Tesco v Constain - Thomson Reuters

[1912] 2 Ch. 125 Page 21912 WL 17392 (Ch D)(Cite as: [1912] 2 Ch. 125)the principal moneys and interest secured by the debentures in accordance withthe terms thereof and would observe and perform the several conditions indorsedupon the debentures, and provided that the provisions contained in the fifthschedule to the trust deed should have effect in such manner as if suchprovisions were therein set forth.Clauses 13, 14, and 15 of the fifth schedule to the trust deed provided asfollows:--"13. Without limiting or derogating from the powers or discretions vested inthe trustees a general meeting of the debenture holders shall in addition to thepowers hereinbefore given have the following powers exerciseable by extraordinaryresolution namely:--(1.) Power to sanction the release of any of the mortgaged premises.(2.) Power to sanction any modification or compromise of the rights of thedebenture holders against the company or against its property whether such rightsshall arise under the debentures or under these presents or otherwise.(3.) Power to assent to any modification of these presents recommended bythe trustees or trustee.14. An 'extraordinary resolution' passed at a general meeting of thedebenture holders duly convened and held in accordance with these presents shallbe binding upon all the debenture *127 holders whether present or not present atsuch meeting and each of the debenture holders shall be bound to give effectthereto accordingly.15. The expression 'extraordinary resolution' when used in this schedulemeans a resolution passed at a meeting of the debenture holders duly convened andheld in accordance with the provisions herein contained by a majority consistingof not less than three-fourths of the number of persons voting thereat Providedthat in computing the majority when a poll is demanded such majority shall beascertained by reference to the number of votes to which every such person isentitled under these presents."By a supplemental trust deed dated May 1, 1907, executed in pursuance of anextraordinary resolution passed at a meeting of debenture-holders held on April19, 1907, the date fixed by the debentures for payment of the principal moneysthereby secured was altered and extended from September 30, 1909, to September30, 1919, and additional property was assured to the trustees by way of furthersecurity. The supplemental deed also provided that nothing therein containedshould prejudice or affect any provision contained in the principal trust deed orin the debentures by virtue of which the principal moneys secured by thedebentures would on the happening of any event become payable on a day earlierthan the date fixed for payment thereof by the debentures as altered by thesupplemental deed and every such provision should continue in full forceaccordingly.The whole of the above-mentioned issue of debentures was still outstanding, andthe plaintiffs were holders for value of fifty of the debentures for the totalamount of 5000l.On December 16, 1910, a general meeting of debenture-holders (notice of whichhad been given on December 7, 1910, and which had been duly convened pursuant tothe provisions in the fifth schedule of the trust deed) was held for the purposeof passing as an "extraordinary resolution" a resolution to the effect "that thisgeneral meeting of holders of debentures ... hereby sanctions and assents tocertain proposed modifications of the rights of the holders of the saiddebentures against the company and its property (and in particular the conversionof *128 the said debentures into perpetual debentures) and certain proposedmodifications of the said trust deed (as already modified as above mentioned)"--namely, by the supplemental trust deed--"which are recommended by"--the defendanttrustees--"(all which proposed modifications have been explained to the meeting) andhereby authorises the trustees of the said trust deed with the view ofeffectuating, such modifications to concur with the company in executing afurther supplemental trust deed in the terms of the draft which has beensubmitted to the meeting and has for the purposes of identification beensubscribed by the chairman thereof."The plaintiff company were represented at the meeting by their secretary andsolicitor, who spoke against the resolution, but the same was put to the meetingCopr. © West 2004 No Claim to Orig. Govt. Works