Company’s
two MDs held bulk of company’s shares.
two MDs held bulk of company’s shares.
Company’s
articles provided consent of two MDs required in relation to certain
transactions.
articles provided consent of two MDs required in relation to certain
transactions.
MD
sued as member for injunction restraining company from completing transactions
entered into in breach of these articles.
sued as member for injunction restraining company from completing transactions
entered into in breach of these articles.
House
of Lords allowed the action.
of Lords allowed the action.
[So
member had personal right to require company to act in accordance with articles,
even though this indirectly enforced an outsider right (ie right afforded to MD
as director).
member had personal right to require company to act in accordance with articles,
even though this indirectly enforced an outsider right (ie right afforded to MD
as director).
Thus
supposed principle that there is statutory contract between company and its
members only in respect of matters affecting members qua members was
outflanked.
supposed principle that there is statutory contract between company and its
members only in respect of matters affecting members qua members was
outflanked.
This
case did not lead courts to abandon orthodox view, but caused heated
academic debate.]
case did not lead courts to abandon orthodox view, but caused heated
academic debate.]
