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[2019] QSC 118
Supreme Court of Queensland
2019-05-14
Crow J
Original judgment source is linked above.
and posted in terms of Annexure A on the website of the plaintiffs' solicitors on a page accessible via a link prominently displayed on the homepage dedicated to this proceeding.
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SEPARATE DECISION OR DETERMINATION - GENERALLY - where applicants seek a declaration that the relevant funding agreements are not by reason of maintenance, champerty or public policy unenforceable - where applicants seek an order stating a case to the Court of Appeal pursuant to rule 483 of the Uniform Civil Procedure Rules - where applicants alternatively seek a declaration pursuant to s 103ZA of the Civil Proceedings Act or the inherent jurisdiction of the Court that the relevant funding agreements are not by reason of maintenance, champerty or public policy unenforceable - where first respondent argues that that the factual basis underpinning the questions is uncertain - where first respondent argues a determination must be left to when all parties who have an interest in the subject matter are before the court - whether it is inappropriate for an order to be made to state a case to the Court of Appeal - whether an order should be made to hear the funding application in the trial division
Uniform Civil Procedure Rules 1999 (Qld) r 483
Civil Proceedings Act 2011 (Qld) s 103T, s 103U, s 103ZA
Brewster v BMW Australia Ltd [2019] NSWCA 35
Westpac Banking Corporation v Lenthall [2019] FCAFC 34
Land and Resources Tribunal v Schmidt [2005] QCA 195; [2006] 1 Qd R 161
Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41; (2006) 229 CLR 386
British Cash and Parcel Conveyors Ltd v Lamson Store Service Co Ltd [1908] 1 KB 1006
Clairs Keeley (a Firm) v Treacy [2003] WASCA 299; (2003) 28 WAR 139
Clairs Keeley (a Firm) v Treacy (2004) 29 WAR 479
Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83; [2005] 63 NSWLR 203
Makhoul v Barnes (1995) 60 FCR 572
Castillon v P & O Ports Ltd (No 2) [2007] QCA 364; [2008] 2 Qd R 219
JD McKenna QC and SB Hooper for the first respondent
[1] On 1 April 2019 the plaintiffs filed an application seeking the following orders:
(a) until the determination of this application (including any stated case, or appeal from such determination); alternatively
(a) the agreement titled "Representative Proceeding Funding Agreement, Representative, The 2017 Gladstone Fisheries Scheme" between LCM, Murphy Operator Pty Ltd, Tobari Pty Ltd and SPW Ventures Pty Ltd is not, by reason of maintenance, champerty or public policy, unenforceable; further or alternatively
(b) the agreements titled "Representative Proceeding Funding Agreement, Member, The 2017 Gladstone Fisheries Scheme" between LCM and funded group members are not, by reason of maintenance, champerty or public policy, unenforceable.
(a) such legal costs incurred in the investigation, preparation and prosecution of the claims as may be approved by the Court, plus any applicable GST; and
(b) thirty-five per centum (35%) of the said Recoveries, or such other proportion as the Court may allow in connection with the settlement or judgment as the case may be.
(a) for notices sent to group members' postal or email addresses, and the website of the plaintiffs' solicitors - Annexure C to these Orders;
(b) for newspaper notices - Annexure D to these Orders.
(a) in respect of group members who have already registered with the plaintiff's solicitors - to be sent in the terms of Annexure C by email to the registered email address, alternatively by pre-paid ordinary post to the registered postal address, of the group member;
(b) for all group members - to be published in the terms of Annexure D in one weekday edition of The Australian newspaper, and published in one edition of each of:
and posted in terms of Annexure D on the website of the plaintiffs' solicitors on a page accessible via a link prominently displayed on the homepage dedicated to this proceeding.
[2] The application was listed for hearing in Brisbane on 5 April 2019 which resulted in a set of directions for a further hearing date in Rockhampton on 26 April 2019. At the commencement of the application LCM Operations Pty Ltd (LCM), appeared and consented to an order that it be joined as a respondent to the application filed 1 April 2019. Orders were therefore made joining LCM as a respondent to the application. LCM supported the applicants' submission on all issues which in summary was to seek to have a case stated to the Court of Appeal in respect of the legitimacy of the funding agreements and the common fund order. LCM joins in the applicants' submissions that it is appropriate to state a case to the Court of Appeal in light of the importance and complexity of the issues that arise and the utility of that procedure as recently demonstrated in Brewster v BMW Australia Ltd.[1]
[3] The first respondent, Gladstone Ports Corporation Limited (GPC) opposes the stating of the case to the Court of Appeal and seeks orders that the issues be determined as an ordinary application. The applicants and the first respondent jointly propose notices to group members with the object that any group member who wishes to appear and argue in respect to the validity of the funding agreements or the common fund order will have an opportunity to put submissions forward. That is entirely appropriate as they are affected parties. The defendants seek the following orders:
Dismissal of paragraphs 1-5 of the Funding Application
(a) names LCM Operations Pty Ltd (LCM) as a respondent to the application;
(b) deletes paragraphs 1 to 5 and 8 to 11 of the application (including deletion of Annexures A, C and D).
(a) for notices sent to group members' postal or email addresses, and the website of the plaintiffs' solicitors - Annexure A to these Orders;
(b) for newspaper notices - Annexure B to these Orders.
(a) in respect of group members who have already registered with the plaintiff's solicitors - to be sent in the terms of Annexure A by email to the registered email address, alternatively by pre-paid ordinary post to the registered postal address, of the group member;
(b) for all group members - to be published in terms of Annexure B in one weekday edition of The Australian Newspaper, and published in one edition of each of:
and posted in the terms of Annexure A on the website of the plaintiffs' solicitors on a page accessible via a link prominently displayed on the homepage dedicated to this proceeding.
(a) the plaintiffs file and serve on the defendant a Points of Claim document which identifies the factual and legal issues they contend are relevant to the court's determination of paragraphs 6 and 7 of the Funding Application;
(b) LCM file and serve on the defendant a Points of Claim document which identifies the factual and legal issues it contends are relevant to the court's determination of paragraphs 6 and 7 of the Funding Application.
(a) whether it agrees or disagrees that the issues identified by the plaintiffs and LCM in their respective Points of Claim documents are relevant to the court's determination of paragraphs 6 and 7 of the Funding Application;
(b) any other issues it contends are relevant to the court's determination of paragraphs 6 and7 of the Funding Application.
(a) the plaintiffs file and serve any further affidavit evidence on which they intend to rely in relation to the Funding Application;
(b) LCM file and serve any affidavit evidence on which it intends to rely in relation to the Funding Application.
(a) file and serve any affidavit evidence on which it intends to rely in relation to the Funding Application;
(b) file and serve any application for an order for disclosure by the plaintiffs and/or LCM in relation to the Funding Application.
[4] Rule 483 of the Uniform Civil Procedure Rules 1999 (Qld) provides:
483 Order for decision and statement of case for opinion
(1) The court may make an order for the decision by the court of a question separately from another question, whether before, at, or after the trial or continuation of the trial of the proceeding.
(2) The Supreme Court, other than the Court of Appeal, may also state a case for the opinion of the Court of Appeal.
[5] In Land and Resources Tribunal v Schmidt,[2] the Court of Appeal stated:
"A case stated is a process by which a court or Tribunal in the course of proceedings before it submits to a superior court for its decision or opinion on a question of law that arises from facts as found by the court or Tribunal and stated in the case: Industrial Equity Ltd v. Commissioner for Corporate Affairs [1990] VicRp 68; [1990] V.R. 780, 782 - 783."
[6] Annexed to the application are three annexures. Annexure A is the draft statement of case. Paragraph 12 of Annexure A sets out four questions being the ultimate questions which the applicants seek to be stated to the Court of Appeal. Annexure B consists of the funding terms and Annexure C sets out not only the draft notice to group members but also some 430 further pages of marked annexures.
[7] The questions that the applicants seek to be stated to the Court of Appeal are defined with specificity and it is accepted that resolution of the issues is important to class action litigation in Queensland. If there was certainty as to the factual basis underpinning the questions then undoubtedly it would be appropriate to state a case to the Court of Appeal. The applicants argue that no evidence is required beyond the material set forth in the draft case stated. The applicants argue that the issues to be stated to the Court of Appeal are issues of law and that a factual inquiry into issues of "control" have no relevance to the existence or non-existence of champerty. GPC disputes this fundamental proposition as not reflective of the true state of the law and submits there are factual issues between the parties relating to the issue of control which are critical to the questions which seek to be stated. The resolution of this issue in the applicants' favour requires sharp distinctions to be drawn between champerty (as an aggravated form of maintenance), abuse of process and contrariety to public policy which, as the plurality of the High Court in Fostif's case[3] demonstrate has eluded courts now for more than a century.
[8] The difficulty, as explained by the plurality in Fostif's case is that the torts of maintenance and champerty appear to have little if any rational basis in "modern" times. The plurality accepted that[4] over a 111 years ago (in 1908) the torts were not based upon any "logical principle". I would respectfully adopt the conclusion of Fletcher Moulton LJ that "in my opinion it is far easier to say what is not maintenance than to say what is maintenance." It is inappropriate in my view on an interlocutory application, and without full argument from the parties and without reference to persons whose interests may be affected by such a ruling (ie the group members), to embark upon a definitive examination of the case stated issues on the basis that "control" (in the sense of a degree of intermeddling), has no relevance to the existence or nonexistence of champerty. Resolution of such issues is complicated by the lack of an apparent rational basis for the continuation of torts which emerged several hundred years ago in their application to "modern" times.
and posted in terms of Annexure A on the website of the plaintiffs' solicitors on a page accessible via a link prominently displayed on the homepage dedicated to this proceeding.
[1] [2019] NSWCA 35; Westpac Banking Corporation v Lenthall [2019] FCAFC 34.
[3] Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41; (2006) 229 CLR 386.
[4] Paragraph 78 at 430 citing Fletcher Moulton LJ in British Cash and Parcel Conveyors Ltd v Lamson Store Service Co Ltd [1908] 1 KB 1006 at 1013-1014.
[5] Clairs Keeley (a Firm) v Treacy [2003] WASCA 299; (2003) 28 WAR 139
[6] Clairs Keeley (a Firm) v Treacy (2004) 29 WAR 479
[7] [2005] NSWCA 83; [2005] 63 NSWLR 203 at paragraphs 88-112.
[8] Makhoul v Barnes (1995) 60 FCR 572, Castillon v P & O Ports Ltd (No 2) [2007] QCA 364; [2008] 2 Qd R 219.
[9] Mullen v Conoco Ltd [1988] QB 382 at 390-393.
[10] Footnoted to paragraph 70 of GPC's written submission
Murphy Operator Pty Ltd & Ors
Gladstone Ports Corporation Ltd
(2006) 229 CLR 386
(2003) 28 WAR 139
(2004) 29 WAR 479
(1995) 60 FCR 572
[9] The torts of maintenance and champerty were abolished in the United Kingdom in 1967, in Victoria in 1969, in New South Wales in 1993, in South Australia in 1992 and abolished in the Australian Capital Territory in 2002. GPC relies on passages from the Western Australian cases of Clairs Keeley No. 1[5] and Clairs Keeley No. 2[6] in support of its submission that issues of control are important in the determination of issues of maintenance and champerty. The Clairs Keeley cases are of some assistance, however as pointed out by the applicant, it was not a class action and accordingly not subject to the legislative checks and balances of the class action regime which has been implemented in the Civil Proceedings Act 2011 (Qld). In Fostif, Kirby J at 125 cited with approval the reasons of Mason P in the Court of Appeal in Fostif.[7] In paragraphs 113 and 114 of his judgment Mason P expressed his non-acceptance to portions of Clairs Keeley No. 2 as accurately representing the state of the law on maintenance and champerty.
[10] These difficult issues, absent legislative intervention must be resolved, however that determination must be left to when all parties who have an interest in the subject matter are before the court. It is accepted that ordinarily incidental issues ought not to be the subject of final and binding judgments on interlocutory applications.[8] However, binding determinations which may give rise to an estoppel between parties can be made on interlocutory application of issues where parties have full opportunity to investigate, adduce and test evidence to allow the court to make a final determination.[9] Given the potential for questions of fact to be raised upon the application, and given the need to allow the group members to participate in this hearing, I conclude that it is inappropriate for a case to be stated to the Court of Appeal. The application will then be heard in the ordinary course of the trial division pursuant to the orders to be made.
[11] The applicants submit that it is unnecessary to make an order for any Points of Claim documentation (as sought in paragraphs 8 to 10 of first respondents draft orders) as the issues to be determined in the application are well defined. GPC's submission in respect of the Points of Claim document is that it may be sufficient for the plaintiffs to "simply deliver a document in the form or to the same effect as paragraphs 1 to 11 of the "Draft Statement of Case."[10] Because of the importance of the issue it seems to me there is merit in the defendant's submission in this regard, that is, in requiring the applicants to deliver a Points of Claim document and I will make that direction. I do not see the utility in LCM being required to file what I anticipate will be essentially the same document. LCM having been made a respondent to the application ought to file and serve on the applicants and GPC a Points of Claim Defence document within seven (7) days of receipt of the applicants Points of Claim document.
[12] LCM raises in its outline of written submissions the issue of the redaction of the retainer agreement and funding agreements with respect to dollar amounts for lawyers' fee cap and funding budget amounts, percentages and the number of identified steps on the basis that it is confidential information that if disclosed "may give the defendant a tactical advantage in the conduct of any settlement discussions". The issue has been raised by LCM but not yet answered by GPC who anticipates that there may be the necessity for a further hearing in respect of "disclosure issues". It follows that the orders to be made are similar to those suggested by GPC in GPC's draft order which preserve the disclosure issues.
[13] There is some dispute between the parties as to the form of the notices in Annexure A (the personal notice) and in Annexure B (the newspaper advertisement). There remains five paragraphs of draft notices which are the subject of dispute, paragraphs 1.4, 3.3 and 4.1 of Annexure A and paragraphs 1.4 and 3.2 of Annexure B. The applicants urge that the "target audience" are fisherman in provincial Queensland and that the unnecessarily technical alterations suggested by GPC tend to obfuscate the issues rather than set them out in a form which is readily understood. Although the defendant's submissions on paragraphs 1.4, 3.3 and 4.1 have some technical merit I would conclude that they may have the tendency to confuse a non-legally qualified reader of the already complicated personal and newspaper notices to group members. The alterations suggested by GPC in respect of the notices are to be accepted other than the alterations suggested in 1.4, 3.3, 4.1 of Annexure A (personal notice) and 1.4 and 3.2 of Annexure B (newspaper advertisement).
[14] I make the following orders: