Conflict Management in Organizations †Free Samples to Students

Question: Discuss about the Conflict Management in Organizations. Answer: Introduction: The present case is based on the company securities and defence of illegality and attracts the provision of the Corporation Act 2001 and Securities Industry Act 1970. It has been appeared from the case that the appellant of the case is running a stockbroker firm and the respondent runs a development business within the provinces of Australia. The company of the respondent was incorporated in the year 1954 and engaged themselves in the purchasing of pastoral properties in the provinces of New South Wales. The share of the company was enlisted under the stock exchange of Sydney. An allegation was made in the year 1974 regarding the right valuation of the asset of the company and the appellants of this case had been discussed about it with the bodies of the respondent company (Anderson et al. 2017). The then Chairman and Director of the company, Mr. Geoffrey Killen told to the appellant that it is true that the company is facing certain dilemmas regarding the takeover of certain shares, but that does not mean that the company is a vulnerable one. However, the appellant had told to the respondent that the shareholders of the company should have a clear idea regarding the position of the company in the market and therefore, it is the duty of the company to reconstruct the capitals of the company and the company should take over another Scottish company in this regard. The suggestion was accepted by the directors of the company. It has been stated by the Director of the company that the income of the company is gradually increased day today and therefore, the company has decided to provide bonus to the shareholders. A discussion over the re-purchase of shares by the company had been done in between the appellant and the respondent and an approach regarding the takeover had been made with a dividend rate of fifty percent on the new shares (Considine et al. 2014). In the year 1974, a proposal was made regarding the reconstruction of market values and it was also stated that the company will review the bonus issue so that it may be getting increased. A negotiation process was done in between the respondent and one Scottish company. It was decided that the valuation regarding the shares of both the company will assess regarding $1.35 for the shares of $2.00 share regarding the company named Marra and $1.35 for the share value of $0.50 share regarding the Scottish company. A financial adviser of the Scottish company had suggested that the share value of the Scottish company should be increased at $1.50 and according to such process; the respondent company had gained much profit. The aftermath effect of the negotiation process brings the respondent in a material position in the share market (Crase et al. 2014). An offer has been made at the Stoch Exchange and it was suggested that the terms of the offer regarding the shares of the respondent has b een accepted by the Scottish company and it was decided that the 50 ordinary shares of the respondents company will be valued at 55 per cents. It has been observed that the appellant had bought lots of shares of the respondents company and the respondent had paid only $35,000 to the appellant where the appellant alleged that the sum will be $175,000. It was also alleged by the appellant that the respondent did not pay for the corporate fees regarding the advice given by the appellant during the negotiation process (Davison et al. 2015). It has been observed that there is no documentary proof regarding the price of the respondents shares in the market. Therefore, it can be presumed that the appellant had taken commission from the purchasers of the shares of the respondents company. The claim of the appellants was of three fold. The first one is that the appellant asked the respondent to pay reasonable fees for the advice and the negotiation process. The second demand is to sue the respondent as against an amount of $140,000 and the third claim of the appellant was based on the pact made between the appellant and respondent regarding the five instalments having $35,000 each. However, it was contended by the respondent that the provision of the first claim made by the plaintiff is contradict the provisions of section 70 and section 71 of the Security Industries Act 1970. It was also stated by the defendant that the demand regarding the five instalments are illusory in nature and therefore, is required to be set aside. Breach of duties or responsibilities: It was alleged by the appellant of the case that respondent is engaged in the breach of duty regarding the payment and the bonus that they had promised to give to the shareholders. The subject matter of the case has attracted the provisions of the Corporations Act 2001, the Securities Industry Act and Companies Act (NSW). Of the three Acts, the breach of duty by the director of a company or corporation has been stated under section 181 of the Corporation Act 2001 (Deegan and Shelly 2014). It has been stated under the Act that a director of the company has to act in good faith and he is required to comply his duties with great care and skills. It is stated under the law that the director of the company should always have to protect the interest of the shareholders. The purpose of the section is to bind a director of a company so that they cannot be act arbitrarily. It is important to comply all the provisions of the Corporation Act regarding the duties of the directors. If an analysis has been made regarding the separate duties of the directors, it can be observed that the relevant provision regarding the same is section 180 to section 184. Among the sections, provision regarding section 181 is important in this case. It has been alleged by the appellant in the case that the respondent had not comply the statement made in respect of giving bonus to the shareholders. It has also been observed that the appellant was a shareholder to the company of the respondent and therefore, the allegation bought by the appellant can clearly shows the fact that the respondent had breached the duties mentioned under the provisions of section 181 of the Corporations Act and it should be kept in mind that the allegation regarding the violation of the section 181 is a part of the complaint only. Another provision regarding the breach of directors duty has been mentioned under the provision of section 588G of the Corporation Act 2001. However, there is a difference in between the two sections regarding section 181 and section 588G of the Corporation Act 2001 (Ferran and Ho 2014). The former one is indicating certain principles regarding the conduct of the directors to the interest of the shareholders. The later one will be applicable to prevent insolvent trading by the company. It means that the directors are liable to prevent the transaction of a company that has become insolvent. If the provisions mentioned under this section have been contravened, he shall be liable for the same and has to face certain penal provision as mentioned under this Act. It is required under the law that if it is suspected that the company is facing serious monetary problem that can lead the company towards insolvency, it is required for the company to take certain professional advice to avoid the problem and to obtain certain financial help from other companies. If it has been observed that the company is not follow up the provision of section 588G of the Act, the director of the company may have to face criminal proceeding for dishonesty. It is to be mentioned that the provisions of section 588G will be applied on the directors of the company only and not on the management of the company. In this case, it has been alleged by the appellant that the company of the respondent had taken certain debts from the appellant and the respondent had to give back the money to appellant by way of five instalments holding $35,000 each (Van Gramberg et al. 2014). However, it has been observed that the respondent had only paid $35,000 to the appellant and did not pay the other instalments and based on these facts, the appellant had sued the respondent before the competent court of law. Observation by the courts: The observation made by the court regarding the case is important in nature. The presiding officer of the Court of Appeal had refused to give any relief to the appellant as in his view the appellant had made allegation based on an illegal document. There is no legal proof regarding the validity of the document and the appellant had failed to submit any legal proof regarding the document (Gumley 2014). It has been held by the Judge that the terms and conditions of the agreement was contradictory to the provision of section 70 of the Securities Industry Act. The provision regarding section 70 of the Act stated that an action to breach is to be calculated at the basis of false or misleading appearance regarding the active trading. The main purpose of the section is to protect the interest of the market against certain activities that can be lead towards the manipulation. It is stated by the section that the market needs to be delivered the genuine product and supply (Tomasic 2015). It has been observed that the evidences given by the appellants and the respondents are based on the documentary evidence and most of the documents are the testament of the appellant regarding the case (Skaik et al. 2016). As per the opinion of Justice Mahoney, the claim of the appellant regarding the acts of the respondents should be cancelled on the basis that the agreement made between the parties are illegal and the appellant had failed to prove the legality of the agreement. It has also been stated by the court that the appellant had failed to show reasonable ground regarding the payment of commission by the other shareholders of the respondents company (Hedges et al. 2016). It was accepted by the appellant that the fact regarding the establishment of an association regarding the maintenance of share prices by the respondent. It has also been accepted by the members of the appellant that the intention of the appellant regarding the purchasing the shares are was to raise the current price and there was no intention on behalf of the appellant to gain profit for the respondent company and therefore, the intention of the appellant regarding the transaction has made certain questions regarding the validity of the truthfulness of the facts (Saharay 2014). It has also been observed that the offer made by the respondent company ordinary in nature. It has been observed by Justice Mahoney that the examination and the cross-examinations are proving the facts that the intention of the appellants was not to gain profit but to reconstruct the capital and position of the respondent in the share markets. It has also been observed by the court is to secure the takeover policies and therefore, the appellant had failed his duty to be a proper share holder and the allegations made against the respondent is based on vague not ion. It has been held by the Director of the respondent company that the main aim of the agreement was to establish market policies but the appellant had failed to perform any market action regarding the same. It was also found by the court that the documents upon which the appellant had brought this case are misleading in nature (Hedges et al. 2016). His Honour also found that the appellants must have realized this, their purpose being to influence those who had occasion to consider respondent's offer to take over Scottish shares. Another criticism made of his Honour's findings is that he failed to take account of the conclusion of the primary judge that he was "not reasonably satisfied that the plaintiffs' activities had the effect of raising the price of the shares above their market value". Meares J. thought that the prices paid over the relevant period reflected prices which one would have expected the market to pay. It is of importance to appreciate that Mahoney J.A. accepted that when the scheme was originally formulated the use of Stock Exchange prices in a misleading way was not seen as an inevitable element in the scheme (Ramsay 2015). It was held by the court that from the outset the plaintiffs realised that it was quite possible that this would not occur and that the Stock Exchange price would in reality be the result of purchases made by them at the level they desired. In that event, if the resulting Stock Exchange price was to be referred to, without disclosure of how it had been established and maintained, then the reference to it was (depending of course upon the precise verbiage employed) apt to be misleading. Therefore, at the least, a person considering the plaintiffs' scheme and considering the possibility to which I have referred, would see that use of the Stock Exchange price pursuant to it without such disclosure would lead to mislead the statements being made (Huggins et al. 20 15). It has been proved by the court that the documents established by the appellant are contradictory to the provision of section 70 of the Securities Industry Act. It has been stated under the Act that A person shall not create or cause to be created or do anything which is calculated to create, a false or misleading appearance of active trading in any securities on any stock market in the State, or a false or misleading appearance with respect to the market for, or the price of, any securities. The object of the section is to protect the market for securities against activities which will result in artificial or managed manipulation (Marsh and Roberts 2017). The section seeks to ensure that the market reflects the forces of genuine supply and demand. By "genuine supply and demand" that exclude buyers and sellers whose transactions are undertaken for the sole or primary purpose of setting or maintaining the market price. It is in the interests of the community that the market for securi ties should be real and genuine, free from manipulation. The section is a legislative measure designed to ensure such a market and it should be interpreted accordingly. On the basis of the section i can be said that the claim for damage made by the appellant is needed to be cancelled (Matthew 2015). It has also been observed that the appellants' claim for remuneration was based on the commission of fraudulent conduct, the making of statements which were and were known to be misleading with a view to deceiving the Scottish shareholders. A claim for remuneration for fraudulent conduct is defeated by the illegality principle (Pearson 2017). Reference: Anderson, H.L., Hedges, J., Ramsay, I. and Welsh, M.A., 2017. Illegal Phoenix Activity: Is a'Phoenix Prohibition'the Solution?. Considine, M., O'Sullivan, S. and Nguyen, P., 2014. New public management and welfare-to-work in Australia: Comparing the reform agendas of the ALP and the Coalition.Australian Journal of Political Science,49(3), pp.469-485. Crase, L., OKeefe, S., Wheeler, S. and Kinoshita, Y., 2014. understanding the role of policy and serendipity.Routledge Handbook of Water Economics and Institutions, p.296. Davison, M., Monotti, A. and Wiseman, L., 2015.Australian intellectual property law. Cambridge University Press. Deegan, C. and Shelly, M., 2014. Corporate social responsibilities: Alternative perspectives about the need to legislate.Journal of Business Ethics,121(4), pp.499-526. Ferran, E. and Ho, L.C., 2014.Principles of corporate finance law. Oxford University Press. Gumley, W., 2014. An analysis of regulatory strategies for recycling and re-use of metals in Australia.Resources,3(2), pp.395-415. Hedges, J., Bird, H., Gilligan, G., Godwin, A. and Ramsay, I., 2016. The policy and practice of enforcement of directors' duties by statutory agencies in Australia: An empirical analysis.Melb. UL Rev.,40, p.905. Hedges, J., Bird, H.L., Gilligan, G., Godwin, A. and Ramsay, I., 2016. An Empirical Analysis of Public Enforcement of Directors Duties in Australia: Preliminary Findings. Huggins, A., Simnett, R. and Hargovan, A., 2015. Integrated reporting and directors concerns about personal liability exposure: Law reform options.Company and Securities Law Journal,33, pp.176-195. Marsh, S. and Roberts, S., 2017. Risk management: Insolvency safe harbour for'honest'directors.Governance Directions,69(5), p.275. Matthew, A.F., 2015. Regulating against corporate phoenix activity. Pearson, G., 2017. Current Issues for Consumer Protection Law in Australia. InConsumer Law and Socioeconomic Development(pp. 199-208). Springer, Cham. Ramsay, I., 2015. Increased Corporate Governance Powers of Shareholders and Regulators and the Role of the Corporate Regulator in Enforcing Duties Owed by Corporate Directors and Managers.European Business Law Review,26(1), pp.49-73. Saharay, H.K., 2014.Textbook on labour Industrial Law. Universal Law Publishing. Skaik, S., Coggins, J. and Mills, A., 2016, January. Examining the approaches to diminish judicial intervention in statutory adjudication in Australia. InAUBEA 2016: Proceedings of the 40th Australasian Universities Building Education Association Annual Conference(pp. 660-670). Central Queensland University. Tomasic, R., 2015. The Rise and Fall of the Capital Maintenance Doctrine in Australian Corporate Law. Van Gramberg, B.E.R.N.A.D.I.N.E., Bamber, G.J., Teicher, J. and Cooper, B.R.I.A.N., 2014. Conflict management in Australia.The Oxford handbook of conflict management in organizations, pp.425-448.