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Unfair prejudice remedy - Coggle Diagram
Unfair prejudice remedy
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Any person who is a member of the company may petition the court, former members cannot petition the court
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In order for a s.994 petition to succeed the petitioner must show that the conduct complained of is both unfair and prejudicil
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Member qua member
A s.994 petition will only succeed if it is the petitioners interests as a member than have been unfairly prjudiced
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Equitable considerations
In certain companies, rear must be had to equitable considerations when determining if the petitioners interests as a member have been unfairly prejudicied
Equitable considerations often involve a fundamental understanding between the shareholders which formed the basis of their association but was not put into contractual forms
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Cases involving quasi partnership companies have largely involved a petitioner who has been excluded from managing the company and has alleged that this exclusion constitutes unfairly prejudicial conduct
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Remedie
If the court is satisfied that the s.994 petition is well founded, it may such order as it thinks fit for giving relief
The petitioner must specify the remedy he seeks, the court is not bound to provide this remedy
The court may deny the petitioner a remedy where a substantial period has elapsed between the unfairly prejudicial conduct and the petition being brought
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Share purchase orders
A share purchase order under which the court orders that the respondent buys the shares of the petitioner, is the usual remedy
The court may also order that the company buys the petitioners share or that the respondent must sell his shares to the petitioner
Where a share purchase order is made, a key issue is at what price the shares must be pruchased
Given s.994 petitioners are minority shareholders, one key issued is whether the share price should be discounted to reflect the minority shareholders lack of control
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