Bishopsgate Investment Management Ltd v Maxwell (No 2) [1993] BCLC 814 is a UK company law case concerning a director's duty to act for proper purposes of the company. This case is an example of what would now be CA 2006 s 171.

Facts

Robert Maxwell

Robert Maxwell

Ian Robert Maxwell MC was a Czechoslovakian-born British media proprietor and former Member of Parliament , who rose from poverty to build an extensive publishing empire...

, who controlled Maxwell Group plc and bought the Daily Mirror in 1984, fell off his yacht in the Canary Islands

Canary Islands

The Canary Islands , also known as the Canaries , is a Spanish archipelago located just off the northwest coast of mainland Africa, 100 km west of the border between Morocco and the Western Sahara. The Canaries are a Spanish autonomous community and an outermost region of the European Union...

 on 5 November 1991. It transpired he had used the company pension funds to fund his own lifestyle. Ian Maxwell

Ian Maxwell

Ian Maxwell is a British businessman, and the son of the media mogul, Robert Maxwell.-Early life:Ian Maxwell was educated at Marlborough College and Oxford University. His first involvement in his father's business was at Pergamon Press from 1978 to 1983...

 was Robert’s son and a director of Bishopsgate Investment Management Ltd, which was meant to be safeguarding the company pension plans. He had signed share transfers from Bishopsgate to Maxwell Group plc for no consideration. The shares had been held on trust for a number of pension schemes. The liquidators of Bishopsgate sued Ian Maxwell to compensate for the value of the shares, on the basis that it was an improper use of the company's property.

Judgment

Hoffmann LJ held that Ian Maxwell was liable for the value of the shares, not even on the basis of any negligence, but merely by misapplying the assets.
Ralph Gibson LJ and Leggatt LJ concurred.

See also

• Re Maxwell Communications Corp plc (No 2) [1994] 1 BCLC 1, Vinelott J, agreement of contract to avoid pari passu
  Pari passu
  Pari passu is a Latin phrase that literally means "with an equal step" or "on equal footing." It is sometimes translated as "ranking equally", "hand-in-hand," "with equal force," or "moving together," and by extension, "fairly," "without partiality."...
  
  allowed, when a subordinating creditor merely agreed to fewer rights in insolvency than under the statutory scheme.
• Re an Inquiry into Mirror Group Newspapers plc [2000] Ch 194, Kevin Maxwell, and MGN of which Kevin was a director, was investigated by the Department of Trade and Industry. The delay was due to criminal proceedings, from which he was acquitted. He had been cross examined and questioned for 61 days. He objected that the inspectors tried to make him sign a form that he would not disclose information about their questioning and that it was unreasonable that he had no legal representation. Sir Richard Scott VC held that his objections were mostly justified.
• Re Pergamon Press Ltd [1971] Ch 388, Lord Denning MR held that there was no need for assurances that inquiries under the Companies Acts would be like a court
• Maxwell v Department of Trade and Industry [1974] QB 523, Wien J, Robert Maxwell claimed that inspectors did not act in accordance with natural justice
  Natural justice
  Natural justice is a term of art that denotes specific procedural rights in the English legal system and the systems of other nations based on it. Whilst the term natural justice is often retained as a general concept, it has largely been replaced and extended by the more general "duty to act fairly"...
  
  .
• Bishopsgate Investment Management Ltd v Maxwell [1993] Ch 1, no privilege against self incrimination when under investigation according to IA 1986 s 236. An investigation can still be ordered if a company is in voluntary liquidation, IA 1986 ss 122(1), 133.
• Macmillan Inc v Bishopsgate Investment Trust plc (No 3) [1996] WLR 387