Corporate Law: Eligibility for Equitable and Statutory Remedies

Running head: CORPORATE LAW
CORPORATE LAW
Name of Student
Name of University
Author Note

Running head: CORPORATE LAW
Table of Contents
Fact..................................................................................................................................................2
Issue.................................................................................................................................................2
Rule..................................................................................................................................................3
Application......................................................................................................................................6
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................9

Running head: CORPORATE LAW
Fact
The present case deals with the issues related to the private company created by five
Brown brothers named ‘The Grumpy Grande Pty Ltd’. The profit sharing and decision making
responsibilities were distributed equally among the brothers. It was stated in the constitution of
the company that the company specializes in bringing freshly brewed coffee and delivering the
same to various sporting, corporate or social events. It was further mentioned in the constitution
of the company that the five brothers would be the sole directors and shareholders of the
company and the shares could only be sold with the permission of other directors and that too
internally to the existing direcotrs. It was also stated in the constitution that all decisions relating
to business would be by majority votes. The business although initially successful started
deteriorating after a few years which resulted in putting strain in relationship between the
brothers. The brothers suspecting that the youngest brother Tim was planning to resign from the
company started bullying him and blocking his business ideas with majority votes. The brothers,
ignoring Tim’s protests, used their power to sell company’s valuable assets at a bargain price
among themselves. Tim overheard his oldest brother saying on phone that when Tim tries to sell
his shares they will be blocked by the other directors by majority votes. Tim further heard his
brother saying that by making Tim angry enough they could make him walk out of the company
on his own and none of them would be liable to pay Tim anything.

Running head: CORPORATE LAW
Issue
In the case there are two issues arising from the given facts. The first issue deals with the
eligibility of Tim to receive equitable remedies. The second issue that can be found in the case is
whether Tim is qualified for statutory remedies.
Rule
The provisions relating to the claims of remedies against of breach of contract can be
found in Competition and Consumer Act 2010 (Cth). Section 12GM of the Australian Securities
and Investment Commission Act 2001 and section76 of the National Credit Code discuss the
provisions for statutory remedies are discussed. Apart from the aforementioned legislations
sections 232, 233, 234 and 236 of the Corporations Act 2001 should be taken into further
consideration of this case.
In the case of Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] it was observed that
according to the section 232 of the Corporations Act 2001 a court under the section 233 can
make an order when it finds that an act, proposed or actual or omission by a company or any
resolution or member or class of members on behalf of the company is in contradiction to the
members’ interests or is oppressive towards any member or members of the company. Orders
can also be made under the section 233 if it was found by the court that any conduct of a
company’s affairs or an act or omission of any act by the company or any resolution passed or to
be passed by the members in behalf of the company to be prejudicial or discriminatory against
any member of the company (Stewart, Kent and Routledge 2015).
It is stated in the section 233 that the court in its discretion can make orders to wind up a
company, to repeal or modify the constitution of a company, to control or regulate the conducts