“it would be impossible, and wholly undesirable, to define the circumstances in which these [equitable] considerations may arise. Certainly the fact that the company is a small one, or a private company, is not enough. There are very many of these where the association is a purely commercial one, and in which it can safely be said that the basis of the association is adequately and exhaustively laid down in the articles. The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements: (i) an association formed or continued on the basis of a personal relationship, involving mutual confidence-this element will often be found where a pre-existing Partnership has been converted into a limited company; (ii) an agreement, or understanding, that all, or some (for there may be ‘sleeping’ members), of the shareholders shall participate in the conduct of the business; (iii) restriction upon the transfer of the members’ interest in the company-so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.”
“A director of a company must exercise independent judgment.”
“The basic requirement is to consider the appropriate inference, if any, to be drawn and the weight to be attached to it in the particular circumstances of the case….”
“… it may be accepted that the effect of the party failing to call a witness who would be expected to be available to such party to give evidence for such party and who in the circumstances would have a close knowledge of the facts on a particular issue, would be to increase the weight of the proofs given on such issue by the other party and to reduce the value of the proofs on such issue given by the party failing to call the witness….”
“Over that Christmas [2015] Paul informed me that he was going to be growing hundreds of acres of potatoes to supply to [PLC] mostly on rented land. First he told me 200 acres then it increased to 300 acres and I believe that he in fact planted over 500 acres….. Paul informed me that [the Partnership] would be undertaking husbandry (provision of agricultural services including ploughing, cultivating, planting, spraying, irrigating, harvesting etc.)… He told me [the Partnership] would be providing all their services at the UK market rates for contractors to [PLC].”
“The answer to this question often turns on the fact that the powers which the shareholders have entrusted to the board are fiduciary powers, which must be exercised for the benefit of the company as a whole. If the board act for some ulterior purpose, they step outside the terms of the bargain between the shareholders and the company. As a matter of ordinary company law, this may or may not entitle the individual shareholder to a remedy. It depends upon whether he can bring himself within one of the exceptions to the rule in Foss v Harbottle (1843) 2 Hare 461. But the fact that the board are protected by the principle of majority rule does not necessarily prevent their conduct from being unfair within the meaning of Section 459 [the predecessor to section 994] enabling the court in an appropriate case to outflank the rule in Foss v Harbottle was one of the purposes of the section.” (c) breach by the Respondents of their fiduciary duties and/or the duties that they owe to the Group companies under CA 2006 is at least prima facie conduct which is unfair to Andrew. Mr Zaman refers to Charman and Du Toit Shareholder Actions 2nd edn. para 9.73 where it is said that: “Members’ interests are informed by the nature of the rights that is sought to be protected: broadly speaking strict legal rights and equitable rights. The strictly legal rights involve an expectation that the de facto controllers of a company will conduct the affairs of the company in accordance with its constitution and where required the applicable Companies Act, in compliance with their fiduciary duties towards the company. They are the so-called ‘strict legal rules’. Breach of the conduct expected of them as prescribed by the law governing their position, is prima facie detrimental to members’ interests.; and (d) whilst prejudice often is financial and measured in terms of diminution in the value of the shareholder’s shareholding, in the relevant company, prejudice can be sustained by the shareholder in other ways, Mr Zaman refers to the judgment of HHJ Purle QC in Re Sunrise Radio Limited[2009] EWHC 2893 (Ch) at paragraph 4: “There must be both prejudice and unfairness. Prejudice will most often be established by reference to conduct having a depressive effect (actual or threatened) on the value of the petitioner's shareholding, which will in most cases be a minority holding, typically in a private company with restrictions on transfer. Unfairness, in turn, most often connotes some breach of the articles, statute, or general principles of company law. However, the operation of the section is not necessarily limited to such cases. The test is an objective one. There may be mutual understandings between shareholders giving rise to special rights of a quasi-partnership kind. Even without that, the conduct of the company's directors may, whether by reason of malevolence, crass stupidity, or something in between, fall so far short of the standards to be expected of them as to lead to the conclusion that the petitioning shareholder cannot reasonably be expected to have the minimum of trust and confidence in the integrity or basic competence of the board that any shareholder is entitled ordinarily to expect. This is so irrespective of any impact on the value of his or her shares, and irrespective of whether any specific breach of the articles, statute, or the general principles of company law is involved.”