FEDERAL COURT OF AUSTRALIA Mortimer v Proto Resources & Investments Ltd, in the matter of Proto Resources & Investments Ltd [2015] FCA 654 Citation: Mortimer v Proto Resources & Investments Ltd, in the matter of Proto Resources & Investments Ltd [2015] FCA 654 Parties: ANDREW KENNETH BRUCE MORTIMER, LIA MELISSA DARBY, ANDREW NORMAN HEAP and BENJAMIN HEATH COOPER v PROTO RESOURCES & INVESTMENTS LTD (ACN 108 507 517), STEVEN ANDREW SHILKIN, PHILLIP SIU, SCOTT MITCHELL ROWE and SIMON MACFARLANE File number(s): NSD 651 of 2015 Judge(s): GLEESON J Date of judgment: 2 July 2015 Catchwords: CORPORATIONS – whether notice purporting to convene general meeting of company valid – where agenda for meeting includes proposed resolutions that plaintiff directors be "dismissed" as directors – whether meeting called and arranged in compliance with Corporations Act 2001 (Cth), s 249D – whether meeting convened pursuant to notice would be invalid – no general meeting called in accordance with requirements of s 249D Legislation: Corporations Act 2001 (Cth), ss 180, 183, 203D, 249C, 249D, 249E, 249L, 249HA, 1322 Corporations Regulations 2001 (Cth), r 7.11.37 Federal Court of Australia Act 1976 (Cth), ss 21, 23 Cases cited: Jenkin v Pharmaceutical Society of Great Britain [1921] 1 Ch 392 National Roads & Motorists' Association v Parker (1986) 6 NSWLR 517 Scottish & Colonial Ltd v Australian Power & Gas Co Ltd [2007] NSWSC 1266; (2007) 65 ACSR 313 Taiqi Investments (Aust) Pty Ltd v Winlyn Developments Pty Ltd [2011] NSWSC 1218; (2011) 86 ACSR 197 Turner v Berner [1978] 1 NSWLR 66 Young v Sal Mar Enterprises Lot Pty Ltd [2005] FCA 1853 Date of hearing: 9 June 2015 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 73 Counsel for the Plaintiffs: Mr J Duncan and Mr J Mack Solicitor for the Plaintiffs: Eakin McCaffery Cox Counsel for the First Defendant: The First Defendant did not appear Counsel for the Second, Third, Fourth and Fifth Defendants: Ms B Ludlow IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 651 of 2015 IN THE MATTER OF PROTO RESOURCES & INVESTMENTS LTD BETWEEN: ANDREW KENNETH BRUCE MORTIMER First Plaintiff LIA MELISSA DARBY Second Plaintiff ANDREW NORMAN HEAP Third Plaintiff BENJAMIN HEATH COOPER Fourth Plaintiff AND: PROTO RESOURCES & INVESTMENTS LTD (ACN 108 507 517) First Defendant STEVEN ANDREW SHILKIN Second Defendant PHILLIP SIU Third Defendant SCOTT MITCHELL ROWE Fourth Defendant SIMON MACFARLANE Fifth Defendant JUDGE: GLEESON J DATE OF ORDER: 2 JULY 2015 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Proto Resources & Investments Ltd (ACN 108 507 517) be restrained permanently from proceeding with any business at a general meeting scheduled to be held on 10 June 2015 or any other general meeting purportedly convened in accordance with the "Notice of General Meeting Pursuant to Section 249D" of the Corporations Act 2001 (Cth), being exhibit "AM5" to the affidavit of Andrew Mortimer sworn 4 June 2015. 2. The second to fifth defendants pay the costs of the proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 651 of 2015 IN THE MATTER OF PROTO RESOURCES & INVESTMENTS LTD BETWEEN: ANDREW KENNETH BRUCE MORTIMER First Plaintiff LIA MELISSA DARBY Second Plaintiff ANDREW NORMAN HEAP Third Plaintiff BENJAMIN HEATH COOPER Fourth Plaintiff AND: PROTO RESOURCES & INVESTMENTS LTD (ACN 108 507 517) First Defendant STEVEN ANDREW SHILKIN Second Defendant PHILLIP SIU Third Defendant SCOTT MITCHELL ROWE Fourth Defendant SIMON MACFARLANE Fifth Defendant JUDGE: GLEESON J DATE: 2 JULY 2015 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The plaintiffs seek a declaration that the Notice of General Meeting of the first defendant, Proto Resources & Investments Ltd ("Proto" or "the company") purporting to convene a general meeting of the company at 11 am on 10 June 2015 ("notice of general meeting") is invalid and of no force and effect; and, secondly, an order that Proto by itself, its servants and agents be restrained from convening, holding or arranging any general meeting of the company pursuant to the notice of general meeting. 2 The plaintiffs are currently directors of Proto. The agenda for the meeting includes proposed resolutions that each of the plaintiffs be "dismissed" as a director of the company. 3 On 5 June 2015, the plaintiffs approached the duty judge and obtained orders ex parte for service by email of the amended originating process and supporting affidavits. Her Honour listed the proceeding for an urgent hearing before me on 9 June 2015 at 11 am. On 9 June 2015, the second to fifth defendants were represented by Ms Ludlow of counsel. Ms Ludlow stated that she was prepared to defend the plaintiffs' claim for final relief in accordance with paragraphs 4 and 5 of the amended originating application, being the relief identified in paragraph 1 above. 4 At the conclusion of the hearing, I reserved my decision but gave interim relief, upon the plaintiffs by their counsel giving the usual undertaking as to damages, restraining the company until further order from proceeding with any business at a general meeting scheduled to be held on 10 June 2015 or any other general meeting purportedly convened in accordance with the notice of general meeting. Background facts Australian Stock Exchange listing 5 Proto is a publicly listed company which, according to the first plaintiff ("Mr Mortimer") undertakes the business activities of the pegging, exploration, trade and investment in mineral tenements together with investments in other entities which undertake similar business activities. 6 The company was listed on the Australian Stock Exchange ("ASX") on 29 November 2006. 7 As at July 2014, there were over 1,800 shareholders in the company. 8 Proto's securities have been suspended from official quotation since 13 June 2014 when the company was placed into voluntary administrationby a secured creditor, White Oak Ridge Capital, LLC ("White Oak"). 9 By letter dated 15 May 2015, the ASX informed the fourth plaintiff ("Mr Cooper"), who is the company secretary of Proto, that the company's shares would remain suspended from official quotation until the company had taken certain steps, including satisfying the ASX that the board of the company was no longer deadlocked and was able to function as the board of a listed entity ought to function. 10 By letter dated 27 May 2015, Mr Cooper informed the ASX that Proto had received a request for a notice of general meeting under s 249D of the Corporations Act 2001 (Cth) ("Act"). Deed of Company Arrangement 11 According to the administrators' report dated 17 July 2014, White Oak advanced funds of $575,000 to the company on 26 March 2013, pursuant to a convertible securities agreement, in consideration for a convertible note with a face value of $825,000. 12 The administrators' report states that White Oak submitted a claim in the administration in the amount of $560,428.04 comprising: Principal convertible security amount owing; Interest accrued; Legal costs incurred; and Reimbursement under contractual indemnity. 13 On 20 August 2014, White Oak assigned its interests in the company, including convertible securities and security interests, to Inosite Ltd ("Inosite"). The second defendant ("Mr Shilkin") is a director of Inosite. According to Mr Shilkin, Inosite purchased the company's secured debt for around $860,000 and, as a result of this purchase, Inosite is now owed over $1.3 million by the company. 14 On 21 August 2014, three entities including Inosite, Tianjin Tai Jiang International Trade Co (Australia) Pty Ltd ("Tianjin") and Superstructure International Operations Group Pty Ltd entered into a joint venture agreement for the purpose of presenting a deed of company arrangement ("DOCA") to the administrators. 15 At the second creditors' meeting of the company, creditors resolved that the DOCA be executed by the company. 16 Prior to the execution of the DOCA on 12 September 2014, the fourth plaintiff ("Mr Cooper"), Mr Shilkin and the third and fourth defendants ("Mr Siu" and "Mr Rowe" respectively) were appointed as directors of Proto by the administrators. 17 Although an ASIC search did not identify the fifth defendant ("Mr MacFarlane") as a director of the company, all parties agree that Mr MacFarlane was appointed as a director in late September or late October 2014. 18 On about 25 November 2014, Inosite served upon the company a conversion notice under the convertible securities agreement assigned to it by White Oak purporting to have part of its convertible security converted to 775,000,000 shares in the company. The plaintiffs disputed the legitimacy of that action. For its part, Inosite has demanded that the company convert the shares. November 2014: Mr Shilkin's call for plaintiffs' resignations 19 On 26 November 2014, Mr Shilkin sent an email to the board calling for the plaintiffs' resignations. 20 The DOCA was fully effectuated on 22 January 2015 and the deed administrators retired on that day. March 2015: Mr Wells' request for convening of general meeting 21 On 17 March 2015, Mark Wells, a shareholder in the company, wrote to Mr Cooper, expressing concern about the continuing suspension of Proto's shares and asking questions about his shareholding. After correspondence between Mr Wells and Mr Cooper, on 24 March 2015, Mr Wells requested that the directors call a meeting pursuant to s 249D of the Corporations Act. 4 May 2015: Conversion notice 22 According to Mr MacFarlane, he became aware on about 3 May 2015 that Inosite intended to issue a conversion notice to convert its debt into shares in the company. He discussed the matter with Mr Siu on 5 May 2015. 23 There is in evidence a conversion notice dated 4 May 2015 addressed to the company which is expressed to be a conversion of part of Inosite's convertible security in the sum of $890,000. Mr Mortimer has disputed the legality of this second conversion notice. 14 May 2015: requisition notice and notice of general meeting 24 On 14 May 2015, Mr MacFarlane sent an email to the plaintiffs, Mr Siu, and Mr Rowe, attaching a copy of a document, which he said the company had received that day, requesting that a general meeting be held pursuant to s 249D. 25 Mr MacFarlane also attached a copy of a notice of general meeting, which he said would be distributed to shareholders that day. 26 The plaintiffs had not previously received a copy of either the requisition notice or the proposed notice of general meeting. 27 The requisition notice is undated and there is no evidence apart from the email of Mr MacFarlane as to how it was received by the company. It was signed by Mr Wells, by Mr Shilkin on behalf of Inosite and apparently by Mr Siu on behalf of Tianjin. The requisition notice states that Mr Siu proposes various motions and contains submissions supporting motions relating to dismissal of the plaintiffs as directors, and relating to confirmation of the second to fifth named defendants as directors of Proto. 28 The notice of general meeting purports to give notice of a general meeting "pursuant to section 249D of the Corporations Law", to be held at 11 am on 10 June 2015 at the offices of Ferrier Hodgson, 108 St Georges Terrace, Perth. The notice states that: The Directors have determined, pursuant to Regulation 7.11.37 of the Corporations Resolutions 2001 (Cth), that the persons eligible to vote at the General Meeting are those who are registered Shareholders at 7.00pm on Tuesday, 9 June 2015. 29 In fact, it appears to be common ground that all of the directors of the company had not made such a determination and at best, the defendant directors had made such a determination. It is common ground that the general meeting was not called pursuant to a resolution of the directors of the company. 30 On the second page of the notice, there is a statement that: Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary. 31 There appears to be no explanatory statement that accompanied the notice of general meeting and no glossary. On the third page, headed "Agenda", it is stated that: In accordance with the attached Requisition Notice, the Agenda is as follows. 32 The requisition notice does not appear to have been attached to the notice of meeting. The agenda sets out 14 proposed resolutions, including resolutions that each of the plaintiffs be dismissed as directors of the company. The resolutions set out in the notice of general meeting are: Resolutions in relation to dismissal of directors 1. Mr Andrew Mortimer be dismissed as a Director and Chairman of Proto. 2. Ms Lia Darby be dismissed as a Director of Proto. 3. Mr Andrew Heap be dismissed as a Director of Proto. 4. Mr Benjamin Cooper be dismissed as a Director and Company Secretary of Proto. Proposed resolutions in relation to confirmation of directors 5. Appoint and/or confirm Mr Steven Shilkin as a director as a director of Proto Resources and Investments Ltd. 6. Appoint and/or confirm Mr Philip Siu as a director of Proto Resources and Investments Ltd. 7. Appoint and/or confirm Mr Scott Rowe as a director of Proto Resources and Investments Ltd. 8. Appoint and/or confirm Mr Simon MacFarlane as a director of Proto Resources and Investments Ltd. Resolution in relation to the appointment of Chairman 9. Appoint Mr Martin Jones as the independent chairman of this General Meeting. 10. Appoint Mr Steven Shilkin as the chairman of Proto Resources and Investments Ltd at the conclusion of the General Meeting. Resolution in relation to appointment of Company Secretary 11. Effective immediately, the shareholders appoint Anthony Alder as the company secretary of Proto Resources and Investments Ltd. Resolution in relation to forensic accounting investigation 12. The shareholders direct the board to initiate a forensic accounting investigation into the finances and operations of Proto Resources and Investments Ltd, inclusive of a period to be determined by the board; and to take such action as is required by law and in the best interests of the company and shareholders following the completion of the investigation. Resolution in relation to former directors' subordinate debt 13. That claims for payment by all former directors, presented as subordinated debt and further by way of lodging Directors Interest notices with the ASX, are considered, approved or denied after thorough analysis of the findings of the forensic accounting investigation of the company and its operations. Resolution in relation to debt owed to Inosite Limited 14. That the Convertible Securities Agreement previously agreed by the shareholders to Bergen, and now owned by Inosite Ltd, be extended at the board's discretion for a further minimum period of 12 months. Attempts to prevent convening of general meeting 33 On receipt of the requisition notice and notice of general meeting, Mr Mortimer wrote to the Australian Securities and Investments Commission ("ASIC") and to the ASX alleging that there had been an illegal share issue. He also took steps to try to prevent the dispatch of the notice of general meeting and disputing the legality of the notice. 34 On 15 May 2015, Mr Mortimer received an email from Mr Shilkin stating that the notice of general meeting would be dispatched by close of business that day. 35 By letter dated 26 May 2015 from Mr Cooper on behalf of himself and the other plaintiffs to Inosite, Mr Wells and Mr Siu, Mr Cooper set out reasons why he contended that the notice of general meeting was defective and invalid including that: (1) Inosite was not registered as a shareholder of Proto at the time of signing the requisition notice. Consequently, it was said, the requisition percentage of shareholding under s 249D(1)(a) was not satisfied; (2) There was no explanatory memorandum to the notice of general meeting, in breach of s 249L(1)(B), the Listing Rules and common law principles; (3) The board of the company did not consider or approve the issue of the notice of general meeting; (4) The procedure under s 203D of the Act had not been complied with; and (5) The period of notice prescribed by s 249HA of the Act was not complied with. 36 By letter dated 28 May 2015, Ludlow Legal on behalf of Inosite responded to the 26 May 2015 letter and stated that the notice of general meeting would not be withdrawn. Ms Ludlow stated that she had instructions to accept service of process (presumably on behalf of Inosite). 37 According to Mr Shilkin, as at 7 June 2015, the company had received proxies representing 37% of the shares on issue (excluding shares converted by Inosite). The majority of the top 20 shareholders support the motions. Four proxies have been received that are not in full support of all the proposed motions. No proxies have been received opposing an investigation into the past activities of the company. Relevant provisions of the Corporations Act 38 Section 249D of the Act provides: (1) The directors of a company must call and arrange to hold a general meeting on the request of members with at least 5% of the votes that may be cast at the general meeting. (2) The request must: (a) be in writing; and (b) state any resolution to be proposed at the meeting; and (c) be signed by the members making the request; and (d) be given to the company. (3) Separate copies of a document setting out the request may be used for signing by members if the wording of the request is identical in each copy. (4) The percentage of votes that members have is to be worked out as at the midnight before the request is given to the company. (5) The directors must call the meeting within 21 days after the request is given to the company. The meeting is to be held not later than 2 months after the request is given to the company. 39 Section 249HA provides: (1) Despite section 249H, at least 28 days' notice must be given of a meeting of a company's members. (2) This section only applies to a company that is listed. (3) This section applies despite anything in the company's constitution. 40 Section 203D of the Act provides: Resolution for removal of director (1) A public company may by resolution remove a director from office despite anything in: (a) the company's constitution (if any); or (b) an agreement between the company and the director; or (c) an agreement between any or all members of the company and the director. If the director was appointed to represent the interests of particular shareholders or debenture holders, the resolution to remove the director does not take effect until a replacement to represent their interests has been appointed. Notice of intention to move resolution for removal of director (2) Notice of intention to move the resolution must be given to the company at least 2 months before the meeting is to be held. However, if the company calls a meeting after the notice of intention is given under this subsection, the meeting may pass the resolution even though the meeting is held less than 2 months after the notice of intention is given. Director to be informed (3) The company must give the director a copy of the notice as soon as practicable after it is received. Director's right to put case to members (4) The director is entitled to put their case to members by: (a) giving the company a written statement for circulation to members (see subsections (5) and (6)); and (b) speaking to the motion at the meeting (whether or not the director is a member of the company). (5) The written statement is to be circulated by the company to members by: (a) sending a copy to everyone to whom notice of the meeting is sent if there is time to do so; or (b) if there is not time to comply with paragraph (a)--having the statement distributed to members attending the meeting and read out at the meeting before the resolution is voted on. (6) The director's statement does not have to be circulated to members if it is more than 1,000 words long or defamatory. Time of retirement (7) If a person is appointed to replace a director removed under this section, the time at which: (a) the replacement director; or (b) any other director; is to retire is to be worked out as if the replacement director had become director on the day on which the replaced director was last appointed a director. Strict liability offences (8) An offence based on subsection (3) or (5) is an offence of strict liability. Relevant provisions of Proto's constitution 41 By clause 1.1 of the company's constitution, the replaceable rules contained in the Act do not apply to the company. 42 Clause 18.1 of the constitution provides that the business of the company is to be managed by or under the direction of the directors. 43 Clause 30.1 provides that, subject to the Act, the company may by resolution remove a director from office. 44 Clause 48.1 provides that the directors must, in accordance with the Act, appoint one or more secretaries. 45 By clause 58.1, the directors may meet together for the dispatch of business and adjourn and otherwise regulate their meetings as they see fit. 46 Clause 60 concerns notice of directors' meetings. Reasonable notice of every directors' meeting must be given to each director, except in circumstances not presently relevant, by clause 60.1. By clause 64.1, the quorum for a directors' meeting is two directors entitled to vote or a greater number determined by the directors. The quorum must be present at all times during the meeting. By clause 65.1, a resolution of the directors must be passed by a majority of the votes cast by directors entitled to vote on the resolution. 47 Clause 63 provides: 63.1 The directors may elect a director to chair their meetings. The directors may determine the period for which the director is to be the chair. 63.2 The directors must elect a director present to chair a meeting, or part of it, if: (1) a director has not already been elected to chair the meeting, or (2) a previously elected chair is not present within 10 minutes after the time appointed for the holding of the meeting or is unwilling to act for the meeting or the part of the meeting. 48 Clause 65.1 provides: 65.1 A resolution of the directors must be passed by a majority of the votes cast by directors entitled to vote on the resolution. 49 Clauses 68 and 69 state: 68.1 A director may call a meeting of the Company's members. 68.2 Except as permitted by law, a general meeting, to be called the "annual general meeting", must be held at least once in every calendar year. 68.3 Except as provided in the Act no member or members may call a general meeting. 69.1 At least 28 days' notice of a general meeting must be given in writing to those persons who are entitled to receive notices from the Company. 50 Clause 73.1 provides: 73.1 A notice of meeting sent by post is taken to be given 3 days after it is posted. 51 Clause 74 provides: 74.1 Subject to the Act and this constitution where a specified number of days' notice or notice extending over any period is required to be given the day of service is not, but the day upon which the notice will expire is, included in the number of days or other period. 52 Clause 75.2(2) provides that a notice of a general meeting must state the general nature of the meeting's business. 53 Clause 83.1 provides: 83.1 If the directors have appointed 1 of their number as chair of their meetings, the person appointed presides as chair at every general meeting. 54 Clause 83.3 provides: 83.3 Where a general meeting is held and: (1) a chair has not been appointed as referred to in rule 83.1, or a deputy chair as referred to in rule 83.2; or (2) the chair or deputy chair is not present within 30 minutes after the time appointed for the holding of the meeting or is unwilling to act; the directors present may appoint 1 of their number to be chair of the meeting and in default of their doing so the members present must appoint another director or if no director is present or willing to act then the members present may appoint any 1 of their number to be chair of the meeting. Consideration 55 At the hearing, the plaintiffs did not dispute that the company had received a request of the kind identified in s 249D. The plaintiffs' primary contention was that no meeting has been called and arranged in accordance with that section. 56 Alternatively, the plaintiffs contended that a meeting convened pursuant to the notice of general meeting would be invalid because: (a) 12 of the 14 proposed resolutions are legally invalid for a variety of reasons including that they purport to have members vote on items within the exclusive province of the board of directors or they seek to authorise conduct that is in contravention of Proto's constitution or the Act. Accordingly, the plaintiffs submitted that it would be futile for the proposed meeting to proceed; (b) The purported meeting had been called with no more than 21 days' notice, where the Act and the Constitution require a minimum of 28 days' notice. There would be substantial injustice occasioned to the plaintiffs if the meeting were to proceed. Plaintiffs' primary contention: no general meeting called 57 The plaintiffs contend that, as a matter of the ordinary meaning of s 249D, the obligation (and power) to convene a meeting under s 249D(1) falls upon the directors of the relevant company collectively. They contrast the language of s 249D(1) with s 249C which provides that "[a] director may call a meeting of the company's members". 58 The plaintiffs also note that the obligation under s 249D does not require the directors to given notice of invalid resolutions (Turner v Berner [1978] 1 NSWLR 66 at 72) or to act on a requisition the sole purpose of which is to pass a resolution which cannot be effectively passed by the members in general meeting (National Roads & Motorists' Association v Parker (1986) 6 NSWLR 517 at 521). Thus, the scheme of s 249D requires consideration of any resolution specified in the request. The plaintiffs argue that it could not be intended that one or more directors acting outside the board of directors would be entitled to make decisions about whether and how to act on a requisition notice. 59 Thirdly, the plaintiffs note that the requirement in s 249D(2)(d) that the request be "given to the company" is consistent with their contention and not with a power or obligation conferred upon one director or a sub-set of directors. 60 The second to fifth defendants submitted that they were not obliged to engage with the defendants about the decision to call a general meeting, and did not do so because they believed that the plaintiffs would go to any lengths possible to avoid a general meeting of this nature. They sought to draw a distinction between the obligations imposed on "directors" in s 249D and a requirement that a meeting be called "on consensus of the company's board". Ms Ludlow submitted that, if it were up to the consensus of all the directors, including those subject to motions for their dismissal, there may be situations where such meetings would never be called. 61 I agree with the plaintiffs' interpretation of s 249D, for the reasons they identified, set out above. Where an obligation is conferred upon a single director, the Act uses language which makes that explicit: see, for example, ss 180 to 183 of the Act. There is nothing in the language of s 249D, or the Act more generally, or in any authority identified to the Court, to suggest that one or more of the defendants was either obliged or entitled to call a general meeting. 62 There is nothing in the Act to support the submissions put on behalf of the defendants. Further, Proto's constitution did not require a consensus of directors to convene a general meeting: it required the passage of a directors' resolution in accordance with clause 65.1. Nor is it correct to say that the requirement of a consensus would defeat the purpose of s 249D. Section 249E explicitly confers power upon members with more than 50% of the votes of all of the members who make a request under section 249D to call and arrange to hold a general meeting if the directors do not do so within 21 days after the request is given to the company. 63 Accordingly, I conclude that no general meeting was called in accordance with the requirements of s 249D in response to the requisition notice. 64 It follows that the notice of general meeting was ineffective to call a meeting pursuant to s 249D and is invalid. Other matters 65 Having concluded that the notice of general meeting is invalid, it is not necessary to deal at length with the defects in the notice. However, since it was submitted that the plaintiffs were raising matters of technicality, it may be useful to note particular defects which I consider to be significant: (a) The reference to s 249D in the title of the notice was capable of conveying to a reasonable reader that the notice had been issued pursuant to a resolution of the directors of Proto, when this was not the case; (b) The notice contained a statement that the directors had made a determination pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth), which was apparently incorrect in that the directors had not made such a determination. This statement conveyed the false impression that the directors had passed a resolution about this matter, when they had not done so; (c) The proposed resolutions (especially items 9, 10, 11, 12 and 13) included matters that were not matters within the power of a general meeting, so that those resolutions, if passed, would have been invalid. Unless a clear contrary intention is shown, functions assigned to the board of directors are not exercisable by the company in general meeting: Taiqi Investments (Aust) Pty Ltd v Winlyn Developments Pty Ltd [2011] NSWSC 1218; (2011) 86 ACSR 197 at [19]. (d) The procedure required by s 203D of the Corporations Act for providing procedural fairness to directors by giving them an entitlement to put their case when removal is proposed does not appear to have been followed; (e) The notice did not comply with the timing requirements in either s 203D or s 249HA, and gave less time than that stipulated by the constitution; (f) The first four resolutions called for the plaintiffs to be "dismissed", rather than their removal. Appropriate relief 66 Having accepted the plaintiffs' primary contention, it is not necessary to deal with their alternative contention. 67 However, it is necessary to consider whether the Court should grant the relief sought by the plaintiffs. 68 The plaintiffs sought to rely upon s 1322 of the Corporations Act which provides relevantly: Irregularities (1) In this section, unless the contrary intention appears: (a) a reference to a proceeding under this Act is a reference to any proceeding whether a legal proceeding or not; and (b) a reference to a procedural irregularity includes a reference to: (i) the absence of a quorum at a meeting of a corporation, at a meeting of directors or creditors of a corporation, at a joint meeting of creditors and members of a corporation or at a meeting of members of a registered scheme; and (ii) a defect, irregularity or deficiency of notice or time. (2) 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. (3) A meeting held for the purposes of this Act, or a meeting notice of which is required to be given in accordance with the provisions of this Act, or any proceeding at such a meeting, is not invalidated only because of the accidental omission to give notice of the meeting or the non-receipt by any person of notice of the meeting, unless the Court, on the application of the person concerned, a person entitled to attend the meeting or ASIC, declares proceedings at the meeting to be void. … (4) 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; … and may make such consequential or ancillary orders as the Court thinks fit. … (6) The Court must not make an order under this section unless it is satisfied: (a) in the case of an order referred to in paragraph (4)(a): (i) that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature; (ii) that the person or persons concerned in or party to the contravention or failure acted honestly; or (iii) that it is just and equitable that the order be made; and (b) in the case of an order referred to in paragraph (4)(c)--that the person subject to the civil liability concerned acted honestly; and (c) in every case--that no substantial injustice has been or is likely to be caused to any person. 69 By s 21 of the Federal Court of Australia Act 1976 (Cth), the Court may in civil proceedings in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed. For example, the Court has power under s 21 to declare invalid a resolution passed by shareholders: Young v Sal Mar Enterprises Lot Pty Ltd [2005] FCA 1853 at [27]. In that case, Young J also concluded that s 1322(2) was a source of power to declare the relevant resolution invalid. See also Jenkin v Pharmaceutical Society of Great Britain [1921] 1 Ch 392. 70 By s 23 of the Federal Court of Australia Act 1976 (Cth), the Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds as the Court thinks appropriate. That power includes the power to grant an injunction. In Scottish & Colonial Ltd v Australian Power & Gas Co Ltd [2007] NSWSC 1266; (2007) 65 ACSR 313, Bryson AJ of the Supreme Court of New South Wales granted a permanent injunction restraining the consideration of resolutions for the removal of directors where a general meeting was requisitioned but the procedure for removal of directors of a public company set out in s 203D was not followed. 71 The defendants did not submit that the plaintiffs were disentitled to the relief sought by reason of delay. Conclusion 72 I am satisfied that the Court has power to grant the declaratory and injunctive relief sought and that those orders should be made. 73 The second to fifth defendants should pay the costs of the proceeding. I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate: Dated: 2 July 2015