John Seneschall & Anor v Propiteer Limited & Ors

Principally, the two Applications before the court, both for summary judgment, concerned the meaning and effect of the Articles of Association of the First Defendant, Propiteer Limited (“Propiteer”), and in particular, of Article 13, which provides for various circumstances in which a shareholder is compulsorily deemed to have served a “Transfer Notice”, giving rise to pre-emption rights in respect of their shares. The Third Defendant, Ms Nicola Marshall (“Ms Marshall”) is a shareholder in Propiteer; she has asserted such rights, but her case is denied by the Claimants. In addition, albeit unopposed, was the Claimants’ application in respect of an alleged “Declaration of Trust”, stated on its face to have been made on 24 April 2024, by the Second Claimant, PC Group Nominees Limited (“PCGN”), in respect of all of its shares in Propiteer, in favour of the Fourth Defendant, Never What If Group Limited (“NWIG”), but said by both Claimants (including PCGN) to be invalid and/or unenforceable. NWIG is in voluntary liquidation as a result of a resolution passed by its members on 25 April 2024, the day after the alleged Declaration; its Liquidators are the Fifth and Sixth Defendants, but neither they, nor NWIG, have played any part in the proceedings.

Albeit comparatively confined in scope, the present disputes arose in the context of long, continuing and hard fought litigation. Insofar as relevant, the background can be summarised briefly as follows.

The First Claimant, Mr John Seneschall (“Mr Seneschall”), is a former director and member of a company called Trisant Foods Limited (“Trisant”), which has now been dissolved. On 17 March 2021, Mr Seneschall presented an unfair prejudice petition under section 994 of the Companies Act 2006 (“the CA 2006”) in relation to the conduct of Trisant’s affairs, said to have been unfairly prejudicial to his interests as a member. In addition, within the same proceedings, he was given permission to advance a separate claim for damages for unlawful means conspiracy, arising out of the same circumstances. Defendants to Mr Seneschall’s claims included Mr David Marshall (Ms Marshall’s husband), and also a company called Market Fresh Limited (“Market Fresh”), which was wholly owned by NWIG, and which was itself owned by Mr and Ms Marshall.

Substantially, Mr Seneschall’s claims succeeded, and following a split trial, an order was made on 26 April 2024 (“the Final Order”) by which, amongst other things, Mr Marshall and Market Fresh were ordered:

The Final Order also provided that pending the Release, Mr Marshall’s beneficial interests, such as they were, in certain properties which he owned jointly with Ms Marshall (“the Old Rectory Properties”) and in certain shares (which were listed at Annex 1 to the Order), were to stand charged in favour of Mr Seneschall as security for payment of the sum required to satisfy the Release (“the Charging Order”).

As at 26 April 2024 (the date of the Charging Order, and therefore in principle subject to its effect) Mr Marshall held 5% of the shares in Propiteer (“the Marshall Shares”) and - as a result of transfers made very shortly beforehand, on 24 April 2024 - 100% of the shares in PCGN. Also as a result of a transfer made on 24 April 2024 (by NWIG) PCGN held 56% of the shares in Propiteer (“the PCGN Shares”). The Declaration of Trust, said to have been made on the same day, was made in respect of various shares, including the PCGN Shares. The present dispute concerned the Marshall Shares and the PCGN Shares (together, “the Disputed Shares”), in respect of which Ms Marshall has asserted pre-emption rights.

None of the sums due under the Final Order were paid. Accordingly, in June 2024, Mr Seneschall issued a Part 8 Claim for an order for sale in respect of Mr Marshall’s beneficial interests in the Old Rectory Properties and in the charged shares. As the registered joint owner of the Old Rectory Properties, his claim was also commenced against Ms Marshall.

In respect of the shares, relief was granted by ICC Judge Jones on 19 August 2024. He ordered the appointment of a receiver (“the Receiver”), and that the various shares charged in favour of Mr Seneschall - those shares in which Mr Marshall had a beneficial interest - be sold without further reference to the court (“the Share Sale Order”). The claim in respect of the Old Rectory Properties was stayed (pending trial of whether another declaration of trust - in other words, not the Declaration of Trust allegedly made by PCGN in respect of the PCGN Shares) was valid.

Given his various concerns about Mr Marshall’s conduct, Mr Seneschall applied for a Stop Notice pending final agreement of the terms of the Share Sale Order. On 23 August 2024, a Stop Notice was duly issued by the court. Its terms required the directors of the companies listed in Annex 1 to the Final Order to give Mr Seneschall 14 days’ written notice prior to registering any transfer of any relevant shares, or the payment of any dividend or interest in respect of those shares (“the Stop Notice Order”).

On 23 August 2024, Tees Law (Mr Marshall’s solicitors) wrote to the Receiver to provide information regarding the charged shares. In their letter, Tees suggested (for the first time) that the transfer of shares in Propiteer from NWIG to PCGN on 24 April 2024, “… was in fact in breach of pre-emption rights within the articles of Propiteer Limited (see article 11) and will need to be reversed”. Tees also stated thatin respect of the Marshall Shares, “… there will be a deemed transfer notice in accordance with Article 13.1.9 and the shares must be dealt with accordingly”. This heralded the beginning of the present dispute.

It may assist at this point to set out the relevant parts of Propiteer’s Articles of Association. Of particular importance to Ms Marshall’s case, was Article 13.1.5 and 13.1.6, which are highlighted.

ADOPTION OF THE MODEL ARTICLES

SHARE TRANSFERS: GENERAL

In these Articles, reference to the transfer of a share includes the transfer, assignment or other disposal of a beneficial or other interest in that share, or the creation of a trust or encumbrance over that share, and reference to a share includes a beneficial or other interest in a share.

No shareholder shall transfer any share except:

… the directors must register any duly stamped or certified exempt transfer made in accordance with these Articles and shall not have any discretion to register any transfer of shares which has not been made in compliance with these Articles.

Any transfer of shares by way of a sale under these Articles shall be deemed to include a warranty that the transferor sells the shares with full title guarantee.

PRE-EMPTION RIGHTS ON THE TRANSFER OF SHARES

Except where the provisions of article 12 or article 13 or article 15 apply, a shareholder (Seller) wishing to transfer his shares (Sale Shares) must give notice in writing (a Transfer Notice) to the Company giving details of the proposed transfer including:

A Transfer Notice (or Deemed Transfer Notice) constitutes the Company the agent

…

Once given (or deemed to have been given) under these Articles, a Transfer Notice

A Transfer Notice (or Deemed Transfer Notice) constitutes the Company the agent

As soon as practicable following the receipt of a Transfer Notice, the directors shall offer the Sale Shares for sale in the manner set out in the remaining provisions of this Article at the Transfer Price. Each offer shall be in writing and give details of the number and Transfer Price of the Sale Shares offered.

The directors shall offer the Sale Shares to all shareholders other than the Seller (the Continuing Shareholders), inviting them to apply in writing within the period from the date of the offer to the date 28 Business Days after the offer (both dates

…

The restrictions imposed by this Article may be waived in relation to any proposed transfer of Sale Shares with the consent of shareholders who, but for the waiver, would or might have been entitled to have such Sale Shares offered to them in accordance with this Article

COMPULSORY TRANSFERS

Subject to article 12.5 a shareholder is deemed to have served a Transfer Notice under article 11.1 immediately before any of the following events:

The Deemed Transfer Notice has the same effect as a Transfer Notice, except that:

In addition, the Claimants relied on Model Article 27(1) (the Model Articles having been incorporated into Propiteer’s Articles by Article 2) which provides that: “If title to a share passes to a transmittee, the company may only recognise the transmittee as having any title to that share”.

On 10 January 2025, said to have been sent in compliance with the Stop Notice Order, Mr Seneschall received a notice from the Second Defendant, Mr Colin Sandy (“Mr Sandy”), on behalf of Propiteer (“the January Notice”), notifying him of Propiteer’s intention “pursuant to Article 13” to transfer the Marshall Shares and the PCGN Shares (albeit wrongly said to be shares registered in the name of NWIG) to Ms Marshall (as to 66 shares) and Mr Sandy (as to 56 shares).

On 24 January 2025, Mr Seneschall purchased from Mr Marshall (acting by the Receiver) various of the charged shares, including the Marshall Shares, and also his shares in PCGN (comprising the whole of its issued capital), as well as majority shareholdings in the Seventh, Eighth and Ninth Defendants to the present proceedings.

The effect of these (and other) acquisitions was to make Mr Seneschall the direct or indirect owner of majority shareholdings in (amongst others) PCGN and Propiteer.

In light of Propiteer’s stated intention to transfer ownership of the Marshall and the PCGN Shares to Mr Sandy and Ms Marshall (or purport to do so), Mr Seneschall sought undertakings that no such transfer would take place. Undertakings were given, but on condition that Mr Seneschall issued the present proceedings, which he duly did on 12 February 2025, essentially to establish his ownership of the Disputed Shares. On 24 March 2025, a Defence and Counterclaim was filed on behalf of Propiteer, Mr Sandy and Ms Marshall (albeit since withdrawn on behalf of Propiteer and Mr Sandy). As yet, there is no pleaded Reply, or Defence to the Counterclaim. None of the other Defendants have participated (the Seventh to Eleventh Defendants having withdrawn their Defences, and NWIG and its Liquidators having not filed one).

By his (subsequently Amended) Particulars of Claim, in respect of the Disputed Shares, Mr Seneschall stated his case that the provisions of Article 13 have not been engaged. He sought, amongst other things, Declarations that a transfer of the Disputed Shares to Mr Sandy and/or Ms Marshall would be ineffective, and that he was both their legal and beneficial owner. To some extent, that was obviously not correct, since even on his own case, he was and is not the beneficial owner of the PCGN Shares, which are held (on his case) both legally and beneficially by PCGN itself (albeit that Mr Seneschall owns PCGN, and PCGN subsequently became the Second Claimant). Nonetheless, the essential point of his case was made passably clear, that the intended share transfer by Propiteer, as agent, under Article 13, to Mr Sandy and/or Ms Marshall, was or would be invalid.

The Defence and Counterclaim stated, in brief summary, as follows:

In the circumstances, so far as ultimately relevant, claims were made (and are now advanced by Ms Marshall alone) for Declarations:

On 25 March 2025, Propiteer, Mr Sandy and Ms Marshall applied for Summary Judgment, “on the issues relating to Article 13”. Subsequently, Mr Sandy served a Notice of Discontinuance (apparently having come to believe that inadvertently he had been made party to attempts to thwart the enforcement of the various orders made in favour of Mr Seneschall), and on 12 May 2025, he and Propiteer (Mr Seneschall having in the meantime been appointed as a director of Propiteer) withdrew their Defences to Mr Seneschall’s claims. Having said that, I understood that if the court were to find that pre-emption rights continue to be exercisable, as Ms Marshall would have it, then Mr Sandy would at least wish to consider whether to exercise them.

On 21 May 2025, the Claimants (PCGN having in the meantime been added as the Second Claimant pursuant to an order made on 8 April 2025) made their own Application for Summary Judgment, against all of the Defendants, “on the whole of the claim and counterclaim”, including in relation to the Declaration of Trust.

This is my judgment in respect of the Summary Judgment Applications made on 25 March and 21 May 2026.

Before me, the Claimants were represented by Mr James Wibberley and Ms Katrina Mather of counsel; Ms Marshall was represented by Mr Andrew Grantham KC and Mr Callum Reid-Hutchings, also of counsel; and Mr Sandy was represented by Ms Charlotte Mallin-Martin, again of counsel (and albeit that no submissions of substance were made on his behalf, other than to state his agreement with the Claimants’ case on both Applications).

The relevant evidence comprised three witness statements made by Ms Francesca Liebling on behalf of the Claimants, as their solicitor; and two witness statements made by Mr Jonathan Hodge, for Ms Marshall, as her solicitor.

Under CPR 24.3, the Court may give summary judgment on a claim or issue if:

“(a)

it considers that the party has no real prospect of succeeding on the claim, defence or issue; and

(b)

there is no other compelling reason why the case or issue should be disposed of at a trial.”

The phrase “real prospect of success” was explained in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [24], per Lewison J (as he then was). There was no issue between the parties as to the proper approach. In summary:

The interpretation of Propiteer’s Articles was central to the Applications. In respect of the proper approach to that exercise, in Cosmetic Warrior Ltd v Gerrie [2017] EWCA Civ 324, at [19]-[23], Henderson LJ said:

“19.

There is no disagreement between the parties about the principles which the court should apply in construing the articles of association of a company. The articles are a statutory contract between the members, and between each member and the company. They must therefore be construed in accordance with the ordinary principles that apply to the interpretation of any written contract. Those principles have been discussed and refined in many cases at the highest level, to which it is unnecessary to make detailed reference.

20.

Like the judge, I find it helpful to refer to the approach endorsed by Lord Neuberger PSC in Arnold v Britton [2015] UKSC 36, [2015] AC 1619, at [15] (omitting citations):

"When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to "what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean", … And it does so by focusing on the meaning of the relevant words … in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provision of [the contract], (iii) the overall purpose of the clause and the [contract], (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party's intentions."

21.

More recently, in Wood v Capita Insurance Services Limited [2017] UKSC 24, [2017] 2 WLR 1095 … the Supreme Court has confirmed that the principles of contractual interpretation stated in Arnold v Britton did not involve any departure from the guidance previously given by the Supreme Court in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900: see the judgment of Lord Hodge JSC (with whom the other members of the court agreed) at [8] to [15].

22.

With reference to the "unitary exercise" of interpretation referred to by the Court in both Arnold and Rainy Sky, Lord Hodge said this:

"12.

This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated: the Arnold case, para 77 citing In Re Sigma Finance Corpn [2010] 1 All ER 571, para 12, per Lord Mance JSC. To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each.

13.

Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation. Rather, the lawyer and the judge, when interpreting any contract, can use them as tools to ascertain the objective meaning of the language which the parties have chosen to express their agreement. The extent to which each tool will assist the court in its task will vary according to the circumstances of the particular agreement or agreements."

In respect of a company’s articles - and in that context, pre-emption provisions - the usual process of contractual interpretation is subject to three further considerations.

Because articles are contractual, the rights created are capable of being waived. As to the circumstances in which waiver may occur, in Delta Petroleum (Caribbean) Ltd v British Virgin Islands Electricity Corpn [2020] UKPC 23, at [18]-21], Lord Leggatt said:

“18 There is no dispute about the legal principle. As stated by Lord Diplock in Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971]AC 850, 883, waiver by election arises:

“in a situation where a person is entitled to alternative rights inconsistent with one another. If he has knowledge of the facts which give rise in law to these alternative rights and acts in a manner which is consistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be the legal consequence of what he did.”

19 Lord Goff of Chieveley further explained the principle in Motor Oil Hellas (Corinth) Refineries SA v Shipping Corpn of India (The Kanchenjunga) [1990] 1 Lloyds Rep 391, 398, where he said:

“Election itself is a concept which may be relevant in more than one context. In the present case, we are concerned with an election which may arise in the context of a binding contract, when a state of affairs comes into existence in which one party becomes entitled, either under the terms of the contract or by the general law, to exercise a right, and he has to decide whether or not to do so. His decision, being a matter of choice for him, is called in law an election . . . In particular, where with knowledge of the relevant facts a party has acted in a manner which is consistent only with his having chosen one of the two alternative and inconsistent courses of action then open to him for example, to determine a contract or alternatively to affirm it he is held to have made his election accordingly … [An election] can be communicated to the other party by words or conduct; though, perhaps because a party who elects not to exercise a right which has become available to him is abandoning that right, he will only be held to have done so if he has so communicated his election to the other party in clear and unequivocal terms … Once an election is made, however, it is final and binding …”

20 More recently, in Kosmar Villa Holidays plc v Trustees of Syndicate [2008] Bus LR 931, para 38, Rix LJ said:

“[Election] generally requires knowledge of the facts giving rise to the choice on the part of the party electing, and knowledge of the choice having been made on the part of the other party. Those are the conditions which make the doctrine mutually fair. It typically arises where the parties to a contract have to know where they stand. Thus the choice has either to be communicated unequivocally by the party electing to the other party or else the objective circumstances have to be such that the effluxion of time by itself constitutes that communication. Since the election is the choice of the party electing, it is his conduct which is decisive. Once made the election is final and irrevocable.”

21 The principle of waiver by election is not needed to explain why a decision to terminate a contract, once communicated, is final and irrevocable. A valid termination has the legal effect of discharging both parties (from then on) from their obligations under the contract. Those obligations could only be reinstated by making a new contract. But the principle is needed to explain why a party who communicates unequivocally an intention to continue with performance thereby loses the right to terminate the contract (in so far as the right was based on facts then in existence and known to the electing party). What is fundamental to the principle of waiver by election and crucial for present purposes is that it is only capable of applying where a choice must be made between two alternative and inconsistent (in the sense of mutually exclusive) courses of action, such that adopting one of them necessarily entails forsaking the other.”

Finally, in respect of a member’s power to transfer their shares, and the power of a company’s directors to register and recognise such a transfer (see for example, Re Coroin Ltd [2013] EWCA Civ 781 at [88]-[91], [138]-143] and [[162]-163]):

As stated, in respect of the Marshall Shares, Ms Marshall relied on the provisions of Article 13.1.6, which provided for deemed service of a Transfer Notice, on “any step being taken by any person to appoint a receiver, administrative receiver or manager in respect of the whole or a substantial part of the assets or undertaking of the shareholder or any other company in the shareholder's Group”.

The event or events said to have engaged that provision were pleaded to have been the “steps taken toward obtaining the Charging Order (including the application and proceedings leading to the order made on 26 April 2024)”, and in the first statement of Mr Hodge, were said to have been, “The application for the Charging Order and the proceedings leading to it … as they were directed toward the eventual appointment of a receiver to realise the charged assets”.

As to this, on Ms Marshall’s behalf, it was submitted that Article 13.1.6 was broad enough (and deliberately so) to encompass the earliest stages of enforcement proceedings directed towards the ultimate appointment of a receiver, not merely the actual appointment itself; that the application for the Charging Order was directed at the eventual realisation of Mr Marshall's assets, and that there was no realistic route to realisation other than a receivership; and that accordingly, the proceedings that led to the appointment of the Receiver on 19 August 2024, were merely the natural and foreseeable continuation of a process that had begun before then, with the application for the Charging Order made on 26 April 2024. Thus it was said that the application and Order, foreseeably causative of the eventual appointment, fell within the scope of the expression in Article 13.1.6, “any step being taken … to appoint a receiver".

On behalf of the Claimants, the following four points were made:

In my judgment, properly understood, Article 13.1.6 was not engaged by the fact of Charging Order, or by the application for the Charging Order, let alone by the proceedings before then, or any step taken in the course of those proceedings.

To my mind, as a matter of ordinary language, the reference to a step taken to achieve an appointment contemplated an act specifically directed at the achievement of that outcome, not merely some part of the background, or history, objectively capable of leading at some point, in the event of certain future circumstances, to an application for an appointment, or to the appointment itself. That conclusion is consistent with the principles explained above at paragraph 28.3: a share is a item of personal property, prima facie freely transferable; any provision in the Articles which restricts that freedom, or has an expropriatory effect (such as Article 13), must therefore do so with clarity; there is good reason not to give such provisions an excessively generous, expansive or indeed uncertain meaning. In the circumstances of the present case, the relationship between the Charging Order and the eventual appointment was too remote; it was simply insufficient to allow the court to characterise the Order as a relevant “step”. In my judgment, Mr Seneschall took no such step until he acted on the invitation of the Judge on 19 August 2024 (at the hearing of proceedings which he had commenced on 24 June 2024, but in which no appointment had been explicitly sought).

However, although not such as to affect my conclusion, I do not accept the other arguments advanced on behalf of Mr Seneschall.

First, the expression “… the shareholder or any other company in the shareholder's Group”, is found within Article 13, at each of 13.1.3 – 13.1.8. In certain of those provisions (for example, 13.1.3, which refers to “a resolution for … liquidation”), the expression could only ever, in practice, apply to a company, because the relevant triggering event could only ever occur in relation to a company; in others (for example, 13.1.7, which refers to a person “being unable to pay its debts as they fall due for the purposes of section 123 [of the Insolvency Act 1986, which defines a company’s inability to pay debts for the purposes of winding-up] or section 268 [of the Insolvency Act 1986, which refers to a natural person’s inability to pay for the purposes of bankruptcy]”, the same expression must be capable of applying to both companies and natural persons.

It follows that the expression itself (which in my view, must be taken to mean the same thing within each part of the Article) is to be understood as meaning, “… the shareholder (whether a natural person or a company) or (if the shareholder is a company) any other company in the shareholder's Group”.

Accordingly, whether a provision within Article 13.1 has been engaged depends on whether the stated triggering event has occurred, not on the nature of the shareholder (albeit that certain triggering events will only ever occur, or be capable of occurring, in relation to one or other type of person). In the case of Article 13.1.6, the triggering event is “any step being taken by any person to appoint a receiver, administrative receiver or manager in respect of the whole or a substantial part of the assets or undertaking” of a relevant person. Regardless of the nature of that relevant person (and whilst no doubt Article 13.1.6 will more usually apply in the case of a company), if that event occurs, the provision will be engaged.

Second, the fact that Article 13.1.9 specifically excluded as a qualifying event, the appointment of a receiver for the purposes of enforcing a charge created over any shares, is not relevant. The fact that circumstances fall outside Article 13.1.9 does not mean that they necessarily fall outside Article 13.1.6; the provisions are different but perfectly consistent; they apply in different circumstances; they are cumulative and complementary; if anything, the construction advanced on behalf of Mr Seneschall would tend to undermine the meaning and effect of Article 13.1.6. Article 13.1.9 refers to the enforcement of a charge other than by the appointment of a receiver, administrative receiver or manager (for example, by sale), whereas Article 13.1.6 refers to a step taken to appoint “a receiver, administrative receiver or manager in respect of the whole or a substantial part of the assets or undertaking”. I note that in the present case, there was not, as such, any evidence as to whether the charged shares comprised “the whole or a substantial part of the assets or undertaking” of Mr Marshall’s assets, although that was not a point pressed with any particular force.

In conclusion therefore, in my judgment, in respect of the Marshall Shares, Ms Marshall was not entitled to rely on Article 13.1.6.

In relation to the PCGN Shares, Ms Marshall relied on the provisions of Article 13.1.5, which were undoubtedly engaged, automatically, on and by virtue of the administration of Fletton Quays on 16 October 2023. It was common ground that Fletton Quays was a company in the same group as NWIG, and was therefore common ground that under Article 13.1, NWIG was deemed, immediately before that event, to have served a Transfer Notice on Propiteer.

On 24 April 2024, in a manner which was, according to Ms Marshall’s own pleaded case, “in accordance with the powers and duties of the directors of Propiteer and in compliance with the Articles and applicable company law”, the PCGN Shares were transferred to PCGN by NWIG; the transfer has been registered, and PCGN entered into the register of members.

On 10 January 2025, the January Notice was sent, on behalf of Propiteer, notifying Mr Seneschall of Propiteer’s “intention”, “pursuant to Article 13”, to transfer the Disputed Shares to Ms Marshall and Mr Sandy. As I have said, on 24 January 2025, Mr Seneschall purchased, through the Receiver, various of the charged shares, including the Marshall Shares, and Mr Marshall’s shares in PCGN; the PCGN Shares have not therefore been transferred since 24 April 2024, and neither was there any evidence of Ms Marshall (or Mr Sandy) having sought to accept an offer to buy the shares (whether said to have been comprised in the January Notice or otherwise).

On behalf the Claimants, the following submissions were made.

It was common ground that the administration of Fletton Quays automatically triggered a deemed Transfer Notice under Article 13.1.5 in respect of the PCGN Shares, at that time held by NWIG. That Notice constituted Propiteer the agent of NWIG for the sale of the PCGN Shares, and by virtue of Article 11.4, could not be withdrawn (by NWIG).

Following receipt of that Notice (or in the present case, its deemed receipt), Propiteer’s directors were under an obligation, under Article 11.6, as soon as practicable, to offer the Shares for sale (in writing) to the company’s other shareholders, including Ms Marshall. In my judgment however, that step was never taken. In particular, the January Notice was not a compliant offer, because:

Had Propiteer’s directors taken the step mandated by Article 11.6 (had they complied with their obligation to make a written offer for sale of the Shares) then, in summary, following that initial offer:

As I have said, none of that happened, giving rise the following issues.

First, what was the nature of Ms Marshall’s rights as at the moment of the deemed Transfer Notice, and how might those rights have been enforced or protected?

Propiteer’s Articles comprise a contract to which Propiteer and its members are parties. Prima facie, an individual shareholder can bring an action to enforce compliance with a company’s articles, restrain any proposed breach of their terms, or seek a declaration that any action based on such a breach is invalid. For example, where a shareholder is, or is entitled to nominate, a director and that director has been wrongfully excluded by other shareholders, the shareholder or director can obtain injunctive relief (see Pulbrook v Richmond Consolidated Mining Co (1878) 9 Ch. D. 610 Ch D); a minority shareholder can bring proceedings to set aside an improper allotment of shares (see Choudhary v Bhattar [2009] 2 B.C.L.C. 108 at [24]–[28] (reversed on other grounds [2010] 2 B.C.L.C. 17)); and in Rayfield v Hands [1960] Ch. 1 Ch D, the company’s articles required the shareholder/directors to purchase an outgoing member’s shares, and the court held that it would, if necessary, make an order for specific performance in favour of the latter against the former.

Accordingly, as at 16 October 2023, Ms Marshall and the other continuing shareholders would no doubt each have had a substantive right to compel Propiteer by its directors (had they refused to do so) to act in compliance with the share pre-emption provisions, and to offer the PCGN Shares to them, for sale; in principle, had they refused to do so (and given the unique subject-matter of the obligation), the court could have made appropriate orders for specific performance; similarly, by injunction, the court could no doubt have prevented a threatened transfer of the PCGN Shares to a third party in breach of (or without regard to) the continuing shareholders’ rights. It would be surprising were it possible to defeat rights of that sort simply by means of a transfer of the Shares to another person, regardless of that person’s knowledge and the terms of the transfer.

There was however some dispute as to whether, in those circumstances, the continuing shareholders acquired (immediately, as at the moment of the deemed Transfer Notice) a vested equitable interest in Propiteer’s shares, or in some of them; alternatively a “mere equity”; alternatively, nothing more than purely personal rights.

In his further written submissions following the hearing, Mr Grantham argued that Ms Marshall had acquired, immediately as a result of Fletton Quays’ administration:

Snell's Equity (35th ed.) at §2-006 explains the familiar distinction between a full equitable interest and a "mere equity": a mere equity is an inchoate right binding on specific property, which gives the holder no beneficial interest unless and until a further legal act causes it to crystallise. The classic examples are rights to rescind for misrepresentation or to seek rectification. Importantly, a mere equity may be postponed to a later equitable interest acquired by a bona fide purchaser for value without notice, whereas a prior equitable interest takes priority over a later equitable interest, even if acquired in good faith and for value. Both equitable interests and equities are defeated by a transfer of the legal title (as of the PCGN Shares to PCGN, now registered as a member of Propiteer) to a bona fide purchaser for value without notice.

The Applications before the court were for summary judgment. There has not been disclosure or oral evidence, and the court cannot conduct a “mini-trial”. Accordingly, in my judgment:

What has become of those rights, if anything?

First, in the circumstances, as I have said, I cannot conclude, on these Applications, that by virtue of the transfer to PCGN, Ms Marshall’s equitable rights in respect of the Shares (whatever their nature or extent) were defeated, because I cannot reach conclusions about PCGN’s knowledge and bona fides.

Moreover, leaving aside the nature of Ms Marshall’s rights, it was in any event far from clear to me that the share transfer by NWIG to PCGN, and PCGN’s consequent registration as a member of Propiteer, were permissible under Propiteer’s Articles, and (on the principles explained above at paragraph 30) had the effect of vesting beneficial ownership of the Shares in PCGN.

Second, neither can I conclude that Ms Marshall’s rights have been waived. She was not a director of NWIG or of Propiteer; there was no evidence about her knowledge of her pre-emption rights, or even of Fletton Quays’ administration. As explained above, waiver by election requires knowledge of the relevant facts and the relevant legal right, and an unequivocal act inconsistent with the exercise of that right; it requires the election to have been communicated in clear and unequivocal terms. On these Applications, I cannot find that those requirements were met.

Third, Ms Marshall’s rights were (and were the product of) substantive rights under the Articles – in essence, she had a right to receive an offer to buy shares, and to accept it. The Articles do not provide for those rights to “lapse” simply as a result of the company’s directors’ failure to make an offer, combined with the passage of time (without reference for example, to the shareholders’ knowledge of their rights); neither was I referred to any contractual or other doctrine or principle said to support that result (even less so given my view of their proprietary nature). Moreover, there is no real need or justification for any such principle, given the possibility of waiver (and the limits of that principle, designed to do justice between the parties, and provide certainty). Although Propiteer’s directors were under an obligation to make an offer “as soon as practicable”, the effect of their failure to do so was that Propiteer was, potentially, in breach of its obligations under the Articles; the effect of that breach was not to extinguish the continuing shareholders’ substantive rights (before in principle they had even come to know of them); on the contrary, the breach entitled the shareholders to a remedy.

Fourth, for similar reasons, I cannot see any justification for the implication of a term to similar effect, that after some time, the continuing shareholders’ rights would be lost (or indeed, conceive an implied term of sufficient specificity). Mr Wibberley relied on the fact of there having been numerous past qualifying events under Article 13, and the confusion and complication that might arise from the fact (as apparently in the present case) that no offers were made as a result of those events at different times (potentially to different groups of shareholders). Whilst I acknowledge that some such complication might have arisen, the answer lies, in my judgment, in the application of orthodox doctrines of, for example, waiver, limitation, estoppel, and a consideration of the rules as to priorities. Furthermore, the fact of those prior events (and the possibility of other parties’ rights) is an additional reason not to give summary judgment.

In conclusion, in relation to the PCGN Shares, neither Application succeeds: I cannot safely conclude either that those Shares vest (beneficially) in PCGN, or (beneficially) in Ms Marshall, or even (beneficially) in NWIG; I cannot determine the priority of the parties’ rights, and I cannot determine whether Ms Marshall’s right to compel an offer to buy the Shares, subsists. On the present Applications, all that can be said is that legal title vests in PCGN, which is currently a member of Propiteer.

On its face, the Declaration of Trust purports to have been made (and signed by Mr Marshall) on 24 April 2024, by PCGN in favour of NWIG, in respect of the PCGN Shares (transferred to it by NWIG on the same day) and also in respect of certain shares in the Seventh, Eighth and Ninth Defendants. Its apparent effect was to declare that PCGN was a nominee with no beneficial interest in any of the shares.

PCGN is now, as I have explained, the Second Claimant. The proceedings have not been defended by NWIG, and the Seventh-Ninth Defendants have withdrawn their Defences. On behalf of Ms Marshall, no positive case was advanced in respect of the Declaration of Trust – her case was that she had pre-emption rights which pre-dated both the share transfer to PCGN and the Declaration of Trust, and which were therefore unaffected by either.

Accordingly, the Claimants’ case in respect of the Declaration of Trust was wholly unopposed by NWIG (the apparent beneficiary), and positively advanced by PCGN (the apparent trustee/nominee); it was not opposed by anyone. The Claimants’ case was that the Declaration was not signed until about 1 May 2024, after NWIG had gone into liquidation, and after the Charging Order had been made, on 26 April 2024; furthermore, that it was deliberately and dishonestly backdated, as one of a number of steps taken by Mr Marshall (who is not party to these proceedings, and from whom there was no evidence) in order to escape the consequences of the relief granted against him in the unfair prejudice proceedings, and render Mr Seneschall’s success, less valuable; in other words, that it was false document.

The Claimants thus sought declaratory relief to the effect that the Declaration of Trust was “invalid, a sham and/or otherwise unenforceable”, and if necessary, relief under section 423 of the IA 1986. On their behalf, Mr Wibberley submitted that in the circumstances (despite being the subject of a summary judgment application), the position was more akin to an application for default judgment. In that respect, as to the Court’s approach, he relied on the decision of Michael Green J in Ras Al Khaimah Investment Authority v Farhad Azima & Others [2023] EWHC 2108 (Ch) at [11] to [14]. At [13], the judge said:

“(ii)

Even if the relevant conditions are satisfied, the court should not grant a default judgment if there is material before the court at the hearing of the application which would justify setting such a judgment aside.

(iii)

If there is no such material, the court should proceed to determine what remedy (if any) the claimant is entitled to on the statement of claim. For this purpose, the court will treat the allegations made in the statement of claim as true and legally valid unless (and to the extent that) it appears to the court that the statement of claim does not disclose any reasonable ground for bringing the claim or is an abuse of the process of the court."

In the present case, there was no opposition, and I accept that the unchallenged evidence (and stated case) supported the conclusion that the Declaration was signed by Mr Marshall on about 1 May 2024, as part of effort to put assets beyond Mr Seneschall’s reach. In particular:

In the circumstances, the Claimants are entitled to a declaration that the Declaration of Trust is invalid, and unenforceable.

Overall, for the reasons that I have explained, my conclusions are as follows.