Project 28 Pty Ltd v Barr

Project 28 Pty Ltd (the applicant) sought to appeal decisions of Palmer J in relation to proceedings concerning a house and a lease. The respondent, Mr Barr, sought to stay the lease proceedings on the grounds of champerty and maintenance, arguing that the funding arrangements for the proceedings constituted an abuse of process.

The central legal issues before the Court of Appeal were whether the funding arrangements for the lease proceedings were champertous or otherwise amounted to an abuse of process, and if so, what orders should be made. The court was required to consider whether the funder, Austcorp, had a genuine commercial interest in the subject matter of the proceedings that was rights-based, and whether the control of the proceedings by Austcorp, a non-party, tended to produce an abuse of process.

The Court of Appeal, comprising Hodgson and Ipp JJA and Campbell AJA, reasoned that the focus should be on whether the funding arrangements tended to produce an abuse of process, rather than strictly on the existence of champerty and maintenance. The court considered that a lack of proportionality between the value of the rights and any independent subsisting right did not necessarily lead to an abuse of process. However, the court found that the control of the proceedings by a person not formally a party, who had no potential liability for the successful defendant's costs, did lead to a tendency to amount to an abuse of process.

Consequently, the application for leave to appeal in the House Proceedings was dismissed with costs. In the Lease Proceedings, leave to appeal was granted, and the appeal was upheld. The orders made by Palmer J were set aside, and the Lease Proceedings were stayed until Austcorp provided an indemnity against costs to the respondents. The respondents were ordered to pay the costs of the applications and the appeal in the Lease Proceedings.