Chapter 7

Meetings
Chapter Summary
1

TYPES OF MEMBERS MEETINGS

1.1 Annual General Meeting

A public company with only one member does not have to hold an annual general
meeting: s 250N(4). All other public companies must hold an AGM when required by (s
250N(1)). EXICOM LTD V FUTURIS CORPORATION LTD: 1995) 61 FCR 337; (1996) 14
ACLC 39; (1995) 18 ACSR 711 discusses how this time period may be extended by ASIC.

Business at the AGM

Under s 317, the financial report, the directors report and the auditors report must be
laid before the meeting. The business may also include (under s 250R) consideration of
the annual financial reports, directors and auditors reports, the election of directors, the
appointment of the company auditor and the fixing of the auditors remuneration.

Questions at the AGM

Under s 250S the chair of the AGM must give the members as a whole a reasonable
opportunity to ask questions or make comments concerning the management of the
company. Similarly, where the companys auditor or representative is present at an AGM,
under s 250T the chair must give the members as a whole a reasonable opportunity to
ask the auditor or their representative questions concerning the companys audit and
financial reports. At present there is no requirement for the companys auditor or their
representative to be present at the AGM: Corporations Act, s 250T. However, CLERP 9
recommends the removal of this discretion on the part of the company auditor of a listed
public company. CLERP 9 recommends that changes be made to the Corporations Act so
that attendance by a company auditor at a listed public companys AGM is mandatory.
Sections 250S and 250T only require that the chair provide a reasonable opportunity to
ask questions. There is no requirement for a director or company auditor (or their
representative) to answer any questions. Sections 250S and 250T also refer to the
members as a whole and do not state that each individual member has the right to
demand the opportunity to ask questions.

1.2 General meeting

The general meeting is any meeting which is not an AGM. It can be called for
hareholders vote on resolutions in relation to matters such as appointment and removal
of directors (ordinary resolution), a reduction in the companys share capital through
extinguishing uncalled amounts on shares (special resolution) or the voluntary winding
up of a company (special resolution).

1.3 Class meetings

Class meetings are the meetings of shareholders in a limited company where a resolution
is passed to vary, cancel or modify the rights attached to a particular class of shares.
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RESOLUTIONS

2.1 Resolutions at meetings

An ordinary resolution means a resolution that has been passed by a simple majority of
votes cast by members present and entitled to vote on the resolution. A special
resolution means a resolution that has been passed by at least 75 per cent of the votes
cast by members entitled to vote on the resolution: Corporations Act, s 9.

2.2 Resolutions without meetings

A proprietary company with more than one member may pass a circulating resolution
without holding a general meeting under s 249A. Body corporate representatives may
sign (section 250D) and resolutions passed under s 249A must be recorded in the
companys minute books: s 251A.

CALLING MEMBERS MEETINGS

3.1 By directors
It is a replaceable rule that a director of a company may call a members meeting: s
249C. However, a director of a public company listed on the Australian Stock Exchange
(ASX). However, no provision in the constitution can prevent a listed public companys
director from calling a members meeting: ss 249CA(1) and (2).

3.2 By directors when requested by members

Under s 249D(1), the directors of a proprietary or public company must call and arrange
to hold a members meeting if requested to do so by:
member or members with at least 5 per cent of the votes that may be cast at the
general meeting; or
at least 100 members who are entitled to vote at the general meeting.
The request must satisfy the section 249D(2) formal requirements. Within 21 days after
the company receives the request, the directors must call a members meeting: s
249D(5), which must be held not later than two months after the company receives the
request: s 249D(5). The case of ASIC V NRMA [2002] NSWSC 1135; (2003) 21 ACLC 186
discusses when the meeting has been held. The case of NRMA V PARKIN [2004] NSWSC
153; (2004) 22 ACLC 861 discusses whether a resolution is ambiguous.

Where the directors fail to call a meeting after being requested to do so, members who
have more than 50 per cent of the votes of all the members, and who make a request
under s 249D, may call and arrange a members meeting: s 249E(1). The company must
pay the reasonable expenses of such a meeting, but may recover the expenses from the
directors: ss 249E(4) and (5). Directors are not liable to pay the expenses of a meeting
held under s 249E if they can show that they took all reasonable measures to comply
with the members request to call and arrange a general meeting: s 249E(5). It is not
necessary for the requisition to come to the attention of the directors: BROWNE v PANGA PTY
LTD (1995) 13 ACLC 853.

3.3 By members
Section 249F(1) provides that the members of a company with at least 5 per cent of the
votes that may be
cast at a general meeting may call, arrange and hold a meeting. The members must pay
for all of the expenses associated with calling and holding the meeting. In this situation
the meeting is to be called in the same way as a general meeting is normally called: s
249F(2). There is no provision for 100 members to call a general meeting under section
249F.
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3.4 By the court

Where a court determines it is impracticable to call a meeting in any other way, a court
may order a general meeting upon the application of any director or any member
entitled to vote at the meeting: ss 249G(1) and (2). When making an order under s 249G,
a court may give any directions it thinks fit in relation to the calling, holding or conduct of
the members meeting: s 1319. Mere speculation concerning potential problems
associated with the calling and holding of a general meeting is not sufficient grounds for
a court to exercise discretion to order a meeting under s 249G. FIORE AND HUNTER v
CARLTON FOOTBALL CLUB [2002] VSC 455; (2003) 21 ACLC 145, and BECK v TUCKEY PTY
LTD [2004] NSWSC 357; (2004) 22 ACLC 633, discuss when a court will, and will not,
exercise this power.

HOLDING MEMBERS MEETINGS

4.1 Procedural Irregularities & section 1322

Under s 1322(2) a procedural irregularity does not make a proceeding invalid unless the
court is of the opinion that the irregularity has caused or may cause substantial injustice
that could not be remedied by any court order. If the court is of this opinion then the
court will declare the proceeding to be invalid: Corporations Act, s 1322(2).
Section 1322(3) provides that a meeting, notice of a meeting or any proceeding at a
meeting is not invalidated because of an accidental omission to give notice or because of
the failure of a person to receive notice. However, a court may declare a meeting void
upon the application of the person who failed to receive notice, any person entitled to
vote at the meeting in question or ASIC: s 1322(3).
Section 1322(3A) provides that where a member has not had a reasonable opportunity to
participate, a members
meeting is only invalid if the court is of the opinion that substantial injustice has been
caused or may be caused, and the injustice cannot be remedied by a court order: s
1322(3A)(a). Where the court is of this opinion it will declare void the meeting, a part of
the meeting or a proceeding at the meeting: s 1322(3A)(b).
The Bell Resources case set out below gives some examples of proceedings that are not
legal proceedings. Section 1322(1)(b) provides that a procedural irregularity includes:
a failure to have the required quorum at a meeting of shareholders, directors or
creditors
a defect, irregularity or deficiency of notice or time.
Section 1322(4) covers the orders that a court may give, and section 1322(6) requires a
court to be satisfied of certain matters before it grants an order.

4.2 Notice of general meetings

Unlisted companies: A company not listed on the ASX must give (its members and
directors) at least 21 days notice of a general meeting: (or such longer period specified
in the constitution): s 249H(1). Unless otherwise stated in the companys constitution, a
meeting may be called on less than 21 days notice if all of the members entitled to vote
agree before notice is given: s 249H(2)(a). A general meeting may be called on less than
21 days notice if members with at least 95 per cent of the votes that may be cast agree
before notice is given: s 249H(2)(b). However, at least 21 days notice of a general
meeting must be given where a resolution will be voted upon to remove a director under
s 203D or appoint a director to replace a director removed under s 203D: s 249H(3), or to
remove a company auditor under s 329: s 249H(4).

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Listed companies: Section 249HA(1) requires at least 28 days notice of a general

meeting for listed companies, even if a shorter period is specified in the companys
constitution: s 249HA(3).
Notice of a general meeting must be given individually to each director and to each
member entitled to vote: s 249J(1). The notice under s 249J(1) only has to be given to
the one joint holder:: s 249J(2). Under s 249J(3), the company may give notice to each
member:
personally
by sending the notice by post to the members address, as recorded in the
members register
by sending it to the members fax number or electronic address
by any other means that the companys constitution (if any) permits.
Company auditors are also entitled to notice of a general meeting in the same way as
members: s 249K. Section 249J(1) requires that notice of a general meeting must be
given individually to each director and to each member entitled to vote. RE CANBERRA
LABOR LTD [1986] ACTSC 103; (1987) 5 ACLC 84 discusses whether a general meeting is
invalid if some members entitled to vote do not receive notice.

4.3 Members rights to put resolutions at general meetings

Section 249L requires that the notice of a general meeting:
give details of the place, date and time of the meeting
specify details of the technology to be used where the meeting is to be held in two
or more places
give details of the general nature of the business to be addressed
state any special resolutions to be moved at the meeting
if members are entitled to appoint a proxy, state that members are so entitled,
and specify whether the proxy has to be a member of the company; state that a
member entitled to cast two or more votes at the general meeting may appoint
two proxies (not one proxy for each vote) and specify the proportion or number of
votes that each proxy can exercise.
Directors have a fiduciary duty not to mislead members, and must therefore make a full
disclosure of information which would enable shareholders to decide whether or not to
attend the meeting, and explain in sufficient detail the business to be considered at the
meeting.

4.4 Members rights to put resolutions at general meetings

Section 249N(1)(a) of the Corporations Act provides that members with at least 5 per
cent of the votes that may be cast on the resolution may notify the company that they
propose to move the resolution at a general meeting. Alternatively, at least 100
members who are entitled to vote at a general meeting may give the company notice
that they intend to move a resolution at a members meeting: s 249N(1)(b). Section
249N(2) sets out the requirements of the notice to the company.
Where a company has received notice under s 249N, the members resolution must be
moved at the next general meeting that occurs more than two months after the notice is
given to the company: s 249O(1). The company must send a notice of the members
resolution to all of the companys members as possible after the notice of the meeting: s
249O(2).
The company must pay the cost of complying with s 249O(2) unless it did not receive the
members resolution in

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time to send out notice of it with the notice of the meeting: s 249O(3). If this situation
arises, the members requesting the resolution are jointly liable for the expenses unless at
a general meeting the company resolves to pay the expenses itself: s 249O(4).
However, s 249O(5) provides that the company does not have to give notice of a
members resolution if the resolution is more than 1000 words long or if it is defamatory,
or if the requesting members are to pay for the notice of the resolution.

4.5 Reasonable opportunity to participate

A general meeting must be held for a proper purpose (s 249Q) and at a reasonable time
and place: s 249R.
General meetings may be held at two or more venues, using any technology that gives
the companys members as a whole (not necessarily individual members) a reasonable
opportunity to participate: s 249S. Sections 249Q and 249R are considered in the Howard
case example set out below. Section 1322(3A) will apply if members as a whole do not
have a reasonable opportunity to participate (or if there is was a problem with the
technology being used to hold the meeting at different venues) and substantial injustice
would be caused as a result. HOWARD v MECHTLER [1999] NSWSC 232; (1999) 17 ACLC
632; (1999) 30 ACSR 434 deals with procedural rregularity, inadequacy of notice,
improper purpose and reasonable time of a meeting.

4.6 Quorum
According to section 249T (replaceable rule), the quorum for a general meeting of a
company is two members and the quorum must be present throughout the meeting: s
249T(1). Companies with only one member can pass a resolution if that member records
the resolution and signs the record: s 249B(1). Where a member has appointed more
than one proxy or body corporate representative, only one of them is counted for the
purposes of the quorum. Where a person is attending a general meeting as both a
member and as a proxy or body corporate representative, they are only counted once.
Otherwise, each person is counted once for purpose of quorum.
Section 249T(3) provides that if a quorum is not present within 30 minutes of the time
specified in the notice of the meeting, the directors must adjourn the meeting to a date,
time and place that they determine. The resumed meeting will be dissolved if no
quorum is present within 30 minutes of the time specified for the resumed meeting: s
249T(4). A resolution is passed at a resumed meeting on the day it is actually passed: s
249W(1). It is a replaceable rule that at a resumed meeting only unfinished business is to
be dealt with: s 249W(2).

4.7 Election of the chair of a general meeting

Section 249U(1) provides that the directors may elect any individual to chair the
companys general meeting (whether involved with the Company or not). If the directors
choose not to elect a chair prior to the general meeting or if a person is elected but they
cannot be chair, or decline to be chair, then the directors must elect an individual who is
present at the meeting to be chair: s 249U(2). Section 249U(3) provides that the
members at a general meeting must elect a member who is present at the meeting to be
chair if the directors have not previously elected a chair, or if a previously elected chair is
not available or declines to be chair. The members at a general meeting with the
majority of votes have the power to direct the chair to adjourn the meeting: s 249U(4).

4.8 Auditors right to be heard at a general meeting

A company auditor has the right to attend any general meeting and be heard in relation
their capacity as an auditor: ss 249V(1) and (2), even if the auditor will retire at the
meeting or if the meeting passes a resolution to remove the auditor: s 249V(3). Where an

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auditor or their representative is present at an AGM, the chair of the AGM must give the
members as a whole a reasonable opportunity to ask the auditor or their
representative questions concerning the companys audit and the financial reports: s
250T.

4.9 Voting at a general meeting

For a company with share capital, on a show of hands each shareholder has one vote: s
250E(1)(a). On a poll, each shareholder has one vote for each share they hold: s 250E(1)
(b). S 250E is a replaceable rule.
For a company without share capital, each member has one vote for each resolution,
irrespective of whether the vote is taken on a show of hands or a poll: s 250E(2)
(replaceable rule).
The chair of a general meeting is entitled to exercise a casting vote in addition to the
votes they may have in their
capacity as a member of the company: s 250E(3)(replaceable rule). The note to s 250E(3)
states that the chair may be precluded from voting, for example, by a conflict of interest.
Under s 250G(replaceable rule) it is possible, at a general meeting, to challenge a
persons right to vote. The chair decides the outcome of the challenge.
Where a vote is taken on a poll, a person with the right to cast two or more votes may
either refrain from casting all of their votes or may cast their votes in different ways: s
250H.
Section 250J (a replaceable rule) deals with the way in which voting is carried out.
Section 250K(1) provides that a poll may be taken on any resolution, but s 250K(2)
provides that a company constitution may prohibit a poll being taken on a resolution to
elect the chair of a meeting or to adjourn a meeting. Any demand for a poll may be
withdrawn: s 250K. Section 250L(1) specifies who can demand a poll, and section 250L(3)
specifies when a poll may be demanded.

4.10 Proxies and body corporate representatives

Section 249X is a replaceable rule for proprietary companies and a mandatory rule for public
companies, and provides that any member of a company who is entitled to vote at a general
meeting of the company may appoint a proxy to attend the meeting and vote on behalf of the
member: s 249X(1). The appointment may state the percentage or total number of votes
available to the proxy: s 249X(2). A member who is entitled to cast two or more votes at a
meeting may appoint two proxies to attend and vote at the meeting: s 249X(3). Under s
249X(3) a member with more than two votes is not allowed to appoint more than two proxies.
The appointment of two proxies is the maximum allowed. Where the appointment of two or
more proxies does not specify the percentage or number of votes to be cast by the proxy, the
proxy may exercise half of the members votes: s 249X(3). Section 249Y(1) sets out the
rights of proxies at meetings. Section 249Y(2) allows a constitution to prevent a proxy voting
on a show of hands, but under s 249Y(1) a proxy may still join in a demand for a poll.
DONROB ENTERPRISES PTY LTD V QUEENSLAND PETROLEUM MANAGEMENT LTD (1989)
14 ACLR 307; (1989) 7 ACLC 255 discusses whether two proxies appointed by one member
can constitute a quorum.

MINUTES

5.1 Minute books

Section 251A(1) requires each company to keep minute books, and obliges the company
to record, within one month,
proceedings and resolutions of general meetings and directors meetings
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resolutions passed by members or directors without a meeting

declarations by the sole director of a proprietary company.

Either the chair of the meeting or the chair of the next meeting must sign the minutes
within a reasonable time: s 251A(2). The company must keep its minute books at its
registered office, its principal place of business or at another place approved by ASIC: s
251A(5). The case example of ASIC V WHITLAM [2002] NSWSC 591 is an illustration of
altering the minutes of a meeting.
Under s 251AA(1)a listed company must record in the minutes of a meetings the total
number of proxy votes exercisable by all proxies on each resolution. If a resolution is
decided by a show of hands, the company
must record in the minutes the total number of votes specified by the appointments to be
for a resolution and against a resolution. The minutes must also record the total number
of proxy votes where the appointments specify that a proxy is to abstain from voting on a
particular resolution or whether the proxy is to exercise discretion: s 251AA(1)(a).
Where a resolution is decided on a poll, s 251AA(1)(b) requires, in addition to s 251AA(1)
(a) and despite anything in the companys constitution, the total number of votes cast on
a poll: in favour of the resolution, against the resolution and abstaining from the
resolution.

5.2 Members access to minutes

The members of a company must be allowed free access to the companys minutes: s
251B(1). A member may also make a request to the company for a written copy of any
minutes: s 251B(2). Where a company does not require the member to pay for the copy,
it must send the copy to the member within 14 days of the request or within any longer
period approved by ASIC: s 251B(3). There is a similar requirement on the company if the
member has to pay for the copy: s 251B(4).

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