Friday 10 June 2016

Australia: resolutions to remove directors of public companies

Judgment was given several days ago by Justice Beach, sitting in the Federal Court, in the case State Street Australia Ltd in its capacity as Custodian for Retail Employees Superannuation Pty Ltd (Trustee) v Retirement Villages Group Management Pty Ltd [2016] FCA 675. At issue was the operation of section 203D of the Corporations Act 2001, which provides certain rules concerning the removal of directors from public companies. Beach J held that whilst section 203D was "mandatory in the sense that it overrides a company's constitution to the extent of any consistency, it does not provide an exhaustive codification of the mechanism for removal" (para. [16]). In reaching this view, Beach J refused to follow the earlier authority of Scottish and Colonial Ltd v Australian Power and Gas Co Ltd [2007] NSWSC 1266.

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