Joanne Brierley v Christopher Howe & Anor (Re 36 Bourne Street Ltd)
[2024] EWHC 2789 (Ch)
Kerrie Heywood v Kevin Freakley & Ors.
2 November 2022
[2022] EWHC 2762 (Ch)
High Court
Imagine two people start a business together, agreeing to split the profits 50/50. One person secretly changes things so they get 75% and the other gets only 25%. Then, that same person secretly gives away a big chunk of the business's future earnings. That's what happened here, and the court said it was unfair.
Key Facts
- •Kerrie Heywood (KH), a shareholder in K&B Homes Ltd (the Company), claimed unfair prejudice under s.994 Companies Act 2006.
- •KH's shareholding was diluted from 50% to 25% without her consent.
- •The Company released its rights under a building agreement, benefiting the Freakley family (Respondents).
- •Respondents did not attend trial, claiming lack of funds and health issues.
- •The court considered whether KH had standing to petition, given potential nominee shareholder status.
- •The court examined the circumstances of share allocation and the building agreement release.
Legal Principles
Unfairly prejudicial conduct under s.994 Companies Act 2006.
Companies Act 2006
Standing of a nominee shareholder to petition under s.994.
Atlasview Ltd v Brightview Ltd [2004] 2 BCLC 191; Re McCarthy Surfacing Limited [2006] EWHC 832 (Ch)
Pre-emption rights for share allotments (s.561 CA 2006).
Companies Act 2006
Fiduciary duties of company directors.
Case law on director's duties (implied)
Outcomes
KH's petition for unfair prejudice was successful.
The court found the share dilution and release of the building agreement rights to be unfairly prejudicial to KH.
KH has standing to petition under s.994 despite being a potential nominee shareholder.
The court held that the registered shareholder, not the beneficial owner, has standing. The interests of KH and the beneficial owner (Mr. Banks) were aligned in this case.
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