Richard Stanley Morgan v Nigel James Morgan & Ors

INTRODUCTION

1. This is my judgment on the trial of a petition under section 994 of the Companies Act 2006 , presented on 13 March 2024, alleging that the first to fifth respondents (whom I shall call “ the Act ive Respondents”) have been guilty of unfairly prejudicial conduct against the petitioner in relation to the affairs of the sixth and seventh respondents (“SMS” or “Company A”, and “SMSL” or “Company B” respectively, and both together “the Companies”). I make clear that SMSL is a company incorporated in July 2018. There was an earlier company with the same name, incorporated in 2002, but dissolved in April 2017. Where necessary, I will refer to this earlier company as “OldCo”. In addition to the allegations in the petition, the fourth respondent has brought a counterclaim against the petitioner and his wife, who has been joined as a third party.

2. The matter was tried before me on eight days in June 2025. Each side was represented by solicitors and counsel (James Pearce-Smith for the petitioner and third party, and Joseph Wigley for the Act ive Respondents). Details of the witnesses who gave evidence are set out later. This was followed by full written closing submissions (32 pages for the petitioner and third party, and 94 pages for the Act ive Respondents). Finally, there was a further oral hearing (by Teams) to deal with matters arising from those submissions. Unfortunately, because of difficulties in arranging a date convenient to all parties, that further oral hearing did not take place until late October 2025. I was then very busy in dealing with other urgent work, which has slowed down the preparation of this judgment. In addition there was a further delay quite recently, as a result of a sudden domestic medical crisis. I am sorry for this delay in resolving the matter.

3. Apart from the two companies the conduct of whose affairs are in question, all the parties (and many of the witnesses) are members of the same extended family, whether by birth or by marriage, and they share a common surname, that is, Morgan. I will accordingly refer to them all by their given names, without intending any disrespect. Richard (the petitioner), Nigel (the first respondent), and Colin (the second respondent) are brothers. A fourth brother, David, unfortunately died in 2014. (There was a fifth brother, Derek, who died in 2024, but he is not concerned in this story beyond its earliest stages.) Gareth (the third respondent) is one of Colin’s children. Colin’s wife Angela sadly died in 2015. Jane (the fourth respondent) is David’s widow, and Leigh (the fifth respondent) is one of David’s and Jane’s children. Robert, who also plays a part in the story, is the son of Nigel and his wife Lynn. Richard is married to Julie, and has two daughters, Katie and Kellie, and five grandchildren. The shares in the sixth respondent (SMS) are held by Richard (25%), Nigel (25%), Gareth (25%), Jane (12.5%), and Leigh (12.5%). The shares in the seventh respondent (SMSL) are held by Richard (25%), Nigel (25%), Colin (25%) and Jane (25%). The directors of the sixth respondent are Nigel and Colin. The directors of the seventh respondent are Nigel and Gareth. Richard was also a director of each company, but (as will be seen) he was removed in October 2023. Summary of claims made

4. I will set out more details of the parties’ positions in this litigation later, but for now the following summary will suffice. Richard claims that that the Act ive Respondents have excluded him from participation in the management of the Companies, first by seeking to engineer his resignation as a director, and then by causing the Companies formally to terminate his directorships, having also terminated his and his wife Julie’s employments. Since the Companies have never paid dividends, the only benefits that shareholders have received is the receipt of wages and various other valuable benefits (discussed further below), all of which has now ceased in relation to Richard.

5. Richard also says that there was no obligation on him (or any other member of the family) to contribute equally to the business through labour and financial support. Nevertheless, in the period 2018 to 2022 he and Julie made loans to SMS at the company’s request on multiple occasions, totalling at least £1,863,860. There are three important matters in dispute in relation to these loans. The first is whether they were loans at all. The second relates to the terms on which the loans (if that is what they were) were to be repaid. The third relates to payments made to or expenditure for the benefit of Richard and Julie, and the extent to which such payments or expenditure amount to partial repayment of such loans (if that is what they were). The petition seeks an order (at [71] and prayer 1) that the Act ive Respondents purchase Richard’s shares from him at fair value, (at [73] and prayer 2.3.1) that SMS repay the loans made by Richard and Julie, and (at [73] and prayer 2.3.2) that SMS procure the release of Richard from any liability under personal guarantees of debts of SMS.

6. The Act ive Respondents reject all the allegations of unfair prejudice and deny that Richard is entitled to any relief. First, from at least April 2023 Richard had repeatedly communicated his desire to leave the business for personal reasons. Secondly, Richard had refused to contribute to the family business and the Companies, by way of his labour from at least July 2023, and by way of his share of funding from at least September 2023. Thus, Richard sought to exclude himself from the business of the Companies, and in so acting justified his removal. Over and above that, the Act ive Respondents say that the Companies are worth very little.

7. Lastly, Jane makes a counterclaim against Richard and Julie, either for £833,232.50 in debt or damages for breach of an agreement to share any compensation received in respect of a substantial fraud (discussed below), or for £236,500 by way of a claim in unjust enrichment against them. As to the counterclaim, Richard and Julie say that this is a tactical contrivance, designed to counterbalance Richard’s claim that the loans from himself and Julie are repayable on demand and must be taken into account in any relief granted under the main claim. They say that there was no such agreement. Procedure

8. A letter before claim was sent on 13 October 2023 by Richard’s solicitors to each of Nigel, Colin, Robert, Gareth and Leigh, in their capacities as directors of one or other or both of the Companies. The petition in this case was presented on 13 March 2024. I gave standard directions intended to lead to a case management conference on 31 May 2024. In fact, it was relisted for 8 July 2024, when I gave further directions through to trial. Costs budgets were finally approved on 1 August 2024. There was a disclosure guidance hearing before HHJ Monty KC on 20 September 2024. On 15 April 2025, by consent, I gave permission for the fourth respondent Jane to bring a counterclaim against the petitioner Richard and his wife Julie, and gave further directions. The current Amended Defence and Counterclaim is dated 16 April 2025. The Amended Reply and Defence to Counterclaim is dated 25 April 2025. The Reply to Defence to Counterclaim is dated 8 May 2025.

9. On 16 May 2025, Richard applied for an order to permit him to rely on “Supplementary Particulars of Unfair Prejudice”, dated 14 May 2023. Richard served a draft amended petition on 22 May 2025, incorporating these supplemental particulars, and sought to amend his case. On 27 May 2025, I dismissed that application, both in relation to permitting Richard to rely on the supplemental particulars and in relation to amending the petition. HOW CIVIL JUDGES DECIDE CASES General

10. For the benefit of the lay parties concerned in this case I will say something about how English judges decide civil cases like this one. I borrow the following words largely from other judgments of mine in which I have made similar comments. First of all, judges are human. They do not possess supernatural powers that enable them to divine when someone is mistaken, or not telling the truth. Instead, they take note of the witnesses giving live evidence before them, look carefully at all the material presented (witness statements and all the other documents), listen to the arguments made to them, and then make up their minds. The point is that there are a number of important procedural rules which govern the decision-making of judges, and which are not as well-known as they might be. I shall briefly mention some of them here, because non-lawyer readers of this judgment may not be aware of them. Burden of proof

11. The first is the question of the burden of proof. Where there is an issue in dispute between the parties in a civil case (like this one), one party or the other will bear the burden of proving it. In general, the person who asserts something bears the burden of proving it. Here the petitioner bears the burden of proving his case. In relation to the counterclaim the fourth respondent bears the burden of proving her case against the petitioner and the third party. The importance of the burden of proof is that, if the person who bears that burden satisfies the court, after considering the material that has been placed before the court, that something happened, then, for the purposes of deciding the case, it did happen. But if that person does not so satisfy the court, then for those purposes it did not happen. The decision is binary. Either something happened, or it did not, and there is no room for maybe . That may mean that, in some cases, the result depends on who has the burden of proof. Standard of proof

12. Secondly, the standard of proof in a civil case is very different from that in a criminal case. In a civil case like this, it is merely the balance of probabilities. This means that, if the judge considers that something in issue in the case is more likely to have happened than not , then for the purposes of the decision it did happen. If on the other hand the judge does not consider that that thing is more likely than not to have happened, then for the purposes of the decision it did not happen. It is not necessary for the court to go further than this. There is certainly no need for any scientific certainty, such as (say) medical or scientific experts might be used to. The role of judges

13. Thirdly, in our system, judges are not investigators. They do not go looking for evidence. Instead, they decide cases on the basis of the material and arguments put before them by the parties . They are umpires, or referees, and not detectives. So, it is the responsibility of each party to find and put before the court the evidence and other material which each wishes to adduce, and formulate their legal arguments, in order to convince the judge to find in that party’s favour. There are a few limited exceptions to this, but I need not deal with those here. The fallibility of memory

14. Fourthly, more is understood today than previously about the fallibility of memory. In commercial cases, at least, where there are many documents available, and witnesses give evidence as to what happened based on their memories, which may be faulty, civil judges nowadays often prefer to rely on the documents in the case, as being more objective: see Gestmin SGPS SPA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) , [22], restated recently in Kinled Investments Ltd v Zopa Group Ltd [2022] EWHC 1194 (Comm) , [131]-[134]. As the judge said in that case, “a trial judge should test a witness's assertions against the contemporaneous documents and probabilities and, when weighing all the evidence, should give real weight to those documents and probabilities”.

15. In the present case, there are a number of useful documents available. This is important in particular where, as here, the relevant facts have occurred over a number of years, and time has elapsed since they took place. These messages enable dates and times of various events to be fixed with accuracy.

16. In deciding the facts of this case, I have therefore had regard to the more objective contents of the documents in the case. In addition to this, and as usual, in the present case I have heard witnesses (who made witness statements in advance) give oral evidence while they were subject to questioning. This process enables the court to reach a decision on questions such as who is telling the truth, who is trying to tell the truth but is mistaken, and (in an appropriate case) who is deliberately not telling the truth. I will therefore give appropriate weight to both the documentary evidence and the witness evidence, both oral and written, bearing in mind both the fallibility of memory and the relative objectivity of the documentary evidence available. Reasons for judgment

17. Fifthly , a court must give reasons for its decisions. That is what I am doing now. But judges are not obliged to deal in their judgments with every single point that is argued, or every piece of evidence tendered. This is particularly important in a case like the present, where there was a significant amount of documentation placed before the court, amounting to 3 lever arch files of core bundle and 29 lever arch files of trial bundle, including two supplemental files. In addition, the written submissions of the parties (for opening and closing) amounted to 187 pages (46 for the petitioner and third party, and 141 for the Act ive Respondents). Judges deal with the points which matter most. Put shortly, judgments do not explain all aspects of a judge’s reasoning, and are always capable of being better expressed. But they should at least express the main points, and enable the parties to see how and why the judge reached the decision given. Failure to call a witness or put in relevant evidence

18. Lastly, there is the question whether a party’s failure to call a relevant witness or put in relevant evidence which is available has any effect on a party’s case. The former question arose in Royal Mail Group Ltd v Efobi [2021] 1 WLR 3893 , SC. In his judgment, Lord Leggatt (with whom all the other members of the court agreed) said: “41. The question whether an adverse inference may be drawn from the absence of a witness is sometimes treated as a matter governed by legal criteria, for which the decision of the Court of Appeal in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 is often cited as authority. Without intending to disparage the sensible statements made in that case, I think there is a risk of making overly legal and technical what really is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules.”

19. But the principle goes further, in that there may be things or documents, for example, which are (or were) available to a party and would be, or contain, evidence relevant to an issue before the court, but are never produced to the court by that party. Thus, in Armory v Delamirie (1722) Str 505, the plaintiff was held entitled as against the defendant to a jewel that he had found, but the defendant refused to produce the jewel in order to be valued. The judge directed the jury “that unless the defendant did produce the jewel, and shew it not to be of the finest water, they should presume the strongest against him, and make the value of the best jewels the measure of their damages: which they accordingly did.”

20. Thus, if a party fails to disclose relevant documents in accordance with a disclosure obligation, the court may draw an appropriate inference against the party on the issue to which it was relevant. Steyn J applied the principle recently in the case of Vardy v Rooney , where an order was made for the inspection of the mobile telephone of the claimant’s witness, but the phone was allegedly “lost overboard” whilst on a boat trip a few days later. [2022] EWHC 2017 (QB) WITNESSES (FACT AND EXPERT) Witnesses of fact The petitioner

21. In the present case I heard from the following witnesses of fact for the petitioner and the third party: the petitioner himself, his wife Julie (the third party), their two daughters (Katie and Kellie), Timothy Wann (a potential investor), Lee Tizard (a building contractor, and Julie’s cousin), Andrew Mutch (former director of Mutchmeats Ltd), Sally Mutch (his wife), David Hackett (financial controller at Mutchmeats Ltd), and Susan Morgan (the petitioner’s sister). (A further witness, John Hughes, was not required for cross-examination by the first to fifth respondents. His written evidence was therefore not challenged.) The Act ive Respondents

22. I heard from the following witnesses of fact for the first to fifth respondents: Ian Hewitt (the companies’ accountant), Jane Morgan (the fourth respondent), Stephen Middleton (regulatory consultant, and financial administrator at SMS), Nigel Morgan (the first respondent), Robert Morgan (Nigel’s son), Lynn Morgan (Nigel’s wife), Gareth Morgan (Colin’s son), Leigh Morgan (David and Jane’s son), and Colin Morgan (Nigel’s and Richard’s brother). Expert witnesses

23. In addition to these witnesses of fact, I heard from an expert share valuation witness, Mark Shelton, for the petitioner. He was cross-examined on behalf of the first to fifth respondents. He was an impressive witness, businesslike and highly competent, who very properly confined himself to his own expertise. (On the other side, Gavin Pearson, the expert share valuation witness for the first to fifth respondents, was not required for cross-examination, and I did not hear from him, though of course I have read his report, and take it into account.) I also record that an expert property valuer, Adrian Cannon, was appointed as a single joint expert to value the properties, and he produced a report dated 28 March 2025. He thereafter responded to questions from Richard’s solicitors in a further report dated 11 April 2025. General comments The petitioner’s witnesses

24. Having heard and seen these witnesses give evidence, I make these general comments on the witnesses of fact. First, I deal with those on behalf of the petitioner. Richard, the petitioner, was a slow witness, who cannot read and write, was not good at details, and seemed slightly embittered. However, I judged him to be honest, and accept that he believed what he said. He was certainly not trying to mislead the court. His wife, Julie, was a clear and straightforward witness, who accepted correction and stood up for herself. I judged her to be both intelligent and honest. In particular, I accept her first-hand evidence where it conflicts with that on behalf of the Act ive Respondents. I add that it was she that operated their joint bank account, and dealt with correspondence and other documents for Richard. Their daughter Katie was a clear and truthful witness, who stood up for herself. Their daughter Kellie was a forthright, clear and truthful witness, who accepted correction.

25. Timothy Wann was a straightforward and businesslike witness. Lee Tizard was a fluent and impressionistic witness, with a tendency to ramble, but he was palpably honest. Andrew Mutch was a straightforward and businesslike, although slightly cautious, witness, who accepted correction, His wife Sally Mutch was a straightforward and truthful witness. David Hackett was a precise, clear and straightforward witness. The petitioner’s sister Susan was a clear and straightforward witness, whom I judged to be telling the truth. She had moved away from the farm many years ago, and her greater objectivity was clear. The Act ive Respondents’ witnesses

26. I turn now to consider the witnesses called on behalf of the Act ive Respondents. Ian Hewitt was a fluent and knowledgeable witness with a good memory. However, I was struck by his refusal on occasion to accept the obvious from the documents, when it was against his clients’ interests. I also considered that he had an unusual idea of professional duty. For example, in his capacity as accountant for Mutchmeats Ltd, he sent an email with attached draft board minutes to Nigel, who was one of the directors, but not to Andrew Mutch, who was the other director of the company. (He said this was because there were allegations against Mr Mutch.) The email referred to “beefing up” the minutes, which in context is a reference to putting that company’s situation in as bad a light as possible, so as to make it easier for Nigel to get rid of Mr Mutch. On another occasion he refused to accept that, where he as the company’s accountant was copied into an email attaching a document drafted by the company’s solicitor, he had any duty to say anything if he saw that the draft was factually wrong. He also attempted to give expert (legal) opinion evidence on the terms of repayment of the loans made to SMS, although he is not a lawyer.

27. The petitioner’s sister-in-law Jane was a weak and nonconfrontational witness. She seemed naïve and uncurious, and seemed not to know some of the basic elements of human resources. She took refuge in procedural rather than substantive issues, and minimised the dispute between different parts of the family. I am afraid that I cannot accept important parts of her evidence. Stephen Middleton was a weak and evasive witness, reluctant to say anything that might be construed as favouring the petitioner and his wife. I cannot place any reliance on his evidence where it is not corroborated by other objectively-sourced material.

28. The first respondent, Nigel, was a poor witness. I take into account his lack of good health, but I am afraid that he came across as a bully, who would stoop to using coarse and demeaning language in dealing with others. He is plainly the dominant personality in the respondents’ camp, although he denied it. Despite his further denial, I am quite satisfied that he called the shots in the Companies, and ensured that what he wanted to happen did happen. I accept that he is now physically much less strong then he used to be, but his forceful personality still shines through. Unfortunately, I cannot accept everything he says as truthful. In important respects, I think that he knew that what he was saying was not true. I can accept what he says only when it is corroborated by an objective source.

29. His brother, Colin, was a good-humoured witness, with a generally good memory for details, but including some examples of confusion and mixing up. He was not trying to mislead the court. But he was not at the centre of the decision-making, and I treat his evidence with some caution. Some of it, in my opinion, was simply mistaken. Nigel’s wife, Lynn, was (at least initially) a business-like witness, but her dislike of Julie was palpable, and I am afraid that it coloured her evidence. She was unable to explain some of her evidence by reference to the documents in the bundle, and was indeed constrained to admit in cross-examination that some of her written evidence was untrue. I think she also told me things which she knew were not true. I treat the remainder of her evidence with caution. Robert, Gareth and Leigh are three cousins, the sons of Nigel, Colin and Jane respectively. None of them was an important witness, in the sense of being able to contribute a great deal. All of them gave the impression that they had learned their evidence in advance, and were simply “toeing the line”, rather than trying to assist the court. I do not accept some parts of their evidence, and I cannot place much reliance on the rest. Employment proceedings Employment tribunal

30. There is an issue on the pleadings as to whether the brothers (and their wives) were employees of OldCo and then SMS. Richard asserts it (Petition, [48]), and the Act ive Respondents deny it (Amended Defence, [30]). As to this, there is a question about the evidential status of decisions made in other proceedings by the Employment Tribunal and the Employment Appeal Tribunal in relation to Richard and Julie. I will deal with that question at this stage, before I set out my findings of fact. On 12 December 2023, Richard and Julie issued claims for unfair dismissal by SMS (and other claims under relevant employment legislation) in the Employment Tribunal. A preliminary hearing was listed to determine whether they were “employees”, or alternatively “workers” (in either case, within the meaning of the Employment Rights Act 1996 , section 230 ). On 30 January 2025, EJ Skehan, sitting at Watford, handed down a reserved judgment holding the Richard and Julie were neither employees nor workers for this purpose. Employment Appeal Tribunal

31. Richard and Julie gave notice of appeal on 14 April 2025 against this decision to the Employment Appeal Tribunal. On 23 July 2025, that Tribunal handed down its decision that the notice of appeal disclosed no reasonable grounds for bringing the appeal, because an appeal to that Tribunal could be made only where there was an arguable error of law, and it would not normally re-examine issues of fact. In the present case, the Appeal Tribunal considered that there was no arguable error of law in the decision of the Employment Tribunal. As Lord Leggatt said on behalf of the Supreme Court, in Uber BV v Aslam [2021] ICR 657 , “118. It is firmly established that, where the relationship has to be determined by an investigation and evaluation of the factual circumstances in which the work is performed, the question of whether work is performed by an individual as an employee (or a worker in the extended sense) or as an independent contractor is to be regarded as a question of fact to be determined by the first level tribunal. Absent a misdirection of law, the tribunal’s finding on this question can only be impugned by an appellate court (or appeal tribunal) if it is shown that the tribunal could not reasonably have reached the conclusion under appeal … ” Admissibility of decisions in evidence

32. The question then arises as to the admissibility in evidence of the conclusions of the Employment Tribunal and the Employment Appeal Tribunal. In my judgment they are irrelevant and inadmissible in the present proceedings, by virtue of the rule known usually as the rule in Hollington v Hewthorn , from the case of the same name ( [1943] 1 KB 587 , CA). This rule was recently affirmed for English law by the Supreme Court in Evans v Barclays Bank plc [2025] UKSC 48 , [2026] Bus LR 328 . I reach my conclusion for two reasons. First of all, the parties to the two proceedings are different. In the employment proceedings, the issue (“employee or not”) arose as between Richard and Julie on the one hand, and SMS on the other. But in the present proceedings, there are no issues between Richard and Julie on the one hand, and SMS on the other. SMS is neutral, and has not pleaded to anything. Instead the issue now arises as between Richard and Julie on the one hand, and the Act ive Respondents on the other. So there are different parties involved. (This is also why there is no issue estoppel on the point.)

33. The second point is that, as Christopher Clarke LJ (with whom Arden and Treacy LJJ agreed) said in Rogers v Hoyle [2015] 1 QB 265 , “39 … findings of fact made by another decision maker are not to be admitted in a subsequent trial because the decision at that trial is to be made by the judge appointed to hear it (‘the trial judge’), and not another. The trial judge must decide the case for himself on the evidence that he receives, and in the light of the submissions on that evidence made to him. To admit evidence of the findings of fact of another person, however distinguished, and however thorough and competent his examination of the issues may have been, risks the decision being made, at least in part, on evidence other than that which the trial judge has heard and in reliance on the opinion of someone who is neither the relevant decision maker nor an expert in any relevant discipline, of which decision making is not one. The opinion of someone who is not the trial judge is, therefore, as a matter of law, irrelevant and not one to which he ought to have regard.”

34. Finally, I make clear that the inroads made on the rule in Hollington v Hewthorn , by the Civil Evidence Act 1968 , sections 11 -13, do not affect cases like the present, where a party seeks in a civil case to admit in evidence and rely on the decision reached in an earlier civil case: see eg Crypto Open Patent Alliance v Wright [2021] EWHC 3440 (Ch) , [45]-[47]. As a result, I am free to decide the question “employee or not” for myself, on the evidence presented to me in these proceedings. And, for the reasons given, in so deciding, I must and do ignore the decisions in the employment proceedings. FACTS FOUND The acquisition of Field Farm Beginnings

35. On the basis of the evidence before me, I find the following facts. Selwyn and Margaret Morgan owned a smallholding in Buckland, Oxfordshire, where they built a farming business with the help of their sons Colin (born in 1952), David (1958), Nigel (1961), Richard (1964), and Derek (1966). There were also three daughters, Susan, Yvonne, and Gillian. In 1984 they sold up, and bought Field Farm, Appleton, near Abingdon in Oxfordshire. Selwyn and Margaret lived in the main farmhouse. Unfortunately, Selwyn Morgan had by then developed lung cancer, and died soon afterwards, in 1985. Part of the farm was inherited by Margaret, and the rest belonged to a partnership originally consisting of the parents and the two elder sons, but which Nigel and Richard joined in 1990. The incorporation of OldCo

36. In the meantime, in about 1989, the family built two additional houses at the farm, Cranford House (in which Nigel and his family lived) and Wagtail House (in which Richard and his family lived). When Margaret died, in 2000, her share of the farm passed to the partnership. Although the farming business was initially carried on by the brothers, a company called S Morgan & Sons Limited (no. 11477181) was incorporated, in December 1990 to hold the farm and to take over and operate the business. This was “OldCo”, rather than the seventh respondent. OldCo was operated on the basis of a quasi-partnership between the brothers. The four brothers, together with Derek, were directors and equal shareholders in OldCo. They were also employees. Each was married, with children, and their wives were all involved in the business. I set out some of the details of the family members above (at [3]), and I shall not repeat them here. Derek ceased to be involved in the company in 1995, and played no further part in this story. (He died in 2024.)

37. The quasi-partnership referred to above meant that the brothers had both an equality of interest in the business and an expectation of being involved in the management of it. The quasi-partnership continued in SMS, once it was incorporated in 2013. OldCo never declared a dividend to its members. Nor has SMS ever done so. But the brothers have always benefited from the companies in a number of tangible ways. These have included a weekly income, the provision of accommodation, the payment of utility bills and council tax in relation to that accommodation, and the provision free of charge of motor vehicles, mobile phones, meat and firewood. Employees or not?

38. As I have already said earlier, there is an issue on the pleadings as to whether the brothers (and their wives) were employees of OldCo and then SMS. I have heard the witnesses, and seen the documents in the evidence before me. These documents include the entries in the accounts for SMS showing “Directors’ remuneration” as an administrative expense deductible in calculating profit, marking payments to the directors and their wives in SMS’s bank accounts as “wages”, a run of Richard’s tax returns from 2012 to 2021 and some of his forms P60, as well as forms P60 for Colin and David for 1999, and the letters of September 2023 to Richard and Julie from SMS formally giving notice of the termination of their employments. The evidence of Childishly altered to “drawings” shortly before the Employment Tribunal hearing in January 2025. the Act ive Respondents themselves was that, from the outset, SMS was initially financed from redundancy compensation from the brothers’ employment by OldCo , and that SMS was operated in the same way as OldCo. All of this supports Richard’s allegation that they were employees. No doubt the brothers arranged matters this way on advice, because it was tax efficient. But that does not mean that all these documents are shams. The tax efficiency could be obtained only by genuine transactions.

39. In any event, the argument of the Act ive Respondents, that the payments can be explained by the fact that Richard was a director of and shareholder in the Companies, cannot explain the wages paid to Julie, who was neither. And the argument that the weekly payments were repayments of earlier loans made by Richard and Julie to SMS suffers from the weaknesses that (i) such payments were made by OldCo and then SMS to them from the beginning, before any loans were made, (ii) similar weekly sums were also paid to the younger generation, including Leigh and Gareth, as wages for work done, though they did not lend any money to the business, and (iii) the Act ive Respondents now seek to argue that although Richard and Julie paid large sums to the company, these were not loans at all.

40. Looking at the matter more broadly, it is absurd to think that Richard or Julie could have sent a substitute worker in their places. It is also clear that SMS, through the morning meetings held by the brothers, was in charge of what was to be done from day to day. Richard could not have simply done anything he wanted. On the totality of the evidence before me, I find that Richard and Julie were both employees, and that the weekly sums paid to them were indeed wages for work done under a contract of employment. They were certainly not repayments of the loans that they had made to the company.

41. Although there was never any express agreement to this effect, I find that it was implied that each brother would work in the business to the extent that he was able. That after all was the basis of the wages paid. (I also find that, until he was dismissed from his employment, and removed from his directorships, Richard worked at least as hard as any other of the brothers.) But I also find that there was no agreement, express or implied, as to contribution by the brothers out of their own financial resources, present or future, to support the business. Their resources in the early stages of the business were not sufficient to support the business at the level which later became necessary, and none of them then contemplated obtaining the level of compensation which was subsequently achieved. Accordingly, no brother could be required to contribute further funds, whether by way of loan or share capital, to the business. Other properties

42. For the sake of completeness, I mention that there are also four other properties which were never owned by the company, but instead were and are owned by the brothers personally. Three of them are residential, one being occupied by Robert, one by employees of a company called Mutchmeats Ltd (which comes into the story later on), and one being currently unoccupied. The fourth consists of land on which there is a barn. The HBOS frauds

43. In September 2002 another company, Field Farm Fresh Ltd (“FFF1”), was incorporated as a 99% subsidiary of OldCo. It ran a business supplying meat products direct to customers. The four brothers were its directors. Business expanded rapidly. Both OldCo and FFF1 became customers of HBOS. However, because of financial difficulty, their business was transferred to the HBOS Impaired Assets Unit in Reading. Unfortunately, at this time, some of the staff of that unit were corrupt, and committed frauds against their customers, and the Morgans’ farming business was one of these. One of the corrupt bankers was called Lyndon Scourfield.

44. It seems that he would provide facilities to customers on a bespoke basis, often allowing them to extend their overdraft accounts at his discretion, before then putting them under pressure and causing the engagement of his third-party associates to give “advice” or provide “insolvency services”. When Mr Scourfield insisted that these associates were appointed to administer or run the customers’ businesses, the associates would substantially extend their credit, force them into insolvency and then acquire the assets out of the distressed business in the administration or insolvency process. (Eventually, Scourfield and his associates were prosecuted and sentenced to lengthy terms of imprisonment. But that was many years in the future.) Administration and insolvency

45. David managed the businesses of the farm. But he was diagnosed with bowel cancer in 2005, and thereafter deteriorated physically. Nigel took on more of the responsibility for the running of the farm. In 2006 the Morgans moved banks, to Barclays. But things did not improve over time. The businesses had little working capital, but a lot of assets which had to be refinanced. Colin and his wife Angela, and David and his wife Jane, put in significant amounts of money in an attempt to keep the businesses afloat. In 2012 the family attempted a “pre-pack” administration, but it did not work out as planned. OldCo went into administration in January 2013, taking the farmland and residential properties with it. (It was eventually dissolved in April 2017.) The new company (SMS) was incorporated in May 2013, with the next generation of family members as the initial directors, as the brothers were bankrupt by this time. It was financed by the family members putting in their redundancy compensation from their employment at OldCo, and what they could borrow elsewhere, and little by little a small cattle business was rebuilt. This involved buying, fattening and then selling cattle for slaughter.

46. Nevertheless, because of the personal guarantees that they had previously given, the four brothers and their wives were made bankrupt, some in November and some in December 2013. FFF1 was wound up by the court in March 2014. David sadly died in April 2014. In July 2015, however, the family managed to borrow £3.75 million, sufficient to recover the farm and the residential properties from Old Co’s administrators. This loan however involved high interest rates, giving security over buildings and also further personal guarantees by Colin, Nigel, Jane, Richard, Gareth, Leigh and Christopher. In addition, the family members had to enter assured shorthold tenancies of the residential properties (without any rent), so that they could be more easily realised in case of any default. Compensation for the frauds (1) SME Alliance Ltd and Modus

47. In 2016 the Morgan family for the first time became aware of the possibility of compensation for the HBOS frauds. Nigel, Richard, Lynn and Julie went to a meeting in London of the SME Alliance Ltd (“SMEA”), a not-for-profit company founded to share information between victims of banking frauds. One of the directors of SMEA was married to Paul Turner, who was then advising the Morgans. At that meeting they were introduced briefly to Stephen Middleton, who had helped to found SMEA in 2014, and who was a consultant for a firm called Modus, which offered professional assistance to victims of banking malpractice. At that stage the Morgan family were just trying to understand what had happened and what might be done. However, once Lyndon Scourfield and his associates had been convicted and sentenced to prison in late January 2017, Paul Turner approached Stephen Middleton, to ask if Modus would act for the Morgans in their claim for compensation. The Griggs Review

48. At about the same time, Lloyds Banking Group, which had acquired HBOS in 2009 after the financial crisis of the previous year, appointed Professor Russell Griggs to consider whether victims of the HBOS frauds should receive compensation. His review commenced in March 2017. Stephen Middleton formally met the Morgan family at the farm shortly afterwards to discuss their case, and on several later occasions. He also met them at, and after, SMEA meetings in London. Mr Middleton was enthusiastic about the Morgans’ claims, and expected to submit a total claim on their behalf for more than £100 million. The family also engaged accountants and solicitors on a “no-win, no-fee” basis. However, the Morgans’ relationship with Modus was through the Turners, and the relationship between Modus and the Turners (and therefore the Morgans) broke down in October-November 2017. Thereafter Modus informed the Morgans that it could not continue to advise them. Mediation

49. The Morgans nevertheless carried on with their claim, with the advice of Paul Turner. Nigel, Richard, Lynn and Julie attended further meetings in London. (Colin and Jane, who represented 50% of potential claims, did not attend.) The family received some modest interim compensation for distress and inconvenience whilst their claims were being considered. This helped the family to survive. Finally, in 2018, following a mediation, attended by Nigel, Richard, Lynn and Julie, and advised by their solicitors, Nigel and Richard (as well as Jane and Colin, by telephone) decided to accept offers of £1 million for each of the brothers. They were under financial pressure (by then owing more than £4 million between them), and were advised by their lawyers that they might not achieve as much compensation if they did not accept. At that stage it was thought that that was all the compensation which they would receive. Application of compensation

50. Each brother (or his estate) entered into a separate settlement agreement with Lloyds Bank. The compensation was then duly paid to each brother (or his estate) individually. At that stage no-one considered the possibility that a brother might refuse to use his compensation to pay mortgage interest payments and other business expenses, or as to how monies so used would be treated in law. Nigel’s evidence was that, on the trips to London and back, there had been some (unparticularised) discussion as to how any compensation paid might be applied. Nevertheless, I find that neither on the London trips, nor after the mediation offer, was there was any agreement, express or implied, that each brother (or estate) was obliged to use the monies for business purposes, such as to pay down the mortgage. Nor was there any agreement, or even individual intention, that sums so paid would be subscribed for further share capital in, or indeed gifts to, SMS. The seventh respondent, SMSL, was incorporated on 23 July 2018.

51. Between December 2018 and January 2019, with the exception of Colin (who paid £231,000) each brother (or estate) paid £250,000 to SMS. But payments continued to be sought thereafter by Jane (who was in effect the financial controller, and operated the company’s bank account) and paid by family members. From late 2018 Jane, from March 2020 Julie, and subsequently other members of the family (either at Jane’s suggestion or following her example), began to refer to these payments as “loans”. Julie’s evidence, which I accept, is that she was advised to do so by Jane, who had previously worked in a bank. Mr Hewitt in his evidence said he thought they were loans. Since the family did not intend to make gifts, they did not subscribe for shares, and no one suggested any other form of transaction, I hold that in law they were indeed loans to SMS.

52. Also in 2019, Richard and Julie revived the Field Farm Fresh business, and a new company (“FFF2”) was incorporated as a subsidiary of SMSL on 14 November 2019 to carry it on, using the meat unit which had been left unused since FFF1 went into administration. Mutchmeats Ltd

53. Another significant event in 2019 was the acquisition by SMSL of 80% of Mutchmeats Limited. This was a meat abattoir business. The acquisition was conceived by Nigel in about April 2019, and completed in September of that year. Minutes of a board meeting of SMSL for 12 September 2019 show both Nigel and Richard as being present (though they bear only Nigel’s signature). These minutes (as so often happens in practice) were prepared by advisers in advance of the meeting. I find however that Richard was not at the meeting (because he was working elsewhere on the farm), and that in fact he did not agree to the transaction. He considered that Mutchmeats was losing money and would need considerable investment to become profitable. Jane too accepted in her evidence that she had some concerns about this acquisition. When Richard raised his concerns with Nigel, he (Nigel) said he was doing it anyway.

54. Richard was not made a director of Mutchmeats. The only two directors were Nigel and Andrew Mutch (whose father had founded the company). The acquisition and its governance, as well as the surrounding documentary evidence, demonstrate that Nigel was in control of the family business, and was already excluding Richard from management. I find that, apart from helping to build a new lairage and shed for the business, Richard has had no involvement in Mutchmeats since it was acquired, and has not been involved in any decision-making about it. It has been entirely controlled by Nigel, and it has lost money (indeed, as I say later, it is now worthless). On the evidence, I find that the deterioration in the relationship between Nigel and Richard had become apparent by the time of the acquisition of Mutchmeats. Compensation for the frauds (2) The Cranston Review

55. I return to the question of compensation for the victims of the HBOS frauds. There were complaints by those victims that the compensation awarded was insufficient. In 2019 a retired High Court judge, Sir Ross Cranston, was appointed by Lloyds Bank to review the compensation paid. One of his recommendations was that any spouses who were involved in the business should also receive compensation if they were considered to have been de facto directors. The family was told it was not eligible for the Cranston Review, however, as they had already settled through mediation. Nigel contacted Stephen Middleton to ask him to take up the family’s claim again. After discussions, Mr Middleton agreed to do so. It took some effort to persuade the Cranston Review that the Morgans should be eligible at all, but eventually it was accepted that the wives could make claims. A lot of further work then went into proving the status of the wives and the losses that they had sustained. Jane was the first to receive compensation, in the sum of about £1 million, in May 2020. Application of compensation

56. Jane then transferred £144,000 of this money to SMS, which she referred to as “loan”. She confirmed in cross-examination that this was done on her own initiative, despite her original written evidence that it had been done with everyone’s agreement. Indeed, she accepted that she had not even discussed this with Richard or Julie. She then paid about £200,000 to each of Lynn, Julie and Angela’s estate. She similarly confirmed in cross-examination that no one had asked her to do this, and that she had been under no obligation to do so. I find that none of these payments was made pursuant to any agreement with Richard or Julie to do so. Thereafter, Jane made a series of further payments totalling £314,200 to SMS, as loans from her. There was no suggestion that these payments were shared with others.

57. Subsequently, there were offers made by Lloyds Bank to the other three wives which resulted in payments to them of £528,000 each in December 2020, compared with £1 million for Jane. However, after further submissions there were further payments in June 2021 of £472,000 each. So, each of them had received £1 million. Once they had received these sums, each of Lynn, Julie and Colin (for Angela) paid to Jane the equivalent of the sums paid to them earlier by Jane. I further find that there was no agreement, express or implied, for compensation to be shared, equally or otherwise, amongst the brothers’ wives. Instead, Jane had voluntarily shared her compensation with the others because at that time they had no compensation, and she thought that, morally, it was the right thing to do. Then, once they had received their own compensation, they had given an equivalent amount back to Jane. On the evidence, I find that they too felt morally obliged to do this. But, in my judgment, they had no legal obligation to do so.

58. To the extent that it is different, and for the avoidance of doubt, I find that there was no agreement between the members of the family that, in making claims for compensation for the frauds, they were entering some kind of joint venture, with a view to sharing equally in any compensation payment made to any of them. Moreover, none of the Act ive Respondents acted to their detriment in reliance on any supposed joint-venture idea. There was certainly no suggestion that any of them refrained from seeking compensation so as to allow Richard Julie to do so. The marginalisation of Richard

59. In the meantime, in 2020, the Covid pandemic struck. This had a severe impact on the family businesses. Unfortunately, it also had a significant impact on Nigel personally. In February 2021, he was hospitalised because of it, and it has left him in a weakened physical state ever since. He now requires an oxygen tank to help his breathing, and uses a mobility scooter to move around. In August 2021, Nigel’s son Robert returned to the farm from New Zealand (where his marriage had broken down) to work full-time. Robert’s work on the farm was similar to that of Richard. Richard felt more marginalised as a result. In addition, Nigel began to favour Robert. Without consulting Richard, Nigel caused SMS to buy an expensive car for Robert on his return, and (in 2022) to pay for the conversion of the garage at the house in which he lived (Cranford House) for Robert to live in.

60. Nigel had already decided that he wanted to extend his house, and he agreed that Richard could extend his too. Work started on Cranford House in January or February 2022, and Richard contributed significant labour to this project, in order to save money for SMS, which was paying for it. But Richard was still working on the farm as well, managing the animals as much as he could, including the night lambing shift. However, Nigel would not allow any work to be done on Wagtail House until the work on Cranford House had been completed. Consequently, it was not until August or September 2022 that work on Wagtail House began.

61. In the meantime, in about April 2022, Richard had decided that he had to give up full time farm working in favour of working full-time for SMS on the building works at both Cranford House and Wagtail House (which SMS owned as part of the farm). The other brothers agreed. As a result, he ceased to attend the morning meetings at which that day’s work on the farm would be discussed. It was already the case that Colin rarely attended, because he was semi-retired. Consequently, Nigel was the only brother to attend regularly, together with some of the next generation. This contributed to Richard’s feeling of marginalisation from the business. The loans to the company

62. As I have already said, once the members of the family had received their compensation, either following the mediation or following the Cranston Review, Jane had requested payments to SMS which were recorded as, and which I have held to be, loans to the company. By June 2022, Richard and Julie had lent £1.78 million to SMS out of the £2 million (less fees) that they had received. These loans have been formally recorded in the company’s accounts as director’s loan accounts (abbreviated in many of the documents to “DLA”). The Act ive Respondents somewhat cryptically plead (at [23.1.1]) this this recording was “done on the basis of accountancy advice”, without saying whether they accept that there were loans or not. But they do also deny (at [23.5]) that SMS “is under any obligation to repay any loan”. Whether that is because they say the payments to SMS were not loans, or that they were, but that the terms on which the monies were lent do not require repayment, is not clear.

63. However, the Act ive Respondents plead that any such loans that there were “were repayable only: (i) at the absolute discretion of Company A (if and when Company A has sufficient funds to make such repayments); and (ii) to all lenders in the same proportion or amount, so that no individual lender had or has the right to repayment on demand.”. I find that there was no express agreement with Richard and Julie to this effect. Nor can such terms be implied into the contracts of loan, because they are neither obvious nor necessary for business efficacy. (I discuss the relevant legal principles later on in this judgment.) On the contrary, I find that these were indeed loans repayable on demand, though without any agreement as to interest. This finding is also supported by the fact that the loans were recorded in the accounts of SMS filed before the petition was presented as debts falling due within one year. (The accounts of SMS filed after the petition was presented show the same debts as falling due after one year.) In addition, it is supported by the fact that SMS has repaid some of the loans expressly as such to each of Colin, Jane and Lynn, but not to Richard or Julie. This is inconsistent with the implied term (ii) above. Richard and Julie asked SMS “more than once” for repayment of their loans, but were not repaid. On 20 October 2023, Richard’s solicitors wrote formally to SMS to demand repayment of the sum of £1,734,560.97 as director’s loans, but the company has not complied.

64. I have earlier in this judgment dealt with this point, but for convenience I repeat here that the weekly payments made by SMS to Richard and Julie were wages for work done, and were not repayments of the loans that they had made to SMS. As Richard says, if they had been such repayments, that would have meant that he and Julie were working for nothing. Compensation for the frauds (3) The Foskett Panel

65. The compensation so far discussed and paid to family members had been compensation for distress and inconvenience . But a further panel had been set up by Lloyds Bank to consider compensation for direct consequential losses which could be proved to have been suffered. It was chaired by Sir David Foskett, another retired High Court judge. This was seen by the Morgans and their advisers as the opportunity to make the very large claim that they had previously been advised they could make. The Foskett Panel process began as early as April 2020. But by late 2021 only a few victims’ compensation had been resolved, and there was pressure exerted by politicians to speed up the process. By July 2022, therefore, the Panel had changed tack, and had begun to offer “Fixed Sum Awards” (FSA) of £3 million, plus a tax payment, for any victim who did not wish to pursue (slower) detailed proof and quantification of losses suffered. The need for annulment of bankruptcies

66. However, this new scheme particularly affected those who had been made bankrupt (as the Morgans had). In August 2022, it emerged that any such person wishing to accept an FSA had first to notify his or her trustee in bankruptcy, and have the bankruptcy annulled. At this time, the family was suffering the effects of Covid on their business, and needed money. At the same time, however, the family was advised that there was a risk that any claims for direct and consequential losses, if taken to proof, would fail for want of causation. The FSA scheme was therefore particularly attractive, if it could apply. Submissions were made on their behalf in autumn 2022, and in February 2023 the family’s status as victims was accepted. So the way was clear for them to be offered FSA. But first they needed to have their bankruptcies annulled. I will return to this question in due course. Relationship breakdown Non-consultation

67. As I have said, the gradual breakdown in the relationship between Richard and Julie and their children on the one hand and the rest of the family on the other started to become apparent from about 2019. But it increased in later years. Nigel refused to supply financial information about the businesses to Richard, and did not consult him in relation to a number of significant business decisions. These included increasing the wages of Jane and Lynn in February 2023, refinancing the loan on Richard’s car in the same month, and many finance or lease agreements, including acquiring a JCB shovel in March 2023, an agreement to acquire a tractor unit in the same month, and an agreement with Shire Leasing in June 2023. By that stage the amount owed by SMS under hire purchase and finance leases was well over £1 million.

68. On the other hand, Richard was asked to, and did, sign two personal guarantees for Shire Leasing in March 2023. As I have said, Richard cannot read, and I find that he simply signed them without understanding their contents when they were placed in front of him, as he had done on every other occasion before. I have no doubt that, originally, Richard trusted Nigel and Jane to be straight with him in matters concerning the family business. However, that trust was gradually eroded. At some time before 26 March 2023, Nigel and Richard stopped talking to each other. According to records in evidence, there were no telephone calls from Nigel’s phone to Richard’s phone after 31 March 2023. Similarly, there were no telephone calls from Robert’s phone to Richard’s phone after 25 April 2023.

69. Nigel gave evidence in his witness statements that he had a telephone conversation with Richard in December 2022 or January 2023, in which Richard told him that he wanted to leave: “When I get my money [presumably a reference to the Foskett Panel Fixed Sum Award] I’m getting out”. Lynn confirms this conversation in her evidence, saying that she was nearby when it happened. Richard denies the conversation altogether. Having seen all three of these witnesses being cross-examined, I find that the telephone conversation never happened. I am forced to the conclusion that Nigel and Lynn have invented it.

70. Colin gave evidence that, he had a conversation with Richard at the farm, and Richard said that he was “going to start looking after [his] family now”. Richard denied that he had spoken to Colin after he came back from Jamaica. For the reasons given earlier, I prefer Richard’s evidence to that of Colin. In my opinion, Colin is mistaken. The refusal to sign the bank mandate form

71. In early April 2023, Richard was asked to sign a new bank mandate form for FFF2. He decided that he would not do so until he was supplied with proper financial information about the businesses. Julie had a meeting with Jane at the farm office, when she informed Jane of Richard’s decision. The evidence on this meeting was conflicting. I accept Julie’s version of events, and find that the meeting took place on 5 April 2023, and that Julie told Jane in substance that Richard was not willing to provide any more money, and did not want to argue about it. But she did not say that Richard wanted to get out of the family business. Jane’s evidence was that Richard was not asked to sign the bank mandate until 11 April 2023. I do not accept this.

72. But I do accept that she (not being a director) sent an email to Sandeep Garcha at the companies’ accountants on 11 April 2023, not copied to Richard or Julie, stating that Richard “wishes to resign as a director” from SMS, SMSL and FFF2. I find further that she sent this email at Nigel’s instigation, who had not consulted any other director. However, I also find that that statement was not true, and that neither Richard nor Julie had said any such thing. Nor had any of Nigel, Jane or Lynn contacted Richard to see whether he really wished to resign his directorships. And, as a matter of fact, he never did. In cross-examination Nigel said that he did not want to remove Richard from the business. I do not accept this. Nigel’s email to Mr Hewitt of 16 May 2023 shows that he did and, in the end, this is exactly what he did in October 2023. The meeting with Mr Hewitt

73. In the meantime, Richard and Julie arranged to see Ian Hewitt, the companies’ accountant, at his office in Henley-on-Thames, on 13 April 2023. Unlike Richard and Julie, Mr Hewitt was aware of the email of 11 April 2023. He had also spoken to Nigel by telephone on 12 April 2023, although he said he could not remember the conversation. In my judgment, that was simply a diplomatic “memory lapse”. I think he well remembered it, but did not wish to give evidence about it. At the meeting Richard and Julie explained their unhappiness with Richard being excluded from running the business and their unhappiness with the way that Nigel was doing so. Given that Mr Hewitt knew of the email of 11 April 2023, it might be natural for him to suppose that Richard was asking to exit the business. However, Richard and Julie’s purpose in visiting was to obtain information about the business which they could not obtain from Nigel. Richard was not suggesting that he should exit the business. He wanted to make a will, and wanted to know what he was entitled to.

74. Accordingly, when Mr Hewitt suggested that they should take their FSAs, leave the farm and give up the business, Julie became upset. This is consistent with Richard’s not seeking to quit the Companies. In their view, the farm was not only their home but also their life. And, if they simply took their compensation, they would be giving up the farm for nothing. I find that Richard and Julie were attempting to explain to Mr Hewitt, not that they wished to leave the business, but that they wished to have the information about the business to which Richard considered he was entitled, as a director of and a shareholder in the relevant companies. I find that Richard and Julie did not tell Mr Hewitt that Richard wished to resign. Instead, Richard asked if Mr Hewitt would speak to Nigel to attempt to find a solution. Mr Hewitt says that this was in order to discuss a price to be paid for Richard’s exit. I do not accept that. That is not at all what Richard and Julie thought. They thought that Mr Hewitt was offering to try and broker a solution which would enable them to continue at the farm. In fact, I find that Mr Hewitt made no attempt to do this. In cross-examination, Mr Hewitt accepted that he and Richard might have been at cross-purposes. I find that they were. Further events

75. Instead, on 17 April 2023, Mr Hewitt’s colleague, Mr Garcha, emailed Julie some forms for Richard to sign in order to resign as a director as from 11 April 2023, together with draft minutes of a meeting of directors on 11 April 2023. In fact, I find that there had been no such board meeting. Richard did not sign the forms. On 19 April 2023, Julie had a telephone conversation with Jane, which she recorded on her mobile phone. In that conversation, Julie told Jane that Richard felt as though he was being pushed out. On 20 April 2023 Julie telephoned Mr Hewitt, but he was not available and so she left a voicemail message. The next day she sent an email to Mr Hewitt saying that they “would need some legal advice before we sign anything and I am not sure what if anything is being proposed”. It also said that Richard requested copies of the last five years’ accounts and a list of assets of the companies. Finally, it said that Richard wished to resolve the dispute amicably. Earlier on the same day Mr Garcha had in fact sent accounting information to Richard.

76. Mr Hewitt responded to Julie’s email later the same day, confirming what Mr Garcha had done. On 9 May 2023, Julie sent a further email to Mr Hewitt saying that as they had not heard anything from Mr Hewitt, they assumed that Nigel did not want to resolve it amicably, and were therefore seeing a solicitor. But nothing else happened. It is clear from Nigel’s emails to Mr Hewitt on 16 May 2023 that Nigel simply wanted Richard to be removed from the companies and from the business. Mr Hewitt’s response shows that he and Nigel had already discussed the situation, and that Mr Hewitt’s allegiance was not to the companies, whose adviser he was, but to Nigel. This correspondence was not copied to any other director or shareholders of the companies.

77. It will be recalled that the original event prompting these actions was Richard’s being asked to sign a new bank mandate form for FFF2. On 1 May 2023, Gareth, Leigh and Robert were appointed as directors of that company. This enabled the signing of the new bank mandate form without Richard’s involvement. (In fact, however, the new bank account was not opened until January 2024. Plainly, it was not urgent at all.)

78. Thus, by the beginning of May 2023, Richard was being excluded from financial information about the business and the Companies, was being excluded from management and decision-making, and was now outnumbered as a director. Moreover, Nigel had resolved to get rid of Richard from the business and the Companies, either by forcing him to resign or by removing him from his directorships and his employment. The writing was certainly on the wall. Richard’s evidence in cross-examination was that he was aware that the Act ive Respondents “were chucking me out of the business”, but that he “never wanted to leave. If it hadn’t been for Nigel persuading all the others, [he]’d still be there today”. I accept this evidence. The June 2023 correspondence

79. Richard took legal advice. His solicitors wrote to Nigel (alone) on 6 June 2023. In part this letter reads as follows: “Our client wishes step away [sic] from the business; in order to do that, there will need to be an agreement for the purchase of his Shares in the various Companies and an agreement will need to be reached in relation to the various properties of which he is a joint owner. At this early stage we are writing to you to establish whether in principle this is a process in which you are content to participate and to allow you to consider with the other stakeholders in the business what proposals if any you may wish to make in relation to the acquisition of Richard’s shares.” The terms of this letter are inconsistent with any notion that Richard had already resigned, or that he had previously told the Act ive Respondents that he would resign. On the contrary, it sets out a decision which has just been arrived at. I find that Richard was not seeking to leave the business in order to undertake new projects elsewhere or for other personal reasons. He did not want to leave at all. But the relationship had broken down, he was being excluded, and he saw no future there.

80. On 7 June 2023, Nigel sent an email to Mr Hewitt, copied to Patrick Gregan, a solicitor. It attached a copy of the letter of 6 June 2023. In part this email read: “I need to have an urgent conversation about Richard and Julie abusing company funds so I need to remove him as a director as soon as possible. Maybe you could have a think about it and come back to me.”

81. A formal response to the letter of 6 June 2023 was sent by email from Mr Gregan, on 16 June 2023. It was copied to Mr Hewitt. The email says that Mr Gregan had been instructed to act for Nigel and the other family members. In part, it reads as follows: “As you will appreciate, Richard’s announcement that he wished to leave the family business was wholly unexpected and came as a shock which has been destabilising at a time of considerable stress and struggle for the family, as well as difficult trading conditions for businesses across the group. Richard gave his notice to cease to be a director on 11 th April and followed up by his directly (or through Julie and him speaking to Ian) requesting those resignation letters and papers. These documents were duly sent by [the accountants] on 17 th April, but they have not received completed forms. Your client’s statement and actions have been clear and unequivocal that he neither wishes to be part of the family businesses nor be subject to his duties and obligations of directorship or employment and has thus absented himself since that time … You mention the purchase of shares, but … the levels of debt, terms and conditions of borrowing and difficult trading will not only impact valuation but available funding. Like many farming businesses cash flow is not optimal and large capital sums/liquidity is challenging for the businesses … Furthermore, there appear to be no shareholder agreements or other arrangements with terms to govern any of these companies or properties and as this is your clients [sic] unilateral voluntary decision, no mechanism for us to deal with the shares unless all parties reach agreement.”

82. I have already found that Richard did not give notice to cease to be a director on 11 April 2023. Nor did he request resignation papers. At that stage he did not wish to leave the Companies. Certainly, before the letter from his solicitors sent on 6 June 2023 there was no statement or action by him that I regard as amounting to the “clear and unequivocal” statement suggested by Mr Gregan. On the contrary, at least until that letter, Richard had been attempting to resolve amicably the problems which had arisen between himself and Nigel, in the hope that he and his family could continue to live and work at the farm. The letter of 6 June 2023 was written at the point where Richard considered that he was being positively excluded from the Companies and the business, and that therefore the only thing left to do was to try to sell his interests to the rest of the family. Nor was it true that Richard had absented himself from his duties towards the companies. On the contrary, he was still working on Wagtail House (which belonged to SMS, and not to him personally), which was what had been agreed with Nigel before their relationship broke down. And at that time Julie was continuing to work for FFF2.

83. On 20 June 2023, Richard’s solicitors asked for financial information to enable him to understand the position of the companies in relation to their terms and conditions of borrowing and “difficult trading” conditions. Mr Gregan’s response was that this had already been supplied. There was then correspondence about what had and had not been supplied, and finally further information was provided on 26 July 2023. In the meantime, however, on 12 and 13 July 2023, Mr Gregan advised his clients as to how to terminate Richard’s directorships and the employment of both Richard and Julie. These procedures were ultimately engaged. In my judgment, this is not a case of self-exclusion by Richard, but of exclusion of Richard by the Act ive Respondents, and especially Nigel. The incremental exclusion of Richard from the farm Wagtail House

84. However, before these procedures came to fruition, Nigel on behalf of SMS directed the tradesmen who were engaged at Wagtail House to stop work. On the evidence, I find that Nigel gave notice to one of the tradesmen on 27 July 2023 to stop work at the end of the day and to the building contractors not to carry out any further work on 28 July 2023. I find that Nigel did not consult any other director (and especially not Richard) before doing this. I also find that this effectively prevented Richard from continuing to work on Wagtail House, because there was not much he could do on his own without the other tradesmen. Wagtail House was left unfinished, without heating or hot water (apart from a small immersion heater).

85. Although Nigel ascribed the need to stop work to a lack of money in the companies, it is to be noted that work continued on Cranford House (where Nigel lived), and SMS continued to fund this. I reject Lynn’s evidence to the effect that she and Nigel funded these works. On the other hand, I find that Richard spent about £5,000 of his own money on the bathroom suite and about £1,600 for the stonemason at Wagtail House. He also worked on the site to make aspects safer, including shoring up a wall, and dealing with the live electrical cables. The Act ive Respondents allege that he “caused Wagtail House to be in a state of disrepair and effectively a construction site … ” I find that this is untrue. It was Nigel who gave the instruction to the builders to stop work and so caused the property to be left in an unsafe condition, which Richard then mitigated, as best he could. Locking gates and doors

86. On about 6 August 2023, Nigel caused a combination padlock to be placed on the gate allowing access through the farm. That made it impossible for Richard to access the part of the farm where the building materials for Wagtail House were stored without asking for the gate to be opened. Richard’s solicitors asked Mr Gregan for the code to the padlock, but this was not supplied. Mr Gregan replied that Richard had only to ask for access. I do not accept the evidence of Robert and Gareth that there were two padlocks and that Richard had a key for one of them. On about 26 August 2023, the locks were changed on the meat shed. Neither Richard nor Julie was consulted. Although this was Julie’s place of work, no keys were provided to her. I do not accept the Act ive Respondents’ evidence that these locks were changed only to prevent break-ins or to comply with insurers’ requirements. In my judgment, they were done to make Richard and Julie less welcome at the farm and to impede their ability to continue living there. The company meetings

87. On 28 August 2023, Mr Gregan sent out notices calling extraordinary general meetings for the companies. The notices stated that resolutions would be put to the meetings for further investment by the existing shareholders (including Richard) into SMS and SMSL. There was no mention of any business to be transacted at the meetings connected with the positions of Richard and Julie. Nigel’s evidence and cross-examination was that he remembered the email sending him the notices. He then said, “I thought that if Richard attends then we can have a chatter, perhaps it will break the ice and we can talk things over.” Nigel was asked whether he was not in fact intending to remove Richard as a director. His reply was “I don’t know what I was intending to do. I don’t know what I was intending. I wasn’t intending to do nothing.”

88. I do not believe this evidence for one moment. It is clear from the minutes of these meetings that it was reported that requisition letters under section 303 of the Companies Act 2005 had been received to call for the removal of Richard as a director of each company. To suggest that Nigel and Richard could have “a chatter” is simply risible. It was put to Nigel in cross-examination that there had been a plan put in place to remove Richard and Julie from the companies. Nigel’s reply was, “There was never ever a plan to remove Richard, ever. We just done what we had to with the company. We didn’t know all about this. We had a mega fight and we thought it was all over and then Richard decided to walk away after knowing that he was getting his money.” I do not accept this evidence either. Just by way of example, it is contradicted by the email chain between Nigel and Mr Hewitt of 16 May 2023. On the evidence before me, I find that there was indeed a plan to remove Richard, and that Nigel was behind it.

89. On 5 September 2023 Richard’s solicitors wrote to Mr Gregan saying that Richard would not be attending the meetings on 14 September 2023 because he was leaving the business and he would not be putting additional funds into the companies. In cross-examination, Mr Hewitt agreed in cross-examination that it was hard to believe that Richard would have agreed at that stage to put more money into the companies. After all, by that stage he and Julie had lent SMS about £1.8 million. On 14 September 2023 the general meetings took place in Richard’s absence and the resolutions for capital injections into the companies were passed. (I note that this appears to be the only occasion on which any of these companies raised finance by way of a fresh injection of share capital. It was therefore a complete departure from their previous practice. I am satisfied that it was done this way in order to put pressure on Richard to provide further finance, because he would not do so by way of loan.) As already stated, it was reported to the meetings that requisitions under section 303 had been received for further general meetings at which resolutions to remove Richard would be put. It was resolved to call the further meetings.

90. The evidence of Mr Hewitt (who attended the meetings on 14 September) was that “this process was put in train because Richard had not signed the paperwork that [Mr Hewitt’s firm] had prepared to effect his resignation … He also had not countersigned a bank mandate in his capacity as director, which was necessary for the opening of a new bank account, and this was becoming urgent issue.” I do not accept this evidence. First of all, and as I have found, Richard had never said that he would resign, and so his mere failure to sign the paperwork could not justify others in entering on the process of removal. There had to be another reason. Secondly, Richard’s refusal to sign a new bank mandate form was not an urgent issue. Indeed, it was not any kind of issue at all. As I have already said, three additional directors were appointed to the company concerned on 1 May 2023, and the bank account mandate could have been dealt with, without Richard, at any time since then. Moreover, the account concerned was not opened until January 2024.

91. On 18 September 2023, Richard and Julie received letters from SMS terminating their employments by the company as from 31 October 2023. They were paid their weekly wages until 7 September 2023. After 31 October 2023 they received no income, and the business no longer paid the utility bills either for their own home, Wagtail House, or for Katie’s home (nor council tax on the latter). However, I find that SMS has continued to pay these things to or for other members of the Morgan family (whether or not shareholders or working for the business).

92. On the same date, Richard received the notices of further company meetings at which a resolution for his removal as a director would be considered. On 13 October 2023, Richard’s solicitors sent the letters before claim already referred to. Amongst other things, they asked for the meetings on 17 October to be cancelled until the dispute had been resolved. Nevertheless, on 17 October 2023, the further company meetings were held, and resolutions were passed removing Richard from his directorships. Although Richard objected to his being removed, he did not attend the meetings. He remains a shareholder in the companies, though he fears that Nigel has set up a new company called SMS Food Group Ltd, of which he is sole director and shareholder, designed to take business away from the existing companies in which Richard is a shareholder.

93. It is clear from the evidence that the relationships between Richard and Julie and their family on the one hand, and the rest of the Morgan family at the farm on the other, had completely broken down. The atmosphere was properly to be described as “toxic”, and complaints were made to the police about this or that action or person. It is not necessary for me, in dealing with the important legal issues in this case, to have to deal with every one of those allegations. I will simply record that I find that Richard did not wish to leave the family business, but that he was progressively excluded from it, largely at the instigation of Nigel. Once Richard saw the writing on the wall, he tried to negotiate a sale of his shares, but Nigel was not interested.

94. Richard and Julie thereafter remained in occupation of Wagtail House until Julie acquired a property called Mill Moor Farm, in November or December 2024. However, before Richard and Julie had cleared Wagtail House of all their possessions, the Act ive Respondents changed the locks to that property, without providing Richard and Julie with the keys. The exclusion of Richard was complete. Compensation for the frauds (4)

95. As I have said, before the family members could accept FSAs under the Foskett Panel scheme, they needed to have their bankruptcies annulled. These proceeded in stages. The wives’ bankruptcies were annulled first, in December 2023. Those of Colin, Nigel, and Richard were not annulled until June 2024. That in relation to David’s estate was not then sought, perhaps because it was considered that his estate had the strongest claim for direct consequential losses. But I am not concerned with that now. Lynn, Jane, Julie and Angela’s estate received their FSA payments first, and later Nigel, Colin and Richard received theirs. That was a total of £21 million between them, which was significantly more than the family businesses needed at that stage. On the evidence, I find that there was no agreement involving Richard or Julie (or indeed Colin) as to what any FSA award would be used for. Richard received his compensation separately from the other brothers, by a separate agreement, and not collectively with others.

96. The consequence of the various compensation claims was that each of Nigel, Lynn, Colin, Jane, Richard and Julie, and Angela’s estate, separately received a total of £4 million (£1 million each in 2020 and the rest in 2023 or 2024), before fees and other deductions. It is not clear what has happened to the claims by David’s estate, but, as I have already said, they are not immediately relevant to what I have to decide. The evidence of the Act ive Respondents, unsupported by any documentary evidence, is that, in June 2024, Nigel and Colin each shared one third of their FSA with Jane. In cross-examination, all three accepted that Nigel and Colin had had no obligation to do so. In any event, Richard and Julie were not involved in this arrangement, which was entirely between Nigel, Colin and Jane. I find that neither Richard nor Julie ever agreed to share compensation with Jane. Nor can Nigel, Colin or Jane have thought so, because Nigel and Colin shared one third of their compensation with Jane, rather than one quarter, or even one fifth (if Julie is included). Other matters Valuation of the Companies

97. I must say something about the value of the Companies. As I have already said, each side commissioned an expert share valuation report. The experts were Mark Shelton, for the petitioner, and Gavin Pearson, the expert valuation witness for the first to fifth respondents. Only the former was cross-examined. In the experts’ joint statement, they said: “3.1. As detailed at paragraph 3.18 below, in addition to his primary valuation, Mr Shelton has been instructed to consider the value of SMS Farming at 18 October 2023 by applying one or both of the following assumptions: (a) That the value of stock was the value as shown on the balance sheet at 30 May 2023; and (b) That t he directors’ loans were not repayable. 3.2. The Experts’ valuations of SMS Farming at 18 October 2023 are summarised in the table below 3.3 the Experts agree that SMS Farming had no value at 18 October 2023, on the bases that: (a) The value of stock was as valued by Mr Cannon; and (b) The directors’ loans were repayable by the company. 3.4 As summarised in the table at paragraph 3.2 above, Mr Shelton considers that SMS Farming had a value if the stock value at 18 October was similar to that shown in the previous balance sheet, at 30 May 2023, and/or the directors’ loans were not repayable, i.e. if either of the assumptions listed at paragraph 3.1 were applicable. 3.5 The £971,258 difference between the net liabilities determined by Mr Shelton and Mr Pearson assuming neither assumption applies is primarily attributable to Mr Pearson’s provision for latent tax on the sale of the land and buildings and the latent selling costs in relation to the land and buildings together totalling £981,657 and considered further at paragraph 3.19 below). In all other respects, the Experts’ valuations on a going concern basis are not materially different.”

98. In relation to SMSL the experts’ joint statement said this: “4.1 The Experts’ valuations of S Morgan & Sons at 18 October 2023 are summarised in the table below. 4.2 The experts agree that neither S Morgan & Sons at the company level, nor either of its subsidiaries, Mutchmeats and Field Farm Fresh, had any value at 18 October 2023. Accordingly, they agree that S Morgan & Sons had no value at that date.”

99. It will be seen that the experts agreed on the value of SMSL as £Nil. I have no basis for disagreeing with that joint opinion, and I accept it. As to the value of SMS, it will be seen that the difference between the opinions of the two experts depends on assumptions being made. The assumption that matters for present purposes is whether the loans are repayable by SMS or not. If they are repayable, then according to both experts, the company has no value. However, Mr Shelton (but not Mr Pearson) was asked to consider the position on alternative bases, including one that the loans are not repayable. On that basis, Mr Shelton gave as his opinion that SMS had a value of £3,218,917. Mr Pearson did not offer an opinion on that assumption. In other words, Mr Shelton says that, if the loans do not have to be repaid, the company has a significant value. But, if it has to pay back those loans, that value disappears. I have found that the loans are repayable. Accordingly, if Mr Shelton is right, the company can afford to repay at least a percentage of the loans before it runs out of money. As I have said, I saw Mr Shelton being cross-examined, and found him to be an impressive and highly competent witness. I accept his evidence. Vehicles retained by Richard

100. After Richard was removed from his directorships, SMS and Mutchmeats sought the return of three motor vehicles in his possession, which either belonged or were leased to them. When Richard refused to return them, the companies brought proceedings against him. The vehicles were finally delivered up by Richard in June 2024, following a consent order in the litigation to that effect. Open offer by the Act ive Respondents

101. Finally, I record that, on 4 June 2025, the Act ive Respondents made an open offer to Richard and Julie to settle the litigation on certain terms. These included payment of the loans made to SMS by Richard and Julie only when SMS could afford to repay all such loans, payment of £500,000 to Jane in respect of the counterclaim, and payment of the Act ive Respondents’ costs in the sum of £630,000 (although their approved costs budget was about £450,000). THE LAW Contract law Implied terms in contracts

102. There was relatively little disagreement between the parties on the relevant law to be applied. I begin with the implication of terms into a contract. In Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742 , Lord Neuberger (with whom Lord Sumption and Lord Hodge agreed) said: “18. In the Privy Council case of BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 52 ALJR 20, , 26, Lord Simon (speaking for the majority, which included Viscount Dilhorne and Lord Keith) said that: [1977] UKPC 13 ‘[F]or a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.’

19. In Philips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472 , 481, Sir Thomas Bingham MR set out Lord Simon's formulation, and described it as a summary which ‘distil[led] the essence of much learning on implied terms’ but whose ‘simplicity could be almost misleading’. Sir Thomas then explained that it was ‘difficult to infer with confidence what the parties must have intended when they have entered into a lengthy and carefully-drafted contract but have omitted to make provision for the matter in issue’, because ‘it may well be doubtful whether the omission was the result of the parties' oversight or of their deliberate decision’, or indeed the parties might suspect that "they are unlikely to agree on what is to happen in a certain ... eventuality’ and ‘may well choose to leave the matter uncovered in their contract in the hope that the eventuality will not occur’. Sir Thomas went on to say this at p 482: ‘The question of whether a term should be implied, and if so what, almost inevitably arises after a crisis has been reached in the performance of the contract. So the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which will reflect the merits of the situation as they then appear. Tempting, but wrong. [He then quoted the observations of Scrutton LJ in Reigate , and continued] [I]t is not enough to show that had the parties foreseen the eventuality which in fact occurred they would have wished to make provision for it, unless it can also be shown either that there was only one contractual solution or that one of several possible solutions would without doubt have been preferred ... ’

20. Sir Thomas's approach in Philips was consistent with his reasoning, as Bingham LJ, in the earlier case The APJ Priti [1987] 2 Lloyd's Rep 37, 42, where he rejected the argument that a warranty, to the effect that the port declared was prospectively safe, could be implied into a voyage charter-party. His reasons for rejecting the implication were ‘because the omission of an express warranty may well have been deliberate, because such an implied term is not necessary for the business efficacy of the charter and because such an implied term would at best lie uneasily beside the express terms of the charter’.

21. In my judgment, the judicial observations so far considered represent a clear, consistent and principled approach. It could be dangerous to reformulate the principles, but I would add six comments on the summary given by Lord Simon in BP Refinery as extended by Sir Thomas Bingham in Philips and exemplified in The APJ Priti . First, in Equitable Life Assurance Society v Hyman , 459, Lord Steyn rightly observed that the implication of a term was ‘not critically dependent on proof of an actual intention of the parties’ when negotiating the contract. If one approaches the question by reference to what the parties would have agreed, one is not strictly concerned with the hypothetical answer of the actual parties, but with that of notional reasonable people in the position of the parties at the time at which they were contracting. Secondly, a term should not be implied into a detailed commercial contract merely because it appears fair or merely because one considers that the parties would have agreed it if it had been suggested to them. Those are necessary but not sufficient grounds for including a term. However, and thirdly, it is questionable whether Lord Simon's first requirement, reasonableness and equitableness, will usually, if ever, add anything: if a term satisfies the other requirements, it is hard to think that it would not be reasonable and equitable. Fourthly, as Lord Hoffmann I think suggested in [2002] 1 AC 408 Attorney General of Belize v Belize Telecom Ltd , para 27, although Lord Simon's requirements are otherwise cumulative, I would accept that business necessity and obviousness, his second and third requirements, can be alternatives in the sense that only one of them needs to be satisfied, although I suspect that in practice it would be a rare case where only one of those two requirements would be satisfied. Fifthly, if one approaches the issue by reference to the officious bystander, it is ‘vital to formulate the question to be posed by [him] with the utmost care’, to quote from Lewison, [2009] 1 WLR 1988 The Interpretation of Contracts 5th ed (2011), para 6.09. Sixthly, necessity for business efficacy involves a value judgment. It is rightly common ground on this appeal that the test is not one of ‘absolute necessity’, not least because the necessity is judged by reference to business efficacy. It may well be that a more helpful way of putting Lord Simon's second requirement is, as suggested by Lord Sumption in argument, that a term can only be implied if, without the term, the contract would lack commercial or practical coherence.”

103. Lord Carnwath and Lord Clarke reached the same conclusion as Lord Neuberger on the facts of the case, but, in relation to the implication of terms into a contract, expressed themselves in slightly different terms. Since the judgment of Lord Neuberger is that of the majority, it is the ratio of that which binds me, and I shall follow it. Exercise of discretion

104. In Braganza v BP Shipping Limited [2015] 1 WLR 1661 , SC, the question arose as to the test to be applied when one party to a contract (here the employer) had to reach an opinion as to some facts or matters, which would have an effect on the rights of the other party under the contract (here the employee). The contract provided that compensation for death, accidental injury or illness should not be payable to the employee or his estate if in the employer’s opinion the damage resulted from (amongst other things) his own wilful act. Here the employer had concluded that the employee, a Chief Engineer on board ship, had committed suicide by jumping overboard during the night, without any witnesses. The five members of the Supreme Court gave three separate judgements: one by Lady Hale (with whom Lord Kerr agreed), one by Lord Hodge (with whom Lord Kerr agreed) and one by Lord Neuberger (with whom Lord Wilson agreed). Lady Hale and Lord Hodge (and therefore Lord Kerr) allowed the appeal, whereas Lord Neuberger (and therefore Lord Wilson) would have dismissed it.

105. Lady Hale said: “32. … it is unnecessary to reach a final conclusion on the precise extent to which an implied contractual term may differ from the principles applicable to judicial review of administrative action. Given that the question may arise in so many different contractual contexts, it may well be that no precise answer can be given. The particular context of this case is an employment contract, which, as Lord Hodge explains, is of a different character from an ordinary commercial contract. Any decision-making function entrusted to the employer has to be exercised in accordance with the implied obligation of trust and confidence. This must be borne in mind in considering how the contractual decision-maker should approach the question of whether a person has committed suicide. [ … ]

36. … In my view, a decision that an employee has committed suicide is not a rational or reasonable decision, in the terms discussed above, unless the employer has had it clearly in mind that suicide is such an improbability that cogent evidence is required to form the positive opinion that it has taken place. [ … ]

42. Although I would not have phrased the correct approach exactly as Teare J phrased it, in my view he was right to conclude (para 95) that the investigation team's report and conclusion could not be regarded as sufficiently cogent evidence to justify Mr Sullivan, and hence BP, in forming the positive opinion that he had committed suicide. No-one suggests that his decision was ‘arbitrary, capricious or perverse’, but in my view it was unreasonable in the Wednesbury sense, having been formed without taking relevant matters into account.”

106. Lord Hodge said: “53. Like Lady Hale, with whom Lord Neuberger agrees on this matter (para 103), I think that it is difficult to treat as rational the product of a process of reasoning if that process is flawed by the taking into consideration of an irrelevant matter or the failure to consider a relevant matter. While the courts have not as yet spoken with one voice, I agree that, in reviewing at least some contractual discretionary decisions, the court should address both limbs of Lord Greene's test in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 , 233-234.

54. In my view it is clearly appropriate to do so in contracts of employment which have specialties that do not normally exist in commercial contracts … While the duty [of mutual trust and confidence] as an inherent feature of the relationship of employer and employee does not survive the ending of the relationship, such as by dismissal or the expiry of a contractual period of employment, the death in service compensation was part of his contractual benefits, to which his nominated beneficiary was entitled unless BP were satisfied that the death was the result of his wilful act. For the employer to behave otherwise than in accordance with that duty would be to betray the trust of the deceased employee. [ … ]

60. Given the improbability of suicide in this case, I agree with Lady Hale (para 36 above) there had to be cogent evidence to overcome that improbability. Not only do I not see that evidence but also I do not detect any consideration of both the possibility of Mr Braganza having acted carelessly while at the railings and that there would in all probability be no evidence of such behaviour. On those bases the appeal succeeds.”

107. Lord Neuberger said: “102. There was some discussion as to the standard which the court should expect of the decision-maker or opinion-former in such circumstances …

103. Like Lady Hale, I consider that there is considerable force in the notion that this approach is, and at any rate should be, the same as the approach which domestic courts adopt to a decision of the executive … I do not think that there is any inconsistency of approach between Lady Hale and Lord Hodge or myself in this connection.

104. However, a third point I should mention does concern a point of difference between us. It is best expressed by reference to Lord Hodge's statement that ‘contracts of employment … have specialties that do not normally exist in commercial contracts, which he discusses in para 54-57. It appears to me questionable whether the special implied mutual duty of trust and confidence survived the death of Mr Braganza, but I accept that there is a powerful case for contending that it did, at least for present purposes. However, I do not think it necessary to decide the point, because I fail to see how it assists Mrs Braganza's case. Once it is accepted that BP had to carry out the investigation with ‘honesty, good faith, and genuineness’ and had to avoid arbitrariness, capriciousness, perversity and irrationality’, I do not see what trust and confidence add …

105. A fourth point is also worth mentioning. A court considering a decision such as that reached in this case by the team or by Mr Sullivan should bear in mind the fact that it is performing a reviewing function, and, as I have already mentioned, not an originating fact-finding function. The court's approach should therefore be similar to that of an appellate court reviewing a trial judge's decision … ”

108. It appears therefore, that, at any rate in relation to contracts which are not contracts of employment, the Supreme Court was unanimous in holding that the approach that should be taken to the exercise by one party to a contract of a power to form a view as to particular facts should be the same as in relation to judicial review, ie it should not be arbitrary, capricious, perverse or irrational. Conduct unfairly prejudicial Statute

109. Next, I turn to the statutory provisions under which this petition is presented. Section 994 of the Companies Act 2005 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. (3) In this section, and so far as applicable for the purposes of this section in the other provisions of this Part, ‘ company ’ means— (a) a company within the meaning of this Act , or [ … ]”

110. And section 996 provides: “(1) If the court is satisfied that a petition under this Part is well founded, it may make such order as it thinks fit for giving relief in respect of the matters complained of. (2) Without prejudice to the generality of subsection (1), the court's order may— (a) regulate the conduct of the company's affairs in the future; (b) require the company— (i) to refrain from doing or continuing an act complained of, or (ii) to do an act that the petitioner has complained it has omitted to do; (c) authorise civil proceedings to be brought in the name and on behalf of the company by such person or persons and on such terms as the court may direct; (d) require the company not to make any, or any specified, alterations in its articles without the leave of the court; (e) provide for the purchase of the shares of any members of the company by other members or by the company itself and, in the case of a purchase by the company itself, the reduction of the company's capital accordingly.” Caselaw

111. The shareholder cause of action remedy now found in sections 994 and 996 was first introduced into English law by section 75 of the Companies Act 1980 . This is therefore now a mature jurisdiction. There are many decided cases on it. A considerable number of them were cited to me. Given the infinite variety of human interaction, it is hardly surprising that most of these cases turn on their individual facts, or are examples of what the court may do in particular circumstances. I hope I shall be forgiven, therefore, for referring to only a few of them. The first is O’Neill v Phillips [1999] 1 WLR 1092 , HL. This was a case where the respondent had voluntarily given 25% of the shares in his company to the petitioner, allowing him to manage the company, and allowing him 50% of the profits. Subsequently, he had told the petitioner that he was in principle willing (though without promising) to increase his shareholding to 50%. But later the respondent became concerned about the petitioner’s management, and took back the management, withdrew the 50% profit share, and refused to increase his shareholding. The petitioner presented a petition, claiming to be the victim of conduct unfairly prejudicial to him.

112. Lord Hoffmann (with whom the rest of the House agreed) discussed the concept of fairness for the purposes of this jurisdiction, and said this (at 1098-99): “In section 459 [of the Companies Act 1989 , the predecessor of section 994 of the 2006 Act ] Parliament has chosen fairness as the criterion by which the court must decide whether it has jurisdiction to grant relief. It is clear from the legislative history … that it chose this concept to free the court from technical considerations of legal right and to confer a wide power to do what appeared just and equitable. But this does not mean that the court can do whatever the individual judge happens to think fair. The concept of fairness must be applied judicially and the content which it is given by the courts must be based upon rational principles. [ … ] Although fairness is a notion which can be applied to all kinds of activities, its content will depend upon the context in which it is being used … So the context and background are very important. In the case of section 459 , the background has the following two features. First, a company is an association of persons for an economic purpose, usually entered into with legal advice and some degree of formality. The terms of the association are contained in the articles of association and sometimes in collateral agreements between the shareholders. Thus the manner in which the affairs of the company may be conducted is closely regulated by rules to which the shareholders have agreed. Secondly, company law has developed seamlessly from the law of partnership, which was treated by equity, like the Roman societas, as a contract of good faith. One of the traditional roles of equity, as a separate jurisdiction, was to restrain the exercise of strict legal rights in certain relationships in which it considered that this would be contrary to good faith. These principles have, with appropriate modification, been carried over into company law. [ … ] … Thus unfairness may consist in a breach of the rules or in using the rules in a manner which equity would regard as contrary to good faith.”

113. Later in his speech he dealt with the concept of legitimate expectation, and said (at 1102): “In In re Saul D Harrison & Sons Pic. [1995] 1 BCLC 14 , 19, I used the term ‘legitimate expectation,’ borrowed from public law, as a label for the ‘correlative right’ to which a relationship between company members may give rise in a case when, on equitable principles, it would be regarded as unfair for a majority to exercise a power conferred upon them by the articles to the prejudice of another member. I gave as an example the standard case in which shareholders have entered into association upon the understanding that each of them who has ventured his capital will also participate in the management of the company. In such a case it will usually be considered unjust, inequitable or unfair for a majority to use their voting power to exclude a member from participation in the management without giving him the opportunity to remove his capital upon reasonable terms. The aggrieved member could be said to have had a ‘legitimate expectation’ that he would be able to participate in the management or withdraw from the company. It was probably a mistake to use this term, as it usually is when one introduces a new label to describe a concept which is already sufficiently defined in other terms. In saying that it was ‘correlative’ to the equitable restraint, I meant that it could exist only when equitable principles of the kind I have been describing would make it unfair for a party to exercise rights under the articles. It is a consequence, not a cause, of the equitable restraint. The concept of a legitimate expectation should not be allowed to lead a life of its own, capable of giving rise to equitable restraints in circumstances to which the traditional equitable principles have no application.”

114. Finally, Lord Hoffmann dealt with the capacity in which the prejudice must be suffered. He said (at 1105): “In a case of expulsion, where the equitable restraint on the exercise of the power is based upon the terms upon which the petitioner became or continued as a member of the company, the prejudice will be suffered in the capacity of a member. It is the terms, agreement, or understanding on which he became associated as a member which generates the restraint on the power of expulsion. But the judge was considering only the prejudice suffered through not getting a half-share in the profits or the additional shares. It is somewhat unreal to deal with the capacity in which prejudice was suffered in these respects when there was no entitlement in law or equity in the first place. But assuming there had been a contractual obligation, I would not exclude the possibility that prejudice suffered from the breach of that obligation could be suffered in the capacity of shareholder … As cases like R & H Electrical Ltd. v Haden Bill Electrical Ltd [1995] 2 BCLC 280 show, the requirement that prejudice must be suffered as a member should not be too narrowly or technically construed. But the point does not arise because no promise was made.”

115. In Hawkes v Cuddy (No 2) [2008] BCC 390 , Lewison J crisply summarised the requirements under section 996 for a successful petition for conduct unfairly prejudicial in the following way: “202. It follows that for a petition to be well-founded the petitioner must establish that: (i) The acts or omissions of which he complains consist of the management of the affairs of the company; (ii) That the conduct of those affairs has caused prejudice to his interests as a member of the company and (iii) The prejudice is unfair.”

116. In fact, the decision of Lewison J was affirmed by the Court of Appeal (see [2009] EWCA Civ 291 ). Stanley Burnton LJ, with whom Moore-Bick LJ and Blackburne J agreed, said: “84. Mr Chivers also submitted that the judge wrongly took into account the matters to which he referred in paragraph 291(iii) and (iv) of his judgment. He submitted that only the effect on shareholders of Neath and the shareholdings in that company are relevant when the Court makes an order under section 996. I reject this submission. If upheld, it would mean that the interests of creditors of the company could not be taken into account. Their interests are clearly relevant, and may be decisive in deciding what order should be made under the section. I do not see why the court should close its eyes to the interests of others, and the effect of any order made under section 996 on them, although of course the weight to be given to their interests will depend on the circumstances …

85. It was suggested that on a petition under section 994 the court cannot award relief that the petitioner does not seek. In the present case, the correctness or otherwise of that proposition is academic, since ultimately, when it was apparent from the judge's judgment that Mr Hawkes would not be able to buy out Mr Cuddy, he agreed to the order proposed by the judge being made on his petition. On any basis, therefore, the judge had power to make the order he did. But I would not want it to be assumed that that proposition represents the law. The terms of section 996 are clear: once the court is satisfied that a petition is well founded, ‘it may make such order as it thinks fit’, not ‘such order as is sought by the petitioner’ … ”

117. In Re Coroin Ltd [2012] EWHC 2343 (Ch) , David Richards J (as he then was) considered a number of authorities on this jurisdiction, and said: “626. The purpose of the jurisdiction is to provide remedies in respect of the way in which the affairs of the company are conducted. It was perceived prior to the enactment of section 75 of the Companies Act 1980 that there was insufficient protection to shareholders in that respect. The section is not directed to the activities of shareholders amongst themselves, unless those activities translate into acts or omissions of the company or the conduct of its affairs. Relations between shareholders inter se are adequately governed by the law of contract and tort, including where appropriate the ability to enforce personal rights conferred by a company’s articles of association … I would only add that the refusal by a company to convene a general meeting would be an act of the company, although whether it was either unfair or prejudicial would of course depend on the circumstances. [ … ]

628. The Court will not adopt a technical or legalistic approach to what constitutes the affairs of the company but will look at the business realities …

629. … It no doubt goes without saying that the affairs of the company will also encompass matters which must go to the company in general meeting, rather than the board, for consideration.

630. Prejudice will certainly encompass damage to the financial position of a member. The prejudice may be damage to the value of his shares but may also extend to other financial damage which in the circumstances of the case is bound up with his position as a member. So, for example, removal from participation in the management of a company and the resulting loss of income or profits from the company in the form of remuneration will constitute prejudice in those cases where the members have rights recognised in equity if not at law, to participate in that way. Similarly, damage to the financial position of a member in relation to a debt due to him from the company can in the appropriate circumstances amount to prejudice. The prejudice must be to the petitioner in his capacity as a member but this is not to be strictly confined to damage to the value of his shareholding. Moreover, prejudice need not be financial in character. A disregard of the rights of a member as such, without any financial consequences, may amount to prejudice falling within the section.”

118. In Loveridge v Loveridge [2021] EWCA Civ 1697 , proceedings under section 994 were instituted by a son against his parents in respect of five family companies, as well as proceedings in relation to 3 partnerships. An earlier judgement concluded that the petition as originally formulated disclosed no arguable case. The parents now appealed against a decision of the judge to allow the petition to be amended. One issue that arose related to inter-company loans owed by the son’s company to two of the five family companies. Falk J (with whom Bean and Nugee LJJ agreed) said: “86. The judge found at paragraph 35 of his judgment that the Intercompany Loans are treated in the companies' accounts as amounts repayable within 12 months. Michael accepts that the Intercompany Loans are loans as a matter of law, and that no fixed date was agreed for their repayment. …

87. However, Michael's position is that there was a non-contractual understanding between the parties that the loans would remain outstanding ‘indefinitely’, that the benefit of the loans was received by him in his capacity as a shareholder in the lending companies and that the understanding was part of the basis on which he agreed to remain a member and to continue working for them. The threat to call the loans in, unaccompanied by an appropriate offer to buy him out, was prejudicial to him. …

88. The amended petition refers to an understanding between Michael, Ivy and Alldey that the loans would remain outstanding ‘indefinitely’. It goes on to say that the ‘only’ circumstance in which they would be repaid would be if all three agreed in pursuit of the business strategy. In other words the loans would remain outstanding unless and until the parties agreed otherwise. The one exception to this is that it was accepted in argument that the arrangement would not survive an insolvency, because it would not bind creditors. This exception is not reflected in the petition.

89. It is of course quite possible to enter into informal arrangements or understandings which fall short of a legal agreement, including an understanding that in certain circumstances one entity will not insist on enforcing its legal rights against another. …

90. However, even if Michael was correct that there was an understanding that the loans would be left outstanding, it does not follow that it is realistically arguable that that understanding was that the only circumstance in which the loans would be repaid would be if all the parties (in context, all the shareholders of Kingsford and Sales) agreed. Such an arrangement would be unworkable. … [ … ]

92. In my view by far the most plausible understanding would be one that accords with the terms of any debt without an agreed date for repayment, namely that either party can bring the arrangement to an end at any time. In other words, the arrangement lasts for so long as the parties are in agreement that it should. If this was not correct then in my view the only realistic alternative would be that any understanding that the debt would not be required to be repaid immediately was one that existed in the then prevailing circumstances, and would be understood not to survive any material change of circumstances. [ … ]”

119. A point also arose about whether the son could claim that his desire to leave the business on a breakdown in relations could amount to unfairly prejudicial conduct within section 994 . As to this, Falk J said: “117. However, at pp.1104-1105 [of O’Neill v Phillips ] Lord Hoffmann also made it clear that a breakdown in relations, including where there has been a loss of trust and confidence, is not sufficient to found an unfair prejudice petition where (as on the facts of that case) there has been no exclusion from management. There was no right to exit ‘at will’ where trust and confidence has broken down. Lord Hoffmann also doubted whether a dissolution would even be granted under partnership law if there was no exclusion from management and the business could be continued.”

120. In considering the relief to be granted, if a claim is made out, the court may order the company to repay money owed to the petitioner. In R & H Electrical Ltd v Haden Bill Electrical Ltd [1995] BCC 958 , R & H (controlled by Mr Pitt) lent money to Haden Bill when it was incorporated by way of working capital, and Mr Pitt became a 25% shareholder and also chairman of the new company. Eventually Mr Pitt fell out with other shareholders, who removed him as chairman and a director of Haden Bill. He presented a petition under section 459 of the then Companies Act in respect of conduct unfairly prejudicial to his interests. Robert Walker J held that this was made out.

121. As to relief, the judge said (at 295): “Had the position been considered and discussed between the majority shareholders and Mr Pitt in February 1994, I think the solution likely to have emerged, and a fair solution, would have been that Mr Pitt should cease to be chairman and a director of Haden Bill, that his shares should be bought by the majority shareholders without a discount for its being a minority holding, and that R & H's loans to Haden Bill should be repaid as soon as reasonably possible (either by refinancing or out of retained profits, but in any event substantially sooner than if the minimum instalments fixed by the deed of 5 April 1993 had continued). I will make an order under s 461 on those general lines, but I will refrain from any further definition until the parties have had the opportunity to consider this judgment and see whether they can agree on the details, or alternatively formulate what detailed points on the form of the order are in dispute. But the valuation should (as both sides have already invited me to direct) be made as at 1 February 1994 (or some other convenient date close to 1 February), taking account of the terms for the repayment of R & H's loans ultimately agreed or directed (and any consequent strain on Haden Bill's cash flow), but otherwise without the benefit of hindsight (especially as to Haden Bill's litigation costs incurred from March 1994).” Unjust enrichment

122. It is now well established that English law recognises the concept of unjust enrichment as the basis for a claim in law. In Investment Trust Companies v HMRC [2018] AC 275 , SC, Lord Reed (with whom all the other judges agreed) referred to “24. … the approach adopted by Lord Steyn in Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221 , 227, [which] asked: (a) Has the defendant been benefited, in the sense of being enriched? (b) Was the enrichment at the claimant’s expense? (c) Was the enrichment unjust? (d) Are there any defences?”

123. Later in his judgment, Lord Reed said: “40. … Although judicial reasoning based on modern theories of unjust enrichment is in some respects relatively novel, there are centuries’ worth of relevant authorities , whose value should not be underestimated. The wisdom of our predecessors is a valuable resource, and the doctrine of precedent continues to apply. The courts should not be reinventing the wheel.

41. … Lord Steyn’s four questions [in Banque Financière de la Cité ] are no more than broad headings for ease of exposition. They are intended to ensure a structured approach to the analysis of unjust enrichment, by identifying the essential elements in broad terms. If they are not separately considered and answered, there is a risk that courts will resort to an unstructured approach driven by perceptions of fairness, with consequent uncertainty and unpredictability. At the same time, the questions are not themselves legal tests, but are signposts towards areas of inquiry involving a number of distinct legal requirements …

42. The structured approach provided by the four questions does not, therefore, dispense with the necessity for a careful legal analysis of individual cases. In carrying out that analysis, it is important to have at the forefront of one’s mind the purpose of the law of unjust enrichment. … it is designed to correct normatively defective transfers of value, usually by restoring the parties to their pre-transfer positions.”

124. In my judgment, the last sentence of paragraph 42 of Lord Reed’s judgment is both clear and important. The law of unjust enrichment is not designed to reverse otherwise unimpeachable gifts. And, as Lord Reed says at paragraph 24 of his judgment, “ centuries’ worth of relevant authorities … should not be underestimated”. Thus, in Ogilvie v Littleboy (1897) 13 TLR 399, a wealthy widow decided to devote a large part of her fortune to charity, and eventually executed a number of deeds for that purpose. Later she came to regret what she had done, and she brought an action to have the deeds set aside. At first instance Byrne J dismissed her action. She appealed.

125. On the appeal, Lindley LJ said (at 400): “Gifts cannot be revoked, nor can deeds of gift be set aside, simply because the donors wish they had not made them and would like to have back the property given. Where there is no fraud, no undue influence, no fiduciary relation between donor and donee, no mistake induced by those who derive any benefit made by it, a gift, whether by mere delivery or deed, is binding on the donor … In the absence of all such circumstances of suspicion, a donor can only obtain back property which he has given away by showing that he was under some mistake of so serious a character as to render it unjust on the part of the donee to retain the property given to him”.

126. The appeal was dismissed, as was a further appeal to the House of Lords ( sub nom Ogilvie v Allen (1899) 15 TLR 294), where the House agreed with the judgment of Lindley LJ in the Court of Appeal. In the case of a gift, there is usually no doubt that the donee has been enriched, and at the expense of the donor too. But that enrichment is not unjust where the gift cannot be impugned on any basis known to the law. In modern parlance, the transfer is not “normatively defective”.

127. On the other hand, suppose a legally binding agreement between three victims of a wrong, A, B, and C, that compensation paid to any of them by the tortfeasor should be equally shared with the others. Compensation of £9,000 is afterwards paid to A, which A duly shares with B and C (£3,000 each). Then suppose that compensation of £6,000 is later paid to B, which B does not share with A or C. Both A and C have a claim against B for breach of contract. Each claim is worth £2,000. It is true that A (unlike C) has already paid money (£3,000) to B under the contract. But the breach of contract by B does not entitle A to claim in unjust enrichment, to recover the £3,000 which A paid to B earlier. It is not a case of “failure of basis” (formerly known as “failure of consideration”), because the contract has in fact been made, and, being valid and unimpeachable, it is that which governs the relationship between the parties: Barton v Morris [2023] AC 684 , [96], [189], [226]. Resulting, implied and constructive trusts General

128. Trusts are of several kinds. Express trusts are those intended by their makers, and expressed by them, either by words or (sometimes) actions. Other trusts are not intended to be created, but are imposed by the law for some sufficient reason. They are usually referred to as trusts by operation of law. The standard categories are those referred to in section 53(2) of the Law of Property Act 1925 . This re-enacted with amendments section 8 of the Statute of Frauds 1677, which referred to trusts which “shall or may arise or result by the Implication or Construction of Law”. The modern subsection simply provides that the formality requirements for trusts set out in section 53(1) of the 1925 Act shall “not affect the creation or operation of resulting, implied or constructive trusts”. I will say something about each of these categories as they are now understood. Resulting trusts

129. The books and some of the authorities say that there are two kinds of resulting trust. One is the presumed resulting trust, which is divided into two sub-types, that is: (a) purchase where the price is paid by another and (b) gratuitous conveyance. They both involve the idea that, if A transfers property to B without saying whether B takes beneficially or as a trustee, you have to look at the available evidence to decide which it is. If there is none, there are certain presumptions to be applied. The second kind of resulting trust is the automatic resulting trust. If A transfers property to B on an express trust, but does not exhaust the beneficial interest, whatever is not the subject of the express trust results (said to come from the French ressauter , jump back) to the settlor. More correctly, in fact, the settlor’s interest in fact never leaves him or her : see Commissioner for Stamp Duties v Perpetual Trustee Co Ltd [1943] AC 425 , 441, per Lord Russell of Killowen. Implied trusts

130. The term “implied trust”, however, is ambiguous. Sometimes it means implied in fact , a case where you gather the intention to create the trust from the surrounding circumstances rather than from any particular words used. In the categorisation already used, this is a kind of express trust. It is in fact one intended by the maker , but just not clearly articulated. It is implied in fact , rather than by law . This was a view put forward, for example, in Lewin on Trusts , 4 th ed, 1861, and in many editions of that work thereafter.

131. However, sometimes it indeed means a trust imposed by law . On this view, “implied” means “imposed” irrespective of the parties’ intentions. Lord Nottingham LC referred to this sense of the word in Cook v Fountain (1676) 3 Swans 585, where he said (at 592): “All trusts are either, first, express trusts, which are raised and created by act of the parties, or implied trusts, which are raised or created by act or construction of law … ”

132. However, at the date of this case, the bill which became the Statute of Frauds 1677 had not yet been passed. At that stage, no trusts had any formalities requirements. Therefore, the distinction between trusts which required formalities and those which did not had no statutory basis. So, as Lord Nottingham said, he made these distinctions for a different reason, that is, because he held it “necessary to lay down some rules and distinctions touching trusts, which I must keep to and by which I must govern myself in all cases whatsoever”. The following year the Statute of Frauds (which Lord Nottingham had helped to draft) was enacted, and formalities rules, and exceptions to them, became part of the law of trusts.

133. The two different meanings of “implied trust” require care to be taken in using that expression. But it may be supposed that, in the context of section 53(2) at least, “implied” must mean “implied in law ”. Otherwise, the function of section 53(2) would be capricious. It would do away with the need for formalities for those express trusts where they were most needed, that is, where the intention of the parties was not clearly expressed in words, and so the intention is implied in fact . Constructive trusts

134. Constructive trusts are of different kinds. The kinds that are relevant here are two: common intention constructive trusts (or proprietary estoppel) and Pallant v Morgan equities (sometimes called joint venture constructive trusts). For a common intention constructive trust to arise, the parties must have had a common intention to share the property beneficially, upon the faith of which the claimant then acts in reliance to his or her detriment. The common intention may be either expressed between them, as when they have a discussion and reach a conclusion, or it may be inferred from the whole course of conduct between them: see Lloyds Bank v Rosset [1991] 1 AC 107 , 132. However, even when it is inferred, it still represents the court's conclusion as to what the parties actually intended: see eg Stack v Dowden [2007] 2 AC 432 , [61]. The court has no power to impute an agreement or common intention to the parties based on what it considers would have been fair or reasonable. Once the common intention is established, the question is whether the conduct of the claimant in relying on the common intention to her detriment makes it unconscionable for the defendant to renege on that agreement: see Culliford v Thorpe [2018] EWHC 426 (Ch) , [76].

135. The moral structure of the common intention constructive trust is in substance identical to that of the earlier doctrine of proprietary estoppel , from which it appears to have sprung in Gissing v Gissing [1972] AC 886 , HL. One person (A) either promises or reasonably induces in another (B) the expectation that B shall have an interest in property belonging to A. It is not an ordinary representational estoppel. A does not represent that B is the owner of the asset concerned. Instead, A leads B to believe that B will become the owner in the future. Yet it is not a contract either, because no consideration is sought or provided (and, even if so, any formality requirement is not fulfilled). But there is a common intention (whether actual or by estoppel) that that shall happen. Being intended so to rely, B then relies on the promise or expectation to his or her detriment. If the court holds that it is unconscionable for A not then to perform the promise or make good the expectation, the court may in its discretion so order.

136. The Pallant v Morgan equity is named after the decision in Pallant v Morgan [1953] Ch 43 . In that case the parties (neighbouring landowners) were both concerned to secure a particular piece of land which was up for auction. Pursuant to an agreement before the auction that if the defendant was successful the parties should divide the land in a certain way, the plaintiff did not bid, and the defendant was successful. However, the defendant then refused to divide the land as agreed. Harman J held that it would be a fraud for the defendant to retain all the land. The bid was on behalf of both, and the defendant held the land on trust according to the agreement. In truth, it was what might nowadays be described as a proprietary estoppel on a contingency . It was a promise by the defendant to divide up land if obtained by him in the future between the parties on the basis that the plaintiff had acted to his detriment in not bidding for it.

137. Snell’s Equity , 35 th ed, 2025, says (footnotes omitted): “24-039. A Pallant v Morgan equity typically relates to specific property that is not at first owned by either of the parties, A or B. A and B form a common intention that A will take steps to acquire the property; and that, if A does so, B will obtain some interest in it. … The common intention need not be recorded in writing, but its main terms must be agreed between the parties. The equity cannot arise where the agreement is expressed to be subject to contract, or where A and B realise that their agreement is legally unenforceable because they plan to enter into a binding agreement in the future. 24-040. In reliance on A’s assurance or B’s expectation that B would acquire an interest in the land, B then does something which confers an advantage on A in acquiring the property or which is detrimental to B’s ability to acquire it on equal terms. … The effect is that it would then be unconscionable for A to keep the property for itself. But A does nothing unconscionable if he resiles from an agreement that was expressed to be subject to contract or which both parties realised was not legally binding between them. … 24-041. The effect of the equity is that A becomes bound by a constructive trust to prevent him from benefiting by his unconscionable breach of the agreement. … ”

138. Although Pallant v Morgan equities are typically argued to arise in relation to real property, I am not aware of any authority deciding that they are restricted to such cases. In principle, there seems no reason why Pallant v Morgan equities, being based on a form of proprietary estoppel, should not also arise in relation to personalty, just as proprietary estoppel cases may involve claims in respect of personalty: see eg Re Foster (No 2) [1938] 3 All ER 610 (insurance policy); Pinfield v Eagles [2005] EWHC 477 (Ch) (company shares); Fisher v Brooker [2009] 1 WLR 1764 , HL (copyright). THE PARTIES’ CASES AT TRIAL Petitioner

139. Although the parties produced very helpful detailed written closings, and oral arguments to support them, it will help the reader of this judgment if I set out a summary of the parties’ positions at trial. First I consider that of the petitioner himself. I take the following from the his skeleton argument for trial (slightly abbreviated): “13. It is common ground that: 13.1. the Companies are a quasi-partnership, and hence that Richard has a legitimate expectation of being involved in their management; 13.2. Richard has been removed from his directorships, and that he and Julie have been stopped from working for the business; 13.3. Richard (and his family) have not been receiving various payments and valuable benefits received by other Shareholders (or their families).

14. Richard’s case is that he has been treated in a manner which is unfairly prejudicial to him as a shareholder in relation to the conduct of the affairs of the Companies by being prevented from participating in: 14.1. the management of the business; and 14.2. the receipt of valuable benefits from the Companies in circumstances in which the Companies have never paid dividends, and the only way in which Shareholders have benefited is through these benefits.

15. There are two main themes to the unfair prejudice. The first is the management of the Companies by Nigel. It is common ground that, following David’s death, Nigel became responsible for administration of the Companies, whilst Richard has always carried out the practical aspects of the farming business. Richard’s case is that Nigel is a dominant personality who became increasingly autocratic and used his influence over other Shareholders and directors to marginalise Richard.

16. The second is the financial position of the Companies. Company A borrowed substantial sums of money to enable it to purchase the Farm. Richard (and the other Shareholders) have supported its borrowing through personal guarantees.

17. The Brothers and their wives each individually received substantial compensation because of the fraud. In the period to April 2023 Richard and Julie lent c.£1.8m of this money to Company A by paying money to Company A when asked to do so. The terms on which this money was provided to Company A is a matter of dispute between the parties.

18. Matters came to a head in April 2023. It is Richard’s case that he was already being excluded from the management of the Companies, but it was the fact that he and Julie were forever being asked for more and more money, coupled with the failure of the Respondents to provide information to Richard to explain how the money had been used, which contributed to the breakdown of relations between the parties in April 2023.

19. Whilst some of the events of April 2023 are in dispute, it is not in dispute that in April 2023, at Jane’s request, the Companies’ accountants sent documents to Richard to terminate Richard’s directorship. Richard did not sign the documents. The parties instructed solicitors. Richard (through his solicitors) sought to negotiate an amicable exit, whilst making it clear that he considered that he had been excluded from the management of the Companies and pushed out.

20. The negotiations failed. Meanwhile, the Respondents made life increasingly difficult for Richard (and Julie). They were locked out of the Farm and the building in which Julie worked, and were denied access to the meat store. On 14 September 2023 the Respondents caused all of the companies to send notices to Richard of general meetings on 17 October 2023 for the termination of his directorships. His directorships were duly terminated. On 18 September 2023 the Respondents caused Company A to send letters to Richard and Julie terminating their employing contracts with effect from October 2023. (The Respondents now allege that Richard and Julie were not in fact employed by Company A).

21. During the summer of 2023 Richard continued to work on his home, Wagtail House, a property owned by Company A. However, in July 2023 Nigel directed that no further work was to be carried out by contractors, leaving Richard and Julie to live in an unfinished building.

22. Following the termination of their employment, Company A stopped paying Richard and Julie the (modest) weekly wages which they had been paid, along with other expenses such as their utility bills and council tax. Company A continued to pay these things to or for other members of the Morgan family (whether or not they were Shareholders or worked for the business).

23. The Respondents now allege that the payments made to Richard and Julie were not payments of salary (as they had previously been led to believe) but instead were (partial) repayments of the loans by Richard and Julie to Company A. Richard and Julie dispute this. However, if it is true, the cessation of payments is unfair to Richard (as a shareholder) in circumstances in which, according to the Respondents, he is not entitled to be repaid his director’s loan (whereas they are entitled to be repaid theirs).

24. In June 2024 each of the Brothers and the Wives (or their estates) received further payments of compensation of £3m each, save (it seems) for David’s estate. According to Jane, she (on behalf of David’s estate) has elected to pursue a claim for greater compensation than the fixed sum of £3m which was offered. This is put forward by Jane as the basis for a contrived counterclaim against Richard and third party claim against Julie. Directors’ loans

25. The terms on which Richard (and Julie) have lent money to Company A have assumed critical importance as a result of recent developments. At the time of the presentation of the Petition, the most recent published accounts for Company A (for 2022) showed it to have net assets worth more than £7m … taking into account amounts owed to directors under directors’ loans totalling over £4m … Richard claimed that he and Julie had lent Company A c.£1.8m, and sought relief that his Shares be purchased on the basis that Company A repaid these loans (and that he be released from other personal liabilities). The Respondents initially denied that Richard and Julie had lent £1.8m to Company A, and contended that the amount of the loans from them (though not repayable) was c.£844k, supported by a spreadsheet …

26. Following the obtaining of expert valuation evidence, it became apparent that the value of Company A’s assets had been vastly overstated in the 2022. The accountancy experts agree that, assuming the directors’ loans are repayable, the value of Company A is nil.

27. Meanwhile, the Respondents served an amended Defence in April 2025, contending for the first time that, although the directors’ loans are loans, they are repayable only (i) at the absolute discretion of Company A (if and when Company A has sufficient funds to make such repayments) and (ii) to all lenders in the same proportion or amount. To all intents and purposes these alleged terms would mean that the loans are not repayable. The opinion of Mr Shelton (Richard’s expert) is that, if so and assuming the balances on the loan accounts shown in the accounts are correct (which is in dispute), the value of Company A would be £3,218,197 (and Richard’s Shares £804,549) …

28. It is submitted that Mr Shelton’s opinion accords with common sense. The Respondents cannot have it both ways. Either the directors’ loans are repayable or they are not. If they are repayable, then the value of the Shares will be nil, but Richard will have established an entitlement to be repaid his loan; if they are not repayable, then the value of the Shares will be substantial, and a buy-out order should be made on that basis.

29. In April 2025 the Respondents also served a revised version of their DLA analysis … containing a number of material changes from the version previously supplied (on which the Defence had been based). Amongst other things, the amount of the loans from Richard (and Julie) had reduced to £656k, whilst payments to other family members were shown as loan repayments to the Brothers/Wives … ” The Act ive Respondents

140. I take the following summary from the skeleton argument of the Act ive Respondents for the trial, which I have slightly abbreviated: “14. As set out in their ADefC, … the Act ive Respondents entirely reject all allegations of unfair prejudice and deny that Richard is entitled to any relief, in circumstances where: 14.1. From latest April 2023, Richard has repeatedly communicated his desire to leave the business for personal reasons – Richard's initial communication (via Julie to Jane) in April 2023 that he wished to leave the business came little over 5 weeks after the family had received news that they were to be awarded a further £3.75m each of compensation from a scheme set up for victims of the HBOS Reading fraud – in fact, in hindsight, this desire was manifest some time earlier in April 2022 when Richard decided to cease working with the livestock on the farm but to concentrate on house renovations; 14.2. Contrary to the terms of the Quasi-Partnership, Richard had refused to contribute to the family business and the Companies through (a) from latest July 2023 failing to contribute his labour; and (b) from latest September 2023 refusing to contribute his share of funding; 14.3. In the circumstances, Richard had made it clear that he intended to sever all links with the Companies and take the value of his shareholding with him and went on to exclude himself; 14.4. Moreover, to the extent he was subsequently excluded, he brought his removal on himself by conduct that objectively justified his exclusion (including, in particular, his ceasing to contribute to the business), and such conduct was sufficiently serious to undermine, and has undermined, the basis of any equitable considerations or constraints that might otherwise have bound the parties; and 14.5. Accordingly, to the extent that Richard was ever involuntarily excluded from the affairs of the Companies any such exclusion was not unfair.

15. In any event, the Act ive Respondents have consistently maintained throughout that the Companies are worth very little. This has now been confirmed by both Richard and the Act ive Respondents’ experts, who agree that, in the absence of the application of certain (on the Act ive Respondents’ case unwarranted and impermissible) assumptions proposed by Richard, the Companies, and, accordingly, Richard’s interests in them, are worth £nil … ” Jane’s counterclaim

141. I take the following summary of the counterclaim from the Act ive Respondents’ skeleton for trial (slightly abbreviated): “16. In addition, … Jane counterclaims against Richard and Julie: 16.1. £833,232.50 (i) in debt or damages for breach of an agreement to share any compensation received in respect of a substantial fraud perpetrated by the businesses’ then bankers, HBOS Reading (the ‘ HBOS Fraud ’) (the ‘ Compensation-Sharing Agreement ’ as further described below) or (ii) on the basis that they hold such sum on a Pallant v Morgan constructive trust in favour of Jane; or in the alternative 16.2. £236,500 by way of a restitutionary claim on account of the unjust enrichment of Richard and Julie.

17. The Act ive Respondents contend that, in anticipation of receipt of compensation payments from Lloyds Banking Group (‘ LBG ’) … and the Foskett Panel … Nigel and Lynn, Richard and Julie, Colin (on his own behalf and that of Angela’s estate) and Jane (similarly on her own behalf and that of David’s estate) entered into the Compensation-Sharing Agreement whereby: 17.1. Any compensation received in respect of the HBOS Fraud would effectively comprise money to compensate the family business and should be used to rebuild the business, and provide working capital, as and when needed; 17.2. Before needed by the business, any such monies should be shared equally between the individual family members (with the effect that, in the event that any party received a greater sum of compensation or received amounts substantially ahead of any other party, they all agreed to share such compensation in such a way as to ensure that at any particular time all parties had received an equal share of compensation in consideration for the agreement of every other party, upon receiving a compensation payment, similarly to share such compensation in such a way as to ensure that at any particular time all parties had received an equal share); and 17.3. When there was a requirement to inject monies into the business, monies should be contributed in equal proportions.

18. Until Richard and Julie failed to do so in respect of their Fixed Sum Awards in 2023 (i) Nigel and Lynn, (ii) Richard and Julie, (iii) Colin, and (iv) Jane duly shared their compensation payments with one another and made contributions pursuant to the Compensation-Sharing Agreement. The documentary record shows as much, and Richard and Julie accept that this was the case for the compensation payments received in 2020 (albeit they deny that this was done in accordance with the Compensation-Sharing Agreement) … In the circumstances the Act ive Respondents contend that, following receipt of the Fixed Sum Awards by Colin, Nigel, Richard, Jane, Lynn, Julie and Colin on Angela’s behalf, but not Jane on David’s behalf because David’s claim remained yet to be determined, to ensure that, pending determination of David’s claim, each of them had received equal amounts of compensation, each of (i) Nigel and Lynn, (ii) Richard and Julie, (iii) Colin, were obliged to pay to Jane the sum of £833,232.50.

19. However, in breach of the Compensation-Sharing Agreement, Richard has, or, in the alternative, Richard and Julie have, refused to share with the family or contribute to the business any of the £3.75 million received by him, or, in the alternative, any of the £7.5 million received by them. In the premises, Richard is, or in the alternative, Richard and Julie are, indebted to Jane in the sum of £833,232.55 and Jane counterclaims such amount.” The Part 20 defendants

142. I take the following from the petitioner’s and third party’s skeleton argument for trial (slightly abbreviated): “68. As flagged above, the Counterclaim/Part 20 Claim is a tactical contrivance, evidently designed to act as a counterweight to Richard’s claim that the loans from himself and Julie are repayable on demand and fall to be taken into account in the relief granted under s.996.

69. The claim is based upon the alleged ‘Compensation Sharing Agreement’, which itself is a contrivance. Whilst there are issues of fact which will be explored at trial, it is submitted that the Respondents’ pleaded case does not establish the existence of a legally enforceable agreement, for the reasons set out in the Amended Reply. There is no suggestion that any such agreement was expressly entered into; the requirements for an implied agreement or an agreement by conduct are not satisfied.

70. Informal discussions between the parties about what they intended to do with the compensation that they were due to receive are not sufficient to give rise to a legally enforceable agreement.

71. There is also no consideration for any such agreement. As far as can be understood … the Compensation Agreement was entered into after the claims for compensation had been initiated, and so the making of those claims cannot be the consideration, nor can the receipt of the compensation pursuant to those claims be the consideration.

72. Whilst it is accepted that Jane shared her compensation with the other Wives, it does not follow from this that she was under a legally enforceable obligation to do so. No doubt the Wives came under an obligation to reimburse Jane when they received their compensation, but they duly reimbursed her and so that has no continuing relevance. It is the act of Jane sharing the compensation which gave rise to that obligation, not Jane’s initial receipt of the compensation.

73. The decisions of Jane (not to accept the Fixed Sum Award for David, and instead to pursue a claim for greater compensation) and of Nigel and Colin (to share part of their Fixed Sum Awards with Jane, in June 2024) were matters which arose after this dispute had arisen and (it seems) after the termination of Richard’s directorship and the employment of Richard and Julie, without the involvement, let alone agreement, of Richard and Julie. They cannot give rise to some form of contractual obligation on the part of Richard and Julie. … As far as Jane’s case is understood, had she elected to accept the Fixed Sum Award for David, she would have no claim for a contribution against Richard and Julie. So, Jane’s claim derives from her (unilateral) decision not to accept the Fixed Sum Award, and not from the actions of Richard or Julie.

74. To put that another way, by contrast with the position in which Jane shared her initial compensation with the other Wives, Jane’s claim is not for reimbursement of money which she has shared with Richard and Julie. There has been no triggering event to give rise to an obligation on the part of Richard or Julie to reimburse Jane.

75. A further curiosity of the Counterclaim/Part 20 Claim is that, logically, if David’s claim for compensation is successful, Jane (as David’s representative) would come under an obligation to share that compensation with Richard and Julie. If David’s claim succeeds in a sum greater than the Fixed Sum Award, then it would seem that the amount due from Jane to Richard and Julie would be greater than the sum now claimed from them. This point has been raised in their Defence but ignored by Jane in her Reply.” APPLICATION OF LAW TO FACTS Richard’s claim

143. Although it was impliedly agreed that each brother would work in the business to the extent that he was able, I have found that there was no agreement by the brothers, whether as part of the quasi-partnership or otherwise, obliging them to contribute financial support to the Companies. Despite this, I have found that, by June 2022, Richard and Julie had, at the company’s request, lent about £1.78 million to SMS. I have also found that there was no agreement binding Richard and Julie to share their compensation with any other member of the Morgan family. Nor was there any agreement for a joint venture amongst family members to share any compensation paid to any of them. I have also found that the loans made to SMS were not subject to the implied terms argued for by the Act ive Respondents, but instead were repayable on demand. The Braganza principles (referred to above) do not apply, because I have found that there were no terms to be implied of the kind argued for by the Act ive Respondents.

144. In addition, I have found that Nigel refused to supply financial information about the businesses to Richard, and did not consult him in relation to a number of significant business decisions, although Richard was a director of both SMS and SMSL. He also caused SMS to expend monies on significant benefits for his son Robert. I have also found that Nigel caused SMSL to acquire 80% of Mutchmeats Ltd despite Richard’s opposition, and further represented him as being present at the relevant meeting and in favour of it, although he was neither. He also formed and carried a plan to force Richard to resign his directorships or remove him from them. By April 2023, therefore, Nigel (with the complicity of the other Active Respondents) was in effect excluding Richard from the business.

145. I have also found that, since Richard’s exclusion from the business, there has been a total breakdown in relations between Richard and his immediate family on the one hand, and the rest of the Morgan family at the farm on the other. Indeed, the former have now moved away from the farm. I have also found that Richard did not wish, and did not express the wish (neither did Julie on his behalf), to leave the family business, before his solicitors’ letter of 6 June 2023, in which he accepted that, in the circumstances, there would have to be a negotiated exit by him. Even at that stage, however, he did not resign, or agree to resign, from his directorships. He was removed from these on 17 October 2023 by the actions of the Act ive Respondents, instigated by Nigel.

146. Additionally, I have found that until the summer of 2023 Richard and Julie worked as employees of SMS for the family business (he on Wagtail House, the property of SMS, she in the meat-packing business of FFF2), until they were prevented from doing so by the Act ive Respondents. They were then given notice of dismissal by SMS in September 2023 to take effect at the end of October 2023. During their employments they were paid (modest) weekly sums, which I have held to be wages for their work, and not to amount to repayments of the loans that they made to SMS. Even if Richard and Julie had not been employees, they would still have lost their work, and the remuneration that went with it.

147. In my judgment, Richard has been prevented, from before April 2023, but certainly after then, by the Act ive Respondents from participating in the management and operation of the Companies. He has been excluded by them from the farm, and prevented by the Act ive Respondents from receiving the weekly sums of money and other valuable benefits available to other shareholders and their families. These are all matters caused by the Act ive Respondents, and, in my judgment, operating to prejudice the interests of Richard as a shareholder in the companies, taken broadly. I accept that physical exclusion from the farm and the financial benefits came later in the day. But these ultimately flowed from Richard’s (justified) assertion of his rights to financial information and to be consulted about management of the companies. The question then is whether this conduct prejudicial to his interests is unfair . It is submitted by Richard that in a quasi-partnership case, the burden will lie on the respondents to show that it was not unfair.

148. In my judgment, it is not necessary for me to resolve this question, because I am positively satisfied that in this case it is unfair. Richard was not obliged to contribute financial support to the business, although he and his wife had voluntarily loaned very large sums to SMS. This was a quasi-partnership, and he wanted to participate in management, but was prevented from doing so. Not only that, but he was being asked to contribute further funds, over which he would have no control. His refusal to sign the bank mandate form for FFF2 until he was given financial information could not justify removing him as a director. It was his exclusion from management and information that led Richard to accept that he had no choice but to negotiate an exit from the business. He had no wish to do that before the letter of 6 June 2023. He and Julie nevertheless did continue to work for the business even after that date, until they were prevented from doing so by the actions of the Act ive Respondents.

149. In my judgment, the unfairness was not minimal, but instead substantial. I do not think that Richard’s subsequent failure to return the three motor vehicles until litigation was brought makes any significant difference to this conclusion, or to the relief that may be ordered. Accordingly, in my judgment it is appropriate to grant relief to Richard under section 994 . As already stated, the petition seeks an order that the Act ive Respondents purchase Richard’s shares from him at fair value, that SMS repay the loans made by Richard and Julie, and that SMS procure the release of Richard from any liability under personal guarantees of debts of SMS. I discuss below the relief which I consider should be ordered in this case. Counterclaim

150. As to Jane’s counterclaim, on the facts I have found, this fails under each of its three limbs, breach of contract, constructive trust and unjust enrichment. As to the first, there was simply no contract as alleged. As to the second, the factual basis for a constructive trust was not established. Nor, thirdly, was there any unjust enrichment, but, if there had been a contract, that would have governed the situation, rather than principles of unjust enrichment. The counterclaim will therefore be dismissed. Relief sought

151. As to the relief sought, in my judgment it would prima facie be appropriate to order that Richard’s shares be bought out at a fair value, assuming that they have any. In circumstances where Richard and his family are exiting the family business, it is also appropriate to provide a “clean break” between Richard and his immediate family and the rest of the Morgan family at the farm. However, on the evidence I have accepted, since the loans are repayable, on demand and in full, that value is £Nil. In my opinion, the “clean break” means, first of all, that SMS must pay back Richard’s existing director’s loan account (the funds for which came from Richard and Julie’s joint bank account, which belonged to both of them). Since there appears to be a dispute as to how much was paid, and how much (if anything) has been repaid, there must be an inquiry into this question, which I will order to be conducted hereafter by a district judge. However, the Act ive Respondents admit a minimum balance of £656,111.98 as at 31 January 2025. I will therefore order that sum to be paid on account.

152. The “clean break” also means that SMS must use its best endeavours to procure the release of Richard from any liability under personal guarantees of debts of SMS, if need be by supplying alternative security, and must indemnify Richard against any liability arising under such guarantees so far as he is not released. Once the loans have been repaid to Richard (and Julie), the Act ive Respondents must buy Richard’s shares at fair value, which will depend on what is left of the value of the company after the loans have been repaid. If that is disputed, it too must be decided by a district judge at an inquiry. I consider that, if the companies have any value at that stage, Richard’s shares should be valued without making any discount for the fact that he has a minority shareholding. This is because Richard did nothing to deserve his exclusion from the Companies, and he did not wish to leave otherwise. He should not be treated as a willing seller. Jointly owned properties

153. Earlier in this judgment I refer to a small number of properties which were owned jointly by the brothers, rather than by the Companies. They are not affected by this petition. If the parties cannot agree what should be done with them, then any question arising can be dealt with under the usual rules for the co-ownership of land, under the Trusts of Land and Appointment of Trustees Act 1996 . CONCLUSION

154. For the reasons given above this petition succeeds, and the counterclaim is dismissed.