Remedies Available to Minority Shareholders Under Oppression

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Table of Contents

Introduction……………………………………………………………………………...2
Oppression Remedies……………………………………………………………………2
History of Oppression Remedy and The Old Rule under Common Law……………2
Statutory Derivative action……………………………………………………………...2
Oppression…………………………………………………………………………….….3
Example cases of Oppressive Conduct………………………………………………….4
Oppression and Expropriation of Shares: Heated argument GAMBOTTO Case…..4
Winding Up: An Intense Step……………………………………………………………5
Injunctions………………………………………………………………………………...6
Class Right Variation…………………………………………………………………….7
Constitution……………………………………………………………………………….7
Inspection of Books……………………………………………………………………….7
Analysis…………………...……………………………………………………………….8
Conclusion……………...………………………………………………………………….8
Bibliography……………………………………………………………………………….9

Introduction

The utmost prevalent channel through which commercial activities are operated in Australia are Corporate structures. This assessment aims to address several effective remedies under The Corporations Act, through which minority shareholders can raise their voice against unfair and oppressive conduct of majority shareholders.

Oppression Remedies

There are many statutory remedies in case the directors or controllers breach their duties or exploit their powers. Shareholders have superior rights under statutory remedies than common law to assist in carrying these actions. Under s 233, the two purposes of these remedies is to recompense the damaged parties and to terminate oppressive conduct.

History of Oppression Remedy & The Old Rule under Common Law

The Company law traditionally trusts ‘Majority Rule’ principle where decisions are taken by simple majority vote.  But it carries a natural possibility of abuse.^[1] This danger is inflamed by Fuss v Harbottle^[2] rule that states courts are averse to intervene in the internal management of companies performing within their authorities and also companies are separate legal entities and if anything wrong is caused in company due to controlling members, directors or outsiders, the proper plaintiff is company itself and court would not amuse any action conveyed on behalf of the company by members.^[3] The court introduced some exceptions, where a member can take legal action to enforce rights of the company.

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