Bright v Femcare Ltd

Nature of proceeding 3 Although the precise claims made by the applicant are of little importance to the question whether either of the declarations sought should be made, it is desirable to describe them in outline and to indicate how it is that the jurisdiction of the Court is said to be attracted. Femcare is said to have been the manufacturer of equipment - clips and applicators - used in procedures the purpose of which was to sterilise women by occluding the fallopian tubes. The second respondent is said, at material times, to have been the distributor, in Australia, of that equipment. It is claimed that the applicators require regular recalibration, without which there is a risk that, when they are used to apply clips, the clips will not close sufficiently to occlude the tubes. It is said that the respondents made certain representations concerning the equipment and that in making those representations the respondents contravened s 52 of the Trade Practices Act 1974 (Cth); particularly, it is said that manuals and other material provided by the respondents did not adequately warn of the need of regular recalibration or of the consequences which might follow if it were not carried out. The respondents are said also to have infringed s 53(c) and s 75AD of the Trade Practices Act. Those claims based on the Trade Practices Act attract the Court's jurisdiction. In addition, a common law duty of care and breach of that duty are pleaded. The applicant claims to have suffered loss and damage as a result of the conduct alleged against the respondent; and as well as claiming damages in respect of her own loss she claims on behalf of a group of women who underwent sterilisation procedures in Australia in which the equipment was used and who have suffered loss and damage "by reason of the applicator being out of calibration or there being an increased likelihood of the applicator being out of calibration". 4 The substantial common issues of law and fact to which the claims of the applicant and the group members are said to give rise include whether, as a matter of fact, the applicator can become out of calibration in certain circumstances so as to increase the risk of failure of sterilisation procedures; whether the conduct alleged against the respondents was misleading or deceptive; whether the loss or damage alleged to have been suffered by the applicant and group members was caused by the conduct complained of; whether there was a representation infringing s 53(c) of the Trade Practices Act; whether the equipment was defective within the meaning of s 75AD of the Trade Practices Act; and whether the respondents owed duties of care to the applicant and group members and breached those duties. 5 That summary is based on the proposed further amended statement of claim. That document has not yet been filed, but it represents the applicant's most recent considered statement of the claims which she wishes to pursue for herself and on behalf of the group members.

Part IVA 6 It is unnecessary to summarise the provisions at length, but it is desirable to refer to those which received particular attention in argument. Section 33C is important because it tells us in what circumstances a representative proceeding may be commenced under Part IVA and because of its broad terms. It provides: "33C (1) Subject to this Part, where: (a) 7 or more persons have claims against the same person; and (b) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and (c) the claims of all those persons give rise to a substantial common issue of law or fact; a proceeding may be commenced by one or more of those persons as representing some or all of them. (2) A representative proceeding may be commenced: (a) whether or not the relief sought: (i) is, or includes, equitable relief; or (ii) consists of, or includes, damages; or (iii) includes claims for damages that would require individual assessment; or (iv) is the same for each person represented; and (b) whether or not the proceeding: (i) is concerned with separate contracts or transactions between the respondent in the proceeding and individual group members; or (ii) involves separate acts or omissions of the respondent done or omitted to be done in relation to individual group members."

The application must describe or identify the group members, specify the nature of the claims made on their behalf and the relief claimed and specify also the questions of law or fact common to the claims of the group members (s 33H(1)); but the group members do not have to be named nor need their number be specified (s 33H(2)). A person may become a group member without his or her consent (s 33E) but there is provision for opting out: s 33J requires the Court to fix a date by which group members must opt out, if they choose to do so. Section 33X requires the giving of notice to group members of a number of matters. The notice provisions in s 33X and s 33Y received a good deal of attention in argument and it is desirable to set them out in full.

"33X (1) Notice must be given to group members of the following matters in relation to a representative proceeding: (a) the commencement of the proceeding and the right of the group members to opt out of the proceeding before a specified date, being the date fixed under subsection 33J(1); (b) an application by the respondent in the proceeding for the dismissal of the proceeding on the ground of want of prosecution; (c) an application by a representative party seeking leave to withdraw under section 33W as representative party. (2) The Court may dispense with compliance with any or all of the requirements of subsection (1) where the relief sought in a proceeding does not include any claim for damages. (3) If the Court so orders, notice must be given to group members of the bringing into Court of money in answer to a cause of action on which a claim in the representative proceeding is founded. (4) Unless the Court is satisfied that it is just to do so, an application for approval of a settlement under section 33V must not be determined unless notice has been given to group members. (5) The Court may, at any stage, order that notice of any matter be given to a group member or group members. (6) Notice under this section must be given as soon as practicable after the happening of the event to which the notice relates. 33Y (1) This section is concerned with notices under section 33X. (2) The form and content of a notice must be as approved by the Court. (3) The Court must, by order, specify: (a) who is to give the notice; and (b) the way in which the notice is to be given; and the order may include provision: (c) directing a party to provide information relevant to the giving of the notice; and (d) relating to the costs of notice. (4) An order under subsection (3) may require that notice be given by means of press advertisement, radio or television broadcast, or by any other means. (5) The Court may not order that notice be given personally to each group member unless it is satisfied that it is reasonably practicable, and not unduly expensive, to do so. (6) A notice that concerns a matter for which the Court's leave or approval is required must specify the period within which a group member or other person may apply to the Court, or take some other step, in relation to the matter. (7) A notice that includes or concerns conditions must specify the conditions and the period, if any, for compliance. (8) The failure of a group member to receive or respond to a notice does not affect a step taken, an order made, or a judgment given, in a proceeding." 7 Section 33Z empowers the Court to do a number of things: it may determine an issue of law or of fact, make a declaration of liability, grant equitable relief and award damages. Section 33ZB provides that a judgment given in the representative proceeding must describe or otherwise identify the group members who will be affected by it and binds all such group members other than any who have opted out under s 33J. 8 The effect of those provisions may be partially summarised as follows: proceedings may be begun to enforce a claim which a person has without that person's knowledge or consent; notice must be given of the commencement of the proceeding and of the right to opt out; but because of the kinds of notice contemplated and the general rule that personal notice is not to be given to group members individually, the individual group member may not discover that the proceeding has begun or learn of the right to opt out; but he or she will be bound by a judgment given in the proceeding, which may, of course, be an adverse judgment. 9 Some of the other provisions of Pt IVA should be mentioned. Section 33N gives the Court power to order that a proceeding no longer continue as a representative proceeding where it is satisfied that such an order should be made in the interests of justice for any of four specified reasons: the costs of a representative proceeding are likely to exceed the costs of separate proceedings; all the relief sought can equally be obtained in a proceeding other than representative proceedings; the representative proceeding will not provide an efficient and effective means of dealing with the claims of group members; or it is otherwise inappropriate that the claims be pursued by means of a representative proceeding. Then, if it appears to the Court that the determination of common issues will not finally determine the claims of all group members, the Court has power to give directions in relation to the determination of the remaining issues (s 33Q) including, where appropriate, directions establishing sub‑groups; and (s 33R) the Court may permit an individual group member to appear in the proceeding for the purpose of determining an issue that relates only to the claims of that member; or, where that cannot conveniently be done, the Court may (s 33S) make directions relating to the commencement of separate proceedings. Section 33T empowers the Court, if it appears that a representative party is not able adequately to represent the interests of the group members, to substitute another group member as representative. The settlement or discontinuance of a representative proceeding requires the approval of the Court (s 33V). Settlement of the representative party's individual claim also requires (s 33W) the leave of the Court and, if leave is given, the Court may substitute another group member as representative party.

Exercise of judicial power? 10 Femcare's submissions were put in two ways. First, the Court has, and can have, jurisdiction only in relation to "matters": Constitution, ss 75, 76, and 77. Part IVA, it was said, purports to empower the Court to determine proceedings relating to subject matter other than "matters". Secondly, it was submitted that Pt IVA requires or permits the Court to determine representative proceedings in ways which are incompatible with proper judicial process and, therefore, with the exercise of the judicial power vested in it. 11 Particular aspects of Pt IVA provided the foundation for both submissions, though the second submission drew upon a wider range of provisions than the first. Because a representative proceeding may be commenced on behalf of group members without their knowledge and without their consent, because group members will be bound by a judgment in the proceeding unless they opt out, and, it was said, because the notice requirements are not likely to result in all group members hearing of the proceeding - indeed they make it likely in most cases that numbers of them will not - the prospect is that a claim will be asserted and maintained on behalf of certain group members and pursued to judgment in circumstances where those group members, though bound by the judgment, will never have had an opportunity to withdraw from, participate in or influence the conduct of the proceeding. In such circumstances, it was said, there is in fact no controversy between the group members and the respondent and therefore, in relation to those group members, no "matter". Equally, because such a group member is effectively deprived of a right to appear and to make effective decisions concerning the prosecution of his or her claim, an essential element of the judicial process - the right to be heard - is lacking. Even in relation to issues relating only to the claims of the group member, he or she has no right to appear or be heard but might do so (s 33R) only if the Court exercises its discretion favourably. And, in relation to common issues, the conduct of the litigation is entirely under the control of the representative party, subject only to the Court's discretionary powers under, particularly, s 33T and s 33V. 12 It is not difficult to find in the cases descriptions of "matters" by reference to justiciable controversies and of the judicial process by reference to the quelling of such controversies: see, by way of examples only, South Australia v Victoria (1911) 12 CLR 667 at 675 per Griffith CJ and at 709 per O'Connor J; Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 492 per Gibbs J; Bass v Permanent Trustee Co Ltd (1999) 161 ALR 399 at 413, 414 per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ. In Fencott v Muller (1983) 152 CLR 570 at 608 Mason, Murphy, Brennan and Deane JJ, quoting from the judgment of Griffith CJ in Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357 described, as the primary character of federal judicial power, "the power of a sovereign authority 'to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property' ". Their Honours continued: "The unique and essential function of the judicial power is the quelling of such controversies by ascertainment of the facts, by application of the law and by exercise, where appropriate, of judicial discretion." 13 Certainly it follows - Bass is a recent illustration of this - that a hypothetical question is not a "matter", or an appropriate subject matter for the exercise of judicial power. But it does not follow, I think, that there is no matter unless there is an actual and conscious dispute or disagreement between each person whose right is asserted and each other person interested in denying that right. It is of course true - as the Solicitor‑General, who appeared on behalf of the Attorney‑General of the Commonwealth as intervener, pointed out - that a judgment entered by consent is an exercise of judicial power (Harris v Caladine (1991) 172 CLR 84); relief in some circumstances may be granted on ex parte application; and a binding judgment may be entered against a party on whom process has been served by way of substituted service and who is ignorant of the proceeding. 14 But those instances, and others which were referred to, are some distance from the present case. More significant to an understanding of what is meant by "controversy" (itself, of course, a term used in Art iii sec 2 of the United States Constitution) is the context in which the term is used in authoritative discussions of what is meant by "matter" and what the exercise of judicial power involves. In Re Judiciary and Navigation Acts (1921) 29 CLR 257 Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ said, at 265‑267: "In our opinion there can be no matter within the meaning of [s 76 of the Constitution] unless there is some immediate right, duty or liability to be established by the determination of the Court. If the matter exists, the Legislature may no doubt prescribe the means by which the determination of the Court is to be obtained, and for that purpose may, we think, adopt any existing method of legal procedure or invent a new one. But it cannot authorise this Court to make a declaration of the law divorced from any attempt to administer that law. The word 'matter' is used several times in Chapter III of the Constitution …, and always, we think, with the same meaning. The meaning of the expression 'in all matters between States' in sec. 75 was considered by this Court in [South Australia v Victoria]. Griffith CJ said that it must be a controversy of such a nature that it could be determined upon principles of law, and in this Barton J agreed. O'Connor J said that the matter in dispute must be such that it can be determined upon some recognised principle of law. Isaacs J said that the expression 'matters' used with reference to the Judicature, and applying equally to individuals and States, includes and is confined to claims resting upon an alleged violation of some positive law to which the parties are alike subject, and which therefore governs their relations, and constitutes the measure of their respective rights and duties. … All these opinions indicate that a matter under the judicature provisions of the Constitution must involve some right or privilege or protection given by law, or the prevention, redress or punishment of some act inhibited by law. The adjudication of the Court may be sought in proceedings inter partes or ex parte, or, if Courts had the requisite jurisdiction, even in those administrative proceedings with reference to the custody, residence and management of the affairs of infants and lunatics. But we can find nothing in Chapter III of the Constitution to lend colour to the view that Parliament can confer power or jurisdiction upon the High Court to determine abstract questions of law without the right or duty of any body or person being involved." 15 And, in language reflected in the brief passage I have quoted from the joint judgment in Fencott v Muller, Kitto J said in R v Trade Practices Tribunal; ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374: "Thus a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons. In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which, so long as it stands, entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist."

See also Bass at 413, 414 where that passage was cited and applied.

16 In a representative proceeding the representative party, for himself or herself and on behalf of group members, asserts rights and seeks relief against a party whose interest is to deny the rights asserted and to dispute the claims for relief. As between, on the one hand, the representative party and each group member and, on the other, the respondent, the representative proceeding will involve the finding of facts (unless the facts are agreed), the ascertaining of the relevant law and the application of the law to the facts leading, subject to the exercise of any discretion which may arise, either to relief or to its refusal. What I have described, in my view, clearly involves the exercise of judicial power in relation to matters. The culmination of the process is a binding judgment. That, in my view, is properly to be seen as quelling a controversy between each group member bound by the judgment and each other person (particularly, of course, the respondent) whom it binds. 17 There was another aspect of the submission that Pt IVA provides for the determination of issues going beyond those which form part of a matter. It was said that the particular facts of each individual claim of each group member were not, in a representative proceeding, required to be before the Court so that it could not be determined whether each such claim amounted to a "matter"; and individual claims could not be determined, in a constitutionally permissible way, unless the particular facts were before the Court. Further, the High Court has held in Wong v Silkfield Pty Ltd [1999] HCA 48 that common issues need only be issues which are "real or of substance" (par 28), not necessarily "major" or "core" issues (par 30); thus, if common issues are determined where the facts relevant to individual claims are not before the Court, the Court, in determining common issues, is likely to be making decisions "not based on facts found or agreed" and thus "purely hypothetical" (Bass at 415). 18 I do not accept that submission. There is nothing in Pt IVA which dispenses with the requirement that the applicant plead the material facts on which all claims for relief are made on behalf of each group member. To the extent that that is not done the pleading, like a pleading in any other proceeding, is liable to be struck out. Equally, if a claim made on behalf of any group member is to succeed, the factual basis of each element of the cause of action will have to be established by evidence: Qantas Airways Ltd v Cameron (1996) 66 FCR 246 at 298. If that is not done, in relation to a claim of any group member, then of course that claim will fail. There is, in my view, nothing hypothetical about that process or about any stage of it. Nor, in particular, is there in my view anything hypothetical about the determination of common issues. Of course those issues, like any others, must be decided on the basis of facts found or agreed; and they are not hypothetical simply because, if the claim of any particular group member is to succeed, other facts must be found or agreed, and other issues must be determined, as well. 19 Femcare's second submission, that Pt IVA requires or authorises the Court to adopt procedures which are antithetical to proper judicial process, raises, in my view, questions of greater difficulty. The principle on which Femcare relied was stated in Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 by Gaudron J at 22 as follows: "So critical is the judicial process to the exercise of judicial power that it forms part of the definition of that power. Thus, judicial power is not simply a power to settle justiciable controversies but a power which must be and must be seen to be exercised in accordance with the judicial process. As I explained in [Harris v Caladine (1991) 172 CLR 84 at 150‑151], the Parliament is, on that account, precluded from conferring powers on a court that are to be exercised in a partisan manner or in a non‑judicial way. Moreover, Parliament cannot require the Courts to act in a way that tends to bring their reputation for impartiality or the integrity of the judicial process into question. Equally, Parliament cannot confer a function on a judge in his or her individual capacity if it has the capacity to bring the reputation of the judge or that of the courts into question."

That principle has been discussed, and particular aspects of it elaborated, in a number of recent authorities: Wilson at 9, 10 and 15‑20 per Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ; at 44‑47 per Kirby J; Grollo v Palmer (1995) 184 CLR 348 at 365, 366 per Brennan CJ, Deane, Dawson and Toohey JJ; at 376, 377 per McHugh J; and at 391, 392 per Gummow J; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 98 per Toohey J; at 107 per Gaudron J; at 118, 119 per McHugh J; and at 132‑134 per Gummow J. The legislation and circumstances in question in those cases do not closely resemble Pt IVA or anything that may happen in the course of a representative proceeding. Nevertheless, the parties, and the Attorney‑General of the Commonwealth as intervener, accepted that there is a principle, to the effect stated by Gaudron J, which would invalidate legislation purporting to authorise or require a Chapter III court to conduct proceedings in a way which was repugnant to the judicial process. Nor was it in question - it could hardly be in question - that the rules of natural justice, particularly the right to be heard, are an essential element in the judicial process: Grollo at 379; Re Nolan; ex parte Young (1991) 172 CLR 460 at 496.

20 It was submitted that Pt IVA was likely, in its operation, to deprive group members of that fundamental right because of the operation of provisions already discussed: notice may not be ordered to be given personally to each group member unless the Court is satisfied that it is reasonably practicable, and not unduly expensive, to do so; commonly it will not be practicable and, in any event, it will not be in the interests of any party, it was said, to seek to satisfy the Court that the conditions of s 33Y(5) are met; commonly, therefore, notice will be given only by means of advertisements of some kind; thus a group member may be bound by an adverse judgment without actual notice and without an opportunity to opt out or to intervene. And the limited opportunities, available to a group member, of direct participation in a representative proceeding arise not from rights conferred by the provisions but only from the exercise of discretions. 21 On the other hand, senior counsel for Femcare accepted that there was no absolute principle that, without exception, proper judicial process requires either actual notice or a right of direct participation or that a party who is accorded neither not be bound by a judgment or order. Thus, provisions for substituted service (for example, Federal Court Rules O 7 r 9) are a recognised part of the judicial process and, though the purpose of substituted service is to bring a document to the notice of the person to be served, it is inherent in substituted service that the purpose may not be achieved; but a party served in accordance with an order for substituted service will nevertheless be bound by a subsequent judgment or order. More significant than that, however, is the form of representative proceeding developed in Chancery before the Judicature Act 1873 (UK) and now governed by rules of which O 6 r 13 of the Federal Court Rules is typical. Order 6 r 13 provides: "13 (1) Where numerous persons have the same interest in any proceeding the proceeding may be commenced, and, unless the Court otherwise orders, continued, by or against any one or more of them as representing all or as representing all except one or more of them. (2) At any stage of a proceeding pursuant to this rule the Court, on the application of the applicant, may appoint any one or more of the respondents or other persons (as representing whom the respondents are sued) to represent all, or all except one or more, of those persons in the proceeding. (3) Where, under sub‑rule (2), the Court appoints a person who is not a respondent, the Court shall make an order under rule 8 adding him as a respondent. (4) A judgment pronounced or an order made in a proceeding pursuant to this rule shall be binding on all the persons as representing whom the applicants sue or, as the case may be, the respondents are sued but shall not be enforced against any person not a party to the proceeding except with the leave of the Court. (5) An application for leave under sub‑rule (4) shall be made by motion, notice of which shall be served personally on the person against whom it is sought to enforce the judgment or order. (6) Notwithstanding that a judgment or order to which an application under sub‑rule (5) relates is binding on the person against whom the application is made, that person may dispute liability to have the judgment or order enforced against him on the ground that by reason of facts and matters particular to his case he is entitled to be exempted from the liability. (7) This rule does not apply to a proceeding concerning property subject to a trust or included in a deceased estate."

Although the course of authority has fluctuated concerning the degree of liberality with which such rules should be applied, it now seems plain that such a rule "is to be treated as being not a rigid matter of principle but a flexible tool of convenience in the administration of justice" (John v Rees [1970] 1 Ch 345 at 370 per Megarry J). That is also the effect of the decision, and discussion, concerning a similar rule in Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398: see at 404 per Mason CJ, Deane and Dawson JJ; at 408 per Brennan J, at 415‑420 per Toohey and Gaudron JJ and at 427‑430 per McHugh J. See also the discussion in Wong v Silkfield at par 13‑18. Certainly it is clear that persons may, in proceedings commenced under such a rule, be represented without their consent; there are no particular notice requirements (though see, for example, the discussion of Bryson J in Shepherd v Australia and New Zealand Banking Group Ltd (1996) 20 ACSR 81 at 99, 100 as to a form of order which, in particular circumstances, a proper exercise of discretion might require); a represented person may apply for an order under which he or she would cease to be represented by the representative party, but it may be (John v Rees at 371) that there is no right to such an order, the matter being discretionary; and, of course, the representative, while the proceeding continues under the rule, is dominus litis to the exclusion of the represented parties.

22 It was not suggested - it could not be suggested - that the well established procedure under O 6 r 13 and similar rules, recently considered and broadly construed by the High Court, was antithetical to the judicial process. The submission, in the end, was that this was a matter of degree and that Pt IVA went too far. The particular vice identified lay in the provisions for notice. Section 33X requires notice to group members of commencement of the proceeding and the right to opt out, and also of other matters significant to group members. But, it was said, the means of notice authorised, and the limitations placed on the power of the Court to require individual notice to each group member, meant that many group members would not actually see or hear the notices published, would be deprived of the opportunity to opt out or to seek the exercise by the Court of any of its powers or discretions and might, in the end, be deprived of rights by an adverse judgment, having had no real opportunity to take steps to avoid that outcome. 23 Reference was made to a series of United States decisions requiring individual notice (usually by post) where class members could be identified through reasonable effort, informing them of their right to opt out (Hansberry v Lee 311 US 32 (1940); Mullane v Central Hanover Bank & Trust Co 339 US 306 (1950); Eisen v Carlisle 417 US 156 (1974); Phillips Petroleum Co v Shutts 472 US 797 (1985); and, most recently, Ortiz v Fibreboard Corporation 527 US 1 (1999)). But the more recent decisions concerning litigation in federal courts concern the application of the Federal Rules of Civil Procedure (US) Rule 23(c)(2), which expressly requires individual notice where members can be identified through reasonable effort, and the others apply a construction of the Fourteenth Amendment (the "due process clause") which, in turn, explains the form taken by Rule 23(c)(2). The Australian Law Reform Commission, whose recommendations in this respect were given effect in s 33Y, at par 190 of its Report No. 46 (Grouped Proceedings in the Federal Court, 1988) considered and rejected the United States approach: "The most appropriate and cost effective method of notice will depend on the circumstances of the case. The objective should be to find the most economical means of ensuring that the group members are informed of the proceedings and of their rights. The more at stake for each person, the more effective the notice should be. Individual notice is likely to be the most effective method of giving notice but it is also likely to be the most costly. In the United States individual notice is required, where members can be identified through reasonable effort, to inform them of their right to opt out. The consequences of this requirement can be significant. In Eisen v Carlisle and Jacquelin proceedings were commenced by the plaintiff, whose individual claim amounted to $70, on behalf of a class which comprised six million members. The names and addresses of over two million of the class could be ascertained from the defendant's records. The cost of requiring that individual notice be given was calculated to be in excess of $300,000 for postage alone. It was argued by the class plaintiff that because the amounts in question were so small it would be extremely unlikely that class members would seek to opt out and accordingly individual notices were unnecessary. This argument was rejected by the Supreme Court, which held that the express wording of the Rule required individual notice to all identifiable class members regardless of the economic or other costs. The effect was to require the class plaintiff to discontinue the action. It is thus clear that requiring individual notice may mean that the action cannot proceed. The costs of such a requirement may be out of all proportion to its benefits to group members; in some circumstances the requirement of individual notice could prevent them from obtaining a remedy."

The recommendation of the Commission, in par 192, included that:

"The Court should not order that notice be given personally to each group member unless it is satisfied that it is reasonably practicable, and not unduly expensive to do so. Notice should be able to be given by press advertisement or radio or television broadcast or otherwise." 24 In Carnie, at 429, 430, McHugh J said, in relation to the procedure under the equivalent of O 6 r 13: "For much of this century … the Courts have given r 13 and its equivalents a narrow meaning. But, as the judgment of Toohey and Gaudron JJ shows, the recent cases have been more liberal in allowing representative actions to proceed. In the Age of Consumerism, it is proper that this should be so. The cost of litigation often makes it economically irrational for an individual to attempt to enforce legal rights arising out of a consumer contract. Consumers should not be denied the opportunity to have their legal rights determined when it can be done efficiently and effectively on their behalf by one person with the same community of interest as other consumers. Nor should the courts' lists be cluttered by numerous actions when one action can effectively determine the rights of many."

In Wong v Silkfield the Court, after referring to the judgment of McHugh J in Carnie, spoke of the limitations and disadvantages of the earlier procedure, by comparison with which, their Honours observed (at par 14), the advantages of proceeding under Pt IVA are apparent.

25 In short, the provisions in question represent the outcome of a careful consideration and balancing of the interests involved. The general scheme of Pt IVA, expanding as it does the circumstances in which representative proceedings are available, has been recognised by the High Court as conferring advantages not previously available. And I accept the submission of the Solicitor‑General to the effect that the disadvantages to a potential individual claimant should not be overstated. If the potential claimant receives notice of the representative proceeding he or she may opt out. If the potential claimant does not see or hear the initial notice but contemplates making a claim or commencing proceedings, steps taken to that end would almost certainly reveal the existence of the representative proceeding. Of course it may be too late to opt out, although the claimant may apply for an extension of the opting out period under s 33J(3) or may make an application, if so advised, under s 33N or s 33T. It is, of course, possible that the group member will consider action only when it really is too late, after the delivery of a judgment by which he or she is bound. But given the duration of complex litigation, the notoriety of many representative proceedings and the existence of limitation periods, the circumstances in which real disadvantage is likely to ensue may be expected to be limited indeed. And it may be assumed that the larger an individual's potential claim, or the more serious the loss or damage suffered, the more likely it is that that individual will take steps sooner rather than later. Those comments represent, I think, merely an elaboration of the considerations to which McHugh J referred in the passage which I have quoted from his Honour's judgment in Carnie. It may be added - though it is obvious - that, in settling the form of a notice and the manner in which it is to be given, the Court will take into account the particular circumstances of the case (including the nature of the claims and the character and size of the group) and will bear in mind that the purpose of notice is to inform. 26 Senior counsel for Femcare submitted, as I have mentioned, that what were said to be the vices inherent in the scheme of Pt IVA were not cured by "safeguards" such as s 33N, s 33R and s 33T because, rather than recognise or confer rights, those provisions merely gave the Court discretions. But the discretions will, of course, be exercised judicially; and, in Wong v Silkfield at par 24 and par 25, the High Court regarded them as significant: though, of course, in a context rather different from the present. It may well be that the requirement that the judgment describe or identify the group members who will be affected by it (s 33ZB(a)) should be seen in a similar light. 27 The considerations which I have discussed lead me to the conclusion that neither authority nor principle requires the conclusion that anything in Pt IVA is antithetical to the judicial process; and the course of recent authority, particularly that relating to the older representative procedure, suggests the contrary. In my view the submission that Pt IVA authorises or requires procedures inconsistent with the judicial process should not be upheld.

Acquisition of property? 28 A chose in action is property to which s 51(xxxi) of the Constitution applies: Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297. Femcare submitted that s 33J and s 33ZB involved the potential acquisition of property in this way: the fundamental components of the property right in a chose in action include the ability of the property‑holder to choose whether to exercise the right (including, presumably, to take proceedings to enforce it), and to maintain substantial control of the process if such a choice is made; but, once representative proceedings had begun and, if the holder of the right was not aware of the proceedings or was unwilling or unable to opt out, then that person lost those fundamental components of the property. That submission relied on the established proposition that a tax imposed by reference to a fundamental aspect of the rights of a holder in property may be a tax on the property: South Australia v Commonwealth (1992) 174 CLR 235. 29 But if in some circumstances (South Australia v Commonwealth at 249) a tax on the use or possession of property may be a tax on the ownership of the property, it does not follow in my view that a chose in action is, in the circumstances contemplated, "acquired" by the operation of Pt IVA. The representative party is given an authority, which in important respects is exclusive, to enforce, subject to the supervision of the Court and to the exercise of its powers under Pt IVA, the claims of the group members. The enforcement is "on behalf of", and for the benefit of, the group members. The representative party does not, in my view, by that process acquire any right of property in the chose in action. Thus, in my view, s 51(xxxi) is inapplicable.

Conclusion 30 For those reasons, in my opinion Pt IVA of the Act, and particularly s 33J and s 33ZB, are valid. Accordingly, I refuse the declarations sought. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lehane.

Associate: Dated: 6 October 1999 Counsel for the Applicant: Mr D J Higgs SC with Mr J R Clarke

Solicitor for the Applicant: Maurice Blackburn Cashman

Counsel for the Attorney-General of the Commonwealth, intervening: Mr D M J Bennett QC, Solicitor-General for the Commonwealth, with Ms K L Eastman

Solicitor for the Attorney-General of the Commonwealth, intervening: Australian Government Solicitor

Counsel for the First Respondent: Mr B W Walker SC

Solicitor for the First Respondent: Freehill Hollingdale & Page

Counsel for the Second Respondent: Mr I F Butcher

Solicitor for the Second Respondent: Sparke Helmore

Date of Hearing: 24 September 1999

Date of Judgment: 6 October 1999