McCallum-Toppin & Anor v McCallum-Toppin & Ors

The court considered an application to re-re-amend a petition under section 994 of the Companies Act 2006 alleging unfairly prejudicial conduct. Central issues were (i) whether the petitioners had standing as personal representatives or trustees to present the petition, (ii) the effect of an order under section 50 of the Administration of Justice Act 1985 on the vesting of an estate in substituted personal representatives, and (iii) whether late amendment to plead an alternative capacity should be permitted.

The judge concluded that an order under section 50, absent contrary provision, effects vesting of the estate in the substituted personal representative so as to give standing under section 994(2). The court held that an appointment of a trustee under section 40 of the Trustee Act 1925 would not automatically vest shares transferable only in company books because of the exception in section 40(4)(c). The Civil Procedure Rules (in particular CPR 19.3 and CPR 3.10) make omission to join a jointly entitled claimant an irregularity that the court can remedy. Applying the Quah Su-Ling principles on late amendments, the judge allowed the late amendment because the prejudice to respondents was limited, disclosure undertakings had been given and the amendment did not change the core factual allegations.

Background and parties:

• The petitioners were Lucy Jane McCallum-Toppin and Julie Bryan, acting in capacities related to the will of the deceased shareholder Angus McCallum-Toppin. The respondents included Alistair and Allan McCallum-Toppin, Bertha Anne McCallum-Toppin and AMT Coffee Limited.
• The petition alleged unfairly prejudicial conduct by the directors/shareholders under section 994 of the Companies Act 2006, seeking an order for purchase of the petitioners' shares in AMT Coffee Limited.

Procedural posture: This was a first-instance hearing on an application, at the start of trial, to re-re-amend the petition to plead that the second petitioner had been appointed as joint personal representative by an order of the High Court made on 15 June 2018.

Issues framed:

1. Whether the petitioners had standing to present the s 994 petition, by reference to s 994(1) and s 994(2) and to the effect of an order under s 50 of the Administration of Justice Act 1985.
2. Whether an appointment of a trustee under section 40 of the Trustee Act 1925 operated to vest the shares automatically in the new trustees, and whether any exception applied.
3. Whether proceedings brought by one of two joint personal representatives (without joining the other) was fatal, or an irregularity capable of remedy under the Civil Procedure Rules, and whether a late amendment to plead an alternative capacity should be permitted.

Court’s reasoning:

• The judge accepted that a deceased member's shares transmitted by operation of law give standing under s 994(2) to the person in whom those shares are vested as personal representative. An order under s 50 of the 1985 Act appointing a substituted personal representative, absent contrary provision, operates to vest the estate in the substituted personal representative and divest the former representative; otherwise the purpose of the order would be defeated.
• The deed appointing a new trustee did not contain an express vesting declaration and, although section 40(1)(b) might operate in many cases to vest assets, section 40(4)(c) excepts shares "only transferable in books kept by a company"; the company shares therefore were not automatically vested by the deed of appointment.

Disposition: The application to re-re-amend the petition was allowed and the petition amended in the terms sought.

The application to re-re-amend the petition was allowed. The court held that an order under section 50 of the Administration of Justice Act 1985 vests the estate in substituted personal representatives absent contrary provision; section 40(4)(c) of the Trustee Act 1925 prevents automatic vesting of shares transferable only in company books by an appointment alone; omission to join a jointly entitled personal representative is an irregularity capable of remedy under the Civil Procedure Rules; and a late amendment was permitted because prejudice was limited and disclosure undertakings were given.