Martin Hague & Anor v David Hague & Ors
[2024] EWHC 1469 (Ch)
Joy Margaret Griffiths v John Tudor Griffiths & Ors
3 February 2023
[2023] EWHC 175 (Ch)
High Court
Two siblings fought over a family business. One sued the other for unfair treatment. The judge said the lawsuit could go ahead, even though some issues were complicated and needed more evidence.
Key Facts
- •Ms Joy Margaret Griffiths presented two unfair prejudice petitions against companies TGBM and ESG, alleging that the affairs of the companies were being conducted in a manner unfairly prejudicial to her interests.
- •Mr John Tudor Griffiths (Tudor), the first respondent, applied to strike out the petitions or parts thereof.
- •Joy and Tudor are siblings and shareholders in the family businesses, TGBM and ESG.
- •A central allegation is that Tudor gained control of the companies and excluded Joy, breaching an implied quasi-partnership agreement.
- •Tudor argued pleading issues, delay/acquiescence, and an offer to purchase Joy's shares.
- •The petitions alleged various acts and omissions, including excessive charges paid to another company controlled by Tudor, TGL.
Legal Principles
Test for striking out or summary judgment: A realistic, not fanciful, prospect of success; no mini-trial; short points of law decided if evidence is sufficient.
Global Asset Capital Inc v Aabar Block SARL [2017] EWHC Civ 37, [2017] 4 WLR 163; Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)
Unfair prejudice under s.994 Companies Act 2006: Requires (1) conduct of company affairs or act/omission of company; (2) prejudice to member's interests; (3) prejudice must be unfair.
Companies Act 2006, ss.994-996; Loveridge v Loveridge (No 1) [2020] EWCA Civ 1104; Re Kings Solutions Group Limited [2021] EWCA Civ 1943
Unfairness: Assessment made against legal background (articles, collateral agreements); breach of terms or inequitable exercise of legal rights; quasi-partnerships considered.
O’Neill v Phillips [1999] 1 WLR 1092; Hollington on Shareholders’ Rights
Pleading unfair prejudice: Concise statement of facts; personal acts of respondents pleadable only if causally connected to company acts/omissions; each company considered separately.
Re Kings Solutions Group Limited; Graham v Every [2014] EWCA Civ 191; Loveridge v Loveridge (No 2) [2021] EWCA Civ 1697
Delay/acquiescence: May bar relief, particularly for one-off events; but not necessarily a foregone conclusion, particularly for ongoing conduct.
Re Woven Rugs Limited [2010] EWHC 230 (Ch); Re Grandactual Ltd [2005] EWHC 1415 (Ch); Re Cherry Hill Skip Hire Limited [2022] EWCA Civ 531
Offer to acquire shares: Reasonable offer (fair value, no minority discount, etc.) may lead to petition dismissal; but must be a firm commitment, not a subject-to-contract negotiation.
O’Neill v Phillips
Outcomes
Petitions not struck out in entirety.
Sufficiently pleaded cause of action remains despite some objections.
Objections to improper joinder of trusts as respondents upheld.
Trusts lack legal personality; trustees should be named as respondents per CPR.
Objections to paragraphs detailing Tudor's acquisition of control rejected.
These details support the claim of breach of quasi-partnership and causal link to company conduct; not merely personal matters.
Objections concerning excessive head office charges rejected.
The issue of equitable restraints on company governance cannot be summarily determined; the objection pre-judges the claim.
Objections based on delay and acquiescence rejected.
Insufficient evidence to determine summarily; the issues require a full trial.
Objection based on Tudor's offer to purchase shares rejected.
No firm commitment or agreed valuation mechanism; offer remains subject to contract.
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