Sally Ann Gibbins v John Peter Francis Tierney & Ors
[2024] EWHC 2004 (Ch)
In the matter of Simmonds Transport Limited: Andrew Simmonds v Jeremy Paul Wilson & Ors.
24 February 2023
[2023] EWHC 289 (Ch)
High Court
Two brothers fought in court over family businesses. While the judge didn't believe early claims of unfairness, later actions by one brother, like stopping dividend payments and trying to shut down a company, were found to be unfair. The judge ordered the other brother to be bought out of the businesses.
Key Facts
- •Andrew Simmonds (Petitioner) filed two petitions under section 994 of the Companies Act 2006 against Simmonds Transport Limited (STL) and STA Vehicle Centres Ltd (STA).
- •STL and STA were alleged to be quasi-partnerships.
- •Andrew alleged unfair prejudice, including exclusion from management, questionable financial transactions, and non-payment of dividends.
- •The respondents denied the allegations and claimed Andrew's absence from work was the reason for the breakdown in the relationship.
- •A capacity assessment determined that Paul Simmonds lacked capacity to conduct litigation, requiring a litigation friend.
- •The court heard evidence from multiple witnesses, including the Simmonds brothers.
Legal Principles
Unfair prejudice under section 994 of the Companies Act 2006.
Companies Act 2006
Quasi-partnerships and equitable considerations.
Ebrahimi v Westbourne Galleries Ltd [1973] AC 360
Duties of directors under the Companies Act 2006.
Companies Act 2006
Valuation of shares in unfair prejudice cases.
Profinance Trust SA v Gladstone [2001] EWCA Civ 1031
Outcomes
STL was found to be a quasi-partnership.
The court considered the long-standing family business, informal management practices, and the shareholders' agreement.
Andrew's claims of unfair prejudice concerning exclusion from management and financial transactions in 2018 were dismissed.
The court found insufficient evidence to support claims of a plot to remove Andrew or that his health issues were caused by the respondents' conduct.
The court found that the respondents' actions from September 2018 onwards were unfairly prejudicial.
Threats to suspend dividends, unjustified suspension of dividends, withholding of information, and an attempt to liquidate STA were deemed unfairly prejudicial.
Andrew's shares in STL and STA were ordered to be bought out at their value as of September 5, 2019, without a minority discount.
This date reflects Andrew's earlier attempts to negotiate a buyout and accounts for the subsequent prejudicial conduct. The court adjusted the valuation to account for improperly levied management charges on STA.
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