Re National Mutual Life Association of Australasia Limited v Peter Grenfell Windsor and George Henry Hallas [1991] FCA 42; (1991) 9 ACLC 480 4acsr 177/100 ALR 585; 28 FCR 214 (21 February 1991)

FEDERAL COURT OF AUSTRALIA

Re: THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA LIMITED
And: PETER GRENFELL WINDSOR and GEORGE HENRY HALLAS
No. V G3000 of 1991
FED No. 64
Corporations
[1991] FCA 42; (1991) 9 ACLC 480
4ACSR 177/100 ALR 585
28 FCR 214

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION
Heerey J.(1)

CATCHWORDS

Corporations - validity of general meeting requisitioned by shareholders - change of status of company - whether company limited by shares and guarantee can convert to company limited by guarantee - whether matters wrongly withheld from general meeting - service of notice of general meeting - service by advertisement in accordance with Articles of Association - whether Articles "make other provision" within meaning of s.247(4) Corporations Law - whether newspapers "published" in Capital city if not printed there.

Companies (Victoria) Code 1981 s.69

Corporations Law ss.246, 247(4)

Life Insurance Act 1945 s.140

Turner v Berner (1978) 1 NSW LR 66

Queensland Press Ltd v Academy Instruments No. 3 Pty Ltd (1987) 11 ACLR 419

Re Bamboo Gold Mines (1987) 5 ACLC 631

Re Insight Mining Pty Ltd (1987) 11 ACLR 704

Holmes v Life Funds of Australia Ltd (1971) 1 NSW LR 860

Alexander v Stocks and Holdings Ltd (1975) VR 843

Deputy Commissioner of Taxation v Abberwood (1990) 90 ATC 4255

In re 88 Berkeley Road NW9 (1971) Ch 648

L C O'Neill Enterprises Pty Ltd v Toxic Treatments Ltd (1986) 4 NSW LR 660

Totex-Adam Pty Ltd (1980) 1 NSW LR 605

Vision Nominees Pty Ltd v Pangea Resources Ltd (1988) 14 NSW LR 38

HEARING

MELBOURNE
21:2:1991

Counsel for the applicant: Miss C. McMillan

Solicitors for the applicant: Dunhill Madden Butler

Counsel for the respondent: Mr A. Archibald, QC

Mr J.E. Middleton

Solicitors for the respondent: Arthur Robinson and
Hedderwicks

Counsel for the appellants: J.D. Heydon QC with
Mr H.K. Insall

Solicitors for the appellants: A.G. Robinson and Associates

DECISION

In these proceedings The National Mutual Life Association of Australasia Limited ("National Mutual") challenges the validity of a general meeting of shareholders which has been requisitioned for 23 February 1991.

2. National Mutual is one of the largest financial institutions in the country, having in excess of 1.3 million members and net assets of $21.8 billion. It was incorporated in Victoria as a company limited by guarantee on 12 August 1869. At a general meeting held on 12 September 1990 a resolution was passed that the company change to a company limited by shares and guarantee. Such resolution was authorised by s.69(1) of the Companies (Victoria) Code which provided as follows:

(1) (Permissible changes of status) Subject to this section -
(a) an unlimited company may convert to a limited company
if it was not, within the previous 3 years, a limited
company that became an unlimited company pursuant to
paragraph (e) or any corresponding provision of a
previous law of the Territory;
(b) a no liability company all the issued shares in which
are fully paid up may convert to a company limited by
shares;
(c) a company limited by shares may convert to a company
limited both by shares and by guarantee;
(d) a company limited by guarantee may convert to a
company limited both by shares and by guarantee; and
(e) a limited company may convert to an unlimited company.

3. As part of the legislative process for the change of status s.69(2) made provision for the issuing of a certificate.

(2) (Issue of certificate of incorporation appropriate to
change) Where a company applies in writing to the Commission
for a change of status as provided by sub-section (1) and,
subject to sub-sections 73(11), (12) and (13) as applied by
sub-section (7) of this section, lodges with the application
the prescribed documents relating to the application, the
Commission shall issue to the company a certificate of
incorporation -
(a) appropriate to the change of status applied for; and
(b) specifying, in addition to the particulars prescribed
in respect of a certificate of incorporation of a
company of that status, that the certificate is issued
pursuant to this section;
and, upon the issue of such a certificate of incorporation,
the company is a company having the status specified in the
certificate.

4. In the present case, on 4 October 1990 the Commissioner for Corporate Affairs, as Delegate of the National Companies and Securities Commission, issued such a certificate which relevantly provided:

This is to certify that The National Mutual Life Association of
Australasia Limited which was on the 12th August 1869 incorporated
under the Companies Statute 1864 as a company limited by guarantee
on the 4th October 1990 converted to a company limited both by
shares and by guarantee.

5. On 18 December 1990 a requisition for a general meeting of National Mutual was lodged with the company. It was in the following terms (save only that the sub-headings "Part A" and "Part B" have been added to facilitate this discussion).

We the undersigned members hereby request the Directors to convene
a general meeting of the Company enabling every policyholder
registered as a member to consider:
(Part A)
the Information Memorandum dated 6 August 1990; the conduct of the
proceedings of 12 September 1990; the Capital Raising Plan; the
synopsis of Price Waterhouse advice; reports by the Actuary, the
Auditor, the Directors and their duties to members; the Company's
liabilities through subsidiaries acting as trustees and the
effects as could be shown in the Company's financial statements;
the Directors' benefits, remuneration and position particularly in
relation to investments by the Company and its subsidiaries; a
review of the eligibility to hold office of each Director; removal
and appointment of Directors at the Annual General Meeting;
relevant correspondence and legal opinions tabled for inclusion in
the minutes;
(Part B)
and for the object of passing, if the members deem fit, the
following members' resolution intended to be proposed as a Special
Resolution -
"That if the motions to change the status of the Company
proposed by the Board of Directors on 12 September 1990 at 123
Collins Street, Melbourne constitute resolutions, they be
rescinded and renounced as never having had any effect, because
they involved:
(1) no change the Company's Memorandum,
due to a written notice of a general meeting specifying the
intention to propose a special resolution to alter the Memorandum
not being posted to all members whose names were, at the time of
posting of the notice, known to the Company as required by
sub-section 73(6) of the Companies (Victoria) Code, and Court
dispensation from this requirement not being obtained under
sub-section 73(7), thus the manner of the proposed alteration to the
Memorandum was otherwise than as provided by the Code as dealt
with by sub-section 72(1), and therefore the proposal failed to
comply with sub-section 69(7);
(2) deliberately keeping the members uninformed,
specifically, 99% of members were denied any detailed information
on the proposed motions through conscious neglect of arrangements
required to be made under Section 140 of the Life Insurance Act
1945, and apart from agents and employees, those members with
notice of the proposed motions, received such inadequate
information that it would be extraordinary for them to understand
the implications or to cast properly informed votes, either
personally or by proxy;
(3) ambitions at the expense of duties to members,
as members were not informed how the proposed motions would
effectively remove certain of their rights and the Directors could
appropriate control of the Company, to the detriment of the role
of members and the extent of their participation in a mutual
society;
(4) no professional endorsement
in particular, there was no independent expert advice recommending
the proposed motions to the members, and the Directors did not
disclose any independent expert advice or legal opinion which
commends the proposed motions or their manner of implementation;
and because
(5) unilateral action by the Directors presuming authority
namely on the day, none of the members had the opportunity to
collectively hear, consider and vote, in a way which would reflect
their informed preferences at a general meeting of members.

6. Attached to the requisition were over 300 signatures of members of National Mutual, including the second respondent, George Henry Hallas ("Mr Hallas"). The first respondent Peter Grenfell Windsor ("Mr Windsor") did not sign the requisition. The general meeting was sought to be convened under section 246 of the Corporations Law which relevantly provides as follows:

(1) (Requisition by members) The directors of a company,
notwithstanding anything in its articles, shall, on the
requisition in writing of:
(a) in the case of a company having a share capital - at
least 100 members holding shares in the company on
which there has been paid up an average sum, per
member, of at least $200;
(b) in the case of a company not having a share capital -
at least 200 members; or
(c) in either case - a member who is entitled, or members
who are together entitled, to at least 5% of the total
voting rights of all the members having at the date of
the deposit of the requisition a right to vote at
general meetings;
as soon as practicable convene a general meeting of the
company to be held as soon as practicable but, in any case,
not later than 2 months after the date of the deposit of the
requisition.
(2) (Contents of requisition). The requisition shall state the
objects of the meeting and shall be signed by the
requisitioning member or members and deposited at the
registered office of the company, and, where there are 2 or
more requisitioning members, may consist of several
documents in like form each signed by 1 or more of the
requisitioning members.
(3) (Requisitionists may convene general meeting). If the
directors do not, within 21 days after the date of the
deposit of the requisition, proceed to convene a meeting,
the requisitioning member, or, where there are 2 or more
requisitioning members, those members or any of them
representing more than 50% of the total voting rights of all
of them:
(a) may, in the same manner as nearly as possible as that
in which meetings are to be convened by directors,
convene a meeting; and
(b) for the purposes of convening a meeting as provided by
paragraph (a), may request the company to supply a
written statement setting out the names and addresses
(so far as they are known to the company) of the
persons who, at the date of the deposit of the
requisition, were entitled, under subsection 247(4) or
a provision of the articles of the company, to receive
notice of general meetings of the company.
(4) (Directors to send statement to persons who request it)
Where a request for a statement is made to a company under
paragraph (3)(b), the directors of the company shall send
the statement to the person or persons who requested the
statement within 7 days after the day on which the request
is made.
(5) (Time to hold requisitioned meeting) A meeting convened by
a requisitioning member or requisitioning members in
accordance with subsection (3) shall not be held more than 3
months after the date of the deposit of the requisition.
(6) (Reasonable expenses of requisitionists) Any reasonable
expenses incurred by the requisitioning member or members by
reason of the failure of the directors to convene a meeting
shall be paid to that member or those members by the
company, and any sum so paid shall be retained by the
company out of any sums due or to become due from the
company by way of fees or other remuneration in respect of
their services to such of the directors as were in default.
(7) and (8) ........

7. A meeting was in fact held on 23 January 1991. As will appear, there is a dispute as to whether National Mutual gave valid notice of the meeting. It was publicised (to use a neutral term) by advertisements which appeared in various Australian and New Zealand newspapers on 8 January 1991 in the following terms:

On 18 December 1990 National Mutual received a requisition under
section 241 of the Companies (Victoria) Code signed by in excess
of 200 policyholders requiring a general meeting of the Company.
The requisition contains a proposed resolution, the substantive
part of which is that the change in status of the Company effected
after the Extraordinary General Meeting held on 12 September 1990
be "rescinded and renounced". National Mutual has received legal
advice that this resolution cannot properly be put to a general
meeting of the Company because the relevant legislation does not
permit a company limited both by shares and by guarantee, as
National Mutual now is, to convert its status to a company limited
by guarantee alone.
Accordingly, the requisitioned General Meeting can consider only
that part of the requisition which may properly be dealt with in
general meeting.
The Directors of National Mutual have resolved to convene a
General Meeting in accordance with the Members' Requisition for
the purpose of considering such of the matters referred to in the
first part of the Members' Requisition (which, excluding
references to the proposed resolutions, is set out in the notice
below) as may be properly put to the meeting. The General Meeting
will be held on the first floor, 447 Collins Street, Melbourne,
Victoria, Australia on 23 January 1991 at 4.00pm.
Baillieu Myer, Chairman
Notice of Meeting
Notice is given that in pursuance of a requisition by members
under section 241 of the Companies (Victoria) Code, a General
Meeting of The National Mutual Life Association of Australasia
Limited will be held on the first floor, 447 Collins Street,
Melbourne, Victoria, Australia on 23 January 1991 at 4.00pm.
The terms of the first part of the Requisition are as follows:
"We the undersigned members hereby request the Directors to
convene a general meeting of the Company enabling every
policyholder registered as a member to consider: the
Information Memorandum dated 6 August 1990; the conduct of
the proceedings of 12 September 1990; the Capital Raising
Plan; the synopsis of Price Waterhouse advice; reports by
the Actuary, the Auditor, the Directors and their duties to
members; the Company's liabilities through subsidiaries
acting as trustees and the effects as could be shown in the
Company's financial statements; the Directors' benefits,
remuneration and position particularly in relation to
investments by the Company and its subsidiaries; a review of
the eligibility to hold office of each Director; removal and
appointment of Directors at the Annual General Meeting;
relevant correspondence and legal opinions tabled for
inclusion in the minutes..."
The object of the General Meeting shall be to consider such of
these matters as may properly be the subject of a general meeting
of the Company.
By order of the Board
B P Strong, Secretary, 8 January, 1991
Proxies
A member entitled to attend and vote at a general meeting is
entitled to appoint a proxy to attend and vote instead of the
member.
A proxy need not be a member.
Proxy forms must be lodged at the registered office of National
Mutual, 447 Collins Street, Melbourne, Victoria, Australia at
least 48 hours before the meeting. Proxy forms are available at
National Mutual's office at 447 Collins Street, Melbourne; 44
Market Street, Sydney, 144 Edwards Street, Brisbane, 80 King
William Street, Adelaide; 111 St George's Terrace, Perth; 119
Macquarie Street, Hobart; 15 London Circuit, Canberra.
National Mutual
The National Mutual Life Association of Australasia Limited

8. In any event, it appears that none of the requisitionists attended. As the advertisement indicated, National Mutual, having consulted its legal advisers, took the view that the matters contained in Part B of the requisition could not be validly dealt with at the general meeting. The matters in Part A of the requisition were dealt with by the chairman of the meeting referring those present to the topics mentioned and inviting discussion. This invitation was not accepted. There was in fact no discussion.

9. On 1 February 1991 a notice appeared in "The Australian" newspaper and "The Dominion" newspaper in Wellington, New Zealand in the following terms:

NATIONAL MUTUAL LIFE ASSOCIATION
On 18 December 1990 National Mutual received a requisition under
Section 241 of the Companies (Victoria) Code signed by in excess
of 300 policyholders requiring a General Meeting of the Company
for the object of passing, if the members deem fit, a members
resolution intended to be proposed as a special resolution. On 23
January 1991 National Mutual held a meeting, but did not give such
notice of the meeting as is required by law in the case of special
resolutions. That meeting is therefore deemed by law not to be
duly convened by the directors for the purpose of the requisition.
Also on 29 January 1991 National Mutual held an Annual General
Meeting, but did not give notice of ten other special resolutions
intended to be proposed by members. Accordingly the
requisitionists are now proceeding to convene a meeting as
provided for by law in such circumstances.
NOTICE OF MEETING
Notice is given that in pursuance of a requisition by members, a
general meeting of the National Mutual Life Association of
Australasia Limited will be held in the Conference Room of the
Wilson Centre, 61 Railway Street, Gatton, Queensland, Australia on
23 February at 8.30pm.
The business of the meeting shall be:
1. To consider the information memorandum dated 6 August 1990:
The conduct of the proceedings of 12 September 1990: The
capital raising plan: The synopsis of Price Waterhouse
advice: Reports by the Actuary, the Auditor, the Directors
and their duties to Members: The Companys liabilities
through subsidiaries acting as trustees and the effects as
could be shown in the Companys financial statements: The
Directors benefits, remuneration and position particularly
in relation to investments by the Company and its
subsidiaries: A review of the eligibility to hold office of
each Director: Removal and appointment of Directors at the
Annual General Meeting: Relevant correspondence and legal
opinions tabled for inclusion in the minutes.
2. To consider and if the members deem fit, pass a members
resolution as a special resolution, the substance of which
is that if the motions to change the status of the Company
proposed by the Board of Directors on 12 September 1990 at
123 Collins Street, Melbourne constitute resolutions, they
be rescinded and renounced as never having had any effect
for reasons including: The members were not properly
informed about the Directors proposals, no independent
professional endorsement for their proposals was available
to members, and the memorandum of association was not
changed to give effect to their proposal because all members
were not served notice in writing of a general meeting for
that purpose.
3. To consider and if the members deem fit, pass special
resolutions, the substance of which are to
(a) Direct the Company to serve notice on every member in
writing no later than 1 May 1991 of a General Meeting
to be held for the purpose of deciding: If the status
of the Company is to be converted from a Company
Limited by guarantee to a Company Limited both by
shares and by guarantee: and, if the memorandum of
association should be amended as proposed by the
Directors on 12 September 1990;
(b) Ratify all proper and correct acts by the Directors
anticipating the change of status and amendments to
the memorandum, if the resolutions forecast by (a) are
carried;
(c) include in the articles of association to be presented
for adoption by the general meeting convened pursuant
to the resolution outlined in (a), articles to
delineate the rights of members in relation to the
performance by Directors of their fiduciary duties,
and to provide safeguards for members effectively
enforcing performance of such duties, and to safeguard
the company;
(d) implement an independent investigation of the
application of Company assets, the report of which is
to be represented for consideration by the members in
general meeting later in 1991;
(e) determine what liabilities should be disclosed on the
Companys balance sheet in relation to superannuation
trusts controlled by the Company;
(f) Remove all Directors from their office of Director;
(g) Appoint Messrs Windsor, O'Brien and Stott as
Directors.
4. Such other matters arising out of the foregoing which any
member present in person or by proxy, raises for
consideration by the meeting.
THIS NOTICE IS GIVEN BY P G WINDSOR
CHAIRMAN OF THE NMLA POLICYHOLDERS COMMITTEE AND PROXY FOR THE
REQUISITIONING MEMBERS
1 FEBRUARY 1991
PROXIES
A member entitled to attend and vote at a general meeting is
entitled to appoint a proxy to attend and vote instead of the
member, a proxy need not be a member, proxy forms must be lodged
at the Registered office of National Mutual, 447 Collins Street,
Melbourne, Victoria, Australia at least 48 hours before the
meeting. Proxy forms are available upon written request to: The
NMLA Policyholders Committee, GPO Box 960, Brisbane, QLD, 4001.

National Mutual's case

10. National Mutual contends that it is not legally possible for a company limited by shares and guarantee to convert itself into a company limited by guarantee. It says that directors have no obligation to call a general meeting to deal with business which cannot be legally effectuated at the meeting (Turner v Berner (1978) 1 NSW LR 66, 67-68, 71, 72, Queensland Press Ltd v Academy Instruments No. 3 Pty Ltd (1987) 11 ACLR 419) and that therefore the directors were under no obligation to submit the matters contained in Part B of the requisition to the meeting on 23 January or to give notice of them. It says it did convene the meeting insofar as it was legally required to do within two months of receipt of the requisition and that therefore the pre-condition for a meeting convened by requisitionists under s.246(3) does not exist because the directors have proceeded to convene a meeting.

11. It says that there is no other legal basis under the articles of association or under statute whereby the requisitionists can convene a meeting of the company. National Mutual accepts that shareholders of the company are free to meet together and discuss the affairs of National Mutual but that unless the requirements of the articles and the statute are complied with there is no meeting of the company.

12. National Mutual does not seek to restrain the requisitionists' meeting proceeding on 23 February as advertised but to avoid the inconvenience and confusion which might otherwise arise it seeks an early ruling from this Court that such a meeting will not constitute a meeting convened pursuant to s.246(3) of the Corporations Law and injunctions (in substance) restraining the respondents from representing that the meeting has that status. Alternatively, National Mutual argues that the advertisement of 1 February could not validly convene a meeting because of certain defects in form and service. It also challenges the authority of Mr Windsor, who did not sign the requisition himself, to convene the meeting.
The Respondents' case

13. The respondents argue that s.247(4) of the Corporations Law has the effect that mere advertisement of the notice of meeting is not enough. Actual service of the notice is required. In any case they say that the meeting could validly deal with the proposed resolutions in Part B of the requisition, or at least some of them, and that the directors acted wrongly in not putting such resolutions to the meeting. Therefore they say the meeting of 23 January was not validly convened, with the consequence that the requisitionists are entitled by s.246(3) to convene the meeting of 23 February.

14. Can a company limited by shares and guarantee convert to a company limited by guarantee?

15. This question arises because National Mutual, believing that such conversion was not legally possible, did not give notice of the proposed resolutions in Part B of the requisition or put them to the meeting of 23 January.

16. There are conflicting authorities on the point. Vincent J. in the Supreme Court of Victoria has held that a change of status not expressly provided for by s.69(1) of the Companies (Victoria) Code could nevertheless be effected as part of a scheme of arrangement under s.315 of the Code: Re Bamboo Gold Mines Ltd (1987) 5 ACLC 631. Johnston J. in the Supreme Court of South Australia in Re Insight Mining Pty Ltd (1987) 11 ACLR 704 took the contrary view. If it became necessary, I would, with respect, prefer the reasoning in the latter case, mainly because it is based on a careful examination of the policy reasons which might explain why the statute permits some forms of status conversion but not others. Detailed argument of this kind was not put to Vincent J. But whatever be the position, it is important to note that both cases covered a proposed change of status in the context of a scheme of arrangement. In each case the court had to consider whether the widely expressed powers relating to schemes of arrangement conferred power to effect the particular change of status notwithstanding the lack of reference to such a kind of change in s.69(1). In the present case of course no scheme of arrangement is involved and in my view there is no basis for concluding that the change of status, which is not one of the ones mentioned in s.69(1) (those being only nine out of a possible twenty, as Johnston J. pointed out: 11 ACLR at 709) could be lawfully achieved.

17. Was proper notice given of the meeting of 23 January 1991? The relevant statutory provision concerning notification of general meetings is s.247(4) of the Corporations Law, which provides:

(4) (Service of notice) So far as the articles do not make
other provision, notice of every meeting shall be served on
every member having a right to attend and vote at the
meeting in the manner in which notices are required to be
served by Table A.

18. National Mutual acted in accordance with Articles 53 and 156 of its Articles of Association, which provide:

53. Subject to the provisions of the Code as to short notice, at
least 14 days' notice of a general meeting or, in the case
of a general meeting convened for the purpose of considering
a special resolution, at least 21 days' notice shall be
given to the members in the manner provided by Article 156.
156. Subject to the Life Insurance Act, notice of every general
meeting shall be given by the Association to members by
advertisement in at least one daily newspaper published in
each of the capital cities of the States of Australia and in
Wellington New Zealand.

19. I am told that an article like Article 156 is not uncommon among life insurance companies, a type of company which National Mutual historically was, and to a large extent still is. Such an article is to be contrasted with Article 95 of Table A in Schedule 1 to the Corporations Law, which provides:

(1) A notice may be given by the company to any member either by
serving it on him personally or by sending it by post to him
at his address as shown in the register of members or the
address supplied by him to the company for the giving of
notices to him.
(2) Where a notice is sent by post, service of the notice shall
be deemed to be effected by properly addressing, prepaying,
and posting a letter containing the notice, and to have been
effected, in the case of a notice of a meeting, on the day
after the date of its posting and, in any other case, at the
time at which the letter would be delivered in the ordinary
course of post.
(3) A notice may be given by the company to the joint holders of
a share by giving the notice to the joint holder first named
in the register of members in respect of the share.
(4) A notice may be given by the company to a person entitled to
a share in consequence of the death or bankruptcy of a
member by serving it on him personally or by sending it to
him by post addressed to him by name, or by the title of
representative of the deceased or assignee of the bankrupt,
or by any like description, at the address (if any) within
the Territory supplied for the purpose by the person or, if
such an address has not been supplied, at the address to
which the notice might have been sent if the death or
bankruptcy had not occurred.

20. It is common ground of course that National Mutual did not, in terms of s.247(4), serve on any member notice of the meeting of 23 January "in the manner in which notices are required to be served by Table A". Thus no question of substantial compliance arises, as was the case for example in Holmes v Life Funds of Australia Ltd (1971) 1 NSW LR 860. This case raises no factual issue as to whether any, and if so how many, National Mutual members did not read the advertisements of 8 January and were otherwise unaware of the meeting of 23 January. Either the method of giving notice adopted by National Mutual was valid or it was not. If it was valid, it is not to the point that (as may readily be assumed to be the case) a not insignificant number of the 1.3 million members were not in fact aware of the meeting. It was on these grounds of relevance that I rejected the tender by Mr Searle on behalf of the respondents of an affidavit of Ross Antony Donaldson sworn on 20 February 1991 which deposed (on a hearsay basis) to lack of awareness by a number of National Mutual members of the meeting of 23 January.

21. The critical question then becomes whether Article 156 does "make other provision" in relation to the service of notices with the consequence that the provisions of Table A do not apply.

22. In my opinion Article 156 does make such "other provision".

23. The Articles of Association expressly exclude Table A (see Article 2). Thus the Articles of Association are intended to be read as a comprehensive set of regulations governing the administration of the company, and of course constitute a contract between the company and its members: Corporations Law s.180(1)(a).

24. Article 156 is to be found in a group of Articles (Articles 155-158 both inclusive) under the sub-heading "Service of Documents". Some of the other Articles in the group do provide for service by post; see Article 155(1) which deals with a "policy, cheque or other document (not being a notice of general meeting)" and Article 158(d) dealing with service of various kinds of legal process.

25. I think Article 156 must be construed in this contractual setting. The position is therefore analogous to that dealt with by the Victorian Full Court in Alexander v Stocks and Holdings Ltd (1975) VR 843, where parties to a contract stipulate that a particular mode of service by one party should have a given consequence whether or not the document in question in fact comes to the notice of the other party. The position is different from that which arose in a number of cases cited by Mr Searle where rules of court provided for particular modes of service but in fact the writ (to the knowledge of the plaintiff) did not come to the notice of the defendant: Deputy Commissioner of Taxation v Abberwood (1990) 90 ATC 4255.

26. I do not see any relevant distinction between the "giving" and "serving" of a notice: In re 88 Berkeley Road NW9 (1971) Ch 648, 652-3, cited by Lush J. in Alexander (1975) VR, 854. Both concepts involve bringing the notice to a person's attention. Thus when Article 156 speaks of the giving of notice to members in the way specified it seems to me that it is a provision dealing with the same subject matter as s.247(4). Also it was not suggested on behalf of the respondents that, as a matter of language, it is not possible to speak of the serving or giving of notice by advertisement. Often orders for substituted service require service by advertisement in newspapers, and even the most pedantic of jurists do not quibble at the use of the word service in that context.

27. Any legal framework for the regulation of the affairs of incorporated bodies would need to provide for meetings and, as an essential component, the means by which members are to be informed about meetings and the business proposed to be conducted at them. Section 247(4) fulfils that requirement. The company can make provisions for service in its Articles but, if it does not, the provisions of Table A are to apply. This is but a specific example of a very long established feature of companies legislation. A pro forma set of internal regulations is provided, but corporators are permitted to replace those regulations, in whole or in part, with regulations which suit the circumstances of their company.

28. I do not think s.247(4) is to be read as though it enshrines actual personal service as the proper method of service of notices of general meetings, subject only to some limited indulgence which allows service by post in the terms of Article 95 of Table A. Where the latter article, or one in similar terms, applies, one would think that as a matter of practicality service would in fact usually take place by post except where there was only a handful of members.

29. For the reasons I have mentioned, and in particular the contrasting terms of Article 155(1), and the direction contained in Article 53, National Mutual's Articles of Association evince a clear intention that service of notices of general meetings shall not be by personal service or by post, but shall be by advertisement. Arguments can be advanced either way as to the practicality and desirability of such a provision, but that is a matter of contract between the company and its members. The respondents would, I think, have to go to the lengths of establishing that such a contractual provision is invalid, or at least unenforceable to the extent that it conflicts with s.247(4). On the contrary, it seems to me that the clear intention of s.247(4) is that the articles may make any provision about service which is thought convenient. Article 156 is such a provision.

30. There is some force in Mr Searle's point that s.246(3)(b) seems to assume that a company will be sending notices of general meeting by post and will therefore have lists of names and addresses of members for that purpose. But I think on closer examination the provision does not exclude the possibility that there may be a company where no members are entitled to receive notices of general meeting because s.247(4) does not apply and there is no relevant provision in the articles. On that view s.246(3)(b) and (4) simply say that if the names and addresses are held by the company it must supply details of them to requisitionists in the manner indicated. The company could in such a case comply with s.246(4) by supplying a written statement to the effect that there are no persons entitled to receive notice of general meetings.

31. Reference should also be made to the decisions of McLelland J. and the NSW Court of Appeal in L.C. O'Neill Enterprises Pty Ltd v Toxic Treatments Ltd (1986) 4 NSW LR 660. That case and other NSW cases (Re Totex-Adam Pty Ltd (1980) 1 NSW LR 605 and Vision Nominees Pty Ltd v Pangea Resources Ltd (1988) 14 NSW LR 38) deal with the expression "so far as the articles do not make other provision". The conflicting views are that (a) the relevant power contained in the statutory provision prefaced by that expression (in O'Neill s.242 of the Code) is excluded when the articles contain any provision on the relevant subject matter or (b) it is necessary to find an inconsistent provision in the articles. Whatever be the correct view, I think that the provisions of the National Mutual Articles of Association are inconsistent with s.247(4). Read as a whole, the articles require service by advertisement to the exclusion of any other means. I think this is permitted by s.274(4), which is not in my opinion to be read as though it makes some particular mode of service mandatory with permission only to make "other provision" as to the manner of such service.

32. The reference in the opening words of Article 156 is given meaning by reference to s.140 of the Life Insurance Act 1945 which deals with postal voting. Such provisions are of course not inconsistent with notification of meetings and the right to vote thereat being given by advertisements rather than personal service or service by post. This is precisely what happens at Federal, State and Municipal elections. I note also that s.140 is expressed to apply "(n)otwithstanding anything contained in.... the articles of association" - a further indication that the proviso to Article 156 has the meaning I have suggested. I do not think s.146 of the Life Insurance Act, which does provide for service by post, is relevant. That provision deals with notices "required or permitted by this Act to be given to or served upon a person" - i.e. required by the Life Insurance Act.

33. Were any matters wrongly withheld from the meeting of 23 January? In my opinion the words in Part B of the requisition "motions to change the status of the Company proposed by the Board of Directors on 12 September 1990" is not to be read as a reference to all the resolutions which were passed at that meeting. As a matter of ordinary language, the expression refers only to those motions which sought to effect a change of status, and not to motions which dealt with consequential matters, albeit very essential matters. Therefore if National Mutual was correct in the view that the change of status could not be legally reversed, as I think it was, it was entitled to refrain from giving notice of the matters in Part B or putting them to the meeting. I should add that the items numbered (1) to (5) in the requisition are plainly arguments supporting the desired reversal of the change of status and are part of the "object" as set forth in Part B for the purposes of s.246(2). That particular "object" in my view could not validly be the subject of a general meeting.

34. What matters can be validly dealt with at the 23 February meeting? On the view I have taken it is not necessary to decide this point, but it is conceded by National Mutual that at least one matter could be dealt with (the election of directors). But for the reasons I have given the meeting itself has not been validly convened because the prior meeting of 23 January was valid.

35. Defects in notice and service for the 23 February meeting For the same reasons it is not necessary to decide this matter. However, because there was some argument on the point, I should say that it was urged by Mr Finkelstein QC for National Mutual that the requisitionists' notice of 1 February was not "published" as required by Article 156 because "The Australian" newspaper was not "published" in Hobart.

36. The evidentiary basis of this submission is not clear. As I understand it, it seems to be suggested that because "The Australian" was not printed in Hobart, it was not "published" there. I may not be doing full justice to Mr Finkelstein's submission, but in any case I think Mr Searle was clearly right in submitting that "published" in this context is to be used in the same sense as it is in the law of defamation, and that it is sufficient if the daily newspaper in question is sold or made available for sale in the relevant State.
Free Speech

37. I repeat again that this case is not concerned with the right of requisitionists or anyone else to meet and discuss the affairs of National Mutual. Plainly there are some grievances, but this case has not been concerned with the validity or otherwise of those grievances, nor has the case been concerned with the bona fides of the requisitionists. The case is solely concerned with the issue whether the meeting of 23 February would be a valid general meeting of National Mutual.
Delay

38. At a late stage in the hearing of this matter Mr Searle urged that, as a matter of discretion, even if I came to the conclusion that the substantial relief sought by National Mutual should be granted, I should make no order but adjourn the proceedings pending the outcome of the meeting.

39. Mr Searle does make some point of the fact that, if the requisitionists cannot hold a valid meeting following on their requisition in December, the change of status will mean that in effect some 50,000 requisitionists will be needed to require any meeting hereafter.

40. That may well be the case, but as Mr Finkelstein QC points out we are not concerned here with the validity or otherwise of any resolutions which might be passed at the meeting of 23 February. Were that the case it would obviously make sense to wait and see what motions or perhaps amendments thereto were in fact passed. The issue in this case rather is the validity of the meeting itself and I accept that National Mutual have a legitimate interest in having this determined prior to the scheduled date of the meeting, if it is possible to have the matter properly litigated in that short time.

41. In this context I must note that the matter was mentioned initially at a directions hearing on 11 February and there was no suggestion at that stage that the case should not proceed to a hearing at some time in the week commencing 18 February, as sought by National Mutual.

42. For those reasons, having come to the conclusion that I have, I think it is appropriate that I make relevant declarations, and other relief as sought. However, I note that at a late stage Mr Finkelstein abandoned National Mutual's claim under the Trade Practices Act and the Fair Trading Acts, and also any claim for relief which would in essence require the respondents at their own expense to publish advertisements withdrawing notice of the meeting.

43. I therefore grant the following relief:
1. Declare that the meeting convened to be held in the conference

room of the Wilson Centre, 61 Railway Street, Gatton, Queensland
at 8:30pm on 23 February 1991 will not constitute a general
meeting of the applicant.

2. Declare that the meeting is not a meeting convened pursuant to

s.246(3) of the Corporations Law.

3. Declare that any costs or expenses incurred in convening the

meeting are not expenses which are required by s.246(6) of the
Corporations Law to be paid to the requisitioning members by the
applicant.

4. Declare that any resolution passed at the meeting will not

constitute a resolution of the members of the applicant.

5. Restrain each respondent by himself or by his servants or agents

or otherwise howsoever from making or causing to make any
representation whether in any advertisement, letter, notice or
otherwise that -
(a) the meeting will constitute a general meeting of the
applicant; or
(b) any resolution passed at the meeting will constitute a
resolution of the members of the applicant.

Costs

44. I accept what Mr Finkelstein says as to the lack of any suggestion of improper conduct on behalf of his client. No such suggestion is made or could be made. I accept, of course, that ordinarily the successful party recovers his costs.

45. Nevertheless, there are some unusual features of this case. While I have found that the applicant's legal submissions are valid, the case has not been without difficulty and there is to my mind a public interest element, having regard to the very large number of members of this company, more in number than one or two of the Australian States. The question of the kind of notice of general meetings members are entitled to get does involve a matter of public interest and takes this case outside the usual run of cases.

46. In all the circumstances I propose to make no order as to costs.