Ausam Resources Limited ABN 12 090 935 738 [2004] FCA 823

Ausam Resources Limited ABN 12 090 935 738 [2004] FCA 823

The Court held it appropriate to order the convening of a meeting for consideration of the scheme, as the advantages and disadvantages of the scheme were for shareholders to weigh. The Court was satisfied, under s 1322(4) and (6), that it was just and equitable and in good faith to validate the directors’ board resolutions despite non-compliance with the resident director requirement, as the contravention was outside the company’s control and substantial injustice would not result.

Jurisdiction
Australia
Judgment Date
26 May 2004
Procedural Posture
Corporations – Scheme of Arrangement Application / Application for Convening Meeting and Validation of Board Resolutions
Outcome
Orders made for convening of shareholders' meeting and validation of board resolutions.
Legal Topics
['scheme of Arrangement' 'validation of Board Resolutions' 'board Composition Requirements']
['corporations Law'] ['scheme of Arrangement' 'validation of Board Resolutions' 'board Composition Requirements']

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Procedural Posture

Corporations – Scheme of Arrangement Application / Application for Convening Meeting and Validation of Board Resolutions

Legal Issues

  1. 1 ['Whether a meeting of shareholders should be convened to consider a proposed scheme of arrangement under Part 5 of the Corporations Act 2001 (Cth)' 'Whether board resolutions relating to the proposed scheme of arrangement should be validated despite board composition not satisfying the statutory minimum of Australian resident directors']

Ratio Decidendi

The Court held it appropriate to order the convening of a meeting for consideration of the scheme, as the advantages and disadvantages of the scheme were for shareholders to weigh. The Court was satisfied, under s 1322(4) and (6), that it was just and equitable and in good faith to validate the directors’ board resolutions despite non-compliance with the resident director requirement, as the contravention was outside the company’s control and substantial injustice would not result.

Court Disposition

Orders made for convening of shareholders' meeting and validation of board resolutions.

Orders

  • ['Resolutions passed by the Plaintiff’s board on 16 April 2004 and 10 May 2004 are declared valid, subject to affidavit verifying relationship to the scheme.' 'Meeting of shareholders of the Plaintiff to be convened for considering the proposed scheme of arrangement.' 'Scheme booklet and notice of meeting approved...