ABSTRACT
If the sheer weight of case law generated since the unfair prejudice remedy was first introduced by the Companies Act 1980 were to be taken as the yardstick, it might be concluded that the effect of unshackling minority shareholders from the judicial restrictions imposed on the old oppression remedy has been a resounding success in terms of strengthening the position of ‘oppressed’ minority shareholders.1 However, the flip side of this prevalence of minority shareholder litigiousness is the destructive effect it has on profitable owner-managed small private companies. A major anxiety of the law reform bodies which have been examining the issue of shareholder remedies over the last five years or so, and one that is mirrored in recent judicial pronouncements on s 459, is how best to construct a regime which, first, affords minority shareholders in small private companies effective avenues for redress for conflicts with the majority owners,2 and, secondly, reduces the length, complexity and costs of litigation under the provision.3 In respect of the latter, the Woolf reforms have largely addressed many of these concerns,4
1 The unfair prejudice remedy is now found in s 459 of the Companies Act 1985 (as amended), which provides: ‘A member of a company may apply to the court by petition for an order under this part on the ground that the company’s affairs are being or have been conducted in a manner which is unfairly prejudicial to the interests of its members generally or some part of the members (including at least himself) or that any actual or proposed act or omission of the company (including any act or omission on its behalf) is or would be so prejudicial.’ This replaced the ‘oppression’ remedy contained in s 210 of the Companies Act 1948, which was expressly stated to be only available where the facts of the case justified a winding-up order.
