Profile Partners Ltd, Re

Profile Partners Ltd, Re

The court found that Mr Gott established a clear case that the Respondents were in threatened breach of contractual undertakings and company law principles by seeking to use company funds to defend the s. 994 petition and to pay consultancy invoices to Mr Hauge. There was no adequate apportionment of costs between defence and counterclaims, and the counterclaims appeared to be brought in response to the petition. Damages would not be an adequate remedy, and the balance of convenience and preservation of the status quo favoured granting injunctive relief.

Parties
Applicant/petitioner: Mr Michael Gott; First Respondent: Mr Rune Hauge; Second Respondent: Ms Lisa Davey; Third Respondent: Profile Sport and Media Limited; Fourth Respondent: Profile Holdings Limited; Fifth Respondent: Profile Partners Limited (England and Wales); Sixth Respondent: Profile Partners Limited (Guernsey); Seventh Respondent: Profile Partners GmbH & Co. KG; Eighth Respondent: Profile Partners Verwaltungsgesellschaft MBH; Ninth Respondent: Guernsey Resources Group Limited
Jurisdiction
England and Wales
Judgment Date
08 June 2020
Procedural Posture
Petition Under S. 994 Companies Act 2006 (unfair Prejudice) / Interlocutory Application for Injunctive Relief
Outcome
Injunctive relief granted in favour of the Petitioner.
Legal Topics
Unfair Prejudice, Injunctions, Misuse of Corporate Funds, Shareholder Disputes
Company Law Equity Unfair Prejudice Injunctions Misuse of Corporate Funds Shareholder Disputes

Case Brief

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Parties

Mr Michael Gott

Applicant/petitioner

Mr Rune Hauge

First Respondent

Ms Lisa Davey

Second Respondent

Profile Sport and Media Limited

Third Respondent

Profile Holdings Limited

Fourth Respondent

Profile Partners Limited (England and Wales)

Fifth Respondent

Profile Partners Limited (Guernsey)

Sixth Respondent

Profile Partners GmbH & Co. KG

Seventh Respondent

Profile Partners Verwaltungsgesellschaft MBH

Eighth Respondent

Guernsey Resources Group Limited

Ninth Respondent

Procedural Posture

Petition Under S. 994 Companies Act 2006 (unfair Prejudice) / Interlocutory Application for Injunctive Relief

Legal Issues

  1. 1 Whether the Respondents are in threatened breach of contractual undertakings restricting use of company funds in shareholder litigation
  2. 2 Whether company funds may be used to defend or counterclaim in s. 994 proceedings
  3. 3 Whether payment of consultancy invoices to Mr Hauge would be improper and in breach of duty

Ratio Decidendi

The court found that Mr Gott established a clear case that the Respondents were in threatened breach of contractual undertakings and company law principles by seeking to use company funds to defend the s. 994 petition and to pay consultancy invoices to Mr Hauge. There was no adequate apportionment of costs between defence and counterclaims, and the counterclaims appeared to be brought in response to the petition. Damages would not be an adequate remedy, and the balance of convenience and preservation of the status quo favoured granting injunctive relief.

Court Disposition

Injunctive relief granted in favour of the Petitioner.

Orders

  • Respondents restrained from using funds of the Fifth to Eighth Respondents to defend the Petition or pay disputed invoices pending trial.
  • Respondents restrained from incurring expenditure on legal or other professional services for the purposes of the Petition, counterclaims, or any other aspect of the dispute.