In the matter of National Roads and Motorists' Association Ltd [2003] FCAFC 206

FEDERAL COURT OF AUSTRALIA

In the matter of National Roads and Motorists' Association Ltd

[2003] FCAFC 206 CORPORATIONS – appeal from failure to grant relief under s 1322(4) of the Corporations Act 2001 (Cth) – whether to extend time for voting for election of directors contrary to constitution of mutual organisation – where new constitution to be proposed during election – where possible potential cost saving – where no contradictor – no miscarriage of discretion Corporations Act 2001 (Cth) s 1322 House v The King (1936) 55 CLR 499 followed Norbis v Norbis (1985-1986) 161 CLR 513 cited IN THE MATTER OF NATIONAL ROADS AND MOTORISTS' ASSOCIATION LIMITED ACN 000 010 506 N 951 of 2003 RYAN, FINKELSTEIN and GYLES JJ SYDNEY 27 AUGUST 2003

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 951 of 2003

On Appeal from a Single Judge of the Federal Court of Australia

IN THE MATTER OF NATIONAL ROADS AND MOTORISTS' ASSOCIATION LIMITED ACN 000 010 506

NATIONAL ROADS AND MOTORISTS' ASSOCIATION LIMITED ACN 000 010 506

Appellant

JUDGES: RYAN, FINKELSTEIN and GYLES JJ

DATE: 27 AUGUST 2003

PLACE: SYDNEY

REASONS FOR JUDGMENT RYAN and GYLES JJ: 1 This is an application for leave to appeal by National Roads And Motorists' Association Limited ("NRMA") from a refusal by Jacobson J to exercise the discretion provided for by s 1322(4)(d) of the Corporations Act 2001 (Cth) ("the Act") (In the matter of National Roads and Motorists' Association Limited [2003] FCA 842). The precise order sought was: 'Pursuant to sub-section 1322(4)(d) of the Corporations Act 2001, that the time for the fixing of the closing of voting, pursuant to Rule 67 of the Plaintiff's constitution be extended to on or before 28 November 2003, being a time after the date fixed for the holding of the Plaintiff's 2003 Annual General Meeting.' 2 There is a question as to whether leave to appeal is necessary as it is arguable that the primary decision is final. In any event, full argument was heard as on the appeal. At the conclusion of argument, orders were made unanimously granting leave to appeal if and insofar as leave was necessary and (by majority) dismissing the appeal, with reasons to be delivered later. These are those reasons. 3 The application to Jacobson J was made ex parte with no evidence that notice of it was given to any party. One of the candidates nominated for election learned of this appeal and complains of the procedure adopted. There is a question as to whether a proceeding of this type which affects members' rights in relation to voting at an election for which nominations have already been called should be determined in the absence of a proper contradictor. The same question applies to this appeal. We shall return to those questions in due course. 4 The Constitution of NRMA ("the Constitution") provides for an election for half of the Board of Directors ("the Board") to take place this calendar year. Rule 67 provides as follows: 'If the number of candidates is greater than the number required to be elected an election shall be conducted with the voting at that election to close on a date and at a time to be fixed in each odd-numbered year by the Board of Directors, such date being not later than one day before the date fixed for the holding of the annual general meeting. The time and date for the close of the election shall be set out in the election material prepared for the relevant election period.' 5 On 26 June 2003 NRMA published a notice calling for nominations for election as a director, which could be lodged from Tuesday 1 July 2003 until 5 pm on Thursday 31 July 2003. The notice said that if a member wished to receive a nomination form and an accompanying information package, it was available from the office of the appellant. That information package included a copy of the election rules and protocols. The indicative election timetable which was included in that material was as follows: 'Nominations open 1 July 2003 Group Registration opens 1 July 2003 Nominee Information Day 23 July 2003 Nominations close 31 July 2003 at 5.00 pm Group Registration closes 31 July 2003 at 5.00 pm Candidate Information Day 28 August 2003 Membership Eligibility Date (ie Register cut-off) 9 October 2003 Ballot opens 15 October 2003 Internet Voting Commences 15 October 2003 at 9.00 am Ballot closes 21 November 2003 at 5.00 pm Ballot result 28 November 2003 (approximately)'