Lord & Anor v Maven Wealth Group Ltd & Ors [2021] EWHC 2544 (Comm) (24 September 2021)

Lord & Anor v Maven Wealth Group Ltd & Ors [2021] EWHC 2544 (Comm) (24 September 2021)

The procedure for determining 'Fair Value' of the claimants' B shares on a compulsory transfer is governed by Article 22 of the Articles of Association, not by Schedule 2 of COSA. The definition of 'Fair Value' in COSA provides the formula for valuation, but the Articles expressly provide the procedure for expert determination. There is no conflict requiring the importation of Schedule 2's process, and no terms equivalent to Schedule 2 are to be implied into Article 22. However, the claimants are entitled to see the material provided to the Expert and to have a reasonable opportunity to make submissions, but not to demand access to documents of their choosing.

Citation
[2021] EWHC 2544 (Comm)
Parties
Claimant: Richard Lord; Claimant: Ian Davies; Defendant: Maven Wealth Group Limited; Defendant: Leslie James Cantlay; Defendant: Wesley Lloyd Bernard Nixon; Defendant: Adam Edward Sketchley; Defendant: Tony Spain; Defendant: Independent Wealth Planners UK Limited
Jurisdiction
England and Wales
Judgment Date
24 September 2021
Procedural Posture
Part 8 Claim (interpretation of Company Articles) / First Instance Judgment
Outcome
Declarations granted in favour of the defendants on the construction issue; claimants' alternative arguments rejected.
Legal Topics
Articles of Association, Share Valuation, Expert Determination, Interpretation of Contracts
Company Law Contract Law Articles of Association Share Valuation Expert Determination Interpretation of Contracts

Case Brief

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Parties

Richard Lord

Claimant

Ian Davies

Claimant

Maven Wealth Group Limited

Defendant

Leslie James Cantlay

Defendant

Wesley Lloyd Bernard Nixon

Defendant

Adam Edward Sketchley

Defendant

Tony Spain

Defendant

Independent Wealth Planners UK Limited

Defendant

Procedural Posture

Part 8 Claim (interpretation of Company Articles) / First Instance Judgment

Legal Issues

  1. 1 Whether the procedure for determining 'Fair Value' of shares on a compulsory transfer under the Articles of Association is governed by Article 22 of the Articles or by Schedule 2 of the Call Option and Shareholders Agreement (COSA)
  2. 2 Whether terms equivalent to Schedule 2 of COSA should be implied into Article 22 of the Articles

Ratio Decidendi

The procedure for determining 'Fair Value' of the claimants' B shares on a compulsory transfer is governed by Article 22 of the Articles of Association, not by Schedule 2 of COSA. The definition of 'Fair Value' in COSA provides the formula for valuation, but the Articles expressly provide the procedure for expert determination. There is no conflict requiring the importation of Schedule 2's process, and no terms equivalent to Schedule 2 are to be implied into Article 22. However, the claimants are entitled to see the material provided to the Expert and to have a reasonable opportunity to make submissions, but not to demand access to documents of their choosing.

Court Disposition

Declarations granted in favour of the defendants on the construction issue; claimants' alternative arguments rejected.

Orders

  • It is declared that the procedure for determining the Fair Value of the claimants' B shares is governed by Article 22 of the Articles of Association.
  • It is declared that the claimants are entitled to see the material provided to the Expert and to have a reasonable opportunity to make submissions before the Expert's determination.