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.
Ordinary Resolution
Is not permitted to act upon ordinary resolutions which are inconsistent with substantive requirements in articles.
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.
i.e. by not dealing with property where he had used his veto.
Thus injunction granted against company acting upon the resolutions passed.
Ask questions 🙋 Get answers 📔 It's simple 👁️👄👁️
Our AI is educated by the highest scoring students across all subjects and schools. Join hundreds of your peers today.
Get StartedThese product samples contain the same concepts we cover in this case.
Company law | Corporate Governance Notes (18 pages) |