The company wished to buy a meter manufacturing business that was in administration from one John West, and wished to change its articles to allow preferential shares to be allotted to him, as part of the consideration for the deal.

Lindley LJ held that the company could issue the preferential shares.

A company cannot deprive itself of the power to amend its articles by special resolution.

He noted,[1] If, by declining to follow the second decision in Hutton v Scarborough Cliff Hotel Co, we were disturbing titles or embarrassing trade or commerce we should treat it as one of those decisions which, though wrong, it would be mischievous to overrule.

But such is not the case; and it is desirable, from all points of view, to remove from companies a fetter which ought never to have been imposed upon them, and which in practice has been got rid of by skilled draftsmen by the insertion of power to issue preference shares in the original articles of association or the memorandum of association itself.