Chap. XVIII. the persons against whom the relief is sought control the

majority of the company's shares, and will not permit an
action to be brought in the name of the company. In that
case the Courts allow the shareholders complaining to bring
an action in their own names (1). This, however, is a mere
matter of procedure in order to give a remedy for a wrong
which would otherwise escape redress, and it is obvious that
in such an action the plaintiffs cannot have a larger right to
relief than the company itself would have had if it were
plaintiff, and cannot complain of acts which are valid if
done with the approval of the majority of the shareholders,
or are capable of being confirmed by the majority. The cases
in which the minority can maintain such an action are,
therefore, confined to those in which the acts complained.
of are of a fraudulent character, or beyond the powers of
the company.
A familiar example is where the majority
are endeavouring directly or indirectly to appropriate to
themselves money, property or advantages which belong to
the company (m).

"There may be a variety of things which a company may well be entitled to complain of, but which, as a matter of good sense, they do not think it right to make the subject of litigation; and it is the company, as a company, which has to determine whether it will make anything that is a wrong to the company a subject-matter of litigation, or whether it will take steps itself to prevent the wrong from being done" (n). In such a case, therefore, if individual shareholders bring an action, using the name of the company, they do so at their own risk unless able to show that they have the support of the majority (0); and if the Court grant interlocutory relief, it will take care that a meeting be called at an early date to

(1) Burland v. Earle, (1902) A. C.

p. 93.

(m) Burland v. Earle, (1902) A. C. 83, 93; and see Russell v. Wakefield Waterworks Co., 20 Eq. 474.

(n) Macdougall v. Gardiner, 1 C. D. p. 22, per James, L.J.

(0) Macdougall v. Gardiner, 1 C. D. 13, 22 (C. A.); Pender v. Lushington, 6 C. D. 70; Imperial Hydropathic Hotel Co. v. Hampson, 23 C. D. 1 (C. A.); La Compagnie de Mayville v. Whitley, (1896) 1 Ch. 788 (C. A.).

determine whether the action has in fact the approval of the Chap. XVIII.

majority of the shareholders (p).

Where an action is brought by a shareholder against the directors, who hold a preponderance of shares in the company, the proceeding may be in the form of an action by the plaintiff on behalf of himself and all other shareholders in the company (other than the defendants), the company being joined as codefendants (q). "An action in this form is far preferable to an action in the name of the company, and then a fight as to the right to use its name" (r).

others from

from acting as

A director of a company duly and legally appointed may Injunction on application of sustain an action in his own name against the other directors, one director to on the ground of individual injury to himself, for an injunction restrain the to restrain them from wrongfully excluding him from acting excluding him as director (s). It is immaterial that he may in the opinion director. of his co-directors be unfit to be a director of the company by reason of alleged misconduct. If the other directors think that one of their number is unfit to act, their course is to bring the case before the shareholders and enable them to take such action as they think fit. The other directors have no right to take the matter in their own hands and exclude him from acting as director (t).

In a case in which a director brought an action to restrain his co-directors from excluding him from acting as managing director of the company, the Court of first instance granted the injunction; but on appeal, the Appeal Court suspended the injunction upon the undertaking of the defendants to call a general meeting. The general meeting was called, and the shareholders passed a resolution that they did not desire the plaintiff to act as managing director, and the Court thereupon dissolved the injunction (u).

Chap. XVIII.

A company may not be

registered, or

under a name

calculated to deceive.

Section 20 of the Companies Act, 1862, provides that no company shall be registered under a name identical with that by which a subsisting company is already registered, or so carry on business, nearly resembling the same as to be calculated to deceive, except in a case where such subsisting company is in the course of being dissolved and testifies its consent in such manner as the registrar requires. The section further provides that if any company, through inadvertence or otherwise, is, without such consent as aforesaid, registered by a name identical with that by which a subsisting company is registered, or so nearly resembling the same as to be calculated to deceive, such first-mentioned company may, with the sanction of the registrar, change its name.

The principles upon which injunctions are granted in the case of individuals trading under identical or similar names, apply also in the case of companies (r). There is nothing in the Companies Act, 1862, to affect the right of a company registered under a particular name to an injunction restraining another company, which, notwithstanding the prohibition in sect. 20, has been registered under a similar name, from carrying on business under that name, if it appears that such name is calculated to deceive (y).

It is more usual, however, to apply for an injunction before the new company is registered. On an application to restrain the registration of a new company with a title alleged to be so similar to that of the plaintiffs as to be calculated to deceive, the Court will have regard to the kind of business which has been or is intended to be carried on by the plaintiff company, and to that which is intended to be carried on by the new company, and also to the kind of name which has been adopted. by the plaintiff company (z).

Where a motor-car manufacturing company was registered in a name colourably resembling that of existing motor-car

(x) Merchant Banking Co. of London v. Merchants' Joint Stock Bank, 9 C. D. 560.

(y) Ib.; Manchester Brewery Co. v. North Cheshire and Manchester

Brewery Co., (1898) 1 Ch. 539 (C. A.); (1899) A. C. 88.

(z) Aerators, Ltd. v. Tollitt, (1902). 2 Ch. 319.

manufacturers with the fraudulent intention of obtaining the Chap. XVIII. benefit of their reputation in that business, such company and the signatories to the memorandum (who were the only directors and shareholders) were restrained from using such name in connection with the manufacture or sale of motorcars. An injunction was also granted restraining the signatories from allowing the company to remain registered under the name so adopted, or under any title or description colourably resembling the same (a).

(a) La Société Anonyme, &c. v. Panhard Levassor Motor Co., (1901) 2 Ch. 513.

Chap. XIX.

Expulsion from a club.

CHAPTER XIX.

INJUNCTIONS AGAINST CLUBS, SOCIETIES, ETC.

WHERE parties contribute funds which are laid out on property which all enjoy in common, such as clubs, societies, associations, &c., the members of which have agreed to bind themselves by certain rules, they are bound by their rules, and the Court will not interfere, except in cases of breach of trust or oppression (a). The jurisdiction of the Court in such cases is founded on the common interest of every member in the property of the club, society, &c., and on the common right of every member to require that the rules to which he has subscribed shall be properly carried out (b).

But although in the case of an ordinarily constituted club, in which members have rights of property, a member whose rights have been interfered with by the committee is entitled to ask the Court to consider whether the rules of the club have been observed, whether anything has been done which is contrary to natural justice, and whether the decision complained of has been come to bona fide, it is otherwise in the case of a proprietary club (c).

The Court has jurisdiction to restrain the committee or a general meeting of a club (not being a proprietary club) from expelling a member of the club, but in exercising the jurisdiction the Court does not sit as a Court of Appeal from the decision of the members of the club duly assembled. All that the Court requires is that their proceedings be conducted on the common principles of ordinary justice. The Court will not

(a) See Clough v. Ratcliffe, 1 De G. & Sm. 164; Yeates v. Roberts, 7 D. M. & G. 227; Queen v. D'Eyncourt, 4 B. & S. 832.

(b) See Millican v. Sullivan, 4 Times Rep. 204.

(e) Baird v. Wells, 44 C. D. 661.