The Court granted leave under s 237 of the Corporations Act for a 50% shareholder and co-director to bring derivative proceedings on behalf of a deadlocked company, alleging breach of directors' duties, diversion of corporate opportunity to a competing business, and that property held in the names of the directors and their spouses was beneficially owned by the company on a constructive or resulting trust. Leave was granted subject to the applicant undertaking to pay the company's costs and indemnify it against adverse costs orders. The Court found the good faith requirement was satisfied notwithstanding allegations of collateral purpose (delaying a VCAT property sale proceeding), and that a serious question to be tried existed despite significant pleading deficiencies in the constructive trust claim.
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