64 Thus, in Re East Norfolk Tramways Co (Barber's Case) [1877] 5 Ch D 963, the concurrence of five out of six directors at a meeting of shareholders to the appointment of another person as a director did not satisfy the requirements of eligibility for the appointment, that the appointee be recommended by the Board.
65 Whilst directors may meet informally and may meet by communicating with each other, although they are not physically in each other's presence so that there is a meeting of minds, rather than a meeting of persons, and whilst their concurrence in the management of the business of the company can be expressed informally, nonetheless there must still be a concurrence in doing things in their capacity as directors and in the management of the company's affairs.
66 In the present case, Mr Maré and Raymond Lord did not in September 2006 concur informally in the appointment of Alan Lord as a director conditionally on his signing a consent to act. They then anticipated that such an appointment would be made in the future. Mr Maré was instructed to do what was necessary for that purpose. They did not purport at that time to make a conditional appointment.
67 A further resolution of directors, however informal, was needed for Alan Lord to be appointed as a director. That was what Mr Maré sought to proceed to do. Until such a resolution was made, Raymond Lord was free to change his mind. His concurrence in the resolution to appoint Alan Lord as a director and Martyn Clapp as a director was needed. He did not concur in those appointments at the time the appointments were purportedly effected.
68 Accordingly, the resolution of 31 December 2006 was invalid.
69 It follows that the resolution to issue 600 shares to Alan Lord was also invalid. That resolution was purportedly passed at a directors' meeting attended by Mr Maré, Alan Lord and Martyn Clapp. Only Mr Maré was a director and he could not effect that resolution himself.
70 In any event, under the 1997 Articles, no further shares could be issued or allotted without the consent of each person who was a member of the company (Article 3.5).
71 Even if there were not these problems, the resolution would be invalid because it was effected for the purpose of securing a majority voting power in favour of Alan Lord so as to prevent the existing members from exercising their voting powers. Such a purpose is foreign to the purpose for which the power to issue shares is conferred. Such an exercise of power is invalid no matter how altruistic might be the motives of those involved (Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285 at 290, 293).
72 As I have said, it was conceded that the share issue was invalid.
73 It follows that the plaintiff is entitled to the relief sought in the summons and to ancillary relief.
74 The second defendant filed an interlocutory process seeking the appointment of a receiver to Hotien Holdings. Alternatively, he sought the appointment of an accountant to investigate the affairs of Hotien Holdings and to investigate, with the assistance of a medical practitioner, whether Raymond Lord is able to discharge his duties as a director.
75 The relief was claimed pursuant to s 241 of the Corporations Act 2001 (Cth). The proceedings were commenced by leave given under s 237. Section 241 provides:
" 241 General powers of the Court
(1) The Court may make any orders, and give any directions, that it considers appropriate in relation to proceedings brought or intervened in with leave, or an application for leave, including:
(a) interim orders; and
(b) directions about the conduct of the proceedings, including requiring mediation; and
(c) an order directing the company, or an officer of the company, to do, or not to do, any act; and
(d) an order appointing an independent person to investigate, and report to the Court on:
(i) the financial affairs of the company; or
(ii) the facts or circumstances which gave rise to the cause of action the subject of the proceedings; or
(iii) the costs incurred in the proceedings by the parties to the proceedings and the person granted leave.
(2) A person appointed by the Court under paragraph (1)(d) is entitled, on giving reasonable notice to the company, to inspect any books of the company for any purpose connected with their appointment.
(3) If the Court appoints a person under paragraph (1)(d):
(a) the Court must also make an order stating who is liable for the remuneration and expenses of the person appointed; and
(b) the Court may vary the order at any time; and
(c) the persons who may be made liable under the order, or the order as varied, are:
(i) all or any of the parties to the proceedings or application; and
(ii) the company; and
(d) if the order, or the order as varied, makes 2 or more persons liable, the order may also determine the nature and extent of the liability of each of those persons.
(4) Subsection (3) does not affect the powers of the Court as to costs. "