Cossac Holdings Ltd v Preferred Management Ltd & Ors [2021] EWHC 2953 (Ch) (04 November 2021)

Cossac Holdings Ltd v Preferred Management Ltd & Ors [2021] EWHC 2953 (Ch) (04 November 2021)

The Petitioner failed to prove, on the balance of probabilities, the existence of a binding quasi-partnership agreement or Fundamental Understanding requiring division of shares upon withdrawal or that Mr Zernov holds half of the Matveyev Shares on trust for the Petitioner. The evidence, including contemporaneous documents and credible witness testimony from the Respondents, established that the Matveyev Shares were acquired by Mr Zernov for value as part of a business separation, with no trust or obligation to transfer shares to the Petitioner. The Petitioner's case relied heavily on hearsay and untested evidence, which the court found insufficient and unreliable.

Citation
[2021] EWHC 2953 (Ch)
Parties
Petitioner: Cossac Holdings Limited; First Respondent: Preferred Management Limited; Second Respondent: Keyforce Trustees Limited; Third Respondent: Andrey Zernov
Jurisdiction
England and Wales
Judgment Date
04 November 2021
Procedural Posture
Unfair Prejudice Petition (companies Act 2006) / Trial of Additional Points of Claim
Outcome
Petitioner's claims dismissed
Legal Topics
Unfair Prejudice, Rectification of Register of Members, Quasi Partnership, Beneficial Ownership of Shares, Trusts Over Shares
Company Law Equity and Trusts Insolvency Unfair Prejudice Rectification of Register of Members Quasi Partnership Beneficial Ownership of Shares Trusts Over Shares

Case Brief

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Parties

Cossac Holdings Limited

Petitioner

Preferred Management Limited

First Respondent

Keyforce Trustees Limited

Second Respondent

Andrey Zernov

Third Respondent

Procedural Posture

Unfair Prejudice Petition (companies Act 2006) / Trial of Additional Points of Claim

Legal Issues

  1. 1 Whether PML was founded and continued on the basis of a quasi-partnership oral agreement or understanding as to its purpose, management, ownership or control
  2. 2 Whether there was an agreement that upon a founding shareholder's withdrawal, their shares would be divided equally between the remaining shareholders
  3. 3 Whether Mr Zernov holds half of the Matveyev Shares on trust for the Petitioner

Ratio Decidendi

The Petitioner failed to prove, on the balance of probabilities, the existence of a binding quasi-partnership agreement or Fundamental Understanding requiring division of shares upon withdrawal or that Mr Zernov holds half of the Matveyev Shares on trust for the Petitioner. The evidence, including contemporaneous documents and credible witness testimony from the Respondents, established that the Matveyev Shares were acquired by Mr Zernov for value as part of a business separation, with no trust or obligation to transfer shares to the Petitioner. The Petitioner's case relied heavily on hearsay and untested evidence, which the court found insufficient and unreliable.

Court Disposition

Petitioner's claims dismissed

Orders

  • No declaration that the Matveyev Shares are held on trust for the Petitioner
  • No order for rectification of PML's register of members