Zabusky v Virgtel Ltd

Case [2012] QCA 107

SUPREME COURT OF QUEENSLAND

CITATION:

Zabusky & Ors v Virgtel Ltd & Ors [2012] QCA 107

PARTIES:

HARVEY ZABUSKY
(first appellant)
AMALIA ZABUSKY
(second appellant)
EREZ ZABUSKY
(third appellant)
SOFTQUEST SOLUTIONS PTY LTD
ACN 057 679 599
(fourth appellant)
v
VIRGTEL LTD
(first respondent)
VIRGTEL GLOBAL NETWORKS NV
(second respondent)
VIRGIN TECHNOLOGIES LTD
(third respondent)

FILE NO/S:

Appeal No 9072 of 2011
SC No 6547 of 2005

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

20 April 2012

DELIVERED AT:

Brisbane

HEARING DATE:

28 March 2012

JUDGES:

Holmes and Chesterman JJA, and P Lyons J
Joint reasons for judgment of Holmes and Chesterman JJA; separate reasons of P Lyons, concurring as to the orders made

ORDER:

The appeal is dismissed with costs.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL  GENERAL PRINCIPLES – INTERFERENCE WITH DISCRETION OF COURT BELOW – PARTICULAR CASES – OTHER MATTERS – OTHER CASES – where the appellants sought a stay of a derivative action until the resolution of foreign proceedings – where the appellants argued that the action should be stayed because it was not properly constituted as a derivative action – whether the argument that the action was not properly constituted departed from the appeal grounds and amounted to a collateral attack on an earlier judgment declaring an entitlement to commence the action – whether the learned primary judge regarded the stay as necessarily precluded by the existence of an issue not common to both proceedings – whether the learned judge erred in refusing to grant a temporary stay of the action

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – PARTIES – OTHER MATTERS – where the learned primary judge ordered the joinder of two companies nunc pro tunc as applicants to a derivative action –  where the appellants argued that leave for the derivative action was required to be obtained under Nigerian legislation – where the appellants argued that there was no entitlement to relief because the cause of action had been sold – whether questions about leave for the bringing of the action and the entitlement to relief were already resolved by an earlier judgment declaring an entitlement to commence the action – whether an unregistered shareholder is precluded from bringing or joining a derivative action – whether one of the two companies was precluded from joining the action because it had notice of the action when it acquired shares in the company on whose behalf the action was brought – whether the learned judge wrongly regarded the two companies’ presence as relevant to the resolution of an issue in the action about retainer of the respondents’ lawyers – whether the learned judge erred in ordering the joinder

Company and Allied Matters Acts 1990 (Nigeria), s 303(2)(a), s 303(2)(b)
Corporations Act 2001 (Cth), s 236(1)(a)(i)
Eastern Caribbean Supreme Court Civil Procedure Rules 2000
Nigeria Companies and Allied Matters Act
Nigeria Weekly Law Reports
Panama's Corporation Law

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AGLC
Zabusky v Virgtel Ltd [2012] QCA 107
Case
[2012] QCA 107
Decision Date

CaseChat Overview and Summary

The appeal in Zabusky v Virgtel Ltd involved the appellants challenging the conduct of a derivative action brought on behalf of a company against the respondents. The appellants sought to stay the derivative action pending the resolution of foreign proceedings, and argued that the action was not properly constituted as a derivative action. The appellants also argued that leave for the derivative action was required under Nigerian legislation and that the cause of action had been sold, precluding entitlement to relief. The primary judge had ordered the joinder of two companies as applicants to the derivative action, a decision also challenged by the appellants.

The legal issues before the court included whether the argument that the derivative action was not properly constituted departed from the appeal grounds and amounted to a collateral attack on an earlier judgment. Other issues involved whether the primary judge correctly regarded a stay as precluded by an issue not common to both proceedings, and whether the primary judge erred in ordering the joinder of the two companies. The court also had to determine if an unregistered shareholder was precluded from bringing or joining a derivative action, and whether one of the companies was precluded from joining the action because it had notice of the action when it acquired shares.

The court held that the argument that the derivative action was not properly constituted amounted to a collateral attack on an earlier judgment, and that the primary judge did not err in refusing to grant a temporary stay. The court found that the primary judge correctly regarded the stay as precluded by an issue not common to both proceedings. The court also found that questions about leave for the derivative action and the entitlement to relief were already resolved by an earlier judgment. Regarding the joinder of the two companies, the court found that the primary judge did not err in ordering the joinder, as their presence was relevant to the resolution of an issue in the action.

The appeal was dismissed with costs.

Orders

Orders of the court

The appeal is dismissed with costs.

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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