Cream Holdings Ltd v Davenport

Cream Holdings Ltd v Davenport

Mr Davenport was not entitled to full disclosure as a condition precedent to agreeing the TPA's terms of engagement. There was an implied obligation on the parties not to unreasonably withhold consent to reasonable terms for the appointment of the TPA. Mr Davenport's refusal to sign the engagement letter on the grounds advanced was unreasonable and in breach of this implied duty. The machinery in the Articles was workable with the implication of such a term, and Article 11.14 was not void for uncertainty.

Parties
Claimant/respondent: Cream Holdings Limited; Defendant/appellant: Stuart Davenport
Jurisdiction
England and Wales
Judgment Date
09 November 2011
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Shareholder Rights, Pre Emption Provisions, Valuation of Shares, Implied Terms, Fiduciary Duties
Company Law Contract Law Shareholder Rights Pre Emption Provisions Valuation of Shares Implied Terms Fiduciary Duties

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 6 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Cream Holdings Limited

Claimant/respondent

Stuart Davenport

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal

Legal Issues

  1. 1 Whether the appointment of the Third Party Accountant (TPA) was effective under the Articles of Association
  2. 2 Whether the transferor (Mr Davenport) was entitled to full disclosure of relevant material before agreeing to the TPA's terms of engagement
  3. 3 Whether there was an implied obligation to co-operate in agreeing reasonable terms for the appointment of the TPA

Ratio Decidendi

Mr Davenport was not entitled to full disclosure as a condition precedent to agreeing the TPA's terms of engagement. There was an implied obligation on the parties not to unreasonably withhold consent to reasonable terms for the appointment of the TPA. Mr Davenport's refusal to sign the engagement letter on the grounds advanced was unreasonable and in breach of this implied duty. The machinery in the Articles was workable with the implication of such a term, and Article 11.14 was not void for uncertainty.

Court Disposition

Appeal dismissed

Orders

  • Application to adduce new evidence dismissed
  • Order of the judge at first instance upheld, subject to amendment deleting clause 19.1 of the terms of engagement