Career Employment Australia Ltd v Shepley & Ors [2021] QSC 235 [2021] 38 QLR

SUPREME COURT OF QUEENSLAND CITATION: Career Employment Australia Ltd v Shepley & Ors [2021] QSC 235 PARTIES: CAREER EMPLOYMENT AUSTRALIA LTD ACN 613 305 098 (applicant/cross-respondent) v JOHN STEPHEN SHEPLEY (first respondent/cross-applicant) and PATRICK DOUGLAS PURCELL (second respondent/cross-applicant) and BRIAN JAMES DALEY (third respondent/cross-applicant) and JODIE-LEE LUCKUS (fourth respondent/cross-applicant) FILE NO/S: BS 3531 of 2021 DIVISION: Trial PROCEEDING: Originating Application ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 17 September 2021 DELIVERED AT: Brisbane HEARING DATE: 10-11 May 2021, 14 June 2021 Supplementary written submissions: 17, 21 June 2021 JUDGE: Flanagan J ORDER: 1. Pursuant to s 10 of the Civil Proceedings Act 2011 (Qld), the Court declares that the following persons were elected as a director of Career Employment Australia Ltd at the annual general meeting of Career Employment Australia Ltd on 10 February 2021: (a) Francis Thomas Wilson; (b) Ian Douglas Hall; (c) Vicki Bailey; (d) Shane Gilmore Cowan; (e) Sharon Leigh Frances Cowan; (f) Jason Michael Gardiner; (g) Alice Mary Langford; and (h) David Anthony Hatton OAM. -- 1 of 40 -- 2 2. Pursuant to s 10 of the Civil Proceedings Act 2011 (Qld), the Court declares that each of the respondents and Paul Casey ceased to be a director of Career Employment Australia Ltd upon the election of the directors in paragraph 1 of this order. 3. Pursuant to s 1322(2) of the Corporations Act 2001 (Cth), the Court declares that the resolutions carried by the board of directors of Career Employment Australia Ltd on 4 February 2021 are invalid. 4. The respondents’ amended cross-application is dismissed. 5. I will hear the parties as to costs. CATCHWORDS: CORPORATIONS – MANAGEMENT AND ADMINISTRATION – MEETINGS – MEETINGS OF DIRECTORS – NOTICE – where approximately 25 hours’ notice of a directors’ meeting was given to certain directors – where other directors were given more notice – where three directors did not attend the meeting purportedly because of the short notice – where the business transacted at the meeting went to the heart of the management and control of the company – where draft motions were circulated approximately five hours prior to the meeting – where directors’ meetings had previously been held by telephone at short notice – where the absent directors wished to seek further advice, including legal advice, on the draft motions – where there was insufficient time to obtain that advice – where the company’s constitution required the giving of reasonable notice of a directors’ meeting – whether there was reasonable notice of the directors’ meeting CORPORATIONS – SUPERVISION – COURTS – POWERS – AS TO IRREGULARITIES – SUBSTANTIAL INJUSTICE – where there was a failure to give reasonable notice of a directors’ meeting contrary to the company’s constitution – where that is a procedural irregularity under s 1322(2) of the Corporations Act 2001 (Cth) – where the lack of notice prevented the absent directors from obtaining advice and attending the meeting in a position to make fully informed decisions – where the business transacted at the meeting went to the heart of the management and control of the company – whether the irregularity caused a substantial injustice CORPORATIONS – MANAGEMENT AND ADMINISTRATION – MEETINGS – MEETINGS OF DIRECTORS – OTHER MATTERS – where there was a failure to give reasonable notice of a directors’ meeting contrary to the company’s constitution – where 15 resolutions were carried at that meeting – where, prima facie, the resolutions are void – where the minutes of the meeting indicate that the resolutions were moved, seconded and carried -- 2 of 40 -- 3 as a composite whole – where the resolutions were discussed generally prior to a vote on all resolutions – where the respondents submit that the resolutions are severable because they can be carried into effect separately – where the resolutions were intended to operate collectively – whether the resolutions are severable and able to be saved from invalidity CORPORATIONS – MANAGEMENT AND ADMINISTRATION – OFFICERS OF A CORPORATION – DIRECTOR – APPOINTMENT – CONSENT – where a director nominated for re-election as a director – where the director subsequently attended a directors’ meeting and voted in favour of a resolution to postpone the election of directors – where the resolution was carried – where the election proceeded anyway, contrary to the resolution – where the director did not attend the election because he believed it to be a legal nullity – where the director was re-elected at the election – whether the appointment of the director is invalid for want of consent Corporations Act 2001 (Cth) s 201D, s 248C, s 1322 Amalgamated Pest Control Pty Ltd v McCarron [1995] 1 Qd R 583, applied Ashrafinia v Ashrafinia [2012] NSWSC 500, cited Bell v Burton (1993) 12 ACSR 325, cited Bentley Capital Ltd v Keybridge Capital Ltd (2019) 139 ACSR 289; [2019] FCA 1675, cited BI Constructions Pty Ltd v Shad [2010] NSWSC 484, cited Chalet Nominees (1999) Pty Ltd v Murray [2012] WASC 147, cited Dhami v Martin (2010) 241 FLR 165; [2010] NSWSC 770, distinguished Elderslie Finance Corp Ltd v Australian Securities Commission (1993) 11 ACSR 157, applied Hawcroft v Jamieson [2017] NSWSC 1478, applied Hedges v NSW Harness Racing Club Ltd (1991) 5 ACSR 291, cited Hickey v Aselford [2003] NSWSC 185, cited Markopolous v Wedlock (2008) 26 ACLC 129; [2008] WASC 3, distinguished McMaster v Eznut Pty Ltd (2006) 58 ACSR 199; [2006] WASC 109, distinguished Re Deposit Power Pty Ltd [2018] NSWSC 1484, distinguished Re Keneally (2015) 107 ACSR 172; [2015] NSWSC 937, considered Re Statewide Office Furniture Pty Ltd (2015) 293 FLR 275; [2015] NSWSC 142, considered Re Whitsunday Clean Sands Pty Ltd [2017] NSWSC 1199, cited Savoy v Insurance and Care NSW (2020) 142 ACSR 200; -- 3 of 40 -- 4 [2020] NSWSC 133, distinguished Simon v HPM Industries Pty Ltd (1989) 15 ACLR 427, applied Summerdowns Rail Ltd v Stevens [2015] NSWSC 321, cited Toole v Flexihire Pty Ltd (1991) 6 ACSR 455, cited Wilson v Manna Hill Mining Co Pty Ltd [2004] FCA 912, cited COUNSEL: G R Coveney, with S T Lane, for the applicant/cross- respondent D de Jersey QC for the respondents/cross-applicants SOLICITORS: HWL Ebsworth for the applicant/cross-respondent Holding Redlich for the respondents/cross-applicants [1] The Court is required in this proceeding to determine who constitutes the duly elected board of directors of the applicant, Career Employment Australia Ltd (CEA). To do so, the Court must resolve several issues arising from a chronology of events culminating in two meetings: (a) a purported meeting of CEA’s board of directors (CEA Board or Board) held on 4 February 2021; and (b) a purported annual general meeting (AGM) of CEA’s members held on 10 February 2021. [2] CEA’s position is that the duly elected Board is that which was elected at the AGM on 10 February 2021. The respondents’ position is that the election held at the AGM on 10 February 2021 is of no effect because the AGM was adjourned by resolution passed at the board meeting on 4 February 2021. Background [3] CEA is a company limited by guarantee and a not-for-profit registered training organisation (RTO). It provides training and support services to government programs, funds charitable services, and operates several social enterprises. It is effectively the parent organisation of a network of entities that I will refer to as the “CEA Group”.1 Whilst each entity has its own board of directors or management committee, in practice the CEA Board controls the entire CEA Group. For at least the last 20 years, elections for positions on the CEA Board have been uncontested; that is, there were never more nominees than vacant positions. [4] The CEA Group includes three companies limited by guarantee, seven incorporated associations and one cooperative company. All except one of these entities are not-for-profit charities registered with the Australian Charities and Not-for-profits Commission. The CEA Group also includes two for-profit entities: the Lufra Investment Trust (Lufra) and Business Success Group Pty Ltd (BSG). [5] The individuals who are central to the issues in this proceeding can be understood to have evolved into two ‘factions’ within CEA.2 For simplicity, I will refer to them as 1 A reference to the CEA Group includes a reference to CEA itself. 2 See, eg, T 2-64 to T 2-65. -- 4 of 40 -- 5 the “Applicant Faction” and the “Respondent Faction”. As the labels suggest, members of the Applicant Faction are behind the application brought in CEA’s name in this proceeding; each member of the Respondent Faction (except Paul Casey) is a respondent to this proceeding. Applicant Faction [6] Shane Cowan has been involved with CEA since around 1982 and has been employed as its General Manager since about 1995. In that role, he has been responsible for managing the day-to-day operations of the CEA Group, other than Lufra and BSG. He has not been a director on the CEA Board, although he has frequently attended board meetings in his capacity as the General Manager. Mr Cowan has extensive family connections within CEA. His wife, Leanne Cowan, and his children, Keohnie Cowan and Sharnay Cowan, all work for entities in the CEA Group. Mr Cowan’s sister is Sharon Cowan. [7] Sharon Cowan has been a CEA employee since 2000 and its Deputy General Manager since 2003. In that capacity, Ms Cowan’s main responsibility has been to assist her brother, Shane, as the General Manager. Ms Cowan has been a director on the CEA Board since 2012. Ms Cowan, like Mr Cowan, has extensive family connections in the CEA Group. Her children, Shilo Cowan and Nat Luckus, work in CEA Group organisations, as does her son-in-law, Jason Gardiner. [8] Jason Gardiner has been involved with the CEA Group since about 2002 and is the manager of its Indigenous Youth Mobility Program. He has also been a director of CEA since 2018. He is Shilo Cowan’s husband and Colleen Beard’s son, both of whom work in the CEA Group. [9] Frank Wilson has been a member and director of CEA since 2014. Since 2018, he has also been employed by CEA as its Financial Manager. Mr Wilson previously had a lengthy career with the Australian Taxation Office and he is close friends with Shane Cowan. [10] Shane Cowan, Sharon Cowan, Jason Gardiner and Frank Wilson were all purportedly elected or re-elected to the CEA Board at the AGM held on 10 February 2021. Further, at a purported meeting of the “new” Board on 11 February 2021, Shane Cowan was appointed as CEA’s executive chairman and Jason Gardiner was appointed as CEA’s deputy chairman. Additionally, four other individuals associated with the Applicant Faction were purportedly elected to the Board at the AGM held on 10 February 2021: (a) David Hatton, who became a member of CEA on 2 December 2020; (b) Ian Hall, who has attended CEA’s AGMs for around 20 years and has been the general manager of the BTC Cooperative, one of the charities in the CEA Group; (c) Alice Langford, who has been the Manager, Small Business Programs at CEA since 2009; and (d) Vicki Bailey. -- 5 of 40 -- 6 [11] Lastly, Beverley Austin started working for CEA in 2001. At least in recent years, Ms Austin has been employed as the personal assistant to the general manager, Shane Cowan. In that role, Ms Austin has acted as the returning officer in elections to the Board and has been intimately involved in the administrative processes surrounding the Board. Ms Austin gave evidence for the applicant in the proceeding and, for this reason, I have included her under the banner of the Applicant Faction. Respondent Faction [12] The Respondent Faction consists of individuals who were directors on the Board as at the commencement of the AGM held on 10 February 2021 but who were not, except Paul Casey, re-elected at that AGM. [13] John Shepley has been the chairman of CEA since around 1990. Unlike any of the Applicant Faction, Mr Shepley is also a director of BSG. In that capacity, he earns a salary of approximately $116,000 per year. His partner, Jenny Soon, is a manager at BSG and his son, Robert, is a trainer at BSG. [14] Along with Mr Shepley, both Brian Daley and Jodie-Lee Luckus have been directors of CEA and BSG.3 Mr Daley has been involved with CEA since 1994 and a long-standing director on the Board. Since 2018, he has been its treasurer, prior to which he was the vice-president. Ms Luckus has been involved with CEA for around 20 years and was elected to the Board in 2018. [15] Patrick Purcell has also been a long-standing Board member and has been its deputy chairman. Lastly, Paul Casey has been involved with CEA for around 25 years and a director since 2016. Since September 2017, he has been the company secretary. Unlike Mr Daley, Ms Luckus and Mr Purcell, Mr Casey is not “singularly aligned” with Mr Shepley and the evidence is that he has voted at board meetings on an issue-by-issue basis.4 Chronology of events [16] The following chronology is largely undisputed, save where differences in the evidence have been outlined. Pre-July 2020: BSG’s financial difficulties [17] In 2011 or 2012, CEA purchased 100% of the shares in BSG; the rationale for the purchase being that profits made by BSG could be used to cross-subsidise the not-for-profit activities of other CEA Group entities. BSG provided opportunities for students with disabilities in schools to obtain traineeships which enabled those students to complete school with a better exit score and greater opportunities to obtain full-time employment. In 2018, BSG became a labour hire company and commenced a new venture involving the hosting of trainees with disabilities with employers. The employer provided workplace experience and skills, but the trainee’s wage was paid by BSG. The venture was to be funded through incentives to employers, training fees paid to BSG as the supervising RTO and funding incentives paid to Disability Employment Services providers. 3 Ms Luckus commenced as a director of BSG on 24 April 2019. 4 T 2-97, ln 39. -- 6 of 40 -- 7 [18] Until around 2015, BSG was profitable and provided CEA with some funds. However, it then began to struggle financially. Since 2015, it has depended on “loans” from CEA for cash-flow purposes and, from around mid-2018, that dependence became almost entire. BSG has made substantial losses in recent years, including over $1 million in each of the 2018/19 and 2019/20 financial years. Mr Wilson, as CEA’s Financial Manager, opines that the ongoing contracts and constraints on BSG mean that it will continue to be a strain on CEA’s funds.5 On the other hand, Mr Shepley believes that BSG will return, at least, to “break even”.6 It is common ground that, as things stand, BSG would become insolvent without funding from CEA. Mr Shepley accepts that he would lose his salary if BSG was wound up. [19] Mr Wilson, Mr Gardiner, Mr Shane Cowan and Ms Sharon Cowan each gave evidence that they attempted to raise concerns regarding BSG’s financial position with Mr Shepley and others at CEA Board meetings from around 2018 or 2019 to early 2020. However, they said that Mr Shepley was unwilling to engage with those concerns. Ms Luckus’ view was that it was inappropriate to single-out BSG for criticism in circumstances where other entities in the CEA Group were also losing money. Mr Shepley’s evidence was that, when concerns were raised, Board members who were also BSG directors (i.e. himself, Mr Daley and Ms Luckus) thought it unnecessary to discuss BSG’s financial matters at CEA Board meetings.7 [20] At a CEA Board meeting on 26 February 2020,8 Mr Wilson moved the following motion: “That BSG provide some sort of financial information, providing a forecast as to where they propose that their future funding will come from so that we can determine whether or not BSG is viable into the future, that it will be able to cover the costs that are currently funded by loans from CEA.”9 [21] The motion was defeated by a split 4-4 vote, with Mr Shepley, Mr Daley, Mr Purcell and Ms Luckus voting against. Mr Casey, who voted in favour of the motion, regarded it as a reasonable request to enable the Board to make informed decisions.10 As evidence that other entities in the CEA Group were struggling financially and that BSG was implementing strategies for improvement, the respondents identify that, during the same meeting, Mr Shane Cowan provided a “Monthly Program Report” which states: “As mentioned again at the last Board meeting, cash reserves have been depleting over the past 20 months. Just looking forward from the Audits last year, we have been in discussions with all the Entities that recorded a loss wanting to implement strategies, to change, reduce and return each one to a surplus, only BSG continues to operate with any evidence of change reported to the Board.”11 5 Affidavit of F T Wilson sworn 5 March 2021 (CD-20), paragraph 16. 6 Affidavit of J S Shepley sworn 19 April 2021 (CD-25), paragraph 12(e). 7 T 3-34, ln 13-15. 8 The meeting was attended by Mr Shepley, Mr Daley, Mr Purcell, Mr Casey, Ms Luckus, Mr Wilson, Mr Gardiner, Mr Sharon Cowan and Mr Shane Cowan. 9 Affidavit of F T Wilson sworn 5 March 2021 (CD-20), paragraph 21 and exh FTW-5. 10 T 2-98, ln 44 to T 2-99, ln 2. 11 Affidavit of S G Cowan sworn 11 March 2021 (CD-14), paragraph 20 and exh SGC-6 (emphasis added). -- 7 of 40 -- 8 [22] In his affidavit, Mr Shane Cowan states: “Over a number of years, Mr Shepley has made boastful comments to me about the fact that he has the majority vote of the board. As a result, I have felt powerless in my position at [sic] General Manager to effect any meaningful change to the financial arrangement between CEA, BSG and Lufra.”12 [23] Similarly, Mr Gardiner states: “Mr Shepley also relies on support from a long-serving core group of board members. I have often felt disempowered because board members who were not a part of Mr Shepley’s central group were not given an opportunity to express their concerns.”13 1 July 2020 to 22 January 2021 [24] As at 1 July 2020, the CEA Board comprised of Mr Shepley (chairman), Mr Purcell (deputy chairman), Mr Casey (secretary), Mr Daley (treasurer), Ms Luckus, Ms Sharon Cowan, Mr Wilson and Mr Gardiner. [25] On 22 July, the CEA Board met and resolved that an AGM was to be held on 16 September and that nominations for CEA Board positions were to be returned by 1 September. Ms Austin notified the members on 27 July, the same day on which Ian Hall nominated for a position on the Board by submitting his nomination form to Ms Austin. His nomination was the first to be submitted.14 Mr Wilson then nominated on 20 August. [26] On 26 August, the CEA Board met and resolved to postpone the AGM from 16 September to 28 October, and to extend the return date for nominations to 13 October. The apparent reason for the postponement was the inability of CEA’s auditors, Nexia, to complete their audit of the financial documentation by 16 September. Ms Austin notified the members on 27 August. [27] On 30 August, Mr Shepley, Mr Purcell, Mr Daley, Mr Casey and Ms Luckus all nominated for the Board, bringing the number of nominations to seven for a total of nine available positions. On 1 September, Ms Langford, Ms Sharon Cowan and Ms Bailey each submitted their nominations to Ms Austin. The consequence of the nominations submitted on 1 September is that there were 10 nominees for nine positions, requiring the election to be contested. On 3 September, Mr Shane Cowan also submitted a nomination. [28] In late September or early October 2020, the Board met by telephone and resolved to indefinitely postpone the AGM scheduled for 28 October due to the COVID-19 pandemic. The Board did not discuss nor pass any resolutions regarding the return date for nominations. Mr Shepley’s evidence was that no such discussion occurred at the meeting because they “didn’t put [their] minds to it because … the board considered that the nominations had closed. There was no need to further extend.”15 12 Affidavit of S G Cowan sworn 11 March 2021 (CD-14), paragraph 22. 13 Affidavit of J M Gardiner sworn 11 March 2021 (CD-2), paragraph 12. 14 Affidavit of J S Shepley sworn 19 April 2021 (CD-25), exh JSS-14. 15 T 3-50, ln 9-11. -- 8 of 40 -- 9 However, that evidence is inconsistent with the fact that nominations were due by 13 October pursuant to the resolution made on 26 August. The board meeting at which the AGM was indefinitely postponed must have been held on or before 6 October 2020, the date on which Ms Austin emailed CEA’s members to advise them of the indefinite postponement.16 Ms Austin sent similar emails updating the members in the days immediately following the previous CEA Board meetings on 22 July and 26 August.17 Given that the meeting must have occurred before 13 October, nominations were still open at the time the meeting was held. [29] On or around 12 November, the CEA Board met to sign off on CEA’s financial documents. Mr Gardiner swears that Nigel Bamford of Nexia raised concerns at the meeting that CEA’s investments in BSG and Lufra posed a significant risk to CEA’s financial future and that Mr Bamford urged the Board to take action to make those entities profitable.18 There are apparently no minutes of that meeting. [30] At 12.47pm on 1 December, Ms Austin emailed Mr Daley, Mr Gardiner, Ms Luckus, Mr Shepley, Mr Casey and Ms Sharon Cowan advising that their nomination forms had been lost and that they needed to re-submit them. At 2.13pm, in a reply to all recipients of that email, Mr Shepley wrote: “please disregard the closing date on the forms, we will set election timetable tomorrow night can anyone not attending please print off and sign ‘accept nomination’ and send to shane or myself Ta”19 [31] Approximately 20 minutes later, Ms Sharon Cowan sent a further reply to all recipients of Mr Shepley’s email, writing: “Hi please do not do new nomination. WE HAVE John, Brian, Pat, Jodie and Pauls completed nomination forms.”20 [32] The following day, the Board met by telephone and resolved that the AGM that had previously been indefinitely postponed was to be held on 10 February 2021 (10 February AGM). Again, the Board did not discuss setting a new return date for board nominations. The same day, Mr Hatton became a member of CEA. [33] On 18 December, Mr Gardiner submitted his nomination for a board position. In cross-examination, Mr Gardiner stated that he had originally nominated in August but that he re-nominated because his original nomination had apparently been lost, as reported in Ms Austin’s email of 1 December.21 [34] On 21 January 2021, Mr Shepley asked Ms Austin to provide him with a range of documents for the forthcoming 10 February AGM, including a list of all nominations for board positions. The following day, before Ms Austin had provided those documents, Mr Hatton nominated for a board position. 16 Affidavit of B J Austin sworn 11 March 2021 (CD-19), paragraph 6 and exh BJA-4. 17 Affidavit of B J Austin sworn 11 March 2021 (CD-19), paragraphs 3 and 5, exhs BJA-1 and BJA-3. See [25] and [26]. 18 Affidavit of J M Gardiner sworn 11 March 2021 (CD-2), paragraph 22. 19 Affidavit of J S Shepley sworn 19 April 2021 (CD-25), paragraph 30 and exh JSS-9. 20 Affidavit of J S Shepley sworn 19 April 2021 (CD-25), exh JSS-9. 21 T 2-49, ln 9-24. -- 9 of 40 -- 10 25 January 2021 to 3 February 2021 [35] On 25 January, Ms Austin provided Mr Shepley with the list of nominees. By reading that list, Mr Shepley became aware for the first time that there were more nominees (13) than vacant positions (9). [36] On 27 January, there was a breakfast meeting between Ms Langford, Mr Shepley and a Mr Miszkowski. Mr Shepley showed Ms Langford the list of nominations (which included hers) and accused her of “going against” the Board.22 According to Ms Langford, Mr Shepley interrogated her about her knowledge of a “conspiracy” regarding board nominations and demanded to know why she was running against him and his “mates”.23 Her account of the meeting is that Mr Shepley was very angry, that he threatened “vicious litigation” and that she felt uncomfortable.24 Mr Shepley accepts that he was “a bit angry” that Ms Langford had not previously told him about her nomination.25 Five days later, Mr Shepley caused a document to be sent to Ms Langford which, had she signed it, would have effected the withdrawal of her nomination. However, she chose not to sign the document. [37] On 28 January, Mr Shepley emailed Ms Austin, requesting copies of all nomination forms that Ms Austin had received. Shortly later, Ms Austin provided those forms and Mr Shepley noticed that Mr Gardiner’s nomination, signed 18 December 2020, and Mr Hatton’s nomination, signed 22 January 2021, were both signed after 13 October 2020, the supposed closing date for nominations. Later the same day, according to Mr Shepley, he: “… made further enquiries in relation to the nomination forms and conduct of the AGMs, in particular: (a) a discussion with Mr Bamford of Nexia, to ensure that the CEA Group Association financial records and IT Systems were secured because I was concerned that there may be some interference with those records and systems by other board members or senior officers of the CEA Group associations; and (b) communications with the Australian Electoral Commission and Queensland Electoral Commission to obtain information as to whether those bodies may be able to assist by running the AGMs.”26 [38] In late January and early February, having realised on 25 January that the election for the Board would be contested, Mr Shepley had multiple discussions with certain other board members (but not Mr Wilson, Mr Gardiner or Ms Sharon Cowan) regarding the forthcoming 10 February AGM. According to Mr Daley, he and Mr Shepley discussed that, because the election would be contested and because Mr Gardiner’s and Mr Hatton’s nominations were out of time, the 10 February AGM would need to be adjourned so that an independent person could be appointed to run the election. 22 T 3-36, ln 41-45. 23 Affidavit of A M Langford sworn 11 March 2021 (CD-8), paragraphs 8-13. 24 Affidavit of A M Langford sworn 11 March 2021 (CD-8), paragraphs 8-13; T 2-5, ln 13-39. 25 T 3-37, ln 15-16. 26 Affidavit of J S Shepley sworn 19 April 2021 (CD-25), paragraph 41. -- 10 of 40 -- 11 They agreed that an urgent board meeting was needed. A similar discussion was had between Mr Casey and Mr Shepley. [39] On 1 February, Mr Shepley emailed Ms Austin, asking her to sign a statutory declaration regarding the nomination forms that she had received: “Dear Bev, I have attached emails that you have sent to the Board Members dated 27th August, 2020 and 1st December, 2020 regarding the nomination procedures, and also one from Sharon on 1st December. The nominations from 27th August, 2020 was extended until 13th October, 2020. The email on 1st December, 2020 advised that whilst moving you appeared to have lost nominations for some Board Members and that email asked people to provide new nominations. Neither your email or that of Sharon’s identifies any other nominations. Can you confirm by Statutory Declaration all the candidates nomination forms you had before 1 Dec, which ones were ‘lost’ and how within under 2 hrs they were found? Can I have this before COB tomorrow Tues2 Feb. Regards John”27 [40] During 1 and 2 February, Mr Shepley discussed his concerns regarding the forthcoming 10 February AGM with all other board members except Mr Gardiner, Mr Wilson and Ms Sharon Cowan. It was decided that he would draft some board motions that would then be taken for discussion to a meeting on 3 February between Mr Shepley, Mr Daley, Mr Shane Cowan and Ms Sharon Cowan. The draft board motions were discussed by Mr Shepley, Mr Purcell, Mr Daley, Mr Casey and Ms Luckus before the meeting with the Cowans, but were not provided to the other directors, Mr Wilson, Mr Gardiner and Ms Sharon Cowan. [41] On 3 February, the meeting with the Cowans did not proceed because Mr Shane Cowan was not in the office. At 1.10pm, Mr Shepley emailed the draft board motions to all board members except Mr Gardiner, Mr Wilson and Ms Sharon Cowan. The draft board motions (Draft Motions) read as follows: “MOTIONS FOR THE BOARD MEETING ON 4 FEBRUARY 2021 1. That the nominations of David Hatton and Jason Gardiner are not valid due to the fact that the dates as presented on their nominations are not within the valid nomination period. Mr Gardiner provided a dated nomination of 18 December 2020 (some two months later than what was required) and Mr Hatton was not a member at the time when nominations closed. 2. That the Annual General Meetings of 10 February 2021 be adjourned. 27 Affidavit of B J Austin sworn 11 March 2021 (CD-19), paragraph 9 and BJA-7. -- 11 of 40 -- 12 3. That the Board authorises the Chair to organize and finalize a Returning Officer and a body to perform the process, and inform the Board to ensure they have no conflicts. 4. That the documentation from the Chair to Ms Bev Austin be followed through and require her to answer that before close of business, Friday, 5 February 2021. That she be suspended until such time as she has provided the information to the Board, if not received by then. 5. That both Sharon Cowan, Bev Austin and Shane Cowan be required to provide information to the Board as to why they had not disclosed at any prior time to a request from the Chair of any other nominations in respect to the Board, especially the first nomination of 27 July 2020 being prior to the call of nominations for the Board Members. 6. That the Board has a view that the deliberate nature of Shane Cowan, Sharon Cowan and Bev Austin is a deceit exercised upon the Board in respect to not providing in a timely and efficient way appropriate information to the Board in respect to what is required by the Board and the operations of the Associations Incorporations Act and the Corporations Act. 7. That Shane Cowan, Sharon Cowan and Bev Austin, provide in full detail to the Auditor for safekeeping all details regarding access, passwords and so forth to the I.T. systems of the organizations including their own personal and professional details that are on the I.T. systems of the organizations, and agree not to change them until authorised by the Board. 8. That it is not to be presumed that the requirement to provide that is any presumption that they have committed any offences or details or any prevention of any offences against the Constitution or Rules but to ensure that should something happen would be transferred through to that. 9. That Shane Cowan advises Brad and other I.T. people of CEA and associated organisations that forthwith until such time as otherwise advised by the Board that the I.T. control system is to be transferred to the Auditor for safekeeping and they should provide all I.T. issues and confirmation of changes to him until otherwise directed by the Board. 10. That Frank Wilson shall provide prior to the finalization of business on Friday, 5 February 2021 to Brad, the I.T. Provider all the codes in connection for the finance system to be held by the Auditor until otherwise directed by the Board.”28 [42] At 3.39pm, Mr Shepley emailed the entire CEA Board, giving notice of a board meeting to occur by telephone the following day at 5.00pm (4 February Board 28 Affidavit of J S Shepley sworn 19 April 2021 (CD-25), paragraph 45 and JSS-16. -- 12 of 40 -- 13 Meeting). There was no content in the body of the email and the Draft Motions were not attached. The only content was the subject line, which read: “Tomorrow thurs there will be an urgent Board meeting 5pm by telephone call 1800[******] pw 9179147”29 [43] At 5.34pm, Mr Shepley emailed a copy of the Draft Motions to Mr Bamford of Nexia. Events on 4 February 2021 prior to the board meeting [44] At 10.00am on 4 February, Mr Shepley attended at the CEA office in Coorparoo to meet with Mr Shane Cowan and Ms Sharon Cowan. Mr Shepley told them that he was calling an emergency board meeting that night, and he provided them with a copy of the Draft Motions which he said the Board would be voting on. [45] In his affidavit, Mr Cowan recalls this meeting as follows: “I recall that there were approximately 10 motions listed and that, upon reading them, they caused me great distress. I recall Mr Shepley saying that there were ‘too many Cowans’ and that he intended to postpone all AGMs because the Cowans would ‘cause the entire group to fall apart’ or words to that effect. … I became so overwhelmed with emotion and anger that I ripped up the list of motions and threw them at Mr Shepley. I felt extremely powerless against Mr Shepley and his supporters on the board, and felt that Mr Shepley planned to undo the work I had devoted myself to for forty years. As a result, I said to him words to the effect ‘I will resign at the end of the day’, and left the head office to attend a student graduation.”30 [46] In cross-examination, Mr Cowan stated that he did not read all the motions and that he only got to about halfway down the page.31 [47] Mr Shepley recalled that Mr Shane Cowan said words to the effect of, “I am resigning and my last official function will be to attend a graduation at Ipswich at 11am”. He also recalled that Ms Sharon Cowan, after Mr Cowan left the meeting, said words to the effect of, “you can expect my resignation by the end of the week too”.32 [48] Ms Sharon Cowan’s evidence of this meeting was as follows. She recalled that she and Mr Cowan “were accused of many things” which were “so hurtful”. She recalled a tirade from Mr Shepley which included accusing the Cowans of disloyalty. As to what Mr Shepley was accusing them of being disloyal about, Ms Cowan stated that “it was our involvement in… there being a contested election”.33 [49] In cross-examination, Mr Shepley was asked whether he accused the Cowans of disloyalty at this meeting: 29 Affidavit of F T Wilson sworn 5 March 2021 (CD-20), paragraph 32 and FTW-11. 30 Affidavit of S G Cowan sworn 11 March 2021 (CD-14), paragraphs 31-33. 31 T 1-85, ln 39. 32 Affidavit of J S Shepley sworn 19 April 2021 (CD-25), paragraph 51. 33 T 1-113, ln 33-45. -- 13 of 40 -- 14 “I don’t remember if I used the word disloyal. I certainly think they had no doubt that I thought that they had been deceptive [and] the fact is, as I indicated to you earlier, that there had been this whole period of time where they knew there was nominations and they hadn’t disclosed it.”34 [50] At 11.16am, following the meeting with the Cowans, Mr Shepley forwarded to the Board (except Mr Gardiner, Mr Wilson and Ms Sharon Cowan) a chain of emails between himself and Mr Bamford of Nexia that commenced with Mr Shepley’s email to Mr Bamford at 5.34pm the previous evening. The chain contained advice from Mr Bamford on the Draft Motions. [51] Shortly thereafter, Mr Shepley amended the Draft Motions to include one further motion in the following terms (Amended Draft Motions): “11. Acknowledge the resignation of Shane Cowan as General Manager and request Sharon to fill the position until the Board decides on a course of action.”35 [52] At 11.27am, Mr Shepley emailed the Amended Draft Motions to the entire CEA Board plus Mr Shane Cowan. This was the first time that Mr Wilson and Mr Gardiner had been made aware of any draft motions. [53] The evidence before the Court is that, having received the Amended Draft Motions from Mr Shepley at 11.27am, Mr Wilson, Mr Gardiner, Ms Sharon Cowan and Mr Shane Cowan engaged in several conversations throughout the afternoon of 4 February regarding the board meeting scheduled for that evening. The evidence of those conversations, which took place in the CEA office before the meeting, is as follows: (a) Mr Wilson told Mr Gardiner and Ms Sharon Cowan that he did not intend to attend the board meeting;36 (b) Ms Sharon Cowan told Mr Gardiner and Mr Wilson that she would not be attending the meeting;37 (c) Mr Gardiner told Mr Wilson, Ms Sharon Cowan and Mr Shane Cowan that he had a prior engagement and that he would not be attending the meeting;38 (d) Mr Wilson, Mr Gardiner and Ms Sharon Cowan discussed the fact that they did not want the Amended Draft Motions to be carried at the meeting;39 (e) Mr Wilson discussed with Mr Gardiner and Ms Sharon Cowan the fact that the meeting would be inquorate without their attendance.40 Mr Shane Cowan also 34 T 3-42 to T 3-43. 35 Affidavit of J S Shepley sworn 19 April 2021 (CD-25), paragraph 54 and JSS-20. 36 T 1-45, ln 6-9; T 1-45, ln 34-41. 37 T 1-107, ln 45-46; T 1-108, ln 14-17. 38 T 2-36. 39 T 1-48, ln 21-22; T 2-36. 40 T 1-48, ln 24-41; T 1-56, ln 19-23. -- 14 of 40 -- 15 discussed that matter with Ms Sharon Cowan.41 Both Mr Gardiner and Ms Sharon Cowan denied that such discussions took place;42 and (f) Mr Wilson, Mr Gardiner, Ms Sharon Cowan and Mr Shane Cowan discussed the idea of sending emails to Mr Shepley expressing their apologies for not attending the proposed board meeting (but Mr Gardiner denied discussing this43).44 [54] Following those discussions, Mr Wilson, Mr Gardiner and Ms Sharon Cowan each sent an email to Mr Shepley as follows (Apology Emails): (a) At 4.05pm, Mr Gardiner wrote: “I am unable to attend on such short notice. Please record my apologies in the minutes.” (b) At 4.30pm, Mr Wilson sent an email identical to Mr Gardiner’s. (c) At 4.32pm, Ms Sharon Cowan wrote: “I am unable to attend with the short notice please record my apology.” [55] At 4.51pm, Mr Shane Cowan sent an email to the entire CEA Board, stating, “I have not and will not tender my resignation.” His evidence was that, having reflected upon his emotional statement to Mr Shepley earlier in the day, he ultimately did not wish to carry out his threat to resign. Each of Mr Shepley, Mr Casey, Mr Daley and Ms Luckus read Mr Cowan’s email before commencing the board meeting at 5.00pm.45 4 February Board Meeting [56] The 4 February Board Meeting commenced at 5.00pm and was attended by five directors: Mr Shepley, Mr Purcell, Mr Daley, Mr Casey and Ms Luckus. Under CEA’s constitution, attendance by six of the eight directors was required to achieve a quorum.46 Acknowledging that the meeting was possibly inquorate, the attendees agreed to proceed with the meeting anyway. During oral submissions, Mr Coveney, who appeared with Mr Lane for CEA, expressly abandoned any reliance on a lack of quorum at the 4 February Board Meeting. It is therefore unnecessary to consider whether the attendees were entitled to proceed with only five directors present. In any event, it is sufficient to note that their decision to proceed with five was premised on the alleged urgency of the business to be done at the meeting, namely dealing with the Amended Draft Motions, particularly the motion to adjourn the 10 February AGM.47 [57] Each of the Amended Draft Motions was passed unanimously at the meeting, with the exception that it was not resolved that Ms Sharon Cowan would become acting general manager of CEA. Ms Luckus’ evidence was that she did not want Ms Sharon 41 T 1-89, ln 1-10; T 1-90, ln 5-9. 42 T 1-108, ln 31-40; T 2-42, ln 27. 43 T 2-43, ln 40. 44 T 1-48, ln 25-30; T 1-90, ln 29-31. 45 T 2-78, ln 4-6; T 2-101, ln 20; T 3-12, ln 43; T 3-46, ln 21. Mr Purcell did not give evidence in the proceeding for personal reasons. 46 Constitution of Career Employment Australia Ltd, cl 11.5 (See Exhibit 2). 47 See, Affidavit of J Luckus sworn 22 April 2021 (CD-28), paragraphs 9-10; Affidavit of B J Daley sworn 22 April 2021 (CD-26), paragraphs 6-11; Affidavit of J S Shepley sworn 19 April 2021 (CD-25), paragraph 59. -- 15 of 40 -- 16 Cowan to be the acting general manager if Ms Cowan had been involved in “deceit in relation to the nominations”.48 Instead, it was resolved that Mr Shepley would temporarily be appointed as “Administrator” of CEA.49 Draft Motion 4, compelling Ms Austin to provide information to the Board under threat of suspension, was also amended so as to make any such suspension unpaid. An additional four motions which had not been circulated prior to the meeting were also carried.50 [58] Despite Mr Shane Cowan’s email of 4.51pm purporting to retract his threat to resign, the attendees unanimously passed a motion acknowledging his resignation and resolved that no payment would be made to Mr Cowan until after such payment had been recommended by the auditor. Mr Casey’s cross-examination on this matter included as follows: “You’d seen the email from Mr Cowan by which he said, effectively, ‘I’m not going to resign’, that was – he was emotional but he decided not to resign; do you remember that?---Yep. Yes. So into the meeting you go knowing that he hasn’t resigned but, yet, you’re faced with a resolution dealing with him having resigned?---Yes. Yes. And you do deal with it on the basis that he has resigned?---Yes. Yes. All right. And you determine those things about Mr Cowan and the other resolutions that affected people like Mr Gardiner and Ms Cowan without regard to stopping the meeting until those people could be there?---We based it on the discussions that had been – that had been held and the report which did come back to us from – from John [Shepley]. … So a lot of faith was placed in John by all of you?---Yes.”51 [59] At 8.35pm, Mr Shepley circulated minutes of the 4 February Board Meeting, including a copy of the resolutions passed (Resolutions), to each person who attended the meeting (but not to Mr Wilson, Mr Gardiner or Ms Sharon Cowan). The Resolutions were in the following terms: “MOTIONS FOR THE BOARD MEETING ON 4 FEBRUARY 2021 1. That the nominations of David Hatton and Jason Gardiner are not valid due to the fact that the dates as presented on their nominations are not within the valid nomination period. Mr Gardiner provided a dated nomination of 18 December 2020 (some two months later than what was required) and Mr Hatton was not a member at the time when nominations closed. 2. That the Annual General Meetings of 10 February 2021 be postponed. 48 Affidavit of J Luckus sworn 22 April 2021 (CD-28), paragraph 9(d). 49 Affidavit of J Luckus sworn 22 April 2021 (CD-28), exh JLL-1. 50 Including the motion appointing Mr Shepley as “administrator”. 51 T 2-101, ln 15-32. -- 16 of 40 -- 17 3. That the Board authorises the Chair to organize and finalize a Returning Officer and a body to perform the process, and inform the Board to ensure they have no conflicts. 4. That the documentation from the Chair to Ms Bev Austin be followed through and require her to answer that before close of business, Friday, 5 February 2021. That she be suspended until such time as she has provided the information to the Board, if not received by then. That such suspension be unpaid. 5. That both Sharon Cowan, Bev Austin and Shane Cowan be required to provide information to the Board as to why they had not disclosed at any prior time to a request from the Chair of any other nominations in respect to the Board, especially the first nomination of 27 July 2020 being prior to the call of nominations for the Board Members. 6. That the Board has a view that the deliberate nature of Shane Cowan, Sharon Cowan and Bev Austin is a deceit exercised upon the Board in respect to not providing in a timely and efficient way appropriate information to the Board in respect of what is required by the Board and the operations of the Associations Incorporations Act and the Corporations Act. 7. That Shane Cowan, Sharon Cowan and Bev Austin, provide in full detail to the Auditor for safekeeping all details regarding access, passwords and so forth to the I.T. systems of the organizations including their own personal and professional details that are on the I.T. systems of the organizations, and agree not to change them until authorised by the Board. 8. That it is not to be presumed that the requirement to provide that is any presumption that they have committed any offences or details or any prevention of any offences against the Constitution or Rules but to ensure that should something happen would be transferred through to that. 9. That Shane Cowan advises Brad and other I.T. people of CEA and associated organisations that forthwith until such time as otherwise advised by the Board that the I.T. control system is to be transferred to the Auditor for safekeeping and they should provide all I.T. issues and confirmation of changes to him until otherwise directed by the Board. 10. That Frank Wilson shall provide prior to the finalization of business on Friday, 5 February 2021 to Brad, the I.T. Provider all the codes in connection for the finance system to be held by the Auditor until otherwise directed by the Board. 11. That the Board acknowledges the resignation of Shane Cowan as General Manager and that no payment shall be made to Mr Cowan until such time as there has been an audit of the Books and that the proposed payment has been authorized by the Board on the recommendation of our Auditor. -- 17 of 40 -- 18 12. That the Chairman (John Shepley) be appointed Administrator of CEA and its associated organizations for a period of seven (7) days while the Board considers its process of this matter. The Chairman will be authorized to enter the building and implement the above decisions, including changing of locks and passwords to the building and advising essential personnel and providing them with keys in respect to those issues. 13. That besides advising Brad in the I.T. Department regarding all of the I.T. requirements and financials, that John Shepley contacts the banks for CEA and associated entities regarding the change and be appointed the Sole Administrator in respect to finance. 14. That any monies be paid(advanced) to BSG are to be authorized by Pat Purcell and Brian Daley so that there is no conflict of interest. 15. That within seven (7) days, John Shepley is to report to the Board in respect to what has occurred and that there be a further Board Meeting by telephone. Moved: Pat Purcell Seconded: Brian Daley Carried Unanimously”52 5 February 2021 to 9 February 2021 [60] On 5 February, Mr Shepley attended the CEA office and provided each of Ms Sharon Cowan, Mr Shane Cowan, Mr Gardiner, Mr Wilson and Ms Austin with a copy of the various Resolutions that affected them as individuals. By way of example, Ms Austin was given a copy of Resolution 4. Mr Gardiner’s evidence is that he and Ms Sharon Cowan challenged Mr Shepley regarding the validity of the 4 February Board Meeting and that Mr Shepley threatened to seek a court injunction if the requirements of the Resolutions were not met.53 Later the same day, Mr Gardiner changed the locks at the CEA office at Coorparoo on instruction from Ms Sharon Cowan. [61] On 7 February, Mr Shepley, with Mr Daley’s concurrence, sent correspondence to various recipients as follows: (a) an email to CEA’s members, notifying them that the 10 February AGM had been postponed; (b) an email letter to Mr Wilson informing him that he had been suspended without pay because he had failed to provide the finance system access codes as required by Resolution 10; (c) an email letter to Mr Gardiner, Ms Austin, Ms Sharon Cowan and Ms Shilo Cowan alleging that they had entered into a conspiracy to take over the financial affairs of CEA and demanding a response to the allegations by 8.00am the following day; and 52 Affidavit of J S Shepley sworn 19 April 2021 (CD-25), paragraph 61 and exh JSS-24. 53 Affidavit of J M Gardiner sworn 11 March 2021 (CD-2), paragraph 35. -- 18 of 40 -- 19 (d) an email letter to Ms Austin and Ms Sharon Cowan requiring that they provide information regarding the IT control system authorities by 8.00am the following day. [62] From 7 February onwards, Mr Shepley began changing the locks at CEA premises and refusing entry to certain CEA staff including Mr Gardiner and Mr Shane Cowan. [63] On 9 February, Ms Sharon Cowan emailed CEA’s members, notifying them that the 10 February AGM would be proceeding as originally scheduled. 10 February AGM [64] As at 10 February 2021, CEA had 45 members entitled to vote in the election for the CEA Board. [65] At 5.50pm, Mr Wilson attempted to gain access to the CEA premises at Coorparoo for the purposes of attending the 10 February AGM but was denied entry by security guards. Mr Wilson and Mr Gardiner then attempted to establish the AGM in the car park but were moved on by security guards. In those circumstances, they established an AGM on the footpath, outside the CEA office. [66] The meeting opened at 6.05pm and closed at 6.41pm. Thirty of the 45 members attended the meeting, along with an independent observer, Ms Kyla Brose, a solicitor.54 Nine people were purportedly elected to the CEA Board: Mr Wilson, Mr Hall, Ms Bailey, Mr Shane Cowan, Ms Sharon Cowan, Mr Gardiner, Mr Casey, Ms Langford and Mr Hatton. No votes were cast in favour of electing Mr Shepley, Mr Daley, Mr Purcell or Ms Luckus. Events following the 10 February AGM [67] On 11 February, absent Mr Casey, the persons purportedly elected to the CEA Board at the 10 February AGM held a board meeting. The minutes of the AGM were affirmed and ratified unanimously. By a show of hands, Mr Shane Cowan was appointed executive chairman, Mr Gardiner was appointed deputy chairman, and Ms Langford was appointed secretary. [68] On 12 February, a further meeting was held by the “new” Board.55 It was resolved that CEA’s solicitor, Mr Tolhurst of HWL Ebsworth, would amend the ASIC register to reflect the changes to the Board and to amend CEA’s registered office address to that of HWL Ebsworth in Brisbane. [69] On 14 February, Ms Bailey resigned from the “new” Board under a threat from Mr Shepley to the effect that she had to decide between resigning and not returning to work on the following Monday. The same day, Mr Shepley emailed all CEA staff, making, inter alia, the following points: (a) Mr Shane Cowan had resigned on 4 February; 54 Of the 15 absent members, four were the respondents, one was Mr Casey, six were apologies and four were unaccounted for: Exhibits 23 and 35. 55 Mr Casey was absent and Ms Bailey was an apology. -- 19 of 40 -- 20 (b) a CEA Board meeting on 4 February had resolved to postpone the 10 February AGM; (c) Ms Austin, Ms Shilo Cowan, Mr Gardiner and Mr Wilson had been suspended; (d) Ms Sharon Cowan’s employment had been terminated effective 11 February; and (e) there was a conspiracy to illegally take over CEA by Mr Shane Cowan, Ms Sharon Cowan, Ms Austin, Ms Shilo Cowan, Mr Gardiner and Mr Wilson. [70] On 16 February, Ms Leanne Cowan received a text message from Mr Shepley stating that her position was being made redundant. The following day, she sought an explanation for her redundancy, but no explanation was given. The parties’ competing applications [71] There are two applications before the Court: an amended originating application filed by CEA and an amended cross-application filed by the respondents. Both applications ask the Court to determine who constitutes the duly elected board of CEA. CEA contends that the Board is comprised of those persons elected at the 10 February AGM and it seeks declaratory relief to that effect pursuant to s 10 of the Civil Proceedings Act 2011 (Qld) or the inherent jurisdiction of the Court. On the other hand, the respondents contend that the Board is comprised of those persons who constituted the Board prior to the 10 February AGM. They seek, inter alia, a declaration pursuant to s 1322(4)(a) of the Corporations Act 2001 (Cth) (Corporations Act) that the 4 February Board Meeting and the Resolutions carried at that meeting are not invalid. [72] If the respondents succeed on their cross-application, CEA’s amended originating application must fail because the effect of the relief sought by the respondents would be that the 10 February AGM was adjourned by Resolution 2 carried at the 4 February Board Meeting. Any business conducted at the 10 February AGM would be of no effect. It is therefore expedient to deal with the respondents’ cross-application first. Respondents’ amended cross-application [73] The respondents seek declarations of non-invalidity pursuant to s 1322(4)(a) of the Corporations Act. That section provides: “Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes: (a) an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation; … -- 20 of 40 -- 21 and may make such consequential or ancillary orders as the Court thinks fit.” [74] An order under s 1322(4)(a) operates to ‘cure’ a contravention of a provision of the Corporations Act or a provision of a company’s constitution. Clearly, before any order under s 1322(4)(a) is necessary, there must be a contravention to cure. Here, CEA submits that cl 11.2 of CEA’s constitution was contravened.56 Clause 11.2 (‘Notice of Board Meeting’) provides: “The convenor of each Board meeting: (a) must give reasonable notice of the meeting (and, if it is adjourned, of its resumption) individually to each Director who is in Australia; ... …” [75] Before I turn to consider that question, it is important to identify the relevance of s 1322(2), which provides that: “A proceeding under this Act 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.” [76] The adoption of resolutions at a board meeting is a proceeding under the Act,57 and a deficiency of notice (such as a contravention of cl 11.2(a) of CEA’s constitution) is a procedural irregularity.58 CEA must therefore demonstrate that: (a) Mr Shepley failed to give reasonable notice of the 4 February Board Meeting; and (b) that lack of notice has caused, or may cause, substantial injustice.59 [77] Unless CEA discharges that burden, the Resolutions are deemed not to be invalid by reason of s 1322(2) of the Corporations Act without the need for any further order of the Court.60 The Court may nonetheless decide to make declarations to clarify the validity of the Resolutions.61 Reasonable notice? [78] As set out above, cl 11.2(a) of CEA’s constitution requires the giving of reasonable notice of a board meeting. The term “reasonable notice” is not defined in the 56 CEA initially also relied on a lack of quorum at the 4 February Board Meeting but abandoned that ground during the hearing of the applications. 57 Corporations Act 2001 (Cth) s 1322(1)(a); City Pacific Ltd v Bacon (No 2) (2009) 178 FCR 81, [51] (Dowsett J). 58 Corporations Act 2001 (Cth) s 1322(1)(b)(ii). 59 Australian Hydrocarbons NL v Green (1985) 10 ACLR 72, 83 (Hodgson J). 60 Re Mosaic Oil NL (No 2) [2010] FCA 1186, [15] (Jacobson J), citing SGIC Insurance Ltd v Insurance Australia Ltd (2004) 51 ACSR 593, [12]-[16] (Jacobson J). 61 Re iProperty Group Ltd (No 2) [2016] FCA 36, [15] (Yates J). -- 21 of 40 -- 22 constitution. Clause 11.2(a) replaces the replaceable rule in s 248C of the Corporations Act,62 which provides that: “A directors’ meeting may be called by a director giving reasonable notice individually to every other director.” [79] In my view, the notice requirements in cl 11.2(a) and s 248C are materially the same, such that cl 11.2(a) can be construed by reference to the authorities on s 248C. Mr Coveney correctly accepts that cl 11.2(a) requires the giving of notice of the meeting itself, but not notice of the business to be done at the meeting. Mr Shepley gave notice of the 4 February Board Meeting at 3.39pm on 3 February. The question is whether, in the circumstances of the case, that notice was reasonable. It is a question of fact that is to be determined by reference to notions of fairness to all parties.63 It is a context-specific inquiry that accounts for the nature and urgency of the business to be done and the practicability of providing longer notice.64 It is relevant to consider the Board’s previous practice.65 It is also relevant to consider whether, by reason of the lack of notice, the directors were unable to attend the meeting.66 [80] In their Apology Emails, Mr Gardiner, Mr Wilson and Ms Sharon Cowan each represented to Mr Shepley that they were unable to attend the meeting because of the “short notice”.67 In their affidavits and during oral evidence, they each gave evidence as to the reasons why they could not attend. The respondents have made submissions on that evidence,68 and they invite the Court to find that Mr Wilson chose not to attend the board meeting, intending the Board to proceed inquorate without him. As to Mr Gardiner and Ms Sharon Cowan, whilst the respondents stop short of submitting that they could have attended the meeting, it is submitted that Mr Gardiner and Ms Cowan nonetheless chose not to ask for the meeting to be adjourned, intending the Board to proceed inquorate without them. On the question of reasonable notice, it is unnecessary for me to determine whether Mr Wilson, Mr Gardiner and Ms Cowan deliberately did not attend the meeting. A finding that they could, practically speaking, have attended the meeting does not mean the notice period was reasonable. In Re Keneally,69 Black J held that a requirement for reasonable notice of a board meeting had not been satisfied even though the complaining director had, in fact, attended the meeting.70 That Mr Wilson, Mr Gardiner and Ms Cowan did not make enquiries about adjourning the meeting does not, in my view, affect the reasonableness of the notice they were given by Mr Shepley. 62 This is the effect of cl 2.7 of CEA’s constitution, which provides that, “The replaceable rules referred to in section 141 of the Act do not apply to the Company and are replaced by the rules set out in this document”: Constitution of Career Employment Australia Ltd (See Exhibit 2). 63 Hickey v Aselford [2003] NSWSC 185, [26] (Gzell J), citing Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, 567-8 (Brennan J). 64 Summerdowns Rail Ltd v Stevens [2015] NSWSC 321, [175]-[176] (Robb J); Ashrafinia v Ashrafinia [2012] NSWSC 500, [33] (Slattery J), citing Toole v Flexihire Pty Ltd (1991) 6 ACSR 455, 461 (Demack J). 65 Wilson v Manna Hill Mining Co Pty Ltd [2004] FCA 912, [25] (Lander J). 66 Ashrafinia v Ashrafinia [2012] NSWSC 500, [33] (Slattery J), citing Toole v Flexihire Pty Ltd (1991) 6 ACSR 455, 461 (Demack J). 67 See [54] above. 68 Outline of Submissions on Behalf of the Respondents, paragraphs 66 to 74 (Respondents’ Submissions). 69 (2015) 107 ACSR 172. 70 Re Keneally (2015) 107 ACSR 172, [60]. -- 22 of 40 -- 23 [81] In the ordinary course, CEA Board meetings were held on ample notice. Ms Austin’s evidence,71 which was corroborated by others72 and which I accept, was that she distributed to the directors at the beginning of each year a calendar which identified the dates on which board meetings were to be held. Generally, board meetings were scheduled for the fourth Wednesday of each month, with a reminder sent out to the directors by Ms Austin on the preceding Friday. The calendar for 2020, which was tendered by CEA, is consistent with that evidence.73 Of the board meetings identified in the chronology above, those on 26 February 2020, 22 July 2020, 26 August 2020 and 2 December 2020 all appear on the 2020 calendar, which was provided to the directors on 5 December 2019. [82] The respondents submit that the Board developed a practice during the COVID-19 pandemic throughout 2020 whereby board meetings were conducted using technology such that directors unable to attend in person could attend by telephone. They say that short notice of board meetings held by telephone was not unusual and had never previously been identified by Mr Wilson, Mr Gardiner or Ms Sharon Cowan as inconvenient or causative of difficulty for them. By way of example, the respondents highlight Mr Gardiner’s evidence that the meeting in late September or early October 2020, at which the AGM was indefinitely postponed, was convened in an “ad hoc fashion” to address the implications of the pandemic in a “common sense” manner.74 They also identify the short notice given of the purported board meetings held on 11 and 12 February 2021. [83] The fact that CEA Board meetings had previously been held at short notice is not, of itself, determinative. The 4 February Board Meeting was not a meeting convened in the ordinary course but was convened for a special purpose and, for that reason, the Board’s previous practice is of limited guidance in determining what period of notice was reasonable. The required notice for a specially convened meeting “may be more (given the importance of the decision) or less (given any urgency in the position) than the notice required for board meetings in the ordinary course”.75 The board meetings identified by the respondents as examples of meetings held at short notice are distinguishable from the 4 February Board Meeting because of the gravity of the subject matter dealt with on 4 February. I accept Mr Gardiner’s evidence, for example, that equating the 4 February Board Meeting with the meeting held on 11 February 2021 is like “comparing apples and oranges” when regard is had to the seriousness of the Resolutions.76 [84] Mr de Jersey QC, who appeared for the respondents, accepts that the reasonableness of the notice that was given in respect of the 4 February Board Meeting must be informed by the nature of the business done at the meeting. In Bentley Capital Ltd v Keybridge Capital Ltd,77 Banks-Smith J stated that “[w]hat is required by way of notice may ultimately need to be resolved by reference to the nature of the business to be dealt with at a particular meeting”. Similarly, in Re Keneally,78 the fact that the 71 T 1-60, ln 33-41; T 1-61, ln 10-22. 72 T 1-76, ln 46 to T 1-77, ln 12 (Shane Cowan); T 1-101, ln 25 (Sharon Cowan); T 2-17, ln 5-37; T 2-26, ln 32-33 (Jason Gardiner). 73 Exhibit 22. 74 T 2-23, ln 43-47. 75 Re Keneally (2015) 107 ACSR 172, [60] (Black J). 76 T 2-47, ln 3-5. 77 (2019) 139 ACSR 289, [38]. 78 (2015) 107 ACSR 172, [62]. -- 23 of 40 -- 24 business to be done at the meeting was “very significant” to the company contributed to Black J’s ultimate finding that the given notice was not reasonable. [85] The Resolutions passed at the 4 February Board Meeting are set out at [59] above. Their gravity and profound impact on the management, operations and personnel of CEA are self-evident. The Resolutions have the effect of preventing members (including Mr Gardiner, who had been a director since 2018) from running for election to the Board; indefinitely postponing an AGM (and with it, a Board election) originally expected to be held in September 2020; compelling staff and directors of CEA to provide documents and other sensitive information, including financial and personal information, under threat of unpaid suspension; effecting the resignation of CEA’s general manager and withholding termination payments to him in circumstances where he sought to retract his purported resignation prior to the meeting; alleging against staff and directors a “deceit” against the Board; and transferring effective control of CEA solely into Mr Shepley’s hands for seven days, including authorising him to change locks and passwords to CEA infrastructure. I accept Mr Wilson’s evidence that no previous CEA Board meetings considered or carried resolutions of this nature.79 [86] In Bell v Burton,80 Tadgell J (as his Honour then was) stated: “Adequate notice of a meeting of directors is not a matter of ensuring that the directors’ interests will be represented, but of ensuring that a director will be able to make the necessary representation of the interests he or she has in his or her hands. These interests are not merely his or her own. The company is, of course, entitled to expect to receive the collective wisdom and contribution of all directors.”81 [87] Here, the notice given by Mr Shepley was insufficient to enable Mr Wilson, Mr Gardiner and Ms Sharon Cowan to properly consider or take advice on the Amended Draft Motions. Unlike the other directors who had been given advance notice by Mr Shepley of his intention to bring the Draft Motions (and, subsequently, the Amended Draft Motions), Mr Wilson, Mr Gardiner and Ms Sharon Cowan were not afforded the opportunity to position themselves so as to make informed decisions on the subject matter of the meeting. Both Mr Wilson and Mr Gardiner gave evidence that they would have liked to speak to the various people who were affected by the proposed motions (Ms Austin, for example).82 Mr Gardiner, in fact, sought legal advice on the Amended Draft Motions on 4 February 2021 but did not receive that advice until the following day.83 The fact that legal advice was sought is both unsurprising and entirely appropriate when regard is had to the profound effect of the Resolutions discussed above. For example, Resolution 1 had the effect of removing Mr Gardiner and Mr Hatton from the forthcoming election in circumstances where the validity of their nominations was a matter of genuine dispute and directly affected their rights to seek election. In my view, the notice given by Mr Shepley was not sufficient to enable Mr Wilson, Mr Gardiner or Ms Cowan to make the necessary representation of the interests that they had in their hands. 79 T 1-55, ln 27-44. 80 (1993) 12 ACSR 325. 81 Bell v Burton (1993) 12 ACSR 325, 329. 82 See, eg, T 1-44, ln 45 to T 1-46, ln 2 (Frank Wilson); T 2-45, ln 16-19; T 1-44, ln 45 to T 1-46, ln 2 (Jason Gardiner). 83 T 2-50, ln 28. -- 24 of 40 -- 25 [88] The respondents submit that short notice was unavoidable in the circumstances in which Mr Shepley found himself: “The constraint that was present when the 4 February 2021 Board meeting was called on 3 February 2021 was that the AGM was to occur on 10 February 2021. Mr Shepley did not know that the AGM would be contested until 25 January 2021 so he was not able to give notice until after 25 January 2021. Time was therefore necessarily limited.”84 [89] In response, CEA points to the fact that, even as late as 4 February 2021, there were still two business days (being 5 and 8 February) on which the meeting could have occurred prior to the 10 February AGM. It also identifies that no attempt was made to enquire with the directors as to their availability to attend a board meeting.85 [90] In Re Keneally, Black J considered the authorities on urgency as a factor informing what period of notice is reasonable. His Honour stated at [57]: “… In Hickey, Gzell J held that notice of a meeting to consider a resolution to appoint a voluntary administrator that was given one afternoon in respect of a meeting to be called for the following morning was reasonable notice. In McMaster, a shorter period of notice was held to be reasonable where there was urgency in appointing an administrator and, in Ashrafinia v Ashrafinia, a short notice period was held to be reasonable where there was an urgent need to retain solicitors in respect of litigation.86 [91] The facts before Black J were that a directors’ meeting for the appointment of a company administrator was called at just less than two hours’ notice, ostensibly because the convening directors were planning to travel overseas later that evening. His Honour considered that, in circumstances where the convening directors had been considering the appointment of an administrator for several weeks, it was unreasonable to use travel plans as a justification for a short notice period. Objectively, the business to be done was not sufficiently urgent to render two hours’ notice reasonable and they could have provided longer notice. His Honour stated: “In those circumstances, it seems to me that little weight should be given to the submission that, but for the fact of any travel plans of [the convening directors], it was necessary to call the directors’ meeting on less than 2 hours’ notice. It does not seem to me that any inconvenience to [the convening directors] in requiring the variation of their travel plans in order to give greater notice of the meeting, warranted the very short notice given of that meeting, absent any other urgency in the matter.87 [92] As Black J alluded, the circumstances in Re Keneally can be contrasted with those in McMaster v Eznut Pty Ltd,88 where only a few minutes’ notice of a board meeting 84 Respondents’ Submissions, paragraph 104. 85 T 3-95, ln 7-14. 86 Re Keneally (2015) 107 ACSR 172, [57] (citations omitted). 87 Re Keneally (2015) 107 ACSR 172, [59]. 88 (2006) 58 ACSR 199. -- 25 of 40 -- 26 was held to be reasonable largely because the company was required to urgently appoint an administrator that very day.89 Such urgency is distinguishable from the present case. Both Mr Casey and Mr Shepley agreed in cross-examination that the meeting did not strictly need to be held on 4 February.90 Mr Daley’s evidence was that “[t]he interpretation was that we needed to deal with it there and then”.91 Ms Luckus framed the urgency in the context of the Cowans’ resignations: “If your general manager has resigned and your deputy is going to resign, then, yeah, there’s an urgency to have a meeting.”92 [93] When regard is had to Mr Shane Cowan’s email of 4.51pm on 4 February,93 which Ms Luckus read before attending the board meeting, that evidence is of little weight. Mr Shepley became aware that the 10 February AGM was going to be contested on 25 January 2021. He formed an intention to hold a board meeting to resolve to postpone the AGM by 1 February 2021 at the latest. Having formed that intention, he engaged in discussions regarding the Draft Motions and Amended Draft Motions for a number of days before giving notice of the 4 February Board Meeting to Mr Wilson, Mr Gardiner and Ms Sharon Cowan on the afternoon of 3 February 2021. On the evidence before the Court, it was practicable to have given longer notice of the meeting, either by holding the meeting on a later date or by giving notice prior to 3.39pm on 3 February. [94] Taking each of these considerations into account, I am of the view that the notice given to Mr Wilson, Mr Gardiner and Ms Sharon Cowan of the 4 February Board Meeting was not reasonable in the circumstances of the present case. [95] Before turning to consider the question of substantial injustice, I should note that Mr de Jersey submits that the fact that notice of the Amended Draft Motions was given is a factor weighing in the respondents’ favour on the question of reasonable notice.94 On the other hand, Mr Coveney submits that the provision of draft motions assists CEA’s case.95 He relies on [51]-[52] of the judgment of Barrett J (as his Honour then was) in Dhami v Martin: “Where there is a requirement that the notice convening a meeting state the purpose of the meeting or the business proposed to be transacted, the position is as stated in McLure v Mitchell at 140: ‘The purpose of a notice of a meeting is to enable persons to know what is proposed to be done at the meeting so that they can make up their minds whether or not to attend. The notice should be so drafted that ordinary minds can fairly understand its meaning. It should not be a tricky notice artfully framed.’ The position must be the same where the person summoning the meeting chooses to state what is proposed to be done at the meeting, even though there is no requirement that he or she do so and the 89 See, McMaster v Eznut Pty Ltd (2006) 58 ACSR 199, [160]-[179] (Simmonds J). 90 T 2-102, ln 1-5 (Paul Casey); T 3-46 to T 3-47 (John Shepley). 91 T 3-13, ln 4-14. 92 T 2-79, ln 25-39. 93 See [55] above. 94 Respondents’ Submissions, paragraph 77(d). 95 T 3-92, ln 1-19. -- 26 of 40 -- 27 meeting would have been properly convened by a notice that did not state a purpose. A statement of purpose actually included by the summoning person, whether or not required, is put forward in order that those entitled to attend can decide whether or not to do so. Indeed, in the context of a board of directors where there is no requirement that the proposed business be stated, there is no other conceivable reason for a statement of purpose. The implied message conveyed by the statement of purpose and its inclusion is that the meeting is being summoned not to do anything and everything that the board of directors has power to do and may decide to do but for the particularly defined and limited purpose notified. The need for the statement to convey a fair description of the purpose on which a decision to attend or not may reliably be based is therefore both emphasised and obvious.”96 [96] When read in the context of Barrett J’s judgment as a whole, it is apparent that his Honour is not considering the issue of reasonable notice but rather the validity of resolutions that are beyond the scope of the agenda. Barrett J was not required to determine the question of reasonable notice. [97] Absent a contrary provision in a company’s constitution, there is no legal requirement to provide an agenda or notice of the business to be done at a board meeting.97 Neither party has demonstrated that, in the circumstances of this case, the provision of draft motions has any material bearing on the reasonableness of the notice per se. Regardless, I have already noted that the grave nature of the business done at the 4 February Board Meeting is a factor weighing in CEA’s favour. Substantial injustice? [98] Having determined that Mr Shepley did not give reasonable notice of the 4 February Board Meeting, the question becomes whether that failure caused, or may cause, a substantial injustice to any person that cannot be remedied by any order of the Court.98 [99] The terms of s 1322(2) make clear that the irregularity itself (here, the lack of reasonable notice) must be the cause of the injustice, not the meeting or any resolutions passed during it.99 It is not enough merely to show that a substantial injustice arises from the resolutions that were purportedly passed at the meeting.100 As acknowledged by Mr Coveney, the onus of proving substantial injustice is on CEA.101 [100] In this context, Owen J (as his Honour then was) stated in Elderslie Finance Corp Ltd v Australian Securities Commission: 96 Dhami v Martin (2010) 241 FLR 165, [51]-[52] (Barrett J) (citations omitted). 97 Bentley Capital Ltd v Keybridge Capital Ltd (2019) 139 ACSR 289, [39] (Banks-Smith J). 98 Corporations Act 2001 (Cth) ss 1322(2), 1322(6)(c). 99 Chalet Nominees (1999) Pty Ltd v Murray [2012] WASC 147, [28] (Le Miere J), citing Re Pembury Pty Ltd [1993] 1 Qd R 125, 127 (Byrne J). 100 For a review of the authorities on this point, see Whitehouse v Capital Radio Network Pty Ltd (2002) 21 ACLC 17 (upheld on appeal in Whitehouse v Capital Radio Network Pty Ltd (2004) 13 Tas R 27). 101 Australian Hydrocarbons NL v Green (1985) 10 ACLR 72, 83 (Hodgson J). -- 27 of 40 -- 28 “The word ‘injustice’ requires the court to consider real, and not merely insubstantial or theoretical prejudice. A degree of prejudice to a person or persons may be outweighed if the overwhelming weight of justice is in favour of making the order.”102 [101] In Re QBiotics Ltd, Gleeson J stated that: “The principled approach to identifying substantial injustice … is to weigh the prejudice that would be suffered if the order is made against the prejudice that would be suffered if an order was not made.”103 [102] The matters which are relevant to the weighing of prejudice include: “… whether prejudice would be ‘unfair or inequitable, taking into account the interests of all of those who would have been directly affected by such a dispensation’, including by depriving a person of his or her legal rights”.104 [103] In Markpolous v Wedlock,105 in respect of a challenge under s 1322(2) to the validity of resolutions passed at a board meeting for which there was insufficient notice, Hasluck J stated that: “It seems that the onus is on the person opposing resolutions to show substantial injustice which cannot be remedied by any order of the Court and that the resolutions would not have been passed if there had been no irregularities.”106 [104] In Re Deposit Power Pty Ltd,107 Black J also considered the question of substantial injustice under s 1322(2) in the context of a lack of notice for a board meeting. His Honour held that: “The evidence indicates that, had a longer period of notice been given, and had the [absent director] participated in the meeting, then the same result would have followed. That is sufficient to establish that there is no substantial injustice by reason of the shorter period of notice, quite apart from reliance on the other matters which would support the same result…”108 [105] On the evidence before me, I am not of the view that the outcome of the 4 February Board Meeting would necessarily have been the same if reasonable notice had been given and Mr Wilson, Mr Gardiner and Ms Sharon Cowan had attended, armed with a considered position and having taken advice. The evidence is sufficient to conclude that Mr Shepley, Mr Daley, Mr Purcell and Ms Luckus would have voted in favour of the Resolutions in any scenario, and that Mr Gardiner, Mr Wilson and Ms Cowan would have voted against. But I am not satisfied that Mr Casey would necessarily 102 Elderslie Finance Corp Ltd v Australian Securities Commission (1993) 11 ACSR 157, 160 (citations omitted). 103 Re QBiotics Ltd [2016] FCA 873, [46], cited in Re iCandy Interactive Ltd (2018) 125 ACSR 369, [117] (Banks-Smith J). 104 Re Keneally (2015) 107 ACSR 172, [69] (Black J) (citations omitted). 105 (2008) 26 ACLC 129. 106 Markopolous v Wedlock (2008) 26 ACLC 129, [56]. 107 [2018] NSWSC 1484. 108 Re Deposit Power Pty Ltd [2018] NSWSC 1484, [15]. -- 28 of 40 -- 29 have voted in favour of each and every one of the Resolutions in that hypothetical situation. I accept his evidence that he is not “singularly aligned” with Mr Shepley, and that he has voted according to the merits of the issues before him. That evidence is consistent with his support for Mr Wilson’s motion at the board meeting on 26 February 2020 regarding BSG’s finances. In my view, there was a real possibility that some of the Resolutions may not have been carried, or that some may have been carried in an amended form, given that a vote against any of the Resolutions by Mr Casey would have resulted in a split 4-4 vote. [106] In any event, citing this Court’s decision in Re Chevron Furnishers Pty Ltd (in liq),109 Slattery J stated in BI Constructions Pty Ltd v Shad that: “…where the irregularity results in a decision adverse to the interests of those complaining of the irregularity and the irregularity also constitutes a denial of the opportunity to speak against the decision, the Court is likely to make a declaration of invalidity no matter how unlikely it is that the complainant will be able to persuade a future meeting to vote against the same decision.”110 [107] Similarly, in Chalet Nominees (1999) Pty Ltd v Murray,111 it was observed that a common feature of cases in which a substantial injustice has been found to arise is that members or directors have been denied an opportunity to attend a meeting or to make representations to members. That is consistent with the following observation of Black J in Re Keneally: “The requirement for reasonable notice of a directors’ meeting is an important part of good corporate governance, and it seems to me there is a public interest in majority directors not being permitted to call meetings at unreasonably short notice, in the absence of objective urgency, where directors and shareholders are at loggerheads.”112 [108] Mr Coveney relies on Bentley Capital Ltd v Keybridge Capital Ltd,113 in which Banks-Smith J declined to grant relief under s 1322 because: “… the injustice that exposed directors to meetings where business was purportedly transacted outside the scope of that which was notified and without adjournment to consider options was substantial and outweighs the injustice of not validating such irregularities or contraventions.”114 [109] Mr Coveney also relies on Re Statewide Office Furniture Pty Ltd.115 In that case, a company director, Mr Stojic, brought an application under s 1322 for a declaration that resolutions passed at an inquorate members’ meeting were not invalid. Prior to the meeting, the NSW Supreme Court had made orders prohibiting the company from appointing any further directors. When Mr Stojic gave notice of the members’ meeting to Mr Bezina, along with the proposed resolutions appointing new directors 109 [1994] 2 Qd R 475 (Ryan J). 110 BI Constructions Pty Ltd v Shad [2010] NSWSC 484, [37] (citations omitted). 111 Chalet Nominees (1999) Pty Ltd v Murray [2012] WASC 147, [32] (Le Miere J). 112 Re Keneally (2015) 107 ACSR 172, [71]. 113 (2019) 139 ACSR 289. 114 (2019) 139 ACSR 289, [194]. 115 (2015) 293 FLR 275 (Black J). -- 29 of 40 -- 30 to the company, Mr Bezina indicated his intention not to attend the meeting for fear of contravening the court order. Mr Bezina told Mr Stojic that he would not attend and that the meeting would therefore be inquorate. The meeting was held by Mr Stojic alone and he purported to pass the resolutions. In declining to make the declarations sought by Mr Stojic, Black J stated: “Mr Johnson, who appeared for Mr Bezina, put a significantly narrower proposition, that injustice arose in the relevant circumstances because Mr Bezina had in effect been disenfranchised, because he was put in a position where his attendance at the meeting would have involved significant difficulty. This proposition seems to me to be one which has much more substantial force. The facts which I have summarised above indicate that, first, when Mr Bezina was given notice of the meeting, the resolutions that were proposed were such that, if passed in their form, both the Company and Mr Bezina personally would have been in breach of the orders made by Lindsay J. Mr Stojic did not face that difficulty, because he was not bound by those orders. …[I]t seems to me that Mr Bezina had two practical choices available to him. The first was to attend the meeting, and to decide, when he was informed what the resolution was, how to vote upon them or whether to abstain from voting. That course would have necessarily involved a decision made, with little notice, possibly without access to legal advisers, and in circumstances that a decision to vote in a particular manner might or might not have been characterised as involving the appointment of a director in contravention of the orders made by Lindsay J. The other choice available to Mr Bezina, which was the choice which he adopted, was not to attend the meeting. I accept that, as a matter of reality, it may be that Mr Bezina would not have attended the meeting in any event. … However, that does not seem to me to be the point. The difficulty which arises in the present case is that Mr Bezina was entitled to vote at the meeting, and it seems to me that the calling of a meeting, in circumstances that the resolution which was proposed was one which involved a potential contempt of court, and the late suggestion that the resolution might be varied, without identifying how it would be varied to allow Mr Bezina to assess that question, raises real difficulty. It seems to me that there is, as Mr Johnson submits, substantial injustice to Mr Bezina, in the conduct of a meeting which proceeded in his absence, after he was required to make the decision whether to attend the meeting and vote or not vote under those circumstances. That is not to say that he would not have made the same decision under circumstances which did not involve that difficulty. However, I do not think it can be said that Mr Bezina would not be exposed to substantial injustice, by the passage of the relevant resolutions in his absence, where he was confronted with a dilemma, involving issues as to potential contempt of court, in respect of his exercise of votes in respect of the resolution, and he did not attend the meeting in those circumstances.”116 116 Re Statewide Office Furniture Pty Ltd (2015) 293 FLR 275, [13]-[14]. -- 30 of 40 -- 31 [110] Clearly, there was no risk to the absent directors in the present case of being in contempt of court by attending the 4 February Board Meeting. However, the authority supports the proposition that a substantial injustice may arise if a director is deprived of an adequate opportunity to address risks associated with proposed resolutions and the meeting proceeds in their absence. A similar proposition was upheld in Re Keneally, to which Mr Coveney drew my attention during oral submissions: “Mr Sulan also submits that Ms Lam has suffered substantial injustice as she was brought into a directors’ meeting without reasonable notice in circumstances that Ms Tang and Mr Chen had been conferring with Mr Keneally for some weeks prior to his proposed appointment, and the manner in which the meeting was called meant that she did not have the opportunity to seek legal and accounting advice as to the solvency resolutions being proposed nor did she have the time or ability to avail herself of any legal right to injunct the meeting or the appointment. That submission tends to assume that Ms Lam should have been given not only longer notice of the meeting, but also notice of the subject matter of the meeting in that situation. It seems to me unlikely that such notice of the subject matter of the meeting would have been given as a matter of fact, however desirable that might have been as a matter of good corporate governance, where (as I note below) Ms Tang and Mr Chen were not obliged to give notice of the subject matter of the meeting and did not in fact do so. However, even without notice of the subject matter of the meeting, Ms Lam would have known that the meeting was likely to be directed to important issues, where negotiations to buy her out of the business had been taking place between the shareholders, and longer notice would at least have allowed her to consider whether to have an adviser present at the meeting with her and make arrangements for that to occur if she wished, as Ms Tang and Mr Chen had done in arranging for Mr Zhou to attend the meeting with them. I do not need to find that Ms Lam would have availed herself of that opportunity, since it seems to me that depriving her of it was itself sufficient to constitute substantial injustice. That injustice, which exposed Ms Lam to the risk that the company would be placed in administration without her having a proper opportunity to oppose that course, seems to me to outweigh any injustice of not validating the meeting to Ms Tang and Mr Chen, who brought about that result, and Mr Keneally, who knew or should have known the relevant facts as I noted above.”117 [111] I have already identified that, because of the lack of notice, Mr Wilson, Mr Gardiner and Ms Sharon Cowan were deprived of an adequate opportunity to properly consider and take advice on the Amended Draft Motions. It is worth noting that all directors except Mr Wilson, Mr Gardiner and Ms Sharon Cowan had been made privy to the correspondence from CEA’s auditors, Nexia, prior to the 4 February Board Meeting. Likewise, the other directors, having had several days’ notice of the 4 February Board Meeting, had ample opportunity to take further advice. In cross-examination, 117 Re Keneally (2015) 107 ACSR 172, [70] (Black J). -- 31 of 40 -- 32 Ms Luckus said that she had engaged in telephone conversations with Nexia about “the whole situation”.118 [112] The short notice meant that, had Mr Wilson, Mr Gardiner and Ms Cowan attended the meeting, they would not likely have been able to make fully informed decisions. They would have been unable to adequately address the business affecting other individuals such as Mr Shane Cowan, Mr Hatton and Ms Austin who were not members of the Board and who (in the case of Mr Hatton and Ms Austin) had no prior notice that any such business was being considered. I have already identified that the result of the 4 February Board Meeting would not necessarily have been the same if reasonable notice had been given. I need not repeat what I have already said at [85] regarding the seriousness of the Resolutions and their consequences for various members, staff and directors of CEA, including their impact on legal rights. It is also relevant to identify the reputational damage that the Resolutions exposed various individuals to. That such motions would be adopted without each director having had a reasonable opportunity to consider, take advice on, and address them at the meeting is plainly unjust to the individuals affected by those motions. [113] For these reasons, in my view, the lack of reasonable notice was productive of an injustice to members, staff and directors of CEA that outweighs any prejudice that will be suffered if the Resolutions are not given effect to. The consequence is that s 1322(2) of the Corporations Act does not operate in the present case to save the Resolutions from invalidity. This conclusion on substantial injustice also prevents the Court from granting the relief sought by the respondents under s 1322(4)(a).119 Severance [114] In the alternative to their primary case, which invites the Court to find that the Resolutions are valid in their entirety, the respondents propound an alternative case that Resolution 2, alone, should be saved from invalidity. That is, the respondents seek to have the Court sever all the Resolutions apart from the Resolution to postpone the 10 February AGM. Mr de Jersey’s submission is that, if Resolution 2 is severed, then the test of substantial injustice should be applied in the context of Resolution 2 only, and that such application would lead me to find that no substantial injustice arises. [115] The Corporations Act is silent on the severability of board resolutions. The respondents direct me to four authorities which, on their submission, establish that Resolution 2 can be severed from the others. The first is Simon v HPM Industries Pty Ltd.120 The respondents rely on the following passage: “… if a number of resolutions are set out in the notice of meeting as separate resolutions, and are passed separately at the meeting, the presumption will be that they are intended to operate independently of the passage or validity of the other resolutions; whereas if they are set out in the notice of meeting as in effect a single resolution, and are passed at the meeting as a single resolution, then the presumption will be that they were intended to operate only as a whole.”121 118 T 2-70 to T 2-71. 119 Corporations Act 2001 (Cth) s 1322(6)(c). 120 (1989) 15 ACLR 427. 121 Simon v HPM Industries Pty Ltd (1989) 15 ACLR 427, 439 (Hodgson J). -- 32 of 40 -- 33 [116] Hodgson J (as his Honour then was) also opined that the test for severability of resolutions is stricter than that of contract provisions.122 His Honour was dealing with resolutions passed at a members’ meeting, but his Honour’s reasoning was applied in the context of a board meeting in Hawcroft v Jamieson.123 Gleeson JA observed that “there is no reason why a similar approach should not be taken to the severability of a resolution of directors which contains an invalid part”.124 [117] Mr de Jersey also relies on what Derrington J of this Court said in Amalgamated Pest Control Pty Ltd v McCarron,125 a case dealing with the severability of an invalid part of an article in a company’s articles of association: “The more serious test for severability is whether what remains is radically or substantially different from what was intended so as to lead to the conclusion that the severed balance would not have been acceptable because the article was intended to be a composite whole. … However, ex hypothesi, the omission of the invalid part must constitute some change of the article so that the mere fact of change itself cannot be an obstacle to severability.”126 [118] Lastly, Mr de Jersey points to a 1908 case, Thomson v Henderson’s Transvaal Estates Ltd,127 as an example of where the English Court of Appeal held that only one of five motions carried at a company meeting was valid. Ultimately, Mr de Jersey submits that the question is resolved by reference to whether the motions were put separately and whether they can be carried into effect separately.128 [119] The Resolutions are annexed to Mr Shepley’s affidavit129 and I have reproduced them at [59]. Each Resolution is set out in numbered paragraphs and, after the final Resolution, the words “Moved: Pat Purcell, Seconded: Brian Daley, Carried Unanimously” appear. On the face of the document, it appears that the Resolutions were put to the meeting as a composite whole and carried as a composite whole. That interpretation is consistent with Mr Daley’s cross-examination: “And the way that meeting over the phone was conducted, as I understand it, was Mr Shepley didn’t need to read each of the earlier motions because you all – you all had those?---We did. Yes. And it was only to introduce the later motions that there was some further discussion?---Yes. Yes. And – and at the end of those – that discussion, it was proposed by Mr Purcell to move all of those motions at once?---Yes. And you seconded that process?---We did. And they were all moved together?---Yep.”130 122 Simon v HPM Industries Pty Ltd (1989) 15 ACLR 427, 440. 123 [2017] NSWSC 1478, [143]. 124 Hawcroft v Jamieson [2017] NSWSC 1478, [145]. 125 [1995] 1 Qd R 583. 126 Amalgamated Pest Control Pty Ltd v McCarron [1995] 1 Qd R 583, 586 (citations omitted). 127 [1908] 1 Ch 765. 128 Respondents’ Submissions, paragraph 124. 129 Affidavit of J S Shepley sworn 19 April 2021 (CD-25), exh JSS-24. 130 T 3-18, ln 11-23. -- 33 of 40 -- 34 [120] Mr Daley’s evidence is not contradicted by any of the other directors who attended the meeting (although it was not put to them in cross-examination that the Resolutions had been voted on as a composite whole). On the other hand, Mr de Jersey submits that the Resolutions were voted on separately.131 The evidence does not support that submission. Neither in their affidavits nor in cross-examination did Mr Shepley, Ms Luckus, Mr Casey or Mr Daley give evidence that the motions were voted on separately. Whilst Amended Draft Motion 11, which proposed to install Ms Sharon Cowan as acting general manager, was not ultimately carried at the 4 February Board Meeting, it does not automatically result that the motions were voted on separately. [121] The evidence of the directors who attended the meeting was as follows. The Amended Draft Motions were discussed, and the common view of Mr Daley, Mr Purcell, Ms Luckus and Mr Casey was that, rather than install Ms Cowan as acting general manager, Mr Shepley should be appointed as interim administrator. Following that, three additional resolutions intended to give effect to Mr Shepley’s appointment were discussed. Thereafter, Mr Purcell moved the Resolutions as a whole, seconded by Mr Daley, and they were carried unanimously. Therefore, on the basis of the passage from Simon v HPM Industries Pty Ltd quoted above, the presumption is that the Resolutions were intended to operate only as a whole. For the following reasons, I am not persuaded that the respondents have discharged the onus of rebutting that presumption. [122] The test propounded in Amalgamated Pest Control is one of intention. Mr Coveney submits that the intention of the directors in carrying these Resolutions was to defeat any attempt to challenge the existing Board, and that they operate collectively to that end.132 Mr de Jersey submits that the Resolutions should be understood as being divisible four ways: (a) the first topic, which is Resolution 1, is the “Hatton/Gardiner” issue; (b) the second topic, which is Resolutions 2 and 3, is the adjournment of the AGM and the appointment of a returning officer; (c) the third topic, which is Resolutions 4 to 10 and 12 to 15, deals with the late disclosure of nominations and the consequences thereof; and (d) the fourth topic, which is Resolution 11, is acknowledging Mr Shane Cowan’s resignation.133 [123] Whilst I accept that the Resolutions can be understood to fit into different topics on a factual level, that is not what Amalgamated Pest Control is directed at. The question is whether, by severing the Resolutions as sought by the respondents, something “radically or substantially different from what was intended” results. At paragraph 46 of his affidavit, Mr Shepley gives evidence as to his reasons for proposing the Draft Motions.134 The reason for Draft Motion 1 was that “the nominations of Mr Hatton and Mr Gardiner were submitted after the due date of 13 October 2020, and were not valid nominations for the CEA Ltd Board”. Draft Motions 2 and 3, the motions to adjourn the 10 February AGM and appoint an independent returning officer, were proposed for several reasons, according to Mr Shepley. Firstly, he was 131 Respondents’ Submissions, paragraph 125(b). 132 T 3-90, ln 12-14. 133 T 3-74, ln 1-25. 134 The Draft Motions are set out at [41] above. -- 34 of 40 -- 35 concerned with the ability of the Board to run a contested election in circumstances where it had no experience in running such elections, where senior CEA staff had nominated for positions and where he suspected that Mr Gardiner, Mr Shane Cowan, Ms Sharon Cowan and Mr Wilson had encouraged other staff members to nominate for positions. Secondly, he was concerned that the AGM may be perceived by external funding bodies on which CEA relied not to be fair or transparent. Thirdly, he was concerned that there was a real risk of the Board not remaining an independent group because most of the people who had nominated were family members or close associates. In cross-examination, Mr Shepley’s evidence was that Draft Motion 2 was a “practical thing to put into effect motion 3”.135 [124] As to Draft Motions 4 to 6, alleging a “deceit” and compelling Ms Austin, Mr Shane Cowan and Ms Sharon Cowan to explain why board nominations had not been disclosed to Mr Shepley as soon as practicable, he states that these matters ought to have been brought to the Board’s attention at an early stage because they had a direct impact on the election to be conducted at the AGM. Draft Motions 7 to 10, directing Ms Austin, Mr Cowan, Ms Cowan and Mr Wilson to provide all passwords, login information and access details to CEA’s IT manager and its auditor, Nexia, were proposed because Mr Shepley wanted to ensure that the IT system and financial control of CEA was not compromised in the interim period before the AGM could be held. Despite this evidence in his affidavit, Mr Shepley said in cross-examination that Draft Motions 4 to 10 were “not connected with the AGM at all”.136 [125] As to Resolutions 12 to 15, which were not the subject of any draft or proposed motions prior to the 4 February Board Meeting, Mr Shepley’s evidence was that they were “predominantly, in conjunction with the auditors. We were relying upon what our auditors had suggested to us in their previous correspondence”.137 [126] I accept the evidence of the directors who attended the meeting to the extent that one of the purposes for convening the 4 February Board Meeting was to enable proper measures to be put in place for the contested election at the forthcoming AGM. The evidence was clear that no such contested election had previously occurred at CEA since at least 2000 and that special arrangements had not been put in place. However, when considered in the broader context of Mr Shepley’s course of conduct before and after the 4 February Board Meeting, it is evident that postponing the AGM and appointing a returning officer were only one aspect of a broader plan to fortify control of CEA and avoid losing at the election. [127] Resolution 1 has the effect of permanently preventing both Mr Hatton and Mr Gardiner from contesting the election, thereby reducing the number of nominees to 11. Resolution 11 has the effect of terminating Mr Shane Cowan’s employment as the General Manager of CEA. The remaining Resolutions can be understood as a means to, at least temporarily, maintain the status quo on the Board by postponing the AGM and transferring effective control of CEA to Mr Shepley and his supporters on the Board. Mr Shepley had already attempted to persuade Ms Langford to withdraw her nomination for the Board, threatening “vicious litigation”.138 This attempt having failed, additional time was required by Mr Shepley to find a means to 135 T 3-53, ln 33-34. 136 T 3-53, ln 43-44. 137 T 3-55, ln 1-3. 138 See [36] above. -- 35 of 40 -- 36 ensure that, when the AGM eventually did occur, his election was not threatened. In cross-examination, Mr Daley explained how he felt when he found out about the new nominations for the Board: “This was basically, I felt, underhand. … Yes. And what felt underhanded about it to you?---The nominations that were selected. … we had a concept that it’s time for some of us to move on, including me. And we were looking at putting younger people on the board and preferably some more females, and these nominations weren’t younger people. And just – it wasn’t the idea of the board. … … But when it didn’t meet your preferred view of the future is that when you took exception to the nominations?---I would say, yes… that we had a meeting and discussed this as a board. We needed to… look at the future, and these are the people that should come on the board. Right?---And that was going to be [the] question, why are we doing it? This is… these, I feel, are the wrong people to put on the board.”139 [128] When considered in this context, isolating Resolution 2 from the remaining Resolutions would produce a substantially different result. I accept Mr Coveney’s submission that the Resolutions were intended to operate collectively to stifle opposition to the Board as it existed on 4 February 2021. The Resolutions should not be severed and the respondents’ amended cross-application must fail. [129] In disposing of the respondents’ amended cross-application under s 1322(4)(a), an issue arises as to whether it is sufficient simply to order that the cross-application be dismissed or whether the Court should make a further order under s 1322(2) declaring that the Resolutions are invalid. The issue arises because there is an apparent tension between s 1322(2) and s 1322(4)(a). The effect of dismissing the cross-application is that the Court refuses to declare that the Resolutions are not invalid. Section 1322(2), however, provides that a proceeding is not invalidated because of any procedural irregularity unless two conjunctive matters occur. First, the Court must be of the opinion that the irregularity has caused or may cause substantial injustice and, secondly, the Court by order declares the proceeding to be invalid. Although the applicant has not sought a declaration that the Resolutions are invalid, given the tension between s 1322(2) and s 1322(4)(a), the issue should be placed beyond doubt by the Court making the declaration contemplated by s 1322(2). CEA’s amended originating application [130] Having determined that the respondents’ cross-application must fail, and that the Resolutions are invalid pursuant to s 1322(2) of the Corporations Act, it falls to consider CEA’s amended originating application. Beyond their primary contention 139 T 3-7, ln 42 to T 3-8, ln 17. -- 36 of 40 -- 37 that the 10 February AGM is of no effect on the basis that it was postponed pursuant to Resolution 2, the respondents do not challenge its validity. [131] The primary relief sought by CEA is a declaration to the effect that each of the nine persons elected at the 10 February AGM comprises the duly elected CEA Board. However, the respondents submit that a declaration to that effect ought not be made in relation to Mr Casey because he did not consent to being appointed as a director of CEA at the 10 February AGM. The election of Mr Casey [132] In his affidavit,140 Mr Casey relevantly swears as follows: (a) the first time that he was advised that an AGM had been held on 10 February 2021 was by an email from Mr Shane Cowan at 5.01pm on 11 February 2021; (b) he did not agree to be nominated for or elected as a director at an AGM held on 10 February 2021; and (c) he does not think the appointment of directors made at an AGM on 10 February 2021 was valid and he expressed that opinion to Shane Cowan in emails dated 11 February 2021 and 23 March 2021. [133] In cross-examination, Mr Casey accepted that he submitted a nomination for election to the Board in August 2020. He also stated that it remained his view that, as at the date of his cross-examination, the CEA Board was that which was elected in 2019.141 When asked by Mr Coveney whether he intended to continue as a director if CEA was successful in the proceeding, Mr Casey stated that: “My position has been consistent. If – depending which way this matter goes … I’d make a decision at that time based upon whatever I had before me. … And I’d make an independent decision as to whether or not – yeah, I would continue or what my decision would be, yes.”142 [134] The respondents submit that Mr Casey’s written and oral evidence is consistent and demonstrates that he did not agree to be nominated and elected as a director at the 10 February AGM. They invite the Court to infer from his cross-examination that he will resign as a director if CEA succeeds in the proceeding.143 CEA rejects that such an inference should be drawn,144 and contends that Mr Casey validly nominated for election to the CEA Board and that such nomination amounts to consent.145 [135] Section 201D(1) of the Corporations Act provides: “A company contravenes this subsection if a person does not give the company a signed consent to act as a director of the company before being appointed.” 140 Affidavit of P B Casey sworn 22 April 2021, CD-27. 141 T 2-95, ln 43-45. 142 T 2-96, ln 7-20. 143 Respondents’ Submissions, paragraph 91; T 3-84, ln 1-10. 144 T3-86, ln 33-43. 145 Applicant’s Submissions, paragraph 92B. -- 37 of 40 -- 38 [136] However, failure to comply with s 201D(1) does not invalidate an otherwise valid appointment of a director.146 In Hedges v NSW Harness Racing Club Ltd,147 McLelland J stated that the “status of director of a company, which involves significant statutory and fiduciary obligations, cannot be imposed on any person without his consent”. Consent to be appointed as a director need not be in writing at general law.148 It follows that a person may withdraw their consent to be appointed other than by writing. [137] When Mr Casey signed the director nomination form on 30 August 2020, it was expected that the AGM would occur in October 2020. However, it was subsequently re-scheduled for 10 February 2021. The list of nominations Ms Austin sent to Mr Shepley on 25 January 2021 included Mr Casey’s nomination. There is no evidence before the Court that Mr Casey withdrew his nomination between 25 January 2021 and the 4 February Board Meeting. As at the commencement of the 4 February Board Meeting, Mr Casey’s consent to being appointed as a director at the 10 February AGM remained on foot. [138] However, that consent was impliedly withdrawn by the passing of Resolution 2 which was to postpone the 10 February AGM and which Mr Casey voted in favour of. His absence at the 10 February AGM is consistent with his having withdrawn his consent. I accept his evidence that, at all times since the 4 February Board Meeting, he did not agree to be appointed to the Board at the 10 February AGM. This is not a case analogous to Savoy v Insurance and Care NSW149 where there was actual proven consent to be appointed as a director in the absence of a signed consent under s 201D.150 Indeed, in oral submissions, Mr Coveney conceded that: “… if [Mr Casey’s] evidence is accepted, that he intended … at the meeting on the 4th … for the AGM to be postponed, and thereafter, had no interest in being elected at the meeting on the 11th, then what would have occurred, in fact, is the passage of an invalid resolution appointing him as a director.”151 [139] For these reasons, Mr Casey’s election as a director at the 10 February AGM was invalid.152 The purported resolution appointing him as a director is a substantive irregularity which cannot be remedied by order under s 1322.153 Therefore, the Court cannot make a declaration that Mr Casey was duly elected to the Board. [140] The respondents identify a further difficulty in “unscrambling the egg”, in the sense that a question arises as to how the votes cast for Mr Casey ought to be dealt with given the invalidity of his election. However, CEA submits that, because the election was conducted on a ‘first-past-the-post’ basis, and no votes were received by any of 146 See, eg, Kocic v Deputy Commissioner of Taxation (2011) 85 ATR 489, [35] (Gzell J; Beazley JA and Handley AJA agreeing); Savoy v Insurance and Care NSW (2020) 142 ACSR 200, [48]-[55] (Basten J); Collins v Zernike Australia Pty Ltd (2006) 198 FLR 126, [28] (Le Miere J). 147 (1991) 5 ACSR 291, 293. 148 Knight v Bulic (1994) 13 ACSR 553, 560 (Hayne J). 149 (2020) 142 ACSR 200. 150 (2020) 142 ACSR 200, [55] (Basten J). Cf, Re Whitsunday Clean Sands Pty Ltd [2017] NSWSC 1199 (Black J). 151 T 3-87, ln 9-13. 152 Re Whitsunday Clean Sands Pty Ltd [2017] NSWSC 1199, [15] (Black J). 153 Hedges v NSW Harness Racing Club Ltd (1991) 5 ACSR 291, 295 (McLelland J); Re Whitsunday Clean Sands Pty Ltd [2017] NSWSC 1199, [16] (Black J). -- 38 of 40 -- 39 the respondents,154 the result is that no candidates missed out on election by reason of votes being cast for Mr Casey. The results of the election, which I have already described at [66] above, are set out in full in the following table:155 Candidate Votes For Votes Against Abstained Ian Hall 28 0 1 Vicki Bailey 27 0 1 Shane Cowan 28 0 1 Sharon Cowan 27 0 1 Jason Gardiner 27 0 1 John Shepley 0 28 2 Patrick Purcell 0 25 4 Paul Casey 26 0 3 Brian Daley 0 25 5 Jodie Luckus 0 23 6 Alice Langford 28 0 2 David Hatton 28 0 2 Frank Wilson 29 0 1 [141] CEA’s constitution requires a minimum of five directors. Aside from Mr Casey, eight directors were elected. For these reasons, the difficulty identified by the respondents does not arise. Disposition [142] The following orders should be made: 1. Pursuant to s 10 of the Civil Proceedings Act 2011 (Qld), the Court declares that the following persons were elected as a director of Career Employment Australia Ltd at the annual general meeting of Career Employment Australia Ltd on 10 February 2021: (a) Francis Thomas Wilson; (b) Ian Douglas Hall; (c) Vicki Bailey; (d) Shane Gilmore Cowan; (e) Sharon Leigh Frances Cowan; (f) Jason Michael Gardiner; (g) Alice Mary Langford; and (h) David Anthony Hatton OAM. 2. Pursuant to s 10 of the Civil Proceedings Act 2011 (Qld), the Court declares that each of the respondents and Paul Casey ceased to be a director of Career Employment Australia Ltd upon the election of the directors in paragraph 1 of this order. 154 See Exhibit 2, tab 11. 155 See Exhibit 2, tab 11. -- 39 of 40 -- 40 3. Pursuant to s 1322(2) of the Corporations Act 2001 (Cth), the Court declares that the resolutions carried by the board of directors of Career Employment Australia Ltd on 4 February 2021 are invalid. 4. The respondents’ amended cross-application is dismissed. 5. I will hear the parties as to costs. -- 40 of 40 --