The applicant in the current proceeding, Aleksandra Czerwinski is a shareholder of Syrena Royal Pty Ltd. As such it was submitted that she was entitled to access to the documents sought under s.247A of the Corporations Law.
[2]
Ultimately, the position of the Syrena Royal interests in the current proceeding was that the documents sought in category (i) have been discovered in the first proceeding, the documents in category (ii) are non-existent and otherwise all categories of documents are subject to legal professional privilege and have not and will not be produced for that reason subject to court order.
[3]
The only evidence in support of the Czerwinski interests in the application before me was the alleged concern of the applicant that there was a lack of adequate explanation as to the circumstances surrounding and the disposition of the proceeds of sale of the Polish business, namely the sum of $US50,000. The evidence was provided by way of affidavit of the applicant's solicitors. The applicant herself as shareholder did not provide evidence to the court on affidavit. As a consequence, this court was entirely lacking knowledge and information as to the purpose of the applicant in instituting this proceeding. Significantly, an examination of paragraph 13 of the defence and counterclaim filed in the first proceeding disclosed that the applicant in the present proceeding, Aleksandra Czerwinski has not alleged that she was involved in any way with the transactions whereby contributions of money were made to the business partnership or, more importantly that she herself made any contribution. In all the circumstances, therefore, I have strong reservations as to whether the applicant in the current proceeding, Aleksandra Czerwinski is seeking to protect or investigate any investment made by her in relation to the business partnership.
[4]
Be that as it may it is apparent from the affidavits before me in the current proceeding that extensive production of documents has occurred in the first proceeding on behalf of Syrena Royal Pty Ltd. Moreover, the claim for privilege by Syrena Royal in the first proceeding has not been challenged in that proceeding. In my view the power under s.247A of the Corporations Law is a discretionary power whereby if the court is satisfied that it is appropriate to do so may order inspection and production of documents. In the circumstances of this matter, particularly the lack of evidence to demonstrate the true interest of the applicant in obtaining access to the documents other than that she is technically a shareholder in Syrena Royal Pty Ltd combined with the fact that there has been no effort to pursue the privilege issue in the first proceeding leads me to conclude that the applicant does not seek the relevant documents under s.247A of the Corporations Law for a genuine purpose. The approach of the applicant in the current proceeding has all the hallmarks of a tactical manoeuvre adopted to bypass difficulties and overcome the claim for legal professional privilege in the other proceeding. In this respect the applicant in the current proceeding seeks to use s.247A of the Corporations Law for an ulterior purpose. Section 247A of the Corporations Law is intended to enable a member of a company to inspect books in order to obtain information about matters that, as member or shareholder in the company, that member or shareholder ought be informed of by the company. The procedure under s.247A is not intended as a form of or substitute for inspection of documents to overcome the obstacle of legal professional privilege claimed in another proceeding (see also Re Claremont Petroleum N.L. (No. 2) (1990) 8 ACLC 548; also, Claremont Petroleum N.L. v AGL (1990) 1 ACSR 504). The position is moreso in circumstances where the party seeking to exercise a statutory right to documents has no real investment to protect by reason of access to the documents of the relevant company (see Quinlan v Vital Technology Australia Ltd (1987) 5 ACLC 389, 393; also, Intercapital Holdings Ltd v MEH Limited & ors (1988) 13 ACLR 595, 602).
[5]
In the present matter I cannot be satisfied that the applicant is acting in good faith or that the inspection pursued is made for a proper purpose. Rather, on the basis of the affidavits before me it is apparent that the Czerwinski interests seek to utilise the current proceeding to overcome the difficulties they have encountered in the first proceeding where the Syrena Royal interests have claimed legal professional privilege.
[6]
Ultimately, the statutory right of a shareholder such as the applicant in the current proceeding to gain access to documents pursuant to s.247A of the Corporations Law is properly construed as a remedial or last resort provision. Section 247A of the Corporations Law confers a discretionary power on the court to order inspection of documents in circumstances where it is otherwise impossible and the party seeking access to the documents has a bona fide interest in such access and the inspection is made for a proper purpose (see Re Augold N.L. (1987) 2 Qd R 297; also, Barrack Mines Ltd v Grants Patch Mining Ltd (1988) 1 Qd R 606; Intercapital Holdings Ltd v MEH Ltd, supra; Biala Pty Ltd & Anor v Mallina Holdings Ltd (1990) WAR 371; Cescastle Pty Ltd v Renak Holdings Ltd (1991) 6 ACSR 115; Knightswood Nominees Pty Ltd v Sherwin Pastoral Company Ltd (1989) 15 ACLR 151). For these reasons the applicant's attempt to access documents under s.247A of the Corporations Law for the purposes of achieving a purpose relating to the first proceeding must be refused. The amended notice of motion will be dismissed.