ABSTRACT
In Ebrahimi v Westbourne Galleries Ltd,148 the leading case on ‘just and equitable’ winding up, E and N were partners in a business selling Persian carpets. A company was formed to take over the business and E and N became its first directors. They each took 500 shares and E purchased the shares with his own money. Soon afterwards, N’s son, G, was made a director and both N and E transferred 100 shares to him. The company prospered and all profits were paid out in the form of directors’ remuneration. Subsequently, the relationship between N and G, on the one hand, and E, on the other, broke down and, because N and G had a majority of votes in general meeting, they passed a resolution removing E from the board of directors, a procedure which was provided for in the company’s articles but which would have been available in any case because of the equivalent provision of what is now s 303 of the 1985 Act. This placed E in a disadvantageous position, since he then lost the right to receive directors’ remuneration and only retained the chance of obtaining dividends. Dividends had not previously been paid and, despite assurances by N that this practice would change, E was at the mercy of N and G. He could not even dispose of his shares, under the articles, without the consent of N and G.
