Company articles and director appointments: a general meeting may vary board strength and appoint additional directors unless the articles clearly exclude it.

The articles were construed as permitting a general meeting to act within their existing machinery to vary the number of directors, so an increase from seven to eleven did not require a special resolution and was valid. The notice convening the extraordinary general meeting was not invalidated by omission of the date of receipt of the requisition, because the meeting was held within the prescribed time and the notice sufficiently informed shareholders of the business to be transacted. Reading the articles as a whole, the directors' power to appoint additional directors was not exclusive, and the company in general meeting retained competence to make such appointments unless clearly excluded by the articles.

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Issues: (i) Whether the extraordinary general meeting was invalidly convened because the requisition was allegedly not delivered within the time required by the articles and the notice to shareholders did not state the date of receipt; (ii) whether the resolution increasing the maximum number of directors from seven to eleven required a special resolution as an amendment of the articles; (iii) whether the company in general meeting had power to appoint additional directors, or whether that power was vested exclusively in the directors.

Issue (i): Whether the extraordinary general meeting was invalidly convened because the requisition was allegedly not delivered within the time required by the articles and the notice to shareholders did not state the date of receipt.

Analysis: The delivery of the requisition was accepted as having taken place on the date proved by the company, and the meeting was held within the period prescribed by the articles. The omission of the date of receipt from the notice to shareholders did not vitiate the meeting, since the notice gave sufficient information for the business to be transacted and did not need to answer every possible technical objection to validity.

Conclusion: The meeting was validly convened and this objection failed.

Issue (ii): Whether the resolution increasing the maximum number of directors from seven to eleven required a special resolution as an amendment of the articles.

Analysis: The resolution was treated as one made under the existing article allowing the number of directors to be varied by general meeting. It did not replace the article but operated within it. The authorities relied upon supported the view that such an increase of directors could be validly effected by ordinary resolution where the articles so provided.

Conclusion: No special resolution was required and the resolution was valid.

Issue (iii): Whether the company in general meeting had power to appoint additional directors, or whether that power was vested exclusively in the directors.

Analysis: Reading the articles as a whole, the power of the directors to appoint additional directors was not exclusive. The articles preserved the company's power in general meeting to increase the number of directors and to fill vacancies, and the relevant provision did not exclude the corporators' ordinary power of appointment. The appointment of the named additional directors was therefore within the competence of the meeting.

Conclusion: The appointment of additional directors was not ultra vires the meeting and was valid.

Final Conclusion: The plaintiff's challenge failed on all substantive grounds, and the suit was liable to be dismissed with costs.

Ratio Decidendi: Where the articles of association permit the number of directors to be altered by a general meeting, a resolution acting within that machinery need not be by special resolution, and the company in general meeting retains the power to appoint additional directors unless the articles clearly exclude that power.

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