Peter Waddell Holdco Limited & Anor v Bluebell Cars Holding Limited & Ors

On an application for interim injunctive relief, the court must consider whether there is a serious issue to be tried, the adequacy of damages and the balance of convenience. A claimant need not establish that its claim is likely to succeed, but must show an adequate risk of irremediable harm if relief is refused. The status quo is not necessarily the position before the disputed events, particularly where circumstances have changed rapidly. The court may refuse restoration where reinstatement would create a serious, difficult-to-quantify risk to a company, its employees or counterparties. Contractual approval or veto rights may be inappropriate for interim enforcement where they are ancillary to directorships and narrower contractual protections remain available.

The claimants sought interim injunctions under a Securityholders’ Deed concerning the management of a group of car dealerships. The relief challenged notices by the minority shareholder purporting to exercise step-in rights following financial underperformance and material default provisions. The claimants sought restoration of contractual approval rights and, initially, Mr Waddell’s directorship; they later proposed appointment of a non-executive director or equivalent protective arrangements.

The claimants alleged defects in the notices, variation or waiver of financial targets, force majeure, breaches of duties of good faith and reasonableness, discrimination, and procedural unfairness in the investigation of alleged misconduct. The central questions were whether there was a serious issue to be tried and, if so, whether damages were inadequate and the balance of convenience favoured interim restoration.

1. Serious issue. The application was not dismissed on the basis that the contractual claims were hopeless. Although the claimants faced substantial difficulties, including weak evidence, ambitious arguments and inadequate explanations for allegations of misconduct, the issues concerning construction, variation, waiver, force majeure, contractual duties and the investigation process warranted further investigation, including disclosure.
2. Damages and balance of convenience. Applying the guidelines in American Cyanamid v Ethicon [1975] UKHL 1, the court held that the claimants had not shown an adequate risk of irremediable or uncompensatable harm. Both sides appeared capable of satisfying a substantial pecuniary award, and any claim concerning company losses could potentially be addressed through relief under the Companies Act 2006.
3. The suggested status quo was not necessarily the position before 7 March 2024. The circumstances had changed during fast-moving and controversial events, so restoration of the earlier position was theoretically doubtful and impractical. The guidance in Re a Company [1985] BCLC 80 did not justify restoration on these facts.
4. Conversely, restoring Mr Waddell’s management influence, directorship-related rights or proposed proxy arrangements carried a glaring risk of serious, unpredictable and unquantifiable harm to the group, its employees and important counterparties. The narrower protections under Schedule 2 and clause 24(b) of the deed were more appropriate in the interim.
5. The application for interim injunctions was dismissed. Questions concerning an expedited trial, further directions and costs were left for written submissions.

First-instance decision. No appellate history was stated in the judgment.