D made a reduction in capital; repaid the non-participating preference shareholders first. Was provision in articles for class consent to be required wherever class rights where ‘affected’; moreover D claimed that reduction had caused variation in class rights. Held:
· Is no variation of rights
Ø paying off preference shares entitled to priority on a winding-up is giving effect to rights attached to those shares
Ø moreover by having priority upon a return of capital, non-participating preference shareholders must be taken to have agreed to allow their entitlement to be extinguished first
· Moreover rights attaching to shares were not ‘affected’
Ø words ‘affect’ contemplate that there is some right remaining after transaction in question
Ø whereas here, C’s rights were completely extinguished
