MUSTICA v MUSTICA
[2004] WASC 283
MUSTICA -v- MUSTICA & ORS [2004] WASC 283
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 283 | |
| Case No: | CIV:1997/2002 | 15 DECEMBER 2004 | |
| Coram: | MASTER SANDERSON | 24/12/04 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Stay refused | ||
| B | |||
| PDF Version |
| Parties: | ANTONIO MUSTICA STEVE MUSTICA ANDREW MACRI GARY PAUL MACRI FRANK MACRI FRANCES CARMEL MONTEROSSO MECOLATA EVANS PAULINE WEST THE REGISTRAR OF TITLES |
Catchwords: | Practice and procedure Claim action being maintained by brother Whether stay ought be granted Turns on own facts |
Legislation: | Nil |
Case References: | Bandwill Pty Ltd & Anor v Spencer-Laitt & Ors (2000) 23 WAR 390 Bradlaugh v Newdegate (1883) 11 QBD 1 Choules & Ors v Siglin & Ors [2002] WASC 230 Clairs Keeley (A firm) v Treacy & Ors (2003) 28 WAR 139 Hutley v Hutley (1873) 8 LRQB 112 Abraham v Thompson (1997) 4 All ER 362 Brew v Whitlock [1967] VR 449 Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd (1997) 72 FCR 261 Martell v Consett Iron Co Ltd (1955) Ch 363 Re Trepca Mines Ltd (No 2) (1963) 1 Ch 199 Smits v Roach (2002) 55 NSWLR 166 Thai Trading Co (A firm) v Taylor [1998] QB 781 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
STEVE MUSTICA
First Defendant
ANDREW MACRI
Second Defendant
GARY PAUL MACRI
Third Defendant
FRANK MACRI
Fourth Defendant
FRANCES CARMEL MONTEROSSO
Fifth Defendant
MECOLATA EVANS
Sixth Defendant
PAULINE WEST
Seventh Defendant
THE REGISTRAR OF TITLES
Eighth Defendant
(Page 2)
Catchwords:
Practice and procedure - Claim action being maintained by brother - Whether stay ought be granted - Turns on own facts
Legislation:
Nil
Result:
Stay refused
Category: B
(Page 3)
Representation:
Counsel:
Plaintiff : Mr T M Hobday
First Defendant : No appearance
Second Defendant : Mr I A Morison
Third Defendant : Mr I A Morison
Fourth Defendant : Mr I A Morison
Fifth Defendant : Mr I A Morison
Sixth Defendant : Mr I A Morison
Seventh Defendant : No appearance
Eighth Defendant : No appearance
Solicitors:
Plaintiff : Lewis Blyth & Hooper
First Defendant : No appearance
Second Defendant : Halperin Fleming Meertens
Third Defendant : Halperin Fleming Meertens
Fourth Defendant : Halperin Fleming Meertens
Fifth Defendant : Halperin Fleming Meertens
Sixth Defendant : Halperin Fleming Meertens
Seventh Defendant : No appearance
Eighth Defendant : No appearance
Case(s) referred to in judgment(s):
Bandwill Pty Ltd & Anor v Spencer-Laitt & Ors (2000) 23 WAR 390
Bradlaugh v Newdegate (1883) 11 QBD 1
Choules & Ors v Siglin & Ors [2002] WASC 230
Clairs Keeley (A firm) v Treacy & Ors (2003) 28 WAR 139
Hutley v Hutley (1873) 8 LRQB 112
(Page 4)
Case(s) also cited:
Abraham v Thompson (1997) 4 All ER 362
Brew v Whitlock [1967] VR 449
Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd (1997) 72 FCR 261
Martell v Consett Iron Co Ltd (1955) Ch 363
Re Trepca Mines Ltd (No 2) (1963) 1 Ch 199
Smits v Roach (2002) 55 NSWLR 166
Thai Trading Co (A firm) v Taylor [1998] QB 781
(Page 5)
1 MASTER SANDERSON: By notice of motion dated 9 August 2004 the second, third, fourth, fifth and sixth defendants moved to stay these proceedings on the grounds that the action by the plaintiff was being maintained by the first defendant. Alternatively, it was said that the action is champertous. In furtherance of that motion, the second to sixth defendants sought an order for discovery of documents from the plaintiff, such discovery directed squarely at the issue of maintenance and champerty. The second and sixth defendants also sought ancillary orders allowing for inspection of documents over which privilege might otherwise have been claimed. On the defendants' behalf, it was said that this additional order was necessary because communications between the plaintiff and his solicitor would disclose whether in fact the action was being maintained by the first defendant.
2 Not surprisingly the plaintiff resisted the defendants' motion. But counsel went further than that. He submitted that given the plaintiff and the first defendant are brothers, there was no basis at law upon which the action could be stayed even if it was established that the action was being maintained by the first defendant, even if it was being champertously maintained. Counsel suggested that before ordering extensive discovery I ought to determine whether, as a matter of law, the second to sixth defendants' application could succeed. Over objection from counsel for these defendants, I decided to approach the matter in this way.
3 During argument, both counsel assumed that it would be possible to make a final decision on the application for a stay if I determine that the blood relationship between the plaintiff and the first defendant gave the first defendant an interest in the litigation so that the action would not be stayed, even if a champertous relationship existed. As will become clear below, I have decided that it is not necessary to make a final decision on that point. Rather than call the parties back for further submissions with all the attendant delay involved in such a move, I have dealt with the issues as they were argued but have not in fact made a determination. Perhaps this matter serves to illustrate again the difficulties involved in teasing out a preliminary issue and assuming that determination of that issue will simplify the litigation.
4 To determine what might be referred to as this preliminary question, an assumption has to be made. The plaintiff and the first defendant are brothers. That fact has to be borne in mind. It is to be assumed that the first defendant is maintaining the plaintiff's action and that the maintenance is champertous. That is to say, the plaintiff would not be pursuing this action if he were not receiving assistance from the first
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- defendant and if the plaintiff is successful, the first defendant stands to share in the fruits of the successful litigation. I must emphasise that this is an assumption made only for the purposes of determining whether or not a stay is available as a matter of law. In fact, the plaintiff hotly disputes that the action is being maintained by the first defendant, let alone that there is champerty involved. If I determine that as a matter of law the argument is open to the second to sixth defendants, then the parties will take issue on the facts. What I was asked to determine is a pure question of law.
5 The torts of champerty and maintenance have recently been considered in detail in the decision of Clairs Keeley (A firm) v Treacy & Ors (2003) 28 WAR 139. In the course of his judgment, Murray J confirmed what he had said in Choules & Ors v Siglin & Ors [2002] WASC 230, where dealing with what amounts of maintenance and champerty, his Honour said (at [30]):
"I would summarise my conclusions in the following way: maintenance is the improper support or promotion of litigation. There would seem to be no closed category of cases where relevant impropriety of that kind might be established, but maintenance will not lie merely in the support of litigation for a party by a stranger to the litigation. It will lie in some wrongful intermeddling, some interference with the processes of the courts, some oppression or attempt at collateral advantage. Champerty is the employment of such impropriety for a share of the spoils by way of reward. In a grave or clear case such an arrangement may amount to an abuse of the processes of the court of sufficient gravity by reason of the unfairness or injustice involved, to warrant a stay of the proceedings, at least until the abuse is remedied, even in a case where it is recognised that the plaintiff has a legitimate claim which may be stifled, even permanently, by the grant of a stay."
6 The decision of Murray J in Choules v Siglin was adopted by Templeman J (at 97), with whom all other members of the Court agreed.
7 It has always been the case that maintenance will not lie if the party who is said to be maintaining the action has an interest in the proceedings. In Bradlaugh v Newdegate (1883) 11 QBD 1, Lord Colridge CJ reviews the authorities to that effect. The Chief Justice said (at 11):
"As a general rule there is no doubt that such common interest, believed on reasonable grounds to exist, will make justifiable
(Page 7)
- that which would otherwise be maintenance. The oldest authorities, authorities which hold a multitude of things to be maintenance which would not be held so now, all lay down this qualification … But then the instances that they give shew the sort of interest which is intended. A master for a servant, or a servant for a master; an heir; a brother; a son-in-law; a brother-in-law; a fellow commoner defending rights of common; a landlord defending his tenant in a suit for tithes; a rich man giving money to a poor man out of charity to maintain a right which he would otherwise lose. 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 aides him, or the interest arising from the connection of the parties, eg, as a 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."
8 This benevolent form of maintenance and champerty can be contrasted with the position of the modern day litigation funder. In Bandwill Pty Ltd & Anor v Spencer-Laitt & Ors (2000) 23 WAR 390. Templeman J was dealing with a case where there was a litigation funder involved. It is a complex decision which repays careful reading. His Honour found as a fact that the funding agreement between the litigation funder and the second plaintiff was champertous. However, his Honour went on to hold that the litigation funder had a pre-existing interest in the subject matter of the litigation sufficient to justify the maintenance of the action. His Honour determined that on an interlocutory application he would not be prepared to stay the proceedings.
9 What emerges from the Bandwill decision is that when an application is made to stay proceedings on the basis of maintenance or champerty, three factors have to be considered. First, whether or not there is in fact evidence which allows a court to conclude that the action is being maintained and champertously so. Here, that is conceded and the point need not be taken further. The second question is whether the party maintaining the proceedings has a common interest in the action. Based upon what was said by Lord Colridge in Bradlaugh v Newdegate (supra), the first defendant here does have such an interest. The mere fact of the blood relationship - or to use the words of Lord Colridge - the
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- consanguinity is sufficient. The third question is whether, in all the circumstances, a stay on an interlocutory basis is justified, given the facts of the case. This is a point which, in this case, requires further consideration.
10 This action has been running for some time. It is a bitter internecine dispute between siblings over real estate. What the second to sixth defendants now seek to do is hold up the action while they conduct a sideshow based on an allegation of maintenance and champerty. As Templeman J makes clear in Bandwill, there will no doubt be cases where a stay of proceedings will be granted on an interlocutory basis. But those situations must be rare. In my view, in a case such as this, there could be no justification for bringing this action to a halt while a complex discovery process is undertaken which may or may not throw up any evidence of maintenance and champerty. Even leaving to one side case management principles, it would be unjustified, given the nature of the dispute between the parties. On that basis then it would seem to me that even if there is a champertous agreement between the plaintiff and the first defendant, the first defendant has sufficient interest in this litigation as a brother of the plaintiff to allow the action to proceed. That is not to say that the second to sixth defendants cannot raise the issue of maintenance and champerty as part of their overall defence of this action. They can, but it must run side by side with their defence of the action on the merits. It can provide no basis for an interim stay of the proceedings.
11 Before concluding, I should refer to the decision of Hutley v Hutley (1873) 8 LRQB 112. That case concerned the enforcement of a champertous agreement whereby a cousin agreed to maintain a suit, provided that he receive half of what was recovered. All members of the Court, Blackburn, Lush and Archibald JJ agreed that despite the blood relationship between the parties, the champertous agreement could not be enforced. It would appear that it was the champertous nature of the agreement which rendered it unenforceable; it is implicit, if not stated in the reasons, that had the action simply been maintained, the arrangement would have been unobjectionable. Hutley v Hutley is mentioned twice by Lord Colridge in Bradlaugh v Newdegate (at 9 and 12). These two references appear either side of the passage from the judgment quoted above. It is not easy to see how the two cases sit happily with one another.
12 There is one point of distinction between Hutley v Hutley and the other authorities. The plaintiff in Hutley was attempting to enforce the champertous agreement. That is to say, the plaintiff was the party who
(Page 9)
- had entered into the champertous agreement with the defendant, to allow the defendant to proceed with his action. The defendant having recovered, the plaintiff sought to obtain half of the proceeds of the suit. The Court of Appeal refused to enforce that contract. It was not a case where the defendant was seeking to stay proceedings because the plaintiff was being maintained by a third party. Although the judgments do not suggest that the principle which emerges is limited to suits between the parties to the champertous agreement, the decision should perhaps be treated with some caution.
13 In any event, in this jurisdiction, it seems to me that the Bandwill decision provides a guide as to the proper approach to be adopted in cases such as this. I am satisfied that there is no basis upon which an interim stay ought be granted. That being so, I would not be prepared to order discovery on this separate issue prior to trial. If it is to be raised, it must be raised in the pleading and dealt with in the same way that all other aspects of this claim are dealt with.
14 I will hear the parties as to the precise form of orders, and as to costs.
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