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Quin & Axtens Ltd v Salmon

[1909] AC 442

Case summary last updated at 20/01/2020 19:39 by the Oxbridge Notes in-house law team.

Judgement for the case Quin & Axtens Ltd v Salmon

Company had two managing directors. Director A(Salmon) was given a veto by articles over any decision of company to deal with property. Director B acted contrary to requirement, and got ordinary resolutions from shareholders authorising company to act in this way. Salmon sued company to stop it acting contrary to his veto. Held:
Ordinary Resolution
·       Is not permitted to act upon ordinary resolutions which are inconsistent with substantive requirements in articles.
Ø  i.e. in matters of substance, constitution can only be deviated from by special resolution.
·       Thus existence of ordinary resolution is irrelevant to whether company is breaching its articles. 
Qua Member
·        Director A was also a member of the company.
·        Therefore had power in his capacity as member to force company to adhere to its constitution.
Ø  i.e. by not dealing with property where he had used his veto.
·        Thus injunction granted against company acting upon the resolutions passed.

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