Kevin Geoffrey Dodson & Anor. v Christopher Richard Shield & Ors. [2022] EWHC 1751 (Ch)

“Each of the parties to this agreement hereby undertakes that, in the event that IAEP is unable to purchase all of the Lines owned by [SES], then during the Option Period the parties will enter into good faith negotiations to agree an alternative mechanism or strategy for selling the remaining Lines either to IAEP or some other third party buyer.”

“4.5 The Seller will use reasonable endeavours to obtain an assignable licence or assignment of the NG4 IP Rights from BMW and/or assist the Buyer in negotiations for such an assignment or licence from BMW. In the event that the Seller is able to obtain an assignment or assignable licence of the NG4 IP Rights, the Seller shall licence, assign or sell the NG4 IP Rights to the Buyer at the same price as the Seller acquired the NG4 IP Rights.”

“The Exclusivity Fee shall become immediately repayable to the Buyer: (a) in the event of any breach by the Seller and/or [SES] or any of their Connected Persons of any of the [exclusivity and confidentiality] provisions… hereof during the Exclusivity Period; or (b) if the Seller is unable to reasonably demonstrate by the date on which the Exclusivity Period expires that it has title to and is able to deliver the equipment comprised in Lines 4, 5 and 6 including the Technical Information (other than any equipment which is to be retained by BMW and for which the Seller will provide a replacement).” (a) in the event of any breach by the Seller and/or [SES] or any of their Connected Persons of any of the [exclusivity and confidentiality] provisions… hereof during the Exclusivity Period; or (b) if the Seller is unable to reasonably demonstrate by the date on which the Exclusivity Period expires that it has title to and is able to deliver the equipment comprised in Lines 4, 5 and 6 including the Technical Information (other than any equipment which is to be retained by BMW and for which the Seller will provide a replacement).”

“24. It was around June/July 2013 that I had reason to have some concern. I had gone into the Oldbury office and was in the makeshift changing room area collecting some tools. The area that I was in was separated from a small conference room by a glass partition. I didn’t go in to eavesdrop but when I was collecting the items I needed, I overheard a conversation between Dave Cotterill, Neil Collins and another gentleman (who shortly afterwards I came to understand was Steve Murphy). I had not seen or met Steve Murphy previously. It was not a pleasant conversation to overhear. I heard Dave Cotterill call my dad a c**t. It was upsetting to hear but I stayed to listen to more of the conversation. Dave was speaking to Steve Murphy — it was a slanderous onslaught towards my dad. The basis of what they were saying was what Steve Murphy’s role would be as commercial director (which was my dad’s role). Dave went onto explain the details of the Project and the Turnkey in China. All I can recollect from the conversation about my dad was that Dave Cotterill was getting very nasty and heated — he called him various names — it was a character assassination as to why they wanted Steve instead. I didn’t have any inclination that there was anything wrong before hearing that conversation. My dad and Dave had been close and when I saw them together, they seemed close, even days before. Dave was really nice to me and so it was a real shock. I didn’t hear why they wanted my dad out. I didn’t hear anything in terms of getting me out. From the time that I had started at IAEP, everything seemed perfect and everyone got on. When the funding stopped in around May, that’s when things started to go wrong but I didn’t know why that was.”

“i) that IAEP/Shield Engineering had acquired legal title to the whole of the Plant, i.e. all of lines 1-6; and/or ii) that IAEP/Shield Engineering otherwise had the ability to deal with and dispose of legal title to the whole of the Plant; and/or iii) that IAEP/Shield Engineering had acquired, or had the ability to transfer, the IPR for the NG4 engine range; and/or iv) that IAEP/Shield Engineering had reached an agreement with BMW for the acquisition of the IPR and (b) expected to acquire the same by July 2013.”

“In September 2012 we agreed a structure for IAEP and its funding by Shield [i.e. SES]. In that proposal we were talking about €2,550,000 (c£2.1m) for lines 1,2&3 plus a loan facility of up to £1.5m. Giving a total of c£3.6m of funding. IAEP has drawn down circa £1.5m of loan and Shield had funded circa c£4.1m directly. Total Shield funding being c£5.6m (c£2.0m over the original estimate); We envisaged a project where a purchaser would have been found and a deposit been paid by December 2012. As of 1st November 2013 no successful sale completed. We need to accept there have been errors in strategy along the way and that the project needs a greater focus to achieve a successful result. It is also, however, reasonable to conclude that the primary reason for the failure to sell is largely as a result of the inability to control lines 4-6 (predominately line 6). It is clear the project is taking longer than originally envisaged and will require significantly increased funding to achieve a successful project. Further to the above the current legal situation with [Infinity Max] is adding cost and absorbing a lot of time to deal with and there is the possibility of further disruption as a result of this situation. There is also some concern about the ability to definitely conclude a successful sale if lines 4-6 cannot be brought within the scope of the project in a reasonable period of time. All these factors have dramatically increased the risk to [SES] and this has resulted in the requirement to alter the structure and organisation of the project.”

“IAEP to be retained and have an option to sell on the asset purchase rights to a new company ‘IAEP 2’. For this it would receive a £1m fee only if a profitable sale figure is achieved ie. Shield’s doubled up costs and interest is repaid). This way all of the original shareholders will benefit and receive a fair reward for their involvement even if they are not directly involved going forwards. IAEP 2 to be set up with the following arrangements: • KEY to be removed from the ongoing costs as it would appear that KEY’s specific skills are not required at this time. Accounts & financial admin to be transferred to Cattaneo who will find a cost effective day to day solution for the minimal level of admin that exists. No shareholding for KEY in IAEP 2. [Mr Dodson] to commit to supporting [Infinity Max] legal situation. On this basis the excess invoices charged are not to be repaid. IAEP 2 to cover costs of concluding Longbridge but not the business rates — this is a KEY issue and in light of the lease transfer and shared costs with KEY this is reasonable. In the event KEY introduces the final buyer to the project then agent fees to be agreed prior to any [Heads of Terms] with the buyer. • Steve Murphy to manage sales at an agreed monthly cost of £6k. Steve also to be Managing Director of IAEP 2 and responsible for controlling the project through to a successful sale including management of subcontract work and costs. In the event that no profit is made after Shield's costs (see above) Shield to pay a fair contribution from its uplift (if applicable). • Cattaneo to remain involved and if acceptable to remain on its current fee-free arrangements until a successful sale is concluded. In the event that no profit is made after Shield's costs (see above) Shield to pay a fair contribution from its uplift (if applicable). • DNA team involved moving forwards to complete the Due Diligence and assist Steve Murphy and Shield/Cattaneo in managing the project. Propose agreed hourly rates of £40p/h for [Mr Cotterill], £35 p/h for [Mr Coulborn] and £30p/h for other support staff (manual workers to be paid as current). Hours to be confirmed in advance and only as required to fulfil company requirements. Outstanding invoices to be paid in full up to 1st October. • Nic Coulborn. To remain involved at the existing £1000 per week level.”

“currently estimated by BMW as being end March/Early April 2014. As for confirming timing for acquisition this MAY be April/May 2014 but again at this time it is still to be confirmed and without guarantee.”

“you keep us up to speed with progress (or not) in China. Did you have a chance to forward documentation to the customers in particular BAIC? I think any feedback or likely communication that may be happening in China with IM is important to understand we want to get the pressure back onto Neil [Sampson].”

“Sorry if there has been any confusion but I believe you are aware from our discussion the other day that the longstop date in the IAEP asset option is 1.1.14 (and there were other conditions) that mean the asset sale is now a Shield project, Shield owning all of the assets purchased and being owed c £1.5m by IAEP as well as having committed a significant amount of additional cost outside of IAEP since the summer. Chris [Shield] has made a proposal regarding making a payment into IAEP for the shareholders to benefit from should Shield achieve a successful sale (although this has not been formally agreed by any party) and as such Shield are now running with the sale process and have decided to appoint Steve Murphy to handle that process for them (Steve has already demonstrated considerable knowledge of the likely buyers, the technical requirements for an engine line and has been innovative in his approach to a number of the issues being faced), again apologies if that was not clear the other day when Steve joined the meeting at Shakespeares.”

“I am also greatly concerned with the lack of communication and reporting as a whole within IAEP which has been mentioned many times over the past few months and astounded to be told that IAEP has now sub-contracted out the services associated to sales to which I was not consulted and most certainly do not approve.”

“Can we remove Kevin Dodson, Murry Dodson and John Rock as directors and shareholders in [IAEP]?”

“Unfortunately under the terms of the [SHA] the Shareholders have the right to be appointed as directors of the company, so if we remove Kevin, Murry and John then they can request to be appointed.”

“[SES] is pleased with the progress made this morning… As Mr Cattaneo explained…, please can you set out in writing the proposal mentioned by your Mr Sampson, namely that (a) your client now wishes to purse an asset deal with [SES]; and (b) any turnkey delivery of the project will be pursued by your client separately and with a third party and not through our client.”

“In our project general discussions with Tim and Chunan we touched on the site survey and Civil design construction works carried out by Chunan’s company China SANAN Construction Corporation on behalf of [Infinity Max]. I asked if the works carried out to date would have cost as much as £3.85 million (the amount stated within the [Neil Sampson] item of expenses breakdown). Tim relayed this to Chunan and it was deemed laughable as Chunan confirmed his company had carried out the works, which were only preliminary, that he had received no payment from [Infinity Max] and had basically funded the works through China Sanan… All this of course to remain strictly confidential for our internal discussions further down the line. I have not copied Kevin in for obvious reasons.”

“[Th]ere was a business proposition which ultimately failed sadly. There is now a revised situation, Shield is taking control of its assets which obviously it needs to and if it can it will try and do a deal but there clearly is a point well into last year where IAEP wasn’t going to be able to conclude that. I think despite all of our best efforts. … Let’s be clear because I think it’s, with due respect it is a little bit easy to say well if there is a deal it should go through IAEP or whatever. We don’t know there is going to be a deal. We are not going to do a deal. We don’t know if we are going to lose money on it or make money on it. We don’t know if we are going to get nailed on the litigation for £5 million or £6 million plus legal fees. There are lots of things but all the liabilities sit here effectively and with due respect they don’t largely sit outside of that area because of the reality of the scale of the situation so if someone says well I think it should through IAEP it should go through where it should go through that is the best situation for the project. Now if, if in theory, yes it could be IAEP… I made it quite clear I have no personal issue with anyone but we have got a job to do and so far it’s not been very successful. We have got ourselves in a mess and we all take responsibility for that including me but it is very easy to say well I think this when someone hasn’t put £6 million or £7 million of their money yet. In a different man’s shoes it is a very, very different perspective which is we will do what is right for the project but if that means people and if that means it goes to IAEP or goes to Timbuctoo Limited that is where it will go. At this point in time we are dealing with this. Now the easy thing is Shield may say I don’t want to put in £31,000, what is the point. It’s £31,000, it buys a lot of stuff. So forget that and let IAEP go its way. It might say and this is the purpose for today’s discussion I think largely it might say well I’ve got the £31,000 in but I want to own the company and be done with all this bollocks. I can’t be doing with it. We might say well let’s find a way between the various assets and liabilities and all the other stuff that is being around to see if we can even stevens it and then see what happens in the future but there has to be a resolution of one form or another and that is where I am coming from.”

“• I did not collect documentation relating to any of the lines on behalf of IAEP. • I used my own connections at BMW to acquire the documentation from BMW. • I attach correspondence from BMW dated 22.10.13 setting out that Key Technical Solutions Limited was given permission to remove the obsolete documentation from their BMW Plant, Hams Hall associated to the Crankshaft, Cylinder Head and Cylinder Block obsolete machine tools… • Title to the documentation for all lines rests with Key Technical Solutions Limited. • Stuckenberger did not buy the documentation from BMW. Stuckenberger bought the lines as scrap from BMW. As a scrap dealer Stuckenberger would not have needed the documentation. • The documentation was not part of the deal between Stuckenberger and PAGUS. There is no reference to the documentation in the ‘Notification of Change of Ownership’ dated 25.06.12 and the ‘Notification of selling Rights’ dated 21.01.13. • The documentation was not part of the deal between PAGUS and Shield. I refer to the Invoice from PAGUS to Shield dated 24.08.2012 (Crankshaft), 11.09.2012 (Cylinder Head) and 28.02.13 (Cylinder Block).”

“We’ve achieved the lot, Kev… This project is going over the line.”

“It’s time we all had something out of the project.”

“1. You mentioned that the project is progressing with a customer contract likely signed within 3 to 4 months however you were not able to confirm if [IAEP] or another company would be the contracted suppliers and mentioned potentially DNA or CGI as examples, although I assume that proposed contract documentation will have been issued between parties at this stage. Please clarify the position. 2. You mentioned that the deal that is to be done is the same as the Full Turnkey Project, as originally proposed by IAEP Ltd in early 2013. It is to include all manufacturing lines and IPR. If the IPR is to be sold it must already have been purchased and the buyer therefore known to you. Again, please clarify the position. 3. Speaking personally, I stated that I did not object to any company progressing the project, however, I was clear that IAEP was, in my opinion and for the reasons that I have set out previously, the only company able to currently supply the project. For any other company to take over from IAEP the correct commercial and legal processes would need to be implemented. This should be a straightforward process and does not need to be contentious but at the moment this has not been agreed or documented.”

“A member of a company may apply to the court by petition for an order under this Part on the ground— (a) that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or (b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial.” (a) that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or (b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial.”

“In the case of [what is now section 994], the background has the following two features. First, a company is an association of persons for an economic purpose, usually entered into with legal advice and some degree of formality. The terms of the association are contained in the articles of association and sometimes in collateral agreements between the shareholders. Thus the manner in which the affairs of the company may be conducted is closely regulated by rules to which the shareholders have agreed. Secondly, company law has developed seamlessly from the law of partnership, which was treated by equity, like the Roman societas, as a contract of good faith. One of the traditional roles of equity, as a separate jurisdiction, was to restrain the exercise of strict legal rights in certain relationships in which it considered that this would be contrary to good faith. These principles have, with appropriate modification, been carried over into company law. The first of these two features leads to the conclusion that a member of a company will not ordinarily be entitled to complain of unfairness unless there has been some breach of the terms on which he agreed that the affairs of the company should be conducted. But the second leads to the conclusion that there will be cases in which equitable considerations make it unfair for those conducting the affairs of the company to rely upon their strict legal powers. Thus unfairness may consist in a breach of the rules or in using the rules in a manner which equity would regard as contrary to good faith… I think that one useful cross-check in a case like this is to ask whether the exercise of the power in question would be contrary to what the parties, by words or conduct, have actually agreed. Would it conflict with the promises which they appear to have exchanged? In Blisset v Daniel (1853) 10 Hare 493 the limits were found in the ‘general meaning’ of the partnership articles themselves. In a quasi-partnership company, they will usually be found in the understandings between the members at the time they entered into association. But there may be later promises, by words or conduct, which it would be unfair to allow a member to ignore. Nor is it necessary that such promises should be independently enforceable as a matter of contract. A promise may be binding as a matter of justice and equity although for one reason or another (for example, because in favour of a third party) it would not be enforceable in law.”

“(vi) [I]t follows that it will not ordinarily be unfair for the affairs of a company to be conducted in accordance with the provisions of its articles or any other relevant and legally enforceable agreement, unless it would be inequitable for those agreements to be enforced in the particular circumstances under consideration. Unfairness may, to use Lord Hoffmann’s words, ‘consist in a breach of the rules or in using rules in a manner which equity would regard as contrary to good faith’; the conduct need not therefore be unlawful, but it must be inequitable. Although it is impossible to provide an exhaustive definition of the circumstances in which the application of equitable principles would render it unjust for a party to insist on his strict legal rights, those principles are to be applied according to settled and established equitable rules, whether arising independently of the statutory remedy or borrowed from the law of partnership under the remedy in appropriate circumstances labelled ‘quasi-partnerships’, and not by reference to some indefinite notion of fairness; (vii) the norm is that relations between shareholders are purely commercial and subject to no equitable restraints, whether borrowed from the law of partnership or not. It is an acutely fact-sensitive exercise to determine whether and if so what equitable constraints will apply in what are labelled quasi-partnerships, the hallmarks of which are: (i) an association formed or continued on the basis of a personal relationship, involving mutual confidence; (ii) an agreement, or understanding, that all, or some (for there may be ‘sleeping’ members), of the shareholders shall participate in the conduct of the business; (iii) restriction upon the transfer of the members’ interest in the company—so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.”

“66. The parties to the Option Agreement are the Company and Shield. 67. By clause 7.2 of the Option Agreement the Company and Shield undertook to enter into good faith negotiations during the Option Period ‘to agree an alternative mechanism or strategy for selling the remaining Lines either to IAEP or some other third party buyer’ in the event that the Company was unable to purchase all of the lines owned by Shield. Once the Option Period had expired i.e. from 2nd January 2014 there was no obligation to enter into any such negotiations. 68. As set out above, Shield developed a proposal, which was provided to Kevin Dodson, David Cotterill and Charles Cattaneo, and Chris Shield suggested a board meeting to consider the proposal, any other proposals and agree a way forward. 69. The proposal was discussed at a meeting between David Cotterill, Nic Coulborn, Kevin Dodson, John Rock and Murry Dodson on 28th November 2013. No alternative mechanism or strategy for selling the remaining lines either to the Company or some other third party buyer was suggested. 70. By letter dated 4th December 2013 from Kevin Dodson (but said to be on behalf of John Rock and Murry Dodson as well) to Chris Shield and the Company, Kevin Dodson asserted that the Shield proposal was not acceptable to them but proposed, in the alternative, that there be payment of outstanding invoices to Key up to 18th November 2013 and an agreement of a final payment for their shares upon successful completion of the sale of the lines and/or turnkey project. No alternative mechanism or strategy for selling the remaining lines either to the Company or some other third party buyer was suggested. 71. Even now the Petitioners are unable to advance an alternative mechanism or strategy for selling the remaining lines either to the Company or identify what different outcome would have been achieved if further negotiations had taken place. 72, In any event, in light of the above, the Petitioners clearly acquiesced in the conduct now complained of in respect of a breach of clause 7.2 and therefore the Petitioners should be denied any relief in respect of this ground of conduct complained of. 73. Further or in the alternative, any breach of clause 7.2 of the Option Agreement would be a breach of contract claim by the Company, which would be statute barred, pursuant to section 5 of the Limitation Act 1980, from 2nd January 2020 at the latest, being 6 years from the expiry of the Option Period. Whilst there is no limitation period for a section 994 claim, the courts will not allow stale claims. The Company would only have been allowed to bring proceedings against Shield for breach of clause 7.2 if issued prior to 2nd January 2020. Yet the Petition was presented on 2nd September 2020, 9 months after limitation expired for the Company’s claim. The Court should, by analogy, deny any relief in respect of this ground of conduct complained of.”

“[T]he best approach for a judge to adopt in the trial of a commercial case is… to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose — though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”

“We start by recalling that the judge read Leggatt J’s statements in Gestmin v Credit Suisse and Blue v Ashley [2017] EWHC 1928 (Comm) at paras [65]-[69] as an ‘admonition’ against placing any reliance at all on the recollections of witnesses. We consider that to have been a serious error in the present case for a number of reasons… Gestmin is not to be taken as laying down any general principle for the assessment of evidence. It is one of a line of distinguished judicial observations that emphasise the fallibility of human memory and the need to assess witness evidence in its proper place alongside contemporaneous documentary evidence and evidence upon which undoubted or probable reliance can be placed… But a proper awareness of the fallibility of memory does not relieve judges of the task of making findings of fact based upon all of the evidence. Heuristics or mental short cuts are no substitute for this essential judicial function. In particular, where a party’s sworn evidence is disbelieved, the court must say why that is; it cannot simply ignore the evidence.”

“Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth.”

“A …Nick Coulborn, as part of the decommissioning in the construction design management, went through the machines and picked up all the manuals. Q But they were not there in 2012. A There were there, sir. Yes, they were there. There’s pictures of them there, sir. Q Okay. A We’ve got hundreds and hundreds of thousands of pictures, sir, of BMW — taking the manuals from BMW. They’re not in this bundle. Q Well, nobody has ever seen those pictures other than the full archive — A Sir, I’ve got one in my case now, sir.”

“11. I refer to the ownership of the NG4 project technical documentation, which is a disputed issue in the proceedings. [Mr Dodson] has suggested this was separate to the machinery itself. This supply formed part of the sale of the equipment from Stuckenberger with eventual transfer to Shield as part of the Shield purchase. To facilitate this, I worked closely with BMW asset disposal manager Mr Joe Whitehouse to ensure the ‘full’ collection of technical documentation on behalf of Stuckenberger and ultimately Shield. 12. Following [Mr Dodson’s] unauthorised removal of part of the technical documents and in and around late August 2014 I met on BMW Hams Hall site with BMW production process manager Conrad Billingham prior to his departure to China to work at BMW China partners China Brilliance. Conrad apologised for being duped by [Mr Dodson] into releasing the technical documents and formally handed over a complete separate hard drive electronic copy to include the information within the technical documentation [Mr Dodson] had removed. This electronic copy complemented the first copy taken at shop floor level with each assembly machine station and transferred to the IAEP technical centre at Oldbury. The copy [Mr Dodson] removed was the BMW archive copy.”

“Throughout 2012 leading up to around July 2013 many questionable poor conduct matters were revealed regarding [Mr Dodson]. I became aware of this from Project and IAEP fellow directors David Cotterill and Nic Coulborn. These included 1) overpayment to KTS through inflated invoices, 2) [Mr Dodson’s] unauthorised IAEP bank withdrawal, 3) IAEP Longbridge office lease anomalies, 4) Indiscretions regarding a claim against IAEP by Infinity Max… those indiscretions being [Mr Dodson] having contact with opposing [Infinity Max] lawyer against other IAEP directors wishes.”

“Q. Okay. So let’s just go through the numbered points, overpayment to KTS through inflated invoices, yes? A. Mmhmm. Q. That’s what you were told? A. I was approached and discussed about the wage I was taking. Q. Approached by whom? A. I was approached by Dave Cotterill and Nic Coulborn. Q. When? A. We were — I can’t remember the actual year or the timing but we were at Oldbury and I was asked about the wage I was receiving, which I felt a bit odd. Then they reversed the question and told me the wage that was being drawn down for me, which was a lot higher than the wage I was actually getting myself. THE RECORDER: We have heard there were two rates, £35 an hour, and £45 an hour. Which were you being charged out as? A. £35 I think. THE RECORDER: I see. And your hourly rate — were you paid hourly or were you paid on a monthly basis? A. I was paid monthly. THE RECORDER: Monthly, but how did that compare to the hourly rate? A. It was working about £17 an hour. THE RECORDER: I see, but that’s what you were receiving in your hand or was that before tax? A. Yeah. [Indicating the former.] THE RECORDER: So you’ve got to add the tax onto the £17 and the national insurance. A. Which obviously was dealt with with KTS. THE RECORDER: Yes. And then why do you say Key shouldn’t have been allowed to put some profit margin on top? A. No, I understand there has to be a margin mark-up, but I thought it was considerably high…”

“The relationship with [Mr Dodson] also soured mid way through 2013. I remember that in July, [Mr Coulborn] brought to our attention that he thought [Mr Dodson] had been overcharging IAEP. [Mr Coulborn] had looked at Key’s invoicing to IAEP and identified that what Ocean ([Mr Coulborn’s] company) had billed Key was being marked up in Key’s invoices to IAEP. [Mr Coulborn] did some work with [Mr Cotterill] and reported back a significant level of overcharging into six figures. I recall that [Mr Cotterill] and [Mr Coulborn] had met with [Mr Dodson] in August a few days before we met with Rosenblatts in London and discussed the issue. [Mr Cotterill] and [Mr Coulborn] reported to [Mr Shield] and I that [Mr Dodson] had admitted the overcharging and I recall Key issued credit notes for just over £100,000 but as Key had already been paid, a significant balance remained owing from Key to IAEP. Subsequently in December 2013 [Mr Dodson], who was still able to control the bank account, made an unauthorised payment of just over £10,000 to Key. Once this had been discovered when I was looking at the bank account [Mr Dodson] confirmed that it was in respect of VAT on a Key invoice. He claimed to have submitted a payment request for authorisation and when he didn’t hear anything decided to make the payment anyway. Following on from this I along with [Mr Shield, Mr Cotterill and Mr Coulborn] lost trust in [Mr Dodson] and it was decided between us that I should take on the operation of the IAEP bank account along with [Mr Cotterill] and I should file VAT returns.”

“THE RECORDER: Do I take from what you’re saying that the archive library had some value to it but you in fact had most of the material already. Would that be a fair summary? A. Yes, my Lord, that’s correct, certainly correct.”

“The machines which had been scrapped, for want of a better word, on site, before we moved in, were machines which were very important to us, and that was the normalizing, the crankshaft normalizing oven, which is a very large piece of equipment, and the induction Harn, the crankshaft induction Harn machine. Mr Coulborn went to the lines under instruction of myself, verbal instruction, because we had many conversations, and I said, ‘Look, Nic, I need these manuals from the normalizing oven and from the induction Harn machine.’ Nic went around and sourced manuals from the process control engineers and maintenance departments to secure as many manuals as he could, bearing in mind that Mr Coulborn is not technically minded. So, he collected under my instruction as many manuals as he could put his hands on… [T]here was hundreds of manuals, hundreds. And that took a long time to sort. Q. But there was no guarantee that you got everything, was there? A. However, what transpired, if I may state, I’d say 95 to 98% of the manuals collected from the technical archive at BMW, we already had. There was some holes in the library, and that’s why I was pleased with Mr Dodson being able to have permission to collect the manuals on behalf of IAEP.”

“72. In any event, in light of the above, the Petitioners clearly acquiesced in the conduct now complained of in respect of a breach of clause 7.2 and therefore the Petitioners should be denied any relief in respect of this ground of conduct complained of. 73. Further or in the alternative, any breach of clause 7.2 of the Option Agreement would be a breach of contract claim by the Company, which would be statute barred, pursuant to section 5 of the Limitation Act 1980, from 2nd January 2020 at the latest, being 6 years from the expiry of the Option Period. Whilst there is no limitation period for a section 994 claim, the courts will not allow stale claims. The Company would only have been allowed to bring proceedings against Shield for breach of clause 7.2 if issued prior to 2nd January 2020. Yet the Petition was presented on 2nd September 2020, 9 months after limitation expired for the Company’s claim. The Court should, by analogy, deny any relief in respect of this ground of conduct complained of.”

“There is no limitation period under section 994 but the courts will not allow stale claims. If the Company had brought proceedings against the Booth directors to reclaim excessive remuneration, the claim would not have been allowed to go back beyond six years before proceedings were instituted. I therefore think there is force in the point that I should limit any remedy which I will afford the petitioners by analogy with that limitation period... But in my judgment there has been no acquiescence in the no-dividend policy such as to preclude this petition from proceeding. In particular, the omission to turn up at the AGM to complain does not amount to acceptance that the dividend policy is appropriate, nor does it involve any form of indication that a complaint about it will not be pursued.”