Lily Property Nominees Ltd v William George Stonebridge

JurisdictionEngland & Wales
JudgeBurton
Judgment Date31 July 2020
Neutral Citation[2020] EWHC 2113 (Ch)
CourtChancery Division
Docket NumberCase No: CR-2018-009804
Date31 July 2020

[2020] EWHC 2113 (Ch)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

INSOVLENCY AND COMPANIES LIST (ChD)

IN THE MATTER OF PROSPECT PLACE (WIMBLEDON) MANAGEMENT

COMPANY LIMITED

AND IN THE MATTER OF THE COMPANIES ACT 2006

Rolls Building

London, EC4A 1NL

Before:

INSOLVENCY AND COMPANIES COURT JUDGE Burton

Case No: CR-2018-009804

Between:
(1) Lily Property Nominees Limited
(2) Guruparan Chandrasekaran
Petitioners
and
(1) William George Stonebridge
(2) Patricia Anne Stonebridge
(3) Ruth Vogt
(4) Paul Johan Vogt
(5) Richard Michael Joseph
(6) Prospect Place (Wimbeldon) Management Company Limited
Respondents

Tom Beasley (instructed by BDB Pitmans) for the Petitioners

Richard Samuel (instructed by Peacock & Co) for the Respondents

Hearing dates: 2nd to 6th March 2020

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

INSOLVENCY AND COMPANIES COURT JUDGE Burton

Burton Burton Insolvency and Companies Court Judge

Paragraph No.

Introduction

1

The Company and its constitution

2

The Deed of Covenant

12

The Petition

15

Incidents giving rise to the Petition

21

Relief sought

25

The Respondents' defence

27

The Company's counterclaim

31

Open Offers

32

Legal framework

34

The role of equity and its intervention in this case

47

Witnesses

60

Analysis of incidents said to give rise to the Petition:

Refusing to issue B share, wrongfully demanding management fee

90

Gardener

126

Gate entry system

130

Barking dog

163

JCF, directorships and mother's parking introduction

Failure to consult re JCF appointment

209

Failure informally to invite appointment to the board

213

Asking mother to park outside Prospect Place

219

Mr Stonebridge's behaviour

232

The AGMs

242

Conclusion regarding the Petitioners' claim

248

Decision on the Counterclaim

252

Introduction

1

This is an unfair prejudice petition under section 994 of the Companies Act 2006 concerning a dispute between homeowners and residents of a private estate in South London. Each holds a share in the company which manages the common parts of the estate. The Petitioners claim that the company's affairs have been managed in bad faith, resulting in their interests in the company being unfairly prejudiced.

The Company and its constitution

2

Prospect Place (Wimbledon) Management Company Limited (the “Company”) owns the freehold of a road and the adjoining grass verges, which join a public highway through motorised gates. Behind the gates is a community of eight private homes. They were built in the grounds of a substantial private residence which is now No.3 Prospect Place.

3

The Company's principal objects according to its Memorandum of Association are: first to acquire the land comprising the private road, install gates, drains, pipes, cables and lighting columns (all of which I understand have now taken place); and secondly:

“To undertake the control management repair and administration of the said land and other facilities and to collect rent service and maintenance charges and income from the owners and/or occupiers of the said dwellinghouses and in connection therewith to engage and employ such servants, agents, builders, engineers and other person as the Company may consider necessary in its absolute discretion to provide such services and to pay all rates taxes insurance premiums and other outgoings costs and expenses or otherwise in relation to the said land”.

4

The Company's Articles of Association entitle the owner of each home on the estate to a single, ordinary B share in the Company. B shares may only be held by homeowners and are to be transferred upon or immediately before a change in ownership of the home. The Company's directors are required to register such a transfer on and subject to the production of both satisfactory evidence that the property has been transferred to the new owner and also a completed Deed of Covenant, in specific form, between the new owner and the Company.

5

The Articles provide for the Company to have not less than two nor more than four directors. A party must hold a B share in order to qualify to be a director. Unless otherwise resolved by the Company, no director or officer of the Company is entitled to receive any remuneration for his services.

6

The Articles incorporate the provisions of Table A in the Companies (Tables A to F) Regulations 1985 with certain of the regulations expressly excluded. Among those excluded are regulations 73 to 75 which concern the appointment and retirement of directors. Regulation 76 provides that no person other than a director retiring by rotation shall be appointed or reappointed as a director at any general meeting unless (a) he is recommended by the directors; or (b) not less than 14 nor more than 35 clear days before the date appointed for the meeting, notice executed by a member qualified to vote at the meeting has been given to the Company of the intention to propose that person for appointment or reappointment.

7

Regulation 77 provides that not less than 7 nor more than 28 clear days before the date appointed for holding a general meeting, notice shall be given to all who are entitled to receive notice of the meeting of any person (other than a director retiring by rotation at the meeting) who is recommended by the directors for appointment or reappointment as a director at the meeting or in respect of whom notice has been duly given to the Company of the intention to propose him at the meeting for appointment or reappointment as a director.

8

Regulation 78 provides that subject to these provisions, the Company may, by ordinary resolution, appoint a person who is willing to act to be a director either to fill a vacancy or as an additional director and may also determine the rotation in which any additional directors are to retire.

9

Article 79 provides that the directors may appoint a person who is willing to act to be a director either to fill a vacancy or as an additional director, provided that the appointment does not cause the number of directors to exceed any number fixed by or in accordance with the Articles as the maximum number of directors. A director so appointed shall hold office only until the next following annual general meeting and if not reappointed at such meeting, he must vacate office at the conclusion of the meeting.

10

During the relevant period the following were appointed (and, where shown, resigned) as directors:

Name

Date appointed

Date resigned

Peter Beckwith

07.09.1999

21.06.2016

Paul Vogt

07.09.1999

-

David Birley

01.01.2001

16.03.2016

Cynthia Hipps

07.04.2016

25.11.2016

William Stonebridge

07.04.2016

-

Richard Joseph

05.03.2018

24.09.2018

11

The First and Fourth Respondents, Mr Stonebridge and Mr Vogt are the current directors of the Company. The Fifth Respondent, Mr Joseph was a director from March to September 2018.

The Deed of Covenant

12

The Deed of Covenant (“DoC”) which must be entered into by each homeowner recites as its purpose:

“(3) This Deed is entered into in order to give effect to the agreed scheme for the management maintenance and repair of Prospect Place Wimbledon London SW20 and ancillary motorised gates and lighting and adjoining landscaped areas”.

13

Clause 1 defines Prospect Place to mean “the private road thus named which is situate in the position shown on the Plan” and “‘Communal Landscaped Areas’ means the grassed or planted landscaped areas which are situate in the positions shown on the Plan”.

14

Clause 3 of the DoC sets out a series of positive and negative covenants summarised in Mr Samuel's skeleton argument as follows:

“a) a series of positive covenants

(i) to maintain the land it owns (Prospect Place and the grass verges) and the structures on it;

(ii) to enforce the provisions of the Deeds against other homeowners; and

b) a series of negative covenants, of which the following are relevant:

i) not to allow to be done on any part of Prospect Place or the Communal Landscaped Areas anything which does or may be or may grow to be a nuisance or annoyance to any other occupier of [the eight houses]; and

ii) not to 'allow any car or cars… to be parked in any part of [the private road] or in such positions that they project onto or overhang [the private road] …”

The Petition

15

The petition was amended on 15 March 2019, 26 March 2019 and 11 November 2019. All references in this judgment to “the Petition” are to the Re-Amended petition.

16

The First Petitioner, “Lily” is a company incorporated in Jersey. It holds the legal title to 7 Prospect Place (“7PP” — I shall describe each home in a similar manner) which is beneficially owned by the Second Petitioner and his wife, Guruparan (or “Paran”) and Vanessa Chandrasekaran. They live at 7PP with their young children. Mr Chandrasekaran was joined to the Petition for the purposes of costs only.

17

The Petition claims that:

“as far as the Petitioners are aware, the Company has always been run on the following basis and understanding (“the Understanding”):

i) That all the owners from time to time of the 8 Properties would be consulted by the Company on material matters concerning the management of the Company's Land;

ii) To the extent that vacancies became available on the board of directors, that the owners from time to time of the 8 Properties would each be fairly considered by the existing directors of the Company for appointment and would be informally approached and then appointed as directors if they so desired;

iii) That the members of the Company would ensure that the Company...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT