Keybridge Capital Limited v Kirant Regional Media Investments Pty Ltd

Keybridge Capital Limited v Kirant Regional Media Investments Pty Ltd [2025] FCA 1265 is a Federal Court decision about derivative proceedings under the Corporations Act. It is not really a commercial lease or property case, even though it may appear in that search context.

The second plaintiff, Nicholas Bolton, sought leave nunc pro tunc to continue a proceeding in Keybridge's name after arranging for it to be filed without company authority. The proposed claim concerned a disputed 2019 investment structure linked to the acquisition of Australian Community Media and whether Kirant held a 16.67% interest on trust for Keybridge.

The court dismissed the application. Button J was not satisfied that Mr Bolton was acting in good faith and was also not satisfied that granting leave would be in Keybridge's best interests. Those were mandatory preconditions to derivative leave.

The commercial story starts with Nine Entertainment's sale of the Australian Community Media and Printing business in 2019. Mr Catalano and Alex Waislitz assembled a bid structure using special purpose companies. The judgment records that the extent of Mr Bolton's involvement in developing the bid and consortium was disputed, but Mr Bolton's evidence was that he and Mr Catalano had an understanding that he would participate through a minority interest, and that he thought the opportunity should be offered to Keybridge.

The structure used 19 Cashews Pty Ltd as the bid vehicle, with its shares held by 20 Cashews Pty Ltd. Mr Waislitz held 50% of the shares in 20 Cashews, Mr Catalano through another company held 33.33%, and Kirant held the remaining 16.67%. The central controversy was whether Kirant held that 16.67% interest on trust for Keybridge or for itself.

The judgment records that the Australian Media Holdings Unit Trust was established with Kirant as trustee and Keybridge as sole unitholder. On 27 June 2019, Keybridge transferred $5 million to Ashurst, solicitors for Nine. There were also documents that appeared to support Keybridge's claimed position, including board minutes, trust documents, a unit certificate and a guarantee signed by Mr Catalano.

But the story did not stop with those documents. The court also had before it a series of public statements by Keybridge that described the transaction in a very different way. Those statements repeatedly referred to the investment as confidential and incomplete, said the trustee had not yet vested the 16.67% shareholding to the unit trust, and said vesting depended on the consent or agreement of the other shareholders. They also contemplated a refund of the $5 million if that consent was not obtained.

That refund pathway then became reality. On 28 June 2020, Mr Catalano emailed Mr Bolton saying he had been unable to obtain the consent of the other shareholders to vest the shares for Keybridge's benefit and undertaking to return the $5 million by 25 July 2020. Mr Bolton responded that Keybridge reserved its rights. Keybridge then released an ASX announcement saying the other shareholders would not consent to the vesting of shares to the unit trust and that the $5 million would be returned. Keybridge received the money on 24 July 2020 and continued to refer publicly to the transaction as incomplete.

The judgment says that, on the documents before the court, matters were then left on that basis for some time. There was no suggestion that Keybridge sought to return the refunded money, treated it as something other than a refund, or at that time insisted that it was entitled to the equity interest.

The dispute resurfaced in 2024. Keybridge wrote to Mr Catalano disputing his claim that Keybridge had no interest in the shares held by Kirant. Mr Catalano responded with his own account, including that the original offer had been made to Mr Bolton personally and was conditional on confidentiality.

At the same time, a separate struggle for control of Keybridge was underway. WAM, a major shareholder, arranged a general meeting on 10 February 2025 at which Mr Bolton and two other directors were voted off the board. Mr Catalano voted with WAM. The validity of that vote was later confirmed in New South Wales proceedings, and Mr Bolton's appeal failed on 8 May 2025. Shortly after that failure, he commenced this Federal Court proceeding in Keybridge's name and then sought derivative leave after the fact.

The immediate legal issue was not whether Keybridge definitely owned the disputed 16.67% interest. The court expressly noted that applications of this kind do not involve delving far into the merits of the proposed proceeding. Instead, the question was whether Mr Bolton should be granted leave under ss 236 and 237(1) of the Corporations Act to bring a derivative action in Keybridge's name against Kirant and Mr Catalano.

The procedural posture mattered. Mr Bolton had already arranged for the proceeding to be commenced naming Keybridge as first plaintiff without authorisation from the company and without derivative leave having first been obtained. He therefore sought leave nunc pro tunc, meaning leave after the event.

Under s 237, certain statutory preconditions had to be satisfied before leave could be granted. The judgment identifies two as decisive here. First, the court had to be satisfied that Mr Bolton was acting in good faith. Secondly, the court had to be satisfied that granting leave would be in the best interests of Keybridge. Both are mandatory requirements.

That meant the court had to look beyond the bare assertion that Keybridge might have a claim. It had to assess the surrounding circumstances, including Mr Bolton's role in the events while he was CEO and director, the timing of the application after he had been removed from the board, the company's own public statements about the transaction, and whether the proposed litigation genuinely served the company rather than a personal or factional objective.

Button J dismissed the application. The court held that two mandatory statutory preconditions had not been established. It was not satisfied that Mr Bolton was acting in good faith, and it was not satisfied that granting leave would be in Keybridge's best interests.

The reasons available show several strands in that conclusion. Mr Bolton had been CEO throughout the period when the events said to give rise to the proposed claim occurred, and a director for most of that period as well. Yet he only sought to litigate the claim after he had been ejected from the board and after his appeal against that outcome had failed. The court treated that timing as important context.

The court also relied on Keybridge's own public statements, many expressly authorised by Mr Bolton or otherwise issued while he was on the board. Those statements consistently presented the acquisition as an incomplete transaction and said the $5 million would be returned if no arrangement could be reached with the other shareholders. The court rejected the submission that Keybridge was merely repeating what Kirant had told it. On the judgment, Keybridge itself had consistently presented the transaction that way in its public documents.

The court further noted that Keybridge accepted the return of the $5 million in July 2020 and, on the material before it, did not then insist that it was entitled to the equity interest or seek to reverse the refund. That history appears to have weighed against the proposition that the later proceeding was in the company's best interests.

The formal orders were that the application for leave nunc pro tunc be dismissed and that Mr Bolton pay Keybridge's costs of the application. Kirant and Mr Catalano did not appear at the hearing, having filed written submissions explaining that putative defendants are not ordinarily heard on a derivative leave application.

One of the most useful features of this case for business readers is the way it shows documents and conduct pulling in opposite directions. On one side were materials that Mr Bolton said supported Keybridge's beneficial entitlement: board minutes referring to a 16.67% participation opportunity, registration material indicating shares would not be held beneficially, trust documents, a unit certificate, and the Catalano guarantee.

On the other side were Keybridge's own public disclosures. The half-year report described the $5 million as a deposit for a potential transaction pending completion or refund. The explanatory note said the trustee had not yet vested the 16.67% shareholding to the unit trust, that vesting depended on the consent of the other shareholders, and that if consent was not forthcoming the trustee had undertaken to transfer $5 million cash instead. ASX announcements in June 2020 repeated the same basic position.

For a court assessing good faith and the company's best interests, that inconsistency mattered. A business cannot assume that one set of internal or transactional documents will be viewed in isolation. Courts will also look at what the company told the market, how it described the asset in its accounts, whether it accepted a refund, and what it did or did not do when the dispute first crystallised.

That is especially important for listed entities, but the same principle applies more broadly. If your business uses a trustee, nominee or side arrangement, the legal paperwork, board approvals, financial reporting and external communications should all align. If they do not, the inconsistency may later become a major litigation problem.

For business owners, this case is a warning about two separate risks. The first is transaction risk. Layered structures can be commercially sensible, but they need disciplined drafting. If money is advanced through a trustee or special purpose vehicle, the documents should answer basic questions immediately: who owns the asset, who merely holds legal title, what conditions must be met, whether confidentiality is essential, and whether the investor gets equity, a debt claim, or a refund if the structure cannot be completed.

The second is governance risk. If a company may have a claim, the issue should be addressed through proper board process while the relevant decision-makers are in office. Delay can be damaging. So can public disclosures that frame the transaction in a way that later undermines the litigation case. Here, the court appears to have been influenced by the fact that the proposed claim was only pushed after a board spill and failed appeal, even though Mr Bolton had been CEO during the underlying events.

The decision does not mean derivative actions are unavailable. It means they are closely controlled. A former director or shareholder cannot assume the court will let them use the company's name simply because they believe the company has been wronged. The court will ask whether the applicant is acting in good faith and whether the company itself should truly be put into the litigation.

Businesses should also note the practical significance of accepting repayment. The judgment does not say that a refund always destroys later rights, but it shows that accepting a refund without promptly and clearly contesting its legal effect can become powerful evidence against a later claim.

The judgment was delivered on 17 October 2025 by Button J in the Federal Court of Australia. The application before the court was for leave nunc pro tunc under ss 236 and 237(1) of the Corporations Act. The court dismissed the application and ordered Mr Bolton to pay Keybridge's costs of the application.

The case should be read as a derivative action decision in the corporations and governance space. It is not a substantive ruling on commercial leasing, and it is not a final determination of the underlying beneficial ownership dispute.