Harris v Jones & Ors

Harris v Jones & Ors

Mr Jones breached his duty as trustee by participating in uncommercial arrangements in September 2007 that diluted Mr Harris's shareholding from 50% to 0.1%, motivated by hostility and without seeking alternative funding, causing unfair prejudice. Mr Harris is entitled to equitable compensation for the value of his...

Source-derived case information.

Parties
Petitioner: William Robert Owen Harris; Respondent: Richard Eric Graham Jones; Respondent: Zetnet Limited; Respondent: Aaron & Partners LLP
Jurisdiction
England and Wales
Judgment Date
14 June 2011
Procedural Posture
Petition and Claim for Breach of Trust / Final Judgment
Outcome
Judgment for the petitioner; breach of trust and unfair prejudice established.
Legal Topics
Breach of Trust, Unfair Prejudice, Shareholder Remedies, Equitable Compensation, Dilution of Shareholding
Company Law Trusts Law Breach of Trust Unfair Prejudice Shareholder Remedies Equitable Compensation Dilution of Shareholding

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Parties

William Robert Owen Harris

Petitioner

Richard Eric Graham Jones

Respondent

Zetnet Limited

Respondent

Aaron & Partners LLP

Respondent

Procedural Posture

Petition and Claim for Breach of Trust / Final Judgment

Legal Issues

  1. 1 Whether Mr Jones breached his duty as trustee of the share held for Mr Harris
  2. 2 Whether the dilution of Mr Harris's shareholding constituted unfair prejudice under Companies Act 2006
  3. 3 Whether Mr Harris is entitled to equitable compensation for breach of trust

Ratio Decidendi

Mr Jones breached his duty as trustee by participating in uncommercial arrangements in September 2007 that diluted Mr Harris's shareholding from 50% to 0.1%, motivated by hostility and without seeking alternative funding, causing unfair prejudice. Mr Harris is entitled to equitable compensation for the value of his 50% interest in Zetnet, assessed at £110,000 plus interest.

Court Disposition

Judgment for the petitioner; breach of trust and unfair prejudice established.

Orders

  • Mr Jones to pay Mr Harris £110,000 by way of equitable compensation plus interest at a commercial rate (to be determined)
  • No further order under section 996 Companies Act 2006