The Members' Oppression Remedy: Can it be Used When a Company is in Liquidation? Should it be Used?

The Australian oppression remedy is a broad, discretionary remedy found in pt 2F.1 of the Corporations Act 2001 (Cth). The remedy allows a court, upon the application of a member, to order any relief it sees fit to remedy conduct that is either contrary to the interests of the members as a whole, or is oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member or members. This remedy can be used in relation to a wide range of corporate conduct including conduct that may fall short of a breach of directors’ duties but is nonetheless oppressive or contrary to the interests of the members as a whole. The court may order any relief to bring to an end the oppression, including relief that is compensatory in nature. This thesis considers whether the oppression remedy can, and should, be used by a member when the company is in an insolvent liquidation. When a company is in liquidation, a number of roadblocks exist, including: whether there is utility in the requested relief; the effects of liquidation, including the stay of proceedings and the role of the liquidator; the prohibition on share transfers; the postponement of subordinate claims in the distribution of a winding up; and the tension between the members’ interest in being able to bring an oppression action and the priority interest of creditors in insolvency. This thesis argues that whilst no member has been successful to date, it is possible for each of these roadblocks to be overcome in the right circumstances. This thesis concludes that it may in fact be appropriate for an oppression action to be utilised by a member when a company is in liquidation to remedy misconduct that may not otherwise be actionable. This may result in the awarding of relief that may in fact swell the asset base of the company, thereby benefiting the member, the company and the company’s creditors.

Author dc:creator

• Hess, Nadia-Ruth

Advisors dc:contributor.advisor

• Nosworthy, Beth
• Symes, Christopher

• Members
• Oppression Remedy
• Liquidation

Language dc:language.iso

en

Handle dc:identifier.uri

https://hdl.handle.net/2440/144703

OAI identifier oai:identifier

oai:digital.library.adelaide.edu.au:2440/144703