Earlier this month, the Court of Final Appeal declined to give permission to appeal in a case concerning shareholder remedies: Dennis Kwok Hon Ming v Poon Sui Cheong Albert [2022] HKCFA 2. The case concerned a claim brought by a minority shareholder - under section 168A of the Companies Ordinance (Cap 32), now found in section 724 of the Companies Ordinance (Cap 622) - alleging unfair prejudice. The minority shareholder had been removed from office as a director in several companies by the majority shareholders. At first instance, the court found unfair prejudice and ordered that the minority be bought out by the majority, but the Court of Appeal ([2019] HKCA 461) reversed this decision.
Amongst the arguments made by the minority shareholder - and rejected as not being reasonably arguable by the Court of Final Appeal - was the position that the majority shareholders, in seeking to avoid a finding of unfair prejudice, could only rely on information about the minority known to them at the time of his removal. Mr Justice Ribeiro PJ stated, referring to several English authorities (including O'Neill v Phillips [1999] 1 WLR 1092 and Dinglis v Dinglis [2019] EWHC 1664 (Ch)):
It is wholly implausible that the court should adopt ... an all-encompassing, “nothing is off-limits” approach when deciding what relief fairness requires while assessing whether there was conduct unfairly prejudicial to the interests of the petitioner in a blinkered fashion, excluding from its consideration matters that are relevant but were unknown to those having conduct of the company’s affairs. The court applies an objective standard of fairness in both inquiries and is entitled to take into account all relevant factors of which it is aware." (para. 40).
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