By Elton Law Group
A 50/50 company with no shareholders agreement has no exit, and the court will not build one for you. That is the blunt lesson of the Federal Court’s decision in Hagakure Limited v Cassisi [2026] FCA 1235. For founders, JV partners and private investors in owner-operated businesses, this case is the nightmare scenario — and every step of it traces back to one document that was promised, postponed, and never signed.
For small business owners and company directors, this deserves more than a passing glance. The strategy signals where ASIC will direct its attention over the coming years, both in the help it offers and in the conduct it intends to pursue.
What Happened
- Two friends spent over a decade building “vbaZen”, a promising Excel add-in. Toni Cassisi wrote the code; Aldo Coronelli funded it, paying more than $1.6 million in development invoices from 2016 under an informal “Phase 1” arrangement: Cassisi’s company invoiced, Coronelli paid.
- A short 2020 letter agreement promised “Phase 2”: a 50/50 company owning the IP, and a shareholders agreement to follow. On the funder’s understanding, entering Phase 2 meant the invoicing would stop: the two would now be profit sharing partners, not customer and contractor. The letter didn’t say when Phase 2 began or what happened to payment in the meantime, and that gap became the point of contention between the parties.
- The company was incorporated in 2023, owned and directed 50/50, so nothing could happen without both agreeing. Though, a shareholders agreement was never put in place.
- In March 2024 the pair fell out over the launch date. Coronelli refused to pay the latest invoice, on his privately held view that Phase 2 had begun; his solicitors sent a letter the judge later called “a declaration of hostilities”. Cassisi cut off Coronelli’s access to the software repository.
- Coronelli sued for oppression under s 232 of the Corporations Act, seeking a forced buy-out of his half (agreed company value: $1.7m). He lost, against a self-represented opponent, and now holds half of a company that cannot make a single decision. To date, the product is yet to launch.
Why the Oppression Claim Failed
Being locked out of the company’s core asset sounds like textbook oppression. But the Court said no: fairness is judged in context, and your own conduct is part of the context. The lock-out came after Coronelli refused to pay an invoice for work already done, on a view he had never communicated, and after his lawyers had opened hostilities. In the eyes of the commercial bystander, the developer’s response wasn’t relevantly “unfair”, and the judge said he would have refused relief anyway given Coronelli’s own conduct. (The Court expressly didn’t decide who was right about the invoice or whether Phase 2 had commenced.)
The Real Lesson: “We’ll Do the Shareholders Agreement Later” Is the Trap
The 2020 letter literally promised a shareholders agreement. Three years and one incorporated company later, it still didn’t exist when the relationship broke. Owners do this constantly: the venture feels urgent, the relationship feels solid, and the “governance paperwork” goes to the bottom of the list.
Look at what that one document would have answered, because each question became a front in the litigation:
- When does the arrangement change, and who gets paid what? The whole dispute ignited over whether “Phase 2” had begun and whether invoices were still payable. A shareholders agreement defines remuneration and the triggers for change. No document, no answer, so each side reached for the version that suited him, to the exclusion of the other.
- What happens on deadlock? A standard 50/50 agreement contains a tiebreaker: escalation, mediation, a casting mechanism, or a buy-sell clause. Without one, a falling-out froze the company completely: no decisions and, by extension, no launch.
- How does anyone get out? Buy-sell and first-refusal clauses are the exit. Without them, Coronelli’s only path to a buy-out was convincing a court the lock-out was “oppression”, and the oppression remedy is not a deadlock-breaker. The court will not write the exit your documents left out. The Court has flagged that a winding up may follow, where a liquidator would sell the assets and both sides would take what’s left.
- Who can access the key assets? Access rights, escrow and admin controls are standard schedule items. Here they lived in one party’s hands, on trust.
Every dollar spent on this litigation traces back to the absence of roughly five pages of documentation that would have taken 2 to 3 hours of thinking and discussion, to put in place.
Two Supporting Lessons
Legal ownership is not control.
The company owned the IP on paper. The developer held the repository keys. The funder had flagged this risk himself back in 2015 (“I operate on trust but, if something happened, I wouldn’t know what to do”) and never fixed it: no escrow, no documented access rights, no admin control. If you are funding a technical co-founder, paper title without practical access is half a right.
Your paper trail can sink your own case.
Coronelli argued Phase 2 had begun, meaning no more invoices were payable. But he had paid roughly $770,000 of invoices marked “Phase 1” in the years after signing the 2020 agreement, right up to the dispute. The judge used his own conduct as the best evidence of what the parties actually understood. With no signed rulebook, how you behaved becomes the rulebook. The court will read into your actions and conduct, not what you privately believed.
The Bottom Line
The most expensive document in this case is the one that was never signed. If you own a private company with multiple shareholders, a shareholders agreement is a fundamental necessity: it’s the payment terms, the tiebreaker, the access rights and the exit, and it’s your best possible insurance policy should the founders decide to go in different directions.
How Elton Law can help
Elton Law Group advises commercial landlords and tenants on leasing transactions and disputes, from drafting agreements for lease through to termination rights and their enforcement. If you are negotiating conditions like these, or considering acting on one, we can help you get the position right before it is tested.
This article is general information only and is not legal advice. It is based on the published judgment as at 10 September 2026. You should obtain advice on your own circumstances before acting.