ANDREW JAMES BRIDGEN v PAUL JULIAN BRIDGEN & Ors

This is a section 994 Companies Act 2006 unfair prejudice litigation about three petitions by a shareholder, Andrew Bridgen MP, alleging that the affairs of A.B. Produce Trading Limited (ABPT), Bridgen Investments Limited (BIL) and AB Farms Limited (ABF) have been or are being conducted in a manner unfairly prejudicial to his interests. The court was concerned only with liability (whether unfair prejudice occurred), not remedy (section 996 CA 2006).

Key legal principles: The court applied the standard tests for quasi‑partnership/legitimate expectation, the codified director duties in Chapter 2 of the Companies Act 2006 (notably sections 172, 173, 175, 177 and 182) and the established approach to unfair prejudice (objective assessment of unfairness and prejudice to member interests).

Principal findings of fact and law: the judge found multiple breaches of directors' duties by the respondent directors (principally Paul Bridgen) in relation to PLC (ABPT's trading subsidiary) and ABF, in particular failures to disclose related‑party interests (section 177/182-type issues), directors acting on conflicted terms, the placement of Partnership vehicles on PLC's operators' licence and the use by the Partnership of PLC employees, fuel and maintenance without proper records or recompense. Those specific failings rendered parts of ABPT's affairs unfairly prejudicial to Andrew (notably the use of PLC resources and the operator's‑licence issue). By contrast, the court did not find ABF or BIL’s overall affairs to have been conducted in a manner unfairly prejudicial to Andrew: the Barn Farm transactions, Water Purification Solutions transfers and the renewable‑energy conduct did not, on the evidence and in context, establish unfair prejudice to him.

Subsidiary findings addressed matters of credibility, delay and acquiescence: the judge made detailed credibility findings (including that Andrew had orchestrated his own employment termination for divorce purposes), and treated Andrew's long delay and conduct as relevant to allegations of historic conduct.

This is a contested first‑instance unfair‑prejudice trial (three amended petitions) brought by Andrew James Bridgen MP alleging that the affairs of ABPT, BIL and ABF (and, in respect of ABPT, its subsidiary PLC) were or have been conducted in a manner unfairly prejudicial to his interests under section 994 CA 2006. The court was directed to try liability only.

Background and parties

• Family businesses restructured in 2006: ABPT (holding company), BIL (leases) and PLC (trading subsidiary). Shareholdings were held by members of the Bridgen family and by long‑standing advisers. ABF was incorporated in 2015 to acquire Barn Farm.
• The real respondents were Paul Bridgen, Peter Ellis and Derek Tomkinson; other family trustees and entities took neutral positions.

Nature of the claim

• Andrew alleged multiple instances of unfairly prejudicial conduct (disclosure failures, conflicts of interest, self‑dealing and the use of company resources for a farming Partnership, questionable transactions relating to Barn Farm, WPS and renewable energy trading and export revenues).
• He sought relief under section 996 CA 2006 if the petitions were found well founded.

Issues for the court

• Whether ABPT, BIL and/or ABF were ever quasi‑partnerships or gave rise to legitimate expectations of management participation;
• whether the termination of Andrew’s employment/directorships was consensual;
• whether the Cemex and Biffa contracts, the use of PLC employees, fuel and equipment by the Partnership, the Barn Farm acquisition and finance, the WPS transfers, cost control decisions, Telehandler hire, management charges, Agrovista supplies, the diesel generator and renewable‑energy export income gave rise to breaches of directors’ duties and were unfairly prejudicial to Andrew; and
• whether any knowledge or conduct of Andrew affects the unfair prejudice analysis.

Court’s reasoning (concise)

1. The judge examined documentary and witness evidence in detail and made extensive credibility findings. He emphasised caution about memory and reconstruction in long‑running family disputes.
2. On the quasi‑partnership question the judge found that ABPT and BIL had a family/quasi‑partnership character after the 2006 restructuring only as between family beneficiaries (Andrew, Paul and the SSAS) and that ABF was not a quasi‑partnership on incorporation in 2015. The scope of any legitimate expectation to participate in management had eroded over time and was destroyed by later events, including Andrew orchestrating his own termination and later aggressive conduct when seeking re‑appointment.
3. On the merits the court made multiple findings of breach of director duties by Paul and, to a lesser extent, by other directors: failures of disclosure (section 177/182 style), conflicted self‑dealing and, most importantly, allowing the Partnership to use PLC’s resources (employees, fuel, maintenance) without proper records or fair recompense and causing Partnership vehicles to appear on PLC’s operator’s licence. Those particular features were held to be unfair and prejudicial to Andrew as a member of ABPT because they caused or risked material loss to PLC/ABPT and prevented proper accounting.
4. By contrast the court rejected a number of the strongest fraud‑type allegations (for example that Barn Farm was acquired to confer sole benefit on Paul or that the WPS transfers were dishonest). The judge found no sufficient evidence of permanent loss of renewable‑energy export revenue (and concluded that pursuit steps were taken and recovery remained realistically achievable), and found no unfair prejudice in relation to ABF’s farming arrangements (the husbandry and Agrovista arrangements were either disclosed, commercially reasonable or not shown to have caused loss).
5. The judge took into account Andrew’s own conduct and delay: he made adverse findings about Andrew’s credibility in parts, found that Andrew had orchestrated aspects of his own dismissal and that he had acquiesced or failed to challenge matters at the relevant times, which reduced the weight of some complaints (particularly historic matters where Andrew had accepted benefits or had not protested contemporaneously).

Result at liability stage: the court found breaches of directors’ duties and unfairly prejudicial conduct in relation to certain aspects of ABPT/PLC (notably the Partnership’s use of PLC resources and the operator’s licence issue). By contrast ABF and BIL were not shown to have been run in a manner unfairly prejudicial to Andrew on the evidence before the court. Detailed loss/accounting calculations were left for a remedies hearing and the experts were asked to produce focussed further work on certain pricing and recharge issues.

The court determined liability only. It found that some aspects of the respondents’ conduct (principally Paul Bridgen’s role in causing Partnership vehicles to be placed on PLC’s operator’s licence and permitting substantial, unrecorded use of PLC employees, fuel and maintenance by the Partnership) amounted to breaches of directors’ duties and that those failings were unfairly prejudicial to Andrew as a shareholder of ABPT (through PLC). The court did not find ABF or BIL presented unfairly prejudicial affairs on the evidence: the Barn Farm acquisition, the WPS transfers and the renewable‑energy export issues did not, in context, prove unfair prejudice. The judge also made detailed credibility findings, and treated Andrew’s delay and conduct (including orchestration of his dismissal) as material. Quantification and remedy were remitted to a remedies hearing.