Altitude Scaffolding Ltd, Re Companies Act 1985

For the purposes of Companies Act 1985, section 425, a meeting ordinarily requires two or more persons to come together. Attendance by only one creditor does not constitute a meeting merely because the meeting was properly convened and the creditor voted. A limited exception applies where the relevant class contains only one member, since the statutory term may then bear an extended meaning. The court left open the possibility of a further exception where it is proved that no other class member could attend. The court has no jurisdiction to sanction a scheme where the statutory meeting requirement is not satisfied.

Two unrelated applications raised the same question under section 425 of the Companies Act 1985. Altitude Scaffolding Ltd sought sanction of a creditors’ scheme. One creditor attended each relevant class meeting, but there was no evidence that either class contained only one creditor.

The administrators of T&N Ltd and associated companies sought orders convening creditors’ meetings and a direction that attendance by one creditor would constitute a meeting. The central issue was whether a single person attending a properly convened class meeting satisfied the statutory requirement for a meeting.

1. Statutory structure. Section 425 establishes a three-stage process: the court orders meetings to be summoned; the proposals are approved or rejected by the prescribed majority of those present and voting; and the court considers whether to sanction the scheme. Each stage is an essential part of the statutory protection afforded to creditors.
2. Ordinary meaning of meeting. The ordinary legal meaning of “meeting” in the company context is the coming together of two or more persons. The requirement enables members of a class to consult together, debate the scheme and, where appropriate, question its proponents. The fact that meetings are often sparsely attended or conducted substantially through directed proxies does not justify replacing that meaning.
3. Limited exception. Authorities including East v Bennett Brothers Ltd and In re RMCA Reinsurance Ltd establish a limited qualification where the relevant class contains only one member. In that situation, the term may be construed to include the single member’s formal attendance or consent. That exception did not apply because there was no evidence that the ASL or T&N classes contained only one creditor. The judge left open, without deciding, whether an exception might apply where it was proved that no other class member could attend in person or by proxy.
4. Technology and statutory context. The coming together required by a meeting may be achieved through technology. The express powers in sections 367 and 371, and the specific quorum provisions in section 125, reinforced the conclusion that Parliament had used “meeting” in its ordinary sense rather than silently authorising a one-person meeting under section 425.
5. Disposition. The court had no jurisdiction to sanction the ASL scheme. The direction sought by the T&N administrators was refused.