''Rayfield v Hands''
960Ch 1 is a
UK company law case, concerning the enforceability of obligations against a company.
Facts
Mr Rayfield sued the directors of Field Davis Ltd to buy his shares. Article 11 of the company’s constitution said ‘Every member who intends to transfer shares shall inform the directors who will take the said shares equally between them at a fair value.’ The directors were refusing to follow this rule, and Mr Rayfield sought an injunction.
Judgment
Vaisey J granted the injunction and held the article imposed an obligation on the directors, not as officers, but also in their capacity as members. He referred to ''
Re Leicester Club and County Racecourse Co'' where Pearson J referred to directors as ‘working members of the company’ and that ‘they are doing their work in the capacity of members, and working members of the company’. He referred to the privity decisions of Denning LJ in ''
Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board
''Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board'' 9492 KB 500 is an English land law and English contract law appeal decision. The case, decided by Denning LJ, confirmed positive covenants can supplant privity of contract in c ...
'' and ''
Drive Yourself Hire Co (London) Ltd v Strutt''
[ 9541 QB 250] and also ''
Carlill v Carbolic'' and ''
The Satanita'' to say that the company did not need to be joined to the action to bring it, even though a members create a contractual relation with the company.
Authority
The case was approved by
Scott J in ''
Cumbrian Newspapers Group Ltd v Cumberland & Westmorland Herald Newspaper & Printing Co Ltd''
986BCLC 286.
See also
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UK company law
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Capacity in English law
Capacity in English law refers to the ability of a contracting party to enter into legally binding relations. If a party does not have the capacity to do so, then subsequent contracts may be invalid; however, in the interests of certainty, there ...
*
Agency in English law
Agency in English law is the component of UK commercial law that deals with the application of agency law in the United Kingdom, and forms a core set of rules necessary for the smooth functioning of business.
In 1986, the European Communities ena ...
Notes
{{reflist, 2
References
*
United Kingdom company case law
High Court of Justice cases
1960 in case law
1960 in British law