Re Daniel Efrat Consulting Services Pty Ltd (receiver appointed) (in liq)

In the case of Re Daniel Efrat Consulting Services Pty Ltd (Receiver Appointed) (In Liquidation), the respondent, acting as the receiver for the company in liquidation, sought a direction from the Court to enable the assignment of a cause of action to FAI General Insurance Company Limited. The cause of action in question arose from an alleged failure by Spectron Security Print Pty Ltd to fulfil financial obligations under a sale and consultancy agreement with the now-liquidated company. The dispute centred around whether the receiver had the legal authority to assign the company's cause of action to FAI under the terms of the agreement, and if such an assignment would contravene any legal principles or statutes.

The central legal issue before the Court was whether the receiver, in his capacity as such, had the power to assign the company's cause of action to FAI General Insurance Company Limited. This involved examining the nature of the proposed agreement, which differed from previous "insurance agreements" considered in other cases, and determining if it amounted to maintenance or champerty, which would render it illegal and void. Additionally, the Court had to consider whether the abolition of the common law crimes and torts of maintenance and champerty would affect the enforceability of the agreement.

The Court determined that the receiver had the authority to enter into the agreement with FAI, provided the assignment of the cause of action did not constitute maintenance or champerty. The Court found that the agreement was not an insurance agreement but rather an assignment of the cause of action. It further held that the abolition of the common law crimes and torts of maintenance and champerty did not affect the legality of contracts that would have been void before the abolition on the grounds of being in aid of maintenance or champerty. Consequently, the Court concluded that the agreement was not illegal and void as contrary to public policy, and the receiver had the power to assign the cause of action to FAI.

The Court granted the direction sought by the respondent, allowing the receiver to assign the company's cause of action to FAI General Insurance Company Limited under the terms of the agreement. This decision facilitated the pursuit of the claim against Spectron Security Print Pty Ltd, with the potential to secure a return to the company's creditors.