Homes for England v Nick Sellman (Holdings) Ltd & Anor

Homes for England v Nick Sellman (Holdings) Ltd & Anor

The statutory test under s.263 Companies Act 2006 does not apply to LLPs; the common law test governs permission for derivative actions against LLPs. The pleaded case did not satisfy the common law requirements for a derivative claim, as there was no allegation of dishonest breach of duty or personal benefit to the alleged wrongdoer. The appellant was permitted to raise this new legal point on appeal, and the appeal was allowed.

Parties
Claimant / First Respondent: Homes of England Limited; First Defendant / Appellant: Nick Sellman (Holdings) Limited; Second Defendant / Second Respondent: Bromham Road Development LLP
Jurisdiction
England and Wales
Judgment Date
21 April 2020
Procedural Posture
Civil Appeal / Appeal From County Court Decision on Permission to Continue Derivative Action
Outcome
Appeal allowed
Legal Topics
Derivative Actions, Limited Liability Partnerships, Common Law Vs Statutory Test, Permission to Continue Proceedings
Company Law Civil Procedure Derivative Actions Limited Liability Partnerships Common Law Vs Statutory Test Permission to Continue Proceedings

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Parties

Homes of England Limited

Claimant / First Respondent

Nick Sellman (Holdings) Limited

First Defendant / Appellant

Bromham Road Development LLP

Second Defendant / Second Respondent

Procedural Posture

Civil Appeal / Appeal From County Court Decision on Permission to Continue Derivative Action

Legal Issues

  1. 1 Whether the test for permission to continue a derivative action against an LLP is the statutory test under s.263 Companies Act 2006 or the common law test
  2. 2 Whether the judge erred in applying the statutory test instead of the common law test
  3. 3 Whether the appellant should be permitted to raise a new legal point on appeal

Ratio Decidendi

The statutory test under s.263 Companies Act 2006 does not apply to LLPs; the common law test governs permission for derivative actions against LLPs. The pleaded case did not satisfy the common law requirements for a derivative claim, as there was no allegation of dishonest breach of duty or personal benefit to the alleged wrongdoer. The appellant was permitted to raise this new legal point on appeal, and the appeal was allowed.

Court Disposition

Appeal allowed

Orders

  • Permission to appeal granted
  • Permission to raise new legal point on appeal granted