COMPANIES BILL. [H.L.] (Hansard, 21 February 1929)

§ THE LORD CHANCELLOR (LORD HAILSHAM)

My Lords, in asking your Lordships to give a Second Reading to this Bill I am afraid at first sight it might seem as if I was embarking on a formidable task. The Bill contains 384 clauses occupying 236 pages of printed matter and 12 schedules which occupy nearly another 60 pages, but fortunately, as your Lordships will see by looking more closely into the title of the Bill, it is not necessary for me to ask you to become acquainted with its contents because the Bill is a Consolidation Bill pure and simple. Therefore, if your Lordships see fit to give it a Second Reading, it will go to the Joint Committee on Consolidation Bills, which is so ably presided over by my noble and learned friend Lord Muir Mackenzie. That Committee will occupy itself with the determination of the question as to whether or not this is in fact a reproduction of the existing law.

The history of the matter can be stated in a few sentences. Last Session Parliament passed the Companies Act of 1928, which embodied a number of alterations in the law, many of them recommended by a very expert Committee presided over by an eminent lawyer, Mr. Wilfred Greene, K.C., and when that Bill was before your Lordships' House I undertook that it should not become operative until this consolidation had been undertaken. In pursuance of that undertaking there has been a great deal of work devoted to the consolidation of company law. Apart from certain enactments scattered over various Acts of Parliament there are four Companies Acts—those of 1908, 1913, 1917 and 1928. Of these, the 1913 Act consists of only one clause and of the 1917 Act there only survives one subsection, so that substantially the law to be consolidated consists of the 1908 and 1928 Acts. The process of consolidation, as your Lordships will appreciate, is not a mere matter of scissors and paste, the bringing together of different pieces of 1030 different Acts of Parliament, but involves a very close study of the law and the reproduction in different language of a combination of two or three sections of different Acts of Parliament. In that process there emerged, as was only to be expected, certain difficulties and certain inconsistencies in the law.

I hope very much that the Joint Committee when it embarks upon its labours will be able to resolve these difficulties and go a long way to clear up those inconsistencies without departing beyond the legitimate limits of consolidation. It may happen that there will ultimately appear to be necessary some amendment of the law as it is declared in the Bill when the Committee have finished with it. It will in that event become the duty of the Government to introduce some amending legislation in order to get rid of any difficulties that may appear. That can be done, of course, by the process of letting the present Bill drop or bringing in an amending Bill in some future Parliament and then a fresh Consolidation Bill, which will embody both the Amendments and the results of the labours of the present Committee. It can, I think, be preferably done, unless the Amendments are numerous, by passing this Bill, as it is ultimately amended by the Committee, into law, but to postpone the date of its actual coming into operation until such Amendments as are necessary are cast in some ensuing Parliament. These Amendments can be passed in what is known as a printing clause—a clause which will provide that the Amendments will be printed with the Bill. In that way the Act, as amended, will appear as containing the whole code of law.

There are certain re-arrangements which it may be thought desirable to make in the form of the Statute. The 1908 Statute was based upon the original 1862 Statute when joint stock companies' limited liability was in its infancy. The result is that there is a good deal of confusion and unsuitable grouping to be found in the 1908 Act, a matter which has been commented upon by lawyers more than once. Those difficulties and that confusion became apparent when the process of consolidation was embarked upon, and the attempt to squeeze into the framework of the 1908 Act the alterations of the 1928 Act made the difficulties even more apparent. Accordingly those who have 1031 framed this Bill have thought it better to re-arrange the law, and your Lordships will find that Part I of the Bill deals with the incorporation of companies, Part II with the share capital and debentures, Part III with the registration of charges, Part IV with the management and administration of companies, Part V with the winding up of companies, grouped under winding up by the Court, voluntary winding up and, finally, provisions applicable to every mode of winding up. The remaining Parts follow generally the arrangement of the 1908 Act, with the alterations made necessary by the 1928 Act.

I think those who practise in the Courts and those who are called upon to deal with company matters will find the new arrangement far more convenient as well as more logical. Indeed I may say that some of those best qualified to judge, including one of the Judges of the Chancery Division of very great experience, have been consulted upon the form of re-arrangement, and have been good enough to express the opinion that not only was re-arrangement necessary, but that the actual way in which it has been done is a very great improvement and is satisfactory. I mention the rearrangement now so that those of your Lordships who busy themselves by looking at the Bill in its present form may not be confused or discouraged if they find that some sections with which they are familiar do not appear quite in the expected place. I am, of course, ready to answer any questions which your Lordships may think fit to ask, but I hope the explanation I have given as to the reasons for the Bill, and the way in which it is brought before your Lordships, will be sufficient to justify your Lordships' House in giving it a Second Reading. I beg to move.