Minority shareholder fails in unfair prejudice claim (Re Cardiff City Football Club (Holdings) Limited)

Table of contents

• What is unfair prejudice?
• Factual background
• Mr Isaac’s allegations
• The decision
• Did Mr Tan’s actions constitute conduct of the affairs of the Company?
• Did Mr Tan act unlawfully or unconscionably?
• Did the directors act independently? (CA 2006, s 173)
• Did the directors act for a proper purpose? (CA 2006, s 171)
• Commentary

Article summary

Dispute Resolution analysis: Debt-to-equity transactions can raise thorny shareholder issues in private limited companies, which is exactly what happened at Cardiff City Football Club between 2016 and 2018. The resulting minority shareholder claim failed on almost every point, but the judgment provides a helpful guide to the (sometimes counter-intuitive) nuances of unfair prejudice petitions and illustrates the court’s pragmatic approach to disposing of such proceedings. Written by Laura Jenkins, partner, Alexander Lerner, senior associate, and Mary Read, associate, at Stewarts.