A recent decision of the New South Wales Supreme Court,
Australian Securities and Investments Commission v
Macdonald (No 11)  NSWSC 287, has highlighted, among
other issues, the importance of properly attending to minutes.
The board of directors of James Hardie Industries Limited
(Company) met on 15 February 2001.
The minutes of the Board meeting contained an entry to the
effect that the Company explained the impact of the resolution
passed at the meeting to approve an ASX announcement and to execute
the ASX announcement and send it to the ASX.
The minutes of the meeting were signed by the chairman at the
next Board meeting held on 4 April 2001.
On 7 April 2001, the minutes of the meeting on 15 February 2001
were sent to the secretary of the Company. Therefore, this was the
earliest date at which it would have been possible for the minutes
of the meeting held on 15 February 2001 to have been included in
the minute books.
Australian Securities and Investment Commission
(ASIC) argued the following:
That under section 251A(6) of the Corporations Act
(Act) a minute has the benefit of a statutory
presumption that a minute is evidence of the proceeding or
resolution to which it relates, unless the contrary is
Therefore the defendants must prove the contrary of the stated fact
that the ASX announcement was approved by the board of the
That under a general provision of the Act (section 1305) the
draft minute document, as a book required by a body corporate to be
kept under the Act, is admissible in evidence and is prima facie
evidence of the matters stated or recorded in them.
This is a presumption which can be rebutted if there is no
requirement of the corporations legislation for such a document to
be kept by a body corporate.
Section 251A(6) of the Act requires documents which are accorded
evidentiary value to be "so recorded and signed".
As the minutes of the meeting on 15 February 2001 were not
recorded in a minute book, within one month, section 251A(6) of the
Act was not engaged and the minutes had no special evidentiary
Gzell J. applied the observations of Wilcox J in Claremont
Petroleum NL v Cummings (1992) 110 ALR 239 that if a minute is
to be regarded as prima facie evidence of the proceedings at a
meeting, then the condition that a minute be entered within one
month of the relevant meeting should be strictly applied.
If a minute is to be given evidentiary value, it ought to be a
contemporaneous document, as it will be more likely to be an
accurate reflection of the proceedings at a meeting rather than a
reconstruction of them.
Lessons from Overseas
A decision from the Supreme Court of Delaware, in the case of
Walt Disney Company Derivative Litigation 906 A.2D 27
(Del. 2006), emphasizes the need for sufficiently detailed minutes
to avoid costly and time consuming litigation, stating that:
minutes should be prepared while fresh in the minds of the
materials presented to the board in meetings should be attached
as exhibits (or referenced so that they are ascertainable);
written records should be sufficiently detailed to explain all
that occurred during the course of the meeting; and
discussions with directors should be included (e.g. stating
discussion ensued may not be adequate).
In order for parties to be able to rely on minutes, the minutes
must be accorded evidentiary value the following must be
They must be signed within a reasonable time after:
(a) the meeting, by either the chair of the meeting or the chair of
the next meeting;
(b) the resolution is passed, by a director, where no meeting is
(c) the declaration is made, by the director, where the company is
a proprietary company with only one director.
Recorded in a minute book within one month of a meeting.
A minute signed and recorded, as described above, will be
evidence as to the events of the meeting, unless the contrary is
proved, to be determined by weighing up the evidence for and
against the happening of events recorded in a minute.
It is important to note that there is no reversal of the onus of
proof as to whether minutes will be evidence of proceedings,
resolutions or declarations to which it relates.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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