Peter Tao Zhu & Anor v Domson Pty Ltd & 6 ors t/as Litigation Lending Services Partners

The applicants, Peter Tao Zhu and another, appealed to the Court of Appeal of New South Wales against a decision concerning a litigation funding agreement. The respondents were Domson Pty Ltd and six other entities trading as Litigation Lending Services Partners. The core of the dispute revolved around the enforceability of this funding agreement, which the applicants argued was void for champerty.

The primary legal issue before the Court of Appeal was whether the litigation funding agreement was void for champerty. This required the Court to determine if the third-party funder, Litigation Lending Services Partners, possessed a legitimate interest in the proceedings by virtue of enforceable rights under the agreement, thereby distinguishing it from a champertous arrangement.

The Court of Appeal, in dismissing the appeal, reasoned that the agreement did not offend the doctrine of champerty. The judges applied established legal principles concerning litigation funding, focusing on whether the funder's involvement was merely a commercial arrangement for the provision of finance or an improper interference with the course of justice. The Court found that the funder's rights under the agreement were sufficiently defined and enforceable, indicating a legitimate commercial interest rather than an illegitimate one. Consequently, the appeal was dismissed with costs.