Maggie Otto & Ors v Inner Mongolia Happy Lamb Catering Management Company Limited & Ors

Introduction

1. This is my judgment on two applications made in this unfair prejudice petition, to begin with at least. The first application, by notice dated 24 February 2025, is the application of the first to fifth respondents to strike out the petition, alternatively for reverse summary judgment. The second is the petitioners’ application, by notice dated 1 April 2025, to re-amend their petition, and also to join a fifth petitioner, In-Touch Investment Holding Ltd (“In-Touch”). I say “to begin with”, because the position has moved on, and is regrettably more complicated than that. The petition as originally formulated, concerned the affairs of three companies, the sixth, seventh and eighth respondents. The sixth is the most important. The allegations concerning the seventh were dismissed some time ago, as will be seen below. The eighth respondent is said to be less valuable than the sixth, and only the fourth petitioner has any claim to a shareholding in it.

2. The two applications, or what survived them by the time of the hearing, were argued before me on 13 and 14 May 2025, when Marc Beaumont of counsel appeared for the petitioners, and Edward Davies KC and Seamus Woods of counsel appeared for the first to fifth respondents (whom I shall call “the active respondents”). As is usual, the sixth and eighth respondents were neither present nor represented. The petitioners’ claims in respect of the seventh respondent were abandoned some time ago, it being common ground that there is no value in the shares of that company, and it was dismissed from the claim in 2024. I am sorry for the length of time that it has taken to produce this judgment, caused partly by pressure of other work, but partly by the exigencies of this extraordinary litigation. Background and nature of the claims

3. The background and broad nature of the claims made and the defences to them appear from the (then agreed) case summary presented to the court at the PTR in February 2024. This reads as follows (although I regret to say that I am so technologically challenged, that I cannot make the numbering of the paragraphs and sub-paragraphs of the original document exactly correspond to the text below): “1. The Petitioners have issued an unfair prejudice petition in respect of the alleged unfairly prejudicial conduct of the affairs of the 6 th , 7 th and 8 th respondents contrary to their alleged interests as shareholders in the 6 th to 8 th Respondents, companies which the Petitioners further allege are under the control of the 1 st to 5 th Respondents. i) 6 th Respondent a) The Petitioners are all shareholders in the 6 th Respondent (1 st Petitioner has 5% shareholding; 2 nd Petitioner has 2% shareholding; 3 rd Petitioner has 5% shareholding; 4 th Petitioner has 1% shareholding). b) The 5 th Respondent is the sole director of the company and has a 10% shareholding in the company. c) The 1 st Respondent has a 60% shareholding in the company; the 2 nd Respondent has a 7% shareholding in the company; and the 4 th Respondent has a 9% shareholding in the company. None of the 1 st Respondent, 2 nd Respondent or 4 th Respondent are directors of the company. d) It is denied that the 6 th Respondent is under the control of the 3 rd Respondent who is neither a director nor shareholder of the company. ii) 7 th Respondent a) The Petitioners are all shareholders in the 7 th Respondent (1 st Petitioner has 5% shareholding; 2 nd Petitioner has 2% shareholding; 3 rd Petitioner has 5% shareholding; 4 th Petitioner has 1% shareholding). b) The 5 th Respondent is the sole director of the company and has a 10% shareholding in the company. c) The 2 nd Respondent has a 19.5% shareholding in the company; the 3 rd Respondent has a 10% shareholding in the company; and the 4 th Respondent has a 9% shareholding in the company. None of the 2 nd Respondent, 3 rd Respondent or 4 th Respondent are directors of the company. d) It is denied that the 7 th Respondent is under the control of the 1 st Respondent who is neither a director nor shareholder of the company. iii) 8 th Respondent a) The 4 th Petitioner is a shareholder of the 8 th Respondent with a 1% shareholding in the company. None of the 1 st Petitioner, 2 nd Petitioner or 3 rd Petitioner are shareholders in the 8 th Respondent or have any interest in the company. Accordingly, none of the 1 st Petitioner, 2 nd Petitioner or 3 rd Petitioner are entitled to bring an unfair prejudice claim in relation to the 8 th Respondent. b) The 5 th Respondent is the sole director of the company but is not a shareholder of the company. c) The 2 nd Respondent has a 10% shareholding in the company; the 3 rd Respondent has a 10% shareholding in the company; and the 4 th Respondent has a 22.5% shareholding in the company. None of the 2 nd Respondent, 3 rd Respondent or 4 th Respondent are directors of the company. d) It is denied that the 8 th Respondent is under the control of the 1 st Respondent who is neither a director nor shareholder of the company.

2. The Petitioners allege that the affairs of the 6 th to 8 th Respondents have been conducted in such a way as to be, and continue to be, unfairly prejudicial to their interests, specifically the Petitioners allege as follows: iv) Part of their shareholdings (specifically the 1 st to 3 rd Petitioners) have been expropriated without recognition of the fair value of those shareholdings v) The Respondents have failed to adhere to an agreement entered into in 2017 in relation to shareholdings vi) The Respondents have failed to adhere to a further agreement entered into in 2018 in relation to shareholdings vii) The Petitioners’ roles in the various companies were re-assigned without proper reference or agreement viii) The 1 st to 5 th Respondents took over control of the business and affairs of the 6 th to 8 th Respondents ix) The First Petitioner, and a shareholder who is also the sole director of the Third Petitioner, were forced to step down from being directors of the 6 th to 8 th Respondents x) The First Petitioner’s salary was reduced unilaterally xi) Expenses were not reimbursed xii) The Petitioners were excluded from the conduct of the 6 th to 8 th Respondents xiii) The Petitioners were denied access to company records and documents relating to the 6 th to 8 th Respondents xiv) The First and Second Petitioner, and a shareholder who is also the sole director of the Third Petitioner, were subject to ongoing bullying and intimidation by the Respondents xv) The Respondents have conducted the affairs of the 6 th to 8 th Respondents in a wrongful, dishonest and illegal manner

3. The Respondents vigorously deny all allegations above in full. In particular, the Respondents have responded as follows: xvi) Reduction of shareholdings of 1 st Petitioner, 2 nd Petitioner and 3 rd Petitioner was not without consent and does not otherwise amount to expropriation a) 1 st Petitioner i) It is denied that any reduction of the 1 st Petitioner’s shareholding in the 6 th Respondent was without her consent and/or otherwise amounts to expropriation. In any event, it is noted that MO first became a shareholder in the company as of 22 January 2020 with a 5% shareholding which remains unchanged. ii) It is denied that any reduction of the 1 st Petitioner’s shareholding in the 7 th Respondent was without her consent and/or otherwise amounts to expropriation. It is noted that MO first became a shareholder in the company as of 18 May 2020 with a 5% shareholding which remains unchanged. iii) The 1 st Petitioner does not have, and has not at any time had, any interest in the 8 th Respondent. b) 2 nd Petitioner i) It is denied that any reduction of the 2 nd Petitioner’s shareholding in the 6 th Respondent was without his consent and/or otherwise amounts to expropriation. In any event, it is noted that upon incorporation of the 6 th Respondent, the 2 nd Petitioner had a 2% shareholding in the company which currently remains unchanged. ii) It is denied that any reduction of the 2 nd Petitioner’s shareholding in the 7 th Respondent was without his consent and/or otherwise amounts to expropriation. iii) The 2 nd Petitioner does not have, and has not at any time had, any interest in the 8 th Respondent. c) 3 rd Petitioner i) It is denied that any reduction of the 3 rd Petitioner’s shareholding in the 6 th Respondent was without its consent and/or otherwise amounts to expropriation. ii) It is denied that any reduction of the 3 rd Petitioner’s shareholding in the 7 th Respondent was without its consent and/or otherwise amounts to expropriation. iii) The 3 rd Petitioner does not have, and has not at any time had, any interest in the 8 th Respondent. xvii) the “2017 Co-operation Agreement” a) None of the Petitioners are parties to the “2017 Co-operation Agreement”. It has not been suggested that ITIHL (which was a separate legal entity to the 1 st Petitioner and in any event, dissolved on 22 June 2021) will be a party to any potential claim. b) The document that is referred to as the “2017 Co-operation Agreement” that was purported to have been entered into between the 1st Respondent and ITIHL (a company of which the 1st Petitioner became the sole shareholder and which is now dissolved) is governed by Chinese law and not English law. c) The “2017 Co-operation Agreement” is superseded by the “2018 Co-operation Agreement” which contains an entire agreements clause which provides that any agreement entered into prior to the 2018 Co-operation Agreement is null and void. xviii) the “2018 Co-operation Agreement” a) None of the 1 st Petitioner, 3 rd Petitioner or 4 th Petitioner are parties to the “2018 Co-operation Agreement”. It has not been suggested that ITIHL (which was a separate legal entity to the 1 st Petitioner and in any event, dissolved on 22 June 2021) will be a party to any potential claim. b) The document on its own does not show how the affairs of the 6 th Respondent are being or have been conducted in a manner which is unfairly prejudicial to the interests of the 2 nd Petitioner in his capacity as a member of the company. xix) It is denied that any re-assignment of roles within any of the companies took place without the consent of any of the Petitioners. xx) In relation to the issue of control, paragraph 1 above is repeated. xxi) Directorships a) It is denied that the 1 st Petitioner has been a director of the 8 th Respondent at any time. b) it is denied that the 1 st Petitioner, and a shareholder who is also the sole director of the Third Petitioner, were forced to step down as directors of any of the 6 th , 7 th , or 8 th Respondent. xxii) It is denied that the 1 st Petitioner’s salary was reduced without her consent. xxiii) It is denied that the 1 st and/or 2 nd Petitioners, and/or a shareholder who is also the sole director of the 3 rd Petitioner incurred expenses supported by receipts or other evidence that have not been reimbursed. xxiv) It is denied that any of the Petitioners have been excluded from the business. xxv) It is denied that the Petitioners have been wrongfully denied access to company records and documents relating to the 6 th to 8 th Respondents. xxvi) It is denied that the 1 st and/or 2 nd Petitioners, and/or a shareholder who is also the sole director of the 3 rd Petitioner, were subject to ongoing bullying and intimidation by the Respondents. In any event, it is denied that any such allegations constitute conduct that is unfairly prejudicial to any of the Petitioners’ interests qua member. xxvii) It is denied that the Respondents or any of them have conducted the affairs of the 6 th to 8 th Respondents in a wrongful, dishonest and illegal manner

4. The Petitioners are seeking an order for a buy out of their respective shareholdings in the 6 th to 8 th Respondents at a “fair value”, damages or other relief reflecting not only the interests they should have had in the 6 th , 7 th and 8 th Respondents but the entitlement they should have to participate in all HLHP restaurants established or to be established in the UK or Europe.” The history of the litigation Petition, defence and directions

4. As will be seen shortly, this agreed summary of the claim was very soon thereafter unagreed . But I need first to set out the history of this litigation. This is immensely complicated, and also lengthy, but it explains how we have arrived at the point we have in this litigation. Not the least of the complications has been the many and varied changes in representation, both as to counsel and as to solicitors, that have taken place, and on both sides . The original petition was presented on 21 September 2022. At that stage, the petitioners were represented by GL Law. I gave directions on the same day, and listed the matter for a case management hearing on 14 December 2022. On 4 October 2022 the petitioners served notice of change of legal representative from GL Law to Shakespeare Martineau LLP. Points of defence were filed on 2 November 2022 by Jackson Lyon LLP. The petitioners’ reply was filed on 30 November 2022. At the CMC on 14 December 2022, the petitioners were represented by Andrew Marsden of counsel, and the active respondents by Lois Aldred and Grace Cheng of counsel. At that hearing I gave directions to trial.

5. A costs and case management conference was subsequently listed for hearing before me on 20 March 2023. However, on 2 March 2023, the active respondents applied for an order transferring the petition to the Business and Property Courts of England and Wales, based at the Rolls Building in London. Before that application could be heard, on 7 March 2023, the court in Bristol listed the petition for trial in Bristol for two weeks from 4 March 2024. On 13 March 2023, the active respondents served notice of change of legal representative from Jackson Lyon LLP to R & H Lawyers LLP. At the hearing on 20 March 2023, Andrew Marsden of counsel represented the petitioners, and Mark Grant of counsel represented the active respondents. At that hearing, I heard and dismissed the petitioners’ application of 2 March 2023, and gave further directions.

6. Under the terms of the directions, disclosure was to be given by 23 June 2023 and inspection by 30 June 2023. These deadlines were not met by the active respondents. On 1 July 2023, the fifth respondent served notice that R & H Lawyers LLP had ceased to act for him and he would henceforth be acting in person. On 3 July 2023, all the respondents (except the fifth) applied for relief from sanctions and an extension of time of 30 days in which to complete disclosure. In their notice, they estimated 20 minutes for the hearing of the application. The petitioners’ solicitors said this was inadequate. It was listed for hearing on 10 August 2023. On 7 July 2023, the active respondents (except the fifth) applied for security for costs to be provided by the third petitioner (a limited company). This application was subsequently withdrawn.

7. On 13 July 2023 the petitioners applied for a variation of my directions to allow an extension of 28 days for the filing and service of witness statements and the exchange of expert reports. On 19 July 2023 DJ Wales made this order on the papers, without a hearing. On 26 July 2023 the active respondents (except the fifth) applied for a variation of that order.

8. At the hearing before me on 10 August 2023, the petitioners were represented by Andrew Marsden of counsel, and the first to fourth and sixth to eighth respondents were represented by Lisa Freeman of counsel. I granted relief from sanctions to the first to fourth and sixth to eighth respondents and amended dates for disclosure accordingly. I further extended the date for exchange of witness statements of fact. On 8 September 2023, but this time by consent, I again extended the date for exchange of witness statements of fact, and also extended the time for exchange of expert reports. On 28 September 2023 DJ Wales amended his order of 19 July 2023 (by consent of all parties except the fifth respondent). Interim injunction application

9. On 18 October 2023, the petitioners applied for an injunction to restrain the active respondents from using the funds of the sixth to eighth respondents to discharge their legal costs. This was listed for hearing before me on 2 November 2023. On 31 October 2023, their solicitor sought an adjournment of the hearing fixed for 2 November 2023. For reasons given at the time, I refused that adjournment. At the hearing on 2 November 2023, Charlie Newington-Bridges of counsel appeared for the petitioners, and Simon Davenport KC and Olivia Chaffin-Laird of counsel appeared for the first to fourth and sixth respondents. The first to fourth and sixth respondents gave undertakings to the court in lieu of an injunction, and an injunction was granted against the fifth respondent, in each case over until 15 November 2023, when there would be a further hearing.

10. At the further hearing on 15 November 2023, the petitioners’ representation was the same. The first to fourth and sixth respondents were represented by Ms Chaffin-Laird, and on this occasion she also represented the seventh and eighth respondents. The fifth respondent was not present or represented. As a result of evidence filed by the active respondents shortly before the hearing of 15 November 2023, at that hearing the petitioners did not pursue their application for an interim injunction. The argument at that hearing was concerned with the mechanism for putting an end to the application and the costs consequences. I dealt with these in a judgment handed down on 20 November 2023 ( [2023] EWHC 2920 (Ch) ), giving the petitioners leave to withdraw their application and ordering the first to fourth respondents to pay the petitioners’ costs. Subsequently, I assessed those costs summarily in a written ruling of 8 December 2023 ( [2023] EWHC 3151 (Ch) ). Pre-trial review

11. On 20 December 2023, the first to fourth and sixth to eighth respondents served notice of change of legal representative from R & H Lawyers LLP to Stewarts Law LLP. On the same day, the fifth respondent also changed his self-representation to representation by Stewarts Law LLP. On 9 January 2024 the date of the PTR was altered from 9 February 2024 to 8 February 2024, in order to accommodate Mr Justice Zacaroli, who would now be trying the claim. On 31 January 2024, the active respondents issued an application to strike out significant parts of the petition or alternatively for reverse summary judgment in respect of them.

12. At the PTR on 8 February 2024, the petitioners were represented by Charlie Newington-Bridges of counsel, but the active respondents were now represented by Edward Davies KC. The judge declined to deal with the respondents’ strike-out application on that occasion. But on 26 February 2024 the active respondents dropped a bombshell when they issued an application to amend their points of defence dated 2 November 2022 to withdraw admissions made in the defence and to replace them with non-admissions. The active respondents now wished not to admit that the petitioners were shareholders of either the sixth or the eighth respondents as alleged. If that were the case, it would mean that the petitioners did not have standing to present the petition, and the petition would fail. On 29 February 2024, the petitioners issued an application to amend their petition, adding a claim for rectification of the share register of the companies concerned. The abortive trial and aftermath The hearing of the applications

13. The applications were heard on the first day of the trial, 4 March 2024. On 5 March 2024, Mr Justice Zacaroli gave an extempore judgment on the applications (see [2024] EWHC 497 (Ch) ). He allowed the active respondents to amend their defence to withdraw the admissions in respect of the sixth and eighth respondents. But he refused the petitioners permission to amend their petition by adding a claim for rectification of the register. He then went on to hear further argument on what that meant for the future of this litigation. He reserved his decision overnight. On 6 March 2024, the judge gave a short written ruling, in substance that the petition should be stayed until September 2024, in order for the petitioners (if they could) to deal with the problem of standing which it appeared would lead to the dismissal of the entire petition. He also dismissed the claims relating to the seventh respondent on the basis that these had been abandoned. The restoration of In-Touch

14. The company which it appeared held the petitioners’ shares in the sixth and eighth respondents was In-Touch. The problem was that it had since been dissolved without anyone realising this. The petitioners applied for the restoration of the company to the register. From about June 2024 the petitioners ceased to be legally represented. The restoration application did not progress as fast as it might, and in September 2024 Mr Justice Zacaroli extended the stay to 5 November 2024. The signed consent order for the restoration of In-Touch was lodged in court on 13 September 2024, and the order actually made on 9 October 2024. On 28 October the petitioners, acting in person, applied for permission to amend their petition and to add In-Touch as a co-petitioner. This was listed for hearing before me on 6 December 2024. On that occasion, the petitioners appeared in person and Seamus Woods of counsel appeared for the active respondents. However, the hearing was not ultimately effective, and so I adjourned the application to a further hearing before me on 17 February 2025. I gave directions as to steps to be taken by the petitioners to address the question of their standing in the meantime. Further adjournment

15. On 12 February 2025, the active respondents applied for an adjournment of the hearing listed for 17 February 2025. This was based on the fact that they had not yet issued their application to strike out the petition. I acceded to the application, on the basis that there was no point in dealing with the petitioners’ application to amend their petition and then on a subsequent occasion dealing with an application to strike out, because they would almost certainly overlap, and the preparation of the claim for trial could not realistically be advanced until the strike-out application was determined. Accordingly, I set a timetable for issue and service of the application to strike out and evidence in support, and for evidence in reply. In the event, the strike-out application was issued on 24 February 2025, evidence was duly filed, and the hearing of both applications was listed over two days, 13 and 14 May 2025. The hearing on 13-14 May 2025 Redrafting the petition

16. By the time that that hearing arrived, two important things had happened. The first is that the petitioners, previously acting in person, had instructed counsel by direct access, who also has the right to conduct litigation, and he appeared at that hearing on their behalf. The second thing is that counsel for the petitioners had sensibly sought, and obtained, instructions completely to redraft the petition. A fresh application was therefore issued, dated 1 April 2025, for permission to re-amend the petition in the form (dated 31 March 2025) attached to the notice. This in turn had two consequences. The first consequence was that the application of the petitioners of 28 October 2024 to amend their petition in the terms annexed was superseded. The second consequence was that the application of the respondents to strike out was aiming at the wrong target. Neither of those two applications was therefore proceeded with. However, at the hearing, after argument, I ordered the petitioners to pay the active respondents’ costs of both of them, on the standard basis, and also to make a payment on account of those costs (see [2025] EWHC 1211 (Ch) ).

17. In fact, the 31 March version of the draft re-amended petition has not survived either. After the active respondents served their skeleton argument dated 6 May 2025, the petitioners’ counsel reconsidered his draft, and produced a fresh one, dated 9 May 2025 (though actually completed on 10 May). It was this draft that he sought to rely on at the hearing on 13 May. So, what was debated at the hearing was a new application by the petitioners for permission to re-amend their petition in the form of the draft dated 9 May 2025, the application to strike out the earlier draft amended petition having been overtaken. As I said at the time, if the new draft re-amended petition was demurrable, then I would not give permission for it, and the petition would simply fail. But if it was not, then I would go on to consider whether and if so on what terms I would give permission. The question of standing

18. It was accepted by the active respondents at the hearing that In-Touch had been restored to the register of companies, and that all the necessary stock transfer forms had been executed on its behalf in favour of the various petitioners. So, all four existing petitioners formally now have standing to present this petition in relation to the sixth respondent . In principle, therefore, I am prepared to order that In-Touch be joined to the proceedings as the fifth petitioner, so long as the petition is not otherwise demurrable. Nevertheless, the active respondents continue to object to the application for permission, on the basis that there are other pleading problems. I will come back to these.

19. So far as concerns the eighth respondent , the matter is more complicated. Although there is an allegation that the fourth petitioner purchased a 1% shareholding in the eighth respondent, the active respondents say that no stock transfer form was ever executed in favour of the fourth petitioner. The petitioners themselves seem to have accepted that position, at least prior to the hearing before me. Instead, the fourth petitioner’s argument for a sufficient interest in that respondent is – or at any rate was – made by way of a proprietary estoppel or constructive trust argument. So, the petitioner would have, not a legal interest in the company, but an equitable one. The active respondents say that this, even if true, is insufficient for the purposes of standing under section 994.

20. The complication is that the petitioners at the hearing before me said, I think for the first time, that in fact there now was a completed stock transfer form relating to the eighth respondent in favour of the fourth petitioner, dated 12 January 2025. Indeed, counsel took me to a copy of it in the hearing bundle. It further appears that this stock transfer form was lodged with the eighth respondent shortly after being executed, but that, so far, the transfer of shares has not been registered by the company. I was taken to an email correspondence in the bundle which appears to bear that out. If that is right, then, according to the authorities to which I shall refer later in this judgment, the fourth petitioner does have standing in relation to the eighth respondent, even without recourse to the argument from equitable interests. Procedural rules Rule texts

21. The rules for amending statements of case and adding parties are well known. CPR Part 17 relevantly provides: “17.1(1) A party may amend their statement of case, including by removing, adding or substituting a party, at any time before it has been served on any other party. (2) If his statement of case has been served, a party may amend it only – (a) with the written consent of all the other parties; or (b) with the permission of the court. (3) If a statement of case has been served, an application to amend it by removing, adding or substituting a party must be made in accordance with rule 19.4. [ … ] 17.3(1) Where the court gives permission for a party to amend their statement of case, it may give directions as to – (a) amendments to be made to any other statement of case; and (b) service of any amended statement of case. (2) The power of the court to give permission under this rule is subject to – (a) rule 19.2 (change of parties – general); [ … ]

22. And CPR Part 19 relevantly provides: 19.2(1) This rule applies where a party is to be added or substituted except where the case falls within rule 19.6 (special provisions about changing parties after the end of a relevant limitation period). (2) The court may order a person to be added as a new party if – (a) it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings; or (b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue. [ … ] 19.3(1) All persons jointly entitled to the remedy claimed by a claimant must be parties unless the court orders otherwise. [ … ] 19.4(1) The court’s permission is required to remove, add or substitute a party, unless the claim form has not been served. (2) An application for permission under paragraph (1)— (a) may be made by— (i) an existing party; or (ii) a person who wishes to become a party; and (b) must be— (i) supported by evidence; and (ii) made under Part 23. (3) An application for an order under rule 19.2(4) – (a) may be made without notice; and (b) must be supported by evidence. (4) Nobody may be added or substituted as a claimant unless – (a) they have given their consent in writing; and (b) that consent, and the proposed amended claim form and particulars of claim, have been filed with the court. [ … ]” Relevant caselaw

23. In Pearce v East and North Hertfordshire NHS Trust [2020] EWHC 1504 (QB) , Lambert J summarised the applicable principles as follows: “10. The legal framework is not in dispute and can be stated succinctly here. The starting point is CPR 17.3 which confers on the Court a broad discretionary power to grant permission to amend. The case-law is replete with guidance as to how that discretionary power should be exercised in different contexts. I need cite only two cases which taken together provide a helpful list of factors to be borne in mind when considering an application such as this: CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd [2015] EWHC 1345 (TCC) and Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm) . From those cases, I draw together the following points. a) In exercising the discretion under CPR 17.3, the overriding objective is of central importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted. b) A strict view must be taken to non-compliance with the CPR and directions of the Court. The Court must take into account the fair and efficient distribution of resources, not just between the parties but amongst litigants as a group. It follows that parties can no longer expect indulgence if they fail to comply with their procedural obligations: those obligations serve the purpose of ensuring that litigation is conducted proportionately as between the parties and that the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately is satisfied. c) The timing of the application should be considered and weighed in the balance. An amendment can be regarded as 'very late' if permission to amend threatens the trial date, even if the application is made some months before the trial is due to start. Parties have a legitimate expectation that trial dates will be met and not adjourned without good reason. Where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. A heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The timing of the amendment, its history and an explanation for its lateness, is a matter for the amending party and is an important factor in the necessary balancing exercise: there must be a good reason for the delay. d) The prejudice to the resisting parties if the amendments are allowed will incorporate, at one end of the spectrum, the simple fact of being 'mucked around' to the disruption of and additional pressure on their lawyers in the run-up to trial and the duplication of cost and effort at the other. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission. If allowing the amendments would necessitate the adjournment of the trial, this may be an overwhelming reason to refuse the amendments. e) Prejudice to the amending party if the amendments are not allowed will, obviously, include its inability to advance its amended case, but that is just one factor to be considered. Moreover, if that prejudice has come about by the amending party's own conduct, then it is a much less important element of the balancing exercise.”

24. In Kawasaki Kisen Kaisha Ltd v James Kemball Ltd [2021] EWCA Civ 33 , Popplewell LJ (with whom David Richards and Henderson LJJ agreed) said: “16. It was common ground that on an application to serve a claim on a defendant out of the jurisdiction, a claimant needs to establish a serious issue to be tried, which means a case which has a real as opposed to fanciful prospect of success, the same test as applies to applications for summary judgment: Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2102] 1 WLR 1804 per Lord Collins JSC.

17. The Court will apply the same test when considering an application to amend a statement of case, and will also refuse permission to amend to raise a case which does not have a real prospect of success.

18. In both these contexts: (1) It is not enough that the claim is merely arguable; it must carry some degree of conviction: ED & F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472 at paragraph 8; Global Asset Capital Inc. v Aabar Block SARL [2017] 4 WLR 164 at paragraph 27(1). (2) The pleading must be coherent and properly particularised: Elite Property Holdings Ltd v Barclays Bank Plc [2019] EWCA Civ 204 at paragraph 42. (3) The pleading must be supported by evidence which establishes a factual basis which meets the merits test; it is not sufficient simply to plead allegations which if true would establish a claim; there must be evidential material which establishes a sufficiently arguable case that the allegations are correct: Elite Property at paragraph 41.”

25. So, the court will take account of the overriding objective, compliance (and non-compliance) with the CPR and court orders, the timing of the application, and the degree of prejudice to each side. The amending party will need to show that the amendment is coherent and properly particularised, has a real prospect of success and that it carries “some degree of conviction”, by reference to the evidence supporting it (though the court must avoid conducting a “mini-trial”). Even if the amending party jumps all these hurdles, the court will still retain a discretion as to whether it will permit the amendment. The draft re-amended petition Structure

26. The draft re-amended petition (which I shall generally refer to hereafter simply as “the petition”) is divided into eight sections, as follows: (1) Introduction (paragraphs 1 to 5); (2) Standing of the petitioners (paragraphs 6 to 12); (3) Description of the parties (paragraphs 13 to 17); (4) Background facts (paragraphs 18 to 25); (5) Conduct of the affairs of the company (paragraphs 26 to 27); (6) The unfairly prejudicial conduct (paragraphs 28 to 29); (7) Further prejudice (paragraph 30); (8) Prayer (paragraph 31).

27. Paragraph 28 in section (6) is subdivided into four subsections, the first dealing with the case of the first and fifth petitioners on unfair prejudice, the second with the case of the second petitioner, the third with the case of the third petitioner, and the fourth with the case of the fourth petitioner. Each subsection is divided into a number of specific particulars of alleged unfairly prejudicial conduct. Brief summary

28. I can briefly summarise the main elements of the petition for present purposes as follows. In the Introduction (section 1), it is made clear that the current draft is intended completely to replace the earlier petition and draft amended petitions ([1]), and that, except in the case of the second petitioner, the petitioners accept that “there have been no executed stock transfer forms nor issued share certificates” in their favour. Instead those petitioners rely on “equitable entitlements to shares set out hereinbelow” ([5]).

29. This is amplified in section 2 when they say that “A beneficial and/or equitable entitlement to shares is sufficient locus standi under section 994” ([6]). However, and as noted above, at the hearing before me the active respondents accepted that all the petitioners satisfied the formal requirements for standing to present a petition under section 994 in respect of the sixth respondent. The position of the fourth petitioner in relation to the eighth respondent is different. Both sides accepted that the fourth petitioner could not show registered ownership of shares in the eighth respondent. So, the “equitable entitlement” argument was still being run, but only in relation to the fourth petitioner, and then only in relation to the eighth respondent. But then it appeared that a stock transfer form in favour of the fourth petitioner had been lodged with the eighth respondent. I will come back to that.

30. Section 3 of the petition describes the active respondents to the petition. The first respondent was established in China in 2016 by the fourth respondent. It created the “Happy Lamb” brand of restaurants. The second and third respondents are shareholders in both the first respondent and the eighth respondent. The second respondent is also a franchisee of the Happy Lamb brand. The fifth respondent is or was head chef for the sixth respondent, and owns shares in that company, as well as formerly owning shares in the eighth respondent.

31. Section 4 explains that in 2017 the second respondent separately approached the first and second petitioners to ask if either would like to be involved in the establishment of Happy Lamb restaurants in the UK and Europe. There were subsequent discussions between them, and ultimately it was decided that the first and second petitioners should establish and run the UK restaurant business. The petitioners say that assurances were given as to the shareholdings which the first and second petitioners should have in the sixth respondent, and that the first petitioner should be appointed as a director. Cooperation agreements were entered into in 2017 and 2018. They further say that the sixth respondent was in the nature of a quasi-partnership of the UK business. In addition, they say that the sixth respondent has been run by the active respondents as de facto directors or ultimate decision-makers.

32. Section 5 explains that the claim mainly focuses on the conduct of the active respondents. It says that “they have used promises of shareholdings in order to manipulate those establishing the business in the UK, by promising, awarding and confiscating shares in a capricious manner as it suits them” ([26]). It also says that “where it is not possible herein to attribute historic unfairly prejudicial conduct to any one person, the conduct is alleged to have been performed by or on behalf of [the sixth respondent] by any one or all of [the five respondents] (but in particular, [the fourth]) and, by inference, to have been supported by the others” ([27]).

33. Section 6 sets out the particulars of unfairly prejudicial conduct in separate subsections by reference to the first and fifth petitioners, the second petitioner, the third petitioner and the fourth petitioner.

34. Section 7 makes further allegations of what it calls “further apparently unfair conduct of [the sixth respondent]’s affairs” ([30]). These include the payment of substantial sums of money from the sixth respondent to the first, second and fourth respondents and to two law firms engaged by the active respondents. It is alleged that the sixth respondent has paid the legal fees of the active respondents. Another allegation is of the payment of a substantial sum in 2023 from the sixth respondent to a company belonging to the fifth respondent. It is noted that the active respondents claim that this has been repaid, but there is no evidence of this.

35. Section 8 contains the prayer of the petition. The remedies sought include (i) declarations as to the petitioners’ “respective equitable shareholdings, based on proprietary estoppel and/or common intention constructive trusts”, (ii) orders or directions needed to transfer or register shares, (iii) any rectification of the register that may be needed, and (iv) “share purchase orders, without discount, under section 996 of the Companies Act 2006 , based on formal valuations of [the sixth respondent] and in the case of [the fourth petitioner], [the eighth respondent], with credit to be given for any sums already received”. Of these remedies, (iv) is commonly, if not almost invariably, sought in unfair prejudice petitions, and I can see that there may possibly be circumstances in which (iii) might be asked for. But I have never previously encountered an unfair prejudice petition in which remedies of the nature of (i) and (ii) are sought. The active respondents’ objections

36. The active respondents’ objections to the petition are set out in detail in the appendix to their skeleton argument. But, in the body of that skeleton argument they also say this: “54. Ps’ New Amendment Application and Draft New Petition fail to satisfy the applicable principles and should be disallowed. The Draft New Petition is incoherent, internally inconsistent in several respects and fails to disclose any allegations that have a realistic prospect of success in an unfair prejudice action. [ … ]

59. In the main, the Draft New Petition proceeds by pleading (in the introductory passages and then for each petitioner) a series of alleged agreements and/or promises but only in a very light-touch fashion and without any precision or clarity whatsoever about who exactly was involved, what the legal effects of each are said to be and how these are said to have interacted with each other.

60. For each petitioner, there then follows a series of extremely vague and imprecise allegations that Rs (without differentiation as between them) have unfairly prejudiced Ps by supposedly departing from purported “agreements” and/or “promises” as to their share entitlements and by (among other things) demoting them, reducing their salaries and humiliating and bullying them.”

37. Other points are made as well. These include the fact of the allegation by the petitioners that the petitioners have been subject to the “expropriation or attempted expropriation” of their shares, when the petitioners also acknowledge that no share transfers were ever made to the petitioners ([62](a)), a failure to plead the basis upon which it is said that the petitioners had expectations as to their employment related entitlements ([62](b)), and allegations that the petitioners are owed monies by the company, which allegations on their face appear to concern debts owed by the company to the petitioners, and do not fall within the unfair prejudice jurisdiction ([62](c)). It is also said that the petition does not explain how responsibility for the matters complained of can properly be attributed to the active respondents given that only the fifth respondent was ever a director of the companies ([62](d)).

38. The appendix to the active respondents’ skeleton argument contains a paragraph by paragraph analysis of the then draft amended petition, divided into two columns. In the left-hand column is the text of the paragraph of the petition to which objection is taken. In the right-hand column is the explanation of the objection. The appendix covers some 20 pages and goes into great detail. Almost every paragraph of the petition has at least one complaint made against it. But a number of distinct themes are to be seen in the objections made. Unfortunately, the text of the draft petition then objected to by the respondents has now been superseded by the draft of 9 May 2025, and neither the numbering of the paragraphs nor their text is exactly the same. I have therefore gone through both and tried to reallocate the objections in the old draft to paragraphs in the new draft, where the text remains materially the same. This was a rather burdensome exercise, especially considering that some of the objections have been specifically addressed in the new draft.

39. Having done this exercise, the themes which I have seen include the following (referring to the paragraph objected to now found in the 9 May draft petition): (1) lack of clarity as to the basis upon which the allegation is made (see [14], [15], [16], [17], [28](g)); (2) vagueness and lack of clarity as to the pleading itself (see [28], [28](u), [28](ff), [28](oo)-(rr)); (3) lack of specificity in pleading attribution of conduct (see [19], [25], [28], [28](f), [28](n), [28](o), [28](s)); (4) inadequate pleading (see [19], [21], [24], [25], [28](a), [28](j), [28](u); [28](w), [28](gg), [28](oo)-[28](pp), [30](a)); (5) legally unsustainable pleading (see [5], [28], [28](d), [28](i), [28](v), [28](w), [28](aa), [28](qq), and [28](rr)); (6) allegation outside scope of section 994 petition (see [28], [28](b), [28](c), [28](l), [28](n), [28](o), [28](p), [28](s), [28](x), [28](y), [28](bb), and [30](a)); (7) absence of a necessary party (see [20]). Standing for the purposes of unfair prejudice petitions Statutory law

40. Section 994 of the 2006 Act relevantly provides: “(1) A member of a company may apply to the court by petition for an order under this Part on the ground— (a) that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or (b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial. [ … ] (2) The provisions of this Part apply to a person who is not a member of a company but to whom shares in the company have been transferred or transmitted by operation of law as they apply to a member of a company.”

41. The concept of a “member of a company” is created by section 112, which relevantly provides: “(1) The subscribers of a company's memorandum are deemed to have agreed to become members of the company, and on its registration become members and must be entered as such in its register of members. (2) Every other person who agrees to become a member of a company, and whose name is entered in its register of members, is a member of the company.”

42. As to the concept of a share in a company, section 540 relevantly provides: “(1) In the Companies Acts ‘ share’ , in relation to a company, means share in the company's share capital.” And section 544 relevantly provides: “(1) The shares or other interest of any member in a company are transferable in accordance with the company's articles.”

43. Section 768 relevantly provides: “(1) In the case of a company registered in England and Wales or Northern Ireland, a certificate under the common seal of the company specifying any shares held by a member is prima facie evidence of his title to the shares.”

44. Section 770 relevantly provides: “(1) A company may not register a transfer of shares in or debentures of the company unless— (a) a proper instrument of transfer has been delivered to it, or (b) the transfer— (i) is an exempt transfer within the Stock Transfer Act 1982 (c. 41), or (ii) is in accordance with regulations under Chapter 2 of this Part.”

45. Section 771 relevantly provides: “(1) When a transfer of shares in or debentures of a company has been lodged with the company, the company must either— (a) register the transfer, or (b) give the transferee notice of refusal to register the transfer, together with its reasons for the refusal, as soon as practicable and in any event within two months after the date on which the transfer is lodged with it.”

46. Section 773 provides: “An instrument of transfer of the share or other interest of a deceased member of a company— (a) may be made by his personal representative although the personal representative is not himself a member of the company, and (b) is as effective as if the personal representative had been such a member at the time of the execution of the instrument.”

47. Section 776 relevantly provides: “(1) A company must, within two months after the date on which a transfer of any of its shares, debentures or debenture stock is lodged with the company, complete and have ready for delivery— (a) the certificates of the shares transferred, (b) the debentures transferred, or (c) the certificates of the debenture stock transferred. (2) For this purpose a “ transfer ” means— (a) a transfer duly stamped and otherwise valid, or (b) an exempt transfer within the Stock Transfer Act 1982 (c. 41), but does not include a transfer that the company is for any reason entitled to refuse to register and does not register.”

48. Section 994 creates a statutory cause of action. Only those who fall within the section may rely on it in bringing legal proceedings. There are two classes of person who qualify. First, there are members of the company, under sub-s (1). Second there are persons who are not members of the company, but to whom “shares in the company” have been transferred by operation of law, under sub-s (2). The notion of a member is dealt with by section 112. It will be noted that this refers to two classes of person. First, there are “ subscribers of a company's memorandum”, under sub-s (1). Second, there are persons who agree to become members of a company, and whose names are entered in its register of members, under sub-s (2). In general terms, the first are the original members, and the second are the subsequent members.

49. It will be noted that the statutory concept of a member does not refer to ownership of any share or interest in the company (because not all companies have a share capital). However, where an agreed transfer of a share or shares in the company is registered by the company, the name of the new shareholder is entered on the register of members, and so he or she becomes “a member of the company” under section 112(2). But section 994(2) applies to a person who is not a member of the company but “ to whom shares in the company have been transferred or transmitted by operation of law ”.

50. The question is exactly how far this phrase extends. Certainly, it covers the personal representative of a deceased shareholder. Such a representative does become in law the owner of the assets formerly belonging to the deceased. And this situation is specifically contemplated by section 773, for example. Bankruptcy provides a similar example of vesting of assets by operation of law in the debtor’s trustee in bankruptcy: see the Insolvency Act 1986 , section 306 . And it appears to extend as far as a person in whose favour a stock transfer form has been executed and lodged with the company: see eg Re a Company 003160 of 1986 (1986) 2 BCC 99,276, 99,279 (Hoffmann J), and the judgment of Zacaroli J in the present case given on 5 March 2024 ( [2024] EWHC 497 (Ch) , [19]). Caselaw on equitable title

51. Preparation for the hearing before me was carried out on the basis that the petitioners would be relying, to some extent at least, on the argument that a person who has a claim to a share, not at law, but in equity , has standing to present a petition under section 994 . So, for example the skeleton arguments rehearse the relevant caselaw, on the basis that the argument is live. However, by the time of the hearing itself, the petitioners’ position had shifted, and they now say that they have standing on the basis of legal title to shares in the two companies, or (in the case of the fourth petitioner, in relation to the eighth respondent) at least under section 994(2) , set out above. However, this position was not accepted, or at any rate not expressly accepted, by the active respondents at the hearing in relation to the eighth respondent. So I think that for safety’s sake I need to deal with the equitable interest argument for myself.

52. The legal owner of an asset may declare a trust of it, or transfer it on trust, for the benefit of another person. That other person has no legal title, but can assert an equitable interest in it. Or a person may agree to buy an asset for valuable consideration, and so is generally regarded as having a beneficial interest in the asset from the moment of the contract, and before the legal title is transferred, as long as the contract is one of which equity will decree specific performance: see eg Shaw v Foster (1872) LR 5 HL 321, and cases there cited. Similarly, where a person can establish a claim to an asset by way of proprietary estoppel or common intention constructive trust, that person (“the beneficiary”) may, though not must , be awarded a proprietary remedy by virtue of which the legal owner holds the asset on trust in whole or in part for the beneficiary: see eg Motivate Publishing FZ LLC v Hello Ltd [2015] EWHC 1554 (Ch) , [56]-[61] . That third possibility is in fact what appears to have been alleged in the present case.

53. Fundamentally, however, they all come down to the same thing. There is someone whom the law regards as the owner of the asset. But there is someone else who is regarded by equity as the beneficial owner, in whole or in part. Can the someone else bring the claim? The answer under the general law of trusts, is No. Where there is a legal owner who holds the asset for the benefit of that other (the beneficiary), the legal owner (the trustee) has the duty to protect the interest of the beneficiary. That will include repelling any attack on the legal title (from which the beneficiary derives his own equitable rights) and indeed vindicating the asset and the bundle of rights inherent in it. Of course, there are special circumstances in which a beneficiary may sue a third party on behalf of the trust because the trustee is unable or unwilling to do so: see Roberts v Gill [2011] 1 AC 640 , [45]-[62]. But, absent such circumstances (which of course would have to be pleaded), the rule is that the legal owner alone brings proceedings against third parties. No such circumstances are pleaded in the present case.

54. The further question which then arises is whether there is anything special about a claim under section 994 , to distinguish it from other cases where a legal owner holds an asset for the benefit of a beneficial owner. There is authority on this question which I need to consider. The first case is Re a Company 007828 of 1985 (1986) 2 BCC 98,952, a decision of Harman J. In that case, H, B and S brought unfair prejudice proceedings under the predecessor of section 994 , section 459 of the Companies Act 1985 . The primary respondent was R, who held 51% of the shares in the company. H held 49% of the shares. The petitioners alleged that R had agreed to transfer shares to B and S but had failed to do so. R applied to strike out the petition in relation to B and S for lack of standing to present the petition. It was argued that B and S had standing by virtue of the constructive trust arising out of their share transfer agreement. Harman J made the order striking out B and S as petitioners.

55. He said (at 98,954, col 1): “The nature of the title to shares in companies with which the company is concerned is at all times that of the registered holder, who has a ‘legal estate’. The person who holds the shares is entitled to vote them. Of course there are equitable remedies if that person holds them as trustee, but those are remedies for the Chancery Court and not for the Companies Court, and they have nothing to do with the statutory remedy of petition and the statutory rights arising under the Companies Act. In my view, transmission by operation of law means some act in the law by which the legal estate passes even though there be some further act (such as registration) to be done; and in my view the mere allegation that there arises a constructive trust – remembering that a constructive trust is frequently a matter of a remedy supplied by a court by way of imposition upon the conscience of the person affected, rather than an existing act in the law – cannot possibly amount to a transmission by operation of law.”

56. A second case was similar. It was Re a Company 003160 of 1986 (1986) 2 BCC 99,276, a decision of Hoffmann J, as he then was. Four individuals agreed to purchase a company and run a business through it. Three of them took shares in their own names. The fourth, being subject to a possibly relevant restrictive covenant, arranged for his wife to take up “his” shares, and he became simply an employee of the company. When the relationship between the four individuals broke down, the husband and wife petitioned under . The respondents accepted that the wife was a member, but applied to strike out the husband on the basis that he lacked standing. Hoffmann J made the order sought. section 459 of the Companies Act 1985

57. The judge said (99,278, col 2 – 99,279 col 1): “The motion is to strike out the name of Frederico as a petitioner on the ground that he has no locus standi to petition either under sec. 459 or for winding-up. For the purposes of the motion I must assume the truth of the allegations in the petition and I am willing to treat these as supplemented by the allegations in Frederico's affidavit. Section 459 says that a petition may be presented by a member of a company. ‘Member’ is defined in sec. 22 [of the 1985 Act ] as the subscribers to the memorandum and, in subsec. (2) – ‘Every other person who agrees to become a member of the company and whose name is entered in its register of members … ’ Frederico did not subscribe to the memorandum. If he agreed to become a member, it was according to his affidavit only with effect from January 1986. Whether or not this is sufficient to satisfy the first limb of sec. 22(2), his name has never been entered in the register of members and he therefore does not satisfy the second limb. On the language of the statute it seems to me plain that Frederico is not a member and there is in my judgment no authority which suggests the contrary. Section 459(2) also confers the right to present a petition upon certain persons who are not members. They are persons to whom shares – ‘ … have been transferred or transmitted by operation of law.’ This language echoes the provisions of sec. 183 [of the 1985 Act ]: ‘(1) It is not lawful for a company to register a transfer of shares in … a company unless a proper instrument of transfer has been delivered to it … (2) Sub-section (1) does not prejudice any power of the company to register as shareholder … a person to whom the right to any shares in … the company has been transmitted by operation of law.’ In my judgment the word ‘transferred’ in sec. 459(2) requires at least that a proper instrument of transfer should have been executed and delivered to the transferee or the company in respect of the shares in question. It is not sufficient that there should be an agreement for transfer. This construction accords with the view expressed by Harman J in Re a Company No 007828 of 1985 (1986) 2 BCC 98,951. In this case Giuseppina may have agreed to transfer her shares to her husband but there is no allegation that she has executed a transfer and there has been no transmission by operation of law. Accordingly Frederico has no locus standi to present a petition under sec. 459.”

58. The same result was come to in Re Quickdome Ltd (1988) 4 BCC 296, a decision of Mervyn Davies J. A stock transfer form was signed by the registered shareholder as transferor and handed over to the petitioner in blank. It was held, following the words of Hoffmann J in the last paragraph of the quotation above, that no proper instrument of transfer had been executed, and that the petitioner had not established standing. It is not necessary for me to cite from that decision.

59. The next case with which I deal in detail is Re Brightlife Ltd [2004] 2 BCLC 191 , a decision of Jonathan Crow QC (as he then was, sitting as a deputy judge of the High Court). In that case, an unfair prejudice petition was brought by (1) a company (JGR) which was a shareholder in the company the subject of the petition (Brightlife), (2) a Mrs Barton, for whose benefit JGR held those shares, but who did not otherwise hold any shares in the company, and (3) Mrs Barton’s husband, who was neither the legal nor the beneficial owner of any shares in the company. The respondent sought to strike out the petition as against those three petitioners. In relation to JGR, it was argued that it had no standing because, being a nominee shareholder, it had no economic interest in Brightlife. In relation to Mrs Barton, although it was accepted that she had a beneficial interest in Brightlife shares, she had no legal ownership of them. In relation to Mr Barton, he had neither a legal nor a beneficial interest in such shares. The deputy judge struck out Mr and Mrs Barton as petitioners, but left JGR in as a petitioner, notwithstanding that it was a nominee shareholder.

60. In his judgment, the deputy judge dealt first of all with Mr and Mrs Barton. He said: “31. … The right to petition the court under s 459 is conferred only on members and those to whom shares have been transferred by operation of law, and neither Mr nor Mrs Barton falls within those categories. No rights are conferred on them by s 459 , and although there may be room for nominal defendants in certain types of proceedings, there is in my view no room for nominal petitioners in this context.”

61. He then went on to deal with the position of JGR: “37. It is striking that this specific point, relating to a nominee shareholder as petitioner, seems never to have been argued or decided before. However, it is also striking that numerous cases have been argued and decided on the assumed basis that a nominee shareholder is fully entitled to complain under s 459 about any diminution in value of the shares registered in its name, and that its ‘interests’ are for these purposes co-extensive with the interests of the beneficial owner: see Estill v Cowling Swift & Kitchin [2000] Lloyd’s Rep PN 378 at [101], Arrow Nominees Inc v Blackledge [2000] 1 BCLC 709 at 711, Lloyd v Casey [2002] 1 BCLC 454 at [48]–[49], and Rock Nominees Ltd v RCO (Holdings) plc [2003] EWHC 936 (Ch) at [2]–[3], [2003] 2 BCLC 493 at [2]–[3]. It is, I suppose, entirely possible that all the learned counsel and judges involved in those cases (including, in Lloyd v Casey , junior counsel for the Reedbest parties in this case) completely failed to miss a knock-out point, but it seems highly unlikely. More probably, the point was never taken in any of those earlier cases because it is simply wrong.

38. For the purposes of this strike-out application, all I have to decide is whether it is properly arguable that the ‘interests’ of a nominee shareholder under s 459 are capable of including the economic and contractual interests of the beneficial owners of the shares. In my judgment, based on both the language of s 459 and the authorities mentioned above, I consider it to be well arguable: indeed, if I had to decide the point, I would find that it was correct.”

62. This decision, by one so experienced in this field as the deputy judge, at least suggests, if it does not actually confirm, that the position for petitions under section 994 is the same as that under the general law, as set out in Roberts v Gill , albeit that the rule in this jurisdiction is the result of the words of the statute, rather than of the general caselaw. The trustee can present the petition, but not the beneficiary.

63. A fifth case is Re Starlight Developers Ltd [2007] BCC 929 , a decision of Briggs J (as he then was). The respondents sought to strike out a petition under section 459 of the 1985 Act on the ground that the petitioner lacked standing to present it. The petitioner accepted that his name was not on the register of members, and that he was not a member, nor a person to whom shares had been transferred or transmitted by operation of law. But he claimed that the register should be rectified with retrospective effect to show him as the owner of shares by allotment under a pre-incorporation agreement with the respondents. It was common ground that the claim to rectification raised triable issues, and could not be determined summarily or as a preliminary issue in the petition. Briggs J declined to strike out the petition immediately. Instead, he stayed it on terms to enable the rectification claim to be tried out separately.

64. He referred to the decision of Harman J in Re a Company No.007828 of 1985 (1986) 2 BCC 98,951, and said (933F): “It is to be noted that that was not a case in which it was suggested on behalf of the petitioner that execution of the constructive trust on which he sought to rely by the court would lead to retrospective replication of the register of members.”

65. He referred also to the decision of Hoffmann J in Re a Company 003160 of 1986 (1986) 2 BCC 99,276, and said (933G): “Again there was no suggestion made on behalf of the petitioner that he could seek rectification of the members register with retrospective effect.”

66. He referred also to the decision of Mervyn Davies J in Re Quickdome Ltd (1988) 4 BCC 296. He said (933H): “Again it is to be noted that it was not suggested on behalf of the petitioner in Re Quickdome Ltd that his locus could be made good by an application for retrospective rectification.”

67. After considering these and other authorities, Briggs J said: “18. I must now express my conclusions as a result of the effect of those authorities and the parties’ submissions. First, before the coming into force of the Civil Procedure Rules there was a body of authority to the effect that firstly, the restriction as to the types of person with standing to present a s.459 petition should be firmly enforced by striking out non-qualifying petitions. Secondly, in relation to winding-up petitions, a bona fide dispute as to the petitioner’s standing to present a petition should lead to the dismissal or striking out of the petition, leaving the petitioner first to establish his or her standing by separate proceedings. Thirdly, no case had established that the principle which I have just identified in relation to winding-up petitions should be applied to s.459 proceedings where no winding up is sought in the alternative. Fourthly, in none of the cases under s.459 was it alleged that the petitioner could have perfected his or her standing by retrospective rectification of the register of members and on their facts it seems to me that retrospective relief by way of rectification would not have been obtained even if the allegations relied upon by the petitioners in those cases had been made good. [ … ]

20. The existence of a triable claim with reasonable, i.e. not purely fanciful, prospects of success for retrospective rectification from a date ante-dating the presentation of the petition means, first, that the court cannot be sure today that rectification will not lead to the petitioner having been deemed to have had the necessary standing throughout. Secondly, there is therefore a risk that if the petition is struck out now, the time and money so far spent on it will have to be re-spent on a substituted identical fresh petition in due course if this petition is struck out. Thirdly, if the petition is dismissed with costs now but the petitioner shows later that it was only due to the respondents’ fault that the petitioner was not registered as a member throughout, that order may work a real injustice. By contrast, if the petition is stayed now with costs reserved, neither of those two adverse consequences or risks would flow. [ … ]

22. In the result, therefore, it seems to me that I have a discretion whether to stay or to dismiss this petition. A stay involves making no order on the petition which would be without jurisdiction due to the petitioner’s present lack of standing. On the contrary, it postpones the exercise of any jurisdiction or powers under ss.459 –461 until the facts relevant to the petitioner’s standing have been established one way or the other. Therefore, I propose to stay this petition for the reasons given. In my judgment, a stay is a solution more in accordance with the overriding objective than to strike out the petition now, but I intend to do so on terms … ”

68. The judge clearly distinguished the case where the claim under section 459 included one to retrospective rectification of the company’s share register from one where the claim sought to compel the transfer of shares prospectively . But there was no suggestion that an equitable interest in shares was by itself sufficient for standing to present a petition. This was all about standing by way of legal ownership of shares. What made it possible to impose a stay on the petition in that case, pending resolution of the parallel claim to rectification, was the fact that the rectification sought, if granted, would have retrospective effect on the legal ownership of the shares in question.

69. The last decision to which I need refer is that of ICC Judge Greenwood in Re Contingent & Future Technologies Ltd [2023] EWHC 2451 (Ch) . In this case, a company was founded by three individuals, each of whom was allotted shares and became a director. The relationship between them subsequently broke down, and the company (acting by two of the three) purported to dismiss the third, Mr Onea, as an employee, and to remove him as a director. Moreover, he was treated as a “bad leaver” under the articles of association, so his shares became deferred shares and were transferred to one of the other two at nominal value. The name of Mr Onea was then removed from the register of members. He presented a petition under section 994 of the 2006 Act , including a claim to retrospective rectification of the register of members. The other two members, respondents to the petition, applied to strike out the petition for lack of standing, or alternatively for abuse of process. The ICC judge went through the authorities, and ultimately ordered a split trial of the petition, the first stage dealing with rectification of the register and standing, and the second with the allegations of unfairly prejudicial conduct.

70. The judge said: “111. First, in my view, as matters stand, Mr Onea’s claim to retrospective rectification of the register of members on the basis that he left the Company as a ‘Good’ rather than a ‘Bad Leaver’ (and has therefore at all material times since before the Petition was presented been entitled to 120,000 ‘Good Leaver Shares’) is credible and based on reasonable grounds; it has, at least, a real prospect of success. [ … ]

113. Second, this is a case (unlike both Starlight Developers and, certainly to some extent, Re I Fit Global ) in which, as I have described, the allegations of unfair prejudice are very substantially similar to the grounds on which the petitioner claims an entitlement to retrospective rectification of the register. I accept that they are not wholly identical, and I accept that the Applicants are yet to serve Defences, but it is plain nonetheless that there will be very significant common territory.

114. Third, Mr Onea does not seek a winding-up order against the Company.

115. In those circumstances, I do not accept that it would be just to strike out the Petition, and effectively compel Mr Onea to commence fresh proceedings in which to establish, if he can, his membership, before commencing fresh proceedings under section 994 . In my view, in substance, that step would be inconsistent with the approach taken by Briggs J in Starlight Developers , and in any event, is not justified by reference to the court’s duty to manage cases in accordance with the overriding objective. As in Starlight Developers , if the Petition were now to be struck out in its entirety, with costs payable to the Applicants, but Mr Onea were subsequently to show that he was at all times entitled to membership and was only removed from the register due to the fault of the Respondents, there is a risk that the order would (to adopt the words of Briggs J) “work a real injustice”. Mr Onea would be compelled to spend time and money reproducing steps already taken, and the costs paid to the Applicants would almost certainly be irrecoverable.

116. The real issue in this case is whether to adopt the Applicants’ third alternative (to strike out paragraphs (1) – (4) of the Prayer, and otherwise stay the Petition pending proof of membership in proceedings to be commenced and concluded separately, as, essentially, in Starlight Developers ) or the Petitioner’s preferred course (to order a split trial, as in Re I Fit Global ). In my view, the Petitioner’s suggestion is plainly preferable; it is quicker, fairer and more efficient … ”

71. The decision in this case does not go beyond the principles laid down by Briggs J in Starlight Developers . Indeed, the ICC judge seeks loyally to apply them to the facts of the particular case before the court. These included the fact that the petitioner was (as in Starlight Developers itself) making a claim to a retrospective rectification of the share register. Once again, however, there is no suggestion in the judgment that an equitable interest in shares is of itself sufficient for standing to present a section 994 petition.

72. In their skeleton argument in the present case, the petitioners submit: “19. This overriding objective-focused decision suggests that Re Company (No 007828 of 1985) would not be decided in the same way 40 years on. In 1985, the court did not have to consider the factors in the modern overriding objective such as delay, cost and proportionality. It is submitted that the nuanced and pragmatic modern approach in Re Contingent and Future Technologies [2023] EWHC 2451 is to be preferred to the pre-Woolf doctrinaire rigidity of Re a Company (No 007828) of 1985) .”

73. I do not accept this submission. The approach of the ICC judge in Contingent and Future Technologies does not strike out in a new direction. It follows existing post-CPR authority ( Starlight Developers ), which itself was consistent with the pre-CPR authorities where there was no claim to retrospective rectification of the share register. There is no reason to suppose that, if there had not been such a claim in the case, the ICC judge would still have reached the same conclusion.

74. In my judgement, the law is that standing to present a petition under section 994 is governed by the requirements of that section. These provide for a bifurcated approach. Either of two limbs will do. One limb focuses on membership of the company, which itself depends on being on the register of members. As I have already said, this does not require the ownership of shares. There is no room for such a thing as “equitable membership” of a company. If the register is rectified retrospectively, the person concerned always was a member. If not, then he or she never was. The other limb does however focus on shares. They are shares which “ have been transferred or transmitted by operation of law ”. The decisions of Harman J and Hoffmann J in 1986 show that these words refer to the transfer or transmission of the legal ownership of the shares, and that equitable or beneficial ownership is not enough. The post-CPR decision of Jonathan Crow QC in Brightlife reflects the latter point. The post-CPR decision of Briggs J in Starlight Developers casts no doubt on the earlier decisions on the meaning of section 994(2) . Nor does that of ICC Judge Greenwood in Contingent and Future Technologies . In my judgment the law on this point is settled. Whether pre- or post-CPR, equitable or beneficial ownership of shares is not enough. Scope of the section 994 jurisdiction

75. The jurisdiction of the court under section 994 is limited. It concerns either (a) conduct of the company’s affairs in a manner which is unfairly prejudicial to the interests of members generally or some part of the members, including the petitioner, or (b) an actual or proposed act or omission of the company (or on its behalf) which is or would be so prejudicial. These limits have long been recognised. In Re Unisoft Group Limited (No3) [1994] 1 BCLC 609 , Harman J said (at 610): “The [words of section 459 of the Companies Act 2006 , now section 994 of the 2006 Act ] … are, on the face of them, extraordinarily wide and general. They allow, on the face of them, every sort and kind of conduct which has taken place over an almost unlimited – certainly upwards of 20 years – periods of time in the management of a company's business to be dug up and gone over. The words are, however, limited by the reference to 'the company's affairs' in respect of which the conduct must be alleged. The section also enables a member to apply to the court on the ground that 'any actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial’. Again the words are wide and anything that the company does or fails to do can be relied upon. But wide as the category of acts may be it is necessary that the act or omission is done or left undone by the company itself or on its behalf … The acts of the members themselves are not acts of the company nor are they part of the conduct of the affairs of the company and cannot found a petition under section 459 [now section 994 ]”.

76. The significance of these limits is clear. In Re Coroin Ltd [2014] BCC 14 , Arden LJ pointed out that: “13. The requirements relevant to this appeal are that: (1) there is an act or omission on the part of the company; and (2) that act or omission is unfairly prejudicial to [the petitioner].

14. These requirements are cumulative. If the court concludes that the first requirement is not satisfied, the second requirement does not arise … ”

77. It is therefore important that the facts pleaded in an unfair prejudice petition are restricted to matters which fall within the court’s jurisdiction under section 994 . In Graham v Every [2014] EWCA Civ 191 , Arden LJ (with whom McCombe and Vos LJJ agreed) said: “37. The requirement in section 994 for an ‘act or omission of the company’ means that the petitioner must identify something which the company does or fails to do. The alternative requirement – that "the company's affairs are being or have been conducted in a manner that is unfairly prejudicial" to members or the petitioner – does not contain the same stipulation. [The petitioner] can rely on the actions of some other persons, including his fellow shareholders. But the actions must still amount to the conduct of the company's affairs.”

78. The meaning of “the company’s affairs” for this purpose has been the subject of judicial explanation. In Re Neath Rugby Club Ltd [2009] EWCA Civ 291 , [50], Stanley Burnton LJ (with whom Moore-Bick LJ and Blackburne J agreed) said: “The judge [in the court below] cited the observations of Powell J in Re Dernacourt Investments Pty Ltd (1990) 2 ACSR 553: The words ‘affairs of a company’ are extremely wide and should be construed liberally: (a) in determining the ambit of the ‘affairs’ of a parent company for the purposes of s 320, the court looks at the business realities of a situation and does not confine them to a narrow legalistic view; (b) ‘affairs’ of a company encompass all matters which may come before its board for consideration; (c) conduct of the ‘affairs’ of a parent company includes refraining from procuring a subsidiary to do something or condoning by inaction an act of a subsidiary, particularly when the directors of the parent and the subsidiary are the same … I would accept these propositions, but with some qualification. (b) may extend to matters which are capable of coming before the board for its consideration, and may not be limited to those that actually come before the board: I do not accept that matters that are not considered by the board are not capable of being part of its affairs. Nonetheless, like the judge, I am unable to see how it can be said that the affairs of Neath and of Osprey were so intermingled that all of the affairs of the latter were the affairs of the former. It would, for example, be quite irrational to suggest that Mr Blyth, when acting as a director of Osprey, was conducting the affairs of Neath.”

79. And, in Re Charterhouse Capital Ltd [2015] EWCA Civ 536 , Sir Terence Etherton C (with whom Lewison and McCombe LJJ agreed) said: “45. The expression ‘the company’s affairs’ in subs 1(a) is of wide ambit and plainly covers all matters decided by the board of directors. Equally plainly, it does not extend to matters which are neither effected by the company nor on its behalf but, for example, concern activities of shareholders solely in that personal capacity and as between themselves. Accordingly, actions or omissions in compliance or contravention of the articles of association of a company may or may not constitute the conduct of the company’s affairs within s 994(1) depending on the precise facts … ”

80. More recently, in Primekings Holding Ltd v King [2022] Bus LR 184 , Snowden LJ, with whom Green and Nugee LJJ agreed, said: “63. The principle that statements of case should only set out the facts that go to make up each essential element of the cause of action relied upon is particularly relevant to pleadings in unfair prejudice petitions. There has, from the early days of the unfair prejudice jurisdiction, been a clear tendency for petitions and pleadings in such cases to seek to raise myriad grievances and complaints of diverse forms of misconduct against the respondents to the petition. This experience has been especially prevalent in cases in which it is alleged that the company is a quasi-partnership so that equitable considerations are in play. Such wide-ranging allegations are often then said to require extensive disclosure and a lengthy trial at which the entire history of the formation and breakdown of the relationship between the parties is gone through in enormous detail. [ … ]

66. … neither section 459 of the Companies Act 1985 nor Section 994 were drafted on the basis that a shareholder could simply complain, for example, that ‘a course of conduct in relation to the company’ had unfairly prejudiced his interests. The potential breadth of what is now Section 994 has been limited and kept within manageable bounds by the express statutory requirements that the acts complained of must either (i) be an act or omission of the company, or (ii) be conduct of the company's affairs rather than acts done in the conduct of a shareholder's personal affairs.”

81. Thus, for example, the personal action of a shareholder or third party cannot by itself amount to a matter falling within section 994 . It must be pleaded (and proved at trial) that there was a causal connection between that action and the act or omission of the company constituting the affairs of the company: see Primekings , [61].

82. It is also necessary to bear in mind that the unfair prejudice has to be to the petitioner as a member of the company, although that is not to be narrowly construed. Thus, as Falk J (with whom Bean and Nugee LJJ agreed) said in Loveridge v Loveridge , [2022] 2 BCLC 340 “68. … In the context of ss 994 -996 it is clear that the conduct must be unfairly prejudicial to the interests of one or more members as members, but in O'Neill v Phillips Lord Hoffmann stated at p.1105, by reference to R & H Electrical Ltd v Haden Bill Electrical Ltd [1995] 2 BCLC 280 (‘ R & H Electrical’ ), that ‘the requirement that prejudice must be suffered as a member should not be too narrowly or technically construed’. As discussed further below, in R & H Electrical account was taken of the interest of a loan creditor that was controlled by the relevant shareholder. A more recent example is Gamlestaden Fastigheter AB v Baltic Partners Ltd [2007] UKPC 26 ; [2007] BCC 272 (‘ Gamlestaden’ ), where account was taken of the benefit that could be obtained from the relief sought by an unfair prejudice petition by a joint venturer in its capacity as a loan creditor of an insolvent joint venture company.” Discussion

83. The question which I have to deal with is not whether some or all of the allegations made in the petition are capable of being the subject of some kind of claim against one or more of the respondents (as well as being made in sufficient detail and sufficiently cogently expressed). Some of them plainly are so capable, although of course that does not mean that they would succeed at trial. I am in no position to know that at this stage. Instead, the questions for me are (i) whether the allegations made are capable of being the subject of the proceedings actually launched , that is, a petition under section 994 , and (ii) if so, whether they are sufficiently detailed and cogently expressed to be allowed as amendments. The first of these is a much more restrictive question, arising from the fact that, as I have explained at some length, the scope of such petitions is narrower than other forms of legal proceeding, such as an ordinary CPR Part 7 claim. I will deal with the active respondents’ particular objections to paragraphs in the (9 May 2025 draft) petition as previously identified. Claims to shares in equity

84. I deal first with the question whether the paragraphs supporting a claim to equitable interest in shares by way of proprietary estoppel or constructive trust can properly be made in a petition under section 994 in support of the plea that the petitioner or petitioners has or have standing. The substantive law relating to this question has already been discussed. So far as I can tell, these paragraphs (in the 9 May 2025 petition) are [5], [28], [28](d), [28](i), [28](v), [28](w), [28](aa), [28](qq), and [28](rr).

85. I set them all out here: (1) The second and third sentences of paragraph 5 of the petition say: “Instead, the grant of shares has been treated informally by being the subject of express oral and/or written representations and/or agreements and/or expressions of shared intention from time to time between the parties. These have given rise to equitable entitlements to shares as set out hereinbelow.” (2) In paragraph 28 of the petition it is alleged that “shares have been allocated … from time to time, which have taken effect at law and/or in equity… ” Here the objection is to the words “and/or in equity”. (3) The particulars in subparagraph (d) under paragraph 28 say: “P5 (by P1 and under its previous name of Hong) carried out such work in detrimental reliance upon the representation as to its entitlement to 50% of the shareholding in the new UK business”. (4) The particulars in subparagraph (i) under paragraph 28 say: “In the premises and insofar as may be necessary to establish locus standi, relying on the doctrines of proprietary estoppel and/or common intention constructive trust, P5 (by P1) became and is entitled in equity to 50%, alternatively to 48%, of the shareholding in Oriental;” (5) Similarly, the particulars in subparagraph (v) under paragraph 28 say: “In reliance on the promise of a 2% shareholding and/or the said common intention, P2 acted to his detriment by investing some £30,000 in the business and/or by assuming the role of director of Oriental in or about October 2017 and/or by working at the restaurant premises at 2, New Oxford Street as an ‘executive director’, and in so doing, giving up a better paid job as a manager at Burger King” (6) The particulars in subparagraph (w) under paragraph 28 say: “In the premises and/or relying on the doctrines of proprietary estoppel and/or common intention constructive trust, P2 became and remains entitled in equity to 2% of the shareholding in Oriental, if, which the Respondents appear to accept in any event, he did not acquire legal title to his shares”. (7) The particulars in subparagraph (aa) under paragraph 28 say: “Between November 2018 and May 2019, P2 invested approximately another £54,000 on the faith of the promise of another 3% of Oriental’s shares, which was broken by R1 to R4 in failing to pass legal title to those further shares” (8) The particulars in subparagraph (qq) under paragraph 28 say in part: “ … but on the faith of oral promises of shares in Oriental and R8, P4 engaged or continue to engage in employment for Oriental and thereby acted to her detriment”. (9) The particulars in subparagraph (rr) under paragraph 28 say: “In the premises, P4 relied to her detriment on the oral promise of shares and by way of the doctrine of proprietary estoppel, she also has locus standi by virtue of s.994(2) of the 2006 Act .”

86. I can deal with these allegations all together. In my judgment, for the reasons given above in discussing whether a claim to shares in equity would suffice for standing, all these statements are legally irrelevant in the context of this petition. Equitable claims to shares do not confer standing. These statements might be relevant in relation to a CPR Part 7 claim, for example to compel the performance of a contract to buy and sell shares, or where a claim is made to a constructive trust of shares, but they have no place here under section 994 . Even if proved at the trial of the petition, they could not lead to success, and accordingly I cannot give permission for any of these statements to be included by way of amendment. Claims outside scope of petition

87. I turn now to the objections to the amendments on the grounds that they are outside the scope of a petition under section 994 . Again, the substantive law relating to this question has already been discussed above. The amendments which I have identified as objected to on this basis are now contained in (9 May 2025 petition) paragraphs [28], [28](b), [28](c), [28](l), [28](n), [28](o), [28](p), [28](s), [28](x), [28](y), [28](bb), and [30](a). Again, I set out each in turn.

88. In paragraph 28 of the petition it is alleged that “the affairs of Oriental and/or also R8 in the case of P4, have been conducted by R1 and/or R2 and/or R3 and/or R4 and/or R5, so as to cause the Petitioners and each of them to sustain unfair prejudice, including … (b) by deliberate subjugation taking the form of demotion of company officer status and/or role and/or job title”.

89. The active respondents say that paragraph (b) involves merely a kind of employment dispute allegation. I disagree. There is an express reference to the conduct of the affairs of the companies, and to acts of demotion carried out on behalf of those companies. Moreover, the particulars under this paragraph go on to supply more detail. I do not think that I can simply treat paragraph (b) as outside the scope of section 994 .

90. I deal with the next two paragraphs together. In paragraph 28(b) of the petition it is alleged that “The 2017 agreement required P5 (by P1 and under its previous name of Hong) to start preparatory work, including but not limited to, the registration of Oriental, opening the company bank account, site selection, project budgeting, design, decoration, and staff recruitment. The site selection and internal and external decoration plan were to be the sole responsibility of P5 (by P1), who had to report to R1. R1 was to be responsible for providing a manual, core product production standards and the supply of the main raw materials such as soup powder and stir-fry ingredients … ”

91. In paragraph 28(c) of the petition it is alleged that “The 2017 agreement provided that R1 would not be responsible for the direct operation of the project; P1 (or P5) would be responsible for UK operations … ”

92. The objection by the active respondents to paragraphs 28(b) and 28(c), under this heading, at least, is that they do not plead any basis for the “employment style entitlements” about which complaint is made. I do not think that either of these paragraphs can be objected to on that basis. These paragraphs attribute the “entitlements” referred to to the 2017 agreement. On the other hand, there is no pleading that the affairs of the companies are being conducted in a manner unfairly prejudicial to the petitioners. The reality is that these paragraphs are just introductory to allegations thereafter, such as in paragraph 28(l) (below), and their relevance depends on those allegations.

93. In paragraph 28(l) of the petition it is alleged that “The plainly unfavourable 2018 agreement of P1 and P5 to that diminution, was procured by way of pressure by R2 and R4. They threatened P1 in oral discourse on dates that cannot now be recalled specifically that they would close down Oriental and abandon the proposal to establish restaurants with P1 (and P5), if P1 did not agree to the 2018 proposals and sign the further co-operation agreement. P1 thereby signed under economic duress. The pressure tactics, whilst not averred herein to be per se actionable, were manifestly unfairly prejudicial conduct on the part of R2 and/or R4. Reliance will be placed on the witness statement of P1 dated 16 October 2023 (paras 64-69) … ”

94. The active respondents’ objection is that this does not refer to the conduct of the affairs of the companies or to any act or omission of the companies. It refers instead to the entering of a shareholders’ agreement by way of economic duress on the petitioners, thus potentially rendering that agreement void or voidable. I agree that it does that. But it also alleges that the affairs of the sixth respondent would be conducted (by closing its business down) to the unfair prejudice of the petitioners. In my judgment, this allegation does not fall outside the scope of a section 994 petition, and therefore neither do those in 28(b) and (c).

95. In paragraph 28(n) of the petition it is alleged that “As at October 2018, P1 was employed by Oriental as a ‘Director/Executive Director’ on a salary of £42,000 per annum. From about 1 July 2019, P1’s salary with Oriental was reduced by R4 arbitrarily and for no stated reason, from £42,000 to £36,000 per annum and she was demoted by R3 and/or R4 to finance manager and a waitress from her position as an ‘executive director’. These were acts of intentional humiliation and capricious subjugation … ”

96. The active respondents say that this is simply an allegation of part of an employment dispute, and outside the scope of a section 994 petition. In the way that it is pleaded here, I agree. On its own, there is no sufficient allegation as to the conduct of the affairs of the companies or any act or omission of the companies. But I remind myself that this is in a paragraph of particulars under paragraph 28, which does refer to conducting the affairs of the companies in a manner causing unfair prejudice to the petitioners. So, it is not just an employment dispute, and I can give permission for it if it is otherwise appropriate.

97. In paragraph 28(o) of the petition it is alleged that “In November 2019, P1’s job title was downgraded to ‘cashier’ and her salary was further arbitrarily reduced by R4 and/or R3 from £3,000 per month to £1,000 per month, again without any justification … ”

98. Again, the active respondents say that this is simply an allegation of part of an employment dispute, and outside the scope of a section 994 petition. My response is the same as under paragraph 28(n).

99. In paragraph 28(p) of the petition it is alleged that “In or about January 2020, Oriental by R3 and R4 arbitrarily stopped paying P1’s salary altogether, proposed that P5’s shares in Oriental be reduced to 0% and that P1 should resign as a director (with P5 or P1 being granted a shareholding of 5%) … ”

100. Once again, the active respondents say that this is simply an allegation of part of an employment dispute, and outside the scope of a section 994 petition. My response is once again the same as under paragraph 28(n).

101. In paragraph 28(s) of the petition it is alleged that “On or about 22 January 2020, P1 felt compelled to resign from her position as a director and employee of Oriental in light of the aforesaid exploitation and humiliation of her by or on behalf of the Respondents, whether by action or mere acquiescence as the case may be … ”

102. Once more, the active respondents say that this is simply an allegation of part of an employment dispute, and outside the scope of a section 994 petition. My response is once more the same as under paragraph 28(n).

103. In paragraph 28(x) of the petition it is alleged that “Initially, P2 was not provided with a written employment contract. It was signed later and backdated to 1 October 2018. In it, P2’s day-to-day role was described as “Restaurant Manager”. In that role, P2 was paid a salary of £36,000 … ”

104. Similarly, the active respondents say that this is simply an allegation of part of an employment dispute, and outside the scope of a section 994 petition. Again, my response is the same as under paragraph 28(n).

105. In paragraph 28(y) of the petition it is alleged that “In or about April 2018, P2 was arbitrarily removed by R4 and/or R1 (by its CFO, Mr Jianhai Wang) as a director of Oriental. This was done without his agreement, nor was it even discussed with him. No reasons were given. This was a capricious and intentionally demeaning decision taken in the conduct of the affairs of Oriental by R4 and R1. The consequential loss of management control, influence and status by P2, despite his capital investment, is relied on as a discrete head of unfair prejudice … ”

106. The active respondents again say that this is simply an allegation of part of an employment dispute, and outside the scope of a section 994 petition. Again, my response is the same as under paragraph 28(n).

107. In paragraph 28(bb) of the petition it is alleged that “In or about October 2019, P2 was made by R3 and/or R4 and/or R5 to give up his role as ‘Restaurant Manager’ for Oriental. Thereafter, he was demoted by them and required by them to work as a waiter and maintenance man without pay. Subsequently, P2 was employed fitting out a restaurant in Birmingham, before being replaced even in that role. In addition, P2 was also required by R3 and/or R4 to work on Friday, Saturday and Sunday nights as a waiter for Oriental and not permitted by them to manage any staff in the restaurant. It is to be inferred that P2’s dramatic and rapid demotion from being a valued co-founder, investor and director, was, (as in the case of P1, P2’s close colleague) driven by a desire intentionally to manipulate, sideline and humiliate him. This constituted the conduct of the affairs of Oriental in a way that was unfairly prejudicial to P2 … ”

108. Once more, the active respondents say that this is simply an allegation of part of an employment dispute, and outside the scope of a section 994 petition. Once more, my response is the same as under paragraph 28(n).

109. In paragraph 30(a) of the petition, it is alleged that “substantial monies have on dates unknown been transferred from Oriental to R1 as to £312,719.11 and to R4 and R2 as to £426,205.94 and £38,407.92 respectively, as well as £506,926.10 transferred to law firms: Jackson Lyon and R&H. Absent good reason for these payments and proof of repayment, these sums must be repaid pending any valuation of Oriental or otherwise brought into account on valuation. If and insofar as payments out of Oriental may be irregular asset-stripping, they have caused P1/P5, P2, P3 and P4 further and obvious unfair prejudice. It is claimed these were payments made on behalf of and at the direction of those Respondents who had previously made loans to Oriental. But this is mere assertion and it is not made by anyone acting solely for the company. On any view they were large payments by the company to pay the legal fees of the Respondents, which is impermissible”.

110. The active respondents complain that this is “not an allegation of unfair prejudice and so has no prospects of success in an unfair prejudice petition anyway”. I do not agree. In my judgment it is an allegation of acts by the company that are unfairly prejudicial to the interests of the petitioners as members, and therefore within the scope of the petition.

111. Overall under this heading, none of the allegations complained of falls outside the scope of section 994 petition, and I can give permission for their inclusion in the amended petition if I consider it otherwise appropriate. Lack of clarity as to basis of allegation

112. I turn now to the objections to the amendments on the grounds that they lack clarity as to the basis of the allegation made (see [14], [15], [16], [17], [28](g)).

113. I can deal with the first four paragraphs together. In paragraph 14 of the petition it is alleged that “R2 is an investment shareholder in the HLHP Group company and a franchisee of Happy Lamb. He approached P1 and P2 in September 2017 to be partners in establishing ‘Happy Lamb’ hotpot restaurants in the UK. He owns 7,000 shares in Oriental and 1,000 shares in R8.”

114. In paragraph 15 of the petition it is alleged that “R3 signed the 2017 and 2018 Co-operation Agreements referred to below on behalf of R1. He owns 1,000 shares in R8.”

115. In paragraph 16 of the petition it is alleged that “R4 is the founder and owner of the Happy Lamb brand. At all material times, he has been or has acted as a director of R1. He is colloquially thought of amongst the Petitioners and/or described by them as ‘the Chairman’. No-one becomes or ceases to be a shareholder in Oriental without R4’s approval. He owns 9,739 shares in Oriental and 2,316 shares in R8. R4’s stake of less than 10% is for tax reasons. However, R4 controls the entire global Happy Lamb business. For the avoidance of doubt, R4 is primarily responsible for all of the unfairly prejudicial acts or decisions in the conduct of Oriental’s affairs set out hereinbelow.”

116. In paragraph 17 of the petition it is alleged that “R5 was employed as head chef at Oriental in about July 2019. The Petitioners understand that he was appointed a director of Oriental and R8 on 22 January 2020, but resigned from both positions on or about 29 June 2023. It is understood that he owns 10,000 ordinary shares in Oriental. He formerly owned 1,000 shares in R8”.

117. The active respondents complain that it is unclear as to the basis on which the various respondents have shareholdings in the sixth and the eighth respondents. I do not think that it is incumbent on the petitioners to make any allegation as to how the respondents acquired their shareholdings. The petitioners allege that an identified respondent has a specified shareholding in a particular company or companies. That is clear enough. There is nothing in these complaints.

118. In paragraph 28(g) of the petition it is alleged that “In or about April 2018, P1 became the registered owner of the entire issued share capital in P5”.

119. The active respondents complain that the basis for this pleading is unclear, “in circumstances where [the petitioners] have previously been seeking rectification in respect of [the fifth petitioner] in light of Peijin Hong still apparently holding the legal title to the shares”. The only paragraph of the new petition referring to Peijin Hong is paragraph 20, which pleads that 15 of the 43 shares in In-Touch were originally held (in 2017) by Peijin Hong. There is no inconsistency between that pleading and the pleading in this paragraph. It is true that the petitioners do not plead any act by which the shares held by Peijin Hong were transferred to the first petitioner. But I do not think that is required of them, at any rate at this stage. There is nothing in this complaint. Vagueness and lack of clarity as to the pleading itself

120. I turn now to the objections to the amendments on the grounds that they are too vague and unclear as pleadings (see [28], [28](u), [28](ff), [28](oo)-(rr)). I will deal with these one paragraph at a time.

121. In paragraph 28 of the petition it is alleged that “In broad terms and by way of preamble, the case of the Petitioners is that shares have been allocated by or on behalf of Oriental and/or, in the case of P4, R8, from time to time, which have taken effect at law and/or in equity, but that the affairs of Oriental and/or also R8 in the case of P4, have been conducted by R1 and/or R2 and/or R3 and/or R4 and/or R5, so as to cause the Petitioners and each of them to sustain unfair prejudice, including by: (a) arbitrarily and unlawfully reducing or expropriating share allocations without any proper payment or compensation and/or (b) by deliberate subjugation taking the form of demotion of company officer status and/or role and/or job title … ”

122. The active respondents complain that it is “unclear if and to what extent any other conduct referred to later forms part of alleged unfair prejudice and if so in what way”. They rely in particular on the use of the word “including”. The introductory part of this paragraph is followed by a considerable number of sub paragraphs, making specific, or more specific, allegations. This is commonplace for example in cases where negligence is pleaded against the defendant. In my judgment, it is clear that the conduct relied on is that set out in the particulars under this paragraph. There is nothing in this complaint.

123. In paragraph 28(u) of the petition it is alleged that “Further and/or in the alternative, in or about 2017, when he was recruited to the business, P2 was promised a 2% shareholding in Oriental. That promise was made orally by or on behalf of R1 to R4 on dates unknown in or about 2017. The shared and common intention of the parties was reflected in a confirmation statement filed at Companies House”.

124. The active respondents complain that this is “hopelessly vague and incoherent as to who said what and when and as a pleading for any kind of equitable entitlement”. I agree. This is not clear enough to plead to.

125. In paragraph 28(ff) of the petition it is alleged that “In the exercise of the re-organisation of the affairs of Oriental, Ms Li was promised by R4 and/or R1 and, through P3, was allocated in oral discussions with R4 on miscellaneous dates in July 2018, a 10% shareholding in Oriental (from R1)”.

126. The active respondents complain, in much the same way as in the previous paragraph, that this is “vague and incoherent in the extreme as to who said what and when and as a pleading for any kind of equitable entitlement”. I do not think that this suffers from the same degree of lack of clarity in the previous paragraph, in that there is some attempt to identify the person or persons making the promises and the approximate date they were made. I would not refuse permission to this amendment on this ground.

127. I will deal with the next four sub-paragraphs together. In paragraph 28(oo) of the petition it is alleged that “In early 2020, P4 was offered a 1% share in Oriental by R4 for no premium and was also asked by him to purchase a 1% shareholding in Oriental, for which she paid £5,000 on 20 January 2020”.

128. In paragraph 28(pp) of the petition it is alleged that “On 21 January 2021, P4 purchased a 1% shareholding in R8 for £4,000”.

129. In paragraph 28(qq) of the petition it is alleged that “P4 avers insofar as may be necessary for locus standi that no share certificates or executed stock transfer forms were provided to P4 by or on behalf of Oriental or R8, but on the faith of the said oral promises of shares in Oriental and R8, P4 continued to offer her labour to Oriental and R8 and thereby acted to her detriment”.

130. In paragraph 28(rr) of the petition it is alleged that “In the premises, P4 relied to her detriment on the oral promise of shares and by way of the doctrine of proprietary estoppel, she also has locus standi by virtue of s.994(2) of the 2006 Act ”.

131. The active respondents complain, in relation to the four sub-paragraphs ((oo)-(rr)) that this is a “particularly vague and incoherent case of pleading for alleged equitable entitlements”. So far as these subparagraphs deal with equitable entitlements, I have already dealt with them. In terms of vagueness and lack of clarity, I see nothing wrong with subparagraphs (oo) and (pp). Nor do I see anything wrong with subparagraph (rr), because by using the phrase “in the premises” it is saying that the detail has already been given. The only subparagraph which might be open to criticism is (qq), where it is said “continued to offer her labour to Oriental and R8”. On the whole I do not think that this is so unclear that it cannot be pleaded to.

132. Accordingly, under this heading I uphold the complaint in 28(u), and would refuse permission to that amendment on this ground, but allow all the others under this heading. Lack of specificity in pleading attribution of conduct

133. I turn now to the objections to the amendments on the grounds that they lack specificity in attributing conduct amongst the respondents (see [19], [25], [28], [28](f), [28](n), [28](o), [28](s)).

134. In paragraph 19 of the petition it is alleged that “On 25 September 2017, R2 met P1 at her home. He proposed that P1 would have 30% of the equity in the new venture and that P2 would have 2%. This was agreed by P1.”

135. The active respondents say that it is unclear if and how this is said to impact on other respondents than the second respondent. I do not accept this criticism. It is clear that the conduct is attributed to the second respondent only. It is not alleged that he was acting on behalf of any other respondent.

136. In paragraph 25 of the petition it is alleged that “ … Oriental has been managed variously since inception by those controlling R1 and/or by R2, R3, R4 and R5 as de facto directors of or ultimate decision-makers in, Oriental, irrespective of their formal status as a director. The best particulars available are that these individuals appear to have little regard for legal status and act as a shadowy syndicate, making decisions and issuing orders and directives to their colleagues in the UK.”

137. The active respondents complain that there is no attempt to differentiate in any way between the respondents, or to attribute particular acts or omissions or conduct to one or more of them. I agree. This makes it difficult, if not impossible, if the court should find (for example) that there was conduct of the affairs of the companies, for the court to fashion an appropriate remedy such as a “buy out order”. The petitioners may say that they do not know which of the respondents committed a particular act or omission. Unfortunately, that is sometimes the case. But justice to the individual respondents requires they be told what it is that they have to respond to. The burden of proof rests upon the petitioners to prove their case, and not upon the respondents to disprove it. I cannot give permission for this amendment.

138. In paragraph 28 of the petition it is alleged that “… the affairs of Oriental and/or also R8 in the case of P4, have been conducted by R1 and/or R2 and/or R3 and/or R4 and/or R5, so as to cause the Petitioners and each of them to sustain unfair prejudice … ”

139. The same objection as under paragraph 25 is taken under this paragraph. My answer is the same, and for much the same reasons. It might be different if the phrase “conducted by R1 and/or R2 and/or R3 and/or R4 and/or R5” had been written in some such terms as “conducted by such one or more of the 1 st to 5 th respondents as more particularly identified and set out in the particulars hereunder”, and the particulars then went on to identify particular respondents with particular acts or omissions. However, as we shall see, that is not the case. I cannot give permission for this amendment.

140. In paragraph 28(f) of the petition it is alleged that “In October 2017, an oral agreement, understood to be averred by the Respondents, was reached that P5’s shareholding in Oriental be reduced to 48% to enable P2 to acquire 2% of the shares in Oriental”.

141. The active respondents complain that there is no attempt to specify which (if any) of the active respondents was responsible for this action in relation to the sixth respondent. I agree. I do not see how the respondents can plead to this. I cannot give permission for this amendment.

142. I can take the next two paragraphs together. In paragraph 28(n) of the petition it is alleged that “As at October 2018, P1 was employed by Oriental as a ‘Director/Executive Director’ on a salary of £42,000 per annum. From about 1 July 2019, P1’s salary with Oriental was reduced by R4 arbitrarily and for no stated reason, from £42,000 to £36,000 per annum and she was demoted by R3 and/or R4 to finance manager and a waitress from her position as an ‘executive director’. These were acts of intentional humiliation and capricious subjugation”.

143. In paragraph 28(o) of the petition it is alleged that “In November 2019, P1’s job title was downgraded to ‘cashier’ and her salary was further arbitrarily reduced by R4 and/or R3 from £3,000 per month to £1,000 per month, again without any justification”.

144. The active respondents once again complain that there is no attempt to specify which (if any) of the active respondents was responsible for this action in relation to the sixth respondent. There is a specific allegation against the fourth respondent in paragraph 28(n), which cannot be objected to on this ground. The remaining allegations are made against the fourth respondent “and/or” the third. Claims pleaded in the alternative are not objectionable in principle: see Binks v Securicor Omega Express Ltd [2003] 1 WLR 2557 , CA. Whether it is indeed objectionable depends on a fact-sensitive evaluation. In the circumstances of this case, I think that there is sufficient to plead to, and I will give permission for it.

145. In paragraph 28(s) of the petition, it is alleged that “On or about 22 January 2020, P1 felt compelled to resign from her position as a director and employee of Oriental in light of the aforesaid exploitation and humiliation of her by or on behalf of the Respondents, whether by action or mere acquiescence as the case may be”.

146. The active respondents once more complain that there is no attempt to specify which (if any) of the active respondents was responsible for this action in relation to the sixth respondent. I agree. As with paragraph 25, paragraph 28 and paragraph 28(f), I do not see how the respondents can plead to this. I cannot give permission for this amendment. Inadequate pleading

147. I turn now to consider these allegations (see [19], [21], [24], [25], [28](a), [28](j), [28](u); [28](w), [28](gg), [28](oo)-[28](pp), [30](a))). These are not cases of vagueness or lack of clarity in the pleading, but rather where it is said that what is pleaded does not amount to a cause of action. Some similar complaints have been considered already, under the heading “Claims to shares in equity”. I will not repeat these here.

148. In paragraph 19 of the petition, it is alleged that “On 25 September 2017, R2 met P1 at her home. He proposed that P1 would have 30% of the equity in the new venture and that P2 would have 2%. This was agreed by P1”.

149. The active respondents complain that this “pleading [is] insufficient on its face if this is said to have any legal effect…” I do not understand the objection. It is trite law that parties do not have to plead law, only facts. This is a pleading of facts, no doubt intended to lay down the foundation for a claim to be made at trial to a remedy. There is nothing in this point.

150. In paragraph 21 of the petition, it is alleged that “On or about 6 October 2017, P1 and P2 flew to Boston, USA and met with R2, R3 and R4 and a Michael Luk of R1 at the first and then only Happy Lamb restaurant. At that meeting, an oral agreement was reached to the effect that, in return for their involvement in identifying and setting up the UK restaurants, Hong would have a 43% interest in the UK restaurants and P2 would have a 2% interest in the UK restaurants alongside the 55% interest of R1.”

151. The active respondents’ complaint is the same as under paragraph 19. For the same reasons, there is nothing in this complaint either.

152. In paragraph 24 of the petition, it is alleged that “On or about 8 October 2017, R2 sent P1 a WeChat message stating that shareholding in the new UK company should change to: R1 55% down to 50%; PH’s to increase from 15% to 20%; P1 and P2 remained respectively at 28% and 2%”.

153. The active respondents’ complaint is the same as under paragraph 19. For the same reasons, there is nothing in this complaint either.

154. In paragraph 25 of the petition, it is alleged that “The current directors of Oriental are Xin Li appointed on 23 March 2023 and Qinqing Li appointed on 1 September 2024. However, Oriental has been managed variously since inception by those controlling R1 and/or by R2, R3, R4 and R5 as de facto directors of or ultimate decision-makers in, Oriental, irrespective of their formal status as a director. The best particulars available are that these individuals appear to have little regard for legal status and act as a shadowy syndicate, making decisions and issuing orders and directives to their colleagues in the UK.”

155. The active respondents complain that the new petition “still fails to plead any adequate basis on which the conduct of the affairs of [the sixth or eighth respondent] is properly to be attributed to [the respondents] (and in fact it should be attributed to [the petitioners] themselves).” I do not accept this complaint of inadequate pleading failing to make a case. The conduct of the affairs of the companies is attributed to one or more of the respondents (which leads to a lack of specificity, but that is a different point). They are alleged to be acting as “de facto directors of or ultimate decision-makers in” the companies. There is nothing in this complaint.

156. In paragraph 28(a) of the petition, it is alleged that “On or about 20 October 2017, P5 (by its director and owner P1 and under its previous name of Hong) and R1 (by R3), entered into a ‘Cooperation Agreement’ to open restaurants under the Happy Lamb brand in the UK, by which they agreed and it was represented inter alia that 50% of the UK business would be owned by P5. This will be referred to at trial for its full terms and effect”.

157. The active respondents’ complaint is the same as under paragraph 19. For the same reasons, there is nothing in this complaint either.

158. In paragraph 28(j) of the petition, it is alleged that “On or about 2 August 2018, a further “Cooperation Agreement” which will be referred to at trial for its full terms and effect, was entered into by R1 and P5 (represented by P1), as well as with P2 and P3 (by its director and owner Ms. Wenjing Li), to open restaurants under the Happy Lamb brand in the UK. The 2018 agreement stated that, “Based on the principle of equality and mutual benefit, and seeking common development, all parties reached the following cooperation agreement by consensus”, this being (further) evidence of quasi-partnership in respect of the parties thereto … ”

159. The active respondents’ complaint is the same as under paragraph 19. For the same reasons, there is nothing in this complaint either.

160. In paragraph 28(u) of the petition, it is alleged that “Further and/or in the alternative, in or about 2017, when he was recruited to the business, P2 was promised a 2% shareholding in Oriental. That promise was made orally by or on behalf of R1 to R4 on dates unknown in or about 2017. The shared and common intention of the parties was reflected in a confirmation statement filed at Companies House”.

161. The active respondents’ complaint is the same as under paragraph 19. For the same reasons, there is nothing in this complaint either.

162. In paragraph 28(gg) of the petition, it is alleged that “The promise of P3’s 10% shareholding in Oriental was contained or expressly reflected in the 2018 Cooperation Agreement, which at that time, contemplated that Ms Li would hold shares in her own name”.

163. The active respondents’ complaint is the same as under paragraph 19. For the same reasons, there is nothing in this complaint either.

164. In paragraph 28(oo) of the petition, it is alleged that “In early 2020, P4 was offered a 1% share in Oriental by R4 for no premium and was also asked by him to purchase a 1% shareholding in Oriental, for which she paid £5,000 on 20 January 2020”.

165. The active respondents’ complaint is the same as under paragraph 19. For the same reasons, there is nothing in this complaint either.

166. In paragraph 28(pp) of the petition, it is alleged that “On 21 January 2021, P4 purchased a 1% shareholding in R8 for £4,000”.

167. The active respondents’ complaint is the same as under paragraph 19. For the same reasons, there is nothing in this complaint either.

168. Overall, there is nothing in any of the points considered under this heading. Absence of a necessary party

169. I turn finally to the objection to one amendment on the grounds that it cannot be made in the absence of a necessary party. Paragraph 20 says: “On or about 5 October 2017, with assistance from an accountant, Vincent Lim, Hong-Otto Investment Management Company Limited [later renamed In-Touch, the proposed fifth petitioner] was incorporated by P1 (‘Hong’). P1 was the sole director of Hong. Its issued share capital was 43 shares. 28 of those shares were held by P1 and 15 shares by the wife of R2, Peijin Hong (‘PH’). P1 initially intended to hold any interest that she might have in the proposed UK restaurants through Hong.”

170. The active respondents say that this pleading highlights the need for Peijin Hong also to be a party to this petition to the extent that the petitioners are still seeking any rectification in respect of the first petitioner. The prayer of the (9 May 2025) petition seeks, amongst other things, “any necessary rectification … under section 125 of the Companies Act 2006 ”. At present, however, I cannot see how, under the present petition, any order made on that petition would affect the interests of Peijin Hong (as distinct from those of In-Touch) which would justify adding Ms Hong as a necessary party. I do not think that this objection is made out. Conclusion on particular objections

171. Looking at the cumulative effect of my discussion of the various objections made by the active respondents, there are two main results. The first is that all claims to standing based on equitable rights in shares have been disallowed. The fourth petitioner accordingly can plead no standing to join in this petition in relation to the eighth respondent, except by way of the completed stock transfer form of 12 January 2025, which has not yet been registered. But on the authorities that is sufficient for section 994(2) . So the petition is not demurrable for lack of standing.

172. The second result is that the allegation of unfairly prejudicial conduct under paragraph 28 does not, as it stands, contain allegations of unfairly prejudicial conduct which are so pleaded as to be attributable to particular active respondents, and hence, absent further amendment, cannot be pursued against them. In addition, some of the particulars given under that paragraph will also be disallowed.

173. In my judgment, what that means overall is the petition should not be allowed to go forward, at any rate in this state. Opportunity to re-amend?

174. In Kim v Park [2011] EWHC 1781 (QB) at [40], Tugendhat J held that, where a statement of case is found to be defective, it is normal for the court to refrain from striking out without first giving the party concerned an opportunity to amend, provided that there is reason to believe that the party will be in a position to put the defect right. This was referred to with approval by the Court of Appeal in Alton v Powszechny Zaklad Ubezpieczen , [34], as “ [2024] EWCA Civ 1435 a reflection of what will in many cases fulfil the Overriding Objective ”. But it is not always appropriate to do this: see eg Gamatronic (UK) Ltd v Hamilton ; [2013] EWHC 3287 (QB) , [53] Webster v Penley [2021] EWHC 3386 (Ch) , [72]-[74].

175. If this were a first attempt at pleading this case, and particularly if the petitioners had previously been acting in person but had now instructed a lawyer, it would have been sensible to give the petitioners an opportunity to put their house in order. However, it is not a first attempt. This petition was first presented on 21 September 2022, now almost 3 years ago. The petitioners were represented at the outset by solicitors and counsel, though they changed solicitors (and indeed counsel) during the course of the proceedings. They then had a significant period when they were acting in person, I am afraid to very little effect, until quite recently, since when new counsel (with litigation rights) has taken over both the conduct of the litigation and the advocacy. The petition as originally presented is no longer persisted in, and a number of iterations of draft amended petitions have been put forward (including two in quick succession most recently). The question for me is whether I think that, if the petitioners are given a further opportunity to put things right, they will be able to do so.

176. The first thing to say is that I do not think that there are any problems of standing now remaining, even though the amendments raising equitable claims have been disallowed. The second, much more serious problem is the lack of specificity of attribution of unfairly prejudicial conduct amongst the active respondents. Since the petitioners have had three years to think about this, I have some doubts about the likelihood of greater specificity in attributing conduct to one or more of the active respondents than there has been up to date.

177. Moreover, the overriding objective ( of enabling the court to deal with cases justly and at proportionate cost ) set out in CPR Part 1 requires the court to take account of a number of matters, including allotting to a particular case an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases. Here these petitioners have had more than their fair share of judicial resources in the last three years, with numerous hearings (and judgments to write), meaning that other litigants have to wait longer for their cases to be heard.

178. Nevertheless, I do not think I should drive the petitioners from the judgment seat until they have had a final opportunity to put right the problems of specificity of attribution now identified in this judgment. I think I ought at least to give the petitioners a brief opportunity to redraft the petition with that greater specificity. Conclusion

179. Accordingly, I will make an order refusing permission to amend the petition, unless by 4 pm on Friday 26 September 2025 a further draft petition is filed and served sufficiently attributing the conduct alleged in the “lack of specificity” section to be unfairly prejudicial to the petitioners’ interests to one or more in particular of the active respondents. There must be sufficient specificity for the active respondents to be able to plead to the petition. Alleging that a particular act or omission is to be attributed to “A and/or B and/or C and/or D and/ or E” will simply not do.

180. If such a draft petition be so served (taking account of the other draft allegations which I have indicated that I would not permit), then I will consider on paper whether the draft petition should be allowed (including the joinder of In-Touch), taking into account any written submissions on it filed and served by the respondents by 4 pm on 3 October 2025, and any reply submissions filed and served by the petitioners by 4 pm on 10 October 2025. I should be grateful for a minute of order, preferably agreed, to give effect to this judgment.