Auditor's fiduciary duty to Pty minority ?

Posted by AliBama on February 16, 2009, 4:43 pm

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The articles of association of the private company bars
the offer of the shares on the open market, and requires
them to be offered to the existing shareholders;
where if no agreement on the price is achieved, the
auditor should arbitrate.

Importantly, the idea that a small family Pty. does NOT
follow the 'corporate veil' concept that applies to big
companies; i.e. that Courts can't come to the rescue of
and unhappy investor and that provided actions are
according to the company rules [articles & memorandum]
the majority must prevail; has only been establish for a few
decades - especially when the minority was bequeathed
his shares. And recent cases recognise that when the
share holders are closely related, the 'quasi-partnership'
principle applies. Which means that strong fiduciary
duty applies between share holders, and the majority
can't just extract all profits for their [self voted]
directorship fees.

Against this background, and the minority's wrong
admission that 'he didn't have any protection from
the law', by way of pleadings in a will litigation
related to the shares transfer, the majority were
emboldended to unfairly screw the minority.

The Pty's assets are a rental commercial property.
The majority offered the minority X for his shares
- in writing. And later the auditor 'negotiated'
and offered 2X, and told "even if its worth 10X,
you'll never get paid that".

At the will rectification the Judge urged that the
parties accept a neutral evaluation for a buyout,
which is exactly what the minority wants/ed, but
that Judge could NOT order this, since the case
was about a will rectification and not share sales.
The majority refused and were further emboldened.

IMO the auditor is just naturally following his pay
masters: the majority controllers.

Q1: does the auditor, by law have a fiduciary duty
to know that the articles gives him the responsibility
to 'arbitrate' on the share price ?

Q2: is he not seen to be failing in his fiduciary duty
when the neutrally evaluated price is multiples of
the offered price, which he's put in hand writing ?

Q3: could I sue him in small claims court, just as
a warm up, and to establish 'their' thinking, before
I apply for relief under the 'quasi partnership'
principle ?

== TIA.