Wilson v Manna Hill Mining Co Pty Ltd - [2004] FCA 912

FEDERAL COURT OF AUSTRALIA
Wilson v Manna Hill Mining Company Pty Ltd
[2004] FCA 912
CORRIGENDUM
WAYNE STEPHEN WILSON & ANOR v MANNA HILL MINING COMPANY PTY LTD & ORS
No S 3004 of 2003
LANDER J
14 JULY 2004 (CORRIGENDUM 26 JULY 2004)
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

S 3004 OF 2003

BETWEEN:

WAYNE STEPHEN WILSON
FIRST APPLICANT

GAYLE LAWTON
SECOND APPLICANT

AND:

MANNA HILL MINING COMPANY PTY LTD
(ACN 075 590 644)
FIRST RESPONDENT

DAVID GERALD MOORE
SECOND RESPONDENT

GRAHAM DESMOND HAGGER
THIRD RESPONDENT

EAST ADELAIDE COMPANY PTY LTD (ACN 010 070 612)
FOURTH RESPONDENT

DENE ROBERT SPRATT
FIFTH RESPONDENT

STEPHEN JOHN EWEN
SIXTH RESPONDENT

HODGEMORE PTY LTD (ACN 092 397 629)
SEVENTH RESPONDENT

MANNA HILL GOLD PTY LTD (ACN 106 678 540)
EIGHTH RESPONDENT

JUDGE:

LANDER J

DATE:

14 JULY 2004

PLACE:

ADELAIDE

CORRIGENDUM
1.On page 22 paragraph 136 of the reasons for judgement, after the word “director” at the end of the first sentence, insert the words “in regard to the events to that date. They have sought a declaration that her removal ‘as a director of Manna Hill Mining Company Pty Ltd on or about 10 June 2003 is void and of no effect’. I will address the events of that day later”.

I certify that the preceding one (1) numbered paragraph is a true copy of the Corrigendum to the Reasons for Judgment of his Honour Justice Lander.
Associate:
Dated: 26 July 2004

FEDERAL COURT OF AUSTRALIA
Wilson v Manna Hill Mining Company Pty Ltd
[2004] FCA 912
CORPORATIONS LAW – meetings of directors – extraordinary general meetings – notice of meetings – quorum at meetings – compliance with constitution and Corporations Act – where no notice or inadequate notice of meetings given to some directors – where no quorum at meetings – whether meetings validly convened – effect on resolutions purportedly passed at meetings – directors – removal of directors – procedure under constitution – constructive resignation.
Corporations Act 2001 (Cth)
Browne v La Trinidad (1887) 37 Ch D 1
In Re Portuguese Consolidated Copper Mines Ltd (1889) 42 Ch D 160
Young v Ladies’ Imperial Club Ltd (1920) 2 KB 523
In Re Merchants and Shippers SS Co Ltd (1916) 17 SR NSW 21
Mitropoulos v The Greek Orthodox Church and Community of Marrickville and District Ltd (1993) 10 ACSR 134
Bell v Burton (1994) 12 ACLC 1037
Roden v International Gas Applications (1995) 18 ACSR 454
Toole v Flexihire Pty Ltd (1991) 6 ACSR 455
In Re Homer District Consolidated Gold Mines; Ex Parte Smith (1888) 39 Ch D 546
Barron v Potter (1914) 1 Ch 895
La Compagnie De Mayville v Whitley (1896) 1 Ch 788
Clamp v Fairway Investments Pty Ltd (1973) ACLC 40-077
Ryan v Edna May Junction Gold Mining Co NL (1916) 21 CLR 487
Devereaux Holdings Pty Ltd v Parry Corporation Ltd (1985) 9 ACLR 837
Re Cawley (1889) 42 Ch D 209
Australian Hydrocarbons NL v Green (1985) 10…

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.

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Details

Case: [2004] FCA 912
Decision Date: 14 JULY 2004

CaseChat Overview and Summary

The case of Wilson v Manna Hill Mining Co Pty Ltd was brought before the court by the applicants seeking various declarations and orders related to the conduct of Mr David Moore, an officeholder of the company, and the rectification of certain documents lodged with the Australian Securities and Investments Commission (ASIC). The applicants, who were directors and members of the company, sought to challenge the validity of certain resolutions passed and documents lodged by Mr Moore, alleging that they were fraudulent and in breach of the Corporations Act 2001. The applicants sought, among other things, declarations that Mr Moore had falsified the company’s books and records, made false and misleading statements, and failed to take reasonable steps to prevent such statements from being included in documents lodged with ASIC.

The legal issues before the court included whether Mr Moore's conduct constituted a falsification of the company's books and records, whether he had made false and misleading statements in documents lodged with ASIC, whether he had failed to take reasonable steps to prevent such statements from being included, and whether he had contravened various sections of the Corporations Act. Additionally, the applicants sought a declaration that Mr Moore had breached his director's duties under section 180 of the Corporations Act, and they requested the court to call an Extraordinary General Meeting (EGM) of the company's members to address these issues and the proposed removal of Mr Moore as a director. The applicants also sought orders to rectify the ASIC registers by removing certain documents that they claimed were lodged without proper authority.

The court considered the evidence and submissions from both parties and concluded that the applicants had demonstrated that Mr Moore's conduct was indeed improper and in breach of the Corporations Act. The court found that the purported resolutions passed by Mr Moore were invalid, and as such, any documents lodged with ASIC based on those resolutions were also invalid. The court granted the declarations sought by the applicants regarding Mr Moore's conduct and his contravention of the Corporations Act. Furthermore, the court ordered that an EGM be called within 21 days and provided detailed directions for the conduct of the meeting, including the proposed removal of Mr Moore as a director. The court also made orders to rectify the ASIC registers by removing the specified documents that were lodged without proper authority.

In summary, the court ruled in favour of the applicants, providing the declarations and orders they sought, thereby affirming the applicants' position regarding the invalidity of certain resolutions and documents and the need for rectification of the ASIC registers.

Orders

Orders of the court

1. The applicants bring in short minutes of the declarations and orders sought to reflect the Court’s reasons.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

LANDER J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: LANDER J

In their final submissions, the applicants sought other declarations and orders:‘A Declarations that Mr David Moore:(i)Has engaged in conduct which amounts to the falsification of the books and records relating to the affairs of the company contrary to section 1307(1) of the Corporations Act, 2001;(ii)Has in a document required to be lodged with the ASIC made a statement which to his knowledge was false and misleading in a material particular and as such has engaged in conduct contrary to section 1308(2) of the Corporations Act, 2001.(iii)Has failed to take reasonable steps to ensure that in a document required to be lodged with ASIC that statement was not false or misleading and as such has engaged in conduct contrary to section 1308(4) of the Corporations Act, 2001.(iv)Has engaged in conduct forbidden by the Corporations Act, 2001 and as such has engaged in conduct in contravention of section 1211(1) of the said Act;BA Declaration pursuant to section 1317E that Mr David Moore has contravened section 180 of the Corporations Act, 2001.CThe Calling of an Extraordinary General Meeting by the Court(i)Pursuant to section 249G of the Act, this Court has the power to order that a meeting of the company’s members be called where it is impracticable to call the meeting in any other way. In addition pursuant to section 249G(2) of the Act, such an order may be made on the application by any director or any member who would be entitled to vote at the meeting.(ii)It is submitted that the Applicants are directors within the meaning of section 249G(2)(a), and both Applicants are members of the company within the meaning of section 249G(2)(b).(iii)In the light of the purported resolutions passed at the various invalid meetings held by Mr Moore, it would be impracticable for the meeting to be called in any other way.(iv)Further, pursuant to section 1319 of the Act, this Court has power to give directions with respect to the issues of the convening, holding, or conduct of the meeting including ancillary or consequential directions in relation thereto as it thinks fit.(v)In circumstances it is submitted by the applicant that this Court should give the following directions:1.date for the meeting to be held, namely within 21 days of the date of the order made;2.an order that all members be notified of the meting in proper form together with notice of the business to be conducted thereat;3.an order that the business to be conducted at the EGM include the proposed removal of Mr Moore as a director of the company;4.and otherwise directions that the meeting be held in accordance with the Constitution of the company.5.That Mr Spratt, Mr Ewen, and Mr Hagger are neither directors nor members of the company; and6.That neither Hodgemore Pty Ltd nor Manna Hill Gold Pty Ltd are members of the company for the purposes of such a meeting.D Orders Sought in Relation to the Correction of the ASIC Register(i)Pursuant to section 1322(4)(b) this Court has the power to rectify any register kept by ASIC under the Act.(ii)Further, it is submitted that pursuant to section 1322(6)(c), no substantial injustice will be caused or is likely to be caused to any person if the ASIC Registers at issue are rectified. In particular it is submitted that the following rectification orders ought to be made:(iii)that ASIC document 019158507 (“NJI12”) be removed from the Register. That document purports to be a document lodged by Mr David Moore at ASIC on 12 June 2003 whereby he purported to notify ASIC of a change to the officeholders of the company. It is submitted that the purported document was not lodged upon the making of any valid resolution. In particular it is submitted that the purported resolution passed at the meeting of directors of 12 June 2003 whereby Mr Hagger purportedly appointed was not a valid resolution. For these reasons and for the reasons referred to above, it is submitted that Mr Moore had no or no proper authority to lodge the said document;(iv)that ASIC document 019333364 (“NJI11”) be removed from the Register. By that document Mr David Moore purported to notify ASIC of a change to officeholders, namely the cessation to hold office by Ms Gayle Lawton. As referred to above, it is submitted that there was no or valid authority in Mr Moore to lodge the said document. Further, as submitted above, at no stage did Ms Lawton resign as a director in writing as required by the Constitution or indeed at all. It is submitted that there will be no injustice caused to any person if such a rectification order were made.(v)that ASIC document 019212322 (“NJI13”) be removed from the Register. It is submitted that Mr David Moore had no authority to lodge the said document. It is submitted further for the reasons mentioned above that the purported meeting of the directors at which the same share issue was made was an invalid director’s meeting and any business transacted thereat, or any resolution passed thereat, is void and or of no effect. As such, it is submitted that any share issue is not a valid share issue and that as such the said document should be removed from the Register.’

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S 3004 OF 2003

JUDGE:	LANDER J
DATE:	14 JULY 2004
PLACE:	ADELAIDE