The applicant and first respondent were husband and wife. The applicant owned 49 percent of the voting shares in the second respondent company (the company) which was a tour operator primarily providing specialist winter tours of Finland for travellers from the United Kingdom. The first respondent owned 51 percent of the voting shares. In mid-2009, the parties began divorce proceedings. Prior to that, they had run the company together, as directors, with an accountant, G. The applicant was in sole charge of the Finnish side of the business, and was the sole director of each of the company's wholly-owned Finnish subsidiaries (the Finnish subsidiaries). He had been in that position for at least 20 years and in that time had built up a close relationship with suppliers and clients in that country. The first respondent was concerned with the company's operations in the United Kingdom; the extent of her precise managerial role was in dispute, but it was clear that at all material times she was the managing director of the company. In September 2009, the company's value as a going concern was assessed at £30m, and its liquidated value as £16.5m. In November 2009, the first respondent appointed two new directors to the board, one of which was her daughter, (T). In early 2010, G resigned, with the result that the first respondent effectively obtained control of the board, although the applicant remained a director. The first respondent then proposed a series of resolutions by which she and T would replace the applicant in his position in respect of the Finnish subsidiaries. It was the first respondent's contention that her action was prompted by the applicant's refusal to make proper, transparent disclosure of the affairs of the Finnish subsidiaries. In April, the applicant issued an unfair prejudice petition, alleging that, inter alia, the proposed resolution of the board would have a detrimental effect on those subsidiaries and the company as a whole. He also issued the instant application for interim relief, namely, an injunction restraining the board from passing the proposed resolutions to replace him.

At the hearing of the application, the applicant indicated his intention to seek permission to amend the petition to plead that the company was run as a quasi-corporate partnership; that the expectation had been that both parties would be involved in its active management and that of its subsidiaries; that through the proposed resolutions, the first respondent had sought to exclude the applicant from such management; and that no offer had been made to buy him out as a quid pro quo for his exclusion. On that basis, the applicant submitted that there was a serious issue to be tried on the petition, and that the balance of convenience weighed in his favour on the grounds that: (i) if the first respondent and T were put in control of the Finnish subsidiaries, there was a serious risk of grave dislocation to the business and therefore of damage to the company, including risk of its failure; and (ii) his alleged lack of transparency vis-a-vis the Finnish subsidiaries had not caused any harm to date and was not likely to cause any irredeemable damage in future.

The application would be dismissed.

On the facts, there was clearly a serious issue to be tried on the unfair prejudice petition. In respect of the balance of convenience, the following factors were of relevance. First, the removal of the applicant and his replacement by the first respondent would risk damaging the company's goodwill, although not the value of its fixed assets; however, the company's value was unlikely to be so diminished that the applicant could not be properly compensated, bearing in mind the size of the company's assets and its insignificant liabilities. Second, if the value of the company did fall while under the management of the applicant and first respondent, it would be difficult to ascertain if any such fall was the fault of the first respondent or of market forces. However, bad business judgment was not in itself the proper subject matter of compensation by way of unfair prejudice proceedings; the applicant's real remedy was not to be kept permanently in control of the company against the wishes of the majority shareholders, but to be properly compensated for his exclusion. Finally, the first respondent herself risked real prejudice through being wrongly kept out of the control of the business if the applicant's petition turned out to be unfounded. Moreover, the consequence of granting an injunction in the circumstances of the instant case would be the continuation of a business relationship between two people who could not get on; although the applicant would be in control of the subsidiaries in Finland and the first respondent of the London company, they would have to deal with one another because in reality they were running one business. It was also appropriate to have regard to the possible duration of the interim period, and the possible final result of the substantive proceedings. The former was of uncertain duration. Regarding the latter, either the first respondent would succeed on the petition so that she would be in undisputed majority control, or the applicant would win and have the prospect of being properly compensated. Whichever outcome eventuated, the overwhelming likelihood was that the applicant would not be left in control of any part of the business; it followed that an interim regime designed to prolong the opposite state of affairs was not strongly attractive. In all those circumstances, there appeared to be little point in postponing the inevitable handing over of control of the whole company's business to the first respondent.

American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504 applied.