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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Duggan v. Bank of Ireland [1998] IEHC 124 (29th July, 1998) URL: http://www.bailii.org/ie/cases/IEHC/1998/124.html Cite as: [1998] IEHC 124 |
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1. The
Plaintiff is a stockholder in the Defendant (hereinafter called "the Bank") and
as such was entitled to attend and vote at the Annual General Court of the
Bank, which is equivalent to the Annual General Meeting of an ordinary company.
It should be noted at the outset that the Bank was established by charter, and
is not a company regulated by the provisions of the Companies Acts. It is
governed by its Bye-laws which have been amended from time to time.
2. At
the relevant time Bye-law (56) provided that on the taking of a poll every
member present in person or by proxy should have one vote for each £1 of
ordinary stock of the Bank in respect of which he has been registered for the
previous six months provided that if a member holds more than 1%, he is not
entitled to vote in respect of any part of his holding which exceeds 1%. In
other words, there was a cap put on the voting rights of the large
stockholders. At the Annual General Court held on 5th July, 1995 it was
proposed to amend this Bye-law by deleting the voting limit of 1% of the
stock. It is the voting on this proposal that is at issue in these proceedings.
3. There
is a full transcript of the meeting of the Annual General Court, which it is
accepted is accurate, and accordingly it is possible to recite exactly what
occurred. When the resolution was proposed a number of people spoke from the
floor against the resolution. In the course of the discussion the Plaintiff
put forward an amendment to the resolution, which was in effect a compromise
proposal that the limit be raised to 3%, but that it should not be abolished
altogether. The Chairman refused to accept the amendment on the basis that it
was an issue of substance of which advance notice had not been given, and the
discussion continued on the original resolution. I should say that the
Plaintiff is not taking any issue in these proceedings as to the correctness of
the Chairman's decision on that point.
5. Mr.
Duggen then raised the question about people who had given proxies and might
wish to change their votes, and was assured that if any such people were
present they could change their vote. Mr. Duggan then said:-
7. Mr.
Duggan then asked in respect of the 120,000,000 qualified votes, could the
Governor exercise all the one per cents, and was told that he could and they
had been approved by the auditor who vetted them. Anybody present who wished
to vote was then given a ballot paper, and the votes were duly collected. The
meeting adjourned to allow a count to take place. When the meeting resumed the
Chairman declared the resolution carried and said that the final position was
there were 122,837,345 for and 681,562 against.
8. The
Plaintiff's case can be stated very simply. He argues that, on the taking of
the poll, the Chairman did not in fact exercise the votes which he was
authorised to exercise by the proxies he held. There is no dispute as to the
fact that these proxies existed, but the Plaintiff's case is that a proxy is
merely an authority to vote, and has no effect unless the person in whose
favour the proxy is made actually casts a vote. Furthermore, the Plaintiff
makes the case that on a poll the votes ought to be in writing or in some
permanent form, and that this is confirmed by the fact that those who wish to
vote against were required to vote in writing.
9. The
Defendant replies by pointing out the very wide terms of Bye-law (53), which
would appear to give a complete discretion to the Chairman as to how a poll is
to be taken. It further argues that there is no requirement either in law
generally or contained in the Bye-laws, that a poll must be taken in writing,
and the Chairman in his remarks to the meeting quite clearly indicated verbally
that he was exercising the votes contained in the proxies.
10. It
is important to recognise the purpose of the taking of a poll at meetings of
shareholders or stockholders. Largely for reasons of convenience, if a motion
is put to a general meeting, it is initially decided on a show of hands, on the
basis that each person present has one vote, irrespective of the number of
shares they hold. When that result is known, normally any member, or in the
case of the Defendant, at least nine members present or the Chairman may demand
a poll. This is frequently done where the persons who are defeated on a show
of hands feel that in fact they have a greater shareholding than those who
succeeded. In the present case, the Chairman decided to hold a poll because he
was not prepared to determine whether the resolution had been passed or not on
a show of hands. However, the essence of a poll is that, instead of there
being a principle of one vote for each shareholder, there is one vote for each
share or, in this case, each £1 of stock held. Thus the purpose of a poll
is to allow those with the greatest financial interest in the company
ultimately to determine the outcome of any vote.
11. The
discretion which the Chairman had under Bye-law (53) was a discretion to direct
how the will of those with a majority financial interest was to be determined.
He was, of course, aware that he held such a large number of proxies that the
resolution was in fact going to be passed, however he had an obligation to
allow those who disagreed with the resolution to exercise their vote. I think
it is unfortunate that he tried to cut corners by only seeking votes against
the resolution, but that does not necessarily invalidate the poll or affect the
question of whether he did in fact exercise the votes contained in the proxies.
In my view the discretion given to him was so wide as to allow him to give the
direction which he gave, and that he did comply with Bye-law (53).
12. That
being so, the question is whether he did in fact exercise the votes contained
in the proxies. I have no doubt but that he intended to exercise them, and
that this was quite clear to everybody present at the meeting. The phrase he
used was
"there
are 122,803,863 votes in favour of the resolution for supporting the directors"
.
I do not think that could be interpreted as anything other than his exercising
the vote contained in those proxies. It should be noted that he did not merely
state that he held proxies for this number of votes, but he specifically said
that there were those number of votes in favour, and he said it having already
declared that there was going to be a poll. In that context, I think there was
a clear exercise of the votes by him.
13. The
final question, therefore, is whether such a vote is valid when it was not in
writing. I know of no general proposition, nor is there anything contained in
the Bye-laws, which require votes in a poll to be cast in writing. The only
reason why there might be such an implied requirement would be to ensure that
there is a record of the votes cast. In the present case there was such a
record, as the proxies existed and were in writing, and furthermore were
actually signed by the stockholders themselves. If there is any need for there
to be a record in writing of votes cast at a poll, and I do not have to
determine that matter, any such requirement is satisfied by the existence of
the proxy documents which are of course available to the scrutineers who are
counting the votes.