1934 (3) TMI 20

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...., 1929, Section 126, sub-Section 2. The duty of the auditors is to speak to the accuracy of the balance-sheet embodying a final account-Newton v. Birmingham Small Arms Co., Companies Act, 1929, Section 122. If the auditors take any part in the preparation of the balance-sheet, they are performing duties which are not the duties of auditors. The auditors are not responsible for any delay by the directors in preparing the balance-sheet. They cannot report until they have signed the balance-sheet presented to them. [They referred to London and General Bank, In re (No. 2), Newton v. Birmingham Small Arms Co., and Cuff v. London and County Land and Building Co.] If the section means a report to all the shareholders, and not to the shareholders i....

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....itors have is by passing the report through the executive of the company. That was the only normal channel between the auditors and the shareholders before the Act of 1929; since that Act through the executive or by attending the meeting. You must always in every state of facts read into the section the words "assembled in general meeting." Christie, K.C, in reply.-If is for the auditors to choose their own method of communicating with the shareholders: either (1) with every shareholder individually, or (2) if they can get the shareholders together, in general meeting. It must be a meeting at which the matter is capable of being dealt with. The Act is wider than just communicating with the shareholders in general meeting-Section 134, sub....

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....f 1929, which in all material respects is identical with the corresponding section of the Act of 1908, although since the facts of the case took place in part before November 1, 1929, and in part after that date, both statutes apply. [His Lordship read Sections 129, 130, 132 and 134 of the Act of 1929, and continued:] Now I think that the duty of the auditors in this case can be tested by reference to the reports and balance-sheets for the years ending June 30, 1925, and June 30, 1926, both of which were signed by two directors. The reports annexed to these balance-sheets were signed by the auditors. The question is what was the duty of the auditors in respect of those two balance sheets? The auditors merely sent the reports and balan....

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....n pressed to give a definition of "members" shrank from saying that it was the duty of auditors to send their report to every member of a company. He contended that the word "members" meant "all the members," but that those present at the general meeting represented them all-so that, if there was a general meeting, and at that general meeting a report was presented, those present represented and were all the members. If, however, no meeting was called by the directors, then the word "members" had another meaning and meant "all the members." It seems to be a strange way of interpreting a section in an Act of Parliament to say that a word is to have two different meanings. The word must have the same meaning at all times. I do not think it....