Daniel John Pender v GGH (Jersey) Ltd

CourtRoyal Court
JudgeMatthew John Thompson
Judgment Date08 June 2020
Neutral Citation[2020] JRC 109
Date08 June 2020

[2020] JRC 109




Advocate Matthew John Thompson, Master of the Royal Court.

Daniel John Pender
First Plaintiff
GGH (Jersey) Limited
First Defendant


Punter Southall Group Limited
Second Defendant


Simon Anthony John Davis
Third Defendant

Advocate J. D. Kelleher for the Plaintiff.

Advocate D. Evans for the First Defendant was excused for appearance.

Advocate S. C. Thomas for the Second and Third Defendants.


Pender v GHH (Jersey) Limited and Ors [2019] JRC 228.

Companies (Jersey) Law 1991.

Rule 6/17(5) of the Royal Court Rules 2004, as amended.

Profinance Trust SA v Gladstone [2001] EWCA Civ 1031

Companies — decision — re: discovery — stay.










Discussion and Decisions



This judgment contains my decision in respect of the plaintiff's application for directions, in particular that the parties be required to provide discovery, and the second and third defendants' summons for a stay pending provision of a valuation of the first defendant.


The general background to this dispute is set out in my previous judgment in this matter dated 26 th November 2019, reported at Pender v GHH (Jersey) Limited and Ors [2019] JRC 228. The main issue in that judgment was who should have been convened to the proceedings commenced by the plaintiff and, as a result of the action being discontinued against the fourth to eleventh defendants by agreement, what costs orders should follow.


The proceedings brought by the plaintiff are pursuant to Article 141 of the Companies (Jersey) Law 1991. In his Order of Justice dated 13 th June, 2019, the plaintiff seeks a buy out of his interest in the First Defendant for a sum equal to their fair value. What is meant by fair value was the subject of argument before me and I set out later in this judgment the respective positions of the parties.


In paragraph 4 of my previous judgment, I summarised the issues between the parties in very broad terms as follows:-

“In summary, the plaintiff complains about his dismissal as CEO, the dilution of his shareholdings, his removal as a director of the company and the confiscation of his ordinary shares due to the plaintiff being classified as a bad leaver.”


In relation to the plaintiff's complaint of unfair prejudice, in the broadest of terms, the summary above still reflects the plaintiff's concerns. Later in this judgment, I refer to a detailed list of issues produced by the second and third defendants for this hearing and the plaintiff's comments on this list.


The hearing leading to my previous judgment took place on 13 th November, 2019. At the conclusion of this hearing, the parties were ordered to fix a further directions hearing which was initially listed for 24 th February, 2019.


When my previous judgment was handed down on 26 th November, 2019, directions were given for the filing of pleadings leading to answers being filed on 10 th January, 2020, and a reply on the 31 st January, 2020.


Regrettably, for reasons beyond the parties' control, the hearing fixed for 24 th February, 2020, had to be adjourned and was re-fixed for 15 th April 2020. This date was further adjourned due to the impact of the coronavirus pandemic, with the result that the directions hearing only took place on 19 th May, 2020. This delay is regrettable but not the fault of the parties.


Prior to the hearing on 24th February 2020, the plaintiff had provided a summons for directions setting out what directions he was seeking.


On 8 th April, 2020, the second defendant issued a cross-summons seeking a stay. This application was supported by the affidavit of Mr Richard Garmon-Jones, Group Compliance and Legal Director of the second defendant, sworn on 4 th May 2020.


Paragraph 9 of Mr Garmon-Jones' affidavit states as follows:-

“It is not at all clear from where the plaintiff has the impression that he stands to make anything like even a nominal financial pay-out from these proceedings. As matters currently stand, his ordinary shares, along with the ordinary shares of the other shareholders in the Company, including PSG, are worthless”


It is also appropriate to set out paragraphs 15 to 19 of the affidavit as follows:

“15. Clause 11.2 of the Shareholders' Agreement requires that a firm of chartered accountants (not being the auditors of PSG), an investment bank or other independent person produce an annual valuation of PSG's entire business [RGJ/1 Tab 4].

16. Clause — of the Shareholders' Agreement sets out the principles upon which the valuation is conducted, defined as the Basic Valuation Method. The Basic Valuation Method is designed so that valuations across previous financial years are consistent and can be compared. The Basic Valuation Method has been the same since 2002.

17. This valuation process values PSG and its Group as at 31 December in the previous calendar year (i.e. at the end of PSG and the Group's financial year). The valuation is an aggregate of the separate valuations of PSG itself and all its subsidiaries (i.e. the rest of the Group), which includes the Company. These are derived from each company's annual report and financial statements for the financial year in question, which have been audited by the Group's auditors, BDO LLP, although it should be noted that BDO LLP uses a separate specialist audit team for the Company and PSG. The valuation methodology involves the valuers undertaking a detailed review with the directors of each of the subsidiaries comprised in the valuation, many of whom are part owners of the subsidiary company

18. The valuation methodology required by the Shareholders' Agreement involves the valuer producing a valuation report comprising the disaggregated valuations of the operating subsidiaries and businesses of PSG. The disaggregated valuations are aggregated to arrive at a valuation of PSG and its Group. If any company in PSG's Group has a negative value, such negative value will be taken into account in calculating the aggregated valuation for the entire Group, i.e. if any company is given a negative value, that negative value will be set-off against the positive values of other companies in the Group in determining the aggregate valuation of the Group. The aggregated valuation of PSG and its Group is then divided by the aggregate number of issued ordinary shares in PSG in order to arrive at a share price for PSG. As part of the process, it will, therefore, be possible to identify the valuation (whether positive or negative) attributed to the Company. The valuation of the Company will then have either a positive or negative impact in calculating the share price of PSG.

19. The valuation is undertaken by an independent third party valuer. The appointed valuers for 2019 are Nash & Co Capital Limited (formerly Nash Fitzwilliams Limited up until 27 October 2016) of 40 Craven Street, London WC2 4NG, who have carried out the annual valuation for the financial years ending 31 December 2015, 31 December 2016, 31 December 2017 and 31 December 2018 and are in the process of undertaking the valuation for the financial year ending 31 December 2019. Nash & Co Capital Limited has included the Company as part of its valuation of PSG and its Group for the financial years ending 31 December 2017 and 31 December 2018 and the Company forms part of the annual valuation currently being undertaken, which should be completed by 30 July 2020. Nash & Co Capital Limited's terms of reference for the valuation exercise for the year ended 31 December 2019 are at [RGJ/1 Tab 5].”


This valuation process was also explained as being important in paragraphs 22 and 23 of Mr Garmon-Jones' affidavit as follows:-

“22. The annual valuation being carried out by Nash & Co Capital Limited is independent of this litigation. Its reliability as a barometer of the value of the PSG Group and its Group is beyond question and should be seen in context.

23. Having worked within PSG since 27 May 2002, I can say that the annual valuation is something of a sacred process within PSG and has always been so. PSG has never interfered with either the substance or the timetable of the process. We are very keen to ensure that it is, and is also seen to be, independent, not least because it is relied upon by a number of neutral third parties who have an interest in the valuation process remaining independent and reliable.”


The argument that the first defendant was worthless had been foreshadowed in correspondence sent by Baker & Partners to Carey Olsen dated 18 th September, 2019, 19 th January, 2020, and 14 th February, 2020.


Shortly before the hearing, I asked Baker & Partners, as advocates for the second and third defendants, for copies of the valuations for 2017 and 2018 referred to in paragraph 19 of Mr Garmon-Jones' affidavit. I made this enquiry because I wanted to see what had been said in these valuations about the value of the first defendant. I considered I was entitled to request a copy because the valuations were documents referred to in an affidavit and therefore could be required to be produced, having regard to Rule 6/17(5) of the Royal Court Rules 2004, as amended.


What I was provided with were extracts of these valuations in respect of the first defendant. I was informed that these valuations reflected the second defendant's interest in the first defendant and were not therefore a valuation of the first defendant as a whole. However, it is common ground that the second defendant's interest is 74.99 % of the first defendant. The valuation of the second defendant's interest in the first defendant was said to be £17.9 million as at 31 st December 2017. As at 31 st December, 2018, the figure was £14.6 million.


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1 cases
  • Daniel John Pender v GGH (Jersey) Ltd
    • Jersey
    • Royal Court
    • 3 February 2022
    ...GHH (Jersey) and Ors [2019] JRC 228. Aukland v Minister for Health & Social Services & Anor [2017] JRC 136 Pender v GGH (Jersey) and Ors [2020] JRC 109. Aukland v Minister for Health & Social Services & Anor [2017] JRC 136. Hearing (Civil) reasons re: supplemental expert reports THE MASTER:......

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