Meridian Global Funds Management Asia Ltd v Securities Commission

Meridian Global Funds Management Asia Ltd v Securities Commission
Court	Privy Council
Citation(s)	[1995] 2 AC 500
Keywords
Derivative claim

Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 is a UK company law and UK insolvency law case concerning derivative claims.

Facts

Meridian was part of a syndicate bidding to take over NZ company, Euro National Corp Ltd. Mr Koo and Mr Ng, working for Meridian, bought 49% of Euro’s shares. But Meridian failed to disclose to the Securities Commission of New Zealand that they had become a ‘substantial security holder’ of over 5% because Koo and Ng wanted to hide the transaction from their superiors. The Commission imposed fines against Koo, Ng and the Meridian. The company argued it was not liable because it had not known about it.

Heron J held Meridian knew it was a substantial property holder, because as employees the knowledge of Koo and Ng was attributable to the company. The NZ Court of Appeal held that Koo’s knowledge should be attributable because he was the ‘directing mind and will’ of the company. Meridian argued that was only the board, not Koo.

Advice

Lord Hoffmann for the Privy Council advised that ‘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 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. These may be called ‘the rules of attribution’. There can be rules in the constitution or rules implied (e.g. shareholders acting unanimously are the company, Multinational Gas). Otherwise, the principles of agency apply, and the company acts through its servants and agents.

“

The company’s primary rules of attribution, together with the general principles of agency, vicarious liability and so forth are usually sufficient to enable one to determine is rights and obligations.’ Except where rules refer to specific individuals... ...the fact that a company’s employee is authorised to drive a lorry does not in itself lead to the conclusion that if he kills someone by reckless driving, the company will be guilty of manslaughter. There is no inconsistency. Each is an example of an attribution rule for a particular purpose, tailored as it always must be to the terms and policies of the substantive rule…

”

See also

• Corporate manslaughter
• Imputation (law)
• Russian Commercial and Industrial Bank v Comptoir d'Estcompte de Mulhouse [1923] 2 KB 630

Notes

References

External links

• Meridian's website (based in Bermuda)