National Electrical Contractors Association v Electrical and Electronic Group Training Ltd [1995] FCA 836

National Electrical Contractors Association v Electrical and Electronic Group Training Ltd [1995] FCA 836

The company had been deadlocked at board and membership level, and the remaining membership deadlock meant its affairs were being conducted contrary to the interests of the members as a whole, enlivening s 260(2). Winding up was not appropriate and court-ordered wholesale amendment of the articles was unnecessary; the preferable relief was to use s 260(2), including paragraph (k), to require Messrs Main and Gray, who held membership in the nature of trustees for the CEPU but refused CEPU directions, to resign so that the membership deadlock could be broken and the company could make any constitutional amendments its members considered appropriate.

Jurisdiction
Australia
Judgment Date
16 October 1995
Procedural Posture
Application Under S 260 of the Corporations Law Concerning the Affairs of a Company / Reasons for Judgment on Adjournment Application, Amended Application and Notice of Motion
Outcome
Adjournment application refused; orders made under s 260(2) requiring Gary Norman Main and Richard John Gray to resign as members, authorising District Registrar action if needed, convening a general meeting for CEPU-approved replacement members, dissolving the injunction, and otherwise dismissing the application.
Legal Topics
['corporations Law S 260' 'company Deadlock' 'interests of Members as a Whole' 'alteration of Articles of Association' 'winding Up' 'adjournment' 'resignation of Company Members']
['corporations Law' 'company Law' 'civil Procedure'] ['corporations Law S 260' 'company Deadlock' 'interests of Members as a Whole' 'alteration of Articles of Association' 'winding Up' 'adjournment' 'resignation of Company Members']

Case Brief

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Procedural Posture

Application Under S 260 of the Corporations Law Concerning the Affairs of a Company / Reasons for Judgment on Adjournment Application, Amended Application and Notice of Motion

Legal Issues

  1. 1 ['Whether the matter should be further adjourned pending new elections for some offices in the CEPU.' 'Whether deadlock at board and membership level meant the affairs of the respondent company were being conducted contrary to the interests of the members as a whole.' 'Whether winding up or alteration of the articles of association was appropriate relief under s 260(2) of the Corporations Law.' 'Whether orders should be made to require Gary Norman Main and Richard John Gray to resign as members so that the CEPU could replace them with members willing to give effect to its directions.']

Ratio Decidendi

The company had been deadlocked at board and membership level, and the remaining membership deadlock meant its affairs were being conducted contrary to the interests of the members as a whole, enlivening s 260(2). Winding up was not appropriate and court-ordered wholesale amendment of the articles was unnecessary; the preferable relief was to use s 260(2), including paragraph (k), to require Messrs Main and Gray, who held membership in the nature of trustees for the CEPU but refused CEPU directions, to resign so that the membership deadlock could be broken and the company could make any constitutional amendments its members considered appropriate.

Court Disposition

Adjournment application refused; orders made under s 260(2) requiring Gary Norman Main and Richard John Gray to resign as members, authorising District Registrar action if needed, convening a general meeting for CEPU-approved replacement members, dissolving the injunction, and otherwise dismissing the application.

Orders

  • ['That Gary Norman Main forthwith resign as a member of the respondent and in the event of him failing to do so by 4.00pm on 16 October 1995 a notice in writing in his name signed by the District Registrar for and on his behalf resigning his membership shall be treated as his resignation for the purposes of Article...