In the matter of Keybridge Capital Limited

Keybridge Capital Limited was the subject of a dispute involving a general meeting of its members. The meeting was called to consider resolutions that would remove and replace directors. However, on the evening before the meeting, the directors resolved to appoint a voluntary administrator, believing the company was or was likely to become insolvent. The chairperson of the meeting, who was also a director, then opened the meeting and adjourned it sine die without any resolutions being put to the shareholders. Subsequently, shareholders present at the meeting elected a new chairperson who proceeded to put the resolutions to a vote. The central legal issues before the court were whether the adjournment sine die was within the chairperson's power, whether it was for a proper purpose, whether the meeting continued following the adjournment, and whether the resolutions were validly passed. Additionally, the court examined whether the directors had a proper basis for their opinion regarding the company's insolvency and whether the administrator was appointed for an improper purpose. If the appointment was valid, the court also had to decide whether to order the end of the administration.

The court determined that the adjournment sine die was not within the chairperson's power, as the meeting had already commenced and the chairperson lacked authority to adjourn it without shareholder consent. The adjournment was also not for a proper purpose, as it was intended to prevent the shareholders from considering the resolutions. Following the adjournment, the meeting was considered to have continued, and the resolutions were validly passed by the shareholders. The court further found that the directors did not have a proper basis for their opinion on the company's insolvency, and the administrator was appointed for an improper purpose. Consequently, the court ordered that the administration is to end, and the company is to be returned to its members.