Page 25 - The Law of Difficult Meetings

The Law of Difficult Meetings

C. The amendment must not have the effect of negating the substantive resolution

For example, an amendment may be proposed to the resolution authorising the Board to fix the remuneration
of the auditors which imposes a maximum sum. But if the amendment proposes a limit of 1p, it effectively
negates the resolution to authorise the Board to fix the remuneration. While an amendment which directly
negates a resolution can clearly be rejected, it is not clear (because there is no authority) whether the
amendment can be rejected where the amendment negates the resolution indirectly.

D. Other requirements

A Chairman can reject proposed amendments on the grounds of redundancy (seeking to re‑open business
already settled by the meeting), inconsistency (incompatible with a previous decision of the meeting), or
on the more difficult grounds that the proposed amendment is either obstructive, vexatious, dilatory or
irrelevant.

Articles may attempt to minimise uncertainty or the unexpected, by providing for the company to be given time
to think about proposed amendments. Where the text of ordinary resolutions are set out in full in the notice
of meeting, the articles may provide that no amendment shall be considered (except at the discretion of the
Chairman) unless, for example, 48 hours’ notice in writing of the proposed amendment has been given to the
company.

If the Chairman improperly refuses to submit an amendment to the meeting, the resolution actually passed will be
invalidated (Henderson v Bank of Australasia (1890) 45 Ch D 330). The same case is authority for the proposition
that there is no obligation on the part of the mover of the amendment to contest the ruling or leave the meeting:
this would not change the fact that the resolution could still be challenged or set aside. In an attempt to ward off
the dangers of this decision, some articles provide that substantive resolutions are not to be invalidated by any
error in good faith on the part of the Chairman in ruling an amendment out of order. It is not certain whether
such a provision is effective although it can do no harm provided that the company is aware that the position is
uncertain.

When an amendment is moved, it takes priority over the original motion and must be voted on before the original
motion can be put. If an amendment has been put to the meeting and carried, it must be put a second time,
embodied in a substantive motion which supersedes the original motion. It is therefore possible for an amendment
to be approved, but for the substantive motion to be lost when it is put to the meeting.

20. AMENDING A RESOLUTION TO APPOINT DIRECTORS

20.1 General considerations

The question here is whether the notice concerning the election or re‑election of directors is wide enough to permit
shareholders to propose a new person as a director, whether in place of or in addition to a nominated director. This
is a complex and difficult area, but the general considerations include:

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