Queensgate Place Limited v Solid Star Limited (in liquidation) & Ors

Queensgate Place Limited v Solid Star Limited (in liquidation) & Ors

The appropriate remedy for the unfair prejudice suffered by QPL is a buy-out of its shares in SSL by Prakash, Viking, and Minesh at a fair value reflecting the loss caused by the respondents' conduct. The valuation is based on a counter-factual scenario where the company's assets would have been realised and distributed absent the unfair prejudice, with liability apportioned according to each respondent's involvement. The court has discretion to order this remedy even though SSL is now insolvent, and limitation arguments do not bar relief in the circumstances of this case.

Parties
Petitioner: Queensgate Place Limited; First Respondent: Solid Star Limited (In Liquidation); Second Respondent: Viking World Investments SA; Third Respondent: Prakash Bhundia; Fourth Respondent: Minesh Bhundia; Fifth Respondent: Property X1 Limited
Jurisdiction
England and Wales
Judgment Date
24 July 2024
Procedural Posture
Company/shareholder Petition / Remedies/relief After Liability Judgment
Outcome
Buy-out order granted; apportionment of liability among respondents; quantum to be adjusted for tax if necessary.
Legal Topics
Unfair Prejudice, Remedies Under Companies Act, Shareholder Disputes, Director Duties, Valuation of Shares
Company Law Insolvency Law Unfair Prejudice Remedies Under Companies Act Shareholder Disputes Director Duties Valuation of Shares

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Parties

Queensgate Place Limited

Petitioner

Solid Star Limited (In Liquidation)

First Respondent

Viking World Investments SA

Second Respondent

Prakash Bhundia

Third Respondent

Minesh Bhundia

Fourth Respondent

Property X1 Limited

Fifth Respondent

Procedural Posture

Company/shareholder Petition / Remedies/relief After Liability Judgment

Legal Issues

  1. 1 What is the appropriate remedy for unfair prejudice sustained by a member of a company?
  2. 2 How should liability and quantum be apportioned among multiple respondents for unfair prejudice?
  3. 3 What is the proper valuation date and method for a buy-out order in the context of an insolvent company?

Ratio Decidendi

The appropriate remedy for the unfair prejudice suffered by QPL is a buy-out of its shares in SSL by Prakash, Viking, and Minesh at a fair value reflecting the loss caused by the respondents' conduct. The valuation is based on a counter-factual scenario where the company's assets would have been realised and distributed absent the unfair prejudice, with liability apportioned according to each respondent's involvement. The court has discretion to order this remedy even though SSL is now insolvent, and limitation arguments do not bar relief in the circumstances of this case.

Court Disposition

Buy-out order granted; apportionment of liability among respondents; quantum to be adjusted for tax if necessary.

Orders

  • Prakash, Viking, and Minesh to purchase QPL's shares in SSL for £7,081,468 plus simple interest at 1% above Bank of England base rate from 29 October 2020 to the date of order, less any sums QPL receives from SSL's liquidation.
  • Prakash, Viking, and Minesh jointly and severally liable for 45.7% of the sum; Prakash and Viking jointly and severally liable for the remaining 54.3%.