MCC Members

The Members Voice

SGM 

1 December 2020

G W Lavender Esq
Chief Executive & Secretary Marylebone Cricket Club Lord's Cricket Ground
St Johns Wood Road London
NW8 8QN

1 October 2020

Dear Mr Lavender

SGM: Member Requisition

Our Ref: JHC/vh/48264.54
Tel: 020 3375 7000
Fax: 020 3375 7408
Email: james.carleton@farrer.co.uk

By Email: guyw.lavender@mcc.org.uk

Thank you for sending through the form of purported Member’s requisition which contains the wording of the proposed Resolution being put forward by way of requisition of 180 Members under the banner MCC Together.

This letter sets out our advice to you and the MCC Committee on the form of resolution put forward and why it is not in a valid form that can be accepted by the MCC Committee and put to Members. As discussed, we have reviewed matters with Leading Counsel who has settled this letter.

The role of the MCC Committee

  1. The MCC’s Royal Charter and the Rules make it clear that the entire management and control of the property, funds and affairs of the Club is vested in the MCC Committee. The MCC Committee has therefore vested in it an original authority to act on behalf of the Club's Members in accordance with the Rules (see paragraph 10 of the Royal Charter and Rule 13.1 of the Rules). In return, the Members are entitled to expect that the MCC Committee will run the Club in accordance with the terms of the Charter and Rules and that the procedures set out in the Royal Charter and the Rules will be followed.

  2. A power vested by the constitution of the MCC exclusively in the Committee cannot be effectively exercised, nor can its exercise by the MCC Committee be controlled or interfered

Farrer & Co LLP 66 Lincoln's Inn Fields London WC2A 3LH Telephone +44 (0)20 3375 7000 Facsimile +44 (0)20 3375 7001 DX 32 Chancery Lane Website www.farrer.co.uk

Farrer & Co LLP is a limited liability partnership registered in England and Wales, registered number OC323570, and is authorised and regulated by the Solicitors Regulation Authority (ID 447822). A list of the members of the LLP is displayed at the above address, together with a list of those non-members who are designated as partners.

48264/54/4130-1960-5288.1

1 October 2020

with, by an ordinary resolution of the Members. It would however be possible for the Members, by altering the Rules, to give directions to the MCC Committee. An alteration to the Rules is only possible if a Resolution is passed by a Special Majority (see Rule 29.1 and paragraph 2(g) of the Charter). Even if it could be argued that a resolution passed by Special Majority (that is to say by not less than two-thirds of the votes cast by Members entitled to vote) directing the MCC Committee how to act in a particular matter amounted to an ad hoc variation of the Rules (which is doubtful), that would only be possible if any such resolution was passed by Special Majority.

  1. If a resolution proposed by Members seeks to amend the Rules, it is important that the text of the proposed changes to the existing Rules is set out (or the text of the replacement Rules is set out). There is otherwise fundamental uncertainty as to the proposed changes which would invalidate the resolution.

  2. The MCC Committee are required to call an SGM where all the requirements of Rules 21 and 22 have been met. This includes that any written requisition by Members to consider a Resolution sets out to the reasonable satisfaction of the MCC Committee the matters to be discussed at the meeting and the full text of any Resolutions to be proposed and if thought fit, passed at the meeting (see Rule 22.1 (iii)).

Form of Resolution received

5. The text of the resolution contained in the form of purported requisition, is worded as a single resolution (“the Resolution”) and is made up of a preamble and three parts, (a), (b) and (c).

For ease, we set out the wording in full below:

“To consider and, if thought fit, to approve the following Resolution:

Throughout its history the MCC has been a Member-controlled Club, with the majority of the MCC Committee directly elected by Members.

The MCC Committee is now seeking to remove this control, using the mechanism of the NomCo selection process, as laid out by the Committee in Item 9 of the Agenda for the 2020 AGM.

In these circumstances, this meeting resolves:

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1 October 2020

  1. (a)  that MCC will, at all times, remain a Member-controlled Club with a clear majority of members of the MCC Committee directly elected by the membership as a whole.

  2. (b)  that the MCC Committee set up a Working Party comprising three MCC Committee members, three Members not at present on any committee, and an independent chairman who is not a member of a committee. This Working Party will have a six-month mandate to consider and recommend to Members governance changes that retain Members control over the affairs of the Club for adoption at the 2021 AGM.

  3. (c)  that if this Resolution is approved, the MCC Committee will implement it in full without delay.”

  1. The preamble to what appears to be a composite Resolution (made up of various parts) reflects the current status quo under the Rules and which may or may not be altered as a result of the SGM to be held on 15 October 2020 (albeit it remains, of course, the case that the MCC remains a Member controlled Club and will always remain a Member controlled Club as only the Members are able to alter the Rules to effect change in accordance with its constitution).

  2. Part (a) of the Resolution appears to be an attempt to reverse the proposed Rule changes which are currently before Members to be considered at the SGM to be held on 15 October. In those circumstances, it would on any basis require a Special Majority to be passed. However, as indicated above, it suffers from a fundamental defect in that it is unclear as to how the members of the MCC Committee should be directly elected by the membership as a whole. To constitute a valid proposed amendment to the Rules it should identify which Rules are to be amended and in what manner ie it should set out the text of the proposed changes in full to the Rules, as has been done in respect of the Notice of SGM (or set out in full the replacement Rules).

  3. Parts (b) and (c) of the Resolution appear to be an attempt to direct the MCC Committee to act in a particular way. As indicated above, this represents an attempt to interfere with management powers which are vested by the constitution in the MCC Committee and not in the Members in general meeting. There would certainly be no question of the MCC Committee being required to abide by the outcome of any vote passed by a bare majority. It would require a Special Majority.

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Conclusion

Given the deficiencies in the Resolution, it does not currently set out a valid resolution for consideration by the Members. The Committee is not required to convene a meeting if its purpose is to pass an ineffective resolution. Indeed, to do so would be confusing to Members given it is not clear which set of Rules the changes are to address, whether it would be binding, what the process for change would be and what the Rules (under part (a)) would be.

On the basis that the MCC Committee will wish to ensure that Members are afforded the opportunity (particularly where the required number of requisitionists’ signatures have been provided) to debate valid matters of concern to Members, it would be sensible promptly to engage with the requisitionists to explain the deficiencies in the proposed Resolution. This will allow them to reformulate a valid form of Resolution to be proposed to the Members and to clarify that the Resolution would require a Special Majority. It will be clear after the SGM vote has taken place on 15 October whether the current proposals before the Members for changes to the governance arrangements of the Club have been approved by the Members or not. There will be clarity as to which set of Rules governs the MCC.

If not approved on 15 October 2020, it may be that the requisitionists no longer wish for a SGM to be convened as it would appear that there would be no purpose in doing so when the Rule changes to which they object have not been passed.

If the Rule changes are passed on 15 October 2020, the requisitionists could formulate changes to those new Rules in their requisition. As indicated above, that would only be possible if proposed and passed as a Resolution passed by a Special Majority (as defined by paragraph 2(g) of the Royal Charter).

Alternatively, if the requisitionists’ intention is only to require the MCC Committee to set up a working group to consider and make recommendations of governance changes in the future, then a resolution could be formulated which solely dealt with that matter. That, again, would only be possible if proposed and passed as a Resolution passed by a Special Majority.

Yours faithfully

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This is the substance of the Farrer Opinion on the Member SGM Resolution submitted with 180 supporting signatures:-

 

 

1 November 2020

This is a copy of an e-mail sent to MCC Secretary Guy Lavender and copied to the Club Chairman, concerning the unlawfulness of the recent virtual SGM. The author is a distiguished lawyer with vast experience of MCC affairs having bene a member of several sub-committees and ex-Chairman of MCC Rules Committee.

 

Dear Guy -

Although I am still awaiting a response to my emails of 17 and 23 October, I really cannot delay any longer telling you in a little more detail why the SGM was invalid and why the governance resolution cannot stand and is ineffective, with the result that the proposed rule changes concerning governance have not been validly made. I can, if required, give further explanations of any of the points made below.

Each and every one of the following matters invalidates the proceedings and the resolution supposedly passed at the SGM.

1. Article 12 of the Royal Charter requires MCC to manage the affairs of the Club in accordance with the Rules and Regulations. It is clear from the matters set out below that the Rules and Regulations have been broken in a number of respects and, accordingly, the Club is in breach of the terms of the Royal Charter.

2. Further, Article 11 of the Royal Charter requires that Meetings of the Members shall be convened and conducted in accordance with the Rules. The SGM was neither convened nor conducted in accordance with the Rules and, accordingly, for this reason also the Club is in breach of the terms of the Royal Charter.

3. Rule 23.1: The amendments made to the Rules by the MCC Committee did not comply with the Rule (R 29.2) permitting the Committee to make changes in circumstances where a Rule ‘becomes repugnant or contrary to law or inconsistent with the provisions of the Royal Charter’. Any such amendments can be made ‘only to the extent necessary to avoid such conflict with the law or the Royal Charter’. In any other circumstances, any rule change has to be by resolution passed at a General Meeting by a Special Majority (R 29.1).

i)       Rule 23.1 was purportedly amended to reduce the quorum from Fifty to Two. This was not necessary to avoid a conflict with the law and therefore this rule change is invalid.

ii)      At the time that amendment must have been made (presumably prior to 14 September 2020, the date of the Notice for the SGM), The Health Protection (Coronavirus, Restrictions) (No 2) (England) Regulations 2020 (as amended) were in force. Those regulations, amongst other things, permitted an unlimited number of people to gather indoors or outdoors if ‘the gathering is reasonably necessary for work purposes’. (The SGM papers and your speech at the SGM wrongly purported to rely upon The Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 in support of the rule changes, but that Regulation and its restrictions had been revoked on 4 July 2020 and replaced by the above; the new regulations were not an amendment.)

iii)     On 14 September The Health Protection (Coronavirus, Restrictions) (No 2) (England) (Amendment) (No 4) Regulations 2020 came into force at 12:01am (shortly before the Notice of AGM was given that day), providing, for the first time, for the Rule of Six which meant that no-one could participate in a gathering inside or outside of more than six people, subject to various exceptions including where a ‘gathering is reasonably necessary for work purposes’. The rule change was wrongly and invalidly made by the Committee. Either there was a limit of six or there was no limit at all.

iv)    On 14 October (the day prior to the SGM), The Health Protection (Coronavirus, Local COVID-19 Alert Level) (Medium) (England) Regulations came into force. These regulations replaced the previous regulations; they were not an amendment They placed London in Tier 1 which prevented a gathering inside or outside of more than six people subject to certain exceptions which included a ‘gathering reasonably necessary for work purposes’, in which event there was no maximum size imposed. Again, therefore, either there was a limit of six or there was no limit at all.

v)     On no basis, therefore, and at no time, was it necessary to reduce the quorum for the SGM to Two in order to avoid a conflict with the law.

4.   Rules 24.1 and 24.3: These amendments added permission for online voting and stated how it should take place. There was no legal requirement for online voting such that its omission would have caused any breach of the law. (No doubt it was convenient and, in some ways, to be welcomed, but this does not overcome the hurdle of necessity in Rule 29.2. Any such amendment should be proposed to Members at a General Meeting.)

5.   Rule 24.4: This amendment defining voting by a ‘show of hands’ in a particular, unnatural, way in relation to Resolutions could be valid under Rule 29.2 but only in circumstances where there was a limit on attendance in person. But if the SGM was a gathering reasonably necessary for work purposes, there was no limit on attendance. If it was not for work purposes, the limit of Six was broken (by those attending the SGM in the Long Room in the Pavilion in person).

6.   Also in relation to amendments for a ‘show of hands’, even if such an amendment could have been validly made, it was made in relation to, and restricted to, the wrong Rule (R24.4). There could never have been a show of hands vote on the Resolution at the SGM as the Committee had stated that the sole Resolution before the SGM was of sufficient importance to justify postal voting. The correct Rule would have been Rule 24.10 which requires a show of hands only by Members ‘present in person’ at the meeting but this Rule was not amended.

7.   Although the SGM papers stated that Members were not permitted to attend in person, there was no amendment to Rules 2.7(a)(iv) and 2.7(c)(iii), or to Rule 13.3, as there should have been, to prevent attendance in person. And if, in law, there was no restriction on numbers (if the meeting was reasonably necessary for work purposes), there also needed to be an amendment to Rule 2.7(a)(i)(II) but no such amendment was made. 

8.   In summary on this aspect, the amendments purportedly made to the rules were neither permitted nor valid and the means through which the SGM was conducted was either contrary to law or full attendance by Members (socially distanced and other Covid-related precautions applying) would have been lawful. If it was thought (possibly wrongly) that there was a limit of two or six, this law must have been broken because more than six people were present in the Long Room and in the Pavilion as a whole and the attendees and organisers would therefore have committed criminal offences and be subject to the relevant statutory fines. In any event, there is a question as to whether the SGM was reasonably necessary, given that such meeting could have taken place at any future time, there was no date by which it had to take place (unlike with an AGM), and many people, as I understand it, would have been content for, and in fact wished, the matter of governance changes to be dealt with at next year’s AGM.

9.   The postal voting forms were issued by MCC in breach of the Postal Voting Regulations as they were defective in requiring such forms to be returned by a deadline of Noon two days before the SGM. But Regulation 3.1 of the Postal Voting Regulations imposes a deadline of Noon the day prior to the SGM. As a result, some Members might have been disenfranchised if their voting papers had arrived between the two deadlines and were not counted or if any Members decided not to post their forms believing they would not beat the earlier erroneous deadline.

10. The full adjournment motion was, wrongly, not put to a vote and the correct procedure for dealing with this motion was not followed, resulting in improper prejudice against the motion and invalidating its result.

 i) The motion made was to ‘adjourn this meeting without any vote being taken on the Committee’s resolution’. However, the motion then advanced to the meeting by those in the Long Room, and stated in the online directions and voting question, was simply to ‘adjourn the SGM’, wrongly missing out a crucial part of the motion. Members thought, and in fact were wrongly told, that votes already cast would stand, so that an adjournment would have been a waste of time – see point 11 below.

ii) The normal procedure for a motion is that, prior to the vote, the proposer makes his case, the opposition makes its case and then the proposer deals with any points that arise from the opposers’ response. I was denied the opportunity to deal with the obviously incorrect points made by the opposers (as the telephone line to me had been cut) and it is clear that the Members voting must have been left with the wrong impression.

11.  It was wrongly stated that votes already cast would stand. This would have made Members believe that votes on the adjournment motion would have been a waste of time, thus encouraging them to vote against the proposed adjournment or abstain. While Regulation 3.5 of the Postal Voting Regulations states that ’returned postal voting forms may not be amended or withdrawn…’ by the voting Member, there is nothing to prevent the Committee (or Members through a vote) cancelling them in suitable circumstances. This is precisely what the adjournment motion called for but, as stated above, it was wrongly characterised to the Members. (In the Chairman’s email of 11 June 2020 to Members prior to the AGM on 24 June after postal voting had opened, he stated ‘Rather than offering Members an opportunity to recast their votes for the AGM later this month based on revisions to the Rule changes, the Committee has taken the view that the Resolution should simply be withdrawn’. Thus the Chairman then correctly accepted that the Committee could cancel votes to allow Members to recast them for a resolution at an adjourned meeting.)

12. The correct adjournment process as per the Rules was not followed. The wrong process was followed and the correct process, in accordance with the Rules, was ignored. The Assistant Secretary (Membership & Operations) prayed Rule 24.4 in aid but this is wrong as it refers to a Resolution being put to the vote of a meeting unless it is subject to postal voting, or to proxy voting where, before or on the declaration of the result of a show of hands, a poll is demanded. Rule 24.4 could not cover the adjournment motion because it was not a Resolution - a resolution at an SGM needs 180 requisitionists - and it was not a vote connected with proxy voting. The correct rule (as stated in point 6 above) was Rule 24.10 which relates to voting by ‘Members present in person at a General Meeting’. The Members voting electronically on the adjournment motion were not present in person, and no amendment had been made to this Rule. Thus the vote on the adjournment motion was invalidly held by the Club.

13.  The online voting procedure was not sufficiently explained such that some Members were disenfranchised. It was explained that ‘below the viewing box on YouTube you will be able to see a clickable link’ and a graphic was shown. However, some Members could not see or find that link as it was invisible to anyone watching the proceeding at full screen or on a television. The procedure to find the link in these circumstances was not explained. Moreover, (as stated in point 10 above) those Members who were able to see the clickable link were given the wrong voting choice; no clickable box was presented for Members to be able to vote for the motion, i.e. to ‘adjourn this meeting without any vote being taken on the Committee’s resolution’.

14.  The Explanatory Notes in the SGM documentation were incomplete and misleading such that any ‘decision’ of the Members cannot stand.

i)       The statement that ‘the four independent members of Nomco will have an inbuilt majority on Nomco’ was misleading because, as was explained at the meeting, one of those four would be appointed by the Committee and thus would not be independent and would not be seen to be independent.

ii)      Further, while the emphasis was on the supposed safeguard of Nomco (with some elected members) choosing some Committee Members, it was misleadingly kept from Members that the proposed Rules allow the Committee to appoint all its own members, with no Nomco involvement.

iii)     In addition, it was stated that ‘Members retain control of the composition of the MCC Committee through the approval/rejection process’. This is not true in practice because it is clear that, as nominees who are not selected by Nomco (via its secret process) will wish to keep their identities confidential, there will be only one person put forward for ‘approval/rejection’ to Members for each available position. Members will have no reason to reject; there will be no choice from which they could select. The rejection/approval process will be a sham.

It is clearly the law that the Committee is duty bound to ensure that Members have all the information they need to make an informed decision and that the Committee does not withhold any information which might reasonably be considered to have an impact on such a decision. The Committee has a duty of good faith towards Members and it must not mislead the Members or withhold key information from them.

The above three matters were explained at the meeting by those opposing the Resolution but were unknown to those - the vast majority - who had voted by post or online beforehand and who, therefore, were misled.

15.  The Chairman misled Members by saying he had not indicated there would be further consultation. In fact, on at least three occasions after withdrawing the governance resolution from the AGM, the Chairman confirmed there would be further consultation and debate. This was therefore expected and no doubt delayed the decision by some Members to requisition their own resolution to require further consideration of the best way forward for revising governance. The SGM was unnecessarily rushed forward before the precise form of the requisitioned resolution could be discussed, preventing both resolutions being discussed together in circumstances where Members would have the complete picture and be able to make an informed decision.

There might be additional points to make when I have received replies to my emails of 17 and 23 October.

This is a sad litany of defects and I am afraid it seems to be the result of a desire to push through amendments without due consideration of Members’ wishes and interests. We are essentially a members’ club and Members should be listened to. I hope that the Committee will accept that the SGM is void and that further consideration of necessary governance changes can take place over the next few months and then be brought back to the membership, perhaps at next year’s AGM at which time the requisitionists’ resolution (amended if necessary) could also be considered. If the Committee is now prepared to do what the Chairman indicated would happen but then reneged on, namely embark on consultation with Members, it may be that a fully worked, revised, governance scheme, approved by the Committee and a group of interested Members (probably including the main requisitionists), could be put to the 2021 AGM for approval.

The muddled and mistaken proposals put to the AGM and then withdrawn, and the hastily changed proposals put to an unlawful and ineffective SGM do MCC and its Committee no credit. It would be honourable and right for the Committee now to consign all this to the past and to move on with proper consultation and a new governance scheme that can enjoy the support of Members who are apprised of its advantages and any disadvantages or defects prior to voting.

As many Members are in touch with me concerning the SGM, I see no reason not to share this email with them.

 

Kind regards,

David Natali

 

 

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