JMW Solicitors LLP v Injury Lawyers 4U Ltd

Hearing dates: 18 and 20 March 2025

Approved Judgment (No. 2)

This judgment was handed down remotely at 10.30am on 1 May 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

HHJ Cawson KC SITTING AS A JUDGE OF THE HIGH COURT

HHJ Cawson KC:

Contents

Introduction

By an application dated 10 October 2024 (“ the SJ Application”), the Defendants applied for reverse summary judgment pursuant to CPR 24.3 in respect of all the Claimants' claims as set out in their Particulars of Claim. I heard the SJ Application on 13 November 2024 and determined it by the judgment that I handed down on 3 December 2024 ( [2024] EWHC 3103 (Ch)) (“ the First Judgment”).

This judgment should be read together with the First Judgment. In this judgment, I adopt the definitions used in the First Judgment.

For the reasons set out in the First Judgment, I determined that the Defendants were entitled to summary judgment on the Claimants' claims based upon breach of clause 4.3 of the Supplemental Deed, the alleged Slot Price Differential Collateral Warranty, and estoppel by convention (“ the Contract/Estoppel Claim”).

As to the Claimants' claims in respect of the validity of the appointment of Mr Maxey and Mr Slade as directors, the transfer of “A” shares to Mr Maxey, and hence the decision to remove the Slot Price Differential (“ the Validity Claim”), I held that the Defendants should be granted summary judgment thereon unless the Claimants, within 14 days, issued an application to amend their Particulars of Claim, and then succeeded in obtaining permission to amend so as enable them to advance the unpleaded allegations that they had raised at the hearing on 13 November 2024. These allegations had been advanced in an unpleaded form at that hearing because the Claimants' pleaded case on the Validity Claim was based on an incorrect assumption that the Defendants were relying upon amendments to the 2013 Articles that at one stage in correspondence it had been suggested they were relying upon to support their actions. However, as explained in the First Judgment, this pleaded case had become inapt in the light of the way that the Defendants sought to justify their actions for the purposes of the SJ Application, hence the need for the Claimants to change tack.

On handing down the First Judgment, I directed that any application to amend should be heard at the same time as I dealt with other consequential matters arising from the First Judgment.

On 16 December 2024, the Claimants filed an application to amend their Particulars of Claim (“ the Amendment Application”), supported by the witness of Richard Powell (“ Mr Powell”) dated 16 December 2024.

In response to the Amendment Application, in addition to the evidence before me at the earlier hearing, the Defendants rely on:

i) The third witness statement of Mr Maxey dated 13 November 2025 (“ Maxey 3”).

ii) The witness statement of Mr Slade dated 12 February 2025;

iii) The witness statement of Ms Wilkinson dated 12 February 2025;

iv) The witness statement of Mr Twambley dated 12 February 2025; and

v) The fourth witness statement of Mr Maxey dated 12 February 2025 (“ Maxey 4”).

As at the previous hearing, David Lascelles appeared as Counsel on behalf of the Defendants, but on this occasion together with Stuart Sanders. Paul Chaisty KC and Nick Taylor again appeared on behalf of the Claimants. I am grateful to Counsel for their helpful written and oral submissions.

This judgment determines the Amendment Application.

The background leading up to the Amendment Application appears from the First Judgment.

It is to be noted that the first named Claimant, Howe & Co., has discontinued its claim since I handed down the First Judgment.

For the reasons set out below, I have concluded that the Amendment Application should be dismissed. The consequence of this is that the Defendants are entitled to reverse summary judgment on the whole of the Claimants' claim.

The proposed amendments

By the proposed amendments, the Claimants seek to challenge the removal of the Slot Price Differential on a number of grounds.

Messrs Maxey and Slade were not validly appointed directors

Firstly, it is alleged that Messrs Maxey and Slade were not validly appointed directors by Mr Twambley because:

i) The purported decision was taken by Mr Twambley and Ms Wilkinson at a Board Meeting, rather than by Mr Twambley alone in his capacity as an A shareholder;

ii) Mr Twambley had no power to appoint two directors because he had already appointed two directors using his rights as an A Shareholder under Article 11.1 of the 2013 Articles.

These allegations are set out in paragraphs 41F(1) and (2) of the draft Amended Particulars of Claim (“ the APofC”) as follows:

“41F. Further or alternatively and in any event the appointments of the Second and Third Defendants as directors in the First Defendant were invalid and of no effect as:

(1) The July 2023 Board Minute upon which the Defendants seek to rely provides at paragraph 6.2 that the appointment of the Second and Third Defendants was a decision taken by the First Defendant (through resolution of its Board). The First Defendant (acting by its Board or otherwise) had no such power – pursuant to Article 11.1 the power to appoint directors of the First Defendant was vested in the holder(s) of the majority of “A” Shares, which at that time was Mr Twambley;

(2) As a matter of construction of Article 11.1 of the 2013 Articles, the entitlement of the “A” shareholder to appoint directors is an entitlement to appoint: “ two persons to be Directors of the Company.” At the time of the purported appointment of the Second and Third Defendants as directors the holder of the “A” shares (Mr Twambley) had already exhausted his power to appoint two persons to be directors of the First Defendant to serve at any one time (as set out in paragraph 8(5) above). Accordingly he had no power or authority to appoint any further directors.”

The transfer of the A Shares to Mr Maxey was invalid

Secondly, it is alleged that the transfer of the A Shares to Mr Maxey was invalid and/or otherwise gives rise to claims by the Claimants as:

i) Mr Maxey was not a partner of Amelans because at the time that A Shares were purportedly transferred to him, Amelans had been acquired by Express Solicitors and had ceased to exist. This case is pleaded as follows in paragraph 41B(1)–(2) of the APofC;

“41B The transfer of “A” shares to the Second Defendant was ultra vires, invalid and/or unlawful and of no effect as:

(1) Upon acquisition by Express Solicitors, Amelans (as defined in the 2013 Articles and being a partnership under the Partnership Act 1890) is rebuttably presumed to have dissolved as a matter of law (whether pursuant to section 32 of the Partnership Act 1980 or otherwise);

(2) Accordingly, following its acquisition by Express Solicitors the Second and Third Defendants cannot have been appointed as partners/members of Amelans (as defined) because it had ceased to exist (and for the avoidance of doubt the Claimants do not accept that the Second and Third Defendants would have been appointed as partners in Amelans prior to the completion of the acquisition by Express Solicitors).”

ii) Mr Maxey was not a “Permitted Transferee” as the reference to Amelans in the 2013 Articles was to that firm as it existed at the date of the 2013 SHA. This case is pleaded as follows in paragraph 41B(3)–(4) of the APofC:

“(3) Further or alternatively, and as a matter of construction of the 2013 Articles, the reference to “Amelans” in the 2013 Articles is a reference to the partnership that existed at the time of the 2013 Shareholder's Agreement;

(4) Accordingly, and if (contrary to the Claimants' primary position), following the acquisition by Express Solicitors of the business that had been carried on by Amelans, the Second and Third Defendants were appointed as partners of a partnership which still described itself as “Amelans”, any such partnership, if it existed at all, was no longer the partnership as intended and defined within the 2013 Articles, having materially changed its composition and further any such partnership could no longer satisfy the requirement of section 1 of the Partnership Act 1890 when its very business had been disposed of to Express Solicitors.”

iii) It was an implied term of the 2013 Articles that Article 18(2)(a) would not be used to permit or effect at transfer of the “A” Shares if “Amelans” ceased to be an “independent firm”. This case depends upon the implication of a term to this effect, and is pleaded as follows in paragraph 35C of the APofC:

“35C. Further, it was an implied term of the 2013 Articles that Article 18.2(a)...