Shearwood (Trustee), in the matter of Allied Resource Partners Pty Ltd v Allied Resource Partners Pty Ltd [2017] FCA 1451

Shearwood (Trustee), in the matter of Allied Resource Partners Pty Ltd v Allied Resource Partners Pty Ltd [2017] FCA 1451

Mr Shearwood was not appointed as a director by a Defaulting Shareholder; his removal under clause 15.3.1(b) was invalid. The removal did not constitute a procedural irregularity under s 1322 of the Corporations Act, but a substantive irregularity. He has remained a director since 2 June 2011, and the purported appointment of Mr Raftopulos as a director was also invalid.

Jurisdiction
Australia
Judgment Date
06 December 2017
Procedural Posture
Corporations Dispute / Final Judgment
Outcome
Application allowed; Declarations and orders as to board composition granted; Orders on costs and discontinuance made.
Legal Topics
['board Composition' 'director Removal' 'shareholders Agreement' 'company Constitution' 'procedural Irregularity' 'costs on Discontinuance']
['corporations' 'commercial Law'] ['board Composition' 'director Removal' 'shareholders Agreement' 'company Constitution' 'procedural Irregularity' 'costs on Discontinuance']

Case Brief

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Procedural Posture

Corporations Dispute / Final Judgment

Legal Issues

  1. 1 ['Whether the purported removal of the second plaintiff as a director of the first defendant was valid under the shareholders agreement and constitution' 'Whether the second plaintiff remains a director of the first defendant' 'Whether the purported appointment of the second defendant as director was valid' 'Whether procedural irregularities can be cured by s 1322 of the Corporations Act' 'Proper basis for costs on discontinued claims']

Ratio Decidendi

Mr Shearwood was not appointed as a director by a Defaulting Shareholder; his removal under clause 15.3.1(b) was invalid. The removal did not constitute a procedural irregularity under s 1322 of the Corporations Act, but a substantive irregularity. He has remained a director since 2 June 2011, and the purported appointment of Mr Raftopulos as a director was also invalid.

Court Disposition

Application allowed; Declarations and orders as to board composition granted; Orders on costs and discontinuance made.

Orders

  • ['Leave granted to discontinue claims as specified.' "Plaintiffs to pay first defendant's costs of discontinued claims up to 18 September 2017 on party and party basis, and from 19 to 26 September 2017 on indemnity basis." 'Plaintiffs barred from commencing proceedings on discontinued claims unless costs are paid...