British America Nickel Corporation Ltd v O'Brien [1927]

British America Nickel Corporation Ltd v O'Brien [1927] AC 369 deals with the variation of class rights, specifically in the context of mortgage bonds. It establishes the principle that, in addition to complying with statutory procedures, resolutions affecting class rights must be passed bona fide in the interests of the entire class, not just individual members.

The company had issued mortgage bonds, and the terms of these bonds could be altered by a three-quarter majority of the class holding those bonds. A scheme of arrangement proposed modifying the rights of the mortgage bond holders. A majority of bondholders voted in favour, but it was later revealed that this majority was influenced by a promise of receiving a block of ordinary shares in return.

The Privy Council held in favour of the minority bondholders. Viscount Haldane, delivering the judgment, emphasised that the power conferred on a majority to alter class rights must be exercised for the benefit of the entire class. There is a general principle that such powers should not be used for the selfish interests of individual members but should serve the collective interests of the class.

Viscount Haldane drew an analogy between the case at hand and the power granted to a majority of shareholders under section 13 of the English Companies Act of 1908 to alter articles of association. He highlighted the restriction on such powers when aimed at binding a minority, asserting that they must align with the overarching principle of benefiting the class as a whole.

This case underscores the importance of good faith and collective benefit in resolutions affecting class rights. It establishes a limitation on the power of majorities to ensure that their actions are not driven by individual gains but genuinely serve the interests of the entire class. The judgment reflects the equitable principles governing variations of class rights.
Back to blog

UOL Case Bank

Upon joining, you become a valuable UOL student and gain instant access to over 2,100 case summaries. UOL Case Bank is constantly expanding. Speed up your revision with us now.

Subscribe Now

Where are our students from?

Yale University
Council of Europe
Baker Mckenzie 
University of Chicago
Columbia University
New York University
University of Michigan 
University College London (UCL)
London School of Economics (LSE)
King’s College London (KCL)
University of London
University of Manchester
University of Zurich
University of York
Brandeis University
University of Exeter
University of Sheffield
Boston University
University of Washington
University of Leeds
University of Law
Royal Holloway, University of London 
Birkbeck, University of London
SOAS, University of London
University of Kent
University of Hull
Queen’s University Belfast
Toronto Metropolitan University
Hong Kong University of Science and Technology
University of Buckingham

  • Criminal Practice

    Diagrams and Charts

    Our carefully designed diagrams and charts will guide you through complex legal issues.

  • Criminal Law

    Clear and Succinct Definitions

    Key concepts are concisely defined to help you understand legal topics quickly.

  • Property Law

    Statutory Provisions

    Statutory provisions are provided side by side with legal concepts to help you swiftly locate the relevant legislation.

  • Public Law

    Case Summaries

    We have summarised important cases for you so that you don't need to read long and boring cases.

  • Evidence

    Rules and Exceptions

    Rules and exceptions are clearly listed so that you know when a rule applies and when it doesn't.

  • Company Law


    Legal terms and key concepts are explained at the beginning of each chapter to help you learn efficiently.

  • Case Law

    Case law is provided side by side with legal concepts so that you know how legal principles and precedents were established.

  • Law Exam Guide

    Law Essay Guide

    You will learn essential law exam skills and essay writing techniques that are not taught in class.

  • Law Exam Guide

    Problem Question Guide

    We will show you how to answer problem questions step by step to achieve first-class results.

  • Conflict of Laws

    Structured Explanations

    Complex legal concepts are broken down into concise and digestible bullet point explanations.

  • Legal System and Method

    Legal Research

    You will learn legal research techniques with our study guide and become a proficient legal researcher.

  • Jurisprudence and Legal Theory


    All essential concepts, principles, and case law are included so that you can answer exam questions quickly.