Accountant liability in shareholder oppression cases

The Corporations Act 2001 (Cth) (Corporations Act) imposes liability on directors where they engage in shareholder oppression.^[1]  While this is a director’s duty, third parties may also be held liable for the actions of a director or company where they were involved in the oppressive conduct.  Internal and external accountants of a company can and have been held liable, and been involved, in several cases.

Shareholder oppression and accessorial liability

Section 232 of the Corporations Act states that the Court may make an order under section 233 of the Corporations Act where:

“(a)  the conduct of a company’s affairs; or

 (b)  an actual or proposed act or omission by or on behalf of a company; or

 (c)  a resolution, or a proposed resolution, of members or a class of members of a company;

is either:

 (d)  contrary to the interests of the members as a whole; or

 (e)  oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.”^[2]

Section 233 of the Corporations Act provides the Court with the power to make a range of orders where shareholder oppression is found.  The orders that that Court may make are not limited but are at the Court’s discretion, and may include a winding up, modification of the company’s constitution, or that the oppressor purchase that shares of oppressed.^[3]

Section 79 of the Corporations Act describes accessorial liability where an individual has been involved in a contravention, stating that a person will be involved in the contravention if they:

“(a)  has aided, abetted, counselled or procured the contravention; or

 (b)  has induced, whether by threats or promises or otherwise, the contravention; or

 (c)  has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or

 (d)  has conspired with others to effect the contravention.“^[4]

This section could be used, where an external or internal accountant has been involved in the contravention, resulting in the Court being able to make an order against them under section 233.  There are limited instances where accountants have been held liable as accessories.  However, their conduct and their relationship of proximity can generally be used by oppressors to the detriment of the oppressed.

Case law involving external accountant

Boyded Industries Pty Ltd & Anor v Heartland One Pty Ltd & Ors [2025] NSWSC 1344

In Boyded Industries Pty Ltd & Anor v Heartland One Pty Ltd & Ors [2025] NSWSC 1344 (Boyded Industries v Heartland One), shareholder oppression was found due to an invalid trustee appointment.^[5]  The Defendant had exchanged emails and documents, and corresponded with, the external accountant frequently throughout the process.^[6]  However, the accountants would have been unaware of the oppressive conduct engaged in, despite being a party to the correspondence.  They were not held liable in this instance.

In the matter of Tzavaras & Sons Pty Ltd [2022] NSWSC 359

In the case of In the matter of Tzavaras & Sons Pty Ltd [2022] NSWSC 359 (Tzavaras & Sons), the Plaintiff claimed that they were excluded from the management and affairs of a company.  In this case, the director engaging in oppressive conduct had a personal connection to both the internal and external accounts which had assisted in the affairs.  The director relied on advice of accountants to prepare meeting minutes, accounts, and tax returns.^[7]  The Court determined that much of the defendant’s conduct was oppressive under section 232, and that an order under section 233 could be made.  However, given the accountants were not greatly involved, and were likely unaware of the director’s intentions, they were held not to be liable.

Case law involving internal accountants

In the matter of Mosman & Co Pty Limited [2019] NSWSC 1155

In the case of In the matter of Mosman & Co Pty Limited [2019] NSWSC 1155 (Mosman & Co), the company’s accountant was also the personal accountant of a majority shareholder.^[8]  In this case, the accountant and a solicitor were to collate documents and inform the proposed sale of an office.^[9]

While documents were requested to be provided in advance of a company meeting, the majority shareholder maintained that they would only be provided at the meeting.  Both the accountant and majority shareholder did not provide all the requested documents to the minority shareholder.  The relationship between the accountant and majority shareholder led the minority shareholder to feel excluded.^[10]

A failure to allow the minority shareholder to have a solicitor present at meetings, an inability of the majority shareholder and accountant to provide documentation and information to the minority shareholder so that they may make an informed choice, was considered to be oppressive.

An order was sought under section 233, considering the liability of the company and its accountant in addition to the shareholder engaging in oppressive conduct.

Re Central Stone [2024] VSC 822

In the case of Re Central Stone [2024] VSC 822 (Re Central Stone), a company’s accountant was not held liable as an accessory.  However, the oppressive conduct of a director was evident through correspondence and exchanges with the company accountant.^[11]

The relevant directors engaged with the company’s accountant to obtain advice surrounding the financial position of the company and the sale of assets.^[12]  While the accountant was a party to the relevant conversations and documentation in which the alleged conduct existed, they were not involved in the actual oppression.^[13]

Links and further references

Legislation

Corporations Act 2001 (Cth)

Cases

Boyded Industries Pty Ltd & Anor v Heartland One Pty Ltd & Ors [2025] NSWSC 1344

In the matter of Mosman & Co Pty Limited [2019] NSWSC 1155

In the matter of Tzavaras & Sons Pty Ltd [2022] NSWSC 359

Re Central Stone [2024] VSC 822

Further information

If you need advice on shareholder oppression and potential liability of an accountant as an accessory, contact us for a confidential and obligation‑free discussion.

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

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[1] Corporations Act 2001 (Cth) s 232.

[2] Corporations Act 2001 (Cth) s 232.

[3] Corporations Act 2001 (Cth) s 233.

[4] Corporations Act 2001 (Cth) s 79.

[5] Boyded Industries Pty Ltd & Anor v Heartland One Pty Ltd & Ors [2025] NSWSC 1344 at [648].

[6] Boyded Industries Pty Ltd & Anor v Heartland One Pty Ltd & Ors [2025] NSWSC 1344 at [258].

[7] In the matter of Tzavaras & Sons Pty Ltd [2022] NSWSC 359 at [144].

[8] In the matter of Mosman & Co Pty Limited [2019] NSWSC 1155 at [25].

[9] In the matter of Mosman & Co Pty Limited [2019] NSWSC 1155 at [26].

[10] In the matter of Mosman & Co Pty Limited [2019] NSWSC 1155 at [55].

[11] Re Central Stone [2024] VSC 822 at [506].

[12] Re Central Stone [2024] VSC 822 at [166].

[13] Re Central Stone [2024] VSC 822 at [227].

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