Key Facts
- •James Haggart (Claimant 1) was the sole director and shareholder of Iktomi Events Limited (the Company).
- •The Burgess family (Defendants) claimed an agreement existed to restructure the Company's shareholding (80% to them, 20% to Haggart) and directorships.
- •On 14 August 2021, without Haggart's explicit consent, the Burgess family filed forms with Companies House appointing two of their members as directors and allotting shares accordingly.
- •Haggart claimed he never agreed to these changes and only learned of them in February 2022.
- •The Company's articles of association allowed a sole director to make decisions without a formal meeting.
- •The case centered on whether Haggart implicitly agreed to the changes (Re Duomatic principle) or if the appointments were invalid.
Legal Principles
Re Duomatic principle: Unanimous consent of shareholders can validate actions without formal procedures if it's equitable to assume consent.
Re Duomatic [1969] 2 Ch 365, EIC Services v Phipps [2003] 1 WLR 2360
Companies Act 2006, section 1096: Registrar must remove invalid or inaccurate material from the register.
Companies Act 2006
Companies Act 2006, section 125: Allows court rectification of a company's register of members if there's insufficient cause for an entry or omission.
Companies Act 2006
Companies (Model Articles) Regulations 2008: Model articles govern director decision-making, including a sole director's authority.
Companies (Model Articles) Regulations 2008
Outcomes
The court declared the appointments of the Burgess family members as directors invalid and ineffective.
Haggart, as sole director, hadn't made a decision or given informed consent to the changes before they were filed. The Duomatic principle didn't apply due to lack of awareness and the changes being contrary to his financial interests.
The court declared Haggart the sole shareholder of the Company.
The filings were invalid, leaving the pre-existing shareholding unchanged.
The court ordered the Registrar of Companies to remove the incorrect filings.
The filings were declared invalid under section 1096 of the Companies Act 2006.
The court ordered rectification of the Company's register of members to remove the Burgess family.
Their names were incorrectly entered due to the invalid share allocation under section 125 of the Companies Act 2006.