Oppression%20Actions:%20Sections%20232%20and%20233%20of%20the%20Corporations%20Act%20(Cth)

1
Oppression Actions Sections 232 and 233 of the
Corporations Act (Cth)
Geoff Clift
Law Society of the Northern Territory
2
General Principles

• Section 232 4 Distinct Grounds and a Composite
  Whole
• Section 232(d) and (e) Commercial Unfairness
• Section 232 (d) Independent Ground
• Objective Test of Unfairness
• Scope and Aim of Sections 232 and 233
• Past Conduct
• Acquiescence and Consent
• Self-help
• Onus of Proof

3
Board Decisions

• Role of Management
• When a Court May Intervene

4
Quasi- Partnership Cases

• 3 Elements Identified in Ebrahimi v Westbourne
  Galleries Ltd
• Implication of a Right to Participate in
  Management
• Unjust, inequitable and Unfair for the Use of
  Majority Voting Power to Remove the Minority from
  Management
• Circumstances in Which a Right to Participate in
  Management May be Lost
• Relief May Only be Granted Where Participation in
  Management Affords a Return for Investment

5
Management Fees and Payment of Dividends

• Ripping off the Company
• Independent Advice on Management Fees
• Dividend Policies
• Management Fees as De Facto Dividends

6
Share Issues

• Purpose of the Share Issue
• When Dilution of the Voting Power of the Minority
  via a Share Issue May be Permitted

7
Litigation Costs

• When Payment by the Company of Legal Costs
  Incurred by the Majority in Defending Proceedings
  May Constitute Oppression
• Considerations which Militate Against a Finding
  of Oppression

8
Denial of Access to Information

• When Denial of Access to Information may Amount
  to Oppression

9
Remedies

• Plenary Power under Section 233
• General Principles Governing the Exercise of
  Discretion
• Winding Up as a Last Resort
• The Ordinary Order
• Valuation of Shares
• Extraordinary Orders

10
Related Remedies

• Section 461 (1) (k)
• Section 109 of the Associations Act

11
Conclusion and Questions
12
Claims against Creditors and Directors by a
Company in Liquidation
Guy Newton
Law Society of the Northern Territory