QUESTION OF COMPANY LAW

Taranaki Daily News, 19 October 1927, Page 8

QUESTION OF COMPANY LAW

INTERPRETATION OF ARTICLES. By Telegraph.—Press Association. Wellington, Oct. 18. The Court of Appeal was engaged this morning in hearing an originating summons removed into the Court of Appeal for argument by Mr. Justice Sim. The plaintiffs are Herbert Edward Pacey, Meldrum Alfred Elliott and Ernest Cuthbert Barnett, of Palmerston North, and the defendant the Premier Drapery Co,, Ltd., of Palmerston North. Two of the points the determination of. which is claiming the court’s attention are;—

(1) Whether, according to the true construction of the Companies Act, 1908, and particularly section 168 (6) thereof, it was competent or lawful for defendant by article 74 of its articles of association to restrict or limit the voting power of preference shareholders in the capital of the company; which said article 74 is as follows: “On a show of hands every member present in person shall have one vote, and, upon a poll being taken, every member present in person or by proxy shall have one vote for each share held by him in respect of which there is no payment in arrear: provided, however, that as long as the company shall duly pay dividends accruing and due in respect o£ any preference share issued by the company the holders of such preference shares shall not be entitled to receive notice of or attend or vote in person or by proxy nt any meeting unless the same has been convened for altering these presents or for winding up.” (2) Whether every resolution by the defendant company must be passed by entry in the defendant company’s minute book signed by at least threefourths of the numbers holding in the aggregate at least three-fourths of the shares in the capital of the defendant company, both ordinary and preference shares. The court did not call on the defendguta, Dgeisioii was reserved,