Company

Company's auditors making statement upon resignation - company's application to court discontinued - notice of discontinuance equivalent to order of court so company obliged to send statement to persons interestedJarvis Plc and others v PricewaterhouseCoopers (a firm): ChD (Lightman J): 13 July 2000The defendants resigned as the claimants' auditors and served a statement of the circumstances connected with their ceasing to hold office which they considered should be brought to the attention of persons interested according to s.394 of the Companies Act 1985 as amended by ss.118 and 123(1) of the Companies Act 1989.

The claimants applied for a declaration that the auditor's statement had been made to secure needless publicity for defamatory matter but three months later served a notice of discontinuance.

The defendants then applied for a declaration that the notice of discontinuance triggered the consequential provisions of s.394(7) by which the claimants were obliged to send copies of the auditors' statement to persons interested.AG Bompas QC and Paul Greenwood (instructed by Eversheds) for the claimant.

David Richards QC and Philip Gillyon (instructed by Herbert Smith) for the defendant.Held, granting the declaration, that it was not necessary to have a positive decision of the court stipulating that it was not satisfied that the material was being used to secure needless publicity for defamatory matter; that, as provided in CPR r.

38.5, the proceedings were brought to an end and the relevant decision of the court was made on the date the notice of discontinuance was served and no further decision was called for; and that, accordingly, the claimants were obliged to serve the auditor's statement on persons interested and would be ordered to pay the defendants' costs on an indemnity basis.