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:
· 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.
· 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.