In the matter of Legal Practice Management Group Pty Ltd, nSynergy Pty Ltd, nSynergy International Pty Ltd [2018] NSWSC 527

In the matter of Legal Practice Management Group Pty Ltd, nSynergy Pty Ltd, nSynergy International Pty Ltd [2018] NSWSC 527

Leave was granted because statutory criteria under s 237(2) Corporations Act 2001 (Cth) were met: the companies would not themselves bring the proceedings; the applicants acted in good faith; it was in the best interests of the companies given the evidence of potentially substantial recoveries and indemnity for costs; and there was a serious question to be tried as to alleged diversion of assets/opportunities and breaches of duty.

Parties
First Applicant: Keith Stewart Alistair Redenbach; Second Applicant: Campbell Jeffrey Ray; First Respondent: Legal Practice Management Group Pty Ltd; Second Respondent: nSynergy Pty Ltd; Third Respondent: nSynergy International Pty Ltd
Jurisdiction
Australia
Judgment Date
27 April 2018
Procedural Posture
Derivative Action Application / Judgment on Application for Leave to Commence Derivative Proceedings Under S 237 Corporations Act 2001 (cth)
Outcome
Leave granted to applicants to bring proposed derivative proceedings under s 237 of the Corporations Act 2001 (Cth), subject to detailed conditions regarding costs indemnity and liberty to apply regarding sufficiency of indemnity cap.
Legal Topics
Derivative Action, Oppression Remedies, Directors' Duties, Shareholder Rights, Litigation Funding
Corporations Law Equity Derivative Action Oppression Remedies Directors' Duties Shareholder Rights Litigation Funding

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Parties

Keith Stewart Alistair Redenbach

First Applicant

Campbell Jeffrey Ray

Second Applicant

Legal Practice Management Group Pty Ltd

First Respondent

nSynergy Pty Ltd

Second Respondent

nSynergy International Pty Ltd

Third Respondent

Procedural Posture

Derivative Action Application / Judgment on Application for Leave to Commence Derivative Proceedings Under S 237 Corporations Act 2001 (cth)

Legal Issues

  1. 1 Whether applicants should be granted leave to bring derivative proceedings under s 237 of the Corporations Act 2001 (Cth)
  2. 2 Whether applicants are acting in good faith
  3. 3 Whether granting leave is in the best interests of the companies

Ratio Decidendi

Leave was granted because statutory criteria under s 237(2) Corporations Act 2001 (Cth) were met: the companies would not themselves bring the proceedings; the applicants acted in good faith; it was in the best interests of the companies given the evidence of potentially substantial recoveries and indemnity for costs; and there was a serious question to be tried as to alleged diversion of assets/opportunities and breaches of duty.

Court Disposition

Leave granted to applicants to bring proposed derivative proceedings under s 237 of the Corporations Act 2001 (Cth), subject to detailed conditions regarding costs indemnity and liberty to apply regarding sufficiency of indemnity cap.

Orders

  • Applicants granted leave to bring derivative proceedings under s 237
  • Parties to submit short minutes of order to give effect to this judgment within 14 days