Paul Wanderi Ndungu v SPG Limited (formerly known as Sportpesa Global Holdings Limited) & Ors [2025] EWHC 3039 (Ch)

[2025] EWHC 3039 (Ch)Case No CR-2022-000135
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
IN THE MATTER OF SPG LIMITED (formerly known as SPORTPESA GLOBAL HOLDINGS LIMITED)
AND IN THE MATTER OF THE COMPANIES ACT 2006
Venue Rolls Building, 7 Rolls Buildings, Fetter LaneDate 18 th November 2025
London, EC4A 1NL
Before
MR JUSTICE EDWIN JOHNSON
Between
PAUL WANDERI NDUNGUClaimantSPG LIMITEDDefendantsIVAYLO PETEV BOZOUKOVDefendantKALINA LYUBOMIROVA KARADZHOVADefendantGUERASSIM NIKOLOVDefendantGENE GRANDDefendantNAOGEN INVESTMENT INCDefendant
Duncan Macpherson and Meg Cochrane (instructed by Jury O’Shea LLP) for ClaimantPeter Head (instructed by Mishcon de Reya LLP) for First DefendantJamie Riley KC and James McWilliams (instructed by DLA Piper UK LLP) for Second to Sixth DefendantsHearing Hearing dates: 2 nd, 6 th, 8 th, 9 th, 12 th, 13 th, 14 th, 15 th, 16 th, 19 th, 22 nd May 2025, 11 th July 2025, 24 th July 2025 and 25 th July 2025(further written closing submissions filed on 28 th July 2025, 5 th August 2025 and 21 st August 2025)JUDGMENTRemote hand-down: This judgment was handed down remotely at 11.00am on Tuesday, 18 th November 2025 by circulation to the parties and their representatives by email and by release to the National Archives.

General introduction

[1]The Claimant, Mr Ndungu, is a shareholder in the First Defendant, SPG Limited (formerly known as Sportpesa Global Holdings Limited). He is also a former director of the First Defendant. It is also his case that he was formerly non-executive chairman of the First Defendant’s board of directors.[2]The Claimant has been a shareholder in the First Defendant since the incorporation of the First Defendant on 21st March 2017. The Claimant was the registered holder of 17% of the First Defendant’s issued share capital. Following the issue of new shares by the First Defendant, by three allotments of shares between 2019 and 2022, the Claimant’s shareholding is now recorded as constituting 0.85% of the First Defendant’s issued share capital. The Claimant’s case is that these allotments have constituted an unlawful dilution of his shareholding in the First Defendant, as a result of which his shareholding has been significantly reduced, while the shareholdings of the Second, Fourth and Sixth Defendants in the First Defendant have been significantly increased. This in turn, so the Claimant says, has allowed the Fourth and Fifth Defendants to secure the removal of the Claimant as a director of the First Defendant.[3]The Claimant’s case is that the dilution of his shareholding engaged(i) breaches by the First Defendant of the pre-emption provisions in Sections 561 and 562 of the Companies Act 2006, which the Second and Third Defendants knowingly authorised or permitted,(ii) breaches by the Second and Third Defendants of their duties as directors of the First Defendant, and(iii) breaches of the articles of the First Defendant. In relation to these alleged breaches the Claimant says that the Second and Third Defendants were proceeding in accordance with a scheme to dilute the Claimant’s interest in the First Defendant which had been agreed with the Fourth to Sixth Defendants. The Claimant says that the knowledge and intentions of the Second and Third Defendants in relation to the alleged breaches were also the knowledge and intentions of the Fourth to Sixth Defendants. The Claimant further says that the conduct of the affairs of the First Defendant has been carried out by the Second to Sixth Defendants in a manner unfairly prejudicial to the interests of the Claimant.[4]The Claimant has commenced two sets of proceedings in pursuit of this case. In the first set of proceedings, commenced by Part 8 claim form issued on 19th January 2022, the Claimant seeks relief against the First, Second and Third Defendants, in the form of compensation, pursuant to Section 563 of the Companies Act 2006. In the second set of proceedings, commenced by petition presented on 28th November 2022, the Claimant seeks relief against the Second to Sixth Defendants in respect of the alleged unfair prejudice pursuant to Section 994 of the Companies Act 2006.[5]The claims in the two sets of proceedings are denied by the Defendants.[6]The two sets of proceedings have been consolidated by an order of ICC Judge Prentis made on 25th November 2022. The consolidated set of proceedings (“the Proceedings”) came on for trial before me, in court, on 2nd May 2025. The trial continued, over eleven days, in May 2025, but for various reasons it was necessary to adjourn the completion of the trial to July 2025, for the purposes of hearing the evidence of one witness and, separately, for the purposes of hearing the closing submissions. In the event, and for further reasons, the oral closing submissions were not quite completed in the available time. The closing submissions were completed subsequently, by the filing of further written closing submissions.[7]This is my reserved judgment on the trial of the Proceedings (“the Trial”).[8]At the Trial the Claimant was represented by Duncan Macpherson and Meg Cochrane, counsel. The First Defendant was represented by Peter Head, counsel. The Second to Sixth Defendants were represented by Jamie Riley KC and James McWilliams, counsel. I am grateful to all counsel for their assistance, by their written and oral submissions, in and after the Trial.

The conventions of this judgment

[9]I will refer to the First Defendant as “the Company”. Other definitions are as established in the course of this judgment. Unless otherwise indicated, all references to Sections and Schedules are references to the sections of and schedules to the Companies Act 2006 (“the Act”). Italics have been added to quotations. “KES” is shorthand for Kenyan Shillings. I will be referring to a considerable quantity of email correspondence in the course of this judgment. Where I need to give the time of an email, the time is given in brackets, using a 24-hour clock. It will also be necessary to make several references to the correspondence between the solicitors for the Claimant (Jury O’Shea LLP) and the solicitors for the Second to Sixth Defendants (DLA Piper UK LLP). I will refer to the Claimant’s solicitors as “Jury O’Shea” and to the solicitors for the Second to Sixth Defendants as “DLA”.[10]I will use the expression “the Allotments” to refer to the three allotments of shares in the Company, between 2019 and 2022, which have given rise to the Proceedings. My use of this expression does not in any way pre-judge or carry any implications for(i) issues arising in relation to the lawfulness or effect of the Allotments or(ii) any other issues which I have to decide in this judgment. There were three allotments, which I shall identify as the First, Second and Third Allotments.[11]I have had the benefit of a transcript of the Trial. Where I make reference to extracts from the transcript I give the day, internal pdf page number and line numbers in square brackets and bold print; so [T1/1/1-10] refers to the first day of the Trial, on internal pdf page 1, at lines 1-10.[12]I received a good deal by way of written closing submissions during and after the Trial. It is convenient to explain, at this point, what I received by way of written closing submissions. In advance of the oral closing submissions, which I heard on 24th and 25th July 2025, and after hearing the evidence of the last witness in the Trial, on 11th July 2025, I received written closing submissions from the parties. These were served sequentially, with the Claimant filing and serving his written closing submissions first, and the Company and the Second to Sixth Defendants, respectively, then responding with their written closing submissions. Mr Macpherson, for the Claimant, was unable to complete, in the oral closing submissions, his reply to the oral closing submissions of the Company and the Second to Sixth Defendants. After hearing argument on what I should do in this situation, at the end of the final day of the Trial on 25th July 2025, I delivered a short judgment, pursuant to which I gave directions for further written closing submissions. I gave the Claimant permission to serve written submissions by way of completion of his reply submissions. Those submissions were filed and served on 28th July 2025. I also gave the Company and the Second to Sixth Defendants, respectively, permission to serve further written submissions in response to the Claimant’s written reply submissions. The Second to Sixth Defendants filed and served their further written submissions on 5th August 2025. The Company filed and served its further written submissions on 21st August 2025. I will use the expression “the Reply Submissions” to refer to those written submissions of the parties which were filed and served after the Trial, in order to distinguish them from the principal written closing submissions filed and served in advance of the oral closing submissions.[13]In the narrative sections of this judgment it is necessary to make fairly frequent references to the evidence of the witnesses at the Trial. In those cases where the relevant evidence is disputed or is not admitted I should not, where I make such references, be taken as accepting the evidence, unless I state otherwise. My findings on the evidence of the witnesses which is disputed or not admitted, so far as such findings are relevant to the issues which I have to decide, are set out later in the judgment, when I come to the issues which I have to decide.[14]In terms of the issues which I have to decide, the evidence at the Trial, both documentary and oral, was voluminous. The same applies to the arguments at the Trial, both in written and oral form, which were accompanied by equally voluminous authorities. All this is reflected in the regrettable length of this judgment, which is out of proportion to the essential case which I have had to decide. Even so, and notwithstanding the regrettable length of this judgment, I consider it necessary to spell out that, while all the evidence, arguments and legal authorities put before me at the Trial have been considered and taken into account in my findings and decisions in this judgment, the parties should not expect to find every evidential issue and every argument dealt with expressly in this judgment.[15]Finally, I quote extensively in this judgment from emails, letters and other documents. Each quotation is given as it appears in the relevant document. Original spelling and other errors have not been corrected in the quotations.

The Company and the Business

[16]As I have said, the Company was incorporated on 21st March 2017. The Company is registered in England and Wales and has its registered office in Liverpool. The Company was formed as, and has since its incorporation been a holding company for a global online gaming business which, along with other companies outside its structure, trades under the brand name of Sportpesa. I will refer to the gaming business which trades under this brand name as “the Business”. The Business offers online gambling products such as sportsbooks, live betting and online casino. I understand that the Business itself has traded under the Sportpesa brand name since 2014.[17]On incorporation the Company’s directors were the Claimant and the Second and Third Defendants. The principal shareholders on incorporation were the Claimant (17%), the Fourth Defendant (21%), the Fifth Defendant (22%), and Ms Asenath Wachera (21%). The initial share capital of the Company comprised 100 ordinary shares at an initial price of £1 per share. In November 2018 the share capital of the Company was increased to 100,000 ordinary shares. No direct payments were made by the shareholders for the additional shares. Instead, the Company declared a dividend, which was used to fund the purchase of the additional shares.[18]The Company’s wholly and partially-owned subsidiaries include SPS Sportsoft Limited, an English company, and other Sportpesa companies in Italy, Tanzania, South Africa and Russia. The Company only operates as a holding company and, other than its directors, has no employees or other officers. I will refer to the group of companies comprising the Company and its subsidiaries, all of which are registered in England and Wales, as “the SPG Group”.[19]I understand from the evidence that the original founders of what became the Business, in 2010, were the Fourth Defendant, the Fifth Defendant, and Mr Dickson Mwangi Wathika, a Kenyan businessman and politician (now sadly deceased). Ms Wachera is the widow of Mr Wathika. The Claimant came into the Business in 2014, when the Sportpesa brand was established. The Business has been carried out through entities in Kenya and the Isle of Man which neither the Company nor its subsidiaries own. Instead, the Company’s subsidiaries have had contractual relationships with these entities, pursuant to which the Company’s subsidiaries have provided software and gaming services.[20]So far as Kenya is concerned, the principal entity through which the Business was carried on was, until the suspension of its gaming licence in July 2019 by the Kenyan regulatory authority, a company called Pevans East Africa Limited (“Pevans”), a Sportpesa company based in Kenya. Pevans was incorporated in Kenya in 2011. The Business was founded through Pevans, and it was Pevans which launched the Sportpesa brand in 2014, using the M-Pesa service. The M-Pesa service allows payments to be made by mobile phone without a bank account. I understand that its use is widespread in Kenya and elsewhere in East Africa. The operation of the Business allowed customers of Safaricom, the company which created the M-Pesa system, to bet on sports events in Kenya and elsewhere, using the M-Pesa service.[21]Pevans did not become a subsidiary of the Company when the Company was formed, but my understanding is that the shareholdings in Pevans mirrored the shareholdings in the Company, prior to the Allotments. The gaming licence held by Pevans (“the Gaming Licence”) was a bookmakers’ off-the-course licence issued by the Kenyan regulatory authority, the Betting Control and Licensing Board (“the BCLB”), without which Pevans could not trade in Kenya.[22]One member of the SPG Group and wholly owned subsidiary of the Company, to which it is convenient to make further reference at this point, is SPS Sportsoft Limited (“Sportsoft”). Sportsoft licensed the gaming software and Sportpesa brand to Pevans, in exchange for a substantial fee.[23]Turning to the Isle of Man, there is also a group of companies based in the Isle of Man through which the Business has also been conducted (“the Isle of Man Group”). The holding company of the Isle of Man Group is Sportpesa Holdings Limited (“SP Holdings”). The only one of its subsidiaries to which I need to make specific reference at this point is SP Services Limited (“SP Services”). SP Services is a service company which provides services to the Business. My understanding is that the shareholdings in the Isle of Man Group also mirrored or substantially mirrored the shareholdings in the Company, again prior to the Allotments which have given rise to the Proceedings.

The Second to Sixth Defendants

[24]The Second Defendant joined the Company as a director, on its incorporation in March 2017. The Second Defendant’s evidence, which I accept, was that he was closely involved in the management of the Company, on a weekly or monthly basis. Prior to the Allotments, the Second Defendant had a 1% shareholding in the Company. This has now increased to a 3.3% direct shareholding in the Company and a 6.1% shareholding held indirectly through SP Media America LLC.[25]The Third Defendant is and was, as I have said, a director of the Company. The Fifth Defendant is her brother. Her evidence, which I accept, was that when her brother and the other owners of the Company decided to move the Business to the Isle of Man and to apply for a licence to operate as sportpesa.com, they brought in the Third Defendant as someone with financial knowledge who was trusted and who could work from the Isle of Man. The Third Defendant was employed by SP Services, as Group Financial Officer in October 2015. The Third Defendant’s evidence, which I also accept, was that, in this capacity, she was responsible for the management of the finances of the SPG Group and the Isle of Man Group.[26]The Fourth Defendant is, as I have said, one of the founders of the Business and a major shareholder in the Company, in Pevans and in the Isle of Man Group. The Fourth Defendant was the Chief Executive Officer of Pevans from 2015 to 2016, when this role passed to Ronald Karauri. Prior to the Allotments, the Fourth Defendant had a 21% shareholding in the Company. This has now increased to a 46% shareholding in the Company.[27]The Fifth Defendant is also, as I have said, one of the founders of the Business. The Fifth Defendant is also a major shareholder in the Company, but indirectly. The relevant shareholding is held by the Sixth Defendant. The Sixth Defendant is a Delaware registered company which is the corporate vehicle through which the Fifth Defendant holds the shareholding in the Company. It is convenient to refer to this shareholding as the Fifth Defendant’s shareholding, but it should be kept in mind that the legal ownership of the shareholding is vested in the Sixth Defendant. Prior to the Allotments, the Fifth Defendant had a 21% shareholding in the Company. This has now increased to a 29.88% shareholding in the Company.[28]The Claimant’s case, which is denied by the Second to Sixth Defendants, is that the Second Defendant was and remains the nominee of the Fourth Defendant on the board of the Company, and that the Third Defendant was and remains the nominee of the Fifth Defendant on the board of the Company.

Email accounts/addresses

[29]In setting out my narrative of the events which have given rise to the Proceedings, it is necessary to make specific mention, in relation to email exchanges involving the Claimant, of the email addresses/accounts to which emails to the Claimant were sent. These specific email addresses are also relevant to a number of the issues which I have to decide in this judgment. For these reasons, I should start by identifying the relevant email addresses, to which I will be making specific reference, together with a brief account of how they came into use:(1) The Sportpesa.com Address – Prior to 2017, employees and directors of the Business, including the Claimant, were given email accounts with an @sportpesa.com domain. These accounts were hosted locally on physical servers owned by the Business in Kenya on the Microsoft Exchange system. I will refer to the Claimant’s @sportpesa.com account/address as “the Sportpesa.com Address”.(2) The Pevans Address - In July 2017, the Business migrated its on-premises Microsoft Exchange server to a cloud-based service, hosted on Microsoft’s cloud platform. As part of this process, the Business created a Pevans tenant, called PEVANSEA. A tenant represents the specific server resource allocated on the Microsoft cloud platform and is the mechanism by which Microsoft’s cloud provides the technical structure needed to manage and administer resources, users, subscriptions and services. As part of the creation of the Pevans tenant, a default domain following the format “tenantname.onmicrosoft.com” was created, allowing for initial setup and administrative tasks to be performed. As each user was created on the Pevans tenant (PEVANSEA), they were assigned a default domain account in the format “user@pevansea.onmicrosoft.com”; to serve as a unique identifier for that user on the Pevans tenant. This account had the capacity to be used as an email address but was only intended to be used in that way if needed or until a custom (and usually less cumbersome) domain could be configured. A default domain account for the Claimant was created, in the form @pevansea.onmicrosoft.com, on 12th July 2017. Thereafter, in the same month and as part of the email migration referred to above, the @sportpesa.com domain was added to the Pevans tenant as a custom domain. I will refer to the Claimant’s @pevansea.onmicrosoft.com account/address as “the Pevans Address”.(3) The Sportpesa.ke Address – In January 2018, a new custom domain, @sportpesa.co.ke, was added to the Pevans tenant in addition to the @sportpesa.com custom domain and the default pevansea.onmicrosoft.com domain. Shortly after the creation of that further domain, an @sportpesa.co.ke address was created for the Claimant. This was then configured to be the primary email address for the Claimant’s mailbox, with the Sportpesa.com Address becoming what was referred to as an alias account/address. The expert evidence was that this would not have changed anything from the Claimant’s perspective. His mailbox remained the same. All that had changed was that, when sending emails from the Sportpesa.com Address, those emails would, from then on, have appeared to have been sent from the @sportpesa.co.ke account/address. Emails sent to the Sportpesa.com Address would have continued to be received at the Sportpesa.com Address, because the Sportpesa.com Address remained as an email alias account/address. I will refer to the Claimant’s @sportpesa.co.ke account/address as “the Sportpesa.ke Address”.(4) The GNorth Address – This was what I understand to have been a personal email (@gnorth.co.ke) address/account of the Claimant, which I shall refer to as “the GNorth Address”.(5) The Mobicom Address – This was what I understand to have been a further personal email (@mobicom.co.ke) address/account of the Claimant, which I shall refer to as “the Mobicom Address”.(6) The ke.Sportpesa Address – The evidence of the Claimant was that this was a new email (@ke.sportpesa.com) account/address, which was set up for him by Mr Dawson, on or shortly before 25th November 2019. Mr Dawson was the person who had responsibility for the Company’s IT. The Claimant’s evidence was that both he and Mr Dawson had been unable to access the Sportpesa.com Address. I will refer to the Claimant’s @ke,sportpesa.com account/address as “the ke.Sportpesa Address”.

Narrative – the position in early 2019

[30]As I have explained, the principal entity through which the Business was carried on was Pevans. Pevans held the Gaming Licence, which allowed it to trade in online betting in Kenya. The Company derived income from the Business by virtue of the fact that its wholly owned subsidiary, Sportsoft, provided software and gaming services to Pevans, pursuant to a contract with Pevans (“the Pevans Contract”), which allowed Pevans to conduct its online gaming business. The evidence was that, as at July 2019, Sportsoft derived 98% of its total annual income from the Pevans Contract, while the income which the Company received by way of dividends from Sportsoft represented 100% of the Company’s annual income.[31]It is not necessary to trace the history of the Business prior to 2019 but, by the early part of 2019, the situation of the Business, in three relevant respects, was as follows.[32]First, it appears to be common ground that the Business (here meaning specifically the business of Pevans) had, at least up to 2019, been successful and had generated large amounts of cash. This in turn had resulted in the expansion of the Business around the world, by the establishment of the Company and the SPG Group, and the Company’s various global subsidiaries. There had also been substantial overseas (in the sense of outside Kenya) investment in or in relation to the Business, including substantial overseas sponsorship deals in football and motor racing.[33]Second, by the early part of 2019, Pevans had become embroiled in a dispute with the Kenyan tax authority (“the KRA”) over the amount of tax payable in respect of a tax which had been introduced on winnings from gambling. As explained by the Fourth Defendant in his evidence, the tax operated as a 20% tax on winnings. According to the evidence of the Fourth Defendant, the position of the KRA was that the tax was payable on both the amount won and the original stake. This position was contested by Pevans, which resulted in Pevans receiving multiple notices and demands from the KRA relating to the tax claimed by the KRA, including a substantial retrospective tax bill. For its part, Pevans sought to challenge the KRA’s position in court proceedings. The evidence of the Fourth Defendant was that these tax problems, combined with Pevans’ sponsorship commitments, resulted in Pevans starting to experience operational difficulties in February or March 2019.[34]Third, Ms Wachera gave evidence, which I accept, that by the early part of 2019 a serious rift had opened up, concerning the governance of Pevans, between the shareholders in Pevans. The governance issues which concerned Ms Wachera were, as she perceived matters, insufficient oversight, lack of accountability, conflicts of interest, the siphoning of Pevans funds overseas (in particular to the UK), and overall poor management. There is evidence of the articulation of these concerns in an email which Ms Wachera sent to Mr Macharia on 12th February 2019, in the following terms:
“I make reference to the the Pevans East Africa Board Meeting held on 4th February in the main boardroom,during which a lengthy discussion on the Racing Point Sponsorship was held. I want to note here that there was no resolution reached during the meeting, with strong sentiments expressed that the financial commitment to sponsor Formula One is too huge, that this should be a board decision and not an individual one. In this regard, I wish to bring to the attention of all the following requests made at the meeting before any further steps can be taken. 1. A report on the global companies clearly showing the amount transferred to each to date, and projections on break even points.( It was correctly observed that all these companies are being financed by Pevans East Africa) 2.A detailed evaluation of all past sponsorships, with a summary of total amounts spent so far and the benefits to the company. 3.A detailed feasibility study that will help all investors make an informed decision on whether the venture in question adds any value to their investment. After receipt of these documents, the Company Secretary was to circulate a resolution for individual members to make their comments. I wish to state that I have not received any of these documents, and any move to sign any deal on behalf of the company is ill advised. Mr, Macharia, I seek your expert advise on the matter.”
Mr, Macharia, I seek your expert advise on the matter.”[35]Mr Macharia was the head of the global legal department of the Business, company secretary and a director of Pevans, and a minor shareholder in the Company.[36]It is also clear, and I so find, that the concerns articulated by Ms Wachera were shared, at least in general terms, by the Claimant. This was clear from Ms Wachera’s own evidence, from the evidence given by the Claimant in cross examination, from the evidence given by other witnesses in the Trial, and from emails sent at a later stage by the Claimant. It will be necessary to come back to the precise nature of these concerns later in this judgment, but for present purposes it is sufficient to record that the Claimant was concerned with the governance of Pevans, and with what he regarded as the lack of oversight or information in relation to the large sums which had been earned by Pevans in Kenya, and then transferred out of Pevans, to third parties and/or overseas. It was clear from the evidence that the Claimant had been involved in the expansion of the Business outside Kenya, and had, at least previously and in principle, accepted the use of Pevans money for the purposes of that expansion. It was also clear that the Claimant was not satisfied that all of the money leaving Pevans was being properly expended or invested either for those purposes or for the benefit of Pevans and its shareholders. So far as the rift between the shareholders of Pevans was concerned, which I have mentioned above, I find that the Claimant was on the same side as Ms Wachera.

Narrative - the March 2019 Meetings and the alleged IT Strategy

[37]On 11th, 12th and 13th March 2019, three days of meetings were held in a hotel in Liverpool (“the March 2019 Meetings”). According to the agenda for the March 2019 Meetings, the meeting on the first day was concerned with the affairs of Pevans, while the meeting on the second day constituted an AGM of the Company and was concerned with the affairs of the SPG Group (“the March 2019 Company AGM”). The meeting on the third day was concerned with the affairs of the Isle of Man Group.[38]The March 2019 Meetings were attended by, amongst others, the Claimant, the Second to Fifth Defendants, Ronald Karauri, Robert Macharia, Ms Wachera, Valentina Mineva and Paul Kinuthia. Mr Karauri was, as mentioned above, the CEO of Pevans. Mr Macharia has also been mentioned above, as the head of the global legal department of the Business, company secretary and a director of Pevans, and a minor shareholder in the Company. Ms Mineva is the sister of the Fourth Defendant and was a shareholder in the Company. Ms Mineva was also identified in the evidence as having set up a Spanish company called Kentech SLU (“Kentech”), which was described in the evidence as a research and development business which provided the sports betting software used on the Sportpesa platform. Mr Kinuthia was a shareholder and director of Pevans.[39]The evidence was (and I so find) that the Claimant acted as chair on all three days of the March 2019 Meetings.[40]My understanding is that there was a presentation slide pack prepared for the March 2019 Meetings, which comprised, or included a list of those attending and an agenda for each day of the March 2019 Meetings. The agenda for the March 2019 Company AGM contained five items. Each of the first four items were concerned, respectively, with each of the four overseas subsidiaries of the Company; that is to say the subsidiaries in Italy, Russia, South Africa and Tanzania. The fifth item was listed as “Sportpesa Global Holdings Consolidated Report – FS 2018/Budget 2019”. There was evidence that the presentation slide pack included, or was accompanied by a file or files of documents for those attending the March 2019 Meetings.[41]In terms of the reasons why the March 2019 Meetings and, in particular, the March 2019 Company AGM were convened, it appears to be common ground (and I so find) that the explanation was, at least principally if not exclusively, that there were issues of corporate governance and alleged mismanagement, and allegations of illegitimate transfers of funds out of Pevans, which were controversial and needed to be addressed. The Claimant gave evidence in cross examination, which I accept, that the “AGM of 2019”, which I understood to be a specific reference to the March 2019 Company AGM, was caused by the agitation of two other directors that the meeting be held to discuss the corporate governance of the Company, and that there were “heated issues” at the meeting. In his first witness statement the Second Defendant described the first day of the March 2019 Meeting, which was concerned with Pevans, as a “disaster as there were chaotic disagreements between the shareholders as to how to proceed with the Kenyan business”. I will need to come back to this evidence, but for present purposes, and without necessarily accepting the Second Defendant’s description of what occurred at face value, it seems clear that there were serious disagreements, at the March 2019 Meetings, between the Pevans shareholders, both in relation to corporate governance and alleged mismanagement of the Business, and in relation to the movement of funds out of Pevans.[42]In particular, there were allegations that money was being siphoned out of Pevans by its executives to third party companies, without commercial justification and at the expense of the non-executive shareholders. The third party companies were identified as Peg B Limited (“Peg B”), Techpitch Limited, a Kenyan company (“Techpitch”), and Kentech, the Spanish company set up by Ms Mineva. These complaints were subsequently articulated by Mr Kinuthia in an email exchange with Ms Mineva, who was being accused of orchestrating the transfer of funds to the relevant third party companies. Mr Kinuthia referred to an alleged “well laid down plan of illegally taking away Pevans shareholders money to fund offshore companies which have no relationship with Pevans shareholders”. This was denied by Ms Mineva. This email exchange took place shortly after the March 2019 Meetings, on 3rd and 4th April 2019. For present purposes what is relevant is that Mr Kinuthia pointed out that he had already made the complaint of the unlawful transfer of shareholders’ money at the March 2019 Meetings. In cross examination, the Third Defendant accepted that this complaint had been made at the March 2019 Meetings.[43]The March 2019 Company AGM was the focus of a good deal of attention at the Trial. The principal reason for this was that there was a substantial conflict of evidence between those attending the March 2019 Company AGM in relation to one particular issue. The issue was whether and, if so, to what extent, there was discussion and agreement on the subject of the use of Company emails for communications. I will need to come back to this conflict of evidence later in this judgment, but for narrative purposes it is necessary to explain the nature of this conflict, in order to set the scene for what followed.[44]The case of the Second to Sixth Defendants is that a new IT strategy was presented and agreed at the March 2019 Company AGM. This case is pleaded in paragraphs 41 and 42 of the Re-Re-Re-Amended Defence of the Second to Sixth Defendants, in the following terms:
“41. At the Company’s 2019 AGM, the Co-Directors informed the Claimant and the Company’s other assembled shareholders that the Company needed to streamline its communications to improve cyber security, protect itself from cybercrime and comply with the requirements of the GDPR. 42. To meet this objective, the Company’s Board presented to the shareholders a proposed IT strategy at the 2019 AGM (the “2019 IT Strategy”). Under the 2019 IT Strategy as endorsed without objection by the shareholders at the 2019 AGM: 42.1. communications relating to the Company’s affairs would be exclusively channelled through email addresses with the Company’s official domain names; and 42.2. the Company would ensure that each shareholder had access to a Company email address and, if a shareholder did not have access to such an address, one would be provided.” 42.1. communications relating to the Company’s affairs would be exclusively channelled through email addresses with the Company’s official domain names; and 42.2. the Company would ensure that each shareholder had access to a Company email address and, if a shareholder did not have access to such an address, one would be provided.”
[45]The evidence of the Second Defendant was that at the March 2019 Company AGM the board of the Company conducted a presentation of the holding and service company activities. As part of this presentation the board communicated to all shareholders a new policy on email communications, whereby all employees and shareholders of the Company would be required to use their sportpesa.com email addresses for communications relating to Company matters. The Second Defendant’s evidence was that there was no objection from the shareholders, including the Claimant, to the new policy.[46]The Third Defendant gave evidence to a similar effect. In particular, her evidence was that the Company board and shareholders collectively discussed and agreed that, from then on, emails and communications regarding Company business would be sent using only Sportpesa email addresses, and that they would co-ordinate with the IT team of Sportpesa to ensure that any shareholders who did not have a Company email address, or had a non-working Company email address, would be given a Company email address or have their access restored.[47]The Fourth and Fifth Defendants, Mr Macharia and Mr Karauri all gave evidence, in differing terms, that an IT strategy or policy was the subject of discussion and, in the case of some of these witnesses, agreement at the March 2019 Company AGM.[48]I will use the expression “the IT Strategy” to refer to the IT strategy or policy which is alleged to have been presented and agreed at the March 2019 Company AGM. It will be appreciated that, as with other defined expressions used in this judgment, the use of this expression does not pre-judge the question of whether the IT Strategy or any IT strategy was in fact either presented, discussed or agreed at the March 2019 Company AGM.[49]The Claimant’s case is that the IT Strategy was neither presented nor agreed, and that there was no discussion of any IT strategy at the March 2019 Company AGM. The Claimant’s evidence was that the subject of Sportpesa email addresses came up only casually while he was having lunch with a few of the Company shareholders, on 12th March 2019. The Claimant said that he mentioned, in passing and casually to those sitting at his table, that he did not have a Sportpesa email address. The Claimant’s evidence was that he did not recall saying that he had been unable to access the Sportpesa.com Address for the last six months. The Claimant denied in his evidence that there had been any presentation or discussion of the IT Strategy at the March 2019 Company AGM, or that any such IT strategy or policy was either agreed upon or formulated at the meeting. The Claimant claimed that the IT Strategy was an invention. Ms Wachera also gave evidence that she did not recall any discussion of an IT strategy at the March 2019 Company AGM, or any conversation regarding the use or management of Company email addresses.[50]Following the March 2019 Meetings the Third Defendant drew up draft minutes of the March 2019 Company AGM, giving the date of this meeting as 12th March 2019. There were two versions of these minutes, neither of which was signed. The Third Defendant explained that one version was an earlier version of the minutes, while the other was a later version of the minutes. The two versions were not identical. The earlier version of the minutes had two sections of text, forming an alleged part of the discussion of the 2019 performance and budget of Sportesa Italy, which were not in the later version of the minutes. The evidence of the Third Defendant was that she did not finish drafting these minutes, so that they were incomplete. Her evidence was that she could not recall why the draft minutes were not completed. The two versions of the draft minutes make no mention of the IT Strategy or any IT strategy. There is then a third version of the minutes, which appears to have been drawn up as a formal version of the minutes, but is not signed and shows some tracked changes with comments from the Third Defendant. The provenance of this third version of the minutes was not explored in the evidence.[51]On 19th March 2019 (12:31) the Third Defendant emailed Michael Musau and Mr Karauri. The subject line of the email identified the subject as “Shareholder’s email needs to be set up”. The Third Defendant explained that “Following our AGM last week we need to set up sportpesa.com email for our shareholders as per the list below”. A list of shareholders was then set out, which included the Claimant. Some of the shareholders were identified as needing sportpesa.com emails, but in the case of the Claimant the Third Defendant explained that “Paul N has .com email, PN complained that this sportpesa.email has not been working last 6 months”. The Third Defendant followed this up with an email to Max Lintott, sent on the same day (14:37), attaching her email to Mr Musau and Mr Karauri and referring to the action required. Mr Musau and Mr Lintott were both employees of the Business who, as I understood the position, had responsibilities in relation to IT. Mr Lintott passed on the request for action to various individuals, including Steven Dawson, referred to earlier in this judgment as the person who was responsible for the Company’s IT. In his email, sent on 21st March 2019 (09:59), Mr Lintott said this:
“Please can you action asap. I have sat on this request my apologies and Kalina has followed up this morning. The COM email addresses need to be working and functioning. The likes of Paul Ndungu and Ivan Kalpakchiev are in the Address book. Paul Kinuthia, Asenath Wathika, Kiarie Waweru will require .COM addresses set up. Please let me know when they are set up.”
Please let me know when they are set up.”[52]On 21st March 2019 (15:36) the Third Defendant emailed the Claimant at the GNorth Address. The email was copied to Mr Dawson. The email introduced Mr Dawson as the person dealing with the sportpesa email accounts and explained that Mr Dawson could advise the Claimant in detail on “what the problem with your account is and how to get access to your email”. Later the same day (16:27) Mr Dawson emailed the Claimant at the GNorth Address (the email was also addressed to the Third Defendant), in the following terms:
“I can see that you have an email account with the address - paul.ndungu@sportpesa.co.ke. This address has an alias for sportpesa.com, so emails sent to paul.ndungu@sportpesa.com will also find their way to your in box. In order to access your emails, you will need to log in to office 36S or Outlook using the paul.ndungu@sportpesa.co.ke. Let me know if you would like me to reset your password.”
[53]In his second witness statement the Claimant said that he did not respond to Mr Dawson’s email sent on 21st March 2019. The Claimant said that he had not heard of the Sportpesa.ke Address before, and that the Company had consistently and regularly sent business-related communications to the GNorth Address and to the Mobicom Address. The Claimant said that he did not respond to Mr Dawson’s email because there was no need for him to log into the Sportpesa.ke account. In cross examination the Claimant gave evidence that he did have a conversation with Mr Dawson at this time, which lasted two hours, and in the course of which Mr Dawson tried, without success, to give the Claimant access to his emails using the Sportpesa.ke Address.[54]In terms of the functionality of the Sportpesa.com Address, there is an email message sent by Microsoft Outlook on 16th August 2018 to Emma Jones, who was employed as an office/project administrator, and acted as assistant to the Third Defendant. The email message advised Ms Jones that a message which she had sent to the Claimant at the Sportpesa.com Address could not be delivered.[55]The Gaming Licence, which allowed Pevans to operate its business in Kenya, was due to expire at the end of June 2019. The Gaming Licence was not renewed for the following year which, as the Claimant explained in his evidence, ran from July to June. The reason for non-renewal appears, on the evidence, to have been the tax dispute with the KRA, to which I have referred above. The evidence of the Fourth Defendant, which I accept, was that the position taken by the Kenyan government, as stated in May or June 2019, was that gaming licences would not be renewed for any companies not paying their taxes. In any event, the non-renewal of the Gaming Licence, once it had taken effect, left Pevans with no means of operating its business in Kenya. I will refer to this refusal of the renewal of the Gaming Licence, as it was generally referred to in the Trial, as “the Licence Suspension”.[56]I should mention that Mr Macharia gave evidence that the effect of the Licence Suspension was not immediate, and that Pevans was able to continue trading for a period of months after the end of June 2019. Mr Macharia was not able to say, with certainty, how long this period was, but thought that it could have been four or five months. The Second Defendant’s evidence was that, while this may have been correct in legal terms, Pevans was not able to generate revenue beyond July 2019. Mr Karauri’s evidence was that Mr Macharia was wrong, and that Pevans was not able to trade beyond June 2019 for more than a month; being shut down in July 2019. For narrative purposes it is not necessary to resolve this conflict in the evidence. The relevant point is that if, and to the extent that, Pevans was legally able to continue its business beyond June 2019, the period was a relatively short one, and was a period during which the Licence Suspension was hanging over Pevans.[57]The position was considered at a general meeting of members of Pevans, held in Dar es Salaam, where Pevans had an office, on 12th August 2019. The person responsible for taking the minutes of this and subsequent meetings of Pevans was Mr Macharia, in his role as company secretary. On 6th September 2019 Mr Macharia circulated minutes of the meeting of 12th August 2019 to the members, using the GNorth Address in the case of the Claimant. This was just prior to the next meeting of the members of Pevans on 9th September 2019. The Claimant’s evidence was that these minutes were signed by the Claimant at the meeting on 9th September 2019, following their approval at the meeting.[58]By reference to these minutes of the meeting of 12th August 2019, as circulated by Mr Macharia on 6th September 2019, the essential purpose of the meeting was to consider the financial consequences of the Licence Suspension and the associated tax dispute with the KRA. By reference to the minutes of the meeting, and without going through matters in detail, the following occurred at the meeting:(1) The Claimant informed the meeting of the meetings and lobbying which had been going on with a view to Pevans resuming operations. The Claimant also informed the meeting, together with Mr Karauri, of how matters lay in relation to the tax dispute.(2) Mr Karauri went on to explain that no new gaming licence had been issued, that marketing and IT costs had been cut to a minimum, that the accounting department had been “given a clock up to the end of September 2019 if no change of situation had happened in the interim”, and that the plan was to have all employees, save for a few crucial people, leave employment by the end of September if no new gaming licence had been issued by then.(3) The meeting was then briefed by Mr Karauri on the liabilities and assets of Pevans. Mr Macharia was requested to look up the law and advise members on a worst case scenario/liquidation, at the next meeting.(4) The Fourth Defendant then briefed the meeting on the global status of the Business. In financial terms, and in summary, the overall position, as presented by the Fourth Defendant, was not a good one, with the various parts of the Business set to run out of money if the current situation continued. In relation to the SPG Group and the Isle of Man Group, the meeting was informed by the Fourth Defendant that, if the current situation persisted, these companies could not even afford to pay staff salaries for September.(5) The minutes concluded with a series of formal observations, in the following terms:
“(i) The options going forward in respect to global companies were for the shareholders to raise capital and/or find a strategic partner or fold. (ii) There's need to save the Tanzania business because of the Kshs 1.7 billion loan and the investment that has been put for its development (iii) There's need to start the process of doing an IPO in Tanzania. (iv) There's need to look for strategic investors for the international companies. Mr. Nikolov is given the mandate to look for and engage strategic investors. (v) The final decision on what to do with international companies is dependent on what happens in Nairobi and therefore there is need to have another meeting in 3-4 weeks.”
[59]There is a different version of these minutes, which was produced in the course of the Proceedings. This different version is dated 17th October 2019 and signed by Mr Macharia. The key difference between this later version of the minutes and the version circulated by Mr Macharia by his email of 6th September 2019 is that the later version records the following resolution, which is not in the earlier version:
“It was RESOLVED due to the uncertainty of what is happening in Nairobi regarding Pevans' licence sportpesa global companies should raise initial capital of up to half a million pounds (GPB 500,000/=)”
[60]The Claimant claimed that this later version of the minutes had been falsified to suggest that the resolution had been passed at the meeting on 12th August 2019, when it had not. As I have said, the Claimant’s evidence was that he, as chair of the meeting on 12th August 2019, had signed the earlier, and correct, version of the minutes, following their approval at the meeting on 9th September 2019.[61]As mentioned above, the next general meeting of the members of Pevans was held in Dar es Salaam on 9th September 2019. The Claimant’s evidence was that he also chaired this meeting. By reference to the minutes of this meeting, the meeting was principally concerned with the continuing financial consequences of the Licence Suspension, the tax dispute with the KRA, and with the continuing difficult financial state of the Business, both in relation to Pevans and in relation to the remainder of the Business. The minutes record that the KRA had sent a letter to the BCLB “clearing the Company”. In his evidence the Claimant said that this meant that the KRA had cleared Pevans to resume operations, but it is not clear to me that this was what this statement meant, particularly given that the minutes went on to record that there was pressure on the KRA from the Interior Ministry to withdraw the clearance letter. The essential problem, as it emerges from the minutes, was that various parts of the Business were set to run out of money, as a consequence of Pevans’ inability to trade. The minutes record that the Fourth Defendant gave the meeting a briefing on the situation in relation to global markets, which included the following information, in respect of Pevans, the SPG Group and the Isle of Man Group:
“The law requires that the process of liquidation be started because the UK companies could not fulfil their obligations to employees and suppliers.” “The law in the UK is that Pevans will be required to pay their outstanding amounts under contract with UK companies” “There are outstanding payments to service providers. If PEAL is not able to fulfil its financial obligations to Sportsoft and Holdings, there are legal consequence; if the UK companies are unable to get funding they have to trigger liquidation process.”
[62]A number of resolutions were recorded in the minutes as having been passed at this meeting, including that Mr Karauri, as CEO of Pevans, a Mr Kihanya and the Claimant be formed into a small committee “to unlock the pending licensing and tax issues”. It was also resolved that there was a need to hold an AGM “to ratify some decision as well as comply with the law.”. The minutes of the meeting also record the confirmation of the minutes of the meeting of 12th August 2019, which could only have been a reference to the version of those minutes circulated by Mr Macharia on 9th September 2019.[63]What was described as the AGM of Pevans took place on 30th September 2019, also in Dar es Salaam. I use this qualified language because the minutes of the meeting record that, at the outset of the meeting, there was some debate as to whether the meeting was an AGM or not. Beyond this, it is not necessary to go through the matters recorded in the minutes of this meeting in any detail. The minutes record that an update on global operations was given to the meeting by the Fourth Defendant and, in relation to Kenya, by Mr Karauri. The essential theme of this update was the continuing financial problems facing the various parts of the Business. In a briefing to the meeting on global operations, the Fourth Defendant noted that the situation in relation to the Company was as earlier reported, and that the only option was for the shareholders of the Company “to raise capital or the company would be liquidated”. The discussion in the minutes is also recorded as proceeding on the basis that Pevans did not have a gaming licence.[64]A further meeting, described as a board meeting of Pevans, was held on 17th October 2019, again in Dar es Salaam. The Claimant is not recorded as attending this meeting. The meeting was chaired by the Fifth Defendant. The minutes are fairly short. The principal business of the meeting, by reference to the minutes, appears to have been the reduction of costs by the termination of employment contracts and the termination of leases of the offices of Pevans. The minutes record that it was observed that there was a requirement by law to hold an AGM for the members of Pevans. It was resolved that the AGM should be held on 14th November 2019. Mr Macharia circulated a notice of the meeting on 22nd October 2019. So far as the AGM itself was concerned, my attention was not drawn to any minutes of the AGM and it did not feature in the evidence or arguments at the Trial. I therefore proceed on the basis that the relevant meetings of Pevans, for the purposes of this judgment, were the four meetings on, respectively, 12th August 2019, 9th September 2019, 30th September 2019 and 17th October 2019.[65]I will refer to the four meetings of Pevans, as described above, as “the Pevans Meetings”.

Narrative – the October 2019 Company Board Meeting

[66]It was the evidence of the Second and Third Defendants that, in response to what they said was the financial crisis facing the Company as a result of the Licence Suspension, the only available option to pursue was to raise capital from the members of the Company.[67]On 6th October 2019 Ani Grigorian-Coates, the Company’s legal counsel, emailed the Second Defendant with a steps plan for the increase of the share capital of the Company. Step 1, to be completed “as soon as practicable”, was for the board of the Company to confirm the amount of capital to be raised and the price per share. On 7th and 8th October 2019 the Second Defendant discussed the capital raise with Ms Grigorian-Coates and received advice from Ms Grigorian-Coates. The advice was given in WhatsApp exchanges and by telephone (there is no note of the telephone advice). I will need to come back to the WhatsApp exchanges later in this judgment. It is not necessary to go into their substance at this stage.[68]On 8th October 2019 Ms Grigorian-Coates emailed the Second Defendant to inform him and the Third Defendant that she was drafting the notice of the board meeting “to be circulated to Paul”. She asked when the board meeting was to be held, and stated that reasonable notice should be given to the Claimant, suggesting that at least one week’s notice should be given. Ms Grigorian-Coates suggested 18th October 2019 as a date for the meeting, saying that once she had heard from the Second and Third Defendants she would circulate the notice of the meeting, to be sent the next day. The Second Defendant responded the same day saying that they should plan for one week’s notice and send the notice the next day, for a meeting on 16th October 2019. On 9th October 2019 Ms Grigorian-Coates sent to the Third Defendant the form of notice for the board meeting of the Company, which was to be held on 16th October 2019. Ms Grigorian-Coates asked the Third Defendant to send the notice to the Claimant at his work and personal emails, with the option to receive read receipts enabled.[69]On the same day (9th October 2019) the Third Defendant sent an email addressed to the directors of the Company, giving notice of the Company board meeting. So far as the Claimant was concerned, the email was addressed to the Claimant at the Sportpesa.ke Address and the Sportpesa.com Address. The email was also blind copied to Ms Grigorian-Coates and the Fourth Defendant. The email gave the notice of the board meeting in the following terms:
“Notice is hereby given that a meeting of the board of directors of the Company will be held on 16 October 2019, at 1 pm UK time (3 pm Kenya time) over the telephone to transact the business set out below: 1. To discuss and approve the proposed increase of the share capital of the Company; 2. To approve the number of shares to be allotted; 3. To approve the share price; and 4. To approve the form of offer letter IO be provided to each shareholder of the Company.”
[70]The email also gave dial-in details for the meeting referred to in the email. So far as the Claimant was concerned, and as I have said, the Third Defendant sent the notice of the meeting (“the First Meeting Notice”) to the Claimant at the Sportpesa.ke Address and the Sportpesa.com Address. The Claimant’s evidence was that he did not have access to either of these email addresses. The Third Defendant used a tracker to confirm when the email was read. The Third Defendant received a non-deliverable report, on 9th October 2019, in respect of the email sent to the Sportpesa.ke address, but not in respect of the Sportpesa.com Address.[71]Ms Grigorian-Coates sent a call-in diary entry for the board meeting to the Claimant at the Sportpesa.ke Address on the 16th October 2019, but this was also rejected as undeliverable. On 10th October 2019, in a WhatsApp exchange with the Second Defendant, Ms Grigorian-Coates said that she had not heard from the Claimant, and suggested that the Second Defendant call the Claimant to let him know that he had been sent notice of the board meeting. The Second Defendant said that he would “check around”. The Second Defendant’s evidence was that he approached various other individuals to ask if they had heard from the Claimant, who told him that the Claimant was not answering his phone and could not be found. The Second Defendant made no direct approach to the Claimant.[72]The explanation for the failure of the email sent to the Sportpesa.ke Address by the Third Defendant, and for the failure of the call-in diary entry sent to the Sportpesa.ke Address by Ms Grigorian-Coates, appears to be as follows. On 16th July 2019 the National Kenya Computer Incident Response Team of the Communications Authority of Kenya produced what was described as a technical report. The technical report stated that the Coordination Centre had been notified that the domain name Sportpesa.co.ke was operating illegally in Kenya, and was being used to defraud members of the public by purporting to offer online gambling services. The report stated that the domain name was operating illegally by reasons of the Licence Suspension and requested that the domain name was immediately to be taken down.[73]In the event the Sportpesa.ke Address was not immediately taken down. There seems to have been some delay in actioning the report. On 27th September 2019 Mr Peter Maina of Webhost Kenya Limited emailed the Fifth Defendant to advise that they had received “the attached communication”, which was the technical report dated 16th July 2019, instructing Webhost Kenya Limited to take down the Sportpesa.ke domain, and that the domain had been taken down. On the same day Mr Lintott also emailed the Fifth Defendant and Mr Musau (mentioned above as an employee of the Business with responsibility for IT), reporting a problem with the Sportpesa.co.ke domain, and that connectivity had been lost to the DNS (Domain Name System) Named Servers in Amsterdam. Very shortly thereafter Mr Lintott sent another email, telling the recipients to ignore his previous email because “we have just found our Kenyan authorities have pulled the Domain name/DNS links. As well as site down this will mean emails will not get through.”. Both of Mr Lintott’s emails of 27th September 2019 were copied to the Third Defendant. In cross examination the Third Defendant accepted that she was thereby informed, on 27th September 2019, that emails sent to sportpesa.co.ke addresses would not get through. The Third Defendant also accepted in cross examination that, when she sent notice of the October 2019 Company Board Meeting to the Claimant at the Sportpesa.ke Address she knew, from the emails of 27th September 2019, that the Sportpesa.ke address would not work. I will refer to this suspension of the Sportpesa.ke domain as “the Domain Suspension”.[74]Returning to the meeting itself on 16th October 2019, there are minutes of the meeting, the accuracy of which is disputed by the Claimant. According to these minutes, the meeting took place, by telephone, at 1.00pm on 16th October 2019. The meeting was attended by the Second and Third Defendants. The Claimant did not attend. The minutes of the meeting recorded apologies for absence from the Claimant. The Claimant’s evidence was that he had been given no notice of this meeting, was not aware that it was taking place, and had provided no such apologies for absence.[75]The minutes of the meeting (“the October 2019 Company Board Meeting”) went on to record that the meeting had been convened to make certain changes to the Company’s share capital. So far as the increase in the capital of the Company was concerned, the minutes stated as follows:
“4.1 The Chairman reported that following the closure of Pevans East Africa Limited, the Company's biggest customer which accounts for approximately 98% of Company's revenues, the Company requires emergency funding in order to continue its operations. 4.2 It was proposed that the share capital of the Company be increased by £500,000. 4.3 It was explained that in order to raise the share capital of the Company, pursuant to section 561 of the Act, the Company proposed to offer each of its shareholders, being holders of ordinary shares of £1 each of the Company on the register of members, the opportunity to subscribe for new ordinary shares in proportion of their shareholding at £1 per share ("Issue Price"), payable in full on acceptance. 4.4 It was resolved that: 4.5 the capital increase of £500,000 and the Issue Price be approved.”
[76]The minutes thus recorded the resolution to increase the capital of the Company by £500,000, at an issue price of £1 per share. The minutes went on to record the approval of the draft version of the offer letter which was to be despatched to the Company shareholders in connection with this capital raise (“the First Capital Raise”). The draft version of the offer letter had been emailed to the Second and Third Defendants on 14th October 2019 by Ms Grigorian-Coates, but not to the Claimant.

Narrative – the First Offer

[77]On 17th October 2019 the Third Defendant circulated offer letters to the Company shareholders for the purposes of First Capital Raise. The Third Defendant sent an email to the Claimant, using the Sportpesa.com Address. The email stated as follows:
“Further to a board meeting of Sportpesa Global Holdings Limited ("Company") held on 16 October 2019, it was resolved to undertake a share capital increase of the Company to be effected by way of issuing new shares in the capital of the Company. Pursuant to statutory pre-emption rights contained in the articles of association of the Company, the new shares will be first offered to you as an existing shareholder of the Company. You can accept the offer or reject it, ii you do not wish to participate in the issue. Please find attached the following documents: • Offer letter setting out the number of shares offered to you. the subscription price and further information regarding the offer: • Acceptance letter to be signed if you accept the offer; and • Rejection letter ii do not wish to participate in the issue. I look forward to receiving your response (further information on how to respond and what to do next is set out in the Offer Letter). Please let me know if you have any questions.”
Please find attached the following documents: Please let me know if you have any questions.”

Please find attached the following documents:

[78]The attached offer letter (“the First Offer Letter") was dated 17th October 2019 and was addressed, on its face, to the Claimant at his correct address in Nairobi. The offer contained in the First Offer Letter was in the following terms:
“1. SUMMARY The board of directors of the Company ("Board") is pleased to offer you 85,000 of ordinary shares at £1 per share in the capital of the Company. 2. BACKGROUND 2.1 Following the closure of Pevans East Africa Limited, the Company’s biggest customer which accounted for approximately 98% of its revenues, the Company requires further funding in order to continue its operations. 2.2 The Board has considered the amount of funding required and has approved to increase the share capital of the Company by further £500,000. 2.3 The Board has approved to allot 500,000 ordinary shares in the capital of the Company at £1 per share ("New Shares") in accordance with section 550 of Companies Act, which provides the Board authority to allot the New Shares. 3. OFFER 3.1 In accordance with statutory pre-emption rights under section 561 of Companies Act, you are entitled to subscribe for: 85,000 ordinary shares at £1 per share ("Offer''). 3.2 The Offer is equal to the proportion (in nominal value) of the ordinary share capital of the Company held by you. 3.3 If you accept the Offer. you will be required to pay the subscription price of £1 per share ("Subscription Price"). 3.4 In the event any shareholders of the Company decline to participate in the issue. of New Shares, you will have the option to subscribe for additional New Shares”
. The board of directors of the Company ("Board") is pleased to offer you 85,000 of ordinary shares at £1 per share in the capital of the Company. 85,000 ordinary shares at £1 per share ("Offer'').[79]The time limit for acceptance of this offer (“the First Offer”), and the consequences of non-acceptance, were identified in the following terms:
“4. LONGSTOP DATE 4.1 The Offer is valid for 14 days from the date of this letter. The Board kindly requests that you confirm whether you accept or reject the Offer by 1 November 2019 by signing the enclosed acceptance letter ("Acceptance Letter") or rejection letter ("Rejection Letter"), as appropriate. 4.2 In the event that the Company does not receive your confirmation of acceptance or rejection by 1 November 2019, the Offer will expire and you will lose your right to subscribe for the New Shares. The remaining shareholders will have the opportunity to subscribe for some or all of the New Shares which have been offered to you by virtue of this letter.”
[80]The First Offer Letter concluded by setting out the arrangements for communicating either acceptance or rejection of the First Offer and the arrangements, if the First Offer was accepted, for the allotment of the new shares and the payment of the subscription price. The First Offer Letter attached a prepared form of letter for accepting the First Offer and a prepared form of letter for rejecting the First Offer, each in the name of the Claimant and each drafted as a letter from the Claimant to the directors of the Company.[81]As I have said, the Third Defendant sent the First Offer Letter to the Claimant, by email, on 17th October 2019 to the Sportpesa.com Address. The Claimant’s evidence was that he did not have access to this address.[82]The Third Defendant’s evidence was that she also arranged for the offer letters, including the First Offer Letter to the Claimant, to be sent to Company shareholders by DHL delivery. The Third Defendant’s evidence was that she arranged this through her assistant, by signing the offer letters and putting the same into envelopes which she gave to her assistant to go to DHL for delivery. I assume that this was done on 21st October 2019, as there is an email of that date from Emma Jones, referred to earlier in this judgment as an assistant to the Third Defendant. In this email Ms Jones confirmed to the Third Defendant that she had “sorted” the DHL consignments to the Company shareholders identified in the email. These shareholders included the Claimant.[83]So far as the First Offer Letter was concerned, the relevant chain of events, in relation to its despatch for DHL delivery, forms a rather complicated saga. The Claimant’s address in Kenya was recorded in the Company’s register of directors. As I have said, the First Offer Letter was, on its face, correctly addressed to the Claimant’s registered address. The evidence was that the First Offer Letter was then placed into an envelope which also had the correct address for the Claimant. In cross examination the Third Defendant confirmed that, in addition to signing the First Offer Letter and placing the same into an envelope, she had herself addressed the envelope containing the First Offer Letter. This envelope was then sent to SP Services, the company in the Isle of Man Group which provided services to the Business. The envelope was then placed into a courier envelope, which had the wrong address for the Claimant, in two respects. What I understand to have been the postcode was missing, and the address contained a reference to Muthaiga Close which did not appear in the address on the Company’s register of members. This incorrect address was repeated in the DHL delivery information. The courier envelope reached Nairobi on 23rd October 2019, but DHL were unable to deliver the courier envelope because the address was wrong. The case of the Second to Sixth Defendants was that DHL attempted to call the Claimant multiple times on his mobile phone. There was no evidence from anyone at DHL to confirm this. The Claimant’s evidence was that, to his knowledge, DHL did not make any attempt to contact the Claimant on his mobile phone. The Claimant’s evidence was that there were no missed calls or voicemail messages from DHL on his mobile phone, and no attempt by DHL to contact him.[84]Ms Jones received notice of the failed delivery by email from DHL Express on 23rd October 2019. The reason for the failed delivery was identified as the address appearing to be incorrect. The notice requested that the address be updated. On the same day the Third Defendant emailed the Second Defendant and Ms Grigorian-Coates to confirm that various shareholders, including the Claimant, had received the DHL parcels. In fact however, it is clear from the evidence that the First Offer Letter had not been delivered to the Claimant on 23rd October 2019. Nor does there appear to have been any further attempt at delivery by DHL, nor any attempt by the Third Defendant to provide the correct address for the Claimant to DHL, so that delivery could be effected.[85]In summary therefore, the First Offer Letter was despatched to the Claimant, by email to the Sportpesa.com Address, on 17th October 2019. The First Offer Letter was also despatched to DHL, for hard copy delivery, on 21st October 2019. The deadline for the response to the First Offer Letter was 1st November 2019. The Claimant’s evidence was that he did not, at the time, receive the First Offer Letter, either by email or by DHL delivery. The Claimant’s evidence was that he did not obtain the First Offer Letter until 21st November 2019, after contacting and pursuing DHL for the hard copy. There is an email from the Claimant to the Third Defendant, sent on 25th November 2019, in which the Claimant recorded that he had finally received the DHL envelope, and pointed out that while the inner envelope had had the correct address, the outer courier envelope had had the wrong address.

Narrative – the November 2019 Company Board Meeting

[86]In the meantime, on 22nd October 2019, Ms Grigorian-Coates emailed the Second and Third Defendants in the following terms:
“We are going to need to hold another board meeting to discuss the responses from the shareholders and allocate the shares. In particular, we will need to discuss how to allocate any shares which have not been subscribed for. We'll also need to circulate notice of the meeting to Paul. The deadline for the shareholders to get back to us is 1 November. When would you like to hold the meeting? Would Monday 4 November work?”
[87]The Second Defendant responded the same day to say that 4th November 2019 worked for himself and the Third Defendant. In a further email exchange with Ms Grigorian-Coates and the Third Defendant that day (22nd October 2019), regarding the timing of the proposed meeting, the Second Defendant made this proposal:
“If Paul does not answer again, I would like to propose that we add to the agenda a replacement of Paul with a more engaged director. lmk if we should add this in the agenda or raise it during the call.” lmk if we should add this in the agenda or raise it during the call.”
[88]Ms Grigorian-Coates’ response, sent the same day, was in the following terms:
“We are going to need an ordinary resolution of the shareholders (ie majority) to remove Paul and appoint the new director. I suggest we add this to the agenda to be transparent so that Paul has full details of what we will discuss. We can then hold the meeting, suggest that Paul be replaced, suggest who you think should be appointed and then adjourn the meeting to circulate the written resolution to the shareholders for approval. We will need the new director to consent to being appointed. Once we have the shareholders' approval we will resume the meeting and remove/appoint as appropriate. Does this sound ok?”
Does this sound ok?”[89]The Third Defendant sent out an email on 22nd October 2019, giving notice of the board meeting of the Company to be held on 4th November 2019. The email giving this notice was sent to the Claimant at the Sportpesa.com Address (“the Second Meeting Notice”). The business to be transacted at the meeting was identified in the following terms:
“Notice is hereby given that a meeting of the board of directors of the Company will be held on 4 November 2019, at 1 pm UK time (3 pm Kenya time) over the telephone to transact the business set out below: 1. To discuss the shareholder responses to the Offer Letters circulated on 17 October 2019; 2. To allocate any additional shares (if any) which shareholders have rejected to subscribe for; 3. To allot the new shares; 4. To discuss and approve board changes; and 5. Any other business.”
[90]On 24th October 2019, the Second Defendant emailed Ms Grigorian-Coates and the Third Defendant, attaching what was referred to as a share cap table, and raising the following questions for Ms Grigorian-Coates:
“Please see attached the distribution as per my discussions with the shareholders that I have been able to contact. Everyone has double subscribed and I have added what I can contribute and the rest of the shareholders have agreed that if we oversubscribe we should take the funds and issue extra shares, is this possible? Unfortunately, no response from the others ... I will continue to try. Can you please advise if you have been able to get delivery confirmations by any more of the DHL packets?”
[91]The advice of Ms Grigorian-Coates was that, to avoid the dilution which would result from taking money from only certain shareholders in the Company, another option would be to do another round of fundraising after the issue of the shares pursuant to the First Capital Raise. This was agreed by the Second Defendant, and it was agreed that this should be added to the agenda for the board meeting on 4th November 2019.[92]On 4th November 2019, Ms Grigorian-Coates emailed call-in details for the board meeting to the Second and Third Defendants and to the Claimant, using the Pevans Address for the Claimant. The Claimant’s evidence was that he did not receive this email or the earlier email of 22nd October 2019, giving notice of the board meeting, which was sent to the Sportpesa.com Address.[93]The meeting itself took place, by telephone, at 1.00pm on 4th November 2019. The meeting was attended by the Second and Third Defendants, and chaired by the Second Defendant. The Claimant did not attend. The minutes of this meeting (“the November 2019 Company Board Meeting”), the accuracy of which is disputed by the Claimant, did not record any apologies for absence from the Claimant. As I have said, the Claimant’s evidence was that he had been given no notice of this meeting and was not aware that it was taking place.[94]The minutes set out a record of those who had applied for shares in the First Capital Raise. The minutes went on to record a resolution that the applications be accepted and that the necessary measures be taken to issue the new shares and to register the applicants as owners of the new shares.[95]So far as the further capital increase was concerned, the minutes recorded the following proposal and resolution:
“5.1 The Chairman reported that following the closure of Pevans East Africa Limited, the Company's biggest customer which accounts for approximately 98% of Company's revenues and despite the initial raise of capital already carried out in November 2019, the Company requires further emergency funding in order to continue its operations. 5.2 It was proposed that the share capital of the Company be increased by further £500,000. 5.3 It was explained that in order to raise the share capital of the Company, pursuant to section 561 of the Act, the Company proposed to offer each of its shareholders, being holders of ordinary shares of £1 each of the Company on the register of members, the opportunity to subscribe for new ordinary shares in proportion of their shareholding at £1 per share ("Issue Price"), payable in full on acceptance. 5.4 It was resolved that: 5.5 the capital increase of £500,000 and the Issue Price be approved.”
[96]So far as the position of the Claimant was concerned, the following resolution was recorded:
“7 .1 The Chairman reported that the Company has received a special notice under sections 168 and 312 of the Act proposing a resolution to remove Paul Ndungu as director of the Company as an ordinary resolution of the Company. 7.2 The draft notice of the general meeting ("GM Notice") was tabled at the meeting. It was resolved that the GM Notice be approved and be circulated to each member of the Company giving such member at least 28 days clear notice of the general meeting.”
[97]The minutes went on to record the approval of the draft version of the offer letter which was to be despatched to the Company shareholders in connection with this further capital raise (“the Second Capital Raise”).[98]On the same day (4th November 2019), the Second Defendant sent an email (13:44) to the Third Defendant, and to the Claimant at the Pevans Address, enclosing a letter addressed to the directors of the Company. The letter gave notice of the intention of the Second Defendant to propose a resolution at the next general meeting of the Company for the removal of the Claimant from his office as a director of the Company.

Narrative – the initial complaints by the Claimant

[99]On 11th November 2019 the Claimant sent an email to the Company shareholders, from the GNorth Address, stating that he had been informed by Ms Wachera that letters had been sent out. The email was in the following terms:
“I have just been informed by Asenath this morning that a few weeks ago there were letters sent to SP Global Holdings or SP Holdings Limited. This has subsequently been confirmed to me by Dr Kiaric I am told the letters or emails were sent by Miss Kalina Krantova. I have not received such a letter or communication either by letter or email from the said source. If indeed there was such a resolution, I may want to know at what Board meeting of SP Global or SP Holdings Limited it was made as, if I remember well I am a Director of both companies. I am not sure as well whether I am or not a shareholder, whether my shares have been transferred. While my instincts are clear what the game clearly is. I request I get the notice within the next 48 hours by a copy of email or letter.”
[100]The Third Defendant responded by email the same day, in the following terms:
“Further to your email below, I can confirm that the board of Sportpesa Global Holdings UK Limited (Company) has held two board meetings on 16 October 2019 and 4 November 2019 respectively. On both occasions, each board member, including you, were legally served notice of each board meeting (Notices) and in accordance with the articles of association of the Company (Articles). The notice of the board meeting held on 16 October 2019 was circulated to you on 9 October 2019 and the notice of the board meeting held on 4 November 2019 was circulated to you on 22 October 2019. Both notices were sent to your Sportpesa email. Further, pursuant to the board meeting held on 16 October 2019, the shareholders of the Company were served their statutory pre-emption offer letters. These were emailed to you on 17 October 2019 at your Sportpesa email address. The original documents were sent to you via DHL on 21 October2019 with DHL tracking number 2348530030. I hope the above clarifies our position.”
I hope the above clarifies our position.”[101]The Claimant responded to the Third Defendant by email the same day:
“As you maybe aware my @sportpesa email was disabled quite a while back, maybe over 1 year ago. I have actually never used it for any communication. The disabling or ineffectiveness of my email should be well known to yourself as it controll ed from that end. You as the administrators of@sportspesa.com email are clearly aware of this. Even the UK and Italy daily reports that were being sent to me were never sent on @sportpesa.com, all my notices and Board communication including minutes of meeting of IOM were always sent through@gnorth.co .ke. even previous notices of ealier meetings including the last one for liverpool you sent me to my usual email. The fact is that non of the non executive Kenyan local directors or shareholders ever use @sportpesa.co.ke or@sportpesa.com. I am surprised that two Board meetings have been held which purportedly I received Board meeting notices on emails I dont have. I note you also indicate that I was sent the preemptive notices from DHL. Can you ask them which address they delivered, to who and on what date it was received by me. This can only be done from your end as you are the one who know the address you sent to as well as DHL is supposed to give feedback Kalina, whenever you need me to sign or scan an urgent document, you know the email you always use. I guess the notice of meetings were never intended to reach me . It was never meant for me to attend the Board meetings. Even now I guess I am still not suppose to receive the preemptive notices nor minutes of the purported board meetings and the attendees as they should have been attached on this email. No further comment at this stage.”
No further comment at this stage.”[102]On 12th November 2019 the Claimant sent a long email to the Third Defendant. The email was also addressed to a number of other individuals, including the Second, Fourth and Fifth Defendants. In this email the Claimant set out his complaints in respect of what he characterised as an attempt to defraud him of his investment in the Company. The Claimant summarised his demands in the following terms, at the end of the email:
“All any all I won't lose my investment of US$ 44.2 because of a pre-emption worth GBP 500,000 (I understand from my other local shareholders)ie $640,000 in today's rate which is meant to to substantially reduce the shareholding in all operations countries of the group substantially almost to nothing. Even as I await the pre-emptive documents from OHL, I request and demand that my shares be returned to 17% and whatever amount payable on such shares I pay prorate at whatever price was declared, also any shares not taken by respective shareholder I also exercise my pre-emption right on them. I demand that the proper process be followed, Directors be well informed and each willing shareholder get their shares as per applicable companies act. Any act to disposes me or any shareholder in the just flawed and fraudlent process will be resisted with full force of law and disclosures. Directors of Sportpesa Global Holdings Ltd, Mr Bozoukov and Miss Karadzhove, please reconstitute a Board meeting again. Make the process fair to all, don't rig and corrupt the system for your brethrens. All the funds motivating this fraud were made and in whatever way remitted from Kenya yet you have bent and corrupted to take away from Kenyans. From my email yesterday, if this anomaly is not immediately corrected with Seven 7 of email dated 11 th November 2019, failure to which I will commence legal process in Kenya and all areas of jurisdiction of operations of Sportpesa Global Holdings Ltd subsidiaries.”
[103]The Claimant’s evidence was that, in addition to pursuing DHL for the hard copy of the First Offer Letter, he also sought to access his Sportpesa.com email account. His evidence was that he could not obtain access to this email account, and that he sought assistance from Mr Dawson, I believe on 25th November 2019, who was similarly unable to obtain access. The Claimant’s evidence was that it was only after Mr Dawson had provided him with a new email address (the ke.Sportpesa Address) that he was finally able to log into the Company’s email system and find the email of 9th October 2019 containing the First Meeting Notice (giving notice of the October 2019 Company Board Meeting), the email of 22nd October 2019 containing the Second Meeting Notice (giving notice of the November 2019 Company Board Meeting) and the email of 4th November 2019 (attaching the letter giving notice of the resolution to remove the Claimant as a director of the Company).[104]On the same day, 25th November 2019, the Third Defendant emailed the Claimant to say that the Claimant’s concern was “well noted”, and that she would consult with their legal team and would advise the Claimant on the way forward “shortly”. The Claimant sent an email to the Third Defendant on the same day, I believe in response to the Third Defendant’s email. In this email, which I have mentioned earlier in this judgment, the Claimant stated as follows:
“Well received. I will await the consultation with your lawyers. Thank you for this afternoon communication. Steve has already activated my account, although it took considerable time to activate and enable it. I have also now received emails on notification of two Board meetings for SPGHL as well as notice from Ivo to remove me from being a director of SPGHL as per attached. I also finally received the DHL envelop which was addressed to an incorrect address from which was sent to the wrong address. The white envelop inside the DHL envelop had the right address while the DHL main envelop had a wrong address. The courier was from Sportpesa Services Limited, Isle of Man.”
[105]There is no evidence that the Third Defendant did come back to the Claimant, further to her email of 25th November 2019, at or shortly after the time when it was sent. Instead, on 17th December 2019, the Claimant sent a further email to the Third Defendant, with the following demand:
“It is now 5 weekas since I raised an issue on how the rights issue was handled and especially to me. It's also now over 3 weeks since your email on this matter, where 2 weeks after my fist email you wrote the below email with "Your concern well noted, Let us consult with our legal team and will advice you the way forward shortly" I also refer to my two telephone conversations with Mr Peter Kihanya of yesterday. I request that you immediately, within the next 24 hours revert to me on what your lawyer has adviced on this pre-emption right whose motive I still hold to be as per email below, failure to which I will take the necessary acti on to revert the shareholding to the original shareholding as at when the shareholders have pumped into SPGHL over GBP 3S , 000 ,000 over 3 years while the purpoted 2 weeks Rights issue is to dilute certain shareholders of their shareholding up to 83.33% by pre - emption rights of GBP 500,000.”
[106]The Claimant followed this up with an email to Ms Wachera, sent on 18th December 2019. In this email the Claimant set out, at some length, his allegation that there had been a deliberate scheme to dilute his shareholding in the Company. The Second to Fifth Defendants were copied into this email. It is not necessary to quote the email in full, but the central allegations were in the following terms:
“In a previous email I had indicated that during the pre-emption offer a deliberate technical and legal effort fraudulent for all intent and purpose was made to dilute the shareholding of Mrs Asenath Wathika and myself was made by purporting to issue GBP 500,000 as a 2 weeks pre-emptive rights. I understand Mr Bozoukov and Miss Karadzhove met and decided to call a Board meeting which was served to me on a deactivated and disabled email, an address only they have control of within the system. They decided the date the format of the meeting including the Agenda with instructions from whomever in order to issue a pre-emptive rights issue of which the subtle objective in which their kith and Kin were supposed to benefit at the expense of other investors. My letter by DHL was sent to the wrong address. Actually it was not sent by SPGHL from their registered address in the UK but actually the letter was sent as indicated in the envelopes from Sportpesa Services Limited from an IOM address. I came to learn of the Rights issue from Asenath after the purported 2 weeks deadline was expired. The deliberate technical knockout had been achieved in a board meeting convened, deliberated on in two Board meetings as well as shares issued and allocated by Kalina and Bozoukov to the preferred shareholders by diluting significantly Asenath and I.”
[107]The email concluded with the following demand:
“As per initial email, I request that this situation be reversed immediately. The fraudulent transaction be reversed immediately to capture the original situation or omitted shareholders be requested to match up to the capital requirement if need be.”
[108]The above email exchanges were all copied to a number of individuals, who I believe comprised or included the Company shareholders. The emails referred to in this section of this judgment were sent and received by the Claimant through the GNorth Address.

Narrative – the Second Offer

[109]It was in the circumstances of these email exchanges that the Second Capital Raise proceeded. On 20th December 2019 the Third Defendant sent an email to the Claimant, using the Claimant’s new ke.Sportpesa Address. The email stated as follows:
“Further to a board meeting of Sportpesa Global Holdings Limited ("Company") held on 4 November 2019, it was resolved to undertake a second round of a share capital increase of the Company to be effected by way of issuing new shares in the capital of the Company. Pursuant to statutory pre-emption rights contained in the articles of association of the Company, the new shares will be first offered to you as an existing shareholder of the Company. You can accept the offer or reject it, if you do not wish to participate in the issue. Please find attached the following documents: • Offer letter setting out the number of shares offered to you. the subscription price and further information regarding the offer: • Acceptance letter to be signed if you accept the offer; and • Rejection letter if do not wish to participate in the issue. I look forward to receiving your response (further information on how to respond and what to do next is set out in the Offer Letter). Please let me know if you have any questions.”
Please find attached the following documents: Please let me know if you have any questions.”

Please find attached the following documents:

[110]The enclosed offer letter (“the Second Offer Letter") was dated 20th December 2019 and was addressed to the Claimant at his correct address in Nairobi. The offer contained in the Second Offer Letter was in the following terms:
“1. SUMMARY The board of directors of the Company ("Board") is pleased to offer you 14,167 of ordinary shares at £1 per share in the capital of the Company. 2. BACKGROUND 2.1 Following the closure of Pevans East Africa Limited, the Company’s biggest customer which accounted for approximately 98% of its revenues, the Company requires further funding in order to continue its operations. 2.2 The Board has considered the amount of funding required and has approved lo increase the share capital of the Company by further £500,000. 2.3 The Board has approved to allot 500,000 ordinary shares in the capital of the Company at £1 per share ("New Shares") in accordance with section 550 of Companies Act, which provides the Board authority to allot the New Shares. 3. OFFER 3.1 In accordance with statutory pre-emption rights under section 561 of Companies Act, you are entitled to subscribe for: 14,167 ordinary shares at £1 per share ("Offer''). 3.2 The Offer is equal to the proportion (in nominal value) of the ordinary share capital of the Company held by you. 3.3 If you accept the Offer. you will be required to pay the subscription price of £1 per share ("Subscription Price"). 3.4 In the event any shareholders of the Company decline to participate in the issue. of New Shares, you will have the option to subscribe for additional New Shares”
. The board of directors of the Company ("Board") is pleased to offer you 14,167 of ordinary shares at £1 per share in the capital of the Company. 14,167 ordinary shares at £1 per share ("Offer'').[111]The time limit for acceptance of this offer (“the Second Offer”), and the consequences of non-acceptance, were identified in the following terms:
“4. LONGSTOP DATE 4.1 The Offer is valid for 14 days from the date of this letter. The Board kindly requests that you confirm whether you accept or reject the Offer by 6 January 2020 by signing the enclosed acceptance letter ("Acceptance Letter") or rejection letter ("Rejection Letter"), as appropriate. 4.2 In the event that the Company does not receive your confirmation of acceptance or rejection by 6 January 2020, the Offer will expire and you will lose your right to subscribe for the New Shares. The remaining shareholders will have the opportunity to subscribe for some or all of the New Shares which have been offered to you by virtue of this letter.”
[112]The Second Offer Letter concluded by setting out the arrangements for communicating either acceptance or rejection of the Second Offer and the arrangements, if the Second Offer was accepted, for the allotment of the new shares and the payment of the subscription price. The Second Offer Letter attached a prepared form of letter for accepting the Second Offer and a prepared form of letter for rejecting the Second Offer, each in the name of the Claimant and each drafted as a letter from the Claimant to the directors of the Company. Both forms of letter were drafted on the basis that the Claimant would be accepting or rejecting the allotment of 14,167 shares. The deadline for acceptance or rejection was 6th January 2020.[113]It is common ground that the Second Offer Letter and accompanying documents did reach the Claimant, both by email and by DHL courier, to the correct address for the Claimant in Nairobi.[114]It is obvious, but important to note, that the Second Offer Letter and the accompanying forms of acceptance and rejection letters were all drafted on the basis that the entitlement of the Claimant was to 14,167 shares. The Second Offer documents were therefore drafted on the basis that the Claimant’s shareholding in the Company had been diluted, as a result of the Claimant not taking up the First Offer, from 17% to 2.83%.

Narrative – the negotiations following the Second Offer

[115]On 27th December 2019, the Second and Third Defendants emailed the Claimant in response to his email to Ms Wachera of 18th December 2019. The email asserted that proper notice had been given to the Claimant of the October 2019 Company Board Meeting and the November 2019 Company Board Meeting, that the meetings had been quorate, and that the resolutions passed at the meetings had been passed unanimously. The email concluded with the following proposal:
“In line with your request, we have indeed queried with our legal advisors on what the process is in the current situation. We are yet to receive a final confirmation, but what we now know is that you have to fulfil three steps in order for your request to be considered in good-faith. Step 1 is to fill the ORIGINAL ACCEPTANCE FORM sent to you in the OHL package, which you have now confirmed you have received. Step 2 is to fit the ORGINAL ACEPTANCE FORM sent to you today (20th of December, 2019) for the additional capital raise required to keep the companies from default by mid-January. Step 3 is to submit the sum of the funds for both capital raises (GBP 170,000) into the provided bank account, where the funds will be in escrow until the legal resolutions are passed at the next shareholder meeting. As always, we are available to discuss any further concerns that you might have.”
As always, we are available to discuss any further concerns that you might have.”[116]The sum of £170,000 referred to in this email represented two payments of £85,000. At the issue price of £1.00 per new share, and in circumstances where the sums to be raised by the First Capital Raise and the Second Capital Raise were, respectively, £500,000, the figure of £170,000 represented the total sum which the Claimant would have had to pay if he had subscribed, in response to each of the First Capital Raise and the Second Capital Raise, as a 17% shareholder in the Company.[117]The Claimant responded by email on 2nd January 2020. It is not necessary to set out the email in full, but the Claimant’s response to the proposal in the email from the Second and Third Defendants was in the following terms:
“you have listed 3 steps. 1. 1 much later, after closure of the first offer received the email and OHL package offering me Premptive rights of GBP 85,000, as much I don’t agree with the process of convening the Board meetings, the issue and pricing of shares, the approval of accounts etc, without prejudice, consider this accepted. 2. I have subsequent to this received an offer for preemptive rights of GBP 14,167 out of GBP 500,000 meaning that I have been diluted to 2.833% from 17% following issuance of the clearly defective GBP 85,000. i still maintain that I duly accepted the 1st offer as per my email when i learned of the offer from a co shareholder, subsequently my 2nd offer should have read GBP 85,000 and not GBP 14,167. I request you amend appropriately the 2nd offer letter to GBP 85,000. once again without prejudice I accept the 1st and 2nd preemptive right offer of GBP 170,000 3. Accepted, however i refuse to be treated as an outsider, I wouldn't understand why my funds would need to be held in an escrow account, while as i understand here, awaiting the next shareholders meeting. Between You and Kalina, just like the two board meetings, the two resolutions, meet, form a quorate and quorum and make a resolution to right both offers, the GBP 170,000 will be sent promptly on amendment. i note you have also indicated that I Pay GBP 170,000 into the provided bank account, there is no provided bank account details.”
[118]The Second Defendant responded the same day, in an email to the Claimant which was also sent to other directors and shareholders of the Company. The email wished all directors and shareholders a happy new year for 2020, and went on to state that the Claimant’s comments were well noted and that “we will work on getting each of those looked at and responded to as early as next week when the full staff and legal team are back from holiday schedule”. The Second Defendant also said that he would discuss with the Third Defendant sharing the bank details requested by the Claimant.[119]On 10th January 2020 the Third Defendant circulated an email to the directors of the Company, giving notice of a board meeting of the Company which was to take place on 13th January 2020, at 1.00pm, for the following purposes:
“1. To discuss certain changes to shareholder subscriptions following the first capital increase carried out in November 2019; and 2. To re-allocate certain shares following the changes;”
[120]The email also gave dial-in details for the meeting. On 13th January 2020 (13:24) the Third Defendant sent an email recording that the meeting at 1.00pm had not been quorate because there was only one director present. The Third Defendant said that she had heard the Claimant dial in for a few seconds, but then drop off the line. The Second Defendant had also failed to dial in. The Third Defendant proposed that the meeting be re-scheduled to 3.00pm. The Claimant’s evidence was that he contacted the Third Defendant by WhatsApp, after finding himself as the only person at the meeting at 1.00pm, and was informed that the meeting would be an hour later. The Claimant’s evidence was that he was still the only participant at 2.00pm. He said that he contacted the Third Defendant again by WhatsApp, and was told that the meeting would proceed at 3.00pm. It appears that the Claimant did call in again at 3.00pm but was not connected. The Claimant’s evidence was that he finally joined the meeting at 4.00pm, when the meeting proceeded. There are minutes of this meeting (incorrectly dated 13th January 2019) which record that all three directors of the Company, including the Claimant, were present. The Second Defendant was recorded as chairing the meeting. By reference to the minutes, there was no discussion of the Claimant’s position, but resolutions were passed dealing with the subscription position of the Second Defendant and one other shareholder, Ronald Karauri, who was Chief Executive Officer of Pevans. The Claimant’s evidence was that he raised the question of the dilution of his shareholding and the restoration of his 17% shareholding in the Company, and that his co-directors said that they would look into the matter. There is no record of this in the minutes.[121]Returning to the negotiations between the parties, aside from whatever may have been said at the meeting on 13th January 2020, it will be recalled that the ball was in the Second Defendant’s court, in the sense that the Second Defendant had promised, by his email of 2nd January 2020, to look at and respond to the Claimant’s complaints in the Claimant’s email of 2nd January 2020. There was however no further response from the Second Defendant. Instead, the Claimant sent a chasing email on 24th June 2020, acknowledging that the Covid pandemic had disrupted normal life, but reminding the Second Defendant that the Claimant was still waiting for a response to his email of 2nd January 2020, including the requested bank details. The email concluded by requiring a response within 7 days, default of which the Claimant would take as an indication that he could proceed with such other action as he deemed necessary.[122]The Second Defendant responded by email on 30th June 2020. In this email the Second Defendant repeated the three steps to be taken by the Claimant, as set out in the email from the Second and Third Defendants sent on 27th December 2019. The email also gave details of an Isle of Man bank account, in the name of the Company, into which the required payment of £170,000 could be made. The email stated that, after these steps had been completed, the directors of the Company would call a special meeting of shareholders and propose that “the capital raise be approved”.[123]The Claimant responded by email on 3rd July 2020. In this email the Claimant reiterated his complaint in relation to the First and Second Capital Raises, but acknowledged what he referred to as “your gesture to reinstate my dispossessed shareholding in SPGHL”. The Claimant then went on to accept the three-step proposal, but subject to certain queries and qualifications. As the terms of this second part of the email are of some importance, I quote them in full:
“Without prejudice, I accept to send GDP 170,000 as requested. However I would like some to note the following. 1. Send me the ORIGINAL ACCEPTANCE FORM electronically as proposed 2. Since the 1st ORIGINAL ACCEPTANCE FORM was not sent to me as per the procedure, the ORIGINAL ACCEPTANCE FORM of 20th December 2019 should reflect the amount of call had i subscribed to the 1st call. In this case I am being treated as an outsider ( which i maybe), why would I be required to hold funds in an escrow account, I am the one insisting that - Without prejudice'i need to pay GBP 170,000 to rightfully reclaim my investment and shareholding in SPGHL. I may need further clarification. 1. in the escrow account, who will be the guardian of my GBP 170,000 interest? 2. How long will the share holders resolution take after receipt of my funds. Even in preemptive rights issue after acceptance there are the number of days required for allotment of shares 3. Can a resolution be made to enable me the GBP 170,000 Instantly I remain awaiting your response to my above queries and concern to enable expedite the process.”
[124]The Claimant chased for a response to this email on 17th September 2020 and on 29th September 2020. The bundle of documents for the trial included a printout of what was, on its face, an email sent by the Second Defendant to the Claimant on 2nd October 2020. The printout of this document (“the October 2020 Email”) was addressed to the Claimant and, in common with the previous emails, was also addressed or copied to a number of other individuals, including the Third Defendant and Company shareholders. The October 2020 Email contained a response to the Claimant’s queries promising, in particular, a shareholder’s meeting on 23rd October 2020 and that the Claimant’s concerns about the security of the escrow account would be taken on board. The header to the October 2020 Email recorded the apparent date and time of its sending as follows:
“Sent: Fri 10/2/2020 8:24:32 PM Coordinated Universal Time”
[125]As matters turned out at the Trial, the position in relation to the October 2020 Email was somewhat strange. Up to, and including, the written opening submissions of the Second to Sixth Defendants for the Trial, the Second to Sixth Defendants presented their case on the basis that the October 2020 Email had been sent to the Claimant. The evidence of the Second Defendant, in his first witness statement, was that he sent the October 2020 Email in response to the Claimant’s emails in July and September 2020.[126]On 30th April 2025, that is to say two days before the Trial commenced in court, Jury O’Shea (the Claimant’s solicitors) wrote to DLA (the solicitors for the Second to Sixth Defendants), querying the authenticity of the October 2020 Email. Jury O’Shea served (out of time) a notice on DLA requiring the Second to Sixth Defendants to prove the October 2020 Email, pursuant to CPR 32.19. Jury O’Shea also made a request for the production of native format copies of the email received by each of the Third to Fifth Defendants, and for other information in relation to the email.[127]The October 2020 Email was also the subject of an application made by the Second to Sixth Defendants, on the first day of the Trial, whereby the Claimant sought an extension of time for serving the notice pursuant to CPR 32.19, relief from sanctions in this respect, and disclosure of all native format copies of the email. This application formed part of a set of applications made by the Claimant on the first day of the Trial, to which I shall come later in this judgment. For present purposes what is relevant is that the Claimant elected not to pursue this particular application. On the afternoon of the first day, at the point where Mr Macpherson reached this particular application, I was told by Mr Macpherson that he had been informed by Mr Riley that the October 2020 Email was a draft which had never been sent. Mr Macpherson stated that, subject to this being confirmed to the court, he was happy not to move this particular application. Mr Riley duly rose to confirm that the October 2020 Email was a draft, which remained in either an outbox or a deleted box of the Second Defendant. In these circumstances, the application for an extension of time was not pursued.[128]Returning to the email correspondence which was sent, on 25th November 2020 the Claimant sent a further email to the Second and Third Defendants. The email was lengthy, reviewing the history of the dispute in some detail and making various allegations of unlawful and improper conduct. The email commenced by demanding answers to the queries raised by the Claimant in response to the Second Defendant’s email of 30th June 2020 and threatening court proceedings in the UK if the required answers were not provided within 7 days. This email of 25th November 2020 appears to have marked the end of the direct negotiations between the Claimant, on the one side, and the Second Defendant, on the other side, arising out of the Second Capital Raise and the Second Offer.

Narrative – the disciplinary hearing

[129]On 5th November 2020 the Third Defendant circulated a notice of a general meeting of the Company to be held on 7th December 2020, to vote on a resolution to remove the Claimant as a director of the Company, with immediate effect.[130]On 1st December 2020 the Third Defendant wrote a letter to the Claimant, expressed to be written on behalf of the Company, but using notepaper which bore the name of SPS Sportsoft. The letter required the Claimant to attend a disciplinary hearing (to be held remotely) on 7th December 2020. The letter set out a series of what were expressed as “allegations of gross misconduct” on the part of the Claimant. The allegations fell broadly into two parts. The first part comprised an allegation that the Claimant had attended meetings of various group companies while intoxicated. The letter stated that this allegation was “as set out in more detail in the witness statements which will be provided to you prior to the hearing”. The second part comprised a series of allegations of failure by the Claimant to carry out his duties as a director of the Company.[131]The Claimant responded by email on 7th December 2020, in trenchant terms, denying the allegations.[132]There does not appear to be any written record of the general meeting of the Company, held to vote on the resolution to remove the Claimant as a director of the Company. It is however common ground between the parties, on the pleaded cases, that there was a meeting of the Company shareholders on 7th December 2020 at which a resolution was passed removing the Claimant as a director of the Company. I assume that this meeting was also intended to constitute the disciplinary hearing which had been notified to the Claimant. There is no evidence that any witness statements were provided to the Claimant in advance of the meeting, further to the Third Defendant’s statement, in the letter of 1st December 2020, that such witness statements would be provided to the Claimant. No such witness statements were in evidence at the Trial.[133]The Claimant did not attend the meeting/disciplinary hearing. His evidence was that he did not do so because he regarded the disciplinary proceedings as a sham, lacking in fairness and based on false accusations.[134]On 5th January 2021 the Second Defendant wrote to the Claimant. The letter, which was attached to an email sent by the Third Defendant to the Claimant on the same day, was expressed to be sent further “to the disciplinary hearing held on 7th December 2020 which you declined to attend” and to inform the Claimant “of my decision”. After then repeating the allegations of gross misconduct, the letter informed the Claimant that the Second Defendant had decided to dismiss “your employment for gross misconduct”. The dismissal was stated to have immediate effect, and the Claimant was advised that he had a right of appeal to the Third Defendant.

Narrative – the Third Offer

[135]The evidence of the Second Defendant was that, by December 2021, he and the Third Defendant had succeeded in making a significant reduction in the Company’s costs and operating expenses, and had also managed to renegotiate the Company’s liabilities and postpone the making of payments. The Second Defendant’s evidence was however that the Company’s cash flow was still insufficient to support its liabilities, with the consequence that the Second and Third Defendants decided that a third capital raise, this time in the sum of £900,000, was required. I will refer to this third capital raise as “the Third Capital Raise”.[136]On 22nd December 2021 the Third Defendant sent an email to the Claimant at his GNorth Address, informing him that she had sent a confidential and time-sensitive email to the ke.Sportpesa Address. The email explained that for “data security reason we cannot share the documents at your Gnorth email.”. The email also stated that the documents sent to the ke.Sportpesa Address were also being sent to the Claimant’s Kenyan address by DHL that day. The email asked the Claimant to let the Third Defendant know if he had difficulties accessing the ke.Sportpesa Address, and that the IT team would contact the Claimant to “help you to set up again your credentials”. There then followed an exchange of emails in which the Claimant said that he was unable to access the ke.Sportpesa.com Address. Mr Newcombe-Jones, who was then a Senior Infrastructure Engineer employed by SPS Sportsoft, sought to assist the Claimant, but in the meantime the DHL delivery was received by the Claimant on 23rd December 2021.[137]The documents sent by DHL delivery included an offer letter (“the Third Offer Letter") in relation to the Third Capital Raise. The Third Offer Letter was dated 22nd December 2019, which was an error for 22nd December 2021. The Third Offer Letter was addressed to the Claimant at his correct address in Nairobi. The offer contained in the Third Offer Letter was in the following terms:
“1. SUMMARY The board of directors of the Company ("Board") is pleased to offer you 13.909 of ordinary shares at £1 per share in the capital of the Company). 2. BACKGROUND 2.1 It has been another challenging year following the impact of the suspension of the licensed activities of our biggest customer in Kenya in July 2019 and subsequently the impact of COVID on the sports world starting in March 2020, which has resulted in djscontinued sports events for over 100 days without relevant events to offer, which further damaged income generation from all the remaining and operating territories. 2.2 We have managed through a very difficult 12 months period in 2021 with the shareholders’ previous capital support. but pressure from suppliers as related to our pre-2019 liabilities has continued to grow and despite the extreme cost cuts made in the last 24 months, business has not recovered co expected pre-COVID levels which requires additional funding in order to be able to recover. 2.3 Given the ongoing financial circumstances of the Company and its business, the directors have considered multiple funding options, which include, but are not limited to, bank financing and a strategic investment transaction. in order to ensure the continuity of the operations. The company continues to be actively engaged in such discussions which are subject the usual commercial confidentiality undertakings. 2.4 Due to the lack of any such funding available to the Company at this particular time, in the short term the only option available to the Company is to raise capital from its shareholders. In the medium and long term, any other future funding could change the Company's value and the valuation attributable to the Company and its business pursuant to the Capital Raise (as defined below). 2.5 The Board has considered the amount of funding required and has approved to increase the share capital of the Company by further £900.000 ("Capital Raise"). 2.6 The Board has approved to allot 900,000 ordinary shares in the capital of the Company at £1 per share ("New Shares") in accordance with section 550 of Companies Act, which provides the Board authority) to allot the New Shares. 2.7 Shareholders are advised to exercise caution in making their own commercial decision whether or not to participate in the Capital Raise, having regard to the current trading circumstances of the Company and the potential volatility in the value of the Company's shares in the short to medium term. 3. OFFER 3.1 In accordance with statutory pre-emption rights under section 561 of Companies Act, you are entitled to subscribe for: 13,909 ordinary shares at £1 per share ("Offer"). 3.2 The Offer is equal to the proportion (in nominal value) of the ordinary share capital of the Company held by you. 3.3 If you accept the Offer, you will be required to pay the subscription price of £1 per share ("Subscription Price"). 3.4 In the event any shareholders of the Company decline to participate in the issue of New Shares. you will have the option to subscribe for additional New Shares.”
The board of directors of the Company ("Board") is pleased to offer you 13.909 of ordinary shares at £1 per share in the capital of the Company). 13,909 ordinary shares at £1 per share ("Offer").[138]The time limit for acceptance of this offer (“the Third Offer”), and the consequences of non-acceptance, were identified in the following terms:
“4. LONGSTOP DATE 4.1 The Offer is valid for 14 days from the date of this letter. The Board kindly requests that you confirm whether you accept or reject the Offer by 7 January 2022 by signing the enclosed acceptance letter ("Acceptance Letter") or rejection letter ("Rejection Letter"), as appropriate. 4.2 In the event that the Company does not receive your confirmation of acceptance or rejection by 7 January 2022, the Offer will expire and you will lose your right to subscribe for the New Shares. The remaining shareholders will have the opportunity to subscribe for some or all of the New Shares which have been offered to you by virtue of this letter.”
[139]The Third Offer Letter concluded by setting out the arrangements for communicating either acceptance or rejection of the Third Offer and the arrangements, if the Third Offer was accepted, for the allotment of the new shares and the payment of the subscription price. The Third Offer Letter attached a prepared form of letter for accepting the Third Offer and a prepared form of letter for rejecting the Third Offer, each in the name of the Claimant and each drafted as a letter from the Claimant to the directors of the Company. Both forms of letter were drafted on the basis that the Claimant would be accepting or rejecting the allotment of 13,909 shares.[140]It is, again, obvious but important to note that the Third Offer Letter and the accompanying forms of acceptance and rejection letters were all drafted on the basis that the entitlement of the Claimant was to 13,909 shares. The Third Offer documents were therefore drafted on the basis that the Claimant’s shareholding in the Company had been diluted, as a result of the Claimant not taking up the First Offer or the Second Offer, from 17% to 1.5%.

Narrative – the negotiations following the Third Offer and the commencement of the Proceedings

[141]The Claimant responded to the Third Offer by sending the Company the form of acceptance letter, dated 3rd January 2022. The Claimant had made manuscript amendments to the acceptance letter, by which the Claimant agreed to pay £323,000. The manuscript amendments showed that this sum had been arrived at by taking 17% of £500,000, 17% of £500,000 and 17% of £900,000. In other words, the Claimant’s calculations were made on the basis that he had been and remained entitled, on each Capital Raise, to 17% of the New Shares. The Claimant also added the words “Without Prejudice” in manuscript at the top of the amended acceptance letter. The Claimant also returned the rejection letter, signed by himself, with the following calculations added in manuscript:
“£500,000 x 17% = £85,000 £500,000 x 17% = £85,000 £900,000 x 17% = £153,000 £323,000” £500,000 x 17% = £85,000 £323,000”
[142]The Second Defendant responded to the Claimant’s amended acceptance letter, by email sent to the GNorth Address on 7th January 2022, in the following terms:
“Thank you for submitting your forms and since it is your clear indication that you want to subscribe for this allotment and you are entitled to subscribe for the shares as per the offer letter our legal advise has been that you should confirm if you accepts it or not on a clear form. The deadline is midnight tonight, but given we are emailing today we can extend it until 12pm UK Wednesday. Please note that if you fail to respond by the deadline with the correct document your right to subscribe will lapse.”
[143]I take the reference to “clear form” to have meant that the position of the Company and the Second and Third Defendants was that the Claimant could only subscribe for the amount of shares specified in the Third Offer Letter.

Narrative - the pre-action correspondence and the commencement of the Proceedings

[144]Prior to the Third Capital Raise, on 25th October 2021, Jury O’Shea sent a letter of claim, on behalf of the Claimant, to Mr Macharia, as representative of the Company. The letter of claim set out the details of the Claimant’s claims and threatened the presentation of an unfair prejudice petition, in the absence of a satisfactory resolution of the dispute. As previously explained, Mr Macharia was the head of the global legal department of the Business. The letter of claim was copied to the Second to Sixth Defendants and a number of other individuals.[145]By letter dated 6th December 2021, DLA made their formal response to the letter of claim, on behalf of the Second to Sixth Defendants, denying the claims on the grounds set out in the letter of response.[146]Further pre-action correspondence ensued between the solicitors for the parties, in 2022, which is it not necessary to detail in this judgment. The parties were unable to resolve their differences and, as I have already set out, the Claimant commenced two sets of proceedings. The Claimant commenced the first set of proceedings by the Part 8 claim form, issued on 19th January 2022, seeking compensation from the First, Second and Third Defendants, pursuant to Section 563, for alleged breaches of the pre-emption provisions in Sections 561 and 562. The Claimant commenced the second set of proceedings by the petition presented on 28th November 2022, seeking relief against the Second to Sixth Defendants in respect of alleged unfair prejudice, pursuant to Section 994. The two sets of proceedings were consolidated by the order of ICC Judge Prentis, made on 25th November 2022. Given these dates, I assume that the order of ICC Judge Prentis was made in anticipation of the presentation of the unfair prejudice petition. The issue of the Part 8 claim form, on a date prior to completion of the pre-action correspondence is, I assume, explained by the fact that proceedings for compensation pursuant to Section 563 are subject to a short two-year limitation period, as specified in Section 563(3).

The claims in the Proceedings

[147]The Claimant alleges that the Defendants have acted unlawfully in a number of ways.[148]In relation to the October 2019 Company Board Meeting and the November 2019 Company Board Meeting, the Claimant made the following allegations:(1) The Second and Third Defendants, as the co-directors of the Company with the Claimant, deliberately failed to give the Claimant notice of the October 2019 Company Meeting and the November 2019 Company Meeting and deliberately sent notices in respect of these meetings to email addresses at which they anticipated the Claimant would not or might not receive the same.(2) The Second and Third Defendants deliberately procured that the First Offer Letter was not sent to an address specified by the Claimant and/or was sent to addresses at which it would not or might not reach the Claimant.(3) The Second and Third Defendants contended that there had been a decision at the November 2019 Company Board Meeting to raise an additional £500,000 in capital when there had not been and sought to create and rely on minutes purporting to demonstrate the same. These particular contentions were however abandoned by Mr Macpherson in his closing submissions at the Trial.[149]The Claimant says that the conduct alleged in sub-paragraphs (1) and (2) above constituted a breach by the Second and Third Defendants of their duty, as directors of the Company, to act in the way in which they considered in good faith would most likely promote the success of the Company. The Claimant also says that the same duty was breached by the Second and Third Defendants by reason of their failure to prepare the financial statements/accounts of the Company, for the period of nine months to 31st December 2018 (“the 2018 Accounts”), in accordance with the requirements of the Act. The specific failures in relation to the 2018 Accounts are pleaded in paragraph 52 of the Amended Particulars of Claim.[150]The Claimant says, further or alternatively, that the alleged failure of the Second and Third Defendants to give the Claimant notice of the October 2019 Company Board Meeting and the November 2019 Company Board Meeting constituted, on the part of the Second and Third Defendants:(1) a breach of article 9(3) of the Company’s articles (“Article 9(3)”), and their duties as directors to act within their powers;(2) a breach of their duty, as directors of the Company, to avoid conflicts of interest;(3) a breach of their duty, as directors of the Company, to act with reasonable care.[151]The Claimant also says, further or alternatively and in relation to the Capital Raises, that the Second and Third Defendants failed to exercise their power to raise capital and to set the price at which the same should be raised in accordance with their duties as directors of the Company.[152]The duties which the Second and Third Defendants owed to the Company, as directors of the Company, are referred to in the Amended Particulars of Claim as “the Directors’ Duties”. I will adopt the same expression to refer collectively to these duties. The Directors’ Duties are identified in the Amended Particulars of Claim as the duties of the Second and Third Defendants arising under Chapter 2 of Part 10 of the Act, and are summarised in the following terms (I have added reference to the relevant Section of the Act in which the duty is to be found):(1) To act in accordance with the Company’s constitution and only to exercise powers for the purposes for which they were conferred – Section 171.(2) To act in the way in which he or she considered, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole including having regard (amongst other matters) to the need to act fairly between members of the Company – Section 172.(3) To exercise reasonable care, skill and diligence – Section 174.(4) To avoid conflicts of interest and duty – Section 175.[153]In relation to the alleged failure of the Second and Third Defendants to exercise their powers to raise capital and set the price at which the same should be raised in accordance with the Directors’ Duties, the Claimant makes the following allegations:(1) It is properly to be inferred that the Second and Third Defendants did not exercise their powers in relation to the allotment of shares and the setting of subscription prices for the primary or dominant purpose of raising necessary investment capital for the Company.(2) Rather, it is properly to be inferred that the Second and Third Defendants exercised their powers for the primary or dominant purpose of diluting the Claimant’s interest and/or altering the voting power in the Company and/or to serve the interests of the Fourth to Sixth Defendants as well as their own interests.(3) Further or alternatively, the Second and Third Defendants failed: (i) to set the subscription price and/or give proper consideration to the same in good faith and in the interests of all shareholders; and/or (ii) to seek to dispose of the Company’s shares at full value and/or at what they believed to be the best price obtainable and/or at the best price reasonably obtainable.(4) The Second and Third Defendants so failed to act, as set out in sub-paragraph (3) above, despite their appreciation, following the First Capital Raise, that not all shareholders would or might subscribe on subsequent capital raises.(5) The Second and Third Defendants thereby (i) failed to exercise their powers for the purposes for which they were conferred; and/or (ii) failed to act in the way in which they considered, in good faith, would be most likely to promote the success of the Company; and/or (iii) further breached their duties to avoid conflicts of interest; and/or (iv) breached their duty to act with reasonable care.(6) The Claimant makes extensive reference to alleged facts and matters pleaded earlier in the Amended Particulars of Claim as facts and matters from which the relevant knowledge, beliefs and intentions of the Second and Third Defendants can, so it is alleged, properly be inferred.[154]Turning to the pre-emption provisions in Sections 561 and 562, and further or alternatively to the claims summarised above, the Claimant makes the following claims:(1) The Company breached Section 561 in relation to the First Allotment by allotting shares without making an offer to the Claimant to allot to him on the same or more favourable terms a proportion of the shares which was, as nearly as practicable, equal to the proportion in nominal value held by him in the ordinary share capital.(2) Further or alternatively, in relation to the First Allotment, the Claimant says that the Company breached Section 562 by failing to communicate the First Offer Letter to the Claimant in accordance with the requirements of Section 562.(3) The Company breached Section 561 in relation to the Second Allotment by allotting shares without making an offer to the Claimant to allot to him on the same or more favourable terms a proportion of the shares which was, as nearly as practicable, equal to the proportion in nominal value held by him in the ordinary share capital.(4) The claim of an equivalent breach of Section 561 in relation to the Third Allotment was abandoned by Mr Macpherson in his closing submissions at the Trial.(5) The Claimant says that it is properly to be inferred that the Second and Third Defendants knowingly authorised or permitted the alleged contraventions of Sections 561 and 562, in relation to the First and Second Allotments.[155]The Claimant says that the Second and Third Defendants, in acting as they are alleged to have acted in relation to the Allotments, were proceeding in accordance with a scheme to dilute the Claimant’s interest in the Company; being a scheme which had been agreed between the Second and Third Defendants and the Fourth to Sixth Defendants. I will refer to this alleged scheme as “the Alleged Scheme”.[156]The Claimant also says that the knowledge and intentions of the Second and Third Defendants, as alleged, were also the knowledge and intentions of the Fourth to Sixth Defendants.[157]The Claimant also says that the conduct of the Second and Third Defendants, in relation to the matters specified in paragraph 97A of the Amended Particulars of Claim, reasonably caused the Claimant to lose confidence in the management of the Company. Paragraph 97A is in the following terms:
“Further or alternatively the conduct of the Second and Third Defendants in relation to the First Offer Letter, the Second Offer Letter, the 2018 Accounts, the 2019 Accounts, the Third Offer Letter and the Claimant’s attempts to resolve the issues caused thereby reasonably caused the Claimant to lose confidence in the management of the Company.”
[158]So far as unfair prejudice is concerned, the Claimant says, in paragraph 98 of the Amended Particulars of Claim, that the matters set out in the Section E of the Amended Particulars of Claim (paragraphs 88-97A) have constituted the conduct of the affairs of the Company by the Second and Third Defendants and the Fourth to Sixth Defendants in a manner unfairly prejudicial to the interests of the Claimant and that the acts of the Company have been so prejudicial, within the terms of Section 994. On this basis the Claimant seeks an appropriate remedy pursuant to the powers of the court under Section 996.[159]As can be seen, the grounds on which it is alleged that the affairs of the Company were conducted in a manner unfairly prejudicial to the interests of the Claimant, and that the acts of the Company have been so prejudicial to the Claimant, are comprised of the matters set out in paragraphs 88-97A of the Amended Particulars of Claim. These matters were helpfully divided into numbered grounds by Mr Riley and Mr McWilliams in their closing submissions. I did not understand this classification system, in itself, to be the subject of objection by Mr Macpherson in his oral closing submissions. In the Claimant’s Reply Submissions, Mr Macpherson replied to these grounds without suggesting that they misrepresented the grounds upon which the claim of unfairly prejudicial conduct is made. I will adopt the same system of classification. It is convenient at this stage to identify these grounds (“the Grounds”), notwithstanding some repetition of the summary of paragraphs 88-97A set out above. It is also important to keep in mind that each Ground is only a summary of the relevant matter or group of matters pleaded in paragraphs 88-97A and omits particulars of the relevant matter or group of matters, where particulars are pleaded:(1) Ground 1 - the Second and Third Defendants deliberately failed to give the Claimant notice of the October 2019 Company Board Meeting and the November 2019 Company Board Meeting and deliberately sent notices in respect of these meetings to email addresses at which they anticipated the Claimant would not or might not receive the same.(2) Ground 2 - the Second and Third Defendants deliberately procured that the First Offer Letter was not sent to an address specified by the Claimant and/or was sent to addresses at which it would not or might not reach the Claimant.(3) Ground 3 – As I have explained, this ground was abandoned in Mr Macpherson’s closing submissions. It is convenient to retain its numbering. The ground was that the Second and Third Defendants claimed there been a decision at the November 2019 Company Board Meeting to raise an additional £500,000 in capital, when in fact there had been no such decision, and that the minutes of that meeting had been falsified in an attempt to demonstrate that there had been such a decision.(4) Ground 4 - The Second and Third Defendants, in breach of their duties, as directors of the Company, failed to act in the way in which they considered, in good faith, would most likely promote the success of the Company in relation to (i) the giving of notice of the October and November 2019 Company Board Meetings, (ii) the sending of the First Offer Letter, and (iii) the 2018 Accounts.(5) Ground 5 - The alleged failure of the Second and Third Defendants to give the Claimant notice of the October 2019 Company Board Meeting and the November 2019 Company Board Meeting constituted (i) a breach of Article 9(3) and their duties as directors to act within their powers, (ii) a breach of their duty, as directors of the Company, to avoid conflicts of interest, and (iii) a breach of their duty, as directors of the Company, to act with reasonable care.(6) Ground 6 – In relation to the Capital Raises, the Second and Third Defendants failed to exercise their power to raise capital and to set the price at which the same should be raised in accordance with their duties as directors of the Company. There are extensive particulars of this allegation in paragraph 92 of the Amended Particulars of Claim, which I have set out above.(7) Ground 7 - The Company breached Section 561 in relation to the First and Second Allotments by allotting shares without making an offer to the Claimant to allot to him on the same or more favourable terms a proportion of the shares which was, as nearly as practicable, equal to the proportion in nominal value held by him in the ordinary share capital. As I have explained, the allegation that there was an equivalent breach in relation to the Third Allotment was abandoned by Mr Macpherson in closing submissions.(8) Ground 8 - In relation to the First Allotment the Company breached Section 562 by failing to communicate the First Offer Letter to the Claimant in accordance with the requirements of Section 562.(9) Ground 9 - the Second and Third Defendants knowingly authorised or permitted the alleged contraventions of Sections 561 and 562.(10) Ground 10 - the Second and Third Defendants, in acting as they are alleged to have acted in relation to the Allotments, were proceeding in accordance with a scheme to dilute the Claimant’s interest in the Company; being a scheme which had been agreed between the Second and Third Defendants and the Fourth to Sixth Defendants, and which I am referring to as the Alleged Scheme.(11) Ground 11 - The alleged conduct of the Second and Third Defendants in relation to the First Offer Letter, the Second Offer Letter, the 2018 Accounts, the 2019 Accounts, the Third Offer Letter and the Claimant’s attempts to resolve the issues caused thereby reasonably caused the Claimant to lose confidence in the management of the Company. The reference to the 2019 Accounts is a reference to the financial statements/accounts of the Company for the financial year ending 31st December 2019 (“the 2019 Accounts”).[160]It will be noted that the Grounds are directed to the conduct or alleged conduct of the Second and Third Defendants, as directors of the Company. The Fourth to Sixth Defendants are included as respondents to the Section 994 petition because they are said to have been complicit in the conduct or alleged conduct of the Second and Third Defendants which is said to have constituted the conduct of the Company’s affairs in a manner unfairly prejudicial to the interests of the Claimant as a member of the Company. The Fourth, Fifth and Sixth Defendants are alleged to have been complicit in the Alleged Scheme and it is alleged that the relevant knowledge and intentions of the Second and Third Defendants were the knowledge and intentions of the Fourth, Fifth and Sixth Defendants.[161]Turning to the relief sought, the following claims are made in the Amended Particulars of Claim, without election having been made between remedies.[162]The Claimant seeks an order that the Claimant be issued with shares, or that shares be transferred to him, and that the same be duly registered so that he is again the registered holder of 17% of the shares in the Company.[163]The Claimant seeks the payment of compensation, which is identified in the following terms in in paragraph 99.2 of the Amended Particulars of Claim:
“99.2 Compensation for all loss, damage, costs and expenses to be assessed including but not limited to: 99.2.1 If he is not reinstated with a 17% shareholding: 99.2.1.1 the difference between: (i) the increased value of the shareholding which he would have held; and (ii) the amount (at £1 per share) which he would have paid for the same; and/or 99.2.1.2 such compensation as shall reflect the loss and damage suffered as a result of the Claimant being left with a smaller shareholding, and dismissed as a director, with the balance of power in the Company also fundamentally altered; 99.2.2 the Claimant’s legal costs.” 99.2.1 If he is not reinstated with a 17% shareholding: 99.2.1.1 the difference between: (i) the increased value of the shareholding which he would have held; and (ii) the amount (at £1 per share) which he would have paid for the same; and/or 99.2.1.2 such compensation as shall reflect the loss and damage suffered as a result of the Claimant being left with a smaller shareholding, and dismissed as a director, with the balance of power in the Company also fundamentally altered; 99.2.2 the Claimant’s legal costs.”
[164]The Claimant seeks an order for rectification of the register of the members of the Company pursuant to Section 125 and payment of damages thereunder to be assessed (alternatively such relief pursuant to Section 996).[165]There are also claims for interest and such further or other relief as may be necessary or expedient in relation to the claims made by the Claimant.[166]In paragraph 100 of the Amended Particulars of Claim, the Claimant “confirms that he stands willing and able to pay for the shares to bring his shareholding back up to 17%”.[167]I will use the expression “the Pre-emption Rights Claim” to refer generally to the Claimant’s claim for relief on the basis of the alleged breaches of Sections 561 and 562. I will use the expression “the Section 994 Claim” to refer generally to the Claimant’s claim for an appropriate remedy, pursuant to Section 994, on the basis of the alleged unfair prejudice. I will refer to these claims collectively as “the Claims”.[168]While this is not identified as clearly as it might be in the claims for relief made in the Amended Particulars of Claim, it is important to be clear on the identity of the parties who are defendants to the Claims:(1) The Pre-Emption Rights Claim is made against the First, Second and Third Defendants. The Second and Third Defendants are included as defendants to the Pre-emption Rights Claim because the Claimant says that it is properly to be inferred that the Second and Third Defendants knowingly authorised or permitted the alleged breaches by the Company of Sections 561 and 562.(2) The Section 994 Claim is made against the Second to Sixth Defendants. As explained above, the Fourth, Fifth and Sixth Defendants are included as respondents to the Section 994 Claim because they are said to have been complicit in the conduct or alleged conduct of the Second and Third Defendants which is said to have constituted the conduct of the Company’s affairs in a manner unfairly prejudicial to the interests of the Claimant as a member of the Company. The Fourth, Fifth and Sixth Defendants are alleged to have been complicit in the Alleged Scheme and it is alleged that the relevant knowledge and intentions of the Second and Third Defendants were the knowledge and intentions of the Fourth, Fifth and Sixth Defendants.[169]There is one final, and important point to note, in relation to the Claimant’s case that the Second and Third Defendants deliberately failed to give the Claimant notice of the October 2019 Company Board Meeting and deliberately procured that the First Offer Letter was sent to an address at which it would not or might not reach the Claimant. In oral closing submissions Mr Macpherson revised the Claimant’s case in this respect, to a case that the Second and Third Defendants acted as they are alleged to have acted, in relation to the giving of notice of the October 2019 Company Board Meeting and in relation to the sending of the First Offer Letter to the Claimant, in the hope that the Claimant would receive neither the First Meeting Notice nor the First Offer Letter, and would thereby not subscribe to the First Capital Raise. This revision to the Claimant’s case is relevant both(i) to the Pre-Emption Rights Claim, so far as it is said that the Second and Third Defendants are liable for the Company’s alleged breaches of Sections 561 and 562 by virtue of having knowingly authorised or permitted the same, and(ii) to the Section 994 Claim, in particular in relation to Grounds 1, 2 and 9.

The Adjournment Application

[170]The pre-trial review in the Proceedings (“the PTR”) took place before me on 7th April 2025. At the PTR, the Claimant made an application to adjourn the Trial. The grounds on which this application (“the Adjournment Application”) was made were explained in a witness statement of Daniel Gleek of Jury O’Shea. Mr Gleek is a solicitor advocate who has day to day conduct of the Proceedings on behalf of the Claimant. This witness statement was dated 2nd April 2025. The grounds of the Adjournment Application were also set in a skeleton argument filed for the PTR by counsel then instructed to appear for the Claimant. In summary, there were three grounds upon which the adjournment was sought, as follows:(1) It was alleged that the Defendants had failed to provide disclosure and information relevant to the expert evidence in a timely manner.(2) The Claimant was heavily engaged in litigation in Kenya, which had become a drain on his financial and other resources.(3) The Claimant had been suffering from increasing cash-flow difficulties over recent months.[171]The Adjournment Application was presented on the basis that, if the Trial went ahead as listed, the Claimant would be unable to adduce the evidence of an expert witness in the field of accountancy and valuation, and would not be legally represented.[172]I refused the Adjournment Application, for the reasons set out in a judgment which I delivered at the PTR. In the event, the Claimant did not have expert evidence in accountancy and valuation to adduce at the Trial but did have legal representation. I do not know, and there is no need for me to know, the terms upon which this legal representation was arranged. What is relevant for present purposes is that it was apparent, from what was said in the course of the Trial, that Jury O’Shea were only able to carry out the preparation work for the Trial from some point in April 2025 after the PTR. It was also apparent that the Claimant’s counsel team for the Trial were only instructed relatively late in the day. The precise date of this instruction is not important, but I believe that it was 17th April 2025.[173]I mention the Adjournment Application and the position in terms of the instruction of the Claimant’s legal team for two reasons. First, what was said on behalf of the Claimant in support of the Adjournment Application featured in the submissions of the Second to Sixth Defendants on one of the issues I have to decide. Second, what I understand to have been the limited preparation time available to the Claimant’s legal team had certain consequences in relation to parts of the Claimant’s case. I will identify those consequences later in this judgment. In saying this, I cannot stress too highly that I am not suggesting that there were any deficiencies in the work done by the Claimant’s legal team in preparation for the Trial. It was readily apparent at the Trial that the Claimant’s legal team had done a great deal of work, in a limited period of time, in order to prepare for the Trial. My reference is to what appears to have been the limited preparation time available to the Claimant’s legal team, and to certain consequences which this limited preparation time appeared to have had, in relation to the Claimant’s preparation and presentation of certain parts of his case.

The Amendment Applications and the Strike Out Application

[174]By an application notice dated 1st May 2025, that is to say the day before the Trial commenced in court, the Claimant made a series of applications which occupied the first day of the Trial (2nd May 2025). For present purposes it is only necessary to make specific reference to two of these applications. The first application (“the First Amendment Application”) was an application for permission to make various amendments to the Claimant’s Particulars of Claim. These Particulars of Claim were dated 27th October 2022, and were directed to stand as the Claimant’s Particulars of Claim in the Proceedings (the consolidated proceedings) by the order of ICC Judge Prentis made on 25th November 2022. The second application was an associated application for permission to adduce a third witness statement of the Claimant, dated 1st May 2025.[175]Some of the amendments for which permission was sought by the First Amendment Application were not opposed. The remaining amendments were opposed. The remaining amendments fell into two parts. First, the Claimant sought to add particulars of the Alleged Scheme and to add the loss of confidence claim which is now in Paragraph 97A of the Amended Particulars of Claim. Second, the Claimant sought to introduce the following paragraphs 98A and 98B into the Particulars of Claim:
“98A. The Claimant sustained and incurred loss, damage, costs, and expenses by reason of the contravention of sections 561 and 562 of the Act by the Company in relation to the First Offer Letter and/or the Second Offer Letter and/or the Third Offer Letter. PARTICULARS (1) Had the Company complied with sections 561 and 562 of the Act in respect of the First Offer Letter, the Claimant would have subscribed to the 85,000 shares and any supplementary shares offered therein. Had he done so, the Claimant would have subscribed to a proportionate number of shares and any supplementary shares that should have been offered in the Second Offer Letter and/or the Third Offer Letter. (2) Further or alternatively, had the Company complied with sections 561 in respect of the Second Offer Letter and/or Third Offer Letter, as contended at paragraphs 63, 84, and 93 above, the Claimant would have subscribed to shares that resulted in him remaining a 17% shareholder plus any supplementary shares offered therein. (3) In the premises, the Claimant has suffered loss and damage equivalent to the present value of 17% of the Company, less the cost of subscription for the relevant shares. (4) The Claimant has also incurred administrative, accountancy, travel, and legal expenses and costs by reason of the Company’s contravention to be assessed. 98B. Paragraph 95 is repeated. In the premises, the Second and Third Claimants are jointly and severally liable for the compensation payable by the Company.”
[176]As can be seen, paragraph 98A, on which paragraph 98B was parasitic, sought to introduce the pleading of a causation case (“the Causation Case”). The application to adduce the third witness statement of the Claimant was an associated application because it contained evidence which was said to support the Causation Case.[177]For the reasons which I set out in a judgment delivered at the conclusion of the first day of the Trial (“the First Amendment Judgment”), I granted permission for the amendments which were not opposed, and for some of the amendments which were opposed. I refused permission for the amendments contained in paragraphs 98A and 98B; that is to say I refused permission for the Causation Case to be pleaded. In the light of that refusal Mr Macpherson did not pursue the application to adduce the third witness statement of the Claimant.[178]On the second day of the Trial (6th May 2025) Mr Head sought to pursue an application to strike out the claim against the Company; that is to say the Pre-Emption Rights Claim (“the Strike Out Application”). Mr Head’s case was that, in the light of my refusal of permission for the Causation Case, there was no pleaded case in causation against the Company, with the consequence that the Pre-Emption Rights Claim must fail. In theory, it was open to the Second and Third Defendants to make the same application, given that the Pre-emption Rights Claim is also made against them. As Mr Riley explained to me however, the Second to Sixth Defendants had to deal with the Section 994 Claim, in respect of which the absence of the Causation Case, even on Mr Head’s argument, was not necessarily decisive. In these circumstances, and while supporting the Strike Out Application, it was not considered by the Second to Sixth Defendants that they should make their own application to strike out.[179]For the reasons which I set out in a short judgment delivered on the second day of the Trial, I declined to deal with the Strike Out Application there and then, not least because no formal application notice had then been issued. Instead, I deferred consideration of the Strike Out Application until the closing submissions. In the event the Company issued an application notice on 9th June 2025, and I heard the arguments in relation to the Strike Out Application as part of the closing submissions. Given the overlap between the arguments on the Strike Out Application and the arguments on causation in the closing submissions, I reserved my decision on the Strike Out Application to this judgment.[180]In the meantime, and prior to the closing submissions, the Claimant made a second attempt to introduce the pleading of a causation case. The timetabling of this second attempt was as follows. The Trial was supposed to conclude on 19th May 2025. Various disruptions to the timetable meant that the main part of the Trial ran to 22nd May 2025, without the evidence having been completed or the closing submissions heard. Very sadly, the Fifth Defendant (Mr Grand) suffered a bereavement in the course of the Trial, which prevented him giving evidence at the intended time in the Trial. The evidence of the Fifth Defendant was therefore heard separately on 11th July 2025. The oral closing submissions were listed for hearing on 24th and 25th July 2025. Shortly before these dates, on 18th July 2025, the Claimant issued an application for permission to re-amend the Amended Particulars of Claim in order to plead the following causation case:
“98A.The Claimant sustained and incurred loss, damage, costs, and expenses by reason of the contravention of sections 561 and 562 of the Act by the Company in relation to the First Offer Letter and/or the Second Offer Letter and/or the Third Offer Letter. PARTICULARS (1) Had the Company complied with sections 561 and 562 of the Act in respect of the First Offer Letter, the Claimant would have subscribed to the 85,000 shares offered and a proportionate number of shares that should have been offered in the Second Offer Letter and/or the Third Offer Letter. (2) In the premises, the Claimant has suffered loss and damage equivalent to the present value of 17% of the Company, less the cost of subscription for the relevant shares. (3) The Claimant has also incurred administrative, accountancy, travel, and legal expenses and costs by reason of the Company’s contravention to be assessed. 98B. Paragraph 95 is repeated. In the premises, the Second and Third Claimants are jointly and severally liable for the compensation payable by the Company.”
[181]This second application to amend (“the Second Amendment Application”) was opposed by the Defendants. The argument in relation to the Second Amendment Application occupied the morning of 24th July 2025. For the reasons which I set out in a judgment which I delivered at the conclusion of the argument (“the Second Amendment Judgment”), I refused permission for the causation case to be pleaded. One of the matters which I decided in the Second Amendment Application was that the causation case which the Claimant sought to plead by the Second Amendment Application was in materially similar terms to the Causation Case which was the subject of the First Amendment Application. Indeed, my first reason for refusing the Second Amendment Application was that it was the same application as the First Amendment Application, so far as the Causation Case was concerned. In these circumstances I will use the expression the Causation Case to refer both to the causation case sought to be introduced by the First Amendment Application and to the causation case sought to be introduced by the Second Amendment Application.[182]I refer to the Amendment Applications and the Strike Out Application in this judgment for three reasons. First, so far as issues of causation arise in relation to the Claims, it is relevant that the Claimant’s two attempts to plead the Causation Case were unsuccessful. Second, and as I was at pains to make clear in the Amendment Judgments, my refusal of permission to plead the Causation Case left the Claimant in the following position; namely that the Claimant would have to prove whatever case in causation he needed to prove, for the purposes of the Pre-emption Rights Claim and the Section 994 Claim, by reference to his pleaded case and on the basis of the evidence adduced at the Trial. Third, and turning to the Strike Out Application, I have to deal with the Strike Out Application in this judgment.

The issues

[183]The list of issues which was produced for the Trial turned out, as the Trial progressed, to be inadequate to encompass the factual and legal issues which emerged from the evidence and the submissions of the parties. In those circumstances I asked the parties to produce, following the conclusion of the Trial, an updated list of issues or, if this could not be agreed, rival lists of issues. The parties were unable to agree a single list of issues. What I received instead was a list of issues from the Second to Sixth Defendants, which was agreed by the Company. I received from the Claimant a heavily revised version of the list of issues produced by the Second to Sixth Defendants.[184]Both lists of issues are lengthy. I have had regard to both lists of issues in this judgment, in order to ensure that I decide all the issues which require to be decided, but I am bound to say that I did not find either version of the list of issues particularly helpful. Both versions seemed to me to confuse and obscure the issues which I need to decide, in order to decide the Claims. In any event, I do not need to repeat the contents of the rival lists of issues in this judgment. At the very high level, the issues which I have to decide in the Claims are as follows: The Pre-emption Rights Claim(1) Was the Company in breach of Section 561 and/or Section 562 in relation to the First Allotment (“the First Breach Issue”)?(2) There was an issue as to whether the Company was in breach of Section 561 in relation to Second Allotment (“the Second Breach Issue”). In closing submissions the Defendants conceded that there was a breach of Section 561 in relation to the Second Allotment.(3) If, and to the extent that the Company was in breach of Section 561 and/or Section 562, did the Second Defendant and/or the Third Defendant knowingly authorise or permit such breach or breaches (“the Joint Liability Issue”)?(4) If, and to the extent that the Company was in breach of Section 561 and/or Section 562, does the pleaded case of the Claimant permit the making of a claim for compensation pursuant to Section 563 (“the Pleading Issue”)?(5) If, and to the extent that the Company was in breach of Section 561 and/or Section 562, and if the pleaded case of the Claimant permits the making of a claim for compensation pursuant to Section 563, would the Claimant have been willing and able to subscribe in response to the First Capital Raise and/or the Second Capital Raise if the breach or breaches had not occurred (“the Causation Issue”)?(6) If, and to the extent that the Company was in breach of Section 561 and/or Section 562, and if the pleaded case of the Claimant permits the making of a claim for compensation pursuant to Section 563, and if the Claimant can prove that he would have been willing and able to subscribe in response to the First Capital Raise and/or the Second Capital Raise if the breach or breaches had not occurred, was the Claimant’s own conduct the cause of any loss, damage, costs or expenses which he may have incurred and/or did the Claimant fail to mitigate such loss, damage, costs or expenses (“the Mitigation Issue”)?(7) If, and to the extent that the Company was in breach of Section 561 and/or Section 562, and if the pleaded case of the Claimant permits the making of a claim for compensation pursuant to Section 563, and if the Claimant can prove that he would have been willing and able to subscribe in response to the First Capital Raise and/or the Second Capital Raise if the breach or breaches had not occurred, and if the Claimant’s own conduct was not itself the cause of any loss, damage, costs or expenses which he may have incurred and if there was no failure on the part of the Claimant to mitigate such loss, damage, costs or expenses, what compensation is recoverable by the Claimant (“the Compensation Issue”)?(8) The Strike Out Application. The Section 994 Claim(9) Have the Grounds or any of them been established?(10) Have the affairs of the Company been conducted in a manner which was unfairly prejudicial to the interests of the Claimant?(11) If so, what, if any, remedy should be granted to the Claimant?

The Claimant’s evidence – the witnesses of fact

[185]In terms of the factual evidence, and in addition to the documentary evidence in the trial bundles, I heard oral evidence from a number of witnesses, called respectively by the Claimant and the Second to Sixth Defendants, all of whom were cross examined. I set out, as briefly as possible, my overall assessment of the evidence of each of these witnesses, starting with the Claimant’s evidence. Most of the witnesses were subject to lengthy cross examination, which is a tiring and stressful process for any witness. I have made full allowance for this in my assessment of these witnesses.[186]The principal witness on the Claimant’s side was the Claimant himself, Mr Ndungu. The Claimant is a Kenyan businessman, and is qualified as an accountant in Kenya, which I understand to carry with it qualification as a company secretary. The Claimant’s evidence, which I accept, is that he has been a significant investor in numerous companies, including Kenya Airways. It was apparent from the Claimant’s evidence that he has considerable experience and expertise in business and investing.[187]In terms of my overall impression of the Claimant as a witness, my impression was a mixed one. The Claimant’s cross examination commenced late on the second day of the trial and occupied the third day and part of the fourth day of the Trial. The Claimant was therefore cross examined for a lengthy period of time. In addition to this, on his own evidence the Claimant has the misfortune to be involved in a substantial quantity of litigation, principally in Kenya. The stress of this litigation had, as was clear and as one would expect, imposed considerable strain on the Claimant. Nevertheless, the Claimant remained generally calm, measured and articulate throughout his evidence. His experience and expertise showed through in his answers in cross examination, and lent his evidence some authority. For the most part, I consider that the Claimant was honest, if sometimes mistaken, in his evidence.[188]As against this, there are three related points to be made.[189]First, the Claimant clearly regarded his cross examination as his opportunity both to get across to the court the points he wanted to make in support of his case and, when asked a factual question, to give reasons for his answer to the factual question rather than actually answering the question. In the latter case it was clear that the Claimant was giving reasons for his answer, as opposed to actually answering the question, because he perceived that those answers were or might be unhelpful to his case. These features of the Claimant’s evidence had three consequences. First, it meant that significant parts of the Claimant’s evidence took much longer than they should have done, as a result of the Claimant using many of the questions as a platform for what he wanted to say, as opposed to answering what was usually a fairly simple factual question. Second, it meant that I was sometimes required to intervene, in order to require the Claimant to focus on the question he was being asked. Third, it meant that the Claimant gave evidence, on a number of occasions, where he made allegations and accusations of misconduct against third parties and/or referred to events (often in Kenya) which were not verifiable from the documents, were not part of his pleaded case and, save where those third parties were witnesses in this trial, were not allegations which had been or could be put to the relevant third parties.[190]Second, there were parts of the Claimant’s evidence where, it was clear to me, the Claimant had either persuaded himself that events had occurred or situations had existed which now support his case, or was speculating on such matters. It was clear from the Claimant’s evidence that he regarded and regards himself as the victim of a conspiracy against him orchestrated by the Second to Fifth Defendants, his former colleagues in the Business. This clearly coloured the Claimant’s evidence and, in my judgment, resulted in the Claimant persuading himself that events had occurred and situations had existed which supported his case, but were not borne out by other evidence. This is a phenomenon which is often encountered in the evidence of parties involved in hard-fought litigation of this kind, and was manifested, to a degree, in the Claimant’s evidence at the Trial.[191]A good example of this was the Claimant’s evidence in cross examination, when asked about the minutes of the first three Pevans Meetings, which the Claimant attended. The reports made to those meetings in relation to the financial position of the various parts of the Business, as recorded in the minutes, were put to the Claimant. The Claimant tried to argue that the financial position had not been as serious as reported to the meetings. I found this part of the Claimant’s evidence to be unsatisfactory. The Claimant’s answers to questions in cross examination on these meetings were rambling and discursive, and singularly failed either to explain why the reports made to the meetings were wrong or why the Claimant apparently sat quiet and made no challenge to these reports when they were made. My impression was that the Claimant was trying to find reasons to dispute evidence which he perceived to be unhelpful to his case.[192]Third, the Claimant was, in my judgment, less than honest and straightforward with the court in his evidence relating to his financial position. I will come back to this feature of the Claimant’s evidence later, in the relevant section of this judgment.[193]In summary, and although, as I have said, I considered that the Claimant was, for the most part, honest in his evidence, his practice of making allegations and accusations of the kind I have mentioned did have a detrimental effect on the credibility of substantial parts of the Claimant’s evidence. Equally my perception that he had persuaded himself that events had occurred and situations had existed in a manner which now supports his case, or was speculating to that effect, had the same detrimental effect on the credibility of substantial parts of the Claimant’s evidence. I therefore approach with caution the allegations and accusations made by the Claimant against third parties, save where they can be verified independently. I adopt the same approach in relation to events and matters referred to by the Claimant which cannot be verified independently and/or which appear to be inconsistent with the contemporaneous documents. I will also, as I have said, come back to that area of the Claimant’s evidence where I consider that he was less than honest.[194]The Claimant called one other witness, Ms Asenath Wachera, whom I have already mentioned as a shareholder in the Company. In her witness statement Ms Wachera gave her full name as Asenath Wachera Maina, but she kindly confirmed to me that she should be referred to as Ms Wachera. I have already made reference to Ms Wachera in this judgment, as a shareholder in the Company who, in common with the Claimant, has seen what was her 21% shareholding in the Company substantially diluted by the Allotments.[195]Ms Wachera had a reasonably good recollection of the events about which she was asked. She came across as experienced and competent in business, and her evidence was generally helpful. What also came across very clearly in cross examination was Ms Wachera’s belief, in common with the Claimant, that the Business had been mismanaged and, in particular, that money earned by Pevans in Kenya, which in her view should have come to the shareholders by way of dividend income, had been taken out of Kenya, and squandered on expensive and extravagant projects elsewhere. Ms Wachera mentioned, in particular, sponsorships of football clubs and Formula One racing. Ms Wachera’s desire to communicate this complaint to the court did, on occasions albeit to a lesser extent than the Claimant, colour her evidence and result in her using Mr Riley’s questions as a platform for articulating her complaint, as opposed to answering the question. This also resulted in Ms Wachera coming across as evasive in some of her answers, particularly when asked questions about the financial position of the Company in the latter half of 2019. Subject to these qualifications, I am satisfied that Ms Wachera was honest in her evidence which, as I have said, was generally helpful.

The Second to Sixth Defendants’ evidence – the witnesses of fact

[196]The Company did not call any witnesses. In terms of the witnesses of fact, the Second to Sixth Defendants adduced evidence from three witnesses, in addition to the evidence of the Second, Third, Fourth and Fifth Defendants. I set out, again as briefly as possible, my overall assessment of the evidence of each of these witnesses, taking them in the order in which they were called.[197]The first and, at least in terms of time spent giving evidence, principal witness for the Second to Sixth Defendants was the Third Defendant, Mrs Karadzhova. The Third Defendant was subjected to a lengthy cross examination, which lasted two and a half days.[198]In her evidence the Third Defendant came across as someone with considerable experience and expertise in business and business finance. Prior to her employment in 2015 by SP Services, as Group Financial Officer, the Third Defendant had worked for over ten years as a financial planning analyst with one of the largest bakery production groups in Bulgaria and Eastern Europe. The Third Defendant was focussed and precise in answering questions in cross examination, and some parts of her evidence were helpful. As however the cross examination progressed, the Third Defendant ran into difficulties with certain parts of her evidence and was clearly uncomfortable in answering some of the questions put to her, either because her answers were not consistent with the relevant documents, or because there were no documents to support her evidence, and/or because her answers did not appear credible. On these occasions the Third Defendant tended to default to a position of saying that she had no recollection of the matter, or simply denied what was being put to her, even where it was apparent that what was being put to her could not really be denied. On a few occasions the Third Defendant gave an answer which was not credible, which was contradicted by the documents and which, I am bound to say, sounded as though it had been made up on the spot.[199]I will need to return to the evidence of the Third Defendant in more detail later in this judgment. For present purposes I should give some brief examples of what I have referred to in my previous paragraph:(1) In her first witness statement the Third Defendant gave evidence, along with other witnesses for the Second to Sixth Defendants, that the Claimant’s conduct changed in the course of 2018, including alleged failures to attend board meetings. In cross examination it was pointed out to the Third Defendant that, between a board meeting of the Company on 3rd July 2018, which the Claimant did attend and in respect of which no complaint was made about the Claimant’s behaviour, and the October 2019 Company Board Meeting, which the Claimant did not attend for reasons which are in dispute, there were no board meetings of the Company. The Third Defendant sought to deal with this difficulty by claiming to have no recollection that there had been no board meetings of the Company in this period, and by suggesting that her reference to non-attendance included non-attendance at board meetings of the companies in the Isle of Man Group. My impression was that the Third Defendant was claiming no recollection because she appreciated that her evidence of a change of conduct on the part of the Claimant had run into difficulty. So far as the Isle of Man Group was concerned, the record of attendance by company directors, as put to the Third Defendant in cross examination, simply did not support the allegation of a change in the Claimant’s conduct. My impression was that the Third Defendant had resorted to reference to the Isle of Man Group in an attempt to support the allegation of a change of conduct, which she was otherwise unable to sustain.(2) The Third Defendant gave evidence that the IT Strategy had been discussed and agreed upon at the March 2019 AGM. In cross examination various matters were put to the Third Defendant which contradicted her evidence in this respect and cast a major question mark over whether the IT Strategy actually existed. The Third Defendant had no satisfactory explanation of the matters put to her in this respect, and her discomfort was palpable.(3) I have referred earlier in this judgment to the disciplinary hearing which was held, on 7th December 2020, for the expressed purpose of considering whether the Claimant should be removed from his purported employment by the Company. In her letter notifying the Claimant of the disciplinary hearing and the allegations made against him, dated 1st December 2020, the Third Defendant stated that witness statements would be provided to the Claimant prior to the disciplinary hearing, setting out in detail the allegations that the Claimant had attended meetings of various group companies whilst intoxicated. No such witness statements were produced at the Trial, and it was put to the Third Defendant, in cross examination, that no witness statements had been provided to the Claimant in advance of the disciplinary hearing, and that the witness statements did not in fact exist. The Third Defendant continued to assert that the witness statements did exist, but said that she could not recall whether the witness statements had been sent to the Claimant in advance of the disciplinary hearing. Neither answer was convincing. Nor was the Third Defendant able to provide any particulars of the allegations made against the Claimant in her letter of 1st December 2020. My impression was that the Third Defendant was seeking to hold the line, for herself and her co-Defendants, in response to questions to which she did not have a satisfactory answer.[200]In making my assessment of the Third Defendant’s evidence I have, as I have said, made full allowance for the fact that the Third Defendant was subject to a very lengthy cross examination, which was also significantly longer than the cross examination of any other witness. The Third Defendant clearly found the cross examination stressful at times and, particularly towards the end of the cross examination, was showing signs of understandable fatigue. I also take into account that, although the Third Defendant is clearly completely fluent in English, she did point out in cross examination that English is not her first language. Nevertheless, my overall impression was that the Third Defendant was attempting, in parts of her evidence, to maintain positions which supported her case and that of her co-Defendants, but which she appreciated were not, or were not easily, sustainable. I therefore approach her evidence with some caution, in particular where it is not supported by contemporaneous documents, or is not consistent with the contemporaneous documents.[201]The second witness called by the Second to Sixth Defendants was the Fourth Defendant, Mr Nikolov, one of the founders of the Business and a major shareholder in the Company. The Fourth Defendant was a confident and ebullient witness, who came across as an astute and experienced businessman. The Fourth Defendant did however, on a couple of occasions, get into difficulties when confronted with documents which were inconsistent with his evidence, or when giving evidence which was not supported by any documents. On these occasions the Fourth Defendant sometimes became evasive, and sometimes resorted to what sounded like bluster, with the consequence that his evidence became difficult to follow.[202]An example of this was the Fourth Defendant’s claim, in cross examination, that he had had a conversation with the Claimant in response to the Claimant’s email of 12th November 2019, in which the Claimant set out his complaint of a fraudulent attempt to deprive him of his shareholding in the Company. The Fourth Defendant gave evidence, in his first witness statement, that he had earlier had a conversation with the Claimant in which the Claimant had said that he had no intention of contributing further money to the Company. Given the position adopted by the Claimant in his email of 12th November 2019, whose addressees included the Fourth Defendant, the Fourth Defendant was challenged in cross examination as to why he had not pointed out to the Claimant that his position was inconsistent with his earlier conversation with the Fourth Defendant, where the Claimant had allegedly said that he had no intention of contributing any further money. The Fourth Defendant sought to suggest, in somewhat vague terms, that he had had a conversation with the Claimant, following the email of 12th November 2019, and had challenged the Claimant on what he had said in the email. I found this evidence unconvincing. My impression was that the Fourth Defendant had perceived a difficulty with his evidence, and was speculating on whether he had had the alleged conversation with the Claimant, at some point after 12th November 2019, in order to escape from this difficulty.[203]In all the circumstances I also approach the Fourth Defendant’s evidence with some caution, in particular where it is not supported by, or is inconsistent with, the contemporaneous documents.[204]The third witness called by the Second to Sixth Defendants was Mr Macharia, previously mentioned in this judgment as the head of the global legal department of the Business, and company secretary and a director of Pevans. Mr Macharia was involved in setting up Pevans. Mr Macharia is also a minor shareholder in the Company. Mr Macharia has been admitted to the Bar as an Advocate of the High Court of Kenya, and is also qualified as a Commissioner for Oaths, a Notary Public and a Certified Public Secretary. Mr Macharia is an experienced lawyer, having been in practice for some 25 years. Mr Macharia’s cross examination was fairly lengthy, occupying most of a day of the Trial. I found that certain parts of Mr Macharia’s evidence required careful analysis, to which I will return later in this judgment. In overall terms however I was satisfied that Mr Macharia was an honest witness who gave his evidence consistent with his recollection of the events about which he was asked.[205]The fourth witness called by the Second to Sixth Defendants was the Second Defendant, Mr Bozoukov, a director of the Company and a minor shareholder in the Company. In some respects the Second Defendant was an impressive witness. Much of his evidence in cross examination was precise, clear and professional. By reference to this evidence, the Second Defendant came across as an experienced and diligent company director and business person, who gave helpful evidence. As with the Third Defendant however, his co-director of the Company, the Second Defendant ran into difficulties with certain parts of his evidence, and for the same reasons; that is to say where his evidence was inconsistent with the relevant documents or was not supported by any documents and/or where his evidence did not appear credible. Where the Second Defendant ran into these difficulties, his answers became less clear, and sometimes evasive. The Second Defendant also sometimes resorted, in the relevant parts of his evidence, to saying that he could not recall the relevant matter or providing an answer which appeared to be speculative.[206]The examples which I give, to illustrate my impressions of the Second Defendant, overlap with those which I have provided in the case of the evidence of the Third Defendant:(1) In relation to the alleged change in the conduct of the Claimant, in the course of 2018, the Second Defendant also resorted to seeking to rely upon board meetings of companies in the Isle of Man Group, as evidence of the Claimant’s alleged change of conduct. As with the Third Defendant, the relevant company records did not support the allegation of a change of conduct and, as with the Third Defendant, my impression was that the Second Defendant had resorted to reference to companies within the Isle of Man Group in an attempt to support the allegation of a change of conduct, which he was otherwise unable to sustain.(2) It was also notable that, in his first witness statement, the Second Defendant’s evidence was that the Claimant had not been “involved” in the day to day operational matters of the Company. In cross examination the Second Defendant sought to convert this to an allegation that the Claimant had not been “interested” in the day to day operational matters of the Company. The Second Defendant said this in the course of a passage of his cross examination where he was claiming that the Claimant had been employed full time by the Company. My impression was that the Second Defendant changed his evidence from lack of involvement to lack of interest because he perceived the inconsistency between his evidence of lack of involvement on the part of the Claimant and his claim that the Claimant had been employed full time by the Company.(3) In relation to the IT Strategy the Second Defendant’s evidence on what he was claiming had been presented and agreed at the March 2019 Company AGM changed materially, between the Second Defendant’s first witness statement and his evidence in cross examination, and became steadily less clear.(4) In relation to the disciplinary hearing, and in common with the Third Defendant, the Second Defendant was unable to give any particulars of the allegations set out in the Third Defendant’s letter of 1st December 2020.[207]My overall impression of the Second Defendant, as with the Third Defendant, was that he was attempting, in parts of his evidence, to maintain positions which supported his case and that of his co-Defendants, but which he appreciated were not, or were not easily, sustainable. I approach the Second Defendant’s evidence with similar caution to that which I exercise in the case of the evidence of the Third Defendant and the Fourth Defendant, in particular where the Second Defendant’s evidence is not supported by contemporaneous documents, or is not consistent with the contemporaneous documents.[208]The fifth witness called by the Second to Sixth Defendants was Ronald Karauri, who has also been mentioned earlier in this judgment. I will continue to refer to Ronald Karauri as Mr Karauri, but he also has the title of Captain Karauri; having been, formerly, an airline pilot and, from January 2009, an airline captain with Kenya Airways. In January 2015, Mr Karauri left Kenya Airways to join Pevans as Chief Executive Officer. Mr Karauri remains in this role. He also has a 10% shareholding in the Company. In addition to his role as CEO of Pevans, Mr Karauri has been a Member of the National Assembly of Kenya since August 2022. Mr Karauri’s cross examination was relatively short, which reflected the fact that he had less relevant evidence to give than the other witnesses. His credibility was also not subject to the same degree of challenge as other witnesses. In terms of my general impression, I found Mr Karauri to be a helpful witness. His answers in cross examination were clear and precise. Subject to the question of whether his recollection of particular events was reliable, which I will need to come back to, as necessary, later in this judgment, I am satisfied that Mr Karauri was an honest witness.[209]The sixth witness, and final witness in terms of those called to give oral evidence, was the Fifth Defendant, Mr Grand, one of the founders of the Business and a major shareholder in the Company. As I have explained, the Fifth Defendant’s evidence had to be given separately to the main part of the Trial as a result, very sadly, of the Fifth Defendant suffering a bereavement. In assessing the evidence of the Fifth Defendant, I have made full allowance for the fact that, in addition to the strain of fairly lengthy cross examination (a consideration which also applied to other witnesses), the Fifth Defendant had the added stress of his bereavement. In the event, however, I found the Fifth Defendant to be generally helpful and straightforward in his answers in cross examination.[210]The qualification to this is that the Fifth Defendant’s evidence ran into difficulties in much the same areas as his co-Defendants. The difference, in the case of the Fifth Defendant, was that he did not seek to evade whatever it was that undermined his own evidence, but rather acknowledged the problem, while maintaining his own evidence. I also formed the impression that the Fifth Defendant was less careful in his evidence than his co-Defendants, with the consequence that some of his difficulties may have been the result of carelessness. I give the following brief examples of areas where the Fifth Defendant’s evidence ran into difficulties:(1) The Fifth Defendant gave fairly specific evidence, in his first witness statement, of alleged misconduct by the Claimant at board meetings of companies in the Isle of Man Group, which were chaired by Adam Beighton. Mr Beighton was described in the trial documents as General Manager of the Isle of Man Group. My understanding is that Mr Beighton was actually employed by Equiom (Isle of Man) Limited (“Equiom”), a professional services company in the Isle of Man, acting as a professional director and trustee. In this capacity Mr Beighton was a director of SP Holdings, the Isle of Man Group holding company. In cross examination the Fifth Defendant was taken to the records of board meetings of SP Services. It was conceded by the Fifth Defendant that all of the companies in the Isle of Man Group had their board meetings at the same time, so that the relevant records could be treated as records of the board meetings of all the companies in the Isle of Man Group. By reference to these records, the Fifth Defendant was obliged to concede that, at no time between 16th June 2015 and 23rd August 2019, did he and the Claimant attend the same meeting of these companies. The Fifth Defendant maintained his evidence of alleged misconduct on the part of the Claimant, but the inconsistency with the relevant records was clearly apparent.(2) The Fifth Defendant’s evidence about the IT Strategy became less clear, and more confusing, with his answer to each question in cross examination. The Fifth Defendant ended up contradicting himself; claiming in his first witness statement that the IT Strategy had been discussed, then claiming in cross examination that the IT Strategy had been announced only, and then claiming, when I sought to clarify the Fifth Defendant’s evidence, that the IT Strategy had been announced and discussed, although the Fifth Defendant could recall none of the alleged discussion.(3) The Fifth Defendant claimed in his first witness statement that he recalled that the Claimant had been given another opportunity to invest in the Company in October 2020. The Fifth Defendant confirmed in cross examination that this was a reference to the October 2020 Email, and that he had received this email. It was pointed out to the Fifth Defendant that it had been admitted on the first day of the Trial that the October 2020 Email was a draft which was never sent. This made it difficult to understand how the Fifth Defendant could have received the October 2020 Email. The Fifth Defendant had no answer to this point, but stoutly maintained that he had received the October 2020 Email.[211]In overall terms, and despite the more straightforward manner in which the Fifth Defendant gave his evidence, I consider that I should exercise similar caution to that which I exercise in the case of the evidence of the Second, Third and Fourth Defendants, in particular where the Fifth Defendant’s evidence is not supported by contemporaneous documents, or is not consistent with the contemporaneous documents.[212]The final witness for the Second to Sixth Defendants was Mr Newcombe-Jones, also mentioned earlier in this judgment as an IT Infrastructure Manager at Sportsoft. By way of reminder, Sportsoft is a wholly owned subsidiary of the Company within the SPG Group. Sportsoft provides software services to the Business and, in particular and as I have previously mentioned, has licensed the gaming software and Sportpesa brand to Pevans. Mr Newcombe-Jones’ main responsibilities are to ensure that the IT infrastructure of the Business is online and available and to ensure that all cloud services function properly in the UK and in the Isle of Man. There was no challenge to the evidence of Mr Newcombe-Jones in his witness statement. In those circumstances it was not necessary to call Mr Newcombe-Jones and his witness statement was admitted into the evidence as it stood.

The Second to Sixth Defendants’ evidence – the expert evidence

[213]So far as expert evidence was concerned, permission was granted to the Claimant and the Second to Sixth Defendants to adduce the expert evidence of one expert each in the fields of accountancy and valuation and information technology. The Claimant did not adduce any expert evidence. The Second to Sixth Defendants adduced the expert evidence of Mr Weaver, in the field of accountancy and valuation, and Mr Beckett, in the field of information technology.[214]Mr Weaver and Mr Beckett each provided an expert report. In terms of written evidence Jury O’Shea (the Claimant’s solicitors) also put certain questions to Mr Weaver on his report, by a letter dated 25th April 2025, pursuant to CPR 35.6. Mr Weaver responded by a letter dated 7th May 2025. Jury O’Shea then raised further questions by a letter to Mr Weaver dated 1st May 2025. Mr Weaver responded by a further letter dated 7th May 2025.[215]I set out briefly my overall assessment of each of these expert witnesses.[216]Mr Weaver is a chartered accountant, with over 30 years of valuation and advisory experience. He is the managing director in the valuations advisory services practice at Kroll Advisory Limited. By reference to his expert report, his area of expertise is in the valuation of all types of financial assets, including businesses, shares, complex financial instruments, and intangible assets for a variety of reasons, including mergers & acquisitions, restructuring, litigation, arbitration, business strategy, tax and financial reporting.[217]Mr Weaver was instructed to consider the financial position of the Company during the period from July 2019, to provide valuations of the Company’s shares as at 16th October 2019, 4th November 2019 and December 2021. Mr Weaver was also instructed to consider whether the rationale given for the Capital Raises was true. Mr Weaver was also instructed to identify what monies were received from the First Capital Raise and the Second Capital Raise, when such monies were received, and to what use they were put. Finally, Mr Weaver was instructed to consider what the difference is between the value of the Claimant’s shareholding in the Company as currently registered, compared with a 17% shareholding.[218]Mr Weaver was subject to a relatively short cross examination. This was no reflection on Mr Macpherson’s cross examination. Mr Macpherson’s difficulty was that he had no expert valuation evidence of his own to call (assuming that this would have resulted in expert disagreement). In those circumstances, Mr Macpherson was necessarily limited in the matters he could put to Mr Weaver and in his ability to challenge Mr Weaver’s evidence. The consequence of this was that Mr Weaver was not seriously tested or challenged on his own expertise. Rather, Mr Macpherson’s attack was on the adequacy, reliability and accuracy of the financial information provided to Mr Weaver, and what the implications would be, in terms of Mr Weaver’s valuation evidence, if the financial information provided to Mr Weaver required amendment or addition. Mr Weaver was professional and helpful in his evidence. His answers were careful and considered and, it was clear, reflected what he thought, particularly where he accepted matters put to him in cross examination. Mr Weaver’s evidence also demonstrated his expertise. I will need to come back to the valuation evidence, and the criticisms made of the information provided to Mr Weaver, but in terms of my overall impression, I found Mr Weaver to be a helpful expert witness, whose evidence I should accept unless clearly shown to be wrong by other evidence.[219]Mr Beckett is a managing director at Alvarez & Marshal and leads their Disputes & Investigations practice in Europe and the Middle East. He works within the Forensic Technology Team and, by reference to his expert report, has over 20 years of experience providing expert opinion and evidence on technology issues, including computer forensics, eDisclosure, data analytics and software development.[220]Mr Beckett was instructed to consider a series of questions relating to the Claimant’s use of his various email addresses, and the actions taken by the Company in relation to the First Email Migration, the Second Email Migration and the Domain Suspension.[221]Mr Beckett was cross examined only briefly by Mr Macpherson, again for the reason that Macpherson had no expert IT evidence of his own to call (again assuming that this would have resulted in expert disagreement). The consequences were the same as they were in relation to Mr Weaver’s evidence, although Mr Beckett’s cross examination was limited to some minor probing of his evidence. I also found Mr Beckett to be professional and helpful in his evidence. For reasons which will become apparent, I do not regard the expert IT evidence as having much relevance to what I have to decide in this judgment. Nevertheless, my overall impression of Mr Beckett was the same as with Mr Weaver. I found Mr Beckett to be a helpful expert witness, whose evidence I should accept unless clearly shown to be wrong by other evidence.

The evidence – the submissions on general principles

[222]The Claimants’ counsel devoted part of their written closing submissions to setting out some general principles concerning the burden and standard of proof and what should be my general approach to the evidence. So far as these submissions were directed to matters of general principle, and subject to what I am about to say, I did not understand these submissions to be in dispute. It is not necessary to repeat these submissions. I have kept them in mind, both in relation to the burden and standard of proof and in relation to my approach generally to the evidence in this case.[223]There are two matters in the submissions of the Claimants’ counsel in relation to my approach to the evidence which call for specific reference.[224]First, I should make specific reference to the submissions of the Claimant’s counsel on failure to call a witness. The Claimant’s counsel submitted that I should draw a negative inference from the failure of either the Company or the Second to Sixth Defendants to call Ms Grigorian-Coates as a witness at the Trial. Ms Grigorian-Coates has been referred to in the narrative above as the Company’s legal counsel and, in particular, was involved in the organisation of the October 2019 Company Board Meeting, the November 2019 Company Board Meeting and the First and Second Capital Raises. There was no suggestion that Ms Grigorian-Coates was unavailable to give evidence. I understood her to be present in court for all of the Trial.[225]I will need to come back to the question of whether a negative inference can be drawn from the absence of Ms Grigorian-Coates as a witness at the Trial. It is however convenient at this stage to set out the guidance given in this respect by Brooke LJ in Wiszniewski v Central Manchester HA [1998] EWCA Civ 598 [1998] PIQR P324, at page 340:
“From this line of authority I derive the following principles in the context of the present case: (1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action. (2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness. (3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue. (4) If the reason for the witness’s absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”
[226]These principles were further explained, and qualified, by Lord Leggatt JSC in Efobi v Royal Mail Group Ltd [2021] UKSC 33 [2021] 1 WLR 3863, at [41]-[43]:
“41 The question whether an adverse inference may be drawn from the absence of a witness is sometimes treated as a matter governed by legal criteria, for which the decision of the Court of Appeal in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 is often cited as authority. Without intending to disparage the sensible statements made in that case, I think there is a risk of making overly legal and technical what really is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules. 42 There is nothing in the reasons given by the employment tribunal for its decision in this case which suggests that the tribunal thought that it was precluded as a matter of law from drawing any adverse inference from the fact that Royal Mail did not call as witnesses any of the actual decision-makers who rejected the claimant’s many job applications. The position is simply that the tribunal did not draw any adverse inference from that fact. To succeed in an appeal on this ground, the claimant would accordingly need to show that, on the facts of this case, no reasonable tribunal could have omitted to draw such an inference. That is, in its very nature, an extremely hard test to satisfy. 43 Where it is said that an adverse inference ought to have been drawn from a particular matter here the absence of evidence from the decision-makers the first step must be to identify the precise inference(s) which allegedly should have been drawn. In their written case on this appeal counsel for the claimant identified two such inferences: (i) that the successful applicants for the jobs for which the claimant unsuccessfully applied were of a different race or ethnic origin from the claimant; and (ii) that the recruiters who rejected the claimant’s applications (in all but two cases on paper without selecting him for an interview) were aware of his race when doing so.”
[227]Second, I should also make specific reference to the issue of absence of documents. Both the Claimant and the Second to Sixth Defendants, respectively, accused the other party of failures of disclosure, and invited me to draw adverse inferences from the absence of documents which, so it was submitted, one would have expected to see in support of the relevant case of the relevant party.[228]Although the accusations were made on both sides, it is fair to say that the bulk of the accusations came from the Claimant’s side, and that those accusations involved allegations of deliberate failures of disclosure and dishonest dealings with documents. In their written closing submissions, counsel for the Second to Sixth Defendants spent some time explaining the nature of the disclosure process in a case such as the present case, the reasons why documents might be missed in the electronic search process, and the difficulties which would confront a party seeking to suppress or concoct a document. The Second to Sixth Defendants also made the point that the CPR provide the procedural mechanisms by which a party can probe and challenge the disclosure given by another party. In this context the point made by the Second to Sixth Defendants, as I understood it, was that the Claimant had not invoked these procedural mechanisms. So far as I am aware, the only relevant application in this context which was made by the Claimant was an application for disclosure in relation to financial projections for the Company in respect of which, so it was submitted, there had been a failure of disclosure. An order for what was effectively specific disclosure was sought against the Company and the Second and Third Defendants. The application for this order comprised one of the series of applications which were made by the Claimant by his application notice dated 1st May 2025 (the day before the commencement of the Trial in court), which occupied the first day of the Trial. This particular application was dismissed, for the reasons which I gave in a judgment delivered on the first day of the Trial.[229]The arguments between the parties in this context are not arguments which can be resolved in principle. The arguments fall to be considered in those cases where it is said that documents which one would have expected to have been disclosed are not before the court, and where it is said that adverse inferences should be drawn from the absence of the relevant documents. I therefore keep in mind the competing arguments of the parties in this context, without reciting the same, when I have to consider questions relating to missing documents or documents alleged to be missing and alleged failures of disclosure.

The evidence – the Schedule of Dishonesty

[230]As I have said, I heard the Second Amendment Application and the oral closing submissions on 24th July 2025 and 25th July 2025. On the previous day, 23rd July 2025, the Claimant’s counsel produced, by way of supplement to their written closing submissions, a document described as a Schedule of Dishonesty. I will adopt the same expression to refer to this document.[231]The Schedule of Dishonesty was prepared in the form of a Scott Schedule. The first column listed 37 alleged “Incidences of Dishonesty”. There was then a column for, respectively, each of the Second to Fifth Defendants, Mr Macharia and Mr Karauri. In each of these columns, for each alleged incident of dishonesty, a cross identified the person or persons alleged to have been involved in the alleged incident. The next column listed evidence adduced by the Second to Sixth Defendants in support of their case, in relation to the alleged incident of dishonesty. The final column listed the evidence alleged to undermine or contradict the evidence adduced by the Second to Sixth Defendants. In all the Schedule of Dishonesty ran to 38 pages.[232]I make specific reference to the Schedule of Dishonesty for two reasons. First, and while it is not necessary for me to go through the document item by item, I found the document to be a useful point of reference, in terms of identifying evidence relevant to the factual issues which I have to decide. Second, and more fundamentally, the document illustrated the extent of the allegations of dishonesty made against the Second to Fifth Defendants and, to a lesser extent, against Mr Macharia and Mr Karauri. One or more of the Second to Fifth Defendants were marked with a cross for every alleged incident of dishonesty, with the exception of incidents 5, 11 and 32, for which no one was identified, and incident 26, for which only Mr Macharia was identified. Effectively, the Schedule of Dishonesty extended the allegations of dishonesty against the witnesses called by the Second to Sixth Defendants to most, if not all, of the factual issues which I have to decide.

My findings on the expert evidence of Mr Weaver

[233]The financial position of the Company following the Licence Suspension is itself in issue in the Proceedings, and is both relevant and important to other issues in the Proceedings. In these circumstances, I find it convenient to make my findings on the expert evidence of Mr Weaver before addressing myself directly to the Claims.[234]The questions put to Mr Weaver, for the purposes of his expert report, were as follows:(1) What was the financial position of the Company during the period from July to December 2019?(2) What was the value of the Company’s shares as at 16th October 2019, 4th November 2019 and December 2021? I will refer to the first and second of these valuation dates as “the 2019 Valuation Dates”, and to the third valuation date as “the 2021 Valuation Date”.(3) Was the rationale given for the First Capital Raise and the Second Capital Raise true?(4) What monies were received from the First and Second Capital Raises, when were such monies received and to what use were they put and when?(5) What is the difference between the value of the Claimant’s shareholding in the Company as currently registered compared with a 17% shareholding? For the purposes of this valuation question, the valuation date used by Mr Weaver is 31st December 2024 (“the 2024 Valuation Date”).[235]I start with a summary of Mr Weaver’s evidence in his report, in response to these questions. Before doing so, I should make further mention of the third of the questions put to Mr Weaver, as set out above. It seems to me that this third question is inaptly phrased. The rationale given for the First Capital Raise and the Second Capital Raise at the time was that, following the Licence Suspension and the loss of the revenue from the Pevans Contract into Sportsoft, the Company was in serious financial difficulties, was set to run out of money, and could not survive without an injection of further capital; the only source for which was the Company’s shareholders. By contrast, the Claimant’s primary case is that the First and Second Capital Raises were part of a deliberate scheme by the Second to Sixth Defendants to dilute the Claimant’s shareholding in the Company. In theory these two propositions are not necessarily mutually exclusive. In theory, at least, it could be the case that the two Capital Raises were very much required, but also the case that the Second to Sixth Defendants took the opportunity thereby presented to engineer a dilution of the Claimant’s shareholding.[236]So far as Mr Weaver’s evidence is concerned however, it does not seem to me that Mr Weaver, as an expert witness, was able to address the question of whether the rationale given for the First and Second Capital Raises was true. As a matter of fact, it might have been the case that the two Capital Raises were required, because the Company needed the money and had no other means of raising the money. This might not however have been the true rationale for the Capital Raises because, on the Claimant’s case, the Second to Sixth Defendants were intending to use the Capital Raises to dilute the Claimant’s shareholding. It seems to me that Mr Weaver was in a position to give evidence on whether there was a financial justification for the First and Second Capital Raises, on the basis of his expert opinion of the Company’s financial position at the relevant time. It also seems to me that Mr Weaver was not in a position to address whether the Company’s financial position was the true rationale for the First and Second Capital Raises, because this engaged factual questions outside his expertise.[237]In the event, and whether by accident or design, Mr Weaver resolved this problem for himself by answering this particular question on the basis that he was considering whether the rationale given for the First and Second Capital Raises was reasonable. Effectively therefore, Mr Weaver was addressing the first of the two questions which I have identified above; namely whether the Company’s financial position at the relevant time was such as to justify the First and Second Capital Raises, leaving to one side the question of whether this was the actual and true rationale for the two Capital Raises. I therefore approach Mr Weaver’s evidence in answer to the third question in his instructions on this basis. What follows from this is that if I accept the evidence of Mr Weaver in answer to this question, this does not determine the separate question of whether the Claimant is right in his primary case that the First and Second Capital Raises were part of a deliberate scheme to dilute his shareholding in the Company.[238]Returning to my summary of the evidence in Mr Weaver’s report, Mr Weaver helpfully identifies the companies within the SPG Group, at the various valuation dates, and the stake of the Company in those companies, together with some basic information in relation to each company. In order to set the scene it is convenient to adopt Mr Weaver’s summary of the SPG Group.[239]Starting with companies within the SPG Group, either as wholly or partially owned subsidiaries of the Company, the position as at the 2019 Valuation Dates was as follows:(1) Sportsoft - an English company incorporated on 24th March 2017. The Company acquired its 100% stake in Sportsoft on the same day. As previously explained, Sportsoft provided gaming software, principally to Pevans pursuant to the Pevans Contract.(2) Sportpesa Italy SRL - an Italian company incorporated on 16th January 2014 (“Sportpesa Italy”). The Company acquired a 75% stake in Sportpesa Italy on 24th March 2017. Sportpesa Italy was licensed to operate an online gaming business up to 30th December 2022, at which point it sold its licence and effectively discontinued its operation.(3) Sportpesa Limited - a Tanzanian company incorporated on 20th January 2016 (“Sportpesa Tanzania”). The Company acquired a 90% stake in Sportpesa Tanzania on 4th October 2017. Sportpesa Tanzania was licensed to operate and operated an online gaming business.(4) Sportpesa Pty Limited - a South African company incorporated on 15th September 2015 (“Sportpesa SA”). The Company acquired a 60% stake in Sportpesa SA on 26th July 2017. Sportpesa SA was licensed to operate and operated an online gaming business.(5) Sportpesa LLC - a Russian company incorporated on 7th July 2016 (“Sportpesa Russia”). The Company acquired an 85% stake in Sportpesa Russia on 9th February 2018. Sportpesa Russian has always been non-operating.(6) Ithotho Pty Limited - a South African company incorporated on 27th February 2006 (“Ithotho SA”). The Company acquired a 44% stake in Ithotho SA on 2nd October 2019. Mr Weaver’s instruction was that Ithotho SA had always been non-operating. In cross examination of the Third Defendant it came out that Ithotho SA had in fact held what was referred to as a totalisator licence, which I understand to be a form of licence for gaming in South Africa. The Third Defendant’s evidence was that Ithotho SA had an agreement with Sportpesa SA for Sportesa SA to make use of the licence. The Third Defendant also appeared to accept that the licence had value and that the value of Ithotho SA was in this licence. I will need to come back to this point. So far as his report was concerned however, Mr Weaver treated Ithotho as having always been non-operational.[240]Turning to the 2021 Valuation Date, the position was the same, subject to two matters:(1) Mr Weaver’s instructions were that the Company had acquired a 100% stake in Kentech on 3rd July 2020. Kentech is the Spanish company incorporated on 8th June 2015 which has been mentioned earlier in this judgment, in the context of the dispute over money being paid from Pevans to certain other companies, one of which was Kentech. Kentech was the company which provided the sports gaming software used by Sportsoft. I refer to the Company’s acquisition of Kentech as a matter of Mr Weaver’s instruction because it was put to the Third Defendant, in cross examination, that the previous owner of the shares in Kentech, Ms Mineva, had in fact held the shares on trust for the Company in 2019 and 2020, prior to the date of acquisition advised to Mr Weaver. The Third Defendant said that she had no knowledge of this, and denied the suggestion that Mr Weaver had been given a later date of acquisition by the Second to Sixth Defendants in order falsely to depress the value of the Company at the 2019 Valuation Dates.(2) Prior to the December 2021 Valuation Date the Company’s 60% stake in Sportpesa SA was transferred to local ownership, in compliance with South African regulations. Mr Weaver was however instructed that effective 60% control of Sportpesa SA remained with the Company. This does not appear to have been disputed.[241]Finally, and as at the 2024 Valuation Date, the position had changed further, in the following respects:(1) The Company had increased its stake in Sportpesa Italy to 100%, in October 2022.(2) The Company had obtained effective 100% control of Sportpesa SA, although Sportpesa SA still remained nominally in local ownership.(3) The Company had increased its shareholding in Ithotho SA from 44% to 74% in June 2023.[242]Mr Weaver gives a detailed explanation of his valuation methodology in section 4 of his report. For present purposes it is only necessary to quote the helpful summary of this valuation methodology, which Mr Weaver provides at paragraphs 2.1.1-2.1.5 of his report:
“2.1.1 I was not provided with financial projections for any of the Valuation Dates, as I understand SPG’s management team (“SPG Management”) has historically not prepared these either on a consolidated level or on a standalone basis. Therefore, I have not used the Income Approach for my valuation of SPG. Instead, I have relied on the Market Approach to arrive at the valuation of the 100% equity value of SPG i.e. SPG’s shares as at the Valuation Dates (all capitalised terms as defined below). 2.1.2 I understand that SPG has never produced consolidated financial statements. Therefore, as at each of the Valuation Dates, I have analysed and valued each company within the SPG Group on a standalone basis, based on the historical financial information for the individual entities provided to me by DLA Piper on behalf of SPG Management. 2.1.3 For the companies that I consider having value as at any of the Valuation Dates, I have first estimated their Enterprise Value (“EV”) based on their historical Earnings Before Interest Tax Depreciation and Amortisation (“EBITDA”) and an appropriate multiple selected using publicly-listed comparable companies. 2.1.4 I have then adjusted the EV for estimated external long-term gross debt, non-trade intercompany debt, excess cash, inter-company non-trade receivables and any surplus assets, in order to arrive at the 100% equity value of each company, which I have further adjusted for SPG’s shareholding in the respective company. 2.1.5 Based on the above steps, I have arrived at the 100% equity value range of SPG as at the various Valuation Dates.”
[243]For the purposes of valuing the Company as at the 2019 Valuation Dates, Mr Weaver identifies those companies in the SPG Group which had been operating since early to mid-2017; namely the Company, Sportsoft, Sportpesa Italy, Sportpesa Tanzania and Sportpesa SA. In summary, and without going into the detail of Mr Weaver’s evidence in his report, the position in relation to each of these companies as at the 2019 Valuation Dates was as follows:(1) As the Company was acting solely as parent company, it did not generate any revenue from external sources, and was loss-making at the EBITDA level in 2018 and 2019, disregarding dividend income received from Sportsoft. Ignoring this dividend income, the Company had a negative figure for EBITDA in 2019.(2) Sportsoft’s primary source of revenue was from the Pevans Contract. The loss of the Pevans Contract resulted in a significant reduction in revenues for Sportsoft, which had not found any revenue-generating contracts to replace Pevans as at the 2019 Valuation Dates.(3) In the case of Sportpesa Italy, a marketing ban on betting activities in Italy had been fully implemented by July 2019, which had had a significant adverse impact on the establishment of its business. In 2019 Sportpesa Italy had a negative adjusted figure for EBITDA.(4) In 2019 both Sportpesa Tanzania and Sportpesa SA had negative adjusted and unadjusted figures for EBITDA.[244]Mr Weaver also makes reference to the two other companies in the SPG Group; namely Sportpesa Russia and Ithotho SA. On the basis that neither company was operating or had any significant assets at the 2019 Valuation Dates, Mr Weaver assigns no value to either company at the 2019 Valuation Dates.[245]The opinion of Mr Weaver is that the loss of the Pevans Contract, the marketing ban in Italy and the significant negative figures for EBITDA being generated as at the 2019 Valuation Dates meant that it was not clear when the companies in the SPG Group were likely to generate positive cash flows and become self-sustaining. In consequence, Mr Weaver concludes that any value associated with the businesses as at the 2019 Valuation Dates would be offset by the requirement to fund the continuing losses in order to continue operations. Mr Weaver thus concludes that a third party acquirer of the SPG Group would not ascribe any equity value to the companies, with the consequence that the equity value of the SPG Group on the 2019 Valuation Dates was nil; meaning in turn that the Company shares had nil value.[246]Turning to the question of the financial position of the Company between July and December 2019, Mr Weaver has carried out an exercise in estimating the consolidated net assets balance of the SPG Group for the relevant period. The results of this exercise, set out in table 10 in Mr Weaver’s report, show that the net assets balance of the Company, on a group basis, was negative, as at the end of each month between July and December 2019. In terms of a consolidated figure for EBITDA for the SPG Group in 2019, table 11 in Mr Weaver’s report shows a negative figure for 2019. Only Sportsoft generated a positive EBITDA figure for 2019 and, as Mr Weaver points out, that was primarily due to revenues generated from Pevans between January and June 2019, with a very significant reduction in revenues thereafter.[247]Mr Weaver does not in his report, in terms, state a single conclusion in relation to the financial position of the Company between July and December 2019. In these circumstances I find it simplest to quote Mr Weaver’s own summary of his conclusions on this question in his report, at paragraphs 11.3.1 to 11.3.4:
“11.3.1 Based on my high-level assessment of the consolidated net assets of SPG, I note that SPG’s net assets were negative as at the end of each month from July 2019 to December 2019, which appears to be driven by the significant losses generated by most of the SPG entities since commencement of operations in early to mid-2017 to the end of 2019. 11.3.2 Additionally, the total external long-term gross debt of all SPG entities as at the end of December 2018 and December 2019 significantly exceeded the total cash balance held by the SPG entities as at the end of the months July 2019 to December 2019. 11.3.3 I did not identify any significant physical, intangible or financial assets acquired by SPG Group up to the end of 2019, with the equity and debt being invested in the operations of SPG Group. 11.3.4 Prior to July 2019, Sportsoft UK had been making profits at EBITDA level, generated primarily from the contract with Pevans. However, when Pevans ceased operations in July 2019, Sportsoft UK began to generate significant losses at EBITDA level prior to the 2019 Fundraises, as can be seen from table 11, which presents Sportsoft UK’s negative EBITDA for the months of July and August 2019.”
[248]On the basis of his analysis and conclusions as to the financial position of the Company and the SPG Group between July and December 2019, Mr Weaver also concludes that the rationale, as expressed, for the first two Capital Raises was reasonable, “since the group clearly needed cash to continue trading.”; see paragraph 2.3.5 of the report.[249]Turning to the 2021 Valuation Date, Mr Weaver’s analysis is more complicated. By this time the Company itself, Sportsoft, Kentech, Sportpesa Italy, Sportpesa Tanzania and Sportpesa SA were all actively trading. Following the Licence Suspension, the Sportpesa Kenya trademark, which was previously under the ownership of Pevans, was transferred to the Company. A new entity, called Milestone Games Limited (“Milestone”) commenced online gambling operations in or around January 2021. The Company then licensed the use of the trademark to Milestone, for an annual licence fee of around £174,000, in 2021. Other than this revenue stream, the Company did not generate further recurring revenues, and continued to be loss making at the EBITDA level. As at the 2021 Valuation Date the Company, Sportpesa Italy and Sportpesa SA were all generating negative figures for EBITDA. The position was also the same as at the 2019 Valuation Dates, in the sense that any value associated with the companies in the SPG Group was likely to be offset by the requirement to fund the continuing losses, in order to continue operations, with the result that a third party purchaser would not attribute any equity value to the companies. For reasons which he explains, Mr Weaver reaches the same conclusion in relation to Kentech.[250]This leaves Sportpesa Tanzania and Sportsoft. Mr Weaver’s opinion is that these companies did have value at the 2021 Valuation Date. As such, Mr Weaver applies the valuation approach identified at the outset of his report; that is to say estimating the Enterprise Value by applying an appropriate multiplier to an appropriate figure for the EBITDA of each company as at the 2021 Valuation Date, and then adjusting the Enterprise Value, as necessary, for estimated long-term debt, non-trade inter-company debt, excess cash, inter-company non-trade receivables and any surplus assets. The application of this valuation approach results in equity values for Sportpesa Tanzania and Sportsoft, respectively, of £4.5 million and £1.1 million, as opposed to the nil equity values for the Company, Kentech, Sportpesa Italy and Sportpesa SA. Mr Weaver also attributes no value to Sportpesa Russia and Ithotho SA, as non-operational companies.[251]Mr Weaver then applies these valuations to arrive at a figure for the equity value of the Company, bearing in mind its stake in the SPG Group companies. As Mr Weaver explains, in paragraph 8.6.3 of his report:
“8.6.3 In my assessment of the equity value of SPG, I have considered similar adjustments as those made as at the 2019 Valuation Dates against the EV for each company, in order to arrive at the 100% equity value of these companies and the value of SPG’s share. To recap, I have adjusted the EV for estimated external long-term gross debt, non-trade inter-company debt, excess cash, inter-company non-trade receivables and any surplus assets, in order to arrive at the 100% equity value of each company, which I have further adjusted for SPG’s shareholding in the respective company.”
[252]The overall result, as set out in table 17 in the report, is an equity value of nil for the Company, as at the 2021 Valuation Date.[253]Mr Weaver then turns to the valuation of the Company as at the 2024 Valuation Date, in order to answer the question of the difference in value between the Claimant’s current (0.85%) shareholding and a 17% shareholding. The analysis is, again, more complicated, but this particular valuation is not challenged. It seems to me therefore that I can go straight to Mr Weaver’s valuation conclusion. Mr Weaver gives a range of values, in relation to the equity value of the Company, as at the 2024 Valuation Date. Mr Weaver identifies the equity value of the Company as lying somewhere in the range of £31 million to £39 million. This translates to a difference in value, as between the Claimant’s current shareholding and a 17% shareholding, within the range of £5.01 million to £6.3 million. In the absence of challenge, I accept that this difference in value lies within the range of figures provided by Mr Weaver.[254]Finally, and following the order of Mr Weaver’s evidence in his report, there is Mr Weaver’s analysis of what money was raised by the First and Second Capital Raises, when it was received, what use it was put to, and when. I did not understand this part of Mr Weaver’s evidence to be subject to any challenge. Nor is it entirely clear to me what the relevance is of this part of Mr Weaver’s evidence, save to establish that the relevant funds were raised and paid over pursuant to the First and Second Capital Raises, and were legitimately expended. In these circumstances I do not regard it as necessary to summarise this part of Mr Weaver’s evidence. I need only say that I accept this part of Mr Weaver’s evidence.[255]As I understand the position therefore, the only areas of Mr Weaver’s evidence which are subject to question on the Claimant’s side, and require further discussion, are Mr Weaver’s opinions on the financial position of the Company in the period between July and December 2019, Mr Weaver’s valuations of the Company shares, at nil, at the 2019 Valuation Dates and at the 2021 Valuation Date, and Mr Weaver’s conclusion that the rationale for the first two Capital Raises was reasonable.[256]At the outset of his cross examination Mr Macpherson identified his purpose in the following terms [T7/116/7-17]:
“Q. So you will see that the allegations that are being made against the defendants is that they didn't provide you with all of the information which you needed to carry out a −− give your opinion? A. Yes. Yes, I heard that yes. Q. So what I will be asking is whether, on the basis of various bits of information that I will suggest to you, your valuation might be altered. A. Sure. Q. So that's what I am going to take you to. A. No problem.”
A. No problem.”[257]This limited project reflected the constraints imposed on Mr Macpherson by the fact that he had no expert evidence of his own with which to counter the evidence of Mr Weaver. In the event, even this limited project never got off the ground, for three related reasons. First, in some cases, the information which was put to Mr Weaver constituted a hypothesis or case theory which was ultimately not established by the evidence. Second, none of the information put to Mr Weaver, whether hypothetical or actual, either caused Mr Weaver to change his opinions or, in my judgment, should have caused Mr Weaver to have changed his opinions. The essential problem was that the relevant information, whether hypothetical or actual, seemed to me to come nowhere near the point where it could be seen to undermine Mr Weaver’s evidence and/or to require the revision of Mr Weaver’s evidence. Third and even if, contrary to what I have just said, there was information put to Mr Weaver which should have caused him to revise his opinions or his valuations, I have no knowledge of what the relevant revisions should be. The cross examination was not pursued on the basis that if Item A of information had been taken into account by Mr Weaver, the result would have been Valuation B, or financial scenario C. The cross examination was at a far more superficial level. I stress that this was no fault of Mr Macpherson. He simply did not have the material available with which to put alternative valuations or alternative financial scenarios to Mr Weaver.[258]It is not necessary to go through every item put to Mr Weaver in cross examination. I give the following examples, by way of illustration of the points which I have just made.[259]As I have explained, it came out in cross examination of the Third Defendant that Ithotho SA had a totalisator licence, which appeared to have some value, and which was the subject of an agreement with Sportpesa SA. The cross examination in which this was put to Mr Weaver is instructive [T7/117/25-118/2]:
“Q. No. She told the court that Ithotho owned a Totalisator licence in South Africa. Were you aware of that? A. No. Q. And she told the court that the company, as a consequence of that, the company had a value. Were you told that? A. No. Q. If you knew that the Ithotho PTY had a valuable licence on the valuation dates that you were asked to value, namely October 2019, November 2019, December 2021 and today, might that have changed your valuation for SPG? A. The fact that someone else thinks it has value, I have got to provide my own opinion. So I think if I had been given that information, I would have asked more questions about that particular business. Q. Very good. So if you were given the information that it owned a Totalisator licence and that the management thought it had value, you would have then asked questions to be able to ascertain for your own opinion whether it had value and, if so, what value? A. Correct.”
A. Correct.”[260]The topic of the totalisator licence ended there. It is worth repeating that this was not the fault of Mr Macpherson, but I do not see how this passage of evidence can be said to have taken matters forward, in terms of any revision of Mr Weaver’s evidence. All I know is that Ithotho SA held a totalisator licence at some point (the precise dates are not entirely clear) which might have had some value. Whether there was such value and, if so, what it was, are questions which have not been answered in the evidence.[261]It was also put to Mr Weaver that he had not been told that the Company was receiving financial support and was able to receive financial support from the Isle of Man Group at the relevant time, and that if Mr Weaver had been made aware of these matters, it would have affected his evidence. The following hypothesis was put to Mr Weaver, at [T7/133/16-135/6]:
“Q. So you reached the conclusion that in October and −−sorry , between July and December 2019, SPG needed money? A. Yes. Q. And you were not told that SPG had access to a credit line that it could draw upon for that money? A. No, I wasn't told that. I don't know whether your hypothetical, if what you are saying is now true, I don't know quite −− again but I was not told there was a credit line . Yeah, you know, it was 5 million negative net assets and it needed money. Q. And you weren't told that it was able to borrow money at zero interest, without security and without a necessary end point for the repayment date? You weren't told that either? A. No. Q. So you concluded that the company needed money. Therefore the rationale for raising money from the shareholders was reasonable? A. Yes, well , yes. Q. If you had been told that SPG was able to borrow money without security, without interest, without any particular repayment date, in order to cover the money that it needed in July to December 2019, that could have affected your decision as to whether or not it was reasonable to raise money from the shareholders, because they could have borrowed the money? A. Effectively , yes. Q. And if you had been told that, that SPG could have borrowed the money from the Isle of Man group, what you would have done is you would have then asked for details of the finances of the Isle of Man group to see, effectively , how long the credit line was. As in how much could they borrow from the Isle of Man group? A. I think, well , that would have been one thing. I think I would have also asked for evidence of what you have just described is true. That, you know, doesn't require any assets, didn't need to be repaid. I would asked that first, probably.”
[262]It was not at all clear to me on what basis it was being put to Mr Weaver that the Company had access to a credit line pursuant to which it could “borrow money at zero interest, without security and without a necessary end point for the repayment date”. In their closing submissions, the Claimant’s counsel argued that the Second Defendant had eventually accepted in cross examination that the Isle of Man Group was willing to provide the SPG Group with soft loans. I have been back to the transcript of the Second Defendant’s evidence. The passages relied upon by the Claimant’s counsel do not seem to me to justify such a sweeping statement. In his evidence the Second Defendant accepted those instances which were put to him of money being paid by the Isle of Man Group to the SPG Group. The point was put to the Second Defendant that between December 2019 and February 2020 SP Services had provided total loans in the sum of £955,065 to Sportsoft. In the light of that, the Second Defendant accepted that Sportsoft was able to obtain soft loans from SP Services in order to be able to deal with its cash flow problems. The concept of a soft loan was not defined, but reading the Second Defendant’s evidence as a whole, I do not think that it is right to treat him as having accepted that the Isle of Man Group was willing to provide “soft loans” to the SPG Group whenever required.[263]In any event, Mr Weaver reacted to the soft loan hypothesis with understandable scepticism and caution. Mr Weaver was not himself in a position to say that the hypothesis which was being put to him was not one which had been established on the evidence. I am in that position. In my judgment, the evidence that there is of money passing from the Isle of Man Group to the SPG Group comes nowhere near establishing that the Company had the benefit of a credit line of the kind hypothesised by Mr Macpherson. As Mr Weaver pointed out, SP Holdings and the Company were independent companies which needed to be treated completely separately for valuation purposes. The fact that the finances of the two groups of companies were managed together did not necessarily mean that a free credit line existed, with no interest. I accept the evidence of Mr Weaver in this respect. It seems to me that Mr Weaver was right to stress the point that he was concerned with the value and financial position of the Company, and that one could not simply make assumptions that financial support was available from other companies.[264]In his report Mr Weaver noted that he had not been provided with financial projections for any of the valuation dates, on the basis that he had been told that the Company’s management team had historically not prepared these projections, either on a consolidated level or on a standalone basis. This precluded the use by Mr Weaver of the Income Approach to his valuations; that is to say estimating the net present value of the cash flows that a business is expected to generate in the future, using an appropriate discount rate to find the present value of the projected cash flows. As it turned out however, there were some projections which were put to Mr Weaver.[265]The first of these projections was a set of jurisdictional revenue projections for Sportsoft for the years 2020 to 2023. For 2019 the figures were actual figures to September 2019, and thereafter projected. The relevant figures showed positive EBITDA and positive net income projected for Sportsoft as at September 2019. The position was however left opaque. Mr Weaver said that he had been told by Mr Atanassov, Chief Operating Officer of the Business, that the projection had been prepared in relation to an application for a gaming licence in the UK, which was never obtained. What Mr Weaver was told was not in evidence, and even if it had been, Mr Weaver pointed out that if the application for a licence was to be taken into account, one would need to know what the prospects of success for the licence application were, before one could determine whether the licence application had any valuation implications. Beyond this however, what was not explored with Mr Weaver was what impact, if any, the figures in the projection were said to have on his own valuations.[266]The second projection was a profit and loss projection for Sportsoft for the years 2019 to 2023. For 2019 the figures were actual figures to November 2019, and thereafter projected. Mr Macpherson relied on this projection to make a rather different point, as follows.[267]In his report Mr Weaver produced a standalone summarised income statement for Sportsoft which showed revenue for 2019 in the sum of £16.925 million; see table 2 at paragraph 3.4.4 in Mr Weaver’s report. The figures in table 2 came from the management accounts provided to Mr Weaver, on which Mr Weaver based the valuation evidence in his report.[268]If however one looked at the second projection, it showed a figure for revenues for 2019 of £18.7 million odd. Given the evidence of the Third Defendant that 98% of Sportsoft’s income came from Pevans and that Pevans stopped operating in July 2019, it was reasonable to assume that, for the first six months of 2019, Sportsoft received 98% of its income from Pevans and 2% from other sources. It was also reasonable to assume that, for the second six months of 2019 and following the demise of Pevans, Sportsoft only received, over again, the 2% of its income from other sources which it received in the first half of 2019. One could therefore assume that Sportsoft received around 96% (98 divided by 102) of the figure of £18.7 million from Pevans, which equated to about £18 million. In other words, Pevans had supplied to Sportsoft, in the first six months of 2019, a figure of around £18 million. This figure was around £1 million more than the figure for 2019 revenue (£16.925 million) in Mr Weaver’s table 2.[269]Mr Macpherson relied on this discrepancy to put it to Mr Weaver that the figures in the management accounts were wrong. Mr Weaver did not accept this, and expressed the view that the figure of 98% was more likely to be wrong although, as Mr Weaver conceded, he did not know this to be the case. As however with the remainder of the cross examination of Mr Weaver, the position was left unresolved. The apparent discrepancy between the information provided to Mr Weaver, which came from the management accounts, and the information in the second projection was left unexplained. In their closing submissions the Claimant’s counsel returned to this discrepancy, and argued that the figure in Mr Weaver’s table 2, of £16.925 million, must be wrong. I see the point, but in my view the evidence is far too incomplete to allow me safely to conclude that Mr Weaver’s figure must be wrong.[270]The overriding point in this respect is, however, one I have already made. If one assumes that Mr Weaver’s figure is wrong, the consequences for Mr Weaver’s evidence were not explored. There was no exploration of how this affected Mr Weaver’s valuations or his assessment of the financial position of the Company in the second half of 2019. In closing submissions, the Claimant’s counsel argued that I should draw the inference that had Mr Weaver been provided with accurate information, in this and the other respects relied upon by the Claimant, he would have concluded that the rationale for the First and Second Capital Raises was not justified. Leaving aside the fact that this was not a matter conceded by Mr Weaver, in my judgment, the relevant evidence comes nowhere near what would be required for me either to draw this inference or to reject the evidence of Mr Weaver.[271]There is a further difficulty in this part of the Claimant’s case. This part of the Claimant’s case proceeds on the basis that the information in the management accounts which were provided to Mr Weaver was unreliable. This prompts the questions how and why this information was unreliable, if it was unreliable. There is no evidence before me, and no case advanced by the Claimant, which begins to provide an answer to these questions. In closing submissions the Claimant’s counsel submitted that Mr Weaver had been the victim of a deception by the Second to Sixth Defendants, in terms of the information provided to Mr Weaver, but this allegation of deception was not pleaded. Nor was there any challenge to the authenticity of the management accounts, nor was this case of deception ever properly explained or particularised or put to any of the witnesses for the Second to Sixth Defendants; specifically the Second and Third Defendants as directors of the Company. The Third Defendant was cross examined at some length on various items of information provided to Mr Weaver, and was accused of deliberately misleading Mr Weaver in relation to the ownership of Kentech in the latter half of 2019. The hypothesis put to the Third Defendant was that Ms Mineva, the legal owner of the shares in Kentech at that time, held the shares on trust for the Company. The Third Defendant denied this allegation of deliberate deception but, for present purposes the relevant point is that, as I read the relevant part of the Third Defendant’s cross examination, there was no allegation put that the Third Defendant in some way tampered with the management accounts with a view to deceiving Mr Weaver in relation to the financial position of the Company.[272]As I have said, it is not necessary to go through the entirety of the cross examination of Mr Weaver. The examples which I have given are intended to illustrate the reasons why I have come to the conclusion that the cross examination of Mr Weaver gives me no basis for rejecting any part of Mr Weaver’s evidence. While I have been concentrating on Mr Weaver’s report in my consideration of his evidence, I should make it clear that my conclusion also extends to the evidence given by Mr Weaver in response to the matters put to him by Jury O’Shea in their letters of 25th April 2025 and 1st May 2025.[273]In their closing submissions the Claimant’s counsel made extensive submissions to the effect that the financial position of the Business in the latter part of 2019 was far better than represented by Mr Weaver, and that there was no financial case for the First and Second Capital Raises. I am asked to conclude that the Isle of Man Group and the SPG Group had sufficient cash in the fourth quarter of 2019 to avoid the need for the First Capital Raise and the Second Capital Raise.[274]These submissions overlap, to some extent, with issues as to the intentions and motivations of the Second to Sixth Defendants in relation to the First and Second Capital Raises. I will need to consider those issues later in this judgment. I should however deal with these submissions at this point, so far as they relate to the financial position of the Company in the latter half of 2019, and so far as they seek to renew the challenge to Mr Weaver’s evidence.[275]So far as these submissions do relate to the financial position of the Company in the latter half of 2019, and seek to renew the challenge Mr Weaver’s evidence, I reject them, for the following reasons.[276]First, there is nothing in the closing submissions which leads me to conclude that I am wrong to accept the evidence of Mr Weaver.[277]Second, the financial case which is put in the Claimant’s closing submissions is essentially a negative case. I am asked to find that the information provided to Mr Weaver cannot be treated as reliable, and that the Second to Sixth Defendants have failed to provide adequate evidence to show the overall financial position of the Isle of Man Group and the SPG Group in the second half of 2019. On the available evidence I do not think that I can, or should, treat the information provided to Mr Weaver as unreliable. I do not think that this case has been made out. Beyond this, if Mr Weaver is wrong, what was the financial position of the Company in the second half of 2019? The Claimant has no expert evidence of his own to support an answer to this question different to that provided by Mr Weaver. As I understand the Claimant’s case, what is said is that Pevans and/or the Isle of Man Group had sufficient funds available to keep the Company afloat and avoid the need for any capital raise. This however assumes two things. First, it assumes that Pevans and/or the Isle of Man Group had spare funds available to support the Company. Second, it assumes a situation in which Pevans and/or the Isle of Man Group were either obliged or willing to provide such support for the Company. In my view, the evidence does not establish either of these matters.[278]Third, it seems to me that there is an air of unreality to the Claimant’s case on the financial position of the Company. The bottom line in this context is that the major earner within the Business, in 2019, was Pevans. Pevans’ business and its earnings came to an abrupt halt in July 2019, as a result of the Licence Suspension. In this context the Claimant’s counsel argued in their closing submissions that it was not clear, on the evidence, when Pevans ceased trading. On this question I prefer the evidence of Mr Karauri, which seemed to me to be most authoritative on this point, and I find that Pevans effectively ceased trading in July 2019. I also accept the evidence of the Second Defendant, and I so find, that Pevans had no income after July 2019. In this context it is important to note that, in relation to the second of the financial projections put to Mr Weaver, Mr Weaver was cross examined on the basis that Pevans ceased operations on 16th July 2019 (identified as the date of the refusal to renew the Gaming Licence) and made no payments to Sportsoft after June 2019.[279]In terms of the impact of the Licence Suspension, I have the evidence of the Pevans Meetings. Although there is a dispute over parts of the minutes of the meetings on 12th August 2019 and 9th September 2019, these disputes do not affect the bulk of what is recorded in the minutes of those meetings, or what is recorded in the minutes of the meetings of 30th September 2019 and 17th October 2019. In the relevant narrative section of this judgment I have provided a summary of what was being discussed at these meetings. The Claimant attended the first three of these meetings and, I find, acted as chair at each of those first three meetings. All four meetings were concerned with the financial difficulties of the Business, affecting Pevans, the Isle of Man Group and the SPG Group. It is obvious from the content of the discussion at those meetings, leaving aside the limited areas of dispute over the minutes, that the Business was perceived to be, and was, in serious financial trouble. I do not accept there was either deliberate or inadvertent exaggeration or misrepresentation of the position by those who are recorded as reporting to the Pevans Meetings on the state of the Business. Nor do I accept that what was said at the Pevans Meetings can be disregarded simply because matters did not or may not have turned out in line with the predictions made at the Pevans Meetings.[280]In cross examination the statements made at the first three of the Pevans Meetings, as recorded in the minutes of those meetings, in relation to the financial position of the Business, were put to the Claimant. The Claimant attempted to deny that the financial position was as presented to each of these meetings. I found this part of the Claimant’s evidence particularly unsatisfactory. There is no record in the minutes of these meetings of the Claimant, who chaired the meetings, taking issue with the reports made to the meetings. I have earlier made reference to this part of the Claimant’s evidence as an example of why I found parts of his evidence to be unreliable. As I have already noted, the Claimant’s answers to questions in cross examination on these meetings were rambling and discursive, and singularly failed either to explain why the reports on the financial position of the Business, as made to the meetings, were wrong, or why the Claimant apparently sat quiet and made no challenge to these reports when they were made. My impression was that the Claimant was trying to find reasons to dispute evidence which he perceived to be unhelpful to his case. I am not able to accept the Claimant’s evidence, such as it was, that the reports made to the Pevans Meetings in relation to the financial position of the various parts of the Business either overstated the position or were wrong.[281]Fourth, the Claimant’s attempts to build an alternative picture of the financial position of the Business in the latter half of 2019 ran into the difficulty that the alternative picture was incomplete. There was no expert evidence to support the alternative picture. Equally important, where the Claimant was able to point to particular payments being made or to particular sums being available in particular bank accounts, the evidence was not there, nor was he able to demonstrate that there were funds readily available to support the Company in the latter half of 2019. In closing submissions the Claimant’s counsel asserted that Pevans had large debts owing to the Isle of Man Group and the SPG Group, and that Pevans had started to settle its debts to the two Groups in November 2019. This was said to be part of the information which was not provided to Mr Weaver. These assertions in relation to Pevans remained however no more than hypothesis on the Claimant’s part, based on bank statements for SPS which were disclosed in the course of the Trial, after Mr Weaver had given his evidence.[282]Mr Macpherson raised the disclosure of the bank statements with me at the outset of the tenth day of the Trial, just before the Second Defendant gave his evidence. At that point Mr Macpherson indicated that what he characterised as the late disclosure of the bank statements might require the Third Defendant to be recalled for cross examination. In the event there was no application to recall the Third Defendant. In their closing submissions the Claimant’s counsel stated that the bank statements had not been put to Mr Weaver because they were disclosed after he had given his evidence. It was also submitted that it was “inevitable” that the bank statements “may have made a difference” to Mr Weaver’s analysis. As can be seen, this submission was made in somewhat equivocal terms, but even if the submission had been made in more positive terms it is not a submission which I can accept. I do not find that it was inevitable that the bank statements would have made, or might have made, a difference to Mr Weaver’s evidence. To the contrary, it seems to me that it has not been demonstrated that the bank statements would have made any difference to Mr Weaver’s evidence. Ultimately however, and in the absence of the bank statements being put to Mr Weaver, this is all speculation. If the Claimant wished to put the bank statements and the hypothesis based upon those bank statements to the Claimant, it was incumbent upon the Claimant to apply for Mr Weaver to be recalled. No such application was made.[283]On the evidence it is quite clear, and I so find,(i) that the Business was in serious financial trouble in the latter half of 2019 and(ii) that there were no external sources of funding which were available to alleviate the situation. I find that the Company’s position was the same, that the Company needed funding in order to survive, and that such funding was only available from the Company’s own shareholders, if and to the extent that they were willing to provide such funding.[284]Drawing together all of the above discussion of the expert evidence of Mr Weaver, my conclusion is a short one. I accept the expert evidence of Mr Weaver, in full.[285]In summary therefore, my principal findings on the expert evidence of Mr Weaver are as follows:(1) The financial position of the Company during the period from July 2019 to December 2019 was as summarised by Mr Weaver in paragraphs 2.3.1-2.3.4 of his report (repeated at paragraphs 11.3.1-11.3.4 of his report). On the basis of Mr Weaver’s evidence in relation to the financial position of the Company during this period, which I accept, it seems to me reasonable to describe the Company as having been in serious financial difficulty. The net asset position of the Company was negative during this entire period. Most of the companies in the SPG Group which were operating were generating significant losses. The total external long term gross debt of the group companies significantly exceeded the total cash balance held by the group companies during this period. No significant assets were acquired by the SPG Group during this period. The principal revenue earner in the SPG Group, namely Sportsoft, had lost the benefit of the Pevans Contract, from which it derived the bulk of that revenue, and was starting to generate significant losses. In summary, and to quote from paragraph 2.3.5 of Mr Weaver’s report, the SPG Group “clearly needed cash to continue trading”.(2) The value of the Company’s shares as at each of the 2019 Valuation Dates, and as at the 2021 Valuation Date, was nil.(3) Both the First Capital Raise and the Second Capital Raise were, in financial terms, justified and necessary. The Company required the relevant funds and had no other means of raising the funds.(4) I accept Mr Weaver’s evidence as to the money raised by the First and Second Capital Raises, as to when this money was received, as to the use to which it was put and as to when the money was put to such use.(5) As 31st December 2024, the difference between the value of the Claimant’s shareholding in the Company as currently registered and the value of a 17% shareholding in the Company has not been valued at a specific figure. The true figure lies somewhere between £5.01 million and £6.3 million.

The Forgery Allegations

[286]In the written closing submissions the Claimant alleged that four documents in the evidence had been forged. The allegations of forgery (“the Forgery Allegations”) were as follows: (1) In the first draft version of the minutes of the March 2019 Company AGM the Third Defendant subsequently added a section to those minutes which recorded that the Claimant had left the meeting, in the following terms:
“PN apologise himself and asked to be excused and to leave the meeting , He said he is not interesting of the company investments and that he thinks that the company is down . ON's conclusion is that the company lost 1.5 bn shillings. For three years he has been lied . He doesn't want to take credit but he has been abused . Has he ever asked , he feels threaten.”
GN wanted clarification from PN how exactly ........ .” GN wanted clarification from PN how exactly ........ .” The Claimant’s case was that this never happened and that the Third Defendant had added this section to these draft minutes, subsequent to her original preparation of these draft minutes, for the purposes of the Proceedings. (2) Mr Macharia falsified the minutes of the first of the Pevans Meetings on 12th August 2019, for the purposes of the Proceedings, in order to create a false record of the following resolution, which was not passed at the meeting: “It was RESOLVED due to the uncertainty of what is happening in Nairobi regarding Pevans' licence sportpesa global companies should raise initial capital of up to half a million pounds (GPB 500,000/=)” (3) Mr Macharia falsified the minutes of the second of the Pevans Meetings on 9th September 2019, for the purposes of the Proceedings, in order to create a false record of resolutions to pay Mr Karauri a special dividend of KES 100 million and to pay a refund to the Fifth Defendant of $500,000, neither of which resolutions were passed at the meeting. The resolutions were in the following terms: “2. Special dividend of Kshs 100 million approved on 11th April 2019 (if not already paid) be paid to the CEO or as he may direct. 3. USO 500,000/= be paid d to Mr Gene Grand as a refund of the amount personally paid by him to fund South Africa operations.” (4) The Second Defendant created the October 2020 Email for the purposes of the Proceedings.[287]As with my findings on the expert evidence of Mr Weaver, I find it convenient to deal with the Forgery Allegations before I come to directly to the Claims. I will refer to the Forgery Allegations as “the First Forgery Allegation”, and so on, using the same sub-paragraph numbering as in my previous paragraph.[288]At the outset I should set out some principles of law which were engaged by the Forgery Allegations. The starting point is CPR 32.19, which provides as follows:
“(1) A party shall be deemed to admit the authenticity of a document disclosed to him under Part 31 (disclosure and inspection of documents) unless he serves notice that he wishes the document to be proved at trial. (2) A notice to prove a document must be served— (a) by the latest date for serving witness statements; or (b) within 7 days of disclosure of the document, whichever is later.” (a) by the latest date for serving witness statements; or (b) within 7 days of disclosure of the document, whichever is later.”
[289]It will be noted that a party is deemed to admit the authenticity of a document which is the subject of disclosure in proceedings, unless a notice to prove the document, pursuant to CPR 32.19, is served within the specified time limit. The requirements of CPR 32.19 can be waived in an appropriate case. There is a discussion of the relevant case law, in relation to the ability of the court to waive these requirements, in the notes to CPR 32.19 in Volume 1 of Civil Procedure (White Book Service 2025), at pages 1033-1034. There is a useful and shorter summary of the position in the judgment of Aidan Eardley KC (sitting as a Deputy Judge of the High Court) in Zurius v Secretary of State for Health and Social Care [2025] EWHC 57 (KB), at [33]:
“33. In an appropriate case, the Court can waive the requirements of CPR 32.19 and permit an authenticity challenge to be made out of time, even if the party concerned has not made an application for relief from sanctions: see McGann v Bisping [2017] EWHC 2951 at [11]-[26] (where the Judge, Richard Salter QC, considered, as part of his reasoning, whether the test for relief from sanctions set out in Denton v TH White Ltd [2014] EWCA Civ 906, [2014] 1 WLR 3926 was made out). Important considerations will include whether the challenge amounts to an unfair ambush of the other party, and the need to avoid, in the interests of justice, a situation arising in which the Court finds itself being asked to allow a potentially fraudulent claim to succeed: see Lionwalk Ltd v Singh [2018] EWHC 1513 (QB) , Walden-Smith J, at [11].”
[290]As Mellor J explained in his judgment in Crypto Open Patent Alliance v Wright [2023] EWHC 2642 (Ch), at [47], the concept of authenticity in CPR 32.19 is a broad one (the underlining is added):
“47. The position is explained in Civil Fraud (1st ed.) at paragraphs 34-014 to 34-017. In summary: i) Under CPR 32.19 , a party is taken to admit the authenticity of any document unless a notice requiring the other party to prove the document at trial is served, which must be done either within 7 days after disclosure or by the latest date for filing witness statements. ii) Failure to serve the requisite notice leaves a party unable to challenge the authenticity of a document unless the court grants permission, applying the principles of relief from sanction. iii) The concept of "authenticity" is broad and "does not merely refer to whether the document disclosed is a "genuine" document, in the sense of one that has been doctored or concocted. Any issue that goes to whether the document is what it purports on its face to be can be seen as an issue of authenticity." iv) While necessary, mere service of a notice under r.32.19 (or, in this case, serving the list of Challenged Documents) is not sufficient if a party intends to allege deliberate forgery. A clear and distinct pleading of forgery is required.” i) Under CPR 32.19 , a party is taken to admit the authenticity of any document unless a notice requiring the other party to prove the document at trial is served, which must be done either within 7 days after disclosure or by the latest date for filing witness statements. ii) Failure to serve the requisite notice leaves a party unable to challenge the authenticity of a document unless the court grants permission, applying the principles of relief from sanction. iii) The concept of "authenticity" is broad and "does not merely refer to whether the document disclosed is a "genuine" document, in the sense of one that has been doctored or concocted. Any issue that goes to whether the document is what it purports on its face to be can be seen as an issue of authenticity." iv) While necessary, mere service of a notice under r.32.19 (or, in this case, serving the list of Challenged Documents) is not sufficient if a party intends to allege deliberate forgery. A clear and distinct pleading of forgery is required.”
[291]It is important to draw a distinction between(i) a challenge to the authenticity of a document, in respect of which the requirements of CPR 32.19 must be observed, or the failure to do so excused by the court, and(ii) an allegation of forgery. Given the width of the concept of authenticity in CPR 32.19, a challenge to the authenticity of a document may not necessarily engage an allegation of forgery. Where, however, the challenge to authenticity does engage an allegation of deliberate forgery, it is not sufficient simply to serve a notice under CPR 32.19; see the judgment of Mellor J in Crypto Open Patent Alliance, at [47], as quoted above. As Norris J explained in his judgment in Redstone Mortgages Limited v B Legal Limited [2014] EWHC 3398 (Ch) at [58]:
“58. The question is therefore whether any evidence as to the provenance of the document has been produced, and if it has then whether (although not countered by any evidence to the contrary) such evidence is on its face so unsatisfactory as to be incapable of belief. It is vital that the process of challenge is fair. Criticism of the evidence about the authenticity of the document cannot amount to a covert and unpleaded case of forgery. If a case of forgery is to be put then the challenge should be set out fairly and squarely on the pleadings (and appropriate directions can be given). If the charge is that a witness has forged a document (or has been party to the forgery of a document) and the grounds of challenge have not been set out in advance, then if the questions are not objected to the response of the witness to the charge must be assessed taking into account the element of ambush and surprise.”
[292]Where a party alleges fraud, the alleged fraud must be pleaded in a statement of case and full particulars must be given; see the judgment of Rajah J in Kang v Freshacre Properties Limited [2025] EWHC 287 (Ch), at [20]:
“20. A separate point is that a party who alleges fraud, dishonesty, malice or illegality must state it in a Statement of Case and give full particulars; see the Chancery Guide at paragraph 4.8. Such allegations are serious, and it is particular important that the other party knows what is being alleged and can prepare accordingly for trial. It also secures that such allegations are treated with an appropriate measure of formality, and that an “audit” is made of whether there is credible material justifying such an allegation (see Chancery Guide at paragraph 4.9).”
[293]This position does require some qualification. Where the alleged forgery is relied upon as part of a party’s pleaded case, the alleged forgery must be pleaded in a statement of case. The position is not quite the same in circumstances where an allegation of forgery is made, as part of a challenge by a party to the authenticity of a document, but the alleged forgery is not a necessary part of that party’s pleaded case. An example of such circumstances would be where the alleged forgery is said to go to the credit of a witness who is accused of having perpetrated the forgery and having thereby created a false document. In such circumstances it is still necessary for the challenging party to observe the requirements of CPR 32.19, in relation to the challenge to the authenticity of the document. In relation to the alleged forgery however, the obligation of the challenging party is to set out clearly the case in forgery, either at the time when notice is served pursuant to CPR 32.19, or at least in sufficiently good time to ensure that the challenged party has a fair opportunity to deal with the allegation of forgery. These requirements were explained by Rajah J in his judgment in Kang, at [21]:
“21. There may be peripheral documents produced as part of disclosure, and to be relied on as evidence, where authenticity is disputed. In respect of such documents, CPR 32.19 requires the disputing party to serve a notice to prove such documents, so as to prevent a deemed admission of authenticity. As Norris J made clear in Redstone Mortgages Ltd v B Legal at [58], that procedure is not an alternative to pleading forgery where it is a necessary part of a party’s pleaded case, defence or reply: “If a case of forgery is to be put then the challenge should be set out fairly and squarely on the pleadings (and appropriate directions can be given).”
In Lemos and others v Church Bay Trust Company Ltd and others [2023] EWHC 2384 (Ch), Joanne Wicks KC sitting as a Deputy High Court Judge considered what fairness required in cases where it was appropriate to serve a Notice under CPR 32.19 in respect of a peripheral document:
“If a party challenging the authenticity of a document wishes to make a positive case as to how the document came to be created, including any allegation that it has been forged, then if it is not appropriate to plead out the allegation, it seems to me to be incumbent on that party to set out the allegation clearly in correspondence, either at the time of serving the notice to prove or at least in sufficiently good time to ensure that the challenged party has a fair opportunity to deal with it.” “If a case of forgery is to be put then the challenge should be set out fairly and squarely on the pleadings (and appropriate directions can be given).”
In Lemos and others v Church Bay Trust Company Ltd and others [2023] EWHC 2384 (Ch), Joanne Wicks KC sitting as a Deputy High Court Judge considered what fairness required in cases where it was appropriate to serve a Notice under CPR 32.19 in respect of a peripheral document:
“If a party challenging the authenticity of a document wishes to make a positive case as to how the document came to be created, including any allegation that it has been forged, then if it is not appropriate to plead out the allegation, it seems to me to be incumbent on that party to set out the allegation clearly in correspondence, either at the time of serving the notice to prove or at least in sufficiently good time to ensure that the challenged party has a fair opportunity to deal with it.”
[294]In the present case none of the Forgery Allegations were pleaded, and none were the subject of the service of a notice pursuant to CPR 32.19. In the case of the Second Forgery Allegation, the Second to Sixth Defendants did not object to the Claimant resiling from his deemed admission of the relevant document; namely the minutes of the first Pevans Meeting on 12th August 2019. As the Second to Sixth Defendants’ counsel explained in closing submissions, this was because the Claimant had set out the Second Forgery Allegation in terms in his second witness statement, describing the minutes of the Pevans Meeting on 12th August 2019, as produced by the Second to Sixth Defendants in the Proceedings, as “a clear fabrication”. In relation to the remaining Forgery Allegations, the Second to Sixth Defendants contended, by way of their primary case, that none of these Forgery Allegations could be advanced because they had not been pleaded and because there had been no service of a notice pursuant to CPR 32.19.[295]In closing submissions, the Claimant’s counsel sought to outflank these difficulties on the basis that if a witness is cross examined on the authenticity of a document, without objection, it is then too late to contend, in closing submissions, that the challenge to authenticity cannot be made because no notice pursuant to CPR 32.19 has been given. Counsel relied for this purpose on the decision of the Court of Appeal in ECO3 Capital Limited v Ludsin Overseas Limited [2013] EWCA Civ 413. The case was concerned with an appeal by two companies and three directors of those companies against a judgment holding that they were liable to pay £1.4 million as damages for the tort of deceit. The deceit consisted of inducing the claimant, the respondent to the appeal, to invest £2 million in a project by misrepresenting crucial features of the project. The appeal was dismissed. The substantive judgment in the Court of Appeal was given by Jackson LJ, with whom McFarlane and Arden LJJ (as they then were) agreed.[296]One of the grounds of appeal in the case was that the judge ought to have held that a diary note, which was the subject of challenge in cross examination by the claimant’s counsel at the trial, should have been accepted as correctly dated and accurate, because there had been no notice served pursuant to CPR 32.19 challenging the authenticity of the document. Jackson LJ explained the claimant’s case on the diary note at [101]:
“101. I have set out in Parts 3 and 4 above the relevant facts concerning Doctor Shadrin’s diary note dated 12th August 2005. The claimant’s case in respect of this document was two fold: i) Doctor Shadrin wrote the diary note on a later date on two blank pages which just happened to be at the right place in his 2005 diary. Alternatively, ii) Doctor Shadrin drafted the diary note on the recorded date, 12th August 2005, but he did so inaccurately. His motive was to make it look as if he told Mr Lisitsin about the two-tier structure and the differential, when in fact he had not done so.” i) Doctor Shadrin wrote the diary note on a later date on two blank pages which just happened to be at the right place in his 2005 diary. Alternatively, ii) Doctor Shadrin drafted the diary note on the recorded date, 12th August 2005, but he did so inaccurately. His motive was to make it look as if he told Mr Lisitsin about the two-tier structure and the differential, when in fact he had not done so.”
[297]On the second of these scenarios, which he considered the more likely scenario, Jackson LJ stated that no notice pursuant to CPR 32.19 would have been required, because the diary note would have been drafted on the recorded date of 12th August 2005. Jackson LJ then turned to consider the position in relation to the first scenario. Jackson LJ started by explaining, at [105]-[108], what had happened at the trial:
“105. Let me now turn to the first scenario. Suppose Doctor Shadrin wrote the note at a later date on two blank pages which just happened to be at the right place in his diary and then dated it 12th August 2005. Strictly speaking, a note misdated in this way is a forgery: see section 9 (1) (g) of the Forgery and Counterfeiting Act 1981. For the purposes of rule 32.19 such a diary note would not be “authentic”. 106. It was clear from Mr Cunningham’s opening that he did not accept the accuracy of the date on the note. The defendants did not object at that stage on the basis that the claimant was deemed to have admitted the accuracy of the note. 107. It is quite true that just before Doctor Shadrin gave evidence Mr Warwick drew attention to rule 32.19. Mr Warwick did not, however, press the point. That is unsurprising, because he was counsel for BMW. Mr Bishop, who represented Doctor Shadrin, did not pursue the point at all. In particular Mr Bishop did not object to Mr Cunningham cross-examining Doctor Shadrin about the accuracy of the date. 108. If Mr Bishop intended to hold the claimant to the deemed admission, he should have objected to that line of cross-examination. If he had done so, the judge would then have had to decide whether to allow the claimant to withdraw the deemed admission. I incline to the view that the judge would have allowed withdrawal, because that would not cause prejudice to the defendants. However there was no objection raised by Mr Bishop, so the issue did not arise.”
[298]In these circumstances, Jackson LJ considered that the claimant could not be held to the deemed admission, for the reasons he explained at [109]-[110]:
“109. Mr Bishop first placed reliance on rule 32.19 in his closing speech. By then it was too late. The accuracy of the date of the diary note had been fully explored in evidence. It was not appropriate on the last day of trial to invite the judge to ignore part of the evidence on the basis that it was shut out by a deemed admission. 110. Mr Tager submits that all defendants were prejudiced by the absence of notice under rule 32.19; if counsel had given such notice at the proper time, the defendants could have instructed a handwriting expert to advise. In my view it is highly unlikely that any handwriting expert could have assisted the court on the date of the diary note. Although an expert could have assisted on the question of who wrote the note, there was no dispute about that.”
[299]I am doubtful that Jackson LJ intended to lay down a general rule, in dealing with this ground of appeal, that a party cannot be held to a deemed admission of a document in circumstances where there is cross examination on that document without objection. I do not read the relevant part of the judgment of Jackson LJ as laying down any such general rule. It seems to me that the question of whether a party should be held to a deemed admission of the authenticity of a document, in a case where no notice has been served pursuant to CPR 32.19, is a case sensitive question, which depends upon all the circumstances of the relevant case, and upon the question of whether or not it is appropriate for a party to be held to a deemed admission. The decision in ECO3 is useful as an example of a case where it was not appropriate to hold a party to a deemed admission, but I do not think that the case lays down a general rule that cross examination on the relevant document, without objection, releases a party from a deemed admission of the authenticity of that document. Whether it does so depends upon all the circumstances of the particular case. I agree with counsel for the Second to Sixth Defendants that it is important to keep in mind that, in ECO3,(i) there was no objection to the relevant cross examination,(ii) the accuracy of the diary note had been fully explored in the evidence and(iii) there was little risk of prejudice to the appellants, because it was highly unlikely that any additional evidence could have been called if a notice pursuant to CPR 32.19 had been given. To this I would add the point that it was made clear at the opening of the trial, in ECO3, that the authenticity of the diary note was being challenged.[300]With my analysis of the above case law in mind, I turn to consider each of the Forgery Allegations.[301]I do not think that there is anything in the pleading point which was taken by Second to Sixth Defendants in relation to the First, Third and Fourth Forgery Allegations. In oral closing submissions Mr Macpherson confirmed that these Forgery Allegations went only to credit. As such, as I understand the case law cited to me in this respect, it was not necessary for these Forgery Allegations to be pleaded.[302]In relation to the First Forgery Allegation, the position which was eventually reached at the Trial, in relation to this allegation, was a somewhat strange one. In order to explain why this was so, it is necessary to explain the background to the First Forgery Allegation. As I have previously explained, following the March 2019 Meetings, the Third Defendant drew up draft minutes of the March 2019 Company AGM. There were two versions of these minutes. Both were in draft and incomplete. The evidence of the Third Defendant was that she could not recall why the draft minutes were not completed. There was also a third version of the minutes, more formal but still in draft, but the provenance of this third version of the minutes was not explored in the evidence. I am therefore concerned with the two versions of the draft minutes which were prepared by the Third Defendant. In order to distinguish between these two versions, it is convenient to give their Trial bundle references. One version of the draft minutes is at F/76. The other version of the draft minutes is at F/82. I will use these bundle references to identify each version of the draft minutes. It is F/82 (at F/84) which has the additional text identified above, recording the alleged departure of the Claimant from the March 2019 Company AGM (“the Additional Text”).[303]In cross examination the Third Defendant confirmed that F/82 was the earlier draft in time, and that F/76 was prepared after F/82. It was then put to the Third Defendant that the Additional Text had been added to F/82 after its original preparation and after the preparation of F/76, for the purposes of the Proceedings and to support the case of the Second to Sixth Defendants. It was put to the Third Defendant that the alleged subsequent addition of the Additional Text constituted a dishonest fiction. This was denied by the Third Defendant, who maintained that the Claimant had left the March 2019 Company AGM and had then returned. The relevant passage of cross examination can be found at [T5/128/15-135/18]. On the basis of this cross examination, the First Forgery Allegation was then advanced in the Claimant’s written closing submissions. The Second to Sixth Defendants responded to the First Forgery Allegation in their written closing submissions. As I have explained earlier in this judgment, the written closing submissions were served sequentially, in advance of the oral closing submissions, with the Claimant going first. The Second to Sixth Defendants and the Company were able therefore to answer the written closing submissions of the Claimant, in their respective written closing submissions. In particular, at paragraph 55.2 of the closing submissions of the Second to Sixth Defendants, the following assertion was made in response to the First Forgery Allegation:
“In light of the allegation of forgery made in Mr Ndungu’s Closing Submissions, DLA Piper have reviewed the metadata of the relevant version of the draft minutes. The review has confirmed that the version of the draft minutes at [F/82-85] is the first version prepared by Ms Karadzhova on 25 March 2019. The version at [F/76-80] is a subsequent version drafted on 26 March 2019. It appears that a final, completed version was not drafted. Accordingly, it appears that the reference to Mr Ndungu not wishing to invest and leaving the meeting always formed part of Ms Karadzhova’s first draft of the minutes.”
[304]In oral closing submissions on 24th July 2025, the penultimate day of the Trial, Mr Macpherson maintained the First Forgery Allegation and complained that what was said about the metadata of the versions of the draft minutes was not evidence, and should be discounted. Mr Macpherson also submitted that the metadata was at odds with the Third Defendant’s evidence on the order in which F/82 and F/76 were created. I found this puzzling, both because the metadata appeared to confirm the Third Defendant’s evidence that F/82 was created first, and because the Third Defendant had been cross examined on this basis. An overnight exchange of correspondence then ensued between Jury O’Shea and DLA, in which DLA pointed out, I assume correctly, that the metadata for F/82 and F/76 had been disclosed in August 2024.[305]Mr Macpherson then returned to the First Forgery Allegation on 25th July 2025, when he completed the main part of his oral closing submissions. He stated that his instructing solicitors had checked the position, and the information in the metadata appeared to be correct, so that F/82 was created on 25th March 2019 and F/76 was created on 26th March 2019. Mr Macpherson explained the implications of this in the following terms, at [T14/3/25-5/2]:
“The problem with it is I cross−examined on the basis of Ms Karadzhova's evidence, namely that the one with the additions came afterwards, not the other way round. So there are a series of questions I would have asked if she'd put it the other way round. What my learned friends draw from this is the supposition that the original ones were right, as in with the additions, and the subsequent ones were wrong, because they didn't have the additions. My Lord, my submission on this is in the current circumstances you can't really draw any conclusion one way or the other. MR JUSTICE EDWIN JOHNSON: As to what? MR MACPHERSON: You can't draw any conclusion as to which one was accurate, because what I would have asked Ms Karadzhova and suggested to her is that if the second one removed this allegation of Mr Ndungu having stormed out of the meeting, then the second one was more accurate than the first . Of course, given the way that the evidence turned out in cross−examination, I was unable to ask that question, because it wasn't relevant. Instead what I suggested is that it had been added later in order to build the case against Mr Ndungu. Now, that second suggestion appears to be unfounded on the basis of the metadata, but you still can't resolve the question of which one was right without looking at the wider evidence.”
[306]It was not clear to me whether this constituted an abandonment of the First Forgery Allegation, not least because Mr Macpherson appeared to be mistaken in his recollection of his cross examination of the Third Defendant. As I have explained, the cross examination proceeded on the basis that F/82 was prepared first, and that the Additional Text was added later, after the preparation of F/76. The Claimant’s counsel did not return to the First Forgery Allegation in oral submissions in reply or in the Claimant’s Reply Submissions subsequent to the Trial. The minutes at F/76 and F/82 do appear in the Schedule of Dishonesty, at item 4. The First Forgery Allegation is not, however, in the rival lists of issues filed subsequent to the Trial. Nevertheless, I consider that I should deal with the First Forgery Allegation. It was an accusation of serious dishonesty against the Third Defendant and, for reasons which I shall explain, I regard it as symptomatic of a wider problem with parts of the Claimant’s case. I will therefore consider the First Forgery Allegation as if it remains a live allegation, regardless of whether this is the case or not.[307]A point which I have considered in this context is whether a notice pursuant to CPR 32.19 was actually required in relation to the First Forgery Allegation. All that was alleged to have happened is that the Third Defendant altered a document which was only ever in draft. In my view a notice pursuant to CPR 32.19 was required in relation to the First Forgery Allegation. The essential allegation was that the Third Defendant doctored the document at F/82. Bearing in mind the width of the concept of authenticity, as explained by Mellor J in Crypto Open Patent Alliance, it seems to me that CPR 32.19 was engaged. The First Forgery Allegation was not however the subject of any notice pursuant to CPR 32.19.[308]In my view the Claimant should be held to his deemed admission of the authenticity of the version of the draft minutes at F/82. My brief reasons for this conclusion are as follows. The First Forgery Allegation was not, so far as I am aware, foreshadowed either prior to or at the opening of the Trial. So far as I am aware, the First Forgery Allegation was first raised in cross examination of the Third Defendant, and then formally advanced in the Claimant’s written closing submissions. It does not appear to be in dispute that the metadata in relation to F/82 were available for the Claimant to inspect in August 2024. The allegation of dishonesty engaged by the First Forgery Allegation was not however advanced until after the Trial had commenced. The result was a predictable one. The investigations as to the provenance of F/82, which should have been carried out in advance of the Trial, were carried out in the course of the closing submissions.[309]In my view it was not acceptable for the serious allegation of dishonesty engaged by the First Forgery Allegation to be advanced in this way. I can see that there may well be cases where matters of alleged fraud or dishonesty arise in the course of the trial, in circumstances where it would be quite wrong for the court to allow the accused party to shelter behind a deemed admission arising from the absence of a notice pursuant to CPR 32.19. In my judgment the First Forgery Allegation does not fall into this category, and the Claimant should be held to his deemed admission.[310]It seems to me however that I should also explain what my finding on the First Forgery Allegation would have been, if I had concluded that the Claimant should not be held to his deemed admission. On that hypothesis I would have found that the First Forgery Allegation has not been established by the Claimant, essentially for two reasons.[311]First, and most obviously, it appears to be common ground that F/82 was created on 25th March 2019. The hypothesis that the Additional Text was added later for the purposes of the Proceedings, which was put to the Third Defendant, does not appear to be pursued. As I understood Mr Macpherson’s final position, in oral closing submissions, I cannot be certain which of F/82 and F/76 is accurate. Given that F/82 and F/76 are both versions of draft minutes, I have difficulty in seeing why either is necessarily accurate. There is no way of knowing what the finalised version of the minutes would have looked like, because no such finalised version was prepared. Putting all of this together, I cannot see any basis for a finding that the Third Defendant dishonestly added the Additional Text to F/82 at a later stage, in order to help the case of the Second to Sixth Defendants.[312]Second, and leaving aside the developments in closing submissions which I have described above, the allegation that the Third Defendant added the Additional Text later, for the purposes of the Proceedings, does not make much sense. If it was the intention of the Third Defendant to doctor the draft minutes, in order to assist the case of the Second to Sixth Defendants, it seems odd that this should be done in such an inept fashion. Why were the minutes left in draft, if the Third Defendant wanted the minutes to present a false image, helpful to the Second to Sixth Defendants? If the minutes were being doctored by the Third Defendant for this purpose, the obvious step to have taken would have been to make reference to the IT Strategy having been discussed and agreed. This was not done. If the minutes were being doctored, why was the Additional Text framed in a form which looks incomplete; that is to say in the form one would expect to see in draft minutes, as opposed to finalised minutes? Beyond this, I have already found that there were serious disagreements at the March 2019 Meetings and, which was the Claimant’s own evidence, that there were heated issues at the March 2019 Company AGM. It does not strike me as implausible that the Claimant left the meeting in the manner described by the Third Defendant, or that the Claimant said what he is recorded as having said in the Additional Text. At this stage I do not regard it as necessary to make a final finding as to whether what is recorded in the Additional Text actually happened as described. What I do find is that the Third Defendant put the Additional Text into the first draft of the minutes, namely F/82, in good faith. Why the Additional Text was not then retained in F/76 remains unknown. As both F/82 and F/76 were both draft versions of the minutes, and thus part of an incomplete drafting process, I do not find it surprising that they differ.[313]In summary and for the reasons which I have given, and whether or not the First Forgery Allegation should be treated as formally pursued or abandoned, I find that the First Forgery Allegation has not been established.[314]I indicated, in explaining why I would deal with the First Forgery Allegation, that the First Forgery Allegation was symptomatic of a wider problem with parts of the Claimant’s case. I have already adverted to that problem in my overall assessment of the Claimant’s evidence. In giving his evidence and in presenting his case, the Claimant made widespread allegations of fraud and dishonesty against a number of individuals. In some cases, there was no means of investigating the allegations, because they were outside the scope of this case. In other cases, of which the First Forgery Allegation was an example, the allegation was made, and then fell apart on investigation. This was not the fault of Claimant’s legal team who, for the reasons which I have explained when making reference to the Adjournment Application, clearly had to do a great deal of work in a short space of time in order to prepare for the Trial. If the Claimant had been less ready to make allegations of fraud and dishonesty against individuals, and if the Claimant had prepared his case properly in relation to allegations such as the First Forgery Allegation, time and cost would have been saved, and various false trails would have been avoided. I have mentioned earlier in this judgment the problems created by the Claimant’s late instruction of his legal team for the Trial. The problems of late instruction which I have just identified are an example of the problems to which I was referring.[315]As I have mentioned earlier in this judgment, when dealing with the Adjournment Application, the limited time available to the Claimant’s legal team, for the purposes of Trial preparation, and the Claimant’s lack of preparation, had consequences. The wider problem with parts of the Claimant’s case, which I have just identified, was an example of those consequences. In identifying this wider problem, I should also stress that what I have said in my previous paragraph applies to parts of the Claimant’s case, not to the entirety of the Claimant’s case.[316]This brings me to the Second Forgery Allegation, which is that Mr Macharia falsified the minutes of the first of the Pevans Meetings on 12th August 2019, for the purposes of the Proceedings, in order to create a false record of the resolution to raise initial capital of up to £500,000 (“the Disputed Resolution”). The cross examination on the Second Forgery Allegation was fairly complex, and it is necessary to start by setting out the key documents, again using Trial bundle references to refer to the documents:(1) There are minutes of the meeting at F/278. The Second to Sixth Defendants say that F/278 constitutes the genuine minutes of the meeting. These minutes are signed by Mr Macharia and dated 17th October 2019, and contain the Disputed Resolution.(2) There are minutes of the meeting at F/168. The Claimant says that F/168 constitutes the genuine minutes of the meeting. These minutes are unsigned and undated, and do not contain the Disputed Resolution.(3) There are handwritten notes at F/145. The evidence of Mr Macharia was that these were his handwritten notes of the meeting which, in accordance with his usual practice, he then transferred into typed minutes. The handwritten notes were made in a spiral bound notebook. I was shown one of Mr Macharia’s spiral bound notebooks in the course of his cross examination, which contained his notes of the Pevans Meeting on 9th September 2019. The original notebook which would have contained the handwritten notes at F/145 was not produced. Instead, there is only F/145, which, subject to an exception which I am about to mention, constitutes copies of pages from a notebook. These pages are numbered in manuscript, so that numbered page 1 is page 145 in Bundle F and so on. At manuscript numbered page 6, the handwritten notes change. Manuscript numbered pages 6 and 7 comprise manuscript notes made on a copy of the agenda for the meeting on 12th August 2019, not made in a notebook. The manuscript numbered pages then revert, at page 8 (the final page of the notes), to notes made in pages from a notebook. The pages from the notebook were produced to the court as loose pages, including the manuscript notes made on the agenda. The original notebook was not produced.(4) Manuscript numbered page 7 from the notes at F/145, that is to say one of the two pages of notes made on a copy of the agenda, contains the words “UK – consider about 500K GB immediately in CR”. In cross examination Mr Macharia said that this was what he understood to be the Disputed Resolution.(5) On 6th September 2019 (F/739) Mr Macharia circulated to the shareholders and directors of Pevans the minutes of the meeting on 12th August 2019 and an agenda for the Pevans Meeting on 9th September 2019. Attached to this email were the minutes at F/168, which the Claimant says are the genuine minutes of the meeting on 12th August 2019.(6) The evidence of Mr Macharia was that he noticed that he had omitted to mention the Disputed Resolution in the minutes at F/168, prior to the meeting on 9th September 2019, and revised the minutes to add the Disputed Resolution.(7) Mr Macharia’s handwritten notes of the meeting on 9th September 2019 are at F/174. The first item of business recorded in these notes (written, of course, in manuscript) is “Minutes read and approved with slight amendments”. It does not appear to be in dispute that the relevant minutes were the minutes of the meeting on 12th August 2019. I am asked to find by the Claimant that words “with slight amendments”, which appear in manuscript underneath the words “Minutes read and approved”, were a subsequent addition by Mr Macharia, on the basis that they appear on a separate line and, so it is said, are written in a slightly different style.(8) The minutes of the Pevans meeting on 9th September 2019, which are unsigned and undated, are at F/198. They state, as the first item of business, that “The minutes of the meeting of 12th August 2019 were confirmed by proposal from Dr Karie and seconding by Mrs Wathika”.(9) The minutes of the Pevans meeting on 17th October 2019 are at F/276. They are also undated and unsigned. The evidence of Mr Macharia was that he signed the minutes of the meeting on 12th August 2019 (F/278) on 17th October 2019 because he had been asked by board members for a signed version of these minutes. In cross examination Mr Macharia could not recall the reason why he had been asked for a signed version of these minutes.[317]Mr Macharia was cross examined at length on the above documents. At the conclusion of this cross examination it was put to Mr Macharia that the Disputed Resolution was not passed at the Pevans Meeting on 12th August 2019, but had been added to F/278 as a forged addition to those minutes. So far as the manuscript notes at F/145 were concerned, it was put to Mr Macharia that, when he was asked by the solicitors for the Second to Sixth Defendants to produce his notes of the meeting on 12th August 2019, he produced the genuine version of his notes, at manuscript numbered pages 1-5 and 8, and manufactured the notes at manuscript numbered pages 6 and 7. So far as Mr Macharia’s notes of 9th September 2019 were concerned, it was put to Mr Macharia that he had added in the words “with slight amendments” to his record of the approval of the minutes of the meeting on 12th August 2019.[318]I confess that the Second Forgery Allegation has given me considerable pause for thought. While I have re-read with care, for the purposes of this judgment, all the written material placed before me at and subsequent to the Trial (including the transcripts of the evidence and the references to the Second Forgery Allegation in the Schedule of Dishonesty), I have subjected the transcript of the cross examination of Mr Macharia and the documents referred to in that cross examination to a particularly careful re-reading. Mr Macharia’s evidence in the relevant part of his cross examination was not entirely satisfactory. He was unable to recall why he had been asked to produce a signed version of the minutes of the meeting on 12th August 2019. It was also unclear to me why, if Mr Macharia spotted the omission of the Disputed Resolution from the version of the minutes at F/168, prior to the meeting on 9th September 2019, it apparently took until 17th October 2019 for the omission to be corrected, or at least corrected in a signed version of the minutes. When Mr Macharia was asked about the manuscript notes at F/145 his answers were often unclear and rambling. On occasions I formed the impression that Mr Macharia was being evasive, because he did not have an answer to matters which called for inquiry.[319]Mr Macpherson did excellent work, in cross examination, in challenging Mr Macharia’s evidence and in highlighting the question marks over that evidence which are raised by careful scrutiny of the relevant documents. In the final analysis however, I am not persuaded, on the evidence, that Mr Macharia did doctor the minutes at F/278 so as to add a resolution, namely the Disputed Resolution, which was never actually passed at the meeting on 12th August 2019. I reach this conclusion for the following reasons.[320]First, Mr Macharia’s alleged concoction of manuscript numbered pages 6 and 7 of his notes of the meeting on 12th August 2019 does not make a lot of sense. If one looks at the notes appearing on those pages, it strikes me as highly implausible that all these notes could have been created by Mr Macharia subsequent to his original notes, and then swapped in for what would have been the original pages 6 and 7 in his notebook. The notes on pages 6 and 7 just do not look as though they have been subsequently created. In addition to this, if the intention of Mr Macharia was to create a falsified record of the Dispute Resolution, it seems odd that Mr Macharia recorded it in the somewhat vague form of the statement (“UK – consider about 500K GB immediately in CR”) which appears on manuscript page 7 of F145. If the manuscript notes written on the agenda were manufactured subsequently, one would have expected Mr Macharia to make sure that the manufactured notes clearly recorded the Disputed Resolution. In this context, it might have been suggested to Mr Macharia that his manuscript notes were all genuine, including those made on the copy of the agenda, but that Mr Macharia subsequently and falsely promoted what was a reference to the possibility of a capital raise to a formal resolution to that effect. This however was not the way in which this point was put to Mr Macharia and, in any event, given that the minutes at F/278 were signed on 17th October 2019 it is difficult to see why, at that stage, Mr Macharia would have perceived a need to create a false resolution.[321]Second, there is reference in Mr Macharia’s notes of the Pevans Meeting on 9th September 2019 (F/174) to the minutes at F/168 being approved “with slight amendments”. This is consistent with Mr Macharia’s evidence that the Disputed Resolution was left out of F/168 inadvertently, and then added in to correct the omission. I do not accept that I can or should find that the words “with slight amendments” were added later. I can find nothing in the actual manuscript writing to justify a finding of that kind.[322]Third, there are the facts that the Business was in serious financial trouble on 12th August 2019 and that the Business needed to raise money quickly if companies within the Business were to survive. This is recorded in those parts of the minutes of the meeting on 12th August 2019 which are not in dispute. What is also recorded, and is not in dispute, is that one of the options considered was a capital raise from shareholders. It is also not in dispute that there was a capital raise of £500,000 from the shareholders of the Company; namely the First Capital Raise. In these circumstances it would not have been surprising if the First Capital Raise had its genesis in the Disputed Resolution.[323]Fourth, it seems to me that quite a lot turned on the question of what the practice of Pevans was, in relation to the signing of minutes. The Claimant’s evidence was that he signed the minutes of each of these meetings, in his capacity as chairman, following their approval at the next meeting. In their closing submissions, the Claimant’s counsel asserted that the Fifth Defendant had confirmed in his own evidence that the chairman would have signed the minutes of the meeting of 12th August 2019 at the meeting on 9th September 2019. The transcript of the relevant part of the Fifth Defendant’s evidence discloses however that the Fifth Defendant was being asked about a meeting of SP Services on 14th March 2019, in respect of which the Third Defendant was nominated as chair. The minutes were signed by the Third Defendant, as chair, and Mr Beighton, as a director present at the meeting. In the context of that meeting the Fifth Defendant confirmed that the standard way for board minutes to be signed off was by signature of the chairman. Given the context in which this answer was given, I do not think that it will bear the evidential weight placed upon it by the Claimant’s counsel. Mr Karauri’s evidence, to which I do attach weight, was that Mr Macharia signed the minutes of Pevans meetings.[324]In this context, it would have been helpful to see the signed minutes of other Pevans meetings. In cross examination Mr Macharia said that there should be a complete record of signed board minutes of Pevans in his files, going to back to 2017. Mr Macharia did not sound entirely sure of this. In any event there were no other signed minutes of Pevans meetings before the court. This line of investigation does not appear to have been pursued by the Claimant, or anyone else. This was unfortunate, particularly given the seriousness of the Second Forgery Allegation. This seems to me another example of the problems created by the lack of preparation on the Claimant’s side in advance of the Trial, for which the Claimant must take responsibility. In particular, it would have been useful to see, if it existed, a signed version of the minutes of the Pevans Meeting on 17th October 2019. This meeting was not attended by the Claimant and was chaired by the Fifth Defendant. As such, and if the Claimant is right in his evidence, the minutes of this meeting would have been signed by the Fifth Defendant. The net result of all this is that all I have is the signed version of the minutes of the meeting on 12th August 2019, which were signed by Mr Macharia. Mr Macharia was company secretary of Pevans and was the person responsible for compiling the minutes. On the available evidence, I prefer the evidence of Mr Macharia to that of the Claimant. I find that it was Mr Macharia who signed the minutes of Pevans meetings, following their approval.[325]Mr Macharia was also cross examined in relation to another discrepancy between the minutes of the Pevans Meeting on 12th August 2019 at F/168, and those at F/278. The minutes at F/168 contained reference to a text message sent by the Claimant to the President as part of his lobbying effort to secure the reinstatement of the Gaming Licence. Reference to this text is also in Mr Macharia’s manuscript notes of the meeting. The reference to the text message is missing from the signed minutes at F/278. In cross examination Mr Macharia acknowledged the discrepancy, and said that this was an accidental omission. It was not entirely clear to me from the cross examination whether it was being said that this was a deliberate omission by Mr Macharia but, if it was, I found it difficult to see why Mr Macharia would doctor the signed minutes of the meeting in this way. It might be said that Mr Macharia was concerned to assist the Second to Sixth Defendants, and to seek to downplay the Claimant’s efforts to deal with the problems caused by the Licence Suspension. I find this implausible. It is not alleged by the Claimant that Mr Macharia was part of the Alleged Scheme. It seemed to me implausible that Mr Macharia would make selective amendments to the minutes of the meeting as part of a general project to help the Second to Sixth Defendants and harm the Claimant.[326]Drawing together all of the above discussion, I conclude and find that the Second Forgery Allegation has not been established. I find that the Disputed Resolution was passed at the Pevans Meeting on 12th August 2019, that the Disputed Resolution was correctly recorded in the minutes of that meeting, and that the minutes at F/278 are, in their entirety, genuine minutes of that meeting.[327]This brings me to the Third Forgery Allegation, which is that Mr Macharia falsified the minutes of the second of the Pevans Meetings on 9th September 2019, for the purposes of the Proceedings, in order to create a false record of resolutions to pay Mr Karauri a special dividend of KES 100 million and to pay a refund to the Fifth Defendant of $500,000.[328]Using the same system of Trial bundle references as before, the minutes of the Pevans Meeting on 9th September 2019 are at F/198 (also at F/747, by reference to which this part of the cross examination of Mr Macharia was conducted). They contain the disputed resolutions. Mr Macharia’s handwritten notes of the meeting are at F/174. The notes include a reference to the Fifth Defendant having loans of $500,000 which are described as having come from Techpitch, and state that the issue is to be discussed at the next meeting in 2 weeks. There is no record of either of the disputed resolutions in Mr. Macharia’s notes. In cross examination Mr Macharia was adamant that the two resolutions had been passed, but was not able to explain why they were missing from his notes of the meeting.[329]In their closing submissions, in dealing with the Pevans Meeting on 9th September 2019, the Claimant’s counsel sought to use the Second and Third Forgery Allegations as the basis of a more general attack on the reliability of the minutes of the Pevans Meetings. What the Claimant was seeking to achieve in particular, by this more general attack, was an undermining of the reports made to the Pevans Meeting by the Fourth Defendant in relation to the financial position of the Isle of Man Group and the SPG Group.[330]In the case of the Third Forgery Allegation, the Second to Sixth Defendants have taken the point that no notice was served, pursuant to CPR 32.19, in respect of the minutes of the Pevans Meeting of 9th September 2019, at F/198, and that the Claimant should be held to his deemed admission of the authenticity of these minutes, including the two disputed resolutions.[331]In my judgment the position in relation to the Third Forgery Allegation is the same as in relation to the First Forgery Allegation. So far as I am aware, there was no advance notice of the challenge to F/198. The challenge was first raised in the cross examination of Mr Macharia, and was then formally advanced in the Claimant’s closing submissions. In circumstances where the Claimant had given advance notice, by his second witness statement, of his challenge to the Disputed Resolution in the minutes of the Pevans Meeting on 12th August 2019, I would have expected the Claimant also to give notice of his challenge to the minutes at F/198. This would have allowed time for a proper investigation of the disputed resolutions. This is particularly so because these resolutions dealt with matters with which I am not directly concerned in this case. The reality is that in order to understand what lay behind the disputed resolutions, one needs to understand the circumstances in which, according to the resolutions, there was a special dividend due and to be paid to Mr Karauri and a refund due and to be paid to the Fifth Defendant. One also needs to understand why Mr Macharia would perceive any need to falsify F/198 in order to include resolutions of this kind, which are not obviously helpful to the cause of the Second to Sixth Defendants, as demonstrated by the use made of these resolutions by the Claimant in his submissions.[332]In order to decide serious allegations of this kind, it is essential that the court has as full a picture as possible of the relevant evidence. In the case of the challenge to the minutes at F/198, this did not happen. The reason for this, it is clear to me, was that no advance notice was given of the Third Forgery Allegation. In these circumstances, and for broadly similar reasons to those I have relied upon in relation to the First Forgery Allegation, I conclude that the Claimant should be held to his deemed admission of the authenticity of the minutes at F/198, including the disputed resolutions.[333]It seems to me however that, as with the First Forgery Allegation, I should also explain what my finding on the Third Forgery Allegation would have been, if I had concluded that the Claimant should not be held to his deemed admission. On that hypothesis I would have found that the Third Forgery Allegation had not been established by the Claimant, essentially for two reasons.[334]First, it is notable that there is no record of any challenge to the minutes of the meeting on 9th September 2019. The minutes (F/198) were circulated by Mr Macharia, in accordance with his usual practice, the day before the next Pevans Meeting, which was on 30th September 2019. It is not in dispute that the minutes, as circulated, contained the dispute resolutions. There is no record of the minutes at F/198 being approved in the minutes of the meeting on 30th September 2019, but there is equally no record of any challenge to those minutes, which had been circulated by Mr Macharia the previous day. Indeed, in cross examination, the Claimant himself stated he was not disputing the minutes of the meeting on 9th September 2019. It is very difficult to reconcile this evidence, which I am sure was genuine evidence, with the decision of the Claimant, later in the Trial, to accuse Mr Macharia of having falsified these minutes. To this evidence must be added the evidence of the Fifth Defendant and Mr Karauri. The Fifth Defendant said that he recalled the resolution which applied to him. Mr Karauri said the same in relation to the resolution which applied to him. Each was clear in cross examination that the respective resolution was passed at the meeting on 9th September 2019. I accept this evidence.[335]Second, it was not at all clear to me why Mr Macharia would go to the trouble of inventing resolutions to favour the Fifth Defendant and Mr Karauri, in the immediate aftermath of the meeting of 9th September 2019 and, in particular, at a time when the Business was in financial trouble. It might have been, if there had been proper investigation of the Third Forgery Allegation, that some reason might have emerged as to why Mr Macharia would behave in this way but, as it was, this remained a mystery.[336]This point was illustrated by the cross examination of Mr Karauri on the disputed resolutions. It was put to Mr Karauri that the resolution which concerned him had been prepared by Mr Macharia to help Mr Karauri. I intervened to point out to Mr Macpherson that if Mr Karauri was aware that Mr Macharia was doctoring the minutes to assist Mr Karauri, this amounted to an allegation of dishonest dealings between Mr Macharia and Mr Karauri, in circumstances where Mr Macpherson had indicated, at the outset of his cross examination of Mr Karauri, that he was not, at least on the Claimant’s primary case in relation to the evidence of Mr Karauri, accusing Mr Karauri of being dishonest. Mr Macpherson made it clear that he was not putting to Mr Karauri that he had been involved in dishonest dealings. If however this was the position, this seems to me necessarily to mean that Mr Macharia decided to doctor the minutes, in order to assist Mr Karauri, without communicating to Mr Karauri that this was what he was doing. It strikes me as highly implausible that Mr Macharia would act in this way. By contrast, the Fifth Defendant was accused of collaborating with Mr Macharia in the doctoring of the minutes, for the purposes of “this litigation”. This does not make much sense on two levels. First, why would Mr Macharia engage in a collaboration with the Fifth Defendant, but not with Mr Karauri? Second, how could the alleged doctoring of the minutes have been carried out for the purposes of the Proceedings, when the minutes must have been falsified by the addition of the disputed resolutions, at the latest, by 29th September 2019, when the minutes were circulated?[337]Drawing together all of the above discussion, I conclude and find that the Third Forgery Allegation has not been established. I find that the disputed resolutions were passed at the Pevans Meeting on 9th September 2019, that the disputed resolutions were correctly recorded in the minutes of that meeting, and that the minutes at F/198 are, in their entirety, genuine minutes of that meeting. I also reject the wider challenge to the reliability of the minutes of the Pevans Meetings which has been made by the Claimant in the context of the Third Forgery Allegation. I have already effectively dealt with this question, in my consideration of the expert evidence of Mr Weaver, but what I have said there is reinforced by the failure of the Second and Third Allegations.[338]I come, finally, to the Fourth Forgery Allegation. The point is again taken by the Second to Sixth Defendants that no notice was served, pursuant to CPR 32.19 in respect of the October 2020 Email, and that the Claimant should be held to his deemed admission of the authenticity of the October 2020 Email.[339]The position in this respect is not straightforward. One of the applications which was made on the first day of the Trial was an application for an extension of time within which to serve a notice pursuant to CPR 32.19, challenging the authenticity of the October 2020 Email. The Claimant, by Mr Macpherson, elected not to pursue this particular application when, on the afternoon of the first day of the Trial, Mr Riley confirmed that the October 2020 Email was a draft email which was never sent and remained either in an outbox or a deleted box of the Second Defendant. With the benefit of hindsight, it seems to me that the election not to pursue the application for an extension of time was misconceived. I say this because it seems to me that there are two different issues of authenticity which are engaged by the October 2020 Email, and two deemed admissions.[340]The first issue is whether, as the Second to Sixth Defendants asserted until the first day of the Trial, the October 2020 Email was actually sent. In relation to this first issue it seems to me that the Claimant, in the absence of a notice pursuant to CPR 32.19, was bound by a deemed admission that the October 2020 Email had, as appears on its face, been sent. This first issue was resolved by the admission of the Second to Sixth Defendants that the October 2020 Email was never sent. In those circumstances I do not think that the Claimant can be regarded as bound by the deemed admission that the October 2020 Email was sent.[341]The second issue, which the Claimant continued to pursue in the Trial, was whether the October 2020 Email was created by the Second Defendant for the purposes of the Proceedings, as opposed to being an email which the Second Defendant drafted at the relevant time, but did not send. This challenge to the authenticity of the October 2020 Email did, as it seems to me, engage the requirement for a notice pursuant to CPR 32.19. As such, it seems to me that, in the absence of such a notice, or a decision on my part to allow the challenge, the Claimant is deemed to have admitted that the October 2020 Email was a genuine email, created by the Second Defendant at the relevant time, but not sent, as opposed to being a subsequent creation for the purposes of the Proceedings.[342]Notwithstanding the absence of a notice pursuant to CPR 32.19, and notwithstanding the absence of any application either to extend the time for service of such a notice or to excuse the absence of such a notice, I do not think that it would be right to hold the Claimant to this second deemed admission. I do not think that the position is as clear cut as it is in relation to the First and Third Forgery Allegations. The authenticity of the October 2020 Email was put in issue from the outset of the Trial by the Claimant. My understanding is that this issue was first raised, by Jury O’Shea, in their pre-Trial letter of 30th April 2025. It would clearly have been better if the Claimant had raised his challenge to the October 2020 Email at an earlier stage in the Proceedings. It also seems to me, although I should perhaps repeat that this is with the benefit of hindsight, that it would have been better if the Claimant had appreciated that his challenge to the authenticity of the October 2020 Email and the need for a notice pursuant to CPR 32.19 were not settled, or were not necessarily settled by the admission of the Second to Sixth Defendants that the October 2020 Email was never sent. As against this, it is also the case that the Second to Sixth Defendants put their case, up to the first day of the Trial, on the basis that the October 2020 was genuine and was sent. In my view, and in the particular circumstances in which the authenticity of the October 2020 Email has come into issue, it would be wrong to shut the Claimant out from maintaining his challenge to authenticity of the October 2020 Email. I think that the position in relation to the Fourth Forgery Allegation does have some similarities, by analogy, with the position in the ECO3 case, such that I should allow the Fourth Forgery Allegation to be pursued.[343]This therefore brings me to the question of whether the October 2020 Email was merely a genuine unsent draft, or whether the Second Defendant created the October 2020 Email for the purposes of the Proceedings, in order to create the impression that he had made a substantive response to the Claimant’s emails sent in July and September 2020.[344]In their closing submissions the Claimant’s counsel stressed the point that the October 2020 Email was marked as “Sent: Fri 10/2/2020 8:24:32PM Coordinated Universal Time”. Their point was that the October 2020 Email could not have been a genuine unsent draft in circumstances where it was recorded as sent. Mr Beckett did not address the October 2020 Email in his expert report, which predated the admission that it was never sent. In cross examination Mr Beckett was asked about the October 2020 Email, but he was unable to give any firm evidence on whether the email was an unsent draft. The key part of Mr Beckett’s evidence in cross examination was in the following terms, at [T9/201/10-202/11]:
“MR MACPHERSON: You say it looks like a document which has been sent. A. Well, what it actually looks like to me, if I'm honest, is it looks like there's something potentially – the draft bit missing at the top because −− Q. You think there might be something above there, do you? A. If you look at where it says "sent" halfway down, it is that same −− I don't know. I don't know where this has come from. I don't know how it was produced. I don't know what application was used or anything, so it's hard for me to be precise. Given the "sent" email, seeing it says "sent" and has a date makes it look like it's sent but that application −− I would be guessing. I would be purely guessing to give any more details than that. Q. Have you in your experience ever seen a draft email which has the words "sent" and a time and date attached to it ? A. I'm trying to −− I have been looking at these for twenty−odd years. I can't remember every one that I've looked at. I have −− I can't be 100% sure. It's unusual. I have a vague recollection that an old email system that I'm thinking of that's before that used to just say "sent" rather than "saved". Without looking at this and examining this I can't do anything but guess. Q. But that old email system we are talking about is way before 2020, isn't it ? A. Yes.”
Q. You think there might be something above there, do you? A. Yes.”

Q. You think there might be something above there, do you?

[345]I do not think that any safe conclusion can be drawn, from this and other evidence of Mr Beckett in cross examination, that the October 2020 Email was not a draft email, but must have been created subsequently by the Second Defendant. In my view Mr Beckett’s evidence was too equivocal on this question to allow such a conclusion to be drawn.[346]One obvious port of call, in relation to the Fourth Forgery Allegation, would have been the metadata in relation to the October 2020 Email. In their written closing submissions the Claimant’s counsel accused DLA of refusing to produce the metadata. Perhaps inevitably, the position was nowhere near as simple as this.[347]On 10th July 2025, Jury O’Shea wrote to DLA with the following request:
“7. Given the gravity of this issue, we are formally requesting immediate access to the Second Defendant’s relevant email servers and/or devices for forensic examination. This access is essential to determine whether the 2 October 2020 email was manipulated to appear sent — and if so, by whom. 8. We propose that our proposed expert be permitted to conduct a full forensic analysis of the original source data. This may include (but is not limited to) the email logs, metadata, system records, and backup archives relevant to the period in question. 9. Please confirm by return that access will be provided. If your clients refuse to provide access, we will invite the court to draw the inference (and which the existing body of evidence already supports), that this email is a fabrication and has been deployed in these proceedings to mislead the court and our client. 10. We request you respond urgently and provide confirmation by 10.00 am 11 July 2025.”
[348]DLA responded, at some length, by a letter of the same date. The letter set out a variety of reasons for refusing the request, and culminated in the following response to the request:
“7. Your request for last-minute disclosure of the "relevant email servers" and to adduce belated expert evidence on the 2 October 2020 email is therefore refused.”
[349]In their written closing submissions the Claimant’s counsel asserted, as part of the Claimant’s case on the Fourth Forgery Allegation, that DLA had refused to provide access to the metadata for the October 2020 Email. This assertion was relied upon to support the submission that the Second Defendant had something to hide; namely that he had fabricated the October 2020 Email for the purposes of the Proceedings. In their written closing submissions in response, the Second to Sixth Defendants repeated the position stated by DLA in their letter of 10th July 2025, and pointed out that DLA had not refused access to the metadata for the October 2020 Email, but rather to the much more far-reaching request made by Jury O’Shea.[350]Moving on to the oral closing submissions on 24th July 2025, Mr Macpherson repeated the Claimant’s assertion that DLA had refused the request of Jury O’Shea for the metadata for the October 2020 Email. This drew a protest from DLA, by their letter of 24th July 2025, which I have mentioned above in the context of the First Forgery Allegation. The central point being made by DLA in this letter was that the Claimant had had access to the relevant metadata for the October 2020 Email, pursuant to disclosure in the Proceedings, since 16th August 2024. DLA pointed out that the request made by the letter from Jury O’Shea of 10th July 2025 was for “immediate access to the Second Defendant’s relevant email servers and/or devices for forensic examination”, for examination by the Claimant’s expert. DLA also asserted that the metadata for the October 2020 Email confirmed that the email was created on 2nd October 2020. Jury O’Shea responded to the letter of 24th July 2025 by their letter dated 25th July 2025, also mentioned above in the context of the First Forgery Allegation. Jury O’Shea argued that the existing disclosure in this respect was insufficient. They said that they had consulted with IT experts who had advised that the MHTML format in which the October 2020 Email had been disclosed was easily edited; meaning that the request for forensic access, in the form in which that request had been made, was reasonable and proportionate.[351]The oral closing submissions were completed on 25th July 2025. In completing his principal closing submissions, Mr Macpherson accepted that the metadata for the October 2020 Email did show the date of creation of the email as 2nd October 2020. He also stated that the experts consulted by the Claimant’s solicitors had said that the date on the October 2020 Email was easily manipulated. In response Mr Riley essentially repeated the position of DLA, as articulated in their letter of 24th July 2025. In particular, Mr Riley repeated that the metadata showed the date of creation of the October 2020 Email as 2nd October 2020, and protested that Mr Macpherson had sought to give what was essentially expert evidence on how emails operated, while quoting an unidentified expert.[352]It seems to me that all I can take from the arguments which I have described above are(i) that the relevant metadata was available to the Claimant to investigate, as from 16th August 2024, and(ii) that, which I understood to be common ground, the metadata showed the date of the creation of the October 2020 Email as 2nd October 2020. I cannot, to state the obvious, take account of what unidentified experts may or may not have said about the possibility of manipulating this date.[353]Turning to the evidence of the witnesses, it is obviously important that both the Second Defendant and the Fifth Defendant have given evidence in relation to the October 2020 Email which has turned out to be wrong. In cross examination the Second Defendant sought to excuse his evidence that the October 2020 Email had been sent on the basis that the email had come up in the disclosure process and he had wrongly assumed that it had been sent. The Second Defendant was unable to recall why, on his evidence, the October 2020 Email had been drafted, but not sent. For his part, the Fifth Defendant maintained that the October 2020 Email had been sent to him. The Claimant’s counsel submitted that this was because he had not realised that his co-Defendants had changed their story from the fabrication that the October 2020 Email was sent, to the fabrication that it was an unsent draft.[354]Ultimately however, I find it difficult to accept that the fabrication exercise alleged to have been carried out by the Second to Sixth Defendants has actually taken place. I say this for two reasons.[355]First, and most important, it seems to me that there is a problem with the Fourth Forgery Allegation of a similar kind to that which confronts the other Forgery Allegations. The problem is that it is hard to see why the Second Defendant, if he was engaged in a course of dishonesty, should have acted as he did. If the Second Defendant did create the October 2020 Email for the purposes of the Proceedings, why did he do so in a way which was clearly going to unravel? The October 2020 Email was not addressed to the Claimant alone. It was also addressed a large number of other persons, some of whom were not, or were not necessarily, in the camp of the Second to Sixth Defendants. By way of example one of the addressees of the email was Ms Wachera. Another addressee was Mr Beighton, the professional director of companies in the Isle of Man Group. If therefore the Second Defendant was trying to create the fiction that the October 2020 Email was sent, he was at obvious risk of this being contradicted, not just by the Claimant but also by other addressees of the email.[356]Second, there are other relevant matters. It appears to be common ground that the metadata for the October 2020 Email show the date of its creation as 2nd October 2020. There is no evidence to support the Claimant’s hypothesis that this date was the result of manipulation. So far as the evidence of the Fifth Defendant was concerned, it was clearly wrong. Nevertheless, the impression I formed of this part of the Fifth Defendant’s evidence was that he was telling me what he believed to be the position, however wrong he may have been. I did not form the impression that he was engaged in an exercise to support a fabrication. Equally, while the Second Defendant struggled to explain how he had come to give evidence that the October 2020 Email had been sent, I can see, and I am prepared to accept, that the Second Defendant made a genuine error in assuming that the October 2020 Email, when it was turned up in the disclosure process, had been sent.[357]Why the October 2020 Email was marked as having been sent remains a mystery. It is not however a mystery which, in my view, justifies a finding that the October 2020 Email was a subsequent creation by the Second Defendant. The position might have been different if the Claimant had, in good time before the Trial, made the investigations which, so it appears, were not made until after the Trial had begun, but this is speculation on my part.[358]Looking at the evidence in the round, it seems to me that the explanation of the October 2020 Email which best fits with the evidence is that the Second Defendant wrote the email as a draft, on 2nd October 2020 but, for reasons which remain unknown, did not send the email, either inadvertently or deliberately, so that the email remained as an unsent draft.[359]Drawing together all of the above discussion, I conclude and find that the Fourth Forgery Allegation has not been established. I find that the October 2020 Email was drafted by the Second Defendant on 2nd October 2020, but was not sent.[360]In overall conclusion, I find that the Claimant has failed to establish all four of the Forgery Allegations.

The Pre-emption Rights Claim – the statutory framework

[361]In the Pre-emption Rights Claim, the Claimant alleges breaches of Sections 561 and 562. So far as Section 561 is concerned, it is only necessary to set out subsection (1), which contains the restriction on the allotment of equity securities. The definition of equity securities, in Section 560(1), includes ordinary shares in the relevant company. The restriction in Section 561(1) is in the following terms:
“(1) A company must not allot equity securities to a person on any terms unless— (a) it has made an offer to each person who holds ordinary shares in the company to allot to him on the same or more favourable terms a proportion of those securities that is as nearly as practicable equal to the proportion in nominal value held by him of the ordinary share capital of the company, and (b) the period during which any such offer may be accepted has expired or the company has received notice of the acceptance or refusal of every offer so made.” (a) it has made an offer to each person who holds ordinary shares in the company to allot to him on the same or more favourable terms a proportion of those securities that is as nearly as practicable equal to the proportion in nominal value held by him of the ordinary share capital of the company, and (b) the period during which any such offer may be accepted has expired or the company has received notice of the acceptance or refusal of every offer so made.”
[362]Section 562 then deals with the communication of the pre-emption offers required by Section 561(1). For present purposes subsections (1) to (5) of Section 562 are relevant:
“(1) This section has effect as to the manner in which offers required by section 561 are to be made to holders of a company's shares. (2) The offer may be made in hard copy or electronic form. (3) If the holder— (a) has no registered address in the United Kingdom or an EEA State and has not given to the company an address in the United Kingdom or an EEA State for the service of notices on him, or (b) is the holder of a share warrant, the offer may be made by causing it, or a notice specifying where a copy of it can be obtained or inspected, to be published in the Gazette. (4) The offer must state a period during which it may be accepted and the offer shall not be withdrawn before the end of that period. (5) The period must be a period of at least 14 days beginning— (a) in the case of an offer made in hard copy form, with the date on which the offer is sent or supplied; (b) in the case of an offer made in electronic form, with the date on which the offer is sent; (c) in the case of an offer made by publication in the Gazette, with the date of publication.” (a) has no registered address in the United Kingdom or an EEA State and has not given to the company an address in the United Kingdom or an EEA State for the service of notices on him, or (b) is the holder of a share warrant, the offer may be made by causing it, or a notice specifying where a copy of it can be obtained or inspected, to be published in the Gazette. (a) in the case of an offer made in hard copy form, with the date on which the offer is sent or supplied; (b) in the case of an offer made in electronic form, with the date on which the offer is sent; (c) in the case of an offer made by publication in the Gazette, with the date of publication.”
[363]Section 1143 provides for the provisions of Sections 1144-1148 and Schedules 4 and 5 to have effect for the purposes of any provisions of the Companies Acts which authorise or require documents or information to be sent or supplied by or to a company. These provisions thus apply to the requirements for the communication of a pre-emption offer in Section 562. In the present case, the relevant provisions are to be found in Parts 2 and 3 of Schedule 5. Part 2 deals with the communications in hard copy form. Paragraphs 2, 3 and 4(1) of Part 2 provide as follows:
“2 A document or information is validly sent or supplied by a company if it is sent or supplied in hard copy form in accordance with this Part of this Schedule. 3 (1) A document or information in hard copy form must be— (a) handed to the intended recipient, or (b) sent or supplied by hand or by post to an address (in accordance with paragraph 4). (2) For the purposes of this Schedule, a person sends a document or information by post if he posts a prepaid envelope containing the document or information. 4 (1) A document or information in hard copy form may be sent or supplied by the company— (a) to an address specified for the purpose by the intended recipient; (b) to a company at its registered office; (c) to a person in his capacity as a member of the company at his address as shown in the company's register of members; (d) to a person in his capacity as a director of the company at his address as shown in the company's register of directors; (e) to an address to which any provision of the Companies Acts authorises the document or information to be sent or supplied.” (1) A document or information in hard copy form must be— (a) handed to the intended recipient, or (b) sent or supplied by hand or by post to an address (in accordance with paragraph 4). (2) For the purposes of this Schedule, a person sends a document or information by post if he posts a prepaid envelope containing the document or information. (1) A document or information in hard copy form may be sent or supplied by the company— (a) to an address specified for the purpose by the intended recipient; (b) to a company at its registered office; (c) to a person in his capacity as a member of the company at his address as shown in the company's register of members; (d) to a person in his capacity as a director of the company at his address as shown in the company's register of directors; (e) to an address to which any provision of the Companies Acts authorises the document or information to be sent or supplied.”
[364]Part 3 of Schedule 5 deals with communications in electronic form. By paragraph 5 of Part 3, a document is validly sent or supplied by a company if it is sent in electronic form in accordance with Part 3. In the present case, the relevant paragraphs of Part 3 are paragraphs 6 and 7. The Claimant’s case is that the First Offer Letter was not sent to him in accordance with the requirements of either of these paragraphs:
“6. A document or information may only be sent or supplied by a company in electronic form— (a) to a person who has agreed (generally or specifically) that the document or information may be sent or supplied in that form (and has not revoked that agreement), or (b) to a company that is deemed to have so agreed by a provision in the Companies Acts. 7. (1) Where the document or information is sent or supplied by electronic means, it may only be sent or supplied to an address— (a) specified for the purpose by the intended recipient (generally or specifically), or (b) where the intended recipient is a company, deemed by a provision of the Companies Acts to have been so specified. (2) Where the document or information is sent or supplied in electronic form by hand or by post, it must be— (a) handed to the intended recipient, or (b) sent or supplied to an address to which it could be validly sent if it were in hard copy form.” (a) to a person who has agreed (generally or specifically) that the document or information may be sent or supplied in that form (and has not revoked that agreement), or (b) to a company that is deemed to have so agreed by a provision in the Companies Acts. (1) Where the document or information is sent or supplied by electronic means, it may only be sent or supplied to an address— (a) specified for the purpose by the intended recipient (generally or specifically), or (b) where the intended recipient is a company, deemed by a provision of the Companies Acts to have been so specified. (2) Where the document or information is sent or supplied in electronic form by hand or by post, it must be— (a) handed to the intended recipient, or (b) sent or supplied to an address to which it could be validly sent if it were in hard copy form.”
[365]The remedy for a breach of Section 561 or 562 is provided by Section 563:
“(1) This section applies where there is a contravention of— section 561 (existing shareholders' right of pre-emption), or section 562 (communication of pre-emption offers to shareholders). (2) The company and every officer of it who knowingly authorised or permitted the contravention are jointly and severally liable to compensate any person to whom an offer should have been made in accordance with those provisions for any loss, damage, costs or expenses which the person has sustained or incurred by reason of the contravention. (3) No proceedings to recover any such loss, damage, costs or expenses shall be commenced after the expiration of two years— (a) from the delivery to the registrar of companies of the return of allotment, or (b) where equity securities other than shares are granted, from the date of the grant.” section 561 (existing shareholders' right of pre-emption), or section 562 (communication of pre-emption offers to shareholders). (a) from the delivery to the registrar of companies of the return of allotment, or (b) where equity securities other than shares are granted, from the date of the grant.”
[366]The primary liability for breach of Section 561 or 562 is imposed upon the relevant company; meaning the Company in the present case. Officers of the Company Directors, meaning in the present case the Second and Third Defendants as directors of the Company, are not liable for such a breach unless it can be demonstrated that they knowingly authorised or permitted the breach.[367]The remedy provided for by Section 563, where a breach of Section 561 or 562 is established, is compensation. Compensation can be recovered “for any loss, damage, costs or expenses which the person has sustained or incurred by reason of the contravention.”.[368]It will also be noted that there is only a short limitation period of two years applicable to a claim for compensation pursuant to Section 563. It is not argued in the present case that the Pre-emption Rights Claim was made out of time, but I draw attention to this limitation period because it featured in the arguments over the quantification and recoverability of compensation pursuant to Section 563.

Was there an IT strategy or policy?

[369]Strictly speaking, this question belongs in the next section of this judgment, where I consider the First Breach Issue; that is to say whether the Company was in breach of Section 561 and/or Section 562 in relation to the First Allotment. Given however the amount of evidence and argument which I heard on the questions of whether the IT Strategy existed and, if so, in what form, I find it convenient to address this question first, and separately.[370]I find that the IT Strategy did not exist. I find that no formal IT strategy or policy was announced or agreed at the March 2019 Meetings. My reasons for these findings are as follows.[371]First, there is the absence of any documents evidencing the IT Strategy. If the IT Strategy had been presented and agreed at any point in the March 2019 Meetings, I would have expected to see some documentary evidence of this. There are two aspects to this. First, I would have expected to see some evidence of the IT Strategy itself. If a new IT strategy was being introduced, as a formal strategy, I would have expected it to be in writing. It would be odd, in my judgment, if a strategy of this kind was not put into written form. No document has however been produced as the statement of the IT Strategy. Second, I would have expected to see some written evidence of the IT Strategy being formulated and agreed at the March 2019 Meetings.[372]In this context it is worth quoting what the Third Defendant said in her first witness statement in this context, at paragraphs 18-20:
“18. At the 2019 AGM, the SGHL directors presented a new IT policy to the shareholders as part of their wider presentation. The Sportpesa Group was, initially, not big in financial or personnel terms – its success (and size) increased over time. As a result, many shareholders had been using their personal email addresses to communicate about company matters since the date of their investment. This included Mr Ndungu, who had at times communicated using his GNorth and Mobicom email addresses. 19. The board believed that it was important, given the growth of the Sportpesa Group, that it should operate as a proper corporation, not a family business, and use official email addresses. We also thought it was critical that company communications should be secure, private and compliant with GDPR rules for processing and protecting data, particularly because, by that time, the Sportpesa Group had moved to Office 365-based email systems. 20. As a result, at the 2019 AGM, the SGHL board and shareholders collectively discussed and decided that, from then on, emails and communications regarding company business would be sent only using Sportpesa email addresses, not company email addresses; and that we would co-ordinate with Sportpesa's IT team to ensure that any shareholders who did not have a company email address (or one that was not working) would be given one (or their access would be restored). I do not recall there being any objections from the shareholders, including Mr Ndungu, to the new IT policy.”
[373]If the new IT strategy was this critical, I would have expected to see some documentary record of its formulation and agreement. In particular, I would have expected to see reference to the new IT strategy in the agenda for one or more of the meetings held over the three days of the March 2019 Meetings, and some reference to the new IT strategy in minutes of those meetings.[374]There is no reference to an IT strategy in the slides which the Third Defendant prepared for the March 2019 Meetings. There is a reference to “Sportpesa IT” in the slide for the March 2019 Company AGM, but it is clear from the context that this was a reference to Sportpesa Italy. Equally, although the Third Defendant appears never to have completed the task of preparing the minutes of the March 2019 Company AGM, none of the three draft versions of the minutes of that meeting, which I have mentioned above, have any reference to a new IT strategy.[375]In his evidence in his first witness statement, the Fourth Defendant made reference to receiving “large, hard copy files before the 2019 AGM, which included information around the importance of the new IT policy”. No such files were produced in evidence. When this evidence was put to the Third Defendant in cross examination, she commenced by saying that files were prepared in advance of the March 2019 Meetings. The Third Defendant then quickly retreated to saying that she had no recollection, when asked further about the information in these files and what they had contained. The Third Defendant then agreed that she had not circulated information about an IT policy to shareholders in electronic or hard copy form, in advance of the March 2019 Meetings, and agreed that a slide for the important new IT policy to which she had referred in her written evidence “was not in the pack”.[376]It seems to me likely, and I so find, that some sort of information pack would have been prepared and distributed to attendees, prior to the March 2019 Meetings. There is no reliable evidence that any such information pack contained information about an IT strategy or policy and I find, consistent with that which the Third Defendant conceded in cross examination, that no such information was contained in the information pack. I do not regard the Fourth Defendant’s evidence as reliable in this respect, and I reject it. If the intention had been to present a new IT strategy for agreement at the March 2019 Meetings, I would have expected the same to have been mentioned somewhere in the documents circulated to attendees in advance of or at the March 2019 Meetings.[377]Second there is the evidence of the witnesses. Neither the Claimant nor Ms Wachera recalled any discussion or agreement on a new IT strategy. The Claimant also gave evidence, in his second witness statement, that the subject of IT only came up informally, over lunch during the March 2019 Company AGM. The Claimant gave evidence that the attendees were seated at tables of four and that he mentioned, in passing and casually to those on his table, that he did not have a Sportpesa.com address. In cross examination the Claimant added the information that one of those seated with him was the Third Defendant. The Claimant maintained this evidence in cross examination, and maintained his denial that there was any general discussion or agreement on an IT strategy. The Third Defendant gave evidence in her first witness statement that the Claimant informed “us”, which I took to be a reference to all those attending the March 2019 Company AGM, that he was unable to access the Sportpesa.com Address and had been unable to do so for six months. The Claimant could not recall making this latter statement. I found the Claimant’s evidence to be convincing on this particular topic. I find that the Claimant did inform those at his table over lunch, of problems with the Sportpesa.com Address. I find that one of those on the Claimant’s table was the Third Defendant. I find that the Claimant did not inform the meeting generally of these problems. I also accept however the evidence of the Third Defendant that the Claimant did make the statement that he was unable to access the Sportpesa.com Address and had not been able to do so for the previous six months. I find that this statement was made to the Claimant’s table, and thus to the Third Defendant, but not to the meeting generally.[378]Given that I accept, subject to the additional statement which I have found to have been made by the Claimant, the evidence of the Claimant in relation to what was said about IT, at least so far as he was involved, at the March 2019 Meetings, I regard it as significant that the Claimant had no recollection of any general discussion or agreement on an IT Strategy at the March 2019 Meetings.[379]I also regard it as significant that Mr Karauri did not give evidence of such discussion or agreement, although he attended the March 2019 Meetings. I regard this as significant because, as a general rule, I found Mr Karauri’s evidence to be more reliable than the evidence of the Second to Fifth Defendants.[380]So far as the evidence of the Second to Fifth Defendants and Mr Macharia was concerned, this evidence was inconsistent and, when probed in cross examination, began to fall apart. No one was able to be specific about what had been presented or agreed and, in cross examination, the evidence became more vague and more confused. I have already made reference to the evidence of the Fifth Defendant on the IT Strategy. The only evidence in this context which I found to be reliable was the Third Defendant’s recollection that the Claimant stated that he had been unable to access the Sportpesa.com Address for the previous six months, although this is subject to the qualification that I have found that this statement was made to the Third Defendant, not to the March 2019 Company AGM generally.[381]It is not necessary to go through the evidence of each of the Second to Fifth Defendants and Mr Macharia. The problems with the evidence in this context are, in my view, well- illustrated by the cross examination of Mr Macharia. Mr Macharia gave the following evidence at, respectively, paragraph 16 of his first witness statement and paragraph 20 of his second witness statement:
“16. I recall that on 11-13 March 2019 the shareholders of SGHL had a meeting in the UK (the “2019 AGM). At the 2019 AGM we discussed a policy that, for the purposes of security, communications to or from SGHL should only be sent through our official @sportpesa.com email addresses. My recollection was that it was a friendly conversation between the attendees of the 2019 AGM. Mr Ndungu attended the 2019 AGM and I do not recall him having any reaction to the new communications policy.” “20. It is alleged in AWM1 that there was no mention of an “IT Strategy” at the 2019 AGM. This is incorrect. I clearly recall there being discussion of a new policy that SGHL would communicate with all shareholders using their Sportpesa email addresses.”
[382]In cross examination, Mr Macharia said this, at [T9/62/16-63/21]:
“Q. So your evidence is that there was a discussion – in fact , what you say is it was a friendly conversation −− between the attendees of the 2019 AGM. Mr Ndungu says there was no such discussion and he's right, isn't he? A. No, no, we had I think two/three days in Liverpool, so obviously there are discussions going on. Q. It wasn't discussed in the main part of the meetings, was it? A. No, no, it was, it was discussed, yes. MR JUSTICE EDWIN JOHNSON: Was this what you describe as an agenda item at the meeting, Mr Macharia? Are you saying it was an item on the agenda for discussion? A. I mean, we had meetings of all the groups for the three days that we were in Liverpool. MR JUSTICE EDWIN JOHNSON: Yes. A. So there are discussions about various things and I do recall that it was agreed in that meeting that, going forward, we need to be using, as far as the global group is concerned, the global company is concerned we need to use official email addresses. MR JUSTICE EDWIN JOHNSON: So you are saying not only was there discussion but there was agreement? A. There was some sort of −− I mean there was no fight about it, so a policy is brought in that it is recommended that, you know, we need, for security reasons, we need to be using our official email addresses. Some of us, of course, had email addresses by that time, so it was really never about, should it happen or should it not happen, this is the way we need to move forward and there was no objection. So let me say there was no objection in that issue.”

Q. It wasn't discussed in the main part of the meetings, was it?

[383]As I have said, in overall terms I was satisfied that Mr Macharia was an honest witness. I found his answers to the questions about the IT Strategy to be less than coherent. This was surprising, given that Mr Macharia is an experienced lawyer. Mr Macharia also seemed to me to be less than comfortable in this part of his evidence. To my mind this reflected the fact that Mr Macharia(i) was not able to say more, by way of his own honest recollection, than that there was some discussion of IT at the March 2019 Meetings, but(ii) was conscious of the fact that his own evidence was falling short of the case which the Second to Sixth Defendants were seeking to present in relation to the IT Strategy.[384]In summary, and so far as the evidence of the Second to Fifth Defendants and Mr Macharia on the IT Strategy was concerned, I accept the submission of the Claimant’s counsel that this evidence was contradictory. I accept that where several witnesses give evidence about the same event, it is not unusual to find inconsistencies in the accounts given by each witness. Indeed, this variation in recollection, which is not unusual when several persons are recalling the same event or conversation, may be good evidence that the event or conversation occurred. In my view the evidence of Mr Macharia and the Second to Fifth Defendants in relation to the IT Strategy does not fall into this category. In my view the way in which this evidence came apart in cross examination, and the inconsistencies in this evidence, simply demonstrate that the evidence is unreliable.[385]I therefore find that the IT Strategy was neither discussed or agreed at the March 2019 Meetings. I find that the IT Strategy never existed, as a formal strategy or policy of the kind alleged by the Second to Sixth Defendants.[386]This however is not the end of my analysis. What I am prepared to accept is that there was some discussion of the topic of IT either at or at the time of the March 2019 Meetings. What I do not accept is that it was discussion which involved the agreement of all present to any particular strategy or policy or decision. I make these findings essentially for two reasons.[387]First, all of the Second to Fifth Defendants and Mr Macharia have given evidence which, at the least, is evidence that IT was discussed at the March 2019 Meetings. I would not consider it surprising if IT was discussed at some point or points in the course of the March 2019 Meetings, nor if some sort of informal decision was made that particular action should be taken. I do not think that the evidence of the IT Strategy was a straight fabrication on the part of any of the witnesses. In my judgment what has happened in this context is that what was, at most, some discussion of IT at the March 2019 Meetings has been exaggerated and elevated in the relevant evidence to the announcement and agreement upon the IT Strategy. The same applies to the Fourth Defendant’s evidence, which I have rejected, that hard copy files were distributed in advance of the March 2019 Meetings which included information about an IT strategy or policy. I find that this exaggeration and elevation has happened because the issue of whether the Sportpesa.com Address could and should have been used for communications with the Claimant emerged as an important issue at an early stage in this dispute. This has, in turn, coloured the evidence of the Second to Fifth Defendants. This is, unfortunately, what can often happen to the evidence of witnesses in acrimonious disputes of this kind. As will be seen, there are numerous other instances in the present case of the evidence being affected in this way. In the present context, one can test what I have found to have occurred by going back to the evidence of Mr Macharia, which I have quoted above. In cross examination, the reality was that Mr Macharia was effectively only able to give evidence, which I accept, that there was some discussion of IT at the March 2019 Meetings.[388]Second, there is an important piece of evidence in the form of the email sent by the Third Defendant on 19th March 2019 to Mr Musau and Mr Karauri. I have quoted from this email in the relevant narrative section of this judgment. The Third Defendant explained that “Following our AGM last week we need to set up sportpesa.com emails for our shareholders as per the list below:”. It seems to me, and I so find, that the Third Defendant could only have written this email, in these terms, if there had been some discussion of IT at the March 2019 Meetings and some kind of decision, although not one to which the Claimant was a party, that all shareholders in the Company should have functioning Sportpesa.com email addresses. The email also refers to the Claimant having the Sportpesa.com Address, and having complained that the address had not been working for the last six months. This is consistent with my finding that the Claimant did state to the Third Defendant, at the March 2019 Company AGM, that he had been unable to access the Sportpesa.com Address for the previous six months.[389]In summary, my findings on the question of whether there was an IT strategy or policy are as follows:(1) I find that the IT Strategy was neither discussed or agreed at the March 2019 Meetings.(2) I find that the IT Strategy never existed, as a formal strategy or policy of the kind alleged by the Second to Sixth Defendants.(3) I find that there was some discussion of IT at the March 2019 Meetings, but it was not discussion which involved the agreement of all present to any particular strategy or policy or decision on IT.(4) I find that one outcome of that discussion was a decision, although not a decision to which the Claimant was a party or to which the Claimant himself agreed, that all shareholders in the Company should have functioning Sportpesa.com email addresses for use in the Business.(5) I find that the Claimant did inform certain persons (including the Third Defendant), at the March 2019 Company AGM, that he had been unable to access the Sportpesa.com Address for the previous six months, which was why, in the Third Defendant’s email of 19th March 2019, the Claimant came to be listed as a person in respect of whom action was required in relation to his Sportpesa.com Address.

The First Breach Issue

[390]Section 561, as it applied in the present case, provided that the Company was not entitled to make the First Allotment without making an offer to each of its shareholders which complied with the requirements of subsection (1) of Section561. The Company was therefore required to make such an offer to the Claimant prior to the First Allotment. That offer had to be made in compliance with the requirements of Section562. The Company sought to comply with these obligations by the First Offer. The Company sought to communicate the First Offer to the Claimant by the First Offer Letter, by sending the same in hard copy by DHL courier, and by emailing the same to the Sportpesa.com Address.[391]It is clear that the First Offer was not validly communicated to the Claimant by the DHL courier. There are three reasons for this, the first two of which are related. First, the DHL envelope was not addressed to the address for the Claimant as shown in the Company’s register of members, as required by paragraph 4(1)(c) of Schedule 5. The address on the DHL envelope was wrong, for the reasons identified in the relevant narrative section of this judgment. Second, the incorrect address might not have mattered if the First Offer Letter had found its way to the Claimant by the DHL courier. This did not, however, happen. The Claimant’s evidence was that he did not receive the hard copy of the First Offer Letter, in the DHL envelope, until 21st November 2019, which was well after the deadline for acceptance of the First Offer by the Claimant (1st November 2019) had expired. I accept the Claimant’s evidence in this respect. I find that the Claimant did not receive the hard copy of the First Offer Letter until 21st November 2019 and did not receive the First Offer Letter by any other means prior to that date. Third, the sending of the First Offer Letter to the Claimant could never have achieved compliance with the requirements of Section 562 in any event. Subsections (4) and (5) of Section 562 require that an offer must state a period during which it may be accepted, and that the period must be one of at least 14 days beginning, in the case of an offer made in hard copy form, with the date on which the offer is sent or supplied. If it is assumed that the Defendants’ counsel were right in their argument that the period of 14 days ran from the date when the First Offer Letter was sent, and not from the date when it was received, the evidence is that the First Offer Letter was despatched by DHL on, at the earliest, 21st October 2019. Given that the deadline for acceptance of the First Offer was 1st November 2019, the required period of 14 days for acceptance of the First Offer could not have been achieved, even if the DHL envelope had been correctly addressed.[392]Some attempt was made by the Second to Sixth Defendants, in the evidence, to blame the Claimant for the non-receipt of the First Offer Letter by the DHL courier. While this seems to me to be irrelevant to the analysis in my previous paragraph, I consider that I should, in fairness to the Claimant, set out my findings on this question. I find that the Claimant was not to blame for the fact that he did not receive the hard copy of the First Offer Letter until 21st November 2019. It was clearly not the Claimant’s fault that the DHL envelope was wrongly addressed. There was no evidence from DHL to confirm the claim made by the Second to Sixth Defendants that DHL made multiple attempts to contact the Claimant, without success. I accept the Claimant’s evidence that there were no missed calls or voicemail messages from DHL on his mobile phone and, to his knowledge, no attempt by DHL to call him. If DHL did attempt to contact the Claimant directly, I find that that attempt or those attempts were unsuccessful, through no fault of the Claimant.[393]This leaves the sending of the First Offer Letter, in electronic form, to the Sportpesa.com Address. If the Company is to demonstrate that the First Offer Letter was validly communicated to the Claimant, it can only do so in reliance upon the sending of the First Offer Letter to the Sportpesa.com Address.[394]The Company was entitled, by virtue of subsection (2) of Section 562 and paragraph 5 of Schedule 5, to make the First Offer in electronic form, but it could only do so if it complied with requirements of Part 3 of Schedule 5. In the present case the relevant requirements in Part 3 of Schedule 5 were those contained in paragraphs 6 and 7 of Schedule 5, which I have set out above. By virtue of paragraph 6 (“Paragraph 6”) and paragraph 7 (“Paragraph 7”), two requirements have to be satisfied. First it must be demonstrated that the Claimant agreed, either generally or specifically, that the First Offer Letter could be sent to him in electronic form. Second, it must be demonstrated that the First Offer Letter was sent or supplied to an electronic address which the Claimant had specified for this purpose, either generally or specifically.[395]It is important to note that there is a change of language between Paragraph 6 and Paragraph 7. By Paragraph 6, in order to be entitled to send a document or information to a person by electronic means, the relevant company must be able to point to a general or specific agreement on the part of the relevant person that the document or information may be sent to them by electronic means. Given that there is reference to general or specific agreement, it seems clear to me that the agreement relied upon does not necessarily have to relate to the particular document or information which is being sent or supplied by the company. A general agreement that documents or information may be sent or supplied by electronic means will suffice.[396]Turning to Paragraph 7, this paragraph deals with the address to which a document or information may be sent or supplied to a person who is party to an agreement of the kind referred to in Paragraph 6. The only address to which such a document or information can be sent is one specified for that purpose by the intended recipient. What is required is a specification by such person. The specification may be general or specific. Given the reference to a specification which is general or specific, it again seems clear to me that the specification relied upon does not necessarily have to relate to the particular document or information which is being sent or supplied by the company. A general specification of an address to which documents may be sent or supplied by electronic means will suffice.[397]There is one other point which I should make on the difference in language between Paragraph 6 and Paragraph 7. In my view a specification, for the purposes of Paragraph 7, does not have to be constituted by an agreement. I can see that such a specification may be contained in an agreement, which may be a free-standing agreement or an agreement which is also said to do duty for the purposes of Paragraph 6. It seems to me however that a specification, whether general or specific, can also be constituted by a unilateral act on the part of the person receiving the relevant document or information. In other words, a Paragraph 7 specification may be contained in an agreement, but does not have to be contained in an agreement and may be a unilateral act on the part of the receiving person.[398]The submissions on this part of the case did not draw any clear distinction between an agreement for the purposes of Paragraph 6 and a specification for the purposes of Paragraph 7. The submissions were directed to the question of whether the Claimant had agreed to receive documents and information at the Sportpesa.com Address, without much distinction between Paragraph 6 and Paragraph 7. In fairness to the Defendants, I can see a reason for this. Most of the focus of this part of the Defendants’ case was on the alleged agreement to the IT Strategy at the March 2019 Meetings. As I understood this case, the agreement to which the Claimant was alleged to have been a party was said to constitute the required agreement for the purposes of Paragraph 6 and to constitute the required specification for the purposes of Paragraph 7. As I have explained, I see no reason in principle, why the alleged agreement could not do double duty in this way, assuming that the alleged agreement was actually made. As such, the distinction between Paragraph 6 and Paragraph 7 was less important than it might have been in another case.[399]Returning to the Defendants’ case, my understanding of that case is that it is not contended that there was any specific agreement on the part of the Claimant either that the First Offer Letter could be sent to him electronically or that the First Offer Letter, if it could be sent electronically, could be sent to the Sportpesa.com Address. My understanding is that this also means that it is not contended by the Defendants that the Claimant made any distinct specification of the Sportpesa.com Address as the address to which the First Offer Letter could be sent to him electronically.[400]This then leaves the questions of(i) whether there was any general agreement on the part of the Claimant that documents or information could be sent to him electronically by the Company and, assuming such general agreement,(ii) whether there was any general specification, either by such general agreement or otherwise, of the Sportpesa.com Address as the address to which documents or information could be sent to him electronically by the Company.[401]No case law was cited to me on the question of what is required to constitute general agreement, within the meaning of Paragraph 6. In his closing submissions Mr McWilliams submitted that there was no particular formality required for such an agreement. One simply needed something constituting an agreement. By way of illustration of his point, and given the reliance of the Defendants on what was said to have been agreed at the March 2019 Meetings, Mr McWilliams submitted that agreement on the use of sportpesa.com addresses for communications was not something which needed to be the subject of a formal resolution. All that was required was agreement. Mr McWilliams explained the requirement for agreement in these terms [T14/76]:
“So one doesn't need to have a formal resolution, one simply needs to find that there was a discussion at which Mr Ndungu was present where someone says, "Going forward, communications should go to and from sportpesa.com email addresses", everyone present saying, "Yes, that's a very good idea. We should do that. Yes, I agree". You don't need a resolution, you just need agreement.”
[402]I accept these submissions. I accept that no particular formality is required for a general agreement falling within the terms of Paragraph 6. All that one requires is an agreement between, as it seems to me, the relevant company and the relevant recipient of the document or information. It seems to me that the same applies to a specification for the purposes of Paragraph 7. No particular formality is required. One simply needs an act of specification, whether constituted by an agreement between the relevant recipient and the relevant company or by unilateral action on the part of the relevant recipient.[403]One other point seems to me to follow from this analysis of Paragraphs 6 and 7. I can see, in principle, that a general agreement or specification could, for the purposes of Paragraph 6 or Paragraph 7, arise out of a course of conduct. It seems to me that the consistent use of electronic means, for the purposes of a company sending documents or information to a particular person, could, depending upon the circumstances, constitute a general agreement to the sending or supplying of documents or information to that person for the purposes of Paragraph 6. It also seems to me that the consistent use of a particular email address, for the purposes of the relevant company sending or supplying documents or information to that person, could, depending upon the circumstances, constitute a general specification of that email address for the purposes of Paragraph 7.[404]The Defendants relied, principally, upon their case that the IT Strategy was agreed upon at the March 2019 Meetings. I have already set out my findings in that respect. I have found that, although there was discussion of IT at the March 2019 Meetings, there was no agreement on the IT Strategy and that the IT Strategy never existed. For ease of reference, I repeat the findings which I have made in respect of the discussion of IT at the March 2019 Meetings:(1) There was some discussion of IT at the March 2019 Meetings, but it was not discussion which involved the agreement of all present to any particular strategy or policy or decision.(2) One outcome of that discussion was a decision, although not a decision to which the Claimant was a party or to which the Claimant himself agreed, that all shareholders in the Company should have functioning Sportpesa.com email addresses.(3) The Claimant did inform certain persons (including the Third Defendant), at the March 2019 Company AGM, that he had been unable to access the Sportpesa.com Address for the previous six months, which was why, in the Third Defendant’s email of 19th March 2019, the Claimant came to be listed as a person in respect of whom action was required in relation to his Sportpesa.com address.[405]On the basis of these findings, I cannot see that there was anything said or done by the Claimant at the March 2019 Meetings which would be capable of qualifying as the general agreement or general specification required by, respectively, Paragraph 6 and Paragraph 7.[406]The Second to Sixth Defendants, whose submissions on the question of breach of Sections 561 and 562 were adopted by Mr Head for the Company, argued that the Claimant had, by other means, also made a general specification of the Sportpesa.com Address as an address at which the Company could send him communications. In this context the Defendants relied upon an email sent to various parties, including the Third, Fourth and Fifth Defendants, on 15th March 2016. The recipients of the email were addressed as “Dear Directors”. The email itself stated “Please find here above my sportpesa official email address”. This email predated however the formation of the Company. In these circumstances, I find it difficult to see how it could constitute a general specification to the Company that the Company could send documents or information to the Claimant at the Sportpesa.com Address. Independent of this, I do not think that the language of the email was sufficient to amount to a general specification of the kind referred to in Paragraph 7.[407]It was not entirely clear to me whether the email of 15th March 2016 was also being relied upon, for the purposes of Paragraph 6, as evidence of a general agreement between the Claimant and the Company that documents or information could be sent to the Claimant electronically. I assume that this was the intention of the Defendants. It seems to me, however, that the email was not sufficient to satisfy the requirements of Paragraph 6, any more than it could satisfy the requirements of Paragraph 7. My reasons for saying this are essentially the same as those I have given in my previous paragraph. The Company did not exist when this email was sent. Independent of this, I do not think that the language of the email was sufficient to give rise to a general agreement of the kind referred to in Paragraph 6.[408]The Defendants also relied upon the Claimant’s previous use of the Sportpesa.com Address in 2018. This evidence in this respect was, however, thin. There is an email sent by the Third Defendant to the Claimant at the Sportpesa.com Address on 12th June 2018, explaining that a police and credit report was required for the submission of the UK licence, which I take to be a reference to some kind of gaming licence. There is then an email sent by the Third Defendant to the Claimant at the GNorth Address, on the next day (13th June 2018), attaching the email sent to the Sportpesa.com Address the previous day. There is also an email sent by the Third Defendant to the Claimant, at the GNorth Address, concerning board meetings of the companies in the Isle of Man Group. This email, which was sent on 2nd March 2019, stated as follows:
“Good morning Paul, I checked with Equiom and they confirmed that they have sent you the BOD invitation to your sportpesa mail , they have confirmed they have used your sportpesa mail for all last year correspondences to you Attached you can find the BOD minutes , all companies board packs will be sent in separate emails .”
[409]This email appears to have been written further to an exchange between Emma Jones, the Third Defendant’s assistant, and Maxine Griffiths, a senior administrator with Equiom, provider of corporate services to the Isle of Man Group. By an email sent on 28th February 2019, Ms Griffiths reported to Ms Jones in the following terms:
“I believe we have 3 email addresses on file for Mr. Ndungu. I have received communication from Mr. Ndungu from all 3 email address, the latest being the attached I think. I recall that Tina had advised me when putting together this board pack in January 2018, that I was to use this email address going forward. I hope that no inconvenience has been caused by using the Sportpesa emai address at all?”
Please advise which email address is the best for Mr. Ndungu and I shall update our records to reflect that we use this one only going forward when required.”[410]The email exchanges with Equiom demonstrate that Equiom was using the Sportpesa.com Address in 2018, for the purposes of communicating with the Claimant. In overall terms however, I do not think that such use as there was of the Sportpesa.com Address, either in 2018 or at any other time, is sufficient to support the case that, by such use, the Claimant made either a general agreement that Company documents could be sent or supplied to him electronically or made to the Company a general specification of the Sportpesa.com Address as the address to which Company documents could be sent or supplied to him electronically.[411]The Defendants sought to rely upon evidence given by the Claimant in cross examination as demonstrating that the Claimant’s real complaint was as to the email address to which the First Offer Letter was sent, as opposed to the First Offer Letter having been sent electronically. In cross examination, the Claimant made the following concession [T4/84/5-13]:
“Q. Yes, your case is that if the notices had been sent to what you say is your normal address, your gnorth address −− A. Yeah. Q. −− that would have been acceptable? A. I would have received it. Q. Yes, and it would have been acceptable for you, wouldn't it? A. Yeah, it would have been acceptable if I had received it in the email that I had specified and I was aware of. Yeah, if it was sent on my gnorth.”
Q. −− that would have been acceptable?

Q. Yes, and it would have been acceptable for you, wouldn't it?

[412]It seems to me that this evidence is important, in the context of Paragraph 6. So far as Paragraph 6 is concerned, what the Defendants have to demonstrate is that the Claimant had made a general agreement with the Company that the Company could send documents or information to him electronically. The evidence of the Claimant which I have quoted above is not direct evidence that any such general agreement was made, but it does seem to me to reflect what was clear on the evidence in this case; namely that documents and information in relation to the Business, including documents and information in relation to the Company, were sent to the Claimant by electronic means, without objection from the Claimant to this means of communication. Indeed, electronic means appear to have been the routine method of communication within the Business, including in relation to the Company. I have already expressed the view that, in theory, a general agreement for the purposes of Paragraph 6 could be made by a course of conduct. In my view, and I so find, the evidence in this case does establish that the Claimant can, by the method of his communications with the Company, be treated as having reached a general agreement with the Company that information and communications could be sent to him by the Company by electronic means, thereby satisfying the requirements of Paragraph 6, in relation to the sending of the First Offer Letter to the Claimant by electronic means.[413]The problem with this finding is that it does not go far enough, for the purposes of the Defendants’ case. The Defendants must also demonstrate that the Claimant had made a general specification of the Sportpesa.com Address as the address at which the Company could send or supply documents or information to the Claimant. The evidence of the Claimant which I have quoted above is to the contrary effect. Equally, I do not think the evidence discloses a course of conduct or anything near a course of conduct capable of constituting a specification of the Sportpesa.com Address for the purposes of Paragraph 7. Indeed, I did not understand the Defendants to suggest that an argument of this kind was available to them.[414]Drawing together all of the above analysis, I conclude that the Company did have the right to send the First Offer Letter to the Claimant in electronic form, because the requirements of Paragraph 6 were satisfied. The First Offer Letter was however sent to an address which had not been specified by the Claimant for the purpose of receiving communications from the Company. As such, the requirements of Paragraph 7 were not satisfied. It follows that the Company was not entitled to send the First Offer Letter to the Claimant in electronic form, at the Sportpesa.com Address, because there was not compliance with all the relevant requirements in Part 3 of Schedule 5. Given the failure of delivery of the hard copy of the First Offer Letter by the DHL courier, the consequence is that the Company failed to send the First Offer Letter to the Claimant by a valid means of communication, which in turn means that the Company failed to make an offer to the Claimant, in relation to the First Allotment, in compliance with its statutory duty under Section 561.[415]It seems to me that it is neither relevant nor necessary, in the above analysis, to consider two factual questions, which were the subject of a certain amount of evidence. The first question is whether the Claimant did actually receive the First Offer Letter at the Sportpesa.com Address on 17th October 2019, even if he was unable to access the Sportpesa.com Address on that date and thereby failed to read the First Offer Letter. The second question is whether, if the First Offer Letter did reach the Sportpesa.com Address on 17th October 2019, but was not read by the Claimant, this was the Claimant’s fault. It seems to me that if the Company was not entitled to use the Sportpesa.com Address for the purposes of communicating the First Offer to the Claimant, these factual questions are not relevant. For the sake of completeness however I will briefly address these two factual questions.[416]First, and by reference to the expert evidence of Mr Beckett, which I accept, I find that the First Offer Letter did reach the Sportpesa.com Address on 17th October 2019, and should have been accessible to the Claimant. I note however that Mr Beckett is not able to say when the Claimant accessed the First Offer Letter. The Claimant’s evidence, as I have already recorded, was that he did not see the First Offer Letter until he obtained the hard copy of the First Offer Letter from DHL, on 21st November 2019. I accept this evidence, which is consistent with the Claimant’s email to the Third Defendant sent on 25th November 2019. The Claimant’s evidence was also that he did not obtain access to his Sportpesa.com email account until 25th November 2019, when he obtained access with the assistance of Mr Dawson, using the ke.Sportpesa Address. I accept that the Claimant did only obtain this access on 25th November 2019, in the absence of any evidence directly to contradict this evidence.[417]This leaves the question of why it was that the Claimant was unable to access the Sportpesa.com Address until 25th November 2019, and whether this was the fault of the Claimant. I do not consider that the evidence permits me to provide a definitive answer to this question. As I have explained, it also seems to me that it is not necessary to make a finding on this question. Mr Beckett was not able to provide a definitive answer to this question, for the reasons explained in his report. The most that Mr Beckett can say, as I understood his evidence, is that he would have expected the Sportpesa.com Address to be accessible to the Claimant when the First Offer Letter was sent. I have also not overlooked the evidence of Mr Newcombe-Jones, in his witness statement, which was not challenged. Mr Newcombe-Jones suggests in his witness statement that the Claimant’s problems in accessing his O365 account were caused only by the Claimant not knowing his password. This is however a statement of Mr Newcombe-Jones’ belief, as opposed to something he is able to say as a matter of his knowledge. I also note that Mr Newcombe-Jones was dealing with the Claimant at a later point in time, in December 2021 and not, as I understand the evidence of Mr Newcombe-Jones, in 2019.[418]Given the state of the evidence, and assuming that this is a relevant question, I do not feel able to find that it was the fault of the Claimant that he could not access the Sportpesa.com Address until 25th November 2019. I do find that the Sportpesa.com Address should have been accessible to the Claimant, when the First Offer Letter was sent but, as I have said, I do not feel able to say that it was the fault of the Claimant that he did not see the First Offer Letter.[419]There is however one other conclusion which can, in my view, be drawn from the evidence in this context. The evidence does not seem to me to demonstrate that the Claimant’s difficulties in accessing the Sportpesa.com Address were matters of which the Defendants or any of them should have been aware, at the time when the First Offer Letter was sent to the Sportpesa.com Address and prior to the involvement of Mr Dawson at the end of November 2019. This is a matter to which I will need to return, when I come to the Joint Liability Issue.[420]Returning to the First Breach Issue, and although the point may be said not to matter, it seems to me that I should identify whether the consequence of my conclusions is that the Company was in breach of Section 561 or Section 562, or both. The pleaded case of the Claimant is that the failure validly to communicate the First Offer Letter to the Claimant constituted a breach of Section 561 and Section 562. I was initially doubtful that this is the correct analysis. The statutory duty to make a pre-emption offer, in valid form and by valid means, is contained in Section 561. Section 562 prescribes various requirements which an offer must satisfy in order to be a valid offer for the purposes of Section 561. The provisions of Schedule 5 do the same. In these circumstances it initially seemed to me that where there is a failure to make a valid offer pursuant to Section 561, because the relevant provisions of Section 562 and/or Schedule 5 are not satisfied, the breach which occurs is a breach of the statutory duty in Section 561.[421]As against that however, I note that Section 563 makes reference to contraventions of Section 561 and Section 562. This appears to mean that if an offer fails to comply with a particular requirement set out in Section 562, there is a breach of Section 562. It seems to me that I must respect this statutory language. In the present case, and for the reasons which I have identified, the First Offer Letter did fail to state a period for acceptance of the First Offer which complied with Section 562(5), in addition to being an offer which failed to comply with Section 561(1). Equally, there was a failure validly to communicate the First Offer to the Claimant, either by electronic means or in hard copy, in compliance with the requirements of Section 562 and Schedule 5. I therefore conclude, so far as this may be relevant, that the consequence of my analysis and conclusions set out above is that the Company breached its statutory duty in Section 561, in relation to the First Allotment, and also breached Section 562 in relation to the First Allotment.[422]My reasoning above renders it unnecessary to consider the Claimant’s fallback argument, if I had decided that the Company could validly make the First Offer by sending the First Offer Letter to the Claimant at the Sportpesa.com Address. On this hypothesis, the Claimant argued that there was still a failure of compliance with Section 562 because, by virtue of Section 1147(3), the First Offer Letter would have been deemed to have been received by the Claimant 48 hours after it was sent, so that the date of receipt would have been 19th October 2019. This date of receipt would have been too late to accommodate the required period of 14 days within which the First Offer could be accepted; bearing in mind that the deadline for acceptance of the First Offer was 1st November 2019. This was disputed by the Defendants, who contended that Section 1147(3) did not apply because the required period of 14 days specified in Section 562(5)(b), in respect of an offer sent in electronic form, is expressed to begin with the date on which the relevant offer is sent.[423]Although I do not strictly have to consider the Claimant’s fallback argument, it was fully argued before me and I will briefly set out what my view would have been if the fallback argument had arisen directly for consideration. In my view the argument is misconceived. I say this because, as counsel for the Second to Sixth Defendants explained in their closing submissions, the period of 14 days in Section 562(5)(b), being the sub-paragraph which applies to offers made in electronic form, begins with the date on which the offer is sent, not the date when the email was received or was deemed to have been received.[424]I agree with counsel for the Second to Sixth Defendants that Section 1147(3) performs a different function. This subsection is concerned with fixing the time at which a document or information, which has been sent or supplied by electronic means and has been properly addressed, “is deemed to have been received”. The deemed time is 48 hours after the document or information was sent. As such, it seems to me that Section 1147(3) applies where reference is made in the Act to the receipt of a document or information sent or supplied by a company by electronic means. I do not see that it can apply to a provision such as Section 562(5)(b) which specifies a period of time beginning “with the date on which the offer is sent”. It seems to me that Section 1147(3) would be relevant if the period of time was specified to begin with the date of receipt of the offer, but this is not what Section 562(5)(b) says. Accordingly, I conclude that Section 1147(3) does not apply to the sending of the First Offer Letter by electronic means.[425]If this conclusion is applied to the facts of the present case, and if it is assumed that the Company was entitled to send the First Offer Letter, by electronic means, to the Sportpesa.com Address, the consequences are as follows. The email attaching the First Offer Letter was sent on 17th October 2019. There is no evidence that the email was returned as undeliverable, and I find that the First Offer Letter was sent on 17th October 2025. The Claimant’s evidence was that he was not aware of this email when it was sent, because he could not access the Sportpesa.com Address, but this does not mean that the email and its attachment were not sent. In these circumstances, so the Defendants contend, the required period of 14 days within which the First Offer could be accepted, began on 17th October 2019 when the email attaching the First Offer Letter was sent. Measured from this date, and bearing in mind the deadline for acceptance of 1st November 2019, I conclude that the Defendants are correct in saying that there was a period of 14 days within which the First Offer could be accepted.[426]I have however already decided that the Company was not entitled to send the First Offer Letter to the Claimant at the Sportpesa.com Address.[427]Drawing together all of the above analysis, my conclusion is that the Company was in breach of Section 561 and Section 562 in relation to the First Allotment. I will use the expression “the First Breach” to refer the Company’s breach or (which may be said to be the correct analysis) breaches of Sections 561 and 562.

The Second Breach Issue (as conceded by the Defendants)

[428]As I have explained, the Defendants conceded, in closing submissions, that there was a breach of Section 561 in relation to the Second Allotment. The reason for this was that the First Allotment had not taken effect at the time when the Second Offer Letter was circulated, on 20th December 2019. This was because, as at that date, the shareholders of the Company who had subscribed in response to the First Capital Raise had not yet paid the subscription price and had not then acquired the unconditional right to be included in the Company’s register of members in respect of the shares allotted to them by the First Allotment. In these circumstances, it was common ground between the parties that the Company was obliged to make the Second Offer by reference to the shareholdings held by the members of the Company prior to the First Allotment. This, in turn, meant that the shares offered to the Claimant by the Second Offer should have been offered on the basis that the Claimant was entitled to subscribe for a proportion of the shares to be allotted by the Second Allotment which was equal to his then 17% shareholding in the Company. Instead, and in breach of Section 561, the Second Offer Letter only offered the Claimant new shares on the basis that he had a 2.83% shareholding in the Company. The Second Offer Letter thus proceeded on the incorrect basis that, as a matter of law, the Claimant’s shareholding in the Company had already been diluted to a 2.83% shareholding by the First Allotment.[429]Given the Defendants’ concession, the answer to the Second Breach Issue is that the Company was in breach of Section 561 in relation to the Second Allotment because it failed, by the Second Offer Letter, to offer the Claimant a proportion of the new shares equal to the proportion of what was then his shareholding in the Company. I will refer to this breach as “the Second Breach”.

The Joint Liability Issue

[430]I was not referred to any direct authority on what is meant by knowingly authorising or permitting a contravention of Section 56l and/or Section 562, within the meaning of Section 563(2). As I understood the position however, there was no dispute between the parties as to the applicable legal principles.[431]I was referred to the following statement of the law, in Securities Law (2nd Edition - 2013), at 28-45:
““Knowingly contravening” in securities law has been held to connote contravening a statutory prohibition with knowledge of the facts upon which the contravention depends.85 Thus, it is suggested, inadvertent commission of the contravention—for example, by allotting equity securities in ignorance either of this obligation or in ignorance of the obligation not having been performed—would not attract liability to pay compensation. The difficulty then surrounds the word “knowingly”
. In relation to fiduciary law in general, and the law on knowing receipt of property in relation to a breach of fiduciary duty specifically, the word “knowingly” has been defined to mean acting with actual knowledge, or wilfully and recklessly failing to make the inquiries which an honest person would have made, or wilfully shutting one’s eyes to the obvious.86 Thus, a person may be held not to have acted knowingly if he had genuinely forgotten what they were supposed to have done;87 although it is suggested that such an analysis would be particularly unfortunate in relation to the obligation of directors under the allotment provisions of the Companies Act whereby incompetence in forgetting one’s legal duties would excuse one from the liabilities to compensate shareholders which are otherwise required by securities law.”[432]The case referred to at footnote 85 in the above extract is Burton v Bevan [1908] 2 Ch 240. The case referred to at footnotes 86 and 87 is Re Montagu’s Settlements [1987] Ch 264. Re Montagu’s Settlements was concerned with the question of whether trustees were in breach of their fiduciary duties in releasing assets of a trust to a beneficiary and whether the beneficiary received those assets as constructive trustee. In his judgment, one of the questions which Sir Robert Megarry V-C had to consider was what constituted knowledge, in the context of knowing receipt of trust property. The Vice-Chancellor answered this question in the following terms, at 285E:
“(4) For this purpose, knowledge is not confined to actual knowledge, but includes at least knowledge of types (ii) and (iii) in the Baden case [1983] B.C.L.C. 325, 407, i.e. actual knowledge that would have been acquired but for shutting one's eyes to the obvious, or wilfully and recklessly failing to make such inquiries as a reasonable and honest man would make; for in such cases there is a want of probity which justifies imposing a constructive trust.”
[433]Although this statement was made in a different legal context, the parties were agreed that the same threefold classification of knowledge should be applied in the present case; that is to say(i) actual knowledge,(ii) actual knowledge which would have been acquired but for shutting one’s eyes to the obvious,(iii) wilfully and recklessly failing to make the inquiries which an honest person would have made. In terms of the content of the knowledge which an officer of a company must have, in order to be held liable pursuant to Section 563(2), it seems to me that this must be knowledge of the facts on which the relevant contravention depends; see the extract from Securities Law quoted above.[434]With the above legal guidance in mind, I turn to the question of whether the Second Defendant and/or the Third Defendant, as directors of the Company, authorised or permitted the contraventions of Sections 561 and 562 which I have identified above, with actual or imputed knowledge of the facts which gave rise to those contraventions.[435]The Claimant’s counsel helpfully summarised, in their written closing submissions, the grounds on which they submitted that the Second and Third Defendants had knowingly authorised or permitted the First Breach:(1) Both the Second Defendant and the Third Defendant knew that the emails attaching the First Offer Letter had been sent on 17th October 2019 and gave only until 1st November 2019 for acceptance.(2) Both the Second Defendant and the Third Defendant knew that the DHL letters had been sent after 17th October 2019 and would not arrive for some time.(3) Both the Second Defendant and the Third Defendant knew that the Claimant had not agreed that the Company could send or supply documents subject to the Act by email and had not specified the Sportpesa.com Address for this purpose.(4) Both the Second Defendant and the Third Defendant knew that there had not been any new IT policy.(5) Both the Second Defendant and the Third Defendant knew that the Third Defendant was going to send the Claimant the First Offer Letter by email to the Sportpesa.com Address and the Sportpesa.ke Address. This formed part of the Alleged Scheme.[436]I will deal with each of these grounds in turn.[437]I do not follow the first of the above grounds. The Third Defendant plainly knew that the email attaching the First Offer Letter was sent to the Claimant on 17th October 2019, because she sent the email. Equally, the Third Defendant would have been aware of the content of the First Offer Letter. The same seems to me to apply to the Second Defendant. The draft of the offer letters in relation to the Capital Raise had been sent to her and the Second Defendant on 14th October 2019 by Ms Grigorian-Coates, with a request for any comments. The draft offer letter was recorded as approved at the October 2019 Company Board Meeting, which the Second and Third Defendants attended. Equally, the Second Defendant received the offer letter himself, as a shareholder in the Company, from which he would have been aware that the offer letters had been sent out on 17th October 2019, and would have been aware of the content of the equivalent offer letter sent to the Claimant; namely, the First Offer Letter.[438]What I do not see is how any of this assists the Claimant. The First Breach did not occur because the First Offer Letter was sent on 17th October 2019 with a deadline for acceptance on 1st November 2019. The First Breach occurred because the First Offer Letter was sent to an address which, if my conclusion on this question is correct, had not been specified by the Claimant within the meaning of Paragraph 7.[439]Turning to the second ground, the Third Defendant plainly knew that the First Offer Letter was not sent for despatch by DHL until after 17th October 2019. Ms Jones emailed the Third Defendant on 21st October 2019 to say that she had, that day, “sorted the DHL consignments to the Shareholders.”. It is not clear to me, on the evidence, whether the Second Defendant was aware, at the time, that the First Offer Letter was not sent for despatch by DHL until after 17th October 2019. I cannot see any basis on which it can be said that the Second and Third Defendants knew that the First Offer Letter would not arrive by DHL for some time, at the time when the First Offer Letter was sent for despatch by DHL. The only way in which I can see that such a finding would be justified would be if the Third Defendant knew of the incorrect address on the DHL envelope, at the time when she sent the First Offer Letter to Ms Jones. The Third Defendant’s evidence was that she addressed the inner envelope containing the First Offer Letter with the correct address for the Claimant, which she then passed to Ms Jones to deal with. This is confirmed by Ms Jones’ email of 21st October 2019. Given that the wrong address appeared on the outer courier (I assume this means DHL) envelope, it seems clear to me, and I so find, that the Third Defendant was not responsible for the mistake which had been made, and did not know of the mistake. Whether the mistake was made by Ms Jones or DHL or by someone else does not matter for these purposes. The Third Defendant was not responsible for the mistake and did not know of the mistake. So far as the Second Defendant is concerned, there is no evidence that he was either responsible for the mistake or knew of the mistake.[440]I do not see how the second ground assists the Claimant even if, contrary to my findings in my previous paragraph, the Second and Third Defendants had all the knowledge alleged in the second ground. I say this for two reasons. First, the First Breach did not occur by reason of the delayed sending of the First Offer Letter by DHL. The First Breach occurred because the First Offer Letter was sent electronically to an address which had not been specified for the purposes of Paragraph 7. In these circumstances I am doubtful that it can be said that the knowledge alleged in the second ground was capable of constituting knowledge of the facts giving rise the contraventions of Sections 561 and 562 which comprised the First Breach. Second, and even if am wrong in what I have just said, it seems to me that the knowledge which the Second and Third Defendants would have had to have possessed in this respect needed to go further than knowledge that the First Offer Letter was sent after 17th October 2019 and would not arrive for some time. It seems to me that the knowledge which the Second and Third Defendants would have had to have possessed would have been knowledge that the First Offer Letter, by reason of its late sending and by reason of the alleged likely delay in it reaching the Claimant, would not give the Claimant the required period of 14 days within which to accept the First Offer. It has not been established on the evidence that the knowledge of the Second and Third Defendants went this far.[441]Turning to the third ground, this seems to me to be misconceived. The ground seems to me to assume knowledge of the operation of Paragraphs 6 and 7, and knowledge that the Claimant had not entered into the required general agreement or the required specification. Without this knowledge, I have difficulty in understanding how the Second Defendant or the Third Defendant could have known that the Claimant had not agreed that the Company could send or supply documents by electronic means and had not specified the Sportpesa.com Address as his address for that purpose. As it happens, I have found that the Claimant had made a general agreement with the Company, on the basis of his conduct, that the Company could send him documents by electronic means, from which it follows that the Second and Third Defendants could not, on any view of the matter, have had knowledge that such an agreement had not been made. Even if, however, I am wrong in this finding, the evidence does not establish that either the Second Defendant or the Third Defendant had the knowledge of the operation of the Paragraph 6 and Paragraph 7 which would have been required in order for either of them to know that the requirements of Paragraphs 6 and 7 had not been met in relation to the sending of the First Offer Letter to the Sportpesa.com Address.[442]The fourth ground is that both the Second and the Third Defendants knew that there had not been any new IT policy. Again, this seems to me to be misconceived. In order to explain why this is so, I find it convenient to take the fourth ground with the fifth ground. The fifth ground is that both the Second Defendant and the Third Defendant knew that the Third Defendant was going to send the First Offer Letter to the Claimant by email, to the Sportpesa.com Address, and that this formed part of the scheme to dilute the Claimant, which I am referring to as the Alleged Scheme.[443]The starting point is that I have already found that the IT Strategy was neither discussed or agreed at the March 2019 Meeting, and never existed as a formal strategy or policy of the kind alleged by the Second to Sixth Defendants. I have, however, also made the following additional findings, which I repeat again, for ease of reference:(1) There was some discussion of IT at the March 2019 Meeting, but it was not discussion which involved the agreement of all present to any particular strategy or policy or decision on IT.(2) One outcome of that discussion was a decision, although not a decision to which the Claimant was a party or to which the Claimant himself agreed, that all shareholders in the Company should have functioning Sportpesa.com email addresses for use in relation to the Business.(3) The Claimant did inform certain persons (including the Third Defendant), at the March 2019 Company AGM, that he had been unable to access the Sportpesa.com Address for the previous six months, which was why, in the Third Defendant’s email of 19th March 2019, the Claimant came to be listed as a person in respect of whom action was required in relation to his Sportpesa.com address.[444]It follows, and I so find, that when the Third Defendant sent her email of 19th March 2019 to Mr Musau and Mr Karauri, she did so pursuant to the discussion of IT which had taken place at the March 2019 Meetings.[445]The email of 19th March 2019 also discloses that the Third Defendant was aware the Claimant had a sportpesa.com address which, according to the Claimant, had not been working for the previous six months. This, in turn, explains why the Third Defendant emailed the Claimant on 21st March 2019 to put him in touch with Mr Dawson, for the purposes of the Claimant obtaining access to the Sportpesa.com Address. The Third Defendant sent her email of 21st March 2019 to the Claimant at the GNorth Address, but that was understandable, given the complaint of the Claimant that he had not been able to access the Sportpesa.com Address. When Mr Dawson then emailed the Claimant with instructions on how to access the Sportpesa.com Address, the Third Defendant was aware of this because the email was copied to her.[446]There is no evidence that the Claimant replied to Mr Dawson’s email, or contacted Mr Dawson and/or the Third Defendant to say that his problems with obtaining access to the Sportpesa.com Address were continuing. In his second witness statement, the Claimant said that he did not respond to Mr Dawson because he did not need to log into the sportpesa.ke account. In cross examination the Claimant changed his evidence and said that he did have a long conversation with Mr Dawson, which lasted two hours and in the course of which Mr Dawson tried, without success, to give the Claimant access to his emails using the Sportpesa.ke Address. I am unable to accept the Claimant’s evidence of this conversation. The evidence came out in cross examination and contradicted the evidence in the Claimant’s second witness statement. It was apparent that the Claimant had persuaded himself that the conversation had taken place, in order to make good what was apparent as an omission damaging to his case. I find that the Claimant’s alleged conversation with Mr Dawson never took place.[447]The net result of all this, as I find, is that the Third Defendant had no reason to think, as from 21st March 2019, that the Claimant did not have access to the Sportpesa.com Address. If there had been a continuing problem, it seems to me that the Third Defendant would have expected the Claimant to communicate the problem to her, either directly or by Mr Dawson.[448]The next question is whether anything happened to change this state of knowledge between 21st March 2019 and 17th October 2019. In my view the answer to this question is no. I say this for the following reasons.[449]There is the email which was sent by Microsoft Outlook to Ms Jones on 16th August 2019, advising Ms Jones that a message which she had sent to the Sportpesa.com Address could not be delivered. This message was however received at the time when the Business was conducting an email migration whereby the Business migrated the sportpesa.com domain from the Pevans Tenant to a new tenant, Sportsoft. This was a second email migration carried out by the Business. The first email migration was carried out in July 2017, and has been referred to earlier in this judgment. Both email migrations are described by Mr Beckett in his expert report. In re-examination, Mr Beckett explained that the failure of delivery would have been caused by the second email migration, because it would have taken the IT team of the Business a couple of days to set up and configure the required forwarders. The existence of these temporary problems is also confirmed by an exchange of emails involving the IT team and the Second and Third Defendants in the second half of August 2019.[450]The Third Defendant gave evidence that she was not made aware of the non-delivery email sent to Ms Jones on 16th August 2019. There is no evidence that the Third Defendant was made aware of the non-delivery. The Third Defendant was informed that the second email migration was complete on 20th August 2019. Given the Third Defendant’s awareness of the temporary disruption caused to emails by the second email migration, the Third Defendant would not have had any reason to think that the non-delivery on 16th August 2019 was any more than a temporary problem, even if she had been told about the non-delivery. In any event, I accept the Third Defendant’s evidence in this respect. I find that she was not informed by Ms Jones of the non-delivery on 16th August 2019.[451]Moving forward to October 2019 the Claimant’s counsel, in their written closing submissions, subjected the communications between the Third Defendant and the Second Defendant and Ms Grigorian-Coates, in relation to the First Capital Raise, the October 2019 Company Board Meeting and the sending of the First Offer Letter, to very close and detailed analysis. For present purposes it is not necessary to go through the detail of this analysis, to which I will need to return later in this judgment. What is relevant for present purposes is that the Third Defendant gave notice of the October 2019 Company Board Meeting to the Claimant by email, sent to the Sportpesa.com Address and the Sportpesa.ke Address. The Third Defendant received a non-delivery report, in relation to the Sportpesa.ke Address, almost immediately after sending the email. As I have recorded in the relevant narrative section of this judgment, the Third Defendant accepted in cross examination that she had been informed, on 27th September 2019, that emails sent to sportpesa.co.ke addresses would not get through, as a result of the Domain Suspension. The Third Defendant also accepted that when she sent the email giving notice of the October 2019 Company Board Meeting, she knew that the Sportpesa.ke Address would not work.[452]There was however no non-delivery report in relation to the notice sent to the Sportpesa.com Address. On the available evidence therefore, I cannot see what reason the Third Defendant would have had, on 17th October 2019, for thinking that the First Offer Letter would not get through to the Claimant at the Sportpesa.com Address. In summary, and going back the question which I posed above, I cannot see that anything happened to change the state of the Third Defendant’s knowledge, in relation to the Sportpesa.com Address, between 21st March 2019 and 17th October 2019.[453]As I understood the Claimant’s case on this part of the Alleged Scheme, as articulated in closing submissions, the Third Defendant sent the First Offer Letter to the Sportpesa.com Address and by DHL courier in the hope (shared with the Second Defendant) that it would not reach the Claimant. Mr Macpherson submitted in closing submissions that this was not a change of case, but a “subtlety” of the case. I can see Mr Macpherson’s point, in the sense that the relevant element of the Claimant’s pleaded case, at paragraph 88.2 of the Amended Particulars of Claim, is in the following terms:
“88.2. the Co-Directors deliberately procured that the First Offer Letter was not sent to an address specified by the Claimant and/or was sent to addresses at which they would not or might not reach the Claimant;”
[454]I can see that the allegation that the Second and Third Defendants deliberately procured that the First Offer Letter was sent to addresses at which it “might” not reach the Claimant is capable of encompassing the Claimant’s case that the Second and Third Defendants sent the First Offer Letter to the Sportpesa.com Address and the Sportpesa.ke Address and by DHL courier in the hope that it would not reach the Claimant. It seems to me that this case is a confinement of the case pleaded in paragraph 88.2 of the Amended Particulars of Claim, rather than a new case. Nevertheless, I do not think that even this confined case is made out on the evidence. I have already dealt with the sending of the First Offer Letter by DHL courier. The findings which I have made do not support the case that the Third Defendant sent the First Offer Letter by DHL courier in the hope that it would not arrive. The Third Defendant had no reason to think that this would occur. The First Offer Letter was, inevitably, going to arrive too late to achieve compliance with the requirements of Section 562, when sent by DHL courier, but, as I have already found, it has not been established on the evidence that the knowledge of the Second and Third Defendants went this far, when the Third Defendant arranged for the First Offer Letter to be sent by DHL courier.[455]This leaves the sending of the First Offer Letter to the Sportpesa.com Address. I have already touched on the question of the state of knowledge of the Second and Third Defendants in this context, in certain of the findings which I have made in my analysis of the First Breach Issue. I do not accept that the Second Defendant or the Third Defendant had the hope that the First Offer Letter would not reach the Claimant. I say this for two principal reasons.[456]First, the Claimant’s case in this respect seems to me to assume a binary position in relation to the IT Strategy. Either the IT Strategy was agreed, in which case the Second and Third Defendants had good reason to use the Sportpesa.com Address to send the First Offer Letter to the Claimant, or the IT Strategy is a fiction, in which case the Second and Third Defendants had no reason to use the Sportpesa.com Address. On my findings, however, the position is not binary in this way. IT was discussed and was the subject of a decision at the March 2019 Meetings. The Third Defendant then followed this up in March 2019, both generally and in relation to the complaint made by the Claimant that he had not been able to access the Sportpesa.com Address. I have found that the Third Defendant had no reason to think, as from 21st March 2019, that the Claimant did not have access to the Sportpesa.com Address. In all these circumstances, I do not find it surprising that the Third Defendant sent the First Offer Letter by email to the Sportpesa.com Address, but did not also send the First Offer Letter to the Claimant’s personal email address; that is to say the GNorth Address. Nor can I see any basis on which the Third Defendant might have hoped that the Claimant would not receive the First Offer Letter. I have largely concentrated on the knowledge of the Third Defendant in this analysis of the evidence, but there is no evidence that the knowledge of the Second Defendant, who was working closely with the Third Defendant at this time, differed in a material fashion from the knowledge of the Third Defendant.[457]Second, the hypothesis that the Second and Third Defendants used the Sportpesa.com Address in the hope that the First Offer Letter would not reach the Claimant does not fit in with the evidence more generally. There is the fact that the First Offer Letter was also sent by DHL courier to an address (the address on the inner envelope) which, so far as the Second and Third Defendants were concerned, was the correct address. Independent of this, there is the larger picture. It is clear from the evidence that a serious rift had opened up between the shareholders in the Business, in relation to Pevans. I have already made reference to this rift in the relevant narrative section of this judgment. It is also clear from the evidence this serious rift was in existence by early 2019, and continued to exist thereafter. I will need to come back to this rift in more detail in the next section of this judgment. For present purposes however the relevant point is that the Claimant and Ms Wachera were on the same side and, it is clear from the evidence, were known by all to be on the same side in relation to this rift. Given that the offer of shares in relation to the First Capital Raise was made to all the shareholders in the Company, including Ms Wachera, it is difficult to see on what basis the Second and Third Defendants could have entertained the hope that the Claimant would not come to hear of the First Offer if the First Offer Letter did not reach him at the Sportpesa.com Address. There was an obvious risk or prospect that Ms Wachera would make contact with the Claimant when she received her offer letter, and give the game away by making the Claimant aware that he should have received his own offer letter. In fact this is what actually happened, albeit not immediately. The Claimant’s initial complaint was made in the email he sent to the Company shareholders on 11th November 2019. In that email the Claimant said that he had been informed by Ms Wachera, that morning, that letters had been sent to the Company and SP Holdings. The terms of the email are somewhat confusing, but the email was headed “Preemptive Rights”, from which I infer that the Claimant had been informed by Ms Wachera, that morning, of the offer letters sent out pursuant to the First Capital Raise. Indeed, in cross examination the Claimant gave evidence that he first knew about the First Capital Raise when he spoke to Ms Wachera on the telephone on 11th November 2019. I accept this evidence, in the sense that I accept that it was only in this conversation that the Claimant was first made aware that the First Capital Raise had been implemented, by the sending out of offer letters. It seems to me that it would have been apparent to both the Second Defendant and the Third Defendant, at the time when the offer letters were sent out, that if, for some reason, the Claimant did not receive his offer letter, it was reasonable to assume that he would find out about the offers from Ms Wachera, and fairly quickly.[458]I will need to return to the Alleged Scheme later in this judgment. For present purposes however I am concerned with that part of the Alleged Scheme which comprises the allegation that the Third Defendant sent the First Offer Letter to the Sportpesa.com Address and by DHL courier in the hope (shared with the Second Defendant) that it would not reach the Claimant. For the reasons which I have given, I find that neither the Second Defendant or the Third Defendant had any such hope or, for the avoidance of doubt, any intention that the First Offer Letter would not or might not reach the Claimant. Whatever other hopes or intentions the Second and Third Defendants may or may not have had, I find that they did not, deliberately or otherwise, procure either(i) that the First Offer Letter was not sent to an address specified by the Claimant, or(ii) that the First Offer Letter was sent to an address or addresses at which it would not or might not reach the Claimant.[459]I can now return to the fourth and fifth grounds upon which it is alleged that the Second and Third Defendants knowingly authorised or permitted the First Breach. So far as the fourth ground is concerned, knowledge of the presence or absence of a new IT policy seems to me to be misconceived. The Third Defendant knew that IT had been discussed at the March 2019 Meetings and that a decision had been made that all shareholders in the Company should have functioning Sportpesa.com email addresses for use in relation to the Business. I find that the Second Defendant had the same knowledge. In these circumstances the allegation that the Second and Third Defendants knew that there had not been any new IT policy seems to me to be misconceived. The Second and Third Defendants did know that sportpesa.com addresses were supposed to be used for Company business. This seems to me to render the absence of a formal new IT policy, and the alleged knowledge of the Second and Third Defendants that such a formal new IT policy did not exist, effectively irrelevant. Any such knowledge did not mean that the Second and Third Defendants had knowledge of the facts which gave rise to the First Breach.[460]Turning to the fifth ground, I accept that both the Second Defendant and the Third Defendant did know that the Third Defendant was going to send the First Offer Letter to the Sportpesa.com Address. If however the Alleged Scheme existed, the sending of the First Offer Letter to the Sportpesa.com Address was not part of the Alleged Scheme in the sense that the Second and Third Defendants thereby knew or intended or hoped that the First Offer Letter would not or might not reach the Claimant. As such, the knowledge of the Second and Third Defendants that the First Offer Letter was to be sent to the Sportpesa.com Address was not knowledge of the facts which gave rise to the First Breach.[461]I also come back to the additional point that the First Breach occurred because the Claimant had not specified the Sportpesa.com Address as an address to which the Company could send him documents or information by electronic means. The essential fact which gave rise to the First Breach was the absence of specification of an email address by the Claimant. I have very considerable difficulty in understanding how any of the grounds relied upon by the Claimant establish that the Second Defendant or the Third Defendant knew of this absence of specification, in the sense of being aware of the same. As such, and independent of the analysis set out above, I have very considerable difficulty in understanding how any of the grounds establish that the Second Defendant or the Third Defendant knew or had imputed knowledge of the facts which gave rise to the First Breach.[462]In summary, I find that the First Breach was an inadvertent breach or breaches of Section 561 and Section 562, on the part of the Company.[463]Turning to the Second Breach, the Claimant’s written closing submissions did not, so far as I can see, address the question of knowing authorisation or permission in relation to the Second Breach. This was however made good in the Claimant’s Reply Submissions, where it is submitted that the Second and Third Defendants knowingly authorised or permitted the sending of the Second Offer Letter prior to the shares being allotted by the First Allotment. I have not however been referred to any evidence that either the Second Defendant or the Third Defendant was aware of the fact that the First Allotment had not been completed at the time when the Second Offer Letter was sent out. It is clear from the evidence, and I so find, that the Second Breach was simply an inadvertent breach of Section 561, on the part of the Company.[464]Drawing together all of the above analysis, I conclude that neither the Second Defendant nor the Third Defendant knowingly authorised or permitted the First Breach or the Second Breach. Accordingly, neither the Second Defendant nor the Third Defendant can be liable in respect of the First Breach or the Second Breach. Liability attaches only to the Company.

The Causation Issue

[465]I should start my analysis of the Causation Issue by setting out some preliminary points.[466]Strictly speaking, the Causation Issue falls to be answered after I have considered whether the pleaded case of the Claimant permits the making of a claim for compensation pursuant to Section 563; that is to say after I have considered the Pleading Issue. The Pleading Issue arises because it is the Defendants’ case that the Claimant has failed to plead a case in causation; that is to say a case that the Claimant has been caused loss and damage by reason of the contraventions of Section 561 and Section 562 alleged by the Claimant. The Defendants say that causation is an essential element of a claim for compensation pursuant to Section 563, and that causation must be pleaded and proved. The Defendants say that causation has not been pleaded, and that the attempts by the Claimant to remedy this gap in the pleaded case, by the Amendment Applications, have failed. The Defendants say that this has the consequence that the Pre-emption Rights Claim must fail or, as the Company contends by the Strike Out Application, should be struck out. It follows that, if the Defendants are right in their pleading argument, the Pre-emption Rights Claim fails at that stage, and the substantive question of whether the Claimant can prove causation, which I am referring to as the Causation Issue, does not arise.[467]As however I explained in the Second Amendment Judgment, there was evidence on the Causation Issue which was adduced in the course of the Trial. The Claimant was cross examined by Mr Riley on the questions of whether he could and would have subscribed in response to the Capital Raises, if the contraventions of Sections 561 and 562 alleged by the Claimant had not occurred. In re-examination, Ms Cochrane took the opportunity to adduce further evidence from the Claimant on the Causation Issue. The Claimant also introduced certain documents in the course of the Trial, which were said to support his case that he could and would have subscribed but for the contraventions of Sections 561 and 562.[468]The case which the Claimant was seeking to put, by the evidence referred to in my previous paragraph and as I understood that case, was that the Claimant could and would have subscribed in response to the First Capital Raise and the Second Capital Raise, if the First Breach and the Second Breach had not occurred. As such, so the Claimant says, the Claimant lost the opportunity to subscribe to these Capital Raises and the Third Capital Raise, and thereby suffered loss. I will refer to this case on causation, which the Claimant sought to pursue on the basis of the evidence to which I have just referred, as “the Trial Causation Case”. The substantive question of whether the Claimant has proved the Trial Causation Case is the question which I am referring to as the Causation Issue. As I have explained, there are also the separate questions of whether this case has been pleaded and, if not, what the consequences are. These separate questions constitute what I am referring to as the Pleading Issue.[469]As part of their arguments in support of the Second Amendment Application, the Claimants’ counsel submitted that the landscape had changed from the time of the First Amendment Application, because evidence had been put before the Court in the course of the Trial, as summarised in my previous paragraph, in relation to the Causation Issue. I was not persuaded that this justified the Second Amendment Application, for the reasons which I explained in the Second Amendment Judgment. In this context, and although this is dealt with in the Second Amendment Judgment, I should make it clear that I did not accept the argument that the cross examination of the Claimant on the Causation Issue by Mr Riley, and the absence of objection to that cross examination by Mr Head, constituted a material change of circumstances which justified the Second Amendment Application. As I explained in the Second Amendment Judgment, I could not see how Mr Riley could have avoided going into the Causation Issue, given that the Causation Issue was relevant to the Section 994 Claim and given the Claimant’s primary case that the Trial Causation Case was sufficiently pleaded, without the need for amendment to introduce the Causation Case. Equally, I could not see how Mr Head could legitimately have objected to the cross examination on the Causation Issue.[470]By way of remainder, and to avoid confusion, the Causation Case (defined earlier in this judgment) is the expression I am using to refer to the amendments in respect of causation which the Claimant sought to introduce by the Amendment Applications. The Causation Issue, if it arises, is the substantive question of whether the Claimant has proved the Trial Causation Case; that is to say the case on causation which the Claimant has sought to pursue on the basis of the evidence adduced at the Trial.[471]Notwithstanding the existence of the Pleading Issue, I have heard and read the evidence on the Causation Issue which had been put before the court, and there has been argument on that evidence. In these circumstances it seems to me that I should make findings on that evidence, and determine whether the Trial Causation Case has been proved, whatever the outcome of the Pleading Issue. I also find it convenient to do so before addressing the Pleading Issue. I address the Causation Issue by reference to the contraventions of Section 561 and 562 which I have found; namely the First Breach and the Second Breach. In theory, this means that I do not have to consider the Causation Issue in respect of a contravention in relation to the Third Allotment. The case that there was such a contravention is no longer pursued by the Claimant. I can however see that the evidence of what the Claimant did in response to the Third Offer Letter may throw some evidential light on what the Claimant could and would have done if the First Breach and/or the Second Breach had not occurred.[472]I can also see that causation may be relevant in relation to the Third Capital Raise, for an additional reason. The Claimant’s claim for compensation extends to loss alleged to have been caused by the further dilution of his shareholding effected by the Third Allotment. On the hypothesis that the compensation claim is capable of extending to loss alleged to have been caused by the Third Capital Raise, I can see that it is relevant to consider what would have happened on the Third Capital Raise if one assumes that the First and Second Breaches had not occurred, and if one also assumes that the Claimant could and would have subscribed in response to the First and Second Capital Raises, if the First and Second Breaches had not occurred. It seems to me however that this latter question is best considered when I come to consider the question of what compensation can be claimed, assuming that the Claimant can establish that he could and would have subscribed in response to the First and Second Capital Raises, if the First and Second Breaches had not occurred. For present purposes it seems to me that the conduct of the Claimant in relation to the Third Capital Raise is only relevant, as I have said, so far as it may throw evidential light on what the Claimant could and would have done if the First Breach and/or the Second Breach had not occurred.[473]Finally, there is another, obvious reason why I need to address the Causation Issue. The Causation Issue is relevant to the Section 994 Claim. As I understood the position of the Second to Sixth Defendants in relation to the Strike Out Application, as explained by Mr Riley, the Second to Sixth Defendants(i) accepted, indeed asserted, that the Causation Issue was relevant to the Section 994 Claim, and(ii) accepted that the Causation Issue would have to be considered in the context of the Section 994 Claim, even if the Pre-emption Rights Claim foundered on the Pleading Issue.[474]There is also another issue, which may be described as an issue of causation, which I am not considering in this section of this judgment. The Defendants contend that, if the Claimant has suffered loss, he was himself the cause of that loss and/or failed to take action to mitigate that loss. This is the issue which I have earlier identified as the Mitigation Issue. As with the issue of compensation arising in relation to the Third Capital Raise, identified in my previous paragraph, I consider that the Mitigation Issue is best left until I come to consider the question of compensation.[475]With these preliminary points in place, I turn to the Causation Issue itself.[476]The starting point is an obvious, but important one. Although I did not understand this to be in issue between the parties, I should say that it is clear that causation is an essential element of a claim for compensation pursuant to Section 563. By subsection (2) compensation can be claimed “for any loss, damage, costs or expenses which the person has sustained by reason of the contravention”. The underlining is my own. The underlined words make it clear that causation is an essential element of the claim.[477]The next step is to set out the counter-factual position which has to be considered, for the purposes of determining the Causation Issue.(1) In relation to the First Breach, I have already accepted the Claimant’s evidence that he did not see the First Offer Letter, in either electronic or hard copy form until he obtained the hard copy of the First Offer Letter from DHL on 21st November 2019. The counter-factual is a situation in which the First Offer Letter came to the attention of the Claimant on 17th October 2019.(2) In relation to the Second Breach, the Second Offer Letter should have offered the Claimant 85,000 new shares, at a price of £85,000, in order to reflect his then existing 17% shareholding in the Company. It will be appreciated that the Causation Issue in relation to the Second Breach requires, at least in theory, separate consideration to the Causation Issue in relation to the First Breach. This is because if I was to find that the Claimant could not and/or would not have subscribed in response to the First Offer Letter, if the First Breach had not occurred, it does not necessarily follow that the same is true in relation to the Second Offer Letter. If the Claimant would not have subscribed in response to the First Offer Letter he would not, by the time of the Second Offer Letter, have suffered a dilution in respect of his shareholding, and would have had the opportunity, over again, to subscribe for 17% of the new shares offered by the Second Offer.[478]I start with the question of whether the Claimant would have subscribed in response to the First Capital Raise and the Second Capital Raise if the First Breach and/or the Second Breach had not occurred. I will refer to this question as “the Would Question”. In answering the Would Question I assume, without at this stage deciding the question, that the Claimant would have had the funds available to him, at the relevant times, to subscribe in response to the First and Second Capital Raises, if he had been willing to do so.[479]On the evidence it is clear, and I so find, that the answer to the Would Question is(i) that the Claimant would not have subscribed in response to the First Offer Letter, if the First Breach had not occurred, and(ii) that the Claimant would not have subscribed in response to the Second Offer Letter, if the Second Breach had not occurred or if both the First Breach and the Second Breach had not occurred. My reasons for these findings are as follows.[480]As I have already found, a serious rift had come into existence, by the early part of 2019, between the shareholders of Pevans in relation to the governance of Pevans. At the heart of the dispute, albeit not the only issue, was the expenditure of funds from Pevans.[481]The complaints in relation to the governance of Pevans were articulated by Ms Wachera in her email of 12th February 2019, sent to Mr Macharia. I have already quoted the terms of this email, which I repeat for ease of reference:
“I make reference to the the Pevans East Africa Board Meeting held on 4th February in the main boardroom,during which a lengthy discussion on the Racing Point Sponsorship was held. I want to note here that there was no resolution reached during the meeting, with strong sentiments expressed that the financial commitment to sponsor Formula One is too huge, that this should be a board decision and not an individual one. In this regard, I wish to bring to the attention of all the following requests made at the meeting before any further steps can be taken. 1. A report on the global companies clearly showing the amount transferred to each to date, and projections on break even points.( It was correctly observed that all these companies are being financed by Pevans East Africa) 2. A detailed evaluation of all past sponsorships, with a summary of total amounts spent so far and the benefits to the company. 3. A detailed feasibility study that will help all investors make an informed decision on whether the venture in question adds any value to their investment. After receipt of these documents, the Company Secretary was to circulate a resolution for individual members to make their comments. I wish to state that I have not received any of these documents, and any move to sign any deal on behalf of the company is ill advised. Mr, Macharia, I seek your expert advise on the matter.”
Mr, Macharia, I seek your expert advise on the matter.”[482]It is also important to note that this email did not come out of the blue. The documents for the Trial included earlier emails sent by the Claimant and Ms Wachera expressing governance concerns; see the Claimant’s email sent to the directors of, I assume, Pevans on 6th June 2018, and the Claimant’s email sent to Mr Macharia on 13th June 2018, and see also Ms Wachera’s email sent to the Claimant on 6th June 2018 (copying in Mr Macharia, Mr Karauri, the Fourth Defendant, Mr Kinuthia, the Fifth Defendant and Ms Mineva) expressing support for the Claimant’s email of the same day.[483]The complaints expressed by Ms Wachera were also articulated by Mr Kinuthia in his email exchange with Ms Mineva at the beginning of April 2019. In his email of 3rd April 2019, Mr Kinuthia complained that “there is a well laid down plan of illegally taking away Pevans shareholders money to fund offshore companies which have no relationship with Pevans shareholders.”. The offshore companies referred to in this email were Peg B, Techpitch and Kentech. Mr Kinuthia returned to this theme in his next email sent to Ms Mineva on 4th April 2019:
“As I stated yesterday Peg B was formed to benefit you personally and the contracts signed between you as Peg B, Techpitch and Pevans are all for the purpose of creaming off shareholders money illegally. Honestly which are these services which Peg B have given to Pevans through Techpitch to cost Kes 965 Million of shareholder money, in addition to the Kes 600 Million paid to you through sport soft. You have taken advantage of Pevans East Africa Shareholders by crafting dubious contracts to enable you use Pevans money to develop your private business which you are then using to bill astronomical amounts of money to Pevans through Techpitch which is another gate way of robing the shareholders.”
[484]Mr Kinuthia set out his concerns and complaints about the Business at greater length in a long email which he sent to the Pevans shareholders on 30th April 2019. The email is too long to quote in full. The same applies to the matters of concern raised by Mr Kinuthia in this email. I note in particular however what was said by Mr Kinuthia about the Business globally (the underlining is my own):
“VII. Global Companies: From the presentations made in Liverpool by the international companies, my personal opinion is that the decision to go global was misadvised and my observation is that these businesses will never generate profits hence they will remain a huge liability to Pevans shareholders and they will continue being serious liabilities. It is very difficult to penetrate mature markets, it is a case of a company thinking that it can come to Kenya and start a Telecommunication company to compete with Safaricom, Airtel and Telcom and make a headway whivh is practically impossible, even in the sport betting field we have seen that all the betting companies which came after Pevans and Betin have taken leadership positions are not able to survive or make any profits. I therefore call upon the board of Directors to reconsider if these are worthwhile investments especially considering the colossal amount of money being spent to support these companies.”
[485]Mr Kinuthia concluded this email in the following terms:
“In conclusion, it’s important for all Directors to appreciate that any unjustifiable company expense amounts to fraud against the shareholders and also a criminal offence hence any major cost being applied to the business must be evaluated, justified and approved at a full boarding meeting. I therefore kindly request the Chairman to steer the board in the right direction and ensure that the business have proper governance structures and internal controls which will stop the wastage of finances especially the money being siphoned out to offshore companies. The executive directors must also be stopped from designing business strategies and programs to favor a few shareholders.”
[486]There is no doubt that the Claimant shared and supported the concerns and complaints which were articulated by Mr Kinuthia and Ms Wachera in early 2019. It is also clear that those concerns and complaints did not simply appear in early 2019. They had their origins in 2018 or earlier. So far as the Claimant’s position was concerned, it is clear that he supported Mr Kinuthia. Both Mr Macharia and Mr Karauri gave evidence, which I accept, to the effect that the Claimant’s position was aligned with that of Mr Kinuthia. It is also clear, and I so find, that the Claimant’s position was aligned with that of Ms Wachera. Put more simply, all three of the Claimant, Ms Wachera and Mr Kinuthia were on the same side, and had the same complaints and concerns, in relation to the rift in the Business which was in existence by the early part of 2019.[487]This is further borne out by the Claimant’s own communications, after he discovered that he had missed out on the offer letters in relation to the First Capital Raise. In his long email to the Third Defendant of 12th November 2019, the Claimant included the following paragraph (the underlining is my own):
“However I must admit the last 3 years have been hell. Trying to prevent pilferage of funds, trying to fight for cooperate governance and ethics in the group, trying to prevent fraud on certain directors, trying to prevent unauthorised remmitance of funds offshore, trying to introduce internal controls, trying to have an effective board and committees, trying to have regular scheduled meetings of which in 3 years only 3 substantive board meeting was held. Trying to have AGM for Auditors and Accountants to take shareholders through the books of accounts for last 5 years but in vain. Trying to introduce cooperate governance and avoidance of conflict of interests. All this in vain with more than US$ 260M sent and starched offshOre without subjecting such funds to openness of how the funds are used by opening and subjecting group accounts to Audit and presentation to shareholders. All this has been in vain. Even without basic decency and shame, by calling a hideous fraud on pre-emption of shares which is apparent even to a toddler. While thePevans has made over US$ 450m GGR in the last 5.5 years shareholders have only earned less than $60m in divided while officially more than $260m have been remitted offshore without any control or say from the Kenyan local shareholders. Despite that even the $260M taken away from local shareholders has now been grabbed again from them for a second time. My only hope is that on deeper scrutiny of official and unofficial such funds that their won't be tax evasion, money laundering etc. I remember very well local Kenyan Directors were told that when these $260m leaves Pevans they don't have any control over it. It has actually come to pass.”
[488]I am asked by the Claimant’s counsel to find that the concerns expressed by the Claimant in this and other communications were genuine. On the evidence in the Trial I am simply not in a position to decide whether the true position was that the Claimant’s concerns were justified, or misconceived, or somewhere in between. A determination of whether the Business was mismanaged in all the various ways alleged by the Claimant, Ms Wachera and Ms Kinuthia, would have required pleaded cases and evidence going well beyond the pleaded cases and evidence in the Trial. What I do accept, and find, is that the Claimant genuinely held the concerns which he, Ms Wachera and Mr Kinuthia expressed in their communications, whether or not those concerns were soundly based.[489]In their presentation of the Claimant’s case and in cross examination, the Claimant’s counsel sought to draw a distinction between money going from Pevans to offshore companies such as Peg B, Techpitch and Kentech, and money going to the SPG Group and the Isle of Man Group. The case put for the Claimant was that he had been concerned with the former, but not with the latter, and had not objected to money going to the SPG Group and the Isle of Man Group. The object of the exercise was, I assume, to seek to establish that the Claimant would have had no objection to putting money, by the Capital Raises, into the Company. In my view the evidence does not support this distinction. The extract from the Claimant’s email of 12th November 2019, which I have just quoted, is but one example of the allegations of fraud and misconduct made by the Claimant in relation to the funds taken out of Pevans. As is also apparent from this extract, one of the Claimant’s central complaints was that money had been taken out of Pevans which should have been paid to shareholders as dividends. The Second, Third and Fourth Defendants all give evidence, which I accept, of persistent complaints that money was being taken out of Pevans, a very profitable company prior to the Licence Suspension, to support the remainder of the Business. I have already accepted that the Claimant had been instrumental in the expansion of the Business outside Kenya, and had accepted the use of Pevans money for that purpose. I do not regard this as inconsistent with the Claimant’s view that Pevans’ money was being wasted in relation to overseas investment.[490]The other factor to bear in mind in this context is that the rift which had opened up in relation to the Business was a rift between two groups. I find that the group on the Claimant’s side comprised or included the Claimant, Mr Kinuthia and Ms Wachera. I find that the group on the other side comprised or included the Second to Fifth Defendants, Mr Macharia and Mr Karauri. The lack of trust which existed between the two groups, at least by 2019, is manifest in the evidence.[491]Putting all of the above evidence together, it is difficult to accept that the Claimant would have been willing to invest any further money in the Company in response to the Capital Raises or any of them.[492]My perception of the evidence is reinforced by two further important pieces of evidence. First, Mr Macharia gave evidence, in his first witness statement, that a week or so after he received the offer pursuant to the First Capital Raise, he met the Claimant by chance in a coffee house near a shopping mall called the Village Market, in a suburb of Nairobi called Gigiri. The two got into a conversation about the Business. According to Mr Macharia, the conversation was in the following terms:
“A week or so after I received Ms Karadzhova’s email, however I recall meeting Mr Nudungu by chance in a coffee house [Java] near a mall called the Village Market in the suburb of Nairobi called Gigiri. It was not unusual for me to bump into Mr Ndungu in social places and the coffee house in question is near his private office. We got into a conversation about Sportpesa. In the course of our conversation Mr Ndungu asked me in our common mother tongue (Kikuyu) whether “we”, implying the other shareholders of SGHL, thought that he was (as translated from Kikuyu) “stupid enough to give out his money to us to be misused with useless sponsorships and spending sprees in the UK. I was taken aback by what he was talking about. Mr Ndungu then referred to “our extortion ring” being disguised as a capital raise. At this point in the conversation, I realised that Mr Ndungu was referring to the First Capital Raise. Although he did not refer to Ms Karadzhova’s email directly, I do not believe he could have been referring to anything else given that the offer documents for the capital raise had just been sent to SGHL shareholders. Mr Ndungu was emphatic in our conversation that he was “not sending his money to mikoras”.”
[493]The Claimant firmly denied that this conversation took place, when it was put to him in cross examination. Mr Macharia was not challenged on this part of his evidence in his cross examination.[494]Mr Karauri also gave evidence, in his first witness statement, that he had a conversation with the Claimant in October 2019, at a shopping mall in Nairobi, in the following terms:
“I recall that, in October 2019, I bumped into Mr Ndungu at the Village Mall, a shopping mall in Nairobi. We got into a conversation. I asked him, “Paul, aren’t you going to send money to Global for the capital raise””
. He responded, “I will not send money to criminals”. I just laughed and left the conversation there. It was a short conversation and gave me the clear impression that he was aware of the First Capital Raise but did not want to participate in it. My impression at the time was that he had decided this because participating would involve (in his view) sending money to SGHL, rather than retaining it is Kenya.”[495]The Claimant also firmly denied that this conversation took place, when it was put to him in cross examination. Mr Karauri was challenged on this evidence, in cross examination, but maintained his evidence.[496]I find that both conversations did take place, in the terms described, respectively, by Mr Macharia and Mr Karauri. I make this finding for the following reasons. First, the two conversations are consistent with each other. The Claimant was essentially making the same point in each conversation. Second, what is alleged to have been said by the Claimant in each conversation is entirely consistent with the views which he clearly held in relation to the governance of the Business and wasted investment outside Kenya and which he would subsequently articulate at length in the emails which he sent on and after 11th November 2019. Third, I regarded Mr Karauri and Mr Macharia as honest witnesses. This does not mean that neither could have been mistaken in their recollection, but neither witness came across as mistaken in their respective recollection of each conversation.[497]There is also the point that Mr Macharia’s evidence was not challenged. In their Reply Submissions the Claimant’s counsel submitted that Mr Macharia’s evidence was dishonest, with the consequence that his evidence on the October conversation should be discounted with the remainder of his evidence. It seems to me that there are two problems with this submission. First, I do not consider that Mr Macharia’s evidence was dishonest, either generally or in specific instances. Second, and given the absence of challenge to this part of Mr Macharia’s evidence, the general rule which should apply is that it is not now open to the Claimant to challenge this part of Mr Macharia’s evidence; see the commentary on this general rule in Phipson on Evidence (20th Edition) at 12-12. As the commentary in Phipson makes clear, the rule is not an inflexible one, but in the present case I cannot see any circumstances of the kind which would justify the non-application of this general rule. In the present case, I do not think that it is open to the Claimant to challenge this part of Mr Macharia’s evidence, in the absence of challenge in cross examination. I should however also say that I do not regard the absence of challenge as the key factor in my acceptance of Mr Macharia’s evidence. I found this evidence convincing for the reasons which I have given above. I am doubtful that this position would have been altered, even if Mr Macharia had been challenged on this part of his evidence.[498]There is one qualification to my finding, above, that both conversations did take place, in the terms described, respectively, by Mr Macharia and Mr Karauri. On the basis of the evidence of the two conversations, counsel for the Second to Sixth Defendants submitted that the Claimant was aware of the First Offer Letter before the deadline for acceptance of the First Offer had expired. I do not think that the evidence went this far. Neither Mr Macharia nor Mr Karauri suggested that their conversations were this specific. I have already found that the Claimant did not receive the First Offer Letter until 21st November 2019, when he obtained the hard copy from DHL. There is also the Claimant’s email of 11th November 2019. I read that email as meaning that the Claimant had only just learnt of the offers made pursuant to the First Capital Raise. I have also accepted the evidence of the Claimant, given in cross examination, that he first learnt of the First Capital Raise when he was told about it by Ms Wachera in their telephone conversation on 11th November 2019. I do not think, however, that there is a conflict here. The conversations with Mr Macharia and Mr Karauri were general rather than specific. What they seem to me to disclose is that the Claimant was generally aware that a capital raise was in progress, without being aware either that actual offers had been made or, specifically, of the implementation of the First Capital Raise. It is not surprising that the Claimant had this general awareness, given the discussion of raising money from shareholders which had taken place at the Pevans Meeting and, as I have found, was the subject of a specific resolution at the Pevans Meeting on 12th August 2019.[499]In addition to the October conversations, I also attach significance to the Claimant’s correspondence from 11th November 2019, after he became aware of the offers made pursuant to the First Capital Raise. The Claimant’s primary demand, as put forward in this correspondence, was that the position should be reversed on the basis that his shareholding had been the subject of an unlawful dilution. The Claimant did not put his complaints on the basis that he had been denied a valuable investment opportunity. I will need to come back to the negotiations between the parties, in late 2019 and 2020, later in this judgment. For present purposes however, a notable feature of these negotiations is the Claimant’s lack of trust in the Second and Third Defendants and those in their group. It was clear from the Claimant’s evidence that he was reluctant to hand over money to the control of the Company.[500]So far as the Third Capital Raise was concerned, I do not consider that the evidence of the Claimant’s conduct in response to the Third Offer Letter throws much evidential light on the Would Question. The Third Capital Raise took place at a much later stage. The Third Offer Letter was sent to the Claimant on 22nd December 2021. By that time, the parties were in correspondence by their respective solicitors, a formal letter of claim had been sent on the Claimant’s behalf and, less than a month later, the Claimant would commence proceedings in relation to the Pre-emption Rights Claim, by the issue of the Part 8 claim form on 19th January 2022. In these circumstances I do not consider that the Claimant’s conduct in response to the Third Offer Letter offers any reliable evidence of what the Claimant would have done, in response to the First Offer Letter and/or the Second Offer Letter, if it is assumed that the First Breach and/or the Second Breach had not occurred.[501]On the basis of my analysis of the evidence referred to above, and taking into account all the relevant evidence in this context, I find it impossible to accept that the Claimant, assuming that he had the funds available to him at the relevant times, would have subscribed in response to the First Offer if the First Breach had not occurred, or would have subscribed in response to the Second Offer if the Second Breach had not occurred or if both the First Breach and the Second Breach had not occurred. On the evidence it seems clear to me, not least from the evidence of what the Claimant said and did at the relevant times, that the Claimant would not have been willing to invest. As such, and to repeat my findings, I find that the answer to the Would Question is(i) that the Claimant would not have subscribed in response to the First Offer Letter, if the First Breach had not occurred, and(ii) that the Claimant would not have subscribed in response to the Second Offer Letter, if the Second Breach had not occurred or if the First Breach and the Second Breach had not occurred.[502]My consideration of the Would Question has assumed that the Claimant would have had the ability to subscribe in response to the First Capital Raise and the Second Capital Raise, in the sense of having sufficient funds available to him, if he had been willing to subscribe, to meet the cost of subscribing (“the Subscription Cost”). Assuming subscription in response to both Capital Raises, the Subscription Cost would have been £170,000 (2 x £85,000). I now turn to consider whether the assumption that the Claimant would have been able to meet the Subscription Cost is correct, so that the Claimant would have had the ability to subscribe. I will refer to this question as “the Could Question”.[503]In cross examination the Claimant stressed that there would have been no difficulty in his raising the funds to subscribe, if necessary by borrowing. There were however a number of difficulties with this evidence.[504]By letter dated 25th February 2025, DLA made a request to Jury O’Shea for disclosure of bank statements for all personal bank accounts and savings and/or investment accounts owned or controlled by the Claimant in the period from 1st January 2019 to the date of their letter. Disclosure was sought by 5.00pm on 4th March 2025. It is not clear to me whether there was ever a specific response to this request. The documents relating to the Claimant’s financial position at the time of the First and Second Capital Raises which were before me at the Trial comprised the following:(1) Two pages of bank statements in relation to the Claimant’s account with Equity Bank (Kenya) Limited (“Equity Bank”). The statements were very heavily redacted. Only ten lines of entries were visible, which were themselves partially redacted. Only one of these entries, on 11th October 2019, showed a sufficient credit balance to meet the Subscription Cost. This only came about however because KES 60 million came into the account on 11th October 2019, taking the account balance to KES 60,154,766.33 on that day. The account went back to KES 154,766.33 the same day, when the sum of KES 60 million left the account.(2) A number of pages of bank statements for a company called Simba Fresh Produce Limited (“Simba”), also with Equity Bank. These statements were also heavily redacted, but showed partially redacted entries from 4th October 2019 to 30th January 2019. During this period there were substantial credit balances in the account, which would have been sufficient to meet the Subscription Cost.(3) A short letter from Equity Bank dated 5th May 2025. The letter contained the following financial information:
“We further confirm that the customer was enjoying an Overdraft facility of Kes 50,000,000 from January 2017 secured by various properties that the customer had offered to the bank as collateral. The collaterals are still held by the bank and we would still consider them for a facility should they request. The Overdraft facility was voluntarily cleared by the customer in October 2019, but the limit remained available for utilization until June 2021 when the customer didn’t renew the facility.”
[505]None of this evidence was satisfactory. Starting with the very limited entries from the Claimant’s personal bank account, they appeared only to demonstrate that the Claimant would only have had the funds available to meet the Subscription Cost on 11th October 2019, and then only for a limited part of that day. The problems go further than that, however. The systematic redaction of the remainder of the entries on these statements inevitably left me wondering what the redacted entries would have disclosed, specifically in relation to the periods when the First Offer and the Second Offer were expressed to be available for acceptance.[506]Turning the Simba bank statements, the obvious point is that these statements were evidence of what was in Simba’s bank account, not what was available in the Claimant’s personal account. In cross examination the Claimant said that he was able to make use of Simba’s funds for his own purposes, provided that this did not place Simba “in financial danger”. The Claimant gave evidence in cross examination that Simba was a family business and that the shareholding in Simba (it was not clear whether the Claimant meant the entire shareholding or part of the shareholding) was originally in his name. The Claimant’s evidence was that his bank, by which I assume that he meant Equity Bank, approached him in 2019 and informed him that because of all “the bad press” concerning the Business, he needed to change the shareholding in Simba to remove his name because of “Know your Customer” concerns. The Claimant said that he then removed his name from the shareholding in Simba, and put the shareholding into the name of his wife and two adult children.[507]I did not find any of this evidence satisfactory or credible. There was nothing to corroborate the Claimant’s claim that he could help himself to the funds in Simba’s bank account when he pleased. There was no evidence from those who had control of Simba at the relevant time. There was no evidence of whether the Claimant had otherwise made use of Simba’s funds for his personal expenditure. I was also left with an unanswered question as to the legality of the Claimant making use of Simba’s funds as and when he pleased. Beyond this, I had great difficulty in understanding why Equity Bank should require the Claimant to divest himself of his shares in Simba, as a result of bad press concerning the Business or those involved in the Business. This was an area of the Claimant’s evidence where the absence of any supporting documents was notable and unexplained. My overall impression was that I was not being given the full picture by the Claimant in his evidence. In the light of the difficulties with this part of the Claimant’s evidence, I am not prepared to accept that the Claimant could have used the funds in Simba’s bank account to fund the Subscription Cost.[508]So far as the letter from Equity Bank was concerned, which was produced in the course of the Trial, it raised this question. The letter turned up in the course of the Trial. If however the Claimant had access to Simba’s funds in order to meet the Subscription Cost, why would he have needed an overdraft in order to meet the Subscription Cost, and why would he have made use of an overdraft facility which he had apparently, in October 2019, just cleared? It would have been helpful to see the terms of the overdraft facility, but these were not provided. It would also have been helpful to have had an understanding of the Claimant’s actual financial position during the relevant period between October 2019 and January 2020, but this was not provided. All in all, I was not satisfied that the Claimant could or would have had resort to borrowing in order to meet the Subscription Cost.[509]In cross examination it was put to the Claimant that he had told the court at the PTR that “at the moment” he was suffering from severe financial pressure, to which his answer was as follows [T4/9]:
“A. I never said I 'm suffering from severe financial pressures.”
[510]Mr Riley pressed the Claimant further on this question. The Claimant’s answers became rambling and difficult to follow, as is illustrated by the following extract from his cross examination [T4/90/14-91/8] (the underlining is my own):
“Q. Mr Ndungu, please. My question to you was that you were −−you're currently under severe financial pressure, aren't you? A. No, I'm not. Q. Do you not recall making an application through your lawyers to this court to adjourn the trial because you were under severe financial pressure? A. Not about −− not exactly about the financial pressure, but the pressure in Kenyan court seeing that I have been condemned by Kenyan courts. Actually in Kenyan courts, which is developing now, one judge has already recused himself from the court cases after discovering that he was misled. Q. Mr Ndungu, again we're straying again off topic. A. I cannot answer −− Q. I think your answer was you don't recall making an application to adjourn the trial ? A. The application was only three or four weeks ago and number 1, I explained that in Isle of Man I invested £1.7 million which were in the audited books of Isle of Man companies. But to date, that amount of my investment is not there.”

A. I cannot answer −−

[511]This evidence has to be considered in the light of what Mr Gleek said in his first witness statement, made in support of the Adjournment Application at the PTR. In paragraphs 88 and 89 of this witness statement Mr Gleek said this:
“88. The significant machinations both in these proceedings as well as in the Kenyan litigation over recent months in particular, have had a significant impact on Mr Ndungu’s cash flow. 89. Ultimately, it has become increasingly clear as 2025 has progressed that he does not presently have access to sufficient cash to pay the significant sums needed to pay for our firm and Counsel to carry out the substantial tasks necessary to prepare this matter for a trial in April / May 2025 or for legal representatives to represent him at such a trial.”
[512]I have no doubt that Mr Gleek gave this evidence on the basis of his instructions from the Claimant. In these circumstances, I have considerable difficulty in understanding how the Claimant was able to make an absolute denial, in the underlined section of his cross examination which I have quoted above, that he was under severe financial pressure. In this part of his cross examination the Claimant was being asked about his current ability to pay for the shares in the Company to which he claims to be entitled. The PTR was held on 7th April 2025. The above passage of cross examination took place on day 4 of the Trial, on 9th May 2025; that is just over a month after the PTR. In these circumstances I cannot believe that the Claimant had managed to turn around the financial position described by his solicitor, a month or so previously. It was obvious to me, and I so find, that although I consider that the Claimant was generally honest in his evidence, in this instance the Claimant was not being honest and straightforward in his evidence, because he realised that what had been said about his financial position at the PTR was not helpful to his case. It is of course the case that, in this section of his cross examination, the Claimant was being asked about his current financial position, not about his financial position in 2019/2020. Nevertheless, I see this part of the Claimant’s evidence as being relevant to the Could Question because it confirmed my view that the Claimant was not, in any part of his evidence on his financial position, being straight with the court. Putting the matter another way, I find that the Claimant was, in his evidence on his financial position, concealing the full picture from the court.[513]I was also told at the PTR that the Claimant would be without legal representation at the Trial, if the Adjournment Application was not granted, and that this would work serious injustice to the Claimant. As matters have turned out, this did not happen. I do not know, and I have no need to know, the terms on which the Claimant has instructed his legal team for the Trial. While it might be said that the fact that the Claimant is legally represented demonstrates that he can, in a crisis, find a means of funding what he needs to fund, my conclusion was a different one. In my view what I was told at the PTR, both by Mr Gleek and by counsel then instructed for the Claimant, in each case, I have no doubt, on the instruction of the Claimant, provided further evidence of the unreliability of the Claimant’s evidence of his financial position, both currently and in 2019/2020.[514]As with the Would Question, and so far as the Third Capital Raise was concerned, I do not consider that the evidence of the Claimant’s conduct in response to the Third Offer Letter throws any evidential light on the Could Question. I say this for the same reasons as I have already articulated in relation to my consideration of the Would Question. I should also add however that the evidence of the Claimant’s financial position, in December 2021, is no less opaque than it is in 2019/2020. In these circumstances, and as with the Would Question, I do not consider that the Claimant’s conduct in response to the Third Offer Letter offers any reliable evidence of what the Claimant could have done, in response to the First Offer Letter and/or the Second Offer Letter, if it is assumed that the First Breach and/or the Second Breach had not occurred.[515]On the basis of my analysis of the evidence referred to above, and taking into account all the relevant evidence in this context, I am not satisfied that the Claimant would have had the financial ability to subscribe in response to the First Offer if the First Breach had not occurred, or would have had the financial ability to subscribe in response to the Second Offer if the Second Breach had not occurred or if both the First Breach and the Second Breach had not occurred. On the evidence, the Claimant has failed to demonstrate that he would have had the financial ability to invest at the relevant times, even if, contrary to my findings on the Would Question, he would have been willing to invest. Accordingly, I find that the answer to the Could Question is(i) that the Claimant would not have had the financial ability to subscribe in response to the First Offer Letter, if the First Breach had not occurred, and(ii) that the Claimant would not have had the financial ability to subscribe in response to the Second Offer Letter, if the Second Breach had not occurred or if the First Breach and the Second Breach had not occurred.[516]Drawing together all of the analysis in this section of this judgment, I conclude and find that the Claimant has failed to establish his case on causation; that is to say the Trial Causation Case. It follows that the Claimant cannot demonstrate that he has been caused any loss, damage, costs or expenses by reason of the First Breach and/or the Second Breach, within the meaning of Section 563, because he could not and would not have subscribed/invested in response to the First Capital Raise and/or the Second Capital Raise if the First Breach and/or the Second Breach had not occurred.[517]For this reason, it follows that the Pre-emption Rights Claim must fail and is liable to be dismissed, independent of my decision on the Pleading Issue, to which I now come.

The Pleading Issue

[518]In the light of my decision on the Causation Issue, it can be said that the Pleading Issue does not arise for decision. Whether the Claimant’s case on causation (the Trial Causation Case) was adequately pleaded or not, the substantive case would have failed in any event. The Pleading Issue was however fully argued before me and, as I have said, strictly fell for decision before the Causation Issue. I also have the Strike Out Application before me, on which I should make a decision. In all these circumstances I consider that I should decide the Pleading Issue and, depending upon my decision on the Pleading Issue, that I should also proceed to consider the Strike Out Application.[519]I have already decided that causation is an essential element of a claim for compensation pursuant to Section 563. The relevant claimant must plead and prove that they have been caused loss by the relevant contravention or contraventions of Section 561 and/or Section 562.[520]The starting point is to identify what, in principle, needed to be pleaded by the Claimant in the Pre-emption Rights Claim in relation to the required element of causation.[521]In Pantelli Associates Limited v Corporate City Developments Number Two Limited [2010] EWHC 3189 (TCC), Coulson J (as he then was), in the context of a professional negligence claim, identified the following required elements in a claim for breach of contract and/or negligence, at [11]:
“11. CPR 16.4(1)(a) requires that a particulars of claim must include “a concise statement of the facts on which the claimant relies”
. Thus, where the particulars of claim contain an allegation of breach of contract and/or negligence, it must be pleaded in such a way as to allow the defendant to know the case that it has to meet. The pleading needs to set out clearly what it is that the defendant failed to do that it should have done, and/or what the defendant did that it should not have done, what would have happened but for those acts or omissions, and the loss that eventuated. Those are ‘the facts' relied on in support of the allegation, and are required in order that proper witness statements (and if necessary an expert's report) can be obtained by both sides which address the specific allegations made.”[522]I draw attention, in particular, to the requirement to identify what would have happened but for the relevant acts or omissions. It is also clear that, although Pantelli involved the pleading of a counterclaim for alleged professional negligence of the claimant in that case, a firm of quantity surveyors, Coulson J intended what he said to have application to any claim for breach of contract and/or negligence. It seems to me that what was said by Coulson J is equally applicable to a claim for compensation pursuant to Section 563. This was confirmed by Coulson LJ (as he had become) in Building Design Partnership Limited v Standard Life Assurance Limited [2021] EWCA Civ 1793 [2022] 1 WLR 878, at [40]. After quoting what he had said in Pantelli, at [11], Coulson LJ said this, at [40] in his judgment:
“40. I should stress that, although this summary was part of a judgment in a professional negligence claim, it is not to be read as if it were confined to such claims. These are the basic ingredients of any statement of case against any defendant.”
[523]It is also material to note the terms of the pleading which Coulson J was considering in Pantelli. In that case the claimant was seeking unpaid fees from the defendant in relation to two building projects in North London. The defendant served a defence and counterclaim which raised, for the first time, allegations of professional negligence. An unless order made was in the proceedings, which required the defendant to provide proper particulars of the allegations of negligence, causation and loss, for which an application to amend was required to be made, with the sanction of a strike out of the relevant allegations in the counterclaim if proper particulars were not provided. The application to amend was made, but was opposed by the claimant on the basis that what had been provided by way of proposed amendments, in the form of a replacement defence and counterclaim, did not constitute proper particulars of the claim in professional negligence. Coulson J decided that proper particulars had not been provided, and struck out the counterclaim. In relation to causation, paragraph 36 of the new defence and counterclaim stated as follows:
“36. As a result of the Claimant's breaches of the QS Contracts and the PM Contracts, the Defendant has suffered loss and damage. Particulars of Loss and Damage 36.1 The Defendant has incurred additional and/or wasted costs of approximately £300,000. These include the costs of engaging additional consultants including structural engineers, CMP consultants and transport consultants. 36.2 As a result of the delay to the projects, the Defendant has incurred additional costs servicing loans for an extended period.”
Particulars of Loss and Damage 36.1 The Defendant has incurred additional and/or wasted costs of approximately £300,000. These include the costs of engaging additional consultants including structural engineers, CMP consultants and transport consultants. 36.2 As a result of the delay to the projects, the Defendant has incurred additional costs servicing loans for an extended period.”[524]This was followed by some brief particulars of loss and damage. Coulson J considered that the new paragraph 36 was not adequate to plead the case in causation. As he stated, at [13]:
“13. Similarly, paragraph 36 is not a proper pleading of causation and loss. It is impossible to work out from that terse summary what facts CCD rely on in support of their contention that a particular breach or breaches has given rise to a particular head of loss. There is no answer to the question: but for the negligence, what would have happened and why? The damages claimed are wholly unparticularised.

(a) ”

[525]I take two points in particular from Pantelli. First, in a case such as the Pre-emption Rights Claim, causation must be pleaded. Second, the pleading of the case should set out the answer to the question of what would have happened if the relevant contravention or contraventions had not occurred.[526]With these principles in mind, I turn to the question of what, if anything, has been pleaded by way of a causation case in the Pre-emption Rights Claim, in the proceedings. So far as the Causation Case is concerned, that is to say the causation case which the Claimant sought to introduce by the Amendment Applications, I have already decided, in the Amendment Judgments, that the Causation Case was not pleaded; see in particular the First Amendment Judgment at [31]. In the First Amendment Judgment, at [40], I also made it clear that my decision on the First Amendment Application left it open to the Claimant to proceed with the Pre-emption Rights Claim on his existing pleaded case. This therefore left it open to the Claimant to argue either that causation was sufficiently pleaded in the existing pleaded case or, if causation was not sufficiently pleaded, to argue that the omission should not prevent the Claimant from putting his case on causation without the necessity for the same to be pleaded. At the Trial, the Claimant submitted that the Trial Causation Case was sufficiently pleaded in the existing pleaded case. By way of fallback position, the Claimant submitted that he should be permitted to rely on the Trial Causation Case, even if it was not sufficiently pleaded.[527]I will take first the question of whether the Trial Causation Case is sufficiently pleaded in the existing pleaded case.[528]The Claimant’s counsel contended that the Trial Causation Case was sufficiently pleaded on the basis of what had been said in the pre-action correspondence. It was said to be clear from this correspondence that the Claimant would, if he had been given the opportunity, have subscribed in response to the three Capital Raises. I take this submission to mean that the pre-action correspondence made it clear that this was what the Claimant was saying, in relation to causation. I cannot accept this submission. It seems to me to be quite clear, from all the authorities cited to me on this question, that a case cannot be treated as having been pleaded on the basis of what has been said in correspondence. Correspondence cannot be treated as a statement of case. At best, and in a case where the court is called upon to construe a pleading, correspondence may form part of the factual matrix relevant to that construction exercise; see Arden LJ (as she then was) in Evans v Cig Mon Cymru Ltd [2008] EWCA Civ 390, at [28]. Correspondence cannot supply the pleading of a case which has been left unpleaded in the relevant statement of case.[529]The Claimant’s counsel also sought to rely upon what was said in the Claimant’s first witness statement, which is dated 19th January 2022. The relevant point here is that the Claimant commenced the Pre-emption Rights Claim by Part 8 claim form issued on 19th January 2022. In compliance with the Part 8 procedure, the Claimant served his witness statement in support of the claim form, and set out his case in his witness statement. This case, so it is submitted, included the Claimant’s case on causation. It seems to me however that there are two problems with this submission.[530]The first problem is that the Claimant filed and served Particulars of Claim in the Part 8 proceedings, dated 27th October 2022. The Claimant filed and served these Particulars of Claim pursuant to a direction of ICC Judge Burton which was contained in an order, made by consent on 12th September 2022, which gave various directions in what were then the Part 8 proceedings. I assume that these directions were agreed between the parties on the basis that, as in other Part 8 claims, it was appreciated that there was a need for statements of case, commencing with the pleading of the Pre-emption Rights Claim in Particulars of Claim. Subsequently, by the order of ICC Judge Prentis of 25th November 2022, the Particulars of Claim were ordered to stand as Particulars of Claim in the Proceedings, as consolidated. In these circumstances it seems to me that the Particulars of Claim, now the Amended Particulars of Claim, are correctly treated as the document which sets out, and was required to set out, the pleaded case of the Claimant in the Pre-emption Rights Claim, and as a statement of case which effectively superseded the Claimant’s first witness statement. I will come shortly to the question of whether the Amended Particulars of Claim do actually plead the Trial Causation Case. For present purposes the relevant point is that, in my judgment, the Trial Causation Case did need to be pleaded in the Particulars of Claim. If the Trial Causation Case was only set out in the Claimant’s first witness statement, and not carried over into the Particulars of Claim, this was not sufficient.[531]The second problem is that even if am wrong in what I have just said, I do not think that the first witness statement did adequately set out the Trial Causation Case. Strictly speaking, this is a matter which I have already decided, in the First Amendment Judgment, at [28]. The Claimant is bound by that decision. I will however repeat what I decided in the First Amendment Judgment, which was that the paragraphs of the witness statement relied upon by the Claimant did not set out the Causation Case which the Claimant sought to introduce by the Amendment Applications.[532]This second problem might not be a problem for the Claimant if the case on causation which he has sought to pursue at the Trial, and which I have considered substantively in the previous section of this judgment, that is to say the Trial Causation Case, was somehow different from the Causation Case and was encompassed by what was said by the Claimant in the relevant part of his first witness statement. This is not however the position. If one compares the Trial Causation Case, which the Claimant has sought to pursue in the Trial, with the Causation Case, both in its first iteration in the First Amendment Application and in its second iteration in the Second Amendment Application, it seems to me that the Trial Causation Case is indistinguishable from the Causation Case. The essential case is that the Claimant could and would have subscribed, in response to the First Capital Raise and the Second Capital Raise if the First Breach and/or the Second Breach had not occurred. The only difference is that the Trial Causation Case does not engage any breach of statutory duty in relation to the Third Allotment, because the Claimant no longer contends that there was such a breach. This however is not a material difference, because the case on causation is the same notwithstanding that there were breaches of statutory duty only in relation to the First and Second Allotments.[533]The Claimant’s counsel also sought to argue that the Trial Causation Case can be found pleaded in the Amended Particulars of Claim or, at least, in the Amended Points of Reply. So far as the Amended Particulars of Claim are concerned, there are two difficulties which confront the Claimant. The first is that I have already decided, in the First Amendment Judgment, at [31], that the Causation Case was not pleaded in the Particulars of Claim. As I have noted, the Trial Causation Case is indistinguishable from the Causation Case. As such, the Claimant is bound by my decision in the First Amendment Judgment and is not entitled to argue that the Trial Causation Case is pleaded in the Amended Particulars of Claim.[534]The second difficulty is that even if my decision in the First Amendment Judgment is disregarded, I do not accept that the Trial Causation Case is pleaded in what are now the Amended Particulars of Claim. The relevant paragraphs of the Amended Particulars of Claim, which are relied on by the Claimant for this purpose, simply will not bear the weight sought to be placed upon them. In this context the Claimant relies, first, upon paragraph 99.2.1.1 of the Amended Particulars of Claim. Paragraph 99.2.1.1 appears in section F of the Amended Particulars of Claim, which deals with the relief claimed by the Claimant. In order to provide the relevant context, I should quote the whole of paragraph 99.2, which states as follows:
“99.2. Compensation for all loss, damage, costs and expenses to be assessed including but not limited to: 99.2.1. If he is not reinstated with a 17% shareholding: 99.2.1.1. the difference between: (i) the increased value of the shareholding which he would have held; and (ii) the amount (at £1 per share) which he would have paid for the same; and/or 99.2.1.2. such compensation as shall reflect the loss and damage suffered as a result of the Claimant being left with a smaller shareholding, and dismissed as a director, with the balance of power in the Company also fundamentally altered; 99.2.2. the Claimant’s legal costs.” 99.2.1. If he is not reinstated with a 17% shareholding: 99.2.1.1. the difference between: (i) the increased value of the shareholding which he would have held; and (ii) the amount (at £1 per share) which he would have paid for the same; and/or 99.2.1.2. such compensation as shall reflect the loss and damage suffered as a result of the Claimant being left with a smaller shareholding, and dismissed as a director, with the balance of power in the Company also fundamentally altered; 99.2.2. the Claimant’s legal costs.”
[535]It seems to me self-evident that this is not the pleading of the Trial Causation Case. Beyond this, the Claimant also seeks to rely on paragraphs 16.1 and 17 of the Amended Particulars of Claim, on the basis that they contain an implicit pleading of causation. It is not necessary to set out these paragraphs. I am wary of accepting that there is any such concept as an implied pleading, although I can see that the process of construction of a pleading might involve a finding that something was implicit in the pleaded material. Leaving that point aside, however, it is quite clear that these paragraphs do not plead the Trial Causation Case, either on an express or implied basis.[536]Turning to the Amended Points of Reply, much the same reasoning applies. First, I have already decided that the Causation Case was not pleaded in the Proceedings; see the First Amendment Judgment at [31]. This decision must apply equally to the Trial Causation Case, given the identity between the Causation Case and the Trial Causation Case. Second, and putting that point to one side, the paragraph of the Amended Points of Reply which is relied upon, namely paragraph 5, is confined to the following pleading:
“5. Further as to paragraph 3.4: 5.1. If the Petitioner had received the October Offer Letter then he would have taken up the offer of shares contained therein. 5.2. It is denied that the alleged facts and matters set out in the Re-Re-Amended Defence and/or at paragraph 4 of the Amended Points of Defence (even if true) would lead to the alleged inference.” 5.1. If the Petitioner had received the October Offer Letter then he would have taken up the offer of shares contained therein. 5.2. It is denied that the alleged facts and matters set out in the Re-Re-Amended Defence and/or at paragraph 4 of the Amended Points of Defence (even if true) would lead to the alleged inference.”
[537]At best, this only pleads a case in causation in relation to the First Offer Letter, and pleads a case which is not put by reference to any contravention of Section 561 or Section 562. I do not regard these as technical points. There is an obvious gap between what is pleaded here and the Trial Causation Case.[538]In addition to this, paragraph 5 appears in what were originally Points of Reply in the proceedings commenced by the Petition; that is to say the Section 994 Claim. Paragraph 5 of the Amended Points of Reply responds to paragraph 3.4 in what were originally the Points of Defence of the Second to Sixth Defendant in the Petition proceedings. The Points of Defence and Points of Reply were served in the Petition proceedings pursuant to an order of Chief ICC Judge Briggs made on 29th November 2022. It is of course the case that the Part 8 (Pre-emption Rights Claim) proceedings were consolidated with the Petition (Section 994 Claim) proceedings, but the Points of Reply were served in relation to the Petition and the Section 994 Claim. In my view, the Claimant is not entitled to rely on the Points of Reply as a pleading of his case in the Pre-emption Rights Claim, particularly in circumstances where the court gave a specific direction that the Claimant should file and serve Particulars of Claim for the purposes of setting out the Pre-emption Rights Claim.[539]In addition to this, and leaving aside the specific procedural circumstances in which the Particulars of Claim were originally served, the Points of Reply are not a set of particulars of claim. They are a reply. In my view, and even if the Points of Reply can be treated as a statement of case in the Pre-Emption Rights Claim, the Claimant’s case in causation required to be pleaded in particulars of claim, not in a reply.[540]In their Reply Submissions, the Claimant’s counsel sought to meet this point by the argument that the definition of a statement of case, in CPR 2.3, is a compendious one, and includes a reply. Their argument was, as I understood it, that it was sufficient to plead the Trial Causation Case in the Points of Reply. In support of this argument the Claimant’s counsel cited the judgment of Toulson LJ in Evans v Cig Mon, at [18] and [20]. It is not my intention to lay down any hard and fast rule as to what must appear in particulars of claim and what can legitimately be left to a reply. In the present case, and leaving aside the points which I have already made, it is my view that the Trial Causation Case needed to appear in the Particulars of Claim. I do not think that it could be left to the Points of Reply, even disregarding the fact that the Particulars of Claim were served pursuant to a direction of the court.[541]So far as the judgment of Toulson LJ in Evans v Cig Mon is concerned, it seems to me that the paragraphs of his judgment relied upon by the Claimant’s counsel were doing no more than reflecting the definition of a statement of case in the CPR as a compendious definition. This, in turn, meant that when Toulson LJ came to consider the applications before the court, he thought that the just approach was to look at the documents as a whole. If however one reads the judgment, it is clear that the pleading issue before the Court of Appeal in that case bears no relation to the Pleading Issue. In the present case I do not consider that looking at the statements of case as a whole can excuse the omission of the Trial Causation Case from what are now the Amended Particulars of Claim.[542]Drawing together all of the above analysis, my conclusion is that the Trial Causation Case has not been pleaded, either sufficiently or at all.[543]This brings me to the question of whether the Claimant should be permitted to rely on the Trial Causation Case even if the Trial Causation Case is not sufficiently pleaded or, as I have decided, is not pleaded at all.[544]In this context I was referred by the Claimant’s counsel to the decision of the Court of Appeal in Lombard North Central Plc v Automobile World (UK) Ltd [2010] EWCA Civ 20. The case was concerned with a claim by the respondent, Lombard North Central, for the balance of the amount said to be due on a contract for the purchase of a car by instalments. The judge at first instance had refused to permit an argument to be raised at the trial that Lombard had misrepresented the date of manufacture of the car, on the ground that this argument had never been pleaded. An appeal against the refusal of the judge to allow this argument to be raised was dismissed by the Court of Appeal. In agreeing with Rix LJ, who gave the principal judgment in the Court of Appeal, Rimer LJ noted that there might be cases in which it would be appropriate to allow unpleaded issues to be raised in a trial, in the following terms at [79]:
“79. In saying this, I make clear that I am not suggesting that courts must adopt an inflexible approach to the question of whether or not a particular unpleaded issue may or may not be the subject of investigation at a trial. There will be cases in which it will be obvious that it would be unjust for the court not to entertain and decide a non-pleaded issue: for example, when it is apparent that both sides have come to court ready to deal with it as an issue in the case despite its omission from the pleadings. That, however, was not this case; and such cases are likely to be rare.”
[545]I was also referred by the Claimant’s counsel to the decision of the Court of Appeal in Hawksworth v Chief Constable of Staffordshire [2012] EWCA Civ 293. The claimant had worked as a communications officer in the control room of a police station. The claimant was in radio communication with a police officer when a fire alarm sounded at the location from which the officer was speaking. This affected the claimant’s hearing. Her claim in personal injury failed at first instance. The claimant appealed to the Court of Appeal. One of the grounds of appeal, which was the only ground of appeal with which the Court of Appeal was concerned, was that the judge had erred in allowing evidence concerning sound attenuation software to inform his findings, in circumstances where the defendants had not specifically stated in their pleaded case that they were relying on this evidence. It was said that the claimant’s expert had been denied the opportunity to comment on this evidence, as he understood the pleaded case not to rely upon this evidence. The pleaded case of the defendant included the sentence “For the avoidance of doubt the Defendant does not allege that the telecommunications system contained any internal noise limiter.”.[546]This ground of appeal failed. Both the pleaded case and the procedural history of the proceedings, as summarised in the judgment of Tomlinson LJ, were somewhat complicated. I need not repeat this summary. Ultimately, Tomlinson LJ concluded that the attenuation software had always been in play at the trial, and it was too late for the claimant to complain about this in the appeal. Toulson LJ (as he then was) delivered a short concurring judgment. The Chancellor agreed with both judgments. Tomlinson LJ summarised the position, and explained what steps counsel for the claimant should have taken at trial in the following terms, at [41]-[42]:
“41. From that passage in the judgment of Lawton LJ it is apparent that the approach taken by Mr Pratt at the trial was simply insufficient. If Mr Pratt was concerned that the defendants were adducing evidence and seeking to rely upon it in a manner which departed from their pleaded case, it was plain that it was incumbent upon him to invite the judge to rule upon his objection. Had that course been taken, then it would have been incumbent upon Mr Rankin in turn to apply for an amendment to the pleadings if that was thought necessary. I have to say for my own part that I am very doubtful whether the judge would in fact have upheld Mr Pratt's objection or acquired an amendment to the pleadings. I have already referred to the form of the defence which is not a model of clarity, but from which it is certainly possible in my judgment to deduce that the point that was being made by the defendants was that the EDAIU, or the fixed parts of the integrated communication control system, did not contain any internal noise limiter and that did not prevent them from pointing out that there were other pieces of noise limitation equipment inherent both in the headset — to which specific reference was made in paragraph 5 of the pleading — and in the handset, about which evidence was given by Mr Lovell and which formed a very significant part of the debate at trial. I doubt therefore whether the objection would have been successful, but, even so, if the line which Mr Pratt wished to take on behalf of the appellant was that this evidence should not be permitted or that its giving was prejudicial, he should have insisted on the judge making a ruling on it. Had that been done, and had the judge been prepared to accede to the application, there would have been an opportunity for Dr Holliday to test the sound attenuation software, if he thought that necessary. 42. That being the case, it seems to me that the objection which Mr Pratt has put forward which forms the sole ground of appeal is really unsustainable, because it is simply too late to complain of the course taken at trial. Mr Pratt had the opportunity at trial to deal with it and he failed to take it. However, as I have indicated, I very much doubt if Mr Pratt's objection would have been upheld at the trial. The evidence concerning the second attenuation software was plainly in play.”
[547]The Claimant sought to argue that the present case was a case of the kind referred to by Rimer LJ in his judgment in Lombard, and that the course of events in the Proceedings and at the Trial was comparable to what occurred in Hawksworth. The Claimant argued that the parties had proceeded to the Trial on the basis that the Trial Causation Case was in issue in the Proceedings. The Claimant argued that this conduct continued into the Trial where, as I have already explained, the Claimant was cross examined and re-examined on the Trial Causation Case, and documents were produced in support of that case.[548]I do not think that either Lombard or Hawksworth, or the arguments derived from those authorities, assist the Claimant in the present case. I say this because this is a question with which I have already dealt in the Amendment Judgments.[549]In the First Amendment Judgment I made the following decisions in relation to the Causation Case and the pre-action conduct of the parties:(1) The Causation Case was a new case, which had not been foreshadowed in the Proceedings.(2) The Causation Case was a case which was required to be supported by evidence, which had not been provided in the Proceedings. In this context it will be recalled that the First Amendment Application was accompanied by an application to adduce a third witness statement of the Claimant. This accompanying application was not pursued, following my refusal to grant permission for the Causation Case to be pleaded.(3) If permission was to be granted for the Causation Case to be pleaded, the Defendants would need to plead their own cases in response to the Causation Case in the course of the Trial and would, in addition, be entitled further to investigate the Causation Case, again in the course of the Trial. I did not regard the disruption which all this would have caused to the Trial to be either feasible or acceptable.[550]Turning to the conduct of the parties at the Trial, I refer to the Second Amendment Judgment. As I have explained in the previous section of this judgment, in the Second Amendment Judgment I rejected the argument that the landscape had changed, in relation to the Causation Case, by reason of the evidence given by the Claimant in cross examination and re-examination and by reason of the documentary evidence produced at the Trial. I have also explained the reasons why I rejected that argument.[551]Whether or not the Claimant is formally bound by these decisions in the Amendment Judgments, and in my view he is, those decisions, and my reasoning in support of those decisions, demonstrate that the present case bears no resemblance to the type of case contemplated by Rimer LJ in Lombard, where an unpleaded issue could be dealt with at a trial, or to the circumstances which existed in Hawksworth. In my judgment the circumstances of the present case are clearly distinguishable from both cases. As Rimer LJ pointed out in Lombard, cases where it would be unjust for the court not to entertain and decide a non-pleaded issue are likely to be rare.[552]In summary, the question of whether a party should be permitted to raise an unpleaded issue at trial is an acutely fact sensitive question, which depends upon the circumstances of that particular case. In my view, the present case is not a case where the Claimant should be permitted to pursue the relevant unpleaded issue; namely the Trial Causation Case.[553]For the reasons which I have explained in the previous section of this judgment, I have made a decision on the substance of the Trial Causation Case. If however that decision is put to one side, for the purposes of the Pleading Issue, my conclusion on the Pleading Issue, drawing together all of the analysis in this section of this judgment, is as follows. The present case is not one where the Claimant should be permitted to pursue the Trial Causation Case, in circumstances where, as I have decided, it has not been pleaded.[554]There is one further point which I should add. In their Reply Submissions the Claimant’s counsel stated that if, contrary to the Claimant’s primary case, the Trial Causation Case was not pleaded, this was “clearly accidental”. This is not a question which I can resolve on the available evidence and, in any event, I assume that any resolution of this question would have required a waiver of privilege. If however the point matters, I should say that I am sceptical of the argument that the omission was clearly accidental. In his judgment in Pantelli, Coulson J made reference to the need for the pleading to set out clearly, amongst other things, “what would have happened but for those acts or omissions” alleged to constitute the relevant breach of contract and/or negligence. The pleading of what would have happened but for the relevant breach of duty is a basic and fundamental requirement of a claim for breach of contract and/or negligence and, in the present case, of a claim for compensation pursuant to Section 563. I find it difficult to accept that the omission from the Particulars of Claim of the Trial Causation Case occurred by accident. It did occur to me that this might be a material factor to have taken into account in my substantive consideration of the Trial Causation Case, in the previous section of this judgment. I decided that it would not be appropriate to do this, given that the reasons for the omission of the Trial Causation Case must be a matter for speculation. I do however wish to make it clear that, while I cannot decide this question, I am not prepared to accept that the omission was either clearly accidental or necessarily accidental.

The Strike Out Application

[555]It seems to me to follow, from my decision on the Pleading Issue, that the Pre-emption Rights Claim is liable to be struck out. In the absence of the pleading of a case in causation, an essential element of the Pre-emption Rights Claim is missing, and the Pre-emption Rights Claim cannot succeed. The position therefore falls within the terms of the jurisdiction to strike out a statement of case in CPR 3.4(2)(a). As such, that part of the Amended Particulars of Claim which pleads the Pre-emption Rights Claim is liable to be struck out. This would, in turn, mean that the Pre-emption Rights Claim is liable to be struck out.[556]The Claimant’s counsel argued that even if the jurisdiction in CPR 3.4(2)(a) was engaged, it should not be exercised. Their argument was based on the proposition that, in the normal course, applications to strike out should be determined well in advance of a trial, and that the occasion for a claim to be struck out at the end of a trial would be rare. In this context the Claimant’s counsel cited the decision of Colman J in National Westminster Bank Plc v Rabobank Nederland [2006] EWHC 2959 (Comm).[557]A reading of the judgment of Colman J reveals however the extent to which decisions of this kind depend upon the circumstances of the relevant case. In Rabobank, for complicated procedural reasons, Colman J was confronted with an application to strike out part of the claimant’s case mid-trial, on the basis that the evidence of certain of the claimant’s witnesses made it inevitable that the relevant part of the claim would fail. Given that the basis of the strike out was not, as in the present case, a pleading point but a submission on the evidence, the judge was effectively required to consider whether the relevant part of the claim had no realistic prospect of success. In his judgment, Colman J set out the various and undesirable consequences which a decision of this kind, made in the middle of the trial, could have.[558]The present case is very different. The Strike Out Application is based on a pleading point. The evidence and arguments in the Trial have been completed. I have made a decision on the substance of the Trial Causation Case. In these circumstances there is no risk of my decision on the Strike Out Application pre-empting or being contradicted by some other part of my decision on the Pre-emption Rights Claim. Perversely, the only point now available to the Claimant in this context is that I have made a substantive decision on the Trial Causation Case, which may be said to render a decision on the Strike Out Application superfluous. For the reasons which I have given however, I have decided that I should decide the Pleading Issue and, subject to the outcome of the Pleading Issue, that I should proceed to consider the Strike Out Application.[559]In reality, it seems to me that the best point which can be made on the Claimant’s side is that I should not exercise the jurisdiction to strike out, because the Strike Out Application has been made very late. In principle, and given the failure of the Particulars of Claim, from the time of their filing and service, to plead a case in causation, it has been open to the Company to make the Strike Out Application since 27th October 2022; being the date of filing and service of the Particulars of Claim. This was one of the reasons why I refused to hear the Strike Out Application at the outset of the Trial. The Trial has, however, now concluded. I do not think that the Company’s delay in making the Strike Out Application should, as matters now stand, prevent me from exercising my jurisdiction to strike out.[560]In this context the Claimant’s counsel also cited Kim v Park [2011] EWHC 1781 (QB), when Tugendhat J explained that, where the court holds that there is a defect in a pleading, it is normal for the court to refrain from striking out the pleading unless the court has given the party concerned an opportunity to remedy the defect, by amendment, provided that there is reason to believe that the party will be in a position to remedy the defect. This is not however relevant in the present case. The opportunity to remedy the defect in the present case arose when the Claimant made the First Amendment Application and sought permission to add the Causation Case. The opportunity could not be taken because I refused to grant this permission. It follows that the situation in the present case is beyond the stage in a strike out application which was being considered by Tugendhat J. In the present case, the defect in the pleading cannot, in the light of my decisions in the Amendment Judgments, be cured by amendment.[561]The conclusion which I reach is that the Pre-emption Rights Claim is liable to be struck out pursuant to CPR 3.4(2)(a). In the light however of my decision on the Causation Issue and the Joint Liability Issue, the Pre-emption Rights Claim is also liable to be dismissed on substantive grounds, against all three of the Company and the Second and Third Defendants. In these circumstances I consider that I should hear counsel further, as necessary and following the handing down of this judgment, on the precise terms of the order which I should make to dispose of the Pre-emption Rights Claim. As matters stand therefore, I am leaving open the question of whether the Pre-emption Rights Claim should be dismissed or struck out.

The Mitigation Issue

[562]The Second to Sixth Defendants argued that the Claimant was either the cause of his own loss and/or failed to act in a way which might reasonably have been expected of the Claimant and which would have mitigated this loss, with the consequence that the Claimant was the cause of any loss which he might have suffered. The Company also argued that the Claimant had failed to mitigate any loss which he might have suffered.[563]On the basis of my findings on the Causation Issue and my conclusions on the Pleading Issue, the Mitigation Issue does not arise for decision. I will however consider briefly the Mitigation Issue as it does engage some factual questions on which it may be helpful if I make findings, in the event that this case goes further. In considering the Mitigation Issue, I find it easiest to address the arguments of the Second to Sixth Defendants. I understood the Company’s arguments on the Mitigation Issue to be advanced on the same basis as those of the Second to Sixth Defendants.[564]Before doing so, I should make reference to the judgment of Lord Leggatt JSC in BDW Trading Ltd v URS Corporation Ltd [2025] UKSC 21 [2025] 2 WLR 1095. At [174] - [176], Lord Leggatt explained what is meant by a failure to mitigate, in the following terms:
“174 I agree with URS that there is a general principle of the common law that damages cannot be recovered for consequences of a choice freely made by the claimant. But I agree with Lord Hamblen and Lord Burrows JJSC that, although it could on particular facts be relevant to questions of scope of duty or remoteness, the voluntariness or otherwise of the claimant’s conduct is most obviously and normally relevant to issues of causation and mitigation. 175 The concept of voluntary choice is often used to explain why the mitigation principle limits (or sometimes increases) the damages recoverable by a claimant in respect of a breach of duty by the defendant. Although traditionally described as a duty, it is now well recognised that mitigation is not a duty owed to the wrongdoer but is an aspect of causation: see e g Koch Marine Inc v d_Amica Societa di Navigazione arl (The Elena d_Amico) [1980] 1 Lloyd_s Rep 75, 88 (Robert Go› J); Darbishire v Warran [1963] 1 WLR 1067, 1075 (Pearson LJ). Bunge SA v Nidera BV [2015] Bus LR 987, para 81 (Lord Toulson JSC). The principle is that if the claimant chooses to respond to the defendant’s breach of duty in a way that would not reasonably be expected, damages will be assessed as if the claimant had responded in the expected way, even though in fact it did not. 176 Although the test is often said to be whether the claimant has acted reasonably, ”reasonable” is such a protean term that this statement lacks any explanatory power. In his recently published study of Mitigation in the Law of Damages (2024), p 104, Andy Summers prefers to speak of the “normal response” to breach and goes on to give an illuminating analysis of the relevant legal and descriptive norms. The general standard is captured in the approach adopted by the House of Lords in British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673, 689—690, of asking whether the course of action taken by the claimant was one which a reasonable and prudent person could be expected to take in the ordinary course of business. In addressing this question, certain business expectations have hardened into legal norms. The most significant is the market rule. Where the defendant’s breach of duty has deprived the claimant of goods or services and there is an available market in which an adequate substitute can be obtained, the claimant is expected to enter the market at the earliest reasonable opportunity and obtain such a substitute.”
[565]Applying this analysis, the question raised in the present case by the Mitigation Issue is whether the Claimant failed to respond to the First Breach and the Second Breach in a way which might reasonably have been expected and, if so, what would have happened if the Claimant had responded as he might reasonably have been expected to respond.[566]The first argument advanced by the Second to Sixth Defendants was that the Claimant knew of the First Offer Letter in October 2019, and was thus able to accept the First Offer, even if the First Offer Letter was not validly communicated to him. In support of this argument the Second to Sixth Defendants rely upon the conversations with Mr Macharia and Mr Karauri in October 2019. On this basis, the argument is that the Claimant had the opportunity to accept the First Offer, but chose not to do so.[567]On my findings, I cannot see that this first argument is feasible. I have already found that the Claimant did not receive the First Offer Letter until he obtained the hard copy from DHL on 21st November 2019. I have also found that the conversations with Mr Macharia and Mr Karauri were general rather than specific. They demonstrate that the Claimant was generally aware that a capital raise was in progress, without being aware that actual offers had been made. I have also found that the Claimant did not become aware that offers had been made pursuant to the First Capital Raise until shortly before he sent his email of 11th November 2019. On the basis of these findings, it seems to me that the required factual basis for the first argument advanced by the Second to Sixth Defendants does not exist.[568]The second argument is that the Claimant had the opportunity to subscribe in response to the First and Second Capital Raises because, in the aftermath of the Second Capital Raise and the Second Offer, the Claimant was offered the opportunity to subscribe for the 170,000 new shares to which he claimed to be entitled. The argument is that the Claimant was himself responsible for his failure to take up this opportunity.[569]I do not think that the negotiations which followed the Second Offer, in the course of 2020, support this argument. I have already set out the communications between the parties, in the relevant narrative section of this judgment. Starting with the email of 27th December 2019, from the Second and Third Defendants to the Claimant, this set out three steps which the Claimant was required to take, in order for his “request to be considered in good faith”. I take the reference to the Claimant’s request to be a reference to the request set out at the conclusion of his email to Ms Wachera, copied to the Second to Fifth Defendants, which concluded with a request for reversal of the dilution of his shareholding in the Company. The steps to be taken by the Claimant were as follows:
“Step 1 is to fill the ORIGINAL ACCEPTANCE FORM sent to you in the OHL package, which you have now confirmed you have received. Step 2 is to fit the ORGINAL ACEPTANCE FORM sent to you today (20th of December, 2019) for the additional capital raise required to keep the companies from default by mid-January. Step 3 is to submit the sum of the funds for both capital raises (GBP 170,000) into the provided bank account, where the funds will be in escrow until the legal resolutions are passed at the next shareholder meeting. As always, we are available to discuss any further concerns that you might have.”
As always, we are available to discuss any further concerns that you might have.”[570]There are a number of points to be made in relation to these steps. First, the email of 27th December 2019 did not contain an actual offer of shares, but rather agreement to consider the Claimant’s request in good faith, if the three steps were taken. Second, the Claimant was being required to pay £170,000 into an escrow account, with no guarantee that his request for reversal of the dilution of his shareholding would be agreed. This was so not only because the email of 27th December 2019 had not contained any actual offer which could be the subject of a binding acceptance, but also because it was made clear to the Claimant that the sum of £170,000 would be held in the escrow account until “the legal resolutions” were passed at the next meeting of the shareholders in the Company. Third, the Claimant was required to fill in the acceptance form sent with the Second Offer Letter. Given that the Second Offer Letter contained an offer of shares which was made on the erroneous basis that the Claimant’s shareholding had already been diluted by the First Allotment, the Claimant could not feasibly sign the acceptance form accompanying the Second Offer Letter. It is not an answer to this problem to say that the reference to £170,000 in step 3 clearly meant that signing the acceptance form could be treated as acceptance of an offer of 85,000 shares. In circumstances where there was an absence of trust between the parties, it should have been appreciated that signing the acceptance form which accompanied the Second Offer Letter was inconsistent with what was being proposed. Fourth, no bank account details were given for the payment required by step 3.[571]The Claimant’s email of 2nd January 2020 picked up the second, third and fourth points made in my previous paragraph. In my view, it was reasonable for the Claimant to raise these points, independent of the fact that taking the steps did not, by reference to the email from the Second and Third Defendants of 27th December 2019, commit the Second and Third Defendants to do more, by the Company, than to consider in good faith the Claimant’s request for reversal of the dilution of his shareholding.[572]Thereafter, and notwithstanding the assurance of the Second Defendant in his email to the Claimant on 2nd January 2020, that he would respond shortly to the Claimant’s comments, which were said to have been “well noted”, nothing happened for a considerable period of time. The Claimant chased for a response by his email of 24th June 2020, which elicited a response from the Second Defendant on 30th June 2020. This email did not, however, deal with all of the Claimant’s points. Bank account details were provided, and the Claimant was told that a special shareholder’s meeting would be called to approve the capital raise, which I take to mean that the meeting would be called to approve the issue of new shares to the Claimant. The problem with signing the acceptance form accompanying the Second Offer Letter was not addressed by the Second Defendant. The Claimant also remained in a position where he would be required to pay the sum of £170,000 into the specified bank account, but would then have to wait to see if the issue of the new shares was approved at a shareholders’ meeting.[573]The Claimant responded on 3rd July 2020, reiterating the problem with the acceptance form, and raising some reasonable questions on the escrow account and the timing of the shareholders’ meeting. Despite further chasing emails from the Claimant on 17th September 2020 and 29th September 2020, the Claimant’s email of 3rd July 2020 was not answered. The Second Defendant drafted an answer, in the October 2020 Email, but for reasons of which I am not aware, the October 2020 Email was not sent. Instead, the next email was sent by the Claimant on 25th November 2020, which reviewed the history of the dispute in some detail and made various allegations of unlawful and improper conduct. This email appears to have marked the end of the direct negotiations between the Claimant and the Second Defendant, arising out of the Second Capital Raise and the Second Offer.[574]In my judgment, this chain of communication does not support either the argument that the Claimant failed to act as he might reasonably have been expected to act in mitigation of his loss or the argument that the Claimant was the cause of his own loss, assuming that there was such loss. The negotiations came to an end because the Second Defendant did not provide an answer to the matters raised in the Claimant’s email of 3rd July 2020. Given that the matters raised by the Claimant in this email seem to me to have been reasonable ones for the Claimant to raise, and given that no answer was provided on those matters, I do not see how the Claimant can be held responsible for the failure of the negotiations.[575]If, therefore, the Mitigation Issue had arisen for decision, and if it is assumed that the Claimant was entitled to pursue the Trial Causation Case and had succeeded in proving that case, I would have decided, in relation to any recoverable loss which the Claimant was able to establish,(i) that the Claimant did not himself cause that loss by his own conduct and(ii) that there was no failure on the part of the Claimant to act as he might reasonably have been expected to act in mitigation of that loss.

The Compensation Issue

[576]On the basis of my findings on the Causation Issue and my conclusions on the Pleading Issue, the Compensation Issue is another issue which does not arise for decision. In the case of the Compensation Issue, I have come to the conclusion that I should not decide this issue, for the following reason.[577]The Second to Sixth Defendants argued that even if breach and causation were established, the Claimant had still suffered no loss because the shares in the Company had no value on the dates when the Claimant could and would, on his case, have subscribed in response to the First Capital Raise and the Second Capital Raise. The Claimant would have expended £170,000 on shares which had no value. The Company argued to the same effect. Essentially, the Defendants’ argument was that if the Claimant was entitled to any compensation, the dates on which such compensation should be assessed were the dates on which the Claimant, on his case, could and would have been able to subscribe in response to the First Capital Raise and the Second Capital Raise. These dates were identified as the dates when the respective time limits for acceptance of the First Offer and the Second Offer expired. On the expert evidence of Mr Weaver, which I have accepted, the Defendants are right to say that the Claimant cannot demonstrate any loss, provided that they are also right to say that the compensation must be assessed as at the dates when the Claimant could and would, on his case, have subscribed in response to the First Capital Raise and the Second Capital Raise.[578]The Claimant disputed this analysis. His argument was that compensation should be assessed at the date of the Trial, and calculated by reference to the difference between his current diluted shareholding in the Company and the current value of a 17% shareholding in the Company, with credit being given for the amount which the Claimant would have had to subscribe, in response to all three Capital Raises, in order to maintain his 17% shareholding. On Mr Weaver’s valuation of the shares as at 31st December 2024, and on the Claimant’s case on the Compensation Issue, the amount of compensation to which the Claimant would be entitled would be substantial.[579]In summary therefore, the Compensation Issue engaged a legal issue on the correct date for assessing the compensation due to the Claimant, assuming that breach and causation were established. In relation to this legal issue there was no direct authority on the assessment of compensation pursuant to Section 563. Instead, I was confronted with wide ranging sets of submissions on the date of the assessment, accompanied by an equally wide range of authorities.[580]In my view, I should not decide the legal issue engaged by the Compensation Issue in circumstances where, following my decisions on the Causation Issue and the Pleading Issue, the Compensation Issue does not have to be decided. The Compensation Issue raises what seems to me to be an important question of law in relation to Section 563, on which it appears that there is currently no direct authority. I do not think that the question should be decided in a case where the question is hypothetical.[581]This leaves the principal factual issue which would have been engaged by the Compensation Issue. This principal factual issue does not arise, given my earlier decisions on the Pre-emption Rights Claim. I should however say something about this issue, as it features in the rival list of issues filed by the parties. The principal factual issue is whether the Claimant would and could have subscribed in response to the Third Capital Raise, if the Third Offer had offered him 17% of the new shares being issued.[582]As I have noted, the Claimant’s case on the Compensation Issue includes, as it must, the argument that the Claimant would and could have subscribed in response to the Third Capital Raise if the First Breach and the Second Breach had not occurred and if, as a result, the Third Offer had been framed as an offer of 17% of the new shares being issued by the Company pursuant to the Third Capital Raise. On that hypothesis, the Third Offer would have had to offer the Claimant 17% of the new shares, if it is assumed that the First Breach and the Second Breach had not occurred, and if it is further assumed that the Claimant would and could have subscribed for 17% of the new shares issued pursuant to the First Capital Raise and the Second Capital Raise. This, in turn, engages the factual questions of whether the Claimant would and could have subscribed for 17% of the new shares, in response to the Third Capital Raise, if the Third Offer had been framed as an offer of 17% of the new shares.[583]In theory, it is open to me to address this principal factual issue, so that my findings on this issue are on record. In reality, it seems to me that this is not feasible. I have already found that the Claimant would not and could not have subscribed in response to the First Capital Raise or the Second Capital Raise if the First Breach and/or the Second Breach had not occurred. In these circumstances, it seems to me that what I have previously referred to as the Would and Could Questions cannot sensibly be answered in relation to the Third Capital Raise. They require me to make assumptions contrary to my factual findings on the Causation Issue. If I make those assumptions, I am making an artificial change to the factual landscape in which the Would and Could Questions in relation to the Third Capital Raise, both being questions of fact, fall to be answered. Given my findings on the evidence in relation to the Causation Issue, I am reluctant to embark on an exercise which assumes an alternative factual hypothesis which finds no support in the evidence, in relation to the First and Second Capital Raises.[584]I have already made reference to the conduct of the Claimant in response to the Third Offer, in the context of my analysis of the Causation Issue. As I have explained, I did not find that this conduct threw any evidential light on the Would Question and the Could Question in relation to the First and Second Capital Raises. I have also already noted that the Third Offer was not made until some time later, in December 2021, by which time the parties were engaging in pre-action correspondence by their solicitors.[585]In these circumstances, all that I will add, by way of findings on the Would and Could Questions in relation to the Third Capital Raise, is this. It is true that the Claimant did attempt to accept the Third Offer, by submitting the acceptance form with his amendments. There was, however, no evidence to suggest that anything had changed, either in relation to the Claimant’s financial circumstances, so far as the same were in evidence, or in terms of the Claimant’s mistrust of those on the other side of the, by then, long standing rift in the Business, as between 2019/2020 and December 2021. So far as this may be relevant, I find that the Claimant has not proved that he would and could have subscribed in response to the Third Capital Raise, if it is assumed that the Third Offer had offered him 17% of the new shares.[586]Returning to the Compensation Issue itself, for the reason which I have given, I do not decide the Compensation Issue.

The Pre-emption Rights Claim – overall conclusion

[587]For the reasons which I have set out, the Pre-emption Rights Claim falls to be dismissed or struck out, on the following bases:(1) The Pre-emption Rights Claim fails on substantive grounds. The Claimant has established the First Breach and the Second Breach. By reason however of my decision on the substance of the Trial Causation Case, the Claimant has failed to establish that he was caused any loss, either by the First Breach or by the Second Breach. The Claimant would not have acted differently if the First Breach and/or the Second Breach had not occurred. In addition to this, the Pre-emption Rights Claim would have failed in any event, as against the Second and Third Defendants, by reason of my decision on the Joint Liability Issue.(2) I have decided, pursuant to my decision on the Pleading Issue and pursuant to my decision on the Strike Out Application, that the Pre-emption Rights Claim is liable to be struck out pursuant to CPR 3.4(2)(a).[588]As I have said, I will hear counsel further, as necessary and following the handing down of this judgment, on the precise terms of the order which I should make to dispose of the Pre-emption Rights Claim.

The Section 994 Claim – the statutory framework and the meaning of unfair prejudice

[589]Section 994(1) provides as follows:
“(1) A member of a company may apply to the court by petition for an order under this Part on the ground— (a) that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or (b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial.” (a) that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or (b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial.”
[590]In his judgment in Loveridge v Loveridge [2020] EWCA Civ 1104 [2022] 2 BCLC 314, Floyd LJ distilled the following principles from the authorities, at [41]:
“41. A number of uncontroversial propositions can be derived from the authorities cited to this court: i) For a petition to be well founded the acts or omissions of which the petitioner complains must consist of the conduct of the affairs of the company: Hawkes & Cuddy (No 2) [2007] EWHC 2999 at [202] per Lewison J; ii) The conduct of those affairs must have caused prejudice to the interests of the petitioner as a shareholder: ibid ; iii) The prejudice so caused must be unfair: ibid ; iv) A minority shareholder cannot normally complain of conduct which is in accordance with the company's constitution unless he can establish a breach of the rules on which it is agreed that the affairs of the company should be conducted, or the use of those rules in a way which equity would regard as contrary to good faith: O'Neill v Phillips [1999] 1 WLR 1092 at 1099 A-B per Lord Hoffmann; v) Although the term "legitimate expectation" has been used in connection with establishing equitable restraint on the exercise of constitutional power, that expression does not have "a life of its own", supplanting traditional equitable principles: ibid at 1102 B-F.” i) For a petition to be well founded the acts or omissions of which the petitioner complains must consist of the conduct of the affairs of the company: Hawkes & Cuddy (No 2) [2007] EWHC 2999 at [202] per Lewison J; ii) The conduct of those affairs must have caused prejudice to the interests of the petitioner as a shareholder: ibid ; iii) The prejudice so caused must be unfair: ibid ; iv) A minority shareholder cannot normally complain of conduct which is in accordance with the company's constitution unless he can establish a breach of the rules on which it is agreed that the affairs of the company should be conducted, or the use of those rules in a way which equity would regard as contrary to good faith: O'Neill v Phillips [1999] 1 WLR 1092 at 1099 A-B per Lord Hoffmann; v) Although the term "legitimate expectation" has been used in connection with establishing equitable restraint on the exercise of constitutional power, that expression does not have "a life of its own", supplanting traditional equitable principles: ibid at 1102 B-F.”
[591]The concept of unfairness was considered at some length by Lord Hoffmann in his speech in O’Neill v Phillips [1999] 1 WLR 1092, at 1098D-1102B, where Lord Hoffmann explained the principles which applied in determining whether the affairs of a company were being or had been conducted in a manner which was “unfairly prejudicial” to the interests of its members or part of its members, within the meaning of Section 459(1) of the Companies Act 1985 (as amended). The relevant part of Lord Hoffmann’s speech, which needs to be read in full, is too lengthy to quote in full, but I note, in particular, the following parts of the explanation of what constitutes unfairness in the context of an unfair prejudice petition.[592]At 1098D-F, Lord Hoffman explained the general limits of the concept of fairness:
“In section 459 Parliament has chosen fairness as the criterion by which the court must decide whether it has jurisdiction to grant relief. It is clear from the legislative history (which I discussed in In re Saul D. Harrison & Sons Pic. [1995] 1 B.C.L.C. 14, 17-20) that it chose this concept to free the court from technical considerations of legal right and to confer a wide power to do what appeared just and equitable. But this does not mean that the court can do whatever the individual judge happens to think fair. The concept of fairness must be applied judicially and the content which it is given by the courts must be based upon rational principles. As Warner J. said in In re J. E. Cade & Son Ltd. [1992] B.C.L.C. 213, 227: "The court . . . has a very wide discretion, but it does not sit under a palm tree." Although fairness is a notion which can be applied to all kinds of activities, its content will depend upon the context in which it is being used. Conduct which is perfectly fair between competing businessmen may not be fair between members of a family. In some sports it may require, at best, observance of the rules, in others ("it's not cricket") it may be unfair in some circumstances to take advantage of them. All is said to be fair in love and war. So the context and background are very important.”
[593]At 1098G-B, Lord Hoffmann identified the following two features of unfairly prejudicial conduct:
“In the case of section 459, the background has the following two features. First, a company is an association of persons for an economic purpose, usually entered into with legal advice and some degree of formality. The terms of the association are contained in the articles of association and sometimes in collateral agreements between the shareholders. Thus the manner in which the affairs of the company may be conducted is closely regulated by rules to which the shareholders have agreed. Secondly, company law has developed seamlessly from the law of partnership, which was treated by equity, like the Roman societas, as a contract of good faith. One of the traditional roles of equity, as a separate jurisdiction, was to restrain the exercise of strict legal rights in certain relationships in which it considered that this would be contrary to good faith. These principles have, with appropriate modification, been carried over into company law. The first of these two features leads to the conclusion that a member of a company will not ordinarily be entitled to complain of unfairness unless there has been some breach of the terms on which he agreed that the affairs of the company should be conducted. But the second leads to the conclusion that there will be cases in which equitable considerations make it unfair for those conducting the affairs of the company to rely upon their strict legal powers. Thus unfairness may consist in a breach of the rules or in using the rules in a manner which equity would regard as contrary to good faith.”
[594]What is required is unfairness. The test is what is unfair, not what is unlawful. Nevertheless, the starting point for the investigation of the court into unfairness is the question of whether the directors of the relevant company have acted unlawfully. In her judgment in Re Tobian Properties Ltd [2012] EWCA Civ [2013] Bus LR 753, Arden LJ (as she then was), after quoting Lord Hoffmann in O’Neill v Phillips, explained this principle in the following terms, at [22]:
“22. One of the most important matters to which the courts will have regard is thus the terms on which the parties agreed to do business together. These are commonly found in the company's articles. They also include any applicable rights conferred by statute. In addition, the terms on which the parties agreed to do business together include by implication an agreement that any party who is a director will perform his duties as a director. Primary among these duties are the seven duties now codified in sections 171 to 177 of the Companies Act 2006 . Under these duties, a director must act in the way which he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole. There is also the well-known duty to avoid conflicts of interest and duty: a director must avoid a situation in which he has an interest which conflicts with that of the company. Six out of seven of these duties are fiduciary duties, that is, duties imposed by law on persons who exercise powers for the benefit of others. Non-compliance by the respondent shareholders with their duties will generally indicate that unfair prejudice has occurred.”
[595]Turning to the question of whether the relevant conduct has been prejudicial, within the meaning of Section 994(1), it is clear that prejudice is not confined to financial loss. The element of unfairly prejudicial conduct was explained by David Richards J (as he then was) in Re Coroin [2012] EWHC 2343 (Ch), at [630]:
“630. Prejudice will certainly encompass damage to the financial position of a member. The prejudice may be damage to the value of his shares but may also extend to other financial damage which in the circumstances of the case is bound up with his position as a member. So, for example, removal from participation in the management of a company and the resulting loss of income or profits from the company in the form of remuneration will constitute prejudice in those cases where the members have rights recognised in equity if not at law, to participate in that way. Similarly, damage to the financial position of a member in relation to a debt due to him from the company can in the appropriate circumstances amount to prejudice. The prejudice must be to the petitioner in his capacity as a member but this is not to be strictly confined to damage to the value of his shareholding. Moreover, prejudice need not be financial in character. A disregard of the rights of a member as such, without any financial consequences, may amount to prejudice falling within the section.”
[596]It will also be noted, from what David Richards J said at [631], that prejudice may be more difficult to establish where the acts complained of have no financial consequences:
“631. Where the acts complained of have no adverse financial consequence, it may be more difficult to establish relevant prejudice. This may particularly be the case where the acts or omissions are breaches of duty owed to the company rather than to shareholders individually. If it is said that the directors or some of them had been in breach of duty to the company but no loss to the company has resulted, the company would not have a claim against those directors. It may therefore be difficult for a shareholder to show that nonetheless as a member he has suffered prejudice. In Rock (Nominees) Limited v RCO Holdings Plc [2004] BCC 466 the respondent directors of the company procured the sale of an asset to a company of which they were also directors. It was alleged to be a sale at an undervalue and procured in breach of the respondent directors’ fiduciary duties to the company. The evidence established that the price paid was not an undervalue but was the best price reasonably obtainable, and the Court of Appeal upheld the decision at first instance that no prejudice had been caused to the petitioner. At paragraph 79 of this judgment, with which the other members of the Court agreed, Jonathan Parker LJ said; “ As to the judge’s finding of breach of fiduciary duty on the part of the respondent directors, it is plain that, as the judge found, the respondent directors were “in a position of hopeless conflict”
. Further, they would undoubtedly have been well advised to obtain an independent valuation. However, no harm was in fact done and no damage or prejudice was caused. Nor is there any question of the respondent directors being personally accountable in any way. That being so, it seems to me to be inappropriate to reach a conclusion that they breached their fiduciary duties, as it were, in the abstract”. “ As to the judge’s finding of breach of fiduciary duty on the part of the respondent directors, it is plain that, as the judge found, the respondent directors were “in a position of hopeless conflict”. Further, they would undoubtedly have been well advised to obtain an independent valuation. However, no harm was in fact done and no damage or prejudice was caused. Nor is there any question of the respondent directors being personally accountable in any way. That being so, it seems to me to be inappropriate to reach a conclusion that they breached their fiduciary duties, as it were, in the abstract”.[597]The question of when unfairly prejudicial conduct can be established, notwithstanding the absence of any adverse financial consequences, was the subject of helpful further explanation by His Honour Judge Hodge KC (sitting as a Deputy Judge of the High Court) in Re Macom GmbH [2021] EWHC 1661 (Ch), at [47]:
“47. I accept Mr Harper's submission that prejudice is not limited to cases where there is an actual, or potential, diminution in the value of the petitioner's shareholding. Rather, it may extend to a breakdown of the relationship of trust and confidence amongst the shareholders as a result of the respondent's conduct of the company's affairs and failures of good administration. In my judgment, that proposition is established by the observation of David Richards J in Re Coroin, McKillen v Misland (Cyprus) Investments Ltd [2012] EWHC 2343 (Ch) at [630] that "… prejudice need not be financial in character. A disregard of the rights of a member as such, without any financial consequences, may amount to prejudice falling within the section." Mr Newington-Bridges pointed to the judgment of Chief ICCJ Briggs in Michel v Michel [2019] EWHC 1378 (Ch) at [77]-[78] where reference was made to the warning sounded by David Richards J at [631] that: "Where the acts complained of have no adverse financial consequence, it may be more difficult to establish relevant prejudice. This may particularly be the case where the acts or omissions are breaches of duty owed to the company rather than to shareholders individually. If it is said that the directors or some of them had been in breach of duty to the company but no loss to the company has resulted, the company would not have a claim against those directors. It may therefore be difficult for a shareholder to show that nonetheless as a member he has suffered prejudice." I agree with Mr Harper that David Richards J was not ruling out a finding of unfair prejudice where the acts complained of have no financial consequences; he was merely stating that it may be more difficult to establish relevant prejudice in such a case. Where a petitioner has a right to be consulted and involved in the management of the company as a condition of his investment, he may not suffer any financial loss if he is excluded from such consultation and involvement; but he may nevertheless suffer unfair prejudice because he is being denied the full benefit of his investment in the company.”
[598]Where unfairly prejudicial conduct has been established, the court has a wide discretion as to the order which it may make. I was quoted a good deal of authority on the question of what (if any) remedy should be granted in the present case, in the event that unfairly prejudicial conduct was established. For present purposes however, I do not think that it is necessary to do more than set out Section 996:
“(1) If the court is satisfied that a petition under this Part is well founded, it may make such order as it thinks fit for giving relief in respect of the matters complained of. (2) Without prejudice to the generality of subsection (1), the court's order may— (a) regulate the conduct of the company's affairs in the future; (b) require the company— (i) to refrain from doing or continuing an act complained of, or (ii) to do an act that the petitioner has complained it has omitted to do; (c) authorise civil proceedings to be brought in the name and on behalf of the company by such person or persons and on such terms as the court may direct; (d) require the company not to make any, or any specified, alterations in its articles without the leave of the court; (e) provide for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, the reduction of the company's capital accordingly.” (a) regulate the conduct of the company's affairs in the future; (b) require the company— (i) to refrain from doing or continuing an act complained of, or (ii) to do an act that the petitioner has complained it has omitted to do; (c) authorise civil proceedings to be brought in the name and on behalf of the company by such person or persons and on such terms as the court may direct; (d) require the company not to make any, or any specified, alterations in its articles without the leave of the court; (e) provide for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, the reduction of the company's capital accordingly.”

The Section 994 Claim – my methodology

[599]With the provisions of Section 994 and the above principles in mind, I now turn to the question of whether the affairs of the Company have been conducted in a manner which was unfairly prejudicial to the Claimant. I refer to this question as whether the affairs of the Company have (in the past) been conducted in an unfairly prejudicial matter because, as I understand the grounds of unfairly prejudicial conduct relied upon by the Claimant, the alleged unfairly prejudicial conduct is concerned with what has already happened, as opposed to what is currently happening.[600]I will start by working through the grounds on which it is alleged that the affairs of the Company have been conducted in a manner which was unfairly prejudicial to the Claimant. In the case of each ground, I will decide whether the ground has been established. I will then come to the question of whether the affairs of the Company have been conducted in a manner unfairly prejudicial to the interests of the Claimant. In carrying out this exercise I shall continue to adopt the classification of the Grounds (Grounds 1-11) established by the Second to Sixth Defendants, which I have adopted earlier in this judgment.[601]It will be recalled that Ground 3 is not pursued. Ground 3 was the allegation that the Second and Third Defendants claimed there had been a decision at the November 2019 Company Board Meeting to raise an additional £500,000 in capital, when in fact there had been no such decision, and that the minutes of that meeting had been falsified in an attempt to demonstrate that there had been such a decision.[602]For reasons which I will explain, I start with Ground 10.

Ground 10

[603]I start with the question of whether the Alleged Scheme existed or, as it is framed in Ground 10, whether the Second and Third Defendants, in acting as they are alleged to have acted in relation to the Allotments, were proceeding in accordance with a scheme to dilute the Claimant’s interest in the Company; being a scheme which had been agreed between the Second and Third Defendants and the Fourth to Sixth Defendants. I start with this question because it is relevant to, and overlaps with, a number of the Grounds.[604]The starting point is a reminder of what is pleaded in the Amended Particulars of Claim, so far as the Alleged Scheme is concerned. The Alleged Scheme is pleaded in paragraph 96 of the Amended Particulars of Claim:
“96. It is further properly to be inferred that: 96.1. the Co-Directors in acting as set out in these Particulars of Claim in relation to the issue and allotment of shares were proceeding in accordance with a scheme to dilute the Claimant’s interests in the Company which had been agreed between the Co-Directors and the Fourth to Sixth Defendants; 96.2. the knowledge and intentions of the Co-Directors as set out herein were also the knowledge and intentions of the Fourth to Sixth Defendants.” 96.1. the Co-Directors in acting as set out in these Particulars of Claim in relation to the issue and allotment of shares were proceeding in accordance with a scheme to dilute the Claimant’s interests in the Company which had been agreed between the Co-Directors and the Fourth to Sixth Defendants; 96.2. the knowledge and intentions of the Co-Directors as set out herein were also the knowledge and intentions of the Fourth to Sixth Defendants.”
[605]The facts and matters from which the inference of the Alleged Scheme is to be drawn are then set out in some detail in paragraph 97, including the new paragraph 97.4, which was added by the First Amendment Application.[606]There are a number of difficulties with the Alleged Scheme, starting with findings which I have already made in this judgment.[607]The starting point, in terms of the case for the Alleged Scheme, is the Claimant’s case that there was no need for the First Capital Raise or the Second Capital Raise, because there was sufficient cash within the Business, in the last quarter of 2019, to support the Company. This case has not, however, been established. The reverse has been established. I refer to my findings on the expert evidence of Mr Weaver. I need not repeat those findings in full. In particular, I have found that both the First Capital Raise and the Second Capital Raise were, in financial terms, justified and necessary. The Company required the relevant funds, and had no other means of raising the funds. My findings on the expert evidence, and the failure of the Claimant’s case on the financial position, do not necessarily mean that the Alleged Scheme did not exist. It remains possible that the Second to Fifth Defendants decided to take advantage of the need for the First and Second Capital Raises in order to implement a scheme to dilute the shareholding of the Claimant in the Company. My findings on the financial position do, however, render it less plausible that the Alleged Scheme existed.[608]Next, there are my findings on the Joint Liability Issue. I have found that neither the Second Defendant nor the Third Defendant deliberately procured that the First Offer Letter was sent to addresses at which they or either of them knew or intended or hoped that the First Offer Letter would not or might not reach the Claimant. I have found that there was no knowing authorisation or permission by the Second Defendant or the Third Defendant in relation to the First Breach or the Second Breach. Again, this does not rule out the existence of the Alleged Scheme. Again, it renders its existence less plausible.[609]There are also my findings on the Forgery Allegations. The Claimant has failed to establish all four of the Forgery Allegations. The dishonest conduct alleged against, respectively, the Third Defendant, Mr Macharia and the Second Defendant has not been established. Indeed, in the case of Mr Macharia it is not alleged in paragraph 96 of the Amended Particulars of Claim that he shared in the knowledge and intentions of the Second to Sixth Defendants, in relation to the Alleged Scheme. Again, all this does not rule out the existence of the Alleged Scheme. Again, it renders its existence less plausible. If the Forgery Allegations had been established, they would have provided support for the case that the Second and Third Defendants, assisted by Mr Macharia, were working in concert to dilute the Claimant’s shareholding in the Company.[610]The Claimant has also alleged that the Third Defendant was the nominee of the Fifth Defendant, her brother, on the board of the Company, and that the Second Defendant was the nominee of the Fourth Defendant on the board of the Company. The evidence does not seem to me to support this case.[611]In terms of the Second Defendant's appointment, the evidence in cross examination of the Fourth Defendant was that the Claimant nominated the Second Defendant to the board of the Company. Whether that is right or not, there was no evidence that it was the Fourth Defendant who nominated the Second Defendant to the board of the Company. Beyond this however, and of more importance, is the fact that there is simply not the evidence to suggest that the Second Defendant was acting as the nominee of the Fourth Defendant in his directorship of the Company. As I have already commented, there were difficulties with the evidence of the Second Defendant. What however came across very clearly, in the Second Defendant’s evidence, is that he was not the sort of person to act as the nominee of any other person, in performing his duties as a director of the Company.[612]So far as the Third Defendant was concerned, the evidence was that she was introduced to the Business by the Fifth Defendant. The Fourth Defendant did, however, give evidence in cross examination, which I accept, that the Third Defendant was appointed by the Claimant and the Fourth Defendant, and that the Fifth Defendant was not involved in the decision to appoint her because he had proposed the Third Defendant for a role in the Business and was the brother of the Third Defendant, thereby creating a conflict of interest in his position. Beyond this however, and as with the Second Defendant, there is simply not the evidence to suggest that the Third Defendant was acting as the nominee of the Fifth Defendant in her directorship of the Company. In the case of the Third Defendant, in contrast to the position of the Second Defendant, my impression was that the Third Defendant was a person who could have been subject to the external influence of the Fifth Defendant, in her directorship of the Company. The evidence does not however support the case that this occurred, or that the Third Defendant was the nominee of the Fifth Defendant.[613]Turning to the Fourth Defendant and the Fifth Defendant, there is a similar absence of evidence that they were directing the operations of the Company through the Second and Third Defendants, as their respective nominees. The position is not however simply one of an absence of evidence.[614]The allegation that the Fourth Defendant was an effective director of the Company, through the nomineeship of the Second Defendant, is seriously undermined by the fact that the Fourth Defendant made an offer to dispose of his shares to his fellow shareholders by an email circulated on 22nd March 2019. It is not entirely clear, on reading the email, which shares were being offered for acquisition. The terms of the email were not explored in cross examination because the Fourth Defendant was cross examined, initially, on the erroneous basis that he had not in fact made an offer to dispose of his shares. Mr Macpherson, quite properly, corrected the error later in the cross examination. Such errors do occur and the error, which was minor, is to be excused. I mention it only because it explains why I am not entirely clear on what shares were being offered by the email of 22nd March 2019. My impression, on reading the email, was that the Fourth Defendant was offering to dispose of his shares in Pevans. The more relevant point however is that the Fourth Defendant gave evidence in cross examination, which I accept, that he made this offer because he was fed up with the disputes which were occurring, and wanted to exit the Business. Given the rift which had opened up between the shareholders by March 2019, I do not find this evidence surprising. It fits with the situation of the Business, as it existed in March 2019, when the disputes were aired at the March 2019 Meetings. I also accept the evidence of the Fourth Defendant, given later in cross examination, that he participated in the Capital Raises not in any expectation of a gain, but because he felt obliged to do so as a responsible shareholder and businessman.[615]Turning to the Fifth Defendant, his evidence in cross examination, which I accept, was that by 2019 he was not participating in the decisions of “the group”, which I took to mean the Business, because he was predominantly concentrating on Sportpesa SA, the vehicle for expansion of the Business into South Africa.[616]In summary, I find that the Second Defendant was never the nominee of the Fourth Defendant, in his directorship of the Company. I also find that the Third Defendant was never the nominee of the Fifth Defendant, in her directorship of the Company.[617]There is one further point which is worth adding, in the context of the position of each of the Second Defendant and the Third Defendant. It is important to keep in mind that the Third Defendant was not a shareholder in the Company. It is also important to keep in mind that, although the Second Defendant came across as conscientious in his duties as a director of the Company, he was entitled only to a relatively small salary of £36,000 per annum, which was not in fact paid, and had other important business interests, outside the Business. Neither the Second Defendant nor the Third Defendant appear obvious candidates either to act at the direction of a third party in relation to the management of the Company or to be the principals or agents in a scheme to dilute the Claimant’s shareholding in the Company.[618]Surveying the evidence more generally, in the context of the Alleged Scheme, the notable feature of this evidence is that it does not disclose the sort of dealings between the alleged actors in the Alleged Scheme that one would expect to see, if the Alleged Scheme had existed. The Claimant would say that such documents do exist, or at least did exist, and have not been disclosed as they should have been. While I do not think that this complaint has been established, the more important point seems to me to be this. If one considers the evidence that there is of what was happening at the times of the Capital Raises, which is set out in summarised form in the narrative sections of this judgment, the course of events and the dealings of the relevant actors simply do not support the inference that there was a scheme between the Second to Fifth Defendants to dilute the Claimant’s shareholding.[619]It is not necessary to go through all of this evidence, or each of the matters relied upon in paragraph 97 of the Amended Particulars of Claim in support of the inference of the Alleged Scheme. I will however highlight the following areas of the evidence, in order to illustrate what I have said in my previous paragraph.[620]The relevant evidence includes a series of emails which were sent on 18th September 2019. On that day, an email was sent by Breadon Jeacocks, a Finance Manager in the Business to the Third Defendant. The email said this:
“Hi Kalina, SPSA currently has sufficient cash for the upcoming payroll run and for invoices falling due before month-end. Without relying on operations we will struggle to meet demand for all invoices received beginning of October. As per the budget I've recently sent, SPSA will need £800k for the remainder of 2019: • £250k to meet all of September and October's financial commitments • £350k for November's financial commitments (Including sponsorship payment) • £200k for December's financial commitments Thank you very much”
Thank you very much”[621]The sequence of the emails is not entirely clear, but on the same day the Third Defendant sent an email, which stated as follows:
“Afternoon, There is not enough free cash in UK to fund them with 250k in September ( for Sept& Oct) . Looking at their budget they need 800k by the end of 2019 and 1.4m by June 2020, total 2,2m . Looking for your thoughts”
Looking for your thoughts”[622]It is not clear to whom this email was sent, but I assume that the email was sent to the Second Defendant because a reply came in from the Second Defendant, which was copied to the Fourth and Fifth Defendants, headed “Re: SPSA – Cash flow requirements”, which stated as follows:
“Thank you Kalina. Gene/Gero, Even with Kenya restart in October, we will not have enough funds to support South Africa, UK, Italy and Isle of Man. Unless we cut the expenses by 50% and raise $1MM in September we spoke about and possibly another $lMM in October/November we will fall into receivership in at least one of those countries that will cause a domino effect. Please start thinking about preparing the shareholding and yourselves for the raise of capital.”
Please start thinking about preparing the shareholding and yourselves for the raise of capital.”[623]If the Alleged Scheme had existed, I find it very difficult to understand how the alleged four actors in the Alleged Scheme could have had an email exchange in these terms. The email exchange took place in September 2019. What was said in the email exchange was consistent with what had been said as to the financial position of the Business, following the Licence Suspension, in August and September 2019 at the first two Pevans Meetings. If the Alleged Scheme had existed, I would have expected to see some reference to the financial position providing the opportunity to dilute the Claimant’s shareholding in the Company. This does not, however, appear to have been in the minds of any of the alleged actors. It defies credibility that this email exchange was concocted to create the impression that there was no scheme to dilute the Claimant’s shareholding in the Company. In their closing submissions, the Claimants’ counsel asked me to conclude, for various reasons, that there must have been a response to the Second Defendant’s email, which has not been disclosed and would not have supported the case of the Second to Sixth Defendants, if it had been disclosed. I do not consider that I am able to make this finding, but the submission seems to me to miss the overriding point in relation to this short email thread. If one assumes, consistent with the Claimant’s case but contrary to what I am prepared to accept, that this short email thread is all that has been disclosed from a much more extensive set of communications, there still remains the difficulty of understanding how the alleged actors in the Alleged Scheme could have been communicating in the terms of the email thread, if they were actually engaged in a scheme to dilute the Claimant’s shareholding in the Company.[624]The above exchange took place prior to the First Capital Raise. Following the sending out of the offer letters in respect of the First Capital Raise, on 17th October 2019, an email exchange took place between the Second Defendant and Ms Grigorian-Coates on 24th October 2019, with the Third Defendant also included as an addressee of the emails. I have already quoted one of these emails, in the relevant narrative section of this judgment. In a later email in the exchange, the Second Defendant explained the following matters to Ms Grigorian-Coates: “So noted. Please make the adjustments to the table according to how you understand it should work. I am not entirely sure if it would be in the proportion of the origin a ratio to each other or how does it work? I am also pretty certain that we will need to raise 600k next month as we will not have any pending payments come in November by the sounds of it. This means that we would need to prepare the entire process to be redone right away and maybe even kicked off at that same meeting if possible. I have added a second column to account for that raise so that we can have a more clear picture on what the company shareholding will look like. let me or Kalina know if you want us to fix the excel”.[625]The short point on this email is that the Second Defendant was making reference to the need to raise £600,000 in 2019. There is no hint of the Alleged Scheme. Instead, the need to raise more funds quickly is the focus of what the Second Defendant was saying. Again, it defies credibility that this email was concocted to create the impression that there was no scheme to dilute the Claimant’s shareholding in the Company.[626]Next there is the price at which the new shares, to be issued pursuant to the Capital Raises, was set. It was apparent from the evidence of both the Second Defendant and the Third Defendant, and I so find, that this price was not set either with the benefit of any external valuation advice, or on the basis of any calculations carried out internally. In her first witness statement, the Third Defendant gave evidence that she did not recall any discussion relating to the valuation of the Company’s shares. She thought that it was decided that the new shares would be priced at £1 because that was the price of the existing shares. She confirmed that there was no valuation carried out. In his first witness statement, the Second Defendant said that he felt that it was realistic to price the shares at a nominal price of £1 in circumstances where the Company was practically insolvent. The Second Defendant also said this:
“As regards the pricing of the shares to be issued in the First Capital Raise, SGHL had previously raised capital at £1 per share when the company was in better financial health. No concerns were raised by any of the shareholders, including Mr Ndungu, in relation to that previous capital raise.”
[627]In the context of the Claimant’s case that the Alleged Scheme existed, the Claimants’ counsel stressed the importance of the Third Capital Raise. They argued that there was no material to justify the Third Capital Raise, and invited me to conclude that there was no reasonable justification for the Third Capital Raise. They pointed out, correctly, that Mr Weaver had not been asked to consider whether the rationale given for the Third Capital Raise was true, in contrast to the position in relation to the First and Second Capital Raises. The overall submission in this context was that if, as was submitted to be the case, the Third Capital Raise could not be justified, this supported the Claimant’s case that the First and Second Capital Raises were not justified either. This in turn supported the argument that all three of the Capital Raises were part of a scheme, namely the Alleged Scheme, to dilute the Claimant’s shareholding in the Company. It is convenient to consider this submission in the context of the issue of whether the Second and Third Defendants set the price for the new shares to be issued pursuant to the Capital Raises in good faith or as part of the Alleged Scheme.[628]It seems to me that there are difficulties with this submission. First, there clearly was a strong commercial/business justification for the First Capital Raise and the Second Capital Raise; see my findings on the expert evidence of Mr Weaver. Second, the evidence of Mr Weaver, which I have accepted, is that the Company continued to have an equity value of nil at the 2021 Valuation Date. Third, there is the evidence given by the Second Defendant and the Third Defendant, respectively, in their first witness statements, where they explain the rationale for the Third Capital Raise. It is not necessary to quote that evidence in full. Essentially what is said is that the Company was still in a difficult financial situation and required further funding, that there was no means of raising the further funding other than from the Company’s shareholders, and that the price of £1 per share was set by reference to the nominal value of the Company’s shares, as with the First Capital Raise and the Second Capital Raise.[629]What is clear from Mr Weaver’s evidence is that the Second and Third Defendants were not mistaken in their perception of the financial situation of the Company. The Company still had no value. In these circumstances, the price of £1 per share, as a nominal price, was reasonable. The evidence of Mr Weaver also suggests, even if the question is not addressed directly by Mr Weaver, that the Third Capital Raise was justified and necessary, in the same way that the First and Second Capital Raises had been justified and necessary. I take the point made by the Claimant’s counsel that there is an absence of the documentation one might normally expect to see, in relation to a decision to raise capital from shareholders, in terms of the commercial justification for such a decision and in terms of the process of setting the price of the new shares to be offered to shareholders. Ultimately however, I come back to the fact that the Company continued to have no value, and to the fact that the Second and Third Defendants had already arranged two rounds of fund raising from shareholders. The Third Capital Raise took place in December 2021/January 2022. This was some time after the First and Second Capital Raises, and at a time when the parties were already in dispute and engaged in solicitor’s correspondence. I find it implausible that, in these circumstances, the Second and Third Defendants would have thought it an opportune moment to put into implementation what would have been, on the Claimant’s case, phase three of the Alleged Scheme. The much more obvious explanation for the Third Capital Raise, and the explanation which I find to be correct, is that the Third Capital Raise was implemented for the reasons given by the Second and Third Defendants in their evidence in their first witness statements. More simply, I find that the Third Capital Raise was implemented because the Company remained in serious financial difficulty, needed to raise more funds, and had no means of raising the funds other than by way of a further call on its shareholders.[630]Returning specifically to the price at which the new shares were set, I find that the price of the new shares to be offered pursuant to the Capital Raises was set by the Second and Third Defendants at the figure of £1 per share because(i) the Second and Third Defendants considered the Company to be practically insolvent, and(ii) on the previous increase in the share capital of the Company, in November 2018, the new shares were offered at this price. What I do not find, in relation to the pricing of the new shares, is any evidence of the Alleged Scheme being put into implementation.[631]While I am engaged on this review of parts of the evidence, I should also make reference to events in relation to the October 2019 Company Board Meeting and the November 2019 Company Board Meeting. These meetings are the subject matter of Ground 1, but it is necessary to make reference to them in relation to the Alleged Scheme. I have already described in outline the sequence of events leading up to each of these meetings, in the relevant narrative sections of this judgment. I need not repeat the narrative. Instead, I deal with the following matters.[632]In relation to the First Capital Raise, I have already mentioned the WhatsApp exchanges which took place between the Second Defendant and Ms Grigorian-Coates on 7th and 8th October 2019. In these exchanges, the proposed capital raise was discussed and the Second Defendant received advice from Ms Grigorian-Coates. The WhatsApp exchanges need to be read in full, and the second exchange is too lengthy to quote in full, but two matters in particular call for consideration. The first exchange was in the following terms and included the following statement by the Second Defendant:
“Ani Hey lvo - is when you're free we need to talk about the capital raise and the valuation ... a few points we have to discuss around minority shareholder protections in case the price we are offering at is prejudicial Ani Let's get Kalina on the call too lvo So, I have coordinated with Gero and we are GTG on the dilution. Lmk when we can get a call with you and Kalina and put this into motion”
Ani Let's get Kalina on the call too

lvo

[633]Within the second exchange, the following exchange appears:
“Ani I'd like to discuss minority protections with you and Kalina - something we need to consider when deciding on share price lvo True Ani Would tomorrow afternoon work? Ani I'll coordinate with Kalina Ani I'm free from 12.30pm my time Ani Btw we need to be v careful not to call it dilution Ani It needs to be emergency fund raising lvo Not any danger there ... lvo It is exactly this Ani Yes - let's speak tomorrow and I'll highlight the potential risks around calling it dilution etc ... lvo It is not a dilution. This is a side effect Ani Yes - let's speak tomorrow and discuss , let me know when suits” lvo True Ani Would tomorrow afternoon work? Ani I'll coordinate with Kalina Ani I'm free from 12.30pm my time Ani Btw we need to be v careful not to call it dilution Ani It needs to be emergency fund raising lvo lvo It is exactly this Ani lvo It is not a dilution. This is a side effect Ani Yes - let's speak tomorrow and discuss , let me know when suits”

Ani

[634]Although much was made of these exchanges, as evidence that the Second to Fifth Defendants were engaged in a scheme to dilute the Claimant’s shareholding in the Company, this is not the way I read the exchanges. I do not find it surprising either that the Fourth and Fifth Defendants should have been consulted about the proposed capital raise, or that Ms Grigorian-Coates should give the advice that the proposed capital raise should be described as emergency fund-raising, rather than a dilution. Given that the position of minority shareholders had been raised in the exchanges, it is readily understandable that Ms Grigorian-Coates should correct the Second Defendant’s language, and that the Second Defendant should react by stating that emergency fund raising was exactly what it was. In summary, I do not think that the references to dilution and the evidence of the involvement of the Fourth and Fifth Defendants are capable of bearing or helping to bear the evidential burden of proving the existence of the Alleged Scheme.[635]What is more striking, in relation to October 2019 Company Board Meeting, is the lack of involvement of the Claimant in any of the administration or decision making of the Company, and the lack of interest of the Second and Third Defendants in involving the Claimant in any of this administration or decision making. These features of the evidence manifest themselves in a number of ways.[636]Ms Grigorian-Coates asked the Third Defendant, by her email of 9th October 2019, to send the notice of the October 2019 Company Board Meeting to the Claimant at his work and personal email addresses, with the option to receive read receipts enabled. The Third Defendant was plainly aware of the GNorth Address, as a personal email address of the Claimant, but sent the First Meeting Notice to the Sportpesa.com Address and to the Sportpesa.ke Address. The draft of the notice itself was emailed by Ms Grigorian-Coates to the Second and Third Defendants, but not to the Claimant. On 10th October 2019, in a WhatsApp exchange with the Second Defendant, Ms Grigorian-Coates said that she had not heard from the Claimant, and suggested that the Second Defendant call the Claimant to let him know that he had been sent notice of the board meeting. The Second Defendant said that he would “check around”. The Second Defendant’s evidence was that he approached various other individuals to ask if they had heard from the Claimant, who told him that the Claimant was not answering his phone and could not be found. The Second Defendant made no direct approach to the Claimant. The actual minutes of the October 2019 Company Board Meeting record apologies for absence from the Claimant, but it is clear from the evidence that the Claimant had not been in contact with the Second or Third Defendants, and had not been in contact with Ms Grigorian-Coates. In those circumstances, the Claimant could not have presented apologies for his absence.[637]The exclusion of the Claimant from the exchanges between Ms Grigorian-Coates and the Second and Third Defendants continued in relation to the documents relating to the First Capital Raise. On 14th October 2025, Ms Grigorian-Coates emailed the draft documents in relation to the First Capital Raise to the Second and Third Defendants, and asked for comments. The email was not sent to the Claimant.[638]In their closing submissions, the Claimants’ counsel subjected the course of events in relation to the October 2019 Company Board Meeting to a close scrutiny, including the particular events to which I have referred above. On the basis of this scrutiny and on the basis of the findings which I was invited to make in relation to each event, the Claimants’ counsel invited me to make the overall findings(i) that the Second and Third Defendants did not give notice of the October 2019 Company Board Meeting,(ii) that the Second and Third Defendants knew that the Claimant had not had notice of the meeting, and(iii) that they deceived Ms Grigorian-Coates into believing that they had notified the Claimant.[639]I do not think that the evidence justifies findings which go as far as this. It follows however from my findings in relation to the First Offer Letter that, in sending the First Meeting Notice to the Claimant at the Sportpesa.com Address, neither the Second Defendant nor the Third Defendant deliberately procured that the First Meeting Notice was sent to an address at which they or either of them knew or intended or hoped that the notice would not or might not reach the Claimant. For the reasons which I have previously explained in relation to my findings on the Joint Liability Issue, the Third Defendant was not aware that the Claimant had no access to the Sportpesa.com Address, and had no reason to think that this was the case. The same was true of the Second Defendant. Equally, it seems to me to be overstating the position to say that the Second and Third Defendants knew that the Claimant had not had notice of the meeting. The Second and Third Defendants could not have known this, given that they had not had contact with the Claimant and given that they had no reason to think that the First Meeting Notice, as sent to the Sportpesa.com Address, had not been seen by the Claimant. Equally, I do not accept that Ms Grigorian-Coates was deceived into believing that the Claimant had been notified of the meeting. This could only have been the case if the Second and Third Defendants, or either of them, knew that the Claimant had not received notice of the meeting. For the reasons which I have explained, I find that the Second and Third Defendants did not have this knowledge.[640]The evidence given by the Second Defendant and the Third Defendant, when cross examined about the events in relation to the October 2019 Company Board Meeting, was unsatisfactory. Neither was able to give a proper explanation as to why they appeared to be proceeding with the arrangements for the First Capital Raise without reference to the Claimant, notwithstanding his status as a co-director of the Company, or why they appeared unwilling to take any extra steps to ensure the involvement of the Claimant, in circumstances where they did know, at least, that the Claimant had made no response to the notice of the meeting which had been sent to him.[641]In my judgment, and I so find, the explanation for the unsatisfactory nature of this part of the evidence of the Second and Third Defendants and for their conduct in relation to the October 2019 Company Board Meeting, is as follows.[642]Although the Claimant was a director of the Company, and although the evidence was that the Claimant generally acted as chair of meetings of the Business which he attended, it appears that the Claimant had little or no involvement with the day to day running of the Company, at least for some time prior to October 2019. Indeed, this point seems to me to emerge clearly from the evidence of the Second Defendant. In his first witness statement, the Second Defendant gave evidence that “My communications with Mr Ndungu regarding SGHL matters were infrequent as he was not involved in the day-to-day operational matters of the company.”. When this evidence was put to the Second Defendant in cross examination, the Second Defendant attempted to convert “not involved” to “not interested”. I have already commented on this, earlier in this judgment, in my overall assessment of the Second Defendant’s evidence. As I have already commented, my impression was that the Second Defendant tried to change his evidence in an attempt to be consistent with his evidence in cross examination that the Claimant had been employed full time by the Company. I did not find this part of the Second Defendant’s evidence in cross examination credible, and I reject it. In my judgment, and I so find, the Second Defendant stated the true position in his first witness statement; namely that the Claimant was not involved in the day-to-day operational matters of the Company. I note that the Claimant himself refers to his directorship of the Company as a non-executive position in his second witness statement.[643]In addition to this, by October 2019, the rift in the Business which I have identified earlier in this judgment had been in place for some considerable time. I have no doubt that this also contributed to the lack of engagement between the Second and Third Defendants, on the one side, and the Claimant, on the other side.[644]In this context I should mention that the Claimant’s list of issues, provided after the Trial, included the question of whether the Claimant was the chairman of the Company and/or other companies within the Business. I do not regard this issue as central to what I have to decide. As, however, this issue has been formally identified as an issue, I should set out some very brief findings. On the evidence it is clear that the Claimant did act as chair at meetings of companies within the Business. The evidence is that the Claimant chaired the first three of the Pevans Meetings. I did not understand it to be disputed that the Claimant did chair these meetings. The minutes of the March 2019 Company AGM record that the Claimant was nominated to chair this meeting. The Claimant’s evidence in his witness statements was that he served as chairman of the board of directors of the Company, although his directorship of the Company was on a non-executive basis. As I have mentioned above, the evidence was that the Claimant generally acted as chair of meetings of the Business which he attended.[645]I find that the Claimant generally acted as chair of the meetings of the Business which he attended. I do not consider that the evidence establishes that the Claimant was formally appointed to the position of chairman, either in relation to the Company or in relation to other companies in the Business. I also reiterate that I do not consider this issue to be central to what I have to decide. In considering the conduct of the Second and Third Defendants in relation to the October 2019 Company Board Meeting, and more generally in relation to the question of whether the Alleged Scheme existed, the relevant point for present purposes seems to me to be that the Claimant’s role in the Company, both formally and as a matter of historic reality, was a non-executive role. Whether the Claimant had been formally appointed as chairman of the Company or not, he was not involved in the day to day management of the Company.[646]Putting all of the above analysis together, I find that the explanation for the conduct of the Second and Third Defendants, in relation to the October 2019 Company Board Meeting, was that they did not expect the Claimant to become involved in the board meeting to approve the First Capital Raise, they did not want the Claimant to become so involved and, if possible, they wanted the Claimant removed as a director of the Company. The causes of this situation were(i) the historic lack of involvement of the Claimant in the day to day operation of the Company and(ii) the, by then, long standing rift over the management and direction of the Business.[647]These findings are reinforced by subsequent events. In relation to the November 2019 Company Board Meeting, there was an exchange of emails between Ms Grigorian-Coates and the Second and Third Defendants, on 22nd October 2019. I have set out this exchange in the relevant narrative section of this judgment, but I repeat the exchange for ease of reference. In the first of these emails, Ms Grigorian-Coates emailed the Second and Third Defendants in the following terms:
“We are going to need to hold another board meeting to discuss the responses from the shareholders and allocate the shares. In particular, we will need to discuss how to allocate any shares which have not been subscribed for. We'll also need to circulate notice of the meeting to Paul. The deadline for the shareholders to get back to us is 1 November. When would you like to hold the meeting? Would Monday 4 November work?”
[648]The Second Defendant responded the same day to say that 4th November 2019 worked for himself and the Third Defendant. In a further email exchange with Ms Grigorian-Coates and the Third Defendant that day (22nd October 2019), regarding the timing of the proposed meeting, the Second Defendant made this proposal:
“If Paul does not answer again, I would like to propose that we add to the agenda a replacement of Paul with a more engaged director. lmk if we should add this in the agenda or raise it during the call.” lmk if we should add this in the agenda or raise it during the call.”
[649]Ms Grigorian-Coates’ response, sent the same day, was in the following terms:
“We are going to need an ordinary resolution of the shareholders (ie majority) to remove Paul and appoint the new director. I suggest we add this to the agenda to be transparent so that Paul has full details of what we will discuss. We can then hold the meeting, suggest that Paul be replaced, suggest who you think should be appointed and then adjourn the meeting to circulate the written resolution to the shareholders for approval. We will need the new director to consent to being appointed. Once we have the shareholders' approval we will resume the meeting and remove/appoint as appropriate. Does this sound ok?”
Does this sound ok?”[650]There were further email exchanges which took place between Ms Grigorian-Coates and the Second and Third Defendants on 24th October 2019. In response to the email from the Second Defendant which I have quoted above, in which the Second Defendant anticipated the need to raise a further sum of £600,000, Ms Grigorian-Coates responded that “We can add it to the agenda and email Paul tomorrow to let him that the board meeting on Monday the 4th will discuss another round of fundraising”. There is no evidence that a further email was sent to the Claimant as anticipated. I am asked to find that the further email was not sent by Ms Grigorian-Coates because she was told by the Second and Third Defendants, dishonestly, that they had emailed the Claimant. I find this implausible. The email exchanges between Ms Grigorian-Coates, on the one side, and the Second and/or Third Defendants, are not consistent with the hypothesis that the Second and Third Defendants were deceiving Ms Grigorian-Coates. The exchanges are consistent with what I have already found; namely that the Second and Third Defendants did not expect the Claimant to become involved in the board meeting to approve the Second Capital Raise, did not want the Claimant to become so involved and, if possible, wanted the Claimant removed as a director of the Company. Indeed, by 24th October 2019, the Second Defendant had stated quite openly, in his email to Ms Grigorian-Coates of 22nd October 2019, that this was what he wanted to achieve, “If Paul does not answer again”. I do not consider that this statement was made by the Second Defendant as part of a deception of Ms Grigorian-Coates, or in circumstances where the Second Defendant or the Third Defendant knew or had reason to think that the Claimant had not had notice of the October 2019 Company Board Meeting.[651]The same applies to the actual notice of the November 2019 Company Board Meeting, which was sent to the Claimant at the Sportpesa.com Address by the Third Defendant on 22nd October 2019 (the Second Meeting Notice). I am asked by the Claimants’ counsel to find that the Second and Third Defendants knew that the Claimant did not use the Sportpesa.com Address, but had told Ms Grigorian-Coates that the Claimant did use this email address. The allegation that Ms Grigorian-Coates was deceived in this way only works if the Second and Third Defendants knew that the Claimant did not use the Sportpesa.com Address. For the reasons which I have already explained in this context, I find that neither the Second Defendant nor the Third Defendant had this knowledge, and I find that there was no such deception of Ms Grigorian-Coates.[652]For the avoidance of doubt I should also deal, at this point, with the allegation that the Second and Third Defendants deliberately failed to give the Claimant notice of the November 2019 Company Board Meeting and/or sent the Second Meeting Notice to email addresses at which they anticipated that the Claimant would not, or might not, receive the notice. It follows from my earlier findings in relation to the First Offer Letter and the notice of the October 2019 Company Board Meeting (the First Meeting Notice) that, in sending the Second Meeting Notice to the Claimant at the Sportpesa.com Address, neither the Second Defendant nor the Third Defendant deliberately procured that the Second Meeting Notice was sent to an address at which they or either of them knew or intended or hoped that the Second Meeting Notice would not or might not reach the Claimant. For the reasons which I have previously explained in relation to my findings on the Joint Liability Issue, the Third Defendant was not aware that the Claimant had no access to the Sportpesa.com Address, and had no reason to think that this was the case. The same was true of the Second Defendant.[653]As I have explained, Ms Grigorian-Coates was not called as a witness, either by the Company or the Second to Sixth Defendants. In their closing submissions, the Claimant’s counsel stressed the absence of Ms Grigorian-Coates as a witness and invited me to draw a series of inferences, adverse to the Second to Sixth Defendants and in support of the Claimant’s case on the Alleged Scheme, in relation to the dealings between the Second and Third Defendants and Ms Grigorian-Coates concerning the First and Second Capital Raises and, in particular, concerning the arrangements for the October 2019 Company Board Meeting. I have already set out the principles which govern the drawing of adverse inferences where a particular person is not called as a witness. It is now, when I am considering the question of whether the Alleged Scheme existed, that it is appropriate to apply those principles in deciding whether I should draw any inferences and, if so, of what kind in relation to the absence of Ms Grigorian-Coates as a witness.[654]The essential submission of the Claimant’s counsel was that Ms Grigorian-Coates was clearly available to give evidence at the Trial, would have been an independent witness, and could have been expected, as a solicitor, to tell the truth in her evidence. The inferences which I am invited to draw were explained in the following terms by the Claimant’s counsel, in their written closing submissions:
“c. AG was intimately involved in the preparation of the First Capital Raise and Second Capital Raise. AG would have been able to give evidence on: (i) what IB and KK told her about whether PN was likely to attend the 16.10.19 board meeting and why; (ii) what IB and KK told her about whether PN was likely to subscribe and why; (iii) what IB and KK told her about whether PN had received notice of the 16.10.19 Board Meeting; (iv) why nobody tried to contact PN when he did not attend the 16.10.19 board meeting; (v) what IB and KK told her about whether PN had been served with the First Offer Letter; and (vi) what IB and KK told her about whether they had emailed PN to let him know about the proposed Second Capital Raise; d. The court should accordingly infer that IB and KK told AG that: (i) PN was not likely to attend the 16.10.19 board meeting because he was not participating as a director, but may object to the First Capital Raise; (ii) PN was not likely to subscribe; (iii) PN would have received the notice of the 16.10.19 board meeting because he used his Sportpesa.com email address; (iv) every attempt had been made to contact PN prior to the 16.10.19 board meeting and it was usual for him not to attend; (v) PN had been served with the First Offer Letter by email to his Sportpesa.com address and by the DHL letter; and (vi) they had emailed PN to let him know of the proposed Second Capital Raise.”
[655]The essential case being pursued in this respect was that the Second and Third Defendants gave misleading information to Ms Grigorian-Coates, in relation to their dealings with the Claimant and as part of the Alleged Scheme, in order to deceive Ms Grigorian-Coates. Ms Grigorian-Coates was not called as a witness, so it was submitted, in order to prevent this deception from coming out.[656]The problem with this case is that it assumes that the Second and Third Defendants were engaged in a course of deception of Ms Grigorian-Coates. In this context however, I have already found, from the available evidence, that the Second and Third Defendants were not engaged in any such course of deception. In these circumstances it seems to me that the inferences which I am invited to draw from the absence of evidence from Ms Grigorian-Coates fall away. They assume a course of deception which, as I have found, did not occur.[657]Independent of this, I have some difficulty in seeing what difference evidence from Ms Grigorian-Coates would have made to the evidential picture. One can see the course of dealing between the Second and Third Defendants, on the one side, and Ms Grigorian-Coates, on the other side, from the available email and WhatsApp communications. It seems to me that the question of whether there was a course of deception, as alleged by the Claimant, can be determined from the evidence of the Second and Third Defendants and from the available documents. I can see that the position would be different if(i) there were gaps in this evidence, and(ii) it was or might be the case that filling in those gaps would disclose evidence of deception, and(iii) Ms Grigorian-Coates could have been expected to give evidence which would fill in or help to fill in those gaps. As I have explained, however, I find that this is not the position in the present case.[658]In summary, and applying the principles identified in Wiszniewski and Efobi, I do not consider that it is appropriate to draw any inferences from the absence of Ms Grigorian-Coates as a witness at the Trial, either as contended for by the Claimant or otherwise. As I have indicated, I doubt that the evidence of Ms Grigorian-Coates would have added much, if anything, to the evidence relevant to what I have to decide in this case.[659]Finally, as part of my consideration of particular items of evidence, in relation to the question of whether the Alleged Scheme existed, I should make reference to the meeting/disciplinary hearing which was held on 7th December 2020, at which a resolution was passed removing the Claimant as a director of the Company. I have already commented on the unsatisfactory nature of the evidence given by both the Second Defendant and the Third Defendant in relation to the allegations of gross misconduct made against the Claimant.[660]The allegations of gross misconduct were set out in the Third Defendant’s letter to the Claimant, dated 1st December 2020. The allegations were not made good in the evidence of the Second to Sixth Defendants. There was no specific evidence of the Claimant having attended meetings in an intoxicated state. The evidence of the Second to Fifth Defendants in this respect did not stand up to scrutiny in cross examination. The letter stated that the detail of this allegation would be provided to the Claimant prior to the disciplinary hearing. The witness statements were not provided to the Claimant and have not been produced in the Trial. So far as the allegations of failure by the Claimant to carry out his duties as a director were concerned, the only specific allegations were that the Claimant failed to attend the October 2019 Company Board Meeting, the November 2019 Company Board Meeting, and an earlier meeting of Sportsoft on 14th July 2017. So far as the Sportsoft meeting was concerned, the Claimant’s evidence was that he did not have notice of this meeting. So far as the October 2019 Company Board Meeting and the November 2019 Company Board Meeting were concerned, I find that the Claimant only became aware of these meetings when he was informed of them by the Third Defendant in her email of 11th November 2019, sent in response to the Claimant’s email of complaint sent on 11th November 2019. I also find that the Claimant only saw the notices of these meetings (the First Meeting Notice and the Second Meeting Notice) on 25th November 2019 when, with the assistance of Mr Dawson, he was able to access the emails sent to the Sportpesa.com Address by logging in using the new ke.Sportpesa Address. Beyond this, there was no specific evidence of the Claimant failing to attend any meetings of the Business, or behaving unprofessionally at those meetings. It is clear that there was heated debate at the March 2019 Meetings, and that the Claimant was directly engaged in that debate, It is also clear that a serious rift had opened up in the Business, with the Claimant on one side and the Second to Fifth Defendants on the other side. None of this, however, justifies the conclusion that the allegations of breach of duty by the Claimant in the performance of his duties as a director of the Company and Sportsoft were well-founded. I have already found that the Claimant was not engaged in the day to day business of the Company, but this is not the same as saying that the Claimant was thereby in breach of his duties as director of the Company.[661]I am not directly concerned with the question of whether the Claimant was lawfully removed as a director of the Company. For present purposes, the relevant point about the disciplinary hearing and the disciplinary process is this. So far as the evidence at the Trial was concerned, the Second to Sixth Defendants failed to establish, on the evidence, that any of the allegations of gross misconduct set out in the letter of 1st December 2020 were well-founded. I am not able to accept the evidence which the Second to Fifth Defendants did give in relation to these allegations. I find that this evidence was not truthful, but was an attempt by the Second to Fifth Defendants to justify the removal of the Claimant as a director of the Company and to cast the Claimant in a bad light for the purposes of the Trial. Notwithstanding these findings, however, I find it difficult to see how any of this supports the inference that the Second to Sixth Defendants were engaged in a scheme to dilute the Claimant’s shareholding in the Company. The much more obvious explanation for the events in relation to the disciplinary hearing, and the explanation which I find to be correct, is that the Second and Third Defendants were giving effect to their long-held desire to remove the Claimant as a director of the Company, with the support of the Fourth and Fifth Defendants.[662]The evidence which I have considered above is not the entirety of the evidence relevant to the question of whether the Alleged Scheme existed. The particular parts of the evidence which I have considered do, however, illustrate what emerges from a general survey of the evidence in the context of the Alleged Scheme. If one considers the evidence that there is of what was happening at the times of the Capital Raises, which is set out in summarised form in the narrative sections of this judgment, the course of events and the dealings of the relevant actors simply do not support the inference that there was a scheme between the Second to Fifth Defendants to dilute the Claimant’s shareholding. Even in respect of those areas where the evidence given by the Second to Fifth Defendants was unsatisfactory and, in particular, in respect of those areas where the evidence of the Second and Third Defendants was unsatisfactory, the problems with the evidence do not lead me to the conclusion that the Alleged Scheme existed, but rather to the conclusion that the Second and Third Defendants did not involve the Claimant in the day to day running of the Company, did not want to involve the Claimant in the day to day running of the Company, and wanted the Claimant removed as a director of the Company. I have no doubt that the Fourth and Fifth Defendants, to the extent that they had involvement in the affairs of the Company, were in support of the position of the Second and Third Defendants, but this falls well short of what would be required to demonstrate that the Alleged Scheme existed.[663]Drawing together all of the analysis in this section of this judgment, my conclusions are as follows:(1) I find that the Alleged Scheme never existed.(2) I find that there was never a scheme between the Second to Fifth Defendants or between any of them to dilute the Claimant’s shareholding in the Company.(3) I conclude that Ground 10 has not been established.

Ground 1

[664]It follows from the findings which I have made in relation to Ground 10 that Ground 1 has not been established. I have found that there was no deliberate failure by the Second Defendant or the Third Defendant to give the Claimant notice of the October 2019 Company Board Meeting or the November 2019 Company Board Meeting. The Meeting Notices were sent to the Sportpesa.com Address. For the reasons which I have already set out in this judgment, the Second and Third Defendants neither knew nor had reason to know that the Meeting Notices would not reach the Claimant. For the same reasons, neither the Second Defendant nor the Third Defendant anticipated or had reason to anticipate that the Meeting Notices would not be received by the Claimant. I have also found that the Claimant did not see the Meeting Notices until 25th November 2019, but Ground 1 is concerned with the state of knowledge of the Second and Third Defendants at the relevant time, not with the Claimant’s state of knowledge.

Ground 2

[665]Ground 2 has not been established. I refer to my findings on the Joint Liability Issue and in relation to Ground 10. I have already found that neither the Second Defendant nor the Third Defendant deliberately procured that the First Offer Letter was sent, by DHL courier, to the wrong address. I have also found that neither the Second Defendant nor the Third Defendant deliberately procured that the First Offer Letter was sent to addresses at which they or either of them knew or intended or hoped that the First Offer Letter would not or might not reach the Claimant.

Ground 4

[666]The starting point is to identify what is required to establish a breach of the duty in Section 172. Section 172(1) sets out the duty in the following terms:
“(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to— (a) the likely consequences of any decision in the long term, (b) the interests of the company's employees, (c) the need to foster the company's business relationships with suppliers, customers and others, (d) the impact of the company's operations on the community and the environment, (e) the desirability of the company maintaining a reputation for high standards of business conduct, and (f) the need to act fairly as between members of the company.” (a) the likely consequences of any decision in the long term, (b) the interests of the company's employees, (c) the need to foster the company's business relationships with suppliers, customers and others, (d) the impact of the company's operations on the community and the environment, (e) the desirability of the company maintaining a reputation for high standards of business conduct, and (f) the need to act fairly as between members of the company.”
[667]In relation to the exercise by the directors of a company of their discretion, Lord Greene MR identified the essential principles which applied to the exercise of this discretion in the following terms in Re Smith and Fawcett Limited [1942] Ch 304, at page 306:
“The principles to be applied in cases where the articles of a company confer a discretion on directors with regard to the acceptance of transfers of shares are, for the present purposes, free from doubt. They must exercise their discretion bona fide in what they consider—not what a court may consider—is in the interests of the company, and not for any collateral purpose. They must have regard to those considerations, and those considerations only, which the articles on their true construction permit them to take into consideration, and in construing the relevant provisions in the articles it is to be borne in mind that one of the normal rights of a shareholder is the right to deal freely with his property and to transfer it to whomsoever he pleases.”
[668]In circumstances where a director honestly believes that they are acting in the way which they consider most likely to promote the success of the Company, the duty in Section 172 is not breached in circumstances where, on an objective assessment, the director’s belief was unreasonable and mistaken. The law in this respect was explained by Jonathan Crow (sitting as a Deputy Judge of the High Court) in Extrasure Travel Insurance Ltd v Scattergood [2003] 1 BCLC 598. The case was concerned with a claim for breach of fiduciary duties against directors, but it seems to me that what was said by the Deputy Judge, at [88] and [89], is equally applicable to the duty in Section 172:
“[88] The claimants sought to argue that a director is also in breach of his fiduciary duty if he honestly, but unreasonably and mistakenly, believes that he is pursuing the company’s best interests. This argument was founded on a single remark of Richard Field QC (sitting as a deputy High Court judge) in Re Pantone 485 Ltd [2002] 1 BCLC 266 at para [46]. In that passage, the judge observed that it was not a breach of fiduciary duty for a director of company A to advance monies for the benefit of a related company B, if the director ‘honestly and reasonably’ believed that company B would repay the monies so advanced. On the basis of this formulation, Mr Nicholls submitted that it would be a breach of fiduciary duty if the director’s belief, albeit honestly held, had no reasonable basis in fact. He submitted that, if the law were otherwise, a director would be immune to suit for crass incompetence: in other words, his fiduciary duties would be less demanding that any common law duty of care. [89] I reject that proposition. Fiduciary duties are not less onerous than the common law duty of care: they are of a different quality. Fiduciary duties are concerned with concepts of honesty and loyalty, not with competence. In my view, the law draws a clear distinction between fiduciary duties and other duties that may be owed by a person in a fiduciary position. A fiduciary may also owe tortious and contractual duties to the cestui que trust: but that does not mean that those duties are fiduciary duties. Bearing all that in mind, I find nothing surprising in the proposition that crass incompetence might give rise to a claim for breach of a duty of care, or for breach of contract, but not for a breach of fiduciary duty.”
[669]The content of the duty in Section 172 was further explained by the Court of Appeal (Edis, Snowden and Zacaroli LJJ) in their joint judgment in Saxon Woods Investments Limited v Costa [2025] EWCA Civ 708, at [120]-[122]:
“120. The judge’s approach to section 172 cannot be right. Section 172 requires a director to act in what he considers, in good faith, would be most likely to promote the success of his company. The judge’s approach deprives the phrase “in good faith” of all content and meaning. On his approach, section 172 would work just as well if those words are simply deleted from it. However, they cannot be deleted and must be given meaning. 121. We reject the suggestion by Lord Wolfson that the location within the language of section 172 of the phrase “in good faith” means that it attaches only to the “consideration” by the director of which course is most likely to promote the success of the company. Lord Greene MR’s classic statement in Smith and Fawcett was that directors “must exercise their discretion bona fide in what they consider … is in the interests of the company”
. That placement of the requirement of bona fide made it clear that it applied to the exercise of discretion - i.e. what the director actually does – rather than just to his consideration of the best interests of the company. If Lord Wolfson’s argument were accepted, it would mean that the 2006 Act made a significant change in the law as it was previously understood to be. That is not an approach to interpretation envisaged by section 170(4), and we do not accept that such a change could occur by such an opaque drafting mechanism. 122. In our judgment, section 172 requires a director, in all he does, to act in good faith towards the company, in the way he considers would be most likely to promote the success of the company for the benefit of its members as a whole; and the requirement that the director acts in good faith includes, as a core fiduciary duty, a requirement that the director acts honestly towards the company.”[670]There are two particular points which I take from these authorities. The first is that a director must act, in good faith, in a way which the director, as opposed to the court, considers most likely to promote the success of the relevant company. Second, a director will not be in breach of the duty in Section 172 if a director honestly believes that they are acting in pursuit of the best interests of the company, notwithstanding that the belief is unreasonable and mistaken.[671]The next step is to consider the particular matters which are relied upon by the Claimant as giving rise to the alleged breach or breaches of the duty in Section 172.[672]So far as the notices of the two board meetings were concerned, that is to say the First Meeting Notice and the Second Meeting Notice (together “the Meeting Notices”), they were sent to the Claimant at the Sportpesa.com Address. Applying my earlier findings in relation to Ground 10, the Second and Third Defendants had no reason to think that the Meeting Notices would not reach the Claimant at the Sportpesa.com Address, until the Claimant notified them that he had been unaware of the board meetings, by his email to the Company shareholders sent on 11th November 2019. In her response, by her email of 11th November 2019, the Third Defendant asserted that the Claimant had been legally served with the Meeting Notices, in accordance with the articles of the Company. In making this assertion, I find that the Third Defendant genuinely believed this to be the position, whether she was right in this belief or not. I also find that the Third Defendant believed that valid notice of the board meetings was being given and had been given to the Claimant at the times when the notices were sent. I infer, and find, that the Second Defendant held the same beliefs.[673]Turning to the First Offer Letter, the position seems to me to be the same. I have decided that the First Offer Letter was not validly communicated to the Claimant, and that the First Breach occurred. Applying my findings in relation to the Joint Liability Issue, I find that neither the Second Defendant nor the Third Defendant knew or had reason to know that the First Offer Letter was not being validly and effectively communicated to the Claimant by the methods which were employed by the Company to communicate the First Offer Letter to the Claimant.[674]So far as the decisions made at the November 2019 Company Board Meeting were concerned, it was not clear to me, either from the Amended Particulars of Claim or from the Claimant’s submissions, whether the allegations of breach of the duty in Section 172 did actually extend to the decisions made in the November 2019 Company Board Meeting. It is not now in dispute that those decisions were made, but previously it was in dispute as to whether any decisions were made on 4th November 2019 to raise capital, which in turn left it uncertain what was being said about these decisions. In any event, and assuming that these decisions are the subject of the allegation of breach of the duty in Section 172, it seems to me that this allegation now falls away. The decisions made in the November 2019 Company Board Meeting related principally to the Second Capital Raise. Applying my findings in relation to the expert evidence of Mr Weaver, the Second Capital Raise was, in financial terms, justified and necessary. I have also found that there was no scheme to dilute the Claimant’s shareholding in the Company. In these circumstances, it seems to me that there cannot have been a breach of the duty in Section 172, so far as the decisions made in the November 2019 Company Board Meeting were concerned.[675]This leaves the 2018 Accounts. This expression is a reference to the financial statements of the Company for the period from 1st April 2018 to 31st December 2018. The 2018 Accounts were prepared on the basis that the Company qualified as a small company in accordance with Section 382. The 2018 Accounts were signed by the Third Defendant, and state that they were approved by the board of the Company on 16th October 2019.[676]There are a number of problems with the 2018 Accounts. It is now common ground that the small companies regime did not apply to the Company because the requirements of Section 382 were not met. In fact, the 2018 Accounts should have been audited and prepared on a group basis because the Company’s balance sheet exceeded the limit in Section 382(3) and the SPG Group employed more than 50 people. The Claimant was not involved in the preparation or approval of the 2018 Accounts. There is no evidence of any formal approval of the 2018 Accounts by the board of the Company on 16th October 2019. This is not a matter mentioned in the minutes of the October 2019 Company Board Meeting. There is also an email sent by Brian Quayle, the Company’s accountant, on 11th October 2019. The email was sent to Gordon Dadds, the Company’s then solicitors. The email attached the signed financial statements for Sportsoft and the Company, with a request for the same to be filed with Companies House. In these circumstances, it is difficult to see how the board of the Company could have approved the 2018 Accounts. Equally mysterious is how the reference to the 2018 Accounts, if they were sent to the Company’s solicitors for filing on 11th October 2019, then came to bear the information that they had been approved by the board on 16th October 2019.[677]There is also an email sent by Mr Quayle to the Third Defendant on 30th August 2019, which attached financial statements of the Company for the year ended 31st December 2018, which had been prepared on a group basis. The Third Defendant was asked to cast her eyes over “the attached workings for the 2018 accounts for consolidated FS”.[678]In her second witness statement and in cross examination, the Third Defendant claimed that KPMG, who were the Company’s financial advisers at that time, had given advice that the 2018 Accounts did not have to be audited or consolidated accounts because the Company qualified as a small company. The Third Defendant also maintained in cross examination that there had been a board meeting on 16th October 2019 to approve the 2018 Accounts. There is no written record of any such advice from KPMG and no record of any board meeting. The Third Defendant was challenged on all this evidence in cross examination.[679]For his part, the Second Defendant gave evidence in his first witness statement that he recalled discussing the preparation of the 2018 Accounts with Mr Atanassov and the Third Defendant. He said that a decision was made not to have the 2018 Accounts audited, given the cost of an audit and the financial condition of the Company at the time. There was no written record of any such discussion or decision. The 2018 Accounts record audit fees of £18,000 as part of the profit and loss account for the period ended 31st March 2018. Given the period to which those audit fees relate, they appear not to pertain to the cost of any auditing in relation to the 2018 Accounts. The Second Defendant also maintained, in cross examination, that there had been a board meeting on 16th October 2019 to approve the 2018 Accounts. The Second Defendant was challenged on the question of whether there had been a board meeting on 16th October 2019, but not, as I recall the cross examination, on his evidence of the decision not to have the 2018 Accounts audited.[680]I did not find the evidence of the Second and Third Defendants in relation to the 2018 Accounts to be satisfactory. It strikes me as implausible that KPMG would have given obviously wrong advice of the kind alleged by the Third Defendant, independent of the fact that there is no record of such advice. There is also an unresolved mystery as to how the 2018 Accounts came to record an approval by the board on 16th October 2019, when they were apparently sent to the Company’s solicitors for filing at Companies House on 11th October 2019. There is also no record of any board meeting to approve the 2018 Accounts on 16th October 2019. In my judgment, the evidence given by the Second and Third Defendants in relation to these matters is unreliable, with the exception of the Second Defendant’s evidence that a decision was made not to have the 2018 Accounts audited.[681]Where does all this go? The Claimant’s case, as put in closing submissions, was that the Second and Third Defendants were engaged in a cover up operation, the purpose of which was to prevent the 2018 Accounts being audited, so that it would not be discovered by KPMG that the figures in the 2018 Accounts did not add up. The problem with this part of the Claimant’s case is, however, the same problem which I have already identified in my findings on Mr Weaver’s expert evidence and, in particular, on the reliability of the financial information provided to Mr Weaver. The Claimant has not produced evidence on the basis of which I can safely conclude that the figures, or some of them, in the 2018 Accounts were wrong, let alone that there was deliberate fabrication of the figures, which needed to be concealed from KPMG. Accordingly, I reject the explanation put forward by the Claimant as to why the 2018 Accounts were not prepared on the correct basis and were not audited.[682]There was also the failure to provide a copy of the 2018 Accounts to the Claimant. As I understood the position, it was not in dispute that there was a statutory duty to provide the Claimant with a copy of the 2018 Accounts, which was not complied with. Again, it is the Claimant's case that this failure occurred because the Second and Third Defendants did not want the 2018 Accounts exposed to the scrutiny of the Claimant, a qualified accountant. The problem here, however, is the same problem which I have identified with the Claimant’s case in my previous paragraph. The Claimant has not demonstrated that there was anything in the 2018 Accounts which the Second Defendant and/or the Third Defendant would wish to protect from the scrutiny of the Claimant. What seems to me far more likely, and I so find, is that the Second and Third Defendants did not involve the Claimant in the preparation or approval of the 2018 Accounts, and did not provide a copy of the 2018 Accounts to the Claimant because, at this time and previously, the Claimant was not generally involved in the day to day administration of the Company’s affairs.[683]In conclusion, in relation to the 2018 Accounts, my findings on the 2018 Accounts are as follows:(1) I find that the Second and Third Defendants had the 2018 Accounts prepared without an audit because they were concerned to save money.(2) I find that the Second and Third Defendants did not receive any advice from KPMG to the effect that the 2018 Accounts could be prepared on the small company basis. Rather, the Second and Third Defendants proceeded on the basis that the 2018 Accounts could be prepared on this basis, without taking any advice to confirm that they were right in this approach.(3) There was no manipulation or fabrication of the figures in the 2018 Accounts by the Second Defendant or the Third Defendant. Nor was there any decision on the part of the Second Defendant and/or the Third Defendant not to involve KPMG because they wished to prevent scrutiny of the 2018 Accounts by KPMG.(4) The Second and Third Defendants did not involve the Claimant in the preparation or approval of the 2018 Accounts because, at this time and previously, the Claimant was not generally involved in the day to day administration of the Company’s affairs. For the same reason, the Second and Third Defendants did not provide the Claimant with a copy of the 2018 Accounts.(5) So far as the process of approval of the 2018 Accounts was concerned, I accept that the Second and Third Defendant did approve the 2018 Accounts. Whether that approval was formal or informal, and whether it did in fact occur on 16th October 2019, are matters which I am not able to resolve on the evidence, and which I do not consider that I have to resolve.[684]This completes my analysis of the particular matters which are relied upon by the Claimant as giving rise to the alleged breach or breaches of the duty in Section 172. I can therefore now turn to the question of whether these matters or any of them disclose a breach or breaches of the duty in Section 172.[685]I cannot see that any breach of the duty in Section 172 is disclosed in relation to the notices of the October 2019 Company Board Meeting and the November 2019 Company Board Meeting (the Meeting Notices), or in relation to the sending of the First Offer Letter, or in relation to the decisions made at the November 2019 Company Board Meeting. All of these matters were concerned with the implementation of the First and Second Capital Raises, both of which were, in financial terms, justified and necessary. Given my findings in relation to the Joint Liability Issue, in relation to Ground 10, and in relation to this Ground 4, the Claimant is not able to point to any deliberate conduct on the part of the Second Defendant and/or the Third Defendant of the kind alleged by the Claimant. I am satisfied that, in relation to each of these matters, the Second and Third Defendants were acting in the way in which they considered, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole; specifically by raising the money from the Company’s shareholders which was required to ensure the survival of the Company.[686]A potential exception to the above conclusions is the decision which was made at the November 2019 Company Board Meeting, to approve and circulate to members of the Company the notice of the general meeting of the Company to be held for the purposes of considering a resolution to remove the Claimant as a director of the Company. It was not clear to me whether this particular decision was relied upon in relation to Ground 4. If however it is relied upon, it seems to me that the making of this decision does not, in itself, disclose a breach of the duty in Section 172(1). I have already made findings, in my analysis of Ground 10, in relation to the disciplinary process which was used to secure the removal of the Claimant as a director of the Company. I have found that, in that process, the Second and Third Defendants were giving effect to their long-held desire to remove the Claimant as a director of the Company, with the support of the Fourth and Fifth Defendants. It does not, however, follow from this finding that the Second and Third Defendants breached the duty in Section 172(1) in making the decision to approve and circulate the notice of the general meeting to be held for the purposes of deciding whether to remove the Claimant as a director of the Company. I do not think that the case has been made out that this decision, in itself, gave rise to a breach of Section 172(1).[687]This leaves the 2018 Accounts. Here I have had more pause for thought. The Second and Third Defendants supervised the preparation of the 2018 Accounts on the wrong basis, failed to take expert advice on the 2018 Accounts, excluded the Claimant from the preparation and approval of the 2018 Accounts, and failed to provide the Claimant with a copy of the 2018 Accounts. On an objective basis, and in principle, one might think that none of this could be said to have been likely to promote the success of the Company. As however is clear from the authorities, I am not concerned with how matters appear on an objective basis. The question is whether the Second and Third Defendants considered, in good faith, that they were acting, in relation to the 2018 Accounts, in the way which they considered would be most likely to promote the success of the Company for the benefit of its members as a whole. Given the failure of the Claimant’s case that the Second and Third Defendants were engaged in a cover up in relation to the 2018 Accounts, and given my findings on the reasons for the actions taken or not taken by the Second and Third Defendants in relation to the 2018 Accounts, I reach the following conclusion. I find that the Second and Third Defendants did consider, in good faith, that they were acting in the way most likely to promote the success of the company for the benefit of its members as a whole, in relation to the 2018 Accounts.[688]Drawing together all of the above analysis, I conclude, at least so far as the matters relied upon in Ground 4 are concerned, that there was no breach by the Second Defendant or the Third Defendant of their duty to promote the success of the Company in Section 172. I therefore conclude that Ground 4 has not been established.

Ground 5

[689]Starting with Article 9(3), it seems to me that there was a breach of this Article in relation to the First Meeting Notice and the Second Meeting Notice. Article 9(3) required that notice of the October 2019 Company Board Meeting be given to the Claimant, but that the notice did not need to be in writing.[690]Notice of the two meetings was however given in writing by the Meeting Notices. I note that Section 1147 is expressed to apply “in relation to documents and information sent or supplied by a company”. Similarly, Schedule 5 is expressed to apply “to documents or information sent to supplied by a company”. As such, it seems to me that Section 1147 and Schedule 5 applied to each of the Meeting Notices. Applying my findings and conclusions in relation to the First Breach Issue, it follows that sending the Meeting Notices to the Sportpesa.com Address did not achieve compliance with these statutory requirements.[691]From this it seems to me to follow that the Second and Third Defendants were in breach of their duty, in Section 171(a), to act in accordance with the constitution of the Company.[692]The question of whether the Second and Third Defendants thereby failed in their duty to act with reasonable care, skill and diligence, pursuant to Section 174, is a more difficult one. In failing to achieve valid communication of the Meeting Notices to the Claimant, it follows from my earlier findings, both on the Joint Liability Issue and in relation to Grounds 10 and 4, that the Second and Third Defendants acted inadvertently, as opposed to deliberately. Equally, the Second and Third Defendants had good reason to think that the Claimant would receive the Meetings Notices at the Sportpesa.com Address. On balance, I am not persuaded that the failure of the Second and Third Defendants validly to communicate the Meeting Notices to the Claimant constituted a breach of their duty to exercise reasonable care, skill and diligence.[693]This leaves the question of whether the failure validly to communicate the Meeting Notices to the Claimant engaged a breach of the duty of the Second and Third Defendants, pursuant to Section 175, to avoid situations in which they had or could have had a direct or indirect interest which conflicted, or possibly might have conflicted, with the interests of the Company. Given my finding that the Second and Third Defendants acted inadvertently in failing validly to communicate the Meeting Notices to the Claimant, I have some difficulty in understanding how it can be said that the Second and Third Defendants breached their duty to avoid a conflict of interest. In any event, as I understand this particular allegation, the allegation depends upon the proposition that the Second and Third Defendants acted deliberately in failing validly to communicate the Meeting Notices to the Claimant. Given my findings on the Joint Liability Issue and in relation to Grounds 10 and 4, it seems to me that there is no foundation for this particular allegation. In any event, and in the light of my findings. I can see no scope for the argument that the Second Defendant and/or the Third Defendant breached their duty in Section 175.[694]I therefore conclude that Ground 5 is established in part.

Ground 6

(a) Ground 6

[695]The pleaded case of the Claimant is that the Second and Third Defendants breached all of the Directors’ Duties in relation to the setting of the issue price of the new shares at £1.[696]I have already made findings in relation to this case, in my analysis of Ground 10. I repeat those findings, for ease of reference:(1) The price of the new shares was not set either with the benefit of any external valuation advice, or on the basis of any calculations carried out internally.(2) The price of the new shares to be offered pursuant to the Capital Raises was set by the Second and Third Defendants at the price of £1 because (i) they considered the Company to be practically insolvent, and (ii) on the previous increase in the share capital of the Company, in November 2018, the new shares were offered at this price.(3) In the pricing of the new shares, neither the Second Defendant nor the Third Defendant was engaged in any scheme to dilute the shareholding of the Claimant in the Company.[697]Applying my findings in relation to the expert evidence of Mr Weaver, the new shares were not set at the wrong price in relation to any of the Capital Raises. The new shares were priced at a figure of £1 each, when they in fact had nil value.[698]In the absence of any evidence to the contrary, and given my findings in relation to Ground 10, I find that the Second Defendant and the Third Defendant each acted in good faith in setting the price for the new shares and in the way which they considered, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole.[699]Putting all of the above analysis together I cannot see any case for saying that the Second Defendant or the Third Defendant breached any of the Directors’ Duties. I suppose it might be said that the Second and Third Defendants should, in the exercise of reasonable care and skill, have obtained external valuation advice on the price at which the new shares should be offered. Given, however, the perception of the Second and Third Defendants as to the financial situation of the Company at the time of the Capital Raises, which has not been shown to be wrong, I do not think that there was any failure to exercise reasonable care and skill in this respect, independent of the point that, on the basis of Mr Weaver’s evidence, any such external valuation advice would have confirmed that £1 per new share was a reasonable price; being more than the shares were actually worth.[700]I therefore conclude that Ground 6 has not been established.

Grounds 7 and 8

[701]Grounds 7 and 8 have been established; see my decision on the First Breach Issue and the Defendants’ admission of the Second Breach. I have decided that the Company did, by the First Breach, contravene its duty in Section 561 in relation to the First Allotment. The contravention of Section 561 in relation to the Second Allotment, namely the Second Breach, is now admitted. I have also decided that the Company did, by the First Breach, contravene its duty in Section 562 in relation to the First Allotment.

Ground 9

[702]Ground 9 has not been established; see my decision on the Joint Liability Issue. I have found that neither the Second Defendant nor the Third Defendant knowingly authorised or permitted the First Breach or the Second Breach.

Ground 11

[703]This ground seems to me to be problematic, essentially for two reasons.[704]First, the conduct which is complained of in relation to Ground 11 has to be viewed in the light of my findings on the expert evidence of Mr Weaver, the Joint Liability Issue, the Causation Issue, the Mitigation Issue and the remainder of the Grounds. Putting to one side the 2019 Accounts, which I have not yet considered, the position on my findings is as follows:(1) The breaches of Sections 561 and 562 (the First Breach), which occurred in relation to the First Offer Letter, were inadvertent. There was no deliberate conduct and no scheme to dilute the Claimant’s shareholding in the Company.(2) The breach of Section 561 (the Second Breach), which occurred in relation to the Second Capital Raise, was also inadvertent. Again, there was no deliberate conduct and no scheme to dilute the Claimant’s shareholding in the Company.(3) There was no illegality in relation to the Third Capital Raise and no scheme to dilute the Claimant’s shareholding in the Company.(4) In relation to the failure validly to communicate the Meeting Notices to the Claimant, there was no deliberate conduct and no scheme to dilute the Claimant’s shareholding.(5) In relation to the 2018 Accounts, the conduct of the Second and Third Defendants is open to criticism, but the Claimant’s case that the Second and Third Defendants were trying to prevent scrutiny of the 2018 Accounts because they knew that the figures did not add up, has not been established.(6) So far as negotiations were concerned, the worst which can be said of the Second and Third Defendants is that they failed to respond to the Claimant’s email of 3rd July 2020, and that the Second Defendant failed actually to send the October 2020 Email. The Second and Third Defendants can be criticised for these failures, but the history of the negotiations which followed the Second Offer does demonstrate that, on both sides, there was some attempt to find a negotiated solution. In relation to the Third Capital Raise, negotiations broke down because the Third Offer was made on the basis that the Claimant’s shareholding had been diluted by the First and Second Allotments. As a matter of law, the Third Offer was made on the correct legal basis.(7) The Third Offer was made on the correct legal basis because the Claimant had not subscribed in response to the First Capital Raise and the Second Capital Raise. I have, however, already found that the Claimant would not and could not have subscribed in response to the First Capital Raise if the First Offer Letter had been validly communicated to him, and would not and could not have subscribed in response to the Second Capital Raise if the Second Offer had been in the correct form.[705]Given the position on my findings, as summarised above, I find it difficult to see, on an objective basis, any reasonable grounds for the Claimant to have lost confidence in the management of Company. Over and above this, in the latter part of 2019, the Company was in serious financial trouble. The Company needed to raise funds, and had no means of doing so other than by raising funds from its shareholders. These required measures were organised by the Second and the Third Defendants and, by reference to the current (31st December 2024) equity valuation of the Company provided by Mr Weaver, the Company has survived the crisis and prospered. None of this is indicative of incompetent management or of management directed against the interests of the Claimant as a shareholder in the Company.[706]I have not dealt with the 2019 Accounts in the analysis set out above. By way of reminder, the 2019 Accounts are the accounts/financial statements of the Company for the period from 1st January 2019 to 31st December 2019. The 2019 Accounts barely featured in the submissions. Statements made in the 2019 Accounts, as with the 2018 Accounts, are relied upon in the Amended Particulars of Claim in support of the contention that the Company had no need to raise funds from its shareholders, and in support of the contention that the Second and Third Defendants knew this to be the case. I have however already rejected those contentions in relation to the 2018 Accounts. In my judgment, they also fall to be rejected in relation to the 2019 Accounts. I note that the 2019 Accounts were also prepared on the basis that the small companies regime applied to their preparation. I do not know whether the qualifying conditions in Section 382 were met in relation to the 2019 Accounts. As I read paragraphs 52-54 of the Amended Particulars of Claim, the complaint that the small companies regime did not apply to the preparation of the Company’s accounts is confined to the 2018 Accounts. If, however, I am wrong in this supposition, and if the 2019 Accounts were prepared on the wrong basis, the evidence does not justify a finding that the Second and Third Defendants were engaged in a cover up, any more than this finding can be made in relation to the 2018 Accounts.[707]In these circumstances, I cannot see that the conduct of the Second and Third Defendants in relation to the 2019 Accounts produces any different conclusion to that which I have already stated in relation to the remainder of the conduct relied upon in support of Ground 11. I find it difficult to see, on an objective basis, any reasonable grounds for the Claimant to have lost confidence in the management of Company by reason of this conduct.[708]Second, I have so far considered Ground 11 on an objective basis, by asking whether there was reasonable cause for the Claimant to lose confidence in the management of the Company. This assumes however(i) that the Claimant did lose confidence in the management of the Company, and(ii) that the Claimant suffered that loss of confidence by reason of the conduct of the Second and Third Defendants which is relied upon in support of Ground 11, so far as that conduct has been established on the evidence. In my judgment, neither of these assumptions is justified on the evidence.[709]In relation to the first of these assumptions, the Claimant gave the following important evidence towards the conclusion of his cross examination [T4/91/9-92/5]:
“Q. Anyway, you say that the reason why you're sat here today is because you want 17% −− A. Yeah. Q. −− of the shares in the company and you say you're prepared to pay £323,000 to have that 17%? A. That's what I say. Q. That's because you have confidence in the company in the way it's run, isn't it? A. From that time I always had confidence. What I know is that from the first offer it was invalidated and it also entitles Asenath to have her shares restored −− this offer was invalidated . Q. Mr Ndungu, you're going back, you're not answering my question. The reason why today you're saying to the court you want to have 17% of the shares in the company and that you're prepared to pay £323,000 is because you have confidence in the company and in the way it's run? A. Just as I had confidence then but I'm not ready to lose my 17 −− my −− Q. You had confidence then, you have confidence now? A. As a director . As a director then, although it happened behind my back as a director.”

Q. You had confidence then, you have confidence now?

[710]This evidence was given in the context of a passage of cross examination where the Claimant was being asked about the remedy he sought in the Section 994 Claim and, specifically, in relation to his claim for an order restoring his shareholding in the Company at 17% in exchange for a payment of £323,000, which is the sum the Claimant would have had to pay if he had subscribed to all three Capital Raises on the basis of a 17% shareholding in the Company. I accept the submission of counsel for the Second to Sixth Defendants that the extract from the Claimant’s cross examination which I have quoted above is evidence that he had, and has, confidence in the management of the Company, even if that confidence did not extend to Pevans and the management of the Business as a whole. As this extract seems to me to demonstrate, the Claimant’s real complaint in the Proceedings is that, in his view, the First and Second Capital Raises were carried out behind his back, by the Alleged Scheme. The complaint is not that he has lost confidence in the ability of the Second and Third Defendants to manage the Company, particularly given his own historic lack of involvement in the day to day management of the Company.[711]In summary, I find that the Claimant did not lose confidence in the management of the Company, as alleged in Ground 11.[712]If, however, it is assumed that I am wrong in the finding which I have just made, and the Claimant did lose confidence in the management of the Company, it is clear that the cause of such loss of confidence long predated the conduct relied upon for the purposes of Ground 11 and, on that hypothesis, was part of the Claimant’s long running unhappiness with the management of Pevans and the Business. In this context, I refer back to my findings on the Causation Issue and, in particular, to the Claimant’s email of 12th November 2019 sent to the Third Defendant. For ease of reference I quote the key paragraph from that email (by way of reminder, the underlining is my own):
“However I must admit the last 3 years have been hell. Trying to prevent pilferage of funds, trying to fight for cooperate governance and ethics in the group, trying to prevent fraud on certain directors, trying to prevent unauthorised remmitance of funds offshore, trying to introduce internal controls, trying to have an effective board and committees, trying to have regular scheduled meetings of which in 3 years only 3 substantive board meeting was held. Trying to have AGM for Auditors and Accountants to take shareholders through the books of accounts for last 5 years but in vain. Trying to introduce cooperate governance and avoidance of conflict of interests. All this in vain with more than US$ 260M sent and starched offshOre without subjecting such funds to openness of how the funds are used by opening and subjecting group accounts to Audit and presentation to shareholders. All this has been in vain. Even without basic decency and shame, by calling a hideous fraud on pre-emption of shares which is apparent even to a toddler. While thePevans has made over US$ 450m GGR in the last 5.5 years shareholders have only earned less than $60m in divided while officially more than $260m have been remitted offshore without any control or say from the Kenyan local shareholders. Despite that even the $260M taken away from local shareholders has now been grabbed again from them for a second time. My only hope is that on deeper scrutiny of official and unofficial such funds that their won't be tax evasion, money laundering etc. I remember very well local Kenyan Directors were told that when these $260m leaves Pevans they don't have any control over it. It has actually come to pass.”
[713]I have also found that, by 2019, a substantial rift had opened up between the parties in relation to the Business, with an accompanying lack of trust. On one side of the rift was a group which comprised, or at least included, the Claimant, Mr Kinuthia and Ms Wachera. On the other side of the rift was a group which comprised, or at least included, the Second to Fifth Defendants, Mr Macharia and Mr Karauri. If there was a loss of confidence in the management of the Company, it seems to me that it was caused by this rift, not by any of the conduct relied upon in support of Ground 11.[714]Drawing together all of the above analysis, I conclude that Ground 11 has not been established.

The alleged unpleaded grounds

[715]For the sake of completeness, I should mention that counsel for the Second to Sixth Defendants argued that the Claimant, in the closing submissions, had sought to rely, allegedly for the first time, on the suggestion that he had been unfairly prejudiced by his alleged exclusion from management decisions in relation to the Capital Raises. Counsel for the Second to Sixth Defendants complained that this was not a matter which had been pleaded, but also submitted that these (allegedly unpleaded) grounds did not, for various reasons, establish unfair prejudice in any event.[716]In the Claimant’s Reply Submissions, Mr Macpherson responded to this argument in the following terms:
“PN does claim that he was kept in the dark about: (i) the true financial position of SPG after Pevans licence was not renewed; (ii) the proposed capital raise and its alternatives; (iii) the 16.10.19 board meeting; (iv) the 2018 Financial Statements; (v) the 04.10.19 board meeting; and (vi) the management of SPG until his dismissal. These allegations form part of his evidence that D2-D5 formed part of a scheme to dilute his shareholding.”
[717]I am not sure that this particular argument takes matters much further forward. I do not think that there is a pleading point here. It seems to me that the Claimant was entitled to rely on his alleged exclusion in relation to the matters listed in his Reply Submissions, in support of his case that the Alleged Scheme existed. I have, however, considered those matters, as part of the analysis of the Grounds and, in particular, as part of my analysis of Ground 10. They have therefore been taken into account, in relation to the purpose for which they are relied upon by the Claimant.[718]Beyond this, the Claimant’s lack of involvement in the Capital Raises forms part of the alleged conduct of the Company’s affairs by the Second to Fifth Defendants which is said to have been unfairly prejudicial to the interests of the Claimant; see paragraph 98 of the Amended Particulars of Claim and the conduct which is complained of in Section E of the Amended Particulars of Claim. In my view, this lack of involvement is one of the matters which, subject to the relevant findings which I have made in this judgment, I can and should consider, as part of my consideration of whether there has been unfairly prejudicial conduct. In that consideration I do not think that I should leave out of account any of the particular matters relied upon by the Claimant, as identified in the extract from his Reply Submissions which I have quoted above.[719]The bulk of the Grounds have not been established. It is convenient to start by reiterating what has been established:(1) Ground 5 has been established in part. In failing validly to communicate the Meeting Notices to the Claimant, the Second Defendant and the Third Defendant each failed to comply with Article 9(3) and thereby breached their duty in Section 171(a).(2) Ground 7 has been established. The Company contravened its duty in Section 561 in relation to the First and Second Allotments.(3) Ground 8 has been established. The Company contravened its duty in Section 562 in relation to the First Allotment.[720]As I have explained in the previous section of this judgment, it seems to me that I should also consider the Claimant’s lack of involvement in the Capital Raises and his lack of involvement in the management of the Company. At least so far as the Company was concerned, the Claimant was effectively excluded, even if not deliberately so, from the October 2019 Company Board Meeting, the November 2019 Company Board Meeting and from the initiation and implementation of the First and Second Capital Raises. Thereafter, the Claimant was removed as a director of the Company on grounds which, so far as the evidence at the Trial was concerned, appear to have had no substance. It seems to me that this effective exclusion from the management of the Company and the Claimant’s subsequent removal as a director of the Company are matters which I should consider, in relation to the question of whether there has been unfairly prejudicial conduct.[721]In their written closing submissions, the Claimants’ counsel drew my attention to two authorities which were relied upon as illustrating the wide range of conduct which could constitute unfairly prejudicial conduct. The first of these authorities was Seneschall v Trisant Foods Limited (in liquidation) [2023] EWHC 1029 (Ch). In his judgment ICC Judge Greenwood summarised the principles which apply to the determination of the question of whether there has been unfairly prejudicial conduct. In relation to exclusion from the management of a company, Judge Greenwood said this, at [143]:
“143. In the present case there were fundamental issues about the extent and terms of the parties' agreements – including whether the March Proposal was contractual, whether there was a Redemption Agreement, what were the effects of the ISHA and the HoTs, and whether Mr Seneschall was entitled (in his character as a member) to executive participation in the business (or there existed any restraint on the other parties' rights to diminish or end his participation). As to executive participation, there is no doubt that exclusion from management, in circumstances where the terms of the agreement between the parties entitled a member to participate, is capable of constituting unfairly prejudicial conduct. Even in the absence of an agreement, circumstances may exist which make it inequitable for the other member or members to insist on their strict legal rights so as to exclude the petitioner from management: see for example, Re Guidezone Ltd [2002] 2 BCLC 321 .”
[722]It will be noted that exclusion from management can constitute unfairly prejudicial conduct, “in circumstances where the terms of the agreement between the parties entitled a member to participate”. This in turn reflects the requirement, in relation to unfairly prejudicial conduct, that the prejudice must be suffered by the petitioner in an unfair prejudice claim in their capacity as a member of the relevant company.

Judge Greenwood explained this requirement in his judgment, at [138]:

“138. As to the requirement of " prejudice ", the first point (of some importance in this case, because of the different varieties of harm allegedly suffered) is that it must be suffered by the petitioner in his capacity as a member; that is his relevant protected interest. Thus, for example, it has been held that a member's rights under a lease (Re JE Cade & Sons Ltd [1992] BCLC 213 ) or an employment contract ( Re London School of Electronics Ltd [1986] Ch 178 ) were not rights enjoyed (or interests protected) as a member. Each case however depends on its own facts.”
[723]In his judgment at [144],

Judge Greenwood gave examples of conduct which would constitute unfair prejudice:

“144. Furthermore, I accept Mr Northall's submission that " exclusion " (or more accurately, unfair conduct in the nature of exclusion) is not limited to the termination of the petitioner's employment or office as director; circumstances will vary from case to case, and the question is not whether a petitioner has been " excluded ", it is whether he has been unfairly prejudiced. It is not therefore an answer to the present case that Mr Seneschall was at all times a director officer, and still a member of the Company, and that there has been no attempt to deprive him of either status. For example, unfair prejudice may comprise matters such as: i) excluding the petitioner from management decisions, or taking such decisions in secret and/or without informing him: Robertson, Petitioner (No.1) 2010 SLT 143 . ii) changing the locks, barring the petitioner's mobile telephone, withdrawing his company car, informing him that he can have no contact with customers, and commencing a disciplinary process in the company's name: Re Phoenix Contracts (Leicester) Ltd [2010] EWHC 2375 (Ch) at [112]-[116] . iii) denying the petitioner access to the company's banking arrangements: Re Abbington Hotel Ltd [2012] 1 BCLC 410 from [91]. iv) failing to inform the petitioner of matters having a fundamental effect on the company.” i) excluding the petitioner from management decisions, or taking such decisions in secret and/or without informing him: Robertson, Petitioner (No.1) 2010 SLT 143 . ii) changing the locks, barring the petitioner's mobile telephone, withdrawing his company car, informing him that he can have no contact with customers, and commencing a disciplinary process in the company's name: Re Phoenix Contracts (Leicester) Ltd [2010] EWHC 2375 (Ch) at [112]-[116] . iii) denying the petitioner access to the company's banking arrangements: Re Abbington Hotel Ltd [2012] 1 BCLC 410 from [91]. iv) failing to inform the petitioner of matters having a fundamental effect on the company.”
[724]The second authority to which I was referred was Re Coloursource Ltd, Dalby v Bodilly [2004] EWHC 3078 (Ch). The case was concerned with an unfair prejudice petition pursuant to what was then Section 459 of the Companies Act 1985. An application was made for summary judgment by the petitioner, for an order that his shares be bought out at a price to be determined by an independent valuer. The particular relevance of the case lies in the fact that one of the complaints of the petitioner was that his shareholding in the company had been diluted, without lawful authority, from a 50% shareholding to a 5% shareholding.[725]Blackburne J was in no doubt that the petitioner had established his case, so far as dilution of his shareholding was concerned.

The judge stated his conclusions on this question in the following trenchant terms, at [16]-[18]:

“16. In my view, Mr Bodilly's action in allotting the 900 shares was a blatant case of breach of fiduciary duty in that he was plainly and flagrantly putting his own interests before those of his fellow shareholder. In no sense can his action be justified as being in the interests of the company as a whole. 17. Mr Bodilly now accepts that the allotment to himself was wrongful and a clear breach of his fiduciary duty. He does not, as I understand it, seek to defend that. Indeed, Mr Bodilly is seeking Mr Dalby's co-operation in the signing of a written resolution of the company's shareholders (that is of the two of them) to reverse the allotment. But as Mr Potts, who appears for Mr Dalby, points out, that cannot simply be achieved by act of the corporators. The court's assistance will be needed. 18.. In my judgment Mr Bodilly's action in causing, in flagrant breach of his fiduciary duty to the company, the allotment and issue to himself, nil-paid, of these additional 900 shares unquestionably amounted to unfairly prejudicial conduct. At all events, in my judgment Mr Bodilly has no real prospect of successfully contending otherwise at a trial of the petition. It is irrelevant to that conclusion whether, as Mr Dalby contends, but Mr Bodilly denies, there were the understandings about how the company's business would be run and the basis upon which the two of them were to participate in that business, which Mr Dalby sets out in the petition. It is also irrelevant to the conclusion that no dividend has been declared on any of the 900 shares since allotment, or that no use has been made of that additional shareholding.”
[726]The Claimant’s counsel relied upon this case as illustrating that improper allotments of shares made in contravention of the statutory pre-emption requirements can constitute unfairly prejudicial conduct. I have no difficulty in accepting this proposition. I would only add that, as is apparent from the part of the judgment of Blackburne J which I have just quoted, the facts of Coloursource were very different to the facts of the present case, as I have found them.[727]Coming directly to the question of whether there has, on my findings, been unfairly prejudicial conduct in the present case, the essential problem which seems to me to confront the Claimant is demonstrating the required element of prejudice. Although relatively little remains of the Grounds, I can see that the failure of the Second and Third Defendants validly to communicate the Meeting Notices to the Claimant, in breach of the Articles and in breach of their statutory duties as directors of the Company, was capable of constituting unfairly prejudicial conduct. The effect of this failure was to deprive the Claimant of the opportunity to subscribe in response to the First and Second Capital Raises, and thereby to deprive the Claimant of the opportunity to avoid dilution of his shareholding in the Company. The same applies to the failure of the Company, by the First and Second Breaches, to comply with its statutory duties in relation to the First and Second Allotments. The Claimant was, again, thereby denied the opportunity to subscribe and avoid dilution of his shareholding.[728]I have however already found that the Claimant would not, and could not have subscribed in response to the First Offer and/or the Second Offer, if they had been validly communicated to the Claimant, in valid form. I find that this position would have been no different if one assumes a counter-factual scenario in which the Claimant had been given valid notification of the October 2019 Company Board Meeting and the November 2019 Company Board Meeting, and had attended both meetings.[729]I appreciate, from the authorities to which I have been referred on this question, that prejudice is not necessarily confined to prejudice of a financial character. In the present case, however, it is difficult to see what prejudice has been caused to the Claimant by the conduct established in relation to Grounds 5, 7 and 8, beyond the dilution of the Claimant’s shareholding in the Company and the loss which the Claimant alleged he had thereby been caused. It is not the Claimant’s case that the Company was a quasi-partnership, in the management of which he was involved and had a right to be involved by virtue of his position as a member of the Company. Nor is it the Claimant’s case that the Claimant had any legitimate expectation of being involved in the management of the Company by virtue of his position as a member of the Company. The Claimant’s case, by Ground 11, that the conduct of the Second and Third Defendants reasonably caused the Claimant to lose confidence in the management of the Company, has failed. The question is whether the Claimant suffered prejudice in his capacity as a member of the Company. It seems to me that unless that prejudice can be demonstrated in relation to the dilution of the Claimant’s shareholding in the company, there is no other prejudice to which the Claimant can point, in his capacity as a member of the Company.[730]This point also seems to me to provide the answer to the Claimant’s attempts to rely upon his lack of involvement in the Company, and his ultimate removal as a director of the Company, for the purposes of demonstrating unfair prejudice. Again, I can see how this conduct was capable of constituting unfairly prejudicial conduct, but to the extent that this lack of involvement contributed to the loss of opportunity to subscribe in response to the First and Second Capital Raises and thereby to avoid dilution of the Claimant’s shareholding in the Company, the Claimant is confronted by the same problem; namely the requirement to demonstrate prejudice. It seems to me that this prejudice cannot be demonstrated, given my findings that the Claimant would not and could not have subscribed in response to the First Offer and/or the Second Offer if he had been given the opportunity to do so.[731]It may be said that the Claimant has suffered other prejudice by reason of his lack of involvement in the management of the Company and/or by reason of his removal from his directorship of the Company. There are, however, two problems with this analysis. The first is that if the Claimant has been prejudiced in these respects, he has been prejudiced in his capacity as a director of the Company, not in his capacity as a member of the Company. It seems to me that I do not need to decide whether there has been any prejudice in this respect. Indeed, I do not think that I am in a position to decide whether there has been any prejudice in this respect, given that the prejudice which is relied upon by the Claimant is concerned with the dilution of his shareholding in the Company. I am not in a position to decide questions such as whether the Claimant was lawfully removed as a director of the Company. The relevant point is that if, and to the extent that, the Claimant can point to prejudice suffered by reason of his lack of involvement in the management of the Company and/or by reason of his removal from his directorship of the Company, I cannot see that any such prejudice has been suffered by the Claimant in his capacity as a member of the Company.[732]The second problem, so far as lack of involvement in the management of the Company is concerned, is that this lack of involvement was, as I have found, historic. This lack of involvement was in place, and was an established practice, well before the events which have given rise to the Proceedings. In these circumstances I have difficulty in seeing how this lack of involvement, which does not appear to have generated any protest from the Claimant until his discovery of the implementation of the First Capital Raise, can be said to have constituted unfairly prejudicial conduct. It appears to have been a situation, and I so find, which was accepted by the Claimant and the Second and Third Defendants.[733]Drawing together all of the above analysis, and taking into account both those of the Grounds which have been established and the Claimant’s complaints in relation to the management of the Company, I conclude, for the reasons which I have given, that the Claimant has failed to demonstrate that the affairs of the Company have been conducted in a manner which was unfairly prejudicial to the interests of the Claimant. More specifically, the Claimant has failed to establish that there has been any conduct of the affairs of the Company which has caused him to suffer prejudice, in his capacity as a member of the Company.

The Section 994 Claim - remedies

[734]The failure of the Claimant to establish unfairly prejudicial conduct means that the question of remedies does not arise. Given the extent of the discretion of the court in this respect, and given that the remedy to be granted in any particular case will necessarily be related to the unfairly prejudicial conduct which has been found, it seems to me that it is neither possible nor appropriate for me to attempt to address the question of remedies, or the arguments of the parties in this respect, on a hypothetical basis.[735]It seems to me that there is one matter which I should record, in relation to the question of remedies. If I had decided that the Claimant had established unfairly prejudicial conduct, on the basis of those matters in the Grounds which the Claimant was able to establish and/or on the basis of the Claimant’s lack of involvement in the management of the Company, it seems to me that neither the Fourth Defendant nor the Fifth Defendant could have had any liability in respect of such unfairly prejudicial conduct. I have found that there was no Alleged Scheme. I have found that the Second and Third Defendants were not the nominees, respectively, of the Fourth Defendant and the Fifth Defendant. Nor am I otherwise persuaded that the Fourth Defendant or the Fifth Defendant had a level of involvement in the management of the Company, at any relevant time, which would justify imposing upon either of them a liability for such unfairly prejudicial conduct.

The Section 994 Claim – overall conclusion

[736]The failure of the Claimant to establish unfairly prejudicial conduct means that the Section 994 Claim fails, and falls to be dismissed.

The outcome of the Trial

[737]The outcome of the Trial is as follows:(1) The Pre-Emption Rights Claim has failed, and falls to be dismissed or struck out. I will hear counsel further, as necessary, as to the precise form of order which I should make to dispose of the Pre-Emption Rights Claim.(2) The Section 994 Claim has failed, and falls to be dismissed.[738]I will hear counsel further, as necessary, on the terms of the order to be made consequential upon this judgment. In the usual way, the parties are encouraged to agree, subject to my approval, as much as they can in relation to the terms of the order.

Cited in 1 later judgment