Section 232: grounds for relief
Section 232 of the Act provides that the Court may make an order under section 233 where:
- the conduct of a company’s affairs;
- an actual or proposed act or omission by or on behalf of a company; or
- a resolution, or proposed resolution, of members or a class of members,
is either contrary to the interests of the members as a whole, or oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member or members, whether in that capacity or in any other capacity.
The provision therefore extends beyond completed transactions. Proposed conduct and omissions may also provide grounds for relief. Further, the statutory test does not require every shareholder to be affected in the same way: conduct directed against an individual member may fall within section 232.
What conduct may amount to oppression?
The central concern is commercial unfairness. Depending on the circumstances, conduct capable of supporting an oppression claim may include:
- excluding a shareholder from management contrary to the basis on which the business relationship was established;
- diverting company funds or business opportunities for the benefit of those in control;
- withholding information about the company’s affairs; or
- using dividend policies or other corporate powers to place unfair pressure on a shareholder.
These matters must be assessed in context. Conduct is not necessarily oppressive merely because a shareholder disagrees with a decision or suffers a disadvantage. The question is whether the conduct satisfies the statutory grounds, viewed in the circumstances of the company and the relationship between its members.
The scope of a company’s affairs
The expression “a company’s affairs” is broad. Section 53 addresses matters including the company’s membership, control, business, transactions, property, liabilities, profits and expenditure. The oppression provisions are therefore not confined to formal shareholder meetings or resolutions.
The legislation also expressly recognises that a member may experience unfair treatment in another capacity. This can be relevant where a shareholder is also a beneficiary of a trust administered by the company.
As discussed in McShelly Pty Ltd & Anor v VHS Holding Company Pty Ltd & Ors [2025] QSC 159, referring to David & Ros Carr Holdings Pty Ltd v Ritossa [2025] NSWCA 108, the affairs of a trustee company can include its activities in executing and administering a trust. Whether particular trust-related conduct supports an oppression claim, and what relief is available, requires consideration of the corporate and trust arrangements involved.
Section 233: what orders can the Court make?
Where a ground under section 232 is established, section 233 gives the Court a broad discretion to make orders it considers appropriate in relation to the company. The available orders include:
- Winding up the company.
- Modifying or repealing the company’s constitution.
- Regulating the conduct of the company’s affairs in the future.
- Requiring another member to purchase shares.
- Providing for the company to purchase shares with an appropriate reduction of its share capital.
- Directing the company to institute, prosecute, defend or discontinue specified proceedings.
- Authorising a member or another person specified in the provision to conduct specified proceedings in the company’s name.
- Appointing a receiver, or a receiver and manager, over company property.
- Restraining specified conduct or requiring a person to perform a specified act.
The appropriate remedy depends on the nature of the conduct and what is required to bring its effects to an end. A share purchase order may allow the parties to separate without closing the business. Where such an order is made, the Court’s task is to determine a price that represents fair value in all the circumstances.
A shareholder should not assume that establishing oppression will necessarily result in the particular remedy they seek. The Court retains a discretion both as to whether relief should be granted and the form that relief should take.
Seeking leave under sections 236 and 237
Oppression proceedings concern the statutory grounds for relief in relation to the treatment of members and the conduct of the company’s affairs. Sometimes, however, the company itself has a claim—for example, to recover money allegedly diverted by a director. In those circumstances, a statutory derivative action may be appropriate.
Who can apply?
Section 236 permits certain people to bring proceedings on behalf of a company, or intervene in existing proceedings to take responsibility for them or a particular step, if they obtain leave under section 237. Eligible applicants include:
- a member, former member or person entitled to be registered as a member of the company or a related body corporate; and
- an officer or former officer of the company.
Proceedings brought on behalf of the company must be brought in the company’s name. The distinction is important: the applicant seeks to pursue the company’s rights, rather than simply recover compensation for their own personal loss.
What must the Court be satisfied of?
Under section 237(2), the Court must grant leave if it is satisfied that:
- It is probable that the company will not itself bring the proceedings, properly take responsibility for them, or take responsibility for the relevant steps.
- The applicant is acting in good faith.
- Granting leave is in the best interests of the company.
- Where leave is sought to bring proceedings, there is a serious question to be tried.
- The applicant gave the company written notice of the intention to apply and the reasons for applying at least 14 days before making the application, or it is appropriate to grant leave despite that notice requirement not being satisfied.
These are cumulative requirements. A potentially arguable claim is not, by itself, enough. The applicant must also address good faith, the company’s interests and the other statutory conditions.
The best-interests inquiry includes practical considerations. These may include the amount at stake, the apparent strength of the claim, likely legal costs, the prospects of recovering a judgment and the availability of alternative means of obtaining redress. The Court does not conduct a final trial of the proposed claim when deciding whether to grant leave.
Bluhdorn Investments Pty Ltd v Crook
Gibbs Wright Litigation Lawyers acted for the successful applicant in Bluhdorn Investments Pty Ltd v Crook [2026] QSC 246, a decision delivered by Justice Freeburn in the Supreme Court of Queensland on 12 October 2026.
Bluhdorn Investments held half the shares in Nero Financial Pty Ltd. It sought leave to bring proceedings in Nero Financial’s name concerning allegations that approximately $2.4 million in income owing to Nero Financial had been diverted to accounts controlled by its sole director or associated persons and entities. The proposed proceedings also concerned alleged breaches of the director’s duties.
The contested issues on the leave application were whether Bluhdorn Investments was acting in good faith and whether granting leave was in Nero Financial’s best interests. The Court found that both requirements were satisfied. Relevant considerations included the documentary support for the proposed claims, the preparation of a draft claim and statement of claim, and the costs protections offered to the company.
The decision is particularly important for the distinction it draws between shareholders’ interests and the company’s own interests. Oppression proceedings were already underway, but the Court rejected the argument that their existence meant Nero Financial should not pursue its own claims. The company had a separate legal and commercial interest in seeking the restoration of its assets and redress for alleged breaches of duty. The Court also held that an applicant seeking leave was not required to prove that the remedies available under section 233 were inadequate.
The Court granted leave to bring proceedings against Mr Crook, Luca Financial Pty Ltd, Laguna Business Lending Pty Ltd and Cynthia Jane Rourke, also known as Cynthia Jane Crook. The grant was conditional on written undertakings being filed within seven days.
The decision determined the application for leave, not the ultimate merits of the allegations. It illustrates how derivative proceedings may provide a company with an opportunity to pursue its own claims even while its shareholders are separately litigating an oppression dispute.
Just and equitable winding up
Section 461(1)(k) of the Act provides a separate basis for winding up a company where the Court considers it just and equitable to do so. Unlike an application for relief under sections 232 and 233, this ground does not depend on establishing oppression.lst+1
A management deadlock or a serious breakdown in the relationship underpinning a closely held company may support an application. However, the breakdown does not automatically entitle a shareholder to a winding-up order: the Court must consider whether winding up is justified in the particular circumstances.
Winding up is materially different from an order requiring one shareholder to purchase another’s shares. A purchase order can preserve the business while separating its owners; winding up brings the company’s affairs to an end through liquidation. Identifying the appropriate remedy is therefore an important part of assessing the dispute.
Our experience
Our solicitors have experience in shareholder disputes involving oppression claims, alleged breaches of directors’ duties, including applications to bring proceedings on behalf of companies (a derivative action).
In McShelly Pty Ltd & Anor v VHS Holding Company Pty Ltd & Ors [2025] QSC 159, the plaintiffs alleged a quasi-partnership between three doctors and sought relief under sections 232 and 233. Our Litigation Director Lachlan Rieck represented the plaintiffs in that proceeding. The Court described its discretion under section 233 as “extremely wide” and emphasised that judge-made limitations on the scope of sections 232 and 233 should be approached with caution.
As indicated above, Gibbs Wright Litigation Lawyers acted for the successful applicant in Bluhdorn Investments Pty Ltd v Crook [2026] QSC 246, obtaining leave to bring proceedings in the name of and on behalf of Nero Financial Pty Ltd.
Which Court can hear the application?
The Act gives “Court” a particular meaning. The Supreme Court of Queensland and the Federal Court of Australia have jurisdiction to grant relief under the corporate oppression provisions. Selecting the appropriate Court and procedure forms part of preparing the application.
Conclusion
A shareholder dispute may involve unfair treatment of members, loss suffered by the company, or both. The appropriate response may include an oppression application, an application for leave to bring derivative proceedings, or consideration of just and equitable winding up. These remedies serve different purposes, and the existence of one does not necessarily exclude another.
If you are concerned about the conduct of a company’s affairs, the treatment of your shareholding or the misuse of company assets, Gibbs Wright Litigation Lawyers can advise on your options. Contact us on the booking link below.
