Neil Worsley v Benjamin Gould & Ors
[2023] EWHC 3181 (Ch)
Peter Charles Willoughby v Eric Martin Cole & Anor
4 July 2024
[2024] EWHC 1410 (Ch)
High Court
A business partner was removed from a company. He sued, saying it was unfair. The court threw out old accusations against him because they weren't relevant to why he was fired. While newer issues with his work were mentioned, the court said those weren't serious enough to justify firing him without a fair deal. So, the court sided with the business partner, but noted his behaviour would still affect what he gets.
Key Facts
- •Simply Naturals Limited's (the Company) affairs are the subject of a petition under section 994 of the Companies Act 2006.
- •Petitioner (Willoughby) alleges unfairly prejudicial conduct by Respondents (Cole and Evans), who removed him as a director.
- •Respondents deny unfair prejudice, citing Petitioner's misconduct as justification.
- •Petitioner applies to strike out parts of Respondents' Defence and/or for summary judgment.
- •The dispute involves allegations of misrepresentation, breaches of director's duties, and poor performance by the Petitioner.
Legal Principles
Summary judgment principles as outlined in EasyAir Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) and King v Stiefel [2021] EWHC 1045 (Comm).
CPR r.24(2), EasyAir Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch), King v Stiefel [2021] EWHC 1045 (Comm)
Strike-out principles under CPR 3.4 and Practice Direction 3A, as summarized in Duchess of Sussex v Associated Newspapers Limited [2020] EWHC 1058 (Ch) and Vardy v Rooney [2021] EWHC 1888 (QB).
CPR 3.4, Practice Direction 3A, Duchess of Sussex v Associated Newspapers Limited [2020] EWHC 1058 (Ch), Vardy v Rooney [2021] EWHC 1888 (QB)
In unfair prejudice cases, the court considers whether the petitioner's exclusion was justified by their misconduct, and whether the objective test of fairness is met, even if the respondent's reasons for exclusion are different. The court considers all relevant circumstances, not only those that caused the exclusion.
Waldron v Waldron [2019] BCC 862, In Re Dinglis Properties Ltd [2019] EWHC 1664 (Ch)
Serious misconduct related to company affairs can justify exclusion without a fair offer for shares. However, mere incompetence, misconduct, or breakdown of confidence is insufficient.
O’Neill v Phillips [1999] 1 WLR 1092, Ritchie v Kolah [2021] EWHC Ch, Re Edwardian Group [2018] EWHC 1715 (Ch)
Outcomes
Old Allegations (misrepresentation, serious breaches of director duties from years prior) struck out.
Irrelevant to the 2023 removal; vague, incoherent, and would obstruct just disposal of proceedings; no contemporaneous evidence linking them to the removal.
Summary judgment granted on the Justification Issue in favour of the Petitioner.
New Allegations (lateness, personal matters at work) insufficiently serious to justify removal without a fair offer; even if proven, they do not objectively justify the removal.
Breaches of duty allegations in paragraphs 5(j)(iv) and 5(j)(v), and paragraph 5(j)(ii) (insofar as it relates to the Old Allegations) struck out.
Incoherent and lacking sufficient particulars.