Caldero Trading Ltd v (1) Beppler & Jacobson Ltd & Ors

The court ordered the respondents to reimburse Caldero the sum of 7,501 paid by Caldero to pay up the 87,501 shares registered in its name. The decision rested on the finding that the respondents had previously acknowledged a contractual obligation to ensure those shares were paid up. The Newey Order, which settled the petition, did not constitute a waiver of that existing contractual right.

The judge held that the reference in schedule 1 of the Newey Order to Caldero's shares being "treated as paid up" was an assumption for valuation purposes and did not extinguish or waive the respondents' contractual liability. The court dismissed the respondents' abuse of process argument (relying on Henderson v Henderson and Johnson v Gore Wood & Co) because the obligation was admitted and there had been no suggestion the respondents would not perform it.

Background and parties: The company was used as a vehicle for a joint venture between Zoran Becirovic and Igor Lazurenko. Caldero (a company owned by Mr Becirovic) held 87,501 shares; Leibson Corporation (connected to Mr Lazurenko) held the balance. Relations broke down and Caldero presented a petition under section 994 Companies Act 2006 and alternatively for winding up under section 123 Insolvency Act 1986. The petition was settled by the Newey Order made on 16 July 2012 which provided for Leibson to buy Caldero's shares, subject to an expert valuation, and left only the "Investment Issue" for further determination.

Nature of the present application: Caldero sought an order that the respondents reimburse it 7,501 which Caldero paid up in August 2012 in response to a lawful demand by the provisional liquidators. Caldero relied primarily on an express contractual obligation (acknowledged by the respondents) to procure payment up of the shares; alternatively it argued for an implied term of the compromise; alternatively restitution for unjust enrichment (though the judge did not need to decide that alternative because it depended on establishing an express or implied contractual liability).

Issues framed by the court:

• Whether the respondents were contractually liable to reimburse Caldero for payment up of its shares, in light of their earlier written acknowledgement.
• Whether the Newey Order (the compromise) operated to extinguish or waive that contractual obligation or otherwise precluded Caldero's claim as an abuse of process.
• Whether an obligation to pay up the shares should be implied into the compromise order.

Court's reasoning and conclusions: (i) The respondents had earlier accepted in pleadings and in a skeleton argument that it was their responsibility to ensure that Caldero's shares were fully paid up; that acknowledgment constituted an existing contractual obligation. (ii) The Newey Order did not contain any express waiver of that obligation and, on proper construction, the phrase in schedule 1 that the shares "shall be treated as paid up" was a valuation assumption to enable the valuer to value on the basis of fully paid shares and was not intended to affect parties' pre-existing rights. (iii) The respondents' offer of an undertaking in their skeleton was an undertaking to the court as a condition of avoiding a winding up order and was not a contractual undertaking to Caldero. (iv) The abuse of process argument based on Henderson v Henderson and Johnson v Gore Wood & Co failed because Caldero's right was admitted and there was no suggestion the respondents would not perform it; it was unnecessary and inappropriate for Caldero to bring separate proceedings to establish an acknowledged right. (v) On these grounds Caldero was entitled to reimbursement and the court ordered the respondents to pay 7,501; Caldero was directed to issue a pro forma application if not already made.

First instance: The court ordered the respondents to reimburse Caldero 7,501. Rationale: respondents had an acknowledged contractual obligation to ensure Caldero's shares were paid up; the Newey Order did not waive or extinguish that obligation; the phrase "treated as paid up" in schedule 1 was a valuation assumption; abuse of process principles did not prevent enforcement of an admitted contractual right.