Ajayi v Ebury Partners Ltd

An agreement to grant share options in lieu of salary is construed objectively from the parties’ correspondence and commercial context. An HMRC-approved market value for EMI tax purposes does not determine the number of options an employer must grant. Articles providing a leaver share-transfer procedure do not generally guarantee that shares will be sold or impose a positive duty to procure a sale. A failure to follow that procedure therefore does not itself establish loss. An express confidentiality agreement may contain an implied exception permitting disclosure where reasonably necessary for legal proceedings between the parties, provided the ordinary requirements for implying a term are satisfied.

Ms Ajayi brought claims against Ebury for damages, alleging that Ebury had agreed to grant her 22,472 EMI share options in lieu of £40,000 salary and had breached its Articles of Association by failing to operate the share-transfer procedure when she left. Ebury counterclaimed £118,000 in liquidated damages, alleging breach of confidentiality arising from Ms Ajayi’s reference to a COT3 settlement agreement in her original Particulars of Claim.

The court had to determine the number of options agreed, whether Ms Ajayi was a Good Leaver, whether Ebury’s failure to operate the transfer procedure caused loss, and whether reference to the COT3 agreement was permitted.

1. Salary sacrifice claim. The parties’ correspondence, read objectively and in context, referred to the real market value of Ebury’s shares, then £17.80, rather than the discounted £1.78 AMV approved by HMRC. The parties could not have known in November 2013 whether HMRC would approve a discount. The EMI documents and the commercial consequences also supported Ebury’s construction. Ms Ajayi was therefore entitled to the 3,000 options in the signed option agreement, not 22,472 options.
2. Articles of Association. The definition of a consultant who “terminates his consultancy” referred to the consultant bringing the engagement to an end, not expiry by effluxion of time. Ms Ajayi was accordingly a Good Leaver. Ebury breached the Articles by failing to initiate the valuation procedure, including instructing an independent expert under Article 18.5.
3. The deemed transfer notice made Ebury the agent for sale at the price determined under the Articles. It did not transfer title or prevent Ms Ajayi from serving a fresh transfer notice. Articles 18 and 20 were pre-emption provisions, not guarantees that shares would be sold. Since the shares retained were worth more than the price at which Ms Ajayi said she would have sold them, no recoverable loss was proved.
4. Counterclaim. Under CPR 5.4C, the original Particulars of Claim were obtainable from the court records while they remained public. However, the COT3 confidentiality clause was subject to an implied term permitting either party to refer to the agreement where reasonably necessary in legal proceedings between them. The implication satisfied the requirements stated in Marks & Spencer Plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72. Given Ebury’s repeated threats to seek strike-out by relying on the settlement, Ms Ajayi’s reference to it was reasonably necessary. The counterclaim therefore failed.
5. The Salary Sacrifice Claim was dismissed. Ebury’s breach of the Articles was established, but no loss was proved. Ebury’s Counterclaim was dismissed.