In the matter of Mosman and Co Pty Limited

Mosman and Co Pty Limited was a company engaged in a real estate business, with the parties contributing equal capital but holding 70/30 shareholdings. The dispute arose when the majority shareholder removed the minority shareholder from the board, withheld access to company books and bank accounts, and made payments to the majority shareholder's wife for wages and back-pay. The minority shareholder alleged that these actions constituted oppressive conduct under the Corporations Act. The case was heard in the Supreme Court of New South Wales.

The primary legal issue the court had to address was whether the actions of the majority shareholder constituted oppressive conduct towards the minority shareholder. This required the court to examine whether the removal of the minority shareholder from the board, the payment of wages to the majority shareholder's wife, and the refusal to provide access to company records and bank accounts, along with the sale of the company's principal asset, constituted oppressive conduct. Additionally, the court needed to determine whether the majority shareholder's offer to buy out the minority shareholder's interest was fair.

The court found that the actions of the majority shareholder were oppressive. The removal of the minority shareholder from the board and the refusal to provide access to company books and bank accounts were significant breaches of the expectations set out in the Shareholders' Agreement. The payment of wages to the majority shareholder's wife, without proper authorisation, further exacerbated the situation. The court also noted that the majority shareholder's offer to buy out the minority shareholder's interest was not fair. Consequently, the court ordered a compulsory buy-out of the minority shareholder's interest at a fair value.

In light of the findings, the court ordered the majority shareholder to buy out the minority shareholder's interest in the company at a fair value. The court also directed that the minority shareholder be provided with access to the company's books and bank accounts, and that any further actions that could be deemed oppressive be refrained from. This decision underscores the importance of adhering to agreements and acting in good faith when dealing with fellow shareholders in a company.