Shareholder disputes are among the most commercially and personally significant forms of litigation a business can face. They often arise from breakdowns in relationships or trust, disagreements over direction or value, or concerns about how a company is being managed. The earlier the issue is addressed, the broader the range of options available.
Grounds for a shareholder dispute
Common legal bases for shareholder claims in New Zealand include:
Oppression or prejudice under the Companies Act 1993 (sections 174 to 176)
Breach of directors' duties, including duties of care, good faith, and proper purpose
Failure to act in the interests of the company
Disputes over the value of shares on exit or in a buy-out
Fraud or misappropriation of company assets
Available remedies
Courts have wide powers in shareholder disputes, including the ability to:
Order the purchase of a shareholder's shares at fair value
Restrain conduct prejudicial to a shareholder's interests
Appoint a liquidator where it is just and equitable to do so
Award compensation or other relief
The appropriate remedy depends on the nature of the dispute, the structure of the company, and what outcome the affected shareholder is seeking.
