The appellants, holders of convertible debentures in Rio Algom Limited, brought an oppression claim after a successful takeover bid by Billiton plc resulted in the delisting of Rio Algom's shares, rendering the debentures' conversion feature valueless.
The application judge dismissed the claim, finding that the trust indenture governing the debentures provided for the event of delisting and limited the debentureholders' remedy to redemption at par.
The Court of Appeal upheld the decision, agreeing that the debentureholders had no reasonable expectation of further compensation and that the indenture's 'no-action' clause precluded individual debentureholders from bringing an oppression action against the issuer or third parties.
