Aziz v B & S Partnership Limited and Ors [2023] EWHC 658 (Ch)
In 2009, the Claimant’s 25% shareholding in a property-owning company had been transferred to the name of his lawyers, Bhandari & Co. The shareholding was subsequently transferred to the principal, Mr Bhandari. Mr Bhandari died in 2016. His widow, who inherited the shareholding, sold it to the Second and Third Defendants. The Claimant alleged that the transfer had taken place without his knowledge or consent and asserted that he was still beneficially entitled to the share. He brought a series of claims in damages (for breach of fiduciary duty, unlawful interference, unlawful means conspiracy and conspiracy to cause harm) and sought rectification of the register of members pursuant to section 125 of the Companies Act 2006.
Following a four-day trial in the Chancery Division, his claims were rejected in their entirety. The Judge found that the Claimant had falsified records, lied and taken steps to hide his assets. On the evidence, the Judge found that in fact Mr Aziz had deliberately transferred his share in 2009 and, indeed, had never been beneficially entitled to it in the first place. There was no merit in any of his claims against the Defendants.
As for the claim to rectification, there was obviously no entitlement in circumstances where the Claimant had consented to the transfer. Even if he had not consented, he had been put on notice by subsequent events and failed to take any action. The Judge held that a claim to rectification was outside the 10-year time limit contained in section 127 of the Companies Act 2006. However, the remedy was discretionary and could be barred by delay. Even if the Claimant had been entitled to rectification, therefore, the Judge would have exercised his discretion to decline to order it. Compensation for the loss of the share (had the Claimant been entitled to it) was time barred.
Sam O’Leary acted for the Second and Third Defendants in successfully resisting all claims against them.
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