Friday 11 November 2016

UK: England and Wales: unfair prejudice claims and wrongful dismissal

Judgment was given earlier this month by Mr Registrar Briggs in Wootliff v Rushton-Turner [2016] EWHC 2802 (Ch). The case concerned an application to strike out one of the heads - an allegation of wrongful dismissal from employment - in an unfair prejudice claim brought under section 994 of the Companies Act 2006. In a decision providing an excellent illustration of the wide application of section 994, the Registrar refused to strike out the claim relating to wrongful dismissal and observed (at paras. [35] and [38]):
The petitioner will have to show that the affairs of the Company have been conducted (by act, omission or proposed act or omission) in such a way that is both unfair and prejudicial to the interests of members. The service contract with the Company may be a reflection of the overall relationship and the interests of members. When the evidence is heard the court may or may not treat the separateness (the term used by Lord Scott [in Gamlestaden Fastigheter AB v Baltic Partners Ltd (Jersey) [2007] UKPC 26]) of the petitioner as member and the petitioner as employee as excluding him from relief for the relief sought. It may demonstrate that the petitioner as member and employee "formed part (and an essential part) of the arrangements entered into for the venture to be carried on" by the Company. If the evidence favours the petitioner this will overcome the objection that the petitioner is not pursuing the claim qua member ...

... In any event, if the claim for loss of salary (breach of contract) were to be commenced by an ordinary claim form, there could be no real objection to it being heard together with a petition for relief for unfair prejudice: the issues arise out of the same facts. In my judgment it would be inefficient, disproportionate, a waste of court resources and could lead to different findings of fact if such a claim were to be heard in a separate proceeding. As a matter of case management I would order the trial of all issues be heard together before a Registrar of the High Court."

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