- Unfair prejudice—Court of Appeal consideration of application to strike out parts of a petition (Zedra Trust v The Hut Group)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Dispute Resolution analysis: A petitioner claiming unfair prejudice is entitled to rely on breaches by the directors of their fiduciary and statutory duties to the company as conduct of the affairs of the company which was unfairly prejudicial to the petitioner. In this case, Zedra (the petitioner) alleged that the conduct of the directors in the form of breaches of their statutory duties, was unfairly prejudicial to Zedra as a shareholder. That was a classic formulation of unfair prejudice in line with the approach adopted by the Court of Appeal in Re Saul D Harrison & Sons and of the House of Lords in O’Neill v Phillips. It is not necessary for the shareholder to plead and prove a breach of a fiduciary or statutory duty owed to the petitioner personally. However, the court will scrutinise with care allegations of bad faith akin to fraud and if the petition does not plead facts that are capable of supporting them, such allegations will be struck out. Written by David Fisher, barrister at New Square Chambers.
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