Yiannakis Chambi (also known as John Chambi) v Aristos Aristodemou (also known as Ari Aristodemou) & Anor
[2024] EWHC 1610 (Ch)
Earl August Krause & Ors v Tellisford UK Limited & Ors
29 August 2023
[2023] EWHC 2143 (Ch)
High Court
Two families argued over who owned some company shares. A dodgy board meeting tried to give all the shares to one family, but the judge said that wasn't fair. The judge gave half the shares to the other family because they had properly bought them. A separate agreement was also debated, but the judge wouldn't deal with that because the involved parties didn't ask him to.
Key Facts
- •Claimants sought a declaration of equitable interest and registration as holders of 50% of 32,117 shares in Tellisford UK Limited.
- •The Claimants are trustees of Mr. Krause's family trust, and the defendants include Tellisford UK Limited, Warthog Investments Limited (representing Mr. Verhoef), and Mr. Maughan.
- •The disputed shares were initially acquired by Mr. Maughan, and a purported agreement existed for their sale, half to Mr. Krause and half to Mr. Verhoef.
- •Mr. Krause claimed to have purchased half of the disputed shares from Mr. Maughan, but the register was later amended to show Warthog as the holder of all disputed shares.
- •Warthog's defense relied on the alleged invalidity of the board meeting that registered the transfer, and on arguments of estoppel and bona fide purchase.
- •Mr. Maughan did not file a defence and appeared in person.
Legal Principles
A company must keep a register of members.
Section 113, Companies Act 2006
Directors' power to manage the company's business, including registering share transfers, and the quorum requirement.
Table A, Companies (Table A to F) Regulations 1985, and company articles
Directors' duty to consider the equitable rights of others when registering share transfers.
Société Générale de Paris v Walker (1884) 14 Q.B.D. 424 (CA)
Legal title to shares is generally acquired upon registration in the company's register.
Ireland v Hart [1902] 522; Société Générale de Paris v Walker (1884) 14 Q.B.D. 424 (CA)
The court can draw adverse inferences from the absence of evidence.
Royal Mail Group Ltd v Efobi [2021] UKSC 33
The court may grant declaratory relief even if the rights or obligations are not vested in either party to the proceedings, considering the parties’ legitimate interest, practical purpose, and prejudice to non-parties.
Milebush Properties Limited v Tameside Metropolitan Borough Council [2011] EWCA Civ 270
Outcomes
The register amendment showing Warthog as the holder of all disputed shares was invalid.
The board meeting lacked a quorum, and there was no provision in the articles reducing the quorum in such circumstances.
Mr. Krause/the Trustees acquired an equitable interest in 50% of the Disputed Shares.
Mr. Krause paid for half the shares from Mr. Maughan in March 2020, and no prior binding agreement existed between Mr. Verhoef and Mr. Maughan for the entirety of the shares.
The Erutuf Trustees are entitled to 16,058 shares, with Mr. Maughan holding one share on trust for them.
This reflects the agreement between Mr. Krause and Mr. Maughan, dealing with the practicalities of an odd number of shares.
The court declined to declare the sale agreement between Mr. Maughan and Mr. Verhoef void for mistake.
Although Mr. Verhoef likely knew of Mr. Maughan's mistake, Mr. Maughan, a party to the proceedings, did not seek such a declaration.
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