Reference no: EM133263046

Fun Parties Pty Ltd (FP) is a party planning and event organising company that also owns a number of function centres across Queensland. FP has four directors; Silvia is the Managing Director. The four directors collectively own 60% of the issued shares. Winston, who is not a director, owns 9% of the shares. The remainder is made up of a large group of individual shareholders.

FP had been performing well, but in the last 12 months had a significant downturn in their profitability. Without obtaining an independent valuation, the Board of FP pass a resolution to sell off all of their function centres to Rtex Ltd to reduce their debt. Unknown to the other directors, Rtex Ltd is the family company of Silvia.

Winston has obtained a valuation report that shows the function centres have been sold off at a significant undervalue.

Assume that Silvia has breached her duty to act in good faith and in the interests of the company and the duty to avoid conflicts of interest and the other directors of FP have breached their duty of care.

Advise Winston whether the court will grant him leave to bring a statutory derivative action under ss 236/237 of the Corporations Act 2001 (Cth).