Persona Digital Telephony Ltd v Minister for Public Enterprise

• Jurisdiction: Ireland
• Judge: Ms. Justice Donnelly
• Judgment Date: 20 April 2016
• Neutral Citation: [2016] IEHC 187
• Docket Number: [2001 No. 9223 P]
• Court: High Court
• Date: 20 April 2016

BETWEEN

PERSONA DIGITAL TELEPHONY LTD.

AND

SIGMA WIRELESS NETWORKS LTD.

PLAINTIFFS

AND

THE MINISTER FOR PUBLIC ENTERPRISE, IRELAND,

AND

THE ATTORNEY GENERAL

DEFENDANTS

AND

BY ORDER DENIS O'BRIEN

DEFENDANT

AND

MICHAEL LOWRY

THIRD PARTY

[2016] IEHC 187

[2001 No. 9223 P]

THE HIGH COURT

Practice & Procedures – O.34 of the Rules of the Superior Courts – Third party litigation funding – Champerty and maintenance – The Statute Law Revision Act 2007 – Turpis causa

Facts: The plaintiffs sought a declaration to the effect that by entering into a litigation funding with the third party, they were not engaging in an abuse of process of law or contravening rules on maintenance and champerty. The defendants contended that the plaintiff's proposed third-party agreement was void for illegality and that the Court did not have jurisdiction to entertain the present application under o. 34 of the Rules of the Superior Courts.

Ms. Justice Donnelly refused to grant the desired declaratory relief to the plaintiffs. The Court held that it was well-settled law that third-party litigation funding agreement in return for a share of the proceeds where the third party had no independent or bona fide interest constituted an abuse of process. The Court opined that in the absence of any challenge to the constitutionality of the offences of torts of maintenance and champerty, it was not appropriate for the Court to make a finding in that regard. The Court held that since the enactment of the Statute Law Revision Act 2007, it had been established that indulging in maintenance and champerty would constitute legal impropriety and the Court could not depart from that rule. The Court opined that it was for the appellate court to adopt the modern outlook on the concept of propriety having regard to the changing ideas on public policy and not the High Court.

JUDGMENT of Ms. Justice Donnelly delivered the 20th day of April 2016.

1 This application comes before the court by way of notice of motion dated the 25th March, 2015, whereby the plaintiffs seek, inter alia, the following relief:-

‘An Order, by way of a Declaration or otherwise, pursuant to the inherent jurisdiction of this Honourable Court and/or Order 34 of the Rules of the Superior Courts, that in entering into this litigation funding arrangement with Harbour Fund III, L.P., the Plaintiffs are not engaging in an abuse of process and/or are not contravening rules on maintenance and champerty.’

2 The relevant facts and background to this application are set out in detail in a previous judgment of this Court, Persona Digital Telephony Ltd. v. Minister for Public Enterprise (No. 1) [2015] IEHC 457, on a preliminary issue to this motion, which resulted in the defendants being granted disclosure of the litigation funding agreement between the plaintiff and Harbour III L.P. subject to certain limitations. As was observed by the Supreme Court in the decision of Comcast International Holdings Inc. and Ors. v. Minister for Public Enterprise and Ors.; Persona Digital Telephony Ltd. and Anor. v. Minister for Public Enterprise and Ors. [2012] IESC 50, and indeed this Court in the preliminary judgment, this is a unique case. Apart from the factors set out by the Supreme Court, this case is also noteworthy as it is the first case to come before the courts in Ireland directly concerning the acceptability of professional third party litigation funding.

3 In contesting the plaintiffs' application, the defendants, including the State defendants, submitted that maintenance and champerty are criminal offences as well as torts in Ireland. Maintenance and champerty, they submit, are generally described as common law offences which have had statutory recognition for hundreds of years. The State defendants relied upon the Maintenance and Embracery Act 1634, which applied certain Acts of the English Parliament then in operation to Ireland. The Statute Law Revision Act 2007, which repealed all public Acts enacted prior to 1922 save for a ‘white list’ of statutes specifically reserved, retained three statutes concerned with maintenance and champerty. These statutes are the Maintenance and Embracery Act 1540; the Maintenance and Embracery Act 1634; and, the Statute of Conspiracy (Maintenance and Champerty) of unknown date.

4 According to the State defendants, s. 1 of the Maintenance and Embracery Act, 1634 adopted four such statutes as passed in the English Parliament, namely:

(i) the Maintenance and Champerty Act 1275;

(ii) the Champerty and Embracery Act 1300;

(iii) the Statute of Conspiracy (Maintenance and Champerty) of unknown date

(iv) the Maintenance Act 1326.

The Court is satisfied that at least one more then extant statute was also adopted by the Act of 1634; namely, the Ordinance Concerning Conspirators 1305 which provided a statutory definition of champertors.

5 The defendants also relied upon the fact that maintenance and champerty are recognised torts in this jurisdiction. The State's submissions recognised that ‘it is also difficult to discover the origin of the torts of maintenance and/or champerty.’ Reference was made to a submission of counsel in argument in British Cash and Parcel Conveyors Ltd v. Lamson Store Service Company Ltd. [1908] 1 K.B. 1006, decided over one hundred years ago, to the effect that ‘maintenance was a common law wrong giving rise to a civil action before it was made by statute a criminal offence.’ According to the State defendants:-

‘[w]hile the accuracy of the foregoing is difficult to affirm it is nonetheless clear that the torts at issue have been part of the infrastructure of our litigation system since in or around the time of its foundation.’

6 A very brief synopsis of the plaintiffs' arguments is that the doctrines of maintenance and champerty operate to prevent any undermining of the administration of justice and they submitted that the doctrines should be applied in light of modern conceptions of propriety. The plaintiffs submitted that, despite juridical statements that maintenance is the support of litigation by a stranger without just cause and that champerty is an aggravated form of maintenance where the litigation is supported in return for a share of the proceeds, these features do not set the limits of what the doctrines mean. The plaintiffs submitted that the professional third party funding scheme must be considered in context and the question should be asked whether in the round and on the whole the transaction amounts to unlawful maintenance/champerty or whether it will enable a claim of great public importance to proceed and ensure the attainment of the constitutional guarantee of access to justice.

7 With equal brevity, the defendants submitted that the torts of maintenance and champerty are still extant and that the courts, including the Supreme Court, have defined maintenance and champerty in terms that clearly encompass the funding agreement at issue in these herein proceedings. According to the defendants' submissions, on long settled principles, the funding agreement is void for illegality. The defendants submitted that the plaintiffs were asking the court to vary the scope of the offences and torts of maintenance and champerty; an action which is beyond the jurisdiction of the court.

PRELIMINARY OBJECTION

8 A preliminary objection was raised by the defendants regarding the jurisdiction of the court to make the declaration set out in para. 1 above. Order 34 of the Rules of the Superior Courts governs the procedures to be adopted when making an application regarding a special case. The defendants argued that the application did not comply with the procedural requirements of O. 34; one of those requirements being that both parties concur in the statement of a question of law to the court. There is no concurrence between the parties here; therefore, this Court cannot proceed under O. 34.

9 Cognisant of the restrictions placed upon the Court in this regard, the plaintiffs submitted that O. 34 is merely illustrative of the fact that the court has a jurisdiction to grant declaratory orders. Counsel relied upon the inherent jurisdiction of the court to grant such declaratory orders, such jurisdiction said to be evidenced under O. 19 r. 29 which enables the court to make declarations as to rights, both in relation to civil and criminal law. Order 19 is derived from s. 155 of the Courts of Chancery (Ireland) Act 1867 and was repeated in the Rules of the Superior Courts in 1905, 1963 and again in their present edition.

10 The plaintiffs relied upon the decision of Clarke J. in Omega Leisure Ltd. v. Superintendent Charles Barry and Ors. [2012] IEHC 23 which examined whether the plaintiff, who sought to establish a bingo hall, was entitled to conduct gaming and lotteries in circumstances where it did not hold such a licence but acted as an agent for those who did. The defendants in Omega contested whether Omega Leisure Ltd. had standing to raise the issues by way of seeking declaratory relief. Clarke J. stated, at para. 2.3:-

‘The State argued that the court could not give, as it were, a carte blanche clearance to Omega certifying, in effect, that its activities were lawful. That point was accepted in part by Omega but nonetheless the principal aspect of the dispute between the parties under this heading was as to whether there was anything, in principle, unlawful about a company such as Omega conducting, on a large scale and on an agency basis, regular bingo sessions on behalf of charitable organisations who had the benefit of an appropriate licence under the 1956 Act.’

Clarke J. quoted from Henchy J., speaking on behalf of the Supreme Court, in Tormey v. Ireland [1985] I.R. 289 as he considered the full original jurisdiction of the High Court when a jurisdiction had been granted to another court, the final sentence of which is particularly...