Kogan, in the matter of Rogulj Enterprises Pty Ltd (in liq)

In the matter of Rogulj Enterprises Pty Ltd (in liq), the liquidators sought approval from the Court to enter into a litigation funding agreement under s 477(2B) of the Corporations Act 2001 (Cth). The liquidators, Barry Frederic Kogan and Ms Sozou, were appointed to the company on 24 December 2018, after it was wound up by its sole director and shareholder, Mr Nenad Rogulj. The company had substantial property interests through shares and units in unit trusts, but these were not disclosed in Mr Rogulj's Report as to Affairs. The liquidators' investigations into the circumstances surrounding the transfer of these assets and the value of the units in five of the unit trusts still held by the company are ongoing. The company is without available cash, having $77 at bank, and reportedly owes creditors $31,816,670, with Tasman Development Holdings Pty Ltd being the major creditor.

The legal issues before the Court were whether the liquidators' entry into the funding agreement was a proper exercise of their power and whether retrospective approval could be granted. The liquidators argued that the directions and orders applied for did not purport to determine the matters in issue and, therefore, it was not necessary for notice of the ex parte application to be given to the defendant banks or other actual or prospective creditors. The Court considered the principles in Brown v DML Resources Pty Ltd (in liq) (No 7) and held that the liquidators' approval to exercise their own commercial judgment in the matter did not require notice to be given to the defendant banks or other actual or prospective creditors.

The Court granted the liquidators' application for approval to enter into the funding agreement nunc pro tunc and made ancillary orders in respect of confidentiality over part of the evidence. The Court held that the liquidators' entry into the funding agreement was a proper exercise of their power and that retrospective approval could be granted. The Court also held that it was not necessary for notice of the ex parte application to be given to the defendant banks or other actual or prospective creditors, as the directions and orders applied for did not purport to determine the matters in issue. Finally, the Court made orders pursuant to ss 37AG and 37AF of the Federal Court of Australia Act 1976 (Cth) to prevent prejudice to the proper administration of justice, until the conclusion of the external administration of the second plaintiff or order of the Court (whichever is the earlier), Confidential Exhibit BK-2 to the affidavit of Barry Frederic Kogan sworn 5 July 2021 and the affidavit of Barry Frederic Kogan sworn 21 July 2021 are not to be published and/or accessed except pursuant to an order of the Court.