Nature’s Care Holdings Pty Ltd v Chen (No 4)

The plaintiff, Nature’s Care Holdings Pty Ltd, sought an interim injunction to prevent the defendant, Mr Chen, from transferring shares of a subsidiary company, Health & Care Pty Ltd, to a third party. The plaintiff, along with two related companies, sought to restrain Mr Chen from transferring the shares as it was alleged that the transfer would breach certain contractual obligations. The case was heard in the Federal Court of Australia. The central issue before the court was whether the majority shareholders of the plaintiff companies, who were also the plaintiffs in the action, should bear the costs of the unsuccessful application for an interim injunction. The court also had to decide if the majority shareholders and the plaintiffs should be jointly and severally liable for these costs and whether those costs should be assessed and payable forthwith.

The court found that the majority shareholders of the plaintiff companies should bear the costs of the unsuccessful application for an interim injunction. The court reasoned that the majority shareholders, as the primary decision-makers and beneficiaries of the litigation, should be responsible for the costs, as they were the ones who instigated the legal action. The court further held that the majority shareholders and the plaintiffs should be jointly and severally liable for these costs. This meant that if one party failed to pay, the other could be required to cover the full amount. Finally, the court determined that the costs should be assessed and payable forthwith, indicating an urgency in the matter.

The final orders of the court included a costs order that the majority shareholders of the plaintiff companies were to pay the defendant's costs of the unsuccessful application for an interim injunction. The majority shareholders and the plaintiffs were also jointly and severally liable for these costs, which were to be assessed and payable forthwith. This decision underscores the importance of the court's power to order costs in cases of unsuccessful applications for interim relief, particularly when the majority shareholders are directly involved in the litigation process.