In seeking to have the company comply with winding up

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in seeking to have the company comply with winding up provisions Additionally under the equitable maxim, for an applicant to have a successful application to wind up a company on just and equitable grounds they must have clean hands { Ebrahimi per Lord Cross} G. Oppression Remedy G.1 Introduction The Court has a broad discretion under {Part 2F.1 Corporations Act} to make orders as it sees fit to protect against oppression This is the most important remedy for shareholders and is effectively a method of corporate divorce It is designed to protect fundamental rights of shareholders, particularly minority shareholders o These rights include the right to participate in the affairs of the company, the right to assure a return on investment, right to protect investment in the Company, right to monitor directors and management The current provision derives from UK legislation in the 1940s in recognition of the fact that winding up will not always be the most appropriate remedy and allowing the court a wide discretion as to the remedy given G.2 Who can Apply? Under {s 234 Corporations Act} standing is given to: o (a) a member of the company (in any capacity) o (b) a former member (if they are no longer member because of selective reduction of capital) o (c) former member (application relates to the circumstances in which they ceased to be a member) o (d) a person to whom a share has been transmitted by will or operation of the law o (e) a person whom ASIC thinks is appropriate 8
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Shareholder Remedies Under {s 231 Corporations Act} ‘member’ is defined and essentially means a person who’s name is on the register {s 231(a) Corporations Act} It is not necessary for the applicant to have been a member at the time the oppression took place { Re Spargos Mining} Applicant does not need to be a shareholder who has been adversely affected by the complained conduct {Re Spargos Mining} In practice most actions are brought against proprietary companies with only a few members in which members are also involved in management – the courts are reluctant to interfere with management decisions in commercial companies (since the appropriate action of a minority shareholder in such company is to sell) – nevertheless it can extend to public companies Also note that actions under s 232 will generally be brought by minority shareholders because majority shareholders can solve their grievances by voting power – however a member does not need to be a minority shareholder {Vujnovich} G.3 Capacity in which Member is Affected Under both {s 232 and 234 Corporations Act} the application must be affected in their capacity as a member or in any other capacity This is intended to cover situations like in {Ebrahimi} where it could be argued that the applicant is affected in capacity as director not as shareholder – however under the provisions both would make the member have standing G.4 Whose and What Conduct?
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