When Control Becomes Unfair: Lessons from Hillam v Ample Source

Home › Case Studies › Case Law Library › Commercial & Business Cases › Directors & Shareholders › Hillam v Ample Source International Ltd (No 2) [2012] FCAFC 73

Published: 15 November 2025 | Reviewed: 15 November 2025
(3-minute read)

Case Summary - Facts, Reasoning, Principles

Hillam v Ample Source International Ltd (No 2) [2012] FCAFC 73 is now a leading authority on oppression under ss 232 and 233 of the Corporations Act. The Full Court confirmed that the core test is commercial unfairness - an objective standard assessed through the eyes of the reasonable commercial bystander.

The dispute involved Bonython Metals Group (BMG), a company controlled by Mr John Hillam and Ms Teeranukul. They held the majority of shares and dominated management. Their related entities, Wentworth Metal Group and CFM Media, were controlled by the same individuals. Funds flowed between these companies in ways that benefited the controllers and burdened the minority shareholder, Ample Source.

The trial judge found that BMG’s affairs were conducted oppressively, including:

• conflicted related-party dealings

• failure to honour obligations

• poor transparency around payments and fund flows

• breakdown of trust and governance deadlock

The Full Court upheld the primary judge’s conclusion that the conduct was commercially unfair, and crucially, that winding up a solvent company may be appropriate when oppression is clear, entrenched, and unresolvable. While winding up should be approached with caution, it is not a “last resort.” The discretion turns on whether any lesser remedy can realistically restore fair dealing.

The message is unmistakable: where one party holds disproportionate power and uses it without proper checks, oppression can arise even if the company is solvent or the conduct is technically lawful.

Why This Judgment Still Matters Today

Hillam is less about technical corporate law and more about the enduring architecture of fairness.

Across businesses, partnerships, family companies, and joint ventures, power imbalances emerge when one person or group controls:

• the information

• the decision-making process

• the money

When that power is exercised without transparency or constraint, the weaker party may be left unable to prevent harmful decisions - even if they remain formally “in the room.”

The Full Court’s reasoning applies well beyond corporate oppression cases:

• Fairness is a function of structure.
  If one side controls the financial levers, the relationship becomes vulnerable.

• Conflicted roles demand external checks.
  Where individuals wear multiple hats, objective oversight becomes essential.

• The effect matters more than the motive.
  A party may genuinely believe they are acting properly, yet still cause commercial unfairness.

This maps directly onto modern client–professional relationships. A layperson, without legal expertise, is structurally vulnerable when the professional controls information and funds. The lesson is timeless: power must be balanced by systems, not assumptions of goodwill.

How to Avoid the Same Trap - Escrow Safeguards as Structural Fairness

From Clean Law’s client-protection model, the safeguard most closely mirroring Hillam is Escrow Safeguards (Rank #2).

Just as minority shareholders in Hillam were vulnerable because the majority controlled fund flows and decision-making, clients in traditional legal practice face a similar structural imbalance: their funds sit in the lawyer’s trust account, and the lawyer decides when to draw on them.

Even well-intentioned lawyers can unintentionally create pressure or uncertainty when they hold sole control of client money. The imbalance is systemic, not personal.

Escrow rebalances that power:

• Nothing moves without the client’s informed approval.
  The client remains the primary decision-maker over their own money.

• Two-lawyer oversight ensures clarity and fairness.
  One lawyer advocates; the other oversees process and funds.

• Conflicted incentives are structurally removed.
  No single actor can draw funds, expand scope, or escalate costs without client consent.

This is the governance-version of oppression protection: checks, transparency, and a process that cannot harm the weaker party by design.

Hillam teaches that power without constraint invites unfairness. Clean Law operationalises that lesson through escrow - a system built so clients never have to “trust blindly,” but instead can trust the structure.

A Reflective Closing

The Full Court reminds us that fairness is not a sentiment. It is a structure. Whether in corporate governance or legal services, the safest relationships give each party clarity, transparency, and shared control.

Escrow safeguards are the modern application of this principle - a way to ensure that, even in moments of complexity or conflict, power remains balanced by process.

To understand how Clean Law applies the structural fairness principles reinforced in Hillam, explore how escrow safeguards give clients transparent, shared control over every financial step.

Request a Confidential Consultation
If you’d like guidance on an oppression dispute or want to understand how these safeguards can apply to your situation, you can request a confidential call here.

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.