Corporations Act Assignment PDF

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Group AssignmentWhitehouse v Carlton Hotel Pty Ltd [1987] 162CLR 285(Group Details: )
Group Assignment1.IntroductionThe Corporations Act, 2001 (Cth) is the current legislation which is applicable on the operationsand working of the corporations, or as they are otherwise referred to as in the otherjurisdictions as companies. This legislation is divided into different parts which cover differentsegments involved in running the operations of business, and also presents the manner inwhich the company reaches its end, in terms of being wound up. The provisions of thislegislation are very detailed (Austin and Ramsay, 2013).One of the key aspects of this legislation is imposition of director duties. Even though thislegislation and the common law presents that the companies are separate legal entities andthat for the acts of the companies, only the company is liable. However, in doing so, thelegislations and the common law ensure that the work done in the companies, by the directors,is done properly. Where this does not happen, the law makes the directors liable for theiractions and by imposing director duties on them, this is ensured (Mitchell, O'Donnell andMarshall, 2016).This report is predominantly focused on analysis of the leading case ofWhitehouse v CarltonHotel Pty Ltd[1987] 162 CLR 285. Even though this case is more than ten years old, it continuesto be a landmark ruling in the present time. This discussion would not only highlight whatexactly happened in this case, but would also show how this case is relevant in the present day.2.Whitehouse v Carlton Hotel Pty LtdThe case in discussion involved the governing director of Carlton Hotel. His name was Mr.Charles Whitehouse. Mr. Whitehouse held the entire shareholder voting base in the companycalled Carlton Hotel Proprietary Limited, and these were class A shares. Mrs. Whitehouse, whowas the wife of Mr. Whitehouse, did hold shares, but these only came with partial voting rights.These shares were named as class B shares. The children of Mr. Whitehouse and Mrs.Whitehouse also held shares, which were named as class C shares. However, unlike Mr.Whitehouse and Mrs. Whitehouse, these shares did not come with voting rights. After lapse of
Group Assignmentsome years, Mr. Whitehouse and Mrs. Whitehouse were legally separated. The result of thisseparation was sons of Mr. Whitehouse and Mrs. Whitehouse going to live with Mr.Whitehouse, and the daughters of Mr. Whitehouse and Mrs. Whitehouse went to live with Mrs.Whitehouse (Amazon AWS, 2018).Mr. Whitehouse, after some time, started to think that if he died at that time, Mrs. Whitehousewould get the control of the company. The reason for this was that his sons held that categoryof shares which did not have voting powers. And the only share class which held voting powerwas class B, which Mrs. Whitehouse held. In order to avoid this from happening, he issued thepartial voting class of shares to his sons also. This resulted in his sons getting rights of voting aswell in the company. Later on, Mr. Whitehouse had fallout with his sons. In anger, he decidedthat his sons should never have been given the voting rights. This led to him directing that theshare register had to be modified/ corrected. All these instances resulted in Mr. Whitehousebeing sued by his own sons. During the case, certain question marks were presented in contextof the shares which had been allocated. The entire action plan, adopted by Mr. Whitehouse, ledto question marks being put, on his fiduciary duty being breached. This was relatedpredominantly to the issuance of new shares to his sons (Amazon AWS, 2018).3.Duties breached3.1.SectionsEven though the ruling of this case law was given before the present legislation becameapplicable, there is commonality in the sections of the present legislation and in the case indiscussion. Part 2D.1 of the Corporations Act, 2001 covers these sections. Under section 181(1)of this act, the directors are imposed with a duty of conducting their work, in terms of makinguse of powers and in meeting their obligations, in such a manner which is in the best interest ofthe company, for proper purpose and in good faith. The theme is to work towards the interestsof the company, instead of conducting the business in a manner which does just the opposite.In case the criteria lay down under this section is not fulfilled, civil liabilities are applied. Thecivil penalty provisions are provided in detail under section 1317E of the Corporations Act. This
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