Jane Griffiths & Anor v Barbara Wheatley & Ors

The petition was an unfair prejudice petition under the Companies Act 2006, section 994. The claim relied on a range of allegations including improper transactions, allegedly excessive employment of friends and family (sinecures), restricted access to company financial information and a refusal to appoint a shareholder as a director. The respondents applied for summary judgment or striking out under CPR Part 24 and CPR rule 3.4.

The court admitted late evidence after granting relief from sanction under the Denton principles and then determined the Main Application on the basis that the petition had no realistic prospect of success. Key grounds were that the petitioners had no contractual or statutory rights to the additional information or to appointment as a director, the company articles (Table A, Regulation 125) did not confer such rights, and there was no satisfactory equitable basis for transferable management expectations from the deceased directors. The alleged improper transactions were abandoned, the sinecure allegations were speculative and undeveloped, and the director loan was a small, historic, repaid advance which could not sustain an unfair prejudice claim.

Background and parties: The petitioners, Mrs Jane Griffiths and Mrs Julie Jones, presented an unfair prejudice petition on 20 January 2025 in respect of Wall Lag (Wales) Limited. The principal respondents before the court were Mrs Barbara Wheatley and Mrs Alison Gomm, who are directors and majority registered shareholders. The company is a long-established family business. The petition followed correspondence about the valuation and proposed sale of shares following the death of a former director and shareholder, Mr Richard Clwyd Griffiths.

Nature of the applications:

• The Main Application: an application by Mrs Wheatley and Mrs Gomm for summary judgment or striking out the petition under CPR Part 24 and CPR rule 3.4 on the basis the petition disclosed no real prospect or reasonable grounds.
• The Relief from Sanction Application: by the petitioners for permission to rely on evidence served late in breach of an order dated 11 April 2025.
• The Amendment Application: by the petitioners to amend their Points of Claim to withdraw some allegations and add a directors' loan allegation.

Issues framed: (i) whether relief from sanction should be granted to admit the petitioners' late evidence; (ii) whether the petition, as pleaded (or as amended), disclosed a realistic prospect of success under section 994 of the Companies Act 2006; (iii) whether specific pleaded conduct (improper transactions, sinecures, denial of information, refusal of appointment, and director loans) could found unfairly prejudicial conduct.

Court’s reasoning and decision: The court granted relief from sanction and admitted the evidence on the basis the Denton test was satisfied. Turning to the merits, the judge applied established summary judgment principles (including guidance from Easyair and related authorities) and examined whether the petitioners had contractual, statutory or equitable rights entitling them to the relief sought. The articles (Table A, Regulation 125) did not confer a right to inspect accounting records beyond statutory entitlements. There was no evidence of a sufficiently particularised common understanding or quasi-partnership expectation that management rights or board positions would transfer to the petitioners or their representatives on the death of a director. The impropriety allegations were withdrawn; the sinecure allegations were insufficiently particularised and speculative; the director loan was small, historic and repaid and fell below the statutory threshold for members' approval (section 207(1) logic). Consequently the petition had no realistic prospect of success and disclosed no reasonable ground for bringing the claim. The amendment was therefore dismissed and summary judgment entered for the respondents; alternatively the petition would have been struck out under CPR rule 3.4.

This was a first instance disposal. The court granted relief from sanction to admit the petitioners' late evidence, but gave summary judgment for the first and second respondents (Mrs Wheatley and Mrs Gomm) on the Main Application and dismissed the Amendment Application. The judge held that the unfair prejudice petition under Companies Act 2006, section 994, had no realistic prospect of success because the petitioners had no contractual, statutory or equitable basis for the principal complaints: the alleged entitlement to additional company information and to appointment as a director were unsupported by the articles or any recognised equitable expectation; the improper transactions claim was abandoned; the sinecure allegations were speculative and undeveloped; and the directors' loan complaint related to an isolated small historic advance repaid within months and did not amount to unfair prejudice.