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July 13, 2012

Extending the time for holding an extraordinary general meeting

In Woolworths Limited v GetUp Limited [2012] FCA 726 the Federal Court granted Woolworths' application to extend the time fixed under the Corporations Act for calling and holding an extraordinary general meeting requisitioned by GetUp and for issuing a members’ statement. It wished to extend the relevant times to coincide with the times for calling and holding its scheduled annual general meeting for 2012.

The purpose of the requested general meeting is to consider a resolution to alter Woolworths' constitution by inserting a new clause requiring that, from 1 January 2016, the ownership or operation by Woolworths of electronic gaming machines be excluded from its objects and purposes.

The estimated cost to Woolworths of calling and holding the requested meeting independently of its scheduled annual general meeting would be approximately $550,000.

GetUp conceded that no specific prejudice will be caused to it, or those whom it represents, if the requested meeting was delayed by about three months. The Judge was satisfied that such delay was not likely to result in any substantial injustice being caused to any person.

In approving the application Judge Yates said:

"I am satisfied that the plaintiff has made out a case. Its case does not simply stand on the fact that convening and holding the requested meeting will cost it a substantial amount of money and put it to considerable inconvenience. The additional factor that the plaintiff brings to the table is that it can substantially avoid this cost and inconvenience by calling and holding a meeting within timeframes that are different to those provided by the Act but which, if implemented, would be sufficiently proximate to those timeframes so as to work no prejudice, let alone cause substantial injustice, to any person. ...

I should deal with one further matter. GetUp advanced a submission that the holding of the requested meeting on the same day as the annual general meeting may result in some distraction from the intended task of the requested meeting, having regard to the considerable matters to be considered at the annual general meeting. ... There is no material before me which would lead me to conclude that the business of the requested meeting cannot be attended to properly and with due consideration by those members who might choose to participate in it, if held on the same day as the annual general meeting. "

There was no attempt to invalidate the meeting requisition.

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Posted 13th July 2012 by David Jacobson in Corporate Governance, Corporations Act