Re Saltdean Estate Co Ltd [1968]

Re Saltdean Estate Co Ltd [1968] 1 WLR 1844 concerned whether the buyback of shares through a reduction of capital constituted a variation of class rights, necessitating a separate class meeting under the company's articles. The primary contention was whether the pay off of preference shares, as part of a reduction of capital, required approval from the affected shareholders through a separate meeting.

The company's articles mandated a separate class meeting if the rights of a shareholder class were to be varied. Preference shareholders, whose shares were paid off at par through a reduction of capital, argued that a distinct meeting of preference shareholders was essential for approving the pay off.

The High Court held that no separate class meeting was required for the pay off of preference shares through a reduction of capital. Justice Buckley, in delivering the judgment, emphasised that the liability to prior repayment on a reduction of capital was inherent in the rights of preference shareholders. He stated, "Giving effect to it does not involve the variation or abrogation of any right attached to such a share." The integral nature of this liability in defining the bundle of rights associated with preference shares led to the conclusion that no variation of class rights occurred through the reduction of capital.

This case contributes to the jurisprudence on variations of class rights in company law, clarifying that actions integral to the pre-existing rights of a class, such as the payment of preference shares in a reduction of capital, may not constitute a variation requiring a separate meeting.

In conclusion, this case underscores the importance of examining the inherent rights associated with a class of shares in determining whether a transaction constitutes a variation. Justice Buckley's analysis provides clarity on the interplay between actions that give effect to existing rights and variations that alter the fundamental nature of those 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 
INSEAD
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

    Terminology

    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

    Exam-focused

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