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In a family dispute, P wanted the Court’s leave to pursue a $10m claim on behalf of Co. P said the $10m was owed by D1, trustee of a family trust, as a loan to be repaid: [2], [17]

P also sought leave to proceed against D2 and D3 for breaching their duties to Co: [3]

P said the loans were made where D1 had doubtful capacity to repay, and where interest was not charged: [4], [5]

At a 2021 meeting, the Co’s dirs (including an independent dir) considered the loan from D1 and resolved not to seek repayment at that time: [10], [21]

P gave an undertaking to pay Co’s costs if leave was granted, despite not having much money: [11]

A dispute regarding D3’s removal as trustee of a family trust lead to a far reaching settlement deed being entered into in 2019. That established Co’s corporate governance structure, including the independent director: [18]

There are a number of related pieces of litigation on foot between the parties: [24]

It was accepted by all that Co was not going to bring proceedings seeking repayment, or alleging breaches of duty: [27]

Whether P was acting in good faith in pressing a claim against D1 was considered in the context of P being a shareholder in Co, there being inconsistencies in P’s claim, and P’s offering of an indemnity of dubious value: [33], [34]

Whether P was acting in food faith in pressing the claims against D2 and D3 was assumed to be so but, later, found to be irrelevant as the claims raised no serious question to be tried: [39]

The Court was not satisfied that the claim was in the Co’s best interests. No financial evidence comparing alternatives was tendered, and the Court was reluctant to disturb the commercial judgement of the Co’s directors: [46], [47]

The Court noted the established corporate governance principle that directors could legitimately make decisions against the wishes of a majority of shareholders: [50]

It was found to be contrary to the Co’s best interests to “sidestep” or “outflank” the decision of Co’s board not to pursue the debt now, especially as no challenge was raised to the decision making process used: [53], [54]

Was it in the best interests of the Co *for P* to bring the claim? No, due to the existing family tensions and possible inability of P to separate P’s interests from his own, and the fact P did not propose instructing independent lawyers if leave was granted: [56]

As the claim was not brought in good faith or in the Co’s best interests, P was not granted leave to pursue Co’s claim against D1: [63]

Nor were the claims against D2 and D3 seriously arguable. P’s claim was poorly pleaded and contradictory in part - whether the loan would or would not be repaid, whether it was currently statute-barred or not: [64], [65], [71], [72]

P’s application was dismissed: [83]