英语论文网

company lawyer
2006
A criticism of the contractual approach to unfair prejudice
Paul Paterson
Subject: Company law. Other related subjects: Legal systems
Keywords: Comparative law; Fairness; Minority shareholders; New Zealand; Unfairly prejudicial
conduct
*Comp. Law. 204 Introduction
Since the inception of democracy, political theorists have struggled to 代写留学生论文devise mechanisms foprotecting minority rights in the face of majority rule. In the United States of America, for example, the
working of an elaborate constitutional system attempts to reconcile these often contradictoryconcepts. In company law, it is the remedy of unfair prejudice that navigates the fine line betweenprotecting minority shareholders from unfairness and respecting management prerogative. As a
result, the jurisdiction is one of the most frequently invoked, yetleast conceptually certain, areas of
company law.
Minority shareholders are probably not the only group who may bring an action for unfair prejudice,but represent the overwhelming number of applicants by virtue of their lack of control of the
company.1 The starting point for this group must always be that thegeneral principle of corporategovernance is majority rule,2 and there is no unfairness simply because those in control of the
company take a contrary view in respect of management decisions.3 It is clear that there must be“something more” before unfairness can be found,4 although the meaning of this requirement is
substantially less certain. Lord Hoffmann, writing extra-judicially, has recently stated that5“The rights of minority shareholders is an important and rapidly developing branch of law. It raises
difficult questions of principle: the conflicts between the letter and the spirit of the company'sconstitution; between the sanctity of the bargain between shareholders embodied in the articles and
the prevention of unfair treatment; between giving a remedy which is effective and allowing it tobecome an instrument of abuse; between the attainment of fairness and the amount of money which
the parties can afford to spend on litigation”.
This article will analyse the conceptual basis for the unfair prejudice remedy in an attempt to explainwhich principles, if any, underlie the operation of the jurisdiction. It will begin with an outline of the
statutory provisions for unfair prejudice contained in England, New Zealand, and other jurisdictions,and then attempt a broad categorisation of claims made under unfair prejudice provisions. The next
section will focus on recent developments in England and New Zealand, including the House of Lords'decision in O'Neill v Phillips and the New Zealand Court of Appeal judgment in Latimer Holdings Ltd v
SEA Holdings Ltd. Finally, the ability of the contractual approach to provide a conceptual basis for theunfair prejudice remedy will be considered.
Statutory context
English legislation
Paul Paterson 175
Comp. Law. 2006, 27(7), 204-215
1. D. D. Prentice,”The Theory of the Firm: Minority Shareholder Oppression: Sections 459-461 of the Companies Act 1985” (1988) 8 Oxford
Journal of Legal Studies 55; H. A. J. Ford, R. P. Austin and I. M. Ramsay, Ford's Principles of Corporations Law (LexisNexis
Butterworths, Australia, Service 32: 6/2002), para.11.440; Vujnovich v Vujnovich [1990] B.C.L.C. 227; Anthony Boyle (ed.), Gore-Browne
on Companies (Jordan Publishing Ltd, United Kingdom, Supplement 38), para.28