Zabusky v Virgtel Ltd

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.