GPC loses another bid to stop fishers class action case
THE Queensland Court of Appeal has ruled that a champertous funding arrangement in a class action case against a government-owned entity is legally acceptable in today’s society.
It sets a precedent for future class actions in Queensland, to be funded by a third party company that specialises in funding litigation cases.
Government-owned Gladstone Ports Corporation is being sued by more than 150 people (fishers) in Queensland and New South Wales – from Bowen to Sydney including Keppel Bay, Stanage Bay and Gladstone region operators – who are seeking up to $150m in damages.
The claim by fishers is dredging and associated works in 2011 during the Gladstone Port expansion project polluted waters and seas, degrading the quality and quantity of fish, impacting commercial fishermen and associated businesses’ livelihoods.
The QCA handed down a decision on November 13 in relation to an appeal launched by Gladstone Ports Corporations lawyers over a decision made by Rockhampton-based Supreme Court Judge, Justice Graeme Crow, regarding the funding arrangement between commercial fishermen and parties and the groups funders – Litigation Capital Management.
GPC lawyers have been trying to have the funding arrangement axed by law since September 2019, but their actions started with letters in February 2019 alleging the funding contracts were unenforceable because they were “champertous”.
The fishers are represented in the class action by Rockhampton-born brothers Maurice Thompson (Clyde & Co) and Chris Thompson (Law Essentials).
“This is a significant win for the plaintiffs as it means that their access to justice, via the funding being provided by Clyde & Co and LCM, is preserved,” Clyde & Co partner Maurice Thompson said.
“This whole argument forced by GPC has a been a costly distraction to the serious underlying case against GPC,” Law Essentials principal Chris Thompson said.
“Now that they have lost a second time, we would hope that the focus can return to the main case.
“If they choose to appeal to the High Court, it would be uncommercial and suggest they have more money than sense.”
Champerty and maintenance was introduced to British law in the 1600s and has been scrapped by NSW and Victoria. But it has not been officially axed in Queensland.
When GPC’s lawyers took the argument to court, asking Justice Crow to make a decision if the funding arrangement was “vexatious, champertous”, the fishers’ lawyers asked His Honour if he were to rule the arrangement was not “unenforceable by way of Champerty and Maintenance” to give the 400-year-old torts “a decent common law burial”.
Justice Crow, who preceded over this first request, found the security in that form would be adequate, that the funding agreements did not involve unlawful conduct or purpose, and were not prejudicial to the administration of justice
He outlined his findings in an 80-page judgment – with 60 pages dedicated to examining the historical evolution of champerty and maintenance. Read more here: Landmark decision in fishers verse Gladstone Ports Corp
The Court of Appeal decision stated Justice Crow “did not decide the question of the law as, with respect, his Honour ought to have done”.
The Court of Appeal reasons for rejecting GPC’s claim
GPC took the matter to the QCA, requesting the body make a decision about the funding arrangement as per public policy – saying the level of control the funder had over the litigation went against public policy.
While a decision involving Champerty and Maintenance was not requested by GPC, the QCA had to examine the history of the British torts and the policy behind the torts which dated back to medieval England where powerful barons used their armed men and servants to frighten away those who had a better claim to land seized by the powerful baron’s entourage.
The examination included a 1984 Full Court of the Supreme Court of Queensland decision which described ‘maintenance’ as “the procurement, by direct or indirect financial assistance, of another person or institute or carry on or defend civil proceedings, without lawful justification”.
The decision pointed to an 1876 decision in India which held that a champertous agreement, made in order to fund litigation to benefit a plaintiff who could not otherwise afford to litigate, would be regarded as furthering right and justice and necessary to resist oppression.
Further, in the Fostif 2006 case, the defendant in the class action case was an abuse of power as the funding agreement between the funders and plaintiffs gave the funders the ability to corrupt the court’s processes, which was rejected.
“We reject the contention that a funder would be more likely to misconduct litigation than anyone else just because the funding agreement is champertous,” the QCA decision stated.
“The appellant’s appeal to public policy fails. Those aspects of society which rendered it desirable to criminalise acts of maintenance, thereby making them tortious also, have long since vanished.
“On the other hand, the current policy of the law, as found in the Queensland statue, not only recognises the public benefit to be derived from class actions which must depend upon champertous agreements for their efficacy, but that recognition has been reached in social conditions within which, in other Australian jurisdictions, there has by now been a long history of such litigation without any of the appellant’s predicted ills having been experienced.”