INTERLOCUTORY INJUNCTIONS IN UNFAIR PREJUDICE CLAIMS HHJ Andrew Charman Unfair prejudice CA 2006 - Section 994 Standing member but not in control; Conduct of the companys affairs; Prejudicial to interests as member; and Unfair.
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INTERLOCUTORY INJUNCTIONS IN UNFAIR PREJUDICE CLAIMS HHJ Andrew Charman<br>
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Unfair prejudice CA 2006 - Section 994
Standing – member but not in control;
Conduct of the company’s affairs;
Prejudicial to interests as member; and
Unfair. Injunctions in Unfair Prejudice Claims 2<br>
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American Cyanamid Co v Ethicon Ltd [1975] AC 396 Is there a serious issue to be tried?
If so, would financial compensation be an adequate remedy for the party injured by the grant or refusal of an injunction?
If not, does the balance of convenience favour the grant or the refusal of the injunction? Injunctions in Unfair Prejudice Claims 3<br>
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Serious issue to be tried? Serious issue in the Petition is enough – Re: R-Squared Holdco Ltd – [2020] EWHC 23 (Ch)
Note also: Broad Idea International Ltd v Convoy Collateral Ltd [2021] UKPC 24 – s.37 SCA 1981 – discretion not limited to enforcing causes of action or legal rights – ‘wherever necessary to support the administration of justice’ Injunctions in Unfair Prejudice Claims 4<br>
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would financial compensation be an adequate remedy for the party injured by the grant or refusal of an injunction? Does Petitioner want to buy or sell?
Section 996 – wide and flexible remedy
Where the Petitioner seeks to have their shares purchased (‘a sale order’) an adjustment to the sale price or valuation date will usually be adequate remedy
Where the Petitioner wishes to purchase the Respondent’s shares it may not be
Williams v Brinkmann [2004] EWHC 601 (Ch)
Pringle v Callard [2007] EWCA Civ 1075 Injunctions in Unfair Prejudice Claims 5<br>
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Balance of convenience May point to either the granting or refusal of injunction
Adequacy of financial compensation may also be of some relevance at this stage
Preservation of the status quo usually carries (even) greater weight in unfair prejudice claims than other cases when considering interlocutory injunctions. It should only be disturbed where it is necessary
Court will be astute to avoid conferring an advantage on either side in an on-going shareholder dispute
Re a Company (No. 002612 of 1984) (1984) 1 BCC 99262
(1985) 1 BCC 99485 Injunctions in Unfair Prejudice Claims 6<br>
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Flexible – wide range of grounds Use of company money for legal costs
Unauthorised directors’ remuneration
Disposal of business
Disposal of particular assets
Rights issue or share allotment
Disposal of shareholding by Respondent
Bringing a claim against the Petitioner
Removal of petitioner as a director and/or employee Injunctions in Unfair Prejudice Claims 7<br>
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Restraining removal as a director and/or employee? The court will generally be slow to impose a director on a company by way of interim remedy: Pringle v Callard [2007] EWCA Civ 1075
But the maintenance of the status quo also carries weight: Williams v Brinkmann [2004] EWHC 601 (Ch)
An application for such interim relief should be addressed by reference to the possible final outcome and the duration of the likely interim period. The court should consider what is the risk of irreparable damage to the value of the Petitioner’s shares beyond what could be compensated for at conclusion of the petition: Re Canterbury Travel (London) Ltd [2010] EWHC 1464 (Ch) Injunctions in Unfair Prejudice Claims 8<br>
