application for an order under s 247A of the Corporations Act 2001 (Cth) authorising inspection of the books of the first defendant
where application is made by a former member
where the applicant must demonstrate that the application is made in good faith and for a purpose connected with applying for leave under s 237 of the Act
Quick Take
1Where a former member seeks inspection under s 247A(3)-(6) for a purpose connected with a foreshadowed s 237 derivative claim, the court must assess the basis of the proposed derivative claim as part of the composite good faith and purpose inquiry; if the impugned conduct could not have caused detriment or loss to the company, the application fails because there is no apparent benefit to the company in pursuing the claim.
2An applicant who can identify only a desire to investigate or understand what has occurred within the company, without identifying a reasonable foundation or 'case for investigation', does not satisfy the good faith requirement — mere suspicion, belief or dissatisfaction with management decisions is insufficient.
3Categories of documents sought under s 247A must be tailored to particular events or decisions relevant to the identified case; broadly drafted categories seeking all documents of a type (e.g. all board minutes, all bank statements) are impermissible as amounting to discovery or a fishing expedition.
