Federal Court of Australia

Keybridge Capital Limited v Kirant Regional Media Investments Pty Ltd [2025] FCA 1265

ORDERS

THE COURT ORDERS THAT:

1. The Second Plaintiff’s application for leave, nunc pro tunc, pursuant to ss 236 and 237(1) of the Corporations Act 2001 (Cth), to bring this proceeding on behalf of the First Plaintiff (Application) be dismissed.

2. The Second Plaintiff pay the First Plaintiff’s costs of the Application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BUTTON J:

1 Nicholas Bolton (Mr Bolton) has applied under s 237(1) of the Corporations Act 2001 (Cth) (Corporations Act) for leave to bring a derivative action under s 236(1) in the name of Keybridge Capital Limited (Keybridge) against Kirant Regional Media Investments Pty Ltd (Kirant) and Frank Catalano (Mr Catalano). That leave was sought nunc pro tunc as Mr Bolton arranged for this proceeding to be commenced, naming Keybridge as the First Plaintiff without authorisation of the company, and without derivative leave having been obtained.

2 Mr Bolton relied on the following affidavits:

(a) an affidavit of Eliza Fleur Buchanan Best, dated 25 June 2025;

(b) an affidavit of Sophie Uhlhorn, dated 24 July 2025; and

(c) two affidavits of Mr Bolton, dated 12 August 2025 and 16 September 2025.

3 Keybridge relied on three affidavits of Susan Goodman, dated 29 August 2025, 3 September 2025 and 9 October 2025.

4 Mr Catalano and Kirant did not participate in the hearing of the application, beyond filing submissions explaining the basis of their non-participation: essentially, that the only legitimately interested parties to a derivative leave application are the applicant and the company, the putative defendants not ordinarily being heard: Huang v Wang (2016) 114 ACSR 586; [2016] NSWCA 164 (Huang) at [85]-[86].

5 I have determined that the application for derivative leave must be refused. I have reached that conclusion on the basis that two of the statutory preconditions to the grant of derivative leave have not been established. In particular, I am not satisfied that Mr Bolton is acting in good faith, where satisfaction that the applicant for derivative leave is acting in good faith is a mandatory precondition to the grant of leave: s 237(2)(a) of the Corporations Act. I am also not satisfied that it is in the best interests of Keybridge that Mr Bolton be granted derivative leave to bring the foreshadowed proceeding. The Court being satisfied that it is in the best interests of the company that the applicant be granted leave is also a mandatory precondition for the grant of leave: s 237(2)(c). The bases on which I have reached those conclusions are set out below.

Background

The immediate context

6 Mr Bolton was the CEO of Keybridge from 28 May 2019. On becoming a director of Keybridge on 13 October 2019, Mr Bolton also assumed the position of “Managing Director” of Keybridge. Mr Bolton remained a director of Keybridge until 10 February 2025. Mr Bolton held his executive position as CEO until 8 May 2025 when he was informed that he had been suspended from those roles (the timing of the suspension being explained on the basis that the directors related to WAM Active Ltd (WAM) obtained control of the company when the administrator of Keybridge was removed).

7 It follows that Mr Bolton was the CEO through the entire period when the events said to give rise to the proposed claim against Kirant and Mr Catalano occurred, and was a director and Managing Director of Keybridge for the vast majority of that period as well. Yet it was only after his ejection from the board of Keybridge that Mr Bolton has sought to litigate the claim he says Keybridge has against Kirant and Mr Catalano.

8 What occurred on 10 February 2025 was that a general meeting of Keybridge was held, arranged by WAM, a shareholder which, together with its associated entities, holds approximately 43.5% of the shares in Keybridge. At that meeting, a vote was taken and Mr Bolton and two other directors of Keybridge were voted off the board. Importantly, it was with Mr Catalano voting shares he controlled with WAM that the necessary majority was achieved to spill the Keybridge board. Previously, Mr Bolton and Mr Catalano had been allies in the long-running turf war for control of Keybridge. After Mr Catalano switched sides to vote with WAM, WAM voted against its own resolution to remove Mr Catalano as a director, meaning he remained on the board.

9 The validity of the vote taken on 10 February 2025 was later confirmed through proceedings in the Supreme Court of New South Wales (NSWSC), determined on 21 March 2025: Re Keybridge Capital Ltd (2025) 173 ACSR 456; [2025] NSWSC 240. Mr Bolton’s appeal was rejected by the New South Wales Court of Appeal (NSWCA) on 8 May 2025: Bolton v WAM Active Ltd [No 2] [2025] NSWCA 99.

10 Shortly after his appeal in the NSWCA was rejected — and thus his ejection from the Keybridge board was confirmed — Mr Bolton commenced this proceeding on 25 June 2025. The application for derivative leave was foreshadowed by a letter to Keybridge on 4 June 2025 (although the notice only addressed Keybridge’s putative clams against Kirant, and did not mention the claims against Mr Catalano).

11 Other current context of relevance includes the fact that, in February 2024, so before it controlled the board of Keybridge, WAM brought proceedings seeking to wind up Keybridge on the ground of insolvency. While that application was refused, WAM later obtained (consistent with the alternative relief it sought) derivative leave to bring a proceeding against, inter alia, Mr Bolton and an Italian entity associated with Mr Bolton. That proceeding relates to a transaction by which Keybridge advanced $4.75 million to Mr Bolton and the associated Italian company.

The underlying events concerning the investment

12 Applications of the current kind do not involve the Court delving far into the merits of the proposed proceeding. Accordingly, this narrative should not be understood as making findings of fact in relation to matters that may ultimately be contested. Rather, it sets out the events, principally by reference to the contemporaneous documents, noting the diverging positions taken where appropriate. This record is primarily relevant to the question of whether the Court should be satisfied that Mr Bolton is acting in good faith. Where I refer to people acquiring interests, that includes through corporate vehicles they controlled.

13 In early 2019, Nine Entertainment (Nine) owned the “Australian Community Media and Printing” business, then operated by Rural Press Ltd (which became Rural Press Pty Ltd) (RPL). This business was also referred to in some of the evidence as the ACM business.

14 Mr Catalano and Alex Waislitz (Mr Waislitz) came to some arrangement to put together a bid for the RPL business. The extent to which Mr Bolton was involved in the development of the bid and the consortium is disputed, but Mr Bolton’s evidence is that he did not have direct contact with Mr Waislitz. Mr Bolton says in his affidavit that he and Mr Catalano had been friends and business associates for a long time, and he came to some understanding with Mr Catalano that he would participate in the venture by acquiring a minority interest in the RPL business (ie Mr Waislitz would have 50%, and Mr Catalano and Mr Bolton would, between them, have the other 50%, with Mr Bolton’s 16.67% interest sitting “behind” Mr Catalano’s interest). Mr Bolton says he understood there was no objection to his minority interest being acquired through Keybridge, and that, as he was the CEO at the relevant time, he felt the opportunity should be offered to Keybridge. Mr Bolton also thought, as Keybridge had tax losses, it would make sense for the acquisition to be through Keybridge.

15 Mr Bolton says, in his first affidavit, that he was made aware that Mr Waislitz had a preference that “my and/or Keybridge’s” investment in RPL “sit passively behind Mr Catalano’s investment” and was informed that this was because “Mr Waislitz wished to convey to his own investors and publicly that it was only Mr Waislitz and Mr Catalano (and their corporate vehicles) who would be acquiring RPL for strategic reasons of their own”.

16 A company, 19 Cashews Pty Ltd (19 Cashews) was registered on 24 April 2019, being the day the bid was submitted. Another company, 20 Cashews Pty Ltd (20 Cashews) was registered on 26 June 2019. 19 Cashews was the bid vehicle, and its shares were held by 20 Cashews. Mr Waislitz held 50% of the shares in 20 Cashews, Mr Catalano, through Kirant Media Investments Pty Ltd (KMI) (a Catalano family company) held 33.33% of the shares in 20 Cashews, and Kirant held the remaining 16.67% of the shares. The principal issue is whether Kirant holds its shares in 20 Cashews — essentially the 16.67% interest in the RPL business — on trust for Keybridge, or in its own right.

17 A trust was established, named the “Australian Media Holdings Unit Trust” (the Trust), with Kirant as trustee (the Trustee), and Keybridge as the sole unit holder. However, it is disputed whether the shares in 20 Cashews are held by Kirant as trustee of the Trust.

18 On 27 June 2019, Keybridge transferred $5.0 million to Ashurst, solicitors for Nine. The sale of the RPL business was publicly announced by Nine on 1 July 2019.

19 Also on 1 July 2019, Mr Bolton was discussing a foreshadowed ASX release by Keybridge about its investment, when he got an email from Mr Catalano stating that a condition of Mr Bolton’s investment was that the “investment was confidential and not to be released to the public”.

20 Mr Bolton’s submissions on the derivative leave application suggested this confidentiality requirement was a new requirement, and was not part of the original deal. He pointed to the absence of any reference to a confidentiality requirement in any documentation (although there was precious little documentation in evidence before me regarding the formation and terms of the original “deal” in any event).

21 Mr Bolton’s submissions also highlighted certain documents that, on his account, show that the shares in 20 Cashews held by Kirant were held on trust for Keybridge from the outset (cf there being an incomplete transaction, completion of which depended on a confidentiality criterion being observed or worked around):

(1) The minutes of a board meeting of Keybridge held on 21 June 2019 referred to Mr Bolton (who was then the recently appointed CEO of Keybridge) having leveraged his relationship with Mr Catalano to deliver an opportunity for Keybridge to participate to the extent of 16.67% in the acquisition of an interest in ACM (ie the RPL business). No mention was made of confidentiality in these minutes. Neither Mr Bolton nor Mr Catalano were directors of Keybridge at the time of this meeting.

(2) Kirant was registered on 25 June 2019, and Mr Catalano promptly forwarded registration-related documents for Kirant to Mr Bolton.

(3) When 20 Cashews was registered on 26 June 2019, it was registered on the basis that Kirant would hold 2 of 12 shares, and the application form recorded that the shares would not be held by it beneficially.

(4) Mr Bolton gave instructions to Baker McKenzie to draw up trust documents for the establishment of the Trust, which Mr Catalano signed (or re-signed) on 19 July 2019. Also on 19 July 2019, Mr Catalano sent Mr Bolton a unit certificate certifying that Keybridge held 5 million units in the Trust, fully paid up at $1.00 per unit. That occurred after Keybridge had sent $5.0 million to Ashurst, solicitors for Nine.

(5) In early to mid-2020, Mr Catalano forwarded various ACM accounts and projections to Mr Bolton (which Mr Bolton submits is only explicable on the basis that Keybridge had an interest in the RPL business).

22 Mr Catalano signed a “Deed of Guarantee and Indemnity” dated 31 July 2019 (Catalano Guarantee). The document was said on its face to the be a deed between Keybridge and Mr Catalano, but the version in evidence is one only signed by Mr Catalano. The Recitals to the deed state (emphasis added):

A.     The Trustee is trustee of the Trust, as established by the Trust Deed (being the Guaranteed Agreement).

B.     The Beneficiary is the sole unitholder in the Trust.

C.     Further to Recital B,

a.     on or about 28 June 2019, the Beneficiary applied for the original 10 units in the Trust in consideration of A$1.00 per unit;

b.     on or about 30 June 2019, the Beneficiary subscribed for a further 4,999,990 units in the Trust in consideration of A$1.00 per unit,

and the Beneficiary on or about 28 June 2019 has advanced the sum of $5,000,000 (the Funds) to the Trustee.

D.     The Trustee and Beneficiary are in continuing negotiations regarding the use (for acquisition by the Trust of assets) or the return (to the Beneficiary) of the funds advanced to the Trustee as set out in Recital C. If, on or before 25 September 2019 no such agreement is reached between them, the Trustee has agreed to return the amount of the Funds to the Beneficiary.

E.     The Guarantor is the sole director and sole secretary of the Trustee.

F.     The Guarantor has agreed to guarantee the performance of the Trustee under the Guaranteed Agreement for the benefit of the Beneficiary on the following terms.

G.     The Guarantor acknowledges that the National Credit Code and the Banking Code of Practice published by the Australian Banking Association are not applicable to the Trust Deed or to this Deed.

23 Although the version of the Catalano Guarantee in evidence was only signed by Mr Catalano, Keybridge relied on it in its public statements to the market via its half year report to 31 December 2019 (published on 8 May 2020) (Half Year Report) and subsequent releases via the ASX platform. Pursuant to the terms of the Catalano Guarantee, Mr Catalano guaranteed Kirant’s performance of its obligations under the deed establishing the Trust, and also guaranteed the agreement of the Trustee (ie Kirant) to return the sum of $5 million, as referred to in Recital D.

24 The Half Year Report, published on 8 May 2020, recorded, as an asset, “Deposit for Potential Transaction – pending completion or refund” of $5 million. The explanatory note regarding that asset stated (emphasis added):

Subject to the details below, the Unit Trust is entitled to receive this 16.67% shareholding as the Unit Trust’s $5 million funds (from the Company’s subscription into the Unit Trust) was used by the Trustee to complete the acquisition of the shareholding, as agreed by the directors of the Company.

However, the Trustee has not yet vested the 16.67% shareholding to the Unit Trust. That is, whilst the Trustee is the registered holder of a 16.67% shareholding in the investee company, it has not acknowledged that it holds this shareholding as Trustee of the Unit Trust as that was not included in the original agreement for the deposit.

The Trustee has advised that the vesting of the shares in satisfaction for the money forwarded is dependent on the consent/agreement of the other shareholders of the investee company. If their consent/agreement is not ultimately forthcoming, the Trustee has undertaken to transfer $5 million cash into the Unit Trust in lieu of the 16.67% equity interest.

The Company is in discussions with the shareholders of the investee company to find a mutually acceptable position vis a vis the Company’s investment (via the Unit Trust) in the investee company.

The sole Director of the Trustee has entered into a Deed of Guarantee and Indemnity (dated 31 July 2019) to, amongst other matters, unconditional [sic] and irrevocably guarantee to the Company the due and punctual performance and observance by the Trustee of their obligations to the Company (as the beneficiary of the Unit Trust), including the payment of any monies payable by the Trustee and (if required by the Company) the repayment of any monies advanced to the Trustee by the Company (including the $5 million subscription.

25 On 2 June 2020, Keybridge released an announcement via the ASX headed “Potential Transaction – Update”. That announcement stated that its release was authorised by Keybridge’s board of directors. It stated (emphasis added):

Keybridge is pleased to provide the following update in relation to its $5 million investment that has been the subject of confidential and incomplete negotiations.

On or about 28 June 2019, the Company subscribed for $5 million of units in the Australian Media Holdings Unit Trust (Unit Trust) (which was established by the Company on or about 28 June 2019 with the Company being the sole unit holder/beneficiary).

On 30 June 2019, the Kirant Regional Media Investments Pty Ltd, as trustee of the Unit Trust, completed the acquisition of a 16.67% interest in Australian Community Media (through various interposed entities established for the transaction) (Investee Company), in consideration of payment of $5 million to the vendor of the business (Nine Entertainment Co.).

Subject to the details below, the Unit Trust is entitled to receive this 16.67% shareholding in the Investee Company as the Unit Trust’s $5 million funds (from the Company’s subscription into the Unit Trust) was used by the Trustee to complete the acquisition of the shareholding, as agreed by the directors of the Company. However, the Trustee has not yet vested the 16.67% shareholding to the Unit Trust. That is, whilst the Trustee is the registered holder of a 16.67% shareholding in the Investee Company, it has not acknowledged that it holds this shareholding as Trustee of the Unit Trust as that was not included in the original agreement for the deposit.

In July 2019, the Trustee advised that the vesting of the shares in satisfaction for the money forwarded is dependent on the consent/agreement of the other shareholders of the Investee Company. If their consent/agreement is not ultimately forthcoming, the Trustee has undertaken to transfer $5 million cash into the Unit Trust in lieu of the 16.67% equity interest.

The Company is seeking to find a mutually acceptable position with the shareholders of the Investee Company. The sole Director of the Trustee, Mr Antony Catalano has entered into a Deed of Guarantee and Indemnity (dated 31 July 2019) to, amongst other matters, unconditional and irrevocably guarantee to the Company the due and punctual performance and observance by the Trustee of their obligations to the Company (as the beneficiary of the Unit Trust), including the payment of any monies payable by the Trustee and (if required by the Company) the repayment of any monies advanced to the Trustee by the Company (including the $5 million subscription). As previously announced, Mr Catalano subsequently became a significant shareholder in the Company on 17 February 2020 and a director on 15 April 2020.

Keybridge will keep the market informed of any further developments.

26 As it transpired, no “mutually acceptable position” was arrived at, and on 28 June 2020, Mr Catalano sent an email to Mr Bolton (copied to John Patton, the then Chairman of Keybridge) advising that the other shareholders did not agree to have Keybridge as a fellow shareholder, and that the sum of $5 million would be returned to Keybridge. That email was in the following terms (emphasis added):

Dear Nick

I am writing to advise that I have been unable to gain the consent of other ACM shareholders to enable me as trustee for the Kirant Regional Media Trust to vest ACM shares in the trust for the benefit of Keybridge Capital.

The incomplete transaction related to the $5m proposed investment has always relied on the consent of my other shareholders in ACM.

Regrettably the other shareholders have concluded that they believe Keybridge Capital is not a suitable investor.

The other shareholders have expressed their concern at the involvement of Keybridge Capital citing the company’s constant failed takeover attempts and the litigious nature of some of its shareholders.

Despite initially favourable comments about the ACM acquisition by some Keybridge shareholders including Geoff Wilson of WAM Active and the board support by Bentley representatives for Keybridge’s proposed investment, ACM has been used as a pawn by those two parties in the repeated and failed takeover attempts for control of Keybridge.

It has resulted in unwanted, incorrect and at times damaging and defamatory comments in the media - all as a consequence of obvious and illegal leaks to the media despite rules by the Takeovers Panel preventing any material related to panel hearings being disseminated via the media.

As a consequence the other shareholders have chosen that they do not want the Keybridge as a shareholders in ACM.

While I appreciate you will be disappointed by this decision, I have to agree with my other shareholders that it is entirely understandable given the way this potential investment has been manipulated by some within Keybridge for ulterior motives.

Consequently I undertake to return the $5m advanced by Keybridge on June 28, 2019 as soon as practicable, but no later the 25 July.

Yours sincerely.

Antony Catalano.

27 Mr Bolton responded to Mr Catalano’s email on 29 June 2020 in the following terms:

Thanks Antony,

Noted. For the avoidance of doubt, Keybridge continues to reserves all rights in relation to the matter.

I understand you’ve been put between a rock and a hard place.

Jeremy, I will draft an announcement.

28 Keybridge duly released an announcement via the ASX platform on 29 June 2020, as follows (emphasis added):

Update on investment

Keybridge refers to its announcement on 2 June 2020 in relation to its $5 million investment that was subject to incomplete negotiations.

Keybridge advises that it has received notice from the trustee of the Australian Media Unit Trust (a unit trust wholly owned by Keybridge), that the other shareholders in the investment syndicate that acquired Australian Community Media from Nine Entertainment Co. on 30 June 2020, have determined that they will not consent to the vesting of shares to the Australian Media Unit Trust to satisfy Keybridge’s investment.

The reasons cited for this decision include:

* The multiple unsolicited and hostile takeover attempts on Keybridge since the investment was first entered

* The investment being used by WAM Active and Bentley Capital as a pawn in their attempts to obtain control of Keybridge

* The confidentiality leaks by parties other than Keybridge (but connected to Keybridge) that have led to incorrect media in relation to the investment

Mr Catalano, as sole director of the trustee has confirmed that Keybridge’s $5 million cash investment will be returned to it no later than 25 July 2020.

Keybridge is very disappointed by this development, as it, at all times, has wholeheartedly supported the investment. Keybridge has reserved all of its rights.

This announcement was authorised for release by Keybridge’s Managing Director.

29 Keybridge then received that $5 million sum on 24 July 2020. In confirming the receipt of these funds by an ASX announcement, Keybridge continued to refer to the relevant transaction as an “incomplete” transaction.

30 As far as the documents before me reveal, until mid-2024, matters were left on the basis that Keybridge, in its correspondence with Mr Catalano, reserved its rights, but did not resist the proposition that its funds would be returned to it. There was no suggestion that Keybridge sought to return the $5 million sum that had been refunded to it, considered that the $5 million received was not a refund of its investment on the basis that the funds had come from Mr Catalano, or insisted, at the time, that it was entitled to the interest in the RPL business.

31 Keybridge relied on this series of public statements, many of which were expressly authorised by Mr Bolton, and the balance of which were otherwise issued by the board of Keybridge while Mr Bolton was a director. In submissions, Mr Bolton sought to discount these public statements on the basis that Keybridge was merely reporting what Kirant, the Trustee, had conveyed to it. But that submission does not withstand scrutiny. As those documents show, Keybridge consistently presented the acquisition as an incomplete transaction in its public documents. It also made public statements to the effect that the $5 million would be returned if no arrangement could be reached with the shareholders about Keybridge’s participation.

32 Mr Bolton says in his affidavit that he was unaware that, in late September 2021, Kirant lodged a change of company details with ASIC, that changed Kirant’s shareholding in 20 Cashews so that it was recorded as being beneficially held. According to Mr Bolton, he was not notified by Mr Catalano of this change but it was brought to his attention in “around August 2024” by Mr Patton. Elsewhere in his affidavit, Mr Bolton says he became aware of a dispute about the entitlement to the shares on 20 March 2024, which is the date that he received an email from Mr Catalano detailing the dividends issued by 20 Cashews. Mr Bolton says he raised Keybridge’s entitlement to a portion of those dividends with Mr Catalano when they were on a beach in Byron Bay, but Mr Catalano said the shares were “not in Keybridge”.

33 By a letter to Mr Catalano dated 23 July 2024, and signed by Mr Patton, Keybridge reported that it had sought legal advice and disputed Mr Catalano’s claim that Keybridge had no interest in the shares in 20 Cashews held by Kirant. The letter reported events from Keybridge’s point of view, and invited Mr Catalano’s response.

34 Mr Catalano duly responded, by letter dated 7 August 2024. On his version of events (as recorded in the letter), the offer to participate was made to Mr Bolton personally, and not to Keybridge. Mr Catalano also stated that the offer was conditional on Mr Bolton’s participation remaining confidential, and that he had not been told Mr Bolton passed the offer on to Keybridge. According to Mr Catalano, he issued the units to Keybridge on the basis it was nominated by Mr Bolton to hold his interest, and he (Mr Catalano) did not know it was a listed company. Mr Catalano referred to various options explored to resolve the question of how Mr Bolton’s participation could be structured.

35 In the course of his narrative, Mr Catalano referred to three further statements released to the market by Keybridge on the ASX platform:

(1) A statement on 3 July 2019, in which Keybridge announced that “the material investment undertaken by KBC did not eventuate as contemplated”.

(2) A statement on 18 October 2019, which included the following statement (emphasis added):

the Transaction was unable to consummate as originally intended by KBC. KBC has been and remains engaged in ongoing discussions with the counterparty to the proposed transaction in an attempt to resolve impediments to the transaction completing as originally intended by KBC. Until those discussions conclude, KBC has elected not to immediately call for the payment to be returned but has obtained a personal guarantee for the transaction principal to ensure it has a security satisfactory to the Keybridge board for the ability to obtain the return of payment, should KBC be unable to complete the Transaction as originally intended by KBC … the Transaction is presently an incomplete transaction that remains confidential.

(3) A statement on 29 October 2019, which included the following statement (emphasis added):

[Keybridge is in] ongoing discussions with the counter-party to the proposed transaction in an attempt to resolve impediments to the transaction completing as originally intended … [Keybridge] has elected not to immediately call for the payment to be returned but has obtained a personal guarantee for the transaction principal to ensure it has a security satisfactory to the Keybridge board for the ability to obtain the return of payment.

These three ASX announcements were not in evidence directly.

36 According to Mr Catalano, Jeremy Kriewaldt (a director of Keybridge) sought to bring the matter to a head and, on 31 May 2020, indicated to Mr Catalano that Keybridge wanted its $5 million returned, to which Mr Catalano agreed. At this point in his narrative, Mr Catalano’s letter turns to the 2 June 2020 Keybridge ASX release, referred to above.

37 There is no evidence of a written response from Keybridge to Mr Catalano’s letter of 7 August 2024. The next point at which the evidence picks up the dispute is 9 December 2024. By that time, WAM had notified Keybridge that it intended to nominate various individuals for appointment to the board at the next general meeting (by way of a letter dated 27 November 2024). WAM did not requisition a shareholders’ meeting by this letter. Subsequently, on 9 December 2024, WAM proceeded to requisition a general meeting pursuant to s 249F of the Corporations Act.

38 On 8 December 2024, Mr Catalano sent an email to Mr Bolton and Mr Patton, in which he raised several matters he wanted addressed: the sale of his shares “and a resolution over the ACM issue”. He also raised the treatment of his son, Luca, and the fact Luca’s bonus had not been paid. Mr Catalano said “[u]nless there is an immediate resolution to these issue you will no longer have my support at board level.” Mr Bolton says he interpreted that as a threat to his position on the board of Keybridge if the issue of entitlement to the interest held by Kirant in 20 Cashews was not resolved in Mr Catalano’s favour. According to Mr Bolton’s evidence, Mr Catalano had made oral threats to that effect as well. Mr Bolton sent an email in response which said (in part):

Keybridge needs the ACM dividend funds returned to it and the 20C shares returned to the trust. There is no other legal, practical or other way to navigate this as far as I can see. There is nothing I can see that a Keybridge Director can do to facilitate a transaction that ends up with you owning the Keybridge 20C stake (without shareholder approval at fair value) if that’s what you’re proposing. I’ve asked you if Jeremy Liebler/ABL want to suggest a lawful basis for us to organise the transaction differently – I’m open to hear it and happy to talk to him, but I haven’t heard.

Assuming the last dividend was paid on 17 July 2023 and a 10% pa rate of funds for money received from you and paid to you, this would be about $4.4 million + $1.93m franking net.

I am as keen as you are to clean this up.

39 The email chain descended from there, with Mr Catalano using a range of profanities in his descriptions of Mr Bolton.

40 These exchanges occurred around the same time as WAM requisitioned the general meeting, which was held on 10 February 2025. Although the resolutions proposed by WAM would also have seen Mr Catalano removed from the board, by the time of the meeting, WAM had, it appears, come to some arrangement with Mr Catalano, and it voted against its resolution to remove Mr Catalano. This meant Mr Catalano kept his seat on the board.

The proposed claim

Proposed claims by Keybridge against Kirant and Mr Catalano

41 Against this background, the statement of claim Mr Bolton wishes to advance in the name of Keybridge would see Keybridge make the following primary claims in relation to Mr Catalano and Kirant (together, alleged breaches):

(a) given Kirant holds the 16.67% shareholding in 20 Cashews on trust for Keybridge but has instead appropriated it for its personal use, Kirant is in breach of trust;

(b) Mr Catalano, as director of Kirant, contravened, or alternatively caused Keybridge to contravene, s 208 of the Corporations Act;

(c) Mr Catalano was involved in a contravention of s 208 of the Corporations Act and thus contravened s 209 of the Corporations Act; and

(d) Mr Catalano has defaulted in the due and punctual performance, payment or satisfaction of the guaranteed obligations in the Catalano Guarantee.

42 The proposed statement of claim asserts that, by reason of the alleged breaches, Keybridge suffered loss and damage and is thus entitled to:

(1) as against Kirant:

(i) equitable compensation;

(ii) alternatively, damages at common law;

(iii) further or alternatively, an account of profits; and

(2) as against Mr Catalano, indemnity for the loss or damage pursuant to the indemnity (in the Catalano Guarantee) given by Mr Catalano in favour of Keybridge.

43 Additionally, by reason of the alleged breaches, according to the draft statement of claim, Keybridge would claim that Mr Catalano has breached various statutory and fiduciary duties owed to Keybridge, and that declarations of contraventions under s 1317E of the Corporations Act should follow.

44 Further and alternatively, Keybridge would seek, as against Mr Catalano:

(a) compensation under s 1317H of the Corporations Act;

(b) equitable compensation;

(c) damages at common law;

(d) an account of profits.

45 Further, Keybridge would also claim that by reason of the alleged breaches, Kirant has acted in deliberate breach of duty, out of self-interest, and adversely to the interests of Keybridge, and that Mr Catalano knowingly assisted with this. To this end, Keybridge would seek as against Mr Catalano:

(a) equitable compensation;

(b) damages at common law;

(c) alternatively, an account of profits.

Proposed alternative claims by Mr Bolton against Kirant and Mr Catalano

46 In the alternative, Mr Bolton proposes to make various claims pursuant to Mr Catalano’s narrative discussed above at paragraphs 34–40 (which Mr Bolton does not admit), wherein Mr Catalano alleges that his offer for Mr Bolton to be a member of the consortium to acquire the shares in RPL was not an offer made to Keybridge but was rather made to Mr Bolton personally.

47 Mr Bolton claims that, in failing to transfer the 16.67% of the issued shares in RPL, alternatively 20 Cashews, to Mr Bolton, Mr Catalano breached a contract between Mr Catalano and himself (referred to as the Bolton Contract). As a result, Mr Bolton is entitled to specific performance of the Bolton Contract as against Mr Catalano and/or Kirant as Mr Catalano’s alter ego and corporate vehicle.

48 Further and alternatively, it is claimed that by reason of Mr Catalano’s breach of the Bolton Contract, Mr Bolton:

(a) has suffered loss and damage, which loss and damage includes the loss of the chance to acquire 16.67% of the shares in RPL, the present-day value of those shares, and any dividend payments and franking credits in respect of those shares; and

(b) is entitled to damages as against Mr Catalano and Kirant as his alter ego and corporate vehicle.

49 While not explicit in the statement of claim in respect of all of the claims to be advanced by Mr Bolton, in oral submissions, counsel for Mr Bolton clarified that any relief ordered in his favour against Mr Catalano and Kirant would also be held by Mr Bolton on trust for the sole benefit of Keybridge and not for the benefit of Mr Bolton personally. This clarification was made in response to Keybridge’s written submissions in which it argued that Mr Bolton was not an appropriate plaintiff to bring derivative proceedings on behalf of Keybridge as his interests in seeking damages, for his own personal benefit, would conflict with Keybridge’s interests. However, upon this oral clarification by counsel for Mr Bolton, no such conflict arises.

Principles governing derivative leave applications

50 Section 236(1) of the Corporations Act provides that a person may bring proceedings on behalf of a company if:

(a)     the person is:

(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.

51 Section 237 of the Corporations Act then relevantly provides that:

(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.

…

52 The principles governing the grant of derivative leave are well-established and were not in dispute in this proceeding. Keybridge relied on a list of propositions established by the authorities with respect to an application for leave under s 237, set out by Colvin J in Atalanta Investments Pty Ltd v Kalgoorlie Projects Pty Ltd [2025] FCA 607 at [18]. Those propositions, which were not disputed by Mr Bolton, are as follows:

(1)     application of the statutory provision involves a binary choice as to whether or not to grant leave, not the making of a discretionary decision as to whether to grant leave;

(2)     if the Court is satisfied that the five statutory criteria are met then leave must be given, there is no residuary discretion;

(3)     if the Court is satisfied that one of the criteria is not made out then leave must be refused;

(4)     the onus is upon the applicant for leave;

(5)     as to the best interests requirement, it is the best interests of the company ‘in the sense of its separate and independent welfare’;

(6)     the good faith requirement applies ‘both to the application for leave and to the desire to bring the underlying action’;

(7)     ‘generally, proceedings are brought in good faith if they are genuinely brought to vindicate a right that the claimant honestly believes he or she has’;

(8)     whether an application for leave was made for the purpose for which the right was granted, or for some other purpose, is a matter that can be inferred from the circumstances of the case;

(9)     whether the requirement of good faith is satisfied is to be objectively determined;

(10)     personal animosity does not necessarily manifest in a lack of good faith;

(11)     leave is not to be given lightly; and

(12)     as a means of limiting the risk of prejudice to the company, leave is often granted on the condition that the applicant for leave indemnify the company for its costs of the proceeding and any adverse costs order against the company arising out of the proceeding.

53 As is apparent from the second and third points in the list above, the grant of leave is not discretionary. If the Court is satisfied of each of the five matters in s 237(2), leave must be granted and, conversely, if the Court is not satisfied of any one of those matters, leave must be refused (see also Huang at [57] (Bathurst CJ, McColl JA and Barrett AJA agreeing at [75], [76]); South Johnstone Mill Ltd v Dennis (2007) 163 FCR 343; [2007] FCA 1448 (South Johnstone) at [60] (Middleton J)).

54 Further, and as noted at point four of Colvin J’s list, it is the Applicant who bears the onus of positively satisfying the Court, on the balance of probabilities, that the criteria identified in s 237(2) have been met: South Johnstone at [61] (Middleton J) citing Swansson v RA Pratt Properties Pty Ltd (2002) 42 ACSR 313; [2002] NSWSC 583 (Swansson) at [24]–[26] (Palmer J); Fiduciary Ltd v Morningstar Research Pty Ltd (2005) 53 ACSR 732; [2005] NSWSC 442 at [15] (Austin J); Re Varsity Queensland Pty Ltd (2006) 60 ACSR 366; [2006] QSC 356 at [9] (Mullins J).

55 As foreshadowed at paragraph 5 above, the key issues for present purposes are whether the Court is satisfied that Mr Bolton is acting in good faith (s 237(2)(b)), and whether the Court is satisfied that it is in the best interests of Keybridge that Mr Bolton be granted leave (s 237(2)(c)). I will therefore address the principles that apply to these two criteria in further detail.

56 As to the question of good faith, the Court will have regard to at least the following two interrelated factors (South Johnstone at [64] (Middleton J)):

(a) whether the Applicant has an honest belief of a good cause of action with reasonable prospects of success; and

(b) whether the Applicant has a collateral purpose that would amount to an abuse of process.

57 It is clear from the above principles that, in order to satisfy s 237(2)(b), the Court must be positively satisfied, on the balance of probabilities, that the applicant is acting in good faith. It follows that, while this criterion will clearly not be satisfied in circumstances where the Court finds that an applicant is acting in bad faith, a finding that s 237(2)(b) has not been satisfied does not necessarily equate to a finding that an applicant is acting in bad faith. Put differently, it is for Mr Bolton to establish that he is acting in good faith to the satisfaction of the Court (rather than for Keybridge to establish that the Applicant is acting in bad faith): Chahwan v Euphoric trading as Clay & Michel (2008) 245 ALR 780; [2008] NSWCA 52 at [69] (Tobias JA, Beazley and Bell JJA agreeing at [1], [128]).

58 As to the question of the company’s best interests, it is well established that s 237(2)(c) requires the Court to be satisfied, not that the proposed derivative action may be, appears to be, or is likely to be, in the best interests of the company but, rather, that it is in fact in the company’s best interests — a “far higher threshold”: Swansson at [55]–[56] (Palmer J); Wood v Links Golf Tasmania Pty Ltd (No 2) [2013] FCA 143 (Wood) at [26] (Gordon J).

59 This requires Mr Bolton to demonstrate that, even if the proposed derivative proceeding were to be unsuccessful, Keybridge would be in no worse a financial position: see Wood at [31] (Gordon J) citing Carpenter v Pioneer Park Pty Ltd (in liq) (2004) 211 ALR 457; [2004] NSWSC 1007 at [38]–[39], [45]–[47] (Barrett J); Roach v Winnote Pty Ltd (2006) 227 ALR 758; [2006] NSWSC 231 at [25]–[29] (Barrett J) and Charlton v Baber (2003) 47 ACSR 31; [2003] NSWSC 745 at [74] (Barrett J).

60 The Court must therefore consider whether the company would be prejudiced by exposure to the expenses of litigation and the risk of an adverse costs order: Power v Ekstein (2010) 77 ACSR 302; [2010] NSWSC 137 (Power) at [108] (Austin J). This risk may be addressed by an indemnity given in favour of the company in respect of the costs to be incurred in conducting the proceeding and to which the company would be exposed if the proceeding were unsuccessful: see, eg Re Fishinthenet Investments Pty Ltd and Coastal Waters Seafood Pty Ltd [2014] NSWSC 260 (Re Fishinthenet) at [31] (Black J); Power at [108] (Austin J). However, in assessing the strength of such an indemnity as a risk mitigant in this context, the Court will have regard to the indemnifying party’s ability to meet the indemnity: see, eg Re Fishinthenet at [31]–[33] (Black J).

61 The Court will also consider evidence as to whether the substance of the redress sought is available by a means which does not require the company to litigate against its will. As Palmer J observed in Swansson (at [59]), if the applicant can achieve the desired result in proceedings in their own name, then it is not in the best interests of the company to be involved in litigation at all.

62 Finally, in the circumstances of this case, where Mr Bolton has already purportedly brought proceedings on Keybridge’s behalf, it is necessary to note that derivative leave may be granted nunc pro tunc, so as to retrospectively rectify this irregularity: South Johnstone at [56] (Middleton J); Maher v Honeysett & Maher Electrical Contractors [2005] NSWSC 859 at [17] (Brereton J).

Consideration

Good faith

63 I am not satisfied that Mr Bolton is acting in good faith. Even accepting that there is room for argument about whether the confidentiality requirement was introduced by Mr Catalano after the arrangement was originally struck (as Mr Bolton contended), and accepting Kirant and Mr Catalano appeared initially (ie prior to mid-2020) to conduct themselves on the basis that Keybridge did, or would, have an interest in the RPL business, Keybridge repeatedly made public statements to the effect that the transaction was incomplete, was the subject of ongoing negotiations, that Keybridge had secured a personal guarantee from Mr Catalano to secure repayment if the transaction could not be completed, before finally announcing that Keybridge had received the refund of its $5 million in respect of the “incomplete” transaction. These statements were variously made in Keybridge’s Half Year Report and ASX announcements approved by Mr Bolton, or the Keybridge board while Mr Bolton was a member of the board.

64 Whatever the “true” initial position (in terms of whether Keybridge was to have an interest without any confidentiality criterion), from mid-2020, Keybridge and Mr Bolton conducted themselves in public on the basis that the investment had, regrettably, not worked out, and Keybridge’s funds had been returned to it. They also conducted themselves in public in the period leading up to the refund and related public statements on the basis that the anticipated investment had not been finalised and was subject to further negotiations. More than that, they also emphasised in public communications that a guarantee had been obtained from Mr Catalano, protecting the company’s interests as it ensured that the funds would be returned to Keybridge, if necessary.

65 Even on Mr Bolton’s account, no steps were taken to challenge or question Mr Catalano’s position until March 2024 at the earliest. Mr Bolton says he assumed the investment was in place for the benefit of Keybridge and was entirely unaware of Mr Catalano’s position until March 2024. This version is difficult — if not impossible — to reconcile with the public statements to which I have referred. Moreover, it is difficult to reconcile with the narrative that Mr Bolton, the newly appointed CEO, brought a promising investment opportunity to the Keybridge board. In that context, there is a striking absence of any evidence of enquiries having been made by Keybridge or Mr Bolton regarding the performance of the company, whether any dividends had been declared, and like matters, for about four years. In view of these matters, I give little weight to Mr Bolton’s claim that, until March 2024, he was entirely unaware of Mr Catalano’s position that the beneficial entitlement to the 16.67% interest in RPL held through Kirant did not rest with Keybridge.

66 Although he was CEO and Managing Director of Keybridge, Mr Bolton took no action to seek to recover the valuable asset he now says he considers Kirant (under Mr Catalano’s control) has wrongly claimed. After mid-2020, the $5 million had been refunded to Keybridge. If Mr Catalano’s version of events is correct, that was done at Keybridge’s request. Even if not (which seems to be Mr Bolton’s version of events), the sum was accepted by Keybridge and there is no evidence Keybridge took issue with where matters were left in mid-2020 until some time in mid-2024.

67 The only explanation Mr Bolton has offered for this hiatus and inaction is that it is understandable that there would be a reluctance for Keybridge, a company with a relatively small board, to take action against a sitting director — Mr Catalano — who controlled over 10% of the shares in Keybridge, when it may be possible to arrive at a non-litigious outcome (noting that Mr Patton’s letter proposed a private arbitration). Be that as it may, I do not accept that Keybridge’s inaction between mid-2020 and mid-2024, and the timing of Mr Bolton’s action — initiated shortly after his removal from the board was confirmed by the NSWCA and he had been suspended from his executive roles — can be entirely explained away on that basis. That is so particularly when the contents of the various ASX releases and statements in Keybridge’s accounts are considered.

68 I should be clear that, in finding that Mr Bolton has not met his onus of satisfying the Court that he is acting in good faith, I am not expressing a conclusion that Mr Bolton is acting in bad faith or is proceeding with the present application despite subjectively believing the causes of action not to be sound.

69 I note that Mr Bolton submitted that he has demonstrated his good faith by not acceding to Mr Catalano’s threats (as Mr Bolton would characterise them), to withdraw support at the board level if the issue of the interest in RPL was not resolved in his favour. According to Mr Bolton, that threat was advanced in writing in Mr Catalano’s 8 December 2024 email, as well as orally on various occasions since “about May 2024”.

70 On Mr Bolton’s submission, the easy thing for Mr Bolton to do would have been to accede to Mr Catalano’s position regarding the interest in the RPL business. I am not persuaded by that argument. There is no evidence that Mr Bolton did in fact take further steps to pursue Keybridge’s interests (as he would have it) in the face of Mr Catalano’s threats, before he lost Mr Catalano’s support and was ejected from the board at the 10 February 2025 meeting. Further, for someone who is a director, Managing Director and CEO of a listed company not to accede to threats is to do no more than what would be expected and required of a person in that position. It does not assist in establishing good faith in seeking to obtain derivative leave to bring a proceeding once the alleged threat has been carried into effect, and Mr Bolton was ejected from the board.

71 To the extent that the proffering of an undertaking to meet Keybridge’s costs is relied on to demonstrate Mr Bolton’s good faith — a matter which is suggested by Mr Bolton’s written submissions — that does not lead me to reach a positive state of satisfaction in respect of Mr Bolton’s good faith. First, the undertaking may not have any value. Secondly, and in any event, the proffering of an undertaking does not, taken into consideration with all the matters addressed above in relation to good faith, lead me to be satisfied of Mr Bolton’s good faith.

Best interests

72 As set out at paragraphs 58–60 above, the s 237(c) criterion requires the Court to be satisfied that the company would be in no worse a financial position even if the proposed derivative proceeding were to be unsuccessful.

73 In their letter dated 4 June 2025 advising Keybridge of the intention to bring an application for derivative leave, Mr Bolton’s solicitors stated that “Mr Bolton is prepared to indemnify Keybridge for any adverse costs order made by the Court against Keybridge in respect of these derivative claims in the proposed proceedings, should the proposed proceedings be unsuccessful”. In a subsequent letter dated 5 August 2025 posing various questions about the proposed proceedings, Mr Bolton’s solicitors said that, if Keybridge took a neutral position on various matters, it should explain “why it should be entitled to any indemnity from Mr Bolton”.

74 Mr Bolton’s correspondence has been cagey on the proffering of an indemnity, first offering to give one, and then appearing to require some further justification from Keybridge if one were to be required. Despite repeated invitations by Keybridge, Mr Bolton has not proffered any wording for the indemnity he proposed to give. While the letter of 4 June 2025 refers only to an indemnity in respect of “adverse costs orders”, Mr Bolton’s first affidavit also deposes to Mr Bolton being prepared to “pay Keybridge’s costs of pursuing the [claim] against Kirant and Mr Catalano”. I therefore proceed on the basis that Mr Bolton is willing to give an indemnity that extends to Keybridge’s own costs of the proceeding. It is not clear, however, whether Mr Bolton would indemnify Keybridge in respect of any security for costs Keybridge may be required to provide.

75 Even putting these matters of detail to one side, the more important issue raised by Keybridge is that Mr Bolton has not established that he has the financial wherewithal to make good on the undertaking he has offered, and has not offered any security in support of the undertaking. Keybridge also relied on the fact that Mr Bolton elected not to respond to enquiries about his capacity to make good on the undertaking.

76 Keybridge further submitted that Mr Bolton is an unsuitable candidate for the grant of leave given the chequered history of litigation in which he has been involved, his previous disqualification as a director, and his association with numerous failed entities.

77 I turn, next, to Mr Bolton’s financial position, and litigation history.

78 In September 2024, Mr Bolton was joined to the NSWSC proceeding in which WAM sought derivative leave. A few days after he was joined, the NSWSC made orders freezing Mr Bolton’s Australian assets up to the unencumbered value of $4.75 million and his Australian and worldwide assets to that same figure (should Mr Bolton not have Australian assets in that amount): Re Keybridge Capital Ltd [2024] NSWSC 1215. After being extended on numerous occasions, the freezing orders are now in place until further order.

79 Mr Bolton has not put on any evidence concerning his financial position or whether he has any assets that would support the undertaking he has proffered. The evidence put on by Keybridge included evidence that Mr Bolton:

(a) holds 3% of the shares in Australian Style Holdings Pty Ltd and, through this interest, 3% of the shares in Byron Asset Management Pty Ltd, each of which has $100 of paid-up share capital;

(b) is not the registered proprietor of any real property in Australia, but is the lessee of real property in New South Wales, which lease is encumbered by two mortgages; and

(c) has granted two security interests over his personal property, comprising:

(i) a security interest expiring in 2041 with collateral being 670,000 shares in Keybridge; and

(ii) a security interest registered without a specified end time, with the collateral type described as commercial and collateral class being all present and after-acquired property, with exceptions in favour of Westpac Banking Corporation as secured party.

80 Keybridge also put on evidence that Mr Bolton was disqualified as a director between 17 and 19 November 2015 and between 17 December 2015 and 14 December 2018, and has been a director of 11 liquidated companies. Keybridge’s submissions also attached a litigation history chart in support of its submission that Mr Bolton and companies associated with him (including Keybridge, while Mr Bolton was managing director) have a long history of “unmeritorious and/or otherwise chaotically or delinquently run litigation”. Keybridge also noted that a third party costs order was made against Mr Bolton personally in August 2025: Re Yowie Group Ltd (No 2) [2025] NSWSC 910. Keybridge accepted, however, that there was no evidence that this (or any other) costs order made against Mr Bolton had been quantified but remained unsatisfied.

81 I am not satisfied that it is in the best interests of Keybridge that derivative leave be granted. That is because Mr Bolton has not satisfied me that the company would not be worse off, if derivative leave were granted, but the proceeding failed. Mr Bolton is subject to a freezing order. While that freezing order is capped at $4.75 million, Mr Bolton has not put on any evidence that he has material assets over and above that sum, whether in Australia or elsewhere. That was evidence that only Mr Bolton was able to advance. He chose not to, and also failed to respond to the enquiries made by Keybridge about his financial position.

82 Mr Bolton submitted that none of this should matter, as he has offered the undertaking and the Court should not assume he would fail to make good on it. It was also suggested that the proffering of the undertaking alone was enough as, if Mr Bolton did fail to make good on it, Keybridge could bankrupt him. I reject both contentions. It is common, where a financial undertaking has been offered, for the value of that undertaking to be examined in light of the capacity of the person giving the undertaking to make good on it: in a derivative leave context see, eg Refishinthenet [31]–[33] (Black J), Re Carbon Copies Composites Pty Ltd [2022] NSWSC 1638 at [32]–[34] (Black J) and Re Carbon Copies Composites Pty Ltd [2022] NSWSC 1762 at [2]–[11] (Black J); in an undertaking as to damages context see, eg EPP v Levy [2001] NSWSC 482 at [30]–[40] (Barrett J) and Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd [2018] FCA 142 at [49]–[52] (Beach J).

83 The difficulty does not arise by reason of the Court assuming that Mr Bolton will not make good on the undertaking. Rather, it arises from the absence of evidence that an undertaking given by Mr Bolton has any value where he is subject to a substantial freezing order and the enquiries that Keybridge has been able to make have not revealed any assets of any significant value in Australia, but have revealed that Mr Bolton has given security interests over his assets (as referred to in paragraph 79(c) above). As to the suggestion that Keybridge could bankrupt Mr Bolton, that course patently would not leave Keybridge no worse off if the litigation were run and lost, and Mr Bolton did not make good on his indemnity.

Other matters

84 Should the refusal of the application be subject to an appeal, I will record my findings on the other criteria specified in s 237(2):

(1) Mr Bolton is a person who can make an application for derivative leave as he is a current member of Keybridge and a former director (and therefore officer) of Keybridge: s 236(1)(a).

(2) It is probable that Keybridge will not itself bring the proceedings contemplated: s 237(2)(a). Keybridge actively opposed the derivative leave application, but did not contend it would itself bring the proceeding. The foreshadowed proceeding relates to events occurring from mid-2019 to September 2021. The board of Keybridge has not taken any step towards bringing a proceeding of the kind contemplated. Rather, its opposition to the proposed proceeding was premised, in part, on the proceeding lacking merit and having being devised by Mr Bolton as retaliation against Mr Catalano for the latter having voted shares he controlled to oust Mr Bolton from the board.

(3) There is a serious question to be tried: s 237(2)(d). Although claims sought to be advanced by the proposed proceeding appear weak, it is not appropriate on an application such as the present to delve too far into the merits. For the purposes of s 237(2)(d), I am satisfied that there is a serious question to be tried notwithstanding that the merits appear weak given that the material discloses an explanation inconsistent with the contentions Mr Bolton seeks to advance.

(4) It would be appropriate to grant leave notwithstanding any lack of compliance with s 237(2)(e)(i): s 237(2)(e)(ii). The notice given to Keybridge regarding the proposed application referred to claims against Kirant, but not the claims against Mr Catalano. Were I persuaded that the application should otherwise be granted, I would have granted that leave pursuant to s 237(2)(e)(ii) even though there may not have been full compliance with s 237(2)(e)(i) insofar as the claims against Mr Catalano were not foreshadowed in the notice given to Keybridge.

85 There are a few other matters that I should address, should this matter go further:

(1) I reject the contention that Mr Bolton is in a position of conflict by reason of the personal causes of action he advances. As was clarified in oral submissions, Mr Bolton’s personal causes of action are advanced wholly on the basis that he would hold the fruits of any relief on trust for Keybridge.

(2) I reject the submission, advanced by Keybridge, that derivative leave should be refused on the basis that Mr Bolton can secure the substantive relief he claims without the need to obtain derivative leave to bring proceedings in Keybridge’s name. Mr Bolton’s primary position is that the investment was made by Keybridge, not by him on behalf of Keybridge, or subject to a resulting trust. The personal causes of action he has pleaded in the proposed statement of claim are advanced as alternative claims, should Mr Catalano’s suggestion (in correspondence) that the investment opportunity was only offered to Mr Bolton personally, be advanced in defence to the proposed statement of claim, and succeed.

(3) I have not considered Mr Bolton’s litigation history as tending against the grant of derivative leave. While Mr Bolton, and companies he has been associated with, have engaged in a lot of litigation, the Court would need to know more about the history and details of those proceedings before I would reach any view that Mr Bolton’s litigation history tends against the grant of leave on the basis that he has a history of being involved in chaotic and poorly conducted litigation (as Keybridge suggested).

(4) Contrary to Mr Bolton’s submissions, I do not regard the fact that Kirant and Mr Catalano did not put on any evidence as telling. They are proposed defendants, and it is not usually the case that proposed defendants will participate in a substantive way in an application for the grant of derivative leave.

(5) Mr Bolton has the onus to satisfy the Court that each precondition to the grant of leave has been satisfied. He is not absolved of that burden because Keybridge chose to contest some matters, but not others.

Conclusion

86 The application for derivative leave will be dismissed with costs. At the time of the hearing, I was informed that Mr Bolton had not formed a view as to whether he would proceed with any element of his personal claims if derivative leave were refused. The matter has been listed for case management (with a related proceeding) on 20 November 2025, at which point it can be determined whether there is any further utility in this proceeding.

Associate:

Dated:    17 October 2025