The Supreme Court rendered the 107-Tai-Shang-1957 Civil Decision of October 24, 2018 (hereinafter, the “Decision”), holding that if the facts concerning violations of laws, regulations or bylaws by a general association for its convocation procedure or resolution method are not material and have no bearing on the resolutions, the court may reject a request lodged pursuant to the Civil Code to set aside the resolutions adopted by the general association.
According to the facts underlying this Decision, the Appellant asserted that the Appellee had approved the establishment of an urban renewal association consisting of land and building owners in the urban renewal zone to be one of the Appellee’s members. Since the Appellee called the special members’ meeting at issue by a procedure which violated Article 8 of the Administrative Rules for Urban Renewal, a request was lodged in accordance with Article 56, Paragraph 1 of the Civil Code to set aside the “Resolved Business Plan” resolution adopted during the special members’ meeting at issue. The original trial court ruled in favor of the Appellant. Dissatisfied, the Appellee filed this appeal.
According to this Decision, Article 189-1 of the Company Law, which was added on November 12, 2001, provides that if a court which has accepted a complaint seeking to set aside resolutions adopted during a shareholders’ meeting finds that the facts associated with the violation of laws or regulations or articles of incorporation by the shareholders’ meeting for its convocation procedure or resolution method are not material and have no bearing on the resolutions, the court may reject the complaint to address the rights and interests of the vast majority of shareholders. The provisions of Article 56, Paragraph 1 of the Civil Code are amended based on Article 189 of the Company Law. Under the principle that similar circumstances should be handled in the same way, a court accepting a complaint to set aside the resolutions adopted by a general association can certainly apply, by analogy, Article 189-1 of the Company Law. If facts associated with the violation of laws or regulations or bylaws by the general association for its convocation procedure or resolution method are not material and do not affect the resolutions, the court may reject the complaint in order to address the rights and interests of the vast majority of members.
It was further pointed out in this Decision that the original trial court had lawfully determined, in the exercise of its authority to determine facts and cite evidence, after generally weighing relevant evidence that since the Appellee’s organization of the special members’ meeting to resolve the “Business Plan (Draft)” was based on a notice delivered to the members two days prior to the meeting due to “an emergency,” the proviso of Article 8 of the Administrative Rules for Urban Renewal was not violated. In addition, the Appellant’s land and floor area of his building accounted for a very small percentage of those owned by all members and his presence or absence could not change the results of the resolution. Even if the Appellee’s convocation procedure was found to be defective, the fact of such violation was not material and had no impact on the resolution. Therefore, Article 189-1 of the Company Law may certainly be cited by analogy to reject the Appellant’s complaint. Since the decision unfavorable to the Appellant was not unlawful, the Appellant’s appeal was rejected.