Jones, Saker, Weaver and Stewart (Liquidators), in the matter of Great Southern Limited (in liq) (Receivers and Managers Appointed) [2012] FCA 807

Jones, Saker, Weaver and Stewart (Liquidators), in the matter of Great Southern Limited (in liq) (Receivers and Managers Appointed) [2012] FCA 807

The Court dismissed the application because the evidence did not sufficiently address significant factors relevant to approval of the funding agreement. In particular, despite the liquidators having been in office for three years, having had prior litigation funding and having conducted investigations, there was no evidence demonstrating prospects of success or detailing further necessary investigations for the potential claims, and no evidence permitting assessment of the potential value of the claims. Given the substantial projected costs, the recovery of prior costs and the funder's premium, the potential value of the claims was crucial to whether the agreement would enhance prospects...

Jurisdiction
Australia
Judgment Date
27 July 2012
Procedural Posture
Application by Liquidators for Approval Under S 477(2 B) of the Corporations Act 2001 (cth) to Enter Into a Litigation Funding Agreement and for a Direction That They Would Be Justified in Entering Into It / Ex Parte Urgent Application
Outcome
Application dismissed.
Legal Topics
["liquidators' Powers" 'litigation Funding Agreement' 'court Approval Under S 477(2 B)' 'prospects of Success' "creditors' Interests" "funder's Premium"]
['corporations' 'insolvency'] ["liquidators' Powers" 'litigation Funding Agreement' 'court Approval Under S 477(2 B)' 'prospects of Success' "creditors' Interests" "funder's Premium"]

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Procedural Posture

Application by Liquidators for Approval Under S 477(2 B) of the Corporations Act 2001 (cth) to Enter Into a Litigation Funding Agreement and for a Direction That They Would Be Justified in Entering Into It / Ex Parte Urgent Application

Legal Issues

  1. 1 ['Whether the Court should approve the liquidators entering into a litigation funding agreement with Riverrock Capital Limited under s 477(2B) of the Corporations Act 2001 (Cth).' 'Whether the liquidators would be justified in entering into the funding agreement.' "Whether the evidence sufficiently addressed the liquidators' prospects of success, the interests of creditors and the level of the funder's premium."]

Ratio Decidendi

The Court dismissed the application because the evidence did not sufficiently address significant factors relevant to approval of the funding agreement. In particular, despite the liquidators having been in office for three years, having had prior litigation funding and having conducted investigations, there was no evidence demonstrating prospects of success or detailing further necessary investigations for the potential claims, and no evidence permitting assessment of the potential value of the claims. Given the substantial projected costs, the recovery of prior costs and the funder's premium, the potential value of the claims was crucial to whether the agreement would enhance prospects...

Court Disposition

Application dismissed.

Orders

  • ['Mr Saker\'s affidavit sworn on 25 July 2012 in these proceedings (and attachments thereto) and the confidential legal advice, marked exhibit 1, are to be placed in a sealed envelope marked "Confidential – not to be accessed for inspection without order of a Judge of the Court" and are not available for inspection...