Harris v Microfusion 2003-2 LLP & Ors

Harris v Microfusion 2003-2 LLP & Ors

The proposed claims did not allege deliberate and dishonest breach of duty or personal benefit to the alleged wrongdoers. Therefore, they did not fall within the 'fraud on the minority' exception to the rule in Foss v Harbottle, and permission to continue the derivative claims should not be granted.

Parties
Appellant in A3/2015/1253, Respondent in A3/2015/1227: Brian John Harris; Respondent in A3/2015/1253, Appellant in A3/2015/1227: Microfusion 2003-2 LLP; Respondent in A3/2015/1253, Appellant in A3/2015/1227: Future Films (Management Services) Limited; Respondent in A3/2015/1253, Appellant in A3/2015/1227: Future Films (Partnership Services) Limited
Jurisdiction
England and Wales
Judgment Date
06 December 2016
Procedural Posture
Civil Appeal / Appeal From High Court Judgment on Permission to Continue Derivative Claims
Outcome
Appeal by Mr Harris dismissed; appeal by Future Films allowed.
Legal Topics
Derivative Actions, Foss V Harbottle Rule, Fraud on the Minority, Breach of Fiduciary Duty
Company Law Partnership Law Derivative Actions Foss V Harbottle Rule Fraud on the Minority Breach of Fiduciary Duty

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Parties

Brian John Harris

Appellant in A3/2015/1253, Respondent in A3/2015/1227

Microfusion 2003-2 LLP

Respondent in A3/2015/1253, Appellant in A3/2015/1227

Future Films (Management Services) Limited

Respondent in A3/2015/1253, Appellant in A3/2015/1227

Future Films (Partnership Services) Limited

Respondent in A3/2015/1253, Appellant in A3/2015/1227

Procedural Posture

Civil Appeal / Appeal From High Court Judgment on Permission to Continue Derivative Claims

Legal Issues

  1. 1 Whether the proposed derivative claims fall within the 'fraud on the minority' exception to the rule in Foss v Harbottle
  2. 2 Whether allegations of breach of duty without personal benefit or deliberate dishonesty suffice for the exception
  3. 3 Whether permission to continue the derivative claims should be granted

Ratio Decidendi

The proposed claims did not allege deliberate and dishonest breach of duty or personal benefit to the alleged wrongdoers. Therefore, they did not fall within the 'fraud on the minority' exception to the rule in Foss v Harbottle, and permission to continue the derivative claims should not be granted.

Court Disposition

Appeal by Mr Harris dismissed; appeal by Future Films allowed.

Orders

  • Permission to continue the derivative claims refused.