Case Law - Part 3

Question 1

Inspection of the register

The courts ability to issue a no-access order

Answer 1

Burry & Knight Ltd (2014)

• Arden LJ stated that the information Knight sought would not provide any benefit to the members.
• Agreed with the contention that Knight wished to inspect the register in order to conduct a vendetta against the controllers of the company.
• This was held to be an improper purpose and so the no-access order was granted

Question 2

A meeting that lacks a quorum cannot proceed

Answer 2

Re Cambrian Peat, Fuel and Charcoal Co Ltd (1875)

Question 3

The derivative claim case law

Answer 3

Foss v Harbottle (1843)

Question 4

Quasi partnerships and equitable considerations

Answer 4

Ebrahimi v Westbourne Galleries Ltd (1973)

Question 5

Unfair prejudice claim
(Grounds for claim)

Answer 5

Re Home & Office Fire Extinguishers Ltd Rodliffe v Rodliff

• Conduct must relate to affairs of the company

Question 6

Unfair prejudice claim
(Remedy)

Answer 6

Grace v Biagioli

• If petition is successful s.996 (1)
• Most likely order is a share purchase order

Question 7

Where a member legitimately expects to be involved in management (as in a quasi-partnership company), then his exclusion from management can amount to unfairly prejudicial conduct.

Answer 7

Re Ghyll Beck Driving Range Ltd (1993)

• The claimant and three others were members and directors of a quasi partnership company.
• Following an argument, the claimant was excluded from management by the others.

Question 8

Courts reluctant to grant permission for derivative claims to proceed

Answer 8

Franbar Holdings v Patel (2008)

Question 9

Dishonest acts cannot be ratified

Answer 9

Goldtrail Travel Ltd v Aydin (2015)

Question 10

Reflective loss principle established

Answer 10

Prudential Assurance Co Ltd v Newman Industries (1982)

Question 11

Leading case for Reflective Loss Principle

Answer 11

Sevilleja v Marex

Limits the principle to claims by shareholders, as a result of loss suffered by company, value of shares or distributions has been diminished

Question 12

Unfair prejudice claim
Members interests under s.994 wider than just membership rights case law

Answer 12

Gamlestaden Fastigheter AB v Baltic Partners Ltd

Question 13

Unfair prejudice claim
Disagreements between members are common and may not always result in an unfair prejudice claim

Answer 13

O’Neill v Phillips

Question 14

Companies performance does not justify a dividend payment it will not amount to an unfair prejudice claim

Answer 14

Metropolis Motorcycles

Question 15

Reflective loss principle - companies claim will trump that of the shareholder case law

Answer 15

Day v Cook

Question 16

Failure to pay a dividend amounting to unfair prejudice case law

Answer 16

Re McCarthy Surfacing Ltd

Question 17

Simple mismanagement not unfair prejudice case law

Answer 17

Re Elgindata