Eastford Ltd v Gillespie & Anor

[5] Faced with this challenge, Mr Steven Gillespie by notice dated 6 October 2008 called a meeting of the board of directors of Eastford to ratify the raising of the action. The meeting was held on 9 October 2008 ; all four brothers attended the meeting in their capacity as directors. The directors did not elect a chairman of the meeting.

[8] That is the extent of the agreement of the parties on what had occurred at the meeting. I observe also that the minutes of the board meeting, to which the pursuers referred in their pleadings, recorded (i) that Mr Steven Gillespie stated that his solicitors had advised that Mr Graham Gillespie was not entitled to vote, (ii) that the resolution in relation to this action was carried by two votes to one but (iii) that Mr Graham Gillespie and Mr Alan Gillespie disagreed with that result. The minutes also stated:

"Thomas Graham Gillespie wanted it noted that Eastford had no funds to pursue these actions. ..... Thomas Graham Gillespie requested that it be noted that in his view the meeting was illegal."

"The first defender was disqualified from voting at that meeting by reason of his conflict of interest in the subject matter of the resolution. Neither Steven Gillespie nor Gary Gillespie was so disqualified from voting, since in their case there was no realistic conflict of interest in terms of the pursuers' articles of association."

[9] In their defences the defenders aver that this action has been brought without proper corporate authority. In an opposed hearing on 24 October 2008 they successfully sought recall of an interim interdict on various grounds. Further, as Eastford had no funds, the defenders successfully sought caution for expenses under section 726 of the Companies Act 1985 on 9 January and again on 26 May 2009 . In an unopposed motion on 2 July 2009 the defenders obtained the release of consigned funds to meet the taxed expenses of the hearing for the recall of the interim interdict.