• Background: Xiaoling Ren, an EPL shareholder, alleged that EPL's directors and former CEO were negligent and breached fiduciary duties in certain transactions. Ren sought to commence a derivative action against them.
• Initial Ruling: The Supreme Court of British Columbia granted Ren leave to proceed with the derivative action against EPL’s former CEO, Ms. Hu.
• Appeal: EPL appealed, arguing the judge failed to assess if the action's benefits justified its costs and should have deferred to EPL’s special committee, which decided not to pursue litigation.
• Appeal Outcome: The appeal was dismissed. The court held that the judge’s decision was discretionary and noted no palpable and overriding error. The court found no basis to interfere with the special committee's non-deference as it was inadequately informed and did not address key allegations. No financial terms were specified.

Key legal points and outcomes from the appeal:

• Discretionary Decision: The appeal court emphasized that the decision to allow the derivative action was discretionary and subject to deference unless a clear error was shown.
• Cost-Benefit Analysis: The court found no error in the lower court’s assessment of the cost and benefits of the proposed action, affirming that the potential financial impact on EPL warranted the derivative action.
• Special Committee Deference: The appeal court agreed with the lower court's decision not to defer to EPL's special committee’s recommendation against litigation, citing insufficient evidence and lack of rigorous analysis of the transaction in question.