John Seneschall v Trisant Foods Limited & Ors
[2024] EWHC 456 (Ch)
John Seneschall v Trisant Foods Limited (in liquidation) & Ors
3 May 2023
[2023] EWHC 1029 (Ch)
High Court
Imagine a business with two owners. One owner (the respondents) secretly planned to take over and kick out the other (Mr. Seneschall). They did this by firing him and hiding important financial information. The court said this was unfair and illegal. The investor who sided with the first owner tried to blame the other owner for their investment losses, but the court didn't believe them because they knew about the risks before investing. Now, a judge will decide what happens next.
Key Facts
- •Mr. John Seneschall brought an unfair prejudice petition under s.994 of the Companies Act 2006 against Trisant Foods Limited (in liquidation) and others.
- •The dispute centered on the alleged wrongful seizure of control of Trisant Foods by the respondents, leading to Mr. Seneschall's exclusion from the company's affairs.
- •Trisant Foods was a food production company jointly founded by Mr. Seneschall and Ms. Lynne Jones.
- •Market Fresh Limited, an investor and shareholder, counterclaimed, alleging deceit and breach of warranty by Mr. Seneschall.
- •The case involved a substantial documentary record and oral evidence from multiple witnesses.
- •Key agreements in dispute included a March Proposal for investment, an alleged Redemption Agreement, the Investment and Shareholders' Agreement (ISHA), and the Heads of Terms (HoTs).
Legal Principles
Unfair prejudice under s.994 of the Companies Act 2006 requires conduct that is both unfair and prejudicial to a member's interests.
Companies Act 2006, s.994(1)
Prejudice must be suffered by the petitioner in their capacity as a member, but may extend beyond damage to share value.
Re Coroin Ltd [2012] EWHC 2343
Unfairness is assessed against the legal and equitable background of the corporate structure, including articles of association and collateral agreements.
Grace v Biagioli & Others [2005] EWCA Civ 1222
Exclusion from management decisions can constitute unfairly prejudicial conduct.
Re Guidezone Ltd [2002] 2 BCLC 321
The tort of unlawful means conspiracy requires an agreement to injure the claimant by unlawful acts, causing them loss.
Kuwait Oil Tanker v Al Bader [2000] 2 All ER (Comm) 271
Justification is not a separate defence to unlawful means conspiracy; the focus is on whether there was just cause or excuse for the unlawful means used.
JSC BTA Bank v Khrapunov [2018] UKSC 19
Outcomes
The March Proposal was not a binding contract.
Lack of certainty in the email exchange, ongoing negotiations, and the subsequent ISHA superseding any prior agreement.
There was no contractually binding Redemption Agreement.
Inconsistent with the ISHA's entire agreement clause and the HoTs; no evidence of a separate agreement.
The affairs of the Company were conducted in a manner unfairly prejudicial to Mr. Seneschall's interests from late 2019.
Breaches of directors' duties, breaches of the ISHA, breaches of Mr. Seneschall's employment contract, and a concealed plan to exclude him.
There was an unlawful means conspiracy from June 2020 to exclude Mr. Seneschall.
Breaches of fiduciary duty by the respondents in connection with Mr. Seneschall's dismissal and subsequent exclusion.
Market Fresh's counterclaim for deceit and breach of warranty failed.
Market Fresh was aware of the Company's financial difficulties before investing; the alleged misrepresentations did not induce the investment.