Reference no: EM133562475

Ajax Pty Ltd is a family company on Brisbane's southside. It was established by Manuel Ajax, in the 1970s, to run a car garage. It grew to also own a second-hand car yard and a spare parts business. It is still profitable.

Ajax has a constitution (called a 'Memorandum of Association') which gives the Managing Director wide powers to manage the business of the company and veto share transfers. The Memorandum also states that the object of the company is to 'conduct business in the transport sector'.

While Manuel was still alive, he owned all the shares in Ajax and was Managing Director; there was no other director in the company. Manuel dominated the business through his constitutional powers, business acumen and forceful personality. His three adult children worked for Ajax and collected a wage: Rita Ajax was business manager and her father's second-in-command; Sean Ajax ran the spare parts business; and Nat Ajax was a mechanic in the garage.

When Manuel passed away in 2018, the children inherited an equal number of his shares in Ajax. They also respected Manuel's wish that Rita replace him as Managing Director. Initially, Sean and Nat also maintained their customary roles in Ajax's businesses. However, in June 2021, a conflict erupted between the children, prompting Nat to resign as mechanic with Ajax and seek work elsewhere.

Nat has come to you with several complaints about how Ajax is being managed:

Nat has heard rumours from a business associate that Sean is diverting stock from the spare parts business to another company that he and Rita own. When Nat confronted Rita with these rumours, she told him the allegations were 'his usual garbage' and that he was 'like a baby, too easily led by others'.

Nat is unhappy that Rita is proposing to sell off Ajax's garage to fund a substantial investment in personal mobility devices. According to Nat, this investment is contrary to Manuel's wishes and the purpose for which Ajax was established.

Nat says that Rita and Sean are discriminating against him by refusing to declare a dividend (now that he doesn't work for the company, he has no wage from it either), and by not listening to his complaints about Rita's domineering management style.

Question 1: Advise Nat on any remedies he may pursue to have his concerns addressed, dealing with directors' duties only as relevant to advising on those remedies.

Question 2: What remedies might ASIC seek against Rita and/or Sean if it pursued them for breaches of directors and officers' duties under the Corporations Act 2001?