Citation(s) [1950] 2 All ER 1064 | ||
Ruling court Court of Appeal of England and Wales Similar Foss v Harbottle, Cook v Deeks, Re Yenidje Tobacco Co Ltd, Greenhalgh v Arderne Cinemas, Ebrahimi v Westbourne Galleries | ||
[Case Law Company] ['requiring a special resolution'] Edwards v Halliwell [1950] 2 All ER 1064 (CA)
Edwards v Halliwell [1950] 2 All ER 1064 is a UK labour law and UK company law case about the internal organisation of a trade union, or a company, and litigation by members to make an executive follow the organisation's internal rules.
Contents
- Case Law Company requiring a special resolution Edwards v Halliwell 1950 2 All ER 1064 CA
- Facts
- Judgment
- References
Facts
Some members of the National Union of Vehicle Builders sued the executive committee for increasing fees. Rule 19 of the union constitution required a ballot and a two third approval level by members. Instead a delegate meeting had purported to allow the increase without a ballot.
Judgment
Jenkins LJ granted the members' application. He held that under the rule in Foss v Harbottle the union itself is prima facie the proper plaintiff and if a simple majority can make an action binding, then no case can be brought. But there are exceptions to the rule. First, if the action is ultra vires a member may sue. Second, if the wrongdoers are in control of the union's right to sue there is a "fraud on the minority", and an individual member may take up a case. Third, as pointed out by Romer J in Cotter v National Union of Seamen a company should not be able to bypass a special procedure or majority in its own articles. This was relevant here. And fourth, as here, if there is an invasion of a personal right. Here it was a personal right that the members paid a set amount in fees and retain membership as they stood before the purported alterations.
Jenkins LJ gave the following reasons.