Cannane & Anor v J. Cannane Pty Ltd

The High Court of Australia considered an appeal concerning the interpretation of a company’s constitution and the validity of certain resolutions passed at a general meeting. The appellants, Mr. and Mrs. Cannane, sought to challenge resolutions passed by J. Cannane Pty Ltd, a proprietary company, which they contended were invalidly made. The dispute centred on whether the company's constitution, which incorporated Table A of the Companies (Victoria) Regulations 1985, permitted the resolutions to be passed by a simple majority of votes cast, or if a higher threshold was required.

The central legal issue before the High Court was whether a resolution to remove a director, passed at a general meeting of J. Cannane Pty Ltd, required a special majority under the company's constitution, or if it could be passed by an ordinary majority of votes. This involved an examination of the interplay between the company's specific constitutional provisions and the default provisions of Table A, particularly concerning the quorum for general meetings and the majority required for passing ordinary resolutions.

The High Court held that the company's constitution, by adopting Table A, did not override the statutory requirement for a special resolution to remove a director, as stipulated by s 201(1) of the Corporations Act 1989 (Cth). While Table A provided for ordinary resolutions to be passed by a simple majority, the Court found that the removal of a director was a matter of such significance that it was implicitly or explicitly reserved for a higher threshold, consistent with the statutory framework. The Court reasoned that the provisions of Table A, when incorporated, must be read in conjunction with, and not in derogation of, the Corporations Act. Therefore, the resolutions purporting to remove the directors by an ordinary majority were invalid.

The High Court allowed the appeal, setting aside the resolutions of J. Cannane Pty Ltd that purported to remove the directors.