Company wound up following sibling dispute

Friday 24 February 2023

A company established more than 50 years ago to hold two St Helier properties is being wound up after it was "paralysed" by a dispute between two elderly brothers.

Brothers Kenneth and Robert Gibbons had lost contact with each other while the company Monarch Investments Limited owed £20,000 in unpaid tax, failed to keep annual accounts, and owned a deteriorating property in St Helier.

In what the court agreed was "an unusual case", Deputy Bailiff Robert MacRae said that the dispute between the company’s shareholders Kenneth and Robert Gibbons – leading to a property in Halkett Street standing vacant – was "unlikely to be in the best interests of either [brother]".

Granting Kenneth Gibbons' application to wind up the company, Mr MacRae said: "The court is entitled, in our view, to take into account the age and likely stress on both men of these proceedings and their effect on the company and its underlying assets."

83-year-old Kenneth Gibbons had previously brought a representation to the Royal Court in 2016.

The court heard that relations between the brothers had deteriorated to the extent that they had only seen each other twice in more than two-and-a-half years, and Robert – the younger brother by seven years – had been difficult to locate and had failed to respond to correspondence about the proceedings.

As a consequence, Advocate Lynne Calder was appointed amicus curiae as assist the court.

She filed an affidavit describing her efforts to contact Robert Gibbons, culminating in a meeting at which he became "very animated" and told her he wanted nothing to do with the case, that he was unfit to attend the trial and that the proceedings had made him very ill.

In court, Kenneth Gibbons gave evidence that the administration of the company had become impossible.

When the two brothers attended a meeting at the Jersey Financial Services Commission in December 2021, Robert identified himself as the company’s only director and secretary, while a previous annual return still showed their late father, who died in 1972, as a director and beneficial owner. The younger brother resisted a request from Kenneth to appoint him as second director.

Although premises owned by Monarch Investments in Market Street were being let out and rent received, those in Halkett Place had been empty for more than a year because of lack of repairs.

Kenneth had been obliged to approach Revenue Jersey to persuade them to stay proceedings to recover a £20,000 tax liability, and he had also intervened to ensure that unpaid parish rates were finally settled. As minority shareholder, he had been unable to change the board structure, leaving what his counsel Advocate Gregory Herold-Howes and Advocate Calder agreed was a company that was "paralysed".

Giving judgment, the Deputy Bailiff – who was sitting with Jurats Andrew Cornish and Alison Opfermann – ordered that the company should be wound up and a liquidator appointed.

He directed that Kenneth Gibbons’ costs should be paid from the company’s assets.

"We are satisfied that these circumstances are sufficient to prompt a just and equitable winding up of the company... It has not been found that Robert lacks capacity and accordingly he remains the sole director and principal shareholder of a company which is diminishing in value as a consequence of his neglect. The breakdown of the relationship between brothers has been total....There are no practical alternatives to winding up on the just and equitable basis," concluded Mr MacRae.