MINUTES of meetings often confuse the terms adjournment and termination though they have fundamentally different effects on the business of the meeting. This article seeks to set the record straight: when is a meeting adjourned and when is it terminated?

An adjournment is the suspension or discontinuance of the proceedings at a meeting in order to allow those proceedings to be reconvened at another time and place. An adjournment is to be distinguished from the termination of the meeting, which ends the meeting’s proceedings after the purpose for which the meeting was called has been completed. Once terminated, a meeting cannot be reconvened.

Adjournment and postponement

A distinction is also to be made between an adjournment and a postponement. A postponement refers to the suspension of the holding of the meeting itself and is to be contrasted with the suspension of proceedings that have already commenced, that is, an adjournment. Once a duly convened meeting has commenced it cannot be postponed. Where a meeting is invalid on the ground of improper notice or otherwise, it cannot be adjourned.

The point of adjournment

A meeting can be adjourned at any time after the meeting has commenced. The Articles of the Company usually address how a meeting may be adjourned and unless there is a provision to the contrary in the Company’s Articles, the power to adjourn is vested in the meeting, not the Chairman.

Table A Article 60 of the Companies Act sets out a standard meeting adjournment provision for companies. It states that where a quorum is not present within a half an hour of the time called for the meeting, the meeting is adjourned to the same day in the next week at the same time and place or such other day, time and place as the directors may determine. This provides some protection to shareholders against ill intention shareholders who may attempt to prevent the holding of the meeting. Further, Table A Article 63 of the Companies Act provides that the chairman with the consent of a quorate meeting, may adjourn the meeting. In some cases where it is possible to adjourn the meeting sine die, that is, without the appointment of a time and place for reconvening, this has the effect of ending all unfinished business. An adjournment to a fixed day, keeps the meeting alive for the transaction of business.

The period of adjournment should always be reasonable, in the circumstances, and not be used as a means of attempting to frustrate the purpose for which the meeting was called.

If a chair properly adjourns a meeting, the remaining shareholders cannot continue it and if shareholders decide to continue notwithstanding a proper adjournment, the business purported to be transacted thereafter will be held void. On the other hand, where the chair improperly seeks to adjourn it, the meeting can appoint a new chair and continue.

Status and effect of an adjournment

In law an adjourned meeting is considered a continuation of the original meeting and not a new meeting provided the original meeting was not terminated. So, where a defective proxy form was rejected at the outset of the original meeting, the proxy holder cannot claim to be recognised at the adjourned meeting, even if at the time of the adjourned meeting the defect had been cured. The general rule is that all business which could have been transacted at the original meeting may be transacted, without notice, at an adjourned meeting, even though the notice for such adjourned meeting was silent as to the purpose for which it was summoned. Where new business is to be taken up at the adjourned meeting which was not provided for in the original notice, a new notice must be provided.

The validity of an adjournment must be challenged before the reconvened meeting so that the shareholders cannot be said to have waived the invalidity or irregularity by reason of their participation in the reconvened meeting.

This meeting is terminated.

Gina Phillips-Black is a partner at Myers, Fletcher & Gordon and is a member of the firm’s Commercial Department. Gina may be contacted via gina.black@mfg.com.jm or www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice.