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Selected cases

Federal Court of Australia · [2026] FCA 361

Hurburgh v Hurburgh

A Federal Court family company dispute about shareholder oppression, control of company affairs and a buy-out remedy.

Federal Court of Australia31 Mar 2026

Plain-English explainers, not legal advice. Check the linked official source before you rely on a specific section, and get advice for your situation.

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Quick read

  • Family companies need governance even when everyone inherited the shares.
  • A Federal Court family company dispute about shareholder oppression, control of company affairs and a buy-out remedy.

Use this to check

  • Inherited shares can still create real minority shareholder rights.
  • A family company should document property use, related-party benefits and board decisions.
  • A breakdown in personal relationships does not remove directors' company-law obligations.

Decision snapshot

  1. 1

    What happened

    • Richard Pitt & Sons Pty Ltd was a long-standing family company connected with farming properties and livestock operations.
    • After Richard Pitt died, the plaintiff, her mother and her brother each held one third of the shares through an in specie distribution under his will.
    • The mother became sole director.
    • The relationship between the family shareholders broke down, and the plaintiff alleged she had been treated unfairly in the conduct of the company's affairs.
  2. 2

    What the court had to decide

    • The Federal Court had to decide whether the conduct of Richard Pitt & Sons Pty Ltd was oppressive or unfairly prejudicial under section 232 of the Corporations Act, whether remedies should be ordered under section 233, and whether the company should instead be wound up on just and equitable grounds.
  3. 3

    What the court decided

    • The Court found oppressive conduct had been made out.
    • The judgment indicated a buy-out remedy, with the company to buy out the plaintiff's shares and reduce share capital accordingly, rather than simply winding up the company.
    • The parties were directed to provide minutes of orders and short costs submissions to give effect to the reasons.

Practical impact

Practical read

  • Family companies need governance even when everyone inherited the shares.
  • If one shareholder controls the board, company assets and related farming or trading operations, exclusion and poor information flow can become oppressive conduct.

Useful next steps

  • Inherited shares can still create real minority shareholder rights.
  • A family company should document property use, related-party benefits and board decisions.
  • A breakdown in personal relationships does not remove directors' company-law obligations.
  • A buy-out remedy may be more practical than winding up a trading or asset-holding company.
  • Keep shareholder information rights clear even where all shareholders are family members.

Practical read

This is the kind of company dispute that many family businesses recognise. The company was not a public market vehicle. It held property connected with a family farming operation, the shareholders were relatives, and the practical problem was control: who made decisions, who received information, who benefited from the assets, and whether one shareholder could fairly be left stuck in the company.

The Court did not treat the family background as a reason to ignore company law. Once shares are held in a company, directors and controllers still have to manage the company's affairs in a way that is not oppressive, unfairly prejudicial or unfairly discriminatory to a shareholder.

For small businesses, this case is a reminder that a family company still needs boring governance. Minutes, access to records, clear rent or use arrangements for company property, related-party transaction records and a practical exit mechanism matter most when relationships are already strained. A buy-out process can be less destructive than years of deadlock, but it is much easier if the valuation and exit pathway have been planned before the family dispute starts.

Checks to run

Key points

  • Keep shareholder information rights clear even where all shareholders are family members.
  • Record rent, licences and business use of company property in writing.
  • Use board minutes to show why major decisions were made and who benefited.
  • Put a deadlock or buy-sell pathway in place before relationships break down.
  • Treat estate planning and company governance as connected but separate workstreams.

Key takeaways

  • Inherited shares can still create real minority shareholder rights.
  • A family company should document property use, related-party benefits and board decisions.
  • A breakdown in personal relationships does not remove directors' company-law obligations.
  • A buy-out remedy may be more practical than winding up a trading or asset-holding company.

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