is it worth starting a claim for unfair prejudice against a micro company?

[i.dan]

By micro company, I mean a 'dormant' property management company Ltd, owning one building only, divided into flats. The Company is managed by its Directors, who are also the Leaseholders. Over a period of time there has been a dispute between one Leaseholder and the Directors, resulting in a court case, which he lost and was awarded the costs. That case considered only the merits of the claim, an injunction. And despite the Judge stating he agreed it was unfair, he seemingly could not take into account whether the activities of the Directors had been unfairly prejudiced against the Leaseholder. Such as whether the factors of the Directors refusing to call a shareholders meeting to discuss the issue prior to it having to go to court (The Leaseholder is a shareholder), despite that being a right such a (joint) 20% owning shareholders can demand. Despite the Directors refusing to consider mediation. There is much evidence to show that the Directors had acted in a manner which is bias and contrary to a Directors Fiduciary responsibly toward amongst other things -to priories trust and fairness amongst its members. The Directors have freely admitted that they are at fault, that we were all equally at fault. However they will not agree that the burdon of cost (£28,000 of costs and a CCJ and a charge on my property) etc should therefore be shared and in all fairness the judgement set aside. They are content to allow that cost to put the Leaseholders property at risk.
Starting a new 'unfair prejudice' claim is entering into another realm of stress, paperwork, worry, solicitors etc etc. I also think such claims are more for big companies. What chance do I have to obtain any justice against such precedence. I cannot help but think that any Judge would find the whole tiresome and irrelevant. Any advice appreciated.

[atticus]

In short, no, not for the sums mentioned.

Action under s 994 Companies Act 2006 is complicated as hell. It is expensive, and the risk of having to pay the other party's costs is significant.

This is only to be attempted if there is a lot of money at stake - at least 6 figures.

[i.dan]

In short, no, not for the sums mentioned.

Action under s 994 Companies Act 2006 is complicated as hell. It is expensive, and the risk of having to pay the other party's costs is significant.

This is only to be attempted if there is a lot of money at stake - at least 6 figures.

Yes, that is what i thought. So what options if any against such an issue of blatant unfair and prejudiced behaviour by Directors? I can argue that they acted contrary to their duties to fairness. I can say they breached company law, maybe in view of not holding meetings when they are called, i can prove that they withheld information which would support my claim, but to whom and under what action?

[atticus]

Are the affairs of the company being conducted "in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members"?

The quotation is from s994 CA 2006. There is a lot of meaning in those words, but basically you would need to show significant financial detriment to yourself and maybe others, to the benefit of those managing the company.

[i.dan]

Are the affairs of the company being conducted "in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members"?

The quotation is from s994 CA 2006. There is a lot of meaning in those words, but basically you would need to show significant financial detriment to yourself and maybe others, to the benefit of those managing the company.

When I Google S994 Unfair Prejudice I get examples such as -

• Directors awarding themselves excessive bonuses;
• directors failing to award dividends;
• failing to consult or provide information to a shareholder;
• mismanagement of the company;
• breaches of Articles of Association or a Shareholders’ Agreement or, in some cases, an unwritten understanding between the shareholders about how a business is to be run;
• exclusion from management;
• allotments of shares and rights issues; and
• breaches of directors’ fiduciary duties.

I would argue several of those apply in my example. But this still leaves me with the issue of whether a S994 in my insignificant situation is important enough to merit any interest from a Judge.

[atticus]

I agree with those examples. If you want more, read this judgment of Lord Hoffmann, given in 1999: https://publications.parliament.uk/p...20/neill01.htm. It is still the leading case on s994/unfair prejudice.

You have my views on bringing a s994 claim.

[i.dan]

I agree with those examples. If you want more, read this judgment of Lord Hoffmann, given in 1999: https://publications.parliament.uk/p...20/neill01.htm. It is still the leading case on s994/unfair prejudice.

You have my views on bringing a s994 claim.

Thank you. I will read that.