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McCallum-Toppin & Anor v McCallum-Toppin & Ors

AMT is a coffee company that started life from a single stall outside a shopping centre in London and ballooned over time into a multi-million pound business with shops in many locations. The business was created by Alexander McCallum-Toppin and his three sons, Angus, Alistair and Allan.

In 2001, Alexander died and as a result the ownership of the company was split into seven parts – two shares for each of the sons and one share for their mother.

In 2005, an agreement was reached between the brothers whereby the profits of the company were divided equally. Shortly thereafter Angus passed away. His two-sevenths of the company passed to his estate for the benefit of his wife and two children. Alistair, however, alleged (remarkably given that she had inherited an equal stake in the company to Alistair) that Angus’ wife was a ‘gold digger’ and accordingly refused to pay her an equal share of the profits in accordance with the 2005 agreement reached.

High Court proceedings ensued and the Judge found that Alistair and Allan should purchase Angus’ estate’s share of the company at market value. The precise figure has not yet been determined by the Court but it is believed that the two-seventh share of the company could be worth up to £7 million. An interim award was made by the Court in the sum of £1.5 million. Alistair and Allan failed to make payment of this sum and accordingly Angus’ wife petitioned for bankruptcy of Alistair.

The presiding Judge, Daniel Schaffer, said in respect of the bankruptcy petition:

“It is clear that, during the time they have controlled the company after the death of Angus, Allan and Alistair have used the company as a piggy bank to make personal expenditure at a high level on their behalf…Once Angus had died, his estate was largely ignored and his widow Lucy excluded. They ignored Lucy’s existence as best they could and continued their own course…[Alistair had] refused to treat the estate holding Angus’ shares in the same way as he would have considered Angus himself…Moreover, there is evidence that he saw Lucy as a gold digger…I accept that he did not want to declare dividends that would benefit her…The conduct…of the respondents has gone…to enrich themselves at the expense of the company. There were then incessant squabbles between Alistair and Allan umpired, if unwillingly, by their mother. No enterprise run on commercial principles would have organised the remuneration of directors on such chaotic lines.”

The Judge granted the bankruptcy petition but gave Alistair one last chance to comply with his obligations by allowing him the option to defer the making of the order by applying to adjourn the hearing to a later date to see if he can make the requisite payment to Angus’ estate.