Jonathan Frank Bown v Clive Shipley & Anor [2026] EWHC 918 (Ch)

[2026] EWHC 918 (Ch)

Case No CR-2026-BRS-000050

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS IN BRISTOL

INSOLVENCY AND COMPANIES LIST (ChD)

Venue Bristol Civil Justice Centre, 2 Redcliff Street, Bristol, BS1 6GR

Date 20 April 2026

Before

HHJ PAUL MATTHEWS

(sitting as a Judge of the High Court)

Between

JONATHAN FRANK BOWNPetitioner

CLIVE SHIPLEYRespondents

DURLEY FARM LIMITEDRespondent

The Petitioner in person for in person

Richard Ascroft (instructed by Michelmores LLP) for First Respondent

Hearing Hearing date: 17 April 2026

This judgment was handed down remotely at 5:30 pm on 20 April 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

HHJ Paul Matthews :

Introduction

[1]This is my judgment on an application made in form N244 dated 8 April 2026 for injunctive relief in a petition presented on the same day under section 994 of the Companies Act 2006. The company the subject of the petition, Durley Farm Limited (“Durley”), is the result of a joint venture between the petitioner and the first respondent, who both loaned money to the company, in order to acquire certain agricultural land in Somerset with a hope to future development. It is accordingly a two-person company, but unfortunately the two persons have now fallen out. Originally, both indirectly owned 50% of Durley, each of them through a separate company of his own. There is a dispute as to whether the petitioner now owns 50% directly. Both were at one time directors. There is a further dispute as to whether the petitioner still is a director. But there is no doubt that the first respondent is currently running the company and the petitioner is not. The petitioner claims to have been unlawfully removed as a director and to have suffered other unfair prejudice to his interests as a member through the conduct of Durley’s affairs by the first respondent.

[2]In addition to presenting the petition, the petitioner by this application immediately seeks interim relief pending the trial of the petition. I will set this out in full later, but at this stage it can be summarised in four points as follows:(1) an injunction restraining the first respondent from acting as a director of Durley;

(2) an injunction restraining the first respondent from disposing of or otherwise dealing with the agricultural land belonging to Durley;

(3) an order that the petitioner be reinstated as a director of Durley; and

(4) an order for the appointment of independent accountants at the expense of the first respondent to review Durley’s accounts. Points (1) and (3), taken together, would involve a change in the present management of the company, from the first respondent to the petitioner.

[3]The petition and the application are both supported by a witness statement of the petitioner dated 8 April 2026, together with some 22 exhibits. The application is opposed by a witness statement from the first respondent dated 16 April 2026, together with one exhibit. The application was argued before me on Friday, 17 April 2026, the petitioner appearing in person, and the first respondent being represented by Richard Ascroft of counsel. (I mention here that at an earlier stage the petitioner was represented by solicitors, who sent a letter before claim to the first respondent on 19 December 2025. But those solicitors subsequently ceased to act for the petitioner, and he is now a litigant in person.)

[4]It was however apparent to me from the form in which the petition, application and evidence have been drafted, as contrasted with the petitioner’s advocacy on his own behalf, that the lay petitioner has had professional assistance in the drafting of the relevant documents. This is, of course, a good thing, because it enables the court to see more quickly what are the points in issue. But, since the petitioner as his own advocate did not really understand the documents he had filed, it did mean that he had occasional difficulty in dealing with some of my questions during the argument arising from the documents that had been drafted for him.

[5]I should also add that, having reserved my judgment at the end of the hearing, I indicated that I hoped to produce a written judgment early in the following week. Earlier today, Monday 20 April 2026, I received further written submissions from both sides. I have not taken any of these further submissions into account, as my judgment was already close to being completed, and I did not consider that there were any that could not have been made at the hearing itself.

The allegations of conduct unfairly prejudicial

[6]For present purposes, I can summarise the allegations contained in the petition of conduct unfairly prejudicial to the interests of the petitioner as a member of the company as follows:(1) the misappropriation by the first respondent of about £123,000 of the company’s funds between October 2016 and February 2017;

(2) the creation by Pearson May, the company’s accountants, of false accounting entries in 2017, concerned with the funding and construction of a barn on Durley’s land;

(3) the withholding between 2017 and 2019 by the first respondent of electronic access to the company’s bank accounts and their operation, and to the company’s cheque book, and the failure to disclose documents evidencing the misappropriation of the sum of £123,000 referred to above;

(4) the failure of the first respondent to respond to statutory information requests made to him, and the failure of Pearson May to respond to subject access requests and statutory information requests made to them;

(5) the failure in 2024 by the first respondent to accept the petitioner’s offer to submit accounts to Companies House on the basis that Durley was dormant (as in 2017 to 2024, and in which he had acquiesced), and his insistence on filing accounts on the basis that it was not dormant;

(6) the filing by the first respondent at HM Land Registry of an RX1 restriction on behalf of the company, so obstructing the registration of the transfer in October 2024 by form TR1 (signed by the petitioner on behalf of the company) to the petitioner of title to the company’s land, in satisfaction of the petitioner’s claim to call in his loan to the company at any time;

(7) the holding by the first respondent from 2024 onwards of inquorate directors’ meetings and the production of minutes of such meetings, and the attendance by Pearson May at such meetings in breach of their protocol of 1 June 2017 requiring proper quorum and dual-director consent;

(8) the filing by the first respondent or Pearson May on his behalf on about 19 June 2024 of a form TM01 at Companies House purporting to remove the petitioner as a director of Durley;

(9) the filing by the first respondent on about 9 March 2026 of a form PSC07 at Companies House purporting to remove the petitioner as a person with significant control of the company;

(10) the exclusion by the first respondent of the petitioner from company management functions, including discussions with third parties about the possible disposal of the land, refusal to comply with statutory requests, and conduct amounting to misrepresentation, intimidation and trespass, directed at two brothers called Plumpton, alleged by the petitioner to be tenants of Durley’s land under a tenancy granted by his own company, ENR;

(11) breaches by the first respondent of his director duties under sections 171-175 of the Companies Act 2006, by virtue of the conduct set out in the earlier paragraphs.

The interim relief sought on this application

[7]I summarised the relief sought on this application earlier in this judgment. I need now to make clear its full terms. These are set out in the application notice as follows:

“1. An injunction restraining the First Respondent, whether by himself, his servants, agents or otherwise howsoever, from: (a) acting as a director of Durley Farm Limited (Company No. 08911516) or purporting to exercise any powers of a director of the Company; (b) giving instructions to any solicitor, agent, accountant, or other third party purportedly on behalf of the Company; (c) making any filing at Companies House purportedly on behalf of the Company; (d) entering into any contract, agreement, or commitment purportedly on behalf of the Company; and (e) communicating with the Company's tenants, Carlo Plumpton and Scott Plumpton, or entering onto the Land (Title ST194496) without the prior written consent of the Petitioner. 2. An injunction restraining the First Respondent, whether by himself, his servants, agents or otherwise howsoever, from: (a) disposing of, transferring, charging, or otherwise dealing with the Company's land registered at HM Land Registry under title number ST194496; (b) entering into or completing any agreement for the sale, option, or other disposition of that land; and (c) receiving or disbursing any proceeds arising from any such transaction. 3. An order that the Applicant be reinstated on the Companies House register as a director of Durley Farm Limited pending the final determination of the Petition. 4. An order appointing independent accountants (at the First Respondent's expense) to review the Company's accounts pending the final determination of the Petition. 5. Costs.”

Paragraph (2) is a conventional interim prohibitory injunction. Paragraphs (1), (3) and (4) are interim mandatory injunctions. Paragraphs (1) and (3), taken together, amount to a so-called “change of management” order (discussed further below). (a) acting as a director of Durley Farm Limited (Company No. 08911516) or purporting to exercise any powers of a director of the Company; (b) giving instructions to any solicitor, agent, accountant, or other third party purportedly on behalf of the Company; (c) making any filing at Companies House purportedly on behalf of the Company; (d) entering into any contract, agreement, or commitment purportedly on behalf of the Company; and (e) communicating with the Company's tenants, Carlo Plumpton and Scott Plumpton, or entering onto the Land (Title ST194496) without the prior written consent of the Petitioner. (a) disposing of, transferring, charging, or otherwise dealing with the Company's land registered at HM Land Registry under title number ST194496; (b) entering into or completing any agreement for the sale, option, or other disposition of that land; and (c) receiving or disbursing any proceeds arising from any such transaction. Background The company

Background

[8]This is a case with many factual disputes between the parties, very few of which I am able to resolve at this early stage. But some things are capable of being determined objectively, and others are common ground. Durley was incorporated on 25 February 2014. I said earlier that each of the petitioner and the first respondent had originally taken a shareholding in Durley indirectly, through another entity. In the case of the petitioner, this entity was Embrize Natural Resources Ltd (“ENR”). In the case of the first respondent, this was Original Construction Company Ltd (“OCC”). The petitioner was the sole shareholder and director of ENR, and the first respondent was the sole shareholder and director of OCC. Each of ENR and OCC originally owned 50% of the issued share capital of Durley. There is an issue as to whether ENR has transferred its shares to the petitioner. I will come back to this.

[9]Durley’s articles of association were bespoke, although based on the model articles for private companies limited by shares contained in Schedule 1 to the Companies (Model Articles) Regulations 2008. They provide inter alia as follows:

“PRELIMINARY 1.1. The model articles of association for private companies limited by shares contained in Schedule 1 to the Companies (Model Articles) Regulations 2008 … (the ‘Model Articles’) shall apply to the Company save in so far as they are excluded or modified hereby and such Model Articles and the articles set out below shall be the Articles of Association of the Company (the ‘Articles’). [ … ] PROCEEDINGS OF DIRECTORS 3.1. The maximum and minimum number of directors may be determined from time to time by ordinary resolution. Subject to and in default of any such determination there shall be no maximum number of directors and the minimum number of directors shall be one. Whenever the minimum number of directors is one, the general rule about decision-making by the directors does not apply, and the sole director may take decisions without regard to any of the provisions of the articles (including Model Article 11(2)) relating to directors’ decision-making. [ … ] TERMINATION OF DIRECTOR’S APPOINTMENT 5.1. In addition to the events terminating a director’s appointment set out in Model Article 18, a person ceases to be a director as soon as that person has for more than six consecutive months been absent without permission of the directors from meetings of directors held during that period and the directors make a decision to vacate that person’s office. [ … ] WRITTEN RESOLUTIONS OF MEMBERS 15.1. [ … ] (b) The following may not be passed by a written resolution and may only be passed at a general meeting: – (i) a resolution under section 168 of the Companies Act 2006 for the removal of a director before the expiration of his period of office; [ … ] QUORUM AT GENERAL MEETINGS 17.1. [ … ] (b) If and for so long as the company has two or more members entitled to vote on the business to be transacted at a general meeting, two of such members, each of whom is present at the meeting in person or by one or more proxies or, in the event that any member present is a corporation, by one or more corporate representatives, or a quorum. [ … ]”

PROCEEDINGS OF DIRECTORS TERMINATION OF DIRECTOR’S APPOINTMENT WRITTEN RESOLUTIONS OF MEMBERS (b) The following may not be passed by a written resolution and may only be passed at a general meeting: – (i) a resolution under section 168 of the Companies Act 2006 for the removal of a director before the expiration of his period of office; QUORUM AT GENERAL MEETINGS (b) If and for so long as the company has two or more members entitled to vote on the business to be transacted at a general meeting, two of such members, each of whom is present at the meeting in person or by one or more proxies or, in the event that any member present is a corporation, by one or more corporate representatives, or a quorum.

QUORUM AT GENERAL MEETINGS

[10]Model Article 11(2) (referred to in, and disapplied by, article 3.1 above) reads: “The quorum for directors’ meetings may be fixed from time to time by a decision of the directors, but it must never be less than two, and unless otherwise fixed it is two”.

[11]I note in passing that article 5.1 of the company’s bespoke articles is plainly derived from regulation 81 of Table A (the old model articles under the Companies Act 1985 and earlier legislation). This regulation relevantly reads as follows:

“The office of a director shall be vacated if – [ … ] (e) he shall for more than six consecutive months have been absent without permission of the directors from meetings of directors held during that period and the directors resolve that his office be vacated.” [ … ] (e) he shall for more than six consecutive months have been absent without permission of the directors from meetings of directors held during that period and the directors resolve that his office be vacated.”

The acquisition of the land

[12]The purpose of forming Durley was to acquire a parcel of agricultural land on the north side of Durley Hill near Keynsham in Somerset. This was and is the company’s only significant asset. It was and is hoped that this land will have development value in the future. Although it is common in companies of this kind to have a shareholders’ agreement in place, so that the parties’ expectations and plans are clear, there is no such agreement in relation to Durley. I was shown minutes of a meeting of both parties as directors of Durley, held on 9 February 2015, in which the first respondent is recorded as saying that he thought a shareholders’ agreement would be a good idea, whereas the petitioner is recorded as stating that “now the company was established it was not worthwhile and not to spend further money on it”.

[13]The parties provided loans to Durley to enable it to acquire the land in question. These lans were repayable on demand. The land itself cost £150,000, but a sitting tenant was paid £3,000 to surrender his agricultural tenant’s rights, and certain “overage” rights over the land were bought out for £21,000. So, the total paid was £174,000. The petitioner provided his half personally. The first respondent’s half was split (unequally) between OCC and himself personally.

Misappropriation of funds?

[14]There is a dispute about alleged misappropriations of company funds in 2016-17 by the first respondent, amounting to some £123.000. The first respondent says that the withdrawals were made by him, partly as repayment of loans repayable on demand, partly to pay supplier and services liabilities, and partly as retention of monies for company liabilities, including tax.

The barn

[15]There is a dispute about the construction of a barn on the land. The minutes of a directors’ meeting (recording both directors as present) on 15 October 2014 record that planning permission had been obtained for the construction of a barn on the land, and that “suitable businesses could be introduced into [it] to get industrial use established over time and secure another income stream”. Minutes of a further meeting on 9 February 2015 (again recording both directors as present) referred to concrete foundations having been laid, and steelwork being constructed upon them. The petitioner says that the barn “was funded and part-built by me personally”, and that he “paid for materials directly, including concrete for the foundations”. The first respondent says that the barn was built by Arris Construction Ltd (“Arris”), of which the first respondent was a director and majority shareholder, with the agreement of the petitioner, and that the petitioner was aware of the first respondent’s interest in Arris. The petitioner says that he disputes any agreement for Arris to build the barn.

Occupation of the land

[16]There is a dispute about the terms on which ENR began to occupy the land in 2015. The minutes of the directors’ meeting of 9 February 2015 state that “Tenancy was on a non exclusive licence agreement as both [ENR] and Arris and possibly others would be in occupation … [The petitioner] wanted [ENR] to rent the land and Barn for £6000.00 for up to 5 years … ” ENR did go into occupation. The petitioner told me in oral submissions that, although the meeting did take place, the reference to rent of £6000 was fictitious, and that he was never sent a copy of the minutes. There is however no written agreement in respect of that occupation. The first respondent in his evidence says it was a non-exclusive licence for five years, at £6000 per annum, for the purposes of his firewood log business, and that the petitioner proposed a rent guarantee of £30,000, to help fund construction of the barn. The first respondent also says that in November 2015 the petitioner asked for a reduction in the rent to £1000 per annum because he was unable to work for medical reasons, to which the first respondent reluctantly agreed. On the other hand, the petitioner says it was a tenancy agreed from the beginning at £1000 per annum. He does not mention the rent guarantee, or the alleged reduction from £6000 to £1000.

[17]Nevertheless, whatever the terms on which ENR occupied the land, ENR certainly permitted sub-occupation by Carlo and Scott Plumpton thereafter. The petitioner’s evidence in his witness statement is that they “have occupied the Land for approximately ten years under tenancy agreements with me personally”, and that their occupation is “recorded in the Company’s 2015 accounts”. Unfortunately, the petitioner’s witness statement does not exhibit any financial statements for the company. I have therefore been obliged to look online at the (unaudited and abbreviated) financial statements for the company filed at Companies House for the years ended February 2015 and February 2016. Neither of these makes any mention of occupation by the Plumptons (or anyone else).

[18]On the other hand, there can be no doubt that the Plumptons were let into occupation of the land by the petitioner. The first respondent’s evidence is that the first he knew of this was in February 2025, when he became aware of an enforcement notice served in September 2024 by the local authority in respect of alleged breaches of planning control and unauthorised use of the land. His further evidence is that, in September 2025, he and the company’s land agent attended the land but were refused access and threatened by the Plumptons. It appears that, in October 2025, the first respondent instructed solicitors to ask the Plumptons to provide evidence of their right to occupy the land, but that in the event no agreement or other evidence was provided.

Dormant company?

[19]The petitioner in his evidence says that filed accounts on behalf of the company from 2017 to 2024 on the basis that it was a dormant company. He goes on to say that in 2024 the first respondent, against his wishes, filed accounts for the company on the basis that it was not dormant. The petitioner did not exhibit the financial statements concerned, so I have been obliged to look at those filed online at Companies House. There I can find dormant company financial statements only for the three years ended February 2021, 2022, and 2023. Those both before and after those years appear to be unaudited small (rather than dormant) company financial statements, which contain considerably more information than the dormant company statements. If the company really has been carrying on the activities evidenced by the earlier and later statements, then the petitioner was wrong to consider that it was entitled to dormant company status. Again, however, I am not yet in a position to decide this point.

Purported land transfer to the petitioner

[20]In October 2024, the petitioner purported to execute a transfer in form TR1 of the whole of Durley’s agricultural land to himself. He says in evidence that he did this in order to repay himself his on-demand loan to the company, “and interest”. If a demand had ever been made by the petitioner to the company for payment, he would have had evidence of it. But no evidence of such a demand has been adduced. Even more curiously, when in March 2017 the first respondent emailed the petitioner to say that he and OCC were “demanding return of the loans made to Durley Farm Ltd”, the petitioner responded “You do not have the authority to demand or force repayment of any loans made to Durley Farm Ltd without full directors and shareholders agreement”. Yet the petitioner considered that he himself was able to force repayment of the loan he had made, by unilaterally transferring the company’s land to himself, without the consent of the first respondent.

[21]The first respondent, on finding out about the TR1, pointed out that the loans were interest free. The petitioner says that, as a result, “Acting in good faith, I voluntarily transferred half the Land back to the Company in November 2924.” In answer to a question from me, the petitioner told me that the land was physically divided into two by the second TR1. The petitioner also says that, in December 2024, he lodged two UN1 unilateral notice applications to the Land Registry “to protect my beneficial interest in my half of the Land and to protect the existing tenancy”. It appears that the first respondent thereafter lodged a restriction in form RX1. But I understand that the land register still shows the company as the proprietor of all the land.

Form TM01

[22]The first respondent caused Pearson May to file a form TM01 relating to the petitioner at Companies House on 19 June 2025. The petitioner says that this purported to remove him as a director. This is not correct, and displays a misunderstanding of the law by the petitioner. Form TM01 is a notification to the Registrar of Companies that a person has ceased to be a director. It does not have the effect of removing that person from office. Whether a person has ceased to be a director depends on other considerations, such as resignation or removal under the company’s articles, or expiration of a limited term of office. Article 5.1 of the articles (set out above) provides for the removal of a director who fails to attend board meetings for a certain period. The first respondent’s evidence is that the petitioner had indeed failed so to attend meetings, and was removed from office under that provision. The petitioner sought the removal of the TM01, and Companies House contacted the company to ask for information. Excello Law, a law firm, replied to Companies House explaining that this was the result of the application of the company’s articles, and Companies House responded to say that the TM01 would not be removed. I am in no position on this application to resolve that dispute, but it means that the filing of the notice by itself is of rather less significance than the petitioner attributes to it.

Share transfer to the petitioner?

[23]As I have already said, each of the petitioner’s company ENR and the first respondent’s company OCC originally owned 50% of the issued share capital of Durley But the petitioner claims in his petition that there exists what he calls “a share transfer certificate”, by which ENR’s shares in Durley have been transferred to him. It appears that by this he means a stock transfer form. At the outset of the hearing the only evidence of such a stock transfer form was the assertion that one had been executed and was in existence. This was contained in the witness statement of the petitioner. But no other details were given. The evidence of the first respondent was that he had indeed been asked by the petitioner whether he objected to a transfer from ENR to the petitioner, and he said that he did not, subject to resolution of a matter pending at the Land Registry. However, in his evidence he denied that any such executed stock transfer form had ever been delivered to the company.

[24]However, when this was debated during the hearing, the petitioner asserted once again in submissions that there was indeed an executed stock transfer form in existence. After the short adjournment, the petitioner produced what he said were copies of that stock transfer form, dated 21 July 2025, together with a copy of an apparent share certificate. The petitioner accepted, however, that the transfer had not been registered in the register of members of the company. He told me in oral submissions (though it is not properly in the evidence) that he thought that the stock transfer form had been sent to the company by post. However, in the petition and in the petitioner’s witness statement (which is evidence) the allegation is quite different. It is that the first respondent removed the online authentication codes that would have enabled the petitioner to change the entries in the online register kept at Companies House. As the petitioner says in his witness statement, “That transfer has not been registered at Companies House because Mr Shipley removed the Company’s authentication codes without board authority or my consent, making it impossible for me to file the transfer form at Companies House”.

Occupation of the land (again)

[25]In January 2026 a land agent engaged on behalf of the company by the first respondent attended the land and met the Plumptons. According to the first respondent’s evidence, they told him that each of them separately had a tenancy agreement to occupy the land, Carlo form an earlier and Scott from a later date. Further, neither was them produced a copy of any tenancy agreement. A further letter was written to the Plumptons in February 2026, which the petitioner in his evidence describes as “seeking to intimidate [the tenants] and to undermine their lawful occupation of the land”. Indeed, this is one of the acts relied on in the petition as conduct unjustly prejudicial to the interests of the petitioner. The petitioner also asserts in his evidence that on “21 February 2026, Mr Shipley physically trespassed on the Land without authority or my consent”. He wrote an email to the first respondent on 7 March 2026, in which he described himself as “Beneficial land owner, Person in Control of the Land and Landlord to Tenants in Occupation”. Neither the Plumptons nor the petitioner have produced any tenancy agreements.

Form PSC07

[26]On 9 March 2026 the first respondent filed a notice at Companies House in form PSC07 relating to the petitioner. Similar considerations apply to this notice as to the TM01 discussed earlier. The filing does not cause a person to cease to be a person with significant control. It simply notifies the registrar that that has already happened. This can be seen from the notice itself, which states that the date of cessation was 18 February 2026 while the notice itself was filed on 9 March 2026. The petitioner seemed to think that this removed some power or authority from him, but so far as I can see it it does not, and filing such a notice cannot unfairly prejudice the petitioner’s interests as a member. During the hearing I was told by the first respondent’s counsel that in fact the petitioner had never been a person with significant control, and the notice was filed to make this clear. This is supported by the fact that a similar notice, identical in all but the name of the person concerned, was filed on the same day in relation to the first respondent. In other words, no-one was considered to be a person with significant control in relation to the company. Moreover, the reference to a date of cessation exists because the form does not allow the person filing to say that the subject has never been a person with significant control, and requires a date of cessation to be inserted, which cannot be more than a certain amount of time from the date of filing. Law Standing

Law

[27]There are two matters of law with which I must deal. One relates to the question of standing in law to present a petition under sections 994-996 of the Companies Act 2006. Section 994 of the 2006 Act relevantly provides: “(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. [ … ] (2) The provisions of this Part apply to a person who is not a member of a company but to whom shares in the company have been transferred or transmitted by operation of law as they apply to a member of a company.” (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.

[28]It will be seen that section 994(1) confers standing on “a member of a company”. As to this, section 112 of the Act provides:

“(1) The subscribers of a company's memorandum are deemed to have agreed to become members of the company, and on its registration become members and must be entered as such in its register of members. (2) Every other person who agrees to become a member of a company, and whose name is entered in its register of members, is a member of the company.”

[29]So, to be a member of a company, a person’s name must be in the register of members. That is the statutory register of members kept by the company under section 113 of the 2006 Act. It does not refer to any list maintained by the Registrar of Companies (ie at Companies House) under section 1080 of the Act. The petition complains that the petitioner was unable to change the record at Companies House because of the first respondent’s actions. Whatever the truth of that allegation, it is not relevant to the question whether the transfer has been registered in the company’s register of members. And the petitioner accepts that this has not happened.

[30]Section 994(2) then extends the scope of section 994 beyond members, to persons “to whom shares have been transferred or transmitted by operation of law”. Transfer and transmission by operation of law are two separate events. As to transfer, section 770(1)(a) provides that a company may not register a transfer of shares (not being an exempt transfer under the Stock Transfer Act 1982 or under certain other regulations) unless “a proper instrument of transfer has been delivered to it”. The usual instrument is a stock transfer form. If the transfer is for a consideration, it must be stamped by HMRC before it can be presented to the company. The other event, transmission by operation of law, occurs when a shareholder dies and the shares vest in his or her personal representative. It also occurs when a shareholder becomes bankrupt and the shares vest in his or her trustee in bankruptcy. Neither of those possibilities is relevant here.

[31]In Re a Company 003160 of 1986, Hoffmann J said this (at 99,279):

“In my judgment the word ‘transferred’ in section 459(2) [the forerunner of section 994(2)] requires at least that a proper instrument of transfer should have been executed and delivered to the transferee or the company in respect of the shares in question. Itis not sufficient that there should be an agreement for transfer. This construction accords with the view expressed by HarmanJ in Re a Company No 007828 of 1985 (1986) 2 BCC 98,951.”

[32]There is a further, negative point to standing. The petitioner in his petition does not claim to be a member of Durley, but does claim to be the “beneficial owner” of 50% of the issued shares in the company. This is because, although he does not hold shares directly in Durley, he owns all the shares in his company ENR, which is, or at any rate was, a 50% shareholder in Durley. In his view “beneficial ownership” of shares satisfies the requirement of being a member within section 994(1).

[33]Unfortunately, the petitioner is simply wrong in law about this. Just because the petitioner owns shares in a company (ENR) which in turn owns shares in the company the subject of the petition (Durley), this does not mean that he is the owner, or even the beneficial owner, of shares in Durley. This is elementary company law, deriving from the legal rule that a company is a separate legal person from its members. A fortiori, it does not mean that the petitioner is the owner, or beneficial owner, of any asset of Durley, such as the agricultural land at Durley Hill. Contrary to what the petitioner claims in his email of 7 March 2026, no shareholder has any proprietary interest in any asset of the company merely because he or she holds shares in that company: see Macaura v Northern Assurance Co Ltd

[1925] AC 619

, HL. This too is elementary company law. Coming closer to home, neither can a petition under section 994 be presented by a person with merely a beneficial interest in shares in the company: see egRe HLHP Oriental Food Ltd

[2025] BCC 1145

, [40]-[74], and cases there cited. So, the petitioner has no beneficial ownership of shares in Durley merely by reason of the fact that he is a shareholder in ENR. But, even if he had, it would not have availed him.

[34]However, there is also the question of an executed transfer of shares to the petitioner lodged with the company itself. This is relevant to the question of standing under section 994(2). I will assess this aspect later in this judgment.

Interim injunctions

[35]The other matter of law relates to the grant of an interim injunction, whether negative (so-called “prohibitory”) or positive (so-called “mandatory”). When the court is considering the grant of an interim injunction, the main problem is that the facts will not at that early stage have been established. Accordingly, the decision of the House of Lords in American Cyanamid Co v Ethicon Ltd

[1975] AC 396

holds that, as a general rule, the court should approach the matter in three stages. The first stage is to ask whether there is a “serious issue” to be tried between the parties. This does not require findings of fact. It does not even require that the applicant be considered likely to succeed at trial. It is a low hurdle to get over. If the answer is yes, the second stage is to ask whether damages would be an adequate remedy for the applicant if no injunction were granted, but the applicant were successful at trial, and then to ask the same question in relation to the respondent if an injunction were granted, but the respondent were successful at trial. If damages would be an adequate remedy, either way, no injunction should be granted. But, if damages would not be an adequate remedy, the third stage is to ask where the balance of convenience lies. Generally speaking, it will usually lie in preserving the status quo: see eg Siskina v Distos Compania Naviera SA

[1979] AC 210

, 256, per Lord Diplock.

[36]However, there are cases where it is not enough simply to ask whether there is a serious issue to be tried. These include cases where, “as a practical matter, the grant or refusal of an injunction at the interlocutory stage will, in effect, dispose of the action finally in favour of whichever party was successful in the application, because there would be nothing left on which it was in the unsuccessful party’s interest to proceed to trial”: Civil Procedure, 2026, vol 2, [15-18]. That is not this case. But they also include many cases of mandatory injunctions, such as are sought here.

[37]In Films Rover International Ltd v Cannon Film Sales Ltd

[1987] 1 WLR 670

, Hoffmann J said (at 680-81) that “ … the features which justify describing an injunction as ‘mandatory’ will usually also have the consequence of creating a greater risk of injustice if it is granted rather than withheld at the interlocutory stage unless the court feels a ‘high degree of assurance’ that the plaintiff would be able to establish his right at a trial. I have taken the liberty of reformulating the proposition in this way in order to bring out two points. The first is to show that semantic arguments over whether the injunction as formulated can properly be classified as mandatory or prohibitory are barren. The question of substance is whether the granting of the injunction would carry that higher risk of injustice which is normally associated with the grant of a mandatory injunction. The second point is that in cases in which there can be no dispute about the use of the term ‘mandatory’ to describe the injunction, the and therefore within the guideline of ‘exceptional’ and therefore requiring special treatment. If it appears to the court that, exceptionally, the case is one in which withholding a mandatory interlocutory injunction would in fact carry a greater risk of injustice than granting it even though the court does not feel a ‘high degree of assurance’ about the plaintiff's chances of establishing his right, there cannot be any rational basis for withholding the injunction.”

[38]In Garofalo v Crisp

[2024] EWHC 1737 (Ch)

, which was a case where an interim “change of management order” was sought, Freedman J said: “117. As the Deputy Judge rightly addressed, and as I do, borrowing some of her language, the first question is whether the court has the power to order the interim relief sought, in terms of the removal of the First Respondent as director of the English and appointment of others in his place. The power to grant interim relief in support of a s.994 petition arises under s.37 SCA 1981 under which the Court has power to make interlocutory orders by way of injunction, or the appointment of a receiver, in all cases in which it appears to be just and convenient to do so. The removal of directors by way of interim relief had been recognised as relief that is capable of being granted in certain circumstances: Re Premiere Care Holdings Ltd

[2021] EWHC 1595

. 118. The test is whether it is just and convenient to grant an order, although in the ordinary case intrusion should be kept to the minimum of what the court considers necessary and appropriate: Re Premiere Care Holdings Ltd

[2021] EWHC 1595

(at [55]). Whilst the Court was not referred to any case in this jurisdiction where such an order had been made in a section 994 petition, reference was made to a decision of a Hong Kong court in which interim relief introducing new directors in place of an existing director had been granted: see Shih-Hua Investment Co. Ltd v Zhangaidong and others

[2017] 3 HKC 393

(Mr Justice Anthony Chan in the First Instance Court). This kind of order, referred to as a reconstitution order, was in the context of a successful and profitable trading company. The underlying reasoning was that the Court had a power to appoint a receiver, but that would give rise to a perception in the market of insolvency or a business crisis, and the receivers would not hit the ground running as they would have to familiarise themselves with the business. 119. It is important to note that such an order was described as exceptional in the Shih-Hua case. This would be particularly so on a without notice application. The reasons for this can be gleaned in part from the case of Re Premiere Care Holdings Ltd, where the Deputy Judge (Mr Hugh Sims KC), having recognised the jurisdiction, refused to exercise it for the following reasons among others, namely:(i) intrusion in the internal affairs of companies by order of the court should be kept to a minimum;

(ii) such an interim order was inconsistent with the accepted position that each director was entitled to participate in management;

(iii) there was uncertainty as to what would be the final result after the judgment and who would end up in the overall control of the companies;

(iv) it was more appropriate to address concerns about the running of the companies by requiring undertakings or granting interim injunctions in respect of the particular issues raised. 120. As regards the last of those points, an injunction is a flexible remedy such that a petitioner could be protected by a variety of other orders designed to preserve the pre-existing possession until trial. Generally, on a s.994 petition it is desirable to preserve the status quo, or not change it more than is absolutely necessary, although this guideline only seems to be important if a change in the status quo would ‘affect the remedy which may be available’: Pringle v Callard

[2008] 2 BCLC 505

at [24]-[26]. In that case at [33], Arden LJ said the following: ‘In essence it is contrary to principle to impose a director on a company. It is highly impractical so to do in any event where there are disputes between the directors or indeed, as here, allegations of improper conduct. Accordingly, the court would have to be extraordinarily cautious before imposing a director on a company by way of an interim remedy, but as I have said it is not necessary to decide that point.’ 121. It was submitted by Mr Nicholls KC on behalf of Mr Crisp that the removal of a director is an extraordinary order ancillary to a section 994 unfair prejudice petition. This is for the following reasons, namely: (i) A usual interim order is to preserve the status quo. The Order granted is not just the removal of a director. It changes the operation and control of the company. Whilst not the ultimate final relief, it takes the parties some of the way down the line to a buyout which would be the final result of the petition. (ii) The starting point of a section 994 petition is to consider the parties' conduct against the contractual arrangements: see O'Neill v Phillips

[1999] UKHL 24

[1999] 1 WLR 1092

(v) A very common reason for an unfair prejudice petition is that the majority is excluding the minority from management of the company. The removal of a director by court order might be the court itself imposing an order amounting to unfair prejudice.

(vi) There could have been simply an injunction to prevent any further dealings with Russia and provision of detailed information in respect of such trading. 122. There has not been identified an authority in this jurisdiction before this case in which an ancillary order was made on a section 994 petition or in legislation which preceded it removing a director and replacing them with another director, whether on a without notice application or at all. That is not to say that it cannot be justified in principle.” (i) intrusion in the internal affairs of companies by order of the court should be kept to a minimum; (ii) such an interim order was inconsistent with the accepted position that each director was entitled to participate in management; (iii) there was uncertainty as to what would be the final result after the judgment and who would end up in the overall control of the companies; (iv) it was more appropriate to address concerns about the running of the companies by requiring undertakings or granting interim injunctions in respect of the particular issues raised. ‘In essence it is contrary to principle to impose a director on a company. It is highly impractical so to do in any event where there are disputes between the directors or indeed, as here, allegations of improper conduct. Accordingly, the court would have to be extraordinarily cautious before imposing a director on a company by way of an interim remedy, but as I have said it is not necessary to decide that point.’ (i) A usual interim order is to preserve the status quo. The Order granted is not just the removal of a director. It changes the operation and control of the company. Whilst not the ultimate final relief, it takes the parties some of the way down the line to a buyout which would be the final result of the petition. (ii) The starting point of a section 994 petition is to consider the parties' conduct against the contractual arrangements: see O'Neill v Phillips

[1999] UKHL 24

[1999] 1 WLR 1092

. The contractual arrangements of these parties were that Mr Crisp would operate the business without undue interference from Mr Garofalo. This was being turned on its head by the order. (iii) The dispute resolution procedure contained a timetable for the steps to be taken including the parties communicating for at least 6 hours over the course of 12 days. That might militate against without notice relief. (iv) The order was doing this at the behest of another minority shareholder and was potentially against the wishes of the majority of the shareholders of the Company, particularly bearing in mind the minority shareholders who were members of Mr Crisp's wider family. (v) A very common reason for an unfair prejudice petition is that the majority is excluding the minority from management of the company. The removal of a director by court order might be the court itself imposing an order amounting to unfair prejudice. (vi) There could have been simply an injunction to prevent any further dealings with Russia and provision of detailed information in respect of such trading.

This case

[39]In my judgment, the relief sought in the present case, amounting in substance to a “change of management” order, is a case of such a kind that there should be an enhanced threshold to get over for the applicant to obtain the order which he seeks at this stage. It is likely to have the consequence of creating a greater risk of injustice if it is wrongly granted rather than wrongly withheld at the interlocutory stage. Thus, in the present case, there is a need for a high degree of assurance that the petitioner will succeed. Indeed, both parties agreed that this was so, at least in relation to the change of management elements of the order sought.

[40]That need is fortified by the fact that, having heard from the petitioner in person, I find that he has a number of peculiar ideas about corporate structure and governance which, in my judgment, make him unsuitable by himself to be left to run a company of which he is not the sole owner. These include(i) his misunderstanding of the role of the online files at Companies House,

(ii) his failure to understand the difference between a company and its members,

(iii) his failure to understand that a shareholding in one company does not imply any beneficial interest in a second company in which the first company has shares,

(iv) his failure to understand that the company owns its assets rather than the members, and

(v) his extraordinary approach to making transfers of the company’s property to himself in satisfaction of a claim against it.

[41]However, the requirement of a high degree of assurance does not apply to that part of the relief sought which would merely impose an injunction on the first respondent to restrain him from dealing with the company’s agricultural land. That is an ordinary negative injunction to preserve the status quo, and the establishment of a serious issue to be tried is sufficient. Discussion Standing

Discussion

[42]I assess the position as follows. On the allegations put forward here, the only way that the petitioner can have standing to present this petition is under section 994(2), on the basis that ENR’s shares have been transferred to him, and the completed stock transfer has been lodged with the company, but has not yet been registered. The petitioner says that that is what has in fact happened. The first respondent says on the other hand that it has not. I cannot resolve that factual dispute on this application. On this point I accept that there is a serious issue to be tried. But the petitioner needs to go further than this on this application, because he seeks such an intrusive interim order, with a heightened risk of injustice if wrongly granted.

[43]The petitioner told me in oral submissions that he thought he had posted it to the company. But, although I have seen copy documents apparently amounting to a completed transfer form, there is no documentary evidence of their being sent to or lodged with the company, such as a posting receipt or a photocopy of the envelope addressed to the company. Moreover, and as I have already said, the allegation made in the petition is different. It is that the first respondent removed the online authentication codes that would have enabled the petitioner to change the entries in the online register kept at Companies House. But that is not what is required here. The petitioner will need at trial to show that the completed stock transfer form was lodged with the company. I do not have a high degree of assurance that the petitioner will succeed at trial on this point. Consequently, I cannot grant interim relief at all, as the petitioner has no sufficient prospects of succeeding in showing standing to present this petition.

Merits

[44]In case I am wrong about standing, however, I go on to say the following. As to the merits of the complaints made by the petitioner, they are all denied by the first respondent, and I cannot resolve them now. Nevertheless, I note that there are allegations against the accounting firm Pearson May under heads (2), (4), (7) and (8) set out above. However, Pearson May are not parties to the petition, and their conduct cannot without more amount to conduct unfairly prejudicial to the petitioner’s interests within section 994.

[45]The events complained of under heads(1) and

(2) are alleged to have taken place nine years or more ago, and those under head

(3) seven or more years ago. No convincing explanation for the delay in making those heads of claim has been put forward. Whilst there is no limitation period for unfair prejudice petitions, “the court in addressing an application under section 994 of the CA 2006 may take account of unjustified delay by the claimant which has an adverse effect on a respondent or other persons when exercising its discretion to grant or refuse a particular remedy or any remedy”: Zedra Trust (Jersey) Ltd v THG plc

[2026] 2 WLR 479

, [170], SC. On the face of it, there is considerable unjustified delay here.

[46]The first respondent at the hearing also submitted that at least some of the alleged conduct unfairly prejudicial could not be described as conduct of the company’s affairs, and so not within the scope of section 994 at all. However, at this stage I do not think that I am in a sufficiently clear position to make a decision about that. It will have to await a more suitable occasion.

[47]Standing back, I ask myself whether withholding a mandatory interlocutory injunction (such as is sought at paragraphs (1), (3) and (4) of the relief sought in this case) would in fact carry a greater risk of injustice than granting it. In my judgment, it would not. The petitioner’s complaints are not strong or compelling, and for the reasons already given I am not prepared to entrust the fortunes of this company to the petitioner alone, even temporarily. Moreover, the appointment of independent accountants to review the company’s accounts (paragraph (4)) is not necessary in order to hold the ring pending the trial of the petition.

[48]That means that the only relief that could be granted at this stage (assuming a sufficiently good argument on standing) would be (2), an injunction to restrain the first respondent from dealing with the company’s land. However, on the evidence before me, I do not see any appreciable risk that the first respondent will seek to sell the company’s land other than in pursuance of the originally agreed strategy and in the company’s best interests. So, even if I considered that the petitioner had a good enough argument on standing, I would not grant any of the relief sought.

Conclusion

[49]The application is accordingly dismissed. I invite the parties to agree a draft minute of order for my approval. This should include directions to take the petition forward to trial.