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Introduction: Factual and Procedural Background

This is a class action that is brought to the Court today for a myriad of reasons. The Court today is brought about by Australia-based tobacco retailers to recover fees pertaining to tobacco license fees. It was initially heard in the Supreme Court of New South Wales.

This class action and the cause of action are brought about by following the High Court’s declaration in Ha v State of New South Wales (1997) CLR 465, where some of today some of my fellow learned friends were in the majority. Put simply, the aforementioned case holds that an states are prohibited from levying excise for the face that excises are in fact, themselves a tax on the sale, production, and manufacture of goods or services prior to their use or consumption.

It is important to note that, for the purposes of my judgement and that of my learned friends, this proceeding is funded by Firmstone, a litigation funder. Firmstone was to obtain approximately one third-of the proceeds should the tobacco retailers be successful.

Procedural History: Einstein J in 1995 decided, at first instance, that the proceeding brought to the Supreme Court of New South Wales was itself beyond the boundaries of the court’s rules allowing representative proceedings and was therefore an abuse of process. In the Court of Appeal, it was held that the case should proceed on the ground that it is a representative proceeding. It was held in the Court of Appeal that the earlier decision erred in deciding that Firmstone’s role in the proceedings was not in violation of the courts rules.

The Court of Appeal allowed the appeal and ordered the proceedings to continue as representative proceedings. The Court of Appeal found that neither Firmstone’s role in connection with the litigation nor the particular funding arrangements justified staying the proceeding. The Court of Appeal made numerous decisions which are of contention here today. First, they held that third-party financial assistance does not itself amount to any abuse of process. As a result, of the previous conclusion it was held that courts are not involve themselves in the arrangements between plaintiffs and litigation financiers only if they have a tendency or likelihood to influence the course of justice.

Moreover, from the above, it was held that in cases where the plaintiff has, prima facie, an actionable claim the requisite standard of proof for a permanent staying of proceedings is one of a high standard and hence any case will only be dismissed if the proceeding is a final attempt at purging an abuse of process.

This Court granted leave to appeal on 13 September 2005.

My Reasoning

I concur with my learned friends Gummow J, Crennan J, and Hayne J in deciding that that issue that presents the court here today is concerned with the wholesalers’ appeal regarding the precise issue of whether the proceedings should continue as representative proceedings or not. I agree with my learned friends above that the arrangements between Firmstones and the tobacco retailers did not lead to a ground to stay the proceedings.

Section 6 of the Maintenance, Champerty, and Barratry Act 1993 (NSW)

The above legislation ridded the offences of champerty and maintenance in New South Wales. More precisely, as put forward by Gummow J, the law unequivocally stood for the proposition that maintenance and champerty were not, in any way, to be associated as legally unimportant in all cases. Instead, the law held that the aforesaid act did not state unambiguously make any decision regarding relevance of abuse of process or even the scope of equitable doctrines of illegality.

In concurring with Gummow J, I conclude that the tobacco wholesaler’s argument that for the maintainer to commence and continue the action in plaintiffs name or on behalf of them was an abuse of process, but not without qualification. That said, however, it the qualification was that abuse of process could only be stayed if maintenance and champerty provided, prima facie, questions of public policy exceeding those relevant in considering if the financing agreement was legally enforceable. Interestingly, the issue of an ongoing public policy against maintenance and champerty has been recognised in the House of Lords case Giles v Thompson [1994] 1 AC 142.

In further qualification, and in dissent with my learned friends Callinan J and Heydon J, I argue that in states where the act has been enacted, the above assumption is not logically valid.

Some of these reasons, include, that because the crimes and torts of maintenance and champerty have been repealed any broad reaching rule of public policy beyond the limitations of s 6 has been lost. In fact, the argued rule of public policy does not lead to any absolute rule because the rationale for this public policy doctrine was stated as being only identifiable by the usage of such terms as ‘trafficking’ or ‘intermeddling’.

To further illustrate this stance, I suggest that the causes of action and particulars argued by the tobacco wholesalers that Firmstone had wanted from the claimants, but utilised a level of control over the proceedings and owned the rights to litigation to obtain profit were themselves not, either individually or in a grouping, violation to any public policy doctrine or leading to an abuse of process. It is an inarguable proposition that many people and entities aim to gain an economic advantage helping out in court litigation, and looking for cheering litigation could only be divergent to public policy should there be a rule against running actions. In the absence of such a rule, either in crime or in tort, there was no foundation to conclude that maintaining an action could be contrary to public policy.

In furtherance of this argument, the potential effects on litigation are not themselves enough to justify a broad reaching rule of public policy that hamper financed actions. In fact, the rationale of the public policy rules can be offset by other and existing abuse of process doctrines regulating participants in a court process.

I agree with my learned friend and set aside the orders set out by Gummow, Hayne, and Crennan JJ.


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