In
Facts
Until now it has been readily accepted by Courts and practitioners that unfair prejudice petitions were not subject to a limitation period under the Limitation Act 1980 (the "Limitation Act") and that the equitable doctrine of laches (an equitable defence that can be asserted where a claimant has delayed asserting their rights and is no longer entitled to bring an equitable claim) did not strictly apply to the statutory remedies under the Companies Act. The Court in
Notwithstanding the above, the Court has always maintained a wide discretion under the Companies Act to make "such order as it thinks fit" in respect of unfair prejudice petitions. It had been readily accepted before
However, the decision in
It is a common remedy in unfair prejudice petitions for a share buy-out to be ordered. The Judgment clarified that those claims do not amount to claims for monetary relief as there is no entitlement to money until the share transfer is executed. As such, where the relief claimed is a buy-out order, petitioners will have 12 years in which to bring a claim.
Section 32 of the Limitation Act will apply to unfair prejudice claims and will operate to suspend the running of time for the purposes of calculating the limitation period in circumstances of 'concealment'. This is particularly important in unfair prejudice claims where, quite often, a basis for bringing a claim is exclusion from management and can involve the concealment of information relating to the company and its affairs.
Analysis
There is no doubt that
As the limitation period is remedy dependent it is possible that a single claim could be subject to both limitation periods and careful thought will need to be given to the remedies sought in any petition.
The application of a limitation period to unfair prejudice claims is particularly in important given that many petitions rely on a course of conduct, sometimes over a significant period of time, which cumulatively amounts to unfair prejudice. It is our view that the limitation period could only sensibly begin to run once there had been sufficient cumulative events to demonstrate a case of unfair prejudice. However, this will be an issue to be determined by the Court. Where unfairly prejudicial conduct is continuing this may also give a petitioning party scope to overcome any limitation defence. This is an issue that will undoubtedly be the subject of further judicial scrutiny.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Mr
High
HP11 2EE
Tel: 203814 2020
E-mail: jar@blasermills.co.uk
URL: www.blasermills.co.uk
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