Comparing Foss V Harbottle Rule And Derivative Action

The highly controversial case of Gambotto v WCP Ltd not only reduced the ability of companies to acquire shares compulsorily through an amendment to their constitutions, but also stimulated debate around the topic of share acquisition itself . The High Court decision in Gambotto was recognized immediately to be extremely important in the corporate world, with one headline stating it had “radically altered the balance of power within corporate Australia” . Despite the significance of the ruling, responses to Gambotto have generally been negative. Courts have almost uniformly chosen not to extend the principles in Gambotto to situations in other cases, with the result that the principles have stayed narrowly confined to the

Equity has a major role through the Australian legal system, with its ability to control abhorrent situations inclusive of cases where unconscionable conduct is apparent. However in a recent case of the ACCC v Zanok Technologies Pty Ltd it was held that a high level of moral obloquy is needed to prove unconscionable conduct. This case has created the question of whether a ‘high moral obloquy’ creates a liability that goes outside the scope of unconscionability, specifically in cases dealt with in equity.

The Australian Securities Investment Commission (ASIC) brought a case against Andrew Lindberg who was accused of breaching duties as a director when he was in service. Andrew Lindberg was ex Managing Director of Australian Wheat Board (AWB) who was accused to have contravened with his duties as a director. Justice Robson from The Victorian Supreme Court handled this case and on the 9th of August, 2012, the defendant was penalized. The case was brought to The Victorian Supreme Court presided by Justice Robson who handed down the penalty judgment on 09 August 2012 against the defendant.

This essay will explain the concepts of separate personality and limited liability and their significance in company law. The principle of separate personality is defined in the Companies Act 2006(CA) ; “subscribers to the memorandum, together with such other persons as may from time to time become members of the company are a body corporate by the name contained in memorandum.” This essentially means that a company is a separate legal personality to its members and therefore can itself be sued and enter into contracts. This theory was birthed into company law through the case of Salomon v Salomon and Co LTD 1872. This case involved a company entering liquidation and the unsecured creditors not being able to claim assets to compensate them. The issue in this case was whether Mr Salomon owed the money or the company did. In the end, the House of Lords held that the company was not an agent of Mr Salomon and so the debts were that of the company thus creating the “corporate Veil” .

D) Can a shareholder bring a personal action, and against whom – the company or the director- based on the facts of the question? Do you think there are grounds for a shareholder to bring derivative action? What remedies can be obtained both for personal and derivative action? (6+6+3=15 marks)

Rule 23.1 governs derivative suits in which a plaintiff seeks to assert a right belonging to a corporation (or similar entity) in which the plaintiff is a shareholder, on behalf of the corporation that is not pursuing the claim itself. Rule 23.2 governs actions by or against unincorporated associations (Rule 23, 2009).

Your honors, this case is about the fundamental right of shareholder protection. The right of a small businesswoman to pursue her goals and not be punished for her initiative and contribution that is so essential to American business. That is the right

Woodward, S., Bird, H. & Sievers, S. (2005). Corporations Law in Principle 7th ed. Pyrmont, NSW: Lawbook Co.

According to the pro and contra Section 203D and 203E of the Corporations Act as above, most judges and scholars agree that the procedure of removal directors as stipulated in the Corporations Act provides fairness treatment for the directors who may be removed. However, they still strongly argue whether the Section 203D is mandatory or not. Moreover, they questioned the existence of Section 203E since it eliminates flexibility for companies to make decision particularly in the emergency situation as explained above. Therefore, in order to provide broader perspectives about the relevancy of Section 203D and Section 203E, it is necessary to compare the procedure of removal directors in the Australian legislation with the

Since the early 1990s, Australian judicial system has experienced a great flux revolving around the notion of good faith in the performance the enforcement of contracts. The leading case Renard Construction (ME) Pty Ltd v Minister for Public Works (Renard) along with Preistly JA’s judgment commenced the controversial introduction of universal obligation of good faith in all contracts. Such introduction was also confronted by the opposing force of the more conservative judgments, such as those of Meagher JA in Renard and Gummow J in Service Station Association v Berg Bennett & Associates Pty Ltd . In order to correctly assess the extent to which the High Court of Australia should recognize that in all contracts, parties

 Students have been shown in class on how to solve a law problem assignment – ie,

1. Consider Dunlap’s statement on page 3 of the case: “Stakeholders! Every time I hear the word, I ask how much did they pay for their stake? There is only one constituency I am concerned about and that is the shareholder primacy? Do you agree or disagree with Dunlap’s view of shareholder primacy? Explain

The concept of a company being a separate legal entity is the most striking illustration in separating the company from its owners. A paramount principle of corporate law is that no shareholder or member of a company is made liable for the obligations incurred by such incorporations A company is different from its members in the eyes of law. In continuations to this the opposite also holds true in the sense that neither can the company be held liable for the acts of its members. It is a fundamental distinction that a company is distinct from its members.

There is no clear framework of the rules that would cover the contingencies of a ruling to pierce the corporate veil Idoport Pty Ltd v National Australia Bank Ltd. The corporate Veil usually protects owners and shareholders from being held liable for corporate duties. Yet again a decision made by the court to lift that veil and would place the liability on shareholders, owners, administrators, executives and officers of the company without ownership interest. The purpose of this essay is to conduct an analysis on the concept of lifting the corporate veil and to review the different views on its fairness and equitability to present a better understanding of the notion, the methods used was throughout researching the numerous scholars views on the subject, case law and statutes examples, and the evidence provided by the empirical study of Ramsay & Noakes. When we discuss the lifting the corporate veil the first case that pops out is the case of Salomon V A. Salomon & Co Ltd, since the decisions of applying the corporate veil were first formed as a consequence of this case. The idea covers all of company law and distinguishes that a company is a separate legal entity from its members and directors. Furthermore, spencer (2012); have indicated that one of the core principles that followed the decision in Salomon v Salomon was the wide acceptance one man company’s. However In order to form a

The basic principal relating to the administration of the affairs of a company is that “the will of the majority is supreme”. The general rule is that the decisions of the majority shareholders in a company bind the minority. 1 In a world that recognizes ‘simple majority rules’, minority shareholders of companies are by default vulnerable to oppression,