17th Jan 2022
Richard Samuel (instructed by Peacock & Co Solicitors) for the Respondents
Mrs Justice Joanna Smith:
This is an appeal against the decision of ICC Judge Burton (“the Judge”) of 31 July 2020 dismissing an unfair prejudice petition (“the Petition”) under section 994 of the Companies Act 2006 (“the 2006 Act”). The decision followed a five day trial at which evidence and argument was heard in respect of eight general allegations, many including groups of connected complaints, said to amount to unfair prejudice arising in the context of the management of the fourth Respondent (“the Company”), a private management company set up for the purposes of owning the freehold in, and managing, a road (“the Road”) at Prospect Place, Wimbledon, London SW20.
Prospect Place is a private estate (“the Estate”) made up of 8 freehold residential houses whose owners each hold one of the 8 issued shares in the Company. In April 2010, the Second Appellant (“Mr Chandrasekaran”) and his wife moved into 7 Prospect Place (“7PP”) as tenants. On 15 January 2016, 7PP was purchased by the First Appellant (“Lily”) a Jersey company which holds the legal title to 7PP under a nominee agreement. Lily holds one share in the Company. Mr and Mrs Chandrasekaran are now the beneficial owners of 7PP, their family home, which they occupy with their three children. It was common ground at trial that, for the purposes of section 994 of the 2006 Act, Lily’s interests could include the interests of Mr and Mrs Chandrasekaran.
The Petition arose out of the manner in which Mr and Mrs Chandrasekaran, considered they had been treated by the other owners of property at the Estate since they moved in to 7PP. In particular, (i) the First and Second Respondents (respectively “Mr Stonebridge” and “Mr Vogt”), each owners (with their respective wives) of property at the Estate, each holders of one share in the Company and the Company’s only current directors; and (ii) the Third Respondent (“Mr Joseph”), owner of 3 Prospect Place, a member of the Company and director of the Company between 5 March and 24 September 2018.
In the sad and extremely unusual circumstances of this case, I am told that the Judge’s decision (“the Judgment”) has not enabled the Appellants to draw a line under the historic events which prompted the Petition (as they had hoped); hence this appeal. It is their view that the outcome of the Judgment on one issue raised in the Petition (“the Gardener Issue”) has instead served to mirror what they perceive to be a persistent failure on the part of the Respondents properly to engage with, and address, that issue. The Judge refused an application for permission to appeal, as did Fancourt J on the papers, but permission in respect only of the Gardener Issue was obtained from Adam Johnson J on 26 March 2021.
Notwithstanding that the Appellants seek no financial relief, the appeal on the Gardener Issue has been extremely hard fought. The Appellants have been represented by leading and junior counsel and have relied upon a 25 page skeleton argument and numerous authorities. Their oral submissions were divided between submissions directly addressing the issues on the appeal (made by Mr Lightman QC) and submissions addressing the existence of racist conduct in connection with the Gardener Issue (made by Ms Banton). The Respondents have also been represented by two counsel (Mr Samuel, who appeared below and Ms Masood, who focused on the allegations of racist conduct), themselves relying on a lengthy skeleton argument. The submissions at the hearing from all four counsel ran well over their allotted time and it was necessary for the Appellants’ reply submissions to be provided to the court in writing. I am bound to say that I very much doubt that approaching the appeal in this way has assisted in returning much-needed harmony to the Estate or in mending fractured relationships between neighbours.
The Judge resolved the Gardener Issue in four paragraphs of her extremely lengthy (258 paragraph) and comprehensive Judgment, albeit also dealing elsewhere with matters relevant to that resolution. Before I turn to consider the Appellants’ complaints in relation to these paragraphs, I need to begin by setting out rather more of the history to the Gardener Issue.