Hua and Song v Tuckerman

The plaintiffs, Hua and Song, brought a derivative action against the defendants in relation to alleged breaches of director’s duties. The defendants sought leave under the Court’s inherent jurisdiction to represent the company and its subsidiaries for the purposes of bringing claims against various parties. The liquidator of the company opposed the commencement of the derivative action. The plaintiffs sought indemnity costs in respect of certain paragraphs of the defendants’ notice of motion, as well as an order for costs forthwith against the defendants. The legal issues were whether the proposed derivative action exhibited such a degree of merit as to be neither vexatious or oppressive, whether the liquidator and the company were financially protected by means of indemnity, and whether indemnity costs and an order for costs forthwith were appropriate in the circumstances.

The Court found that the proposed derivative action did exhibit a degree of merit and was not vexatious or oppressive. The Court also found that the liquidator and the company were financially protected by means of indemnity. The Court refused to grant indemnity costs in respect of certain paragraphs of the defendants’ notice of motion as the defendants were self-represented litigants and the plaintiffs had no connection to the third parties mentioned in those paragraphs. The Court found that the defendants’ amended notice of motion was dismissed, and while the plaintiffs had amended their pleadings, the delay in the final determination of the proceedings was in part due to the plaintiffs’ amendment. Therefore, the Court ordered that costs be payable forthwith against the defendants.

The Court found that the liquidator and the company were financially protected by means of indemnity, and that the proposed derivative action exhibited a degree of merit and was not vexatious or oppressive. The Court refused to grant indemnity costs in respect of certain paragraphs of the defendants’ notice of motion, as the plaintiffs had no connection to the third parties mentioned in those paragraphs. The Court also found that while the plaintiffs had amended their pleadings, the delay in the final determination of the proceedings was in part due to the plaintiffs’ amendment. Therefore, the Court ordered that costs be payable forthwith against the defendants.