Commercial Law

QUESTION 1 Reg Mortlock has been a successful businessman since the 1980s. He now runs a vehicle manufacturing company, Wheelcorp Pty Ltd. (\"Wheelcorp\"), specialising in vehicles for special occasions, such as funeral hearses, 'hurnmer' limousines and amphibious vehicles. It is a family business. His wife Rose holds 1000 shares in the company (but is not appointed as a director), as does Reg himself, and Reg is director and Chair of the Board Their two sons Jo and Larry are also directors and also hold 1000 shares. Jo, a mechanical engineer by profession, was appointed managing director by the board There are a number of other relatives of Reg who hold smaller parcels of shares, the largest being 50 shares. Over time, Jo persuades Reg that the company should be reinventing itself as an environmentally friendly and sustainable producer of vehicles, and should convert from manufacturing petrol vehicles to ones that can 'ex' between petrol, and biofuels made from used vegetable oil. In order to invest in this large project, which will require major changes to their assembly line equipment, Reg announces that for ve years the company will pay no dividends as this money will go into the investment. In a draft letter that he intends to send to shareholders with the papers for the upcoming Annual General Meeting, he writes, \"It's worth sacricing your short-term nancial return for the greater good of the planet- your children, and mine, will thank you for it\". Jo certainly is thankful, but Larry is not so keen. His partner works in the coal industry. Larry organises for himself and some other family shareholders to propose a resolution directing the board to pay dividends each year. Larry requests Reg to put that resolution in the agenda and in the required notice to go to members. Larry also wishes to include a 1500 word statement in support of his resolution, in which he personally criticises his brother Jo for \" brainwashing' their father \"with Greenie juice\". Reg also wants to include a resolution that Reg and Rose, as the parents and founders of the company, be issued with 1000 'A'Class shares each in place of their existing shares and that A Class shares shall carry double the voting rights of the shares held by everybody else, which will now be renamed 'B' Class shares. Advise Jo, the managing director, about whether the Board is required to put these resolutions in the AGM agenda, and advise about the statement, and any other procedural requirements regarding the meeting and the resolutions