§ 66 Clause 43, page 48, line 5, leave out ("section 49") and insert ("sections 49 and 54(4)").
§ Lord Mackay of Clashfern
My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 66, and with this amendment I wish to take Commons Amendments Nos. 107, 108 and 109. These amendments will change the remedies which are to be available against the company where the company has failed to purchase or redeem shares. At present Clause 54 provides that any general remedy which would normally be available for a breach of contract will be available against the company for failure to purchase or redeem, but that in a winding up the claim of a shareholder in respect of such failure is to be postponed to all other debts and liabilities of the company, but is to have priority over the rights of other shareholders in a winding up.
Clause 54, as amended, will provide: (a) that a company shall not be liable to pay damages in respect of a failure to purchase or redeem, but that other remedies are to be available; (b) that where a shareholder brings an action in court for specific performance of the contract of purchase or terms of redemption, no order is to be made if the company shows that it could not pay the price out of distributable profits; (c) in a winding up the shareholder may enforce the terms of the contract or the terms for redemption, provided that the due date for purchase or redemption was before the date of the commencement of the winding up, unless it is shown that the company could not at any time between the due date for redemption or purchase and the commencement of the winding up, have paid for the shares out of distributable profits. In a winding up all other debts and liabilities of the company are to be paid in priority to the purchase price and any shareholder having, under the terms of issue of his shares, rights in priority to the right to a return of capital of the shareholder seeking to enforce a contract of purchase on terms of redemption, is also to receive amounts due to him in satisfaction of his rights in priority to the payment of the purchase of redemption price. Subject to that, the purchase or redemption price is to be paid in priority to amounts due to other members in the winding up. I beg to move.
§ Moved, That this House doth agree with the Commons in the said amendment.—(Lord Mackay of Clashfern.)
§ On Question, Motion agreed to.