Adnan Omanovic v Shamaazi Ltd

Allegations that a director has acted dishonestly, fraudulently, in breach of fiduciary duty or in conspiracy must be formally pleaded with sufficient particularity. The requirement to identify the case to be met applies beyond fraud claims and includes allegations relied on to quantify damages. Informal submissions to a single joint expert cannot enlarge the expert’s remit or provide a sufficient basis for findings at trial. Where proposed valuation adjustments depend on alleged wrongdoing, the underlying allegations must be pleaded so that the opposing party can understand, challenge and, where appropriate, seek to strike out the case or obtain reverse summary judgment.

The claimant alleged that he was entitled to a 25 per cent interest in Shamaazi Ltd and claimed damages for breach of contract, with alternative tortious and equitable claims. A jointly instructed forensic accountant was authorised to value Shamaazi at specified dates and assess any minority discount.

The claimant sought to have the expert investigate the alleged diversion of the GiveMatch business to another company and losses said to arise from cryptocurrency transactions. Neither matter was pleaded as a breach of duty, fraud, dishonesty or conspiracy. Master Sullivan ordered the expert to refrain from investigating those matters. The claimant applied for permission to appeal that order.

1. Permission to appeal refused. The court agreed with Master Sullivan that the single joint expert’s remit was confined to the valuation issues identified in the case management order and did not extend to investigating unpleaded allegations of wrongdoing.
2. The requirement that a party know the case it has to meet applies generally, and is not confined to allegations of fraud or dishonesty. Allegations relied on in a quantification exercise may be pleaded as the basis for the valuation or damages claim. They cannot instead be introduced through correspondence, witness statements or submissions to an expert.
3. The allegations concerning the diversion of GiveMatch and the cryptocurrency transactions alleged breaches of fiduciary duty, intentional wrongdoing and tortious conspiracy. In context, they were properly understood as allegations of fraud and dishonesty. Their seriousness made formal pleading with sufficient clarity essential.
4. The cryptocurrency allegations remained obscure. Expressions such as gambling or betting on horses did not explain how the defendant had acted in breach of duty. Pleading was necessary to enable him to seek further information under a Part 18 request, challenge the allegations, or apply to strike them out or seek reverse summary judgment.
5. The court accepted the pleading principles stated in Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1, including that dishonesty must be supported by pleaded primary facts capable of justifying the inference. The court therefore refused permission to appeal and endorsed the Master’s reasoning.

• High Court (King’s Bench Division): Permission to appeal against Master Sullivan’s order dated 5 December 2024 was refused.
• Master Sullivan: Ordered the single joint expert to refrain from valuing Givetree Ltd or calculating the effect of treating cryptocurrency investments as surplus cash.