Ashbury Rly Carriage and Iron Co Ltd v Riche

From Wikipedia, the free encyclopedia
Jump to navigation Jump to search
Ashbury Railway Carriage and Iron Co. Ltd v Riche
Royal Coat of Arms of the United Kingdom.svg
CourtHouse of Lords
Citation(s)(1875) LR 7 HL 653
Case history
Prior action(s)(1875) LR 9 Ex 224
Keywords
companies, objects clause, corporate capacity, ultra vires

Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7 HL 653 is a UK company law case, which concerned the objects clause of a company's memorandum of association.

Its importance as case law has been diminished as a result of the Companies Act 2006 s 31, which allows for unlimited objects for which a company may be carried on. Furthermore, any limits a company does have in its objects clause has no effect whatsoever for people outside a company (s 39 CA 2006), except as a general issue of authority of the company's agents.

Facts[edit]

Incorporated under the Companies Act 1862, the Ashbury Railway Carriage and Iron Company Ltd’s memorandum, clause 3, stated that its objects were "to make and sell, or lend on hire, railway-carriages…" and clause 4 stated that activities beyond this needed a special resolution. But the company agreed to give Riche and his brother a loan to build a railway from Antwerp to Tournai in Belgium.[1] Later, the company repudiated the agreement. Riche sued, and the company pleaded that the action was ultra vires.

Judgment[edit]

Exchequer Court[edit]

The judges of the exchequer chamber being equally divided, the decision of the court below was affirmed.

Blackburn J said:

House of Lords[edit]

The House of Lords, agreeing with the three dissentient judges in the Exchequer Chamber, pronounced the effect of the Companies Act to be the opposite of that indicated by Mr Justice Blackburn. It held that if a company pursues objects beyond the scope of the memorandum of association, the company's actions are ultra vires and void. Lord Cairns LC said,

References[edit]

  1. ^ Yadaf, H. R., (2012), Doctrine of Ultra Vires under Companies Act 1956, Chapter 7, accessed 16 September 2018
  2. ^ a b Encyclopædia Britannica 1911, Corporation, accessed 16 September 2018

 This article incorporates text from a publication now in the public domainChisholm, Hugh, ed. (1911). "Corporation" . Encyclopædia Britannica (11th ed.). Cambridge University Press.