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

New South Wales Supreme Court

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

HEARING DATE(S) : 29-30/03/05

JUDGMENT DATE : 27 October 2005

JURISDICTION : Equity Division

JUDGMENT OF : White J

DECISION : Plaintiffs to bring in short minutes of order.

CATCHWORDS : CONTRACTS - Illegality - Champerty - Suit by litigation funder seeking to enforce agreement which defendant alleges is champertous - Contract to fund litigation in return for percentage of litigation proceeds - Litigation conducted in name of individual plaintiff who held chose in action on trust for company - Funding agreement entered into by administrator of company which was beneficially entitled to the cause of action - Agreement terminated and new agreement made with legal owner of chose in action - Administrator consented to direction for payment of share of proceeds of judgment to litigation funder - Whether new agreement within statutory exception to champerty - Whether litigation funder had legitimate interest in new agreement by reason of preceding enforceable agreement with administrator - Construction of new agreement - Held new agreement enforceable.

Suitors' Fund Act 1951 LEGISLATION CITED : Corporations Act 2001 (Cth) Maintenance and Champerty Abolition Act 1993 (NSW)

SOCOG v Zhu [2002] NSWCA 380 Zhu v The Treasurer of the State of New South Wales [2004] 8 CA 56; (2004) 211 ALR 159, 79 ALJR 217 Trendtex Trading Corporation v Credit Suisse [1982] AC 679 Rodick v Gandell (1852) 1 DM&G 763; 42 ER 749 Perpetual Trustee Co Ltd v Smith (1938) 39 SR (NSW) 19 Swiss Bank Corporation v Lloyds Bank Ltd [1982] AC 584 Moseley v Cressey's Co (1865) LR 1 Eq 405 Jackson v Richards [2005] NSWSC 630 Pallette Shoes Pty Ltd v Krohn (1937) 58 CLR 1 Cotterill v Bank of Singapore (Aust) Ltd (1995) 37 NSWLR 238 CASES CITED : Re Movitor Pty Ltd (1996) 64 FCR 380 Re Tosich Construction Pty Ltd (ex parte Wily) (1997) 73 FCR 219 Re William Felton & Co Pty Ltd (1998) 28 ACSR 228 Seear v Lawson (1880) 15 Ch D 426 Guy v Churchill (1888) 40 Ch D 481 Giles v Thompson [1993] 3 All ER 321 Clairs Keeley v Treacy & Ors (No. 2) [2004] WASCA 277 Buiscex v Panfida Foods Ltd (in Liq) (1998) 28 ACSR 357 Elfic Ltd v Macks [2001] QCA 219 Fostif Pty Ltd v Campbell's Cash & Carry Pty Ltd (2005) 218 ALR 166 Project 28 Pty Ltd v Barr [2005] NSWCA 240