Bakewell v Anchorage Capital Master Offshore Ltd

1. [1]

   BELL P: This is an application for leave to appeal from orders made by Ball J on 9 April 2019 in which his Honour granted Anchorage Capital Master Offshore Ltd (Anchorage):

2. [2]

   As the primary judge explained, the claims brought or sought to be brought in the proceedings arose out of four facility agreements in materially the same terms between Arrium Limited (subject to deed of company arrangement) (Arrium) and certain of its subsidiaries on the one hand and a financier (or syndicate of financiers) on the other. Mr Bakewell was the Chief Financial Officer of the Arrium Group and each of the existing defendants to the proceedings (Ms Sparkes, Ms Verawati, Ms Hall and Ms Lieu) were officers within Group Treasury of the Arrium Group and Authorised Officers for the purposes of issuing Drawdown and Rollover Notices under the various facility agreements.

3. [3]

   The first agreement was a Bi-Lateral Facility Agreement dated 13 June 2014 between OS Finance Pty Ltd (formerly Arrium Finance Pty Ltd) (subject to a deed of company arrangement) (Arrium Finance), AIOH Pty Ltd (formerly Arrium Iron Ore Holdings Pty Ltd) (subject to a deed of company arrangement) (Arrium Iron Ore) as borrowers, and Arrium as parent and Morgan Stanley Bank, N.A. as lender (the Morgan Stanley Facility Agreement). The second was a Syndicated Facility Agreement dated 31 May 2013 between, amongst others, Arrium Finance and Arrium Iron Ore as borrowers, Arrium as parent and National Australia Bank Limited (NAB) as agent for the lending syndicate (the 2013 SFA). The third was a Syndicated Facility Agreement dated 16 June 2014 between, amongst others, Arrium Finance, Arrium Iron Ore and AltaSteel Ltd (AltaSteel) as borrowers, Arrium as parent and NAB again as agent (the 2014 SFA). The fourth was a Syndicated Facility Agreement dated 21 May 2015 between, amongst others, Arrium Finance, Arrium Iron Ore and AltaSteel as borrowers, Arrium as parent and NAB again as agent (the 2015 SFA).

4. [4]

   In April 2016, certain members of the Arrium Group were placed into voluntary administration. At the time of the voluntary administration, according to the ACLS, lenders under the facility agreements were owed approximately $2.8 billion plus interest.

5. [5]

   Mr Bakewell, in his capacity as proposed fifth defendant, appeared before the primary judge and, together with the existing defendants to the proceedings, opposed leave to amend being granted on the basis that the plaintiffs had no standing to bring the claims sought to be introduced against them by reason of the fact that the plaintiffs were assignees of bare causes of action and that, as such, the assignments were invalid and ineffective, savouring of maintenance: cf Glegg v Bromley [1912] 3 KB 474 at 489. In other words, the application for leave to amend was resisted on the basis that the new claims were bound to fail.

6. [6]

   As the primary judge explained, by a number of assignments, certain of the debts owed to the lenders under the four facility agreements (the Par Lenders and each individually a Par Lender) were assigned to the plaintiffs, or, in the case of the Morgan Stanley Facility Agreement, novated to the plaintiffs. In some cases, the assignments were made through one or more parties unconnected with the Par Lenders or the plaintiffs. The assignments were in substantially the same terms. These are set out more fully later in these reasons.

7. [7]

   The essence of the argument before the primary judge was:

8. [8]

   The first of the recognised exceptions identified in Trendtex was said to be where the assignment was of a property right or interest and the cause of action was ancillary to that right or interest. The second exception was where the assignee had a substantial or genuine commercial interest in taking the assignment for its own benefit beyond the cause of action itself. The primary judge accepted that it was plain from Trendtex that, where there had been a bare assignment of a cause of action, the assignment would not be valid unless the assignee had a pre-existing genuine commercial interest in the outcome of the claim being assigned. In the instant case, there was said to be no pre-existing genuine commercial interest.

9. [9]

   The primary judge held, however, (at [33]) that it was at least open on the basis of Equuscorp and the decision of Gault J in First City Corporation v Downsview Nominees Ltd [1989] 3 NZLR 710 (First City Corporation) to argue that Trendtex not only modified the test to be applied where there was a bare assignment of a cause of action, but also where the assignment occurred in connection with the assignment of property rights; and that it was appropriate in those cases to ask whether the assignee had a legitimate commercial interest in taking an assignment of both sets of rights. His Honour concluded at [34] that:

10. [10]

    His Honour reasoned (at [35]) that it was no answer that the assignment of a bare cause of action was invalid unless the assignee had a pre-existing genuine commercial interest in the cause of action, since what had occurred in the present case was the assignment of causes of action in connection with the assignment of debts and associated contractual rights.

11. [11]

    Before turning to consider the grounds upon which Mr Bakewell seeks to challenge the decision at first instance and the merits of those grounds, it is necessary to set out in a little more detail the terms of the facility agreements, the terms of the assignments and the nature of the claims made in the ACLS, and, in particular, those made against Mr Bakewell.

The facility agreements

1. [12]

   As noted above, the four facility agreements were relevantly in the same terms. As the primary judge explained, under cl 6 of the Morgan Stanley Facility Agreement, cl 8 of the 2013 SFA and cl 8.1 of the 2014 and 2015 SFAs, where a borrower wished to make a “Drawing” (including a “Rollover Drawing”) to drawdown funds under the agreement, or, in the case of a “Rollover Drawing”, to rollover the maturity date on which an existing drawing was due to be repaid, it was required to issue a “Drawdown Notice” (which, in the case of a rollover was sometimes referred to as a “Rollover Notice”) which was:

2. [13]

   The form set out in Sch 3 required that the notice be signed by two “Authorised Officers”. All of the Drawdown Notices relevant to the proceedings were signed by two of the defendants named in the original Commercial List Statement. None was signed by Mr Bakewell.

3. [14]

   The representations and warranties required to be made in the Drawdown Notices were set out in cl 14.1 of the Morgan Stanley Facility Agreement and cl 18.1 of each of the SFAs. Relevantly, cl 14.1 of the Morgan Stanley Facility Agreement stated:

4. [15]

   Clauses 18.1(i) and 18.1(k) of each of the SFAs contained identical warranties except that the 2013 SFA contained the following representation in clause 18.1(i):

5. [16]

   Clause 14.3 of the Morgan Stanley Facility Agreement and cl 18.3 of the SFAs relevantly provided that each of the representations referred to above “is repeated, with reference to the facts and circumstances existing at the time on each Drawdown Date and on the date on which a Certificate of Compliance is delivered …”.

6. [17]

   As the primary judge explained, the effect of these provisions was that each time a borrower issued a Drawdown Notice (including a Rollover Notice) it was taken to have represented that as at the date of the notice there had been no material change in the Group’s financial position (in the sense stated in the relevant representation) and that no Event of Default had occurred or continued unremedied. Those representations were specifically recorded in the Drawdown Notices in these terms:

7. [18]

   As shall be seen, the claims against the defendants were largely founded upon or arise out of the representations made at the time of drawing down on the various facilities.

The assignments

1. [19]

   As noted in [6] above, certain of the debts owed to the lenders under the four facility agreements were assigned to the plaintiffs, and the assignments were in substantially the same terms.

2. [20]

   The primary judge gave as an example an assignment of debts under the 2015 SFA. That assignment was made in accordance with a document headed “LMA Assignment (Distressed/Claims)”. That document provides:

3. [21]

   The schedule set out various details including details of the “Credit Agreement”, and details of the “Assigned Claims”.

4. [22]

   Clause 2.2 of the “Agreed Terms” provided:

5. [23]

   “Assigned Assets” was defined to mean:

6. [24]

   Clause 5 of the Standard Terms, which were incorporated in the assignment provides:

7. [25]

   “Ancillary Rights and Claims” was defined as:

8. [26]

   The primary judge also noted that it was common ground that the plaintiffs received substantial dividends as assignees in respect of debts that were assigned to them.

Amended Commercial List Statement

1. [27]

   The ACLS comprises some 249 paragraphs which, including a detailed schedule, runs for some 265 pages. Part A of the ACLS sets out in broad form the “Nature of Dispute”. For immediate purposes, it supplies a convenient overview of the claim and Mr Bakewell’s role in it. They include the following:

2. [28]

   Paragraph 73 of the ACLS pleads that:

3. [29]

   In addition to the claim in negligence it is alleged in [234] of the ACLS that Mr Bakewell:

4. [30]

   Paragraphs 237E-H and 237J of the ACLS are of particular significance for present purposes. They involve a claim advanced by DB in its capacity as a Par Lender under the 2014 Facility. In short, it is alleged that the Drawdown Representations made variously by the first to fourth defendants at the direction of Mr Bakewell were misleading or deceptive and involved contraventions of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), the Corporations Act 2001 (Cth) and the Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law (ACL).

5. [31]

   Paragraph 237H of the ACLS pleads that Mr Bakewell was involved in the Arrium Entities’ contraventions of the ASIC Act, the Corporations Act and the ACL pleaded in [237F] above, in that Bakewell:

6. [32]

   The reference to DB Sydney in the paragraph of the ACLS is a reference to the Sydney office of DB, and does not represent a separate legal entity. Particulars of this allegation are subscribed to [237H] which make reference to numerous other paragraphs of the ACLS.

7. [33]

   In addition to these allegations, which pertain only to DB’s claim in respect of the drawdown of the 2014 SFA, other claims against Mr Bakewell are made both by DB and the other plaintiffs in their capacity as assignees of claims from other Par Lenders under the various facilities. Each of the assignments was pleaded in the ACLS. A defence that has been filed by Mr Bakewell subsequent to the primary judge’s decision has denied the validity of the assignments.

Application for leave to appeal

1. [34]

   The application for leave to appeal is brought only by Mr Bakewell.

2. [35]

   In his draft Notice of Appeal, Mr Bakewell contends that the primary judge erred in finding that it was arguable that:

3. [36]

   In making the application for leave to appeal, senior counsel for Mr Bakewell recognised not only that he needed to surmount the high hurdle presented by General Steel (see also Spencer v The Commonwealth (2010) 241 CLR 118; [2010] HCA 28 at [25] (Spencer); Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 at 275; [2006] HCA 27; Agar v Hyde (2000) 201 CLR 552 at 575-576; [2000] HCA 41) but also the fact that the decision from which leave to appeal was sought was interlocutory in nature involving a matter of practice and procedure (as to which, see PPK Willoughby v Baird [2019] NSWCA 48 at [3]–[6] and the cases there referred to).

4. [37]

   As will be explained in more detail below, the applicant will also need to overcome the observations of Kirby P (as he then was) in Wickstead v Browne (1992) 30 NSWLR 1 at 5–7; [1992] NSWCA 272 as endorsed on appeal by Deane, Toohey and Gaudron JJ in Wickstead v Browne (High Court, 30 April 1993, unrep).

5. [38]

   This decision of the High Court was unusual in that it was given (with the consent of the parties) at the conclusion of the hearing of an application for special leave to appeal. Special leave was granted and the appeal was allowed on the spot. In very brief reasons which are noted in (1993) 10 LEG. Rep. p SL2 but otherwise are only available in the transcript of the special leave application, the Court said:

6. [39]

   In his dissenting judgment in the Court of Appeal, Kirby P had refused to strike out a claim in negligence based upon a duty of care that the majority (Handley and Cripps JJA) considered was not arguable. He did so in circumstances where claims made under the Companies (New South Wales) Code and in equity for breach of trust and breach of fiduciary duty were still to proceed to trial.

7. [40]

   After acknowledging that, in complex litigation, there are distinct advantages in cutting away hopeless causes of action which may distract attention from viable claims, prolong expensive litigation and give rise to error in the conduct of the trial, as well as acknowledging the force of the considerations by reference to which Handley and Cripps JJA would have struck out the claim in negligence, the President identified five reasons for his decision not to strike out or summarily dismiss the claim in negligence. The first two of these grounds were as follows:

8. [41]

   The third of the President’s reasons was also significant. His Honour emphasised the fluid nature of the law of negligence at the time of his judgment, particularly in relation to claims for pure economic loss, and questioned whether, in light of modern restatements of the law of negligence, a 1935 decision of the Full Court of the Supreme Court of New South Wales upon which the majority had relied still represented good law. In other words, as an intermediate appellate court, his Honour did not see the state of the law of negligence as set in stone or immune from incremental development. This was a matter tending against summary dismissal, especially bearing in mind the other matters to which the President drew attention, as set out above.

9. [42]

   As shall be seen in the present case, just like the fluid nature of the law of negligence at least with regard to claims for pure economic loss at the time of the decision in Wickstead v Browne, the public policy which underpinned the historical prohibition on assignment of bare choses in action, associated with notions of maintenance and champerty, cannot be regarded as settled or static in 2019. In other words, the principle Mr Bakewell sought to invoke to terminate at the outset and summarily the prosecution of the assigned claims against him could not be regarded, from the perspective of an intermediate appellate court, let alone a court at first instance, as completely set in stone and impervious to development, modification or even ultimate elimination.

10. [43]

    Kirby P’s observations in Wickstead v Browne must also be read in conjunction with the following passage from the joint judgment of French CJ and Gummow J in Spencer at [25] where their Honours said:

11. [44]

    It is not without some irony that the incremental evolution and development of the common law is well illustrated by the relaxation of the once absolute prohibition on the assignment of bare causes of action. This liberalisation of the common law’s approach was noted by Lord Roskill in his leading decision in Trendtex itself (see at 702-703). There his Lordship noted, by reference to Scrutton LJ’s decision in Ellis v Torrington [1920] 1 KB 399, that the assignment of a cause of action which was “incidental” to the acquisition of a property right by assignment was valid. His Lordship observed that, on his reading of the cases, it was “not necessary for the assignee always to show a property right to support his assignment”. Whilst Lord Roskill was not prepared to go as far as the Master of the Rolls in the Court of Appeal and declare that “[t]he old saying that you cannot assign a ‘bare right to litigate’ is gone”, he did say, in a passage that was quoted by the plurality in Equuscorp at [51] that:

12. [45]

    Equuscorp’s embrace of Trendtex can also be seen as representing a significant development of the common law of Australia in light of the High Court’s earlier decision in Poulton v The Commonwealth (1953) 89 CLR 540 at 602; [1953] HCA 101.

13. [46]

    Another highly relevant example of the evolution of the law for present purposes relates to the changing attitudes to maintenance and champerty, surveyed by Gummow, Hayne and Crennan JJ in Campbells Cash & Carry Pty Ltd v Fostif Pty Limited (2006) 229 CLR 386; [2006] HCA 41 at [66]-[82] (Campbells Cash & Carry). The relevance of this for present purposes is considered further at [50]-[51] and [70]-[71] below.

Analysis

1. [47]

   In my opinion, leave to appeal ought to be refused. This is for three main reasons.

2. [48]

   First, the present case is practically indistinguishable from Wickstead v Browne and the reasoning of Kirby P, as endorsed in the High Court, commends a similar outcome to that which ultimately prevailed in that case.

3. [49]

   Secondly, I consider, consistently with the decision of the primary judge, that, it is at the very least arguable within the scope of existing authority that the assignments were valid and that, as such, the basis of Mr Bakewell’s opposition to the amendment (and the basis reflected in the draft grounds of appeal in this Court) was not and is not made good.

4. [50]

   Thirdly, in light of the abolition of the tort and offence of maintenance and champerty in recent decades, what the plurality in Equuscorp described at [50] as “[t]he attenuated role of maintenance and champerty” and decisions such as Campbells Cash & Carry at [66]-[82], the public policy underpinnings of the prohibition against the assignment of bare causes of action cannot be regarded as secure or at least not so secure as to justify summary dismissal on the basis of existing authority.

5. [51]

   The proper extent of the prohibition on the assignment of bare causes of action cannot, in my opinion, be regarded as settled beyond argument. Indeed, the public policy case for the continued existence of the prohibition at all may be open to argument and critical appraisal. These are matters that are not, in my opinion, appropriately determined on a summary interlocutory application.

6. [52]

   I elaborate on each of these matters in more detail below noting that, in relation to the second and third reasons, what is relevant is the arguability of the claims and not their ultimate correctness.

7. [53]

   In [37]−[43] above, I have set out key parts of the judgment of Kirby P in Wickstead v Browne which were endorsed by the High Court in its short-form judgment to which I have also referred.

8. [54]

   In my opinion, the configuration of the claims in the present case is on all fours with Wickstead v Browne in that there are claims against Mr Bakewell, namely those brought against him by DB in negligence and for knowing involvement in misleading or deceptive conduct, that are not affected by the arguments relating to the validity of the assignment of causes of action to the other three plaintiffs and, as to part of its claim, DB. In other words, unless those non-assigned claims were severed from the proceedings, Mr Bakewell will be an active defendant in the proceedings in the Commercial List just as Mr Browne had to defend claims against himself under the Companies Code and for breach of fiduciary duty in any event in the proceedings in which the contested negligence claim was sought to be raised in Wickstead v Browne.

9. [55]

   Moreover, insofar as DB has claims against Mr Bakewell which derive from various assignments, because of its existing commercial interest in suing Mr Bakewell in its capacity as a Par Lender, the assigned claims sought to be pressed by DB against Mr Bakewell appear to fall squarely within Trendtex and Equuscorp. That interest would appear to constitute a pre-existing commercial interest which, in Lord Roskill’s words in Trendtex at 703, could be “support[ed] and enlarge[d]” by the taking of an assignment of a cause of action. In other words, at least prima facie, the argument that Mr Bakewell seeks to make in relation to the assigned claims, namely that they do not fall within either of the recognised exceptions articulated in Trendtex and Equuscorp, does not appear to apply to DB in its capacity as an assignee.

10. [56]

    Even if this were not so, there would be no case for severing the non-assigned claims made against Mr Bakewell from those made against the other defendants in the proceedings. This is so for a number of reasons.

11. [57]

    First, it is plain from the pleading that the claims against Mr Bakewell and his role in the Arrium Group were such that, at least on the face of the ACLS, his role will be of central significance in the litigation. The Bakewell Direction to which I have referred in [28] above highlights this point. Put conversely, the role of Mr Bakewell was not discrete nor, on the face of the ACLS, limited.

12. [58]

    Further to sever or hive off the claim against Mr Bakewell would make no sense in terms of efficient case management and the requirements of s 56 of the Civil Procedure Act 2005 (NSW). Further, it would in my opinion be inconsistent with s 63 of the Supreme Court Act 1970 (NSW) which provides as follows:

13. [59]

    There was little that senior counsel for Mr Bakewell was able to put in argument to answer these considerations. Counsel accepted that Mr Bakewell could not object to the non-assigned claims sought to be made against him by DB being pursued and did not suggest a basis upon which, on the existing state of authority, Mr Bakewell could contend that the claims DB had assigned to it were invalidly assigned. Once this is accepted, refusing leave to the other plaintiffs to amend the ACLS to bring assigned claims against Mr Bakewell would not only have been undesirable for all of the reasons advanced by Kirby P in Wickstead v Browne but it would have flown in the face of s 63 of the Supreme Court Act and the common sense that underpins that important provision.

14. [60]

    Although the primary judge does not appear to have based his reasoning for allowing the amendments to the ACLS on this basis, it provides, in my opinion, a powerful additional justification for that result and also dictates the refusal of leave to appeal. Even if it were unarguable that the assignments other than those to DB were valid (and for the reasons advanced below, I do not consider that it is), to have acceded to the orders sought both in the Amended Notice of Motion before the primary judge and in the draft Notice of Appeal in this Court would have been to require DB to bring separate proceedings against Mr Bakewell. That would have resulted in not only added expense to DB but, more importantly, an unnecessary drain on judicial resources through the need for two sets of proceedings. It would also have introduced the added spectre of potentially inconsistent decisions on identical sets of facts, an outcome which courts are astute to avoid for reasons that are obvious: see Incitec Ltd v Alkimos Shipping Corp (2004) 138 FCR 496; [2004] FCA 698 at [53]; Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd [2019] NSWCA 61; 367 ALR 146 at [81]-[82].

15. [61]

    Senior counsel’s faint suggestion that these problems could be avoided if separate proceedings against Mr Bakewell were heard together with the existing proceedings against the other defendants highlighted the extreme lack of utility of the opposition to the grant of leave to amend the Commercial List Statement and the addition of Mr Bakewell as a defendant to the existing Commercial List proceedings.

16. [62]

    Much of Mr Bakewell’s argument focused on the primary judge’s interpretation of the plurality judgment of French CJ, Crennan and Kiefel JJ in Equuscorp and, in particular, [53] of those reasons where their Honours said that:

17. [63]

    Mr Bakewell’s argument was that the final sentence of this passage meant that the plurality treated Equuscorp’s claim as falling within the second of the exceptions, and that that exception only applied to cases of pre-existing commercial interests. This, he submitted, had been expressly so held by the Queensland Court of Appeal in Workcover Queensland v Amaca Pty Ltd [2012] 2 Qd R 276; [2012] QCA 240 (Amaca) even though neither Trendtex nor Equuscorp expressly stated that for a commercial interest to sustain the assignment of a bare cause of action, it must pre-date the impugned assignment. He also relied upon this Court’s decision in Dover v Lewkovitz [2013] NSWCA 452 (Dover) for the proposition any commercial interest must pre-exist the assignment. Senior counsel for Mr Bakewell further submitted in the course of oral argument that the notion that a legitimate commercial interest is sufficient to satisfy the second exception only where it is pre-existing represents “a critical distinction”. He continued: “[o]ne can obtain a legitimate commercial interest just by taking the assignment, but one thing that is absolutely clear is that is not sufficient for the second exception.”

18. [64]

    It was then asserted that none of the assignees had a pre-existing genuine commercial interest in the present case. Whilst that may have been true for the first three plaintiffs, as I have demonstrated above, it was not true for DB which took its assignments as a party who had a pre-existing commercial interest in bringing proceedings against the defendants in its capacity as one of the original Par Lenders.

19. [65]

    Senior counsel for the respondents emphasised the second sentence of the passage from [53] of the plurality’s decision in Equuscorp extracted at [62] above and contended that what was assigned in the present case was far more than a “bare cause of action” and that the transaction in which the causes of action had been assigned formed part of a larger commercial transaction and that the causes of action against the defendants which had been assigned were “associated” with that larger transaction.

20. [66]

    He emphasised that there was a nexus between the debts and causes of action which had been assigned, noting that the representations upon which the various assigned claims were ultimately founded formed a critical part of the process by which moneys were drawn down under the various facilities and the debts thereby created. This was the point that the primary judge had made in [34] of his reasons, reproduced at [9] above.

21. [67]

    In this context, senior counsel for the respondents emphasised that terms variously used in the case law in this area to identify a sufficient nexus with an interest, such as “associated”, “ancillary”, “closely connected”, “linked” and “incidental”, were all elastic and a matter for judgment in individual cases. He could have called in aid Professor Tolhurst’s astute observation that “[g]iven that restitutionary claims for ineffective contracts are separate from any claim under the contract, [Equuscorp or at least the decision of the plurality] appears to signal some relaxation of what constitutes a sufficient interest”: G Tolhurst The Assignment of Contractual Rights (2nd ed, 2018, Hart) at 204.

22. [68]

    Senior counsel for the respondents also put in issue the correctness of the Queensland Court of Appeal’s decision in Amaca insofar as it stated that any commercial interest needed to predate the assignment of the cause of action. He pointed out that this was nowhere expressly stated in either Trendtex or Equuscorp, was not the point in issue in Dover (which was whether a commercial interest had to be an enforceable legal right) and that, if Amaca stood in the way of his argument, he wished to contend that it was wrong.

23. [69]

    He also made the point, which at least has a superficial attraction, that were a pre-existing commercial interest required, a sophisticated transaction such as that by reference to which the plaintiffs acquired their rights of action in the present case could be readily structured such that debts were assigned immediately prior to the assignment of the causes of action. This, he submitted, highlighted the artificiality of the distinction between genuine commercial interests and pre-existing commercial interests.

24. [70]

    The arguments of the respondents set out above were also supported by the decision of Gault J in First City Corporation which had been relied upon by the primary judge at [32] of his reasons. What Gault J said in that case (at 757) was as follows:

25. [71]

    As I have noted in [52] above, the question for this Court is not which of the arguments canvassed above was correct but whether or not those advanced by the respondents were arguable. In my opinion, there was no doubt that they were and that the primary judge was correct to allow the amendments. To the extent that Mr Bakewell took issue with the primary judge’s understanding of Equuscorp, expressed in an interlocutory decision relating to an amendment application, he will have ample opportunity to make detailed submissions as to the true legal position for which he contends at a final hearing.

26. [72]

    In this context, I would add that the concept of a “genuine commercial interest” as found in authorities following Trendtex is a mixed question of fact and law, completely unsuited for determination on a summary basis. As Bergin J (as the former Chief Judge then was) observed in Whyked Pty Limited trading as Ezysend v Yahoo Australia and New Zealand Pty Limited (Whyked) [2006] NSWSC 650 at [24] and [26], “[t]he question of what a ‘genuine commercial interest’ is will depend upon the facts and circumstances of each case” and the question of whether there is a genuine commercial interest “is a matter that should be decided at trial when all the evidence is on. It is not a matter that should be decided on a summary application.”

27. [73]

    The third of my reasons for refusing leave, closely allied to the second, is that the public policy foundations upon which the principle that Mr Bakewell relies for his argument are, at best fluid and highly contestable for the reasons referred to at [42], [50]–[51] above.

28. [74]

    Senior counsel for the respondents signalled an intention, if necessary, to make a full blown attack on the continuing justification for the principle against the assignment of “bare causes of action” (although he was astute not to accept this characterisation of the transaction by which his clients had taken their assignments).

29. [75]

    A similar attack was made on the traditional hostility to litigation funding in Campbell’s Cash & Carry by critically examining the public policy underpinnings that had informed that traditional antipathy. In this context, Lord Phillips’s observation in Regina (Factortame Ltd and others) v Secretary of State for Transport, Local Government and the Regions (No 8) [2003] QB 381 at [36] that “[w]here the law expressly restricts the circumstances in which agreements in support of litigation are lawful, this provides a powerful indication of the limits of public policy in analogous situations” must apply equally where, as in Campbells Cash & Carry, there has been a relaxation of such restrictions.

30. [76]

    Not only must contemporary public policy be identified and articulated (which may require the receipt of evidence) but the vitality of the principle against assignment of a bare cause of action and its public policy justification may require the investigation of all aspects of a transaction “to determine whether there is such intermeddling or stirring up of litigation without a sufficient interest or legal justification”: G Tolhurst The Assignment of Contractual Rights (2nd ed, 2018, Hart) at 212; see also Whyked noted at [72] above.

Conclusion

1. [77]

   For the above reasons, I would refuse leave to appeal with costs.

2. [78]

   MACFARLAN JA: I agree with Bell P.

3. [79]

   WHITE JA: I agree with Bell P.