Keystone Law’s litigation partner Garry Turkie has successfully advised shareholders of Bramber Road Management Limited in its claim that the company’s articles of association (articles) had been amended by the conduct of its previous shareholders over thirty years ago.

The case of Re Bramber Road Management Limited [2024] concerned, amongst other things, whether one of its directors had been validly appointed without following the procedure in the articles for appointment of directors. The company had been incorporated in 1987, and its articles required new director appointments to be made by the board. The High Court judge examined the documentary evidence of how the company dealt with its affairs in the period between 1987 and 1990 – none of the then shareholders in that period gave evidence. The judge found that in that period each new director was appointed unilaterally by each shareholder, on the assumption that each shareholder had the right to appoint one director regardless of board approval.

In this unusual situation, the judge found that informal unanimous consent to an amendment of the articles was the result of a course of conduct by previous shareholders who were not the current shareholders. The shareholders who acquired shares in the company after 1990 would have been wrong to assume that the articles meant what they said about how directors are appointed.

The judge directed that her declaration that the articles had been amended should be filed at Companies House in order that the amendment of the articles be on the public record.

Jeremy Clarke, one of the shareholders, said:

“We are extremely grateful to the support we received by Keystone Law throughout this case. Garry Turkie provided us with pragmatic and expert advice that encouraged us to pursue our claim to trial.”

Garry Turkie added:

“This was an extremely interesting and important case to advise on. New shareholders need to be aware that the actions, whether formal or informal, of previous shareholders can have an impact many years later on how the company is run.”

Click here to read a detailed briefing on the issues that arose from this case.

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