In the matter of Legal Practice Management Group Pty Ltd; nSynergy Pty Ltd and nSynergy International Pty Ltd [2017] NSWSC 1500

In the matter of Legal Practice Management Group Pty Ltd; nSynergy Pty Ltd and nSynergy International Pty Ltd [2017] NSWSC 1500

Because s 241 of the Corporations Act 2001 (Cth) empowered the Court to make interim orders on a derivative action leave application, and because the Companies were probably not going to bring the proceedings, notice had been given, the Applicants acted in good faith to preserve possible claims, interim commencement was in the Companies' best interests to avoid possible loss of claims through limitation, and a serious question to be tried was established for interim purposes, leave should be granted on a narrow interim basis to file the Statement of Claim but take no further step without leave.

Jurisdiction
Australia
Judgment Date
14 September 2017
Procedural Posture
Application for Leave to Bring Statutory Derivative Proceedings on Behalf of Companies / Interim Application for Leave While the Substantive Leave Application Was Part Heard
Outcome
Interim leave granted to file the Statement of Claim, with no further step to be taken without leave of the Court.
Legal Topics
['statutory Derivative Action' 'interim Leave to Commence Proceedings' 'limitation Period' 'good Faith' 'best Interests of Companies' 'serious Question to Be Tried']
['corporations' 'equity' 'civil Procedure'] ['statutory Derivative Action' 'interim Leave to Commence Proceedings' 'limitation Period' 'good Faith' 'best Interests of Companies' 'serious Question to Be Tried']

Case Brief

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Procedural Posture

Application for Leave to Bring Statutory Derivative Proceedings on Behalf of Companies / Interim Application for Leave While the Substantive Leave Application Was Part Heard

Legal Issues

  1. 1 ['Whether the Court had power to grant interim leave to commence derivative proceedings pending determination of the substantive leave application.' 'Whether interim leave should be granted to protect proposed claims from the possible expiry of a limitation period while the application for leave remained part heard.' 'Whether, for the limited purpose of interim leave, the requirements in s 237(2) of the Corporations Act 2001 (Cth) were satisfied.']

Ratio Decidendi

Because s 241 of the Corporations Act 2001 (Cth) empowered the Court to make interim orders on a derivative action leave application, and because the Companies were probably not going to bring the proceedings, notice had been given, the Applicants acted in good faith to preserve possible claims, interim commencement was in the Companies' best interests to avoid possible loss of claims through limitation, and a serious question to be tried was established for interim purposes, leave should be granted on a narrow interim basis to file the Statement of Claim but take no further step without leave.

Court Disposition

Interim leave granted to file the Statement of Claim, with no further step to be taken without leave of the Court.

Orders

  • ['On the undertaking of the Applicants, by their Senior Counsel, that they will not serve or otherwise continue the proceedings which are commenced against each of the twelve Defendants identified in the draft Statement of Claim which is Annexure D to the affidavit of Mr Keith Redenbach sworn 27 June 2017, without...