The Australian case of Decorator Agencies Pty Ltd v Jeffries Industries Ltd

Running head: BUSINESS LAW
Business law
Name of the Student
Name of the University
Author Note

BUSINESS LAW1
Executive summary
This report has been prepared with the sole goal of developing a clear view of the Australian
case of Decorator Agencies Pty Ltd v Jeffries Industries Ltd (1998). The following report has
made a detailed but brief analysis of the court judgment and has critically evaluated the cause
and the motive of the breach that had occurred keeping the stringent laws of Australian’s
Corporations Act in mind. Not only that, it has evaluated the consecutive actions that occurred
aver the act took its effect on the case and the whole Australian Business world.

BUSINESS LAW2
Table of Contents
Case Introduction.............................................................................................................................3
The duties/responsibilities breached (ex. CA sections 181 or 588G) and explain why the duties
were breached..................................................................................................................................4
Discuss and critically ANALYSE the court/tribunal decision and the reason for the decision in
view of the Corporations Act...........................................................................................................5
Where possible and applicable, the relevance of the decision to the development of Australian
corporations law or the impact of the decision on the operation of companies in Australia...........6
Conclusion:......................................................................................................................................7
References:....................................................................................................................................10

BUSINESS LAW3
Case Introduction
The case involves a dispute between a couple of parties, namely, ‘Fame’ and The Australian
Securities Commission, better known simple as the ASC, though it has played the lawful role of
a third respondent (Lowry, 2012). The following case made the section 995 and section 998 of
‘Corporations Law’ of the ASC. The company named Jefferies has its share capital which is
totally composed of preference shares, in the year 1995, and decided that the exchange date of
their shares would be fixed to the 4th of February 1999. It was seen, that the director of the
company, Mr. JF O’ Halloran had been disposed and left the company for good. A chairman is
expected to hold and control the directorial board of the company and manage it strongly,
though, in his case, after termination, he had to give away his shares. On the same year, it was
seen that ‘Fame’ had acquired the company’s time-shares for its own.
It was clearly stated in the Article of Association of the said company, that, on the stated date, all
the company’s share will, by all means be converted to ‘Normal Shares’, from the initial
preference shares, thought the article makes it a point that in abnormal or special circumstances,
the date of conversion can be shifted. If, by any means, the company is unable to pay off the
promised dividends to its stock holders, then they, by the article, have the right to accelerate the
procedures (Latimer, 2012). Though, the company has its formula that it uses to predict the
number of shares that can be allotted. The basic application of it would be assumption of the
weighted average stock prices including normal shares, traded before there are 20 days left for
the commencement of the conversion process keeping an inverse relation between number of
shares necessary for allotment procedure and the sales prices of shares while trading. Hence, if
the SP of the preference shares is low, there will be a high allotment rate. It was seen by the
Chairman that the Directorial Board had made its decision to accelerate the conversion procedure