Mr Richard Furse v Mrs Anne Reed
| Jurisdiction | England & Wales |
| Judge | Barnett |
| Judgment Date | 07 June 2021 |
| Neutral Citation | [2021] EWHC 1309 (Ch) |
| Court | Chancery Division |
| Docket Number | Case Number CR-2021-000724 |
[2021] EWHC 1309 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (Ch D)
IN THE MATTER OF ASTON MARTIN OWNERS CLUB LIMITED
AND IN THE MATTER OF THE COMPANIES ACT 2006
Royal Courts of Justice 7 The Rolls Building Fetter Lane London EC4A 1NL
DEPUTY ICC JUDGE Barnett
Case Number CR-2021-000724
Guy Adams (instructed by Capital Law Limited) for the Claimant
[ Nicola Rushton QC was also instructed for the Claimant for the purpose of making written submissions subsequent to the hearing]
Matthew Bradley (instructed by Clyde & Co LLP) for the Respondents
Hearing date: 11 th May 2021
DEPUTY ICC JUDGE Barnett
This matter concerns events surrounding the election of directors of Aston Martin Owners Club Limited (the “Company”) at its 2021 Annual General Meeting. At the conclusion of a hearing held on 11 May 2021, I refused to grant the declaratory relief sought by the Claimant. I said that I would give my detailed reasons subsequently. This is my judgment.
Background
The Company is aptly described by the First Defendant as a club to:
“promote the sport and pastime of motoring, develop interest in the Aston Martin car and encourage social interaction between members”.
It is a company limited by guarantee without share capital. It is managed by a Committee of Management (the “CoM”) comprising 20 directors all of whom are unpaid part-time volunteers.
The Claimant is a member of the CoM and served as the membership director.
The First Defendant, Ms Anne Reed, was, prior to the election referred to below, the chairman of the CoM. The Second to Sixth Defendants were members of the CoM.
The Claimant's evidence records that the Company was incorporated in 1951 and that it has around 7376 members from all over the world with 97 of those members holding official positions (there is a difference of opinion as to the precise number of members but the point is irrelevant for my purposes). The Company employs a small management staff headed by the club manager, Mr Marc Aylott.
In preparation for the 2021 elections for membership of the CoM, nominations were to be submitted to Mr Aylott. Ballot papers and proxy forms were sent to all members by email on 24 February 2021 by Mr Aylott requiring all completed ballot papers to be returned at least seven working days before the AGM which was scheduled for 27 March 2021.
On 22 March 2021 Mr Aylott, whilst checking returned ballot papers, spotted what he considered to be an unusual pattern of voting. It transpired that the Claimant had accessed the personal details of members and forwarded to the South African Region Representative a pre-populated ballot slip with the intention of encouraging members to vote in a certain way.
Mr Aylott reported the position to Ms Reed. Ms Reed, in consultation with Mr Anthony Oade, the Company's deputy chairman and Mr Aylott determined that they should seek advice from the Company's GDPR officer and the Company's legal advisers with a view to then reporting the matter to the CoM.
The Company's GDPR officer consulted with the Information Commissioner's Office and concluded that there was not a reportable breach as no harm had been suffered by any member. However, he advised that the disclosure of information without the permission of the data controller could nonetheless render the Claimant susceptible to prosecution as a criminal offence under section 170 of the Data Protection Act 2018.
The Company's legal advisers, DWF LLP, provided initial advice on 24 March 2021 concluding:
“The Company sent out blank voting forms to all members so the Company has followed the correct procedure. If a member subsequently chooses to put their name and membership number on an already Completed form and sent it on that, to me, is an indication that they, in their capacity as a member, agree and wish to vote in that way. If they don't wish to vote in the suggested way they could abstain or change the form or vote differently. It isn't ideal at all and as I said in my initial email, it is not a black and white answer, but I just don't think you can ignore or void votes of members when they have actively chosen to vote in a particular way. I think you will have to accept these votes and proceed with the elections at the AGM”.
The following day Ms Reed sent a further email to DWF recording that several directors were concerned at the position and asking whether the CoM had the right to suspend the announcement of the voting results whilst an investigation was carried out. DWF replied:
“If the voting hadn't been carried out as prescribed by Article 5.7 then you wouldn't have any votes to announce so, in theory, yes.
However, I must stress that my view remains that by applying their details and sending the forms themselves, members have voted in line with their own wishes and it would not be correct for the directors to take any act to try to undermine, void or discard those votes, despite the fact they may be undesirable. I, personally, can't advise otherwise and from the facts you have given me I can't recommend delaying/suspending/cancelling the announcement of the votes”.
An emergency meeting of the CoM was held on 26 March 2021, the day before the AGM. A transcript of that meeting is in evidence. The Claimant was present. He accepted that he had been wrong in providing a pre-populated ballot paper to the South African Region Representative.
The Claimant's actions were criticised by Mr Oade who concluded that the process had been tainted and he duly withdrew his nomination for chairman. The minutes record:
“I am sorry Richard, I think the way you did it is not in the correct way of canvassing that we have done and I'm sorry to say that I'm going to withdraw my nomination for chairman. It is not consistent with my values and behaviours, what has happened here and I feel that any victory would have been tainted, irrespective of whether legal or not. The fact that we are discussing it in this manner means it is tainted, in my view. And it would completely ruin the experience of being chairman”.
Ms Reed reported the advice that she had been given by DWF in the first of their emails and advised:
“So although it is not illegal and the result must stand. I think it is then a question of what is morally acceptable but we do basically have to ahead with the results tomorrow [sic]”.
The CoM then considered whether it was appropriate to delay reporting the election results at the AGM pending an investigation. Ms Reed did not share explicitly with the CoM the second email from DWF referred to above. Her failure to do so is heavily criticised by the Claimant but she did record her views as follows:
“The suggestion has been that we don't give the results out tomorrow and we investigate it, but actually, there is really nothing else to investigate. Members have the choice to make a decision. They had a blank ballot form, they had a completed ballot form, they chose what to do.
In terms of the election I don't think we have any choices. Unless anyone has any other options that they want to suggest in terms of what we do in terms of results I think we have to accept that we give the results as it is.
It sounds like we don't have any other options for tomorrow, so I think we have to continue with the results as they are.
In answer to the question of what we do tomorrow, I don't see we have any choice but to go with the results other than the fact that Anthony has stood down so that would mean that I would be chairman, we don't know who has got the treasurer bit and we don't know the directors we obviously know that Tom and Matt are at a disadvantage. So unless anyone has another option on what we do tomorrow I don't think there is any more discussion on this that is where it is”.
Mr Lewington summarised his view of the meeting in his witness statement:
“6. The legal advice from the Company's lawyers which Anne Reed read out at the meeting stated that they did not consider the votes to have been illegal, and that they should stand and the AGM proceed. However, there was concern expressed by Mr Overdijk, our Dutch Section Chairman and Director, about the validity of some of their opinions which had been sought in a hurry. I value the opinion of Mr Overdijk, who is a lawyer himself, and agreed with my co-Directors that adjourning the AGM prior to announcing the election result to allow time for additional investigation and for the legal advice to be confirmed and thereafter followed would be a sensible step in the circumstances. I made this decision, not from a desire to alter the outcome of the election, but on the basis of what I thought was in the best interests of the Club and the Members. I was particularly concerned that many members would be upset that their own votes would have been undermined by the actions of the Claimant. If we had been allowed to meet earlier in the week to discuss this with more time before the AGM we might have reached a different decision for the actual AGM. Along with all I believe of the coDefendants to this claim, I have always intended that once the additional advice was to hand the COM would implement it. As Anne Reed says in her statement that is exactly what has happened”.
Notwithstanding Ms Reed's advice, a consensus was ultimately reached by all those present, including the Claimant, that the AGM should be adjourned and that all of those who stood as candidates should withdraw their nominations so that a new election could take place.
The AGM took place the following day, 27 March 2021. It was attended by 66 household members. The Claimant was also present. Mr Aylott read out a...
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