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England and Wales Court of Appeal (Civil Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Bailey v Cherry Hill Skip Hire Ltd & Ors [2022] EWCA Civ 531 (27 April 2022) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2022/531.html Cite as: [2023] 1 All ER (Comm) 93, [2023] BCC 1, [2023] Bus LR 14, [2022] EWCA Civ 531, [2022] 2 BCLC 300 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN MANCHESTER
INSOLVENCY AND COMPANIES LIST (ChD)
HIS HONOUR JUDGE STEPHEN DAVIES
(SITTING AS A JUDGE OF THE HIGH COURT)
CR-2020-MAN-000684
IN THE MATTER OF CHERRY HILL SKIP HIRE LIMITED
AND IN THE MATTER OF THE COMPANIES ACT 2006
Strand, London, WC2A 2LL |
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B e f o r e :
LADY JUSTICE ANDREWS
and
LORD JUSTICE SNOWDEN
____________________
ANDREW RAEBURN BAILEY |
Appellant/Petitioner |
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-and - |
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(1) CHERRY HILL SKIP HIRE LIMITED (2) CHERRY HILL HOLDINGS LIMITED (3) CHERRY HILL WASTE LIMITED (4) CORAL NORMA BAILEY (5) JENNA BAILEY |
Respondents |
____________________
David Gilchrist (instructed by Tinsdills Solicitors) for the 4th and 5th Respondents
Hearing date: 7 April 2022
____________________
Crown Copyright ©
This judgment will be handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10.30 on 27/4/2022
LADY JUSTICE ANDREWS:
INTRODUCTION
"the allegations on which Andrew relies are so stale and he has allowed so many years to pass that his claim for relief is bound to fail."
(1) Whether on the facts pleaded in [the Petition] … the Petition, or any parts of the Petition, should be dismissed on the grounds of delay and/or acquiescence; and, if part should be dismissed, which parts;
(2) In respect of any part of the Petition that is not dismissed on the grounds of delay or acquiescence, whether any of those remaining allegations should be struck out for want of particularity and (if so) which parts."
"no judge properly applying the law to these facts could conclude that it would be right to award any relief in relation to the exclusion."
Whilst acknowledging that the position was less straightforward in regard to the other allegations, he concluded at [38] that:
"no reasonable judge properly applying the law, who might have every sympathy for Mr Bailey if he proved his case, would say that it could be fair to award him any relief, given that it does raise such ancient issues, and even though those allegations are, as I have said, serious."
In those circumstances, he held that the second preliminary issue did not arise for determination.
i) As already stated, the Company, which is named as the First Respondent, does not exist. It was struck off the register on 15 October 2020 and dissolved on 27 October that year. No steps have been taken to restore it.
ii) The named Second Respondent, Cherry Hill Holdings Ltd ("Holdings"), which became the Company's parent company in or around 1989 on the transfer to it of Norma's shares, was also struck off the register on 2 December 2020 and dissolved on 8 December that year. No steps have been taken to restore it.
iii) There is an unresolved personal dispute between Andrew and two of his three children, Jenna and Liam, about whether he made them a gift of his shares in the Company in or around December 2006. The Annual Return filed on 31 December 2007 identifies Jenna and Liam as the holders of 49% of the shares in the Company. Andrew claims in the petition that he discovered this in March 2018. Liam is not a party to these proceedings.
iv) The register of shareholders is missing and therefore it is not known whether the register was altered to remove Andrew's name and substitute Jenna and Liam as members in 2007.
v) No stock transfer forms appear to have been executed. That should have happened, any share certificates should have been handed over, and any stamp duty paid before the transfer was registered.
vi) The beneficial ownership of the shares is very much in dispute.
vii) All the allegations in the amended petition (other than the complaint about the dissolution and striking off of the Company) were between 12 and 37 years old at the time when the petition was issued.
viii) The allegations which Andrew now seeks to pursue were between 12 and 19 years old at that time.
THE JURISDICTION TO GRANT RELIEF FOR UNFAIR PREJUDICE
"(1) A member of a company may apply to the court by petition for an order under this Part on the ground -
(a) that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or
(b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial."
"Equitable considerations, affecting the manner in which legal rights can be exercised, will arise only in those cases where there exist considerations of a personal character between the shareholders which makes it unjust or inequitable to insist on legal rights or to exercise them in a particular way."
This aspect of the jurisdiction is most often relied on in cases of so-called "quasi-partnerships," where there is an underlying relationship of trust and confidence between the members.
THE SURVIVING COMPLAINTS
"It is also clear that the current case as pleaded by Mr Bailey would have to be significantly made more detailed as a proper vehicle for this case to proceed to trial because the existing allegations are made at far too high a level of abstraction to enable the Respondents to deal with them as they need to."
i) The removal of the goodwill and assets of the business of the Company during a course of conduct in and after 2001;
ii) The "fraudulent" substitution of apparent shareholders (Jenna and Liam) in place of Andrew in respect of his 49% holding in the Company, including the submission of a "fraudulent" Annual Return to Companies House;
iii) The "fraudulent" dissolution of the Company under a purported but unlawful application to strike off pursuant to s.1003 of the Companies Act 2006 without notice to, or knowledge or participation of Andrew as 49% shareholder.
i) that, between 2001 and 2008, the Company made loans to Norma at a time when it was not operating profitably (para 6);
ii) that no AGM has been held since 2001 or that if it has, Andrew was not notified of it and allowed to participate in it (para 7);
iii) that between 2001 and 2008 payments were made to Rossisle, a company of which Norma and Jenna were directors and shareholders, in respect of "operating costs", to which Rossisle was not entitled (para 11);
iv) that Norma and Jenna's interest in Rossisle was not disclosed and that the transactions with Rossisle were tainted by a conflict of interests (para 11);
v) that in each trading year from 2001 onwards Andrew has been denied access to the Company's annual accounts, directors' report and auditor's report (para 12);
vi) that in 2007 the Company filed an Annual Return wrongly naming Jenna and Liam as the holders of Andrew's shares and/or that the register of members was wrongfully altered to remove Andrew as a shareholder (paras 13 and 14);
vii) that from 2001 onwards, business and assets were diverted from the Company to CHW, and the Company was deliberately run down (para 16);
viii) that Norma and Jenna, having created the situation where the Company could no longer trade, and stripped it of its assets, applied to have the Company and Holdings struck off and dissolved without prior notice to Andrew as minority shareholder (para 24).
THE CORRECT APPROACH TO DELAY IN THIS CONTEXT
" … the right approach is to consider how the delay in question should affect the exercise of the court's discretion under section 996 to make such order as it thinks fit. There is no statutory time limit for issuing a petition, nor does the equitable doctrine of laches strictly apply where the relief sought is not equitable relief. However, unjustified delay resulting in prejudice or an irretrievable change of position (the essential ingredients of a defence of laches) are likely to be significant factors in the exercise of the court's discretion to grant or refuse a particular remedy. So too is any evidence that the Petitioners have previously acquiesced in the state of affairs of which they now complain, which is the basis of a number of the authorities to which I was referred. If, in view of the delay and the reasons for the delay, it is unfair or inappropriate in all the circumstances for the Petitioners to obtain the relief that they seek, the Court will exercise its discretion to refuse it." [Emphasis added].
To similar effect, Peter Gibson J held in Re DR Chemicals (1989) 5 BCC 39 that the test was whether the delay "renders it inequitable for [the Petitioner] to be allowed to obtain relief."
CONCLUSION
LORD JUSTICE SNOWDEN:
LORD JUSTICE LEWISON: