Byng v London Life Association Ltd
| Jurisdiction | England & Wales |
| Judge | THE VICE-CHANCELLOR,LORD JUSTICE MUSTILL,LORD JUSTICE WOOLF |
| Judgment Date | 21 December 1988 |
| Judgment citation (vLex) | [1988] EWCA Civ J1221-3 |
| Docket Number | 88/1128 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 1988 |
[1988] EWCA Civ J1221-3
The Vice-Chancellor
(Sir Nicolas Browne-Wilkinson)
Lord Justice Mustill
and
Lord Justice Woolf
88/1128
CH. 1988 B. NO. 8077
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
VINELOTT J.
Royal Courts of Justice
MR. R. POTTS Q.C. and MR. N. DAVIS (instructed by Messrs Farrer & Co.) appeared on behalf of the Appellant (Plaintiff).
MR. D. OLIVER Q.C. and MR. R. HILDYARD (instructed by Messrs Herbert Smith & Co.) appeared on behalf of the Respondents (Defendants).
Notice of an Extraordinary General Meeting of London Life Association Limited ("London Life") to be held at Cinema 1, The Barbican, London EC2 at 12 noon on Wednesday 19th October 1988 was duly given. There was an assembly of members of London Life at that time and place, but Cinema 1 proved too small to accommodate all those members wishing to be present. The second defendant, Mr. Dawson, purported to adjourn that "meeting" and direct that it be resumed in the afternoon of the same day at the Cafe Royal. The meeting at the Cafe Royal passed the sole resolution of which notice had been given. The plaintiff, a member of London Life, brought this action claiming that the second defendant had not validly adjourned the "meeting" in the morning and that accordingly all business conducted at the purported adjourned meeting in the afternoon was invalidly conducted. The action was heard with great speed, and on 14th November 1988 Vinelott J. dismissed the action. The plaintiff appealed to this court and the appeal was heard by us on 5th, 6th and 7th December 1988. At the end of the hearing we gave our decision to allow the appeal, stating that our reasons would be given later. These are those reasons.
London Life is a mutual life assurance company. It has no share capital but is limited by guarantee. The members are some, but not all, of its policy holders. Early in 1988 London Life started negotiations with another mutual life assurance company, Australia Mutual Provident Society ("AMP") for the merger of their long term businesses. The existence of these negotiations was disclosed at the Annual General Meeting of London Life in May 1988.
Thereafter negotiations continued and agreement in principle was reached between the two companies which is conditional on completion taking place by 31st March 1989. The agreement required the London Life Long Term Fund to become a separate fund administered by AMP. The view was taken that the scheme could not go ahead until the Memorandum of Association of London Life had been amended to include a general power to transfer the business of London Life. The sole business of the meeting convened for 19th October 1988 was to pass the necessary special resolution so to amend the Memorandum of Association. The scheme also has to be sanctioned by the court under section 49 of the Insurance Companies Act 1982.
The proposed merger gave rise to some opposition and some adverse press comment. It became apparent to the Board that the meeting was likely to be far better attended than the ordinary run of general meetings of London Life at which normally only approximately 80 people attended. In the circumstances the Board determined to hold the meeting at Cinema 1 at the Barbican Centre which could seat 280 people but could, if necessary, accommodate some 300.
Notice of the proposed E.G.M. was given on 27th September 1988. Very shortly thereafter the Board became anxious whether Cinema 1 would in fact prove adequate. As a result arrangements were made with the Barbican Centre to book two overflow rooms together with additional accommodation in the foyer to accommodate those who could not fit into the cinema. The intention was that there should be an audiovisual link between the overflow rooms, the foyer and the cinema. The two overflow rooms could, at a maximum, hold 100 persons each.
As the date of the meeting approached the Board continued to feel anxious lest Cinema 1 and the provisions for overflow at the Barbican Centre should themselves prove inadequate for the number who attended. They accordingly booked another room at the Cafe Royal (with a seating capacity of 800) between 1.30 and 5.00 p.m. on 19th October. The judge found that those concerned with the organisation throughout thought that the cinema together with the overflow provision at the Barbican Centre would accommodate all those wishing to attend: the room at the Cafe Royal was booked merely as a precaution, it not being thought that it would be necessary to have the meeting there.
The details of what occurred on 19th October are set out in the learned judge's judgment. For my purposes I can summarise the events as follows. Those arriving for the meeting had to register in order to be issued with voting cards. Such registration took place in the foyer. Some of those arriving to attend the meeting were diverted to the overflow rooms which were on the 9th floor but they were not told that there would be no facilities for registration there. The cinema became overcrowded and members unable to gain access to the cinema were diverted to both the overflow rooms and the foyer.
Under Article 17 the President of London Life is made the chairman of any general meeting. Mr. Dawson is the President. At about 12.00 noon he and the directors took their places at a table at the end of the cinema facing the body of the room. They were accompanied by their legal advisers. Since registration was not complete, Mr. Dawson announced that the start of the meeting would be delayed by 20 minutes. He later delayed the start a further ten minutes until 12.30 p.m. It emerged that many people had gone to the overflow rooms without registering and they were unwilling to go down to the foyer to register.
A small party went up to the overflow rooms to discover what the situation was. They found that the audio visual link was deficient: although the Board could be seen and the Chairman could be heard, members speaking from the body of the cinema could not be heard. There was no direct audio visual link from the overflow rooms to the cinema. This was contrary to expectations. To meet the position, a person with head phones and a portable microphone had been stationed in each of the overflow rooms, in the foyer and in the cinema. These persons could communicate with each other and thereby a message from someone in an overflow room or in the foyer could be passed to the person equipped with head phones and a microphone in the cinema. He could then write down the message and take it to the Chairman.
The arrangements for the meeting were plainly unsatisfactory and before 12.30 suggestions had been made from the floor of the cinema that the meeting should be adjourned. However, Mr. Dawson decided to open the meeting at 12.30. Registration was not then complete. As soon as the meeting opened a member rose to object that it was not fair to start the meeting while there were people outside trying to get in. Others proposed that the meeting should be adjourned which was taken to mean dissolved or abandoned. One member insisted that there should be a vote on this resolution, although there was some opposition to an adjournment in the body of the cinema. Mr. Dawson having pointed out that a vote would take a considerable time, the member who had proposed an adjournment withdrew it. Mr. Dawson then started to deliver his prepared speech.
While this was going on, a number of messages had been received from the overflow rooms and passed in note form to Mr. Dawson. One in particular records that the plaintiff had proposed an adjournment sine die. Mr. Dawson said that he did not recollect reading this note.
The time was now about 12. 45 or 12.50. One of the doors of the cinema was forced open letting in a "muted roar" from the foyer. At that stage Mr. Dawson said that he proposed the adjournment of the meeting himself and proposed that it should adjourn to alternative accommodation at the Cafe Royal where the meeting would resume at half-past two. A policy holder objected that he had appointments for the afternoon and received support from the body of those in the cinema. The Chairman repeated that he proposed the adjournment to the Cafe Royal but said that he would like it to be done with the majority consent of the members. Another policy holder suggested that such an adjournment of the meeting would be invalid (which again received support) and pointed out that the meeting could not continue if part of the membership was excluded. Another policy holder said words to the effect that such an adjournment would exclude those who could not attend at 2.30 and that such an adjournment would prejudice those who had appeared at the right time and in the right place. This again received support from the floor. Another policy holder then proposed a vote of no confidence in the Board. The Chairman then adjourned the meeting to the Cafe Royal at half-past two.
At the meeting in the Cafe Royal in the afternoon Mr. Dawson gave his prepared speech and there was an orderly debate. As the room had only been booked until 5 p.m. Mr. Dawson ruled that a vote would have to be taken on the resolution before 4.30 p.m. When the resolution was put, it was carried by a small majority and therefore failed as a special resolution. However, Mr. Dawson demanded a poll and the meeting was closed. The result of the poll was announced the following day and the resolution was passed.
The judge found that there...
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