Paul Lorimer-Wing v Idrees Hashmi
[2024] EWHC 931 (Ch)
Lee Jon Booth v Lloyd Edward Hinton (as Liquidator of Active Ticketing Limited)
22 July 2024
[2024] EWHC 1886 (Ch)
High Court
A businessman's appeal to avoid paying for company shares was initially dismissed because he was late filing documents. The delay was partly due to a problem with the court's recording system. A higher court decided it was unfair to dismiss the appeal, allowing the businessman to argue his case that he was never supposed to pay in cash.
Key Facts
- •Lee Jon Booth (Appellant) appealed a decision by ICCJ Prentis ordering him to pay £100,000 for unpaid shares in Active Ticketing Limited.
- •The shares were initially to be paid for by offsetting services rendered by Mr. Booth.
- •Rajah J struck out Mr. Booth's appeal due to delays in providing a transcript of ICCJ Prentis's judgment, largely due to a poor-quality court recording.
- •Mr. Booth argued that the agreement was for a debt/equity swap, not a cash payment.
- •The appeal was struck out due to non-compliance with court orders, but Mr. Booth argued that this was due to circumstances beyond his control.
Legal Principles
Section 150 IA 1986 and/or Insolvency Rule 7.91(1) allows for proceedings against a shareholder for unpaid shares.
Insolvency Act 1986 and Insolvency Rules
An agreement not to claim a debt can amount to consideration.
Chitty on Contracts, 35th Edn. para. 6-048
Outcomes
Rajah J's order striking out the appeal was set aside.
The judge considered that the justice of the case demanded it, given the circumstances surrounding the delay in obtaining the transcript, and the real prospect of success on appeal.
Permission to appeal was granted.
The appeal has a real prospect of success because the lower court may have wrongly concluded that cash payment was required despite an agreement for a debt/equity swap. The judge noted there was an arguable point as to whether the relevant work had been done and the charges accrued.