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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Westcoast (Holdings) Ltd v Wharf Land Subsidiary (No 1) Ltd & Anor  EWCA Civ 1003 (26 July 2012)
Cite as:  EWCA Civ 1003
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
His Honour Judge Seymour QC (sitting as a Judge of the High Court)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE RIMER
LORD JUSTICE PITCHFORD
| WESTCOAST (HOLDINGS) LIMITED
(formerly known as KELIDO LIMITED)
|- and -
|WHARF LAND SUBSIDIARY (NO 1) LIMITED
WHARF LAND INVESTMENTS LIMITED
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Ms Michelle Stevens-Hoare and Mr Simon Allison (instructed by Pitmans LLP) for the Respondent, Westcoast (Holdings) Limited
Hearing date: 22 May 2012
Crown Copyright ©
Lord Justice Rimer :
The Shareholders Agreement
'the agreement in the Agreed Form between [Westcoast] and the Company under which [Westcoast] agrees to advance £999,900 to the Company, such amount to be repaid by the Company by the fifth anniversary of the date of this agreement'.
'Save as expressly set out in this agreement, or as permitted by law for the protection of an unfairly prejudiced or minority Shareholder, the Shareholders undertake to each other not to take any steps or action (including the commencement of legal proceedings) for the winding-up, dissolution or administration of the Company.'
'6.1 Each of the Shareholders shall also procure, and the Company shall undertake and agree to discharge, without limitation, the following:
6.1.3 to commence or defend litigation or other dispute resolution proceedings relating to the Company; …'
'10.1 Each Shareholder undertakes with the other Shareholders to exercise all voting rights available to it in relation to the Company so as to give full effect to the terms and conditions of the Development Agreement and so as to act in the best interests of the Company'.
Clause 32, headed 'Further assurance and good faith,' provided so far as material:
'32.2 The Shareholders shall at all times act in good faith towards each other in fulfilment of their obligations hereunder and in relation to the Company and this agreement'.
This agreement shall continue in full force and effect until the first to occur of the following events:
19.1 The fifth anniversary of this agreement;
19.2 The express written agreement of the Shareholders that this agreement should cease and determine; or
19.3 The completion of the dissolution and winding-up of the Company; or
19.4 The acquisition by one Shareholder of all the Shares registered in the name of the other Shareholders or beneficially owned by the other Shareholders,
provided that the terms of this agreement shall nevertheless continue to bind the Shareholders thereafter to such extent and for so long as may be necessary to give effect to the rights and obligations embodied herein' (Emphasis supplied)
It is the proviso that has given rise to the dispute. If it has any clear identifiable meaning, it is not one that leaps from the page.
The shareholder loan agreement
'2. Amount and Purpose
2.1 The amount of the Loan shall be £999,900 and it shall not bear any interest.
2.2 The Loan shall only be used for the purpose of investing in the Borrower.
The Loan shall be repaid in full by the Borrower to the Lender on the fifth anniversary of the date of this Agreement or the earlier termination of the Shareholders' Agreement.
4.1 This Agreement constitutes the entire agreement between the parties.
4.2 Demand for payment or any other demand or notice under this Agreement shall be made in writing ….'
'13. … I accept the submissions of Miss Stevens-Hoare [for Westcoast] on the point. It is plain that what clause 19 is concerned with is the period for which the shareholders agreement will continue in force. The first part of clause 19 is concerned with prescribing those events upon which the shareholders agreement comes to an end. It cannot sensibly be suggested, in my judgment, that the effect of the proviso is to contradict all that which goes before in clause 19. It cannot sensibly be suggested that clause 19, properly construed, as it were, does not make any provision for determination at all. Plainly the first part does make provision for determination and the proviso is simply a proviso; it is simply a form of words which is intended to achieve something in circumstances in which the shareholders agreement has actually come to an end. Therefore the question is, what is it that the words in the proviso should be construed as preserving, notwithstanding that the shareholders agreement has otherwise come to an end? Commonsense, as it seems to me, indicates that it can only be those provisions of the shareholders agreement, if any, which would prejudice, if the shareholders agreement came to an end, rights and obligations which had already accrued.
14. In the circumstances of the present case there were no rights or obligations which were relevant to the issue of construction, as it seems to me, prior to the occurrence of the event upon which the sum the subject of the loan agreement, £990,900 [sic: should be £999,900], became due and payable to the claimant. In the circumstances of this case that happened at precisely the same moment that the shareholders agreement came also to an end, so there was no pre-existing right or obligation to which the proviso to clause 19 could relevantly apply to prevent the claimant from being entitled to claim the sum of [£999,900] or to prevent the claimant, once having obtained judgment for that sum, seeking to enforce that judgment in whatever way would otherwise be appropriate.
15. In those circumstances I am entirely satisfied, the issues between the parties being simply questions of construction, that it is appropriate to reach conclusions under Part 24 of the Civil Procedure Rules and the conclusions which I reach are that there should be judgment for the claimant in the sum of [£999,900] and a declaration in the terms sought by the claimant.'
The application for permission to appeal
Discussion and conclusion
Lord Justice Pitchford :
Lord Justice Mummery :