Matthews v Newport Block and Tile Co Pty Ltd (In Liquidation) [1950] HCA 4

80 C.L.R.] OF AUSTRALIA. 269

[HIGH COURT OF AUSTRALIA.)

MATTHEWS S g i ' 0 . APPELLANT RESPONDENT, AND

NEWPORT BLOCK AND TILE COMPANY PROPRIETARY LIMITED (IN LIQUIDA- > ResponpEnTs. TION) AND ANOTHER

APPLICANTS,

ON APPEAL FROM THE SUPREME COURT OF VICTORIA.

Company—Remuneration of managing director—Articles of association empowering H. ©. or A. directors to fix remuneration—* May be by way of salary or commission or 1950. participation in profits or by any or all of those modes" —Power to remunerate = "~ directors for " extra service" or " special exertions "—Resolution of directors MELBOURNE, that a lump sum be paid to managing director " in consideration of past services Feb. 20, 21; rendered "—Ambiguily—V alidity—Managing director active in formation of April 5. company—Resolution at meeting before incorporation that, in consideration of ine, his bringing the company into being, he be allotted fully paid shares in company wiyenr™ans when formed—Shares not allotted—Sum fixed by resolution equal to face value of ypuy)9M4. 55 shares—Power of director to vote on resolution in which he has an interest.

On 15th June 1946, at a meeting arranged by M. with a view to the formation of a company, it was decided that the company be formed and it was resolved that M. be allotted 1,500 fully paid shares (which were to be of £1 each) in consideration of his bringing the company into being. The proposed company was incorporated in 1947. Pursuant to its articles of association M. became its managing director and so continued until the company went into liquida- tion in 1949. In addition to M. two other directors, V. and R., were appointed. 'The articles of association provided :—" 77. If any director being willing shall be called upon to perform extra service or to make any special exertions