The Facts

The applicants were judgment creditors of a Robert Williams (Robert). They obtained a charging order against Roberts’s beneficial interest in 75% of the shares in a company in administration and eventually became full legal owners of those shares.

The applicants also took an assignment of a debt due to the company’s solicitors and, as a creditor, challenged the administrators’ remuneration. The Judge ordered that the administration be subject to assessment, rather than denying that remuneration, as the applicants had argued for. The applicants appealed that judgment and the appeal has not yet been heard.

In a different attack on the administrators, the applicants applied in this case for an order that the administration was invalid as the meeting of the directors resolving to appoint was inquorate as Robert was present, but disqualified as a director at the time.

Judgment

The Judge held, on the facts, that, pursuant to the Duomatic principle, there had been an informal amendment of the company’s articles of association allowing the other company director, Robert’s son David, to act alone. Robert was, at the relevant times, the only shareholder as the remaining 25% shareholder was a dissolved Isle of Man entity and Robert’s conduct supported such an amendment.

The administration was therefore valid and the application failed.

Re BW Estates Limited [2016] EWHC 2156 (Ch)