Corporate Law Case Study: Remedies for Minority Shareholder Oppression

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

1CORPORATE LAW
The instant case study assignment is concerned with a private company named “The
Grumpy Grande Pty Ltd’ which was created by 5 Brown brothers in 2010. Tim was the youngest
of all the brothers. The business was about making premium quality of coffee, collected and
brewed fresh from the mini van to directly to the access of people in any social gathering,
corporate programmes, cultural events or sports ceremony. The business was successful since the
beginning and the 5 brothers were successful from the beginning. They equally shared the profits
among themselves. However, with time, their business got deteriorated and they were unable to
earn much profit. This created stress and coalition among the brothers specially between Tim and
his 4 brothers.
The eldest 4 brothers were suspecting that Tim may quit the business due to its lack of
success in present days and thus they have become against him. They even started bullying him
and started using every opportunity to use the majority of votes against him. As per the
constitution of the company, all the brothers are the directors and share holders of the company.
Moreover, as per the constitution of the company, all the decisions must be taken by votes and
following the majority rule and these 4 Brown brothers were using their majority votes to block
Tim to take any decision or take part in any decision.
In the constitution of the company, it is held, that if any brothers want to sell his portion
shares, he has to sell them to the directors of the company after seeking consent from other
directors of the company. Thus, if Tim wants to sell his shares, he needs prior permission from
his brothers but he heard his eldest brother talking to someone over phone that they are planning
to get his shares by forcing him to quit the company. In this way, they will not be required to pay
Tim the cost of shares.

2CORPORATE LAW
As a result of this, Tim is stressed and unsatisfied and wants to seek remedies for him by
bringing action against his 4 elder brothers. In this respect, Tim may refer to the Corporations
Act 2001 to get the appropriate remedy for his situation.
The affairs and management of any company is handled by the share holders, there can
be single share holder who controls the activities of the company or may be a group of share
holders who take part altogether in the management of the company. However, those who
possess majority of share, are found to be the controller of the management as well as operation
of the company. Thus, the minority share holders do not have any control or opinion in the
operation of the company because they are mostly ignored or opposed by the majority share
holders. In this case, Tim was also subjected to this by his 4 brothers who are the majority voting
powers in the company.
To resolve this disability of the minority share holders, the Corporation Act 2001
provides a weapon to them under section 232 of it. This section of 232 provides various remedies
to a minority share holder who can seek them when he feels oppressed or ignored by the majority
share holders. Section 234 provides the list of persons who can apply remedies under section 232
of this act. The member who has been registered in the company can avail relief under section
232. It was decided in the case of Niord Pty Ltd v Adelaide Petroleum NL (1990) 54 SASR 87.
Thus, Tim being a registered member of the TGG company can seek remedy as per the
provisions of section 232.
However, to avail remedies for discrimination and oppression, the affairs and conduct of the
company must be such that it results in to oppression to a member or a section of members of the
company as given in section 232. Here the meaning and explanation of the term ‘oppression ‘ is