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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Webster & Anor v ESMS Global Ltd & Ors [2025] EWHC 3107 (Ch) (25 November 2025) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2025/3107.html Cite as: [2025] EWHC 3107 (Ch), [2026] WLR(D) 181 |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY & COMPANIES LIST (CHD)
London |
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B e f o r e :
____________________
(1) SIMON PHILIP WEBSTER(2) JENNIFER ANNE WEBSTER | Claimants |
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| - and - |
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| (1) ESMS GLOBAL LIMITED (2) RAJESH KUMAR SOOD (3) SARITA SOOD |
Defendants |
____________________
The First Defendant did not appear
Daniel Lightman KC and Wilson Leung (instructed by Reynolds Porter Chamberlain LLP) for the Second and Third Defendants
Hearing date: 22 and 23 July 2025
____________________
Crown Copyright ©
HHJ Cadwallader:
Introduction
Background
Webster,
are directors of, and together own or control 47.6% of the shares in, the company, ESMS Global Ltd, the first defendant. The second and third defendants, Mr and Mrs Sood, are also directors of, and together own or control another 47.6% of the shares in the company. The remaining 4.8% of the shares are held by Trident Trust Company (Guernsey) Limited ('Trident') as trustee for the company's employee benefit trust. Trident is not a director.
Webster
and Mr Sood met in 2009, and in 2011 incorporated the company for the purpose of acquiring Guy's and St Thomas' medical toxicology information services business, which the company then purchased in 2011. The terms of the purchase required the company to set up an employee benefit trust of which Trident is now trustee.
Websters
and the Soods has completely broken down, and in consequence the board of directors is routinely deadlocked. A particular difficulty is that certain employees have brought litigation to enforce the company's alleged obligations under the purchase agreement in relation to the EBT. While the articles of association of the company contain provisions designed to resolve shareholder deadlocks, those provisions, which have frequently been invoked, have not resolved the difficulties and have given rise to further deadlocks. The claimants see a solution to the problem as lying with the appointment of an independent director, but the Soods do not agree. The shareholder deadlock over this might be resolved if Trident voted its shares. However, the trust deed establishing the EBT provides that unless the company directs that Trident vote on any particular occasion, Trident must abstain from voting at any general meeting of the company. A dispute between the
Websters
and the Soods over whether Trident could nonetheless vote on a written resolution of the company was resolved by a decision on 20 December 2023 of the Royal Court of Guernsey to the effect that Trident might vote on written resolutions of the company. Mr and Mrs
Webster
have identified Mr Andrew Chamberlain as a suitable candidate willing to act as an additional and independent director, so as to break the company deadlock at board level. By letter to the company dated 6 March 2024, Mr and Mrs
Webster
made a request under section 292 Companies Act 2006 requiring the company to circulate written shareholder resolutions (being resolutions, accordingly, upon which Trident might vote) in the following terms"1. THAT, Andrew Chamberlain, having consented to act, be appointed as a director of the Company with immediate effect; and
2. THAT, subject to the passing of resolution 1 above, during the period that he holds office as a director of the Company, the Company pay Andrew Chamberlain a fee of £375 per hour gross (current at the date of this Resolution) (or such greater fee as the board of the Company shall agree)."
Webster
deposited £50 into the company's bank account to cover the company's expenses of circulation.
Webster
circulated a written board resolution authorising the circulation of the proposed written resolutions, which they approved and signed on 18 March 2024, but which Mr and Mrs Sood refused to sign.
Webster's
solicitors sent a letter of claim to Mr and Mrs Sood on 28 March 2024, to which a response dated 16 April 2024 was sent, and on 9 May 2024 these proceedings were commenced by way of Part 8 claim. The relief sought is an order declaring that the company is required to circulate the written resolutions pursuant to sections 292 (4) and 293 (1) to (4) of the Companies Act 2006; an order that the company shall circulate the written resolutions; and that if it fails to comply, Mr
Webster
as a director and officer of the company, be authorised to circulate them on behalf of the company.
Websters
are not entitled to any relief because no civil cause of action arises in respect of a putative breach of sections 292 and 293 Companies Act 2006. The argument that the resolutions were vexatious was pursued energetically on the basis that Mr Chamberlain was not and would not be independent, would act as the 'yes-man' for Mr and Mrs
Webster
and/or Trident, and that he was secretly colluding with, among others, Mr and Mrs
Webster,
to "dismantle the embedded equality between Mr
Webster
and Mr Sood". The evidence from the
Websters
and Mr Chamberlain himself was that he was an employment solicitor with over 30 years' experience in board disputes, mediation and employment law, and substantial experience as a non-executive director, was independent of the
Websters
and all other stakeholders, and intended to "approach matters with an independent mind and try to work out how best to deal with whatever the issues are, always acting in the best interests of the company".
Websters'
claim was misconceived because no civil cause of action arose for any breach on the part of the company of section 293 of the 2006 Act; and they did not intend to argue at trial that any of the exceptions in section 292(2) of that Act were applicable to the proposed written resolutions; but that they were making no admissions as to the
Websters'
substantive allegations, instead making a jurisdictional argument in the same way as often made by parties on a strikeout application or the determination of a preliminary issue that, even assuming the substantive allegations were true, the court did not have power to grant a remedy as a matter of law. On that basis they indicated that Mr Sood would not attend for cross- examination, and Mr
Webster
would not be cross-examined.The issues
"1. Is D1 (the Company) obliged pursuant to sections 292 and 293 of the Companies Act 2006 to circulate the Claimants' proposed written resolutions dated 6 March 2024 for the appointment of Mr Chamberlain as an additional director of the company to eligible members? The Second and Third Defendants are neutral as to Issue 1.
2. If so, does the Court have jurisdiction to grant the relief sought by the Claimants in this Claim?"
Preliminary matters
The statutory provisions
"(1) Anything which in the case of a private company may be done—
(a) by resolution of the company in general meeting, or
(b) by resolution of a meeting of any class of members of the company,
may be done, without a meeting and without any previous notice being required, by resolution in writing signed by or on behalf of all the members of the company who at the date of the resolution would be entitled to attend and vote at such meeting…
(4) A resolution agreed to in accordance with this section has effect as if passed—
(a) by the company in general meeting, or
(b) by a meeting of the relevant class of members of the company,
as the case may be…"
"(1) A resolution of the members (or of a class of members) of a private company must be passed–
(a) as a written resolution in accordance with Chapter 2, or
(b) at a meeting of the members (to which the provisions of Chapter 3 apply)."
"(2) The company must send or submit a copy of the resolution to every eligible member.
(3) The company must do so–
(a) by sending copies at the same time (so far as reasonably practicable) to all eligible members in hard copy form, in electronic form or by means of a website, or
(b) if it is possible to do so without undue delay, by submitting the same copy to each eligible member in turn (or different copies to each of a number of eligible members in turn), or by sending copies to some members in accordance with paragraph (a) and submitting a copy or copies to other members in accordance with paragraph (b).
(4) The copy of the resolution must be accompanied by a statement informing the member–
(a) how to signify agreement to the resolution (see section 296), and
(b) as to the date by which the resolution must be passed if it is not to lapse (see section 297).
(5) In the event of default in complying with this section, an offence is committed by every officer of the company who is in default.
(6) A person guilty of an offence under this section is liable–
(a) on conviction on indictment, to a fine;
(b) on summary conviction, to a fine not exceeding the statutory maximum.
(7) The validity of the resolution, if passed, is not affected by a failure to comply with this section."
"(1) The members of a private company may require the company to circulate a resolution that may properly be moved and is proposed to be moved as a written resolution.
(2) Any resolution may properly be moved as a written resolution unless–
(a) it would, if passed, be ineffective (whether by reason of inconsistency with any enactment or the company's constitution or otherwise),
(b) it is defamatory of any person, or
(c) it is frivolous or vexatious.
(3) Where the members require a company to circulate a resolution they may require the company to circulate with it a statement of not more than 1,000 words on the subject matter of the resolution.
(4) A company is required to circulate the resolution and any accompanying statement once it has received requests that it do so from members representing not less than the requisite percentage of the total voting rights of all members entitled to vote on the resolution.
(5) The "requisite percentage" is 5% or such lower percentage as is specified for this purpose in the company's articles.
(6) A request–
(a) may be in hard copy form or in electronic form,
(b) must identify the resolution and any accompanying statement, and
(c) must be authenticated by the person or persons making it..."
"(1) A company that is required under section 292 to circulate a resolution must send or submit to every eligible member–
(a) a copy of the resolution, and
(b) a copy of any accompanying statement."
The section provides that it must do so in certain specific ways; and it goes on to provide that
"(5) In the event of default in complying with this section, an offence is committed by every officer of the company who is in default.
(6) A person guilty of an offence under this section is liable–
(a) on conviction on indictment, to a fine;
(b) on summary conviction, to a fine not exceeding the statutory maximum.
(7) The validity of the resolution, if passed, is not affected by a failure to comply with this section."
"(1) The expenses of the company in complying with section 293 must be paid by the members who requested the circulation of the resolution unless the company resolves otherwise.
(2) Unless the company has previously so resolved, it is not bound to comply with that section unless there is deposited with or tendered to it a sum reasonably sufficient to meet its expenses in doing so."
"(1) A company is not required to circulate a members' statement under section 293 if, on an application by the company or another person who claims to be aggrieved, the court is satisfied that the rights conferred by section 292 and that section are being abused.
(2) The court may order the members who requested the circulation of the statement to pay the whole or part of the company's costs (in Scotland, expenses) on such an application, even if they are not parties to the application."
Issue 1
The power to grant injunctions
"Despite early attempts, the common law courts failed to add the injunction to their judicial armoury, so that the Chancellor had to come to the aid of those whose wrongs could not be adequately redressed by damages. This often necessitated concurrent proceedings: in the common law courts to establish the right, and in the Court of Chancery to obtain the remedy. The Common Law Procedure Act 1854 went some way towards meeting this defect by empowering the common law courts to grant injunctions in certain cases; but in 1875 the situation was radically altered when the courts were amalgamated and the power to grant injunctions was conferred on all Divisions of the High Court. It has been expressly enacted that interlocutory injunctions may be granted "in all cases in which it appears to the court to be just or convenient so to do", and the Supreme Court has insisted that "[t]he power of courts with equitable jurisdiction to grant injunctions is, subject to any relevant statutory restrictions, unlimited". This rule extends to perpetual injunctions. Although it has been said that the principles on which the court acts have not been altered, practices do change as the law develops, and it is clear that, "[l]ike any judicial power, the power to grant an injunction must be exercised in accordance with principle and any restrictions established by judicial precedent and rules of court". The claimant must still establish some legal or equitable right or interest before he can obtain an injunction."
The claimants' case
The defendants' case
(1) Where a statute creates an obligation, and expressly provides for it to be enforced in a particular manner (e.g. by way of criminal sanction), the general rule is that:
(a) Parliament intended for that remedy to be the exclusive remedy; and that therefore
(b) the Court has no jurisdiction to grant other types of remedies (e.g. an injunction or damages) to private individuals for a breach of that obligation.
(2) The general rule applies with particular force in the case of a statute which creates a new duty that did not exist at common law and at the same time provides a specific remedy for enforcing it.
(3) The general rule is even stronger in relation to more recent Acts, which are drafted with greater precision by professional legislative drafters, who are presumed to be familiar with the principles of statutory interpretation.
(4) However, the general rule is not conclusive. It is ultimately a question of statutory interpretation. Thus, in certain cases, it is possible to show that an exception to the general rule is applicable.
(5) One exception may be where on the true construction of the Act the obligation or prohibition was imposed for the benefit or protection of a particular class of individuals; or has created a public right and then a particular member of the public suffers particular, direct and substantial damage beyond what the rest of the public has suffered. But these are necessary, and not sufficient, conditions for the exception to arise. It is still ultimately a question of statutory interpretation, and the court will take into account all relevant factors, not just these conditions.
Before me it was expressly accepted in oral submissions on behalf of the defendants that in the present case the necessary (but not sufficient) condition under (5) was satisfied because the statutory provision was for the benefit of a limited class of persons.
The authorities
Websters
seek by way of relief runs counter to that restriction. "… where an Act creates an obligation, and enforces the performance in a specified manner, we take it to be a general rule that performance cannot be enforced in any other manner."
As pointed out in Bennion, Bailey and Norbury, Statutory Interpretation, 8th ed., 363, this may be regarded as an application of the expressio unius principle: that is, that where an Act mentions one or more things, by implication it includes other things of the same kind. In the case of Bridges, the statute provided that where land tax charged on lands owned by a bishop had been redeemed with money raised for that purpose by virtue of statute, the land-tax should be considered as yearly rent payable to such bishop and his successors, over and above the reserved rent (if any) during the demise existing at the time of the sale: the statutory provision for recovery by such an additional rent meant there could be no other means of enforcing the payment.
"There are three classes of cases in which a liability may be established founded upon a statute. One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law: there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, and [sic] the party suing has his election to pursue either that or the statutory remedy. The second class of cases is, where the statute gives the right to sue merely, but provides no particular form of remedy: there, the party can only proceed by action at common law. But there is a third class, viz. where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. The present case falls within this latter class, if any liability at all exists. The remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to. The company are bound to follow the form of remedy provided by the statute which gives them the right to sue."
"It shall be lawful for the company from time to time to make such calls of money upon the respective shareholders, in respect of the amount of capital respectively subscribed or owing by them, as they shall think fit, provided that twenty-one days' notice at the least be given of each call, and that no call exceed the prescribed amount, if any, and that successive calls be not made at less than the prescribed interval, if any, and that the aggregate amount of calls made in any one year do not exceed the prescribed amount, if any ; and every shareholder shall be liable to pay the amount of the calls so made, in respect of the shares held by him, to the persons and at the times and places from time to time appointed by the company."
The company claimant had made the calls, and the defendant made default, but was not a shareholder, merely a subscriber. There was no cause of action under the statutory provision. Because Willes J concluded that the provision was one of a series of enactments which at once created the liability and prescribed the remedy, there was no room to argue that a subscriber had undertaken an independent obligation to the company to pay calls. The approach in relation to the third class of cases was described by Lord Jenkins as "not open to doubt" in Pyx Granite Co Ltd v Ministry of Housing and Local Government [1960] AC 260.
"There really is nothing at all in what I have determined or in any of the cases to which I have referred in any way inconsistent with the language of Lord Herschell, who was referring to the creation of a new offence; nor was it a question of property at all; it was simply that a patent agent who acted without having conformed to some statutory provision—it is immaterial to say what—was liable to a penalty of 20l. That would not be within any branch of the ancient jurisdiction of the Court of Chancery; it certainly does not come within any principle on which I have acted to-day, and it appears to me really to be not relevant to the present case."
"There is no reasonable ground for maintaining that a proceeding by way of penalty is the only remedy allowed by the statute. The principle explained by Lord Cairns in Atkinson v. Newcastle Waterworks Co. and by Lord Herschell in Cowley v. Newmarket Local Board solves the question. We are to consider the scope and purpose of the statute and in particular for whose benefit it is intended. Now the object of the present statute is plain. It was intended to compel mine owners to make due provision for the safety of the men working in their mines, and the persons for whose benefit all these rules are to be enforced are the persons exposed to danger. But when a duty of this kind is imposed for the benefit of particular persons, there arises at common law a correlative right in those persons who may be injured by its contravention."
Accordingly, the widow might succeed in a claim under the statute.
"(1) Notwithstanding any enactment or rule of law to the contrary, it shall be lawful on any licensed track being a dog racecourse for the occupier of the track or any person authorized by him in writing –
(a) to set up and keep a totalisator, whether in a building or not ; and
(b) on any appointed day, while the public are admitted to the track for the purpose of attending dog races and no other sporting events are taking place on the track, to operate a totalisator so set up, but only for effecting with persons resorting to the track betting transactions on dog races run on that track on that day ; and for any person to effect betting transactions by means of a totalisator lawfully operated.
(2) The occupier of a licensed track-
(a) shall not, so long as a totalisator is being lawfully operated on the track, exclude any person from the track by reason only that he proposes to carry on bookmaking on the track; and
(b) shall take such steps as are necessary to secure that, so long as a totalisator is being lawfully operated on the track, there is available for bookmakers space on the track where they can conveniently carry on bookmaking in connexion with dog races run on the track on that day; and every person who contravenes, or fails to comply with, any of the provisions of this sub-section shall be guilty of an offence."
Lord Simonds stated, at p. 407
"It is, I think, true that it is often a difficult question, whether, where a statutory obligation is placed on A., B. who conceives himself to be damnified by A.'s breach of it has a right of action against him. But on the present case I cannot entertain any doubt. I do not propose to try to formulate any rules by reference to which such a question can infallibly be answered. The only rule which in all
circumstances is valid is that the answer must depend on a consideration of the whole Act and the circumstances, including the pre-existing law, in which it was enacted. But that there are indications which point with more or less force to the one answer or the other is clear from authorities which, even where they do not bind, will have great weight with the House. For instance, if a statutory duty is prescribed but no remedy by way of penalty or otherwise for its breach is imposed, it can be assumed that a right of civil action accrues to the person who is damnified by the breach. For, if it were not so, the statute would be but a pious aspiration. But " where an Act" (I cite now from the judgment of Lord Tenterden C.J. in Doe v. Bridges " creates an obligation, and enforces the performance in a specified manner, we take it to be a general rule that performance cannot be enforced in any other manner." This passage was cited with approval by the Earl of Halsbury L.C. in Pasmore v. Oswaldtwistle Urban District Council. But this general rule is subject to exceptions. It may be that, though a specific remedy
is provided by the Act, yet the person injured has a personal right of action in addition. I cannot state that proposition more happily, or indeed more favourably to the appellant, than in the words of Lord Kinnear in Black v. Fife Coal Co. Ld.: "If the duty be established, I do not think there "is any serious question as to the civil liability. There is no reasonable ground for maintaining that a proceeding by way of penalty is the only remedy allowed by the statute…"
And at p. 408,
"…beyond the single fact that the performance of by the respondents of their statutory duty will redound to the advantage of certain bookmakers, of whom the appellant may be one, I see neither in this Act nor in its attendant circumstances any element which takes this case out of the general rule which I have taken from Lord Tenterden's judgment in Doe v. Bridges. It was argued that the rule had no application where the statutory remedy was by way of criminal proceedings for a penalty. But I see no ground for this distinction. The implication is, if anything, in the opposite direction. For the sanction of criminal proceedings emphasizes that this statutory obligation, like many others which the Act contains, is imposed for the public benefit and that the breach of it is a public not a private wrong. So reading it, I have no doubt that the primary intention of the Act was to regulate in certain respects the conduct of race tracks and in particular the conduct of betting operations thereon. If in consequence of those regulations being observed some bookmakers will be benefited, that does not mean that the Act was passed for the benefit of bookmakers in the sense in which it was said of a Factory Act that it was passed in favour of the workmen in factories."
"It must be recognized, however, that the courts have laid down, not indeed rigid rules, but principles which have been found to afford some guidance when it is
sought to ascertain the intention of Parliament. In Phillips v. Britannia Hygienic Laundry Co. Ld. (5) Bankes L.J. cited a well-known passage from the speech of Lord Macnaghten in Pasmore v. Oswaldtwistle Urban District Council, in which that noble and learned Lord, referred to the statement of Lord Tenterden in Doe v. Bridges, spoke of the "general rule " that " where an Act creates an obligation, and enforces "the performance in a specified manner . . . . that performance cannot be enforced in any other manner." "Whether the general rule is to prevail," (said Lord Macnaghten) " or "an exception to the general rule is to be admitted, must depend on the scope and language of the Act which creates the obligation and on considerations of policy and convenience." In my opinion Bankes L.J. rightly applied this principle in Phillips's case. I do not agree with Mr. Pritt's submission that it is heretical to regard criminal proceedings which may be followed by fine and imprisonment as a "specified manner" of enforcing a duty. I think that it is both orthodox and right so to regard them."
I do not, however, see that passage as requiring a court to regard a criminal sanction as necessarily directed to the enforcement of private rights, if there are such rights; or its presence as being in all cases an indication that there are no private rights, but only public interest. In the present case, there are plainly private rights, but only expressly a criminal sanction: it is hard to see how the statute could on that ground be construed as not after all conferring private rights.
"Now, the law having been thus stated and, as I believe, correctly stated in the Court of Appeal in 1923, the Act with which your Lordships are at present concerned was passed eleven years later. During that intervening period the dictum of Lord Tenterden had, I think, been consistently followed in the sense in which it was understood by Bankes L.J. It is, therefore, legitimate to assume that those who were engaged in drafting the Betting and Lotteries Act, 1934, had in mind the principle of construction which had thus been laid down. It was not thought fit to break with tradition and to state explicitly in the Act whether or not an aggrieved bookmaker was to have a right of civil action, but Parliament must be taken to have known that if it preferred to avoid the crudity of a blunt statement and to leave its intention in that regard to be inferred by the courts, the " general rule " would prevail unless the " scope and language " of the Act established the exception. It cannot be supposed that the draftsman is blind to the principles which the courts have laid down for their own guidance when it becomes necessary for them to fill in such gaps as Parliament may choose to leave in its enactments. There is an inevitable interaction between the methods of parliamentary drafting and the principles of judicial interpretation. I do not find in the present case any indication that Parliament sought to manifest an intention that an exception to the general rule should be created."
"Where a statute creates a new right which has no existence apart from the statute creating it, and the statute creating the right at the same time prescribes a particular method of enforcing it, then, in the words of Lord Watson in Barraclough v. Brown, "the right and the remedy are given uno flatu, and the one cannot be dissociated from the other." As Lord Herschell put it in the same case, the party asserting the right cannot "claim to recover by virtue of the statute, and at the same time insist upon doing so by means other than those prescribed by the statute which alone confers the right." The principle is wholly apposite in cases comparable to Barraclough v. Brown. If A has a right founded entirely upon a particular statute to recover a sum of money from B, and the statute goes on to provide that the sum in question may be recovered in proceedings of a particular kind, then it is wholly reasonable to impute to the legislature an intention that the sum in question, recoverable solely by virtue of the statute, should be recoverable in proceedings of the kind provided by the statute and not otherwise. The statute puts upon B for the benefit of A a liability to which B could not otherwise be subjected, and at the same time prescribes a particular form of proceedings in which it may be enforced. No doubt B must then submit to being amerced to the extent and in the manner provided by the statute. But the incidents of the burden cast upon B by the terms of the statute are not to be changed from or made more onerous than those which the statute provides, as they would be if A was at liberty to recover the sum in question, or seek a declaration of his right to recover it, in any other form of proceedings to which he might choose to have recourse. As it seems to me, the purpose underlying the principle is the protection of the person against whom the statutory right is asserted from oppression on the part of the person asserting it."
"… there are two classes of exception to this general rule. The first is where upon the true construction of the Act it is apparent that the obligation or prohibition was imposed for the benefit or protection of a particular class of individuals, as in the case of the Factories Acts and similar legislation. As Lord Kinnear put it in Butler (or Black) v Fife Coal Co Ltd [1912] AC 149, 165, in the case of such a statute:
'There is no reasonable ground for maintaining that a proceeding by way of penalty is the only remedy allowed by the statute… We are to consider the scope and purpose of the statute and in particular for whose benefit it is intended. Now the object of the present statute is plain. It was intended to compel mine owners to make due provision for the safety of the men working in their mines, and the persons for whose benefit all these rules are to be enforced are the persons exposed to danger. But when a duty of this kind is imposed for the benefit of particular persons there arises at common law a correlative right in those persons who may be injured by its contravention.'
The second exception is where the statute creates a public right (i.e. a right to be enjoyed by all those of Her Majesty's subjects who wish to avail themselves of it) and a particular member of the public suffers what Brett J in Benjamin v Storr (1874) LR 9 CP 400, 407, described as 'particular, direct, and substantial' damage 'other and different from that which was common to all the rest of the public'."
"The fact that a particular provision was intended to protect certain individuals is not of itself sufficient to confer private law rights of action upon them, something more is required to show that the legislature intended such conferment."
In the present case, however, the statutory provision was not merely intended to protect certain individuals, but expressly conferred rights upon them. That is the "something more" which is, in my judgment, sufficient for the claimants' purposes.
"The basic proposition is that in the ordinary case a breach of statutory duty does not, by itself, give rise to any private law cause of action. However a private law cause of action will arise if it can be shown, as a matter of construction of the statute, that the statutory duty was imposed for the protection of a limited class of the public and that Parliament intended to confer on members of that class a private right of action for breach of the duty. There is no general rule by reference to which it can be decided whether a statute does create such a right of action but there are a number of indicators. If the statute provides no other remedy for its breach and the Parliamentary intention to protect a limited class is shown, that indicates that there may be a private right of action since otherwise there is no method of securing the protection the statute was intended to confer. If the statute does provide some other means of enforcing the duty that will normally indicate that the statutory right was intended to be enforceable by those means and not by private right of action: Cutler v Wandsworth Stadium Ltd [1949] AC 398; Lonrho Ltd v Shell Petroleum Co Ltd (No. 2) [1982] AC 173. However, the mere existence of some other statutory remedy is not necessarily decisive. It is still possible to show that on the true construction of the statute the protected class was intended by Parliament to have a private remedy. Thus the specific duties imposed on employers in relation to factory premises are enforceable by an action for damages, notwithstanding the imposition by the statutes of criminal penalties for any breach: see Groves v Wimborne (Lord) [1898] 2 QB 402 … the question is one of statutory construction and therefore each case turns on the provisions in the relevant statute…"
(Bedfordshire was partially overruled in N v Poole Borough Council [2019] UKSC 25, but not on this aspect (see Poole, [74], [83]).
"79. … there must be a valid decision of the board to circulate the resolutions on the company's behalf. There is no 'self-help' mechanism enabling the shareholders to circulate the resolutions themselves. This is supported by the ratio in [Re Sprout Land Holdings Ltd [2019] EWHC 806 (Ch)] itself, where a written resolution was held invalid when it was circulated by one of the directors, rather than following a board resolution.
80. If the First and Second Defendants [as shareholders in the Company] had been frustrated in any way at the Company's response to their request [pursuant to section 292 of CA 2006] for written resolutions to be circulated, their remedy was to require a general meeting, or to deal with the matter on a Duomatic basis. They did neither at the time."
"This is a clear judicial statement that if a shareholder has requested the company to circulate a written resolution under sections 292 and 293 of CA 2006, but to no avail, the shareholder's remedy is ("…their remedy was…") to require a general meeting or obtain unanimous shareholder consent under the Duomatic principle. The shareholder does not have a right to apply to court for an order compelling such circulation: having considered Sprout, no such right was identified by ICC Judge Barber (a highly experienced company judge) in Kamenetskiy, and no such right is mentioned anywhere in sections 292-295 of CA 2006."
However, neither Sprout nor Kamenetskiy was concerned to address the issue presently under consideration.
Texts
"… it is only on very rare occasions that the conferring of special statutory remedies or the provision of penalties should be construed as abrogating or curtailing rights to injunctive and other such relief that otherwise exist on the application of general equitable principles. Indeed, it is difficult to envisage that statutory provisions should be construed as impliedly bringing about this position unless there exist very special circumstances, such as where the statutory remedy in question closely resembles the remedy of injunction and in all the circumstances an inference is found that an exclusive reformulation or consolidation of general equitable rights has been intended pro tanto.
In the second place, a different position arises when the precise right that it is sought to establish by injunction did not exist before the passage of the material statutory instrument and it appears that that instrument has both created the material right and also set out a remedy or procedure by which it may be established. If it is sought, not to rely on the statutory procedure that has been set out, but rather to obtain the issue of an injunction, it must first be shown that the new right created by the statute is sufficiently similar to other rights that are enforced by injunctions for it to be possible to regard that new right as susceptible of equitable protection. Prima facie any statutory right should be regarded as susceptible of equitable protection or enforcement unless it has a special characteristic that on recognised principles induces a court with equitable jurisdiction to relegate plaintiffs to legal remedies, such as where they merely seek to enforce an obligation for which damages are an adequate remedy [citing Institute of Patent Agents v Lockwood [1894] AC 347, 361 – 362; Thorne v British Broadcasting Corporation [1967] 1 WLR 1104]. Secondly, if it is shown that the right asserted is otherwise susceptible of protection by injunction, it must be asked whether, as a matter of statutory intention, the right to an injunction is excluded… the proper question is one of construction, that is, whether or not the intention has been shown that the material statutory remedy or procedure should be exclusive in this respect [footnote: a legislative intention to exclude relief by injunction is not often to be inferred. A jurisdiction to grant injunctions is presumed not to be excluded, in the absence of a clear indication to that effect, where the material rights are on general principles susceptible of protection in equity]. So where, for example, a right of property has been created, "the remedy by injunction is available unless positively excluded, and such an exclusion is not to be inferred merely from the provision of a particular remedy, whether penal or otherwise" [citing Attorney-General v T.S. Gill & Son Pty Ltd (1927) V.L.R. 22 at p. 29, citing Stevens v Chown [1901] 1 Ch 894.] … Accordingly, although it has sometimes been suggested that provisions creating a special statutory remedy in respect of a new statutory right should ordinarily be regarded as exclusive, the better the view now is that, where the right in question is of such a nature as to be inherently susceptible of enforcement by injunction, the statutory remedy is not exclusive unless there is a clear indication that it should be so regarded [citing inter alia Attorney-General v Ashbourne Recreation Ground Co [1903]1 Ch 101]. Although generally no such indication is found, nonetheless exceptional cases sometimes arise. When it is sought to establish that a statutory remedy or procedure is exclusive in this sense, important matters that may provide some indicia of intention are the nature of the right that has been created by the statutory instrument in question, the probable efficacy of the penalty or remedies set out if it were an exclusive procedure, the nature of the tribunal before which the material statutory proceedings are to be taken and the extent to which it, or the person entitled to institute those proceedings, may be obliged to take into account administrative or other special considerations, any restriction of the class of persons who are entitled to avail themselves of the statutory procedure and the appropriateness of that procedure effectively to prevent future breaches, as opposed to the mere provision of compensation for past breaches; and generally account is taken of any other matter by which it may appear that that procedure is or is not intended to be exclusive in the sense that no right should exist to the obtaining of an injunction.
It is important to note that although it is often asked generally whether the statutory procedure that is in question is exclusive, it is in truth necessary to ask precisely whether there has been an exclusion or denial of the particular remedy that is sought. It may be that some remedies are, whilst others are not, left open… It should be stressed generally that when once a plaintiff is able to establish a statutory right of a kind that is ordinarily regarded as appropriate for protection by injunction, it is only very rarely found that there is a statutory intention to deny a right to injunctive relief that is otherwise appropriate."
It does not mention Doe v Bridges, Pasmore, Cutler, Lonrho, Bedfordshire, R v Deputy Governor of Parkhurst Prison, Hague or Morrison Sports Ltd v Scottish Power UK plc. What it says about Lockwood is not borne out by the passage to which it refers. The passage appears to be of little assistance for present purposes.
"However, it should be noted that there is no method by which the members themselves may circulate the proposed written resolution in the event of default by the directors (ie there is no equivalent to s 305 relating to the members' power to call a meeting where the board fails to do so under s 304). The question therefore arises as to what is the sanction for breach of s 292 by the company apart from the criminal penalty in s 293(5) and (6). The failure of the board to comply with their obligation to circulate to eligible members a copy of a valid resolution and accompanying statement proposed by members is clearly a serious breach of statutory duty and arguably constitutes a breach of fiduciary duty by those directors contrary to CA 2006, s 171. The Board's omission to carry this obligation may also amount to unfairly prejudicial conduct of the affairs of the company within the meaning of CA 2006, s 994. In these circumstances the members whose rights have been infringed will be entitled to present an 'unfair prejudice' petition to the court under s 994 seeking appropriate relief under CA 2006, s 996. In their petition the members may seek a mandatory injunction from the court under s 996(2)(b), ordering the directors to comply with s 292 and rectify their failure to circulate the resolution and the accompanying statement."
If the editors do not consider that there is an enforceable private right, they do not explain why not.
"If the directors refuse [to circulate a written resolution proposed by members], the shareholders should consider whether they can call a general meeting or use the Duomatic principle [citing Kamenetskiy, at [80]]."
Again, if she does not consider that there is an enforceable private right, she does not explain why not. Kamenetskiy is not in my view authority for that proposition.
The defendants' argument
Section 303-306
Sections 324 – 343
Other provisions
Conclusion
Implied term
Issue 2
Relief
Declaration
Websters
under sections 292 and 293 of the Act. Accordingly, I consider that it would be just for this court to grant the declaration sought. The defendants have been vigorously opposing the proposition which the declaration will contain. It obviously serves a useful purpose, not least in putting it beyond doubt that the
Websters'
proposed written resolutions may 'properly be moved' for the purposes of section 292 has been determined in the claimants' favour. That clarifies the matter for the company and the individual parties, and anyone else concerned. There is no good reason not to grant a declaration. I do not regard the claim to a declaration as a mere appendix to the claim for an injunction.Injunction
Ancillary order
Webster
to circulate the proposed written resolutions if the company fails to do so, given the obdurate opposition to allowing the company to comply with its obligations hitherto displayed by the defendants. While it is to be hoped that an injunction against the company would be complied with, I cannot be sufficiently certain that it will be. It is appropriate for the court to add a mechanism in support of its injunction to allow Mr
Webster to circulate the proposed written resolutions if the company fails to do so.