Nordic International Ltd v Morten Innhaug: Security for Costs in Derivative Action
In Nordic International Ltd v Morten Innhaug, the High Court of Singapore heard an application by the Defendant, Morten Innhaug, for security for costs from the Plaintiff, Nordic International Ltd, and Sinwa SS (HK) Co Ltd, a non-party, in a derivative action. The court, presided over by Assistant Registrar Tan Teck Ping Karen, dismissed the application, finding that Sinwa HK was not a litigation funder and that the Plaintiff was not a nominal plaintiff. The judgment was delivered on 2014-10-13.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application for security for costs dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Application for security for costs in a derivative action. The court dismissed the application, finding the plaintiff was not a nominal plaintiff.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Morten Innhaug | Defendant | Individual | Application for security for costs dismissed with costs | Lost | |
| Sinwa SS (HK) Co Ltd | Other | Corporation | Application for security for costs dismissed with costs | Won | |
| Nordic International Ltd | Plaintiff | Corporation | Application for security for costs dismissed with costs | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Teck Ping Karen | Assistant Registrar | Yes |
4. Counsels
4. Facts
- Sinwa HK obtained leave from the Court of Appeal to bring an action in the name of the Plaintiff against the Defendant.
- The Defendant applied for security for costs from the Plaintiff and Sinwa HK.
- The Plaintiff is a company whose shares are equally owned by the Defendant and Sinwa HK.
- The Defendant is also a director of the Plaintiff.
- Sinwa HK commenced the suit as a derivative action in the name of the Plaintiff against the Defendant.
- The Plaintiff is a solvent company with funds in a bank account in Singapore and owns a vessel.
5. Formal Citations
- Nordic International Ltd v Morten Innhaug, Suit No 875 of 2010 Summons No 3227 of 2014, [2014] SGHCR 20
6. Timeline
| Date | Event |
|---|---|
| Lawsuit filed | |
| Judgment reserved | |
| Decision Date |
7. Legal Issues
- Security for Costs
- Outcome: The court dismissed the application for security for costs.
- Category: Procedural
- Related Cases:
- [2008] NSWCA 148
- [2006] HCA 41
- [2004] 1 WLR 2807
- [2010] 3 SLR 542
- [2011] 1 SLR 582
- [2012] 4 SLR 1153
- Derivative Action
- Outcome: The court determined that the action was a derivative action and the plaintiff was not a nominal plaintiff.
- Category: Substantive
- Related Cases:
- [1975] 2 WLR 389
8. Remedies Sought
- Security for costs
9. Cause of Actions
- Breach of directors’ duties
10. Practice Areas
- Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd | New South Wales Court of Appeal | Yes | [2008] NSWCA 148 | Australia | Cited regarding the court's readiness to order security for costs where a non-party stands to benefit from the proceedings for commercial profit. |
| Campbells Cash and Carry Pty Limited v Fostif Pty Limited | High Court of Australia | Yes | [2006] HCA 41 | Australia | Cited to support the principle that litigation funding is not against public policy. |
| Dymocks Franchise Systems (NSW) Pty Ltd v Todd | Privy Council | Yes | [2004] 1 WLR 2807 | United Kingdom | Cited for the principles governing the court's exercise of discretion in respect of costs to be paid by a non-party. |
| DB Trustees (Hong Kong) Ltd v Consult Asia Pte Ltd | Singapore Court of Appeal | Yes | [2010] 3 SLR 542 | Singapore | Cited for adopting the principles in Dymocks regarding costs to be paid by a non-party. |
| Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties) | N/A | Yes | [2011] 1 SLR 582 | Singapore | Cited regarding the consideration of non-parties being shareholders of a company in determining costs. |
| Nanyang Law LLC v Alphomega Research Group Ltd | N/A | Yes | [2012] 4 SLR 1153 | Singapore | Cited regarding the doctrine of separate legal personality of a company in relation to costs. |
| Wallersteiner v Moir (No. 2) | English Court of Appeal | Yes | [1975] 2 WLR 389 | United Kingdom | Cited for the definition and nature of a derivative action. |
13. Applicable Rules
| Rule Name |
|---|
| Order 23 rule 1(3)(b) |
| Order 23 Rule 1(1)(b) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Security for costs
- Derivative action
- Nominal plaintiff
- Litigation funder
- Separate legal personality
15.2 Keywords
- security for costs
- derivative action
- company law
- Singapore
- High Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Security for Costs | 95 |
| Civil Procedure | 90 |
| Derivative action | 85 |
| Costs | 80 |
| Nominal Plaintiff | 75 |
| Company Law | 70 |
| Corporate Law | 70 |
| Fiduciary Duties | 60 |
16. Subjects
- Civil Procedure
- Company Law
- Security for Costs
- Derivative Action