No time bar after all: the Supreme Court restores orthodoxy on limitation and unfair prejudice in THG Plc v Zedra Trust Company (Jersey) Ltd

For more than forty years it was an article of faith among company law practitioners that no statutory limitation period applies to a petition for relief from unfairly prejudicial conduct, now found in sections 994 and 996 of the Companies Act 2006. That orthodoxy was abruptly dismantled by the Court of Appeal in February 2024 ([2024] EWCA Civ 158), which held that such petitions were “actions upon a specialty” within section 8 of the Limitation Act 1980 and, where the relief sought was monetary, were subject to the six-year period in section 9. In THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6 the Supreme Court, by a majority of four to one (Lord Burrows dissenting), has reversed that decision and restored the received wisdom: no provision of the 1980 Act imposes a limitation period on a section 994 petition, whatever relief is sought.

The significance of the decision, however, extends well beyond shareholder litigation. In reaching its conclusion the majority recast the proper interpretation of sections 8 and 9 of the 1980 Act, repudiated the “wider” reading of Collin v Duke of Westminster [1985] QB 581 that had underpinned a generation of authority, condemned the “look and see” approach to discretionary statutory remedies, and declared that Re Priory Garage (Walthamstow) Ltd, Rahman v Sterling Credit Ltd and Hill v Spread Trustee Co Ltd “were wrongly decided as regards section 9 of the 1980 Act” (para 155). The decision therefore unsettles the limitation analysis of a swathe of statutory claims – most importantly office-holder claims under the Insolvency Act 1986 – even as it settles the position for unfair prejudice petitions. It also leaves an intriguing two–two split within the majority on whether section 8 applies to non-monetary statutory obligations at all.

The facts and the litigation below

Zedra, a minority shareholder in THG plc, presented an unfair prejudice petition in January 2019. After earlier strike-out skirmishes, it sought in 2022 to amend the petition to complain of its exclusion from a bonus share issue made in July 2016, alleging that the directors had acted in breach of duty and seeking “equitable compensation” of approximately £1.8m–£2m, representing the value it would have realised on the company’s 2020 flotation. The amendment was sought more than six years after the events complained of; if a six-year limitation period applied, section 35 of the 1980 Act would have precluded it.

Fancourt J allowed the amendment, holding, consistently with Bailey v Cherry Hill Skip Hire Ltd [2022] EWCA Civ 531 and his own decision in Re Edwardian Group Ltd, that no statutory limitation period applies to unfair prejudice petitions and that delay falls to be addressed through the court’s remedial discretion. The Court of Appeal disagreed. Lewison LJ, in what the Supreme Court generously described as “an impressive leading judgment” (para 16), concluded that where “(i) the right to go to court is purely statutory and (ii) the only relief sought is the payment of money… the action falls within section 9” (para 22), so that the July 2016 complaint was statute-barred.

The majority’s reasoning

Section 8: what is “an action upon a specialty”?

Lord Hodge and Lord Richards, giving the leading judgment, undertook an extensive excavation of the legal history of the “somewhat archaic” concept of a specialty, tracing the actions of covenant and debt through the 1623 and 1833 Acts to the Limitation Acts 1939 and 1980, and surveying Commonwealth authority. The fruit of that exercise was a decisive narrowing of section 8: “it is of the essence of an action upon a specialty that it is an action to enforce an obligation created by a deed or statute” (para 115). The “wider Collin view” – that section 8 catches any claim which can only be brought under a statutory provision – was rejected as a misreading of Oliver LJ’s judgment: “Oliver LJ was not proposing the mere existence of a statutory cause of action as sufficient to bring section 8 of the 1980 Act into play” (para 114).

That analysis was fatal to the Court of Appeal’s approach, because sections 994–996 “neither contain nor enforce obligations” (para 116). The directors’ duties said to found the unfair prejudice are imposed by the general law or by the company’s constitution, not by the unfair prejudice provisions themselves; those provisions “exist to provide relief in respect of a state of affairs”. The petition is therefore not an action upon a specialty.

Section 9: discretionary remedies are not “sums recoverable by virtue of any enactment”

The majority accepted that English authority had legitimately given section 9 a wider reach than ascertained statutory debts, extending to unliquidated sums and even to discretionary monetary awards under remedially closed provisions such as section 214 of the Insolvency Act 1986 (Re Farmizer). But the critical move was a distinction between statutes which create an entitlement to money and statutes which confer an open-ended remedial discretion. A compensation order under section 996 “is not a sum ‘recoverable by virtue of’ sections 994–996. The respondent’s obligation to pay it arises only by virtue of the court’s exercise of its very wide discretion” (para 146). Since the court may grant relief no party has sought, and decides by reference to the position at judgment, the application of section 9 “would mean that a petition could proceed for any relief that the court considered fit other than a monetary order. Such a result borders on the absurd” (para 146).

The “look and see” approach derived from West Riding and applied in Priory Garage – examining the substance of the relief truly sought to allocate the claim between sections 8 and 9 – was dismissed as “an analysis for which there is no warrant in the legislation” and an “evaluative process… particularly ill-suited to deciding whether an action is time-barred” (para 151). The respondents’ fallback, that the court might wait until trial to see what relief was granted, fared worse still. The governing principle, endorsed from Millett LJ in Paragon Finance, is that “a limitation period should relate to a cause of action and not a particular remedy” (para 157).

The subsidiary arguments

Zedra’s alternative contention that its claim was for “equitable relief” disapplied by section 36 was given short shrift: the relief “is available only because section 996 of the 2006 Act gives the court power to grant such relief” (para 162). Conversely, the court declined to rest anything on the “settled understanding” principle of statutory interpretation, noting that its scope “ha[s] not been authoritatively resolved” (para 165) and that, in any event, no prior English decision had actually confronted the point: “A settled practice, or widespread belief, is not the same as an authoritative decision” (para 166). Policy arguments about stale claims were equally unavailing in both directions: “broadly textured policy considerations have a limited role to play in the interpretation of the 1980 Act” (para 167), and whether a limitation period should be introduced “is a question of policy for Parliament; it is not for the courts to determine” (para 169).

The dissent

Lord Burrows – the former Law Commissioner with responsibility for the limitation project – delivered a vigorous dissent grounded in the policy of repose. Echoing Lord Sumption in Abdulla, he insisted that limitation “is not a technicality, nor is it necessarily unmeritorious”, and that where the 1980 Act is ambiguous “a purposive interpretation tends to favour there being a limitation period rather than the reverse” (para 182). On his analysis, Pratt v Cook and Collin establish that the statute itself is the specialty, so that any cause of action existing only by virtue of statute falls within section 8; he found the majority’s obligation/state-of-affairs distinction “problematic”, observing that “at one level, all causes of action can be analysed in terms of rights and obligations” (para 201). He would have applied the “look and see” approach, applied “without apparent difficulty, for over 65 years” (para 225), to hold the monetary claim barred under section 9. Notably, his judgment contains a sophisticated treatment of laches and delay-plus-prejudice operating within a limitation period – analysis that retains value despite the dissent, since the majority too confirmed the continuing vitality of discretionary control of delay.

Why the case matters

Certainty restored for unfair prejudice practice – with delay still policed

For company litigators the headline is clean: no provision of the 1980 Act bars a section 994 petition, however framed and whatever remedy is sought, including pure monetary compensation. The bifurcated regime created by the Court of Appeal – six years for money claims, arguably twelve for buy-outs and other relief – is gone, and with it the arbitrary consequences identified by Lord Leggatt in Smith v Royal Bank of Scotland.

But practitioners should not read the decision as a charter for stale grievances. The majority expressly addressed Snowden LJ’s concern that the courts’ “long-term policy… to discourage petitioners from dragging up old grievances” might be undermined. Para 170 confirms that the court “may take account of unjustified delay by the claimant which has an adverse effect on a respondent or other persons when exercising its discretion to grant or refuse a particular remedy or any remedy”. Delay is thus a merits and discretion question, not a threshold bar – fact-sensitive, and ordinarily for trial rather than strike-out, although nothing in the judgment disturbs the line of authority permitting summary disposal of historical complaints incapable of justifying relief. Respondents lose the bright-line defence; petitioners gain time but not impunity.

A strategic opening for monetary claims

Perhaps the most consequential passage for litigation strategy is para 168. The majority held it is “not a good policy argument” against the result that a section 994 petition might be used to pursue, free of limitation, a complaint that would be time-barred if framed as another cause of action: an applicant may “take advantage of a different cause of action which has a more generous limitation period or no limitation period”. Where the substance of a shareholder’s complaint is a time-barred claim for compensation — as Zedra’s effectively was — recasting it as unfair prejudice and seeking a money order under section 996 is now legitimised, but only at the limitation stage. The petitioner must still establish unfairly prejudicial conduct, causation and loss, and must persuade the court that a monetary order is the appropriate exercise of its discretion; respondents retain the full armoury of acquiescence, delay-induced prejudice, proportionality and the merits threshold of unfairness itself.

Collateral damage: insolvency claims and the new uncertainty

The decision’s most disruptive effects fall outside company law. The court held that Priory Garage, Rahman and Hill v Spread Trustee “were wrongly decided as regards section 9”, and that reliance on the wider Collin view in those cases was misplaced – yet it pointedly observed that “we have not been invited to overrule those cases nor have we heard argument as to whether they can be justified on another basis” (para 117). The limitation position of claims under sections 238–241 and 423 of the Insolvency Act 1986 – provisions conferring precisely the kind of wide remedial discretion the majority held incompatible with section 9 – is therefore thrown into doubt. The logic of THG v Zedra points towards no statutory limitation period for such claims, with delay controlled (if at all) through discretion and, where equitable relief is sought, laches via section 36(2). Office-holders may welcome the additional latitude; transaction counterparties will note that limitation defences they had assumed were available are now open to serious challenge. It should be stressed, however, that nothing is yet settled: the condemnation of those authorities is strictly obiter, the court was not invited to overrule them, and it expressly left open whether they ‘can be justified on another basis’ (para 117). First-instance courts may well regard themselves as bound by Rahman and Hill v Spread Trustee until an appellate court revisits them. Until the point is authoritatively decided, both sides should plead in the alternative. Farmizer itself appears to survive, on the basis that section 214 admits only a monetary remedy, but its “look and see” obiter is disapproved.

The unresolved fissure over section 8

Within the majority, Lord Hodge and Lord Richards considered that Collin was wrongly decided – that an action upon a specialty, where the specialty is a statute, was always confined to monetary claims – while Lord Lloyd-Jones and Lord Briggs would hold that section 8 applies a twelve-year period to non-monetary obligations created by statute. The court declined to resolve the point, which “has no effect on the outcome of this appeal” (para 118) and would have been “obiter commentary on what were obiter dicta in Collin” (para 129). Practitioners dealing with statutory non-monetary obligations – enfranchisement being the paradigm – are left with a genuinely open question at the apex of the system, albeit one in which Collin remains binding below. Notably, even the sceptical co-authors offered a safety valve: enforcement of such obligations sounds in specific performance or injunction, equitable remedies to which laches applies through section 36 (para 123).

A statute showing its age

Finally, the judgment is a sustained advertisement for legislative reform. The majority observed that the true meaning of sections 8 and 9 “lies deep in our legal history” and that, were Parliament to legislate, “there may be a case for addressing the problems… by using clearer language” (para 171). Lord Burrows went further, declaring that the Law Commission’s 2001 core regime recommendations “cry out to be implemented” (para 238). Both the Law Commission reports of 1997 and 2001 recommended a limitation period for unfair prejudice petitions; a quarter of a century on, the Supreme Court has confirmed that only Parliament can supply one.

Conclusion

THG v Zedra is that comparatively rare appellate event: a restoration of received wisdom achieved not by appeal to settled practice – an argument the court conspicuously declined to endorse – but by rigorous first-principles interpretation reaching back to the forms of action. For unfair prejudice practitioners it re-establishes a stable, unitary regime in which delay is a discretionary, not jurisdictional, consideration. For limitation lawyers it is more revolutionary than restorative: the wider Collin view is dead (though the distinct question whether Collin itself was rightly decided was deliberately left open), the “look and see” approach is condemned, three Court of Appeal authorities are impugned without being overruled, and the application of the 1980 Act to discretionary statutory remedies – above all in insolvency – must now be re-examined. The case settles one question definitively and unsettles several others; the majority’s own prediction that the difficulties of sections 8 and 9 warrant statutory attention may prove the most enduring observation in the judgment.