Sheref v UFC Trading Enterprise Pty Ltd - [2024] WASC 344

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   SHEREF -v- UFC TRADING ENTERPRISE PTY LTD [2024] WASC 344
CORAM:   HILL J
HEARD:   11 SEPTEMBER 2024
DELIVERED          :   13 SEPTEMBER 2024
PUBLISHED           :   19 SEPTEMBER 2024
FILE NO/S:   COR 113 of 2024
BETWEEN:   DINO SHEREF
First Plaintiff
GAVIN YONG KHOON YAP
Second Plaintiff
AND
UFC TRADING ENTERPRISE PTY LTD
First Defendant
YU LU
Second Defendant

Catchwords:

Corporations - Meetings - General meeting - Meetings convened of first defendant invalid for inadequate notice and lack of quorum - Meetings not called in accordance with company constitution or s 249D and s 249F of the Corporations Act 2001 (Cth) - Whether orders should be made under s 1322 of the Corporations Act 2001 (Cth) to validate resolutions passed at meetings - Turns on own facts

Corporations - Meetings - Application for court to order meeting under s 249G of the Corporations Act 2001 (Cth) - Whether impracticable to call meeting of the defendant’s shareholders - Whether directions should be given under s 1319 of the Corporations Act 2001 (Cth) that quorum satisfied if one member of company is present - Turns on own facts

Legislation:

Corporations Act 2001 (Cth) s 249D, s 249F, s 1319, s 1322

Result:

Application for orders under s 1322 of the Corporations Act 2001 (Cth) dismissed
Orders made for convening of meeting under s 249G of the Act

Category: B

Representation:

Counsel:

First Plaintiff	:	Ms M G S Crowley
Second Plaintiff	:	Ms M G S Crowley
First Defendant	:	No appearance
Second Defendant	:	Mr T J Poli

Solicitors:

First Plaintiff	:	Su & Co
Second Plaintiff	:	Su & Co
First Defendant	:	No appearance
Second Defendant	:	Kings Park Legal

Cases referred to in decision:

Amlaki FZ LLC v Pinnacle Network (Australia) Pty Ltd [2008] FCA 1491
Atkins v North Australian Aboriginal Justice Agency Ltd [2024] FCA 686
BI Constructions Pty Ltd v Shad & Anor [2010] NSWSC 484
Chalet Nominees (1999) Pty Ltd v Murray [2012] WASC 147
Re Opera Photographic Ltd [1989] 1 WLR 634
Re Pembury Pty Ltd [1993] 1 Qd R 125

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)

By an originating process dated 11 July 2024, the plaintiffs seek a range of orders in relation to the first defendant.[1] The primary relief sought, pursuant to s 1322 of the Corporations Act 2001 (Cth) (Act), concerns the validity of resolutions that were passed on 17 April 2024 and 24 May 2024, purporting to appoint the first plaintiff and the second plaintiff as directors of the Company. In the alternative, the plaintiffs seek an order and directions pursuant to s 249G and s 1319 of the Act for the court to convene a general meeting of the Company with the quorum to be constituted if one member holding at least 51% of the shareholding is present.
[1] In these reasons, I will refer to the first defendant as either UFC Trading or the Company.
For the reasons that follow, it is my view that:
(a)orders should not be made pursuant to s 1322 of the Act to validate any resolutions at the meetings of 17 April 2024 or 24 May 2024; and
(b)an order should be made pursuant to s 249G of the Act to convene a general meeting of the Company. At this meeting, pursuant to s 1319 of the Act, the quorum will be satisfied if one member of the Company is present.

Evidence on the application

In support of the plaintiffs' application, the plaintiffs relied on four affidavits:
(a)two affidavits of the first plaintiff, filed 12 July 2024 and 13 August 2024;
(b)an affidavit of the second plaintiff, filed 13 August 2024; and
(c)an affidavit of Man Yan Yu, filed 13 August 2024.
The second defendant filed two affidavits in opposition to the application: an affidavit of his solicitor, filed 25 July 2024, and an affidavit of the second defendant, filed 10 September 2024.
Schedules of objections to each of the affidavits were filed by both parties. This was because the affidavits contained significant amounts of hearsay evidence, as well as evidence of matters that were not centrally relevant to the issues raised in the proceedings. The parties agreed that the objections did not need to be specifically ruled on, but that the court should take account of these objections in assessing the weight to be given to this evidence. Ultimately, it has not been necessary to have any detailed regard to much of this evidence as it is not, in my view, of any significant assistance in resolving what are quite narrow issues that are raised by these proceedings.

Factual background

UFC Trading was incorporated on 25 June 2020.[2] It operates a Taiwanese-style fried chicken outlet, initially in Northbridge. Since its incorporation, a number of other UFC Trading companies have been incorporated which carry the name of the suburb in which they operate.
[2] Affidavit of Dino Sheref filed 12 July 2024, 'DS-1'.
Two Australian Securities and Investments Commission (ASIC) searches of UFC Trading were in evidence before me. The first, which is dated 28 March 2024,[3] discloses that at that time, there was one director of the Company (the second defendant); two secretaries (the second defendant and the second plaintiff); and two shareholders (the first plaintiff, who owns 80 shares, and Ms Zhang, who owns 20 shares). The extract records that both the first plaintiff and Ms Zhang beneficially own their shares. The second company extract is dated 23 April 2024.[4] The primary difference between the searches is that the second company search discloses that the second plaintiff was appointed as a director on 17 April 2024.
[3] Affidavit of Timothy James Poli filed 25 July 2024, 'TJP-1'.
[4] Affidavit of Dino Sheref filed 12 July 2024, 'DS-1'.
Despite the fact that both company extracts record that the shares are beneficially owned, the evidence before the court is that each of the shareholders hold the shares on trust. The first plaintiff holds the shares on trust for (at least) the second plaintiff and Ms Zhang holds her shares on trust for the second defendant.[5] There was a dispute between the parties as to whether the entirety of the first plaintiff's shares are held on trust for the second plaintiff, or whether some are also held on trust for the second defendant. In circumstances where neither party seeks any relief in respect of this issue, it is neither necessary nor appropriate for me to comment or attempt to resolve this issue in these proceedings.
[5] Affidavit of Dino Sheref filed 12 July 2024 [8] - [9], 'DS-11' p 96; Affidavit of Gavin Yong Khoon Yap
filed 13 August 2024 [37] - [40].
The affairs of UFC Trading are governed by a written constitution (Constitution).[6] Relevantly, the Constitution provides as follows:
[6] Affidavit of Dino Sheref filed 12 July 2024, 'DS-3A'.
(a)a director may be appointed by either the Company or the directors by passing a resolution to that effect (cl 10);
(b)a director may convene a general meeting of the Company at any time. A member may only call for or convene a meeting in accordance with the Act (cl 43);
(c)unless consent is given for shorter notice, at least 21 days' notice must be given of a general meeting to those persons entitled to notice under the Act. An accidental failure to give notice to a person or the non-receipt by that person of the notice does not affect the validity of the proceedings at the meeting or any resolution passed at it (cl 44);
(d)no business may be transacted at any time during a general meeting unless a quorum, which is specified as two members present in person or by proxy, representative or attorney and who are entitled to vote, is present (cl 47);
(e)where a quorum at a meeting is not present within 30 minutes after the time appointed for the meeting:
(i)where the meeting has been convened or called by a member or members, the meeting is automatically abandoned (cl 47.1), and
(ii)where the meeting has been convened by the directors, it stands adjourned to the same day at the following week at the time and venue notified to members in writing. If a quorum is not present within 30 minutes after the time appointed for the adjourned meeting, the meeting is automatically abandoned (cl 47.2);
(f)on a show of hands, each member present is entitled to one vote. On a poll, each member is entitled to vote one vote for every fully paid-up share held (cl 53);
(g)a resolution at a general meeting is decided on a show of hands, unless a poll is demanded by a member or members who represent at least 10% of the votes that may be cast on the resolution (cl 58);
(h)the Company can give notice to a member by posting the notice to the member or leaving it at the member's address shown in the register, or at a replacement address if one has been supplied (cl 151). A document is to be treated as being received if it is sent by post in Australia by regular prepaid post or registered post, six business days after it is posted (cl 152); and
(i)notice of a general meeting is required to be given to each member, each director, and the auditor of the Company (cl 155).
The evidence before me is that since about January 2024, the relationship between the second plaintiff and the second defendant has broken down. The reason for the breakdown in the relationship is in dispute, and it is not relevant to the issues raised on the originating process for this to be resolved.
On or about 16 April 2024, the plaintiffs sought advice from the accountant of UFC Trading as to how to appoint the second plaintiff as a director of the Company.[7]
[7] Affidavit of Dino Sheref filed 12 July 2024 [34] - [35].
As a result of that advice, a meeting occurred on 17 April 2024. The plaintiffs accept that no notice of this meeting was given to either Ms Zhang or the second defendant. In evidence before me was a document purporting to be minutes of meeting held on 17 April 2024. This document records that on 17 April 2024, a meeting was held at Suite 4, 1 Scarborough Beach Road, North Perth, that only the first plaintiff was in attendance at the meeting, and that the following resolution was passed:[8]
It was RESOLVED that, in the opinion of the shareholder, Gavin Yong Kun Yap be appointed as the director of the company UFC Trading Enterprise Proprietary Limited (ACN 642 072 731) with immediate effect.
[8] Affidavit of Gavin Yong Khoon Yap filed 13 August 2024, 'GY-20'.
On or about 22 April 2024, the second defendant's solicitors became aware of the purported appointment of Mr Yap and wrote to the plaintiff's solicitors demanding copies of any relevant documents.[9]
[9] Affidavit of Gavin Yong Khoon Yap filed 13 August 2024, 'GY-25'.
On 26 April 2024, the second plaintiff's solicitors wrote to the solicitors for the second defendant attaching, among other things, a notice of general meeting to be held on 24 May 2024 at Unit 1, 1 Scarborough Beach Road, North Perth.[10] The agenda for the meeting included the rectification of the appointment of the second plaintiff as a director of UFC Trading and the appointment of the first plaintiff as a director of that Company. The notice recorded that it was being sent to the shareholders (that is, Ms Zhang and Mr Sheref) at their addresses shown in the register, as well as to the second defendant (by his solicitors). The letter to Ms Zhang was sent by registered post to the address shown in the register. This letter was returned on 23 May 2024 by Australia Post with the note 'Unclaimed'.[11] The evidence is that this notice was also sent to the second defendant's solicitors and via WeChat to Ms Zhang's husband.[12]
[10] Affidavit of Gavin Yong Khoon Yap filed 13 August 2024, 'GY-26', 'GY-27'.
[11] Affidavit of Gavin Yong Khoon Yap filed 13 August 2024 [111.3], 'GY-31'.
[12] Affidavit of Gavin Yong Khoon Yap filed 13 August 2024 [111.2], 'GY-30'.
Prior to this meeting, the second defendant's solicitors advised the second plaintiff's solicitors that he would not be attending the meeting on 24 May 2024 as it was not a validly convened meeting. The reason given for this was that Mr Yap was not a director of the Company and the notice had not been issued in accordance with cl 43 of the Constitution. The second defendant's solicitors gave notice that they would deny that any resolutions put or said to be passed at this meeting would be valid.[13]
[13] Affidavit of Gavin Yong Khoon Yap filed 13 August 2024, 'GY-43'.
The evidence before the court is that the meeting scheduled for 24 May 2024 occurred. The plaintiffs tendered a document purporting to be the minutes of a meeting of UFC Trading convened on 24 May 2024. Each of the plaintiffs, together with Ms Man Yan Yu and Mr Su, the solicitor for the plaintiffs, were in attendance at this meeting. The minutes record that:[14]
(a)the Company secretary advised there was a quorum present in person or represented by proxy;
(b)the appointment of the second plaintiff as a director was rectified and backdated to 17 April 2024, which is noted as being carried by three votes to zero, and;
(c)the appointment of the first plaintiff as a director was rectified and backdated to 17 April 2024, which is noted as also being carried by three votes to zero.
[14] Affidavit of Dino Sheref filed 12 July 2024, 'DS-13'.
Since then, the parties (via their solicitors) have been in dispute as to whether the plaintiffs have been validly appointed as directors of the Company.
On 5 June 2024, the first plaintiff requested that the second defendant call a meeting of members pursuant to s 249D(5) of the Act.[15]
[15] Affidavit of Gavin Yong Khoon Yap filed 13 August 2024, 'GY-53', 'GY-55'.
On 26 June 2024, the first plaintiff received notice that a general meeting had been called to be held at midday on 5 August 2024 at the offices of Kings Park Legal.[16]
[16] Affidavit of Gavin Yong Khoon Yap filed 13 August 2024, 'GY-57'.
On 2 July 2024, the plaintiffs' solicitors wrote to Ms Zhang inviting her to sign a resolution of members. In the letter, the solicitors informed Ms Zhang that if she did not attend the meeting, it may be inquorate and that an application would then be made to this court for a court-ordered meeting. This letter was sent to Ms Zhang by registered post, with a copy sent to her husband via WeChat. There is no evidence before the court that Ms Zhang has responded to this letter or signed the resolution.
The general meeting of the Company was convened at midday on 5 August 2024 at the offices of Kings Park Legal. The plaintiffs, together with their solicitor. attended the meeting, as did the solicitors for the second defendant. Ms Zhang was not present at the general meeting nor did she appoint a proxy. The second defendant also did not attend the general meeting. In circumstances where no quorum was present, the general meeting was adjourned to the same day of the following week at the offices of the first plaintiff at Unit 4, 1 Scarborough Beach Road, North Perth, WA 6006.[17]
[17] Affidavit of Gavin Yong Khoon Yap filed 13 August 2024, 'GY-66'.
The adjourned meeting was convened on 12 August 2024. Once again, neither the second defendant nor Ms Zhang attended the meeting nor did Ms Zhang appoint a proxy. On the basis that there was no quorum at this meeting, the meeting was abandoned.[18]
[18] Affidavit of Gavin Yong Khoon Yap filed 13 August 2024 [155].

Was the meeting on 17 April 2024 a valid meeting?

The plaintiffs accept that no notice of this meeting was given to Ms Zhang or to the second defendant. Counsel for the plaintiffs contend that this was done on the advice of the Company's accountant (which they accept was incorrect). They also accept that there was no quorum at the meeting held on 17 April 2024. However, the plaintiffs say that each of these is a procedural irregularity that can be cured under s 1322(4) of the Act.
Section 1322 relevantly provides that:
(1)In this section, unless the contrary intention appears:
(a)a reference to a proceeding under this Act is a reference to any proceeding whether a legal proceeding or not; and
(b) a reference to a procedural irregularity includes a reference to:
(i) the absence of a quorum at a meeting of a corporation, at a meeting of directors or creditors of a corporation, at a joint meeting of creditors and members of a corporation or at a meeting of members of a registered scheme; and
(ii) a defect, irregularity or deficiency of notice or time.
…
(2)A proceeding under this Act is not invalidated because of any procedural irregularity unless the Court is of the opinion that the irregularity has caused or may cause substantial injustice that cannot be remedied by any order of the Court and by order declares the proceeding to be invalid.
…
(4)Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:
(a)an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation;
…
and may make such consequential or ancillary orders as the Court thinks fit.
…
(6)The Court must not make an order under this section unless it is satisfied:
(a)in the case of an order referred to in paragraph (4)(a):
(i) that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature;
(ii) that the person or persons concerned in or party to the contravention or failure acted honestly; or
(iii) that it is just and equitable that the order be made; and
(b)in the case of an order referred to in paragraph (4)(c)-that the person subject to the civil liability concerned acted honestly; and
(c)in every case—that no substantial injustice has been or is likely to be caused to any person.
I accept that this section can address the lack of a quorum at a company meeting, and provides a procedural mechanism by which an interested person can obtain certainty in the event of a dispute as to whether certain resolutions or acts are valid.[19] At the hearing before me, much of the argument focused on whether any substantial injustice has been, or is likely to be caused, by the irregularities. This is because unless I am satisfied of this, no order can be made under s 1322(4). On this basis, I address this issue first.
[19]Atkins v North Australian Aboriginal Justice Agency Ltd [2024] FCA 686 [575] (Charlesworth J).
In considering whether or not the lack of a quorum should be regarded as a procedural irregularity or a matter that gives rise to a substantial injustice that cannot be remedied by an order of the court, it is relevant to consider the circumstances that gave rise to the lack of the quorum.[20] In doing so, it is important to emphasise that it is the irregularity that must cause this substantial injustice and not the resolutions that have been passed at the meeting.[21] In addition, the injustice must be real and not merely theoretical.[22]
[20]Atkins v North Australian Aboriginal Justice Agency Ltd [2024] FCA 686 [575] (Charlesworth J).
[21]Chalet Nominees (1999) Pty Ltd v Murray [2012] WASC 147 [28] (Le Miere J), citing Re Pembury Pty Ltd [1993] 1 Qd R 125 (Byrne J).
[22]Chalet Nominees (1999) Pty Ltd v Murray [27] (Le Miere J).

The plaintiffs say that the failure to give notice of the meeting to the second defendant and Ms Zhang was not deliberate, as they were acting in accordance with what is now accepted by the plaintiffs to be the incorrect advice of the Company's accountant. Counsel for the plaintiffs submitted there was no substantial injustice caused by the inquorate meeting because the resolution that was passed simply added a director and because the outcome of the meeting was inevitable, given the first plaintiff's 80% shareholding.
For the following reasons, I do not accept this submission.
In this case, a number of matters contributed to the lack of a quorum at the meeting on 17 April 2024.
First, and most importantly, there was a complete failure to give any notice to either the second defendant (as a director of the Company), or to Ms Zhang (as the member of the Company), of the intention to convene a general meeting or the resolutions that would be considered. Given the absence of any notice, there was also non-compliance with the requirements of the Constitution and the Act as to the amount of notice required to be given and how notice was required to be given.
Second, the meeting was not convened in accordance with cl 43 of the Constitution which allows a member of the Company only to call for or convene a meeting in accordance with the Act. Division 2 of pt 2G.2 of the Act sets out a number of ways in which meetings of shareholders can be called. There are two relevant sections for the purpose of these proceedings, namely s 249D and s 249F.
Section 249D requires the directors of a company to call and arrange to hold a general meeting on the request of members holding at least 5% of the votes that may be cast at the general meeting. The directors are required to call the meeting within 21 days after receiving the request, which must be held not later than two months after the request is received.
As an alternative, pursuant to s 249F(1) of the Act, members with at least 5% of the votes that may be cast at the general meeting of the company may call, and arrange to hold, a general meeting. The members calling the meeting must pay the expenses of calling and holding the meeting. The meeting must be called in the same way, so far as is possible, in which general meetings of the company may be called.[23]
[23] Corporations Act 2001 (Cth) s 249F(2).
In this case, the meeting on 17 April 2024 was not called for or convened under s 249D and s 249F by the first plaintiff under the Act.
Third, the Constitution expressly deals with what is to occur at a meeting of shareholders if there is a lack of a quorum. The Constitution provides that where there is no quorum, the meeting is either adjourned or abandoned (depending on who called the meeting).
In my view, to allow s 1322 of the Act to be used to overcome the lack of quorum in these circumstances would not give proper effect to this clause.
A common feature in the authorities to which counsel for the plaintiffs referred is that the failure to give notice to a shareholder of the meeting is generally considered to constitute a substantial injustice.
By failing to give notice to the second defendant and Ms Zhang, each was denied the opportunity to attend the meeting, speak against the resolution, or attempt to persuade the first plaintiff to vote against the resolution.[24] Further, had notice been given to the second defendant or Ms Zhang of the meeting, each would have had an opportunity to consider their options as to the failure by the first plaintiff to comply with the requirements of the Constitution.
[24]BI Constructions Pty Ltd v Shad & Anor [2010] NSWSC 484 [37] (Slattery J).
Given these matters, I am not persuaded that no substantial injustice arose from each of the defects with this meeting or that any declaration should be made under s 1322 of the Act to validate the resolution passed at the meeting on 17 April 2024.

Was the meeting on 24 May 2024 a valid meeting?

In respect of this meeting, the plaintiffs accept that notice of the meeting was given by the second plaintiff, who is not a member of UFC Trading (and given my conclusion on the meeting of 17 April 2024, also not a director). It was not given by the first plaintiff, who is a member of the Company. The plaintiffs also accept that there was no quorum at this meeting. However, once again, the plaintiffs say that each of these is a procedural irregularity that can be cured under s 1322(4) of the Act.
Counsel for the plaintiffs referred me to a number of decisions where the courts have considered whether the lack of a quorum was a procedural irregularity or caused substantial injustice. Significant reliance was placed on the decision of Finkelstein J in Amlaki FZ LLC v Pinnacle Network (Australia) Pty Ltd, where his Honour took what was described as a 'pragmatic approach', where it would have been 'an exercise in futility' to require another meeting to be held when the outcome was inevitable.[25] The plaintiffs contended this was the position in this case.
[25] Amlaki FZ LLC v Pinnacle Network (Australia) Pty Ltd [2008] FCA 1491 [8].
I do not agree. In that case, there was no question as to whether the meeting had been properly called; the only issue was that the meeting was inquorate. This is a common aspect in many of the cases to which the plaintiffs referred, namely that there was no issue that the meeting had been properly called.
This is not that case. Many of the defects that affected the earlier meeting also arise in respect of this meeting. Once again, these defects have contributed to the lack of a quorum.
First, this meeting was, again, not convened in accordance with the Constitution or the Act. At the time the meeting was sought to be convened, the second plaintiff was neither a director nor a member of the Company. As such, the second plaintiff had no right or entitlement under the Constitution or the Act to convene any meeting of the Company.
Second, while notice was given to both the second defendant's solicitors and Ms Zhang in accordance with the Constitution of both the meeting and the resolutions to be put at the meeting, insufficient notice was given. Taking account of the deemed notice provisions contained in the Constitution, if the notice was sent by registered post on 26 April 2024, any meeting could not be held before 27 May 2024.
Third, prior to the date of the meeting, the plaintiffs were advised by the second defendant's solicitors that the meeting had not been validly convened and that the second defendant would not be attending the meeting.
Given the meeting was not convened or called in accordance with the Constitution or Act, I am not persuaded that the meeting that occurred on 24 May 2024 was a meeting of members of UFC Trading or that any order should be made under s 1322 of the Act. In my view, the second defendant and Ms Zhang were not required to waive the substantive defect in the calling of the meeting or attend a meeting that had not been convened in accordance with the Constitution or the Act. In my view, s 1322 cannot be used to validate resolutions passed at this meeting in these circumstances.

Should a meeting be convened by the court under s 249G of the Act?

Section 249G of the Act gives the court the power, on the application of any director or member entitled to vote at the meeting, the ability to order a meeting of the company's members to be called if it is 'impracticable' to call the meeting in any other way.
There are two components to this section. First, the applicant must show that it is 'impracticable' to call the meeting in any other way, and second, if this is established, the court has a discretion whether or not to order a meeting to be called.
Impracticability extends not only to the calling of the meeting but also the conduct of the meeting. The question as to whether it is impracticable to call or conduct a meeting is a factual question which requires the court to look at the circumstances of the particular case and consider whether, as a practical matter, the meeting of the company can be conducted.
Courts have exercised their discretion to order the calling and conduct of a meeting in circumstances where shareholders have refused to attend a meeting and so there is or will be no quorum for the meeting,[26] and also where there is a deadlock between directors.
[26] Re Opera Photographic Ltd [1989] 1 WLR 634 (Morritt J).
Counsel for the second defendant advanced two reasons as to why the court should not order a meeting to be called under s 249G of the Act. First, the dispute between the parties as to the beneficial ownership of the shares registered in the name of the first plaintiff. In his submission, the status quo should be maintained until this dispute is resolved. Second, the first plaintiff had only sought to convene one meeting in accordance with the Act and the Constitution. Nothing was preventing him from seeking to attempt this process again.
For the following reasons, I do not accept either of these submissions.
While I accept there was a dispute as to the beneficial ownership of the shares registered in the name of the first plaintiff, for three primary reasons, I do not consider this should prevent an order being made under s 249G of the Act.
First, the Constitution of the Company provides that it is the legal owner of the shares that is entitled to vote at a general meeting. There is no dispute that the first plaintiff is the registered owner of 80% of the issued shares in the Company.
Second, any dispute as to the extent of the beneficial ownership of the shares registered in the name of the first plaintiff will only be relevant in the event that a quorum is achieved at a meeting. Ordering a meeting to be convened under s 249G with a quorum of one shareholder does not prevent the other shareholder from attending and participating in the meeting if they so choose.
Third, ordering a meeting does not determine this question or prevent this question from being raised and determined. To date, no action has been taken by the second defendant in relation to this issue. In my view, it is not sufficient that he rely on the existence of this issue to prevent a meeting of the Company being called.
The evidence before the court is that the relationship between the parties has broken down. The plaintiffs have attempted to use the procedure under s 249D of the Act to convene a shareholders' meeting to consider resolutions for the appointment of additional directors. This meeting was abandoned because Ms Zhang and the second defendant failed to attend both the meeting and the adjourned meeting.
That is, while there is an alternative means of convening a meeting other than the use of s 249G of the Act, the first plaintiff has sought to use this means and have not been able to have the proposed resolutions considered or voted on because of the lack of quorum at the meeting. I am satisfied on the evidence before me that while the first plaintiff may be able to again seek to have a meeting of shareholders convened under s 249D of the Act, it is impracticable to do so because of the likelihood that Ms Zhang will not attend the meeting. In my view, Ms Zhang and the second defendant should not be permitted to use the quorum requirement to prevent the first plaintiff from exercising his rights to have these resolutions considered and voted on at any meeting of shareholders.
Unless an order is made by the court, I accept that the first plaintiff will not be able to have these resolutions put and considered at a general meeting of the Company. At present, the evidence is that the ongoing dispute between the parties is affecting the day-to-day management of the Company and that contradictory instructions are being provided to staff of the business. There is no evidence before the court that would enable an inference to be drawn that the parties will resolve their differences in the near future.
In these circumstances, I am satisfied that I should exercise my discretion under s 249G of the Act to order the calling of a meeting of shareholders of the Company. At the meeting, pursuant to s 1319 of the Act, a quorum shall be constituted by one member present in person or by proxy.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KC
Associate to the Honourable Justice Hill
19 SEPTEMBER 2024