BI Constructions Pty Ltd v Shad & Anor; Bayeh v BI Constructions Pty Ltd [2010] NSWSC 484

BI Constructions Pty Ltd v Shad & Anor; Bayeh v BI Constructions Pty Ltd [2010] NSWSC 484

Mr Samir Bayeh was not validly removed as a director at the 13 July 2009 meeting since only a directors' meeting occurred and only members' meeting may effect removal. Subsequent meetings authorising commencement of proceedings and solicitor retainer were invalid due to lack of notice to Mr Bayeh as an ongoing director. There was no actual authority for Cambridge Law Group to be retained. Procedural irregularities were not excused under s 1322 due to deliberate exclusion of Mr Bayeh.

Jurisdiction
Australia
Judgment Date
18 May 2010
Procedural Posture
Civil / Interlocutory Judgment on Application Challenging Corporate Retainer and Procedural Motions
Outcome
Trust proceedings stayed for 21 days. Parties directed to deliver a management plan. Orders 1 and 2 on Mr Barrak's motion granted. Liberty to apply.
Legal Topics
['removal of Company Director' 'powers of Directors Vs Members' 'validity of Corporate Resolutions' 'solicitor Retainer and Authority' 'notice Requirements for Company Meetings' 'procedural Irregularities']
['corporations Law' 'equity'] ['removal of Company Director' 'powers of Directors Vs Members' 'validity of Corporate Resolutions' 'solicitor Retainer and Authority' 'notice Requirements for Company Meetings' 'procedural Irregularities']

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Procedural Posture

Civil / Interlocutory Judgment on Application Challenging Corporate Retainer and Procedural Motions

Legal Issues

  1. 1 ['Was Mr Samir Bayeh validly removed as director of BI Constructions Pty Ltd on 13 July 2009?' 'Did BI Constructions Pty Ltd validly resolve to commence trust proceedings and retain solicitors?' 'Was proper notice given for meetings authorising the commencement of proceedings?' 'Should procedural defects be cured under s 1322 of Corporations Act?']

Ratio Decidendi

Mr Samir Bayeh was not validly removed as a director at the 13 July 2009 meeting since only a directors' meeting occurred and only members' meeting may effect removal. Subsequent meetings authorising commencement of proceedings and solicitor retainer were invalid due to lack of notice to Mr Bayeh as an ongoing director. There was no actual authority for Cambridge Law Group to be retained. Procedural irregularities were not excused under s 1322 due to deliberate exclusion of Mr Bayeh.

Court Disposition

Trust proceedings stayed for 21 days. Parties directed to deliver a management plan. Orders 1 and 2 on Mr Barrak's motion granted. Liberty to apply.

Orders

  • ['Trust proceedings are stayed for 21 days.' 'Parties directed to bring in a management plan within 21 days in accordance with judgment.' "Orders 1 and 2 on Mr Barrak's motion of 17 March 2010 made." 'Liberty to apply granted.']