CONSIDERATION
30 The first matter raised by Maurice is that there is insufficient evidence for the Court to find that any resolution was passed to remove Maurice as a director of P & M Gudgeon on 27 June 2018.
31 Peter's evidence in relation to what occurred at that meeting, which was admitted over objection by Maurice, is set out at [15] above. There are no minutes of the meeting in evidence and Peter conceded that no minutes had been prepared. Thus the only record of what occurred is that given by Peter for the purpose of this proceeding.
32 The failure to prepare minutes of a meeting constitutes a breach by P & M Gudgeon of s 251A of the Corporations Act which requires that a company must keep minute books in which it records within one month, among other things, proceedings and resolutions of meetings of the company's members. Maurice says that the failure to comply with s 251A goes to the lack of weight that I would afford Peter's evidence of what occurred at the meeting. I accept that there is no corroborating evidence of what occurred at the meeting and that the only account is that given by Peter. That is not surprising as he was the only person present. While P & M Gudgeon has breached s 251A of the Corporations Act by failing to enter a record of the meeting in P & M Gudgeon's minute books within one month of the meeting taking place, that does not lead me to afford little weight to Peter's evidence. P & M Gudgeon is a family held company where the two shareholders, who were at least until the meeting in issue in this proceeding also its directors, have fallen out and are no longer speaking directly to one another. While its failure to follow the legislative obligations imposed on it is a matter of concern and one to be taken seriously, it is not surprising in the circumstances.
33 The second matter raised by Maurice relies on the decision in Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 (Kuhl) at [63] where Heydon, Crennan and Bell JJ said:
The rule in Jones v Dunkel is that the unexplained failure by a party to call a witness may in appropriate circumstances support an inference that the uncalled evidence would not have assisted the party's case. That is particularly so where it is the party which is the uncalled witness. The failure to call a witness may also permit the court to draw, with greater confidence, any inference unfavourable to the party that failed to call the witness, if that uncalled witness appears to be in a position to cast light on whether the inference should be drawn. These principles have been extended from instances where a witness has not been called at all to instances where a witness has been called but not questioned on particular topics. Where counsel for a party has refrained from asking a witness whom that party has called particular questions on an issue, the court will be less likely to draw inferences favourable to that party from other evidence in relation to that issue. That problem did not arise here. The plaintiff's counsel did ask the plaintiff relevant questions.
(Footnotes omitted.) (Emphasis added.)
34 Maurice submits that the statement in Kuhl at [63] applies equally to written evidence and that Peter's evidence does not include any written records, e.g. minutes or a signed resolution, that one might expect to exist by reason of s 251A of the Corporations Act and, based on the observations in Kuhl, that would weigh against drawing any inferences in favour of Peter arising from any ambiguity in his evidence, although no particular ambiguity was identified. But this is not a case where there has been a failure to call evidence. Peter has given evidence. Nor is it a case where there has been a failure to ask Peter questions about particular topics. Peter has given evidence about the topic in issue: what occurred at the meeting which took place on 27 June 2018. Peter was not asked nor did he give evidence in his affidavit about minutes of the meeting. Rather, a concession has been made that no minutes exist.
35 It was open to Maurice to cross-examine Peter about his version of events and to put questions to him about the failure to produce a documentary record. That did not occur. That there is no corroborating written documentation supporting Peter's version of events is a matter that may go to weight but, on the current state of the evidence, it would not lead me to infer that the meeting did not take place as Peter recounts.
36 The final matter on which Maurice relies and which, he submits, weighs heavily against accepting Peter's evidence is the Form 484 which, Peter says, records that Maurice ceased to be a director on 20 August 2018. Maurice says that that date is not referable to anything in Peter's evidence. Maurice contends that, taking Peter's evidence at its highest, and accepting that a motion to remove Maurice was put to the meeting on 27 June 2018 and passed, then the relevant cessation date was 27 June 2018. Relying on Kuhl at [63] Maurice submits that the Court would not draw any inference favourable to Peter because Peter has not given evidence when in fact he could have done so.
37 The date included in the Form 484 is not explained by Peter and is not consistent with Peter's evidence that a resolution was purportedly passed on 27 June 2018 to remove Maurice as a director of P & M Gudgeon. However, once again that does not cause me to reject Peter's evidence of what occurred on 27 June 2018 or to conclude that there is insufficient evidence to find that any resolution was passed. Peter has given his version of what he says occurred on 27 June 2018. As I have already observed, he was not cross-examined. I would accept Peter's evidence for what it is, namely a description of what he says occurred on 27 June 2018 at the meeting of P & M Gudgeon that he had purportedly convened.
38 Putting that to one side, there are two reasons why, in any event, the answer to the Separate Question must be "no".
39 Most critically there was no quorum present at the time of the purported meeting.
40 The Articles, including Table A, are silent on what constitutes a quorum for the purpose of a meeting of members of P & M Gudgeon. However, s 249(1)(a) of the Corporations Law as it applied at the time of P & M Gudgeon's incorporation and on which Maurice relies relevantly provided:
(1) So far as the articles do not make other provision:
(a) in the case of a proprietary company, 2 members of the company, and in the case of any other company, 3 members, personally present constitute a quorum;
Relevantly, s 249(1)(a) of the Corporations Law applies to P & M Gudgeon because it was incorporated prior to 1 July 1998 and its constitution was not repealed after that day: see s 135(1)(a) of the Corporations Act.
41 On the evidence before me, only Peter was present at the meeting. Thus there was no quorum and the meeting was not validly constituted. Regulation 43 in Table A (see [18] above) sets out what is to occur if no quorum is present at a general meeting. Subject to the nature of the meeting, it is either to be dissolved or to be adjourned to such day, time and place as the directors determine or, if no determination is made by the directors, to the same day in the next week at the same time and place. Neither of those things occurred. Rather, Peter purported to proceed with the meeting despite the fact that it was not validly constituted.
42 Even if, contrary to that conclusion, there was a quorum present for the purposes of a meeting of members, cl 25 of the Articles relevantly provides that the removal of a director may be effected at a general meeting at which "the holders of at least two-thirds of the capital for the time being issued are present in person". To the extent that cl 25 is inconsistent or "in conflict" with reg 62 in Table A (see [18] above), which it is, cl 25 prevails notwithstanding that reg 62 has not been expressly excluded: see cl 1 of the Articles.
43 There is no dispute that the only person present at the meeting was Peter who holds 50% of the issued capital of P & M Gudgeon, which is of course less than the required two-thirds to constitute a sufficient quorum of members present to effect the removal of a director.
44 Peter contends that, because cl 25 of the Articles appears under the heading "disqualification of directors", it only operates where P & M Gudgeon intends to disqualify, as opposed to remove, a director. I disagree. The terms of cl 25 are clear. That clause prescribes the way in which P & M Gudgeon can remove or appoint a director. Clause 24, on the other hand, concerns when, on the happening of any of the events specified therein, the office of director will be ipso facto vacated. Relevantly, that includes when a director is removed from office pursuant to cl 25. The heading "disqualification of directors" or the placement of cl 25 under that heading does not affect the clear meaning of cl 25.
45 Nor does cl 13 of the Articles assist Peter. That clause clearly concerns circular resolutions. That is, the ability to pass a resolution by all members entitled to receive notice of and vote at any meeting of P & M Gudgeon at which the proposed resolution might be considered signing a resolution. Contrary to Peter's submission, it does not apply to validate the conduct of the meeting of P & M Gudgeon in the way in which he contends (see [27] above). It does not permit a member who has convened a meeting to proceed with the meeting and pass a resolution by signing a minute of that resolution in the absence of a quorum.
46 The second reason concerns the notice of meeting which, in my opinion, was defective.
47 The Articles are silent on the requirements of the content of a notice of meeting. However, reg 41(1) in Table A requires a notice of general meeting to "specify the place, the day and the hour of meeting" and, except as provided by reg 41(2), to state "the general nature of the business to be transacted at the meeting". Regulation 41(2) in Table A applies to notices for annual general meetings and provides that "[i]t is not necessary for a notice of annual general meeting to state that the business to be transacted at the meeting includes the declaring of a dividend, the consideration of accounts and the reports of the directors and auditors, the election of directors in the place of those retiring or the appointment and fixing of the remuneration of auditors".
48 In Clarke v Australian Computer Society Incorporated [2019] FCA 2175 at [142] Wigney J summarised the principles governing the requirements of a notice of general meeting as follows:
The relevant principles concerning the requirements of a notice of general meeting are fairly well settled. As noted earlier, the information provided in a notice of general meeting must be such as will enable members to judge for themselves whether to attend the meeting and vote for or against the proposal or whether to leave the matter to be determined by the majority attending and voting at the meeting. Where, as here, the notice must state the purpose of the meeting and the business to be transacted, it "should be so drafted that ordinary minds can fairly understand its meaning … [i]t should not be a tricky notice artfully framed": McLure v Mitchell (1974) 6 ALR 471 at 494; 24 FLR 115 at 140; Dhami v Martin [2010] NSWSC 770; 241 FLR 165 at [51].
49 Here, the notice of meeting was required to set out the "nature of the business to be transacted at the meeting". However, in my opinion, the description included in the notice in the item "Agenda" (see [9] above) was so broad in its terms that Maurice could not fairly understand that the intended business of the meeting was to move a resolution for his removal as a director, which, on the evidence, was the only business in fact transacted at the meeting. That is so notwithstanding the reference to cll 24 to 28 of the Articles, and thus implicitly cl 25, and s 181 of the Corporations Act which concerns the requirement that a director act in good faith.
50 The notice of meeting also omitted a time for the meeting and thus did not comply with reg 41(1) in Table A. However, Maurice accepts that, of itself, that would not invalidate the notice. That is so. The real vice is in the failure to include in the notice information that would enable Maurice to decide for himself whether to attend the meeting. When taken together the two defects and in particular that concerning the failure to give proper notice of the business of the meeting render the notice defective.
51 In Moala v Free Wesleyan Church of Tonga in Australia (Victoria) Inc [2019] VSC 205 at [350] Ginnane J said:
Though not the subject of submissions, the law seems clear that notice requirements must be strictly complied with. Where a meeting of a governing body has been convened, or as the case may be its business has been conducted, in breach of the rules with respect to the giving of notice to all members, in due time and with proper notification of business, or with respect to the numbers required to attend the meeting, the meeting is null and void to all intents and purposes and no business can be validly transacted at the meeting.
(Footnote omitted.)
52 Here, given the defect in the notice, the meeting of P & M Gudgeon was convened in breach of the Articles. It follows that the meeting was "null and void" and no business could have been validly transacted at it.
53 Before leaving this issue it is necessary to address Peter's submission in relation to the effect of s 1322(3) of the Corporations Act. That subsection relevantly provides:
A meeting held for the purposes of this Act, or a meeting notice of which is required to be given in accordance with the provisions of this Act, or any proceeding at such a meeting, is not invalidated only because of the accidental omission to give notice of the meeting or the non‑receipt by any person of notice of the meeting, unless the Court, on the application of the person concerned, a person entitled to attend the meeting or ASIC, declares proceedings at the meeting to be void.
54 However, assuming that the meeting was held for the purposes of the Corporations Act and/or it was a meeting notice of which was required to be given in accordance with its provisions, s 1322(3) of the Corporations Act has no application here. Maurice does not contend that he did not receive notice of the meeting. Rather his contention, which is made out, is that the notice is defective as to its form.