Joy Margaret Griffiths v John Tudor Griffiths & Ors

This is a first-instance judgment on applications to strike out or obtain summary judgment in two unfair-prejudice petitions under section 994 of the Companies Act 2006. The court applied the established test for summary disposal (whether the respondent's case has a realistic as opposed to a fanciful prospect of success) and recent authorities restricting the permissible scope of pleadings in s.994 petitions, in particular the need to identify acts or omissions of the company or conduct of its affairs and, where personal acts are pleaded, to show a causal connection to the company conduct relied on. The judge held that, on the amended pleadings before the court, there was a sufficiently pleaded cause of action in unfair prejudice and that most of the detailed pleading objections failed. Two narrow procedural defects were upheld: the trusts named as respondents should have been pleaded as their trustees. The applications to strike out the petitions in their entirety were refused, and summary judgment was not entered on the pleaded issues of head office charges, alleged exclusion from management, delay/acquiescence or an alleged binding offer to buy the shares.

This judgment determines applications by the first respondent, Mr John Tudor Griffiths, to strike out or obtain summary judgment in two unfair-prejudice petitions brought by his sister, Ms Joy Griffiths, against two family companies (T G Builders Merchants Limited and Ellesmere Sand & Gravel Co. Limited) and associated trusts and companies.

Background and parties:

• The petitions allege that the companies' affairs have been conducted in a manner unfairly prejudicial to the petitioner under section 994(1)(a) of the Companies Act 2006. The alleged unfairness arises from an asserted Fundamental Understanding or quasi-partnership among family shareholders, and from conduct said to enable Tudor to control the family group and to cause excessive "head office" or management charges to be levied by a Tudor-controlled company (Tudor Griffiths Limited).
• The principal issues concern pleading sufficiency, the proper parties/respondents (trusts vs trustees), delay and acquiescence in long-standing arrangements, and whether an offer to buy the petitioner's shares (allegedly at fair value without minority discount) made judicially redundant the petitions.

Procedural posture and relief sought:

• Joy presented two s.994 petitions. Tudor applied (by way of strike out and/or summary judgment) to dispose of the petitions or parts of them on 23 March 2022.
• The points were argued on the amended petitions and revised schedules which narrowed the issues; no full defence was before the court and factual evidence was sparse.

Issues framed by the court:

1. Pleading issues: whether the petitions improperly plead matters relating to other companies or personal conduct not causally connected to acts/omissions or the conduct of the respondent companies' affairs.
2. Delay and acquiescence: whether long delay or prior approval by the petitioner precludes relief or parts of it.
3. Offer to purchase shares: whether any concluded and reasonable offer to purchase the petitioner's shares rendered the petitions inappropriate to continue.

Court reasoning and outcome on the issues:

• The court reviewed and applied the established strike-out/summary judgment principles (Global Asset Capital, Easyair) and recent Court of Appeal authority limiting the scope of unfair-prejudice pleadings (in particular Re Kings Solutions and Graham v Every), namely that personal acts may only be pleaded where causally connected to the company conduct relied on.
• The judge accepted that each company must be considered individually, but held that it is permissible for allegations concerning one company to be pleaded where they explain how the respondent obtained or exercised control across the family group and thereby affected the company to which the petition relates. On the papers before him, the pleaded particulars (including the history of transfers, trusts and appointments) were sufficiently connected to the alleged conduct of TGBM and ESG to survive summary disposal.
• On delay and acquiescence, the court held that the available material did not permit a clear and inevitable conclusion that equitable relief should be denied; the judge followed the approach in Re Cherry Hill and declined to strike out for delay at this stage.
• As to an offer to buy the shares, the court found no binding, unconditional offer or agreed valuation mechanism comparable to that contemplated in O'Neill v Phillips, so the petitions could not be dismissed for that reason on the existing material.
• The limited formal defect identified and upheld was that the trusts were pleaded as legal persons rather than the trustees; the judge required amendment to name the trustees properly and invited the parties to agree consequential steps. Otherwise the application failed and the petitions were permitted to proceed, with directions to deal with consequential matters (amendments, timetable, possible stay for valuation process and costs).

Wider context: the court noted familiar concerns about unfair-prejudice litigation becoming unwieldy and resource-intensive and emphasised the need for concise, causally connected pleadings under s.994, but observed that the present petitions were not overly prolix and raised triable issues.

This was a first-instance application to strike out or obtain summary judgment. The court refused to strike out the petitions in their entirety and did not grant summary judgment on the principal complaints. The judge upheld only a narrow procedural objection that two trusts had been pleaded as parties rather than their trustees and directed that the petitions be amended accordingly. The court concluded that the petitions, as amended, disclosed a sufficiently pleaded cause of action under section 994 of the Companies Act 2006 and that issues of causal connection, delay/acquiescence and valuation/offers could not fairly be resolved summarily on the material before the court.