Re an Application in the matter of AXF Group Pty Lid (in liq)
[2020] VSC 263
•30 April 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S ECI 2020 01957
IN THE MATTER OF AXF GROUP PTY LTD (ACN 116 258 130) (IN LIQUIDATION)
| MALCOLM KIMBAL HOWELL AS LIQUIDATOR OF AXF GROUP PTY LTD (IN LIQUIDATION) (ACN 116 258 130) | First Plaintiff |
| AXF GROUP PTY LTD (IN LIQUIDATION) (ACN 116 258 130) | Second Plaintiff |
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JUDGE: | RIORDAN J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 27 and 30 April 2020 |
DATE OF JUDGMENT: | 30 April 2020 |
CASE MAY BE CITED AS: | Re an Application in the matter of AXF Group Pty Lid (in liq) |
MEDIUM NEUTRAL CITATION: | [2020] VSC 263 |
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LIQUIDATORS – Application for the approval of entry into a litigation funding agreement pursuant to s 477(2B) of the Corporations Act 2001 (Cth) – Application granted – Application for a direction with respect to a litigation funding agreement pursuant to s 90-15 of Schedule 2 to the Corporations Act 2001 (Cth) – Application not granted.
OPEN COURTS – Application for a closed court order pursuant to s 30 of the Open Courts Act 2013 (Vic) and a confidentiality order with respect to the evidence and submissions supporting the application – Application not granted.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr S D Hay SC with Ms E Nikou Madalin | Lander & Rogers |
HIS HONOUR:
By originating motion dated 22 April 2020, the plaintiffs seek orders and directions under s 477(2B) of the Corporations Act 2001 (Cth) (‘the Corporations Act’) and s 90-15 of Schedule 2 to the Corporations Act:
(a)granting the first plaintiff (‘Mr Howell’), in his capacity as liquidator of the second plaintiff (‘AXF Group’), approval to enter into and cause AXF Group to enter into the Proposed Funding Agreement;[1]
[1]The Proposed Funding Agreement is defined in the supporting affidavit of Mr Howell sworn 22 April 2020 as the litigation funding agreement with Claims Funding Australia Pty Ltd, set out at pages 1942 to 1965 of the exhibits to his affidavit.
(b)that Mr Howell is justified in carrying out his duties as the liquidator of AXF Group on the basis that, if he incurs reasonable expenditure in the care, protection, preservation and/or realisation of the Trust Assets the subject of the Proposed Funding Agreement, he will be entitled to:
(i) an indemnity for that expenditure and reasonable remuneration out of the Trust Assets; and
(ii) a lien to secure that indemnity; and
(c)that the costs of this proceeding are costs in the winding up of AXF Group and may be paid out of the Trust Assets realised by the plaintiffs.
The plaintiffs further seek the following closed court confidentiality orders:
(a)pursuant to s 30 of the Open Courts Act 2013 (Vic) (‘the Open Courts Act’), a closed court order in respect of the hearing of the application; and
(b)pursuant to the Court’s inherent jurisdiction, a confidentiality order in respect of the affidavits, exhibits and written submissions filed in support of the application, and any transcripts of the hearing of the application.
Background
By a Deed of Settlement dated 1 February 2006 (‘the Trust Deed’), AXF Group was appointed as trustee of the Australia Xiang Fu International Trust (‘the Trust’). Its sole director was Mr Mingfeng Gu (‘Mr Gu Jnr’) who, together with his father, Mr Qi Lang Gu (‘Mr Gu Snr’), were the primary beneficiaries of the Trust.
On 15 February 2017, the Trust Deed was varied by a written agreement headed Deed of Variation, whereby, among other matters, cl 8.4(c) of the Trust Deed was deleted. The deleted clause provided:
The office of the trustee shall ipso facto be determined and vacated if the trustee being a company shall enter into liquidation whether compulsory or voluntarily (not being a voluntary liquidation for the purposes of amalgamation or reconstruction) or have a Receiver or Manager appointed; or make or enter into any composition or scheme of arrangement with its creditors.
On 19 November 2019, Mr Howell was appointed as liquidator of AXF Group by Efthim AsJ.
The winding up orders made by Efthim AsJ on 19 November 2019 were stayed until 4:00 pm on 6 December 2019. The stay order was extended on four occasions such that the liquidation did not commence until 5 February 2020.
By Deed of Removal of Existing Trustee and Appointment of New Trustee dated 4 December 2019, AXF Holdings Pty Ltd (‘AXF Holdings’) was appointed as the trustee of the Trust. Mr Gu Jnr is the sole director of AXF Holdings.
On 3 February 2020, AXF Group (in liquidation) sought to appeal against the orders of Efthim AsJ of 19 November 2019.
On 5 February 2020, Almond J dismissed the summons of AXF Group.
Mr Howell’s investigations to date indicate that the amounts claimed by creditors of the Trust total approximately AUD$200,241,285.44 and USD$5,154,000. Of these, purported secured creditors claim AUD$34,613,673.56 and USD$5,154,000. Purported unsecured creditors claim AUD$165,625,611.88. Mr Howell reported that creditors related or aligned to Mr Gu Jnr claim $108,833,243.60. The secured creditors include the National Australia Bank, which is owed $3,673,845 secured over the property and yacht referred to in sub-paragraphs 11(a) and (b) below.
Mr Howell’s preliminary investigations identified the following assets of the Trust:
(a)Real property located at 505/150 Clarendon Street, East Melbourne, Victoria 3002 and more particularly described in Certificates of Title Volume 11166 Folio 883, Volume 11166 Folio 964, Volume 11166 Folio 965 and Volume 11193 Folio 495 (‘the Property’). The Property is subject to a contract of sale for $4,500,000, with the balance of $3,384,272.27 payable at settlement.
(b)A vessel (i.e. a yacht) known as the ‘Fat Fish’ with licence number VR159492 and registration number RGU888N valued at $3,600,000.
(c)A Patek Philippe 5740/19-001 ‘Nautilus’ Calibre 240Q watch with Movement/Boite number 180455/6279945, being the watch described in certificate of origin dated 18 April 2019.
(d) Various shareholdings in other companies including:
(iii) AXF Investments Pty Ltd (ACN 603 313 408), of which Mr Gu Jnr is one of two directors;
(iv) AXF Resources Pty Ltd (ACN 604 730 181) (‘AXF Resources’), of which Mr Gu Jnr is the sole director;
(v) AXF Properties (Eynesbury) Pty Ltd (ACN 168 062 486) (‘AXF Eynesbury’), of which Mr Gu Jnr is the sole director; and
(vi) Cape Grim Holdings Pty Ltd (ACN 168 475 625), of which Mr Gu Jnr is one of three directors.
Supreme Court proceedings
By proceedings filed on 26 February 2020 against AXF Holdings, Mr Gu Jnr, AXF Resources and AXF Eynesbury (‘the respondents’), Mr Howell sought orders including:
(a)freezing orders against the respondents (‘the Freezing Order Application’); and
(b)orders appointing Mr Howell as receiver and manager without security over all the assets and undertakings of the Trust in respect of which AXF Group was formerly the trustee, with a power of sale for the purposes of converting such assets into cash in order to satisfy the debts of AXF Group which were incurred in its capacity as trustee of the Trust (‘the Receivership Application’);
(‘the Principal Proceeding’).
On 28 February 2020, Almond J made interim freezing orders against the respondents and listed the Receivership Application for hearing on 13 May 2020.
Relevant legislative provisions
Section 477(2B) of the Corporations Act provides:
Except with the approval of the Court, of the committee of inspection or of a resolution of the creditors, a liquidator of a company must not enter into an agreement on the company’s behalf (for example, but without limitation, a lease or an agreement under which a security interest arises or is created) if:
(a) without limiting paragraph (b), the term of the agreement may end; or
(b)obligations of a party to the agreement may, according to the terms of the agreement, be discharged by performance;
more than 3 months after the agreement is entered into, even if the term may end, or the obligations may be discharged, within those 3 months.
Section 90-15 of Schedule 2 to the Corporations Act provides:
Court may make orders
(1)The Court may make such orders as it thinks fit in relation to the external administration of a company.
Orders on own initiative or on application
(2) The Court may exercise the power under subsection (1):
(a) on its own initiative, during proceedings before the Court; or
(b) on application under section 90-20.
Principles applicable
The principles under which an application of this kind are determined are conveniently set out in the judgment of Gleeson J in Re Reed Constructions Australia Pty Ltd (in liq):
Section 477(2B)
31 Section 477(2)(m) of the Corporations Act provides for a liquidator’s general power to ‘do all such other things as are necessary for winding up the affairs of the company and distributing its property’. That power is qualified in relation to the entry into agreements in the circumstances in s 477(2B).
32 [His Honour extracted s 477(2B)]
33 In Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2011] FCAFC 89; (2011) 85 ACSR 38 (“Fortress”) at [40], the Full Court observed that, in considering whether to give approval under s 477(2B), the Court must consider the purposes for which the powers of a liquidator exist. Those purposes include the recovery of funds for the benefit of creditors ...
34 The standard imposed under s 477(2B) concerns an assessment by the Court that entry into the agreement is a proper exercise of power and not ill-advised or improper on the part of the liquidator, rather than involving the exercise of commercial judgment ...
35 In Pascoe; re Matrix Group Ltd (in liq) [2011] FCA 1117 (“Pascoe”) at [7], Jacobson J cited with approval the following statement by Austin J of the relevant test in Leigh; Re AP and PJ King Pty Ltd (in liq) [2006] NSWSC 315 at [23]:
Although the court has the statutory task [under s 477(2B)] of giving ‘approval’ to a liquidator’s agreement that may end more than three months after it is entered into, the case law shows that the court undertakes something less than a complete ‘merits review’. As Giles J said in Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83 at 85-6:
... the court is necessarily confined in attempting to second guess the liquidator in the exercise of his powers, and generally will not interfere unless there can be seen to be some lack of good faith, some error of law or principle, or real and substantial grounds for doubting the prudence of the liquidator’s conduct.
36 The Court’s task is to satisfy itself, having regard to the liquidator’s commercial judgment, that there is no error of law, grounds for suspecting bad faith or any other good reason to intervene ...
37 In Fortress, at [24], the Full Court endorsed the following comprehensive list of factors … relevant to the Court’s assessment of a proposed litigation funding agreement:
(1) the prospects of success of the proposed litigation;
(2) the interests of creditors other than the proposed defendant;
(3) possible oppression;
(4) the nature and complexity of the cause of action;
(5) the extent to which the liquidator has canvassed other funding options;
(6) the level of the funder’s premium;
(7) consultations with creditors; and
(8) the risks involved in the claim.[2]
[2][2017] FCA 594, [31]-[37] (citations omitted).
With respect to the distinction between an approval under s 477(2B) and a direction pursuant to the former s 479(3) of the Corporations Act, a precursor to s 90-15 of Schedule 2, Brereton J in Re One.Tel Ltd said:
The role of the court is to grant or deny approval to the liquidator’s proposal, not to reconsider every issue considered by the liquidator, nor to develop some alternative proposal which might seem preferable. In reviewing the liquidator’s proposal, the court pays due regard to his or her commercial judgment and knowledge of all of the circumstances of the liquidation, but satisfies itself that there is no error of law or ground for suspecting bad faith or impropriety, and evaluates whether the proposal is consistent with the expeditious and beneficial administration of the winding up. Importantly, the court’s approval is not an endorsement of the proposed agreement, but merely permission for the liquidator to exercise his or her own commercial judgment in the matter. Thus the approval confers, or completes, the liquidator’s power to enter into the transaction, but does not amount to the court approving the transaction itself. The distinction is material, because it means that — unlike a direction under s 479(3) or s 511 — an approval under s 477(2A) or (2B) alone does not exonerate the liquidator from personal liability.[3]
[3](2014) 99 ACSR 247, 253-4 [26].
The plaintiffs’ submissions
The plaintiffs submitted with respect to the eight identified relevant criteria as follows:
First, in terms of the interests of creditors and the mechanisms available to satisfy the Liabilities, there appears to be no alternative to the Supreme Court Proceeding. Mr Howell’s attempts to elicit a proposal from the Respondents as to how the Liabilities are to be met if not by Mr Howell being appointed receiver over the Trust Assets have been met with refusal.
Second, the Supreme Court Proceeding is not of such complexity or risk that it should not be pursued. Mr Howell is not labouring under any error of law or principle. Rather, the Proceeding represents a typical application of established law relating to former trustees.
Third, in relation to the prospects of success of the Supreme Court Proceeding, Mr Howell has carried out investigations, exchanged extensive correspondence with the Respondents, and taken advice from solicitors, and senior and junior counsel. The effect of that advice is that, on the basis of the material presently available, the Receivership Application enjoys good prospects of success (the Freezing Order Application already having been granted). Indeed, the Respondents concede that there is at least some basis for AXF Group to assert rights of indemnification and exoneration over the Trust Assets, and one Trust Asset – the Property – has already been the subject of consent orders in the Supreme Court Proceeding appointing Mr Howell receiver of the sale proceeds which will substantially discharge the debt of one secured creditor, the NAB.
Fourth, the costs and expenses incurred and to be incurred in the conduct of the Supreme Court Proceeding are substantial (although commensurate to the amount and issues in dispute and the quantum of the Liabilities) and are to be met entirely by CFA.
Fifth, Mr Howell is otherwise without funds or assets in the liquidation of AXF Group from which to fund the Supreme Court Proceeding. In the event approval to enter into the Proposed Funding Agreement is denied, it is unlikely that he will be able to continue with the Supreme Court Proceeding and, were that to occur, the creditors will not receive any distribution in the liquidation.
Sixth, in relation to possible oppression, it is difficult to envisage such a claim arising from the entry into the Proposed Funding Agreement. Mr Howell otherwise does not believe any creditor is prejudiced by his entry into the Proposed Funding Agreement. Indeed he believes entry into that agreement is in all creditor’s best interests (save for perhaps the Friendly/Related Creditors, in particular Mr Gu Jnr and his parents, Mr Gu Snr and Ms Zhang).
Seventh, in relation to the extent to which Mr Howell has canvassed other funding options, it was not anticipated, at the time Mr Howell entered into the Heads of Agreement under urgent circumstances, that any creditor could provide funding for the urgent Supreme Court Proceeding on better terms than those provided for, at short notice and with the substantial $5,000,000 Undertakings Indemnity being offered by CFA in respect of Mr Howell’s undertaking as to damages in the Freezing Order Application. 41 Even if an alternative source of funding were available, it is unclear whether (and if so the degree to which) an alternative funder could be relied upon to meet its obligations under any proposed arrangement. He has since written to each of the creditors purporting to have registered security interests over AXF Group. No such creditor has put forward a proposal to fund the Supreme Court Proceeding.
Eighth, in relation to the funder’s commission, Mr Howell believes the Funding Commission payable to CFA, being 15% of the final sum realised from the Proceedings less the funded costs, is ‘fair and reasonable’ and below the range ordinarily imposed by private funders (which he says is usually in the vicinity of 30% to 45% of the net resolution sum in a proceeding). The Funding Commission recognises not just CFA’s willingness to meet the considerable anticipated cost of the Supreme Court Proceeding but also its preparedness to take on the risks of:
(a)the identification of the Trust Assets (the extent of which was not known to Mr Howell or CFA at the time they entered into the Heads of Agreement);
(b)the Trust Assets already having been dissipated or otherwise encumbered such that the sale proceeds are insufficient to cover the costs of the Supreme Court Proceeding and the Funding Commission; and
(c)an adverse outcome in the Supreme Court Proceeding – both by bearing any adverse costs order, and by providing Mr Howell the Undertakings Indemnity.
I accept the plaintiffs’ submissions and am prepared to approve their entry into the Proposed Funding Agreement pursuant to s 447(2B) of the Corporations Act. Particular factors which I consider to be relevant in this case are as follows:
(a)The creditors’ claims are very substantial, exceeding $200,000,000. On the information currently available, it appears unlikely that the assets of the Trust will exceed its liabilities and therefore the entirety of the assets of AXF Group are likely to be subject to the indemnity of its former trustee.
(b)Almond J of this Court made a freezing order on 28 February 2020 and extended the order at a further hearing on 3 April 2020. I have reviewed the affidavit material, which in my opinion supports the liquidator’s concerns about the prospects of the assets of the trust being dissipated.
(c)The respondents failed to comply with the order requiring them to file any materials relied on in response to the Freezing Order Application by 20 March 2020. On 3 April 2020, Almond J noted the respondents’ non-compliance, and:
(i)extended the time for compliance by the respondents to 6 April 2020; and
(ii)ordered the respondents to file and serve any affidavit relied upon by them in relation to the Receivership Application by 21 April 2020. As at this date, they still have not complied with this order.
(d)The costs of the liquidation are estimated at $450,000 and the liquidator did not have the funds available to him to finance this litigation and the undertaking without funding from the litigation funder. It appears likely that the liquidator will be subjected to further litigation as creditors associated or friendly with the respondents in the Principal Proceeding attempt to have him removed.
(e)There is no prejudice to the creditors who are unlikely to receive any dividend unless the liquidator maintains the Principal Proceeding.
(f)The secured creditors have declined the liquidator’s invitation to fund the litigation.
(g)The urgency in preparing for the applications in the Principal Proceeding would be a significant obstacle to the liquidator considering the alleged creditors’ claims and obtaining the approval of the Proposed Funding Agreement by a committee of inspection or a resolution of creditors.
(h)There is a strong public policy in encouraging liquidators to prosecute claims which they consider to be meritorious for the purposes of:
(i) benefitting creditors and shareholders; and
(ii)discouraging misconduct in relation to corporations by recovering property from wrongdoers.[4]
[4]State Bank of New South Wales v Brown (2001) 38 ACSR 715, 728 [91] (Hodgson JA); Clairs Keeley v Treacy (2004) 29 WAR 479, 502 [124] (Steytler, Templeman and McKechnie JJ); Ascot Vale Self Storage Pty Ltd (in liq) v Nom de Plume Pty Ltd [2019] VSC 794, [160].
I am not prepared to make the order sought pursuant to s 90-15 of Schedule 2 to the Corporations Act for the following reasons:
(a)I do not consider it necessary or appropriate at this time for such an order to be made without submissions from a contradictor. It may well be appropriate for the liquidator to renew this application before Almond J at an appropriate time in the Principal Proceeding.
(b)I do not currently have sufficient evidence to enable me to give the direction sought. In considering such a direction, I would require further evidence including the advice of counsel and evidence of the viability of the litigation being financed from the net proceeds of the sale of the Property.
(c)The only authority to which I was directed where such a direction was given together with an approval under s 477(2B) of the Corporations Act, was Re Gunns Limited (in liq).[5] In that case the Associate Justice stated that the reasons for making his orders were ‘exposed in the exchanges I had with … senior counsel for the plaintiffs, in his oral submissions at the hearing of this application’.[6] The reasons do not otherwise disclose the facts of that case which made the order appropriate in the circumstances.
[5][2016] VSC 765.
[6]Ibid [6].
Neither am I prepared to make any order under s 30 of the Open Courts Act or to make an order as to confidentiality, except to permit the redacting of the references to legal advice in paragraphs 20 to 27 of the affidavit of Mr Howell sworn 22 April 2020, paragraph 11 of the affidavit of Mr Howell filed 26 April 2020 and paragraph 14 of the plaintiffs’ written outline of submissions dated 26 April 2020.
Section 30 of the Open Courts Act relevantly provides as follows:
(1) Subject to subsections (2) and (3), a court or tribunal—
(a)may order that the whole or any part of a proceeding be heard in closed court or closed tribunal; or
(b)may order that only persons or classes of persons specified by it may be present during the whole or any part of a proceeding.
(2)A court or tribunal other than the Coroners Court may make a closed court order if satisfied as to one or more of the following grounds—
(a)the order is necessary to prevent a real and substantial risk of prejudice to the proper administration of justice that cannot be prevented by other reasonably available means; …
The presumption in favour of an open court is provided in s 28 of the Open Courts Act, which states:
Principle of open justice and hearings in open court
(1)In determining whether to make any order, including a closed court order, a court or tribunal must have regard to the primacy of the principle of open justice and the free communication and disclosure of information which require the hearing of a proceeding in open court.
(2) A court or tribunal should only make a closed court order —
(a)that the whole or any part of a proceeding be heard in closed court or closed tribunal; or
(b)that only specified persons or classes of persons may be present during the whole or any part of a proceeding—
if the specific circumstances of a case make it necessary to override or displace the principle of open justice and the free communication and disclosure of information which require the hearing of a proceeding in open court.
Counsel for the plaintiffs relied on the decision of Barrett J in Re HIH Insurance Ltd, in which his Honour made a closed court confidential order on the basis that the public interest in open justice was outweighed by the public interest in:
(a)the due and beneficial administration of the estates of insolvent companies for the benefit of their creditors by liquidators appointed by, and answerable to, the court; and
(b)the due administration of justice in the proposed litigation being the subject of the relevant funding agreement.[7]
[7][2005] NSWSC 731, [10]-[11].
In reaching a conclusion, his Honour said:
The administration of justice is, in my view, very likely to be prejudiced in two ways by the availability to the potential defendants of (and any public airing of) the information concerning the liquidators’ proceedings that will inevitably be divulged by the adducing of evidence and the making of submissions on the hearing of the s 477(2B) applications. There is a likelihood of a real and negative impact upon the due and orderly conduct of the proposed proceedings themselves, in that the defendants in them will have access to information that, in the ordinary course, a plaintiff is entitled to keep confidential in the plaintiff’s own interests. Any such access would produce an undue distorting effect in relation to the due conduct of those proceedings themselves. There is also a likelihood of a real and negative impact upon the due conduct of the several windings up by the court in the interests of the creditors of the respective companies.[8]
[8]Ibid [12].
On behalf of the plaintiffs, it was submitted that if the orders were not made the plaintiffs would be required to publicly reveal:
(a)the confidential terms of the Proposed Funding Agreement;
(b)details of the benefit to each of the parties to the Proposed Funding Agreement;
(c)information about the plaintiffs’ claims in the Principal Proceeding;
(d)information about legal advice obtained in respect of the Principal Proceeding;
(e)information that is confidential to AXF Group and/or to entities which were formerly its wholly-owned subsidiaries being the subject of the Principal Proceeding; and
(f)confidential and privileged information as to the claims that the plaintiffs may bring in relation to voidable transactions under Part 5.7B of the Corporations Act.
I do not disagree with the principles as set out by Barrett J, but in this case, with the exclusion of the privileged information which is to be redacted, much of the material sought to be protected is publicly available through the court file in the Principal Proceeding, and there is no reason why the terms of the Proposed Funding Agreement should not be made available to each of the creditors of AXF Group.
I will therefore order that pursuant to s 477(2B) of the Corporations Act, Mr Howell, in his capacity as liquidator of AXF Group, has approval to enter into and cause AXF Group to enter into, a litigation funding agreement with Claims Funding Australia Pty Ltd (ACN 158 551 967) as trustee for the Claims Funding Discretionary Trust (‘the Funder’), substantially in the form as provided to the Court in this proceeding (‘the Funding Agreement’).
The plaintiffs are entitled to uplift from the Court file:
(a)the affidavit of Mr Howell sworn 22 April 2020 for the purposes of redacting paragraphs 20 to 27 of that document;
(b)the unsworn affidavit of Mr Howell filed 26 April 2020 for the purposes of redacting paragraph 11 of that document; and
(c)their written outline of submissions dated 26 April 2020 for the purposes of redacting paragraph 14 of that document;
and are to re-file such documents in their redacted forms as soon as reasonably practicable.
By 7 May 2020, the plaintiffs are to write to the creditors of AXF Group notifying them of:
(a)the fact of the entry into a funding agreement for the purposes of funding this proceeding (‘the Approval Application’) and Supreme Court proceeding S ECI 2020 00991 (‘Primary Proceeding’);
(b) the key terms of the Funding Agreement, being that:
(vii) the Funder will fund the costs of the Approval Application and the Primary Proceeding;
(viii) the Funder will indemnify the plaintiffs against any adverse costs order in the Primary Proceeding;
(ix) the Funder will indemnify the first plaintiff up to a specified amount in respect of his undertaking as to damages given to the Court at the hearing of the application for a freezing order made and granted on 28 February 2020 in the Primary Proceeding;
(x) upon receipt of any amount realised upon a sale (or other disposition) of the Trust Assets or received on account of any settlement, judgment or order in the Primary Proceeding, including any interest and any amounts received on account of costs and/or disbursements, the Funder is entitled to:
·a refund of the funded costs already paid by it; and
·15% of the net resolution sum (being the final sum realised as set out in subparagraph (iv) above) less the Funder’s costs (as set out in the immediately preceding point).
Mr Howell’s costs of this application are costs in the winding up of AXF Group and may be paid out of the Trust Assets realised by AXF Group.
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