A shareholder obtains an order in unfair prejudice proceedings requiring the other shareholder to sell his shares to her. The company subsequently seeks relief against the former shareholder in respect of matters which were relied on in support of the unfair prejudice petition. Can the defendant to that claim have it struck out as an abuse of process?  The Court of Appeal addressed this issue in a significant judgment handed down this morning in Taylor Goodchild v Taylor [2021] EWCA Civ 1135, in which for the first time it considered how the guidelines laid down in Aldi Stores Ltd v WSP Group plc [2008] 1 WLR 748 (which require a party which intends to bring an additional claim in subsequent proceedings against the same defendant to draw that fact to the attention of the court in the first set of proceedings) should be applied in the context of unfair prejudice petitions.  In allowing a law firm’s appeal against the decision of Snowden J to strike out as an abuse of process claims it brought against its former director and 50% shareholder who had been found in an earlier unfair prejudice petition to have acted in breach of fiduciary duty, the Court of Appeal queried whether the decision in Aldi had in mind “the rather special position relating to section 994 petitions”. 

This decision has potentially wide ramifications in the context of unfair prejudice petitions, which are very often based on allegations of breach of directors' duties – allegations on which claims the company could itself bring against those same persons could also be founded. Daniel Lightman QC (who did not appear below) represented the successful appellant in the Court of Appeal. 

To read the judgment, please click here.