Fletcher and Barnet, in the matter of Octaviar Limited (Receivers and Managers Appointed) (In Liq) and Octaviar Administration Pty Ltd (In Liq) (No 2) [2011] FCA 315

Fletcher and Barnet, in the matter of Octaviar Limited (Receivers and Managers Appointed) (In Liq) and Octaviar Administration Pty Ltd (In Liq) (No 2) [2011] FCA 315

The Court approved the Investigation Funding Agreement nunc pro tunc and granted associated directions, extension and validity relief because the agreement funded investigations preliminary to litigation for which funding had already been approved, the liquidators considered the examinations desirable and beneficial to creditors, the identified risks and benefits were commercially acceptable, the terms were appropriate and partly protected OA, there was no suggestion of bad faith, and refusing approval would handicap the liquidators in conducting the already funded litigation. Confidentiality was ordered because disclosure of the agreement would prejudice the administration of justice.

Jurisdiction
Australia
Judgment Date
07 April 2011
Procedural Posture
Application by Joint Liquidators for Approval Under S 477(2 B) of the Corporations Act 2001 (cth) to Enter Into an Investigation Funding Agreement, Directions Under S 479(3), Relief Under S 1322(4)(a) and (d), and a Confidentiality Order Under S 50 of the Federal Court of Australia Act 1976 (cth) / Application Heard After Adjournment for Service; Orders Made on 7 April 2011 With Reasons Delivered
Outcome
Application granted; adjournment refused; approval, directions, declaration, extension of time, confidentiality and costs orders made.
Legal Topics
["liquidators' Powers" 'court Approval of Funding Agreement' 'investigation Funding Agreement' 'nunc Pro Tunc Approval' 'committee of Inspection Approval' 'confidentiality Orders' 'administration of Justice']
['corporations' 'insolvency' 'civil Procedure'] ["liquidators' Powers" 'court Approval of Funding Agreement' 'investigation Funding Agreement' 'nunc Pro Tunc Approval' 'committee of Inspection Approval' 'confidentiality Orders' 'administration of Justice']

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Procedural Posture

Application by Joint Liquidators for Approval Under S 477(2 B) of the Corporations Act 2001 (cth) to Enter Into an Investigation Funding Agreement, Directions Under S 479(3), Relief Under S 1322(4)(a) and (d), and a Confidentiality Order Under S 50 of the Federal Court of Australia Act 1976 (cth) / Application Heard After Adjournment for Service; Orders Made on 7 April 2011 With Reasons Delivered

Legal Issues

  1. 1 ["Whether the Court should extend time and approve nunc pro tunc the liquidators' entry into the Investigation Funding Agreement under s 477(2B) of the Corporations Act 2001 (Cth)." 'Whether directions should be given under s 479(3) of the Corporations Act 2001 (Cth) permitting the liquidators to act on the Investigation Funding Agreement as though prior approval had been obtained.' "Whether the liquidators' entry into the Investigation Funding Agreement should be declared not invalid under s 1322(4)(a) of the Corporations Act 2001 (Cth) despite the absence of prior Court approval." 'Whether tab 38 of Exhibit KEB-1 containing the Investigation Funding Agreement should be kept confidential under s 50(1) of the Federal Court of Australia Act 1976 (Cth).' "Whether the hearing should be adjourned pending Fortress's application for leave to appeal from the earlier judgment approving the Litigation Funding Agreement."]

Ratio Decidendi

The Court approved the Investigation Funding Agreement nunc pro tunc and granted associated directions, extension and validity relief because the agreement funded investigations preliminary to litigation for which funding had already been approved, the liquidators considered the examinations desirable and beneficial to creditors, the identified risks and benefits were commercially acceptable, the terms were appropriate and partly protected OA, there was no suggestion of bad faith, and refusing approval would handicap the liquidators in conducting the already funded litigation. Confidentiality was ordered because disclosure of the agreement would prejudice the administration of justice.

Court Disposition

Application granted; adjournment refused; approval, directions, declaration, extension of time, confidentiality and costs orders made.

Orders

  • ["Pursuant to s 1322(4)(d) of the Corporations Act 2001 (Cth), the period for the making by the plaintiffs of an application for the Court's approval under s 477(2B) in respect of the Investigation Funding Agreement was extended to the date of the orders." "Pursuant to s 477(2B) of the Corporations Act 2001 (Cth),...