The Court was not satisfied that NWAC had established the meeting would not be held for a proper purpose. The judgment records that NWAC's written submissions said it was not possible to know, on the information available to NWAC, whether the meeting was being called for a proper purpose. The Court described that submission as curious, because it was NWAC's burden to establish the contravention it alleged.
NWAC relied on five main reasons. First, no reasons had been provided to the directors as to why they should be removed or why members should consider their removal. Secondly, Ms Tinker had not informed the other directors before exercising the power to call the meeting. Thirdly, because several members had signed a petition requesting a general meeting, NWAC said the members' request procedure should have been used instead of a director using the power to call a meeting. Fourthly, NWAC said it was possible the real purpose was to create a board likely to continue YMAC's services agreement. Fifthly, NWAC said the current directors had only recently been elected at a fair annual general meeting and members could wait until the next annual general meeting if they wanted change.
The Court rejected all of those reasons, both individually and collectively. On the first two points, the judge said no provision of the CATSI Act or NWAC's rule book had been identified that required Ms Tinker to inform the other directors before calling the meeting or to provide them with reasons for proposing their removal. On the third point, the Court accepted that there appeared to be a petition signed by several members, but said that even if Ms Tinker had exercised her own right to call a meeting with knowledge of that petition, that did not show the meeting would not be held for a proper purpose. On the fourth point, the alleged hidden motive connected with YMAC's services agreement was treated as speculation. On the fifth point, the Court said that even if the previous annual general meeting had been fair and conducted in accordance with the rule book, that still did not mean the proposed special general meeting lacked a proper purpose.
For business readers, the practical message is that courts will usually want more than suspicion, surprise or political disagreement. If you allege improper purpose, you need evidence that actually supports that conclusion and a legal theory that connects the facts to the statutory standard.