Harris v Kent & Anor

Harris v Kent & Anor

The court found that Mr Kent made an unconditional promise to Mr Harris to treat him as a 50/50 partner in Accidentcare Ltd, which Mr Harris relied upon by providing substantial loans. This created a proprietary estoppel, making it unconscionable for Mr and Mrs Kent to deny Mr Harris's beneficial interest. The appropriate remedy was equitable compensation for breach of trust, measured by the value of the shares as at the date they could have been realised by Mr Harris's trustee in bankruptcy.

Parties
Claimant: Michael Leonard Harris; Defendant: Roy Steven Kent; Defendant: Dena Kent
Jurisdiction
England and Wales
Judgment Date
14 March 2007
Procedural Posture
Civil / Judgment
Outcome
Judgment for the claimant
Legal Topics
Proprietary Estoppel, Breach of Trust, Shareholder Disputes, Equitable Compensation
Equity Trusts Company Law Proprietary Estoppel Breach of Trust Shareholder Disputes Equitable Compensation

Case Brief

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Parties

Michael Leonard Harris

Claimant

Roy Steven Kent

Defendant

Dena Kent

Defendant

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 Whether a bare trust of shares arose in favour of the claimant based on an oral agreement
  2. 2 Whether Mrs Kent was a nominee or beneficial owner of shares
  3. 3 Whether Mr Kent had authority to bind Mrs Kent

Ratio Decidendi

The court found that Mr Kent made an unconditional promise to Mr Harris to treat him as a 50/50 partner in Accidentcare Ltd, which Mr Harris relied upon by providing substantial loans. This created a proprietary estoppel, making it unconscionable for Mr and Mrs Kent to deny Mr Harris's beneficial interest. The appropriate remedy was equitable compensation for breach of trust, measured by the value of the shares as at the date they could have been realised by Mr Harris's trustee in bankruptcy.

Court Disposition

Judgment for the claimant

Orders

  • Mr and Mrs Kent are ordered to pay equitable compensation to Mr Harris in the sum of £795,285, apportioned 3/2 between them, together with interest accruing from 19th July 2000 until judgment.