COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
Mr. John Powell Q.C. (Sitting as a Deputy High Court Judge)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE MANCE
LORD JUSTICE KEENE
| PHILIP ROSE
|- and -
|LYNX EXPRESS LTD. AND BRIDGEPOINT CAPITAL (NOMINEES) LTD.
Mr. Robin Knowles Q.C. and Miss Lucy Frazer (instructed by Messrs Travers Smith Braithwaite of London) for the Respondents
Hearing dates : Tuesday 9 March 2004
Crown Copyright ©
Peter Gibson L.J.:
"The court may make an order under this rule only where
(a) the respondent is likely to be a party to subsequent proceedings;
(b) the applicant is also likely to be a party to those proceedings;
(c) if proceedings had started, the respondent's duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and
(d) disclosure before proceedings have started is desirable in order to
(i) dispose fairly of the anticipated proceedings;
(ii) assist the dispute to be resolved without proceedings; or
(iii) save costs."
"[Bridgepoint] and/or (as the context shall admit) any person to whom any A Ordinary Shares or B Preference Shares are transferred and/or allotted and issued and, where any such shares are held by a bare nominee for a person, in respect of those shares, that person shall be the "Investor" for these purposes."
"A reference in these Articles to any transfer of any share in the Company shall mean the transfer of either or both of the legal and beneficial ownership in such share and/or the grant of an option to acquire either or both of the legal and beneficial ownership in such share and the following shall be deemed (but without limitation) to be a transfer of a share in the Company:-
2.6.1 any direction (by way of renunciation or otherwise) by a member entitled to an allotment or issue of any share that such share be allotted or issued to some person other than himself;
2.6.2 any sale or other disposition of any legal or equitable interest in a share (including any voting right attached thereto) and whether or not by the registered holder thereof and whether or not for consideration or otherwise and whether or not effected by an instrument in writing; and
2.6.3 any grant of a legal or equitable mortgage or charge over any share (other than A Preference Shares or A Ordinary Shares held by Philip Rose or his Related Persons)."
It is to be noted that while Art. 2.6 commences by defining any transfer of any share as including "the transfer of . the . beneficial ownership in such share," the disposition of "any . equitable interest in a share" is deemed by Art. 2.6.2 to be a transfer of a share.
"10.1 Notwithstanding any other provisions of these Articles, a holder of one or more Ordinary Shares shall not without prior Investor Consent (i) serve a Transfer Notice in respect of any such shares under Article 11 or (ii) effect a transfer (except a transfer in accordance with Articles 12.1 or 13 or 14) of such shares.
10.2 Notwithstanding any other provisions of these Articles, no transfer (other than a transfer of A Preference Shares or A Ordinary Shares held by an Investor or an Investor Associate) shall be made, without prior Investor Consent, by any member holding more than one class of shares in the Company unless such member also transfers a proportionate number of shares of all other classes held by such member ."
"11.1 Except in the case of a transfer pursuant to Articles 12, 13 or 14, a member who wishes to transfer any shares ("Vendor") shall give notice in writing of such wish to the Company ("Transfer Notice"). Each Transfer Notice shall:-
11.1.1 relate to one class of shares only;
11.1.2 specify the number and class of shares which the Vendor wishes to transfer ("the Sale Shares");
11.1.3 specify the identity of the person to whom the Vendor wishes to transfer the Sale Shares ("the Proposed Transferee");
11.1.4 specify the price per share ("the Sale Price") at which the Vendor wishes to transfer the Sale Shares;
11.1.5 be deemed to constitute the Company the Vendor's agent for the sale of the Sale Shares at the Sale Price in the manner prescribed by these Articles; and
11.1.6 not be varied or cancelled (without prior Investor Consent)."
"12.1.1 if an Ordinary Share or a B Ordinary Share to any person with Investor Consent;
12.1.5 if an Investor . to any person who will hold the shares only as a nominee for such Investor . or if a nominee of an Investor . to such Investor ."
"all of the shares in the Company held by a Leaver, or to which the Leaver is entitled, on [the date on which any person becomes a Leaver]."
By Art. 13.2:
"Whenever any person becomes a Leaver, the provisions of this Article 13 shall apply notwithstanding the other provisions of these Articles . If this Article applies, the Leaver will be deemed to have given a Transfer Notice to the Company indicating that he wishes to transfer such number of Leaver's Shares as shall be determined . pursuant to Article 13.3."
Art. 13.3 then sets out the number of shares to be the subject of the deemed Transfer Notice.
"Thus the effect of Article 11(1) taken together with the deeming provision in Article 2.6.2 is to require a member who owns the legal interest in some shares and an equitable interest in other shares, the legal interest in which is vested in another member, to give notice to Lynx of the intended transfer of that equitable interest."
(1) contractual documents whereby a beneficial interest in the relevant shares was transferred or those parts of such documents which indicated the fact and date of the transfer, the name of the transferee and the price paid;
(2) insofar as either Lynx or Bridgepoint contended that any such transfer fell within any categories of transfer excepted from the relevant notice requirement, documents which supported or adversely affected that contention.
The arguments on the appeal
"If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it."
"in the case of the restriction of transfer of shares I think it is right for the court to remember that a share, being personal property, is prima facie transferable, although the conditions of the transfer are to be found in the terms laid down in the articles. If the right of transfer, which is inherent in property of this kind, is to be taken away or cut down, it seems to me that it should be done by language of sufficient clarity to make it apparent that that was the intention."
The principle there enunciated is not in dispute.