Case: Re Ariadne Australia Ltd [1991] 2 Qd R 377
Outcome: distinguished
for NSX submits that even if the directors did not, within the twenty one day period, call the general meeting, they completed the performance of the s 249D duty of calling a meeting when the notices of the meeting were sent to shareholders on 27 April 2009. Counsel relies on Re Ariadne Australia Ltd [1991] 2 Qd R 377 (Ariadne). I accept that following 17 April 2009 it remained within the power of the directors to convene a general meeting of NSX on 27 May 2009. This is because cl 10.2 of NSX's constitution provided: The Directors may convene a general meeting of the Company whenever they think fit and must convene a meeting when requested by Members in accordance with the Corporations Act . I do not understand NSX to contend that its directors did "convene" (as distinct from "call") the general meeting scheduled for 27 May 2009 any earlier than when the notices of general meeting were dispatched on 27 April 2009. (As noted earlier, NSX distinguishes between "call" and "convene", submitting that the directors "called" the meeting on 17 April 2009.) In any event, since I have rejected the supposed distinction between "call" and "convene", in my view the directors did not convene the meeting prior to 27 April 2009. Ariadne is distinguishable. In that case, decided on s 241 of the Companies (Queensland) Code , a shareholder, having requisitioned a meeting that the directors had failed to convene within the 21 day period, sought an injunction restraining them from convening the meeting following the expiry of that period. The application was dismissed. However, in that case the requisitionist had not exercised the default power to convene the meeting himself. Cooper J said (at 380) that he did not construe s 241 as prohibiting the directors "from discharging, albeit belatedly the duty cast upon them by s.241(1), and a duty which is ongoing in terms of Article 40 of the Articles of Association". Article 40 is not set out in the reported judgment. I assume that it gave the directors a general power to convene meetings as cl 10.2 of NSX's constitution does. It is doubtful that his Honour was saying that s 241(1) directly imposed an obligation on the directors that continued to operate after expiry of the 21 day period. It may be, however, that by reason of their general duties as directors they were obliged in the circumstances of that case to convene the meeting notwithstanding the expiry of that period. In the present case, once the defendants issued their own notice of meeting on 18 April 2009, the directors ceased to be under a duty of any kind themselves to convene a competing meeting, notwithstanding their undoubted power to do so under cl 10.2. It has not been suggested that there was any good reason for the directors to exercise their cl 10.2 power to call, or complete the calling of, a meeting by sending out the notice of meeting on 27 April 2009. After all, by Monday 20 April 2009 they knew that the defendants had themselves called a meeting to consider the resolutions identical to those which the directors were proposing to have considered at any meeting to be called by them. In the result, it is not shown that the Court should make any order having the effect of facilitating the holding of the meeting on 27 May 2009. The fourth defendant submitted that the directors have acted oppressively toward the members generally, and the defendants in particular, and that an order should be made under s 233(1)(c) of the Act to the effect that the meeting fixed for 27 May 2009 shall not proceed. So far as the evidence reveals, the directors acted in good faith, believing on legal advice that they had "called" a general meeting on 17 April 2009. I have no hesitation in rejecting the suggestion of oppression. There is no cross claim by the defendants and they have not suggested a form of order or a source of power (other than s 233(1)(c) referred to above) for the making of an order in relation to the meeting presently called by the directors for 27 May 2009. I will allow the parties an opportunity to consider these reasons and the question whether an order against the defendants is required. The application should be dismissed. [On 22 May 2009 when the order of dismissal was made, counsel for NSX sought an opportunity to make submissions on costs, and directions were made to that end. Subsequently by consent the Court ordered that the plaintiff pay the defendants' costs.] I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 1 June 2009 Counsel for the Plaintiff: Mr J K Kirk Solicitor for the Plaintiff: Blake Dawson The First Defendant appeared in person Solicitor for the Fourth Defendant: Mr B McNab of Aldgate Lawyers The Fifth Defendant appeared in person Date of Hearing: 19 May 2009 Date of Judgment: 22 May 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/584.html