Saxon Woods Investments Limited v Francesco Costa & Ors

Saxon Woods Investments Limited v Francesco Costa & Ors

The company’s affairs were conducted in a manner unfairly prejudicial to the Petitioner by delaying the sale process in breach of the SHA, for which Mr Costa was responsible. However, whether the Petitioner suffered material prejudice depends on whether a binding offer above $75m would have been received, to be determined at a quantum trial. No buy-out order is made unless that threshold is met. Mr Costa did not breach fiduciary duties as he honestly believed his actions were in the company’s interests. Company funds cannot lawfully indemnify Mr Costa’s litigation costs in this shareholder dispute. Costs of the liability trial are reserved pending the outcome of the quantum trial.

Parties
Petitioner: Saxon Woods Investments Limited; First Respondent: Francesco Costa; Second Respondent: Far East Media Holdings Pte Limited; 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
05 March 2024
Procedural Posture
Petition Under Companies Act 2006 S.994 (unfair Prejudice) / Post Liability Judgment; Directions and Applications for Leave to Appeal, Costs, and Injunctive Relief
Outcome
Directions given for quantum trial; applications for permission to appeal refused; costs of liability trial reserved; injunction granted restraining company from indemnifying Mr Costa’s litigation costs; parties to agree form of order.
Legal Topics
Unfair Prejudice, Shareholder Remedies, Director Duties, Buy Out Orders, Costs, Injunctive Relief
Company Law Insolvency Unfair Prejudice Shareholder Remedies Director Duties Buy Out Orders Costs Injunctive Relief

Case Brief

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Parties

Saxon Woods Investments Limited

Petitioner

Francesco Costa

First Respondent

Far East Media Holdings Pte Limited

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

Petition Under Companies Act 2006 S.994 (unfair Prejudice) / Post Liability Judgment; Directions and Applications for Leave to Appeal, Costs, and Injunctive Relief

Legal Issues

  1. 1 Whether the conduct of the company and Mr Costa amounted to unfair prejudice under s.994
  2. 2 Whether a buy-out order should be made and on what terms
  3. 3 Whether Mr Costa breached fiduciary duties

Ratio Decidendi

The company’s affairs were conducted in a manner unfairly prejudicial to the Petitioner by delaying the sale process in breach of the SHA, for which Mr Costa was responsible. However, whether the Petitioner suffered material prejudice depends on whether a binding offer above $75m would have been received, to be determined at a quantum trial. No buy-out order is made unless that threshold is met. Mr Costa did not breach fiduciary duties as he honestly believed his actions were in the company’s interests. Company funds cannot lawfully indemnify Mr Costa’s litigation costs in this shareholder dispute. Costs of the liability trial are reserved pending the outcome of the quantum trial.

Court Disposition

Directions given for quantum trial; applications for permission to appeal refused; costs of liability trial reserved; injunction granted restraining company from indemnifying Mr Costa’s litigation costs; parties to agree form of order.

Orders

  • Quantum trial to determine if a binding offer above $75m would have been received and, if so, First Respondent to buy out Petitioner’s shares at 22.33% of that value.
  • Case management conference for quantum trial deferred until after appeals are resolved.