Shaheen Shan (in her capacity as Administrator of the Estate of the late Ali Akbar Shan) v The Registrar of Companies & Ors

The court discharged two interim injunctions previously granted by Edwin Johnson J and refused to grant a fresh injunction preventing the respondent from exercising statutory member rights. The dispute concerned the true identity of the Company's shareholders and directors and whether the respondent had sufficient shareholding (at least 5 per cent) under sections 303 and 304 of the Companies Act 2006 to require the directors to call a general meeting.

The judge identified four principal procedural and disclosure defects in the Applicants' applications: (1) no adequate justification for ex parte/out-of-hours relief; (2) failure to disclose that the police had relaxed bail conditions which would have allowed attendance at the meeting; (3) failure to disclose relevant background events including changes to Companies House filings in 2022 and existing Part 8 proceedings and a freezing injunction; and (4) breach of an undertaking to issue continuation proceedings promptly. On the merits the court held there was no serious issue to be tried that the respondent lacked at least 5 per cent of the shares. The Applicants' application was dismissed and the respondent awarded costs on the indemnity basis.

Background and parties

• The dispute concerned Yorkshire Halal Meat Supplier Limited, a substantial trading company.
• The Applicants (two brothers) sought interim relief to restrain the respondent (the widow and administrator of the deceased's estate) from calling or holding general meetings of the company.
• After the deceased's death there were multiple changes recorded at Companies House to shareholdings and directorships; the Applicants had filed confirmation statements and director appointment forms and the respondent had obtained interim probate and an interim freezing injunction against the Applicants.

Nature of the application

• The Applicants applied for continuation of interlocutory injunctions obtained initially ex parte from Edwin Johnson J which restrained the respondent from organising or conducting any meeting of the company. The Applicants sought to maintain those restraints pending resolution of competing claims about shareholdings and directorships.

Issues for decision

1. Whether the interim orders made by Edwin Johnson J should be discharged.
2. Whether, on the evidence, there was a serious issue to be tried that the respondent lacked at least 5 per cent of the voting share capital and therefore could be restrained from exercising the statutory right to request a general meeting (see section 303 and section 304, Companies Act 2006).
3. Whether a fresh injunction preventing the respondent from exercising members’ statutory rights should be granted.
4. Whether the Applicants' conduct justified indemnity costs.

Court's reasoning and conclusions

The court discharged the earlier interim orders. The reasons were principally procedural and evidential: inadequate justification for ex parte and out-of-hours relief; failure of full and frank disclosure (notably non-disclosure that the police had relaxed bail conditions permitting online attendance); failure to disclose the full background (the Companies House filings, Part 8 proceedings and the freezing injunction); and breach of undertakings to issue continuation proceedings promptly.

On the merits the judge concluded there was no serious issue to be tried that the respondent did not hold at least 5 per cent of the shares. The Applicants’ higher contentions (including that the First Applicant owned 100 per cent) were bare assertions unsupported by evidence and inconsistent with the Applicants’ own September 2022 confirmation statement filings. In those circumstances the court would not prevent the respondent from exercising her statutory rights to request a meeting.

The court declined to grant a fresh injunction, discharged the previous injunctions and ordered costs in favour of the respondent on the indemnity basis because of the Applicants' conduct and the manner in which the interlocutory relief had been pursued.

This first-instance court discharged the interim injunctions previously granted by Edwin Johnson J and refused to grant a new injunction preventing the respondent from exercising members’ statutory rights. The orders were discharged for serious procedural and disclosure failings (unjustified ex parte/out-of-hours application, failure of full and frank disclosure about bail-condition variation and relevant background, and breach of undertakings). On the merits the court concluded there was no serious issue to be tried that the respondent held less than 5 per cent of the voting share capital. Costs were awarded to the respondent on the indemnity basis.