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Note overlap with winding up provisions appoint a

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NOTE overlap with winding up provisions Appoint a receiver {s 233(1)(h) Corporations Act} o Receiver can be instructed to investigate the conduct of the Company and institute proceedings against directors {Jenkins} Restrain a person from doing an act or requiring a person to do an act {s 233(1)(i) and (j) Corporations Act} H. Comparison between Oppression and SDA The emphasis of the enquiry under Oppression is on the impact of the conduct on a member, as judged by a reasonable bystander o This is an objective test and is to be contrasted with the court’s approach to setting aside company decisions on the basis of a breach of directors’ duties where the court focuses on the directors’ knowledge and conduct An Oppression action considers the cumulative effect of the oppressor’s conduct whereas a derivative action is concerned with particular wrongs There is no difficulty in establishing standing under Oppression, whereas applicants for SDA must have obtained leave from the court The court has total discretion as to the appropriate relief in relation to an oppression action whereas the result of a successful SDA will generally be a monetary compensation for the company I. Essay Quotes Since the introduction of Statutory Derivative Action there has not been a significant rise or upward trend in the increase of cases {Ramsay and Saunders} In 38.7% of cases, the applicant was a shareholder who was NOT a current or former director {Ramsay and Saunders} 87% of the cases were involving private companies {Ramsay and Saunders} Additionally in 71% of cases of SDA, there was NOT an additionally Oppression application also brought {Ramsay and Saunders} 10
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Shareholder Remedies EQUITABLE LIMITATIONS ON THE POWER OF MAJORITY SHAREHOLDERS A. Introduction There is a conflict between the principle of majority rules against the individual rights of shareholders in the context of the corporation This is particularly so because the majority of votes can be bought and is based on financial ability rather than normal attributes of equality under democratic notions Whilst in theory a minority can always just leave the company if they are not happy with the decisions of the Company but in reality that is not possible for companies not listed on the stock exchange (no market for shares) The equitable limitation of the power of majority shareholders aims to address instances where some injustice is committed against the minority due to wishes/actions of the majority Its should also be noted that the equitable limits on the power of the majority are a grounds for personal action in equity B. Development of the Equitable Principle The courts have always recognised two principles in relation to shareholder voting: o (1) Shareholders are not in a fiduciary relationship with other shareholders o (2) A share is a right of property which can be exercised in the holder’s self interest Old Test: { Allen v Gold Reefs of West Africa} o
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