Brennan v Allied Services Ltd et Al

• Jurisdiction: Montserrat
• Court: High Court (Montserrat)
• Judge: Louisy J.
• Judgment Date: 31 January 1970
• Neutral Citation: MS 1970 HC 1
• Date: 31 January 1970

High Court

Brennan

and

Allied Services Limited et al

Company Law - Articles of Association

Company Law - Directors — Appointment

Company Law - Shares

Facts: The plaintiffs and the second defendant agreed to form a company and to that end an account was fed by lodgments from the plaintiffs and the second defendant from time to time. The plaintiffs sought an order that the Board of Directors of the first defendant company issue to each of them a share certificate for the 10 shares taken by each of the plaintiffs as a subscriber to the Memorandum and Articles of Association of the first defendant. The plaintiffs also sought a declaration inter alia that the notice issued by the second defendant purporting to summon a meeting of the Board of Directors was invalid so that the appointments of two persons to the Board of Directors of the first defendant were not made in the manner provided in the Articles of Association of the first defendant and were null and void and ineffective.

Facts: The plaintiffs and the second defendant formed a company. The plaintiffs sought a declaration that the notice issue by the second defendant purporting to summon a meeting to the Board of Directors was invalid so that the appointments of two persons to the Board of Directors of the first defendant company were not made in the manner provided in the Articles of Association of the Company, and were null and void and ineffective.

Facts: The plaintiffs and the second defendant agreed to form a company and to that end an account was fed by lodgments from the plaintiffs and the second defendant from time to time. The plaintiffs sought an order that the Board of Directors of the first defendant company issue to each of them a share certificate for ten shares taken by each of the plaintiffs as a subscriber to the Memorandum and Articles of Association of the first defendant company.

Held: Appeal allowed in part. Declaration that the plaintiffs were entitled to 114 shares in the said company inclusive of their shares as a subscriber to the Memorandum of Association. No declaration granted to the effect that the two appointments to the Board of Directors were invalid and void since the court found that appointments were made by the plaintiffs and second defendants who were at that time, the only shareholders and directors of the company.

Held: The appointments were made by the plaintiffs and the second defendant who were at that time the only shareholders and directors of the company. At that time the only persons who could have increased or reduced the number of directors were the plaintiffs and the second defendant and they did so. The plaintiffs could not now complain of the appointments. Declaration refused.

Held: Declaration made that the plaintiffs were entitled to 114 shares in the said company inclusive of their 10 shares as subscribers to the memorandum.

Louisy J.

1 The plaintiffs and the second named defendant agreed to form a company in Montserrat and to that end opened an account in their joint names at a bank in Toronto. That account was fed by lodgments form the plaintiffs and the second named defendant form time to time. The company, called Allied Services Ltd. was formed and it was incorporated on the 12 ^th February, 1968. It appears from the minutes dated 22 ^nd April, 1968 and signed Charles Cairney and Herbert Hahn that the signatories to the Memorandum of Association, the plaintiffs and the second named defendant consented to be the first Directors of the company. I see no other minutes of any other general meeting of the company except for a meeting of June 7 ^th, which I will advert to later in this judgment. A meeting of shareholders appears to have taken place in March, 1969 at a meeting of the company attended by the plaintiffs and second defendant, Sam McChesney and Robert Burns were added to the Board of Directors, these two it appears from the evidence had made investments of $50,000 (Can.) respectively in the company.

2 The next meeting of the Directors was held on 18 ^th August, 1968. At the meeting the Directors agreed to issue shares as follows, to Brennan, Hahn, Burns and Cairney, 1, 000 and 133? to McChesney with an option of total of 266?. The following appears in the minutes on this holding of shares –

“It was noted that a split in the stock may be necessary at a later date to simplify the distribution of the same.”

3 At that meeting both plaintiffs were present.

4 On 22 ^nd March, 1969 a meeting of Directors was held, present were S.P. McChesney, Robert Burns and Charles Cairney. At that meeting the breakdown of shares prepared by the accountant Cassels subsequent to the meeting of 18 ^th August, 1968 was accepted. Approval was given to McChesney taking his option for 266? shares.

5 The next recorded meeting of the Directors was on the 28 ^th March, 1969: when the plaintiffs were present. The question of shares did not appear to have been raised at that meeting.

6 On the 12 ^th April, 1969 there was a Director's meeting, which the plaintiffs did not attend. At that meeting a resolution was duly passed authorising the issuance of shares as follows:–

Frank Brannan	106
Herbert Hahn	114
Robert Burns	84
Charles Cairney Mechanical
Electrical Ltd.	720
Charles Cairney	45
S.P. McChesney	789

7 At the meeting it was also resolved that the present officers of the company be removed from office and the following appointed to act until confirmed that the shareholding of members were as authorised to be...