Colour Dots Ltd ("Dots") is a public company of which Black, White and Brown are the directors. Each of these directors controls a 10% shareholding in Dots. No other single shareholder holds more than a 2% of shares in the company.

Colour Dots was established some time ago in order to improve the buying power of a number of smaller retailers of Dots so that they might meet the competition of larger retail chains. For 6 years the company has actively pursued the object of purchasing paint from manufacturers on behalf of members at a price comparable to that paid by the large retail chains.

However, in the last year, the present directors, who are among the largest of the small retailer members of Dots, have considered introducing scaled benefits for members according to volume of purchases. They say that the smaller members of Dots will still remain better off than if they were to purchase alone, and that to meet increasing administrative costs, some recognition should be paid to the fact that a small number of Dots' larger members have really been responsible for the benefits received by all members. At various meetings over the past year, directors have continually raised these points.

Last week, the board passed a resolution establishing a new members' buying list, by which the larger members of Dots will continue to buy at prices comparable to those paid by the retail chains and the smaller purchasing members will pay 25% more. George Brush, a member holding a 2% shareholding wishes to challenge the directors' actions.

Advise George Brush on whether he can obtain a relief under s1324 of the Corporations Act.

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