Re Haden Bill Electrical Ltd: 1995

The petitioner had had in practice control of the company as chairman and though he owned only 25% of the shares. His own company loaned andpound;200,000 to the company as working capital. He complained that he had been removed as a director.
Held: The company was to be treated as a quasi-partnership. As long as the loan was outstanding he had a legitimate expectation that he could be involved in the management of the company, and his removal as director was unfair.
Robert Walker J discussed the judgment in Tay Bok Choon: ‘Lord Templeman qualified the expectation of the petitioner in that case by limiting it to the period until ‘for some other reason a change in management and control became necessary’; and that qualification is no doubt appropriate in any similar case, including the present case. The personal troubles between Mr Pitt and Mr Watkins … made it inevitable that there should be a change in management and control, and Mr Watkins’ alliance with the Hoggs … made it inevitable that Mr Pitt should be the one to go, regardless of the rights and wrongs of the personal troubles. Conversely, however unmeritorious Mr Pitt’s personal conduct, it could not in my judgment justify the majority shareholders in summarily ejecting him without consultation or discussion about the future of Mr Pitt’s equity capital, and R and H’s loan capital, in Haden Bill.’
Robert Walker J
[1995] 2 BCLC 280
Companies Act 1985 459
England and Wales
CitedRe a company (No.00477 of 1986) 1986
. .
CitedTay Bok Choon v Tahanson Sdn Bhd PC 1987
A participant in the company was given the right to be involved in the management until a change should become necessary for some other reason.
In cases of fraud, direct evidence may be rare and circumstantial evidence may have to suffice,
CitedRe JE Cade and Son Ltd 1992
The petitioner claimed unfair prejudice under section 459. The company was a licensee of a farm and he sought to recover possession.
Held: The petition failed. In reality he was seeking to promote his interests as freeholder in the land, and . .

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Updated: 16 May 2021; Ref: scu.264072