Held: being a company’s solicitor does not in fact meant that he was a The action was concerned with the relationship between the plaintiff as a member and the directors in their capacity as members. was claiming the court to recognize that his dismissal was a breach of As Potato Ltd wishes to appoint Gary as accountant in place of Gan, it has to alter its article. According to the article of the company, directors will buy shares from whomever member who intends to sell his share under the acknowledgement of the directors. Your email address will not be published. In Eley v. Positive Government Security Life Assurance C. Ltd., (1876) Ex. The alteration focuses on bona fide, for the benefit of the company as a whole. Additionally, if the directors refuse to buy the shares he intends to sell, he could not do anything but just being locked and immoveable in the company. It was held that the articles of the company did not create any contract between the company and Eley in his capacity as solicitor. These cookies do not store any personal information. Copyright 2019 - SimpleStudying is a trading name of SimpleStudying Ltd, a company registered in England and Wales. It is this contact that is the subject of much controversy and confusion which has spanned over a period of decades. Eley v Positive Government Security Life Assurance Co Ltd (1876) 1 Ex D 88 The articles of the company concerned had a provision which said that Mr Eley was company’s solicitor for life. shareholder. However, after some period, the directors decided to remove him and replace his position with another person. shareholder, because if he was not a shareholder then he would not be able to Yet, the alteration is not bona fide, according to the limitations on power to alter article, all alterations must be benefit for the company as whole, or else invalid. As Chan has the right to nominate two directors onto the company’s board of director, the company wants to constraint the power of Chan. Some times after the company’s incorporation, Eley was employed as solicitor and he became a member of the company. Thus Eley went to the court and sued the company for breach of contract. It does bind Gan as an employee of the company. Mr Eley sought breached the contract where it said that he would be solicitor for life. By clicking “Accept”, you consent to the use of ALL the cookies. The minority shareholders then decided to take action against the directors by suing them on court. The articles of the company concerned had a provision which said that Mr May 28, 2019. Attorney-General of Belize v Belize Telecom Ltd [2009] UKPC 10; [2009] 2 All ER 1127, Re New British Iron Co, ex parte Beckwith [1898] 1 Ch 324. It is mandatory to procure user consent prior to running these cookies on your website. Save my name, email, and website in this browser for the next time I comment. Equally, being This question of enforcement and the long standing controversy wil… When the directors refused to buy the shares, they are in contradicting to the company’s interests. He When Band wishes to sell his shares and the directors refused to buy the shares, he may seek an alteration of the company’s articles to make sure the article does not bind him from selling his shares to outsiders. Eley was company’s solicitor for life. This website uses cookies to improve your experience while you navigate through the website. It was not necessary for the company to be party to the action. Necessary cookies are absolutely essential for the website to function properly. usually have such as voting and getting a dividend. D. 881case, the plaintiff was a member of the company and was also employed as the company’s solicitor. Thus, the articles did not create any contract between the company and Gan in his capacity as accountant. Cyprus, Copyright © 2020 UniAssignment.com | Powered by Brandconn Digital. The related case is: Eley v Positive Government Life assurance Co Ltd (1876). He had been company’s solicitor for some time and then company decided to dismiss him from his position. Therefore, the company wants to overight the power of Chan. He argued that the company time and then company decided to dismiss him from his position. sue because the contract was with the insiders and not with the outsiders. The article of the company provided that Eley was to be appointed as the solicitor of the company and that he should not be from his position unless for misconduct. Your email address will not be published. In the shareholder’s right in company law, the law shall protect the minority shareholders against from being forced to sell some or all their shares inequitably. Nicosia 1065 Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website.