Grant v John Grant & Sons Pty Ltd [1950] HCA 54

Grant v John Grant & Sons Pty Ltd [1950] HCA 54

The appointment of Mrs. Dampney and Mrs. Arnott as directors was invalid as it was not made by extraordinary resolution as required by the articles. Consequently, the allotment of shares to them and their registration as shareholders for these shares were also invalid, as was the subsequent transfer of trust shares to them. The appointment of W. A. Grant as managing director was invalid due to the improper constitution of the board and invalid votes. However, the register was not ordered to be rectified in relation to transfers to D. F. Grant, who was validly appointed a director and shareholder. The majority's willingness to ratify acts did not validate actions not in compliance with...

Jurisdiction
Australia
Procedural Posture
Appeal / High Court of Australia Decision
Outcome
Appeal allowed with costs; cross-appeal dismissed with costs.
Legal Topics
["directors' Appointments" 'share Transfers' 'rectification of Share Register' 'managing Director Appointment' 'articles of Association' 'member Rights' 'pre Emptive Rights']
['company Law'] ["directors' Appointments" 'share Transfers' 'rectification of Share Register' 'managing Director Appointment' 'articles of Association' 'member Rights' 'pre Emptive Rights']

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Procedural Posture

Appeal / High Court of Australia Decision

Legal Issues

  1. 1 ["Whether the appointments of Mrs. Dampney and Mrs. Arnott as directors were valid under the company's articles of association." 'Whether the allotments of one hundred shares each to Mrs. Dampney and Mrs. Arnott were valid.' 'Whether the transfers of trust shares to the children of W. A. Grant were valid under article 16.' 'Whether the appointment of W. A. Grant as managing director at a salary of £2,000 per annum and a percentage of profits was valid.']

Ratio Decidendi

The appointment of Mrs. Dampney and Mrs. Arnott as directors was invalid as it was not made by extraordinary resolution as required by the articles. Consequently, the allotment of shares to them and their registration as shareholders for these shares were also invalid, as was the subsequent transfer of trust shares to them. The appointment of W. A. Grant as managing director was invalid due to the improper constitution of the board and invalid votes. However, the register was not ordered to be rectified in relation to transfers to D. F. Grant, who was validly appointed a director and shareholder. The majority's willingness to ratify acts did not validate actions not in compliance with...

Court Disposition

Appeal allowed with costs; cross-appeal dismissed with costs.

Orders

  • ['Decree in terms of paragraphs 1 (omitting reference to paragraph 19 of the statement of claim), 2, 3, 4, 5, and 6 of prayers in statement of claim.' 'Share register to be rectified by defendant company within twenty-eight days.' 'Cross-appeal dismissed with costs.']