Morris & Ors v Hateley, Re: Legal Costs Negotiators Ltd [1999] EWCA Civ 3059 (18 February 1999)

Morris & Ors v Hateley, Re: Legal Costs Negotiators Ltd [1999] EWCA Civ 3059 (18 February 1999)

Majority shareholders who have the power to control the company and remedy any alleged prejudice cannot invoke s.459 Companies Act 1985 to compel a minority shareholder to sell his shares, especially where the alleged unfairness has been remedied and there is no continuing unfairly prejudicial conduct of the company's affairs.

Citation
[1999] EWCA Civ 3059
Parties
Appellants: Morris & Ors; 1st Respondent: Hateley; 2nd Respondent: Legal Costs Negotiators Ltd
Jurisdiction
England and Wales
Judgment Date
18 February 1999
Procedural Posture
Appeal From Chancery Division (companies Court) / Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Unfair Prejudice, Minority Shareholder Rights, Quasi Partnership, Section 459 Companies Act 1985, Section 461 Companies Act 1985, Strike Out Applications
Company Law Unfair Prejudice Minority Shareholder Rights Quasi Partnership Section 459 Companies Act 1985 Section 461 Companies Act 1985 Strike Out Applications

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 13 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Morris & Ors

Appellants

Hateley

1st Respondent

Legal Costs Negotiators Ltd

2nd Respondent

Procedural Posture

Appeal From Chancery Division (companies Court) / Appeal Judgment

Legal Issues

  1. 1 Whether majority shareholders can bring a petition under s.459 Companies Act 1985 against a minority shareholder for unfair prejudice
  2. 2 Whether retention of shares by a dismissed minority shareholder in a quasi-partnership company constitutes unfair prejudice justifying a compulsory sale order

Ratio Decidendi

Majority shareholders who have the power to control the company and remedy any alleged prejudice cannot invoke s.459 Companies Act 1985 to compel a minority shareholder to sell his shares, especially where the alleged unfairness has been remedied and there is no continuing unfairly prejudicial conduct of the company's affairs.

Court Disposition

Appeal dismissed

Orders

  • Appellants to pay respondent's costs (excluding application to adduce additional evidence)