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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Furse v Reed & Ors  EWHC 1309 (Ch) (7 June 2021)
Cite as:  EWHC 1309 (Ch)
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (Ch D)
IN THE MATTER OF ASTON MARTIN OWNERS CLUB LIMITED
AND IN THE MATTER OF THE COMPANIES ACT 2006
7 The Rolls Building Fetter Lane
London EC4A 1NL
B e f o r e :
| Mr Richard Furse
|- and -
|Mrs Anne Reed
Mr David Lewington
Mr Tom Westley
Mr Matthew Godfrey
Mr Sean O'Connell
Mr Peter Snowdon
[Nicola Rushton QC was also instructed for the Claimant for the purpose of
making written submissions subsequent to the hearing]
Matthew Bradley (instructed by Clyde & Co LLP) for the Respondents
Hearing date: 11th May 2021
Crown Copyright ©
DEPUTY ICC JUDGE BARNETT
"promote the sport and pastime of motoring, develop interest in the Aston Martin car and encourage social interaction between members".
It is a company limited by guarantee without share capital. It is managed by a Committee of Management (the "CoM") comprising 20 directors all of whom are unpaid part-time volunteers.
Office and concluded that there was not a reportable breach as no harm had
been suffered by any member. However, he advised that the disclosure of information without the permission of the data controller could nonetheless render the Claimant susceptible to prosecution as a criminal offence under section 170 of the Data Protection Act 2018.
"The Company sent out blank voting forms to all members so the Company has followed the correct procedure. If a member subsequently chooses to put their name and membership number on an already Completed form and sent it on that, to me, is an indication that they, in their capacity as a member, agree and wish to vote in that way. If they don't wish to vote in the suggested way they could abstain or change the form or vote differently. It isn't ideal at all and as I said in my initial email, it is not a black and white answer, but I just don't think you can ignore or void votes of members when they have actively chosen to vote in a particular way. I think you will have to accept these votes and proceed with the elections at the AGM".
"If the voting hadn't been carried out as prescribed by Article 5.7 then you wouldn't have any votes to announce so, in theory, yes.
However, I must stress that my view remains that by applying their details and sending the forms themselves, members have voted in line with their own wishes and it would not be correct for the directors to take any act to try to undermine, void or discard those votes, despite the fact they may be undesirable. I, personally, can't advise otherwise and from the facts you have given me I can't recommend delaying/suspending/cancelling the announcement of the votes".
"I am sorry Richard, I think the way you did it is not in the correct way of canvassing that we have done and I'm sorry to say that I'm going to withdraw my nomination for chairman. It is not consistent with my values and behaviours, what has happened here and I feel that any victory would have been tainted, irrespective of whether legal or not. The fact that we are discussing it in this manner means it is tainted, in my view. And it would completely ruin the experience of being chairman".
"So although it is not illegal and the result must stand. I think it is then a question of what is morally acceptable but we do basically have to ahead with the results tomorrow [sic]".
"The suggestion has been that we don't give the results out tomorrow and we investigate it, but actually, there is really nothing else to investigate. Members have the choice to make a decision. They had a blank ballot form, they had a completed ballot form, they chose what to do.
In terms of the election I don't think we have any choices. Unless anyone has any other options that they want to suggest in terms of what we do in terms of results I think we have to accept that we give the results as it is.
It sounds like we don't have any other options for tomorrow, so I think we have to continue with the results as they are.
In answer to the question of what we do tomorrow, I don't see we have any choice but to go with the results other than the fact that Anthony has stood down so that would mean that I would be chairman, we don't know who has got the treasurer bit and we don't know the directors we obviously know that Tom and Matt are at a disadvantage. So unless anyone has another option on what we do tomorrow I don't think there is any more discussion on this that is where it is".
"6. The legal advice from the Company's lawyers which Anne Reed read out at the meeting stated that they did not consider the votes to have been illegal, and that they should stand and the AGM proceed. However, there was concern expressed by Mr Overdijk, our Dutch Section Chairman and Director, about the validity of some of their opinions which had been sought in a hurry. I value the opinion of Mr Overdijk, who is a lawyer himself, and agreed with my co-Directors that adjourning the AGM prior to announcing the election result to allow time for additional investigation and for the legal advice to be confirmed and thereafter followed would be a sensible step in the circumstances. I made this decision, not from a desire to alter the outcome of the election, but on the basis of what I thought was in the best interests of the Club and the Members. I was particularly concerned that many members would be upset that their own votes would have been undermined by the actions of the Claimant. If we had been allowed to meet earlier in the week to discuss this with more time before the AGM we might have reached a different decision for the actual AGM. Along with all I believe of the coDefendants to this claim, I have always intended that once the additional advice was to hand the COM would implement it. As Anne Reed says in her statement that is exactly what has happened".
"You have sought to influence the 2021 CoM election. Your acts and omissions have created uncertainty, have not been in the best interests of the Company, have been ultra vires your powers, and have left the Company in a governance crisis which could and should have been avoided had you properly discharged your duties as chairman…
You failed to disclose the full content of the legal advice that you had received before or during the meeting. It was only belatedly disclosed on 28 March 2021, after both the CoM meeting and the Annual General Meeting and because Mr Furse demanded that you do so. The advice, if disclosed in full could, and most likely would, have had a material impact on the discussions at the meetings and the conclusions reached. You had no right to withhold the advice, nor selectively to disclose it.
The election result should have been announced at the annual general meeting on 27 March 2021. You ignored that advice, which has precipitated confusion and uncertainty.
You continue to conceal the results without cause or justification or indeed any authority to do so. You have wilfully failed to recognise and/or properly announce the winning candidates, notwithstanding that the election count has been completed, and the result is known to Mark Aylott – albeit he is not an independent scrutineer".
"The decision to propose to the AGM that the meeting be adjourned prior to the completion of the election was one taken by the executive committee as a whole. Mr Oade was the first committee member to withdraw his candidature for chairman after a committee discussion about pre-completed ballot forms which had been sent out to members. During the committee meeting and before the subsequent withdrawals on the part of other committee members our client read out to those present the legal advice which had been received. She made the point to the meeting that in her view based on the legal advice the result should stand.
It is simply not the case, as you assert, that our client sought to influence the executive committee or withhold legal advice. In fact, the view which our client expressed at the meeting ran contrary to the decision which was reached by the committee. The assertions which you make in your letter that our client sought to conceal the results (although for the avoidance of doubt she was and remains unaware as to how the votes were cast) is quite simply not sustainable. The steps which were taken came about as a result of an executive committee decision which was made in full knowledge of the legal advice which had been obtained. For our client to have acted other than in accordance with the decision of the executive committee (which it appears to be suggested in your letter that she should have done) would have been quite improper.
The way forward
We do agree with you that the events which have transpired give rise to uncertainties both as to the composition of the executive committee once the AGM has been reconvened and the correct way forward in terms of implementing decisions which have already been made as endorsed at the recent AGM. It seems to us that it is in everybody's interest (including that of your clients) that the Company's solicitors (neither you nor we) should be instructed to advise as to the current position and as to such steps as should be taken to resolve the anomalies to which the events have given rise…".
"The issues that have been identified by me alone are considerable. There may be more. In my opinion, many fall squarely to the ex-chairman who would appear to have believed she could run the club as her personal fiefdom. She certainly appears to have considered the CoM as being there to endorse her actions although she didn't even do that on a number of occasions.
The matter will now heat up significantly (in legal terms) and the bills will also now start to be personal and paid by the losers.
We trust that Anne and David and the others in their group have the pockets needed to pay because we will pursue the matter to conclusion". The Commencement of Proceedings
"5. The matter is urgent (a) because the current situation is wholly untenable and (b) because I am concerned that Anne Reed, who was the retiring Chairman of the Company, has been making statements to the members calling into question the Election and may be taking steps, with the assistance of David Lewington, who was the retiring Director responsible for publications, to attempt to cause statements to be made relating to the Election, that will purport to be official statements on behalf of the Company or at least made with its encouragement or endorsement. In particular, I am anxious that no such statements should be included in the membership magazine, which is about to be printed in readiness for distribution at the end of the month".
"67. Most pressingly, there is a Club magazine (AM News) that is mailed to the Members each month and I am very anxious that no statement is made in the magazine, on the website or elsewhere purporting to be some sort of official statement either made on behalf of the Company or by purported officers of the Company relating to the elections. This would have the serious potential to cause further dissent among the members which will only be damaging to the company as a whole…"
"19.6 (1) where more than one person has the same interest in a claim –
(a) the claim may be begun…
by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest".
In support of that entitlement, Mr Adams referred me to the decision in Catesby v Burnett  2 Ch 325.
The Application for Declaratory Relief
28 days to allow for any dissenting members to identify themselves. Mr Adams also urged upon me that I should resolve whether the new CoM took office as at 27 March 2021 or 6 May 2021.
"46… The fact that the courts now have these powers, must not, however, be regarded as a substitute for financial institutions taking the decisions which should be their commercial responsibility. The court's powers are discretionary and only to be used where there is a real dilemma which requires their intervention.
47. Declaratory relief will be granted only where there is a real dispute between the parties: Gouriet v Union of Post Office Workers  AC 435
… So for the court to have jurisdiction to declare any legal right it must be one which is claimed by one of the parties as enforceable against an adverse party to the litigation, either as a subsisting right or as one which may come into existence in the future conditionally on the happening of an event…
… The jurisdiction of the court is not to declare the law generally or to give advisory opinions; it is confined to declaring contested legal rights, subsisting or future, of the parties represented in the litigation before it and not those of anyone else".
1.The proceedings were not causative of the results being declared. It is clear from the minutes of the CoM meeting held on 1 April 2021 that the CoM had already agreed on an approach, namely, that the CoM should seek further legal advice and should not take any further steps until that advice was received. Implicit in that decision was that the CoM would follow that advice once received. That decision was known to the Claimant. Moreover, that advice had been followed up by Clyde & Co writing to the Claimant's solicitors on 14 April 2021 urging the Claimant to wait until the advice had been received and considered. That proposed course would have led to the results being declared whether or not the claim had been issued. In my judgment, the proceedings were both unnecessary and served only to increase the costs of the parties.
2. The claim was also bound to fail. For the reasons given above, I do not consider that the Claimant could properly be said to be representative of both himself and all other members of the Company pursuant to CPR 19.6 (1). The Company was not a party to the claim nor had the Claimant sought to join as defendants all members of the CoM. Accordingly, the Court would not have been in a position to make the order sought by the Claimant.
3. The application for urgent interim relief was wholly misconceived. The evidence before me at the first hearing on 23 April 2021 was unpersuasive. The further evidence that emerged only served to reinforce my initial concerns. As noted above, there was a clear conflict between the Claimant's alleged concern as to the uncertainties surrounding the election being made public and his own postings on the Company's internet forum.
4. I also have regard to the conduct of the Claimant. It was the Claimant's conduct – deprecated by other CoM members and accepted by him to have been wrong – which was the cause of the uncertainty and prompted the dispute. The Claimant joined with the other CoM members, at the meeting on 26 March 2021, in deciding to adjourn the AGM and, it would appear, voted at the AGM accordingly. Days later, the Claimant sought to impugn the very decision that he had voted for. Finally, the Claimant launched an attack on Ms Reed's competence and integrity which, as I said above, is not supported by the evidence. Had I been persuaded, as a matter of technicality, that the Claimant was the successful party I would have concluded that the above conduct was sufficient to displace the burden that the unsuccessful party should pay the costs of the successful party.
"(8) The following circumstances take a case out of the norm and justify an order for indemnity costs, particularly when taken in combination with the fact that a claimant has discontinued only at a very late stage in proceedings:
(a) where the claimant advances and aggressively pursues serious and
wide ranging allegations of dishonesty or impropriety over an extended period of time;
(b) where the claimant advances and aggressively pursues such allegations, despite the lack of any foundation in the documentary evidence for those allegations, and maintains the allegations, without apology, to the bitter end;
(c) where the claimant actively seeks to court publicity for its serious
allegations both before and during the trial in the international, national
and local media;
(d) where the claimant, by its conduct, turns a case into an unprecedented factual enquiry by the pursuit of an unjustified case;
(f) where the claimant pursues a claim which is irreconcilable with the contemporaneous documents;
(g) where a claimant commences and pursues large-scale and expensive litigation in circumstances calculated to exert commercial pressure on a defendant, and during the course of the trial of the action, the claimant resorts to advancing a constantly changing case in order to justify the allegations which it has made, only then to suffer a resounding defeat."
"An irrational desire for punishment unlinked to the merits of the claims themselves is precisely the sort of conduct which the court is likely to conclude is out of the norm."
DEPUTY ICC JUDGE BARNETT