Londish v Sheahan & Lock in Re Valofo Pty Ltd

Londish v Sheahan & Lock in Re Valofo Pty Ltd involved a dispute over the appointment of directors and the subsequent appointment of voluntary administrators. The parties to the case were Londish, who sought a declaration that the administrators were not duly appointed, and Sheahan & Lock, the appointed administrators. The dispute centred on the validity of the administrators' appointment following the purported appointment of directors by the company, Valofo Pty Ltd. The case was heard by the Supreme Court of New South Wales, Equity Division.

The court was required to determine whether the purported appointment of directors, and consequently the administrators, was valid. The critical issue was whether a notice signed by the sole shareholder, purporting to appoint a new director, constituted a valid resolution under section 249B of the Corporations Act 2001. Additionally, the court needed to decide whether section 447A or section 1322 of the Corporations Act could be used to validate the ineffective appointments.

The court held that the notice signed by the sole shareholder was not a formal decision of the company as required under section 249B, but rather a unilateral act of the shareholder under a misconceived power. Consequently, the director was not validly appointed, and the administrators' appointment was also invalid. The court further found that section 447A could not be used to validate the removal and appointment of a director, as it was not designed for such purposes. Additionally, section 1322 only allowed for corrections of procedural matters, not substantive appointments, thus the appointment of directors could not be validated under that section.

The court's final orders declared that the administrators were not duly appointed, and the court's decision effectively nullified their appointment. This ruling had significant implications for the external administration of Valofo Pty Ltd, leaving the company without validly appointed administrators and necessitating further action to resolve its financial difficulties.