BI Constructions Pty Ltd v Shad

BI Constructions Pty Ltd commenced proceedings against Shad, its former director, seeking damages for breaches of fiduciary duties and negligence. The dispute arose from Shad's removal as a director of BI Constructions and his subsequent conduct. The case was heard in the Supreme Court of New South Wales.

The central legal issue was whether the court had jurisdiction to hear the case given the alleged invalidity of the director's removal and the validity of the retainer of the solicitors representing BI Constructions. The court examined whether the resolution to remove Shad as a director and to commence proceedings against him was properly passed. BI Constructions' constitution and the replaceable rules of the corporation only authorised removal of a director by a meeting of members, not by the board.

The court found that Shad's removal by the board was invalid as it did not comply with the corporation's constitution and the replaceable rules. Additionally, the court held that the resolution to commence proceedings against Shad was also invalid as it was not properly noticed and therefore not validly passed. As a result, the retainer of the solicitors for BI Constructions was not validly established. Consequently, the court dismissed the proceedings for lack of jurisdiction.

No final orders were made as the proceedings were dismissed for lack of jurisdiction.