McPherson v Mansell - [1994] FCA 1080

DUNCAN JAMES McPHERSON, MICHAEL JOHN JAMES AND BERNARD GLENNON v. FRANK ERNEST
MANSELL, KENNETH JOHNSTONE, EDWARD STEELE, GEOFFREY KING NEWMA, JOHN ATKINSON
McAUSLAND AND BRYAN JONES
No. NG 3049 of 1994
FED No. 1080/94
Number of pages - 5
Corporations Law
(1994) 16 ACSR 261

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
BEAZLEY J

CATCHWORDS

Corporations Law - whether board of directors properly constituted - whether calling of extraordinary general meeting invalid - whether board of directors competent to postpone meeting where no provision of the regulations of the company confer such a power on the directors.

Corporations Law: ss 225(1); 251; 1322(4).

Smith v Paringahal Mines Limited (1906) 2 Ch 193
Bell Resources v Turnbridge Pty Ltd (1988) 13 ACLR 429

HEARING

SYDNEY
#DATE 25:2:1994
#ADD 10:5:1995

Counsel for the Applicant: Mr Stomo

Solicitors for the Applicant: Mr Stuart Coppock

Counsel for the Respondent: Mr Taylor

Solicitors for the Respondent: Messrs Walsh James

ORDER

the Big Brother Movement be joined as a respondent.
2. the amended notice of motion be otherwise dismissed.
3. the amended application be dismissed.
4. the applicants pay the respondents' costs including the costs of

the notice of motion.

Note: Settlement and entry of orders is dealt with in Order 36 of the

Federal Court Rules.

JUDGE1

BEAZLEY J The applicants are the directors of a company called the Big Brother Movement Limited. That company has a history, both here and in the United Kingdom, of at least 50 years in Australia and a little longer in the United Kingdom. Its objects have changed in the last 10 years. It was set up to effectively do good or charitable works in the wide sense of the term, by sponsoring young immigrants from the United Kingdom to Australia and has changed focus in recent years as a result of changes in the immigration scheme, to make awards for educational purposes.

A dispute has arisen in the company in recent times. The genesis of that dispute is not relevant to the present application but its manifestation is. That manifestation is that there are competing claims between persons who were in fact appointed as directors or who purported to be directors to actually sit upon the board. It was because of that dispute on 6 February 1994 that the applicants commenced the proceedings in this Court seeking a declaration that they are the properly constituted board of the Big Brother Movement Limited and an order restraining the first to fifth respondents from exercising any power, right or duty as a director of the board - the applicants disputing the valid appointment of the first to fifth respondents as directors.
The matter came before the Court urgently because extraordinary general meetings were scheduled to be held, on 28 February 1994 and on 1 March 1994. The validity of the calling of each of those meetings is in dispute in a way to which I will refer in a moment.
The applicants filed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading McPherson v Mansell

Details

AGLC: McPherson v Mansell [1994] FCA 1080
Case: [1994] FCA 1080
Decision Date: 25 FEBRUARY 1994

CaseChat Overview and Summary

In the Federal Court, McPherson and others sought to challenge decisions made by the board of directors of Mansell and others. The applicants aimed to compel the respondents to convene an extraordinary general meeting of the company, as well as to restrain the respondents from taking certain actions. The legal issues before the court centred on the proper constitution of the board of directors, the validity of the calling of an extraordinary general meeting, and the competence of the board to postpone the meeting in the absence of any provision in the company's regulations granting such power.

The court considered whether the board of directors was properly constituted and whether the calling of the extraordinary general meeting was valid. It also examined whether the board was competent to postpone the meeting in the absence of any specific provision in the company's regulations conferring such a power. The applicants argued that the board was not properly constituted, and therefore, any decisions made by it were invalid. They also contended that the board had no power to postpone the meeting, as this was not expressly provided for in the company's regulations.

The court found that the board of directors was properly constituted and that the calling of the extraordinary general meeting was valid. It also determined that the board was competent to postpone the meeting, as the power to do so was implied from the company's regulations. Consequently, the applicants' claims were dismissed, and the respondents were granted costs. The court ordered that the Big Brother Movement be joined as a respondent, the amended notice of motion be dismissed, the amended application be dismissed, and the applicants pay the respondents' costs, including the costs of the notice of motion.

Orders

Orders of the court

the Big Brother Movement be joined as a respondent.

2. the amended notice of motion be otherwise dismissed.

3. the amended application be dismissed.

4. the applicants pay the respondents' costs including the costs of

the notice of motion.

Note: Settlement and entry of orders is dealt with in Order 36 of the

Federal Court Rules.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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