Case Nos: CA-2025-001485 - [2025] EWCA Civ 1108

Yodel argued before the Judge that there was no serious issue to be tried in respect of Shift’s and Corja’s claims to shares. It contended that, even assuming that the Warrant Instrument was “authentic”, the warrants were issued without authority both because Mr Corlett was acting in breach of fiduciary duty and because the company’s articles of association required a quorum of two directors and that was lacking. Yodel further maintained that the warrants would anyway have lapsed long before they were purportedly exercised.

The Judge, however, considered that there was a serious issue to be tried. He said in paragraph 65 of the Judgment that Shift and Corja had done enough to persuade him that there was a serious issue to be tried as regards each of the defences on which Yodel relied in opposition to the injunction applications.

However, the Judge concluded that damages would be an adequate remedy for Shift and Corja. He explained in paragraph 70 of the Judgment that he reached that conclusion for the following reasons:

“70.1.

As I was told by [counsel for Yodel], there is not going to be a dismantling of the Yodel business.

70.2.

It will, albeit in likely substantially modified form, continue to exist.

70.3.

If Shift and Corja succeed on the Warrant Claim, there will still be a company with a business in which they will be the majority shareholders.

70.4.

If they have suffered loss by having to wait for the Warrant Claim to be vindicated, they can be compensated in damages.”

The Judge went on to consider whether the injunction applications should fail for the additional reason that Yodel would not be adequately compensated under the cross-undertaking in damages which Shift and Corja offered. In that regard, the Judge noted in paragraph 73 of the Judgment that it was “conceded that Corja has no substantial assets” and, in paragraph 77, explained that he was “unable to conclude that there is any substance in the cross-undertaking offered by Shift”. That being so, the Judge said in paragraph 77, “the Injunction Application would also fail because the cross-undertaking offered is inadequate”.

The Judge went on in paragraph 78 of the Judgment:

“There was some argument before me as to the need for fortification and whose burden it was to seek it and demonstrate the need for it. No fortification has been offered by Shift or Corja whose obligation it is, in my judgment, to offer it in support of what is otherwise a worthless cross-undertaking. Insofar as is necessary, I am satisfied that Yodel has shown a good arguable case for fortification and that its evidence, and particularly that of Mr McCourt, does satisfy the criteria relevant to the exercise of the Court’s discretion to order fortification. Had I needed to do so, I would have ordered the provision of fortification of the cross-undertaking in damages which has been offered.”

The Judge also considered that the balance of convenience came down against injunctive relief. He said in paragraph 80 of the Judgment:

“[I]n case it becomes relevant, I consider that the balance of convenience tips in Yodel’s favour and would have dismissed the Injunction Application on that basis. The injunction sought would require Yodel’s directors to subordinate their decision-making power on those matters set out in the draft order to Shift and Corja. That would go beyond preserving the status quo. In addition, Yodel would continue to incur vast debt by way of parental support in order to survive when Shift and Corja accept that such debt will have to be repaid but have adduced no evidence at all as to how, in the event of their success, they will do so. The transformation plan already under way does, on the evidence, in my judgment, have a prospect of turning around Yodel’s fortunes and it should not be restricted by the injunction sought by Shift and Corja. Even with an expedited trial of the Warrant Claim, that plan, on the evidence, needs to proceed very quickly if it is not to have to wait until 2026 before it can be progressed at all.”