Bright v Femcare Limited

Background 1 On 19 October 2001, pursuant to s 33N of the Federal Court of Australia Act 1976 (Cth) ("Act") and to notices of motion filed by the first and second respondents, I ordered that this proceeding no longer continue as a representative proceeding. The applicant sought leave to appeal from this judgment and subsequently sought a stay of the above order pending the outcome of the application for leave and any appeal. On 8 November 2001, after hearing the oral submissions of all parties, I made the order sought by the applicant and indicated that I would provide my reasons at a later date. These are my reasons. 2 The second respondent did not oppose the application for a stay. The first respondent, in opposing the application, did not take issue with the applicant's concerns relating to the possible expiry of limitation periods (see [4] below) but concentrated on the reasons why, in its submission, I should not exercise my discretion in favour of granting the stay. 3 The Court has power under s 23 of the Act to make such orders as it thinks appropriate. The Federal Court Rules (O 37 r 10) confirm that the Court may stay execution of a judgment or order. They also provide (O 52 r 17) that an appeal does not automatically operate as a stay of execution or of proceedings under the judgment appealed from. There is, as the applicant submitted, long-standing authority that, in the absence of special or exceptional circumstances, the court should not deprive a successful litigant of the fruits of his victory; The Annot Lyle (1886) 11 PD 114 at 116; Monk v Bantram [1891] 1 QB 346. Special or exceptional circumstances are not necessary however, where a stay is sought pending the outcome of an appeal. In that circumstance it is only necessary that the applicant for the stay demonstrates that such an order is appropriate in all the circumstances; Powerflex Services Pty Ltd v Data Access Corporation (1996 ) 137 ALR 498. 4 In support of the application for a stay, counsel for the applicant, Mr Bannon SC, relied on the effect of the order that the proceeding no longer continue as a representative period in relation to limitation periods relevant to individual group members. Section 33ZE(1) of the Act provides that when a representative proceeding is commenced the running of any limitation period that applies to the claim of a group member is suspended. Subsection (2) of s 33ZE provides that: "the limitation period does not begin to run again unless either the member opts out of the proceeding under section 33J or the proceeding, and any appeals arising from the proceeding, are determined without finally disposing of the group member's claim." 5 Mr Bannon submitted that it was not clear whether an order made under s 33N of the Act would result in a limitation period commencing to run again. For this reason, in the absence of a stay, group members would need to make the difficult decision whether to commence individual proceedings in order to ensure that their rights of action were preserved. Such proceedings would be a necessary precaution against the possibility of losing the appeal but would be otiose if the appeal were successful. 6 Read literally s 33ZE would seem to cover the present situation. An order that the proceeding not continue as a representative proceeding, or an appeal upholding such an order, does not determine the proceeding; Silkfield Pty Ltd v Wong [1998] FCA 1645. Therefore the circumstances in which the section provides for the limitation period to begin to run again would not seem to arise as a result of an order under s 33N. Such an order, does however, effectively exclude a group member from the proceeding and from any direct participation in the outcome of the proceeding. Moreover, it would seem to be contrary to the apparent policy of the section that the suspension of the limitation period should continue when the relevant group member can no longer participate in the proceeding. 7 It may be that the correct interpretation of the section is that an order under s 33N is sufficient to determine the proceeding in so far as it relates to a group member's claim and that therefore such an order has the finality necessary to revive the running of a limitation period. Nevertheless, even if this analysis is correct, it is difficult to see why the extension of s 33ZE's protection to the determination of any appeal would not protect the group members until that point in time. However, given that the respondents did not contest this issue I am prepared to give the applicant the benefit of the doubt and assume, for present purposes, that there is a real possibility that an order under s 33N would cause individual limitation periods to run again. The question then is whether it is appropriate to protect group members from the necessity of commencing individual proceedings pending the outcome of the appeal process. 8 The order made under s 33N is, in essence, an order about case management made in the exercise of the discretion of the Court and concerns the most efficient, economical and fair way to deal with a multiplicity of claims. It has the limited effect of preventing group members' claims being dealt with under Part IVA of the Act. It is not, in my opinion, intended to prejudice the entitlement of a group member to pursue his or her claim individually. Section 33ZE evinces the legislature's concern that an individual group member's claim should not be prejudiced by the proceedings having been brought as a representative proceeding. If there is any real possibility of such prejudice then it is appropriate that a stay be granted. 9 For these reasons I made the following orders: (a) the order made on 19 October 2001 be stayed and its operation suspended pending the determination of the applicant's application for leave to appeal in respect of that order and the determination of any appeal consequential upon the grant of such leave or until further order; (b) costs on application for stay and suspension of order to be costs on appeal. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.