Re A Company [1986] BCLC 376

Court: High Court

Facts: The petitioners sold their shares in A Ltd to O plc in exchange for shares in O plc, controlled by the respondents. They claimed the relationship would function like a partnership but alleged that one of them, Mr. S, was forced to resign as managing director of A Ltd and from the board of O plc, contrary to their agreement. Mr. S sought relief under s.459 of the Companies Act 1985 (now s.994 of the Companies Act 2006), alleging unfair prejudice.

Issue: Can a member’s wider expectations, such as managerial roles, be protected under an unfair prejudice petition?

Held: The court dismissed the motion to strike out the petition. Hoffmann J ruled that the court’s jurisdiction extends to conduct unfairly prejudicial to members as shareholders, which can include wider equitable considerations. Mr. S’s expectation to remain managing director could be part of his legitimate interest as a member.

Key Judicial Statement: The term “unfairly” in s.459 (now s.994) allows the court to consider interests beyond strict legal rights, including expectations associated with membership.

💡Leveluplaw : A claim for unfair prejudice may extend beyond strict legal rights to include wider considerations such as managerial roles, provided they are sufficiently connected to the member's status as a shareholder.