Corporate Law: Equitable and Statutory Remedies for Oppression and Discrimination

Running head: CORPORATE LAW
CORPORATE LAW
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1CORPORATE LAW
The present case is concerned with the private company known as ‘The Grumpy Grande
Pty Ltd’ ("TGG"). It was created by five Brown brothers in year 2010. The business was initially
a great success and the Brown brothers have equal responsibilities and rights in decision making
and profit sharing. Initially, though the company did well but later on, specially in the last few
years, the business started deteriorating due to which the relationship among the brothers got
affected. The four elder brothers were bullying the youngest brother Tim and was planning to
take away his shares without paying him the reasonable price. Tim was about to resign from the
business and hence he was under constant bullying by the other 4 brothers. They are trying to
block his business ideas and to sell the valuable assets of the company to themselves at bargain
cost though Tim protested against it. They are using their majority votes to bully Tim. The issues
involved in the given case are whether any equitable remedy and statutory remedy are available
to Tim to overcome his present situation.
In relation to the facts of the given case, sections 232, 233, 234 and 236 of the
Corporations Act 2001 must be referred.
According to section 232 of the said act, a court can make an order under section 233
when it is found that the conduct of the affairs of the company, or a proposed or an actual act or
omission by any company or on its behalf, or any resolution or of the members or class of
members of a company is either in contradiction to the members’ interest or is oppressive to any
member or members of the company whether in that capacity or any other. This was observed in
the case of Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR
672; 19 ACLC 856. The court can also make order under section 233 if it finds that the said
conduct of company affairs or act or omission by such company or in is behalf or any resolution
passed or to be passed by the members of the company is prejudicial or discriminatory against

2CORPORATE LAW
any member acting in that capacity or any other capacity of the company (Stewart, Kent and
Routledge 2015).
Section 233 states that the court has discretion to make any order which it thinks perfect
for the company. Such orders can be the order to wind up the company, to repeal or modify the
present constitution of the company, to control or regulate the conduct of the affairs of such
company in future or to appoint a receiver and manager of any or all of the property of such
company. The court can also make orders for purchase of shares with an appropriate deduction
of the share capital of the company as given in Atlasview Ltd v Brightview Ltd [2004] 2 BCLC
191. It can make order for the company to institute a case or to prosecute it, or to make defence
or to stop any particular court proceeding as per the decision of Campbell v Backoffice
Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359. It can even give orders to give
authority to any member of the company or to a person to whom a share of the company is being
transferred by will or by law to make institution, prosecution, defence or even discontinuation of
any particular proceeding in the name of the company and also on its behalf as found in LPD
Holdings (Aus) Pty Ltd v Phillips [2013] QSC 225. The court can also give orders to stop any
person from getting engaged in any particular conduct or from performing any particular act or
may also order a person to do any act specified by it. This was found in the case of Gamlestaden
v Baltic Partners Ltd [2007] 4 All ER 164 at 172.
The court when gives an order that a company must be wound up in this section, then
provisions of the act in relation to winding up of the company is applied such that the order is
made according to section 461 and charges as needed are also applied as observed in Maher v
Honeysett and Maher Electrical Contractors Pty Ltd [2005] NSWSC 859 at [29].