Bell Houses, Ltd. v. City Wall Properties, Ltd.[1966] 2 All ER 674

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DANCKWERTS, L.J. – This is an appeal from a decision of MOCATTA, J. dated July 5,
1965, in an action brought by the plaintiff company, Bell Houses, Ltd., against the
defendants, City Wall Properties, Ltd., to recover a commission or procuration fee of £20,000
under an agreement alleged to have been made between the parties between Feb. 5 and Mar.
9, 1962.
The plaintiff company is a private company limited by shares and its principal business in
fact is the development of housing estates. The chairman of the directors, Mr. Randal
Mulcaster Bell, controls the company and its administration. The other directors were his wife
and a brother of Mr. Bell, but the brother has left the company now. All effective dealings of
the company were really done by Mr. Bell, and this was officially authorised by a resolution
passed on June 10, 1955, at a meeting of the board of directors whereby it was resolved that
the administration of the company generally and with regard to sales be left for the chairman
to deal with together with his principal sales agent. The directors had power to delegate in this
way by virtue of art. 102 of Table A in Sch. 1 to the Companies Act, 1948, which was
incorporated in the company’s articles. The method by which the business of the company
was transacted was described by Mr. Bell in evidence as being the acquisition of vacant sites
for which no planning consent had been obtained, because the land is thus obtained at a
cheaper price. The contract of purchase was made subject to planning consent and the
company then obtained outline planning consent and proceeded with the development of the
site as a housing estate. The practice of the company was to have the sites conveyed to
subsidiary companies controlled by Mr. Bell apparently purely as a matter of convenience.
Finance had, of course, to be obtained, and so advances on mortgages were obtained for these
companies from some “financier”. A noteworthy feature is that the advances to those
companies might exceed the purchase price of the sites, but this was due to the value provided
by the plaintiff company’s possession of planning consent and the enhanced values which
would be produced by the development on the sites of housing estates. For this purpose
building leases of the sites were granted to the plaintiff company, and this was a condition of
the advances made to the companies. The sums advanced were repaid when the purchasers of
the houses paid for them by means of loans from building societies obtained in the ordinary
way.
It is obvious that in order to finance these transactions Mr. Bell and his company, the
plaintiff company, had to know of persons who were willing to provide the finance, and
knowledge of such sources was a matter of value. Four of such transactions took place with
a financing company called Nestlé’s Pension Trust, Ltd. (“the Trust”), two of the transactions
being with a company called Maes-y-Tannau Estates, Ltd., and the others being with
companies called Pont Faen Investments, Ltd. and Golden Court (Richmond), Investments,
Ltd. An argument was put forward on behalf of the defendants (City Wall Properties, Ltd.)
that these were transactions between the trust and these three companies and not the plaintiff
company. It is true that the plaintiff company held no shares in these companies, but they
were controlled by Mr. Bell, the chairman of the plaintiff company. This argument seems to

me to ignore the reality that these properties were conveyed to and the advances by the trust
made to these companies merely as the nominees of the plaintiff company and for the
convenience of the business of the plaintiff company and for the convenience of the plaintiff
Company. It is true that the plaintiff company held no shares in these companies, but they
were controlled by Mr. Bell, the Chairman of the plaintiff company and were therefore not
independent in fact. The reality is that this was all machinery to effect the plaintiff company’s
operation. In my opinion there is no substance in this point.
The way in which the defendants came into the matter was as follows. The plaintiff
company had been approached by financiers, including apparently some Swiss financiers,
with a view to the plaintiff company being financed in their business transactions from such
sources. The plaintiff company had at the moment no development scheme for which the
company could use the money, but in the course of a lunchtime meeting between Mr. Skeggs,
who is a solicitor but was acting as the agent of the defendants in financial matters, and Mr.
Bell it emerged that the defendants required finance to the extent of £1 million for the purpose
of their current schemes – what was called “bridging finance”. Mr. Skeggs said that this
variety of bridging finance was extremely difficult to obtain. Mr. Bell intimated that he knew
of sources from which such finance could be obtained. After a few abortive attempts to obtain
it from other sources, eventually the money required was to be provided by the trust.
It is claimed by the plaintiff company that for this service the defendants agreed to pay a
commission of £20,000 to Bell Houses. The introduction was effected, but the defendants
refuse to pay to the plaintiff company the amount in question. In this action the plaintiff
company claim payment of this sum as due from the defendants under the alleged agreement.
Alternatively, the plaintiff company claims £20,000 damages on an implied term that the
defendants would not prevent the plaintiff company earning the commission. The contract is
denied in the defence, though (i) a letter of Mar. 2, 1962, from Mr. Skeggs to Mr. Bell, (ii) a
letter of Mar. 5, 1962, from Mr. Bell to the surveyor of the trust, (iii) his reply to Mr. Bell of
Mar. 6, 1962, (iv) a letter of Mar. 9, 1962, from Mr. Bell to Mr. Oppenheim, the chairman of
the defendant company, and (v) a letter of Mar. 13, 1962, from Mr. Oppenheim to Mr. Bell,
suggest the existence of a contract of the kind alleged; but this issue is not before us because a
new point was taken by the defendants at the last moment.
The action came on for trial before MOCATTA, J., on Monday, June 28, 1965. On the
previous Friday counsel for the defendants informed counsel for the plaintiff company that he
had been instructed to take the point that the alleged contract was void as ultra vires the
plaintiff company since it was not authorised by the objects clause in the plaintiff company’s
memorandum of association. The learned judge allowed the defence to be amended by adding
the following paragraph:
“The defendants will say that the agreement or agreement herein alleged by [the
plaintiff company] were at all material times ultra vires [the plaintiff company] and
void in that [the plaintiff company] under their memorandum of association had no
power to enter into such agreement or agreements.”
The result of this was that the action took a different turn: the matter raised by the
amendment was heard and decided as a preliminary point.

The learned judge states in his judgment three separate points as arising for decision. (i)
Can a defendant when sued on a contract by a company take the point that that contract is
ultra vires the company? (ii) If he can do so when the contract is executory, can he do so or is
the point relevant when the contract has been executed so far as the company’s obligations are
concerned? (iii) Assuming that the answers to the first two questions are in the affirmative,
was the contract ultra vires the plaintiff company? The learned judge did not deal with the
three points in that order; and, indeed, it is clear that if the answer on the third of the points is
that the contract is not ultra vires the plaintiff company, the other two points do not arise.
The learned judge decided the third point in the defendants’ favour and dismissed the action.
We, also, have heard the third point argued first, and in the result we have not found it
necessary to hear argument on the other two points.
One point was raised and discussed in argument which is not really involved in the
question of ultra vires, but which I suppose went to the basis of the contract alleged by the
plaintiff company. It was argued on behalf of the defendants that the dealings with the
defendants were conducted by Mr. Bell on his own behalf and not on behalf of the plaintiff
company, so that the plaintiff company had no interest in the matter. This argument seems to
me to be completely untenable. There is no evidence that Mr. Bell ever claimed the benefit of
the £20,000 for himself. As has already been mentioned, Mr. Bell controlled the plaintiff
company and administered it completely, and it is evident that he used the company for the
purposes of the business. He was authorised by the resolution of the board of directors to
conduct the administration of the company’s business on behalf of the board, and it is
impossible to suppose that he was distinguishing business negotiations carried out by him
from the business of the company. Letters written by him in the course of this transaction
were always written on the plaintiff company’s notepaper, and though most of his letters were
signed by his Christian name, that was in accordance with the terms on which these business
men were and some of the letters, and in particular the letter of Mar. 9, 1962, to Mr.
Oppenheim (the chairman of the defendants) were signed by Mr. Bell as “Chairman”. Finally
the action has been brought in the name of the plaintiff company. There is no doubt that if
there was a contract to pay commission, the contract was made with the plaintiff company,
through Mr. Bell.
Before I consider the provisions of the company’s memorandum of association there is a
point which I wish to make that affects the approach to this matter in regard to the plaintiff
company’s objects as stated in the memorandum. In order to give a more convincing air to
their arguments, counsel for the defendants have treated the transaction which is under
discussion as though it was a deliberate embarking by the plaintiff company on a serious new
business of what counsel called “mortgage broking”. In my opinion this is a false approach.
From the plaintiff company’s point of view it was not the opening of a new class of business
intended to be carried on by the company on any serious scale. It was simply an isolated
transaction which was intended to assist the defendants (since for the time being the plaintiff
company could not avail itself of the financial opportunity because it has at the moment no
site for development), to gain goodwill with not only the defendants but also with the trust,
who were thereby to be enabled to carry out a profitable financial transaction. Besides these
advantages to the plaintiff company, there was their own interest in getting to know a

financial source, since these development companies can only carry on their development
business with the aid of borrowed money or temporary “bridging finance”, or whatever they
choose to call it. Surprisingly little money capital of their own is used in their operations,
though, no doubt, plant and such like assets of their own are used by them. The transaction
between the plaintiff company and the defendant is, of course, nonetheless a business
transaction, even though larded with lunches and Christian names.
Clause 3 of the plaintiff company’s memorandum of association contains the usual large
number of sub-clauses, identified by the letters (a) to (u). It does not contain the provision
sometimes inserted that all the sub-clauses are independent objects, or words to that effect.
The following sub-clauses must be referred to:
“(a) To carry on the trade or business of general, civil and engineering
contractors and in particular but without prejudice to the generality of the foregoing
to construct, alter, enlarge, erect and maintain either by [the plaintiff company] or
other parties, sewers, roads, streets, railways, sidings, tramways, electricity works,
gas works, bridges, shops, reservoirs, factories, water-works, brick kilns and brick or
tile works, timber yards, buildings, houses, offices and all other works, erections,
plant, machinery and things of any description whatsoever either upon land acquired
by [the plaintiff company] or upon other land and generally.
“(b) To acquire by purchase, exchange or otherwise either for an estate in fee
simple or for any interest or estate in land, whether in possession or in reversion and
whether vested or contigent, any lands, tenements and premises of any tenure,
whether subject or not to any charges or incumbrances and any easements or other
rights in or over land and any concessions, patents, patent rights, licences, copyrights,
secret processes, machinery, plant, stock-in-trade and any other real or personal
property and to hold or to sell, develop, let on rent, mortgage, charge or otherwise
deal with all or any of such lands, tenements or premises and buildings erected
thereon and all other such real and personal property.
“(c) To carry on any other trade or business whatsoever which can, in the opinion
of the board of directors, be advantageously carried on by [the plaintiff company] in
connexion with or as ancillary to any of the above businesses or the general business
of [the plaintiff company].
“(m) To accept payment for any property or rights sold or otherwise disposed of
or dealt with by [the plaintiff company].
“(q) To sell, improve, manage, develop, turn to account, exchange, let on rent,
royalty, share of profits or otherwise, grant licenses, easements and other rights in or
over, and in any other manner deal with or dispose of the undertaking and all or any
of the property and assets for the time being of the company for such consideration as
[the plaintiff company] may think fit.
“(u) To do all such other things as are incidental or conducive to the above
objects or any of them.”
Paragraph (m) was referred to but does not add anything material for present purposes.
By cl. 5 the share capital of the plaintiff company is £ 2,100, of which £ 2,000 consists of

preference shares, which makes it obvious that the operations of the company must be
financed by borrowing.
MOCATTA, J. was referred for the purposes of a summary of the law to the passage in
Buckley On The Companies Act (13th Edn.) p. 23:
“The doctrine that any act not authorised by the memorandum is ultra vires is to be
applied reasonably. Anything fairly incidental to the company’s objects as defined is
not (unless expressly prohibited) to be held to be ultra vires. The question is not,
however, whether the act or business not expressly authorised by the memorandum
can conveniently or advantageously be done or carried on in conjunction with acts or
business which are so authorised, but whether it is reasonably incidental or accessory
thereto. Thus it is ultra vires for a company formed to work tramways to carry on
either the business of an omnibus company or a general parcels collection and
delivery business, however conveniently or advantageously such business can be
combined with the tramways business.”
Accepting this paragraph as substantially correct, the example given may be somewhat
misleading.
The authorities cited for the example given are London County Council v. A. G. and A.
G. v. Manchester Corpn. [(1901) 1 Ch 781 at pp. 784, 785] As regards the first of these cases
the powers of the London County Council were statutory, being derived entirely under the
London County Tramways Act, 1896, under which the council had been authorised to
purchase the tramways undertaking. The decision of House of Lords was simply that running
omnibuses was not incidental to running tramways. In the Manchester case the corporation
were empowered by provisional orders and private Acts of Parliament to construct and
maintained tramways, and there was a provision that “the tramways may be used for the
purpose of conveying passengers, animals, goods, minerals, and parcels.” The corporation
proposed to carry on a general parcels delivery business both within and beyond the area
covered by their tramways, not confined to parcels and goods carried on their tramways. This
business was held by FARWELL, J., to be beyond their powers.
These two cases of statutory powers seem to me to be not directly relevant to a company
formed under the Companies Acts the powers of which are established by the memorandum
of association of the company with extensive detailed powers therein contained which have to
be construed. For instance, in the present case, cl. 3 (c) of the plaintiff company’s
memorandum provided (among the company’s objects) express power:
“to carry on any other trade or business whatsoever which can, in the opinion of the
board of directors, be advantageously carried on by the company in connexion with
or as ancillary to any of the above businesses or the general business of the
company.”
This is the clause (amongst others) which has to be construed by the court in the present
case, and I propose to construe the clause in the first place according to the words used in it,
and to consider the authorities subsequently in order to see whether those compel us in any
way to give a different meaning to the expressions in this memorandum.

For the moment I do not purpose to consider the effect produced by the words “in the
opinion of the board of directors”, though an important point is the effect of these words. In
the first place, I would repeat the observation which I made earlier in this judgment: this is not
a case where the company is deliberately launching out into a completely new field of
business. There is no intention shown on the part of the company to indulge in a general
mortgage broking business though some alternate openings for the application of the moneys
of the trust were discussed while the negotiations with the defendants were proceeding and, at
the end, a polite hope to do other business was mentioned.
It appears that the opportunity to do a good turn to the defendants and to gain the
goodwill of the trust arose practically by accident. The facts mentioned above were plainly
advantageous to the plaintiff company, as well as the prospective receipt of a sum of £20,000.
In my view, this piece of business arose “in connexion with” the general business of the
company and “as ancillary” to the general business of the company, which appears to be as
described in sub-cl. (a) and sub-cl. (b) of cl. 3 of the memorandum. In the course of
administration by Mr. Bell of the plaintiff company and its business or businesses, Mr. Bell
had to find suitable sites for the development of housing estates and sources from which
advances could be obtained for the purpose of financing the plaintiff company’s operations.
The knowledge thus acquired by Mr. Bell was a valuable asset and was not Mr. Bell’s
personal property but was the property of the company.
In my opinion the provisions of cl. 3 (q) are also applicable. This sub-clause empowers
the plaintiff company (amongst other things) to “turn to account”, and to “deal with or dispose
of”, “all or any of the property and assets for the time being of [the plaintiff company] for
such consideration as [the plaintiff company] may think fit.” It seems to me that in
communicating to the defendants information as to sources of finance, Mr. Bell, in the
administration of the company, was turning to account, dealing with and disposing of an asset
of the company as authorised by this sub-clause.
Finally, there is the general provision in cl. 3 (u) of the plaintiff company’s memorandum
but it does not seem to be necessary for the plaintiff company to rely on this sub-clause in the
present case.
I now turn to the authorities. Ashbury Railway Carriage and Iron Company v. Riche is,
of course, the leading authority on the relation of companies formed under the Companies
Acts to ultra vires. That case established that a company formed under the Companies Acts is
not thereby created a corporation with inherent common law powers. It established that the
powers of such a company are limited to the objects stated in the company’s memorandum of
association. Any contract made outside these powers is not necessarily illegal, but it is void
and is not binding on the company. It cannot be ratified by the united desire of all the
shareholders. That is the approach which must be made to the problem in the present case; but
if in the present case we find that the contract was within the powers conferred by the plaintiff
company’s memorandum of association on its proper construction, then the contract is one
which the plaintiff company can make, and objection falls to the ground.
The cases on which counsel for the defendants particularly relied as showing that the
objects in the company’s memorandum of association did not cover the contract alleged in the

present case, were early cases in the history of company law and were decided soon after the
passing of the Companies Act, 1862. They are not necessarily bad law for that reason, but it
seems to me that they were somewhat special cases, in which a complete departure from the
real objects of the company had been attempted. In Joint Stock Discount Co. v Brown
[(1866) L.R. 3 Eq. 139], the objects for which the company was established were stated to be
“the carrying on the business of a bill-broker and scrivener; the drawing, accepting,
endorsing, discounting, and rediscounting bills of exchange and promissory notes;
the making advances and procuring loans on, and the investing in, securities; the
borrowing and lending of money; the guaranteeing payment of bills of exchange,
promissory notes, and advances; and the doing of all such things as the directors shall
consider incidental or conducive to the attainment of the above objects.”
Shares in a banking company called Barned’s Banking Co., Ltd. were paid for out of the
company’s money and transferred into the names of some of the directors as nominees of the
company, pursuant to a resolution of the board of directors [(1866), L.R. 3 Eq. at p.141]:
“That as the board consider that the formation of a limited joint stock bank on the
basis of the absorption of the old firm of Messrs. J. Barned & Co., of Liverpool, will
be most conducive to the interests of the company by increasing its connexions, the
company, or its nominees, assist the same by applying for ten thousand shares in the
proposed bank on the terms above stated.”
Orders were subsequently made for the winding-up of both the company and Barned’s
Bank and a bill was presented by the liquidator of the company on its behalf alleging that the
acquisition of the shares was ultra vires. One of the directors demurred to the bill. SIR
WILLIAM PAGE WOOD, V.C., overruled the demurrer and directed that the charges in the
bill must be answered. The Vice-Chancellor made observations to the effect that in his view
the suggestion that if shares were bought in the bank there would be some control over the
business of the discounting was wholly unwarranted by the plainest rules of construction
which, he said, “must limit the company’s powers to those transactions which are naturally
conducive to the objects specified.” It is easy to see why counsel for the defendants relied on
this case; but in fact the decision merely was that the allegations in the bill must be answered.
The objection that one limited company could not take shares in another limited company
though authorised by its memorandum, was disposed of by Re Barned’s Banking Co., Ex p.
Contract Corpn. and in fact Joint Stock Discount Co. v. Brown was a simple case of fraud.
The other case most relied on by counsel for the defendants was Re German Date Coffee
Co. [(1881-85) All ER 372]. The company was formed to work a German patent for
manufacturing coffee from dates, and the memorandum contained powers to acquire other
inventions for similar purposes and to import and export all descriptions of produce for the
purpose of food. The intended German patent was never granted, but the company purchased
a Swedish patent and established works in Hamburg where it made and sold coffee made
from dates without a patent. A petition was presented by two shareholders for the winding-up
of the company and it was held by KAY, J., and by the Court of Appeal that the substratum of
the company had failed, and it was impossible to carry out the objects for which it was

formed, and therefore it was just and equitable that the company should be wound up.
LINDLEY, L.J., said:
“The first question we have to consider is: What is the fair construction of the
memorandum of association? It is required by the Companies Act, 1862, that the
memorandum shall state what the objects of the company are. In construing this
memorandum of association, or any other memorandum of association in which there
are general words, care must be taken to construe those general words so as not to
make them a trap for unwary people. General words construed literally may mean
anything…; but they must be taken in connexion with that shown by the context to be
the dominant or main object or objects of the company. It will not do, under general
words, to turn a company for manufacturing one thing into a company for importing
something else, however general the words are. Taking that as the governing
principle, it appears to me to be plain, beyond all reasonable dispute, that the real
object of this company, which is called ‘The German Date Coffee Co., Ltd.’, was to
manufacture a substitute for coffee in Germany under a patent which is valid
according to German Law. All the rest is subordinate to that main object, and that is
what the people subscribe their money for, although the words are general.”
Of course, as SALMON, L.J., observed in the course of the argument, if the company’s
main business is given up, something else cannot be ancillary to it. There is no suggestion
that the plaintiff company has given up or is going to give up its main business of developing
housing estates. That is sufficient to distinguish Re German Date Coffee Co. from the present
case.
As I have mentioned, it is also necessary to consider the effect of the words in cl. 3 (c) of
the memorandum, “in the opinion of the board of directors.” I think that it is plain that these
words qualify the whole of that sub-clause. Counsel for the defendants contended that the
opinion of the directors must not only be bona fide but also objective. MOCATTA, J., even
went so far as to say that
“the mere fact that the board of directors of a company may be of opinion that an
activity can be advantageously carried on by the company, even if the opinion be
well-founded, will not per se make that activity intra vires.”
With all respect to the judges, if he is meaning to refer to the opinion required by the subclause, he is not quoting it correctly. The requirement of the sub-clause is that in the opinion
of the board of directors the other trade or business can be advantageously carried on by the
company in connexion with or as ancillary to any of the above businesses or the general
business of the company. If the judge means that the opinion of the directors has no effect at
all, then I am afraid that I cannot agree with him. On the balance of the authorities it would
appear that the opinion of the directors if bona fide can dispose of the matter; and why should
it not decide the matter? The shareholders subscribe their money on the basis of the
memorandum of association and if that confers the power on directors to decide whether in
their opinion it is proper to undertake particular business in the circumstances specified, why
should not their decision be binding? The shareholders by taking shares on the terms of the
memorandum have agreed to it. It is a matter of internal management principally. Persons

dealing with the plaintiff company in the course of trade or business are helped rather than
hindered by a provision of this sort. In the result the judge appears to have completely
disregarded this provision and to have dealt with the case on the basis that there was no real
difference between sub-cl. (c) and sub-cl. (u).
In London Financial Association v. Kelk [(1884), 26 Ch. D. 107] the objects clause
ended with the words “and the doing of all matters and things which may appear to the
company to be incident or conducive to the objects aforesaid or any of them.” SIR JAMES
BACON, V.C., in the course of a long judgment discussed the effect of the words, and seems
to have thought that they had some purpose and effect but they had to be limited by reference
to the objects of the company. This is no doubt so, but in many case SIR JAMES BACON,
V.C., held that the transaction, which was connected with the unfortunate Alexandra Palace
which was burnt down on June 2, 1873, almost immediately after completion, was within the
company’s powers, distinguishing the Ashbury case.
In Cotman v. Brougham [(1918-19) All ER Rep. 265] a company called the Essequibo
Rubber & Tobacco Estates, Ltd. agreed to sub-underwrite twenty thousand shares in another
company and 17,200 of those shares were allotted to it, on which there remained due and
owing the sum of £14,456 for unpaid calls. These shares were transferred to a third company.
All three companies were in liquidation, and the liquidator of the second company settled the
transfree company on the A list of contributories and the Essequibo Co. on the B list in
respect of the shares. The liquidator of the Essequibo Co. applied to have that company’s
name struck out of the B list, on the ground that the underwriting was ultra vires of the
company. The company’s memorandum had thirty clauses enabling the company to carry on
almost any kind of business, and the objects clause concluded with a declaration that every
sub-clause should be construed as a substantive clause and not limited or restricted by
reference to any other sub-clause or by the name of the company and that none of such subclauses or the objects specified therein should be deemed subsidiary or auxiliary merely to the
objects mentioned in the first sub-clause. It was held that the memorandum must be construed
according to its literal meaning, and that the underwriting was intra vires.
In Associated Artists, Ltd. v. Inland Revenue Comrs. [(1956) 2 All E.R. 583], the first
object in the memorandum of a company limited by guarantee was (a) to present classical,
artistic, cultural and educational dramatic works, etc., and, after a number of sub-clauses,
there was sub-cl. (1) “To do all such other things as are incidental or which [the taxpayer]
may think conducive to the attainment of any of the above objects.” It was held by UPJOHN,
J., that the association was not a body established exclusively for charitable purposes.
UPJOHN, J., held that the powers in sub-cl. (1) were independent of and not ancillary to the
other objects, and that that clause was of itself sufficient to render the objects of the
association not charitable, since the court in deciding whether any activity of the association
was ultra vires would have to decide whether the association thought that it was conducive to
the attainment of any of the objects of the association and what the association might think
conducive would not necessarily be so.
The result of these authorities, in my opinion, is to establish that a clause on the lines of
sub-cl. (c) in the present case is able to make the bona fide opinion of the directors sufficient
to decide whether an activity of the plaintiff company is intra vires. There was, in the present

case, no resolution of the board of directors expressing the opinion of the board; but I do not
think that such a resolution was necessary and I do not understand that it was contended that a
resolution was necessary. In fact Mr. Bell managed the operation of the plaintiff company and
exercised by delegation the functions of the board of directors, as he was entitled to do, by
virtue of the resolution of the board of directors of June 10, 1955. It was Mr. Bell’s opinion
which decided whether certain business activities should be carried out on behalf of the
plaintiff company. Mr. Bell’s opinion is evident from what he did and from his evidence.
Further, the facts support his opinion. For the reasons which I have mentioned earlier in this
judgment, this transaction was justified and was within the powers of the plaintiff company
under the terms of cl. 3 (c). The position is also assisted by the terms of sub-cl. (q) and subcl. (u). I feel no doubt that the transaction with the defendants was within the powers of the
company and was not ultra vires.
The result is that the question whether a defence of ultra vires could be raised by the
defendants does not arise and we have not thought it necessary to have it argued.
In my opinion the appeal should be allowed, and the preliminary point decided in the
plaintiff company’s favour.