Issue 4 - Was the Validation Order of the Type Described in Section 1322(4)(a)?
110Mr McHugh submitted that there was no power to make a validation order concerning the Purported Appointment, because such an order would not fall within the words of s 1322(4)(a). He submits it would fall outside those words for two separate reasons. The first was that the Purported Appointment is not "any act ... purporting to have been done ... in relation to a corporation ". The second is that there has been no "contravention of ... provision of the constitution" of the Company. Both reasons assumed that the act of Ami in making the Purported Appointment was a total nullity.
111Mr McHugh's argument proceeded by reference to various of the cases that have considered s 1322(4) and its statutory predecessors. I will now turn to those cases.
112In North Sydney Brick & Tile Co Ltd v Darvall (1989) 17 NSWLR 327 the Court of Appeal held that the company concerned had power to declare a dividend by a distribution in specie of certain assets held by the company (338). The only question concerned the validity of the resolution that had declared it. The Act and articles required that two different resolutions be passed to authorise the payment of such a dividend but the Company passed only one of the necessary resolutions. Clarke JA said, at 341 that:
"... the failure to include the second resolution, which resulted from the directors' honest acceptance of erroneous legal advice, constituted a failure to comply with those provisions of the Code and the articles which required that a dividend payable from the profits of the company be declared before a distribution could be carried out."
113He held that "the failure to make provision for the declaration of a dividend in the resolution put to the meeting should be regarded as a relevant failure under s 539(4)".
114Jordan v Avram concerned a company established as a joint venture vehicle by two families, the Jordans and the Avrams. A contract pursuant to which the joint-venture vehicle was established provided for each family to appoint two directors. The articles of association required there to be at least two directors. The situation came about where there was only one director, Mr Arthur Avram. One of the Jordan family wrote to the auditor and accountant of the company, notifying him of the two members of the Jordan family whom he wished to have appointed as directors. As the sole continuing director Arthur Avram would have had a power under the articles of association to appoint another director to bring the number up to the minimum of two, but he did not exercise it. Rather, he told the accountant that he had no objection to the two Jordan men being appointed, but suggested that their mother "sign the necessary forms". Their mother had previously been a director, but had resigned. One of the Jordan men, who held her power of attorney, signed a form that recorded a purported appointment of the two Jordan men as directors. The form was eventually lodged with ASIC. There was nothing that purported to be any sort of resolution of the company that appointed the two Jordan men. A meeting of the two nominated Jordan men and Arthur Avram that purported to be a meeting of directors was held shortly afterwards, and passed resolutions that were acted upon. Only some weeks later did Arthur Avram question the validity of appointment of the Jordan men.
115Gillard J made an order validating the appointment of the Jordan men as directors. At 156-157 he gave a careful analysis of the structure of s 1322, and concluded at 157:
"In my opinion s 1322(4)(a) is not confined to procedural irregularities. It covers irregularities, errors or mistakes of a general nature and is expressed in very wide language. It clearly gives power to declare an act which is not in accordance with the articles of association, not invalid. In this regard the change in the wording of the section means that the principles espoused in Omega Estates Pty Ltd v Ganke [1963] NSWR 1416 especially at 1423 that the court could not override the articles of association are no longer good law. In my opinion the scheme of the section makes this quite clear. There are different approaches to what might be described as procedural irregularities and other irregularities. In my view the act under consideration, that is, the purported appointment, is clearly capable of falling within the wide words of s 1322(4)(a) and if thought appropriate the court could declare the appointment not invalid. I am satisfied the court has the jurisdiction, in the present circumstances."
116Re Centennial Coal Co Ltd [2006] NSWSC 62; (2006) 56 ACSR 698; (2006) 226 ALR 341 concerned an off-market takeover bid. The offeror wished to extend the offer period, but failed to meet a mandatory statutory deadline for the time within which a notice of variation of the offer could be mailed to shareholders in the target who had not already accepted. Barrett J validated the late sending of the notice of variation. He said, at [15]:
"The Court of Appeal held in Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd (2001) 166 FLR 144; 40 ACSR 221; [2001] NSWCA 427 that failure to take the appropriate steps to call a separate meeting of certain shareholders made necessary by a provision of the Corporations Law to the efficacy of a particular type of reduction of capital was a 'contravention' of that provision. There, as here, the company was under no obligation to embark upon the reduction of capital. But, having done so, it was required to proceed in the prescribed way and failure to take any of the prescribed steps was a 'contravention'. In this case, the plaintiff, having embarked on the offer extension process, was required to comply with s 650D(1)(c)(ii) and its failure to do so was a 'contravention' of the Act."
117Sheahan v Londish concerned three companies. Valofo was a wholly-owned subsidiary of LNQ, which in turn was a wholly-owned subsidiary of Vesudi. A provision in the articles of Association of Vesudi enabled the holders of the majority of issued shares to remove a director and appoint a replacement by a notice under their hands. There was no corresponding provision in the articles of LNQ or of Valofo. Section 249B Corporations Act allowed a one member company to pass a resolution by the member recording it and signing the record. A majority of shareholders of Vesudi signed a notice removing an existing director and appointing a replacement, Mr Sidney Londish. Mr Londish then joined and signing a notice that purported to remove a director of LNQ and replace him with Mr Londish. Mr Londish and a director of LNQ then joined in signing a notice that purported to remove a director of Valofo and replace him with Mr Londish. Mr Londish and a director of Valofo then purported to appoint administrators to Valofo. The litigation concerned the validity of the appointment of the administrators.
118The majority in the Court of Appeal (Young JA and Lindgren AJA) held that the appointment of Mr Londish as a director of LNQ and of Valofo was invalid. Young JA at [161]-[163] held that there was a "contravention" within the meaning of s 1322(4)(a) "when the company does not infringe the Act, but merely failed to take advantage of a provision of the Act". Lindgren AJA at [233]-[236] said:
"The expression in 1322(4)(a) 'any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or undertaken under [the] Act or in relation to a corporation' is of the widest kind. It embraces the purported appointment of the appellants as administrators of Valofo.
As Young JA observes (at [161]-162]), the expression in s 1322(4)(a) 'by reason of contravention of a provision of this Act or a provision of the constitution of a corporation' (my emphasis) has been liberally construed, and the word 'contravention' in the provision has not been confined to its orthodox meaning of 'infringement'.
The appointment by Valofo of the appellants as administrators on 16 July 2009 was invalid because:
· Valofo had not removed Peter and appointed Sidney as a director of Valofo by passing resolutions in conformity with s 249B before the purported instrument of appointment was executed and a resolution of the directors of Valofo was passed, although the soi-disant directors, Sidney and Mr Bowman, apparently presumed that there was an effective removal of Peter and appointment of Sidney upon or before the giving of the notice by LNQ on 26 February 2009;
· LNQ had not removed Peter and appointed Sidney as a director of LNQ by passing resolutions in conformity with s 249B, although the soi-disant directors, Sidney and Mr Bowman, apparently presumed that there was an effective removal of Peter and appointment of Sidney upon or before the giving of the notice by Vesudi on 25 February 2009.
In my opinion these reasons for the invalidity of the appointment by Valofo of the appellants as its administrators fall within the expression 'contravention of the provision of the Act', the provision of the Act being s 249B."
119Mr McHugh submits that, in various ways, the validation order made in the present case goes further than validation orders made in previous decided cases. For example, he submits that in Jordan v Avram Mr Avram actually approved of the appointment of the two Jordan directors, and had power to appoint them. In both North Sydney Brick & Tile v Darvall and Re Centennial Coal Co, the company had power to pass the necessary resolutions, but did not do so. In Sheahan v Londish it would have been possible for each of LNQ and Valofo, successively, to pass valid resolutions under s 249B to put Mr Londish in office, but they omitted to carry out simple acts that were within their power. By contrast, he submits, in the present case Ami had no power at all to appoint Helen as a director.
120Mr McHugh's observations concerning those cases are right, but do not dictate the outcome of the present case. When one is applying a statutory power, one construes the power, and applies it to the facts of the case at hand. Previous cases that have applied the section can illustrate its proper scope, but only insofar as they decide that certain types of order are within the scope of the statutory power or identify limits to the scope of the power are they the sort of precedents that should be applied directly. As will appear, the matters to which Mr McHugh points are in my view accidents of the facts of those particular cases, rather than matters that are definitive of the scope of the power under s 1322(4)(a).
121In support of his submission that there has been no "contravention of ... a provision of the constitution of a corporation", Mr McHugh argues that where a power is exercisable only by a person holding a particular office, and that power is purportedly exercised by a person who does not hold that office and whose appointment to that office cannot be validated, there is no "contravention of the Act or constitution". He submits that such a situation is neither an infringement of, nor the failure to take advantage of a provision of, the Act or constitution (cf Sheahan v Londish at [161]-[162] and [234]-[236].) He submits that the section should be construed to permit the court to "validate" an act of a stranger to the Company only if the appointment of that stranger to the relevant office is itself capable of being validated.
122In that connection, Mr McHugh points out that one of the six matters concerning which the primary judge refused to grant validation was "the expiry of the terms of office of ... [Ami] as a consequence of [his] having been appointed 'only until' the 31 December 1973 annual general meeting" (135). The primary judge recognised that it was necessary to identify the "provision of the constitution of" the Company "by reason of" the "contravention" of which the matter in question is (or, perhaps, maybe) "invalid". He said that it was necessary for that process of identification to be gone through:
"since the order under s 1322(4)(a) is one declaring a matter to be 'not invalid by reason of' a 'contravention', so that it is the invalidating effect of the 'contravention' that is displaced or reversed by the order." ([142])
123The primary judge was unable to identify a "contravention" in the circumstances in which Ami ceased to hold office:
"No provision of the constitution was disobeyed. An attempt to take some course allowed by the constitution did not miscarry because of failure to take a step contemplated by the constitution [Leo] and [Hedy] made appointments under article 69. The appointments took effect in accordance with that article and continued until the end point fixed by the article. There was no 'contravention' when, at that end point, the appointments expired." ([144])
124Mr McHugh sought to use the primary judge's refusal to validate Ami's appointment as a basis for distinguishing the present case from Australian Continental Resources. That case gave consideration to the application of s 366(3) Companies Ordinance 1962 (ACT), a predecessor of s 1322 Corporations Act. So far as relevant s 366(3) Companies Ordinance provided:
"Without affecting the generality of sub-sections (1) and (2) of this section or of any other provision of this Ordinance, where any omission, defect, error or irregularity (including the absence of a quorum at any meeting of a company or of the directors or creditors of a company, or at a joint meeting of creditors and members of a company) has occurred in the management or administration of a company whereby-
(a) a breach of any of the provisions of this Ordinance has occurred;
(b) there has been default in the observance of the memorandum or articles of the company; or
(c) any proceedings at or in connexion with any meeting of the company or of the directors or creditors of the company or a joint meeting of creditors and members of the company or any assemblage purporting to be such a meeting, have been rendered ineffective, including the failure to make or lodge any declaration of solvency pursuant to section two hundred and fifty-seven of this Ordinance,
the Court
(d) may, either of its own motion or on the application of any interested person, make such order as it thinks fit to rectify, or cause to be rectified or to negative or modify, or cause to be modified, the consequences in law of any such omission, defect, error or irregularity or to validate any act, matter or thing rendered or alleged to have been rendered invalid by or as a result of any such omission, defect, error or irregularity;
(e) shall, before making any such order, satisfy itself that such an order would not do injustice to the company or to any member or creditor thereof;
(f) where any such order is made, may give such ancillary or consequential directions as it thinks fit; and
(g) may determine what notice or summons is to be given to other persons of the intention to make any such application or of the intention to make such an order and whether and how it should be given or served and whether it should be advertised in any newspaper."
125There is a fundamental respect in which the wording of s 1322(4) Corporations Act differs from that of s 366(3) Companies Ordinance 1962. The structure of the former s 366(3) was to first identify, in its chapeau and in paras (a), (b), (c) and (e) a set of circumstances in which the sub-section could operate, and then identify in paras (d), (f) and (g) various types of orders that the court could make in those circumstances. The only preconditions for the operation of s 1322(4) are that there is an "application by any interested person", and that the requirements of s 1322(6) are met. Once there is an "application by any interested person" the rest of s 1322(4) is concerned with nothing but identification of types of orders that can be made. That difference in structure has the consequence that decisions under s 366(3) are of very limited help in deciding the scope of the power under s 1322(4)(a). However, I will go on to consider the consequences that Mr McHugh submits follow from Australian Continental Resources.
126In Australian Continental Resources, s 366(3) was invoked concerning the appointment of three directors, Messrs Cowper, Elliott and Ware. Mr Cowper's appointment was invalid because he did not hold the necessary qualification shares at the time of his purported appointment. He was appointed by Mr Macarthur-Stanham (who had ceased to be a director who could validly act as such because he had disposed of his qualification shares) and Mr Wenham. Mr Wenham was undoubtedly a director, and would have had power under an article the equivalent of article 87 in the present case to act by himself to appoint a qualified person to be a director. Messrs Elliott and Ware were purportedly appointed by Messrs Macarthur-Stanham and Cowper, neither of whom was a director at the time. I have earlier discussed at [72]-[82] why the incapacity of Mr Macarthur-Stanham to appoint Messrs Elliott and Ware would be validated by s 119, if Messrs Elliott and Ware had held the necessary qualification shares.
127Blackburn J made an order under s 366(3) validating the appointment of Messrs Cowper, Elliott and Ware. He held, at 415, that their failure to hold qualification shares was an "error or irregularity", and that the purported appointment of them entailed a "default in observance of the ... articles. He rejected an argument that the purported appointment had not occurred "in the management or administration of a company", because "the persons who committed the error (Messrs Macarthur-Stanham and Cowper) were not even directors; they were in the eyes of the law strangers to the company" (416). His reason for rejecting that argument was, at 416:
"... to put such a construction on the words 'management or administration of a company' would be to deprive the section of much of its usefulness. Unless the words 'management or administration' can be, where necessary, construed as 'purported management or administration', the beneficent effect of the section must be drastically reduced. I can find nothing in the rest of the section or in the Ordinance which suggests that the narrower construction should be adopted."
128Mr McHugh suggests a critical distinction between the present case and Australian Continental Resources is that in the latter case every invalidity along the way to the final invalidity that was cured under s 366(3) was able to be cured. Similarly, he submits in Sheahan v Londish all the invalidities along the way to the appointment of the administrator were able to be cured.
129I observe that none of the phrases that were critical in Blackburn J's argument ("error or irregularity", "a default in observance of the ... articles" and "in the management or administration of a company") occurs in s 1322. However, to deal with the substance of Mr McHugh's argument, in my view, there is no justification for imposing a limitation of the kind he submits on the words of s 1322(4)(a). Doing so would sit awkwardly with a significant body of authority (some of it in this Court) concerning the construction of s 1322. More importantly, it would be contrary to the repeated statements of the High Court about the correct way to construe statutes that confer a jurisdiction on a court.
130There is ample authority that s 1322 is a remedial provision which is to be applied with liberality: North Sydney Brick & Tile Co Ltd v Darvall at 341; NRMA Ltd v Gould (1995) 18 ACSR 290 at 292; Jordan v Avram at 154; Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd [2001] NSWCA 427; (2001) 166 FLR 144; 40 ACSR 221; at [74]; Re Centennial Coal Co Ltd at [15]. However, I recognise that that does not necessarily mean it is to be applied with unbounded liberality.
131Even if one were approaching the construction of s 1322 without any reliance on previous authority concerning the section itself, there is ample High Court authority that provisions conferring jurisdiction or granting powers to a court are not to be read by making implications or imposing limitations which are not found in the express words: FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 at 283-284 per Wilson J; at 290 per Gaudron J; Knight v F P Special Assets Ltd (1992) 174 CLR 178 at 185, 205; Patton v Buchanan Borehole Collieries Pty Ltd (1992) 178 CLR 14 at 17; Owners of 'Shin Kobe Maru' v Empire Shipping Co Inc (1994) 181 CLR 404 at 421; David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 275-276 per Gummow J; PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 313, per Brennan CJ, Gaudron and McHugh JJ; Oshlack v Richmond River Council (1998) 193 CLR 72 at 81 per Gaudron and Gummow JJ; Australasian Memory v Brien [2000] HCA 30; (2000) 200 CLR 270 at [17]; Mansfield v Director of Public Prosecutions for Western Australia [2006] HCA 38; (2006) 226 CLR 486 at 492 at [10]
132Even at the level of the previous case law, a significant obstacle to the success of the argument that the court lacked power to make the validating order is the decision in Nece Pty Ltd v Ritek Incorporation (1997) 24 ACSR 38. It arose from a dispute within a joint-venture company. The company's shares were evenly held by the two joint venturers, and each joint-venturer had appointed one director. In circumstances where relations between the joint-venturers had broken down, the managing director purported to appoint solicitors to act for the company. In a challenge to the retainer of the company's solicitors, Lehane J held that the managing director did not have implied authority by virtue of his position to appoint solicitors to carry out the particular non-routine task for which the managing director had purported to appoint them. Lehane J refused to validate the appointment by an order under s 1322(4). He said, at 45:
"It is correct, I think, to describe the acts, taken without authority (but capable of authorisation if the appropriate procedures under the articles were followed) as 'invalid' for the purposes of the section: compare North Sydney Brick & Tile Co Ltd v Darvall (1989) 17 NSWLR 327 at 341 ; 15 ACLR 706. ....
I accept that, as Clarke JA expressed it in North Sydney Brick & Tile at NSWLR 341:
... [the section] is of a remedial character and should be accorded, therefore, a liberal interpretation. In particular it has been held that the scope and operation of the section should not be subverted or restricted solely because of the effect which its exercise might occasion to third persons: Omega Estates Pty Ltd v Ganke (1962) 80 WN (NSW) 1218 at 1225; [1963] NSWR 1416 at 1427.'"
133He summarised the relevant principle at 46:
"It is true that cases such as North Sydney Brick & Tile and Omega Estates proceed on the basis that if something is done which has not been properly authorised because, for example, appropriate resolutions have not been passed or because there is in office no validly elected board of directors, the doing of it without authority may be regarded as a contravention, for these purposes, of the articles of association."
134However, he went on to hold, at 46, that there had been no relevant contravention of the constitution of the company (and had earlier held, at 45, that there was no question of a contravention of the Act):
"The problem in this case, however, is that there is not merely a 'contravention'; there is, it appears to be common ground, deadlock. The reason there is no authority, and no ratification, is that it is not given because one of the parties - particularly, one the directors - whose affirmative vote is needed in order that it should be given is unwilling to give that affirmative vote. It could hardly be said, where lack of authority resulted from a positive decision of the competent authority of a company - ordinarily the board of directors - to refuse it, that an act done in purported exercise of the authority thus refused was invalid by reason of a contravention of the articles. That must equally be true, I think, if authority is sought by way of a proposal to the board but refused. The situation can be no different, in my view, where in the circumstances it is plain that authority, if sought, would be refused."
135In the present case the primary judge at [151] accepted the correctness of the principle that Lehane J stated, and that I have set out at [133] above. He said, at [152]:
"The absence of the formal status of sole extent director that would have enabled [Ami] to act as he purported to act on 30 July 2003 is of the same quality as nonexistence of validly elected board of directors and therefore within the relevant concept of 'contravention'."
136Mr McHugh submits that the principle stated by Lehane J was obiter dicta. It is unnecessary to express a view about whether that proposition is correct, because when Lehane J was sitting as a first instance judge, and this court is an appellate court, what matters for us is the persuasiveness of his exposition of the law, not whether it was part of the ratio of the particular case.
137Mr McHugh also submits that, in any event, the principle stated by Lehane J is wrong. I would be very slow indeed in coming to the conclusion that anything that Lehane J said was wrong. In the present case Lehane J was, as usual, right.
138The Macquarie Dictionary recognises that the ordinary meaning of "contravene" includes "to come or be in conflict with; go or act counter to; oppose". The etymological root of the word is "contravenire", meaning, "to oppose". The ordinary meaning of "any contravention of a provision of this Act or a provision of the constitution of a corporation" extends to an action that is opposed to, or not in accordance with, a provision of the Act or a provision of the constitution of the corporation.
139There is nothing in the text of s 1322 that suggests that in the context of that particular section one should not accord "contravention" in s 1322(4) its full meaning. The provisions of s 1322 that precede 1322(4) are concerned with the validation of procedural irregularities. The language shows that the scope of s 1322(4)(a) is wider than that. Of the preconditions to the operation of s 1322(4)(a), s 1322(6)(a)(i), allows as one possibility "that the act, matter or thing, or the preceding referred to in that paragraph is essentially of a procedural nature", but s 1322(6)(a)(ii) and (iii) go on to identify other circumstances in which an order under s 1322(4)(a) can be made. In particular, there is nothing in the wording of s 1322(4) that restricts the court's power under s 1322(4)(a) to being used only in cases where all the steps that have resulted in the invalidity that is in question could themselves be validated. All that is required for there to be a "contravention" of the constitution is that something have happened that is different to what the constitution of the corporation requires. For Ami to appoint Helen as director, when he had no power to do so, is a contravention in this sense.
140Nor is there anything in the purpose of s 1322 that suggest that one should restrict the usual meaning of "contravention". There are a multitude of ways, impossible to specify in advance, in which the administration of the company might come to transgress legal boundaries, or be different to what the Act or the constitution of the company required, or where the operation of the company in accordance with what would ordinarily be the applicable legal requirements has become either impossible, or commercially undesirable. One of the manifest purposes of s 1322(4)(a) is to permit the court to have a wide discretion, exercised (as s 1322(6)(c) shows) by reference to the justice of the individual case, to excuse a transgression or a departure from the proper course of administration, and to take steps to ensure that the transgression or departure does not thereafter impede the proper administration of the company. The wording of s 1322(4)(a) is wide enough to empower the court to rescue a company from a situation in which its administration has become paralysed.
141There is nothing in the purpose of the Act, considered as a whole, to show that the language should not be given its full width. Section 1322 is by no means the only section in the Corporations Act that confers a wide discretionary power on the court to deal with departures from the legal requirements for the operation of companies, or to authorise, by reference to the circumstances of the individual case, some departure from the course that the law would otherwise require to be followed concerning the conduct of the affairs of the company. Without being exhaustive, other examples are found in s 249G (power of court to call a meeting of members of the company), s 266(4) (power of court to extend time for lodgement of charge), s 411 (power of court to authorise schemes of arrangement), s 447A (power of the court to modify manner of operation of Part 5.3A), and s 461(1)(d)(e)(f)(g) and (k) (various discretionary grounds for ordering winding up). Further, some provisions of the Act have as their purpose avoiding the destructiveness involved in winding up a business to the extent it is still viable. Section 435A says so explicitly, and it is fairly clear that that is one of the purposes of s 249G and s 411.
142Mr McHugh's submission is also contrary to NRMA Ltd v Gould (1995) 18 ACSR 290 at 292-293. In NRMA v Gould, Young J (as his Honour them was) recognised: "Normally the word 'contravention' indicates an act or omission which is blameworthy and may lead to civil or criminal consequences". However, he noted that s 1322(4)(c) of the Corporations Law enabled the Court to make:
"an order relieving a person in whole or part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a)" (emphasis added).
143He accepted that reading "contravention" in s 1322(4)(a) in a "very wide sense", "would indeed be in the spirit of the decisions that have been given under the section and its predecessor since Ganke's case and indeed consistent with the philosophy of the Corporations Law set out in s 109H". Section 109H, that his Honour there referred to, provided that in interpreting a provision of the Law a construction that would promote the purpose or object underlying the Law (whether that purpose or object was expressly stated in the Law or not) was to be preferred to a construction that would not promote that purpose or object.
144Young J held that s 1322(4)(a) enabled him to make an order that validated an election that a company proposed to hold, notwithstanding that three of the candidates were, on the proper construction of the articles, ineligible to stand for election as directors. They were ineligible because the articles required that a candidate be a member of the company at the time of nomination, and the candidates in question had become members of the company only after the time for nominations had closed.
145Section 1322(4)(c) of the Corporations Law is identical with the present s 1322(4)(c) of the Corporations Act. Though the Corporations Act does not now contain a s 109H, s 5C Corporations Act makes the provisions of the Acts Interpretation Act 1901 (Cth) applicable to the interpretation of the Corporations Act. Section 15AA Acts Interpretation Act does not differ materially from the former s 109H of the Corporations Law. Thus the law has not materially changed since NRMA v Gould was decided.
146The decision in NRMA v Gould was given on 1 September 1995. The nominations for the election in question had closed on 25 August 1995. As the opening sentence of the judgment makes clear, the decision was given before the election was held. This is of some importance for understanding the significance of the order that Young J made. It is not as though he validated the result of an election in the course of which there had been an irregularity by reason of some ineligible candidates standing. Rather, he validated the nomination of the candidates, notwithstanding that under the articles of Association those nominations were nullities. That is exactly the sort of order that, on Mr McHugh's submission, cannot be made. For the reasons I have earlier given, Young J was right in holding the making of that order was within power. Further, we have not had our attention drawn to any criticism of the decision in the more than 16 years since it was made.
147Mr McHugh also submitted, though without independent elaboration, that Ami's purported appointment of Helen was not an act that "purported to have been done in relation to the corporation". I do not accept that that is so.
148The very notion of an act "purporting" to be done is that it is not (or might not be) really done, but that it has the pretence or appearance of being done. Fairly clearly, Ami's attempt to appoint Helen was an act of appointment that purported to be done. His making of the resolution, and his formal recording of it as a company minute looked like steps in the administration of the company. On the face of it, the minute of the resolution looked like a minute of the sort of resolution that a continuing sole director would have been entitled to make.
149Further, when the Purported Appointment was an act by someone who acted as though he was a director of the company, and purported to be an appointment of another director of the Company, it purported to be done "in relation to" the Company. It is a commonplace of statutory construction that "in relation to" can express any sort of relationship between two subject matters: Law Society of New South Wales v Bruce (1996) 40 NSWLR 77 per Giles CJ Comm D and cases there cited. Though there might sometimes be contextual matters that lead one to read the generality of that expression down, I can find no such contextual matters in the present case.
150As well, even though Ami did not validly hold office as a director at the time of the Purported Appointment, he was no stranger to the affairs of the Company. He had ceased to hold office on 31 December 1973, but by the time of the Purported Appointment he had been acting as a director over the entire time from his initial appointment on 29 June 1973, ie, a period of over thirty years. During that time, there had been no objection to his acting as though he were a director. It is not suggested that he did not honestly believe that he had the power that he purported to exercise. Indeed, after the Purported Appointment there was no objection for some years to Ami continuing to act as a director, nor to Helen acting as though she were entitled to the office to which Ami had purported to appoint her.
151Similarly to this case, in NRMA v Gould the candidates were not intermeddling strangers to the affairs of the company. As Young J found at 291-292, two of them were directors of companies which had been longstanding members and the third was a member of a trade union which was a member and had also been a member personally in the past. As his Honour found at 293:
"... each of the three defendants mistakenly thought that they were entitled to stand for the Board of Directors of the company. Each, when it was pointed out to them that they were ineligible, took immediate steps to cure the problem and two of them cured the problem within ten minutes of the deadline. The third regularised the position two working days later."
152Though there does not seem to have been an issue in NRMA v Gould about whether the nominations were acts that "purported to have been done in relation to the corporation", those facts would assist in being satisfied that the nominations had that characteristic.
153Mr Jackson pointed out that Ami was within the extended definition of "director" in s 9 of the Corporations Act by virtue of being a person who is not validly appointed as a director, but who acts in the position of a director. While that is true, I have difficulty in seeing how it enters into the construction of s 1322(4). However, as I have held, the fact that Ami had been a de facto director for decades is relevant to concluding that the Purported Appointment was an "act ... purporting to have been ... taken ... in relation to a corporation". For these reasons, I conclude that the primary judge was right in holding that the order he made was the type that fell within the wording of s 1322(4)(a).