Moloney v Housing Industry Association Ltd
[1992] TASSC 130
•4 December 1992
Serial No B53/1992
List "B"
COURT: SUPREME COURT OF TASMANIA
CITATION: Moloney v Housing Industry Association Ltd [1992] TASSC 130; B53/1992
PARTIES: MOLONEY, Judith Anne
v
HOUSE INDUSTRY ASSOCIATION LTD
FILE NO/S: 371/1992
DELIVERED ON: 4 December 1992
HEARING DATE/S: 13 November 1992
JUDGMENT OF: Crawford J
Champerty and Maintenance — What constitutes maintenance — Common interest of parties in question of law.
Martell v Consett Iron Co Ltd [1955] Ch 363 considered.
REPRESENTATION:
Counsel:
Applicant: P W Tree
Respondent: M E O'Farrell
Solicitors:
Applicant: Zeeman Kable & Page
Respondent: Dobson Mitchell & Allport
Judgment Number: B53/1992
Number of paragraphs: 27
Serial No B53/1992
List "B"
File No 371/1992
JUDITH ANNE MOLONEY v HOUSING INDUSTRY ASSOCIATION LTD
REASONS FOR JUDGMENT CRAWFORD J
4 December 1992
Following a trial the plaintiff obtained a judgment against Allen John Bryan for $34,464.68 damages. Mr Bryan built a house in 1979 for Mrs L M Manion. Mrs Manion subsequently sold the premises to Mr and Mrs J L Quittenden. In May 1986 Mr & Mrs Quittenden sold the premises to the plaintiff. Her action against Mr Bryan was in negligence following movement in the building. Wright J found that Mr Bryan did not fabricate footings to a standard to be expected of a reasonably competent builder in 1979 (unreported judgment 371992). His Honour also found that Mr Bryan owed a duty of care to the plaintiff which he breached.
Mr Bryan filed a notice of appeal to the Full Court seeking judgment in his favour on a number of grounds. They included that Wright J was wrong in law in finding that Mr Bryan owed a duty of care to the plaintiff and that he breached any duty. Other grounds included claims that errors in findings of fact were made and other errors of law.
The present action was commenced on 14 October 1992. In the statement of claim the plaintiff claims that the defendant has agreed to financially assist Mr Bryan in the prosecution of the appeal, that the defendant "does not have an interest" in the appeal and that in consequence of the agreement between the defendant and Mr Bryan she has suffered loss and damage. The relief sought includes an order restraining the defendant from maintaining or causing to maintain the appeal, unspecified damages, interest and costs. On the same day as the writ was filed the interlocutory application now before me was filed. In it the plaintiff seeks, following an amendment, an order "that until further order or until the hearing of this action the Defendant by its servant agent or howsoever be restrained from maintaining or causing to be maintained Full Court appeal number 37 of 1992 in the Supreme Court of Tasmania".
When the application came on for hearing before me Mr Bryan was present for the purpose of being cross–examined on an affidavit he had sworn, that affidavit being read later on behalf of the defendant. In answer to questions from me he declared that he was content to remain as a witness and did not wish to intervene or take any other part in the hearing. Affidavits read on behalf of the plaintiff were her own and that of her solicitor, Mr P W Tree. The plaintiff was cross–examined. Affidavits read for the defendant were of Mr Bryan and Mr A P Harriss, who is the State manager of the defendant. Both Mr Bryan and Mr Harriss were cross–examined. No issues concerning credit have arisen.
Following judgment in the action brought by the plaintiff Mr Bryan believed that the decision was wrong and he sought television and newspaper publicity. The solicitors who had acted for him at the trial filed the notice of appeal on or about 18 June 1992. He was not a member of the defendant but attended a trade night conducted by it for the benefit of its members in about July. Several people urged at that function that the building industry should financially support him in his appeal and following that an agreement was entered into by the defendant and Mr Bryan in about August.
The agreement was to the following effect. The defendant agreed to provide the funds for Mr Bryan's costs and disbursements incurred in proceeding with the appeal. In return Mr Bryan agreed to terminate his retainer of his solicitors and to instruct instead the defendant's Hobart solicitors. He agreed that his counsel on the appeal would be a particular counsel from Melbourne and a particular Tasmanian counsel. He agreed to assign to the defendant "all and any right title and interest in and to the benefit of any order for costs made in his favour arising out of or in any way connected with the appeal". He undertook to comply with the reasonable requirements of the defendant and of those solicitors and counsel in any way relating to or concerning the appeal. He agreed not to terminate the retainer of the solicitors without the defendant's consent and not to discontinue, abandon or compromise the appeal without its consent. Finally the agreement referred to the "Allan Bryan Fighting Fund" and said that it would be maintained and administered by the defendant which would be entitled to the proceeds of the money in the fund to the extent of any payments made by it on account of Mr Bryan's legal costs and disbursements in connection with the appeal. Mr Bryan would be entitled to any excess in the fund.
In accordance with the agreement the defendant is paying Mr Bryan's costs of the appeal. It has sought contributions and donations from its members and the public for the purpose of defraying those costs and has issued press and other media releases to attract attention to the appeal and to obtain donations to the fund. By 9 November 1992 donations to the fund totalled about $6,500. In so far as the fund will be insufficient the defendant will subsidize the costs of the appeal.
Having entered into the agreement with the defendant, Mr Bryan became a member of it although that was not made a condition of the agreement.
The defendant was incorporated in Victoria. It operates nationally. Its members are generally engaged in the home building industry and include builders, sub–contractors, manufacturers, drafters, suppliers of home building and ancillary materials and others having a pecuniary or other interest in the home building industry within Australia. Tasmanian members are part of a Victorian/Tasmanian branch. Nationally there are about 25,000 members. In Tasmania there are in excess of 350 financial members, approximately 80 per cent of whom are directly engaged in the home building industry as builders or sub–contractors. The annual membership subscription is $440.
The home built by Mr Bryan, which was the subject of the plaintiff's action, was constructed on reactive clays. Variations in moisture caused the foundation to move and the building eventually to show signs of significant damage. Many home builder members of the defendant, prior to and since 1979 (being the year in which the plaintiff's home was built by Mr Bryan) have constructed residences on soils comprising reactive clays. The concern of a number of members which was expressed following the judgment was that builders generally in Tasmania could be liable, not just to persons for whom they constructed a house, but also to subsequent purchasers of houses many years after construction had been completed in respect of allegations of damage from movement arising from inadequate footing designs in reactive clay areas. There are a number of such areas in Tasmania. It appears that of primary concern to the defendant and its members is the legal question concerning the liability of a builder to subsequent purchasers for faulty workmanship. The grounds of Mr Bryan's appeal are much more extensive, but it is the determination by an appellate court of questions of law relevant to that concern which has primarily attracted the defendant's financial support for Mr Bryan's appeal.
The objects of the defendant, as expressed in its memorandum of association, include general purposes for the benefit of home builders and the home building industry of Australia. I find that it is beyond doubt that the defendant and many of its members have a real and genuine interest and concern about the prospect of builders being liable to subsequent purchasers. In their own interests they wish to see the liability of builders restricted and the defendant sees Mr Bryan's appeal as a suitable vehicle for an endeavour to persuade an appellate court to restrict that liability. In other words, and notwithstanding that a number of superior courts in this country have held that a builder can be liable in negligence to a subsequent purchaser for faulty workmanship, the defendant desires to use Mr Bryan's appeal as something of a test case so far as the law is concerned.
The defendant's objects include the development and maintenance within the home building industry of a high appreciation of the objectives and responsibilities of home builders in fully serving the public; the advocating and encouragement of constant improvement in home building techniques and practices; the support and protection of the integrity, character, status and interest of all persons, firms or companies engaged in the business of builders and allied professions and trades; and the combatment by any lawful means of dishonourable conduct or practice amongst such persons, firms or companies. They also include originating and promoting improvements in the law and alterations therein and representing the views and interest of members generally.
Services provided by the defendant to its members include continuing education in respect of changes to laws relating to the home building industry; advice and assistance in relation to the preparation of construction contracts, resolution of contractual disputes with clients and arbitration or litigation in respect thereof; advice as to business management, organisation and economic planning; advice as to town planning matters affecting home builders; distribution of information and advice in respect of new building developments and techniques; advice and assistance as to liability and insurance requirements generally in respect of public liability, property damage and personal liability in respect of defective works, breach of contract or negligence. The defendant holds regular educational seminars and trade nights for the purpose of ensuring that members are fully apprised of recent developments in laws and building practices and in order to assist and ensure the provision of proper building services to the public.
In pursuing the interests of its members the defendant has been concerned for some years with the protection of the public by means of statutory warranty schemes intended to ensure compensation to the public in respect of defective work by builders who have died or become insolvent. The defendant has actively promoted the introduction of such a statutory scheme to the government and there is presently before the Legislative Council a bill containing such a scheme which provides for a six year statutory warranty to home buyers in respect of materials and workmanship and which indemnifies them in respect of the insolvency, death or disappearance of home builders and in respect of defective workmanship or materials.
The defendant considers that its home builder members have a common interest with Mr Bryan in the judicial review of the judgment against him and the outcome of the appeal because, as was expressed by Mr Harriss in his affidavit, "numerous members may be held to be subject to liability in respect of residences constructed for periods up to and exceeding 10 years ago on re–active soils and that this liability, given the current cost of construction or renovations of domestic buildings would be of great significance, particularly to members of limited assets. The decision could also cause increased insurance premiums in respect of builders liability and give rise to numerous further claims by home–owners". The defendant is also concerned that Mr Bryan might be unable to finance the appeal due to lack of funds and by financially backing the appeal it seeks to ensure that his indigent circumstances did not prevent a full judicial review of the principles of law giving rise to the liability imposed upon him by the judgment and to ensure that, in the interest of all the defendant's members, the decision is reviewed and clarified taking into account the arguments which will be raised and which are relevant to the question of the potential liability of home builder members and their pecuniary interests.
Mr Harriss asserted under cross–examination that the defendant has become involved in what he described as an industry issue and not simply in an issue concerning Mr Bryan personally. That Mr Bryan may have to pay the plaintiff money by way of damages is not the reason for the defendant's involvement. The defendant would not have supported Mr Bryan in the litigation at first instance. Financially it could not have afforded to fund such litigation at an early stage. If the defendant was believed to have sufficient funds of his own to pay for adequate management of his case on appeal, it is unlikely that the defendant would be funding him.
If the appeal is unsuccessful and Mr Bryan is ordered to pay the plaintiff's costs of it, it is unlikely that the defendant will agree to indemnify him.
On the evidence put before me it appears likely that Mr Bryan's liabilities exceed his assets, most of those liabilities arising out of his liability to the plaintiff established by the judgment and his liability for his own legal costs of the action. He has an income as a self–employed builder, the amount of which was not established before me. There was no evidence but I gather that his business is a small one with few employees.
The plaintiff's evidence established that she is unemployed and maintained by a social security pension. If she loses the appeal she stands to lose every asset she has including the house which was the subject matter of the action. It is apparent from her affidavit that the object of this action is to try and force a withdrawal of the defendant's financial support for Mr Bryan's appeal and thereby in some way cause or assist to bring about the failure of his appeal and thereby to preserve her financial security.
It seems likely that on the hearing of this interlocutory application most of the evidence which would have been given at the trial was put before me. Arguably it may have been better for a speedy trial of the action to have been sought at which the issues raised could have been finally determined, rather than to pursue an interim injunction.
The tort of maintenance involves the giving of assistance or encouragement to one of the parties to litigation by a person who has neither a sufficient interest in the litigation nor any other motive recognized by law as justifying interference. Halsbury 4th edn vol9 par400. Expressed differently, the doctrine of maintenance is based upon considerations of public policy, and is directed against wanton and officious intermeddling with the disputes of others in which the maintainer has no interest whatever, and where the assistance he renders to the one or the other party is without justification or excuse. Halsbury 4th edn vol9 par401. On the trial of this action one of the most important questions for determination will concern whether the defendant has a sufficient interest in the litigation constituted by the appeal of Mr Bryan against the plaintiff as to prevent its financial support of him and its arrangement with him amounting to the tort of maintenance. There are plainly arguments which support both the plaintiff and the defendant in this regard. I cannot say which party's argument is most likely to succeed without determining the difficult point of law itself on the evidence before me. I have considerable doubts that it is appropriate for me to determine it at this stage of the proceedings. Instead in my view it would be more desirable for the action to be speedily moved on for trial and for the questions of law to be determined upon the basis of all the evidence then given.
Counsel for the plaintiff submitted that for the defendant to have a sufficient interest to justify its support of Mr Bryan, it must have a common interest in the result of the appeal, that is to say in the orders or judgment which may be made or given at its hearing, and not just in the processes involved in arriving at that result or, more particularly on the facts of this case, in the determination by the Full Court of legal questions concerning the question of the liability of builders to subsequent purchasers for defective workmanship. Counsel for the plaintiff conceded that the defendant has a genuine interest in the determination of such legal questions but submitted that authorities show that that is not a sufficient interest to remove the defendant's conduct out of the category of maintenance. Counsel for the plaintiff relied on a number of judicial statements and I will mention some of them. In Bradlaugh v Newdegate (1883) 11 QBD 1 at 11 Lord Coleridge CJ gave some examples of sufficient common interest and then continued:
"But in all these cases the interest spoken of is an actual valuable interest in the result of the suit itself, either present, or contingent, or future, or the interest which consanguinity or affinity to the suitor give to the man who aids him, or the interest arising from the connection of the parties, e.g., as master and servant, or that which charity and compassion give a man in behalf of a poor man who, but for the aid of his rich helper, could not assert his rights, or would be oppressed and overborne in his endeavour to maintain them".
In J C Scott Constructions v Mermaid Waters Tavern Propriety Limited [1984] 2 Qd R 413 at 439 Connolly J referred to "a common interest in the subject matter of the suit". In Martell v Consett Iron Co Limited [1955] Ch 363 at 416 Jenkins LJ concluded:
"...that a person who has a legitimate and genuine business interest in the result of an action must be taken for the purposes of the rule against maintenance to have an interest recognized by the law in the subject–matter of the action".
But the law of maintenance is not fixed in the sense that the categories of circumstances constituting or not constituting it are set and immovable. It is founded on considerations of public policy which vary according to the state and development of society and conditions of life in a community. Alabaster v Harness [1895] 1 QB 339 at 342; Stevens v Keogh (1946) 72 CLR 1 at 28. With respect there is much force in the following passage in the oft cited judgment of Danckwerts J in Martell v Consett Iron Co Ld (supra) at pp386–7:
"What is the interest recognized by the law, and to be distinguished from 'a sentimental interest,' which exists in the cases of the trade unionists and the persons who carry on a similar trade, but does not exist in the case of persons who possess fishing rights or who wish to preserve the purity of the waters of the country's rivers or streams? In all these cases, persons combine, as Sir George Jessel said, lest they might be attacked in detail and they might all lose their cases owing to the great expense of defending them effectually. I agree with Lynskey J in Baker v Jones [1954] 1 WLR 1005 in the view that the Legal Aid Acts show the change in public opinion on the question of supporting litigation. Even Lord Esher in Alabaster v Harness [1895] 1 QB 339 did not think that, apart from any specific law on the subject, there would necessarily be anything wrong in assisting another man in his litigation. The specific law to which he referred is now a collection of out–of–date rules which no longer fit the conditions of modern life and were based upon a conception of public policy which has long since become obsolete. No wonder public policy has been termed an 'unruly horse' : per Burrough J in Richardson v Mellish (1824) 2 Bing 299,252. Of course, there can be abuses which the law must check. One is familiar with the former false 'legal aid societies,' usually consisting of one man, that supplied legal aid and advice for a percentage of the sum recovered. But the remedies of champerty and barratry should be competent to deal with that evil. Support of legal proceedings, based on a bona fide community of pecuniary interest or religion or principles or problems, is quite different and, in my view, the law would be wrong and oppressive if such support were to be treated as a crime or a civil wrong. But I do not believe that the law is in that condition."
The defendant and its members have a real and genuine interest in the determination of one of the legal questions arising in the action between Mrs Moloney and Mr Bryan. The defendant's support of Mr Bryan's appeal appears to be based on a bona fide community of pecuniary interest, principles and problems and there is considerable strength in the argument that its support of Mr Bryan does not amount to maintenance.
In these circumstances, and also taking into account Mr Bryan's strained financial circumstances, I am unable to conclude that there is a probability that at the trial the plaintiff will be held entitled to relief. Beecham Group Limited v Bristol Laboratories Pty Ltd (1967–8) 118 CLR 618 at 622; Magna Alloys and Research Pty Ltd v Ten–Haaf [1978] Tas SR 136 at 142–5; Markham v Commonwealth Bank of Australia, unreported 51/1991 at 1–2.
If an interim injunction is granted one immediate result will be that Mr Bryan will lose the funding of his appeal by the defendant. Balancing the competing interests of the plaintiff and Mr Bryan and having regard to my doubts concerning the likely success of this action at trial, this is not an appropriate case for the granting of an interim injunction of the nature sought. The application will therefore be dismissed.
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