Facts
Four executives of a brick works in Dungannon, County Tyrone were shareholders, with 20 shares each, in a company called Tyrone Brick Limited (T.B.L) alongside Northern Bank Development Corporation, which held 120 shares. [1] Eight hundred other shares were not allotted. [2]
All executives, Northern Bank, and the company T.B.L itself, were parties to a shareholders' agreement with a clause that stated, "No further share capital shall be created or issued in the company or the rights attaching to the shares already in issue in any way altered (save as herein set out) or any share transfer of the existing shares permitted, save in the following manner, without the written consent of each of the parties hereto." [2]
In March 1988 the board of T.B.L issued a notice to shareholders of an extraordinary general meeting to consider a resolution allowing for a 3,999,000 new shares to be issued by the company. One of the executives, Samuel Russell, sought an injunction restraining the other executives and Northern Bank from considering or voting on the resolution and damages for breach of contract. [3]
At trial the judge held that the shareholder's agreement was invalidated because it sought to fetter T.B.L's statutory power to increase its capital. The Court of Appeal, by a majority, upheld this decision. Russell appealed, although now claiming only a declaration as to his rights and not also an injunction. [4]
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s 994 Petition by company member
(1) A member of a company may apply to the court by petition for an order under this Part on the ground—
(2) The provisions of this Part apply to a person who is not a member of a company but to whom shares in the company have been transferred or transmitted by operation of law, as they apply to a member of a company.
(3) In this section, and so far as applicable for the purposes of this section in the other provisions of this Part, "company" means—
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