Zimmerman Holdings Pty Ltd v Cooney [2002] NSWSC 387

Zimmerman Holdings Pty Ltd v Cooney [2002] NSWSC 387

The purported appointment of Mr Baruch Rajwan as a director was of no effect because no notice of the directors' meeting had been given to the other director, no quorum was present, and Mr Yaqob Rajwan had no power alone to make the appointment. The meeting could not be treated as a general meeting because no notice had been given to Mr Barel. As only Mr Yaqob Rajwan was a director, he alone had no authority to bind the Plaintiff to retain Massey Bailey Solicitors or to institute the proceedings. The proceedings were therefore unauthorised and incompetent, and a stay pending possible ratification was not warranted.

Jurisdiction
Australia
Judgment Date
03 May 2002
Procedural Posture
Application by Company to Set Aside a Statutory Demand / Hearing of the Defendant's Notice of Motion Challenging the Plaintiff's Solicitors' Retainer and Seeking Dismissal as Incompetent
Outcome
Proceedings dismissed as incompetent; Massey Bailey Solicitors ordered to pay the Defendant's costs of the notice of motion and the proceedings.
Legal Topics
['statutory Demand' "solicitors' Retainer" "directors' Meeting" 'quorum' 'appointment of Director' 'company Authority' 'ratification' 'costs']
['corporations' 'civil Procedure'] ['statutory Demand' "solicitors' Retainer" "directors' Meeting" 'quorum' 'appointment of Director' 'company Authority' 'ratification' 'costs']

Case Brief

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Procedural Posture

Application by Company to Set Aside a Statutory Demand / Hearing of the Defendant's Notice of Motion Challenging the Plaintiff's Solicitors' Retainer and Seeking Dismissal as Incompetent

Legal Issues

  1. 1 ['Whether Massey Bailey Solicitors had authority to institute and prosecute the proceedings on behalf of the Plaintiff.' 'Whether Mr Baruch Rajwan was validly appointed as a director of the Plaintiff on 28 August 2001.' 'Whether the purported meeting on 28 August 2001 was a valid meeting of directors or could be treated as a general meeting of the company.' 'Whether one of two directors had authority to commit or bind the Plaintiff company to retain solicitors and commence proceedings.' 'Whether the proceedings should be stayed pending possible ratification at a general meeting or dismissed as incompetent.']

Ratio Decidendi

The purported appointment of Mr Baruch Rajwan as a director was of no effect because no notice of the directors' meeting had been given to the other director, no quorum was present, and Mr Yaqob Rajwan had no power alone to make the appointment. The meeting could not be treated as a general meeting because no notice had been given to Mr Barel. As only Mr Yaqob Rajwan was a director, he alone had no authority to bind the Plaintiff to retain Massey Bailey Solicitors or to institute the proceedings. The proceedings were therefore unauthorised and incompetent, and a stay pending possible ratification was not warranted.

Court Disposition

Proceedings dismissed as incompetent; Massey Bailey Solicitors ordered to pay the Defendant's costs of the notice of motion and the proceedings.

Orders

  • ['I order that the proceedings be dismissed as incompetent.' 'I order that Massey Bailey, Solicitors, pay the costs of the Defendant of the notice of motion filed by the Defendant on 3 April 2002 and of the proceedings.']