Posgate v Hanson

The case of Posgate v Hanson involved a dispute between Mr Posgate and Mr Hanson over the winding up of their companies, Inspection Apps and Workflow Technologies. The applicants sought a winding up order on the just and equitable ground, while the respondents argued that a winding up order should be refused on discretionary grounds. The court had to decide whether the applicants were acting unreasonably in not pursuing an alternative remedy, specifically a share buy-out offer made by the respondents. The court considered the offer to be fair and reasonable, providing for an independent accountant to determine the valuation of the businesses and an independent solicitor to decide the terms of the final contract in case of disagreement. The court concluded that the applicants were acting unreasonably in seeking to have the company wound up instead of pursuing a remedy of the kind exemplified by the respondents’ most recent offer.

The court found that the offer left little to be agreed upon between the parties, as the independent accountant would make the final decision on the valuation, and the independent solicitor would determine the terms of the final contract if necessary. The court also noted that the parties could make submissions to the independent accountant about the valuation process but that the ultimate decision would be made by the accountant. The court found that the differences between the parties in arriving at the remedy of a buyout eventually dwindled to quite cosmetic points of difference. The court concluded that the applicants were acting unreasonably in seeking to have the company wound up instead of pursuing a remedy of the kind exemplified by the respondents’ most recent offer.

The court dismissed the application for winding up, assuming that the respondents confirmed their most recent offer remained open for acceptance by the applicants. The court also noted that it would be necessary to hear the parties as to costs unless costs were agreed upon in the meantime. The court listed the application for the giving of final orders at 10.00 am on 16 March 2018 and required the respondents to inform the applicants in writing whether their most recent offer remained current before that time. The parties were also required to be heard as to costs at the above time and date in the event they had not otherwise agreed as to costs in the meantime.