When deciding on an exclusion based on unjustified discrimination, account should be taken of the likely effectiveness or ineffectiveness of a restrictive instruction. See article 106 [now article 105] and the relevant note of the Advisory Committee. The availability of other evidence may also be an appropriate factor. The grounds for claiming unjust discrimination are set out in section 944 of the Companies Act 2006. They summarize that: the affairs of the Corporation are conducted in an unfair manner prejudicial to shareholders generally or to certain shareholders (including at least the applicant) or any actual or proposed act or omission of the Corporation is or would be unjustly prejudicial. The most common remedy is a minority shareholder share purchase order. Disputes between boards and shareholders are a reality: partners give up, directors misbehave and people benefit. Normally, things can be settled between the parties involved, but sometimes good legal advice is needed so that each party understands their rights and negotiating position. The courts will not intervene in commercial judgment cases. However, a finding of mismanagement, rather than mere disagreement as to whether different business decisions should be taken, may constitute undue hardship if it is sufficiently serious having regard to the extent of the financial loss suffered and the frequency and duration of the acts or omissions concerned. It held that the question of unfair unfavourable conduct `must be decided taking into account each undertaking and the [applicant`s] interest in it`. While the approach should not be too strict, the court cannot transfer findings from one company to another, even if it is part of the same overall business.
If the court finds that the minority shareholder has been unfairly disadvantaged, a number of remedies are available to the court. This includes issuing an order governing the future affairs of the corporation, asking the corporation to do or not do something, or forcing the corporation to make or not make certain changes to its articles. All of these elements are set out in section 996 of the Act, but the most commonly used remedy is to order the purchase of the minority interest at a fair price by the controlling shareholder or the corporation. “Unfair surprise?” Although Rule 403 does not identify “surprise” as an independent ground for exclusion, surprise may be “coupled” or “covered” by the court`s consideration of unfair bias, confusion of questions, or jury deception; In most cases where there are unfair surprises, however, “granting an extension is a more appropriate way than excluding evidence.” G. 8C-403, Official Commentary. If the state is unfairly surprised by the evidence the defense is trying to present at trial, the prosecutor may also seek to limit or exclude the evidence as a punishment for a violation of the discovery, rather than on the basis of prejudice under Rule 403. For more information, see relevant discovery entries on state investigative rights and obligations, remedies, and sanctions. Evidence is not excluded under section 403 of the Regulations solely because it is prejudicial. It is in the nature of things that any evidence suggesting that the accused committed a crime is prejudicial to the defence. See State v.
Rainey, 198 N.C. App. 427 (2009); State v. Covington, 290 N.C. 313 (1976). On the contrary, relevant evidence should only be excluded if its probative value is substantially outweighed by an unreasonable disadvantage for the other party. See State v. Mercer, 317 N.C. 87 (1986). The term “unjust bias” in section 403 means “an inappropriate tendency to propose a decision on an inappropriate basis, often, but not necessarily, emotional.” State v. DeLeonardo, 315 N.C. 762 (1986), cited G.S.
8C-403, Official Commentary; but see State v. Duvall, 50 N.C. App. 684 (1981), revised for other reasons, 304 N.C. 557 (1981) (“The fact that evidence may arouse the emotion of the jury is not in itself sufficient to exclude it.”). The topics here are complex and difficult, there are two sides to every story, and deciding if the behavior is unfairly harmful is not easy. Expert advice is essential and such measures are time-consuming, stressful and costly. In Loveridge v. Loveridge [2021] EWCA Civ 1697, the Court of Appeal considered an appeal from a motion to strike a claim for unjust discrimination (and whether amendments to pleadings should be permitted). The case concerned five family businesses engaged in the caravan trade, where disputes between family members had arisen. In Griffith v.
Gourgey [2019] EWCA Civ 204, the Court of Appeal emphasized that allegations of unjust discrimination must be fully and properly asserted (i.e., the facts in support of the complaint must be clearly set out in the application). Claims for unjust harm often include allegations that are both directly related to the conduct of the corporation`s business and more general allegations relating to the conduct of the individuals involved (e.g., directors). Primekings Holding Limited and Others v. Anthony King, James King and Susan King [2021] EWCA Civ 1943 concerned a lengthy litigation in which the parties had filed a number of claims against each other, including a motion for unjust prejudice and other claims such as misrepresentation. The respondents requested that parts of the applicants` claims be deleted on the grounds that the allegations related to their personal conduct and not to the affairs of the company. The defendants argued that their personal conduct was not likely to constitute unfair conduct within the meaning of section 994 of the Companies Act 2006. The court may exclude relevant evidence if its probative value is substantially outweighed by the risk of one or more of the following: unfair disadvantage, confusion of issues, deception of jurors, undue delay, loss of time or unnecessary presentation of cumulative evidence. Of course, there is a better option.
Instead of having to fight a costly unfair prejudice lawsuit, or worse, having to deal with a fair and equitable winding-up application, shareholders would be well advised to enter into appropriate articles and shareholders` agreements at the beginning of their business relationship before disputes arise. That way, if something goes wrong, there is already a clear path to follow. It`s both cheaper and much less stressful than the alternative! As these cases show, while the possibility of shareholder disagreement is universal, the limits of a claim of actual unjust discrimination are much more limited. When bringing or defending an action for unjust discrimination, the area of unjust discrimination defined in § 994 and the relevant case law are always of decisive importance. Parties must carefully analyze how their situation meets these requirements in order to obtain the remedy they seek (or defend a claim against them). As a petitioner, an expansionist approach can be tempting, as at least some of the accusations “will remain.” However, such an approach has significant drawbacks, including delays in settlement, increased legal fees that impact the cost-benefit ratio of litigation, impact on management time, and attraction of negative court comments. Therefore, parties are well advised to seek advice at an early stage on what constitutes legally enforceable unjust damage and what is not. In English law, majority rule is the normal state of affairs for the management of a business. Claims of unfair discrimination are an important way for minority shareholders to remedy the situation, especially when relations with the majority have irrevocably broken. The Privy Council allowed the appeal and reinstated the redemption order. It clarified that the discharge for unjust discrimination takes into account all findings of fact and is not limited to the case invoked: “In sum, nothing is taboo that is subject only to the two criteria of relevance and weight in relation to the decisions to be taken in the exercise of discretion.
Second, the court necessarily considers not only the past, but also what it believes may happen in the future. The Privy Council also cited Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 with respect to the need for a court of appeal to exercise deference in considering issues of trial court discretion: “While it is true that, in the case of discretion, the Court of Appeal may as well exercise it, The primary responsibility lies with the trial court, not the Court of Appeal. The allocation of additional shares of the company for the improper purpose of diluting the stake of a minority shareholder is a clear example of unfair disadvantage. This case is a useful reminder of the need to ensure that allegations are framed in a manner that demonstrates a clear connection to the conduct of the company`s business. Allegations that do not constitute such a link are not legally effective in substantiating a claim of unjust discrimination. The case involved a Hong Kong-based company owned by members of his family. At trial, the Court found that the defendant had conducted the company`s activities in a manner that was unduly prejudicial to the plaintiffs.