The Australian Derivatives Exchange Ltd v Doubell [2008] NSWSC 1174

The Australian Derivatives Exchange Ltd v Doubell [2008] NSWSC 1174

Because clause 6 of the litigation funding agreement indemnified the liquidator against costs orders in the proceedings and required the funder, at the liquidator's request, to provide a bank guarantee supporting the indemnity, the defendants' concern about recovery of costs could be adequately addressed at this stage by appropriate undertakings from the liquidator, including undertakings about notice of termination or threatened termination and pursuit or assignment of the indemnity for the defendants' benefit. Security for costs should therefore not be ordered at this point, without prejudice to any future application, and the application was adjourned so suitable undertakings could be...

Jurisdiction
Australia
Judgment Date
06 November 2008
Procedural Posture
Proceedings by a Liquidator Under S 588 M(2) of the Corporations Act 2001 (cth) With Defendants' Applications for Security for Costs / Interlocutory Application for Security for Costs
Outcome
Application adjourned
Legal Topics
['security for Costs' "liquidator's Personal Liability for Costs" 'litigation Funding Agreement' 'insolvent Trading Claims' 'undertakings to the Court']
['civil Procedure' 'corporations Law' 'insolvency Law'] ['security for Costs' "liquidator's Personal Liability for Costs" 'litigation Funding Agreement' 'insolvent Trading Claims' 'undertakings to the Court']

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Procedural Posture

Proceedings by a Liquidator Under S 588 M(2) of the Corporations Act 2001 (cth) With Defendants' Applications for Security for Costs / Interlocutory Application for Security for Costs

Legal Issues

  1. 1 ['Whether security for costs should be ordered against a liquidator suing under s 588M(2) where the liquidation estate has no funds and the liquidator cannot meet an adverse costs order.' 'Whether the existence and terms of a litigation funding agreement, including an indemnity for adverse costs and a right of termination by the funder, justify ordering security for costs.' 'Whether undertakings by the liquidator can sufficiently protect the defendants instead of an immediate order for security for costs.']

Ratio Decidendi

Because clause 6 of the litigation funding agreement indemnified the liquidator against costs orders in the proceedings and required the funder, at the liquidator's request, to provide a bank guarantee supporting the indemnity, the defendants' concern about recovery of costs could be adequately addressed at this stage by appropriate undertakings from the liquidator, including undertakings about notice of termination or threatened termination and pursuit or assignment of the indemnity for the defendants' benefit. Security for costs should therefore not be ordered at this point, without prejudice to any future application, and the application was adjourned so suitable undertakings could be...

Court Disposition

Application adjourned

Orders

  • ['The application is adjourned so that the liquidator may formally proffer suitable undertakings to the court.']