Howard v Mechtler

Introduction 1 Regrettably the affairs of the St George Budapest Soccer Club Limited are in a sorry state. When an organisation such as this is riven by factional disputes, principles of corporate governance cannot cure the underlying problem. The best one can hope to do is to apply the requirements of the law with respect to the management of the organisation in a fashion which ensures that legal rights are vindicated. 2 The legal issues raised in the case concern a meeting convened by members of the Club and held on 30 December 1998, after the directors had not convened a meeting in response to a requisition by members. The meeting purported to pass various resolutions, including a resolution to remove the plaintiffs from their positions as directors and a resolution to elect some of the defendants as directors. 3 The plaintiffs claim relief to establish that the meeting was not validly convened; that the first plaintiff (the company secretary as well as a director) had no obligation to convene the meeting; that the resolutions purportedly passed at the meeting are void; and that the first to seventh defendants have not been validly elected as directors of the Club. They also seek an injunction restraining the first to seventh defendants from representing they are entitled to act as directors. By their cross-claim the defendants seek a declaration that the meeting was not invalid. The parties 4 The plaintiffs are seven of the eight directors who were the subject of the dismissal motion, and the defendants are the seven members who were purportedly elected, plus another member who served the requisition for the meeting but was not a candidate for election. 5 The thrust of the relief sought is to enforce the company's constitution, yet the company itself is not a party to the proceedings. Although the point was not contested, it is probable that the plaintiffs have standing in their capacity as members to enforce compliance with the company's constitution against other members: see especially Kraus v G J Lloyd Pty Ltd [1965] VR 232. The matter raised in the proceedings is in a sense a matter of internal management, but it is also a matter which affects the proper constitution of an organ of the company. If the constitution has not been complied with in the manner alleged, the defect cannot be cured by ordinary resolution of the members in general meeting: see Ford's Principles of Corporations Law (Looseleaf) pages 1118-7. Further, to the extent that the plaintiffs invoke statutory provisions such as s 225 and ss 249Q and 249R, they may have standing under s 1324. I therefore proceed on the basis that it is not necessary to join the company in the proceedings. The Club and its business 6 The Club was incorporated in 1966 as a non-profit company limited by guarantee. Its constitution limits the number of full members to 300 and the evidence suggests that the actual number of members is about 140. As a company limited by guarantee, the Club is a public company: see definition of 'public company' in s 9 of the Corporations Law. 7 Prior to April 1997 the Club's principal business was conducted at licensed premises which it owned at 84 Victoria Avenue, Mortdale. Additionally, the Club has teams in National and State as well as junior soccer competitions and had a long-term licence of stadium facilities at 88 Bestic Street, Rockdale. 8 The Club experienced poor trading results over a period of time and so on 21 April 1998 the directors appointed Mr M C Donnelly as administrator. The administrator ceased trading at the licensed premises in Mortdale and set about exploring the sale of the freehold of the site for residential flat development. On the administrator's recommendation, creditors approved a deed of company arrangement which was entered into on 16 May 1997, in order to achieve an ordinary realisation of assets and the development for sale of the Mortdale site. As is typical in such deeds, the deed of company arrangement provided that unless the administrator otherwise decides, the directors have full control of the company's property, business and affairs subject to the terms of the deed. 9 The administrator's attempts to secure development approval for the Mortdale site proved to be unsuccessful. Consequently, he convened a meeting of creditors held on 1 September 1997, at which the creditors passed a resolution approving an amendment to the deed of company arrangement to permit him to negotiate and give effect to a sale of the Mortdale premises by private treaty without development approval. He then continued his negotiations for the sale of the property. The evidence indicates that a contract for the sale of the property has been entered into, though there is no evidence as to the identity of the purchaser, nor as to all terms of the sale. The emerging dispute 10 One infers from the evidence as a whole that during the period of administration of the company under the deed, tensions have grown substantially between at least two factions of the Club. One group, represented by the plaintiffs, is concerned to ensure an effective sale of the Mortdale premises and to develop the Club's sporting activities in close association with a body called St George Soccer Association Inc, with whom some of the plaintiffs are connected. 11 Another faction, represented, it seems, by the defendants, opposes the closeness of the connection between the Club and the Association and is concerned to ensure that the Mortdale site is sold for the best price, preferably after securing development consent. Beyond disputes about those specific issues, there seems to be a difference between the factions which has to do with the desire of at least Mr Mechtler, one of the defendants, and presumably his colleagues, to maintain the link between the current Club and the football team's origins and its connection with Budapest and the Hungarian culture. 12 Whatever be the true nature of the dispute between the parties and their respective factions, it is clear that an argument emerged during the course of 1998 which has led to these proceedings. There were essentially three important developments during that year so far as the present proceedings are concerned: namely, the amendment of the Club's constitution on 1 October 1998, the general meeting of 12 November 1998, and the further meeting of 30 December 1998. The amendment to the constitution 13 Article 15(2) had previously provided for the composition of the Board of Directors in the following terms. The members were to elect a Board of Directors of eleven at each annual general meeting. Three-elevenths of the number to be elected were required to have the special qualification of being members nominated by the Management Committee of the St George Soccer Association; three-elevenths were to have the special qualification of being debenture holders; three-elevenths were to have the special qualification of being members nominated by the St George Budapest Sports Club; and the remaining two-elevenths were to be elected from the members of the Club generally. 14 The amendment to Article 15(2) adopted on 1 October 1998 replaced that provision with the following words: 'The members shall elect seven persons to the office of the director from the members nominated'. 15 The amendment is presumably intended to have the effect that in due course the size of the Board is to be reduced to seven and all directors will be elected by the members without any special qualifications or special nomination procedures applicable to any sub-group of directors. However, the amendment does not contain any transitional provision or otherwise deal with the position of the existing directors. That being so, it would appear that the directors in office at the time of the adoption of the amendment remain in office and are entitled to remain in office until the elections at the next Annual General Meeting. There is no dispute as to the validity of the amendment in the present proceedings but it provides important background for the dispute which has emerged in this case. The meeting of 12 November 1998 16 The second development arose out of a requisition for a meeting of members which was delivered to the secretary of the Club on 20 October 1998. The requisition purported to require the directors to convene a meeting of the members to consider the following special resolutions: (1) resolution that pursuant to Article 18(b) the members remove from office directors including the plaintiffs and others; (2) resolution appointing a number of directors, including some of the defendants, to act as directors in place of those removed. 17 The requisition was signed by the eighth defendant. Two Articles of the Club's constitution are relevant to this requisition, and to the subsequent requisition to which I shall refer. They are Articles 18(b) and 26. They are in the following terms: '18(b) The Club may by special resolution carried at an extraordinary general meeting remove any Director or all the Directors before the expiration of his or their period of office and appoint another or other Director or Directors as the case may be in his or their place. The person or persons so appointed shall hold office during such time only as the Director or Directors removed would have held office if he or they had not been so removed. 26. An extraordinary general meeting may be called on any date by the President or the Board and shall be called by the secretary upon receipt by him of a requisition which need not be in one document signed by not less than one-tenth of the total number of members entitled to vote, stating the business to be considered. The date of such meeting shall be within forty days of receipt of such requisition. Provided that such meeting is not called within fourteen (14) days of receipt of the requisition, the requisitionists or a majority of them may themselves call the meeting and for that purpose shall have access to the Register of members and any other records necessary for the purpose of calling a meeting of members.' 18 It will be noted that Article 18(b) requires a special resolution for the removal of directors. This is in contrast with s 227 of the Corporations Law, which also applies to a public company such as the Club. Section 227 gives members the right to remove directors by ordinary resolution on special notice and gives the directors the right to make representations which are distributed to the members. Case law indicates that where, as here, the constitution of the company sets up a procedure for removal of directors which is different from s 227, those who convene the meeting at which removal resolutions are to be put, have, in effect, the right of election whether to proceed under the company's constitution or under s 227: see Shanahan v Pivot Pty Ltd (1998) 26 ACSR 740 at 748; Link Agricultural Pty Ltd v Shanahan (1998) 28 ACSR 498 at 516-7. Both the October requisition and the subsequent requisition in November 1998 signify an election to proceed under the constitution of the company rather than under s 227, which is therefore not relevant. 19 Pursuant to Article 26, the directors responded to the requisition by convening the meeting which was held on 12 November 1998. Seventy-five members were present. The special resolutions to remove and elect directors were put consecutively. The first resolution was defeated, sixty-two per cent of those voting favouring removal. The second resolution was then defeated, sixty-one per cent of those voting favouring removal. Of course, the passage of a special resolution requires approval of seventy-five per cent of the members present and voting. The meeting of 30 December 1998 20 The third important event, and the one most relevant to these proceedings, is a meeting which flowed from a requisition served by the eighth defendant on the first plaintiff, Mr Howard, on 24 November 1998. There appears to be a dispute as to the validity of the service of the requisition, since it was not served at the registered office of the company. The registered office of the company remained the Mortdale address but it appears from the evidence that those premises had been closed up and were not occupied. It is clear, however, that the requisition was brought to the attention of the Board of Directors of the plaintiff through its personal service on Mr Howard. It seems to me that if it were necessary to cure any deficiency in service, it would be entirely appropriate to do so by the exercise of the Court's discretion conferred by s 1322. In my opinion, the circumstances of service of the requisition were adequate to constitute proper service under the Corporations Law and under the constitution of the company, particularly Article 52. 21 This time the directors did not convene a meeting within the period of fourteen days allowed by Article 26. In those circumstances the effect of Article 26 was to permit the requisitioning members, or a majority of them, to call the meeting themselves provided that the meeting was convened within the period of forty days from receipt of the requisition. I note that Article 26 establishes a regime for requisitioning meetings which exists in parallel to the provisions of the Corporations Law, ss 249D and 249E. In fact, the provisions of Article 26 are more stringent in the sense of providing for the convening of the meeting by the directors within fourteen days rather than (as in the case of the Corporations Law) twenty-one days, and by requiring that the meeting be held in any event within forty days rather than (as in the case of the Corporations Law) three months. Another difference is that Article 26 casts the obligation to convene the meeting on the secretary, whereas s 249D casts the obligation on the directors as a whole. 22 The requisitionists proceeded to convene a meeting by posting to members a notice signed by the eighth defendant inviting members to attend an extraordinary general meeting of the Club to be held on 30 December 1998 at 6pm. The directors adopted the course of approving a circular signed by Mr Howard and sent to the members on 22 December 1998. In that circular they claimed that according to their legal advice the notice convening the meeting for 30 December 1998 was invalid and void. They asserted that in view of the defeat of resolutions for the dismissal of the directors at the November meeting it would, in their opinion, be an abuse of proper procedure for a further meeting to be held so soon on the same topic. Nevertheless, the meeting was held, and about 53 members attended. It appears from the evidence that the directors under challenge did not attend. 23 There is a lengthy minute of the meeting, indicating what transpired at the meeting on that day. Clearly, special resolutions were put for the dismissal of directors and for the appointment of directors, and equally clearly those resolutions were carried by those present at the meeting. However, it appears to me that the conduct of the meeting left a great deal to be desired. 24 First, I note that the notice convening the meeting indicated that a number of resolutions were to be put to the meeting as ordinary resolutions, in addition to the special resolutions for dismissal and appointment of directors. The resolutions proposed as ordinary resolutions were scarcely coherent. They involved a series of assertions concerning oppressive and unjust conduct and conflicts of interest on the part of certain specified directors, apparently arising principally out of the connection of some directors with St George Soccer Association Inc. In each case the resolution purports to call upon the administrator to use his power under the Corporations Law to enforce the resolution. There is a resolution declaring that the directors, having lost the confidence of the majority of the members of the company, be restrained from voting in respect of the special resolutions to be presented to the meeting and inviting the administrator to use his power under the Corporations Law to achieve this objective. There is also a resolution for the Board to refrain from any negotiations that involve any of the assets of the Club and in particular, the stadium and the Club's teams. 25 Some of these resolutions are proposed in simple disregard of the basic principle of corporate law that where, as here, the management of the affairs of a company is vested exclusively in the Board of Directors of the company (see Article 21), the members in general meeting cannot intervene to override decisions of the directors: NRMA Ltd v Parker (1986) 11 ACLR 1. The resolutions reflect additional, and in some ways more serious, confusion about corporate law. They indicate a view which, according to the minutes, was also asserted by the chairman of the meeting on 30 December 1998, Mr Mechtler, to the effect that an administrator under a deed of company arrangement has the power to enforce resolutions with respect to such matters as conflicts of interests by directors, alleged oppressive conduct by them and constraints upon their exercise of their rights as members to vote at a general meeting of members. 26 According to the minutes, Mr Mechtler read out s 442A of the Corporations Law, as if it had application to the circumstances before him, in order to show that the administrator had the power to do what the resolutions invited him to do, and thereby to show that the directors had been misleading in asserting the contrary. Section 442 only applies to an administrator of a company under administration. It is plain from s 435C that the administration of a company ends when a deed of company arrangement is executed. I mention this not through any pedantic insistence on the correct application of the Corporations Law, but because it signifies that the members at the meeting on 30 December 1998 are likely to have been misled on a matter of some significance, namely whether the directors may have deliberately misled them. 27 There are other problems with the conduct of the meeting on 30 December, if the minutes are an accurate record of what occurred. For example, Mr Mechtler appears to have presented an incorrect view to the members as to the effect of the amendments of 1 October 1998. As earlier noted, those amendments did not contain any transitional provision, a matter which itself signifies an immature approach to matters of corporate governance. In those circumstances, the passage of the resolution to amend Article 15(2) did not affect the holding of office by the then existing directors, contrary to Mr Mechtler's representation to the meeting. 28 Another matter relates to an apparent attempt at the meeting to cure short notice of the meeting by passing a resolution purportedly under s 247(3)(b) of the Corporations Law. That section was superseded on 1 July 1998 by s 249H(2). More importantly, the section is applicable only when there is a vote by members with at least ninety-five per cent of the votes that may be cast at a meeting. The question is not whether ninety-five per cent of the votes of members who happened to be present at the meeting have been secured. The grounds for challenging the meeting of 30 December 1998 29 In these circumstances, the plaintiffs challenge the validity of what occurred on 30 December 1998 on three specific bases, namely: (1) inadequacy of notice of the meeting; (2) impropriety of purpose of the requisitionists; (3) convening the meeting at an inappropriate time and place. 30 I shall deal with each of these in turn. However, when I perused the affidavit evidence in chambers after the hearing, I noticed that the resolution for the appointment of new directors which was passed on 30 December 1998, is cast in the form of a single resolution purporting to elect multiple directors. My Associate therefore sent a note to counsel for the parties inviting them to make any submissions they may wish to make as to the possible application of s 225 of the Corporations Law. I received submissions from both parties and I propose to deal with that matter as well as the grounds of challenge stated above. Inadequacy of notice 31 Article 27(c)(ii) stipulates a requirement of twenty-one clear days' notice for an extraordinary general meeting convened for the passing of a special resolution. Article 52 deals with the time of service of a notice which is served by post. In the case of a notice convening a meeting, Article 52 has the result that service is effected the day after posting. Therefore, a notice posted on 9 December 1998 in respect of a meeting convened for 30 December 1998 fails to comply with the requirements of the constitution because it provides only nineteen clear days' notice, two days short of the requirement of the Articles. Section 249H(1) of the Corporations Law requires at least twenty-one days' notice of a meeting of members but allows the constitution to specify a longer minimum time (for example, as here, twenty-one clear days). 32 As I have mentioned, the attempt to cure the deficiency of notice by passing a resolution purportedly under s 259H(3) clearly failed. It follows that the meeting was not validly convened because of the absence of notice. It may be saved by the curative effect of s 1322. Section 1322(2) states that a proceeding under the Law (an extraordinary general meeting of members is clearly such a proceeding) is not invalidated because of any procedural irregularity unless the Court is of the opinion that the irregularity has caused or may cause substantial injustice that cannot be remedied by any order of the Court and by order declares the proceeding to be invalid. By s 1322(1)(b)(ii) the reference to a procedural irregularity includes a reference to a deficiency of notice. Therefore s 1322(2) applies to produce automatic validation of the meeting notwithstanding the lack of adequate notice, unless the Court intervenes by order. 33 The general approach of the Courts to matters of this kind is to seek to use s 1322 in a beneficial manner where it is clear that the defect is in the nature of a technical one and no injustice has occurred. In Australian Hydrocarbons Ltd v Green (1985) 10 ACLC 72 at 79 Hodgson J expressed the opinion that the onus of proving substantial injustice rests on those alleging it. One infers from his judgment that he regarded the onus as a substantial one. Similarly in Re Tantalex Ltd (1986) 8 NSWLR 8 the Court was clearly willing to use s 1322 to cure a lack of 21 days' notice of a special resolution, notwithstanding the specific requirement of the Corporations Law that 21 days' notice be provided. The criteria which need to be established in order for the Court to intervene under s 1322(2) were explored in Sipad Holdings Pty Ltd v Popovic (1994) 61 FCR 204. 34 I have considered these cases carefully. Nevertheless, I have come to the view that in all the circumstances of the present case it is appropriate to intervene by making an order under s 1322(2) declaring the proceeding to be invalid because of the deficiency of notice. In reaching this conclusion I have taken the following matters particularly into account. First, the resolutions which were put to the members on 30 December 1998 were very important. Section 249H(3)(a) and (b) do not directly apply in the present circumstances because, as I have indicated, the requisitioning members are able to choose to proceed to remove directors under the corporate constitution rather than under s 227. Nevertheless, those provisions indicate the importance which the Legislature has attached to a proposal for the removal of directors. This implies a need to ensure that the requirements as to notice are strictly adhered to when a resolution of such importance is to be put to the members. 35 Secondly, one of the specific resolutions to be put to the meeting on 30 December 1998 was the election of an over-age director. Section 249H(3)(c) is directly applicable. It states that at least twenty-one days' notice must be given of a meeting of members of a public company at which a resolution will be moved to appoint or re-appoint a director under s 228(7) or (8). While there may be a residuum of discretion under s 1322 to overcome the requirements of s 249H(3)(c) in an appropriate case, it seems to me that the present circumstances are not sufficiently compelling to act in a manner which would be specifically contrary to the wording of that provision. 36 Finally, in deciding to make an order under s 1322(2) I am influenced by the risk of confusion which may arise if such an order is not made. For reasons I am about to give, the appointment of the new directors was in this case invalid under s 225 in circumstances where, in my view, it would be inappropriate to cure the invalidity under s 1322. It would be most undesirable to leave the Club in a position where the removal of the existing directors is effective and the appointment of the new directors is not. It is better, in my opinion, to make orders having the effect that the entire proceedings are invalidated than to produce that complicated halfway house. Improper Purpose 37 I propose to deal with questions of impropriety of purpose of the requisitionists and inappropriate time and place very briefly. Section 249Q of the Corporations Law, which was introduced on 1 July 1998, states that a meeting of a company's members must be held for a proper purpose. The Explanatory Memorandum for the Bill is unhelpful in indicating the Legislature's intention in enacting this provision. However, in my view, the provision does not introduce any new substantive law, though it may have an effect as far as standing and procedure are concerned. In Australian Innovation Ltd v Petrovski (1996) 14 ACLC 1257, Whitlam J was able to extract a similar principle from the general law with respect to discretions and powers, without needing to rely on any particular statutory text. I respectfully agree with his reasoning. 38 In the present case it is true that the meeting of 30 December 1998 followed shortly after a meeting on substantially the same subject matter. In some circumstances this sequence could itself be sufficient to establish an intention to harass and consequently impropriety of purpose. In the present case, however, the evidence indicates a real and growing concern on the part of the defendants about transactions which were in the course of negotiation with the St George Soccer Association Inc, and about the negotiations which were proceeding for the sale of the Mortdale premises, and also a concern that if the present Board were not removed before the beginning of 1999, they would be able to engage in a form of membership stacking through the appointment of new members after the beginning of the year. In view of that evidence, I am not persuaded that the requisitionists were motivated by an improper purpose in convening the meeting. Time and place of the meeting 39 Section 249R, which was also introduced on 1 July 1998, says that a meeting of a company's members must be held at a reasonable time and place. Again, the Explanatory Memorandum for the Bill, which introduces that provision, is unhelpful. However, once again my opinion is that the section does not create any new substantive law. In Smith v Sadler (1997) 25 ACSR 672, Young J was able to find a similar constraint in the general law, particularly the law with respect to fraud on the power to convene a meeting. He held that a meeting convened at premises to which the plaintiff would be denied access was not convened at an appropriate place. 40 In the present case there is evidence that the time and place of the meeting were inconvenient, at least to some of the plaintiffs who were unable to attend. However, there is also evidence which implies that the plaintiffs as a group had decided to boycott the 30 December meeting. Therefore I am not persuaded that they would have been there even if it had been held at a time when they were free to attend. Moreover, the time limits established by Article 26 require that the requisitionists must act swiftly after the failure of the secretary to convene the meeting within fourteen days of the requisition. Effectively it would have been necessary to hold the requisitioned meeting in early January, if not late December, at a time which presumably would have been equally inconvenient, in order to fit within the forty-day period permitted by Article 26. 41 Finally, I am not persuaded that the time and the place of 6pm on 30 December 1998 was inherently an unreasonable time. It may be that some people would be on vacation at that time, but as far as I am aware many people continue to work between Christmas and New Year's Day, other than upon public holidays or during the vacations which they choose to take. Therefore I am not persuaded by the submission that s 249R be invoked to strike down the meeting. Election of directors by single resolution 42 This leaves me finally with s 225 of the Corporations Law. Section 225(1) has the effect that a motion for the appointment of two or more persons as directors of a public company by a single resolution is not to be moved unless a resolution that it be moved has first been agreed to by the meeting without any vote being cast against it. It is common ground that no such resolution was passed in the present case. It is also common ground that the resolution for the appointment of the new directors was put as a single motion naming all seven candidates. Prima facie such a resolution conflicts with s 225(1). 43 That provision exists for an important policy purpose. According to Ford's Principles of Corporations Law (Looseleaf) at para 7.170, the provision has: 'the purpose of saving members the embarrassment of having to elect X whom they may not want when they elect Y whom they do want.' 44 Therefore disregard of that provision is likely to produce substantial injustice. Reflecting the importance of the requirement in s 225(1), s 225(2) provides that a resolution passed pursuant to a motion moved in contravention of the section is void. These considerations suggest that failure to comply with s 225 leads to an ineffective resolution, and that the Court would be unlikely to overcome that consequence under s 1322, assuming it has the power to do so. 45 Nevertheless, the defendants assert that the consequences of the application of s 225 can be avoided in either of two ways. First, the defendants draw attention to s 225(6), according to which nothing in the section prevents the election of two or more directors by ballot or poll. In the present case the motion to elect the seven new directors proceeded by 'ballot'. The ballot paper is in evidence. It shows that the motion was that the listed persons be appointed to act as directors in place of those removed. Adjacent to that motion there were two boxes, one labelled 'for it' and the other labelled 'against it'. Instructions on the ballot paper said: 'The voter shall mark his/her voting paper by ticking for it or against it.' 46 In my opinion, though for some purposes this voting paper may be described as a 'ballot' or 'poll', it does not qualify as a ballot or poll for the purpose of s 225(6). That subsection envisages a voting procedure in which members are given the opportunity by completing the voting paper to select some candidates but not others. A voting paper which presents candidates as a block and requires the voter to choose for or against the block without the opportunity to make any further selection is contrary to the fundamental policy of s 225 and therefore, in my opinion, does not qualify for exemption under s 225(6). 47 Secondly, the defendants urge that the Court should apply s 1322(4) to overcome failure to comply with s 225. They refer to a number of cases disclosing the general approach to s 1322(4) which (consistently with what I have said earlier) show that the Court should give a beneficial construction to s 1322 in view of its evident curative purpose. A good indication of the approach of the Court to the section and its predecessors can be seen in Abalcheck Pty Limited v Pullen (1990) ACLC 1078 and Sydney Aussie Rules Social Club Ltd v Superintendent of Licences (1989) 7 ACLC 991. 48 Those cases confirm that s 1322(4) may be used to cure irregularities which would otherwise have the consequence that a proceeding such as a meeting would be completely and utterly void. Even so, one must bear in mind that s 225 contains an express indication of legislative intention that the resolution is to be void if the section is not complied with. That was enough to persuade Brinsden J in Harman v Energy Research Group Australia Ltd (1985) 9 ACLR 897 to decline to cure a breach of the predecessor of s 225 by invoking the predecessor of s 1322. 49 While there may be occasions when a breach of s 225 can be overcome by orders under s 1322, I fail to see any good reason for exercising such a discretion in the present case. I particularly take into account that failure to comply with s 225 is combined in this case with short notice of the meeting; that there has been a sequence of events in which the meeting of 30 December followed an unsuccessful meeting on 12 November in which the same vice appeared in the motion to appoint directors; and that although the meeting has not been invalidated solely because of the inconvenience of the time and place, the fact that the meeting was held on 30 December does not inspire confidence that it was a truly representative meeting of members. Finally, I take into account the general sloppiness and amateurish approach to the requisitioning and conduct of the meeting of 30 December and the potentially misleading remarks made by the chairman at the meeting. Conclusions and orders 50 In all of these circumstances I believe that I should make orders having the effect that the notice of the meeting of 30 December 1998 was inadequate and consequently that under s 1322(2) the meeting is invalid. 51 The plaintiffs have sought other relief which I am less inclined to give. In particular, it seems to me unnecessary and possibly undesirable to make the order sought in para 2 of the summons, having regard to the fact that the first plaintiff would have been under a clear obligation to convene a meeting at the time of receiving the requisition had the proposed motions been in proper form. For the reasons indicated I do not propose to make the orders sought in paras 3 and 4 of the summons. 52 It therefore seems to me that the appropriate orders are in terms of paras 1, 5, 6 and 7 of the summons and that the defendants' cross-claim be dismissed in whole. 53 My orders therefore are: 1. A declaration that the Notice of Meeting given by the defendants to the members of St George Budapest Soccer Club Limited ('the Company') and dated 9 December 1998 purporting to convene an Extraordinary General Meeting of the Company on 30 December 1998 was ineffective for that purpose and is void and of no effect. 2. A declaration that the resolutions purportedly passed at the purported Extraordinary General Meeting of the members of the Company on 30 December 1998 are void and of no effect. 3. A declaration that the first to seventh named defendants were not and are not validly elected directors officers of the company. 4. An order that the first to seventh named defendants and each of them be restrained from representing themselves as being or entitled to act as directors or officers of the company.