Supreme Court New South Wales Medium Neutral Citation: Stanton (WA) P/L v Vasquez Investments [2017] NSWSC 128 Hearing dates: 13 February 2017 Date of orders: 15 February 2017 Decision date: 15 February 2017 Jurisdiction: Equity - Commercial List Before: Rein J Decision: See [40] Catchwords: CORPORATIONS – whether leave to amend pleadings should be granted – statutory derivative action where Plaintiff, formerly the trustee of a trust, was placed in liquidation following judgment against it in favour of creditors, and shares in the Second Defendant held by the trustee were transferred to the First Defendant and diluted by the issue of new shares in the Second Defendant – whether leave under s237 of the Corporations Act should be given – whether the proceedings amount to an abuse of process – whether there is a serious question to be tried – whether it is in the best interests of the Second Defendant that the Plaintiff be entitled to maintain its derivative claims – whether a company can be both a plaintiff and a defendant in the same proceedings Legislation Cited: Corporations Act 2001 (Cth) Conveyancing Act 1919 (NSW) Property Law Act 1969 (WA) Trustee Act 1925 (NSW) Personal Property Securities Act 2009 (Cth) Civil Procedure Act 2005 (NSW) Cases Cited: Hall v Poolman (2007) 215 FLR 243 Swansson v Pratt [2002] NSWSC 583 Maher v Honeysett [2005] NSWSC 859 Chahwan v Euphoric Pty Ltd [2008] NSWCA 52; (2008) 65 ACSR 601 Gerard Cassegrain & Co Pty Ltd v Cassegrain; Cassegrain v Gerard Cassegrain & Co [2010] NSWSC 91 Charlton v Baber [2003] NSWSC 745 Power v Ekstein [2010] NSWSC 137 Metyor v Queensland Electronic Switching [2002] QCA 269 Category: Principal judgment Parties: Stanton (WA) Pty Ltd (in liq) (Plaintiff and Applicant) Vasquez Investments Pty Ltd (First Defendant and First Respondent) Bryve Resources Pty Ltd (Second Defendant and Second Respondent) Stanton, Robert Paul (Third Defendant and Third Respondent) Townend, Lachlan (Fourth Defendant and Fourth Respondent) Vasquez (WA) Pty Ltd (Fifth Defendant and Fifth Respondent) Shareholder Services Pty Ltd (Sixth Defendant and Sixth Respondent) Representation: Counsel: P.T. Russell (Plaintiff/Applicant) D.K. Ratnam (First Defendant & Second Defendant/Respondents) Solicitors: Ashurst (Plaintiff/Applicant) Judd Commercial Lawyers (First Defendant & Second Defendant/Respondents) File Number(s): 2016/247919 Publication restriction: Nil Judgment 1. Before the Court is a Notice of Motion filed by the Plaintiff, for whom Mr P.T. Russell of Counsel appears, by which the Plaintiff seeks to amend its claim but which also involves an application pursuant to s 237 of the Corporations Act 2001 (Cth) ("the Act"). 2. The history of this matter is as follows: 1. The Plaintiff, Stanton (WA) Pty Ltd ("SWAPL") was the trustee of the Stanton Investment Trust ("the Trust"). Mr Brent Stanton was the sole director and shareholder of SWAPL. Ms Yvette Fernandez was the secretary of SWAPL. 2. The only asset of the Trust was a shareholding of 1000 shares in Bryve Resources Pty Ltd ("Bryve"). Bryve's only or main asset is an interest in a mining company Shaw River Management. 3. SWAPL incurred a liability (whilst acting as trustee for the Trust) to Prinwalla Holdings Pty Ltd ("Prinwalla") and Kandabe Pty Ltd ("Kandabe"). They obtained a judgment against SWAPL in this Court on 31 March 2016 for $945,000 ("the judgment debt"). Prinwalla and Kandabe had transferred $945,000 to SWAPL for shares in an enterprise which shares were never transferred. 4. Prinwalla and Kandabe issued a statutory demand for the judgment debt and SWAPL did not pay the debt. 5. SWAPL was wound up on 8 June 2016 and Mr Andrew Barnden was appointed liquidator of SWAPL. 6. Shortly before SWAPL was put into liquidation, SWAPL resigned as trustee, Vasquez Investments Pty Ltd ("Vasquez") was appointed to replace SWAPL, and SWAPL transferred all of its property, including its shares in Bryve, to Vasquez. 7. Ms Fernandez is the sole director and secretary of Vasquez. 8. Mr Stanton is the sole director and secretary of Bryve. 9. On 13 and 14 July 2016 Bryve issued 19,000 new shares to Vasquez as trustee for the Third to Sixth Defendants, all of whom are related to or controlled by Mr Stanton and Ms Fernandez. This allocation reduced Vasquez's shareholding in Bryve from 100% to 5%. 1. SWAPL (in liquidation) commenced proceedings against Vasquez and Bryve in August 2016. I shall in the balance of these reasons refer to SWAPL (in liquidation) as SWAPL. 2. These proceedings have been fixed for hearing with an estimate of two days commencing on 15 March 2017. 3. SWAPL now seeks leave to amend its Amended Summons and Amended Commercial List Statement ("ACLS") by filing a Further Amended Summons ("FAS") and a Further Amended Commercial List Summons ("FACLS"). Mr Russell provided the Court with written submissions on behalf of SWAPL before the hearing of the motion on Monday. 4. The Defendants, for whom Mr D.K. Ratnam of Counsel appears, do not consent to the amendments and oppose the grant of leave under s 237 of the Act to bring proceedings on behalf of Bryve. Mr Ratnam's predecessor, Mr D. Barlin of Counsel, provided written submissions on Monday morning on which Mr Ratnam relied. 5. Section 237 of the Act is in the following terms: 237 Applying for and granting leave (1) A person referred to in paragraph 236(1)(a) may apply to the Court for leave to bring, or to intervene in, proceedings. (2) The Court must grant the application if it is satisfied that: (a) it is probable that the company will not itself bring the proceedings, or properly take responsibility for them, or for the steps in them; and (b) the applicant is acting in good faith; and (c) it is in the best interests of the company that the applicant be granted leave; and (d) if the applicant is applying for leave to bring proceedings—there is a serious question to be tried; and (e) either: (i) at least 14 days before making the application, the applicant gave written notice to the company of the intention to apply for leave and of the reasons for applying; or (ii) it is appropriate to grant leave even though subparagraph (i) is not satisfied. (3) A rebuttable presumption that granting leave is not in the best interests of the company arises if it is established that: (a) the proceedings are: (i) by the company against a third party; or (ii) by a third party against the company; and (b) the company has decided: (i) not to bring the proceedings; or (ii) not to defend the proceedings; or (iii) to discontinue, settle or compromise the proceedings; and (c) all of the directors who participated in that decision: (i) acted in good faith for a proper purpose; and (ii) did not have a material personal interest in the decision; and (iii) informed themselves about the subject matter of the decision to the extent they reasonably believed to be appropriate; and (iv) rationally believed that the decision was in the best interests of the company. The director's belief that the decision was in the best interests of the company is a rational one unless the belief is one that no reasonable person in their position would hold. (4) For the purposes of subsection (3): (a) a person is a third party if: (i) the company is a public company and the person is not a related party of the company; or (ii) the company is not a public company and the person would not be a related party of the company if the company were a public company; and (b) proceedings by or against the company include any appeal from a decision made in proceedings by or against the company. Note: Related party is defined in section 228 Amendments Sought: 1. By the Amended Summons and the ACLS, SWAPL seeks: 1. Declaratory and other associated relief concerning SWAPL's right to indemnity, equitable lien and the appointment of a receiver to enforce that lien. 2. A declaration pursuant to s 37A of the Conveyancing Act 1919 (NSW) or s 89 of the Property Law Act 1969 (WA) ("the s 37A claim") that the issue of the 19,000 new shares to the First and Third to Sixth Defendants is void and of no effect. The Proposed Amendments: 1. By the FAS and FACLS, SWAPL seeks the following additional relief and raises the following additional allegations as summarised in Mr Russell's outline of submissions: 1. Section 37A claim/relief in respect of the vesting by SWAPL of all of its right, title and interest (as trustee) in the assets of the Trust in Vasquez and associated relief: see paras 5A and 5B of FAS and paras 26A and 26B FACLS. 2. An allegation that the issue of 19,000 new shares in Bryve was done as part of or in furtherance of the intent to defraud creditors of SWAPL referred to in para 26B: see para 33A of FACLS. This allegation provides a further basis for the s.37A claim/relief already sought in prayers 6 and 6A of the Amended Summons. 3. An alternative basis for the existing declaratory and other claims of relief in prayers 6 and 6A of the Amended Summons: see paras 33B-33O FACLS. That basis is that the issue of the 19,000 new shares in the Bryve is voidable at the suit of Bryve because it was done: 1. In breach of various provisions of the Bryve's Constitution and the Act: see paras 33L and 33M; 2. In breach of the Mr Stanton's fiduciary duty and/or s.181 of the the Act as it was done for the purpose or purposes as already alleged in para 32 of the ACLS. 1. Those amendments which do not involve s 237, paragraphs 26A, 26B and 33A of the FACLS, seek to expand the ambit of the s 37A claim to include the vesting of the assets in the Trust in Vasquez, in addition to the issue of the 19,000 new shares – in other words to attack all of the constituent parts of the process by which SWAPL's rights to recover the debt became of little or no value. 2. In my view SWAPL should be permitted to expand its case in this manner. It does not seek to lead any new evidence in support of its claim and whilst it may be that the Defendants will want to expand the evidence from Mr Stanton and Ms Fernandez whose affidavits have already been served it is unlikely to involve extensive new evidence. 3. The Defendants complain of the delay in the bringing of these amendments but I do not think the delay has been inordinate, particularly having regard to the fact that SWAPL sought discovery from the Defendants and no company records or indeed any documents were produced. This became clear in late November with the draft amended pleadings being served on 16 December 2016. No report as to the affairs of SWAPL was ever provided by Mr Stanton to the liquidator. I am not satisfied that there would be any 'irremediable' prejudice to the Defendants as claimed by the Defendants if the amendments (including those relating to the s 237 application) are allowed. Nor am I persuaded that there is any need to vacate the hearing date. I will make orders for the filing of any further evidence by the Defendants. The Section 237 Application: 1. Before dealing with this it is necessary to say something about the SWAPL claim and the Defendants response to it. SWAPL claims: 1. That the judgment debt was one incurred on behalf of the Trust 2. That given that the judgment debt was incurred on behalf of the Trust it is entitled to be reimbursed out of the assets of the Trust both by reason of the terms of the Trust Deed and by reason of the Trustee Act 1925 (NSW) ("the Trustee Act") 3. That since it is entitled to be paid out of the assets of the Trust, and the only or principal asset of the Trust are the shares held in Bryve, the new trustee and Bryve had an obligation to protect the value of those shares to enable the lien to be discharged 4. The transfer of the Bryve shares to Vasquez did not include any provision for the payment of the judgment debt and the issue of 19,000 new shares diminished the value of the Trust assets. 1. The Defendants accept [14](a). They do not accept [14](b) asserting that the relevant clause of the Trust Deed, clause 8.4(i), does not apply because when SWAPL made a claim for indemnity from the Trust it was no longer a trustee – Clause 1.1(17) provides that: "Trustee means the Trustee or any subsequent trustee for the time being of the Trust as named in item 5 of the Schedule or as determined under this deed." 1. The Defendants also assert that the Trustee Act was 'ousted' by the terms of the Trust Deed so that the Trustee Act cannot be relied on to support the claim to indemnity. No authority was cited in support of that claim but the Defendants solicitors assert that such authority exists. 2. In relation to the s 37A claim, SWAPL contends that the transfer of shares is an alienation of property within the meaning of that section and there is authority: Hall v Poolman (2007) 215 FLR 243 particularly at [550] per Palmer J to support that contention. Those advising SWAPL are aware, however, that there is a contrary view. Against the possibility that it may be held that the issue of shares is not an alienation, SWAPL wishes to attack the issue of shares by Vasquez as a breach of the constitution of Vasquez and as involving a breach of directors' duties by Mr Stanton. 3. The Defendants' opposition to the amendments involving s 237, which I shall refer to as "the derivative proceedings", has a number of limbs, but they do not dispute that notice was given nor that Bryve will not itself bring the proceedings that SWAPL wishes to bring, matters required to be established by s237(a) and (e). The first basis of opposition is that the application by SWAPL is not brought in good faith because it is brought for an ulterior purpose. The second is that it would not be in the best interests of Bryve to have the share issue set aside because the $8,500 paid for the 19,000 shares would have to be refunded to the Third to Sixth Defendants (who have each filed submitting appearances in the proceedings and who did not appear on the motion.) The third basis is that Bryve cannot be both a defendant and a plaintiff in the same proceedings with two sets of Counsel contending for opposite results. The fourth basis is delay, with which I have already dealt. 4. In my view the proceedings are not brought for an ulterior purpose in the sense required, namely that they would have to amount to an abuse of process: see Swansson v Pratt [2002] NSWSC 583 at [36] – [38]. The personal interests of the applicant are not relevant: see Maher v Honeysett [2005] NSWSC 859 – it is obvious that persons who have a financial interest in the outcome will be the likely applicants for leave and such an interest is not an ulterior purpose. 5. SWAPL has seen its prima facie legitimate entitlement to be paid out of Trust assets seriously eroded and it is entitled to attack the issue of new shares which appear to have been created to deny the Plaintiff any prospect of recovery of its $945,000. This can also be expressed as a serious question to be tried for the purposes of s 237(d). 6. SWAPL contends that it is in the best interests of Bryve that SWAPL be entitled to maintain its derivative claims because: 1. There is no independent director who is capable of giving proper consideration to the bringing of proceedings on behalf of Bryve. 2. It is against the interests of Mr Stanton to bring these proceedings. 3. It avoids the need for further costs and expense for Bryve and avoids the possibility for inconsistent findings and potential Anshun or other estoppel issues. 4. It is in the best interests of Bryve to know who are its proper shareholders. 5. It allows all issues to be determined in one set of proceedings. 1. The Defendants contend that these benefits are illusory and they further contend that if the share transfers were set aside Bryve would be required to refund the $8,500 received from the new shareholders. 2. The question of what is in the best interests of a company involves quite complex issues as the consideration in Swansson v Pratt [2002] NSWSC 583; 42 ACSR 313 per Palmer J and Chahwan v Euphoric Pty Ltd [2008] NSWCA 52; (2008) 65 ACSR 601 per Tobias JA with whom Beazley and Bell JJA concurred and see also Gerard Cassegrain & Co Pty Ltd v Cassegrain; Cassegrain v Gerard Cassegrain & Co [2010] NSWSC 91 ("Cassegrain") at [114] demonstrates. 3. So far as the return of the $8,500 is concerned, there is a question as to whether any money was in fact paid, the amount is relatively small and there may well be a question as to whether the new shareholders would be entitled to recover their money (if paid) in any event if, for example, they were not informed that a former trustee of the Trust was or might be entitled to a lien on and indemnity out of the Trust assets including the shares, with the strong prospect of proceedings against Bryve (and Vasquez), which proceedings have already materialised and in which the new shareholders have filed submitting appearances. 4. In Cassegrain there was a prospect of recovery of money from the director but no such relief is sought here. If Bryve is protected against costs by, for example, SWAPL undertaking not to seek any order against it and accepting that should SWAPL fail in its claims including its attack on the share issue by reason of an alleged breach of Bryve's constitution or by Mr Stanton of his duties it will meet those costs, that should ameliorate the downside of the derivative proceedings. 5. The integrity of a company's register is an important matter and I think it is in the best interests of a company that any irregularity in the issue of its own shares is investigated and if disputed determined. It is clear that there will be no investigation whilst Mr Stanton is in control since he is the person who, on his own evidence, organised the issue of the new shares. It may well be that Bryve, through the actions of Mr Stanton, has assisted Vasquez to defeat SWAPL's legitimate interest in the total share capital of Bryve. 6. I think there is a clear advantage or benefit to Bryve to have the legitimacy or otherwise of the share issue determined in these proceedings, rather than in separate subsequent proceedings. 7. Bryve is a small company that does not appear to itself carry on any trade or business, but it holds an interest in Shaw River Management and there is some evidence that it may have a security interest registered under the Personal Property Securities Act 2009 (Cth). 8. I observe that it seems to have been accepted in Swansson and Chahwan that for an order to be made the Court must be satisfied that it is in the best interests of the Company but the section literally says that the Court must grant leave if all of the conditions are fulfilled and does not say that it cannot grant leave if one or more conditions have not been fulfilled. This point was not argued before me and I do not therefore express any concluded view on this topic. 9. It has been held that in considering what is in the best interests of the company for the purposes of s 237 context is important and includes the best interests of shareholders: Cassegrain at [79] and the interests of the general body of creditors when the company is insolvent: Charlton v Baber [2003] NSWSC 745 per Barrett J (as his Honour then was). SWAPL is a creditor of Vasquez as the new trustee, rather than Bryve, but the shareholding in Bryve, held by Vasquez, and Bryve's worth as a company are very closely linked to SWAPL's ability to be indemnified out of the Trust assets. Clearly Vasquez has no intention of protecting the worth of the shareholding that it formerly held in Bryve, eroded by the creation of the new shares. Vasquez's role in the diminution of value will no doubt be the subject of scrutiny in the proceedings, but it is only SWAPL that is willing to challenge the validity of the share issue. 10. Taking all matters into account, I think that it is in the best interests of Bryve to have the claims of SWAPL relating to the issue and transfer of shares heard together with the s 37A claim and within the existing proceedings. 11. In relation to the third issue, this raises a difficult procedural concern. A company cannot be both a plaintiff and a defendant in the same proceedings. Mr Russell drew my attention to Cassegrain in which his Honour had to consider whether a member of a company could intervene on behalf of the company which was already a defendant to bring proceedings pursuant to s 237. Mr Ratnam contended that Cassegrain was distinguishable from the present because here there are no oppression proceedings on foot and he also referred to Power v Ekstein [2010] NSWSC 137, another decision of Austin J in which Cassegrain was applied. 12. In Cassegrain, Gerard Cassegrain & Co pty Ltd ("the company") sued a director of the company and the director's wife claiming that the director (Claude Cassegrain) had transferred real estate away from the company in breach of his duties as a director. Those proceedings, described as the derivative proceeding, had been the subject of leave pursuant to s 237 sought by Denis Cassegrain ("Denis"). Denis also commenced separate proceedings (known as "the oppression proceedings") in his own right whereby he sought relief on the statutory oppression ground in s 232-234 of the Corporations Act, in which proceedings the company, Claude, and Claude's wife were defendants. 13. Austin J described Denis at [120] as seeking "to make a further intervention for the purpose of taking responsibility on behalf of the company for particular steps, namely those concerning bringing and prosecuting the derivative claims." He held that since Cassegrain was not a case where leave was sought to bring proceedings on behalf of the company, s 236(2) did not apply to require the company to become a plaintiff. His Honour at [121] cited as authority for this approach Metyor v Queensland Electronic Switching [2002] QCA 269. His Honour then went on to say: 122 If it were necessary for the Company to be plaintiff, to the extent that the amended proceedings would make derivative claims, the result would be absurd. The same entity would, as plaintiff, be under the effective control of the minority shareholder for the purpose of prosecuting derivative claims, and under the effective control of the majority shareholder for the purpose of dealing with the oppression claims. At the very least, that would lead to complexity in the hearing of the case and in making appropriate costs orders. Further, opposing solicitors would be required to act for the Company in its respective capacities, and if the oppression proceedings are successful, the Court might be required to make orders against one plaintiff for the benefit of the other. If conversely, the Company is allowed to remain as first defendant, it can be treated for practical purposes as only a nominal party, the real protagonists being the plaintiff who asserts personal claims for relief under the statutory oppression ground, and derivative claims for relief that will go for the benefit of the Company; and his real opponents will be clearly identified as the second and subsequent defendants, against whom substantive relief is sought both on the oppression and the derivative grounds. 123 That leads me to the other matter of contention in the submissions of the parties. The defendants claim that derivative proceedings under Part 2F.1A cannot be brought in the same proceedings as claims under Part 2F.1 (oppression etc). In my opinion, there is no absolute bar to combining derivative and oppression claims in the same proceedings. The issue is to be assessed as a matter of practicalities, having regard (in this jurisdiction) to the overall requirement in s 56(1) of the Civil Procedure Act, which is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The essential complaint raised by Denis is that Claude and Mr Sarks, as directors of the Company, have allowed the Company's valuable property to be transferred away at a gross undervalue to a person who is the wife of one of them at the daughter of the other. That complaint has been expressed legally in two causes of action. One is a minority shareholder claim to the effect that the directors have acted on behalf of the Company in a manner that is contrary to the interests of the members as a whole and oppressive to, unfairly prejudicial to, and unfairly discriminatory against, Denis as a member of the Company. The other will be a derivative claim in which Denis, by leave, asserts the Company's right to complain that the transfers of its property were made by the directors in breach of their duties to it. But the factual subject matter of the causes of action is essentially the same, and so it is appropriate under s 56(1) to allow the two causes of action to be brought in a single set of proceedings. 124 The authorities indicate that it is possible to bring derivative and oppression claims together in the same proceedings, and appropriate to do so if that is the best practical way to resolve the real dispute between the parties: see Keyrate Pty Ltd v Hamarc Pty Ltd (2001) 38 ACSR 396, [2001] NSWSC 491, at [16]-[19]; Lakshman v Law Image [2002] NSWSC 888; Metyor v Queensland Electronic Switching, above; Ehsman v Nutectime (2006) 56 ACSR 705, [2006] NSWSC 887, at [26]-[27]; Matyear v Prismex Technologies Pty Ltd [2008] NSWSC 677. I am satisfied that combining the oppression and derivative claims concerning the transfer of the CaTTO and OAL shares will be the most effective way of addressing the real dispute within the Cassegrain family concerning those transactions. 1. In Ekstein, Austin J took the same approach as he had done in Cassegrain and did so in a context where the applicant was seeking leave to commence proceedings in the name of the company but the company was already joined. His Honour said: 33 The plaintiff is shareholder of each of the five Companies and as such she has standing to apply the leave of s 236(1). The respondents submitted that if leave is granted, s 236(2) will require the proceedings to be brought in the name of the relevant company, and therefore the plaintiff will be left in the position of both is suing and sitting on behalf of the same companies in the same proceedings. But that is not so. When proceedings are already constituted and the company is a defendant, and derivative claims are to be added to the proceedings, the weight of authority indicates that the company may remain as a defendant. In Gerard Cassegrain & Co Pty Ltd v Cassegrain [2010] NSWSC 91 I considered a similar argument and said [His Honour then set out [120]-[121] of Cassegrain]… 34 The interlocutory process in the present case seeks leave to "bring proceedings", but plainly what is intended is to secure leave to permit the plaintiff to proceed in the manner set out in the amended statement of claim; that is, the plaintiff wishes to be able to combine the derivative claims with claims based upon oppression, equitable principles and other matters. That is, she seeks to make a "further intervention" by asserting the derivative claims in existing proceedings. 1. In [33]-[34] of Ekstein his Honour recognises that since there were already proceedings on foot in which the company was a defendant there was no need to have fresh proceedings commenced. What the grant of leave pursuant to s 237 did was to enable the Plaintiff to ventilate matters relating to the company's conduct of affairs that it would otherwise be precluded from doing, but his Honour did not view s 236 of the Act as requiring joinder of the company as a plaintiff where it was already joined as a defendant. 2. I have given consideration as to whether it would be more appropriate to require SWAPL to commence fresh proceedings by way of Summons and to order that those proceedings be heard together with the extant proceedings, with evidence in one being evidence in the other. Mr Russell contended that such a course would be unnecessary and involve additional cost for no discernible benefit. Mr Ratnam thought that course would overcome the procedural difficulties. 3. I regard as significant the following matters: 1. SWAPL as a former member of Bryve should be able to challenge the legitimacy of the share issue and to assert that the share issue and related acts involved Mr Stanton as acting in breach of his obligations as director of Bryve in breach of s 181 of the Act. Mr Ratnam at one point claimed that derivative proceedings were not necessary for such a case to be advanced but resiled from that position. 2. That the area of enquiry for the derivative proceedings involves the same substratum of facts as the s 37A case and the same witnesses. 3. That it would be unfortunate and a waste of resources if the Court had to hear the two matters at different times with a potential inconsistency of outcome. I regard it as of considerable significance that the sole directors of Bryve and Vasquez are already deponents in this case. Presumably (and it was not suggested otherwise) they are the only persons who could give evidence on the question of the legitimacy of the share issue and share transfers. The Court is required to give consideration to the requirement of s 56 to s 58 of the Civil Procedure Act 2005 (NSW) as Mr Russell pointed out and I think that the approach adopted by Austin J accords with the requirements of the Civil Procedure Act. 1. I was not taken to any authority in which the course taken by Austin J in Cassegrain and Ekstein had been the subject of doubt. Mr Ratnam's only contention as to these cases is that Cassegrain is distinguishable because here the Plaintiff's Notice of Motion seeks leave to commence proceedings. Mr Russell at T.20.9-T.20.10 conceded that what his client seeks to do is intervene. I think Ekstein at [34] depletes Mr Ratnam's submission of any force. I think there are sufficient similarities between the situation with which his Honour was dealing in Cassegrain and Ekstein and this case to follow his Honour's approach. I respectfully agree with his Honour that it would not be appropriate for a company to be both a plaintiff and defendant in the one proceedings. In reality what SWAPL will be able to do by reason of a grant of leave is, within proceedings already commenced, to maintain an argument concerning the issue of the shares which Bryve, under the control of Mr Stanton, clearly does not want to run and will not run. The grant of leave permits SWAPL to maintain an argument that without leave it could not otherwise run because it involves the question of internal corporate management. 2. It follows that the Plaintiff has met the requirements of s 237 and should be granted leave. Conclusion: 1. Accordingly the Plaintiff is entitled to the amendments sought and to leave pursuant to s 237, but attention will need to be given to the precise form of orders including the question of an undertaking in respect of Bryve's costs arising by reason of the derivative claims. I will also hear the parties on the issue of costs of the Plaintiff's notice of motion. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 February 2017