Corporate Law Assignment Case Study
10 Pages2601 Words119 Views
Added on 2020-05-28
Corporate Law Assignment Case Study
Added on 2020-05-28
ShareRelated Documents
[CORPORATE LAW]A discussion on the case of Groeneveld Australia Pty Ltd & Ors v Nolten& Ors (No 3) [2010] VSC533(Student Details: )
[CORPORATE LAW]January 5, 2018Introduction Case laws are the guides for the directors and the other officers of the company on what has to bedone, and more importantly, on what should not be done, for the reasons of the same attractingpenalties under the Corporations Act, 2001 (Gibson and Fraser, 2014). This legislation isapplicable on all the companies which operate in the nation and impose the directors with someimportant duties, to ensure that they carry on the work for the shareholders of the company,instead of being focused on their personal objectives. The duties imposed on the directors, touchboth civil and criminal branch of law, which makes the nature and adherence of such duties, allthe more crucial (Paolini, 2014). Groeneveld Australia Pty Ltd & Ors v Nolten & Ors (No 3) [2010] VSC 533 is amongst therecent cases where the Supreme Court of Victoria had established that the director of thecompany had been in contravention of his statutory, as well as, the fiduciary duties which he hadowed to the company, where he held the position of a managing director, for the reasons of hisfailure in disclosing the conflict of interest. The following parts cover an effective analysis ofthis case. Background of the caseIn this case, Nolten was the defendant who held the post of managing director in the companycalled Groeneveld Australia Pty Ltd. A number of situations were considered by the court wherethe defendant attained major benefits, through the companies which were under his control or ina direct manner, particularly where these transactions or the benefits, were not disclosed to the2
[CORPORATE LAW]January 5, 2018company. Amongst the claims which were central here were regarding the put and call optionswhich had been held by Nolten on the shares of the company. The claim of the plaintiff was thatthe fiduciary and the statutory duties had been contravened by Nolten which he had owed to thecompany and the contractual duty of honesty was also contravened in context of exercising ofthe put and call options (Holding Redlich, 2011). Nolten had the contractual right for call of shares in the company and also to put such shares to acompany which was related to Groeneveld Australia Pty Ltd. These rights had been set out in thetwo agreements which had been entered in with the Groeneveld Australia Pty Ltd and thecompanies related to Groeneveld Australia Pty Ltd. The first agreement gave Nolten the right tocall for the issuance of shares in the company in two lots. The events were aligned in such amanner that Nolten used the second call option just before he got the notification from thecompany regarding the intent of the company to dismiss Nolten for the reasons of setting up acompany which directly competed with Groeneveld Australia Pty Ltd. Upon the dismissal ofNolten, the put option was exercised by him. The company refused the issuance of shares basedon the second call; in addition to this, the related company refused to fulfil the obligations ofpurchase based on the call and put option agreement (Holding Redlich, 2011). The duties/responsibilities breachedAs briefed upon in the introduction segment of this discussion, the directors of the company havebeen imposed with certain duties, which have to be fulfilled properly (Latimer, 2012). The firstsection relevant to this discussion is covered under section 181 of the Corporations Act whichprovides that the directors of the company have the civil duty of discharging their duties in bestinterest, in good faith of company and for a purpose which can be deemed as proper. The next3
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Groeneveld Australia Pty Ltd & Ors v Nolten & Ors (No 3) [2010] VSC 533lg...
|12
|1234
|24
Groeneveld Australia Pty Ltd & Ors v Nolten & Ors (No 3) [2010] VSC 533lg...
|8
|2602
|1
Groeneveld Australia Pty Ltd Assignment PDFlg...
|7
|2225
|45
Liability of Drago as a Directorlg...
|11
|2630
|89
Business and Corporations Law - Assignmentlg...
|10
|887
|280
BA217 – Company Law | Assignmentlg...
|7
|1447
|42