Venture Pty Ltd was registered as a company on June 1, 2001. The company has a constitution which:
(a) authorises the company’s board of directors to exercise the company’s power to issue shares;
(b) requires all new shares to be offered to members of the company on a pro-rata basis before they can be offered or issued to non-members; and
(c) contains provisions substantially the same as s 248A and ss 248C-G (inclusive) of the Corporations Act.
Alice holds 45 of the 100 fully paid ordinary shares that the company has on issue. She is also one of the company’s two executive directors. The other executive director is Fred. He holds 25 ordinary shares. Robert holds 30 ordinary shares. He is the company’s only non-executive director.
In early October, Robert left for an extended overseas trip. He is not due back until late December. In his absence, Alice and Fred held a board meeting at which they resolved that the company should issue 20 ordinary shares to Dallas Pty Ltd for an issue price of $20,000 per share. The only members and directors of Dallas Pty Ltd are Brian and Tiffany. The shares are to be issued to Dallas Pty Ltd on December 1.
Robert has been informed of the proposed share issue. He believes that the share issue agreement is invalid and cannot be enforced by Dallas Pty Ltd because:
(i) Neither Alice nor Fred had made any attempt to notify him that a board meeting was to be convened to consider making the share issue.
(ii) Venture Pty Ltd and Alice and Fred have no power or authority to agree to issue shares to a non-member without the shares having first been offered to members as required by the constitution.
(iii) Brian and Tiffany, to Robert’s knowledge, had asked for, and had been given, a copy of Venture Pty Ltd’s constitution in September this year, and so should have known of its contents.

What can Robert do to prevent the share issue? Is he likely to succeed?
In answering these questions, you should NOT discuss matters relating to directors’ duties, or the remedies of shareholders under Corporations Act ss 232-234 or ss 236-242.