Batesons Hotels (1958) Ltd, Re [2013] EWHC 2530 (Ch) (12 June 2013)

Batesons Hotels (1958) Ltd, Re [2013] EWHC 2530 (Ch) (12 June 2013)

Where all shareholders at the time of the impugned conduct (including trustees holding shares for a beneficiary) have unanimously consented to or ratified the conduct, a later registered shareholder deriving title from those trustees cannot complain of unfair prejudice under s.994 Companies Act 2006, absent a special agreement or understanding imposing equitable duties. The Duomatic principle applies, and the petitioner's beneficial interest does not override the effect of unanimous shareholder consent.

Citation
[2013] EWHC 2530 (Ch)
Parties
Appellant/petitioner: William Brian Bateson; First Respondent: David Brunton Bateson; Second Respondent: Batesons Hotels (1958) Limited
Jurisdiction
England and Wales
Judgment Date
12 June 2013
Procedural Posture
Appeal (companies Act 2006, S.994 Unfair Prejudice Petition) / Appeal From Order Striking Out Parts of Petition at First Instance
Outcome
Appeal dismissed; permission to appeal granted but appeal fails on the merits.
Legal Topics
Unfair Prejudice, Shareholder Rights, Ratification of Company Acts, Duomatic Principle, Beneficial Ownership, Strike Out Applications, Section 994 Companies Act 2006
Company Law Unfair Prejudice Shareholder Rights Ratification of Company Acts Duomatic Principle Beneficial Ownership Strike Out Applications Section 994 Companies Act 2006

Case Brief

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Parties

William Brian Bateson

Appellant/petitioner

David Brunton Bateson

First Respondent

Batesons Hotels (1958) Limited

Second Respondent

Procedural Posture

Appeal (companies Act 2006, S.994 Unfair Prejudice Petition) / Appeal From Order Striking Out Parts of Petition at First Instance

Legal Issues

  1. 1 Whether a petitioner can complain under s.994 of Companies Act 2006 about conduct occurring before becoming a registered shareholder
  2. 2 Whether unanimous shareholder consent (Duomatic principle) bars a later complaint of unfair prejudice by a successor in title
  3. 3 Whether beneficial ownership or trust arrangements confer standing to complain of prior conduct

Ratio Decidendi

Where all shareholders at the time of the impugned conduct (including trustees holding shares for a beneficiary) have unanimously consented to or ratified the conduct, a later registered shareholder deriving title from those trustees cannot complain of unfair prejudice under s.994 Companies Act 2006, absent a special agreement or understanding imposing equitable duties. The Duomatic principle applies, and the petitioner's beneficial interest does not override the effect of unanimous shareholder consent.

Court Disposition

Appeal dismissed; permission to appeal granted but appeal fails on the merits.

Orders

  • Appeal dismissed
  • Strike out of paragraphs 26-38, 51(i)-(v), and 1(a), (b), (d) of the petition affirmed