WAM Active Limited v Keybridge Capital Limited (No 2) [2024] NSWSC 1496

WAM Active Limited v Keybridge Capital Limited (No 2) [2024] NSWSC 1496

Keybridge Capital Limited was not insolvent at the hearing date, as it could pay its debts when due and had realisable assets and access to finance; the appropriate remedy for any breach of duty or mismanagement regarding the Restraint Agreement and Loan Agreement is to grant leave for a derivative action, rather than to wind up a solvent and profitable company.

Parties
Plaintiff: WAM Active Limited; First Defendant: Keybridge Capital Limited; Second Defendant: Nicholas Francis John Bolton; First Supporting Creditor: Lowe Lippman Pty Ltd; Second Supporting Creditor: Kerrs Law
Jurisdiction
Australia
Judgment Date
27 November 2024
Procedural Posture
Corporations (winding Up, Derivative Action, Oppression) / Trial and Judgment
Outcome
Application to wind up dismissed; leave granted for derivative action; orders to be brought in by parties.
Legal Topics
Winding Up in Insolvency, Oppressive Conduct, Derivative Action, Director Duties, Related Party Transactions
Corporations Law Equity Winding Up in Insolvency Oppressive Conduct Derivative Action Director Duties Related Party Transactions

Case Brief

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Parties

WAM Active Limited

Plaintiff

Keybridge Capital Limited

First Defendant

Nicholas Francis John Bolton

Second Defendant

Lowe Lippman Pty Ltd

First Supporting Creditor

Kerrs Law

Second Supporting Creditor

Procedural Posture

Corporations (winding Up, Derivative Action, Oppression) / Trial and Judgment

Legal Issues

  1. 1 Whether Keybridge Capital Limited should be wound up in insolvency
  2. 2 Whether Keybridge Capital Limited should be wound up on the just and equitable ground or for oppression
  3. 3 Whether leave should be granted to WAM Active Limited to bring a derivative action on behalf of Keybridge

Ratio Decidendi

Keybridge Capital Limited was not insolvent at the hearing date, as it could pay its debts when due and had realisable assets and access to finance; the appropriate remedy for any breach of duty or mismanagement regarding the Restraint Agreement and Loan Agreement is to grant leave for a derivative action, rather than to wind up a solvent and profitable company.

Court Disposition

Application to wind up dismissed; leave granted for derivative action; orders to be brought in by parties.

Orders

  • The parties are to bring in short minutes of order, by 5pm on 4 December 2024, to give effect to these reasons for judgment.
  • If orders cannot be agreed, the parties are to exchange and provide to the Associate to Nixon J, by 5pm on 4 December 2024, the form of orders which each party proposes and submissions (limited to 5 pages) on those orders, indicating whether, and if so why, an oral hearing is requested to deal with the issues in...