Offshore Litigation

Blog

Offshore Litigation

Contributors

Jonathan Addo
Jonathan Addo
  • Jonathan Addo

  • Partner
  • British Virgin Islands
Jeremy Child
Jeremy Child
  • Jeremy Child

  • Partner
  • London
Stuart Cullen
Stuart Cullen
  • Stuart Cullen

  • Partner
  • British Virgin Islands
Julie Engwirda
Julie Engwirda
  • Julie Engwirda

  • Partner
  • Hong Kong
Peter Ferrer
Peter Ferrer
  • Peter Ferrer

  • Partner
  • British Virgin Islands
Claire Goldstein
Claire Goldstein
  • Claire Goldstein

  • Partner
  • British Virgin Islands
Hazel-Ann Hannaway
Hazel-Ann Hannaway
  • Hazel-Ann Hannaway

  • Partner
  • British Virgin Islands
Nick Hoffman
Nick Hoffman
  • Nick Hoffman

  • Partner
  • Cayman Islands
Andrew Johnstone
Andrew Johnstone
  • Andrew Johnstone

  • Partner
  • Hong Kong
Paula Kay
Paula Kay
  • Paula Kay

  • Partner
  • Hong Kong
Phillip Kite
Phillip Kite
  • Phillip Kite

  • Partner
  • London
Vicky Lord
Vicky Lord
  • Vicky Lord

  • Partner
  • Shanghai
Paul Madden
Paul Madden
  • Paul Madden

  • Partner
  • Cayman Islands
Henry Mander
Henry Mander
  • Henry Mander

  • Partner
  • Cayman Islands
Ian Mann
Ian Mann
  • Ian Mann

  • Partner
  • Hong Kong
William Peake
William Peake
  • William Peake

  • Partner
  • London
Lorinda Peasland
Lorinda Peasland
  • Lorinda Peasland

  • Consultant
  • Hong Kong
Chai Ridgers
Chai Ridgers
  • Chai Ridgers

  • Partner
  • Hong Kong
Nicola Roberts
Nicola Roberts
  • Nicola Roberts

  • Partner
  • Hong Kong
  • Singapore
Paul Smith
Paul Smith
  • Paul Smith

  • Partner
  • Cayman Islands
Andrew Thorp
Andrew Thorp
  • Andrew Thorp

  • Partner
  • British Virgin Islands
Jessica Williams
Jessica Williams
  • Jessica Williams

  • Partner
  • Cayman Islands
Jayson Wood
Jayson Wood
  • Jayson Wood

  • Partner
  • Cayman Islands

New appellate guidance on the Duomatic principle

In the recent decision of Dickinson v NAL Realisations (released on 3 December 2019) the English Court of Appeal provided useful guidance on the Duomatic principle. The principle provides that where it can be shown that all shareholders who have a right to attend and vote at a general meeting of the company assent to some matter which a general meeting of the company could carry into effect, that assent is as binding as a resolution in general meeting would be. As such, where the articles of a company require a course to be approved by a group of shareholders at a general meeting, that requirement can be avoided if all members of the group give their approval or conduct themselves so as to make it inequitable for them to deny they have given approval. It is tantamount to an amendment to a company’s articles.

NAL, which operated an aluminum smelting facility, had sold freehold factory premises, from which NAL operated, to Mr Dickinson. NAL was owned by Mr Dickinson, and by the trustees of two trusts. For one of the trusts (referred to as the “Pension Scheme”), Mr Dickinson was one of three trustees. The board of NAL was comprised of Mr and Mrs Dickinson at the material time. 

Mr Dickinson instructed solicitors to prepare documentation to transfer the property to his name. The property was then leased back to NAL initially for £40,000 per annum then £120,000 per annum. A minute recorded that a board meeting had taken place where the directors had resolved to transfer the property, although it was later acknowledged that no board meeting had in fact taken place. 

Mr and Mrs Dickinson argued the transfer could be saved under the Duomatic principle. The Court did not agree. There was insufficient evidence of assent. In the case of trust shares, approval would be required from the trustees who were the registered shareholders. The Court also assumed that all those beneficially interested in the shares could give their approval (possibly on the basis that beneficiaries acting together can bring an end to a trust), but that had also not occurred in this case.

This case will no doubt now be cited (both in England and in the Cayman Islands) as a leading authority on the Duomatic principle.

 

New appellate guidance on the Duomatic principle

Leave A Comment