Many clients can unfortunately fall foul of the provisions of the Commonwealth Corporations Act in various ways, which breaches can result in significant damages claims against them by aggrieved parties.

Many of these instances include unfairly dealing with minority shareholders, by for example carrying out conduct which results in the ouster of shareholders/directors with minority shares, without proper compensation. This is usually called ‘oppression’.

Our lawyers have been involved in cases on both sides of the oppression ledger.

It is usually easier to prove a case of oppression by the person aggrieved. They usually claim to have been oppressed if, say, they are able to show that they were ousted from the company without proper compensation in respect of the value of their shareholding.

It is extremely important in any restructure exercise of a company, that proper steps are taken to ensure that no claim is made against you later. This means that you must act fairly and justly in relation to the buy-out of shares and any such buy out scheme has to be ‘above board’ and fair.

For example, you will need to pay out the right value in respect of the shares belonging to a minority shareholder when that person is properly and legally ousted, ensuring that the value is a proper market value (based on expert accounting evidence) and if at all possible, ensuring that all parties involved are satisfied with the transaction and proper documents are drawn to ensure that any disputes are minimised.

If simple steps are not taken, the possibilities of matters ending up in the Supreme Court, pursuant, for example, to section 232 of the Corporations Act 2001 (Cth), can be quite high.

These kinds of oppression proceedings are usually also quite expensive to run and require specialist expert evidence including forensic accounting evidence which can be very costly.

The expert related evidence is especially important, because in cases involving unique companies which carry out specialist work, specific and very specialised experts are required to provide a proper valuation of those shares and any general valuation may not suffice to portray the true status of things.

At Papallo Kouchoo Lawyers, we have significant experience in conducting these matters for both claimants and defendants.

We can provide you with proper, timely and efficient advice in relation to all the rights you have in relation to an oppression or corporations law claim, including in relation to expert evidence required, as well as advice related to any defences available.

If you have any questions, please do not hesitate to contact us for an obligation free professional consultation.