This section is also new and was recommended by our committee. Minorities get little protection under the law at present, and the section is designed to rectify this.
SECTION 205.
Question proposed : "That Section 205 stand part of the Bill."
In regard to this phrase " remedy in cases of oppression ". . .what does " oppression " mean ?
That is only a sidenote. The section reads: " in a manner oppressive to him ".
There is no definition. It would be something like "unfair dealing".
"Unfavourable" would do. Oppression seems to be a hard thing to prove.
To use the word " unfavourable " would, I think, be much too wide. The wording is in the British law and in the Six-Counties law. I take it that it is well understood. The courts have exercised these powers for a number of years and are doing so in a satisfactory manner.
Is this section taken from the British Act ?
It is an improved version. There are some points in the British law which we have rectified.
What were they?
In the British law, they had this thing unnecessarily tied up in relation to winding up. We are letting it stand on its own two feet. We have a clause about " oppression " in Section 213, in the winding up part of the Bill. One is not necessarily tied up with the other.
In subsection (3), there is one phrase on which I am with Deputy Norton : " or for the purchase of the shares of any members of the company by other members of the company. " The court can make an order for the purchase of shares of any members by any members.
That may be going very far.
" If on any application under subsections (1) and (2) the court . . . makes such orders as it thinks fit. . ." We are providing for "directing or prohibiting any act or cancelling or varying any transaction or for regulating the conduct of the company's affairs in future."
That is fair enough.
That seems to me to be driving a coach and four through the memorandum and articles of association.
The committee specifically recommended that the power should be kept as wide as possible and obviously envisaged circumstances in which the best remedy might be the purchase of the shares of some party.
And making an order to that effect. I think that is going too far.
Is it safe to presume that this would be acted on only as a last resort in complete and utter deadlock?
Absolutely.
That is always the argument for dictatorial legislation.
This is not dictatorial legislation. It does not give mandatory power for somebody to do something. The court has to be certain that something is fair and equitable.
My point is that this question completely defeats the articles—that it would depend on the company as to whether the articles of association of a company are worth the paper they are written on. I think the power of purchase is going too far.
Has the Minister any suggestion for an amendment ?
I have no suggestion.
What would be the purpose of the amendment ?
I have no amendment, nor do I propose to bring in one.
Can we leave it to the discretion of the court ?
I think we can.
I do not like this word " oppressive " but I think possibly with other additions to subsection (1) we could get to the courts so that certain action would be taken in this regard in the litigant's interests. We could probably get to the court without having to prove it was actually oppressive.
It does leave it fairly wide when it says " oppressive to him or in disregard of his interests ".
Question put and agreed to.