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Murphy Operator & Ors v Gladstone Ports Corporation & Anor (No 4)  
Unreported Citation: [2019] QSC 228
EDITOR'S NOTE

The applicants and other persons who allegedly suffered damage as a result of dredging works undertaken in Gladstone Harbour by the Gladstone Ports Corporation Ltd (“GPC”) formed a class action for the purpose of bringing claims in negligence and nuisance against GPC. To facilitate proceedings, the applicants entered a number of agreements that relevantly provided that the second respondent, a litigation funder, would fund the litigation in return for a share of any recovery that resulted from the action. Having entered into the agreements, the applicants applied inter alia for a declaration that the agreements were not unenforceable by reason of maintenance, champerty or as contrary to public policy. Justice Crow made the declarations, finding that the agreements did not concern maintenance or champerty, and otherwise accorded with public policy.

Crow J

13 September 2019

Background

The first, second and third applicants were companies that sourced seafood from the waters in or around Gladstone Harbour. [5], [10]–[11]. The first respondent, Gladstone Ports Corporation Ltd (“GPC”), was the entity responsible for the management of the Port of Gladstone. [3]–[4]. In 2011 and 2012, GPC undertook dredging in the harbour and deposited the spoil created by that process behind a bund wall. [4]. The applicants alleged that large volumes of the spoil later escaped the bund wall and caused the drastic depletion of seafood species in waters affected by the spoil, which in turn negatively impacted upon their businesses. [4]–[5], [10]–[11].

The applicants and other persons alleging damage in connection with the dredging of the harbour subsequently formed a class action to bring claims for negligence and nuisance against GPC. [4], [6]–[8], [19]–[20]. To facilitate those proceedings, the applicants and others entered a number of agreements that relevantly provided that the second respondent, LCM Operations Pty Ltd (“LCM”), would fund the litigation in return for a share of any recovery that resulted from the action. [15]–[49]. Having entered into the funding agreements, the applicants applied inter alia for a declaration that the agreements were “not, by reason of maintenance, champerty or public policy, unenforceable”. [1].

Criminal and tortious maintenance and champerty

During a detailed review of the criminal and tortious law of maintenance and champerty ([72]–[150]), Crow J confirmed that the crimes of maintenance and champerty have not existed in Queensland since the commencement of the Criminal Code Act 1899. [105], [123], [131]. However, having considered the decision in Campbell’s Cash and Carry Pty Ltd v Fostiff Pty Ltd (2006) 229 CLR 386, his Honour resolved that the application did not bring any cause of action based upon the torts of maintenance or champerty, and so declined to finally determine whether those actions were still available at common law, despite expressing doubt to that effect. [128]–[131], [181].

Public policy

Noting that courts take guidance from statute when construing public policy, Crow J turned to an examination of Part 13A Civil Proceedings Act 2011 (“CP Act”), which enables class actions to be conducted in Queensland. [146], [151]. His Honour highlighted that s 103K(2) CP Act specifically contemplates proceedings involving a commercial litigation funder, and uses the same wording as an equivalent provision in New South Wales, which was implemented expressly to aid commercially funded class action proceedings. [163]–[175].

In circumstances where the Queensland Parliament must have appreciated the import of s 103K(2) CP Act at the time it was enacted, his Honour considered that the provision should be taken as indicative of contemporary public policy. [171]. Observing that there was nothing in evidence to suggest that the funding agreements were anything other than standard in their nature, his Honour concluded that the agreements accorded with public policy. [175], [186].

Orders

In the result, Crow J made the declarations sought by the applicants. [186].

B McNamara