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Group Assignment Nassar v Innovative Precasters Group Pty Ltd (2009) NSWSC 342 2017 (Student Details:) 07-Sep-17 Introduction

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Nassar v Innovative Precasters Group Pty Ltd (2009) NSWSC 342 2017 (Student Details: ) 07-Sep-17 Introduction The Corporations Act, 2001 (Cth) is the main legislation which is applicable for the companies in Australia. Nassar v Innovative Precasters Group Pty Ltd (2009) NSWSC 342 was one of the cases where the court concurred that there was the need for mutual cooperation and a particular trust level for running the day to day management of the company in a smooth manner

Group Assignment Nassar v Innovative Precasters Group Pty Ltd (2009) NSWSC 342 2017 (Student Details:) 07-Sep-17 Introduction

   Added on 2019-11-26

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Group Assignment Nassar v Innovative Precasters Group Pty Ltd (2009) NSWSC 342 2017 (Student Details:) 07-Sep-17 Introduction_1
CASE STUDY2Introduction The Corporations Act, 2001 (Cth) is the main legislation which is applicable for the companiesin Australia. Through Part 2D.1 of this act, the directors and the officers of the companies havebeen given certain duties, which have to be fulfilled as a statutory requirement (Latimer, 2012).Apart from this, the common law also imposes certain duties on the directors, which have to beadhered to in a strict manner. The reason for this is that a breach of director duties results inpecuniary penalties, disqualification orders and even attracts criminal liabilities (Cassidy, 2006). Nassar v Innovative Precasters Group Pty Ltd (2009) NSWSC 342 was one of the cases wherethe court concurred that there was the need for mutual cooperation and a particular trust level forrunning the day to day management of the company in a smooth manner. The court in this statedthat the winding up of the company, based on the present circumstances, was merely a remedy tothe situation which was present, where the working relationship required trust, confidence andmutual co-operation and these were broken down (Chamberlains, 2017).The following parts analyses this case, particularly in terms of the duties and responsibilitieswhich were contravened. Nassar v Innovative Precasters Group Pty Ltd (2009) In this case, the proceedings were related to the activities carried on by the individuals regardingthe three companies that had been created and owned by them, i.e., the Innovative PrecastersGroup Pty Ltd, herein referred to as IPG, the IP Group Pty Ltd, herein referred to as Group, andthe DGN Investments Pty Ltd, herein referred to as DGN, and these three were the defendants of
Group Assignment Nassar v Innovative Precasters Group Pty Ltd (2009) NSWSC 342 2017 (Student Details:) 07-Sep-17 Introduction_2
CASE STUDY3this case, along with the others. In the first company, the shares were held by Marfern Pty Ltdand by the two companies respectively held by Grass and Oliveira. In the latter two companies,Nassar, Grasso and Oliveira were the only directors (Australasian Legal Information Institute,2009a). The allegations which were made in this case were related to the affairs of the company not beenconducted in a proper manner as they were contrary to the members’ interests as a whole, owingto the conduct being unfairly prejudicial or oppressive or unfairly discriminatory particularlyagainst the plaintiffs of this case (McInerney, 2015). Nassar and Marfern made the claim againstthe two companies in which they were shareholders and Nassar alone made a claim for thecompany in which Marfern was not a member. The key relief which the plaintiff sought was thethree companies to purchase the shares of the plaintiff and the alternative claim was for thecompany to be wound up (Jade, 2009). Duties/ Responsibilities breached The directors of each and every company owe certain duties towards the shareholders of thecompanies. This is in particular reference to protection of the minority shareholders, owing to thefar reaching remedies which are given to the oppressed minority shareholders (Paolini, 2014).The directors have the duty under section 181 whereby the directors and the key officers of thecompany have to use their powers and fulfil their obligations for the proper purpose, in goodfaith and in the best interest of the company (Australasian Legal Information Institute, 2017).The breach of this section attracts civil penalties under section 1317E of this act (FederalRegister of Legislation, 2017). Derived from this duty is the duty of the directors towards theinterests of all the shareholders.
Group Assignment Nassar v Innovative Precasters Group Pty Ltd (2009) NSWSC 342 2017 (Student Details:) 07-Sep-17 Introduction_3
CASE STUDY4The duty towards minority shareholders of the company is enhanced because the minorityshareholders do not have the ability of influencing the affairs of the company. Hence, it isimportant for the directors to act fairly for these shareholders and make it their duty to ensurethat the decisions taken by them promote the interest of all the shareholders and the company. Incase the directors fail to do so, they not only breach their statutory duties, but also have the riskof being engaged in oppressive conduct, where section 232 and 233 apply (Easton, 2013). The basis of the claim was the oppressive conduct of the management of the company and so, thesection 232 and 233 were applied. The statutory jurisdiction which is created under thesesections provides a way through which the legal rights can be looked beyond by the court andsuch action is undertaken which is equitable and just. The partnership between Oliveira andGrasso was a key part which led to the oppression in this case. Though, this claim of the plaintiffcould not stand. In order to hold Oliveira and Grasso liable, it was shown before the court thatthey had failed in taking the requisite steps, which was required on by being the directors of thecompany. They failed to avoid the conduct which was unfairly discriminatory, unfairlyprejudicial or oppressive conduct, which was a mechanistic and simple approach (Jade, 2009). For avoiding these charges, the member on whom the expectation of facilitating the adherence offair terms has been placed are not required to make immediate detailed offers which areconstrued in isolation from negotiation and discussion, which could fulfil the criteria of fairnessled by lord Hoffmann. It was stated by the court that Nassar had the right to expect a reasonableapproach towards a negotiated exist. However, Nassar deliberately chose not to negotiate onreasonable terms of withdrawal. This did not deny the fact that the management was indulged inoppressive conduct. So, not only were there shortcomings in the conduct of the plaintiff also,there was an absence of oppressive conduct in the view of the court after they considered the
Group Assignment Nassar v Innovative Precasters Group Pty Ltd (2009) NSWSC 342 2017 (Student Details:) 07-Sep-17 Introduction_4

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