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Shanghai Neuhof Trade Company Limited v Zespri International Limited [2020] NZHC 987 (13 May 2020)

Last Updated: 19 May 2020

JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie On 13 May 2020 at 4.00 pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:..............................

Solicitors/counsel:

Winston Wang & Associates/B D Gray QC/K Muller, Auckland Buddle Findlay, Wellington/M Corlett QC, Auckland

SHANGHAI NEUHOF TRADE COMPANY LTD v ZESPRI INTERNATIONAL LTD [2020] NZHC 987 [13 May 2020]

Introduction

[1] The plaintiffs have discontinued their claims against the defendant and the defendant has discontinued its counterclaim against the plaintiffs. The defendant is now entitled to costs but, before seeking a costs order, it has applied for disclosure orders. It seeks to require the plaintiffs to disclose the identity of their non-party litigation funders, particulars of the relationship between them and their funders, any agreements with or undertakings given by them to the funders, and any documents relevant to the funders’ control of or interest in the proceedings.

[2] The plaintiffs in response have filed two affidavits from Ms Yayin Li. She is the general manager of the second plaintiff. Ms Li has deposed that:

(a) the proceedings were funded by members of Xiongjie Liu’s (Mr Liu’s) immediate family because Mr Liu is in prison in China and was unable to fund the litigation himself;¹

(b) there were no written agreements put in place, because, in Chinese culture, written agreements are unnecessary and would be inappropriate for a matter such as this;

(c) instructions for the conduct of the proceedings were given by members of the family. This was necessary because Mr Liu was in prison at all relevant times. The family however always regarded Mr Liu as being in control of the litigation and as “being the shareholder of the plaintiffs in whose interests the litigation was conducted”;²

(d) the source of the funding was an inheritance received following the death of Mr Liu’s father, Dongcai Liu;

1. I had understood that Mr Liu is (or perhaps was) the managing director and chairman of the first plaintiff. Company searches of the plaintiffs have been put in evidence by the defendant. Mr Liu is not named as an officer of the first plaintiff in the search dated 20 February 2020.
2. The company searches show that as at 20 February 2020, Mr Liu was not a shareholder in the first plaintiff. He was named as one of nine shareholders in the second plaintiff. He appears to have acquired additional shares in July 2017.
   • (e) payments made to persons or entities in New Zealand were passed on on behalf of the family by a family member who lives in this country, Mr Lijun Si. Mr Si did not use his own funds. He was not involved in the funding of the litigation, he did not control the litigation and he did not stand to benefit from it.

[3] Notwithstanding the provision of this information, the defendant still seeks disclosure orders. Further, it seeks to extend the scope of the information sought to also require details of the late Dongcai Liu’s will (or any legacy from the estate), as well as trust deeds for any trusts that funded the litigation, and any resolutions of the trustees of those trusts authorising distributions to fund the litigation. The defendant has also modified one of its requests. It initially sought any documents relevant to the issue of the funders’ control of or interest in the proceeding, including any instructions given by the funders to the plaintiffs’ solicitors or counsel, and any documents relevant to the funders’ understanding of their liability for costs. It now seeks that the Court should require the plaintiffs’ solicitors and counsel to list in affidavits the metadata embedded in emails they received from or sent to the litigation funders. Mr Barker, for the defendant, explained that the defendant does not seek the disclosure of privileged information. Rather, it seeks the metadata which, I was told, will disclose the date, author and recipient(s) of relevant emails.

Background

[4] The plaintiffs are both Chinese companies. The first plaintiff imported and distributed kiwifruit in China on behalf of the defendant. The second plaintiff built a cool store for the defendant.

[5] The Chinese customs authorities alleged that duty had been underpaid on the imported kiwifruit coming into China, and the first plaintiff and its managing director, Mr Liu, were charged. They were found guilty. The Shanghai No. 1 Intermediate Peoples’ Court imposed a fine of RMB 40,000,000³ on the first plaintiff. Mr Liu was sentenced to 13 years’ imprisonment. Mr Liu for his part claimed at trial that he was the defendant’s agent, that the defendant consigned the kiwifruit to the first plaintiff,

³ Approximately $8.7 M (NZD).

retained ownership of the kiwifruit and was liable to pay the duty to the Chinese customs authorities.

[6] The Serious Fraud Office announced that it was investigating the affairs of Zespri Group Limited (of which the defendant is part) in late October 2013. Three days later Mr Si, who is Mr Liu’s nephew, gave an interview to TVNZ One News in this country. He asserted in the course of the interview that the defendant had treated his uncle as a “scapegoat”. One News also reported that Mr Liu’s family were considering legal action in this country against the defendant.

[7] On 20 November 2013, a letter before action was sent by the plaintiffs’ then counsel to the defendant, reserving the rights of the first plaintiff, Mr Liu and “each member of his family” against the defendant.

[8] The plaintiffs commenced the proceedings on 30 May 2014. They sued on a primary contract they alleged was in place between them and the defendant between 2007 and 2011. They alleged that the defendant breached the contract by failing to reimburse them for duty paid by them to the customs authorities in China. They sought reimbursement of that duty. They also sued on a secondary contract. They asserted that the defendant asked them to build a cool store for its use in Shanghai and agreed that it would purchase from them cool storage and services in respect of a specified number of trays of kiwifruit each year. They asserted that when the primary contract for the export/importation of kiwifruit was terminated in 2011, the defendant also breached the secondary contract.

[9] The defendant has referred to various actions which it attributes to Mr Si in this country:

(a) On 4 June 2014, a publication known as FreshFruitPortal published a report on the Court proceedings. The article recorded statements attributed to Mr Si detailing some of the alleged facts asserted by the plaintiffs. Mr Si used the pronoun “we” in this context.
(b) FreshFruitPortal published a further article on 6 June 2014. Mr Si was again attributed with comments on various factual matters raised by the proceedings.

(c) In an affidavit of documents filed in July 2014, privilege was claimed in respect of emails sent by Mr Si, including to the plaintiffs’ then counsel.

(d) In August 2014, the plaintiffs served an affidavit on the defendant sworn by a translator. The affidavit stated that the translator had been provided with a number of the original documents for the proceeding by Mr Si.

[10] In August 2015, the defendant’s counsel asked the plaintiffs’ then counsel to disclose any litigation funding agreements as part of discovery. The plaintiffs’ counsel advised that there was “no outside litigation funder” financing the case. The defendant’s counsel asked what was meant by outside litigation funding. There was no response to this question.

[11] Mr Si and his mother (Mr Liu’s sister – Weixin Li), attended a without prejudice meeting with the plaintiffs’ counsel in late 2018. A representative of the defendant who attended the meeting has deposed that they were representing the plaintiffs.

[12] In December 2018, the defendant’s counsel again asked the plaintiffs to advise if they had any litigation funding. The plaintiffs responded in January 2019 advising that the plaintiffs were being funded “by members of the family including trusts associated with them”.

[13] In the interim, the first plaintiff had failed to pay the fine levied against it and failed to publish annual reports in China. It had been added to a list of enterprises “with serious illegal acts” and with “abnormal operations”. In February 2019, its business licence to trade in China was revoked.
[14] The trial of the proceeding was initially set down to commence in July 2019. The plaintiffs however advised by memorandum that Mr Liu would be unavailable to give evidence (he was still in custody in China) and they applied to adjourn the trial sine die on this basis. I granted the application for an adjournment and adjourned the trial to 27 April 2020. In November 2019, the plaintiffs again applied to adjourn the trial to a date after 27 February 2021, again because Mr Liu was still in prison. I declined the adjournment application in December 2019 and, in January 2020, the plaintiffs discontinued their claims against the defendant.

[15] On 6 February 2020, Mr Si confirmed to a media outlet, Business Desk, that the plaintiffs had discontinued the proceeding.

[16] The defendant’s application for disclosure orders was filed in February 2020. The plaintiffs have not filed a notice of opposition. Rather, they assert that the affidavits filed by Yayin Li, both in March 2020 and noted above in [2], respond to the defendant’s application and give all information that the defendant is entitled to.

The defendant’s position as to costs

[17] Ms Evans, who is general counsel for the defendant, has filed an affidavit deposing that the defendant’s legal fees have been in excess of $2 million, and that its disbursements exceed $550,000. Ms Evans states that she is still in the process of collating some expenses; she anticipates that the additional disbursements payable by the defendant will be substantial.

[18] I am not being asked at this stage to make a costs order. I nevertheless record a submission made for the plaintiffs by Mr Gray QC, namely that it is unlikely that any liability for costs which might ultimately be ordered against the plaintiffs (or their litigation funders) could approach the figures totalled by Ms Evans, because some of the costs discussed by her have already been dealt with in earlier costs orders, and because other costs relate to the defendant’s counterclaim.

[19] More relevantly for present purposes, in her affidavit Ms Evans asserted that the defendant does not know who funded the litigation, because the plaintiffs have not disclosed the identity of the members of the family, or the trusts associated with them,
who paid the bills. She recorded the defendant’s suspicion that Mr Si has funded and controlled the litigation. She set out her grounds for this suspicion, noting that the defendant suspects that Mr Si provided foreign exchange services to the first plaintiff through companies associated with him, and noting the matters I have referred to in paras [6], [7], [9], [11] and [15] above.

[20] I put it to Mr Barker, appearing for the defendant, that the defendant is seeking to establish that Mr Si funded the litigation and was either in control of it, or was to obtain a benefit from it, so that it has a solvent target in New Zealand, against whom it might be able to enforce a non-party costs order in the event that such order is made. Mr Barker did not deny my suggestion, and he accepted that it is unlikely that the defendant would be able to enforce costs orders against non-party funders resident in China. He nevertheless asserted that the purpose of the defendant’s enquiry is rather wider, namely, that it is seeking to identify exactly who funded the litigation, what the arrangements for the funding were and who controlled the litigation. Indeed, he queried whether the plaintiffs had any role in the litigation at all.

[21] It is noteworthy that neither Mr Si, nor his mother, Weixin Li, have been served with the present application. If the Court were being asked to make a non-party costs order against them, they should have been.⁴ Mr Gray QC, was careful to note that he appeared for the plaintiffs, and not for either Mr Si or his mother. I am not however being asked, at this stage, to make a non-party costs order against either Mr Si or Weixin Li and I do not consider that the fact they have not been served precludes me from dealing with the defendant’s application for disclosure. The defendant is seeking disclosure by the plaintiffs, and not by third parties.

Relevant law

[22] All matters relating to the costs of proceedings are in the discretion of the Court,⁵ and that discretion extends to permit the Court to make an order for costs against a non-party funder of litigation.⁶ The circumstances in which costs to be

⁴ Rudd v Bridle (No 2) [2019] EWHC 1986 (QB) at [12].

⁵ High Court Rules 2016, r 14.1(1).

6. Carborundum Abrasives Ltd v Bank of New Zealand (No 2) [1992] 3 NZLR 757 (HC), approved in Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) [2004] UKPC 39, [2005] 1 NZLR 145 at [7].

ordered against non-party funders have been succinctly summarised by the Privy Council as follows:⁷

...

1. Although costs orders against non-parties are to be regarded as “exceptional”, exceptional in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. The ultimate question in any such “exceptional” case is whether in all the circumstances it is just to make the order. It must be recognised that this is inevitably to some extent a fact-specific jurisdiction and that there will often be a number of different considerations in play, some militating in favour of an order, some against.

2. Generally speaking the discretion will not be exercised against “pure funders”, described ... as “those with no personal interest in the litigation, who do not stand to benefit from it, are not funding it as a matter of business, and in no way seek to control its course”. In their case the court's usual approach is to give priority to the public interest in the funded party getting access to justice over that of the successful unfunded party recovering his costs and so not having to bear the expense of vindicating his rights.

3. Where, however, the non-party not merely funds the proceedings but substantially also controls or at any rate is to benefit from them, justice will ordinarily require that, if the proceedings fail, he will pay the successful party's costs. The non-party in these cases is not so much facilitating access to justice by the party funded as himself gaining access to justice for his own purposes. He himself is “the real party” to the litigation, ... Nor, indeed, is it necessary that the non-party be “the only real party” to the litigation ... provided that he is “a real party in ... very important and critical respects” ...

4. Perhaps the most difficult cases are those in which non-parties fund receivers or liquidators (or, indeed, financially insecure companies generally) in litigation designed to advance the funder's own financial interests. ...

...

In the light of these authorities Their Lordships would hold that, generally speaking, where a non-party promotes and funds proceedings by an insolvent company solely or substantially for his own financial benefit, he should be liable for the costs if his claim or defence or appeal fails. ... however, that is not to say that orders will invariably be made in such cases, ...

7. Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2), above n 6, at [25] and [29] (citations omitted); approved by the Supreme Court, Mana Property Trustee Ltd v James Developments Ltd [2010] NZSC 124, [2011] 2 NZLR 25.

[23] The fact that there is a litigation funder and the identify of that funder should be disclosed to the other party or parties when the litigation is commenced, because the existence of the litigation funder can be relevant to applications for security for costs and for costs orders.⁸ Further, the terms of any funding agreement should be disclosed where an application is made to which the terms of the agreement could be relevant, for example, where there is an application for a non-party costs order.⁹ The Court can require a plaintiff to disclose the identity of a non-party funder, particulars of the funding arrangement,¹⁰ and the amount of funding.¹¹ Disclosure orders in this context stem from the Court’s inherent powers – “where the power exists to grant a remedy, there must also be inherent in that power, the power to make ancillary orders to make the remedy effective”.¹² Before making a disclosure order, there must however be grounds for thinking that a non-party has funded the litigation in some direct or indirect way.¹³ It is a discretion to be exercised cautiously.¹⁴

[24] In Thomson v Berkhamsted Collegiate School, the Queen’s Bench Division of the High Court in the United Kingdom set out the following considerations as being relevant to an application for disclosure in relation to non-party funding.¹⁵ It was suggested that the Court should consider:

(a) the apparent strength of a costs application unassisted by disclosure;

(b) the probative value of the information sought;

(c) whether the information sought would obviously be subject to privilege; and

⁸ Waterhouse v Contractors Bonding Ltd [2013] NZSC 89, [2014] 1 NZLR 91 at [67].

9. Arklow Investments Ltd v MacLean HC Auckland CP489/97, 19 May 2000 at [18]; Hamilton v Papakura District Council [1997] NZHC 1109; (1997) 11 PRNZ 333 (HC); cf Jupiter Air Ltd (in liquidation) v Australian Aviation Underwriting Pool Pty Ltd (2002) 16 PRNZ 702 (HC).

¹⁰ Hamilton v Papakura District Council, above n 9, at 339.

¹¹ Arklow Investments Ltd v MacLean, above n 9, at [20].

12. Abraham v Thompson [1997] EWCA Civ 2179; [1997] 4 All ER 362 (CA) per Ackner LJ, as quoted in Minister of Education v H Construction North Island Ltd [2019] NZHC 1459, [2019] 24 PRNZ 549 at [69].

¹³ Hamilton v Papakura District Council, above n 9.

¹⁴ At 339; cited with approval in Arklow Investments Ltd v MacLean, above n 9, at [18].

15. Thomson v Berkhamsted Collegiate School [2009] EWHC 2374 (QB), [2009] 6 Costs LR 859 at [19].
    • (d) whether any order would be proportionate and just in all the circumstances.

[25] Both counsel adopted this framework. So do I.

Analysis

[26] It is clear that the litigation has been funded by non-parties. That is not in dispute.

The apparent strength of a costs application unassisted by disclosure

[27] Mr Barker argued that the defendant is likely to obtain a non-party costs orders against the litigation funders. Mr Gray disputed this, arguing that there is nothing to suggest that those members of Mr Liu’s family who funded the proceedings, either controlled the litigation, or stood to gain a benefit from its outcome.

[28] As matters currently stand, it seems to me unlikely that the defendant could obtain costs orders against the non-party litigation funders. There are a number of reasons for this:

(a) The plaintiffs have not to date disclosed the identity of the family members who have funded the litigation. Ms Li simply asserts that it was funded by members of Mr Liu’s immediate family. She does not disclose their identity. There is no named person or entity the Court could make an order against.

(b) There is nothing to suggest that Mr Liu’s family members controlled the litigation for their own purposes. Ms Li in one of her affidavits said that members of Mr Liu’s family gave instructions for the conduct of the case, but only because Mr Liu was in prison. She deposed that the family always regarded Mr Liu as being in control of the litigation as a shareholder of the plaintiffs in whose interests the litigation was being conducted.
(c) There is nothing to suggest that Mr Li’s family members stood to gain a benefit from the outcome of the proceedings. The family members were not parties to the litigation. Nor were they indirectly parties to it. There is no evidence that family members were either directors or officers of the plaintiffs. Nor is there any evidence suggesting that they held shares in the plaintiffs. There is nothing to suggest that there was any written agreement in place between the family members and the plaintiffs.

[29] It is possible that Mr Liu’s family members were funding the litigation in an endeavour to clear Mr Liu’s name, and because Mr Liu is in prison, unable himself to pursue matters in this country. There is no evidence suggesting that family members had any agenda of their own, or that they were other than pure funders of the proceedings.

[30] The defendant argues that Mr Si may have had a role in conducting the plaintiffs’ case. It says that this is evidenced by the brief statements attributed to Mr Si in a transcript of a TVNZ One News programme aired on or about 25 October 2013. It refers to the articles written in FreshFruitPortal, and to Mr Si being a party to one or more strings of emails for which privilege was claimed by the plaintiffs on discovery. It also argues that Mr Si provided documents to a translator, who swore an affidavit for the plaintiffs annexing a translation of the judgments in August 2014, and to the fact that Mr Si and his mother attended without prejudice meetings with representatives of the defendant in the latter part of 2018.

[31] I do not consider that either individually or collectively, these various matters suggest anything more than that Mr Si was carrying out administrative or information related duties. The various activities do not make him a controller or a funder of the litigation. Nor do they suggest that he was going to benefit from its outcome.

[32] The defendant has adduced records of two payments to its solicitors by the “Weixin Trust”. There is nothing direct to link that trust to Mr Si. It appears to be a New Zealand based trust and Weixin is Mr Si’s mother’s christian name. It is Ms Li’s evidence that Mr Si was not financially involved in funding the litigation.
[33] The evidence available to date suggests no more than that Mr Si was acting as a conduit on behalf of family members, who were making payments to New Zealand based individuals and entities who were conducting the proceedings. Acting as a conduit does not constitute the conduit as a funder of the litigation. Nor does it evidence control or the potential taking of a benefit.

[34] I also note that security for costs has been paid by the plaintiffs. The availability of security will count against any costs orders against non-party funders.¹⁶

[35] For these various reasons, I do not consider that the defendant has a strong claim for a costs order against non-parties, unassisted by disclosure.

The potential value of the information sought to any costs application against the litigation funders

[36] I have to consider the potential value of the information sought to the fair determination of any costs application that may be made and consider whether that material is likely to elucidate considerations probative to the exercise of my discretion, or whether it is likely to drag any costs application into a side alley of satellite litigation with diminishing returns for the overall issue.¹⁷

[37] I accept that the defendant is entitled to know the identity of each family member who contributed to the funding of the proceeding. Ms Li’s affidavit does not provide that detail. In my view, Ms Li, or a member of the family, should name each of the member of the family who helped fund the litigation.

[38] Further, in my judgment, the relationship between each funder and the plaintiffs should be set out – albeit succinctly. Ms Li has stated that the family members funded the litigation on behalf of Mr Liu. However, on the available evidence Mr Li does not appear to be a director or officer of either plaintiff. He is not a shareholder of the first plaintiff; he is one of nine shareholders in the second plaintiff. While it is understandable that family members have paid for proceedings in an endeavour to clear Mr Liu’s name and as a matter of family honour, it is not clear to

¹⁶ Mana Property Trustee Ltd v James Developments (No 2), above n 7 at [10].

¹⁷ Thomson v Berkhamsted Collegiate School, above n 15, at [19(ii)].

me how that desire engages the interests of the plaintiffs. This needs to be clarified. It could be material in the exercise of my discretion when dealing with any costs application.

[39] The defendant has sought detail of any agreements with, or undertakings given to the family members who funded the litigation, as to the terms or basis on which the funders made their respective contributions. Ms Li has deposed that there were no written agreements in place. She did not in her affidavit however deal with any undertakings which may have been offered by the plaintiffs to family members. Whether there were undertakings, and if so the effect of any undertakings, are matters which could be material to any application for costs against the non-party litigation funders.

[40] It seems to me that this information can readily be made available by the plaintiffs. It should be within the plaintiffs’ knowledge.

[41] I am not persuaded that the plaintiffs should be required to disclose detail of Mr Liu’s father’s will, nor copies of trust deeds or resolutions passed. This material, if it exists, will not be under the control of the plaintiffs. It also seems to be of little if any value to any ultimate costs application.

[42] Of more concern is the application – as amended – that the Court should require the plaintiffs’ solicitors and counsel to file affidavits setting out the metadata attached to all emails they have received giving them instructions. It was submitted for the defendant that it will only be able to demonstrate control and/or benefit by the litigation funders if it knows what has passed between the funders and the plaintiffs’ solicitors and counsel.

[43] It is not suggested that there are no such emails, and indeed it seems reasonably clear from Ms Li’s affidavit that there must have been. However, there are difficulties. What is now sought is essentially disclosure by third parties – the plaintiffs’ solicitors and counsel. They have not been served. Their attitude to the application is not known, and no indemnity for the costs they will incur has been offered. Moreover, the size of the task is unclear. There is no evidence before me as to how difficult it would
be to extract the metadata. Mr Barker asserted that the process is largely automated and that modern discovery software can extract the information and produce a list automatically. That however is simply an assertion from the bar. Mr Gray, who has been counsel for the plaintiffs for part of the proceeding, was rather more sceptical. He pointed out that the proceedings were on foot for some six years, that there may well be a very large amount of email correspondence, and that it could well be a time consuming and difficult task to first isolate the emails and then extract the metadata from these emails.

[44] In any event, I am concerned that the value of undertaking the proposed exercise could well be disproportionate to the effort involved in its collation. The fact that a particular family member was sent an email to the plaintiffs’ solicitors or counsel, or received an email from the solicitors or counsel, or was a party to an email chain, does not compel the conclusion that that family member was controlling the litigation. I am concerned that the making of any such order would be unlikely to elucidate material of any great probative value. Rather, the making of any such order could lead to satellite litigation, with ever diminishing returns.

The likelihood of privilege existing in respect of materials sought

[45] Mr Barker asserted that the metadata is sought, rather than the emails themselves, because this will avoid any arguments as to privilege. I accept, on the basis of what Mr Barker told me about metadata, that that is likely to be the case, but as I have noted, the availability of the metadata only, reduces or perhaps extinguishes the probative value of the materials sought.

[46] If the emails themselves were to be disclosed, there could well be difficulties with privilege. If there are materials indicating that the funders were giving instructions on their own account, and without reference to the plaintiffs, then that could be highly probative material and it would not obviously attract legal professional privilege. However, if the instructions were given by the litigation funders as agents for the plaintiffs, then the reverse would likely be the case. Privilege issues would need to be determined by the Court. If there are a large number of emails involved, that could well be a very onerous exercise. It might have to be undertaken by an
Associate Judge to avoid any suggestion that I could then no longer deal with the costs application.

Justice and proportionality

[47] I have already discussed what materials I consider should and can be readily disclosed and I have noted that the disclosure of metadata attached to all emails received or sent by the plaintiffs’ solicitors and counsel is, on the face of it, disproportionate. Further, I am not persuaded that an order requiring disclosure of metadata is necessary in the interests of justice. Ms Li has already deposed that Mr Si did not fund the litigation, that he did not control it and that he did not stand to derive a benefit from it. There is no reason to discount Ms Li’s evidence in this regard. There is little point in requiring the plaintiffs’ solicitors and counsel to undertake a search of all emails generated over the period of some six years that this litigation was in train, where the end result at best from the defendant’s perspective, is that there could be non-party costs orders made against litigation funders based in China, which could not be enforced.

[48] It seems to me that the justice of the case requires an early determination of such costs application as the defendant wishes to make, and that there is no point in embarking on what is in effect a fishing expedition.

Conclusion

[49] For the reasons I have set out, I make an order requiring the plaintiffs to file an affidavit within 15 working days of the date of this judgment setting out the following:

(a) the identity of any person or persons, companies, trusts or other entities who or which have contributed to the funding of this proceeding, and whether by way of gift, loan, advance, making payments on behalf of the plaintiffs, making a commitment to contribute to funding the plaintiffs’ costs, or otherwise;

(b) full particulars of:

• (i) the relationship between the plaintiffs and the funder (funders);

(ii) any oral agreements between the plaintiffs and the funders, or undertakings made by the plaintiffs to the funders, as to the terms or basis on which the funders were contributing to the funding of this proceeding.

Costs

[50] The defendant is entitled to its reasonable costs and disbursements on this application. Counsel were agreed that costs should be fixed on a 2B basis. It should be unnecessary for the Court to make any further orders in regard to the costs of this application, but in the event that agreement proves impossible, I direct as follows:

(a) any memorandum by the defendant seeking costs is to be filed within 10 working days of the date of this judgment;

(b) any memorandum in reply from the plaintiffs is to be filed within a further 10 working days of the date of this judgment; and

(c) memoranda are not to exceed five pages.

I will then deal with the issue of costs on the papers, unless I require the assistance of counsel.

[51] Counsel are to endeavour to agree a timetable for the filing of any costs application in the substantive proceedings by the defendant. Any agreement is to be filed for approval by the Court. If agreement cannot be reached, counsel are to advise the Registrar and I will then allocate a telephone conference to advance matters.








Wylie J