A lack of formality in relation to a change of directorship (and associated share transfer) did not persuade the Court to invalidate the actions.  This case illustrates the relatively high standard that will need to be met to displace the assumption in section 1274B(2) of the Corporations Act 2001 (Cth) that a document that purports to have been prepared by ASIC (ie a company extract generated on the basis of a lodged Form 484) is proof of such matters.  Officers should ensure any seemingly informal arrangements are formalised, to reduce the risk of subsequently finding their resignation has been effected.

Mrs Shaw had been appointed as a director and shareholder of Essendon Apartment Developments Pty Ltd (Essendon) by Ms McGuire.  While Ms McGuire held no interest in Essendon, she had been instrumental in the purchase of Essendon and for this reason had developed the power to appoint directors.  There was no value attributed to the share in Essendon and it was always just assumed that it was part and parcel of the directorship.

After Ms McGuire sought to replace Mrs Shaw as director of Essendon, there was some rather confusing events and discussion which resulted in lodgement by Mr Smit of a Form 484 with ASIC recording the resignation of Mrs Shaw and the appointment of Mr Smit, as well as the transfer of the Essendon share from Mrs Shaw to Mr Smit, all effective on 17 May 2012.  Mrs Shaw alleged that her removal, and the appointment of Mr Smit as director, were invalid.

After unravelling the facts, Randall AsJ in the Supreme Court of Victoria found that:

  • Mrs Shaw appointed Mr Smit orally on 14 June 2012 – she was permitted to appoint a director under the replaceable rules adopted by Essendon either as a director or shareholder and while it would normally be expected for a written resolution to evidence such appointment, there is no requirement as to any formality;
  • on 14 June, Mrs Shaw provided Mr Smit with a signed but undated resignation and on the same date or earlier (possibly 17 May 2012), Mrs Shaw also provided Mr Smit with a signed but undated Form 484 recording her resignation and his appointment as director and the transfer of the share to Mr Smit;
  • even if the resignation was not effective forthwith, Mrs Shaw and Mr Smit intended the resignation to be effective upon Mr Smit determining to become a director;
  • by leaving the resignation undated, Mrs Shaw impliedly or tacitly consented to Mr Smit completing the date when appropriate;
  • Mr Smit only became a director of Essendon on 11 July 2012 when he determined that he would accept the directorship (on the basis that a person cannot become a director until they have consented) and lodged the Form 484 with ASIC;
  • in providing a Form 484 in blank, Mrs Shaw tacitly, if not expressly, authorised its completion to record notice of the transfer the share (notwithstanding the fact that a transfer form was never stamped or lodged for registration in the Essendon share register); and
  • the lack of formality in relation to all of the above was not an impediment to giving notice to ASIC by way of a Form 484.

In light of the above and given that the Court was unable to reach a positive view as to when the Form 484 was provided to Mr Smit or the extent of any conditions attaching to the resignation and the completion of the Form 484, Randall AsJ found that:

  • there was not sufficient evidence contrary to what was recorded on the ASIC database to displace the assumption in section 1274B(2) of the Act that in a court proceeding, a document that purports to have been prepared by ASIC which records facts (ie a company extract generated on the basis of the lodged Form 484) is proof of such matters; but that
  • the Court would entertain an application by Mr Smit under section 1322 of the Act to declare that Mrs Shaw’s resignation and Mr Smit’s appointment took effect on 11 July 2012 rather than 17 May 2012.

See the case.