Saykan v Elhan

In the case of Saykan v Elhan, the appellants, minority shareholders in a company, sought relief under the Corporations Act 2001 for oppressive conduct by the majority shareholders. The respondents, the majority shareholders, had engaged in a series of actions which the appellants claimed amounted to oppressive conduct, including irrational decisions such as the appointment of an administrator, offensive behaviour, and the termination of a lease. The appellants also alleged that the respondents had repudiated an agreement to sell their shares and sought rescission of that agreement. The matter was heard in the Supreme Court of Queensland, with the appellants arguing that the conduct of the respondents constituted oppressive behaviour warranting the court's intervention.

The primary legal issue before the court was whether the respondents had engaged in oppressive conduct that justified the court ordering a compulsory purchase of the appellants' shares at fair value. Additionally, the court had to determine whether the appellants had accepted the respondents' repudiation of the share sale agreement. The appellants argued that the actions of the respondents, including the presentation and processing of a false invoice, changing locks and security devices, and other irrational decisions, amounted to oppressive conduct. The respondents, on the other hand, contended that their actions were within their rights as majority shareholders and that the appellants had accepted the repudiation of the share sale agreement.

The court held that the actions of the respondents did indeed amount to oppressive conduct under the Corporations Act 2001. The court found that the respondents' conduct, including the termination of the lease, changing locks and security devices, and the presentation of a false invoice, was irrational and oppressive. Furthermore, the court determined that the appellants had not accepted the respondents' repudiation of the share sale agreement. As a result, the court ordered a compulsory purchase of the appellants' shares at fair value. The court found that the appellants were entitled to relief under the Corporations Act 2001 due to the oppressive conduct of the majority shareholders.

In conclusion, the court ordered the compulsory purchase of the appellants' shares at fair value, reflecting the oppressive conduct of the majority shareholders. The court found that the appellants had not accepted the repudiation of the share sale agreement, and thus, the agreement remained in effect. The court's decision provides a clear example of the court's willingness to intervene in cases of oppressive conduct by majority shareholders against minority shareholders, and highlights the importance of protecting minority shareholders' interests under the Corporations Act 2001.