Link Agricultural Pty Ltd v Shanahan & Ors [1998] VSCA 3

Link Agricultural Pty Ltd v Shanahan & Ors [1998] VSCA 3 - VSCA 1998 case summary — Zoe

[23]

The minutes of the Annual General Meeting held on 15 December 1997 record the presence of 161 shareholders, the directors (Messrs Cox, McDougall, Beggs, Langdon and Shanahan), 29 proxyholders, 3 investor shareholders and a substantial number of other individuals. On arriving at the meeting, Shanahan was informed by officers of Corporate Registry Services Pty Ltd, which was to conduct the elections to be held at the meeting, that he had been appointed proxy for 6,537 members and that this represented 12,411 votes. This much had been ascertained before the meeting, after the information in the forms of proxy (received by Pivot two days earlier) had been collated. Shanahan was given a summary about his proxy appointments, setting out the total number of votes specified for and against each of the relevant resolutions. In relation to Resolution 6, he was informed that he had been given authority to record 11,728 votes in favour and 125 against the election of Watson, and 11,817 votes in favour and 136 against the election of Beggs. The fact that the total number of votes which he was authorised to cast exceeded the number of members who had given him their proxies resulted from the fact that some members were entitled to cast more than one vote, depending on their shareholdings. On his arrival at the meeting, Shanahan was also given a number of proxyholder cards, including cards for Resolutions 6, 7 and 8, together with the voting papers relating to his personal shareholding. In relation to Resolution 6, Shanahan had only to fill in his name, sign the proxyholder card and place it in the ballot box because the results of the voting by Shanahan's appointors were already known (by virtue of the earlier collation and analysis of the information in the forms of proxy previously lodged with Pivot). Shanahan completed all the proxyholder cards (for all relevant resolutions) as required of him and placed them in his brief case for safe-keeping. When each resolution came to be discussed by the meeting, the chairman told the meeting of the outcome of the collation and analysis of relevant proxy votes. In relation to Resolution 6, he said:

[75]

In support of the submission that the Chairman had done all that the law required of him by giving eligible voters a reasonable opportunity to vote, counsel for the appellant relied upon a number of authorities, the chief amongst them being R. v. Rector, Churchwardens & Parishioners of St. Mary, Lambeth [1838] EngR 664; (1838) 8 Ad & E. 356; Baker & Downing v. Wood (1837) 1 Curt. 507; R. v. The Overseers of Sutton, in Lancashire (1864) 11 L.T. (N.S.) 487 and 13 W.R. 187; and Gribbin & Ors. v. Kirker (1873) 7 I.R. 30. Although these authorities relate to election to public office, I accept that they are not, for that reason alone, unhelpful. As they show, it is ordinarily incumbent on a person charged with responsibility for the conduct of an election, whether to public or private office, to ensure that there is a reasonable opportunity for eligible voters to vote, to fix a reasonable time for voting and to make reasonable provision for voting. The question is whether the law may require more of a person charged with responsibility for an election, depending on the circumstances. The authorities to which the appellant has referred do not, I think, settle the question. Plainly enough, voters cannot complain when their votes are not included in the count solely because they failed to avail themselves of the opportunity to vote. The authorities relied on by the appellant show that, depending upon the circumstances of the case, a person charged with responsibility for an election may not be bound to extend the opportunity to vote to permit a late voter to overcome his tardiness. For example, it may not be a proper exercise of discretion to extend the time for voting in an election to public office where the period for voting has been specified, publicly, in advance: R. v. Overseers of Sutton, in Lancashire, supra. The authorities relied on by the appellant concern elections to bodies of a very different kind, however, governed by a very different legal framework to the case in hand; and I do not think they stand for the proposition that a person charged with responsibility for the conduct of an election to office in a private corporation need never do more than provide a reasonable opportunity to eligible voters to vote. It seems to me that what the law requires of that person will depend upon the nature of the election, the circumstances of the case, and the legal framework in which the election is to be held.

[94]

The circumstances attending the poll showed that Shanahan's error was of a very low order indeed. As already noted, Pivot's articles (1) required an appointment of a proxy for the election of directors to nominate the candidates to be favoured by the voter with his vote; (2) required an appointment to be lodged with the company two days prior to the meeting; and (3) prohibited the proxy from voting except as authorised in the appointment: see Articles 71-72. Hence, prior to the meeting, the company knew that a large number of members had appointed Shanahan as their proxy and the result of the votes which those members wished to cast by their proxy. Presumably, it was on account of this latter fact that, in introducing Resolution 6, the chairman referred to the proxy votes as having been "cast" and announced the result of the count of those votes before the meeting began its discussion of the resolution. Further, before the polls were taken, the company and the chairman had notice that Shanahan was in attendance in his own interest and as proxy, intending to discharge his responsibility to his appointors. In relation to Resolution 6, he was obliged to do no more than fill in his name, sign the Resolution 6 proxyholder card and place it in a ballot box. Shanahan did everything except physically put that card in the box. He placed all the other papers touching the other resolutions, whether relating to proxy or personal votes, in the ballot box but not those touching the proxy votes for Resolution 6. In the circumstances of the case, Shanahan's inadvertent failure to place the card for Resolution 6 in the ballot box was no more than a slip of minor dimension. It was not the kind of slip which could have led to any doubt about the voters' true intentions: cf. Oliver v. John Dalgleish & Ors. [1963] 1 W.L.R. 1274, at 1278-9. If unremedied, however, it was a slip which prevented effect being given to the will of a large number of shareholders, who being eligible to vote, had sought to do so. In these circumstances, I do not think that it can be said that the chairman's ruling not to accept Shanahan's proxyholder card and the very large number of votes it represented was designed to facilitate the purpose of the power, to facilitate the voting and counting on Resolution 6 so as reliably to ascertain the will of the majority of the members.

[119]

The purpose of the notice sent to shareholders was to give sufficient information so as to enable the members to determine whether or not to attend the Annual General Meeting and to provide such information within the time fixed in order that they might arrange their affairs so as to attend the meeting if they so wished: cf. Ryan v. Edna May Junction Gold Mining Co. (No Liability) [1916] HCA 37; (1916) 21 C.L.R. 487, at 496 per Barton, J. and 500 per Isaacs, J. and Vawdon v. South Sydney Junior RL Club [1975-1976] C.L.C. 40-248 at 28,500. Save for the reference to the resolution as a special, not an ordinary, resolution, the notice informed members in terms of the content of the resolution: contrast Australian Hydrocarbons NL v. Green & Ors. (1985) 3 A.C.L.C. 779 at 788 and Baillie v. Oriental Telephone and Electrics Co. Ltd. [1915] 1 Ch. 503, at 515. The terms of the resolution specified in the notice were the same as the terms of the resolution put to the meeting: contrast Re Moorgate Mercantile Holdings Ltd. [1980] 1 W.L.R. 227. I do not think that it has been shown that the result might have been different if proper notice had been given: cf. Mamouney v. Soliman & Ors (1992) 10 A.C.L.C. 1674, at 1681. Resolutions 7 and 8 which respectively concerned the removal of McDougall and the appointment of McCallum in his place were advanced by the requisitioning shareholders as part and parcel of achieving the one objective. There was no defect in relation to Resolution 7 which was specified in the notice as an ordinary resolution and put to the meeting as such. Resolution 7 was passed by a majority of 72% of the members eligible and voting. Resolution 8 was supported by 73.2% of the members eligible and voting and the chairman would have declared it passed had he not been proceeding on the erroneous basis that Resolution 8 required a special majority. I am unable to infer from this that the defect or irregularity in the notice for Resolution 8 (or the fact that the Resolution was put to the meeting as a special resolution) may have so affected the vote that proper notice (and moving for an ordinary resolution) may have led to a different result. In the circumstances of the case, I am not persuaded that there has been or may be any substantial injustice caused by the defect or irregularity in the notice. Accordingly, Resolution 8 is to be treated as a valid resolution and, by virtue of it, McCallum took the place of McDougall on the board of directors of Pivot.

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Judgment (121 paragraphs)

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