Dear & Anor v Jackson

Dear & Anor v Jackson

The Agreement did not contain implied terms preventing the appellants from joining in a directors' notice under Article 88(e) of TFG's Articles to remove Mr Jackson as director. The express terms of the Agreement, negotiated by legally advised parties, were exhaustive regarding the method and circumstances of removal. It was not necessary for the commercial efficacy of the Agreement to imply further terms, and the parties could have intended to leave the directors' powers under Article 88(e) unaffected. Clause 7 did not require the parties to take steps to disapply or amend Article 88(e) in the absence of an express obligation. To imply such terms would be to impermissibly re-write the...

Parties
Appellant/defendant: Patrick Giles Gauntlet Dear; Appellant/defendant: Reade Eugene Griffith; Respondent/claimant: Alexander Edward Jackson
Jurisdiction
England and Wales
Judgment Date
22 February 2013
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) on Preliminary Issues
Outcome
appeal allowed
Legal Topics
Implied Terms, Shareholders' Agreements, Directors' Removal, Construction of Contracts
Contract Law Company Law Implied Terms Shareholders' Agreements Directors' Removal Construction of Contracts

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Parties

Patrick Giles Gauntlet Dear

Appellant/defendant

Reade Eugene Griffith

Appellant/defendant

Alexander Edward Jackson

Respondent/claimant

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) on Preliminary Issues

Legal Issues

  1. 1 Whether the Agreement contained implied terms preventing the removal of Mr Jackson as director of TFG by means other than shareholder action via PCH II
  2. 2 Whether clause 7 of the Agreement required the parties not to invoke Article 88(e) of TFG's Articles to remove Mr Jackson as director, or to take steps to disapply or amend that Article

Ratio Decidendi

The Agreement did not contain implied terms preventing the appellants from joining in a directors' notice under Article 88(e) of TFG's Articles to remove Mr Jackson as director. The express terms of the Agreement, negotiated by legally advised parties, were exhaustive regarding the method and circumstances of removal. It was not necessary for the commercial efficacy of the Agreement to imply further terms, and the parties could have intended to leave the directors' powers under Article 88(e) unaffected. Clause 7 did not require the parties to take steps to disapply or amend Article 88(e) in the absence of an express obligation. To imply such terms would be to impermissibly re-write the...

Court Disposition

appeal allowed

Orders

  • Appeal allowed; the High Court's order implying terms into the Agreement is set aside.