19. The unfairly prejudicial remedy and the minority shareholder

Abstract

The most important minority shareholder remedy is the unfairly prejudicial petition under Companies Act 2006 (CA 2006), s 994. This chapter examines petitioning on the grounds of unfair prejudice; the boundaries to unfairly prejudicial conduct; the court’s power to grant relief; and petitioning for a winding-up order on the just and equitable ground under IA 1986, s 122(1)(g). The extensive case law on the section is considered in detail. The courts look to breaches of the terms on which the business should be conducted including breaches of the CA 2006, but also breaches of the agreements underlying the parties’ relationships. Such underlying commitments are most commonly found in quasi-partnerships. The chapter examines the quasi-partnership in detail. The remedy most commonly provided by the court is a purchase order and the chapter looks at the valuation issues around such orders. It also considers the alternative remedy of a winding up on the just and equitable ground.