Routledge v Skerritt & Ors

Routledge v Skerritt & Ors

The Company, under the effective control of Mr Skerritt, never adopted a valid board policy on dividends as required by the Special Resolution and Shareholders Agreement. In the absence of such a policy, A and B shares rank pari passu for dividends. The non-payment of dividends on B shares, while substantial dividends were paid on A shares, was unfairly prejudicial to Mr Routledge and a breach of his rights as a member. Mr and Mrs Skerritt also breached their duties as directors by failing to consider the position of B shareholders and by not acting fairly between members. Acquiescence by Mr Routledge until February 2014 does not bar relief for subsequent conduct.

Parties
Petitioner: Michael Routledge; First Respondent: Richard James Skerritt; Second Respondent: Catherine Yvette Gabrielle Skerritt; Third Respondent: Skerritt Consultants Limited
Jurisdiction
England and Wales
Judgment Date
13 March 2019
Procedural Posture
Unfair Prejudice Petition Under Section 994 of the Companies Act 2006 / Judgment on Liability
Outcome
Liability established; unfair prejudice found; relief to be determined at subsequent hearing.
Legal Topics
Unfair Prejudice, Directors' Duties, Dividends, Shareholder Rights
Company Law Unfair Prejudice Directors' Duties Dividends Shareholder Rights

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 14 Party arguments 2 Amounts and remedies 7
Sign in to unlock

Parties

Michael Routledge

Petitioner

Richard James Skerritt

First Respondent

Catherine Yvette Gabrielle Skerritt

Second Respondent

Skerritt Consultants Limited

Third Respondent

Procedural Posture

Unfair Prejudice Petition Under Section 994 of the Companies Act 2006 / Judgment on Liability

Legal Issues

  1. 1 Whether the affairs of Skerritt Consultants Limited were conducted in a manner unfairly prejudicial to the interests of Mr Routledge as a member
  2. 2 Whether there was a valid board policy on dividends as required by the Special Resolution and Shareholders Agreement
  3. 3 Whether Mr and Mrs Skerritt breached their duties as directors by failing to consider dividends on B shares

Ratio Decidendi

The Company, under the effective control of Mr Skerritt, never adopted a valid board policy on dividends as required by the Special Resolution and Shareholders Agreement. In the absence of such a policy, A and B shares rank pari passu for dividends. The non-payment of dividends on B shares, while substantial dividends were paid on A shares, was unfairly prejudicial to Mr Routledge and a breach of his rights as a member. Mr and Mrs Skerritt also breached their duties as directors by failing to consider the position of B shareholders and by not acting fairly between members. Acquiescence by Mr Routledge until February 2014 does not bar relief for subsequent conduct.

Court Disposition

Liability established; unfair prejudice found; relief to be determined at subsequent hearing.