CAPACITY, POWERS AND VALIDITY OF ACTS

1. an order restraining a company that, or a director of a company who, proposes to engage in conduct that would contravene the constitution of the company or this Act from engaging in that conduct.

Annotations:

• a lawsuit brought by a corporation shareholder against the directors, management and/or other shareholders of the corporation, for a failure by management. In effect, the suing shareholder claims to be acting on behalf of the corporation, because the directors and management are failing to exercise their authority for the benefit of the company and all of its shareholders. This type of suit often arises when there is fraud, mismanagement, self-dealing and/or dishonesty which are being ignored by officers and the Board of Directors of a corporation.

1. the Court grants leave to shareholder or director to -
   1. bring proceedings in the name and on behalf of the company or its subsidiary
   2. intervene in proceedings to which the company or any related company is a party for the purpose of continuing, defending, or discontinuing the proceedings on behalf of the company or its subsidiary
   3. Conditions - the Court shall have regard to:
      1. the likelihood of the proceedings that may follow
      2. the costs of the proceedings in relation to the relief likely to be obtained
      3. any action already taken by the company or its subsidiary to obtain relief
      4. the interests of the company or its subsidiary in the proceedings being commenced, continued, defended, or discontinued
      5. The Court must be satisfied
         1. the company or related company does not intend to bring, diligently continue or defend, or discontinue, the proceedings
         2. it is in the interests of the company or its subsidiary that the conduct of the proceedings should not be left to the directors or to the determination of the shareholders as a whole.
2. Notice of the application served on the company or its subsidiary.
3. a shareholder or director of a company is not entitled to bring or intervene in any proceedings in the name of, or on behalf of, a company or its subsidiary.

1. action against a director and in the case of section 91, a secretary, for breach of a duty owed to him as a shareholder.
   1. Action which may not be brought - to recover any loss in the form of a reduction in the value of shares in the company or a failure of the shares to increase in value by reason only of a loss suffered, or a gain forgone, by the company.
   2. S. 91 - Company to maintain share register
      1. An agent may maintain the share register of the company provided that the agent is qualified to be the secretary of a public company in accordance with section 165.
   3. the duties of directors set out in sections 143(1)(c), (e), (f), (h), (j), (k) and (m), 153, 160. 162, 193 and 194 are duties owed to the company and not to shareholders.
   4. Duties owned to the shareholders
      1. S. 94 - The secretary shall take reasonable steps to ensure that the share register is properly kept and that share transfers are promptly entered on it in accordance with section 88.
         1. S. 88 - On the written request of the transferor of any share, debenture or other interest in a company, the company shall enter in the appropriate register the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee.
      2. S. 148 - A director of a company shall, forthwith after becoming aware of the fact that he is interested in a transaction or proposed transaction with the company, cause to be entered in the interests register where it has one, and, where the company has mote than one director, disclose to the Board of the company
         1. where the monetary value of the director's interest is able to be quantified, the nature and monetary value of that interest
         2. where the monetary value of the director's interest cannot be quantified, the nature and extent of that interest.
         3. EXCEPTION: the transaction or proposed transaction is between the director and the company; and (b) the transaction or proposed transaction is or is to be entered into in the ordinary course of the company's business and on usual terms and conditions.
         4. A failure by a director to comply shall not affect the validity of a transaction entered into by the company or the director.
      3. S. 156 - Disclosure of share dealing by directors
         1. director of a public company has a relevant interest in any shares issued by the company
            1. disclose to the Board the number and class of shares in which the relevant interest is held and the nature of the relevant interest
            2. ensure that the particulars disclosed to the Board are entered in the interests register.
            3. after the acquisition or disposition of shares, the director shall disclose to the Board
               1. the number and class of shares in which the relevant interest has been acquired or the number and class of shares in which the relevant interest was disposed of
               2. (ii) the nature of the relevant interest;
               3. (iii) the consideration paid or received;
               4. and (iv) the date of the acquisition or disposition; and (b) ensure that the particular disclosed to the Board under paragraph (a) are entered in the interests register.