“R J Paleja” and “MRS R PALEJA”; “M Ladhani” and “MRS Y CHEHABI” (accompanied by the letters “pp” in manuscript); “C A Russell” and “MS C A RUSSELL”; and “M Patel” and “MRS M PATEL”
“11-4-97”; “12-4-97”; “13/4/97”; “14.4.97” and “11-4-97”
“No business shall be transacted at any meeting unless a quorum is present. Two persons entitled to vote upon the business to be transacted, each being a member or a proxy for a member or a duly authorised representative of a corporation, shall be a quorum.”
“2C. As to the documents specified below the Second Claimant, the Fourth Claimant, and Mrs Renu Paleja all deny signing (whether personally or as agent) the original or any copied version of the original of those documents. The Claimants and Mrs Paleja assert that the five documents (as specified below) are forgeries in that none of them has been signed by the Second Claimant, or the Fourth Claimant’s agent, or Mrs Paleja as purports to appear from the copy versions of those documents exhibited at RA1/1 and RA1/2 of the Defendant’s witness statement dated27/06/2014 or those exhibited at RA2/1 and RA2/3 and RA2/28 of the Defendant’s witness statement dated10/11/2014 which versions are the only versions of these five documents which the Defendant has produced in this matter. 2D. The Claimants and Mrs Paleja assert that the five documents identified in 2C above are forgeries because, in the copy versions that the Defendant has now produced of those documents up to10/11/2014 , they (individually or collectively) “tell a lie” about themselves in that those documents purport to have been signed by the Second Claimant, or the Fourth Claimant’s agent, or Mrs Paleja in circumstances where those persons deny ever having signed (or ever having authorised the signing of) those documents originally or otherwise; and further that while the signatures as shown on each of the five documents referred to above either of the Second Claimant, or the Fourth Claimant’s agent, or Mrs Paleja may be their signatures, those signatures, as they appear on the five documents as aforesaid, appear to have been appended onto each of the five documents as aforesaid by persons unknown. 2E. Notice pursuant toCPR 32.19 – The Claimants give notice in accordance withCPR 32.19 that they require the documents referred to and specified in 2C. above to be proved at the trial.”
“All that was discussed was that the leaseholders were buying the freehold and that they would have the chance to become shareholders”
“We found out that Mrs Behbani had extended her lease. One of us stumbled across it. Five of us got together. I personally did not find out about this or speak to Mr Evans. [But] he said this has happened, and he told us that we had the right to do this for no premium”
“He was a lot of trouble”
“GROUND RENT. As Owners of the Freehold, you can elect not to collect Ground Rent from the “Freehold Shareholders” yet still collect from those who do not participate in the purchase”
“LEASE EXTENSIONS. As the length of your lease decreases, some Residents may wish to extend their leases (often back to 99 years). Usually a premium is charged for this by the Freeholder (which can be thousands of pounds) but as “Freehold Shareholders” you will be able to extend your own leases at no cost (except solicitors’ charges) yet charge a premium to those who do not participate in the purchase”
“WOULD THIS MEAN WE HAD “FREEHOLD FLATS”? No, it would be disadvantageous if your individual flats were Freehold. You would not, for example, be able to require your neighbour to contribute to the Service Charge Fund or to keep his property in good condition etc. To avoid these problems, all persons contributing to the purchase would become Shareholders in a new “Limited”
“As the ground rent to be collected from five lessees was Miss Bhambhani’s money, it was agreed for cheques to be made payable to ‘Miss Bhambhani’. A letter to this effect was signed by all the members. Mrs Paleja would be asked to sign later. Miss Bhambhani had managed to get£125 over charged by the previous Company Owners. She gave a cheque for£12.50 to each member according to their shares”
“The Freehold Shares to be sold with the flat and at market value. If the purchaser of the flat did not wish to buy the shares, then the owner would be obliged to sell the shares to any Shareholder of the Company at the price of£1,750 ”
“The full details relating to this Claim are comprehensively set out in the Witness Statement of Mr Joseph Edward Kennedy, dated the29 April 2014 and served herewith”
“4. [The Company] … was formed in 1997 to acquire the freehold in Willow Court and it did acquire that freehold for some£6,000 subject to the 63. 100 shares in the company were allocated as to 50% to Mrs Alexander and 50% to the other 999 year long lease tenants as shown in the freehold title referred to below. In 2010, Mr Shah acquired his flat, Flat 5 Willow Court, his assignor also being a 10% shareholder in the company, as well as being a 999 year leaseholder. In 2010 the assignor transferred both the lease and the shareholding to Mr Shah. Mrs Alexander (the then sole director of the Company) asserted that the Company has not only declined to deal with the transfer of the 10% shareholding to Mr Shah but that that holding has in fact been transferred [to] Mrs Alexander, personally, thus giving Mrs Alexander a 60% interest rather than the 50% interest in the Company. 5. Mrs Alexander has repeatedly failed and or refused to transfer the shareholding to Mr Shah in accordance with the executed share transfer notwithstanding repeated requests for her to do so. The Claimants maintain that Mrs Alexander is entitled to 50 shares in the Company and not the 60 shares that Mrs Alexander maintains that she owns.”
“At to the two issues namely:- (i) the 10 shares in the freehold company of which should have been allotted to Mr Minul Shah, our cotenant in 5,Willow Court and (ii) the appointment of the four Claimants as the new additional directors to the Defendant who is also currently acts as sole director, I believe those two claims are well-founded”
“As to the 10 shares which I claim in the freehold company, there are, it seems to me, two issues about those shares as follows:- (i) firstly, my right to have those 10 shares in the freehold company; and, (ii) secondly, the matter for the freehold company itself to have and maintain completed records of its shareholders of which I am undoubtedly a shareholder bearing in mind that, when in November 2010 I acquired flat 5, there was also transferred to me 10 shares in the freehold company as part of the consideration paid for the purchase of flat 5.”
“6. … something which according to paragraph 7 of the Particulars of Claim filed herein the Claimants had formally been requesting since March 2013. 11. I await with interest whatever explanation the Defendant is prepared to give in order at least to clarify her extraordinary unilateral conduct in misappropriating my 10 shares in the face of well recorded protest by myself, my solicitors Messrs Vymans, and the Claimants solicitors over the above mentioned four and a half year period. 12. For the avoidance of doubt, I believe that it may be alleged on behalf of Mrs Alexander that she is an individual “standing up against the tyranny of a majority” the majority being the other nine tenants of Willow Court. If and to the extent that this is alleged on behalf of Mrs Alexander, both as a company director and in her individual capacity, as tenant, has caused me and my family a great deal of unnecessary and unwarranted stress, distress, and, expense. Her behaviour has cast a shadow over my home.” of Mrs Alexander that she is an individual “standing up against the tyranny of a majority” the majority being the other nine tenants of Willow Court. If and to the extent that this is alleged on behalf of Mrs Alexander, both as a company director and in her individual capacity, as tenant, has caused me and my family a great deal of unnecessary and unwarranted stress, distress, and, expense. Her behaviour has cast a shadow over my home.”
“… [the Company] has a total share capital of 100 divided into 100 shares of which the four Claimants have 40 shares or 10 shares each. As to the remaining 60 shares, while the Defendant claims to be entitled to the entirety of that 60 shareholding, the Claimants maintain that the Defendant is entitled to 50 only of those shares. The parties’ relevant position in relation to the remaining disputed 10 shares is explained below. If (as will be asserted by the Claimants) that dispute is resolved in favour of Mr Shah of flat 5 Willow Court, those 10 shares it is submitted should be ordered to be transferred to him with the result that the Defendant will be able to show only a 50% holding in the Company with the remaining 50% being held by the Claimants and Mr Shah, i.e. deadlock. That is the first of the applications made herein for declaratory relief.”
“After Mr & Mrs Budhdev sold Flat 5 to Mr Shah, neither the Budhdevs nor Mr Shah sent a transfer certificate or a share certificate nor any letter requesting the transfer. Nor did Mr Shah respond to two letters I sent to him concerning the matter. I therefore acquired the shares for£1,750 which I had paid to the Company. The shares were not offered to the other shareholders because they already owed money to the Company for their share of the costs incurred in running the Company, which they refused to pay.”
“6. By letter dated26th November 2013 the Claimants’ solicitors wrote to Mrs Alexander and gave her notice that the Requisitionists, namely the Claimants, intended to requisition a meeting to appoint directors of the Company, in accordance with Article 15 of the Articles of the Company at a meeting to be convened for that purpose on the10th December 2013 as detailed in the notice of meeting and agenda for the meeting on the10th December 2013 . 7. Mrs Alexander was also requested to provide, by return, either reasonable facilities for inspection, or copies of, the current Register of Members of the Company as previously requested in correspondence with her former solicitors, Forsters, and repeated in a letter to Mrs Alexander dated22/01/2014 . The letter dated the26th November 2013 indicated that, to the extent that it may become necessary to do so, the Claimants would make application to court for an order by to enforce Article 15 and for an order pursuant tosection 117(5) of the Companies Act 2006 , and such other consequential relief, including costs, as may be appropriate to the claim. 8. Accordingly, the Claimants claim relief in the following terms … 8.2 A declaration that the Defendant’s refusal to consent (at an extraordinary general meeting (EGM) of the Company convened by the Claimants pursuant tosection 303 of the Companies Act 2006 , which meeting was held on10 December 2013 ) to the appointment of the Claimants and each of them as directors (the Claimants and each of them being members of the Company) pursuant to Article 15 of the Company’s Memorandum and Articles of Association, is unreasonable; alternatively, that the conditions attached to that refusal, subsequently notified to the Claimants in March 2014 are unreasonable; and, that the Claimants are entitled to lawfully requisition such a meeting without regard to the conditions asserted by the Defendant; and, to appoint the Claimants as the said directors in accordance with Article 15, aforesaid.” 8.2 A declaration that the Defendant’s refusal to consent (at an extraordinary general meeting (EGM) of the Company convened by the Claimants pursuant tosection 303 of the Companies Act 2006 , which meeting was held on10 December 2013 ) to the appointment of the Claimants and each of them as directors (the Claimants and each of them being members of the Company) pursuant to Article 15 of the Company’s Memorandum and Articles of Association, is unreasonable; alternatively, that the conditions attached to that refusal, subsequently notified to the Claimants in March 2014 are unreasonable; and, that the Claimants are entitled to lawfully requisition such a meeting without regard to the conditions asserted by the Defendant; and, to appoint the Claimants as the said directors in accordance with Article 15, aforesaid.”
“We consider that there are a number of issues that need to be resolved both in relation to the Company and also the on-going management of Willow Court. It appears that the best and most cost effective way to consider and resolve all of these matters is for the parties to agree to mediate”
“We are well aware that this dispute has been on-going for a number of years. Therefore, we do hope that the parties can agree to proceed to a mediation in an effort to resolve all outstanding matters and to provide a platform for future relations”
“When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to ‘what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean’ … And it does so by focussing on the meaning of the relevant words … in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party's intentions.”
“Articles of association are commercial documents. They should not be interpreted as meticulously as, e.g. conveyances. In interpreting them, the maxim ut res magis valeat quam pereat should be applied which, in the words of Vaisey J, “directs us to validate if possible.”
“I think that the articles of association of the company should be regarded as a business document and should be construed so as to give them reasonable business efficacy, where a construction tending to that result is admissible on the language of the articles, in preference to a result which would or might prove unworkable. …””
“Whatever it means, it has always meant what it means. A contract cannot mean one thing when it is made and another thing following court proceedings. Nor, in my judgment, can it mean one thing to some people (e.g. the parties to it) and another thing to others who might be affected by it. … We are not, in my judgment, seeking to ascertain “what the parties intended to agree” but what the instrument means.”
“21. It follows that in every case in which it is said that some provision ought to be implied in an instrument, the question for the court is whether such a provision would spell out in express words what the instrument, read against the relevant background, would reasonably be understood to mean. It will be noticed from Lord Pearson’s speech [i.e. in Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board[1973] 1 WLR 601 , at 609] that this question can be reformulated in various ways which a court may find helpful in providing an answer – the implied term must "go without saying", it must be "necessary to give business efficacy to the contract" and so on – but these are not in the Board's opinion to be treated as different or additional tests. There is only one question: is that what the instrument, read as a whole against the relevant background, would reasonably be understood to mean?... 26. In BP Refinery (Westernport) Pty Ltd v Shire of Hastings(1977) 180 CLR 266 , 282-283 Lord Simon of Glaisdale, giving the advice of the majority of the Board, said that it was "not … necessary to review exhaustively the authorities on the implication of a term in a contract" but that the following conditions ("which may overlap") must be satisfied: "(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying' (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract". 27. The Board considers that this list is best regarded, not as series of independent tests which must each be surmounted, but rather as a collection of different ways in which judges have tried to express the central idea that the proposed implied term must spell out what the contract actually means, or in which they have explained why they did not think that it did so. The Board has already discussed the significance of "necessary to give business efficacy" and "goes without saying". As for the other formulations, the fact that the proposed implied term would be inequitable or unreasonable, or contradict what the parties have expressly said, or is incapable of clear expression, are all good reasons for saying that a reasonable man would not have understood that to be what the instrument meant.”
“In my judgment, the judicial observations so far considered represent a clear, consistent and principled approach. It could be dangerous to reformulate the principles, but I would add six comments on the summary given by Lord Simon in BP Refinery as extended by Sir Thomas Bingham in Philips and exemplified in The APJ Priti. First, in Equitable Life Assurance Society v Hyman[2002] 1 AC 408 , 459, Lord Steyn rightly observed that the implication of a term was "not critically dependent on proof of an actual intention of the parties" when negotiating the contract. If one approaches the question by reference to what the parties would have agreed, one is not strictly concerned with the hypothetical answer of the actual parties, but with that of notional reasonable people in the position of the parties at the time at which they were contracting. Secondly, a term should not be implied into a detailed commercial contract merely because it appears fair or merely because one considers that the parties would have agreed it if it had been suggested to them. Those are necessary but not sufficient grounds for including a term. However, and thirdly, it is questionable whether Lord Simon's first requirement, reasonableness and equitableness, will usually, if ever, add anything: if a term satisfies the other requirements, it is hard to think that it would not be reasonable and equitable. Fourthly, as Lord Hoffmann I think suggested in Attorney General of Belize v Belize Telecom Ltd[2009] 1 WLR 1988 , para 27, although Lord Simon's requirements are otherwise cumulative, I would accept that business necessity and obviousness, his second and third requirements, can be alternatives in the sense that only one of them needs to be satisfied, although I suspect that in practice it would be a rare case where only one of those two requirements would be satisfied. Fifthly, if one approaches the issue by reference to the officious bystander, it is "vital to formulate the question to be posed by [him] with the utmost care", to quote from Lewison, The Interpretation of Contracts 5th ed (2011), para 6.09. Sixthly, necessity for business efficacy involves a value judgment. It is rightly common ground on this appeal that the test is not one of "absolute necessity", not least because the necessity is judged by reference to business efficacy. It may well be that a more helpful way of putting Lord Simon's second requirement is, as suggested by Lord Sumption in argument, that a term can only be implied if, without the term, the contract would lack commercial or practical coherence.”
“(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. (2). …Subject to the requirement that it should have been reasonably available to the parties and to the exception [that the law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent], it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.” 112.Palmer states at para 2.1115: “Although the courts’ approach to the construction of the words used in the articles of association may be a liberal one, that liberality does not extend to the implication of terms into the articles, where such implication is not derived purely from a consideration of the language used in the articles. On the contrary, an implication based on a consideration of extrinsic evidence, in order to give the articles business efficacy, is not permissible. This is because the articles are a statutory contract which is registered and upon which potential shareholders are entitled to rely in its registered form. For the same reason it is not possible to have the articles rectified. It is, however, permissible for a court to imply a term into articles of association in order to give business efficacy to those articles.”
“… the cases establish that (a) there is no absolute prohibition on considering extrinsic material for the purpose of interpreting the articles of association of a company; (b) however, the admissible background for the purposes of construction is limited to what any reader of the articles would reasonably be supposed to know; and (c) in contrast, an implication based on extrinsic evidence of which only a limited number of people would have known is impermissible.”
“A declaration that the Claimants and each of them are entitled to be appointed a Director of the Company in accordance with the said Articles of Association”
“The fact that a pleading had been amended could sometimes affect the orders for costs which the court would make at trial: “As a general rule, where a plaintiff makes a late amendment, as here, which substantially alters the case the defendant has to meet and without which the action will fail, the defendant is entitled to the costs of the action down to the date of the amendment” (per Stuart-Smith L.J. in Beoco Ltd v Alfa Laval Co Ltd [1995] Q.B. 137). However, the decision whether to make such an order for costs is sometimes best left for consideration by the court post-trial; at the amendment stage it may not be possible to determine the viability of the unamended case (Chadwickv Hollingsworth (No.2)[2010] EWHC 2718 (QB) ). In Begum v Birmingham City Council[2015] EWCA Civ 386 , the claim originally raised causes of action in negligence and misrepresentation only. Some twelve months before trial the claim was amended to allege also a breach of statutory duty. At trial the claimant prevailed as to the amended claim only and the trial judge awarded the costs prior to amendment to the defendants. This part of the trial judge’s order was reversed on appeal: the pleaded claims for negligence, misrepresentation and breach of statutory duty were merely different labels applied to the same underlying facts. The case the defendants had to meet was essentially the same before and after the claimant’s amendment, unlike the position in Beoco Ltd v Alfa Laval Co Ltd [1995] Q.B. 137where the claimant’s late amendment had substantially altered the case the defendant had to meet and the defendant had been prejudiced by a lack of opportunity to make settlement offers (i.e. a payment into court). In Begumthe costs prior to amendment were awarded to the claimant limited to 85 per cent to take account of the fact that pursuing the original, unsuccessful, claims had increased her costs overall. In Gold v Mincoff Science & Gold[2004] EWHC 2036 , Ch, the claimant made an amendment at trial (in reply to a limitation defence, which reply the defendants had anticipated some months earlier when making offers to settle): had the amendment been made earlier, the claimant would have been awarded 85 per cent of his costs; because of the real possibility that the late amendment had prejudiced the defendants, Neuberger J. awarded the claimant only 62.5 per cent of his costs up to the date of the amendment and 85 per cent thereafter.”
“5 In 1997 I identified the opportunity to purchase the freehold of the Block. I made all the arrangements with the solicitors and agents. It was agreed that the shareholders would keep the ground rent and income relating to their own flats — and as I had bought the extra 50 shares which none of the others wanted I would keep the ground rent and income relating to the other flats whose owners did not become shareholders. I now understand that this may seem unorthodox, but that is the agreement we all reached. We all signed a document recording that agreement which appears at page 1 of RA1. 6 From the outset it was agreed between me and the other shareholders in the Company that I should run the Company on my own. They were not interested in running the Company and, because I had 60% of it and the right to collect ground rent from those who were not members, it had the largest and most direct stake. We also signed a letter in May 1999 to this effect which was sent to Mr Lemer of Arthur & Co so that he would act on my instructions — see pages 2 and 3 of RA1. 7 Since the acquisition of the freehold in 1997 until now I have run the Company virtually on my own. I did have assistance from a company secretary at the outset until about 2000. The day-to-day expenses were minimal and were met by the ground rent of the communal parts. If there was any shortfall I paid it myself. There was never any difficulty with this arrangement until around 2009, after the issues of breach of covenant and forfeiture had been raised by me, when the Claimants or their predecessors started to ask me to appoint them as directors. For the reasons set out below I do not think that the Claimants are entitled to be directors nor do I want them to be directors because I think that would [not] be in the Company’s best interests. I have always relied upon the agreements made in 1997 and 1999 and the understanding that there was between me and the shareholders at that time that I would, and was entitled to, run the Company. 8 When, at my suggestion, the shareholders each decided to extend our own leases to 999 years it was again agreed, as a repetition of the agreement and understanding we had previously had, that each shareholder would extend their own lease without a payment but that I would get the payment in respect of any of the other leases whose owners were not shareholders. These leases are now down to 69 years and the payment which would be due to me on their extension is increasing.”
“I confirm that I will NOT sell my shares of the Company to Miss S. Devani”
“There was no evidence given to the effect that any of these discussions had taken place after the acquisition … of the freehold by the Company, or at any time after those involved in the debate had become members and/or shareholders, or that agreement had been reached after the incorporation of the Company and/or prior to the acquisition of the freehold. There had been no ratification 157. by directors. There was no evidence produced or given by Mrs Alexander as to any concluded agreement prior to the first meeting of the Company on the16th July 1997 ”
“The next document which she received was a circular letter of9th February 2007 headed "Freehold Purchase Update". Copies of this letter were sent to each of the tenants who had previously expressed an interest in participating in the purchase of the "freehold". By this time events had moved on. The Residents' Association had set up the respondent company ("the Company") to acquire the reversion and, if successful, to act as the managing agent for the block. Mr Tibbett was one of the first directors and Mr Stavronidis became the company secretary. The 9th February letter (although in the name of the Residents' Association) was sent with the authority of Mr Tibbett and the other directors and they accept that the Company is responsible for its contents.”
“No business shall be transacted at any meeting unless a quorum is present. Two persons entitled to vote upon the business to be transacted, each being amember or a proxy for a member or a duly authorised representative of a corporation, shall be a quorum.” (his emphasis) “On a poll votes may be given either personally or by proxy. A member may appoint more than one proxy to attend on the same occasion.” 173.Next, he referred tosection 324 of the Companies Act 2006 : “Rights to appoint proxies (1) A member of a company is entitled to appoint another person as his proxy to exercise all or any of his rights to attend and to speak and vote at a meeting of the company. (2) In the case of a company having a share capital, a member may appoint more than one proxy in relation to a meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him, or (as the case may be) to a different£10 , or multiple of£10 , of stock held by him.”
“It is not suggested that the shareholder is not entitled to attend the meeting, but it is said that he cannot vote personally at it after he has given a proxy unless that proxy has been duly revoked before the meeting in accordance with article 76.” “The learned judge was, I think, clearly right in holding that none of these considerations apply when a share-holder, after having given a proxy, comes to a meeting himself and exercises his right to vote in person. In such a case the proxy cannot be used and there is no necessity to inquire whether it was validly given in the first instance or whether it has since been revoked. In my opinion therefore article 76 has no application to the case where a shareholder attends the meeting and votes in person.”
“It was no doubt contemplated by article 76 that the proxy was to be revoked by notice in writing, but when a shareholder appears at the meeting and says he prefers to vote in person, he is not revoking the proxy previously given, but doing an act which does away with the necessity of the proxy ever being exercised at all. A proxy is always subject to an understanding that the shareholder giving it does not elect to give his vote in person and when he in fact gives a vote in person he is not revoking the proxy but taking a step which obviates the necessity of the proxy being used at all.”