CORPORATE LAW ESSAY QUESTION – NOTE: DUE DATE HAS BEEN EXTENDED
DUE DATE FOR OUTLINE: Week 8 (night before your class as per assessment brief)
DUE DATE FOR ESSAY: Week 9 (4pm on Friday of Week 9, as per assessment brief)
In 2010, the five Brown brothers formed a private company called “The Grumpy Grande Pty Ltd”
(“TGG”). The business was an instant success and the brothers shared equally in the decisionmaking and profit sharing.
According to the company constitution:
1. TGG “specialises in bringing premium coffee, brewed fresh from the back of our
minivan, straight to your sporting, corporate or social event”;
2. The five (5) Brown brothers are the only directors and shareholders;
3. That any of the brothers wishing to sell their shares in the company, can only do so
with the permission of the other directors & even then, can only sell his shares
internally, to the existing directors;
4. That all business decisions for TGG, must be made by majority vote.
In the last few years however, TGG’s business started slowing down, which put great strain on the
relationship between the brothers. Suspecting that their youngest brother, Tim, was thinking of
resigning, the four (4) oldest brothers began bullying Tim and taking every opportunity to use their
majority vote in order to block Tim’s business ideas and to sell valuable company assets, at
bargain prices, to themselves, despite angry protests from Tim.
One afternoon, Tim overhears his oldest brother talking on the phone and saying: “..not long until
we’re rid of him guys…just remember, he needs our approval to sell his shares!… so, when he tries
to pull his investment out of the company, we can just use our majority vote and prevent him
selling his shares… if he’s angry enough, he will just walk away from the business and we won’t
have to pay him out… ”
With reference to primary and secondary sources, advise Tim of (a) one Equitable Remedy and (b)
one Statutory Remedy available to him to overcome this situation. (Note: Where applicable, you
MUST include an explanation of the relevant test used by the court to determine whether Tim is
entitled to the remedy).