A liquidator may without impropriety enter into a litigation funding agreement and be directed under it to conduct an examination under Part 5.9 of the Corporations Act 2001; those facts alone do not amount to an improper purpose. However, where an action has been on foot for a substantial period and is well advanced toward trial, and the timing of the examination application coincides with a litigation funding arrangement, an arguable inference of improper purpose (dress rehearsal for cross-examination or destruction of credit) may be drawn, warranting disclosure of the liquidator's supporting affidavit.
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