Mighty River International Ltd v Mesa Minerals Ltd

In the Federal Court of Australia, Mighty River International Ltd, a shareholder of Mesa Minerals Ltd, sought an order for inspection of certain company documents under section 247A of the Corporations Act 2001 (Cth). The primary issue before the court was whether Mighty River was acting in good faith and if the inspection was for a proper purpose, specifically to safeguard Mighty River’s investment rather than to influence Mesa Minerals' directors or force the purchase of minority shares. The plaintiff argued that the information sought was not adequately reflected in Mesa Minerals' recent financial reports.

The court held that Mighty River had satisfied the requirements for good faith and proper purpose. The inspection was deemed necessary to remove ambiguity and incompleteness in the information provided by Mesa Minerals concerning the exploitation of port rights and the Boodarie lease. This would allow Mighty River to adequately protect its investment in the company. The court was satisfied that the scope of the inspection order proposed by Mighty River was not excessive and granted the order with some modifications regarding the period and timing of the inspection.

The court found that the proposed inspection period of four years was necessary to cover all documents related to the exploitation of Mesa’s port rights and the Boodarie lease. This would ensure that Mighty River had adequate information to safeguard its investment. Consequently, the court ordered that Mighty River be granted access to specified documents, subject to certain conditions regarding the inspection period, the identification of the inspecting party, and the disclosure of obtained information. Additionally, the plaintiff was released from an earlier undertaking to the court, and Mesa Minerals was ordered to pay Mighty River’s costs related to the application.