Batesons Hotels (1958) Ltd, Re

Batesons Hotels (1958) Ltd, Re

Where all shareholders, including trustees holding shares for a beneficiary, have unanimously consented to or ratified the conduct complained of, a subsequent registered member deriving title through those trustees cannot claim that such conduct was unfairly prejudicial under section 994 Companies Act 2006, absent a special agreement or understanding imposing equitable duties overriding the legal relationship between registered members.

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
Company Law Petition/appeal / Appeal From Order Striking Out Parts of Unfair Prejudice Petition
Outcome
Appeal dismissed
Legal Topics
Unfair Prejudice, Section 994 Companies Act 2006, Shareholder Rights, Duomatic Principle, Ratification by Shareholders, Beneficial Ownership Vs. Registered Membership
Company Law Unfair Prejudice Section 994 Companies Act 2006 Shareholder Rights Duomatic Principle Ratification by Shareholders Beneficial Ownership Vs. Registered Membership

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Parties

William Brian Bateson

Appellant/petitioner

David Brunton Bateson

First Respondent

Batesons Hotels (1958) Limited

Second Respondent

Procedural Posture

Company Law Petition/appeal / Appeal From Order Striking Out Parts of Unfair Prejudice Petition

Legal Issues

  1. 1 Whether a petitioner can complain of unfairly prejudicial conduct occurring before becoming a registered shareholder
  2. 2 Effect of unanimous shareholder consent (Duomatic principle) on unfair prejudice claims
  3. 3 Whether beneficial ownership prior to registration confers standing to complain under section 994

Ratio Decidendi

Where all shareholders, including trustees holding shares for a beneficiary, have unanimously consented to or ratified the conduct complained of, a subsequent registered member deriving title through those trustees cannot claim that such conduct was unfairly prejudicial under section 994 Companies Act 2006, absent a special agreement or understanding imposing equitable duties overriding the legal relationship between registered members.

Court Disposition

Appeal dismissed

Orders

  • Permission to appeal granted
  • Appeal against strikeout of petition paragraphs dismissed