What is the significance of gambotto case?

What is the significance of gambotto case?

Australian legal history. In Gambotto, the High Court of Australia struck down an amendment to a company’s constitution2 which enabled the majority shareholders to compulsorily acquire, or expropriate, the shares of the minority.

What is the gambotto test?

The majority laid down a two-limbed test that must be satisfied when wanting to amend a constitution to permit expropriation: the power is exercisable for a permissible purpose; and. its exercise will not operate oppressively in relation to minority shareholders.

What is an expropriation of shares?

In other words, an expropriation may be justified where it is reasonably apprehended that the continued shareholding of the minority is detrimental to the company, its undertaking or the conduct of its affairs — resulting in detriment to the interests of the existing shareholders generally — and expropriation is a …

What is statutory derivative action?

The statutory derivative action is a special type of court action that enables a shareholder to pursue a wrongdoer in the company, for example, by proceeding against a director for breach of directors’ duties.

What is a minority shareholder Australia?

Quite simply, a minority shareholder is one who owns less than 50% of a company. In that great tradition of majority rule, the shareholders who own more than 50% of the company, either individually or collectively, have the final say, assuming they can all agree.

What is the example of expropriation?

The Process of Expropriation When a government seizes private property for public use, it is known as condemnation. The constitutions of most countries allow their governments to do so. For example, the U.S. Constitution gives the right of eminent domain to government bodies at the federal, state, and municipal levels.

What is the purpose of expropriation?

An expropriation is the unilateral acquisition of privately owned property by the State for a public purpose. Expropriations generally occur for a public purpose such as the construction of a road or power plant, and are accompanied by compensation.

Under what circumstances would a statutory derivative action be applicable to a company?

A derivative action applies in situations of ‘wrongdoer control’, and may be brought against the company itself or to pursue rights against third parties where directors are unwilling or conflicted.

What is statutory derivative action s 236?

Section 236 of the legislation permits a member or officer to bring proceedings on behalf of a company, or intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for those proceedings.

What rights does a 5% shareholder have?

A shareholder or group of shareholders representing at least 5% of voting rights can request the directors of the company to call a general meeting (section 303, Companies Act 2006). A shareholder cannot ask a court or government body to call or intervene in a general meeting.

What can a 5% shareholder do?

Owning 5% of the company’s shares gives a shareholder more ability to influence the affairs of the company, including the right to: require a resolution to be proposed at shareholders’ meetings; require a general meeting be held; prevent the deemed re-appointment of the company’s auditor.

What are the types of expropriation?

Also referred to as nationalization, expropriation of foreign property is of two types:

• Direct Expropriation. Direct expropriation occurs when there is a legal transfer of title of the property.
• Indirect Expropriation.