Giannis Ntzegkoutanis v Georgios Kimonis & Ors
[2023] EWCA Civ 1480
Paul Lorimer-Wing v Idrees Hashmi
23 April 2024
[2024] EWHC 931 (Ch)
High Court
A shareholder sued another shareholder for unfair treatment. The judge ruled against the accused shareholder and ordered them to buy out the other's shares, also ordering the accused to pay the legal costs of the first part of the case. The accused appealed. The appeal court agreed with the judge's decision on unfair treatment but rejected the appeal on the costs issue, saying the judge acted fairly in ordering the costs to be paid.
Key Facts
- •Paul Lorimer-Wing (Appellant) appealed against orders made by Chief ICC Judge Briggs concerning a Section 994 Companies Act 2006 unfair prejudice petition brought by Idrees Hashmi (Respondent).
- •The petition alleged unfair prejudice due to Lorimer-Wing's unlawful removal of Hashmi as a director and exclusion from company information.
- •Judge Briggs found unfair prejudice, ordering Lorimer-Wing to buy out Hashmi's shares.
- •Lorimer-Wing appealed, arguing various points including that a prior offer to purchase Hashmi's shares was reasonable, negating unfair prejudice, and that the costs order was inappropriate.
- •The appeal also challenged the costs order requiring Lorimer-Wing to pay Hashmi's costs of the liability trial.
Legal Principles
Test for permission to appeal: CPR 52.6 - real prospect of success or other compelling reason.
CPR 52.6
Appellate courts should not interfere with trial judges' findings of fact unless compelled to do so.
Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5, at [114]
In unfair prejudice petitions, exclusion of a minority shareholder without a reasonable offer to buy their shares is unfair.
O’Neill v Phillips [1999] 1 WLR 1092
Costs generally follow the event, but the court may make a different order (CPR 44.2).
CPR 44.2
In split trials, costs of the first stage may be awarded to the successful party even if the final outcome remains uncertain, considering factors like the merits of the case and potential offers of settlement.
Langer v McKeown [2021] EWHC 451 (Ch), [2022] 1 WLR 1255
Part 36 offers have specific cost consequences; other offers are considered at the judge's discretion; asymmetry of information (e.g. minority shareholder lacking company financial information) can affect how an offer impacts costs decisions.
Langer v McKeown (Court of Appeal)
Outcomes
Permission to appeal refused on all grounds except the costs appeal.
The appellant's arguments lacked a real prospect of success; many challenged factual findings of the trial judge, which are difficult to overturn on appeal. The arguments relating to the offer to buy shares failed because the offer wasn't pleaded and did not meet the criteria of a 'reasonable offer' in O'Neill v Phillips.
Costs appeal dismissed.
While the Judge's decision to award costs to the Respondent at the liability stage, before valuation of the shares, was arguable, the Judge acted within their discretion. The Judge considered the prior offer but found the Respondent's substantial victory at the liability trial outweighed the potential impact of the offer on ultimate share valuation.