9911796707
TMI Blog1940 (3) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... etitions is in this form : The first paragraph is, "That your Petitioner," that is Mr. Maurice Gordon Liverman, "may be relieved by this Honourable Court pursuant to Section 372 of the Companies Act 1929 from any liabilities for fines or penalties which he may have incurred under Section 141 of this said Act " that is the Companies Act, 1929 "or otherwise by reason of his negligence default breach of duty or breach of trust in having acted without being qualified and while disqualified as a director of the company". The second paragraph is: "That your Petitioner may also be relieved by this Honourable Court pursuant to the said section from any liability which he may be under to the company in respect of his negligence defualt breach of dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so entitled. On April 12, 1937, an order was made confirming the reduction of the capital of "Gilt Edge" from 22,850 to 7,381 6s. 8d., a very drastic reduction. That order and the minute approved by the Court were subsequently registered under Section 68 of the Companies Act, 1929. The result of the registration of that order and the minute was that the petitioners' ten shares of 1 each became 200 shares of 4d. each and instead of being of the nominal value of 10 they becanie of the nominal value of 3 6s. 8d. The articles of "Gilt Edge" require shares of the nominal value of 10 to be held by each director as director's qualification. That being the case, as from the registration of the order confirming the reduction and the mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok effect, that is to say, from the date of the registration of the order confirming the reduction and the minute. On December 13, 1939, the summons at Bow Street Police Court was restored for January 8, 1940, and on January 4, 1940, the petitioners presented these petitions, praying for that relief which I have already read. On January 8, 1940, the summonses at Bow Street were again adjourned pending the hearing of these petitions. Article 13 of "Gilt Edge" provides: "The qualification of a director shall be the holding of shares of the company of the aggregate nominal value of at least 10, and it shall be his duty to comply with the provisions of Section 73 of the Companies (Consolidation) Act, 1908. A director may act before acquiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Maugham, J., in Batrie Siaines Linoleum, Ltd., In re, that the phrase "any claim .in respect of any negligence, default, breach of duty or breach of trust" in Section 372(2) of the Act of 1929 includes proceedings against the petitioners under Section 141(5), and so includes the proceedings against the petitioners which were commenced last October at Bow Street Police Court, as in that case the learned Judge gave relief under Section 372(2) from prospective liability to fines and penalties under Section 141(5). But it seems to me that Section 372(1) makes the Court which hears the case the only Court which has jurisdiction to give relief in respect of proceedings which have already been commenced. Sub-section (2), on the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t sub-section relieving the petitioners from any apprehended liability. It has been suggested here that the last paragraph of Maugham, J.'s judgment in the case to which I have referred shows that I ought not to make any order where the company is unwilling that an order should be made. I think that neither counsel who appear for "Gilt Edge" now contend that that suggestion is justified. It seems to me that what Maugham, J., is referring to in the last paragraph of his judgment is the importance of the Court having information as to the views of the persons concerned before it comes to a decision as to giving relief under sub-section (2). It does not follow, I think, that because the shareholders oppose the application, therefore the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their obtaining relief under Section 372. I think that in a sense it may be that they were negligent, and no doubt, without knowing it, they committed a breach of duty in continuing to act as directors when they were no longer qualified. But this was a purely technical defect which would, if it had been realised, have been put right at once, because they were merely representatives of "Lancegaye" which held the shares in "Gilt Edge", and could have transferred sufficient of the 4d. shares to meet the qualification; and I have no doubt that "Lancegaye" would have done so if it had realised the position. Having regard to that fact and to the fact that their not holding shares of the nominal value of 10 caused "Gilt Edge" no loss and really ..... X X X X Extracts X X X X X X X X Extracts X X X X
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