## Facts

- Anglo-Overseas Agencies Ltd. (Anglo) was a company whose memorandum of association listed its business objects in clause 3.
- Paragraphs A and B of clause 3 stated objects framed around importing and exporting goods.
- Paragraphs C through S contained additional objects, including objects broad enough to cover property-related business and development activity.
- The final sentence of clause 3 stated that, unless otherwise expressed, the objects in any paragraph of clause 3 were not to be limited or restricted by reference to any other paragraph of clause 3 or by the company’s name.
- Anglo hired Green and others (Green) as agents/intermediaries to assist Anglo in obtaining a building lease for property Anglo wanted to develop.
- Anglo did not obtain the lease; a competitor obtained it instead.
- Anglo sued Green for breach of contract and for conspiring with the competitor in relation to the lost lease opportunity.
- Green denied liability on the facts and also raised an ultra vires defence, arguing that property development was outside Anglo’s capacity because it was not within Anglo’s main objects as shown by paragraphs A and B.
- Anglo replied that the concluding non-restriction sentence in clause 3 meant each listed object operated independently, so the “main objects rule” could not be used to cut down the later objects.

## Issues

1. Whether, on the proper construction of clause 3 of Anglo’s memorandum, the concluding non-restriction language prevented application of the “main objects rule,” so that Anglo had capacity to pursue the property-development/lease transaction.
2. If the transaction were outside Anglo’s capacity, whether Green (as a defendant sued by the company) could rely on ultra vires as a defence to Anglo’s claim.

## Decision

- The court (Salmon J, QBD) held that the transaction was intra vires Anglo.
- The concluding sentence of clause 3 was effective to show that each object in paragraphs A through S was not subordinate to, or limited by, the earlier objects or by the company’s name.
- As a result, the “main objects rule” did not operate to treat the later objects as merely ancillary to importing and exporting, and the property-development activity fell within Anglo’s stated objects.
- Because the business was within Anglo’s capacity, the ultra vires defence failed, and Anglo’s action was not defeated on that ground.
- On the separate question of who may plead ultra vires, the court proceeded on the assumption that, if the transaction had been ultra vires, the defendants would have been entitled in law to succeed on that defence; the point was not fully argued or developed in the judgment.

## Legal Principles

- Corporate capacity (for companies operating under an objects clause regime) turns on construction of the memorandum of association.
- Where a memorandum expressly states that each listed object is not to be limited or restricted by reference to other objects or the company’s name, courts may treat each object as an independent substantive object rather than as incidental to earlier “main” objects.
- A non-restriction (independent objects) provision can prevent the “main objects rule” from narrowing later objects by reference to earlier objects.
- Statements suggesting that an outsider defendant may defeat a company’s claim by pleading ultra vires may be obiter where the court finds the transaction intra vires and does not fully analyze the point.

## Conclusion

Anglo-Overseas Agencies v. Green held that an express non-restriction sentence at the end of an objects clause can keep later objects from being cut down by earlier “main” objects, so a property-development/lease venture fell within the company’s capacity and the defendants’ ultra vires defence did not bar the company’s breach of contract and conspiracy claims.


Anglo-Overseas Agencies v. Green, [1961] 1 QB 1, [1960] 3 All ER 244, [1960] 3 WLR 561, 176 EG 359 (1960)