Re Saul Harrison [1995]

Court of Appeal laid down guidelines as to when
conduct will be ‘unfairly prejudicial’.
Hoffman LJ –
Accepted test was objective, but thought that rather
than referring to the ‘reasonable bystander’, was more useful to examine the
factors which law actually takes into account in setting the standard.
Believed most important element of commercial fairness
was keeping promises and honouring agreements.
Therefore starting point in s459 case should be to ask
whether conduct in accordance with articles of association.
Also, conduct could be unlawful but might nevertheless
be found not to be unfairly
prejudicial.
So ‘trivial or technical infringements of articles were
not intended to give rise to petitions under s459’.
Likewise, conduct which is lawful might form basis of
successful petition.
Eg might be where articles did not fully reflect understandings
upon which shareholders were associated.
Thus, personal relationship between shareholder and
those controlling company may entitle shareholder to say that in certain circumstances
it would be unfair for controllers to exercise power conferred by articles.
Correlative ‘right’ in shareholder to which such relationship
may give rise may be termed ‘legitimate expectation’.
Finally, same concept of unfairness applied in s459
cases as in cases of just and equitable winding-up.