The defendants were members of a private limited company holding 75 per cent of its share capital. The applicant held 21 per cent. The articles gave her a right of pre-emption should the defendants wish to sell their shares. The articles exempted certain permitted transfers. She claimed that the agreement to sell the shares demonstrate an intention to sell which gave her the exercise her right of pre-emption. Once the sale agreement became unconditional, it vested the equitable interest in the shares in the purchaser. Nevertheless, the documents had carefully avoided a transfer of the legal title, and provided that the shares should not the required to be transferred in contravention of any pre-emption rights. The possibility that the shares might have been required to be transferred to a permitted transferee was enough to preclude the defendant from having the requisite intention. The court emphasised that there was no general principle to be discovered, but that each case was entirely dependent upon the facts and wording of the documents.
Citations:
Times 09-Feb-2001
Jurisdiction:
England and Wales
Citing:
Appeal from – In Re Sedgefield Steeplechase Co (1927) Ltd; Scotto v Petch and Others ChD 10-Feb-2000
Agreements were put in place for the sale of shares, but pre-emption rights would, if triggered have required notices to be serve. Only a contractual provision which created an obligation to transfer shares in breach of the articles would trigger . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 08 May 2022; Ref: scu.89070