## Facts

- British America Nickel Corporation Ltd aimed to alter its capital structure through a merger of existing shares and the issuance of new ones.
- O’Brien, representing a group of preference shareholders, objected to the proposal on the basis that it unfairly restricted their voting rights and changed their dividend entitlements.

## Issues

1. Whether the proposed changes to the company's capital structure amounted to unfair treatment of preference shareholders.
2. Whether establishing unfairness required proof of actual, specific harm to the rights and interests of the objecting shareholders.

## Decision

- The Privy Council held that unfairness can only be established if there is actual, specific harm to the legal rights and interests of the affected shareholders.
- The Council determined that modification of share rights alone does not prove unfair treatment; a clear and demonstrable disadvantage to the objecting shareholders must be shown.
- It was emphasized that the assessment of unfairness should focus exclusively on the harm suffered by the opposing shareholders, regardless of any broader benefit to the company.

## Legal Principles

- While majority rule is a central tenet of company law, protections exist to prevent unfair prejudice against minority shareholders.
- Courts must undertake a comprehensive analysis of the entire proposal and its practical effect on the rights of the objecting shareholders.
- Evidence of unfairness must consist of tangible harm, not merely theoretical or minor grievances.
- The case established a framework for assessing unfair treatment, subsequently applied in cases such as Re Ho Tung Investment Co Ltd [1983] HKLR 319 and Re Holders Investment Trust Ltd [1971] 1 WLR 583.

## Conclusion

British America Nickel Corporation Ltd v O'Brien [1927] AC 369 (PC) affirmed that only genuine, demonstrable harm to a shareholder’s rights constitutes unfair treatment, setting a standard that endures in judicial evaluation of company arrangements affecting minority interests.
