Re: "Here we go again"
Posted by: Mike Clark
Date: March 16, 2009 01:07PM
The latest letter from the G15 includes many unjustified attacks on long serving Members of the Club and a level of spin worthy of 10 Downing Street at its worst. It occurred to me that I should satisfy myself that the newly elected directors of the Club, who are responsible for the letter, had indeed been legitimately elected at the AGM of the SCCGB Ltd since by all accounts that meeting degenerated into a shambles.
The entire approach of the G15 to the current situation in the old SCCGB Ltd is based on their assertion that Messrs Jones, Gray and Davies were legitimately and democratically elected at the AGM. My investigation has shown me that they were not, and I will explain why not, in detail later in this post. I do apologise for the length of the post but read it and you will understand.
But first of all think what this means
The whole thrust of the recent letter to members from the G15 is that they are the responsible guardians of the Club and our hobby and protectors of the public. They also make much of the protection afforded to Directors of the Club by its status as a Company Limited by Guarantee. Hold on a minute - if there is the slightest doubt about the validity of the election of 75% of the Directors of the Club does anyone think that these people will derive any protection from litigation because the Club is a Limited Company? Furthermore what will the acquiescence of the one legitimate Director, Gerry Stoneman, in the management of the Company by dubiously elected Directors do to his protection? Ultimately, of course, should litigation arise from some dreadful incident the Club will be reliant on its Public Liability Insurance to cover any costs and Insurance Companies are very good at finding reasons why they should not pay up. I would be not just "a concerned member" but an "extremely concerned member" if I were Mr Stoneman or one of the three "new Directors".
If the three "new Directors" are not Directors they had no right to demand that Jeff and Chris pass over Club property. Gerry Stoneman, as the only unquestionably elected director, has a legitimate right to request these things but the demands were made by Gareth Jones and, in the case of the secretarial records the collection was to be done by Sally-Ann. It was quite clear by this time that the AGM voting was invalid so that at that moment it was not appropriate for the Club records to be passed to the “new Directors” and this was made clear to Gareth by Chris during the infamous midnight phone call. I now hear that a demand for the Club records has been made by Solicitors acting on behalf of Gerry Stoneman and, since the G15 will be needing the records when organising the forthcoming EGM, action is to be taken to pass the records on to him.
The G15 continue to insist on the need for the Code of Practice despite the fact that this was rejected when Members voted “for” the policy statement proposed by Bill Rich and his fellow directors at the AGM. How can this be seen as following the wishes of Members and what mandate have the three “new Directors” to continue down this route? They are also determined to retain Limited status for the Club, saying that this is becoming the norm for motor clubs - yes, but this is for Clubs with paid professional staff, for clubs which run competitive events, own property and most importantly clubs which incur product liability by selling spares. The SCCGB does none of these things. It is not acceptable for the Club to be led in this fashion by people who have no legitimate status as Directors.
Anyway all of this should just be for members of the old Limited Club to ponder over and of no concern to us in the new Steam Car Club but unfortunately the G15 continue to threaten legal action to take control of Jeff’s web site to which they seem to attribute some huge commercial potential. While we in the new Club would have been perfectly happy to go our own way and ignore the G15 and the SCCGB, leaving them to sink or swim according to their ability, their repeated threats of Police, Trading Standards and Courts means that our Club has to defend itself as Basil and his team are so energetically doing. The intransigent pursuit of these matters by the core of the G15 (Jones, Stoneman, Gray and Davies) who have prevaricated over meeting Basil after he (Basil) suggested a meeting between himself and Gareth Jones, really leaves no option but to call an EGM to decide upon the future of the limited company. It would of course be far simpler to do this by agreement, as Basil has suggested, without an EGM but so far this hasn’t happened.
Now here is why the “new Directors” are not legitimately elected Directors.
Just to remind you of the history of the several proxy forms which were issued before the AGM.
The Company SCCGB Ltd issued two forms, the first of which mistakenly omitted to give voters a box in which to indicate their vote against Directorial candidates and also mistakenly instructed members to vote for only one candidate. Realising that this was an error the Company issued a second proxy form which corrected these errors. The Secretary made sure that when a member submitted this second proxy form it took precedence over any previous proxy form sent in. The G15 issued a proxy form of their own which mimicked the yellow colour of the official form. This too had no provision to register votes against the Directorial candidates and furthermore was already marked up with the G15’s preferred response to the Election of Directors and to other AGM resolutions. The G15 asked that their proxy forms should be returned to Gareth Jones who undertook to pass them to the Company Secretary 48 hours before the start of the AGM.
Several of us have looked in detail at the Company’s Articles of Association and this is how it was realised that the G15 proxy forms and the means and timing of their delivery infringed the Company’s rules, as did the timing of the Directorial candidate’s nominations. The Articles of Association, and the Companies Act spell out in detail how we must act.
The infringements of the Company Articles were as follows.
1 Irregularities with the nominations
The details of the nominations are as follows:
(a) J H Davies
Proposed by D G Jones on 19 November 2008
Seconded by P Stevenson on 29 November 2008
Accepted by nominee on 16 November 2008
(b) S J Gray
Proposed by A G Stoneman on 15 November 2008
Seconded by J H Davies on 15 November 2008
Accepted by nominee on 16 November 2008
(c) D G Jones
Proposed by D Webster on 28 November 2008
Seconded by P Stevenson on 3 December 2008
Accepted by nominee on 20 November 2008
It is a little odd that both Mr Davies and Mr Jones accepted their nominations some days prior to the dates of the actual nomination!
All were received by the secretary at the registered office on or before 6 December 2008. This is clearly much more than 35 clear days before the date appointed for the general meeting. This is in contravention of Article 5.4(b), which reads as follows:
No person shall be appointed a director at any general meeting unless either:-
(a) he is recommended by the directors; or
(b) not less than 14 nor more than 35 clear days before the date appointed for the general meeting, notice signed by a member qualified to vote at the general meeting has been given to the company of the intention to propose that person for appointment, together with notice signed by that person of his willingness to be appointed."
2 Irregularities in the proxy form issued by D G Jones on behalf of the group of “concerned members.”
A proxy form should offer the opportunity for the voter to instruct his proxy to vote “For” or “Against” resolutions at the meeting and this is specified in Table A Regulation 61. The first proxy form issued by the Company did not make this provision in respect of the election of new directors (although it did for all other resolutions). However the format of the proxy form was approved by the directors, and so under the provisions of Table A Regulation 61, underlined in the quotation below, the proxy form was valid.
"Table A Regulation 61
Where it is desired to afford members an opportunity of instructing the proxy how he shall act the appointment of a proxy shall be in the following form (or in a form as near thereto as circumstances allow or in any other form which is usual or which the directors may approve".
The Board later decided that the members should be given the opportunity to vote “Against” the candidates and so the Company issued a second proxy form which conformed in all respects to the format required by Table A Regulation 61. The secretary took great care to ensure that wherever a member submitted both forms, the instructions given on the later-dated form took precedence. Votes submitted on either of these forms are therefore valid.
The proxy form issued by DG Jones did not conform with the requirements of Table A Regulation 61 as it gave no options of choice between “For” or “Against” any of the resolutions; it offered only the option of voting in accordance with the wishes of Mr Jones and his “concerned members.” It was not approved by the Company’s directors. Votes submitted by proxy in fulfilment of this proxy form are therefore not valid.
3 Irregularities in the delivery of the proxy forms issued by D G Jones on behalf of the group of “concerned members.”
(a) The "concerned members’" proxy forms requested that voters send their forms to Mr Jones who undertook to deliver them to the Company. As Mr Jones was himself a candidate for election as director, this must be considered to be a very dubious electoral procedure. Votes submitted in this way are clearly invalid.
(b) Mr Jones undertook, on the form itself, to deliver the completed proxy forms to the Company secretary at the Company’s registered office 48 hours before the meeting. He did not do this, thereby failing in his duty of care in this matter. At no time were the forms sent to the registered office or given to the secretary. In Table A Regulation 62 it is stated that an appointment of proxy which is not deposited, delivered or received in the prescribed manner shall be invalid.
During the AGM, under considerable and noisy pressure from Members of the G15 the Chairman did agree that the G15 proxy forms could be included in the count, however subsequent legal advice from the Company solicitor is that this action was not within the Chairman's remit. The Chairman's acceptance of these forms at the AGM therefore does not make them valid. On this basis also, these proxy votes are not valid and should not have been counted.
4 Irregularities in the validation of the proxy forms issued by D G Jones on behalf of the group of “concerned members.”
All proxy forms issued by the Company were validated by the secretary by checking the 5-digit security number against the name of the member. No such procedure was carried out on the DG Jones forms; this was impossible as the forms were at no time – before, during or after the meeting – in the possession of the Secretary and we do not even know how many of these proxies were returned. All proxy forms issued by the Company are still available; the whereabouts of the Jones forms are unknown, so no post-electoral audit is possible.
Even if the Jones proxies were recovered they were not reconciled with properly submitted official proxy forms. We cannot determine the number of double votes arising from this.
5 Doubts about the issuing of voting papers and counting of votes cast from the floor at the AGM
On registering at the AGM Members who had not already submitted a proxy form were to be given a pink voting slip and were reminded during the meeting by the Secretary that they must not use the pink slip if they had already sent in their proxy form. It is not clear that this system succeeded in eliminating double voting. During the counting of votes the tellers did not distinguish between votes arising from the G15 proxy form and those made with pink forms on the day. The voting results supplied to the Secretary therefore include both sets of votes in a combined total and so includes votes from an unknown number of G15 proxy forms which must be disregarded as well as votes from the pink slips which may or may not be valid.
Whilst invoking infringements of the Company’s Articles seems a bit like nitpicking the fact that Gareth Jones collected the G15’s proxy forms and delivered them himself to the AGM is a very serious transgression of acceptable electoral procedure in any situation - would you, at the next General Election, accept a home made voting slip from Gordon Brown, then give it back to him, relying on his promise to properly register your vote? No I don’t think so. Would you then feel aggrieved by Mr Brown, if he failed in his promise? This is a serious error of judgement on the part of the G15 and clearly invalidates every vote submitted on the G15 proxy, which as we have seen was in any case invalid for several more reasons.
I am not suggesting that the G15 actually indulged in voting malpractice in any way (there is no possibility of an independent audit of the votes as neither the G15 proxy forms nor the pink voting slips were returned to the Secretary). That is not the point. The fact is that the G15 proxy forms were invalid, and cannot be made valid. The fact is that even if they were valid, they were not reconciled with the properly lodged proxy forms. The fact is that votes cast by members in the meeting cannot be verified and no separate measure of them was delivered to the meeting. These cannot be re-assessed. The fact is that the nomination papers of Messrs Davies, Gray and Jones were invalid and cannot now be made valid. The elections of Messrs Davies, Gary and Jones were invalid on any one of the above mentioned grounds, and that cannot be changed.
The valid proxy votes for the election of Directors were as follows:-
J H Davies For 25 Against 34
S J Gray For 12 Against 36
D G Jones For 16 Against 35
Messrs Jones, Gray and Davies cannot therefore be regarded as legitimately elected Directors of the Company and, should the EGM resolution fail, the Company had better quickly organise a new election to legitimise their position. Until this is done they should take no further part in the management of the Company.
I apologise for the extreme length of this post but it is important that Members understand exactly why the Election was invalid. On a personal note I would like to add that the entire voting procedure was fatally compromised, on both sides of the great divide, by insufficient attention to correct process. There is no doubt that the aggressive behaviour of the G15 before and during the AGM, which they treated as a form of ambush, contributed greatly to this outcome.
Edited 1 times. Last edit at 03/16/09 01:28PM by Mike Clark.