Keenfern Pty Ltd v Thorlock International Ltd

The case of Keenfern Pty Ltd v Thorlock International Ltd was heard in the Supreme Court of Western Australia. The plaintiff, Keenfern Pty Ltd, sought leave to inspect the books of the defendant company, Thorlock International Ltd, under section 247A of the Corporations Act. The application was brought to investigate the solvency of the defendant company. The legal issues before the court involved determining whether the application was made in good faith and for a proper purpose, as required by section 247A of the Act.

The court considered the principles outlined in previous cases such as Biala Pty Ltd v Mallina Holdings Ltd and Intercapital Holdings Ltd v MEH Ltd, which highlighted the importance of good faith and proper purpose in applications for inspection of company books. The court found that the primary purpose of the application was to ascertain the solvency of the company, which it deemed to be an improper purpose under the Act. Additionally, the court noted that the plaintiff's conduct, including multiple separate actions initiated against the defendant, raised questions about the good faith of the plaintiff.

Ultimately, the court refused the plaintiff's application for leave to inspect the defendant's books. The plaintiff was ordered to pay the defendant's costs, including reserved costs. The decision underscores the necessity for applications under section 247A to be made for legitimate and permissible purposes, and not merely to investigate the solvency of a company as a preliminary step to potential legal action.