Case No. CR-2019-LDS-000669

1.For convenience I set out some of the main headings in this judgment by way of index:2.These proceedings address only one area of a number of bitter family disputes. They are but one of a number of sets of legal proceedings between members of the Hughes’ family. Within these proceedings there have been many applications which should not have been necessary. In short, the parties are hunkered down in legal trench warfare. The case has been referred to as taking place against a backdrop of a story, literally, of “from rags to riches”. These proceedings are part of the fight over the riches, or perceived riches. 3.The petition is presented by Lisa Pickering, the sister of the first respondent, John Hughes. She is also the daughter of the third respondent, Charles Hughes. The second respondent, James Hughes, is the son of the first respondent. I refer to the first to third respondents as the “Relevant Respondents”. In considering allegations made against the Relevant Respondents I usually refer to the Relevant Respondents without differentiating between them and the expression should therefore be treated as including one or more of them as individuals. 4.One set of proceedings between family members, concerning the ownership of various properties, (the “Property Proceedings”) was determined by Mr Andrew Lennon KC (sitting as a Judge of the Chancery Division). He handed down judgment on 18 June 2021 (Pickering v Hughes [2021] EWHC 1672 (Ch)).5.Two further sets of proceedings involve another Hughes’ family company, Caprina Trading Limited (and its subsidiary Caprina Limited). I expand briefly upon those two companies later in this judgment. The other proceedings that are ongoing are a petition presented by Lisa Pickering on 9 November 2021 pursuant to s994 of the Companies Act 2006, alleging unfairly prejudicial acts or omissions by Caprina Trading Limited or unfair prejudice in the conduct of its affairs. Separately, there are Part 7 proceedings issued by Lisa Pickering on the same date seeking to establish a beneficial right to 50% of the ordinary share capital in Caprina Trading Limited. She also holds certain “B” Shares in Caprina Trading Limited.6.The current proceedings are brought pursuant to s994 of the Companies Act 2006 alleging unfair prejudice to the interests of the petitioner as a member of Portbond Limited (“Portbond”), the 4th respondent. The 5th respondent, London Wiper Company Limited (“LWC”) is the wholly owned subsidiary of Portbond (together the “Companies”). It is alleged that the conduct of LWC’s affairs formed part of the conduct of Portbond’s affairs as parent company.7.The petition was presented to the court on 7 June 2019. The petition was amended following each of the Companies having been placed into administration and a pre-pack sale by the administrators having taken place in October 2020. The relevant case of unfair prejudice said to arise in connection with these matters was originally set out in Points of Reply. A court order was made in effect requiring such a positive case to be set out in the Petition. As a result the Petition was amended to raise such a case. 8.In closing, the Petitioner sought further to re-amend the petition. For convenience and unless the context otherwise requires, I refer to the “Petition” as being the one in its amended form, after the amendments following from the raising of the case in relation to the administrations and pre-pack sale but without the re-amendments put before me.9.Section 994 of the Companies Act 2006 (“CA 2006”) enables the court to grant relief where a member of a company is able to establish that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or that an actual or proposed act or omission of the company is or would be so unfairly prejudicial. In this case, I am only concerned about past conduct of the affairs of Portbond or past acts or omissions of Portbond. For convenience, I refer in this judgment to unfair prejudice or matters amounting to unfair prejudice as short-hand for the precise formulation used in s994 CA 2006, namely conduct of the company’s affairs or an act or omission of the company which is unfairly prejudicial to the interests of the members generally or some part of its members.10.As I have said, Portbond and LWC are now in the insolvency process of administration. Their assets and businesses have been sold in a “pre-pack sale”, which I explain in more detail later in this judgment. These events took place after the Petition had been presented and the proceedings were well underway.11.LWC was, in the main, the trading company. It traded in scrap metal under the trading name “Universal Recycling Company” or “URCO”. It was primarily a waste metal processing business, specialising in the recycling of cables, and waste electrical and electronic equipment (WEEE) scrap (the “Business”). The Business operated from a seven-acre site in Mexborough, South Yorkshire. This site was leased. The freehold was (and is) owned by Hughes’ family members, as I shall explain later in this judgment. It is registered at HM Land Registry under title number SYK95230 and I shall refer to it as the “Kilnhurst Site”.12.Although the main trading company, the two Companies’ affairs and management were closely intertwined. When, in the years leading up to the administrations, Grant Thornton reported on the financial situation to the Companies’ bankers (Barclays Bank plc) (the “Bank”), it treated the two Companies as one entity.