Landmark decision in fishers verse Gladstone Ports Corp
GLADSTONE Ports Corporation have failed to have a class action against them involving 150 fishing industry members knocked on the head.
On top of that, Rockhampton-based Supreme Court Justice Graeme Crow has handed down a landmark decision that has set a precedent for Queensland class actions.
More than 150 people (fishers) from Queensland and New South Wales - from Bowen to Sydney including Keppel Bay and Stanage Bay operators- are seeking up to $150 million for damages, claiming dredging works carried out by GPC in 2010/11 resulted in negative water quality, poor fish health and decreased fish numbers and therefore impacting businesses along the east coast.
Barry Murphy (Hervey Bay based fishing operator) and Ted Whittingham (Gladstone based operator) allege sick fish were caught between Shoalwater Bay and Cape Moreton, and out to Swains Reef.
GPC tried to have the class action stopped by raising concerns to have the fishers' funding agreement with Litigation Capital Management (LCM) was "unenforceable" (invalid) by "reason of maintenance, champerty or public policy".
Champerty is a legal restriction - which originated in Britain in the 1600s and has been law in Queensland since the 1800s - that precludes frivolous or vexatious litigation, along with maintenance funded by a third party for a share of the lawsuit win.
Lawyers for fishers and associated businesses countered the 'concerns' by asking the court to declare the agreements valid, and determine if the 400-year-old torts of maintenance and champerty still exist as part of common law of Australia.
Alternatively, the fishers' lawyers - Clyde and Co - sought a common fund order.
A hearing was held in Rockhampton in July with Justice Crow handing down his decision yesterday in favour of the fishers, however, did not officially abolish the torts.
He wrote that the Civil Proceedings Act authorises commercial litigation funding agreements for class actions in Queensland.
Clyde and Co issued a statement on Friday stating the firm was pleased to successfully apply for a declaration that the funding agreements were enforceable.
Clyde and Co partner Maurice Thompson said: "This much-anticipated decision is critical to the operation of the class actions regime in Queensland.
"It concerns funding agreements between a litigation funder and class action group members, and in particular whether such agreements are unenforceable by reason of maintenance and champerty, or by reason of being contrary to public policy."
"The Court held that such funding agreements do not involve unlawful conduct or purpose and are not prejudicial to the administration of justice. To the contrary, they accord with the public policy of Queensland's relatively new representative proceedings regime."
He said in making these findings, the Court addressed the effect of two venerable common law doctrines on modern litigation funding for class actions.
Mr Thompson said this is the first time the Queensland courts have been asked to determine this issue.
"This decision will have a very significant influence on the conduct of class actions in Queensland going forward, and will likely have a ripple effect across other states," Mr Thompson added.
A Gladstone Ports Corporation spokesperson said as the matter now continues before the Court, we respect the integrity of the process and therefore believe it is not appropriate to make public comments at this time.
"It is important to understand that two previous class actions have been denied by the courts and Gladstone Ports Corporation (GPC) will continue to vigorously defend proceedings in relation to the 2010/11 dredging operation," the spokesperson said.
"We remain focused on maintaining jobs and prosperity for Queensland through the safe and effective operation of the Gladstone Port."
2010: Law Essentials firm in Hervey Bay approached by former clients, including plaintiffs in the current proceedings, raising concerns about the proposed significant dredging and port reclamation project to be undertaken in Gladstone Harbour. Law Essentials was retained by many operators in the region for the compensation scheme for the
Western Basin and Dredging and Disposal Project.
2011 and 2012: GPC undertook dredging in Gladstone Harbour to improve shipping lanes with spoil created from the dredging deposited behind a bund wall at Fisherman's Landing.
The plaintiffs - fishers and associated businesses - allege large volumes of spoil escaped the defective bund wall and spread across a wide geographic area, and from early September 2011, seriously depleted the quantity and quality of commercial seafood species in waters affected by the spoil.
Mr Murphy, who has operated trawlers between Fraser Island and north of Yeppoon since 1985, alleges skippers reported catching diseased fish in waters off Gladstone late 2011 and then from early 2012, the catch from Bustard Head (20 kilometres northwest of 1770) scallop replenishment area decreased considerably.
2012: Richard and Simon Whittingham who run businesses in Gladstone and are the second and third plaintiffs in the lawsuit claim a scallop processing vessel their companies had owned and operated for 25 years and had employed 80 people ceased operations in 2012 after receiving significant numbers of sick fish in the Gladstone Harbour from April 2012.
Gladstone Harbour was compulsorily closed to all fishing activity between September 16, 2011 and October 7, 2011 at which point both second and third plaintiffs ceased trading all seafood products.
In December 2011, an application was made to the Planning and Environment Court on behalf of 58 people seeking compensation for the dredging impact. The application was unsuccessful.
A second attempt was struck out in July 2014.
During 2015 and 2016, Law Essentials assisted clients to enter agreements with Clyde and Co on a "no win, no fee" basis. There was no class action regime in Queensland at this time.
November 11, 2016, the Civil Proceedings Act (Queensland) was amended to introduce class actions to Queensland.
Between December 2015 and July 2017, Clyde and Co negotiated with more than five litigation companies and had entered a 'relationship agreement' which was terminated after six months due to time limitations.
Funding agreements between fishers, Clyde and Co and LCM started to be executed in February 2018.