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A shareholder sought leave to bring derivative proceedings; to “stand in the shoes” of 4 companies and litigate on their behalf: [1]

The shareholder said that each Co was a “farmer” and enforcement action was taken against them in breach of the Farm Debt Mediation Act 1994 (NSW): [2]

The shareholder said that meant the lender’s actions were void, allowing the Cos to recover some $50m: [6]

3 of the Cos were in liquidation. All were in receivership.

The Court had to consider whether to grant leave, to let the shareholder sue the lender and others in the name of each company.

The shareholder – strikingly! – owned $6.2K in assets, had $250K credit card debt, had given personal guarantees of $45m, had a judgment against him >$11m, and a personal debt to the lender of $23m: [76]

Regarding the 3 Cos in liq: only one Co had a claim with “solid foundation”: [44], [89], [109]

In relation to the other, there was no serious question to be tried: [130]

In relation to all 4, the fact that the shareholder’s financial position meant he could provide no “meaningful indemnity” was fatal the applications: [78], [93], [113], [125]

The applications were dismissed. Costs followed.