Question
Nick Jonas and Joe Jonas are siblings who grew up on a mixed-use farm near Hunter Valley, NSW. The farm has extensive citrus orchards, a
Nick Jonas and Joe Jonas are siblings who grew up on a mixed-use farm near Hunter Valley, NSW. The farm has extensive citrus orchards, a vineyard and large sheds for egg production. Products from the farm - citrus, wine and eggs - are sold throughout Australia. Nick and Joe operate the farm through their company, Food Culture Pty Ltd, of which they are the sole directors and shareholders. The company's website describes it as an "Australian Owned and Operated Company Supplying Good Food to Australians". The company's constitution describes its objects as 'the production of quality agricultural products'.
Nick and Joe also have their own individual companies which they use to pursue their particular agricultural passions. Nick's company, NickRiches Pty Ltd, of which he is the sole director, has imported and distributed Italian wine and cheeses since 1998. Joe's company, Throne Pty Ltd, of which he is the sole director, runs food tours in the Hunter Valley area.
In 2018, Joe is contacted by an old friend from school, Justin Bieber, who is now living in northern New South Wales. Justin has a wholesale food purchasing and distribution business and is having trouble sourcing organic, high-welfare food for her customers. He knows that Joe's family has always produced eggs. Joe explains that Food Culture's chickens are free to range, but only within the confines of large sheds. Justin says he needs eggs that come from chickens with access to pastures.
Joe decides to lease land outside Cessnock to provide Justin with free range, pastured eggs. He doesn't bother to discuss it with Nick because he has made his opinion of 'hippy, do-gooder eggs' clear over many years. The 10-year lease, with two options to renew, is acquired by Throne Bella Pty Ltd. Throne Bella is also the party to the egg supply contract with Justin Bieber.
Throne Bella's free range egg business proves very profitable. When Nick discovers this, he is angry and wants to commence legal proceedings against his brother.
What arguments can Nick have in relation to fiduciary duties. What case law can be used to support Nick?
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