Pt I; Gren Division K
of Pt I; Mont Division K Pt I; St L Division K of Pt I; St V Division K of Pt I; T’dad Division II of Pt III.
2 Royal Trust Co v Norrie [1951] 3 DLR 561 BC SC, affd (1951) 3 WWR (NS) 503, 507 BC CA. This case is of
particular importance in Guyana where the Act does not expressly confer this power.
213(1); T’dad s 214(1).
4 (1984) 28 BLR 89 Ont Div Ct.
213(1)(a); St V s 213(1)(a); T’dad s 214(1)(a).
6 Ang s 161(1)(b); Ant s 213(1)(b); B’dos s 197(1)(b); Dom s 213(1)(b); Gren s 213(1)(b); St L s 213(1)(b); St V s
213(1)(b); T’dad s 214(1)(b).
7 Ang s 161(1)(b); Ant s 213(1)(b); B’dos s 197(1)(b); Dom s 213(1)(b); Gren s 213(1)(b); Mont s 213(1)(b); St L s
213(1)(b); St V s 213(1)(b); T’dad s 214(1)(b).
8 Ang s 7(1)(e); Ant s 5(1)(b); B’dos s 5(1)(b); Dom s 5(1)(b); Gren s 5(1)(b); Guy s 5(1)(b); Mont s 5(1)(b); St L s
5(1)(b); St V s 5(1)(b); T’dad s 9(1)(b).
9 Ang s 161(1)(c); Ant s 213(1)(c); B’dos s 197(1)(c); Dom s 213(1)(c); Gren s 213(1)(c); Mont s 213(1)(c); St L s
213(1)(c); St V s 213(1)(c); T’dad s 214(1)(c).
10 Ang s 161(1)(d); Ant s 213(1)(d); B’dos s 197(1)(d); Dom s 213(1)(d); Gren s 213(1)(d); Mont s 213(1)(d); St L s
213(1)(d); St V s 213(1)(d); T’dad s 214(1)(d).
11 Ang s 161(1)(e); Ant s 213(1)(e); B’dos s 197(1)(e); Dom s 213(1)(e); Gren s 213(1)(e); Mont s 213(1)(e); St L s
213(1)(e); St V s 213(1)(e); T’dad s 214(1)(e).
12 Ang s 161(1)(f); Ant s 213(1)(f); B’dos s 197(1)(f); Dom s 213(1)(f); Gren s 213(1)(f); Mont s 213(1)(f); St L s
213(1)(f); St V s 213(1)(f); T’dad s 214(1)(f).
13 Ang s 161(1)(g); Ant s 213(1)(g); B’dos s 197(1)(g); Dom s 213(1)(g); Gren s 213(1)(g); Mont s 213(1)(g); St L s
213(1)(g); St V s 213(1)(g); T’dad s 214(1)(g).
14 Ang s 161(1)(h); Ant s 213(1)(h); B’dos s 197(1)(h); Dom s 213(1)(h); Gren s 213(1)(h); Mont s 213(1)(h); St L s
213(1)(h); St V s 213(1)(h); T’dad s 214(1)(h).
15 Ang s 161(1)(i); Ant s 213(1)(i); B’dos s 197(1)(i); Dom s 213(1)(i); Gren s 213(1)(i); Mont s 213(1)(i); St L s
213(1)(i); St V s 213(1)(i); T’dad s 214(1)(i).
16 Ang s 161(1)(j); Ant s 213(1)(j); B’dos s 197(1)(j); Dom s 213(1)(j); Gren s 213(1)(j); Mont s 213(1)(j); St L s
213(1)(j); St V s 213(1)(j); T’dad s 214(1)(j).
17 Ang s 161(1)(k); Ant s 213(1)(k); B’dos s 197(1)(k); Dom s 213(1)(k); Gren s 213(1)(k); Mont s 213(1)(k); St L s
213(1)(k); St V s 213(1)(k); T’dad s 214(1)(k).
213(1)(k); St V s 213(1)(k); T’dad s 214(1)(k).
213(1)(k); St V s 213(1)(k); T’dad s 214(1)(k).
213(1)(k); St V s 213(1)(k); T’dad s 214(1)(k).
21 Ang s 7(1)(h); Ant s 5(1)(e); B’dos s 5(1)(e); Dom s 5(1)(e); Gren s 5(1)(e); Guy s 5(1)(e); J’ca s 8(1)(f); Mont s
5(1)(e); St L s 5(1)(e); St V s 5(1)(e); T’dad s 9(1)(f).
22 Ang s 161(1)(l); Ant s 213(1)(l); B’dos s 197(1)(l); Dom s 213(1)(l); Gren s 213(1)(l); Mont s 213(1)(l); St L s
213(1)(l); St V s 213(1)(l); T’dad s 214(1)(l).
V s 5(2); T’dad s 9(2).
24 Ang s 161(1)(m); Ant s 213(1)(m); B’dos s 197(1)(m); Dom s 213(1)(m); Gren s 213(1)(m); Mont s 213(1)(m); St
L s 213(1)(m); St V s 213(1)(m); T’dad s 214(1)(m).
25 Ang s 161(2); Ant s 213(2); B’dos s 197(2); Dom s 213(2); Gren s 213(2); St L s 213(2); Mont s 213(2); St V s
213(2); T’dad s 214(2).
213(2); T’dad s 214(2).
213(3); T’dad s 214(3).
28 B’dos s 198(1).
29 B’dos s 198(1)(a).
30 B’dos s 198(1)(b)(i).
31 B’dos s 198(1)(b)(ii).
32 B’dos s 198(2).
33 B’dos s 198(3).
34 B’dos s 200.
215(1).
36 Ant ss 214(1) and 114; B’dos ss 201(1) and 112; Dom ss 214(1) and 114; Gren ss 214(1) and 114; Mont ss 214(1)
and 114; St L ss 214(1) and 114; St V ss 214(1) and 114; T’dad ss 215(1) and 116.
215(2).
215(2).
39 Ant s 214(2); B’dos s 201(2); Dom s 214(2); Gren s 214(2); Mont s 214 (2); St L s 214(2); St V s 214(2); T’dad s
215(2).
216(1).
216(3).
216(2).
216(4).
216(1); T’dad s 217(1).
217(1); T’dad s 218(1).
48 Ang s 163(4); Ant s 217(2); B’dos s 204(2); Dom s 217(2); Gren s 217(2); St L s 217(2); St V s 217(2); T’dad s
218(2).
217(2); T’dad s 218(2).
217(3)(a); St V s 217(3)(a); T’dad s 218(3)(a).
217(3)(b); St V s 217(3)(b); T’dad s 218(3)(b).
219(1).
219(1).
219(2).
219(3).
219(4).
57 Bah s 29(2).
58 Bel s 13; J’ca s 10(1); St C/N s 11(3).
59 Bah s 29; Bel s 13; J’ca s 10; St C/N s 11.
60 J’ca s 10(2).
61 St C/N s 11(4)(a).
62 St C/N s 11(4)(b).
63 (1939) 61 CLR 457, 504 HCA. See also Ngurli Ltd v McCaan (1953) 90 CLR 425, 439 HCA.
64 [1900] 1 Ch 656 Eng CA.
65 [1900] 1 Ch 656, 671 Eng CA.
66 [1900] 1 Ch 656 Eng CA.
67 [1927] 2 KB 9 Eng CA.
68 [1927] 2 KB 9, 23 Eng CA.
69 [1927] 2 KB 9 Eng CA.
70 [2007] 2 BCLC 483 PC.
71 [1927] 2 KB 9 CA.
72 [2007] 2 BCLC 483 PC.
73 See Sidebottom v Kershaw, Leese & Co Ltd [1920] 1 Ch 154, 165–166, 171–172.
74 [1900] 1 Ch 656, 671 Eng CA.
75 [1950] 2 All ER 1120 Eng CA.
76 [1900] 1 Ch 656 Eng CA.
77 [1950] 2 All ER 1120, 1126 Eng CA.
78 [1950] 2 All ER 1120 Eng CA.
79 [1950] 2 All ER 1120, 1126 Eng CA.
80 Davies (ed) (8th edn London: 2008) 661.
81 [1919] 1 Ch 290.
82 [1920] 2 Ch 124.
83 [1919] 1 Ch 290.
84 [1920] 2 Ch 124.
85 [1920] 1 Ch 154 Eng CA.
86 [1919] 1 Ch 290.
87 [1920] 1 Ch 154, 163 Eng CA.
88 [1927] 2 KB 9, 19 and 24 Eng CA.

89 [1920] 2 Ch 124.
90 (1995) 127 ALR 417.
91 [2007] 2 BCLC 483 PC.
92 (1995) 127 ALR 417.
93 Ant ss 219–225; B’dos ss 206–212; Dom ss 219–225; Gren ss 219–225; Mont ss 219–225; St L ss 219–225; St V
ss 219–225; T’dad ss 220–226.
94 [1904] 2 Ch 268.
95 (1867) LR 4 Eq. 341. See also New Zealand Gold Extraction Co (Newbury Vautin Process) Ltd v Peacock
[1894] 1 QB 662; Imperial Bank of China v Bank of Hindustan (1868) LR 6 Eq 91.
96 [1904] 2 Ch 268, 274.
97 [1935] 1 Ch 567 Eng CA.
98 [1935] 1 Ch 567, 573 Eng CA.
99 [1935] 1 Ch 567, 577 Eng CA
100 [1935] 1 Ch 567 Eng CA.
102 [1975] 1 SCR 411 SCC.
103 Viz, Ant s 219; B’dos s 206; Dom s 219; Gren s 219; Mont s 219; St L s 219; St V s 219; T’dad s 220.
104 [1975] 1 SCR 411, 416–417 SCC.
105 [1975] 1 SCR 411, 420–421 SCC.
106 [1975] 1 SCR 41, 416 SCC.
107 [1975] 1 SCR 411 SCC.
108 See, e.g., Re Yustin Construction Ltd (1986) 57 CBR (NS) 320 Ont SC; Guaranty Properties Ltd v R (1990) 47
BLR 197; Loeb Inc v Cooper (1991) 3 BLR (2d) 8 Ont Gen Div; Rendall v Royal Insurance Can 34 OR (3d) 762
Ont Gen Div, affd (1998) 79 ACWS (3d) 374 Ont CA; 1184760 Alberta Ltd v Falconbridge Ltd (2006) 20 BLR
(4th) 6 Ont SCJ.
225(2)(a); T’dad s 226(2)(a).
225(2)(b); T’dad s 226(2)(b).
225(2)(c); T’dad s 226(2)(c).
225(2)(d); T’dad s 226(2)(d).
225(2)(e); T’dad s 226(2)(e).
225(2)(f); T’dad s 226(2)(f).
225(2)(g); T’dad s 226(2)(g).
116 Re Yustin Construction Ltd (1986) 57 CBR (NS) 320 Ont SC.
117 Ant ss 220–221; B’dos ss 207–208; Dom ss 220–221; Gren ss 220–221; Mont ss 220–221; St L ss 220–221; St V ss
220–221; T’dad ss 221–222.
221(1).
221(1).
220(1)(a); T’dad s 221(1)(a).
220(1)(b); T’dad s 221(1)(b).
220(1)(c); T’dad s 221(1)(c).
220(1)(c); T’dad s 221(1)(c).
220(1)(d); T’dad s 221(1)(d).
220(1)(e); T’dad s 221(1)(e).
220(1)(f); T’dad s 221(1)(f).
220(1)(f); T’dad s 221(1)(f).
220(1)(g); T’dad s 221(1)(g).
221(2).
221(2).
221(2).
221(2).
222(1).
222(1).
221(2)(a); T’dad s 222(2)(a).
221(2)(b); T’dad s 222(2)(b).
222(2).
222(3).
222(4).
222(5).
222(5).
222(6).
223(a).
149 Ant s 222(b); B’dos s 209(b); Dom s 222(b); Gren s 222(b); Mont s 222(b); St L s 222(b); St V s 222(b); T’dad s
223(b).
150 Ant s 222(b)(i); B’dos s 209(b)(i); Dom s 222(b)(i); Gren s 222(b)(i); Mont s 222(b)(i); St L s 222(b)(i); St V s
222(b)(i); T’dad s 223(b)(i).
151 Ant s 222(b)(ii); B’dos s 209(b)(ii); Dom s 222(b)(ii); Gren s 222(b)(ii); Mont s 222(b)(ii); St L s 222(b)(ii); St V
s 222(b)(ii); T’dad s 223(b)(ii).
152 Ant s 222(b)(iii); B’dos s 209(b)(iii); Dom s 222(b)(iii); Gren s 222(b)(iii); Mont s 222(b)(iii); St L s 222(b)(iii);
St V s 222(b)(iii); T’dad s 223(b)(iii).
224(a).
155 Ant s 223(b)(i); B’dos s 210(b)(i); Dom s 223(b)(i); Gren s 223(b)(i); Mont s 223(b)(i); St L s 223(b)(i); St V s
223(b)(i); T’dad s 224(b)(i).
156 Ant s 223(b)(ii); B’dos s 210(b)(ii); Dom s 223(b)(ii); Gren s 223(b)(ii); Mont s 223(b)(ii); St L s 223(b)(ii); St V
s 223(b)(ii); T’dad s 224(b)(ii).
157 Ant s 223(b)(iii); B’dos s 210(b)(iii); Dom s 223(b)(iii); Gren s 223(b)(iii); Mont s 223(b)(iii); St L s 223(b)(iii);
St V s 223(b)(iii); T’dad 224(b)(iii).
225(1).
160 Ant ss 224(1) and 69; B’dos ss 211(1) and 66; Dom ss 224(1) and 69; Gren ss 224(1) and 69; Mont ss 224(1) and
69; St L ss 224(1) and 69; St V ss 224(1) and 69; T’dad ss 225(1) and 71.
225(2).
224(2)(a); T’dad s 225(2)(a).
163 Ant s 224(2)(a)(i); B’dos s 211(2)(a)(i); Dom s 224(2)(a)(i); Gren s 224(2)(a)(i); Mont s 224(2)(a)(i); St L s 224(2)
(a)(i); St V s 224(2)(a)(i); T’dad s 225(2)(a)(i).
164 Ant s 224(2)(a)(ii); B’dos s 211(2)(a)(ii); Dom s 224(2)(a)(ii); Gren s 224(2)(a)(ii); Mont s 224(2)(a)(ii); St L s
224(2)(a)(ii); St V s 224(2)(a)(ii); T’dad s 225(2)(a)(ii).
165 Ant s 224(2)(b)(i); B’dos s 211(2)(b)(i); Dom s 224(2)(b)(i); Gren s 224(2)(b)(i); Mont s 224(2)(b)(i); St L s 224(2)
(b)(i); St V s 224(2)(b)(i); T’dad s 225(2)(b)(i).
166 Ant s 224(2)(b)(ii); B’dos s 211(2)(b)(ii); Dom s 224(2)(b)(ii); Gren s 224(2)(b)(ii); Mont s 224(2)(b)(ii); St L s
224(2)(b)(ii); St V s 224(2)(b)(ii); T’dad s 225(2)(b)(ii).
224(3)(a); T’dad s 225(3)(a).
224(3)(b); T’dad s 225(3)(b).
224(3)(c); T’dad s 225(3)(c).
226(1).
171 Ant s 225(2)(a); B’dos s 212(2)(a); Dom s 225(2)(a); Gren s 225(2)(a);Mont s 225(2)(a); St L s 225(2)(a); St V s
225(2)(a); T’dad s 226(2)(a).
172 Bah s 152.
173 Bah s 152.
174 Bah s 152.
175 Bah s 153(1).
176 Bah s 153(1) and (2).
177 Bah s 153(2).
178 Bah s 153(3).
179 Bah s 153(3).
180 Bah s 153(3)(a).
181 Bah s 153(3)(b)(i).
182 Bah s 153(3)(b)(ii).
183 Bah s 153(3)(c).
184 Bah s 153(3)(d).
185 Bah s 153(3)(e).
186 Bah s 153(5)(a).
187 Bah s 153(5)(b).
188 Bah s 153(5)(c).
189 Bah s 153(5)(a).
190 Bah s 153(5)(a).
191 Bah s 153(5)(d).
192 Bah s 153(5)(d)(i).
193 Bah s 153(5)(d)(ii).

194 Bah s 153(5)(d)(iii).
195 Bah s 153(5)(e).
196 Bah s 153(5)(f).
197 Bah s 153(6).
198 Bah s 154(1).
199 Bah s 154(1).
200 Bah s 154(1).
201 Bah s 154(2).
202 Bah s 154(2)(a).
203 Bah s 154(2)(b)(i).
204 Bah s 154(2)(b)(ii).
205 Bah s 154(2)(c).
206 Bah s 154(4).
207 Bah s 154(5).
208 Bah s 154(5)(a).
209 Bah s 154(5)(b).
210 Bah s 154(5)(c).
211 Bah s 154(6).
212 Bah s 154(7).
213 Bah s 154(8).
214 Bah s 155(1).
215 Bah s 155(2)(a).
216 Bah s 155(2)(b).
217 Bah s 155(2)(c).
218 Bah s 155(2)(d).
219 Bah s 155(2)(e).

220 Bah s 155(3)(a).
221 Bah s 155(3)(b).
222 Bah s 155(3)(b)(i).
223 Bah s 155(3)(b)(ii).
224 Bah s 155(4)(a).
225 Bah s 155(4)(b).
226 See Ant s 236; B’dos s 223; Dom s 236; Mont s 236; St L s 236; St V s 236; T’dad s 237.
227 Ant s 236(1)(a); B’dos s 223(1)(a); Dom s 236(1)(a); Gren s 236(1); Mont s 236(1)(a); St L s 236(1)(a); St V s
236(1)(a); T’dad s 237(1)(a).
236(1)(b); T’dad s 237(1)(b).
236(1)(c); T’dad s 237(1)(c).
230 Re Canadian Airlines Corp. [2000] 10 WWR 269 Alta QB.
237(2).
236(3)(a); T’dad s 237(3)(a).
236(3)(b); T’dad s 237(3)(b).
237(4).
237(5).
237(6).
237(7).
239 Bah s 158.
240 Bel s 121; Guy ss 217–220; J’ca ss 206–211; St C/N ss 125–127.
241 Sneath v Valley Gold Ltd [1893] 1 Ch 447, 494 Eng CA; Mercantile Investment and General Trust Co v
International Co of Mexico [1893] 1 Ch 484n, 489, 491 Eng CA.
242 Re Guardian Assurance Co [1917] 1 Ch 431 Eng CA.
243 See, e.g., Federated Strategic Income Fund et al v Mechala Group Jamaica Ltd et al (Unreported) Supreme
Court Civil Appeal no 47 of 2000 J’ca SC.
238(3).
237(1)(a); T’dad s 238(1)(a).
237(1)(b); T’dad s 238(1)(b).
237(1)(c); T’dad s 238(1)(c).
237(1)(d); T’dad s 238(1)(d).
237(1)(e); T’dad s 238(1)(e).
237(1)(f); T’dad s 238(1)(f).
237(1)(g); T’dad s 238(1)(g).
252 Re West Humber Apartments Ltd (1968) 2 DLR (3d) 110 Ont HC.
253 Ibid ; Grouse Mountain Resorts v Angeli (1989) 42 BLR 219 BC CA.
254 Re Rideau Carleton Raceway Holdings Ltd (1984) 28 BLR 89 Ont Div Ct.
255 Bah s 158(1)(a).

256 Bah s 158(10(b).
257 Bah s 158(1)(c).
258 Bah s 158(1)(d).
238(3).
238(3).
238(3).
262 [1994] 10 WWR 127 Alta QB.
263 (2005) 12 BLR (4th) 128 Alta QB.
238(2).
237(2)(a); T’dad s 238(2)(a).
237(2)(b); T’dad s 238(2)(b).
267 The procedure to be followed is extensively discussed in Savage v Amoco Acquisition Co (1988) 40 BLR 188
Alta CA.
268 Ant s 237(4)(b); B’dos s 224(4)(b); Dom s 237(4)(b); Gren s 237(4)(b); Mont 237(4)(b); St L s 237(4)(b); St V s
237(4)(b); T’dad s 238(4)(b).
269 Savage v Amoco Acquisition Co (1988) 40 BLR 188 Alta CA.
238(5).
238(5).
272 Bah s 158(2).
273 Bah s 158(3).

238(4). Also Bah s 158(4).
237(4)(a); T’dad s 238(4)(a). Also, Bah s 167(4)(a).
237(4)(b); T’dad s 238(4)(b). Also Bah s 167(4)(b).
237(4)(c); T’dad s 238(4)(c). Also Bah s 167(4)(c). Discussed in Chapter 18.
227(2).
227(2).
280 (1998) 40 BLR (2d) 210 Ont Gen Div [Commercial List].
237(4)(d); T’dad s 238(4)(d). Also Bah s 158(4)(e).
282 [1891] 1 Ch 213 CA.
283 See, e.g., Standard Manufacturing Co v Baird (1984), 5 DLR (4th) 697 Nfld TD; Re Trizec Corp [1994] 10
WWR 127 Alta QB; Re Bolivar Gold Corp (2006) 16 BLR (4th) 10 YT CA, affg (2006) 16 BLR (4th) 17 YT SC.
284 (1951) 33 CBR 38 Que SC.
285 (1999) 15 CBR (4th) 311 Ont SCJ [Commercial List].
286 [1972] 3 OR 435 Ont HC.
238(6).
238(6).
238(7).
238(8).
291 Bah s 158(5).
292 Bah s 158(6).
293 Bah s 158(7).
294 Bah s 158(7)(a).
295 Bah s 158(7)(b).
296 Bah s 158(7)(c).
297 Bah s 158(8).
298 Bah s 158(9).
299 Bah s 158(10).
300 Bah s 158(11).

Chapter 26
Financial Disclosure and Audit
Requirements
Introduction
As the Report of the Working Party on the Harmonisation of Company Law in
the Caribbean Community has noted, the imposition of mandatory
requirements upon companies with respect to the keeping and disclosure of
proper accounts in which the company’s assets and liabilities are set out has
always been a feature of regional company legislation.1 The objective of these
requirements is to ensure that full and accurate financial information which is
essential to assessing the success or otherwise of the company is disclosed
publicly. In this way, the law aims to protect the interests of shareholders,
those who manage the company, creditors and those wishing to invest in the
company.
Disclosure Requirements
Maintaining financial records
A logical first step in establishing a system of financial disclosure by

companies is the imposition of an obligation on companies to prepare and
maintain accounting and financial records. It is for this reason that the
Companies Acts in Anguilla, Antigua, Barbados, Dominica, Grenada,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago have included
provisions mandating companies to prepare and maintain adequate accounting
records2 or, in the Guyanese and Jamaican Acts, to prepare and maintain
proper books and documents of account as are necessary to give a true and
fair view of the state of the company’s affairs and to explain its transactions.3
In Guyana and Jamaica, these books and documents of account must be in
respect of all sums received and expended by the company and the matters in
respect of which the receipt and expenditure takes place, all sales and
purchases of goods by the company, and the assets and liabilities of the
company.4
The Acts in Anguilla, Antigua, Barbados, Dominica, Grenada, Guyana,
Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago require that
accounting records and books and documents of account must be kept at the
registered office of the company or at such other place as the directors think
fit.5 In any event, under these Acts, accounting records and books and
documents of account must at all times be open to inspection by the directors.6
Further, under these Acts, where accounting records or books and
documents of account are kept at a place outside the country concerned, such
accounting records and accounts and returns in respect of the business dealt
with in those books and documents of account as will disclose with reasonable
accuracy the financial position of that business must be sent for and kept at a
place in the country concerned.7 These accounts and returns must be sent at
intervals not exceeding six months.8 They must be at all times open to
inspection by the directors and must enable the preparation of the company’s
balance sheet and its profit and loss account or income and expenditure
account.9
Under the Guyanese and Jamaican Acts, exemption from the obligation to
send and keep such accounts and returns may be granted by ministerial order
on satisfaction that it is just to do so.10
Annual accounts
Consistent with the legislative objective of full financial disclosure, one of the
core obligations of the company to its shareholders set out in the Acts in
Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago is the
obligation to provide shareholders with an annual report card on the financial
position of the company.11 In discharge of this obligation, the directors of a
company in Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada,
must place before the shareholders at every annual meeting of the
shareholders of the company comparative financial statements,12 the report of
the auditor, if any,13 and any further information respecting the financial
position of the company.14 In Guyana and Jamaica, the accounts which must be
laid before the shareholders include a profit and loss account or, in the case of
a non-profit company, an income and expenditure account, a balance sheet
with a directors’ report attached and an auditor’s report.15
Comparative financial statements (territories other than

Guyana and Jamaica)

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, comparative
financial statements consist of a balance sheet, a statement of retained
earnings, an income statement and a statement of changes in financial
position.16 These financial statements, like the auditor’s report, must be
prepared in accordance with standards approved by the Institute of Chartered
Accountants of the relevant territory.17 It may be noted that, under these Acts,
the Registrar has discretion, in any particular case, to adjust the period relating
to which comparable financial statements are to be placed before the
shareholders at an annual general meeting.18
The comparative financial statements must be in prescribed form relating
separately to the period that began on the date the company came into
existence and ended not more than twelve months after that date.19 If,
however, the company has completed a financial year, the comparative
financial statements must be in respect of the period that began immediately
after the end of the last period for which financial statements were prepared
and ended not more than twelve months after the beginning of that period.20
Comparative financial statements relating separately to the immediately
preceding financial year must also be placed before shareholders.21 However,
these statements may be omitted if the reason for the omission is set out in the
financial statements or in a note thereto, to be placed before the shareholders
at an annual meting.22
Balance sheet and profit and loss account (Guyana and

Jamaica)
The overriding rule which must be followed in preparing a company’s balance

sheet and profit and loss account in Guyana and Jamaica is that the company’s
balance sheet and profit and loss account must give a true and fair view of the
state of affairs of the company as at the end of its financial year.23 In addition
to this rule, the Companies Acts in both Guyana and Jamaica decree that
every company’s balance sheet and profit and loss account must be prepared
in compliance with general rules set out in the Sixth Schedule to the Act in the
case of Guyana24 and the Seventh Schedule to the Act in the case of Jamaica.25
The foregoing rules do not apply to a company’s profit and loss accounts if
the company has subsidiaries.26 Those rules also do not apply if the profit and
loss account is framed as a consolidated profit and loss accounts dealing with
all or any of the company’s subsidiaries as well as the company and complies
with the statutory requirements relating to consolidated profit and loss
accounts and shows how much of the consolidated profit or loss for the
financial year is dealt with in the company’s accounts.27
The rules on balance sheets and profit and loss accounts in the Sixth
Schedule to the Companies Act in Guyana are lengthy and complex and so it
is not convenient to provide a detailed treatment of these rules. The rules in
Jamaica are less lengthy and complex and can be conveniently examined here.
Three sets of rules are contained in the Seventh Schedule to the Companies
Act in Jamaica that applies to companies generally. The first of these is that the
company’s accounts must be prepared in accordance with generally accepted
accounting principles promulgated by the Institute of Chartered Accountants
of Jamaica, from time to time, or by such other body as the Minister may
prescribe.28 The second is that the company accounts must contain a balance
sheet, a statement of changes in equity, a profit and loss account, a statement
of changes in financial position, notes to the accounts, and such other variation
or addition to the foregoing as may be promulgated by the Institute of
Chartered Accountants of Jamaica.29 The third is that, if accounts prepared in
accordance with the first and second rules do not, in the opinion of the
directors, give a true and fair view of the matters to which they relate, then
the directors may depart from those requirements to such extent as may in
their opinions be necessary to give a true and fair view of these matters.30
Where this is done, particulars of the departure and the reasons for it must be
given in a note to the accounts.31
In both Guyana and Jamaica, on the application or with the consent of a
company’s directors, the matters statutorily required to be stated in a
company’s balance sheet or profit and loss account may be modified with
ministerial permission for the purpose of adapting them to the circumstances
of the company.32
‘Group accounts’ (Jamaica and Guyana)
Special statutory rules apply to the accounts of corporate groups. In both

Guyana and Jamaica, the Companies Act imposes a duty on the directors of a
company that has subsidiaries to prepare, in addition to the accounts of that
company, accounts or statements, called ‘group accounts’,33 dealing with the
state of affairs and profit and loss of that company and the subsidiaries.34
Group accounts, however, are not required where the company is, at the end
of its financial year, the wholly owned subsidiary of another body corporate,35
and in the case of Jamaica, incorporated in that country.36 Also, group accounts
need not deal with a subsidiary if the company’s directors are of the opinion
that (a) it is impracticable, or would be of no real value to members of the
company, in view of the insignificant amounts involved, or would involve
expense or delay out of proportion to the value to members of the company;37
(b) the result would be misleading, or harmful to the business of the company
or any of its subsidiaries;38 or (c) the business of the holding company and that
of the subsidiary are so different that they cannot reasonably be treated as a
single undertaking.39 Where the reason for not dealing in group accounts with
a subsidiary is the ground that the result would be harmful or the ground of
the differences between the business of the holding company and that of the
subsidiary, ministerial approval is required.40
Group accounts must be consolidated accounts comprising a consolidated
balance sheet and profit and loss accounts of the holding company and its
subsidiaries under both Acts.41 Under the Jamaican Act alone, provision is
made for group accounts to be prepared in other forms. That Act provides that
if the directors are of the opinion that it is better for the purpose of presenting
the same or equivalent information about the state of affairs and profit and
loss of the company and its subsidiaries and of so presenting it that it may be
readily appreciated by the company’s members, the group accounts may be
prepared in a form other than consolidated accounts.42 In particular, the group
accounts may consist of more than one set of consolidated accounts dealing
respectively with the company and one group of subsidiaries and with other
groups of subsidiaries.43 Alternatively, the group accounts may consist of
separate accounts dealing with each of the subsidiaries, or of statements
expanding the information about the subsidiaries in the company’s own
accounts, or any combination of those forms.44 Finally, the group accounts may
be wholly or partly incorporated in the company’s own balance sheet and
profit and loss account.45
In preparing group accounts in both Guyana and Jamaica, directors must
comply with certain statutory stipulations. First, group accounts must give a
true and fair view of the state of affairs and the profit and loss of the company
and the subsidiaries dealt with thereby as a whole, so far as concerns members
of the company.46 Second where the financial year of a subsidiary does not
coincide with that of the holding company, the group accounts must, unless
there is ministerial direction to the contrary, deal with the subsidiary’s state of
affairs as at the end of its financial year ending with or last before that of the
holding company, and with the subsidiary’s profit and loss for that financial
year.47 Third, where group accounts are prepared as consolidated accounts,
they must comply with the general rules set out in the Sixth Schedule in the
case of Guyana48 and the Seventh Schedule in the case of Jamaica49 so far as
these rules are applicable. If, however, the group accounts are not prepared as
consolidated accounts, they must give the same or equivalent information as is
required to be given in consolidated accounts.50 It is to be noted that, on
application or with the consent of the company’s directors, ministerial
permission may be given to modify these requirements in relation to the
company concerned for the purpose of adapting them to the circumstances of
the company.51
The final stipulation relates to the setting of the financial year. The rule here
is that the holding company’s directors have a duty to secure that, except
where in their opinion there are good reasons against it, the financial year of
each of its subsidiaries coincide with the holding company’s own financial
year.
Ministerial permission may be obtained to extend the financial year of the
holding company or its subsidiary to ensure that the financial year of the
holding company and its subsidiary coincide. In such a case, ministerial
direction may also be given that, in the case of the company concerned, the
submission of accounts to a general meeting, the holding of an annual general
meeting or the making of an annual return is not required in the earlier of
those calendar years.
‘Small group’ accounts (Jamaica)
In Jamaica, there are rules in the Seventh Schedule governing the preparation
of the accounts of ‘small groups’. A small group is a group that qualifies to be
treated as a small group.52 A holding company and its subsidiaries qualify to
be treated as a small group in relation to a financial year if they meet on a
consolidated basis two or more of three criteria set out in Part II of the
Seventh Schedule in the current year, if that is the first financial year of the
company or in the current year and the immediately preceding financial
year.53 The three criteria are (i) that the group’s turnover is less than $80m;54
(ii) that its balance sheet total is less than $60m;55 and (iii) that the total
number of employees is less than fifty.56
Group accounts need not be prepared with respect to a holding company in
relation to a financial year in which the holding company and its subsidiaries
qualify as a small group and the holding company is not disqualified.57 A
group of companies is disqualified if it, or any of the companies within that
group, is a public company, a company licensed under the Banking Act, an
insurance company registered under the Insurance Act, a licensee under the
Securities Act, a company licensed under the financial Institutions Act, or a
society registered under the Building Societies Act or the Cooperative
Societies Act.58
‘Small Company’ Accounts (Jamaica)

In Jamaica also there are special provisions for ‘small companies’. A small
company is defined in rule 1 of the Seventh Schedule as a company that
qualifies to be treated as a small company. A company qualifies to be treated
as a small company if it is not disqualified and satisfies two of three criteria set
out in Part II of the Seventh Schedule in the current year, if that is the first
financial year of the company or in the current year and the immediately
preceding financial year.59 The three criteria are (i) that its turnover is less than
$40m;60 (ii) that its balance sheet total is less than $30m;61 and (iii) that the total
number of employees is less than twenty-five.62 In the meantime, a small
company is disqualified if it is, or was at any time within the financial year to
which the accounts relate, a public company, a company licensed under the
Banking Act, an insurance company registered under the Insurance Act, a
licensee under the Securities Act, a company licensed under the financial
Institutions Act, or a society registered under the Building societies Act or the
Cooperative Societies Act.63
The rules applicable to the preparation of the accounts of a small company
are relatively liberal. The only rule that applies to a small company is that its
accounts be presented in accordance with accounting principles that are
appropriate to its circumstances.64 The accounts must, however, have regard to
the requirement for those accounts to present a true and fair view of the state
of affairs and results of the operation of the company.65
Auditors’ report
The second document which must be placed before shareholders under the
Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada,
Guyana, Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago is
the report of the auditor. It is to be noted that the auditor’s report is necessary
only if the company is one which is required to have its accounts audited or
which has chosen to do so.66 This topic is explored fully under the section in
this chapter on auditors.
Further financial information
Finally, in Anguilla, Antigua, Barbados, the Bahamas, Dominica, Grenada,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, any further
information respecting the financial position of the company and the results of
its operation required by the articles, its bye-laws, or any unanimous
shareholder agreement must be placed before shareholders.67
Exemption from disclosure of financial statements
There is a general provision in the Acts in Anguilla, Antigua, Barbados, the

Bahamas, Dominica, Grenada, Montserrat, St Lucia, St Vincent and Trinidad
and Tobago permitting a company to apply to the Registrar for authorisation
to omit from its financial statements any prescribed item, or to dispense with
the publication of any particular prescribed financial statement.68 Where such
an application is made the Registrar may, if he reasonably believes that
disclosure of the information would be detrimental to the company, permit its
omission on such reasonable conditions as he thinks fit.69
There have been a number of cases decided in Canadian courts dealing with
exemption from disclosure of financial statements from which certain general
principles seem to emerge.70 One such principle is that disclosure is to be
treated as the rule and exemption the exception.71 Another is that detriment to
the company means that the company would be seriously, unfairly and
adversely affected by disclosure.72 Yet another is that the onus is on the
applicant company to show that the requirement that disclosure would be
detrimental to it is satisfied.73 If this is done, the applicant should be granted an
exemption unless those opposing the application satisfy the court that there is
a need for a disclosure in the public interest which overbalances the detriment
to the applicant.74
In Guyana and Jamaica, as has been seen, the matters required to be stated
in any account of the company may be modified by ministerial permission so
as to adapt the requirements to the circumstances of the company.75
Directors’ approval of financial statements

Tobago, the directors of a company must approve the annual financial
statements of their company and that approval must be evidenced by the
signature of one or more directors.76 If the company has an auditor company,
it is barred from issuing, publishing or circulating copies of annual financial
statements unless the financial statements are so approved and signed by the
directors and are accompanied by a report of the auditor of the company.77 It
is to be noted that a director who signs the balance sheet does not do so in his
personal capacity but on behalf of all the directors as a statement to the
shareholders of the company’s assets and liabilities.78
Access to Financial Statements
Shareholder access
Annual financial statements
A company is under an obligation in Anguilla, Antigua, the Bahamas,

Trinidad and Tobago to send copies of annual financial statements to each
shareholder not less than twenty-one days before each general meeting of
shareholders or before the signing of the resolution under the Acts in lieu of
the annual general meeting.79 The company is relieved of this obligation
where a shareholder has informed the company in writing that he does not
wish a copy of the documents in question.80
The obligation to send copies of annual financial statements to each
shareholder has been interpreted to extend to every shareholder, even one
who is not entitled to attend and participate at an annual general meeting.81
On the other hand, the obligation on the company to deliver financial
statements does not impose any personal financial obligation on the directors
of an insolvent company to bear the costs of doing so.82
Summary financial statements
In Antigua, Dominica, Grenada, Montserrat, St Lucia, St Vincent and Trinidad

and Tobago, a public company whose shares or any class of whose shares are
listed need not, in such cases as may be prescribed, and provided any
prescribed conditions are complied with, send copies of annual financial
statements to shareholders, but may instead send them a summary financial
statement.83 The summary financial statement has to be derived from the
company’s annual accounts and the directors’ report must be in the prescribed
form and must contain the prescribed information.84
The summary financial statement has to state that it is only a summary of
the company’s accounts and the directors’ report85 and must contain a
statement of the company’s auditors of their opinion as to whether the
summary financial statement is consistent with those accounts and that report
and complies with all statutory requirements.86 The summary financial
statement has also to state whether the auditors’ report on the annual accounts
was unqualified or qualified, and if it was qualified, set out the report in full
together with any further material needed to understand the qualification.87
Finally, the summary must state whether the auditors’ report on the annual
accounts contained a statement as to (i) the adequacy of the accounting
records or returns;88 (ii) the accounts not agreeing with the records or
returns;89 or (iii) the failure to obtain necessary information or explanations.90
Consolidated financial returns
In Anguilla, Antigua, Barbados, Dominica, Grenada, Montserrat, St Lucia, St

Vincent and Trinidad and Tobago, a company is statutorily required to keep at
its registered office a copy of the financial statements of each of its subsidiaries
the accounts of which are consolidated in the financial statements of the
company.91 These statements are available for examination, upon request, by
shareholders of the company, their agents and legal representatives during the
usual business hours of the company. Shareholders, their agents and their legal
representatives may make extracts from these statements free of charge.92
Shareholders, their agents and their legal representatives may be denied the
right to examine the consolidated financial returns of a company. This may
occur where a company, within fifteen days of a request for such examination,
applies to the court for an order barring the right of any person to make such
examination.93 If the court is satisfied that the examination would be
detrimental to the company or a subsidiary body corporate, the court may bar
such right and make any other order it thinks fit.94 A company making such an
application must give notice of the application to the Registrar and to the
person asking for the examination.95 The Registrar and the person asking for
the examination may appear and be heard in person or by an attorney-at-
law.96
Public access
Annual financial statements
Under the Acts in Acts in Anguilla, Antigua, Barbados, Dominica, Grenada,

Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago every
public company97 and every company whose gross revenues exceed a
statutorily specified amount or whose assets exceed a statutory amount98 must
send a copy of its financial statements to the Registrar.99 It is to be noted,
parenthetically, that the gross revenues and the gross assets of a company
include the gross revenues and assets of its affiliates.100 The copy of the
financial statements must be sent not lest than twenty-one days before each
annual meeting of the shareholders or forthwith after the signing of a
resolution under the acts in lieu of the annual general meeting, and in any
event, not later than fifteen months after the last date when the last preceding
annual meeting should have been held or a resolution in lieu of the meeting
should have been signed.101
Under these Acts, except the Guyana Act, a company may make an
application to the Registrar for exemption from filing a copy of its financial
statements with the Registrar.102 Upon such an application, the Registrar may
grant such an exemption in circumstances prescribed in the relevant
Companies Regulations.103
Interim financial statements

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, every public
company104 and every company whose gross revenues exceed a statutory
amount or whose assets exceed a prescribed statutory amount105 must send
forthwith to the Registrar copies of any interim financial statements or related
documents which it sends to its shareholders.106 Similarly, if such a company is
required to file interim financial statements or related documents with or send
them to a public authority or a recognised stock exchange, it must forthwith
send copies thereof to the Registrar.107
Financial statements of subsidiary companies
Under Acts in Anguilla, Antigua, Barbados, Dominica, Grenada, Montserrat, St

Lucia, St Vincent and Trinidad and Tobago, a subsidiary company is not
required to send copies of any of its financial statements to the Registrar if the
financial statements of its holding company are in consolidated or combined
form and include the accounts of its subsidiary and the consolidated or
combined financial statements of the holding company are included in the
document sent to the Registrar by the holding company in compliance with
the relevant provisions of the Acts.108
Audit Requirements
Audit committees
The Companies Acts in Antigua, Dominica, Grenada, Montserrat, St Lucia, St

Vincent and Trinidad and Tobago provide that a public company must, and
any other company may, have an audit committee composed of not less than
three directors of the company, a majority of whom are not officers or
employees of the company or any of its affiliates.109 The function of the audit
committee is to review the financial statements of the company and report its
findings to the board of directors before these financial statements are
approved by the board.110
The requirement for audit committees is usually justified as providing a
mechanism for buttressing auditor independence.111 As will be seen, although
the shareholders actually appoint the company’s auditor, they usually act on
the advice of the directors who in turn rely on the advice of management.
Management is thus in a position to influence the reappointment of the
auditor and in this way his independence by drawing him into the
‘management team’. The theory behind the audit committee is that it acts as a
buffer between the auditor and management.112
Notwithstanding the theoretical importance of an audit committee, a public
company may apply to the Securities and Exchange Commission for an order
authorising it to dispense with an audit committee.113 If the Commission is
satisfied that the shareholders will not be prejudiced by such an order, it may
permit the company to dispense with an audit committee on such reasonable
conditions as it considers fit.114
The auditor is entitled to receive notice of every meeting of the audit
committee and, at the expense of the company, to attend and be heard.115 The
auditor must attend every meeting of the audit committee held during the
term of his office as auditor that he is requested by a member of the audit
committee to attend.116 Very importantly, the auditor or any member of the
audit committee may call a meeting of the audit committee.117 It is clear from
the foregoing that the auditor is more properly characterised as a de facto
member of the audit committee than as a de jure member.118
Auditors
Role and function of the auditor
Under Commonwealth Caribbean Companies Acts, the shareholders of every

company must appoint an auditor119 unless the company falls within the
category of companies where the shareholders may resolve not to appoint an
auditor.120 The primary function of the auditor is to make a report on the
company’s financial statements to the annual meeting of the shareholders of
the company.121
This function was described by Lord Oliver in the English House of Lords’
decision in Caparo Industries plc v Dickman as follows:122
It is the auditors’ function to ensure, so far as possible, that the financial information as to the company’s
affairs prepared by the directors accurately reflects the company’s position in order, first, to protect the
company itself from the consequences of undetected errors or, possibly, wrongdoing (by, for instance,
declaring dividends out of capital) and, secondly, to provide shareholders with reliable intelligence for the
purpose of enabling them to scrutinise the conduct of the company’s affairs and to exercise their collective
powers to reward or control or remove those to whom that conduct has been confided.
The critical importance of this function in modern company law is admirably

captured in the same judgment of Lord Oliver in Caparo Industries plc v
Dickman where he explained:123
the primary purpose of the statutory requirement that a company’s accounts shall be audited annually is
almost self-evident. The structure of the corporate trading entity, at least in the case of public companies
whose shares are dealt with on an authorized stock exchange, involves the concept of a more or less
widely distributed holding of shares rendering the personal involvement of each individual shareholder in
the day to day management of the enterprise impracticable, with the result that management is necessarily
separated from ownership. The management is confined to a board of directors which operates in a
fiduciary capacity and is answerable to and removable by the shareholders who can act, if they act at all,
only collectively and only through the medium of the general meeting. Hence the legislative provisions
requiring the board annually to give an account of its stewardship to a general meeting of shareholders.
What this dictum highlights is that, as has been seen, the responsibility for
financial disclosure to the shareholders of companies lies with the directors.
However, given the reality of the relationship between shareholders and
directors to the management of the company’s affairs, the reliability of the
financial statements prepared by directors for the general meeting of
shareholders will be significantly enhanced if there is a system of independent
third party verification of these financial statements. The role of the office of
company auditor in company law theory and practice is to provide such a
system.
The independent third party verification explanation of the role and
function of the company auditor stated by Lord Oliver is overtly recognised in
the Companies Acts in Antigua, Dominica, Grenada, Montserrat, St Lucia and
St Vincent. These Acts expressly declare that the main purposes of the
provisions in the Acts on company auditors are ‘to secure that only persons
who are properly supervised and appropriately qualified are appointed
auditors of companies, and that audits by persons so appointed are carried out
properly and with integrity and with a proper degree of independence’.124
Appointment of auditors
The appointment of an auditor is a core obligation of a company to its

shareholders.125 Quite expectedly, therefore, Commonwealth Caribbean
Companies Acts contain provisions carefully regulating the appointment of
company auditors.
auditors must be appointed by ordinary resolution at the first meeting of
shareholders and at each meeting of shareholders at each succeeding annual
meeting to hold office until the close of the next annual meeting.126 An auditor
appointed by the directors at the organisational meeting of the company is
eligible for appointment by the shareholders at a subsequent annual meeting
of shareholders.127 It is to be noted that, if an auditor is not appointed at a
meeting of shareholders, the incumbent auditor continues in office until his
successor is appointed.128
Under the Belizean, Jamaican and St Christopher/Nevis Acts, the first
auditor of a company may be appointed by the directors at any time before
the first annual general meeting.129 An auditor so appointed holds office until
the conclusion of that meeting. Nevertheless, if the directors fail to appoint the
first auditor, the company in general meeting may do so.130
At each general meeting of shareholders, a company must appoint an
auditor to hold office from the conclusion of that meeting, until the conclusion
of the next annual general meeting.131
Under the Jamaican Act, a retiring auditor is deemed reappointed at the
meeting at which he is retiring without any resolution being passed.132
Dispensing with auditor
Generally speaking, it would be expected that all companies’ accounts should

be audited. On the other hand, the costs associated with audit requirements in
some businesses, and in particular smaller businesses, have been cited as
justification for companies to be allowed to dispense with the appointment of
an auditor in some circumstances. This explains the express provisions found
in the Acts in Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago permitting companies to dispense
with the appointment of an auditor.133
Under these Acts in, the shareholders of a public company, or a company
whose gross revenues exceed a statutorily specified amount or whose assets
exceed a statutory amount may pass a resolution dispensing with the
appointment of an auditor.134 For such a resolution to be legally effective it
must have the consent of all the shareholders of the company, including
shareholders who are not otherwise entitled to vote.135 Such a resolution is
valid only until the next succeeding annual meeting of shareholders.136
There is no express provision in the Jamaican Act permitting shareholders
to dispense with the appointment of an auditor. However, that Act does
provide for exemption from the provision of audited reports which by
necessary implication permits shareholders to dispense with the appointment
of an auditor.137 Such an exemption is available to a ‘small company’ which
has passed a unanimous resolution at a general meeting of the company
exempting it from providing audited reports required under the Act with
respect to the financial year to which the resolution relates.138
The ‘small company’ exemption under the Jamaican Act is not available to
certain statutorily specified small companies. These include a small company
that is a public company, a private company whose articles provide otherwise,
a company licensed under the Banking Act, an insurance company registered
under the Insurance Act, a company registered under the securities Act, a
company registered under the Financial Institutions Act, a society registered
under the Building Societies Act or the Cooperative Societies Act, or a
subsidiary of a company falling within any of the foregoing categories.139
The same objective of dispensing with the appointment of an auditor by
certain companies is achieved in Anguilla by the Act in that country restricting
the obligation on a company to appoint an auditor to companies which are
public companies.140 The Act in St Christopher/Nevis employs a similar
legislative technique. Under that Act, the obligation on a company to appoint
an auditor rests only on a public company, a company whose articles require it
to do so, or a company which is required to do so by a resolution of that
company in general meeting.141
Auditors’ qualifications
The Companies Acts in the Commonwealth Caribbean contain express

stipulations as to those who qualify for appointment as auditors.142 There are
important differences in the requirements under the various Acts.
The stipulations in the Acts in Anguilla, Antigua, Dominica, Grenada,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago are similar. These
Acts provide that, for a person to be eligible for appointment as auditor of a
company, he must be a practising member of a recognised supervisory body143
and be eligible for the appointment under the rules of that body.144 A
‘recognised supervisory body’ is defined as a recognised accounting body
approved by the Registrar.145
It is to be noted that, under these Acts, either an individual or a firm may be
appointed as a company auditor.146 It should also be noted that, in Trinidad and
Tobago, a company or body corporate may not be appointed an auditor of a
company unless there is in force in relation to that company or body corporate
a policy of insurance which covers liability in respect of professional
negligence.147
Under the Act in the Bahamas, only an individual is qualified for
appointment as an auditor of a company.148 Such an individual must, however,
be a professionally qualified auditor149 or an accountant licensed to practise as
such under the Bahamas Public Accountants Act.150
In Barbados and Guyana, an individual qualifies for appointment as auditor
if he is a member of the Institute of Chartered Accountants of the relevant
country and holds a practising certificate of that institute.151 In Barbados also, a
body corporate may qualify for appointment as an auditor. But, to so qualify,
not less than 75 per cent of the persons who have responsibility for the
governance and affairs of that body corporate must satisfy the requirements
for appointment as an individual152 and the principal business of the body
corporate must be the business of providing accounting and auditing
services.153
In Antigua, the Bahamas, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia St Vincent and Trinidad and Tobago a person may also be
appointed an auditor if he is for the time being authorised to be appointed as
an auditor of a company.154 To be authorised to be appointed an auditor of a
company, an individual must apply to the relevant Minister for an
authorisation to be so appointed.155 Upon such application, the Minister may,
after consultation with the relevant institute, give such authorisation by
instrument in writing if the applicant is in the opinion of the Minister suitably
qualified for such an appointment by reason of his knowledge and
experience,156 and was in practice in the relevant country as an auditor on the
commencement of the Act in question.157
The requirements in Jamaica are straightforward. Section 155 of the
Jamaican Act provides that a person shall not be qualified for appointment as
auditor unless he is a registered public accountant as defined by section 2 of
the Jamaican Public Accountancy Act. The provision in the St
Christopher/Nevis Act is similarly straightforward. Section 113(1) of that
provides that ‘no person shall be qualified for appointment as auditor of a
company… unless he is an accountant’.
There is no provision in the Belize Act for any required qualification for
appointment as auditor of a company.
Disqualification from appointment for non-independence
One of the most important issues relating to auditors in modern company law
concerns their independence. This is the main justification for the provisions in
regional Companies Acts expressly disqualifying a person from acting as an
auditor on the grounds of non-independence.
Bahamas, Barbados and Guyana
The provisions in the Bahamas, Barbados and Guyana are the most extensive.
The Companies Acts in these countries expressly provide that an individual (or
a body corporate in Barbados) is not qualified to be an auditor of a company if
he is not independent of the company, its affiliated companies, and of the
directors and officers of the company and its affiliated companies.158 The
question of whether or not an individual is independent is a question of fact to
be determined having regard to all the circumstances.159 This notwithstanding,
an individual is presumed not to be independent if he or his business partner
(a) is a business partner, a director, an officer or an employee of the company
or an employee of the company or any of its affiliates, or a business partner of
any director, officer or employee of any such company or its affiliates;160 (b)
beneficially owns or controls, directly or indirectly, a material interest in the
shares or debentures of the company or any of its affiliates;161 or (c) has been a
receiver, receiver-manager, liquidator or trustee in bankruptcy of the company
or any of its affiliates within two years of his proposed appointment as auditor
of the company.162 It is to be noted that the provision of secretarial services by
or on behalf of an individual or his business partner by itself is not to be
treated as depriving an individual or his business partner of his
independence.163
An auditor who becomes disqualified subsequent to his appointment must
resign forthwith after he becomes aware of his disqualification.164 In any
event, an interested person may apply to the court for an order declaring an
auditor disqualified and the office of auditor vacant.165 By the same token, an
interested person may apply to the court for an order exempting an auditor
from disqualification. Upon such application, the court has the power, if it is
satisfied that an exemption would not adversely affect the shareholders, to
make an exemption order on such terms as it thinks fit.166 The order may be
given retroactive effect.167
Anguilla, Antigua, Dominica, Grenada, Montserrat, St Lucia, St

Vincent and Trinidad and Tobago
The provisions in the Acts in Anguilla, Antigua, Dominica, Grenada,

Montserrat, St Lucia, St Vincent and Trinidad and Tobago are not as extensive
as those in the Bahamas, Barbados and Guyana. Under these Acts, except in
Anguilla, the side notes to the relevant provisions read ‘ineligibility on ground
of lack of independence’. The actual provisions, however, make no express
reference to non-independence as a ground for ineligibility. The provisions
merely enact that a person is ineligible for appointment as auditor of a
company if he is an officer or employee of the company or a partner or
employee of such a person,168 or a partnership of which such a person is an
employee.169 Nor is a person eligible if any of these grounds apply in relation
to any associated undertaking170 of the company.171 A person is also ineligible
for appointment if there exists between him and any associate of his and the
company or any associated undertaking a connection of any description as
may be specified in the relevant Companies Regulations made pursuant to the
Acts.172
A person is forbidden acting as auditor of a company, under these Acts, if he
is ineligible for appointment to the office.173 If during his term of office an
auditor becomes ineligible for appointment to the office, he must immediately
vacate office and give notice in writing to the company concerned that he has
vacated it by reason of his ineligibility.174 Failing to do so is a criminal
offence.175 It is noteworthy that in proceedings against a person for such an
offence, under the Acts in Antigua, Dominica, Grenada, Montserrat, St Lucia
and St Vincent, it is a defence for him to show that he did not know and had
no reason to know that he was or had become ineligible for appointment.176
Jamaican and St Christopher/Nevis
The provisions in the Jamaican and St Christopher/Nevis Acts are the least
extensive.177 These Acts simply decree that none of the persons included in a
statutory list shall be qualified for appointment as auditor of a company.
Included in this list is an officer or servant of the company,178 a person who is a
partner of or in the employment of an officer or servant of the company,179
and a body corporate ( Jamaica).180
Cessation of office
Another very important safeguard in maintaining the independence and

integrity of the role of an auditor is that his removal should be rendered
relatively difficult and that shareholder control of the removal process be
enhanced. It is against this backdrop that the provisions in Commonwealth
Caribbean Companies Acts on the cessation of office of auditor are best
understood.
an auditor ceases to hold office when he dies or resigns.181 It may be observed
in this regard that a resignation of an auditor becomes effective at the time a
written resignation is sent to the company or at the time specified in the
resignation, whichever is the later date.182 Under the Acts also, an auditor,
other than a court appointed auditor, ceases to hold office where the
shareholders of a company remove him by ordinary resolution at a special
meeting.183
In Barbados, where a company auditor is a body corporate, the body
corporate ceases to hold office if the body corporate is wound up or
dissolved,184 goes into receivership185 or is removed by ordinary resolution at a
special meeting.186
There is no express provision in the Jamaican Act specifying the
circumstances in which an auditor ceases to hold office. It is submitted that, by
necessary implication, an auditor ceases to hold office under the Jamaican Act
in all the circumstances listed in the other regional Acts.
Filling auditor vacancy
Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada,

Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago
A vacancy created by the removal of an auditor by the shareholders by

ordinary resolution at a special meeting may be filled by shareholders at that
same meeting under the Acts in Anguilla, Antigua, Barbados, Dominica,
Grenada, Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago.187
Under these Acts, as well as the Act in the Bahamas, if the shareholders fail to
fill the vacancy at that meeting, the directors must, unless the articles of the
company provide that a vacancy in the office of auditor be filled only by a
vote of the shareholders,188 forthwith fill the vacancy.189 If there is not a
quorum of directors, the directors then in office must, within twenty-one days
after the vacancy in the office of auditor occurs, call a special meeting of
shareholders to fill the vacancy.190 If the directors fail to call a meeting or if
there are no directors, the meeting may be called by any shareholder.191 It may
be observed that an auditor appointed to fill a vacancy holds office for the
unexpired term of his predecessor.192
In any case in which a company does not have an auditor, other than where
the shareholders have resolved to dispense with the appointment of an
auditor, under the Acts in Anguilla, Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago, the court
may, upon the application of a shareholder, the Registrar, or, in Trinidad and
Tobago, the Securities and Exchange Commission, appoint and fix the
remuneration of an auditor.193 An auditor so appointed holds office until an
auditor is appointed by the shareholders.194
Belize and Jamaica
The provisions for filling an auditor vacancy under the Jamaican Act are
similar in some respects to the provisions in the Belizean Act. In the first place,
under both Acts, where a casual vacancy arises in the office of auditor, the
directors may fill it.195 Until such time as it is filled, however, any surviving or
continuing auditor or auditors may act.196 Secondly, in Jamaica, where at an
annual general meeting no auditor is appointed or reappointed, the Minister
may appoint a person to fill the vacancy.197 In such a case, the company must,
within seven days of the Minister’s power becoming exercisable, give him
notice of this fact.198 Failure so to do renders the company and every officer of
the company who is in default liable to a fine.199 In Belize, where no
appointment of an auditor is made at the annual general meeting, it is the
court, on the application of any member of the company which has the power
to appoint an auditor of the company for the current year.200
Rights and powers of auditors
Right to receive notice of meeting of shareholders

Tobago, the auditor of a company has the right to receive notice of every
meeting of the shareholders of the company and, at the expense of the
company, to attend and be heard at the meeting on matters relating to his
duties as auditors.201 This right is critically important to facilitate the discharge
of the auditor’s statutory duty to make a report to shareholders on the
company’s financial statements.202
Right to be heard on his resignation or removal from office
Anguilla, Antigua, the Bahamas, Barbados, Dominica, Grenada,

Guyana Montserrat, St Lucia, St Vincent and Trinidad and Tobago
An auditor has a right to be heard under the Acts in Anguilla, Antigua, the
Bahamas, Barbados, Dominica, Grenada, Guyana Montserrat, St Lucia, St
Vincent and Trinidad and Tobago in respect of his resignation or removal from
office. Under these Acts, this right arises where an auditor resigns; receives a
notice of a meeting of shareholders called for the purpose of removing him
from office; receives notice or otherwise learns of a meeting of shareholders at
which another person is to be appointed to the office of auditor, whether
because of the resignation or removal of the auditor or because his term of
office has expired or is about to expire; or, receives a notice or otherwise
learns of a meeting of shareholders at which it is proposed to dispense with
the appointment of an auditor. In any of these eventualities, the auditor has a
right to submit to the company a written statement of reasons for his
resignation or why he opposes any proposed action or resolution.203 When it
receives such a statement, the company must forthwith send a copy of the
statement to every shareholder and to the Registrar unless the statement is
included in or attached to a management proxy circular.204
In the Bahamas, Barbados and Guyana, it is further provided that no
individual, or in Barbados, body corporate, may accept appointment, consent
to be appointed or be appointed as auditor if he is replacing an auditor who
has resigned, been removed or whose term of office has expired or is about to
expire, until the individual has requested and received from the former auditor
a written statement of the circumstances and the reasons why, in that auditor’s
opinion, he is to be replaced.205 Be that as it may, an individual otherwise
qualified may accept appointment or consent to be appointed as auditor of a
company if, within fifteen days after making the request from the former
auditor, he does not receive a reply to that request.206
Jamaica
The Jamaican Act contains provisions which are to the same effect as the
provisions in the other regional Acts. With respect to this, the Jamaican Act
provides that special notice is required for a resolution at a company’s annual
general meeting appointing as auditor a person other than a retiring auditor or
providing expressly that a retiring auditor shall not be reappointed.207 On
receipt of such notice, the company must immediately send a copy of the
notice to the retiring auditor.208 Where notice is given of such an intended
resolution, the retiring auditor may make representations of a reasonable
length in writing with respect to the resolution to the company and request
their notification to the members of the company.209
Unless these representations are received by it too late for it to do so, the
company must, in any notice of the resolution given to members of the
company, state the fact of the representations having been made, and send a
copy of the representations to every member of the company to whom notice
of the meeting is sent.210 If, however, the representations are sent too late or
the company defaults in its duty to give notice of the representations, the
auditor may require that the representations be read out at the meeting.211
The need to send out representations or to read them out at a meeting may
be dispensed with by an order of the court.212 Such an order may be made on
the application of either the company or any other person who claims to be
aggrieved and the court is satisfied that the representations rights under
discussion are being abused to secure needless publicity for defamatory
matter.213 It is to be noted that the court has power to order the company’s
costs on an application to be paid in whole or part by the auditor, even though
he is not a party to the application.214
Right to demand information, explanations and access to

records
To assist the auditor in the discharge of his duty, an auditor is given a statutory
right under the Acts in Anguilla, Antigua, the Bahamas, Barbados, Dominica,
Tobago to demand information, explanations and access to records.215 This
right is carefully spelt out in all of these Acts, except the Jamaican Act.
These Acts provide that upon the demand of an auditor of a company, the
present or former directors, officers, employees or agents of the company
must furnish the auditor such information and explanations and such access to
records, documents, books, accounts and vouchers of the company or any of
its subsidiaries as are, in the opinion of the auditor, necessary to enable him to
report in the prescribed manner on the financial statements of the company
and that the directors, officers, employees or agents are reasonably able to
furnish.216 Upon the demand of the auditor also, the directors of the company
must obtain from the present or former directors, officers, employees or
agents of any subsidiary of the company the information and explanations that
these are reasonably able to furnish and that are, in the opinion of the auditor,
necessary to enable him to make the required examination and report. The
directors must furnish the auditor with the information and explanations so
obtained.217
Right to be notified of any detected error

the auditor is entitled to be notified forthwith by a director or officer of a
company of any error or misstatement in a financial statement that the auditor
or a former auditor of the company has reported upon of which the director or
officer becomes aware.218 When the auditor or former auditor of the company
is notified or becomes aware of an error or misstatement in a financial
statement upon which that auditor has reported to the company and, in that
auditor’s opinion the error or misstatement is material, the auditor has to
inform each director of the company accordingly.219 After being so informed,
the directors are required to prepare and issue revised financial statements, or
otherwise inform the shareholders of the error or misstatement.220 If the
company is a public company or a company the gross revenues of which
exceed a statutorily prescribed amount or the assets of which exceed a
statutorily prescribed amount, the directors must also inform the Registrar of
the error or misstatement in the same manner as the directors inform the
shareholders of the error or misstatement.221
Auditor’s duty in the conduct of the audit
Case law standard

Dicta in three leading English cases have been often cited as authority for the
approach which an auditor must bring to the performance of his duty. First, in
Re London & General Bank (No 2),222 Lindley LJ described the duty of the
auditor as follows:
It is no part of an auditor’s duty to give advice, either to directors or shareholders, as to what they ought
to do. An auditor has nothing to do with the prudence or imprudence of making loans without security. It
is nothing to him whether the business of a company is being conducted prudently or imprudently,
profitably or unprofitably. It is nothing to him whether dividends are properly or improperly declared,
provided he discharges his own duty to the shareholders. His business is to ascertain and state the true
financial position of the company at the time of the audit, and his duty is confined to that. But then comes
the question, How is he to ascertain that position? The answer is, By examining the books of the company.
But he does not discharge his duty by doing this without inquiry and without taking any trouble to see
that the books themselves shew the company’s true position. He must take reasonable care to ascertain that
they do so. Unless he does this, his audit would be worse than an idle farce. Assuming the books to be so
kept as to shew the true position of the company, the auditor has to frame a balance-sheet shewing that
position according to the books and to certify that the balance-sheet presented is correct in that sense. But
his first duty is to examine the books, not merely for the purpose of ascertaining what they do shew, but
also for the purpose of satisfying himself that they shew the true financial position of the company… An
auditor, however, is not bound to do more than exercise reasonable care and skill in making inquiries and
investigations. He is not an insurer; he does not guarantee that the books do correctly shew the position of
the company’s affairs; he does not even guarantee that his balance sheet is accurate according to the books
of the company. If he did, he would be responsible for error on his part, even if he were himself deceived
without any want of reasonable care on his part, say, by the fraudulent concealment of a book from him.
His obligation is not so onerous as this. Such I take to be the duty of the auditor: he must be honest—i.e.,
he must not certify what he does not believe to be true, and he must take reasonable care and skill before
he believes that what he certifies is true. What is reasonable care in any particular case must depend upon
the circumstances of that case. Where there is nothing to excite suspicion very little inquiry will be
reasonably sufficient, and in practice I believe businessmen select a few cases at haphazard, see that they
are right, and assume that others like them are correct also. Where suspicion is aroused more care is
obviously necessary; but, still, an auditor is not bound to exercise more than reasonable care and skill,
even in a case of suspicion, and he is perfectly justified in acting on the opinion of an expert where special
knowledge is required.
This minimalist approach to the discharge of the duties of an auditor was

relied on in the second case of Re Kingston Cotton Mill Co (No 2),223 by Lopes
LJ where he opined as follows:224
It is the duty of an auditor to bear on the work he has to perform that skill, care, and caution which a
reasonably competent, careful and cautious auditor would use. What is reasonable skill, care and caution
must depend on the particular circumstances of each case. An auditor is not bound to be a detective, or, as
was said, to approach his work with suspicion or with a foregone conclusion that there is something
wrong. He is a watch-dog, but not a bloodhound. He is justified in believing tried servants of the company
in whom confidence is placed by the company. He is entitled to assume that they are honest, and to rely
upon their representations, provided he takes reasonable care. If there is anything calculated to excite
suspicion he should probe it to the bottom; but in the absence of anything of that kind he is only bound to
be reasonably cautious and careful.
In the third case, Fomento (Sterling Area) Ltd v Selsdon Fontain Pen Co,225
Lord Denning expressed the view that the standard of care on auditors is
somewhat more demanding than that suggested in the foregoing dicta. This
case concerned the duties of an auditor employed to determine, pursuant to
the provision of an agreement, the amount of royalty payable under certain
patents. Lord Denning said there:226
What is the proper function of an auditor? It is said that he is bound only to verify the sum, the
arithmetical conclusion, by reference to the books and all necessary vouching material and oral
explanations; and that it is no part of his function to inquire whether an article is covered by patents or
not. I think this is too narrow a view. An auditor is not to be confined to the mechanics of checking
vouchers and making arithmetical computations. He is not to be written off as a professional ‘adder-upper
and subtractor’. His vital task is to see that errors are not made, be they errors of computation, or errors of
omission or commission, or downright untruths. To perform this task properly, he must come to it with an
inquiring mind–not suspicious of dishonesty, I agree–but suspecting that someone may have made a
mistake somewhere and that a check must be made to ensure that there has been none. I would not have it
thought that Re Kingston Cotton Mill Co (No 2) [1896] 2 Ch 279, (CA) relieved an auditor of his
responsibility for making a proper check. But the check to be effective, may require some legal
knowledge, or some knowledge of patents or other specialty. What is he then to do? Take, for instance, a
point of law arising in the course of auditing a company’s accounts. He may come on a payment which, it
appears to him, may be unlawful, in that it may not be within the powers of the corporation, or improper
in that it may have no warrant or justification. He is, then, not only entitled but bound to inquire into it
and, if need be, to disallow it: see Roberts v Hopwood [1925] AC 578 at p 605, Re Risdel, Risdel v Rawlinson
[1947] 2 All ER 312 at p 316. It may be, of course, that he has sufficient legal knowledge to deal with it
himself, as many accountants have, but, if it is beyond him, he is entitled to take legal advice on the
principle stated in Bevan v Webb [1910] 2 Ch 59 at p 75
that Permission to a man to do an act, which he cannot do effectively without the help of an agent,
carries with it the right employ an agent.
So also, with an auditor who is employed for the purpose of checking the royalties payable. It is part of
his duty to use reasonable care to see that none has been omitted which ought to be included. He is not
bound to accept the ipse dixit of the licensee that there are no other articles which attract royalty. He is
entitled to check the accuracy of that assertion by inquiring the nature of any other articles, which, it
appears to him, may come within the patented field. If he cannot be sure, of his own knowledge, whether
they attract royalty or not, he can take the advice of a patent agent, just as, within the legal sphere, he can
take the advice of a lawyer.
These older authorities are still viewed as useful in providing some basic
guidelines as to what is expected of an auditor. However, there is some
indication in the more recent case law227 that the courts are demanding higher
standards from today’s well paid, professional auditors who are guided by
extensive developments in accounting and auditing standards.
Standard under the statutes
The basic statutory duty of an auditor under regional Companies Acts is to

make such examination as is necessary to enable him to make a report on the
company’s financial statements and to present such report to the annual
meeting of the shareholders of the company’s conduct.228 Except in the
Bahamas and Jamaica Acts, the only statutory rules provided for as to the
manner in which the audit is to be conducted are that the auditor may
reasonably rely upon the report of an auditor of a body corporate or an
unincorporated business the accounts of which are included in whole or part in
the financial statements of the company229 and that he may so rely whether or
not the financial statements of the holding company reported upon by the
auditor are in consolidated form.230 Apart from these rules, the Acts do not
contain any guide as to the approach which the auditor must bring to the
discharge of this duty.
In the Bahamas, section 134(2) of the Companies Act expressly provides
that the report of the auditors on the company’s accounts examined by them
must ‘state whether, in their opinion, the balance sheet is drawn up in
accordance with the national accounting standards approved by a recognised
professional body of chartered accountants in the Bahamas’. Rule 2(a) of the
Seventh Schedule of the Jamaican Act is to the same effect. That rule stipulates
that the company’s accounts must be prepared in accordance with generally
accepted accounting principles promulgated by the Institute of Chartered
Accountants of Jamaica, from time to time, or such other body as may be
prescribed by ministerial order.
It is apparent from the provisions in the Bahamas and Jamaica Acts that the
higher standards being demanded in the most recent case law are the
standards contemplated by those Acts. It is arguable also that despite the
absence of express statutory provision as to standard which is expected of an
auditor in the other territories, similar higher standards are implied in the
qualification requirements for appointment as an auditor of a company in the
Acts in these territories. It would certainly be remarkable if these Acts
restricted appointment as a company auditor to qualified accountants and at
the same time contemplated the minimalist standards adumbrated in the old
case law.
Liability for negligent audit
The liability of a company auditor for loss caused by a negligent audit has
assumed enormous proportions in modern company law theory and practice.
The English House of Lords’ decision in Caparo Industries plc v Dickman231 is
the leading modern authority on this topic. This case makes it plain that
auditors’ liability for negligent audits is to be determined on the application in
the auditing context of the general common law rules established in the Privy
Council case of Hedley Byrne & Co Ltd v Heller & Partners Ltd232 governing
liability for negligent misstatement.
The most contentious issue raised in the cases in the application of the
Hedley Byrne & Co Ltd v Heller & Partners Ltd233 principles in the context of a
negligent audit by a company’s auditor is the scope of his duty of care owed.
Basically, this question may arise in respect of two types of claims. First, it
may arise in relation to claims by the company against the auditors whom it
has appointed under contract and second it may arise in respect of claims in
tort by third parties who are not in any direct relationship with the auditors
but whose claim is that reliance on the negligent audit caused them economic
loss.
Liability to claims of the auditor’s company

Since auditors appointed under contract by a company owe the company
appointing them a duty to exercise reasonable care and skill in the
performance of their contractual duties, such cases are normally
straightforward claims in contract. In the recent English House of Lords’
decision of Stone & Rolls Ltd v Moore Stephens (A fi rm), Lord Scott explained
the contractual cause of action against an auditor as follows:234
A cause of action for breach of contract requires no more than a valid contract and a breach of that
contract. If the complaint is one of professional negligence made against a professional, such as an auditor
who has been retained by the complaining client, no more need be pleaded and proved than that in the
performance of his contractual duties the professional failed to exercise the standard of professional care
that was owing to the client under the contract. For an action in tort, on the other hand, recoverable
damages must be alleged and proved, for without such damage the tortious cause of action is not complete.
Not so for an action based on a breach of contract. If the breach is proved the complainant is entitled to
judgment and to nominal damages at least.
Liability to claims of third parties
The liability of an auditor of a company to the claims of third parties

invariably rest in tort. Here, the critical issue is to define the circumstances in
which a duty of care may be said to be owed by the company auditor to third
parties claiming that reliance on the negligent audit cause them economic loss.
A number of English decisions have addressed this issue and provide
important analysis and persuasive authority on this issue.
The leading of these authorities, as has been noted, is the House of Lords’
decision in Caparo Industries plc v Dickman.235 The facts of this case are that
the plaintiff was a shareholder in a public company whose audited accounts
showed profits substantially less than those anticipated. The plaintiff purchased
more shares in the company and later in the year made a successful takeover
bid for the company. After the takeover, the plaintiff brought an action against
the auditor of the company claiming that the audited accounts of the company
were inaccurate as a result of the auditor’s negligence and that this negligence
had caused it loss. A preliminary issue was raised as to whether the auditor
owed a duty of care to the plaintiff either as a shareholder or a potential
investor. The House of Lords held that the auditors owed no duty of care to
the plaintiff, neither as a shareholder nor as a potential investor.
The House of Lords reached this conclusion in a carefully reasoned
unanimous decision. According to the House of Lords, the starting point in the
resolution of the issue is the statutory framework for company accounts and
audits. In this regard, the statutory provisions establish a relationship between
the directors, who are responsible for preparation of the accounts, the auditors,
who are responsible for a report verifying the accuracy of these accounts, and
some other class or classes of persons. This relationship imposes a duty of care
on auditors (and directors) owed to that class or classes of persons.
The question then becomes: who falls into that class or classes of persons to
whom such a duty of care is owed? Naturally, the company itself falls into that
class of person, since, quite apart from the statutory provisions, directors are in
a fiduciary relationship with the company and auditors are in a contractual
relationship by virtue of their appointment by the company as its auditors. On
the other hand, given that the fundamental purpose of the statutory provisions
on audit is to enable shareholders as a group to exercise informed control of
the company, these provisions cannot be interpreted as creating such a
relationship with every person entitled to receive copies of the accounts or
report (shareholders), or, a fortiori, with every person who has a right to
inspect or obtain copies of them (the public at large). For such a person to
establish liability in an auditor for a negligent audit, he must rely on the
general common law rules governing liability for economic loss caused by
negligent misstatement. This means that he must show a ‘special relationship’
with the auditor or, as it is now often stated, that there has been an assumption
of responsibility on the part of the auditor in respect of that plaintiff.
To do this, he must establish that the auditor contemplated that the accounts
and report, as was stated by Lord Bridge:236
would be communicated to the plaintiff either as an individual or as a member of an identifiable class,
specifically in connection with a particular transaction or transactions of a particular kind (e.g. in a
prospectus inviting investment) and that the plaintiff would be very likely to rely on it for the purpose of
deciding whether or not to enter upon that transaction or upon a transaction of that kind.
The essence of an assumption of responsibility on the part of the auditor, then,

is his knowledge that his report will be communicated to a person specifically
for a particular purpose and that there would be reliance on it. The judgment
of Lord Oliver makes it plain that the knowledge required of the auditor for
an assumption of responsibility may be either actual or inferential.237
It follows from Caparo, therefore, that auditors’ liability for negligent audits
does not extend without more to those who it was reasonable to foresee
might rely on the audited accounts, such as, for instance, takeover-bidders,238
or existing or future creditors239 and who suffered loss as a result of such
reliance.240 Instead, Caparo establishes that the common law duty of care for
negligent audits is confined within the statutory framework of the Companies
Acts for company accounts and their audits. Thus, it is only where, on the
facts, it is possible to establish that a duty of care has been assumed by an
auditor towards a third party that a claim will be available by that third party
for a negligent audit.241
The decision in Caparo also appears to have signalled a move away from
the long established rule that in an action in negligence against auditors for
breach of their duty of care, it must be proved that the loss suffered by the
claimant flows from the default of the auditors.242 For this requirement,
though fundamental, may involve significant difficulties both in cases where
the claimant is the company or the shareholders as well as cases where the
claimant is in a special relationship with the auditor.
Where the claim is by the company or the shareholders, it is patent that the
negligent audit is not without more the proximate cause of pecuniary loss to
either the company or the shareholders. The negligent audit deprives the
company and the shareholders of information which may have afforded them
an opportunity to take remedial action in respect of losses already incurred by
the company, or, more importantly, to move to change management and to
prevent mismanagement or fraud. However, establishing the pecuniary value
of that lost opportunity is fraught with obvious difficulties inherent in the fact
that proving such value depends upon the probability that action would have
been taken and that it would have led to the recovery of damages or the
removal of management.
Where the claimant is in a special relationship with the auditor the
difficulties may be attenuated, but may still arise. This is hinted at in Caparo
by Lord Bridge where he opined that if a shareholder in a listed company
suffered loss as a result of selling his shares at an under-value attributable to
an undervalue of the company’s assets in the audited accounts, the loss would
be caused not by reliance on the auditor’s report but by the ‘depreciatory
effect of the report on the market value of the shares before ever the decision
of the shareholder to sell was taken’.243 It is also manifest in Galoo Ltd v Bright
Grahame Murray,244 where the English Court of Appeal held that no loss was
caused to a company which continued to trade on the basis of negligent audit
reports rather than going into receivership. According to the Court, the
continued trading merely provided the occasion for the company incurring the
additional losses, but was not the ‘cause’ of them as a matter of legal causation.
The correct approach now appears to be less a focus on causation and more
on whether the responsibility assumed by the auditor was in respect of the
kind of loss suffered by the plaintiff. In Johnson v Gore Wood & Co, Arden LJ
explained the overall implication of Caparo, as follows:245
Starting with Caparo v Dickman, the courts have moved away from characterizing questions as to
remoteness as to the measure of damages for the tort of negligence as questions of causation and
remoteness. The path that once led in that direction now leads in a new direction. The courts now analyse
such questions by enquiring whether the duty which the tortfeasor owed was a duty in respect of the kind
of loss of which the victim complains. Duty is no longer determined in abstraction from the consequences
or vice-versa. The same test applies whether the duty of care is contractual or tortious. To determine the
scope of the duty the court must examine carefully the purpose for which the advice was being given and
generally the surrounding circumstances. The determination of the scope of the duty thus involves an
intensely fact-sensitive exercise. The final result turns on the facts, and it is likely to be only the general
principles, rather than the solution in any individual case, that are of assistance in later cases.
Clearly, this dictum underlines two points. The first is that the focus of the
court’s analysis is on whether the duty owed was a duty in respect of the kind
of loss of which the victim complains. The second is that the determination of
the scope of the duty is intensely fact-sensitive.
Exemption from liability for defamation

An auditor is exempted from liability for defamation under the Acts in
Montserrat, St Lucia, St Vincent.246 These Acts stipulate that an auditor is not
liable to any person in an action for defamation based on any act done or not
done or any statement made by him in good faith in connection with any
matter he is authorised or required to do under the Acts. The obvious purpose
of this exemption is to encourage full and frank statements by auditors.
Conclusion
The Companies Acts in the Commonwealth Caribbean all recognise the
importance of full and accurate financial information to the existing investors
in a company, to future investors and to efficiency and public confidence in the
marketing of company securities. These Acts also recognise that it is necessary
to weigh the benefits derived from the requirement of full and accurate
financial disclosure against the costs involved in satisfying such disclosure
requirements. The costs and benefits of disclosure naturally vary for different
types of companies. Accordingly, the provisions in regional Companies Acts
on disclosure and audit requirements represent an attempt to take account of
these differing needs. The Acts in Antigua, Barbados, Dominica, Grenada,
contain the most detailed and modern provisions. The provisions in the Acts in
the other territories may need to be looked at again.
Notes
187(1); T’dad s 187(1).
3 Guy s 157(2); J’ca s 144(2).
4 Guy s 157(1); J’ca s 144(1).
5 Ang s 154(2); Ant s 187(2); B’dos s 172(2); Dom s 187(2); Guy s 157(3); Gren s 187(2); J’ca s 144(3); Mont s
187(2); St L s 187(2); St V s 187(2); T’dad s 187(2).
187(2); St L s 187(2); St V s 187(2); T’dad s 187(2).
187(3); St L s 187(3); St V s 187(3); T’dad s 187(3).
187(3); St L s 187(3); St V s 187(3); T’dad s 187(3).
187(3); St L s 187(3); St V s 187(3); T’dad s 187(3).
10 Guy s 157(4); J’ca s 144(4).
11 Ang s 128(1); Ant s 149(1); Bah s 118(1); B’dos s 147(1); Dom s 149(1); Guy s 158(1); Gren s 149(1); J’ca s
12 Ang s 128(1)(a); Ant s 149(1)(a); Bah s 118(1)(a); B’dos s 147(1)(a); Dom s 149(1)(a); Gren s 149(1); Mont s
13 Ang s 128(1)(b); Ant s 149(1)(b); Bah s 118(1)(b); B’dos s 147(1)(b); Dom s 149(1)(b); Gren s 149(1)(b); Mont s
14 Ang s 128(1)(c); Ant s 149(1)(c); Bah s 118(1)(c); B’dos s 147(1)(c); Dom s 149(1)(c); Gren s 149(1)(c); Mont s
15 Guy s 158(1); J’ca s 145(1).
16 Ang s 128(1)(a); Ant s 149(1)(a); Bah s 118(1)(a); B’dos Reg 11(1) Companies Regulations, 1984; Dom s 149(1)
(a); Gren s 149(1)(a); Mont s 149(1)(a); St L s 149(1)(a); St V s 149(1)(a); T’dad s 152(1)(a).
17 Ang s 128(1)(a); Ant s 149(1)(a); Bah s 118(1)(a); B’dos Reg 10 Companies Regulations, 1984; Dom s 149(1)(a);
Gren s 149(1)(a); Mont s 149(1)(a); St L s 149(1)(a); St V s 149(1)(a); T’dad s 152(1)(a).
149(3); St V s 149(3); T’dad s 152(3).
19 Ang s 128(1)(a)(i); Ant s 149(1)(a)(i); Bah s 118(1)(a)(i); B’dos s 147(1)(a)(i); Dom s 149(1)(a)(i); Gren s 149(1)(a)
(i); Mont s 149(1)(a)(i); St L s 149(1)(a)(i); St V s 149(1)(a)(i); T’dad s 152(1)(a)(i).
20 Ang s 128(1)(a)(i); Ant s 149(1)(a)(i); Bah s 118(1)(a)(i); B’dos s 147(1)(a)(i); Dom s 149(1)(a)(i); Gren s 149(1)(a)
(i); Mont s 149(1)(a)(i); St L s 149(1)(a)(i); St V s 149(1)(a)(i); T’dad s 152(1)(a)(i).
21 Ang s 128(1)(a)(ii); Ant s 149(1)(a)(ii); Bah s 118(1)(a)(ii); B’dos s 147(1)(a)(ii); Dom s 149(1)(a)(ii); Gren s
149(1)(a)(ii); Mont s 149(1)(a)(ii); St L s 149(1)(a)(ii); St V s 149(1)(a)(ii); T’dad s 152(1)(a)(ii).
149(2); St V s 149(2); T’dad s 152(2).
23 Guy s 159(1); J’ca s 146(1).
24 Guy s 159(2).
25 J’ca S 146(2).
26 Guy s 159(5)(a); J’ca s 146(5)(a).
27 Guy s 159(5)(b); J’ca s 146(5)(b).
28 J’ca Seventh Sch r 2(a).
29 J’ca Seventh Sch r 2(b).
30 J’ca Seventh Sch r 3.
32 Guy s 159(4); J’ca s 146(4).
33 Guy s 160(2); J’ca s 147(1).
34 Guy s 160(1); J’ca s 147(1).

35 Guy s 160(3)(a).
36 J’ca s 147(20(a).
37 Guy s 160(3)(b)(i); J’ca s 147(2)(b)(i).
38 Guy s 160(3)(b)(ii); J’ca s 147(2)(b)(ii).
39 Guy s 160(3)(b)(iii); J’ca s 147(2)(b)(iii).
40 Guy s 160(3); J’ca s 147(2).
41 Guy s 161(1); J’ca s 148(1).
42 J’ca s 148(2).
43 J’ca s 148(2).
44 J’ca s 148(2).
45 J’ca s 148(3).
46 Guy s 161(1)(b); J’ca s 149(1).
47 Guy s 161(2); J’ca s 149(2).
48 Guy s 161(3).
49 J’ca s 149(3).
50 J’ca s 149(3).
51 Guy s 161(4); J’ca s 149(3).
56 J’ca Seventh Sch r 10(c).

62 J’ca Seventh Sch r 7(c).
154(1)(b); J’ca s 157(1); Mont s 149(1)(b); St L s 149(1)(b); St V s 149(1)(b); T’dad s 152(1)(b).
67 Ang s 128(1)(c); Ant s 149(1)(c); Bah s 118(1)(c); B’dos s 147(1)(c); Dom s 149(1)(c); Gren s 149(1)(c); Mont s
68 Ang s 129; Ant s 150; Bah s 119; B’dos s 148; Dom s 150; Gren s 150; Mont s 150; St L s 150; St V s 150; T’dad
s 153.
69 Ang s 129; Ant s 150; Bah s 119; B’dos s 148; Dom s 150; Gren s 150; Mont s 150; St L s 150; St V s 150; T’dad
s 153.
70 See, e.g., Re Ames & Co [1972] 3 OR 293 Ont CA; Re St Lawernce Starch Co [1972] 1 OR 293 Ont CA; Re
Armco Can Ltd and the Minister of Department of Consumer and Corporate Affairs (1975) 8 OR (2d) 741
Ont CA.
71 Re Ames & Co (1972) 3 OR 293 Ont CA.
72 Re Armco Can Ltd and the Minister of Department of Consumer and Corporate Affairs (1975) 8 OR (2d) 741
Ont CA.
73 Ibid.
74 Ibid.
75 Guy s 159(4); J’ca s 146(4).
76 Ang s 131(1); Ant s 152(1); Bah s 120; B’dos s 150(1); Dom s 152(1); Gren s 152(1); Guy s 154(1); J’ca s 152(1);
77 Ang s 131(2); Ant s 152(2); Bah s 121: only requires that the financial statements be accompanied by the
auditors’ report; B’dos s 150(2); Dom s 152(2); Gren s 152(2); Guy: no similar provision; J’ca s 152(5); Mont s
152(2); St L s 152(2); St V s 152(2); T’dad s 154(2).
78 John Shaw & Sons (Salford) Ltd v Shaw [1935] 2 KB 113 Eng CA.
79 Ang s 132(1); Ant s 153(1); Bah s 122; B’dos s 151; Dom s 153(1); Gren s 153(1); Guy s 155; Mont s 153(1); St L
s 153(1); St V s 153(1); T’dad s 155(1).
80 Ang s 132(1); Ant s 153(1); Bah s 122; B’dos s 151; Dom s 153(1); Gren s 153(1); Guy s 155; Mont s 153(1); St L
s 153(1); St V s 153(1); T’dad s 155(1).
81 Labatt Brewing Co v Trilon Holdings Inc (1998) 41 OR (3d) 384 Ont Gen Div [Commercial List].
82 Feder v Grossman (2000) Carswell Ont 4293 Ont SCJ.
83 Ant s 153(2); Dom s 153(2); Gren s 153(2); Mont s 153(2); St L s 153(2); St V s 153(2); T’dad s 155(2).
85 Ant s 153(4)(a); Dom s 153(4)(a); Gren s 153(4)(a); Mont s 153(4)(a); St L s 153(4)(a); St V s 153(4)(a); T’dad s
155(4)(a).
86 Ant s 153(4)(b); Dom s 153(4)(b); Gren s 153(4)(b); Mont s 153(4)(b); St L s 153(4)(b); St V s 153(4)(b); T’dad s
155(4)(b).
87 Ant s 153(4)(c); Dom s 153(4)(c); Gren s 153(4)(c); Mont s 153(4)(c); St L s 153(4)(c); St V s 153(4)(c); T’dad s
155(4)(c).
88 Ant s 153(4)(d)(i); Dom s 153(4)(d)(i); Gren s 153(4)(d)(i); Mont s 153(4)(d)(i); St L s 153(4)(d)(i); St V s 153(4)
(d)(i); T’dad s 155(4)(d)(i).
89 Ant s 153(4)(d)(ii); Dom s 153(4)(d)(ii); Gren s 153(4)(d)(ii); Mont s 152(4)(d)(ii); St L s 153(4)(d)(ii); St V s

153(4)(d)(ii); T’dad s 155(4)(d)(ii).
90 Ant s 153(4)(d)(iii); Dom s 153(4)(d)(iii); Gren s 153(4)(d)(iii); Mont s 153(4)(d)(iii); St L s 153(4)(d)(iii); St V s

153(4)(d)(iii); T’dad s 155(4)(d)(iii).
151(1); T’dad s 153(1).
151(2); T’dad s 153(2).
151(3); T’dad s 153(3).
151(3); T’dad s 153(3).
151(4); T’dad s 153(4).
151(4); T’dad s 153(4).
97 Ang s 133(1); Ant s 154(1)(a); B’dos s 152(1)(a); Dom s 154(1)(a); Gren s 154(1)(a); Guy s 156(a); Mont s 154(1)
(a); St L s 154(1)(a); St V s 154(1)(a); T’dad s 156(1).
98 Ang no similar provision; Ant s 154(1)(a); B’dos s 152(1)(a); Dom s 154(1)(a); Gren s 154(1)(a); Guy s 156(a);
Mont s 154(1)(a); St L s 154(1)(a); St V s 154(1)(a); T’dad: no similar provision.
99 Ang s 133(1); Ant s 154(1); B’dos s 152(1); Dom s 154(1); Gren s 154; Guy s 156; Mont s 154; St L s 154(1); St
V s 154(1); T’dad s 156(1).
100 Ang no similar provision; Ant s 154(2); B’dos s 152(2); Dom s 154(2); Gren s 154(2); Guy s 156; Mont s 154(2);
St L s 154(2); St V s 154(2); T’dad: no similar provision.
101 Ang s 133(1); Ant s 154(1); B’dos s 152(1); Dom s 154(1); Gren s 154(1); Guy s 156; Mont s 154(1); St L s 154(1);
St V s 154(1); T’dad s 156(1).
154(3); T’dad s 156(2).
154(3); T’dad s 156(2).
104 Ang s 133(1); Ant s 154(1)(a); B’dos s 152(1)(a); Dom s 154(1)(a); Gren s 154(1)(a); Mont s 154(1)(a); St L s
154(1)(a); St V s 154(1)(a); T’dad s 156(1).
105 Ang no similar provision; Ant s 154(1)(a); B’dos s 152(1)(a); Dom s 154(1)(a); Gren s 154(1)(a); Mont s 154(1)
(a); St L s 154(1)(a); St V s 154(1)(a); T’dad: no similar provision.
154(4)(a); St V s 154(4)(a); T’dad s 156(3)(a).
154(4)(b); St V s 154(4)(b); T’dad s 156(3)(b).
154(5); T’dad s 156(4).
111 See, e.g., Eisenberg, ‘Legal Models of Management Structure in the Modern Corporation: Officers, Directors
and Accountants’ (1975) 63 Calif L Rev 375, 432–438; Hawes, ‘Stockholder Appointment of Independent
Auditors’ (1974) 74 Col L Rev 1; Mautz and Neumann, ‘The Effective Audit Committee’ (1970) 48 Harv Bus
Rev 57.
112 See Hawes, ‘Stockholder Appointment of Independent Auditors’ (1974) 74 Col L Rev 1; Mautz and
Neumann, ‘The Effective Audit Committee’ (1970) 48 Harv Bus Rev 57.
118 Roman Corpn v Peat Marwick Thorne (1993) 12 BLR (2d) 10 Ont Gen Div.
119 Ang s 137(1); Ant s 162(1); Bah s 125(1); B’dos s 155(1); Bel s 113(1); Dom s 162(1); Guy s 172(1); J’ca s 154(1);
Mont s 162(1); St C/N s 109(1)(a); St L s 162(1); St V s 162(1); T’dad s 163(1).
163(1); St V s 163(1); T’dad s 164(1). But note that Ang s 137(1) only requires the shareholders of ‘a public
company’ to appoint an auditor.
121 Ang s 145(1); Ant s 171(1); Bah s 129(2); B’dos s 164(1); Bel s 114(2); Dom s 171(1); Gren s 171(1); Guy s
181(1); J’ca s 157(1); Mont s 171(1); St C/N s 109(1); St L s 171(1); St V 171(1); T’dad s 172(1).
122 [1990] 2 AC 605, 630 Eng HL.
123 [1990] 2 AC 605, 629–630 Eng HL.
124 Ant s 157; Dom s 157; Gren s 157; Mont s 157; St L s 157; St V s 157.
125 Pandora Select Partners LP v Strategy Real Estate Investments Ltd (2007) 27 BLR (4th) 299 Ont SCJ.
126 Ang s 137(1); Ant s 162(1); Bah s 125(1); B’dos s 155(1); Dom s 162(1); Gren s 162(1); Guy s 172(1); St L s
162(1); St V s 162(1); T’dad s 163(1).
127 Ang s 137(2); Ant s 162(2); Bah: no similar provision; B’dos s 155(2); Dom s 162(2); Gren s 162(2); Guy s
172(2); St L s 162(2); St V s 162(2); T’dad s 163(2).
162(3); St V s 162(3); T’dad s 163(3).
129 Bel s 113(5); J’ca s 154(9); St C/N s 109(3).
130 Bel s 113(5); J’ca s 154(9)(b); St C/N s 109(3).
131 Bel s 113(1); J’ca s 154(1); St C/N s 109(2).
132 J’ca 154(2).
134 Ant 163(1); B’dos s 156(1); Dom s 163(1); Gren s 163(1); Guy s 173(1); St L s 163(1); St V s 163(1); T’dad s
164(1).
164(3).
164(2).
137 J’ca s 159.
138 J’ca s 159(1).
139 J’ca s 159(1).
140 Ang s 137(1).
141 St C/N s 109(1).
142 Ang s 134(1); Ant s 158(1); Bah s 128(1); B’dos s 153(1); Dom s 158(1); Gren s 158(1); Guy s 170(1); J’ca s 155;
143 Ang s 135(1)(a); Ant s 158(1)(a); Dom s 158(1)(a); Gren s 158(1)(a); Mont s 158(1)(a); St L s 158(1)(a); St V s
158(1)(a); T’dad s 158(1)(a).
144 Ang s 135(1)(b); Ant s 158(1)(b); Dom s 158(1)(a); Gren s 158(1)(a); Mont s 158(1)(a); St L s 158(1)(a); St V s
158(1)(b); T’dad s 158(1)(b).
145 Ang s 135(3); Ant s 158(3); Dom s 158(5); Gren s 158(5); Mont s 158(5); St L s 158(5); St V s 158(3); T’dad s
158(3).
158(2).
147 T’dad s 158(2).
148 Bah s 128(2).
149 Bah s 128(2)(a).
150 Bah s 128(2)(b).
151 B’dos s 153(2)(a); Guy s 170(2)(a).
152 B’dos s 153(2)(b)(i).
153 B’dos s 153(2)(b)(ii).
154 Ant s 158(1)(b); Bah s 128(3); B’dos s 153(2)(c); Dom s 158(1)(b); Gren s 158(1)(b); Guy s 170(2)(b) Mont s
158(1)(b);; St L s 158(1)(b); St V s 158(1)(b); T’dad s 159.
158(3); St V s 158(3); T’dad s 159(2).
156 Ant s 158(2)(a); Bah s 128(3); B’dos s 153(3)(a); Dom s 158(2)(a); Gren s 158(2)(a); Guy s 170(3)(a); Mont s
157 Ant s 158(2)(b); Bah: no similar provision; B’dos s 153(3)(b); Dom s 158(2)(b); Gren s 158(2)(b); Guy s 170(3)
158 Bah s 127(1); B’dos s 154(1); Guy s 171(1).
159 Bah s 127(2); B’dos s 154(2); Guy s 171(2).
160 Bah s 127(3)(a); B’dos s 154(3)(a); Guy s 171(3)(a).
161 Bah s 127(3)(b); B’dos s 154(3)(b); Guy s 171(3)(b).
162 Bah s 127(3)(c); B’dos s 154(3)(c); Guy s 171(3)(c).
163 Bah s 127(4); B’dos s 154(4); Guy s 171(4).
164 Bah s 127(5); B’dos s 154(5); Guy s 171(5).
165 Bah s 127(6); B’dos s 154(6); Guy s 171(6).
166 Bah s 127(7); B’dos s 154(7); Guy s 171(7).
167 Bah s 127(7); B’dos s 154(7); Guy s 171(7).
168 Ang s 135(1)(a); Ant s 160(1)(a); Dom s 160(1)(a); Gren s 160(1)(a); Mont s 160(1)(a); St L s 160(1)(a); St V s
160(1)(a); T’dad s 161(1)(a).
169 Ang s 135(1)(b); Ant s 160(1)(b); Dom s 160(1)(b); Gren s 160(1)(b); Mont s 160(1)(b); St L s 160(1)(b); St V s
160(1)(b); T’dad s 161(1)(b).
161(4), i.e. a parent or subsidiary undertaking of the company or a subsidiary undertaking of any parent
undertaking of the company.
161(2).
161(3).
162(1).
162(2).
162(3).
176 Ant s 161(4); Dom s 161(4); Gren s 161(4); Mont s 161(4); St L s 161(4); St V s 161(4).
177 J’ca s 156; St C/N s 113(3).
178 J’ca s 156(a); St C/N s 113(3)(a).
179 J’ca s 156(b); St C/N s 113(3)(a).
180 J’ca s 156(c).
181 Ang s 138(1)(a); Ant s 164(1)(a); Bah s 132(a); B’dos s 157(1)(a)(i); Dom s 164(1)(a); Gren s 164(1)(a); Guy s
182 Ang s 138(2); Ant s 164(2); Bah s 130: may be removed by the directors; B’dos s 157(2); Dom s 164(2); Gren s
164(2); Guy s 174(2); Mont s 164(2); St L s 164(2); St V s 164(2); T’dad s 165(2).
183 Ang s 138(1)(b); Ant s 164(1)(b); Bah s 132(b); B’dos s 157(1)(a)(ii); Dom s 164(1)(b); Gren s 164(1)(b); Guy s
184 B’dos s 157(1)(b)(i).
185 B’dos s 157(1)(b)(ii).

186 B’dos s 157(1)(b)(iii).
165(2); St V s 165(2); T’dad s 166(2).
166(3); St V 166(3); T’dad s 167(3).
166(1); St L s 166(1); St V 166(1); T’dad s 167(1).
166(2); St L s 166(2); St V 166(2); T’dad s 167(2).
166(2); St L s 166(2); St V 166(2); T’dad s 167(2).
166(4); St V 166(4); T’dad s 167(4).
St V 167(1); T’dad s 168(1).
St V 167(2); T’dad s 168(2).
195 Bel s 113(6); J’ca s 154(10). See also St C/N s 109(6).
196 Bel s 113(6); J’ca s 154(10).
197 J’ca s 154(3).
198 J’ca s 154(4).
199 J’ca s 154(4).
200 Bel s 113(2).
201 Ang s 142; Ant s 168; Bah s 133; B’dos s 161; Dom s 168; Gren s 168; Guy s 178; J’ca s 157(4); Mont s 168; St L
s 168; St V 168; T’dad s 169.
157(1); Mont s 171(1); St L s 171(1); St V 171(1); T’dad s 172(1).
170(1); St L s 170(1); St V 170(1); T’dad s 171(1).
170(2); St L s 170(2); St V 170(2); T’dad s 171(2).
205 Bah s 135(3); B’dos s 163(3); Guy s 180(3).
206 Bah s 135(4); B’dos s 163(4); Guy s 180(4).
207 J’ca s 154(5).
208 J’ca s 154(6).
209 J’ca s 154(7).
210 J’ca s 154(7).
211 J’ca s 154(7).
212 J’ca s 154(7).
213 J’ca s 154(7).
214 J’ca s 154(7).
215 Ang s 146; Ant s 172; Bah s 129(1); B’dos s 165; Dom s 172; Gren s 172; Guy s 182; J’ca s 157(3); Mont s 172;
St L s 172; St V s 172; T’dad s 173.
172(1); St L s 172(1); St V 172(1); T’dad s 173(1).
172(2); St L s 172(2); St V 172(2); T’dad s 173(2).
173(1); St L s 173(1); St V 173(1); T’dad s 174(1).
173(2); St L s 173(2); St V 173(2); T’dad s 174(2).
173(3); St L s 173(3); St V 173(3); T’dad s 174(3).
173(3); St V s 173(3); T’dad s 174(3).
222 [1895] 2 Ch 673, 682 Eng CA.
223 [1896] 2 Ch 279 Eng CA.
224 [1896] 2 Ch 279, 288 Eng CA.
225 [1958] 1 All ER 11 Eng HL.
226 [1958] 1 All ER 11, 23 Eng HL.
227 See, e.g., Re Thomas Gerrard & Son Ltd [1967] 2 All ER 525; Lloyd Cheyham & Co Ltd v Littlejohn & Co
[1987] BCLC 303; Sasea Finance Ltd v KPMG [2000] 1 BCLC 236 Eng CA.
157(1); Mont s 171(1); St C/N s 110(2); St L s 171(1); St V 171(1); T’dad s 172(1).
229 Ang s 145(2); Ant s 171(2); B’dos s 164(2); Dom s 171(2); Gren s 171(2); Guy s 181(2); St L s 171(2); St V 171(2);
T’dad s 172(2).
230 Ang s 145(4); Ant s 171(4); B’dos s 164(4); Dom s 171(4); Gren s 171(4); Guy s 181(4); St L s 171(4); St V 171(4);
T’dad s 172(4).
231 [1990] 2 AC 605 Eng HL.
232 [1963] 2 All ER 575 PC.
233 Ibid.
234 [2009] 1 AC 1391, 1473 Eng HL.
235 [1990] 2 AC 605 Eng HL.
236 Caparo Industries plc v Dickman [1990] 2 AC 605, 621 Eng HL.
237 Caparo Industries plc v Dickman [1990] 2 AC 605, 638 Eng HL. See also, Electra Private Equity Partners v
KPMG Peat Marwick [2001] 1 BCLC 589 Eng CA.
238 Caparo Industries plc v Dickman [1990] 2 AC 605 Eng HL; James McNaughton Papers Group Ltd v Hicks
Anderson & Co [1991] BCLC 163 Eng CA.
239 Al Saudi Banque v Clark Pixley [1989] 3 All ER 361.
240 See Hercules Management Ltd v Ernst & Young (1997) 146 DLR (4th) 577 SCC and Essanda Finance Corp Ltd
v Peat Marwick Hungerford (1997) 188 CLR 241 HCA.
241 Morgan Crucible Co plc v Hill Samuel Bank [1991] BCLC 18 Eng CA; Galoo Ltd v Bright Grahame Murray
[1994] 2 BCLC 492 Eng CA.
242 Henry Squire, Cash Chemist Ltd v Ball, Baker & Co (1911) 28 TLR 81; JEB Fasteners Ltd v Marks Bloom &
Co [1981] 3 All ER 289, affd on other grounds [1983] 1 All ER 583 Eng CA; Galoo Ltd v Bright Grahame
Murray [1994] 2 BCLC 492 Eng CA.
243 [1990] 2AC 605, 627 Eng HL.
244 [1994] 2 BCLC 492 Eng CA.
245 [2003] All ER (D) 58 (Dec).
246 Ang s 148; Ant s 174; Bah s 132; B’dos s 167; Dom s 174; Guy s 186; Gren s 174; Mont s 174; St L s 174; St V s
174.
Chapter 27
Transfers of Shares and Debentures
Introduction
Montserrat, St Lucia, St Vincent and Trinidad and Tobago contain a Division
headed ‘Transfer of Shares and Debentures’.1 The provisions in this Division
are intended to provide a code to regulate the transfer of shares and
debentures of a company. Yet, important provisions on the right to transfer
shares and the rectification of the share register are not found within this
Division but in other parts of the Acts. Despite this, the provisions in this
Division are of critical importance in determining the relationship between the
company and holders of shares and debentures who are not existing
shareholders or debenture-holders. In Anguilla, the Bahamas, Belize, Jamaica
and St Christopher/Nevis, this relationship is determined by construing the
articles which normally contain provisions on the transfer of shares and the
debenture document which regulate the transfer of debentures.
Right to Transfer Shares and Debentures
Transfer of shares
As was seen in Chapter 9, the shares in a company under Commonwealth

Caribbean Companies Acts are personal estate,2 and a shareholder has a prima
facie right to transfer his shares.3 Under the Acts in Antigua, Barbados,
Tobago shares are transferable in the manner provided for in the Acts.4
In the Bahamas, Belize, Jamaica and St Christopher/Nevis, shares are
transferable in the manner prescribed by the company’s articles.5
Transfer of debentures
Debentures are chose in action and are consequently personal property.6 In

Vincent and Trinidad and Tobago, a debenture-holder has a statutory right to
transfer his debenture.7 This right cannot be limited by any restriction or
condition in a trust deed covering a debenture of a company or in the
debenture itself.8 Like a shareholder, a debenture-holder must transfer his
debenture in the manner provided by the Acts.9
In Anguilla, the Bahamas, Belize, Jamaica and St Christopher/Nevis, the
right to transfer a debenture is governed by the terms and conditions in the
trust deed covering the debenture or in the debenture itself.
Transfer of shares or debentures by person entitled by

operation of law
A person may become entitled to the shares or debentures of a shareholder or
debenture-holder of a company by operation of law and, as such, may not be
actually registered with the company as the holder of shares or debentures.
Lucia, St Vincent and Trinidad and Tobago provide that where any such
person included in the statutory list in these Acts executes a transfer of shares
or debentures, the transfer is as valid as if that person had been so registered
at the time of the execution of the instrument of transfer.10 The statutory list
includes the personal representative of the shareholder or debenture-holder,
his trustee in bankruptcy, a receiver appointed by or for the benefit of
debenture-holders, a receiver or other person appointed by the court to
administer the estate of a person of unsound mind, the guardian of a minor, or
a person appointed by the court to execute a transfer of shares or debentures.11
In Anguilla, the Bahamas, Belize, Jamaica and St Christopher/Nevis, the
transfer of shares or debentures by persons who become entitled by operation
of law is regulated by the provisions in the articles of the company.
Effect of provisions in articles or bye-laws on statutory

transfer rules

Vincent and Trinidad and Tobago, the statutory rules on the transfer of shares
or debentures cannot be abridged by anything contained in the articles or bye-
laws of the company.12 Similarly, they apply notwithstanding anything
contained in any trust deed or debentures or any contract or instrument
relating to shares or debentures of the company.13
Restrictions on the Right to Transfer
Basic rules relating to restrictions on the transfer of shares
As has been seen in Chapter XX, the right to transfer the shares of a company
may be restricted. Where it is intended to impose such restrictions, as is often
the case in closely held companies, this must be done by a clear statement in
the articles of incorporation in Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago that the
right to transfer shares is restricted and the nature of those restrictions.14
In fact, the Guyanese Companies Act takes this rule even further. That Act
provides that any restriction on the right of a shareholder to transfer his shares
in a company contained in the articles or bye-laws of the company is invalid if
its effect in any particular case is to limit the persons to whom, or the times or
prices at which, the shareholder may transfer his shares so that there is no
likelihood of the shareholder being able to sell them within a reasonable time
at a fair price.15 The rationale of this rule is undoubtedly that a shareholder has
a prima facie right to transfer his shares to whomsoever he pleases and this
right is not to be diminished by uncertain language or doubtful implications.16
Except in Guyana, therefore, if the restrictions in the articles are clearly
stated, then, in theory, there are no limits to the restrictions which may be
placed on the transfer of shares. In practice, however, the two most common
restrictions which are included in the articles of companies are those giving
the existing members a right of pre-emption to ensure that existing
shareholders have the opportunity to purchase any shares of the company that
may be for sale before they are offered outside the company and those
conferring a discretion on the directors to refuse to register transfers of shares.
The volume of case law on this subject is enormous and what follows
hereafter is a synopsis of the general rules that emerge from these cases as
well as the courts’ approach to pre-emptive restrictions and restrictions
conferring a discretion on directors in respect of transfer.
General approach to restriction provisions
The nature and extent of a restriction on the transfer of shares depends

entirely on a construction of the provisions in the articles. Given, however,
that shareholders have a right to transfer shares, provisions restricting the
transfer of shares must be construed as not unreasonably to prevent
shareholders from enjoying a fair and reasonable exercise of the right to
transfer.17 Where, therefore, the language of the provision does not clearly
impose a restriction on transfer, the general rule is that a narrow, literal
construction is to be adopted.18
Approach to restrictions in pre-emption provisions
The restrictions set out in the articles of incorporation may require a

shareholder ‘wishing’ or ‘desiring’ or ‘intending’ or ‘proposing’ to transfer his
shares to give the existing shareholders the right to purchase his shares at a
price determined in a specified manner. Alternatively, the articles may provide
that such a shareholder must notify the company, specifying the number of
shares he desires to sell and the price he wishes to obtain therefor and that the
company is then to offer the shares to existing shareholders who may take up
the shares at that price pro rata to their holdings. A particular issue that has
arisen in respect of such pre-emption provisions is whether pre-emption rights
are triggered by dealings in the beneficial interests in the shares or whether
pre-emption rights are triggered only where there is an attempt to transfer the
legal title to the shares.
This issue was considered in the English House of Lords’ decision in Lyle &
Scott v Scott’s Trustees.19 The facts of this case are that the articles contained
pre-emption rights where any shareholder was ‘desirous of transferring his
ordinary shares’. A number of shareholders agreed to sell their shares to a
takeover-bidder. They received the purchase price of £3 per share and gave
him irrevocable proxies to vote on their behalf thus putting him in control of
the company so far as they could without presenting transfers for registration
which, under the articles, were not to be lodged for registration. A question
arose as to whether in these circumstances the shareholders were ‘desirous of
transferring’ their shares and thus triggering the pre-emption provision in the
articles.
The House of Lords held that, construed in context, ‘transferring’, meant
assigning the beneficial interest and not the technical process of having a
transfer registered. The shareholders, having agreed to sell their shares and
having received the purchase price, held the shares as trustees for the
takeover-bidder and as such were bound to do everything to perfect his title
to the shares. This was a clear manifestation of the shareholders’ desire to
transfer the shares for the purposes of the articles and this triggered the pre-
emption provision in the articles.
The authority of Lyle & Scott v Scott’s Trustees20 was considered by the
English Court of Appeal in Safeguard Industrial Investments Ltd v National
Westminster Bank Ltd.21 In this case, the articles of a company contained a
pre-emption provision that any member who desired to transfer his shares had
to give notice to the company which in turn had to offer the shares to existing
shareholders who could then purchase the shares. The defendant bank, as
executor of the deceased shareholder, was registered in respect of the
deceased’s holdings in this company. The bank held the shares in trust for two
beneficiaries, who could at anytime require the bank to transfer the shares to
them, but, to whom there were no immediate plans of transferring the shares.
A question arose as to whether, since the bank could at any moment be
required to transfer the shares to the two beneficiaries, the pre-emption rights
of the existing shareholders were triggered and the bank was under a duty to
present a transfer notice to the company.
The Court of Appeal held that the pre-emption provision in the articles was
to be construed as applying only when a shareholder proposed to transfer his
legal title to his shares, and not to the transfer of the beneficial interests.
Accordingly, the mere fact that the beneficiaries could at any time require the
bank to make a transfer of the shares did not constitute the bank a member
desirous of transferring its shares for the purposes of the articles. This case was
distinguishable from Lyle & Scott v Scott’s Trustees, where the shareholders
had entered into an unconditional agreement which obliged them to transfer
when requested on the payment of the price, and thereby had manifested a
desire to transfer their shares for the purposes of the articles in that case.
The more recent English case of Re Sedgefield Steeplechase Co (1927) Ltd,
Scotto v Petch22 was concerned with a pre-emption provision contained in the
articles of a company which required any member who ‘intends to transfer
share’ to give notice of his intention in writing to the board, which could then
offer the shares to the existing members for purchase. Lord Hoffmann, sitting
as an additional judge in the Chancery Division, after reviewing the previous
cases on the subject at issue, relied in particular on Lyle & Scott v Scott’s
Trustees23 in holding that the obligation to give notice under the articles was
not triggered until the shareholder had entered into arrangements such as a
sale or grant of an option which placed him under a contractual obligation to
execute and deliver a transfer in breach of the pre-emption rights clause.
The Court of Appeal affirmed the decision of Lord Hoffmann, but on a
narrower point of construction of the articles and documentation in the case.
Nourse LJ downplayed the value of extracting principles from previous
decisions and stressed that these decisions depended very much on the
construction of the particular articles involved in particular cases. Despite this,
it seems to be reasonably well settled in the cases that, in the absence of
express provision to the contrary, pre-emption rights are not triggered by
transfers or disposals of the beneficial interest in the shares, the transfer or
disposal must be of the legal interest in the shares. Of course, what amounts to
a transference or disposal of the legal interest in shares will depend entirely on
the facts of the particular case.
Approach to restrictions conferring discretion on directors

It is common to find restrictive provision in the articles of closely held
companies stipulating that shares shall not be transferred without the consent
of the board of directors. Such a provision is valid and does not require that
consent be given before the execution of the transfer, only that it be given
prior to the completion of the transaction.24
It is also common practice for the articles of closely held companies to
contain a provision conferring on directors an ‘absolute and uncontrolled
discretion to refuse to register any transfer of shares’. In the leading case of Re
Smith & Fawcett Ltd,25 it was held that such a provision was valid and that this
discretionary power, like all directors’ powers, is a fiduciary power.
Accordingly, the court will not read into the provision any limitation other
than the usual stipulation that a fiduciary power of this kind must be exercised
bona fide and in what the directors consider (not what the court considers) to
be in the interest of the company, and not for collateral purposes. However,
the court will presume that the directors acted bona fide: the burden of proof
to the contrary is on those alleging to the contrary and this burden is not easily
discharged.
The restrictive provision in the articles of closely held companies may
confer on the board of directors more limited discretionary powers to refuse
to register transfers of shares. Here, the basic rule is that the directors must act
within the limits established by the provision in the articles. A good
illustration of the application of this rule is the English Court of Appeal
decision in Re Bede Steam Shipping Co.26 In this case, the articles of a company
conferred a wide power on the directors to refuse to register a transfer of any
shares if, in their opinion, it was contrary to the interest of the company that
the proposed transferee be a member thereof. The evidence was that the
directors had made no inquiry into the fitness of the transferees but had
refused to register transfers to them because the transferor was disposing of
single shares or small lots of shares to the transferees with a view to increasing
the number of shareholders who would support him. In these circumstances, it
was held that the court would intervene since the articles required the
directors to consider the personal qualities of the proposed transferees in the
exercise of their power of refusal and not on the motives of the transferor.
Where the restrictive provision in the articles gives the directors the right to
refuse registration of a transfer, the directors can only exercise this power by
passing a resolution to reject the transfer. Moodie v Shepherd (Bookbinders)
Ltd27 illustrates the operation of this rule. In this case, one of two directors of a
company was prepared to approve a transfer, but the other was not and
neither had a casting vote. The English House of Lords held that there could
not in these circumstances be said to have been a refusal by the directors to
register the transfer and that it should accordingly be registered.
Manner of Transferring Shares and Debentures
Transactions involving the transfer of shares and debentures of a company
may be either by sale and purchase or by gift. These two transaction types are
discussed hereafter separately.
Sale and purchase
Contract of sale
A transaction for the sale and purchase of shares and debentures of a company
usually proceed in at least three distinct legal stages. The first is the conclusion
of a contract for the sale of the shares or debentures which is governed by the
ordinary law of contract. This contract alone does not operate to transfer the
‘property’ in the shares or debentures. It merely confers a right to have the
‘property’ transferred.
Delivery of instrument of transfer
The second stage in a transaction for the sale and purchase of shares or
debentures is the delivery of the instrument of transfer. With respect to this,
Lucia, St Vincent and Trinidad and Tobago stipulate that the shares or
debentures of a company may be transferred by a written instrument of
transfer signed by the transferor and naming the transferee.28 Where, however,
an instrument of transfer is prescribed in the bye-laws of a company, that
instrument must be used to transfer the shares or debentures of the company.29
Subject to this stipulation and to any enactment, no particular form of words
are necessary to transfer shares or debentures, provided words are used that
show with reasonable certainty that the person signing the transfer intends to
vest the title to the shares or debentures in the transferee.30
Upon the delivery to the transferee of the instrument of transfer signed by
the transferor and delivery of the transferor’s share certificate or debenture, as
the case may be, beneficial ownership passes to the transferee.31 Alternatively,
beneficial ownership passes to the transferee on the delivery to him of an
instrument of transfer signed by the transferor that has been certified by or on
behalf of the company or by or on behalf of a stock or securities exchange in
the relevant territory.32 If, however, the transferor concerned is not registered
with the company in respect of the shares or, as the case may be, the
debentures, a transfer signed by the transferor is deemed to include transfers
signed by the person so registered and all holders of the shares or debentures
intermediate between the person so registered and the transferor.33
Mere delivery to the transferee of the instrument of transfer signed by the
transferor and of the transferor’s share certificate or debenture does not suffice
to pass legal title.34 The rule is that a company and, in the case of debentures,
the trustees of the covering trust deed, is not bound or entitled to treat the
transferee of shares or debentures as the owner of them until the transfer to
the transferee has been registered or until the court orders the registration of
the transfer to him.35 In any event, until the transfer is presented to the
company for registration, the company is not to be treated as having notice of
the transferee’s interest in the transfer or of the fact that the transfer has been
made.36
These rules on the passing of title to a transferee apply notwithstanding
anything contained in the articles or bye-laws of a company. They also apply
notwithstanding anything contained in any trust deed or debentures or any
contract or instrument.37
The provisions in the Acts in Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago is a
consolidation in one place of the general rules relating to the delivery of the
instrument of transfer. As such, the law in Anguilla, the Bahamas, Belize,
Jamaica and St Christopher/Nevis is no different from that under these Acts.
Certification of transfer and issue of share certificate or

debenture
The third stage in a purchase and sale of shares is the delivery of the signed,
written instrument of transfer to the company for entry in the company’s
register of shareholders. Under the Acts in Antigua, Barbados, Dominica,
Tobago, it is expressly provided that this process is completed by the company
issuing to the transferee a certification of transfer38 and subsequently a share
certificate or debenture.39 The rules governing the company issuing to the
transferee a certification of transfer and subsequently a share certificate or
debenture are complex and are dealt with separately hereafter.
Certification of transfer
On the presentation to the company of an instrument of transfer that is signed

by the holder of the share or debenture and accompanied by the delivery of
the share or debenture, a company in Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago is under a
duty to issue a certification of transfer of a share or debenture.40 Under the
Acts in these territories, a certification of transfer consists of a statement
signed by the company which is written or endorsed on the transfer to the
effect that the share certificate or debenture, as the case may be, has been
delivered to or lodged with the company.41
Montserrat, St Lucia, St Vincent and Trinidad and Tobago, the certification by
a company of any transfer of a share or debenture of the company is a
representation by the company to any person acting on the faith of the
certification that there have been produced to the company such documents as
on the face of them show a prima facie title to the share or debenture in the
transferor named in the transfer.42 The certification is not, however, a
representation that the transferor has any title to the share or debenture.43
The certification of transfer is intended to obviate the difficulty involved in
a transferor disposing of only part of his holding in a share certificate or
debenture. A difficulty could arise in such a case because such a transferor,
unlike a transferor who must hand over his share certificate or debenture
where he is disposing of the totality of his holding included in his share
certificate or debenture to the transferee to lodge with the completed transfer
with the company for registration, may be reluctant to deliver his share
certificate or debenture. A similar difficulty could arise where the transferor is
disposing of all of his shares or debentures but to two or more transferees. The
certification of transfer avoids this difficulty because it is accepted by the
transferee in lieu of the certificate or debenture.
The certification of transfer is deemed to be made by a company if the
person issuing the certification is a person authorised to issue certifications of
transfer on the company’s behalf, and the certification is signed by a person
authorised to issue certifications of transfer on the company’s behalf, or by any
other officer or employee either of the company or of a body corporate so
authorised.44 In the meantime, a certification is deemed to be signed by a
person if it purports to be authenticated by his signature or initials, whether
handwritten or not.45 If, however, the signature or initials were placed on the
certification neither by that person nor any person authorised to use the
signature or initials for the purpose of issuing certifications of transfer on the
company’s behalf, the certification is not deemed to be signed by that person.46
Where any person acts on the faith of a false certification by a company
made fraudulently or negligently, the company is liable to compensate him for
any loss he incurs in consequence of his so acting.47 Additionally, a company
that has issued a certification of a transfer of a share or debenture of the
company is liable to compensate any person for loss that he incurs in
consequence of the company subsequently releasing, otherwise than on
surrender of the certification of the transfer of the share or debenture,
possession of the share or debenture in respect of which the certification was
issued.48
Share certificates and debentures
Obligation to deliver certificate and debenture
A company is under an obligation in Antigua, Barbados, Dominica, Grenada,

Guyana, Jamaica, Montserrat, St Lucia, St Vincent and Trinidad and Tobago to
within two months (three months in Jamaica) after the date on which a
transfer of its shares or debentures is presented to the company for
registration, complete and have ready for delivery to the transferee a proper
certificate or debenture for any share or debenture transferred to him.49 A
‘transfer’ here means a transfer in proper form duly signed by the transferor
and transferee and which is otherwise valid. A ‘transfer’ here does not include
a transfer that the company is for any reason entitled to refuse to register and
does not register.50
Montserrat, St Lucia, St Vincent and Trinidad and Tobago, if a company
defaults in the discharge of this obligation, a notice may be served requiring
the company to make good the default.51 If the company fails to make good
the default within seven days after service of the notice, the court may on the
application of the person entitled to have a certificate or debenture delivered
to him, make an order directing the company or any officer of the company to
make good the default within such time as may be prescribed in the order.52
The order may also provide that all costs incidental to the application be borne
by the company and any officer of the company responsible for the default.53
Effect of certificate and debenture

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, a certificate issued
by a company and signed on its behalf stating that any shares or debentures of
the company are held by any person is prima facie proof of the title of that
person to the shares54 or debentures.55 Even though the certificate is merely
prima facie proof of the title of the person stated in it as the holder of shares
or debentures, the certificate is clearly intended to be relied upon in
transactions involving the sale and transfer of shares or debentures.
Accordingly, except in Jamaica, it is statutorily provided that the issue of a
share certificate or debenture (or the registration of a person as a shareholder
or debenture-holder of a company) constitutes a representation by the
company that the person named in the share certificate or debenture as
entitled to the shares or debentures (or the person so registered) is entitled to
the shares or debentures mentioned in the certificate or debenture (or in the
register).56 The company cannot deny the truth of that representation as
against a person who believes it to be true and contracts to acquire the shares
or debentures or any interest therein in good faith and for moneys worth.57
Forged certificates
A company may be bound by a forged certificate in Antigua, Barbados,

Tobago. This is because of the provision in the Acts in these territories that a
company cannot raise as a defence that a registration of a share certificate or
other document was procured by fraud or by the presentation to it of a forged
document.58 This provision clarifies the common law on forged certificates
which is somewhat complicated and which is still the law in Anguilla, the
Bahamas, Belize, Jamaica and St Christopher/Nevis.
As has already been seen, there is case law which appears to support the
view that a forged share certificate is a nullity and consequently cannot bind
the company.59 On the other hand, there is other authority which suggests that
the company may indeed be bound by a forged certificate if the genuineness
of the certificate has been either expressly or impliedly warranted by an
officer or other official of the company acting within the scope of his actual or
usual authority.60 Thus, the question whether a company may be bound by a
forged certificate remains unclear in Anguilla, the Bahamas, Belize, Jamaica
and St Christopher/Nevis.
Registration of transfers

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, a transferor of any
share or debenture of a company must apply to the company for registration
of the transfer.61 On such an application, the company must enter in its register
of shareholders or debenture-holders, as the case requires, the name of the
transferee in the same manner and subject to the same conditions as if the
application for the entry had been made by the transferee.62
A company may not register a transfer of any share or debenture of that
company unless a transfer in proper form and duly executed by the transferor
and transferee has been delivered to the company.63 However, this rule does
not affect any duty of the company to register as a shareholder or debenture-
holder any person to whom the ownership of any share or debenture of the
company has been transmitted by operation of law.64 On the contrary, a
company must register the trustee in bankruptcy or the personal
representative of a shareholder or debenture as a shareholder in respect of the
shares or as the holder of the debentures of the bankrupt or, as the case may
be, the deceased person, in its register of shareholders or debenture-holders.65
This must be done within seven days after the trustee in bankruptcy or the
personal representative produces to the company satisfactory evidence of his
title and requests it to register him as a shareholder or debenture-holder.66
These rules apply notwithstanding anything in the articles or bye-laws of
the company, or any debenture, trust deed or other contract or instrument.67
In Guyana and Jamaica also, if a company refuses to register a transfer of
shares or debentures, it is statutorily provided that the company must, within
five weeks in Guyana and three months in Jamaica after the date on which the
transfer was lodged with the company, send to the transferee notice of that
refusal.68 A company which defaults on this obligation is liable to a fine.69
Gift Transactions
Where the transaction is not a purchase and sale of shares but a gift, there is
no need for an agreement. If there were such an agreement, however, it would
lack consideration and consequently unenforceable as a contract. It could not
be enforced in equity either, because of the rule in Milroy v Lord70 that equity
will not assist a volunteer by perfecting an imperfect gift. Under this rule, the
gift is not perfected unless and until the transfer is registered. It should be
noted, however, that under the rule in Re Rose,71 if the donor has done all he
needs to do (such as, for example, handing to the donee a signed transfer and
the share certificate), the beneficial interest passes from him to the donee.
Liens on Shares
The rule at common law is that a company does not have a lien on unpaid
shares of its shareholders. However, articles of association often provided that
the company shall have a first and paramount lien on shares registered in the
name of a person for unpaid calls and other debts. It has been generally
accepted since the early House of Lords’ decision in Bradford Banking Co v
Briggs, Son and Co72 that such a lien takes effect as an equitable charge on the
shares of the registered shareholder to secure payment.
The common law rule seems to be now codified in the Companies Acts in
Lucia, St Vincent and Trinidad and Tobago. These Acts expressly provide that
a company’s articles of incorporation may provide that the company has a lien
on a share registered in the name of a shareholder or his legal representative
for a debt of that shareholder owed to the company.73 The debt referred to
here includes an amount unpaid in respect of a share issued by a company on
the date it was continued under the relevant Act.74 A company may enforce
such a lien in accordance with its bye-laws.75
Conclusion
Guyana, Jamaica (to a limited extent), Montserrat, St Lucia, St Vincent and
Trinidad and Tobago have codified a set of rules to govern corporate security
transfer. These rules define the rights, duties, obligations and liabilities of
persons affected by the transfer of shares and debentures and in some cases
have clarified confusion in the common law which by and large remains the
law in the other territories. The common law rules still obtain in Belize, the
Bahamas, and St Christopher/Nevis.
Notes
1 Ant Pt I Div I; B’dos Pt I Div I; Dom Pt I Div I; Gren Pt I Div I; Guy Pt II Div I; Mont Pt I Div I; St L Pt I
Div I; St V Pt I Div I; T’dad Pt III Div 9.
2 Ang s 28(1); Ant s 26(1); Bah s 35(1); B’dos s 26(1); Bel s 23(1); Dom s 26(1); Guy s 25(1); J’ca s 74(1); Mont s
26(1); St C/N s 34(1)(a); St L s 26(1); St V s 26(1); T’dad s 30(1).
3 Re Smith, Knight & Co, Weston’s Case (1868) 4 Ch App 20 Eng CA.
s 26(1); T’dad s 30(1).
5 Bah s 35(1); Bel s 23(1); J’ca s 74(1) St C/N s 34(1)(b).
195(1); T’dad s 195(1).
196(1); T’dad s 196(1).
195(1); T’dad s 195(1).
196(2); T’dad s 196(2).
196(2); T’dad s 196(2).
196(3); T’dad s 196(3).
196(3); T’dad s 196(3).
14 Mathers v Mathers (1989) 42 BLR 228, affd (1989) 90 NSR (2d) 354 NS CA.
15 Guy s 200(3).
16 Re Smith & Fawcett Ltd [1942] Ch 304, 306 Eng CA per Greene MR; see also, Greenhalgh v Mallard [1943] 2
All ER 1044 Eng CA; Roberts v Letter ‘T’ Estate Ltd [1961] AC 795 PC; Stothers v William Steward
(Holdings) Ltd [1994] 2 BCLC 266.
17 Re Hobson, Houghton & Co [1929] 1 Ch 300, 304.
18 Greenhalgh v Mallard [1943] 2 All ER 1044 Eng CA; Roberts v Letter ‘T’ Estate Ltd [1961] AC 795 PC.
19 [1959] AC 763 Eng HL.
20 Ibid.
21 [1982] 1 All ER 449 Eng CA.
22 [2000] 2 BCLC 211 Eng Ch D, affd [2001] BCC 889 Eng CA.
23 [1959] AC 763 Eng HL.
24 Re Copal Varnish Co [1917] 2 Ch 349.
25 [1942] Ch 304 Eng CA.
26 [1917] 1 Ch 123 Eng CA.
27 [1949] 2 All ER 1044 Eng HL.
195(1); T’dad s 195(1).
195(2); T’dad s 195(2).
195(3); T’dad s 195(3).
195(4)(a); St V s 195(4)(a); T’dad s 195(4)(a).
195(4)(b); St V s 195(4)(b); T’dad s 195(4)(b).
195(5); T’dad s 195(5).
195(6); T’dad s 195(6).
195(6); T’dad s 195(6).
195(6); T’dad s 195(6).
195(7); T’dad s 195(7).
38 Ant s 197; B’dos s 181; Dom s 197; Gren s 197; Guy s 201; J’ca 78; Mont s 197; St L s 197; St V s 197; T’dad s
197.
39 Ant s 198; B’dos s 182; Dom s 198; Gren s 198; Guy s 202; J’ca s 79; Mont s 198; St L s 198; St V s 198; T’dad s
198.
197(1); T’dad s 197(1).
197(2); T’dad s 197(2).
42 Ant s 197(3)(a); B’dos s 181(3)(a); Dom s 197(3)(a); Gren s 197(3); Guy s 201(3)(a); J’ca s 78(1); Mont s 197(3)
43 Ant s 197(3)(b); B’dos s 181(3)(b); Dom s 197(3)(b); Gren s 197(3); Guy s 201(3)(b); J’ca s 78(1); Mont s 197(3)
44 Ant s 197(6)(a); B’dos s 181(6)(a); Dom s 197(6)(a); Gren s 197(6)(a); Guy s 201(6)(a); J’ca s 78(3); Mont 197(6)
45 Ant s 197(6)(b); B’dos s 181(6)(b); Dom s 197(6)(b); Gren s 197(6)(b); Guy s 201(6)(b); J’ca s 78(3)(c)(i); Mont s
46 Ant s 197(6)(b); B’dos s 181(6)(b); Dom s 197(6)(b); Gren s 197(6)(b); Guy s 201(6)(b); J’ca s 78(3)(ii); Mont s
197(4); St V s 197(4); T’dad s 197(4).
197(5); St V s 197(5); T’dad s 197(5).
198(1); St V s 198(1); T’dad s 198(1).
198(3); St V s 198(3); T’dad s 198(3).
198(2); St V s 198(2); T’dad s 198(2).
198(2); St V s 198(2); T’dad s 198(2).
198(2); St V s 198(2); T’dad s 198(2).
St V s 200(1); T’dad s 200(1).
200(1); T’dad s 200(1).
200(2); T’dad s 200(2).
200(2); T’dad s 200(2).
200(3); T’dad s 200(3).
59 Ruben v Great Fingall Consolidated [1906] AC 439 Eng HL.
60 Uxbridge Building Society v Pickard [1939] 2 KB 248 Eng CA.
St V s 199(2); T’dad s 199(2).
St V s 199(2); T’dad s 199(2).
63 Ant s 199(1); B’dos s 183(1); Dom s 199(1); Gren s 199(1); Guy s 203(1); J’ca 75(1); Mont s 199(1); St L s 199(1);
St V s 199(1); T’dad s 199(1).
199(1); St V s 199(1); T’dad s 199(1).
199(3); T’dad s 199(3).
199(3); T’dad s 199(3).
T’dad s 199.
68 Guy s 203(3); J’ca s 77(1).
69 J’ca s 77(2).
70 (1862) 4 De G., F and J 264.
71 [1952] Ch 499. See also Pennington and another v Waine and others [2002] 2 BCLC 448 Eng CA.
72 (1886) 12 App Cas 29 Eng HL; see also Everitt v Automatic Weighing Machine Co [1892] 3 Ch 506.
s 57(1); T’dad s 59(1).
s 57(1); T’dad s 59(1).
s 57(2); T’dad s 59(2).
Chapter 28
Corporate Registers and Records
Introduction
Companies in the Commonwealth Caribbean must have a registered office
and are under a statutory obligation to prepare and maintain at its registered
office certain specified records and registers. This chapter has as its focus the
most important of these registers and records. It also examines rules
governing access to these registers and records.
Registered Office of Company
Every Companies Act in the Commonwealth Caribbean requires that a
company must at all times have a registered office in the territory in which it
is incorporated.1 As was seen in Chapter 3, under these Acts, at the time of
sending articles of incorporation or association, as the case may be, to the
Registrar, incorporators must also send to the Registrar, in the prescribed form,
notice of the address of the registered office of the company which the
Registrar must file.2 Even though a company must have a registered office, it
is not necessary that any part of the company’s ordinary business operations
be carried on at or from the registered office.3
The directors of a company may change the address of the registered office
of the company.4
Where this is done, the company must, within fifteen days of any such
change, send to the Registrar a notice in the prescribed form of the change,
which the Registrar must file.5 Unless and until this requirement is complied
with, the registered office of the company remains unchanged.6
Company Registers and Records
Company registers
Register of shareholders (members)
One register which must be maintained by a company is the register of

shareholders.7 (This register is referred to in the Bahamian, Jamaican and St
Christopher/Nevis Acts as the register of members.)8 The register of
shareholders must show (i) the name and the latest known address of each
person who is a shareholder;9 (ii) a statement of the shares held by each
shareholder;10 and (iii) the date on which each person was entered on the
register as a shareholder and the date on which any person ceased to be a
shareholder.11
Special provision is made in the Act in Jamaica for a company which has
converted any of its shares into stock and has given notice of the conversion to
the Registrar. In such a case, the register of members must show the amount
of stock held by each member instead of the amount of shares as well as the
statutorily specified particulars relating to shares.12
Register of debenture-holders
Another register which must be maintained in Antigua, Barbados, Dominica,

Tobago is a register of debenture-holders.13 In these territories, a company that
issues debentures must keep a register of debenture-holders which must show
(i) the names and the latest known address of each debenture-holder;14 (ii) the
principal of the debentures held by each debenture-holder;15 (iii) the amount
or the highest amount of any premium payable on redemption of the
debentures;16 (iv) the issue price of the debentures and the amount paid up on
the issue price;17 (v) the date on which the name of each person was entered
on the register as a debenture-holder;18 and (vi) the date on which each person
ceased to be a debenture-holder.19
Under the Jamaican Act, it is not necessary for the register to show the
amount paid or agreed to be considered paid on debenture stock or to
debenture-holders.20 Under the Jamaican Act also, the register of debentures
requirements do not apply in relation to debentures which are transferable by
delivery.21
Register of conversion privileges, options and rights

Vincent and Trinidad and Tobago, a register of conversion privileges, options,
or rights to acquire shares of a company must be maintained by a company
which grants any of these interests.22 This register must show the name and
latest known address of each person to whom the privileges, options or rights
have been granted and such other particulars in respect thereof as are
prescribed.23
Register of directors and secretaries
In Antigua, Dominica, Grenada, Guyana, Montserrat, St Lucia, St Vincent and

Trinidad and Tobago, a company is required to prepare and maintain a register
of directors and secretaries.24 The information which must be kept in this
register is different for directors and for secretaries.
Three statutorily specified details with respect to each director must be
contained in the register.25 The first of these is a statement of his present
forename and surname, his usual residential address and his business
occupation, if any.26 The second is the particulars of other directorships held by
him.27 It is to be noted that, in respect of this requirement, except in Guyana,
there is no need to include particulars of any directorship held in a company of
which the particular company is a wholly owned subsidiary.28 The last is a
statement as to who is, or who is to perform the function of, the managing
director.29
It may be noted here that each director is under a statutory duty to notify
the company in writing within seven days after any matter occasioning the
requirement of an entry in the register occurs or arises.30 In such an event, the
director must include in the notification the particulars which the company is
required to enter in the register in respect of the matter concerned.31
With respect to secretaries or assistant secretaries, what must be contained
in the register depends on whether the secretary or assistant sectary is an
individual, a corporation or a firm.32 In the case of an individual, the register
must contain a statement of his present forename and surname, any former
forename or surname, and his residential address.33 In the case of a
corporation, the register must contain a statement of its corporate name and
registered or principal office.34 Finally, in the case of a firm, a statement of the
name and principal office of the firm must be contained in the register.35
Register of directors’ holdings
In Antigua, Dominica, Grenada, Guyana, Montserrat, St Lucia, St Vincent and

Trinidad and Tobago, a public company must prepare and maintain a register
of directors’ holdings.36 Such a register must show statutorily specified
particulars with respect to any interest in shares in, or debentures of, the
company or of any affiliate, or associate of the company, which is vested in a
director.37
Except in Guyana, an interest in shares or debentures is vested in a director
if the shares or debentures are registered in the name of the director or of a
nominee for the director or the director and other persons jointly or in the
name of a nominee for him and them.38 An interest is also vested in a director
if he has a derivative interest in the shares or debentures, or a right or power
to acquire a derivative interest in them.39 Again, a director has a vested
interest if he has a right to subscribe for the shares or debentures, or another
person has a right to subscribe for them and he has a right to acquire them
after they have been allotted.40 Finally, a director has a vested interest in
shares or debentures if the shares or debentures are the subject of a voting
arrangement in favour of the director.41
The particulars in respect of an interest in shares or debentures vested in a
director which must be shown in the register of directors’ holdings include,
first of all, the number and classes of the shares and the number, classes and
the amount of the principal and premiums payable to the holder of the
debentures.42 Particulars as to the nature of the interest and its duration, if it is
limited in duration must also be shown.43 Similarly, the date of the acquisition
of the interest and the consideration, if any, given by the director or any other
person for the acquisition must be included in the particulars.44 Finally,
particulars as to the date of the disposal of the interest by the director or the
date of its cessation, whichever occurs first, and the consideration, if any,
received by him or any other person for such disposal or cessation must be
shown in the register.45
A director in respect of whom any entry is required to be made in the
register must notify the company in writing within seven days after the matter
occasioning the requirement of the entry occurs or arises.46 Such a director
must include in the notification the particulars which the company is required
to enter in the register in respect of that matter.47 It is to be noted that if the
interest is vested in the director at the time when he becomes a director, the
period within which the director must notify the company is seven days after
he becomes a director.48
A director is under an obligation in Antigua, Dominica, Grenada,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago to notify the
company in writing of the occurrence, while he is a director of either of two
events.49 These are, first, the grant by the company to an associate of his of a
right to subscribe for shares in, or debentures of, the company.50 The second is
the exercise by an associate of his right of such a right to subscribe granted by
the company.51
The register must be so made up that the entries in it against the several
names recorded in it appear in chronological order.52 Entries made in the
register must not be removed from it even where the person in respect of
whom these entries are required ceases to be a director.53 On the other hand, it
is not necessary to make an entry in the register of any matter occurring or
arising after he ceases to be a director.54 Similarly, it is not necessary to make
any entry of an interest of a director which is created by the articles of
incorporation of the company if the interest is one which is conferred on all
the shareholders of the company or all of the shareholders of the class
concerned.55
Register of substantial shareholders
The Acts in Antigua, Dominica, Grenada, Montserrat, St Lucia, St Vincent and

Trinidad and Tobago make provision for the keeping of a register of
‘substantial shareholders’.56 A substan tial shareholder is defined in these Acts
as a person who holds, by himself or by his nominee, shares in a company
which entitle him to exercise at least 10 per cent of the unrestricted voting
rights at any general meeting of shareholders.57
A person who is a substantial shareholder is under a statutory obligation to
give notice in writing to the company stating his name and address and giving
full particulars of the shares held by him or his nominee (naming the nominee)
by virtue of which he is a substantial shareholder.58 Such notice must be given
within fourteen days after a person becomes aware that he is a substantial
shareholder.59 It is to be noted that such notice must be given even if the
person has ceased to be a substantial shareholder before the expiration of that
fourteen-day period.60
A person who ceases to be a substantial shareholder is similarly under a
duty to give notice in writing to the company stating his name and the date on
which he ceased to be a substantial shareholder and giving full particulars of
the circumstances by reason of which he ceased to be a substantial
shareholder.61 Such a person must do so within fourteen days after he becomes
aware that he has ceased to be a substantial shareholder.62
The information which is contained in notices of substantial shareholding or
notices of cessation of substantial shareholding must be kept by the company
receiving any such notices in a register.63 The names of persons from whom it
has received a notice of substantial shareholding must be entered in the
register in alphabetical order.64 Against each name so entered, the information
given in the notice of substantial shareholding must be recorded.65 The
information given in a notice of cessation of substantial shareholding must also
be recorded in the register against the relevant name on the register.66
Maintenance of registers by agent

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, a company may
appoint an agent to maintain any, or all, of the foregoing registers which it is
required to maintain.67 In any event, the register must be maintained at the
registered office of the company or at some other place in the territory in
question designated by the directors of the company.68
Company records
Records to be kept at registered office
Under the Companies Acts in Anguilla, Antigua, the Bahamas, Barbados,

Tobago, a company must maintain specified company records at its registered
office.69 To start with, a company must keep records containing its articles and
its bye-laws and any amendments to them.70 It must also keep records
containing any unanimous shareholder agreement and amendments to that
unanimous shareholder agreement.71 Similarly, it must keep records of
minutes of meetings and resolutions of shareholders.72 Finally, it must keep
records containing copies of any notice sent to the Registrar in respect of any
amendment of the articles to increase or decrease the number of directors or
in respect of the address of the registered office of the company or any change
of such address.73
Records of trusts

Montserrat, St Lucia, St Vincent and Trinidad and Tobago, a personal
representative of the estate of a deceased individual who was registered in a
register of a company as a shareholder or debenture-holder may be registered
by the company as the holder of that share or debenture as personal
representative of that estate.74 Similarly, a personal representative of the estate
of a deceased individual who was beneficially entitled to a share or debenture
of a company that is registered in the register of the company may, with the
consent of the company and of the registered shareholder or debenture-holder,
become the registered shareholder or debenture-holder as the personal
representative of the estate.75 A personal representative registered in either of
these ways as a holder of a share or debenture of a company is, in respect of
that share or debenture, subject to the same liabilities and no more than he
would be subject to had the share or debenture remained registered in the
name of the deceased individual.76
Except as explained in the preceding paragraph, notice of a trust, express or
implied or constructive, must not be entered by a company in any of the
registers required by law to be maintained by it.77 There is also no
requirement to give notice of a trust to the Registrar.78 In any event, no
liabilities are affected by a company entering on its register a personal
representative as the holder of a share or debenture of the deceased individual
of whose estate he is personal representative.79 Furthermore, the company
concerned is not affected with notice of any trust by reason of its entering on
its register a personal representative as the holder of a share or debenture of
the deceased individual of whose estate he is personal representative.80
Accounts, minutes and other records
A company must prepare and maintain adequate accounting records under the
St Vincent and Trinidad and Tobago.81 A company must also prepare and
maintain records containing minutes of meetings and resolutions of the
directors and any committees of the directors.82 These records must be kept at
the registered office of the company.83 Alternatively, they may be kept at
some other place designated by the directors.84 In any case, these records must
at all reasonable times be available for inspection by the directors85 and, in all
other territories except Barbados and Guyana, the shareholders.86
When any accounting records of a company are kept at a place outside the
territory concerned, accounting records that are adequate to enable the
directors to ascertain the financial position of the company with reasonable
accuracy on a quarterly basis must be kept by the company at the registered
office of the company.87 Alternatively, they may be kept at some other place
in the territory concerned designated by the directors.88
Forms of records
All records required by the Acts in Antigua, Barbados, Dominica, Grenada,

Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago to be
prepared and maintained by the company may be in a bound or looseleaf
form or in a photographic film form.89 Alternatively, they may be entered or
recorded by any system of mechanical or electronic data processing, or by any
other information storage device that is capable of reproducing any required
information in intelligible written form within a reasonable time.90
Care of records
A company and its agents are under a statutory duty of care in respect of the
records required by the Acts in Antigua, Barbados, Dominica, Grenada,
Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago to be
prepared and maintained.91 In this regard, a company must take reasonable
precautions to prevent loss or destruction of, to prevent falsification of entries
in, and to facilitate detection and correction of inaccuracies in these records.92
Access to Registers and Records
Access by directors and shareholders
The directors and shareholders of a company and their agents and legal
representatives are entitled to examine the records of the company and to
take extracts from the records free of charge in Antigua, Barbados, Dominica,
Grenada, Guyana, Montserrat, St Lucia, St Vincent and Trinidad and Tobago.93
This must, however, be done during the usual business hours of the company.94
In addition to these entitlements, a shareholder of a company is, upon request
and without charge, entitled to one copy of the articles and bye-laws of the
company, any unanimous shareholder agreement, and to a copy of any
amendment to any of those documents.95
Access by creditors
In Barbados and Guyana, the creditors of a company and their agents and
legal representatives have a right to examine the articles and the bye-laws of
the company; records containing copies of any notice sent to the Registrar in
respect of any amendment of the articles to increase or decrease the number
of directors or in respect of the address of the registered office of the company
or any change of such address; the register of shareholders; the register of
debenture-holders; and the register of conversion privileges, options or rights
to acquire shares of the company.96 Creditors may make copies or take
extracts of any of these records, but must exercise these rights during the usual
business hours of the company and may be required to pay a reasonable fee
for the copying.97
Creditors do not have any right to examine unanimous shareholder
agreements or any amendment to a unanimous shareholder agreement.98
Access by the public
In Barbados and Guyana, members of the public have a statutory right to

examine a number of corporate documents. These include the articles and the
bye-laws of the company; records containing copies of any notice sent to the
Registrar in respect of any amendment of the articles to increase or decrease
the number of directors or in respect of the address of the registered office of
the company or any change of such address; the register of shareholders; the
register of debenture-holders; and the register of conversion privileges,
options or rights to acquire shares of the company.99
Members of the public also have the right to make copies of these records
or to take extracts from them.100 But, all of these rights must be exercised
during the usual business hours of the company and the payment of a
reasonable fee may be required.101 In Trinidad and Tobago, these rights are
only available to the Securities and Exchange Commission who may exercise
them free of charge.102
Access to shareholders’ lists
Any person may make an application requiring a public company or its

transfer agent to furnish him with a basic list of the shareholders of the
company in Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St
Lucia, St Vincent and Trinidad and Tobago.103 Such an applicant must pay a
reasonable fee and his application must be accompanied by an affidavit stating
statutorily specified matters.104 These matters include a statement of the name
and address of the applicant;105 if the applicant is a body corporate, of the
name and address for service of the body corporate;106 that the basic list and
any supplemental list obtained by the applicant will not be used except as
permitted under the Acts.107 It may be added here that, if the applicant is a
body corporate, the affidavit must be made by a director or officer of the body
corporate.108
The application must be for the company to furnish the basic list within
fifteen days (fourteen days in Guyana) from receipt of the affidavit by the
company.109 The basic list furnished by the company must be made up to a
date not more than thirty days before the date of receipt of the affidavit.110
The list must also set out the names of the shareholders of the company;111 the
number of shares held by each shareholder;112 and the address of each
shareholder as shown on the records of the company.113
When an applicant, requiring a basic list from a company, states in the
affidavit that he requires supplemental lists from the company, he may, upon
the payment of a reasonable fee, require the company or its transfer agent to
furnish him with supplemental lists of the shareholders.114 The supplemental
lists must set out any changes from the basic list in the names or addresses of
the shareholders, and in the number of shares held by each shareholder for
each business day following the date to which the basic list is made up.115
When a supplemental list has been required by an applicant from a
company, two rules become applicable.116 First, the company or its transfer
agent must furnish the applicant with a supplemental list on the date the basic
list is furnished, if the information relates to changes that took place before
that date.117 Second, the company or its transfer agent must furnish the
applicant with a supplemental list on the business day following the day to
which the supplemental list relates, if the information relates to changes that
take place on or before the date the basic list is furnished.118
A shareholders’ list obtained by an applicant may not be used in connection
with certain statutorily specified activities.119 In this regard, an applicant may
not use a shareholders’ list in connection with an effort to influence the voting
of shareholders of the company.120 He may also not use a shareholders’ list in
connection with an offer to acquire shares in the company.121 Finally, he must
not use the shareholders’ list in connection with any matter relating to the
affairs of the company.122
Access to options list

An applicant requiring that a company supply a basic list or a supplemental
list may also require the company to include in any such list the name and
address of any known holder of an option or right to acquire shares of the
company.123
Conclusion
The registers and records which companies in the Commonwealth Caribbean
are statutorily bound to prepare and maintain differ from territory to territory.
Thus, under the Companies Acts in Antigua, the Bahamas, Barbados,
Tobago, companies must prepare and keep a substantial number of registers
and records. On the other hand, under the Acts in the Bahamas, Belise,
Jamaica and St Christopher/Nevis far fewer registers and records are
mandated to be kept. Similarly, the Acts in Antigua, the Bahamas, Barbados,
Tobago contain provisions on access to these registers and records, whereas
the Acts in the Bahamas, Belise, Jamaica and St Christopher/Nevis are silent
on this matter.
Notes
1 Ang s 149(1); Ant s 175(1); Bah s 17(1); B’dos s 168(1); Bel s 64(1); Dom s 175(1); Gren s 175(1); Guy s 187(1);
2 Ang s 149(2); Ant s 176(1); Bah s 17(2); B’dos s 169(1); Bel s 5(1)(b); Dom s 176(1); Gren s 176(1); Guy s 188(1);
J’ca s 106(2); Mont s 176(1); St C/N s 8(1)(a); St L s 176(1); St V s 176(1); T’dad s 176(1).
3 Re Smith Transportation Co (1928) 62 OLR 203, 208 Ont HC.
4 Ang s 149(3): it is the ‘company’ which may effect the change; Ant s 175(2); Bah s 17(3); B’dos s 168(2); Bel s
64(2): the power to change is implied; Dom s 175(2); Gren s 175(2); Guy s 187(2); J’ca s 106(2): the power to
change is implied; Mont s 175(1); St C/N s 67(3): it is the ‘company’ which may effect the change; St L s
175(1); St V s 175(1); T’dad s 175(1).
5 Ang s 149(3): no time period is specified; Ant s 176(2); Bah s 17(3): no time period is specified; B’dos s
169(2); Dom s 176(2); Gren s 176(2); Guy s 188(2); J’ca s 106(2): the period is 7 days; Mont s 176(2); St C/N s
67(4): the period is 143 days; St L s 176(2); St V s 176(2); T’dad s 176(2).
6 Re Smith Transportation Co (1928) 62 OLR 203, 208 Ont HC.
7 Ang s 152(1)(d); Ant s 177(2); B’dos s 170(2); Dom s 177(2); Gren s 177(2); Guy s 189(2); J’ca s 1069(1)(a); Mont
s 177(2); St C/N s 41(1)(a); St L s 177(2); St V s 177(2); T’dad s 177(2).
8 Bah s 56(1); J’ca s 109(1); St C/N s 41(1).
109(1)(a); Mont s 177(2)(a); St C/N s 41(1)(b); St L s 177(2)(a); St V s 177(2)(a); T’dad s 177(2)(a).
10 Ant s 177(2)(b); Bah s 56(1)(a); B’dos s 170(2)(b); Dom s 177(2)(b); Gren s 177(2)(b); Guy s 189(2)(b); J’ca s
109(1)(a);Mont s 177(2)(b); St C/N s 41(1)(b); St L s 177(2)(b); St V s 177(2)(b); T’dad s 177(2)(b).
11 Ant s 177(2)(c); Bah s 56(1)(b) and (c); B’dos s 170(2)(c); Dom s 177(2)(c); Gren s 177(2)(c); Guy s 189(2)(c);
J’ca s 109(1)(c) and (d); Mont s 177(2)(c); St C/N s 41(1)(c) and (d); St L s 177(2)(c); St V s 177(2)(c); T’dad s
177(2)(c).
12 J’ca s 109(1).
177(4); St V s 177(4); T’dad s 177(4).
14 Ant s 177(4)(a); B’dos s 170(3)(a); Dom s 177(4)(a); Gren s 177(4)(a); Guy s 189(3)(a); J’ca s (84)(1)(a); Mont s
177(4)(c); St V s 177(4)(c); T’dad s 177(4)(c).
177(4)(d); St V s 177(4)(d); T’dad s 177(4)(d).
18 Ant s 177(4)(e); B’dos s 170(3)(e); Dom s 177(4)(e); Gren s 177(4)(e); Guy s 189(3)(e); J’ca s 84 (1)(c); Mont s
19 Ant s 177(4)(f); B’dos s 170(3)(f); Dom s 177(4)(f); Gren s 177(4)(f); Guy s 189(3)(f); J’ca s 84(1)(d); Mont s
20 J’ca s 84(1)(i).
21 J’ca s 84(1)(ii).
177(5); T’dad s 177(5).
177(5); T’dad s 177(5).
24 Ant s 177(3); Dom s 177(3); Gren s 177(3); Guy s 189(5) and (6); Mont s 177(3); St L s 177(3); St V s 177(3);
T’dad s 177(3).
25 Ant s 178(1); Dom s 178(1); Gren s 178(1); Guy s 189(5); Mont s 178(1); St L s 178(1); St V s 178(1); T’dad s
178(1).
26 Ant s 178(1)(a); Dom s 178(1)(a); Gren s 178(1)(a); Guy s 189(5)(a); Mont s 178(1)(a); St L s 178(1)(a); St V s
178(1)(a); T’dad s 178(1)(a).
27 Ant s 178(1)(b); Dom s 178(1)(b); Gren s 178(1)(b); Guy s 189(5)(b); Mont s 178(1)(b); St L s 178(1)(b); St V s
178(1)(b); T’dad s 178(1)(b).
29 Ant s 178(1)(c); Dom s 178(1)(c); Gren s 178(1)(c); Guy s 189(5)(c); Mont s 178(1)(c); St L s 178(1)(c); St V s
178(1)(c); T’dad s 178(1)(c).
30 Ant s 178(5); Dom s 178(5); Gren s 178(5); Guy s 189(8)(i); Mont s 178(5); St L s 178(5); St V s 178(5); T’dad s
178(5).
178(5).
178(3).
33 Ant s 178(3)(a); Dom s 178(3)(a); Gren s 178(3)(a); Guy s 189(6)(a); Mont s 178(3)(a); St L s 178(3)(a); St V s
178(3)(a); T’dad s 178(3)(a).
34 Ant s 178(3)(b); Dom s 178(3)(b); Gren s 178(3)(b); Guy s 189(6)(b); Mont s 178(3)(b); St L s 178(3)(b); St V s
178(3)(b); T’dad s 178(3)(b).
35 Ant s 178(3)(c); Dom s 178(3)(c); Gren s 178(3)(c); Guy s 189(6)(c); Mont s 178(3)(c); St L s 178(3)(c); St V s
178(3)(c); T’dad s 178(3)(c).
177(3).
179(1).
179(2)(a).
179(2)(b).
179(2)(c).
41 Ant s 179(2)(d); Dom s 179(2)(d); Gren s 179(2)(d); Mont s 179(2)(d); St L s 179(2)(d); St V s 179(2)(d); T’dad s
179(2)(d).
179(3)(a).
179(3)(b).
179(3)(c).
45 Ant s 179(3)(d); Dom s 179(3)(d); Gren s 179(3)(d); Mont s 179(3)(d); St L s 179(3)(d); St V s 179(3)(d); T’dad s
179(3)(d).
179(4).
179(4).
179(5).
180(2)(a).
180(2)(b).
184(1)(a).
184(1)(b).
184(1)(b).
177(6); T’dad s 177(6).
177(6); T’dad s 177(6).
69 Ang s 152(1); Ant s 177(1); Bah s 18; B’dos s 170(1); Dom s 177(1); Gren s 177(1); Guy s 189(1); Mont s 177(1);
St L s 177(1); St V s 177(1); T’dad s 177(1).
70 Ang s 152(1)(a); Ant s 177(1)(a); Bah s 18(a); B’dos s 170(1)(a); Dom s 177(1)(a); Gren s 177(1)(a); Guy s 189(1)
71 Ang 152(1)(a); Ant s 177(1)(a); B’dos s 170(1)(a); Dom s 177(1)(a); Gren s 177(1)(a); Guy s 189(1)(a); Mont s
72 Ant s 177(1)(b); Bah s 18(b); B’dos s 170(1)(b); Dom s 177(1)(b); Gren s 177(1)(b); Guy s 189(1)(b); Mont s
73 Ang s 152(1)(c); Ant s 177(1)(c) Bah s 18(c) and (d); B’dos s 170(1)(c); Dom s 177(1)(c); Gren s 177(1)(c); Guy;
189(1)(c); Mont s 177(1)(c); St L s 177(1)(c); St V s 177(1)(c); T’dad s 177(1)(c).
186(3); T’dad s 186(3).
186(4); T’dad s 186(4).
186(5); T’dad s 186(5).
186(1)(a); St V s 186(1)(a); T’dad s 186(1)(a).
186(1)(b); St V s 186(1)(b); T’dad s 186(1)(b).
186(2); T’dad s 186(2).
186(2); T’dad s 186(2).
187(1); T’dad s 187(1).
187(1); T’dad s 187(1).
187(2); T’dad s 187(2).
187(2); T’dad s 187(2).
187(2); T’dad s 187(2).
187(3); T’dad s 187(3).
187(3); T’dad s 187(3).
188(a); T’dad s 188(a).
188(b); T’dad s 188(b).
190(1); T’dad s 190(1).
190(1); T’dad s 190(1).
190(2); T’dad s 190(2).
96 B’dos s 175(3); Guy s 194(3).
97 B’dos s 175(3); Guy s 194(3).
98 B’dos s 175(3); Guy s 194(3). This is expressly stated in the B’dos provision; it is clearly implied in the Guy
provision.
99 B’dos s 175(4); Guy s 194(4).
100 B’dos s 175(4); Guy s 194(4).
101 B’dos s 175(4); Guy s 194(4).
102 T’dad s 190(3).
191(1); T’dad s 191(1).
191(1); T’dad s 191(1).
191(4)(a); St V s 191(4)(a); T’dad s 191(4)(a).
191(4)(b); St V s 191(4)(b); T’dad s 191(4)(b).
191(4)(c); St V s 191(4)(c); T’dad s 191(4)(c).
191(5); T’dad s 191(5).
191(1); T’dad s 191(1).
191(1); T’dad s 191(1).
191(1)(a); St V s 191(1)(a); T’dad s 191(1)(a).
191(1)(b); St V s 191(1)(b); T’dad s 191(1)(b).
191(1)(c); St V s 191(1)(c); T’dad s 191(1)(c).
191(2); T’dad s 191(2).
191(2); T’dad s 191(2).
191(3); T’dad s 191(3).
191(3)(a); St V s 191(3)(a); T’dad s 191(3)(a).
118 Ant s 191(3)(b); B’dos s 176(3)(b); Dom s 191(3)(b); Gren s 191(3)(b); Guy s 195(3)(b); Mont 191(3)(b); St L s
191(3)(b); St V s 191(3)(b); T’dad s 191(3)(b).
193(a); T’dad s 193(a).
193(b); T’dad s 193(b).
193(c); T’dad s 193(c).
Chapter 29
Takeover Bids
Introduction
Takeover bids in the Commonwealth Caribbean are regulated under the
Companies Acts in Antigua, Barbados, Dominica, Grenada, Guyana,
Montserrat, St Lucia, St Vincent and Trinidad and Tobago,1 under the Take-
Over Bid Regulations 2002 made under section 195B of the Companies Act in
Barbados, and also under the securities legislation in some territories.2 Given
that this book is not intended to cover securities law, it is only proposed in this
chapter to examine the rules governing takeover bids under the Companies
St Vincent and Trinidad and Tobago and the Barbados Take-Over Bid
Regulations 2002. The Companies Acts provisions and the Barbados Take-
Over Bid Regulations 2002 will be examined separately.
Takeover Bids under the Companies Acts
Takeovers3
The law on takeover bids, which is the subject matter of this chapter, is best
understood within the context of takeovers. A ‘takeover’ in corporate practice
is simply a method by which an acquirer obtains control over a target
company. Put another way, a takeover is nothing more than a change in the
control over management of the target company, and may be effected by any
of a number of different methods.
One method by which a takeover may be effected is by way of what is
called ‘a proxy contest’. Basically, this method involves a shareholder, or group
of shareholders, soliciting the proxies of other shareholders in order to amass
control over sufficient votes to change the board of directors and, accordingly,
the management of the company. Another method which may be employed
to secure a takeover is by an amalgamation of two or more amalgamating
companies which continue as one amalgamated company under the control of
new management. Yet another method of effecting a takeover is by the
purchase by the acquirer of all the assets of the target company. A final
method by which a takeover may be effected is by the acquisition of sufficient
shares of the target company by the acquirer to allow the acquirer to exercise
voting control over the target company. Acquisition of shares of the target
company may be by way of the purchase of a controlling block of shares or
significant blocks which together make up a controlling block, or, may be by
purchasing the shares through a general offer to all shareholders to buy shares.
Takeover bids
The last method of effecting a takeover described in the foregoing paragraph

is a takeover by a takeover bid. In it, a general offer is made by the
acquirer/bidder, called the offeror, to all or most shareholders, called the
offerees, to purchase shares of their company, called the offeree company or
target company, with the objective of obtaining sufficient shares to control the
offeree company. A takeover bid may take the form of a ‘share exchange
offer’, a ‘cash offer’ or a combination of a share exchange offer and a cash
offer. In a share exchange offer, the offeror offers to offerees shares of the
offeror or a related company in exchange for the offerees’ shares in the
offeree company. In a cash offer, the offeror offers to pay cash to offerees for
their shares in the offeree company. The offeror may also offer the offerees a
combination of cash and share offering in exchange for their shares in the
offeree company.
The takeover bid is the only method of corporate takeover which is subject
to express legislative control under regional Companies Acts and companies
regulations.
Companies Acts provisions
The core provisions
The core provisions on takeover bids in Commonwealth Caribbean

Companies Acts are concerned exclusively with regulating the rights of an
offeror and an offeree shareholder. Thus, those provisions, on the one hand,
confer a right on an offeror who makes a takeover bid for all the shares of a
class of shares, and who obtains not less than 90 per cent of the shares of the
class of shares to which the takeover bid relates, compulsorily to acquire the
shares of any shareholder of the class of shares for which the takeover bid was
made or a subsequent holder of shares acquired from such a shareholder who
does not accept the takeover bid.4 On the other hand, the provisions impose a
duty on an offeror to send a notice to a dissenting offeree (a shareholder who
does not accept the takeover bid)5 stating, inter alia, that such a shareholder
has a right to elect to transfer his shares or to demand payment of their fair
value from the offeror.6
The basic objective of the core provisions in the Acts was explored in
Shoom (in trust) v Great-West Lifeco Inc.7 In this case, Lederman J in the
Ontario Supreme Court considered section 206 of the Canadian Business
Corporations Act, a section in pari materia with the core provisions in
regional Acts.8 Lederman J explained that the aim of section 206 is to strike a
balance between the competing interests of the offeror and the dissenting
offerees. This is sought to be achieved by conferring a right on an offeror in
receipt of more than 90 per cent of the shares of the offeree company to
acquire the remaining shares on a compulsory basis thereby seeking to
prevent the tyranny of the minority dissenting shareholders over the majority
shareholders. On the other hand, by setting out restrictions on the right of
compulsory acquisition, the provision also seeks to protect dissenting
shareholders whose property is being expropriated. In this way the core
provisions seek to balance the competing interests of the offeror and the
dissenting offeree shareholder.
Offeror’s right of compulsory acquisition
Under the Acts, an offeror, who makes a takeover bid for all the shares of a
class of shares to which the takeover bid relates, other than shares held at the
date of the takeover bid by or on behalf of the offeror or an affiliate or
associate of the offeror, acquires a right of compulsory acquisition.9 If such a
situation arises, then, within 120 days after the date of the takeover bid the
offeror may, upon compliance with the procedure set out in the relevant
Division in the Act in question, acquire the shares of any dissenting offeree
shareholder.10
Conditions necessary for exercise of right
As has just been intimated, for the right conferred in the provisions
compulsorily to acquire the shares of the 10 per cent minority to become
exercisable by an offeror, there must be a takeover bid. A takeover bid is
defined in the Acts, except the Barbados Act, as an offer, including an
invitation to make an offer,11 made by an offeror to shareholders of the offeree
company, to acquire all the shares of any class of issued shares of the offeree
company, and is defined to include every offer by an issuer to repurchase its
own shares.12 In the Barbados Act, it is defined as an offer, including an
invitation to make an offer,13 made to one or more shareholders by an issuer
to repurchase its own shares, or by an offeror to acquire shares which, if
combined with shares already beneficially owned or controlled, directly or
indirectly by the offeror or an affiliate or associate of the offeror, would
exceed 25 per cent of any class of shares of the offeree company.
The expression shares in all the Acts means shares with or without voting
rights.14 The expression also includes debentures currently convertible into
such shares15 and currently exercisable options and rights to acquire shares or
such a convertible debenture.16
It is important to pay particular attention to the phrase ‘including an
invitation to make an offer’ in the definition of a takeover bid in the Acts.17
This phrase obviates the subtle distinctions drawn by the law of contract
between an offer and many company law transactions which are described as
offers but which in strict contract law are invitations to make an offer. So, for
instance, a case like the English case of Re Chez Nico (Restaurants) Ltd,18
where directors who had acquired 90 per cent of the shares of a company and
who had invited the remaining shareholders to offer to sell their shares were
held by Browne-Wilkinson V-C not to have made an ‘offer’, would be decided
differently under regional Acts. This is because Browne-Wilkinson V-C
interpreted an ‘offer’ in the corresponding English legislation as meaning an
‘offer’ in the contractual sense, and therefore not including an invitation to
make an offer. The practical consequence of including an invitation to the
remaining shareholders to make an offer in the definition of a takeover offer
in regional Acts is that such shareholders who do not want to remain
shareholders in the taken-over company and who wish to exercise their rights
of dissent under the Acts will not be precluded from doing so by the technical
argument that there was not an ‘offer’.
Offeror’s notice
An offeror acquiring the shares held by a dissenting offeree shareholder must

send an offeror’s notice to each dissenting offeree shareholder and to the
Registrar.19 The offeror’s notice may be sent by registered post within 60 days
after the date of termination of the takeover bid and in any event within 180
days after the date of the takeover bid.20 Concurrently with sending the
offeror’s notice, the offeror must send to the offeree company a notice of
adverse claim with respect to each share held by a dissenting offeree
shareholder.21
The offeror’s notice must state the following:
(a) that the offerees who are holding more than 90 per cent of the shares
to which the bid relates accepted the takeover bid;22
(b) that the offeror is bound to take up and pay for or has taken up and
paid for the shares of the offerees who accepted the takeover bid;23
(c) that a dissenting offeree is required to elect either (i) to transfer his
shares to the offeror on the terms which the offeror acquired the
shares of the offerees who accepted the takeover bid,24 or (ii) to
demand payment of the fair value of his shares by notifying the
offferor within twenty days after the dissenting offeree receives the
offeror’s notice;25
(d) that a dissenting offeree who does not so notify the offeror is
presumed to have elected to transfer his shares to the offeror on the
same terms as the offeror acquired the shares from the offerees who
accepted the takeover bid;26 and
(e) that a dissenting offeree must send those shares of his to which the
takeover bid relates to the offeree company within twenty days after
he receives the offeror’s notice.27
In Shoom (in trust) v Great-West Lifeco Inc,28 it was decided that the
requirement in the Act that a dissenting offeree elects to transfer his shares to
the offeror ‘on the terms which the offeror acquired the shares of the offerees
who accepted the takeover bid’ or ‘or demand fair value of his shares’ means
that a dissenting offeree must receive treatment that is no less favourable than
that received by an accepting shareholder.
Role of the offeree company
A dissenting offeree to whom an offeror’s notice is sent must, within twenty

days of his receiving that notice, send the share certificate of his for the class of
shares to which the takeover bid relates to the offeree company.29 By the same
token, within twenty days after the offeror’s notice is sent, the offeror must
pay to the offeree company the amount of money or other consideration that
the offeror would have had to pay or transfer to a dissenting offeree had
elected to accept the takeover bid.30 The money or other consideration so
received by the offeree company is held in trust for the dissenting offerees.31
In pursuance of its role as trustee, the offeree company must deposit the
money in a separate account in a bank and must place the other consideration
in the custody of a bank.32
The offeree company is under a duty to do a number of things within thirty
days after the offeror sends the offeror’s notice.33 First, it must issue the offeror
a share certificate in respect of the shares that were held by the dissenting
offerees.34 Second, it must give to each dissenting offeree who elects to accept
the takeover bid and sends his certificate to the offeree company the money or
other consideration to which he is entitled, disregarding fractional shares,
which may be paid for in money.35 Third, it must send to each dissenting
shareholder who has not sent his share certificate, a notice stating (i) that his
shares have been cancelled;36 (ii) that the offeree company or some designated
person holds in trust for him the money or other consideration to which he is
entitled as payment for or in exchange for his shares;37 and (iii) that the offeree
company will, subject to any court order fixing the fair value of the shares of a
dissenting offeree, send that money or other consideration to him forthwith
after receiving his shares.38
Application to the court for fixing fair value
Where a dissenting offeree has elected to demand payment of the fair value of
his shares, the offeror may, within twenty days after it has paid the money or
transferred the other consideration to the offeree company, apply to the court
to fix the fair value of the shares of that dissenting offeree.39 If the offeror fails
to apply to the court, a dissenting offeree may, within a further period of
twenty days, apply to the court to have the fair value of his shares fixed.40 If a
dissenting offeree does not make an application within this time, he will be
presumed to have elected to transfer his shares to the offeror on the same
terms as the offeror acquired the shares from the offerees who accepted the
takeover bid.41
Two steps must be taken upon an application to the court for the fixing of
the fair value of the shares of a dissenting offeree.42 First, all dissenting
offerees who have elected to demand payment whose shares have not been
acquired by the offeror must be joined as parties to the application and are
bound by the decision of the court.43 The second step is that the offeror must
notify each affected offeree of the date, place and consequences of the
application and of the offeree’s right to appear and be heard in person or by
attorney-at-law.44
Upon an application to the court for the fixing of the fair value of the shares
of a dissenting offeree, the court may first determine whether any other
person is a dissenting offeree who should be joined as a party.45 The court
must then fix a fair value for the shares of all dissenting offerees.46 The court
may appoint one or more appraisers to assist it in so fixing a fair value.47 Be
that as it may, the final order of the court must be made in favour of each
dissenting offeree against the offeror and be made for the amount of the
offeree’s shares as fixed by the court.48
It may be useful to note here that all the cases are agreed that the motive of
the dissenting shareholder in asserting his right to a determination of fair
value is irrelevant. Thus in Shoom (in trust) v Great-West Lifeco Inc, Lederman
J quipped:49
The shareholder’s motive does not… affect the shareholder’s rights. Either any shareholder dissenter is
entitled to all the terms of the offer, or none is.
This approach is clearly warranted by the objective of the statutory fair value
remedy.
Powers of the court to make orders
The court has power to make any order it thinks fit in connection with
applications for the fixing of the fair value of the shares of a dissenting
offeree.50 In particular, the court may (i) fix the amount of money or other
consideration that is required to be held in trust for the dissenting offerees;51
(ii) order that the money or other consideration be held in trust by a person
other than the offeree company;52 (iii) allow to each dissenting offeree, from
the date he sends or delivers his share certificates to the offeree company until
the date of payment, a reasonable rate of interest on the amount payable to
him;53 or (iv) order any money payable to a shareholder who cannot be found
into the consolidated fund.54
Fixing fair value
The Acts do not provide any guidance as to how fair value for purposes of
fixing the fair value for the shares of dissenting shareholders in a takeover bid
is to be approached. Accordingly, it is important to note two principles which
emerge from the cases which may guide the court in fixing fair value.
The first of these relate to the onus of proving fair value. On this it was held
in the British Columbia Supreme Court case of Hudson Bay Mining &
Smelting Co v Lueck55 that, once the 90 per cent acceptance has been obtained,
the onus rests upon a dissenting shareholder to affirmatively establish that the
takeover offer is unfair on a balance of probabilities. This approach stems from
the general rule that a party who asserts a proposition has the onus of
establishing it. It is also a reflection of the court’s reluctance to substitute its
judgment for that of an overwhelming majority of shareholders.
The second relates to the problem of determining the fair value of the
shares of dissenting shareholders. This is left entirely to the exercise of the
judgment of the court.56 In exercising their judgment, the courts have
consistently held that the question of determining fair value depends on the
particular facts of each case and cannot be reduced to a formula or set of rules.
The only true rule is to consider all the evidence that might be helpful. No
method of determining value should be rejected. Each formula that might
prove useful should be worked out using evidence, mathematics, assessment,
judgment or whatever is required.57 It is to be noted that fair value is to be
determined for all dissenting shareholders and not with respect to personal
factors affecting individual dissenting shareholders.58
Companies Regulations on Takeover Bids
Overview
The Companies Acts in Barbados and Trinidad and Tobago contain provisions
conferring a power on the relevant Minister to make regulations to govern
takeover bids. In Barbados, section 195B(1) of the Companies Acts provides
for the relevant Minister, after consultation with the Barbados Stock
Exchange, to make regulations respecting the procedure for all takeover bids.
In Trinidad and Tobago, the power conferred on the relevant Minister in
section 213(1) of the Companies Act is limited to making regulations in respect
of companies other than public companies.
No regulations pursuant to section 213(1) have been made in Trinidad and
Tobago. However, in Barbados, the Take-over Bid Regulations 2002 have been
promulgated pursuant to the powers conferred by section 195B(1) of the
parent Act. The major focus of these regulations is the establishment of a set
of rules intended to deal with problems perceived to be associated with
takeover bids. Given their obvious objective and their content, these
Regulations may be conveniently examined within the context of the
perceived takeover bids problem with which the rules are intended to deal.
The mandatory offers rules
An obvious problem which must be confronted in takeover bids is that of

ensuring equality of treatment of all shareholders of the offeree company. This
problem appears to be recognised and dealt with in the Barbados Take-over
Bid Regulations 2002. The clearest evidence of this is to be found in the
provision on mandatory offers.59
The Regulations provide that where a person directly or indirectly acquires
25 per cent or more of the equity of a company, that person must deliver by
registered mail to the Regulator60 and to the company within twenty-four
hours of the acquisition, a written statement containing specified information.
The statement must contain information on the identity, occupation, place of
residence and citizenship of the person acquiring the equity of the company.61
The statement must also contain a declaration as to (i) the amount of equity
being acquired in the company and confirming trigger of the takeover code;62
(ii) the share price at which the equity was purchased;63 (iii) the purpose of the
acquisition;64 (iv) whether further purchases of equity in the company are
intended;65 and (v) whether that person intends to acquire control of the
business or majority shareholding in the company.66
Where the declaration states that the person intends to acquire control of
the company, that person is under an obligation to mail or deliver a takeover
bid circular to each registered shareholder of the company.67 This circular must
invite each registered shareholder to tender his shares at the same price as, or,
at a better price than the share price at which the equity was purchased, or in
exchange for other equivalent or better consideration.68 The takeover bid
circular must be mailed or delivered to each registered shareholder within
seven days of the date of the purchase of the equity, and not less than twenty-
eight days before the date on which the takeover bid is to close.69
In sum, the mandatory offers provision mandates an offeror to make an
offer to all the shareholders of an offeree company in a situation where he, the
offeror, has already obtained substantial control of the company and might not
therefore be inclined to make an offer to these shareholders. It is submitted
that the rationale for this mandate is the equality of treatment principle,
namely, that since the shareholders from whom the offeror acquired the shares
which put him in control were able to exit the company on a change of
control, the remaining shareholders should be given the same opportunity.
The takeover bid circular rules

The problem
One of the most egregious concerns in takeover bids is the need for offeree
shareholders to have sufficient information to assess the offer adequately. This
concern arises out of the practice of offeree shareholders being sent nothing
more than an offer with, for instance, little or no information on the offeror,
his ability to finance the offer adequately, or, the purpose of the offer. An
equally pressing need is for offeree shareholders to be afforded sufficient time
to assess the information in the offer. This is to deal with the practice of offers
being open for only a short period of time and thus denying offeree
shareholders time to assess the offer and any information therein.
Time for mailing takeover bid circular
In order to ensure that offeree shareholders are supplied with relevant

information and allowed time to assess this information, the Regulations
contain provisions requiring the offeror to deliver an offer document called a
takeover bid circular within a stipulated time. Accordingly, it is provided that
an offeror making a takeover bid must mail or deliver to each registered
shareholder of the offeree company a takeover bid circular inviting
shareholders to tender their shares to the takeover bidder.70 To allow the
offeree shareholders time to assess the information, the Regulations stipulate
that the takeover bid circular must be mailed not less than twenty-eight days
before the date on which the takeover bid is to close.71 If the takeover bid is
subsequently varied in any material respect, the closing date of the takeover
bid must be extended by fourteen days.72
Information in takeover bid circulars generally
The information which must be included in a takeover bid circular depends

upon the category specified in the Regulations into which the takeover bid
falls. Be that as it may, every takeover bid circular, except a takeover bid
which is made by a company to repurchase its own shares,73 must contain the
following information:
(a) the identity and business background of the offeror;74

(b) a statement of the withdrawal rights of offerees and the dates before
which and after which offerees who deposit their shares may exercise
those rights;75
(c) the date on which any other time period mentioned in the circular
begins or ends;76
(d) the details of the method and time of payment of the money or other
consideration to be paid for the shares of the offeree company;77
(e) where the obligation of the offeror to take up and pay for shares
under a takeover bid is conditional upon a minimum number of shares
being deposited, the details of the condition;78
(f) the number, without duplication, and designation of any securities of
the offeree company beneficially owned or over which control or
direction is exercised by (i) the offeror, (ii) an associate or affiliate of
the offeror, (iii) each director and each officer of the offeror and their
respective associates, and (iv) any person known to the directors or
officers of the offeror who beneficially owns or exercises control or
direction over shares of the offeror carrying more than 25 per cent of
the votes attached to shares of the offeror, or, where none are so
owned, controlled or directed, a statement to that effect;79
(g) where known to the directors or officers of the offeror, the number
and designation of any shares of the offeree company traded by a
person referred to in (f) during the six months preceding the date of
the takeover bid, including the purchase or sale price and the date of
each transaction;80
(h) details of any contract, arrangement or understanding, formal or
informal between the offeror and (i) any shareholder of the offeree
company with respect to the takeover bid; and (ii) any person with
respect to any shares of the offeree company in relation to the
takeover bid;81
(i) where the shares of the offeree company are to paid for wholly or
partly in money, details of any arrangements that have been made by
the offeror to ensure that the required funds are available to take up
and pay for the shares of the offeree company deposited pursuant to
the takeover bid;82
( j) details of any contract or arrangement made or proposed to be made
between the offeror and any of the directors or officers of the offeree
company, including details of any payment of any other benefit
proposed to be made or given by way compensation in respect of loss
of office or in respect of their remaining in or retiring from office if the
takeover bid is successful;83
(k) details of any business relationship between the offeror and offeree
company that is material to either of them;84
(l) where a purpose of the takeover bid is to acquire effective control of
the business of the offeree company, any plans or proposals that the
offeror has to liquidate the offeree company, to sell, lease or exchange
all or substantially all of its assets or to amalgamate it with any other
company, or to make any other major change in its business, corporate
structure, management or personnel;85
(m) where the offeror intends to invoke his statutory right to acquire
compulsorily the shares of offerees who do not accept the takeover
bid, (i) the statement of that intention, and (ii) a statement of the right
of an offeree to dissent and to demand the fair value of his shares and
the method by which it may be acquired;86
(n) where reasonably ascertainable, a summary showing, in reasonable
detail for the six months preceding the date of the takeover bid, the
volume of trading and price-range of the shares sought to be acquired
pursuant to the takeover bid;87
(o) particulars of any information known to the offeror that indicates any
material change in the financial position or prospects of the offereee
company since the date of the most recent publicly filed interim or
annual financial statement of the offeree company;88 and
(p) all other material facts known to the offeror.89
Information where the consideration is offeror’s securities
Where all or any part of the consideration being offered is the securities of the
offeror, the takeover bid circular must, in addition to the information that
must be included in takeover bid circulars generally, include the following
information:
(a) the financial statements of the offeror on a pro forma basis as of the
date of the offeror’s financial statement giving effect to the takeover
bid based on the information in the most recent publicly filed financial
statements of the offeree company;90
(b) a description of the financial statements of the offeree company relied
upon and of the basis of preparation of the pro forma financial
statements;91
(c) basic and fully diluted earnings per share figures prepared in
accordance with international accounting standards based upon the pro
forma financial statements;92 and
(d) a reasonable statement of the plans of the offeror for the offeree
company, including a summary of the consolidated financial results on
a fully diluted basis.93
Information where offeror exercises control
Where the offeror exercises effective control over the offeree company when
the offeree makes a takeover bid, then the takeover bid circular must also
contain the information to be included in a director’s circular unless that
information is already contained in the takeover bid circular.94
Information where offeror repurchasing own shares
Where a takeover bid is made by a company to repurchase its own shares, the
takeover bid circular must contain, instead of the information which must be
contained in other takeover bid circulars generally, the following:
(a) the identity of the offeror;95

(b) a statement of the withdrawal rights of offerees and the dates before
which and after which offerees who deposit their shares may exercise
those rights;96
(c) the date on which any other time period mentioned in the circular
begins or ends;97
(d) the details of the method and time of payment of the money or other
consideration to be paid for the shares of the offeree company;98
(e) where the obligation of the offeror to take up and pay for shares
under a takeover bid is conditional upon a minimum number of shares
being deposited, the details of the condition;99
(f) details of all service contracts of directors and officers of the offeree
company or any of its affiliates with more than a twelve-month period
remaining or, if there are no such contracts, a statement of that fact;100
(g) where any such contract has been entered into or amended within the
six months preceding the date of the takeover bid, the details of the
contract replaced or amended;101
(h) details of any contract or arrangement made or proposed to be made
company, including details of any payment or other benefit proposed
to be made or given by way of compensation in respect of loss of
office or in respect of their remaining in or retiring from office if the
(i) where reasonably ascertainable, a summary showing, in reasonable
detail for the twelve months preceding the date of the takeover bid,
the volume of trading and price-range of the shares sought to be
acquired pursuant to the takeover bid;103
( j) the number, without duplication, and designation of any securities of
the company beneficially owned over which control or direction is
exercised by (i) each director and each officer of the company and
their respective associates, (ii) any person known to the directors or
officers who beneficially owns or exercises control or direction of the
company carrying more than 10 per cent of the votes attached to
shares of the company, and (iii) an associate or affiliate of the
company, or if none are so owned, controlled or directed, a statement
to that effect;104
(k) where known to the directors or officers of the company, the number
and designation of any shares traded by any person referred to in
paragraph (i) during the twelve months preceding the date of the
takeover bid, including the purchase or sale price and the date of each
transaction;105
(l) the number and designation of any shares of the company traded, that
is, the sales and purchases, by the company during the twelve months
preceding the date of the takeover bid, including the purchase or sale
price, the date and the purpose of the transaction;106
(m) where known to the directors or officers of the company, whether
any person referred to in paragraph (i) accepted or intends to accept
the offer in respect of any shares of the company;107
(n) details of the effects of the takeover bid on the company, the persons
referred to in paragraph (i) and the offerees;108
(o) the purpose of the takeover bid, including any plans or proposals to
liquidate the company, to sell, lease or exchange all or substantially all
of its assets, or to amalgamate it with any other company, or to make
any major changes in its business, corporate structure, management or
personnel;109
(p) financial statements of the company prepared for public filing
subsequent to the date of its most recently publicly filed financial
statements and not previously sent to shareholders;110
(q) where the information contained in the most recent financial
statements of the offeree company is materially misleading because of
events subsequent to its preparation, a statement of the material events
necessary to correct any such misleading representations;111
(r) details of any information known to any director or officer of the
offeree company concerning any material change in the prospects of
the offeree company since the date of the last financial statements of
the offeree company;112
(s) where the offeror is a company, the number and designation of any
securities of the offeror beneficially owned or over which control or
direction is exercised by the offeree company;113
(t) a summary of any appraisal, known to the directors or officers of the
company, its material assets or securities within the two-year period
preceding the date of the takeover bid;114
(u) where the shares of the class subject to the takeover bid were offered
to the public by the company during the last five years preceding the
date of the takeover bid, the offering price per share, and the
aggregate proceeds received by the company;115
(v) the frequency and amount of dividends with respect to shares of the
company during the two years preceding the date of the takeover bid,
any restrictions on the ability of the company to pay dividends and any
plan or intention to declare a dividend or to alter the dividend policy
of the company;116
(w) a general description of the income tax consequences of the takeover
bid to the company and offerees;117
(x) where the offerees are to be solicited otherwise than by mail, the
identity of all persons employed or retained by the company for that
purpose, the material features of any contract or arrangement for the
solicitation, the parties to the contract or arrangement and the cost or
anticipated cost thereof;118
(y) a statement of the expenses incurred or to be incurred in connection
with the takeover bid;119 and
(z) all other material facts known to the directors or officers of the
company.120
Information where offeror is a company
Where the offeror is a company, the takeover bid circular must contain a
statement, signed by one or more directors, that the contents and the sending
of the circular have been approved by the directors of the offeror.121
The rules on permissible conditions on a formal offer
Regulation 12 stipulates that, as a general rule, a takeover bid must be made

without conditions. The only exception to this is the condition that the
takeover bid may be withdrawn in certain legislatively sanctioned
eventualities. These include the condition that (i) a specified percentage of the
shares that are outstanding and not already owned are not tendered;122 (ii) a
government or government agency moves to prevent it from proceeding or to
alter the status of the offeree company materially;123 or (iii) a natural disaster
or the directors of the offeree company intervene between the making of the
offer and the closing date to change materially the value or nature of the
offeree company.124
The Directors’ Circular Rules
Another elaborate set of rules in the Regulations designed to ensure adequate

shareholder information in a takeover bid centre around directors’ circulars.
The basic rule here is that where a takeover bid is made to the shareholders of
a company, the directors of that company are under an obligation to provide
to such shareholders, within ten days of the date of the takeover bid,125 up-to-
date information relevant to the company and the position of the directors, in
a directors’ circular.126 The directors’ circular must also provide a
recommendation to shareholders concerning acceptance of the takeover bid,127
disclose what course of action the directors plan to take,128 and disclose the
other information required by the Regulations to be contained in a directors’
circular.129
The other information which must be included in a directors’ circular consist
mainly of information over which directors have control. Thus, a directors’
circular must contain the following:
(a) the number, without duplication, and designation of any securities of

the offeree company beneficially owned or over which control or
direction is exercised (i) by each director and each officer of the offeree
company and their associates, and (ii) where known to the directors or
officers, by each person who beneficially owns or exercises control or
direction over the shares of the offeree company carrying more than
10 per cent of the votes attached to shares of the offeree company.
Where none are so owned, controlled or directed, a statement to that
effect;130
(b) where the offeror is a company, the number, without duplication, and
designation of any securities of the offeror beneficially owned or over
which control or direction is exercised (i) by each director and officer
of the offeree company or their associates, and (ii) where known to the
directors or officers, by each person who beneficially owns or exercises
control or direction over shares of the offeree company carrying more
than 10 per cent of the votes attached to shares of the offeree
company. Where none are so owned, controlled or directed, a
statement to that effect.131
(c) where known to the directors or officers of the offeree company, the
number and designation of any shares of the offeree company traded
by referred to in paragraphs (a) and (b) during the six months
price of each transaction;132
(d) where the offeror is a company, the number and designation of any
securities of the offeror beneficially owned or over which control or
direction is exercised by the offeree company;133
(e) the number and designation of any shares of the offeree company or
the offeror traded by the offeree company during the six months
price, the date and the purpose of each transaction;134
(f) where the directors (i) make a recommendation in relation to the
takeover bid, a statement of the recommendation and the reason for
the recommendation; or (ii) do not recommend acceptance or rejection
of a takeover bid, the reasons for their failure to make a
recommendation and, if a reason is a division among the directors, the
nature of the division;135
(g) whether (i) a director or officer of the offeree company or an
associate of such director or officer, or (ii) where known to the
directors or officers, any person who beneficially owns or exercises
control or direction over shares of the offeree company carrying more
than 10 per cent of the votes attached to the shares of the offeree
company has accepted or intends to accept the offer in respect of any
shares of the offeree company;136
(h) whether a person referred to in paragraph (g) has any interest in any
material contract to which the offeror is a party and, if so, details of the
nature and extent of the interest;137
(i) details of all service contracts of directors and officers of the offeree
company or any of its affiliates with more than a twelve-month period
remaining or, if there are no such contracts, a statement of that fact;138
( j) where any such contract has been entered into or amended within the
six months preceding the date of the takeover bid, the details of the
contract replaced or amended;139
(k) details of any contract or arrangement made or proposed to be made
company, including details of any payment or other benefit proposed
to be made or given by way of compensation in respect of loss of
office or in respect of their remaining in or retiring from office if the
(l) where known to the directors or officers of the offeree company, the
details of any special contract, arrangement or understanding, formal
or informal, made or proposed to be made between the offeror and
any shareholder of the offeree company with respect to the takeover
bid;141
(m) where reasonably ascertainable, a summary showing, in reasonable
detail for the six months preceding the date of the takeover bid, the
volume of trading and the price-range of the shares sought to be
acquired pursuant to the takeover bid if such information is not
disclosed in the takeover bid circular or if, in the opinion of the
directors of the offeree company, such information is not adequately
disclosed therein;142
(n) financial statements of the offeree company prepared for public filing
subsequent to the date of its most recent publicly filed financial
statements and not previously sent to shareholders;143
(o) where the information contained in the most recent financial
statements of the offeree company is materially misleading because of
events subsequent to its preparation, a statement of the material events
necessary to correct any such misleading representations;144
(p) details of any information known to any director or officer of the
offeree company concerning any material change in the prospects of
the offeree company since the date of the last financial statements of
the offeree company;145
(q) where a director or officer of the offeree company intends to purchase
shares of the offeree company during a takeover bid or where he
knows of the existence of such an intention on the part of any person,
a statement of intention and the purpose of such purchases, or if no
such intention is known to exist, a statement to that effect;146 and
(r) all other material facts known to the directors or officers of the offeree
company.147
The rule against unequal consideration
The Regulations contain provisions dealing with the concern that a currently
controlling shareholder might be made an offer to the exclusion of other
shareholders.148 Thus, the Regulations decree the rule that all offeree
shareholders must receive exactly the same consideration or choices of
consideration.149 Similarly, the Regulations stipulate that a currently
controlling shareholder may not sell out without all shareholders having the
same opportunity at the same time and the same price.150 Finally, the
Regulations forbids a company from repurchasing more than 10 per cent of its
own shares except on a takeover bid made equally to all shareholders.151
Where the amount is not more than 10 per cent, the repurchase must be done
by way of a market purchase takeover bid made on the floor of the Exchange
by posted bids which are open to any seller and subject to the prior approval
of the shareholders in general meeting.152
The rule against lock-up of shares
The need to regulate the withdrawal rights of shares tendered by offeree

shareholders in order to avoid the ‘lock-up’ of tendered shares has also been
cited as a concern in takeover bids. A ‘lock-up’ is said to exist where shares are
tendered without withdrawal rights and consequently are not available for
tender under a subsequent bid. The practical effect of this is that an offeree
shareholder whose shares are ‘locked-up’ is denied the opportunity to tender
his shares under a competing higher bid.
Even though with the mandatory offer rule and the equal consideration rule
it would not generally make sense for an offeree shareholder to tender early,
the Regulations still contain a provision preventing the lock-up of shares to
protect those shareholders who tender early. Thus, the Regulations state that a
shareholder may withdraw his shares from a takeover bid at anytime up to
two business days prior to the close of the takeover bid.153 It should be noted
that if the takeover bid is subsequently varied in any material respect, the
withdrawal right is extended by fourteen days.154
The rule that offeror must take up and pay for shares
The Regulations contain provisions which seek to address the concern that
offeree shareholders may end up being creditors of an offeror which has
inadequately financed a takeover bid. Thus, the Regulations provide, first of
all, that within two business days after the close of the takeover bid, the
offeror must announce whether he is proceeding with the offer or whether
there is an unfulfilled condition which he is invoking in order to withdraw the
offer and return the shares.155 Second, the Regulations provide that where the
takeover bid is withdrawn, the shares must be returned.156 Third, they decree
that a withdrawing offeror is liable for any damages resulting from the tardy
return of deposited shares.157 Finally, they stipulate that if the offeror elects to
complete the takeover bid, he must take up and pay for the shares within
thirty days of the closing of the offer.158
The rule that offeror must appoint member of the Exchange as

manager
A concern with takeover bids is that the offeror may not be inclined to impose
on itself any stringent obligations with respect to such matters as the taking up
of shares tendered by the offeree shareholder or the due date for payment on
these shares. The Regulations contain provisions to meet this concern. The first
such provision lays it down that the offeror on a takeover bid must appoint
one or more members of the Exchange as manager, one of whom must be a
clearing and settling member.159 The second provision states that shares must
be tendered directly or through other members of the Exchange to the
manager so appointed.160 The final provision stipulates that where other
members of the Exchange are involved in the processing of tenders, the
manager shall pay them a reasonable commission for processing the
tenders.161
The special rules in respect of listed companies
The Regulations contain two special rules which apply specifically to listed
companies. The first rule is that a shareholder who owns 10 per cent or more
of the shares of a listed company must declare every trade of those shares to
the Exchange within one week of each trade.162 The second rule is that a
market purchase takeover bid for the shares of a listed offeree company made
on the floor of the Exchange by the issuer itself or by an insider of the issuer
which, when combined with the number of shares purchased by the issuer,
insider or their associates and affiliates in the preceding 180 days, must not
exceed 10 per cent of the shares which are not already owned by the issuer,
insider and their associates and affiliates, and is deemed to have been made
through the Exchange.163
Takeover Bid Defences
The poison pill defence
Management of a takeover target may implement any of a variety of

defensive tactics in order to repel, or at least delay, potential hostile takeover
bids. One such tactic which has excited considerable attention is what is
commonly called the ‘poison pill’. The poison pill tactic involves the use in a
hostile takeover bid of shareholders’ rights plans by the target company and
can take many forms. The fundamental motivation which underlies the
various plans is that the poison pill will make it more expensive for a hostile
bidder to gain control of the target company without the cooperation of the
target management.
An example of a form of poison pill is the ‘poison pill preferred’ plan. This
plan consists of a potential target company creating a class of ‘preferred’
shares which are distributed to existing shareholders by way of a stock
dividend. Typically, such shares are convertible into common shares of the
target company. If a bidder acquires a specified percentage of the voting rights
of the target company, a right to redeem accrues to the holders of these shares.
The right to redeem may also be conditional on the successful bidder not
effecting an amalgamation within a specified time. The redemption price is set
so as to ensure that the shareholders receive a fair price for the shares.
In order to ensure that the shareholder is not squeezed out at an unfair price
in a post-takeover amalgamation, poison pill preferred shares may be given a
right to equivalent substitute shares in any post-takeover bid amalgamated
company. Where there is a post-takeover amalgamation, the conversion right
given on the preferred shares ‘flip over’ to the amalgamated company thereby
entitling the preferred shareholder to convert the preferred shares into the
common shares of the amalgamated company. The creation of a class of
poison pill preferred shares can only be achieved with shareholder approval.
An example of a form of poison pill which can be employed without
shareholder approval is the ‘flip in’.164 Here, shareholders are given a special
dividend consisting, for instance, of a right to purchase one voting share for
each ordinary share then held. This right is exercisable within a stipulated time
after a bidder acquires more than a specified percentage of the target
company’s voting rights, or after a date designated by the management of the
target company following the commencement of a takeover bid. The ‘flip in’
entitles non-tendering shareholders, other than the bidder, to purchase the
voting shares in the target company at a substantially reduced price from the
market price at the time of exercise. The management of the target company
retains the power to redeem the rights at a nominal price within a specified
time period. This provides the management of the target company with a tool
to remove the effects of a ‘flip in’ if it negotiates an acceptable arrangement
with the bidder.
Validity of takeover bid defences
Two tests for assessing the validity of takeover bids defence measures may be
found in Commonwealth company law. These are the ‘proper purpose’ test
and the ‘best interests’ test. These two tests are fully explored in Chapter 11.
Nonetheless, it may be useful to consider them here with specific reference to
the poison pill defence.
In the Privy Council decision of Howard Smith Ltd v Ampol Petroleum
Ltd,165 Lord Wilberforce explained that the correct approach to the proper
purpose test was:166
to start with a consideration of the power whose exercise is in question, in this case a power to issue
shares. Having ascertained, on a fair view, the nature of this power, and having defined as can best be done
in light of modern conditions the, or some, limits within which it may be exercised, it is then necessary for
the court, if a particular exercise of it is challenged, to examine the substantial purpose for which it was
exercised, and to reach a conclusion whether that purpose was proper or not.
If the substantial purpose for which the power was used is inconsistent with
the nature of the purposes for which the power was intended, then the power
is said to have been exercised for an improper purpose.
The proper purpose test was applied by Astwood CJ in the Supreme Court
of Bermuda in the case of Stenna Finance BV v Sea Containers Ltd.167 In this
case, the board of directors of Sea Containers adopted a poison pill plan in
anticipation of a hostile takeover. The plan provided for a dividend of one
right for each common share of Sea Containers payable to existing
shareholders. Each right entitled the holder to have issued to him upon the
happening of a triggering event, namely, the acquisition by a person or group
of 20 per cent of Sea Containers’ common shares, one-hundredth of a share of
Sea Containers Series A Junior participating shares of $0.1 par value with an
exercise price of $110. The rights were not exercisable or transferable
independently of the common shares until ten days after the occurrence of the
triggering event.
The objectives of the plan were outlined in a letter from the directors to the
shareholders. Basically, the letter explained that the plan was designed to
protect shareholders against hostile attempts to acquire control of Sea
Containers, whether through accumulation of shares in the open market or
tender offers that did not offer to all shareholders what the directors
considered to be an adequate price.
The Supreme Court held that the poison pill plan was valid. The Court
reached this conclusion on the basis that the board of directors had a power to
declare a dividend and that this power was not being used for an improper
purpose. This was a clear application of the proper purpose test.
As was seen in Chapter 11, directors in the Commonwealth Caribbean
jurisdictions with provisions similar to section 95(1)(a) of the Barbados
Companies Act168 are under a statutory duty to act in the best interests of the
company. In Teck Corpn Ltd v Millar,169 Berger J, after reviewing the law with
respect to the proper purpose test, opined that the proper purpose test was
inconsistent with the general duty on directors to act in the best interests of
the company. He held that defensive tactics employed by the board of
directors to repel a takeover would be invalid only if the directors did not act
in the best interests of the company. There is, however, a lack of certainty in
the case law as to what constitutes ‘the best interests of the company’.
One line of cases holds that, to satisfy ‘the best interests of the company’
requirement, the directors must have acted in good faith, and must provide
reasonable grounds for their belief.170 The case of Exco Corpn v Nova Scotia
Savings & Loan Co,171 on the other hand, proposes a somewhat stricter
approach. According to this case, the considerations of the board of directors
upon which the decision to act was based must be consistent only with the
best interests of the company and inconsistent with any other interests. An
even stricter approach is to be found in the Saskatchewan Court of Appeal
decision of 347883 Alberta Ltd v Producers Pipelines Inc.172 In that case, the
Court stated the approach as follows:
When a corporation is faced with susceptibility to a takeover bid or an actual takeover bid, the directors
must exercise their powers in accordance with their overriding duty to act bona fide and in the best
interests of the corporation even though they may find themselves, through no fault of their own, in a
conflict of interest situation. If, after investigation, they determine that action is necessary to advance the
best interests of the company, they may act, but the onus will be on them to show that their acts were
reasonable in relation to the threat posed and were directed to the benefit of the corporation and its
shareholders as a whole, and not for an improper purpose such as entrenchment of the directors.173
Given the statutory formulation of the directors’ duty to act honestly and in
the best interests of the company, it is submitted that the ‘best interests’ test is
the correct test to apply in Commonwealth Caribbean jurisdictions with
provisions similar to section 95(1)(a) of the Barbados Companies Act.174 This
said, however, it is not clear which of the approaches found in the cases in
determining what is in the best interests of the company will be adopted by
the courts in these jurisdictions. It is submitted that there is much to be said for
the approach of the Saskatchewan Court of Appeal decision of 347883 Alberta
Ltd v Producers Pipelines Inc.175
Conclusion
The provisions on takeover bids in the Companies Acts in Antigua, Barbados,
Tobago are very limited in intent and scope. They are not intended to protect
the investing public from potential abuses in takeover bids and do not
interfere with the takeover bid procedure. They are concerned exclusively
with the rights of an offeror who makes a takeover bid for all the shares of a
class of shares to which the takeover bid relates and a shareholder who does
not accept the takeover bid.
The Barbados Take-over Bids Regulations, on the other hand, is intended to
be a code providing investor protection to the public in takeover bids.
Accordingly, it sets out a comprehensive set of rules to be followed in
takeover bids. In many respects these rules are similar to the takeover bids
rules in the securities legislation in the Commonwealth Caribbean.
Notes
1 Ant Part I, Division J; B’dos Part I, Division J; Dom Part I, Division J; Gren Part I, Division J; Guy Part II,
Division J; Mont Part I, Division J; St L Part I, Division J; St V Part I, Division J; T’dad Part III, Division 10.
2 See, Ang Securities Act 2001, RSA Cap s 13; Ant Securities Act 2001; Bah Security Industries Act 1999; Dom
Securities Act 2001; Gren Securities Act 2001; Guy Securities Act 1998; J’ca Securities Act 1993; St C/N
Securities Act 2001; St L Securities Act 2001; St V Securities Act 2001; T’dad Securities Industry Act 1995.
3 For background discussion of takeovers see, e.g., Gilson, Law and Finance of Corporate Acquisitions (New
York: 1986) 255–498; Clark, Corporation Law (Boston: 1986) 531–546; Klein and Coffee Jr, Business
Organisation and Finance: Legal and Economic Principles (2nd edn, New York: 1996) 180–190; Kouloridas,
The Law and Economics of Takeovers: An Acquirer’s Perspective (Oxford: 2008).
201(a); T’dad s 201(a).
7 (1998) 40 OR (3d) 672 Ont SC, affd 42 OR (3d) 732 Ont CA.
11 Ant s 201(b); Dom s 201(b); Gren s 201(b); Guy s 205(b); Mont s 201(b); St L s 201(b); St V s 201(b); T’dad s
201(b).
12 Ant s 201(g); B’dos s 185(g); Dom s 201(g); Gren s 201(g); Guy s 205(g); Mont 201(g); St L s 201(g); St V s
201(g); T’dad s 201(g).
13 B’dos s 185(b).
14 Ant s 201(f); B’dos s 185(f); Dom s 201(f); Gren s 201(f); Guy s 205(f); Mont 201(f); St L s 201(f); St V s 201(f);
T’dad s 201(f).
15 Ant s 201(f)(i); B’dos s 185(f)(i); Dom s 201(f)(i); Gren s 201(f)(i); Guy s 205(f)(i); Mont s 201(f)(i); St L s
201(f)(i); St V s 201(f)(i); T’dad s 201(f)(i).
16 Ant s 201(f)(ii); B’dos s 185(f)(ii); Dom s 201(f)(ii); Gren s 201(f)(ii); Guy s 205(f)(ii); Mont s 201(f)(ii); St L s
201(f)(ii); St V s 201(f)(ii); T’dad s 201(f)(ii).
201(b); T’dad s 201(b).
18 [1992] BCLC 192.
203(a); T’dad s 203(a).
203(b); T’dad s 203(b).
24 Ant s 203(c)(i); B’dos s 187(c)(i); Dom s 203(c)(i); Gren s 203(c)(i); Guy s 207(c)(i); Mont s 203(c)(i); St L s
203(c)(i); St V s 203(c)(i); T’dad s 203(c)(i).
25 Ant s 203(c)(ii); B’dos s 187(c)(ii); Dom s 203(c)(ii); Gren s 203(c)(ii); Guy s 207(c)(ii); Mont s 203(c)(ii); St L s
203(c)(ii); St V s 203(c)(ii); T’dad s 203(c)(ii).
203(d); T’dad s 203(d).
203(e); T’dad s 203(e).
28 (1998) 40 OR (3d) 672 Ont SC, affd 42 OR (3d) 732 Ont CA. See also Re Anthem Works Ltd [2005] 5 BLR
(4th) 298 BC SC.
30 Ant s 206; B’dos s 190; Dom s 206; Gren s 206; Guy s 210; St L s 206; Mont s 206; St V s 206; T’dad s 206.
208(a); T’dad s 208(a).
208(b); T’dad s 208(b).
36 Ant s 208(c)(i); B’dos s 192(c)(i); Dom s 208(c)(i); Gren s 208(c)(i); Guy s 212(c)(i); Mont s 208(c)(i); St L s
208(c)(i); St V s 208(c)(i); T’dad s 208(c)(i).
37 Ant s 208(c)(ii); B’dos s 192(c)(ii); Dom s 208(c)(ii); Gren s 208(c)(ii); Guy s 212(c)(ii); Mont s 208(c)(ii); St L s
208(c)(ii); St V s 208(c)(ii); T’dad s 208(c)(ii).
38 Ant s 208(c)(iii); B’dos s 192(c)(iii); Dom s 208(c)(iii); Gren s 208(c)(iii); Guy s 212(c)(iii); Mont s 208(c)(iii); St
L s 208(c)(iii); St V s 208(c)(iii); T’dad s 208(c)(iii).
209(1); T’dad s 209(1).
209(2); T’dad s 209(2).
209(3); T’dad s 209(3).
210(a); T’dad s 210(a).
210(b); T’dad s 210(b).
211(1); T’dad s 211(1).
211(1); T’dad s 211(1).
211(2); T’dad s 211(2).
211(3); T’dad s 211(3).
49 (1998) 40 OR (3d) 672 Ont SC, affd 42 OR (3d) 732 Ont CA. See also Re Anthem Works Ltd [2005] 5 BLR
(4th) 298 BC SC.
212(a); T’dad s 212(a).
212(b); T’dad s 212(b).
212(c); T’dad s 212(c). As to the exercise of this power, see Manning v Harris Steel Group (1989) 63 DLR 125
BC CA; Nunachiaq Inc v Chow (1993) 8 BLR (2d) 109 BC SC.
212(d); T’dad s 212(d).
55 (1980) 10 BLR 113 BC SC.
56 Neonex International Ltd v Kolsa (1978) 84 DLR (3d) 446 BC SC.
57 Cyprus Anvil Mining Corp v Dickson (1986) 8 BCLR (2d) 145 BC CA; Nunachiaq Inc v Chow (1993) 8 BLR
(2d) 109 BC SC.
58 Re Grierson, Oldham and Adams Ltd [1968] Ch 17 Eng Ch D; Manning v Harris Steel Group (1989) 63 DLR
125 BC CA.
59 B’dos reg 4.
60 Defined in reg 4(1) as the Barbados Securities Commission.
61 B’dos reg 4(2)(a).
62 B’dos reg 4(2)(b)(i)
63 B’dos reg 4(2)(b)(ii).
64 B’dos reg 4(2)(b)(iii).
65 B’dos reg 4(2)(b)(iv).
66 B’dos reg 4(2)(b)(v).

67 B’dos reg 4(3).
68 B’dos reg 4(3).
69 B’dos reg 4(4).
70 B’dos reg 5.
71 B’dos reg 6(1).
72 B’dos reg 6(2).
73 See B’dos reg 10.
74 B’dos reg 7(a).
75 B’dos reg 7(b).
76 B’dos reg 7(c).
77 B’dos reg 7(d).
78 B’dos reg 7(e).
79 B’dos reg 7(f).
80 B’dos reg 7(g).
81 B’dos reg 7(h).
82 B’dos reg 7(i).
83 B’dos reg 7(j).
84 B’dos reg 7(k).
85 B’dos reg 7(l).
86 B’dos reg 7(m).
87 B’dos reg 7(n).
88 B’dos reg 7(o).
89 B’dos reg 7(p).

94 B’dos reg 9.
111 B’dos reg 10(q).
112 B’dos reg 10(r).
113 B’dos reg 10(s).
114 B’dos reg 10(t).
115 B’dos reg 10(u).
116 B’dos reg 10(v).
117 B’dos reg 10(w).
118 B’dos reg 10(x).

119 B’dos reg 10(y).
120 B’dos reg 10(z).
121 B’dos reg 11.
125 B’dos reg 15(2).

146 B’dos reg 14(q).
147 B’dos reg 14(r).
148 B’dos reg 16.
149 B’dos reg 16(1).
150 B’dos reg 16(2).
151 B’dos reg 16(3).
152 B’dos reg 16(3).
153 B’dos reg 17.
154 B’dos reg 6(2).
155 B’dos reg 18(1).
156 B’dos reg 18(2).
157 B’dos reg 18(3).
158 B’dos reg 18(4).
159 B’dos reg 19(1).
160 B’dos reg 19(2).
161 B’dos reg 19(3).
162 B’dos reg 20.
163 B’dos reg 21.
164 For an example of this type of poison pill in Commonwealth Caribbean case law see Stenna Finance BV v
Sea Containers Ltd (1989) 39 WIR 83 Ber SC. Discussed by Walcott ‘Poison Pills in the Commonwealth
Caribbean: Stenna Finance BV v Sea Containers Ltd’ [1996] JBL 206.
165 [1974] AC 821 PC.
166 [1974] AC 821, 835 PC.
167 (1989) 39 WIR 83 Ber SC.
169 (1972) 33 DLR (3d) 288 BC SC.
170 Teck Corporation Ltd v Millar (1972) 33 DLR (3d) 288 BC SC; Olympia & York Enterprises v Hiram Walker
Resources Ltd (1986) 59 OR (2d) 254 Ont Div Ct.
171 (1987) 35 BLR 149 NS SC.
172 (1991) 80 DLR (4th) 359 Sask CA.
173 (1991) 4 WWR 577, 595 Sask CA.
174 See Ang s 97(1)(a); Ant s 97(1)(a); Bah s 84(1)(a); Dom s 97(1)(a); Gren s 97(1)(a);Guy s 96(1)(a); J’ca s 174(1)
175 (1991) 80 DLR (4th) 359 Sask CA.

Index
accountants 36, 455 see also auditors

accounting records 516–517, 564
receivers and receiver-managers 467–468, 470
accounts see financial statements
affiliated companies 90
non-cash consideration for shares 148–149
agency 121–122
attribution of corporate civil liability 102–103
corporate see authority of agents
fiduciary duties 232, 234, 474
piercing/lifting corporate veil 96–98
problems and appraisal remedy 362
proxies 301
records, company 565
registers, corporate 562
amalgamations 13, 494, 498
appraisal remedy 358, 359
fair value and premiums 366
arrangements 509
by agreement
approval of 500–501
contents of 498–500
certificate 503
definitions and concepts
common law 495–496
Companies Acts 496–497
external companies 29
horizontal short-form 501–502
legal consequences of 497–498
oppression remedy 336
registration of 502–503
takeover by 569
vertical short-form 501
annual accounts see financial statements
annual general meetings see meetings
appeals
corporate name change 57
appraisal remedy: dissenting shareholders 12, 19, 357, 373
arrangements: court order 512–513
dissent procedure 366–370
fair value 357, 360, 362, 373
approaches 363–366
Bahamas Act 373
court-fixed 370–372
premiums and 366
time of 363
value from fundamental change 363
written offer showing 369
interest on amount payable 372
interpreting broadly 360
nature of 357–360
amalgamation 359
amendment of articles 358, 487
arrangements, court-approved 359
non-exclusive 359–360
notice of meeting 487
oppression remedy and 341, 359–360
payment for shares 370
Bahamas Act 373
cash 359, 362
demand notice 368, 369
reorganisation: no dissent rights 508
theories of the role of 361–362
arrangements 508–515
court approval
application for 510–512
court powers 512–514
definitions and concepts 508–510
filing of articles 514–515
articles of association 12, 51, 65, 117
alteration of
Bahamas, Belize and St Christopher/Nevis 194, 195, 197–198, 207, 489–494
class rights 194, 195, 197–198
mergers: Bahamas 504, 506
consolidations: Bahamas 504, 506
directors
appointment of first 214
election of 215
management powers 200, 208
internal workings of companies 206, 207
meetings 291, 298
liens on shares 556
articles of consolidation 505, 506
articles of continuance 63–65
articles of incorporation 12, 45, 46, 58, 65, 130–131
alteration of 563
fundamental company changes see below
Jamaica 194, 195, 197–198, 207, 489–494
amalgamations 498, 501, 502
authorised share capital 133–134, 180, 194, 484–485
classes of shares 47, 187, 189, 190, 191–193
alteration of class rights 194–198, 359, 485, 487–488
contents of 47–49
contract under Jamaican Act 59–63
directors 49, 485–486
appointment of first 214
authority 47–48, 119–121
election of 215, 216, 217
management powers 200, 203–204, 206, 208, 486
meetings 225
number of 49, 209–210, 218, 485–486
share qualification of 212–213
vacancies 218, 219
dividends 168
form of 46–47
format of 49–50
fundamental company changes 358, 359, 483–484
amendments allowed 194–195, 484–487
arrangements 510
class votes 195–197, 487–488
procedure 487
re-stated articles 489
registration 488
reorganisation orders 507, 508
internal workings of companies: Jamaica 206, 207
meetings 291, 298, 299
legal status of 58–63
liens on shares 556
non-cash consideration for shares: Jamaica 147
non-profit companies 20, 21, 23
objects and powers of company and 117, 118–119
oppression remedy: order directing amendment of 339, 340–341
own-share purchase 155, 158
pre-emptive rights issue 48, 142–143
preference shares 189
private companies: Jamaica 17, 18, 47
re-stated 489
reorganisation orders 507, 508
resolution in writing procedure 227
series of shares 47–48, 187–188
changes 194–195, 359, 485, 487–488
share redemption 158, 159, 161, 190
transfer of
debentures 546, 551, 555
shares 546, 547–550, 551, 555
articles of merger 505, 506
asset substitution problem 361–362
attorney, power of
external companies 28–29
attorney-at-law
debentures: trust deeds 448
incorporation: statutory declaration by 46, 50–51
investigations: Jamaica 354
receivers and receiver-managers 455
audit committees 526–527
auditors 544
appointment of 282, 526–527, 528–529
disqualification for non-independence 531–533
not retiring auditor 536–537
vacancy 534–535
audit committees and 526–527
cessation of office 533–534, 536–537
debentures: trust deeds 449
dispensing with 529–530
duty in conduct of audit 538–541
negligence 541–544
outside companies 36
public companies 18, 529, 530
qualifications 530–531
report 517, 522, 523, 524
rights and powers 535–538
role and function of 527–528
statutory meetings 284
statutory report 285
summary financial statements 524
vacancy 534–535
authority of agents 121–122, 131
constructive notice doctrine 12, 108–109, 122–123, 131
Turquand’s Case, rule in 108–109, 122, 124–131
bankers
bankruptcy
disqualification
directors 210–211
receivers and receiver-managers 455, 459
incorporation and 44–45
reorganisations 507
transfer of shares or debentures 546, 555
bearer shares and bearer certificates 140–142
board of directors
audit committees 526
derivative actions 328
directors’ mandate to manage: Jamaica 204
fiduciary duties 235
meetings 223–226
alternative to 226–227
lack of consent defence to liability 275–276
one director boards 225–226
promoters 68, 69
receiver and 461–463
receiver-manager and 463
refusal to register share transfer 549–550
role of 204–205
bonds 410, 411, 436–437
bonus shares 140, 148, 161, 170–171
book debts (receivables)
charges 415–418, 428
burden of proof see onus of proof
bye-laws 58, 117, 130–131
amalgamations 499
articles of incorporation 49, 58
directors’ liabilities: waiver 277
directors’ meeting 225
directors’ role in relation to 21–23, 206–207
dividends 168
liens on shares 556
non-profit companies 21–23, 58
oppression remedy: order directing amendment of 339, 340–341
resolution in writing procedure 227
transfer of shares or debentures 546, 547, 550, 551, 555
capacity of company to act 108–109, 131

basic statutory provisions 109–110
Belize 109, 114, 117, 118, 119, 131
rule 1: ultra vires doctrine abolished 110–116
rule 2: capacity of individual 116, 119, 120
rule 3: any jurisdiction 116–117
rule 4: no ’objects’ 117
rule 5: bye-laws 117
rule 6: no breach of statutes 117–118
rule 7: restrictions in articles 118–119
rule 8: directorial authority 119–120
rule 9: remedies for breach 120–121
ultra vires doctrine 10–11, 12, 108–109, 110–116, 117, 118–119, 131, 236 see also authority of agents
capital maintenance 151, 180–181
common law doctrine 151–152
Companies Acts and common law 152
dividends 167–174
financial assistance in own-share acquisition 161–167
own-share ownership see separate entry
redeemable shares 152, 153–154, 157–161
stated capital adjustment 179–180
stated capital reduction 174–179
capital redemption reserve fund 161, 171
charges 408, 434
determining existence of 413
fixed 413, 414, 434, 436
book debts (receivables) 415–418, 428
debenture holders: right to realise security interest 450
fixed plant and machinery 415
land 415, 428
legal nature 414–415
stamp duty, insufficient 431
floating 413, 414, 416, 417–418, 434, 436
debenture holders: right to realise security interest 450–451
Jamaica: charges requiring registration 428
negative pledge clause 424, 429
receiver: preferential debts 469–470
settled aspects of nature of 418–419
trust deeds 441
unsettled aspects of 419–423
legal nature of 408–413
retention of title agreements 412–413, 427, 434
security interests and charges 408–411
negative pledges 411, 424, 428–429
Anguilla: register 434
registered office
retain copy of charge instrument 433
registration 423
acquisition of property subject to charge 425
Anguilla 434
Barbados: land and Registrar of Titles 426
certificate of 426
charges requiring 426–428
constructive notice 123, 428–429, 434
effect of insufficient stamp duty 431
effect of non- 429–431
effect of 428–429, 432
endorsement on debenture 431–432
memorandum of satisfaction and payment 432
notice 428–429, 432
obligation to register 423–425
receiver ceasing to act 470
rectification 432–433
resignation of receiver 460
choses in action 506
assignment of 33
debentures 545
shares 183
civil liability, corporate
separate legal personality and 101–103
classes of shares 46, 47, 199
alteration of class rights 194–198, 485, 487–488
amalgamations 500
concept of 185–186
consolidations: Bahamas 504–505
conversion from one class/series to another 179–180
equality of rights 185, 186–187, 190–191, 192
formation of companies: Jamaica 46, 51
mergers: Bahamas 504–505
ordinary shares 188–189
power to issue 186–187
preference shares 189–190, 191–192, 193–194
prejudicial alteration, protection from 195–198
redeemable shares see separate entry
removal of directors 222
rights attaching to different 188, 190–194
series, issue of shares in 47–48, 51, 187–188
vacancy among directors for 219
classification of companies 15–16, 38
constrained share 37–38, 487
external 25–33, 433–434
former-Act 37, 63–65
guarantee, limited by 24–25, 48–49, 51, 58, 92
non-profit 19–23, 24, 48, 58, 92
non-public 18, 19
outside 34–37
private 12, 16–18, 47, 530
public see separate entry
closely held companies 16, 17, 19, 204, 283
transfer of shares 547, 549–550
commissions
stated capital account 180
underwriting 139
community
fiduciary duty: best interests of company 237–238, 240
companies incorporated outside the island: Jamaica see outside companies
companies incorporated outside the territory concerned 25
outside companies 34–37
company as corporate director 212
company as corporate secretary 229, 560
company promoters 85
duties of 67–69
meaning of 66–67
need to regulate 67
pre-incorporation contracts 83–85
remedies for breach of fiduciary duties 69–70
company secretary 228–229, 559–560
compensation
certification of transfer and 553
debenture holders
breach of duties by trustees 449
insider trading
statutory civil action 479–480
misleading prospectuses 404
Companies Act remedies 399–403
oppression remedy 339–340
rectification orders and 356 see also damages
competition, duty to avoid 263
complainant remedies 12, 315, 343, 351
compliance and restraining orders 344, 345, 354–355, 356
concept of complainant
directors and officers 318–319, 322
majority shareholders 318
‘proper person’ 240, 318, 319, 320–323
Registrar 319–320
shareholders and debenture holders 316–318, 322
derivative action 12, 63, 315, 316, 318
background to statutory provisions 324–327
commencement of 328–329
interim costs 342–343
investigations and 345
nature of 327–328
power of court in 329–330
‘proper person’ 321–322
settlement of 342
shareholder ratification 341
Foss v Harbottle, rule in 9–10, 62, 324, 325–326, 327, 330, 341, 343
oppression remedy 12, 63, 121, 198, 239, 315, 316, 318, 331
actionable conduct 239, 240, 333–337
appraisal remedy and 341, 359–360
background to provisions 330–331
basic provisions 330
court orders 157, 179, 337–341
oppressive conduct 334–335
‘proper person’ 240, 319, 320–321, 322–323
protected ‘interests’ 332–333
reorganisation 340, 507
settlement of 342
unfair disregard 334, 337
unfair prejudice 331, 334, 335–337
compromises 508–509
confidence, breach of 474–475
conflicts of interest: statutory duty to disclose
analysis of 251–256
director voting on disclosed contract 254–255
effect of disclosure 255–256
effect of failure to disclose 256
material contract 251–252
nature and extent of disclosure 252–253
procedure 255
time of disclosure 253–254
who must disclose 252
basic provision 249–250
common law background 250–251
conflicts of interest: trustees of debenture trust deeds 445
consent
appointment
directors 214–215
board of directors: register share transfer 549–550
debenture holders 450
directors’ liabilities: statutory defence based on lack of 275–276, 402
investigations 348
prospectuses
directors 402, 403
experts 378, 386, 401, 403
indemnification 403
shareholders
amendment to directors’ powers to manage 486
dispensing with auditors 529
consolidations 503–505, 506–507, 508
appraisal remedy 358–359
constitutional fundamental rights
constrained share companies 37–38, 487
constructive notice doctrine 12, 108–109, 122–123, 131
Bahamas and Belize 122, 131
charges 123, 428–429, 434
constructive trusts 256, 563
convertibles 143–144, 381, 441, 444
register 559
corporate capacity see capacity of company to act
corporate name 52
articles of incorporation 47
change of 56–57, 484
guarantee, companies limited by 24
mandatory words 20, 24, 56
non-profit companies 20
principles applicable to granting of 53–57
prohibited 53–55, 56
Registrar’s direction to change 56–57
Registrar’s discretion 55
request for name search 52
reservation procedure 52
revival of 57
corporate personality, separate 86, 107
civil liability and 101–103
constitutional fundamental rights and 88–89
corporate groups and 90–91, 96–100
criminal liability and 101–102, 103–107
directing mind and will approach 103–107
limited liability and 91–92
‘one man company’ and 89–90
Salomon principle 86–88
court disqualified directors 211
creditors 159
access to registers and records 565
amalgamations 502–503
complainant remedies 315, 321–322
compliance and restraining orders 354–355
election or appointment of directors by 216
fiduciary duty: best interests of company 241–242
criminal liability, corporate
indemnities 279, 280
separate legal personality and 101–102, 103–107
cumulative preference shares 189
damages
misleading prospectuses 404
Companies Acts 399
Misrepresentation Acts 395–396
promoter’s fiduciary duties, breach of 70
receivers
preferential debts 469
takeover bids: withdrawing offerors 585–586 see also compensation
death
personal representatives 546, 555, 563–564
classes of 438–439, 443
complainant remedies 339
debenture holders: complainants 316–318, 322
convertible 143–144, 381, 559
trust deeds 441, 444
debenture stock 436
definition 435–437
investigations
application by debenture holder 346, 347
restrictions on debentures: Jamaica 353
irredeemable 438
legal requirements of 439–440
no covering trust deed 441–442
non-inclusion of specified statements 442
trust deed 440–441
unsecured 440
power to issue 437–439
public offer see prospectus
receivers and receiver-managers see separate entry
rectification orders 355–356, 442
register of debenture holders 555, 558
Registrar’s inquiries
proxies and insider trading 354
reorganisation orders 507–508
rights of debenture holders 545–546
to realise security interest 450–451
to sue for payment and compensation 449–450
transfer of 545–546, 556
sale and purchase 550–555
trust deeds 18, 435
advantages of 442
conflict of interest 445
definition 442
duties of trustees 446–448
formalities of 443–445
legal recourse for non-execution of 443
legal requirements 440–441
mandatory 442–443
redemption procedure 437
rights of debenture holders 449–451, 545–546
rights of trustees 448–449
transfer of debentures 545–546, 551, 555
trustees 436, 442, 445–451, 456, 551
see also charges
debts, assignment of 33
deceit 393, 394, 399, 404
deeds: external companies 29
defamation
absolute privilege 348
auditors 544
investigations 348
derivative action 12, 63, 315, 316, 318
background to statutory provisions 324–327
commencement of 328–329
concept of complainant 315–323
nature of 327–328
power of court in 329–330
‘proper person’ 321–322
settlement of 342
directors 12, 200, 230
access to registers and records 516, 517, 565
agreements restricting powers of 19
alternate 203
amalgamations 499, 500–501
appointment of 213–215, 218–219, 282, 284
reorganisation orders 508
approval of financial statements 523
articles
of association 200, 214, 215, 208
of incorporation see under articles of incorporation
auditors: filling vacancy 534, 535
board of see separate entry
bye-laws, role in relation to 21–23, 206–207
ceasing to hold office 220–221
committee of 208
complainants 318–319, 322
corporate 212
de jure and de facto 200–202, 318–319
delegation of directors’ powers 207–208, 228
disqualification of 210–212
duties of see separate entry
election of see separate entry
incorporation: notice of 46, 50
liabilities see directors’ liabilities
managing 208, 559
mandate to manage 19, 200, 203–208
changes to 486
receiver and 461–463
receiver-manager and 463
restrictions see unanimous under shareholder agreements
meetings 223–226
alternative to 226–227
lack of consent defence to liability 275–276
minutes 564
quorum 216, 218, 225–226, 255, 534
non-delegable powers 208
non-profit companies 20, 22–23
number of 18, 20, 49, 209–210, 218, 485–486
amalgamations 499
public companies 18
re-election of 220
receiver-managers and 463
receivers and 461–463
register of 559
directors’ holdings 560–561
removal of 210, 221–223, 282, 310
remuneration 221, 256
oppression remedy: directors’ fees 337
resignation: written statement of reasons 222
resolution in writing procedure 226–227
series, issue of shares in 47–48, 51, 187–188
shadow 202–203
share capital, changes to 485
share qualification of 212–213, 214
shares, refusal to register transfers of 547, 549–550
tenure of 215, 216, 219–221
unissued shares 195, 485
vacancies 218–219, 222, 337
directors’ liabilities 12, 273, 281
contribution from other directors 275
defences, statutory
good faith reliance 276–277
lack of consent 275–276
failure to disclose interest account for profits 256
indemnities 273, 277–280
insurance 280–281
joint and several 180, 273, 274
misleading prospectuses
fraudulent misrepresentation 394
Misrepresentation Acts 396
negligent misstatements 395
remedies under Companies Acts 401, 402, 403
no-profit rule
account for profits 258–259, 260, 261, 262–263
shares 180, 274, 275
improper capital reduction 178–179
issue 273–274, 275
waivers 273, 277
disqualification
auditors 531–533
directors 210–212
receivers and receiver-managers 455, 459–460
dissenters’ rights see ppraisal remedy
dissolution 344, 461
arrangements 510
auditors 534
revival of company name after 57
see also liquidation; winding-up
dividends 12, 188
Acts abolishing common law rules 172–173
authority to declare 167–168
Belize 168
circulating capital 169–170
cumulative 193–194
depreciation 170
fixed capital 169–170
in money or property 174
payment of 168–173
preference shares 189–190, 192, 193–194
revaluation of assets 170–171, 173
stock 173–174
donated shares 161
duties of directors 12
fiduciary 231, 257, 264, 265
fiduciary duty, directors’ statutory see separate entry
loyalty, directors’ duty of see separate entry
non-fiduciary 265
duty of care, diligence and skill 265–271, 272, 277, 278, 281
duty to comply with Act, articles and unanimous shareholder agreement 119–120, 271–272
year end of subsidiaries 520
statutory declarations 177
see also directors’ liabilities
duties of promoters 67–69
remedies for breach 69–70
duties of receivers and receiver-managers 465
accounting 467–468, 470
act honestly and in good faith 465
cease acting 470
deal with company property in a commercially reasonable manner 465–466
notice of appointment 466–467
preferential debts 469–470
statement of affairs 468–469
take company property in custody 467
duties of trustees: debenture trust deeds 446–448
earnings per share 154

election of directors
cumulative voting 209–210, 217–218, 485–486
defective 219
nominations 216, 294
non-cumulative voting 217
re-election 220
shareholders’ statutory right 215–216, 282, 284
source of applicable rules 215
employees
election or appointment of directors by 216
fiduciary duty: best interests of company 237–238, 239–240
financial assistance 165, 166
errors
auditors: right to be notified of any detected 537–538
charges
certificate of registration 426
rectification 340, 344, 355–356, 442
exchange control 459
exempt companies
St Christopher/Nevis 141–142
experts
good faith reliance defence: directors 276–277
prospectuses 377–378
misleading 394, 395, 396, 398, 401, 403
statutory defence to breach of care and skill duty 271
external companies
amalgamations 29
attorney, power of 28–29
carrying on of undertaking by 25–26
charges 433–434
fundamental changes 31–32
name display 31
registration 26–32
cancellation of 30
certificate of 29
effect of 29
incapacity of unregistered 32–33
obligation to register 26
requirements for 26–28
revival of 30–31
suspension of 30
restrictions on activities 28
returns 32
extraordinary general meetings 286–287
fair hearing 345

fair value see valuation
fiduciary duties 231, 249, 264
directors 231, 257, 264
loyalty, directors’ duty of see separate entry
distinction between non-fiduciary and 265
promoters 67–70
shareholders
best interests of company and 237, 238–239
duties owed to 234–235
unanimous agreements 312
fiduciary duty, directors’ statutory 180, 231, 248, 264, 277
acting honestly and in good faith 235–236
best interests of company 236–242, 588–589
disclosure of interest in contracts and 255–256
dividends 168
duty to not fetter discretion and 245–248
indemnity 278, 279, 280
insurance 281
proper purpose test and 242–245, 587–588
shares: discretion to refuse to register transfers 549
subjective 236, 238
theoretical underpinnings 231–232
to whom is duty owed 233–235, 272
underwriting commissions: Bahamas 139
who owes the duty 235
financial assistance in own-share acquisition 161–167
Belize 161
corporate agency 130
Guyanese Act 165–167
other Acts 162–165
rationale 161–162
financial disclosure 516, 528, 544
financial statements see separate entry
maintaining financial records 467–468, 470, 516–517, 564
financial statements 462, 517–522, 528
access to 523–526
comparative 517–518
directors’ approval of 523
errors or misstatements 537–538
exemption from disclosure 522–523
filing of 17, 18, 32, 35–36
group 35, 91, 518, 519–521, 524–525, 526
interim 526
oppression remedy: failure to prepare 337, 340
receivers and receiver-managers 467–468, 470
summary 524
fixed charges 413, 414, 434, 436
book debts (receivables) 415–418, 428
debenture holders: right to realise security interest 450
land 415, 428
legal nature 414–415
floating charges 413, 414, 416, 417–418, 434, 436
debenture holders: right to realise security interest 450–451
Jamaica: charges requiring registration 428
negative pledge clause 424, 429
receiver: preferential debts 469–470
settled aspects of nature of 418–419
trust deeds 441
unsettled aspects of 419
crystallisation 421–423
nature of interest created 419–420
theoretical basis of power to carry on business 420
forged certificates 554
formation of companies 39, 65
bye-laws 58
corporate name 52–57
exercising right to incorporate 44–51
legal status of articles of incorporation 58–63
nature of right to incorporate 39–44
organisational meetings 223–224, 528
statutory meetings 284–286
see also pre-incorporation; promoters
former-Act companies 37
stated capital account 149–150
Foss v Harbottle, rule in 9–10, 62, 324, 325–326, 327, 330, 341, 343
fraud
certification of transfer 553, 554
charges
certificate of registration 426
investigations 346, 349
fraudulent misrepresentation 393, 394, 397, 399
rescission 397
promoters 68
rectification 355
fundamental company changes 13, 58, 327, 483, 515
amalgamations 13, 494–503
appraisal remedy: dissenting shareholders 357–362
arrangements: court order 512–513
fair value 357, 362–366, 369, 370–373
notice of meeting 487, 500
procedure 366–370
reorganisation: no dissent rights 508
articles 358, 483–484
Bahamas, Belize, Jamaica and St Christopher/Nevis 207, 489–494
changes allowed 194–195, 484–487
class votes 195–197, 487–488
procedure for amendments 487
registration 488
consolidations: Bahamas 503–505, 506–507, 508, 510
mergers: Bahamas 503–507, 508, 510
reorganisations 340, 507–508, 510
gift transactions 555–556

good faith
arrangements 513
articles, amendments to
bona fide and in best interests of company 197, 483
judicial review 490–494
auditors and defamation 544
charges 430
derivative actions 328–329
directors
liabilities: good faith reliance defence 276–277
financial assistance: lender for value in good faith without notice 164
prospectus: share offer to public application money 391
receivers and receiver-managers: duty to act honestly and in 465
trustees: debenture trust deeds 446–447
uberrimae fidei contracts 475
groups of companies
dividends 172
financial assistance in own-share acquisition 165, 166, 167
group accounts 35, 91, 518, 519–521, 524–525, 526
pre-acquisition profits 172
separate legal personality and 90–91, 96–100
guarantee, companies limited by 24–25, 92
articles of association 51
articles of incorporation 48–49, 58
harmonisation 11, 13–14

human rights
fair hearing 345
illegality
ex turpi causa non oritur actio 103
incorporation 41–42, 43
incentive plans 154
incorporation 39, 65
articles of see separate entry
certificate of 42–43, 498
re-stated 489
exercising right to incorporate 44–51
foreign language: Barbados 44
guarantee, companies limited by 24–25
illegality 41–42, 43
legal status of articles of 58–63
Registrar’s duty to register 40–42
voluntary and involuntary 39–40
indemnities
directors’ liabilities 273, 277–280
misleading prospectuses 403, 406
indoor management rule 10, 108–109, 122, 124–131
Bahamas, Belize, Jamaica and St Christopher/Nevis 124, 125
basic statutory provision 124
rule 1: restatement of rule 124–126
rule 2: protects outsiders not insiders 126–127
rule 3: who is an insider 127
rule 4: held out and customary powers/duties 127–129
rule 5: document not valid or genuine 129–130
rule 6: forbidden financial assistance or sale of property 130
rule 7: non-compliance with company documents 130–131
injunctions
floating charges 419
shareholder agreements 209
insider trading 12, 473
breach of confidence 474–475
directors’ fiduciary duties 474
misrepresentation 475
prohibitions: Guyana 480
liability for contravention 482
selling calls or buying puts 482
short selling 480–481
Registrar’s inquiries 344, 354
statutory civil action 475
damages, measure of 479
‘insider’ 476–477
liability to compensate claimant 479–480
onus of proof 478, 479
what must be proved 476–478
who brings action 475–476
insolvency
annual financial statements 523
misleading prospectus: rescission and repayment 405
receivers and receiver-managers
Bankruptcy and Insolvency Acts 452–453
institutional investors 154, 283
insurance, directors’ liabilities 280–281
interest
appraisal remedy: dissenting shareholders 372
takeover bids: dissenting offerees 575
investigations 344–345
court-ordered 344
application for investigation order 346
inspector 347, 348
powers of court 347
procedural matters 347–348
Minister 344–345
appointment of inspectors 349
company membership: Jamaica 352–354
inspectors’ report 351
powers of inspectors 350–351
proceedings on report 351–352
nature and function of 345–346
Registrar 347
Bahamas 344, 348–349
St Christopher/Nevis 349
joint and several liability 180, 273, 274

land 415, 420, 428
liens 410, 411, 412, 427
on shares 556
limited liability 92
liquidation 344, 461
arrangements 510
arrears of cumulative dividends 193–194
charges
crystallisation of floating 421
insufficient stamp duty
priority
appraisal remedy: dissenting shareholders 370
misleading prospectus: rescission and repayment 405–406
receivers: statement of affairs 469
loyalty, directors’ duty of 249, 264
disclose interests in contracts with company 249–256
duty to avoid competition 263
no-profit duties 249, 257–263, 474
remedies for breach of 256, 258–259, 260, 261, 262–263, 265
meetings 147, 185, 282

adjourned 291, 298
amalgamations 500
annual general 283–284, 462
annual accounts 517–522, 523, 525
appointment of auditors 528–529, 535, 536–537
election of directors 215, 216, 217, 284
members’ resolutions and circulars 291–292, 295
minister-called 288, 289
oppression remedy: failure to hold 337
proposals 291, 292–295
arrangements 511, 512
calling 290–291
court-called 287–288
of debenture holders 441, 444
of directors see under directors
extraordinary general 286–287
minister-called 288–289
minutes 308, 563, 564
notice of 290, 500, 504
place of 289
proxies 300–307
proposals from shareholders 293–295
Registrar’s inquiries 354
solicitation machinery 293–295, 303–307
voting machinery 301–303
quorum 288, 296–298
record date of shareholders 290–291, 296
requisitioned 121, 286–287
resolutions in lieu of 19, 308, 523, 525
share registrants 307–308
shareholders’ list 295–296
record date 290–291, 296
special 218, 221, 284, 286, 534
oppression remedy: failure to call 337
statutory 284–286
theory 282–283
voting 298–300
election of directors 209–210, 217–218, 485–486
pooling agreements 308–309
voting trusts 308, 309
memorandum of association 12, 51, 65, 117, 137, 138
alteration of class rights 194, 197–198
corporate capacity and 111–116
election of directors 215
mergers and consolidations 504, 506
mergers 503–507, 508
appraisal remedy 358–359
minors
disqualification of directors 210
transfer of shares or debentures 546
minutes
directors’ meetings 564
dissent 276
shareholders 563
resolutions in lieu of meetings 308
misrepresentation 393
fraudulent 393, 394, 397, 399
insider trading 475
Misrepresentation Acts 395–396
negligent misstatements 393–394, 395, 404
rescission in equity 396–398
mortgages 410, 411, 412, 414–415
name see corporate name

negative pledges 411, 424, 428–429
negligence
auditors 541–544
certification of transfer 553
negligent misstatements 393–394, 395, 404
no-conflict rule see conflicts of interest: statutory duty to disclose
no-profit rule see secret profits
non-profit activities
guarantee, companies limited by 24
non-profit companies 19–23, 24
non-profit companies 19, 24, 92
bye-laws 21–23, 58
dissolution and distribution of property 23
membership 21
notice doctrine, constructive 12, 108–109, 122–123, 131
Bahamas and Belize 122, 123, 131
charges 428–429, 434
offences
application for registration of articles 215
auditors 533
vacancy 535
charges 425, 433
company secretary 228
insiders: short selling, selling calls or buying puts 482
investigations 351
private to public company: Jamaica 18
prospectuses 389
Registrar’s inquiries 354
statutory declaration on stated capital reduction: Jamaica 179
statutory meetings 286
transfer of shares or debentures notice of refusal to register 555
unqualified directors 213
officers 227
appointment and qualifications of 227–228
complainants 318–319
duties of 228
one-person companies 19, 90
quorum 297
onus of proof 491
appraisal remedy 371
deceit 399
exemption from disclosure: financial statements 522–523
fiduciary power 549
insider trading: statutory civil action 478, 479
misstatement in prospectus: Companies Act remedies 399
open-ended mutual companies 150
oppression remedy 12, 63, 121, 198, 239, 315, 316, 318, 331
actionable conduct 239, 240, 333–337
appraisal remedy and 341, 359–360
background to provisions 330–331
basic provisions 330
concept of complainant 240, 315–323
court orders 157, 179, 337–341
oppressive conduct 334–335
‘proper person’ 240, 319, 320–321, 322–323
protected ’interests’ 332–333
reorganisation 340, 507
settlement of 342
unfair disregard 334, 337
unfair prejudice 331, 334, 335–337
options 482, 567
ordinary resolutions
alternate directors 203
auditors 528, 534
bye-law changes 207
election of directors 215, 217
removal of directors 221
organisational meetings 223–224, 528
origins of Commonwealth Caribbean company law
English 1–5
summary by country 5–9
English case law 9–11, 13
accounts 35–36
alteration of documents 35
country of incorporation stated 36
land 35
name change: power of Registrar to direct 34–35
place of business established: obligation to deliver documents to Registrar 34
removal from register 37
service on 37
overseas companies: Belize see outside companies
own-share ownership 12, 152, 155
articles of incorporation 155, 158
Belize 152, 155
directors’ liability for improper capital reduction 179
donated shares 161
enforcement of contracts for 157
financial assistance in acquisition 161–167
general power to acquire 155–156
general statutory prohibition 153
overview of exceptions to prohibition 153–154
rationale of exceptions 154
special power to acquire 156–157
see also redeemable shares
participating preference shares 189

personal representatives 546, 555, 563–564
personality see corporate personality
placings 380–381, 382
pledges 410, 411, 412, 427
negative 411, 424, 428–429
poison pill defence 586–587
validity 587–589
pre-emptive rights
issue of shares 48, 142–143
transfer of shares 547–549
pre-incorporation agreements
complainant remedies 317–318
pre-incorporation arrangements
pre-incorporation contracts 70–71, 85
Belize 71, 74, 76–77, 85
common law and statutory intervention 72–74
contract 78–80
exemption from personal liability 84–85
incorporation 76–77
made in name/on behalf of company 80
s 16(1) and personal liability and rights 75–80
s 16(2) adoption by company 81–83
s 16(4) and apportionment of liability by court 83–84
scope of s 16 74
writing 80
pre-incorporation prospectuses 398
preference shares 189–190, 191–192, 193–194
preliminary expenses 135, 140, 285
private companies 16–18, 530
Jamaica 17–18, 47
professional advisers
breach of confidence 474
good faith reliance defence 276, 277
shadow directors 202 see also experts
promoters 85
duties of 67–69
meaning of 66–67
need to regulate 67
pre-incorporation contracts 83–85
pre-incorporation prospectuses misleading 398, 401
remedies for breach of fiduciary duties 69–70
prospectus 374, 391
aims of provisions 374–375
contents of 139, 376–378
contracts to subscribe/purchase
minimum subscription 389–391
offer and acceptance 388
stagging 389
subscription lists 388–389
definition 375–376
liabilities for misleading 392, 407
damages at common law 392–395, 404
damages under Misrepresentation Acts 395–396
indemnification 403, 406
remedies under Companies Acts 399–403
rescission in equity 396–398, 404
statutory rescission and repayment 393, 396, 397, 404–407
notices
advertisements 376, 383
application of rules on 385
certificate of non-contravention 385
exceptions to prohibition 383–384
general prohibition 383
presumed 387–388
public companies 18
registration of 385–387
requirement for 378–379
invitations or offers 379–381
non-cash consideration 382
‘public’ 381–383
‘shares or debentures’ 382–383
‘subscribe or purchase’ 382
statement in lieu of 18, 135, 139, 391
underwriting commission 139
void conditions 378, 390
proxies 300–301
proxy solicitation machinery 303–307
proposals from shareholders 293–295
proxy voting machinery 301–303
takeover by proxy contest 569
public companies 12, 16–17, 154, 283
audit committees 526, 527
auditors 18, 529, 530
financial statements 524, 525
interim 526
summary 524
Jamaican Act: authorised minimum share capital 135–136
statutory requirements 18
purchase of own shares see own-share ownership
quorum
directors’ meetings 216, 218, 225–226, 255, 534
shareholders’ meetings 288, 296–298
receivables (book debts)

charges 415–418, 428
accounting duties 467–468, 470
applicability of Companies Acts or BIAs 452–453
appointment of
demand for payment 457–458
formality 456–457
registration 458
time 456, 457–458
validity of 458–459
who may appoint 436, 455–456
Bankruptcy and Insolvency Acts (BIAs) 452, 472
applicability of 452–453
appointment 456, 457, 458
definitions 453, 454, 455
duties of receivers 465
qualifications 455
certificate of registration: charges 426
concepts and definitions 453–455
death 469
disqualification 455, 459–460
duties of 465–470
effect of appointment
company’s management 461–463
company’s personality 460–461
floating charges
crystallisation 421
preferential debts 469–470
insolvent companies 452–453
liability of
contractual 470–471
invalid appointment 472
notice of appointment 466–467
powers of 463–464
removal and replacement 459–460
resignation 460
solvent companies 452–453
statement of affairs 468–469
trust deeds and debentures 436
records see registers and records, corporate
rectification 340, 344, 355–356, 432–433, 442
redeemable preference shares 159, 160–161
redeemable shares 152, 153–154, 157–158, 190
Jamaican Companies Act 159–161
other Acts 158–159
St Christopher/Nevis Act 158, 160, 161
registered office 131, 557
bye-laws 58
charges 433
incorporation: notice of 46, 47, 50, 557
records 516, 562–565
registers, corporate 562
registers and records, corporate 557
access to 516, 517, 565–567
auditors 537
records 562–567, 568
accounting and financial 516–517, 564
rectification 340, 344, 355–356
charges 432–433
registers 557–562, 565–567, 568
transfers of shares or debentures 555
Registrar 2
amendments to articles 188, 488, 510, 514, 515
arrangements 510, 512, 514, 515
auditors 530, 535, 536, 538
charges see registration under charges
commencing business: Bahamas 134–135
complainant 319–320
consolidations: Bahamas 505, 507
constructive notice 108–109, 122–123, 131
charges 123, 428–429, 434
court-called meeting 287
derivative actions 319–320, 329
directors 45, 50, 130–131, 213–215, 223
disqualification 211, 212
indemnity 280
financial statements 522, 525
comparable 518
consolidated 525, 526
interim 526
former-Act companies 63
incorporation 39, 45–46, 50, 51
attorney-at-law’s declaration 46, 50–51
certificate of 42–43, 489
classes of shares: Jamaica 51
directors 46, 50
duty to register companies 40–42
name 52, 53, 54–55, 56–57
registered office 46, 47, 50
inquiries into proxies and insider trading 344, 354
investigations 346, 347
Bahamas 344, 348–349
St Christopher/Nevis 349
mergers: Bahamas 505, 506, 507
oppression remedy 319–320, 340
own-share purchase: Jamaica 156
proposals from shareholders 294, 295
prospectuses 18, 135, 376, 378–379, 385–387
statement in lieu of 18, 391
proxy solicitation and 305–307
public company and share capital: Jamaica 135
receivers and receiver-managers 458, 460, 466, 467–468
ceasing to act 470
statement of affairs 468, 469
rectification orders 355
registered office 46, 47, 50, 131, 508, 557
resolutions
Minister-called meeting 289
statutory report 285
takeover bids 572
trusts 563
unanimous shareholder agreements 310, 314
remedies
compensation see separate entry
complainant see separate entry
damages see separate entry
debentures
non-execution of covering trust deed 443
trustee conflict of interest 445
fiduciary duties, breach of 265
directors 256, 258–259, 260, 261, 262–263, 474
promoters 69–70
injunctions 209, 419
insider trading
statutory civil action 479–480
misleading prospectus 392, 407
damages at common law 392–395, 404
damages under Misrepresentation Act 395–396
indemnification 403, 406
remedies under Companies Act 399–403
rescission in equity 396–398, 404
rectification 340, 344, 355–356, 432–433, 442
shareholders 58, 344
complainant remedies see separate entry
dissenters’ rights see appraisal remedy
investigations 344–354, 356
judicial review: alteration of articles 490–494
rectification orders 340, 344, 355–356
remuneration
directors 221, 256, 337
reorganisations 340, 507–508, 510
rescission
equity 396–398, 404
promoter’s fiduciary duties, breach of 69–70
resolution in writing procedure
directors 226–227
shareholders 19, 308
resolutions 206
alteration of articles: Bahamas 198, 207
debenture holders 449–450
notice to dissenter of adoption of 368
ordinary 203, 207, 215, 217, 221, 528, 534
records, company 563, 564
removal of auditors: Jamaica 536–537
removal of directors: Jamaica 223
special see separate entry
retained earnings 133
rights issues 48, 142–143, 380, 381, 382
Romalpa clauses 412–413, 427
Salomon principle see separate legal personality

secret profits 249
company promoters 68–69, 70
derivative action 329
company: considers and rejects opportunity 262–263
company: continuing interest in opportunity 259
company: unable to secure opportunity or use information 259–262
insider trading 474
Securities and Exchange Commission 527, 535, 566
separate legal personality 86, 107
civil liability and 101–103
constitutional fundamental rights and 88–89
corporate groups and 90–91, 96–100
criminal liability and 101–102, 103–107
limited liability and 91–92
‘one man company’ and 89–90
Salomon principle 86–88
service of documents
share buy-back see own-share ownership
share capital 132, 150
authorised minimum 134–136
authorised or nominal 133–134, 160, 180, 194
Bahamian Act: minimum paid-up 134–135
changes to 194–198, 484–485, 487–488
Jamaican Act: authorised minimum 135–136
legal concept of capital 132–133
maintenance see capital maintenance
payment for shares 144–147, 148–149, 273–274, 277
share issue 136–144, 273–274, 277
share premium account 139–140, 171
share warrants 140–141
share-for-share exchanges 570
financial assistance in own-share acquisition 162
stated capital account and 149
statutory rescission and repayment 407
takeover bid circulars 579
shareholder agreements 282
unanimous 59, 130–131, 136
basic statutory provision 309–310
bye-laws 206–207
compliance and restraining orders 354–355
concept 310–311
dividends, power to declare 168
election or appointment of directors 216
filing requirement 314
legal effect 311–314
management mandate 19, 205–206
records, company 563, 565
shareholders 274
access to financial statements by 523–525
access to list of 566–567
access to registers and records by 565
auditors
appointment of 282, 526–527, 528–529
removal of 534
deadlock on election of director 220
decision-making 282, 314
amendment to directors’ powers to manage 486
meetings see separate entry
resolutions in lieu of meetings 308
shareholder agreements see separate entry
directors’ vacancies 218, 219
dividends, power to declare 168
fiduciary duties
best interests of company 237, 238–239
owed to shareholders 234–235
unanimous agreements and 312
joint 300
limited liability and separate legal personality 91–92
registers of 555, 557–558, 561–562, 565
remedies 58, 344
complainant remedies see separate entry
dissenters’ rights see appraisal remedy
investigations 344–354, 356
judicial review: alteration of articles 490–494
rectification orders 340, 344, 355–356
removal of directors 221–223
statutory right to elect directors 215–216
shares 182
allotment of 136
articles of incorporation 47–48
bearer certificates 140, 141–142
bearer shares/share warrants 140–141
bonus 140, 148, 161, 170–171
classes of see separate entry
conversion issues 143–144, 381, 441, 444, 559
conversion privileges, options and rights 143–144, 559
directors
liabilities 178–179, 180, 273–274, 275, 277
refusal to register transfers 547, 549–550
register of holdings 560–561
share qualification of 212–213, 214
unissued shares 195, 485
discount, issue at 10, 138–139
fully paid 12, 92
incorporation in Jamaica: classes of 46, 51
legal nature of 182–185
liens on 556
maximum number of 48
minimum issue price 48
no par value 12, 137–138
nominal or par value 136–138
non-cash consideration 145–147, 148–149, 273–274, 277
no offer to ‘subscribe or purchase’ 382
remedies under Companies Acts 400
ordinary 188–189
payment for 144–147
pre-emptive rights issue 48, 142–143
prospectus 380, 381, 382
preference 189–190, 191–192, 193–194
premium, issue at 139–140
redeemable 152, 153–154, 157–161, 190
redeemable preference 159, 160–161
rights issues 48, 142–143, 380, 381, 382
transfer of see separate entry
unpaid 556
short selling by insiders: Guyana 480–481
single-person companies 19, 90
quorum 297
small companies 521–522, 529–530 see also closely held companies
solvency
amalgamations 502
appraisal remedy: dissenting shareholders
inability to pay lawfully 370
arrangements 510, 511
dividends 12, 171–172, 173, 174
fiduciary duty: interests of creditors 241–242
financial assistance in own-share acquisition: Guyana 165
oppression remedy: order directing payment to shareholder 341
own-share purchase 155–156
share redemption 158–159
stated capital reduction 176–177, 179
special resolutions
alteration of articles 198, 207, 485, 486, 489, 510
Barbados: constrained share companies 487
class rights 194–195, 197, 198, 485, 488
alteration of series rights 485
amalgamations 500
articles of incorporation: Jamaica 60, 207
bonus shares 171
constrained share companies 37–38
constructive notice 123
corporate name 57
dividends 171, 174
financial assistance in own-share acquisition: Guyana 165
internal workings of companies 207
investigations Belize 345
Jamaica 349
restrictions on share transfers 486
stated capital account 148, 175–176, 179
stated capital reduction 175–176, 179
unrealised capital surplus 171
stamp duty 431
standard of proof
application for investigation order 346
commissions paid out of 180
rationale for rules 174–175
reduction 174–179
capital redemption reserve fund 161
directors’ liability for improper 179
donated shares 161
permitted reduction 175
procedure 175–176
protection of creditors 176–178
share redemption 160
stated capital adjustment 179–180
statement in lieu of prospectus 135, 139, 391
statutory interpretation 106–107
irredeemable debentures 438
statute silent: presumption against changes in common law 169, 453, 461
stock dividends 173–174, 587
stock option plans 154
striking off
takeover bids 12, 569

circulars 400, 577–582
Directors’ Circular Rules 582–584
Companies Acts 570–571, 589
concepts and definitions 569–570, 571
court-fixed fair value 574–576
notice of adverse claim 572
offer/invitation to make an offer 571–572
offeree company, role of 573–574
offeror’s notice 572–573
offeror’s right of compulsory acquisition 571
defences
poison pill 586–587
validity of 587–589
Take-Over Bid Regulations: Barbados 576, 589
directors’ circulars 582–584
equal consideration 585
Exchange as manager, member of 586
listed companies 586
lock-up of shares, rule against 585
mandatory offer rules 576–577, 585
offeror must take up and pay for shares 585–586
permissible conditions on formal offer 582
takeover bid circulars 577–582
telephone participation in directors’ meetings 226
third parties
corporate capacity and acting in good faith 118
rescission and 70
time limits
accounts and returns 517, 524–525
alteration of class rights 198
amalgamations
notice of meeting 500
annual financial statements 523
annual returns 32
appraisal remedy 368, 369, 370
Bahamas Act 373
court-fixed fair value 371
arrangements 515
articles of association 51
auditors 536
vacancy 534, 535
charges 425, 430
consolidations: Bahamas 506
corporate name 53, 57
debentures
transfers 553, 555
trustees of trust deeds 445, 447
directors
disqualification of 211, 212
election of 216
liabilities: statute 275, 276
registers 559, 561
share qualification of 213
tenure of 215, 216, 219–220
external companies 31, 32
insider trading
prohibitions: Guyana 481
statutory civil action 480
meetings
adjourned 291
annual general 283
extraordinary general 287
members’ resolutions and circulars 295
notice of 290, 500
proposals 293, 294
quorum 298
record date of shareholders 290
requisitioned 287
resolutions 289
shareholders’ list 296
statutory 284, 285
mergers: Bahamas 506
nominal or par value and no par value: Jamaica 137
organisational meetings 224
outside companies 34, 35
own-share ownership 153
prospectus 18, 377, 386–387, 389, 390
statement in lieu of 18, 391
receivers and receiver-managers
appointment 458
ceasing to act 470
final account 470
financial statements 467
resignation 460
statement of affairs 468
registration of charges 430
acquisition of property subject to charge 425
share transfers 555
certificates 553
shareholders
access to list of 566–567
register of substantial 561
unanimous shareholder agreements 310, 314
stated capital reduction 177, 178
statement in lieu of prospectus 18, 391
takeover bids
compulsory acquisition 571
fair value 574
offeree company 573
offeror’s notice 572, 573
Take-Over Bid Regulations: Barbados 576, 577–578, 582–583, 585, 586
tort claims
deceit 393, 394, 399, 404
negligent misstatement 393–394, 395, 404
transfer of shares 545, 556
gift transactions 555–556
restrictions on 48, 547
Barbados: constraints 37–38, 487
changes to 486
discretion on directors to refuse to register 547, 549–550
pre-emption rights 547–549
sale and purchase 550–555
trust deeds see under debentures
trusts
constructive 256, 563
records of 563–564
Turquand’s Case, rule in 10, 108–109, 122, 124–131
Bahamas, Belize, Jamaica and St Christopher/Nevis 124, 125
basic statutory provision 124
rule 1: restatement of rule 124–126
rule 2: protects outsiders not insiders 126–127
rule 3: who is an insider 127
rule 4: held out and customary powers/duties 127–129
rule 5: document not valid or genuine 129–130
rule 6: forbidden financial assistance or sale of property 130
rule 7: non-compliance with company documents 130–131
uberrimae fidei contracts 475

ultra vires doctrine 10–11, 12, 108–109, 110–116, 117, 118–119, 131, 236
underwriting
commissions 139
contracts and rescission and repayment 407
unlimited companies 92
articles of association: Belize 51
articles of incorporation: Jamaica 48–49, 58
unsound mind, persons of
disqualification of directors 210
transfer of shares or debentures: estate of 546
valuation
appraisal remedy: fair value 357, 360, 362, 373
approaches 363–366
Bahamas Act 373
court-fixed 370–372
premiums 366
time of valuation 363
value from fundamental change 363
written offer to pay 369
assets approach 364, 365
derivative action 329
dividends and capital maintenance 171
earnings or investment value approach 364, 365–366
misleading prospectuses: fair value statutory rescission and repayment 407
non-cash consideration for shares 145–147, 148–149
stock market approach 363–365
takeover bids: dissenting offerees and fair value 575–576
veil of incorporation 86
agency principles 96–98
case law 93–94
concepts and definitions 92–93
device to evade limitations imposed on conduct by law 94–101
justice, interests of 100–101
legislation 101
negligent misstatements 395
piercing or lifting 92–101
single economic unit 98–100
vicarious liability 102–103
voidable contracts
failure to disclose interest 256
rescission in equity 398
voting 567
body corporate or association 299–300
election of directors 209–210, 217–218, 485–486
joint shareholders 300
polls 299
shareholder agreements
show of hands 298–299
voting rights 490
alteration of class rights 196–197
amalgamations 500
class of shares 185
series of 188
dissent right as extension of 361
joint shareholders 300
ordinary shares 189
polls 299
waivers
directors’ liabilities 273, 277
dissenter’s share certificates 368–369
merger with subsidiary: Bahamas 505
notice of directors’ meeting 225
prospectuses 378, 390
winding-up
auditors 534
investigations 345, 348–349, 351
see also dissolution; liquidation

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Commonwealth Caribbean Company

In the last twenty-five years, company law in the Commonwealth Caribbean

The variation within Caribbean company law presents an enormous challenge,

Andrew Burgess is a Professor of Corporate and Commercial Law and is

Titles in this series include:

Alternative Dispute Resolution

Commonwealth Caribbean Administrative Law

Commonwealth Caribbean Business Law 2/e

Commonwealth Caribbean Civil Procedure 2/e

Commonwealth Caribbean Constitutional Law

Commonwealth Caribbean Criminal Practice and Procedure 3/e

Commonwealth Caribbean Land Law 1/e

Commonwealth Caribbean Property Law 3/e

Commonwealth Caribbean Public Law 3/e

Commonwealth Caribbean Tort Law 4/e

Commonwealth Caribbean Law of Trusts 3/e

Judicial Review in the Commonwealth Caribbean

Commonwealth Caribbean Contract Law

Commonwealth Caribbean Employment and Labour Law

Simultaneously published in the USA and Canada

Routledge is an imprint of the Taylor & Francis Group, an informa business

© 2013 Andrew Burgess

British Library Cataloguing in Publication Data

Library of Congress Cataloging in Publication Data

ISBN 978-0-415-66006-8 (hbk)

Typeset in Baskerville by RefineCatch Ltd, Bungay, Suffolk

To all students of Commonwealth Caribbean Company Law.

1 MODERN COMMONW EALT H CARIBBEAN COMPANY LAW IN

2 CLASSIFICAT ION OF COMPANIES

3 COMPANY FORMAT ION

4 PROMOT ION AND PRE-INCORPORAT ION T RANSACT IONS

6 CORPORAT E CAPACIT Y AND CORPORAT E AGENCY

8 CAPITAL MAINT ENANCE

9 SHARES, CLASSES OF SHARES AND CLASS RIGHTS

10 DIRECTORS AND OT HER OFFICERS

12 DIRECTORS’ DUT Y OF LOYALT Y

13 DIRECTORS’ STAT UTORY NON-FIDUCIARY DUT IES

14 DIRECTORS’ LIABILIT IES

15 SHAREHOLDERS’ DECISION-MAKING RIGHTS

16 SHAREHOLDERS AND T HE COMPLAINANT REMEDIES

17 OT HER SHAREHOLDERS’ REMEDIES

18 DISSENT ING SHAREHOLDER’S APPRAISAL REMEDY

20 LIABILIT IES FOR MISLEADING PROSPECT USES

22 DEBENT URES AND T RUST DEEDS

23 RECEIVERS AND RECEIVER-MANAGERS

25 FUNDAMENTAL COMPANY CHANGES

26 FINANCIAL DISCLOSURE AND AUDIT REQUIREMENTS

27 T RANSFERS OF SHARES AND DEBENT URES

28 CORPORAT E REGIST ERS AND RECORDS

The most recent company legislation in the Bahamas, Barbados, Guyana,

A Company, Re [1990] 2 BCLC 500 Eng CA 95

Al Saudi Banque v Clark Pixley [1989] 3 All ER 361 Eng Ch D 543

Anthem Works Ltd, Re [2005] 5 BLR (4th) 298 BC SC 573, 575

Bond v Barrow Haematite Steel Co [1902] 1 Ch 353 Eng Ch D 168, 169

Exco Corporation v Nova Scotia Savings & Loan Co (1987) 35

George Newman & Co, Re [1895] 1 Ch 674 Eng CA 226

Greenhalgh v Mallard [1943] 2 All ER 234 Eng CA; [1943] 2 All

Incorporated Interest Pty Ltd. v Federal Commissioner of

Kingston Cotton Mill Co, Re (No 2) [1896] 2 Ch 279 Eng CA 539

Lennard’s Carrying Co. Ltd v Asiatic Petroleum Co. Ltd [1915]

Lopez v Telecommunication Services of Trinidad and Tobago 316, 319, 320,

Manurewa Transport Ltd, Re [1971] NZLR 909 422

Metropolitan Fire Insurance Co, Re, Wallace’s Case [1900] 2 Ch

Motherwell v Schoof [1949] 4 DLR 812 Alta SC 246, 312