North of Scotland and Orkney and Shetland Steam Navigation Co., Ltd Petitioners [1919] ScotLR 117 (28 November 1919)

North of Scotland and Orkney and Shetland Steam Navigation Co., Ltd Petitioners [1919] ScotLR 117 (28 November 1919)

The statutory procedure for altering the company's constitution was not followed because (1) the notice for the meetings did not include or refer to the memorandum and articles to be adopted, and (2) the notice for the confirmatory meeting was conditional on the passing of the resolution at the first meeting, which is not permitted unless expressly provided by the articles. These defects are substantial and vitiate the procedure.

Citation
[1919] ScotLR 117
Parties
Petitioner: North of Scotland and Orkney and Shetland Steam Navigation Company, Limited
Jurisdiction
Scotland
Judgment Date
28 November 1919
Procedural Posture
Petition for Confirmation of Alteration of Constitution and Extension of Objects / Inner House, First Division, Court of Session – Judgment on Procedural Compliance
Outcome
Petition continued to enable statutory procedure to be properly carried out; no confirmation granted.
Legal Topics
Alteration of Company Constitution, Special Resolutions, Notice to Shareholders, Statutory Compliance
Company Law Corporate Procedure Alteration of Company Constitution Special Resolutions Notice to Shareholders Statutory Compliance

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Parties

North of Scotland and Orkney and Shetland Steam Navigation Company, Limited

Petitioner

Procedural Posture

Petition for Confirmation of Alteration of Constitution and Extension of Objects / Inner House, First Division, Court of Session – Judgment on Procedural Compliance

Legal Issues

  1. 1 Whether the statutory procedure for altering a company's constitution by special resolution was properly followed
  2. 2 Whether notice requirements to shareholders were satisfied under the Companies (Consolidation) Act 1908
  3. 3 Whether conditional notice of confirmatory meeting is valid

Ratio Decidendi

The statutory procedure for altering the company's constitution was not followed because (1) the notice for the meetings did not include or refer to the memorandum and articles to be adopted, and (2) the notice for the confirmatory meeting was conditional on the passing of the resolution at the first meeting, which is not permitted unless expressly provided by the articles. These defects are substantial and vitiate the procedure.

Court Disposition

Petition continued to enable statutory procedure to be properly carried out; no confirmation granted.

Orders

  • Petitioners must repeat the statutory procedure for alteration of constitution, ensuring compliance with notice requirements.