7. Oppression - Taught by John Quinn PDF

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7. OPPRESSIONThe basic precept of majority rule, which is the basis for Foss v. Harbottle is more difficult to justify in a small private quasi-partnership type company.S is one of two extremely potent statutory remedies available to disgruntled shareholders. The other is the option to petition the ...

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7.OPPRESSI ON Th eb a s i cp r e c e p to fma j o r i t yr u l e ,wh i c hi st h eb a s i sf o rFo s sv .Ha r b ot t l ei smo r e d i ffic u l tt oj u s t i f yi nas ma l lp r i v a t eq u a s i p a r t n e r s h i pt y p ec o mp a n y . S. 2 1 2i so n eo ft woe xt r e me l yp o t e n ts t a t u t or yr e me di e sa v a i l a b l et od i s g r u n t l e d s h a r e h o l d e r s .Th eo t h e ri st h eo p t i ont ope t i t i o nt h ec ou r tt oh a v et h ec o mp a n ywo u n d u po n“ j u s ta n de q u i t a b l eg r o u n d s ” .Fr e q u e n t l y ,b ot hs e c t i o nsa r ei n v ok e db y d i s gr u n t l e ds h a r e h ol d e r si nt h es a mep e t i t i o n . S. 2 1 2i sg e n e r a l l yapr e f e r a bl er e me d yt oad e r i v a t i v ea c t i o nu n d e ra ne x c e p t i o nt ot he r u l ei nFos sv .Har b o t t l e ,a st h er a n g eo fr e me d i e si nad e r i v a t i v ea c t i o ni smu c h n a r r o we r .A t r a n s a c t i o nmi gh tb es e ta s i d ei nade r i v a t i v ea c t i o nb u tab u y o u tor wi n d i n g u pc o u l dn o tb eo r d e r e d . S. 2 1 2g i v e st h ec o ur tamu c hb r o a de rc h o i c eofr e me d i e st ha nd oe st h ewi n d i n g u p r e me d y ,whe ni ti sn o ta l wa y si nt h ei n t e r e s t so ft h ec o mp a n yt h a ti tb ewo u n du p :t h e a s s e t smi gh th a v et ob es o l du n d e r v a l u e ,a n d ap r o fit a bl e bu s i n e s s mi g htbe t e r mi na t e d. St u d e n t ss h o u l dn o t et h a tas i mi l a rp r o v i s i o n wa sf o u n di n Se c t i o n2 0 5o ft h e Co mpa ni e sAc t1 96 3a n dh e n c et h ema j o r i t yo fc a s e sr e f e r r e dt obe l o w wi l lma k e r e f e r e n c et ot h a ts e c t i on . Se c t i o n21 2o ft heCo mpa ni e sAc t2 0 1 4 Re me dyi n c a s eo f o ppr e s s i on 2 1 2 .( 1 )An yme mbe ro fac omp a n ywh oc o mp l a i n st h a tt h ea ffa i r s o ft h ec o mp a n ya r eb e i n gc o nd u c t e do rt h a tt h ep o we r so ft h e d i r e c t o r so ft h ec o mp a n ya r eb e i n ge x e r c i s e d — ( a )i nama n ne ro p p r e s s i v et oh i mo rh e ro ra n yo ft h eme mb e r s ( i n c l ud i n gh i ms e l fo rh e r s e l f ) ,o r ( b )i nd i s r e g a r dofh i so rh e ro rt h e i ri n t e r e s t sa sme mbe r s , ma ya p p l yt ot h ec o u r tf o ra no r d e ru nd e rt h i ss e c t i o n . ( 2 )I f ,o na na p p l i c a t i o nu n d e rs u b s e c t i o n( 1 ) ,t h ec o u r ti so f o p i n i ont h a tt hec o mp a n y ' sa ffa i r sa r eb e i n gc o n d u c t e do rt h e d i r e c t o r s ' p o we r sa r eb e i n ge x e r c i s e di nama n n e rt h a ti sme n t i o n e d i ns u b s e c t i o n( 1 ) ( a )o r( b ) ,t h ec o u r tma y ,wi t hav i e wt ob r i n g i n g t oa ne n dt hema t t e r sc o mp l a i n e do f ,ma k es u c ho r d e ro ro r d e r sa s i tt h i n k sfit . ( 3 )Th eo r d e r swh i c hac o u r tma ys oma k ei n c l u d ea no r d e r — ( a )d i r e c t i n go rp r o h i b i t i n ga n ya c to rc a n c e l l i n go rv a r y i n ga n y t r a n s a c t i o n ; ( b )f o rr e g u l a t i n gt hec o n du c to ft h ec o mp a n y ' sa ffa i r si nf u t u r e ;

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( c )f o rt h ep u r c h a s eo ft hes h a r e so fa n yme mb e r soft hec o mpa n y b yo t h e rme mb e r so ft h ec o mp a n yo rb yt h ec o mp a n ya n d ,i nt h e c a s eo fap u r c h a s eb yt h ec o mpa n y ,f o rt h er e du c t i o na c c or d i n g l y o ft h ec o mp a n y ' sc a p i t a l ;a n d ( d )f o rt h ep a y me n to fc o mp e n s a t i o n . ( 4 )Wh e r ea no r d e ru n d e rt hi ss e c t i o nma ke sa n ya me ndme n to f a n yc o mp a n y ' sc o n s t i t u t i o n ,t h e n ,n o t wi t h s t a nd i n ga n y t h i n gi na n y o t h e rp r o vi s i o noft h i sAc t ,b u ts u b j e c tt ot h ep r o v i s i o n so ft h e o r d e r ,t h ec o mp a n yc o n c e r n e ds h a l ln o th a v ep o we r ,wi t h o u tt h e l e a v eo ft h ec o u r t ,t oma k ea n yf u r t h e ra me n d me nto ft h e c o n s t i t u t i o n ,i n c o n s i s t e n twi t ht h ep r o v i s i o n so ft h eo r d e r . ( 5 )Ho we v e r ,s u b j e c tt ot h ef o r e g o i n gs u bs e c t i o n,t h ea me n d me n t ma d eb yt h eo r d e rs ha l lb eo ft hes a mee ffe c ta si fd u l yma d eb y r e s o l ut i o no ft h ec o mp a n y ,a n dt h ep r o v i s i o n so ft hi sAc ts h a l l a p p l yt ot h ec o n s t i t u t i o na ss oa me n d e da c c o r d i n g l y . ( 6 )Ac e r t i fie dc o p yo fa n yo r d e ru nd e rt h i ss e c t i o na me n d i n go r g i v i n gl e a v et oa me n dac o mp a n y ' sc o n s t i t u t i o ns h a l l ,wi t h i n2 1 d a y sa f t e rt h ed a t eoft h ema ki n go ft h eo r d e r ,b ed e l i v e r e db yt h e c o mp a n yt ot h eRe g i s t r a r . ( 7 )I fac o mp a n yf a i l st oc o mp l ywi t hs u b s e c t i o n( 6 ) ,t h ec o mp a n y a n da n yo ffic e rofi twh oi si nd e f a u l ts h a l lb eg u i l t yo fac a t e g o r y 4o ffe n c e . ( 8 )Ea c ho ft h ef o l l o wi n g — ( a )t h ep e r s o n a lr e p r e s e n t a t i v eo fap e r s o nwh o ,a tt h ed a t eo fh i s o rh e rd e a t h ,wa same mb e ro fac o mp a n y ,o r ( b )a n yt r u s t e eo f ,o rp e r s o nb e n e fic i a l l yi n t e r e s t e di n ,t h es h a r e so f ac o mp a n yb yv i r t u eo ft h ewi l lo ri n t e s t a c yo fa n ys u c hp e r s o n , ma ya p p l yt ot h ec o u r tu n d e rs u bs e c t i o n( 1 )f o ra no r d e run d e rt h i s s e c t i ona n d,a c c o r d i n g l y ,a n yr e f e r e n c ei nt h a ts u b s e c t i o nt oa me mb e ro fac o mpa n ys h a l lber e a da si n c l u di n gar e f e r e n c et oa n y s u c hp e r s o n a lr e p r e s e n t a t i v e ,t r u s t e eo rp e r s o nb e n e fic i a l l y i n t e r e s t e da sme n t i o n e di np a r a g r a ph( a )o r( b)o rt oa l lo ft he m. ( 9 )I f ,i nt h eo pi n i o no ft h ec o ur t ,t h eh e a r i n gofp r oc e e di n g su n d e r t h i ss e c t i o nwo ul di n v o l v et h ed i s c l o s u r eo fi nf o r ma t i o nt he p u b l i c a t i o no fwh i c hwou l db es e r i o u s l yp r e j u di c i a lt ot h e l e g i t i ma t ei n t e r e s t so ft h ec o mp a n y ,t h ec o ur tma yo r d e rt h a tt h e h e a r i n go ft h ep r o c e e d i n g so ra n yp a r to ft h e ms h a l lb ei nc a me r a . I twi l lb es e e nt h a tt h es e c t i o nc a na r i s ee i t he rwhe r et h e r ei so p p r e s s i o n,o rwh e r e t h e r ei sc o n du c ti nd i s r e g a r do fhi si nt e r e s t sa same mb e r . Se c t i o n21 2i sn o we s t a b l i s h e dt o d a ya st h er e me d ymos tf r e q u e n t l yr e s o r t e dt ob y s h a r e h o l d e r s .Non e t h e l e s sS. 2 12p e t i t i o n sa r ed e s c r i b e db yCo u r t n e ya s“ …ame s s y a n de x p e n s i v eb u s i n e s s ”wh ot h e nq u ot e sMu r p h yJ .i nReMu r r a yCo n s u l t a n t sLt d [ 1 9 9 7 ]3 I R2 9wh oo b s e r v e d: “I th asb e e nob s e r v e db e f o r et h a tt h e r ei sas u r p r i s i n gp a r a l l e lb e t we e nma t r i mo n i a l p r o c e e di n g sa ndp r o c e e di n g su nd e rs e c t i o n2 0 5o ft h e1 9 6 3Ac t .Th e yb o t hi n v ol v ea n 8 1

e x a mi n at i o no ft h ec on d u c to ft h ep a r t i e so v e rap e r i o do fy e a r sa n du s u a l l ya d e t e r mi n a t i o nb yt h e mt oa s s e r tr i g h t sr a t h e rt ha ns o l v ep r o b l e ms .I tma ywe l lb et h at t h edi s p a r a t ef o r mso fl i t i g a t i o na r ef r e q ue n t l yf u e l l e db yab i t t e r n e s sb o r n eo f r e j e c t i o nma t r i mo n i alo rc o mme r c i a l .I nn e i t h e rd i s c i p l i n ec a nt hec o ur t spe r s u ad e t h ep a r t i e st h ati ti si nt h e i rb e s ti n t e r e s t st odi r e c tt h e i ra t t e n t i o nt os o l v i n gt he i r p r o b l e msr a t h e rt h a nl i t i g a t i n gt h e m. ” ( 1 )

WHATCONSTI TUTESOPPRESSI ON?

I nReGr e e no r eTr a di ngCo mpa nyLt dunr e p.HC 2 8 / 3 / 1 9 8 1,Ke a n eJf o l l o we d En g l i s ha u t hor i t y ,a n dr e g a r d e dop p r e s s i v ec o n d uc ta sb e i n g“ b u r d e n s ome ,h a r s ha n d wr o n gf u l . ” ReGr e e no r eTr a d i ngCo mp anyLt dunr e p .HC2 8 / 3 / 1 98 1 Th e r e ,t h ea p pl i c a ntwa so n eo f3s h a r e h o l d e r swh oe a c ho wn e d£ 8 , 0 0 0o ft h ei s s u e d s h a r ec a p i t a lo f£ 2 4 , 0 0 0 .On eo ft h eot h e rs ha r e h o l de r sc o n t r i b u t e daf u r t h e r£ 1 0 , 0 00 a n dr e c e i v e daf u r t h e r1 0 , 0 0 0£ 1s h a r e swh e nt h ec o mpa n yr a ni n t ofina n c i a ld i ffic u l t y . Th et hi r ds h a r e ho l d e ra g r e e dt os e l lh i s8 , 0 0 0£ 1s h a r e st ot h ema j o r i t ys h a r e h o l d e rf o r £ 2 2 , 5 0 0 .Ho we v e r ,t h ema j or i t ys h a r e h o l d e ro n l yp a i d£ 8 , 0 0 0h i ms e l f ,t h eb a l a n c eo f t h emo n e yb e i n gpa i db yt h ec o mp a n y ,o s t e n s i b l ya sas e v e r a n c ep a y me ntf o rt h el o s s o fe mpl o y me n t . Ass u c ht h et r a n s a c t i onwa su n l a wf u l ,b e c a u s ei fi twa sas e v e r a n c ep a y me n ti ts h o u l d h a v eb e e ndi s c l os e dt ot h ea pp l i c a nts h a r e h o l d e ra n da p p r o v e db yt hec o mp a n yi n g e ne r a lme e t i n g .Ot h e r wi s e ,i tc o n s t i t u t e dt h eg i v i n go ffin a n c i a la s s i s t a n c ef o rt h e p u r c ha s eo ft h ec o mp a n y ’ ss h a r e sc o n t r a r yt os . 6 0 ,1 9 6 3Ac t .Ke a n eJs t a t e dt h a tt h e p a y me n tb yt h ec o mp a n yo ft h e£ 1 4 , 5 0 0“ c o n s t i t u t e dc o n d u c to fs u c han a t u r ea st o j u s t i f y ,an di n d e e dr e q u i r e ,t h ema k i n go fa no r d e ru n d e rs . 2 0 5 ( 3) . ” Heo r d e r e dt h e p u r c ha s eo ft h ea p p l i c a n t ’ ss h a r e sb yt h eo p p r e s s o r . Co nd uc td o e snothav et obeunl a wf ult ob eo p pr e s s i v e . Th ed e t e r mi n i n go fwh e t h e ro rn o tc o n d u c ti so p pr e s s i v er e q ui r e sa no b j e c t i v et e s t .I n ReI r i s hVi s i t i n gMo t o r i s t s ’Bu r e a uLt dun r e p .HC7 / 2 / 1 9 7 2 ,Ke n n yJhe l dt ha t“ Th e a ffa i r so fa c o mp a n yma yb ec o n d u c t e do rt h ep o we r so ft h ed i r e c t o r sma yb e e x e r c i s e di nama n n e ro p p r e s s i v et oa n yo ft h eme mbe r sa l t h o u g ht h o s ei nc h a r g eo f t h ec o mp a n ya r eac t i n gh o n e s t l ya ndi ng o o df a i t h .I fo n ed e fi n e so p pr e s s i o na sh a r s h c o n d u c to rd e pr i v i n gap e r s o no fr i g h t st owh i c hhei se n t i t l e d,t h epe r s o nwh o s e c o n d u c ti si nq u e s t i o nma yb e l i e v et h a th ei se x e r c i s i n gh i sr i g h t si nd oi n gwh a th e d o e s .On eo ft h emos tt e r r i f y i n ga s p e c t sofh u ma nh i s t o r yi st h a tma n yo ft h os ewh o m wen o wr e g a r da sh a v i n gb e e no p pr e s s o r sh a daf a n a t i c a lb e l i e fi nt h er i g h t n e s so f wh a tt h e ywe r edo i n g .Th eq u e s t i o nt he nwh e nd e c i d i n gwh e t h e rt h ec o n d u c to ft h e a ffa i r so fac o mp a n yo rt h ep a s s i n go far e s o l u t i o ni so pp r e s s i v ei swh e t he r ,j u d g e db y o b j e c t i v es t a n da r d s ,i ti s . ”

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Si mi l a r l y ,i nReCl u bma nSh i r t sLt d[ 1 9 8 3]I LRM 3 2 3 ,O’ Ha n l o nJf o u n dt h a tt h e p e t i t i o n e rh a db e e no p p r e s s e dn o t wi t h s t a n d i n gt h ea b s e n c eo fa n yi l l e g a l i t yo nt h ep a r t o ft h er e s p o n d e n t s . Op p r e s s i o nne e dno tb eq uame mbe r Ap e t i t i o nc a nf o ri n s t a nc e ,beb a s e do na na r g u me n to fo pp r e s s i o nt h a ti ss uffe r e db y ame mbe ri nh i sc a p a c i t ya sdi r e c t or .Ke a n e( p 3 2 3 4 )s t r o n g l ya r g ue st h a tt h i ss h o u l d b et h ec a s e ,g i v e nt h epr e p o n d e r a n c eofs ma l lq u a s i p a r t n e r s h i pc omp a n i e swh e r ea s h a r e h o l d i n gi si n e x t r i c a b l yl i n k e dt oar o l ea sd i r e c t o r . Th i smu c hi sa tl e a s ts u g g e s t e db yt h ed e c i s i o ni nReMu r p h ’ sRe s t a u r a n t sLt d[ 1 97 9 ] I LRM 1 4 1 ,wh e r et hep e t i t i o n e r ’ sc l a i m wa sb a s e do nh i so p p r e s s i o nq u ad i r e c t o r ,a s h eh a db e e nr e mo v e da sad i r e c t o rb yt h eo t he r2d i r e c t o r s ,t h o u ghh i si n t e r e s ta sa s h a r e h o l d e ro rme mb e rh a dn otb e e np r e j u d i c e d . Mc Wi l l i a m Ja tt h ei n t e r l o c u t o r y h e a r i n gs u g g e s t e dt h a ts . 2 05( t h ep r e c u r s ort oSe c t i o n2 1 2 )o n l ya p pl i e dt oc a s e so f o p p r e s s i o nq u ame mbe r ,b u tGa n n o nJa tt h ea c t u a lh e a r i n ga c c e p t e dt h a th eha d j u r i s d i c t i o nt oma k eas . 2 0 5o r d e r ,a l t h o u g ho nt h ef a c t sh eo r d e r e dt h a tt h ec o mp a n y b ewo un du p . I s o l at e da c t so fo p pr e s s i on Pl o wma nJh e l di nReWe s t b o u r n eGa l l e r i e sLt d[ 1 9 70 ]3Al lER3 74a tp . 3 8 5t h a ta n i s o l a t e da c tofo p p r e s s i o nwa sn o ts u ffic i e ntt ot r i g g e rt h ec o mp a r a b l eEn g l i s hs e c t i o n . Th e( s u bs i l e nt i o ?– We s t b o u r n ei s n ’ tr e f e r r e dt o )d e c i s i o no fKe n n y Ji n Re We s t wi n d sHo l d i n gCo mp an yLt du n r e p.HC2 1 / 5 / 1 97 4i sa u t h o r i t yf o rt h ep r o p o s i t i o n t h a ta ni s o l a t e d ,i nd i v i d u a la c to fo p p r e s s i o ni ss u ffic i e n tt ot r i g g e rt h ea pp l i c a t i o no f t h es e c t i o n . Th i sc a s ei n v o l v e daq ua s i p a r t ne r s h i pc o mp a n y ,wh e r et h er e s p o n de n th a df o r g e dt he s i g n a t u r eo ft h ep e t i t i o n e ro nad e e do ft r a n s f e ro fc o mp a n yl a n d ,a n di nas e p a r a t e t r a n s a c t i onh a df o r g e dt h ep e t i t i o n e r ’ ss i g n a t u r eont h emi n u t e so fame e t i n gi no r d e r f o rt h ec o mp a n yt og u a r a n t e et h eo v e r d r a f to fadi ffe r e n tc o mp a n yt h a tt h er e s p o n d e nt o wn e d .Ke n n yJs t a t e dt h a t“ Thes a l eo ft h el a n d s …wa sa ne x e r c i s eb yt h edi r e c t o r s o ft h e i rp o we r si nama nn e rwh i c hwa sf r a u d u l e n tando p p r e s s i v et ot h ep e t i t i on e ra n d wa si nt o t a ldi s r e g a r do fhi si n t e r e s ta same mb e ro ft h ec o mp an y .Ont h i sg r o u nd a l o net h ec on d i t i o n sf o rt h ee x e r c i s eo ft hep o we r so ft h ec o u r tu n de rs . 2 0 5 ( 3 )h a v e b e e nf u l fi l l e d. ” Ke a n eJi n ReGr e e n or eT r a d i n g Co mpa n yLt du n r e p .HC 2 8 / 3 / 1 9 8 1( wh od i d c o n s i d e rWe s t b o u r n e )s t a t e dt h a ta ni s ol a t e da c tofo p p r e s s i o nwo ul dn otn or ma l l yb e s u ffic i e n tt oj u s t i f yr e l i e f .I nt h a tc a s eh o we v e r ,h eg o ta r o u n dt h ea pp a r e n td i ffic u l t y t h a th ewa sc r e a t i n gf o rhi ms e l fb yfin d i n g“ amu l t i p l i c i t yo fu n l a wf u l n e s si nt h es ame o n ea c ti no r d e rt or ai s ei tt ot h el e v e lo fo p p r e s s i v ec on d u c t . ” Th us ,i na na p pr o p r i a t ec a s e ,i two u l ds t i l ls e e mt ob et h ep o s i t i o ni nI r e l a n dt h a ta n i s o l a t e da c tma yb es u ffic i e n tt oc o n s t i t u t eo p p r e s s i o n . 8 3

I nReEme r a l dGr o u pHo l d i n g sLt d[ 2 0 0 9 ]I EHC4 4 0t h ep e t i t i o n e rwa sas h a r e h ol d e r o ft h ec omp a n ywh i c hwa sp a r to fagr o u po fc o mp a n i e s .Th efir s ta n ds e c o n dn a me d r e s p o nd e n t swe r ed i r e c t o r so fEGH a n dwe r ea l s ot hes o l es h a r e h o l d e r so fat hi r d c o mp a n yc a l l e dBe s tCh r i s t ma sTr e e sLi mi t e d( BCTL)wh i c h ,a tt h et i met hep e t i t i o n wa sp r e s e n t e d ,o wne db e t we e n7 58 0 %o ft h es h a r e so ft h ec o mp a n y .Th ep e t i t i o n e r a l l e g e d an u mb e ro fa c t sofo p pr e s s i o ni nd i s r e g a r dofi t si nt e r e s t s ,a l l e g i n gi n p a r t i c u l a rt h a tt h er e s p o n de n td i r e c t o r so ft h ec omp a n yh a dd i v e r t e das i gn i fic a n tp a r t o fi t sb u s i ne s st oBCTL.Thep e t i t i o n e rh a dn oi n t e r e s ti nBCTLa n dc l a i me dt h a tt h i s c o n d u c th a dp r e v e n t e di tf r o mp a r t i c i pa t i n gi nt h epo s i t i v et u r n a r o u n do ft h ec o mp a n y . Th er e s p o n d e n t sa r g ue dt h a tt h er e a s o nt h a tt he yh a dt r a n s f e r r e ds omu c ho ft h e b u s i n e s st oBCTLwa st os e c u r ef u n d i n gf r o m An g l oI r i s hBa nka sun l i k et h eo t h e r c o mp a ni e si nt h eg r o upBCTLwa sf r e ef r o md e b t .Ther e s p o n d e n t sa r g u e dt h a tt he d e c i s i o nt od ot h i swa st a k e nb o nafid ei nt h ei nt e r e s t so ft h eg r o u pa sawh o l e . I nde c i d i n gt ogr a n tr e l i e ft ot h ep e t i t i o n e rFi n l a yGe o g h e g a nJ .h e l dt h a t : “Ia ms a t i s fi e dt ha tt h ed e c i s i on st a k e nb yt h er e s po nd e n t st ous ean e wc o mpa n y wi t h i nt h eGr o u p ,wi t h o uth i s t o r i cd e b t ,f o rf u t ur ep l a nt a t i o n st os e c u r ef u n d i n gf r om An g l oI r i s hBa n kwa sad e c i s i o nwh i c hwa st a k e nb o nafi d ei nt h eo v e r a l li n t e r e s t so f t h eEme r a l dGr o u pa n dt h ec o n t i n u a t i o no ft h eCh r i s t mast r e ebu s i n e s so ft h e Eme r a l dGr o u pa n di t ss u r v i v a l .Ho we v e r ,Ih a v ea l s oc o n c l u d e dt h a tt h ed e c i s i o n t h a tt h ep a r t i c u l arc o r p or a t es t r u c t u r ewo u l db et ha tan e wc o mp a n y( BCTL)wo ul d b e c o met h eh o l d i n gc o mp a n yo ft h eGr o u pa n dt hec o mp a n yt oo wnt h ep l an t a t i o n s , wi t h o u to ffe r i n gBa n fit h eop p o r t u n i t yt oac q u i r es h ar e si nBCTL,ma d et h ed e c i s i o n s t a k e non e swh i c hwe r ei nd i s r e g a r do ft h ei n t e r e s t so fBan fia st h ebe ne fi c i a lo wn e ro f t h es h a r e sa n dap e r s o ne n t i t l e dt ob e c o meame mb e ro fEGHL. ” Cur r e nto rp a s ti nc i d e nc e so fo p p r e s s i o n? Se c t i o n2 12 ( 1 )p r o v i de st h a tt h ea ffa i r so ft h ec o mpa n ya r ebe i n ge x e r c i s e di na n o p p r e s s i v ema n n e r . I twa sh e l db yt h eCo u r to fAp p e a li nReJ e r my nS t r e e tT u r k i s hBa t h sLt d[ 1 9 71 ]3Al l ER1 8 4t h a tt h eo p p r e s s i o nc o mp l a i n e do fmu s tb eo pe r a t i v ewh e nt h ea p pl i c a t i onwa s c o mme n c e d ,a st h es e c t i o nwa sc a s ti nt h ep r e s e ntt e n s e . Th et e mp o r a lr e q u i r e me n to ft h es e c t i onwa sc on s i d e r e di nReGr e e n o r eT r a d i n g Co mp a nyLt d.[ 1 9 8 0]I LRM 9 4wh e r eKe a n eJ .s t a t e dt h a t“ i ti st r u et h a tt hewor d i n g o ft h es e c t i o ne n v i s a g e st h a tt h eo p p r e s s i o nc o mp l ai n e do fi so p e r a t i v ea tt h et i me wh e nt h ep e t i t i o ni sl a u n c h e d. ” Ke a n e( p . 3 2 6 )r e g a r d st h i sa sa nu n n e c e s s a r i l yn a r r o wc o ns t r u c t i o n ,a n dp r o ffe r st h e c a s eo fac o mp a n yt h a th a se ffe c t i v e l yc e a s e dt of u n c t i o na sar e s u l to ft h eo p p r e s s i o n , a n di n d e e dt h i swa st h ep o s i t i o ni nS c o t t i s hCo Op e r a t i v eWh o l e s a l eS o c i e t yLt dv . Me y e r[ 1 9 59 ]AC3 24 ,y e tt h eHo u s eo fLo r dsh a dnod i ffic u l t yi nu p h o l d i n gafin d i n g o fop p r e s s i o nt h e r e .

8 4

Op p r e s s i v eMa na g e me nt Me r ei n c o mp e t e n c eormi s ma n a g e me n twi l ln o tc o n s t i t u t eo p p r e s s i o n . I nReFi v eMi n u t eCa rWa s hS e r v i c eLt d[ 1 9 6 6 ]1Al lER2 42 ,t h epe t i t i o ne rc l a i me d t h a tt h ea ffa i r so ft hec o mp a n ywe r eb e i n gc o n d u c t e ds o l e l yi nt h ei n t e r e s t so ft h eMD a n dh i swi f e .Bu c kl e yJr e f u s e dt ofin do p p r e s s i o n ,d e c i di n gt h a te v e ni ft h eMD wa s u n wi s e ,i n e ffic i e n ta nd c a r e l e s si nt h ep e r f o r ma n c eo fh i sd u t i e s ,t he r ewa sn o s u g g e s t i o nt h a th eh a da c t e dun s c r up u l o us l yorwi t ha n yl a c ko fp r o b i t y ,o rt h a th i s c o n d u c twa sh a r s h ,b ur d e n s omeo rwr o n g f ult o wa r d sa n yme mb e ro ft h ec o mp a n y . Si mi l a r l y ,i nReCl u b ma nS hi r t sLt d[ 1 9 8 3 ]I LRM 3 2 3,O’ Ha n l o nJd e c l i n e d“ t o c l a s s i f ya so pp r e s s i v ec o n d u c twi t h i nt h eme a n i n go ft h e...