Where provisions were ambiguous a construction which produced reasonable business efficacy was preferred over one which produced an unreasonable result. Jenkins LJ said: ‘I think that the articles of association of the company should be regarded as a business document and should be construed so as to give them reasonable business efficacy, where a construction tending to that result is admissible on the language of the articles, in preference to a result which would or might prove unworkable.’
As to the particular clause he said; ‘What, to my mind, concludes the matter is the circumstance that the article with which we are here concerned, article 65, as adopted by special resolution, provides as follows: ‘At any general meeting of the company a resolution put to the vote of the meeting shall be decided on a show of hands unless before or upon the declaration of the result of the show of hands a poll be demanded’. It is to be observed that a poll can be demanded before the show of hands as well as upon the declaration of the results of the show of hands. The language is capable of reading: ‘Unless before the declaration of the result of the show of hands or upon the declaration of the result of the show of hands,’ and then it could conceivably be argued that the demand could not be made before the declaration of the result of the show of hands if there was no show of hands at all. That would be an inconvenient construction, which would compel going through the formality of a show of hands, not for the purpose of obtaining the result of that vote, but merely so that a demand for a poll could be made before the declaration of the result. I think the article should read, as suggested by my brother Romer in the course of the argument, in this way: ‘At any general meeting of the company a resolution put to the vote of the meeting shall be decided on a show of hands unless before (comma) or upon the declaration of the result of (comma) the show of hands a poll be demanded.’ That makes it clear that a poll can be demanded without going through the formality of a show of hands. That question, therefore, is, in my judgment, out of the way.’
Judges:
Jenkins LJ, Romer LJ and Ormerod LJ
Citations:
[1959] Ch 199
Jurisdiction:
England and Wales
Cited by:
Cited – Attorney General of Belize and others v Belize Telecom Ltd and Another PC 18-Mar-2009
(Belize) A company had been formed to manage telecommunications in Belize. The parties disputed the interpretation of its articles. Shares had been sold, but the company was structured so as to leave a degree of control with the government. It was . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 18 June 2022; Ref: scu.375100