82 Clause 20, page 27, line 3, leave out subsection (4) and insert—
(4) Where any person becomes a holder of any shares in respect of which—
§ 4.52 p.m.
§ Lord LYELL
My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 82. At the same time, I should like to speak to Amendments Nos. 84, 85, 87, 88, 90, 92 to 96 en !bloc, 99 to 106 en bloc, 108 to 111 en bloc, 113 to 124 en bloc, 128 to 132 en bloc, 135 and, finally, 137 to 141 en bloc.
All these amendments relate to clauses in the Bill which deal with the payment for share capital and class rights. Amendment No. 82 restates the present provision of Clause 20(4) in such a way that it can also apply in Clauses 21, 22, 23 and 24. The purpose of that paragraph 994 is to set out the liability of people who become holders of shares in respect of which there has been some contravention of the relevant clause. In certain circumstances they may be liable, jointly and severally, with the allottee to pay certain sums. These circumstances are in substance the same for Clauses 20 to 24. It is therefore preferable to provide a generalised statement.
Amendment No. 84 clarifies the exact meaning of "a holder of a share" in this context. The point is essentially that once a holder has a right to membership he should be liable in exactly the same way as any other member in respect of shares not properly allotted or paid up, even if that holder has not been formally entered on the register. The other amendments to Clauses 22 and 23 are drafting changes. The amendments to Clause 24 are mainly minor changes, in part drafting changes and in part changes of substance. The points of substance are that the amendments ensure that the expert who carries out the report required by the non-cash consideration provided in payment for shares, has to be appointed by the company. As drafted, the person by whom the expert may be appointed is not necessarily specified. It is also clarified that the independent person can appoint a sub-valuer to value part of a consideration which is subject to the safeguards built into the clause, and that such sub-valuer could be the company's auditor in certain cases.
The amendments to Clause 26 achieve two main purposes. First, Amendment No. 151 will provide an exception from the clause for agreements entered into by the company under the supervision of the court for the transfer of an asset. Secondly, the amendments deal with a rather unusual case, which is when the consideration provided by the company is in the form of shares in the company. In this case, if the clause was not complied with, the result would be that the company would retrieve its own shares and the promises to pay up the share would become unenforceable. This is contrary to the policy of this part of the Bill, and we hope that the amendments put right this defect.
The amendments to Clause 28 correct minor technical defects. The amendments to Clause 29 are essentially drafting. 995 Subsection (2) of Clause 29 can be removed as a result of the drafting change and the new definition of "allotment" already discussed. Finally, Amendment No. 141 allows for a proxy to be appointed in the case of an adjourned meeting where one person holding any of the issued shares of that class constitutes a quorum. These amendments are perhaps rather complicated and I hope that the House has been able to bear with me. I beg to move.
§ Moved, That the House doth agree with the Commons in the said amendment.—(Lord Lyell.)
§ Lord WEDDERBURN of CHARLTON
My Lords, unless I am mistaken, I do not think the Minister has said anything about Amendment No. 137. It is a very important amendment. Clause 32 deals with class rights, and this alters the requirement of holders of three-quarters of the issued shares of a class to three-quarters in nominal value. That is a major change and, unless I am wrong, I think it has been three-quarters of the number since the 1978 Act. I hope we shall make it clearer on this side of the House and that my noble friends and I do not necessarily place reliance on the 1978 regulations as being superior to these. But where there is a change in something which has stood for such a long time, perhaps the noble Lord could tell us whether his advisers have had reason for it. Personally, I think it is an improvement but I also think it should be recorded expressly in Clause 32.
§ Lord LYELL
My Lords, I am grateful to the noble Lord, Lord Wedderburn, for his observations. I note it is intended to be a minor drafting amendment, but if there is some point of substance on it, I shall certainly obtain something here. Amendments Nos. 137 and 140 are intended to be drafting changes which we believe are needed to ensure that the proportion of the holders needed for consent to a variation in rights is decided with reference to the nominal value of the shares held rather than just the number of shares. We hope that this is in line with the provision in Clause 3(a) of the Bill as it stands and indeed in Section 5 of the 1948 Act.
996 One example would be that the holder of one £10 nominal value share, which has 10 votes, will be treated on a par with the holder of 10 £1 nominal value shares in the same class with one vote each. That is a slightly extravagant example, but it is possible; and therefore I hope the noble Lord, Lord Wedderburn, will see the reason for these two amendments, and certainly for Amendment No.147.
§ Lord ELWYN-JONES
My Lords, I think that my noble friend did see the reason and very properly pointed out that something more than mere drafting was involved. I do not say this by way of reproach for one moment; but in consideration of this forest of amendments which we regard largely as technicalities—save for those my noble friends will be introducing—perhaps the Ministers on the Government Front Bench will be alert to warn us if there is any change of substance: otherwise we may get into difficulties.
§ Lord LYELL
My Lords, we are grateful for those observations and we will take careful note of what has been said by the noble and learned Lord and by the noble Lord, Lord Wedderburn. We shall certainly report it in the right quarters.
§ On Question, Motion agreed to.