Hillig v Darkinjung [2006] NSWSC 594

Hillig v Darkinjung [2006] NSWSC 594

The purported removal of directors, appointment of the applicant as sole director, and amendment or repeal of the constitution by the Administrator (on behalf of the Land Council as shareholder) are ineffective, as the decisions were subject to Provisos requiring approval by the members of the Land Council, which did not occur. Section 125(1) of the Corporations Act does not render such constitutional Provisos redundant or cure failure of compliance as they restrict the organs' powers internally and not the powers of the company as a corporate entity. An Administrator under the Aboriginal Land Rights Act cannot alone satisfy the requirements for member resolution required by the company...

Parties
Plaintiff/applicant: Peter Hillig in his capacity as Administrator of Darkinjung Local Aboriginal Land Council; First Defendant/respondent: Darkinjung Pty Ltd (ACN 107 719 522); Second Defendant/respondent: Jeffrey John Bradford; Third Defendant/respondent: David Pross; Fourth Defendant/respondent: Greg Flanders; Fifth Defendant/respondent: George Alexander Watts; Sixth Defendant/respondent: Michael Stuart Jones
Jurisdiction
Australia
Judgment Date
15 June 2006
Procedural Posture
Corporations (equity) Proceeding / Interlocutory Applications (final Determination of Main Issue for Interlocutory Purposes)
Outcome
Defendants succeeded; orders as sought substantially in their interlocutory process will be made. Applicant's interlocutory applications for contrary declarations dismissed. Application to strike out notice of solicitor's appearance dismissed, with liberty to re-apply appropriately.
Legal Topics
Removal of Directors, Amendment of Company Constitution, Statutory Interpretation—corporations Act S 125, Validity of Company Constitutions' Further Requirements, Aboriginal Land Council Functions and Powers
Corporations Law Equity Removal of Directors Amendment of Company Constitution Statutory Interpretation—corporations Act S 125 Validity of Company Constitutions' Further Requirements Aboriginal Land Council Functions and Powers

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Parties

Peter Hillig in his capacity as Administrator of Darkinjung Local Aboriginal Land Council

Plaintiff/applicant

Darkinjung Pty Ltd (ACN 107 719 522)

First Defendant/respondent

Jeffrey John Bradford

Second Defendant/respondent

David Pross

Third Defendant/respondent

Greg Flanders

Fourth Defendant/respondent

George Alexander Watts

Fifth Defendant/respondent

Michael Stuart Jones

Sixth Defendant/respondent

Procedural Posture

Corporations (equity) Proceeding / Interlocutory Applications (final Determination of Main Issue for Interlocutory Purposes)

Legal Issues

  1. 1 Whether s 125(1) of the Corporations Act 2001 (Cth) cures invalidity arising from failure to comply with company constitution requirements for removing directors and amending the constitution (the 'Provisos')
  2. 2 Whether an Administrator of a Local Aboriginal Land Council can satisfy the Provisos or cause them to cease applying
  3. 3 Whether the Provisos are repugnant to or inconsistent with the Aboriginal Land Rights Act 1983 (NSW)

Ratio Decidendi

The purported removal of directors, appointment of the applicant as sole director, and amendment or repeal of the constitution by the Administrator (on behalf of the Land Council as shareholder) are ineffective, as the decisions were subject to Provisos requiring approval by the members of the Land Council, which did not occur. Section 125(1) of the Corporations Act does not render such constitutional Provisos redundant or cure failure of compliance as they restrict the organs' powers internally and not the powers of the company as a corporate entity. An Administrator under the Aboriginal Land Rights Act cannot alone satisfy the requirements for member resolution required by the company...

Court Disposition

Defendants succeeded; orders as sought substantially in their interlocutory process will be made. Applicant's interlocutory applications for contrary declarations dismissed. Application to strike out notice of solicitor's appearance dismissed, with liberty to re-apply appropriately.

Orders

  • Orders 1-10 sought in defendants' interlocutory process filed 29 May 2006 to be granted (detailed orders to be settled by short minutes).
  • Plaintiff's applications filed 1 June 2006 (paras 1 and 2) and 24 May 2006 dismissed as explained.