THG Plc v Zedra Trust Company (Jersey) Ltd

A petition alleging unfairly prejudicial conduct under sections 994 and 996 of the Companies Act 2006 is not subject to the limitation periods in sections 8 or 9 of the Limitation Act 1980. Such a petition does not enforce an obligation created by statute and is therefore not an action upon a specialty. Nor is it an action to recover a sum recoverable by enactment, even where monetary relief is requested. The court has a wide discretion to select whatever relief is appropriate; any obligation to pay arises from the court’s order, not the statute.

Unjustified delay may nevertheless affect whether the court grants any remedy. A statutory limitation period for unfair-prejudice petitions would require legislation.

Zedra, a minority shareholder in THG plc, petitioned under section 994 of the Companies Act 2006. It later sought to add a complaint that its exclusion from a 2016 bonus-share issue was unfairly prejudicial. The proposed remedy was equitable compensation from directors allegedly responsible for the exclusion.

Fancourt J permitted the amendment in [2023] EWHC 65 (Ch), holding that no statutory limitation period applied. The Court of Appeal allowed THG’s appeal in [2024] EWCA Civ 158. It held that a section 994 petition was prima facie subject to the 12-year period in section 8 of the Limitation Act 1980, while a petition seeking only money fell within section 9’s six-year period.

The Supreme Court considered whether sections 8 or 9 applied and, if so, whether section 36 disapplied them as regards the compensation sought.

1. By a majority, the appeal was allowed. Lord Hodge and Lord Richards delivered the leading judgment. Lord Lloyd-Jones and Lord Briggs agreed with the dispositive reasoning. Lord Burrows dissented.

2. An action upon a specialty under section 8 of the Limitation Act 1980 is essentially an action enforcing an obligation created by a deed or statute. The mere fact that proceedings exist only because legislation authorises them is insufficient. Sections 994–996 of the Companies Act 2006 create no substantive obligation. They provide relief in respect of a state of affairs producing unfair prejudice and permit the court to make such order as it thinks fit. A petition under those provisions therefore falls outside section 8. The broader interpretation attributed to Collin v Duke of Westminster was rejected.

3. The words “any sum recoverable by virtue of any enactment” in section 9 extend beyond ascertained statutory debts. They can include unliquidated sums and monetary relief dependent upon judicial discretion. Section 9 does not, however, cover a statutory jurisdiction giving the court a wide choice between monetary and non-monetary remedies. Under sections 994–996, a petitioner has no entitlement to a particular remedy. An obligation to pay money arises only from the court’s discretionary order, not by virtue of the enactment.

4. A remedy-based “look and see” approach would create arbitrary distinctions and uncertainty. It could require limitation to depend upon the relief pleaded, the substance of the evidence or even the remedy ultimately selected after trial. Accordingly, section 9 does not apply to a section 994 petition merely because the petitioner requests compensation. Priory Garage, Rahman and Hill v Spread Trustee were held to have been wrongly decided on this aspect of section 9.

5. The alternative reliance on section 36 failed. The compensation sought was statutory relief for unfair prejudice, not equitable relief belonging to the shareholder against the directors. The shareholder had no personal claim for breach of the directors’ fiduciary duties.

6. The absence of a statutory time bar does not make delay irrelevant. When exercising its discretion under section 996, the court may refuse a particular remedy, or any remedy, where unjustified delay has adversely affected a respondent or another person. Whether a statutory limitation period should be introduced is a matter for Parliament.

7. Lord Burrows would have dismissed the appeal. He considered every statutory cause of action to be an action upon a specialty. He would have applied section 9’s six-year period where the substance of the petition was a monetary claim and section 8’s 12-year period to non-monetary relief.

1. United Kingdom Supreme Court: By [2026] UKSC 6, allowed Zedra’s appeal and restored the conclusion that the proposed complaint was not barred by sections 8 or 9 of the Limitation Act 1980.
2. Court of Appeal: By [2024] EWCA Civ 158, allowed THG’s appeal. It held that section 8 applied generally and that section 9 imposed a six-year period because the proposed complaint sought money.
3. High Court, Chancery Division: By [2023] EWHC 65 (Ch), Fancourt J rejected the limitation defence and permitted the relevant amendment to the section 994 petition.