Chimbganda v Kundodyiwa- An Unfair Prejudice Petition and Derivative Action Run Together

Chimbganda v Kundodyiwa and another company (2025) EWHC 1543 (Ch)

Gerard Chimbganda and Judith Kundodyiwa are co-directors and equal shareholders in Goodpeople Healthcare Limited, a company providing domiciliary care primarily to local authorities. The company’s workforce is built substantially around migrant care workers, brought to the UK under a Certificate of Sponsorship licence held by the company. That licence, is the mechanism by which workers are authorised to live and work in the UK, providing care to vulnerable individuals in the community. 

The two had agreed that from the start, Chimbganda would take a back seat while Kundodyiwa handled the day-to-day running of the business. In 2022, the company acquired Care Direct (Salford) Limited, an existing domiciliary care business, expanding its operations further.  

The two also had a separate business in Ireland, Minana International Limited, in which they each held a 50% interest through their respective holding companies. 

For more information, read the full case on Chimbganda v Kundodyiwa and another company (2025) EWHC 1543 (Ch)

One Cause of Action and Two Claims

By late 2024, Chimbganda had concluded that something had gone seriously wrong with the finances of Goodpeople Healthcare. In December 2024 he filed both a shareholder petition under section 994 of the Companies Act 2006, and a derivative claim on behalf of the company itself. The allegations he brought fell into four main categories. 

  • He alleged a failure to account for over £501,000 of the company’s money. Of more than £1,000,000 paid into the company’s accounts, he said, Kundodyiwa had been unable to provide adequate explanation for roughly half of it.  
  • He alleged that expenditure had been incurred for the benefit of Kundodyiwa, her family, and others connected to her, including seven payments totalling over £25,000 to a company called Kundox Medical Limited, owned by Kundodyiwa and her husband. 
  • He raised serious concerns about the Certificate of Sponsorship licence. He alleged that approximately £108,000 spent in connection with the licence could not be adequately accounted for, and that the explanations provided had been inconsistent, with Kundodyiwa unable to reconcile each sponsorship certificate with each employment contract. 
  • There were allegations relating to a specific individual, Mr Busari, involving a combination of diverted business opportunities and non-payment of tax. 

 

Kundodyiwa denied each of these allegations. Her position was that she had done her best on the records available to her, that she had engaged independent forensic accountants to assist, and that where information was missing, it was because documents were not accessible to her through no fault of her own.

Unfair Prejudice Petition and Derivative Action

An Unfair Prejudice Petition and Derivative Claim Running in Parallel

Kundodyiwa argued that running both an unfair prejudice petition and a derivative claim simultaneously was either an abuse of process or at the least, pointless. Since the same facts underpinned both claims, she argued, there was no need for a separate derivative action, any relief needed could be obtained through the shareholder petition.  

The judge disagreed. Drawing on a line of cases including the Court of Appeal’s decision in Ntzegkoutanis v Kimionis, he confirmed that it did not automatically follow from the availability of one route that the other is abusive. The two claims might not stand or fall together.  

A shareholder petition could fail, while a derivative claim on the same facts could still succeed. Running both was a legitimate precaution against that risk.

Permission Granted with Conditions and a Case Management Plan

The judge granted permission for the derivative claim to continue. He was satisfied there was at least a prima facie case because if the defendants offered no answer at all, Chimbganda’s evidence would be sufficient to obtain judgment. Given that, it was not possible to infer that he was acting in bad faith or without honest belief in the claim. 

Kundodyiwa had argued that the original motivation for the derivative claim was to secure a costs indemnity from the company. The withdrawal of that indemnity application shortly before the hearing was, she said, an admission of weakness, and without it the derivative claim had no remaining purpose. 

The judge rejected this. The withdrawal of the indemnity claim was itself a condition of permission being granted as Chimbganda confirmed he would bear his own costs of the derivative action and would also meet any costs ordered against the company if that were ever to arise. That concession, the judge found, actually strengthened the case for permission rather than undermining it. The claim could now proceed without the concern that the company’s assets were being depleted to fund a shareholder dispute. 

The judge was also clear that the two claims would need to be carefully managed together. He directed the parties to cooperate on draft directions to ensure both claims moved toward a single trial in the most efficient and economical way possible and noted that a case and costs management conference was already scheduled for later that month. 

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