Case: Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41
Outcome: considered
latter proposition was cited with approval by Ipp JA, giving the leading judgment, in Project 28 Pty Ltd v Tim Barr Pty Limited [2005] NSWCA 240 at [40] - [41] . Ipp JA noted that such an interest, as is described by Lord Roskill, had to be a 'legitimate interest' which was distinct from the benefit the person supporting the action sought to derive from the litigation and something beyond a mere personal interest in profiting from the outcome of the proceedings ([2005] NSWCA 240 at [41]; see also Zhu v Domson Pty Ltd [2006] NSWCA 232 at [18] - [19] per Spigelman CJ). Since judgment was reserved in this matter, the High Court has decided Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41. There, Gummow, Hayne and Crennan JJ referred to this issue, although, as Callinan and Heydon JJ pointed out it only 'received some mention before this Court' (see [2006] HCA 41 at [260] ). Gleeson CJ and Kirby J did not discuss this point. Gummow, Hayne and Crennan JJ observed that the House of Lords' conclusion in Trendtex Trading Corporation v Credit Suisse [1982] AC 679 was that an agreement permitting a bank, which guaranteed the costs of a party to litigation in which the bank itself was also interested, to sell the party's claims in a litigation 'savours of champerty', 'since it involves trafficking in litigation a type of transaction which, under English law, is contrary to public policy' ([2006] HCA 41 [79]). Accordingly, the House of Lords held the assignment of the cause of action there was void. However, as Gummow, Hayne and Crennan JJ pointed out their Lordships' decision to stay the proceedings was founded upon an exclusive Swiss law jurisdiction clause, not upon any consideration of public policy concerning maintenance or champerty ([2006] HCA 41 at [81]). They noted that there was no case where maintenance or champerty had been held to be defence to, or reason enough to stay, an action that was maintained ([2006] HCA at [82]). Ultimately, Gummow, Hayne and Crennan JJ (with whom Gleeson CJ (at [1]) and Kirby J (at [146]) agreed on this issue) held that there was no abuse of process involved in someone seeking out those who may have claims, offering terms which gave the seeker control of the litigation and would also yield to the seeker, as it hoped and expected, a significant profit ([2006] HCA 41 at [88]). Callinan and Heydon JJ said ([2006] HCA 41 at [261]): 'If the transaction between [the seeker] and each retailer had taken the form of an assignment to [the seeker] so that it could sue as plaintiff, the claim would fail because the assignment would be ineffective. Whether in an endeavour to escape that consequence, or for some other reason, the transaction took a different form.' Callinan and Heydon JJ said that there was a serious question whether the Court of Appeal had been correct in concluding that, on the issue of the assignability of the cause of action, which had not been debated before it and of which only some mention had been made before the High Court, the retailer's action for money had and received was historically a claim in debt which was readily assignable without engaging the principles of about trafficking in litigation ([2006] HCA 41 at [260]). They referred, among other things, to what Williams, Webb and Kitto JJ had said in Poulton v The Commonwealth [1952] HCA 70 ; (1953) 89 CLR 540 at 602.