Costs in Statutory Derivative Actions: The Lingering Ghost of Wallersteiner

Albert Monichino, 'Costs in statutory derivative actions: The lingering ghost of Wallersteiner' (2015) 33 Company and Securities Law Journal 104

25 Pages Posted: 29 Apr 2016

Date Written: January 27, 2015

Abstract

Part 2F.1A of the Corporations Act 2001 (Cth) provides for a statutory derivative action in Australia. Section 242 gives power to the court to make costs orders for derivative proceedings commenced with leave of the court under s 237. The manner in which courts deal with issues of costs impacts significantly upon the utility of the statutory derivative action. This article considers the factors that inform the exercise of the court’s discretion as to costs under s 242 at, first, the leave stage and, secondly, at the conclusion of derivative proceedings, drawing on case law in Australia, the United Kingdom, New Zealand and Canada. The English Court of Appeal decision in Wallersteiner v Moir (No 2) [1975] QB 373 is often cited for the proposition that a minority shareholder who brings a derivative action on behalf of the company has the right to be indemnified in respect of costs reasonably incurred, whether the derivative action succeeds or fails. This article will consider whether Wallersteiner reflects the law in Australia under the statutory derivative action provisions.

Keywords: Corporations Act 2001, Wallersteiner, Moir, derivative action, Australia, United Kingdom, New Zealand, Canada, Corporate Law

Suggested Citation

Monichino, Albert, Costs in Statutory Derivative Actions: The Lingering Ghost of Wallersteiner (January 27, 2015). Albert Monichino, 'Costs in statutory derivative actions: The lingering ghost of Wallersteiner' (2015) 33 Company and Securities Law Journal 104. Available at SSRN: https://ssrn.com/abstract=2770931

Albert Monichino (Contact Author)

Victorian Bar ( email )

C/- List A Barristers
205 William Street
Melbourne, Victoria 3000
Australia
+61 9225 8247 (Phone)

HOME PAGE: http://https://www.vicbar.com.au/profile?2133

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