Construction of Pt IVA and the Presumption
38 We then come to the construction of Pt IVA.
39 Before explaining how in legislating Pt IVA, the Parliament adopted one of a number of legislative options available to it to deal with the phenomenon of non-resident group members, it is necessary to say something about the presumption upon which BHP's Extraterritorial Operation Contention is based.
40 The presumption called in aid is but one of a number of interpretative principles applied by courts to ascertain the meaning of legislation. They are usefully collected in Chapter 5 of Pearce D, Statutory Interpretation in Australia (9th ed, LexisNexis Butterworths, 2019) (at 207-60). Ultimately, however, as was explained in Commissioner of Taxation of the Commonwealth of Australia v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 (at 519 [39] per French CJ, Hayne, Crennan, Bell and Gageler JJ):
"This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text". So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.
(Citation omitted).
41 Contrary to the criticisms made of the approach of the primary judge, this is the true beginning or starting point of the construction task, not a presumption which, depending upon the circumstances, may assist with the search for meaning.
42 The language of s 33C(1) is plain. As noted above, a class action "may be commenced by one or more of those persons [as specified in s 33C(1)] as representing some or all of them". A group member may be any person who has the characteristics specified. Further, the section is directed at the ability of a person so identified to do an act (commence a type of proceeding) in the Federal Court of Australia, being a court in respect of which the proceeding can be commenced because the Court has jurisdiction granted to it by the Parliament in respect of the relevant controversy.
43 The presumption is a general rule, as expressed by James LJ in Niboyet v Niboyet [1878] 4 PD 1 (at 7), that the legislature of a country does not normally intend to deal with persons or matters over which, according to the comity of nations, jurisdiction properly belongs to some other sovereign or state. But s 33C(1) is directed to when a particular form of proceeding can be commenced in an Australian court exercising Ch III judicial power to quell a controversy, which exists independently of the proceeding. The manner of exercise of a jurisdiction conferred on an Australian court is not, obviously enough, a matter where it might be thought jurisdiction properly belongs to a foreign sovereign or state.
44 Cases such as Barcelo v Electolytic Zinc Co of Australasia Ltd (1932) 48 CLR 391 and Meyer Heine Pty Ltd v China Navigation Co Ltd (1966) 115 CLR 10 and provisions such as s 21(1)(b) of the Acts Interpretation Act 1901 (Cth) (AIA Act) (which provides that references to localities, jurisdictions and other matters and things shall be construed as references to localities, jurisdictions and other matters and things in and of the Commonwealth) suggest a number of general principles of statutory construction: see Gleeson J, "Extraterritorial Application of Australian Statutes Proscribing Misleading Conduct" (2005) 79 ALJ 296 (at 296-300). But, as noted above, the provision to be construed here relates to how persons can start a particular form of proceeding in an Australian court. The presumption has no work to do in the search for meaning of a statutory provision of this character.
45 Moreover, when one has regard to four aspects of the relevant context and purpose, this conclusion as to the construction of the provision is fortified.
46 First, is the issue of legislative choice when a number of options were available as to how one dealt with non-resident group members. Mulheron (at 452-4) identifies and labels five approaches adopted when enacting different class action regimes:
(1) the no provision model: adopted in Pt IVA and its state cognates (other than in Victoria), the United States federal regime and some Canadian provinces (Ontario and Nova Scotia), whereby the statue is silent about non-resident class members;
(2) the global model: adopted in various Canadian provinces (Manitoba, British Columbia, Saskatchewan and Alberta), whereby the statute explicitly provides for class actions to be commenced on behalf of both domestic and non-resident class members;
(3) the compulsory opt-in model: adopted in the United Kingdom and some Canadian provinces (New Brunswick, Newfoundland and Labrador), whereby a non-resident class member must take a positive step to opt-in to the class action (although the class action is otherwise conducted on an opt-out basis);
(4) the exclusion model: adopted in Victoria (and to an extent in Alberta, Saskatchewan and British Columbia), whereby participation of non-resident class members is not excluded but they can be removed in circumstances identified in the relevant statute; and
(5) the judicial choice model: adopted in Pennsylvania, whereby the "court can (at its discretion), insist that non-resident class members proactively opt-in to the [class] action if certain legislatively-prescribed criteria are met", even where the class action is otherwise conducted on an opt-out basis.
47 The issue of how to deal with non-resident group members is relevant to any class action regime, particularly one that adopts an opt-out approach. Here at the Commonwealth level, a choice was made to include no provision excluding the possibility of non-resident group members being a type of group member which, as Mulheron explains, is a feature of all opt-out regimes.
48 A similar but not identical choice to admit the prospect of non-resident group members was made by Victoria in adopting an "exclusion model". Pt IVA does not contain an equivalent of s 33KA of the Supreme Court Act 1986 (Vic). The purpose of this provision was described recently in Asirifi-Otchere v Swann Insurance (Aust) Pty Ltd (No 4) [2021] FCA 459 (at [16] per Lee J), as an attempt to protect, in some circumstances, a group member who was unaware of the fact that a judgment had been entered. But it has a wider significance as being the provision by which the exclusion model operates. It provides that:
33KA Court powers concerning group membership
(1) On the application of a party to a group proceeding or of its own motion, the Court may at any time, whether before or after judgment, order -
(a) that a person cease to be a group member;
(b) that a person not become a group member.
(2) The Court may make an order under subsection (1) if of the opinion that -
(a) the person does not have sufficient connection with Australia to justify inclusion as a group member; or
(b) for any other reason it is just or expedient that the person should not be or should not become a group member.
(3) If the Court orders that a person cease to be a group member, then, if the Court so orders, the person must be taken never to have been a group member.
(Emphasis added).
49 Needless to say, the adoption of an exclusion model allowing the removal of group members who do not have sufficient connexion with Australia to justify inclusion, necessarily presupposes that prior to such an order being made, the person the subject of the removal order is a group member. This was not disputed by BHP.
50 As was accepted by BHP in oral argument, a consequence of the Extraterritorial Operation Contention is that, if it was correct, a non-resident with a claim within federal jurisdiction (which could be grouped with others because of its commonality) could not be a group member in a Pt IVA class action, but could nonetheless be able to advance the claim by: (a) becoming a named party to a proceeding in this Court by being named as a party in a representative proceeding or commencing an ordinary inter partes proceeding; (b) being a represented party in a Chancery rule representative proceeding commenced in the Federal Court under FCR 9.21; or (c) being a group member in a Pt 4A class action commenced in the Supreme Court of Victoria (with that Court exercising federal jurisdiction). To say that this would be a surprising outcome is somewhat of an understatement.
51 Needless to say, there is no suggestion in any of the extrinsic materials that Pt IVA would not allow a non-resident claim to be advanced in a class action when the claim could otherwise be advanced by the person with the claim in this Court by other means. Similarly, to the extent relevant, it has never been suggested that the later enacted Pt 4A accommodates a species of claims in federal jurisdiction that are not able to be advanced in this Court under Pt IVA. This is consistent with the fact there was no suggestion in the very generally worded Explanatory Memorandum to the Courts and Tribunals Legislation (Miscellaneous Amendments) Bill 2000 (Vic) to that effect. Rather, the Explanatory Memorandum notes that the purpose of s 33KA is "to reflect common law principles regarding the Court's capacity to exercise jurisdiction over the parties and subject matter of proceedings".
52 Secondly, Pt IVA was enacted with the knowledge that the foundation of jurisdiction at law was the amenability of the defendant to the command of the summons in the originating writ, which depended primarily on presence in the jurisdiction. As Viscount Haldane explained in John Russell & Co Ltd v Cayzer, Irvine & Co Ltd [1916] 2 AC 298 (at 302) "[t]he root principle of the English law about jurisdiction is that the judges stand in the place of the Sovereign in whose name they administer justice, and that therefore whoever is served with the King's writ, and can be compelled consequently to submit to the decree made, is a person over whom the Courts have jurisdiction": see also Laurie v Carroll (1958) 98 CLR 310 (at 323 per Dixon CJ, Williams and Webb JJ). Indeed, in Chancery, the mere presence of the defendant was neither a necessary nor a sufficient criterion for the assumption of jurisdiction, but jurisdiction could be more broadly founded upon the residence or domicile of the defendant, or on the cause of action arising, or the subject matter of the suit being situated, in the realm. In short, under the old Chancery procedures, the concept of jurisdiction was not based on mere presence and service, but upon a sufficient connexion being shown between the dispute and the forum: see White R W, "Equitable Obligations in Private International Law: The Choice of Law" (1986) 11 Sydney Law Review 92 (at 104).
53 Thirdly, as noted above, Pt IVA was enacted to supplement, liberalise, and improve access to, existing procedures. Even before the Rules of the Supreme Court 1883 (Eng) (the precursor of FCR 9.21), as Lord Macnaghten explained in Duke of Bedford v Ellis [1901] AC 1 (at 8), the "old" rule in the Court of Chancery was very simple and perfectly well understood and provided that if a common interest and a common grievance existed, a representative suit was in order if the relief sought was in its nature beneficial to all whom the plaintiff proposed to represent. This was irrespective as to whether the represented persons were residents. It would no doubt have surprised those responsible for the enactment of Pt IVA for it to be suggested that a consequence of the enactment would be to adopt a new grouped proceeding regime, which had a more restrictive approach as to who could be represented than had existed for centuries in representative proceedings in equity. It is difficult to reconcile such a result with the legislative purpose when one bears in mind that "the purpose of the enactment of Pt IVA was not to narrow access to the new form of representative proceedings beyond that which applied under regimes" which existed in equity's exclusive or auxiliary jurisdiction: Wong v Silkfield Pty Ltd [1999] HCA 48; (1999) 199 CLR 255 (at 267 [28] per Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ).
54 Fourthly, an aspect of the legislative choice in enacting Pt IVA was to allow an applicant to restrict the persons represented to only some of the persons who have claims, so-called "closed classes": see s 33C. Any constructional argument that non-residents cannot be group members in a class action must recognise that Pt IVA provides that class actions come in a variety of shapes and sizes. The argument cannot be assessed on the basis that all class actions are, like here, commenced on behalf of a large open class. An example taken from the facts of Hudson Ventures Pty Ltd v Colliers International Consultancy and Valuation Pty Ltd [2014] FCA 982 illustrates the reach of the submission advanced. In that case, a very small number of sophisticated investors alleged they suffered damage by reliance on a valuation provided by the respondent. The allegations gave rise to at least one common issue (the true value of the property at the time of the impugned valuation) and a class action was commenced (in which each of the group members were specified by name) and was resolved by instructions being received from each group member (a s 33V approval being granted as a consequence). One of the small number of listed group members was an investor entity not resident in Australia. As BHP again accepted in oral submissions, the logic of the Extraterritorial Operation Contention is that the inclusion of the foreign entity as a group member by the representative applicant, with the foreign entity's express consent, was not licit (although, as noted above, the foreign entity could have commenced its own proceeding against the respondent in the Court). This again would be a surprising result.
55 This last point highlights an important aspect of context in assessing the merit of the Extraterritorial Operation Contention, that is, how the Court has the authority to adjudicate the common claims of group members. Or, to put it another way, and to adopt the expression of Mulheron, what is the jurisdictional "anchor" relied upon to adjudicate the common aspect of non-resident group member claims?