Director Dispute Lawyers in Melbourne

When the boardroom stops working

Companies survive bad years all the time. A board that has stopped functioning is a harder problem to come back from. A director who blocks every resolution, or who treats the company account as their own, does damage that compounds week by week: suppliers go unpaid, staff pick sides, and the value you built walks out the door while the paperwork sits unsigned.

Director disputes reward early, precise action, because the Corporations Act gives you levers most people have never had to use. Larger companies with an outside board run the same breakdown through corporate governance disputes, where the argument is about process and accountability rather than about who owns what. If your board is broken, call MK Law on 1800 130 120. The first call is free, and it will tell you which lever fits your numbers.

Removing a director from a private company

Start with the documents. The constitution and any shareholder agreement control how a director is appointed and removed, and a well-drafted one makes removal mechanical. Where the documents are silent, the default rules let shareholders of a private company remove a director by ordinary resolution, a simple majority of votes cast.

If the director controls the board and refuses to call the meeting, you can force the issue: hold at least 5 per cent of the votes and you can require the directors to call a general meeting, which they must do within 21 days. Public companies run under a stricter regime that needs two months’ notice of the removal resolution.

The maths is the real obstacle. In most private company fights, the director you want gone holds enough shares to block the vote. Then removal stops being a counting exercise and becomes an oppression claim.

Getting someone off the board also does nothing about their employment contract, and in a small company the same person is usually on the payroll. That exit needs its own handling: notice served properly, access to systems and clients wound back, and often gardening leave while the handover happens, so the board fight does not turn into a second fight in the Fair Work Commission.

When the director you want out owns half the company

The oppression claim is how entrenched directors get moved. Where a director-shareholder runs the company’s affairs oppressively or with unfair prejudice, excluding you from management, starving you of dividends while drawing a salary, or diverting work to a side entity, the Supreme Court of Victoria can intervene without needing anyone’s resignation. On the files we run, the buy-out at fair value is the remedy the court reaches for first: one side buys the other out at a price fixed by an independent valuer, who can be instructed to ignore the oppressive conduct itself. The court can also appoint a receiver, restrain specific conduct, or wind the company up where nothing less will work.

Duty breaches: when the dispute is about money leaving

Directors owe the company strict duties: reasonable care and diligence, good faith in the company’s interests, and no improper use of position or information. A director running personal expenses through the company, taking kickbacks, or booking company work through their own entity is in breach, and the exposure is personal. Where the company is also running short of cash, those duties bite harder still, because insolvent trading claims and Director Penalty Notices land on directors individually, and director liability is where that side of the exposure gets managed.

The procedural catch is that duty claims belong to the company, and a wrongdoer who controls the board will never sue themselves. We solve that with a derivative action brought with the court’s permission, so the claim runs in the company’s name over the controller’s objection. Where assets are actively moving, we seek urgent injunctions and freezing orders first and argue later.

The fast track: Victoria’s Oppression Proceeding Program

Most director disputes in small companies end up travelling with an oppression claim, and Victoria has a purpose-built lane for them. The Supreme Court’s Oppression Proceeding Program starts a claim with a short affidavit of no more than three pages, pushes the parties to an early mediation before an associate judge or judicial registrar, and encourages a joint valuation early so the argument narrows down to a number. Most files settle there, which is why a credible, well-framed claim gets you further than two years of correspondence.

Talk to a Melbourne director dispute lawyer

Tell us who holds what shares, who sits on the board, and what the other side has done. In one free call we will tell you whether your path is a removal resolution, an oppression claim, or an urgent application, and exactly what the first step involves. Call 1800 130 120 or use the form on this page. If the fight is between business partners rather than directors, start at partnership disputes.