Sec 283: Rights of resigning auditor

1. Right to require the directors to call a general meeting

➡ Section 283(2) says: when a public company auditor resigns and submits a statement of circumstances, the auditor may give the resignation notice together with a signed requisition asking the board of directors to immediately convene a general meeting.
Purpose of that meeting: for the members (shareholders) to receive and consider the auditor’s explanation of the circumstances connected with the resignation. (SSM)

Practical meaning:

• The auditor can force the issue into the open, not just resign quietly.

• The directors then have a duty to hold that meeting within 28 days of receiving the requisition. (SSM)

You can quote this in exam answers as: “Under s.283(2), the resigning auditor may requisition the directors to immediately call a general meeting to explain the circumstances of resignation.” (SSM)

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2. Right to have his written statement circulated to all members

➡ Section 283(3) gives the resigning auditor the right to ask the company to circulate a written statement (reasonable length) describing the circumstances of the resignation to every member:

• before the requisitioned meeting under s.283(2), OR

• before any other general meeting where (i) his term would have expired, or (ii) a new auditor will be appointed to fill the vacancy. (SSM)

➡ Section 283(4) then puts a legal obligation on the company:

• s.283(4)(a): the company must state in the notice of meeting that such a statement by the resigning auditor exists; and

• s.283(4)(b): the company must send a copy of that statement to every member who gets the meeting notice. (SSM)

Practical meaning:

• The auditor’s explanation is officially circulated to shareholders, not filtered by the directors.

• Members see both sides before appointing a replacement auditor.

You can quote this in exam answers as: “Under s.283(4), the company must inform members that the auditor’s statement has been made and send that statement to every member.” (SSM)

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3. Backup protection if the company refuses to circulate

If the company does not send the statement as required by s.283(4), the auditor can insist that the statement be read out at the meeting, and the auditor still has the right to be heard orally. (SSM)

(The court can block circulation/reading only if it’s just to get “needless publicity” or it’s defamatory.) (SSM)

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4. Continuing right to attend and speak

Even after resigning, the auditor keeps the right to receive notice of that meeting, attend it, and speak on any part of the business that concerns the audit (via s.283(9) read with s.285). (SSM)

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Exam-ready summary (with subsection references)

• s.283(2): A resigning auditor of a public company may, together with the resignation notice, requisition the directors to immediately convene a general meeting so that the auditor can explain the circumstances of resignation directly to shareholders. (SSM)

• s.283(4): The company must notify members that the auditor has made a statement about the resignation and must send that statement to every member who receives the meeting notice. (SSM)

• If the company doesn’t circulate it, the auditor can require the statement to be read out at the meeting and still speak at that meeting. (SSM)