Question
Coffee Guy Pty Ltd (CG) is a company that sells wholesale coffee beans and operates a number of coffee shops across Australia. Jeff and Arlo
Coffee Guy Pty Ltd (CG) is a company that sells wholesale coffee beans and operates a number of coffee shops across Australia. Jeff and Arlo are brothers and are the only directors of CG. They also own 70 % of the shares in CG. Roxanne owns 9% of the shares and the remainder is held by a large group of individual shareholders.
At a recent company meeting, CG resolved to enter into a contract with Marketing Maniacs to undertake all of CGs marketing and social media. The company also resolved to pay Jeff and Arlo a bonus of $20,000 each, in addition to their salaries.
Roxanne has obtained information which shows that Marketing Maniacs is owned by Jeff and Arlo's sister, Trixie. This was not disclosed at the meeting and the amount paid to Marketing Maniacs is far in excess of other similar marketing contracts.
Assume that Jeff and Arlo have breached their duties to act in good faith and in the interests of the company and the duty to avoid conflicts of interest. CG refuses to take legal action against the directors.
Advise Roxanne whether the court will grant her leave to bring a statutory derivative action under ss 236/237 of the Corporations Act2001 (Cth).
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