Link Agricultural Pty Ltd v Shanahan

In the case of Link Agricultural Pty Ltd v Shanahan, the dispute centred on the validity of a chairman's ruling and the procedural correctness of a director's appointment. The parties involved were Link Agricultural Pty Ltd, a company, and Shanahan, a shareholder, along with other shareholders and directors. The central issue was whether the chairman's ruling on 15 December 1997 was valid and if the votes cast via proxy were duly considered. Another issue was whether an ordinary resolution was sufficient for the appointment of a new director in place of McDougall.

The court had to decide whether the chairman's ruling on 15 December 1997 was valid and if the votes cast via proxy were properly considered. Additionally, the court examined whether the appointment of McCallum as a director required an ordinary or a special resolution under the Corporations Law and the company’s articles of association. The returning officer's evidence that an alternative count including the proxy votes would have elected Watson instead of Cox led the court to consider whether Watson was duly elected. The board's reliance on the company’s articles of association for requiring a special resolution for McCallum's appointment was also scrutinized.

The court ruled that the chairman's ruling on 15 December 1997 was invalid, aligning with the lower court's decision. Given the error in the chairman's ruling, the court found it appropriate to set aside the ruling and declare the votes validly cast, leading to Watson's election. The court also considered it open to declare McCallum duly elected due to the alternative count result. Regarding the second issue, the court concluded that the board's requirement for a special resolution for McCallum's appointment, based on the company's articles of association, was not in line with the Corporations Law, which permits an ordinary resolution for such appointments. Consequently, the court found the board's and chairman's actions to be erroneous.

The court ordered that the chairman's ruling on 15 December 1997 be set aside, the proxy votes be considered valid, and Watson be declared duly elected. Additionally, the court declared that McCallum's appointment did not require a special resolution and should have been valid under an ordinary resolution.