Corporate Litigation

Understand Directors’ Duties and Shareholder Remedies and resolve company related disputes swiftly with assistance from our expert team.

Problems arising from disputes between companies, directors and shareholders can have a significant impact on a company’s profitability and share value, particularly if Court proceedings ensue. When problems arise, early advice and intervention is critical to reduce the impact on share value and solvency. The right legal team can help you put the pieces together to understand your legal rights and options for resolving problems. 

Our experienced Corporate Litigation team includes 3 Accredited Specialists in Commercial Litigation and is headed by Tony Peterson, who obtained his Specialist Accreditation in Corporations Law.

Directors’ Duties

Company Directors owe duties and responsibilities to the company and its shareholders under the Corporations Act 2001, the common law and any Shareholders Agreement or Executive Employment Contract. These Directors Duties include the:

  • duty to exercise due care and diligence,
  • duty to act in good faith in the best interests of the company and for a proper purpose,
  • duty to avoid conflicts of interest,
  • duty not to improperly use their position to gain an advantage for themselves (or someone else) or to cause detriment to the company,
  • duty not to misuse information, and
  • duty to prevent insolvent trading.

These duties are owed by Directors and Company Secretaries and in some circumstances executives and other people who control the way a company operates (also known as shadow directors or de facto directors) . Significantly, a person involved in a contravention of duty arising under the Corporations Act may by liable for loss or damage flowing from the breach along with the Director.

An action for breach of a Directors’ Duty may be brought by the company (including a liquidator), by a shareholder (with leave of the Court) or by ASIC.

A Director may also be liable to a Company in Liquidation where the Director has been a party to an insolvent transaction, especially an unreasonable director-related transaction.

Shareholder Remedies

The remedies that may be available to a Shareholder aggrieved by action taken by a Director or group of Directors on behalf of a company include:

  • applying to the Court for an order that the company be wound up on just and equitable grounds, for example, where there is a deadlock and a small company is unable to operate effectively because the shareholders are equally divided and decisions cannot be made,
  • bringing an action for relief based on oppression against a minority shareholder,
  • bringing a derivative action for breach of a Directors’ Duty (with leave of the Court),
  • enforcing the terms of a Shareholders Agreement,
  • seeking an injunction to prevent a contravention of the Corporations Law,
  • taking steps to access and inspect Financial Reports and other books and records under the Corporations Act or company Constitution, and
  • convening a meeting of Shareholders and seeking to pass a Member Resolution including for the removal and/or appointment of a Director.

Shareholder Oppression

A Shareholder may apply to the Court for a range of statutory remedies where the conduct of a company’s affairs or an actual or proposed act or omission or the company, or resolution of members, is:

  • contrary to the interests of the members as a whole, or
  • oppressive to, unfairly prejudicial to, or unfairly, discriminatory against, a Shareholder in any capacity.

Where Shareholder Oppression is established the Court has a broad range of remedies available including orders that:

  • the company be wound up,
  • the purchase of any Shares by other Shareholders or the company at a price which the Court determines is fair,
  • the company’s Constitution be modified or repealed,
  • regulate the conduct of the company’s affairs in future, or
  • the company institute, prosecute, defend or discontinue specified Court proceedings or an order authorising Shareholder to do so in the name of and on behalf of the company.

How We Help

Our team assists companies, directors, shareholders, liquidators and creditors to understand, pursue and defend a range of issues and actions relating to corporations laws including:

  • Breaches of Directors Duties including claims of Directors stealing from or defrauding a company,
  • Shareholder disputes and remedies including for oppression against a minority shareholder,
  • Breaches of Shareholders Agreements,
  • Misleading or deceptive conduct claims,
  • Statutory Demands for Payment,
  • Winding up applications,
  • Insolvent trading claims,
  • Claim relating to insolvent transactions, uncommercial transactions and unreasonable director-related transactions, and
  • ASIC Investigations and prosecutions.

Our Commercial Litigation team is one of the most recognised teams in New South Wales and has more Accredited Specialists than 99% of our competitors.

If you have a company dispute and need an answer, we can help you find a solution.

Call to speak to a Corporate Litigation lawyer today.
We service Newcastle, Sydney and Central Coast.