TMI Blog1938 (7) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... o jurisdiction to sanction it under section 153; and, secondly, that, if there be jurisdiction, it is a discretionary jurisdiction, which, in the circumstances, ought not to be exercised in favour of the petitioner. I will deal with the second point first. The circumstances the case are unusual. The company was, with a large number other shipping companies, concerned in a scheme of arrangement under section 153 of the Act which was sanctioned by the Court on June 24, 1932. The company was then, as it is now, hopelessly insolvent, and I am not concerned with the scheme except to observe that under clause 16(F) and the schedule thereto the board of the company was thereafter to consist exclusively of directors nominated by the creditors of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53 ; they could at any moment put the company into liquidation ; but since they have chosen the path of section 153 without a previous liquidation, it is to be assumed that they would pay something to be allowed to take that path, and accordingly the directors should not have assisted them without exacting a price. There is, I suppose, room for different views on the question whether, on the facts of this particular case, a refusal by the directors to assist the creditors, except on the footing of some benefit being given to the shareholders, would have borne any fruit. However that may be, the matter comes before me on the footing that the directors have thought fit to assist the creditors by putting forward a scheme for their benefit, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 153, the company can make, and the Court sanction,, an arrangement which is in excess of the corporate powers as defined by the memorandum. There is nothing in the language of section 153 which even remotely suggests such a conclusion. It contemplates a compromise or arrangement between a company and its creditors or any class of them, or its members or any class of them, and provides machinery whereby such a compromise or arrangement may be made binding on dissentient persons by an order of the Court. I find nothing here which would indicate that the company can effect an arrangement which would be otherwise ultra vires if the Court will give its sanction under section 153. Rights which are conferred by the memorandum of association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inental Supply Co., In re, do not seem to me to touch the point which his Lordship was discussing or which I have to determine. It is indeed a cardinal principle that a company's Corporate powers are defined and limited by its memorandum of association, and that its memorandum can only be altered in the manner prescribed by the Act itself. It would be strange if by a side wind under section 153, without observing the particular prescription of the Act with regard to alterations, new powers could be conferred on a company, and the contention is more forcible when it is remembered that the new power proposed by this scheme to be conferred on the company namely, to sell or dispose of the whole or any part of the undertaking is a power for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lain meaning of the statute. Accordingly, I refuse the petition and I shall make no order on it, except that the company do pay the costs of the opposing shareholders, to whom I am indebted for bringing the question of jurisdiction to my notice. With regard to the action, there came before me with the petition a motion in an action of Sidney Joseph Jackson on behalf of himself and all other shareholders of the Oceanic Steam Navigation Co., against the company and certain men who were directors of the company. By that motion the plaintiffs asked that the company, its directors and agents, might be restrained by injunction from proceeding with the scheme of arrangement or taking any further step in the proceedings, and asking for certain ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
