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Oppression Actions: Sections 232 and 233 of the Corporations Act (Cth)

Oppression Actions: Sections 232 and 233 of the Corporations Act (Cth). Geoff Clift. Law Society of the Northern Territory. General Principles. Section 232: 4 Distinct Grounds and a Composite Whole Section 232(d) and (e): Commercial Unfairness Section 232 (d): Independent Ground

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Oppression Actions: Sections 232 and 233 of the Corporations Act (Cth)

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  1. Oppression Actions: Sections 232 and 233 of the Corporations Act (Cth) Geoff Clift Law Society of the Northern Territory

  2. General Principles • Section 232: 4 Distinct Grounds and a Composite Whole • Section 232(d) and (e): Commercial Unfairness • Section 232 (d): Independent Ground • Objective Test of Unfairness • Scope and Aim of Sections 232 and 233 • Past Conduct • Acquiescence and Consent • Self-help • Onus of Proof

  3. Board Decisions • Role of Management • When a Court May Intervene

  4. Quasi- Partnership Cases • 3 Elements Identified in Ebrahimi v Westbourne Galleries Ltd • Implication of a Right to Participate in Management • Unjust, inequitable and Unfair for the Use of Majority Voting Power to Remove the Minority from Management • Circumstances in Which a Right to Participate in Management May be Lost • Relief May Only be Granted Where Participation in Management Affords a “Return for Investment”

  5. Management Fees and Payment of Dividends • ”Ripping off” the Company • Independent Advice on Management Fees • Dividend Policies • Management Fees as De Facto Dividends

  6. Share Issues • Purpose of the Share Issue • When Dilution of the Voting Power of the Minority via a Share Issue May be Permitted

  7. Litigation Costs • When Payment by the Company of Legal Costs Incurred by the Majority in Defending Proceedings May Constitute Oppression • Considerations which Militate Against a Finding of Oppression

  8. Denial of Access to Information • When Denial of Access to Information may Amount to Oppression

  9. Remedies • Plenary Power under Section 233 • General Principles Governing the Exercise of Discretion • Winding Up as a Last Resort • The Ordinary Order • Valuation of Shares • Extraordinary Orders

  10. Related Remedies • Section 461 (1) (k) • Section 109 of the Associations Act

  11. Conclusion and Questions

  12. Claims against Creditors and Directors by a Company in Liquidation Guy Newton Law Society of the Northern Territory

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