Appeal From The Sheriffdom Of Grampian Highland And Islands At Aberdeen For Peter Li V. Holois Limited
| Jurisdiction | Scotland |
| Judge | Lord Carloway,Lady Paton,Lord Hardie |
| Date | 20 November 2009 |
| Docket Number | XA97/08 |
| Court | Court of Session |
| Published date | 20 November 2009 |
| EXTRA DIVISION, INNER HOUSE, COURT OF SESSION | |
| Lady Paton Lord Carloway Lord Hardie | [2009] CSIH NO.87 XA97/08 OPINION OF THE COURT delivered by LORD CARLOWAY In Appeal from the Sheriffdom of Grampian, Highland and Islands at Aberdeen in the petition PETER LI, Petitioner and Respondent; against HOLOUIS LTD and NELSON CHENG, First and Second Respondents; and FLOORGLASS LTD., Third Respondents and Appellants: ________________ |
Third Respondents and Appellants: Bowen; Bell & Scott LLP
(party not participating in the Appeal, First and Second Respondents)
20 November 2009
1. Pleadings
[1] The petitioner presented a summary application, in the form of a petition, to the Sheriff Court at Aberdeen, craving a declarator that the affairs of the first respondents had been conducted in a manner unfairly prejudicial to his interests, in respect that the first respondents had transferred their entire goodwill and business to the third respondents without consideration. The crave proceeds under section 994 of the Companies Act 2006. The petitioner also craved interdicts against the respondents from disposing of the first respondents' property, including their interest in a lease of premises at Unit 8, The Academy, Belmont Street, Aberdeen. By way of amendment, he also sought "decree of production and reduction" of: (a) a purported assignation of the lease by the first respondents to the third respondents dated 30 September 2007; and (b) a purported agreement for the sale of the business of the first respondents to the third respondents comprising an offer and acceptance dated 18 September 2007. There was also a crave for interim suspension of the assignation.
[2] The petitioner's averments were met largely with bald denials by the third respondents, who alone entered the process. The petitioner averred that he held 961 of the first respondents' 1300 issued share capital. The second respondent held 239 shares, with the balance of 100 being in the name of an individual thought to be deceased. The sole business of the first respondents was a restaurant at the Belmont Street premises, of which they had a lease dated October 2001. Since about that time, the second respondent had been a director of the first respondents. But the petitioner was given control of the day to day management of the business and he established a local manager there. However, during 2007, the relationship between the petitioner and the second respondent deteriorated. While the petitioner was on holiday in August 2007, the second respondent assumed de facto control of the restaurant, changed the locks, and replaced the manager with one of his own choosing, namely a Mr Ho. He began trading from the premises under the name of the third respondents. The petitioner was refused access to the restaurant by the second respondent and Mr Ho..
[3] On 28 August 2007, Mr Ho was appointed as the first respondents' secretary. On 10 September 2007 he was replaced by a firm of solicitors, namely Messrs Cohen & Co. The first respondents' registered office was changed to the address of the solicitors. Meantime, on 1 August, the third respondents had been incorporated. On 7 September, they too changed their office to the solicitors' address. On that date also, Mr Ho was appointed a director of the third respondents. The second respondent's wife was appointed secretary. Not surprisingly, it was averred that the second respondent controlled the third respondents.
[4] Having raised the summary application, the petitioner received a copy of an assignation of the lease from the first to the third respondents dated 30 September 2007. This had been executed by the second respondent and Mr Ho. No consideration was involved. The petitioner averred that the second respondent had effectively engineered the transfer of the whole business assets of the first respondents to the third respondents without any consideration. An earlier agreement, consisting of an offer and acceptance dated 18 September, purporting to sell the assets for £8,000 also existed, but no money had been paid.
[5] The petitioner pled, inter alia, that the third respondents' averments were irrelevant and that decree de plano should be granted (first plea-in-law). He also pled (second plea), strangely, that the third respondents' averments (which are virtually non existent) should not be admitted to probation. The third respondents pled that: (first) the remedies sought by the petitioner against them under section 994 were incompetent; (second) the petitioner's averments were irrelevant and should not be remitted to probation (sic); (third) the crave for reduction was incompetent; and (fourth) the averments were unfounded in fact and absolvitor should follow.
[6] After sundry procedure, on 19 March 2008, the Sheriff appointed the parties "to be heard on the issues of competency" at a diet of debate. On 1 April 2008, the Sheriff also allowed the petitioner's first two pleas-in-law to be debated at the same diet, although, somewhat confusingly, the interlocutor in the appeal print refers to the Sheriff allowing the pleas to be "deleted". At all events, the cause came before the Sheriff for debate on 7 April 2008. As the Sheriff correctly noted, the effect of the interlocutors was that the debate was on the petitioner's first and second pleas-in-law and the third respondents' first to third pleas-in-law.
2. The Sheriff's Interlocutor and Note
[7] On 30 April 2008, the Sheriff repelled the third respondents' first, second and third pleas-in-law. She sustained the first to fourth pleas-in-law for the petitioner and granted the declarator and interdicts sought. She also granted "decree for...
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