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Spark Infrastructure Holdings No 1 Ltd [2010] NSWSC 1497

by Martha.Ware 19. January 2011 12:11

Facts

At a meeting to vote upon a scheme of arrangement pursuant to Part 5.1 of the Corporations Act, a small number of persons attending the meeting by proxy purported to vote both for and against the scheme by splitting their votes.

 

While the numbers involved did not affect the overall outcome, the Court was asked to determine how such votes should be treated.


Outcome

Creditors: Section 411(4)(a)(i) of the Act provides, inter alia, that for the resolution to be passed a “majority in number” is required. The underlying assumption is, therefore, that a person voting cannot vote both for and against a resolution: [9]-[14]. A person cannot split their vote as this is not contemplated by the section and is to be regarded as not having voted: [17].

 

Members: With regard to ss 250H and 411(4)(a)(ii)(A) and (B), a split vote may be made but the resolution cannot be held to be both “passed” and “not passed” by a particular member who split their vote: [21]-[25]. Rather they would be counted as having voted, but as being a person who has not “passed” the resolution.

 

Note the criticism of the headcount test in the Law Counsel of Australia submission to CASAC discussed briefly at [29] with regard to investors who have invested through nominees or depository arrangements.

 

Relevant paragraphs of Ford

[7.530], [23.620], [24.071], [24.090]

Tags:

Ford's Principles of Corporations Law



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