Shareholder Disputes in the Supreme Court of Victoria: Oppression, Buyouts and the Valuation

The oppression remedy in plain words

Section 232 of the Corporations Act 2001 lets the court make orders where the conduct of a company's affairs, an act or omission by or for the company, or a resolution of members is either contrary to the interests of the members as a whole, or oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member, in that capacity or any other. Section 234 sets out who can apply, which includes a member, a person who has ceased to be a member if the application relates to how they ceased, and a person to whom a share has passed by will or by operation of law.

Typical facts: a minority owner is removed as a director and cut off from the accounts. Dividends stop while the controlling shareholders pay themselves large salaries. A customer contract quietly moves to another company the majority owns. Two equal owners stop speaking and the business drifts. Whether any of that is oppression is a legal question for your lawyer and the court. What it is worth is a valuation question.

What the court can order

Section 233 says the court can make any order it considers appropriate in relation to the company, and lists examples. They include that the company be wound up, that the constitution be modified or repealed, orders regulating how the company is run in future, an order for the purchase of any shares by any member or by a person to whom a share has passed by will or operation of law, an order for the purchase of shares with an appropriate reduction of the company's share capital, orders about proceedings in the company's name, appointing a receiver, and orders restraining or requiring specified conduct.

The purchase order is the one that needs a valuation: the court must fix a price, or a way of fixing one, and that is where the valuation evidence does its work.

Where these cases run in Melbourne

The Supreme Court of Victoria's Commercial Court has a Corporations List. The court's page says the list manages a variety of proceedings relating to incorporated bodies and is suitable for applications under the Corporations Act 2001, and that proceedings in the list include shareholder disputes, including shareholder oppression proceedings. Judges, associate judges and judicial registrars manage matters within it.

The Commercial Court's Practice Note SC CC 1, which commenced on 22 September 2025, sets out how proceedings are run, including expectations about expert evidence. Which court is right for a particular dispute, and the strategy for running it, is for your lawyer.

The three valuation questions that decide the price

The court decides each of these questions on the facts of the case. A valuer gives figures and reasons; the valuer does not decide which legal position is correct.

The valuation date

There is no single fixed date for valuing shares in an oppression buyout. Dates that come up include the date of the order or hearing, the date proceedings began, and the date the conduct complained of started. A Richmond hospitality group that lost a venue after the minority was excluded, or a Tullamarine logistics company that has grown since proceedings began, can look very different at each.

Because the court chooses, valuers are commonly instructed to value at more than one date. The report keeps each valuation on the information that was known or knowable at that date, so the figures are not coloured by hindsight. That is also how the report stays useful if the date the court adopts is not the one either side argued for.

Minority discounts and other adjustments

On an ordinary sale, a buyer usually pays less per share for a minority parcel in a private company, because it carries no control and is hard to sell. Whether that logic applies to a buyout ordered as a remedy is a different question. Arguments are made both ways: that an oppressed member is not a willing seller and should not bear a discount for a position forced on them, and that the circumstances of a particular case may justify one. The court decides. A careful report does not assume the answer. It sets out the pro rata value of the shares as a proportion of the whole company, sets out any discount separately with its basis, and leaves the choice to the court or the parties.

The same discipline applies to adjustments that put back value the conduct took out. Controllers' remuneration is benchmarked against what the roles would cost on the market. Related-party rent, management fees and loans are tested against arm's length terms using the actual agreements. Diverted work is traced through the other entity's records where they are available. Each adjustment stands on its own so the court can accept some and reject others.

Party experts, joint reports and a single expert

Valuation evidence in court is expert evidence. Practice Note SC CC 1 says practitioners are expected to comply with the obligation under section 65G(1) of the Civil Procedure Act 2010 (Vic) to tell the court and other parties early of the intention to call expert evidence. It also says that when the plaintiff files expert evidence and the defendant files evidence in reply, it is usual for the Commercial Court to order experts in the same discipline to confer and prepare a joint report, and the court may order common materials and require the experts to address common questions. Its example orders include agreeing the documents and questions for the experts, and providing the other side with a copy of each expert's letter of instruction.

So a valuer engaged by one side should expect their reasoning to be tested by an opposing valuer, in a joint report that records where they agree and why they disagree. Some parties choose instead to jointly instruct one valuer, which can save cost when the real dispute is about the facts rather than the method. Which path suits your matter is for your lawyer. Either way, the valuer's duty is to give an independent opinion, and the fee should never depend on the outcome.

Steps for the lawyer and client

1. 1.Read the constitution and any shareholders' agreement first: many private companies have a buyout clause, a deadlock procedure or a valuation formula that may apply before any court remedy.
2. 2.Obtain an early independent valuation for negotiation, showing the value at each likely valuation date and with and without any discount.
3. 3.Use the figures in settlement discussions or mediation, where most disputes are resolved.
4. 4.If proceedings are issued, notify the intention to call expert evidence early, as the Commercial Court expects.
5. 5.Agree with the other side, or follow the court's orders on, the documents and questions the experts will address.
6. 6.Prepare for the experts to confer and produce a joint report narrowing the issues before trial.

Our role, and family law disputes

Business Valuations Melbourne prepares independent valuations of shares and businesses to support negotiation, mediation and settlement, and reviews of another party's valuation. A valuation report for negotiation is not an expert witness report; expert evidence for a court is a separate engagement, scoped and quoted in writing before it starts. We give valuation evidence only and do not give legal advice. Where the dispute is between spouses or former de facto partners, it belongs in family law, and our dedicated family law practice, Family Law Valuations (familylawvaluation.com.au), handles those matters.

• ·Corporations Act 2001 (Cth), ss 232, 233 and 234, Federal Register of Legislation
• ·Corporations List, Commercial Court, Supreme Court of Victoria
• ·Practice Note SC CC 1: The Commercial Court (commenced 22 September 2025), Supreme Court of Victoria

This guide explains how valuations work. It is not tax, duty or legal advice: those positions are for your accountant, lawyer or the relevant regulator.