Kerrie Heywood v Kevin Freakley & Ors.

Kerrie Heywood v Kevin Freakley & Ors.

The dilution of Heywood's shareholding from 50% to 25% without her knowledge or consent, and the release of the Company's valuable rights under the Building Agreement by a conflicted director, constituted conduct of the Company's affairs that was unfairly prejudicial to Heywood's interests as a shareholder under...

Source-derived case information.

Parties
Petitioner: Kerrie Heywood; Respondent: Kevin Freakley; Respondent: Kelly Freakley; Respondent: K&B Homes Limited
Jurisdiction
England and Wales
Judgment Date
02 November 2022
Procedural Posture
Petition Under Companies Act S.994 (unfair Prejudice) / Liability Trial; Remedy and Quantum to Be Determined Separately
Outcome
Petition succeeds on liability; remedy and quantum to be determined at a later stage.
Legal Topics
Unfair Prejudice, Shareholder Rights, Directors' Duties, Share Dilution, Conflict of Interest, Derivative Claims
Company Law Equity Unfair Prejudice Shareholder Rights Directors' Duties Share Dilution Conflict of Interest Derivative Claims

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Summary, issues, holding and outcome

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Parties

Kerrie Heywood

Petitioner

Kevin Freakley

Respondent

Kelly Freakley

Respondent

K&B Homes Limited

Respondent

Procedural Posture

Petition Under Companies Act S.994 (unfair Prejudice) / Liability Trial; Remedy and Quantum to Be Determined Separately

Legal Issues

  1. 1 Whether the affairs of K&B Homes Limited were conducted in a manner unfairly prejudicial to Kerrie Heywood as a shareholder
  2. 2 Whether the dilution of Heywood's shareholding and the release of the Company's rights under the Building Agreement constituted unfair prejudice
  3. 3 Whether Heywood had standing to bring the petition as a nominee shareholder

Ratio Decidendi

The dilution of Heywood's shareholding from 50% to 25% without her knowledge or consent, and the release of the Company's valuable rights under the Building Agreement by a conflicted director, constituted conduct of the Company's affairs that was unfairly prejudicial to Heywood's interests as a shareholder under s.994 Companies Act 2006. Heywood, as the registered shareholder, had standing to bring the petition regardless of any beneficial interest held by another.

Court Disposition

Petition succeeds on liability; remedy and quantum to be determined at a later stage.