Legal Time Limits and Unfair Prejudice: A Wake-Up Call for Minority Shareholders

Overview 

This claim arises from a petition alleging unfair prejudice relating to THG Plc (“THG”). The petitioner in this matter is Zedra Trust Company (Jersey) Ltd (“Zedra”), a Jersey-based company minority shareholder that acquired a 13.2% shareholding in THG in 2013.

Initial Petition and Amendment

In 2019, Zedra brought a petition before the court under s994 of the Companies Act 2006, contending that THG’s conduct of its affairs had been unfairly prejudicial towards Zedra on several grounds. 

In 2022, Zedra sought permission to amend its petition. The proposed amendment introduced a new allegation; Zedra claimed it had suffered unfair prejudice due to being excluded from a bonus share issue that had been made to certain shareholders more than six years earlier. 

As a result, Zedra sought compensation for the alleged loss stemming from this exclusion.

THG’s Objection: Limitation Act 1980

THG opposed Zedra’s proposed amendment on the basis that it was time-barred under s9 of the Limitation Act 1980 which stipulates a six-year limitation period for “an action to recover any sum recoverable by virtue of any enactment”.

High Court Decision

The High Court concluded that claims under s994 of the Companies Act were not subject to any limitation period. Accordingly, the High Court determined that Zedra’s amendment was not time-barred and should be permitted.

Court of Appeal Decision – 23 February 2024

The Court of Appeal reversed the High Court’s decision and found in favour of THG. 

The key question for the Court of Appeal to consider was whether limitation periods do apply to unfair prejudice petitions brought under s994 of the Companies Act. In this case sections 8 and 9 of the Limitation Act were considered. 

Section 8 of the Limitation Act states: 

“(1)  An action upon a specialty shall not be brought after the expiration of twelve years from the date on which the cause of action accrued.

(2)  Subsection (1) above shall not affect any action for which a shorter period of limitation is prescribed by any other provision of this Act.”

Section 9(1) of the Limitation Act states: 

“An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

The Court of Appeal held that the right to bring an unfair prejudice petition under the Companies Act was ‘an action upon a speciality’ under s8 of the Limitation Act. Therefore, the 12 year limitation period applied unless a shorter limitation period applied under s8(2) of the Limitation Act. 

As Zedra sought monetary relief under the petition in accordance with s994 of the Companies Act, the Court of Appeal also held that s9 of the Limitation Act applied, reducing the limitation period to 6 years. As such, it held that Zedra’s complaint in respect of the 2016 share issue was time barred. 

Zedra appealed the decision to the Supreme Court contending that neither s8 nor s9 of the Limitation Act should apply to an unfair prejudice petition brought under s994 of the Companies Act.

The Supreme Court’s Judgment – 25 February 2026 

The Supreme Court considered 3 key issues on appeal, namely:

1. Whether unfair prejudice petitions are “an action upon a specialty” under s8(1) of the Limitation Act?
2. Where the only relief sought by a petitioner is monetary relief, is an unfair prejudice petition “An action to recover any sum recoverable by virtue of any enactment”; and
3. Was the monetary relief sought by Zedra “equitable relief” under s36(1) of the Limitation Act such that sections 8 and 9 are not applicable? 

The Supreme Court held that unfair prejudice petitions brought under s994 of the Companies Act were not actions of specialty because sections 994 to 996 of the Companies Act provide remedies for members who have been subject to unfairly prejudicial conduct rather than impose obligations created by deed or statute. As such, the 12 year limitation period contained in s8(1) of the Limitation Act does not apply to unfair prejudice petitions. 

It was also held that the shorter 6 year limitation period in s9 of the Limitation Act did not apply to unfair prejudice petitions either as the courts have a wide range of remedies to provide to members who are successful in unfair prejudice petitions including, but not limited to, monetary relief. 

Implications for minority shareholders 

The judgment carries significant implications for minority shareholders. 

The Supreme Court's determination that the strict limitation periods contained in sections 8 and 9 of the Limitation Act 1980 do not apply to unfair prejudice petitions under s994 of the Companies Act directly affects the ability of minority shareholders to seek redress for historic acts of unfair prejudice. 

Whilst this judgment has determined the position in relation to unfair prejudice petitions and statutory limitation, what it has not done is open the door wide to an indefinite period in which a petitioner may claim relief.

The Court has a discretion in unfair prejudice petitions both to the relief it can order and what, in its view, constitutes a reasonable delay; petitioners should remain alert to this point and seek to act promptly upon receipt of knowledge. 

Conclusion

Ultimately, the judgment clarifies the balance between certainty for companies and access to justice for minority shareholders, shaping the landscape for shareholder remedies in England and Wales.