Cody v Live Board Holdings Limited [2014] NSWSC 78

Cody v Live Board Holdings Limited [2014] NSWSC 78

The company board did not have the power and authority to issue the shares the subject of the 3 September 2013 share issue because neither the necessary 75% approval of the affected class (ordinary shareholders) was obtained pursuant to the constitution, nor was there approval by a simple majority of shareholders as required by the shareholders' agreement. Further, purported consent via prior commitments or capital raising provisions did not amount to the assent required for the share issue.

Jurisdiction
Australia
Judgment Date
17 February 2014
Procedural Posture
Application for Declaratory Relief / Principal Judgment
Outcome
Application for declaration refused.
Legal Topics
['share Capital' 'issuing of Shares' 'corporations Constitution' "shareholders' Agreements" 'class Rights Variation']
['corporations Law' 'equity'] ['share Capital' 'issuing of Shares' 'corporations Constitution' "shareholders' Agreements" 'class Rights Variation']

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Procedural Posture

Application for Declaratory Relief / Principal Judgment

Legal Issues

  1. 1 ['Whether the company board had the power and authority to make and authorise the 3 September 2013 share issue' "Whether the issue of shares complied with the requirements of the company's constitution and shareholders' agreement" "Effect of non-compliance with class rights provisions in constitution and shareholders' agreement"]

Ratio Decidendi

The company board did not have the power and authority to issue the shares the subject of the 3 September 2013 share issue because neither the necessary 75% approval of the affected class (ordinary shareholders) was obtained pursuant to the constitution, nor was there approval by a simple majority of shareholders as required by the shareholders' agreement. Further, purported consent via prior commitments or capital raising provisions did not amount to the assent required for the share issue.

Court Disposition

Application for declaration refused.

Orders

  • []