Davison v Vickery's Motors Ltd (in Liq)

Davison (the appellant) sought to appeal to the High Court against a decision of the Supreme Court of New South Wales. The dispute concerned an agreement for the appellant to take shares in Vickery's Motors Ltd (in Liq) (the respondent company). The company, now in liquidation, argued that the appellant was a shareholder and thus liable for unpaid calls on those shares. The appellant contended that he had never become a shareholder, as his offer to take shares had been validly withdrawn before it was accepted.

The High Court was required to determine whether the appellant had become a shareholder of the company. This involved several subsidiary questions, including whether a director of the company had the authority to agree to sell shares to the appellant, whether the appellant's offer to take shares was validly withdrawn, and whether certain resolutions passed at a directors' meeting, which purportedly accepted the appellant's offer, were validly made, particularly in light of the use of a proxy for one of the directors.

The Court held that the appellant had not become a shareholder. It was found that the director who purported to agree to sell shares to the appellant lacked the authority to do so. Furthermore, the appellant's offer to take shares was validly withdrawn before any effective acceptance by the company. The Court also found that the directors' meeting at which the appellant's offer was purportedly accepted was not properly constituted, as the use of a proxy for a director was not permitted by the company's articles of association, rendering the resolutions passed at that meeting invalid.

Consequently, the appeal was allowed, and the orders of the Supreme Court of New South Wales were set aside.