A number of legislative controls are available to shareholders wishing to exercise their rights. If it appears that the affairs of the company are not being conducted properly, shareholders have some options available to them and among which, the statutory remedy for shareholder oppression. It protects minority shareholders against being deprived of their fair share and greatly improves their ability to take action against the company alleged to be in breach of good corporate practices. The Courts have adopted a liberal approach in the interpretation of the oppression remedy following some leading common law cases and it is now the broadest of all the remedies available to minority shareholders. There could be many instances where conduct has been held to constitute oppression, among them is the conduct of company meetings. Formal exercise of majority power may in fact, be unfairly prejudicial to a minority shareholder, justifying Court intervention.
The statutory remedy against oppression, unfair discrimination and unfair prejudice is contained in ss 174-176 of the Companies Act 1993. It provides that the company’s affairs are being conducted “in a manner that is oppressive, unfairly discriminatory or unfairly prejudicial “to him or to her may apply to the court for relief. The leading authority in New Zealand on the meaning of the words “oppressive, unfairly discriminatory or unfairly prejudicial” is Thomas v H W Thomas Ltd (1984), where Richardson J held that the expressions are not distinct alternatives but overlap, each helping to explain the other (Richardson J, Thomas v H W Thomas Ltd). The Court considered that it was not necessary for a petitioner to prove a lack of probity or want of good faith towards him or her on the part of those in control of th ...