COMPANIES BILL. [H.L.] (Hansard, 27 May 1948)

§ VISCOUNT SWINTON
My Lords, I have nothing to say on the admirable report of the Committee, but I am advised that this is the appropriate point at which to raise a question on Clause 140 of the Bill which is not proposed for your Lordships' Amendment. The Board of Trade have been good enough to say that they will give an elucidation. Your Lordships will remember that this clause occupied a good deal of attention in Committee in this House. It deals with the circulation of resolutions to members of companies, such resolutions being submitted 1172 by persons other than directors. The Bill lays down that those resolutions must be circulated by the company at the expense of the promoters of the resolution. I am quite clear on what was the intention when the House passed the Bill—namely, that the resolutions with the explanatory memoranda should be sent to the persons who were likely to be or could be affected by the resolutions, just as, under the existing law, if a resolution is proposed by the directors of a company it must be sent to all shareholders who could be affected by it. But suppose there is a resolution which affects merely the ordinary shareholders of a company and cannot at all affect the preference shareholders, then there is no obligation to circularise the preference shareholders who cannot be affected.
It has been suggested, on very distinguished authority, that this clause has been so drafted that where a resolution is submitted by somebody outside, it would have to be sent not only to those shareholders who would be affected by it if it were passed, but to every member of the company, whether or not he would be affected. I am sure that that was not the intention of this House when it passed the clause and, frankly, I should have thought it was not the correct interpretation of the clause. But I understand there is some doubt about this matter in the City, and some companies are anxious lest a great and unnecessary burden be thrown upon them. Therefore I would be grateful if a statement could be made to clarify the situation.

§ THE LORD CHANCELLOR
I would be glad to assist the noble Viscount who has, I understand, had some correspondence with the Board of Trade about this matter, and I do not dissent from anything he has said. I have not seen the letter, but I understand its general purport, and I do not dissent. I think we are here discussing a fundamental point and, because of my difficulty, I am not going to answer the noble Viscount further. We are here discussing a Consolidation Bill. We refer these Bills to a Committee, who go through them with great care. The function of that Committee is to see that they reproduce exactly the existing law, with all its blemishes and imperfections. Clause 140 of the Consolidation Bill is textually precisely the same as Section 3 of the Act of 1947. If on a consideration 1173 of Consolidation Bills in this House we were to embark on a discussion or a consideration of the merits or demerits, the clarity or obscurity of the existing law, then, to my mind, that would be the end of Consolidation Bills. Instead of performing this simple task of consolidation, reproducing the existing law, we should find ourselves wandering down all sorts of by-passes as to the merits or imperfections of the existing law which our Committee had reproduced.
Satisfied as I am that the Committee have reproduced the existing law, satisfied as I am that I ought not to go any further than that lest I create a precedent which might lead us into a consideration of the merits of the existing law, I shall, with the greatest respect, decline to answer the noble Viscount's question. But if he will see me afterwards I shall be very pleased to help him, if I can, in a private capacity, in regard to his difficulty.

§ VISCOUNT SWINTON
My Lords, I am much obliged to the Lord Chancellor and I accept with humility, and indeed with appreciation, the reproof which he has quite properly administered to me for the question I put. I am not less grateful for his opening observation in which he declined to answer the question but did not differ from my interpretation, and I will humbly attend him in his study.