Any liquidator needing to know how to maintain and extend the life of a writ whilst he or she spends precious months fruitlessly searching for a sympathetic litigation funder could do worse than taking a peep at Jabiru Satellite Ltd v Societe Generale  VSC 544 (2 September 2021).
Whilst the search for a litigation funder in this case was unsuccessful, the decisions taken to maintain the validity of the writ against multiple of Jabiru and NewSat Limited’s secured creditors during and since that search, along with information divulged via proceedings taken against several of the directors, led to a member of NewSat and Jabiru agreeing to apply for leave to commence a derivative action.
“The reason no steps were taken to serve the writ in the preceding 11 months is because first, Mr Parbery and then Mr Livingstone did not have funding, and were unable to secure funding from a litigation funder. The period in which they sought litigation funding commenced before the writ was issued. Litigation funding was sought from September 2019 until at least February 2021.”
The judgment, delivered in the Supreme Court of Victoria yesterday, details how former PPB Advisory founding partner Steve Parbery and then former colleague and KPMG partner Glenn Livingstone preserved the writ and then sought to serve it on the defendants in time once NewSat member Rockgold Holdings announced two week’s before the writ’s expiry date that it intended to proceed.
“The reason no steps were taken to serve the writ in the preceding 11 months is because first, Mr Parbery and then Mr Livingstone did not have funding, and were unable to secure funding from a litigation funder. The period in which they sought litigation funding commenced before the writ was issued. Litigation funding was sought from September 2019 until at least February 2021,” Justice Jim Delaney said.
“Without funding, the liquidator could not have responsibly served the writ, knowing that the recipients would incur costs in entering appearances if he did, yet he had no intention, because he had no funding, of taking any steps in the action.
“Had he instructed solicitors to serve the writ at any time before 26 May 2021, he could legitimately have been criticised for breach of the overarching obligations in ss 19 and 24 of the CPA.
“Section 19 provides a person must not take a step in the proceeding unless the person reasonably believes the step is necessary to facilitate the resolution or determination of the proceeding.
“Section 24 imposes an obligation to use reasonable endeavours to ensure legal and other costs incurred in connection with civil proceedings are reasonable and proportionate to the complexity or importance of the issues in dispute and the amount in dispute.”
Justice granted Livingstone’s application for an extension of one year to the life of the writ, which should be sufficient time given Rockgold’ application for leave to commence proceedings in the name of the companies is due to be heard in November 2021.
Why the causes of action against the secured creditors, which were identified during proceedings NewSat’s receivers took against two of the company’s directors, aren’t choses of action Livingstone could assign, isn’t dealt with in the judgment.