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This ground for winding up is seldom used in

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This ground for winding up is seldom used in Australia – the cases in which it has been successfully relied upon have concerned corporate groups where the directors of the board of one company in the group have acted in the interests of another group in the company o These cases pre-date the amendment of he oppression remedy and this has much greater scope for operation From {Re Cumberland Holdings Ltd} s 461(1)(e) is not limited to cases where the whole board acts unanimously – it will be met where it is shown that the effective majority has acted in its own interests or in the interests of one or more of those board members Also applies where one director has in some way caused ill will to be carried into effect by the board with the end result that his personal interests are preferred A director may also be held to have acted in their own interests where they act in the interests of another company of which they are also director and shareholders {Re Cumberland Holdings Ltd} It may also apply where director shows preference for one or more shareholders F.3 Just and Equitable Ground {s 461(1)(k) Corps Act} The most commonly relied upon ground is the just and equitable ground – that is it is just and equitable in the opinion of the court that the company be wound up There are four categories of just and equitable grounds – a notion that was criticised by {Menhennit J in Re Tivoli Freeholds and House of Lords in Ebrahimi} Nonetheless for convenience sake they will be discussed according to the categories (1) Deadlock Where there is a deadlock of the general meeting where the shareholders are equally divided and resolutions cannot be passed Generally arises where there are irreconcilable differences between controlling shareholders {McMillan v Toledo} However in practice most companies have deadlock provisions in constitution In {Re Yenidje Tobacco Co } the company had two members who were also the directors and who had equal voting power. Their relationship deteriorated to the point where they no longer spoke to each other. The court was prepared to wind up the company on the basis that this was in substance a partnership and there was no other satisfactory way of resolving the deadlock between the 7
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Shareholder Remedies parties (2) Justifiable Lack of Confidence Where the directors act in a manner that leads to a justifiable lack of confidence This arises for conduct such as fraud, misconduct, refusal to give information to shareholders, refusal to hold general meeting, refusal to provide information about company’s accounts {Loch v John Blackwood Ltd} (3) Failure of Substratum Failure of substratum occurs where the company can no longer pursue the objects for which it was formed In these circumstances it is considered just and equitable that the enterprise be wound up and the shareholder’s capital returned to them.
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This ground for winding up is seldom used in Australia the...

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