Partnership

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286

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Even if there was a mistake or problem with the way a director, manager, or secretary was appointed or qualified, the things they did in that position are still considered valid and legal. So their decisions and actions still count even if there was a mistake in their appointment or qualification.

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285(1) (2)(3)

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-The people in charge of the company, called directors, have to take a break from their job every once in a while. This happens at a special meeting called the annual general meeting. At the first annual general meeting, all of the directors have to take a break. After that, at every annual general meeting, one-third of the directors will have to take a break. If there are not enough directors for one-third to make sense, then the closest number of directors to one-third will have to take a break.

-Every year, some of the directors in a company need to retire from their position to create space for new directors. The specific directors who retire will be the ones who have been directors for the longest time since their last election. If there are multiple directors who started on the same day and need to retire, then it will be decided by choosing one of them by chance, like picking a name from a hat.

-If a director retires as explained before, the company can choose someone else to take that person's place. If they don't choose someone else, the retiring director can be considered re-elected if they choose to run for re-election. This is unless the company specifically decides not to fill the vacant position or there's a vote to re-elect the retiring director and they don't get enough votes to be re-elected.

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287

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When a company holds a meeting, the shareholders of the company may propose a motion to appoint new directors to the board. However, for public companies (not private companies), a single motion to appoint multiple people as directors cannot be proposed without prior agreement from the meeting. This means that the shareholders must first pass a resolution stating that they are okay with a single motion to appoint multiple directors. If this prior resolution is not passed, then a single motion to appoint multiple directors cannot be proposed at the meeting.

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288

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This means that a company can vote to remove a director from their position before their time in office is up by Ordinary resolution. Even if the company's rules (called "articles") or any agreement with the director say they can't be removed early, a vote by the company can still make it happen.

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46(3)

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If the memo or article of the company allow someone who is not a member or officer of the company to appoint or remove any director or officer of the company, that person has the power to do so even though they are not part of the company. This means that they can make decisions about who is in charge of the company even if they don't work for it or own any part of it.

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Erlich V. Leifer & ors

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So there was a school and its principal named Leifer. The plaintiff was a student at the school who said that the principal abused them between 2003 and 2006, which caused them mental harm.The court said that the school was responsible for what the principal did in two ways. First, they said that the principal was basically the "mind" of the school and had complete power and control over everything. So when the principal did something wrong, it was like the school did something wrong.Second, they said that the school didn't do enough to stop the principal from doing bad things. The principal had a lot of power and nobody was really checking on her to make sure she was doing things right. So even though the principal was the one doing the abuse, the school was still responsible for not stopping her.So in the end, the court said that the school was responsible for what happened to the plaintiff because they didn't do enough to stop it from happening. the school was held responsible for the bad things the principal did. The principal had a lot of power and could do whatever she wanted, and she used that power to hurt a student. Because the school gave the principal that power and didn't do enough to stop her, they are also responsible for what she did. Even though sexual abuse is not part of the principal's job, because it happened in the context of the school and because the principal had so much power over the students, the school can still be blamed for what happened.

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Meridian global funds management V The securities commission

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So, there was a company called Meridian, and one of its former employees, Koo, used some of the company's money to buy a lot of stocks in another company. When someone buys a lot of stocks in a company, they become what's called a "substantial security holder." The law in New Zealand says that if someone becomes a substantial security holder, they have to tell the company and the stock exchange as soon as they know or should have known. But Koo didn't tell anyone.The question was whether Meridian should be held responsible for Koo's actions, since he didn't follow the law and tell anyone he had become a substantial security holder. The trial judge said that Koo's knowledge was the same as Meridian's knowledge, since Koo knew everything and should have told Meridian. But then the question went to a higher court, and they had to decide whether it was really fair to hold Meridian responsible for Koo's actions.The higher court said that it depends on what the law actually says. They said that if the law doesn't say anything about who is responsible, then the court has to decide based on what makes the most sense in the situation. Sometimes, the court might say that the person in charge of the company (like the CEO or the board of directors) is responsible, because they're the ones who are supposed to know everything that's going on. But sometimes, that's not the right answer.In this case, the law said that if someone becomes a substantial security holder, they have to tell the company and the stock exchange. Since Koo was the one who bought the stocks, and he knew he was supposed to tell everyone, the court said that his knowledge should be the same as Meridian's knowledge. So, even though Koo was the one who messed up, Meridian was still responsible for not following the law. Lord Hoffmann was discussing the principles of attribution in company law in the context of a case called Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd. He was suggesting that there had been some misunderstanding of these principles.In essence, Lord Hoffmann was saying that it is important to have rules that determine which actions of a company can be attributed to the company itself. These rules are called "rules of attribution". Some of these rules are found in the company's articles of association, which are the internal rules that govern how the company is run. One important rule is the principle of agency. This means that the company can hire people to help them get things done, and those people are like helpers who can do things on behalf of the company. Their actions are treated like the actions of the company itself.But not everyone who works for the company can make decisions for the whole company. Usually, it's just the boss (like the general manager or board of directors) who can make the big decisions. They might have other people working for them, but those people can only make decisions that the boss approves of.It's also important to understand that just because someone who works for the company does something, that doesn't mean the whole company is responsible for it. It depends on the specific rule that applies to that situation.For example, if the company buys a lot of shares in another company, there's a rule that says the company needs to tell everyone about it. Even if the person who did the buying was doing it for corrupt reasons, the company still needs to follow the rule and tell everyone about it.So, basically, companies have rules to figure out who is responsible for what they do. Some of these rules are written down, some are not, and it depends on the situation which rule applies. But everyone who works for the company needs to follow these rules to make sure everything is done properly. So, in summary, Lord Hoffmann was discussing the principles of attribution in company law and the need to have clear rules for determining which actions of a company can be attributed to the company itself. He was emphasizing that these rules depend on the specific circumstances and that not every act of an agent or servant can be attributed to the company.

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Lennard Carrying v Asiatic Petroleum

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In the case of Lennard Carrying v Asiatic Petroleum, a ship owned by Lennard Carrying was transporting goods owned by Asiatic Petroleum. Unfortunately, the ship sank and the cargo was lost due to unseaworthiness. Asiatic Petroleum sued for the loss of their cargo, but Lennard Carrying relied on Section 502 of the Merchant Shipping Act, which exempted shipowners from liability for losses if an event happened without actual fault or privity.The judge in the case found that Mr. Lennard, the director of Lennard Carrying, either knew or should have known of the defects of the ship. As a result, the appellant (Lennard Carrying) could not rely on Section 502 to avoid liability for the loss of the cargo.The main issue in this case was whether the actions of the director, Mr. Lennard, should be attributed to the corporation, Lennard Carrying. Lord Hoffmann opined that it is a necessary part of corporate personality that there should be rules by which acts are attributed to the company. These may be called "rules of attribution".Primary rules of attribution are found in the company's articles, such as rules for appointing members of the board. Other primary rules may be implied by company law, such as the unanimous decision of shareholders in a solvent company being the decision of the company.These primary rules of attribution need to be complemented by general rules of attribution for a company to do business, such as the principle of agency. A company will appoint agents or servants whose acts, by a combination of primary and general rules, count as acts of the company.However, it is important to note that general rules of attribution do not mean that whenever a servant of the company has authority to act on its behalf, knowledge of that act will be attributed to the company for all purposes. It's a question of construction in each case as to whether the particular rule requires that knowledge of that act be attributed to the company.In the case of Lennard Carrying v Asiatic Petroleum, Lord Hoffmann opined that there had been a misunderstanding of the true principle of attribution. He stated that the directing mind and will of the company should be limited to the general manager, board of directors, and managing director. These directing minds can also appoint officers and agents to help carry out the work of the company, and their acts shall therefore bind the company.In summary, the court found that Mr. Lennard's actions as a director could be attributed to Lennard Carrying, and therefore the company could not rely on Section 502 to avoid liability for the loss of Asiatic Petroleum's cargo. This case highlights the importance of understanding the rules of attribution for corporate acts and the limitations of those rules. Okay, so let's talk about the Lennard Carrying v Asiatic Petroleum case. There was a ship owned by Lennard Carrying that was carrying goods owned by Asiatic Petroleum. Unfortunately, the ship sank and the cargo was lost. Asiatic Petroleum sued for the loss of their cargo, but Lennard Carrying tried to rely on a law called Section 502 of the Merchant Shipping Act. This law says that ship owners are not liable for losses if they happened without fault or knowledge on their part.But the judge found that Mr. Lennard, who was in charge of Lennard Carrying, knew or should have known that the ship was not in good condition, so Lennard Carrying couldn't rely on Section 502. This led to the question of whether the company could be held responsible for the actions of its director, Mr. Lennard.The House of Lords, which is a group of very important judges, unanimously decided that Mr. Lennard was not just a servant or agent of the company, but he was actually the mind of the company. They said that a company is just an abstract idea, it doesn't have a mind or body of its own. So, the actions of the company have to be attributed to someone who is the directing mind and will of the company.Viscount Haldane, who was one of the judges, said that this person is not just an agent or servant of the company, but someone for whom the company is liable because his actions are the very actions of the company itself. This is called the principle of attribution. So, if someone tries to use Section 502 to excuse themselves from liability, they have to prove that they are not the directing mind of the company. In this case, the court found that Mr. Lennard was the directing mind of Lennard Carrying.Since Mr. Lennard was the directing mind, his actions had to be considered the actions of the company. This meant that Lennard Carrying couldn't use Section 502 to avoid liability for the loss of Asiatic Petroleum's cargo. The House of Lords said that liability could be imposed on a corporation for the acts of its directors because there is a presumption that the directors are the controlling mind of the company. In this case, Mr. Lennard and Lennard Carrying didn't prove otherwise.Viscount Haldane said that identifying the directing mind and will of a company is primarily a constitutional question, which depends on the powers given to a person by the articles of association. So, in this case, since Mr. Lennard was the natural person to come and give evidence about the events, and he was an active director who took part in the management of the ship, his actions were considered the actions of the company itself.

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Christian Youth Camps (CYC) V Cobaw community health

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In this case, a group called Christian Youth Camps (CYC) refused to let a woman named Ms. Freeman book their facilities for a weekend retreat with a group of young people from an organization that supports LGBTQ+ people. CYC said they only allow married heterosexual couples to use their facilities. Ms. Freeman argued that this was unfair and went against her rights.The case went to court and the court agreed with Ms. Freeman. They said that CYC's policy was discriminatory because it only allowed one type of people to use their facilities, and it unfairly excluded other people who didn't fit into that category. The court also said that CYC didn't have a good enough reason for their policy. The Court of Appeal's decision was based on the interpretation of the Charter and its application to the facts of the case. The Court held that CYC's policy of only allowing married heterosexual couples to use its facilities constituted indirect discrimination, as it had a disproportionate impact on people who did not fit this category. The Court also held that this discrimination was not justified, as CYC failed to demonstrate that its policy was a proportionate means of achieving a legitimate aim. rom the liability of director perspective, it is important to note that the directors of CYC could potentially be held liable for the discrimination committed by the organization. Directors have a duty to act in the best interests of the company and to ensure that the company complies with all relevant laws and regulations.In this case, the directors of CYC could be held liable if it is found that they were aware of the discriminatory policy and did nothing to prevent it. The directors could also be held liable if it is found that they were not properly overseeing the company's policies and procedures, which allowed the discriminatory policy to be implemented.It is important for directors to be proactive in ensuring that their companies comply with all relevant laws and regulations, and to take action to address any potential issues of discrimination or other forms of illegal behavior. Failure to do so could result in personal liability for the directors.

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Abdul Ajou V Dollar holdings

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This case was about whether a company can be held responsible for something that its director knew about. The court decided that the company was responsible because the director who was in charge of receiving money knew about the bad things that were happening. Even though he wasn't the boss of the company, he had control over this specific part of the company and made all the decisions about it. He even signed papers saying that the company would take the money even though he didn't have permission from the company's board. So, his knowledge about the bad money was like the company's knowledge. Even though he wasn't the most important person in the company, he had control over this part of it and made all the important decisions. Lord Hoffmann In his opinion, he explains that under English law, whether someone is considered to be an organ of a company (which means a part of the company that acts on its behalf) depends on the extent of the powers that they have to make decisions for the company, whether those powers are given to them explicitly or implicitly.In the case of Mr. F and DLH, the question is whether Mr. F had enough power to be considered the directing mind of the company for the Yulara transaction. While the trial judge did not view Mr. F as the directing mind because he was directed by American beneficial owners and did not exercise independent judgment, Lord Hoffmann believes that Mr. F's actions in signing the necessary agreements and claiming to be the ultimate beneficial owner of the company without board resolution could be enough to establish him as the directing mind for this specific transaction.According to Lord Hoffmann, the most significant factor is that Mr. F committed the company to the transaction as an autonomous act, which the company later accepted. This means that Mr. F was able to make decisions on behalf of the company without seeking approval from the board, which is an indication of significant power and authority. If Mr. F is considered to be the directing mind for the Yulara transaction, then his knowledge and actions will be attributed to the company, and the company will be affected by any legal consequences of those actions.