Adam Farnsworth v Kevin Chave & Ors

1. This is the hearing of a preliminary issue ordered by Deputy Insolvency & Companies Court Judge Lambert on 12.2.2025 as to whether the Second and Third Respondents should continue at Respondents to an Unfair Prejudice Petition. They wish to be released; the Petitioner wishes for them to remain.

2. I reserved judgment as I consider the issue to be important for the Petitioner and the Second and Third Respondents and it should not be rushed. In particular, it is an exercise of discretion and therefore careful thought must be given to the appropriate factors involved and the proper exercise of that discretion.

3. I heard from Mr Martin Young for the Petitioner and Mr James Hannant for the Second and Third Respondents. The First and Fourth Respondents did not attend and were not represented.

4. Each Counsel provided a helpful, succinct skeleton argument and a joint bundle of authorities. Submissions were made carefully and precisely and I am grateful to each of them for their assistance in what has proved to be a tricky and slightly unusual procedural issue.

5. In this judgment I propose to refer to the natural parties by their first names as, given the slightly complex procedural nature of this Petition and its associated Petition [CR-2024-000517], some of the parties are involved in both Petitions. For clarity the parties are: a. Mr Adam Farnsworth [“Adam”] who is the First Respondent to the First Petition [“First Petition” - CR-2024-000517] and the Petitioner in the Cross-Petition [CR-2024-004284], which is the Petition with which I am concerned [“the Cross-Petition”]. He is a shareholder and Director of Essex and East London Van Services Limited [“the Company”] which is the Third Respondent to the First Petition and Fourth Respondent to the Cross-Petition; b. Mr Kevin Chave [“Kevin”] is the Petitioner in the First Petition, also an Unfair Prejudice Petition, and First Respondent to the Cross Petition. He is a shareholder and Director of the Company. He was formerly the shareholder and Director of the Third Respondent to the Cross-Petition, Kent Van Solutions Limited (“Kent Vans”), ceasing any formal involvement in or about 18.5.2023.; c. Mr Aaron Chave [“Aaron”] is the Second Respondent to the Cross-Petition. He is Kevin’s son. Aaron formerly worked for the Company as a fitter. He commenced employment on 15.9.2014 and resigned on or about 2.5.2023. From 18.5.2025 he became a shareholder and Director of Kent Vans which has a business in competition with the Company; d. Kent Vans is the Third Respondent to the Cross-Petition. It was incorporated many years ago, but was dormant from around 2013 until sometime after 18.5.2023. Background

6. Kevin and Adam are joint equal shareholders of the active shares in the Company and are the only two directors. It is agreed that the Company is a quasi-partnership. Aaron joined as a fitter in 2014 and by 2.5.2023, when he resigned, is said by Adam to have been a senior fitter/Supervisor.

7. Prior to joining Adam in the Company, Kevin had operated Kent Vans, then called “Car-Extras Limited”. He was the holder of all the issued share capital. After Aaron resigned on 2.5.2023, Kevin transferred the whole of the shareholding to Aaron [25%] and two other members of the family. Kevin stood down as Director and Aaron became the Director. Aaron commenced trading.

8. Adam says that Aaron was in breach of restraint of trade provisions of his employment contract. Adam does not plead that Aaron was directly involved in conducting the affairs of the Company, nor that he had any indirect influence on the affairs. It is said that Kevin conspired to cause damage to the Company with Aaron and (unnamed) others by entering into the arrangements for Kent Vans to be revived, renamed and transferred to Aaron and the family, that (effectively) Aaron accepted Kevin as a guarantor, accepted confidential information from the Company and accepted third party installation contracts from the Company (when it could not complete them).

9. The only remedy sought against Aaron and Kent Vans is an authorisation to bring a claim in the name of the Company against Kevin, Aaron and Kent Vans arising from the actions I describe above.

10. As regards the First Petition and the mutual allegations of unfair prejudice in the Cross-Petition by Kevin, there is a surprising amount of agreement. Both Petitions seek orders that Adam should buy out Kevin’s shares. There is a disagreement as to when the valuation should take effect and what the value of the shares should be, these issues turning on whether the Court finds there has been unfairly prejudicial behaviour by Adam, Kevin or both. Should it do so, Adam will end up with full control of the Company. Should there be a finding that neither has behaved unfairly to the other, the Court will have no jurisdiction to make any orders. The Law

11. For the purposes of this hearing, I proceed on the basis that the facts in the Cross-Petition are correct, although I have seen the Points of Defence of Aaron and Kent Van.

12. I bear in mind that the Cross-Petition is brought under s994(1) (a) & s996(2) (c) Companies Act 2006 , in particular that s994(1) (a) states: 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 same some part its members (including at least himself), or

13. Although no application was brought by Aaron and/or Kent Vans, this being designated as a preliminary issue, it is common ground that I should have regard to CPR 19.2, the adding and removal of parties. CPR 19.2(3) allows the court to “ order any person to cease to be a party if it is not desirable for the person to be a party to the proceedings .” There is no specific notation for that section and I have been taken to CPR 19.2(2)(a), adding a party to resolve issues in dispute, and CPR 19.2(2)(b), adding a party to resolve connected issues.

14. It is also common ground that this is a discretionary power, subject to the usual requirements for its exercise. Mr Hannant urges upon me the over-riding objective, following the case of Tendring District Council v AB and others [2024] EWCA Civ 1248 , a rare authority on removal of a party under 19.2(3): “The assessment of desirability should be made in the light of the overriding objective of enabling the court to deal with cases justly and at proportionate cost.”

15. My attention was drawn to Re Pedersen (Thameside) Ltd - Mewslade Holdings Ltd v Gourgey [2017] EWHC 3406 (Ch) ; [2018] BCC 58 . In that case a deceased shareholder was named in an unfair prejudice petition in which no allegations were made that he was involved in the unfairly prejudicial conduct. In addition, there was no allegation that he had knowingly received or assisted in relation to the alleged misconduct, or was the recipient of the business opportunity allegedly transferred. It was not alleged that the deceased was directly or indirectly involved in conducting the affairs of the company. HHJ Pelling, sitting as a High Court Judge, helpful set out the principles at paragraph 9: “ Against that background I turn to the applicable principles. It is common ground that for the purpose of this application all the factual allegations made in the petition must be presumed to be made out and proceed on that basis. This is all the more the case where, as here, the respondents’ defence has been struck out. The core principle on which Mr Lightman relies is that stated by Peter Gibson LJ in Re Legal Costs Negotiators Ltd [1999] B.C.C. 547 at 551 where he said this: “The court on an application to strike out a s.459 petition can look at the realities of the case. It is entitled to take the pragmatic view that the petition should not be allowed to proceed where the likelihood of the trial judge exercising his discretion to grant the claimed relief is so remote that the case can be described as perfectly hopeless (see Supreme Travels Ltd v Little Olympian Each-Ways Ltd [1994] BCC 947 at pp. 955 and 957 per Lindsay J and Re Oriental Gas Co Ltd [1999] BCC 237 at p. 245H where Ferris J adopted what Lindsay J said, describing the test as being whether it is plain and obvious that the relief claimed would never be granted).”

10. In advancing an unfair prejudice claim and in considering applications of the sort I am now considering it is necessary to remember that the jurisdiction under s.994 and the relief that may be granted under s.996 if a claim is successful is a wide one. There is no qualification on the classes of person against whom a claim under s.994 can be brought or against whom an order under s.996 can be made.”

16. He also stated this: “11. However, where a claim under s.994 is brought it is necessary for the petitioner both to plead and prove that the respondent was concerned either directly or indirectly in conducting the affairs of the company in an unfairly prejudicial manner.”

17. In Re Pablo Star [2017] EWCA Civ 1768 relates to the attempt of the Welsh Ministers to become parties to a restoration claim under CRP 19.2. Their application was refused and on appeal this refusal was upheld.

18. Sir Terence Etherton, MR, had this to say on the principle: “In considering whether or not it is desirable to add a new party pursuant to CPR 19.2(2), two lodestars are the policy objective of enabling parties to be heard if their rights may be affected by a decision in the case and the overriding objective in CPR 1. There are important practical considerations for strictly limiting the circumstances in which third parties are joined to applications to restore a company to the register.

19. Whilst this case is limited in scope, Mr Hannant points to the facts in that case which were that the issue with which the Welsh Ministers were concerned would not be affected by the restoration: they would be in exactly the same position. He says that that, given that the only remedy sought against Aaron and Kent Vans is permission for the Company to bring a claim, neither the Company nor Aaron/Kent Vans will be in any different position irrespective of the outcome of the Cross-Petition because Adam is likely to end up as sole Director/majority shareholder (this being the result both Kevin and Adam content for).

20. Mr Young, on this point, says that if the allegations against Aaron in respect of breaches of his contract of employment and the use of Kent Vans as a vehicle for Kevin’s. unfairly prejudicial conduct are made out, this will result in the proposed Part 7 claims for which permission is sought, having been effectively dealt with as there will have been a determination on the issues and, therefore, issue estoppel. He also urges on me that it would be unfair to Aaron and Kent Vans if they were not parties, given the serious allegations of conspiracy.

21. In Re Little Olympian Each-Ways Ltd [1994] 2 BCLC 420 , referred to above, makes the point that the wide jurisdiction of s459 & 461 (as they then were) is not to be cut down. There is helpful reference to previous decisions and I draw from it that there is an important point to be considered in terms of relief. There is no doubt that relief can be sought against a non-member, or someone against whom relief can be granted, but it is also the case that it can be right to strike-out a petition, even against those whose acts complained of, so long as no relief is sought against such a person. It would be abusive if the likelihood of relief against a party were so remote as to be perfectly hopeless, and therefore abusive to require that party to remain as such. “ However, it is also to be borne in mind that it is plainly abusive to press a person into hopeless litigation, litigation which cannot succeed. Quite apart from other vexation inherent in litigation, even a party who recovers an order for his costs against a solvent party on an indemnity basis may well be left substantially out of pocket at the end of a s 459 petition, a type of proceeding known neither for its speed nor its economy .” Submissions Mr Hannant's Submissions For The 2nd And 3rd Respondents

22. Mr Hannant submitted that the inclusion of the 2nd and 3rd Respondents is "deeply cynical" with no legitimate purpose but several improper collateral objectives. Their joinder, he argued, constitutes an abuse of process that should not be countenanced by the Court.

23. The fundamental difficulty with their joinder, Mr Hannant submitted, is that no relief is actually sought against them. The only relief that mentions them is Prayer 3, which seeks authorization under s.996(2) (c) to bring civil proceedings in the company's name. However, this is a matter for the company, not Aaron or Kent Van. Neither Aaron nor Kent Vans has any entitlement to interfere in how the company conducts proceedings. Most significantly, no direct relief is sought from either of them. Not Involved in Conduct of the Company's Affairs

24. Neither the 2nd nor 3rd Respondent is involved in the "conduct of the company's affairs" as required by s.994 . Aaron was merely a senior fitter – " not managerial or directorial, not involved in conduct of affairs ”. Kent Van is a separate company, not conducting the Company's affairs at all.

25. It is clear that all the conduct alleged is Kevin's conduct. Paragraphs 27.2 to 27.6 and paragraph 28 make this plain: Kevin used Kent Vans’ name to compete; Kevin caused various actions; Kevin froze the bank account. Moreover, Aaron had already left the Company by the time the alleged conduct occurred, making it impossible for him to have been involved in the conduct of the Company's affairs during the relevant period. No Allegation of Unfairly Prejudicial Conduct

26. There is no heading or allegation of unfairly prejudicial conduct made against Aaron or Kent Van in the cross-petition. The only allegations against Aaron concern breach of restrictive covenants – a purely contractual matter. This is an argument which will play out before the courts in Part 7 proceedings that may follow these proceedings. The pleaded case is that the covenants are not enforceable (being a copy-paste document and too restrictive) and have not been breached, but take the Cross-Petition as drafted.

27. He also says that the relief sought under s996 is otiose. Adam will gain control of the company. Kevin has agreed that Adam will purchase his shares – the only dispute concerns the valuation date and quantum. Once Adam has control, he can immediately cause the company to initiate proceedings against Aaron and Kent Vans without any need for authorisation from the Court. The authorisation is therefore unnecessary and irrelevant. Improper Collateral Purposes

28. Mr Hannant goes on to say that there are four indirect benefits to Adam from joining Aaron and Kent Van, demonstrating that the joinder is abusive and amounts to an abuse of process.

29. First, there is the exhaustion of resources. The inclusive figure for Aaron and Kent Vans budgeted costs is £157,000. In the context of these individuals, that is a substantial amount of money. Even if they prevail and obtain a costs order, it is unlikely they will be fully compensated. This exhausts their resources before the putatative main event of the Part 7 proceedings.

30. Second, the inclusion drives a wedge between Aaron and his father Kevin – an improper collateral purpose. I pause now to say that I place no weight on this assertion.

31. Third, and most significantly, Adam is seeking to achieve third-party disclosure by the back door. CPR 31.17(4)(a) provides that third-party disclosure must specify documents or classes of documents. What Adam is seeking here is not disclosure by document but issues-based disclosure which is broader and more expensive. If third party disclosure to be made it must be via a proper application. No such application has been made under CPR 31.17.

32. It is the case that no such application could be made whilst Aaron and Kent Van are parties so, again, I take only a periphal note of this point.

33. Fourth, the joinder has the effect of throwing disclosure costs onto Aaron and Kent Van. CPR 46.1(2)(b) provides as a general rule that the person who seeks third party disclosure pays the costs of compliance. The effect of joining is that costs of disclosure are thrown onto Aaron and Kent Van when they should be borne by Adam. Additionally, both are burdened with the time costs of dealing with the litigation. These do not weigh greatly on me as this is an inevitable consequence of being a proper party. They not make a proper party an improper party.

34. Mr Hannant submitted that the legal principles support removal of Aaron and Kent Van. He pointed to In Re Pablo Star Ltd, noting that relevant factors for determining desirability are (i) whether they are or may be affected by the outcome and (ii) the positions of the parties as to whether they want them to continue as parties. Here, Aaron and Kent Van do not want to remain; only Adam wants them to stay.

35. He relies on Re Little Olympian as providing powerful support for removal, in particular because no actual remedy or proper relief is sought against Aaron or Kent Van. Permission to bring a claim is both otiose and free standing. As regards the main claim, they are neutral as this is a matter between Adam and Kevin and will not be affected by the outcome, save for findings of fact against them.

36. Re Pederson provides further support, says Mr Hannant. The Court stated the principle: " However, where a claim under ." The pleadings do not satisfy this test. s.994 is brought it is necessary for the petitioner both to plead and prove that the respondent was concerned either directly or indirectly in conducting the affairs of the company in an unfairly prejudicial manner

37. Mr Hannant submitted that when one stands back and looks at the real dispute, it becomes clear that it does not touch upon Aaron or Kent Van at all. The dispute is between Adam and Kevin. Kevin and Adam have agreed on the outcome – that Adam will purchase Kevin's shares. The only dispute concerns valuation. The dispute is about "date of valuation and quantum" – matters on which Aaron and Kent Van have to be parties with little to add and nothing to say.

38. Mr Hannant concluded by saying that Aaron and Kent Van are "wholly inappropriate" as parties to this petition and the Court should exercise its discretion to order that they cease to be parties. Mr Young's Submissions For The Petitioner

39. Mr Young says that Aaron and Kent Van Solutions should remain as parties to give the full balancing picture and to ensure proper resolution of the factual dispute. Their involvement is essential for a fair trial of the issues between Adam and Kevin. The Authorities Do Not Address the Central Issue

40. He reminds me that this is a discretionary exercise informed by the facts. The authorities cited by Mr Hannant, such as Little Olympian and Re Pablo Star , are not concerned with the central issue of why Aaron and Kent Van are joined in these proceedings. Those cases focus primarily on the question of relief, whereas this case raises fundamental considerations about who was responsible for the breakdown of the relationship and the valuation consequences.

41. I note that, in reality, responsibility for the breakdown falls on Kevin and/or Adam. Aaron and Kent Vans can only be a supporting act given the timings and the asserted roles. Aaron and Kent Vans Are Central to Determining Unfair Prejudice and Valuation

42. The central dispute is: who was responsible for the breakdown of relations between Adam and Kevin? Mr Young says that on Adam's case, Kevin effected a “team move” with Aaron, taking everything needed to set up in competition with the Company. On Kevin's case, Adam responded unfairly to discovering this by seeking to exclude Kevin. I’m not sure this is quite right. On Kevin’s case Adam was unreasonable when Aaron decided to go his own way because he felt undervalued.

43. Mr Young says that the factual determination is crucial for two distinct purposes. First, it is important that there is a “proper trial” as to which of Kevin or Adam was responsible for breakdown of relations and to determine whether there had been unfair prejudice against Adam in conspiracy. Second, the valuation issue is contentious precisely because the valuation date advanced by Adam is predicated on basis that Kevin effected a team move taking with them all they needed to set up in competition, involving breaches of not only directors duties but also Aaron’s duties as an employee with some seniority. As Little Olympian itself recognises, valuation depends as to who was culpable for the breakdown in relations. Aaron Was "Concerned Indirectly" in Conduct of Affairs

44. Aaron rose to Senior Fitter/Supervisor capacity in July 2021, and the express terms of his employment are contentious. Significantly, Aaron requested a further pay rise in 2023 which was not given, this being the trigger for what followed. The allegations in paragraphs 24 to 34 show his central involvement: in April and May 2023, Kent Van started trading again, with Aaron as a director; Kevin procured transfers of shares to Aaron, Luke, Jan and others as all part of the conspiracy; and Kent Van involves business by conducted by Aaron which interfered with the Company’s business.

45. Aaron was instrumental as a senior fitter with knowledge of customer base who played a key role in transferring business from the Company in breach of express terms of his employment, doing so in a way which caused Kevin to commit unfair prejudice. The specific customer losses at paragraph 34 support the allegation of conspiracy and Kent Vans is the business through which the competition was carried on and which received profits from the diverted business. A Party can be joined simply for that reason.

46. If Aaron is a party to these proceedings, there will be binding findings of fact, meaning any subsequent Part 7 proceedings will not be on the same basis but will be predicated on these findings. If they are removed as parties, Adam as director for the Company will then have to go through personally and decide whether to bring Part 7 proceedings, with all the evidence given again. Resolution now means allegations in these proceedings are likely to be less expensive in the long run and will certainly be more expedient."

47. Serious allegations are made against Aaron in the petition. The allegations will be made whether parties or not as they are already in the petition. It is better that they can defend and have their names cleared at earliest opportunity rather than wait for Part 7 down the road. If findings are made with them as parties, they can benefit from those findings; otherwise, Aaron can be a witness, can be called by Kevin, inference to be drawn without the protection of having been a party. It Is Not Certain Adam Will End Up in Control

48. Mr Young challenged the premise that it is inevitable Adam will gain control. There are two possible outcomes depending on contested factual issues. On one view, they fell out because of a team move inflicted by Kevin and son. On Kevin's case, Adam responded unfairly but Mr Young says did so because he could see value and business of company disappearing, especially after the bank account was shut down. It is not inevitable that Adam will end up in control. The relief sought against Aaron and Kent Vans serves a real purpose until the factual issues are determined. The Desirability Test Supports Retaining Them

49. Under CPR 19.2, the key factors support retention. Aaron and Kent Van are affected by the outcome – they are facing a Part 7 claim if removed.

50. I pause here to comment that I do not consider this to be a real factor. It is circular. The only relief claimed against Aaron and Kent Vans is permission to bring the Part 7 claim. To say they should be retained to prevent a Part 7 claim being made (because all the issues will be decided and the parties bound) renders the relief sought otiose.

51. Mr Young said that dealing justly with the case requires that serious allegations be properly heard and tried rather than having parties named but not able to defend. Proportionate costs are best served by avoiding duplicate proceedings. Under the overriding objective, it is up to them whether they chose to appear, they are instrumental to the factual issues.

52. As to third-party disclosure, Aaron and Kent Van are closely involved where misconduct is alleged, so this is not a ploy to avoid the usual rule. The exhaustion of resources means it is preferable to resolve issues now, avoiding Aaron having to go through a trial at a later stage, when the same factual issues must be determined in any event.

53. Mr Young presses upon me that the desirability test is strongly in favour of retaining Aaron and Kent Vans. They will be affected by the outcome by reason of the Part 7 claim which will come down the line if the Court orders the purchase of Kevin’s shares (as seems likely). The findings of the Court in this claim will be binding on the parties and therefore the Part 7 claim will not be controversial, that removing them will be unfair to Kevin, Aaron and Kent Vans as well as Adam.

54. He says that this will deal justly with the case as the allegations of conspiracy against Aaron will be dealt with. It will, at the end of the day, avoid duplication of proceedings. To the suggestion that their inclusion is an attempt to obtain disclosure that could not be obtained by way of a Third Party Disclosure application, he says this is fundamentally wrong: they are essential parties to the claim. Conclusions

55. I remind myself that my decision must be based on the desirability of Aaron and/or Kent Vans being parties. This is not based on their desires, although this may be a factor, but upon whether they are important to the claims, are affected by the claims and what relief is sought as against them. There is a difference between someone who may be an essential witness and someone who should be a party.

56. As the Court of Appeal made clear in Tendring District Council v AB , the assessment of desirability should be made in the light of the overriding objective. I must also bear in mind the warning in Re Little Olympian that it is plainly abusive to press a person into hopeless litigation, particularly given that section 994 petitions are proceedings known neither for their speed nor their economy, as well as the competing principle that a s994 petition can cast its net very widely in the right circumstances. I would draw from this that it would also be wrong to draw someone into litigation when no substantive remedy is sought against them.

57. Mr Young advanced his case with considerable skill, submitting that Aaron was instrumental in a conspiracy with Kevin and that Kent Van Solutions was the vehicle through which this conspiracy was effected. However, when I examine the pleaded case rather than the oral submissions, the position is considerably less clear. The Cross-Petition does not allege that Aaron was directly involved in conducting the affairs of the Company. What is pleaded is that Kevin conspired with Aaron and others, and that various actions were taken by Kevin . The focus of the pleaded unfairly prejudicial conduct is firmly on Kevin's actions. The conduct of the Company's affairs is attributed to Kevin.

58. Aaron was a senior fitter who left the Company's employment on 2 May 2023. The conduct complained of occurred after that date. The allegations against Aaron personally are that he breached restrictive covenants in his employment contract – a purely contractual matter between Aaron and the Company, not unfair prejudice to Adam as a member.

59. The central problem for Mr Young is that no meaningful relief is sought against Aaron or Kent Vans in these proceedings. All that is sought is authorisation under section 996(2) (c) to bring civil proceedings in the Company's name. This is not relief in a s994 petition, but is authorisation to sue in separate proceedings, akin to the permission required for a derivative claim but without the protections in place for such a claim. The claim is made on behalf of the Company. It is also said that if the critical questions are decided in the s994 proceedings, a claim under Part 7 will not be necessary. In effect the snake swallows its own tail.

60. The critical question is whether the claim for authorisation is sufficiently substantial to justify their inclusion as parties to a lengthy and expensive petition for matters in which no remedy is sought against them. In my judgment, it is not.

61. First, the authorisation sought is likely to be otiose . Both petitions seek orders that Adam should purchase Kevin's shares. If Adam succeeds, he will gain control of the Company and can immediately cause the Company to commence Part 7 proceedings without any authorisation from this Court. If Kevin prevails, Adam still gains control of the Company. On either outcome, the claim under s996 serves no real purpose.

62. Second, and more fundamentally, Mr Young's central argument is not really about s996 at all. It is so that Aaron and Kent Van should remain as parties for binding findings of fact to be made on the conspiracy allegations, which will then either obviate the need for Part 7 proceedings or make them uncontroversial. This transforms the nature of the relief being sought . What is nominally authorisation to bring proceedings becomes, in reality, a determination of those proceedings. If that is correct, then the substantive relief being sought is not authorisation at all, it is judgment on causes of action that are wholly distinct from the unfair prejudice claim.

63. This comes dangerously close to an abuse of process. Adam would be obtaining, through an unfair prejudice petition, a determination of claims that properly belong in Part 7 proceedings, whilst avoiding the procedural requirements that would apply to such claims. As Mr Hannant submits, this approach is repugnant to the rule in Foss v Harbottle, given that those claims undoubtedly are claims of the Company, not of Adam.

64. The gap between what is pleaded and what Mr Young's submissions seek to achieve is significant. The pleaded relief is authorisation, but the practical effect sought is a full determination of corporate claims, with the side-effect that if comprehensive findings are made, the Part 7 proceedings may never need to be brought. This is not a proper use of the unfair prejudice jurisdiction.

65. As HHJ Pelling stated in Re Pederson , where a claim under s.994 is brought it is necessary for the petitioner both to plead and prove that the respondent was concerned either directly or indirectly in conducting the affairs of the company in an unfairly prejudicial manner. Aaron was not involved in conducting the Company's affairs at all. The pleaded case makes clear that all the relevant actions were Kevin's actions. Aaron is alleged to have conspired with Kevin, but conspiracy by a former employee is not the same as conducting the affairs of the company in an unfairly prejudicial manner even if the pleadings particularised this in relation to Aaron or Kent Vans, which they do not.

66. The real dispute in this petition is between Adam and Kevin about the conduct of the Company's affairs and the consequences for valuation. Aaron and Kent Van are part of the factual matrix but no more than that.

67. Aaron and Kent Van have budgeted costs of £157,000. They are being required to participate in and fund what amounts to a trial of corporate claims against them, dressed up as a petition about unfair prejudice to a shareholder. There is a real risk that the Part 7 proceedings will quietly be dropped.

68. Having considered the submissions carefully and the authorities to which I have been taken, I have concluded that it is not desirable that Aaron and Kent Van Solutions should remain as parties to this Cross-Petition. The relief nominally sought – authorisation under section 996(2) (c) – is insufficient to bear the weight of their inclusion. There is no relief sought against them in the s994 claim.

69. Aaron can give evidence as a witness; documents can be obtained through proper third-party disclosure if required; and if, after findings are made, Adam wishes the Company to pursue claims, he can do so through Part 7 proceedings in the proper manner.

70. I therefore order that Aaron Chave and Kent Van Solutions Limited shall cease to be parties to the Cross-Petition.

71. This judgment having been handed down remotely for the purposes of speed, given that there is a trial date in the next five months or so, and disclosure remains an issue as does expert evidence, I extend time for permission to appeal this judgment to 21 days after the consequentials hearing, which will be listed for a remote hearing on a date after 2.11.2025 which is convenient to all parties at which the issue of costs will be dealt with, if not agreed. The parties are invited to lodge written submissions on costs three clear days before the hearing if they cannot be agreed.