Harpro Group Pty Ltd v BM Sydney Building Materials Pty Ltd [2018] NSWSC 603

Harpro Group Pty Ltd v BM Sydney Building Materials Pty Ltd [2018] NSWSC 603

Ms Le was validly removed as a director because the 16 June 2016 meeting was an adjourned meeting for the purpose of r 14.2, two members were present and constituted a quorum, and the resolution passed two votes to one. Any defect arising from setting the adjourned meeting for 16 June 2016 rather than 14 June 2016 was a procedural irregularity that did not invalidate the removal under s 1322, so the solicitors' retainer was not invalid on the basis advanced and the dismissal application failed. Because Harpro was impecunious, no evidence established that its impecuniosity was caused by the impugned conduct or that an order would stultify proceedings, and some discount was appropriate for...

Jurisdiction
Australia
Judgment Date
03 May 2018
Procedural Posture
Equity Technology and Construction List / Interlocutory Notices of Motion Seeking Dismissal, Declaration and Security for Costs
Outcome
Application to dismiss proceedings dismissed; declaration made that Ms Le was removed as a director of Harpro Group Pty Ltd; plaintiff ordered to provide security for costs of $60,000.
Legal Topics
['authority of Solicitors to Act for Company' 'removal of Director' "quorum at Members' Meeting" 'procedural Irregularity Under S 1322 of Corporations Act 2001 (cth)' 'security for Costs' 'impecuniosity' 'stultification of Proceedings']
['corporations' 'civil Procedure' 'costs'] ['authority of Solicitors to Act for Company' 'removal of Director' "quorum at Members' Meeting" 'procedural Irregularity Under S 1322 of Corporations Act 2001 (cth)' 'security for Costs' 'impecuniosity' 'stultification of Proceedings']

Case Brief

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Procedural Posture

Equity Technology and Construction List / Interlocutory Notices of Motion Seeking Dismissal, Declaration and Security for Costs

Legal Issues

  1. 1 ['Whether the proceedings should be dismissed because the solicitors purporting to act for Harpro Group Pty Ltd had not been validly retained absent instructions from Ms Le as a director.' "Whether Ms Le was validly removed as a director of Harpro Group Pty Ltd at the members' meeting on 16 June 2016." "Whether any departure from r 14.2 of Harpro Group Pty Ltd's Constitution was a procedural irregularity that did not invalidate Ms Le's removal." "Whether Harpro Group Pty Ltd should provide security for the defendants' costs and, if so, in what amount."]

Ratio Decidendi

Ms Le was validly removed as a director because the 16 June 2016 meeting was an adjourned meeting for the purpose of r 14.2, two members were present and constituted a quorum, and the resolution passed two votes to one. Any defect arising from setting the adjourned meeting for 16 June 2016 rather than 14 June 2016 was a procedural irregularity that did not invalidate the removal under s 1322, so the solicitors' retainer was not invalid on the basis advanced and the dismissal application failed. Because Harpro was impecunious, no evidence established that its impecuniosity was caused by the impugned conduct or that an order would stultify proceedings, and some discount was appropriate for...

Court Disposition

Application to dismiss proceedings dismissed; declaration made that Ms Le was removed as a director of Harpro Group Pty Ltd; plaintiff ordered to provide security for costs of $60,000.

Orders

  • ['Declare that Ngoc Anh Thu Le was validly removed as a director of Harpro Group Pty Ltd on 16 June 2016.' 'Order, pursuant to s 1322(4)A of the Corporations Act, that the removal of Ms Le as a director of Harpro Group Pty Ltd was not invalid by reason of contravention of r 14.2 of the Constitution of Harpro Group...