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ARTICLE · 15 MAY 2014

Identifying inconsistencies in company documents: Are multiple governing documents always inconsistent?

Cooper Grace Ward
Cooper Grace Ward
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Two different governing documents in company law can deal with similar but not identical matters and not be in conflict.

AustraliaCorporate/Commercial Law
Carly Ashwood
Carly Ashwood
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Typically, shareholders' agreements contain a provision to the effect that any inconsistency between the agreement and the company's constitution will be resolved in favour of the shareholders' agreement. Parties to such documents may assume that multiple governing documents will always be inconsistent, and the document that takes precedence is the only binding governing document.

This is a dangerous assumption to make. A recent case from the New South Wales Supreme Court, Cody v Live Board Holdings Limited, serves as an important reminder that the fact that two different governing documents deal with similar but not identical matters does not mean that the documents conflict.

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