Seneschall v Trisant Food Limited (In Liquidation)

The High Court (ICC Judge Greenwood) determined a contested unfair prejudice petition under section 994 Companies Act 2006 and related unlawful-means conspiracy claims brought by Mr Seneschall concerning the conduct of Trisant Foods' affairs following investment by Market Fresh. The court found that, from about the end of 2019, the company’s affairs were conducted in a manner unfairly prejudicial to the petitioner as a member: the majority investor and certain directors pursued a deliberate plan to curtail and then exclude the petitioner from meaningful participation in the business and in doing so breached directors’ duties and contractual protections (including parts of the ISHA and the HoTs insofar as they governed participation rights).

The court also held that an unlawful means conspiracy existed in respect of the 2020 exclusion: the combination of Market Fresh, Mr Marshall, Mr McCormick and, from late 2019, Ms Jones, acted pursuant to a mutual plan to remove the petitioner from executive participation, using means that included breaches of fiduciary duty and an employment process manipulated to that end. The court rejected the petitioner’s pleaded "Redemption Agreement" (no separate enforceable collateral contract to redeem the Nucleus loan) and dismissed Market Fresh’s counterclaim for deceit/breach of warranty and misrepresentation. Remedies and valuation issues were reserved for a further hearing.

Background: Trisant Foods (a baby-food packaging business) was founded by Mr Seneschall and Ms Jones in 2018. Market Fresh invested in 2019. Disputes arose over the timing and conditions of investment, bank access and creditor payments, culminating in internal tension, a disciplinary process, the petitioner’s suspension (13 July 2020) and his summary dismissal for gross misconduct (7 September 2020). The company went into compulsory liquidation on 9 November 2021.

Nature of the application: This was a first instance trial of an unfair prejudice petition under s.994 Companies Act 2006 and an unlawful means conspiracy claim. Market Fresh counterclaimed for deceit and breach of warranties (alleging the company was insolvent and material matters were concealed in due diligence).

Issues framed:

• Whether the company’s affairs were conducted in a manner unfairly prejudicial to the petitioner as a member (s.994).
• Whether there was an unlawful means conspiracy (agreements, intention to injure and unlawful acts as means), including an alleged earlier "Control Conspiracy" (mid‑2019) and a later "Exclusion Conspiracy" (from late 2019/2020).
• Whether an alleged "Redemption Agreement" (that Market Fresh would redeem the Nucleus loan by a fixed date in return for shares) existed.
• Whether Market Fresh’s counterclaim in fraudulent misrepresentation/breach of warranties succeeded.

Decision and reasoning (concise): The court made detailed findings of fact after analysing extensive contemporaneous documents and witness evidence. Key legal and factual conclusions were:

• The March 2019 exchanges did not create a binding investment contract; the ISHA (7 August 2019) and Heads of Terms (7 October 2019) were the governing agreements.
• There was no separate enforceable "Redemption Agreement" obliging Market Fresh to redeem the Nucleus loan by a fixed date; negotiations, financing constraints and timing made any such collateral promise implausible and inconsistent with the ISHA/HoTs.
• Market Fresh’s practice of staged payments (“drip‑feeding”) was not a contractual breach of the ISHA and, although commercially adverse for the company, was not unlawful or per se unfair given Market Fresh’s financial position and the contractual structure.
• From late 2019 and in particular from mid‑2020, the court found a planned course of conduct originating with Mr McCormick (and supported by Mr Marshall and, from late 2019, Ms Jones) to curtail and ultimately exclude the petitioner from executive participation. Key acts included use of investor influence, the imposition of financial controls, and a disciplinary process which the court found was used as part of that plan (including deliberate timing of suspension/dismissal around refinancing). Those acts involved breaches of directors’ duties and undermined the petitioner’s rights as a member and director.
• Accordingly, the petitioner succeeded in showing unfair prejudice under s.994 and established an unlawful-means conspiracy in respect of the 2020 exclusion. The counterclaim by Market Fresh in deceit and breach of warranty failed: Market Fresh was aware of the company’s fragile finances and the pleaded misrepresentations did not cause the loss alleged.

Relief: The judge reserved issues of remedial relief (including any share valuation and purchaser order) for a further hearing in accordance with directions.

First‑instance judgment: the petitioner’s unfair‑prejudice petition under s.994 Companies Act 2006 succeeds in part and the petitioner also established an unlawful‑means conspiracy (the 2020 exclusion conspiracy). The court found no enforceable separate "Redemption Agreement" and dismissed Market Fresh’s counterclaim for misrepresentation/warranty. The judge reserved remedy (including any share‑purchase valuation and contributory claims) for further hearing because allocation of remedies and valuation requires further evidence and submissions. Rationale: detailed documentary findings established a deliberate, concealed plan by Market Fresh, Mr Marshall, Mr McCormick and (from late 2019) Ms Jones to curtail and exclude the petitioner from company management, effected by breaches of directors’ duties and an employment process timed and used to achieve that exclusion; preliminary alleged contractual bases for the petitioner (March Proposal; Redemption Agreement) were not proved; Market Fresh’s claim that it was induced by fraudulent misstatements was rejected on the evidence.