TMI Blog1959 (7) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... ry three shares in the brick company, two shares in the respondent company would be taken in lieu. The applicant was unwilling to accept that offer and he brings this summons under section 209 of the Companies Act, 1948, to establish his right to refuse to do so : he is an ordinary shareholder and he says that he does not want to have the shares which he holds in the brick company replaced by shares in Redlands Holdings Ltd. Section 209 of the Companies Act, 1948, is a long complicated section, and sub-section (1), the only relevant sub-section, can be sufficiently summarised as regards its effect in the terms used by Somervell L.J. in In re Press Caps Ltd. [1949] 1 Ch. 434. 432 ; [1949] 1 All. ER 1013, CA ; [1949] 19 Comp. Cas. 327 : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho does not want to part with his shares, and one is not surprised that Maugham J.'s decision should emphasise that point of view. Maugham J. said : "One conclusion which I draw from that fact" that is, the fact that the court will not "order otherwise," i.e. , allow a man to escape from his obligation "is that the mere circumstance that the sale or exchange is compulsory is one which ought not to influence the court. It has been an expropriation, but I do not regard that phrase as being very apt in the circumstances of the case. The other conclusion 1 draw is this, that again prima facie the court ought to regard the scheme as a fair one inasmuch as it seems to me impossible to suppose that the court, in the absence of very strong gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , I am not persuaded that the offer made by Charrington was an unfair one from the point of view of the value of the shares and cash which were offered to the shareholders of Hoare Co . "On the whole, I do not think I am justified in coming to the conclusion that the applicants have established that the offer is one in regard to which the court would think fit to order that the transferee company is not entitled to acquire these shares substantially on the terms of the original scheme. I confess I have some sympathy with people in the position of the applicants. I am myself not quite able to understand why the legislature should ever have passed section 155 at all, and therefore I am not at all indisposed to consider the objections of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e formulation of a better scheme, of a fairer scheme, of one which would have been more attractive to the shareholders if they could have understood the implications of the criticisms. I have no doubt at all that a better scheme might have been evolved, but is that enough ? Is it necessary to establish the validity of such an offer as put forward in the present case ? Is there any point in the scheme on which a better view might have prevailed, and rather more generous treatment might have been offered to persons whose shares are sought to be expropriated ? A better and fairer offer might have been made, possibly, but I do not think that because a scheme is not 100 per cent. fair or right there is the kind of unfairness with which Maugham J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bt that three shares in the brick company which were worth at the relevant date something like 21s. 3d. have now been transposed into two Redlands shares which are worth today on the Stock Exchange quotation 43s. 1d. It is a rather curious result that a man who parts under compulsion with property which all agree was worth something in the neighbourhood of 22s. now finds himself in possession of property which, according to Stock Exchange quotations, is worth nearly twice that amount, i.e. , 43s. It is rather curious for him to say : "It is a very unfair bargain I struck. True, I have shares worth twice as much as my former shares were worth, but still it is unfair because I think greater consideration ought to have been paid to various fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been used in the reported cases has been established. It must be affirmatively established that, notwithstanding the view of the majority, the scheme is unfair, and that is a different thing from saying that it must be established that the scheme is not a very fair or not a fair one : a scheme has to be shown affirmatively, patently, obviously and convincingly to be unfair. This is a difficult case, and if it goes to a higher court I would like to express my apologies for having dealt with it on somewhat vague and not very detailed lines : but, after all, if it has to be affirmatively established that the scheme is unfair, it is largely a matter of the onus of proof and whether the evidence has satisfied me. I am not satisfied that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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