Company law revision question and answer

The Articles of X Company Ltd provide that every member is entitled to one vote for each of the first ten shares and thereafter to one vote for each additional ten shares. Jane owns one hundred shares. She transfers ten of her shares to her nine nominees to increase her voting powering general meetings. Joseph, who is the chairman at the general meeting, refuses to accept the votes of Jane‟s nominees.

Advise Jane on the validity of the Chairman‟s action and her right as a member.

ANSWER
This problem is based on the right of a member to vote in Company general meetings. It is a trite principle of law that the right to vote is one of the proprietary rights of a member. It is one of the so-called individual membership rights of a member exercisable a member irrespective of the wishes of the majority and if the right is violated the member has a personal action for redress.
• In this case the articles of X Company are very clear on voting and the Chairman has declined to accept the votes of Jane nominees in violation of Jane‟s right to vote in a general meeting. Jane has a course of action to compel the Chairman to adept the votes of her nominees.
• My advise to Jane is to institute legal proceedings against the chairman to “compel him” to accept the votes, as was observed Sir George Jessel MR in Pender V. Lushington.
• My advise is based on the decision in Pender V. Lushington whose facts were substantially similar to those of this case

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