PIC Insurance Company Ltd v Zona Barthley and another

An appellate court will not review concurrent findings of fact by two courts below where the findings depend on the evaluation of competing oral and documentary evidence, unless a recognised basis for intervention is shown. A finding that shareholders agreed an entitlement to shares may engage the statutory exception for a unanimous shareholder agreement and may establish that past services supplied fair value for the shares. In that event, the statutory requirements concerning the issue of shares are satisfied without a further valuation by the directors. Refusal to allot shares in accordance with the agreement may constitute disregard of shareholders’ interests and may also be oppressive or unfairly prejudicial under Companies Act 1995, section 241.

The personal representatives of Dr Rolston Barthley’s estate and his son, Zorol Barthley, claimed that they were entitled to 51% and 5% respectively of the shares in PIC Insurance Company Ltd. The company’s board disputed the entitlement, refused to allot the shares, and referred the dispute to arbitration. Joseph-Olivetti J (Ag) upheld the claim on 19 December 2018. The Court of Appeal of the Eastern Caribbean Supreme Court dismissed PIC’s appeal on 28 January 2021. PIC appealed to the Privy Council, challenging the concurrent factual findings, the application of sections 29, 30 and 85 of the Companies Act 1995, and the finding of oppression or unfair prejudice under section 241. The central issues were whether the findings could be reopened and whether the statutory provisions justified the board’s refusal to allot the shares.

The Board rejected all grounds of appeal and advised His Majesty that the appeal be dismissed.

1. Concurrent findings of fact. The finding that all shareholders agreed Dr Barthley was entitled to 51% of PIC’s shares and Zorol Barthley to 5% was a finding of fact. It resulted from consideration of the competing evidence, including documents, and was not converted into a question of law or an evaluative judgment merely because documents formed part of the evidence. The later existence of a dispute did not alter that conclusion.
2. The Court of Appeal had properly reviewed the evidence. Its statement that it was unnecessary to go through every page did not mean that the evidence had not been considered. Its detailed discussion of the evidence supported that conclusion. The Board therefore applied the established rule in Devi v Roy [1946] AC 508 and declined to reopen the concurrent findings.
3. Issue of shares. Section 29 of the Companies Act 1995 was subject to any unanimous shareholder agreement. The agreement found by the judge meant that section 29 did not govern the entitlement. The agreement also encompassed fair value being given for the shares through the Barthleys’ extensive unpaid services. Section 30 was therefore satisfied without any further determination by the directors, and section 85 had no application.
4. Oppression and unfair prejudice. Once the agreement and entitlement were established, refusal by the board to allot the shares in accordance with the agreement necessarily involved disregard of the Barthleys’ interests. That alone satisfied section 241. The judge was also entitled to find oppression or unfair prejudice. The reasonable expectation that PIC would honour the agreed allotment, informed by Canadian authority on section 241(3) of the Canada Business Corporations Act 1985, provided a further justification.

1. Privy Council: appeal dismissed; the Board advised His Majesty accordingly: [2024] UKPC 39.
2. Court of Appeal of the Eastern Caribbean Supreme Court (Antigua and Barbuda): PIC’s appeal from the trial judgment was dismissed on 28 January 2021.
3. High Court of Antigua and Barbuda: Joseph-Olivetti J (Ag) upheld the shareholders’ claim on 19 December 2018 and ordered the allotment of 51% of the shares to Dr Barthley’s estate and 5% to Zorol Barthley.