FEDERAL COURT OF AUSTRALIA Online Advantage Limited, in the matter of Online Advantage Limited v RDS Nominees No 1 Pty Ltd [2002] FCA 1118 CORPORATIONS LAW – general meeting – adjournment of meeting – validity of adjournment – validity of business transacted Corporations Act 2001 (Cth) s 1322(4) ONLINE ADVANTAGE LIMITED (IN THE MATTER OF ONLINE ADVANTAGE LIMITED) v RDS NOMINEES NO 1 PTY LTD & ORS N 3031 of 2002 HELY J 27 JUNE 2002 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 3031 OF 2002 BETWEEN: ONLINE ADVANTAGE LIMITED (IN THE MATTER OF ONLINE ADVANTAGE LIMITED) APPLICANT AND: RDS NOMINEES NO 1 PTY LTD FIRST RESPONDENT RIVKIN INVESTMENTS PTY LTD SECOND RESPONDENT NICOLE McWILLIAM THIRD RESPONDENT LOGAN PARTNERS CORPORATION PTY LTD FOURTH RESPONDENT JOHN ROBERT LEE FIFTH RESPONDENT JUDGE: HELY J DATE OF ORDER: 27 JUNE 2002 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. It be declared that neither the adjournment of the general meeting of the company from 11 am on 5 June 2002 to 2.30 pm on that day, and/or any business transacted at the 2.30 pm meeting, shall be invalidated by reason of the failure of the chairman of the 11 am meeting to secure the consent of members present at the 11 am meeting to that adjournment. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 3031 OF 2002 BETWEEN: ONLINE ADVANTAGE LIMITED (IN THE MATTER OF ONLINE ADVANTAGE LIMITED) APPLICANT AND: RDS NOMINEES NO 1 PTY LTD FIRST RESPONDENT RIVKIN INVESTMENTS PTY LTD SECOND RESPONDENT NICOLE McWILLIAM THIRD RESPONDENT LOGAN PARTNERS CORPORATION PTY LTD FOURTH RESPONDENT JOHN ROBERT LEE FIFTH RESPONDENT JUDGE: HELY J DATE: 27 JUNE 2002 PLACE: SYDNEY REASONS FOR JUDGMENT 1 A shareholder's meeting of Online Advantage Limited ("the company") was convened to be held at 11 am on 5 June 2002 to consider a special resolution for the winding up of the company. On 31 May 2002 the company received a notice from McWilliam Nominees Pty Limited of an intention to make a proportional takeover offer for shares in the company. On 3 June 2002 101.5 million shares in the company were traded shortly after 11 am. Eleven am on 3 June 2002 was the time for ascertaining who was a member of the company for the purposes of the shareholder's meeting to be held on 5 June 2002; see article 16.1(b) of the constitution of the company. 2 At the 11 am meeting on 5 June 2002 a resolution for a five week adjournment of the meeting was lost on a show of hands. On legal advice, the chairman adjourned the meeting to 2.30 pm on that date. At the resumed meeting a motion to further adjourn the meeting to 9 July 2002 was carried by an overwhelming majority. Mr Bathurst QC has advised that the chairman of the meeting did not have the power to adjourn the meeting to 2.30 pm on 5 June 2002 against the wishes of the majority of the persons present at the 11 am meeting. Prima facie that appears to be the correct advice and I shall proceed upon that assumption. 3 Mr Bathurst also advised that in order to avoid any doubt as to the validity of any business to be conducted at the adjourned meeting to be held on 9 July 2002, an application should be made under s 1322 subs (4) of the Corporations Act 2001 (Cth) ("the Corporations Act") for an order validating the action of the chairman in adjourning the original meeting from 11 am on 5 June 2002 to 2.30 pm on that date. 4 All shareholders of the company were informed by a circular of 7 June 2002 that the company proposed to apply to the Court for orders validating the adjournment of the meeting to 2.30 pm on 5 June 2002. The parties by whom or on whose behalf votes were cast at the 11 am meeting against the adjournment application have been joined as respondents to the amended application and no one has appeared to oppose the relief sought, nor has the company received any notice of opposition to the validation application. Those shareholders who have been joined as respondents have signified either their consent or lack of objection to the making of the orders sought. 5 I am satisfied that the chairman of the 11 am meeting acted honestly in adjourning it until 2.30 pm on that day, and that it is just and equitable that the order sought should be made. I am also satisfied that no substantial injustice has been, or is likely to be, caused to any person by the making of the order which I propose. 6 Pursuant to s 1322(4) of the Corporations Act, I make an order declaring that neither the adjournment of the general meeting of the company from 11 am on 5 June 2002 to 2.30 pm on that day, and/or any business transacted at the 2.30 pm meeting, shall be invalidated by reason of the failure of the chairman of the 11 am meeting to secure the consent of members present at the 11 am meeting to that adjournment. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely. Associate: Dated: 10 September 2002 Counsel for the Applicant: Mr P Whitford Solicitor for the Applicant: Clayton Utz Solicitor for the 1st, 2nd and 3rd Respondents: Mr B Mc William Date of Hearing: 27 June 2002 Date of Judgment: 27 June 2002