Comparison The major shareholder can either sue the director with SDA or

Comparison the major shareholder can either sue the

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Comparison The major shareholder can either sue the director with SDA or oppression. Based on the facts, that the shareholder has qualify to apply for SDA and oppression action under s.236 CA and s.234. But after that, for SDA the applicant has pass 5 criteria that might take 14 days to apply for SDA, while oppression only need a good ground to prove the oppression action. In this case, the applicant could apply oppression immediately with the facts that directors failing to proceed with the timber flooring project. On the other hand, for SDA if the applicant successfully sues the directors, remedies will go to the company not shareholder who initiated the court actions. Furthermore, courts have broad powers to make the application pays court action, unless the court decides otherwise. While oppression action has broadly remedies and it will benefit to the shareholder who initiated. There are many remedies which was mention above. According to an article about SDA, the writer stated that “since the introduction of the statutory derivative action in March 2000, very few applications have been made to the courts for leave to bring such an action”. The reason behind this was because the applicants failed to satisfy the courts under s.237, therefore the court reject those applications. In Goozee v Graphic World Group Holding Pty Pld case, the application also failed to satisfy the courts under s.237 CA. Conclusion To sum up, the shareholder can either sue the board of director of Sumo Ltd with statutory derivative action or an oppression action. Based on the information mention above has shown that oppressive action is easier to approach and it is more effective than SDA. Furthermore, oppression action also costs less money and time to apply than SDA. Oppression action also has many alternative remedies. Therefore, the shareholder should consider oppression action rather than SDA.
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Bibliography Hanrahan P, Ramsey I, and Stapledon G, Commericial Applications of Company Law , 2017, 18 th edition, Oxford University Press, South Melbourne, p. 706. L. Thai, “How Popular are Statutory Derivative Actions in Australia? Comparisons with United States, Canada and New Zeland” (2002) 30 Australia Business Law Review 118, at 136. Lipton P, Herzberg A, and Welsh, M, Understanding Company Law , 2016, 18 th edition, Thomson Reuters Australia Limited, Pyrmont, pp. 363-364.
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