Martin Hague & Anor v David Hague & Ors
[2024] EWHC 1469 (Ch)
John Leslie Taylor v The Whitehall Partnership Limited & Anor.
17 March 2023
[2023] EWHC 596 (Ch)
High Court
Two people equally own a business and are fighting. One wants to shut it down to get an unfair advantage. The judge says no, because he should have tried to sell his part of the business first instead of trying to be sneaky.
Key Facts
- •Contributory's petition to wind up Whitehall Partnership Limited (the Company) by John Leslie Taylor (Petitioner), a 50% shareholder.
- •Respondent is Petitioner's former wife, Joanne Taylor, holding the other 50% of shares.
- •Petitioner claims deadlock and breach of the underlying basis of the Company's setup under s. 122(1)(g) Insolvency Act 1986.
- •Respondent opposes winding up, proposing alternative solutions like joint bank account access, appointment of an independent professional, and joint signatory requirements on company records.
- •Petitioner asserts Company solvency, but Judge questions this.
- •Petitioner threatens resignation if petition dismissed.
- •Judge suggests administration as more appropriate than winding up due to deadlock.
- •Petitioner's undisclosed motive appears to be to benefit from winding up to the detriment of Respondent by possibly taking clients to his new enterprise.
- •Petitioner previously brought an unfair prejudice petition under s. 994 of the Companies Act 2006 which he discontinued.
- •Significant evidence of the Petitioner's misconduct towards the Respondent.
Legal Principles
A company may be wound up if the court finds it 'just and equitable'.
Insolvency Act 1986, s. 122(1)(g)
Court has wide discretion in winding-up orders, but must act judicially.
Insolvency Act 1986, s. 125(1)
If other remedies are available, court considers petitioner's reasonableness in seeking winding up.
Insolvency Act 1986, s. 125(2)
Winding up is a remedy of last resort, and exceptional in shareholder disputes.
Re Westbourne Galleries Ltd, Ebrahimi v. Westbourne Galleries Ltd [1973] AC 360; Lau v. Chu [2020] UKPC 24; Fulham Football Club (1987) Ltd v Richards [2012] Ch 333
Petitioner must demonstrate tangible benefit from winding up, usually pecuniary.
Re Rica Gold Washing Co Ltd (1879) 11 Ch D 36; Re Chesterfield Catering Co Limited [1977] Ch 373
Winding up not granted if petitioner's misconduct caused deadlock or breakdown of trust.
Re Westbourne Galleries Ltd
Court considers all relevant matters at the hearing date when deciding on winding up.
Lau v Chu
Outcomes
Petition dismissed.
Petitioner failed to reasonably pursue alternative remedies before resorting to winding-up. His conduct contributed significantly to the deadlock and lacked 'clean hands'. His motive appeared to be to gain an unfair advantage, not an orderly winding-up.