Jeremy Sinclair Clarke & Anor v Yasmin Azim Lakha & Ors (Re Bramber Road Management Limited)

Where a company’s articles are silent on appointing directors, the power must be determined by construing the articles as a whole. Articles may be amended informally by agreement or by a long course of conduct, including acquiescence, provided the members had the necessary knowledge and the conduct objectively demonstrates an intention to amend the constitution.

A company’s power to refuse registration of a share transfer must be exercised within the statutory period. Under Companies Act 2006, s 771, time runs from when the transfer is lodged, not from a later request to register it. A refusal made outside that period is ineffective.

This Part 8 claim concerned the management and membership of Bramber Road Management Limited, a company formed to manage the courtyard serving four office units. Two unit owners sought declarations concerning their membership, voting rights, appointment of directors, company secretary, chairmanship, Companies House filings, and the validity of purported resolutions.

The central disputes were whether the company’s articles had been amended by conduct so that each registered member could appoint a nominee director, whether the claimants were entitled to registration following a 2019 share transfer, and whether later refusals and board decisions were valid.

1. Appointment of directors. The original articles, construed as a whole, conferred the power to appoint directors on the directors under article 19. However, the registered members had, by a consistent course of conduct from 1989–90, amended the articles so that each registered member, upon registration, could appoint one director by notice to the company, with a corresponding right to remove or replace that director. The amendment was permanent, although the directors retained a residual appointment power subject to the members’ rights.
2. The amendment extended only to registered members. It did not give unregistered unit owners the right to appoint directors. The claimants were therefore entitled to appoint Mr Lawson after becoming registered members in respect of Unit 3. Notice was given by 18 May 2019 at the latest.
3. 2018 board meeting. The meeting was validly convened. Fourteen days’ notice was reasonable, the change of venue caused no prejudice, the meeting was quorate, and the absence of other participants did not invalidate it. The resolutions appointing Mr Clarke as company secretary, appointing Mr Blake as sole chairman, and confirming Unit 4 as the registered office were valid.
4. Share transfer. The directors’ discretion under article 5 to refuse registration was subject to their statutory duties. The transfer to the claimants was lodged by 10 October 2019 at the latest. Under s 771(1) of Companies Act 2006 and regulation 25 of Table A, the company had two months to register the transfer or give notice of refusal with reasons. That power was lost by 10 December 2019. The planning restriction relied on by the defendants did not prevent the transfer.
5. Later resolutions. The June 2021 resolution was invalid whether characterised as a members’ resolution or a board decision. The November 2021 board resolution was also invalid because Mr Lawson, then a director, was deliberately excluded from notice, attendance and voting. The court would hear further submissions on consequential relief and costs.