On 18 August 2022 Justice Markovic of the Federal Court dismissed the application of a litigation funder and its director (the Applicants) for access to the confidential affidavit in support of, and transcript of, the hearing in which orders for examinations and production were made. The Court confirmed the principles applying to such applications in finding that the Applicants had not established an arguable case, in the absence of the confidential material, that the orders for examinations and production should be set aside or discharged.
The Court will not allow an applicant to “fish” for a case in seeking to have orders for examination and production set aside. An arguable case must first be made on the currently available evidence (that is, not reliant on confidential material filed by a liquidator in support of an examination order), before any consideration is given to whether the confidential material should be disclosed.
The ruling confirms that a party seeking to set aside orders for examination and production needs to establish the merits of its case (on the available evidence) before the Court will consider allowing it access to the confidential material.
In this matter, the Court upheld that a liquidator is able to examine a litigation funder who is financing claims against the liquidator and the insolvent company.
Summonses for examination and production orders were issued against the Applicants (the Orders). The liquidator’s affidavit in support of his application is confidential unless the Court orders otherwise and the parties agreed that the transcript of the hearing is also confidential (the Confidential Material).
The Applicants sought to have the Orders set aside or discharged. As part of that application, the Applicants also sought access to the Confidential Material.
The test for access is that “the Applicants need to show an arguable case for their discharge or setting aside and, if they do, that it is in the interests of justice to permit access to the affidavit”.
The Applicants raised several grounds on which they contended the Orders should be set aside or discharged, including as follows:
The Applicants asserted that there was a technical inconsistency within the defined scope of the examinations and the production orders. The Court stated that such an inconsistency (even if it existed) could be resolved in the conduct of the examination.
The Applicants alleged that the examinations and productions orders were an abuse of process. These sub-grounds fell into three broad categories, being:
The Court stated that:
Ultimately, the Court concluded that on the basis of the evidence before it, the Applicants did not have any realistic prospects of success. As such, the Court was not required to consider the next step, being whether allowing access to the Confidential Material would be in the interests of justice.
 Lombe, in the matter of Babcock and Brown Ltd (in liq)  FCA 957 at .
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