The Question is the subject of conflicting judgments
28 In Brewster, the plurality of the High Court (Kiefel CJ, Bell and Keane JJ at [1]) described a 'common fund order' as an order that:
is characteristically made at an early stage in representative proceedings and provides for the quantum of a litigation funder's remuneration to be fixed as a proportion of any moneys ultimately recovered in the proceedings, for all group members to bear a proportionate share of that liability, and for that liability to be discharged as a first priority from any moneys so recovered.
29 Brewster involved an appeal from a decision of the Full Court of this Court in Westpac Banking Corporation v Lenthall (2019) 265 FCR 21 and an appeal from a decision of the NSW Court of Appeal in BMW Australia Ltd v Brewster (2019) 366 ALR 171. In Brewster, the High Court held that neither this Court nor the NSW Supreme Court had power to make the common fund orders sought in those class actions, each of which was proposed at an early stage of the representative proceeding.
30 Since Brewster, a number of single judges of this Court have considered whether the Court has power to make a common fund order at the conclusion of a representative proceeding. Many have expressed the view, albeit with varying degrees of certainty, that Brewster leaves open the power of the Court to make a common fund order at settlement: see, for example, McKay Super Solutions Pty Ltd (Trustee) v Bellamy's Australia Ltd (No 3) [2020] FCA 461 (Beach J), Fisher (trustee for the Tramik Super Fund Trust) v Vocus Group Ltd (No 2) [2020] FCA 579 (Moshinsky J) ('Vocus'), Uren v RMBL Investments Ltd (No 2) [2020] FCA 647 (Murphy J); Lenthall v Westpac Banking Corporation (No 2) (2020) 144 ACSR 573 (Lee J). See also Clime Capital Ltd v UGL Pty Ltd [2020] FCA 66 (Anastassiou J) ('UGL'); Evans v Davantage Group Pty Ltd (No 2) [2020] FCA 473 (Beach J).
31 However, in Audi, Foster J expressed a contrary view. Foster J (at [355]) distilled the following principles as emerging from the judgment of the plurality in Brewster (emphasis in original):
(a) The plurality remarked that the lead applicants ought not necessarily bear the entire costs of the proceeding. That remarks suggests that, in an appropriate case, the lead applicant should bear such costs;
(b) The making of a [funding equalisation order] addresses the question of "free riders";
(c) There is no reason why additional amounts deducted from unfunded group members' awards should then be paid to a litigation funder at any time, let alone at the outset of a proceeding;
(d) The litigation funder has no right to such money under contract or under equitable principles; and
(e) The obvious solution to the problem of "free riding" is not the making of a [common fund order]. The equitable spreading of that cost is, in fact, better achieved by the making of a [funding equalisation order].
32 His Honour then stated (at [405]):
It is apparent from my brief discussion of the cases referred to at [400] above and my discussion of Beach J's decision in Bellamy's that the judges who decided those cases (Murphy, Beach and Lee JJ) are of the opinion that this Court has power to make a [common fund order] at the conclusion of a representative proceeding and should ordinarily do so, keeping a close eye, of course, upon the approved rate of commission and overall quantum of the particular funder's remuneration. Their Honours are of the opinion that the judgments of the majority in Brewster did not go so far as to decide that this Court has no power to make a [common fund order] at any time. With great respect to my colleagues, I do not think that the position is so clear
33 Foster J concluded (at [421]) that the reasoning of the plurality in Brewster which led to the conclusion that this Court does not have power to make a common fund order at an early stage of a representative proceeding, "with its emphasis on the true construction of the relevant legislative provisions, probably forecloses resort to s 33V of the FCA Act…as an appropriate source of the power to make a [common fund order] at the conclusion of a representative proceeding…"
34 Foster J also drew attention to the separate judgment of Gordon J in Brewster, who agreed with the plurality of the High Court. Foster J stated (Audi at [363]):
The conclusion expressed by [Gordon J in Brewster] in the last sentence of 660 [135] is quite unequivocal: Having described the essence of a [common fund order], her Honour said that Courts do not have power to make such an order. Her Honour did not make any temporal qualification to that remark. In my view, her Honour intended to say that neither this Court nor the Supreme Court of NSW has the power to make a [common fund order] (as commonly understood) at any time.
35 In other cases, in light of the reasoning of various members of the High Court in Brewster, the Court has made a funding equalisation order at settlement in preference to a common fund order (see Vocus (Moshinksy J) at [8] and [68]-[77]; UGL (Anastassiou J) at [8]-[13]).
36 These authorities, in my view, establish a conflict such that there is an interest in having the question resolved by the Full Court. In this regard, determination of the Question will benefit not only the parties and group members in this proceeding but shall also provide greater certainty to parties and group members in other representative proceedings.