Deakin and Ors v. Faulding and Ors [2001] EWHC Ch 7 (31st July, 2001)

Deakin and Ors v. Faulding and Ors [2001] EWHC Ch 7 (31st July, 2001)

There was no clear, certain, and binding agreement for the transfer or allotment of shares to the Deakins giving each a one-third shareholding. The evidence showed ongoing negotiations and proposals, but not a concluded contract intended to be legally binding. The documents relied on by the Deakins were either not signed by all relevant parties, not intended to be binding, or were ambiguous. Therefore, the claim for specific performance fails. As to the bonuses, the court found that the payments were made with the knowledge and acquiescence of the relevant parties and were not recoverable by the company.

Citation
[2001] EWHC Ch 7
Parties
Plaintiff: Richard Deakin; Plaintiff: Charles Deakin; Defendant: Peter Faulding; Defendant: Nora Faulding; Plaintiff (bonuses Action) / Defendant (shares Action): Specialist Group International Limited
Jurisdiction
England and Wales
Procedural Posture
Civil / Judgment After Trial
Outcome
Claims dismissed
Legal Topics
Specific Performance, Shareholder Agreements, Director Remuneration, Bonuses, Oral Agreements, Corporate Governance
Company Law Contract Law Specific Performance Shareholder Agreements Director Remuneration Bonuses Oral Agreements Corporate Governance

Case Brief

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Parties

Richard Deakin

Plaintiff

Charles Deakin

Plaintiff

Peter Faulding

Defendant

Nora Faulding

Defendant

Specialist Group International Limited

Plaintiff (bonuses Action) / Defendant (shares Action)

Procedural Posture

Civil / Judgment After Trial

Legal Issues

  1. 1 Whether there was a binding agreement to allot shares to the Deakins giving each a one-third shareholding in the company
  2. 2 Whether the Deakins are entitled to specific performance of such agreement
  3. 3 Whether bonuses paid to the Deakins as directors were authorised and recoverable by the company

Ratio Decidendi

There was no clear, certain, and binding agreement for the transfer or allotment of shares to the Deakins giving each a one-third shareholding. The evidence showed ongoing negotiations and proposals, but not a concluded contract intended to be legally binding. The documents relied on by the Deakins were either not signed by all relevant parties, not intended to be binding, or were ambiguous. Therefore, the claim for specific performance fails. As to the bonuses, the court found that the payments were made with the knowledge and acquiescence of the relevant parties and were not recoverable by the company.

Court Disposition

Claims dismissed

Orders

  • The Deakins' claim for specific performance of the alleged share agreement is dismissed.
  • The company's claim for repayment of bonuses by the Deakins is dismissed.