Ivy Loveridge v Alldey Michael Loveridge
| Jurisdiction | England & Wales |
| Judge | Lady Justice Asplin,Lord Justice Floyd,Lord Justice Lewison |
| Judgment Date | 24 August 2020 |
| Neutral Citation | [2020] EWCA Civ 1104 |
| Date | 24 August 2020 |
| Docket Number | Case No: A3 2020 0784 |
| Court | Court of Appeal (Civil Division) |
[2020] EWCA Civ 1104
Lord Justice Lewison
Lord Justice Floyd
and
Lady Justice Asplin
Case No: A3 2020 0784
A3 2020 0827
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES IN
BIRMINGHAM
INSOLVENCY AND COMPANIES LIST (ChD)
HHJ McCahill QC sitting as a High Court Judge
Claim Nos: CR-2020-BHM-000301 and CR-2020-BHM-00019
Royal Courts of Justice
Strand, London, WC2A 2LL
Lance Ashworth QC and Dan McCourt Fritz (instructed by Messrs Thursfields) for the Appellants
David Stockill and Raghav Trivedi (instructed by Silverback Law) for the Respondent
Hearing date: 29 July 2020
Approved Judgment
The Loveridge family own and operate a very successful caravan park business in Worcestershire, Warwickshire and Shropshire. They do so in part through five companies and in part through three oral partnerships at will. The appellants, referred to for convenience of identification as “Ivy” and “Alldey”, started the business, but the next generation, including the respondent “Michael” and his brother “Audey” became involved in the business over time. Regrettably, from May 2019 onwards, irreconcilable differences have arisen within the family between Michael on the one hand and Ivy, Alldey and Audey on the other. So much so that the judge, HHJ McCahill QC, sitting in the Business and Property Courts in Birmingham, found that it was “now utterly impossible for both sides to work together for the common good of the businesses”.
This appeal arises out of interim orders made by the judge in two sets of proceedings. The first in time (“the partnership proceedings”) related to the winding up of the three partnerships. The second in time (“the company proceedings”) related to the five family companies. In the company proceedings Michael sought orders under sections 994 and 996 of the Companies Act 2006 (unfair prejudice) and for the winding up of the company on the just and equitable ground (section 122(g) of the Insolvency Act 1986). In the broadest possible outline, the judge made orders until trial in the partnership and company proceedings designed to place Michael in sole charge of all the partnerships and all the companies, and restraining any interference in the businesses of those legal entities from Ivy, Alldey and Audey.
At the conclusion of the hearing of the appeal, having risen to consider our decision, we informed the parties that (i) the appeal in the partnership proceedings would be allowed and the judge's order in those proceedings discharged, and replaced with an order which we will make (the replacement order); (ii) the discharge of the judge's order would be suspended until 24 August 2020 (or earlier if agreement can be reached on the replacement order); (iii) the replacement order would be to the effect that Alldey and Ivy should be placed in charge of the Riverside partnership, Michael should be placed in charge of the Redstone partnership and Lesa should be placed in charge of the Oversley Mill partnership. The reason for the suspension of the order was to enable the parties to agree the necessary undertakings and cross undertakings to be included in the replacement order.
We also informed the parties that the judge's order in the company proceedings would be discharged, and that our reasons for these decisions would follow in writing. My reasons for joining with my Lord and my Lady in both those decisions are set out in this judgment.
The partnerships
The three partnerships are the following:
i) Riverside. This is the first and oldest of the partnerships (and not to be confused with the company Riverside Caravan Park (Stourport) Limited (see below). Its business includes Riverside Park, and 5 other parks which are managed from the office at Riverside Park. The current partners are Ivy, Alldey and Michael. Ivy and Alldey live at Riverside's principal site (“Riverside, Bewdley”).
ii) Redstone. This is the second largest in terms of value, running the site at Redstone, Stourport on Severn. The current partners are Ivy, Alldey and Michael.
iii) Oversley Mill. This is a more modest operation, involving one site only. There is a dispute about who the partners are. Michael claims he is an equal 25% partner with Ivy, Alldey and Lesa. Ivy says it was never intended that Michael or Alldey should be partners, which was always intended to be Lesa's “own” site.
The companies
The companies are described in the introduction to the petition. They are:
i) Kingsford Caravan Park Limited (“Kingsford”). Michael, Ivy and Alldey each hold one third of the issued share capital and are its directors. Its principal business is owning and operating a caravan park near Wolverley in Worcestershire.
ii) Breton Park Residential Homes Limited (“Breton Park”). Michael and Ivy each hold 50% of the issued share capital. Ivy and Audey are its directors: Michael is not a director. Its principal business is owning and operating a caravan park near Telford in Shropshire. Ivy says that Michael's shares in Breton Park are held for the benefit of Audey.
iii) Quatford Park Homes Limited (“Quatford”). Michael and Ivy each hold 50% of the issued share capital and are its directors. The company is a holding company of two subsidiaries (with the same directors), whose businesses are the owning and operating of a caravan park near Bridgnorth in Shropshire.
iv) Riverside Caravan Park (Stourport) Limited (“Riverside, Stourport”). Michael, Ivy and Alldey each own one third of the issued share capital and are its directors. At the date of the petition it was not actively trading but owned a caravan park near Stourport in Worcestershire which was under development.
v) Bewdley Caravan Sales Limited (“Sales”). Michael, Ivy and Alldey each own one third of the issued share capital and are its directors. The principal business of Sales is trading in caravans and mobile/residential homes.
Apart from these companies, and the partnerships I have described above, individual family members own some sites of their own.
Accountants
The family have used an accountancy firm Cognitor for a number of years to manage (but not audit) the accounts of the partnerships and the companies and the tax affairs of the partners and directors. Mr Warman was, and had been for a few years, the partner responsible at Cognitor. He gave evidence in the proceedings below supporting some aspects of Michael's case. Steps were subsequently taken to call a meeting of the company to remove Cognitor as accountants of Kingsford and Sales, and to replace them with a new firm, Haines & Watts. In the result the meeting was restrained by a without-notice order made by HHJ Barker QC, and continued by the judge's order below. Such a change was effected, however, in the case of Breton Park, by a resolution of Ivy and Audey, the only directors of that company.
The role of Michael in the businesses
The role played by Michael in these businesses is the subject of hot debate. In the petition he alleges that “the efforts in building the businesses have been [Michael's] to the exclusion of his parents” and that it was his enthusiasm, energy and business acumen which is and has been the driving force in building the respective businesses. Michael says that he ran the partnerships and the companies on a day to day basis. He downplays the role of his parents and Audey. He alleges that Ivy's role was only to hold the banking mandates for most of the companies, but it was Michael who gave her directions as to what to do. He alleges, further, that Alldey did very little.
That account of matters is not accepted by Ivy and Alldey. She says that she and Alldey were responsible for the creation of the partnerships, the assets of which grew from some £9,000 in 1973 to some £0.75 million in 1990, long before Michael was involved. The success of the partnerships she contends, is due to the efforts of all members of the family. Michael did not have sole or exclusive responsibility for the day to day running of the sites.
The falling out
In May 2019, Audey encountered irreconcilable differences with his wife. Michael became involved in what the judge called a heated discussion with Audey. Michael's wife, Suehelen was concerned at developments and called the police. The act of calling the police was regarded by some in the family, particularly by Ivy, as an act which was not consistent with the family ethic of resolving matters themselves rather than involving outside agencies. The arguments between the brothers Michael and Audey, and between Michael and his mother, Ivy, got worse.
In the second half of 2019 Michael decided that he wanted to purchase a new caravan park called Weir Meadow, in Evesham, in his own name and using his own money. There is a dispute as to the manner in which the opportunity to purchase this site arose, and in particular whether it was an opportunity belonging to the partnership, which Michael would not be free to exploit in his own name. The purchase price was £3.15 million. According to paragraph 50 of Michael's Petition, “Ivy was particularly vocal in her opposition to the purchase in [Michael's] own name”. To fund the purchase, Michael decided to withdraw £1.25 million from the account of Sales to which he had access. These sums were removed in December 2019 and January 2020 in two separate tranches of £650,000 and £600,000. Michael claims that he did so because Ivy had refused to release to him funds from the partnerships to which he was entitled. He says that he intended that the sums taken from Sales would be properly accounted for in due course, and that he notified Mr Warman of what he was doing. He relies on the fact that, according to him, other...
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Ivy Loveridge v Alldey Michael Loveridge
...Limited (“Riverside Stourport”) and Bewdley Caravan Sales Limited (“Sales”). 4 In its earlier decision, Loveridge v Loveridge [2020] EWCA Civ 1104, this court discharged orders made in both sets of proceedings by HHJ McCahill QC (sitting as a High Court judge) that in broad terms had the e......
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