(2007) 25 ACLC 1,497 Reported Decision : 65 ACSR 313 [2008] ALMD 1643 215 FLR 100 New South Wales Supreme Court CITATION : Scottish & Colonial Ltd v Australian Power & Gas Co Ltd & Ors [2007] NSWSC 1266 HEARING DATE(S) : 2 & 5/11/2007 JUDGMENT DATE : 5 November 2007 JURISDICTION : Equity JUDGMENT OF : Bryson AJ at 1 DECISION : I order pursuant to UCPR 28.2 that the separate question be decided separately from any other question at the trial of the proceedings. The separate question is whether a general meeting of shareholders of Australian Power & Gas Co. Ltd called by Mr Wayne Bellman for 15 November 2007 can by resolution remove any director from office. The answer is: No, the general meeting can not remove any director from office. Upon the Further Amended Cross-claim I make a permanent injunction against the cross-defendant in the terms of claim one but omitting the reference to Claim 5. "(1)An injunction restraining the consideration of resolutions numbered 1, 2 and 3 at the general meeting of Australian Power & Gas Company Limited called for 15 November 2007." It remains for me to consider the costs on the cross-claim, whether any further part of the originating process and the claims should be proceeded with and the costs of the originating process. I will conduct a directions hearing to deal with those subjects at 9.30am on Friday 16 November. CATCHWORDS : CORPORATIONS - directors - removal of directors by members - one of five directors of listed public company summoned meeting of members to consider resolution to remove the other four and appoint one other - he did not comply with procedure in Corporations Act s 203D(2) (two months' notice to the company) - constitution of company empowered removal of directors by resolution of company but made no procedural requirement like those in s 203D - Held, compliance with s 203D was necessary, consideration of resolutions for removal restrained. Allied Mining & Processing Ltd v Boldbow Pty Ltd (2002) 26 WAR 355 not followed. LEGISLATION CITED : Companies Act 1961 (NSW) Corporations Act 2001 (Cth) Advance Bank Australia v FAI Insurances Australia (1987) 9 NSWLR 464 Allied Mining & Processing Ltd v Boldbow Pty Ltd (2002) 26 WAR 355 Browne v Panga Pty Ltd (1995) 17 ACSR 75 Central Exchange v Rivkin Financial Services (2004) 213 ALR 771 CASES CITED : Dick v Comvergent (2000) 34 ACSR 86 Farah Constructions v Say-Dee Pty Ltd (2007)81 ALJR 1107 Gosford Christian School v Totonjian and Others (2006) 201 FLR 424 Holmes v Life Funds of Australia limited [1971] 1 NSW LR 860 Link Agricultural Pty Ltd v Shanahan (1998) 28 ACSR 498 Vision Nominees Pty Ltd v Pangea Resources Limited (1988) 14 NSWLR 38 Scottish & Colonial Limited - Plaintiff Australian Power and Gas Company Limited - 1st Defendant/First Cross Claimant PARTIES : Richard Jonathan Poole - 2nd Defendant/Second Cross Claimant Ian Stuart McGregor - 3rd Defendant/3rd Cross Claimant Wayne Bellman - Cross Defendant FILE NUMBER(S) : SC 5191/2007 COUNSEL : T.F. Bathurst QC, R.A. Dick & P. Kulevski - Plaintiff W.G. Muddle SC & Ms K. Barrett - Defendants SOLICITORS : Chang, Pistilli & Simmons - Plaintiff Deacons Lawyers - Defendants IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BRYSON AJ 5 NOVEMBER 2007 5191/07 SCOTTISH & COLONIAL LIMITED v AUSTRALIAN POWER & GAS COMPANY LIMITED & ORS JUDGMENT 1 BRYSON AJ: I am in a position to deal with the separate question now, and I will proceed to state my reasons. 2 I first make an order, pursuant to Uniform Civil Procedure rule 28.2 that the separate question be decided separately from any other question at the trial of proceedings. 3 The separate question is whether a general meeting of shareholders of Australian Power and Gas Company Limited called by Mr Wayne Bellman for 15 November 2007 can, by resolution, remove any director from office. 4 These proceedings relate to proposed removal of directors of Australian Power and Gas Company Limited (APG). The company's name has been changed several times. Its name was Microview Limited for three years until 19 November 2006 when its name was changed to the present name. The company was formed in New South Wales on 23 January 1997. It is a public company listed on the Australian Stock Exchange. The plaintiff claims, and it appears to be accepted, that it is the holder of 1,031,587 fully paid ordinary shares. It also claims to have a beneficial interest in a further parcel of 7,719,305 shares. 5 Mr Wayne Bellman became a director of APG on 20 November 2006. On 15 October 2007 he requisitioned a general meeting of APG to be held on 15 November 2007. Mr Bellman was authorised to call the meeting by s 249CA of the Corporations Act 2001. He gave notice complying with s 249HA. He acted under that power without seeking a decision of the board to call a meeting. His notice of meeting sets out five resolutions, the effect of which is that four of the directors would be removed from office immediately under cl 12.5 of APG's constitution, and that Mr Warren Riddell, who is not a director, would be appointed a director. 6 The directors he proposed to remove were Mr Richard Poole, Mr Michael Hogge, Mr Ian McGregor and Ms Anne Harley. Ms Harley resigned as a director on the following day, 16 October. On 15 October the only other director was Mr Bellman. 7 Scottish & Colonial Limited is the plaintiff in these proceedings and APG and Messrs Poole, Hogge and McGregor are defendants. The principal relief claimed is an injunction restraining the challenged directors and APG from continuing to issue communications relating to the meeting of 15 November 2007 which in any way seek to influence the outcome of that meeting; an injunction restraining the challenged the directors and APG from operating the information hotline referred to in a letter which they circulated on 18 October 2007 at APG's expense; an injunction restraining the challenged directors from using funds or resources of APG to influence shareholders to vote against the resolutions at the meeting proposed, and orders that the challenged directors indemnify or compensate APG for funds and resources already utilised to seek to influence shareholders to vote against the resolutions. 8 The plaintiff also seeks leave under s 237 of the Corporations Act 2001 to bring proceedings under s 236 in the name and on behalf of APG. As well as basing claims on remedies alleged to be available to APG, the plaintiff claims relief which it says it is entitled to pursuant to s 1324 of the Act and the general law. The plaintiff has the benefit of the wide provisions relating to standing in Chapter 2F particularly ss 232 to 234. The claims for injunctions are based on s 234 in relation to which standing is shown in accordance with s 1324(1). 9 The principal ground alleged against the directors is contravention of their duty to exercise their powers in good faith in the best interests of APG and for a proper purpose, restated in s 181(1) of the Act. These restrictions on the exercise of powers are not materially different from restrictions which had effect in Advance Bank Australia v FAI Insurances Australia (1987) 9 NSWLR 464, which related to a proposal for the election of new directors at an annual general meeting, and to the participation of the existing Board in the controversy relating to that proposal. Observations at 484 to 485 show the conclusions of Kirby P, and a table of relevant considerations. 10 Mr Bellman did not follow the procedure for removal of the directors indicated by s 203D of the Act, which includes a requirement in subs (2) that "Notice of intention to move the resolution must be given to the company at least 2 months before the meeting is to be held". He did not give two months' notice. He did not give the company a notice which is clearly recognisable of itself as a notice under subs (2), although much the same information could, I suppose, be understood from other documents which Mr Bellman gave to the company. The provision in the second sentence of subs (2) under which the requirement for two months' notice may be avoided is not available, as the company did not call the meeting and further as it is only available where there has in fact been a notice. 11 Submissions on the cross-claim raised the question whether compliance with the procedure in s 203D(2) and other procedures under s 203D is necessary for effectiveness of the proceedings. There is case law on predecessor legislation which recognised parallel operation of the legislation and of provisions of a company's constitution in a clearer way than s 203D does. It is also necessary to consider the effect of procedural provisions in cl 12.5 and elsewhere in APG's constitution. 12 The proceedings have been conducted with great expedition. The Originating Process was filed on 25 October, and the proceedings came before me for final hearing on 2 November. There were many marks of haste. The Cross-claim filed in court on 2 November, but prefigured earlier, seeks an injunction restraining the holding of the meeting called for 15 November, an injunction restraining consideration of the resolutions relating to removal of directors and the appointment of Mr Riddell, and an injunction restraining Mr Bellman from convening any further general meeting except on terms which overcome what the cross-claimants contend are misleading statements and conduct of Mr Bellman in communications he has made with members. 13 Although much else is in issue, and I have not embarked on considering evidence on contentious facts, it became clear from contentions and submissions from counsel that a separate question which potentially might lead to disposition of the whole of the proceedings exists. The facts relating to the separate question are few and not contentious. Each party made submissions at the opening of the hearing on that separate question. I regarded it as appropriate to make orders under Uniform Civil Procedure rule 28.2 defining the separate question and to proceed to deal with it. Counsel accepted that this procedure was appropriate. The separate question appears to affect only resolutions 1, 2 and 3 relating to removal of directors. The separate question is whether a general meeting of shareholders of APG called by Mr Wayne Bellman for 15 November 2007 can, by resolution, remove any director from office. I have made an order for its separate determination. 14 Section 203D appeared in corporations legislation in 1999 late in the life of the Corporations Law, and is continued in the Corporations Act 2001. It has since been amended by adding subs (8), which has no bearing on the present question. It provides: 203D Removal by members—public companies 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. 15 Section 203D(1) on its face empowers a company and the proposed general meeting to remove a director from office by resolution. Clause 12 of the constitution is entitled "The Directors" and includes cl 12.5, headed "Removal of Director": 12.5 The Company may by resolution remove any Director before the expiration of his period of office, and may by resolution appoint another person in his place. The person so appointed is subject to retirement at the same time as if he had become a Director on the day on which the Director in whose place he is appointed was last elected a Director. 16 The reference is, of course, to a general meeting of the members of a company: where elsewhere in cl 12 directors are empowered they are explicitly referred to (cl 12.4). The only procedural condition for exercise of power in cl 12.5 is referred to by the words "by resolution". That is, any requirement otherwise made in the constitution for making a resolution must be complied with. There are no other procedural conditions. In case law there have been contrastingly elaborate procedural conditions in the constitutions of some companies. Plainly a legislative purpose of s 203D is to prevent the constitution or other arrangements of a public company from entrenching a director in a position from which the members cannot remove the director. Members have a statutory right to overcome any provision entrenching directors for fixed terms, or for life, or while they control any particular shareholdings or otherwise entrenching them. APG's constitution has no such entrenchment. Another purpose shown by the terms of s 203D is the purpose of giving directors an entitlement to put their case to members when removal is proposed. Attainment of these purposes is signalled at several places in s 203D by very emphatic language, first by the words "despite anything" in subs (1). 17 These words are plainly very strong. They were explained by Roberts-Smith J in Allied Mining & Processing Ltd v Boldbow Pty Ltd (2002) 26 WAR 355 at 364 [53], as meaning: "… notwithstanding any provision in the constitution which would prevent such removal …". With respect I do not think that Roberts-Smith J expressed the full force of these words. In their ordinary meaning they mean that subs (1) overrides the other matters referred to, and has effect in their place, not only the effect of operating notwithstanding any provision to a different effect, but with the further force that subs (1) operates even if there is another provision to the same effect. 18 Constitution cl 12.5 is almost but not entirely to the same effect as subs (1). It confers what is for practical purposes an identical power to removal a director but it does so while specifying that the procedure to be followed is by resolution. In my opinion the effect of s 203D(1) is that the power is conferred without the procedural specification in cl 12.5. I do not think that the procedure is a condition or otherwise an attribute of the power conferred by cl 12.5, but if it were it would be inconsistent with subs (1), and subs (1) would operate despite it. 19 Section 203D makes its own procedural provisions elsewhere than in subs (1) and its conferral of power. They are also made in firm language. The first sentence of s 203D (2) is expressed in the unusual combination of the imperative mood and the passive voice, but clearly includes a mandatory requirement that the person intending to move the resolution is to give the company notice at the time referred to. That person in the present case is Mr Bellman. Firm language continues in the mandatory words of subs (3), and in the conferral of an entitlement on the director in subs (4). 20 There was considerable discussion in argument about the function of the second sentence in subs (2). As I have said there is no room for it to operate on the present facts. It does seem that it enables the company to bring forward a proposed resolution for consideration at any meeting which may happen to intervene before the expiry of the two months, but I am not sure that this is the whole of its operation. It could function to smooth over what might otherwise be the disruptive effect of a notice of intention delivered shortly before a scheduled meeting. I do not need to explore this fully. 21 Section 203D is unlike its predecessors in the emphatic nature of the language used. There are other differences to which I will refer. 22 In decisions on recognisably predecessor legislation to s 203D courts have consistently taken the view that companies could proceed in accordance with either the legislation or with provisions in their articles regulating removal of directors. The first decision in this series is Holmes v Life Funds of Australia limited [1971] 1 NSW LR 860, LW Street J (as Sir Lawrence Street Chief Justice then was). 23 That decision related to the Companies Act 1961 (NSW) s 120, and to an Article 90 in practically the same terms as constitution cl 12.5 of APG. Section 120(1) provided for a public company by ordinary resolution to remove a director. Subsection (2) required special notice of any such resolution to remove a director, and there were other procedural provisions. Subsection 120 (7) provided against derogation: "Nothing in the foregoing provisions of this section shall be taken as … derogating from any power to remove a director which may exist apart from this section." Article 90 did not require special notice and only dealt with procedure by its reference to an ordinary resolution. There were explicit recognitions in the terms of section 120 that a company might proceed either way to remove a director. These recognitions can be observed in the words "under this section" in subs (2), and far more clearly in the terms of subs (7). L.W. Street J was of the clear view that having regard to subs (7) it was open to the company to proceed effectually in either way. His Honour's view at page 862 was grounded on subs (7), I would respectfully say plainly correctly. 24 Courts took the same view of successor legislation. In Vision Nominees Pty Ltd v Pangea Resources Limited (1988) 14 NSWLR 38 at 42 dealing with s 225 of the Companies (New South Wales) Code which corresponded with section 120, I made a brief reference, not decisional, to the availability of both courses. Section 227 of the Corporations Law continued in substance these provisions overcoming entrenchment of the directors; with some changes. There was a requirement for special notice, a procedural requirement in subs (4) for sending a copy of the notice to the director and circulating the director's statement (subss (5) and (6)), which was not to be defamatory (subs (7)). Section 227(11) continued and extended earlier provisions against derogation in these terms: (11) [Compensation or damages] Nothing in the preceding provisions of this section: (a) … (b) derogates from any power to remove a director that may exist apart from this section. 25 An additional provision in subs (12) prevented removal of public company directors by other directors under provisions in articles. I do not think that this provision appears elsewhere in the legislation now under consideration. 26 In Browne v Panga Pty Ltd (1995) 17 ACSR 75 Ipp J in the Supreme Court of Western Australia, in proceedings heard with great expedition (see page 76), dealt with an application for an interlocutory injunction restraining an extraordinary general meeting of shareholders which was to take place on the day following the decision. The grant of an interlocutory injunction was based on a decision that there were serious issues to be tried (see page 83 line 40) and on the balance of convenience. Justice Ipp gave brief consideration to some further grounds for injunctive relief which he did not uphold (see page 83 line 43). These related to s 227(3) of the Corporations Law and to an article 61 (see page 86 line 5) which began "Subject to these articles and the Code …", raising the construction of the article and its interaction with s 227. Justice Ipp adopted and acted on a concession by the plaintiff's counsel "that directors could be removed either under the statutory power of s 227 or under power conferred by articles of association, provided that the articles contained such a power". Apart from acting on the concession his Honour expressed no view on it. In view of other decisions it cannot be doubted that the concession was correctly made. However Browne v Panga Pty Ltd does not add to available authority on s 227. 27 In Link Agricultural Pty Ltd v Shanahan (1998) 28 ACSR 498 [1999] 1 VR 466 Kenny JA gave the leading judgment in the Court of Appeal of Victoria and stated at ACSR 516 VR 485 the availability of concurrent procedures. Her Honour said: 52 As appears below, I do not accept these submissions. Section 227 of the Corporations Law confers a right on a public company, constituted by the members in general meeting, to remove a director by ordinary resolution. The importance of the statutory right is that it is to be enjoyed by the members "notwithstanding anything in its articles or in any agreement between it and the director": see s. 227(1). The section also contemplates, in s. 227(3)(b) and (9), that if the members in general meeting remove a director, they may in the same meeting appoint a replacement. Article 95 of Pivot's articles of association also confers a right on the members in general meeting to remove a director and to appoint another in his stead, but the right conferred by art.95 is exercisable only by special resolution. Section 227 and art. 95 stipulate different further requirements for the exercise of the rights they confer. Neither provision prevents recourse to the other. Section 227 and art. 95 create concurrent and alternative procedures pursuant to which the company in general meeting may remove a director and appoint another in his place. The members have a choice, whether to proceed under s. 227 (and subject themselves to the requirements of the section) or to proceed under art. 95 (and subject themselves to the requirements of the article): cf. Claremont Petroleum N.L. v. Indosuez Nominees Pty. Ltd. [1987] 1 Qd. R. 1 and Vision Nominees Pty. Ltd. v. Pangea Resources Ltd. (1988) 14 N.S.W.L.R. 38. 28 This passage authoritatively establishes the relevant operation of s 227: see Farah Constructions v Say-Dee Pty Ltd (2007)81 ALJR 1107 at 1142 [135] referring to Australian Securities Commission v Marlborough Gold Mines Limited (1993)177 CLR 485 at 492. Her Honour said that the members have a choice but I would think the choice would be made or committed by the steps taken before the members met. 29 I note the brief reference to Link Agricultural in Howard v Mechler (1999) 30 ACSR 432 at 438 to 439 (Austin J). 30 Section 203D appeared in the Corporations Law by an amendment made by Corporate Law Economic Reform Program Act 1999 (Cth). Section 203D takes a significantly different form to s 227, which was repealed. In Dick v Comvergent (2000) 34 ACSR 86 in a case related to removal of directors under a shareholders' agreement, as well as to s 203D and to an article which authorised removal by resolution, Windeyer J at page 90 [13] spoke in terms which appear to accept that proceedings under s 203D or under the article were alternatively available, and that Link Agricultural v Shanahan stated the relevant law: but there had not been significant argument on that subject, and the grounds on which Windeyer J restrained removal of the directors appear to be based alternatively on s 203D and on the article. 31 References in Ford's Principles of Corporations Law at paragraph 7.230 page 7301 to s 203D appear to me to attempt restatement of the effect of the authorities and not to express an authorial view. 32 Allied Mining & Processing Limited v Boldbow Pty Ltd, to which I referred earlier, is the only decision to which I have been referred which addresses the relevant operation of s 203D and states reasons. In that case article 21 set out at page 358 [16] prescribed in detail procedural requirements which included five days' notice to the director of the proposed resolution, and an opportunity to the director to provide a statement for circulation within a further three days. A member of the company circulated notice convening a general meeting to consider a resolution to remove all directors of the company. Justice Roberts-Smith referred at length at pages 362 to 363 to Link Agricultural v Shanahan, and set out the significant passages. His Honour also referred to Browne v Panga and the concession there made. 33 Justice Roberts-Smith said at 363: [46] The first question I think is whether the principle embodied in s 203D is to set a minimum standard. I think not. [47] In my opinion it is to do no more than prevent directors ever becoming entrenched and to ensure that even though a company's constitution may contain articles which would have that effect the shareholders could always in the last resort have recourse to s 203D which could never be excluded but may be supplemented by constitutional articles providing alternative ways, whether more or less rigorous than s 203D, by which shareholders may remove directors. 34 Justice Roberts-Smith referred to the rationale for earlier legislation stated by L.W. Street J in Holmes v Life Funds of Australia, and at page 364 gave emphasis to the following passage in Holmes: The section denies to a public company the freedom to insert in its articles any provision which would secure the directors in the occupancy of their officer in the face of a properly expressed resolution by shareholders seeking their removal. But the section is not in my judgment intended to provide the whole code for the removal of directors ... . 35 Justice Roberts-Smith also said at [49]-[50], p364: 49: I recognise of course that the decision in that case turned principally on the clear terms of s 120(7) of the Companies Act and there is no equivalent provision in section 103 D of the Corporations Act, although as Mr McCusker pointed out, there was a corresponding provision in s 227(11) of the Corporations Law. 50: Nonetheless I consider the legislative intent and rationale expressed in that portion of the judgment of Street J, which I have emphasised above, has as much application as s 203D of the Corporations Law as it did to section 120 of the Companies Act. 36 This subject has had brief later consideration. In Central Exchange v Rivkin Financial Services (2004) 213 ALR 771 Emmett J made observations which assume without consideration that proceeding under the company's articles would be effective (see [50]-[53]). The issues in the proceedings stated at [13] did not include that question. In Gosford Christian School v Totonjian and Others (2006) 201 FLR 424 at [128] Barrett J stated an opinion in accordance with Allied Mines v Boldbow but did not act on it. 37 I do not agree with Roberts-Smith J's view or with seeing s 203D as a last resort. In my opinion his Honour accorded inappropriate force to the legislative intent and rationale identified in the passage cited from Holmes v Life Funds of Australia, and did not give appropriate consideration to the force of expressions in the text of s 203D, which to my mind does not yield any difficulty of construction which would make consideration of legislative intent and rationale override the ordinary process of application of the terms of the enactment, according to their meaning as an ordinary piece of English. In my opinion the application of the principle which Roberts-Smith J drew from Holmes does not produce the result that the company can choose which course to follow. If the principle controlled its construction s 203D would only operate where the constitution entrenched directors, and if the constitution did not entrench directors only the constitution could operate. The principle did not produce this result in the earlier case law. 38 In my view the correct construction of s 203D gives effect to the purposes of the legislation, a principal purpose of preventing entrenchment, and another purpose of affording procedural fairness to directors who are under challenge. Neither of these purposes is served by treating as available to be acted on an article which alters or diminishes the availability of procedural fairness to the director. The procedural protection given to directors does not serve only the interests of directors. It serves the interests of the company that fair procedure is required to be followed for removal of directors, and that time for consideration and an opportunity for response will be available. Precipitancy is destabilising. The considerations marshalled by Roberts-Smith J at [51]-[52] would be appropriate for resolution of any ambiguity yielded by the legislation, but his Honour did not identify one. I do not see one. 39 The strength of the language used in several places in s 203D leads me to the view that its provisions, including its procedural provisions, were intended to operate whether or not some provision in the constitution indicated some other procedural course which gave directors less or no protection. 40 In my opinion the fact that s 203D is not a replaceable rule in contrast with other provisions which are, including s 203C relating to removal of directors of proprietary companies, assists to a small degree the conclusion I regard as correct. 41 The wide divergence of the terms of s 203D from the terms of earlier provisions is significant of an intention to make wide departures of meaning. I particularly note the words "despite anything", the wider specification of the countervailed provisions, the more emphatically mandatory requirement for notice in subs (2), the absence of explicit indication in the text that proceeding under the section may be alternative to other removal proceedings and the absence of any provision preserving the company's constitution from derogation. The recasting of terms is sufficiently wide for me to conclude that authorities on earlier provisions are of relatively little force for the construction of s 203D, and reasoning in reliance on provisions relating to derogation has no applicable counterpart. It is most striking that provisions related to derogation no longer appear. These provisions were at the heart of the reasons for earlier judicial opinion from Holmes v Life Funds of Australia onwards. It is also striking that the clearly implied textual recognition that there could be removal proceedings which were not under the section is not now made. 42 In my opinion s 203D means that if a director is to be removed the procedures required by the section must be taken. The step in s 203D(2) of giving notice must be taken, subject to the means of overcoming the time provided for by subs (2) but otherwise as prescribed. So too for the steps required by subs (3) and for according the director the entitlement conferred by subs (4). If there are conditions in a company's articles for exercise of the power, whether procedural provisions or other conditions, it is nonetheless necessary that s 203D be complied with. The power in subs 203D (1) exists despite anything in any other of the documents indicated; that is, it always exists, in any removal of a director the members always exercise it. When it is exercised the other provisions of s 203D apply and must be complied with. Whether any conditions imposed by a company's constitution must also be complied with need not now be determined: in this case the requirements of cl 12.5 would be complied with. 43 Section 203D prescribes a legal rule which operates despite any qualifications which would otherwise exist. Constitution cl 12.5 would qualify the power by enabling it to be exercised in whatever way the company may make a resolution without observing the procedures in s 230D: s 230D(1) operates despite that. As I have said, in my opinion subs (2) operates, and Mr Bellman was obliged to comply with it. In view of the time available, and also the fact that the meeting was not summoned by the company, there is no prospect of this failure being overcome in the way shown by the second sentence of subs (2). 44 I answer the separate question: No, the general meeting cannot remove any director from office. 45 ORDERS I order pursuant to UCPR 28.2 that the separate question be decided separately from any other question at the trial of the proceedings. The separate question is whether a general meeting of shareholders of Australian Power & Gas Co. Ltd called by Mr Wayne Bellman for 15 November 2007 can by resolution remove any director from office. The answer is: No, the general meeting can not remove any director from office. Upon the Further Amended Cross-claim I make a permanent injunction against the cross-defendant in the terms of claim one but omitting the reference to Claim 5. (1) An injunction restraining the consideration of resolutions numbered 1, 2 and 3 at the general meeting of Australian Power & Gas Company Limited called for 15 November 2007. It remains for me to consider the costs on the cross-claim, whether any further part of the originating process and the claims should be proceeded with and the costs of the originating process. I will conduct a directions hearing to deal with those subjects at 9.30am on Friday 16 November. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.