Henderson v Bank of Australasia

Facts

• A meeting of the Bank of Australasia was convened by notice.
• The notice was alleged to be defective in that it did not adequately disclose the nature of the special business to be transacted.
• A resolution was passed at the meeting purporting to authorise certain acts.
• The validity of the resolution was challenged on the ground that the notice was deficient.

Issue

1. Whether a resolution passed at a meeting convened by defective notice is valid, and what degree of specificity is required in notices of general meetings.

Held

• The Court held that the notice was defective as it failed to give adequate information to members about the business to be transacted. A resolution passed on the basis of inadequate notice is invalid. Members are entitled to sufficient information to make an informed decision about whether to attend and how to vote.

Ratio Decidendi

The notice of a general meeting must contain sufficient information to enable members to understand the nature of business to be transacted and make an informed decision. Where the notice is defective, in length of time, specificity, or disclosure, the resulting resolution is vitiated. Procedural compliance is not a mere formality; it is the mechanism by which members exercise their democratic rights in the company, and its breach undermines the legitimacy of corporate decision-making.