Allan Attwood (Petitioner) v 1. Geoffrey Maidment and Others
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Hodge |
| Judgment Date | 22 September 2011 |
| Neutral Citation | [2011] EWHC 3180 (Ch) |
| Date | 22 September 2011 |
| Court | Chancery Division |
| Docket Number | Claim No: 11578 of 2008 |
[2011] EWHC 3180 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
Royal Courts of Justice
Strand,
London WC2A 2LL
His Honour Judge Hodge QC
Sitting as a Judge of the High Court
Claim No: 11578 of 2008
20858 of 2009
In the Matter of Annacott Holdings Limited
In the Matter of Tobian Properties Limited
Mr Andrew Clutterbuck (instructed by Stockler Brunton) appeared on behalf of Mr Attwood, Ms Heard and Tobian Properties Limited
Mr Thomas Grant and Mr James Sheehan (instructed by Macfarlanes LLP) appeared on behalf of Mr Maidment, Ms Maidment and Annacott Holdings Limited
Thursday, 22 September, 2011
His Honour Judge Hodge QC:
This is my extemporary judgment in the matter of two petitions for unfair prejudice presented under s.994 (contained within Part 30) of the Companies Act 2006: petitions number 11578 of 2008 and 20858 of 2009. This extemporary judgment is a sequel to, and should be read in conjunction with, the judgment I delivered at the end of the 12-day trial of these petitions on Friday 29 July 2011. The neutral citation number of the approved transcript of that judgment is [2011] EWHC 2186 (Ch). At the end of that trial (at which I had heard oral evidence) I ordered that there should be judgment for Mr Attwood (the sole petitioner on the petition in relation to Annacott Holdings Limited); and I ordered that the petition presented by Mr Maidment (the first respondent to the Annacott petition) in relation to Tobian Properties Limited should be dismissed. By paragraph 3 of my order, I directed that the issue of what relief Mr Attwood might be entitled to on the Annacott petition should be adjourned to a further hearing, to be fixed. By paragraph 4 of my order I also directed that all issues regarding costs should be adjourned to a further hearing, to be fixed. This is the further hearing envisaged by paragraphs 3 and 4 of my order of 29 July.
In addition, there are two application notices before this court. The first is an application notice issued by Mr Attwood on 7 September 2011 seeking an interim payment of £1 million in respect of the buy-out order which he envisages is to be made in relation to his 50% shareholding in Annacott. That application is expressed to be made under either s.996 of the Companies Act 2006, or CPR 25.7(1)(c). The second application notice is one issued by Mr Maidment on 16 September 2011 seeking directions as to expert evidence from property and share valuation experts in relation to the quantification of the amount to be paid for Mr Attwood's 50% shareholding in Annacott.
The evidence in support of those two applications is contained in the following witness statements: Mr Attwood's third witness statement of 7 September, together with exhibits AA1–4; the seventh witness statement of Mr Geoffrey Maidment of 14 September 2011, together with exhibit GM7; the fourth witness statement of Mr Attwood dated 16 September 2011, together with exhibit AA5; and the seventh and eighth witness statements of Mr Iain Halliwell Mackie, a partner in the firm of Macfarlanes, Mr Maidment's solicitors, respectively dated 16 and 19 September, together with exhibit IHM8. That evidence, together with my order of 29 July and the approved transcript of my judgment delivered orally on that day, is contained within a supplemental bundle prepared for the purposes of this hearing. That bundle also contains certain inter partes correspondence, and an email exchange between counsel and me. I have had the benefit of being able to pre-read in its entirety the contents of that supplemental bundle. Prior to this hearing I had also received written skeleton submissions from counsel for the parties, both dated 20 September, from Mr Andrew Clutterbuck of counsel (who appears for Mr Attwood), and from Mr Thomas Grant of counsel leading Mr James Sheehan (who appear for Mr Maidment).
In this extemporary judgment, since it is now approximately 3.50 on the afternoon of the one day set aside for this further hearing, I do not propose to rehearse in detail the written submissions. The documents themselves contain a sufficient record of those submissions. I emphasise that I have borne all that is written within them in mind. I have also borne in mind the oral submissions presented to the court during the course of this morning. Mr Clutterbuck addressed me for about an hour and ten minutes. Mr Grant then responded for about 20 minutes before the short adjournment and for an hour and a quarter after lunch. I then indicated my provisional views with a view to curtailing the need for Mr Clutterbuck to respond on all matters addressed by Mr Grant orally before me. In the event, Mr Clutterbuck found it necessary to respond on only one point, namely my provisional view as to the appropriate date for valuation purposes in connection with the share buy-out order. I have borne those additional submissions, directed to what he considered might have been a misapprehension as to the facts on my part, in mind.
In this extemporary judgment I propose to consider, first of all, the relief to be granted on the Annacott petition. I then propose to consider the question whether there is jurisdiction to order an interim payment on the hearing of a s.994 petition in advance of the making of any share buy-out order, and, if so, whether it is appropriate to order such an interim payment, and, if so, in what amount. I will then address the issue of directions and further expert evidence. Finally, I will address the issue of the incidence of costs and the basis for their assessment, both in relation to Mr Maidment, and also in relation to his sister, Miss Sarah Jane Maidment (who was the second respondent to the Annacott petition because she holds one, out of a total of 5,000, issued shares in that company).
Issues of relief.
It is not in dispute that there should be a share buy-out order, pursuant to which Mr Maidment will be required to purchase Mr Attwood's 50 percent shareholding in Annacott. The issue between the parties is as to the basis upon which that share buy-out order should proceed. On that issue, Mr Attwood's submissions are to be found at paragraphs 3–33 of Mr Clutterbuck's written submissions. Mr Maidment's submissions are to be found at paragraphs 7–32 of Mr Grant's written skeleton submissions.
In paragraph 194 of my substantive judgment, having found that Annacott's affairs had been conducted in a manner unfairly prejudicial to Mr Attwood, and that he was entitled to relief on his petition, I indicated my provisional view to be that the simplest and most proportionate approach to relief might be to order a buy-out by Mr Maidment of Mr Attwood's 50 percent shareholding on the basis of a valuation of Annacott on a particular date pre-dating the property transfers and/or on particular valuation assumptions to be specified; although I indicated that I would hear further submissions as to that.
Mr Grant, for Mr Maidment, accepts that a buy-out order would be the appropriate and proportionate form of relief, and that the court should give a direction to that effect. He further supports my preliminary indication that the appropriate valuation date for a buy-out order should be a particular date pre-dating the transfer of the properties. Since the first property was transferred to Mr Maidment in October 2005, he suggests that that would be the most appropriate date. Indeed, he goes on to submit that no other valuation date would provide a workable, or fair, basis on which to proceed. In support of that submission, he refers me to the decision of the Court of Appeal in the case of Profinance Trust SA v Gladstone [2001] EWCA Civ 1031, reported at [2002] 1 WLR 1024. I was taken to that case. In particular, I was taken to the conclusion of Robert Walker LJ, delivering the judgment of the Court of Appeal, at paragraphs 60 and 61.
Mr Clutterbuck submits that the aim of any order made on the hearing of Mr Attwood's unfair prejudice position should be to compensate Mr Attwood for the unfair prejudice that the court has found that he has suffered. He submits that, had it not been for Mr Maidment's unfairly prejudicial actions, Mr Attwood would now be the 50 percent owner of an investment company, owning 46 London residential properties with considerable equity, and one which would have enjoyed several years of low interest rates on its borrowings and thereby would have almost certainly made profits out of its rent roll. Moreover, he says that Annacott would not have suffered from Mr Maidment's misappropriation of company monies. He submits that the relief should fairly compensate Mr Attwood for what has occurred, although he acknowledges that that should be tempered by consideration of the overriding objective, including the costs and time which may be involved in working out, and effecting, appropriate relief. Acknowledging the terms of paragraph 194 of my judgment, Mr Clutterbuck submits that Mr Attwood's concern with the historic valuation approach is that it may, depending on the adjustments to be made, fail to recognise the significant capital appreciation in Annacott's property portfolio, resulting from the price increases in the London property market since the transfers of properties formerly comprised within Annacott's portfolio began to be made to Mr Maidment, at his...
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