England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		21 November 2005

STICE RIMER :

Introduction

1. This claim was started by a Part 8 claim form dated 8 August 2005. The original claimant was State Street Nominees Limited ("SSN"). The defendant is Easier Plc ("the company"). On 23 September 2005, Mr Registrar Rawson made an order substituting Stephen Anthony Monnington as the sole claimant and an amended claim form was served on 29 September 2005. Mr Michael Green appeared for Mr Monnington and Ms Raquel Agnello for the company.
2. Chapter IV of the Companies Act 1985 ("the Act"), entitled "Meetings and Resolutions", comprises sections 366 to 382. Section 371, headed "Power of court to order meeting", provides as follows:

"(1) If for any reason it is impracticable to call a meeting of a company in any manner in which meetings of that company may be called, or to conduct the meeting in manner prescribed by the articles or this Act, the court may, either of its own motion or on the application –

(a) of any director of the company, or

(b) of any member of the company who would be entitled to vote at the meeting, order a meeting to be called, held and conducted in any manner the court thinks fit.

(2) Where such an order is made, the court may give such ancillary or consequential directions as it thinks expedient; and these may include a direction that one member of the company present in person or by proxy be deemed to constitute a meeting.

(3) A meeting called, held and conducted in accordance with an order under subsection (1) is deemed for all purposes a meeting of the company duly, called held and conducted."

3. The relief for which Mr Monnington asks is an order under that section convening an extraordinary general meeting of the company for the purpose of considering various resolutions directed at (i) removing the two current members of the board of directors, (ii) also removing any new appointees to the board who may be appointed prior to the holding of the meeting, and (iii) replacing all of them with two new directors. His case is that it has become "impracticable" for a meeting of the company to be called and conducted at which such resolutions can be considered and passed in manner prescribed by its articles and the Act and so this application has become necessary. The company opposes the application. It says that no case is made out for such an order and that, even if it is, the court should anyway refuse to exercise its discretion to make the order sought.

The facts

4. The background is explained in a witness statement of Neville Buch made on 5 August 2005 in support of the case of the original claimant, SSN. There has been no cross-examination of witnesses and, as I shall explain, some of what Mr Buch asserts has been disputed by the company's evidence, although most of it has not.
5. Mr Buch explained in his statement that he is the ultimate beneficiary of a trust owning 2.4m ordinary shares in the company, the trust's holding constituting some 9.77% of the issued shares. He described SSN as holding these shares as "nominee of the … trust" and said that the trustees (whom he did not identify expressly, but who may perhaps be the Hamilton Trust in Bermuda, to which he refers in one of his exhibited emails) had appointed him to act as their agent. The company's nominal capital is £375,000 divided into 37,500,000 ordinary 1p shares of which 24,566,800 have been issued and credited as fully paid up. The paid up capital is therefore £245,668.
6. The company was incorporated on 3 November 1999. Its business was that of an online estate agency. In February 2000, it became listed on the Alternative Investment Market ("AIM"). On 21 November 2000, its board announced that it intended to find a purchaser for its business. No purchaser was found and by the end of February 2001 the company had ceased trading and become a shell company holding cash of about £5.3m. The board's then view was that the company might be the subject of a reverse takeover or else put into members' voluntary liquidation. Neither event happened. With effect from 20 February 2003, its capital was reduced by the cancellation of its share premium account and capital redemption reserve. Its accounts for the year ended 31 December 2002 were published on 23 June 2003 and showed it as having net assets at the balance sheet date of some £5.379m, with some £5.39m cash held on deposit at the bank.
7. On 4 September 2003, it was announced that a shareholder had sold its 25.34% holding to Fulton Partners Limited ("FPL"), a private investment company incorporated in Nevis. The company's board resigned and FPL appointed two new directors to the board: Mr David Gough, who became chairman, and Mr Anthony Rosenthal. At the same time, the company's nominated adviser, KBC Peel Hunt, resigned and was replaced by Beaumont Cornish Limited. During the following year there were various changes to the board's constitution, with the end result that by 2005 there were just two directors, Mr Gough and Mr Andrew Milne.
8. In the meantime, in June 2004, the company had announced that it proposed to invest in a development site in Sussex. That was a change of investment strategy which, under AIM rules, required its shares to be suspended from trading. Nothing came of this plan either. No annual general meeting of the company was called during 2004 and its accounts for the year ended 31 December 2003 have never been published, although under AIM rules they were required to be published by 30 June 2004. On 6 October 2004, the company's auditors, Deloitte & Touche LLP, resigned. On 13 October 2004, its nominated adviser, Beaumont Cornish Limited, also resigned. On 15 November 2004, the London Stock Exchange cancelled the company's AIM listing because of its breach of AIM rules in failing to retain a nominated adviser.
9. When the auditors resigned they prepared a statement of reasons for circulation to the company's shareholders. The company refused to circulate it and made an unsuccessful application to the court to prevent its circulation, following which Deloittes lodged the statement with the registrar of companies. It stated that:

"During the course of our audit we have requested information regarding the company's investments. This information has not been forthcoming. In view of the significance of these investments we consider this limitation is likely to result in the need to issue a disclaimer of opinion on the financial statements."

10. Mr Buch explained that by then the trustees of his trust were becoming increasingly concerned about the company's financial position and what had been done with its cash. I infer that it was Mr Buch rather than the trustees who was really experiencing the concern. Mr Buch met Mr Gough on 11 November 2004, who told him that half the cash that was on deposit in September 2003 (when Mr Gough became a director) had been invested in unquoted securities and that the company had subsequently suffered significant costs on its abortive proposal to venture into property. Mr Gough also explained that the company's day to day management was in the hands of Mr Brian Copsey, who was not a director.
11. Mr Buch did some research on Mr Copsey and explained in his evidence that he had been a director of Greenhills plc from 1994 to 2001, a company which, Mr Buch says, was publicly censured by the London Stock Exchange in 1997: its failure to make timely and appropriate announcements or disclosures in respect of several matters had given a significantly misleading impression about its financial position. Mr Buch adds, however, that Mr Copsey was not personally censured. Greenhills subsequently went into administrative receivership and then into liquidation. Mr Buch's evidence is that Mr Copsey is involved with FPL and that Mr Copsey told him that he was the company's general manager.
12. Mr Buch says that the trustees had become so frustrated with the lack of information about the company that steps were taken with a view to having its board removed. On 5 May 2005, SSN and three other shareholders (the four holding between them more than 10% of the company's issued shares) requisitioned the directors pursuant to section 368 of the Act to convene an extraordinary general meeting of the company at which resolutions would be proposed for the removal of Mr Gough and Mr Milne as directors and the appointment of Mr Buch and Mr Gilbert Chalk in their place. In anticipation of the need to convene the EGM themselves, the four shareholders also served the company and its registrars with a notice under section 356 for a copy of the register of members and a copy was duly obtained.
13. In breach of section 368(1), the directors ignored the requisition and took no steps to convene a meeting. After the expiry of 21 days from the deposit of the requisition (see section 368(4)), SSN itself took steps to convene a meeting. The company's members were given notice on 27 May 2005 that it would be held on 23 June 2005 at 11.00 am at the offices of KBC Peel Hunt. Four resolutions were to be proposed: (1) the removal of Mr Gough as a director; (2) the removal of Mr Milne as a director; (3) subject to resolutions (1) and (2) being passed, the appointment of Mr Buch as a director; and (4) subject to resolutions (1) and (2) being passed, the appointment of Mr Chalk as a director. The notices convening that meeting were accompanied by a circular explaining the reasons for the resolutions, the essence of which I have explained in setting out the background.
14. During the week before the meeting, Mr Buch and Mr Chalk met Mr Copsey. Mr Copsey said that a lawyer on behalf of FPL would be putting forward an offer to acquire all the company's shares for 22p a share; that Pershing plc, a large shareholder (it held, or at least now holds, some 34% of the shares), would not be able to vote at the meeting because it had not exercised a lien properly (which Mr Buch did not understand); that the meeting would be invalid because SSN had not sent proxies or notifications to the "shareholders underlying Pershing's holding"; that as an alternative to the proposed cash offer of 22p per share, a new company would be formed to acquire the company's assets; and that anyway Mr Gough and Mr Milne would be resigning as directors and would be replaced by Mr Copsey and Mr John Strachan. Mr Copsey asked Mr Buch if he and Mr Chalk would be prepared to join them on the board. Mr Buch says that he "established [that this] would be against the trustees' wishes."
15. It was apparent to Mr Buch and Mr Chalk that Mr Copsey's statement about the proposal to change the board at the last minute would, if implemented, frustrate the putting of the proposed resolutions. They realised that it might be a clever ruse to avoid the resolutions being passed and render worthless the proxy votes that were in favour of the resolutions. This was because, if Messrs Gough and Milne resigned before the meeting, they could not be removed as directors pursuant to resolutions (1) and (2); and nor in that event could resolutions (3) and (4) be passed because they were conditional on the prior passing of resolutions (1) and (2). The result would be that, despite the convening of the meeting and whatever the voting intentions of the members, the board would still comprise two directors who would be nominees of FPL.
16. As to the board's power to achieve this result, article 82 of the company's articles, headed "Power of the Board to appoint Directors", provides:

"Without prejudice to the power of the Company to appoint any person to be a Director pursuant to these Articles the Board shall have power at any time to appoint any person who is willing to act as a Director, either to fill a vacancy or as an addition to the existing Board, but the total number of Directors shall not exceed the maximum number fixed in accordance with these Articles. Any Director so appointed shall hold office only until the annual general meeting of the Company next following such appointment and shall then be eligible for re-election but shall not be taken into account in determining the number of Directors who are to retire by rotation at that meeting. If not re-appointed at such annual general meeting, he shall vacate office at the conclusion thereof."

17. Article 80, headed "Number of Directors", provides:

"Unless and until otherwise determined by the Company by ordinary resolution the number of Directors (other than any alternate Directors) shall not be less than 2 nor more than 10."

18. Mr Buch and Mr Chalk decided not to take up Mr Copsey's proposal that they should join him and Mr Strachan on the board but resolved to wait and see what happened. Mr Buch said in his evidence that they were quite clear that "the intention of those voting by proxy in favour of the resolutions were to remove the current board and the control of FPL and for myself and Mr Chalk to be the only directors", which is perhaps a statement of the fairly obvious: that is what the resolutions were directed at achieving.
19. The proxy votes had to be in 48 hours before the meeting. Mr Buch says that the weight of the proxy voting was in support of each of the resolutions. The proxy votes in favour totalled some 7.6m and those against (mainly from nominees of FPL) totalled some 6.5m. He says the Pershing shares were not voted at all. On the morning of 23 June 2005, shortly before the meeting, Mr Copsey and Mr Strachan arrived bearing board resolutions of the previous night, evidencing the appointment to the board of Messrs Copsey and Strachan and the resignation of Messrs Gough and Milne. The meeting was then proceeded with, Mr Copsey taking the chair. He explained that he and Mr Strachan had joined the board the night before and that Mr Gough had been through a harrowing and difficult time. He refused, despite being pressed, to give a reason for the board changes, although he denied it was to frustrate the business of the meeting. He announced that within three weeks FPL would offer the shareholders 22p a share for their shares, alternatively that some different takeover of the company would be proposed (Mr Buch exhibited minutes of the meeting, which show that the discussion ranged more widely than the summary in his evidence).
20. On 28 June 2005, Mr Buch and Mr van der Merwe of Pershing met Mr Copsey. Mr Copsey said that within two days he would be putting out a notice complying with the Takeover Code of an approach which might lead to an offer to shareholders. Mr Buch told him that, if no such offer was made by 8 July 2005, alternative action would be considered by the shareholders. Mr van der Merwe told Mr Copsey that Pershing had exercised its lien over the 34% holding, to which it was now absolutely and beneficially entitled.
21. The deadline of 8 July 2005 passed without anything happening. On 11 July 2005, Mr Copsey sent Mr Buch an email (headed "[FPL] takeover offer") asking for two more days within which to make the offer and a further email saying that he would send some letters to him later that day asking for certain undertakings. Mr Buch received nothing further that day and no offer was made within the following two days. Between 14 and 20 July 2005, there was a further exchange of emails. Mr Copsey repeated FPL's intention to make an offer of 22p per share to all shareholders, although he wanted to do a deal with SSN and Pershing (who held between them some 44% of the shares) before making the same offer to other shareholders. Mr Buch said it was made clear that an offer of 22p per share was acceptable, but only if made to all shareholders. He explained in his evidence that he and Mr van der Merwe were concerned that Mr Copsey and FPL might simply want to buy SSN's and Pershing's shares and take control of the company to the detriment of the other shareholders. The 22p offer valued the company at about £5.4m.
22. Mr Buch says that Mr Copsey continued to prevaricate and that on 29 July 2005 he told Mr Buch that FPL's original backers had withdrawn and he was lining up new financiers, who would be ready to proceed by 3 August 2005. That date passed and nothing happened. By then Mr Buch had lost confidence in Mr Copsey's ability to deliver, which led to the commencement of the present proceedings on 8 August 2005. The proceedings
23. The relief sought by SSN was an order under section 371 of the Act convening a meeting of the company for the purpose of considering and, if thought fit, passing five resolutions: (1) the removal of Mr Copsey as a director; (2) the removal of Mr Strachan as a director; (3) the removal of any new directors appointed by the board at any time before the holding of the convened meeting; (4) subject to resolutions (1) and (2) and, if necessary, (3) being passed, the appointment of Mr Buch as a director; and (5) subject to resolutions (1) and (2) and, if necessary, (3) being passed, the appointment of Mr Chalk as a director. Mr Buch said that Mr van der Merwe of Pershing (with 34% of the shares) supported the application and he also said that sufficient other shareholders had indicated like support to suggest that the votes in favour of the five resolutions would exceed 50%.
24. Mr Buch recognised that, without assistance from the court, it would be open to at least 10% of the shareholders to requisition the holding of another meeting, at which resolutions for the removal of the current board and its replacement by Messrs Buch and Chalk could be proposed. But as the object of the exercise is to establish a board including no FPL nominees, he also foresaw that the achievement of that end would, or might, again be frustrated by the appointment shortly before the meeting of new FPL nominees to the board, followed by the resignation of the current board. He recognised also that it would not be open to the requisitionists to pre-empt any such tactic by also proposing a resolution for the removal of any such – as yet unknown – last minute appointees, since it would not in practice be possible to give the company the requisite 28-day special notice of intention to remove them as directors. Mr Buch recognises that, if no such prior notice were given, any such resolution would not be effective. The provisions relevant to the removal of directors are in sections 303, 304 and 379 of the Act, which provide, so far as material, as follows:

"303 Resolution to remove director

(1) A company may by ordinary resolution remove a director before the expiration of his period of office, notwithstanding anything in the articles or in any agreement between it and him.

(2) Special notice is required of a resolution to remove a director under this section or to appoint somebody instead of a director so removed at the meeting at which he is removed. …

304 Director's right to protest removal

(1) On receipt of notice of an intended resolution to remove a director under section 303, the company shall forthwith send a copy of the notice to the director concerned; and he (whether or not a member of the company) is entitled to be heard on the resolution at the meeting. …

379 Resolution requiring special notice

(1) Where by any provision of this Act special notice is required of a resolution, the resolution is not effective unless notice of the intention to move it has been given to the company at least 28 days before the meeting at which it is moved. …

25. I should also refer to article 88, which mirrors the provisions of sections 303 and 379 by providing:

88. Removal by ordinary resolution

The Company may by ordinary resolution of which special notice has been given in accordance with section 379 of the Act remove any Director before the expiration of his period of office notwithstanding anything in these Articles or in any agreement between the Company and such Director and, without prejudice to any claim for damages which he may have for breach of any contract of service between him and the Company, may (subject to these Articles) by ordinary resolution appoint another person who is willing to act to be a Director in his place. Any person so appointed shall be treated, for the purposes of determining the time at which he or any other Director is to retire by rotation, as if he had become a Director on the day on which the person in whose place he is appointed was last appointed or re-appointed a Director. In default of such appointment the vacancy arising upon the removal of a Director from office may be filled by a casual vacancy."

26. In the circumstances, and with these provisions in mind, SSN's application to the court was directed at obtaining the court's assistance in achieving the end which, so Mr Buch asserted, a majority of the company's members want: namely, the removal of all FPL nominees from the board and their replacement by himself and Mr Chalk. The heart of the relief sought in the application (although the application does not expressly flag it up) is, or can be characterised as, an order whose substantive intended effect is to disapply section 303(2) and article 88 in relation to any last minute new appointees to the board so that resolution (3) may be validly considered and passed even though no special notice of intention to remove them will previously have been given to the company.
27. In the event, SSN's status as a claimant was short lived. On 22 September 2005, it issued an application asking for an order that it cease to be a party and that Mr Monnington be substituted in its place as sole claimant. The grounds summarised in the application notice were that Mr Monnington was also a member of the company, who was similarly entitled to apply for the relief sought under section 371 and that SSN did not wish to continue to be a party. The grounds were briefly expanded in Mr Buch's witness statement of 22 September 2005. He there described his interest in the SSN shares in terms which perhaps differ slightly from those in his first statement. He referred to himself as being "the ultimate beneficial owner" of the SSN's 9.77% holding, but also described the shares as "my shares", which he says were held by SSN as nominee for the N.D. Buch Life Interest Settlement, a settlement which he says is "operated" by Deutsche Bank. He also explained that the claim form dated 8 August 2005 was issued on his instructions but that SSN had since refused to continue with or participate in the proceedings. In those circumstances he had sought to have the SSN holding transferred to another nominee, but could not do so because the suspension of the company's shares precluded their registration in the name of any transferee. However, Mr Monnington had then agreed to lend his name to the continuation of the proceedings, he being the holder of 125,000 shares in the company – a 0.5% holding.
28. The inference, therefore, is that these proceedings were issued without the authority or knowledge of SSN and that the whole exercise was an exclusively Buch operation. But no point turns on that and, as I have said, on 23 September 2005 Mr Registrar Rawson ordered that Mr Monnington be substituted as sole claimant and he also ordered that an appropriately amended claim form be served on the company by 28 September 2005.
29. On 7 October 2005, Etherton J gave directions for evidence, which resulted in the making by Mr Copsey on 13 October 2005 of a witness statement in answer to the claim. He explained that he is the chairman of the company (he was so appointed on 22 June 2005, the day before the meeting) and is the controlling shareholder of FPL. He asserted that since FPL had acquired its stake in the company in September 2003 Mr Buch had resorted to a series of tactics directed at forcing FPL to buy his stake, indicating on several occasions that he would accept 22p per share. He says Mr Buch had made it clear that, absent an acceptable offer, his desire was to liquidate the company and return its funds to shareholders. Mr Copsey further says that he and Mr Strachan were appointed to the company's board specifically to allow FPL to prepare its bid for the shares in the company and to put an end to any plans that its former directors had of venturing into property development and other activities; and he says that the company's business has since been effectively dormant awaiting FPL's offer. He says that, by the time of the meeting in June 2005, FPL had arranged funding for a buy out at 22p per share, but says that the funders then withdrew following damaging press coverage that he believes that Mr Buch had initiated. He says that FPL:

"… is now in a position of completing other transactions to accumulate over £4.3 million in cash (sufficient for a Rule 9 bid) and complete the takeover as contemplated last June although given adverse publicity that has accrued it has taken more months than expected."

30. Mr Copsey questioned Mr Buch's assertion that there were sufficient proxies to ensure the passing of the resolutions at the meeting in June. He said that it was dependent on including votes in respect of the Pershing shares, although Mr Buch had asserted the contrary. Since, however, Mr Copsey asserts that Pershing exercised votes in respect of some 8.4m shares, whereas Mr Buch claimed that only some 7.6m proxy votes were in favour of the resolutions, Mr Copsey's evidence on this particular point is not obviously reliable. Mr Copsey also asserted that, following the issue of notices under section 212 of the Act, the Pershing holding was anyway disenfranchised on 10 November 2004 and remains disenfranchised. He also advanced certain arguments as to why he claims that the present application is misconceived, which it is unnecessary to repeat, adding that FPL would not make any takeover offer if he and Mr Strachan are removed from the board and replaced by Messrs Buch and Chalk. He says that the best solution for all shareholders will be for FPL to be given more time (he suggests a matter of weeks) in which to bid for all the shares.

The issues

31. As I have said, neither side sought to cross-examine anyone and there is a conflict on the witness statements as to whether, accepting that Pershing is in what I might call the Buch/Monnington camp, it is in a position to vote its shares at any meeting that the court might be disposed to order to be convened. If it is not, then there is in my view no solid evidence before the court that a majority of the company's shareholders supports the passing of the five resolutions that Mr Monnington wishes to be put to a meeting.
32. Mr Green submitted, however, that it is not essential to Mr Monnington's case that I should be satisfied that a majority does support the five resolutions. His basic point is that the evidence shows that there is at least a current of shareholder support for the removal from the board of all FPL appointees and their replacement by Messrs Buch and Chalk. He says that it is the right of the majority of the company's shareholders to determine the membership of the board. All that is being sought by the present application is the opportunity for such a majority to cast its votes on that topic at a duly constituted meeting of the company. If no majority vote in support of the Monnington resolutions is achieved, then so be it: at least the shareholders will have been given the opportunity so to vote and nothing will have been lost. If such a majority vote is achieved, then that will reflect the views of the company in accordance with its constitution.
33. Mr Green submitted further that the assistance of the court is necessary to give the majority that opportunity. He recognises that a meeting could be convened without an order of the court but submitted that the history of this matter suggests that there is a likelihood that the current board would again frustrate the majority's wish to oust all FPL nominees from the board: it could once again exercise its right under article 82 to appoint new FPL nominees as directors shortly before the holding of the meeting. It would not then be practicable to give special notice to the company of resolutions to remove such directors. Thus, whatever the views of the majority at the meeting, the outcome would be a board still comprised (at least in part) of FPL nominees. The point of the present application is, therefore, to ask the court not just to order the convening of the requested meeting but also to make an order disapplying the provisions of section 303(2) of the Act and article 88 in relation to any directors who may be appointed by the board prior to the holding of the meeting.
34. Mr Green advanced his submissions in support of the claimed order very persuasively. I am not, however, satisfied that I either can or should make the order sought. First, I am not satisfied that I have any jurisdiction to do so. Second, if wrong on that, I am not satisfied that it would be right as a matter of discretion to do so.
35. As to the first point, there are two alternative conditions to the arising of the court's jurisdiction to make an order under section 371: (i) that it is "impracticable" to call a meeting of the company in any manner in which meetings of it may be called; and/or (ii) that it is "impracticable" to conduct the meeting in manner prescribed by the articles or the Act. If neither condition is satisfied, the court has no jurisdiction to make an order under the section. In my judgment, neither condition is satisfied.
36. First, the evidence shows that it is not impracticable to call a meeting of the company. Mr Buch has explained how SSN and its three co-shareholders requisitioned and subsequently convened a meeting of the company on 23 June 2005 at which various resolutions were to be proposed and there is no reason to believe that that exercise could not be repeated. Mr Buch's evidence puts Mr Monnington out of court as regards any suggestion that it is impracticable to call a meeting of the company in any manner in which meetings may be called, nor did Mr Green submit otherwise.
37. Secondly, nor does the evidence show that it is impracticable to conduct any such meeting in manner prescribed by the articles or the Act. The most usual situation in which it will be so impracticable is because, although a meeting can be duly called, it is known in advance that there will be no quorum at it necessary for the conduct of business (see Union Music Ltd and another v. Watson and another [2003] 1 BCLC 453, at paragraph 32 and following, for a recent review of the section 371 jurisdiction). That is not this case, since once again the evidence shows that there will be no difficulty in sufficient members attending the meeting so as to constitute a quorum.
38. Mr Green does not question that either. His submission is that the reason why it will nevertheless be impracticable to conduct (in the said prescribed manner) any meeting convened out of court to consider the five proposed resolutions is that any purported passing of resolution (3) will be likely to be the subject of challenge for want of proper prior compliance with the special notice requirements of section 303(2) and article 88. That potential problem will therefore make it impracticable to conduct a meeting whose business is intended to be directed to a determination of whether or not the board should be comprised exclusively of members other than FPL nominees. Even if that is what the majority of shareholders voting at the meeting may want, they will be unable to achieve it by the casting of their votes. In these circumstances, it is Mr Green's submission that the court can and should (a) conclude that the second condition of its section 371 jurisdiction has been satisfied, and (b) exercise that jurisdiction by (in effect) dispensing with the special notice requirements of section 303(2) of the Act and of article 88 in relation to any last minute appointees to the board.
39. The difficulty with that argument is that it fails to address sufficient consideration to why it is that the perceived problem may arise. If it does arise, it will be because of what will have been, on the face of it, a valid exercise by the board of its right under article 82 to appoint additional directors. That is a provision in the articles by which all shareholders in the Buch/Monnington camp are treated as bound. Any director appointed by the current board under article 82 is as much entitled to the protection of sections 303(2) and 304, and also of article 88, as any other director of the company. I am far from satisfied that it would be appropriate for the court on an application under the procedural provisions of section 371 to make an order depriving a duly appointed director of the substantive protection afforded to him by those provisions.
40. In my judgment, however, this application does not even reach the point at which the court needs to consider whether it can or should make any such order. That is because the evidence fails to prove any case to the effect that it is impracticable "to conduct the meeting in manner prescribed by the articles or [the] Act,…." There is nothing "impracticable" about calling and conducting in the prescribed manner a meeting for the removal from the board of Messrs Copsey and Strachan and their replacement by Messrs Buch and Chalk. Nor is there anything "impracticable" about the subsequent calling and conducting in the prescribed manner of a meeting for the removal from the board of any directors who may have been appointed to the board shortly before the prior meeting, although to do so it will be necessary for any further meeting convened for that purpose to be preceded by the proper giving of special notice of the proposed resolutions under sections 303(2) and article 88. Mr Monnington's case is, however, that the court's jurisdiction under section 371 arises because it is "impracticable" by reason of article 88 and the Act to remove any such last-minute appointees without first giving special notice of the relevant resolutions to the company. I agree that it is so impracticable. But that is because of the provisions of the articles and the Act by which the company is governed. The problem with Mr Monnington's application is that he is not attempting to invoke the court's section 371 jurisdiction because it is impracticable at one or more meetings to remove any current or future board members "in manner prescribed by the articles or this Act"; he is invoking it because he wants to achieve the transaction of such business at a single meeting and otherwise than in such manner. His case therefore fails to establish any ground sufficient to give the court jurisdiction under section 371.
41. The real complaint underlying Mr Monnington's application is the board's right under article 82 to appoint additional directors; and the substance of it can therefore also be regarded as directed at negativing that right. He (a mere 0.5% shareholder) is therefore attempting to invoke section 371 as a means of obtaining a court-assisted alteration of article 82, whereas the articles can only be altered by a special resolution. If Mr Monnington wishes to try to drum up support for the requisitioning of a meeting at which a special resolution for the alteration of article 82 is to be proposed, he is at liberty to do so although the evidence suggests that it would be likely to be a difficult enterprise. He cannot, however, use section 371 as an attempted short-cut to a rewriting of the company's constitution.
42. I should add that in support of his argument Mr Green placed reliance on a decision of my own under section 371, Re British Union for the Abolition of Vivisection [1995] 2 BCLC 1. I derive no assistance from that decision for present purposes. In that case I was satisfied, on its extreme and unusual facts, that it was impracticable to call and conduct the proposed meeting of the BUAV either in manner prescribed by the Act or the articles or at all (see [1995] 2 BCLC 1, at 15). I was, therefore, satisfied that the jurisdiction to make the order sought had arisen. In the present case, for reasons given, I am not so satisfied.
43. I conclude that I have no jurisdiction to make the order. If I am wrong on that, I would anyway refuse to make it as a matter of discretion. Since its substance is, in my view, directed at a court-assisted alteration of article 82, I consider that the court should decline to lend its assistance to such an end at the suit of a mere 0.5% shareholder. In any event, I fail to see why the court should lend its assistance to the Buch/Monnington camp's wish to assume exclusive control of the board. I accept that Mr Buch, and perhaps others, have a real concern as to what has been happening to the company's assets and I quite understand that they want to find out what has been going on. I accept also that there is apparent justification for that concern. However, it is relevant to remember that Mr Copsey offered Mr Buch and Mr Chalk seats on the board, an offer which, had they taken it up, would have enabled them to find out all they want. Nothing, however, less than exclusive board control was good enough for them and so they turned it down. On the face of it, that was unreasonable and I see no good reason for making an order of the unusual nature sought by the Buch/Monnington camp in order to support what appears to have been an unreasonable stance. It is, in principle, anyway also still open to them to take steps out of court directed at having their nominees appointed to the board. I dismiss Mr Monnington's claim.