Shareholder Protection From Unfair Prejudice: Case and Statute Citator 2021

 You can download the most recent edition of this publication at: https://commercialchambers.org/uploads/pdfs/ShareholderProtection2020.pdf

compiled by Andrew Marsden, Barrister

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Chambers and Partners 

• Called to the Bar: 1994 (Lincolns Inn)
• Qualifications: LLB (Business Law (1st class)), Bachelor of Civil Law (Oxon)
• Experienced CEDR accredited mediator
• Professional Memberships: Commercial Bar Association,
• Chancery Bar Association

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Expertise

• Commercial Dispute Resolution
• Company Law (particularly shareholder disputes)
• Partnership Law
• Agency (including Commercial Agents)
• Mediation

Introduction

Part 30 of the Companies Act 2006 enables a shareholder in a company who is being treated in an 'unfairly prejudicial’ way to seek relief from the court. Typically, these cases involve companies with relatively small numbers of shareholders. Those shareholders are usually also directors and may be the only directors of the company.

The shareholders / directors will generally have fallen out with each other. The unfairly prejudicial conduct often takes the form of an exclusion of one shareholder / director by another from the affairs of the company. On other occasions, it arises because of the misappropriation by one shareholder / director of property or funds belonging to the company or of a business opportunity that might have been enjoyed by the company. In other cases it might take the form of wrongful dealings with shares, improper dividends, salary or other payments or other improper conduct of the company’s affairs. 

This legislation gives the court very wide powers to control the conduct of the affairs of the company and its shareholders / directors. Such proceedings regularly result in the court ordering that one shareholder / director should purchase the shares of another at a value determined by the court to be fair in the circumstances.

This citator reflects the law as at 1 January 2021. 

Contents

Statutory Basis

Procedure

Interim injunctions and security for costs

Nature of unfair prejudice

Examples of unfairly prejudicial conduct

What relief will be ordered?

When the petition may be struck out

Statutory Basis

?

Member's statutory right to petition for relief from unfair prejudice

Section 994 Companies Act 2006

Secretary of State's statutory right to petition for relief from unfair prejudice

Section 995 Companies Act 2006

Court has unlimited power to make such order as it sees fit for giving relief in respect of unfair prejudice

Section 996 Companies Act 2006

A petition presented under section 459 Companies Act 1985 will be treated as continued under section 994 Companies Act 2006 where it continues after 1 October 2007

Hawkes v Cuddy & others [2007] EWHC 2999

The right to petition under section 994 Companies Act 2006 is probably not an inalienable statutory right. Rather, it can probably be limited or removed by contractual agreement (e.g. by articles or LLP agreement) or otherwise

Re Vocam Europe [1998] BCC 396

Exeter City FC Ltd v The Football Conference Ltd [2005] I BCLC 238

Fulham Football Club (1987) Ltd v Richards [2011] EWCA Civ 855

Flanagan v Liontrust Investment Partners LLP [2015] EWHC 2171

Heart of Midlothian Football Club Plc v Scottish Football League Ltd [2020] CSOH 68

Applies to UK companies and limited liability partnerships (unless excluded from an LLP under terms of LLP agreement)

Section 1 Companies Act 2006

Limited Liability Partnerships (Application of Companies Act 2006) Regulation 2009 (SI 2009)

Flanagan v Liontrust Investment Partners LLP [2015] EWHC 2171

Definition of 'member'

Section 112 Companies Act 2006

Re Nuneaton Borough AFC Ltd [1989] 5 BCC 377

Re a Company (No 007828 of 1985) [1986] 2 BCC 98,951

Re a Company (No 003160 of 1986) [1986] BCC 99,276 

Re Quickdome Ltd [1988] BCLC 370

Jaber v Science & Info Tech Ltd [1992] BCLC 764

Re a Company (No: 00506 of 1995) (unreported) 29 June 1995

Atlasview Ltd v Brightview Ltd [2004] EWHC 1056

Baker v Potter [2005] BCC 855

Re McCarthy Surfacing Ltd [2006] EWHC 832

Kaneria v Kaneria LTL 10 August 2015

Re FSC Andrews Ltd [2015] EWHC 4042

A person not yet registered as a member but to whom shares have been transferred or transmitted by operation of law may petition

Section 112 Companies Act 2006

Section 994(2) Companies Act 2006

Re Quickdrome Ltd [1988] BCLC 370

Harris v Jones [2011] EWHC 1518

(1) Hamilton and (2) Dowers v (1) Brown and (2) C & MB Holdings Ltd [2016] EWHC 191

Query whether a majority shareholder can complain of unfair prejudice

Re Baltic Real Estate Ltd [1992] BCC 629

Re Baltic Real Estate Ltd (No.2) [1993] BCLC 503

Re Legal Costs Negotiators Ltd [1999] BCC 547

Parkinson v Eurofinance Group Ltd [2001] 1BCLC 720

Re Ravenhart Service (Holdings) Ltd [2004] 2 BCLC 376

In case of limited liability partnerships, provision of section 994 Companies Act 2006 can be excluded by unanimous agreement of members

Limited Liability Partnerships (Application of Companies Act 2006) Regulation 2009 (SI 2009/1804) Reg 48

No power to order that a co-respondent (who is not also a petitioner) should have his shares purchased by fellow respondents guilty of unfairly prejudicial conduct

Gray v Braid Group (Holdings) Ltd [2015] CSOH 146

Procedure

Separate petition for each company in respect of which unfair prejudice is alleged is usually (but not always) required

Re a Company [1984] BCLC 307

Davies v Pro-tect GRP Enclosures Limited 17 December 2019 (unreported)

Statutory provision as to form of proceeding, procedure for presentation of petition, service and return of petition

The Companies (Unfair Prejudice Applications) Proceedings Rules 2009

The statutory procedure is important and the court has no power to dispense with the requirement to comply with The Companies (Unfair Prejudice Applications) Proceedings Rules 2009

Re Osea Camp Sites Limited [2005] 1WLR 760

Evans v Eurokey Properties Limited [2020] EWHC 1047

Form of petition

Rule 3 and the Schedule to The Companies (Unfair Prejudice Applications) Proceedings Rules 2009 (SI 2009 No: 2469)

Civil Procedure Rules Practice Direction 49A

Failure to proceed by petition cannot be remedied under CPR and will be struck out

Cooke v Cooke [1997] 2 BCLC 28

Who should be joined in the petition?

Re a Company (No: 007281 of 1986) [1987] 3 BCC 375

Re a Company (No: 005287 of 1985) [1986] 1 WLR 281

Re BSB Holdings Ltd [1992] BCC 915

Re Baltic Real Estate Ltd [1992] BCC 629

Re Saul D Harrison & Sons Plc [1995] BCLC 14

Supreme Travels Ltd v Little Olympian Each-Ways Ltd [1994] BCC 947

Lowe v Fahey [1996] 1 BCLC 262

Re Ravenhart Service (Holdings) Ltd [2004] 2 BCLC 696

Apex Global Management Ltd v FI Call Ltd [2013] EWHC 1652

Parties cases are defined by the petition and, in turn, any points of claim and points of defence ordered

Re Luddite Brothers Ltd [1965] 1 WLR 1051

Re Fildes Brothers Ltd [1970] 1 WLR 592

Re Tecnion Investments Ltd [1985] BCLC 434

Re Coroin [2012] EWHC 2343

Re Pedersen (Thameside) Ltd [2017] EWHC 3406

Allegations of unfair prejudice need to be pleaded with precision

Unisoft (3) [1994] 1 BCLC 609

McKillen [2012] EWHC 521

Tobian [2013] BCC 98

A respondent may have the petition struck out as against him if no relief will be granted against him and he will not be affected by an order

Supreme Travels Ltd v Little Olympian Each-Ways Ltd [1994] BCC 947

Re a Company (No: 004415 of 1996) [1997] 1 BCLC 479

A prayer for a winding up should not be included where inappropriate

Civil Procedure Rules Practice Direction 49A in respect of applications under the Companies Act 1985 and the Insurance Companies Act 1982 para 9(1)

Re a Company (No: 004415 of 1996) [1997] 1 BCLC 479

Civil Procedure Rules 1998 (as amended) apply save to the extent that they may be inconsistent with the Companies Act 2006 or the Companies (Unfair Prejudice Applications) Proceedings Rules 2009 (SI 2009 No: 2469)

Rule 2(2) of the Companies (Unfair Prejudice Applications) Proceedings Rules 2009 (SI 2009 No: 2469) 

Civil Procedure Rules Practice Direction 49A

Leave required to serve petition outside of jurisdiction

Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460

Re Harrods (Buenos Aires) Ltd [1991] BCC 249

Re Baltic Real Estate Ltd [1992] BCC 629

Apex Global Management Ltd v FI Call Ltd [2013] EWHC 1652

On return day the court will give directions for progress of petition (statements of case, 

preliminary issues, mediation, disclosure, witness statements, expert evidence, restrictions on advertising the petition, etc)

Re a Company (No: 002015 of 1996) [1997] 2 BCLC 1

Re Rotadata Ltd [2000] BCLC 122

The court may be persuaded to engage in early active case management (e.g. giving directions that deal early with principal issues which might serve to dispose of the case)

Re Rotadata Ltd [2000] BCLC 122

May be directions for split trial to determine whether there had been any unfair prejudice before costs of valuation are incurred

In the matter of Annacott Holdings Ltd [2012] EWCA Civ 998

In the matter of LCM Wealth Management Ltd LTL 22/1/2013

If company is in insolvent liquidation the petitioner must first show that, but for the alleged wrongdoing, his shares would have had value

Maidment v Attwood [2012] EWCA Civ 998

Generally proceedings are in public

Re FI Call Ltd [2013] EWHC 223

Advise provided to the company itself will not be subject to privilege and will therefor be disclosable to all shareholders

Re Hydosan Ltd [1991] BCC 19

The courts encourage early expert valuation on a joint basis to promote the chances of settlement and the avoidance of costs and in practice may order early disclosure on the issue of valuation to promote the prospects of early settlement

North Holdings Ltd v Southern Tropics Ltd [1999] 2 BC LC 625

Where parties agree to sale at a price to be determined by an expert the court will not generally interfere with that valuation if it is reached in accordance with his instructions

Premier Telecom Communication Group Ltd v Webb [2014] EWCA Civ 994

The court will not compel a victim of unfair prejudice to bring a claim for relief pursuant to section 994-996 Companies Act 2006 where the victim does not wish his shares to be acquired and wishes to pursue a derivative action

Hook v Sumner LTL 27/11/2015

Judgment in default under CPR Part 12 is not available as petitioner is not “entitled’ to any particular relief

Re Bankside Hotels Ltd [2018] EWHC 1035

Summary judgment procedure of CPR Part 24 is available

Re Bankside Hotels Ltd [2018] EWHC 1035

Even if a respondent is debarred from defending the petitioner nevertheless still has to prove his case through evidence adduced to the court upon which the respondent may cross examine

Re Full Cup International Trading Ltd [1995] BCC 682

Re B & G Care Homes Ltd [2016] BCC 615

Re Bankside Hotels Ltd [2018] EWHC 1035

The courts have shown a degree of enthusiasm for the arbitration of claims under section 994 Companies Act 2006 and a willingness to uphold the enforceability of arbitration clauses (even though the full range of reliefs might not be available in an arbitration (e.g. ordering a winding up))

Fulham v Richards [2012] Ch 333

The Disclosure Pilot provided for under PD51U CPR 1998 applies to claims for relief under section 994 Companies Act 2006 even if the petition was presented before the commencement of the Disclosure Pilot

See Note from Chief Insolvency and Companies Court Judge February 2020

UTB LLC v Sheffield United Limited [2019] EWHC (Ch) 914

In practice it is often the case that Extended Disclosure under the Disclosure Pilot is ordered in accordance with Extended Disclosure Model D (often with “narrative documents”) and sometimes even Model E)

Revised automatic directions tailored to deal with the requirements of the Disclosure Pilot Scheme have been issued in respect of petitions presented in the Business and Property Courts in London

Where the relief sought by the petitioner might affect other shareholders in the company it is a matter of case management as to whether those others should actually be joined to the proceedings or simply given notice of the proceedings

Re Hut Group Limited [2020] EWHC 5

A claim alleging unfairly prejudicial conduct of a company’s affairs based on alleged breaches by a director of duties owed to the company which are alleged to have affected the petitioner’s interests as a shareholder will not necessarily be characterised as, in substance, a derivative action requiring the court’s permission to continue the claim. That is particularly likely where the claim is in substance a complaint about conduct affecting the petitioner shareholder’s interest in the company rather than the company itself. It is also particularly likely where the relief sought would not be available in a derivative claim

Re Hut Group Limited [2020] EWHC 5

In many cases a determination as to whether there has been unfairly prejudicial conduct will involve an evaluative decision by the judge at first instance and any appeal of that decision may be difficult as the appeal court will not seek to carry out the balancing task afresh but merely ask whether the trial judge’s decision was wrong by reason of some identifiable flaw in his treatment of the issues to be decided

Re Sprintroom Ltd [2019] EWCA Civ 932

Interim injunctions and applications and security for costs

Interim relief not available under section 996 Companies Act 2006 before unfair prejudice is established but interim injunctions may be available under Supreme Court Act 1981 on American Cyanamid principles. The court may order interim injunctive relief both against those alleged as responsible for the unfairly prejudicial conduct, against the company concerned itself and against alleged recipients of that company’s assets. The court may also appoint interim receivers in appropriate circumstances and give directions as to the holding of meetings of the company pending determination of the petition

Re a Company (No: 00596 of 1986) [1986] 2 BCC 99,063

Re Posgate & Denby (Agencies) Ltd [1986] 2 BCC 99,352

Re a Company (No: 004175 of 1986) [1987] 3 BCC 41

Re a Company (No: 004502 of 1988) [1991] BCC 234

Re Sticky Fingers Restaurant Ltd [1991] BCC 754

Re a Company (No 00330 of 1991) [1991] BCLC 597

Re Mountforest Ltd [1993] BCC 565

Re Tottenham Hotspur Plc [1994] 1 BCLC 655

Re a Company (No: 003061 of 1993) [1994] BCC 883

Re Whitchurch Insurance Consultants Ltd [1994] BCC 51

Re BML Group Ltd [1994] BCC 502

Lunn v All Starr Video Ltd [1993] 137 SJ 108

Wright, Petitioners [1997] BCC 198

Wilson-Davies v Kirk [1997] BCC 770

Corbett v Corbett [1998] BCC 93

Trident European Fund v Coats Holdings Ltd [2003] EWHC 2471

Re Premier Electronics (GB) Ltd [2002] 2 BCLC 634

Re Ravenhart Service (Holdings) Ltd [2004] 2 BCLC 376

Williams v Brinkmann [2004] EWHC 601

Re Canterbury Travel (London) Ltd [2010] All ER (D) 133

Wendy Palmer v Mr Loveland Starlight Diamond Setters Hatton Garden Jewellers 2017 WL 04552554

Homes of England Ltd v Horsham Holdings Ltd [2019] EWHC 2429

Courts are reluctant to impose a director on a company by interim injunction

Pringle v collard [2007] EWCA 1075

Mission Capital plc v Sinclair [2010] 1 BCLC 304

Interim orders may be refused if sufficient undertakings are given as to the future conduct of the company

Pringle v Callard [2007] EWCA Civ 1075

Security for costs may be ordered

CPR 25.12 and 25.13

Re Unisoft Group Ltd [1992] BCC 494 and [1994] BCC 11

Re Tottenham Hotspur Plc (unreported) July 1993

In the matter of Auger Investments Ltd [2012] EWHC 94

Re Tonstate Group Limited [2020] EWHC 328

Not usually proper for respondents to use company funds to defend a petition

Re Sherborne Park [1986] 2 BCC 99,528

Re Kenyon Swansea [1987] 3 BCC 259

Re Crossmore Electrical and Civil Engineering Ltd [1989] 5 BCC 37

Re a Company (No 005685 of 1988) [1989] 5 BCC 79

Re Hydrosan Ltd [1991] BCC 19

Re Milgate Developments Ltd [1991] BCC 24

Re a Company (No: 004502 of 1988) [1991] BCC 234

Re a Company (No: 001126 of 1992) [1993] BCC 325

Corbett v Corbett [1998] BCC 93

Cas (Nominees) Ltd v Nottingham Forest Plc [2002] BCC 145

Arrow Trading & Investments v Edwardian Group Ltd [2003] EWHC 2863

Pollard v Pollard and others LTL 26/09/2007

Apex Global Management Ltd v F1 Call Ltd [2013] EWHC 1652

No advertising of petition without court's direction

Companies (Unfair Prejudice Applications) Proceedings Rules 2009 (SI 2009/2469 Rule 6)

Re a Company [1997] 2 BCLC 1

Interim disclosure orders available against parties and non-parties

Re TPD Investments Ltd LTL 22 January 2016

Nature of Unfair Prejudice 

Unfair prejudice may consist of acts or omissions committed in the past, being currently committed or which are anticipated

Re Gorwyn Holdings Ltd [1985] 1 BCC 99,479

Re a Company [1987] BCLC 141

Re Kenyon Swansea Ltd [1987] 3 BCC 259

Re a Company (No: 00314 of 1989) [1990] BCC 221

Lloyd v Casey [2002] 1 BCLC 454

Unfair prejudice must comprise conduct of the company's affairs or be an act or omission of the company or an act or omission on its behalf

Section 994(1) Companies Act 2006

Re a Company (No: 001761 of 1986) [1987] BCLC 141

Re Kenyon Swansea Ltd [1987] 3 BCC 259

Re Piccadilly Radio Plc [1989] 5 BCC 692

Re a Company (No: 00314 of 1989) [1990] BCC 221

Re a Company (No: 002470 of 1988) [1992] BCC 895

Re Unisoft Group Ltd (No 3) [1994] 1 BCLC 609

Re Leeds United Holdings Plc [1997] BCC 131

Re a Company (No: 00709 of 1992) [1997] 2 BCLC 739

Hawks & Cuddy (No. 2) [2007] EWHC 2999

Sikorski v Sikorski [2012] EWHC 1613 

Re Coroin [2012] EWHC 2343

Graham v Every [2015] 1 BCLC 41

Loveridge v Loveridge [2020] EWCA Civ 1104

Actions taken by a shareholder or even by a third party may give rise to actionable unfair prejudice where they are combined with acts or omissions or other conduct on the part of the company but the clear link or causal connection between the actions of the shareholder/third party and the acts or omissions or other conduct on the part of the company should be pleaded in the petition

Blackmore v Richardson (1 November 2004, Unreported)

Graham v Every [2015] 1 BCLC 41

Li Guozhu v New Century Iatrical Management Lts [2018] HKCFI 868

Loveridge v Loveridge [2020] EWCA Civ 1104

The affairs of a company may include the affairs of its subsidiaries

Nicholas v Soundcraft Electronics Ltd [1993] BCLC 360

Gross v Rackind [2005] 1 WLR 3505

Hawkes v Cuddy & others [2007] EWHC 2999 and [2009] EWCA Civ 291

Oak Investment Partners xii Ltd Partnership v Martin Boughtwood and others [2009] EWHC 176 and [2010] EWCA Civ 23

A failure to transfer shares in accordance with an alleged agreement may not involve the conduct of the affairs of the company

Kaneria v Kaneria LTL 10 August 2015

Conduct complained of is ordinarily that of controllers of the company

SCWS v Meyer [1959] AC 324

Re Bovey Hotel Ventures Ltd (unreported), 31 July 1981

Re R A Noble (Clothing) Ltd [1983] BCLC 273

Re a Company (No: 05287 of 1985) [1986] I WLR 281 

Re Blue Arrow Plc [1987] BCLC 585 

Re a Company (No: 002470 of 1988) [1992] BCC 895

Re Saul D Harrison & Sons Plc [1995] BCLC 14

The affairs of the company may in practice be conducted by not only its directors or some of its directors but also by its senior management

Oak Investment Partners xii Ltd Partnership v Martin Boughtwood and others [2009] EWHC 176 and [2010] EWCA Civ 23

The 'unfairly prejudicial' conduct of the affairs of the company need not necessarily be carried on by persons acting as agents of those against whom relief is sought. Rather, it is sufficient if the unfairly prejudicial conduct is sufficiently attributable to those against whom relief is sought that it is 'fair' that relief should be given against them

F&C Alternative Investments (Holdings) Ltd v Barthelemy & others [2011] EWHC 1731

'Unfairness' to be judged by ordinary meaning of the word and does not require infringement of legal rights. Keeping promises and honouring agreements are the 'watchwords'

Re Saul D Harrison & Sons Plc [1995] 1 BCLC 14

Re BSB Holdings Ltd (No 2) [1996] 1 BCLC 155

Re Marchday Group [1998] BCC 800

O'Neill v Phillips [1999] 1 WLR 1092

Both 'unfairness' and 'prejudice' need to be individually and objectively established

Re R A Noble (Clothing) Ltd [1983] BCLC 273

Re a Company (No: 008699 of 1985) [1986] 2 BCC 99,024

Re Ringtower Holdings Plc [1989] 5 BCC 82

Re a Company (No: 002470 of 1988) [1992] BCC 895

Re Saul D Harrison & Sons Plc [1995] 1 BCLC 14

Re Blackwood Lodge [1997] BCC 434

Re Guidezone Ltd [2001] BCC 692

Rock (Nominees) Ltd v RCO Holdings Plc (in liquidation) [2004] BCC 466

Re Baumler (UK) Ltd [2005] 1 BCLC 92

Hawks v Cuddy [2007] EWHC 2999 and [2009] EWCA Civ 291

Gray v Braid Group (Holdings) Ltd [2015] CSOH 146

Cusack v Holdsworth [2016] EWHC 3084

Re TPD Investments Limited [2017] EWHC 657

Loveridge v Loveridge [2020] EWCA Civ 1104

Re Cintep Development Ltd [2020] EWHC 3210

Unfair Prejudice involves a visible departure from the standards of fair dealing and a violation of the conditions of fair play on which every shareholder who entrusts his money to a company is entitled to rely

Jenkins Committee’ s Report

Saul D Harrison [1995] 1 BCLC 14

Whether conduct is to be considered fair or unfair is to be determined judicially upon the application of rational principles

O’Neill v Phillips [1999] 1 WLR 1092

The prejudice suffered must be substantial

Re Metropolis Motorcycles [2005] 1 BCLC 520

“Prejudice” is not to be too narrowly or technically construed but is to be considered in context and to be regarded as a flexible and open-textured concept

O”Neill v Phillips [1999] 1 BCLC 1

Re Tobian Properties Limited [2012] 2 BCLC 567

The prejudice suffered can be either financial prejudice (e.g. prejudicial to the value of the petitioners shares or otherwise financially prejudicial to the petitioner) or otherwise prejudicial in character (e.g. disregarding of the rights of the shareholder)

Re Cronin Ltd [2012] EWHC 2343

Gandesha v Gandesha [2019] EWHC 1717

Petitioner's interests in his capacity as a member must be affected by the conduct complained of though a court may take a relatively wide view as to whether a person interests in his capacity as a member are affected (e.g. affecting interests as creditor in respect of a loan made at same time as investment in shares may suffice)

Re Saul D Harrison & Sons Plc [1995] 1 BCLC 14

Re Alchemea Ltd [1998] BCC 964

Re a Company (No: 00709 of 1992) [1997] 2 BCLC 739

Gamlestaden Fastigheter AB v Baltic Partners Ltd [2007] 4 All ER 164, PC

Hawks v Cuddy [2007] EWHC 2999 and [2009] EWCA Civ 291

Gandesha v Gandesha [2019] EWHC 1717

Loveridge v Loveridge [2020] EWCA Civ 1104

If the company is insolvent the petitioner will generally have to establish that his shares would have had value but for the wrongdoing of the respondents (though if the petitioner was also a lender to the company at the time he acquired his shares prejudice to his ability to recover that debt might also suffice)

Maidment v Attwood [2012] EWCA Civ 998

Gamlestaden Fastigheter AB v Baltic Partners Ltd [2007] 4 All ER 164, PC

Generally the petitioner will need to establish (a) breach of the terms on which he agreed that the affairs of the company should be conducted; (b) that equitable considerations (i.e. those referred to in Ebrahimi v Westbourne Galleries Ltd [1973] AC 360), arising either at the commencement of the relationship or subsequently, make it unfair for those conducting the affairs of the company to rely upon their strict legal rights; or (c) that the board of directors has exceeded the powers vested in them or have exercised their powers for an illegitimate or ulterior purpose

Cobden Investments ltd v RWM Langport Ltd [2008] EWHC 2810

Gandesha v Gandesha [2019] EWHC 1717

Re Audas Group Ltd [2019] EWHC 2304

Loveridge v Loveridge [2020] EWCA Civ 1104

Of primary importance in identifying rights and interests of members are the memorandum and articles of association, any shareholders' agreements and the duties imposed upon directors by law and pursuant to statute. Conduct in breach of those agreements or duties may well involve unfairly prejudicial conduct and vice versa

Re Saul D Harrison & Sons Plc [1995] 1 BCLC 14

O'Neill v Phillips [1999] 1 WLR 1092

In the matter of Coroin Ltd [2013] EWCA Civ 781

In the matter of LCM Wealth Management Ltd [2013] 3957

Arbuthnott v Bonnyman [2015] EWCA Civ 536

Gandesha v Gandesha [2019] EWHC 1717

Re Audas Group Ltd [2019] EWHC 2304

Loveridge v Loveridge [2020] EWCA Civ 1104

Re Cintep Development Ltd [2020] EWHC 3210

In certain cases unfair prejudice may arise despite the absence of any breach of a legal right or duty. Where a company is in the nature of a 'quasi partnership', unfair prejudice may be found where a shareholder, though not acting in breach of any legally enforceable agreement or duty, uses the rules in a manner which equity regards as contrary to good faith. In such 'quasi partnership' cases equitable considerations make it unfair for the majority to rely on their strict legal rights. In such 'quasi partnership’ cases unfair prejudice may exist where there is a failure to fulfil a 'legitimate expectation' of a member arising from an understanding or non-legally binding agreement between members which would make it unjust, unfair or inequitable were the majority permitted to enforce their strict legal rights. Such a 'legitimate expectation' might be, for example, that the member should continue to be employed as a director or otherwise be allowed to participate in management of the company whilst he holds shares in the company

Ebrahimi v Westbourne Galleries Ltd [1973] AC 360

Re a Company (No: 00477 of 1986) [1989] 5 BCC 82

Re J.E. Cade & Son Ltd [1992] BCLC 213

Re Saul D Harrison & Sons Plc [1995] 1 BCLC 14

Re R&H Electric Ltd v Haden Bill Electrical Ltd [1995] 2 BCLC 280

Re Leeds United Holdings Plc [1997] BCC 131

Quinland v Essex Hinge Co Ltd [1997] BCC 53

Re a Company (No: 00709 of 1992) [1997] 2 BCLC 739

Third v North East Ice & Cold Storage Co Ltd [1998] BCC 242

Re Astec (BSR) Plc [1998] BCLC 556

O'Neill v Phillips [1999] 1 WLR 1092

Mears v R Mears & Co (Holdings) Ltd [2002] 2 BCLC 1

Grace v Biagioli [2006] 2 BCLC 70

In the matter of Gate of India (Tynemouth) Ltd [2008] EWHC 959

Oak Investment Partners xii Ltd Partnership v Martin Boughtwood and others [2009] EWHC 176 and [2010] EWCA Civ 23

Croly v Good [2010] EWHC 1

Apex Global Management Ltd v F1 Call Ltd [2015] EWHC 3269

Gray v Braid Group (Holdings) Ltd [2015] CSOH 146

Re TPD Investments Limited [2017] EWHC 657

Re Audas Group Ltd [2019] EWHC 2304

Starling v The Climbing Gym Limited [2020] EWHC 1833

It is unlikely that any such informal agreements or 'legitimate expectations' will exist in relation to listed public companies

Re Blue Arrow [1987] BCLC 585

Re Astec (BSR) Plc [1998] BCLC 556

A company may start out as a quasi partnership but later cease to operate as such (e.g. following the admission of new participants) and vice versa

Re a Company (No: 005134 of 1986) [1989] BCLC 383

Re McCarthy Surfacing Ltd [2008] EWHC 2279

Fowler v Gruber [2010] IBCLC 563

Croly v Good [2010] EWHC 1

Estera Trust (Jersey) Limited v Singh [2018] EWHC 1715

Such informal agreements or ‘legitimate expectation’ might seemingly possibly exist between some but not necessarily all shareholders

Waldron v Waldron [2019] EWHC 115

Relations between the participants in a company that is to be considered in the nature of a quasi partnership must be sufficiently personal rather than purely professional

Wootliff v Ruston-Turner [2017] EWHC 3129

Of itself, an irretrievable breakdown in relations may not constitute unfairly prejudicial conduct

Re a Company (No: 007623 of 1984) [1986] 2 BCC 99,191

Re a Company (No: 004377 of 1986) [1986] 1 WLR 102

O'Neill v Phillips [1999] 1 WLR 1092

Re Phoenix Office Supplies Ltd [2003] 1 BCLC 76

McKee v O'Reilly [2003] EWHC 2008

Re Jayflex Construction Ltd [2004] 2 BCLC 145

Re Baumler (UK) Ltd [2005] 1 BCLC 92

Grace v Biagiolli [2005] EWCA Civ 1222

Racking v Gross [2004] EWCA Civ 815

Hawks v Cuddy [2007] EWHC 2999 and [2009] EWCA Civ 291

Oak Investment Partners xii Ltd Partnership v Martin Boughtwood and others [2009] EWHC 176 and [2010] EWCA Civ 23

In the matter of Hart Investment Holdings Ltd [2013] EWHC 2067 

Apex Global Management v FI Call Ltd [2013] EWHC 1652 and [2015] EWHC 3269

Badyal v Badyal [2018] EWHC 68

Wrongful conduct by directors in a quasi partnership is unlikely to be considered “unfair” if the other quasi partners have behaved in the same way on the understanding that there will later be a process of accounting and equalisation

Re Jayflex Constructions Ltd [2003] EWHC 2008

The jurisdiction does not afford the court the power to make a purchase order in the absence of unfairly prejudicial conduct. It does not afford a “no fault divorce” jurisdiction. In other jurisdictions there is a move towards extending the court’s jurisdiction to permit a court to make a purchase order as an alternative to an order for the winding up of the company where it is “just and equitable” to do so 

O'Neill v Phillips [1999] 1 WLR 1092 

Evenstar [2006] 3 S.L.R.(R.) 827

Ting Shwu Ping v Scanone Pte Ltd [2016] SGCA 65 (CA (Sing))

Badyal v Badyal [2018] EWHC 68

In determining whether there has been any unfairly prejudicial conduct the cultural background to the company and its participants may be relevant

Rahman v Malik [2008] 2 BCLC 403

Generally mere mismanagement will not constitute unfair prejudice though it might in extreme cases

Re Elgindata Ltd [1991] BCLC 959

Re a Company (No: 002470 of 1988) [1992] BCC 895

Re Macro (Ipswich) Ltd [1994] BCC 781

Fisher v Cadman [2006] 1 BCLC 499

Oak Investment Partners xii Ltd Partnership v Martin Boughtwood and others [2009] EWHC 176 and [2010] EWCA Civ 23

F&C Alternative Investments (Holdings) Ltd v Barthelemy & others [2011] EWHC 1731

The existence of a 'deadlock' situation within the company is, on its own, unlikely to amount to unfair prejudice

Hawks v Cuddy [2009] 2 BCLC 427

The petitioner’s own conduct may result in ‘prejudicial’ conduct not being ‘unfair’

Re London School of Electronics Ltd [1986] Ch 211

Re Ringtower Holdings plc [1989] 5 BCC 82

Mears v R Mears & Co (Holdings) Ltd [2002] 2 BCLC 1

Woolwich v Milne [2003] EWHC 414

Baker v Potter [2005] BCC 855

Blackmore v Richardson [2005] EWCA Civ 1356

Grace v Biagioli [2006] BCC 85

Kelly v Hussain [2008] EWHC 1117

Re Flex Associates Ltd [2009] EWHC 3690

(c.f. Shah v Shah [2010] EWHC 313)

Interactive Technology Corp Ltd v Ferster [2016] EWHC 2896

Corran v Butters [2017] EWHC 2294

Dinglis v Dinglis [2019] EWHC 1664

Starling v The Climbing Gym Limited [2020] EWHC 1833

The conduct need not result in a reduction in the value of the petitioner's shares

McGuiness, Petitioners [1988] 4 BCC 161

 R A Noble & Sons (Clothing) Ltd [1993] BCLC 273

Directors must act fairly as between different classes of shareholders

Re BSB Holdings Ltd (No 2) [1996] 1 BCLC 155

Proceedings under s994 Companies Act 2006 are not subject to any particular limitation period but delay in bringing proceedings may be a bar to relief

Re D.R. Chemicals Ltd [1989] 5 BCC 39

cf Price v Rawlings (unreported)

Re Grandactual Ltd [2006] BCC 73

Re FSC Andrews Ltd [2015] EWHC 4042

Evans v Eurokey Properties Limited [2020] EWHC 1047

If member acquiesces in conduct that may deprive the conduct of 'unfairness'

Fisher v Cadman [2005] EWHC 377

Re Sunrise Radio [2010] 1 BCLC 367

Re K R Hardy Estates Limited [2016] BCC 367

Re AMT Coffee Ltd [2019] EWHC 46

On the other hand, if a petitioner fails to object to matters disclosed in published accounts (e.g. excessive remuneration) that failure,, on its own, is unlikely to prevent him asserting that that matter involves unfairly prejudicial conduct

Maidment v Attwood [2012] EWCA Civ 998

Although a petitioner must be a member when petition is presented, he may rely on events prior to his becoming a member

Lloyd v Casey [2002] 1 BCLC 454

Examples of unfairly prejudicial conduct

A director acting in breach of the duties that he owes to the company and thereby acting contrary to an express or implied agreement to conduct the affairs of the company in accordance with the duties owed as directors (e.g by exceeding the powers vested in him or by exercising those powers for an ulterior purpose or by exercising those powers otherwise than in the best interests of the company as a whole)

Re D. R. Chemicals Ltd [1989] 5 BCC 39

Re Saul D Harrison & Sons plc [1995] 1 BCLC 14

Re BSB Holdings (No. 2) [1996] 1 BCLC 155

CAS (Nominees) Ltd v Nottingham Forest plc

[2002] BCC 145

Re McCarthy Surfacing Ltd [2008] EWHC 2279

In the matter of Southern Counties Fresh Food

Ltd [2008] EWHC 2810

Oak Investment Partners XII Ltd Partnership v 

Martin Broughtwood and others [2009] EWHC

176 & [2010] EWCA Civ 23

Re Tobian Properties [2012] EWCA Civ 998

Re Addbins Ltd [2015] EWHC 3161

Gray v Braid Group (Holdings) Ltd [2015] CSOH 146

Ferster v Ferster [2016] EWCA Civ 717

Wootliff v Ruston-Turner [2017] EWHC 3129

Re Last Lion Holdings Ltd [2018] EWHC 2347

Failure to act in accordance with express agreement (whether contained in the memorandum or articles of association, a shareholders’ agreement or otherwise) or with an implied agreement or informal understanding

O’Neill v Phillips [1999] 1 WLR 1092

Re Cintep Development Ltd [2020] EWHC 3210

Exclusion from participation in management of a company that is in the nature of a 'quasi partnership' or where there is an agreement, understanding or legitimate expectation that the petitioner should be entitled to participate in the company is likely to amount to unfairly prejudicial conduct in absence of sufficient reasons justifying exclusion

Ebrahimi v Westbourne Galleries Ltd [1973] AC 360

Re Flex Associates Ltd [2009] EWHC 3690

Croly v Good [2010] EWHC 1

Shah v Shah [2010] EWHC 313

Lantsbury v Hauser [2010] EWHC 390

Amin v Amin [2010] EWHC 827

Fowler v Grubar [2010] 1 BCLC 563

Shepherd v Williamson [2010] EWHC 2375

Williams v Williams & others LTL 12/10/11

Harris v Jones [2011] EWHC 1518

Re Abbington Hotel Ltd [2011] EWHC 635

Williams v Williams LTL 12/10/11

In the matter of I Fit Global Ltd [2013] EWHC 2090

In the matter of Insurance & Finance Consultants Ltd [2014] EWHC 2206

Flanagan v Liontrust Investment Partners LLP [2015] EWHC 2171

Re TPD Investments Limited [2017] EWHC 657

Corran v Butters [2017] EWHC 2294

VB Football Assets v. Blackpool Football Club (Properties) Ltd [2017] EWHC 2767 

Badyal v Badyal [2018] EWHC 68

Sudicka v Morgan [2019] EWHC 311

Re Sprintroom Ltd [2019] EWCA Civ 932

Re Audas Group Ltd [2019] EWHC 2304

Starling v The Climbing Gym Limited [2020] EWHC 1833

In the absence of specific agreement between the shareholders that they should be entitled to continued employment with the company for so long as they hold shares in the company, dismissal of petitioner from a position as an employee of a company generally does not amount to unfairly prejudicial conduct of the affairs of a company unless the dismissal of the petitioner from their position as an employee is made in breach of a contractual duty of good faith, done for ulterior purposes or is done to promote the person dismissing’s own sectional interests

Re Audas Group Ltd [2019] EWHC 2304

Starling v The Climbing Gym Limited [2020] EWHC 1833

But if the company is not a “quasi partnership” and there is no such agreement or understanding exists then removal of a minority shareholder from his position as a director may not amount to unfairly prejudicial conduct

Third v North East Ice & Cold Storage Co Ltd [1998] BCC 242

Michel v Michel [2019] EWHC 1378

Dinglis v Dinglis [2019] EWHC 1664

Starling v The Climbing Gym Limited [2020] EWHC 1833

But if the petitioner resigns his directorship voluntarily there may be no obligation to reappoint

Re Flex Associates Ltd [2009] EWHC 3690

Kaneria v Kaneria LTL 10 August 2015

Removal of a company's auditor from office on grounds of divergence of opinion on matters of accounting treatment or audit procedures or for any other improper grounds is deemed to involve unfair prejudice

Section 994(1A) Companies Act 2006

Gray v Braid Group (Holdings) Ltd [2015] CSOH 146

Refusal to permit audit

Interactive Technology Corp Ltd v Ferster [2016] EWHC 2896

Excessive remuneration or drawings from the company

Re Cumana [1986] 2 BCC 99,453 and [1986] BCLC 430

Grace v Biagioli [2005] EWCA Civ 1222

Re Campbell Irvine (Holdings) Ltd [2006] EWHC 406

Re McCarthy Surfacing Ltd [2008] EWHC 2279

In the matter of Sunrise Radio Ltd [2009] EWHC 2893

Croly v Good [2010] EWHC 1

Maidment v Attwood [2012] EWCA Civ 998

Re Blue Index Ltd [2014] EWHC 2680

Re CF Booth Ltd [2017] EWHC 457

VB Football Assets v Blackpool Football Club (Properties) Ltd [2017] EWHC 2767

Rembert v Daniel [2018] EWHC 388

Re The Edwardian Group Ltd [2018] EWHC 1715

Re AMT Coffee Limited [2019] EWHC 46

The issue as to what comprises reasonable remuneration in any particular circumstance is an issue suitable for expert evidence but expert evidence in this regard will only be admitted if it is robust, necessary, it is sufficiently relevant and its admission would be proportionate

British Airways plc v Spencer [2015] EWHC 2477

Re AMT Coffee Limited [2019] EWHC 46

The court may be able to assess what is reasonable remuneration in any particular case as a matter of fact on the evidence before it and on the basis of material of which the court is able to take judicial notice and without any admissible expert evidence 

Re AMT Coffee Limited [2019] EWHC 46

Failure to hold meetings or holding "sham" meetings

McGuinness, Petitioners [1988] 4 BCC 161

Nuneaton Borough AFC Ltd [1989] 5 BCC 792

Re Ghyll Beck Driving Range Ltd [1993] BCLC 1126

Fowler v Gruyere [2010] BCLC 563

LCM Weath Management Ltd [2013] EWHC 3957

Refusal to conduct business of company in accordance with agreement or agreed policy

Re Abbington Hotel Ltd [2011] EWHC 635

Khoshkhou v Cooper [2014] EWHC 1087

Birdi v (1) Specsavers Optical Group Ltd; (2) Singh; (3) Dartford Visionplus Ltd and (4) Dartford Specsavers Ltd [2015] EWHC 2870

Failure to permit a shareholder involvement in decisions relating to matters reserved by terms of a shareholders’ agreement to shareholders is likely to involve unfairly prejudicial conduct of the affairs of the company 

Re Audas Group Ltd [2019] EWHC 2304

Interference with agreed management structure and operational procedures

Oak Investment Partners xii Ltd Partnership v Martin Boughtwood and others [2009] EWHC 176 and [2010] EWCA Civ 23

Failure properly to pay dividends

Re Sam Weller & Sons Ltd [1989] 5 BCC 810

Re Saul D Harrison & Sons Plc [1995] 1 BCLC 14

Re a Company (No: 004415 of 1996) [1997] 1 BCLC 479

Re Metropolis Motorcycles Ltd [2006] EWHC 364

In the matter of Gate of India (Tynemouth) Ltd [2008] EWHC 959

Re McCarthy Surfacing Ltd [2008] EWHC 2279

Croly v Good [2010] EWHC 1

J & S Insurance and Financial Consultants Ltd [2014] EWHC 2206

Re CF Booth Ltd [2017] EWHC 457

Corran v Butters [2017] EWHC 2294

VB Football Assets v Blackpool Football Club (Properties) Ltd [2017] EWHC 2767

Re AMT Coffee Limited [2019] EWHC 46

Rutledge v Skerritt [2019] EWHC 573

Misapplication of or misappropriation of company funds, property or opportunities or ‘expropriation of the minority’

Re Stewarts (Brixton) Ltd [1985] BCLC 4

Re London School of Electronics Ltd [1986] Ch 211

Re Cumana Ltd [1986] BCLC 430

Re Elgindata Ltd [1991] BCLC 959

Re Little Olympian Each-Ways Ltd (No 3) [1995] 1 BCLC 636

Re McCarthy Surfacing Ltd [2008] EWHC 2279

In the matter of Allied Business and Financial Consultants Ltd [2009] EWCA Civ 751

In the matter of Sunrise Radio Ltd [2009] EWHC 2893

Re Flex Associates Ltd [2009] EWHC 3690

Croly v Good [2010] EWHC 1

Sethi v Patel [2010] EWHC 1830

Lantsbury v Hauser [2010] EWHC 390

In the matter of Annacott Holdings Ltd [2013] EWCA Civ 119

In the matter of Hart Investment Holdings Ltd [2013] EWHC 2067

Thomas v Dawson [2015] EWCA Civ 706

In the matter of Husbands Bosworth Properties Ltd [2015] EWHC 1928

Hook v Sumner LTL 27/11/2015

Patel v Ferdinand (unreported) 14 July 2016

Interactive Technology Corp Ltd v Ferster [2016] EWHC 2896

Cusack v Holdsworth [2016] EWHC 3084

VB Football Assets v Blackpool Football Club (Properties) Ltd [2017] EWHC 2767

Rembert v Daniel [2018] EWHC 388

Badyal v Badyal [2018] EWHC 68

Estera Trust (Jersey) Limited v Singh [2018] EWHC 1715

Re The Edwardian Group Ltd [2018] EWHC 1715

Sudicka v Morgan [2019] EWHC 311

Williams Rhys Williams (Bangor) Limited [2020] EWHC 2624

May be difficult to establish a misappropriation of business opportunities if there is a finding of agreement to discontinue trading

Ahmadifard v McCullough (Unreported July 2014)

Provision of loans on preferential terms (e.g interest free or unsecured)

Re AMT Coffee Limited [2019] EWHC 46

Dinglis v Dinglis [2019] EWHC 1664

Wrongful use of company's trading name

Maidment v Attwood [2012] EWCA Civ 998

Unfair calls on shares

Re a Company (No: 008126 of 1989) [1992] BCC 542

Re D.R. Chemicals Ltd [1989] 5 BCC 39

Randall v S & F (Quarries) Ltd (unreported) 12 October 1994

Re Regional Airports Ltd [1999] 2 BCLC 30

Dalby v Bodilly [2004] EWCA 307

Selective or otherwise improper share issues

Re a Company (No: 007623 of 1984) [1986] 2 BCC 99,191

Re a Company (No: 0026712 of 1984) [1985] BCLC 80

Re D.R. Chemicals Ltd [1989] 5 BCC 39

Randall v S & F (Quarries) Ltd (unreported) 12 October 1994

Re Regional Airports Ltd [1999] 2 BCLC 30

Dalby v Bodilly [2004] EWCA 307

In the matter of Gate of India (Tynemouth) Ltd [2008] EWHC 959

In the matter of Sunrise Radio Ltd [2009] EWHC 2893

Lantsbury v Hauser [2010] EWHC 390

In the matter of Zetnet Ltd [2011] EWHC 1518

In the matter of I Fit Global Ltd [2013] EWHC 2090

Re TPD Investments Limited [2017] EWHC 657

Preventing a sale of shares at highest value

Re a Company (No: 8699 of 1985) [1986] BCLC 382

Seriously diminishing or jeopardising the value of the petitioner's shares

(1) Hamilton and (2) Dower v (1) Brown and (2) C & MB Holdings Ltd [2016] EWHC 191

Re Last Lion Holdings Ltd [2018] EWHC 2347

Wrongful refusal to register a transfer of shares

Holman v Adams Securities Ltd [2010] EWHC 2421

Graham v Every [2014] EWCA Civ 191

Re Last Lion Holdings Ltd [2018] EWHC 2347

Transfers of shares or transfers of control of shares may not amount to unfairly prejudicial conduct unless specifically prohibited by agreement between the shareholders

In the matter of Coroin Ltd [2013] EWCA Civ 781

Failure to provide proper information as to company's affairs

Re a Company (No 008699 of 1985) [1986] 2 BCC 99,024

Re R A Noble (Clothing) Ltd [1983] BCLC 273

Randall v S & F (Quarries) Ltd (unreported) 12 October 1994

In the matter of Sunrise Radio Ltd [2009] EWHC 2893

Gray v Braid Group (Holdings) Ltd [2015] CSOH 146

VB Football Assets v Blackpool Football Club (Properties) Ltd [2017] EWHC 2767

Rembert v Daniel [2018] EWHC 388

Re Audas Group Ltd [2019] EWHC 2304

Improper accounting and record keeping or accounting deficiencies

Fowler v Gruyere [2010] BCLC 563

Apex Global Management Ltd v F1 Call Ltd [2015] EWHC 3269

Gray v Braid Group (Holdings) Ltd [2015] CSOH 146

Ignoring board decisions or allowing persons not appointed or disqualified from acting as directors to manage the affairs of the company

Re H.R. Harmer Ltd [1959] 1 WLR 62

(1) Hamilton and (2) Dower v (1) Brown and (2) C & MB Holdings Ltd [2016] EWHC 191

Denigrating conduct particularly in the context of a “quasi partnership” such as to render it unrealistic to expect the participants to continue in business together

Apex Global Management Ltd v F1 Call Ltd [2015] EWHC 3269

Wrongful registration of new members

Re Piccadilly Radio Plc [1989] 5 BCC 692

Failure to permit proper financial management

Thomas v Dawson [2015] EWCA Civ 706

Failure to permit proper remuneration of management

Thomas v Dawson [2015] EWCA Civ 706

Permitting a bankrupt former director to continue in the management of the affairs of a company contrary to Company Directors Disqualification Act 1986 s11

(1) Hamilton and (2) Dowers v (1) Brown and (2) C & MB Holdings Ltd [2016] EWHC 191

Committing criminal offences

Bermuda Cablevision Ltd v Colica Trust Co Ltd [1997] BCC 982

Physical violence

In the matter of Home & Office Fire Extinguishers Ltd [2012] EWHC 917

Threats to wind up

In the matter of TPL Holdings Ltd 25.3.14

Unsubstantiated threats of applications for committal for contempt of court or for perjury

Interactive Technology Corp Ltd v Ferster [2016] EWHC 2896

Unilaterally withdrawing or failing to provide agreed funding for the project for which the company was formed or in breach of the minority shareholder’s reasonable expectations whether derived from formal or informal agreement or from the quasi partnership nature of the company and the joint venture that it was intended to pursue

Re Cintep Development Ltd [2020] EWHC 3210

What relief will be ordered?

No limit on types of order court may make to give relief in respect of matters complained of

Section 996 Companies Act 2006

Re Bird Precision Bellows [1986] Ch 658

Re Nuneaton Borough AFC Ltd (No.2) [1991] BCC 44

Re J.E.Cade & Son Ltd [1992] BCLC 213 

Supreme Travels Ltd v Little Olympian Each-Ways Ltd [1994] BCC 947

cf Re Full Cup Int Trading Ltd [1998] BCC 58

Grace v Biagioli [2005] EWCA Civ 1222

Hawks v Cuddy [2009] EWCA Civ 291

Sikorski v Sikorski [2012] EWHC 1613

In the matter of Hart Investment Holdings Ltd [2013] EWHC 2067

Thomas v Dawson [2015] EWCA Civ 706

The court only has jurisdiction to grant any relief if unfairly prejudicial conduct of the company’s affairs is admitted or proved

Re Bird Precision Bellows [1986] Ch 658

Re a Company (No: 004175 of 1986) [1987] BCLC 574

Caldero Trading Ltd v Beppler & Jacobson Ltd [2013] EWHC 2191

The court may make an order for relief in a form not sought by the petitioner

Hawkers v Cuddy [2008] BCC 390 and [2010] BCC 597

Even if unfairly prejudicial conduct is established there is no entitlement to relief. Rather, relief will only be granted if it is considered fair and appropriate that relief should be granted

Re Bird Precision Bellows Ltd [1986] Ch 658

Pro finance Trust SA v Gladstone [2002] 1 WLR 1024

Grace v Biagioli [2005] EWCA Civ 1222

Re Bankside Hotels Ltd [2018] EWHC 1035

The court assesses the appropriateness of any particular remedy as at the date of the hearing rather than at the date of the presentation of the petition and so can take account of conduct after the presentation of the petition but before the hearing

Re Hailley Group Ltd [1992] BCC 542

Grace v Biagioli [2005] EWCA Civ 1222

The court will not grant relief where it will serve no substantially useful purpose

Re a Company (No: 008126 of 1989) [1992] BCC 542

Re Full Cup Int. Trading Ltd [1998] BCC 58

Re Hailey Group Ltd [1993] BCLC 459

The remedy is not limited merely to one reversing or putting right the immediate conduct which has justified the making of the order. Rather, the court is entitled to look at the realities and practicalities of the overall situation, past, present and future.

Grace v Biagioli [2006] BCC 85

Court will grant the minimum remedy to repair the misconduct and unfair prejudice suffered and prevent it happening in the future. So, in an appropriate case, the court might refuse a purchase order where sufficient relief can be provided through an alternative order

Re Bird Precision Bellows [1986] Ch 658

Fexuto Pty Ltd v Bosnjak Holdings Ltd (1998) 28 ACSR 688

Re Legal Costs Negotiators Ltd [1999] BCC 547

Rural v Lopmand (2003) 47 ACSR 514

Grace v Biagioli [2006] BCC 85

Re Metropolis Motorcycles Ltd [2006] 364

Hawks v Cuddy [2007] EWHC 2999 and [2009] EWCA Civ 291

Re TPD Investments Limited [2017] EWHC 657

The question of what relief is appropriate should be addressed in light of all the facts as they exist as at the date of the order rather than those that pertained at the date of the presentation of the petition

Grace v Biagioli [2006] BCC 85

The remedy ordered will be one that is "fair" and “appropriate” in the circumstances and will seek to avoid unjust enrichment to any of the parties

Re Regional Airports Ltd [1999] 2 BCLC 30

Grace v Biagioli [2005] EWCA 1222

Re Sunrise Radio Ltd [2009] EWHC 2893

F & C Alternative Investments (Holdings) Ltd v Barthelemy [2012] Ch 613

Re TPD Investments Limited [2017] EWHC 657

VB Football Assets v Blackpool Football Club (Properties) Ltd [2017] EWHC 2767

The court may refuse to grant any relief where relief has already been obtained in respect of the consequences of the unfairly prejudicial conduct suffered

Re Kenyan Swansea Ltd (1987) 3 BCC 259

Re Estate Acquisition & Development Ltd [1995] BCC 338

Weatherley v Weatherley [2018] EWHC 3201

Court will only grant relief that is proportionate to the unfairly prejudicial conduct of which the petitioner complains and will not use the order to inflict punishment for bad behaviour 

Re Phoenix Office Supplies Ltd [2003] BCC 11

Hawkers v Cuddy [2008] BCC 390

VB Football Assets v Blackpool Football Club (Properties) Ltd [2017] EWHC 2767

Relief may be granted against any current members of the company or persons involved in the conduct of the affairs of the company but particularly against those who bear responsibility for the unfair prejudice suffered

Re Baltic Estate (No. 1) [1993] BCLC 498

Re Little Olympian Each-Ways Ltd (No.3) [1995] 1BCLC 636

Croly v Good [2011] BCC 105

Shah v Shah [2011] WTLR 519

The court may order relief against persons who are not members of the company

Re BSB Holdings Ltd [1992] BCC 915

Apex Global Management Ltd v Fi Call Ltd [2014] Bcc 286

In certain circumstances the court might even order relief against past members

Re Company (No. 005287 of 1985) [1986] BCLC 68

Conduct of the petitioner may affect the relief which the court thinks fit to grant

Re London School of Electronics Ltd [1986] Ch 211

Richardson v Blackmore [2006] BCC 276

Interactive Technology Corp Ltd v Ferster [2016] EWHC 2896

Relief will only be granted in respect of matters complained of

Re Legal Costs Negotiators Ltd [1999] BCLC 171

Court may order relief in a form that the petitioner does not seek or desire

Hawks v Cuddy [2009] EWCA Civ 291

In considering the appropriate remedy the court will take account of the interests of all shareholders, creditors and even third parties (e.g. joint venturers with the company), customers and the public generally

Hawkers v Cuddy [2008] BCC 390

Re Asia Television [2015] 1 HKLRD 607

The court may take into account the hardship that a particular type of order would represent to the respondents but whether it will be prepared to do so is likely to depend on the degree of misconduct on the part of the respondent

Re a Company (No: 002612) [1986] 2 BCC 

Re Scitec Group Ltd [2011] 1 BCLC 277

The courts have emphasised that in may cases there is much to be said for a “clean break” between the parties

Re Elgindata Ltd (No 1) [1991] BCLC 959

Re Clearspring Management Ltd [2003] EWHC 2516

In appropriate cases relief may be provided by an order granting a remedy against non-members

Re a Company (No: 005287 of 1985) [1986] BCLC 68

Re Little Olympian Each-Ways Ltd [1994] 2 BCLC 420, 429

F&C Alternative Investments (Holdings) Ltd v Barthelemy & others [2011] EWHC 1731

Apex Global Management Ltd v FI Call Ltd [2013] EWHC 1652

Re TPD Investments Limited [2017] EWHC 657

Relief may take the form of an order requiring the rectification of registers (e.g. as to shareholdings)

Lantsbury v Hauser [2010] EWHC 390

Relief may be ordered in the form of suitable injunctive orders being made

Re Last Lion Holdings Ltd [2018] EWHC 2347

The court may make an order regulating the future conduct of the company’s affairs (e.g. as to the calling of meetings

Re Harmer [1959] 1 WLR 62

McGuiness v Bremner Plc (1988) 4 BCC 161

In a suitable case relief may take the form of an order requiring the perpetrators to pay the company damages in respect of losses suffered but it is unclear whether the court can order the perpetrator to pay the victim damages directly

The Brightview 2004] BCC 542

Re Chime Corp Ltd [2004] HKFCA 8

Re Lehman Brown Ltd [2013] HKEC 357

Re Last Lion Holdings Ltd [2018] EWHC 2347

It is doubtful whether the court has power to order a winding up of the company under section 994 Companies Act 2006

Re Full Cup International Trading Ltd [1995] BCC 682

Hawkers v Cuddy [2008] BCC 390 & [2010] BCC 597

Court even has power to order a division of the company’s assets though such an order may involve significant issues in practice (e.g. as regards creditors and third parties)

Bhullar v Bhullar (unreported 10 May 2002)

Court may order an account of profits including and account as against a third party joined to the proceedings for this purpose

Clark v Cutland [2004] 1 WLR 783

Anderson v Hogg [ 2002] S.C. 190

Bhullar v Bhullar (unreported) 10 May 2002

Gamlestaden v Baltic Partners [2007] Bus LR 1521

Often relief given by ordering the respondent to buy out the petitioner at a 'fair value' with the price fixed by court in light of expert valuation evidence

Re Bird Precision Bellows Ltd [1986] Ch 658

Re D.R. Chemicals Ltd [1989] 5 BCC 39

Re Nuneaton Borough AFC Ltd [1989] 5 BCC 792

Re Nuneaton Borough AFC Ltd (No.2) [1991] BCC 44

Re Regional Airpots Ltd [1999] 2 BCLC 30

Grace v Biagioli [2005] EWCA Civ 1222

Sethi v Patel [2010] EWHC 1830

Shah v Shah [2011] EWHC 1902

Kohli v Lit [2013] EWCA Civ 667

CF Booth Ltd [2017] EWHC 457

Re TPD Investments Limited [2017] EWHC 657

Ashdown v Griffin [2017] EWHC 2601

VB Football Assets v Blackpool Football Club (Properties) Limited [2017] EWHC 2767

In cases of relatively modest unfair prejudice a buyout order may be considered disproportionate

VB Football Assets v Blackpool Football Club (Properties) Ltd [2017] EWHC 2767

Where a purchase order is made and the petitioner is also owed money by the company then usually the company is also ordered to repay the debt owed

Re a Company (No: 00789) [1991] BCLC 267

Re Ghyll Beck Driving Range [1993] BCLC 1126

R & H Electric Ltd v Hayden Bill Electrical Ltd [1995] BCC 958

Gamlestaden v Baltic Partners [2007] BCC 272

Reliable expert evidence as to value provided by a jointly instructed expert or unchallenged reliable expert evidence provided by an expert instructed by only one party is likely to be accepted by the court

Coopers Payen Limited v Southampton Container Terminal Ltd [2004] 1 Lloyds Rep 331

Ashdown v Griffin [2017] EWHC 2601

In an appropriate case the court may make an order permitting the petitioner to purchase the respondent's shareholding

Oak Investment Partners xii Ltd Partnership v Martin Boughtwood and others [2009] EWHC 176 and [2010] EWCA Civ 23

Lantsbury v Hauser [2010] EWHC 390

Thomas v Dawson [2015] EWCA Civ 706

Rarely will a court order a majority shareholder to cede control to a minority shareholder

Re a Company (No: 003843 of 1986) [1987] 3 BCC 624

Re a Company (No: 006834 of 1988) [1989] 5 BCC 218

Re Ringtower Holdings (1989) 5 BCC 82

Re Company (No. 00789 of 1987) [1990] BCLC 384

Re Baltic Real Estate (No.1) [1993] BCLC 498

Re A Company (No. 00836 of 1995) [1996] BCC 432

Re Brenfield Squash Rackets Club Ltd [1996] 2 BCLC 184

Nuneaton Borough AFC Ltd [1989] 5 BCC 792

Oak Investment Partners xii Ltd Partnership v Martin Boughtwood and others [2009] EWHC 176 and [2010] EWCA Civ 23

In an appropriate case the court may also order a non-party's shares to be purchased

Re Abbington Hotel Ltd [2011] EWHC 635

In considering whether to make a purchase order and the terms of the order itself the court might be prepared to consider the hardship that such an order might cause to a respondent

Re Company (No. 002612 of 1984) [1986] 2 BCC

But impecuniosity of the proposed purchaser may be considered irrelevant 

Re Company (No. 002612 of 1984) [1986] 2 BCC

Re Cumana Ltd [1986] BCLC 430

Sethi v Patel [2010] EWHC 1830

Re TPD Investments Limited [2017] EWHC 657

An interim payment or payment on account can be ordered

Ferguson v Maclennan Salmon Co Ltd [1990] BCC 702

Re Clearspring Management [2003] EWHC 2516

Dalby v Bodilly [2004] EWCA 3078

In the matter of Annacott Holdings Ltd [2011] EWHC 3180

Buyout price to be 'fair'

Re Bird Precision Bellows Ltd [1984] 1 Ch 419, [1986] Ch 658 

Eurofinance v Parkinson [2001] BCC 551

Re Sunrise Radio Ltd [2009] EWHC 2893

Sethi v Patel [2010] EWHC 1830

In the matter of Annacott Holdings Ltd LTL 23/5/12

Chilukuri v RP Explorer Master Fund [2013] EWCA Civ 1307

Re Blue Index Ltd [2014] EWHC 2680

Re Addbins Ltd [2015] EWHC 3161

Birdi v (1) Specsavers Optical Group Ltd; (2) Singh; (3) Dartford Visionplus and (4) Dartford Specsavers Ltd [2015] EWHC 2870

Re C F Booth [2017] EWCA 457

Wann v Birkinshaw [2017] EWCA Civ 84

Re TPD Investments Limited [2017] EWHC 657

Edgar v Munro [2017] EWHC 1814

Estera Trust (Jersey) Limited v Singh [2018] EWHC 1715

Re AMT Coffee Ltd [2019] EWHC 46

"Fair value” is often measured by reference to “market value” subject to necessary adjustments to take account of unfairly prejudicial conduct

Wann v Birkinshaw [2017] EWCA Civ 84

Re TPD Investments Limited [2017] EWHC 657

Valuation is very often the subject of expert evidence but experts will carry greater conviction if the expert has personal practical experience in buying and selling companies and is not just simply a professional expert witness

Re Sunrise Radio Ltd [2011] EWHC 3821

Court retains a wide power to disregard the views of expert valuers and to apply its own view of what is fair and sensible in all the circumstances

Re Planet Organic Ltd [2000] BCC 610

In the case of a going concern the”fair value” of the shares to be purchased should usually be valued on the date on which they are ordered to be purchased although the court has a discretion to order another date for valuation if “fairness” requires

Profinance Trust SA v Gladstone [2001] EWCA Civ 1031

Re C F Booth Ltd [2017] EWHC 457

Estera Trust (Jersey) Limited v Singh [2018] EWHC 1715

Re AMT Coffee Ltd [2019] EWHC 46

Re Dinglis Properties Ltd [2019] EWHC 3327

If the court determines that in a particular case the appropriate date for valuation of the petitioner’s shareholding should be a date earlier than the date of judgment it might possibly but not inevitably also order interest to be payable on that price from that earlier date depending on the cause of the delay in obtaining relief

Section 25 Senior Courts Act 1981

Pro finance Trust SA v Gladstone [2002] 1 WLR 1024

Re Clearsprings (Mangement) [2003] EWHC 2516

Re Southern Counties Fresh Foods Ltd [2010] EWHC 3334

Re Annacott Holdings Ltd [2012] EWHC 1662

Re Goldshine Development Ltd [2013] 5 HKLRD 318

Estera Trust (Jersey) Limited v Singh [2018] EWHC 1715 and [2019] EWHC 873

Once a valuation date has been determined the court is unlikely to order any adjustment to be made to the value as at that date or the valuation date itself in light of supervening events (eg. Covid-19 pandemic)

Dinglis v Dinglis [2020] EWHC 1363

In absence of a market for the company's shares the buyout price is to reflect ‘fair value’ in the context of a sale between the actual participants

Eurofinance v Parkinson [2001] BCC 551

If there is a “marriage value” in the combining of the shares of the vendor and the purchaser then the court may order that that “marriage Value” should be shared between the vendor and the purchaser

Estera Trust (Jersey) Limited v Singh [2018] EWHC 1715 and [2019] EWHC 873

Basis of valuation should be ‘fair’ to all parties

CVC/Opportunity Equity Partners Ltd v Demario Almeida [2011] 2 BCLC 108

Re TPD Investments Limited [2017] EWHC 657

Share valuation is an art not a science

Joiner v George [2003] BCC 298

Buyout price to take account of reduction in share value as a consequence of unfairly prejudicial conduct

Re D.R. Chemicals Ltd [1989] 5 BCC 39

Sethi v Patel [2010] EWHC 1830

Kohl v Lit [2013] EWCA Civ 667

Re Blue Index Ltd [2014] EWHC 2480

Re C F Booth Ltd [2017] EWHC 457

Evidence of what transpired after the relevant date of valuation may be considered

Edgar v Munro [2017] EWHC 1814

Historically, in “quasi partnership” cases there was generally no discount applied to reflect the minority status of the petitioner’s shareholding whereas in non ‘quasi partnership’ cases there was conflicting authorities as to whether a discount should be applied. The more modern approach seems to be that in all cases the price ordered to be paid should be “fair”. In practice this seems generally to mean that no discount is applied whether the company is in the nature of a “quasi partnership” or not unless some specific feature of the case justifies application of a discount to determine the ‘fair value’ of the shareholding (e.g. where the minority shareholding was gifted/acquired at a discount)

Ebrahimi v Westbourne Galleries Ltd [1973] AC 360

Re Bird Precision Bellows Ltd [1984] Ch 658

Re D.R. Chemicals Ltd [1989] 5 BCC 39

Re a Company (No: 005134 of 1986) [1989] BCLC 383

Howie v Crawford [1990] BCC 330

Re Elgindata Ltd [1991] BCLC 959

Re Planet Organic Ltd [2000] 1 BCLC 366

CVC Opportunity Equity Partners Ltd v Demarco Almeida [2002] 2 BCLC 108

Phoenix Office Supplies Ltd v Larvin [2002] EWCA Civ 1740

Re Jayflex Construction Ltd [2003] EWHC 2008

Strahan v Wilcock [2006] EWCA Civ 13

Re Campbell Irvine (Holdings) Ltd (No.2) [2006] EWHC 583

Irvine v Irvine (No.2) [2007] 1 BCLC 445

Re McCarthy Surfacing Ltd [2008] EWHC 2279

Re Sunrise Radio Ltd [2010] I BCLC 367

Croly v Good [2010] EWHC 1

In the matter of Home & Office Fire Extinguishers Ltd [2012] EWHC 9

Re Blue Index Ltd [2014] EWHC 2680

Re Addbins Ltd [2015] EWHC 3161

Estera Trust (Jersey) Limited v Singh [2018] EWHC 1715

Re AMT Coffee Ltd [2019] EWHC 46

Re Sprintroom Ltd [2019] EWCA Civ 932

Re Dinglis Properties Ltd [2019] 3327

Both in quasi-partnership and non-quasi-partnership cases, identification of the “fair” value may involve applying a premium to the proportionate value (e.g. where the purchaser acquires a 25%, 50% or 75% interest in the company)

Re Sunrise Radio [2009] EWHC 2893

Estera Trust (Jersey) Limited v Singh [2018] EWHC 1715 and [2019] EWHC 873

The shares should be valued on the basis of the value of them to the person ordered to purchase them rather than their value to an independent third party

Re Edwardian Group Ltd [2018] EWHC 1715

Re Dinglis Properties Ltd [2019] 3327

The order may allow the purchaser a period of time (and even an opportunity to apply for an extension of that period if required) within which to purchase the petitioner’s shareholding (e.g. to raise required funding for the purchase)

Re TPD Investments Limited [2017] EWHC 657

Estera Trust (Jersey) Limited v Singh [2019] EWHC 873

If payment for the shares is to be delayed then interest may be awarded on the price that is to be paid

Estera Trust (Jersey) Limited v Singh [2019] EWHC 873

If the evidence available to the court indicates that the petitioner’s shares are worthless the court may direct that the only relief available to the petitioner is an order that he should be permitted but not obliged to transfer his shares to the respondent for a nil consideration

Ashdown v Griffin [2017] EWHC 2601

Generally, notional sale costs should be taken into account in determining the “fair value” of the shareholding

Atwood v Maidment [2013] EWCA Civ 119

Wann v Birkinshaw [2017] EWCA Civ 84

Re TPD Investments Limited [2017] EWHC 657

Ordinarily the court will not grant the petitioner an option to purchase the respondent’s shareholding in the event that the respondent fails to purchase the petitioner’s shareholding in accordance with the court’s order

Re TPD Investments Limited [2017] EWHC 657

When the petition may be struck out

Petition may be struck out (ie under CPR Pt 3.4) or dismissed summarily (ie under CPR Pt 24) if no real prospect of success or it is plain and obvious that the relief claimed will not be granted

Civil Procedure Rules Part 3 and Part 24 apply

Re Unisoft Ltd (No. 3) [1994] 1 BCLC 609

Re Legal Costs Negotiators Ltd [1999] BCLC 171

Evans v Eurokey Properties Ltd [2020] EWHC 1047

King v Kings Solutions Group Ltd [2020] EWHC 2861

Before the trial of the matter the court should exercise careful control over the matters which a party can raise in an unfair prejudice petition

Re Unisoft Ltd (No. 3) [1994] 1 BCLC 609

King v Kings Solutions Group Ltd [2020] EWHC 2861

Re Coroin Ltd (No. 2) [2013] EWCA Civ 781

Graham v Every [2015] 1 BCLC 41

It may amount to an abuse of process for a person to issue a petition in circumstance where there has been unfair prejudice if the articles of association or shareholders' agreement contains a mechanism for offering his shares to the other shareholders at a fair price and for calculating the fair price unless that person has first utilised that procedure

 Re a Company (No: 07623 of 1984) [1986] 2 BCC 99,191

Re a Company (No: 004377 of 1986) [1987] 1 WLR 102

Re Castleburn Ltd [1989] 5 BCC 652

Re Benfield Greig Group Plc [2002] BCC 256

Re Belfields Furnishings Ltd [2006] EWHC 183

No abuse if impropriety affects value or valuation

Re a Company (No: 006834 of 1988) [1989] 5 BCC 218

North Holdings Ltd v Southern Tropics Ltd [1999] BCC 746

cf Fuller v Syracuse Ltd [2001] BCC 806

Re C F Booth [2017] EWHC 457

No abuse if mechanism for fixing price is not fair

Re a Company (No: 004377 of 1986) [1986] 1 WLR 102

Re Abbey Leisure Ltd [1990] BCC 60

Re a Company (No: 00330 of 1991) [1991] BCC 241

Re Copeland & Craddock Ltd [1997] BCC 294

O'Neill v Phillips [1999] 1 WLR 1092

North Holdings Ltd v Southern Tropics Ltd [1999] BCC 746

Re C F Booth Ltd [2017] EWHC 457

Issue of petition may amount to an abuse of process even though there has been unfair prejudice if it is clear that the petitioner will have to sell his shares to the respondent and the petitioner has unreasonably rejected a reasonable offer to purchase his shares at a fair price

Re a Company (No: 003843 of 1986) [1987] 3 BCC 624

Re a Company (No: 003096 of 1987) [1988] 4 BCC 80

O'Neill v Phillips [1999] 1 WLR 1092

North Holdings Ltd v Southern Tropics Ltd [1999] BCC 746

West v Blanchet [2000] 1 BCLC 795

Wyatt v Frank Wyatt & Son Ltd [2003] EWHC 520

Isaacs v Belfield Furnishings Ltd [2006] All ER (D) 216

Hawks v Cuddy [2007] EWHC 2999 and [2009] EWHC Civ 291

Strike out may be available where it is “clear and obvious” that relief will not be granted against the offering party beyond that which he has offered

Bankside Hotels [2018] BCC 617

But that may not be the case where there is uncertainty as to who should buy out whom, or the offer to purchase does not comprise one that provides all the advantages that the petitioner might reasonably expect to achieve from issuing a petition

Harbourne Nominees Ltd v Karvaski [2011] EWHC 2214

There is conflicting authority as to whether to be a 'fair offer' it must be unconditional and capable of a binding acceptance

O’Neill v Phillips [1999] 1 WLR 1092

Re Flex Associates Ltd [2009] EWHC 3690

Shepherd v Williamson [2010] EWHC 2375

(c.f. Re Sprintroom Ltd [2019] EWCA Civ 932)

What constitutes a "fair offer"

O'Neill v Phillips [1999] 1 WLR 1092

Harbourne Road Nominees Ltd v Karvaski [2011] EWHC 2214

Issues as to alleged wrongful conduct may be reserved to the court and dealt with as preliminary issues or exceptionally left to the independent valuer’s determination

Re Clearsprings (Mangement) Ltd [2003] EWHC 25

It may amount to an abuse of process if the actions complained of amount only to breaches of duties owed by directors such that the appropriate method of complaint would be by means of a derivative action rather than by an unfair prejudice petition

Re Chime Corp Ltd [2004] 3 HKLR 922

cf Re Brightview Ltd [2004] BCC 542

Petition may be struck out where it relates to matters taking place after the petitioner has sold his beneficial interest in the company's shares

Re FSC Andrews Ltd [2015] EWHC 4042

No abuse if valuer is not independent

Re Boswell & Co (Steels) Ltd [1989] 5 BCC 145

Re Benfield Greg Group Plc [2002] BCC 256

Solicitors who fail to advise of the need to make a fair offer to avoid a finding of unfairly prejudicial conduct may be held negligent

Magical Marketing Ltd v Ware & Kay [2013] EWHC 59

Petition may also be struck out if it comprises an attempt to raise issues the same as or similar to those raised in an earlier petition which the petitioner has failed to prosecute

Treetop Investment LLC v Falmouth House Freehold Co Ltd [2017] EWHC 674

Uncertain whether petition will be stayed in face of an agreement to arbitrate

Re Vocam Europe Plc [1998] BCC 396

Eurotunnel v Balfour Beatty [1992] 2 Lloyd's Rep 7

Sheldon v D F Keane (unreported) 21 March 2003

Exeter City AFC Ltd v Football Conference Ltd [2005] 1 BCLC 238