The General Meeting

THE GENERAL MEETING 1. WHAT IS MEANT BY THE GM?  GM: where collective will of comp can be expressed. o Can replace Dirs o Can alter Con o Can vote on related party transactions: ss 208-229 2. HOW DOES THE GM CONDUCT ITS BUSINESS? Does comp need to hold GM?  ONE member comp: NO – can pass re by member recording it and signing the record: S249B  Prop comp: NO – can pass re by all members (who can vote) sign doc containing statement that they are in fav of res set out in doc (circulating res): S249A(2)  Public comp: YES - must hold within 18mths of registration, then at least 1 per calendar year and within 5 mths of end of financial year (unless only 1 member): S250N Notice re meeting:  Written notice of a members meeting must given to each voting member and Dir.  Gen: 21 days notice – but can specify otherwise in Con: s249H(1)  Listed comps: 28 days notice – even if Con says otherwise: s249HA(1)  Shorter notice: s249H  Of AGM: if all members entitled to attend/vote agree so.  Of GM: if members with 95% voting power agree so.  Can’t give shorter notice: if removing/appointing Dirs or Auditors  Longer notice: s203D(2)  Of intention to move notice: 2 mths before meeting. If after notice lodged and comp holds meeting earlier, that is ok.  Notice must contain: s249L  Place, date, time  General nature of meeting’s business  If special res is proposed  If member entitled to appoint proxy  If AGM of listed comp: also resolution on remuneration report if to be put to meeting  Must be written in “clear, concise and effective manner” Proxies:  Who can appoint proxy: s249X  Member (with right to attend/vote) can appoint a person (as proxy) to attend/vote for them  Proxy may be an individual or body corporate  If member can cast 2+ votes – can appoint 2 proxies.  Notice re proxy: s249L(d)  Rights of proxy: s249Y:  Proxy has same rights as that member: to speak, vote, join in demand for poll  Con may provide that proxy cannot vote by a show of hands (but can still demand poll)  Default: proxy’s rights are suspended whilst member is at meeting. 3. WHO MAY CALL A GM? Who can call AGM (public comp): s250N  Dir: 249C  Dir: this cannot be removed by Con: 249CA Who can call GMs:  Dir: 249C (RR), 249CA (for listed comp)  Smith v Sadler (1997):  Dir’s power to call a meeting is a fid power (cannot be excluded by Con) – to call at time/place where all members present in state will be able to attend.  Members can request Dirs to hold meeting (comp pays for meeting): 249D  If members with 5% of voting power;  100 members entitled to vote.  If Dirs fail to hold meeting within 21 days – members can hold their own: s249E  Members with 50% of voting power out of members who requested in s249D.  Comp pay for all reasonable expenses  Members can call own meeting: s249F  If members with 5% of voting power  Members must pay expenses, but can control time, place, agenda of meeting  Court can call meeting if impracticable to call meetng any other way: 249G.  Can make order on application from either Dir or member.  Totex-Adon:  FACT: 2 dir. 1 dir own comp which owed money to Totex – so never show up to meeting. Impossible to get a quorum.  HELD: Ct ordered quorum of 1 Dir. 4. HOW ARE MEETINGS HELD?  Gen: hold meetings at time/place where all members present in the State can attend: Smith v Sadler (1997)  Reasonable place and time: s249R  It is FRAUD – to hold meeting where member unable to attend.  Smith v Sadler (1997)  FACT: meeting at licensed prem, where 1 member has been barred by licensee.  HELD: not appropriate place to meet.  Issue of being barred was “very real one” that was known to BOD  invalid. 5. WHO DETERMINES THE AGENDA?  AGM can include following (even if not in agenda): s250R  Consideration of annual financial report, Dir’s report and Auditor’s report  Election of Dirs  Appointment of auditor  Fixing auditor’s remuneration  If Dir call meeting – related party trans can be on agenda: s208  Rights of Sh to influence agenda and meeting conduct:  Propose res: by members with 5% of voting power or 100 members with voting power: s249N  Comp must give notice: s249N  Res must be considered within 2mths of notice: s249O  All members must be given notice: s249O  Notice is not needed if >1000 words, defamatory or proposing members have to pay for notice: s249O  Members’ Statements: members can request comp to give to all members a statement about resolution at next GM (doesn’t have to be their own resolution): s249P  Need 5% voting power or 100 members  Notice is not needed if >1000 words, defamatory  At AGM, Chair must allow reasonable opp for members (as whole) to question/comment re management of comp: s250S  Own meeting:  Must be for proper purpose (agenda must be proper): s249Q 6. WHO MAY VOTE? How many votes per member? S250E  If comp with share capital: o 1 vote/member – show of hands o 1 vote/share held by member – poll  If comp with no share capital: o 1 vote/member – show of hands and poll  Chair: has casting vote + any votes they have in their capacity as member o What does 250E say? (note def of member 231) How is the voting procedure carried out? S250J o Decided by show of hands unless poll demanded o Before voting, chair must announce any proxy votes and how proxy votes to be cast o In show of hands – no need for numbers to be recorded by minutes. Polls: o Purpose: s250K o Can be demanded on any res o Con may state that poll can’t be demanded to elect chair or adjourn meeting  Can be demanded by:  5 members entitled to vote  Members with 5% voting power  Chair  Proxy can join in vote for poll 7. WHAT INFORMATION NEEDS TO BE PROVIDED TO SHAREHOLDERS?  AGM:  Financial report, Dir report, auditor report: s314  Deadline for reports: s315  Public comp: 21 days before next AGM after end of financial year, or 4mths after end of financial year  Small prop comp: shareholder direction given – 2 mths after direction given, or 4 mths after end of financial year  Registered scheme: 3mths after end of financial year  Other prop comp: 4 mths after financial year  Member can request not to be sent reports OR to get FULL reports  Contents of notice: s249L NATURE AND EXTENT OF DISCLOSURE REQUIRED TO EQUATE TO A FULL AND FAIR DISCLOSURE Re Marra Developments  FACT: Sh request meeting – motion of no confidence against Dirs. Dirs attach their res onto Sh’s. Unclear as to who’s res is who’s. Misleading?  HELD: NOT misleading, but…  If read through – would clearly see that res were not Sh’s.  Realistically – no one reads through notice carefully.  Comps today have wide range of Sh – not everyone is bus person.  LAW: notices should be so plain that those who run may read:  Must be comprehensible to readers on the run – ordinary reader who scans/reads quickly should be fully inform about matters to vote on  Different standards of clarity/simplicity depend on type of Sh group Fraser v NRMA Holdings  FACT: NRMA demutualise – give members free shares. Need members to vote to change con. “Free shares” give idea that they had nothing to lose, info didn’t distinguish between impact on Assoc and Insurance, imprecise language of “business as usual”  LAW:  Dirs may be required to take reasonable steps to acquire relevant info – cannot just turn blind eye  Info must constitutes a full and fair disclosure of all facts which are material to enable the members to make a properly informed decision, the combination of what is said and what is left unsaid may, depending on the full circumstances, be likely to mislead or deceive the membership ENT Pty Ltd v Sunraysia Television Ltd  FACT: S get taken over by selling major asset. Min Sh in S allege Dir not make full disclosure.  HELD: Dir fail – didn’t provide sufficient details to let Sh assess sale proposal  Dirs should have notified shareholders about the ‘basis on which they had formed their opinion as to the fairness or adequacy of the price’  Didn’t disclose re negotiations with other potential buyers.