Appeal court upholds unfair prejudice ruling

Law firm Stephenson Harwood LLP has successfully represented Saxon Woods Investments Limited in the Court of Appeal, securing a landmark judgment on shareholder disputes and director's fiduciary duty under s172.

In two appeals made by the Petitioner, Saxon Woods Investments Limited and the Respondent, Francesco Costa, (Saxon Woods Investments Limited v Francesco Costa [2025] EWCA Civ 708), Lord Justices Edis, Snowden and Zacaroli upheld the first instance finding that Saxon Woods had suffered unfair prejudice at the hands of Mr Costa, dismissing Mr Costa's appeal, and held that the first instance judge had misdirected himself on the application of the law under s172 of the Companies Act such that Mr Costa had in fact acted dishonestly in breach of duty.

The panel allowed Saxon Woods' appeal in its entirety and dismissed Mr Costa's appeal. It is highly unusual for an appeal court to overturn a first instance finding on the question of dishonesty. The team will publish a fuller article on the judgment shortly.

Partner Genevieve Quierin commented, “The judgment provides welcome vindication for our client whose petition was filed more than four years ago, and valuable guidance for directors of companies as to the scope of their duty to act in good faith in the way they consider would be most likely to promote the success of the company for the benefit of its members as a whole. We are absolutely delighted that the Court of Appeal has delivered such a strong and clearly reasoned judgment on the scope of the subjective "good faith" assessment under s172, which has been an area of concern for corporate disputes practitioners for some time."

Partner Genevieve Quierin led the Stephenson Harwood team, supported by Partner Adam Polonsky and Associate Katelyn Iacono.

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