Case: Peters' American Delicacy Co Ltd v Heath (1938-1939) 61 CLR 457
Outcome: followed
argument appears to owe something to perceptions which led to the assertion (now abandoned) that the explanatory memorandum was misleading or deceptive and that this was a basis for invalidating the resolution. In Peters' American Delicacy Co Ltd v Heath (1938-1939) 61 CLR 457, similar arguments were considered and discarded. At 489-491, Latham CJ said: It is next objected that the statements made by the chairman and the solicitor for the company in the speeches which they made at the meeting were misleading. The objections to the speeches cover much of the same ground as objections to the circular. ... but in my opinion the answer to these objections (as also to the objections against the circular) is that the whole matter was fully discussed and debated at the meeting. The directors put their views through the chairman and the company's solicitor. A solicitor and another speaker for the objectors contested the statements of the chairman and of the company's solicitor, contended that the proposed alteration would be unfair to the partly paid shareholders ... Thus it appears to me that the whole matter was put before the shareholders. They were given quite full information. Any further information which they desired was available to them, including the opinions of counsel. No charge of fraud or of bad faith is made, or, if made, could on the evidence be supported. There is no evidence that the alteration was made with the object of oppressing a minority or to deprive a minority of its rights. ... Even if it should be held that some of the statements made in speeches at the meeting were inaccurate, it would, in my opinion, be a dangerous thing for a court to declare that such a circumstance invalidated a resolution passed at a meeting of the shareholders of the company. Whenever a controversy arises as to what is the wisest course to pursue, and particularly when the matter in issue involves the alteration of existing rights (real or supposed), statements will probably be made on each side which the other side regards as unfair or inaccurate and which may in fact be unfair or inaccurate. There is, in my opinion, no authority to support the proposition that the fact that statements which are not true in fact were made at a shareholders' meeting has the effect of invalidating a decision reached at the meeting. If this were the law, then, as two inconsistent statements can never both be true, it would only be necessary for any dissentient shareholder to make a statement or series of statements which were plainly inconsistent with other statements made at the meeting in order to procure the invalidation of any resolution passed. Similarly, at 514, Dixon J said: But the fact that a description honestly made of the exact legal result arising from the existing articles is thought by the Court to be capable of conveying an incorrect impression is no sufficient ground for treating as void special resolutions duly notified, proposed and passed. The plaintiffs submit that had the votes been taken separately the outcome might have been different. This is pure speculation. The evidence clearly indicates to the contrary. In particular, no member other than City Pacific and Contra Proferentum expressed any opposition to the motion being put in the form appearing in the notice of motion. There was no suggestion that any entity other than Trilogy should be considered for appointment as the replacement responsible entity. The notice of meeting was given well in advance of the meeting. Had any member wished to propose different resolutions he or she could have done so. Had members felt that they would prefer to consider the two questions separately, and to vote on them separately, they could have asked for the opportunity. Whether or not it was granted may have depended upon the views of the members. It may have been necessary that there be another meeting. These were all questions for the members to consider at the meeting. It was open to persons who had cast proxy votes prior to the meeting to withdraw their proxies by attending at the meeting and voting on the basis of the additional information provided by the BT defendants and the information provided by the plaintiffs.