Federal Court of Australia Enares Pty Limited v Nimble Money Limited, in the matter of Nimble Money Limited [2021] FCA 1596 File number: NSD 1200 of 2021 Judgment of: CHEESEMAN J Date of judgment: 16 December 2021 Catchwords: CORPORATIONS – application by shareholder for access to company books and records under s 247A of the Corporations Act 2001 (Cth) – where access is sought to enquire into the debt refinancing arrangements entered into by the company but not yet completed – where the company has existing senior and subordinated debt due to mature imminently – where refinancing of senior debt is conditional on retirement of subordinated debt – where company has explored alternative methods of raising capital including by way of rights issue – where the applicant has put forward repeated indicative, conditional rights offers with latest to be underwritten on restrictive terms fettering the company's flexibility to enter future financing arrangements – whether the plaintiff had established on an objective basis that it is seeking access in good faith and for a proper purpose – whether power, if enlivened, to grant access should be exercised as a matter of discretion – Held: application unsuccessful Legislation: Corporations Act 2001 (Cth), s 247A Cases cited: Acehill Investments Pty Limited v Incitec Limited [2002] SASC 344 Barrack Mines Limited v Grants Patch Mining Limited [1988] 1 Qd R 606 Cescastle Pty Limited v Renak Holdings Limited (1991) 6 ACSR 115 Hanks v Admiralty Resources NL [2011] FCA 891; (2011) 85 ACSR 101 In the matter of Combined Projects (Arncliffe) Pty Ltd [2018] NSWSC 649 Intercapital Holdings Limited v MEH Limited (1988) 13 ACLR 595 Knightswood Nominees Pty Limited v Sherwin Pastoral Company Limited (1989) 15 ACLR 151 Mesa Minerals Ltd v Mighty River International Ltd [2016] FCAFC 16; (2016) 241 FCR 241 Mighty River International Limited v Mesa Minerals Limited [2015] FCA 462 Praetorin Pty Limited v TZ Limited [2009] NSWSC 1237; (2009) 76 ACSR 236 Rasley (Singapore) Pte Ltd v Financial & Energy Exchange Ltd [2020] FCA 1462 Re Augold NL [1987] 2 Qd R 297 Re Claremont Petroleum NL (No 2) [1990] 2 Qd R 310 Re Style Limited; Merim Pty Limited v Style Limited [2009] FCA 647; (2009) 255 ALR 63 Re Tolco and ENT Pty Ltd v Sunrasia Television Ltd [2007] NSWSC 270; (2007) 61 ACSR 626 Re Tolco Pty Limited [2016] NSWSC 1069 Smartec Capital Pty Ltd v Centro Properties Ltd [2011] NSWSC 495; (2011) 83 ACSR 461 Unity APA Limited v Humes Limited (No 2) [1987] VR 474 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 92 Date of hearing: 13, 14 and 16 December 2021 Counsel for the Plaintiff: Mr D Sulan SC with Ms L Rich Solicitor for the Plaintiff: Baker McKenzie Counsel for the Defendant: Ms F Roughley with Mr T Rogan Solicitor for the Defendant: Gilbert + Tobin ORDERS NSD 1200 of 2021 IN THE MATTER OF NIMBLE MONEY LIMITED ACN 128 541 542 BETWEEN: ENARES PTY LIMITED ACN 001 060 359 Plaintiff AND: NIMBLE MONEY LIMITED ACN 128 541 542 Defendant order made by: CHEESEMAN J DATE OF ORDER: 16 DECEMBER 2021 THE COURT ORDERS THAT: 1. The plaintiff's application pursuant to s 247A of the Corporations Act 2001 (Cth) for access by its solicitors on its behalf to the books of the defendant identified in Annexure A to the Originating Application filed on 19 November 2021 be dismissed with costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT CHEESEMAN J: Introduction 1 Enares Pty Limited brings an application pursuant to s 247A Corporations Act 2001 (Cth) for access by its solicitors on its behalf to the books of Nimble Money Limited, a company of which it is the largest shareholder, holding approximately 15% of the issued capital. 2 Section 247A(1) empowers the court, on application by a member of a company, to make an order authorising the member or another person on its behalf, to inspect the books of the company. The court may make the order only if it is satisfied that the applicant is acting in good faith and for a proper purpose. 3 Enares wants to inspect a wide range of Nimble's documents in order to investigate concerns it has relating to a debt refinance of Nimble's business in respect of senior debt that is due to expire on 18 December 2021 (Senior Debt Facility) and subordinated shareholder loans from Enares and Van Diemens Land Finance Pty Ltd (VDLF) through its related entity, Lempriere Pty Ltd, which expire on 21 December 2021 (Series 13 Subordinated Notes). VDLF is the second largest shareholder of Nimble holding 14% of the share capital. Enares seeks access to documents falling within ten broadly defined categories which are set out in Annexure A to these reasons. 4 Enares' concerns are that first, it believes that because of Nimble's financial position it would be better served by raising finance through an equity rights issue, secondly, that the debt refinance is not in Nimble's best interests and prefers the interests of some shareholders over those of others (including Enares) and finally, that it has been excluded from discussions with Nimble in relation to the debt refinance. Enares has in the recent past, on a number of occasions, made conditional and in principle indicative offers to underwrite equity rights issues for Nimble, which have been considered and rejected by Nimble's Board and have also failed to garner the support of some other Nimble shareholders. The debt refinance is well advanced and is due to complete on or about the time Nimble's existing debts mature. 5 Enares' stated purpose is to access Nimble's documents in order to investigate any legal right it may have to commence proceedings against Nimble, including to enjoin the refinance, and for the purpose of being informed in respect of its investment in the company. The potential legal action flagged by Enares is for relief under the Act in respect of oppressive conduct, related party dealings and/or by way of derivative action. Central to the concern of oppressive conduct is an allegation of a wrongful information asymmetry. 6 Nimble opposes the application on the basis that Enares' stated concerns do not rise above mere suspicion and comprise bare assertions that are lacking in substance when assessed objectively. Nimble submits that Enares' request to access documents on the basis that it seeks to understand the effect of the refinancing arrangements is misconceived. Nimble's constitution expressly reserves decisions concerning the issue of shares and options to its directors. In Nimble's submission, Enares does not require the information that it seeks in the exercise of its rights as a member because it has no relevant rights relating to decisions concerning the issue of subordinated notes and is simply dissatisfied as a would be financier whose overtures have not found favour. Nimble submits that Enares' concerns do not relate to its interests as a shareholder but rather to its commercial interests as a prospective financier or underwriter of a mooted rights issue proposal that has the potential to substantially increase Enares' stake in Nimble. As a matter of principle, shareholders do not have recourse to challenge management decisions with which they are dissatisfied: Re Augold NL [1987] 2 Qd R 297 at 308 (Williams J); (1986) 11 ACLR 362 at 370; Cescastle Pty Ltd v Renak Holdings Ltd (1991) 6 ACSR 115 at 117 (Young J). Nimble's final ground of opposition is on discretionary grounds having regard to the entirety of the particular circumstances. 7 The court must determine on an objective basis whether Enares is seeking access in good faith and for a proper purpose under s 247A of the Act. If so, it is necessary to consider any factors for and against the exercise of the discretion to grant access. 8 The matter was brought on urgently in the Corporations and Commercial duty list. The parties first appeared before me on 24 November 2021. At that time, directions were made for the service of evidence and submissions and the matter was listed for hearing on 13 December 2021 with an estimate of 2 hours. A Court Book was foreshadowed in the lead up to the hearing but not delivered until the morning of 13 December 2021. Time was lost due to procedural skirmishes which are the subject of a separate judgment. Enares' Senior Counsel embarked on a lengthy cross-examination of Mr Mackenzie, Nimble's Chief Executive Officer, which took up much of the time available on 13 December 2021. The hearing continued onto 14 December 2021. The remaining time available in the Corporations and Commercial duty list on 14 December 2021 was apportioned between the parties on a chess clock basis. An application to extend an interim confidentiality order was pending at the time the main argument concluded, which subsequently fell away. These are my reasons for refusing the relief sought by Enares and they will, by reason of time constraints, be brief relative to the scale of the issues canvassed in the hearing. Background Nimble's business and financial position 9 Nimble operates a short-term money lending business. It is a public company, but is not listed on the Australian Securities Exchange. As noted above Enares is the largest shareholder in Nimble, holding about 15% of the issued capital, VDLF is the second largest shareholder, holding about 14% and the balance of the membership comprises 70 members holding between 5.76% and less than 1% of the issued shares. The majority of the shareholders of Nimble hold less than 1% of shares. 10 It is common ground that Nimble has experienced a deterioration in its financial position over the last two years. In 2019 Nimble's Board approved the adoption of a new strategy which would see Nimble transition from short-term lending, colloquially described as "pay-day" loans, to more traditional medium to long-term lending. The adoption of this strategy was anticipated to cause a short to medium term financial impact on Nimble's cashflow and revenue for 2021 but was forecast to provide positive returns in the mid to long term and accordingly grow the business in line with its long term goals. Unfortunately for Nimble, the transitional period in which the impact of the new strategy was anticipated to be felt coincided with the onset of the COVID-19 pandemic. The end result being that the financial impact experienced by Nimble has been more significant than expected and the implementation of the new product strategy has been delayed. Mr Mackenzie has given evidence of the reduction in Nimble's business as a result of the COVID-19 pandemic and smaller loan book and number of active customers Nimble had as a result. Mr Mackenzie further elaborated that other factors such as the availability of government support in the form of JobKeeper payments as well as Nimble adopting a more conservative approach to lending also contributed to a significant reduction in its business. 11 In its recent annual report dated 30 June 2021, Nimble disclosed that it has signed a non-binding term sheet with its existing senior lenders to refinance its existing borrowings. A condition precedent of the refinance is that Nimble has to raise $4.5 million in equity or subordinated notes to replace the existing Series 13 Subordinated Notes which are held by Enares ($3.3 million) and Lempriere, a related party to VDLF ($1.2 million). Completion of the condition precedent in respect of the retirement of the existing subordinated debt must occur before 18 December 2021 when the Senior Debt Facility matures. 12 The annual report included financial statements for the period ending 30 June 2021 audited by independent auditors. Included in note 1 to the financial statements is the following statement: Going concern The financial report has been prepared on a going concern basis that contemplates the continuity of normal operating activities and the realisation of assets and the settlement of liabilities in the normal course of business. For the year-ended 30 June 2021, the Group generated a loss after tax of $5,469,000. The Group has signed a non-binding term sheet with its existing funders with a facility limit of $30m to refinance the existing borrowings maturing in less than 12 months. The term sheet has been signed by both parties at terms the directors believe are acceptable for the business in its current form. The new borrowings will have a fixed interest rate and a term of 3 years. The facility is contingent on the Group raising $4.5m of equity or subordinated notes to replace the current subordinated notes. The Group has signed binding term sheets for $4.5m of subordinated notes to replace its existing subordinated notes. Completion is on or around the 21st of December 2021. As at 30 June 2021, the Group had positive net assets of $7,599,000. 13 In their report the auditors expressed the view that there is material uncertainty relating to Nimble's ability to continue as a going concern. In doing so they drew attention to note 1, the relevant portion of which is extracted above. Enares' concerns 14 Mr Thompson, a director of Enares, who has been relevantly engaged in the oversight of Enares' investment in Nimble and is authorised to give evidence on behalf of Enares, deposed that both he and Enares have serious concerns about the actions of the present directors in causing Nimble to take on what he contends is significant further debt by way of a subordinated notes issue at an interest rate of 10% to 24% to unidentified new investors, instead of pursuing a rights issue pursuant to which further equity capital would be contributed by existing shareholders. 15 Enares alleges that Nimble is in "financial distress" based on the latest auditor's report and that in those circumstances an equity rights issue would be preferable to a debt refinance at what it contends are high interest rates. Enares complains that the rationale for the debt refinance has not been explained to it by Nimble, nor has Nimble explained its refusal to provide the documents sought by Enares. 16 Enares says that its concern in respect of the debt refinancing is heightened by three matters. First, at the time that the debt refinance was proposed and accepted by Nimble, it had one director, Mr Edney, who is associated with a 14% shareholder, VDLF. Enares contends that I should infer that Mr Edney has freely and fulsomely passed information he has received as a director of Nimble to VDLF and that this has created an unfair asymmetry in the information available to Enares as compared to VDLF. Second, Enares is concerned that the new investors are associated with VDLF or with the three new directors appointed to the Board on about 26 and 27 October 2021. Third, Nimble has refused to meet with Enares to discuss its concerns and the debt refinance, including to discuss if there are better financing terms available to Nimble. 17 Enares contends that depending on the information provided, it may have a number of direct or derivative claims for relief, including that the directors are failing to act in the best interests of Nimble (s 237 of the Act), that the new debt refinancing arrangements involve related party transactions (Chapter 2E of the Act) or that the affairs of Nimble are being conducted in a manner which is contrary to the interests of the members as a whole or is oppressive or unfairly prejudicial to Enares (ss 231 - 232 of the Act). 18 Enares submits that it wants access to Nimble's books in order to consider whether to take any action, including urgent action to enjoin the completion of the subordinated notes issue or to require Nimble to forward put an equity rights issue to shareholders as an alternate means of enabling Nimble to pay out the existing subordinated notes quickly. 19 Enares asserts that it continues to be prepared to support and underwrite an equity rights issue to protect its investment in Nimble because it is concerned that by taking additional debt, Nimble could fail. The evidence demonstrated that Enares' preparedness in this respect is at best indicative and is conditional on a number of issues in respect of which no agreement in principle is evident or indeed, would appear to be achievable in the time available. Fund raising and refinancing attempts 20 This application falls to be considered in the context of Nimble's financial position, its experience in trying to raise finance since about July 2020 and its communications with its shareholders in that regard, and with Enares specifically. 21 In or about July 2020, Nimble engaged a corporate adviser to assist it in exploring options to raise capital. 22 On 20 November 2020, Nimble provided an investor update which included a comparison of key data from the first quarter of FY2021 and the first quarter of FY2020. In that communication Nimble noted that the first quarter results reflected the ongoing impacts of the COVID-19 pandemic and noted that the recovery "as we start to come out of the Covid period" had been slightly slower than initially expected due to the second wave of COVID-19 and the extended lockdown in Victoria. Demand, measured by applications received, was on average about 50% less than in the first quarter of FY2020 and 65% lower in Victoria specifically. Nimble also noted that the progression of the roll out of one of its new products had been impacted by the prolonged lockdowns. In this communication to shareholders Nimble sounded a cautionary note in respect of the ongoing uncertainty making it difficult to pick a trend with any great confidence and noting that the Australian Securities and Investment Commission had communicated that all lenders in the sector were experiencing subdued demand. Investors were informed: Our capital raising activities are progressing well. Extensive discussions have been had with various potential investors with a view to ideally attracting strategic investors who would provide the capital we need and external credibility as we progress our strategy to exit payday lending and achieve a liquidity event. 23 In April 2021, Nimble proposed an equity rights offer to raise $4.8 million at a price of $0.252 per share, conditional on the completion of the provision of finance by a third party financier (the first entitlement offer). Enares did not subscribe to the first entitlement offer, because in its view, it did not reflect a fair price for the shares. Nimble received five acceptance forms from members subscribing for about $85,000 worth of shares. Accordingly the first entitlement offer failed. 24 Nimble then offered a replacement entitlement offer in or about May 2021 on different terms. The replacement entitlement offer sought to raise $5.2 million at a price of $0.20 per share. It was again conditional on completion of the provision of finance by the third party, which had a sunset date of 30 June 2021. 25 Enares expressed interest in the replacement entitlement offer on the following conditions. First, that the then current directors of Nimble resign. Second, Enares' nominated director be appointed to the Board and elected as Chairman. Third, that certain changes be made to the loan share plan. Fourth, that Enares be provided with certain documents. Finally, that VDLF lodge an application for shares pursuant to the replacement entitlement offer. Those conditions were agreed to and satisfied by 24 May 2021. Enares applied for $3.3 million worth of shares. In total, Nimble received applications from nine applicants for $5.1 million worth of shares. Then, on 9 June 2021 Enares notified Nimble that it would not participate in the replacement entitlement offer. 26 On 1 July 2021, Nimble notified the third party financier that it would not be proceeding with the replacement entitlement offer and subsequently withdrew from the transaction. 27 Following the two unsuccessful entitlement offers, Nimble issued the Series 13 Subordinated Notes which comprise $4.5 million of subordinated notes to Enares and Lempriere, a related party of VDLF, at the rate of 16% per annum with a 2% establishment fee and a term of six months. It is these notes that are due to mature on 21 December 2021. 28 In September 2021, there was a spill of the Board and all directors of Nimble, bar Mr Edney, were removed or resigned. Mr Edney is a director who is a nominee of VDLF. Conscious that by its constitution Nimble required a minimum of at least three directors, Mr Edney on Nimble's behalf, engaged professional recruitment advisers to assist in recruiting new independent directors. Mr Mackenzie deposed that as a part of the recruitment process shareholders were invited to meet with the candidate proposed to act as Chair and all shareholders who requested a meeting with that candidate, including Enares, met with him. Nimble appointed three new independent directors to its Board in late October 2021, one of whom was appointed as the new Chair. Each of the new directors had experience in corporate finance within industries such as health, telecommunications and banking. Mr Edney continued as a director. 29 On 1 October 2021, Nimble provided an Investor update which included Nimble's provisional financial results for financial year ended 30 June 2021. Nimble said in the Investor update that: FY21 has been a challenging year where the impact of Covid has extended for longer than expected. The performance of our core products continues to be adversely impacted by continued lockdowns, particularly in Victoria and latterly NSW. These trading conditions made the full launch of our new products more difficult than it otherwise would have been. It gave a more detailed update in respect of the current status of the business. In respect of Board renewal it was noted that following the recent extraordinary general meeting of members a process was underway to recruit new directors with the intent that one take the role of independent Chair. Nimble also addressed the status of its capital and debt plan in that update in the following terms: In order for the company to progress the strategy of growing the new products and cover the losses incurred due to the impact of Covid, additional new capital is required. As previously advised, when the Liberty transaction was unable to be completed and the entitlement offer to shareholders was withdrawn in June 2021, the company issued subordinated notes to existing shareholders, which mature in December 2021 when our current debt facility expires. This short term capital enabled the company to meet its debt financiers' covenants. We are in the final stages of finalising a refinancing of the senior debt facility with our existing debt financiers, with the current facility due to mature in December 2021. The proposed facility is on more favourable terms than the current facility and, importantly, enables us to fund our new products. The $4.5 million of subordinated notes that were issued to two of our large shareholders in June 2021 are due to expire at around the same time as our current senior debt facility. These notes will have to be replaced in order to maintain compliance with the various financial covenants under the senior debt facility and to support expected growth of the gross loan book. We are busy working through the various options to achieve this and will provide further details in the coming weeks. This funding is critical to enable us to complete the revised debt facility. 30 In October 2021 Enares proposed that it would underwrite a $10 million rights issue at a price of $0.0528 per share (the Enares October Proposal). Enares required Nimble to obtain written confirmation from shareholders with a shareholding of more than 1% of the ordinary shares issued, that they did not object to the proposal and that they would release Enares from all liability consequential on the take-up of any shortfall in the underwriting. Mr Mackenzie deposed that between 18 and 19 October 2021 certain shareholders indicated to Nimble that they would not be willing to provide the written confirmation required by the Enares October Proposal. The consent condition having not been satisfied, the offer was later withdrawn by Enares on 21 October 2021. In the email in which the Enares October Proposal was withdrawn, Mr Thompson writing on behalf of Enares noted, inter alia that: "It is also clear that there is now insufficient time for Enares' proposal to proceed in accordance with the timetable that was proposed." 31 On 27 October 2021, Mr Edney on behalf of the Nimble Board wrote to investors confirming the appointment of three new independent directors with one assuming the role of Chairman, and providing the following "Capital update": The Board is pleased to confirm that a non-binding term sheet has now been agreed with the Company's incumbent financiers with respect to a refinancing of the existing debt facility which matures in December 2021. The proposed facility is on more favourable terms than the current facility and, importantly, enables us to fund our new products. The $4.5 million of subordinated notes that were issued to two of our large shareholders in June 2021 also mature in December 2021 and need to be replaced in order to maintain compliance with the various financial covenants under the proposed new senior debt facility and to support expected growth of the gross loan book. The Board is considering various options available to achieve this, and has begun seeking expressions of interest from both existing key shareholders and new investors alike. Further updates will be provided to shareholders once there are firmer details to share. 32 Around this time Nimble was also seeking expressions of interest from potential investors in relation to the replacement of $4.5 million of its existing Series 13 Subordinated Notes. On 10 November 2021 Nimble notified its shareholders, including Enares, that it had executed a binding agreement with a group of new investors to subscribe for $4.5 million of subordinated notes (designated series 14 and series 15) under its existing secured notes issuance program (the New Investors' Subordinated Notes). The agreement was conditional on the satisfactory completion of due diligence, execution of documentation and a Follow-On Offering in respect of the series 14 and 15 notes being extended to Nimble's existing shareholders (together, the New Subordinated Notes Offer). The notes were to be issued under Nimble's existing note issuance program. The New Investors' Subordinated Notes issue was directed to the retirement of the existing subordinated notes on maturity which was a condition of the refinancing of Nimble's Senior Debt Facility. 33 On 12 November 2021, Enares made a further indicative proposal to underwrite an $8.5 million non-renounceable rights issue with a subscription price of $0.075 per new ordinary share (the Enares November Proposal). The Enares November Proposal was expressly noted to be indicative only, not capable of acceptance, and subject to definitive documentation and due diligence. The terms of the proposal provided that the rights issue would only to be extended to wholesale and sophisticated investors and was proposed to be underwritten and sub-underwritten by Enares. The underwriting agreement was to include an early termination clause exercisable in the event that Nimble took any steps to enter into additional debt financing arrangements including issuing further subordinated notes under its existing secured note issuance program. I interpolate to observe that such a term had the potential to restrict the future flexibility of the Board in acting in the company's best interests. 34 The terms of the Enares November Proposal provided for the completion of a number of steps on or before 26 November 2021, including due diligence, the issue of an Information Memorandum and the opening of the rights offer, in order to permit the settlement of shares by 17 December 2021 immediately prior to the Senior Debt Facility maturing on 18 December 2021. Enares had asked Nimble to communicate the Enares November Proposal to shareholders. Details of the Enares November Proposal were disclosed to shareholders in a letter from the Board dated 16 November 2021. 35 Mr Mackenzie deposed that he recommended to the Nimble Board, and that the Board agreed, that the issue of the New Investors' Subordinated Notes was in the best interests of the company. Accordingly, on 23 November 2021, Nimble provided a further update to shareholders reflecting its view that the New Subordinated Notes Offer was preferable to the November Enares Rights Proposal, the former being supported by shareholders representing over 50% of the company's issued share capital. Nimble also submits that a comparison of the Subordinated Notes Offer to the Enares' October and November proposals demonstrates that the new debt refinancing arrangements are not, contrary to Enares' submission, imprudent. Nimble further submits that there are advantages and disadvantages attached to the various alternatives that were explored. Mr Mackenzie's evidence in that regard reflected that the decision was one that is reserved for management. The debt alternative involves interest burden. The equity alternative carries with it potential dilution of existing shareholders' interests at a potential undervalue. 36 On 26 November 2021 shareholders were provided further information regarding the terms of the New Subordinated Notes Offer and invited to participate in the Follow-On Offering, for which a term sheet was provided. Those who expressed interest in the Follow-On Offering were provided with access to a data room upon executing a confidentiality agreement. Enares did not participate in the Follow-On Offering because it says to do so would potentially place Enares in breach of s 606 of the Act due to the size of its shareholding. Relevant principles 37 Enares seeks access to Nimble's books and records in accordance with s 247A of the Act which provides: (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. (2) A person authorised to inspect books may make copies of the books unless the Court orders otherwise. 38 The plaintiff bears the onus of establishing that it is acting in good faith and that the inspection it seeks is for a proper purpose: Praetorin Pty Limited v TZ Limited [2009] NSWSC 1237; (2009) 76 ACSR 236 at 244 [36]; Intercapital Holdings Limited v MEH Limited (1988) 13 ACLR 595 at 602 (Brooking J). The requirements of acting in good faith and that the inspection is for a proper purpose constitute a composite concept which is to be determined objectively: Barrack Mines Limited v Grants Patch Mining Limited [1988] 1 Qd R 606 (Andrews CJ, Kelly SPJ and Moynihan J); Knightswood Nominees Pty Limited v Sherwin Pastoral Company Limited (1989) 15 ACLR 151 at 156 (Brooking J); Acehill Investments Pty Limited v Incitec Limited [2002] SASC 344 at [29(1)] (Debelle J). 39 A plaintiff's proper purpose must be a primary or dominant purpose notwithstanding they may stand to benefit collaterally or incidentally: Unity APA Limited v Humes Limited (No 2) [1987] VR 474 at 480 (Beach J); Barrack Mines at 615. 40 To establish a proper purpose the plaintiff must do more than demonstrate it is dissatisfied with management decisions: Re Augold at 308 (Williams J); Cescastle at 117 (Young J). 41 The plaintiff must establish that it has a proper purpose in respect of each document or category of documents it seeks to inspect: see e.g. Rasley (Singapore) Pte Ltd v Financial & Energy Exchange Ltd [2020] FCA 1462. 42 The authorities use the expression "case for investigation", or permutations thereof, to emphasise that in order to exercise the discretion to grant access under s 247A of the Act the court must be satisfied that there is an objective basis for its intervention. The Full Court observed in Mesa Minerals Ltd v Mighty River International Ltd [2016] FCAFC 16; (2016) 241 FCR 241 (Mighty River FC) at [26] (Katzmann J with whom Siopsis and Gilmour JJ agreed at [1] and [2]) that: … The expression does not appear in the Act. It is an expression which was used in argument in Intercapital Holdings and which Brooking J deployed in his later judgment in Knightswood. Its utility, as Barrett J put it in Praetorin at [39], is to emphasise the need for an objective basis for intervention. At [54] of its reasons, the Full Court concluded that the appellant in Mighty River FC had established "a genuine case for investigation". 43 If the plaintiff is unable to show some reasonable ground for believing that misconduct or maladministration (or whatever else is suggested) has taken place, or is going to take place, it may fail to establish the pre-requisite to the making of an order, namely that it is acting in good faith and that the inspection is to be made for a proper purpose: Knightswood Nominees at 157. 44 In Hanks v Admiralty Resources NL [2011] FCA 891; (2011) 85 ACSR 101, Gordon J noted that the court need not and should not decide substantive issues on the hearing of an application under s 247A of the Act. However, the evidence on the application must establish that the application is brought in good faith and for a proper purpose and must reveal a clear basis for investigation so that there is a rational, objective basis for the plaintiff to be given access to inspect the specified books of the defendant: [37] - [39], [41]. In Rasley at [27], Jackson J observed that "the authorities frequently describe the standard of concern that must be reached in order to establish the necessary good faith and proper purpose as the existence of a 'case for investigation'.": see also Re Style Limited; Merim Pty Limited v Style Limited [2009] FCA 647; (2009) 255 ALR 63 at [67], [86] (Goldberg J). In Rasley at [28], Jackson J observed that: The infinite variety of situations that will be encountered in practice means is neither possible nor appropriate to seek to describe any rule that will determine when a case for investigation of this kind is, or is not, made out. It can be said, however, that the cases demonstrate that more than curiosity or general suspicion of a company's management is required. An applicant must at least be able to articulate a basis on which it might be found that illegal, improper or otherwise undesirable conduct has occurred. In Praetorin at [64]-[65] Barrett J accepted a submission to that effect, agreeing with counsel that it is not enough for an applicant to say that it 'just wanted to check it out that no-one had done anything wrong, because I have a circularity problem and I don't know what I don't know'. Gordon J applied this passage in Hanks at [39]. 45 It is not necessary that the plaintiff has sufficient evidence to bring or make out an action. Relief under s 247A would be inappropriate if the plaintiff had a complete cause of action: Praetorin at 246 [40]. It is enough that the issue raised by the plaintiff is "substantial and not fanciful", not "artificial, specious or contrived": Re Style at 81 [66] – [67]. Pursuing a reasonable suspicion of breach of duty is a proper purpose: Mighty River FC at [22(8)]. 46 In Praetorin, Barrett J (as his Honour then was) held that an expression of concern that the company or its directors or both had committed some legal wrong, for instance by committing the company to an unwise or improvident transaction, cannot confer a proper purpose in an application under s 247A. There must be some expressed or articulated basis for that apprehension: Praetorin at 250 – 251 [64] - [65] and 254 [89] - [90]. An allegation of oppression pursuant to s 232 of the Act will not suffice unless in the case of decisions properly reserved to management "the relevant poor decisions are shown to be … such that no board acting reasonably could have made them": Praetorin at 254 [89]. 47 In Re Tolco Pty Limited [2016] NSWSC 1069, Brereton J (as his Honour then was) held that there are other proper purposes provided for by s 247A, for instance to allow a member to value its shares so as to negotiate a fair exit price from the company or to examine the effect of a corporate debt transaction on the value of its shareholding. This may also include information necessary to decide how to vote at a general meeting: see e.g. Acehill. The plaintiff bears the onus of establishing the relevant deficiency in the information otherwise available to it. 48 Where the power to make an order under s 247A is enlivened, discretionary considerations of the kind indentified by Brereton J in Re Tolco apply. The touchstone of discretion is what the court ought to require the company to tell its shareholder: Re Claremont Petroleum NL (No 2) [1990] 2 Qd R 310 (McPherson J). In Smartec Capital Pty Ltd v Centro Properties Ltd [2011] NSWSC 495; (2011) 83 ACSR 461, Barrett J concluded his analysis of the scope of s 247A of the Act as follows: [68] In Rowland (above) at [41], Bryson AJ referred to decisions of McPherson J and Warren J, respectively, in Re Claremont Petroleum NL (No 2) [1990] 2 Qd R 310 and Czerwinski v Syrena Royal Pty Ltd (No 1) (2000) 34 ACSR 245; [2000] VSC 125 and said: [41] The references by McPherson J and by Warren J to information about matters of which a shareholder ought to be informed by the company are not references to information which the company has a legal duty to give to the shareholder. These observations were made in exposition of the operation of legislation which confers a broad discretion on the court, and the operation of that discretion extends to consideration of what the court ought to require that the company tell its shareholder, a different test to what the company has a legal duty to tell its shareholder. If the section was limited to providing means of enforcement for existing legal duties it would take an altogether different form, and the good faith requirement would not be appropriate. In my opinion the assignment of powers of management to the directors, and the non-involvement of shareholders in management of a company are important considerations. Business conducted in the corporate structure could readily be rendered inefficient or disrupted if this power became too ready a vehicle for examination by shareholders of management decisions and documents relating to them. However there is no rule of exclusion and no reason why involvement of a management decision should be a ground for refusal of access to documents; the matter is discretionary. With respect to management decisions a conservative approach to exercise of the discretion is appropriate. 49 The right of inspection with leave of the court does not affect the basic rule of company law that a shareholder ought not ordinarily have recourse to the courts to challenge managerial decisions made by, or with the approval, of the company's directors: Barrack Mines at 613. 50 I have also had regard to the helpful summary of the applicable principles set out by Jackson J in Rasley at [23] - [36], which I will not set out to avoid repetition. Consideration 51 I will first address Enares' submission that it is not necessary for it to establish a "case for investigation" as that expression is used in the authorities. Enares contended that the Full Court in Mighty River FC had rejected the submission that an applicant must establish a "case for investigation" and that rather, what was required was an "objective basis for intervention" and that this was a very low threshold. 52 Enares' submission seeks to parse the Full Court's reasons in a way that is not meaningful. The Full Court observed that the expression "case for investigation" does not appear in the text of s 247A of the Act. That is patently correct. It does not detract from the fact that the Full Court, consistently with previous authority, expressly recognised the utility of the concept as emphasising the need for an objective basis for intervention. The authorities, including Mighty River FC, by which I am bound, require that the applicant must establish an objective "case", "basis" or "issue" "for investigation" that is "substantive and not fanciful" and is not "artificial, specious or contrived". To the extent that Enares contended that the application under s 247A was subject to a very low bar in that the court need not be satisfied of anything more than that the subjective concern of the applicant was "not artificial, specious or contrived", I reject the submission. Ms Roughley appearing for Nimble submitted, and I accept, that the authorities demonstrate that various forms of shorthand have been employed to explain what is required to support the court's intervention. The phrase "not artificial, specious or contrived" is one such phrase. Enares' submission was predicated on divorcing this phrase from its context and from the facts of the cases in which it is used. It is not a free standing requirement that sets a very low bar such as to detract from the need for an applicant to establish on an objective basis that the applicant is acting in good faith and that the inspection is to be made for a proper purpose. 53 It is clear that there are subjective and objective considerations in the analysis of whether the court's power under s 247A of the Act is enlivened. The court must ascertain as a matter of fact the applicant's actual, that is, its subjective purpose. If the respondent wishes to challenge whether the applicant's stated purpose is in fact its purpose or dominant purpose then it is necessary for the respondent to challenge the applicant in cross examination: Mighty River International Limited v Mesa Minerals Limited [2015] FCA 462 at [45] (Barker J); In the matter of Combined Projects (Arncliffe) Pty Ltd [2018] NSWSC 649 at [18] (Leeming JA); Rasley at [86] - [87]; Re Style at 79 [57]. 54 The applicant's subjective purpose is then assessed to ascertain whether objectively it is a proper purpose within s 247A of the Act: Acehill at [29(1)] applied in Hanks at [31] and Mighty River FC at [22(2)]. The applicant's subjective view is relevant to, but will not determine, the outcome of that assessment: see e.g. Praetorin at 254 [89] - [93], Smartec at 475 [55] - [58]; Rasley at [36]. I note in this respect the observations in Rasley of Jackson J at [24]: It is clear that the words 'proper purpose' mean a purpose reasonably connected with the proper exercise of the rights of a shareholder as a shareholder, as opposed to a purpose connected with some other interest, such as an interest as a bidder under a takeover scheme, or as a litigant in proceedings against the company: Knightswood Nominees at 156-157; Cescastle Pty Ltd v Renak Holdings Ltd (1991) 6 ACSR 115 at 118; and Hanks v Admiralty Resources NL [2011] FCA 891; (2011) 85 ACSR 101 at [32(3)]. In contrast, a purpose which is unrelated to the applicant's status as a shareholder (for example idle curiosity), inherently improper (for example harassment or blackmail), or both (for example sharing confidential information with a competitor of the company) would not establish good faith and proper purpose: see Knightswood Nominees at 156. However, it has been observed that in this context, 'improper' means simply a purpose for which the courts would not extend assistance in an application under the section: Barrack Mines at 613 (Andrews CJ, describing on appeal with apparent approval the view of the trial judge). 55 In the present case Nimble did not seek to challenge that Enares' subjective purpose, as articulated by Mr Thompson, was in fact its real or dominant purpose. Enares submits that Nimble's failure to cross-examine Mr Thompson is fatal and that Enares must therefore succeed in its application. I do not accept that submission. It is true that Nimble did not require Mr Thompson for cross-examination. Nimble also relevantly confined its objections to Mr Thompson's affidavits to obtaining rulings limiting the use of his evidence in respect of purpose to being his or Enares' state of mind. Nimble's approach was consistent with its acceptance on this application that Enares' subjective purpose is taken to be as set out in Mr Thompson's affidavits. However, and this was the central contest between the parties, Nimble contended that Enares' subjective purpose did not satisfy the statutory test because Enares had not demonstrated that there was a case for investigation on an objective basis. The phrase "case for investigation" is not to be conflated with the notion of a prima facie case. 56 I now turn to consider whether Enares has discharged its onus such that the power is enlivened and if so, whether in the exercise of discretion, I should grant access to some or all of Nimble's books which are the subject of the application. Have the statutory preconditions been satisfied? Application by a member 57 Enares is a member of Nimble and has standing to make the application: s 247A(1). Is there a case for investigation? 58 Enares contends that it has established it is acting in good faith and for a proper purpose on two bases. First, that there is an objective basis for a suspicion of sufficient substance to demonstrate past or future wrongful conduct of the directors. Second, that an inspection of Nimble's books is necessary to understand the effect of the debt refinance on the value of Enares' shareholding. I will deal with each in turn. 59 Enares contends that in relation to the debt refinance that: (a) Nimble is in financial distress; (b) it is taking on further debt at high interest rates; (c) its rationale for pursuing debt over equity has not been disclosed; (d) that Enares cannot rule out if the new investors are related to VDLF or the three new directors; (e) that there is an information asymmetry between Enares and VDLF. This contention is based on the assertion that Mr Edney is freely sharing information he receives as a director with VDLF; (f) the debt refinance was formulated at the direction of Mr Edney when he was the sole director of Nimble and the recent appointment of the three new directors makes it unlikely that they could make an informed assessment of the proposal; and (g) Nimble has refused to meet with Enares to discuss its concerns and the debt refinance. 60 Nimble contends that each of these concerns are wrong, unfounded or insufficient to support any "case for investigation" as that term is used in the authorities. 61 Enares contends that the refinance of Nimble's debt by the issue of the New Investors' Subordinated Notes is detrimental in circumstances where the company is in financial distress and on Enares' submission, the refinancing amounts to further debt. Enares submits that the better option would be to raise funds through equity, which it says it is prepared to underwrite. These arguments have an air of commercial unreality in four respects which undermines there being an objective basis for the court to intervene. 62 First, the basis on which Enares has alleged that Nimble is in financial distress requires careful scrutiny. There is no suggestion of impropriety in the management of the company being the cause of Nimble's financial distress. Rather, the evidence establishes that there has been a downturn in revenue by reference to the COVID-19 pandemic. That is hardly surprising particularly given the nature of Nimble's business and the impact that prolonged lockdowns have had on the implementation of the planned change in Nimble's business strategy. The shareholders have been provided with regular updates in this respect. Some of the decrease in available cash is explained as having been used to reduce debt. There are signs the business is improving. The size of the loan book has substantially increased. Notwithstanding the qualification in the auditor's report the evidence suggests that the Board, the new investors and the subscribers to the Follow-On Offering are cautiously optimistic on the company's future prospects. Both the new investors and existing shareholders who have subscribed for the Follow-On Offering have weighted their investments towards the series 15 notes which are convertible. That reflects a level of optimism about the future trajectory of the company when one takes into account the option exercise price which ranges from $0.15 (Year 1), $0.20 (Year 2) to $0.25 (Year 3). 63 Second, a comparison of the rates under each of Nimble's existing financing facilities as against the terms of the proposed New Investors' Subordinated Notes issue demonstrates that in the context of this company the proposed rates are commercially comparable to those agreed to by the company in the past. Such a comparison also elucidates that the interest burden on Nimble under the new debt arrangement will likely be reduced relative to the status quo. While Mr Mackenzie was cross-examined on the rates in question and the losses incurred by Nimble leading to its current financial position, Enares did not put to Mr Mackenzie that the rates were not serviceable. Mr Mackenzie has given evidence of the material benefit to Nimble of refinancing via the New Investors' Subordinated Notes issue. He has indicated that his expectation was that there will be no increase in the size of Nimble's debt and that the rates under the proposed refinancing arrangements would be less than the effective rates under the existing Series 13 Subordinated Notes. Further, Mr Mackenzie gave evidence under cross-examination that Nimble had stress-tested the company's ability to service the interest rates under the New Investors' Subordinated Notes and that Nimble had formed the view that it had sufficient liquidity to pay those notes. I accept Mr Mackenzie's evidence. 64 Third, a comparison of the options prices under the Follow-On Offering and the Enares' October and November Proposals undercuts Enares' argument that the new refinancing arrangements are imprudent. Under the Follow-On Offering, options are priced at $0.15, $0.20 and $0.25 per option over year one, two and three of the fixed term series 15 notes under the New Subordinated Notes Offer. In comparison, Enares' October and November Proposals priced new shares at $0.058 and $0.075 respectively. The Follow-On Offering provides Nimble with equity at a higher valuation than either of Enares' proposals, which were, in any event, withdrawn. In entering the debt refinancing arrangements that it has, Nimble appears to have bought itself time to reap the benefit of the recovery of its business from the lockdowns occasioned by the pandemic and the delayed implementation of its change in business strategy. 65 Enares' criticisms are lacking in substance because they ignore the commercial circumstances in which Nimble finds itself. Nimble is presently faced with the looming maturation of two significant debt facilities. The evidence makes plain that Nimble has investigated a range of options to refinance in the period leading up to December 2021. It is also plain that timing is critical. Mr Mackenzie has been frank in his evidence that the new arrangements are intended to, and will, provide Nimble with breathing space. 66 The evidence demonstrates that Nimble has tried in a number of ways to raise capital in the past 17 months and has had external advice on how to do so. Previous attempts at equity capital raising have failed or have received little support from existing shareholders. The debt refinance is considered by the company to be the only viable alternative and has the support of other shareholders and the senior debt financiers. The most recent audit report makes plain that the auditors are aware that the debt refinance is in train and while the auditors have maintained the going concern qualification they have not made any adverse comment on the debt refinance itself. The Follow-On Offering was formulated and included in the proposal to provide for the participation of the existing members. There is no equity rights alternative on offer. The Enares November Proposal has been rejected. It is unlikely that such an alternative could be formulated, negotiated or implemented in time. That is implicitly recognised in Enares correspondence of 21 October 2021. The proposals put forward by Enares were indicative and conditional. The Board considered the Enares November Proposal for an equity rights issue to be an unsuitable refinancing proposal for Nimble because, inter alia, it: (a) heavily discounted the value of the company; (b) was subject to completion of due diligence by Enares; (c) gave rise to regulatory risks relating to the takeover provisions of the Act; and (d) included early termination provisions that prevented Nimble from progressing other refinancing proposals in parallel and restricted the company's flexibility going forward. 67 An aspect of Enares' complaint which it asserts substantiates its purpose as a proper purpose is that it claims to be subject to a disadvantage in terms of the information it has compared to that available to others. 68 To the extent that its complaint is directed to an information asymmetry as between it and Mr Edney, that is a function of Mr Edney being a director of the company. It does not give rise to an objective basis for the court to intervene in the domain of decision making reserved to management. 69 Insofar as the complaint is directed to an information asymmetry between Enares and VDLF, I am not satisfied that Enares has established the necessary premise. Enares submits that I should infer that VDLF has information in respect of the debt refinancing, including the New Subordinated Notes Offer, that Enares does not. The basis upon which I was asked to infer this was first, that I would infer that Mr Edney is freely passing information he received as a director to VDLF and second, because VDLF has likely taken steps to access the data room for the Follow-On Offering. 70 Mr Mackenzie was cross-examined at a high level of generality about Mr Edney's communications of company information to VDLF. The relevant section of the cross-examination is as follows: And Mr Edney is the director that you understand to be associated with the shareholder VDL; correct?---Yes. And, in effect, he's a nominee of VDL, isn't he?---I'm not sure the exact – the exact relationship in terms of whether he's a nominee or whether – whether he's – yes, on how his directorship has been formed. Yes. But you would fully expect him to be reporting matters back to VDL as to what's going on with the company, wouldn't you?---Yes. Yes. And so VDL, being a 14 per cent shareholder, has got access to a whole lot of information that the 15 per cent shareholder, being my client, doesn't have access to; you would agree with that?---I know there are some document – some – what's the word I'm looking for? Is a documented procedure for what – what that sharing is entitled to and when it's not entitled. Yes. Well, to your knowledge, Mr Edney knows who the new investors are, doesn't he?---Yes. And to your knowledge, one of the pieces of information the company is seeking to keep away from my client is who those new investors are?---Yes. So you're accepting, as the CEO, that there's going to be information asymmetry between the two major shareholder groups?---Yes. And that's a position that the company is happy with, that is, that one shareholder group has a lot more information about the new investors than another. MS ROUGHLEY: I object. 71 Senior Counsel for Enares called for the documented procedure referred to by Mr Mackenzie, which was produced under objection and ultimately admitted into evidence (Information Protocol). 72 The Information Protocol appears to date from about May 2018. It relates to the sharing of information between persons appointed to the Board of Nimble as Nominee Directors of a Nominating Shareholder. It has relevantly been executed by Mr Edney and by VDLF and adopted by resolution of the Board. Enares submits that I would infer that Mr Edney has passed the information about which it complains to VDLF because it contends that clause 3 of the Information Protocol permits that to occur. 73 It is necessary to first consider clause 1 of the Information Protocol which stipulates an overarching general principle that in the absence of an express right to disclose information to a Nominating Shareholder, the Nominee Director must maintain Nimble's information in strict confidence. Clause 3 stipulates "standing principles" relating to disclosure of Nimble information. Clause 3 relevantly provides: Standing principles relating to disclosure of Nimble information The Board has determined that it is in the interests of Nimble for information relating to Nimble, that is provided to a Nominee Director (in his or her capacity as a director), to be provided to a Nominating Shareholder (and in doing so, the Nominee Director will not be in breach of his or her duty of confidence to Nimble), on an ongoing basis unless: (a) the information falls within one of the following categories or types, in which case it must be redacted and removed, prior to any provision of the information to a Nominating Shareholder: (1) information regarding any aspect of the relationship between Nimble and a Nominating Shareholder, whether on a business, corporate or strategic level (2) information regarding Control (as defined in the Corporations Act 2001 (Cth) (Corporations Act)) of Nimble, including without limitation, any proposals that could result in a change in that Control; or (3) information regarding any product, service, transaction or other matter relating to Nimble's business where the Nominating Shareholder has (in any capacity) a relevant or competing interest in that product, service, transaction or other matter; 74 It will be recalled that the New Investors' Subordinated Notes were issued for the purpose of retiring the Series 13 Subordinated Notes that were issued to Enares and Lempriere. Further, that the extension of the Senior Debt Facility was conditional on the retirement of the Series 13 Subordinated Notes. Information in respect of these arrangements arguably falls within clause 3(a)(1) or 3(a)(3). In these circumstances and in light of the answers given by Mr Mackenzie during cross-exaimination, I do not think there is a reasonable basis for inferring that VDLF (as opposed to Mr Edney) is receiving information concerning the refinancing arrangements including the New Investors' Subordinated Notes. I am not satisfied that there is an information asymmetry as between Enares and VDLF of the type asserted which would provide the necessary an objective basis for the court to grant access to the documents specified in Enares' application. 75 Enares' concern that the debt refinance arrangement between Nimble and the new investors was proposed and accepted at a time when Nimble had only Mr Edney as a director is not maintainable on the evidence. The indicative extension of the Senior Debt Facility was negotiated by the Board and shareholders were informed in about June 2021. At that time Mr Edney was not the sole director. The Board of Nimble resolved to refinance its Series 13 Subordinated Notes through a note issuance to new investors on 9 November 2021. That intention was notified to shareholders on 10 November 2021. At this time the Board comprised of: (1) Mr Ben Edney a non-executive director appointed on 22 May 2018 who served as Chairman from 16 July 2018 until 24 May 2021. Mr Edney has over 30 years of experience in the financial services industry having worked at the National Australia Bank, Bank of Sydney and KPMG in finance, risk and restructuring. He is the current Managing Director of Lempriere; (2) Mr Graeme Wilson, appointed as non-executive director and Chairman on 26 October 2021. Mr Wilson has extensive experience in financial services, having held senior executive roles at various private and listed companies in the health and telecommunications sectors; and (3) Ms Helen Lorigan, non-executive director appointed on 27 October 2021. At the time of her appointment, Ms Lorigan was the Managing Partner of a venture capital firm and has experience across banking, wealth management, insurance, financial planning and consumer finance. Ms Lorigan had held senior executive roles in the Australia and New Zealand Banking Group, Commonwealth Bank of Australia (CBA) and MLC. (4) Mr Andrew Kearnan, non-executive director appointed on 27 October 2021. He had held executive and board positions at various institutions include Bank of America Merrill Lynch, CBA and Holland Insurance and currently runs an independent corporate advisory business. 76 Having regard to their previous experience and in particular, their combined expertise in stress debt financing, the members of Nimble's Board were clearly both qualified and experienced in dealing with the type of issues that were confronting Nimble at the time of their appointment. Mr Mackenzie deposed to being in discussions with the members of the Board regarding Nimble's financial position, its audit and refinance options. Mr Mackenzie gave the following evidence under cross-examination: … Did the directors make any inquiry to you as to how the audit was going?---From time to time, yes. And what were those inquiries; what were they interested in?---Was - was obviously the impact if we didn't have the facility in place the risk of us giving a qualified audit report. I see. And the directors that we're talking about here are really Mr Edney; correct?---Well, there - there was - Mr Edney was - was the sole director until 27 October and then we had the other new directors thereafter. 77 Mr Mackenzie's evidence, which I accept, puts beyond doubt any question that the Board members were collectively involved in the decision making process regarding the refinance. On 20 October 2021, Enares was informed by Nimble that a decision on any recapitalisation proposal would be made only after new directors had been appointed "and a quorate board is constituted". The evidence demonstrates that that is what occurred. I reject Enares' attempt to cast aspersions against Nimble's conduct to support a case for investigation based on the short period of time when Mr Edney was the sole director of Nimble. The submission is lacking in substance. 78 Nimble has advised Enares that to the best of its knowledge the new investors are not associated with or related parties (as those terms are used in the Act) of any current director, lender or shareholder of Nimble. Further, that the Board has satisfied itself that the directors have no material personal interest in the debt refinance. In the circumstances, Nimble has done no more than keep the identity of the new investors confidential, which it is entitled to do. To the extent that Enares complains that Mr Edney is aware of the identity of the new investors whereas Enares is not, that is a function of the fact that Mr Edney is a director. For the reasons set out above, I am not satisfied that I should infer that Mr Edney is passing relevant information in respect of the refinance to VDLF. 79 There has been extensive correspondence between the parties and their lawyers as to the reasons for pursuing the debt refinance in the relevant timeframe. Nimble has refused a meeting with Enares in early December 2021. I do not see that Nimble's refusal to meet with Enares at this late stage provides an objective basis on which to justify the court's intervention. Nimble has communicated its reasons for pursuing the debt refinance (subject to preserving some confidentiality). Nimble has been active in keeping its shareholders informed. It has made clear that it is open to other equity financing proposals in the future. It is clear that there is insufficient time to formulate or implement such a proposal in the time left before the existing debt matures. 80 Enares' concerns rise no higher than allegations of bare suspicion. It has led no evidence of a reason to believe that the directors of Nimble have acted other than diligently or efficiently in putting in place refinancing arrangements prior to the imminent expiry of existing facilities. It has not established that no board acting reasonably could have made those decisions: Praetorin at [89]. Even if the relevant threshold on managerial decisions is not so high, having regard to the whole of the relevant context and conscious that with respect to management decisions a conservative approach to the exercise of Court's discretion is appropriate, I am not satisfied that the potential for the debt refinance to be disadvantageous to Enares compared to implementation of one of Enares' proposals coupled with Enares' subjective suspicions about the conduct of management and the Board are sufficient to establish a proper purpose pursuant to s 247A of the Act: see Intercapital Holdings and Knightswood Nominees. There must be something in the evidence which provides an objective basis for the court to intervene. In this case that has not been established. Enares has done no more than demonstrate that it is dissatisfied with and disagrees with the decisions taken by Nimble's management. 81 Enares contends that its shareholding is at risk of dilution and that it is unable to protect itself from that risk. Enares has not argued that it is seeking documents to value its shareholding to consider an exit strategy. Bearing in mind that Nimble is an unlisted company and given its present financial difficulties liquidity, opportunities are likely limited in the near future. Similarly, Nimble has not contended that it requires the information to decide if it should participate in an opportunity or how it should vote at an impending general meeting: see Re Tolco and ENT Pty Ltd v Sunrasia Television Ltd [2007] NSWSC 270; (2007) 61 ACSR 626 (Austin J). In this respect I note that the evidence reveals that Enares had previously requested that a general meeting be held, but despite Nimble refusing to do so, Enares has not taken steps to require a general meeting to be convened. It would appear that Enares has not garnered sufficient support from other shareholders to force the issue. 82 The constitution of Nimble expressly provides that the decisions relating to the issue of shares or options are reserved to the directors. The directors may also exercise the powers of the company to borrow money, charge the property of the company or given any other security. Enares does not require the information sought to exercise its rights as a member because it does not have any relevant rights in those decisions. 83 Enares has elected not to avail itself of the information provided by Nimble in the data room to consider if it wants to participate in the Follow-On Offering. Enares says it has not done so on the basis of its concern of breaching s 606 of the Act by acquiring more than 20% of the issued capital in Nimble and because of the terms of the confidentiality regime which would limit the way in which Enares could use such information. Enares is under no obligation to avail itself of alternate methods of accessing information as a precondition to seeking access under s 247A. 84 Having regard to the observations of Brereton J (as his Honour then was) in Re Tolco (at [16] – [17]) I accept that in some contexts the purpose of understanding the value of a member's investment may supply a proper purpose on an objective analysis. However, I am not satisfied that Enares has established that the particular information it is seeking is necessary for it to have in order to exercise its rights as a member. There is no general meeting scheduled. Indeed Nimble has declined to call such a meeting and none has been requisitioned. There is no evidence to support any liquidity event in the near future which may necessitate access to facilitate valuation. 85 I am not satisfied that Enares has established a proper purpose by reference to the potential impact the debt refinance may have on the value of its shareholding. By way on contrast, Enares' interest in obtaining the information sought for the purpose of furthering its interest as the promoter and architect of an alternative capital raising (whether underwritten by it or by another) is palpable. Discretionary factors 86 If I am wrong on my conclusions as to Enares' failure to establish the composite requirements of s 247A, then in the exercise of my discretion I would not make an order pursuant to s 247A of the Act for the reasons that follow. 87 Enares' stated purpose for seeking access to the books of Nimble is to prevent the debt refinance or to propose some unformulated alternative, within an unrealistic timeframe and in circumstances where such an action has the potential to trigger the collapse of Nimble. 88 The information sought by Enares is too wide, constitutes an exercise in fishing and is not necessary to understand the debt refinance in circumstances where a term sheet has been supplied. The terms of the subordinated notes have been provided to the members and further information is available on a confidential basis via the data room. While I do accept that Enares is not required to pursue alternative means of obtaining information, it is relevant as a matter of discretion that insofar as the purpose relied upon is the desire to understand the impact of the transaction on the value of Enares' shares, that information is available via the data room. Enares' complaint about the permissible use of information obtained via the data room would not appear to constrain Enares if its purpose was confined to valuation. 89 Enares has not displaced the ordinary rule that shareholders should not have recourse to the courts to challenge management decisions with which they are dissatisfied. There is no evidence to suggest that the directors have acted other than in good faith and in the best interests of Nimble, in the context of the upheaval caused by the COVID-19 pandemic and by reference to its previous lack of success in raising finance through equity rights issues. Further, Enares seeks commercially sensitive information considered or generated by the Board that would place it in a superior position or alternatively undermine Nimble's standing or ability to negotiate with its current financiers or alternate financiers in the future. 90 Finally, Enares' application is underpinned by the suggestion that Nimble could refinance through an equity rights issue prior to the expiry of the current facilities. That is simply not the case. 91 I should note for completeness that Enares' Senior Counsel submitted that once the threshold requirements of s 247A of the Act are met, the court has no discretion as to whether to make an order granting access. No authority was referred to in which s 247A has been construed so that "may" in the chapeau is taken to mean "must". I reject that submission. The court has a residual discretion whether to order inspection: Mighty River FC at [22(13)] citing Humes at 481 (Beach J). The manner in which the residual discretion is exercised in a particular case must be determined by the facts relating to that case: Humes at 481. 92 For these reasons, the application will be dismissed with costs. I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman. Associate: Dated: 16 December 2021 ANNEXURE A - Documents and Records to be Produced Definitions: "books" has the meaning set out in Section 9 of the Corporations Act 2001 and includes a document and any other record of information. "Company" means Nimble Money Limited (ACN 128 541 542). "Letter to Investors" means the Letter to Investors of the Company from the Board of Directors dated 10 November 2021. "Subordinated Note offer" means the Subordinated Note offer referred to in the Letter to Investors. Categories: 1) A copy of the Subordinated Note offer. 2) A copy of the terms and conditions associated with the Subordinated Note offer, including but not limited to, any document recording: a) the potential issue of options to the New Investors, including but not limited to, the number of options that may be issued or the timing of the potential issue; or b) the "follow-on offering being extended to the company's shareholders" referred to in the Letter to Investors. 3) A copy of any final agreement constituting, or relating to, the "definitive documentation" referred to in the Letter to Investors. 4) A copy of any document recording: a) the identity of the New Investors referred to in the Letter to Investors; b) any connection that the New Investors have to existing shareholders, directors or officers or lenders of the Company; or c) the intention of the New Investors referred to in the Letter to Investors. 5) All board minutes, director resolutions, board papers and board packs of the Company recording any consideration of, or decision regarding, the: a) Subordinated Note offer; or b) the Company's options in respect of the Existing Subordinated Notes as defined in the Letter to Investors, including but not limited to: i) Enares' equity raise offers made in October 2021 and November 2021; or ii) any other alternative proposals relating to the replacement of the Existing Subordinated Notes as defined in the Letter to Investors. 6) A copy of any other document provided to the directors, or any one or more of them, for the purposes of considering the matters set out in (a) and (b) in category 5 above. 7) A copy of any document recording the basis upon which the Board, or any director, believes that the Subordinated Note offer "is in the best interests of the company and the shareholders" as asserted in the Letter to Investors. 8) A copy of any alternative proposals received by the Company in relation to the replacement of the Existing Subordinated Notes as defined in the Letter to Investors. 9) A copy of any communications between any director of the Company and any shareholder of the Company relating to the matters set out in (a) and (b) in category 5 above. 10) A copy of any document recording: a) the incentive scheme offered to the current directors of the Company; or b) any connection that the directors appointed to the Company in 2021 have to existing shareholders, directors or officers or lenders of the Company.