Walter and Shirley Tate have invested a large part of their retirement savings in a company called Happy Days Ltd. The company develops retirement communities for people aged 55 and over. These communities offer a range of houses and apartments as well as lots of activities, including membership of a golf club, a gym, yoga classes, massage therapy, weekly dance classes etc.
Walter and Shirley are aged 68 and have been living in one of the Happy Days Ltd communities for the past three years. They are very happy with their accommodation and have become friends with other residents.
Their income comes from the aged pension as well as income from the investments they have made with their retirement savings.
However, the board of directors of Happy Days Ltd have recently made some decisions that have made Walter and Shirley very angry.
First, the company has stopped paying dividends so that it can use its retained earnings to grow the company. Walter and Shirley are reliant on these dividends to fund their annual trip to New Zealand to see their son and his family.
Second, the directors are looking to diversify the company’s business. They are looking at buying an apartment building in downtown Melbourne presently set up for students, and to adapt the space to suit retirees. Walter and Shirley think this is a major mistake as they do not believe that older Australians will want to live in such small apartments.
Third, the directors have made a decision to increase the fees at existing communities by 30%. They argue that the residents are demanding more facilities and activities and that current revenue is insufficient to fund these improvements. Walter and Shirley believe that the real reason for the steep price hike is to provide more money for the new development in Melbourne. The contract between Happy Days Ltd and the residents allows for annual fee reviews.
Walter and Shirley and their friends recently staged a sit-in protest at the head office of Happy Days Ltd after the board of directors refused to meet with them.
Walter and the Chairman got into a scuffle and Walter tripped and fell down some stairs. He is in a wheel chair and is on a waiting list for a knee replacement.
The confrontation was reported on the Channel 7 news. The Chairman was interviewed and made some very rude remarks about Walter. Walter wants to sue the Chairman for defamation.
The Chairman is also arguing that Walter needs to move out of the village as he is not a fit and proper person to be a resident.
You are required to:
Review the statutory remedies available to members of a company and advise Walter and Shirley whether, in relation to each remedy, they will be able to:
Address any practical implications that Walter and Shirley should consider in seeking each statutory remedy.
In your answer, you should ignore other legal topics such as contract law.
In your answer, you should properly reference sections of the Corporations Act 2001 (Cth) and case law.
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