Lynton and Barnstaple - Operations and Development

We can argue about the propriety of legal advice being disclosed to members @Lineisclear but surely as a former lawyer you would accept that when legal advice is commissioned by a Board and not disclosed to all the Trustees, on which a decision is then made by the Board, that decision is illegal (or invalid). Leaving aside the idea that all Trustees should abide by the majority point of view. Here is what one of those Trustees - Anne Belsey - wrote on another forum when asked: 'No, Tony (Nicholson) has not published the legal advice he has supposedly received. Nor was John Barton prepared to reveal to Chris, Mike or myself at the last board meeting the legal advice supposedly received regarding the new Articles as a whole.'

 

I'm not entirely au fait with meetings procedure, but if a matter (such as, hypothetically speaking, the incorrect inclusion of motions with insufficient numbers of proposers) was raised as a "point of order" at the meeting, would the chair have to allow discussion and even a vote on such?

 

Indeed. 6 members, from a total of c. 3,000. My question is not about the right of those members to seek such a motion, but the validity of their request being granted bearing in mind that (a) they have not provided evidence of the requisite support pursuant to s.303 and (b) made the request after the motion to call the meeting for the M&As had been closed.

This feels wrong. It feels doubly wrong that those 0.2% of members should be privileged over the other 99.8% in their ability, as members, to seek a resolution without the burden of meeting the tests imposed by S. 303, including bearing the costs of the mailings.

 

It would seem logical, though I also lack the knowledge of company meeting procedure. That of course begs the question of how one of the signatories to the motion could conceivably hold the chair.

 

Some are more equal than others!

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I believe if the request is made by members pursuant to section 168 it’s not a case of it being granted . As far as I know the company is obliged by section 169 to call a meeting to consider it.

 

My understanding, from experience at GMs elsewhere, is that a Chairman ought (if not must) allow a 'point of order' at least to be put forward; what he may then do about it, if anything, thereafter would be his decision. However IMHO it would then depend on the nature of the 'point' as to what extent - if at all - any discussion would be relevant, let alone need a vote.

To give an example - at the AGM of another Trust some years ago, as a result of some odd confusion more Trustees were elected than was permitted under the Trust's rules! The Chairman then announced the names of those elected and moved on to the next item in the Agenda. Having done some quick(ish!) calculations, I then raised a Point of Order, which the Chairman took. Having explained my 'point', it was agreed then that in fact there were now too many Trustees (so in effect the Board was now invalid), after which some discussion was held - with contributions from the floor - as to how best the resolve the issue (which was done). But if the Chairman had not accepted my PoO, he would have found himself in charge of an invalid Board simply because he had not stopped to listen to the nature of the PoO. So I would argue that it would be in the Chairman's interest to take a PoO, even if - having heard it - he rejects it.

Anyway, if you've followed my ramble so far , I would suggest that there would be scope to raise a PoO at the start to ask the Chairman to either (a) confirm that the two Resolutions have been supported by the requisite notifications from 3% of the membership, or else (b) advise on what basis he believes they are valid to be discussed at the EGM, as otherwise the meeting must be invalid and therefore what is the point of continuing? It's worth a try, surely, and his response could be illuminating....

 

Indeed. But S.168 talks about an ordinary resolution, which brings us back round to the question of which resolutions are on the agenda, and on what authority they have been placed there. Otherwise, which I cannot believe was the intent of Parliament, any member of any company could compel a General Meeting at any time by saying "I want a meeting to evict X as director".

But here we're talking about two resolutions tabled pursuant to S.303, where those seeking items 1 and 2 on the agenda did not meet the tests required there.

 

My understanding, and I may be wrong, is that section 168 notice does not require that the section 303 threshold is achieved. Motions 1 and 2 are therefore not the result of board authorization but because of the company’s obligation under section 169.

 

@35B is correct.

s168(1) speaks of "a company may by ordinary resolution at a meeting remove a director...", @Lineisclear , but that is not what appears to have happened here. For it to be a corporate decision - and therefore invoking s168 - there must be a corporate decision, which would take the form of a Board vote at a properly constituted meeting.

This does not appear to have happened, meaning that s168 is not engaged.

As such, what there is is an agreement by 5 or 6 votes to 3 (reports vary: Martin Swainson appears to have been absent, so I'm assuming it was 5-3) to put changes to the M&As to the Membership via a Special Resolution at an EGM on 23 March.

Separately, reportedly under AOB, the Company Secretary reportedly noted that he had received a letter from six members (who happened to be Trustees) seeking an Ordinary Resolution to remove Anne and Chris. Ignoring the Company Secretary's failure to circulate this letter to all Trustees upon recepit, there does not appear to have been a motion or a vote, meaning that this was not a corporate decision.

Consequently, that six members want to have an Ordinary Resolution to remove Anne and Chris is all very interesting, but it needs its own EGM , supported by 5% of the Membership and funded by those six members under s303 ss(b) (2). There is no publicly available evidence that 'the six' have done so, meaning that the Ordinary Resolutions on the EGM Agenda are invalid and must be removed.

 

Sorry but I don’t agree with your analysis.

 

@Lineisclear - ok, why am I wrong?

 

To clarify why I don’t agree have a look at section 169 (1) specifying that special notice must be given to the company. That notice is given by a member or in this case a number of members.The decision under section 168 is indeed a corporate decision by the members in general
Meeting which the company is obliged to call in response to the notice given to it.

 

This seems odd to me - when the reformists of the WSRA wanted to remove company directors they needed to raise 5% of the membership to get a motion for an EGM. They needed to do this, and bear the costs, 3 times.

Is the suggestion that if they had merely sent an appropriate letter requesting that motion, without the 5% support, then the WRSA would have been obliged to run that motion, whether at an EGM or an AGM, and bear the costs themselves?

It certainly appears to be the suggestion, since the motions to remove Anne and Chris have been posited by the directors *as members*, not as the board, the costs appear to have been borne by dint of the EGM for the Articles being piggybacked upon, and there is no suggestion that there has been a 5% sign up.

John

 

I think section 303 and the 5% threshold become relevant only if the company cannot or refuses to call a meeting in response to section 168 special notice.

 

@Lineisclear , s169 is only engaged when the s168 requirements are met - otherwise "On receipt of notice of an intended resolution" would be open to anyone, which is clearly unworkable.

As 'the six' ordinary resolution wasn't a Board Resolution, I can't see s168 is engaged. How do you think it is?

 

This really is not correct.
Any Member can suggest agenda items for a meeting.
When such items are received, the directors can choose to accept or reject those items.
If the items are rejected, then the member then has the option of forcing the board by dint of s303 and the 5%.

So to reiterate, s303 is only used to force a reluctant board to call a meeting. If the board welcomes the agenda item then s303 does not apply.

If you carry on trying to argue that the meeting is not valid on this point then you will fail. You are far better off now working hard at the move to presuade members to reject the motions.

 

It was given by six members in their capacity as members and appears to have satisfied the special notice requirement.

 

Are we both looking at the same legislation? I am looking at the Companies Act 2006, Sections 168 and 169, as published on legislation.gov.uk (https://www.legislation.gov.uk/ukpga/2006/46/contents). The text we're debating is as follows:

S.168 refers to an "ordinary resolution", with S.168(2) stating the requirement for special notice. The process for these is described elsewhere in the Act, and includes the threshold requirements we've previously discussed.

What I'm struggling to reconcile is the use of the term "ordinary resolution" with the idea that any member may at any time bypass the requirements elsewhere in the Act, and compel the company to act in this way. This would imply that any shareholder, with a single share, could compel any company to remove a director at any time. If you think of the role of political activists (oil majors, say, or Huntingdon Life Sciences during that campaign), this would tie companies up in knots. That would, amongst other things, render any nomination committee moot as, in a dispute situation such as here, it would be open to me to seek to remove directors at will, rendering it impossible for a committee such as proposed to get off the ground.

Sections 302 and 303 must apply to general meetings called in reference to matters under Section 168.