Neil Worsley v Benjamin Gould & Ors
[2023] EWHC 3181 (Ch)
Paul Richard Knell & Ors v Eric Van Loo
25 August 2023
[2023] EWHC 2109 (Ch)
High Court
Two groups of business partners fell out over a property development deal. A judge said one group acted unfairly by kicking out the other and not pursuing a money claim. The judge ordered the unfair group to buy out the other group's share of the business.
Key Facts
- •Disputes arose from an alleged joint venture involving two development sites (Bridgwater and Buxton).
- •Claimants (Knells and their companies) alleged breach of joint venture agreement and breach of fiduciary duty by the Defendant (Van Loo).
- •A petition was filed under section 994 of the Companies Act 2006 alleging unfairly prejudicial conduct.
- •MTIM (Miller Turner Investment Management Limited) was the asset manager for the sites.
- •The Bridgwater project experienced significant delays and funding issues.
- •The Knells were removed as directors of MTIM.
- •The Buxton project ultimately proved unsuccessful.
Legal Principles
Unfairly prejudicial conduct under section 994 of the Companies Act 2006.
Companies Act 2006
Interpretation of contracts, including the power to correct drafting mistakes.
Arnold v Britton [2015] AC 1619
Reflective loss principle bars recovery of losses suffered by a company by its shareholders.
Sevilleja v Marex Financial [2021] AC 39
Directors' duties under section 175 of the Companies Act 2006 (conflict of interest).
Companies Act 2006
Equity in quasi-partnerships: inappropriate to apply minority discount.
Re Bird Precision Bellows Ltd [1984] Ch 419; CVC/Opportunity Equity Partners Ltd v Demarco Almeida [2002] BCLC 108
Section 996 of the Companies Act 2006 allows for a buy-out order as a remedy for unfair prejudice.
Companies Act 2006
Outcomes
Part 7 claim dismissed.
No legally binding oral joint venture agreement was found.
Petition under section 994 partially successful.
Unfairly prejudicial conduct was found in the removal of the Knells as directors and failure to pursue claims against BGL.
BDI ordered to purchase the Knells' shares in MTIM.
Appropriate remedy for the unfair prejudice found.
Claim for personal monetary remedy against First to Fourth Respondents rejected.
Claim not properly pleaded and not justified on the facts.
Claim for declaratory relief for breach of duty rejected.
Evidence did not support the allegations of breach of fiduciary duty.