Auditors' duty to report to members is satisfied by forwarding the signed report through the company's administrative channel.

The statutory duty on auditors to report to "the members" was construed as a duty to report to the members assembled in general meeting, not to send individual reports to each shareholder. The court held that auditors were not required to convene the meeting or ensure personal circulation of the report, because they had no power to do so. Their duty was discharged by signing the report and forwarding it to the company secretary through the ordinary administrative channel, leaving the directors and company machinery to lay it before the members. The claim against the auditors therefore failed.

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Issues: Whether the auditors' statutory duty was to make and deliver their report to every member or to the members assembled in general meeting, and whether that duty was discharged by forwarding the signed report to the company secretary.

Analysis: The statutory language requiring a report to "the members" was read in its context and scheme. The Court held that the expression could not sensibly impose a duty on auditors to send individual reports to each member, nor could it require them to convene a general meeting or ensure personal communication with all shareholders. Since the auditors had no power to call a meeting, the practical and lawful construction was that their duty ended when they signed the report and forwarded it to the company's secretary, leaving the directors and company machinery to place the report before the members in general meeting.

Conclusion: The auditors' duty was confined to forwarding the signed report to the company secretary, and the report was required to be considered by the members assembled in general meeting. The auditors were not in breach of their statutory duty.

Final Conclusion: The claim against the auditors failed because the statute did not impose on them a duty to directly circulate the report to all shareholders or to convene the meeting themselves.

Ratio Decidendi: Where a statute requires auditors to report to "the members," the expression is to be construed as the members assembled in general meeting, and the auditors discharge their duty by forwarding the signed report through the company's usual administrative channel.

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