Clemens v Clemens [1976]

Plaintiff
(not a director) held 45% of shares in private company.
Aunt
(was a director) held 55% of shares.
Aunt
forced through resolutions at general meeting to issue further shares to
various other parties.
Result
would be that plaintiff’s share would fall below 25% and plaintiff’s negative
control would disappear.
In
Chancery Division, Foster J set resolutions aside.
Designed
to deprive plaintiff of negative control.
‘Whether
I say that these proposals are oppressive to the plaintiff, or that no-one
could reasonably believe that they are for her benefit, matters not’.
[So
issue before court was similar to Greenhalgh
(although no alteration of articles involved).
Yet
court reached opposite conclusion, despite purporting to apply same principles.
Judge
substituted Evershed’s ‘hypothetical member’ for an actual minority member.
Then
held that the majority had to consider whether resolutions were for her
benefit.]