A Director’s Right to Inspect Company Books: Section 198F and Section 290 

A director who is denied access to company records in Victoria may have statutory and general law rights to inspect them, including during a boardroom dispute or after a receiver is appointed. A director’s right to inspect company books in Australia may be critical where records are needed to discharge ongoing duties, assess the company’s position or prepare for actual or anticipated litigation. 

Section 290 of the Corporations Act 2001 (Cth) gives directors access to the company’s financial records at all reasonable times. Separately, access under section 198F for legal proceedings may allow current directors, and certain former directors who left office within the previous seven years, to inspect company books where they are or may become a party to proceedings. 

These rights are limited. The purpose of the request, the scope of the documents, confidentiality obligations, and any external administration may affect access. A board’s refusal to provide access or resistance from a receiver may require formal correspondence or an application to the court under section 1303. Oswal v Burrup Holdings Ltd [2011] FCA 609 illustrates how access to company records during receivership may be permitted subject to practical safeguards. 

What Rights Do Directors Have to Inspect Company Books Under Sections 198F and 290? 

The principal statutory rights are found in sections 198F and 290 of the Corporations Act 2001 (Cth). Although both provisions concern access to company records, they apply to distinct categories of material and serve different purposes. 

Section 198F permits a current director to inspect company books, other than financial records, at all reasonable times for the purposes of legal proceedings. The proceeding must be one to which the director is already a party, proposes in good faith to commence, or believes may be brought against them. Access under section 198F for legal proceedings includes a right to make copies for them. It also extends to former directors who left office within the previous seven years, although a former director may inspect financial records as well as other company books. 

Section 290 separately gives a current director the right to inspect the company’s financial records at all reasonable times. These may include invoices, receipts, accounting entries, working papers, and documents needed to explain the company’s financial statements. The director may also apply for the Court to authorise another person, such as an accountant, to inspect and copy those records on the director’s behalf. 

These director-specific rights should be distinguished from shareholder access to company books under section 247A, which requires a member to apply to the court and establish that the inspection is sought for a proper purpose. 

In Tai-Ao Aluminium (Australia) Pty Ltd v Cordukes [2004] FCA 1488, the Federal Court confirmed the strength of a director’s statutory access to financial records. Ordinarily, the director is not required to establish a particular need or justify the request, although access may be restrained where there is evidence of an improper purpose. 

The position becomes more complex during external administration. In Oswal v Burrup Holdings Ltd [2011] FCA 609, the Federal Court considered a director’s inspection rights after receivers had been appointed. The appointment did not automatically extinguish access, but the Court could impose safeguards concerning confidentiality, privilege, timing, and the practical burden placed on the receivers. 

Where a company refuses a valid inspection request, section 1303 allows an application for an order compelling immediate inspection or requiring a copy to be supplied. The scope of the order will depend on the statutory right relied upon, the records sought and the purpose for which access is requested. 

How Do Courts Decide Whether a Director Should Receive Access to Company Books? 

What purpose must the director establish? 

The required purpose depends on the provision relied upon. For access under section 198F for legal proceedings, the director must connect the requested books to existing, proposed, or anticipated proceedings. A proposed proceeding must be contemplated in good faith, while a belief that proceedings may be brought against the director must be reasonable rather than speculative. 

Section 290 operates differently. A current director’s right to inspect financial records at reasonable times supports the director’s responsibility to understand the company’s financial position and discharge their duties. The director does not ordinarily need to prove a specific need before exercising access to financial records under section 290. However, evidence of an improper collateral purpose may influence whether relief is granted or whether conditions are imposed. 

How specific should the inspection request be? 

A request should identify the categories of records sought, the relevant period, and the statutory basis for access. An unfocused demand for every document held by the company may create disputes about relevance, burden, and confidentiality. 

The distinction between company books and financial records is important. Section 290 applies to financial records, while section 198F allows access to other company books for qualifying legal proceedings. A defined document schedule can help demonstrate that the request is proportionate and connected to the right being exercised. 

Can confidentiality or legal professional privilege restrict access? 

A statutory inspection right does not necessarily override legal professional privilege or confidentiality obligations owed to third parties. Courts may require privileged documents to be withheld, sensitive information to be redacted or disputed material to be reviewed before inspection. 

Protective measures may include limiting access to the director’s solicitors or accountants, requiring confidentiality undertakings and restricting how copies may be used. These safeguards allow inspection while protecting commercially sensitive material. 

Does receivership end a director’s inspection rights? 

The appointment of a receiver does not automatically extinguish a director’s statutory rights. However, access to company records during receivership must be managed consistently with the receiver’s control of company property and responsibilities to secured creditors. 

In Oswal v Burrup Holdings Ltd [2011] FCA 609, the Federal Court considered requests made after receivers and managers had been appointed. The decision shows that access may remain available, although its scope, timing, and manner may be controlled to minimise disruption and protect confidential or privileged material. 

When will a court intervene after the board refuses access? 

A board’s refusal to provide access should be assessed against the statutory provision invoked. If a valid request remains unsatisfied, the director may seek an order under section 1303 compelling inspection or requiring copies to be supplied. 

The court will consider whether the applicant is entitled to rely on the provision, whether the documents fall within its scope and whether any required litigation purpose has been established. Clear correspondence, a focused document schedule and evidence of refusal will assist the court in determining whether immediate access or a tailored inspection order is appropriate. 

What Practical Disputes Arise When a Director Is Denied Access to Company Books? 

Access disputes often arise after relations between directors deteriorate. One faction may change passwords, remove a director from accounting platforms, instruct staff not to provide documents or insist that every request be approved by the board. The excluded director may remain legally responsible for decisions made during that period, despite lacking the information needed to assess the company’s position or discharge ongoing duties. 

A board’s refusal to provide access should be addressed promptly and with precision. The request should distinguish financial records sought under section 290 from other company books required under section 198F, identify the relevant period, and propose a practical inspection process. Treating all company records as a single category can create avoidable disputes about scope, purpose, and confidentiality. 

Former directors may also require records after receiving allegations concerning insolvent trading, misleading conduct, breaches of duty, taxation liabilities or transactions approved while they held office. Section 198F is particularly important for former directors who left office within the previous seven years, provided the inspection is connected to qualifying legal proceedings. The practical issue is often whether each requested document category has a sufficient connection to the threatened, proposed, or existing claim. 

Further complications arise when receivers control the company’s records. Books may be spread across physical premises, servers, external advisers, and accounting systems, while receivers may raise concerns about disruption, retrieval costs, privilege, and commercially sensitive information. In Oswal v Burrup Holdings Ltd [2011] FCA 609, the Federal Court considered inspection rights during receivership and demonstrated that access to company records during receivership may remain available, subject to controls over timing, scope, confidentiality and copying. 

Disputes also commonly arise over whether solicitors, accountants or forensic experts may inspect the records, who must pay retrieval and hosting costs, and how privileged material will be reviewed. The records obtained may materially affect strategy in shareholder disputes, including whether an oppression claim, derivative proceeding or negotiated exit is the appropriate course. Section 290 permits a court to authorise another person to inspect financial records on a director’s behalf. 

Where cooperation has broken down, a focused protocol dealing with access arrangements, confidentiality undertakings, copying and cost allocation may narrow the dispute before an application to the court under section 1303 becomes necessary. 

What Should a Director Consider Before Seeking or Resisting Access to Company Books? 

Before pursuing access, the director should identify the legal basis for each category of records sought. A request for access under section 198F for legal proceedings should explain the relevant proceeding, the director’s connection to it, and why the identified books are required. A request for access to financial records under section 290 should separately define the accounting material sought and propose a reasonable time and method for inspection. 

The documentary record created before any court application will often be important. Correspondence should identify the applicant’s status as a current or former director, the relevant dates, the documents requested, and any previous attempts to obtain access. Where the applicant is one of the former directors who left office within the previous seven years, evidence of the resignation date and the anticipated or existing proceeding should be preserved. 

Requests should also be proportionate. Overly broad demands may encourage arguments about improper purpose, confidentiality, privilege, and administrative burden. A targeted document schedule, supported by a brief explanation of relevance, is more effective than a demand for all books and records. 

A company, board or receiver resisting access should avoid relying on a blanket refusal. The response should identify the records that can be produced, explain any legal or practical objection, and propose safeguards where appropriate. These may include staged production, solicitor-only access, confidentiality undertakings, redactions, or an agreed privilege review. 

If an application to the court under section 1303 becomes necessary, the quality of the earlier correspondence may affect both the scope of relief and costs. A workable inspection protocol prepared in advance can help the court resolve the dispute efficiently and reduce the risk of an order that is broader or more restrictive than either party intended. 

Frequently Asked Questions 

What Should a Director Do After Being Refused Access to Company Books? 

A director’s right to inspect company books depends on the records sought, the director’s status and the purpose of the request. Sections 198F and 290 of the Corporations Act 2001 (Cth) provide distinct access rights, while section 1303 may support court enforcement where a company, board or receiver refuses a valid request. Prompt attention to document scope, evidence, privilege, and practical inspection arrangements can materially affect the strength and cost of the matter. 

Pentana Stanton Lawyers advises directors, former directors, shareholders and companies on record-access disputes, boardroom conflict, and related corporate proceedings. For advice on seeking or responding to access, visit our Director Disputes service page or book a confidential consultation. 

This article is general information only and not legal advice. For advice specific to your circumstances, please contact our team.