Unfair prejudice: informal consent, information rights and evidence 

McIlroy v Minaar [2026] EWHC 2281 (Ch) 

The High Court’s recent decision in McIlroy v Minaar [2026] EWHC 2281 (Ch) is a useful reminder that unfair prejudice petitions presented under s994 of the Companies Act 2006 are ultimately determined by evidence, authority and established legal principle rather than competing perceptions of fairness. The case is noteworthy for its treatment of contemporaneous documents, informal shareholder consent, and the limits of directors’ information rights. 

The petitioner, Karen McIlroy, held 50% of the shares in Liberas Solutions Limited as nominee for her husband, with the remaining 50% held by Deon Minaar. She alleged unfairly prejudicial conduct including exclusion from financial information, unauthorised payments, diversion of corporate opportunities and improper expenditure. The petition was dismissed in its entirety. 

Evidence matters 

A central theme of the judgment is the Court’s reliance on contemporaneous documents. Applying the approach in Gestmin SGPS SA v Credit Suisse (UK) Ltd and Kinled Investments Ltd v Zopa Group Ltd, the Court tested witness recollections against emails, text messages, and WhatsApp communications. Those documents proved decisive in establishing the parties’ actual arrangements and understanding. 

Information rights are not management rights 

An important feature of the case was the Court’s distinction between a director’s right to obtain information and an asserted right to exercise management powers. The petitioner complained that she had been denied access to the company’s financial affairs. The Court found, however, that she had access to financial information and was already a bank signatory. More importantly, the judgment emphasises that a director’s right to inspect company records does not, without more, confer a unilateral right to control company banking arrangements or direct the company’s affairs. The Court drew a clear distinction between information rights and management authority. 

Informal shareholder consent remains important 

The challenge to payments made to Mr Minaar and associated entities also failed. The Court found that the parties had operated an agreed arrangement under which each principal retained revenues and margins generated through his own consultancy relationships. Referring to Re Duomatic Ltd [1969] 2 Ch 365, the Court treated those arrangements as capable of constituting effective shareholder authorisation.    

The decision is a useful reminder that, in closely held companies, informal shareholder assent may have significant legal effect notwithstanding the absence of formal corporate procedures. In other words, an arrangement that everyone agreed to at the time is difficult to challenge later as unauthorised or unfairly prejudicial.  

Practical lessons 

The judgment does not alter the law on unfair prejudice. However, it reinforces three familiar but important principles: 

• contemporaneous documents remain critical in section 994 litigation; 

• informal shareholder consent may provide a complete answer to allegations of unfairly prejudicial conduct; and 

• a director’s right to information should not be confused with a right unilaterally to exercise management powers. 

For directors, the case is a reminder that access to company information and participation in management are separate issues. A director will often be entitled to inspect company records where necessary to discharge their duties, but that entitlement does not confer a unilateral right to operate bank accounts, approve payments, or override board decisions. 

For shareholders, the decision underscores the importance of documenting concerns contemporaneously and ensuring that any agreed departures from formal governance procedures are properly recorded. Arrangements which have been knowingly accepted and implemented over an extended period may later be treated as authorised, making it more difficult to characterise them as unfairly prejudicial.