Question 1
Tweedle Pty Ltd is a company that lays down railway track in newly rising countries. A, B, C and D are the 4 directors of the company. The directors are the sole shareholder of the company, each director holding 25% of the shares.
A, B, and C have decided that for personality reasons they can’t continue to work with D. They have set a new company, Needle Pty Ltd, from which D is excluded. When Tweedle Pvt Ltd was approached by South African government to construct a new railway line, A, B and C secretly negotiated to have the government contact referred to the Needle Pvt Ltd.
D is now aware that the government contract has been referred to the Needle and approaches you for advice.
Required:
(a) Have the 3 directors breached any duty they might have had to Tweedle?
(b) What remedies, if any, does D have in regard to actions of A, B and C in taking work from Tweedle and transferring it to Needle?
Question 2
S, E and R are shareholders and directors of Z Pvt Ltd (Company Z). Company Z owns a holiday house which it uses to rent out. Company’s constitution states that:
1. S is to be appointed as the company secretary for a life
2. Each shareholder can employ the property for 2 weeks. For S, it will be from 1-14 January.
It was found that January is usually the busiest month and therefore E&R voted (through special resolution) to change S’s usage to June. Constitution also needs users to keep the home clean after employ. E doesn’t clean the home and S always has to clean up. S complains to R about this.
E & R are getting annoyed with S. They called an additional ordinary shareholder’s meeting and voted to change the constitution through requiring appointment as company secretary to be appointed by directors. They then called a directors’ meeting to remove S as a secretary and director of the company.
Question 3
Nong Pvt Ltd held its yearly general meeting on 6 November 2009. The notice of the meeting sent by Nong Pvt Ltd consists of the following item of special business:
“To consider and, if thought fit, pass the following resolution as an ordinary resolution:
‘That commencing on 1 December 2009 the total amount that might be provided to the non-executive directors by way of compensation for their services as directors in respect of each financial year be raised by the amount of $750,000 to the amount of $2,250,000 per financial year.’
Vince is a shareholder in Nong Pvt Ltd. He thinks the non-executive directors are already overpaid and opposes the resolution. He attends the meeting and makes a long speech opposing it. After 20 minutes, David (a director) asks him to stop speaking and sit down. Is this allowed?