Edwards v Halliwell
Encyclopedia
Edwards v Halliwell [1950] 2 All ER 1064 is a UK labour law and UK company law case about the internal organisation of a trade union, or a company, and litigation by members to make an executive follow the organisation's internal rules.
sued the executive committee for increasing fees. Rule 19 of the union constitution required a ballot and a two third approval level by members. Instead a delegate meeting had purported to allow the increase without a ballot.
the union itself is prima facie
the proper plaintiff and if a simple majority can make an action binding, then no case can be brought. But there are exceptions to the rule. First, if the action is ultra vires
a member may sue. Second, if the wrongdoers are in control of the union's right to sue there is a "fraud on the minority", and an individual member may take up a case. Third, as pointed out by Romer J in Cotter v National Union of Seamen a company should not be able to bypass a special procedure or majority in its own articles. This was relevant here. And fourth, as here, if there is an invasion of a personal right. Here it was a personal right that the members paid a set amount in fees and retain membership as they stood before the purported alterations.
Facts
Some members of the National Union of Vehicle BuildersNational Union of Vehicle Builders
The National Union of Vehicle Builders was a trade union in the United Kingdom. It merged with the Transport and General Workers' Union in 1972.-See also:* List of trade unions* Transport and General Workers' Union* TGWU amalgamations...
sued the executive committee for increasing fees. Rule 19 of the union constitution required a ballot and a two third approval level by members. Instead a delegate meeting had purported to allow the increase without a ballot.
Judgment
Jenkins LJ granted the members' application. He held that under the rule in Foss v HarbottleFoss v Harbottle
Foss v Harbottle 67 ER 189 is a leading English precedent in corporate law. In any action in which a wrong is alleged to have been done to a company, the proper claimant is the company itself. This is known as "the rule in Foss v Harbottle", and the several important exceptions that have been...
the union itself is prima facie
Prima facie
Prima facie is a Latin expression meaning on its first encounter, first blush, or at first sight. The literal translation would be "at first face", from the feminine form of primus and facies , both in the ablative case. It is used in modern legal English to signify that on first examination, a...
the proper plaintiff and if a simple majority can make an action binding, then no case can be brought. But there are exceptions to the rule. First, if the action is ultra vires
Ultra vires
Ultra vires is a Latin phrase meaning literally "beyond the powers", although its standard legal translation and substitute is "beyond power". If an act requires legal authority and it is done with such authority, it is...
a member may sue. Second, if the wrongdoers are in control of the union's right to sue there is a "fraud on the minority", and an individual member may take up a case. Third, as pointed out by Romer J in Cotter v National Union of Seamen a company should not be able to bypass a special procedure or majority in its own articles. This was relevant here. And fourth, as here, if there is an invasion of a personal right. Here it was a personal right that the members paid a set amount in fees and retain membership as they stood before the purported alterations.