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I do not accept that the statement of the intention of the Chairman on the proxy form was nonsensical, that is, that it made no sense. It does give rise to an arguable inconsistency within the four corners of the proxy form which is to be resolved by attempting to reconcile the arguable inconsistent provisions on the proxy form by reference to the proper construction of the proxy form, determined objectively.
One or other of resolutions 1 and 11 may have been otiose or in substance a duplication but that was brought about by the Company’s secretary, Mr Neill, adding the resolutions numbered 1, 2 and 3 to the list of resolutions which the 124 shareholders had requested be put before the EGM. Resolutions 1 and 11 were not contradictory; rather they required consideration of the same substantive issue, whether Mr Campbell should be a director of the Company to be addressed twice.
The letter of 27 February 2009 signed by Mr Pursell as Managing Director, not in his capacity as Chairman of the Company or Chairman (or proposed Chairman) of the EGM asked shareholders to reject the proposal to remove the then “entire present Board with the exception of Mr Richard Campbell” and to replace the Board with nominees of the group of shareholders who had requested the calling of the EGM. The letter concluded with a recommendation that shareholders remove Mr Campbell as a Director of the Company and retain the balance of the Board. Undirected proxies voted by the Chairman of the Meeting in favour of resolutions (or items) 4 to 11 would be inconsistent with, or not in accordance with the request and recommendation to shareholders contained in the letter. However the letter, albeit part of the surrounding circumstances leading up to, and resulting in, the completion of the proxy forms by members and their delivery to the Company or to Computershare, does not dictate or require that the intention of the Chairman noted in “STEP 2” of the proxy form be ignored or disregarded. It remains part of the four corners of the proxy form to be construed.
The sample proxy form posted on the Company’s website is to be regarded similarly. It does not have the effect that the intention of the Chairman noted in “STEP 2” of the proxy form is to be ignored or disregarded.
The Company submitted that upon the proper construction of the proxy form alone, one was led to the conclusion that an appointment which did not contain specific directions in “STEP 2” by marking the boxes in “STEP 2” “For”, “Against” and “Abstain” in respect of the eleven items of business gave rise to an appointment in favour of the proxy holder entitling the proxy to act generally at the meeting and to vote as the proxy saw fit.
The Company submitted that the words appearing at the foot of “STEP 2”, “The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business”, did not form part of the direction given by the proxy-giver to the proxy holder upon the proper construction of the proxy form, but merely conveyed a statement of intention on the part of the Chairman of the Meeting.
I consider that the Company’s construction of the proxy form is objectively the correct construction. By marking the box in “STEP 1” appointing the Chairman of the Meeting the proxy, or by not completing that box or the box next to it for the appointment of another person to be the proxy and by not completing or marking any of the boxes in “STEP 2” marked “For”, “Against” and “Abstain”, the member was giving a direction to the Chairman of the Meeting to vote as the proxy, that is as the Chairman, saw fit. By adopting that course the member was not giving the Chairman a direction to vote in favour of each item of business. When one turns to “STEP 2” and the words at the bottom of “STEP 2”, “The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business”, I consider that this was no more than an indication, albeit, at that time, a present indication, of the manner in which the Chairman, whoever that was, intended to vote. I do not consider that an indication of the manner in which the Chairman intended to vote undirected proxies was thereby converted into a “direction” by the shareholder as to how the Chairman should vote.
The “following directions” is a reference to the boxes under the headings “For”, “Against” and “Abstain” headings in “STEP 2”. To be a direction, what is said to be the direction must emanate from the proxy-giver or member. If the member did not mark any of the boxes in the three columns under the “For”, “Against” and “Abstain” headings, the consequence was that no direction had been given by the member. The words at the foot of the section “STEP 2”, “The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business” is not a statement that emanates from the member; rather it is an indication of the intention of the Chairman of the Meeting. So understood, it is not properly described as or referred to as a “following direction”.
It follows, therefore, that consistently with cl 50.6 of the Company’s Constitution the Chairman, as proxy, did not vote on the poll otherwise than in accordance with “any instructions” on his appointment. Further, consistently with s 250A(4)(c) of the Act, the Chairman has not voted the undirected proxies contrary to the way the Chairman was appointed to vote in the proxy form.
It also follows that the Chairman has not acted in breach of such common law duty as he owed to the members or proxy-givers consistently with the appointment contained in the proxy forms.
It is therefore unnecessary to consider the submissions made by the Company as to why the relief sought by the applicants was not available to them if I had found that there was a breach of cl 50.6 of the Constitution, s 250A(4)(c) of the Act or a breach of the common law duty relied on by the applicants.
The application in the originating process should be dismissed and the applicants should pay the respondent’s costs of and incidental to the application.