Stephen Anthony Aldridge v Mordaunt Estates Ltd (Mauritius)

A director relying on subsequent unanimous shareholder authorisation under section 159(9) of the Companies Act 2001 must plead and establish that defence to repayment of a prohibited company loan. The company need not plead the absence of authorisation. An unpleaded resolution may be excluded where reliance would deny the company a fair opportunity to contest it, including compliance with the statutory solvency requirement.

The Privy Council ordinarily respects concurrent findings of fact and local decisions on pleading. Apparent bias depends on whether a fair-minded and informed observer would conclude that there was a real possibility of bias. Previous judicial comments must be assessed in context, including the duty to decide each case on its evidence. Damages for deprivation of loaned funds may be assessed by a broad-brush estimate within the trial judge’s discretion.

Mordaunt Estates Ltd, a company subsequently in liquidation, sought repayment of £615,000 transferred to the personal account of its director, Stephen Anthony Aldridge. It alleged that the payments constituted a prohibited director’s loan under section 159(5) of the Companies Act 2001, which it could avoid under section 159(7). The trial judge found that the payments were loans and rejected an allegation that a supporting document was forged.

Mr Aldridge relied on a subsequent unanimous shareholder resolution which treated the money as consideration for the sale of 10% of his shares to an employee benefit trust and purported to release his repayment obligation. He contended that this retrospectively authorised the payments under section 159(9). The resolution had not been pleaded, and the trial judge prevented him from relying on it or cross-examining witnesses about it.

The Supreme Court of Mauritius ordered repayment and awarded 2 million rupees in damages with interest on 17 March 2016, SCR105352 – 1/247/11. The Court of Civil Appeal dismissed his appeal on 6 July 2018, SCR 1359 – 6B/12/16. Before the Board, he also challenged the fairness of the trial, alleged apparent bias in the appellate court and disputed the damages assessment. The company raised a preliminary objection to his permission to continue the appeal against an insolvent company.

The appeal was dismissed. The repayment order and the award of 2 million rupees in damages with interest were upheld.

1. The company’s preliminary objection failed. Permission to continue proceedings against the insolvent company had been granted by an unappealed local order. Any alleged error in its statutory basis or the decision to proceed without hearing the liquidator should have been challenged by appeal to the local appellate court. The Board could not go behind that order (para 9).
2. The trial judge was entitled to find that the transfers constituted a loan. Describing them as drawings was consistent with that conclusion. The appellate court had upheld both the loan finding and the rejection of the forgery allegation. Applying the practice concerning concurrent findings of fact originating in Devi v Roy, [1946] AC 508, and confirmed in Dass v Marchand, [2021] UKPC 2, the Board found no justification for reopening those findings. Subject to the asserted shareholder authorisation, the loan contravened section 159(5) of the Companies Act 2001 (paras 12–14).
3. Subsequent shareholder authorisation under section 159(9) was a defence for the director to plead and establish. Its absence was not an element which the company had to plead. The resolution could also be characterised as a waiver of money already owing. A general denial did not put that defence in issue (para 16).
4. Excluding reliance on the unpleaded resolution was fair. Proper pleading and tendering in evidence would have allowed the company to contest it, including compliance with the statutory solvency condition. The resolution had satisfied neither procedural requirement. The trial judge was entitled to prevent reliance on it and cross-examination based on it. Her position was consistent and had not misled the director. The Board also expressed reluctance to disturb local decisions on pleading, since Mauritian procedure was pre-eminently a matter for the Mauritian courts. The substantive effectiveness of the resolution remained undetermined (paras 17–21).
5. The apparent-bias challenge failed under the fair-minded and informed observer test in Porter v Magill, [2001] UKHL 67. The appellate court had merely noted previous attacks on judicial integrity and unsuccessful applications, without indicating reliance on them. Earlier disparaging remarks arose in different proceedings involving different facts and evidence. Judges could reasonably be expected to distinguish cases and decide each on its own evidence. No bias was alleged against the trial judge, whose findings were decisive (paras 22–26).
6. The trial judge could estimate, by a broad-brush approach, the loss caused by deprivation of the loaned funds. The award fell well within her discretion on quantum and disclosed no error of law (para 27).

• Privy Council: Dismissed the appeal and upheld the repayment and damages orders, [2026] UKPC 34 .
• Supreme Court of Mauritius, Court of Civil Appeal: On 6 July 2018, dismissed the director’s appeal and upheld the first-instance decision, SCR 1359 – 6B/12/16.
• Supreme Court of Mauritius: On 17 March 2016, ordered repayment of £615,000 and awarded 2 million rupees in damages with interest. It excluded reliance on the unpleaded shareholder resolution, SCR105352 – 1/247/11.