Pesec v Consolidated Builders Ltd (No 3)

The plaintiff in this case, a shareholder of Consolidated Builders Ltd (CBL), sought leave to bring a derivative action on behalf of the company against the Board of Directors and a nominated purchaser of shares. The plaintiff argued that the company would not bring the proceedings itself and that the action was in the best interests of the company. The plaintiff also claimed to be acting in good faith. The defendants opposed the grant of leave, arguing that the plaintiff had not established all the criteria required by s 237 of the Corporations Act 2001 (Cth). The court was required to determine whether the plaintiff had established that it was probable the company would not bring the proceedings itself, that the plaintiff was acting in good faith, that the grant of leave was in the best interests of the company, that there was a serious question to be tried, and that the company had been given 14 days’ written notice of the application for leave or that it was appropriate to grant leave notwithstanding the notice requirement not being satisfied.

The court found that the plaintiff had not established all the criteria required by s 237 of the Corporations Act. The court found that it was not probable that the company would not bring the proceedings itself, as the company had already taken steps to investigate the plaintiff’s allegations. The court also found that the plaintiff was not acting in good faith, as the plaintiff had not fully disclosed all the relevant facts to the company before bringing the proceedings. The court found that the grant of leave was not in the best interests of the company, as the company had already taken steps to address the plaintiff’s concerns. The court found that there was not a serious question to be tried, as the plaintiff’s claims were not well-founded. The court found that the company had not been given 14 days’ written notice of the application for leave, and that it was not appropriate to grant leave notwithstanding the notice requirement not being satisfied.

The court dismissed the plaintiff’s application for leave to bring a derivative action on behalf of CBL. The court found that the plaintiff had not established all the criteria required by s 237 of the Corporations Act. The court found that it was not probable that the company would not bring the proceedings itself, that the plaintiff was not acting in good faith, that the grant of leave was not in the best interests of the company, that there was not a serious question to be tried, and that the company had not been given 14 days’ written notice of the application for leave or that it was appropriate to grant leave notwithstanding the notice requirement not being satisfied. The court ordered that the plaintiff’s application be dismissed.