JMW Solicitors LLP & Ors v Injury Lawyers 4U Limited & Ors [2025] EWHC 1045 (Ch)

[2025] EWHC 1045 (Ch)

Case No BL-2024-MAN-000091

IN THE HIGH COURT OF JUSTICE

Venue BUSINESS AND PROPERTY COURTS IN MANCHESTER

BUSINESS LIST (Ch)

Venue Manchester Civil Justice Centre

1 Bridge Street West,

Venue Manchester M60 9DJ

Date 01/05/2025

Before

HHJ CAWSON KC

SITTING AS A JUDGE OF THE HIGH COURT

Between

JMW SOLICITORS LLPClaimants

RALLI LIMITEDClaimant

HOWE & CO SOLICITORSClaimant

INJURY LAWYERS 4U LIMITEDDefendants

JAMES MAXEYDefendant

DANIEL SLADEDefendant

David Lascelles and Stuart Sanders (instructed by Horwich Farrelly Limited) for Defendants

Paul Chaisty KC and Nick Taylor (Instructed by JMW Solicitors LLP) for Claimants

Hearing Hearing dates: 18 and 20 March 2025

Approved Judgment (No. 2)

This judgment was handed down remotely at 10.30am on 1 May 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

.............................

HHJ CAWSON KC SITTING AS A JUDGE OF THE HIGH COURT

HHJ CAWSON KC:

Should the proposed amendments be permitted? 32

[1]By an application dated 10 October 2024 (“the SJ Application”), the Defendants applied for reverse summary judgment pursuant to CPR 24.3 in respect of all the Claimants’ claims as set out in their Particulars of Claim. I heard the SJ Application on 13 November 2024 and determined it by the judgment that I handed down on 3 December 2024 (

[2024] EWHC 3103 (Ch)

) (“the First Judgment”).

[2]This judgment should be read together with the First Judgment. In this judgment, I adopt the definitions used in the First Judgment.

[3]For the reasons set out in the First Judgment, I determined that the Defendants were entitled to summary judgment on the Claimants’ claims based upon breach of clause 4.3 of the Supplemental Deed, the alleged Slot Price Differential Collateral Warranty, and estoppel by convention (“the Contract/Estoppel Claim”).

[4]As to the Claimants’ claims in respect of the validity of the appointment of Mr Maxey and Mr Slade as directors, the transfer of “A” shares to Mr Maxey, and hence the decision to remove the Slot Price Differential (“the Validity Claim”), I held that the Defendants should be granted summary judgment thereon unless the Claimants, within 14 days, issued an application to amend their Particulars of Claim, and then succeeded in obtaining permission to amend so as enable them to advance the unpleaded allegations that they had raised at the hearing on 13 November 2024. These allegations had been advanced in an unpleaded form at that hearing because the Claimants’ pleaded case on the Validity Claim was based on an incorrect assumption that the Defendants were relying upon amendments to the 2013 Articles that at one stage in correspondence it had been suggested they were relying upon to support their actions. However, as explained in the First Judgment, this pleaded case had become inapt in the light of the way that the Defendants sought to justify their actions for the purposes of the SJ Application, hence the need for the Claimants to change tack.

[5]On handing down the First Judgment, I directed that any application to amend should be heard at the same time as I dealt with other consequential matters arising from the First Judgment.

[6]On 16 December 2024, the Claimants filed an application to amend their Particulars of Claim (“the Amendment Application”), supported by the witness of Richard Powell (“Mr Powell”) dated 16 December 2024.

[7]In response to the Amendment Application, in addition to the evidence before me at the earlier hearing, the Defendants rely on: i) The third witness statement of Mr Maxey dated 13 November 2025 (“Maxey 3”). ii) The witness statement of Mr Slade dated 12 February 2025; iii) The witness statement of Ms Wilkinson dated 12 February 2025; iv) The witness statement of Mr Twambley dated 12 February 2025; and v) The fourth witness statement of Mr Maxey dated 12 February 2025 (“Maxey 4”).

[8]As at the previous hearing, David Lascelles appeared as Counsel on behalf of the Defendants, but on this occasion together with Stuart Sanders. Paul Chaisty KC and Nick Taylor again appeared on behalf of the Claimants. I am grateful to Counsel for their helpful written and oral submissions.

[9]This judgment determines the Amendment Application.

[10]The background leading up to the Amendment Application appears from the First Judgment.

[11]It is to be noted that the first named Claimant, Howe & Co., has discontinued its claim since I handed down the First Judgment.

[12]For the reasons set out below, I have concluded that the Amendment Application should be dismissed. The consequence of this is that the Defendants are entitled to reverse summary judgment on the whole of the Claimants’ claim.

The proposed amendments

[13]By the proposed amendments, the Claimants seek to challenge the removal of the Slot Price Differential on a number of grounds.

Messrs Maxey and Slade were not validly appointed directors

[14]Firstly, it is alleged that Messrs Maxey and Slade were not validly appointed directors by Mr Twambley because: i) The purported decision was taken by Mr Twambley and Ms Wilkinson at a Board Meeting, rather than by Mr Twambley alone in his capacity as an A shareholder; ii) Mr Twambley had no power to appoint two directors because he had already appointed two directors using his rights as an A Shareholder under Article 11.1 of the 2013 Articles.

[15]These allegations are set out in paragraphs 41F(1) and (2) of the draft Amended Particulars of Claim (“the APofC”) as follows:

“41F. Further or alternatively and in any event the appointments of the Second and Third Defendants as directors in the First Defendant were invalid and of no effect as: (1) The July 2023 Board Minute upon which the Defendants seek to rely provides atparagraph 6.2 that the appointment of the Second and Third Defendants was a decision taken by the First Defendant (through resolution of its Board).

(s) of the majority of “A”

Shares, which at that time was Mr Twambley; (2) As a matter of construction of Article 11.1 of the 2013 Articles, the entitlement of the “A” shareholder to appoint directors is an entitlement to appoint:

“two persons to be Directors of the Company.”

At the time of the purported appointment of the Second and Third Defendants as directors the holder of the “A” shares (Mr Twambley) had already exhausted his power to appoint two persons to be directors of the First Defendant to serve at any one time (as set out in paragraph 8(5) above). Accordingly he had no power or authority to appoint any further directors.” (1) The July 2023 Board Minute upon which the Defendants seek to rely provides atparagraph 6.2 that the appointment of the Second and Third Defendants was a decision taken by the First Defendant (through resolution of its Board). The First Defendant (acting by its Board or otherwise) had no such power – pursuant to Article 11.1 the power to appoint directors of the First Defendant was vested in the holder(s) of the majority of “A” Shares, which at that time was Mr Twambley; (2) As a matter of construction of Article 11.1 of the 2013 Articles, the entitlement of the “A” shareholder to appoint directors is an entitlement to appoint:

“two persons to be Directors of the Company.”

The transferof the A Shares to Mr Maxey was invalid

[16]Secondly, it is alleged that the transferof the A Shares to Mr Maxey was invalid and/or otherwise gives rise to claims by the Claimants as: i) Mr Maxey was not a partner of Amelans because at the time that A Shares were purportedly transferred to him, Amelans had been acquired by Express Solicitors and had ceased to exist. This case is pleaded as follows in paragraph 41B(1)-(2) of the APofC; “41B The transfer of “A” shares to the Second Defendant was ultra vires, invalid and/or unlawful and of no effect as:(1) Upon acquisition by Express Solicitors, Amelans (as defined in the 2013 Articles and being a partnership under the Partnership Act 1890) is rebuttably presumed to have dissolved as a matter of law (whether pursuant to section 32 of the Partnership Act 1980 or otherwise);

(2) Accordingly, following its acquisition by Express Solicitors the Second and Third Defendants cannot have been appointed as partners/members of Amelans (as defined) because it had ceased to exist (and for the avoidance of doubt the Claimants do not accept that the Second and Third Defendants would have been appointed as partners in Amelans prior to the completion of the acquisition by Express Solicitors).” (1) Upon acquisition by Express Solicitors, Amelans (as defined in the 2013 Articles and being a partnership under the Partnership Act 1890) is rebuttably presumed to have dissolved as a matter of law (whether pursuant to section 32 of the Partnership Act 1980 or otherwise); (2) Accordingly, following its acquisition by Express Solicitors the Second and Third Defendants cannot have been appointed as partners/members of Amelans (as defined) because it had ceased to exist (and for the avoidance of doubt the Claimants do not accept that the Second and Third Defendants would have been appointed as partners in Amelans prior to the completion of the acquisition by Express Solicitors).” ii) Mr Maxey was not a “Permitted Transferee” as the reference to Amelans in the 2013 Articles was to that firm as it existed at the date of the 2013 SHA. This case is pleaded as follows in paragraph 41B(3)-(4) of the APofC:

“(3) Further or alternatively, and as a matter of construction of the 2013 Articles, the reference to “Amelans” in the 2013 Articles is a reference to the partnership that existed at the time of the 2013 Shareholder’s Agreement; (4) Accordingly, and if (contrary to the Claimants’ primary position), following the acquisition by Express Solicitors of the business that had been carried on by Amelans, the Second and Third Defendants were appointed as partners of a partnership which still described itself as “Amelans” , any such partnership, if it existed at all, was no longer the partnership as intended and defined within the 2013 Articles, having materially changed its composition and further any such partnership could no longer satisfy the requirement of section 1 of the Partnership Act 1890 when its very business had been disposed of to Express Solicitors.” iii) It was an implied term of the 2013 Articles that Article 18(2)(a) would not be used to permit or effect at transfer of the “A”

Shares if “Amelans” ceased to be an “independent firm”. This case depends upon the implication of a term to this effect, and is pleaded as follows in paragraph 35C of the APofC:

“35C. Further, it was an implied term of the 2013 Articles that Article 18.2(a) would not be used to permit or effect a transfer of the “A” shares if Amelans was acquired and no longer operated as an independent firm (“the Implied Term”). Such a term was implied by reason of obviousness and/or necessity and/or to give effect to the reasonable expectations of the shareholders in the First Defendant, in particular an expectation that an outsider to the company could not acquire Amelans and therefore use Article 18.2(a) to acquire effective control over the First Defendant.” iv) The appointment of Mr Maxey and Mr Slade as partners was a sham and of no effect. This case is pleaded as follows in paragraph 41C of the APofC: “41C. Further or alternatively, the purported appointment of the Second and Third Defendants was intended to give to third parties (such as the Claimants) the appearance of creatingrights and obligations between the Second and Third Defendants and the partners of Amelans prior to its acquisition (Mr Twambley and Ms Wilkinson) which are different from the actual rights and obligations that these parties intended to create amongst one another. Accordingly the purported appointment of the Second and Third Defendants as partners in Amelans was a sham and of no effect. In particular: (1) Following its acquisition by Express Solicitors there was no real compelling need or reason for the Second and Third Defendants to be made partners or members of Amelans given that the business formerly carried on by Amelans had been acquired by a corporate entity which would take over its trade and assets. Alternatively, any such need could have been satisfied by Express Solicitors itself becoming a partner in Amelans (as the Defendants contend so happened on 24 July 2024); (2) As is pleaded in paragraph 39 above, prior to its acquisition of Amelans, Express Solicitors was applying considerable pressure to the First Defendant and its then directors to change the Slot Price Differential (which was unfavourable to Express Solicitors’ commercial interests); (3) The Second and Third Defendants and Mr Twambley and Ms Wilkinson knew (or ought to have known) that a means by which any person could become the holder of the “A” shares (and so acquire all the attendant powers and rights which attach to such shares) was through Article 18.2(a) of the 2013 Articles which required that person to be designated as a “partner in Amelans”; (4) Contrariwise, the Second and Third Defendants and Mr Twambley and Ms Wilkinson knew (or at least ought to have known that there was a risk) that that the Purported Variations and in particular the Purported Variations to the 2013 Articles were (for the reasons set out in paragraph 37 above) invalid and of no effect. Accordingly any attempt to transfer the “A” shares to a third-party such as the Second Defendant pursuant to the Purported Variations to the 2013 Articles would be liable to challenge; (5) Accordingly it is a reasonable inference from all of the above matters that the purported The transfer of A Shares to Mr Maxey was in breach of an implied term of the 2013 Articles. This case is pleaded as follows in paragraphs 35C and 41E of the APofC”. (1) Following its acquisition by Express Solicitors there was no real compelling need or reason for the Second and Third Defendants to be made partners or members of Amelans given that the business formerly carried on by Amelans had been acquired by a corporate entity which would take over its trade and assets. Alternatively, any such need could have been satisfied by Express Solicitors itself becoming a partner in Amelans (as the Defendants contend so happened on 24 July 2024); (2) As is pleaded in paragraph 39 above, prior to its acquisition of Amelans, Express Solicitors was applying considerable pressure to the First Defendant and its then directors to change the Slot Price Differential (which was unfavourable to Express Solicitors’ commercial interests); (3) The Second and Third Defendants and Mr Twambley and Ms Wilkinson knew (or ought to have known) that a means by which any person could become the holder of the “A” shares (and so acquire all the attendant powers and rights which attach to such shares) was through Article 18.2(a) of the 2013 Articles which required that person to be designated as a “partner in Amelans”; (4) Contrariwise, the Second and Third Defendants and Mr Twambley and Ms Wilkinson knew (or at least ought to have known that there was a risk) that that the Purported Variations and in particular the Purported Variations to the 2013 Articles were (for the reasons set out in paragraph 37 above) invalid and of no effect. Accordingly any attempt to transfer the “A” shares to a third-party such as the Second Defendant pursuant to the Purported Variations to the 2013 Articles would be liable to challenge; (5) Accordingly it is a reasonable inference from all of the above matters that the purported The transfer of A Shares to Mr Maxey was in breach of an implied term of the 2013 Articles. This case is pleaded as follows in paragraphs 35C and 41E of the APofC”. v) There was a wrongful failure by Mr Twambley and Ms Wilkinson to consider the change of control provisions in clause 14 of the SHA. This case is pleaded as follows in paragraphs 41G and 49A of the APofC: “41G. Alternatively and if (contrary to the Claimant’s primary case), Mr Twambley did have a prima facie right to transfer the “A” shares to the Second Defendant then: (1) Such transfer constituted a “Change of Control” within the meaning of clause 14.2 of the 2013 Shareholders Agreement (in particular clause 14.2(c)); (2) In accordance with clause 14.1 the Board therefore had the discretion (acting reasonably and having regard to the best interests of the First Defendant) to require the Second Defendant (as a Changed Shareholder) to dispose of his shares by serving a Transfer Notice in accordance with clause 14.3. This discretion was required to be exercised in good faith and not arbitrarily nor capriciously; (3) The Board of the First Defendant did not do so, and indeed the July 2023 Board Minute does not record that the Board even expressly considered whether it should exercise such discretion; (4) Further, the July 2023 Board Minute records that the registration of the Transfers wouldpromote the success of the First Defendant for the benefit of the members of a whole, when it could not reasonably have been so resolved; (5) Such conduct constitutes a breach of clause 14.1 of the 2013 Shareholders’ Agreement in that in failing to even consider whether to require the Second Defendant to serve a Transfer Notice the Board cannot possibly have been acting reasonably or with regard to the best interests of the First Defendant.” ….. 49A. By reasons of the matters set out in paragraph 41G above, the Claimants are entitled to an injunction restraining the Defendants from acting in accordance with the transfers of the “A”

Shares and further to the extent necessary reconstituting the Board of the First Defendant in order for such Board to exercise its discretion in accordance with its duties of good faith.” (1) Such transfer constituted a “Change of Control” within the meaning of clause 14.2 of the 2013 Shareholders Agreement (in particular clause 14.2(c)); (2) In accordance with clause 14.1 the Board therefore had the discretion (acting reasonably and having regard to the best interests of the First Defendant) to require the Second Defendant (as a Changed Shareholder) to dispose of his shares by serving a Transfer Notice in accordance with clause 14.3. This discretion was required to be exercised in good faith and not arbitrarily nor capriciously; (3) The Board of the First Defendant did not do so, and indeed the July 2023 Board Minute does not record that the Board even expressly considered whether it should exercise such discretion; (4) Further, the July 2023 Board Minute records that the registration of the Transfers wouldpromote the success of the First Defendant for the benefit of the members of a whole, when it could not reasonably have been so resolved; (5) Such conduct constitutes a breach of clause 14.1 of the 2013 Shareholders’ Agreement in that in failing to even consider whether to require the Second Defendant to serve a Transfer Notice the Board cannot possibly have been acting reasonably or with regard to the best interests of the First Defendant.”

Breach of good faith obligations

[17]It is alleged that Messrs Maxey and Slade acted in breach of the good faith obligation in clause 5.1(a) of the 2013 SHA because it is said that the removal of the Slot Price Differential was to the significant financial disadvantage of the Founding Shareholders, benefited only the Panel Members (including Express Solicitors) and gave rise to a conflict of interest. The case as to this allegation is pleaded in paragraph 44A of the APofC as follows:

“44A. The removal of the Slot Price Differential was in breach of the obligation in clause 5.1(a) of the 2013 Shareholders Agreement to act in good faith towards the First Defendant and its shareholders as a whole in that: (1) As is set out in paragraph 43 above, the removal of the Slot Price Differential was to the significant financial disadvantage of the Founding Shareholders. It was of no conceivable benefit to the Founding Shareholders and was only of a benefit to the Panel Members (who are and were not shareholders) including Express Solicitors; (2) Further, it gave rise a clear conflict of interest in that the Second and Third Defendants (being the Board of the First Defendant at the time) had a significant financial interest in this decision as principals of Express Solicitors which stood to significantly gain by removal of the Slot Price Differential. A Board which was as conflicted as the First Defendant’s when taking the decision to remove the Slot Price Differential cannot possibly have been acting in good faith towards the Founding Shareholders.” (1) As is set out in paragraph 43 above, the removal of the Slot Price Differential was to the significant financial disadvantage of the Founding Shareholders. It was of no conceivable benefit to the Founding Shareholders and was only of a benefit to the Panel Members (who are and were not shareholders) including Express Solicitors; (2) Further, it gave rise a clear conflict of interest in that the Second and Third Defendants (being the Board of the First Defendant at the time) had a significant financial interest in this decision as principals of Express Solicitors which stood to significantly gain by removal of the Slot Price Differential. A Board which was as conflicted as the First Defendant’s when taking the decision to remove the Slot Price Differential cannot possibly have been acting in good faith towards the Founding Shareholders.”

Rectification

[18]By paragraph 52 to 57 of the APofC, the Claimants seek rectification of the SHA 2013 by providing for there to be inserted therein the words: “Save that, for the avoidance of doubt, nothing in this agreement shall be taken to or have the effect of altering or removing the pre-existing contractual rights to differential pricing for Panel Service Charges”.

[19]Paragraphs 52 to 57 of the APofC are set out in the Appendix hereto.

[20]In the First Judgment, I rejected the Claimants’ attempt to raise a case in rectification as a response to SJ Application and in support of the Contract/Estoppel Claim and the Claimants’ case that they were still entitled to rely upon the provisions of clause 4.3 of the Supplemental Deed – see paragraphs 75-80 of the First Judgment.

Further appointment and ratification relied on by the Defendants

[21]In the light of the challenge made by the Claimants at the last hearing on 13 November 2023 as to the validity of the appointment of Mr Maxey and Mr Slade as directors of D1, and as to the validity of the transfer of A Shares to Mr Maxey, the Defendants rely, in so far as necessary, upon the appointment of Mr Maxey and Mr Slade as directors of D1 as having been confirmed by Express, as the current holder of the A Shares in D1, and also by Mr Twambley and Mr Maxey in the event that either of them should still strictly be the A shareholder if either the transfer to Mr Maxey, or a subsequent transfer to Express, should be defective. The confirmation of appointment has been recorded in a notice that has been exhibited in evidence. The evidence is further to the effect that this notice was, on 10 December 2024, served on D1 at its registered office, and then served on each shareholder in D1 (cf. Article 11.4 of the 2013 Articles). On this basis, it is contended that it has been put beyond dispute that, at the very latest from 10 December 2024, Mr Maxey and Mr Slade have been the duly appointed directors of D1.

[22]Further, reliance is placed by the Defendants upon Mr Maxey and Mr Slade having held a Board meeting of D1 on 12 December 2024 at which it was considered, amongst other things, as to whether to ratify the steps that Mr Maxey and Mr Slade had taken on behalf of D1 in relation to the removal of the Slot Price Differential and otherwise. The minutes that have been produced record the fact that consideration was given thereto, and that the decision to remove the Slot Price Differential was ratified (in so far as necessary).

[23]It is the Defendants’ case that these steps put beyond doubt any challenge to the removal of the Slot Price Differential subject only to the allegation that Mr Maxey and Mr Slade have acted in breach of the good faith obligation in clause 5.1(a) of the 2013 SHA, and the attempt by the Claimants to reintroduce a rectification claim.

The correct approach to take on an application to amend

[24]I understand it to be common ground that the appropriate test to apply in respect of the Amendment Application is the same as that applicable on an application for summary judgment, namely whether claims sought to be advanced by the Claimant by way of the APofC have a “realistic” as opposed to a “fanciful” prospect of success – see e.g., Kawasaki Kisen Kaisha Ltd v James Kemball Ltd

[2021] EWCA Civ 33

at [17], per Popplewell LJ.

[25]I set out in paragraphs 58 to 60 of the First Judgment what I considered that this test involves. However, so far as my determination of the Amendment Application is concerned, a number of differences of emphasis have arisen between the parties as to how this test ought to be applied.

[26]Mr Lascelles, on behalf of the Defendants, placed particular reliance upon what was said by Popplewell LJ in Kawasaki Kisen Kaisha Ltd v James Kemball Ltd (supra) at [18], submitting on the basis thereof that in considering whether a case sought to be advanced by way of a proposed amendment has a real prospect of success: i) It is not enough that the claim is merely arguable, it must carry some degree of conviction; ii) The pleading must be coherent and properly particularised – see Elite Property Holdings Ltd v Barclays Bank Plc

[2019] EWCA Civ 204

at [42]; and iii) “The pleading must be supported by evidence which establishes a factual basis which meets the merits test; it is not sufficient simply to plead allegations which if true would establish a claim; there must be evidential material which establishes a sufficiently arguable case that the allegations are correct: Elite Property at [41].”

[27]In Elite Property at [41], Asplin LJ suggested that a claim should not be considered to have a real prospect of success where: “(a) it is possible to say with confidence that the factual basis for the claim is fanciful because it is entirely without substance; (b) the claimant does not have material to support at least a prima facie case that the allegations are correct; and/or (c) the claim has pleaded insufficient facts in support of their case to entitle the court to draw the necessary inferences …”.

[28]As against these considerations, on behalf of the Claimants, Mr Chaisty KC placed particular reliance upon a number of principles identified in the judgment of Lord Hamblen JSC in Okpabi v Royal Dutch Shell Plc

[2021] UKSC 3

[2021] 1 WLR 1294

(which I had referred to paragraph 60 of the First Judgment).

[29]In particular, Mr Chaisty KC placed reliance upon the following paragraphs of Lord Hamblen JSC’s judgment: i) Paragraph 21, where Lord Hamblen JSC identified the importance of observing judicial restraint and avoiding mini trials in considering whether there was a triable issue against a defendant; ii) Paragraph 22, where Lord Hamblen JSC stated that, save in cases where allegations of fact are demonstrably untrue or unsupportable, it is generally not appropriate for a defendant to dispute the facts alleged through evidence of its own, and that doing so may well just show that there is a triable issue. iii) Paragraph 107, where Lord Hamblen JSC emphasised that the focus should be upon the pleaded case, and whether that discloses an arguable claim, and that the court should not be drawn into an evaluation of the weight of the evidence and an exercise of judgment based on that evidence. iv) At paragraphs 109-111, Lord Hamblen JSC stressed that it was not for court at the summary judgment stage to make “findings” on the evidence. Thus, if the court gets to the point of embarking upon an evaluation of the weight of the evidence, then that is indicative of there being a case that ought to be left to go to trial. v) Paragraphs 126-127, where Lord Hamblen JSC made the point that conducting a mini trial ran the risk of leading the court to make inappropriate determinations in relation to documentary evidence. This was because the court, in making a decision on the evidence, effectively had to conclude that the prospect of there being further relevant evidence emerging on disclosure could and should be discounted. Lord Hamblen JSC rejected the approach taken below by Simon LJ in the Court of Appeal, where the latter had decided that the question required to be determined on the basis of the material available, and that the prospect of further evidence did not assist. Lord Hamblen JSC endorsed the approach of Lord Briggs JSC in Lungowe v Vedanta Resources plc

[2019] UKSC 20

[2020] AC 1045

, at [45], were Lord Briggs JSC had said:

“… the court cannot ignore reasonable grounds which may be disclosed at the summary judgement stage for believing that a full investigation of the facts may or alter the evidence relevant to the issue.”

[30]Mr Chaisty KC also referred to the decision of the Court of Appeal in CNM Estates (Tolworth Tower) Ltd v Carvill-Briggs

[2022] EWHC 1583

, and in particular to the following: i) The observations of Males LJ at [48] and [49]:

“48. … the principal focus must be on the pleading in question and no attempt should be made to resolve disputed matters of evidence (conducting a mini trial).” “49. … in general (and save perhaps in ‘very late’ amendments) it is not appropriate to consider the strength or weaknesses of the claim as a factor relevant to the exercise of discretion.” ii) What was said by Sir Geoffrey Vos MR and Newey LJ at [75] - [77]: “75. As we have indicated, an application for permission to amend particulars of claim will be refused if the amendments put forward a new case which would have ‘no real prospect of succeeding’ within the meaning of CPR Part 24. Beyond that the court has to strike a balance between the interests of the applicant and those of other parties and litigants more generally.” “76. Aside from very late amendments, we do not think the perceived strength of the case is normally a factor to be taken into account when undertaking that balancing exercise … it will never be appropriate to attempt to conduct a mini trial.” “77. The general rule is that, except in the case of ‘very late’ amendments, unless it can be seen that a claim has no real prospect of succeeding, its merits should be determined at a full trial. The warnings against mini trials apply with just as much force to applications to amend as they do to summary judgment or jurisdiction disputes. The CPR do not bar litigants from pursuing claims that might at an interlocutory stage be considered weak.” iii) The approval by Sir Geoffrey Vos MR and Newey LJ of the summary of the relevant principles by HHJ Eyre QC (as he then was) in Scott v Singh [2020] EWHC 1714 (Comm) at [19]: “The new case set out in the proposed pleading must have a real prospect of success …. The approach to be taken is to consider those prospects in the same way as for summary judgment namely whether there is a real as opposed to a fanciful prospect of the claim or defence being raised succeeding. It would clearly be pointless to allow an amendment if the claim or defence being raised would be defeated by a summary judgment application. However, at the stage of considering a proposed amendment that test imposes a comparatively low burden and the question is whether it is clear that the new claim or defence has no prospect of success. The court is not to engage in a mini-trial when considering a summary judgment application and even less is it to do so when considering whether or not to permit an amendment.”

[31]I take from these latter cases that it is not appropriate for the Court on an application for permission to amend, or indeed in hearing an application for summary judgement in respect of which the same principles apply, to embark upon the exercise of evaluating the weight of conflicting evidence, and that the Court is required to be mindful not only as to what evidence might be before the Court, but also as to what evidence, documentary or otherwise, might possibly be available at trial to contradict the claim. However, so long as the Court refrains from embarking upon a mini-trial, and an evaluation of the weight of contested evidence, these authorities do not, I consider, prevent the Court from concluding a claim has no real prospect of success where, as expressed by Asplin LJ in Elite Property at [41]-[42]: i) It is possible to say with confidence that the factual basis for the claim is fanciful because it is entirely without substance, or as Lewison J, put it in Easyair at [15(c)], because the relevant factual assertions lack reality; ii) The claimant does not have material to support at least a prima facie case that the allegations are correct, i.e., as expressed by Popplewell LJ in Kawasaki at [18], it is not sufficient simply to plead allegations which if true would establish a claim. There must be some evidential material which establishes a sufficiently arguable case that the allegations are correct. In other words, the claim must amount to more than assertion. iii) The claimant has pleaded insufficient facts in support of the case to entitle the Court to draw necessary inferences, or the pleaded case lacks sufficient coherence or particularity. Should the proposed amendments be permitted? Alleged invalidity of appointment of Mr Maxey and Mr Slade Board resolution point

Should the proposed amendments be permitted?

[32]The first basis upon which the validity of the appointment of Mr Maxey and Mr Slade as directors of D1 on 21 July 2023 is challenged is that the appointment purported to be that of a resolution of the Board of D1 rather than an appointment made by Mr Twambley as holder of the A Shares pursuant to Article 11.1 of the 2013 Articles as pleaded in paragraph 41F(1) of the APofC.

[33]As to this, Mr Chaisty KC takes the point that apart from the appointments being purported to be made by the wrong entity (board rather than shareholder), the appointment is tainted by the fact that it was made not only by Mr Twambley, but also by Ms Wilkinson.

[34]However, I consider that the clear answer to this is, as contended by Mr Lascelles, that the Defendants are entitled to rely upon the Duomatic principle (Re Duomatic Ltd

[1969] Ch 367

). The essential principle is that where it can be shown that all the shareholders with the right to attend and vote at a general meeting had assented to some act which a general meeting of the company could carry into effect, the assent was as binding as a resolution in general meeting – see per Buckley J at 373. Re Torvale Group Ltd

[2000] BCC 626

at 635H-636G, per Neuberger J, provides authority for the proposition that the Duomatic principle applies not only to a situation where the assent of all shareholders is required, but where the assent of all members of a particular group is required. As Neuberger J put it at 636B:

“The essence of the Duomatic principle is that, where statute or a company’s articles provided that a course can be taken only with the sanction of a certain group, which sanction is to be given in accordance with a prescribed procedure, then, provided that all the members of that group agree to that course, the prescribed procedure is not normally treated as being of the essence.”

[35]Re Express Engineering Works Ltd

[1920] 1 Ch 466

involved a situation where the five directors purported resolve to authorise the issue of debentures when the power to issue debentures lay with the company in general meeting. However, as the five directors were also the only shareholders of the company, the resolution of the Board was effective as a decision of the company in general meeting to issue the debentures. This case therefore provides authority for the proposition that the fact that a shareholder might purport to act as a director rather than as a shareholder does not mean that their actions cannot be taken to have been those of them acting in their capacity as shareholder.

[36]In the present case, as recorded by the minutes of the meeting of the Board of on 21 July 2023, Mr Twambley clearly authorised the appointment of Mr Maxey and Mr Slade as directors of D1. In the circumstances, I consider that his actions are to be taken to be those of him acting in his capacity as holder of the A Shares in D1 effecting an appointment pursuant to Article 11.1 of the 2013 Articles, and I do not consider that it matters that Ms Wilkinson joined with him in the board resolution. The important point is, I consider, that Mr Twambley clearly assented to the appointment.

[37]I do not consider any contrary argument to stand any real prospect of success. A consideration of this question is, as I see it, a pure point of law that falls fairly and squarely within the type of case envisaged by Lewison J in Easyair Ltd at [15(e)].

[38]On this basis I consider that the application to amend so as to introduce the new paragraph 41F(1) of the APofC should be refused.

Only entitled to appoint two directors point

[39]The second basis upon which the validity of the appointment of Mr Maxey and Mr Slade is challenged is on the basis that Article 11.1 of the 2013 Articles entitled Mr Twambley, as holder of the A Shares in D1, to appoint two directors, and that as there were already two directors (Mr Twambley and Ms Wilkinson), it was not open to him to appoint two more directors, and so the appointments of Mr Maxey and Mr Slade were invalid and ineffective – see paragraph 41F(2) of the APofC.

[40]The historic sequence is that Mr Twambley and Mr Cockx were appointed as directors of D1 on 28 October 2002 prior to the adoption of new articles of association distinguishing between A and B Shares on 21 November 2002 (“the 2002 Articles”). Mr Cockx resigned as a director on 28 July 2011, on which day Ms Wilkinson was appointed as a director of D1 in his place. The 2013 Articles were adopted on 13 April 2013. Articles 20 and 21 of the 2002 Articles provided, subject to special resolution, for a maximum of 2 directors, and for the power of appointment and removal of directors to rest with the holders of the A Shares.

[41]The wording of Article 11.1 of the 2013 Articles is:

“The holder(s) of a majority of the A Shares for the time being shall be entitled to appoint two persons to be Directors of the Company.”

It is to be noted that the 2013 Articles, by Article 2.2 thereof, disapply Article 17 of the Model Articles relating to the appointment of directors. Consequently, Article 11.1 provides the only internal mechanism for the appointment of directors.

[42]Article 1.1 of the 2013 Articles defines “Directors” as being “those directors appointed by the holder of the A Shares in accordance with article 11.1 and Directors shall be construed accordingly.” Article 5 of the 2013 Articles provides that the number of “directors” shall be not less than two and no more than four.

[43]Mr Chaisty KC on behalf of the Claimants submits that this issue raises a question as to the proper construction of Article 11.1 that is at least reasonably arguable. He submits that Article 11.1 is clear to the effect that the entitlement to appoint thereunder is limited to the appointment of two persons as directors, and that as there were already two directors in office who did not immediately resign when Mr Maxey and Mr Slade were appointed, the power to appoint the latter in addition to Mr Twambley and Ms Wilkinson simply did not exist. Further, to the extent that it might be possible for the Defendants to argue that the appointment of Mr Maxey was valid even if that of Mr Slade was invalid, Mr Chaisty KC argues that this provides no assistance to the Defendants because both Mr Twambley and Ms Wilkinson resigned as directors of D1 on 1 September 2023, which would have left Mr Maxey as sole director in circumstances where the quorum for directors’ meetings under Article 7 is expressed to be “two Directors or their alternates”.

[44]The issue raised is thus one as to the proper construction of Article 11.1 of the 2013 Articles, and whether and to what extent it imposes a limit on the number of directors that might be appointed by the holder of A Shares pursuant thereto.

[45]I set out the general principles relating to contractual construction in the First Judgment at [65]-[68]. I do not understand it to be in dispute but that, whilst articles of association of a company are contractual in nature, they are also public documents constituting the constitution of the company, with the consequence that special principles apply to questions of construction and the implication of terms in relation thereto. In particular, authority is to the effect that: i) The factual matrix available for the purposes of the exercise of construction is “very limited”, with the Court having to “concentrate on the natural and ordinary meaning of the words used, when viewed in light of the scheme and purpose of the articles in general, any extrinsic facts about the company or its membership that would reasonably be ascertainable by any reader of the company's constitution and public filings at Companies House, and commercial common sense” – see DnaNudge Ltd v Ventura Capital GP Ltd

[2023] EWCA Civ 1142

at [49]-[52], per Snowden LJ. ii) In relation to any restriction on the right to transfer shares, the Court should have regard to the principle that shares, being items of personal property, are prima facie freely transferrable such that any limitation on transfer should be read restrictively – see e.g. Cosmetic Warriors Limited v Gerrie

[2017] EWCA Civ 324

at [53] per Henderson LJ.

[46]In the circumstances, in particular given that the factual matrix required to be considered is limited as identified, I am satisfied that this issue raises a short question of construction that it is appropriate to determine on the present application, without having to embark upon a mini trial and without risk of relevant documents subsequently emerging to shed a different light on matters.

[47]I consider that, on any sensible and realistic construction thereof, Article 11.1 enabled Mr Twambley, as the holder of the A Shares, to appoint Mr Maxey and Mr Slade as the two “Directors” provided for thereby.

[48]Mr Twambley and Mr Cockx were not appointed by the holder of the A Shares, and been appointed prior to the adoption of the 2002 Articles. Consequently, Mr Twambley, at least, would not count as one of the two directors provided for by Article 11.1.

[49]Ms Wilkinson would have been appointed pursuant to Article 21 of the 2002 Articles by the holder or holders of A Shares. However, this does, I consider, bring into play the definition of “Director” in Article 1.1 of the 2013 Articles, in that such a “Director” is defined as a “director” who is not only appointed by the holder of A shares, but appointed “in accordance with article 11.1”. Thus, Ms Wilkinson will not, as I see it, have fallen within this definition because she was not appointed pursuant to the power contained in Article 11.1 of the 2013 Articles, but pursuant to the relevant article (Article 21) in the 2002 Articles. That being the case, it was, as I see it, open to Mr Twambley, in accordance with Article 11.1, to appoint two persons to be “Directors”.

[50]I recognise that there are inconsistencies within the 2013 Articles with regard to the use of the words “Director” and “director”, however what I consider to be the correct construction of Article 11.1 is, I consider, supported by Article 5 permitting between two and four “directors” to be appointed, in contrast to the two directors permitted by Article 20 of the 2002 Articles.

[51]Should I be wrong as to the application of the definition of “Director” in Article 1.1, and Ms Wilkinson was properly to be regarded as being a “Director”, then there would still have been one vacancy of “Director” to fill by appointment in accordance with Article 11.1. I would have thought that this would have enabled Mr Twambley to have validly appointed at least Mr Maxey as a director as he was the first named (in the minutes) of those purportedly appointed as directors on 21 July 2023. There would then still be the potential quorum issue identified by Mr Chaisty KC given Mr Twambley’s and Ms Wilkinson’s subsequent resignations, although the final wording of Article 7 would suggest that Mr Maxey could have constituted a quorum at an adjourned meeting. However, given the clear conclusion that I have reached as to the meaning of the definition of “Director”, and how Article 11.1 therefore took effect, this is not a point that I consider that I need to determine.

[52]The consequence of this is that I do not consider that this line of argument would stand any real prospect of success at trial, and I therefore consider that that permission to amend so as to rely upon the proposed new paragraph 41F(2) of the APofC should be refused,

Conclusion in relation to the appointment of Mr Maxey and Mr Slade

[53]For the reasons set out above, I consider that the appointment of Mr Maxey and Mr Slade as directors of D1 on 21 July 2023 was valid and effective.

[54]However, even if this is not right, I consider that Mr Lascelles is right that any defect in appointment will have been cured by the steps taken by the Defendants in December 2024, following the hearing last year, as referred to in paragraph 20 above. By then, Mr Twambley and Ms Wilkinson had long since resigned. Further, the position must have been that the A Shares in D1 were, indisputably, held by one of Mr Twambley, Mr Maxey or Express, whatever the validity of any transfer by Mr Twambley. In these circumstances, given that each of them was party to the steps taken to confirm the appointment of Mr Maxey and Mr Slade, the Court can be satisfied that the appointment has been confirmed by the holder of the A Shares with power to appoint pursuant to Article 11.1 of the 2013 Articles.

[55]I therefore refuse permission to amend so as to include the proposed new paragraph 41F of the APofC.

Confirmation of appointment and ratification

[56]Further, I consider that Mr Lascelles is correct that if, as must been the case, Mr Maxey and Mr Slade validly held office as directors of D1 as at the time of the taking the steps referred to in paragraph 22 above, and the passing of the resolution ratifying their previous actions in relation to the removal of the Slot Price Differential, then the effect of the relevant resolution will have been to so ratify those actions.

[57]As I held in the First Judgment at [79] and [102], clause 4.2 of the 2013 SHA gave express power to the Board of D1 to vary the amount of the Service Charge, e.g. by removing the Slot Price Differential. I accept the general proposition that a board of directors can ratify actions purportedly taken on behalf of a company, provided such actions are themselves within the power of the Board. As stated in Bowstead & Reynolds on Agency, 23rd Ed, at 2-069:

“An act or transaction done or entered into on behalf of a company may be ratified by the directors, if they have power to do or enter into such an act or transaction on behalf of the company.”

[58]In the light thereof, I further consider that Mr Lascelles is correct that, save in relation to the further issues in respect of alleged breach of the obligation of good faith under clause 5.1(a) of the 2013 SHA and rectification, the further issues raised by the Claimants, i.e. relating to the validity of the transfer of shares to Mr Maxey in July 2021, are strictly irrelevant to the question as to whether Mr Maxey and Mr Slade, as directors of D1, had the ability, validly and effectively as directors of D1, to decide to remove the Slot Price Differential.

[59]The point is that, for this latter purpose, it matters not who is properly to be regarded as the holder of the A Shares, or whether the transfer thereof by Mr Twambley to Mr Maxey was valid and effective. The issue is as to the validity of the appointment of Mr Maxey and Mr Slade as directors.

[60]It is therefore strictly unnecessary for me to consider the various arguments advanced in relation to the validity of the transfer of the A Shares to Mr Maxey. However, in case I should be wrong with regard to the questions of confirmation of appointment and ratification, I shall consider these issues. Validity of the transfer of A Shares to Mr Maxey Allegation that Amelans had ceased to exist

Validity of the transfer of A Shares to Mr Maxey

[61]This is the case sought to be introduced by the new paragraphs 41B(1) and (2) of the APofC.

[62]The validity of the transfer of the A Shares to Mr Maxey on 21 July 2023 turns, amongst other things, upon him being a “Permitted Transferee” for the purposes of Article 18 of the 2013 Articles which, by Article 18.2(a), identifies a “partner or member of Amelans” as a “Permitted Transferee”. The Claimants’ case is that Mr Maxey cannot be a partner of “Amelans” because, by 21 July 2023, Amelans had ceased to exist because it had been acquired by Express.

[63]Reliance is placed by the Claimants on the fact that at paragraph 15 of Maxey 1, Mr Maxey had said that:

“Following Express’ acquisition of Amelans, Mr Slade and I both became partners in Amelans.”

Mr Chaisty KC further identified that, at paragraph 18 of Maxey 4, Mr Maxey confusingly said:

“Mr Slade and I became partners on 21 July 2023 following prior to the Board Meeting that day.”

[64]In essence, the Claimant’s case is that the above provides evidence from the Defendants themselves that Express had acquired Amelans by the time that the relevant share transfer purportedly took place. If Amelans had been so acquired, then, so it is said, it cannot have had any partners to satisfy the definition of “Permitted Transferee”. The point is made on behalf of the Claimants that very little documentation has been provided explaining the relevant transactions, and the sequence of events by which Express did indisputably acquire the practice of Amelans. A list of documentation that it is said could have been produced in order to properly explain the position is set out in paragraph 19 of Mr Chaisty KC’s and Mr Taylor’s Skeleton Argument. It is thus submitted on behalf of the Claimants that this is a classic case of the kind identified in Okpabi v Royal Dutch Shell Plc (supra) where further documentation that would ultimately be disclosed in the present proceedings might assist the Claimants in respect of this element of the claim, and shed a different light on matters, and therefore it is inappropriate to summarily determine the matter.

[65]At the hearing on 13 November 2024, it was explained by Mr Lascelles on behalf of the Defendants that Mr Maxey had been imprecise in what he had said at paragraph 15 of Maxey 1, and that the sequence of events was that whilst Express had contracted to purchase the practice of Amelans prior to Mr Maxey and Mr Slade becoming partners in the latter, the sale was not completed until 24 July 2023.

[66]In Maxey 3, made following the hearing on 13 November 2024, Mr Maxey said the following at paragraph 3:

“Mr Slade and I became partners in Amelans on 21 July 2023 following Express’ agreement to acquire Amelans, but prior to completion of that acquisition. Mr Slade and I became partners on 21 July 2023 prior to the [D1] Board meeting that day. Express’ acquisition of Amelans completed on 24 July 2023, at which point Express too became a partner of Amelans.”

[67]At the present hearing, it was submitted by Mr Lascelles on behalf of the Defendants that there was an obvious error in paragraph 18 of Maxey 4 in that this paragraph had intended to replicate paragraph 3 of Maxey 3, but the words “Express’ agreement to acquire Amelans, but prior to completion of that acquisition. Mr Slade and I became partners on 21 July 2023” had been accidentally omitted between “following” and “prior” in paragraph 18 of Maxey 4 as a result of defective cutting and pasting. I have to say that this explanation makes entire sense given that there is clearly some wording missing in paragraph 18 of Maxey 4, and given what Mr Maxey had said I paragraph 3 of Maxey 3, this is the obvious, if not the only realistic explanation.

[68]The question therefore is as to whether there is any realistic prospect of the Claimants establishing at trial that Express’ acquisition of Amelans was completed prior to when it is said that the A Shares were transferred to Mr Maxey, and completed in such a way that Amelans, as a firm with partners, ceased to exist. It may very well be that further documentation can be produced that would more fully demonstrate how the relevant sale process took place. However, I am satisfied that the contemporaneous documentation that has been produced is sufficient to confirm Mr Maxey’s explanation in paragraph 3 of Maxey 3, and there is no real prospect of any other documentation coming to light demonstrating to the contrary.

[69]I reach this conclusion for the following reasons: i) The contemporaneously produced Board minutes of D1 record that Mr Twambley and Ms Wilkinson then held their shares “as nominees on trust for Amelans Solicitors (“Partnership”)” and that Mr Maxey and Mr Slade were, at the time of the Board meeting on 21 July 2023, “each … partners within the Partnership” – see paragraphs 3 and 5.2.2 of the minutes. Further the minutes record that Mr Maxey and Mr Slade would be appointed as directors of D1, and there is then the resolution purporting to appoint Mr Maxey and Mr Slade as directors, albeit that it was not for the board to appoint. The minutes are signed by Mr Twambley as Chairperson. This is all, as I see it, consistent and consistent only with Express subsequently completing its acquisition once the various steps identified within these minutes, including the transfer of the A Shares to Mr Maxey and the B Shares to Mr Slade, had been completed. Any other explanation makes no sense. ii) The contemporaneous returns made to Companies House record Mr Maxey and Mr Slade as having been appointed as directors of D1 on 21 July 2023. iii) There has been produced an email dated 26 July 2023 attaching a standard form letter to clients of Amelans that records that Express purchased Amelans Solicitors on 24 July 2023. There is no cogent explanation why this latter date would have referred to Express having purchased on 24 July 2023 if, in fact, the purchase had been completed prior thereto on or by 21 July 2023. iv) The SRA’s decision relating to the revocation of Amelans authorisation, itself dated 16 July 2024, refers to the business of Amelans as having been acquired by Express “as of 24 July 2023”.

[70]I therefore conclude that the Claimants have no more than a fanciful prospect of establishing at trial that Express’ purchase was completed prior to Mr Maxey and Mr Slade becoming partners in Amelans and/or the transfer of the A Shares to them taking place. In these circumstances, I consider that permission to amend so as to add the proposed new paragraphs 41B(1) and (2) of the APofC should be refused.

Allegation that “Amelans” meant only the partnership at the date of the 2013 SHA

[71]This is the allegation sought to be introduced by the proposed new paragraphs 41B(3)-(4) of the APofC.

[72]The Claimants’ case is that the reference to “partner or member of Amelans” in Article 18.2(a) defining who was a “Permitted Transferee” in respect of A Shares is a reference to the partnership of Amelans as constituted as at the date of the 2013 SHA, i.e. that comprising Mr Twambley and Ms Wilkinson. The point is correctly made by the Claimants that, generally speaking, when a partner either leaves or joins an existing partnership, then as a matter of strict legal analysis the original partnership will determined, and a new partnership, between new partners, will come into existence. Consequently, if Mr Maxey and Mr Slade did become partners of Amelans together with Mr Twambley and Ms Wilkinson on 21 July 2023, then the pre-existing partnership will have been determined, and a new partnership will have come into existence between the four of them.

[73]“Amelans” is defined by Article 1.1 of the 2013 Articles as meaning:

“Amelans Solicitors (SRA number 570220) or any limited liability partnership into which that firm may convert.”

[74]This issue therefore raises a question of construction as to whether the reference to “Amelans” in Article 18.2, as defined by Article 1.1, is a reference to the partnership as existing as at the date of the 2013 SHA and the adoption of the 2013 Articles, or such partnership and any new partnership coming into existence on a change in the identity of the partners carrying on the underlying business practising as “Amelans Solicitors (SRA number 570220”).

[75]Again, for the purposes of this exercise of construction, as it involves the proper construction of a provision of D1’s 2013 Articles, the principles referred to in paragraph 45 above will again come into play with the limitation on what might be had regard to by way of admissible factual background as therein discussed.

[76]This issue again raises, as I see it, a further short point of construction in respect of which the Court has the benefit of all the relevant factual matrix that the Court would have available to it at trial. Certainly, no other facts not now available that might be available at trial, e.g. through the production of further documentation, have been identified. In the circumstances, I consider it appropriate to determine the question of construction in order to decide whether the Claimants have a real prospect of succeeding in respect of this particular line of argument.

[77]Mr Chaisty KC’s essential point is that the 2013 Articles referred to “Amelans”. The latter existed as a partnership as at the date of the 2013 SHA and 2013 Articles, and this original partnership is what the relevant provisions of the 2013 Articles (Articles 1.1 and 18.2(a)) mean when they refer to “Amelans”. As the admission of Mr Maxey and Mr Slade as partners would have resulted in the determination of the original partnership, and the creation of a new one, the new partnership as so created cannot have fallen within the definition of “Amelans”. Consequently, the transfer to Mr Maxey cannot have been to a “partner … of Amelans” within the meaning of Article 18(2)(a).

[78]I am satisfied that the definition of “Amelans” within the 2013 Articles cannot properly be construed as having such a limited meaning for, essentially, the following reasons: i) So far as the wording of the definition in Article 1.1 is concerned, I consider it significant that it refers to “Amelans Solicitors” together with an SRA number, which I note is the same number used by the practice at the time that its authorisation was revoked on 16 July 2024. This wording, I consider, points firmly against the limited construction contended for by the Claimants, and in favour of a wider construction by reference to such partnership or LLP as was, for the time being, practising as Amelans Solicitors under the same SRA number (750220). ii) The reference to “any limited liability partnership into which that firm may convert” points, as I see it, to something other than the original firm, not least because the reference to “any” LLP points to the possibility of an LLP that did not simply comprise as members Mr Twambley and Ms Wilkinson. iii) On any objective reading of the relevant provision, if it had been intended to confine the definition of “Amelans” to the original partnership, then one might have expected the definition to have been clearly spelt out, e.g. by expressly referring to Mr Twambley and Ms Wilkinson, or “the present partners”. iv) As a matter of commercial common sense, the construction contended for by the Claimants does, I consider, lack commercial reality, particularly having regard to the following: a) Amelans Solicitors, as with almost every other firm of solicitors, might reasonably have been expected to have changes in the composition of the partnership over time, as dictated by events and circumstances. The original 2002 Articles had lasted some 11 years, and had encompassed Mr Cockx’s retirement. Objectively considered, it would be reasonable to expect that the 2013 Articles might have at least the same lifespan. It is difficult to perceive that there would not have been considered to have been at least a real prospect of some change in the partnership within this sort of lifespan given that events such as a partner joining, retiring or dying are common in the life of the usual solicitors’ firm. b) A particular consideration is Mr Twambley, who was 55 in 2013, and might have been expected to retire whilst the 2013 Articles of Association remained operative.

[79]In the First Judgment at [109] I said that:

“at first blush … I would have thought that the reasonable objective observer would consider [the definition in Article 1.1] to mean a reference to the solicitors’ practice trading as Amelans with SRA number 570220, whether or not there had been a change in the composition of the partnership through which such business was carried on, and even though, in consequence it might not strictly be the same partnership…”

. I went on to say that, as I viewed matters at that stage, I did not consider that it could be ruled out that there might be background material which might demonstrate that some rather more limited meaning was, objectively considered, intended that could be pleaded out in amended particulars of claim. However, the reality of the matter is that no further such material has been pleaded out or identified.

[80]In these circumstances, I do not consider that there is any real prospect of the Claimants establishing at trial that “Amelans” should be given the limited meaning that they contend for. This being the case, I do not consider that this line of argument provides a basis for the Claimants’ contention that Mr Maxey was not a “Permitted Transferee” within the meaning of Article 18.2(a).

[81]In these circumstances, I consider that the application to amend so as to introduce the proposed new paragraphs 41B(3)-(4) of the APofC should be refused.

Implied term preventing transfer if Amelans ceased to be an independent firm

[82]By the proposed new paragraph 35C of the APofC, the Claimants seek to introduce an implied term within Article 18 to the effect that the latter would not be used to permit or effect a transfer of A Shares “if Amelans was acquired and no longer operated as an independent firm”.

[83]As appears from the proposed new paragraph 35C, it is contended that such a term should be implied: “by reason of obviousness and/or necessity and/or to give effect to the reasonable expectations of the shareholders in the First Defendant, in particular an expectation that an outsider to the company could not acquire Amelans and therefore use Article 18.2(a) to acquire effective control over the First Defendant”.

[84]Mr Chaisty KC relied upon the decision of Mr John Randall QC in Cream Holdings Ltd v Davenport EWHC 3096 (Ch) [2010] at [26], [38] and [39] in support of the proposition that a term might be implied into articles of association in order to give effect to the reasonable expectations of the shareholders. On this basis, he contended that, given the history and background of D1, and the distinction between A Shares and B Shares, it would have been within the reasonable expectation of the shareholders as a whole that the partners of Amelans should not sell up to some other entity so that it was no longer an independent firm. The point was made that Express is a much bigger panel firm with its own interests different from those of, in particular, of the Founding Shareholders, and that the 2013 Articles would lack commercial coherence if control through the A Shares could be obtained by an entity that was not an independent firm, such as Express.

[85]Therefore, so it is submitted, there is at least a realistic prospect of the Claimants establishing at trial that the implied term contended should be implied into Article 18, the effect of which would be to prevent a valid transfer of shares to a firm that was not an independent firm. On this basis, so it is submitted, permission to amend ought to be granted as sought.

[86]I consider that there are a number of real difficulties with this line of argument, and that on proper analysis there is no real prospect of it succeeding at trial.

[87]I reach this conclusion for the following reasons: i) Marks & Spencer Plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] A.C. 742 at [14]-[32], per Lord Neuberger, provides clear authority for the proposition that the test for the implication of a contractual term is the strict one of business necessity and that “a term can only be implied if, without the term, the contract would lack commercial or practical coherence” (see at [21]). ii) In the case of articles of association, whilst it may be possible to imply terms in such circumstances, DnaNudge Ltd v Ventura Capital GP Ltd (supra) provides authority for the proposition that a term cannot be implied into articles of association by reference to extrinsic circumstances or facts not available to the public. As Steyn LJ put it in in Bratton Seymour Service Company Limited v Oxborough

[1992] BCC 471

at 475G: “Here, the company puts forward an implication to be derived not from the language of the articles of association but purely from extrinsic circumstances. That, in my judgment, is a type of implication which, as a matter of law, can never succeed in the case of articles of association.” iii) I do not consider that any assistance is provided to the Claimants by Cream Holdings v Davenport (supra), and I do not consider that this case can be taken to be authority for the proposition that terms might be implied into articles of association simply to give effect to the reasonable expectations of the parties. On the facts of that case, it was necessary to imply a term in order to make certain share valuation machinery work. The case went to the Court of Appeal (

[2011] EWCA Civ 1287

[2012] 1 BCLC 365

). At [37], Patten LJ emphasised the necessity to imply the relevant term on the facts in saying: “… the implication of a term requiring the parties to co-operate in the valuation process by accepting the appointment on those terms is an obvious and necessary means of giving effect to the contract and the judge was right in my view to so hold.” iv) Given the authority of DnaNudge and the inability to imply terms into articles of association by reference to extrinsic circumstances or fact not available to the public, there is, as I see it, a real difficulty in placing reliance upon the reasonable expectations of the shareholders in D1 save to the extent that the same can be ascertained from the language of the 2013 Articles. The mere existence of A Shares and B Shares, and the vesting of effective control in the holder of the A Shares, without reference to inadmissible evidence as to the background to the dispute that has emerged in relation to the Slot Price Differential, is, as I see it, insufficient to demonstrate any relevant and admissible expectation on the part of shareholders in any event. v) Further, so far as alleged reasonable expectations are concerned, paragraph 35C does, I consider, lack particularity in relation thereto, and makes a bald assertion to the effect that these expectations were held by “shareholders” without pleading how, why or in what circumstances this is said to be the case, and the evidence in support of the Amendment Application provides no further assistance in this respect. vi) In any event, even if such reasonable expectations could be established, there is the more fundamental difficulty that a term will not be implied save to the extent that it is necessary to do so in order to provide commercial or practical coherence. I agree with Mr Lascelles that the fact that the impugned transfer took place in itself demonstrates that the 2013 Articles are entirely capable of operating in a commercially coherent and practical manner without the implication of the term that is contended for i.e. it is not necessary to the imply the relevant term in order to make the 2013 Articles work. vii) This is, again, I consider, a short point of law that can be determined on the facts presently before the Court. It does not require assessment of the merits of disputed evidence, and particularly bearing in mind the limited admissibility of material to assist in the implication of a term into the 2013 Articles, I do not consider that it can properly said there may be documentary other evidence that might become available in order to shed a different light on the point.

[88]In the above circumstances, and given that I do not consider there to be any real prospect of this argument succeeding at trial, I consider that permission to amend in order to introduce the new paragraph 35 of the APofC should be refused.

Alleged sham

[89]The essence of the argument that is sought to be introduced by the proposed new paragraph 41C of the APofC is that the appointment of Mr Maxey and Mr Slade as partners of Amelans was a sham, being an exercise intended to give to third parties such as the Claimants the appearance of rights and obligations between Mr Maxey and Mr Slade and the partners of Amelans (Mr Twambley and Ms Wilkinson) prior to its acquisition by Express which were different from the actual rights and obligations that those parties intended to create amongst themselves. I note that it is not pleaded what those actual rights and obligations are said to have been.

[90]For this purpose, the Claimants rely upon the long-standing authority ofSnook v London and Western Riding Investments Ltd

[1967] 2 QB 786

in which, at p802, Diplock LJ held that a sham:

“… means acts done or documents executed by the parties to the 'sham' which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create.”

[91]The relevant principles were summarised by reference to appellate authority inA v A

[2007] EWHC 99 (Fam)

;

[2007] 2 FLR 467

, per Mumby J at, in particular at [33] and [53]-[55], in essence as follows: i) For sham to be found there must have been a subjective intention to create different rights and obligations from those appearing and, in addition, an intention to give a false impression of those rights and obligations to third parties; ii) The fact that an act is uncommercial or artificial does not mean it is a sham; iii) An allegation of sham is a serious matter as a degree of dishonesty is involved and it follows that there is a strong and natural presumption against finding a sham; iv) It is a serious matter to find that a professional (in that case a trustee) has been party to a sham as it may well have adverse regulatory consequences; v) There is a very strong presumption indeed that parties intend to be bound by the provisions of agreements they entered into and intend such agreements to take effect; vi) Where a transaction is found to be a sham, then it is liable to be treated as void or ineffective.

[92]The matters relied upon “in particular” in support of the allegation of sham are set out in sub-paragraphs (1)-(6) of the proposed new paragraph 41C. In summary, it is said that: i) There was no real compelling need or reason for Mr Maxey and Mr Slade to be made partners of Amelans given that the business had been acquired by a corporate entity which would take over its trade and assets. Alternatively, Express, itself, could have become a partner. ii) Prior to its acquisition of Amelans, Express had been applying considerable pressure on D1 and its then directors to change the Slot Price Differential; iii) Mr Maxey and Mr Slade, and Mr Twambley and Ms Wilkinson, knew that Article 18.2(a) of the 2013 Articles required a person to be designated as a “partner” in Amelans for a transfer of A Shares to that person to be possible; iv) The Parties knew that an attempt to transfer the A Shares to third party such as Mr Maxey pursuant to the Purported Variations to the 2013 Articles would be liable to challenge, and so some other mechanism was required; v) It was a reasonable inference from the above that the purported appointment of Mr Maxey and Mr Slade was a sham with the sole or dominant purpose of permitting the transfer of A Shares to Mr Maxey to occur; vi) Further, if Mr Maxey and Mr Slade were appointed partners of Amelans on 21 July 2023, if D1 held a Board meeting on 23 July 2023, and if the acquisition by Express was completed on 24 July 2023, then, so it is alleged, the timing of these steps permits a reasonable inference that this was a scheme designed for Mr Maxey and Mr Slade to gain control over D1.

[93]In the course of submissions, and in support of the case as to sham, Mr Chaisty KC, relied upon the fact that the Defendants have not in terms sought to explain why Mr Maxey and Mr Slade became partners in Amelans when they did, or the basis upon which they did so bearing in mind that a partner would become responsible for liabilities and debts of the partnership. Further, Mr Chaisty KC submitted that it made no sense for Mr Maxey and Mr Slade to become partners in the proper sense, together with Mr Twambley and Ms Wilkinson, for only some three days.

[94]Mr Chaisty KC again commented on what he submitted was the paucity of documentation that has been produced by the Defendants to show how the relevant transactions had been structured, and to provide an explanation with regard to the appointment of Mr Maxey and Mr Slade. Mr Chaisty KC submitted that such documentation would be bound to be disclosable in due course if the proceedings continued, and that there was at least a reasonable prospect that the documentation produced would support the Claimants’ case as to sham.

[95]I take into account that I must not embark upon a mini trial or be tempted into judicial overreach, and that if there is a prospect that further documentation might emerge to shed a different light on matters, so as to support a case of sham, then I should conclude that the case of sham is sufficiently arguable to permit the proposed amendment to be made.

[96]However, these considerations do not, in my judgment, detract from the necessity on the part of the Claimants to demonstrate some evidential basis for the serious allegations of sham that they seek to make, and to properly particularise and plead a case of sham. I consider this particularly so given that an allegation of sham involves what is, in substance, an allegation of dishonesty, in the present case levelled at partners or members of two firms of Solicitors in circumstances in which there must be a strong presumption that transactions have the effect that they purport to have.

[97]The case as to sham as pleaded in the proposed new sub-paragraphs 41C(5) and (6) of the APofC is, I consider, flawed. As I have identified, the sham is pleaded as being with the sole or dominant purpose of permitting the transfer of A Shares to Mr Maxey, and as being a scheme designed for Mr Maxey and Mr Slade to gain control over D1. However, there was no need for any subterfuge in order to achieve these objectives. If Mr Maxey genuinely became a partner in Amelans, as it is maintained by the Defendants that he did, then he became a “Permitted Transferee” for the purposes of Article 18.2(a), and there was no need to construct a sham in order for Mr Maxey and Mr Slade to gain control on behalf of Express over D1 by the transfer of shares in D1 to them, subject to Mr Twambley and Ms Wilkinson subsequently resigning as directors of D1 on or following completion.

[98]So far as the facts and matters set out in the new sub-paragraphs 41C(1) to (4) of the APofC are concerned, that are alleged to lead to a “reasonable inference” of sham: i) Those identified in the first sentence of sub-paragraph 41C(1) are premised upon Express having acquired Amelans prior to Mr Maxey and Mr Slade becoming partners therein, which I have already held that the Claimants have no real prospect of establishing. So far as the suggestion that Express could have become a partner in Amelans, rather than Mr Maxey and Mr Slade, is concerned, this may be true but the fact that it did not do so does not, as I see it, call into question the integrity of the appointment of Mr Maxey and Mr Slade. Further, it is to be noted from a letter written on Amelans headed notepaper to a client on 27 July 2023, i.e. following completion, that has been produced, that reference is made to Mr Maxey and Mr Slade as “Solicitor Partners”, and to Express and Liam Wynne as being “Non-Lawyer Partners”. As understood, there was a regulatory requirement to have solicitor partners, and so there was a necessity for either or both of Mr Maxey and Mr Slade to be appointed as partners in any event if the practice of Amelans was to continue post completion and pending a transfer of clients to Express. The letter dated 27 July 2023 itself relates to the transfer of work from Amelans to Express, and demonstrates a process whereby Amelans was to continue pending a transfer of clients work to Express, which itself ties in with Amelans ceasing to be authorised by the SRA during the course of the following year, but not before. In short, nothing in sub-paragraph 41C(1), as I see it, supports a case of sham. ii) As to sub-paragraph 41C(2) of the APofC, even if Express was applying considerable pressure on D1 to change the Slot Price Differential, I cannot see that this supports a case of sham given the considerations I have already identified. iii) As to sub-paragraph 41C(3), I do not see how the mere fact that Mr Maxey and Mr Slade, as well as Mr Twambley and Ms Wilkinson, might have been aware of the terms of Article 18.2(a) of the 2013 Articles and the requirement that a proposed assignee of A Shares be designated as a “partner in Amelans”, supports a case of sham given that, by taking the steps that are said by the Defendants to have been taken, including Mr Maxey and Mr Slade becoming partners in Amelans, a transfer of A Shares to Mr Maxey as a “Permitted Transferee” could always have been effectively achieved. iv) As to sub-paragraph 41C(4), I, again, cannot see how the fact that reliance upon the Purported Variations to the 2013 Articles was likely to be ineffective supports a case of sham because the alternative of making Mr Maxey a “Permitted Transferee” for the purposes of Article 18.2(a) of the 2013 Articles, by him becoming a partner in Amelans, was deployed.

[99]Although not pleaded as such, as I have identified above, at the hearing, Mr Chaisty KC placed reliance upon the fact that Mr Maxey and Mr Slade might only been partners together with Mr Twambley and Ms Wilkinson for some three days leading up to the completion of Express’ acquisition. He questions whether they became partners in the true sense of the Partnership Act 1890, rather than as some artificial device or sham used to acquire title to the A Shares, and thus control, on behalf of Express.

[100]However, there is no reason to doubt that the reconstituted firm of Amelans continued for period of time after completion until its authority to practice was revoked by the SRA the following year, with the partners identified on the contemporaneous notepaper referred to in paragraph 98(i) above. Mr Maxey has explained in detail in his evidence why it was necessary for Amelans to continue to operate and why it was decided (and considered necessary) for him and Mr Slade to become partners of Amelans (see paragraphs 7-12 of Maxey 2, and paragraphs 13-34 of Maxey 4), and this evidence is supported by Mr Twambley (paragraphs 53-67). I agree with Mr Lascelles that there is no factual basis for going behind this evidence, or reason to believe that documentation will emerge to cast a different light on this.

[101]I consider that the only realistic possibility in the circumstances is, as suggested by the Defendants, that the appointment of Mr Maxey and Mr Slade as partners prior to completion was a genuine part of the process of the acquisition of the Amelans practice by Express. One can understand why, logically, once Mr Maxey and Mr Slade had become partners of Amelans on 21 July 2023, prior to the meeting of D1’s Board that day, as recorded in the contemporaneous minute of that meeting, Mr Twambley and Ms Wilkinson remained as partners until Express’ acquisition was completed on 24 July 2023. In these circumstances, I see nothing odd in the fact that Mr Twambley and Ms Wilkinson were only partners together with Mr Maxey and Mr Slade for a matter of days.

[102]On proper analysis, therefore, I consider that the allegation of sham is, in reality, founded simply on assertion and micawberism rather than reality, and that the pleaded allegations fall well short of demonstrating a case of sham that stands any real prospect of success, even having regard to the absence of significant documentation relating to Express’ purchase of Amelans.

[103]I would therefore refuse permission to amend so as to introduce the proposed new paragraph 41C of the APofC.

Alleged failure to consider change of control provision

[104]This is the allegation contained in the proposed new paragraph 41G of the APofC.

[105]The allegation is, in essence, that: i) The transfer of the A Shares to Mr Maxey constituted a “Change of Control” within the meaning of clause 14.2 of the 2013 SHA; ii) The Board of D1 had, in the circumstances, a discretion under Clause 14.1 to require Mr Maxey to dispose of the A Shares by serving a Transfer Notice in accordance with clause 14.3; but iii) The Board (i.e. Mr Twambley and Ms Wilkinson) failed, in breach of clause 14.1 of the 2013 SHA, to give any consideration as to whether Mr Maxey should have been required to dispose of the A shares in question.

[106]By way of relief, in the proposed new paragraph 49A of the APofC, it is alleged that by reason of the matters set out in paragraph 41G, the Claimants are entitled to an injunction restraining the Defendants from acting upon the transfer of the A Shares, and to the extent necessary, an order reconstituting the Board of D1 in order to enable it to exercise its discretion “in accordance with its duties of good faith.”

[107]It is, as I see it, reasonably arguable that the transfer of the A Shares to Mr Maxey did amount to a “Change of Control”, thus potentially engaging clause 14 of the 2013 SHA, and the discretion of the Board under clause 14.1 to require the “Changed Shareholder” to transfer their shares. However, the Claimants must show that they have a real prospect of establishing at trial that there was some breach of clause 14.1 of the 2013 SHA that entitles them to some form of relief.

[108]The essence of the case advanced on behalf of the Claimants is that there is clear scope to argue that the Board did not act reasonably and in the best interests of D1 in failing to give consideration as to whether Mr Maxey should be required to dispose of the A Shares transferred to him. As the case is put in the Claimants’ Skeleton Argument: “The indications are that the driving force for Mr Twambley was to maximise the price paid by Express Solicitors Ltd and that it is likely that the price paid reflected the perceived value of the A Shares rather than the assets of “Amelans””.

[109]I note that paragraph 41G of the APofC, whilst pleading that the Board failed to give consideration to the point, does not in terms plead how or why the Board ought to have exercised its discretion in any particular way had it addressed the issue.

[110]In response to this particular issue, the Defendants make the initial points that: i) Clause 14.1 is expressed in permissive terms, simply stating that the Board “may” require disposal to take place rather than providing that the Board “shall consider” whether to require a disposal; and ii) The discretion is framed such that the parties’ rights are entirely unaffected such that the status quo remains unless and until the Board actually decides to exercise its discretion.

[111]The Defendants make the point that the minutes of the Board meeting on 21 July 2023, at paragraph 5.2.1 thereof, expressly recorded that the Board considered that the registration of the transfers of the A Shares to Mr Maxey would promote the success of D1 for the benefit of its members as a whole. It is submitted that, entirely consistent therewith, Mr Twambley and Ms Wilkinson both provide clear evidence, supported by a contemporaneous note setting out their reasoning, that they gave careful consideration to the question of whether the transfer of the A Shares was in the best interests of D1, and concluded that it was, explaining that: i) Mr Maxey, through Express, had been closely involved in D1 for many years; ii) Express had provided significant financial and non-financial contribution to the business; iii) Mr Maxey was an experienced personal injury solicitor; and iv) Neither Mr Maxey nor Express was an Unwanted Successor within the meaning of Part 2, Sch.2 to the 2013 SHA. See paragraphs 69-74 of Mr Twambley’s witness statement, paragraph 15 of Ms Wilkinson’s witness statement, and Mr Twambley’s contemporaneous note dated 21 July 2023.

[112]The Defendants accept that the Board (i.e. Mr Twambley and Ms Wilkinson) did not give separate consideration as to whether it would be in the interests of D1 for Mr Maxey to serve a Transfer Notice. However, Mr Lascelles pointed to paragraph 76 of Mr Twambley’s witness statement where he explains why he considered that it would have been absurd to have done so:

“…We had already just given detailed and careful consideration to whether it would be in the best interests of IL4U for the A shares to be transferred to Mr Maxey. We could not decide that it was in the best interests of IL4U that the shares be transferred to him and then immediately turn around and say it was in the best interests of IL4U that he not have the shares. That would have been a complete and utter nonsense.”

[113]The Defendants submit that, in the circumstances, the Claimants have no real prospect of successfully showing that the lack of separate, specific consideration of serving a Transfer Notice was unreasonable, let alone that it was irrational, arbitrary or capricious, or that it would have made any difference. For what it is worth, it is pointed out that at a Board Meeting of D1 on 12 December 2024, Mr Maxey and Mr Slade considered whether any Transfer Notice should be served under clause 14, and resolved that it ought not to be.

[114]The Defendants further submit that there is no basis in law or in fact Court to grant the form of relief that is referred to in paragraph 49A of the APofC.

[115]I have concluded that, at least for the purposes of the Amendment Application, this particular issue stands and falls with the Claimants application to amend so as to allege that the removal of the Slot Price Differential was in breach of the obligation in clause 5.1(a) of the 2013 SHA to act in good faith towards D1 and its shareholders as a whole. I consider it reasonably arguable that consideration should at least have been given to the service of a Transfer Notice following the transfer of the A Shares to Mr Maxey, if only to dismiss the suggestion. However, if there is nothing in the complaint that the new Board, post completion, acted in breach of the obligation of good faith under clause 5.1 of the 2013 SHA in respect of the removal of the Slot Price Differential, and the application to amend so as to include such a claim is thus refused, then I do not consider that there can be any real prospect of success in relation to the present issue in that it is, essentially, bound up with much the same commercial considerations.

[116]It seems to me that the Claimants need to demonstrate not only that consideration ought to have been given to the exercise of discretion under clause 14, but that proper consideration thereof would have required the Board to require that a Transfer Notice be served. If Mr Twambley’s reasoning in paragraph 76 is not open to serious challenge, which I consider that it would not be if there is nothing in the breach of the obligation of good faith issue, then I consider that there can be no merit in this particular line of argument.

[117]As I have concluded below, I do not consider that there is any real prospect of the breach of obligation of good faith case succeeding at trial. I consider that it must therefore follow that there is therefore no real prospect of this allegation of failure to consider the change of the control provision in clause 14 of the 2013 SHA succeeding. I therefore consider that the application to amend so as to add the proposed new paragraph 41G of the APofC should be refused.

[118]I would add that, in any event, I agree that, unless and until the discretion is exercised by the Board under clause 14 of the 2013 SHA, the relevant transfer of shares remains valid and effective. The Claimant seek an order that the Board be reconstituted so that the discretion might be exercised afresh. However, as I have held above, the Board comprising Mr Maxey and Mr Slade is properly constituted, and by the resolution dated 12 December 2024, the Board has resolved that a Transfer Notice is not required. In these circumstances, it seems to me that it would be necessary for the Claimants to now challenge the latter resolution. This would, as I see it, be an impossible task if the application to amend so as to allege breach of the obligation of good faith fails, which I consider that it should.

Alleged breach of the obligation of good faith

[119]Clause 5.1(a) of the 2013 SHA provided that:

“The Board hereby agree that they will (subject to their statutory duties): …at all times act in good faith towards the Company and the Shareholders as a whole;”

[120]In paragraph 43 of the Particulars of Claim, it is pleaded that the removal of the Slot Price Differential was:

“(1) to the significant personal financial advantage of the Second and Third Defendants given that, as stated above, Express Solicitors was each year buying a significant number of slots (in excess of £1 million per year) such that the above proposed change would result in that firm receiving significantly more slots for an equivalent spend; and (2) to the significant financial disadvantage of the Founding Shareholders (including, in each case, the Claimants) in that the additional value which the Founding Shareholders previously enjoyed would be removed leading to them receiving a reduced number of leads for an equivalent spend.”

[121]The case as pleaded in the proposed new paragraph 44A of the APofC is that the removal of the Slot Price Differential was in breach of the obligation in clause 5.1(a) in that: i) “As is set out in paragraph 43 above” it was to the benefit of Panel Members only and of “no conceivable benefit to the Founding Shareholders”; and ii) It gave rise to a conflict of interest for Mr Maxey and Mr Slade due to their interest in Express, being a Panel Member, which gave them a “significant financial interest in this decision”, and a “Board which was as conflicted as the First Defendant’s when taking the decision to remove the Slot Price differential cannot possibly have been acting in good faith towards the Founding Shareholders.”

[122]The law relating to express obligations of good faith, and in particular the scope thereof, was fairly recently considered by the Court of Appeal inRe Compound Photonics Group Limited

[2022] EWCA Civ 1371

. I consider that one can extract from the lead judgment of Snowdon LJ therein (with whom Newey and Carr LJJ agreed) the following, which I do not understand to be in dispute: i) An express duty of good faith must take its meaning from the context in which it is used – see at [147]-[148]. ii) The core meaning of an obligation to act in good faith is to act honestly, and (depending on the context) it may be that the obligation extends no further – see at [149]-[151], and [208]-[209]. iii) Alternatively, the duty may extend to prohibit conduct that is in bad faith, such as that which would be regarded as commercially unacceptable to reasonable and honest people, albeit that they would not regard it as dishonest – see at [241]. iv) Any further requirements of an express duty of good faith must be capable of being derived, as a matter of interpretation or implication from the other terms of the contract in issue – see at [243]. i) The duty of good faith is generally not intended to impose an obligation that could be described as “demanding” or more than “modest” - see at [240].

[123]Mr Lascelles, on behalf of the Defendants, draws my attention to the decision of the Court of Appeal in Soteria Insurance Limited v IBM United Kingdom Limited

[2022] EWCA Civ 440

, and to Coulson LJ having therein observed that: i) Demonstrating a breach of an obligation or duty of good faith is a high hurdle – see at [121]; and ii) A person does not act in bad faith merely because they are motivated by commercial self-interest, in the absence of reprehensible or unconscionable conduct – see at [123].

[124]Given that the scope of the obligation of good faith in the present case depends upon a consideration of context, I consider that it would be wholly inappropriate on the hearing of the present application to amend the Particulars of Claim to seek to reach any conclusions in respect thereof, and that I must proceed on the basis that it may be possible to demonstrate at trial that the obligation extends to conduct which would be regarded as commercially unacceptable to reasonable and honest people, albeit that they would not regard it as dishonest, as well as to dishonest conduct.

[125]In paragraph 20(10) of the Claimants’ Skeleton Argument it is asserted, in short terms, that:

“For the reasons particularised in the draft, it [i.e. the allegation of breach of the obligation of good faith] is a point raised which again meets the threshold.”

[126]In the course of submissions, Mr Chaisty KC submitted that the Defendants’ evidence clearly raises issues in relation to the commercial reasoning behind the removal of the Slot Price Differential that cannot be resolved at this stage. He referred again to Okpabi v Royal Dutch Shell Plc (supra), making the point that I should avoid conducting a mini trial, and exercise judicial restraint so far as attempting to evaluate the evidence at this preliminary stage of the proceedings is concerned.

[127]Further, so far as the existence of the conflict of interest identified in paragraph 44A(2) of the APofC is concerned, Mr Chaisty KC referred me to a passage in Hollington on Shareholders’ rights, 10th Ed, at 5-67, where the learned authors, by reference to what had been said by Vinelott J in Motivex v Bulfield

[1998] BCLC 104

at 121d, commented that:

“If the directors have a significant personal interest in the impugned transaction, which does not put them in breach of their duty to avoid a conflict of interest, the court will scrutinise their motivation and reasoning process with care in the context of their compliance with other duties, particularly the duty to promote the interests of the company…”

[128]Mr Chaisty KC submits that, given this requirement to scrutinise the directors’ motivation and reasoning process with care, where there is a conflict of interest such as that identified in the present case, this is not an exercise that can properly be carried out at this stage of the proceedings, and is a matter for trial.

[129]In response to these submissions, Mr Lascelles, on behalf of the Defendants takes the short point that the facts pleaded in paragraph 44A are insufficient to demonstrate dishonesty, or other bad faith conduct. This, he submits, is the end of the Claimants’ case of good faith.

[130]However, Mr Lascelles went on to submit that, in any event, regard has to be had to the context in which the present allegation of lack of good faith claim arises, including the following facts and matters, namely: i) Subject to the rectification issue, the Board had the power to remove the Slot Price Differential, having the express power pursuant to clause 4.2(d) of the 2013 SHA to vary the amount of the Service Charge - see the First Judgment at [79] and [102]. ii) Clause 5.1(a) of the SHA did not require the Board to act in good faith solely “towards the Founding Shareholders”, but rather the obligation was to act in good faith towards “the Company and the Shareholders as a whole”, where “Shareholders” was defined by clause 1.1 as meaning “together the ‘A’ Shareholder and the ‘B’ Shareholders”.

(d) of the SHA, the Board agreed that it would:

“Administer the Company and the Business for the benefit of all Shareholders and Panel Members”

. The Defendants submit that this recognises that the Board might have to strike a balance between Shareholders and Panel Members, and that it cannot amount to acting in bad faith to do so.

[131]On the basis of the above, Mr Lascelles observed that it was plainly possible for a board of directors to decide to equalise the amount paid by the Shareholders and Panel Members for slots. He submitted that it followed, as a matter of logic, that the Claimants cannot be correct to allege that there was a breach of good faith merely by virtue of the removal of the Slot Price Differential. Otherwise, he submitted, any board of directors of D1 that removed the Slot Price Differential would be acting dishonestly or otherwise in bad faith, thus rendering any ability to remove the Slot Price differential tantamount to illusory.

[132]Mr Lascelles further submitted that, in any event, the Claimants’ suggestion that the decision was of no conceivable benefit to the Founding Shareholders is mere assertion unsupported by evidence or reasoning. He submits that the case of no conceivable benefit is not only unsupported by any evidence whatsoever, but is contradicted by the undisputed evidence of Mr Maxey, including that: i) The decision not to continue the Slot Price Differential was a commercial decision taken to drive forward D1’s business acting in D1’s best interests and those of its shareholders. ii) The Board believed that the Slot Price Differential worked as a disincentive to firms within the current panel and would put off potential new entrants. iii) The Board also believed that if the slot prices were equalised then D1 would receive much greater funding, including from Express, which would benefit all, including Founding Shareholders. iv) Such additional funding was needed to ensure that the scheme was large enough to be a dominant force in a rather fragile PI marketplace, with greater investment resulting in greater brand recognition and more leads. See Maxey 4 at paragraphs 35–56, as supported by Mr Slade at paragraph 4.

[133]Mr Lascelles submitted that Mr Maxey’s position as so expressed is entirely consistent with what he told shareholders in a circular email dated 3 October 2023 giving advance notice of the intention to remove the Slot Price Differential. I note that in addition to the considerations identified in paragraph 132 above, in this email Mr Maxey stated that:

“You will be aware that at various times in the scheme’s life, the Board decided to set and vary slot prices and indeed have often operated differential slot pricing in that some of the shareholding firms have had a certain number of slots made available to them for £10,000 whereas other slots for those firms or panel members have been £15,000 per slot (working on a per annum basis).”

[134]This, I believe, reflects the decision taken in 2009, referred to in paragraph 24 of the First Judgment, that Founding Shareholders would not be allowed to purchase additional slots at the reduced rate. Consequently, although Founding Shareholders have had the benefit of the Slot Price Differential, this has been limited so as to prevent Founding Shareholders from taking up spare slots at the reduced rate. Consequently, so far as those additional slots are concerned, the Founding Shareholders are in a similar position to Panel Members.

[135]The Defendants’ position as to the commercial justification for the removal of the Slot Price Differential has been set out in detail in the Defendants’ evidence, and in particular in Maxey 4. However, the Claimants have chosen not to respond to this evidence. It remains unchallenged and is not otherwise dealt with in the witness statement of Mr Powell in support of the Amendment Application.

[136]As to conflict of interest, Mr Lascelles submits that the materials before the Court demonstrate that the Claimants simply cannot be correct with their allegation that Mr Maxey and Mr Slade were so conflicted that they could not in good faith have decided to remove the Slot Price Differential. The point is made that it is not dishonest, nor in bad faith, simply for a person to make a decision which will benefit themselves.

[137]Mr Lascelles made the following further points in respect of the alleged conflict of interest: i) He submits that a duty of good faith is inherently different from a duty to avoid a conflict of interest, and that it is perfectly possible for a party still to act in good faith where there is a conflict of interest. He submits that this is apparent, for example, from the fact that the Companies Act 2006 treats the various directors’ duties as separate and acknowledges that (for example) a director can be directly interested in a proposed transaction with the company if he declares the nature and extent of the same (s177(1) of the 2006 Act), and from the fact that Article 9 of the 2013 Articles expressly permits a director to a vote in respect of such a transaction despite that interest. ii) Further, he submits that if a Board differently constituted could (acting in good faith towards the Company and the Shareholders as a whole) have decided to remove the Slot Price Differential, then it is perverse and illogical to allege (as the Claimants do) that a board constituted by Messrs Maxey and Slade was necessarily unable to make such a decision because they had a conflict. He submits that this would amount to a fetter on the Board’s powers with no basis in D1’s constitutional documents or ordinary legal principles.

[138]On the basis of the above, it was submitted on behalf of the Defendants that the Claimants stand no real prospect of success in respect of their lack of good faith allegations in paragraph 44A of the APofC.

[139]I consider that, in determining this aspect of the Amendment Application, it is necessary to begin at least by focusing upon the intended pleaded case, and whether that discloses a case that, on its face, has a real prospect of success at trial. As to this, I agree with Mr Lascelles that the facts pleaded are insufficient to show dishonesty, or other bad faith conduct even if one limits the requirement to commercially unacceptable conduct. I do so for the following reasons: i) As to paragraph 44A(1) of the APofC, there is no explanation as to why the fact of the Slot Price Differential being of significant financial disadvantage to the Founding Shareholders, and being only of benefit to the Panel Members leads to the conclusion that the Board of D1, in removing the Slot Price Differential, had acted in a commercially unacceptable way. This potentially could have been done by way of, for example, a plea that the removal of the Slot Price Differential had no proper commercial purpose, explaining why that was the case. However, there is no such plea, merely a bare assertion that the removal of the Slot Price Differential was of no conceivable benefit to Founding Shareholders, without explaining why this was the case. ii) As to paragraph 44A(2), as Mr Lascelles points out, the mere fact that Express stood to benefit, and that there might have been a conflict of interest between the position of Mr Maxey and Mr Slade as principles of Express, whilst also being directors of D1, does not, in itself, mean that they acted in a commercially unacceptable way in causing D1 to remove the Slot Price Differential. It is pleaded that, given such conflict, the decision to remove the Slot Price Differential cannot possibly have involved acting in good faith towards the Founding Shareholders. However, no facts are pleaded in support of this assertion supporting a case of of dishonesty or of commercially unacceptable behaviour falling short of dishonesty, other than the fact of the conflict of interest and the fact that Express stood to benefit. However, this cannot, as I see it, be enough.

[140]Even if it is not right, as I consider that it is, to decide the point on the basis of a simple consideration of the case pleaded in paragraph 44A, I agree with Mr Lascelles that when one begins to examine the evidence, the fact of the matter is that the allegation that the removal of the Slot Price Differential was of no conceivable benefit to the Founding Shareholders remains a bare assertion, as does the allegation that the existence of the conflict of interest means that the decision to remove the Slot Price Differential cannot possibly have been acting in good faith towards the Founding Shareholders.

[141]As pointed out on behalf of the Defendants, the good faith provided for by clause 5.1(a) requires to be shown towards “the Company and the Shareholders as a whole”, and clause 5.1(d) provides for the Board to administer D1 and “the Business”, “for the benefit of all the Shareholders and Panel Members”. I agree with Mr Lascelles that this demonstrates that the Board might have to strike a balance between Shareholders and Panel Members.

[142]Further, by way of the evidence from Mr Maxey and Mr Slade referred to in paragraph 132 above, the commercial rationale for removing the Slot Price Differential, and as to why such a course of action has been considered by Mr Maxey and Mr Slade to be in the best interests of D1 and its Shareholders (including Founding Shareholders), and/or as being for the benefit of “all the Shareholders and Panel Members”, has been explained in very considerable detail. No evidence has been filed to gainsay or challenge such commercial rationale, and no submissions were made criticising the rationale over and above the bare assertion that the same was to the financial disadvantage of the Founding Shareholders.

[143]In the absence of properly reasoned criticism of the commercial rationale provided as to the benefits of removing the Slot Price Differential, it is, as I see it, impossible to conclude that a case of bad faith involving commercially unacceptable behaviour on the part of Mr Maxey and Mr Slade stands any real prospect of success.

[144]I have considered the passage from Hollington (supra) at 5-46 relied upon by Mr Chaisty KC, but I do not consider that this takes matters any further. Certainly, the Court will be astute to scrutinise motivation and reasoning of directors where a conflict of interest exists. However, this does not, in my judgment, detract from the point that where, as in the present case, a detailed commercial rationale and justification has been provided for the actions that are sought to be impugned that is not challenged on the evidence, and in respect of which no specific or particularised criticism is made apart from a bare assertion that the actions are to the detriment of the party alleging the breach of the obligation of good faith, the Court cannot properly come to the conclusion that the Claimants stand any real prospect of establishing at trial that those sought to be impugned are guilty of commercially unacceptable behaviour.

[145]I do not consider this to be in any sense a mini trial of contested evidence, or judicial overreach. Rather, it is a recognition that where breach of an obligation of good faith as alleged, it is incumbent upon the party seeking to advance such a case to do so on the basis of more than bare assertion, or in the hope that some evidence will turn up to demonstrate bad faith.

[146]In the circumstances, I have concluded that I should refuse permission to amend so as to introduce the new paragraph 44A of the APofC.

Rectification

[147]By paragraphs 52 to 57 of the APofC, the Claimants seek to resurrect, now on the basis of a case as pleaded in these paragraphs, what is in essence the rectification claim that I dealt with in paragraph 75-80 of the First Judgment. It is, I consider, important to understand that I then dealt with the case as to rectification in the context of the SJ Application so far as it concerned the Contract/Estoppel Claim, which depended upon a consideration as to whether clause 4.3 of the Supplemental Deed survived the entry into of the 2013 SHA. I held that it did not, and on that basis I granted the Defendants summary judgment on that aspect of the Claimants’ case.

[148]For the purposes of the determination of this aspect of the SJ Application, the unpleaded case in rectification was relied upon in support of an assertion by the Claimants that summary judgment should be refused in respect of the Contract/Estoppel Claim because they would stand a real prospect of success at trial of obtaining rectification of the 2013 Agreement so that it took effect in such a way as to leave unaffected the contractual obligations under clause 4.3 of the Supplemental Deed. On the basis of the unpleaded case and evidence then before me, I rejected this argument, and so the Defendants obtained summary judgment on the Contract/Estoppel Claim.

[149]I have to say that I was somewhat surprised by the inclusion of the pleaded claim for rectification in the APofC. Whilst I had provided that the Claimants should have the opportunity of applying for permission to amend their Particulars of Claim in respect of the Validity Claim, and on that basis deferred further consideration of the Summary Judgment Application so far as it concerned that aspect of the Claimants’ claim, I granted summary judgment against the Claimants in respect of the Contract/Estoppel Claim.

[150]Mr Lascelles, on behalf of the Defendants submits that as the Court has already dismissed the Claimants’ claim in rectification, it is simply not open to the Claimants to resurrect their rectification argument by way of amendment. He submits that the Court has already given a final judgment on which this aspect of the Claimants’ claim was summarily and finally determined. Mr Lascelles relies upon Phosphate Sewage v Molleson (1879) L.R. 4 App. Cas. 801, per Lord Cairns LC, for the proposition that a party cannot seek re-open a judgment, unless there is a new matter which could not have been found with reasonable diligence before the previous judgment, and which entirely changes the case. It is said that this is plainly not the position in the present case.

[151]In the course of oral submissions, Mr Lascelles further relied upon the decision of Miles J (sitting with Master Kaye) in Harrington & Charles Trading Company Ltd v Mehta

[2023] EWHC 2420

. In this case, the claimants had, in obtaining and continuing a worldwide freezing injunction, established that there was a good arguable case in relation to the underlying claims. Raising the same arguments as had been deployed in seeking to resist the granting of the worldwide freezing injunction, the defendants applied to strike out the claims, alternatively for summary judgment thereon, arguing that the claims had no real prospect of success. It was held that this latter application by the defendants amounted to an abuse of process and a collateral attack on the previous decision that the claimants had a good arguable case, and so the defendants’ application was dismissed on this basis. The Court drew a distinction between cause of action and issue estoppel on the one hand, and abuse of process as exemplified by cases such as Henderson v Henderson

(1844) 6 QB 288

and Hunter v Chief Constable of the West Midlands Police

[1982] AC 529

on the other hand. The former required a determination of some cause of action or issue. However, as Miles J made clear at [67] et seq, a complaint of abuse of process could be deployed in interlocutory proceedings, notwithstanding that there had been no final determination of a cause of action or issue, where a party was seeking to re-argue point that had been decided against them.

[152]Mr Chaisty KC submits that I clearly intended by the First Judgment to leave open the question of rectification for further consideration by way of application to amend the Particulars of Claim, and so, in these circumstances, it could hardly be regarded as an abuse of process for the Claimants to make such an application.

[153]I have to say that, as touched on above, I had intended that any application to amend should be limited to the Claimants’ Validity Claims. This I believe is supported by the fact that I unconditionally granted summary judgment in respect of the Contract/Estoppel Claims, and paragraph 2 and 4 of my Order dated 2 December 2024 only address the Validity Claims. As I have said, the rectification arguments only addressed the attack on the Contract/Estoppel Claims.

[154]Further, unlike in relation to the various arguments raised in relation to the Validity Claim, which I left open, I did formally decide the rectification argument against the Claimants by paragraph 80 of the First Judgment.

[155]In the circumstances, having decided the rectification arguments in the context of granting final judgment in favour of the Defendants on the Contract/Estoppel Claim, I consider that a cause of action or issue estoppel arises. I consider this particularly so bearing in mind that the only purpose for seeking to resurrect the rectification argument can be to seek to persuade the Court that it should come to a different conclusion in relation the Contract/Estoppel Claim and allow the Claimants to argue that the contractual right to the Slot Price Differential as provided for by the Supplemental Deed remains alive and can be enforced. Alternatively, I consider that it would be an abuse of process for the Claimants to resurrect the rectification arguments, it having been decided that there is no merit in them by the First Judgment. This would amount, amongst other things, to a collateral attack on my decision to grant summary judgment on the Contract/Estoppel Claim. I consider that the Claimants’ only remedy would be to seek to appeal my decision, and that is not open to me to reopen the same.

[156]However, should I be wrong in relation to these questions of cause of action and issue estoppel, and abuse of process, I will consider whether, had the Claimants not been so barred from pursuing their rectification case, it would be right, on considering the application on its merits, to grant permission for them to amend in order to advance such case.

[157]As I have identified, the case to be advanced is now pleaded out in paragraphs 52-57 of the APofC. By paragraph 57 it is alleged that the 2013 SHA should be rectified so that it included the following provision: “Save that, for the avoidance of doubt, nothing in this agreement shall be taken to have the effect of altering or removing the pre-existing contractual rights to differential pricing for the Panel Service Charges”.

[158]In paragraph [78] of the First Judgment, I held that the only real evidence to support there having been any mistake on the part of any party to the 2013 SHA was that, for the time being following the entry into of the 2013 SHA, the Slot Price Differential continued to be applied, and that that was not enough in itself to support a case of rectification.

[159]At paragraph [79] of the First Judgment I noted that:

“… although there has been extensive correspondence and communication between the parties both before and after the entry into of the 2013 SHA, no document has been identified or referred to as supporting a case of rectification, i.e. as going any way to identify and prove the factual basis for any common mistake or assumption or for a finding of any unilateral mistake on the part of the Claimants that D1 (by its board) sat back and let the Claimants make.”

[160]In paragraph [80] of the First Judgment, I said that I considered that the Claimants’ rectification case was, in reality, no more than an assertion of a claim in rectification, and on that basis held that there was no real prospect of it succeeding at trial.

[161]Paragraph 53 of the APofC sets out a number of facts and matters that are said to support the case that there was a common intention of the parties to the 2013 SHA that the Slot Price Differential would remain. I note therefrom the following in particular: i) Reliance is placed upon a note circulated by Mr Twambley in March 2010 to the Founding Shareholders. This is said to support a contention that at no point was it the common intention of the then shareholders in D1 that the Slot Price Differential would be altered or that the directors would have the power to remove it. It is pleaded that, to the contrary, this document recorded an intention to incorporate the terms of the Supplemental Deed (which embodied the Slot Price Differential) into a consolidated shareholders’ agreement, as well as addressing how the Slot Price Differential was intended to operate where two Founding Shareholder firms merged. ii) Reference is further made to a draft report prepared by Mr Anderson (of Ralli), and to drafts of an updated shareholders’ agreement having been prepared and circulated amongst the members in 2010 and 2011, it being asserted that it was the common intention of the parties throughout that the Slot Price Differential would not be altered nor would the directors be granted the power to remove it. iii) Reference is also made to a proposal to revise and update D1’s corporate documentation being resurrected in or around September 2012, without there being any express common intention by the parties to change the commercial arrangements, and in particular the Slot Price Differential. iv) Reference is subsequently made to Weightmans LLP being instructed, and to Ian Vickery of that firm circulating an initial advice relating to corporate structure. v) Reference is further made to drafts of updated corporate documents being produced and circulated, and to the fact of correspondence with the then directors of D1 in relation thereto, including an email from Ms Wilkinson to the Founding Shareholders imploring them to sign the updated documents and stating that there was “… No underlying or hidden motive behind what we are trying to achieve.”.

[162]These facts and matters were relied upon by the Claimants in submissions in support of a case that, having regard to the fact that further documentation might well come to light on disclosure and prior to trial shedding further light on the matter, there was at least a real prospect of the Claimants establishing at trial that there was a common intention on the part of the parties to the 2013 SHA that the contractual right to the Slot Price Differential should continue, and that the entire agreement provision in clause 27 of the 2013 SHA had been included by mistake in so far as it extended to this contractual right. On this basis, it was submitted that the Claimants have a real prospect of establishing at trial a good case as to rectification on the grounds of common mistake.

[163]Alternatively, it is submitted that the above facts and matters support a case that stands a real prospect of success to the effect that if the common intention regarding the continuation of the contractual right to the Slot Price Differential was not shared by the directors of D1, then the latter were aware of the mistake on the part of the other parties to the 2013 SHA, yet allowed the other parties to enter into the 2013 SHA in circumstances such as to give rise to a good claim for rectification on the grounds of unilateral mistake.

[164]I am not satisfied that any of the facts and matters set out in paragraph 53 of the APofC amount to more than an assertion that because nothing was specifically said in the documentation identified to the effect that any new shareholders agreement would not preserve the contractual right to the Slot Price Differential, there was a common intention that the latter would, in fact, preserve the contractual right to the Slot Price Differential.

[165]It might be said that Mr Twambley’s March 2010 note, in making reference to an intention to incorporate the terms of the Supplemental Deed, and in addressing how the Slot Price Differential was intended to operate where two Founding Shareholder firms merged, does take the Claimants’ case beyond mere assertion. However, any reliance that might otherwise be placed upon this note is, I consider, undermined by the contents of a draft shareholders agreement subsequently circulated to the shareholders by Ms Wilkinson under cover of an email dated 10 January 2011. The email referred to the fact that a working group had been established comprising representatives of Amelans, Pannone, JMW and Ralli that had had four meetings since 23 March 2010, from which had been produced, amongst other things, a new set of articles of association of D1, and a new shareholders’ agreement. The documents were circulated with a view to being agreed by the various interested parties. The front sheet to the draft shareholders’ agreement refers to Ralli, together with Mr Anderson’s initials, suggesting that the document was circulated with, at least, his approval, following the four meetings that had taken place.

[166]Significantly, the draft shareholders’ agreement so circulated, contained a clause 34 that included the following:

“34 Notwithstanding the Directors’ general powers in relation to the management of the Company the Directors shall have the specific power to maintain a panel (“the Panel”) of participants which will include Law Firms which are not themselves Member Firms and (if they so decide) to apply differential pricing between Member Firms and the other Law Firms …”

[167]As I read this proposed provision, it did envisage a regime under which the Slot Price Differential was, at least, very much up for grabs. This, to my mind, wholly undermined the suggestion that throughout the period referred to in paragraph 53 of the APofC, and up to the time of the entry into of the 2013 SHA, there was a common intention that the contractual right to the maintenance of the Slot Price Differential should be positively preserved.

[168]Further important considerations are the following: i) The negotiations leading up to the 2013 Articles and the 2013 SHA all took place between solicitors, and solicitors’ firms. If it had been the common intention of the parties that the contractual right to the Slot Price Differential provided for by the Supplemental Deed should be continued, then one would have expected this to have been reflected in the 2013 SHA. As Mr Twambley points out at paragraph 22 of his witness statement, the documents were considered by corporate teams within the Founding Shareholders – which included Mr Anderson of Ralli. ii) The wording of Recitals (C) and (D) to the 2013 SHA could not have been clearer to the effect that there were “Current Documents”, comprising the shareholders’ agreement dated 21 November 2002 and subsequent deeds of variation (which must have included the Supplemental Deed and clause 4.3 thereof), and that the parties had agreed to “terminate” the “Current Documents and enter into this agreement for the purpose of documenting their rights and responsibilities as shareholders of the Company.” iii) As Mr Lascelles points out, the presence of an entire agreement clause tells against (although does not preclude) a finding of rectification, which requires convincing proof in such circumstances – see Snamprogetti Ltd v Phillips Petroleum Co UK Ltd

[2001] EWCA Civ 889

at [32], per Tuckey LJ; iv) Where the contract is a multi-party agreement and the rights in question affect all the parties, the mistake must similarly be made by or known to all the parties – see SATA Internacional - Azores Airline SA v Hi Fly Ltd

[2024] EWHC 2762 (Comm)

[169]Given the participation of the Claimants in the negotiations leading up to the entry into of the 2013 SHA, and what has been produced, I consider that there must be only a speculative rather than a realistic prospect of documentation emerging during the process of discovery to shed a different light on matters, and to provide an evidential basis for the Claimants’ case.

[170]In the circumstances, I do not consider there to be any evidential basis for the claim in rectification going beyond mere assertion. Consequently, even apart from the difficulties created by cause of action or issue estoppel and/or abuse of process, I do not consider that the claim in rectification that the Claimant seek to pursue has any real prospect of success at trial.

[171]In the circumstances, I consider that the application to amend so as to add paragraphs 52 to 57 of the APofC should be rejected.

Conclusion

[172]For the reasons set out above, I have concluded that permission to amend should be refused in respect of each of the amendments that the Claimants seek to make to their Particulars of Claim. In the circumstances, the Amendment Application should be dismissed.

[173]The consequence of this is that paragraph 2 of my Order dated 2 December 2024 granting summary judgment in respect of the Claimants’ claims as to the validity of:(i) the appointment of Mr Maxey and Mr Slade as directors;

(ii) the transfer of A shares in D1 to Mr Maxey; and

(iii) the purported decision of the board of the D1 to remove the Slot Price Differential, will take effect.

JMW Solicitors LLP & Ors v Injury Lawyers 4U Limited & Ors [2025] EWHC 1045 (Ch)

Should the proposed amendments be permitted? 32

The proposed amendments

Messrs Maxey and Slade were not validly appointed directors

(s) of the majority of “A”

The transferof the A Shares to Mr Maxey was invalid

Breach of good faith obligations

Rectification

Further appointment and ratification relied on by the Defendants

The correct approach to take on an application to amend

Should the proposed amendments be permitted?

Only entitled to appoint two directors point

Conclusion in relation to the appointment of Mr Maxey and Mr Slade

Confirmation of appointment and ratification

Validity of the transfer of A Shares to Mr Maxey

Allegation that “Amelans” meant only the partnership at the date of the 2013 SHA

Implied term preventing transfer if Amelans ceased to be an independent firm

Alleged sham

Alleged failure to consider change of control provision

Alleged breach of the obligation of good faith

(d) of the SHA, the Board agreed that it would:

Rectification

Conclusion

Cited in 2 later judgments