Does Section 89 follow the Common Market practice in relation to bearer warrants ?
SECTION 89.
Question proposed : " That Section 89 stand part of the Bill ".
No, I do not think so.
Would it not be a good idea to start coming around to the European pattern ?
The provisions of this section appear to conflict with the provisions of Section 81. It would appear that the company, if so authorised by its articles, may defeat the provisions of Section 81.
It may, but the whole necessity for bearer shares is that they are transferred by delivery alone.
Would it have the effect of increasing this type of share ?
Is Section 89 not a repeat ?
It is a repeat of Section 37 of the 1908 Act. In fact, I think these share warrants are now extremely rare.
Largely because of the security risk.
Question put and agreed to.
NEW SECTION.
I move amendment No. 30 :
Before Section 90 to insert a new section as follows :
" If a company has created or issued shares in its capital and if there is reason to apprehend that such shares were invalidly created or issued, the court may, on the application of the company, any holder of such shares or any member or creditor, or the liquidator, of the company, declare that such creation or issue shall be valid for all purposes if the court is satisfied that it would be just and equitable to do so and thereupon such shares shall from the creation or issue thereof, as the case may be, be deemed to have been validly created or issued."
A brief has been circulated about this amendment, and it arises out of the Jenkins report.
While I think it is entirely desirable that there should be that power there, is it clear from the wording of the amendment that the court has the right to direct such advertisements or such notices to shareholders as it may think fit ?
The court may.
I think it is probably inherent in any application that the court may do it.
Yes, the court can do it and, if necessary, rules could be made.
That is the point. A lot of these things would depend on Rules of Court. At present, some of these applications are brought by petition, which is rather more cumbersome than a motion for directions and, on the motion, the court directs about advertising, and so on. It is a matter, really, for the Rules Committee to decide whether applications under this section would be by petition or summary summons. Summary summons is a quicker and cheaper procedure, usually.
I have no doubt that the Rules Committee meets regularly to provide for matters like these. Naturally, it is not desirable that legislation should anticipate the Rules Committee except in special cases.
So long as the court is entitled to do it, I am happy.
It is, clearly.
Amendment agreed to.