Saxon Woods Investments Ltd v Costa & Ors [2024] EWHC 387 (Ch) (22 February 2024)

Saxon Woods Investments Ltd v Costa & Ors [2024] EWHC 387 (Ch) (22 February 2024)

The Company, through Mr Costa, failed to comply with the mandatory requirements of clause 6.2 of the Shareholders' Agreement by not properly engaging an investment bank to cause an Exit after 31 December 2019 and not working in good faith towards an Exit. This failure constituted conduct unfairly prejudicial to Saxon Woods as a shareholder under s.994 of the Companies Act 2006. Mr Costa was sufficiently responsible for and connected to this conduct to justify a remedy against him.

Citation
[2024] EWHC 387 (Ch)
Parties
Petitioner: Saxon Woods Investments Limited; First Respondent: Francesco Costa; Second Respondent: Far East Media Holdings Pte Ltd; Third Respondent: Grosvenor Investment Project Limited; Fourth Respondent: HDO Holding Limited; Fifth Respondent: Bay Capital Investments Limited; Sixth Respondent: Khattar Holdings Private Limited; Seventh Respondent: Simon Powell; Eighth Respondent: Spring Media Investments Limited
Jurisdiction
England and Wales
Judgment Date
22 February 2024
Procedural Posture
Unfair Prejudice Petition Under Companies Act 2006 S.994 / Final Judgment After Trial
Outcome
Petition upheld as against Mr Costa; relief to be determined at a further hearing.
Legal Topics
Unfair Prejudice, Shareholders' Agreements, Directors' Duties, Remedies for Unfair Prejudice, Interpretation of Contracts
Company Law Contract Law Unfair Prejudice Shareholders' Agreements Directors' Duties Remedies for Unfair Prejudice Interpretation of Contracts

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Parties

Saxon Woods Investments Limited

Petitioner

Francesco Costa

First Respondent

Far East Media Holdings Pte Ltd

Second Respondent

Grosvenor Investment Project Limited

Third Respondent

HDO Holding Limited

Fourth Respondent

Bay Capital Investments Limited

Fifth Respondent

Khattar Holdings Private Limited

Sixth Respondent

Simon Powell

Seventh Respondent

Spring Media Investments Limited

Eighth Respondent

Procedural Posture

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

Legal Issues

  1. 1 Whether the failure to achieve an Exit and engage an investment bank to cause an Exit as required by the Shareholders' Agreement constituted unfair prejudice under s.994 of the Companies Act 2006
  2. 2 Whether Mr Costa's conduct as director was sufficiently connected to the alleged unfair prejudice to justify a remedy against him
  3. 3 Whether the board's reliance on advice and the engagement of Jefferies satisfied the contractual and statutory obligations

Ratio Decidendi

The Company, through Mr Costa, failed to comply with the mandatory requirements of clause 6.2 of the Shareholders' Agreement by not properly engaging an investment bank to cause an Exit after 31 December 2019 and not working in good faith towards an Exit. This failure constituted conduct unfairly prejudicial to Saxon Woods as a shareholder under s.994 of the Companies Act 2006. Mr Costa was sufficiently responsible for and connected to this conduct to justify a remedy against him.

Court Disposition

Petition upheld as against Mr Costa; relief to be determined at a further hearing.

Orders

  • Declaration that the affairs of the Company have been conducted in a manner unfairly prejudicial to the interests of Saxon Woods as a member
  • Order that Mr Costa is to purchase the Petitioner's shares in the Company, with valuation and terms to be determined at a further hearing