When Power Drifts, Fairness Fades: The Enduring Lessons of Fexuto v Bosnjak
Home › Case Studies › Case Law Library › Commercial & Business Cases › Shareholder & Partnership › Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672 (NSWCA)
Published: 16 November 2025 | Reviewed: 16 November 2025
(3-minute read)
Case Summary: Facts, Reasoning, Principles
Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672 (NSWCA) remains one of Australia’s clearest illustrations of what happens when family-run businesses outgrow family-style governance.
Bosnjak Holdings was built over decades by three brothers, Bob, Jim and the late John, through the Westbus network. After the patriarch’s death, tensions hardened. Two key themes emerged: exclusion from management and alleged misuse of corporate opportunities.
The Court of Appeal upheld findings of oppressive conduct under the then-s260 Corporations Law. Key elements included:
Exclusion from management: Bob Bosnjak, representing minority shareholder Fexuto, was increasingly sidelined from decision-making. The court accepted there had been an expectation, rooted in decades of practice, that family members would participate in management.
Breach of fiduciary duty: Jim and Carol Bosnjak pursued two opportunities, Transcard and the National Bus Company tender in Melbourne, without fully informed consent from the company or Bob. These opportunities belonged to the company. Without transparent disclosure and consent, the directors could not “appropriate” them personally.
Lack of informed consent: The court held that consent requires transparency, clarity and full information. Brasher acceptance or silence is not consent; frustration or family conflict does not displace fiduciary standards.
Ultimately, the court upheld orders requiring the majority to purchase Fexuto’s shares at fair value, along with account-of-profits orders for the diverted opportunities.
Three principles rise above the detail:
Directors must not seize corporate opportunities without fully informed consent.
Minority shareholders cannot be sidelined simply because they are inconvenient.
Family dynamics do not dilute corporate law obligations.
These principles endure because power usually shifts quietly before it shifts overtly.
Why This Judgment Still Matters Today
Whether you lead a family company, a scale-up, or a large private enterprise, this case remains a beacon for one reason: power concentrates where information concentrates.
In modern business settings, “oppression” rarely shows up as drama. It appears as:
not being copied into a key email
being told “the tender is progressing fine” without detail
side ventures being developed “off-books”
major opportunities being carved out by those already holding the most influence
The risk is not just legal. Exclusion fractures trust, slows decision-making, and creates a culture where leaders feel permitted to take liberties “because they can”.
This case reminds executives that fair process is commercial armour. In Clean Law’s own positioning, empowered clients and leaders make better decisions when information is shared early, clearly and without hidden incentives.
Oppression is ultimately a governance outcome, not a personality outcome. And it often begins with a silence that someone assumed would go unnoticed.
How to Avoid the Same Trap - Through Cost Safety
From all client protection principles available, the one with the highest ranking, and most relevant here, is Cost Safety: One-Path Funding.
Why? Because disputes like Fexuto escalate financially long before they escalate legally. When shareholders or directors feel disempowered, they fear the financial cost of asserting their rights. In family and private companies, that fear becomes paralysis.
Cost Safety directly addresses this:
Clients avoid double payment for both “trial prep” and “settlement negotiation”.
Strategic decisions become clearer because the financial risk is known upfront.
It restores the balance of power, no party can simply “outspend” the other.
This principle operationalises Clean Law’s ethos: decisions should be made on merit, not fear of legal bills. The case teaches that lack of transparency creates both legal risk and financial escalation. Cost Safety neutralises that escalation by design.
Reflection
Fexuto v Bosnjak reminds us that fairness does not erode in a single moment, it erodes in increments: a withheld document, an unexplained opportunity, a director gradually removed from the table. Governance is protection not only for companies, but for relationships.
If you want to protect your business, and your peace of mind, the first safeguard is ensuring the cost of protecting your rights is safe, simple, and single-path.
Discover how Clean Law’s One-Path Funding model removes the financial risk of asserting your rights before problems escalate.
Request a Confidential Call
If this case raises questions about your own governance or shareholder dynamics, speak confidentially with a Clean Law lawyer today.
By Nicky Wang
Principal Solicitor
Legal Liaison Ltd (trading as Clean Law)
Prepared in accordance with public-interest governance,
annual Law Society trust-account audits, and ACNC-reported standards.
Disclaimer: This page is intended to provide general information only and is not legal advice. The contents may not reflect the most current legal developments and do not take into account your individual circumstances. You should not act or refrain from acting on the basis of this information without obtaining legal advice tailored to your situation.
