George McPherson successful in landmark Supreme Court decision on the application of statutory limitation periods to unfair prejudice petitions
The Supreme Court has handed down its long-awaited judgment in THG Plc v Zedra Trust Company (Jersey) Ltd: [2026] UKSC 6 (on appeal from [2024] EWCA Civ 158). The appeal, heard by the Supreme Court just over a year ago, on 17 and 18 February 2025, concerns whether a statutory limitation period, under the 1980 Limitation Act (the “LA 1980”), applies to unfair prejudice petitions brought pursuant to sections 994 to 996 of the Companies Act 2006 (“CA 2006”).
In February 2024 the Court of Appeal decided that a statutory limitation period did apply to unfair prejudice petitions. The decision caused some surprise among practitioners because it overturned more than 40 years of “received wisdom”, reflected in earlier decisions of the High Court and the Court of Appeal and all the leading practitioner textbooks.
To the relief of some practitioners but no doubt to the disappointment of others (depending on the facts on which they are currently advising), the Supreme Court has now reinstated the received wisdom that no statutory limitation period applies.
The limitation issue before the Supreme Court arose out of Zedra’s application to amend its petition. By the amendment application, Zedra sought to introduce an additional ground of complaint based on the circumstances in which Zedra alleges it was unfairly excluded from participating in a bonus issue of shares by THG in July 2016. By way of relief, Zedra sought an order that the respondent directors of THG pay equitable compensation to redress the loss it allegedly suffered by its exclusion from the issue of bonus shares. The application was heard by Fancourt J in December 2022, more than six years after the events had taken place. THG argued that, because Zedra was seeking only monetary relief pursuant to CA 2006 section 996, it was bringing an action “to recover [a] sum recoverable by virtue of [an] enactment” pursuant to LA 1980 section 9, to which a six year period of limitation applies, and so the claim was time-barred and the amendment to introduce it should not be permitted. Fancourt J disagreed: [2023] EWHC 65 (Ch). He relied on the decision of the Court of Appeal in Cherry Hill Skip Hire Ltd [2022] EWCA Civ 531, which had approved the received wisdom that no statutory limitation period applied to unfair prejudice petitions.
The Court of Appeal disagreed with Fancourt J and Cherry Hill Skip Hire Ltd: [2024] EWCA Civ 158. It held that an unfair prejudice petition was an “action upon a specialty” which fell within LA 1980 section 8, and was therefore generally subject to a 12 year limitation period, unless the relief sought in the petition was purely monetary relief, in which case the limitation period was commuted to six years under LA 1980 section 9.
The Supreme Court’s reasoning is underpinned by a detailed analysis of (among other matters): (1) the nature of a “specialty” (and how it has changed over time); (2) the evolution of the statutes of limitation enacted since the 17th century; (3) the approach to statutory limitation in unfair prejudice actions in other jurisdictions; and (4) the statutory language used in CA 2006 sections 994 and 996.
In essence, the Supreme Court has held that a section 994 petition is not an action upon a specialty under LA 1980 section 8 because CA 2006 section 994 does not create an enforceable obligation but merely a right to petition the court for relief in respect of the existence of a past or present state of affairs as regards the company: see [110]-[129]. Moreover, a section 994 petition seeking monetary relief is not an action to recover a sum recoverable “by virtue of [an] enactment” because the Court has a wide discretion under section 996 to grant “such order as it thinks fit for giving relief in respect of the matters complained of” (including but not limited to monetary relief), even if monetary relief is the only relief claimed by the petitioner: [130]-[159].
In so holding, and overturning the Court of Appeal, the Supreme Court accepted Zedra’s argument that no statutory limitation period applies to unfair prejudice petitions.
The judgment of the Supreme Court therefore provides welcome clarification for practitioners advising litigants facing, or seeking to bring, claims based on historical allegations of unfairly prejudicial conduct.
George McPherson (led by Paul Chaisty KC at first instance and in the Court of Appeal and by Andrew Thompson KC in the Supreme Court) appeared for the successful petitioners, Zedra.
George was instructed by Joel Heap and Sam Pringle of DWF LLP.
A copy of the judgment of the Supreme Court is available here.
