The case, THG plc and others v Zedra Trust Company (Jersey) Ltd [2024] EWCA Civ 158, concerned a petition brought by Zedra in January 2019 under s 994 of the Companies Act 2006, alleging the company’s affairs were conducted in a manner unfairly prejudicial to the petitioner. Zedra contended it was wrongly excluded from a bonus shares issue in 2016, which would have paid out when the company floated in 2020. The company, THG, argued the petition was out of time.
The High Court held no such limitation period existed in law. However, THG successfully appealed.
Catherine Naylor, partner at Gowling WLG, representing THG, said the Court of Appeal unanimously held there was a limitation period.
‘That is so despite the fact that it is “undoubtedly received wisdom that no limitation period applies” to unfair prejudice petitions—and the detailed judgment of Lewison LJ cites commentary from no less than five textbooks and two Law Commission reports assuming the contrary,’ she said.
Naylor said the limitation period is 12 years under s 8 of the Limitation Act 1980, unless the claim is for compensation or monetary relief, in which case it is six years.
Lord Justice Snowden, giving his judgment, said: ‘It is notorious that many petitions under s 994 can, if unchecked, lead to disproportionately lengthy and expensive trials.
‘Such petitions require robust case management if they are to comply with the overriding objective. Accordingly, the policy of the courts since the relatively early days of the unfair prejudice jurisdiction has been to discourage litigants from dredging up old grievances and to encourage them to focus on a limited number of specific, current complaints… I would not wish this decision to be seen as reversing that trend or providing any encouragement to petitioners to advance stale complaints under s 994. Judges should not be discouraged, in appropriate cases, from striking out or summarily dismissing allegations of historical misconduct if it can clearly be seen.’
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