Joining The Company: When Should A Company Be Joined To A Shareholder Dispute?

• Published date: 28 June 2022
• Law Firm: Gatehouse Chambers
• Author: Ms Emily Betts and Amy Held

King & Ors v Kings Solutions Group Ltd & Ors [2022] EWHC 1099 (Ch)

Background

This appeal arose in the context of long-running and complex dispute between the shareholders of Kings Solutions Group Limited ('the Company').

A petition under section 994 of the Companies Act 2006 was presented in March 2018. That petition did not name Kings Security Systems Limited ('KSSL'), a subsidiary of the Company, as a Respondent. However, in August 2018, the legal representatives of the Petitioners requested that the named Respondents consent to KSSL being joined, because it was "sufficiently connected" to the unfair prejudice which the Petitioners claimed to have suffered to justify it being held jointly and severally liable to purchase the Petitioners' shares.

In December 2018, both the Company and KSSL were joined by consent on the basis that (i) joinder was necessary in order to for either be bound by any decision of the Court and/or give appropriate disclosure; but (ii) both the Company and KSSL would take a neutral position in the dispute. In response, it was confirmed that the Petition would be duly amended, though this never occurred.

In January 2019, Points of Claim were served...