Grace v Biagioli
The usual remedy for unfair prejudice is an order for the purchase of the petitioner's shares, and the exclusion of a member was not cured by an offer to pay him a dividend.
Facts
Mr Grace was one of four shareholders and directors of a company. After a dispute, the other three removed him as a director and decided to pay a dividend to the other shareholders, but not to him, by paying the equivalent of his dividend into a fund to set off against the price of his shares, which they wanted to buy. He petitioned for relief for unfair prejudice.
Legal principle
The Court of Appeal held that Mr Grace had been unfairly prejudiced by the decision not to pay him a dividend, and ordered the other shareholders to buy his shares. Patten J, giving the judgment of the court, said that the usual remedy where a member has been unfairly prejudiced is an order for the purchase of his shares at a fair value, because it ends the relationship between the parties, which has broken down. An offer to buy the shares could be relevant, but the respondents' offer had not been fair in the circumstances. Mr Grace's removal as a director was not itself unfairly prejudicial, because there was no quasi partnership.
Related cases on unfair prejudice and just and equitable winding up
- Re Bird Precision Bellows Ltd [1986] Ch 658
- Ebrahimi v Westbourne Galleries Ltd [1973] AC 360
- Re Elgindata Ltd [1991] BCLC 959
- Fulham Football Club (1987) Ltd v Richards [2011] EWCA Civ 855, [2012] Ch 333
- Re Harmer (HR) Ltd [1959] 1 WLR 62
- Loch v John Blackwood Ltd [1924] AC 783
- O'Neill v Phillips [1999] 1 WLR 1092
- Re Sam Weller & Sons Ltd [1990] Ch 682
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