When a litigation funder has to call in a liquidator you know the plan, whatever it might have been, was found wanting.
You also know that if the decision to wind up the company voluntary came shortly after a court made orders averse to the litigation funder’s interests then the liquidator will probably find him or herself adjudicating more than just proofs of debt.
Litigants who’ve been at each other tooth and claw are generally not pacified by the appointment of liquidators.
This however is the scenario facing Shahin Hussain of H&H Advisory after he was on Monday appointed liquidator of LFS Litigation Funding Pty Ltd (LFSLF), one of a number of entities controlled by Gold Coast lawyer and litigation funding dabbler David Purcell.
LFSLF’s liquidation comes after the Supreme Court of Queensland on July 28 ordered LFSLF to punt up $100,000 in security for the costs of Jin Resources (Aust) Pty Ltd (Jin) and Omega Gold Limited (Omega), the defendants in proceedings Purcell commenced in January this year seeking $1.3 million Purcell claimed the pair owed to LFSLF “pursuant to an agreement”.
That agreement – involving the provision of litigation funding – was entered into back in late 2021.
12 months later Purcell sought to enforce his claimed security over Jin’s property by appointing Hall Chadwick partners Marcus Watters, Richard Albarran and Brent Kijurina as administrators just as Jin was in the process of seeking to raise capital to fund the purchase of the Gilded Rose mine in outback Queensland.
In November 2022 Jin succeeded in having the administrators’ appointment declared invalid and the Hall Chadwick trio removed and for good measure Supreme Court of Queensland judge Tom Bradley also ordered that LFS and the Hall Chadwick trio pay Jin’s costs of the proceedings as well as reserved costs.
But Purcell wasn’t giving up and commenced the January 2023 proceedings, arguing he was entitled to the amounts claimed and that the defendants had wrongfully repudiated their agreement.
That argument however was apparently insufficient to sustain the proceedings once the court ordered that the plaintiff put up security for costs in the order of $100,000 followed two weeks later by a costs order for more than $24,000.
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