Page 3 Advertisements Column 1

Thames Star, Volume XIII, Issue 4247, 11 August 1882, Page 3

ing in mj\resignatioo on the 22nd ultimo, I hare taken counsel's opinion upon the abore and other matters affecting the interests of the Company, and in order farther to impress upon you the correctness of my contentions at the meeting against the arbitrary action of the Chair man, and the justifiable reasons which prompted me to resign, I beg to refer you to the case submitted for legal consideration, and to the opinion of Mr Hesketh upon the points at issue.—l hare the honor to be. Gentlemen, Yonr Obedient Somrati J. H; Nicholas. Case Submitted fob v Opinion of Counsel. z* I**©^ Martha Company was-incorporated on 13tB^rti^V 1881, under Joint Stock Companies Actr^SSOj. Table B of Act does not apply—vide Ai'ticloS'-ef Association sec. 1.. s 38 sec. of Act 18S0 requires that"General Meeting shall be hold oiice In. every year. 91 sec. 'Articles Association requires that Directors shall lay before Company statement of income, etc. 30 sec. Articles Association requires that first General Meeting shall bo heM;in month of Dec." 1881. JJeither of these requirements was earned ost. On 13th July of present year—the day on which the time prescribed by Act expired— a Director of the Company (J. H. Nicholls) called a Board Meeting; Pointed out to coDirectors that no Genl. Meeting had been held up to that time. It was proposed by said Director that a pro forma General Meeting should be called for 4 o'clock of that day and then ddjoumed for a week to allow ■-shareholders to bo present. The counter proposal by the Chairman was that the Directors presont should forthwith resolve " themselves into a General Meeting. This was done. No shareholders beyond members of Board were present. No statement of accounts up to date was produced as required by Act. The meeting consisted only of six Directors and ultimately of five, Mr Nicholls retiring. No business was done. The shareholders had no opportunity of being present. Meeting was not adjourned. Was this a legal General Meeting within meaning of Act and Articles ? On the same day a requisition under section 33 of Articles of Association was presented in due form calling an Extraordinary General Meeting of Shareholders for 2lßt Jnly (vide sec. 38 Articles). Its terms were to enquire into the Financial Condition of Company and all other business that might be brought forward— At the meeting so held on the 21st, after the reading of the Balance Sheet the Chairman ruled: —1. That the resolutions tabled under sec. 38 of Articles, did not form part of the business of the meeting because no notice had been given of them in tho requisition convening tho meeting, 2. That resolution No. 1, calling upon the Directors to retire, could not be carried out upon the groundS'that tho meeting under the Act and A'rticles<cpuld not elect new Directors unless by a special resolution to be confirmed at an Extraordinary General Meeting to be held not sooner than one month." Supported this argument by citing clause 3 Joint Stock Act 1869 and which did not legally bear upon the point. '3. Also ruled that even if Directors retired voluntarily new Directors could not be elected by meeting unless by special resolution to be confirmed as above. Sec. '61 of Articles of Association prescribes that all Directors shall retire in December 1881. No General Meeting was held at that time. No retirement of Directors did take place as required by Articles. .Do the present Directors therefore hold office legally? Have not all their acts since December 1881 Been illegal ? Opinion oe Me E. Hesketh re Martha 1 ■ Company. lam of opinion as follows: • , Section 38 of •' The Joint Stock Companies Act, 1860" requires a General Meeting of the Company to be held once at least in every year and this must be complied with. The Company having been, incorporated on the 13th July, 1881, the year has been allowed to pass- without a General Meeting being held. See ccc. 18 also. This feature-of " annual" meetings being held also finds a place in the Article? of Association (Nos. 30, 31) which require the first General Meeting to be held in December, 1881, and subsequent general meetings "annually" in December of each year, in case the Company does not prescribe otherwise, and as no meeting whatever has been held no other time has been prescribed. So far the Articles are (as they must be) in accord with sec. 38 of the Act. This feature as to meetings is also incorporated with the duration of the Directors' office (boo Articles 61, 62) and I am of opinion.that the present Directors are no longer Directors of the Company— 1. Because their term of office oxpired at latest on 13th July, 1882, and they have not been're-elected in terms of the Articles. Nor does Article 66 help the position, because even assuming the meeting of 13th July waß the first General Meeting no election was made and the meeting was not adjourned. In stating this reason I have assumed that the go-by could be given to the Articles and that a meeting conld bo called and held as that meeting was held. 2. Because by the Articles their torm of office expired in December, 1881, when the first General Meeting was? to be held (see Articles 30, 61) and in this the Articles mnst be adhored to. I think also that the meeting of 13th July can in no sense be called a General Meeting because it was not convened in accordance with the rult* as to notice, etc. (see rule 36), Tho Directors' are therefore Directors de facto but not dejure; as such they cannot make calls, or forfeit shares, nor can they legally cany on the internal affairs of the Company so as to bind the shareholders. The difficult question —" How is all this to be remedied ?" still remains. I am not satisfied that Article 83 would enable them to call a meeting under Article 33 so as to make their act binding on the shareholders. Nor am I satisfied that they exist so as to recoive and act upon a requisition under the same article, because I think the shareholders have tho right to say that /they.are not "Directors," and if theycanvalid call or forfeiture (and as to this lam'clear) I do not see that they can call a valid meeting* 'My opinion is that the Company is without the power of calling a meeting and in such a case (unless all the shareholders consent) I think tho proper-bourse, is to apply to the ■ Court to summon onln in order to put matters right and so prevent'" th'o Company from coming to an end and I think the Court would yield to Buch a proposal. See M'D^ongal v. Gardner L.R. lOch. a.p.p. 608. Assuming, however, that the Directors (?) could receive a requisition [and act npon it then as'the case states that such a requisition was made in due form the Directors ought to have acted upon it and called the meeting of which aeyen day's notice must be given. The requisition was good for the purpose named in it viz., "to inquire into the financial condition of the Company." The first ruling of the Chairman was wrong so long as rulo 38 was complied with. Assuming as above and that the meeting was otherwise duly called then the Directors could resign and I see no reason why new Directors could net bo then elected. lam " notawaretbat new Directors must be elected by; special resolution, jSo far I think the Chairman's second and third rulings wore „ wrong. " _ L Edwin Hesketh. . Ancklan,d,.2?th Jnly, ,1882. . .