Estera Trust (Jersey) Ltd & Anor v Singh & Ors

Estera Trust (Jersey) Ltd & Anor v Singh & Ors

The court held that the company was not a quasi-partnership and no enforceable equitable rights to management participation existed for the petitioners. However, Jasminder Singh breached fiduciary duties by diverting corporate opportunities (Winchfern and Expotel) and failing to disclose conflicts of interest. The investigation into these breaches was inadequate and misleading to shareholders. The company also unfairly distributed profits to Jasminder Singh by way of excessive remuneration instead of dividends, prejudicing minority shareholders. Although the petitioners delayed in bringing the claim, this did not bar relief but justified an earlier valuation date for their shares. The...

Parties
First Petitioner: Estera Trust (Jersey) Limited; Second Petitioner: Herinder Singh; First Respondent: Jasminder Singh; Second Respondent: Verite Trust Company Limited; Third Respondent: Jemma Trust Company Limited; Fourth Respondent: Edwardian Group Limited; Fifth Respondent: Jasminder Singh and Herinder Singh (as trustees of the English Trusts)
Jurisdiction
England and Wales
Judgment Date
05 July 2018
Procedural Posture
Petition Under Companies Act 2006, S.994 996 (unfair Prejudice) / Final Judgment After Full Trial
Outcome
Petition allowed in part. Share purchase order granted.
Legal Topics
Unfair Prejudice, Quasi Partnership, Breach of Fiduciary Duty, Corporate Opportunity, Directors' Remuneration, Disclosure of Interest, Minority Shareholder Rights, Remedies for Unfair Prejudice
Company Law Equity and Trusts Unfair Prejudice Quasi Partnership Breach of Fiduciary Duty Corporate Opportunity Directors' Remuneration Disclosure of Interest +2 more

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Parties

Estera Trust (Jersey) Limited

First Petitioner

Herinder Singh

Second Petitioner

Jasminder Singh

First Respondent

Verite Trust Company Limited

Second Respondent

Jemma Trust Company Limited

Third Respondent

Edwardian Group Limited

Fourth Respondent

Jasminder Singh and Herinder Singh (as trustees of the English Trusts)

Fifth Respondent

Procedural Posture

Petition Under Companies Act 2006, S.994 996 (unfair Prejudice) / Final Judgment After Full Trial

Legal Issues

  1. 1 Whether the affairs of Edwardian Group Limited were conducted in a manner unfairly prejudicial to the interests of the petitioners as members under s.994 Companies Act 2006
  2. 2 Whether the company was a quasi-partnership conferring equitable rights on the petitioners
  3. 3 Whether Jasminder Singh breached fiduciary duties regarding Winchfern and Expotel investments

Ratio Decidendi

The court held that the company was not a quasi-partnership and no enforceable equitable rights to management participation existed for the petitioners. However, Jasminder Singh breached fiduciary duties by diverting corporate opportunities (Winchfern and Expotel) and failing to disclose conflicts of interest. The investigation into these breaches was inadequate and misleading to shareholders. The company also unfairly distributed profits to Jasminder Singh by way of excessive remuneration instead of dividends, prejudicing minority shareholders. Although the petitioners delayed in bringing the claim, this did not bar relief but justified an earlier valuation date for their shares. The...

Court Disposition

Petition allowed in part. Share purchase order granted.

Orders

  • Jasminder Singh and the company to purchase the petitioners' shares at a fair price reflecting marriage value, with a valuation date of June 2014 (adjusted for delay).
  • No order for pro rata (non-discounted) value; price to reflect market value plus 50% of marriage value.