Guy’s & St Thomas’ NHS Foundation Trust & Anor. v ESMS Global Limited & Ors.

This is an application by the Second to Seventh Defendants to strike out the claim against them and/or for reverse summary judgment. The application was made on 21 September 2021 although it was not ultimately listed for hearing until 11 October 2022.

On 5 October 2022, the day on which the applicants’ skeleton argument was due to be served, and 11 months after evidence in relation to the application had been exchanged, the Claimants served proposed draft Amended Points of Claim. At just after 1600 the same day, the Second to Seventh Defendants were notified that an application to amend had been issued, albeit not served, and that I would be asked to determine both applications at the forthcoming hearing.

On behalf of the Second to Seventh Defendants, Mr Lance Ashworth KC (who appeared with Mr Gregor Hogan) complained vociferously (and with no little justification) about the lateness of the application generally and, specifically, about short service in breach of the CPR which gave his clients no opportunity to file evidence in response. He therefore objected to any suggestion that I should determine the amendment application.

This led to a lively debate as to whether I could hear the strike out application in isolation without reference to the proposed amendments at all and, if not, whether I should adjourn both applications (a course to which Mr Ashworth objected) or whether it was possible to find a way of proceeding which enabled the court to make some headway but preserved the Second to Seventh Defendants’ right to object to the proposed amendments.

In the event, counsel indicated that they were content to proceed with the strike out application on the basis that both the original Points of Claim and (de bene esse) the Amended Points of Claim were in play. If the Second to Seventh Defendants persuaded me that the Claimants’ case raised no arguable issue of law, or had no real prospect of success on the basis of the evidence adduced, that would be the end of the matter since the claim would be struck out on either basis and the amendment application would simply fall away. If, on the other hand, I were to hold that (i) the strike out application failed – but only in relation to the Amended Points of Claim and (ii) the Claimants had adduced sufficient evidence to make out a more than fanciful case to support the amendments, then the amendment application would remain live and the Second to Seventh Defendants would need to be given an opportunity to consider whether or not to object to it. It was accepted by both parties that nothing I decided could bind either the First or Eighth Defendants. This, therefore, is the basis on which I have approached the matter.

I was referred by Mr Patrick Talbot KC (who appeared with Ms Zahler Bryan (albeit remotely in her case) and Mr Max Marenbon on behalf of the Claimants) to the Court of Appeal decision in Sofer v SwissIndependent Trustees SA, [2020] EWCA Civ. 699 in support of the proposition that there was in fact no need for the court to look at the factual basis of the claim since for the purposes of a strike out application, the pleaded facts must be assumed to be true. In that case, the application to strike out was brought solely under CPR Part 3.4(2) on the basis that the statement of case disclosed no reasonable grounds for bringing the claim. It was common ground that on that type of application, the pleaded facts must be assumed to be true. However, as Arnold LJ pointed out at paragraph 44:

In the present case, of course, the application is not limited solely to striking out pursuant to Part 3.4(2)(a) but includes an application for summary judgment on the grounds that the claim has no real prospect of success. In KKK Ltd v James Kemball Ltd, [2021] EWCA Civ. 33 at [18], the Court of Appeal clarified that the same test applies to both applications for summary judgment and applications to amend and that:

I therefore accept the submission of Mr Lance Ashworth KC that I am not precluded from examining the factual basis of the claim; indeed, for the purposes of the summary judgment application I am not only entitled but also bound to consider the extent to which the pleaded case and, in particular, the draft amendments, are supported by the evidence adduced. If I conclude that the Claimants’ evidence does not establish a sufficiently arguable case that the pleaded allegations are correct, then that is a basis upon which I can properly strike out the claim and/or give summary judgment even if it is otherwise legally coherent. (Footnote: ¹) I do not accept that it is sufficient in this respect for the Claimants to point to the mere fact that their pleadings are attested by a statement of truth. If that were so, then the test in KKK would be satisfied in every case. Moreover, while a statement of truth may technically have the effect of making a pleading evidence of its contents, in this particular instance it was signed by the Claimants’ legal representative. It is therefore not first-hand testimony and cannot in my judgment prevail where it is not supported by the statements of the relevant witnesses themselves.

In this respect, I also bear in mind that the strike out application was issued as long ago as 17 September 2021 and that exchange of evidence was completed by the end of November 2021. The Claimants have therefore had ample time not only to issue the amendment application but also to adduce any further supporting evidence had they so wished. In the event, they have chosen to rely only on the evidence served in October 2021. Given the lapse of time, they should in my judgment be held to that, and if I conclude that there is insufficient evidence before me to support the proposed amendments, it would be unfair to the Defendants for me to reject their application on the speculative basis that further evidence might nonetheless be forthcoming in the future.

The First Claimant (“GSTT”) is the well-known Guy’s & St Thomas’ Hospital Trust. The Second Claimant, Mrs Fitzgerald, is a former employee of GSTT and currently the General Manager of the First Defendant (“ESMS”) and leader of its management team. The Second and Third Defendants, Mr Sood and Mr Webster, are directors of ESMS. The Fourth and Fifth Defendants are their respective wives and, since 2018, also directors of the company. The Sixth and Seventh Defendants are companies affiliated to Mr Sood and Mr Webster. The Second to Seventh Defendants collectively are the majority shareholders in ESMS.

The Eighth Defendant (“Trident”) is a Guernsey-based trust company which is the trustee of an Employee Benefit Trust (the “EBT”) which was established by ESMS in the circumstances described in more detail below.

Prior to 2010, GSTT operated a specialised business providing healthcare services to the pharmaceutical and veterinary industries. In about 2010, it concluded that it was not in a position to run this business at a profit consistently with its charitable objectives and accordingly started to look for a buyer.

In 2011, an offer was received from Ivy Partners Ltd (“IPL”), a company owned and controlled by Mr Sood and Mr Webster, for the business to be purchased by a special purpose vehicle yet to be incorporated. On 26 August 2011, ESMS was incorporated as the purchasing company, of which Mr Sood and Mr Webster were the initial shareholders and directors.

GSTT was concerned about the position of its existing employees who worked for the business since Mr Sood and Mr Webster had indicated that they were not prepared to accept a TUPE transfer. Accordingly, any employees who agreed to transfer to the new owning company would be relinquishing valuable benefits, including the right to participate in a defined benefit pension scheme. In the event, it was agreed in the circumstances set out in more detail below that (to put it as neutrally as possible), 20% of the equity of ESMS would be put into an employee benefit trust instead so as to provide a compensating long-term incentive.

On 30 September 2011, GSTT and ESMS concluded a Business Purchase Agreement (the “BPA”) whereby the business was sold to ESMS. The BPA included an obligation to establish the EBT (the “EBT Obligation”) within a stipulated timescale. (Footnote: ²) It is common ground that ESMS did not fully comply with the BPA in this regard. However, any claim against ESMS for breach of contract seems likely to be long since time barred, although that is not an issue which arises on this application.

The present claim was issued on 30 July 2021 – nearly 11 years after the sale of the business and 10 years after the EBT should have been established. In it the Claimants seek to avoid the application of any time bar by:

The proposed Amended Particulars of Claim further particularise these causes of action and also raise a wholly new case of proprietary estoppel which is said independently to support the imposition of a constructive trust.

The thrust of Mr Ashworth’s submissions on behalf of the Second to Seventh Defendants is that the Claimants’ only claim lies against either the First Defendant for breach of contract, or against the Eighth Defendant for breach of its duties as trustee. In so far as they now seek, very belatedly, to pursue the Second to Seventh Defendants, he submits that the whole exercise is an impermissible attempt to pierce the corporate veil which is doomed to fail both on the original Particulars of Claim and on the Amended Particulars of Claim.

By contrast, Mr Talbot on behalf of the Claimants sought to persuade me that any decision to strike out the claim was not a pure question of law but turned on factual matters as to which there were (at least if the amendments were allowed) serious issues to be tried.

The following is intended to be a non-contentious summary of the factual background in so far as it appears from the documents which have been put before me. I will have to consider below the extent to which the Claimants’ case is supported by the evidence, and in particular by its witness evidence, so as to raise triable issues of fact.

Mr Sood and Mr Webster first became aware of the opportunity to purchase the business in 2010. At that time, they were the sole shareholders and directors of IPL which they had jointly established as an investment vehicle. On 1 April 2011, Mr Webster wrote to Mr Scarborough (the Defence Contracts Controller of GSTT) on IPL headed notepaper setting out a proposal for the acquisition of the business. The letter commenced by setting out the background to the formation of IPL and the reasons why “the experience within Ivy Partners team represents a unique fit with the requirements of the MTIS opportunity”. The proposal itself provided for a new company to be formed by IPL to develop the business and for IPL to provide initial capital by cash investment in the company.

At this stage a TUPE transfer of the existing staff was contemplated. However, the business was not profitable, and the financial implications of a TUPE transfer were such that Mr Sood and Mr Webster were unwilling for the purchase to proceed on that basis. On 29 June 2011, an internal email discussion took place between Mr Scarborough and Mr Hugh Risebrow, GSTT’s Commercial Director, in which Mr Risebrow stated that:

By email dated 18 July 2011, Mr Webster emailed Mr Nuttall of Field Fisher Waterhouse LLP (“FFW”), who had been retained at GSTT’s expense to provide independent legal advice to the employees of the business, confirming on a without prejudice basis that:

This email was copied to Mr Scarborough who informed Mr Nuttall the following day that GSTT was happy for him to progress the proposal in line with the wishes of the staff. On 20 July 2011, Mr Nuttall replied to Mr Webster, raising a number of questions on behalf of the employees, including questions as to how any share option scheme would work as compared with a trust arrangement, and as to any changes in employment terms.

On the same day, Mr Webster emailed Mr Risebrow to inform him that:

In an internal email from Mr Risebrow sent on 21 July 2011 and probably triggered by Mr Webster’s email, Mr Risebrow commented as follows:

On 27 July 2011, Mr Warren of FFW emailed Mr Sood and Mr Webster (with copies to Mrs Fitzpatrick and Mr Scarborough) setting out certain key concerns of the staff in relation to their employment terms and conditions. He also stated:

It appears that a meeting then took place with the staff on 28 July 2011, following which Mr Sood emailed Mr Warren and Mr Nuttall on 29 July 2011 (again with copies to Mrs Fitzpatrick and Mr Scarborough) recording that the employee group would prefer a trust option notwithstanding that they might incur individual tax losses as a result. He continued:

On 26 August 2011, ESMS was incorporated for the purpose of acquiring the business. Its original name was Medical Toxicology and Information Services Ltd, but its name was changed by resolution on 20 January 2017. I will refer throughout this judgment to it as ESMS.

The BPA was concluded on 30 September 2011. GSTT and ESMS were the only parties to the BPA, which contained the following material terms:

Schedule 6 to the BPA enshrined the EBT Obligation in the following terms:

It is to be noted that:

On 26 April 2012, Mr Sood emailed from his IPL email address to enquire whether GSTT wished to be involved in the establishment of the EBT “as per the BPA we have a few requirements to meet.” He asked whether GSTT would be appointing a firm of solicitors to look at it from the trust end and said that “we have actually asked Cripps, FFW and Bird and Bird to quote so just want to make sure we are cleanly complying with the BPA.” Mr Scarborough replied that he needed to remind himself of the BPA details but would get back to him, which he duly did the following day stating that it would be helpful if he could see an execution copy of the EBT before and after signature but that he did not believe GSTT needed any further involvement beyond that.

In May 2012, Mr Sood and Mr Webster gave a “Business Overview” presentation to explain the current position and future direction of the company. The slides of the presentation show that assurances were given that:

On 26 June 2012, Mr Sood sent what was described as a final version of the proposed EBT deed to Mrs Fitzpatrick and Mr Scarborough (amongst others), again from his IPL email address. He highlighted certain areas to consider, including the identity of the individuals who would be trustees. He said that Cripps Harries Hall, who had drafted the deed on behalf of ESMS, would be attending a company meeting that week and could answer any questions on the legal side. He also stated that as per the BPA they would be providing a copy of the EBT to GSTT and that they had followed the requirements contained in the BPA.

In their evidence neither Mrs Fitzpatrick nor Mr Scarborough can specifically recall receiving this email but do not positively aver that they did not. They each speculate that they would not have read the attached draft EBT deed at that stage but would have waited until actually asked to sign something, at which point Mrs Fitzpatrick says that she would have sought advice either from GSTT or FFW.

In the event, it seems that during a conversation with Mr Webster on 28 June 2012, Mrs Fitzpatrick said that most of the questions from the employees at the meeting would be basic. Mr Sood and Mr Webster therefore decided that they would deal with these themselves without the need for attendance by Cripps Harries Hall and on 29 June 2012, Mr Sood asked Cripps Harries Hall to send him some flyers containing basic information about EBTs which he could make available at the meeting later that day.

On 24 July 2012, Mr Sood confirmed to Cripps Harries Hall that no further changes to the EBT had been requested by the management team and that the last version of the deed was therefore the final one. At this stage, the prospective trustees included both Mrs Fitzpatrick and Mr Scarborough.

During the course of August 2012, further steps were taken towards establishing the EBT but in the event, this never happened. According to Mr Sood’s witness statement, ESMS took further tax advice in relation to the EBT in mid-2013 and were told that it might be more efficient for the trust to be administered offshore. Following this, Mr Sood and Mr Webster were introduced to Trident as a potential trustee based in Guernsey and by email dated 3 February 2014, Mr Sood asked Cripps Harries Hall to look at the necessary revisions which would need to be made to the existing documentation in order to establish an offshore trust.

A draft deed was sent to Trident in April 2014 and it is clear that by May 2014 Mr Sood and Mr Webster were becoming frustrated at the lack of progress. In June 2014, a number of exchanges took place between them and Trident discussing the draft EBT deed, in which Trident confirmed that they held full due diligence documentation but needed to see a copy of any relevant tax advice received by ESMS before agreeing the final terms.

Throughout June 2014, further correspondence took place between Mr Sood and ESMS’s tax advisors, Kingston Smith, in relation to the latter’s formal tax advice. In an email dated 24 June 2014, Mr Sood stated that:

On 30 June 2014, following a meeting with Kingston Smith, Mr Sood further set out his understanding of the amount of equity to be provided to the EBT, including the following. Kingston Smith’s comments in response are shown in bold.

Kingston Smith’s final letter was issued on 4 July 2014 and included the following salient points:

The Kingston Smith letter was provided to Trident as proposed trustee of the EBT. It is in dispute whether Trident was also provided with a copy of the BPA, albeit the letter clearly referred to the BPA.

The EBT was finally established by deed concluded between ESMS and Trident dated 18 August 2014. It is common ground that it was a fully discretionary trust as to both capital and income and was governed by Guernsey law. Clause 4 had the effect of excluding Mr Sood and Mr Webster from any benefit under the trust. Further material provisions included:

Thereafter, however, a concern arose on the part of ESMS as to whether an EBT was necessarily the best or most tax efficient way of passing shares to employees. On 4 November 2014, Mr Sood emailed Mr Scarborough (with a copy to Mrs Fitzpatrick) informing him that they had run into a problem with the UK tax authorities in relation to the EBT and that they wished to replace it with normal Employment Management Incentive (“EMI”) options. He stated that there would be no change from the staff perspective as they would be receiving option agreements from ESMS rather than benefits under the trust and sought confirmation that “no issues from you [sic] end with this”.

By email dated 11 November 2014, Mrs Fitzpatrick replied directly to Mr Sood asking to be provided with all the documents so that she could consider the matter. In particular, she enquired whether any changes to Schedule 6 to the BPA were proposed. Mr Sood replied the same day stating that there was no proposal to change the BPA which had, in any event, been executed and so could not be altered. He told Mrs Fitzpatrick that the trust had been asked to allow the EMI “as the grant mechanism” and that therefore the only change would be that the EMI contract would be granted directly by ESMS rather than the trust. Mrs Fitzpatrick was also sent a copy of the signed EBT deed.

Discussions then took place with the management team (including Mrs Fitzpatrick) regarding the possible benefits of establishing an EMI scheme. What was proposed was in essence a share option scheme, under which ESMS could grant an option to an individual employee over a specific number of shares and then request Trident to fulfil the option if it were exercised. In this way, the employee acquired rights in relation to specific shares which he or she did not currently possess (having only a right to be considered for distribution under the discretionary EBT).

On 1 December 2014, Mr Sood sent both Mr Scarborough and Mrs Fitzpatrick copies of the proposed EMI scheme rules and a sample option agreement. Mr Scarborough responded on 8 December 2014 as follows:

On 8 December 2014, Mr Sood emailed Mr Scarborough setting out his understanding of what was required from a GSTT perspective to approve the EMI scheme. This included a Board Minute confirming allocation of up to 20% of the share capital of ESMS for the benefit of employees. Mr Sood asked for confirmation of these requirements and for a draft wording for the proposed board minute.

The following day, Mr Scarborough responded as follows:

Further exchanges then took place between Mr Sood and Mr Scarborough over the ensuing days in which Mr Sood confirmed that the EBT had in fact been established but stated that HMRC would not allow the transfer of any shares to it. All the exchanges between Mr Sood and Mr Scarborough over this period were copied to Mrs Fitzpatrick.

On 12 December 2014, Mr Scarborough sought advice from Helen Down of Bird & Bird. Ms Down advised that since Mr Sood and Mr Webster were 100% shareholders in the ESMS, the only way to ensure that 20% of the equity was set aside for employees was to use the existing EBT. She said that she did not quite understand what the tax concerns were about the use of the EBT. In his response, Mr Scarborough told her that:

On 16 December 2014, Mr Scarborough forwarded to Mr Sood the advice he had received from Ms Down and indicated that he had a duty to ensure that 20% of equity was made available to the employees. Mr Sood’s response accepted that there was therefore no option to simplify the structure and that the matter was now closed off.

On 5 January 2015, Mr Sood emailed a number of people, indicating that “we would like to conduct a new share issue in favour of the ESMS Employee Benefit Trust for 10% of the current issued share capital of MTIS. This will be for nominal value. Please can you fill out the appropriate secretarial forms and let me know what is required from our end... We would like to complete the share option exercise by the end of January please let me know by return if there are any issues stopping this.”

The reference to a “share option exercise” was to the proposed EMI Scheme then under discussion with the management team (including Mrs Fitzpatrick) and Trident.

On 19 January 2015, 800,000 shares in ESMS were issued to the EBT. This was the first and (in the event) only transfer of shares into the EBT. However, a separate option scheme was established pursuant to which options were granted as follows:

In June 2017, ESMS took advice from PWC as to how its balance sheet could be restructured to segregate out surplus cash. The reasons for this were said to be threefold: (i) to ensure that there was less opportunity for suppliers to negotiate discounts; (ii) to ensure the right level of working capital at all times; (iii) to assist management in being more profit driven.

At that date, the issued share capital of ESMS consisted of 8,800,000 ordinary shares, of which 800,000 were held by Trident and 4,000,000 each by Mr Sood and Mr Webster. PWC’s advice was to restructure the shareholdings so as to create two new classes of shares and on 18 March 2018, Mr Sood and Mr Webster passed a special resolution to give effect to that advice. As a result, the company’s share capital was sub-divided into:

Following the re-organisation, the shares in ESMS were held as follows:

PWC’s advice contemplated that any dividends paid to the Sixth and Seventh Defendants could be offset against inter-company loans, including a loan made by ESMS to IPL. In his witness statement, Mr Sood explains that Trident was aware of and consented to the restructuring and that while it could have applied to convert its shares into C shares, it did not do so.

On 23 April 2018, the Fourth and Fifth Defendants were appointed as directors of ESMS in accordance with PWC’s advice.

During the course of 2020, it became apparent that the relationship between the senior management team and Mr Sood, in particular, had broken down. Various grievances were raised, the details of which do not matter for present purposes, which were addressed to the Board, i.e., to Mr Sood and Mr Webster (and by then also Mrs Sood and Mrs Webster) in their capacity as directors of the company. In due course a response was sent signed by all four directors which indicated, that having considered the matter in the round, they had decided to sell the business and hoped to complete a sale by the end of the year.

One of the specific questions raised by the management team during the course of the ensuing correspondence – and again addressed to the Board - was for proposals:

A meeting took place with the management team on 10 November 2020 at which the Board reaffirmed its commitment to distribute 20% of the company to staff.

On 11 December 2020, Bingham Mansfield, solicitors acting on behalf of Mrs Fitzpatrick and Mr Scarborough (who was by now also an employee of ESMS, having joined the company in July 2017), sent a letter before action to ESMS asking, amongst other things, for an explanation of the share reorganisation which had occurred in 2018, expressing dissatisfaction that ESMS had not given an unambiguous assurance that clause 12.1.3 of the EBT would be satisfied before purchase offers were sought and querying the waiver of dividends by Trident. In summary they demanded that:

Following further correspondence between solicitors acting for the various parties (which it is not necessary to rehearse), a Claim Form was issued on 30 July 2021. The Second to Seventh Defendants issued the present strike out application on 17 September 2021.

Numerous criticisms were made by the Second to Seventh Defendants in their written evidence and in their skeleton argument of both the original Points of Claim and the draft Amended Points of Claim. It seems that at least some of these criticisms were accepted by the Claimants to have merit, since their case underwent considerable refinement following exchange of skeleton arguments. In particular, a claim for specific performance against the Second to Seventh Defendants was abandoned, as was a claim for breach of fiduciary duty in relation to the initial establishment of the EBT, since this was clearly time barred.

Ultimately, Mr Talbot advanced his clients’ case by means of what he described as three orthodox routes and one less orthodox route:

Accordingly, I shall address the case on this basis.

There was no dispute between the parties as to the ingredients of a proprietary estoppel. These are set out in Thorner v Major, [2009] 1 WLR 776 at [29]:

In this case, the estoppel is pleaded as having arisen in favour of the employees (Footnote: ⁸) as a result of either or both of two categories of assurance:

I address each category of assurance separately. Before doing so, however, it is appropriate to consider the basis on which Mr Sood and Mr Webster can be made personally liable for statements made by them in their capacity as either directors or shareholders of IPL and ESMS.

It is trite law that a director of a company is only personally liable for things said or done by him or her in that capacity if there has been an assumption of personal responsibility such as to create a special relationship between them and the claimant. Such assumption is to be determined objectively: see Williams v Natural Life Health Foods Ltd, [1998] 1 WLR 830.

So far as shareholders are concerned, the well-established doctrine of separate corporate personality dictates that a company is a distinct legal entity separate from its shareholders, and that the latter cannot be held liable for the acts and omissions of the former or vice versa unless the law allows the corporate veil to be pierced.

Mr Talbot protested that there was no need to pierce any corporate veil in this case because Mr Sood and Mr Webster were the “real actors” behind both IPL and ESMS. He relied in this regard on Prest v Petrodel Resources Ltd, [2013] UKSC 34. In my judgment, however, while I agree that no question of piercing the veil arises on the present facts, far from assisting his argument, the decision only served to demonstrate the difficulties in his way.

In Prest, the Supreme Court attempted to rationalise a doctrine which they all agreed existed but which was of uncertain ambit and lacking any coherent principle. As I read the speeches, they accepted that the underlying justification for the doctrine was to prevent the abuse of corporate legal personality for some relevant wrongdoing. However, they were also clear that the principle of separate corporate legal personality laid down in Salomon v Salomon Ltd, [1897] AC 22 was the default position and that any piercing of the corporate veil should be confined to very limited and carefully defined circumstances and only deployed when all other more conventional remedies had proved to be of no assistance.

Lord Sumption, who gave the leading speech, analysed the authorities and concluded that they reflected two separate principles, albeit that failure of precise analysis and indiscriminate use of terminology such as “façade” or “sham” had sometimes blurred the distinction between them. The first was what he termed the “concealment” principle, which he described in the following terms:

The second principle was the “evasion” principle, which he regarded as a true instance of piercing the corporate veil to be invoked:

However, as Lady Hale pertinently pointed out at [90], whenever a question of potentially piercing the corporate veil arises, it is helpful to consider the purpose for which the doctrine is being invoked. Is it in order to sue the owner/controller of the company for a liability which is properly that of the company itself? Or is it in order to seek a remedy against the company for a liability of the owner/controller? As she pointed out, the latter situation is often more appropriately accommodated within orthodox principles of agency and attribution of knowledge, although the cases of Gilford Motor Co. Ltd v Horne, [1933] Ch. 935 and Jones v Lipman, [1962] 1 WLR 832 were both analysed by Lord Sumption as applications of the evasion principle insofar as they imposed liability on the company.

It is fair to point out that Lady Hale and Lords Wilson, Mance and Clarke cautioned against foreclosing the categories of case in which the court would pierce the corporate veil. But the Supreme Court was unanimous that any extension beyond the categories identified by Lord Sumption would be limited and rare. What is implicit in all the speeches (and, indeed, explicitly stated by Lord Sumption at [34]) is that it is objectionable to use the doctrine to create a new liability which would not otherwise exist. Either liability must exist in the company, for which it is sought to make the controller liable, or vice versa.

In the present application, the argument is not that the Second to Seventh Defendants are personally liable in respect of any liability of ESMS (Footnote: ⁹), nor that ESMS is liable for the acts or omissions of Mr Sood and Mr Webster. What is said is that their words and conduct render them personally liable in their own right. However, in circumstances where Mr Sood and Mr Webster were at all times directors (and therefore agents) of either IPL or ESMS, their representations and assurances were prima facie those of the relevant company. They could accordingly only be held personally liable if there was some objective assumption of personal responsibility by them (see Williams v Natural Life (supra)). I agree that this has nothing to do with piercing the corporate veil.

If, on the other hand, they were not acting on behalf of the company there can be no attribution of their actions to the company and therefore no liability on the part of the company. It must therefore be established that the representations/assurances were made in a personal capacity such that Mr Sood and Mr Webster are legally responsible for them. Again, no question of piercing the corporate veil technically arises unless it is sought to make ESMS liable for Mr Sood and Mr Webster’s actions although, as stated above, that is not the nature of the claim which is before me on this application.

However, what is clear is that, whichever way the Claimants seek to put their case, the claim against the Second to Seventh Defendants rests on establishing some sort of personal assurance or personal assumption of responsibility on the part of Mr Sood and Mr Webster, whether as directors of IPL/ESMS or otherwise. This, ultimately, is the critical issue underlying the entire application.

I accept that whether the alleged assurances were given by Mr Sood and/or Mr Webster personally is a question of fact. However, I have all the relevant documents before me together with such evidence as the Claimants have chosen to rely on in opposition to the strike out/summary judgment application. As stated above, they could have bolstered or supplemented that evidence in the 12 months since the application was first issued but they have not done so, notwithstanding that the application clearly attacked the factual basis of their case. In those circumstances, and bearing in mind the overriding objective and the need to ensure appropriate allocation of the court’s resources, if I conclude that the evidence presently before me discloses no arguable case on the facts, I see no reason why I should not grasp the nettle and dismiss the claim.

It is clear from the factual narrative set out above, and indeed it was not significantly disputed, that the staff were given to understand, both in correspondence via GSTT and at the meeting on 28 July 2011, that 20% of the equity of the business would be transferred to the employees in one form or another, and that the employees in due course elected for it to be put into a trust.

The Claimants’ pleaded case (see paragraph 12C of the draft Amended Particulars of Claim) is that the Pre-incorporation Assurance was made in writing by Mr Webster in his email of 20 July 2011 to Mr Risebrow and in the table comparing the employees’ existing and proposed terms of employment. The evidence before me does not disclose when the table was compiled, or to whom it was sent but I assume in the Claimants’ favour that it was seen by the employees prior to the incorporation of ESMS. Mrs Fitzpatrick in her evidence also refers to Mr Sood’s email of 29 July 2011 (see paragraph 28 above). This is not expressly pleaded in support of the Pre-incorporation Assurance but I likewise take it into account.

I have no doubt that nothing in the 20 July 2011 email was said by Mr Webster in a personal capacity. The email was sent from his IPL address as a follow-up to the purchase offer made on 1 April 2011 by IPL on IPL headed paper, which itself described Mr Sood and Mr Webster as partners in IPL. At no stage was any suggestion made that Mr Sood and Mr Webster were intending to purchase the business personally. On the contrary, the 1 April 2011 offer clearly stated that the purchaser would be a new company to be formed by IPL and capitalised initially by IPL. This is incompatible with any offer being made by Mr Sood and Mr Webster in their personal capacity, whether as shareholders or directors of IPL or otherwise, and Mr Webster’s email of 20 July 2011 must be read in this context. Mr Sood’s email of 29 July 2011 is even clearer since not only does he sign off expressly as a “Partner” in IPL, but he also speaks about matters “From Ivy’s perspective”. In my judgment no reasonable person receiving this email could have thought that Mr Sood and Mr Webster were acting otherwise than as directors and on behalf of IPL.

This conclusion is entirely consistent with and supported by the other correspondence passing between Mr Webster and GSTT/Mr Risebrow at around this time which (although not seen contemporaneously by Mrs Fitzpatrick) makes it quite clear that what was being discussed was a deal between GSTT and IPL, not Mr Sood and Mr Webster personally.

As for the comparison table, it does not seem to me that this supports the Claimants’ case at all. It referred to the“Establishment of an equity employee trust scheme” and what “the Company” (i.e. ESMS) would be doing. There is nothing to suggest any personal undertaking by Mr Sood and Mr Webster; it was simply a tabulated statement of the terms of employment which were on offer to the employees.

Nothing daunted, Mr Talbot argued that even if the written communications were all sent on behalf of IPL, he could nonetheless establish an arguable case that oral representations were made personally by Mr Sood and Mr Webster in consultations with the affected employees and that this was sufficient to defeat the strike out application.

It is of course possible that Mr Sood and Mr Webster might have given personal undertakings at face-to-face meetings notwithstanding that all their written communications were sent on behalf of IPL or ESMS. However, this is hardly a likely scenario and, in any event, any oral communications have to be construed in the light of the written correspondence which was taking place simultaneously. In my judgment it would require exceptionally clear evidence if an oral assurance were to be reasonably understood as having been given personally when all other correspondence relied on by the employees had been written on behalf of IPL.

As it is, the only evidence to support these alleged oral representations is to be found in Mrs Fitzpatrick’s witness statement which, unfortunately, I find wholly inadequate to support the Claimants’ pleaded case that any personal assurances were given orally by Mr Sood and Mr Webster prior to incorporation:

Mr Talbot suggested alternatively that Mr Sood and Mr Webster could be held personally liable as “promoters” of ESMS. I reject this suggestion. The authorities on the liabilities of promoters all concern either duties owed by the promoters to the company being promoted, or the liability of promoters on pre-incorporation contracts made ostensibly on behalf of the company. The first category is not in issue here and none of the cases referred to me goes so far as to say that the second category extends beyond contracts to pre-incorporation assurances. But even assuming in favour of the Claimants that it does, (Footnote: ¹⁰) and even assuming further that Mr Sood and Mr Webster rather than IPL are properly to be regarded as the promoters of ESMS, they can only be liable for an assurance given by the company being promoted, i.e., by ESMS, whereas I have found that any assurances given by Mr Sood and/or Mr Webster prior to incorporation were in fact given on behalf of IPL, not ESMS.

For all these reasons, I am satisfied that the Claimants have no real prospect of demonstrating that the alleged Pre-incorporation Assurance was made by either Mr Sood or Mr Webster in a personal capacity so as to give rise to a proprietary estoppel enforceable against the Second to Seventh Defendants. It is therefore not strictly necessary to consider the other ingredients of the estoppel and I only do so briefly for completeness.

Had I held, contrary to my findings above, that there was an arguable case that Mr Sood and/or Mr Webster personally gave the Pre-incorporation Assurance, I would have accepted that there was at least a plausible case that Mrs Fitzpatrick was sufficiently aware of the email correspondence to support the assertion that it was made to her.

However, there was no evidence before me from any other transferring employee that such an assurance was made to them. The other employees who have given statements all joined ESMS much later and so cannot have relied on the alleged Pre-incorporation Assurance. This led to a further debate as to Mrs Fitzpatrick’s entitlement to sue on behalf of other employees and, if so, which. I can see scope for argument here but even if Mrs Fitzpatrick was only ultimately held entitled to sue on her own behalf, that would have been sufficient to justify the proceedings and prevent them from being struck out or dismissed.

I consider detriment and reliance together.

Whatever Mrs Fitzpatrick may have understood from the meeting on 28 July 2011, her unequivocal evidence in her witness statement was that “We (me and the rest of the employees) relied on F(ield)F(isher) and B(ird)&B(ird) to make sure the transaction included appropriate arrangements for the creation of a trust for our benefit.” Nowhere does she say that she relied on any assurance from Mr Sood or Mr Webster. Indeed, she says that the employees wanted an EBT rather than options “not because we distrusted RS and SW but because we did not know them and were more comfortable with an arrangement that ringfenced our 20%.” Not distrusting Mr Sood and Mr Webster is not the same as affirmatively placing reliance on anything they said. In fact, it suggests the precise opposite.

Furthermore, as pleaded, the Pre-incorporation Assurance is in my judgment an assurance as to the contractual commitment to be made by ESMS in the BPA. Indeed, the Claimants’ pleaded case is that the employees relied on the alleged Pre-incorporation Assurance in giving consent to GSTT to proceed with the sale and in transferring their employment to the new company on detrimental terms. To my mind, this indicates that their main concern was to ensure that the BPA was concluded on terms which created an EBT along the lines agreed. There is no evidence to suggest that Mrs Fitzpatrick or any other employee was relying on anything said by Mr Sood or Mr Webster as having any independent continuing life once it had been crystallised into a binding contractual obligation. On the contrary, Mrs Fitzpatrick’s evidence set out in paragraph 99 above clearly demonstrates that the employees were looking to FFW and Bird & Bird to ensure that the contractual arrangements for the EBT were adequate and, once an appropriate contractual commitment had been obtained, were relying on that contractual commitment. This is consistent with Mrs Fitzpatrick’s evidence that she only ever asked Mr Sood and Mr Webster to see that the company did what was promised in the BPA and that she made clear in 2012 that she expected the trust arrangements to comply with the BPA.

The contractual commitment was made as promised and I therefore accept Mr Ashworth’s submission that even if the Pre-incorporation Assurance had been given by Mr Sood and/or Mr Webster in a personal capacity, it was superseded and effectively discharged upon the conclusion of the BPA in the agreed terms. Whether this is because the representation itself was exhausted, or because it was not relied upon once a binding contractual commitment had been secured does not make any practical difference.

Mr Ashworth also argued that there was no satisfactory evidence that the employees had suffered any detriment as a result of their alleged reliance on the Pre-incorporation Assurance in circumstances where:

There may or may not be force in these arguments, but if I had been otherwise satisfied that the Claimants had an arguable case that representations had been made for which Mr Sood and Mr Webster were personally responsible, I would not have struck out the claim on either of these grounds.

The first plainly raises triable issues of fact which I cannot resolve on the material before me. But even without evidence as to specific alternative employment, Mrs Fitzpatrick’s evidence was clear that she regarded an equity stake in the company as important. The recent decision in Guest v Guest, [2022] UKSC 27 authoritatively states that detriment need not be capable of valuation in monetary terms, still less that it has to be financially equivalent to the value of the promise and it seems to me that this would have been sufficient basis to allow the claim to go to trial.

The second of Mr Ashworth’s arguments goes as much to the question of remedy as to detriment. Again, there is plainly an argument to be had which I would have been prepared to allow to go to trial.

In summary on the Pre-incorporation Assurance, therefore, I am not satisfied that the Claimants can establish a real prospect of showing that any personal assurance was given by either Mr Sood or Mr Webster and, even if they could, any such assurance was in my view exhausted by the conclusion of a binding contractual commitment in the BPA as to the establishment of the EBT.

The next way in which the Claimants put their case on proprietary estoppel is to say that it arose from assurances given by Mr Sood and Mr Webster at the presentation in May 2012. Again, the only evidence as to this presentation comes from Mrs Fitzpatrick.

I am prepared to assume in her favour that she understood the presentation and such other communications as she saw around this time (i.e., up to about August 2012) as containing assurances that ESMS would abide by the EBT Obligation.

Again, however, I can see nothing in the presentation to suggest that anything to this effect was said or could reasonably have been understood as having been said by Mr Sood or Mr Webster in a personal capacity:

In my judgment, therefore, the evidence does not disclose any arguable case that personal assurances were made by means of the presentation.

As to reliance and detriment, the Claimants face the same problem of having to show that they relied to their detriment on the alleged assurances rather than on their contractual rights against ESMS (see in this context also paragraphs 99 and 100 above). Their pleaded case is that they continued to work for the company under worse terms and conditions of employment than they could have obtained elsewhere. However, there is no evidence at all to support this averment.

Finally, there is a pleaded case that Mr Sood and Mr Webster subsequently continued to assure the employees that the EBT Obligation would be fulfilled by the issue of shares. Despite the opportunity afforded to the Claimants since the application was issued to support this averment with evidence, no specific occasion is identified at which such assurance was given other than a meeting which took place on 10 November 2020.

In my judgment this is a hopeless contention:

For all these reasons, I hold that the Claimants have no real prospect of proving that any personal assurances were given or representations made by Mr Sood or Mr Webster subsequent to incorporation.

It follows that the Claimants likewise have no real prospect in my judgment of establishing a proprietary estoppel against Mr Sood or Mr Webster personally.

In the light of these findings, it is unnecessary to grapple with the difficult question of whether it would in any event be appropriate to give effect to any proprietary estoppel by imposing a constructive trust. Not only does there need to be some element of unconscionability, but an exercise of discretion is involved which would have to take into account a number of factors, including the following:

These are all difficult questions raising issues of fact which would no doubt be hotly contested, and plainly it is inappropriate to deal with such a fact-sensitive balancing exercise on a summary basis. Suffice it to say that if I had been satisfied that there was real substance in the claim of proprietary estoppel, I would have allowed the claim to go to trial on the question of appropriate remedy. As it is, however, I have found that the Claimants have no real prospect of success for other reasons, principally the lack of any assurances or representations by Mr Sood or Mr Webster personally.

The question of limitation is only live as regards the proprietary estoppel claim, since the other ways in which Mr Talbot advances the Claimants’ case are now limited to events in 2018 and subsequently.

It was not disputed that a proprietary estoppel arises at the date of the detrimental reliance. The Claimants would therefore have had to rely on section 21(1)(b) of the Limitation Act 1980 in relation to any reliance prior to September 2015. This in turn raises a difficult question as to whether a claim for a declaration of constructive trust falls within the section. Given the status of the employees as discretionary beneficiaries only, and the fact that they have no interest in any identifiable parcel of shares, it is not entirely clear (at least to me) that they would be claiming to recover trust property or the proceeds of trust property. However, the point is distinctly arguable and I would not have struck the claim out on this ground.

The allegation here is that Mr Sood and Mr Webster owed a fiduciary duty to the employees for the time being from the date of signature of the BPA until the EBT Obligation had been complied with in full to act in the interests of and for the benefit of the employees in relation to 20% of the company’s shares. This duty, it is said, required Mr Sood and Mr Webster not to profit at the expense of the employees and not to put themselves in a position where their interests were in conflict with those of the employees. It is alleged to have been breached by virtue of the share capital reorganisation in 2018 and subsequent distribution of dividends. The remedy sought is equitable compensation and an account of profits.

As to when a fiduciary relationship exists, both parties accepted the statements of principle set out in: Bristol & West Building Society v Mothew, [1998] Ch.1 at 18:

In Breen v Williams, [1997] 1 LRC 212 at 245, the High Court of Australia identified certain established categories of fiduciary relationship, including the relationship of trustee/beneficiary, principal/agent, solicitor/client, employee/employer, director/company and partnership. However, it went on to point out that the categories of fiduciary relationship are not closed and that:

I accept on the one hand that the categories of fiduciary relationship are not closed and, on the other, that the circumstances identified in Breen are only indicia and not in themselves determinative. However, it is clear from Bristol v Mothew that the touchstone of a fiduciary relationship is some undertaking by the putative fiduciary to act for or on behalf of another (i.e., an assumption of responsibility) such as to give rise to a relationship of trust and confidence and a legitimate expectation of single-minded loyalty. Whether or not such a relationship exists is to be assessed objectively: Snell’s Equity (24^th ed.) (Sweet & Maxwell) §7-005.

The basis on which a fiduciary relationship is alleged to have arisen in this case consists of:

I have, of course, held above in relation to proprietary estoppel that the Claimants have no real prospect of showing that any assurances or representations were given by Mr Sood or Mr Webster personally. This is an unpromising start from which to infer a fiduciary relationship.

I am in any event not impressed with (1). Even if the alleged reliance were established (as to which see paragraphs 102-103 above), it demonstrates only that the employees were relying on the contractual commitment by ESMS which they had a legitimate expectation of obtaining and did in fact obtain.

As to (2), it is undoubtedly true that Mr Sood and Mr Webster were (at least prior to 2018) solely responsible for whether ESMS complied with its obligations, but prima facie only in their capacity as directors. However, I cannot see how this alone is sufficient grounds for inferring a fiduciary relationship with the employees. As directors, Mr Sood and Mr Webster primarily owed fiduciary duties and duties of loyalty to ESMS giving rise to legitimate expectations that they would not utilise their position adversely to the interests of the company. It is not easy to see how they can simultaneously have undertaken fiduciary obligations to the company’s contractual counterparties whose interests might not be aligned with those of the company such as to give rise to any legitimate expectation that the directors would prefer the interests of the employees to those of the company. If it were otherwise, then every board of directors would owe fiduciary duties to the company’s counterparties simply by dint of being in control of the company. In my understanding at least, this is not and never has been the law. Mr Sood and Mr Webster’s status as shareholders is likewise irrelevant in the absence of some personal assumption of responsibility: see paragraph 82 above.

I accept that (3) gives rise to a question of fact which it would be inappropriate to determine now, although it is right to say that the position of the employees in this case was not obviously more vulnerable than the position of any employee in any other company. Moreover, the transferring employees such as Mrs Fitzpatrick had a veto over the sale of the business and so arguably were not vulnerable at all. Nonetheless, even assuming that the employees were in a position of particular vulnerability, this is only a circumstance which might indicate a fiduciary relationship. It is not determinative and in the absence of any personal assumption of responsibility or undertaking by Mr Sood or Mr Webster, it cannot on its own have the effect of creating a relationship of trust and confidence. After all, the employees were employed by ESMS, not by Mr Sood and Mr Webster personally and their vulnerability was vis-à-vis their employer. In truth, therefore, this ground adds nothing to (2).

A further objection raised by Mr Ashworth was that recognition of a fiduciary relationship would have the effect of grafting equitable obligations on to carefully negotiated commercial agreements in circumstances where all parties had had the benefit of expert legal advice and so should not be treated as being vulnerable at all. There was some debate before me as to whether the imposition of fiduciary obligations would “distort” the contractual bargain between ESMS and GSTT and I was referred in this context to F&C Alternative Investments Ltd v Barthelemy (No. 2), [2011] Ch. 613:

These passages confirm that any fiduciary obligation should be moulded to the contract, not only in a two-party situation, where the question is whether one contracting party has undertaken a fiduciary obligation to the other, but also in a three-party situation such as this. On any view, it must therefore be relevant to any objective assessment of the alleged undertaking that:

In response, it might be said that there can be no objection to imposing a fiduciary duty on a director in favour of the employees where the company itself owes a co-extensive duty to them: see, for example, Ross River Ltd v Waveley Commercial Ltd, [2013] EWCA Civ. 910. However, Ross River was a case where it was held that both the company and its controller owed co-extensive fiduciary duties and in the present case, I cannot see any scope for the imposition of a fiduciary duty on ESMS. By the BPA, ESMS undertook a contractual obligation, which the employees were given an express right to enforce, and which was intended to be embodied in a deed giving rise to a 12 year limitation period. In the end, the BPA was not signed as a deed but that appears to have been by oversight rather than design. Nonetheless, the fact that the employees had their own express contractual right undermines the suggestion of any particular vulnerability which needed equitable protection by the further imposition of a fiduciary duty.

In truth, the alleged fiduciary duty does not go any further than the contractual commitment, and the employees cannot in my judgment have had any legitimate expectation of an obligation of loyalty on the part of ESMS over and above that contractual commitment. The present case is therefore a long way from Ross River which concerned a joint venture more akin to a partnership giving rise to mutual obligations of good faith than to an arm’s length contract between opposed negotiating interests.

Nor is it clear to me why, having undertaken to secure and having in fact secured the contractual commitment requested by the employees, Mr Sood and Mr Webster should be regarded as having undertaken on a personal fiduciary basis to ensure the fulfilment of that obligation when the employees could simply rely on their independent contractual rights.

Ultimately, therefore, it seems to me that Mr Talbot’s Orthodox Route 2 has no better prospect of success than his Orthodox Route 1 for essentially three reasons:

There are also further difficulties which arise on this way of putting the case:

Nonetheless, if I had held that there was an arguable case that Mr Sood and Mr Webster were fiduciaries, I would have held that the Claimants had an arguable case as to breach of duty as against them alone (but not as against the Fourth to Seventh Defendants) and that the question of remedy should go to trial. As it is, however, my conclusion is that the Claimants cannot show a real prospect of success for the reasons already stated.

Orthodox Route 3 is merely an extension of Orthodox Route 2, seeking a declaration that the benefits received as a result of the alleged breach of fiduciary duty are held on constructive trust. If there is no foundation for Orthodox Route 2, it follows that this way of putting the case is likewise flawed. It would also raise the difficulties identified in paragraph 116 as to whether it would be appropriate to impose a constructive trust at all.

Mr Talbot’s final, less orthodox, way of putting the Claimants’ case was to argue that a constructive trust in favour of the employees should be recognised arising from the Second to Seventh Defendants’ unconscionable retention of the company’s share capital given: (i) the terms of the BPA; (ii) the circumstances relied upon above as giving rise to the alleged fiduciary relationship; (iii) the detriment allegedly suffered by the employees in reliance on the promise that the EBT Obligation would be fulfilled; and (iv) the corresponding personal advantage to the Second to Seventh Defendants in failing to fulfil that obligation.

The classic exposition of constructive trusts is to be found in Williams v Central Bank of Nigeria, [2014] UKSC 10; [2014] AC 1189 at [9]-[11] endorsing what was said by Millett LJ in Paragon Finance plc v DB Thakerar & Co., [1999] 1 All ER 400 at 408-409. In summary, there are two distinct types of constructive trust:

Outside these two types of constructive trust, it is clear – for the time being at least – that a purely remedial constructive trust is not a creature known to English law: see FHR European Ventures LLP v Cedar Capital Partners LLC, [2014] UKSC 45; [2015] AC 250 at [47]; De Bruyne v De Bruyne, [2010] EWCA Civ. 519 at [50].

The Claimants’ case was not advanced as a type 2 constructive trust on the basis that the Second to Seventh Defendants had participated in any unlawful misapplication of trust assets. I was told that allegations of fraud had been made in correspondence only to be dropped shortly before the hearing. They were not pursued before me and formed no part of either the pleaded case or the draft amendments. I therefore ignore them.

Rather (although this was not immediately clear from the Claimants’ skeleton argument), the case was put as a type 1 constructive trust.

As to this, I accept that the circumstances in which property is acquired may justify the imposition of a constructive trust and that it is not necessary to show either detrimental reliance or fraud. However, the property must have been transferred on the basis of some understanding or agreement to hold it for the benefit of a third party and it must be unconscionable for the transferee to assert his own beneficial interest and deny that of the third party. In other words, unconscionability is a necessary ingredient, albeit not sufficient on its own: “possession of the property must be coloured from the first by the trust and confidence by means of which he obtained it”: see Paragon Finance (supra) at 409; De Bruyne v De Bruyne (supra) at [51].

In my view, there are many reasons why the argument cannot succeed in this case:

Mr Talbot submitted that I should not strike out this way of putting his case if I was persuaded by his more orthodox routes. He referred to Clarke v Meadus, [2010] EWHC 3117 (Ch) where Mr Justice Warren allowed a case of proprietary estoppel to go to trial and accordingly declined to strike out a claim for a purely remedial constructive trust. In comparable circumstances, I might well have been prepared to take the same course. However, the converse must also be true and, having held that Mr Talbot’s orthodox routes have no real prospect of success, there is no basis for maintaining this less orthodox route which has all the hallmarks of a pure – and impermissible – remedial constructive trust.

As already stated, the claim for specific performance is no longer pursued against the Second to Seventh Defendants. Mr Talbot argued that I should nonetheless maintain the claim against them on the basis that they are necessary and proper parties to the claim for specific performance against the First Defendant.

I fail to see why. If, as I have found, there is no arguable claim against the Second to Seventh Defendants on any basis, the proceedings against them should be dismissed.

The real underlying complaint in this case is that ESMS did not perform its contractual obligations. The employees have known or should have appreciated ever since 2012 that the obligation had not been performed timeously. They could have sued ESMS at any time after that but chose not to do so. The reasons for this were not canvassed before me although I note Mrs Fitzpatrick’s evidence that by late 2014 it was obvious that the business was becoming increasingly successful and that the lack of urgency in the creation of the EBT was therefore not concerning to her. Be that as it may, this is not a case where the employees were unprotected.

The considerable passage of time since then has resulted in some inventive causes of action being advanced as a means of circumventing the time bar. These causes of action all depend on the intervention of equity and there are limits to the extent to which equity will bend over backwards to assist a litigant in circumstances where perfectly good legal remedies were available to it.

But in my judgment and for the reasons given, the Claimants’ claims against the Second to Seventh Defendants fail at the first hurdle primarily on the basis that the evidence on which they rely does not disclose a real prospect of establishing any assurances or assumption of responsibility by Mr Sood or Mr Webster or any of the other shareholders personally.

It follows that the Second to Seventh Defendants’ application succeeds. I will invite counsel to agree an appropriate form of order.