Issue 1 - The Overlapping Class Actions Issue
38 In this part of these Reasons, I address the issues which I have identified at [36(a)] and [36(i)] above.
39 On 26 June 2017, the respondents in the class action proceedings filed the overlap IA in each of those proceedings in which they claim relief in respect of the alleged ongoing difficulties caused by the circumstance that two groups of class actions are on foot, namely, the BL class actions and the MB class actions. In substance, the respondents seek orders pursuant to s 33ZF of the Federal Court of Australia Act 1976 (Cth) (the Act):
(a) Deeming those group members who have entered into a retainer agreement with Maurice Blackburn in respect of proceeding NSD 1459 of 2015 to be a group member in that proceeding for all purposes and not to be a group member of the BL class action NSD 1308 of 2015;
(b) Deeming those group members who have entered into a retainer agreement with Bannister Law to be a group member in proceeding NSD 1308 of 2015 for all purposes and not to be a group member in proceeding NSD 1459 of 2015;
(c) Deeming those group members who have not entered into any retainer agreement with either Maurice Blackburn or Bannister Law in respect of either NSD 1308 of 2015 or NSD 1459 of 2015 to be a group member in proceeding NSD 1459 of 2015 for all purposes and not to be a group member in proceeding NSD 1308 of 2015; and
(d) Deeming those group members who have entered into retainer agreements with both Maurice Blackburn and Bannister Law to be a group member in NSD 1459 of 2015 and not to be a group member in proceeding NSD 1308 of 2015 unless they nominate a different intention as part of the opt out process.
40 In the overlap IA, in addition to addressing proceedings NSD 1308 of 2015 and NSD 1459 of 2015, the respondents also seek to address the overlap between NSD 1307 of 2015 and NSD 1472 of 2015 and the overlap between NSD 1308 of 2015 and NSD 1473 of 2015.
41 In the alternative, the respondents seek orders staying the BL class actions until further order of the Court.
42 The claims for relief made in the overlap IA were supported by an affidavit sworn by Gregory John Williams on 28 June 2017. Mr Williams is the respondents' solicitor on the record.
43 On 29 June 2017, the respondents also filed a Written Submission in support of their claims for relief made in the overlap IA.
44 The overlap IA was, by my direction, listed before the Court on 18 July 2017 for case management. It was not listed on that day for hearing. A number of other applications had previously been listed for hearing on 18 July 2017.
45 In his affidavit, Mr Williams said that the respondents' then solicitors, Henry Davis York, had first raised by letter sent on 9 December 2015 what the respondents considered to be an unsatisfactory state of affairs brought about by two groups of class actions being maintained at the same time and threatened to bring an application to have some of the claims struck out as an abuse of process.
46 On 5 February 2016, the respondents in the class actions filed Interlocutory Applications in each of those proceedings in which (inter alia) they sought an order that all of the class actions be struck out as an abuse of process.
47 On 27 June 2016, Clayton Utz, who were by then acting for the respondents, in a letter sent to both Bannister Law and Maurice Blackburn on that day, again raised the difficulties caused by the continuation of two groups of class actions. On this occasion, Clayton Utz argued that the difficulties caused by parallel proceedings needed to be resolved before the opt out process was undertaken.
48 Further correspondence between the solicitors ensued.
49 In early June 2017, the respondents abandoned the strike out applications which they had filed on 5 February 2016.
50 Nonetheless, in April and May 2017, they pressed the applicants' solicitors to address the ongoing difficulties which they asserted were caused by the maintenance of parallel groups of class actions. In their letter of 12 May 2017, Clayton Utz seemed to be prepared to progress the distribution of an appropriate opt out notice even though the matters previously raised by it over the 18 months or so prior to that date had not been addressed by the applicants' solicitors.
51 On 6 June 2017, Clayton Utz sent a further letter to the applicants' solicitors. In that letter, Clayton Utz contended that the overlap issues should be resolved prior to the commencement of the stage 1 trial and prior to or as part of the opt out process.
52 As I have already noted, the overlap IA has not yet been heard nor has it yet been allocated a date for hearing. The listing on 18 July 2017 was for case management only.
53 When the applications that were listed on 18 July 2017 for hearing were argued, Senior Counsel for the respondents submitted that I should not authorise the dissemination of any opt out notice until such time as the respondents' overlap IA had been heard and determined. Senior Counsel also submitted, as a fall-back position, that if I did not embrace his primary submission, I should nonetheless reflect the ideas contained in the respondents' overlap IA in the Opt Out Notice itself. The respondents' contention in this regard was that I should compel group members to select which group they wished to be a member of (ie the groups as defined in the BL class actions or the groups as defined in the MB class actions) and that, in default of such election being made, I should compel those group members who had failed to make the necessary choice to be placed in the groups as defined in the MB class actions.
54 Accordingly, in these Reasons, I propose to address only two questions raised by the filing of the overlap IA, namely, whether I should delay the distribution of the requisite Opt Out Notices pending the hearing and determination of the claims for relief made in the overlap IA and, in the event that I choose not to take that course, whether I should embrace some of the ideas in the overlap IA in the Opt Out Notices. I stress that, by these Reasons, I am not determining the claims for relief made in the overlap IA.
55 The respondents relied upon Smith v Australian Executor Trustees Limited [2016] NSWSC 17 (Smith), Hassid v Queensland Bulk Water Supply Authority (T/as Seqwater) [2017] NSWSC 599 (Hassid) and Johnson Tiles Pty Ltd v Esso Australia Ltd (1999) ATPR 41-679 in support of a general proposition that it would not be in the interests of justice to permit parallel proceedings to continue with overlapping group members.
56 Whether or not, as a general rule, that proposition holds good, neither Smith nor Hassid support the respondents' submission that the so-called difficulties presented by parallel proceedings need to be resolved in some final fashion prior to or as part of the opt out process.
57 In oral submissions before me, Senior Counsel for the respondents submitted that "now … [is] the perfect time to give to group members the information they need and the opportunity to make a decision for themselves … " as to whether they wish to be part of the BL class actions or the MB class actions or no class actions. Senior Counsel went on to submit that no better opportunity would arise.
58 In developing his primary submission, Senior Counsel for the respondents argued that the vast majority of group members across all class actions are group members in both groups of class actions. He then submitted that, were that circumstance to be permitted to continue, it would constitute an abuse of process and be vexatious and oppressive insofar as the position of the respondents is concerned. For this reason, so it was submitted, the present situation ought not to be permitted to continue.
59 In support of his submissions, Senior Counsel for the respondents relied upon the decision of Griffiths J in Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd [2017] FCA 14 and the decision of McKerracher J in Morgan; Re Brighton Hall Securities Pty Ltd (In Liq) (2013) 96 ACSR 232. Neither of those decisions addresses the question raised here, namely, whether the institution of multiple class actions in relation to the same subject matter is an abuse of process, vexatious and oppressive.
60 It is by no means clear or accepted in this Court that the continued maintenance of parallel class action proceedings necessarily constitutes an abuse of process (see, for example, the judgment of Beach J in McKay Super Solutions Pty Ltd (Trustee) v Bellamy's Australia Ltd [2017] FCA 947 (Bellamy's) at [36]).
61 After I reserved my decision in respect of the Opt Out Notices, Beach J delivered his judgment in Bellamy's. In light of that judgment, the respondents sought to make further submissions in support of the proposition that I should not order the dissemination of any Opt Out Notice without first hearing and determining the claims for relief made by the respondents in the overlap IA. As a result, all parties made a brief Written Submission on the point and addressed me orally on 24 August 2017.
62 In their Supplementary Submissions, the respondents prayed in aid of the approach which they advocated the remarks of Beach J at [22] in Bellamy's. At that paragraph, his Honour said:
Now there is considerable wisdom in a wait and see approach in some contexts. And I do not doubt that such an approach has been warranted by other docket judges in other cases. But in my context where there are two open class proceedings, numerous group members signed up in each of the proceedings to different funding arrangements, and the prospect of a common fund application being made in each of the proceedings, it is desirable that clarity be injected sooner rather than later as to the proceedings to go forward and their constitution. This is not only in the best interests of group members in each of the proceedings, whether signed up or otherwise, but also in the interests of the respondent, who should not be vexed or oppressed by duplicate classes prosecuting duplicate claims. Let me elaborate on one aspect justifying the need to resolve these issues sooner rather than later. The applicant in each of the proceedings is proposing to seek a common fund order. Whether I grant such an order and its terms will need to be dealt with at an early point. In those circumstances, it is necessary to resolve the appropriate constitution of each of the proceedings first before dealing with common fund questions. It is undesirable that a common fund order be made in both proceedings. That would create considerable uncertainty for group members. Moreover, the economics of determining whether such an order and its terms are appropriate and in which proceedings would be considerably complicated if I was to endeavour to address the question at the same time in both proceedings as presently constituted. In summary, I do not consider that I can just wait and see what happens.
63 His Honour's remarks at [22] in Bellamy's are of the most general kind and I do not consider that, by making those remarks, his Honour was going so far as to suggest that the so-called problems of duplicate claims made in more than one set of class actions should be addressed before or as part of the opt out process. Nor do I think his Honour's observations at [36] in Bellamy's were of that character. At [21], his Honour recorded a submission by the applicant in Bellamy's in which the applicant referred to the Volkswagen cases and the CIMIC class action before Jagot J in support of an argument that it might be preferable to defer consideration of the overlap problem in that case until a later point in time. That was the context in which he made the observations at [22] which I have extracted at [62] above.
64 The respondents also submitted that, in Bellamy's, Beach J recognised that the opt out process could be used as a means by which some group members could elect between the two overlapping proceedings. As far as it goes, that observation is correct. However, it does not come to grips with the question of timing. Nor does it constitute a reason for preferring the approach advocated by the respondents in the overlap IA over the approach advocated by the applicants in their proposed Opt Out Notice. The applicants' approach is to offer to group members the opportunity to choose between groups at this point in time without making it obligatory to do so at this point in time.
65 In oral submissions made to me on 24 August 2017, the essence of the respondents' Written Submissions was repeated.
66 The MB applicants submitted that no compelling reason had been advanced on behalf of the respondents as to why I should delay dissemination of the Opt Out Notice in order to resolve the so-called overlap issues. They submitted that the opt out procedure cannot, and would not, remove overlap. They also submitted that the only relevant difference of substance between the approach of the respondents and the approach of the MB applicants in this case, is that the respondents' approach results in group members who fail to make an express choice between the two groups of class actions being allocated to the relevant class action within the MB class actions by default. Also, the MB applicants submitted that, contrary to the respondents' submissions, it was not inevitably going to be the case that further notices would need to be issued to group members if the Court ultimately accedes to the respondents' claims for relief in the overlap IA.
67 The MB applicants also made more detailed submissions as to the significance of the judgment of Beach J in Bellamy's, ultimately contending that there was nothing in that judgment that would compel the Court to delay dissemination of the Opt Out Notice pending the hearing and determination of the respondents' overlap IA. I agree with this submission.
68 The BL applicants made a separate Written Submission to the Court in light of the respondents' submissions made both in writing and orally on 24 August 2017.
69 The BL applicants submitted that there is no necessity, or practical utility, for the claims for relief made by the respondents in the overlap IA to be resolved prior to or concurrently with the opt out process. Those applicants also submitted that, were I of the opinion that this basal proposition was not correct, I should defer dealing with opt out until after completing the stage 1 trial. This latter proposition is based upon a view that s 33X(1)(a) of the Act would permit an opt out deadline to be imposed as part of an opt out process which began after the stage 1 trial had been completed. I do not need to decide whether this submission is correct. The BL applicants also submitted that, were I to adopt the course urged upon me by the respondents, the stage 1 trial would inevitably be postponed.
70 The BL applicants also submitted that, unlike the present proceedings, in Bellamy's there were competing class actions with overlapping classes with common respondents and common causes of action. Each class action was funded by a different funder and in each case a common fund application was to be pursued. This created additional complications and uncertainty that are not present in the Volkswagen cases. The BL applicants went on to submit that the funding issues present in Bellamy's were simply not present in the Volkswagen litigation. They also submitted that the only present uncertainty related to those group members who are not presently clients of either Bannister Law or Maurice Blackburn. They submitted that the uncertainty identified by them would arise even if there was only one current (funded) class action or one class action whether funded or not.
71 The BL applicants also submitted that the respondents did not move promptly to seek to resolve the difficulties which they now raise in support of the overlap IA. They also contended that there was no demonstrable need for any of the so-called overlap issues to be resolved now or in connection with the proposed opt out process. They went on to contend that, rather than merely giving group members notice of the proceedings and of their right to opt out of each (and details of how to do so), the respondents want the Court to require that the long Opt Out Notice provide notice informing the non-client members of the BL class actions that they have, in effect, been involuntarily opted out or deemed to be no longer class members (as a result of the orders sought by the respondents) and that they have a right to opt back into the BL class actions if they agree to become clients of BL. The BL applicants submitted that this is a highly undesirable outcome.
72 The BL applicants also submitted that the present cases are being run collaboratively and concurrently along with the two ACCC proceedings under active case management. Furthermore, there is no precise commonality between the identity of respondents in the present cases. These are not matters capable of easy and quick resolution through the opt out notice procedure.
73 I do not think that the respondents have advanced any good reason as to why I should delay disseminating the Opt Out Notices required by the Act in order to hear and determine the claims for relief made by them in the overlap IA. The applicants, by way of contrast, have put forward many compelling reasons for not delaying the opt out process. I propose to proceed in the manner advocated by the applicants.
74 In my view, it is not helpful in order to resolve particular issues presented by the existence of parallel proceedings in one case to point to general observations made by judges in other cases or even to point to specific solutions deployed by such judges. There can be no "one size fits all" approach to the various problems that may arise in group proceedings under Pt IVA of the Act. Each case must be considered upon the basis of a full and sensible appreciation of the relevant facts involved in the particular case and also by paying due regard to all relevant circumstances in play in the particular case. For the most part, decisions to be made by the Court in dealing with the issues raised from time to time in group proceedings under Pt IVA of the Act are discretionary. While it is obviously desirable that a consistent approach to problems which surface regularly from time to time is highly desirable, there is always scope, in my view, for judges to respond to particular issues differently and yet to still be appropriately exercising the discretion reposed in them. Whilst there may be some common features between cases, it remains the position that different judges may resolve the difficulties with which they are confronted differently depending upon how those judges assess the relevant considerations.
75 In the present case, I have consistently taken the view that I would permit the two groups of class actions to proceed in parallel for the time being. My decision to adopt that approach was not taken lightly or without due consideration. I do not agree that that decision has unduly vexed the respondents or oppressed them. Nor do I consider that that decision has been productive of undue cost, confusion or delay. To my way of thinking, the approach which I have taken has been a sensible approach to the problem presented to the Court by the existence of two groups of class actions. It may be that, in the future, some further action will need to be taken in order to address problems (which are not present at the moment) caused by the continued maintenance of parallel groups of class actions. This will be a matter to be kept under constant review as the litigation progresses. As is the way with these matters, the Court is attentive to the case management needs of each matter and will not ignore changes to courses of action previously charted which might become necessary as the interlocutory stages of the cases progress.
76 In addition, in the present case, it has been almost 20 months since the solicitors for the respondents first raised concerns about the alleged problems caused by the existence of two groups of class actions. Yet no application was made to the Court until the end of June 2017 (other than the strike out application of 5 February 2016) to bring those concerns to the attention of the Court with a view to having appropriate orders made. By June 2017, the process of settling the form of the relevant Opt Out Notices was well under way and was expected to be resolved by the end of July 2017. The significant delay on the part of the respondents in bringing forward the claims for relief which they now make in the overlap IA must count against the Court accepting their current proposition that the claims for relief in the overlap IA must be dealt with prior to or as part of the opt out process. These observations are even more telling when it is appreciated that, on a number of occasions in the period from about November 2016 until April 2017, the respondents urged upon the Court that the Court should compel the applicants to commence the opt out process because the applicants had not paid due attention to the need to disseminate Opt Out Notices well before any hearing of a final nature in any of the matters.
77 The respondents ultimately accepted by the end of the hearing before me that, if I were minded not to delay the dissemination of the Opt Out Notices until such time as I had heard and determined the claims for relief made by them in the overlap IA and if I were also not minded to make it obligatory for group members to elect between the BL class actions and MB class actions, then the text of pars 13.1, 13.2 and 13.3, as propounded by the applicants, was acceptable, subject to one matter. That matter is this: At the end of par 13.3, the applicants wish to add after the clause: "… there may be a subsequent opportunity for you to choose between the class actions …." the following words in bold: "… or the Court may determine without further notice to you which of the class actions you will participate in".
78 The respondents object to the addition of those words. The submission was that those words should not be included because now is the time to address the question of overlap.
79 Given that I have decided not to adopt the approach advanced on behalf of the respondents in relation to the overlap questions, I see no reason not to include the words which the applicants wish to have included at the end of par 13.3. Accordingly, I have included the substance of those words in par 13.3 although I have changed the text slightly.