Talisman Technologies Inc v Qld Electronic Switching P/L

[2001] QSC 324

Supreme Court of Queensland

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Interrogate

Catchwords

1. Corporations
2. › Statutory derivative action
3. › Leave to bring proceedings on behalf of company
4. › Preconditions under s 237(2)
5. › Whether probable company will not itself bring proceedings
6. › Whether applicant acting in good faith
7. › Whether in best interests of company
8. › Corporations Act 2001 (Cth), ss 236, 237
1. Corporations
2. › Statutory derivative action
3. › Joinder of company as defendant
4. › Whether s 237(1) permits company to be joined as defendant rather than plaintiff
5. › Corporations Act 2001 (Cth), ss 236, 237
1. Corporations
2. › Statutory derivative action
3. › Shareholders' dispute
4. › Whether derivative action appropriate where proceedings fundamentally a dispute among shareholders
5. › Whether resolution of shareholders' dispute would clarify company's position

Quick Take

Where proceedings are fundamentally a shareholders' dispute, the resolution of which will clarify the company's position, leave for a statutory derivative action under s 237 is unlikely to be granted because it cannot be concluded that the company will probably not itself bring proceedings, and joining the company may not be in its best interests. The good faith requirement in s 237(2)(b) is a subjective test concerning the applicant's motivation, while the best interests requirement in s 237(2)(c) is an objective test, and the outcome of the objective test may inform the good faith assessment.