CellOs Software Ltd v Wong

In the case of CellOs Software Ltd v Wong, the Federal Court of Australia was asked to determine whether a notice of meeting issued by a group of shareholders of CellOS Software Ltd was valid. CellOS, an unlisted public company developing software with a significant portion of its shareholders based in Singapore, was served with a notice of intention to move resolutions for the removal of the entire CellOS board and to appoint alternative directors. The convening shareholders sought to call an extraordinary general meeting (EGM) in Melbourne on 2 March 2017, ahead of the scheduled annual general meeting (AGM) on 31 March 2017. CellOS brought an application seeking a declaration that the notice was invalid and an order restraining the convening of the proposed EGM.

The primary legal issue was whether the notice of meeting was procedurally irregular and, if so, whether the Court should declare it invalid. CellOS argued that the notice was irregular for three reasons: it incorrectly stated that proxy forms would only be valid if returned to a third-party intermediary, Link Market Solutions, instead of CellOS; it incorrectly stated that proxy forms must be received at least 72 hours prior to the EGM; and it outlined a process for the assessment of proxy forms by Link. CellOS contended that these irregularities could cause substantial injustice to shareholders, particularly those in Singapore who would likely vote by proxy.

The Court examined the statutory requirements under s 250B of the Corporations Act 2001 (Cth) and CellOS' constitution. It concluded that while the Act did not prohibit the use of an intermediary to facilitate the delivery of proxy forms, the notice in question effectively required the proxy forms to be assessed by Link, a third party not acting on behalf of CellOS. The Court found that the notice was procedurally irregular as it directed shareholders to entrust their proxy forms to a third party, which would assess and validate the proxy forms before delivering them to CellOS. The Court declared the notice invalid and restrained the convening of the proposed EGM. CellOS was ordered to send a notice to its shareholders, and the convening shareholders were ordered to pay CellOS' costs.

In summary, the Federal Court of Australia declared the notice of meeting invalid due to its procedural irregularities and restrained the convening of the proposed EGM. The convening shareholders were required to pay CellOS' costs. CellOS was also ordered to send a notice to its shareholders, informing them of the Court's decision and advising that the proposed EGM would not proceed.