Key Facts
- •The Fitzpatrick Trustees (Claimants) sought declarations regarding the validity of a 2014 share transfer in Pedham Place Golf Centre Limited (the Company) from the Nisma Settlement (Camelot Trust Corporation Limited, trustee) to the Fitzpatrick Family Discretionary Settlement (FFDS).
- •Mr Crocker (First Defendant) disputed the transfer's validity, alleging fraud and breach of contract (2010 Shareholders' Agreement – 2010 SHA and 2010 Articles of Association).
- •The central disputes involved whether Mr Fitzpatrick fraudulently misrepresented the Nisma Settlement's nature (his offshore trust) to procure Crocker's consent and whether the 2010 SHA remained binding after the share transfer.
- •The 2010 SHA contained provisions for termination upon share transfer and required written consent for assignments of rights.
- •The 2010 Articles of Association included pre-emption rights for share transfers, with exceptions for transfers within family trusts and those approved by majority shareholders.
Legal Principles
Promissory estoppel
Spencer Bower, Reliance-Based Estoppel, 5th Ed, at para 1.18
Novation
Musst Holdings v Astra Asset Management UK Ltd [2023] EWCA Civ 128
Fraudulent misrepresentation
Ludsin Overseas Limited v Eco3 Capital Limited [2012] EWCA Civ 413
Contractual interpretation (objective observer)
Various case law cited in sections 312, 318-321
Drawing adverse inferences from missing witnesses
Efobi v Royal Mail Group Ltd [2021] 1 WLR 3863
Unreliability of memory over time
Gestmin SGPS S.A. v Credit Suisse Limited [2013] EWHC 3560 (Comm)
Outcomes
The 2014 share transfer was valid and effective.
The judge found that Mr Crocker had consented to the transfer, either expressly or by conduct (signing share certificates and acquiescing in registration). The claim of fraudulent misrepresentation was rejected due to insufficient evidence.
The 2010 SHA is binding between Mr Crocker and the Fitzpatrick Trustees.
The judge found a novation had occurred, creating a new contract between Mr Crocker and the Fitzpatrick Trustees on the terms of the 2010 SHA. The judge determined that the 'no assignment' clause in the 2010 SHA did not prevent the novation, and even if it did, Crocker was estopped or had waived his rights.
Crocker's counterclaim and Part 20 claims were dismissed.
These claims were inconsistent with the findings of a valid share transfer and a binding novated 2010 SHA.