LA Micro Group (UK) Ltd & Anor v LA Micro Group Inc & Ors.

LA Micro Group (UK) Ltd & Anor v LA Micro Group Inc & Ors.

The Court of Appeal held that proprietary estoppel was not made out because Mr Bell did not understand the 2010 assurances as Inc giving up its beneficial interest in UK. However, the Court found that there was an implied term in the 2010 agreement that the beneficial ownership of UK would be shared equally between Mr Bell and Mr Lyampert, and that this agreement was specifically enforceable, giving rise to a constructive trust. Therefore, s. 53(2) LPA 1925 applied and the lack of written disposition did not invalidate the transfer of beneficial interests.

Parties
Claimant / Respondent: LA Micro Group (UK) Ltd; Claimant / Respondent: David Bell; Defendant / Appellant: LA Micro Group, Inc; Defendant / Appellant: Roman Frenkel; Defendant / Respondent: Arkadiy Lyampert
Jurisdiction
England and Wales
Judgment Date
28 February 2023
Procedural Posture
Civil Appeal / Appeal From High Court (business and Property Courts, Chancery Division) to Court of Appeal
Outcome
Appeal allowed in part; finding of proprietary estoppel set aside; cross-appeal on implied term and constructive trust allowed; beneficial ownership of UK shares now equally held by Mr Bell and Mr Lyampert.
Legal Topics
Proprietary Estoppel, Implied Terms, Constructive Trust, Contractual Surrender, Section 53 Law of Property Act 1925, Beneficial Ownership of Shares
Equity Company Law Trusts Proprietary Estoppel Implied Terms Constructive Trust Contractual Surrender Section 53 Law of Property Act 1925 +1 more

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Parties

LA Micro Group (UK) Ltd

Claimant / Respondent

David Bell

Claimant / Respondent

LA Micro Group, Inc

Defendant / Appellant

Roman Frenkel

Defendant / Appellant

Arkadiy Lyampert

Defendant / Respondent

Procedural Posture

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

Legal Issues

  1. 1 Whether Inc was estopped by proprietary estoppel from claiming a beneficial interest in the shares of UK
  2. 2 Whether there was an implied term in the 2010 agreement that the shares would be held both legally and beneficially by Mr Bell and Mr Lyampert
  3. 3 Whether the implied term was ineffective for want of compliance with s. 53(1)(c) LPA 1925

Ratio Decidendi

The Court of Appeal held that proprietary estoppel was not made out because Mr Bell did not understand the 2010 assurances as Inc giving up its beneficial interest in UK. However, the Court found that there was an implied term in the 2010 agreement that the beneficial ownership of UK would be shared equally between Mr Bell and Mr Lyampert, and that this agreement was specifically enforceable, giving rise to a constructive trust. Therefore, s. 53(2) LPA 1925 applied and the lack of written disposition did not invalidate the transfer of beneficial interests.

Court Disposition

Appeal allowed in part; finding of proprietary estoppel set aside; cross-appeal on implied term and constructive trust allowed; beneficial ownership of UK shares now equally held by Mr Bell and Mr Lyampert.

Orders

  • Set aside the finding of proprietary estoppel against Inc.
  • Declare that the 2010 agreement gave rise to an implied term that the beneficial ownership of UK is equally shared between Mr Bell and Mr Lyampert.