Re Elgindata [1991]

Question for court was whether mismanagement may
constitute unfairly prejudicial conduct.
Warner J –
Cases where there is disagreement between petitioners
and respondents as to whether particular managerial decision was, as matter of
commercial judgement, right one to make, or as to whether particular proposal relating
to conduct of company’s business is commercially sound, will not satisfy test under s459.
But did not doubt that it in appropriate case would be
open to court to find that serious mismanagement of company’s business
constitutes conduct that is unfairly prejudicial to interests of minority
shareholders.
However, court will normally be very reluctant to
accept that managerial decisions can amount to unfairly prejudicial conduct.
Judge ill-qualified to decide.
Also, shareholder acquires shares knowing their value
will depend in some measure on competence of management – takes risk management
may not prove to be of highest quality.