High Court strikes out a Dublin property developer’s claim of maintenance and champerty
The plaintiff property developer in these proceedings alleged that the defendants, who were local residents opposed to a proposed development, were canvassing for illegal litigation funding in their challenge against the developer’s planning permission for a strategic housing development in Killiney, County Dublin.
In striking out the proceedings, Ms Justice Egan held that she had “no hesitation whatsoever” in striking out the proceedings as bound to fail, since the defendants were entitled to canvass local residents for support in the judicial review. The High Court said it was, “fully satisfied that the plaintiff had not identified any evidence or any reasonable basis to believe that evidence will become available such as might establish a stateable case of maintenance and champerty.”
Background
In July 2021 the plaintiff, Atlas GP Limited was granted planning permission for a strategic housing development in Killiney, County Dublin. The defendants were local residents opposed to the development. In August 2021, the defendants issued judicial review (“JR”) proceedings seeking to challenge the permission. The leave application was adjourned to after the commencement of term in October.
In advance of October, the developer became aware of a flyer which was circulated in the local community which sought support for the JR proceedings. The flyer was circulated by the Watson Killiney Residents Association and gave information about the planning permission and proposed development. In particular, the flyer stated that its legal team believed that there was a strong case for overturning the permission and that the cost of JR proceedings was approximately €60,000. The flyer sought community support to assist in raising funds for the JR proceedings.
Atlas wrote to each of the applicants seeking the names, addresses and descriptions relating to the named residents’ associations and details of funding. The defendant’ solicitor refused to provide the information.
The present proceedings claiming damages for maintenance and champerty issued in November 2021. The motion also sought to compel the defendants to supply the names and descriptions of all parties funding the JR proceedings.
The defendants issued a notice of motion seeking to strike out the champerty proceedings as bound to fail and relied on the flyer and the alleged failure by the defendants’ solicitor to provide the requested information in their argument that the claim for champerty and maintenance was well-founded.
High Court
Ms Justice Egan began by commenting on the submission that the proceedings should be regarded as strategic litigation against public participation. It was held that the jurisdiction to strike out the proceedings was an adequate mechanism to vindicate the defendants’ constitutional right of access to the courts.
Ms Justice Egan held that maintenance involved a third party who did not have a direct interest in litigation giving improper support to a party, while champerty involved a third party receiving a share of damages if the litigation succeeded (Persona Digital Telephony v. Sigma Wireless Network [2017] IESC 27). The court observed that the common law had relaxed the prohibition on third party support for litigation over time (SPV OSUS LTD v HSBC International Trust Services [2018] IESC 44) and that tolerance had been extended to litigation brought by a community groups to pursue a common interest (Martell v. Conset Iron Company Ltd [1955] Ch. 363).
The court held that Atlas’s claim was bound to fail, having regard to the content of the flyer. The flyer was seeking local support for the JR proceedings from residents in the area who would have an interest in the outcome. A fundamental element of maintenance and champerty was that the third party had no interest in the outcome of the case and Atlas had failed to establish this. The resident’s association and the local community clearly had a legitimate interest in the JR proceedings and would meet the “sufficient interest” test in Grace and Sweetman v. An Bord Pleanála [2017] IESC 10, the Court said.
Conclusion
In light of the court’s findings, Ms Justice Egan had “no hesitation whatsoever” in striking out the claim as bound to fail. Therefore, the court did not need to consider if the litigation was issued for an improper purpose.
Finally, the court observed that there was an irony in submissions from Atlas that the striking out of proceedings would infringe its right of access to the court where the admitted purpose was to restrain the JR proceedings. Notably, Atlas had not brought proceedings against the residents’ associations and instead pursued the applicants in the JR proceedings.
The full judgment in Atlas GP Limited –v- Kelly & Ors [2022] IEHC 443 is available by clicking here