Virgtel Ltd & Ors v Zabusky & Ors

In the case of Virgtel Ltd & Ors v Zabusky & Ors, the applicants sought to bring a derivative action on behalf of Virgin Technologies Limited (VTL) against various respondents for alleged misdealing and misappropriation of funds. The applicants argued that they were entitled to bring the action as shareholders or members of VTL, claiming damages, accounts, and declarations of constructive trust. The respondents contested the applicants' standing and the merits of the claims.

The primary legal issues before the court were whether the second and third applicants had standing to bring the derivative action and whether their claims had an arguable basis. The court also had to determine the appropriate basis for assessing costs, specifically whether the claims of the second and third applicants were hopeless, warranting indemnity costs. Furthermore, the court needed to decide whether the money paid into court by the applicants should be paid to the respondents after assessing the costs.

The court held that the second and third applicants did not have standing to bring the derivative action as they were not members or shareholders of VTL. Additionally, the court found that the claims of the second and third applicants were hopeless, and therefore, the costs should be assessed on an indemnity basis. The court also determined that the respondents were entitled to the funds in court after the costs assessments, as there was strict proof of their entitlement.

The final orders of the court were that the applicants must pay the respondents' costs of the proceeding, including the application to dismiss for want of prosecution. The parties were required to submit written submissions on the costs of the application, limited to five pages, by a specified date.