Late last year Deloitte special principal David Lombe won yet another legal action involving Bookarelli, the obscure litigation funder that for years has induced punters to assign their rights as shareholders of Babcock & Brown Limited (B&B) so it can run cases based on allegations including that B&B failed to disclose material information to the Australian Securities Exchange (ASX) at the time the assignors purchased their shares.
“For the reasons that follow, I have concluded that in all the circumstances it was unreasonable for the Pain applicants not to have brought forward their claims in other proceedings funded and brought by Bookarelli against the respondent and the proceeding should be permanently stayed as an abuse of process.” Justice John Halley.
Over more than a decade Lombe has won every case, every appeal and every costs order.
And whilst it has satisfied some of those costs orders Bookarelli – which is controlled by 85 year old Paul Riik of Bellevue Hill – has failed on every attempt to take its rejected appeals to the High Court.
But Lombe hasn’t recovered anywhere near all of his costs and the dividend he’s long had prepared for distribution to B&B note holders has remained stalled.
After the most recent assault was repelled Lombe and his legal advisors – James Lockhart SC and Joe Scarcella of Johnson Winter Slattery – decided that Bookarelli was essentially running the same case over and over with different plaintiffs and that it would be worth asking a court if it thought that that constituted an abuse of process.
Opposing them on behalf of Bookarelli were barristers Miles Condon SC and Geoff Macdonald instructed by Marcel Joukhador of Harrow Legal.
On November 21 last year Federal Court judge John Halley agreed with Lombe and his advisors, ordering that the plaintiff proceeding – known as the Pain proceeding after lead plaintiff Malcolm Douglas Pain – be permanently stayed. (See: Pain v Lombe (liquidator), in the matter of Babcock & Brown Ltd (in liq) [2024] FCA 1338)
Having obtained a level of potential relief from future litigation Lombe moved quickly to choke off Bookarelli’s supply of plaintiffs by issuing a circular to B&B creditors bearing a certain ominous tone.
“On 21 November 2024, the Federal Court of Australia made orders to permanently stay the Pain
Proceedings as an abuse of process,” Lombe said.
“As it currently stands, Bookarelli has lost each of the shareholder proceeding that it has funded.
“Costs have been ordered against all the shareholders in each of the proceedings. To the extent that Bookarelli has not, or does not satisfy those costs, I intend to pursue the costs against the individual shareholder applicants.
“As such, in my view, there is a risk to shareholders that if Bookarelli cannot afford or does not pay extant costs orders the shareholder applicants could be required to pay those costs.
“That risk arises in respect of the Masters, Broome, Wilhelm and Pain proceedings as well as any fresh proceedings which Bookarelli seek to fund and bring,” Lombe said.
You have been warned.
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