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rmcmill2 · Aug 25, 2009, 05:27 AM

I just have a question that is probably really easy but I just want to confirm my thoughts.
Please if anyone can correct me or anything to help. Thanks :)

If a constitution allows directors to issue shares to anyone and the members want to amend this clause so that they are offered to members first, can the directors refuse to hold a general meeting to amend the constitution?

I thought that no - they can't, as it is the members' right to amend the constitution if passed by special resolution, s136 (Aust. Corp Act).

However, there is a case NRMA v Parker where the constitution provided the directors with authority to determine the election process for appointing new directors. The majority of members requested a change to this method.
The directors refused and the courts held that the directors were OK to refuse as it was unconstitutional for the members to decide such a thing.

What is the difference between the two? I know that members cannot interfere with the directors management role in rr s198, so I am guessing that somehow the situation in the NRMA case must be a management role and that is why the members were not allowed to interfere? But appointing new directors is generally the role of members, so why is it OK for the members to amend the constitution to suit them in the 1st case (pre-emption clause) but not in the NRMA case (method of electing directors)?

This part confuses me and I should have gotten on top of it earlier in the semester instead of ignoring it. This subject is so different to everything else I have studied.
I just can't determine when the members have the authority to make changes to the constitution, and when it will be held to be unconstitutional for the members to interfere..? :confused:

Thank you

JudyKayTee · Aug 25, 2009, 07:39 AM

I'm sorry but we don't do homework.

rmcmill2 · Aug 26, 2009, 01:18 AM

Originally Posted by JudyKayTee

I'm sorry but we don't do homework.

How is this homework??

I have the answer right in front of me!

I was asking for some help in understanding why the answer was what it was and what the differences were between the case law and the legislation... I even offered what I thought the reasons were.

What is the point of the site?!

Thanks for nothing.

JudyKayTee · Aug 26, 2009, 06:28 AM

Originally Posted by ;

I just can't determine when the members have the authority to make changes to the constitution, and when it will be held to be unconstitutional for the members to interfere.....???

This sounds to me like you don't have the answer and are looking for homework help.

If you are not, someone else will come along to answer.