Vinciguerra v MG Corrosion Consultants Pty Ltd [2007] FCA 503

FEDERAL COURT OF AUSTRALIA

Vinciguerra v MG Corrosion Consultants Pty Ltd

[2007] FCA 503

CORPORATIONS – application to inspect company's books – whether 'acting in good faith and inspection for a proper purpose' – whether an inspection should be ordered pursuant to s 247A of the Corporations Act. Corporations Act 2001 (Cth), ss 232, 233, 236, 237, 247A, 247B

Acehill Investments Pty Ltd v Incitec Ltd [2002] SASC 344 cited Barrack Mines Ltd v Grants Patch Mining Ltd (No 2) [1988] 1 Qd R 606 cited Caveat Pty Ltd v Baillie & Ors [2002] WASC 83 followed Chuen v Laredo Pty Ltd [2005] WASC 58 discussed Intercapital Holdings Ltd v M.E.H. Ltd & Ors (1988) 6 ACLC 1068 applied Knightswood Nominees Pty Ltd v Sherwin Pastoral Co Ltd (1989) 15 ACLR 151 cited Re Humes Ltd (1987) 5 ACLC 64 cited

ALBERTO CESARIO VINCIGUERRA v MG CORROSION CONSULTANTS PTY LTD (ACN 084 715 177)

WAD322 OF 2006 GILMOUR J 5 APRIL 2007 PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIADISTRICT REGISTRY WAD322 OF 2006

BETWEEN: ALBERTO CESARIO VINCIGUERRA

Applicant

AND: MG CORROSION CONSULTANTS PTY LTD

(ACN 084 715 177)

Respondent

JUDGE: GILMOUR J

DATE: 5 APRIL 2007

PLACE: PERTH

REASONS FOR JUDGMENT 1 The applicant both in his own right and, effectively, in a prospective representative capacity seeks orders firstly pursuant to s 247A of the Corporations Act 2001 ("the Act") that he or another person on his behalf be permitted to inspect the books of the respondent and secondly pursuant to s 247B of the Act that the use to which the applicant may put the information obtained during any inspection of the books be limited in certain respects.

Statutory Framework

Section 247A 2 Section 247A of the Act provides: 247A(1) On application by a member of a company or registered managed investment scheme, the Court may make an order: (a) authorising the applicant to inspect books of the company or scheme; or (b) authorising another person (whether a member or not) to inspect books of the company or scheme on the applicant's behalf. The Court may only make the order if it is satisfied that the applicant is acting in good faith and that the inspection is to be made for a proper purpose. 247A(2) A person authorised to inspect books may make copies of the books unless the Court orders otherwise. 247A(3) A person who: (a) is granted leave under section 237; or (b) applies for leave under that section; or (c) is eligible to apply for leave under that section; may apply to the Court for an order under this section. 247A(4) On application, the Court may make an order authorising: (a) the applicant to inspect books of the company; or (b) another person to inspect books of the company on the applicant's behalf. 247A(5) The Court may make the order only if it is satisfied that: (a) the applicant is acting in good faith; and (b) the inspection is to be made for a purpose connected with: (i) applying for leave under section 237; or (ii) bringing or intervening in proceedings with leave under that section. 247A(6) A person authorised to inspect books may make copies of the books unless the Court orders otherwise. 3 Accordingly the applicant brings the application firstly in his capacity as a member of the respondent under s 247A(1) and secondly pursuant to the provisions of s 247A(3) as a person who is eligible to apply for leave to bring proceedings in the name of the respondent under s 237 of the Act. 4 Pursuant to s 247A(1) the applicant seeks inspection of the books of the respondent in order to enable him firstly in his own right to consider and receive advice in relation to the possibility of commencing proceedings under ss 232 and 233 of the Act on the basis that the conduct of the respondent's officers is oppressive or unfairly prejudicial to, or unfairly discriminatory against, the applicant as a member of the respondent, and secondly, if so advised, to commence and pursue such proceedings. 5 Pursuant to s 247A(3) orders for inspection are sought to enable the applicant to do likewise in relation to obtaining leave under s 237 to bring representative proceedings in the name of the respondent against Mr Malcolm Gilmour, the respondent's sole director. 6 In order to bring an application under s 247A(3) of the Act it is sufficient if the applicant demonstrates that he is eligible to apply for leave under s 237 of the Act. Section 237 in turn provides that a person referred to in s 236(1)(a) may apply to the Court for leave to bring or to intervene in proceedings. Section 236(1)(a)(i) relevantly provides that a person may bring proceedings on behalf of a company, if the person is a member of the company. 7 The applicant, as a member of the respondent, satisfies the provisions of s 236(1)(a)(i) and is accordingly eligible to bring proceedings under s 237(1) of the Act. He is accordingly, by virtue of s 247A(3)(c) a person who may apply for orders under s 247A. 8 The Court may only make the orders sought under s 247A(1) if it is satisfied that the applicant is acting in good faith and that the inspection is to be made for a proper purpose. Similarly before orders may be made under s 247A(4) the Court, by virtue of s 247A(5)(a) and (b)(i) requires to be satisfied that the applicant is acting in good faith and that the inspection is to be made for a purpose connected with, relevantly, applying for leave under s 237.