Business Dispute Lawyers Sydney | Business Partner Disputes

Our Sydney Business Dispute Lawyers can help resolve all business disputes

Businesses that begin with enthusiasm and cooperation between entrepreneurial partners and investors often end in bitter disagreement. Differing visions for the future of the business, disagreements about corporate governance and the introduction of new stakeholders can all be sources of tension and conflict.

Our Sydney Business Dispute Lawyers can assist the business participants to resolve these disputes and enforce stakeholder rights.

The parties to these business disputes should always engage in open and constructive dialogue prior to any change of officeholders, transfer of shares or commencement of legal proceedings. This is an opportunity to identify and address any genuine misunderstanding and to resolve the dispute in a way that preserves productive and profitable business relationships.

Where the dispute cannot be resolved by cooperative efforts or formal mediation, the relevant rights and obligations of the parties are governed by the general law and:

in the case of a company dispute, the company constitution, shareholders agreement and the Corporations Act 2001 (Cth),
in the case of a dispute within a partnership structure in New South Wales, the partnership agreement and the Partnership Act 1892 (NSW), and
in the case of a dispute within a trust structure in New South Wales, the trust deed documents and the Trustee Act 1925 (NSW).

Director disputes and shareholder disputes

Disputes within a company often arise between:

directors, the company and a director, or a shareholder/s and a director/s (director disputes)
shareholders (shareholder disputes)

These disputes may be resolved by the resignation or removal of a director and/or the sale of a shareholder’s shares in the company. Those processes may be relatively simple where there are sufficient votes or a willingness to resign and agreement on share price. Alternatively, the company constitution and shareholders agreement may set out clear methods for achieving those objectives in the event of a deadlock.

If the dispute cannot be resolved by negotiated measures or reliance on the corporate governance arrangements, court proceedings may be necessary. Where the company or a shareholder alleges a breach of a director’s legal duties to the company, proceedings may be commenced against the director on that basis (see our ‘Breach of director duties claims’ webpage on this website).

Our Sydney Business Dispute Lawyers will protect your rights

Often, a breach of director duties claim is run parallel to a claim of ‘statutory oppression’ under Part 2F.1 of the Corporations Act 2001 (Cth) (“the Act”). Section 234 of the Act sets out the persons who may commence proceedings for statutory oppression including:

a person who has ceased to be a shareholder of the company if the claim relates to the circumstances in which they ceased to be a shareholder (Section 234 (c)), or
a shareholder, even if the claim relates to an act or omission that is against:
- that shareholder in their capacity other than as a shareholder (Section 234 (a)(i)), or
- another shareholder in their capacity as a shareholder (Section 234 (a)(ii))

Section 232 of the Act sets out the circumstances in which a court may make orders to remedy statutory oppression:

If the conduct of a company’s affairs, or
an actual or proposed act or omission by or on behalf of a company, or
a resolution, or a proposed resolution, of shareholders or a class of shareholders of a company is either,
contrary to the interests of the shareholders as a whole, or
oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a shareholder or shareholders whether in that capacity or in any other capacity.

For the purposes of Section 232, ‘a company’s affairs’ include (but are not limited to):

the establishment, control, transactions and dealings, property, liability and finances of the company (Section 53 (a))
the internal management and proceedings of the company (Section 53 (c)), and
the ownership of shares in the company including the circumstances in which a person bought or sold shares in the company (Sections 53 (e) and 53 (h)).

Where oppression is established in accordance with Section 232, the court may make any order under Section 233 it considers appropriate to eliminate the oppression including (but not limited to):

An order that the company be wound up (Section 233 (1)(a)). Winding up orders under this section apply as if the orders were made under Section 461 with such changes as are necessary (Section 233(2)). Section 461 empowers a court to wind up a company for oppressive conduct on the application of the company, creditors, certain shareholders, liquidators, ASIC and APRA. Proceedings under Section 461 may be more appropriate where there are irreconcilable differences among shareholders of a company with very limited activities.
An order that the company’s constitution be modified or repealed (Section 233 (1)(b)). Such an order may, for example, modify the company constitution to secure a board of directors appointed by the court.
An order regulating the future conduct of the company’s affairs (Section 233 (1)(c)). Such an order may, for example:
- prohibit any future modification of the company constitution which would empower directors or shareholders to reverse a court appointed board, or
- direct a board to investigate particular company dealings and commence legal proceedings if appropriate.
An order that the shares of a particular shareholder be purchased by other shareholders or by the company (with a reduction of capital) (Sections 233 (1)(d) and 233 (1)(e)). This remedy is often granted where the person who commenced the proceedings wants to exit the company.
An order that the company commence, defend or discontinue specified legal proceedings or authorising a shareholder to take such action in the name of and on behalf of the company (Section 233(1)(f) and 233 (1)(g)).
An order appointing a receiver and manager of any or all of the company’s property (Section 233 (1)(h)). This order may be appropriate where the property of the company is at risk because of the oppressive conduct.
An order restraining a person from engaging in specified conduct or from doing a specified act, or requiring a person to do a specified act (Sections 233 (1)(i) and 233 (1)(j)). The court may craft orders under these sections requiring a person to pay compensation for their oppressive conduct and restraining further oppressive acts of a particular nature.

Trust disputes

The law in relation to trusts is complex and we recommend that trustees and beneficiaries seek legal advice from our Sydney Business Dispute Lawyers before commencing proceedings or taking any steps to alter the arrangements that existed prior to the dispute.

Whatever the cause or nature of the dispute, it is important that trustees understand and adhere to their ongoing legal duties to the beneficiaries and in relation to the property of the trust.

Our Sydney Business Dispute Lawyers help partners resolve their differences. In the event of a dispute within a partnership structure, the partners should first refer to any written Partnership Agreement, and, in particular, any dispute resolution procedures set out in the agreement. It is also important, particularly in the early stages of the dispute, that the partners understand and adhere to their ongoing legal duties of trust, confidence and loyalty to the partnership.

Whatever the cause or nature of the dispute, the partners should have a clear and well-advised understanding of their rights and obligations before assuming enhanced control of the business, altering the financial arrangements, or exiting the partnership or purporting to exclude another partner.

Where the dispute cannot be resolved by negotiation or by implementing mechanisms set out in the Partnership Agreement, one or more of the partners may commence proceedings for a breach of the agreement and/or a remedy under the Partnership Act 1892 (NSW) such as a dissolution of the partnership.

Disclaimer

The information provided above is not to be taken or relied upon as legal advice and Jason Francis Commercial and Construction Lawyer will not be responsible for decisions made or acts or omissions undertaken in reliance on this information. It is information intended as a guide only. You should obtain independent legal advice in respect of any issue or query you may have after reading this information.

Liability limited by a scheme approved under Professional Standards Legislation.

What our clients are saying

I engaged Jason to draft an application for federal government approval in relation to mining operations in Papua New Guinea. Jason did a great job drafting and compiling the necessary documentation and we subsequently obtained the necessary approval.

Martin Wilson

CAVALIER GOLD PTY LTD

We became involved in a dispute with a builder following serious building defects in the early stages of the construction of our new home. We took the builder to court and were able to settle early without the cost of a hearing. It was a good result for us.

Helen Nguyen

FARFIELD EAST

Jason helped me with a difficult court matter which posed a real threat to my horse-training business. Thanks to Jasons professional and thorough preparation, I achieved a great outcome and my business was able to continue unaffected.

Stephen Byrne

HAT CREEK PTY LTD

I was in a very critical situation with a building company wanting money that was not owed to them. Jason was very understanding & professional in attempting to negotiate with the Company. I had a great deal of confidence that he would provide a positive outcome. I would recommend Jason highly to anyone dealing with a difficult situation in Commercial or Construction Law

Dianne Aslin

Frequently asked questions

How do you work?
We offer a free 45-minute initial consultation, which is considerably longer than what most firms offer. To provide as much certainty as possible, we give clear and accurate advice regarding our preferred approach to your matter, the strengths and weaknesses of your case, and the likelihood of success in litigated matters. We require funds in trust in advance of any work that we do, we take care to match your fees to our cost estimates and we do not charge for every email, brief telephone conversation or small task.
How affordable are your prices?
The affordability of our legal services begins with accurate and reliable cost estimates and efficiency achieved by skilled lawyers working quickly and leveraging technology. Beyond those factors, our hourly rates are competitive with other comparable firms. We have a genuine commitment to providing quality and value, and we work hard to minimise our clients’ expenses by resolving issues and disputes as efficiently and cost-effectively as possible.
What geographical areas do you service?
We service the entire Sydney metropolitan area and we also have regional, interstate and overseas clients. We have offices for face-to-face client conferences in Cronulla, Sydney CBD and Parramatta. However, regardless of your location, we are able to provide our services by telephone and video conferencing, and cloud-based document sharing. We also often conduct face-to-face conferences with clients at their offices or place of business where it is convenient and appropriate to do so.
Do you prefer a particular type of client? Plaintiffs or defendants? Builders or homeowners?
We act for all types of clients and we do not have a preference for any particular type of client. We will act for you and protect your interests with determination and sophistication regardless of whether you are suing someone or being sued.