12 Gummow J was not prepared to take that course.
13 These observations were interpreted by some (for example, the authors of the commentary in the CCH Australian Corporations and Securities Law Reporter) as supporting a conclusion that Part 2F.1A did not apply to a company in liquidation. In my view, that was a misconception of what his Honour had said. What he said was that the ordinary rule is that in an ordinary case the court should not entertain a derivative action where a company is in liquidation. That does not mean that in extraordinary cases leave might not properly be given under section 237.
14 The issue has been the subject of a number of first instance decisions, almost all of which have held that Part 2F.1A does apply to a company in liquidation. These decisions are referred to in Barrett J's recent judgment in Carpenter v. Pioneer Park[3]. At paragraph 8 of that judgment Barrett J observes that the question should now be regarded as settled. I agree. Part 2F.1A does apply to a company in liquidation.
15 This conclusion does not, in my view, detract from the cogency of Gummow J's observations as to what should be the ordinary rule. It ought to be only in an extraordinary case where the court will consider permitting the liquidator's role to be supplanted in the pursuit of litigation on behalf of the company.
16 The circumstances here are an instance of such extraordinary circumstances. The liquidators here have completed their principal commercial function. They have realised sufficient assets to pay all creditors in full. The issue to be litigated is, in substance, one between the members. It is a further development in a series of disputes between the members which began before the liquidation commenced. It seems to me that, provided the criteria in section 237 are satisfied, it is far more satisfactory if the member concerned, Mr Scuteri, pursues the matter at his expense rather than that the liquidators pursue it using the modest surplus of funds which they currently hold.
17 The liquidators did not appear at the hearing today but indicated on 21 July 2006 through their counsel that they did not oppose leave being granted.
18 Turning then to the criteria in section 237(2), it seems to me that the position is as follows.
19 It is probable that the company will not bring the proceeding itself. The liquidators have made that clear.
20 In my view, the applicant, Mr Scuteri, is acting in good faith. It seems to me that the material establishes that he has an honest belief that there is a good cause of action. There is no material indicating that he has a collateral purpose.
21 The question of whether the proposed action is in the best interests of the company is one to which Mr Minahan directed some observations. He referred to the fact that the liquidation is almost complete and suggested that there are other courses of action available to Mr Scuteri in order to pursue the matter. It seems to me that such other courses would not be appropriate. If a wrong has been done here, the likelihood is that it is a wrong done to the company and the remedy ought to result in a return to the company rather than some other outcome.
22 Mr Minahan also submitted that the proposed claim remains unarticulated. He also submitted that leave should not be granted unless it appears that the proposed action is in the best interests of the company, rather than that it may be or is likely to be. I accept that. It seems to me that the circumstances here are such that, provided provision is made to address any costs risk, it is in the best interests of the company that the matter that Mr Scuteri has raised is pursued. I take this view because it seems to me that, provided the company is protected from any costs liability, the detriment of the claim failing should fall solely on Mr Scuteri, whereas the benefit of it succeeding should enhance the company's position and increase the company's assets to the benefit of all of the members. The costs risk can be addressed by appropriate orders or an undertaking.
23 It seems to me that the applicant's material does establish that there is a serious question to be tried. There is not only the coincidence in timing which raises concerns, there is also the circumstance that for some reason it was thought appropriate that Mr Senn should be the only office bearer during the period between 18 October 2005 and 17 February 2006, but then, Fresh Start having gone into liquidation, Mr Po and Mr Scibilia emerge as the two directors. I, of course, express no view as to the likely outcome of the proposed action but it does seem to me that a serious question to be tried has been demonstrated.
24 Given the circumstances of the application and the matters that transpired on 21 July 2006, it is appropriate, in my view, to grant leave notwithstanding the fact that section 237(2)(e)(i) has not been satisfied.
25 Subject to two matters, I conclude that leave ought to be granted in this case.
26 The further matters are these. Fresh Start and the defendant liquidators need to be protected in relation to costs liability; and the liquidators need to be able to monitor the progress of the proceeding so as to ensure that the liquidation does not become unduly protracted. Accordingly, I propose to grant leave only if Mr Scuteri is prepared to undertake: