Problem Question - Past Exam Question

Empowerment Pty Ltd is a small company whose constitution is comprised entirely of the statutory replaceable rules.

The company's shareholdings consist only of ordinary share issues, distributed as follows:

20%: Abel

20%: Betty

40%: Chad

20%: Desley

Empowerment Pty Ltd's board consists of Abel, Betty and Chad. Abel is the only member who is employed by the company.He is also the CEO.Empowerment Pty Ltd employs another 8 staff.

Empowerment Pty Ltd manufactures and sells wheelchairs and scooters. Empowerment was established 10 years ago and its membership and board have remained unchanged in that time.Empowerment Pty Ltd has always been a well run and profitable company.Its dividends have averaged $4,000 per share other the last five years.

In June 2016, the board resolved to increase director's fees from $10,000 per annum to $90,000 per annum.The board also increased the CEO's pay and benefits from $80,000 per annum to $150,000 in addition to declaring no dividends for the next financial year.The board further explained, in an advice to the members, that any company profits for the next several years will be retained to help expand business operations.

Desley is unhappy that she will not be receiving dividends in the coming financial year. She wants to end her involvement with the company, however she has been unable to sell her shares.

Advise Desley as to whether she can take action under theCorporations Act 2001(Cth) in relation to the non-payment of dividends. In your answer identify what orders the court would be likely to make if such an action is successful.