Legislation does not specify who must be behaving in

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Legislation does not specify who must be behaving in an oppressive, unfairly prejudicial or unfairly discriminator way, so that the oppressors may be : o Other members o Classes of members o Directors of company o Company itself o Holding company Additionally under {s 232 Corporations Act} the relevant conduct is: o (a) conduct of company’s affairs; or o (b) an actual or proposed act or omission by or on behalf of the company; or o (c) a resolution, or a proposed resolution of members or a class of members of the company G.5 FIRST Ground for an Order Under {s 232(d) Corporations Act} the first ground for an order is that the conduct is contrary to the interests of the members as a whole In {Re Spargos Mining, Murray J} confirmed in obiter that “ contrary to the interests of members as a whole” is a distinct ground for relief G.6 SECOND Ground for an Order Under {s 232(b) Corporations Act} the second ground for an order is that the conduct is oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity Note that the expression, “oppression to, unfairly prejudicial to or unfairly discriminatory against” is a compound expression {Wayde’s Case} o Generally its essentially feature is that of commercial unfairness {Morgan v 45 Flers Avenue Pty Ltd per Young J} The following are additional considerations which must be taken into account (1) An Objective Test First it should be noted that whether conduct is oppressive to, unfairly prejudicial to, or unfairly discriminatory against’ is an objective test The court examines the impact of the decision upon the member as adjudged by a reasonable bystander who is imbued with any special skills or knowledge possessed by the alleged oppressors {Wayde per Brennan J} (2) Relevance of the Intention of the Oppressor It is not necessary to prove that the Company acted dishonestly, with bad faith or outside the powers conferred on the decision maker {Thomas per Richardson J} However the intention of the oppressor could become relevant {Wayde per Brennan J} The company’s conduct does NOT need to be “burdensome, harsh and wrongful” nor “persistently illegal and dictated by self interest” o It is sufficient for the purposes of s 232(e) that the conduct reflects unfair treatment of a group of members {Re G Jeffrey per Crockett J} Also note that a single oppressive act or omission is sufficient (3) Relevance of Conduct of the Applicant Where the applicant has a collateral purpose it may be relevant as well {Swansson} There could also be a possible requirement that the applicant come to the table with clean hands {Re R A Noble & Sons} (4) Restricting Dividends [unlikely to come up] If the dividend payout ratio is low this will not necessarily amount to oppressive conduct particularly if the business is thriving under that policy and the capital gains on the value of the shares is great { Thomas per Richardson J} However if the dividends are being unfairly restricted
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