Mantir Singh Sahota v Albinder Singh Sahota & Ors
[2024] EWHC 2165 (Ch)
Andrew James Bridgen v Paul Julian Bridgen & Ors
15 December 2023
[2023] EWHC 3232 (Ch)
High Court
Two brothers fought over a family business. One brother (Paul) cheated the company, the court decided the other brother (Andrew) should buy him out, but at a lower price because of Paul's bad actions. This way, everyone gets their fair share and the fighting stops.
Key Facts
- •Andrew James Bridgen MP (Andrew) petitioned against three companies (ABPT, BIL, ABF) under Section 994 of the Companies Act 2006, alleging unfairly prejudicial conduct.
- •The court initially determined that only some allegations against Paul (Andrew's brother) regarding ABPT's subsidiary, PLC, were well-founded.
- •The key findings of unfair prejudice concerned Paul's undisclosed use of PLC's resources (employees, fuel, equipment) for his partnership's benefit.
- •The remedies hearing focused on quantifying PLC's losses and determining appropriate relief under Section 996.
- •Expert evidence from forensic accountants (Mr. Bell for Andrew, Mr. Lewis for Paul) was presented, along with a corporate finance expert report (Mr. Barton for Andrew).
Legal Principles
A petitioner need not come to court with 'clean hands', but their conduct may affect the remedy granted.
Re London School of Electronics Ltd [1986] Ch 211
The petitioner's conduct must be sufficiently serious and closely related to the respondent's unfairly prejudicial conduct to affect the remedy.
Richardson v Blackmore [2005] EWCA Civ 1356
If the petitioner's conduct doesn't render the respondent's conduct not unfair or prejudicial, it shouldn't usually affect the remedy.
Grace v Biagioli [2005] EWCA Civ 1222
The court has wide discretion under Section 996 to grant relief proportionate to the unfair prejudice found.
Companies Act 2006, Section 996
The court should consider all relevant circumstances, including the interests of creditors and other shareholders, when deciding on remedy.
Re Neath Rugby (No.2) [2009] EWCA Civ 261
A buyout order is the usual remedy for unfairly prejudicial conduct in small private companies, aiming for a 'clean break'.
Grace v Biagioli [2005] EWCA Civ 1222
Outcomes
Andrew's conduct, while serious, wasn't sufficiently connected to Paul's unfairly prejudicial conduct to affect the remedy.
Andrew's misconduct mostly occurred after Paul's unfairly prejudicial actions began, and there was no direct or indirect causal link.
The court ordered Andrew to purchase Paul's shares in ABPT.
This remedy was deemed most likely to achieve a clean break, considering the interconnectedness of the companies involved and the parties' abilities to fund the purchase. Andrew's offer to purchase shares of other shareholders in ABPT and BIL further supported this decision.
The value of Paul's shares was adjusted to reflect PLC's losses caused by Paul's conduct.
44.4% of PLC's losses (approximately £200,608.21) were deducted from the value of Paul's shares.