Paul Lorimer-Wing v Idrees Hashmi

The court refused permission to appeal (grounds 1–13) from the orders made by Chief ICC Judge Briggs consequential upon his liability judgment in an unfair prejudice petition under section 994 of the Companies Act 2006. The judge had found that the petitioner (Mr Hashmi) was unlawfully removed as a director and had suffered substantial prejudice (loss of office, exclusion from systems and financial information, and termination of a consultancy agreement). The appellant’s central contention that a pre‑action communication and subsequent correspondence amounted to a reasonable buy‑out offer within the O’Neill v Phillips framework was rejected because that defence was not pleaded at the liability trial and, on its face, the communications did not meet the conditions identified in O’Neill. The court also dismissed the costs appeal: Chief ICC Judge Briggs had exercised his broad discretion under CPR 44.2 to order the appellant to pay the petitioner’s costs to the date of the liability judgment, having considered but declined to be persuaded that the contested correspondence required reserving costs to the valuation (quantum) trial.

The appellant, a director and shareholder of Fore Fitness Investments Holdings Limited, sought permission to appeal from orders made after a liability trial in an unfair prejudice petition presented by the respondent under section 994 Companies Act 2006. The petition sought the buy‑out of the respondent’s shares at fair value, other relief and costs. ICC Judge Prentis directed a split trial. The first (liability) trial before Chief ICC Judge Briggs dealt with whether unfair prejudice was established, the ways in which it had been caused and the nature of any remedy. The judge found unfair prejudice, summarising multiple bases for unfairness and prejudice (including unlawful removal as director, exclusion from systems and financial information, and termination of a consultancy agreement).

Procedural posture: The appellant applied for permission to appeal against the Judge’s orders (referred to in the judgment as the Permission Application) and separately appealed the cost order (Costs Appeal). Miles J granted permission in relation to the Costs Appeal only on 2 November 2023 and refused permission on other grounds; the appellant renewed the permission application which was heard before Mr Justice Edwin Johnson.

Issues before the court:

• whether the appellant had a real prospect of success (or other compelling reason) to obtain permission to appeal grounds 1–13 under CPR 52.6;
• whether the correspondence relied on by the appellant (including a letter of 1 April 2021 and related communications) constituted a reasonable offer under the principles explained in O’Neill v Phillips and, if so, whether that should have affected the judge’s finding of unfair prejudice or the award of costs;
• whether Chief ICC Judge Briggs erred in law or in the exercise of his discretion in ordering the appellant to pay the petitioner’s costs up to and including the handing down of the liability judgment without reserving those costs to the quantum trial.

Court’s reasoning and outcome on the Permission Application: The court applied the CPR 52.6 test (real prospect of success or other compelling reason). The panel analysed each ground briefly and emphasised appellate deference to trial findings of fact (citing authorities on appellate restraint). The court concluded that (i) the appellant had not pleaded a defence that a reasonable offer had been made and therefore valuation evidence had not been adduced at the liability trial to support such a defence; and (ii) on its face the April 2021 correspondence did not satisfy the conditions identified in O’Neill and was not a proper O’Neill‑type reasonable offer. Other factual findings (e.g. that a co‑director never agreed to the removal, failures to give notice of meetings, exclusion from information and the appellant’s reliance on 'bad leaver' provisions) were factual findings of the trial judge and lacked any realistic prospect of successful challenge on appeal. Permission to appeal in respect of grounds 1–13 was refused.

Court’s reasoning and outcome on the Costs Appeal: The appellant argued that the judge should have reserved the costs of the liability trial to the quantum trial because the April correspondence (or the subsequent Price Bailey valuation indicating nil value) might show that the petition was not worth pursuing. The Court considered relevant authorities on costs in split trials (notably Langer v McKeown and HSS Hire v BMB) and CPR 44.2 (discretion to depart from the general rule that costs follow the event). The court concluded there was a realistic argument for reserving costs, but Chief ICC Judge Briggs had a broad discretion. The notes provided indicated the Judge had the arguments, had considered Langer, and had decided that an issues‑based award (costs to the petitioner for the liability trial) was within his discretion while providing that payment might not be immediately payable until valuation concluded. There was no demonstration that the judge had acted outside the ambit of his discretion or in law. The costs appeal was dismissed.

Permission to appeal (as to grounds 1–13) refused; the Costs Appeal dismissed. The court concluded that (i) the appellant had no real prospect of success on the asserted grounds because factual findings at trial were unassailable on appeal and the alleged 'offer' defence was not pleaded and did not meet the O’Neill criteria; and (ii) the trial judge acted within his broad discretion under CPR 44.2 in ordering the appellant to pay the petitioner’s costs of the liability trial rather than reserving those costs to the quantum (valuation) stage.

On appeal from Chief ICC Judge Briggs (orders dated 21 June 2023 and 20 July 2023; Case No. CR-2021-001454). Miles J granted permission to appeal only in respect of costs by order dated 2 November 2023 and refused permission on other grounds; the appellant renewed his application for permission to appeal and pursued the Costs Appeal to Mr Justice Edwin Johnson who refused permission on Grounds 1–13 and dismissed the Costs Appeal.