ACCA LW · Chapter 11 · Question 3 of 10
In Ebrahimi v Westbourne Galleries, a company was formed on the basis of mutual trust between members who all expected to participate in management. One member was removed as a director and excluded from management. What remedy did the House of Lords grant?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) A winding-up order on the just and equitable ground
Explanation
The removal was lawful under the Companies Act and the articles, but the company was a 'quasi-partnership' formed on mutual confidence and an understanding that all would participate in management. The House of Lords held that equitable considerations made it just and equitable to wind the company up. Today a petition for unfair prejudice under s994 is often an alternative remedy.
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