Re Harmer (HR) Ltd
A founder who ran a family company as his own business, disregarding the wishes of the other shareholders and the board, was oppressing them, and was ordered to give up control.
Facts
Mr Harmer, aged 88, had founded a business dealing in stamps, which he later converted into a company. His sons held most of the shares, but Mr Harmer had the voting control. He ran the company as if it were still his own business, ignoring the decisions of the board, opening a branch in Australia against the board's wishes, dismissing staff and spending the company's money as he pleased. The sons petitioned for relief from oppression.
Legal principle
The Court of Appeal upheld an order for relief. Mr Harmer's conduct was oppressive, because he had disregarded the wishes of the board and the other shareholders, and had run the company in his own interests, as if he were the sole owner. The court ordered that he should not interfere in the company's affairs, and that he should be appointed president for life without any duties or powers. The case was decided under the oppression remedy in section 210 of the Companies Act 1948, which was later replaced by the unfair prejudice remedy.
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
- Grace v Biagioli [2005] EWCA Civ 1222, [2006] 2 BCLC 70
- 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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This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.
