Re Consolidated Nickel Mines Ltd: ChD 1914

The articles of association said that general meetings were to be held once a year and that at the ordinary meeting in 1906, all directors should retire from office. . Articles 62, 101, 104 and 106 of the articles of association of the company provided:
’62. General meetings shall be held once in every year,
such time and place in England or in France as may be prescribed by the directors .
101. At the ordinary meeting in 1906 all the directors, and at the ordinary meeting in every subsequent year one-third of all the directors for the time being respectively, or if their number is not a multiple of three, then the number nearest to one-third, but not exceeding one-third, shall retire from office. A retiring director shall retain office until the dissolution of the meeting at which his successor is elected.
104. The company shall, at the meeting at which any directors retire in manner aforesaid, fill up the vacated office of each director by electing a person thereto, and without notice in that behalf may fill up any other vacancies, unless the meeting determine not to fill up such vacancies.
106. If at any meeting at which an election of directors ought to take place the places of the retiring directors, or some of them, are not filled up, the retiring directors, or such of them as have not had their places filled up, shall, if duly qualified, be deemed to have been re-elected, unless the meeting determine not to fill up such vacancies.’
The articles also provided for certain remuneration to the directors. No general meeting was held in 1906 or 1907, but the directors continued to act as such. The company was wound up in October 1910. The directors submitted proofs for their remuneration. The liquidator rejected the proofs wholly or in part on, inter alia, the ground that the directors should have retired under the Article 101 in 1906, and that it was their own fault that no general meeting was called in 1906 or 1907.
Held: The objection succeeded.
Sargant J said:
‘As to the two other directors, Steel and Phillips, there is another objection. By clause 62 of the articles of association and by statute (s. 49 of the Companies Act, 1862) the directors were bound to summon a general meeting of the company once in every calendar year, and article 101 provided that ‘At the ordinary meeting in 1906 all the directors . . shall retire from office.’ No ordinary meeting was held or called in 1906 or 1907, and the liquidator’s contention is that all the directors vacated office on December 31, 1906, which was the last day on which a meeting of the company for that year could have been held. That contention appears to me to be well founded.
A director on his appointment does not ordinarily step into an office which is perpetual unless terminated by some act, but into an office the holding of which is limited by the terms of the articles. The meaning of article 101 is that the holding of the office of director was only to last until the end of 1906, or until the earlier date on which the ordinary meeting for that year was held. In re Great Northern Salt and Chemical Works is merely a decision as to the construction to be placed on clause 62 of Table A to the Act of 1862. Moreover, article 106 in the present case shews that prima facie a retiring director vacated office, and is against the applicants’ contention. The duty of the directors was to call a meeting in 1906 and 1907, and they cannot take advantage of their own default in that respect and say that they still remain directors. Park v. Lawton is to some extent in point. There it was decided that the fact that no general meeting had been held in a year was no defence to a charge of not sending in certain returns required to be made within a certain time after the first or only general meeting in the year.’


Sargant J


[1914] 1 Ch 883


England and Wales

Cited by:

CitedRe New Cedos Engineering Company Ltd 1994
The company had two directors. On a death the inheritor of a members shares were entitled to have their shares registered. The majority shareholder died. The remaining board refused to register his widow as owner of the shares. She remarried, and . .
Lists of cited by and citing cases may be incomplete.


Updated: 27 April 2022; Ref: scu.634365