The Gazette 1994

GAZETTE

NOVEMBER 1994

be the heirs to an estate but they did not

at this stage disclose the identity of the

deceased. On 17 and 18 February 1988

the plaintiffs entered into agreements

with the defendants whereby the defen-

dants agreed to give the plaintiffs a one-

third share of any sums they might sub-

sequently inherit from the estate in re-

turn for which the plaintiffs would dis-

close the identity of the deceased and

assist in the presentation of the defen-

dants' claim. It was a term of these

agreements that the proper law of the

contract was to be the law of England

and Wales. The plaintiffs then informed

the defendants of the identity of the

deceased and gave considerable co-op-

eration and assistance in the prepara-

tion and the presentation of the defen-

dants' claims. On 1 December 1989 the

New Jersey court decided that the de-

fendants and Mr Mervyn Buckle were

the heirs entitled to the estate. The gross

funds available for distribution

amounted to $930,674.98 which, after

proper deductions, left a sum of

$763,758.87 available for distribution

amongst the four next-of-kin. This sum

was distributed to the defendants but

no money was paid over to the plaintiffs

as the defendants denied the plaintiffs'

entitlement to a fee based on their

shares in the estate on the grounds that

the agreements were unenforceable be-

cause they were champertous. How-

ever, they accepted the plaintiffs' enti-

tlement to fees on a

quantum meruit

ba-

sis. The plaintiffs claimed that the law

of champerty no longer applied to these

types of contracts, that in any event the

contracts were not champertous, that

since the agreements related to pro-

ceedings outside Ireland they could not

be said to be contrary to Irish public

policy and that the courts should apply

the proper law of the contract which

was that of England and Wales. The

defendants claimed that the court

should first consider whether the agree-

ments were contrary to Irish public pol-

icy and if they were should refuse to

enforce them irrespective of what the

proper law says.

Held by Costello J in dismissing the

plaintiffs' claim: (1) The agreements

which the law of champerty condemns

are agreements by which one party

agrees to maintain litigation in which

he has no genuine interest in considera-

tion of a promise to receive a share of

the proceeds of the litigation. (2) The

law condemns champertous agree-

ments because of the dangers associ-

ated with such agreements, namely the

temptation that the maintainer might

inflame the damages, suppress evi-

dence or suborn witnesses. (3) These

agreements were contrary to public pol-

icy because, if these associated dangers

were realised, they could compromise

the proper administration of justice by

means of unjust adjudications. (4) There

was no reason for restricting the appli-

cation of these principles to heir-locator

agreements concerning estates situated

in Ireland since the dangers with which

such agreements are associated still ex-

ist and can equally arise in respect of

estates located abroad as litigation in

relation to them may still come before

Irish courts. It followed that Irish public

policy should condemn heirlocator

agreements whether they related to es-

tates located in Ireland or abroad. (5)

Therefore the agreements under which

the plaintiffs claimed were unenforce-

able under Irish law because they were

champertous. Furthermore, such agree-

ments were contrary to Irish public pol-

icy and therefore Irish law should be

applied to these contracts whether or

not they were enforceable under their

proper law.

Per curiam

: The proper law

of these agreements was the law of Eng-

land and Wales which regarded such

agreements as being contrary to public

policy. Hence they were unenforceable

under their proper law.

Per curiam:

Even if the

lex loci solutionis

of these

contracts was New Jersey law, as these

agreements were only unenforceable

and contrary to public policy in New

Jersey and not illegal this would not in

itself constitute a sufficient reason for

refusing to enforce the contracts in Ire-

land.

Reported at [1994] 1 ILRM 276

Patrick Murphy v. Anthony M.D.

Kirwan: Supreme Court (Finlay CJ,

O'Flaherty and Egan JJ) 29 July 1993

Practice - Discovery - Privilege - Claim for

specific performance - Counterclaim - Al-

legation of malicious prosecution and abuse

of court process - Plaintiffs action dis-

missed - Discovery sought of documents

relating to legal advice obtained by plaintiff

- Whether professional privilege applied -

Professional privilege not to be applied

where this would be injurious to interests of

justice

Facts The plaintiff sought an order for

specific performance against the defen-

dant in respect of an alleged agreement

for the sale of shares in a company. The

defendant brought a motion to dismiss

the action on the grounds that it dis-

closed no cause of action or, alterna-

tively, was vexatious and an abuse of

the process of the court. This motion

was dismissed. The defendant then en-

tered a defence and counterclaim. Upon

the conclusion of the plaintiff's evi-

dence at the hearing of the case, the trial

judge acceded to the defendant's appli-

cation to dismiss the action and directed

that the counterclaim should be ad-

journed

sine die

with liberty to re-enter.

The defendant sought further and bet-

ter discovery in relation to the counter-

claim, including all documents relating

to legal advice sought or obtained or

given to the plaintiff prior to and during

the proceedings. The plaintiff objected

to the production of the relevant docu-

ments on the basis of legal privilege.

Costello J ordered that the documents

should be produced for inspection on

the grounds that the exception to the

principle of professional privilege ap-

plied in the case of a claim for malicious

prosecution or an abuse of the process

of the court. The plaintiff appealed.

Held by the Supreme Court (Finlay CJ

and O'Flaherty J; Egan J dissenting) in

dismissing the plaintiff's appeal: (1)

Professional privilege must not be ap-

plied so as to be injurious to the interests

of justice and to those in the administra-

tion of justice where persons have been

guilty of conduct of moral turpitude or

of dishonest conduct even though it

may not be fraud. (2) It is injurious to

the interests and administration of jus-

tice that a person would falsely and

maliciously bring an action and abuse

for an ulterior or improper purpose the

processes of the court. (3) In a claim for

malicious prosecution or abuse of the

processes of the court, the first require-

ment, though not necessarily a proof in

itself, is to establish that the claim as

brought failed in its entirety or that it

was bound to do so. (4) The second

requirement which likewise does not

necessarily constitute proof of mali-

cious prosecution or an abuse of the

processes of the court, is to establish

that the claim's failure was not derived

from the resolution by the court of a

conflict of evidence regarding primary

facts or arose from a special legal de-

fence. (5) Where a person makes a claim

of malicious prosecution or abuse of the

processes of the court and seeks discov-

ery notwithstanding a claim for profes-

sional privilege in respect of a legal ad-

viser's communications, he does not

have to prove the allegations which he

is making as a matter of probability or

in accordance with the onus of proof

appropriate to the total hearing of the

action. Instead it is sufficient that the

allegations are supported to an extent

that they are, in the view of the court,

viable and plausible. (6) In the present

case there was sufficient evidence of a

plausible or viable case to support the

defendant's claim to warrant the mak-

ing of the order sought.

Reported at [1994] 1 ILRM 293