International Litigation Partners Pte Ltd v Chameleon Mining NL [2011] NSWCA 50

International Litigation Partners Pte Ltd v Chameleon Mining NL [2011] NSWCA 50

The litigation funding agreement constituted a financial product under the Corporations Act 2001 (Cth), as it was a facility for managing financial risk and, subject to statutory exclusions, could be rescinded by the recipient due to the funder not holding the required financial services licence; after rescission or a relevant change of control, the funder was entitled only to the Early Termination Fee and not the Funding Fee.

Parties
Appellant: International Litigation Partners Pte Ltd; First Respondent: Chameleon Mining NL; Second Respondent: Cape Lambert Resources Limited
Jurisdiction
Australia
Judgment Date
15 March 2011
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed with costs; cross appeal allowed with costs.
Legal Topics
Commercial Contracts—construction, Litigation Funding Agreements, Financial Products—definition, Derivatives—corporations Act, Credit Facilities Exemption, Rescission of Agreements, Licensing of Financial Service Providers
Contracts Corporations Law Commercial Contracts—construction Litigation Funding Agreements Financial Products—definition Derivatives—corporations Act Credit Facilities Exemption Rescission of Agreements +1 more

Case Brief

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Parties

International Litigation Partners Pte Ltd

Appellant

Chameleon Mining NL

First Respondent

Cape Lambert Resources Limited

Second Respondent

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether a litigation funding agreement is a 'financial product' under the Corporations Act 2001 (Cth)
  2. 2 Whether the funding agreement is a 'derivative'
  3. 3 Whether the funding agreement is excluded as a credit facility

Ratio Decidendi

The litigation funding agreement constituted a financial product under the Corporations Act 2001 (Cth), as it was a facility for managing financial risk and, subject to statutory exclusions, could be rescinded by the recipient due to the funder not holding the required financial services licence; after rescission or a relevant change of control, the funder was entitled only to the Early Termination Fee and not the Funding Fee.

Court Disposition

Appeal dismissed with costs; cross appeal allowed with costs.

Orders

  • The appeal is dismissed with costs.
  • The cross-appeal is allowed with costs.