Unwin v Bond

Unwin v Bond

The defendant breached the express duty of good faith in the shareholders' agreement by failing to deal fairly and openly with the claimant in the process of terminating his employment and compelling the sale of his shares. The process lacked notice, investigation, and opportunity for the claimant to respond, and did not consider his interests. Although the defendant was not motivated by an ulterior purpose to acquire the shares at an undervalue, the procedural unfairness constituted a breach. The claimant is entitled to damages representing the difference between a hypothetical negotiated sale value and the issue price of his shares.

Parties
Claimant: John Scott Unwin; Defendant: Christopher Lee Bond
Jurisdiction
England and Wales
Judgment Date
10 July 2020
Procedural Posture
Civil (shareholder Dispute) / Judgment After Full Trial
Outcome
Judgment for the claimant on liability for breach of good faith; damages awarded.
Legal Topics
Shareholder Agreements, Good Faith Obligations, Minority Shareholder Rights, Wrongful Dismissal, Valuation of Shares, Remedies for Breach of Contract
Company Law Contract Law Employment Law Shareholder Agreements Good Faith Obligations Minority Shareholder Rights Wrongful Dismissal Valuation of Shares +1 more

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 3 Authorities cited 11 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

John Scott Unwin

Claimant

Christopher Lee Bond

Defendant

Procedural Posture

Civil (shareholder Dispute) / Judgment After Full Trial

Legal Issues

  1. 1 Whether the defendant breached the duty of good faith under the shareholders' agreement in terminating the claimant's employment and compelling the sale of shares at an undervalue
  2. 2 Whether the claimant was entitled to damages for the difference between the fair value and issue price of his shares
  3. 3 Whether the process of termination complied with contractual and procedural fairness obligations

Ratio Decidendi

The defendant breached the express duty of good faith in the shareholders' agreement by failing to deal fairly and openly with the claimant in the process of terminating his employment and compelling the sale of his shares. The process lacked notice, investigation, and opportunity for the claimant to respond, and did not consider his interests. Although the defendant was not motivated by an ulterior purpose to acquire the shares at an undervalue, the procedural unfairness constituted a breach. The claimant is entitled to damages representing the difference between a hypothetical negotiated sale value and the issue price of his shares.

Court Disposition

Judgment for the claimant on liability for breach of good faith; damages awarded.

Orders

  • Defendant to pay the claimant £135,800 as damages for breach of contract (difference between hypothetical negotiated value and issue price of shares)
  • Claim for salary dismissed