Joy Margaret Griffiths v John Tudor Griffiths & Ors
[2023] EWHC 175 (Ch)
Martin Hague & Anor v David Hague & Ors
3 June 2024
[2024] EWHC 1469 (Ch)
High Court
A family fight over a company led to a court case. The judge said some of the accusations weren't specific enough, but one serious accusation – that the directors acted against the best interests of the company – was clear enough to proceed.
Key Facts
- •Unfair prejudice petition concerning shareholdings in Hague Plant Ltd.
- •Petitioners (Martin and Jean Hague) are minority shareholders seeking an order for the Respondents (David and Dianne Hague) to buy their shares.
- •Respondents applied for directions limiting the Petitioners' case to matters sufficiently pleaded in the petition.
- •Three areas of the petition were challenged as insufficiently pleaded: allegations of dishonest conduct (paragraphs 153-155), acting contrary to legal advice (paragraph 98), and breach of section 172 of the Companies Act 2006 (paragraph 185.2.1).
Legal Principles
Allegations of dishonesty must be pleaded clearly and with particularity.
Belmont Finance v Williams Furniture [1979] Ch 250
A director must act in a way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (Companies Act 2006, section 172).
Companies Act 2006, section 172
Failure to act in good faith under section 172 can involve a version of dishonesty.
Armitage v Nurse [1998] Ch 241; GHLM v Maroo [2012] EWHC 61 (Ch)
Outcomes
Directions granted limiting the Petitioners' case on allegations of dishonest conduct relating to cash payments (paragraphs 153-155) and acting contrary to legal advice (paragraph 98).
The allegations were insufficiently particularized; the court emphasized the need for clarity and specificity in pleading dishonesty, and the Respondents' right to know the case they have to meet.
No direction granted on the allegation of breach of section 172 of the Companies Act 2006 (paragraph 185.2.1).
The court found the allegation, when viewed in the context of the entire petition, to be sufficiently clear and particularized. The court considered the alleged ongoing failure to re-engage with MHH and Martin, motivated by personal animosity, sufficient.