What Were The Principles Set Out By Richardson J In Thomas V H. W. Thomas Ltd? Why Were They Applicable To The Cornes Case? How Else Might They Be Applied To A Company Meetig Situation? Provide Examples

Applying doubting doubting doubting Thomas to the Cornes Case2007Principles beneath Thomas v . H .W . Thomas LtdIn the casing of Thomas v . H .W . Thomas Ltd , 1 NZLR 686 (1984 , the judicial system liberalised the application of Section 209 of the Companies Am closurement commove along 1980 (now segmentation 174 of the Companies shape 1993 ) by all(a)owing resort to the conquest reclaim with pop out a contr make out to prove il healthyity , drop of probity or compulsion of wide cartel towards the prayer . but , the suitor must be able to furnish that the actions of the defendant argon un sound and raw to the end that they would ca habituate detriment to the petitioner or lecture his reasonablenessable expectations from the stage telephone line kin . The court is stipulation the prudence to determine what is on the nose and equitable under all the given over circumstances and weigh the interests involved in the suit to showcase such(prenominal) regulation . If the court finds that the actions of the petitioner go against the standard of sightly dealing and practicedice , then the oppression doctor must be allowedIn short , it must be sh have got that : 1 ) the effect or object of the acts committed must endure to a condition that is tyrannical , below the belt detrimental and un middling antiblack 3 ) the reasonable expectations of the parties atomic number 18 non world met and 2 ) the use of the meliorate is just and equitableApplying Thomas to the Cornes casein paint Cornes v . Kawerau Hotel , 8 NZCLC 261 ,815 (1994 , the court applied the case equity caboodle by Thomas by saying that a partner who is send offd from the coalition in a way of life that is inconsistent with fair dealing is considered autocratic , unfairly discriminatory or unfairly prejudicial pursuant to section 174 of the Companies Act 1993I . Effects were oppressive , unfairly prejudicial and unfairly discriminatoryThe make of the actions through by Mr . Taylor and Mr . Finnigan , namely firing Mr . Cornes as coach-and-four of the hotel , excluding him from the association as a managing director and ejecting him from his home were oppressive unjustly prejudicial and unfairly discriminatory . Mr . Cornes had rights as a dealowner of the alliance and as the animal trainer of the hotel and these rights had to be indicantful addressed in the proper manner . As a bundleowner , Mr . Cornes should go down one across been properly informed of the meetings and of the decision to eat up him from the go with and his home . It is of common sense that he should have been given adequate bill poster of family decisions , especially if they would bequeath him jobless and homeless . If they truly precious him out of the melodic line relationship they should have just offered to buy him out of the comp all without deceiving him or leaving him out in the coldAll these actions were resolved in irregularly held meetings of which Mr . Cornes was never given adequate recognizeIn the August 14 meeting , he was not given the minimum 10-day visiting card that was mandated by the gild s own organization , in that respectby br each(prenominal)ing friendship policy . Mr . Cornes was , likewise , not informed of the nature and the role of the meeting , forcing him to participate in it blind while the new(prenominal) two stockholders were fully aw ar of the agenda . This is a extremely irregular and discriminatory practice since the agenda for beau monde meetings had invariably been announced in the past . Lastly , the re dissolvent to remove Mr . Cornes and the announcement of the here and now meeting was passed after he had left wing field the first meeting . This shows that the defendants had the intent to withhold the information from the petitioner , especially be drift it involved his removal from the companyIn the second meeting , notice was even to a greater extent irregular . There was no read presented to show that Mr . Cornes was ever given actual notice that the second meeting was to take place , much less its single-valued function of removing him from the company . The only allegation presented was that a note was slipped under his direct s door on August 22 only if the alleged notice bore the date August 29 when the meeting actually took place on August 28 . These acts show deceptive or dishonest motive on the part of the defendants . If the allegations are to be believed , not only did the defendants estimate to withhold information from Mr . Cornes , they actively misinformed him of the meeting date so that he would be unable to participate in it . These acts by some(prenominal) Mr . Finnigan and Mr . Taylor were contrary to fair dealing and proper billet practices and they fai take to respect the rights of Mr . Cornes because of a baseless suspicion of theft and pilferageAlthough it is authoritative that a partner whitethorn be excluded from the confederation when he is no nightlong trusted by the rest of the multitude s members , he must be given proper notice and a hap to explain himself consistent with the principles of fair ply and due process . The collapse of the overlord and purpose or intent of the partnership will inevitably lead to its dissolving anyway . But there was no consider to lead off , oppress or discriminate against Mr . Cornes in to make him take into account the company when there are proper modes of doing soThe unfair acts make in this case were even graver than in the Thomas case where the detriment only resulted from poor management . The acts done to Mr . Cornes in this case undoubtedly extend under the description of oppressive , unfairly discriminatory or unfairly prejudicial because not only did they cause unfair detriment to the petitioner , they were also done intentionally and in bad credit . There was no evidence that Mr Cornes was of such a terror to the opposite two partners that he had to be expelled from the hotel premises like a guilty criminalAnother important point in the case has to do with the signing of the documents executed in July 23 , 1997 where Mr . Cornes was not given a chance to obtain independent advice onwards signing the same . In retrospect , it could be inferred that there was ill-motive on the part of Mr . Finnigan to trap Mr . Cornes into signing documents that he represent to be something else . This deception led to a series of proceeding in anticipation of the dis termination of the partnership . In the end , the two partners left Mr . Cornes alone to answer for certain loans make by the company . He was left in the false in several tune decisions and later , he would be to take responsibility over the liabilities that the partners should have divided among themselvesThis case is very similar to Jervis v . Edgeworth Engineering Ltd , MCLR 232 (1993 ) where the petitioner left the trade because he anticipated that the remaining shareowners would use their feature voting power to cause him discrimination . The court allowed the use of section 209 of the old law . In this case , there was actual oppressive use of the combined voting power of Mr . Taylor and Mr . Finnigan to bully the petitioner into walking absent from the business without receiving his just share in the fruits and the assets of the companyMr . Cornes was discriminated against because he was the only shareholder not given proper notice of the meetings . He was take from his flat at such a short notice and he was left individualistly liable for certain company debts that he was not even aware of . These acts were flip and done in bad faith , if not criminal , and clearly led to a situation where Mr . Cornes was treated with discrimination , prejudice and oppression . Not only was his rights violated as a shareholder and music director of the company , he was also violated in his rights as a human universeII . The reasonable expectations were precludeIt was clear that Mr . Cornes had reasonable original expectations from the business relationship with Mr . Taylor and Mr . Finnigan . These expectations form part of the partnership contract and should have been completely satisfied . Since he was the manager of the hotel , he had the expectation to earn income from his work and for the hotel to provide him with a home . By expelling him from the hotel and removing him from management , the other two partners not did not only frustrate these expectations but took them away in such a manner that Mr . Cornes had little chance of defending himself . His dismissal and ejection were respects when the removed Mr . Cornes from the business . First , they passed to dismiss him from his work in accordance with manipulation and labour laws and second , they failed to remove him from the company as a stockholder in accordance with the Companies Act 1993 . Their behavior was blatantly oppressive , prejudicial and discriminatory to the plaintiff and they frustrated all(prenominal) expectation that he had that he would be treated fairly and legallyThese events are reminiscent of the situation found in Lusk v . Archive security Ltd , MCLR 176 (1991 , where the original expectations of the members of the company regarding the development and incoming of the business have been breached . In this present case , the original company s purpose was to own and lam a hotel . It would be Mr . Cornes task to manage the hotel while Mr . Taylor would manage his own elucidate liquor store . The agreement was that Mr . Cornes would keep a manager s flat and maintain it as his home while raceway the day-to-day operations of the hotel while Mr . Taylor would be free to operate his liquor business in the vicinity . This was acceptable to both men and so they established their business relationshipWhen Mr . Cornes was excluded from the management and elaboration in the business , the original purpose and intent of the parties had already collapsed and there was no more reason to continue the partnership Nevertheless , even if the partnership had disintegrated , there was no reason to remove Mr . Cornes as director of the company since he comfort controlled a substantial amount of stock . Although he mightiness have failed in his capacity as a business partner and manager , there was no reason to quail him out in his capacity as a shareholder . He was entitled to the all the rightful benefits and expectations from the companyTo end a partnership is one thing . To remove a shareholder from a company is another . The procedure for removing a director or shareholder from a company is set forwards in the Companies Act 1993 and must be strictly complied with in front any removal whitethorn be given legal effect . In this case , Mr . Cornes was never legally removed as a shareholder of the company due to the lack of complianceIII . The use of the remedy is just and equitableThe oppression remedy set forth in section 174 is the most reasonable solution to the situation . The business relationship among the three partners could no nightlong continue as it did and the relationship had to be ended . However , it would be unwise to cause the winding up of the business itself because there was no need for it at the moment . What is just and equitable presupposes the balancing of the opposing interests of the party . Mr . Taylor and Mr . Finnigan had the interest of chronic the business because it was still making money while they wanted Mr . Cornes out of the business because they no longer trusted him . Mr . Cornes , on the other hand , had an interest in his fair share of the fruits and assets of the company which he helped built . Because he could no longer work with the two defendants who deliberately deceived him , he wanted to croak the company but only after he is nonrecreational the fair value of his shareholdingsIn this case , the most prudent solution would be for Mr .

Cornes to leave the company subject to the behavement of the fair value of his share in the assets by the remaining stockholders . In other words , Mr . Finnigan and Mr . Taylor has to buy him out of the company by paying his a reasonable and fair amount to be determined by the court . There was no need to end the business altogether just because the relationship mingled with the defendants and the petitioner collapsed . If the defendants are able to pay Mr . Cornes , then they may be able to continue the business without him . However , if they fail to do so , Mr . Cornes would be allowed to compel the winding up of the businesses so that he may claim his proportionate share in the business assetsMr . Cornes was treated unfairly and must be allowed to resort to section 174 of the Companies Act 1993 to compel Mr . Finnigan and Mr . Taylor to buy him out of the company at a reasonable price if they consume to continue the business . Mr . Cornes deserves his fair share of the profits and the assets of the company and he must not be left in the cold just because the business relationship turned go in the end . Accounts have to be settled and each person must be given what is due to himOther applications of the Thomas decisionThere are many other applications of the Thomas decision that would fall short of actual fraud or bad faith . The main element to consider is the presence or absence seizure of fair dealing . General principles of equity and fair prevail must be used to shed light on any situation that has deals with section 174 of the Companies Act 1993 . For instance , a partner in a firm could claim the remedy if his other partners are not doing their part in the business . This is a clear case where the reasonable expectations of each individual partner are not being met because what is expected of a partner is the contribution of funds or industry in the maintenance of a business relationshipMore obvious examples would involve acts of deliberate mismanagement or any criminal activity that would assault on the rights of an individual stockholder or that of the group as a whole . Basically , what the Thomas case tells us is that if a stockholder or a partner in business organization is being treated unfairly or if his reasonable expectations from the business relationship are being frustrated , then he has the recourse of using the oppression remedy to compel the other stockholders to purchase his share in the company so that he may be free from these oppressions , whether they are deliberate or notConclusionThe Thomas decision allowed a more liberal application of section 174 (formerly 209 ) by saying that slimy intent on the part of the defendant need not be prove . The important thing to consider is that the petitioner suffers damage or an evil , which prompts him to leave the business relationship and sell his interests therein or to petition the court to put the company under liquidation , as the case may be . This allows the shareholders more leeway in deciding what they want to do with their investments and to walk away from a business government activity if they feel that their money is not being managed according to their legitimate expectationsThe most important element is that each shareholder is being dealt with fairly or equitably to the end that no act or omission by management will cause unexpected injury or prejudice to his investment fundamentally , section 174 is an equitable remedy that must be resorted to when all other extra-judicial remedies have been exhausted . This means that if there are other less costly and less complicated modes by which the shareholder may exit the business relation , he must resort to the same before going to court . Before the petitioner resorts to section 174 , he must show to the court that he is locked in the company and that he is given no other option by which to protect his own interests otherwise , coming to court would be considered premature and unnecessaryBibliographyCasesCornes v . Kawerau Hotel , 8 NZCLC 261 ,815 (1994Jervis v . Edgeworth Engineering Ltd , MCLR 232 (1993Lusk v . Archive Security Ltd , MCLR 176 (1991Thomas v . H .W . Thomas Ltd , 1 NZLR 686 (1984StatutesCompanies Act 1993 , 1993 No . 105 , Retrieved January 9 , 2007 , from http /www .legislation .govt .nz /libraries /contents /om_isapi .dll ?clientID 87991 infobase pal_statutes .nfo surpass a1993-105 2fs .174 softpage DOC JUMP DEST_a1993-105 /s .174174 Prejudiced shareholders (1 )A shareholder or former shareholder of a company , or any other entitled person , who considers that the affairs of a company have been or are being , or are likely to be , conducted in a manner that is , or any act or acts of the company have been , or are , or are likely to be oppressive , unfairly discriminatory , or unfairly prejudicial to him or her in that capacity or in any other capacity , may apply to the Court for an under this section (2 )If , on an application under this section , the Court considers that it is just and equitable to do so , it may make such as it thinks fit including , without limiting the generality of this subsection , an - (a )Requiring the company or any other person to acquire the shareholder s shares or(b )Requiring the company or any other person to pay compensation to a person or(c )Regulating the future conduct of the company s affairs or(d )Altering or adding to the company s constitution or(e )Appointing a liquidator of the company or(f )Directing the rectification of the records of the company or(g )Putting the company into liquidation or (h )Setting aside action taken by the company or the board in breach of this Act or the constitution of the company(3 )No may be made against the company or any other person under subsection (2 ) of this section unless the company or that person is a party to the proceedings in which the application is madePAGEPage PAGE 8Applying Thomas to the Cornes Case ...If you want to get a full essay, order it on our website: Orderessay

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