Ionut Cosmin Onea v Taiwo Ayoyunde Alegbe & Ors

A person who is not currently registered as a company member lacks standing to obtain relief under section 994 of the Companies Act 2006. That does not mean that an unfair prejudice petition must always be struck out where the petitioner seeks retrospective rectification and has a credible case that membership was wrongly removed. The court may use its broad case-management powers to determine membership and unfair prejudice together, including by ordering a split trial, where that is just, proportionate and efficient. A rectification claim brought within an unfair prejudice petition is not automatically abusive merely because a Part 8 claim form would ordinarily be used. The court should consider all the circumstances, including procedural efficiency, prejudice, overlap of issues and the risk of duplicated proceedings.

The petitioner had been a founder, shareholder and director of the respondent company. Following his dismissal for alleged gross misconduct, his shares were converted and transferred under the company’s articles, and his name was removed from the register of members.

He presented a petition under section 994 of the Companies Act 2006, seeking both unfair prejudice relief and retrospective rectification of the register under section 125. The respondents applied to strike out or stay the petition, arguing that the petitioner was not a member when it was presented, that the rectification claim was procedurally abusive, and that the petition should await related confidentiality proceedings.

The central issues were whether the petition should be struck out or stayed, whether standing could be determined within the same proceedings, and whether the related proceedings justified a stay.

1. Standing. Section 994 of the Companies Act 2006 permits an application only by a member, subject to section 994(2). Membership is ordinarily determined by entry in the register. No order under section 994 can be made in favour of a person who has not established standing.
2. Case management. The court is not inevitably required to strike out an unfair prejudice petition merely because the petitioner is not presently registered, where the petition itself advances a credible claim to retrospective rectification. The question is one of discretionary case management under the overriding objective. The court may stay the petition, direct separate rectification proceedings, order a preliminary issue, or determine standing at the substantive trial, depending on the circumstances.
3. Appropriate course. The petitioner’s claim to retrospective rectification had a real prospect of success, and the rectification and unfair prejudice allegations substantially overlapped. There was no winding-up claim, and a split trial would avoid duplicated evidence, inconsistent findings and potentially three separate trials. The petition was therefore allowed to proceed to a split trial addressing standing and unfair prejudice, with remedy issues reserved if necessary.
4. Abuse of process. The petitioner’s knowledge that he was not currently registered did not make the petition abusive. Nor was it abusive to seek rectification within a section 994 petition rather than by Part 8 claim form. At most, that was a procedural irregularity which could be waived or remedied. A claim directly against the company, such as rectification, may properly be advanced in the same proceedings where there is substantial overlap.
5. Stay. The related confidentiality proceedings did not justify a stay. Their order expressly permitted relevant documents to be used in the petition, and they would not determine the petitioner’s dismissal, leaver status, membership, unfair prejudice or remedy.
6. The respondents’ application was dismissed.