This was a case involving the potential removal of a Director from a limited company under what is now section 168 of the Companies Act 2006.
The basic facts are that the Articles of Association of the company provided that, "in the event of a resolution begin proposed at any general meeting of the company for the removal from office of any director, any shares held by that director shall on a poll in respect of such resolution carry the right to three votes per share".
All but one of the Directors wanted to remove the other one. The one who the others wanted to remove had a third of the shares. As a result he could not be removed.
Section 168 of the Companies Act 2006 (as it is now) only requires an ordinary resolution and as the legislative clause said nothing about this, it was ultimately deemed that this clause in the Articles was lawful. A clause like this does not, of itself, prevent a resolution being an ordinary resolution. Whilst this decision has been criticised, such a clause could be useful in the situation of a quasi-partnership company.
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