High Court of Ireland Decisions

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.

4. After further discussion the Chairman put the resolution in the following terms:-

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:-

6. The Governor replied:-

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.

14. Accordingly I refuse the relief sought in this case.