Boston Trust Company Ltd & Anor (Trustees of Erutuf Trust) v Szerelmey Ltd & Ors

Boston Trust Company Ltd & Anor (Trustees of Erutuf Trust) v Szerelmey Ltd & Ors

Where minority shareholders have been given permission to bring a derivative action on behalf of companies, and the claims are properly and reasonably brought for the benefit of the companies, the court should in principle grant a pre-emptive indemnity for costs, regardless of the claimants' means. The facts do not resemble a partnership dispute, and the claims have sufficient merit. The indemnity should be limited to a particular stage (exchange of witness statements), with review at the pre-trial review stage. The application for an order for costs incurred to date is adjourned pending the outcome of an appeal.

Parties
Claimant: Boston Trust Company Limited; Claimant: Boston Fiduciary Management Limited; Defendant: Szerelmey Limited; Defendant: Szerelmey (GB) Limited; Defendant: Szerelmey Restoration Limited; Defendant: Tellisford Limited; Defendant: Gordon Verhoef; Defendant: Szerelmey (UK) Limited; Defendant: London Stone Limited; Defendant: Heritage House (York) Limited; Defendant: Tusk Holdings Limited; Defendant: Hare and Ransome Joinery Ltd
Jurisdiction
England and Wales
Judgment Date
13 November 2020
Procedural Posture
Derivative Action (multiple Derivative Claim, Common Law) / Application for Pre Emptive Indemnity for Costs and Costs of Earlier Proceedings
Outcome
Application for pre-emptive indemnity granted; application for order for costs incurred to date adjourned.
Legal Topics
Derivative Actions, Minority Shareholder Rights, Costs Indemnity, Standing of Claimants, Rectification of Register, Pre Emptive Costs Orders
Company Law Equity Derivative Actions Minority Shareholder Rights Costs Indemnity Standing of Claimants Rectification of Register Pre Emptive Costs Orders

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 19 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Boston Trust Company Limited

Claimant

Boston Fiduciary Management Limited

Claimant

Szerelmey Limited

Defendant

Szerelmey (GB) Limited

Defendant

Szerelmey Restoration Limited

Defendant

Tellisford Limited

Defendant

Gordon Verhoef

Defendant

Szerelmey (UK) Limited

Defendant

London Stone Limited

Defendant

Heritage House (York) Limited

Defendant

Tusk Holdings Limited

Defendant

Hare and Ransome Joinery Ltd

Defendant

Procedural Posture

Derivative Action (multiple Derivative Claim, Common Law) / Application for Pre Emptive Indemnity for Costs and Costs of Earlier Proceedings

Legal Issues

  1. 1 Whether the claimants are entitled to a pre-emptive indemnity for costs from the companies in respect of the derivative action
  2. 2 Whether the claimants are entitled to an indemnity for adverse costs orders
  3. 3 Whether the costs incurred to date should be paid by the companies

Ratio Decidendi

Where minority shareholders have been given permission to bring a derivative action on behalf of companies, and the claims are properly and reasonably brought for the benefit of the companies, the court should in principle grant a pre-emptive indemnity for costs, regardless of the claimants' means. The facts do not resemble a partnership dispute, and the claims have sufficient merit. The indemnity should be limited to a particular stage (exchange of witness statements), with review at the pre-trial review stage. The application for an order for costs incurred to date is adjourned pending the outcome of an appeal.

Court Disposition

Application for pre-emptive indemnity granted; application for order for costs incurred to date adjourned.

Orders

  • Claimants granted a pre-emptive indemnity for their costs (including adverse costs) down to exchange of witness statements, with review at pre-trial review stage.
  • Indemnity includes costs already incurred by the claimants, subject to terms to be agreed.