“10. The legal framework is not in dispute and can be stated succinctly here. The starting point isCPR 17.3 which confers on the Court a broad discretionary power to grant permission to amend. The case-law is replete with guidance as to how that discretionary power should be exercised in different contexts. I need cite only two cases which taken together provide a helpful list of factors to be borne in mind when considering an application such as this: CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd[2015] EWHC 1345 (TCC) and Quah Su-Ling v Goldman Sachs International[2015] EWHC 759 (Comm) . From those cases, I draw together the following points. a) In exercising the discretion underCPR 17.3 , the overriding objective is of central importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted. b) A strict view must be taken to non-compliance with the CPR and directions of the Court. The Court must take into account the fair and efficient distribution of resources, not just between the parties but amongst litigants as a group. It follows that parties can no longer expect indulgence if they fail to comply with their procedural obligations: those obligations serve the purpose of ensuring that litigation is conducted proportionately as between the parties and that the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately is satisfied. c) The timing of the application should be considered and weighed in the balance. An amendment can be regarded as 'very late' if permission to amend threatens the trial date, even if the application is made some months before the trial is due to start. Parties have a legitimate expectation that trial dates will be met and not adjourned without good reason. Where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. A heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The timing of the amendment, its history and an explanation for its lateness, is a matter for the amending party and is an important factor in the necessary balancing exercise: there must be a good reason for the delay. d) The prejudice to the resisting parties if the amendments are allowed will incorporate, at one end of the spectrum, the simple fact of being 'mucked around' to the disruption of and additional pressure on their lawyers in the run-up to trial and the duplication of cost and effort at the other. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission. If allowing the amendments would necessitate the adjournment of the trial, this may be an overwhelming reason to refuse the amendments. e) Prejudice to the amending party if the amendments are not allowed will, obviously, include its inability to advance its amended case, but that is just one factor to be considered. Moreover, if that prejudice has come about by the amending party's own conduct, then it is a much less important element of the balancing exercise.” a) In exercising the discretion underCPR 17.3 , the overriding objective is of central importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted. b) A strict view must be taken to non-compliance with the CPR and directions of the Court. The Court must take into account the fair and efficient distribution of resources, not just between the parties but amongst litigants as a group. It follows that parties can no longer expect indulgence if they fail to comply with their procedural obligations: those obligations serve the purpose of ensuring that litigation is conducted proportionately as between the parties and that the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately is satisfied. c) The timing of the application should be considered and weighed in the balance. An amendment can be regarded as 'very late' if permission to amend threatens the trial date, even if the application is made some months before the trial is due to start. Parties have a legitimate expectation that trial dates will be met and not adjourned without good reason. Where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. A heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The timing of the amendment, its history and an explanation for its lateness, is a matter for the amending party and is an important factor in the necessary balancing exercise: there must be a good reason for the delay. d) The prejudice to the resisting parties if the amendments are allowed will incorporate, at one end of the spectrum, the simple fact of being 'mucked around' to the disruption of and additional pressure on their lawyers in the run-up to trial and the duplication of cost and effort at the other. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission. If allowing the amendments would necessitate the adjournment of the trial, this may be an overwhelming reason to refuse the amendments. e) Prejudice to the amending party if the amendments are not allowed will, obviously, include its inability to advance its amended case, but that is just one factor to be considered. Moreover, if that prejudice has come about by the amending party's own conduct, then it is a much less important element of the balancing exercise.”
“(1) The subscribers of a company's memorandum are deemed to have agreed to become members of the company, and on its registration become members and must be entered as such in its register of members. (2) Every other person who agrees to become a member of a company, and whose name is entered in its register of members, is a member of the company.”
“(1) In the Companies Acts ‘share’, in relation to a company, means share in the company's share capital.”
“(1) The shares or other interest of any member in a company are transferable in accordance with the company's articles.”
“(1) In the case of a company registered in England and Wales or Northern Ireland, a certificate under the common seal of the company specifying any shares held by a member is prima facie evidence of his title to the shares.”
“(1) A company may not register a transfer of shares in or debentures of the company unless— (a) a proper instrument of transfer has been delivered to it, or (b) the transfer— (i) is an exempt transfer within theStock Transfer Act 1982 (c. 41), or (ii) is in accordance with regulations under Chapter 2 of this Part.” (a) a proper instrument of transfer has been delivered to it, or (i) is an exempt transfer within theStock Transfer Act 1982 (c. 41), or (ii) is in accordance with regulations under Chapter 2 of this Part.”
“An instrument of transfer of the share or other interest of a deceased member of a company— (a) may be made by his personal representative although the personal representative is not himself a member of the company, and (b) is as effective as if the personal representative had been such a member at the time of the execution of the instrument.” (a) may be made by his personal representative although the personal representative is not himself a member of the company, and (b) is as effective as if the personal representative had been such a member at the time of the execution of the instrument.”
“(1) A company must, within two months after the date on which a transfer of any of its shares, debentures or debenture stock is lodged with the company, complete and have ready for delivery— (a) the certificates of the shares transferred, (b) the debentures transferred, or (c) the certificates of the debenture stock transferred. (a) a transfer duly stamped and otherwise valid, or (b) an exempt transfer within theStock Transfer Act 1982 (c. 41), but does not include a transfer that the company is for any reason entitled to refuse to register and does not register.”
“The nature of the title to shares in companies with which the company is concerned is at all times that of the registered holder, who has a ‘legal estate’. The person who holds the shares is entitled to vote them. Of course there are equitable remedies if that person holds them as trustee, but those are remedies for the Chancery Court and not for the Companies Court, and they have nothing to do with the statutory remedy of petition and the statutory rights arising under the Companies Act. In my view, transmission by operation of law means some act in the law by which the legal estate passes even though there be some further act (such as registration) to be done; and in my view the mere allegation that there arises a constructive trust – remembering that a constructive trust is frequently a matter of a remedy supplied by a court by way of imposition upon the conscience of the person affected, rather than an existing act in the law – cannot possibly amount to a transmission by operation of law.”
“31. … The right to petition the court under s 459 is conferred only on members and those to whom shares have been transferred by operation of law, and neither Mr nor Mrs Barton falls within those categories. No rights are conferred on them by s 459, and although there may be room for nominal defendants in certain types of proceedings, there is in my view no room for nominal petitioners in this context.”
“It is to be noted that that was not a case in which it was suggested on behalf of the petitioner that execution of the constructive trust on which he sought to rely by the court would lead to retrospective replication of the register of members.”
“Again there was no suggestion made on behalf of the petitioner that he could seek rectification of the members register with retrospective effect.”
“Again it is to be noted that it was not suggested on behalf of the petitioner in Re Quickdome Ltd that his locus could be made good by an application for retrospective rectification.”
“19. This overriding objective-focused decision suggests that Re Company (No 007828 of 1985) would not be decided in the same way 40 years on. In 1985, the court did not have to consider the factors in the modern overriding objective such as delay, cost and proportionality. It is submitted that the nuanced and pragmatic modern approach in Re Contingent and Future Technologies[2023] EWHC 2451 is to be preferred to the pre-Woolf doctrinaire rigidity of Re a Company (No 007828) of 1985).”
“37. The requirement in section 994 for an ‘act or omission of the company’ means that the petitioner must identify something which the company does or fails to do. The alternative requirement – that "the company's affairs are being or have been conducted in a manner that is unfairly prejudicial" to members or the petitioner – does not contain the same stipulation. [The petitioner] can rely on the actions of some other persons, including his fellow shareholders. But the actions must still amount to the conduct of the company's affairs.”
“The judge [in the court below] cited the observations of Powell J in Re Dernacourt Investments Pty Ltd (1990) 2 ACSR 553: The words ‘affairs of a company’ are extremely wide and should be construed liberally: (a) in determining the ambit of the ‘affairs’ of a parent company for the purposes of s 320, the court looks at the business realities of a situation and does not confine them to a narrow legalistic view; (b) ‘affairs’ of a company encompass all matters which may come before its board for consideration; (c) conduct of the ‘affairs’ of a parent company includes refraining from procuring a subsidiary to do something or condoning by inaction an act of a subsidiary, particularly when the directors of the parent and the subsidiary are the same … I would accept these propositions, but with some qualification. (b) may extend to matters which are capable of coming before the board for its consideration, and may not be limited to those that actually come before the board: I do not accept that matters that are not considered by the board are not capable of being part of its affairs. Nonetheless, like the judge, I am unable to see how it can be said that the affairs of Neath and of Osprey were so intermingled that all of the affairs of the latter were the affairs of the former. It would, for example, be quite irrational to suggest that Mr Blyth, when acting as a director of Osprey, was conducting the affairs of Neath.”
“45. The expression ‘the company’s affairs’ in subs 1(a) is of wide ambit and plainly covers all matters decided by the board of directors. Equally plainly, it does not extend to matters which are neither effected by the company nor on its behalf but, for example, concern activities of shareholders solely in that personal capacity and as between themselves. Accordingly, actions or omissions in compliance or contravention of the articles of association of a company may or may not constitute the conduct of the company’s affairs within s 994(1) depending on the precise facts … ”
“Instead, the grant of shares has been treated informally by being the subject of express oral and/or written representations and/or agreements and/or expressions of shared intention from time to time between the parties. These have given rise to equitable entitlements to shares as set out hereinbelow.” (2) In paragraph 28 of the petition it is alleged that “shares have been allocated … from time to time, which have taken effect at law and/or in equity… ”
“P5 (by P1 and under its previous name of Hong) carried out such work in detrimental reliance upon the representation as to its entitlement to 50% of the shareholding in the new UK business”. (4) The particulars in subparagraph (i) under paragraph 28 say: “In the premises and insofar as may be necessary to establish locus standi, relying on the doctrines of proprietary estoppel and/or common intention constructive trust, P5 (by P1) became and is entitled in equity to 50%, alternatively to 48%, of the shareholding in Oriental;” (5) Similarly, the particulars in subparagraph (v) under paragraph 28 say: “In reliance on the promise of a 2% shareholding and/or the said common intention, P2 acted to his detriment by investing some£30,000 in the business and/or by assuming the role of director of Oriental in or about October 2017 and/or by working at the restaurant premises at 2, New Oxford Street as an ‘executive director’, and in so doing, giving up a better paid job as a manager at Burger King” (6) The particulars in subparagraph (w) under paragraph 28 say: “In the premises and/or relying on the doctrines of proprietary estoppel and/or common intention constructive trust, P2 became and remains entitled in equity to 2% of the shareholding in Oriental, if, which the Respondents appear to accept in any event, he did not acquire legal title to his shares”. (7) The particulars in subparagraph (aa) under paragraph 28 say: “Between November 2018 and May 2019, P2 invested approximately another£54,000 on the faith of the promise of another 3% of Oriental’s shares, which was broken by R1 to R4 in failing to pass legal title to those further shares” (8) The particulars in subparagraph (qq) under paragraph 28 say in part: “ … but on the faith of oral promises of shares in Oriental and R8, P4 engaged or continue to engage in employment for Oriental and thereby acted to her detriment”. (9) The particulars in subparagraph (rr) under paragraph 28 say: “In the premises, P4 relied to her detriment on the oral promise of shares and by way of the doctrine of proprietary estoppel, she also has locus standi by virtue of s.994(2) of the 2006 Act.”
“On or about5 October 2017 , with assistance from an accountant, Vincent Lim, Hong-Otto Investment Management Company Limited [later renamed In-Touch, the proposed fifth petitioner] was incorporated by P1 (‘Hong’). P1 was the sole director of Hong. Its issued share capital was 43 shares. 28 of those shares were held by P1 and 15 shares by the wife of R2, Peijin Hong (‘PH’). P1 initially intended to hold any interest that she might have in the proposed UK restaurants through Hong.”