Tosi Ltd v 99 Hippos Ltd & Anor [2023] EWHC 852 (Ch) (19 April 2023)

Tosi Ltd v 99 Hippos Ltd & Anor [2023] EWHC 852 (Ch) (19 April 2023)

None of the pleaded grounds of unfair prejudice were made out by either party. Mr Tillett was not excluded from management, as his lack of involvement was by choice and pursuant to agreed interim arrangements. Ms Fairclough did not misappropriate the CBILS loan or divert business; all funds were accounted for and used for company purposes. Allegations of excessive inter-company charges or profit diversion by Mr Tillett were unsubstantiated by evidence. The deadlock and breakdown in relations, while regrettable, did not amount to unfair prejudice under s.994. Both parties failed to prove conduct by the other that was unfairly prejudicial within the meaning of the statute.

Citation
[2023] EWHC 852 (Ch)
Parties
Petitioner (first Petition), First Respondent (second Petition), First Respondent (third Petition): TOSI LIMITED; First Respondent (first Petition), Second Respondent (second Petition): 99 HIPPOS LIMITED; Second Respondent (first Petition), Petitioner (second Petition), Petitioner (third Petition): EMMA LOUISE FAIRCLOUGH; First Respondent (third Petition): ROBERT EDWARD TILLETT; Second Respondent (third Petition): FINSBURY CO LIMITED; Third Respondent (third Petition): JUSHO LIMITED
Jurisdiction
England and Wales
Judgment Date
19 April 2023
Procedural Posture
Company/shareholder Dispute (unfair Prejudice Petitions) / Final Judgment After Trial of Consolidated Petitions
Outcome
All petitions dismissed.
Legal Topics
Unfair Prejudice, Section 994 Companies Act 2006, Director Duties, Shareholder Remedies, Deadlock, Inter Company Transactions
Company Law Insolvency Law Unfair Prejudice Section 994 Companies Act 2006 Director Duties Shareholder Remedies Deadlock Inter Company Transactions

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Parties

TOSI LIMITED

Petitioner (first Petition), First Respondent (second Petition), First Respondent (third Petition)

99 HIPPOS LIMITED

First Respondent (first Petition), Second Respondent (second Petition)

EMMA LOUISE FAIRCLOUGH

Second Respondent (first Petition), Petitioner (second Petition), Petitioner (third Petition)

ROBERT EDWARD TILLETT

First Respondent (third Petition)

FINSBURY CO LIMITED

Second Respondent (third Petition)

JUSHO LIMITED

Third Respondent (third Petition)

Procedural Posture

Company/shareholder Dispute (unfair Prejudice Petitions) / Final Judgment After Trial of Consolidated Petitions

Legal Issues

  1. 1 Whether the affairs of 99 Hippos Limited, Jusho Limited, and Finsbury Co Limited were conducted in a manner unfairly prejudicial to the interests of members under s.994 Companies Act 2006
  2. 2 Whether Mr Tillett was excluded from management of 99 Hippos Limited
  3. 3 Whether Ms Fairclough misappropriated company funds or diverted business

Ratio Decidendi

None of the pleaded grounds of unfair prejudice were made out by either party. Mr Tillett was not excluded from management, as his lack of involvement was by choice and pursuant to agreed interim arrangements. Ms Fairclough did not misappropriate the CBILS loan or divert business; all funds were accounted for and used for company purposes. Allegations of excessive inter-company charges or profit diversion by Mr Tillett were unsubstantiated by evidence. The deadlock and breakdown in relations, while regrettable, did not amount to unfair prejudice under s.994. Both parties failed to prove conduct by the other that was unfairly prejudicial within the meaning of the statute.

Court Disposition

All petitions dismissed.

Orders

  • No relief granted under any of the petitions.
  • No order for buy-out, winding up, or compensation.