Domson P/L & 6 Ors v Zhu & 1 Or [2005] NSWSC 1070

Domson P/L & 6 Ors v Zhu & 1 Or [2005] NSWSC 1070

The Termination Deed was a valid and enforceable sale of the company's property (being a share of the judgment proceeds) by the deed administrator under statutory power, thus falling within the recognised exception to the rules against champerty and maintenance regardless of the funder's control. LLS also had a legitimate interest derived from the Funding Agreement. Mr Zhu and Walker Hedges & Co are bound by the payment direction for $50,000, $100,000 and 20% of amounts above $1,000,000 paid to Mr Zhu.

Jurisdiction
Australia
Judgment Date
27 October 2005
Procedural Posture
Equity Contract/choses in Action / Judgment After Hearing
Outcome
Plaintiffs to bring in short minutes of order. Plaintiffs succeed.
Legal Topics
['maintenance and Champerty' 'litigation Funding' 'assignment of Proceeds' 'statutory Exceptions to Champerty']
['contract Law' 'insolvency Law' 'equity'] ['maintenance and Champerty' 'litigation Funding' 'assignment of Proceeds' 'statutory Exceptions to Champerty']

Case Brief

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Procedural Posture

Equity Contract/choses in Action / Judgment After Hearing

Legal Issues

  1. 1 ['Whether the Termination Deed is void for champerty' 'Whether the Funding Agreement or Termination Deed conferred enforceable assignment of future proceeds' 'Whether the disposition falls within the statutory exception for deeds entered by an administrator under the Corporations Act' "Construction of the Termination Deed and parties' payment obligations"]

Ratio Decidendi

The Termination Deed was a valid and enforceable sale of the company's property (being a share of the judgment proceeds) by the deed administrator under statutory power, thus falling within the recognised exception to the rules against champerty and maintenance regardless of the funder's control. LLS also had a legitimate interest derived from the Funding Agreement. Mr Zhu and Walker Hedges & Co are bound by the payment direction for $50,000, $100,000 and 20% of amounts above $1,000,000 paid to Mr Zhu.

Court Disposition

Plaintiffs to bring in short minutes of order. Plaintiffs succeed.

Orders

  • ['Walker Hedges & Co required to pay to LLS: $50,000 from funds received; $100,000 from first $1,000,000 recovered; 20% of the further moneys in excess of $1,000,000 payable to Mr Zhu under the judgment; amounts payable with interest at prescribed rates on $50,000 from 28 August 2003, $100,000 from 25 November 2004,...