Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7 HL 653 is a UK company

law case, which concerned the objects clause of a company.

Its importance has been diminished as a result of the Companies Act 2006 s 31, which allows for
unlimited objects for which a company may be run. Furthermore, any limits a company does have in
its objects clause has no effect whatsoever for people outside a company (s 39 CA 2006), except as
a general issue of authority of the company's agents.

Facts[edit]
Incorporated under the Companies Act 1862, the Ashbury Railway Carriage and Iron Company Ltds
memorandum, clause 3, said its objects were "to make and sell, or lend on hire, railway-carriages"
and clause 4 said activities beyond needed a special resolution. But the company agreed to give
Riche and his brother a loan to build a railway in Belgium. Later, the company refused the
agreement. Riche sued, and the company pleaded the action was ultra vires.

Judgment[edit]
Exchequer Court[edit]
The judges of the exchequer chamber being equally divided, the decision of the court below was
affirmed.
Blackburn J said,

thought it was at common law an incident to a corporation that its capa

into contracts beyond the provisions of the deed, there could be only o
answer should be the other way.

House of Lords[edit]
The House of Lords, agreeing with the three dissentient judges in the Exchequer Chamber,
pronounced the effect of the Companies Act to be the opposite of that indicated by Mr Justice
Blackburn. It held that if a company pursues objects beyond the scope of the memorandum of
association, the company's actions are ultra vires and void. Lord Cairns LCsaid,

It was the intention of the legislature, not implied, but actually expresse