The year 2025 brought two significant High Court decisions in this case and this case, which now shape what the courts expect from unfair prejudice petitions under s.994 Companies Act 2006, and how such petitions are likely to be approached throughout 2026.
1. Ronnan & Anor v Stansfield & Anor (2025)
This case clarified the position that unfair prejudice petitions remain primarily a minority shareholder remedy.
This case involved three people who owned and ran a bar together.
- Mr and Mrs Ronnan owned 55% of the company.
- Mr Stansfield owned the remaining 45%.
When the relationship between them broke down, Mr Stansfield closed the club, which led the Ronnans – the majority shareholders, to bring an unfair prejudice petition against him.
The case went to the Court of Appeal as Mr Stansfield’s application to strike out the unfair prejudice petition was dismissed.
The Court of Appeal made it clear:
- Unfair Prejudice Petitions are mainly for minority shareholders.
- Majority shareholders should almost never bring these petitions except in exceptional circumstances, where no other remedy is available.
- The majority shareholder must show that it was not only difficult but practically impossible for the company to use its corporate control to remedy the unfair prejudice conduct.
In this case, the club did have other avenues to pursue an appropriate remedy. The appeal was therefore allowed, and the petition was struck out.
2. Farnsworth v Chave (2025)
In this case, the petitioner attempted to use an unfair prejudice petition to bring claims against individuals with no genuine involvement in the company’s affairs.
The Court took issue with this and applied the CPR 19.2(3) “desirability test”, which allows it to remove parties from proceedings where they should not be involved.
The Court exercised its discretion to remove two respondents who were not involved in the company’s affairs, and no meaningful remedy was sought against them, as the claim against these two respondents should have been made under Part 7 proceedings.
What These Decisions Mean for 2026
Here are the key takeaways:
- Unfair Prejudice Petitions cannot be used as a tactical tool. They must relate to genuine prejudicial conduct.
- Unfair Prejudice Petitions should primarily be brought by minority shareholders. A majority shareholder can bring a petition, but only when there is practically no other remedy available.
- Expect the court to remove irrelevant parties. If someone has been added to a petition without a proper connection to the allegations, the court will remove them. It is not a way to pull unrelated individuals into wider disputes.
How can we help?
Anika Zahid is an Associate in our Dispute Resolution team, specialising in commercial litigation and professional negligence claims.
If you would like advice in relation to the points raised in this article, please contact Anika or another member of the team in Derby, Leicester, or Nottingham on 0808 258 0461 or via our online form.
Contact usIf this article relates to a specific case/cases, please note that the facts of this case/cases are correct at the time of writing.