International Litigation Partners Pte Ltd v Chameleon Mining NL (Receivers and Managers Appointed)

The High Court of Australia heard an appeal concerning a litigation funding agreement between International Litigation Partners Pte Ltd (the appellant) and Chameleon Mining NL (the first respondent). The dispute arose when Chameleon Mining sought to rescind the agreement, arguing that International Litigation Partners had conducted a financial services business without the requisite licence. This contention was based on the assertion that the litigation funding agreement constituted a "financial product" or a "credit facility" under the relevant legislation.

The central legal issue before the High Court was whether the litigation funding agreement entered into by the parties constituted a "financial product" or a "credit facility" for the purposes of the Corporations Act 2001 (Cth) and its associated regulations. Specifically, the court had to determine if the appellant's provision of funding for legal costs, paid directly to the respondent's lawyers, fell within the statutory definitions of these terms, thereby requiring a financial services licence.

The High Court reasoned that the Funding Deed provided financial accommodation to Chameleon Mining. The appellant agreed to pay the legal costs associated with the litigation, satisfying a need of the respondent for funds to pay its lawyers. This accommodation was provided for a period, either until the litigation reached resolution or until a change in control of the respondent occurred. The court found that this arrangement constituted a "credit facility" as it involved the provision of financial accommodation for a period, and therefore fell within the scope of the legislation. The exclusion for credit facilities from the definition of financial products under s 765A(1)(h)(i) of the Act meant that the appellant was not dealing in a financial product.

Consequently, the High Court allowed the appeal, setting aside the orders of the Court of Appeal of the Supreme Court of New South Wales. The court ordered that judgment be entered for the appellant against the first respondent in the sum of $8,381,144.30, with interest, and that the first respondent pay the appellant's costs of the appeal. The security provided by the appellant for the grant of special leave to appeal was also ordered to be released.