› Breach of fiduciary and statutory duties — diversion of company funds
Corporations
› Members' remedies and internal disputes
› Relationship between derivative action and oppression remedy
Quick Take
1An action by a company against its director to recover compensation for breach of fiduciary and statutory duties is the paradigm of an action in the company's interests for the purposes of s 237(2)(c) of the Corporations Act; the availability of oppression remedies under s 233 does not require an applicant for derivative leave to demonstrate that those remedies are 'inadequate'.
2The 'best interests of the company' inquiry under s 237(2)(c) must focus on the company's own legal and commercial interests, which are distinct from the commercial interests of its shareholders; fusing or confusing these interests is an error in approach.
3A willingness to provide a personal indemnity for costs and adverse orders, combined with preparation of a draft claim and readiness to proceed promptly, constitutes strong evidence of good faith under s 237(2)(b), particularly where the respondents fail to identify any specific collateral purpose.
