- where the company's affairs or an act/omission of or on behalf of the company results in SH being 'unfairly prejudiced' |
- non-exhustive list of remedies |
BUT, petitioners gen. seek order for buyout (purchse of shares by defendant) (Grace v Biagioli) |
need do not only apply to Ds. Can also be used against other SH or 3rd parties |
- need to prove three elements to succeed |
Complained Conduct is an Act/Omission of Company |
- behaviour MUST concern runnig of business |
- courts have adopted an exapnsive approach to this critera |
- actions taken by SH or Ds taken outside the 'organs' of the company (Oak Investements) |
Graham v Every - pre-emption does'nt fall into ambit of 'running of company' |
Prejudical to the SH's Interests* |
1. Prejudicial |
{{fa-cf SH proviso CA, 200aret-right}} conduct harms petitioner's interests |
tested objectively = delibrate harm or bad faith needn't be shiwn (Re Saul) |
2. Interests |
petitioner must be SH BUT conduct of complaint needn't affect them in their capacity as SH |
exclusion fromm management (Phoenix Office Supplies v. Larven) |
Mismanagement - breach of DD's skill & care) (Re Macro) |
Excessive renumeration by D + failure to pay dividends (Re CF Booth) |
Breach of fiduciary duties (Re LOEW) |
refers to legal rights of SH proviso CA, 2006 | constitution | SH agreements |
SH rights are quite limited in |
hence Courts delibrately read 'interests' widely |
especially in 'quasi-partnership' (QP) companies |
Ebrahimi v WG - QP require (1) personal rel. b/w SH involving mutual confidence ||| (2) agreement some/all to paricipate in compant management ||| (3) restrictions placed on share transfer |
QP may exist b/w some SH but not others (Waldron) |
QP 'interests' = legitimate expectations || equitable considerations || informal agreements (Re Sam Weller) (Re a Company) |
3. Unfairness |
prejudice harms petitioner's interests unfairly |
sometimes, conduct is prejudicial BUT not unfair |
(a) where petitioner's own disruptive behaviour resulted in unreasonable conduct (Waldron) |
(b) petitioner given reasonable offer for shares but unreasonably refused that offer (O'Neill v Phillips) |
SHARE VALUATION |
- one petitioners wins case, will most likely want to buyout (Grace v. Biagiolo) |
shares must be valued by 'inidependant valuer' (O.Neil v. Phillips) |
valuation will normally be done on 'pro rata' basis (no discount to share value applied) |
BUT, where person being bought-out worked to company's detriment/ no improvements even if no loss, valuation will be discounted |
OR, where share was acquired by petitioner through investment (Re Blue Index) |