Question
Rod is a shareholder of Snappy Pty Ltd ('Snappy'). Clause 21A of Snappy's constitution states that: Snappy will alwaysbuy its fish supplies from Rod. However,
Rod is a shareholder of Snappy Pty Ltd ('Snappy'). Clause 21A of Snappy's constitution states that:
Snappy will alwaysbuy its fish supplies from Rod.
However, Snappy's board of directors has decided to purchase fish from a cheaper supplier.
Further, Rod is unhappy that despite the directors' actions in paying themselves large bonuses from Snappy's healthy profits, they have declined to pay dividends to shareholders for the last 5 years.
a) Can Rod enforce Clause 21A against Snappy?Give reasons and refer to relevant legislation and case law in your answer.
b) What action can Rod take on account of the board's refusal to pay dividends?Give reasons and refer to relevant legislation and case law in your answer.
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