Re Saul D Harrison & Sons plc [1995] 1 BCLC 14, [1994] BCC 475, is a UK company law case on an action for unfair prejudice under s.459 Companies Act 1985

Companies Act 1985

The Companies Act 1985 is an Act of the Parliament of the United Kingdom of Great Britain and Northern Ireland, enacted in 1985, which enabled companies to be formed by registration, and set out the responsibilities of companies, their directors and secretaries.The Act was a consolidation of...

 (now s.994 Companies Act 2006

Companies Act 2006

The Companies Act 2006 is an Act of the Parliament of the United Kingdom which forms the primary source of UK company law. It had the distinction of being the longest in British Parliamentary history: with 1,300 sections and covering nearly 700 pages, and containing 16 schedules but it has since...

). It was decided in the Court of Appeal and deals with the concept of members of a business having their "legitimate expectations" disappointed. Vinelott J at first instance had denied the petition, and the Hoffmann LJ, Neill LJ and Waite LJ in the Court of Appeal upheld the judgment.

Facts

Saul D Harrison & Sons plc ran a business that was established in 1891 by the petitioner's great grandfather. It made industrial cleaning and wiping cloths, made from waste textiles. It operated from West Ham

West Ham

West Ham is in the London Borough of Newham in London, England. In the west it is a post-industrial neighbourhood abutting the site of the London Olympic Park and in the east it is mostly residential, consisting of Victorian terraced housing interspersed with higher density post-War social housing...

 and after 1989 from Hackney

London Borough of Hackney

The London Borough of Hackney is a London borough of North/North East London, and forms part of inner London. The local authority is Hackney London Borough Council....

. The petitioner had "class C" shares, which gave her rights to dividends and capital distribution in a liquidation. But she had no entitlement to vote, and the company had been running at a loss. She alleged that the directors (who were her cousins) had unfairly kept running the business just so they could pay themselves cushy salaries. Instead, she said, they should have closed down the business and distributed the assets to the shareholders.

Judgment

On the facts, there was no unfairly prejudicial conduct. The board of directors were bound to manage the company in accordance with their fiduciary obligations, the articles of association and the Companies Act. The unfair prejudice action does protect certain legitimate expectations, akin to those which may affect one's conscience in equity, from being disappointed. But here there was no legitimate expectation for more than the duties discharged, and so no obligations had been breached. Hoffmann LJ wrote,