Case Study Overview

Natalie, Alana, Melissa and Pina are all sisters who inherited a block of 6 residential units. Each of them holds 25 of the 100 issued shares in the company. Melissa is single and lives in one of the units. Natalie, Alana and Pina are married with children so live elsewhere and rent their units out.

Everything goes well until, 10 years later, Natalie, Alana and Pina pass a resolution to renovate the units to meet current local government and environmental regulations. This resolution was passed after 3 tenants complained to the Local Council about the condition of the units and material in the cement that has become a known health hazard. The work will require Melissa to move out of her unit for a year while the work is carried out. Melissa both opposes the resolution and refuses to move out because she cannot afford rent elsewhere. She is unwell and unable to find employment that will cover the cost of moving or renting elsewhere.

Because of these facts, she offers to sell her share to Natalie, Alana and Pina at a fair market valuation so she can move and buy a place elsewhere. Natalie, Alana and Pina refuse Melissa’s offer. Instead, they pass a resolution amending the constitution to evict Melissa and change the locks on Melissa’s flat when she is at the doctor. Melissa was informed of the meeting but chose not to attend. Melissa wants to either retain her shares in the company and live in her flat or sell all her shares.

Melissa now seeks your advice. Advise Melissa as to her rights. Explain.

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