''Butt v Kelson''

952 Year 952 ( CMLII) was a leap year starting on Thursday (link will display the full calendar) of the Julian calendar. Events By place Europe * Summer – At the Reichstag in Augsburg (assembled by King Otto I), joined by German nob ...

Ch 197 is a

UK company law The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary lega ...

and English trusts law case concerning the right of a beneficiary to direct its trustees to exercise votes on company shares that the trust possesses.

Facts

Ms Kelson was one of three directors of a company called

Weston-super-Mare Weston-super-Mare, also known simply as Weston, is a seaside town in North Somerset, England. It lies by the Bristol Channel south-west of Bristol between Worlebury Hill and Bleadon Hill. It includes the suburbs of Mead Vale, Milton, Oldmix ...

Residential Flats Ltd. She and the other directors were also the trustees of the will of a Mr Robert Butt, which possessed 22,100 out of the 22,852 ordinary shares in the company. They had used the shares to appoint themselves as directors. After Mr Robert Henry Butt died, his son Mr Robert Arthur Butt, who was entitled to a large proportion of the residuary estate was dissatisfied at how the company was being run. He wanted to inspect all the documents which came into the directors' possession, and claimed to be able to do so by virtue of his large beneficial interest.

Judgment

Romer LJ held that if Mr Arthur Butt wished to see the company documents, made a proper case for it, and was not met by any objection of other beneficiaries, he should be allowed. This was so, not because directors could be compelled ''qua'' directors, but because it would avoid them being compelled to use their voting power, which they held on trust, to make them do so. The beneficiaries were entitled to be treated as though they were the registered shareholders in respect of trust shares. If necessary, they could compel the trustee directors to use their votes as the beneficiaries. If the beneficiaries themselves were not in agreement then the court could exercise the power. Romer LJ said the following.

Ch 197, 205 Evershed MR and Birkett LJ concurred.

Notes

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References

*'' Tempest v Lord Camoys'' (1882) LR 21 ChD 571, Lord Jessel MR *'' In re Cowin'' (1886) 33 ChD 179 *'' Re Whichelow (George)'' or '' Bradshaw v Orpen''

954 Year 954 ( CMLIV) was a common year starting on Sunday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – A Hungarian army led by Bulcsú crosses the Rhine. He camps at Worms in th ...

1 WLR 5, Upjohn J *E McGaughey, 'Does Corporate Governance Exclude the Ultimate Investor?' (2016
16(1) Journal of Corporate Law Studies 221
*RC Nolan, ‘Indirect Investors: A Greater Say in the Company?’ (2003) 3(1) Journal of Corporate Law Studies 73 United Kingdom company case law English trusts case law Court of Appeal (England and Wales) cases 1952 in case law 1952 in British law

Facts

Judgment

See also

Notes

References