Pickering v Hughes & Ors [2022] EWHC 3359 (Ch) (23 December 2022)

Pickering v Hughes & Ors [2022] EWHC 3359 (Ch) (23 December 2022)

The court found that, while there were serious disputes and allegations between the parties, the petitioner failed to establish that the conduct of the respondents amounted to unfair prejudice within the meaning of s994 Companies Act 2006, particularly given the insolvency of the companies and the lack of evidence that the petitioner's shares would have had value but for the alleged conduct. The administration and pre-pack sale were conducted with professional advice and for the benefit of creditors, not to strip value for the respondents. The petitioner's claims regarding exclusion and personal benefit were not substantiated to the required standard.

Citation
[2022] EWHC 3359 (Ch)
Parties
Petitioner: Lisa Pickering; First Respondent: John Robert Hughes; Second Respondent: James Charles Hughes; Third Respondent: Charles Arthur Hughes; Fourth Respondent: Portbond Limited; Fifth Respondent: London Wiper Company Limited
Jurisdiction
England and Wales
Judgment Date
23 December 2022
Procedural Posture
Unfair Prejudice Petition Under S994 Companies Act 2006 / Judgment After Split Trial on Liability/unfair Prejudice, Relief Reserved
Outcome
Petition dismissed
Legal Topics
Unfair Prejudice, Shareholder Remedies, Pre Pack Administration, Directors' Duties, Family Company Disputes
Company Law Insolvency Law Unfair Prejudice Shareholder Remedies Pre Pack Administration Directors' Duties Family Company Disputes

Case Brief

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Parties

Lisa Pickering

Petitioner

John Robert Hughes

First Respondent

James Charles Hughes

Second Respondent

Charles Arthur Hughes

Third Respondent

Portbond Limited

Fourth Respondent

London Wiper Company Limited

Fifth Respondent

Procedural Posture

Unfair Prejudice Petition Under S994 Companies Act 2006 / Judgment After Split Trial on Liability/unfair Prejudice, Relief Reserved

Legal Issues

  1. 1 Whether the affairs of Portbond Limited and its subsidiary were conducted in a manner unfairly prejudicial to the interests of Lisa Pickering as a member under s994 Companies Act 2006
  2. 2 Whether the conduct of the respondents before and during the administration, including the pre-pack sale, constituted unfair prejudice
  3. 3 Whether the petitioner has a sufficient financial interest to justify relief given the insolvency of the companies

Ratio Decidendi

The court found that, while there were serious disputes and allegations between the parties, the petitioner failed to establish that the conduct of the respondents amounted to unfair prejudice within the meaning of s994 Companies Act 2006, particularly given the insolvency of the companies and the lack of evidence that the petitioner's shares would have had value but for the alleged conduct. The administration and pre-pack sale were conducted with professional advice and for the benefit of creditors, not to strip value for the respondents. The petitioner's claims regarding exclusion and personal benefit were not substantiated to the required standard.

Court Disposition

Petition dismissed

Orders

  • Petition under s994 Companies Act 2006 dismissed
  • No relief granted to the petitioner