Maggie Otto v Inner Mongolia Happy Lamb Catering Management Company Ltd

Hearing dates: 13–14 May 2025

This judgment was handed down remotely at 10:30 am on 10 September 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archive

Introduction

This is my judgment on two applications made in this unfair prejudice petition, to begin with at least. The first application, by notice dated 24 February 2025, is the application of the first to fifth respondents to strike out the petition, alternatively for reverse summary judgment. The second is the petitioners' application, by notice dated 1 April 2025, to re-amend their petition, and also to join a fifth petitioner, In-Touch Investment Holding Ltd (“In-Touch”). I say “to begin with”, because the position has moved on, and is regrettably more complicated than that. The petition as originally formulated, concerned the affairs of three companies, the sixth, seventh and eighth respondents. The sixth is the most important. The allegations concerning the seventh were dismissed some time ago, as will be seen below. The eighth respondent is said to be less valuable than the sixth, and only the fourth petitioner has any claim to a shareholding in it.

The two applications, or what survived them by the time of the hearing, were argued before me on 13 and 14 May 2025, when Marc Beaumont of counsel appeared for the petitioners, and Edward Davies KC and Seamus Woods of counsel appeared for the first to fifth respondents (whom I shall call “the active respondents”). As is usual, the sixth and eighth respondents were neither present nor represented. The petitioners' claims in respect of the seventh respondent were abandoned some time ago, it being common ground that there is no value in the shares of that company, and it was dismissed from the claim in 2024. I am sorry for the length of time that it has taken to produce this judgment, caused partly by pressure of other work, but partly by the exigencies of this extraordinary litigation.

Background and nature of the claims

The background and broad nature of the claims made and the defences to them appear from the (then agreed) case summary presented to the court at the PTR in February 2024. This reads as follows (although I regret to say that I am so technologically challenged, that I cannot make the numbering of the paragraphs and sub-paragraphs of the original document exactly correspond to the text below):

“1. The Petitioners have issued an unfair prejudice petition in respect of the alleged unfairly prejudicial conduct of the affairs of the 6 ^th, 7 ^th and 8 ^th respondents contrary to their alleged interests as shareholders in the 6 ^th to 8 ^th Respondents, companies which the Petitioners further allege are under the control of the 1 ^st to 5 ^th Respondents.

i) 6 ^th Respondent

a) The Petitioners are all shareholders in the 6 ^th Respondent (1 ^st Petitioner has 5% shareholding; 2 ^nd Petitioner has 2% shareholding; 3 ^rd Petitioner has 5% shareholding; 4 ^th Petitioner has 1% shareholding).

b) The 5 ^th Respondent is the sole director of the company and has a 10% shareholding in the company.

c) The 1 ^st Respondent has a 60% shareholding in the company; the 2 ^nd Respondent has a 7% shareholding in the company; and the 4 ^th Respondent has a 9% shareholding in the company. None of the 1 ^st Respondent, 2 ^nd Respondent or 4 ^th Respondent are directors of the company.

d) It is denied that the 6 ^th Respondent is under the control of the 3 ^rd Respondent who is neither a director nor shareholder of the company.

ii) 7 ^th Respondent

a) The Petitioners are all shareholders in the 7 ^th Respondent (1 ^st Petitioner has 5% shareholding; 2 ^nd Petitioner has 2% shareholding; 3 ^rd Petitioner has 5% shareholding; 4 ^th Petitioner has 1% shareholding).

b) The 5 ^th Respondent is the sole director of the company and has a 10% shareholding in the company.

c) The 2 ^nd Respondent has a 19.5% shareholding in the company; the 3 ^rd Respondent has a 10% shareholding in the company; and the 4 ^th Respondent has a 9% shareholding in the company. None of the 2 ^nd Respondent, 3 ^rd Respondent or 4 ^th Respondent are directors of the company.

d) It is denied that the 7 ^th Respondent is under the control of the 1 ^st Respondent who is neither a director nor shareholder of the company.

iii) 8 ^th Respondent

a) The 4 ^th Petitioner is a shareholder of the 8 ^th Respondent with a 1% shareholding in the company. None of the 1 ^st Petitioner, 2 ^nd Petitioner or 3 ^rd Petitioner are shareholders in the 8 ^th Respondent or have any interest in the company. Accordingly, none of the 1 ^st Petitioner, 2 ^nd Petitioner or 3 ^rd Petitioner are entitled to bring an unfair prejudice claim in relation to the 8 ^th Respondent.

b) The 5 ^th Respondent is the sole director of the company but is not a shareholder of the company.

c) The 2 ^nd Respondent has a 10% shareholding in the company; the 3 ^rd Respondent has a 10% shareholding in the company; and the 4 ^th Respondent has a 22.5% shareholding in the company. None of the 2 ^nd Respondent, 3 ^rd Respondent or 4 ^th Respondent are directors of the company.

d) It is denied that the 8 ^th Respondent is under the control of the 1 ^st Respondent who is neither a director nor shareholder of the company.

2. The Petitioners allege that the affairs of the 6 ^th to 8 ^th Respondents have been conducted in such a way as to be, and continue to be, unfairly prejudicial to their interests, specifically the Petitioners allege as follows:

iv) Part of their shareholdings (specifically the 1 ^st to 3 ^rd Petitioners) have been expropriated without recognition of the fair value of those shareholdings

v) The Respondents have failed to adhere to an agreement entered into in 2017 in relation to shareholdings

vi) The Respondents have failed to adhere to a further agreement entered into in 2018 in relation to shareholdings

vii) The Petitioners' roles in the various companies were re-assigned without proper reference or agreement

viii) The 1 ^st to 5 ^th Respondents took over control of the business and affairs of the 6 ^th to 8 ^th Respondents

ix) The First Petitioner, and a shareholder who is also the sole director of the Third Petitioner, were forced to step down from being directors of the 6 ^th to 8 ^th Respondents

x) The First Petitioner's salary was reduced unilaterally

xi) Expenses were not reimbursed

xii) The Petitioners were excluded from the conduct of the 6 ^th to 8 ^th Respondents

xiii) The Petitioners were denied access to company records and documents relating to the 6 ^th to 8 ^th Respondents

xiv) The First and Second Petitioner, and a shareholder who is also the sole director of the Third Petitioner, were subject to ongoing bullying and intimidation by the Respondents

xv) The Respondents have conducted the affairs of the 6 ^th to 8 ^th Respondents in a wrongful, dishonest and illegal manner

3. The Respondents vigorously deny all allegations above in full. In particular, the Respondents have responded as follows:

xvi) Reduction of shareholdings of 1 ^st Petitioner, 2 ^nd Petitioner and 3 ^rd Petitioner was not without consent and does not otherwise amount to expropriation

a) 1 ^st Petitioner

i) It is denied that any reduction of the 1 ^st Petitioner's shareholding in the 6 ^th Respondent was without her consent and/or otherwise amounts to expropriation. In any event, it is noted that MO first became a shareholder in the company as of 22 January 2020 with a 5% shareholding which remains unchanged.

ii) It is denied that any reduction of the 1 ^st Petitioner's shareholding in the 7 ^th Respondent was without her consent and/or otherwise amounts to expropriation. It is noted that MO first became a shareholder in the company as of 18 May 2020 with a 5% shareholding which remains unchanged.

iii) The 1 ^st Petitioner does not have, and has not at any time had, any interest in the 8 ^th Respondent.

b) 2 ^nd Petitioner

i) It is denied that any reduction of the 2 ^nd Petitioner's shareholding in the 6 ^th Respondent was without his consent and/or otherwise amounts to expropriation. In any event, it is noted that upon incorporation of the 6 ^th Respondent, the 2 ^nd Petitioner had a 2% shareholding in the company which currently remains unchanged.

ii) It is denied that any reduction of the 2 ^nd Petitioner's shareholding in the 7 ^th Respondent was without his consent and/or otherwise amounts to expropriation.

iii) The 2 ^nd Petitioner does not have, and has not at any time had, any interest in the 8 ^th Respondent.

c) 3 ^rd Petitioner

i) It is denied that any reduction of the 3 ^rd Petitioner's shareholding in the 6 ^th Respondent was without its consent and/or otherwise amounts to expropriation.

ii) It is denied that any reduction of the 3 ^rd Petitioner's shareholding in the 7 ^th Respondent was without its consent and/or otherwise amounts to expropriation.

iii) The 3 ^rd Petitioner does not have, and has not at any time had, any interest in the 8 ^th Respondent.

xvii) the...