Scottish & Colonial Ltd v Australian Power & Gas Co Ltd & Ors [2007] NSWSC 1266

Scottish & Colonial Ltd v Australian Power & Gas Co Ltd & Ors [2007] NSWSC 1266

Section 203D of the Corporations Act 2001 mandates that a resolution to remove a director of a public company requires compliance with its procedural provisions, including two months’ notice; the company constitution cannot provide an alternative procedure inconsistent with these requirements. As the required statutory notice was not given, the proposed removal of directors at the meeting was invalid.

Jurisdiction
Australia
Judgment Date
05 November 2007
Procedural Posture
Injunction Application (equity) / Determination of Separate Question Prior to Trial; Judgment on Further Amended Cross Claim
Outcome
Permanent injunction granted; proposed removal resolutions restrained; court to conduct directions hearing on costs and remaining claims.
Legal Topics
['directors—removal by Members' 'statutory Procedure for Removal of Directors' 'corporate Governance' "general Meeting—shareholders' Powers" 'permanent Injunction—shareholder Resolutions']
['corporations Law' 'equity'] ['directors—removal by Members' 'statutory Procedure for Removal of Directors' 'corporate Governance' "general Meeting—shareholders' Powers" 'permanent Injunction—shareholder Resolutions']

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Procedural Posture

Injunction Application (equity) / Determination of Separate Question Prior to Trial; Judgment on Further Amended Cross Claim

Legal Issues

  1. 1 ['Whether removal of directors by resolution at a general meeting called by a single director is effective absent compliance with s 203D(2) of the Corporations Act 2001' 'Interaction between Corporations Act s 203D and company constitution regarding director removal']

Ratio Decidendi

Section 203D of the Corporations Act 2001 mandates that a resolution to remove a director of a public company requires compliance with its procedural provisions, including two months’ notice; the company constitution cannot provide an alternative procedure inconsistent with these requirements. As the required statutory notice was not given, the proposed removal of directors at the meeting was invalid.

Court Disposition

Permanent injunction granted; proposed removal resolutions restrained; court to conduct directions hearing on costs and remaining claims.

Orders

  • ['Order separating determination of the question regarding removal of directors at general meeting.' 'Answer to separate question: general meeting cannot remove any director from office (as called by Mr Bellman for 15 November 2007).' 'Permanent injunction restraining consideration of resolutions 1, 2 and 3 at the...