Michel v Michel & Ors
10 Jun 2019
Justina Stewart acted for the successful respondents in a hard-fought shareholder dispute (unfair prejudice petition), Michel v Michel  EWHC 1378 (Ch). The dispute involved numerous allegations of unfair prejudice in the context of a family-owned and controlled company, with the allegations spanning many years.
Chief ICC Judge Briggs found decisively in favour of the respondents, concluding that “the evidence in my view is overwhelming against a finding that it would be correct to characterise the removal of [the Petitioner] as unfair and prejudicial”.
Justina played a highly pro-active role in preparation for trial, analysing thousands of pages of documents and playing a key role in the preparation of numerous witness statements (assisted by Jon Colclough), before representing the respondents for 7 of the 15 days of trial (the trial going part-heard).
Click here for the judgment.
The decision highlights a number of points:
- Given the highly fact sensitive nature of unfair prejudice petitions, careful and forensic analysis of documentary evidence is critical, and particularly so in the context of historic allegations;
- A quasi-partnership does not exist solely because a company is family run and controlled (a commonly held misconception), or solely because family members are given benefits which cannot be explained on the basis of their employment by the company;
- It is important for a petitioner to establish the precise basis of any agreement, understanding or clearly established pattern of acquiescence between shareholders in support of a contention that equitable constraints arise preventing departure from the Articles of Association;
- Trust and confidence between shareholders is central to the question of whether a quasi-partnership exists;
- Previous purchase of company shares from minority shareholders may have significant evidential value (if a minority discount is applied, this supports a finding that there was no special quality attached to the shareholding);
- The petitioner’s case should be pleaded so it is clear to the respondent(s) how he is to meet a claim.