Whitehouse v Capital Radio Network Pty Ltd & Ors

[2002] TASSC 78

Supreme Court of Tasmania

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Interrogate

Catchwords

1. Corporations
2. › Management and administration
3. › Directors and other officers
4. › Meetings of directors
5. › Validity of proceedings
6. › Absence of quorum
7. › Whether deliberate absence of quorum constitutes procedural irregularity
8. › Whether validation would cause substantial injustice
9. › Corporations Law, s 1322(2), (4), (6)
1. Corporations
2. › Management and administration
3. › Directors and other officers
4. › Meetings of directors
5. › Quorum requirements
6. › Director deliberately absenting to prevent quorum
7. › Whether director entitled to rely on quorum requirement to block resolutions
8. › Corporations Law, s 1322

Quick Take

The absence of a quorum at a directors' meeting is a procedural irregularity within s 1322(2) even when deliberate, but validation will be refused where the absent director was knowingly and reasonably relying on the quorum requirement to prevent the other director from seizing control of the company. The 'same result' argument — that the outcome would have been identical had the absent director attended — is not necessarily sufficient to establish absence of substantial injustice under s 1322(6)(c).