Allan Attwood (Petitioner) v Geoffrey Maidment and Others
| Jurisdiction | England & Wales |
| Judge | Judge Hodge |
| Judgment Date | 23 May 2012 |
| Neutral Citation | [2012] EWHC 1662 (Ch) |
| Docket Number | No. 11578 of 2008 |
| Date | 23 May 2012 |
| Court | Chancery Division |
[2012] EWHC 1662 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
The Rolls Building
Fetter Lane
London EC4A 1NL
His Honour Judge Hodge QC
sitting as a Judge of the High Court
No. 11578 of 2008
In the Matter of Annacott Holdings Limited
And in the Matter of the Companies Act 2006
Mr. Andrew Clutterbuck (instructed by Stockler Brunton) appeared on behalf of the Petitioner.
Mr. Thomas Grant and Mr. James Sheehan (instructed by Macfarlanes LLP) appeared on behalf of the Respondents.
Judge Hodge QC:
This is my third judgment relating to the affairs of Annacott Holdings Limited, petition number 11578 of 2008. It is divided into seven chapters as follows: (1) Introduction. (2) The Hearing. (3) The Mortgage Borrowings. (4) The Valuation of the Properties. (5) The Valuation of the Shares. (6) Quasi-Interest. (7) Conclusion. I should, however, make it clear that the content of each separate chapter has informed the judgment as a whole.
CHAPTER 1 — INTRODUCTION
This judgment should be read in conjunction with, and as a sequel to, my two previous judgments on the petition. In my first extemporary judgment, delivered at the end of a 12-day trial on Friday 29 th July 2011 and bearing the neutral citation reference [2011] EWHC 2186 (Ch), I upheld the claims of the petitioner, Mr. Attwood. He holds 2,500 of the 5,000 issued shares in Annacott Holdings Limited. I upheld his claim that the affairs of that company had been conducted in a manner that was unfairly prejudicial to his interests. The effective respondent to the petition was, and is, Mr. Geoffrey Maidment, who is the company's sole director and holds 2499 of its shares, with the remaining one issued share being held by Mr. Maidment's sister, Miss Sarah Maidment, who is the other individual (and nominal) respondent to the petition.
Following a further hearing on 22 nd September 2011 I delivered a second extemporary judgment which bears the neutral citation reference [2011] EWHC 3180 (Ch) in which, amongst other matters, I determined the issue of the relief to which Mr. Attwood should be entitled following the successful outcome of his petition.
By paragraph 1 of my order last September I declared that Mr. Attwood was entitled, by way of relief on the Annacott petition, (i) to have his 2,500 shares in Annacott Holdings Limited (the company) purchased by Mr. Maidment at a price calculated on the basis of the valuation of those shares as at 1 st October 2005, with no discount applied to reflect Mr. Maidment's position as sole director of the company and the lack of control of the company afforded by the fact that Mr. Attwood's shares are a 50 per cent shareholding; (ii) to be paid by Mr. Maidment a sum of money calculated as if it were interest on the purchase price since 1 st October 2005 (therein and hereinafter referred to as "the quasi-interest"). Paragraph 2 of my order directed that there should be a further hearing to determine, first, a purchase price, and, secondly, the rate at which, and the basis upon which, the quasi-interest was to be calculated, and its amount. On 7 th February 2012 the Court of Appeal (comprising Arden and Moses LJJ) dismissed an application by Mr. Maidment to appeal my substantive decision on the hearing of the unfair prejudice petition, with costs.
CHAPTER 2 – THE HEARING
This is the hearing directed by paragraph 2 of my order of 22 nd September 2011. At this hearing, Mr. Attwood has been represented (as he was at both hearings last year) by Mr. Andrew Clutterbuck of counsel. Mr. Maidment has been represented (as he too was last year) by Mr. Thomas Grant of counsel, leading Mr. James Sheehan of counsel. In paragraph 3 of my September judgment, I had given various directions for the purposes of the instant hearing, including (i) provision for each party to call the expert evidence of one surveyor on the issue of property valuation; (ii) for an accountant to give evidence on the issue of the valuation of Mr. Attwood's shares as a single joint expert; and (iii) for the parties to file and exchange witness evidence of fact relating to the issue of quasi-interest. Those directions were supplemented by further directions I made, first, in an email dated 28 th February 2012, and, secondly, by an order (made on the court's own initiative and without a hearing) on 12 th March 2012.
The hearing was listed for three days in London, beginning on Monday 14 th and ending on Wednesday 16 th May. In the event, even though the court sat early on two mornings on those days, the evidence and submissions were not concluded until about 4.25 on the afternoon of the fourth day, Thursday 17 th May. Even then, the oral closing submissions of counsel had to be guillotined. Prior to the hearing beginning, I had received, and read, written skeleton arguments from both parties' counsel, in each case dated 10 th May 2012. Due to pre-existing official commitments since the court rose on Thursday 17 th May, I have been unable to deliver judgment until today, the afternoon of Wednesday 23 rd May. Those commitments have also prevented me from preparing any written judgment; and this oral judgment is less polished than I would otherwise have wished.
By the time this matter came on for hearing, the documentation put before me extended to no less than nine files of papers. Witness statements had been submitted by Mr. Maidment and his sister, Sarah, in the form of a ninth witness statement from Mr. Maidment and a second witness statement from Miss Maidment, in each case dated 19 th March 2012. Mr. Maidment's witness statement addressed three issues: first, whether, at the valuation date, there still remained outstanding mortgages on three of the 46 properties which formed the company's principal assets, namely 117 Green Pond Close E17, 103A Mount Pleasant Lane E5, and 38 Grange Park Road E10, those mortgages in each case being in favour of Clydesdale Bank plc; secondly, the condition of all of the 46 properties at the valuation date; and, thirdly, the difficulties experienced in recovering possession of certain of the properties from the assured shorthold tenants. Miss Maidment's second witness statement addressed the second and third of those issues. Both witnesses gave evidence before me on the morning of the first day. Although the evidence of Mr. Maidment and his sister had not been sanctioned by the terms of my September order, Mr. Clutterbuck took no objection to the evidence being before the court, subject to cross-examination. Mr. Maidment gave evidence for about an hour and 25 minutes in total, which included a challenging cross-examination by Mr. Clutterbuck which lasted for about 45 minutes. Miss Maidment gave evidence for about 40 minutes and was subjected to a probing cross-examination by Mr. Clutterbuck.
In accordance with the terms of my September order, I also received written evidence on the issue of the appropriate rate to be awarded by way of quasi-interest. For Mr. Attwood, I received evidence in the form of a witness statement from Mr. Christopher John Waldon dated 2 nd March 2012. He is an assistant solicitor with Stockler Brunton, Mr. Attwood's solicitors. He gave evidence of the different interest rates payable on personal loans, first of sums up to £5,000, and, secondly, of sums up to £10,000. For Mr. Maidment, the evidence on the quasi-interest issue came in the form of a witness statement from Mr. Iain Mackie, a partner in the firm of Macfarlanes, Mr. Maidment's solicitors. His witness statement, also dated 2 nd March 2012, gave evidence of interest rates payable on instant access, on-line, and everyday savings accounts. Both witnesses also gave evidence of Bank of England and bank base rates over the applicable period. Neither of those two witnesses was required to attend for cross-examination.
In addition to the evidence of witnesses of fact, there was evidence from the two property valuation experts, Mr. Alastair Mason FRICS for Mr. Attwood and Mr. John Christopher Roe ICIOB, FNAEA for Mr. Maidment. Mr. Mason's initial report was dated 1 st December, and Mr. Roe's was dated 13 th December 2011. Mr. Roe then responded to written questions submitted to him on 8 th February 2012. Both experts then met and signed their first joint statement on 9 th March 2012. Following my order of 12 th March, both experts prepared supplemental written reports. In the case of Mr. Mason, his report was dated 26 th March, and Mr. Roe's was dated the following day. The experts then signed a second joint statement dated 18 th April 2012. Both property experts gave evidence before me. Mr. Mason gave evidence on the afternoon of day one, continuing until about 2.45 on the afternoon of day two; his evidence lasted for about six hours in total, of which about five and a half hours represented cross-examination by Mr. Grant. Mr. Roe gave evidence for about six hours in total, from about 2.45 on the afternoon of day two to about 3.30 on the afternoon of day three; of that about five hours comprised cross-examination by Mr. Clutterbuck.
The single joint expert on share valuation was Mr. Michael Taub; he is a chartered accountant and a forensic accounting partner in the firm of RSM Tenon. His report was dated 5 th April 2012, although he has since updated at least one of his schedules. Indeed, that schedule was further updated after I had concluded the hearing last week. He gave evidence beginning at about 3.45 on the afternoon of day three until just before 12.30 on the afternoon of day four. He was questioned first by Mr. Clutterbuck, for Mr. Attwood, for about 25...
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