Re Gerard Cassegrain & Co Pty Ltd (in liq)

The liquidators of Gerard Cassegrain & Co Pty Ltd sought approval from the court to enter into a litigation funding agreement. The liquidators proposed that the agreement would provide funding for the company's proceedings against its former directors and their solicitor, which related to alleged breaches of director duties and professional negligence. The court was required to determine whether the liquidators' entry into the agreement was a proper exercise of their power and whether it was appropriate to give a direction under the Corporations Act to protect the liquidators from a potential claim of breach of duty in respect of the funding agreement.

The court considered the nature and scope of the liquidators' powers under the Corporations Act and the circumstances of the case. The court found that the liquidators had acted within their powers by seeking to maximise the return for creditors by entering into the agreement. The court also considered whether it was appropriate to give a direction under the Corporations Act to protect the liquidators from a potential claim of breach of duty in respect of the funding agreement. The court found that it was appropriate to give such a direction, as the liquidators had acted in good faith and in the best interests of the company's creditors.

The court held that the liquidators' entry into the litigation funding agreement was a proper exercise of their power and that it was appropriate to give a direction under the Corporations Act to protect the liquidators from a potential claim of breach of duty in respect of the funding agreement. The court granted the liquidators' orders sought under s 477(2B) and gave a direction under s 479(3) of the Corporations Act.