Article 10 of the company's constitution said that directors could refuse to register share transfers.

Mr. Smith co-opted another director and refused to register a transfer of shares to the late Mr. Fawcett’s executors.

Lord Greene MR said:The principles to be applied in cases where the articles of a company confer a discretion on directors.

They must exercise their discretion bona fide in what they consider – not what a court may consider – is in the interests of the company, and not for any collateral purpose.

The question, therefore, simply is whether on the true construction of the particular article the directors are limited by anything except their bona fide view as to the interests of the company.