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Cite as: [1998] UKPC 11

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Village Cay Marina Limited v. John Acland and Others (British Virgin Islands) [1998] UKPC 11 (4th March, 1998)

Privy Council Appeal No. 48 of 1997

 

Village Cay Marina Limited Appellant

v.

(1) John Acland (2) Landac Development Limited

(3) Rhyto Investments Limited (4) John Greenwood Respondents

Barclays Bank PLCThird Party

 

FROM

 

THE COURT OF APPEAL OF THE BRITISH

VIRGIN ISLANDS

 

---------------

JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL,

Delivered the 4th March 1998

------------------

 

Present at the hearing:-

Lord Lloyd of Berwick

Lord Nolan

Lord Hoffmann

Lord Hope of Craighead

Sir Andrew Leggatt

[Delivered by Lord Hoffmann]

 

-------------------------

 

1.Appeal and Cross-appeal.

This is an appeal and cross-appeal from a judgment of the British Virgin Islands Court of Appeal. The appeal concerns the validity of certain underleases of residential units in a development at Wickhams Cay, Road Town, in the Island of Tortola. They were granted on 23rd September 1991 by the plaintiff, Village Cay Marina Limited ("VCM") acting by its receiver, the fourth respondent Mr. Greenwood, at the direction of the second respondent Landac Development Limited ("Landac"), to the third respondent, Rhyto Investments Limited ("Rhyto"). The cross-appeal concerns the validity of the refusal of the first defendant, Mr. Acland, as sole director of Landac, to register a transfer of 49 shares in that company to VCM. The appeal and cross-appeal both arise out of transactions by which the development was undertaken, but the issues which they raise are quite different.

 

2.The Facts.

The issues, both before the trial judge (Georges J.) and the Court of Appeal, originally ranged very widely, but the concurrent findings of fact of both tribunals enable their Lordships to state the history of the matter in a form which is now largely uncontroversial. On 28th November 1988 a Mr. Clifford Plaisance, who had just acquired the issued share capital of VCM, entered into an agreement with Mr. Acland for a joint venture in the residential development of a part of the land which the company held under a registered Crown lease. Pursuant to this agreement, Landac was incorporated, 51 shares were issued to Mr. Acland and 49 to Mr. Plaisance and Mr. Acland was appointed sole director. Mr. Acland lent Landac $150,000 which, pursuant to an oral agreement made on 29th May 1989, Landac paid to VCM in return for an option to require the grant of subleases of the proposed residential units to such persons as it should nominate for a nominal consideration. This oral agreement was confirmed in writing in an agreement made between VCM and Landac on 29th June 1990 which was duly registered against VCM's title to the land.

 

At the time of the joint venture agreement of 28th November 1988 Barclays Bank plc ("the Bank") held an all-monies debenture issued by VCM which created a floating charge over its assets and undertaking and a fixed charge over all its fixed assets, including the site of the proposed development ("the site"). The joint venture agreement was originally conditional upon the Bank agreeing to release the site from the debenture so that it could be separately charged to secure borrowings for the construction costs of the development. But the Bank would not agree to this proposal. Instead, after the agreement to grant an option to Landac, VCM granted the Bank a specific legal charge over the site which was registered as a first charge in the Land Registry. The charge was expressed to secure all monies owing by VCM but referred in particular to a facility for construction costs which was, at VCM's request, to be made available to Landac.

 

1. Mr. Plaisance died in January 1990. His executors renounced probate and letters of administration were granted

to his widow Debra Plaisance and his son Kim Plaisance. It appears that under the terms of his will the beneficial interest in his 49 shares in Landac passed to his widow.

 

2. On 19th December 1989 a writ of fi.fa. was issued pursuant to a default judgment for $2,027 obtained against VCM by a creditor in the previous month and on 29th May 1990 it was executed against the company's property. The debt was discharged by a cheque issued by Mr. Kim Plaisance on behalf of the company. The significance of this event is that clause 8(b) of the debenture of 9th November 1988 provided that the monies thereby secured were to become immediately payable if "a distress or execution shall be levied or issued against any of the property of the Company". By clause 9 the Bank was entitled to appoint a receiver at any time after the money thereby secured had become payable. There is however no evidence that the Bank knew of the execution at the time. On 24th September 1990 it wrote to VCM saying that it was exceeding its overdraft limit and formally demanding repayment of $32,647 within 24 hours. Their Lordships do not know what happened in consequence of this letter or anything else about the state of VCM's account before 23rd August 1991, when the Bank appointed Mr. Greenwood receiver under clause 9 of the debenture. Their Lordships must assume that for some reason the Bank omitted the usual formality of demanding repayment of the overdraft facility before appointment of the receiver, because the only ground relied upon by Mr. Greenwood (in his re-amended Defence) for saying that the monies secured by the debenture had become payable was the execution which had been issued over a year earlier.

 

3. On 23rd September 1991 VCM granted the disputed underleases to Rhyto, which had been nominated for this purpose by Landac in the exercise of its rights under the option agreement of 29th June 1990. The leases were executed under the common seal of VCM by direction of the receiver. They were duly registered and charged by Rhyto to the Bank to secure all monies due from Rhyto, including in particular a facility of $1,040,000. It is the validity of these underleases which is in issue in the appeal.

 

4. Mr. Anthony Esposito, who was at the time when the receiver was appointed in negotiation to obtain the finance to acquire control of VCM, telephoned the Bank that same evening from New York to protest. The judge found that he did not challenge the validity of the appointment but said that it was a matter of "regret and inconvenience" in view of the state of his current negotiations. The board of VCM did not challenge the appointment of the receiver by legal proceedings and on the day after the appointment the company's solicitors wrote to the receiver, reminding him that he had a duty to the company to obtain full market value for its assets and saying that it would shortly be acquired by a company controlled by Mr. Esposito under arrangements by which its indebtedness to the Bank would be discharged not later than 31st August 1991. There seems to have been some delay because on 31st October 1991 the solicitors wrote again, suggesting that Mr. Greenwood file the annual return "signed by yourself as receiver on behalf of the company" and on 12th November 1991 they asked for information on the "current state of affairs regarding the receivership". On 18th November 1991 the solicitors notified the Companies Registry that "by directive of the Receiver" the registered office had been changed. On 24th January 1992, when VCM's overdraft stood at $160,000, an agreement was reached under which the receiver was discharged on the basis that VCM would continue to enjoy an overdraft facility of up to $200,000 until the acquisition and refinancing to which Mr. Esposito had referred the previous August had been completed. This in fact happened on 27th August 1992, when VCM, Mr. Greenwood and the Bank signed mutual releases in comprehensive form.

 

5. At the same time as Mr. Esposito's company, called Village Cay Holdings Limited, finally acquired the shares in VCM from the Plaisance estate, he also agreed to acquire the 49 shares which the estate held in Landac. He wanted these transferred to VCM and so on the same date of completion, 27th August 1992, Kim Plaisance and Debra Plaisance, as administrators of the estate of Clifford Plaisance, executed a transfer of the shares in favour of VCM. On 7th September 1992 VCM's solicitors presented it to Mr. Acland for registration and on 24th September 1992 he wrote back declining to do so. It is this refusal which gives rise to the cross-appeal.

 

3.The judgments of Georges J. and the Court of Appeal.

Their Lordships will summarise the conclusions of Georges J. and the Court of Appeal under two heads, dealing first with the validity of the underleases, which forms the subject matter of the appeal, and secondly with the refusal to register the transfer of shares in Landac. They will omit reference to those parts of the judgments dealing with issues no longer in dispute, which have already been summarised in the statement of the facts.

 

(a)The Underleases.

(1) The learned judge held that the appointment of the receiver was valid because the Bank was entitled to rely upon the execution of May 1990 as making the monies secured by the charge payable. He also decided that whether the Bank was entitled to appoint a receiver or not, VCM had acquiesced in the appointment and was estopped from disputing its validity. The Court of Appeal did not decide whether or not the appointment had been valid because it agreed with the judge on estoppel.

 

(2) VCM argued before the judge that a receiver appointed under the debenture could not grant underleases of the site because the Bank had agreed to exclude the site from the debenture and rely upon the specific legal charge granted by VCM on 10th July 1989. The learned judge found as a fact that the Bank had refused to exclude the site from the debenture and that the specific legal charge was by way of additional security. The Court of Appeal agreed that no agreement by the Bank to exclude the site from the debenture had been proved.

 

(3) VCM argued that the receiver had acted in breach of duty by granting the subleases for a nominal consideration instead of market value. The learned judge held that VCM was bound by the option agreement to grant the underleases for a nominal consideration and that VCM could not complain that the receiver had procured the company to perform its obligations. This point does not appear to have surfaced again in the Court of Appeal.

 

(b)The refusal to register.

The learned judge heard evidence from Mr. Acland as to why he had refused to register the transfer. He said that he was concerned that VCM was overindebted to banks and that it was owned by a holding company, which could result in its beneficial ownership changing without Landac's knowledge. In a short cross-examination on the point, he repeated these reasons. It was not put to him that his opinion was not held in good faith or that his true reasons were different. The learned judge, who had accepted his evidence on everything else, held that he was entitled within the Articles of Association to refuse registration. The Court of Appeal reversed this decision, holding that the reasons given by Mr. Acland were "incredible and implausible" and that the true reason was his personal interest in excluding VCM from holding shares in Landac rather than the interests of the company.

 

4.The Appeal.

(a)The Registered Land Ordinance.

The first point taken by Dr. Ramsahoye Q.C. on behalf of VCM in its appeal was entirely new. It had not been mentioned before the learned judge or in the Court of Appeal. He said that under section 72 of the Registered Land Ordinance, the power to appoint a receiver was confined to a case in which there had been default for more than a month and the chargee had served notice in writing requiring payment or the performance of some other obligation under the charge which had not been complied with for three months. No such notice had been served and therefore no receiver could properly have been appointed. Furthermore, the powers of granting leases and selling the property in sections 74 and 75 are conferred not upon the receiver but upon the proprietor of the charge. Section 77 said that the provisions of section 72, 74 and 75 could be varied in the charge but such variation should not be "acted upon" unless the court so ordered. Dr. Ramsahoye said that in relation to the site, the debenture created a charge within the meaning of section 2 of the Ordinance, which defined a charge as "an interest in land securing the payment of money". Section 3 made it clear that the Ordinance was exhaustive in its application to dealings in registered land: "no other written law and no practice or procedure relating to land shall apply to land registered under this Ordinance". The proviso to section 77 requiring the consent of the court to the enlargement of the statutory powers was, he said, unique to the Eastern Caribbean and inserted for the protection of debtors.

 

6. Their Lordships think that this argument is based upon a misunderstanding of the effect of the debenture. It is true the debenture created a fixed charge over the site. But this charge was unregistered and operated entirely in equity, outside the system of registered land. It could have been protected by a caution under section 127 and, in the absence of such a caution, would be liable to be overridden by a registered disposition to a new proprietor. But that does not affect its validity as an equitable charge as between VCM and the Bank. In any event, the leases were not executed by virtue of any power conferred upon the Bank by the fixed charge. It was VCM, not the Bank or the receiver, which granted the leases. The function of the receiver was to be, as clause 10 says, "agent for the company" in carrying on the company's business. The receiver replaces the board as the person having authority to exercise the company's powers and it was by virtue of that position that he authorised the company's seal to be affixed to the underleases. So while it is true that the Bank had an equitable fixed charge over the site, the only function of that charge which is relevant to the present proceedings is that it defined the property in respect of which the receiver could act as agent of the company. There is therefore no question of requiring a variation of or addition to the powers conferred upon a registered chargee by the Registered Land Ordinance. The powers exercised by the receiver in this case were of an altogether different kind.

 

(b)Validity of the appointment.

Their Lordships therefore turn to the validity of the appointment of the receiver unencumbered by the provisions of the Registered Land Ordnance. Like the Court of Appeal, they find it unnecessary to decide whether the judge was right in saying that the Bank could rely upon the execution as a justification for the appointment because they agree with the judge and the Court of Appeal that VCM is estopped from disputing it. The correspondence to which their Lordships have referred makes it clear that VCM acquiesced in the exercise by the receiver of his powers to carry on the company's business and that he thereby acquired ostensible authority to do so: see Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd. [1964] 2 Q.B. 480. Indeed it may be said that since the principles as to ostensible authority are not in dispute and the only question is whether the facts came within it, any challenge to the findings of the lower courts is excluded by the practice of their Lordships not to disturb concurrent findings of fact. The ostensible authority of the receiver is sufficient to validate the grant of the subleases to Rhyto. So far as the action against the receiver himself is concerned, there is the additional protection of the release executed by VCM. Mr. Braham, junior counsel for VCM, submitted that the release did not apply to the grant of the subleases because VCM did not know about them when it executed the releases. He referred to authorities which hold that the equitable doctrine of waiver or acquiescence requires knowledge of the right which is being waived or the wrong which is being acquiesced in. But this case does not concern the equitable doctrine. The receiver (and the Bank) are protected by contractual releases made for consideration and expressed in the widest possible terms. Their Lordships consider that their effect is entirely a matter of construction and that they apply to all claims, whether the agents of the company knew of them or not.

 

7. Their Lordships cannot however part from this point without noting how barren and technical it is. On the unchallenged findings of the lower courts, VCM was under a contractual obligation to grant the underleases to Landac's nominee for a nominal consideration. Even if VCM had succeeded in showing that such underleases had not been properly granted in 1991, they would still be under a specifically enforceable obligation to do so. Nothing would therefore be achieved by setting aside the original grants.

 

(c)Exclusion of the site from the debenture.

Dr. Ramsahoye attempted to revive the argument that the site had been excluded from the debenture. But this is certainly a question of fact upon which there are concurrent findings by the lower courts and therefore no longer open to him.

 

(3)Breach of duty of care to VCM.

It was submitted that in granting the leases for a nominal consideration, the receiver was in breach of his duty to VCM to obtain a proper price. Their Lordships agree with the answer given to this submission by Georges J., namely that VCM had agreed to grant the leases at a nominal consideration and cannot allege that the receiver was in breach of duty by causing the company to perform its obligations.

 

8. For these reasons, their Lordships will humbly advise Her Majesty that the appeal should be dismissed.

 

5.The Cross-Appeal.

The Articles of Association of Landac dealing with the transfer, transmission and registration of shares are in the form commonly used for a private company. Article 3 (so far as material) reads as follows:-

"The Company is a private company and accordingly:-

 

(a)except as may be hereinafter provided the directors may, without assigning any reason, decline to register any transfer of shares ..."

 

9. Article 16 deals with procedure. It provides that shares may be transferred "with prior or subsequent approval by the directors" in such manner or form as the directors shall accept. It goes on to provide that if approval is not given "within a reasonable time", a party to the transfer may serve a formal request on the directors and if no decision has then been communicated within 30 days, the transfer is deemed to have been approved.

 

10. By way of exception to the discretion conferred upon the directors by Article 3(a), Article 17 gives the spouse of a deceased member an absolute right to be registered, subject to a discretion on the part of the directors to declare that the shares shall no longer carry voting rights.

 

11. Articles 21 to 23 deal with the transmission of the beneficial interest in shares by operation of law. They read as follows:-

"21. The executors or administrators of a deceased member shall be the only persons recognised by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of the Company until they have proceeded as set forth in the next following two regulations.

 

22. Any person becoming entitled by operation of law or otherwise to a share or shares in consequence of the death or bankruptcy of any member may be registered as a member upon such evidence being produced as may reasonably be required by the directors. An application by any such person to be registered as a member shall for all purposes be deemed to be a transfer of shares of the deceased or bankrupt member and the directors shall treat it as such.

 

23. Any person who has become entitled to a share or shares in consequence of the death or bankruptcy of any member may, instead of being registered himself, request in writing that some person to be named by him be registered as a transferee of such share or shares and such request shall likewise be treated as if it were a transfer."

The effect of these provisions was that under Article 21 the administrators of Clifford Plaisance were entitled to be treated by the company as entitled to his shares and could either seek registration themselves under Article 22 or nominate a transferee under Article 23. In either case, the application was to be treated as a transfer and therefore subject to the discretion conferred upon the directors by Article 3(a) and the procedure for making a decision laid down by Article 16.

 

12. The nature of the discretion conferred upon directors to refuse registration has been discussed in a number of cases. It must however be borne in mind that not all articles are in precisely the same terms. Some are more restrictive of the matters which the directors may take into account than others. Article 3(a) is framed without any express limitation upon the discretion. In In re. Smith and Fawcett Ltd. [1942] Ch. 304, 308, Lord Greene M.R. said of a similar article:-

"In the present case the article is drafted in the widest possible terms, and I decline to write into that clear language any limitation, other than a limitation which is implicit by law, that a fiduciary power of this kind must be exercised bona fide in the interests of the company."

 

13. The directors are prima facie assumed to have been acting in good faith and the onus of proving the contrary is upon the person who challenges their decision: see Charles Forte Investments Ltd. v. Amanda [1964] Ch. 240, per Willmer L.J. at pp. 252-254 and per Danckwerts L.J. at pp. 260-261.

 

14. In the present case, the application for registration was made by a letter dated 7th September 1992 by solicitors acting for both the administrators and VCM to Mr. Acland. It enclosed an instrument of transfer from the administrators to VCM and said that:-

"Pursuant to Articles 21 to 23 (in particular article 23) we hereby request ... that the said 49 shares be registered in the name of [VCM]".

 

15. On 24th September 1992 Mr. Acland replied as follows:-

"I appreciate the interest of your clients, Village Cay Marina Limited, in this company, but at this stage of its development I do not regard it as beneficial to the company to involve third parties in its ownership.

 

16. Please therefore take this letter as formal notice to the intending transferors, for whom you also act, pursuant to Regulation 16 of the Articles of Association of the company that I decline, as director, to register the transfer to Village Cay Marina Ltd, a copy of which was enclosed with your letter."

 

17. Mr. Braham made two points on this letter. First, he said that the reference to Article 16 showed that Mr. Acland had misdirected himself as to the nature of his discretion. He was treating the application as an ordinary transfer, whereas the administrators under Article 23 were in a more privileged position. They had a prima facie right to nominate a transferee. Their Lordships reject this submission. Articles 22 and 23 expressly say that applications for registration by personal representatives or trustees in bankruptcy, either of themselves under Article 22 or of a nominated person under Article 23, shall be treated as if they were transfers. They were accordingly subject to the discretion in Article 3(a) and the procedure laid down in Article 16 in the same way as any other transfer and Mr. Acland was saying that he was dealing with the application in accordance with that procedure.

 

18. Secondly, Mr. Braham said that the reason for refusal given in the letter was a bad one. An objection to the involvement of anyone who was a "third party" could not possibly be justified as bona fide in the interests of the company. Having given a bad reason, Mr. Acland was not entitled to enlarge upon his reasons, as he did in his evidence before the judge. He had exercised his discretion for an improper purpose and was not entitled to exercise it again.

 

19. Their Lordships doubt whether, in the context of the correspondence, it is fair to read Mr. Acland's letter as an objection to the registration of any other person whatever. He was not entitled to object to the registration of Mrs. Debra Plaisance (Article 17) and there is nothing to suggest that he would have done so. It must also be borne in mind that he said only that he did not think it would be beneficial to Landac to involve a third party "at this stage of its development" and that in Charles Forte Investments Ltd. v. Amanda [1964] Ch. 240, 255, Willmer L.J. said:-

"... there may have been any number of excellent reasons why the directors of this private company should above all things wish to avoid shares in the company coming into the hands of strangers ... the mere fact that they were strangers ... might well, in the view of the board, be a sufficient reason for refusing to register a transfer."

 

20. However, the ground upon which their Lordships reject Mr. Braham's submission is that in their opinion the judge was entitled to take into account not only the terms of the letter but also the evidence as to his reasons which Mr. Acland gave at the trial. In arguing the contrary, Mr. Braham relied upon a statement by Lord Cozens-Hardy M.R. in In re. Bede Steam Shipping Company Ltd. [1917] 1 Ch. 123. The article in that case gave a discretion to refuse to register "on certifying that in their opinion it is contrary to the interests of the company that the proposed transferee should be a member thereof". The directors refused to register a transfer of a single share on the ground that in principle small parcels of shares should not be transferred. They gave a certificate which said "... this certificate does not in the slightest degree reflect upon the personal character or financial standing of the above mentioned transferee". At the trial, Eve J. decided that upon the true construction of the article, the Board could object only on grounds which concerned the proposed transferee rather than the size of the holding. This decision was, by a majority, upheld in the Court of Appeal. One of the directors also gave evidence at the trial that there were additional reasons, including a concern that the proposed transferee "might take some step prejudicial to the company". The learned judge considered this reason and rejected it on the facts, holding that there was no basis upon which the directors could have formed such a view. The majority of the Court of Appeal agreed, but Lord Cozens-Hardy M.R. added at page 135:-

"... the directors ought not to be allowed to state their reason in the certificate itself to the transferee and then to say that was not the only reason, but they had other and different reasons."

 

 

21. No other member of the court expressed a similar opinion. Their Lordships consider that Lord Cozens-Hardy's opinion must have been based upon the construction of the particular article, with its provision for certification. In general however, they do not think that there is any rule of law by which the directors are confined to the reasons they have given. Of course as an evidential matter they may have difficulty in persuading a court that their refusal was based upon reasons which they did not mention, but the question for the judge in the end is whether at the time they believed in good faith that the refusal of registration was in the interests of the company. The reasons, if any, which they then gave are only part of the evidential material upon which that question must be answered.

 

22. Their Lordships therefore consider the reasons given by the Court of Appeal for reversing the trial judge. The learned Chief Justice gave a number of reasons for his conclusion that Mr. Acland's stated reasons were "incredible and implausible". Their Lordships would observe at the outset that none of these were put to Mr. Acland in cross-examination. The question was whether Mr. Acland honestly believed the reasons which he gave to justify a refusal as not being in the interests of the company. It is a general rule of procedural fairness that if a court is to be invited to disbelieve a witness, the grounds upon which his evidence is to be disbelieved should be put to him in cross-examination so that he may have an opportunity to offer an explanation. More particularly, in relation to attacks upon the bona fides of the decision of directors to refuse registration, Lord Greene M.R. in In re Smith and Fawcett Ltd. [1942] Ch. 304, 308, said:-

"If it is desired to charge a deponent with having given an account of his motives and his reasons which is not the true account, then the person on whom the burden of proof lies should take the ordinary and obvious course of requiring the deponent to submit himself to cross-examination."

 

23. Landac was a vehicle for a joint venture in the nature of partnership and it is not obviously unreasonable that Mr. Acland should have concerns about the financial standing of a prospective new partner or the possibility that he might lose any practical form of control over further transfers of the beneficial ownership in the shares.

 

24. If one examines the reasons given by the learned Chief Justice for disbelieving Mr. Acland, there would appear to have been several which, given the opportunity, he may have been able to explain. For example, it was said that VCM might from the start have been beneficial owners of Mr. Plaisance's shares under a constructive trust because they had been allotted to him in consideration of the utilisation of VCM's land. If this had been put to Mr. Acland, he might have said that beneficial ownership had nothing to do with the matter. Shareholders can hold their shares in trust for anyone they like; that is a matter between them and the beneficiaries. Company law is not concerned with trusts of shares - a proposition which he could have reinforced by reference to Article 11:-

"No notice of any trust express, implied or constructive shall be entered in the Register of Members and the directors shall not be bound to recognise any trust ..."

 

25. The discretion under the articles is as to registration as a member of the company, carrying the rights to vote and participate in its meetings.

 

26. Mr. Acland might have added that VCM had received full value for the site in the form of a payment of $150,000 for the option and that there was no reason why Mr. Plaisance's shares should be held on constructive trust any more than his own. Or, more plausibly, he might have said that he had never heard of such a thing as a constructive trust and that it played no part in his decision.

 

27. The Court of Appeal went on to reject the objection to VCM as "highly leveraged" on the ground that this had been the case when Landac was incorporated and that Mr. Acland was "content to incorporate Landac solely or principally for the purpose of developing [VCM's] property" and that Landac was "content to lend money to [VCM]". Their Lordships think that Mr. Acland, if these points had been put to him, might well have replied that Landac developed the property only after obtaining a registrable option to acquire subleases at a nominal consideration - something which in effect gave it the beneficial interest in the site and made the solvency of VCM irrelevant. Further, he might have said that there was no evidence that Landac had ever lent money to VCM. He had lent Landac $150,000 and Landac had used that money to make an out and out payment to VCM as consideration for the option. Although the development was the result of transactions with VCM, their Lordships think that VCM cannot be said to have had a "close business relationship" with Landac in the continuing sense in which that phrase was used by the Court of Appeal.

 

28. Their Lordships refrain from analysing the judgment of the Court of Appeal in any further detail because it seems to them clear that there was no adequate basis upon which they were entitled to reject the finding of the trial judge that Mr. Acland believed in good faith, for the reasons he gave in evidence, that registration would not be in the interests of the company. They will therefore humbly advise Her Majesty that the cross-appeal should be allowed and the judgment of Georges J. restored.

 

6.Costs.

The Court of Appeal made an order for costs which reflected the success of VCM on the share registration issue and the view of the Court of Appeal that Mr. Acland's wrongful refusal to register the shares had precipitated the other litigation. As the cross-appeal has succeeded, Dr. Ramsahoye accepts that VCM must pay the costs of the other parties in the Court of Appeal and before their Lordships' Board. He does not accept that this should include the costs of two counsel but their Lordships so order.

 

CROWN COPYRIGHT as at the date of judgment.


© 1998 Crown Copyright


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