Employees parke v daily news ltd 1962 directors are

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(Employees) Parke v Daily News Ltd [1962]: Directors are entitled to take into account the interests of its employees, irrespective of any consequential benefit to the company, is one which may be widely held but authority to support that [view] as a proposition of law was cited. The company may provide extra benefits to employees but only if that delivers a benefit to the company. (Nominee Directors) Re Broadcasting Station 2GB Pty Ltd [1964-1965]: Concerned with the legality of the actions of several nominee directors who had been appointed by the company’s majority shareholder. The claim was based on minority oppression (burdensome, harsh and wrongful) and alleged the directors had failed to act in the best interests of the company because they acted only in consideration of the majority shareholder’s interest. Decision: Directors had no breached their duty because their actions were not done against the interest of the company. Subsequent cases, the court have stressed that directors need to consider the interests of the company separately to any other interests. Clearly, the interest of the company must remain paramount. Lecture 7: Members’ Remedies; Sourced of Funding A. Members’ Remedies Introduction (Refer to HHA P 546 – Members’ Remedies Roadmap) Case Law Ngurli v McCann (1953): Shareholders even where they are also directors are not trustees of their votes and as individuals in general meetings can usually exercise their votes for their own benefit. There is also a limit in general meetings to the extent in which the majority may exercise their votes for their own benefit...it must exercised, not only in the manner required by law but also bona fide for the benefit of the company as a whole, and [these limitations] can be exceeded. Gambotto v WCP Ltd (1995): WCP was 99.7% owned by wholly-owned subsidiaries of Industrial Equity Ltd (IEL). It was proposed to alter the articles to enable any holder of 90% or more of the company’s issued shares to compulsorily acquire all the issued shares. This was allow IEL to achieve 100% ownership, it would save money in taxation and financial agreements. Gambotto, who held 0.1% of the company’s shares sought to have the constitutional amendment set aside as invalid. The price offered for the minority shares was accepted as being fair. Decision: Constitution amendment was invalid. Court determined that constitutional amendments should be assessed according to whether they take away property rights or not. Where a proposed amendment does not seek to confer a power to take away property rights, then the court found that is assessed according to whether the alterations is within the power of the members. However, where the alteration seeks to confer a power to take away property rights, a different test should apply (test other than bona fide and in the interests of the company as a whole).
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