4.4.5.3.3 Summary

By studying the above cases, we can conclude that the starting point to review unfair prejudicial conduct are the terras in the articles of association and shareholder agreements, which means honouring commercial fairness and contracts. In any case, a company is "an association of persons for an economie purpose, usually formed with legal advice and some formality",1 and "keeping promises and honouring agreements is probably the most important element of commercial fairness".2

Furthermore, one can look beyond the written terras when a quasi partnership is concerned, in which it is not always fair if the one in power enforces his/her legal powers strictly according to the articles or if the court interprets the articles narrowly. Against the background of a close company, the concept of fairness prevents a breach of the agreed terras or using rules in a manner which equity would regard as contrary to good faith.3 Accordingly, fairness also means that the legitimate expectations of minority shareholders should be protected.4 The concept of a legitimate expectation should be objectively reviewed based on the facts of specific cases instead of "leading a life of its own”5 Judges should not go too far by substituting their own subjective judgements for legitimate expectations. As Warher J said in Re J E Cade & Son Ltd, "The court (...) has a very wide discretion, but it does not sit under a palm tree".6

Finally, fairness empowers the court not only to look outside the agreement for legitimate expectations but also to abandon the agreement using the analogy to hardship in contract law.