8 July, 1908.]

[Continued.

Chairman-continued.

in Chambers might not have the power. I think we had better leave it as it is in the Act. That disposes of Clause 30, does it not?-That is so.

ON CLAUSE 32.

Chairman.

64. Here again the words "a a Judge thereof sitting in Chambers" occur in Section 35 of the Act of 1862, but they have been omitted in the Bill. Why should not the words be left in ? Have you any special reason to give?-All I have got to say on the point is set out in these notes. The words were omitted in view of the decision in Duffin v. Mexican Gold Company. [Chairman.] The notes are very clear, and give us every assistance that can be given. I think we had better leave in the words "Judge thereof sitting in Chambers."

Mr. Solicitor-General.

65. In this same Clause 32 you have omitted the special power to order payment of costs by parties other than the applicant or the company which is given by Section 35 of the Act of 1862 ? -Yes, that is now entirely unnecessary.

Chairman.

66. You have omitted it because you think the Judicature Act has given power as to costs? -That is so. Perhaps I might say that in these notes I am not giving my own opinions. This Bill has been looked at by a large number of members of the Bar and other people; they have seen all these notes, and they have made no comment upon the statement.

67. I am sure the notes are very deserving of consideration and attention ?-They have been seen by a number of members of the Bar.

Lord James.

68. The members of the Bar were unable to resist the temptation to make amendments as they went on; they wanted to make amendments?—I agree, that is so.

(After some discussion.)

Chairman.

69. I think we had better restore the words as to the power to order payment of costs as they were in the Act of 1862. Then I see the provision for the trial of an issue has been omitted as unnecessary?—Yes, I think it is absolutely clear under the Rules.

[Chairman.] I think we had better restore the provision for the trial of an issue, leaving it as it was before, having regard to the fact that both Houses will rely upon us to see that the law is not altered, having received a pledge to that effect.

Chairman-continued.

That is not

Commonwealth of Australia." altering the law, but it appears to be unnecessary, 71. There is some point about the meaning of the word "Colony "?-Yes, the whole question is whether it applies to the separate States forming the Commonwealth of Australia, or to the Commonwealth as a whole. The definition of "Colony" in the Interpretation Act covers the Commonwealth as a whole. What we suggest would be right would be to strike out the words and the Commonwealth of Australia," as being quite unnecessary.

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Lord Faber.

74. I suppose the Colonial Office are afraid that we might be stereotyping the Commonwealth of Australia?—The point was that in the Act of 1883 there is a definition of "Colony " which does not cover the Commonwealth of Australia. But the word Colony," when used in this Bill, will have a different meaning to the word "Colony as it is used in the Act of 1883, and when used in this Bill it covers the Commonwealth of Australia. If these words are struck out, we say that it will be quite right without express mention of the Commonwealth of Australia.

77. The provision in the Act of 1907 is "For removing doubts it is hereby declared that the Commonwealth of Australia is a Colony within the meaning of the Companies (Colonial Registers) Act, 1883"?-Yes. The point is that the definition of the term "Colony " in the Companies (Colonial Registers) Act, 1883, is not the same as the definition of "Colony " in the Interpretation Act.

78. That was subsequent to the Act of 1883 ?— Yes, that was an Act of 1889.

8 July, 1908.]

Chairman.

79. You want to have the Commonwealth of Australia included, and there is an Act of last year reciting that there were doubts as to whether the word Colony" included the Commonwealth of Australia or not; surely, under those circumstances, it is much better to leave in the words "Commonwealth of Australia"?—The only point is whether it would cause difficulty in other Acts as regards the meaning of the word "Colony." (Mr. Barnes.) As to whether it will not throw doubt on the definition of the word "Colony " in the Interpretation Act.

80. I should hardly think that would be so, because this is a consolidating Act; it consolidates a number of old Acts, and therefore might include things which perhaps might not nowadays be included? It was suggested it might lead to doubt.

Mr. Arnold Herbert.

81. In 1907 there were doubts existing; is not the position the same now as it was then?-No; if you look at the definition of "Colony" for the purposes of this Bill it is different.

Mr. Solicitor-General.

82. They were dealing with the word " Colony " as defined by the Act of 1883 ?—Yes.

Mr. Arnold Herbert.

83. But the Interpretation Act was in force then; is not the position the same now?-No, because there was a special definition in the Act of 1883, which is what is referred to in the Act of 1907-that is the point.

(After some discussion.)

[Chairman.] We will leave the words " Commonwealth of Australia "in.

ON CLAUSE 38. Chairman.

84. In regard to Clause 38, I see from the notes that “ three has been substituted for "five" in the old Act at the end of Subclauses (1) and (2); it is a question of so many years penal servitude; is it five in the Act at present ?-No; that is not years so, because the Penal Servitude Act of 1891 makes a difference. It is necessary to insert "three here in order to make the law exactly as it is now. [Chairman.] If that is so it is all right.

ON CLAUSE 39.

Chairman.

Chairman-continued.

[Continued.

91. I am not sure that this does reproduce the existing law. The point that struck me on drafting is this. You say in Subsection (1) that the Company "may alter the conditions of its memorandum." I think, if you look at the Act, it is plainly provided that the Company must do that by resolution. It is not a thing that a company can delegate to the directors or anything of that sort. A special resolution is no doubt required in the place where it is mentioned here, but I think to make it correct it should run in this way: "A company limited by shares, if so authorised by its articles, may by resolution in that behalf do these things. Then you go on to say in Subsection (2) that for one purpose it must be a special resolution. I think it is a little dangerous not to reproduce

8 July, 1908.]

Mr. Beale-continued. reproduce the words of the Act. Under the Act of 1867, speaking from memory, they got power to do most of these things, but it was, if authorised by the memorandum they may resolve to do so. It was never suggested in the Act of 1867 that a company could do it otherwise than by resolution, and if you want to do it anew you have to pass three resolutions-a special resolution, a resolution confirming the special resolution, and then, on the same day, you might go on and resolve. But in the case of a subdivision of shares or reduction and these other things you have to have a special resolution; you have to make it special, and it is rather complicated?-(Mr. Barnes.) Might I refer the honourable Member to Section 12 of the Act of 1862, in which no resolution is mentioned at all? That section says: "Any Any company limited by shares may so far modify the conditions contained in its memorandum of

association

Chairman-continued.

[Continued.

103. (To Mr. Harrison.) Reference was made. to paragraph (e) in this clause, and it was suggested there was some alteration. This is the point you refer to in your notes when you say, "There is, however, an obvious omission-probably of words describing the resolution in Section 5 of the Act of 1877 (now produced in paragraph (e) of Subclause (1)." Is there any alteration there ?What has been done there is to insert the words "resolution in that behalf," because if you look at the section of the Act of 1887 you will see reference to some sort of resolution must have dropped out. It does not read as it stands.

104. The words "in behalf of " are not in there?-No; in Section 5 of the Act of 1877 the words are "at the date of the passing of such resolution, ," but there is no other mention in the section of any resolution at all.

105. Have you anything to say about Clause 42? Is that the law as it stands?-The law is reproduced there as it is; but the note refers to a deficiency in the law as it stands.

[Chairman.] We had better keep it as it is.

ON CLAUSE 45.

Chairman.

106. As regards Subclause (1) of Clause 45, I see from the notes that the language of the proviso has been corrected in accordance with the suggestions of Lord Justice Buckley; I think, perhaps, we had better leave the proviso as it was ?-There is no change of substance.

107. Then is Clause 45 exactly as the law is? -Yes, I believe so.

8 July, 1908.]

Lord James-continued.

Chairman-continued.

[Continued.

[Chairman.] Yes, I think so; the Committee have decided that on the previous clause.

ON CLAUSE 56. Chairman.

121. Then Clause 56 is really adding something, is it not? You say in the notes: This clause is inserted to give effect to the presumed intention of the words "subject to increase or reduction in accordance with the Companies Acts in Section 27 of the Act of 1900," and you add that Lord Justice Buckley has expressed his agreement with this view of the law; but it is really adding something, is it not?-It is not for-me to say that it adds something when Lord Justice Buckley says it does not.

122. If puts a certainty of one kind in place of a doubt, if there is a doubt I think we had better leave it ?-I do not know what I shall have to do with the words which this clause was intended to represent. This is meant to represent certain words in Section 27 of the Act of 1900.

123. I will try and help you, let me look at the words. I see you refer in the notes to page 793 of Buckley ?-Yes. The words are those in the first subsection in brackets: Subject to increase or reduction in accordance with the Companies Acts."

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124. Does that do much more than say that, though it may specify the amount of capital, yet that is subject to increase or reduction in accordance with the Acts ?-So far as I understand, the point is this: Before 1900 the capital in the case of a guaranteed company was stated not in the memorandum but in the articles of association and therefore could be altered in the same way as any other provision in the Articles. But under the Act of 1900 the statement as to capital has now to be inserted in the memorandum and therefore it would be unalterable unless there is some express power given by some Act to alter it. It has been supposed that those words in Section 27 are meant to give that power of altering the capital.

125. Is it argued that they do give the power of alteration?—Yes, that is the argument.

126. Has the doubt not been solved ?-Not so far as I know.

127. A thing of that kind ought to be solved, had better leave it as it is ?-Then must I put not by us but by a court of law. I think we

those words back somewhere into Clause 21 of the Bill?

Mr. Solicitor-General.

128. Would it not be better to strike out Clause 56 altogether and incorporate the whole of Section 27 of the Act of 1900?-The rest of Section 27 is in other clauses already. It has had to be split up. I made a mistake when I spoke of Clause 21. I think it would have to go in Clause 4, Subsection (2).

Chairman.

129. Yes, I think that would be the right place?-Clause 4 (2) represents the first subsection of Section 27.

130. It

BILL (LORDS). 8 July, 1908.]

9

[Continued.

ON CLAUSE 66. Chairman.

Chairman-continued.

130. It is rather difficult, because the thing is very obscure, and it is putting the obscure thing into a different frame ?-Yes.

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[Chairman.] I think you must put it in there, so that it would run : The memorandum must also state the amount of share capital, subject to increase or reduction in accordance with the Companies Acts." That has the effect of perpetuating the doubt whatever it is, and if it comes to be solved it will be the same question as it was before.

ON CLAUSE 57.

Chairman.

131. As to Clause 57, I see from the notes

you have omitted the provision of Subsection 4

of the Act of 1879 as to re-registration of registered limited companies, as being unnecessary ?-Yes; that was on the strength of the note in Lord Justice Buckley's book at page 681.

[Chairman.] Is that a good enough reason for omitting it? Why should we not put it in? It will not do any harm; I think we had better have it in. Then in the same way you say: The concluding words of Section 9 of the same Act also omitted as apparently unnecessary." I think we had better leave the section as it was in all its beauty or deformity. The temptation is almost irresistible to tidy up, to use an expression which has already been used. I understand it is the sense of the Committee that the words should be inserted as in the original Act.

ON CLAUSE 69. Chairman.

138. Have you anything to say about Subclause (1) of Clause 69?-There is a drafting amendment which we should like to suggest on the first subsection of Clause 69-to insert at the beginning of line 25, as does not make any alteration in the law, but somean extraordinary resolution." It one has suggested that if we do not do that it may have the effect of making every resolution which is passed by a three-fourths majority ipso facto an extraordinary resolution whether it was intended to be an extraordinary resolution or not.

141. If so, it would have to be registered, and other consequences might ensue; whereas it is not intended, and the law does not say now that every resolution that has been passed by a majority of three-fourths shall be an extraordinary resolution unless there has been notice specifying the intention to propose it as such ?—Yes.

142. You wish to prevent every resolution becoming an extraordinary resolution by the mere fact of its being passed by a three-fourths majority, and for the purpose of preventing that result, which none of us would desire, you propose to amend the clause in the way you have mentioned ? -Yes.