Boston Trust Company Ltd & Anor v Verhoef [2021] EWCA Civ 1176 (28 July 2021)

Boston Trust Company Ltd & Anor v Verhoef [2021] EWCA Civ 1176 (28 July 2021)

The court held that it was not proper to grant conditional permission to continue a derivative claim where the claimant lacked standing; instead, the correct course is to adjourn or stay the application pending determination of the claimant's standing. As the claimants subsequently obtained standing through rectification of the register, unconditional permission should be granted.

Citation
[2021] EWCA Civ 1176
Parties
Claimant/respondent: Boston Trust Company Limited; Claimant/respondent: Boston Fiduciary Management Limited; Defendant/appellant: Gordon Verhoef
Jurisdiction
England and Wales
Judgment Date
28 July 2021
Procedural Posture
Civil Appeal / Appeal From High Court (business and Property Courts) to Court of Appeal
Outcome
Appeal allowed in part; conditional permission order set aside; unconditional permission granted.
Legal Topics
Derivative Actions, Standing, Rectification of Register, Case Management, Permission to Continue Derivative Claim
Company Law Civil Procedure Derivative Actions Standing Rectification of Register Case Management Permission to Continue Derivative Claim

Case Brief

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Parties

Boston Trust Company Limited

Claimant/respondent

Boston Fiduciary Management Limited

Claimant/respondent

Gordon Verhoef

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court (business and Property Courts) to Court of Appeal

Legal Issues

  1. 1 Whether the court has jurisdiction to grant conditional permission to continue a derivative action where the claimant lacks standing
  2. 2 Whether the court should exercise discretion to grant conditional permission in such circumstances
  3. 3 Proper procedural approach when standing is in issue in derivative claims

Ratio Decidendi

The court held that it was not proper to grant conditional permission to continue a derivative claim where the claimant lacked standing; instead, the correct course is to adjourn or stay the application pending determination of the claimant's standing. As the claimants subsequently obtained standing through rectification of the register, unconditional permission should be granted.

Court Disposition

Appeal allowed in part; conditional permission order set aside; unconditional permission granted.

Orders

  • Set aside the order granting conditional permission to continue the derivative action.
  • Substitute an order granting unconditional permission to continue the derivative action.