“(a) it considers that the party has no real prospect of succeeding on the claim, defence or issue; and (b) there is no other compelling reason why the case or issue should be disposed of at a trial.”
“19. There is no disagreement between the parties about the principles which the court should apply in construing the articles of association of a company. The articles are a statutory contract between the members, and between each member and the company. They must therefore be construed in accordance with the ordinary principles that apply to the interpretation of any written contract. Those principles have been discussed and refined in many cases at the highest level, to which it is unnecessary to make detailed reference. 20. Like the judge, I find it helpful to refer to the approach endorsed by Lord Neuberger PSC in Arnold v Britton[2015] UKSC 36 ,[2015] AC 1619 , at [15] (omitting citations): "When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to "what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean", … And it does so by focusing on the meaning of the relevant words … in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provision of [the contract], (iii) the overall purpose of the clause and the [contract], (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party's intentions." 21. More recently, in Wood v Capita Insurance Services Limited[2017] UKSC 24 ,[2017] 2 WLR 1095 … the Supreme Court has confirmed that the principles of contractual interpretation stated in Arnold v Britton did not involve any departure from the guidance previously given by the Supreme Court in Rainy Sky SA v Kookmin Bank[2011] UKSC 50 ,[2011] 1 WLR 2900 : see the judgment of Lord Hodge JSC (with whom the other members of the court agreed) at [8] to [15]. 22. With reference to the "unitary exercise" of interpretation referred to by the Court in both Arnold and Rainy Sky, Lord Hodge said this: "12. This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated: the Arnold case, para 77 citing In Re Sigma Finance Corpn[2010] 1 All ER 571 , para 12, per Lord Mance JSC. To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each. 13. Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation. Rather, the lawyer and the judge, when interpreting any contract, can use them as tools to ascertain the objective meaning of the language which the parties have chosen to express their agreement. The extent to which each tool will assist the court in its task will vary according to the circumstances of the particular agreement or agreements." "When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to "what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean", … And it does so by focusing on the meaning of the relevant words … in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provision of [the contract], (iii) the overall purpose of the clause and the [contract], (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party's intentions." "12. This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated: the Arnold case, para 77 citing In Re Sigma Finance Corpn[2010] 1 All ER 571 , para 12, per Lord Mance JSC. To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each. 13. Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation. Rather, the lawyer and the judge, when interpreting any contract, can use them as tools to ascertain the objective meaning of the language which the parties have chosen to express their agreement. The extent to which each tool will assist the court in its task will vary according to the circumstances of the particular agreement or agreements." 23. As to admissible extrinsic facts of which it is legitimate to take account when construing the articles of the claimant companies, the judge at [26] and [27] noted that Mr Salzedo QC for the defendants accepted that reliance could only be placed on matters which were public knowledge derived from the companies' annual returns. On this footing, regard could be had to the fact that each company is essentially a small company, that it has always had only one class of share, and that there has only ever been a small number of shareholders since its creation. Mr Hollington QC for the companies agreed with this approach, and so do I.”
“The result is that the process of interpretation to arrive at the true meaning of a provision in a company’s articles of association must concentrate on the natural and ordinary meaning of the words used, when viewed in light of the scheme and purpose of the articles in general, any extrinsic facts about the company or its membership that would reasonably be ascertainable by any reader of the company’s constitution and public filings at Companies House, and commercial common sense.”) In consequence, terms cannot be implied from extrinsic circumstances: Bratton Seymour Service Co Ltd v Oxborough[1992] BCLC 693 at 698-699, and JMW Solicitors LLP v Injury Lawyers 4U Ltd[2025] EWHC 1045 (Ch) , per HHJ Cawson KC (as he then was) sitting as a judge of the High Court, at [82]-[88]. 28.2. Second, articles are a business document and so should be construed to give them reasonable business efficacy, and make them workable: per Jenkins LJ in Holmes v Keyes (Lord)[1959] Ch 199 at 215, and Arden LJ (as she then was) in Jones v BWE International Ltd[2003] EWCA Civ 298 at [21]-[24] and [31]. 28.3. Third, that in the interpretation of provisions concerned with the loss of a shareholder’s rights, potentially ambiguous terms are to be construed strictly, because they are expropriatory in nature, and ownership of a share confers property rights: per Arden LJ in Re Coroin Ltd[2013] EWCA Civ 781 at [65], Kulkarni v Gwent Holdings Ltd[2025] EWCA Civ 1206 per Newey LJ at [52], and per Lord Greene M.R in Re Smith and Fawcett Ltd[1942] Ch. 304 at 306 (in the particular context of the right to transfer), as follows: “[When using their power under the articles to reject a share transfer, the directors] 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. When it is said, as it has been said more than once, that regard must be had to this last consideration, it means, I apprehend, nothing more than that the shareholder has such a prima facie right, and that right is not to be cut down by uncertain language or doubtful implications. The right, if it is to be cut down, must be cut down with satisfactory clarity. It certainly does not mean that articles, if appropriately framed, cannot be allowed to cut down the right of transfer to any extent which the articles on their true construction permit.”
“18 There is no dispute about the legal principle. As stated by Lord Diplock in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971]AC 850, 883, waiver by election arises: “in a situation where a person is entitled to alternative rights inconsistent with one another. If he has knowledge of the facts which give rise in law to these alternative rights and acts in a manner which is consistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be the legal consequence of what he did.” 19 Lord Goff of Chieveley further explained the principle in Motor Oil Hellas (Corinth) Refineries SA v Shipping Corpn of India (The Kanchenjunga)[1990] 1 Lloyds Rep 391 , 398, where he said: “Election itself is a concept which may be relevant in more than one context. In the present case, we are concerned with an election which may arise in the context of a binding contract, when a state of affairs comes into existence in which one party becomes entitled, either under the terms of the contract or by the general law, to exercise a right, and he has to decide whether or not to do so. His decision, being a matter of choice for him, is called in law an election . . . In particular, where with knowledge of the relevant facts a party has acted in a manner which is consistent only with his having chosen one of the two alternative and inconsistent courses of action then open to him for example, to determine a contract or alternatively to affirm it he is held to have made his election accordingly … [An election] can be communicated to the other party by words or conduct; though, perhaps because a party who elects not to exercise a right which has become available to him is abandoning that right, he will only be held to have done so if he has so communicated his election to the other party in clear and unequivocal terms … Once an election is made, however, it is final and binding …” 20 More recently, in Kosmar Villa Holidays plc v Trustees of Syndicate [2008] Bus LR 931, para 38, Rix LJ said: “[Election] generally requires knowledge of the facts giving rise to the choice on the part of the party electing, and knowledge of the choice having been made on the part of the other party. Those are the conditions which make the doctrine mutually fair. It typically arises where the parties to a contract have to know where they stand. Thus the choice has either to be communicated unequivocally by the party electing to the other party or else the objective circumstances have to be such that the effluxion of time by itself constitutes that communication. Since the election is the choice of the party electing, it is his conduct which is decisive. Once made the election is final and irrevocable.” 21 The principle of waiver by election is not needed to explain why a decision to terminate a contract, once communicated, is final and irrevocable. A valid termination has the legal effect of discharging both parties (from then on) from their obligations under the contract. Those obligations could only be reinstated by making a new contract. But the principle is needed to explain why a party who communicates unequivocally an intention to continue with performance thereby loses the right to terminate the contract (in so far as the right was based on facts then in existence and known to the electing party). What is fundamental to the principle of waiver by election and crucial for present purposes is that it is only capable of applying where a choice must be made between two alternative and inconsistent (in the sense of mutually exclusive) courses of action, such that adopting one of them necessarily entails forsaking the other.” “in a situation where a person is entitled to alternative rights inconsistent with one another. If he has knowledge of the facts which give rise in law to these alternative rights and acts in a manner which is consistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be the legal consequence of what he did.” “Election itself is a concept which may be relevant in more than one context. In the present case, we are concerned with an election which may arise in the context of a binding contract, when a state of affairs comes into existence in which one party becomes entitled, either under the terms of the contract or by the general law, to exercise a right, and he has to decide whether or not to do so. His decision, being a matter of choice for him, is called in law an election . . . In particular, where with knowledge of the relevant facts a party has acted in a manner which is consistent only with his having chosen one of the two alternative and inconsistent courses of action then open to him for example, to determine a contract or alternatively to affirm it he is held to have made his election accordingly … [An election] can be communicated to the other party by words or conduct; though, perhaps because a party who elects not to exercise a right which has become available to him is abandoning that right, he will only be held to have done so if he has so communicated his election to the other party in clear and unequivocal terms … Once an election is made, however, it is final and binding …” “[Election] generally requires knowledge of the facts giving rise to the choice on the part of the party electing, and knowledge of the choice having been made on the part of the other party. Those are the conditions which make the doctrine mutually fair. It typically arises where the parties to a contract have to know where they stand. Thus the choice has either to be communicated unequivocally by the party electing to the other party or else the objective circumstances have to be such that the effluxion of time by itself constitutes that communication. Since the election is the choice of the party electing, it is his conduct which is decisive. Once made the election is final and irrevocable.”