THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6

Zedra, a minority shareholder in THG plc, sought to add an unfair prejudice complaint about a 2016 bonus share issue more than six years later. By a 4–1 majority, the Supreme Court held that sections 8 and 9 of the Limitation Act 1980 do not apply to section 994 petitions, so no statutory limitation period applies.

Background

Zedra Trust Company (Jersey) Ltd (Zedra) was a minority shareholder in THG plc (the Company). It acquired its shares in 2011, when the Company was a private company trading as The Hut Group Ltd. On 7 January 2019 Zedra presented a petition under section 994 of the Companies Act 2006 (CA 2006) against the Company and nine current or former directors, alleging unfairly prejudicial conduct. Following strike-out proceedings, only two allegations survived in the Court of Appeal: the removal of co-sale rights, and breach of Zedra’s contractual entitlement to information.

On remittal, Zedra applied to amend the petition to add the ‘July 2016 Complaint’. This alleged that on 11 July 2016 the directors allotted bonus shares, paid up by capitalising £16,802 from a distributable reserve, to four shareholders and excluded Zedra. Zedra said this was in breach of the directors’ duties to act lawfully, in good faith, for proper purposes and fairly as between shareholders. It alleged that it would otherwise have received its pro rata share of the 16,802 D ordinary shares. It would then have sold those shares at £5 per share at the September 2020 IPO. Zedra sought an order that the relevant directors pay equitable compensation, apparently in the range of £1.835 million to £1.979 million.

The respondents accepted that the amendment met the merits test. They opposed it solely on the ground of an arguable limitation defence. Fancourt J allowed the amendment, following Cherry Hill Skip Hire, on the basis that no limitation period applies to section 994 petitions and that delay is a matter for the court’s discretion at trial. The Court of Appeal (Lewison LJ, with whom Arnold LJ agreed; Snowden LJ concurring) reversed that decision. It held that:

• a section 994 petition is an ‘action upon a specialty’ under section 8 of the Limitation Act 1980, attracting a 12-year limitation period; and
• where the only relief sought is money, the six-year period in section 9 applies instead.

On that basis, the July 2016 Complaint was time-barred.

The issues

The Supreme Court identified three principal issues:

• whether a section 994 claim is an ‘action upon a specialty’ within section 8(1) of the 1980 Act;
• whether a section 994 claim seeking only monetary relief is an ‘action to recover any sum recoverable by virtue of any enactment’ within section 9(1); and
• whether the monetary relief claimed is ‘equitable relief’ within section 36(1), so that sections 8 and 9 are disapplied in any event.

The parties’ arguments

Zedra’s case had several strands:

• Sections 994–996 respond to a state of affairs in a company’s management. They confer only a right to petition for a discretionary remedy that is not based on a legal obligation owed to the petitioner, so neither section 8 nor section 9 applies.
• Parliament intended no statutory limitation period to apply.
• Applying the 1980 Act would cause practical difficulties, including identifying the accrual date where there is a series of related acts.
• A settled understanding had developed that no limitation period applies, and this was a legitimate aid to interpretation.
• In the alternative, section 36(1) disapplied section 9 because equitable compensation was sought.

The respondents supported the Court of Appeal. Where relief under a broad discretionary statute might be monetary or non-monetary, they argued that the court should adopt a ‘look and see’ approach, as in Re Priory Garage (Walthamstow) Ltd. If necessary, the court should wait and see what relief it was minded to grant at trial.

The Court’s reasoning (Lord Hodge and Lord Richards, with whom Lord Lloyd-Jones and Lord Briggs agreed)

Approach to interpretation

The majority treated the dispute as a question of interpreting sections 8 and 9 of the 1980 Act. Applying orthodox principles, they examined the words in context, including the pre-existing law, the legislative history and the law reform reports. They traced the concept of an ‘action upon a specialty’ through:

• the common law actions of covenant and debt;
• the Limitation Act 1623;
• section 3 of the Civil Procedure Act 1833;
• the Law Revision Committee’s 1936 Report;
• the Limitation Act 1939; and
• the Law Reform Committee’s 1977 Report.

The majority emphasised that an action of covenant lay only between parties to a deed. As regards statutes, section 3 of the 1833 Act therefore applied only to actions of debt. The pre-1939 authorities were all claims for debts: Cork and Bandon Railway Co v Goode, Aylott v West Ham Corporation, Gutsell v Reeve and Pratt v Cook, Son & Co (St Paul’s) Ltd. The 1936 Report showed that the Committee regarded claims for sums recoverable by virtue of a statute as the only statutory claims within the specialty concept.

Section 8: action upon a specialty

The Court of Appeal had relied on what the majority called the ‘wider Collin view’. On that view, drawn from Oliver LJ’s judgment in Collin v Duke of Westminster, section 8 applies to any claim that can only be brought under a statutory provision. The majority held that this misread Collin. Oliver LJ had stressed that the claim was to enforce the obligation imposed by the Leasehold Reform Act 1967 on the lessor to enfranchise the lease. The majority stated:

In our judgment, 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.

They found no basis for suggesting that the 1939 Act was designed to extend the concept ‘to embrace all proceedings for which a statute may make provision’. Applying that test to the unfair prejudice provisions, they concluded:

In short, sections 994–996 exist to provide relief in respect of a state of affairs. They neither contain nor enforce obligations.

Directors’ fiduciary duties, and obligations under the articles or shareholders’ agreements, are not created by sections 994–996. Relief is also commonly sought where there has been no breach of any enforceable obligation. The majority found support for this in section 995, which allows the Secretary of State to petition. The Court of Appeal was therefore wrong to hold that section 8 applied. To the extent that Priory Garage, Rahman v Sterling Credit Ltd and perhaps Hill v Spread Trustee relied on the wider Collin view, they were also wrong, although the Court was not invited to overrule them.

A division within the majority on Collin

The majority were divided on one further point, which they did not need to decide:

• Lord Hodge and Lord Richards considered that Collin was wrong to apply section 8 at all. In their view, its conclusion rested on the false premise that the accepted meaning of ‘specialty’ included all causes of action based on statute, when that meaning was confined to actions to recover ascertained sums as debts. Statutory non-monetary obligations would in any event be enforced by equitable remedies, to which laches applies under section 36(2).
• Lord Lloyd-Jones and Lord Briggs considered that the 1939 Act created, and the 1980 Act preserved, a 12-year limitation period for non-monetary obligations created by statute. They relied on the treatment of the statute as the specialty in Pratt v Cook.

All four agreed that it was not appropriate to reach a concluded view, because the point had not been argued and would be ‘obiter commentary on what were obiter dicta in Collin‘.

Section 9: sum recoverable by virtue of an enactment

The majority accepted that English authority had given section 9 a broad meaning. It extends to unliquidated sums (Pegler v Railway Executive; Hillingdon LBC v ARC Ltd) and to monetary claims subject to judicial discretion (Re Farmizer (Products) Ltd). They also accepted that this broad reading was justified. A section 994 claim, however, is not a claim to enforce a liquidated or unliquidated statutory obligation. It is a claim that the court should make such order as it thinks fit. A petitioner has no entitlement to any particular relief. The court:

• decides the appropriate order by reference to the state of affairs at the date of judgment;
• may grant relief that no party has sought; and
• takes account of non-parties, proportionality and the petitioner’s own conduct.

The majority reasoned:

The court’s order may provide for the payment of a specified sum, by way of compensation or otherwise, but that 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.

Applying section 9 would mean that a petition could proceed for any relief other than a monetary order, a result which, in the majority’s words, ‘borders on the absurd’.

The majority distinguished West Riding County Council v Huddersfield Corporation and Central Electricity Board v Halifax Corporation as cases in which the statute itself created the obligation to pay. They also distinguished Farmizer, because section 214 of the Insolvency Act 1986 permits only a monetary contribution, and they disapproved Peter Gibson LJ’s obiter fallback reasoning in that case. They rejected the ‘look and see’ approach adopted in Priory Garage:

In our view, this evaluative process is particularly ill-suited to deciding whether an action is time-barred.

They were ‘even more reluctant’ to accept that the court should wait until the end of trial before deciding whether a claim was time-barred. Drawing on Lord Leggatt’s analysis in Smith v Royal Bank of Scotland plc of the ‘palpable defects’ of remedy-dependent limitation periods, and on Bell J’s reasoning in Alligators Fast Food Ltd v Chen, the majority held:

We consider that claims under statutory provisions which confer a wide discretion as to remedy are not claims to which section 9 applies.

As a result, Priory Garage, Hill v Spread Trustee and Rahman were held to have been wrongly decided as regards section 9. The majority described this conclusion as consistent with Millett LJ’s principle in Paragon Finance that limitation should relate to the cause of action rather than to a particular remedy. They concluded:

Overall, therefore, in disagreement with the Court of Appeal, we conclude that neither section 8 nor section 9 of the 1980 Act creates a limitation period which is applicable to applications under sections 994 and 996 of the CA 2006.

Section 36, settled understanding and policy

The majority rejected Zedra’s section 36 argument, adopting Lewison LJ’s reasoning:

Zedra is not claiming equitable relief. It is claiming relief from unfairly prejudicial conduct in the management of the Company and that relief is available only because section 996 of the 2006 Act gives the court power to grant such relief.

The ‘settled understanding’ principle did not apply, for two reasons. First, no reported English decision had addressed both the interpretation of sections 8 or 9 and their application to the unfair prejudice provisions; a widespread belief is not an authoritative decision. Secondly, cases such as Rahman had applied limitation periods to analogous discretionary statutory regimes.

On policy, broadly textured considerations against stale claims were said to have a limited role in construing the 1980 Act. The fact that another claim with a limitation period was available did not justify imposing one on section 994. The majority also noted that the Law Commission had recommended a three-year period for such petitions, and observed:

Whether there should be such a limitation period is a question of policy for Parliament; it is not for the courts to determine.

The majority confirmed that delay remains relevant to the court’s discretion:

Whether or not there is a statutory limitation period, the court in addressing an application under section 994 of the CA 2006 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.

The majority also suggested that Parliament might use clearer language to define the scope of sections 8 and 9 in any future reform.

Dissent (Lord Burrows)

Lord Burrows would have dismissed the appeal. He emphasised the benefits of limitation periods and endorsed Lord Sumption’s observations in Abdulla v Birmingham City Council. He reasoned that:

if the wording of the LA is unclear but, on one interpretation, may impose a limitation period, a purposive interpretation tends to favour there being a limitation period rather than the reverse.

On section 8, he read Pratt v Cook and Collin as treating the statute itself as the specialty. The test was therefore whether the cause of action exists apart from the statute. He rejected the distinction between obligations created by statute and other statutory causes of action, and the characterisation of section 994 as concerned with a ‘state of affairs’. In his view, a section 994 petition was an action upon a specialty, subject to a default 12-year period.

On section 9, he considered that a petition seeking compensation is, on its face, an action to recover a sum recoverable by statute. Section 9 is explicitly remedy-based, and remedy-dependent limitation already exists elsewhere in the law, for example in relation to specific performance and laches. He supported the ‘look and see’ approach applied since West Riding and endorsed Lewison LJ’s answer to the objections of arbitrariness and unworkability.

Lord Burrows also addressed delay within a limitation period. He reasoned by analogy with Moore-Bick LJ in The UB Tiger that delay plus prejudice, or acquiescence, could still bar relief within the period. In his view, this went a long way towards meeting the concerns expressed by Lewison LJ and Snowden LJ. He would have held the July 2016 Complaint time-barred under the six-year period in section 9.

Practical significance

• The decision restores the long-standing understanding that unfair prejudice petitions are not subject to a statutory limitation period under the 1980 Act, whatever relief is sought, including monetary compensation.
• Delay is controlled through the court’s discretion under section 996. The court may refuse a particular remedy, or any remedy, where unjustified delay has adversely affected respondents or others.
• The decision significantly narrows the concept of an ‘action upon a specialty’. The mere existence of a statutory right to bring proceedings is not enough; there must be an obligation created by deed or statute.
• Claims under statutes conferring a wide discretion as to remedy fall outside section 9.
• The reasoning casts serious doubt on limitation analysis in other discretionary statutory regimes. In particular, transaction avoidance claims under sections 238–241 and 423 of the Insolvency Act 1986, and extortionate credit bargain claims, are affected by the disapproval of Priory Garage, Hill v Spread Trustee and Rahman on section 9, and of the wider Collin view on section 8.
• The status of Collin itself is left unresolved, given the even split within the majority.
• The Court signalled that any limitation period for section 994 petitions is a matter for Parliament, and that clearer statutory language for sections 8 and 9 may be desirable.

Verdict: Appeal allowed by a 4–1 majority (Lord Hodge and Lord Richards, with whom Lord Lloyd-Jones and Lord Briggs agreed; Lord Burrows dissenting). The Supreme Court held that an application under section 994 of the Companies Act 2006 is not subject to the limitation provisions in sections 8 or 9 of the Limitation Act 1980, even where monetary relief is sought. Section 36 was not engaged because Zedra was not claiming equitable relief, but that argument was unnecessary given the primary conclusion. The Court of Appeal’s decision that the July 2016 Complaint was time-barred was reversed. Lord Burrows would have dismissed the appeal on the basis that the six-year limitation period in section 9 applied.

Source: THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6