L C B Gower, The Principles of Modern Company Law

Scottish Co-op Wholesale Society v Meyer (the first) – two petitioners (MD and minority shareholders) of a subsidiary formed by the co-op to enable it to enter the rayon industry. Later the need to operate through a separate company ceased, so they ran it to the ground.

Held: The case of oppression was established. The HOL ordered a payout to the minority shareholders at a fair value (the price had the oppression had not occurred)

Re H R Harmer – the founder of a stamp dealer firm incorporated it in 1947, giving his two sons directorships and a majority shareholding. The father essentially had voting control and ran the business as his own, asserting he was entitled to. His unbusinesslike manner made the company unsuccessful

Held: Oppression was made out – he demoted the father to ‘consultant’ and prohibited him from interfering with the company other than pursuant to board division.

The definition of oppression was said to mean “burdensome, harsh and wrongful” with the conduct complained relating to the complainant in their capacity as member and to the conduct of the company’s affairs. It has to be a course of conduct, not just an act of impropriety

But in Re Bellador Silk the petitioner failed because the proceedings were brought for a collateral purpose (thus an abuse of process) and concerned the petitioner as a director rather than member

And Re Five Minute Car Wash – though the MD was “unwise, inefficient and careless” and the controlling shareholders failed to exercise controlled; oppression was not established since the MD didn’t act “unscrupulously, unfairly or with any lack of probity”. Mere omissions of the controlling shareholders weren’t “designed to achieve some unfair advantage”

Re Tivoli Freeholds Ltd [1972] VR 445

Menhennitt J began by noting that the definition of oppression depends on all the circumstances and doesn’t admit universal definition. Some of the matters included are:

1. Those alleging that the affairs of the company were conducted in a manner oppressive to them must establish conduct which is “unfair or...burdensome harsh and wrongful” to the other members of the company or some of them, and lacks that degree of probity which they are entitled to expect in the conduct of the company’s affairs”

His honour interpreted the lack of probity as being one reason that can independently lead to oppression – it is not expressed as an additional requirement but rather in the alternative

5. Oppression may occur even although all the members of a company are treated equally. The unfairness may arise by reason of an advantage to a parent company

6. It must also be established that oppression results from “some overbearing act or attitude on the part of the oppressor” – some course of conduct that is unfair (looking both from the POV of the oppressor and the oppressed)

7. Further, it wasn’t intended to give jurisdiction to the court to interfere with internal management where directors act honestly without any purpose of advancing personal interests at the expense of the company

Wayde v New South Wales Rugby League Ltd (1985) 59 ALJR 798

Facts: The NSWRL was incorporated with the object including ‘fostering and control of the game and such action as may be conducive to its best interest’ – the CC authorizing the BOD to determine which team participates in competitions. The board in 1984 consulted with district clubs concerning the conduct of a premiership competition – calling for applications for entry. After consultation, the board adopted a proposal that the number of competing teams be reduced from 13 to 12 and the inclusion of ‘Wests’ was refused. Two members of Wests sought relief under Pt 2F.1 (under the predecessor provisions)

Mason ACJ, Wilson, Deane and Dawson JJ noted that this was a decision made in good...