Joseph Mark Taylor v James Lee Taylor & Anor

This judgment was handed down remotely at 10 a.m. on 29 January 2026 by circulation to the parties or their representatives by email and by release to the National Archives. NICOLA RUSHTON KC:

1. This judgment follows the liability-only trial of an unfair prejudice petition under section 994 of the Companies Act 2006 (“ ”) brought by the Petitioner, Mr Joseph Mark Taylor, in respect of Jamett Properties Limited (“ CA 2006 the Company ”), a company in which he is a 40% minority shareholder.

2. The Company has one other shareholder, the First Respondent, Mr James Lee Taylor, who holds the other 60% of the shares. The Petitioner and the First Respondent are brothers, and in this judgment I will refer to them as “ Joe ” and “ Jim ” respectively for convenience, and with no disrespect intended. As is normal practice, the Company has been joined as a Second Respondent and is represented by GunnerCooke LLP but it has taken no active part in the proceedings. The Company and key events in its history

3. Unless indicated otherwise, the facts in this section are not disputed.

4. The Company was incorporated on 19 November 1962, under the Companies Act 1948 , by James Taylor senior, the father of Joe and Jim, with the stated object of holding, managing and receiving the income from property. After he died in 1971, the 500 shares in the Company passed to Joe and Jim’s mother, Lilian Taylor (“ Lilian ”). Joe and Jim also have two sisters, Janis Taylor (“ Janis ”) and Michelle Boyle (“ Shelley ”). In 1985, Lilian gifted 100 shares to each of her four children, who were by then all adult, retaining 100 herself.

5. Joe was appointed as a director of the Company in 1986 and Jim in 1994. Janis and Shelley were also formerly directors.

6. In the early 2000’s Jim bought Janis’ and Shelley’s shares from them and Lilian gifted her shares to Joe, resulting in the 60/40 shareholding split which has existed since then. The share transfers from Janis and Shelley to Jim are registered as having taken place on 1 May 2002, and the transfer from Lilian to Joe on 23 January 2003. Janis and Shelley resigned as directors at the same time as selling their shares, and from that date Jim and Joe were the only directors.

7. Companies House records Joe as having resigned as a director on 17 April 2013, leaving Jim apparently as the sole director thereafter. The circumstances and effect of that apparent resignation are one of the issues in this case and are dealt with in detail below. Joe has had no involvement in the management or business of the Company since then.

8. The Company has operated a financially successful business buying, renovating, selling and letting commercial and residential properties, mainly in east London/Essex. Until the point when Jim and Joe became the sole directors and shareholders, its operations were modest and limited to letting about 4 properties (some sub-divided into several shops or garages). Over the following 10 years or so around 15 further properties were purchased by the Company with the assistance of mortgage funding. They were normally developed and then let or sold. However since 2013 there have been few if any new purchases, with the business thereafter consisting mainly of maintaining and receiving income from its existing properties. The Company has no employees of its own.

9. The Company has not at any time, either before or after 2013, declared any dividends or made any other distribution to members. This is so even though its records show that it had substantial retained earnings, increasing over time and standing at £3,749,409 as at 30 September 2023 (according to its balance sheet for that year, which is the last year for which financial statements are available, albeit it is recorded as having no cash at bank at that point, for reasons which will become apparent from this judgment).

10. For many years from the 1990s Jim also operated a ready mix concrete business, through at least two companies. From 2002 it was operated through company number 04601624, originally known as Modern Mix Limited, but renamed Mixit Concrete Ltd in January 2017 (“ Mixit ”). Mixit went into insolvent administration on 8 May 2024. According to the Administrators’ proposals of 26 June 2024, the deficiency to creditors was £10,692,781. Mixit was dissolved on 13 November 2025, after paying a dividend to HMRC only, and a nil dividend to unsecured creditors.

11. Jim and another individual, Simon Howe, were the directors of Mixit, with Jim holding 80% of the shares and Mr Howe 10%. Until early 2013 Joe was employed by Mixit as a plant/transport manager and he also had a 10% shareholding in Mixit. However in late 2012 there was a serious falling out between Joe and Jim/Mixit, which led to Joe bringing a successful claim for unfair dismissal against Mixit in early 2013. Relations between Jim and Joe have been very poor since that time.

12. During this period until 2013, Mixit lent significant sums of money to the Company and Mixit was used as a vehicle to carry out development and renovation work to the Company’s properties. There is a dispute as to whether this was by agreement between the brothers or if this was at Jim’s initiative. However Mixit had employees and sub-contractors whereas the Company did not, and there is no doubt that such work was as a matter of practical reality carried out by Mixit’s staff, however it was then accounted for.

13. On 30 September 2016, Jim caused the Company to borrow a total of £4,000,000 from Lloyds Bank at 2.6% over base rate, repayable after 5 years (“ the Lloyds Loan ”). £2,161,598 from this loan was used to repay the Company’s existing mortgages with NatWest Bank, secured over its various properties (which were long-term 15-year mortgages not then due for immediate repayment) and £60,000 was used for the loan arrangement fee. The completion balance of £1,762,985 was paid into the Company’s new Lloyds account, from which it funded an immediate transfer of £1,755,818 to Mixit.

14. Until this point, Mixit had been a creditor of the Company for many years, pursuant to an agreement recorded in Mixit’s accounts not to demand repayment from the Company. The 2016 transfer to Mixit settled this liability. Thereafter the Company made many and from 2022 increasingly frequent cash transfers to Mixit. Some of these were recorded in the intercompany accounts as loans and some as recharges for expenses said to have been paid on behalf of the Company by Mixit. The Company became an increasingly large creditor of Mixit, but no security was taken by the Company for this lending and there was no agreement for the payment or crediting of interest from Mixit on the sums owed.

15. On 19 August 2020 Jim wrote a letter to Joe proposing a rights issue. Joe responded on 24 August 2020, saying that following his exclusion from the Company and illegal removal as a director, his knowledge was limited to an annual snapshot. He said that this would be a major change requiring in depth information which Jim would not supply, such as bank statements and minutes explaining why loans had not been paid off and why assets needed to be liquidated, and that he required more detail on Jim’s proposal including costs, projections and how shareholders would benefit. Jim replied on 24 September 2020, saying that the necessary information was being gathered with solicitors and accountants and would be sent to Joe. Joe also wrote to the Company’s accountant asking for various documents and information but this was not forthcoming.

16. Instead on 30 October 2020 Jim sent a formal letter to Joe (drafted by his solicitors) proposing a rights issue of 540 new shares at £11,000 per share, to raise about £6M (“ the Rights Issue ”). It included a draft written resolution and application form, and set out a 1 month deadline for applications for shares. Discussions via solicitors followed but ultimately on 27 November 2020 Joe through his solicitors Goody Burrett LLP issued an application for an injunction to restrain the Rights Issue. Jim subsequently agreed not to pursue the Rights Issue, and the injunction application was adjourned generally with liberty to restore on 19 February 2021.

17. On 30 September 2021, the 5-year Lloyds Loan expired without repayment by the Company, although Lloyds did not serve formal demand until 1 June 2022.

18. On 30 September 2022 Jim caused the Company to borrow £5,500,000 from NatWest Bank at 2.5% over base rate for a further 5 year term (“ the NatWest Loan ”). Of the loan proceeds, £3,696,369 was used to discharge the Company’s liabilities to Lloyds, £55,000 was used for a loan arrangement fee, £419,562.40 was paid to the Company’s solicitors Bracher Rawlins (to fund an ultimately abortive property purchase in the name of JE Property Lets) and the balance of £1,694,600 was transferred to Mixit during October 2022.

19. Over the period from October 2022 until Mixit’s administration on 8 May 2024, the available bank statements for the Company show numerous periodic cash transfers from the Company’s account to Mixit’s. The Company’s tenants paid rent into the Company’s account and expenses were paid from it (including interest on the NatWest Loan). The pattern from the bank statements over this period until May 2024 is that cash lump sums of anything from about £5,000 - £60,000 were transferred from the Company to Mixit when there were sufficient funds in the Company’s accounts. These transfers continued until the week before Mixit’s administration.

20. According to the intercompany ledgers disclosed by Jim, Mixit owed the Company £3,501,976.28 when it went into administration. However the Company did not prove as a creditor in Mixit’s insolvency. Instead Jim submitted a personal proof of debt of about £2M, which according to his evidence related to some of this debt owed to the Company.

21. On 21 June 2024 an asset sale was completed by the administrators of Mixit’s assets to Fleetwood Trading Limited (“ Fleetwood ”) for £850,000 plus VAT, of which £480,000 was paid up front and the balance due over the next 4 months. Fleetwood was a previously dormant company of which Jim was also a director, although he resigned on 17 July 2024 and was replaced by his bookkeeper, Sharon Byrne. Fleetwood failed to pay the deferred element on time, and the administration was extended, but the administrators progress report of 7 May 2025 confirms that full payment had been made by then.

22. On 16 April 2025, after proceedings had been issued and Points of Defence served, Jim executed a Deed of Indemnity in respect of any “shortfall” owed to the Company by Mixit as determined by the administrator (“ the Indemnity ”). No indemnity has been paid by Jim to the Company, and Joe’s case is that the indemnity is inadequate and in any event that Jim failed to submit a timely proof of debt in the administration. The dispute

23. Joe’s case is that the Company has always been a family company and that from 2002 until his falling out with Jim in early 2013, it was operated as a quasi-partnership between the two of them. He says that they agreed to build the Company together, using its cash and mortgage funds to fund expansion, and that they worked closely together, with each undertaking the aspects of the business which suited their respective abilities.

24. Joe says that since early 2013, he has been almost entirely excluded from the Company and its business, both from management and as a member. This began with him being purportedly removed as a director in April 2013, at a company meeting which Joe says did not take place and would not have been effective if it had. Joe says he has been excluded from any participation in the profits of the Company, denied any information other than publicly available Company accounts and that the Company has been managed by Jim for the benefit of himself and/or his associates including Mixit. He says that Jim will continue to do these things unless prevented by the Court. He says that Jim has therefore unfairly prejudiced Joe’s interests as a member in numerous ways.

25. Jim denies that Joe’s interests as a member of the Company have been unfairly prejudiced. His case essentially is that Joe was employed by Mixit and took no real interest in the Company, which he denies was a quasi-partnership; that Joe acquiesced with his removal as a director and he has not been unfairly treated since then since Jim has continued his same strategy of growing the business. Jim freely accepted, at least at trial, that he viewed the Company and Mixit, along with other companies in which he was involved, including Fleetwood, as extensions of his own business. His approach was that he would move cash, assets and liabilities around to where they were needed, and that any consequences would be sorted out through accounting mechanisms.

26. Jim claims that he has provided disclosure and financial information as required during the proceedings and has been open about the Company’s financial affairs. Joe says Jim has resisted providing proper disclosure throughout, and that many important financial records have still not been provided. Procedural history

27. The Petition was presented on 4 June 2024 and Jim served Points of Defence on 30 August 2024. Joe also served a request for further information and disclosure of documents and on 30 August 2024 Jim served a response which refused most of the requests.

28. A first CCMC took place on 5 November 2024, at which a split trial was ordered with the Liability Trial: “… determining whether the Company’s affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of the Petitioner as a member of the Company and/or an actual or proposed act or omission of the Company (including an act or omission on its behalf) is or would be so prejudicial, but, if so, not determining the appropriate relief, if any, to be granted to the Petitioner (which issue shall only be determined following the Liability Trial).” It was further ordered that: “If the Petitioner is successful at the Liability Trial, the issue of relief shall be determined at a separate hearing, directions for which will be given at the handing down of judgment following the Liability Trial.”

29. On 13 January 2025, Jim served Amended Points of Defence. A second CCMC took place on 27 February 2025, at which Model D Extended Disclosure was ordered and costs budgets approved.

30. Between November 2024 and January 2025, Joe obtained copies of some of the Company’s bank statements, direct from Lloyds. This led to him serving an Amended Petition on 17 March 2025, objecting to various transactions revealed by the bank statements. On 14 April 2025 Jim served Re-Amended Points of Defence, responding to those further points.

31. On 23 July 2025, following two extensions of time, Jim provided his Extended Disclosure. Joe was dissatisfied with the disclosure and on 20 October 2025 he applied for specific disclosure of 7 categories of documents. At the pre-trial review (“ PTR ”) on 23 October 2025 HHJ Keyser KC, sitting as a Judge of the High Court, accepted Jim’s undertaking to provide 4 categories of documents and adjourned consideration of the remaining 3. At a further hearing on 10 November 2025, Meade J dismissed Joe’s application for disclosure of the remainder, with costs reserved to the trial judge.

32. There was also an unsuccessful mediation on 8 October 2025.

33. On 23 October 2025 Joe served a Re-Amended Petition, which removed the part of the prayer seeking an order for the purchase by him of Jim’s shares, as Joe says he can no longer afford this. Jim served Re-Re-Amended Points of Defence on 27 October 2025, further amending his case on some of the payments.

34. Throughout this period and until about 3 weeks before trial, Jim was represented by solicitors and counsel, as Joe has been. However on 19 November 2025 Jim served notice of change of legal representative and since that date he has represented himself, including at the trial.

35. Jim has made three open offers during the proceedings. On 15 October 2024 he made an offer, open for 21 days, to buy Joe’s shares at a value to be determined by an expert accountant. On 16 April 2025 he made a second offer in identical terms, also open for 21 days, which expired shortly before Jim was originally due to provide his Extended Disclosure. On 10 October 2025 Jim made a third open offer on the same terms as previously, except it was open for a minimum of 14 days and thereafter until withdrawn. Its purpose was to ground a strike out application issued by Jim on 17 October 2025, made on the basis that a reasonable offer had been made to buy Joe’s shares, so continued prosecution of the Petition was an abuse of process. At the PTR, the Court directed that if this could not be heard before the liability trial (which proved to be the case), it should be listed at that trial but “ In that event, however, it shall be in the discretion of the trial judge whether or not (and if so when) to hear that application.”

36. On the first day of the trial I indicated that I would deal with the strike out application at the same time as or after giving judgment in the liability trial, as I preferred to do so after hearing all the evidence and submissions.

37. On 18 November 2025, Jim emailed Joe’s solicitors, Thompson Smith and Puxton (“ TSP ”), saying his solicitors Bracher Rawlins were no longer representing him and he would be looking for an adjournment of the trial. He also said all offers were withdrawn. On 24 November Jim emailed TSP saying he had decided to dismiss his lawyers and request an adjournment to allow both parties to “ reach a sensible resolution”. TSP asked for a copy of his adjournment application, chasing for this again on 25 November.

38. A week later TSP emailed Jim concerning exchange of skeleton arguments, to which Jim replied that he would be applying for a stay to allow him to find cheaper solicitors. On 2 December 2025 TSP emailed Jim saying that any application to adjourn needed to be on proper notice and asking for his evidence in support.

39. On 3 December 2025 Jim emailed the court, asking for an adjournment on the basis that he had dismissed his previous solicitors because he could no longer afford their fees, and to allow him time to prepare and instruct new solicitors. Jim’s email was not sent to the correct address however, so it did not immediately come to the attention of Chancery Listing or this Court.

40. Since Jim was resisting providing a skeleton because he said he had asked for an adjournment, on 9 December 2025 TSP wrote to the Court with copies of the various email exchanges. On 10 December I gave a direction that if Jim wished to apply for an adjournment, he would need to make an application with reasons before the trial started, providing any evidence in support and copied to TSP, to be heard on the first day of trial.

41. No such application was made by Jim. On the first day of the trial, Mr Christopher Boardman KC, who appeared for Joe, said that Jim had said he was no longer applying for an adjournment, as Jim had decided he wanted to proceed and get a resolution. Jim explained to me that he had discharged his solicitors because he was getting nowhere.

42. Later in the trial, when he was being cross-examined, Jim said that it was not that he could not afford his solicitors, but that he did not want to spend the money on them. He said Bracher Rawlins were holding the funds for the trial in their account, that it was not true that he was no longer able to afford them and that this had been an excuse to try and get an adjournment.

43. Accordingly, when Jim emailed the Court asking for an adjournment on the basis he had disinstructed his solicitors because he could not afford the trial, the reason he gave was untrue. My conclusion is that he gave it because he hoped this would persuade the other side or the Court to agree an adjournment, probably in the hope this would improve his negotiating position. Once it became apparent it would not be easy to get an adjournment, it appears he decided just to represent himself and save the cost of legal representation at the trial.

44. In other words, Jim was willing to tell a convenient untruth to the Court and the other side in an effort to gain an advantage in the proceedings, later allowing it to fall by the wayside when it became apparent the attempt was unlikely to work. I bear this in mind when assessing his evidence more generally. The witnesses

45. This is a convenient point to set out my impressions of the witnesses.

46. In addition to giving evidence himself, Joe called his two sisters, Janis and Shelley, on his behalf. On the Respondent side, Jim gave evidence and called evidence from 3 other witnesses. They were Sharon Byrne, who has acted as bookkeeper for various of Jim’s companies including the Company; Simon Medcalf, who has been the Company’s accountant for many years; and Francis Medcalf, or Frank as he is known, who is Simon’s father. Frank is a retired bank manager who formerly worked at Lloyds. In retirement he uses his time giving business advice, mostly unpaid, including to Jim.

47. Again, for convenience and intending no disrespect, I will refer to all of the witnesses by their first names. All the witnesses provided detailed witness statements which stood as their evidence in chief, gave live evidence and were cross-examined. In the case of Joe and his sisters, this was therefore by Jim. The Petitioner’s witnesses

48. Joe ’s evidence came across as careful and considered, if slightly closed and defensive although this was unsurprising given he was being cross examined by a brother he has barely spoken to for over 10 years. On his involvement in the Company before 2013, he said that he and Jim were together all the time and always had meetings, which were more like informal chats. There were no Company minutes. He and Jim both worked in Mixit’s offices, where they had desks. He said he did whatever was necessary for the Company, including building staircases and metal frameworks for properties, and signing leases; that they discussed properties as and when they arose, and that he attended auctions to check out potential properties. He said that Jim handled all the banking and financial side. I note that Joe is dyslexic, which he says affected how they divided responsibilities. He said that if there was a problem with a tenant, he would visit and deal with them and calm them down, because he was better at that than Jim.

49. Joe came across as a straightforward witness and I accept his evidence as to his involvement in the Company over the 2002 to 2013 period, which was not undermined. What also came across is that his lack of trust in Jim now runs so deep as to morph into intransigence. Frank gave evidence that in about 2021 he tried on behalf of Jim to negotiate a settlement of the dispute with Joe’s then solicitor, based on a division of the property assets, but that this ultimately foundered because Joe could not be satisfied with the financial disclosure and in Frank’s view had unreasonable expectations of compensation for loss of future income. Whatever the merits of the two sides’ positions at that time, this appears to have been their best chance for a negotiated settlement, but it also appears to have been too hard for Joe to reach a resolution.

50. Janis , who is the eldest of the four siblings, was more combative than Joe. Much of Jim’s cross examination related to wider family disputes not relevant to this claim, especially concerning Lilian. It is apparent that the current dispute is but one facet of volatile family relations extending back at least 30 years.

51. Janis’ evidence was that she and Shelley decided to sell their shares in the Company to Jim in 2002 because continuing to be involved with the Company was too much aggravation, they did not like the “ family rowing ”, and they wanted Jim and Joe to get on with it between them. She said that Jim was “ geeing them on ” to expand, and that she now believed he had wanted to take control of the Company. She said the Company had been “ stagnant ” while Lilian was managing it. She denied any ongoing interest in it, saying “ I haven’t got any claim on the business, good luck to you [Jim] .”

52. While Janis’ perceptions were in my view coloured by a strong identification with Joe, I accept her evidence that the Company had always been a family business in the past, and that from 2002 until 2013 it was a family business between Jim and Joe in which they worked together.

53. Shelley was a calmer, more detached witness who gave measured evidence despite Jim cross examining her in some detail about an old, unrelated dispute about her son taking money from one of Jim’s businesses. From about 2000 until her husband’s death in 2015 she lived and ran businesses in Spain. She said she sold her shares to Jim because she didn’t think the Company would have gone anywhere otherwise and she was happy to get out of it. She said she had been a director in name only and had had no idea what she was doing. Lilian had sorted out things such as leases but hadn’t been a business person. Her evidence was that she sold her shares to Jim because “ there were too many cooks, you could not deal with all the family members, it wasn’t ever going to work ”. She said she thought Jim and Joe had done well for the Company in the beginning, but that she did not know much about what they had done after 2002 as she had moved to Spain.

54. My conclusion was that Shelley was an honest and straightforward witness, who confirmed the family nature of the original business and that the purpose of the 2002 share sale was to allow Jim and Joe to run it together going forward. However her absence in Spain meant she was not able to confirm much beyond that. The First Respondent’s witnesses

55. Jim gave evidence over about a day and a half, covering all aspects of his and Joe’s involvement in the business up to 2013, and then the way the Company, but also Mixit and Fleetwood, have been run since then. This included extensive consideration of the available company, financial and accounting records, albeit Joe’s side criticises these as substantially incomplete. I will comment below on details of his evidence under the specific heads of Joe’s claim, at this stage confining myself to overall impressions.

56. Jim described himself on more than one occasion as “ not well educated ”, but this struck me as a feint. My impression was that he is intelligent, driven and tactical, someone who knows what he wants and goes for it, but is also relaxed about bending rules and lying as necessary to achieve his goals. His approach to the adjournment application was just one example of this. He inspires loyalty and commitment in others, as was apparent from the evidence of Sharon, Simon and Frank, and is a risk-taking entrepreneur who has had both significant successes and failures. He is a bigger and more dominating personality than Joe.

57. As Mr Boardman submitted, there were numerous inconsistencies in Jim’s evidence, between his Points of Defence and witness statement, between his witness statement and oral evidence and within his oral evidence, and he was sometimes evasive. Indeed he effectively abandoned large parts of the case set out in his Defence and witness statement, and where it differs I take his case to be that which he put forward at trial. I accept Mr Boardman’s submission that Jim was a witness who was prepared to say what he thought he needed to say to advance his case unless confronted with irrefutable truth, and there were many examples of this. Most notably: i) Having said in his statement that the Company’s 2024 accounts would be filed as soon as possible, he initially said in cross examination that he did not know why this had not happened but ultimately acknowledged that he was unwilling to file them until the case was over. ii) Having pleaded that there was an inquorate general meeting of the Company on 17 April 2013 at which he passed a resolution removing Joe as a director, and said in his statement that he called a meeting and had a large enough majority to remove Joe, in cross examination he accepted that although he went to Bracher Rawlins’ offices that day, he did not know if a notice had been sent to Joe convening a meeting, that nothing happened and no resolution was even purportedly passed. iii) Having pleaded that Joe was excluded from the Company because he refused to comply with his duties as a director, and then said in his witness statement that they fell out in 2011 over growth strategy, in cross examination he ultimately accepted that Joe’s exclusion was as a result of the incident at Mixit’s/the Company’s offices in early 2013 after his employment ended, when Joe tried to obtain some documents and was told to leave (this latter being Joe’s case). iv) As to the Rights Issue, having initially claimed that he had explained his intentions repeatedly to Joe who had later abandoned his application for an injunction, in cross examination he accepted that the real purpose of the rights issue was to dilute Joe’s shareholding to below 25% and that Joe’s injunction application was compromised on the basis that the Rights Issue did not proceed. v) Having claimed in his Defence and witness evidence that Joe was provided with information and access to bank statements in addition to the public accounts, in cross examination he accepted that no information other than the accounts was provided to Joe (aside from disclosure in the proceedings) because he was not willing to provide any.

58. My conclusion is that Jim’s many eventual concessions have narrowed the factual issues in this case, but that his inconsistencies and changes of position mean I cannot sensibly rely on his evidence unless it is uncontested, corroborated by other reliable evidence or inherently likely to be true.

59. Sharon is a bookkeeper who has known Jim and worked with him for more than 25 years, in particular at Mixit. Since the Company has no employees, Mixit’s employees dealt with administration for the Company, and Sharon did so for several years in about 2017 to 2020, putting its records onto the accounting software Sage. After Mixit went into administration, Sharon was appointed as a director of Fleetwood, which had previously been dormant. However it was Jim who negotiated the (prior) sale of Mixit’s assets to Fleetwood with the administrators, and it was apparent in cross examination that Sharon knew little about this. She said she had been appointed because it was considered detrimental for Jim to be a director given Mixit’s insolvency.

60. Sharon gave quite detailed evidence in cross examination about how the Company’s rental income and costs were recorded, utilising a different nominal code for each of the 50 or so properties. She also described how sub-contractor costs for works to the Company’s properties were accounted for, being paid through Mixit and recharged to the Company (with surcharges), and how CIS tax and VAT were handled. She gave evidence about how other costs were paid using a credit card registered to Fleetwood, which she said were recharged to the Company where they related to it. As an overall description of how these financial processes were carried out, I accept her evidence. She was clearly familiar with the systems she described and made appropriate concessions on matters she did not know or could not remember. However, as she herself accepted, she was not in a position to confirm whether individual entries were correct.

61. Overall I considered Sharon to be an honest witness who was seeking to assist the Court, albeit one who was loyal to and somewhat protective of Jim and inclined to be favourable to him in her evidence.

62. Simon is a chartered accountant who from about 2007 acted as the accountant for all of Jim’s associated companies, including the Company and Mixit. From 2013 Simon did so from Lucentum Limited/Lucentum Business Services Limited. He gave evidence as to relevant accounting practices, regarding the Company and intercompany accounts with Mixit and others, and also as to correspondence he had with Joe.

63. Mr Boardman submitted that Simon had been an inconsistent witness, whose evidence the Court should take care with before accepting it as reliable. He said that while Simon appeared to wish to assist the Court on accounting matters, his answers in cross examination highlighted that his role had been relatively limited. On the correspondence he said that Simon was a defensive witness whose answers lacked straightforwardness and that this supported Joe’s position that Simon had not been neutral or frank in his dealings with Joe.

64. I do not accept those submissions. My assessment of Simon as a witness is more nuanced. My impression was that he was a professional who was approaching both the records and the correspondence with an accountant’s perspective which continued in his evidence. However he has been the accountant to Jim’s businesses for a very long time and I consider he has become too steeped in their culture to be wholly objective. He appeared to find it difficult to distinguish between Jim’s interests and the Company’s, in a manner which was surprising for an accountant. He regarded the moving of liabilities from Jim’s directors loan account (“ DLA ”) with the Company to Mixit’s intercompany liabilities as no more than a tidying up exercise and appeared surprised when questioned why Jim’s personal items were being put through the intercompany account.

65. This was consistent with Jim’s own perspective, which came through loud and clear from his evidence, which was that it was fine for funds, assets and liabilities to be moved freely between the different companies, to wherever Jim thought they were needed, so long as records were kept. He maintained this belief even when this involved shovelling millions from the Company into Mixit in an ultimately vain attempt to keep the latter afloat. No real attempt was made by Jim to distinguish the Company’s interests (as opposed to its records) from Mixit’s or Fleetwood’s, and it was apparent from the evidence of both Sharon and Simon that they accepted that this was Jim’s approach and operated accordingly. As the sole apparent director of the Company for the past 10 years, they simply took their cue from him. In my view this explains both why Simon accepted Jim’s instructions on the Company’s accounts quite uncritically and also his apparent lack of interest, then or in his evidence, in the correspondence he had with Joe. To Simon it seems Joe was just a recalcitrant minority shareholder who was making it difficult for Jim to run the Company effectively.

66. My conclusion is that Simon’s evidence was quite informative as to how the Company was run, but not in a way which assists Jim’s case.

67. Mr Boardman accepted that Frank was a straightforward witness who gave honest evidence, and I agree. Frank’s evidence was limited to more recent events, especially his genuine attempts to broker a settlement in 2021. I accept his evidence, as far as it goes, including his evident frustration that the two sides could not reach a sensible agreement based on dividing the Company’s property assets.

68. Having set the scene and considered the witnesses, I will now turn to the applicable legal framework. The law

69. The remedy of unfair prejudice is contained in sections 994 -996 CA 2006 . Section 994(1) sets out what a petitioner must establish: “A member of a company may apply to the court by petition for an order under this Part on the ground– (a) that the company’s affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or (b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial.”

70. The requirements in s.994(1) can be conveniently divided into four elements: i) the conduct complained of must be of the company’s affairs, or must be an actual or proposed act or omission on the company’s behalf; ii) the interests of the petitioner, or of the shareholders’ interests generally, must have been:- iii) prejudiced; iv) unfairly. See e.g. summary in Griffiths v Griffiths [2023] EWHC 175 (Ch) (“ Griffiths ”), a decision of Deputy ICC Judge Curl KC, at [22] (citing Hollington on Shareholders’ Rights (9th edition) at 7-16).

71. It is not disputed that the first two requirements listed above are satisfied. The Company is a company for the purposes of s.994 , albeit it was incorporated under the Companies Act 1948 . (The definition in s.1(1) CA 2006 includes existing companies under the Companies Act 1985 , which in turn by s.735(1) included companies formed and registered under the Companies Act 1948 ).

72. There is also no dispute that Joe is a member of the Company, as a 40% shareholder.

73. Furthermore, the Re-Re-Amended Points of Defence do not dispute that the conduct of which Joe complains would amount to conduct of the Company’s affairs, or actual or proposed acts or omissions on its behalf. I note that these words in s.994(1) are to be construed widely, so in Hawkes v Cuddy [2009] EWCA Civ 291 at [50], Stanley Burnton LJ said they extended “… to matters which are capable of coming before the board for its consideration, and may not be limited to those that actually come before the board .” Prejudice

74. As to the third requirement, while there is a dispute as to whether Joe’s interests have been prejudiced, there is no dispute that any prejudice would be to his interests as a member of the Company. This is also in line with authority: as Arden LJ stated in Re Tobian Properties [2012] EWCA Civ 998 (“ Tobian ”) at [12], “… the courts take a wide view of prejudice suffered by a shareholder .”

75. As was confirmed by HHJ Hodge QC, sitting as a Deputy Judge of the High Court, in Re Macom GmBH (UK) Ltd [2021] EWHC 1661 (Ch) at [47]: “… prejudice is not limited to cases where there is an actual, or potential diminution in the value of the petitioner’s shareholding. Rather, it may extend to a breakdown in the relationship of trust and confidence amongst shareholders as a result of the respondent’s conduct of the company’s affairs and failures of good administration…Where a petitioner has a right to be consulted and involved in the management of the company as a condition of his investment, he may not suffer any financial loss if he is excluded from such consultation and involvement; but he may nevertheless suffer unfair prejudice because he is being denied the full benefit of his investment in the company.”

76. Re Cadman Developments Limited [2005] EWHC 377 (Ch) (“ Cadman ”) is a case on which Mr Boardman particularly relies on behalf of Joe, as concerning a family company but with less extreme facts than the present case. Deputy Judge Philip Sales, as he then was, held that the following all amounted to unfairly prejudicial conduct by the respondent directors: (i) failure to hold regular annual general meetings (“ AGMs ”), in breach of the Articles and their directors’ duties; (ii) awarding themselves remuneration in breach of a pre-existing agreement and equitable constraints and without seeking approval at any general meeting; and (iii) failure to answer the petitioner’s queries about the remuneration and explain the figures.

77. There is also established authority that misapplication of the company’s assets for the benefit of a director or their associates is inherently prejudicial to the minority, whether or not it results in any diminution in the value of their shares. In Re Elgindata (No. 1) [1999] B.C.LC. 959 (ChD) (“ Elgindata ”) , the respondent used company assets for his own benefit and that of his family and friends. Warner J said, at 1002g: “…To my mind it was manifestly conduct on [the respondent’s] part which was unfairly prejudicial to [the petitioners’] interests, and that notwithstanding the fact that, as a result of pressure arising from these proceedings, the accounts of the company were retrospectively adjusted to counteract the benefit that [the respondent] had improperly received”. The judge went on to conclude: “The reason why I have concluded that it was conduct unfairly prejudicial to the petitioners' interests is that it was inherently so. By its very nature the misapplication of a company’s assets by those in control of its affairs for their own benefit or for the benefit of their family and friends, is unfairly prejudicial to the interests of minority shareholders” (1004g). Further, buy out relief was granted due to the risk of future misconduct, because the judge considered that the respondent had a “… propensity for using the company's assets for his personal benefit and the benefit of his family and friends” [1005f-g].

78. Similarly, in Dinglis v Dinglis [2019] EWHC 1664 (Ch) , the prejudicial conduct consisted of a pattern of behaviour of granting loans to companies associated with the respondent, also benefitting him personally, including charging interest calculated only by reference to the borrower’s interests [314-9]. The court accepted the petitioner’s submission that “… even where past conduct has been cured, it can still found an unfair prejudice petition if there is a risk it will be repeated” [332]. Unfairness

79. As to the fourth requirement in s.994(1) , unfairness, the starting point is O’Neill v Phillips [1999] 1 W.L.R. 1092 (HL) (“ O’Neill ”), and Lord Hoffmann’s speech at 1098D-1099B: “[Parliament] chose this concept to free the court from technical considerations of legal right and to confer a wide power to do what appeared just and equitable. But this does not mean that the court can do whatever the individual judge happens to think fair. The concept of fairness must be applied judicially and the content which it is given by the courts must be based upon rational principles… Although fairness is a notion which can be applied to all kinds of activities, its content will depend upon the context in which it is being used. Conduct which is perfectly fair between competing businessmen may not be fair between members of a family… In the case of section 459 [the predecessor to s.994 ], the background has the following two features. First, a company is an association of persons for an economic purpose, usually entered into with legal advice and some degree of formality. The terms of the association are contained in the articles of association and sometimes in collateral agreements between the shareholders. Thus the manner in which the affairs of the company may be conducted is closely regulated by rules to which the shareholders have agreed. Secondly, company law has developed seamlessly from the law of partnership, which was treated by equity… as a contract of good faith. One of the traditional roles of equity, as a separate jurisdiction, was to restrain the exercise of strict legal rights in certain relationships in which it considered that this would be contrary to good faith. These principles have, with appropriate modification, been carried over into company law. The first of these two features leads to the conclusion that a member of a company will not ordinarily be entitled to complain of unfairness unless there has been some breach of the terms on which he agreed that the affairs of the company should be conducted. But the second leads to the conclusion that there will be cases in which equitable considerations make it unfair for those conducting the affairs of the company to rely upon their strict legal powers. Thus unfairness may consist in a breach of the rules or in using the rules in a manner which equity would regard as contrary to good faith.”

80. It has also been said, by the Court of Appeal in Tobian at [22], in relation to directors’ duties, that: “… In addition, the terms on which the parties agreed to do business together include by implication an agreement that any party who is a director will perform his duties as a director. Primary among these duties are the seven duties now codified in ss.171 to 177 of the Companies Act 2006 . Under these duties, a director must act in the way which he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole. There is also the well-known duty to avoid conflicts of interest and duty: a director must avoid a situation in which he has an interest which conflicts with that of the company. Six out of seven of these duties are fiduciary duties, that is, duties imposed by law on persons who exercise powers for the benefit of others. Non-compliance by the respondent shareholders with their duties will generally indicate that unfair prejudice has occurred.” And in the same case, at [44], that: “… the content of fairness is contextual. It is also flexible and open-textured. It is capable of application to a large number of different situations…”

81. In Re Regional Airports Ltd [1999] 2 BCLC 30 Hart J. concluded at 80h-81b that the minority shareholders were entitled to expect that (a) the powers of the board would not be exercised for the ulterior purpose of enhancing the position of one of the directors qua shareholder; (b) they had a legitimate expectation that they would be dealt with on the basis of mutual trust and confidence; and (c) they would be personally consulted and fully informed before being asked to make a decision about a rights issue which would have meant a substantial dilution of their shareholdings. All of these expectations had been breached and the claim of unfair prejudice was therefore made out. Quasi-partnership

82. A particular category of unfair prejudice case which has been recognised by the courts is the “quasi-partnership”, where the understandings between members as to their involvement and the operation of the business are akin to a partnership, meaning that the shareholders (who are sometimes but not always also directors) are subject to equitable constraints similar to those which would apply as between partners.

83. The leading authority on when and how such equitable principles may be superimposed on legal rights is the speech of Lord Wilberforce in Re Westbourne Galleries Ltd [1973] A.C. 360 (“ Westbourne ”) , in the context of just and equitable winding up of a company, at 379E-F: “… The foundation of it all lies in the words " just and equitable " and, if there is any respect in which some of the cases may be open to criticism, it is that the courts may sometimes have been too timorous in giving them full force. The words are a recognition of the fact that a limited company is more than a mere legal entity, with a personality in law of its own: that there is room in company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights, expectations and obligations inter se which are not necessarily submerged in the company structure. That structure is defined by the Companies Act and by the articles of association by which shareholders agree to be bound. In most companies and in most contexts, this definition is sufficient and exhaustive, equally so whether the company is large or small. The "just and equitable" provision does not, as the respondents suggest, entitle one party to disregard the obligation he assumes by entering a company, nor the court to dispense him from it. It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is, of a personal character arising between one individual and another, which may make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way. It would be impossible, and wholly undesirable, to define the circumstances in which these considerations may arise. Certainly the fact that a company is a small one, or a private company, is not enough. There are very many of these where the association is a purely commercial one, of which it can safely be said that the basis of association is adequately and exhaustively laid down in the articles. The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements: (i) an association formed or continued on the basis of a personal relationship, involving mutual confidence - this element will often be found where a pre-existing partnership has been converted into a limited company; (ii) an agreement, or understanding, that all, or some (for there may be “sleeping” members), of the shareholders shall participate in the conduct of the business; (iii) restriction upon the transfer of the members' interest in the company - so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.”

84. In O’Neill, at 1099B-F Lord Hoffmann adopted and applied the same reasoning to the concept of unfairness in s.459 (now s.994 ).

85. In Westbourne at 380A-B Lord Wilberforce, while expressing some caution as to the use of the phrase “quasi-partnership” because a company however small was not a partnership, said it was through the “just and equitable” concept that obligations common in partnership relations might come into play. He continued at 380E: “… The just and equitable provision nevertheless comes to his assistance if he can point to, and prove, some special underlying obligation of his fellow member(s) in good faith, or confidence, that so long as the business continues he shall be entitled to management participation, an obligation so basic that, if broken, the conclusion, must be that the association must be dissolved [that being a winding-up case]. And the principles on which he may do so are those worked out by the courts in partnership cases where there has been exclusion from management.”

86. Cadman concerned a family building company, in which the petitioner and her two brothers were shareholders. The petitioner had no active role in the business, which was run by her brothers (previously with their father). The judge concluded at [89] that the relationship was one of quasi-partnership, even though it did not share all the typical features of one. While there was no agreement that she would be involved in the management, and she had not contributed capital, (a) it had been operated on a quasi-partnership basis between other family members before she acquired her shares; (b) it was then continued “… as a small family company, in which the family relationship would be important alongside the relationship defined in the Articles of Association ”; (c) “ Its affairs were dealt with on a very informal basis throughout, indicating a common understanding on all sides that the Articles of Association did not represent the complete and exhaustive statement of how the relationship between the members and the members and management should be conducted” ; (d) one of the respondents had appealed to the family ties in seeking to resolve the dispute; and (e) there were restrictions in the Articles on the disposal of shares.

87. I agree with Mr Boardman’s submission that Cadman is a comparable example to the present case, and it is one which I have found helpful. Limitation, delay and acquiescence

88. Limitation has not been raised as a defence by Jim. It appears to be implicitly or explicitly accepted by both sides that a 12-year limitation period applies, so Joe can in principle rely on any conduct occurring within the 12 years prior to the presentation of the petition on 4 June 2024. This is on the basis of the decision of the Court of Appeal in Zedra Trust Co (Jersey) Ltd v THG plc [2024] EWCA Civ 158 , concluding that an unfair prejudice petition is an action on a specialty within s.8 of the Limitation Act 1980 and so subject to a 12-year limitation period.

89. Further, Lewison LJ observed obiter at [126] in Zedra that it would normally be inappropriate to strike out a petition merely because of delay if it was within the statutory limitation period. He acknowledged that on particular facts it might be concluded that the claimant had acquiesced to the state of affairs of which he now complained, so that any discretion would not be exercised in his favour.

90. In the present case, Jim has alleged acquiescence by Joe both as to his removal as a director and as to the management and conduct of the affairs of the Company by Jim more generally, but there is no allegation simply of delay. The alleged grounds of unfair prejudice

91. Joe’s case is that from at least 2002, when their Jim bought their sisters’ shares, the Company was operated as a quasi-partnership between the two of them. He says there was a mutual agreement or understanding that they would both be involved in the management of the business, as suited their individual skills and abilities, and that this was in fact how the Company’s business was operated between 2002 and the end of 2012. Thereafter Joe says that Jim has caused him to suffer unfair prejudice in five broad ways: i) Exclusion from management and breach of the agreement as to how the Company would be run between them, including purported removal of him as a director; ii) Breach of his rights under the Company’s Articles of Association; iii) Exclusion from participation in profits of the Company; iv) Failure to provide him with any material information about the Company, other than its statutory accounts; v) Since his exclusion in 2013, managing the Company for the benefit of Jim and his associated companies (especially Mixit and Fleetwood), including undertaking or allowing a large number of substantial transactions which benefited those companies, at the Company’s expense. It is specifically alleged that: a) Secured bank loans were taken out in the Company’s name and used to fund payments to Mixit, Jim or other associated companies of his, which were not in the Company’s interests, were for an improper purpose and where Jim was in a position of undeclared conflict of interest; b) There are transactions between the Company and a pension company, which were to the Company’s detriment; c) A property at 565 Romford Road was sold at an undervalue; d) Various purchases or payments were made from the Company’s account which were unauthorised, not declared, did not relate to it or were not in its interest; e) Jim has stolen £59,000 from Joe via a payment to the Company’s bank account.

92. I will first set out certain overarching findings of fact and law, and then deal with each of the specific heads of alleged unfair prejudice in turn. Overarching findings

93. Here I deal with the following issues: i) Whether there was a quasi-partnership between Jim and Joe from 2002; ii) Whether Joe was properly removed or acquiesced to his removal as a director of the Company in about April 2013; iii) Whether Joe has been excluded by Jim from management and involvement in the Company’s business since March/April 2013. Quasi-partnership

94. In the Re-Re-Amended Points of Defence Jim pleaded that management of the Company was delegated to and/or conducted by Jim alone with Joe’s approval or acquiescence.

95. This was not how Jim’s case was pursued at trial. His position at trial was that Joe was employed by and worked for Mixit, as a transport and plant manager, and so he was not working for the Company. He said that Joe was not bothered about the Company, and was only interested so long as there were no problems.

96. In cross examination he accepted that he and Joe did have conversations about Company business, which were informal, and there were no formal board meetings or minutes kept. He agreed these included discussions about plans for the Company’s business, and that they agreed to manage it together and expand it gradually with the help of funding through mortgages and from Mixit. Ultimately he accepted that there was a “ verbal agreement ” between him and Joe to run the business together and gradually increase it.

97. It is also agreed that until the end of 2012 they both had desks in Mixit’s office and so were working in close proximity, although there is a dispute (which I do not consider it necessary to resolve) as to whether they worked on the same floor.

98. As set out above, Joe’s evidence is that at this time he was involved in the running of the Company’s business in a number of ways, including discussing plans with Jim, carrying out building works to properties and dealing with issues with tenants.

99. I find that at all material times from 2002 until late 2012, the Company was run as a quasi-partnership as between Jim and Joe. In particular I find that: i) This was on the basis of an express oral agreement or understanding between them, that they would both be actively concerned in the management and operations of the Company, including in significant decisions about its business. There was therefore a common understanding between them that the Company would not be run solely by reference to the terms of the Articles of Association, but that the working relationship between them was subject to this wider agreement, importing equitable obligations akin to a partnership as a result. ii) It had been a family company run between various members of the Taylor family (including Lilian, Janis and Shelley) until 2002. From 2002 it was run on the same, family basis, but now only between Jim and Joe. This is the effect of the evidence of Janis and Shelley, which I accept. iii) It was run on an informal basis, typical of quasi-partnerships, with no formal board meetings or minutes, and based on informal conversations between Jim and Joe. iv) Both brothers were in fact involved in running the Company’s business, according to their relative skills and abilities. For Joe this included building works and tenant relations. For Jim this focused on financial decisions, as well as organising building and renovation works using Mixit’s employees and subcontractors. v) It was a business relationship which was run on a basis of trust and confidence between the two of them.

100. My conclusion is that this was without any doubt a classic quasi-partnership, as recognised in the authorities including Westbourne and Cadman, and meeting all the typical characteristics of such an arrangement.

101. There is no dispute that in early 2013 Joe brought an employment tribunal claim against Mixit alleging unfair dismissal in connection with a health and safety issue which he had raised, and that his claim was upheld. Jim agrees that this is so. Jim objects that Joe was only awarded one month salary, but the level of any award is irrelevant for my purposes.

102. I find that the relationship between the two brothers broke down completely because of this incident and the resultant tribunal claim, and that Jim decided at that time, i.e. certainly by about March 2013, that he no longer wished to work with Joe, whether at Mixit or the Company. This is supported by Jim’s own evidence in his witness statement at [45] that “ I knew we couldn’t work together on the board ”.

103. I reject Jim’s contentions that Joe was not really involved in the Company’s business in the period 2002 - 2012, and that there was a relevant disagreement between them in 2011 or at any other time about whether the Company should use mortgage funding. I prefer Joe’s evidence on all these issues, in which he is supported by Janis’ evidence. The position on mortgage funding is that properties were in fact purchased by the Company with mortgages from NatWest, with Joe’s agreement, prior to 2012, so the evidence does not support Jim’s assertion that there was any disagreement between them about this. Removal of Joe as a director in April 2013

104. In March 2013 Joe attended Mixit’s offices, which were also the Company’s registered offices, he says to collect some paperwork relating to the Company. Joe says he and Jim then had an argument. Jim claimed in cross examination (having not done so previously) that Joe was violent on that occasion and had to be excluded.

105. In re-examination Sharon said of this incident that Jim and Joe were both in the middle of her office arguing, and that she shouted at the pair of them to go upstairs and stop acting like kids. I consider that her account most probably reflects the reality of the situation. I conclude that Joe did not behave violently at this or any other material time.

106. As I understand it, this was the last time Joe attended Mixit’s and so the Company’s offices, since neither he nor Jim felt comfortable with Joe doing so after this.

107. On 15 March 2013 Jim sent a letter to Joe described as a “ Requisition to directors to call a General Meeting ”. It was said to require the directors under s.304 CA 2006 to give notice within 21 days of a general meeting at Bracher Rawlins’ office, to consider passing a resolution removing Joe as a director with immediate effect, being a resolution which required special notice.

108. Joe replied to that letter on 6 April 2013, saying that Jim’s proposal for a meeting at Bracher Rawlins’ office was not acceptable, that it had come about because of a reasonable request by Joe for information which Jim had refused, that this was a private family company where they were all their father’s children and he suggested Jim look at his own conduct. He concluded: “ Furthermore it is now more important you allow and not keep blocking my access so I can study the company situation which is my right and is only now practicle [sic] from the registered office. I urge you to adhere to your obligations.” It is notable that Joe took this approach right from the start in April 2013, and it is one he has consistently maintained.

109. Joe’s case is that no response, notice or meeting nor notice of his subsequent alleged removal as a director was sent to him following this letter.

110. In his witness statement, Jim claims he called a meeting, as a shareholder, for 17 April 2013 but that Joe did not turn up. However in cross examination Jim said he didn’t know if a notice was sent out convening the meeting on 17 April 2013, although he subsequently said, “ we wrote to him, I’m sure ”. He said he waited at Bracher Rawlins’ offices on that day and nothing happened, and his solicitor said “ that’s it, you don’t have to worry about it. ” He agreed no minutes of any meeting were drawn up.

111. Neither party has disclosed any notice or letter calling a general meeting on 17 April 2013.

112. The evidence as to whether Jim tried to call a general meeting of the Company for 17 April 2013 is therefore inconclusive. However, on the basis of Jim’s evidence that he waited at his solicitors’ offices, nothing happened and no minutes were drawn up, I conclude that no general meeting actually took place on that occasion (or any other).

113. The Company’s Articles of Association incorporate the regulations in Table A in Part II of Schedule 1 to the Companies Act 1948 (with certain exclusions, variations and additions) (“ Table A ”). Regulation 53 provided so far as relevant that no business should be transacted at a general meeting unless a quorum of members was present, and that the quorum was two, in person or by proxy. In addition regulation 54 provided that if within half an hour of the time appointed for the meeting a quorum was not present, the meeting should be dissolved.

114. Accordingly, even if a general meeting was validly called for 17 April 2013, it was not quorate since Joe did not attend, so no business was effectively transacted at it, whether removal of Joe as a director or anything else.

115. Jim also asserts that Joe has acquiesced in his removal as a director. However, he has been unable to point to any correspondence in which Joe has given any such indication, and certainly Joe’s non-participation in the Company’s affairs after April 2013 cannot be relied upon as amounting to acquiescence given the evidence of exclusion which I will consider in the next section. On the contrary, Joe has referred in correspondence to his “ removal ” as a director having been wrongful, e.g. in his letter of 24 August 2020 in response to the proposed Rights Issue.

116. Furthermore, as Mr Boardman pointed out, Joe was still recorded as being a director in the Company’s accounts for the year ended 30 September 2014, and the filing at Companies House removing Joe as a director is dated 10 April 2015, even though it purported to relate to a removal on 17 April 2013, 2 years earlier. These two factors also suggest that Joe was not made aware of his supposed removal as a director at the time.

117. My conclusion is that Joe has not been removed as a director of the Company and that the record at Companies House of his resignation as a director on 17 April 2013 (or at any time) is wrong and should be deleted. Companies House records should be corrected to record him as having remained a director throughout and continuing. Exclusion of Joe from the Company’s business since March 2013

118. There is no dispute that Joe has not in fact had any involvement in the Company’s business or its management since March 2013. Both sides agree he has not. The only issue is whether this was because he had been excluded by Jim since March 2013, or whether this was merely the result of his own inertia.

119. Joe’s evidence is that after March 2013, Jim stopped engaging with him, sent him no material information about the Company or its business and that he received no financial information other than most but not all of the sets of annual accounts.

120. There is no dispute that there have been no AGMs of the Company at any time, either before or after March 2013. This may not have mattered between 2002 and the end of 2012, when Jim and Joe were having regular informal discussions about the Company’s affairs, but after March 2013 this became another reason why Joe was unable to exercise his rights as a member, find out about the business or hold Jim’s management to account.

121. I have rejected Jim’s assertion that Joe showed no interest in the Company’s business before 2013. I also reject his claim that Joe’s non-participation in the business as a shareholder after 2013 was because he was not interested. My conclusion is that after he had fallen out with Joe, Jim decided to take control of the Company’s business as far as he could and to exclude Joe as much as he could, that he convinced himself that this was better for the business and that this is the basis on which he has operated ever since. I have already concluded that Jim finds it difficult to distinguish his own interests from those of his companies. So far as the Company is concerned, once he had fallen out with Joe, he appears to have concluded that it was also in the Company’s interests for Joe to be involved as little as possible. I reach these conclusions on the basis of: i) The almost total prevention and exclusion of Joe from obtaining any information about the Company, including but not only financial information, except for statutory accounts. Even during these proceedings, it has proved necessary for Joe to make a detailed application for specific disclosure to obtain fairly standard financial records. I infer a decision and intention on Jim’s part to resist providing information and documentation, from this consistent approach which he has taken. ii) Jim’s resistance to providing any financial or other Company information, despite Joe’s requests in correspondence not only with him but also with Simon and Frank for such information, when Joe was saying he could not make informed decisions without it, even for example around the proposed Rights Issue. iii) Janis’ evidence that since 2019 she has repeatedly asked Jim on Joe’s behalf for Company bank statements, and her text messages to Jim on Joe’s behalf (exhibited to her statement) in which she repeatedly requested financial information and documents, all to no avail. I note that in one (undated) text message, Jim replies to Janis: “… There will be no information given across other than accounts. I want you and Joe out of my hair …” Jim referred to her to Simon, but Simon did not disclose any financial information to Joe either, even when asked to do so by Joe. My inference is that Simon did not do so because Jim had instructed him not to, as it seems unlikely that Simon would otherwise have taken this stance. iv) Joe succeeded in obtaining copies of some Company bank statements from NatWest. After Jim discovered this, Joe says Jim instructed NatWest to remove Joe from the mandate and not to disclose statements to him. I accept Joe’s evidence on this.

122. My conclusion is that there is overwhelming evidence in this case that from March 2013 onwards, Jim has excluded Joe not only from management of the Company, but also from any involvement in any capacity, even as a shareholder, save for receipt of statutory accounts when filed. Specific heads of unfair prejudice alleged Head 1: Exclusion from management and breach of agreement/understanding

123. I have already made findings that: (a) there was a quasi-partnership, based among other things on a mutual agreement; (b) Jim purported to remove Joe as a director of the Company in a manner which was wrongful, both because it was not in compliance with the Articles and because it breached the agreement/understanding between them as to how the Company would be run; and (c) from 2013 onwards Joe has been excluded not only from the management of the Company but also from involvement with its business more generally.

124. From 2013 onwards, Jim has therefore been persistently breaching the agreement/ understanding between him and Joe as to how the Company would be run and has been excluding Joe from the management of the Company. His purported but ineffective removal of Joe as a director was just one aspect of this, but it was one which made it easier for him subsequently and wrongly to justify to advisers such as Simon and Bracher Rawlins that there was no need to involve or include Joe or answer his requests for information. Further, it is clear both from Jim’s actions and from his frank acceptance of the position in evidence that he intends to continue to exclude Joe in this way if he can.

125. In doing so, Jim has breached the equitable obligations of trust and confidence which he has vis-à-vis Joe, which are superimposed by reason of the quasi-partnership arrangements on their legal rights in relation to the operation of the Company. This conduct clearly prejudices Joe’s interests as a member and is unfair, as defined in O’Neill.

126. I therefore find this first head of unfair prejudice proved.

127. Mr Boardman also asserts that this exclusion amounts to a breach of Jim’s duties as a director, since it has enabled him to manage the Company’s affairs for the improper purpose of favouring his own or his associates’ interests, in breach of s.171 (b) and/or s.175 CA 2006 . This may well be true, but it is more convenient to consider these aspects under the fifth head of alleged unfair prejudice. Head 2: Breach of Joe’s rights under the Articles

128. Joe alleges that Jim has prevented him from exercising his rights as a member of the Company, because there have been no AGMs since his exclusion and he has not been given notice of any of the important corporate decisions which Jim has taken, other than the proposed Rights Issue.

129. Regulation 47 in Table A requires the Company to hold AGMs. Transitional provisions in CA 2006 state that regulations requiring AGMs are unaffected by the repeal of the statutory requirement for AGMs previously contained in s.366 of the Companies Act 1985 (see Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007/2194, Schedule 3, para. 32). No AGMs have ever been held by the Company and in evidence Jim admitted that he was not aware of the obligations to hold an AGM and lay the Company’s accounts before that meeting.

130. Jim’s pleaded defence is that Joe has suffered no prejudice because he would not have attended or participated in such meetings ([80] of Re-Re-Amended Points of Defence).

131. Joe’s evidence in his witness statement is that “ I would have had something to say on all of the things about which the Amended Points of Claim make complaint, and of which I have been deprived of having any voice” . He was not challenged on this in cross examination and it is supported by what he has said in contemporaneous correspondence, which was persistently to ask for more information in relation to the conduct of the Company’s affairs, indeed to an extent which has clearly frustrated Jim. I therefore accept Joe’s evidence on this point.

132. It is also clearly likely that Joe would have challenged many of Jim’s decisions, for example the decisions to take out the Lloyds Loan in 2016 and the NatWest Loan in 2022, if he had been given full information. At the very least this is because each of those loans was for substantially more than was necessary to clear the Company’s liabilities to its commercial lenders, since each time about £1.7M of the advance was paid straight to Mixit (in the first case to clear the Company’s liabilities to Mixit and in the second as an unsecured loan, for Mixit’s benefit and without Mixit agreeing to pay any interest).

133. As in the Cadman case, I find that this failure to hold AGMs, especially in circumstances where I accept Joe would have wanted to attend and query the accounts and Jim’s decisions as director, prejudiced his interests as a member and was unfair. This second head of unfair prejudice is accordingly proved. Head 3: Exclusion from participation in profits

134. It is common ground that the Company has declared no dividend at any time, either before or after Joe’s exclusion in 2013.

135. Jim’s case is that the Company has never paid dividends because there was at all times “ a capital growth strategy by which profits are reinvested in improvements to existing properties or retained for the purpose of future acquisitions ” (para. 84 of Re-Re-Amended Points of Defence). In cross examination, Simon also asserted that the value of the Company has grown and Joe was getting a benefit even though it was not in cash terms and even though unless there was a distribution he would only get the benefit if he sold his shares. Simon said lots of shareholders do not get a dividend or cash return but benefit from plenty of growth in value.

136. Joe agrees in his witness statement that this was their strategy in the period prior to his exclusion in 2013. He says part of their business plan was to acquire and renovate further properties and use rental income to pay off the mortgages used to buy those properties, and that he agreed with Jim to work to increase Mixit’s profitability so it could provide funding to finance the Company’s growth. He says at [31] that: “Jim and I discussed taking dividends from the Company at some point in the mid-2000s. We did not rule out taking dividends, at an appropriate time in the future; but we agreed that, for the time being, we would leave money in the Company, to allow it to grow. For a similar reason, we took no salary from the Company either. I was happy with this arrangement, at this stage, because Jim and I were each taking a salary from Mixit and benefitting from the Company’s growth.”

137. On the face of it, all that happened here was that Jim continued the pre-existing growth strategy. However, it is also necessary to consider the effect of Joe’s exclusion and whether in reality this was simply a continuation of that previous strategy.

138. In his closing submissions Mr Boardman said the failure to declare or consider declaring any dividend amounts to a breach of the Company’s Articles, specifically Regulation 52, requiring the company to hold an AGM to consider paying a dividend, and Regulations 114-115, requiring the directors to recommend and pay dividends.

139. Regulation 52 in Table A states: “All business shall be deemed special that is transacted at an extraordinary general meeting, and also all that is transacted at an annual general meeting, with the exception of declaring a dividend, the consideration of the accounts, balance sheets, and the reports of the directors and auditors, the election of directors in the place of those retiring and the appointment of, and the fixing of the remuneration of, the auditors.” Regulations 114-115 provide: “114. The company in general meeting may declare dividends, but no dividend shall exceed the amount recommended by the directors.” “115. The directors may from time to time pay to the members such interim dividends as appear to the directors to be justified by the profits of the company.”

140. On the face of it, these Regulations do no more than give the directors the power to declare a dividend, including declaring any such divided at the AGM; the question is whether there is any obligation to do so where the company is sufficiently profitable.

141. In In re A Company (No. 00370 of 1987) ex parte Glossop [1988] 1 W.L.R. the issue for Harman J was whether to grant permission to amend an unfair prejudice and winding-up petition where one shareholder was seeking to argue that the failure of the directors of a small family company to consider granting a dividend in respect of profits, rather than ploughing them back into the company and granting themselves remuneration, amounted to unfair prejudice or grounds for winding up. Harman J concluded that failure to declare a dividend could not per se amount to unfair prejudice to one shareholder, since all shareholders were affected equally (at 1075A). However he considered that the directors did have a duty to consider how much of the profits ought to be distributed to the members, saying: “They have a duty, as I see it, to remember that the members are the owners of the company, that the profits belong to the members, and that, subject to the proper needs of the company to ensure that it is not trading in a risky manner and that there are adequate reserves for commercial purposes, by and large the trading profits ought to be distributed by way of dividends. No doubt in practical terms shareholders will have a difficult case to make if directors, not considering their own personal pocket, not benefiting themselves in some capacity (e.g. by paying out to themselves remuneration in excess of that which should legitimately be paid so that their remuneration is limited to that which would be paid to ordinary people in the market performing those functions), simply pile up profits in the company and do not distribute them by way of dividend. Nonetheless members can, in my view, if those facts were adequately proved, make the company the subject of a petition for a just and equitable winding up; because the proper and legitimate expectations of members have not been applied, but have been defeated” (at 1076C-F). He therefore gave permission to amend the grounds for seeking winding up on this basis, but not to amend the grounds of unfair prejudice alleged.

142. There is good evidence from the Company’s accounts both that it was significantly profitable and that it had or should have had sufficient cash reserves. As at 30 September 2022 its retained earnings were £3,656,625 and at that point it also had substantial cash reserves on its balance sheet (although these reflected the advance on the NatWest Loan that it had just received).

143. As Mr Boardman’s submissions make clear, Joe’s real complaint is that Jim was using the Company’s available cash to make unsecured, interest-free loans to Mixit, to help keep that company afloat. There is strong evidence from the bank statements of a pattern of transferring cash to Mixit when there was sufficient available in the Company’s account to do so. Both Jim and Sharon freely accepted in evidence that there was a general practice of transferring funds between the various company bank accounts to where it was perceived to be needed. Sharon said this was something they had always done, from before she started (which was before 2012). In some cases she said these were payments to cover the Company’s expenses which had been paid by Mixit, such as sub-contractor costs, but some payments were simply in effect cashflow loans. She also confirmed in evidence that there was no agreement between the Company and Mixit relating to the terms of such ad hoc loans; that no security was taken by the Company and no interest was charged or paid. The practice has continued with Fleetwood.

144. Insofar as the Company’s cash and profits were being used to make such ad hoc, interest-free loans to Mixit or Fleetwood, which I find they were, these were not in my view in the Company’s interests. This is because, certainly after the Lloyds Loan was taken out in 2016, the direction of such loans was essentially only from the Company to Mixit/ Fleetwood, and no appropriate terms as to repayment, interest or security were ever put in place. As such I consider this does fall within Harman J’s more unusual scenario of a director who was preferring his own interests, in the form of the companies Mixit and Fleetwood in which he had an interest, at the expense of the Company’s shareholders.

145. I consider this was also a breach of Jim’s duties as a director as codified in statute: i) Under s.172 CA 2006 , to “ act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to— (a) the likely consequences of any decision in the long term …, and (f) the need to act fairly as between members of the company ”; and ii) Under s.175 CA 2006 to “ …avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company ”.

146. Furthermore, given the overlay of additional equitable obligations, arising from the Company’s quasi-partnership nature, I can and do take into account that this is another example of the breakdown of the relationship of trust and confidence with Joe caused by Jim. I have concluded that I can therefore treat this as conduct which has caused unfair prejudice to Joe, and I am not limited as Harman J was to analysing it only as conduct which could justify winding up on just and equitable grounds.

147. Accordingly, I find that the failure to declare or consider declaring a dividend does constitute unfair prejudice, but only insofar as this was the result of available cash from the Company’s profits having instead been lent to Mixit or Fleetwood (or Jim himself). Head 4: Access to information

148. Joe’s position is that he has been provided with no financial or other information about the Company, other than some but not all of its annual, statutory accounts. I have already found this to have been the case, in my overarching findings above. I also accept that Joe made repeated attempts to obtain this wider information, including making requests via Simon and Frank and to Jim, in response to Jim’s letters about the Rights Issue. However, these attempts were unsuccessful.

149. Mr Boardman submits that the purpose of refusing to provide the requested information was to conceal the Company’s records, information and transactions from Joe and to avoid Jim’s obligation to account. Jim’s position has been that Joe took no interest in the Company’s affairs, but I have already rejected this assertion. He has also objected that he has provided thousands of documents to Joe in the course of this litigation, so Joe can no longer have cause for complaint.

150. I note that the accounts for the year ending 30 September 2024 have still not been finalised or filed at Companies House, and so are late. Jim admitted in cross examination that he has applied for extensions for filing those accounts because he did not want to file them until this case was over. He said this was because he did not want to jeopardise the position of the Company if the accounts needed to be corrected to reflect matters which came out in the trial, but it is clear to me that at least part of his motivation has been that he simply did not want to commit himself and be held accountable for the contents of those accounts before the trial was over.

151. I am satisfied that Jim’s intention has been to avoid providing Company information, financial information or records to Joe as far as he can. This is supported by his responses to Janis and Joe. However, when required to disclose documents in the course of the proceedings, he has ultimately done so, even if he has been resistant and Joe complains that the disclosure is substantially inadequate. This is not a case where, for example, it is alleged that documents have been wrongfully destroyed. Ultimately there has proved to be ample evidence within the documents disclosed by Jim to support Joe’s case on unfair prejudice.

152. My conclusion is that this does not suggest that the reason Jim has been resisting disclosure is because he wishes to conceal known wrongdoing; rather he has been resisting and obstructing providing information and documents, both in response to Joe’s requests and within the proceedings, because he does not like being held to account and because this is another facet of the breakdown of his relationship with Joe.

153. Whatever the motivation, Jim’s failure to respond to Joe’s requests for information about the Company’s finances and decisions was a breach of the agreement and understanding between them which was part of their quasi-partnership.

154. Since Joe was not legitimately removed as a director, and so was entitled to inspect the Company’s books of account, it was also a breach of Regulation 123 and 124 in Table A, which provide: “123 The directors shall cause proper books of account to be kept with respect to:— (a) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; (b) all sales and purchases of goods by the company ; and (c) the assets and liabilities of the company. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the company's affairs and to explain its transactions.” “124. The books of account shall be kept at the registered office of the company, or, subject to section 147 (3) of the Act , at such other place or places as the directors think fit, and shall always be open to the inspection of the directors.”

155. Consequently, this was also a breach of Jim’s duty as a director under s.171 (a) CA 2006 , to “ act in accordance with the company’s constitution ”, which includes its Articles.

156. On this basis I find that this was conduct which was unfair to Joe, and it has prejudiced him in that he has, for example, been unable to have any input into the decisions to take out the Lloyds Loan and the NatWest Loan. I therefore find that this head of unfair prejudice is also proved. Head 5: Management of the Company for the benefit of Jim and/or his associates

157. This is one of the most serious and substantial heads of unfair prejudice alleged, and of these the loans to Mixit and to Jim himself are the most substantial. I will consider these first, and then the other transactions under this head.

158. It is not disputed that Mixit was a company controlled by Jim, as director and 80% shareholder, and so it was his associate within the definition of CA 2006 .

159. Jim has not since 17 July 2024 been a director of Fleetwood, when he resigned and was replaced by Sharon, who was then appointed the sole director. Companies House records Jim as having ceased to be a person with significant control on 27 July 2024, and its shares are held by a dormant company, number 13219391 (called Mixit Limited, Sharon again being the sole director). However Jim stated in cross examination that he controlled Fleetwood. He certainly negotiated the sale of Mixit’s assets to Fleetwood, about which Sharon knew little detail, but this transaction was agreed in June 2024 when Jim and not Sharon was Fleetwood’s director. Sharon did say that Jim loaned the funds to Fleetwood for that asset purchase (although the funds may well have come from the Company). She denied in cross examination that Jim had ultimate control of Fleetwood. Her original motivation for agreeing to become a director was to save the jobs and business connected with Mixit, and she said that while Jim had dealt with the asset purchase, going forward he was not in control of Fleetwood. She said he was included in the discussions when Fleetwood made decisions but he did not tell them what to do and she had more say than just as a bookkeeper.

160. Mr Boardman asks me to prefer the evidence of Jim to Sharon on this issue, although more generally he asks me not to accept his evidence. However, where they differ I do prefer the evidence of Sharon.

161. Overall I am not persuaded on this evidence that Jim controls Fleetwood so as to render it his associate in company law terms. However he obviously does have strong influence over it, and he and Sharon certainly regard it as being a company in which he has a vested interest and which is in some way “his”. The distinction may not matter much in this context. Loans and other payments to Mixit

162. There is no dispute that the Company has advanced very large sums to Mixit, both as a result of its borrowing via the Lloyds Loan in 2016 and the NatWest Loan in 2022, and from its own income.

163. Sums paid by the Company to Mixit include: i) £1,755,818 from the Lloyds Loan advance, paid to Mixit in early October 2016. This was not a loan, but rather discharged the liabilities which the Company had previously owed to Mixit. That was lending from Mixit, with the agreement of Joe, to assist in the Company’s pre-2013 growth strategy. As recorded in the intercompany accounts, the terms were that Mixit would not demand repayment. By taking out the Lloyds Loan, this was replaced from the Company’s perspective with a 5-year loan on commercial interest terms of 2.6% over base rate. This was obviously less advantageous to the Company than the previous arrangement with Mixit. Mixit banked with Lloyds and had had a large £6M facility since at least 2010. In evidence Jim explained that by 2016 NatWest had become much less accommodating and he wanted to move the Company’s banking to Lloyds. He also wanted to replace the Company’s NatWest mortgages (even though they had 15 year terms at 1% over base and were not in default). However he said Lloyds would only agree to lend on the basis that the intercompany loan between Mixit and the Company was also discharged. ii) £1,694,600 from the NatWest loan, advanced to Mixit in early October 2022 (so the advance to Mixit is not shown in the accounts for the year ending 30 September 2022, although receipt of the NatWest Loan was) as an interest-free, unsecured loan. In addition, £3,696,369 from the £5.5M advance was used to discharge all liabilities to Lloyds, including the Lloyds Loan. Joe confirmed in evidence that he had no knowledge of this loan at the time. iii) Cash sums transferred from the Company’s bank account to Mixit, in particular as shown in the bank statements for the period October 2022 to May 2024. These derive from the Company’s rental income. The bank statements show many such payments, usually of a few thousand pounds but sometimes a lot more, and often in round sums. The last, of £9,500 was paid on 1 May 2024, a few days before Mixit was put into administration. Sharon’s evidence, which I accept in general terms, was that these payments were a combination of reimbursement of costs and expenses (actual or apparent) of the Company, and cash flow loans to help Mixit.

164. I remind myself that this is a liability-only trial. I am not asked to make specific findings as to the total sums loaned by the Company to Mixit. Indeed I am asked on behalf of Joe not to make particular findings of this sort because disclosure is still incomplete and more will be required to enable the judge at any quantum trial to make comprehensive findings. I therefore make no specific findings as to whether and to what extent the payments from the Company to Mixit referred to in (iii) above were to discharge properly incurred expenses of the Company for which Mixit had paid, for example to sub-contractors engaged by Mixit. However it is clear from the intercompany accounts and the bank statements that a substantial proportion of these payments were simply cashflow loans to Mixit, even if the exact split between cashflow loans and reimbursement of genuine expenses cannot be determined on the information I currently have.

165. There is no doubt that Joe did not agree to any of the loans to Mixit in (ii) and (iii) above (since he did not know about them at the relevant times), and no resolutions were passed by the Company to approve them.

166. I therefore accept the submission made on behalf of Joe that Jim has failed to account to Joe as shareholder for any of these loans, and has failed to declare his interest in them (which he had by reason of his 80% stake in and control of Mixit).

167. As to the use of the Lloyds Loan to discharge the Company’s liabilities to Mixit in (i) above, this was not a loan from the Company to Mixit. Again Joe was not aware of the decision to take out the Lloyds Loan in 2016 (or the decision to use part of it to discharge the Company’s liabilities to Mixit) and did not find out about it for many years, so it is an example of Joe being wrongly excluded from management decisions under Head 1, and not being provided with material financial information under Head 4. However I also need to consider whether it was an example of Jim wrongfully favouring the interests of Mixit over the Company (without making any relevant disclosures to Joe), under Head 5.

168. Mr Boardman submits that I should reject Jim’s explanation for the Lloyds Loan.

169. At [68] of the Re-Re-Amended Points of Defence, it is admitted that Jim, as a director of the Company, bears the evidential burden of explaining transactions whereby Company property has been received by him or for his benefit. This would include those where Company property has been received by Mixit, as his associate.

170. Mr Boardman goes further and submits that Jim, as director of the Company, has a positive duty to demonstrate that he has not derived a significant benefit at the expense of the Company from transactions including the Lloyds Loan. He relies on the recent statement of the Supreme Court in Mitchell v Al Jaber [2025] UKSC 43 at [111] that: “A fiduciary, as steward of his principal’s property or affairs, to whom he owes a duty of loyalty, has the responsibility to account for and explain what has happened in relation to them (and, if necessary, the principal is entitled to ask for a formal account without the need to show any breach of duty, as Lord Millett NPJ explained in Libertarian at para 167). The decision of the majority of this court in Rukhadze (above) that the equitable obligation to account for profits is a duty and not just a remedy is consistent with this responsibility. The principle in In re Brogden, Carruthers and Liberta rian that the fiduciary has the onus of explaining what has happened and establishing that no loss has in fact occurred has developed in recognition of this fundamental aspect of the fiduciary relationship. It also recognises that there is typically information asymmetry as between fiduciary and principal, with the fiduciary being in possession of all the relevant facts.” And at [123] that: “… it was incumbent upon the Sheikh, if he wished to rely upon the 2017 Asset and Liability Transfer in diminution of the loss apparently caused to the Company by his misappropriation of the 891K shares, to prove that he played no significant part in, and derived no significant benefit – at the expense of the Company – from that transfer. This he made no attempt to do, either at trial or in the Court of Appeal…”

171. Mr Boardman also relies on the decision of ICC Judge Barber in Re CSB 123 Limited [2021] EWHC 2506 (Ch) at [2]-[8], where she concluded that: “Overall, the burden of proof is on the Applicant. He must prove his pleaded case. To the extent, however, that the Applicant's pleaded case rests on the wrongful transfer to the Respondent (or those connected with her) of money or other assets belonging to [the company], a two-stage process is involved. First, it is for the Applicant to prove, within the bounds of his pleaded case, the transfer of given sums or other assets belonging to SC1. As part of this first stage, where ownership of the asset or money in question is in issue, it is for the Applicant to establish on a balance of probabilities that the asset or money in question belonged to [the company]. It is only once the Applicant has established the transfer or payment of assets or money belonging to SC1 that the second stage is engaged. At the second stage, the evidential burden is on the Respondent to prove that the payment or transfer was proper”.

172. I accept those submissions. There is no dispute that £1,755,818 was paid from the Lloyds Loan advance to Mixit, which was Jim’s associate. On the face of it, this was a transaction to the clear disadvantage of the Company, in that a non-interest bearing loan from Mixit, of which Mixit had agreed not demand repayment, was replaced by a 5-year loan from Lloyds on commercial terms, bearing interest at 2.6% above base rate. Jim was therefore a fiduciary arranging a payment from his principal, the Company, to an associate, which benefitted that associate since the Company fully discharged a loan to Mixit even though it had agreed not to demand repayment. Jim therefore had a duty to explain to Joe (as the other shareholder) and also the burden of proof in this litigation, to establish that that transaction was in the Company’s interests. I do not consider that his generalised explanation, that he wanted to transfer all the banking to Lloyds, and Lloyds would not accept the continuation of the intercompany liability, demonstrates either that a disbenefit was not caused to the Company or that Mixit did not benefit improperly.

173. Furthermore, I do not accept that the execution by Jim of the Indemnity (after proceedings were issued) affects the position at all. Not only has no payment under the Indemnity been made by Jim to the Company, but it is clear from the authorities I have cited that correction of the financial consequences of preferring the interests of an associate over the Company does not generally undo any unfair prejudice. This is certainly true where there is a risk that the conduct will be repeated in the future. Given the way in which Jim conducts the affairs of his companies, and his inability properly to distinguish their interests from each other or himself, I have no doubt that such a future risk exists here.

174. My conclusion therefore is that all of the transactions summarised at sub-paragraphs 163 (i) to (iii) above are ones which prejudiced Joe as a shareholder in the Company, and they were unfair because (a) Jim has failed to account properly for them, in breach of his duties as a director; and (b) they were contrary to the quasi-partnership arrangements between Jim and Joe, including the agreement underlying them. They were also made in breach of Jim’s director’s duties under s.171 (b) and 175 CA 2006 because they had the improper purpose of favouring companies in which Jim had interests. This sub-head of unfair prejudice is therefore established. Loans from the Company to Jim personally

175. Jim has also borrowed personally from the Company, recorded through his DLA. Paragraph 33.2 of the Re-Amended Petition pleads that these included £68,994 in the financial year to 30 September 2015 and £77,700 in 2017; that £62,118 was owed by him to the Company as at 30 September 2018 and £33,238 as at 30 September 2021. Jim admits the loans, at paragraph 96 of the Re-Re-Amended Points of Defence, that there was no formal declaration of his interest in the loans on each occasion and that by receiving loans without the approval of members of the Company, there was a “ technical breach ” of s.197 CA 2006 .

176. In many cases Jim says that the payments were a mistake. In the amendments to the Points of Defence, he has acknowledged a large number of mistakes which he says need to be corrected in the accounts and other financial records.

177. A notable feature which has become apparent from the available intercompany ledgers to 2023 is that Jim had a practice each year of writing off his own DLA by transferring the balance to Mixit, increasing the debt owed by Mixit to the Company (and the sum owed by himself to Mixit). The ledgers appear to show such transfers in the following sums for the following years: £63,420 in 2014, £42,280 in 2015, £185,243 in 2019, £72,599 in 2020, £7,013 in 2021 and £32,094 in 2022, totalling £402,649.

178. Even if a balancing debt was recorded from Jim to Mixit, this had two practical effects: (a) the debt was changed from one owed by Jim personally to being a corporate debt of Mixit, a company which has now gone into administration and from which no recovery has been possible; and (b) no director’s loans to Jim were recorded on the face of the statutory accounts seen by Joe, albeit loans to connected parties were recorded.

179. It is notable that neither Simon nor Sharon appeared to be concerned when questioned in cross examination about the fact of these DLA transactions. The response of both was that so long as the transactions were properly recorded in the ledger, that was sufficient. Simon was unable to give any explanation for why personal items were being put through the intercompany account, and said more than once that he regarded the transfer of the debt to Mixit’s account as being a “ tidying up exercise ”. I am entirely satisfied that this “ tidying up ” was done with Jim’s approval, and that Simon did so because he was immersed in Jim’s approach that the Company and Mixit were both “his” companies and could be treated interchangeably so long as records were kept.

180. The total amount which has been borrowed by Jim from the Company according to the ledgers appears to be £575,364.52.

181. There is no doubt that Joe has not agreed or acquiesced to the making of these loans. Jim has not at any stage given any account of them or why they were made, and he has admitted failing to declare an interest or obtain shareholder approval for them.

182. Mr Boardman submits that Jim’s purpose in making these loans to himself was the improper one of serving his own interests, with no proper corporate purpose. In the absence of any proper explanation for them, I accept that submission.

183. I conclude that these loans to Jim were prejudicial to the Company’s interests, especially given the DLA transfers to Mixit which have prevented their recovery, and that they were unfair, for the same reasons as set out at paragraph 174 above. Other transactions between the Company and Mixit

184. The intercompany ledgers and bank statements also record a large number of recharges from Mixit to the Company. Sharon was responsible for the Company’s bookkeeping for a period which was about 2017 to 2020/2021. After the proceedings were issued, Sharon started working on the financial records again and loaded them onto Sage from 1 October 2023 onwards.

185. Sharon and Jim explained that since the Company has no employees and is not registered for VAT, staff were engaged by Mixit (and since 2024 by Fleetwood), including for sub-contractors, making CIS tax payments, and that VAT-able supplies were made to Mixit/Fleetwood, with the Company’s costs then being recharged to it. This included charges for Sharon’s own time, although the amount charged for this and whether it was charged at a consistent rate (possibly 20%) is unclear. It was also accepted by Sharon and Simon that the recharges included a profit element to Mixit, apparently 10% although again this cannot be confirmed from the available records.

186. In general terms I accept that explanation, but of course it does not follow that all the recharges recorded were properly made.

187. Sharon explained in cross examination that each property, of which there were maybe 50, had its own nominal code on Sage, to which any costs would be recharged, with a receipt being kept. However this included properties not owned by the Company but by Jim, or by another associated company such as a Chelsea & Kensington Contracts Ltd (“ C&K ”), which is owned and controlled by Jim’s daughter Eron Taylor. For sub-contractors, the net sum would be paid through CIS, and recharged, with the Company also paying the 20% tax.

188. In addition, there was a company credit card which has always been registered to Fleetwood (even when that company was dormant). Payments for example for building supplies were made by sub-contractors using the credit card. Sharon received the credit card statements and would recharge costs referable to the Company’s properties to the Company. Again, in general terms I accept this was the practice. However, as Sharon openly acknowledged in evidence, she could not remember and was not in a position to explain each of the transactions and whether they were justified or supported by e.g. receipts (none of which have been disclosed).

189. The intercompany ledgers (disclosed in November 2025) appear to record that Mixit recharged the Company a total of £1,886,900 for the period from 2012 to 2023. The amounts vary very considerably from one year to the next and were not made in every year. They appear to be as follows: £30,976 in 2012, £21,115 in 2013, £216,817 in 2017, £494,154 in 2018, £103,600 in 2019, £275,858.62 in 2020, £273,338 in 2021, £251,041 in 2022 and £220,000 in 2023.

190. Mr Boardman submits that the way in which the amounts differed so markedly from one year to the next means that they cannot be for regular maintenance. He also says that no schedules, receipts, invoices or other documents explaining these sums or how they have been calculated have been disclosed. For example, there is no documentation relating to the sums incurred for sub-contractors, or for when or on what they worked. When she reviewed the sums recorded on the bank statements as paid by the Company to Mixit, Sharon commented that certain items looked like sub-contractor payments, from the dates and amounts, but she had no certainty about this or supporting records available in court. In addition, given that the nominal accounts are for properties not owned by the Companies, there is a real risk that some of the recharges actually related to works on properties which were not the Company’s and so should not have been recharged to it.

191. I have no doubt that some of these recharges could be justified as genuine and reasonable expenses of the Company, and I accept that Sharon has been making a genuine effort to recharge the Company’s costs to it. However neither she nor Joe, nor I, have any visibility on what the charges related to, how they have been calculated or whether they are supported by any documents. There was certainly no agreement with Joe as to how expenses were be recharged by Mixit, an associated company of Jim’s, whether before or after 2013. While Joe might be taken to have acquiesced to the position before March 2013, he cannot be said to have done so after that date.

192. These recharges are therefore transactions with an associate of Jim’s for which Jim has not accounted, in respect of which there has been no declaration of interest or approval by Joe and which are likely at least in part to have been motivated at the very least by providing income or cashflow to Mixit.

193. As such, I conclude that in principle such recharges prejudiced Joe’s interests in the Company and were unfair, for similar reasons to the loans to Mixit. However in the case of the recharges, Jim should have the opportunity, by disclosure in advance of or at the quantum trial, of justifying the amount and purpose of those recharges, retrospectively. Nevertheless for the purposes of liability I find that this sub-head of unfair prejudice is also established. Loans from Jim’s pension

194. The Company’s ledgers record that it has borrowed sums from the Mixit Pension Fund (the “ Pension ”). While it was pleaded in the Defence that this was because the Company had limited sources of funding, in his statement Jim said that “ [t]he Pension doesn’t actually have its own bank account. Doing things this way was easier to manage, and it helped with Jamett’s cash flow. ”

195. However, the Company has been charged interest by the Pension on this borrowing, and the total borrowing increased from £149,977.29 on 30 September 2013 to £256,899.67 on 30 September 2023 as a result of the addition of interest, at a rate said to have varied between 2.5% and 4% p.a.. Subsequently the Company’s account has also been used to collect rent from properties owned by the Pension, with the result that the debt appears to have increased to £649,462.25 (plus a further £685.28 since the last ledger), still apparently incurring interest.

196. No explanation has been given for the continuation of this borrowing from 2013, over a period when financial records show that the Company would have been able to repay it. On the face of it, the Company has been charged interest for a loan it did not need, and more recently has acted as a collecting agent for the Pension’s properties, without payment and with interest still apparently being charged on the outstanding balance. To the extent that sums have effectively been lent on to Jim or Mixit, this again cannot have been for the Company’s purposes.

197. I accept that Joe was not aware of this borrowing and did not approve it. It is a loan in which Jim has an interest, since the Pension is for his benefit, but no interest in the lending has been declared by him and no account given by him of it. In cross examination Jim was unable to give any explanation as to why this was in the interests of the Company, simply saying that this was just the way the accounts were done.

198. My conclusion on this evidence is that the transactions with the Pension were not in the Company’s interest and prejudiced Joe’s interests as a member. They were unfair since they were unapproved, have not been properly accounted for and benefitted Jim’s associate, the Pension instead. This sub-head of unfair prejudice is also therefore proved. Transactions between the Company and Fleetwood

199. There are a number of payments made by the Company to Fleetwood recorded on the Company’s bank accounts or reflecting credit card statements in Fleetwood’s name which were discharged by the Company. On behalf of Joe these are said to total £21,235 shown on bank statements and £98,814 on credit card statements. The intercompany ledgers between the Company and Fleetwood also record an opening balance as at 30 September 2013 which Joe says is unexplained.

200. Sharon’s evidence was that the same arrangements for recharging continued after Mixit’s administration but with Fleetwood, because the Company was not set up for PAYE and could not directly deal with payments for CIS sub-contractors. The same arrangements for payment for materials using the credit card in Fleetwood’s name also continued, with the card in particular being used by a sub-contractor called Andrew. She confirmed that she had a standing instruction from Jim to cover the credit card bill with a transfer from the Company.

201. In general terms the same conclusions apply to these recharges and transfers as to the Mixit transactions, and I also find that Jim intends to continue to operate in this way. While many of them may relate to legitimate expenditure of the Company, no account of them has been given by Jim as director. While I do not have sufficient evidence to conclude that Fleetwood has been an associate of his since July 2024, it is a company in which Jim is interested to some degree and over which he has some degree of control, as he and Sharon acknowledge. As such I am satisfied that transactions which benefit Fleetwood will also benefit him. No explanation has been provided by or on behalf of Jim of the individual transactions.

202. My conclusion is therefore the same for these transactions as for the Mixit recharges, that is, in principle they prejudiced Joe’s interests in the Company and were unfair. However again Jim should have the opportunity, by disclosure in advance of or at the quantum trial, of justifying their amount and purpose, retrospectively. Nevertheless I find for the purposes of liability that this sub-head of unfair prejudice is established. 565 Romford Road

203. This property was sold by the Company on 30 November 2017 for £495,000. Joe claims that this was a sale at an undervalue because the value recorded in the Company’s books was £850,000 and the profit and loss account for the y/e 30 September 2018 reported a loss on disposal of fixed assets in relation to the sale, of £129,174. The complaint is that the decision to sell the property for this sum and so the loss is unexplained.

204. Jim said in evidence that the valuation of £850,000 was one he had estimated himself, but that HMO legislation (meaning it would require a property licence) and his inability to get planning permission for a suitable development meant it was not worth keeping. He said he put it on the market and the price for which it sold was its market value.

205. Mr Boardman submits that on the basis of that evidence I cannot find that the sale was at an undervalue, and I agree. On the face of it, the property sold for its open market value.

206. However he submits that the transaction is still a ground of unfair prejudice because Jim as director of the Company has failed to give a proper account of the transaction, in breach of duty, which prejudices Joe unfairly even if there was not in reality a loss on the sale.

207. I accept that submission in circumstances where the starting point is that the Company’s accounts record a loss on the sale and no sufficient explanation and correction has in my view been given by Jim as to why that is inaccurate. However, I consider that Jim should have the opportunity, by disclosure in advance of or at the quantum trial, of providing a full explanation for it. Payments to Bracher Rawlins

208. On 11 October 2022, a total payment of £419,562.40 was made to Bracher Rawlins from the NatWest loan advance. It was made for the purpose of purchasing a property at 6 and 6A Marion Crescent, but this was ultimately abortive, as Jim confirmed in evidence.

209. However £39,390 from the advance was retained by Bracher Rawlins to cover fees on other files. Paragraph 62.7 of the Re-Re-Amended Points of Defence pleads that “£39,390 was applied to fees outstanding on four of Bracher Rawlins LLP’s files … When the accounts for the year ended 30 September 2023 are finalised, the sums applied to client files other than that of the Company will be debited to the DLA .”

210. Bracher Rawlins were the Company’s solicitors (although they have also acted for Jim, in the present proceedings). On the limited evidence available, I cannot reach any conclusions as to what the fees related to, but I do not consider I can conclude that this was a payment made to or for the benefit of Jim or his associate. As such I am not satisfied that this £39,390 payment was contrary to the interests of the Company or prejudiced Joe’s interests and I do not find this sub-head proved. Of course, if the bills related to files that were not the Company’s, then the appropriate corrections will need to be made to the relevant financial records if this has not been done already, and accounted for in the quantum trial. Payments to valuers C Bridgeman and SU Dobbin

211. Payments totalling £10,800 were made to SU Dobbins on 20 November 2019 and 17 February 2020, and of £6,000 to C Bridgeman. Jim confirmed in evidence that both are firms of valuers and that this was a valuation relating to 12 properties and was for a total of about £10.2M.

212. Ultimately Jim accepted in cross examination that this valuation was obtained by him for the purposes of the Rights Issue. As such, this was not for the benefit of the Company, but for his own benefit in his capacity as a shareholder. Jim also admitted in cross examination that the purpose of the Rights Issue was to dilute Joe’s shareholding to below 25%, because it had proved difficult for the Company to obtain lending in the absence of Joe’s consent because his shareholding was above 25%.

213. I am satisfied therefore that the cost of these valuations was incurred in Jim’s personal interests and not in the Company’s. I am also satisfied that they were not approved or known about by Joe and no account of them has been given by Jim to Joe.

214. As such, I am satisfied that these transactions were unfairly prejudicial to Joe’s interests as a shareholder, and this sub-head of claim is proved. Rossendales/Marston Holdings

215. This sub-head relates to 3 payments totalling £6,947. Jim pleaded that these related to overdue Council Tax in respect of 65B Fairlop Road in Waltham Forest which was owned by the Company, an explanation which has not been accepted by Joe. Jim disclosed a notice of enforcement dated 3 October 2019 for £2,091, and said in his witness statement that these were payments to a debt collection agency, Marston Holdings Ltd.

216. Jim said in evidence that although the tenant was responsible for the Council Tax, they had absconded and so the local authority had come after the Company.

217. In my view these payments most likely do relate to legitimate expenses of the Company, given the paperwork which has been made available, and I do not find this head of alleged unfair prejudice proved. Rental income from Longfield Avenue properties

218. This sub-head of claim relates to sums for rental income in respect of 30, 30A and 30B Longfield Avenue, which have been received by the Company but credited to Jim’s DLA. Joe alleges that since the property licences and rental agreements for these properties are in the Company’s name, this rental income should properly be treated as belonging to the Company.

219. Jim is the registered proprietor of these properties, which were bought in 2007, in his personal name. Mr Boardman submitted that I am not in a position to determine who owns these properties. However, they were purchased in Jim’s name at a time when relations between Jim and Joe were good and long before the current dispute arose. While the disclosed tenancy agreements (which are dated far later, in 2021) are made with the Company, this would be consistent with either a sub-let from Jim to the Company or indeed an error by Jim’s daughter, as he suggested.

220. On the basis of this evidence, I have concluded that these properties belong to Jim, as recorded at HM Land Registry from 2007. In my judgment Joe’s unwillingness to accept this is an indication primarily of the depth of distrust which now exists between the brothers.

221. Insofar as those properties have been managed by the Company, this has therefore been on Jim’s behalf. While he may have been entitled to the rental income, an account should have been given by him for time and management costs of the Company in doing so.

222. I therefore accept what in effect was Mr Boardman’s secondary case, which was that in failing properly to declare or account for his interests in this respect, Jim has favoured his own interests over Joe’s in a way which is unfairly prejudicial to Joe. To that limited extent I find this sub-head of unfair prejudice in relation to the Longfield Avenue properties proved. Alleged theft of £59,000

223. Joe alleges that Jim stole £59,000 from him by forging Joe’s signature on a cheque drawn on Joe’s bank account in favour of the Company.

224. In cross examination Jim denied forging Joe’s signature, or that any forgery was at his instigation, but said he had asked Joe to sign the cheque in relation to a property in Albany Road which Joe had never paid for. He said he asked an employee to go to Joe’s house and she came back with the cheque signed.

225. In closing submissions Mr Boardman acknowledged that there was not a lot of evidence on this issue, saying Jim had refused to plead to it or give any disclosure. When asked to explain why it was said to be an example of unfair prejudice, Mr Boardman said that because the cheque was paid to the Company, it related to Jim’s management of the Company.

226. Whatever the position with the alleged forgery of the cheque, as to which I make no findings, I am not satisfied that this would be a matter which prejudiced Joe’s interests in relation to the Company as opposed to being a personal dispute between Jim and Joe. I do not therefore find this head of unfair prejudice proved. Payments to Les Petits Jardins

227. Mr Boardman confirmed in closing submissions that no allegation of unfair prejudice was pursued in relation to the payments to this firm. Conclusions

228. In summary, I find that Joe’s unfair prejudice claim succeeds in the following respects: i) Exclusion from management and from any involvement with the Company’s business from about March 2013 onwards, the Company being a quasi-partnership where there was an agreement or understanding that Jim and Joe would both be involved in running the business; ii) Breach of Joe’s rights under the Articles of Association, in particular by failing to hold any AGMs; iii) Exclusion from participation in profits and failure to declare or consider declaring a dividend, but only insofar as this was the result of available cash, derived from the Company’s profits, having instead been lent to Mixit or Fleetwood (or to Jim himself); iv) Refusing to provide and obstructing access to any information about the Company, including financial information, save for filing statutory accounts for the years up to 30 September 2023; v) Managing the Company’s business for the benefit of Jim and/or his associates or companies in which he was interested, rather than for the Company’s members, in particular in the following respects, which also breached his duties as a director: a) Lending large sums of money to his associated company, Mixit, on terms which were disadvantageous to the Company and latterly where Mixit was becoming insolvent, as Jim was aware, so no recovery has been possible; b) Discharging an interest free loan from Mixit, where Mixit had agreed not to seek repayment, and replacing it with a 5-year fixed term loan on commercial interest terms which was in any event greater than the Company needed; c) Lending sums to Jim personally which were not declared and of which no account has been given, interest-free, and then transferring these liabilities to Mixit, thereby obscuring them and preventing recovery when Mixit became insolvent; d) Causing significant recharges to be made from the Company to Mixit without any proper account or explanation; e) Lending sums from the Pension to the Company which the Company did not need, failing to repay them and charging interest to the Company on those sums, and using the Company to collect rent on behalf of the Pension without payment or proper account for its services; f) Causing recharges and/or other payments to be made from the Company to Fleetwood without any proper account or explanation, Fleetwood being a company in which Jim has an interest; g) Failing to give a proper account of the loss apparently made on the sale of 565 Romford Road; h) Making payments to valuers C Bridgeman and SU Dobbin for valuations in relation to a proposed Rights Issue, which was in Jim’s personal interest as a shareholder and not for the Company’s benefit; i) Failing properly to account for services rendered by the Company in respect of the Longfield Avenue properties which are owned by Jim personally.

229. There will need to be a further hearing to deal with consequential matters and give directions for the quantum trial, unless these can all be agreed by the parties. The strike out application

230. Mr Boardman submits that since Jim withdrew all offers on 18 November 2025 when he began acting in person, his strike out application can no longer be properly pursued. He refers me to the decision in Griffiths at [161] where Deputy ICC Judge Curl KC said: “In my judgment, any suggestion that the Petitions should be dismissed on similar grounds to those in O’Neill v Phillips [i.e. because there has been an offer to buy the petitioner’s shares] falls at the first hurdle: there is no evidence of any firm commitment by Tudor to buy Joy’s shares and no agreement has been reached over the mechanism to be used to value them. The offer discussed by Lord Hoffmann in O’Neill v Phillips at 1106D had been made pursuant to an undertaking to the court in terms scheduled to a consent order. It was to purchase the shares at a price to be agreed or in default fixed by a chartered accountant as valuer. There is no similar binding offer in this case; rather, it has been repeatedly emphasised on behalf of Tudor that his offer to purchase is subject to contract and that certain points remain to be worked out…”

231. I accept that submission. Since there are no live offers before me by Jim to buy Joe’s shares, the strike out application similarly falls at the first hurdle. In any event, Jim was clear in his written and oral submissions that he had now “… decided to go along with the case win or lose the Judge will decide …” and he did not suggest that he now wished to pursue the strike out application.

232. Furthermore, given the findings I have made as to the inadequacy of the financial and other Company information provided to date, I consider that it would have been difficult for Joe properly to assess any such offer, and I have also seen no evidence as to how Jim would finance any such share purchase.

233. I therefore dismiss the strike out application.