Is Class Voting Required Under Part 15A of the Companies Act 1993?

Abstract

Part 15A of the Companies Act 1993, although modelled upon Part 5.3A of the Australian Corporations Act 2001, made several changes. Some of these reflect reforms that had already been proposed for Part 5.3A. Others are deliberate departures. Lastly, some result from a decision to modify the drafting; either to simplify the expansive wording of the Australian model, or to make it consistent with the style of the 1993 Act. An unfortunate consequence has been that some of the changes in the latter category, although done with good intentions, are not only ambiguous, but, in some cases, seemingly have no meaning at all. One of these changes, the issue of the casting vote, was recently considered by the Court of Appeal in Grant and Khov v Commissioner of Inland Revenue. This article considers a related issue: Whether class voting is either required, or permitted, under s 239AK of the Act. In Australia (and the United Kingdom) a deliberate policy decision was made that class voting was not appropriate under a voluntary administration regime. However, for reasons which are unclear, the drafter inserted an express reference to class voting in s 239AK(2). The writer considers that there are strong arguments for concluding that class voting is required under Part 15A; in particular the wording used is much the same as has appeared in a succession of statutes dating back to 1870, all of which have been interpreted as making class voting mandatory. Ultimately however the writer concludes, when the context and purpose of Part 15A are examined, that s 239AK should not be interpreted as requiring class voting.