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Mills v Mills

[1938] 60 CLR 150

Case summary last updated at 22/01/2020 16:17 by the Oxbridge Notes in-house law team.

Judgement for the case Mills v Mills

Directors voted to pay out profits of a company in form of bonus shares to ordinary shareholders (instead of dividends). As result, voting power of preference shareholders was severely diminished. C, who had preference shares, sued for breach of duty. Held:
 
·       Where directors allot shares, is impractical to look at whether power was exercised for benefit of company.
·       Rather test for proper purposes is one of fairness as between individual shareholders.

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