Will a Court order security for costs against a liquidator with
litigation funding? Not always, as a recent decision of the NSW
Supreme Court made clear.
Background
The defendant was the director of a company (Commercial
Indemnity Pty Ltd or 'Commercial
Indemnity') which provided agency services for
commercial and industrial rental and petroleum bonds.
In 2008, the defendant sold a half interest in Commercial
Indemnity but never transferred the purchased shares. Following the
sale, the defendant and co-owner worked full time in the business
until 2013 when a serious dispute arose.
In May 2015, proceedings were commenced in the Supreme Court of
New South Wales by the co-owner which sought a declaration that the
defendant held half of the shares of Commercial Indemnity on trust
and an order that a share transfer be executed. One month after
this claim began, the defendant placed Commercial Indemnity into
voluntary liquidation.
