McPHAIL V. MITTON 4/1940

McPHAIL V. MITTON 4/1940

McPhail was guilty of misfeasance as director in directing and permitting company funds to be paid for liabilities not incurred by Lasscock's Nurseries Ltd., and such payments were not in its interest but for the benefit of Lyons and Leader Ltd. (in which McPhail had a personal interest); these payments were ultra vires and not authorised under the company's powers.

Parties
Applicant: Lasscock's Nurseries Limited (in liquidation); Appellant: McPhail; Respondent: Mitton
Jurisdiction
Australia
Judgment Date
27 September 1940
Procedural Posture
Appeal / Judgment
Outcome
appeal dismissed with costs
Legal Topics
Director's Duties, Misfeasance, Breach of Trust, Ultra Vires, Company Payments
Corporate Law Director's Duties Misfeasance Breach of Trust Ultra Vires Company Payments

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Parties

Lasscock's Nurseries Limited (in liquidation)

Applicant

McPhail

Appellant

Mitton

Respondent

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Whether payments made by McPhail as director of Lasscock's Nurseries Ltd. were misfeasance and breach of trust
  2. 2 Whether Lasscock's Nurseries Ltd. had liability for payments made to S.H. and P.F. Leader and Lyons and Leader Ltd.
  3. 3 Whether payments were ultra vires of the company and its directors

Ratio Decidendi

McPhail was guilty of misfeasance as director in directing and permitting company funds to be paid for liabilities not incurred by Lasscock's Nurseries Ltd., and such payments were not in its interest but for the benefit of Lyons and Leader Ltd. (in which McPhail had a personal interest); these payments were ultra vires and not authorised under the company's powers.

Court Disposition

appeal dismissed with costs

Orders

  • McPhail to pay £2,770-14-7 and £50 to the liquidator of Lasscock's Nurseries Ltd.