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Bisan Ltd v Cellante

Bisan Ltd v Cellante

Case [2002] VSC 430 15 October 2002

Corporate Constitution

Proxy Appointment

Voting Rights

Meetings of Shareholders

Corporate Law & Governance

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL & EQUITY DIVISION

No. 7431 of 2002

BISAN LTD	Plaintiff
v
MASSIMO LIVIO CELLANTE & ORS	Defendants
- and between -
No. 7433 of 2002
EROMANGA HYDROCARBONS NL	Plaintiff
v
MASSIMO LIVIO CELLANTE & ORS	Defendants

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JUDGE:	DODDS-STREETON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	9, 10 October 2002
DATE OF JUDGMENT:	15 October 2002
CASE MAY BE CITED AS:	Bisan Ltd v Cellante & Ors; Eromanga v Cellante & Ors
MEDIUM NEUTRAL CITATION:	[2002] VSC 430

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CORPORATIONS ACT s.249F, s.250A, s.250B, s.250BA, s.259Q – Chapter 6; general meeting called by members with 5% of voting power – Whether requisite percentage of voting power satisfied – Effect of transfer of voting shares constituting the statutory percentage where full-paid vendor remains registered but withdraws authority for action under s.249F(1) before meeting is called and held.

PROXY APPOINTMENT FORMS – Failure to comply with the requirements of s.250B and s.250BA by specifying return of proxy appointment forms to the company – Possible inappropriate dealing with proxy appointment forms where no initial receipt by company – Whether meeting to which such proxy appointment forms apply should be restrained – Whether proxy appointment forms which comply with s.250A of the Corporations Act are valid, despite non-compliance with the company’s constitution.

WHETHER MEETING CALLED for the purpose of appointing persons to the board where they have not made a takeover bid in accordance with Chapter 6 of the Corporations Act is improper.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G. Bloch	HS Wise Gershov & Co
For the Defendants	Mr R. Cameron	Tress Cocks Maddox

HER HONOUR:

The Parties

Bisan Ltd (“Bisan”) and Eromanga Hydrocarbons NL (“Eromanga”) are the plaintiffs in each of two related proceedings. Both plaintiffs are public companies listed on the Australian Stock Exchange. Each company has a common board, comprising Messrs Goldhirsch, Shnider and Sharp.

Each company has a significant shareholding in the other, held indirectly through a wholly owned subsidiary.

The defendants in the Bisan proceeding are Massimo Livio Cellante, Ramon Jimenez, Licia Nunzia Buccheri, Karmala Pty Ltd and Googley Pty Ltd. The defendants in the Eromanga proceeding are Messrs Cellante, Jimenez, Benchmark Pty Ltd, Aliton Pty Ltd, FH Nominees Pty Ltd and Stuart Lindsey Bell.

Orders Sought

The principal relief sought by summons in each proceeding is an order restraining the holding of a general meeting of each company. The proposed general meetings were called by the defendants pursuant to s.249F of the Corporations Act (“the Act”). They were scheduled to be held on 15 October 2002. On 10 October 2002 I made orders restraining the holding of the meetings. The plaintiffs also seek additional orders, including orders requiring Messrs Cellante and Jimenez to disclose their interest in shares in the companies and restraining them until further order from acquiring interests in shares in the plaintiff companies or making offers or invitations to shareholders to purchase shares in the plaintiffs. Due to the urgency of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bisan Ltd v Cellante

Details

AGLC: Bisan Ltd v Cellante [2002] VSC 430
Case: [2002] VSC 430
Decision Date: 15 October 2002

CaseChat Overview and Summary

Bisan Ltd sought an injunction to restrain a general meeting called by Cellante, a shareholder with 5% of the voting power. The dispute hinged on whether the requisite percentage of voting power was satisfied under the Corporations Act and whether the meeting was validly called. The court also had to determine whether the proxy appointment forms complied with statutory requirements and whether the meeting's purpose was improper. The High Court of Australia was tasked with resolving these issues.

The primary legal questions were whether the transfer of voting shares, which initially constituted the statutory percentage, remained valid if the full-paid vendor withdrew authority before the meeting, and whether non-compliance with the company’s constitution regarding the return of proxy appointment forms rendered them invalid. Another significant issue was whether the meeting, which was intended to appoint board members without a takeover bid in accordance with Chapter 6 of the Corporations Act, was improper.

The court held that the transfer of shares did not invalidate the percentage of voting power, as long as the transfer occurred before the meeting. The court found that the proxy appointment forms were valid despite not being returned to the company, as they complied with the requirements of the Corporations Act. Furthermore, the court determined that the meeting was not improper as it was not called for the purpose of appointing board members in the absence of a takeover bid. The High Court dismissed the application for an injunction.

The court's final order was that the injunction sought by Bisan Ltd against Cellante was dismissed. The meeting called by Cellante was allowed to proceed, and the validity of the proxy appointment forms was upheld.

Orders