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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 >> Lynch v James Lynch And Sons (Transport) Ltd. & Ors [2000] EWCA Civ 67 (8 March 2000) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2000/67.html Cite as: [2000] EWCA Civ 67

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6. The minutes also showed the Father as having "overpaid" 11s 8d, Colin £49 15s 2d and Denis 8s 6d, a total of £50 15s 4d.
7. On 2 February 1956 at a further Board meeting attended by the Father, the Mother and Colin shares were allotted, as appears from the minutes, as follows:

8. Thus the £2,259 received on or by 30 June 1955 was matched by the 650 £1 Preference shares and 1609 £1 Ordinary shares allotted. At that time the authorised share capital was £15,000, divided into 12,000 £1 Ordinary shares and 3,000 £1 Preference shares.
9. There are no accounts still in existence for the year ended 30 June 1956, nor any of the supporting documentation which must have been held by the Company and seen by the accountants who prepared the accounts and provided the auditors' report. No doubt that auditors' report would have contained a statement to similar effect as that in the 1957 accounts, viz. that they had obtained all the information and explanations which, to the best of their knowledge, were needed for the purpose of the audit, and would have referred to the auditors being satisfied that the Company kept proper books of account. In the 1957 balance sheet there is an entry "Cash paid on account of Shares not yet allotted £345 16 6", and in the 1956 column there is the rounded up figure, £346, indicating that the same entry must have been there in the previous year's balance sheet. Who paid that money and when in the year ended 30 June 1956 and on what terms it was accepted, beyond what appears from the entry, does not appear from any document which has survived. But on the basis of that entry and Colin's evidence of an oral agreement with the Father and of payment of that cash the Judge found the entry to evidence an agreement binding the Company to allot Colin 344 Ordinary shares at par. The same entry would seem to have been included in the Company's balance sheet for year after year at least until 1975, and, it may be, well beyond that.
10. On 9 September 1960 the Father made his last Will. By it he appointed as his executors and trustees his chartered accountant, Mr. Barlow, and his solicitor, Mr. Bligh. By clauses 2, 3 and 4 he made specific bequests of a life policy and his house to various members of his family. By Clause 5 he gave his shares in the Company to Colin, Denis and Peter in equal shares absolutely. By Clause 6 he gave his scrap metal and restaurant business together with the premises occupied by the Father for the purposes of the business to his four sons who were to discharge all his liabilities in connection with those businesses. By Clause 7 he expressed his wish that Colin should be allowed to reside at 27 Leicester Street, Northwich, for as long as he desired subject to keeping it in repair and paying all outgoings. By Clause 8, subject to Clause 7 he directed that 27 Leicester Street, the scrap metal and restaurant businesses and premises be held on trust for the four sons as partners and that a Deed of Partnership be drawn up. By Clause 10 he declared that all death duties and funeral and testamentary expenses should be paid in equal shares out of the shares in his estate given to Colin, Peter and John. The Will is unusual in not directing how the Father's debts other than those in connection with the scrap metal and restaurant businesses should be paid and containing no gift of residue.
11. The Father died on 26 June 1963. Probate of the Will was granted to Mr. Barlow and Mr. Bligh on 17 February 1964. At that time the gross estate was said to be £49,084 but the net estate only £28,275. Thus the Father had over £20,000 of debts, and in addition £5,105 estate duty and interest was paid. Further the Father's majority holding of £1 Ordinary shares in the Company was claimed to be only worth par, whereas the 911 shares were eventually agreed with the Revenue to have a value of £6 15s 2d per share, no doubt on an assets value basis on the footing that there were only 1609 of such shares, and further estate duty and interest would have had to be paid. There were, therefore, substantial liabilities to be discharged by the Executors before beneficiaries became entitled to the benefits given by the Will. To the extent that the assets not specifically bequeathed were not sufficient to discharge debts (other than estate duty and funeral and testamentary expenses) and administration expenses, the specific legacies would have to bear the debts and expenses rateably or if necessary the executors would have to sell the assets to raise the necessary monies. The same would apply to what was left to Colin, Peter and John if the estate duty and funeral and testamentary expenses could not otherwise be met out of their own resources or what was given to them.
12. Mr. Bligh read the Will to the Lynch family after the Father's death. Its contents were a great disappointment to Colin. He thought that he would have been left the whole of the scrap metal business instead of only a quarter share. He walked out even before the reading of the Will was complete, saying that he was not interested. But a copy of the Will was sent to him by Mr. Bligh.
13. The Will made scant provision for the Mother. She made a claim under the Inheritance (Family Provision) Act 1938. That claim was compromised on 4 October 1965, the four sons agreeing to enter into a covenant with the Mother to pay her £14 per week during her widowhood and by deed to charge with that covenant certain properties including 27 Leicester Street. By a Deed of Covenant and Security dated 11 May 1966 the four sons gave effect to that compromise agreement. On 1 May 1967 Colin alone executed a Deed of Disclaimer. Although we have been told that he had no independent advice, it was professionally drawn. Thereby he disclaimed the bequest in Clause 6 of the Will and all estate and interest in the scrap metal and restaurant businesses. But the disclaimer contained the following proviso:
"Provided that nothing herein contained shall in any way affect his acceptance of and the right to receive all other gifts and benefits under the Will".
He directed the executors to complete the Deed of Partnership as directed by the Will without reserving any rights for him in respect of the businesses.
14. By share transfers which the Judge found were signed by Colin on or before the date they bore, 8 March 1968, Colin transferred 100 Ordinary shares in the Company to each of John and Peter for £800. These are the transfers which Colin was to claim 26 years later were procured by oral misrepresentation.
15. Less than 10 days later, Colin went to see a solicitor, Mr. Densem. Colin consulted him over his right to reside at 27 Leicester Street. But in a fee note dated 23 May 1969 Mr. Densem described his fee as being "for services rendered in connection with investigation of your personal financial affairs and resolving a family dispute." There is no doubt that Mr. Densem did investigate Colin's entitlement to a quarter of the Father's holding of shares in the Company. But there are two surprising features of Mr. Densem's investigation of Colin's personal financial affairs. The first is that Colin never told Mr. Densem of the share transfers dated 8 March 1968. The second is that Colin never told Mr. Densem of the claim which he came to assert for the first time in 1993 that the Father had agreed on behalf of the Company to allot him 346 Ordinary shares for the £345 15s 6d paid to the Company in 1955 or 1956. Mr. Densem wrote to Mr. Bligh, who appears to have acted not only for the Father's estate as an executor but also at times as solicitor for the Company, John and Peter. The correspondence between Mr. Densem and Mr. Bligh and that between Mr. Densem and Colin have only survived in a very incomplete state, nor are there any attendance notes or working papers of either solicitor. But Mr. Densem appears to have written to Mr. Bligh before 18 March 1968. He asked for a number of documents including the disclaimer signed by Colin.
16. In a lengthy letter dated 16 April 1968, a copy of which was given by Mr. Densem to Colin, Mr. Bligh told Mr. Densem of how Colin had walked out of the reading of the Will. Mr. Bligh recounted the efforts made by the executors to interest Colin in the businesses left to the four brothers, but that Colin was adamant that he did not want anything that the Father had left him. He said that an account of the administration of the estate from 25 June 1963 to 31 December 1966 was produced to a meeting of the four brothers early in 1967 and that a copy was put before each of them, that Mr. Barlow reviewed and explained the accounts in detail and answered questions but that Colin left his copy on the table. Colin, who was in the habit of writing his thoughts about a document received by him on the document had written "Left unopened as I walked out." Mr. Bligh said that notices concerning the annual general meeting of the Company were sent to Colin, but he did not attend. Mr. Bligh sent a copy of the Deed of Disclaimer. It is obvious from Colin's manuscript comments that even in 1968 his deep hurt at not being given the scrap metal business by the Father remained. He noted "In August 1965 I walked out telling Mr. Bligh and Mr. Barlow what I thought of the set up." Mr. Bligh told Mr. Densem that he understood that during the 4 1/2 years since the Father's death, Colin had worked for approximately 14 to 15 months.
17. When Mr. Densem on 18 April sent Colin that letter, inviting Colin's comments, he said that when Mr. Bligh's firm wrote to him on 18 March they stated that they were holding two Deeds of Disclaimer supposedly signed by Colin. Mr. Densem said that he had written asking for a copy of the second Deed. Mr. Densem also said to Colin:
"I am also still endeavouring to clarify the claim that you have renounced your shares in [the Company]".
It therefore appears that Mr. Bligh had claimed that Colin had renounced the shares given to him by the Will.
18. No second Deed of Disclaimer signed by Colin has come to light. On 21 June 1968, in a letter which has not survived, Mr. Densem advised Colin that he did not appear to have signed a Deed of Disclaimer relating to his shares in the Company, that he was still entitled to those shares and was still a director of the Company. The advice that Mr. Densem gave Colin about this time concerning his interest in the Company is also referred to in the fee note of 23 May 1969. In a letter dated 6 August 1968 Mr. Densem told Mr. Bligh that the last set of the Company's accounts received by Colin was for the year ended 30 June 1964, and he asked for the subsequent accounts. By a letter of the same date to Colin Mr. Densem told Colin what had been said in that letter and referred to Colin as "still a share holder in the Company". We do not know what was Mr. Bligh's reply.
19. On 18 November 1968, Mr. Densem wrote Colin a letter in response to one from Colin which has not survived. Mr. Densem said that he had been trying to obtain information from Mr. Bligh but without success. He said that as he understood it, the only point which Colin now wished him to pursue was the question of the share of the profits of the business credited to Colin's account. He promised to continue his efforts to obtain information from Mr. Bligh. The fee note of 23 May 1969 refers to Mr. Densem threatening Mr. Bligh with court action if certain documents were not supplied. It also refers to a lengthy attendance by Mr. Densem on Mr. Bligh on 27 February 1969 when Mr. Bligh agreed to supply the documents.
20. An undated and incomplete copy of a letter from Mr. Bligh, which we were told dated from some time after February 1969, stated that Colin was owed £1,462 16s 1d, being the balances from the scrap metal and restaurant businesses up to his disclaimer. It appears from that letter that Mr. Densem must have threatened a claim by Colin against the Company for wrongful dismissal. But Mr. Bligh said that Colin had told John in March 1968 that he was giving notice and Colin had been sent, amongst other documents, his P45.
21. The fee note of 23 May 1969 records that on 3 May 1969 Mr. Densem had a lengthy attendance on Colin when settlement terms of his disputes with his brothers were discussed. There was correspondence between Mr. Densem and Mr. Bligh, none of which has survived. But agreement was reached that Colin's brothers should sign an acknowledgment of Colin's right to remain at 27 Leicester Street, that they should indemnify Colin against any payments that Colin might be required to make under the Deed of Covenant and Security and that they should pay Colin £1,600 to be secured by a promissory note and to be repayable over 3 years and carrying interest at 9% per annum. Mr. Densem imparted all this to Colin by letter dated 29 May 1969 in which he said:
"It now only remains for the Trustees of your late Father's Will to transfer to you the shares in [the Company] to which you are entitled and I have already asked your brothers' Solicitors to attend to this in early course. In any event there does not appear to be any dispute as to your entitlement to these shares".
22. On 6 June 1969 Colin wrote the following comments on that letter:
"Private shares in [the Company] were purchased by me, the shares left by my father were given up voluntarily by me and I did not want any entitlement of my father's Estate for personal reasons. Private shares held by me will be held for my family, and will never be disposed of."
This note was unusually both signed and dated. Before the words "given up voluntarily" Colin wrote "apparently" but a line was put through it. The note clearly draws a distinction between Colin's "private shares" which he had purchased (presumably the 200 Ordinary shares) and the shares left to him by the Will which he had given up voluntarily. But if the Judge's finding on the date of the share transfers is correct, Colin had already transferred his shares in March 1968.
23. On 12 May 1969 Colin was a party with the executors, the Mother, Denis (who had been bought out by John and Peter of the partnership of the scrap metal and restaurant businesses), John and Peter to a Conveyance of the partnership premises to John and Peter.
24. Colin wrote to Mr. Densem on 7 June 1969 a letter which has not survived, but the contents of which may be inferred from Mr. Densem's reply on 18 June 1969. Mr. Densem referred to a query by Colin and reminded Colin of what Mr. Densem said in his letter of 21 June 1968 that as Colin did not appear to have signed any deed of disclaimer in respect of the shares given by the will, Colin was still entitled to those shares and was still a director. Mr. Densem referred to the possibility that Colin's brothers, holding voting control, could vote Colin from the Board, but he said that they could not deprive Colin of the shares to which he was entitled. Mr. Densem also dealt with the question of dividends from the Company (in fact no dividends were ever declared) and said that in any event Colin could not be held responsible for any losses suffered by the Company, but if it became insolvent the shares which he held in it would become valueless and to that extent he would have lost money. It is therefore apparent that Colin was himself still querying whether he was entitled to the shares bequeathed to him and asking about any financial consequences for him of still being a shareholder.
25. By May 1970 payment of the instalments in respect of the £1,600 agreed to be paid to Colin had fallen into arrears and Mr. Densem was instructed by Colin again. Mr. Densem wrote to Mr. Bligh threatening High Court proceedings. Colin was prepared to waive interest, but on Mr. Densem's advice, the claim to interest was maintained. Colin's brothers agreed to sign banker's orders for monthly payments of £50 per month to Colin and after a further threat of proceedings £144 interest was also paid to Colin by July 1970. Colin was sent by Mr. Densem a second fee note on 18 July 1970 on which Colin noted that no certificate had been sent. But although well aware of Mr. Densem's advice that Colin had not disclaimed his entitlement to a quarter of the Father's shares under the Will, although he knew that Mr. Densem had asked Mr. Bligh in May 1969 for the shares to be transferred to him in early course and that no share certificates had been sent to him, and although he did not have a great deal of faith in Mr. Bligh and Mr. Barlow (as Colin said in cross-examination), he neither asked Mr. Densem to pursue the matter nor did he pursue it himself for over 24 years.
26. On 23 August 1973 Mr. Barlow died, leaving Mr. Bligh as sole executor and trustee. A partner of Mr. Bligh, Mr. Hughes, was appointed as a new trustee with Mr. Bligh in respect of the Deed of Covenant and Security, but not of the Will. The administration of the estate was still not complete more than 12 years after the Father's death, when on 5 November 1975 John and Peter, accompanied by John's and Peter's solicitor (Mr. Farley), the Company's internal accountant (Mr. Broadhurst) and Mr. Kevan of the Company's auditors, met Mr. Bligh to discuss the winding up of the Father's estate. John and Peter had agreed to purchase Denis' quarter of the Father's holding for £1,550. Consequent on that meeting, on 11 December 1975 Mr. Bligh signed 5 share transfer forms. By one, 227 Ordinary shares were transferred to Peter for £775. By another, 227 Ordinary shares were transferred to John for £775. By a third, one share was transferred to John and Peter for £1. By a fourth, 228 shares were transferred to Peter for £1. By a fifth, 228 shares were transferred to John for £1. The last three were certified by Mr. Bligh as being transfers to a beneficiary under a Will of a specific legacy and so were not liable to ad valorem stamp duty. Colin was not consulted or informed about those transfers.
27. In 1975 the prospect arose of selling for redevelopment land held by John and Peter as partners and 27 Leicester Street occupied by Colin. There were discussions between the brothers about Colin moving from 27 Leicester Street to another property in Ash Street, which was purchased with the aid of a mortgage. The Company completed a banker's order for the payment of £56.78 per month representing mortgage interest and an endowment policy premium. That was cancelled on 16 July 1976 only two weeks after the first payment. I must come back to this episode later in view of the Judge's strong reaction to it.
28. Mr. Bligh died on 22 April 1978. Colin was employed by the Company for short periods in 1976, 1977, 1991 and 1992. On 23 September 1993 solicitors on his behalf wrote a letter to the Company, raising two claims: one, that he had in the 1950s paid £346 cash to the Company for shares which were not allotted, and the other that he had not been registered as the owner of a quarter of the Father's shares.
29. Proceedings were commenced by writ on 19 January 1994. In the Re-Amended Statement of Claim it is pleaded in para. 3:
"In or about 1957 [Colin], at the instruction of the [Father] acting on behalf of the [Company], introduced further capital in the sum of £346. 00 into the [Company]upon the basis that further shares would be allotted to him by the [Company]. By reason of the facts that [Colin] introduced capital in the sum of £346. 00 and that the shares in the [Company] are divided into shares of £1 each, [Colin] contends that he was by reason of his capital investment entitled to be allotted 346 shares. Following payment of the aforementioned capital sum by [Colin] to the [Company] the balance sheets of the [Company] thereafter recorded such payment as capital describing the same as "Cash on Account of Shares not yet Allotted"."
30. In paras. 6 and 7 the gift of the Father's 911 shares to the four brothers is pleaded as are the transfers in December 1975 to John and Peter. Para. 8 is in this form:
"In transferring the [Father's] shareholding in the manner aforesaid, the [Father's] said trustees failed to administer his estate according to the provisions of the Will, and in particular Clause 5 thereof, and acted in breach of trust. [John] and [Peter] were at the time when the said transfer of the [Father's] shareholding to them took place aware of the terms of the Will and knew that the [Father's] trustees in so transferring the said shareholding were failing to administer the [Father's] estate in accordance with the terms thereof and were acting in breach of trust."
31. Para. 10 contained an allegation that Peter in 1970 caused Colin to sign the share transfers dated 8 March 1968 on a false representation that he should sign so that the whole of Colin's shareholding could be registered in Colin's name.
32. The relief sought by Colin was, in effect, specific performance of the alleged agreement to allot 346 shares, alternatively repayment of £346 plus interest, a declaration that John and Peter held one quarter of the Father's 911 Ordinary shares upon trust for Colin and an order that such shares be transferred into Colin's name, a declaration that Colin held 200 Ordinary shares and an order setting aside the transfers effected by the share transfers dated 8 March 1968.
33. By their Re-Amended Defence the Defendants deny that Colin introduced £346 into the Company or any other sum on the term that further shares would be allotted, alternatively they plead that Colin abandoned all his claims in relation thereto, alternatively that Colin is not entitled to specific performance. They further plead that any claim for repayment is statute-barred. In relation to the claim to one quarter of the Father's shares, they originally pleaded an agreement by Colin to transfer the shares for consideration, but that pleading was deleted by amendment and at the trial the Defendants' case was that the transfers of shares to John and Peter were proper and lawful, Colin having disclaimed all entitlement to the shares, that John and Peter were bona fide purchasers for value without notice, that there was no breach of trust, that John and Peter having to the knowledge of Colin put time and effort into the Company in the belief that all the 911 shares belonged to them, Colin was estopped from asserting a claim and that Colin's claim was barred by laches. The particular matters relied on for laches were that Colin said that he did not want anything to do with the Company, that he disclaimed all entitlement to the shares, that John and Peter worked hard in the business of the Company, that Colin had not claimed to be a shareholder, that the executors had died and that many documents relating to the winding up of the estate had been destroyed or lost by the professional advisers dealing with the estate's affairs, and the facts relied on for the estoppel claim.
34. The Judge heard the case over 4 days, commencing at the end of September 1997. He gave judgment on 3 March 1998. It is a very full and painstaking judgment running to 77 pages. On the claim to 346 shares, the Judge accepted Colin's evidence that the Father had asked Colin to put a sum back into the Company by way of "share transfer subscription", that Colin had been the source of £344 16s 4d paid to the Company, that the entry in the balance sheets relating to £345 16s 4d evidenced an agreement between the Company and Colin that Colin would be allotted 344 Ordinary shares in the Company, and that laches did not bar his claim which was never abandoned, it being "clear that John and Peter knew that somebody had a claim to have at least 340 pound shares in the company allotted to him". On the claim to one quarter of the 911 shares the Judge found Mr. Bligh guilty of negligence and breach of trust in transferring to John and Peter Colin's entitlement to one quarter of the Father's shares, and refused to accept the evidence of John and Peter that they relied on their professional advisers in relation to the transfer and had no personal knowledge of the details. He rejected the claims of abandonment and laches, saying that he could not see how John and Peter had been prejudiced by the delay. However, Colin was said by the Judge to have completely failed to convince him that John induced Colin to sign the share transfers dated 8 March 1968 and so the claim to set aside those transfers failed.
35. Conscientiously though the Judge has approached his task, I have to say that on reading all the papers I have reached the clear conclusion that this action went wrong from the outset. It is surprising that no attempt was made to strike out these exceedingly late claims. How can it be proper to bring claims in equity after delays of such unprecedented length by a claimant who knew his claimed right to 346 shares but for 37 years never once asserted that claim, not even to his own solicitor, and knew in May 1969 that his solicitor had called for a transfer by the executors of one quarter of the Father's shares but never pursued his claim further for over 25 years? How could there be a fair trial of the issues after such a length of time, when the executors have died and so much documentation is no longer available?
36. I am very troubled by the Judge's assessment of the evidence. Every appellate court is of course conscious that the trial judge enjoys the considerable advantage over the appellate court of having seen and heard the witnesses give evidence. I accept that the fact that we have the transcripts of every word spoken does not remove that advantage. Nevertheless, an appeal to this court operates by way of a rehearing (R 59.3(1) in Schedule 1 to the Civil Procedure Rules). In the rare case when this court on reviewing all that was put before the trial judge finds that the conclusion of the trial judge cannot be justified or explained by the advantage of the trial judge having heard and seen the witnesses, and is satisfied that, because the reasons given by the trial judge are not satisfactory, he has not taken proper advantage of having seen and heard the witnesses, this court is entitled to interfere (see, for example, Watt v Thomas [1947] A.C. 484 at pp. 487,8). I am afraid that this is one of those rare cases.
37. There are two striking features of the judgment. The first is the amount of speculative factual reconstruction employed by the Judge to arrive at a finding described by the words "on the balance of probabilities". What I fear the Judge has not taken into account in a case where such stale claims are being asserted after a lapse of so many years is that the probabilities may not be capable of being fairly balanced because of the disadvantages to which the claimant has subjected the defendant by delaying his claim: witnesses who would have had determinative evidence may have died, relevant documents may have been destroyed or lost, memories may have faded. Unless the claimant's evidence carries such conviction that the possibility of him being wrong can be discounted, then it may be the trial judge's duty to find the claimant's case not proven. That is what Mr. Smith Q.C. for the defendants submitted should have happened in this case, and, as I shall attempt to demonstrate, he was right to so submit.
38. The second feature of the judgment is the strong condemnation of John and Peter and also of Mr. Bligh. No judge should shrink from criticising a witness or someone who has featured in a case where that criticism is appropriate. But the Judge's approach in making that condemnation is troubling. The 1976 episode of the cancellation of the Company's banker's order was described by the Judge as "truly shocking and disgraceful" and led him to say:
"I cannot, in the light of this conduct, accept any evidence which is given by Peter .... and for that matter probably John of any matter where there is a dispute, unless it is corroborated in some convincing way".
That appears to be based on the premise that spiteful behaviour (as the Judge saw it) by a defendant towards a claimant is a relevant, indeed the determinative, factor when the defendant's credibility as a witness giving sworn evidence more than 20 years later falls to be assessed. That cannot be right. But in any event I cannot understand why the Judge thought it right to make findings on this point at all. There was no issue in the case to which it was relevant. It was not pleaded. It was not even referred to in Colin's Witness Statement. The fact of Colin's move to Ash Street was briefly touched on by Peter in para. 58 of his Witness Statement, who referred to the deposit on the Ash Street property being paid by Peter and John, and to Mr. Farley's firm acting as solicitors for Colin. In examination in chief, Colin said that he understood that "they" did all the deposits and the legal fees and were going to pay the monthly fees on the overdraft, that this was said by Peter and that "they" cancelled it, the signatures of Mr. Broadhurst and Peter being on the document. Colin was asked why "they" stopped it, but gave no reason, and when asked what he did on hearing that the instalments had been stopped, he said "Well, very little. I carried on and paid myself." Colin was not cross-examined on this, no doubt because it was irrelevant to any issue. Neither Peter nor Mr. Broadhurst, when they gave evidence, was cross-examined on it, nor was Mr. Farley asked about it. Despite protest by Mr. Smith, John was briefly cross-examined on it, but it was not put to him that there was an agreement such as was found by the Judge. John was asked why the Company stopped paying the mortgage instalments and he said that he did not know. And yet the Judge saw fit to find that Colin only agreed to move out of Leicester Street on the basis that the Company would pay all the mortgage instalments on the Ash Street house to which Colin moved and all the endowment policy premiums, and reneged on that agreement almost immediately. The Judge does not appear to have asked himself why, if that finding were correct, Colin did nothing to enforce that agreement or how the Company could properly have entered into such a commitment to Colin in the first place. Unhappily the Judge's adverse view of John and Peter arising from this episode appears to have coloured his whole approach to their evidence.
39. I am no less troubled about the Judge's condemnation of Mr. Bligh. Mr. Bligh had died 20 years before the trial, only a few of his letters to Mr. Densem have survived so that, for example, we do not know how he responded to the letter of 29 May 1969 from Mr. Densem, and none of his attendance notes or working papers is in evidence. We do not know the basis on which he appears to have claimed to Mr. Densem before 18 April 1968 that Colin had renounced his interest in the Father's shares, but the fact that Colin had expressed words of renunciation would appear to be supported by the manuscript note made by Colin on Mr. Densem's letter of 29 May 1969, in addition to John's and Peter's evidence to the same effect. The fact that more than 12 years after the Father had died the administration of the estate was not completed is an indication of the difficulties the executors had experienced. We do not know the thinking behind Mr. Bligh's decision to execute the share transfers in December 1975 in favour of John and Peter for the consideration shown in those transfers, but what is clear is that the quarter of the Father's shares given by the Will to Colin were sold by Mr. Bligh as executor to John and Peter for £775. We do not know if that sale was made by Mr. Bligh because there were outstanding amounts of liabilities or expenses of the estate which had to come out of that quarter. What we do know is that Mr. Bligh so acted after a meeting attended by both solicitors and accountants to discuss the winding up of the estate. And yet the Judge has seen fit to say:
"It seems to me, that it would be highly likely that Mr. Bligh relied on his recollections when winding up the father's estate in 1975, rather than reading his substantial file, which may well have contained the documents in the Inheritance Act proceedings and correspondence with Mr. Densem. I think that Mr. Bligh's memory simply let him down when he came to execute the transfer of father's shares to John and Peter."
That is nothing more than speculation and, it seems to me, extremely improbable speculation, given the November meeting with Mr. Farley and the accountants, who cannot also be assumed to have suffered a memory lapse. And yet the Judge finds Mr. Bligh guilty of negligence and what amounts to a gross breach of trust. In my judgment these were not proper conclusions to which the Judge should have come on the limited material before him.
The 344 shares
40. I turn now to the claim made by Colin of an agreement to be allotted 346 shares. The agreement alleged was the oral agreement in 1957 between the Company acting by the Father and Colin. Colin in para. 5 of his Witness Statement referred to the sale of his property in Gladstone Street, Northwich, in 1957, the net proceeds being, he said, £346. He continued:
"Shortly after I had sold the house, my father suggested to me that if I paid the sale proceeds from my house into the business [the Company] that he would allot me the appropriate number of shares in the business. I agreed to this and was prepared to leave it to him to allot me the appropriate number of shares, and always believed that this was what happened."
It is to be noted that Colin was explicit that the conversation took place after the sale of the property in 1957 and that the Father's suggestion of an allotment was expressed to be conditional on payment to the Company of the sale proceeds. Colin adhered to this in answers to interrogatories and in examination in chief, and it was only when cross-examined on documentation obtained by the Defendants from another source showing that the property was not sold till 1957, whilst the entry in the balance sheet was in respect of the year ended 30 June 1956, that that version of events was abandoned. Colin thereby demonstrated that his memory was not good. But the Judge nevertheless accepted part of Colin's evidence, viz. that pursuant to an agreement with the Father Colin had paid the Company. However the Judge preferred his own speculative reconstruction of how Colin provided the purchase price for the shares. The Judge assumed that the amount shown in the Board minutes of 30 June 1955 as overpaid was part of the sum of £345 16s 6d in the balance sheet entry. But for all the Judge knew, the amount overpaid in 1955 could have been repaid before the making of the payment shown in the balance sheet entry. The Judge assumed that Colin would have paid £295 1s 6d out of his director's salary, even though the Judge acknowledged that this had not been suggested in evidence at all by anybody. That it was Colin who paid all but £1 0s 2d of the £345 16s 6d mentioned in the balance sheet entry is found by the Judge (1) from Colin's assertion that he paid £346, despite the fact that his evidence of the source and date of that payment was rejected, (2) from John's and Peter's evidence that they did not know the source of the payment, and (3) from the mere absence of any mention of such a separate asset in the Father's assets listed for estate duty purposes. The Judge ruled out the possibility of any other member of the family paying the money because, as he put it:
"Since January 1994, I have no doubt at all that John and Peter will have spoken to mother, to Denis, Mary and Gwyneth to find out if any of them have any recollection of paying any money to the company for shares that weren't allocated to them."
But there was no evidence to that effect from John or Peter. The Mother, who had died, and Denis, Mary and Gwyneth did not give evidence. On the evidence before him I do not see how the Judge could properly have found that Colin had discharged the onus on him of proving payment.
41. Even if there was evidence from which the Judge could properly infer an agreement between the father and Colin for the allocation of shares, I cannot see how that was a specifically enforceable agreement for the Company to allot 344 Ordinary shares at par. Where a company's authorised but unissued share capital includes both Preference shares and Ordinary shares, an agreement to allocate shares without specifying which class of share is to be allotted or at what price is not sufficiently certain. Mr. Elleray Q.C. for Colin suggested that an agreement to allot Ordinary shares could be implied, because those who were allotted Ordinary shares but no Preference shares on 2 February 1956 were the Father, Colin and Peter all of whom worked for the Company. But it does not follow that when on a different occasion the agreement was reached, that was the mutual understanding. There is no evidence to that effect and it cannot be said that the implication that Ordinary shares would be allotted at par is necessary. Further, I have difficulty in seeing how the Father could in law bind the Company to allot shares. Remarkably, we have not been shown the memorandum and articles of association of the Company, and we must assume that just as the allotments made by the directors on 2 February 1956 suggest, the power to allot shares was vested in the directors; what the directors can do, no doubt the company in general meeting or acting by all the shareholders can also do. But no single director, even the chairman of the Board, or shareholder, even the majority shareholder, has the power of the Board or the Company to allot shares, in the absence of a specific power in the Company's constitution to that effect, and none is suggested. Mr. Elleray pointed out that the defendants had not taken any point on lack of authority, and he submitted that this point cannot now be taken as it was not explored in evidence. But I am at a loss to understand how evidence could have assisted on this point of law. The only allotments ever made were made by the Board, so that it cannot be said that there was a practice in the Company of leaving allotments to the Father.
42. Even if the Father had authority to bind the Company, it is singularly improbable that the Father would have committed the Company to an immediately enforceable obligation to allot shares: that would have removed from the Father control of the Company. The Judge recognised that the Father would not have wanted that, but he failed to recognise the inevitable consequence, viz. that it could not have been intended by the Father that Colin should have the right to call for shares at will. To accord with the Father's intention Colin's right to receive the shares must have been still conditional on allotment. That destroys the right to specific enforceability of the agreement. The Judge thought that the balance sheet entry evidenced an agreement to allot Ordinary shares at par. But that can only be spelt out of the entry by adding in words which are not there. What the Judge has done is to read that entry as though it read: "Cash on account of Ordinary shares agreed to be allotted on demand at par but not yet allotted." That does not seem to me a permissible construction of the words actually used.
43. Even if Colin could overcome all of those difficulties, there is still the problem of laches, the equitable doctrine where a substantial lapse of time is coupled with the abandonment of a claim or the existence of circumstances making it inequitable to enforce a claim. Mr. Elleray stressed that mere delay is never enough. I agree. But here it is impossible to say that there is only delay. Colin knew of the agreement and of the payment in reliance on that agreement. He therefore knew he was entitled to be allotted shares, and yet never mentioned his entitlement to the Company or even to his solicitor investigating his personal financial affairs. As Cotton L.J. said in Allcard v Skinner (1887) 36 Ch D 145 at p. 174 "delay in asserting rights cannot be in equity a defence unless the Plaintiff were aware of her rights". Although Cotton L.J. dissented, on this point he was speaking at one with the majority (see p. 188 per Lindley L.J. and p. 192 per Bowen L.J.), and it is only common sense. The Judge turns this point on its head by blaming the Company for not formally minuting Colin's payment in any way as it had done on 30th June 1955. But Colin was a director of the Company and must share any blame. It is to my mind obvious that the defendants have been put at a serious disadvantage by Colin not asserting his claim for 37 years. After such an extraordinary delay, it is not surprising that John and Peter do not know who paid the £345 16s 6d, and they could not ask Mr. Barlow, who might have been expected to know, the details of that payment, nor do any documents, which must have been in existence to show who made the payment and why it was paid, survive. A clearer case of laches barring a claim it is difficult to imagine.
44. For all these reasons the Judge's decision on the 344 Ordinary shares cannot stand.
The 227 3/4 shares
45. It is not in dispute that Colin was given by the Father's Will one quarter of the Father's 911 shares, that the Deed of Disclaimer did not cover that gift and that Colin never agreed to sell his interest to John and Peter. The Judge assumed that Colin had an absolute right to those shares and that the absence of a Deed of Disclaimer showed that there had been no renunciation. That overlooks the right of the executors to sell specifically bequeathed assets if they hold no other assets out of which to pay liabilities and expenses. Further, there is no reason why a legatee cannot effectively renounce his entitlement to shares without executing a deed. The Judge accepted Colin's oral evidence that Colin believed that he had disclaimed his interest by the Deed of Disclaimer of 1 May 1967. The Judge thought that prior to the letter of 29 May 1969 that was Colin's belief and that Colin was disabused of that belief by that letter. That is an incorrect reading of the available material. Mr. Densem had advised Colin on 21 June 1968 that the Deed of Disclaimer did not affect his entitlement to the quarter of the Father's shares given to him. Mr. Densem repeated that advice on 29 May 1969. Yet on 6 June 1969 Colin recorded his reaction to that advice, viz. that he had voluntarily given up those shares. Mr. Densem's advice plainly troubled Colin, because Mr. Densem reverts to the subject in his letter of 18 June 1969 in response to a query from Colin. We know that Colin did not ask Mr. Densem to pursue the request made by Mr. Densem to Mr. Bligh for the transfer of the shares to Colin nor, despite Colin's lack of faith in the executors and Colin's awareness that no certificate had been sent, did Colin pursue the matter himself for 24 years. In my judgment, on that evidence the Judge could not properly reach the positive conclusion that Colin had not renounced his shares.
46. I have already given my reasons why the Judge was wrong to find Mr. Bligh negligent and in breach of trust in transferring the Father's shares to John and Peter in December 1975. Still less do I think justified the Judge's rejection of John's and Peter's evidence that they left the winding up of the father's estate to the solicitors and accountants who attended the meeting in November 1975. It is surely what unsophisticated men like John and Peter would naturally do in relation to the completion of a difficult administration. They did not say that they were unaware of the transfers. Of course they were aware of the transfers and indeed they rely on the fact that after the transfers Colin ceased to have an interest in the Company. Unsurprisingly, what they did not know were the details of the share transfers. They were entitled to rely on the professional men to ensure that the estate was duly wound up in a proper manner. After 22 years it is only to be expected that they could not remember more. Even John's and Peter's solicitor, Mr. Farley, who was called as a witness, had only a dim recollection of the meeting in November 1975. Who can blame him?
47. Even if I were wrong thus far, Colin would in my judgment face in laches an insuperable hurdle. Colin was advised by Mr. Densem in 1969 in clear terms. He knew he was entitled under the will to one quarter of the Father's shares, the transfer of which had been demanded by Mr. Densem of Mr. Bligh. Yet that claim was not pursued for more than 24 years. The key witness for John and Peter, if the claim had been made timeously, would have been Mr. Bligh, who would surely have given an explanation of why he sold the quarter of the Father's shares to John and Peter in 1975. I have already referred to the loss of contemporary documents, such as attendance notes, which might have thrown light on Mr. Bligh's thinking and indeed the thinking of all the professional men who attended the meeting in November 1975. The fading of memories is exemplified by Mr. Farley's evidence. John and Peter had for many years worked to build up the Company on the basis that Colin had no interest in the Company. Colin has never explained his delay. To my mind it is manifestly unjust for Colin to be allowed to obtain equitable relief when for so many years he knew his rights but stood by and failed to assert his claim.

48. For these reasons I am in no doubt but that the Judge's decision on this point too cannot stand.
49. I would allow the appeal and dismiss the action.
LORDS JUSTICE MANTELL: I agree.
MR JUSTICE SUMNER J: I also agree