Beck v Weinstock Case Analysis - Case Study - Corporate Law Assignment

Internal Code: MAS5365

Corporate Law Assignment: Case Study- 

Mrs. Beck and Mr. Weinstock were appointed as the directors of the LW Furniture. The LFurniture had the shares which were categorized in fourteen classes from A to N. Some of the shares were considered as the primary shares while some of them considered as the ordinary shares. Mrs. Beck and Mr. Weinstock were appointed as the directors of the LW Furniture in 1972. They resigned due to some company issues in the share prices and the shareholders benefits. But in the next annual general meeting, the shareholders of the company pondered over their eligibilities and they reached at the decision that the both the persons were given another chance and they would be appointed the directors of the company again. So, by considering the favor from the shareholders of the company, both were reappointed as the directors of the company in the wide favor of the company. But after the retirement of Mrs. Beck, the issue arose when Mr. Weinstock took the step and appointed his wife in place of the Mrs. Beck in the company. The shareholders decided to file a suit against him. Moreover, Mrs. Beck was also in the favor of the shareholders because she had a stance that she must be given the new chance after the retirement at ad hock basis which was the company’s policy. The case was filed in the honorable high court of the Australia. Mrs. Beck and the shareholders of the company was the plaintiff while the Mr. Weinstock was the defendant (Lawyers, 2013). Outline of Duties/Responsibilities which were breached: When a person at the key post retires from any company and the post remains empty, the corporate act of the Australia section 293 stated that the company should appoint the other person who does not have any relation with the retired person or any other person in the company, because such things make it controversial. In the mentioned case of the Beck and the Weinstock, the duties which were breached were the violation of the corporate act of the Australia. The sole director of the company Mr. Weinstock appointed his wife at the empty seat which was the open violation of the code of conducts of the LW Furniture. The other directors and the shareholders strictly were against this appointment because it was against the rules and the regulations decided in the code of conduct of the factory and they were breached by the sole director. The rules of the company tells that whenever, the company has an empty seat after the retirement or the death of the director, according to the rules, a general meeting of the shareholders is called before the new appointment at the empty seat. The other rules in the company’s code of conduct and the corporate laws state that after the call of the general meeting of the shareholder of the company, the eligibility criteria of the newly appointed person must be checked according to the code of standards of the company and according to those which are mentioned in the code of conduct in the corporate law of the Australia. The code of conduct must be fulfilled by the company at any case. In this case, the allegation upon the Mr. Weinstock was that he had directly appointed his wife at the post of director which was remained the empty after the retirement of the Mrs. Beck. He breached all the codes of conduct and the corporate laws of the Australia before appointing the new person at the empty seat. The codes stated that the company must fulfill the eligibility criteria of the appointed person. The corporate law of the Australia section 1322 stated that if the code of practice of a company or the constitution of the company is being Questions: Whether Mrs Helen Weinstock was properly appointed as LW Furniture Consolidated (Aust) Pty Ltd’s (“the Company”) director, and

1. Whether the appointment within the scope of the remedial power of section 1322(4)(a) of the Corporations Act.
2. the proceeding needs to be essential of a procedural nature,
3. The person or persons contravening acted honestly, or the order made must be just and equitable. Subsection 1322(6)(c) requires that no substantial injustice has been or is likely to be caused to any person as a result of the Court order.
4. In the reasoning for the decision made by the primary judge, Barrett J, it is stated that both subsections 1322(6)(a) and (c) were satisfied in that the order was just and equitable and that no substantial injustice arose from Helen’s appointment as a director. That point was not contended and will not be discussed further.