Bodikian v Sproule [2009] NSWSC 599

Bodikian v Sproule [2009] NSWSC 599

Although the plaintiffs' evidence did not establish, to the General Steel standard, a tenable basis for a valid corporate decision or application of the Duomatic principle to make Mr Bodikian and Mr Cassar directors and shareholders, their evidence supported a not obviously untenable case of estoppel by convention and promissory estoppel. If established at trial, those estoppels would prevent the defendants from denying that Mr Cassar could convene the 1 May 2009 shareholders' meeting and that Mr Bodikian and Mr Cassar could vote as one-third shareholders. The defendants therefore failed to show that SBC's claims were so untenable as to warrant summary dismissal or strike out.

Jurisdiction
Australia
Judgment Date
30 June 2009
Procedural Posture
Corporations List Proceedings Concerning Authority to Join SBC Developments Pty Ltd as Plaintiff and Retain Solicitors for It / Interlocutory Notices of Motion for Strike Out or Summary Dismissal Applying General Steel Principles
Outcome
Notices of motion dismissed.
Legal Topics
['replaceable Rules' 'appointment of Directors' 'issue of Shares' 'unanimous Informal Assent' 'duomatic Principle' 'estoppel by Convention' 'promissory Estoppel' 'summary Dismissal' 'validation Under S 1322']
['corporations' 'equity' 'practice and Procedure'] ['replaceable Rules' 'appointment of Directors' 'issue of Shares' 'unanimous Informal Assent' 'duomatic Principle' 'estoppel by Convention' 'promissory Estoppel' 'summary Dismissal' 'validation Under S 1322']

Case Brief

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Procedural Posture

Corporations List Proceedings Concerning Authority to Join SBC Developments Pty Ltd as Plaintiff and Retain Solicitors for It / Interlocutory Notices of Motion for Strike Out or Summary Dismissal Applying General Steel Principles

Legal Issues

  1. 1 ['Whether the individual plaintiffs had authority to join SBC Developments Pty Ltd as a plaintiff and retain Giles Payne & Co to act for it.' 'Whether informal unanimous assent of the shareholders was sufficient and present on the facts to appoint directors and issue shares under the replaceable rules.' 'Whether the defendants were estopped from denying that the individual plaintiffs were directors and one-third shareholders of SBC.' 'Whether any invalidity in the relevant meetings or resolutions should be cured under s 1322 of the Corporations Act 2001 (Cth).']

Ratio Decidendi

Although the plaintiffs' evidence did not establish, to the General Steel standard, a tenable basis for a valid corporate decision or application of the Duomatic principle to make Mr Bodikian and Mr Cassar directors and shareholders, their evidence supported a not obviously untenable case of estoppel by convention and promissory estoppel. If established at trial, those estoppels would prevent the defendants from denying that Mr Cassar could convene the 1 May 2009 shareholders' meeting and that Mr Bodikian and Mr Cassar could vote as one-third shareholders. The defendants therefore failed to show that SBC's claims were so untenable as to warrant summary dismissal or strike out.

Court Disposition

Notices of motion dismissed.

Orders

  • ["The defendants' notices of motion were dismissed." "The plaintiffs' costs of the two notices of motion are to be their costs in the proceedings."]