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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Pennington & Anor v Waine & Ors [2002] EWCA Civ 1587 (17 October 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1587.html Cite as: [2002] EWCA Civ 1587

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(His Honour Judge Hegarty and
His Honour Judge Maddocks)

		Royal Courts of Justice Strand London WC2 Thursday, 17th October 2002

LORD JUSTICE MUMMERY:

1. There are before the court applications in two different sets of proceedings, both of which arise out of the events surrounding the death of Ada Crampton.
2. The background to both cases is this. A company called Crampton Bros (Coopers) Limited was incorporated in June 1958. It was a family company. At the time of the relevant events there were 2000 issued shares in the company. 1500 of those shares belonged to Ada Crampton and the remaining 500 to her brother-in-law, Harold Crampton Senior. Ada Crampton died on 19th November 1998. She had made a will on 10th November 1998, appointing executors and bequeathing 1100 shares: 480 to a nephew, Philip Waine, by clause 3(e) of the will; and 620 to Harold Crampton Junior, by clause 3(f) of the will. In the weeks before her death she had executed a stock transfer form dated 12th October 1998. The subject of the transfer form was a gift of 400 shares in the company to Harold Crampton Junior. Probate of the will was granted on 28th May 1999. On 7th June 1999 the executors, to whom probate had been granted, registered themselves as holders of 1500 shares.
3. Against that background of Ada Crampton's death, it is also necessary to refer to the articles of association of the company, which provide that:

"Subject as hereinafter provided, the regulations contained or incorporated in Part II of Table A in the First Schedule to the Companies Act, 1948 ... shall apply to the Company."

The provisions of article 8 deal with the transfer of shares, conferring rights of pre-emption, in particular paragraph 8(A) and (B). The provisions concerning the transmission of shares are those contained in regulations 29 to 32 of Table A, subject to an amendment expressly made by paragraph 9.

4. The interplay between the transfer of the 400 shares by the stock transfer form of 12th October 1998, the bequests of the remaining 1100 shares by the terms of the will and the provisions in the company's articles of association has given rise to a number of actions. One of the actions concerned the effectiveness of the gift of the shares to Harold Crampton Junior. The Court of Appeal, in a judgment handed down on 4th March 2002, held that there was an effective gift in equity of the 400 shares to Harold Crampton Junior. These applications are not directly concerned with the decision in that case. These applications concern decisions in two other cases.
5. The first of those cases is the subject of application 2000/3721. This is an application made by Mr Brian Hurst, who, although a member of the Bar, appears as a litigant in person, being entitled, I am told, by subrogation to the interests of Harold Crampton Senior in this matter. His application is for permission to appeal out of time in respect of decisions of His Honour Judge Maddocks on 19th July and 30th November 2000. By his judgments His Honour Judge Maddocks decided that the executors of Ada Crampton had been duly registered on 7th June 1999 as the holders of 1500 shares in the company and, consequential on his decision, he made certain orders for costs. Harold Crampton Senior, who had contested the executors' claim, sought permission to appeal, which was refused on the papers by Lady Justice Arden on 15th March 2001. No application was made at that time for an oral hearing.
6. What has happened since is that, in further proceedings concerning the administration of this estate, Mr Justice Jacob gave judgment on 11th July 2002 in an action by Harold Crampton Senior to enforce his pre-emption rights in respect of the 400 shares. By Mr Justice Jacob's order the executors were ordered to offer the 400 shares subject to the stock transfer form of 12th October 1998 to Harold Crampton Senior at a fair value in accordance with the pre-emption provisions in the articles. I understand that Mr Justice Jacob's decision was upheld by the Court of Appeal on 9th August 2002, for reasons given in a judgment by Lord Justice Chadwick, from which I have seen only a short extract. It was in the light of the judgments of Mr Justice Jacob and Lord Justice Chadwick that an application notice was issued on 10th September 2002 seeking permission to appeal out of time against Judge Maddocks' order.
7. The submissions on behalf of Harold Crampton Senior in support of his application for an extension of time and for the grant of permission are simply that the judgments in the later action reveal new facts, which were not known to him at the time of the decision of Judge Maddocks or at the time when he was refused permission to appeal by Lady Justice Arden. In the light of the new facts, it is claimed that there has been deceit by one or more people, in particular one of the executors, in an attempt to get control of this company, by means of the inter vivos transfer of the 400 shares, the testamentary gift of shares and of amendments to the articles of association to protect those gifts and for the purposes of avoiding potential liabilities in tort. Under the new judgments the executors are obliged to offer 400 shares to Harold Crampton Senior, and he says that, in the light of what is now known about the stock transfer form, the executors would not have been entitled to obtain the declaration they did from Judge Maddocks, so far as it concerns the 400 shares. It is pointed out that the legatees of the shares under the will were not within the privileged class of persons in article 8(A). The most important fact is that the existence of the stock transfer form was not revealed. So nobody on Harold Crampton Senior's side appreciated what the effect would be on his pre-emption rights. Under the facts as now revealed, he has a right in relation to at least the 400 shares.
8. I am satisfied, on the basis of the submissions in the skeleton argument which has been submitted by or on behalf of Harold Crampton Senior, that there is a real prospect of that appeal succeeding. There are circumstances which excuse the failure to make the application for the oral hearing within the time set by the rules. I would, therefore, in relation to application 2000/3721, first grant an extension of time in which to make the application for permission to appeal, and then grant the application on the basis already mentioned. I will also direct in that case that it is to be listed for hearing with the application in the other case, 2002/1382.
9. The application in 2002/1382 is for permission to appeal against the judgment of His Honour Judge Hegarty on 12th June 2002. The application was originally made in the name of Stephen Crampton, who contends that Judge Hegarty was wrong in holding that the proceeds of sale of the 1100 shares bequeathed by will, if the rights of pre-emption are exercised, are not part of the residuary estate of Ada Crampton. He contends that the judge should have held that the proceeds of sale, if the rights of pre-emption are exercised, fall into residue and do not go to the legatees of the shares named in the will.
10. The application is now made by Mr Hurst, who has, on 28th September 2002, taken an assignment of Stephen Crampton's share in the residuary estate of Ada Crampton and, I am told, holds the benefit of the proceeds of the litigation concerning the residuary estate as trustee for Stephen Crampton. I am told that notice of the assignment has been given to the executors and, as far as I am aware, no contentions have been raised against its validity. Mr Hurst carefully explained to me that, in relation to this application, as in the case of Harold Crampton Senior, he was not acting on their behalf as counsel but acting in his own right by virtue of, in this application, an assignment, and, in the earlier application, by subrogation and under a power of attorney.
11. The point of this case is to determine the beneficial ownership of the proceeds of sale of the 1100 shares if the rights of pre-emption are exercised. The contentions put forward in the skeleton argument are that the judge should have held that the proceeds of sale would not go to Philip Waine or Harold Crampton Junior, the legatees of the shares, but, if they are turned into proceeds, would fall into residue. A number of arguments, which have been rejected by Judge Hegarty, are deployed in the skeleton argument.
12. Mr Hurst has helpfully answered a number of queries raised by me in the short time available to examine the complexities of the disputes concerning Ada Crampton's estate. I am unable to conclude that there is a real prospect of this appeal succeeding. But I am not going to refuse permission to appeal. It is now clear that there are a considerable number of disputes about this estate. In addition to the action I have mentioned, I am told that there are further possible proceedings based on a claim of mutual wills and also for the construction of the pre-emption rights in the articles of association. No single court has yet been able to obtain a full overview of this estate and, in the very unusual circumstances in which this litigation has arisen and is being pursued, I am of the view that it would be wrong to refuse permission to appeal at this stage.
13. What I propose to do, as I have already indicated to Mr Hurst, is to stand over the application in 2002/1382 to the full court, to be listed at the same time as the appeal in 2000/3721, with a direction that the appeal in 2002/1382 is to be listed immediately after the hearing of the application, should permission to appeal be granted. This will enable the full court to obtain a much better picture of the administration of this estate than any court has so far had in the litigation, which has come before Judge Hegarty, Judge Maddocks, Mr Justice Jacob, Lord Justice Chadwick and other members of the Court of Appeal.
14. It will, in my view, be important in the presentation of the arguments on the appeal in 2000/3721, and on the application and, if it is granted, the appeal in 2002/1382, for the court to be given a full and up-to-date picture of the progress of the administration of this estate. This will involve not only Mr Hurst, in his capacities, putting forward before the court all that he knows, but the executors involved in these proceedings informing the court as to the current state of the administration. It is a matter of concern that the estate of the testatrix, who died nearly four years ago, is not only subject to existing claims but is, as I have indicated, to be subject to yet more claims. These obviously have an effect on the progress of the administration. It may be that all these proceedings are unavoidable in resolving the complexities of her estate. I say no more because I do not have a full picture myself of what has been going on.
15. So for all those reasons, I make those orders. I repeat, for clarification, that I grant permission in 2000/3721 because there is a real prospect of that appeal succeeding. In 2002/1382, I adjourn the application for permission to the inter partes hearing before the full court, with the appeal to follow if permission is granted. The appeal in 2000/3721 is to be listed at the same time.
Order: permission to appeal granted in 2000/3721; application for permission in 2002/1382 adjourned on notice to the full court, with appeal to follow if permission granted; both matters to be listed at same time (time estimate two days).