| Commentary

121 Meaning of unfair prejudice

| Commentary

121 Meaning of unfair prejudice

The court must decide whether the action which forms the basis of the petitioner’s complaint is prejudicial to the interests of members in a commercial sense1. If so, it must then go on to consider whether this was unfair2.

In O’Neill v Phillips3, the first House of Lords decision on the Companies Act 1985 Section 459 (the predecessor of Section 994 of the Companies Act 2006), Lord Hoffmann, with whom the other law lords agreed, stated that a shareholder will only be able to complain of unfair prejudice in one of two situations4:

  1. 121.1

        where there

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