It held that alterations could not be interfered with by the court unless the change that had been made was not bona fide for the benefit of the company as a whole.

This rule served as a marginal form of minority shareholder protection at common law, before the existence of any unfair prejudice remedy.

Gold Reefs’ articles gave it a "first and paramount lien" (the right to retain possession) on all partly paid shares held by any member for any debt owed to the company.

Lord Lindley MR held the alteration of the company's articles was valid to introduce a lien on fully paid up shares.

It must be exercised, not only in the manner required by law, but also bona fide for the benefit of the company as a whole, and it must not be exceeded.