When board control is contested, disputes can move from the boardroom to court within days, and the window to respond is often measured in hours. Private equity (PE) sponsors operating in Australia need to understand how quickly courts are prepared to intervene where governance mechanics are used to block a board change or delay a shareholder vote. That was a recurring feature of 2025, and recent Federal and Supreme Court decisions point to the same direction in 2026. Courts have moved quickly to keep companies functioning, restrain steps used to prevent change, and grant targeted relief where control moves undermine the agreed bargain. In this article, Trevor Withane draws on recent 2025 judgments to show how these disputes unfold in practice and to set out a practical playbook for sponsors.
Key Takeaways
- In sponsor-controlled governance disputes, timing often dictates outcomes. The window to seek interim relief (or respond to it) can be short. Early advice helps you choose the right procedural path and avoid steps that are hard to unwind.
- Meeting powers, quorum settings, adjournments, administration steps and capital actions will be assessed by reference to proper purpose and practical effect. If the step is being used to delay a vote or shift control during a dispute, it is more likely to attract scrutiny.
- Even where steps are within the documents, they can still ground oppression relief if they produce an objectively unfair outcome in context. Remedies can be framed to address the commercial reality of the structure, not just the share register.
Boardroom deadlocks in PE-backed companies
Deadlock is a recurring feature of sponsor-controlled holding companies and management platforms, particularly where ownership is split 50/50 or where veto and quorum settings give each side an effective block. Where one side is using those settings to prevent action, the immediate task is to restore basic functionality so a meeting can proceed, members can vote, and the outcome can be implemented. In the recent judgments, two statutory mechanisms have been central.
The first is a court-ordered meeting under section 249G of the Corporations Act 2001 (Cth) (Act), available where it is impracticable to call the meeting in any other way. In In the matter of Heartland Group Pty Ltd [2025] NSWSC 367 (Heartland), Heartland Group Pty Ltd had two corporate members, holding unequal interests. The constitution required two members to be present to form a quorum. The majority member called an extraordinary general meeting to put resolutions to the vote. The minority member could not attend because it was deadlocked internally and could not appoint a corporate representative. Any meeting would therefore be inquorate and would fail before any vote could occur. The Court found it impracticable to call the meeting in the ordinary way and made orders under section 249G of the Act, with supporting directions under section 1319, so that the majority member’s representative alone would constitute a quorum.
A section 249G application requires evidence that calling the meeting is impracticable – a threshold courts have interpreted broadly to include not only impossibility but also significant inconvenience. The material should explain why quorum cannot be achieved, identify the resolutions that must be put to members (often director appointment or removal), and propose workable directions that remove the technical obstacle without determining the underlying dispute.
The second mechanism is a member-convened meeting under section 249F of the Act, commonly used where a board change must occur promptly and the existing board resists the change. In In the matter of Keybridge Capital Limited [2025] NSWSC 240 (Keybridge), a shareholder convened a ‘section 249F meeting’ to remove and replace directors. Before the vote could occur, the chair purported to adjourn the meeting without fixing a date. The Court held the adjournment was not effective under the company’s constitution and, in any event, any adjournment power must be exercised in good faith for a proper purpose. The meeting continued with an alternative chair, and the resolutions were passed.
Where a shareholder has called a ‘section 249F meeting’ to change the board and the chair purports to adjourn to prevent the vote, the issue becomes process and evidence. The meeting should only continue if it can do so lawfully under the company constitution and the Act. Votes should be recorded clearly, often with an independent observer, and urgent declaratory relief should be sought to confirm the validity of the meeting and the resolutions so the outcome can be implemented. It goes without saying that these disputes move quickly and require early legal advice.
Both decisions reflect the same approach. Courts focus on restoring workability and protecting the ability of members to vote where governance has stalled. The immediate objective is to secure a vote that can be implemented, and then deal with any wider dispute on a stable governance footing.
Breach of directors’ duties affecting sponsor value
Director conduct that affects governance process or control can affect sponsor value quickly, and sponsors usually have to act through the board to implement or protect a control position. The risk tends to arise when board powers are used during a live dispute to shift control or economics. It cannot be overstated how often the outcome turns on what was recorded at the time, including the basis for the steps taken and whether reasonable alternatives were considered. In the recent judgments, three patterns have been central to how courts assess these challenged control steps.
First, meeting control used to delay or prevent a shareholder vote. As Keybridge shows, courts will treat adjournment and other meeting powers as facilitative, not tactical. Where a chair seeks to stop a vote without a proper basis under the company’s constitution, or exercises an adjournment power for an improper purpose, the step is exposed. Keybridge also highlights the same risk with voluntary administration. Even where directors can point to material supporting an insolvency opinion, administration should not be used to defeat shareholder decision-making. Where an appointment is made for an extraneous purpose and that purpose is causative, it may be liable to be set aside.
The immediate focus must be the contemporaneous record. Where a step is time-critical, the justification should be capable of being explained simply and consistently in the contemporaneous material.
Second, related-party conflicts handled without a defensible process. In WIJOAV Services Pty Ltd v Goldstone Private Equity Pty Ltd [2025] FCA 622 (Goldstone), the dispute concerned a proposal to award a significant insurance broking mandate at a portfolio company to a business associated with a principal’s family. Another principal pressed for a merit-based process, independent input and appropriate disclosure. The subsequent steps to remove her from her executive role and restructure management control were found to lack a proper basis and, in substance, to amount to oppression. Related-party transactions require documented disclosure of conflicts and a decision-making process that can be defended by reference to contemporaneous records. For public companies, Chapter 2E may require member approval; in private companies, shareholder agreements often impose equivalent obligations. Depending on the facts, that may include market testing or comparators and independent input. Steps taken to sideline a nominee or executive who is raising process concerns in response to a conflict are likely to be tested closely.
Third, dilution implemented for a collateral purpose. In Scott v Aulich, in the matter of Aulich Civil Law Pty Ltd (in liq) [2025] FCA 1329 (Aulich), the dispute concerned share issues at nominal value where internal financials suggested substantial net assets and where funds were effectively recycled within the group. The plaintiff did not participate in the issues and was diluted. The Court found the share issues were directed to diluting the plaintiff rather than meeting genuine funding needs. For sponsors considering capital infusions, the guardrails are familiar. Alternatives such as shareholder loans should be considered. Any issue should be structured on commercially supportable terms, commonly pro rata, with sufficient information for non-executive shareholders to assess the offer. Nominal pricing and circular funding structures will invite challenge.
Across these scenarios, the practical themes are consistent. Record the purpose at the time and ensure it aligns with the step taken. Manage conflicts through a documented process capable of explanation on the evidence. Ensure capital structure decisions are anchored in objective financial material and a clear funding rationale. And finally, where a dispute is live, assume decisions taken quickly will later be assessed by reference to what was documented, not what is said after the event.
Using shareholder oppression remedies
Oppression is often the main remedial pathway for a shareholder who is being shut out when relationships break down, and control steps shift the position that shareholder could reasonably expect under the deal. It is usually brought by the minority (or the excluded investor) against the company and those controlling its affairs. Section 232 permits the Court to intervene where the company’s affairs are conducted in a manner that is oppressive, unfairly prejudicial, or unfairly discriminatory to a member (whether in that capacity or otherwise).
In Goldstone, the Court accepted that oppression can apply even where the relevant steps are formally effective under the documents. The structure involved two management companies held 50/50, controlling the General Partner (GP) and manager functions for limited partnerships holding portfolio investments. Following a governance dispute, steps were taken to replace the incumbent GP and manager with new entities and to exclude the other principal from management. Although the resolutions were effective on their face, the Court held the overall conduct was oppressive in its effect. For sponsors, the point is the scope of relief. Orders under section 233 can extend beyond the shareholding position where company control is being used to affect the economic position across the wider structure. The Court ordered a buy-out covering both the shares in the management companies and the associated partnership economic interests, recognising that those interests were inextricably tied to company control and that comprehensive relief was necessary to prevent ongoing unfairness.
Goldstone is also a useful guide to remedy selection. The direction of a buy-out is not automatic, and the Court will adopt the order that is workable in the circumstances, including by reference to capacity to complete promptly and the need to avoid ongoing paralysis in portfolio decision-making. The Court also restrained enforcement of non-compete provisions where doing so would add to the unfairness of an exclusion from management.
Aulich illustrates a different aspect of oppression relief where company-level remedies are not workable. The conduct involved nominal-value share issues that diluted a minority interest without a genuine commercial justification. Insolvency meant that remedies such as unwinding the issues were unlikely to provide practical relief. The Court nevertheless fashioned a compensatory remedy to address the diminution in value of the shareholder’s interest, including interest. The practical point is that oppression relief can still produce a meaningful outcome where the company is distressed and conventional structural remedies are not available.
Taken together, the cases reinforce a consistent theme. The inquiry is whether, assessed objectively, the conduct is commercially unfair in context. Excluding an equal participant from management in a quasi-partnership will often be oppressive unless there is a clear pathway to a fair exit at a properly determined value, typically supported by an independent valuation. Formal validity under the constituent documents is not a defence where the effect is to remove bargained-for participation and economics without a workable exit.
Emergency court relief: injunctions
Interim relief is often the decisive first step in a governance dispute. Where board control, deal execution or fund economics are at risk, courts will grant injunctions to preserve the position until the merits can be determined.
Goldstone is a clear example. Shortly after proceedings were commenced, the Court restrained steps to remove or replace the plaintiff as a director of the management companies and restrained reliance on the purported removal. Those orders were continued while the matter moved to an expedited hearing. The practical point is speed and focus. The evidence should stay directed to what matters for interim relief, namely the immediate control consequences if the step is not restrained and why holding the line is the least disruptive course pending trial.
Keybridge is another. Interlocutory relief restrained the company from putting a proposed capital raising resolution to shareholders, on the basis that it would have been difficult to unwind and that alternatives were available. The later merits decision reinforced that meeting mechanics cannot be used to defeat members’ statutory rights. In practice, these tools work together. They restrain the immediate step that would lock in a control outcome while preserving a clean path to a meeting and vote.
Although each case turns on its facts, Goldstone and Keybridge show the same point. Injunctions are a practical tool to stop one side achieving a control outcome by speed, before the Court can determine the merits. For sponsors and boards seeking relief, the task is to identify the specific step that will cause irreversible change, explain the immediate control or value impact, and put forward a workable hold position pending trial. The point also cuts the other way. Where an injunction threat is being used as leverage, these cases are a reminder that the Court will look closely at whether there is a real risk of irreparable harm and whether the balance of convenience supports restraint, rather than simply endorsing a tactical ‘freeze’.
Why Should You Engage Ironbridge Legal for Governance Disputes?
Private equity governance disputes move quickly because control is value, and value can evaporate overnight if control is lost. When a board change is blocked, a vote is delayed, a conflict is weaponised, or a capital move shifts economics, the window to respond is often measured in days, not months. The practical question is rarely ‘who is right in principle.’ It is whether the next step can be implemented cleanly, defended on the contemporaneous record, and converted into a workable outcome that preserves asset value.
At Ironbridge Legal, we act for sponsors, shareholders, directors and senior stakeholders in governance disputes across holding company, management company and portfolio company structures. We are familiar with the tools courts use to keep corporate decision-making working, and with the evidentiary and strategic thresholds that shape urgent relief, meeting disputes, directors’ duty claims and oppression remedies. Our approach is focused and commercial. We help clients move early, protect control positions, and build the record so the step taken can be defended where it matters most: on the evidence.
If you are facing a live governance issue, or want to de-risk a board or shareholder process before it escalates, we can assist quickly and discreetly.
Further Information
For further information about portfolio company governance disputes in private equity, urgent court relief (including injunctions), court-ordered and member-convened meetings under the Corporations Act, directors’ duties in contested control situations, and shareholder oppression remedies, please contact the author of this article:
Trevor Withane
FOUNDER & MANAGING PARTNER
