Power v Ekstein

The matter before the court involved a dispute between shareholders of two companies, Power and Ekstein. The plaintiff sought to add derivative claims to existing proceedings against the two companies, which were already seeking relief against oppression and raised other matters. The plaintiff also sought to require the companies, already joined as defendants, to become plaintiffs. The court was required to determine whether the derivative claims could be added to the existing proceedings and whether the companies, already joined as defendants, were required to become plaintiffs. The court also had to consider whether there was a serious question to be tried in relation to the derivative claims and whether the plaintiff had shown that it was appropriate to make formal orders to limit the use of the companies' funds in the litigation and to require independent legal representation.

The court found that the derivative claims could be added to the existing proceedings, as they were closely related to the other matters being litigated. However, the court held that the companies, already joined as defendants, were not required to become plaintiffs. The court found that there was a serious question to be tried in relation to the derivative claims, and that it was appropriate to make formal orders to limit the use of the companies' funds in the litigation and to require independent legal representation. The court considered the potential prejudice to the companies if they were required to bear the costs of the litigation, and the potential for conflicts of interest if the companies were required to instruct their own lawyers.

The court made formal orders limiting the use of the companies' funds in the litigation and requiring independent legal representation for the companies. The court found that the plaintiff had not shown that it was appropriate to make any other formal orders, such as requiring the companies to become plaintiffs or limiting the use of their funds in other ways. The court considered the potential prejudice to the companies if they were required to bear the costs of the litigation, and the potential for conflicts of interest if the companies were required to instruct their own lawyers.

The court's final orders included the addition of derivative claims to the existing proceedings, the limitation of the use of the companies' funds in the litigation, and the requirement for independent legal representation for the companies. The court did not require the companies to become plaintiffs or make any other formal orders. The court's decision provides guidance on the appropriate scope of derivative claims in statutory derivative actions and the factors that should be considered when making formal orders in such proceedings.