Jeremy Sinclair Clarke v Yasmin Azim Lakha

Hearing dates 25, 26, 27 and 30 October 2023

Approved Judgment

This judgment was handed down remotely by email and MS Teams. It will also be sent to The National Archives for publication. The date and time for hand-down is 9.30 a.m. on 18 January 2024.

ICC Judge Barber

This is a Part 8 claim relating to the affairs of Bramber Road Management Limited (‘the Company’) brought by two members of the Company.

Background

Bramber Court is a small development of 4 individual office units, formed around an inner courtyard (‘the Courtyard’). The Courtyard is an amenity space for the occupiers of the 4 units. Each of the unit owners enjoys rights of access to and from Bramber Road over the driveway and the Courtyard.

The Company was incorporated on 16 June 1986. At all material times it has had an issued share capital of 4 Ordinary Shares of £1 each. It owns the freehold interest in the Courtyard. The Company's business is to manage and maintain the Courtyard.

The parties

The Claimants are civil partners and are the joint owners of freehold interests in Unit 3 and Unit 4 Bramber Court. Mr Lawson is a solicitor and the managing partner of Simkins, a media law firm. Mr Clarke is a former solicitor and now runs a small property investment and development business.

The Claimants purchased Unit 4 from Cavendish White (Holdings) Limited in 2003. They purchased Unit 3 in 2019 from Mr John Blake. Units 3 and 4 have been developed into office suites which the Claimants rent out to local small businesses with shared communal facilities including shared meeting rooms and catering facilities. Mr Clarke operates and manages his property business from an office within Unit 4.

The First Defendant, Mrs Lakha, has owned Unit 2 since 16 December 2013, She became the registered proprietor of Unit 2 as the executrix of the estate of her late husband Azim Lakha, who had purchased Unit 2 in 1997 from Freeholdings SA. Mrs Lakha occupies Unit 2 for the purposes of her business ‘Elocute’, which offers private elocution lessons to young children and others. Since 14 January 2022, Mrs Lakha has owned Unit 2 jointly with her daughters, Ms Shamim Lakha and Dr Parviz Lakha.

The Second Defendant (‘TFP’) is the owner of the freehold interest in Unit 1. TFP purchased Unit 1 in 2008 from Sand and Gravel Association Limited. TFP is a private company limited by guarantee. It is a registered charity whose objects include the preservation and safeguarding of mental health sufferers. Its current directors are Ms Hutchison and Mr Venis Olafisoye. It has four trustees, comprising Ms Hutchison, Mr Olafisoye, Mr Stephen Bashorun and Ms Vera Haywood.

The Third Defendant is simply a nominal party to the proceedings in order to be bound by any judgment.

Save where stated otherwise, references to ‘the Defendants’ in this judgment should be read as references to the First and Second Defendants.

The Company's members

The Company's articles envisage that each unit owner will hold one share in the Company. In practice however, whilst stock transfer forms may have been executed at the time of given unit transfers, the register of members, which is in evidence before me, has not been updated consistently to reflect changes in unit ownership.

According to the register of members, the current members are as follows:

(1) The Claimants are registered as joint holders of one share from 21 February 2003 (the date when Unit 4 was acquired and the date of the corresponding stock transfer form). Entries in the register of members confirm the date of the share transfer and the ‘date of entry as a member’ as 21 February 2003. The Claimants' entitlement to be registered as members in respect of this share is not disputed by the Defendants.

(2) The Claimants are also registered in the register of members as joint holders of 1 share from 9 May 2019 (the date that they acquired Unit 3). The stock transfer form in evidence before me bears the same date. Their entitlement to be entered on the register of members in respect of Unit 3, however, is contested by the Defendants.

(3) Sand and Gravel Association Limited is registered in the register of members as the holder of 1 share. This company was the first purchaser of Unit 1, which it purchased in 1985. It sold Unit 1 to TFP in 1998, but remains on the register of members.

(4) Flamecrest Limited is registered as the holder of 1 share from 31 January 1995. It purchased Unit 3 from the Ophthalmological Society in 1995. It has long since ceased to own that Unit, but remains on the register of members.

The Defendants do not appear on the register of members and have not sought to be entered on it. They have, however, always asserted an entitlement to exercise voting rights as members.

The Company's directors

It is common ground that the First Claimant, Mr Clarke, is a director of the Company and that he has been a director since 2003, following the purchase by the Claimants of Unit 4.

The Claimants contend that following the purchase of Unit 3 in 2019, the Second Claimant, Mr Lawson, was appointed a director of the Company. The Defendants dispute this.

The First Defendant, Mrs Lakha, claims to be a director of the Company.

Ms Hutchison, a director of TFP, also claims to be a director of the Company.

Overview

For many years the Company was run on a fairly informal basis and its books and records were not kept up to date. The Claimants contend that at all material times until the parties fell out, unit owners (including the Defendants) conducted themselves on the basis that the rights of each unit owner were the same: to be entered on the register of members in respect of 1 share in the Company and to appoint a nominee director of the Company (with one vote per unit as either member or director).

This, the Claimants say, preserved the rights of all unit owners by ensuring that each had an equal say in the management of the Company and the expenses incurred by it. The Claimants maintain that as relations between the Claimants and Defendants have deteriorated, the Defendants have attempted to seize control of the Company for their own personal benefit at both shareholder and director level. The Defendants accept that the parties have fallen out but deny any improper conduct. They maintain that Mr Clarke's behaviour has become increasingly disruptive, an allegation which Mr Clarke in turn denies. The parties having been unable to resolve their differences, on 28 March 2022 the Claimants issued these proceedings.

The claim

The Claimants' claim is for the following relief:

(1) a declaration that each ‘Unit owner’ (as defined in the articles of association of the Company) is entitled to exercise the following rights on becoming a member of the Company (without limitation to any other rights contained in the Company's articles of association or elsewhere):

(a) the voting rights set out in Regulations 54 and 55 of Table A (as incorporated into the Company's articles of association) and/or section 284 Companies Act 2002, including the right to exercise one vote in respect of each ordinary share of £1.00 each (‘the Ordinary Share’) held by him on a vote on a written resolution or on a resolution on a poll taken at a meeting; and

(b) the right to appoint one director by notice to the Company, including the right to remove and/or replace any director so appointed by notice to the Company;

(2) a declaration that the following persons were and are entitled to be entered into the Company's register of members:

(a) with effect from 3 June 1998, the name of ‘The Forward Project’ as holder of 1 Ordinary Share in respect of Unit 1;

(b) with effect from 16 December 2013, the name of ‘Yasmin Azim Lakha’ as holder of 1 Ordinary Share in respect of Unit 2;

(c) with effect from 9 May 2019, the names of ‘Euan John Lawson and Jeremy Sinclair Clarke’ as joint holders of 1 Ordinary Share in respect of Unit 3; and

(d) with effect from 13 March 2003, the names of ‘Jeremy Sinclair Clarke and Euan John Lawson’ as joint holders of 1 Ordinary Share in respect of Unit 4;

(3) a declaration that the First Claimant was appointed company secretary of the Company by board resolution dated 28 November 2018 and remains company secretary at the date of this Order;

(4) a declaration that the Second Claimant was appointed a director of the Company on 9 May 2019 and remains a director at the date of this Order;

(5) a declaration that the First Defendant was removed as co-chairman of the board of directors of the Company by board resolution dated 18 November 2018 and no valid board resolution has been passed appointing any person (including the First Defendant) as chairman of the board of directors since the resignation of John Blake on 9 May 2019;

(6) a declaration that various filings on the register maintained by the Registrar of Companies are inaccurate and/or were made without the authority of the Company;

(7) a declaration that a purported resolution dated 23 June 2021 is invalid and of no effect;

(8) a declaration that a purported resolution dated 17 November 2021 is invalid and of no effect and/or is factually inaccurate;

(9) an order pursuant to section 125 CA 2006 that the First...