Barron v Potter [1914] 1 Ch 895

Court: High Court

Facts: Two shareholders/directors were in a deadlock. A general meeting was called to appoint new directors, although the board was unable to function. The validity of this meeting was contested.

Held (High Court): The general meeting’s appointment of new directors was valid. The inability of the board to function properly allowed the power to revert to the shareholders in a general meeting.

Key Judicial Statement: Warrington J stated, “If directors having certain powers are unable or unwilling to exercise them … the company in general meeting had power to make the appointment.”

💡 Leveluplaw: When a board is deadlocked, shareholders in a general meeting have the authority to make decisions, including the appointment of directors, as long as the board is unable to act.