Costs – striking-out application – admiralty actions – whether actions sustainable – whether striking-out applications properly brought such that defendant should be awarded costs of such applications
P and CK were 50/50 shareholders in a holding company (“C”) of a chain of companies including, respectively, the registered owners (Hope Ltd and Glory Ltd) of two vessels (BBG Hope and BBG Glory), as well as three other companies (the “Three Companies”). P brought proceedings involving the vessels, comprising two personal actions seeking a declaration that he had ownership of the vessels based on payment of part of the purchase price; and two derivative actions on his and the shareholders of the Three Companies’ behalf. Hope Ltd, Glory Ltd and the mortgagee (“Lohas”) of the vessels (“Ds”) applied to strike out the actions. The vessels had since been sold. As these proceedings were now academic, Ds sought costs of their striking-out applications.
Held, granting the application, that:
- The two personal actions brought by P were unsustainable. P might have provided a shareholder’s loan to facilitate the vessels’ purchase, but a shareholder of C, the holding company, could not have a share in the ownership of the vessels. Further, the vessels were registered in the names of Hope Ltd and Glory Ltd and the registration of a vessel was normally conclusive as to its ownership.
- Thus, Ds had properly issued the strike-out applications in those personal actions and they were awarded costs of and occasioned by the applications.
- The derivative actions were deficient in failing to join the alleged wrongdoers, (ie, CK and Lohas), and P was purportedly claiming against Hope Ltd and Glory Ltd yet suing on their behalf for losses suffered. However, it appeared that there was substance in P’s grievances and the deficiencies could be cured with appropriate amendments.
- Notwithstanding, given the shortcomings in those actions, it was reasonable for Ds to have issued the strike-out applications and they should have their costs of and occasioned by the applications.