Good Faith - meetings and resolutions:

The directors must act in good faith when calling a meeting,.  Thus, in Cannon v Tasks, the directors called the annual general meeting at an earlier date than was usual for the company to hold it.  Their intention in doing so was to ensure that transfers of shares to certain persons who were likely to oppose some of their proposals would not be registered in time so that they would be unable to vote.  An injunction stopping the meeting from being held was granted.  However, once the directors have called the meeting they cannot postpone or cancel it.  For example, in Smith v Paringa Mines Ltd, a notice was issued purporting to postpone the holding of a general meeting of shareholders which had previously been duly convened.  One of the directors of the company who was in disagreement with the remainder of the board attended the meeting together with several shareholders.  It was held that resolutions passed at the meeting were valid and effective.  The purported postponement of the meeting was inoperative since the articles pursuant to which the meeting had ben convened did not give specific power to postpone a convened meeting.  The proper course is for the meeting to be held and, with the consent of the majority of those present and voting, adjourned.