Friday, November 9, 2012

Next week in the High Court of Australia

Apart from the judgments referred to in the previous post, the High Court of Australia will hear argument in three cases next week, commencing on Tuesday, 13 November 2012.
The first is Commissioner of Taxation v Consolidated Media Holdings Ltd.  This case considers the proper constructions of section 159GZZZP of the Income Tax Assessment Act 1936 and its application to a buy-back of 29% of Consolidated Media’s shareholding in Crown Melbourne Ltd at a price of $1 billion. At issue is whether this should properly be treated as a capital gain, or whether it should be treated as a dividend (and therefore entitled to a rebate).
The second and third are cases relating to the same, valuable, family company.  In the first, Beck v Weinstock, at issue is whether or not a share can be a “preference share” for the purposes of the Corporations Act 2001 when the rights attaching to it do not confer any preference or priority over the rights attaching to other shares issued in the company.  In the second, Weinstock v Beck, at issue is the ambit of the power under section 1322(4) of the Corporations Act 2001 to validate the purported appointment of a company director by a person who was themselves not validly appointed as a director but who had been acting as a de facto director.  Both cases are salient lessons in the need to properly attend to the corporate governance of small but valuable family companies.

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