Ebrahimi v Westbourne Galleries Ltd. (1973)

Company Law · The Liquidator and Preferential Payments

Facts.

Ebrahimi and Nazar ran a business first as partners, then through a company in which they were the only shareholder-directors. Later Nazar and his son used their majority to remove Ebrahimi from the Board, cutting him out of management and profits.

Issue.

Could the company be wound up on the “just and equitable” ground where a quasi-partnership had broken down?

Held.

Yes. The company was in substance a partnership clothed in corporate form; the removal destroyed the mutual trust on which it was founded, and it was just and equitable to wind it up.

Why it matters.

The leading case on just-and-equitable winding up and on the “quasi-partnership” — the shareholder-director locked out of a small company has a real remedy.

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