SUPREME COURT OF QUEENSLAND
CITATION:
Virgtel Limited & Anor v Zabusky & Ors [2006] QSC 66
PARTIES:
VIRGTEL LIMITED (ACN 107 156 972)
(first applicant)
VIRGTEL GLOBAL NETWORKS NV
(second applicant)
v
HARVEY ZABUSKY
(first respondent)
AMALIA ZABUSKY
(second respondent)
EREZ ZABUSKY
(third respondent)
COMMSLOGIC PTY LTD (ACN 109 057 543)
(fourth respondent)
SOFTQUEST SOLUTIONS PTY LTD (ACN 057 679 599)
(fifth respondent)
VIRGIN TECHNOLOGIES LIMITED
(sixth respondent)FILE NO/S:
SC No 6547 of 2005
DIVISION:
Trial Division
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
6 April 2006
DELIVERED AT:
Brisbane
HEARING DATE:
3 March 2006
JUDGE:
de Jersey CJ
ORDER:
On the application filed by the applicants on 16 December 2005, there will be a declaration that the applicants were entitled to commence, and may continue this proceeding, as a derivative action on behalf of the sixth respondent, against the first to fifth respondents; and that the first to fifth respondents pay the applicants’ costs of and incidental to the application to be assessed 1.
2. On the application of the first to fifth respondents filed on 20 December 2005, there will be an order that the application be dismissed, and an order that those applicants (being the first to fifth respondents in the proceeding) pay the respondents’ (being the applicants Virgtel Limited and Virgtel Global Networks NV in the proceeding) costs of and incidental to the application to be assessed
CATCHWORDS:
CORPORATIONS – MEMBERSHIP, RIGHTS & REMEDIES – MEMBERS’ REMEDIES & INTERNAL DISPUTES – PROCEEDING ON BEHALF OF COMPANY BY MEMBER – STATUTORY DERIVATIVE ACTION – procedural validity of derivative proceeding, under general law – summary determination thereof – subject company incorporated in Nigeria – whether issue governed by Nigerian or Queensland law – significance of receivership of company – standing of shareholders to bring proceeding – “justice”, or 5th , exception to the rule in Foss v Harbottle – issue of forum non conveniens
Companies and Allied Matters Act 1990 (Nigeria) s 182, s 303, s 393, s 494
Corporations Act 2001 (Cth) s 236, s 266, s 267
Federal Court of Australia Act 1976 (Cth) s 5
Foreign Corporations (Application of Laws) Act 1989 s 7
Foreign Judgments Act 1991 (Cth)
Foreign Judgment Regulation 1992 (Cth)The following cases were cited:
Adetona v Edet (2004) 6 NWLR 338
Advent Investors Pty Ltd & Ors v Goldhirsch & Ors (2001) 37 ACSR 529
Aloridge Pty Ltd v West Australian Gem Explorers Pty Ltd (1995) 127 ALR 410
Base Metal Trading Ltd v Shamurin [2004] EWCA Civ 1316
Biala Pty Ltd & Anor v Mallina Holdings Ltd & Ors (No 2) (1993) 13 WAR 11
Bidjara Aboriginal Housing and Land Co Ltd v Sharma (Federal Court of Australia, Q 113/2003, 10 December 2003)
Cadwallader v Bajco Pty Ltd (2001) 189 ALR 370
Carre v Owners Corporation [2003] NSWSC 397
Ebbage v Manthey [2001] QSC 4; SC No 6609 of 2000, 17 January 2001
Ernst & Young v Tynski Pty Ltd (2003) 47 ACSR…
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- Case
- [2006] QSC 66
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the court were the applicability of Queensland or Nigerian law to the derivative action, the validity of the plaintiffs' standing to bring the proceeding, and whether the court should exercise its discretion to decline jurisdiction based on the principle of forum non conveniens. The court also considered the "justice" or "fifth exception" to the rule in Foss v Harbottle, which allows a shareholder to bring a derivative action if it is just and equitable to do so.
In ruling on these issues, the court determined that the proceeding was governed by Queensland law, despite the company's incorporation in Nigeria. The court held that the plaintiffs had standing to bring the derivative action as they were shareholders of the company and had a genuine interest in protecting the company's assets. The court further found that the principle of forum non conveniens did not apply, as there was no other more appropriate forum for the dispute to be heard. Finally, the court found that the plaintiffs' action was just and equitable under the fifth exception to the rule in Foss v Harbottle, given the allegations of mismanagement and harm to the company.
The court made a declaration that the plaintiffs were entitled to commence and continue the derivative action on behalf of Virgtel Ltd. The defendants were ordered to pay the plaintiffs' costs of the application. The court also dismissed the defendants' application, ordering them to pay the plaintiffs' costs of that application.
Orders
Orders of the court
On the application filed by the applicants on 16 December 2005, there will be a declaration that the applicants were entitled to commence, and may continue this proceeding, as a derivative action on behalf of the sixth respondent, against the first to fifth respondents; and that the first to fifth respondents pay the applicants’ costs of and incidental to the application to be assessed 1.
2. On the application of the first to fifth respondents filed on 20 December 2005, there will be an order that the application be dismissed, and an order that those applicants (being the first to fifth respondents in the proceeding) pay the respondents’ (being the applicants Virgtel Limited and Virgtel Global Networks NV in the proceeding) costs of and incidental to the application to be assessed
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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