Muduroglu v Reddish LLP


On the evidence, a share transfer to recompense the recipient for introducing investment into a property development project had been agreed at a discounted price, not for free.


The claimant claimed for payment of the price of shares transferred to the first defendant company, under an agreement with the second defendant. The claimant also sought damages for unlawful means conspiracy.

The claimant and his brother (S) had been involved in a property development project. The second defendant had introduced private equity and loan investment to the project. It was agreed that he would be paid by a transfer of 10 per cent of the shares in the development company, which were beneficially owned by S. The shares were transferred to the first defendant at the request of the second defendant. The stock transfer form was initially completed without showing any consideration, but later the figure of £200,000 had been inserted. S disappeared after committing a large fraud. The claimant claimed that the share transfer had been agreed at a discounted price of £1,300,000, which the second defendant had not paid. The second defendant initially claimed that the consideration had been agreed at £200,000 and had been paid to S, but later claimed that there was an agreement that the shares would be transferred for free, and that the £200,000 figure had been inserted by mistake.


(1) There had been no agreement for a free transfer of the shares; certainly no such agreement that the second defendant believed to be open and above-board and made with the claimant's authority. The most likely conclusion was that the second defendant and S had agreed to present a proposal to the claimant that the first defendant take the shares at the discounted price of £1,300,000 to take account of the second defendant's work, but as between themselves they had privately arranged matters differently. The second defendant knew that a price would have to be agreed with the claimant and he had known and approved of S's discussions and agreement with the claimant about that figure. That was sufficient to establish the claimant's case that there had been an agreed price of £1,300,000 (see paras 139, 142-143 of judgment). (2) A false price had been entered on the stock transfer form, but the claimant had not been deceived and had not suffered any loss as a result. The claim for unlawful means conspiracy failed (paras 132, 156).

Judgment for claimant in part