UK: England and Wales: substantial property transactions and the meaning of 'non-cash asset'

The Court of Appeal gave judgment last month in Granada Group Ltd v The Law Debenture Pension Trust Corporation Plc [2016] EWCA Civ 1289 and affirmed the first instance decision ([2015] EWHC 1499 (Ch)). A summary of the court's decision has been published by the ICLR: see [2016] WLR(D) 686.

The case concerned the operation of the rules requiring shareholder approval for certain transactions between companies and their directors (or those connected with the directors) involving non-cash assets . The meaning of "non-cash asset" was central and, in this regard, the court held (to quote the opening sentences from the ICLR summary):

As established by the authorities, section 739(2) of the Companies Act 1985 [now section 1163 of the Companies Act 2006, which defines "non-cash asset"] extended to rights that were not proprietary rights, provided that they could still be properly described as rights in or over property. An “interest in property” for the purposes of section 739(1) meant a proprietary interest ... An “interest” in property under section 739 was one that could be defined by reference to proprietary concepts, or at least by concepts that were legally recognisable and enforceable".