JMW Solicitors LLP & Ors v Injury Lawyers 4U Limited & Ors

The Claimants challenged the removal of a longstanding "Slot Price Differential" said to be protected by clause 4.3 of a Supplemental Deed (supplementing a 2002 shareholders' agreement), alternatively by a collateral warranty or estoppel by convention arising from representations made in May 2003. The Defendants sought reverse summary judgment under CPR Part 24 on all pleaded claims.

The court held that, on true construction, clause 27 of the 2013 shareholders' agreement ("whole agreement" and supersession clause) unambiguously superseded prior documents, including the Supplemental Deed, so that clause 4.3 no longer provided an enforceable contractual right. The Claimants' alternative causes of action — rectification, collateral warranty and estoppel by convention — had no real prospect of success: the pleaded material did not establish the required objective intention to create a separate binding obligation, and the entire agreement and non-oral modification provisions in the 2013 SHA blocked reliance on pre-contractual assurances.

The court granted summary judgment for the Defendants on the contractual, collateral warranty and estoppel claims. As to the challenge to the validity of transfers and the appointment of directors (and consequent board decisions), the judge found there were arguable unpleaded points (construction of the articles' definition of "Amelans", implication of terms, clause 14 disposal powers, and potential conflicts of interest/fiduciary duty) that might, if properly pleaded, raise real prospects at trial. The Claimants were given 14 days to apply to amend their particulars of claim; summary judgment on those issues will be entered if they do not apply or fail to obtain permission.

The Claimants (founding shareholder solicitors firms) sued the defendants (the lead-generating company Injury Lawyers 4U Ltd and two individuals) after the company removed a long‑standing discount for founding shareholders (the "Slot Price Differential"). The Claimants relied on: (a) clause 4.3 of a 2003 Supplemental Deed (varying the 2002 SHA) entrenching a 50% higher panel charge for new "Panel Members"; (b) an alleged collateral warranty arising from representations made at a 1 May 2003 meeting; and (c) estoppel by convention. They also sought declarations that transfers of the company's 'A' shares and the appointments of Mr Maxey and Mr Slade as directors were invalid, and that consequent board resolutions (including equalising slot prices) were of no effect.

The Defendants applied for reverse summary judgment under CPR Part 24, supported by witness evidence that the 2013 shareholders' agreement (the 2013 SHA) replaced earlier documents, that the 2013 articles and their Article 11.1/18.2 permitted transfers/appointments, and that Mr Maxey and Mr Slade had been validly registered/appointed (or alternatively were permissibly treated as "permitted transferees").

Issues framed by the court included:

• Does clause 4.3 of the 2003 Supplemental Deed survive the 2013 SHA or was it superseded?
• Could a collateral warranty or an estoppel by convention arise from the May 2003 representations and survive the 2013 SHA?
• Were the later transfers of 'A' shares and the appointments of Mr Maxey and Mr Slade valid?
• Did the board or the new directors breach duties of good faith or fiduciary duties in removing the differential?
• Does the Claimants' case have a "real prospect" of success such that summary judgment should be refused?

The judge applied the established approach to CPR Part 24 (whether the respondent has a real, realistic prospect of success), and contractual interpretation principles (unitary exercise, background limited to what a reasonable observer would know, business common sense only where rival constructions exist). He concluded that clause 27 of the 2013 SHA (whole agreement/supersession) and its recitals unambiguously superseded the Supplemental Deed in respect of the subject matter. The Claimants had no realistic prospect on their breach of clause 4.3 claim, nor on collateral warranty or estoppel claims in respect of pre‑2013 representations: entire agreement and non‑oral modification clauses prevented those lines from succeeding. Rectification was pleaded only obliquely and lacked evidential support to show a common mistake or the necessary factual foundation to survive summary disposal.

On the validity of transfers and appointments the judge identified potentially arguable unpleaded points (construction of the definition of "Amelans", possible implied terms, the exercise of clause 14 disposal powers, and conflict/fiduciary issues) which could, if properly pleaded and supported, raise a real prospect at trial. To avoid forcing the Claimants to start fresh proceedings in circumstances where amendment might be appropriate, the judge directed that summary judgment on those issues would follow unless the Claimants applied within 14 days to amend and secured permission to advance those arguments; otherwise summary judgment to the Defendants would be entered. Consequential hearings were listed if required.

The court granted summary judgment for the Defendants in respect of the Claimants' claims based on clause 4.3 of the Supplemental Deed, the alleged Slot Price Differential collateral warranty and the pleaded estoppel by convention, because clause 27 of the 2013 SHA unambiguously superseded prior documents and the Claimants had no real prospect of rectification or equitable estoppel given the entire agreement and non‑oral modification provisions. On the challenge to the validity of transfers and director appointments (and related board decisions) the court did not grant immediate summary judgment: it found arguable unpleaded points that might, if pleaded and evidenced, give rise to a real prospect of success, and therefore permitted the Claimants 14 days to apply to amend; summary judgment on those issues will be entered if no amendment is sought or permitted.