Grant v John Grant & Sons Pty Ltd

These proceedings were taken "pursuant to article 70". But art. 70 refers only to the powers of the meeting summoned by a permanent director after a governing director had ceased to be a governing director. Such a meeting had been held on 17th December 1948. Article 70 plainly had no application to the circumstances which existed in February 1949.

Article 86 is as follows: - "The Company may from time to time in general meeting by extraordinary resolution increase or reduce the number of directors and determine in what rotation such increased or reduced number shall go out of office."

Roper C.J. in Eq. held that this article applied not merely where the minimum or maximum number of directors was altered, but also where it was determined to appoint an additional director so as to increase the number of directors actually in office, even though the maximum number permitted by the articles of association was not increased. As W. A. Grant's daughters were appointed by ordinary resolutions their appointments were held to be void. This view was based upon Worcester Corsetry Ltd. v. Witting [1] . That case did decide that under an article in the same terms as art. 86 in the present case (except that an extraordinary resolution was not required) the company could appoint a person as director, although the directors also had powers to appoint directors to fill casual vacancies (as in the present case - art. 87) and to appoint an additional director to hold office until the next ordinary general meeting of the company. The point of the decision is that the articles conferring power upon the directors to appoint a director in certain cases did not deprive the company of its "inherent power to nominate and appoint its own directors" [2] - per Lawrence L.J. No such question arises in the present case. But it is true that the article corresponding to art. 86 was interpreted as authorizing not only the alteration of the maximum and minimum number of directors but also the actual additional appointment of a person as a director. But the reason for this conclusion was found in the fact clearly stated by Slesser L.J. [3] that there was another article (art. 12) which "contained within itself all the machinery for fixing the maximum and minimum number of directors." Thus if any effect was to be given to the article corresponding to art. 86 it was necessary to interpret it as authorizing the actual appointment of additional directors. But there is no such other article in the present case. On the contrary, art. 71 fixes a minimum and maximum number of directors and does not contain any machinery for altering that number. Article 71 is as follows: - "Whilst and whenever there shall be directors of the Company in office and no Governing Director the following provision shall have effect that is to say: - The directors shall not be less than two nor more than five in number "