​Related Case Studies

  • Business Ownership Dispute after Relationship Breakdown

    Our client, (“AB”), started a relationship with the defendant (“CD”) in or about 1996.  Some time in 2002 the Parties decided to purchase land, (“the Property”), with the express intention to develop the land for the purposes of setting up an equestrian business and that all expenditure be shared equally.

     

    On 25th October, 2002 the Property was transferred in to the joint names of the Parties together with a Declaration on Form TR1 that they hold the Property on trust for themselves as Tenants in Common in equal shares.  Each party paid £60,000 towards the purchase of the land, purchase of a barn, caravan and other initial infrastructure costs of the business.

     

    In or around March 2005 the Parties began living together in the caravan on the property. The relationship broke down in 2008 and AB initially moved out into a motorhome on the property but later left to live elsewhere.  Since 2002, AB had carried out substantial works and improvements in furtherance of the business amounting to £72,400.  In addition, AB had contributed towards the expenditure on the Property the sum of approximately £52,000, whilst CD contributed approximately £27,700.

     

    The Parties were unable to resolve their dispute over the property and AB commenced proceedings by way of a Part 7 Claim.  The primary claim was for a Declaration that the Property is held by AB and CD in proportion to their contribution.

     

    At the adjourned Hearing we argued that CD in her Defence had expressly and specifically pleaded her agreement that the Property had been purchased in equal shares as a business venture and that all expenditure was to be shared equally between the Parties.  In the premises this was a commercial venture and thus distinct from the past case of Clarke v. Harlowe.  In Clarke v. Harlowe His Honour Judge Bahrens suggested that in cohabitation cases a breach of some contractual obligation is required before equitable accounting could come in to play and only in respect of the period following the termination of the relationship. In contrast our client’s claim was for breach of agreement between him and CD and that this reversed the legal status of the tenancy in common in equal shares and that the Parties became tenants in common in proportion to their contributions and that equitable accounting should take effect immediately from the date of the breach.  The District Judge could not determine this and adjourned the Hearing before a Circuit Judge.

     

    In the interim the parties were able to arrive at a solution following a full day’s Mediation Hearing.  Our client purchased CD’s interest in the Partnership for the sum of £155,000 with CD transferring all her legal interest in the property to our client.  In addition CD will transfer all equipment belonging to the Partnership to our client.  
     
  • Removal of Nominee Shareholder
    Our client was the beneficial owner of an investment company incorporated in the UK. The company’s shares were held in the name of a nominee shareholder, who was also a director of the company, under the terms of a declaration of trust. The beneficial owners instructed us with a view to commence proceedings against the nominee shareholder when, in breach of his obligations under the deed of trust, he refused to transfer the shares to the beneficial owners upon their request. 

     Petra advised the clients that as beneficial owners under the declaration of trust they were entitled to sign stock transfer forms and pass resolutions. The clients were therefore, with our assistance, able to remove the nominee as director and appoint a new director, who resolved to register the stock transfer forms executed by the clients, transferring the shares to the beneficial owners without the need to commence court proceedings. 

     The pragmatic approach to this matter meant that the need to commence costly and time consuming court proceedings was avoided. Instead, Petra made best use of the provisions in the declaration of trust and the powers granted to shareholders of a company, under the articles of association, to achieve a speedy and cost effective resolution.
     
  • Family Dispute Resolved
    David acted for an elderly lady who ran an agricultural partnership with her son.  The partnership was originally set up as a family business with father, mother and eldest son in order to promote the family business of dairy and arable farming. There was no formal partnership agreement.

     Unfortunately, the eldest son caught a debilitating disease and his health deteriorated rapidly.  Also at that time, the father died.  The son outlived the father by a matter of days and was pushed by his wife, the daughter-in-law, to dissolve the partnership, which had been a partnership at will with no form of documentation.  

     The daughter-in-law sought the dissolution and winding-up of the partnership and took very aggressive steps to obtain an inflated share of the business.  This was of great concern to the elderly lady client.  David guided this dispute away from expensive Court proceedings to a mediation.

     The effect of this was that the client was able to cherry-pick some of her favoured assets and not have them sold in order to meet a Court-induced winding-up.

     The dispute was concluded a lot quicker than protracted litigation would have allowed, and with a great saving of costs. 
  • Quickly Ending Frivolous Proceedings
    David was instructed by a firm of accountants, who had become members of an association of accountants providing aggressive tax planning schemes to high net worth individuals and celebrities.  Such aggressive tax schemes were made infamous by the involvement of the comedian, Jimmy Carr.

     When HMRC outlawed the schemes, the association sued his client for breach of implied confidentiality.

     The rules governing pre-action conduct as set out in Practice Direction for Pre-action Conduct (PDPAC) had been completely ignored; no adequate Letter before Action had been sent to the client and therefore the client did not know the extent of the case against them.

     David first made enquiries at Companies House and established that the claimant company was virtually insolvent. It was a great concern for a professional partnership to be on the receiving end of legal proceedings, especially when the proceedings appeared to be without merit.  David immediately sent correspondence to invite the provision of voluntary security for costs, ie to cover the client’s costs if the claimant was unsuccessful.

     As the claimant had failed to substantiate its claim, a voluntary request for further information and for documentation was made.  This was ignored. Applications were made to the Court to strike out the claim and/or seek summary judgment (in reverse) with an alternative application for security for costs.  The costs were assessed for security purposes at over £20,000 for the first stage in the litigation and if successful, that amount of money must be provided by the claimant in order for it to continue with the action. 

     The immense pressure of these applications upon the claimant caused it to discontinue proceedings.  A discontinuance is always on the basis that costs will be paid and the client received a large contribution towards its costs.  

     Therefore, the proceedings brought against the professional firm client were brought to an early conclusion to the relief of the client.