Jess & Jess

In the matter of Jess & Jess, the trustees of the bankrupt estate of Mr Jess Snr sought approval to apply to the Federal Court of Australia to ratify their entry into a litigation funding agreement. The application was brought under section 121(9)(g) of the Family Law Act 1975 (Cth), which allows for the disclosure of certain information that is otherwise prohibited by section 121. The represented third parties initially opposed the trustees' application but later withdrew their opposition. The court had to decide whether to grant the trustees' application for approval to disclose the required information to the creditors of the bankrupt estate. The trustees argued that their entry into the litigation funding agreement was necessary for the ongoing administration of the bankruptcy and that they would implement measures to maintain confidentiality. The represented third parties had previously opposed the application, citing technical deficiencies in the trustees' material. However, they later withdrew their opposition, and the court found that the trustees' proposed measures to maintain confidentiality were practical and achievable.

The court approved the trustees' application under section 121(9)(g) of the Family Law Act. The court noted that the trustees' actions in entering into the litigation funding agreement were not in themselves objectionable, but section 121 of the Family Law Act prohibited the dissemination of certain information without approval under section 121(9)(g). The represented third parties had initially opposed the trustees' application but later withdrew their opposition. The court found that if it were to refuse the application, the trustees would likely be hindered in their ongoing administration of the bankruptcy of the first respondent. The court also found that the trustees' proposed measures to maintain confidentiality were practical and achievable. The court concluded that it was appropriate to grant the trustees' application and directed the legal representatives of the trustees and the represented third parties to confer and agree on a mechanism to reduce the risk of creditors further disseminating any information given to them by the trustees. The court also noted that the Federal Court of Australia, drawing on its expertise in class action litigation when issues of confidentiality arise, may add a layer of protection in addition to the trustees' proposed measures.

The court granted the trustees' application for approval to apply to the Federal Court of Australia to ratify their entry into a litigation funding agreement. The court directed that the trustees could disclose certain information to the creditors of the bankrupt estate, including the existence of the proceedings, the names of the parties, the factual background, the procedural history, findings of fact and reasons for judgment, notice of appeal, and any future orders, declarations, and reasons for judgment. The court also directed that the legal representatives of the trustees and the represented third parties must confer and agree on a mechanism to reduce the risk of creditors further disseminating any information given to them by the trustees. The court ordered that each party bear their own costs of and incidental to the trustees' application for orders under section 121(9)(g). The represented third parties had applied for an order that their costs be paid by the trustees, but the court found that an order for costs was not just in all the circumstances. The court noted that the trustees' material had required considerable refinement, but the represented third parties had not objected to the trustees' application until it was in proper form.