Financial Technology Ventures II (Q) LP and Ors v ETFS Capital Limited and Tuckwell [2021] JCA 176 (29 June 2021)

Financial Technology Ventures II (Q) LP and Ors v ETFS Capital Limited and Tuckwell [2021] JCA 176 (29 June 2021)

The Court of Appeal upheld the Royal Court's finding of unfair prejudice, concluding that Mr Tuckwell's conduct—including misleading the Plaintiffs about distributions, removing independent directors, changing the business, and offering to buy shares at an excessive discount—constituted unfair prejudice under Article 141. The Court affirmed the buy-out order at NAV as at 13 November 2020, less a 20% minority discount, finding this proportionate to the prejudice suffered and consistent with legal principles on valuation and minority discounts. The Court rejected arguments that the findings were unpleaded or unsupported, and found no error in the Royal Court's exercise of discretion.

Citation
[2021] JCA 176
Parties
Appellants: Financial Technology Ventures II (Q), LP & Others; First Respondent: ETFS Capital Limited; Second Respondent: Graham Tuckwell
Jurisdiction
Jersey
Judgment Date
29 June 2021
Procedural Posture
Appeal and Cross Appeal From Royal Court Judgment / Court of Appeal Judgment
Outcome
Appeal dismissed; cross-appeal dismissed; Royal Court's order affirmed.
Legal Topics
Unfair Prejudice, Minority Shareholder Rights, Directors' Duties, Share Valuation, Remedies Under Companies (jersey) Law 1991
Company Law Equity Unfair Prejudice Minority Shareholder Rights Directors' Duties Share Valuation Remedies Under Companies (jersey) Law 1991

Case Brief

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Parties

Financial Technology Ventures II (Q), LP & Others

Appellants

ETFS Capital Limited

First Respondent

Graham Tuckwell

Second Respondent

Procedural Posture

Appeal and Cross Appeal From Royal Court Judgment / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the conduct of Mr Tuckwell and the Company amounted to unfair prejudice under Articles 141 and 143 of the Companies (Jersey) Law 1991
  2. 2 Whether the Royal Court erred in imposing a 20% minority discount and selecting the valuation date
  3. 3 Whether the Royal Court was correct to order a buy-out rather than a winding-up

Ratio Decidendi

The Court of Appeal upheld the Royal Court's finding of unfair prejudice, concluding that Mr Tuckwell's conduct—including misleading the Plaintiffs about distributions, removing independent directors, changing the business, and offering to buy shares at an excessive discount—constituted unfair prejudice under Article 141. The Court affirmed the buy-out order at NAV as at 13 November 2020, less a 20% minority discount, finding this proportionate to the prejudice suffered and consistent with legal principles on valuation and minority discounts. The Court rejected arguments that the findings were unpleaded or unsupported, and found no error in the Royal Court's exercise of discretion.

Court Disposition

Appeal dismissed; cross-appeal dismissed; Royal Court's order affirmed.

Orders

  • Mr Tuckwell or the Company to purchase the Plaintiffs' shares at net asset value as at 13 November 2020, less a 20% minority discount.
  • Further directions for agreement or judicial assessment of the value of portfolio companies.