1954 (11) TMI 33

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....dinary shareholders ; but at the meeting of the "B" ordinary shareholders a quorum as required by article 46 was present at the beginning of the meeting, but one shareholder, who at that time objected to the proposed reduction, left the meeting after it had proceeded to consider the business for which it had been called, thus reducing the number present to a number below the quorum required by article 46 before the resolution was passed. The court was asked, on this petition to confirm the proposed reduction of capital, to decide as a preliminary point whether as a result of that act no valid resolution was passed at the meeting. Article 46 of the company's articles of association provided: "......all or any of the conditions.............

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....o be present when a meeting proceeds to business, and that was so at the meeting of the "B" ordinary shareholders ; there was therefore a sufficient compliance with the article. Articles 52 and 53 fit together and show what is the proper construction of article 52 ; article 52 provides that a quorum must be present when the meeting proceeds to business, and article 53 contains provisions for getting out of an impasse when no quorum is present at all. The articles contain no provision for the case where a quorum is present at the beginning of the meeting when the meeting proceeds to businesss, but it is reduced below that quorum because someone leaves the meeting before the business is transacted. To imply a provision that a quorum must be p....

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....d that condition is a composite one. It requires not only that a quorum is to be present, but qualifies that by saying that the quorum is to be present when the meeting proceeds to business, then a formula is set out for calculating the number who are to form the quorum. It could only be by implication that that language could be extended to cover the position when the meeting proceeds to the vote because, on the face of it, the condition of the article is fulfilled if the quorum is present when the meeting proceeds to consider the business for which it was convened. Looking still only at these articles, I think that that interpretation is underlined when one considers and analyses article 53, which is designed to cover the position whic....

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....ects similar to article 52, but so far as I can see from a study of the report, the article corresponding to article 53 in the company's articles in this case was not cited to the court, nor was the argument put before me by Mr. Russell in any way adumbrated. The Lord President took the view, in which the other two members of the court concurred, that a quorum must not only be present at the commencement of the meeting, but also at the time when the business was transacted. In the course of the judgment he said [1894] 21 Rettie 676: "It would be a highly inconvenient not to say unnatural meaning to attribute to it, [the article] to hold that all that is necessary to the validity of the proceedings is, that at the earliest stage of the me....