Gregory Lenthall & Ors v Westpac Banking Corporation & Anor (NSD1812/2017)
On Wednesday 4 December 2019, the High Court ruled that the Federal Court of Australia’s powers do not extend to the making of the Common Fund Order that was made in this case by Justice Lee on 18 September 2018.
IMPACT OF THIS DECISION ON THE COMMON FUND ORDER MADE ON 18 SEPTEMBER 2018
- In March 2018, group members were informed by a Notice issued pursuant to an order of the Federal Court made on 15 March 2018 that the Applicants in this case were applying to the Court for a Common Fund Order, that is an order that certain of the funding terms they entered into with JustKapital Litigation Pty Ltd (‘the Funder’) be applied to all group members, whether they had signed a funding agreement with the Funder or not. These terms include that prior to the distribution of any judgment or settlement sum to the Applicants and the group members certain amounts would be deducted and paid to the Funder and Shine Lawyers.
- On 18 September 2018 Justice Lee in the Federal Court made a Common Fund Order that provided, among other things, that prior to payment to the Applicants and the group members from any judgment or settlement sum in this case, the following amounts would be deducted:
- (a) The costs of the action, paid by the Funder to the date of the judgment or settlement, be repaid to the Funder (“costs” was widely defined but included all of the Applicant’s legal costs and disbursements paid by the Funder);
- (b) An amount being the lesser of:
- (i) three times the amount in (a) above; or
- (ii) 25% of the judgment or settlement sum net of the amount in (a) above.
- The High Court’s decision means that the Common Fund Order made by the Federal Court on 18 September 2018 now has no application to this case and has been set aside.
IMPACT OF THE HIGH COURT DECISION ON THIS CASE
- The case against Westpac is still running and remains on foot.
- The funding terms as set out in 2(b) above no longer apply to the group members and therefore group members who have not signed a funding agreement do not have to pay any amounts from any judgment or settlement sum to the Funder or to Shine Lawyers.
- The costs and financial risks of conducting this case are very substantial, including the risk that if the case is lost the Applicants will be liable to pay costs to Westpac (‘adverse costs’). The Applicants have no means of funding this case themselves and rely upon funding from a litigation funder to enable them to bring this action on behalf of themselves and all group members.
- The Funder is considering the financial viability of continuing to fund this case as it is concerned that, given the High Court’s decision, it will not be able to recover the substantial costs it has already incurred and earn a return sufficient to reflect its funding and the risks it has undertaken in supporting the case to date and will continue to incur should it fund this action to conclusion.
- In light of the indications the Applicants have received from the Funder as set out in 7 above, the Applicants wish to undertake a “book build” in order to see if they can obtain sufficient support from other group members to ensure that the Funder continues to fund this action against Westpac. If the Applicants are unable to secure enough group members to sign similar client agreements with Shine Lawyers, and similar funding agreements with the Funder, to those signed by them with Shine Lawyers and the Funder, then it is unlikely the Applicants will be able to continue to prosecute this case on behalf of themselves and the group members against Westpac.
To formally sign up, you are required to sign:
- A client agreement with Shine Lawyers; and
- A funding agreement with JustKapital Litigation Pty Ltd (the litigation funder in this case).
If you wish to sign a client agreement with Shine Lawyers and a funding agreement with the Funder please click on the following link.