Shareholder and director disputes

Oppression generally refers to conduct that is unfair, prejudicial or contrary to the interests of shareholders as a whole. It often arises where majority shareholders or directors use their position to exclude others from management, divert opportunities, misuse company funds, manipulate decision‑making processes or act in a way that departs from the expectations on which the company was formed.

Whether conduct is oppressive depends on the commercial context, the company’s constitution, the history of the relationship and whether the behaviour departs from standards of fairness expected between participants in a closely held business.

Shareholders may have statutory, contractual or equitable rights to access company information, depending on their role and the circumstances. These rights can include access to financial records, minutes, registers and other documents necessary to understand the company’s affairs.
Access is often contested where there are concerns about misuse of information, confidentiality or commercial sensitivity. The court can order access where it is necessary for a shareholder to protect their interests or assess whether directors have acted properly.

Directors owe statutory and fiduciary duties, including duties to act in good faith, to exercise powers for proper purposes, to avoid conflicts of interest, to act with care and diligence and to prioritise the interests of the company as a whole.
Disputes commonly arise where decisions are challenged as improper, where personal interests conflict with company interests or where directors are alleged to have misused their position, information or powers. Understanding the scope of these duties is central to assessing both liability and strategic options in a dispute.

A derivative action may be appropriate where the company itself has suffered harm but those in control are unwilling or unable to take action. This often arises where directors are alleged to have breached their duties, misused company funds, diverted opportunities or engaged in conduct that benefits them personally at the company’s expense.

Because the claim is brought on behalf of the company, the court must grant permission, which involves assessing the strength of the claim, whether the applicant is acting in good faith and whether it is in the company’s best interests for the action to proceed. Derivative actions are typically used in closely held companies where internal governance mechanisms have broken down.

No. Many shareholder and director disputes can be resolved without litigation, particularly where early advice is obtained and the commercial objectives of the parties are clearly understood.
Resolution may be achieved through negotiation, governance adjustments, access to information, buy‑outs, valuation processes or agreed changes to management or decision‑making structures.
Litigation becomes necessary where the dispute affects control, value or the ability of the company to function, or where urgent intervention is required to prevent harm. Even then, litigation is often one part of a broader commercial strategy rather than the sole pathway to resolution.

An oppression remedy is a statutory mechanism under Part 2F.1 of the Corporations Act 2001 (Cth) that allows a shareholder to seek relief where the company’s affairs are conducted in a manner that is oppressive, unfairly prejudicial or unfairly discriminatory. The Court has broad discretion to make orders to protect the affected shareholder’s interests, including regulating the company’s future conduct, modifying the company’s constitution, or requiring the purchase of shares. Oppression proceedings are often complex and require careful strategic assessment at an early stage.

A director should obtain legal advice as soon as a dispute emerges that may affect the company’s governance, financial position or compliance with statutory duties. Early advice is critical where there are allegations of breaches of directors’ duties, conflicts of interest, access‑to‑documents issues, or where board or shareholder disagreements risk escalating into litigation. Timely guidance helps directors manage risk, preserve their position and ensure decisions are made in accordance with their legal obligations.

Deadlock in a private company—often arising from equal shareholdings or board disagreements—can be resolved through mechanisms in the shareholders’ agreement or constitution, such as buy‑sell provisions, chairperson casting votes or dispute resolution clauses. Where no contractual mechanism exists, parties may need to seek relief through negotiation, mediation or, in more serious cases, Court intervention. The Court may make orders to break the deadlock, including oppression remedies or orders regulating the company’s affairs.

Yes. We act for clients throughout Melbourne and across Victoria in complex commercial disputes, shareholder and director matters, insolvency‑related examinations and urgent court applications. Our practice regularly involves proceedings in the Supreme Court of Victoria, the Federal Court (Melbourne Registry) and other Victorian jurisdictions. We also assist interstate clients with matters that fall within Victorian law or require representation in Victorian courts.