III. If there is no such profit or surplus, or no such proposals or purposes, the reasons therefore.
4 An explanatory memorandum was attached to the requisition which, as I understand it, it was intended should be forwarded with the notice convening the general meeting.
5 In accordance with that requisition and the provisions of s 249D of the Corporations Law, and Article 8 of the Articles of Association which is in the same terms as the provisions of the Corporations Law, the Directors were required, within 21 days, to call the meeting for a date not later than two months after the date on which the requisition was lodged in this case by not later than 21 November 1999.
6 There is an Annual General Meeting of the plaintiff company called for 16 November 1999.
7 As is well-known, the plaintiff company is a company limited by guarantee, namely a mutual company, and has, according to the evidence, 1,400,000 members. Thus the calling of any Extraordinary General Meeting is a big task. It also involves very considerable expense. The way in which the plaintiff has sought to reduce this expense of calling its Annual General Meeting in the past has been to use what are referred to in the evidence as the "Open Road" arrangements, which can be described as an agreed arrangement with Australia Post for the production of address tapes for members and a special arrangement for printing and packaging and delivery of the packages to Australia Post in an agreed sequence over a period of four weeks. The effect of this is that in an arrangement such as that, notices to members are received by them over a period of about one month. This arrangement, it seems from the evidence, costs substantially less, and probably less than half, than the costs incurred with a normal postage run; the cost of the normal run depending, of course, on the size and weight of the envelopes and the material in those envelopes.
8 As is well-known in the community, and the Court can hardly be expected not to know, there are proposals for the demutualisation of the plaintiff company which are supported by some members of the Board of that company. There are also Directors of NRMA, as opposed to the insurance company, who oppose what might be described as the demutualisation of the insurance company. In general terms this appears from the explanatory memorandum which Mr Carroll, who might be described as the leader of the requisitionists, wished to have sent out with the notice convening the special meeting.
9 According to the evidence before the Court if the proposal for demutualisation proceeds it will proceed by way of scheme of arrangement, in which case no decision is likely to be made on this before December 1999. There is also evidence that, whatever the position, the next annual general meeting of the plaintiff company is not likely to take place before September or October 2000.
10 The reasons advanced to support the claims for extension of the convening period and the date by which the meeting must be held are set out in the evidence and appear to be four in number.
11 The first of those is that the directors may wish to send out some explanatory statements in relation to the proposed resolution, and it is said that there may be potential tax issues and, as I understand it, other complex issues to which the directors may wish to alert the members and which it might be difficult to prepare, having regard to the existing time constraints, it being said that to get everything ready, the completed document would have to be with the printers by 13 October. The next reason is said to be the increased costs which would be incurred if the notices were sent out by post in the ordinary way, rather than through what is described as the "Open Road" system which could be satisfactorily used if the meeting were delayed. The third reason is that as there will not be an Annual General Meeting after the one presently called for 16 November 1999 until late in the year 2000, there is no hurry. The last reason is that as an Annual General Meeting has been called, members may be confused if a special meeting has to be held shortly thereafter.
12 None of these reasons seems to me to be sufficient to justify the orders sought, even if taken together. So far as the first reason is concerned, the fact is that the requisition was with the company on 20 September. It was obviously a matter which needed to be dealt with urgently. The evidence is that at a meeting held on 30 September, the Directors resolved to make this application to the Court. That was ten days after the requisition was received, which is a considerable period in view of the time constraints of which the Directors must have been aware. But, having said that, had the Directors commenced with any explanatory statements they wished to send out when they received the requisition, then I do not understand they could not have got that statement ready; and I do not understand they could not do it now in a reasonably short time. It is difficult to understand the claim about tax issues which are said to present a problem. If all that the requisition does is to require the directors to tell the members the amount of the profit or surplus and the proposals for dealing with that, then there is no reason why, when that is done, the directors cannot give full consideration to, and advice to the members on, any taxation implications.
13 The next matter is the question of increased costs. The difficulty about that is that in ordinary circumstances if the Open Road program were to be used, then it would not be possible, as I understand it, for the plaintiff company ever to comply with the requirements of the law or the Act for the calling of a general meeting on requisition. Thus, although the question of increased costs is of some significance, it would appear to be one of the burdens of membership of a mutual organisation such as the plaintiff company and, in itself, would not justify the claims, although it may do so if there were sufficient strength in the next matter to which I will refer.
14 That next matter is the evidence, that there will not be another Annual General Meeting after the one presently called for 16 November until September or October 2000. It is therefore put that there is no hurry to put this resolution before the members because they would get no benefit from its having been passed until late next year. That, in itself, seems to be no reason for the delay which is sought, and in fact no explanation at all is given for seeking the lengthy delay which is sought. In the circumstances which exist with this company I can see no reason why the members should not be entitled to vote on this resolution as to the information which the directors must provide to them at an Annual General Meeting within the statutory time or some reasonable time thereafter. It may be thought that as they will not know the amount of the profit or surplus, if any, until the notice calling the annual general meeting is sent out, that there is nothing that they would wish to discuss and that there could be no benefit to them. I do not think that that is the position. It may well be that members of a mutual organisation would like to be assured now that in the future they will have this information available to them, and in those circumstances I see no reason why they should not be able to vote on that now.
15 The last matter put forward is confusion. I am not sure whether this is serious or not, but I just cannot understand how, if properly prepared notices are sent out, it could possibly be thought that there would be any confusion in the mind of a member as to which meeting was called for what purpose. In my view there is no substance in that claim of confusion.
16 It follows from this that the summons should be dismissed, or at least that the plaintiff should not be entitled the relief claimed in it. It may be necessary to extend the date by which the notice of meeting should be sent out by some short time, and in some ways it may be more convenient if the Extraordinary General Meeting is held immediately after the conclusion of the Annual General Meeting, but that is a matter on which the plaintiff should be entitled to decide, rather than the Court. All that the Court need do now is to hear any submissions on whether any short extensions are required which would be readily available within s 1322(4)(d) of the Corporations Law.
17 After a short adjournment, counsel for the plaintiff has stated that if the orders sought are not made in the form asked, then no other orders are sought. In those circumstances the order is: The summons be dismissed. No order as to costs.