Notes- Shareholder Remedies
Pages 552-565: Compulsory Liquidation Remedies 1. Introduction * Deficiency of current law: (1) despite introduction of statutory derivative action, formulation is unclear and scope is uncertain (2) focus on single act/transaction rather than whole picture/pattern/period (3) remedies are directed to particular transaction and confined to restraint of conduct, Recovery of property or ordering of financial compensation * Statutory remedies fall into 2 categories
a. Compulsory liquidation remedies courts can order winding up of company if: - court is of opinion that it is just and equitable that company be wound up s461(k)
- directors acted in affairs of company in own interest, not interest of members a whole, or any other manner that appears to be unfair/unjust to other members s461(e)
- affairs of company are being conducted in manner that is oppressive or unfairly prejudicial to or unfairly discriminatory against a member or in manner that is contrary to interests of members as a whole s461(f)
- act/omission or proposed act/omission by or on behalf of company or a resolution or proposed resolution of a class or members of the company was or would be oppressed or unfairly prejudicial to, unfairly discriminated against a member(s) or was or would be contrary to interest of members as a whole s461(g)
b. remedies for oppression or injustice: Pt2F.1 wider range of remedies to oppressed/injustice refer to wk 11 last page
2. The just and equitable ground a. History and broad scope of the remedy * just and equitable that company be wound up s461(k) traced back to English Act of 1848 * History p 553-555 b. Re Tivoli Freehold Ltd [1972] VICSC—applying just and equitable rules to wind up co:
(i) just and equitable give court a wide discretion which must be exercised judicially (Baird vHenry Lees 1924) question of fact: all circumstances to be considered
(ii) facts rendering it just and equitable to be wound up: more than one
a. Compulsory liquidation remedies courts can order winding up of company if: - court is of opinion that it is just and equitable that company be wound up s461(k)
- directors acted in affairs of company in own interest, not interest of members a whole, or any other manner that appears to be unfair/unjust to other members s461(e)
- affairs of company are being conducted in manner that is oppressive or unfairly prejudicial to or unfairly discriminatory against a member or in manner that is contrary to interests of members as a whole s461(f)
- act/omission or proposed act/omission by or on behalf of company or a resolution or proposed resolution of a class or members of the company was or would be oppressed or unfairly prejudicial to, unfairly discriminated against a member(s) or was or would be contrary to interest of members as a whole s461(g)
b. remedies for oppression or injustice: Pt2F.1 wider range of remedies to oppressed/injustice refer to wk 11 last page
2. The just and equitable ground a. History and broad scope of the remedy * just and equitable that company be wound up s461(k) traced back to English Act of 1848 * History p 553-555 b. Re Tivoli Freehold Ltd [1972] VICSC—applying just and equitable rules to wind up co:
(i) just and equitable give court a wide discretion which must be exercised judicially (Baird vHenry Lees 1924) question of fact: all circumstances to be considered
(ii) facts rendering it just and equitable to be wound up: more than one