1939 (8) TMI 27

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....certain resolutions on other matters. Ex. 11 is the requisition which was made by eleven shareholders, and in accordance with this requisition an extraordinary general meeting was held on 28th May 1939 when eight resolutions set out in para. 4 of the plaint were passed. By the present suit plaintiff seeks a declaration that the meeting held on 28th May 1939 was not validly convened and that the resolutions passed were invalid. He also seeks an injunction restraining the company defendant 1 from giving effect to any of the eight resolutions, and restraining defendants 2 to 5 the additional directors appointed at the meeting from acting on the board of directors. Plaintiff was granted an interim injunction, but when defendants appeared to show cause against the rule, it seemed to me that as evidence in the suit would be confined to the simple question of the date of presentation of the requisition, immediate disposal of the suit was possible and accordingly the suit has been tried. Plaintiff bases his case upon three main grounds. The first is that the meeting of 28th May 1939 was not properly convened and that all resolutions passed at that meeting are therefore invalid. The seco....

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.... 28th May 1939. I accept therefore that the meeting was convened in accordance with Article 68. It is further argued that as the notice to shareholders did not show, as the copy to directors showed the date of requisition, the shareholders were not put in possession of all facts necessary to enable them to determine whether they should attend the meeting. It has no doubt been held in many cases that a shareholder is entitled to be given adequate information as to the business to be transacted, as Section 78, Companies Act, in fact requires ; but I am not aware that it has ever been held that unless the notice of the meeting recites all facts necessary to meet every technical objection which may be raised as to its validity, the meeting held in pursuance to such notice must be invalid. I may also remark that Article 68 is not in accord with Clause (3) of Section 78, Companies Act, which provides a period of three months from the date of deposit of the requisition within which an extraordinary general meeting must be held. It is very doubtful if a meeting valid under the substantive law could be invalidated by an article of association. On this question, it is not necessary for me....

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....ad been divested from the company and had been entrusted to the board of directors to the exclusion of the company. This case was considered by the Court of Appeal in Worcester Corsetry Ltd. v. Wittings, [1936] (7 Comp. Cas. 296). The principle accepted in both cases is that the power of appointing additional directors will lie with the company in general meeting unless the company by its articles of association has divested itself of this power. This principle also is expressed in Section 83-B, Companies Act. In Worcester Corsetry Ltd. v. Wittings, [1936] (7 Comp. Cas. 296), the articles were not the same as in Blair Open Hearth Furnace Co. v. Reigart, [1913] (108 L.T. 665), but appear to be practically identical with those in the present case. In Worcester Corsetry Ltd. v. Wittings, [1936] (7 Comp. Cas. 296), it was held that on the articles in that case the rights and powers of the company in general meeting to appoint directors had not been circumscribed so as to prevent their being exercised by the corporators. Article 102 in the present case is as follows: "The directors shall have power, at any time, and from time to time, to appoint any other qualified person to be a dir....

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....t: 'The directors shall have power at any time, and from time to time, to appoint a person as an additional director who shall retire from office at the next following ordinary general meeting'. That provision indicates to me that a special emergency power for a limited period of appointing an additional director is given to the directors, which appointment lapses when the corporators would normally assume control over the appointment or the removal, as the case may be, of directors at their ordinary general meeting. I can find here no other power given to the directors to appoint directors at all. When we contrast that power with the power given to the directors by Article 93 in Blair Open Hearth Furnace Ltd. v. Reigart, [1913] (108 L. T. 665), we see that there the directors may from time to time appoint additional directors, but so that the total number of directors shall not exceed the prescribed maximum. There is no limitation there as to the time for which such additional directors shall serve, and that is one matter which distinguishes this case from Blair Open Hearth Furnace Ltd. v. Regart, [1913] (108 L. T. 665). In addition to that limitation of power of the directo....