McKerlie v Drillsearch Energy Ltd [2009] NSWSC 488

McKerlie v Drillsearch Energy Ltd [2009] NSWSC 488

The directors of Drillsearch did not have power under its constitution to postpone a general meeting; the purported resolution was invalid. The chairman's power to adjourn is subject to duties of good faith, proper purpose, and must be exercised in light of the circumstances at the meeting. The ASX announcement was misleading or deceptive as it falsely represented a binding board resolution and a postponement of the meeting, contravening s 1041H(1) Corporations Act.

Parties
First Plaintiff: James David McKerlie; Second Plaintiff: Glenluce Properties Pty Limited; First Defendant: Drillsearch Energy Limited; Second Defendant: Peter Penfold Simpson; Third Defendant: Peter Alan Wicks; Fourth Defendant: Russell David Langusch
Jurisdiction
Australia
Judgment Date
04 June 2009
Procedural Posture
Equity Proceedings – Corporations – Declaratory and Injunctive Relief / Final Judgment (awaiting Further Submissions on Orders)
Outcome
Plaintiffs entitled to declaratory relief. Further submissions required as to further appropriate relief/orders.
Legal Topics
General Meetings, Directors' Powers, Chairman's Duties, Adjournment of Meetings, Misleading and Deceptive Conduct, Financial Products, Trade or Commerce
Corporations Equity Consumer Protection General Meetings Directors' Powers Chairman's Duties Adjournment of Meetings Misleading and Deceptive Conduct +2 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 7 Authorities cited 18 Party arguments 2
Sign in to unlock

Parties

James David McKerlie

First Plaintiff

Glenluce Properties Pty Limited

Second Plaintiff

Drillsearch Energy Limited

First Defendant

Peter Penfold Simpson

Second Defendant

Peter Alan Wicks

Third Defendant

Russell David Langusch

Fourth Defendant

Procedural Posture

Equity Proceedings – Corporations – Declaratory and Injunctive Relief / Final Judgment (awaiting Further Submissions on Orders)

Legal Issues

  1. 1 Whether the directors of Drillsearch had power to postpone a duly convened general meeting
  2. 2 Scope and duties of chairman's power to adjourn the meeting
  3. 3 Whether ASX announcement was misleading or deceptive

Ratio Decidendi

The directors of Drillsearch did not have power under its constitution to postpone a general meeting; the purported resolution was invalid. The chairman's power to adjourn is subject to duties of good faith, proper purpose, and must be exercised in light of the circumstances at the meeting. The ASX announcement was misleading or deceptive as it falsely represented a binding board resolution and a postponement of the meeting, contravening s 1041H(1) Corporations Act.

Court Disposition

Plaintiffs entitled to declaratory relief. Further submissions required as to further appropriate relief/orders.

Orders

  • Declaration of invalidity of purported board resolution postponing the general meeting.
  • Declaration that Drillsearch engaged in misleading or deceptive conduct contrary to s 1041H(1) Corporations Act.