Cusack v Holdsworth & Anor [2016] EWHC 3084 (Ch) (29 November 2016)

Cusack v Holdsworth & Anor [2016] EWHC 3084 (Ch) (29 November 2016)

There was a binding shareholder agreement and a common understanding to demerge the business, which constrained strict legal rights. The university fees were authorised. The pension payment to Mr Holdsworth was unauthorised and constituted a breach of directors' duties and the SHA. Premature diversion of contracts before the end of the agreed demerger period was unfairly prejudicial to Mr Cusack as a member.

Citation
[2016] EWHC 3084 (Ch)
Parties
Petitioner: John Cusack; First Respondent: James Holdsworth; Second Respondent: Quantum Survey Management Limited
Jurisdiction
England and Wales
Judgment Date
29 November 2016
Procedural Posture
Unfair Prejudice Petition Under Companies Act 2006 S.994 / Final Judgment
Outcome
Petition partially upheld
Legal Topics
Unfair Prejudice, Directors' Duties, Shareholder Agreements, Corporate Governance, Breach of Fiduciary Duty
Company Law Equity Unfair Prejudice Directors' Duties Shareholder Agreements Corporate Governance Breach of Fiduciary Duty

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Parties

John Cusack

Petitioner

James Holdsworth

First Respondent

Quantum Survey Management Limited

Second Respondent

Procedural Posture

Unfair Prejudice Petition Under Companies Act 2006 S.994 / Final Judgment

Legal Issues

  1. 1 Was the shareholder agreement (SHA) binding?
  2. 2 Were university fees authorised by the company?
  3. 3 Was the pension payment to Mr Holdsworth authorised?

Ratio Decidendi

There was a binding shareholder agreement and a common understanding to demerge the business, which constrained strict legal rights. The university fees were authorised. The pension payment to Mr Holdsworth was unauthorised and constituted a breach of directors' duties and the SHA. Premature diversion of contracts before the end of the agreed demerger period was unfairly prejudicial to Mr Cusack as a member.

Court Disposition

Petition partially upheld

Orders

  • Mr Holdsworth to repay £120,000 pension payment to Quantum Survey Management Limited
  • Quantum Survey Management Limited to be divided as per common understanding, with Mr Cusack retaining Sheffield business and Mr Holdsworth the South-West