the Applicant v Rigging Rentals WA Pty Ltd
Citation: [2015] FCA 1158
At a glance
- Employees affected
- 1
What happened
Eric Spence, Clifford McGillivray, and Craig Sweetapple were shareholders in Rigging Rentals WA Pty Ltd (the Company). They initially worked with Lifting by Design Pty Ltd. In 2014, the Respondent and a co-worker demanded the Applicant consent to the allotment of additional shares to them, which would reduce his shareholding to 25%. This demand was made via email and linked to negotiations for selling the company. The Applicant’s employment ended shortly after, and he sought relief under the Corporations Act alleging oppression. The Company cross-claimed for breach of duties by the Applicant.
What was decided
The Federal Court found that the share allotment demands constituted oppressive conduct. The Respondent and a co-worker were ordered to pay the Applicant $300,000 each for delivery of written share transfer documents. The Company was ordered to pay the Applicant $36,740, while the Applicant paid the Company $11,927.18. The court acknowledged a market value of $1,800,000 for the company and $600,000 for one-third of the Applicant’s shares as at November 2014. Costs were to be agreed upon by the parties.
What it means for employers
Employers should ensure fair treatment of shareholders and avoid demands that could be perceived as oppressive. Any changes in shareholdings or management control need to be communicated transparently and with consideration for existing shareholder rights. The court's decision highlights the potential legal consequences of actions impacting a shareholder’s position.
What it means for employees
Employees who are also shareholders have recourse under the Corporations Act if they experience oppressive conduct from other shareholders. It is important to document any demands or agreements related to shareholdings and seek legal advice if feeling unfairly treated.
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This summary was drafted from the published decision and reviewed before publishing. It is general information, not legal advice. For your specific situation, speak to the Fair Work Ombudsman (13 13 94) or a qualified lawyer. About these summaries & corrections →