//
[2026] QSC 40
General information, not legal advice.
Supreme Court of Queensland
2026-03-03
Smith J
Original judgment source is linked above.
CORPORATIONS - DERIVATIVE ACTION - WHETHER LEAVE SHOULD BE GRANTED TO JOIN A COMPANY - where the plaintiff was a 49 per cent shareholder of the company - where the second defendant and then another company controlled by the defendants was a 51 per cent shareholder - where the plaintiff alleges that the defendants have converted monies to their own use from the company - where monies were paid to two other companies of which the first defendant was the controlling mind - whether there was a breach of fiduciary duty - whether an order should be made permitting the plaintiff to bring proceedings on behalf of the company - whether there is a serious question to be tried - whether an indemnity should be ordered
Agricultural Land Management Ltd v Jackson (No 2) [2014] WASC 102; (2014) 48 WAR 1, considered
Allco Funds Management Limited v Trust Company (RE Services) Limited [2014] NSWSC 1251, considered
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199, cited
Australian Careers Institute Pty Ltd v Australian Institute of Fitness [2016] NSWCA 347; (2016) 340 ALR 580, applied
CIP Group Pty Ltd v So [2022] FCA 1490; (2022) 164 ACSR 566, applied
Commonwealth Bank of Australia v Smith [1991] FCA 375; (1991) 42 FCR 390, applied
Goozee v Graffic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 170 FLR 451, applied
Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41, applied
Hyperion Technology Pty Ltd v Queensland Motorways Ltd [2013] QSC 20, cited
Menhaden Pty Ltd v Citibank NA [1984] FCA 193; (1984) 1 FCR 542, cited
Metyor Inc v Queensland Electronic Switching Pty Ltd [2002] QCA 269; [2003] 1 Qd R 186, applied
Mio Art Pty Ltd v Mango Boulevard Pty Ltd [2018] QSC 31, cited
R v Byrnes [1995] HCA 1; (1995) 183 CLR 501, cited
Spellson v George [1992] NSWCA 254; (1992) 26 NSWLR 666, cited
Swansson v RA Pratt Properties Pty Ltd [2002] NSWSC 583; (2002) 42 ACSR 313, applied
Woolworths Ltd v Kelly (1991) 22 NSWLR 189, applied
[1] The plaintiff Mr May is a motor mechanic. He was a friend of the first defendant Mr Christopher McCurdy who was also a motor mechanic. Mr McCurdy operated a business called Auto Trans-Tech Qld Pty Ltd ("ATTQ").
[2] ATTQ operated a business which specialised in automatic transmission repairs and servicing. Mr McCurdy and Mr May entered into discussions for Mr May to enter the business.
[3] In early to mid-May 2023 an agreement was made for the plaintiff to purchase 49 per cent of ATTQ's share capital for the sum of $100,000. On 16 June 2023 an additional 116 shares were issued to the plaintiff. 51 per cent of the shares were owned by the second defendant Ms McCurdy.[1] Mr May thought that the accountant for ATTQ was acting in his interests as well as in ATTQ's interest. The accountant prepared documentation for his entry into the company.
[4] Mr McCurdy oversaw management of the business and Ms McCurdy conducted bookkeeping and administration work for the business. Until 2 December 2025 Mr May was employed by ATTQ as the manager of the business.
[5] In 2025 Mr May became concerned that certain supplier accounts to ATTQ had been closed certain and money had been siphoned out of the business to the McCurdy's by way of fictitious loans and unexplained payments. He was concerned that Mr McCurdy took fictitious wages, assets had been removed and there were unexplained ATO debts. In other words, it is alleged that the defendants used the company for their own financial purposes.
[6] On 2 December 2025 Mr May's employment with ATTQ was terminated.
[7] On 12 August 2025 Mr May filed a claim and statement of claim against the defendants claiming as follows:
(a) Damages against the first and second defendants pursuant to ss 180-182 of the Corporations Act 2001 (Cth) ("CA") in the amount of $745,846.
(b) Damages against the first and second defendants for breach of fiduciary [duty] in the amount of $745,846.
(c) Pecuniary compensation pursuant to s 137(1)(h) of the CA in the amount of $373,000.
(d) Declarations.
(e) Costs.
[8] On 4 November 2025 Martin SJA struck out the statement of claim but granted leave to the plaintiff to replead his action subject to his applying under the CA to commence derivative proceedings.
[9] Accordingly, this application is one pursuant to s 237(1) of the CA for the plaintiff to be granted leave to bring an action on behalf of ATTQ.
[10] There is a further application under s 247A(3) of the CA for leave to inspect the books of account of ATTQ.
"236 Bringing, or intervening in, proceedings on behalf of a company
(1) A person may bring proceedings on behalf of a company, or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for those proceedings, or for a particular step in those proceedings (for example, compromising or settling them), if:
(i) a member, former member, or person entitled to be registered as a member, of the company or of a related body corporate; or
(ii) an officer or former officer of the company; and
(b) the person is acting with leave granted under section 237.
(2) Proceedings brought on behalf of a company must be brought in the company's name.
(3) The right of a person at general law to bring, or intervene in, proceedings on behalf of a company is abolished.
Note 1: For the right to inspect company books, see subsections 247A(3) to (6).
Note 2: For the requirements to disclose proceedings and leave applications in the annual directors' report, see subsections 300(14) and (15).
Note 3: This section does not prevent a person bringing, or intervening in, proceedings on their own behalf in respect of a personal right.
(1) A person referred to in paragraph 236(1)(a)[2] 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
(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
(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:
(iii) to discontinue, settle or compromise the proceedings; and
(c) all of the directors who participated in that decision:
(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.
(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 1: Related party is defined in section 228.
Note 2: For who is a third party of a CCIV, see section 1227H."
[12] It may be seen that the criteria of which the court must be satisfied before making an order are as follows:
IT IS PROBABLE THAT THE COMPANY WILL NOT ITSELF BRING THE PROCEEDINGS OR PROPERLY TAKE RESPONSIBILITY FOR THEM OR FOR THE STEPS IN THEM
[13] In Swansson v RA Pratt Properties Pty Ltd[4] it was said that in most cases it will be readily apparent whether this requirement is satisfied because usually the defendant in the proposed derivative action is in control of the company or is supported by the majority of shareholders or of the board. It is not disputed in this case that this element has been satisfied.
[14] The plaintiff submits that he has an honest belief that a good cause of action exists and the company has reasonable prospects of success. He has no ulterior motive for bringing the derivative action which would amount to an abuse of process. He wants the books and property of ATTQ assessed and any discrepancies corrected. There is no other motive other than to enforce the company's legal rights.
[15] The defendants submit that the applicant is not acting in good faith. It is submitted that he has filed two interlocutory applications which have failed; his statement of claim was struck out; he discontinued his claim against the former third defendant and he has filed an unfair dismissal claim. It is also submitted that he opened a bank account and deposited funds from ATTQ into that account and had no authority to do so.
[16] In Swansson v RA Pratt Properties Pty Ltd[5] the court held there were two factors in determining good faith:
(a) The first is whether the applicant honestly believes that a good cause of action exists and has a reasonable prospect of success; and
(b) Whether the applicant is seeking to bring the derivative suit for such a collateral purpose as would amount to an abuse of process.
[17] In this case the applicant has sworn directly that he has an honest belief that a good cause of action exists and there are reasonable prospects of success.
[18] Despite the defence submissions I am also not satisfied that he has an ulterior motive to bring this action such that it is an abuse of process. In my view he has genuine concerns about the conduct of the defendant's vis à vis the company. I find that he has a genuine interest as a 49 per cent shareholder in assessing the books of account of the company and have discrepancies corrected. It is true that he has lost earlier applications, but I note he has now changed lawyers who appear to be taking appropriate steps on his behalf.
[19] The plaintiff submits that the causes of action brought by him are likely to result in the improved finances for ATTQ if successful. It is not simply a matter of a cost benefit analysis of the possible outcomes of the litigation. This is an action which vindicates the rights of the minority because the majority have acted as wrongdoers.
[20] The defendant on the other hand submits that it is difficult to see how granting leave to pursue claims totalling $139,000 could be in the interests of ATTQ where Ms Murdoch deposes that the costs of pursuing the matter to trial are estimated to be $169,300. Ms Cox on the other hand estimates costs will be $276,200. The applicant is not offered any indemnity for any costs that may be awarded against ATTQ and even if he had there is no evidence he would be able to satisfy it. If the court is minded to grant leave it should be subject to the applicant paying security in the sum of $250,000.
[21] In CIP Group Pty Ltd v So[6] Derrington J analysed the meaning of "best interests of the company" and noted as follows:
(a) The phrase is cast at a high level of generality but looks at the company's separate and independent welfare. This may involve an examination of the interests of the shareholders and even of the creditors.
(b) The court must be satisfied to more than a prima facie level that the proposed derivative action is in the best interests of the company.
(c) The court will take into account all of the circumstances including the character of the company, evidence of the company's business position, whether the redress can be advanced without the need for litigation and evidence of the defendant's ability to meet a judgment.
[22] In Metyor Inc v Queensland Electronic Switching Pty Ltd[7] it was noted:
(a) To determine the best interests of a company does not necessarily require a cost benefit analysis of the possible outcomes of the litigation.
(b) It may be sufficient if there are two conflicting groups of shareholders one of whom is as the minority, unable to set the company in motion to vindicate its rights because the majority who are alleged to be the wrongdoers oppose the company doing so.
[23] To a certain degree the answer to this question is intertwined with an examination of whether there is a serious question to be tried. Whilst it may be true that a cost benefit analysis is not necessarily determinative of the matter it would be hard to see e.g. a $10,000 claim as justified if the expected costs were $100,000. I do consider this is a factor to be considered.
[24] With respect to the costs estimates I note that Ms Cox's estimate is for all of the actions (including the plaintiff's individual actions). I am more inclined to accept the cost estimate of $169,000.
[25] In this particular case as I later note there are sufficient allegations of misconduct which if proved show that the defendants may have acted contrary to the company's interests and which if proved total in excess of $400,000.
[26] In those circumstances and bearing in mind my later discussion as to the questions to be tried it is in the best interests of ATTQ to grant leave.
[27] On the other hand, the result is by no means certain. For the reasons I later give I have decided to order the plaintiff provide an indemnity in the sum of $75,000.
[28] The plaintiff submits there is a serious question to be tried by reason of the matters set out in his affidavit.
[29] On the other hand, the defendant submits any serious question to be tried is impossible to identify. It is submitted that Mr McCurdy has provided a detailed response to the allegations of Mr May and the respondent's position is that Mr May has materially misunderstood the management of ATTQ. Further there is no statement of claim which assists in determining what questions there are to be tried. In those circumstances this limb has not been satisfied.
[30] In Goozee v Graffic World Group Holdings Pty Ltd[8] it was said:
"a serious question to be tried can be found only by reference to an infringement of some legal or equitable right or the commission of some legal or equitable wrong with the result that the issue needs to be approached by inquiring whether there exists in the circumstances and on the evidence a sufficiently cogent showing of some such infringement or wrong to warrant the imposition or an order to preserve the status quo pending full investigation."
[32] However, in light of the way the matter was argued by the parties it is necessary for me to descend into some detail of each of the complaints made by Mr May and the factual matters raised in the material.
[33] In addition to being the director of ATTQ Mr McCurdy was a director of two other companies namely Coastline Automatic Transmission Specialists (Coastline) and Southeast Queensland Torque Converters (SEQTC). In addition, McCurdy Holdings Pty Ltd (the 51 per cent shareholder in ATTQ) is the sole shareholder in SEQTC and Coastline.
[34] Coastline is also a mechanical business which specialises in automatic transmission repairs and services. Mr May swears it is in direct competition with ATTQ. Mr McCurdy denies this but there is no doubt a triable issue on that point.
[35] SEQTC is a mechanical specialist in torque converters and was a supplier to ATTQ. From July 2023 until July or August 2024 SEQTC occupied the neighbouring unit to ATTQ at 9 Monty Street Slacks Creek.
[36] Mr May swears that he was informed by the defendants during the negotiations in March to June 2023 that they had paid $250,000 for the business of ATTQ. Mr McCurdy by way of response denies that he told the plaintiff he purchased the business for $250,000 but said he got it for $150,000. Again, there is a triable issue on that point. It will no doubt be argued by Mr May that the reason $150,000 was not mentioned was because it may have been unlikely, he would have contributed $100,000 for a 49 per cent shareholding when the whole business was purchased for $150,000.
[37] He says that after he became involved with the business, he became the head mechanic and workshop manager. The finances and books of account were managed by Ms McCurdy. He disposes of a number of issues that he has now discovered.
[38] Before I turn to the detail of this I note as follows. There is no doubt that a director of a company owes fiduciary duties to that company.[11] A fiduciary owes an obligation not to put himself or herself in a position of conflict where there is a real or substantial possibility of conflict between the director's interests and the director's duty to the company. As to whether there is a breach, the test is whether there is real and substantial possibility of a conflict.[12]
[39] In Commonwealth Bank of Australia v Smith,[13] the Full Court of the Federal Court said that a fiduciary must avoid placing himself or herself in a position between duty and personal interest and must avoid conflicting engagements. The reason is that with multiple engagements, the fiduciary may be unable to adequately discharge one without conflicting with his or her obligation and the other. It is not to the point that the fiduciary himself or herself may not stand to profit.
[40] In Allco Funds Management Limited v Trust Company (RE Services) Limited[14] Hammerschlag J considered a case where a director of a company voted to cause that company to enter into a contract with another company of which he was also director. His Honour held that Directors of a company owe fiduciary duties to act in the best interests of the company and should not enter into engagements which may conflict with that duty without full disclosure.
[41] As Edelman J said in Agricultural Land Management Ltd v Jackson (No 2)[15]:
"The 'conflict rule' when concerned with conflicts between duty and personal interest is not limited merely to situations in which a fiduciary actually prefers personal interest. It includes also situations involving a potential for personal interest to be preferred or a potential for breach of duty to one principal where conflicting duties are owed to different principals."
[42] Where there is a conflict, it may be resolved where the director has made full and complete disclosure about their conflict of interest and the shareholders of the company approved this by resolution. In Woolworths Ltd v Kelly [16] it was held that a contract made in breach of fiduciary duty will be voidable at the option of the company unless the director makes a full disclosure of the nature of his interest in the contract to the members of the company at a general meeting.
[43] In R v Byrnes,[17] it was noted that being a fiduciary, the director of a first company must not exercise his or her powers for a benefit or gain of a second company without clearly disclosing the interests and obtaining the first company's consent.
[44] The authorities make it clear that disclosure needed to have happened to the shareholders who could approve of any conflict. All facts should have been disclosed.[18]
[45] The CA provides as to the duties of directors and office holders of companies as follows:
"180 Care and diligence--civil obligation only
Care and diligence--directors and other officers
(1) A director or other officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they:
(a) were a director or officer of a corporation in the corporation's circumstances; and
(b) occupied the office held by, and had the same responsibilities within the corporation as, the director or officer.
Note: This subsection is a civil penalty provision (see section 1317E).
(2) A director or other officer of a corporation who makes a business judgment is taken to meet the requirements of subsection (1), and their equivalent duties at common law and in equity, in respect of the judgment if they:
(a) make the judgment in good faith for a proper purpose; and
(b) do not have a material personal interest in the subject matter of the judgment; and
(c) inform themselves about the subject matter of the judgment to the extent they reasonably believe to be appropriate; and
(d) rationally believe that the judgment is in the best interests of the corporation.
The director's or officer's belief that the judgment is in the best interests of the corporation is a rational one unless the belief is one that no reasonable person in their position would hold.
Note: This subsection only operates in relation to duties under this section and their equivalent duties at common law or in equity (including the duty of care that arises under the common law principles governing liability for negligence)--it does not operate in relation to duties under any other provision of this Act or under any other laws.
business judgment means any decision to take or not take action in respect of a matter relevant to the business operations of the corporation.
(1) A director or other officer of a corporation must exercise their powers and discharge their duties:
(a) in good faith in the best interests of the corporation; and
Note 1: This subsection is a civil penalty provision (see section 1317E).
Note 2: Section 187 deals with the situation of directors of wholly - owned subsidiaries.
(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.
Note 2: This subsection is a civil penalty provision (see section 1317E).
Use of position-directors, other officers and employees
(1) A director, secretary, other officer or employee of a corporation must not improperly use their position to:
(a) gain an advantage for themselves or someone else; or
Note: This subsection is a civil penalty provision (see section 1317E).
(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.
Note 2: This subsection is a civil penalty provision (see section 1317E).
Use of information-directors, other officers and employees
(1) A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to:
(a) gain an advantage for themselves or someone else; or
Note 1: This duty continues after the person stops being an officer or employee of the corporation.
Note 2: This subsection is a civil penalty provision (see section 1317E).
(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.
Note 2: This subsection is a civil penalty provision (see section 1317E).
185 Interaction of sections 180 to 184 with other laws etc
(a) have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of their office or employment in relation to a corporation; and
(b) do not prevent the commencement of civil proceedings for a breach of a duty or in respect of a liability referred to in paragraph (a).
This section does not apply to subsections 180(2) and (3) to the extent to which they operate on the duties at common law and in equity that are equivalent to the requirements of subsection 180(1)."
[46] The plaintiff proposes to rely on breaches of these sections in the proposed action and for an aiding and abetting action against the second defendant under s 79 of the CA. The remedy of an account or restitution might also be available for conversion.
[47] Mr May alleges that on a number of occasions Mr McCurdy would enter the ATTQ workshop and take transmissions. He knows that the transmissions were taken to Coastline. This happened up to five times. Each transmission was worth approximately $10,000. The total discrepancy is $50,000.
[48] Mr McCurdy agrees that transmissions have been shared between the two entities but claims notes were taken and recorded and they were always replaced. He denies the valuation set out. He denies there is any discrepancy.
[49] I consider the truth remains to be seen and there is a triable issue on this point.
[50] In around December 2024 the applicants says that Ms McCurdy said to him, "if you need to use the credit card you need to let me know first as there is not enough on it." He was told by Mr Thissen the previous owner of the business that something was not right. Mr May found this odd.
[51] By way of response Mr McCurdy said that this discussion occurred in January 2025. The business has been closed for the holiday period and there was no cash flow. The conversation took place to save Mr May from embarrassment if the card was declined.
[52] In light of the absence of any concrete evidence of misconduct, I am not satisfied there is a triable issue on this point at this stage.
[53] Mr May says that when he returned from leave in January 2025, he became aware that some suppliers to ATTQ had closed their books due to non-payment and he was surprised by this.
[54] Mr McCurdy says that no suppliers had closed their books, but he admits that two suppliers put their accounts on hold because the business had been closed, there was no cash flow and the staff responsible for paying invoices had been on leave and payments were delayed.
[55] One thing I do observe is that payments were received by the business throughout December 2024 and January 2025 which is contrary to Mr McCurdy's statement at paragraph 44 that there was no cash flow.
[56] It seems to me there is a question to be tried on whether the defendants were not doing their duty by paying accounts of the business. It may be that there is a case for compensation by the company under ss 180 to 181 of the CA.
[57] Mr May says that on his return from leave, given the loss of the supplier accounts he called Ms McCurdy to access ATTQ's books and records. He was given access to QuickBooks in January 2025. As a result, he was able to review the records. But he has only been given a copy of the bank account statements of the account between 14 November 2023 to 13 November 2025.
[58] As a result of the examination of the bank statements Mr May has identified a number of discrepancies.
Payments by ATTQ for invoices issued to Coastline
[59] Mr May says that a number of payments have been made by ATTQ for invoices that were issued to Coastline and not to ATTQ namely:
[60] Mr McCurdy says that the Alltranz invoice is in the name of the company and paid for by the company. He cannot recall the specifics of the invoice but says that Coastline and ATTQ often swapped or exchanged parts. He alleges records were kept. However, he has not produced a record regarding this transaction. I consider there is a triable issue concerning the Alltranz invoice.
[61] With respect to the Department of Transport and Main Roads Mr McCurdy alleges this relates to the registration of a vehicle that ATTQ leases from Coastline. He alleges that part of the arrangement is ATTQ pays for the registration. I consider there is a question to be tried as to whether this agreement actually existed.
[62] With respect to the box factory expense Mr McCurdy says that it is not from the box factory and that he has been unable to find any tax invoices relating to this purchase. The documents probably relate to ATTQ purchasing a couple of second-hand transmissions. I consider there is triable issue on this amount.
[63] Therefore, I consider there is a serious question to be tried concerning $6118.16.
[64] Mr May says there had been a number of payments by ATTQ for invoices that were issued to SEQTC and not to ATTQ as follows:
[65] Mr McCurdy says that he is unable to locate the original tax invoice for the Bearing Stocks. He says that Bearing Stocks are regularly purchased for ATTQ for use in the business. To my mind this does not explain the expense and that there is a triable issue on this.
[66] With respect to the tax invoice issued by Energex Mr McCurdy says that ATTQ leases unit number two and paid for the electricity bill. It is also alleged between August 2023 and April 2024 SEQTC also occupied the leased area. It is acknowledged the entity did not pay rent, but it is claimed it supplied ATTQ with free and discounted torque converters. This remains to be determined. I consider there is a triable issue on that point and therefore a triable issue on $486.76.
Payments made by ATTQ towards invoices issued to the second defendant
[67] Mr May says a number of payments had been made by the company for invoices issued to Ms McCurdy. These are as follows:
[68] Mr McCurdy says the telephone numbers for the SEQTC numbers are as set out in his affidavit. He says these numbers do not appear on the tax invoice referred to by the plaintiff. Exhibit CM6 is a copy of the tax invoice, and those numbers relate to ATTQ.
[69] He further says the Print Shack tax invoice dated 31 December 2023 was issued to Ms McCurdy and was a correct and proper tax invoice of the company. It was for staff uniforms. The same relates to the second tax invoice.
[70] In light of the material provided I am not satisfied there is a triable issue on these points.
[71] Mr May says that there had been a number of payments for goods not used by ATTQ but likely used by SEQTC because it welds whilst ATTQ does not.
[72] By way of response Mr McCurdy alleges that ATTQ has an account with Super Gas as it leases LPG bottles of gas. It is alleged that whilst SEQTC used the gas, in exchange, SEQTC would give torque converters to the company at no charge.
[73] The truth of Mr McCurdy's response remains to be seen and I consider there is a serious question be tried on this point. Mr May swears that he has not seen any documents evidencing repayment of these sums.
[74] Mr May says there have been payments by ATTQ to Coastline, but Coastline is not a supplier to ATTQ.
[75] Mr McCurdy says with respect to these payments that the $77 was for the purchase by the company of a second-hand part. He alleges it was paid for by Coastline but was used and should have been paid for by ATTQ and a transfer back to Coastline was made. He cannot find the tax invoice but produces a receipt. I consider a question remains to be tried on that point.
[76] As to the $875 he says that Coastline supplied a reconditioned torque converter to the company. Exhibit CM9 is a true and correct copy of the tax invoice dated 23 April 2024. I do not think there is a triable issue on this point.
[77] As to the $1,200 it is alleged that Coastline supplied a reconditioned billet torque converter to the company, and he produces a tax invoice in this regard. I do not consider there is a triable issue on this point.
[78] With respect to $2,819.42 it is alleged that this payment was a motor specs tax invoice owing by Coastline. It is alleged by Mr McCurdy that Ms McCurdy paid the tax invoice from ATTQ's bank account by mistake, and this was corrected. Documents in this regard are produced. To my mind a triable issue remains on this point i.e. whether a credit was created. Mr May swears that he has not seen any documents evidencing repayment of these sums.
[79] This transaction tends to evidence the mixing of funds of the defendants' entities with AATQ. I consider there is a serious question to be tried concerning the amount of $2,896.42.
[80] Mr May says there are a number of invoices recording payments by ATTQ to third parties where he cannot determine what legitimate use ATTQ had for the goods and services. He sets these out as follows:
[81] Mr McCurdy alleges the Queensland Storage System shelving payment was for shelving used at the business address of ATTQ and used by ATTQ in its day-to-day operations. He alleges he paid this out of his personal account and was then reimbursed from the company. There are no records supporting his contentions. Why did he not use the ATTQ credit card which he accepts existed? I consider there is a triable issue on that point.
[82] With respect to the data box solutions, Mr McCurdy alleges this was a quote provided to SEQTC which was not accepted. Exhibit CM12 is a true copy of the quote. In light of the document provided I do not think there is a triable issue on that point.
[83] With respect to the bins, Mr McCurdy alleges this was the hire of scrap metal bins and which were delivered to the address of ATTQ. He alleges it was used for a short time by SEQTC and the company. He alleges that there were records made of "split costs", but no records are attached. I consider there is a triable issue on this point. The allegation tends to show that there was a mixing of equipment to the detriment of ATTQ.
[84] With respect to the tray man, he says that the torque converter stand was purchased by ATTQ in September 2023 and remained at the business premises but then moved to SEQTC. He has not been able to find any records of how SEQTC reimbursed the company. I find there is a triable issue on that matter.
[85] With respect to the electrical upgrade, he says this upgrade was done at the business premises of ATTQ. He says he used his contacts to ensure it was done at the least expense at the company. The truth of this remains to be seen bearing in mind SEQTC was in the same premises (next door). I consider there is a triable issue on this point.
[86] With respect to the end of year staff party he says he organised one staff party for all three entities and the costs were apportioned with the contribution of ATTQ being less than 20 per cent. The truth remains to be seen. There is a triable issue on this point.
[87] With respect to the trade tools for Welding Wire he cannot find documents concerning this. I note that there is no dispute that it was SEQTC which welded not ATTQ. There is a triable issue on this point.
[88] With respect to the CNW electrical wholesale, he says this invoice was paid for by the company on 26 October 2023 but does not say what this was for. There is a triable issue on this point.
[89] With respect to the Christmas party at Top Golf he says he organised one staff party for three entities and 20 per cent was paid for by the company and the plaintiff knew about this. A triable issue remains on this point despite the plaintiff being in a photograph.
[90] I consider there is a serious question to be tried concerning the amount of $12,425.41.
[91] Mr May says that he is aware of the coming and going of staff members in the ATTQ workshop. He is aware that Mr McCurdy was not present for 99 per cent of the time. He did not see Mr McCurdy at all at ATTQ between December 2024 until August 2025. Yet he appears to have received a full-time salary from ATTQ.
[92] The pay run activity report shows that ATTQ paid Mr McCurdy a total of $222,579. By contrast Mr May was paid $265,772.
[93] Mr McCurdy disagrees with the assertion the plaintiff was always present. He says that he was present more than one per cent of the time and even whilst physically present he oversaw the business operations. He produces a payroll report showing the plaintiff received gross earnings of $307,201.80 and he received gross earnings of $222,579.04.
[94] I consider there is a serious triable issue on this point i.e. whether Mr McCurdy was entitled to the payment of $222,579.04.
[95] Mr May says that there are dividends or drawings unexplained. He says that the accountant provided him a transaction report of all of the owners' drawings paid to him by ATTQ.
[96] He says that between 6 April 2023 and 15 June 2023 a total of $13,530 of dividends were paid to him and he was not an owner of ATTQ until 16 June 2023.
[97] There was an adjustment of $25,559.32 on 30 June 2024 and he does not know why this occurred.
[98] He also says that the profit and loss statement which he was provided in June 2025 puts owners' drawings for Mr McCurdy and himself as liabilities and he does not know why.
[99] Mr McCurdy says that Exhibit CM13 is a copy of a marked-up version of the same dividend report. He says that from April 2023 until 30 June 2023 the plaintiff was a contractor of the company. He says he has made enquiries with the accountant as to why the payments showed up in a dividend report when they were paid by the plaintiff as a contractor. He says he was told by the accountant that the transactions should have been coded to contractor payments rather than to his loan account and the amounts will need to be recoded. I might say this fact raises concerns about the financial management and record keeping of the business.
[100] With respect to the adjustment made to "owner drawings in the amount of $25,559.32" the accountant advised Mr McCurdy that during the year the plaintiff was paid $500 per week from the bank account which were effectively dividends in advance. These payments were reconciled to owner drawings and appear on the balance sheet as a liability owed back to the company by the plaintiff. At the end of the financial year the accountant is able to reconcile the accounts of the company to determine it has made a profit. In this case the company was able to declare a dividend to the plaintiff for that financial year in the sum of $25,559.32 which adjusted in the owner drawer's account.
[101] This seems to be a reasonable answer to the allegation made by the plaintiff, and I do not consider it is a triable issue on this point.
[102] I note that Mr McCurdy says that the company has not yet declared any dividends for the financial year 30 June 2025. So, there may well be a claim by the plaintiff for these dividends (if any).
[103] Mr May says that ATTQ often receives cash as payments for its services. He says that a National Australia Bank statement for ATTQ from 14 November 2023 until 13 November 2025 shows that prior to February 2025 no cash was deposited into the ATTQ account.
[104] He has reviewed many invoices and account records and his review shows that cash was paid as follows:
(a) An ATTQ invoice was prepared for the transaction and entered into QuickBooks
(b) QuickBooks entries into the ATTQ invoices were manually edited to zero.
(c) No cash was deposited into the ATTQ bank account.
[105] From April 2023 until September 2024 alone he estimates that at least $24,000 in cash transactions were entered into and not deposited into the bank account. Following is a summary of his review where invoices were drawn cleared and there was a Quick Book audit report for the transaction.
[106] He suspects the issue is even larger because it may not necessarily be the case the invoices were prepared for all transactions.
[107] He has also conducted a search of the ATO books and records regarding invoices where the transaction was cash and cannot be identified on the ATTQ bank statement for which there is no QuickBooks audit trail. The following is the summary of his review.
[108] Mr McCurdy agrees that ATTQ often received cash as payment for its services. In relation to the allegations made by the plaintiff Mr McCurdy has reviewed the books and records and says that the plaintiff has previously admitted he was responsible for running the workshop and issuing invoices and quotes and taking payments from customers. When he would receive a payment for the invoice in cash, he would put it in an envelope and mark on it which invoice it related to and record the full amount received in cash. After this cash would be removed to pay for business expenses such as parts which would be written on the front of the envelope and after these expenses were paid, he would take 50 per cent of the cash for himself and record this on the envelope. He would either deliver it himself or have a staff member deliver the envelope on the balance of cash to Mr McCurdy at home or at Coastline. He says that many of the invoices referred to in the first table have cash written on them in the plaintiff's handwriting. The bookkeeper then reduces the invoice to zero, so the customer is not chosen for an overdue account. CM15 is a true a correct copy of a spreadsheet Ms McCurdy kept at the cash delivered to them by the plaintiff and a copy of the envelopes with the plaintiff's writing on the front. They kept that spreadsheet as they had concerns the plaintiff was retaining additional payments. He alleges they kept records in case they required them for accounting or taxation purposes. I note it is not suggested by Mr McCurdy that in fact these were entered into the books of account or in taxation returns.
[109] At page 264 of the earlier May affidavit there is a tax invoice from Spire Accounting. He has reviewed this, and it has been paid.
[110] It is alleged that the plaintiff has received unauthorised cash payments from the company since he became a shareholder.
[111] With respect to the second table, he says that when Sarah resigned as a bookkeeper, they had difficulty reconciling the accounts in QuickBooks and the spreadsheet. They commenced recording of envelopes in a spreadsheet. He alleges there is $74,939.50 of outstanding invoices they cannot reconcile. Exhibit CM16 is a true and correct copy of this list. One of the invoices was issued to Chunte Juo. It is alleged that the plaintiff edited this invoice and replaced an email address with his. It is alleged that Mr McCurdy never received the envelope with cash. He alleges he only collected a cash payment from a customer on a few occasions. He says the cash payments were usually done by the plaintiff.
[112] I consider there is a triable issue on this point. If Mr McCurdy was at the business as much as he said he was, why did he not receive the cash payments or some of them? I consider there is a serious question to be tried on $59,751.
[113] Mr May says that there is a report from the ATO for the company generated on 23 September 2025 which shows that the current amount owing by the company to the ATO is $118,592.90. He says his review shows that no significant payments had been made by the company to the ATO since 20 November 2024.
[114] Mr McCurdy says that the company does have a tax liability and he has been advised by the accountant this is not unusual. He alleges there was not always enough cash to pay tax liabilities and he has authorised the company to enter into a payment plan with the ATO.
[115] Exhibit CM18 is a true copy of the ATO's statement showing the company has made regular payments and the tax liability is $76,834.25. He says that in a period after the plaintiff left the business, the tax liability has been reduced by $58,000.
[116] It is unclear at this stage as to whether there is a triable issue concerning the tax liability. It may be the actions of the defendants have exposed the company to greater liability to the ATO than what it should have been. This remains to be seen.
[117] Mr May says there is a transaction statement summary from the Queensland Government in respect of the purchase of the business of ATTQ by Mr McCurdy from Thissen Pty Ltd for $150,000 on 16 March 2023.
[118] Mr McCurdy deposed in his first affidavit that he personally loaned ATTQ the purchase price for the business and this was recorded in the books and records of the company.
[119] At page 316 is a copy of the company's financial statement which records the loan from the McCurdy's to be $62,419 as at 30 June 2023. He infers that ATTQ has paid the McCurdy's $87,581 as repayment of the loan between March and June 2023.
[120] However, Exhibit CM5 to the affidavit of Mr McCurdy dated 5 September 2025 shows $100,000 was transferred from ATTQ to an unknown account on 21 June 2023. This was only days after Mr May's payment of $100,000 to acquire the shares of the company. He is concerned that the McCurdys have more than repaid themselves for the loan. The fact he loaned the business money at all for its acquisition was not known to Mr May prior to his acquiring the shares.
[121] Mr McCurdy says that he loaned the company $150,000 at the time the company purchased the business. He said that as the company had no cash flow, he loaned the company an additional amount. He says that between the purchase of the business by the company and 30 June 2023 the company has repaid $102,036.68 to him in reduction of the loan leaving a balance of $62,418.80.
[122] I consider there is a triable issue on this point. First is the fact that Mr May advanced $100,000 to the company and received shares and within days that money was immediately transferred to the McCurdys. There is an argument that this transfer should have been disclosed to all shareholders as it was a capital raising for the company and arguably shows there has been a breach of fiduciary duty on the part of Mr McCurdy. It may be argued this immediate transfer was for the director's own benefit and not for the benefit of the company.
[123] Secondly, there is no explanation as to why the amount of the loan became $164,455.48 rather than $150,000.
[124] Thirdly, the following discrepancies exist in the records:
(a) $100,000 was transferred to the defendants on 21 June 2023 and another $15,000 on 26 June 2023. This would mean only $45,000 was owing and not $62,419. There is no loan agreement produced suggesting there was an agreement that ATTQ pay interest on the loan.
(b) The bank records suggest that the regular loan repayment was $1,100 per month ($13,200) per year and yet the records show the loan reduced from $62,419 as at 30 June 2023 to $43,084 as at 30 June 2024. This is a total sum of $19,335. There is no explanation why an extra $6135 was paid.
(c) The loan repayments appear not to be reflected in the profit and loss statements for July to September 2023; October to December 2023; January to March 2024; April to June 2024; July to September 2024. They are also not in the financial statements 2023/2024. They are not in the profit and loss statement for 2024/2025.
[125] I consider there is a serious question to be tried concerning the loan.
[126] Mr May says that prior to the purchase of the company by the McCurdys, Thissen Pty Ltd owned and operated the business of the company. The financial statement shows that plant and equipment recorded for the business was $37,621.78 in the financial year 2022.
[127] Yet an asset and depreciation schedule for the financial year 2024 provided by the accountant shows an entry on 30 June 2023 for the acquisition of general planted equipment of $150,000. Mr May says the value of the equipment is no more than $15,000.
[128] Mr McCurdy says that he has made enquiries with the accountant and has been advised that ATTQ purchased the business from Thissen Pty Ltd and the business is an asset of the company. The asset (being the business) was recorded in the financial statements as plant and equipment given the company purchased the business for $150,000.
[129] I do not think that completely answers the allegation of Mr May. It tends to show another discrepancy with the books of account which to my mind need to be investigated.
[130] Mr May also says that on 16 August 2025 he opened a National Australia Bank account in the name of the company for the sole purpose of depositing cash received from the operations. He attaches the bank statement. He has never used the funds deposited into that account for his personal benefit.
[131] Mr McCurdy says the plaintiff had no authority to open this account. He also says that he could not access the business premises of the company in August and September 2025. He disputes that all cash was banked into the unauthorised bank account.
[132] I have had regard to the bank account. It does seem the majority of expenses were expended for the purposes of the business and cash was deposited into that account. But this is an issue to be determined at any trial.
[133] I find there is a serious question to be tried on the following issues:
[134] At the end of the day this is not a mini trial for me to decide. The allegations made by the applicant are sufficient. There is a serious question to be tried on whether there has been conversion or a breach of fiduciary duty in equity[19] or in breach of s 180, 181 and/or 182 of the CA .
[135] In the circumstances, Mr May has established that which he needs under s 237 of the CA and leave should be given to issue derivative proceedings despite the non-compliance with section 237(2)(e) of the CA.
"247A Order for inspection of books of company or registered scheme
(1) On application by a member of a company or registered 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.
(c) is eligible to apply for leave under that section;
may apply to the Court for an order under this section.
(4) On application, the Court may make an order authorising:
(a) the applicant to inspect books of the company; or
(b) another person to inspect books of the company on the applicant's behalf.
(5) The Court may make the order only if it is satisfied that:
(b) the inspection is to be made for a purpose connected with:
(ii) bringing or intervening in proceedings with leave under that section.
(6) A person authorised to inspect books may make copies of the books unless the Court orders otherwise."
(a) The plaintiff is a member of ATTQ.
(b) He is acting in good faith.
(c) Any inspection is for a proper purpose.
(d) The inspection is made for a purpose connected with the proposed derivative proceedings.
The Court may at any time make any orders it considers appropriate about the costs of the following persons in relation to proceedings brought or intervened in with leave under section 237 or an application for leave under that section:
(a) the person who applied for or was granted leave;
(c) any other party to the proceedings or application.
An order under this section may require indemnification for costs."
[139] For example, in CIP Group Pty Ltd v So[20] Derrington J granted leave to commence a derivative action and ordered both an indemnity and security.
[140] On the material Ms Cox swears that estimated legal costs for the company would have been in the order of $276,200. This of course incorporates the actions brought by Mr May himself, so I think the costs are somewhat less concerning the company itself. In Mr May's affidavit the costs are estimated to be $167,000 which I think is closer to the mark.
[141] Despite the issues I have raised concerning the alleged conduct of the defendants the result here is by no means certain and there is a risk that ATTQ will bear the costs of the action. The plaintiff does not offer security at all. He claims he is impecunious although no material was filed to support that contention. It my view the impecuniosity of the plaintiff is a relevant factor to be considered[21].
[142] I also weigh into the equation that Mr May is in a position where he has failed in other interlocutory applications and has had his statement of claim struck out once.
[143] In my view it is appropriate that he provide an indemnity so that the company is somewhat protected against any adverse costs order.
[145] In all of the circumstances I have determined that Mr May should provide indemnity in the sum of $50,000.
[1] This changed on 21 October 2024 to McCurdy Holdings Pty Ltd.
[2] This includes a member of the company.
[3] This has not been complied with but if the other aspects are met the defendants do not press this point.
[8] [2002] NSWSC 640; (2002) 170 FLR 451 at [34] applying Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199.
[9] Swansson v RA Pratt Properties Pty Ltd [2002] NSWSC 583; (2002) 42 ACSR 313 at [25].
[11] Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41 at 96-97.
[12] Australian Careers Institute Pty Ltd v Australian Institute of Fitness [2016] NSWCA 347; (2016) 340 ALR 580 at [3] and [132].
[13] [1991] FCA 375; (1991) 42 FCR 390 at pp 392-393.
[16] (1991) 22 NSWLR 189 at pp 206-207.
[17] [1995] HCA 1; (1995) 183 CLR 501 at 516-517.
[18] Spellson v George [1992] NSWCA 254; (1992) 26 NSWLR 666 at 670.
[19] Section 184 of the CA preserves such an action,
[21] The impecuniosity of the plaintiff is often a decisive matter is a security for costs application see Hyperion Technology Pty Ltd v Queensland Motorways Ltd [2013] QSC 20 at [12].
[22] Mio Art Pty Ltd v Mango Boulevard Pty Ltd [2018] QSC 31 at [89].
[23] Menhaden Pty Ltd v Citibank NA [1984] FCA 193; (1984) 1 FCR 542 at p 547.
May
McCurdy & Anor [2026] QSC 40
(2014) 48 WAR 1
(2001) 208 CLR 199
(2016) 340 ALR 580
(1991) 42 FCR 390
(2002) 170 FLR 451
(1984) 156 CLR 41
(1984) 1 FCR 542
(1995) 183 CLR 501
(1992) 26 NSWLR 666
(1991) 22 NSWLR 189