Mount Gilead Pty Ltd v Macarthur-Stanham (as executor of Estate of late Lee Macarthur-Onslow)

Mount Gilead Pty Ltd sought leave to bring statutory derivative proceedings on behalf of a company against a former director. The application was made by a former officer of the company. The primary dispute concerned whether the applicant had met the requirements of section 236 of the *Corporations Act 2001* (Cth) to bring proceedings on behalf of the company. The case was heard in the Court of Appeal of New South Wales.

The central legal issues before the Court of Appeal were whether the applicant, a former officer, was acting in good faith, whether there was a serious question to be tried, and whether it was in the best interests of the company to grant leave. These issues were complicated by the fact that the applicant had entered into a Deed of Settlement shortly before applying for leave, which potentially released some of the claims sought to be brought on behalf of the company. The court had to determine if the applicant had demonstrated a seriously arguable case that the company had suffered loss or damage.

The Court of Appeal considered the applicant's good faith and the potential impact of the Deed of Settlement on the claims. It was held that the applicant had not demonstrated that she was acting in good faith, nor had she established a seriously arguable case that the company had suffered loss or damage. Furthermore, the court found that it was not in the best interests of the company to grant leave. The principles applied related to the statutory requirements for derivative actions, including the applicant's good faith, the existence of a serious question to be tried, and the best interests of the company.

Consequently, leave to appeal was granted, but the appeal itself was dismissed with costs.