Mr & Mrs Smith and their four children Jo, Paul, Kevin and Peter, own and run a successful marketing business. All of the Smith children are married and have children. Mr & Mrs Smith recently decided to retire from their working roles and as directors, in the business and have left the four siblings to manage the business without them.

Things travelled well for the first few months but the three brothers have become distant from their sister Jo as they do not like her husband and think he has too much to say about the way the business should be run. The brothers call a board meeting and vote to remove Jo as a director of the companies, however she remains a shareholder.

The remaining directors then decide they have not been paid nearly enough for all that they have done for the company and so pay themselves large directors fees. Further, they retain their own spouses to help run the company and pay them very high salaries.

The remaining directors now want to issue more shares to some of their friends. This would then mean that their sisters shares would decrease below 20%. Once this is done they will change the rules in the constitution to deny their sister Jo a right to vote as a shareholder.

Jo is not concerned that she is no longer a director of the company, but as a shareholder she is very concerned as to the manner the company is being managed.

REQUIRED:

Advise Jo as to the actions of the directors in respect of the excess directors fees, wages to their family, the issue of the new shares and the change to the constitution. Use relevant common law and statutory law to support your arguments. please use australian references.