Ashton is a graphic designer and shareholder in Manly Pty Ltd ("Manly") a profitable graphic design company.He holds 400 of the 1,000 issued shares.The other 600 shares are divided equally between the other 12 graphic designers in Manly.Two of these other 12 graphic designers, Jack Smith and John Smith, are the directors of the company. Ashton did not support the election of these directors but a majority of the other shareholders voted for them. The company has paid dividends to the shareholders from time to time but not for the last 3 years.

Manly uses computer products supplied by Nicola Pty Limited ("Nicola").Nicola has always supplied the computer products on time and at a good price. Jack and John are in fact shareholders in another computer supplier, Liberty Pty Limited ("Liberty"), and for the last year or so they have wanted to replace Nicola and make Liberty the supplier to Manly. To achieve their goal Jack and John rescind the contract with Nicola and on behalf of Manly enter into an agreement with Liberty to supply computer products to Manly. Several of the shareholders are friends of Jack and John and support the decision to change suppliers but Ashton has consistently voiced his opposition to a change of supplier to Liberty. Ashton is also particularly worried when he finds out that the directors are planning to announce a new share issue of a further 1000 shares. He fears the shares will be issued to the director's family and friends.

As Ashton is planning to buy an investment property for himself he has recently begun contacting other shareholders seeking their support in requesting that Manly pay a dividend in the current year. He has little success with the shareholders but still puts his proposal to the directors. Neither Jack nor John are in favour of the payment of a dividend and reject Ashton's request. Several of the other shareholders, particularly the friends of the directors, now consider Ashton as a troublemaker.

Jack and John decide to call an extraordinary general meeting. Two motions are put to the meeting:

- That the change of the hardware supplier to Liberty be approved by the shareholders; and

- That Manly's constitution be changed from one vote per share to one vote to every ten shares up to a maximum of ten votes per shareholder.

(i)Discuss whether the directors have breached their duties. Explain the remedies or penalties applicable and whether the shareholders can ratify the directors' conduct.

(ii)Discuss Ashton's position as a shareholder. What are his rights and what orders can he seek?