Gallop Reserve Pty Ltd v Matton Developments Pty Ltd

Gallop Reserve Pty Ltd sought a declaration of the validity of a litigation funding agreement, as well as an order for the payment of funds held in court. Matton Developments Pty Ltd disputed the validity of the agreement and counterclaimed for a declaration that it was not liable for legal costs. The dispute was heard in the Supreme Court of Western Australia.

The court was required to determine whether the litigation funding agreement and its subsequent variation were valid and enforceable. It also needed to decide whether the plaintiff could apply the settlement funds received from a third party to discharge debts owed under the litigation funding agreement before settling debts owed under a separate loan agreement. Finally, the court needed to decide whether the second defendant was liable for legal costs.

The court found that the litigation funding agreement was valid and enforceable. It held that the Continuation Deed was also valid and that the plaintiff could apply the settlement funds to discharge debts under the litigation funding agreement before settling debts under the loan agreement. The court dismissed the counterclaim, finding that the second defendant was liable for legal costs.

The court ordered that the balance of the funds paid into court by the solicitors for the first defendant, with accrued interest, be paid to the plaintiff. The court also declared that the litigation funding agreement and the Continuation Deed were valid and enforceable, and that the plaintiff could apply the settlement funds to discharge debts under the litigation funding agreement before settling debts under the loan agreement. The second defendant’s counterclaim was dismissed.