Lochaber District Committee of Inverness-Shire County Council and Others v. The Invergarry and Fort Augustus Railway Co. [1913] ScotLR 550 (19 March 1913)

Lochaber District Committee of Inverness-Shire County Council and Others v. The Invergarry and Fort Augustus Railway Co. [1913] ScotLR 550 (19 March 1913)

It is ultra vires for the directors of a statutory railway company to dismantle the entire railway and sell its plant, thereby terminating the undertaking as a railway, without statutory or parliamentary authority. Such action cannot be justified as ordinary management or prudent administration, as the undertaking is a public asset protected by statute, and its abandonment requires compliance with statutory procedures and parliamentary sanction.

Citation
[1913] ScotLR 550
Parties
Complainers (applicants/respondents to Reclaiming Note): Lochaber District Committee of Inverness-Shire County Council and Others; Respondents (reclaimers): The Invergarry and Fort Augustus Railway Company
Jurisdiction
Scotland
Judgment Date
19 March 1913
Procedural Posture
Civil (petition for Suspension and Interdict) / Reclaiming Note (appeal) From Interlocutor Granting Interim Interdict in Bill Chamber
Outcome
Interlocutor of Lord Ordinary affirmed; interim interdict continued; case remitted to Lord Ordinary for record to be made up for further procedure.
Legal Topics
Ultra Vires Acts, Statutory Undertakings, Abandonment of Railway, Powers of Directors, Statutory Obligations, Public Interest
Company Law Railway Law Public Law Ultra Vires Acts Statutory Undertakings Abandonment of Railway Powers of Directors Statutory Obligations +1 more

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Parties

Lochaber District Committee of Inverness-Shire County Council and Others

Complainers (applicants/respondents to Reclaiming Note)

The Invergarry and Fort Augustus Railway Company

Respondents (reclaimers)

Procedural Posture

Civil (petition for Suspension and Interdict) / Reclaiming Note (appeal) From Interlocutor Granting Interim Interdict in Bill Chamber

Legal Issues

  1. 1 Whether directors of a railway company have power to dismantle the entire undertaking and sell the plant without statutory authority or parliamentary sanction
  2. 2 Whether such action is ultra vires and illegal
  3. 3 Whether shareholders and debenture holders have title to object

Ratio Decidendi

It is ultra vires for the directors of a statutory railway company to dismantle the entire railway and sell its plant, thereby terminating the undertaking as a railway, without statutory or parliamentary authority. Such action cannot be justified as ordinary management or prudent administration, as the undertaking is a public asset protected by statute, and its abandonment requires compliance with statutory procedures and parliamentary sanction.

Court Disposition

Interlocutor of Lord Ordinary affirmed; interim interdict continued; case remitted to Lord Ordinary for record to be made up for further procedure.

Orders

  • Interim interdict against the railway company from selling or disposing of the permanent way material and plant continued.
  • Case remitted to Lord Ordinary to make up a record for further proceedings.