This case illustrates that while there are strict time limits for calling and holding an extraordinary general meeting requested by a company’s members, a Court will exercise its discretion under section 1322(4)(d) of the Corporations Act 2001 (Cth) to extend the time periods to coincide with an already scheduled meeting (with significant costs and inconvenience savings for the company) provided that the delay does not cause any substantial injustice to any person.
On 25 June 2012, Woolworths Limited (Woolworths) received notices signed by 210 of its shareholders (including GetUp Limited (GetUp)) requesting it to call a general meeting to consider a special resolution to amend the stated objects and purposes in the Woolworth’s constitution (to be effective from 1 January 2016) and issue a statement about the proposed resolution.
Under section 249D of the Corporations Act 2001 (the Act), Woolworths was required to call the requested meeting within 21 days after, and hold the meeting within 2 months after, the request was made. Woolworths applied under section 1322(4)(d) of the Act for an extension by approximately 3 months to coincide with its scheduled 2012 annual general meeting. Woolworths’ concerns included the costs and inconvenience of calling and holding a separate meeting of its more than 302,000 shareholders.
The Court observed that its discretion under s 1322(4)(d) of the Act was conditioned in this case only by the requirement that no substantial injustice be caused to any person. The Court noted that:
- “injustice” involved a real and not merely insubstantial or theoretical prejudice;
- a degree of prejudice to a person may be outweighed by an “overwhelming weight of justice”; and
- the mere fact of delay does not amount to substantial injustice.
While GetUp conceded that the contemplated delay in this case would not cause prejudice, it claimed that the cost and inconvenience of a separate meeting did not pass the threshold for an exercise of the Court’s discretion. However, the Court considered that the fact that Woolworths could substantially avoid the costs and inconvenience by holding the meeting on the same day as its scheduled annual general meeting only 3 months later (a fairly short delay given that the amendments were not be effective until 1 January 2016) without causing any prejudice or substantial injustice enlivened its discretion under section 1322(4)(d). The Court therefore granted the extension order.
See the case.