Stuart William Evans & Ors v JNP Group Consulting Engineers Limited

Facts

The claimants, Mr Evans, Mr Walters and Mr Wood, were members of JNP Northern LLP ("JNP North"), a civil engineering practice operating from Brighouse and Sheffield, which collaborated with JNP Engineers LLP ("JNP South"), based in Chesham and Leamington. Following business reviews carried out by Mr Nicholas Byfield through Five Ninths and later DSA Advisory, the members of both LLPs agreed to merge into a new company, the defendant, which was incorporated on 16 June 2016. By Business Sale Agreements dated 31 December 2016 the members transferred the LLPs' assets to the company for shares, their capital accounts becoming Directors' Loan Accounts, and they entered into a Shareholders Agreement. The company's trading performance disappointed; the offices formerly run by JNP North were considered to be underperforming, no dividends were declared on the former JNP North members' shares, and Mr Evans retired in May 2018 after a breakdown in relations, with Mr Walters and Mr Wood retiring later that year. Each claimant sued in the Circuit Commercial Court in Birmingham for remuneration said to have been agreed at a meeting on 24 February 2016, for unpaid Directors' Loan Account balances, and in Mr Evans's case for the value of his "E" Entitlement Shares. The company denied liability, relying on the claimants' Retirement Letters as full and final settlements, and counterclaimed for breach of warranties in the Business Sale Agreement as to the recoverability of aged debt.