Sheila Burdett v David William Burdett & Anor

In an unfair prejudice petition concerning a quasi-partnership company, informed consent by the relevant shareholder to a transaction may prevent the transaction being unfairly prejudicial. The court may assess that consent from the evidence and surrounding family and commercial circumstances.

A later agreement to transfer shares on death or incapacity may operate as a contract rather than a trust. Mutual promises can provide consideration, even where the shares are to be transferred for nil consideration.

Where property is purchased in one family member’s name, the presumption that legal and beneficial ownership coincide may be displaced by proof of an agreed gift. A resulting trust does not arise where the contributors intended to make a gift.

The judgment determined liability issues in two conjoined family disputes. Sheila Burdett brought an unfair prejudice petition concerning Burdetts Coaches Limited, a family company in which her late husband, Jeffrey, and David Burdett had been equal shareholders. David relied on disputed directors’ minutes, including an alleged agreement that Jeffrey’s shares would pass to David on Jeffrey’s death.

David separately claimed that 72 High Street was held on trust for him and his late parents, or that their contributions created beneficial interests or repayable loans. The central issues were the authenticity and effect of the minutes, whether the company transactions were unfairly prejudicial, and the beneficial ownership of 72 High Street.

1. Outcome. Sheila’s unfair prejudice claim failed. David succeeded on his counterclaim for an order requiring Sheila to transfer Jeffrey’s shares in Burdetts to him for nil consideration. David’s claim concerning 72 High Street was dismissed.
2. The disputed minutes were genuine on the balance of probabilities. The court considered the documents, the surrounding circumstances, the witnesses and the inherent probabilities. The seriousness of the forgery allegation was relevant to the assessment of the evidence, consistently with Re B (Children) [2008] UKHL 35.
3. Burdetts was a quasi-partnership. Jeffrey had been fully aware of, and had consented to, the sale of the business to Ashley Travel and the loan to Thornbridge Estates. The transactions were therefore not unfairly prejudicial to him. Insofar as formal procedural requirements were relevant, the Duomatic principle applied: the informed consent of all shareholders was sufficient.
4. The 13 November 2015 agreement was sufficiently certain and was supported by mutual promises. It was not an oral declaration of trust because it created personal obligations to transfer shares on death or incapacity. It operated, if at all, as a contract. The agreement bound Jeffrey’s personal representative and could be specifically performed.
5. There was no agreement that 72 High Street was held on trust for David and his parents. The contributions were intended as a gift to Jeffrey. Equity therefore followed the legal title. The resulting-trust analysis did not assist David because the presumption of resulting trust was rebutted by the factual finding of an intended gift. The court considered it unnecessary to rely on the presumption of advancement.
6. The complaints concerning the attempted share transfer, the failed dissolution application, the writing-off of the Thornbridge loan and the accounting adjustments did not establish unfair prejudice. The claim and the property dispute were determined on the evidence rather than on the late procedural applications concerning strike-out and abuse of process.