Introduction
Director disputes are a serious threat to corporate stability. Whether you’re running a start-up or a mature enterprise in Queensland, disagreements between directors can stall decision-making, damage investor confidence, and lead to costly legal consequences. In this guide, we’ll explain the common causes of director disputes, the legal framework that applies, and the steps a company can take to manage and resolve them.
What is a Director Dispute?
A director dispute arises when members of a company’s board clash over decisions, conduct, or their respective roles. These disputes often involve:
- Strategic disagreements
- Allegations of misconduct or breach of duty
- Financial mismanagement
- Unequal contribution or effort
- Conflicts of interest
Common Legal Grounds for Dispute
Under the Corporations Act 2001 (Cth), directors must:
- Act in good faith
- Exercise care and diligence
- Avoid misuse of position and information
- Prevent insolvent trading
Breach of these duties often gives rise to claims for shareholder oppression, derivative actions, or applications for the removal of a director.
Legal Remedies for Director Disputes
- Mediation or Arbitration – A dispute lawyer may help facilitate alternative dispute resolution before court intervention.
- Deadlock Resolution Mechanisms – Shareholders agreements often contain tie-breaker clauses.
- Injunctions – Courts can issue orders restraining a director’s actions if misconduct is alleged.
- Oppression Claims – Minority shareholders or directors who are being sidelined may seek relief under section 232 of the Corporations Act.
- Buyout or Exit – Negotiating the exit of a director through share buybacks or sale.
When to Speak to a Director Dispute Lawyer
Acting early can save your company. A specialist director dispute lawyer can help you negotiate, document board resolutions, draft enforceable shareholder agreements, or apply to court if necessary.
Need Help?
If you’re facing a director dispute in Brisbane, the Gold Coast, or anywhere in Queensland, contact Boss Lawyers for strategic, commercially-focused legal advice.
