The applicant, a non-share capital corporation, sought a declaration that a resolution proposed by its voting members to remove certain directors and amend its by-laws was unlawful.
The voting members had requisitioned a special meeting to pass the resolution following a governance review that alleged the directors were in a conflict of interest.
The court granted the application, finding that under the Corporations Act and the applicant's by-laws, the voting members did not have the authority to unilaterally amend the by-laws or reduce the number of directors.
Furthermore, the resolution to remove the directors failed to comply with the procedural fairness and conflict of interest provisions set out in the by-laws.