Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 is a United Kingdom company law case on the rights of minority shareholders.

The House of Lords stated that as a company is a separate legal person, the court would not normally entertain such an application.

A resolution was passed in general meeting by the votes of one brother together with other members having nominal interests that he should be sole director.

The reasons for so doing, given by some of their Lordships of the First Division, are expressed in terms of lost substratum or deadlock - words clearly used in a general rather than a technical sense.

The judgment of Lord M'Laren, which has proved to be the most influential as regards later cases, puts the ground more generally.

This was a case of two equal director shareholders, with an arbitration provision in the articles, between whom a state of deadlock came into existence.

The judgment of the Board delivered by Lord Shaw of Dunfermline clearly endorses, if not enlarges, the width to be given to the just and equitable clause.

One of the directors had given grounds for loss of confidence in his probity and (a matter echoed in the present case) had shown that he regarded the business as his own.

I note in passing the Scottish case of Thomson v. Drysdale 1925 S.C. 311 where a winding up was ordered under the just and equitable clause at the instance of a holder of one share against the only other shareholder who held 1,501 shares, clearly not a case of deadlock, and come to In re Cuthbert Cooper & Sons Ltd [1937] Ch.

The respondents relied on this case which carries the authority of Simonds J. as restricting the force of the just and equitable provision.

Whether on the facts stated a case of justice and equity was made out is no doubt partly a question of fact on which, even though my own view is clear enough, I should respect the opinion of the trial judge; but, this matter apart, I am unable to agree as to the undue emphasis he puts on the contractual rights arising from the articles, over the equitable principles which might be derived from partnership law, for in the result the latter seem to have been entirely excluded in the former's favour.

The respondent argues that this was the first case where exclusion of a working director, valid under the articles, had been treated as a ground for winding up under the just and equitable clause and that as such it was an unjustifiable innovation.

The case itself is a paradigm of obscure forensic tactics and, as such, of merely curious interest; its only importance lies in the statement, contained in the judgment, at p. 523, that since the relevant decisions were carried out within the framework of the articles the petitioner must show that they were not carried out bona fide in the interests of the company.

It was contended that the company was a quasi-partnership and that since section 33 of the Partnership Act 1890 provides for dissolution on the bankruptcy of one of the partners a winding up order on this ground should be made.

Lord Fraser, in the Outer House, while accepting the principle that exclusion from management might be a ground for ordering a winding up, did not find the facts sufficient to support the use of the just and equitable clause.

592; In re Leadenhall General Hardware Stores Ltd (unreported), February 4, 1971), amounts to a considerable body of authority in favour of the use of the just and equitable provision in a wide variety of situations, including those of expulsion from office.

Though these were not cited at the Bar I refer to some of them since they usefully illustrate the principle which has been held to underlie this jurisdiction and show it applicable to exclusion cases.

The question is whether he has used those powers in such a way as to make it just and equitable that Robertson should be allowed by the court to retire from the partnership.

The judgment of Smith J. contains the following passage, at p. 467: 'It is also true, I think, that, generally speaking, a petition for winding up, based upon the partnership analogy, cannot succeed if what is complained of is merely a valid exercise of powers conferred in terms by the articles: ... To hold otherwise would enable a member to be relieved from the consequences of a bargain knowingly entered into by him: ...

The foundation of it all lies in the words 'just and equitable' and, if there is any respect in which some of the cases may be open to criticism, it is that the courts may sometimes have been too timorous in giving them full force.

The 'just and equitable' provision does not, as the respondents suggest, entitle one party to disregard the obligation he assumes by entering a company, nor the court to dispense him from it.

The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements: (i) an association formed or continued on the basis of a personal relationship, involving mutual confidence - this element will often be found where a pre-existing partnership has been converted into a limited company; (ii) an agreement, or understanding, that all, or some (for there may be 'sleeping' members), of the shareholders shall participate in the conduct of the business; (iii) restriction upon the transfer of the members' interest in the company - so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.Soon after the remedy for unfair prejudice was introduced, which allows a court to simply order a minority shareholder to be bought out, rather than a company being wound up.