39 HNA's submission to the effect that the prima facie position is that preference shareholders are entitled to vote at general meetings of the company cannot stand with the evident intention of para 2 to establish a regime under which the general position is that a holder of preference shares has no right to vote at a general meeting of the company. As a matter of logic, HNA's contention cannot be accepted. If it were accepted, it would enable HNA to rely upon the exception to a general denial of any voting right to repeal the general rule.
40 Mr Leeming emphasized that paragraph 2 contemplates that holders of preference shares may vote at general meetings of the company. His point was that paragraph 2 is plainly concerned with the right to vote at a general meeting rather than at class meetings. Mr Leeming's point may be accepted as far as it goes: the problem is that it does not go very far towards establishing the construction of paragraph 2(a)(ii) for which he contends. Indeed, it goes no way towards resolving the central difficulty with accepting his argument, namely that it would allow the exception in paragraph 2(a)(ii) to overwhelm the general rule.
41 There is a contextual argument which may also support the plain meaning of the text of paragraph 2(a)(ii). In the context of Schedule 14 Part C, paragraph 2 is the only provision concerned with the right to vote. The other provisions of Schedule 14 Part C concern other rights, such as the right to dividends and redemption (paragraphs 3, 4 and 7), the protection of the rights of preference shareholders against variation of the rights attaching to their shares without their consent (paragraph 5), the non-convertible nature of preference shares (paragraph 6) and the transfer of preference shares. Within that context, it may be argued that where paragraph 2(a)(ii) refers to "rights attached to a Preference Share" it is not self-referential but rather is outward looking and is referring to rights dealt with in Schedule 14 Part C and elsewhere, other than the right to vote. Paragraph 2 can thus be seen, in its context, as making exhaustive provision in respect of a preference shareholder's voting rights on a range of subjects which did not include voting rights on the matters which are the subject of the proposed resolution.
42 In giving a commercial contract a business like interpretation, it is necessary to consider the language used by the parties, the circumstances addressed by the contract and the objects that it is intended to secure: International Air Transport Association v Ansett Australia Holdings Limited (2008) 234 CLR 151 at 160 [8] per Gleeson CJ; see too at 174 [53] per Gummow, Hayne, Heydon, Crennan and Kiefel JJ. A corporate constitution has the effect of a contract between the company and each of its members, the company and each director and secretary, as well as the members amongst themselves (s 140(1) of the Act). The range of surrounding circumstances available as aids to the construction of such a contract is perhaps more limited than in other cases. This is because constitutions, and replaceable rules, can be amended at different times and in different circumstances. In addition, the members who are the corporators at particular times may change. These factors suggest that ordinarily primacy must be given to the objective intention discernable from the language in which the constitution is expressed rather than to other features of the surrounding matrix of fact in which its provisions may have been made.
43 Nevertheless, we consider that para 2, read as a whole and in the context of Schedule 14 Part C, is intended to serve the commercial purpose of preserving the existing rights of holders of preference shares against erosion without their having a say in the matter. It is far from apparent that it is concerned to allow them to vote to achieve an expansion of their existing rights. In this regard, paragraphs 2(a)(i) and 2(b) expressly permit preference shareholders to vote on proposals to reduce the share capital of the RILAs, and which might affect their ability to make good the entitlements of preferred shareholders. Paragraph 2(a)(iii) permits preference shareholders to vote on a proposal to issue other preference shares. By clause 64.3 and para 5 of the Schedule the issue of other preference shares is taken to be a variation of the rights attached to the preference shares. These specific provisions suggest that para 2(a)(ii) has a protective role rather than the expansionary potential for which HNA contends. The specific provisions of clause 64.3 and para 5 would hardly be necessary if paragraph 2(a)(ii) had the broader operation for which HNA contends.
44 Mr Leeming noted, as did the learned primary judge at [23], that if the first resolution were to be passed, the rights attached to the B class preference shares would be diminished in that the holders of B class preference shares would not then be entitled to vote, either on a proposal to reduce the share capital (if the reduction was no more than a return of capital to the ordinary shareholders of an amount not exceeding the paid up capital on those shares) or on a proposal to approve the terms of a buy back agreement relating to only one or more ordinary shares for an aggregate consideration of no more than the paid up capital on those shares. The learned primary judge said:
If that were the extent of the proposal, it is clear enough that the proposal would be one that affects rights attached to the B Class preference shares within the meaning of para 2(a)(ii) of Part C of Schedule 14 as it stands. That is to say, it would affect the right to vote on a proposal to reduce capital or to approve a buy back agreement.
However, the proposal … goes well beyond diminishing or reducing particular rights attached to the preference shares. Further, it goes beyond merely altering or affecting existing rights. The question is whether a proposal that creates additional rights for holders of B Class preference shares is one that affects rights attached to themwithin the meaning of paragraph 2(a)(ii) of Part C.
(Emphasis in the original).
45 In this Court, Mr Leeming was disposed to argue that because aspects of the proposed resolution diminish existing rights attached to the preference shares, the resolution was within paragraph 2(a)(ii) even on the construction propounded by Mr Robb. But to say that is akin to saying that the Trojan Horse was not a wooden horse because it also contained several Greeks. Because the proposed resolution seeks to add to the existing rights of preference shareholders, it does not come within the exception to the general rule carved out by paragraph 2(a)(ii).
46 Mr Leeming argued that, on the construction of paragraph 2(a)(ii) propounded by Mr Robb, preference shareholders could have rights forced on them against their will. One answer to this objection to the interpretation advanced by Mr Robb is that the objection is so far-fetched and fanciful that it is quite unlikely to have been addressed by those who drafted Schedule 14 Part C. Another answer is that, to the extent that rights are forced upon preference shareholders, it remains a matter for them whether they seek to exercise those rights.
47 HNA's final argument is to the effect that preference shareholders currently enjoy the right to vote at a general meeting notwithstanding that this right is qualified in such a way as to be currently dormant. It may be accepted, as Mr Leeming says, that paragraph 2(c) permits preference shareholders to vote during a period in which dividends on the preference shares are in arrears, which is a right given to the preference shareholders to exercise equal control of the management and affairs of the company at times when it is not making sufficient profits to fund the preferred dividends. At the highest for HNA, however, its right to vote upon the current proposal was not exercisable at the time of the meeting at which the resolution was put.