LM Investment Management Limited (Administrators Appointed) v The Members of the LM Managed Performance Fund

The case involved LM Investment Management Limited, represented by administrators, and the members of the LM Managed Performance Fund. The dispute centred around the costs incurred in the proceedings and the recovery of those costs under a costs agreement. The matter was heard in the Supreme Court of Queensland. The key legal issue before the court was whether LM Investment Management Limited was under a legal liability to its solicitors to pay costs, which would entitle it to recover those costs under the costs order made in its favour against the other party.

The court examined the terms of the costs agreement between LM Investment Management Limited and its solicitors. The agreement included an estimate of fees and costs, the basis for charging, and the requirement for regular account submissions. Crucially, the agreement contained a special condition stating that no fees would be payable unless the court made an order in favour of LM Investment Management Limited, and the fees would be limited to the amount of costs recovered from the opposing party. The court held that, due to this special condition, LM Investment Management Limited was not under a legal liability to pay the solicitors' costs unless and until a court order was made in its favour. Consequently, the court dismissed the amended application filed by LM Investment Management Limited seeking to recover the costs from the members of the LM Managed Performance Fund.

As a result of the court's decision, the amended application filed on 13 March 2014 was dismissed. This outcome means that LM Investment Management Limited is not entitled to recover the costs from the members of the LM Managed Performance Fund under the specific terms of its costs agreement with its solicitors.