Joanne Brierley v Christopher Howe & Anor (Re 36 Bourne Street Ltd)
[2024] EWHC 2789 (Ch)
Mark Lane & Anor v Pamela Lane
21 October 2024
[2024] EWHC 2616 (Ch)
High Court
A family fought over shares in their construction company. The son won the shares because the court believed there was a verbal agreement between family members. The mother’s claim of unfair treatment was dismissed because she knew about and approved the company's financial decisions. The case shows how important it is to have written agreements, even with family, when dealing with business matters.
Key Facts
- •Family dispute concerning the affairs of AGM Brickwork & Stonework Limited.
- •Disputed shares (40 shares) held by Alan Lane (deceased) after his death in 2009.
- •Mark Lane (son) claims entitlement to the disputed shares based on an alleged oral agreement, proprietary estoppel, and constructive trust.
- •Pamela Lane (mother) denies the agreement and claims entitlement as per AGM's articles of association.
- •Pamela Lane also filed a petition alleging unfair prejudice due to Mark and Suzanne Lane's (Mark's wife) management of AGM's finances and non-payment of dividends.
- •AGM used a Remuneration Trust for tax purposes, which resulted in no dividends being paid except in 2018.
- •Central dispute hinges on the existence of an oral agreement concerning the disputed shares at a meeting in September 2003.
- •Lack of contemporaneous documentation made oral testimony crucial.
- •Significant falling out within the Lane family in 2017.
Legal Principles
Unfair prejudice petitions under section 994 of the Companies Act 2006.
Companies Act 2006
Directors' duties under sections 170-175 of the Companies Act 2006.
Companies Act 2006
Proprietary estoppel.
Snell’s Equity (34th edition)
Contract law principles, including consideration and intention to create legal relations.
Case law discussion
Limitation periods in unfair prejudice petitions (Companies Act 2006) as per THG Plc v Zedra Trust Company.
THG Plc v Zedra Trust Company (Jersey) Limited [2024] EWCA Civ 158
Duomatic principle: unanimous shareholder assent is as binding as a formal resolution.
In re Duomatic Ltd [1969] 2 Ch 365
Outcomes
Claim for disputed shares succeeds.
The court found that an oral agreement existed concerning the disputed shares, making Pamela obligated to transfer them to Mark.
Unfair prejudice petition fails.
The court found that Pamela agreed to the Remuneration Trust and understood its implications, and that the allegations regarding loans to the company were not substantiated.