David William Pallas & Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund v Lendlease Corporation Ltd

Catchwords

[2022] FCAFC 47) had held that previous decision of Court of Appeal (Wigmans v AMP Ltd (2020) 102 NSWLR 199[2020] NSWCA 104) was "plainly wrong" - Where disagreement with that characterisation - Whether Court of Appeal should depart from Wigmans v AMP Ltd (2020) 102 NSWLR 199[2020] NSWCA 292 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334[1999] HCA 9 BHP Group Limited v Impiombato (2021) 286 FCR 625[2021] FCAFC 93 BHP Group Limited v Impiombato [2022] HCA 33(2022) 96 ALJR 956 BMW Australia Ltd v BrewsterWestpac Banking Corporation v Lenthall (2019) 269 CLR 574[2019] HCA 45 Brewster v BMW Australia Ltd [2019] NSWCA 35(2019) 366 ALR 171 Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2020) 279 FCR 631[2020] FCAFC 122 Earglow Pty Ltd v Newcrest Mining Ltd (2015) 230 FCR 469[2015] FCA 328 Endeavour River Pty Ltd v MG Responsible Entity Ltd [2019] FCA 1719 Gett v Tabet (2009) 109 NSWLR 1[2009] NSWCA 76 Haselhurst v Toyota Motor Corporation Australia Ltd (t/as Toyota Australia) (2020) 101 NSWLR 890[2020] NSWCA 66 Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609[2014] NSWCA 266 Hill v Zuda Pty Ltd (2022) 275 CLR 24

Judgment (15 paragraphs)

[1]

Introduction

Following an approach that has been employed in the past to determine questions of statutory construction which affect class action procedure (see, eg Brewster v BMW Australia Ltd [2019] NSWCA 35; (2019) 366 ALR 171), this matter comes before the Court of Appeal by way of removal from the Equity Division, pursuant to an order made by Ball J on 13 September 2023 in accordance with Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 1.21(1)(a).
Pursuant to UCPR r 28.2, Ball J also stated a separate question, at the request of both parties, for this Court to determine (the separate question): "Notwithstanding the decision in Wigmans v AMP Ltd (2020) 102 NSWLR 199 and having regard to the decision in Parkin v Boral Ltd (2022) 291 FCR 116, does the Supreme Court of NSW have power pursuant to sections 175(1), 175(5) and 176(1) of the Civil Procedure Act 2005 (NSW) (CPA) or otherwise to approve a notice to Group Members of the right to register to participate in any settlement of the proceedings or opt out of the proceedings for the purposes of CPA section 162 containing the following notation: Upon any settlement of this proceeding the parties, alternatively, the defendant, will seek an order, which, if made, has the effect of providing that any Group Member who by a registration date: (i) has not registered; or (ii) has not opted out in accordance with the orders made by the Court, will remain a Group Member for all purposes of this proceeding but shall not, without leave of the Court, be permitted to seek any benefit pursuant to any settlement (subject to Court approval) of this proceeding that occurs before final judgment."
As is implicit in the formulation of the separate question, there is a divergence between the decision of this Court in Wigmans v AMP Ltd (2020) 102 NSWLR 199; [2020] NSWCA 104 (Wigmans), and the decision of the Full Court of the Federal Court in Parkin v Boral Ltd (2022) 291 FCR 116; [2022] FCAFC 47 (Parkin), in which Wigmans was considered by Murphy, Beach and Lee JJ to be "plainly wrong".
The defendants in the underlying proceeding (who it is convenient to refer to compendiously as Lendlease) and for whom Ms Collins SC appeared, contend that the answer to the separate question should be "Yes".
The underlying proceeding is a 'shareholder' class action. The representative plaintiffs, and other members of the class, were stapled securityholders of shares in Lendlease Corporation Ltd, an ASX-listed property and infrastructure company, which were stapled to units in the Lendlease Trust. Lendlease Corporation Ltd, and the responsible entity of the Lendlease Trust, are the defendants in the class action and the applicants in this separate question. The plaintiffs allege that Lendlease breached its continuous disclosure obligations and engaged in misleading or deceptive conduct during the period from 17 October 2017 to 8 November 2018 during which period, approximately 445 million shares were traded. In particular, the proceeding concerns pre-tax provisions which it is alleged that Lendlease should have taken, and certain reductions in after-tax profits it is alleged that Lendlease should have made, with respect to three projects which it was undertaking.
The plaintiffs in the underlying proceeding and for whom Mr Edwards KC appeared did not take a different position on the question of the power of the Court to make a notation of the kind formulated in the separate question to that taken by Lendlease. They expressly reserved, however, their position on the question of discretion, that is to say whether the Court should exercise its discretion to issue a notice of the kind contemplated in the separate question if there was power to do so.
Both parties accepted that the decision in Wigmans would compel a negative answer to the separate question.
Although the plaintiffs' carefully expressed position of non-opposition on the question of power falls short of positive support for the arguments advanced by Lendlease, it was both necessary and desirable that a contradictor be appointed in order to ensure that this Court had the benefit of full argument. The Court is grateful to Ms Morgan SC who, with Ms Hillman, appeared as contradictor.
One difficulty that emerged during the course of oral argument was that the notation referred to in the separate question was detached from any agreed form of proposed notice to group members. Lendlease had submitted a form of notice which became Exhibit A on the hearing of the separate question but there was no agreement between the parties as to the form of that notice. This led the Court to raise a serious concern at the end of the oral hearing about the artificiality and undesirability of answering a question divorced from the context of an agreed form of proposed notice to group members, therefore rendering any answer to the question vulnerable to the criticism of hypotheticality: cf Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; [1999] HCA 9.
Following the hearing and with a view to curing the objection that any answer to the separate question may be hypothetical, the parties reached agreement on a form of notice which it was proposed would be sent to group members prior to any mediation, and forwarded it to the Court on 8 December 2023 (the Amended Notice). Supplementary written submissions were also filed by the Contradictor and Lendlease on 15 and 20 December 2023 in relation to the Amended Notice. The proposed agreed form of Amended Notice is reproduced in Appendix A to these reasons. The notation set out in the separate question was retained but was supplemented in important respects. It was as follows: Option C - Do Nothing 10. Upon any settlement of this proceeding the parties, alternatively, Lendlease, will seek an order, which, if made, has the effect of providing that any Group Member who by a registration date: a. has not registered; or b. has not opted out in accordance with the orders made by the Court, will remain a Group Member for all purposes of this proceeding but shall not, without leave of the Court, be permitted to seek any benefit pursuant to any settlement (subject to Court approval) of this proceeding that occurs before final judgment. 11. The Court will then decide whether to approve the settlement on that basis. As stated above, if a settlement occurs, then a further notice will be distributed, or advertised, advising of the settlement, and there may or may not be another opportunity to register (this will be a matter for the Court and there is no guarantee any further opportunity will arise). 12. Group Members who do nothing (i.e. do not register in accordance with Option A and do not opt out in accordance with Option B before the deadline of [TBC]) will remain as Group Members in the Lendlease Class Action for all purposes, but may not be entitled to receive a distribution payment from any settlement that may be agreed to at the forthcoming mediation, or at any time prior to final judgment being delivered if the parties, alternatively, Lendlease, are successful in obtaining an order that only those Group Members who have registered can obtain compensation received through the settlement. As stated above, if a settlement occurs, then a further notice will be distributed, or advertised, advising of the settlement, and there may or may not be another opportunity to register (this will be a matter for the Court and there is no guarantee any further opportunity will arise). 13. Further, Group Members who do nothing will be bound by the ultimate outcome of the Lendlease Class Action, and will therefore not be able to pursue the same claims, and may not be able to pursue related claims, against Lendlease in other legal proceedings in the future. Thus, if you do wish to remain a Group Member in the class action, you are strongly encouraged to register your claim (Option A above) before [TBC] so as not to risk missing out on the benefit of any settlement which might be agreed before final judgment. As noted above, there is no cost to register your claim. (Emphasis as in form of proposed notice submitted by the parties)

[2]

An opening observation

In the ordinary course, class action proceedings of the apparent magnitude of those in the current case would be referred to mediation and, if any mediation was unsuccessful, a trial date would be set. Prior to the matter going to trial and other than with the leave of the Court, an opt out notice must be sent to group members advising of their right to opt out of the group prior to the hearing of the representative proceedings: Civil Procedure Act 2005 (NSW) (CPA) ss 162(1), 162(4) and 175(1)(a). It is not uncommon that such a notice will also request that interested group members register with the law firm for the plaintiff. This is to aid in the distribution of proceeds of the litigation (whether by settlement or a judgment). It is common for many group members to have registered with the plaintiff's law firm prior to the opt out notice having been sent. An opt out notice may be sent prior to any mediation and the form of the proposed notice in the present case is of this kind.
It is plain that there are at least two purposes that inform and underpin the proposed notation. First, and most explicitly, to encourage currently unregistered group members either to opt out of the group prior to any mediation or to opt in to avoid "the risk [of] missing out on the benefit of any settlement which might be agreed before final judgment": see [10] above. The second, unstated, purpose of the notation is to arm Lendlease (and also the plaintiffs as the representative parties) with an argument to be made to any judge called upon to approve any settlement pursuant to s 173 of the CPA that non-registered group members should not be permitted to participate in the fruits of any settlement on the footing that they had been given the choice of opting out or opting in prior to the settlement and had not availed themselves of that opportunity.
From a commercial perspective, it is tolerably clear that Lendlease wishes to go into any mediation having an appreciation of the number of group members who would be bound by any settlement reached by reference to the universe of group members, and the value of their individual claims (a function of the number of securities held). That motivation lay behind the form of order which this Court held in Haselhurst v Toyota Motor Corporation Australia Ltd (t/as Toyota Australia) (2020) 101 NSWLR 890; [2020] NSWCA 66 (Haselhurst), applying BMW Australia Ltd v Brewster; Westpac Banking Corporation v Lenthall (2019) 269 CLR 574; [2019] HCA 45 (Brewster), was not authorised by s 183 of the CPA. The form of that proposed order was as follows: "Pursuant to s 183 of the Act, any Group Member who neither opts out in accordance with Order 12 nor registers in accordance with Order 15 on or before the Class Deadline shall remain a Group Member for the purposes of any judgment or settlement but, in the event that an in-principle settlement is reached before the commencement of the trial on the common issues and that settlement is ultimately approved by the Court, shall be bound by the terms of the settlement agreement and barred from making any claim against the Defendant in respect of or relating to the subject matter of this proceeding, including participating in any form of compensation or otherwise benefiting from any relief that might be ordered or agreed." The reasoning in Haselhurst is discussed later in this judgment, at [48]-[58].

[3]

Departing from previous authority

In Totaan v R (2022) 108 NSWLR 17; [2022] NSWCCA 75 (Totaan), I summarised the approach to be followed when intermediate appellate courts are asked to depart from the authority of courts of co-ordinate jurisdiction as well as their own previous decisions, a subject that had previously been considered at some length by this Court in Gett v Tabet (2009) 109 NSWLR 1; [2009] NSWCA 76 (Gett). In Totaan, I said (in observations with which Gleeson JA and Harrison, Adamson and Dhanji JJ agreed): "When should an intermediate appellate court depart from its own earlier decisions, and those of courts of co-ordinate jurisdiction? [72] Before turning to a consideration of whether the prevailing case law in relation to s 16A(2)(p) is "plainly wrong" within the meaning of that expression as used in Marlborough Gold Mines and Farah, reference should also be made to the cognate cautionary principle articulated in the New South Wales Court of Appeal's decision in Gett at [273], [277]-[278], [281] and [286]. That principle is to the effect that, whilst intermediate appellate courts are not legally bound by their own earlier decisions, they should only depart from such authority or the authority of courts of co-ordinate jurisdiction within the national system if they are of the view that the decision in question is "plainly wrong" and, such an error having been identified, there are "compelling reasons" to depart from the earlier decision or decisions. The fact that reasonable minds might differ on the interpretation of a statutory provision will generally be insufficient to warrant a conclusion that an earlier or existing interpretation of the provision or provisions in question was "plainly wrong": Transurban City Link Ltd v Allan (1999) 95 FCR 553; [1999] FCA 1723 at [29]; JD Heydon, "How Far Can Trial Courts and Intermediate Appellate Courts Develop the Law?" (2009) 9 Oxford University Commonwealth Law Journal 1 at 26. [73] It was said in Gett at [294]-[295], in a passage applied in Fairfax Digital Australia & New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547; [2018] NSWCA 77 at [147], that: "[294] The phrases "plainly wrong" or "clearly wrong" can be understood to focus on at least one or more of the following attributes of a ruling: (a) the fact of error is immediately […] apparent from reading the relevant judgment; (b) the strong conviction of the later court that the earlier judgment was erroneous and not merely the choice of an approach which was open, but no longer preferred (cf Chamberlain and Clutha), and (c) the nature of the error that can be demonstrated with a degree of clarity by the application of correct legal analysis. [295] In our view, the first possibility is liable to be highly subjective and should not be required, where the other two possibilities are satisfied. The existence of (b) and (c) is a precondition to the exercise of the power to depart from earlier authority." [74] Underpinning language such as "a strong conviction" or "compelling reasons" (see Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86 at 100) employed in this area of discourse are the important goals of fostering stability and predictability in the law and consistency and certainty in the administration of justice: Gett at [286], [300]. Neither of those considerations should be lightly gainsaid, perhaps especially so when the intermediate court is exercising federal jurisdiction as this Court is doing in the present case: see Wong v The Queen (2001) 207 CLR 584; [2001] HCA 64 at [46]-[51]; Hili v The Queen (2010) 242 CLR 520; [2010] HCA 45 at [56]. [75] Such considerations do not, however, preclude departure from an established position if the Court considers the earlier position to have been "plainly wrong". As has been said, "[i]n essence, the Australian position rests on a compromise between the desirability of achieving uniformity and the undesirability of repeating gross error": Heydon at 27; see also and generally M Leeming, "Farah and its progeny: Comity among intermediate appellate courts" (2015) 12 The Judicial Review 165. [76] Considerations that may bear upon an intermediate court's approach to departing both from its own earlier decisions (including earlier decisions not to depart from still earlier decisions) and those of courts at a similar level of the federal judicial hierarchy include whether the challenged decision(s) are closely reasoned, whether the principle for which the decision stands has been worked through in a series of cases, and whether the decision(s) challenged have been unanimously followed or whether there is some tension between decisions of courts of coordinate authority in relation to the challenged decision(s)."

[4]

Statutory context

One very important point to emerge from the majority decision of the High Court in Brewster was the danger and indeed illegitimacy of looking at one statutory provision in isolation from others, especially in circumstances where the statutory provision in question forms part of a body of statutory provisions on a particular topic or, in that case as in the present case, part of a statutory regime for the hearing and determination of class action or representative proceedings.
In New South Wales, that statutory regime is contained in Pt 10 of the CPA entitled "Representative proceedings in the Supreme Court". That Part was enacted by the Courts and Crimes Legislation Further Amendment Act 2010 (NSW), the second reading speech for which made clear that Pt 10 was "substantially modelled" on Pt IVA of the Federal Court of Australia Act 1976 (Cth) (the FCA Act): New South Wales Legislative Council, Parliamentary Debates (Hansard), 24 November 2010 at p 28066. The relevant sections of Pt 10, extracted below, contain reference to their cognate provisions in the FCA Act. It was not in dispute that the CPA and FCA Act cannot be meaningfully distinguished in order to resolve the separate question.
Whereas the particular statutory provision upon which attention was focussed in Brewster was s 183 of the CPA (cf s 33ZF of the FCA Act), the particular statutory provision which falls for consideration in the present case is s 175(5) of the CPA (cf s 33X(5) of the FCA Act). However, to repeat, particular statutory provisions must be construed in the context of the Act in which they appear as a whole: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69]; Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1; [2015] HCA 14 at [31]. As will be seen, various arguments advanced in the present case unduly focus on s 175(5) without proper regard to the overall statutory context, the very technique of interpretation deprecated by the majority in Brewster.
Turning to key provisions in Pt 10 of the CPA, s 159 provides that "the consent of a person to be a group member is not required" (other than in limited circumstances, where "group member" is defined by s 155 of the CPA to mean "a member of a group of persons on whose behalf representative proceedings have been commenced").
In this respect, s 162 of the CPA provides for the right of a "group member" to opt out of proceedings: "162 Right of group member to opt out (cf s33J FCA) (1) The Court must fix a date before which a group member may opt out of representative proceedings in the Court. (2) A group member may opt out of the representative proceedings by written notice given under the local rules before the date so fixed. (3) The Court may, on application by a group member, the representative party or the defendant in the proceedings, fix another date so as to extend the period during which a group member may opt out of the representative proceedings. (4) Except with the leave of the Court, the hearing of representative proceedings must not commence earlier than the date before which a group member may opt out of the proceedings."

[5]

Authorities leading to Wigmans and Parkin

The order approving the notice in this case must be seen against prior authority concerning "class closure" orders, as well as other decisions concerning class action procedure. The following cases were the principal authorities referred to by the parties.

[6]

Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd

In Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (2017) 252 FCR 1; [2017] FCAFC 98 (Melbourne City), the Full Court of the Federal Court considered s 33ZF(1) of the FCA Act, the cognate provision to s 183 of the CPA. In that case, an order was sought at first instance requiring all class members either to register or opt out prior to mediation commencing; the order sought would also have barred any class member who failed to register or opt out from sharing in the proceeds of any settlement or any judgment sum.
The primary judge in that case (Foster J) made an order requiring class members to register or opt out, but limited the consequence of non-registration to non-participation in any settlement, as opposed to judgment: see Jones v Treasury Wine Estates Ltd (No 2) [2017] FCA 296. Melbourne City Investments Pty Ltd (MCI), which had been the representative plaintiff in a competing class action, appealed, arguing that the class closure order was misleading in its terms. MCI had initially contended that the primary judge's decision to make a class closure order prior to settlement or judgment, and before the terms and consequences of settlement were known, operated improperly to exclude class members, but subsequently withdrew that contention. As such, the decision did not squarely address the point raised in the present case. However, the Full Court (comprising Jagot, Yates and Murphy JJ) remarked in an obiter passage generally supportive of the commercial rationale underlying class closure orders prior to mediation: "[74] Having said this, if a class closure order operates to facilitate the desirable end of settlement, it may be reasonably adapted to the purpose of seeking or obtaining justice in the proceeding and therefore appropriate under s 33ZF of the [FCA] Act. The courts have accepted on numerous occasions that, in order to facilitate settlement, it is appropriate to make orders to require class members to come forward and register in order to indicate a willingness to participate in a future settlement, and to make orders that class members be bound into the settlement but barred from sharing in its proceeds unless they register: see for example, Matthews v SPI Electricity Pty Ltd (No 13) (2013) 39 VR 255 at [22]-[80] (Matthews v SPI No 13) (J Forrest J) and the authorities there referred to; Farey v National Australia Bank Ltd [2014] FCA 1242 at [11]-[16] (Jacobson J); Inabu Pty Ltd v Leighton Holdings Ltd [2014] FCA 622 at [17]-[22] (Jacobson J); Newstart 123 Pty Ltd v Billabong International Ltd (2016) 343 ALR 662 at [67]-[68] (Beach J). An important aspect of the utility of a class proceeding is that they may achieve finality not only for class members but also for the respondent. [75] The rationale behind such class closure orders is that a requirement for class members to register their claims will facilitate settlement, because it allows both sides to have a better understanding of the total quantum of class members' claims, permits the settlement amount to be capped by reference to the number of class members, and assists in achieving finality (to the extent the Pt IVA regime permits): see Grave D, Adams K and Betts J, Class Actions in Australia (2nd ed, Lawbook Co, 2012) at [14.410]. A class closure order that precludes class members, who neither opt out nor register, from sharing in a subsequent settlement may facilitate settlement, and therefore be reasonably adapted to the purpose of seeking or obtaining justice in the proceeding. [76] However, we share the views expressed by the primary judge in relation to a class closure order that also precludes class members from sharing in a subsequent judgment. In our view the Court should be cautious before making a class closure order that, in the event settlement is not achieved, operates to lock class members out of their entitlement to make a claim and share in a judgment. That is, the facilitation of settlement is a good reason for a class closure order but, if settlement is not achieved, an order to shut out class members who do not respond to an arbitrary deadline is not." (emphasis added)

[7]

Takata Air Bag - Class closure and registration

In Takata Air Bag - Class closure and registration [2019] NSWSC 1493 (Takata), Sackar J made a similar order to that in Melbourne City, pursuant to ss 163 and 183 of the CPA. This order was termed a "soft" class closure, namely that the class be "closed" such that only group members who had registered with the solicitors for the representative plaintiff eight weeks prior to mediation could be permitted to share in the fruits of any settlement (which, if approved by the Court, would extinguish any claim they might otherwise have had unless they had already opted-out of the representative proceeding) subject to further order of the Court, and, if settlement was not reached by a given date, the class would "re-open", such that unregistered group members would be able to share in the fruits of any judgment given by the Court: see Takata at [11], [52]. The relevant order, entered on 3 February 2020, was as follows: "16. Pursuant to s 183 of the Act, any Group Member who neither opts out in accordance with Order 12 nor registers in accordance with Order 15 on or before the Class Deadline shall remain a Group Member for the purposes of any judgment or settlement but, in the event that an in-principle settlement is reached before the commencement of the trial on the common issues and that settlement is ultimately approved by the Court, shall be bound by the terms of the settlement agreement and barred from making any claim against the Defendant in respect of or relating to the subject matter of this proceeding, including participating in any form of compensation or otherwise benefiting from any relief that might be ordered or agreed."
Pausing there, the use of terminology such as "hard" and "soft" class "closure" has been justifiably deprecated: see, eg, Haselhurst at [2], [45]; Parkin at [8]. For completeness, "hard" class closure is similar to the above, but without the "re-opening" of the class in the event that mediation fails to achieve a settlement. Generally, in cases of "hard" class closure, those group members who fail to register by the appointed date have their cause of action extinguished for no monetary (or other) benefit.
Takata was overturned by Haselhurst, but it is necessary to be aware of it in order to understand the nature of the decision in Haselhurst.

[8]

BMW Australia Ltd v Brewster

In Brewster, the High Court considered s 183 of the CPA (and s 33ZF of the FCA Act), and whether it empowered the Supreme Court to make a "common fund order" at an early stage of the proceeding. A "common fund order" is an order that 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 recovered.
In their joint judgment at [3], Kiefel CJ, Bell and Keane JJ (in a majority which included Nettle J and Gordon J with Gageler J and Edelman J dissenting) began by noting the purposes of s 183 and its cognate provision, s 33ZF, in the FCA Act): "While the power conferred by these sections is wide, it does not extend to the making of a CFO [common fund order]. These sections empower the making of orders as to how an action should proceed in order to do justice. They are not concerned with the radically different question as to whether an action can proceed at all. It is not appropriate or necessary to ensure that justice is done in a representative proceeding for a court to promote the prosecution of the proceeding in order to enable it to be heard and determined by that court. The making of an order at the outset of a representative proceeding, in order to assure a potential funder of the litigation of a sufficient level of return upon its investment to secure its support for the proceeding, is beyond the purpose of the legislation."
A key element of their Honours' reasoning, under the heading "Textual considerations", was that the commercial viability of the proceeding, from the perspective of a litigation funder, was not a matter that supported the making of an order under s 183 of the CPA. Their Honours said: "[49] The orders contemplated by s 33ZF and s 183 are orders which may be thought to make certain that justice is done in the proceeding. An order the purpose of which is to ensure that the proceeding is able to go forward is not such an order… [50] The focus of the power conferred on the court by the text is upon ensuring, that is, making certain by the order, that justice is done in the proceeding as between the parties to it. As a matter of the ordinary and natural meaning of these words, they authorise an order apt to advance the effective determination by the court of the issues between the parties to the proceeding. Whether or not a potential funder of the claimants may be given sufficient financial inducement to support the proceeding is outside the concern to which the text is addressed. [51] The text of each of s 33ZF and s 183 assumes that an issue has arisen in a pending proceeding between the parties to it, and that the proceeding will be advanced towards a just and effective resolution by the order sought from the court… Nor does [the making of a CFO] assist in doing justice between group members in relation to the costs of litigation." (emphasis added) As will be seen below, the italicised consideration above, namely the importance of doing justice between group members is of relevance to this case.

[9]

Haselhurst v Toyota Motor Corporation Australia Ltd (t/as Toyota Australia)

In Haselhurst, this Court considered a "soft class closure" order, which purported to have been made pursuant to s 183 of the CPA. The text of the order itself has been set out at [38] above.
Under the order that was sought, unregistered group members' claims were, contingently on settlement, barred, but if settlement was not reached, unregistered group members were entitled to participate in any judgment. Separate judgments in that proceeding were given by Payne JA and me with Macfarlan and Leeming JJA and Emmett AJA agreeing with both judgments.
Payne JA relevantly noted at [44], in a statement that is equally applicable in this case: "The starting point is the construction of the only order sought to be challenged, namely Order 16. Until the legal and practical effect of that order is understood, it is not possible to address the questions of power and miscarriage of discretion."
Payne JA pointed out, again relevantly for the present case, that "closure" of a class was not necessary in order to achieve settlement "as a matter of demonstrable historical fact" (at [63]). His Honour also noted the alternative approach to "closing" the class, being of altering the class, at [71]: "The availability of the technique of altering a class so as to confine it to persons with a claim against the defendants and who had retained the firm of solicitors and/or had entered into a litigation funding agreement was confirmed by Multiplex Funds Management Ltd v P Dawson Nominees Pty Ltd (2007) 164 FCR 275; [2007] FCAFC 200."
Key to Payne JA's reasoning, however, was that the order sought in Haselhurst was inconsistent with the reasoning of the High Court in Brewster at [70] (see above at [44]), namely that, in Payne JA's words (at [106]), "s 183 was not a source of power to do work beyond that done by the specific provisions which the text and structure of the legislation show the section was intended to supplement". That "incongruity" (as his Honour termed it at [105] and [108]) was said to be fatal to the argument in that case that the order was within the Court's power pursuant to s 183 of the CPA. As his Honour put the matter at [105]: "It is, so the plurality in Brewster explains, incongruous to read a power into s 183 when other provisions of Pt 10 make specific provisions apt to accommodate that task but which operate at the conclusion of the proceeding."

[10]

Wigmans v AMP Ltd

In Wigmans, this Court (comprising Macfarlan, Leeming and White JJA) considered an appeal from an order made by Ward CJ in Eq (as the President then was) which noted the following: "In the event that the proceedings settle at any time between the first day of the mediation (being the mediation referred to in Order 19 above) and the first to occur of the following: a. the date which is 6 months after the first day of that mediation; and b. the first day of the hearing on liability in these proceedings, then the parties intend to apply to the Court for an order that any Group Member who by the Class Deadline does not opt out and who is not a New Registered Group Member or Existing Registered Group Member will not receive any benefit pursuant to the settlement." Notification of the intention referred to in the above order was to be distributed to group members: see Wigmans at [26].
That notification in terms was set out at [32] of Wigmans: "The Plaintiffs and AMP intend to seek an order that any Group Member who does not register for the AMP Shareholder Class Action by 4:00pm (AEDT) on 4 September 2020 should be excluded from receiving a benefit from any settlement that may be agreed to … at the forthcoming mediation ..."
Ward CJ in Eq had held that a notice containing the foregoing could be approved pursuant to s 176(1) of the CPA conformably with Haselhurst: Komlotex Pty Ltd v AMP Ltd [2020] NSWSC 504 at [206]-[208] (Komlotex). It is worth noting that the appeal by Ms Wigmans came about as Ms Wigmans was the representative plaintiff of a competing class action, which had been permanently stayed, and had successfully sought special leave to appeal in relation to that order at the time of her appeal, although the appeal had not yet been heard: Wigmans at [11].
In any case, the basis for Ward CJ in Eq's orders was set out after a detailed consideration of Haselhurst. Her Honour identified the ratio of the decision in Haselhurst as "ly[ing] in the barring effect of the impugned order": Komlotex at [200]. Her Honour then noted that the order sought in Komlotex raised a different issue, and in her Honour's view, was not "inconsistent with the statutory regime under which a group member is able to take the benefit of judgment or settlement even without taking any positive step in the proceeding": Komlotex at [206].
Further, her Honour held that the "insoluble conflict of interest" which Payne JA noted in Haselhurst would not necessarily arise in Komlotex, holding at [208]: "Without being in any way prescriptive, it seems to me that there is ample scope for negotiation of potential outcomes that might depend on the ultimate size of the class and/or its composition without there being an inevitable or insoluble conflict of interest. Further, there would be ways, if necessary, in which separate interests could be independently pursued within the course of the same mediation (perhaps with separate representation within the same firm of solicitors or with separate Counsel at the mediation)."

[11]

Parkin v Boral Ltd

In Parkin, the Full Court of the Federal Court (Murphy and Lee JJ, Beach J agreeing) considered the same question as in Wigmans by way of a separate question and stated case: see FCA Act s 25(6); Federal Court Rules 2011 (Cth) r 30.01. Their Honours reached the opposite conclusion to this Court in Wigmans, holding that Wigmans was "plainly wrong": see [109]-[110].
Parkin was run along similar lines to Wigmans (and, indeed, to this case): a contradictor was appointed, evidence was given by experienced solicitors to the effect that the proposed order would facilitate settlement of the matter by quantifying the number of group members and providing finality for the defendant, and the cognate provisions in the FCA Act (to ss 175-176 of the CPA) were said to be engaged. However, in Parkin, Murphy and Lee JJ emphasised the following: "[29] We are about to enter upon our fourth decade of modern class actions. Particularly in securities class actions, experience demonstrates that, by an overwhelming margin, Court-approved settlements are the most common way group members claims are resolved in Pt IVA class actions. As was noted in Perera v GetSwift Ltd (2018) 263 FCR 1 (GetSwift) (at [30] per Lee J), this characteristic of this type of litigation is both striking and singular. The result of all of this is that there is a potential procedural contradiction in the way in which securities class actions are often conducted and managed. On the one hand, one goes through the solemnity of making orders on the basis that the litigation will be the subject of an initial trial at which contested issues will be determined, while on the other hand, one recognises that this rarely happens. As was noted in GetSwift (at [34]) "the time has come for the Court to recognise the reality" that securities class actions "are overwhelmingly likely to resolve by a bargain, subject to Court approval". [30] One of the ways by which this reality is recognised is the focus of the docket judge, consistently with the requirement in Pt VB of the [FCA] Act to facilitate the just resolution of claims as efficiently and inexpensively as possible, on assessing when a mediation should be ordered to take place. This important case management decision is primarily informed by an evaluation of when the prospects of a successful outcome of settlement discussions are at their maximum. In this context, it is now common for the Court to make orders requiring provision of information by respondents, the applicant or group members to allow those mediating to be apprised with sufficient information to form a conscientious view as to a proposed settlement."

[12]

Competing contentions

Having set out many of the above authorities, Lendlease emphasised the following three points.
First, that the text of s 175(5) conferred an unconfined power on the Court, which was very broadly expressed, in light of the use of the phrases "any matter" and "any stage". Lendlease drew the Court's attention to the observations of the High Court in Owners of the Ship "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 421; [1994] HCA 54 (Shin Kobe Maru) to the effect that the Court should not construe legislative provisions which confer jurisdiction or powers on a court "by making implications or imposing limitations which are not found in the express words." Such dicta has been applied to representative proceedings involving Pt IVA: see BHP Group Limited v Impiombato [2022] HCA 33; (2022) 96 ALJR 956 at [15]; Wong v Silkfield Pty Ltd (1999) 199 CLR 255; [1999] HCA 48 at [11]. In that respect, Lendlease submitted that Parliament must be taken to have comprehended the need for courts to develop their own procedures, and thus legislated Pt 10 of the CPA in a broadly worded way, which can take into account commercial reality.
Second, Lendlease submitted that the "fundamental precept" identified in Wigmans, formulated by Lendlease as "that group members may do nothing prior to settlement and still reap its benefits" was an a priori assumption about legislative purpose, and that Mobil Oil was not intended to be a statement of legislative intent, and that even so, it did not, on its own terms, support such a broad conception of a "fundamental precept". Lendlease also argued that the acceptance of Mobil Oil in Brewster was qualified, to the effect that the opt out model was designed to allow representative proceedings to continue even if group members were unaware of the proceeding.
Third, Lendlease argued that Wigmans incorrectly considered the potential for conflicts between registered and unregistered group members as relevant to determining the ambit of the Court's power to approve notices under s 175(5) of the CPA. The Court was taken to several mechanisms to obviate and mitigate such conflicts, including that all settlements must be approved by the Court.
By contrast, the contradictor embraced this Court's decision in Wigmans. In particular, the contradictor emphasised that the occasion for excluding group members from the benefits of a settlement or a judgment "is its successful completion", picking up the observation in Brewster at [73] quoted at [45] above.

[13]

Consideration

The starting point of the analysis is not whether s 175(5) of the CPA confers power on this Court to include a notification of the kind sought to be included in the opt out and registration notice that the parties seek to be issued in the present case. It is whether this Court's recent unanimous decision in Wigmans (which both parties accepted compelled a negative answer to that question) is "plainly wrong" and should not be followed.
I do not consider that it is plainly wrong although it may be accepted that the question is one upon which opinions might differ (as illustrated by the decision at first instance in Wigmans and the decision of the Full Court of the Federal Court in Parkin). Having said that, and as will be explained, I do not find aspects of the reasoning in Parkin persuasive and certainly not sufficiently persuasive as to justify a conclusion that Wigmans was "plainly wrong".
Wigmans was a decision which built carefully on earlier authority, especially the decision of a five-judge bench in Haselhurst, a decision which was accepted by Lendlease to have been correctly decided. The Court in Wigmans was conscious, of course, of the then very recent decision of the High Court in Brewster which, as observed above at [24]-[26], emphasised, on the one hand, the danger of looking at a single provision of a statutory scheme in isolation, and, on the other hand, the importance of statutory context.
The majority of the High Court in Brewster must be taken to have accepted the appellant's submission in that case, namely that the principle of construction identified in Shin Kobe Maru (which Lendlease relies on in the present case, as did the Court in Parkin), cannot be deployed to construe provisions of the respective class action regimes established in the FCA Act and Pt 10 of the CPA more liberally than their text and context permit: Brewster at [36]. Apparently general words in a statute may need to be read down or at least in a way that conforms with other provisions of the statute or with the purpose of the Act: Ross v The Queen (1979) 141 CLR 432 at 440; [1979] HCA 29. Moreover, notwithstanding that it is true that there is a general principle of statutory construction associated with Shin Kobe Maru which militates against reading implied limitations into a conferral of power on a superior court, some powers will contain inherent limitations which may be derived from statutory purpose or a detailed statutory scheme (see, eg, Aussie Skips Recycling Pty Ltd v Strathfield Municipal Council (2020) 103 NSWLR 834; [2020] NSWCA 292 at [48]-[52] and, of course, Brewster itself) or by reference to an inferred legislative intent that the power would not be used in a way which authorises, for example, a misleading or deceptive notification.

[14]

Conclusion

For the above reasons, I am not satisfied that this Court's recent decision in Wigmans is plainly wrong, or that there are compelling reasons to depart from it.
I would not grant leave, to the extent that leave is necessary, to overrule Wigmans.
Accepting the correctness of that decision, the answer to the separate question must be in the negative.
WARD P: I have had the advantage of considering the draft reasons of Bell CJ in this matter. I agree with the orders that his Honour has proposed. I should make clear that the reason I agree with the orders is that I do not consider that the decision of the Court of Appeal in Wigmans v AMP Ltd (2020) 102 NSWLR 199; [2020] NSWCA 104 (Wigmans) is "plainly wrong". Had I been so persuaded, then I would have concluded that there was compelling reason (namely, for uniformity in this area) to depart from that decision, having regard to the different conclusion reached by the Full Court of the Federal Court in Parkin v Boral Ltd (2022) 291 FCR 116; [2022] FCAFC 47 (Parkin), which I am also not prepared to say is plainly wrong. I accept that my conclusion that neither of the two intermediate appellate court decisions meets the threshold of being plainly wrong would, of course, give rise to the dilemma identified by Bell CJ (at [23]); and in those circumstances I would agree with the view expressed by his Honour in the last sentence of [23].
Where I respectfully differ from the Court in Wigmans is the proposition that notification to group members of an intention (or possible intention) at a later point in time to seek an order from the Court excluding unregistered group members from participation in a settlement reached at mediation gives rise to an insoluble conflict of interest at the time that the notice is issued. I pause here to note that the proposed notification in the present case, insofar as it appears to speak to a firm present intention of the plaintiff to seek an order of that kind (using the positive language "will seek") may come closer to giving rise to a conflict of interest than a notification of the possibility that such an order might later be sought; though the fact that the proposed notification in the present case is drafted with the alternative that the application might only be made by the defendant might suggest that there is not yet such a firm intention at present on the part of the representative plaintiff.

[15]

Appendix A (269920, pdf) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 April 2024

HEADNOTE [This headnote is not to be read as part of the judgment] In shareholder class action proceedings, the following separate question was stated and removed to the Court of Appeal: "Notwithstanding the decision in Wigmans v AMP Ltd (2020) 102 NSWLR 199 and having regard to the decision in Parkin v Boral Ltd (2022) 291 FCR 116, does the Supreme Court of NSW have power pursuant to sections 175(1), 175(5) and 176(1) of the Civil Procedure Act 2005 (NSW) (CPA) or otherwise to approve a notice to Group Members of the right to register to participate in any settlement of the proceedings or opt out of the proceedings for the purposes of CPA section 162 containing the following notation: Upon any settlement of this proceeding the parties, alternatively, the defendant, will seek an order, which, if made, has the effect of providing that any Group Member who by a registration date: (i) has not registered; or (ii) has not opted out in accordance with the orders made by the Court, will remain a Group Member for all purposes of this proceeding but shall not, without leave of the Court, be permitted to seek any benefit pursuant to any settlement (subject to Court approval) of this proceeding that occurs before final judgment." The Full Court of the Federal Court in Parkin v Boral Ltd (2022) 291 FCR 116; [2022] FCAFC 47 (Parkin) expressed the view that this Court's decision in Wigmans v AMP Ltd (2020) 102 NSWLR 199; [2020] NSWCA 104 (Wigmans) was "plainly wrong" and should not be followed. The Court (Bell CJ, Gleeson, Leeming and Stern JJA agreeing, Ward P agreeing in the orders), answering the separate question in the negative, held that: 1. Intermediate appellate courts should only depart from decisions of courts of co-ordinate jurisdiction, or their own previous decisions, if they determine that the impugned decision is "plainly wrong", or, to use a different expression, where there are "compelling reasons" to depart from the impugned decision: [19]-[23] (Bell CJ); [138] (Gleeson JA); [139]-[140] (Leeming JA); [160] (Stern JA). Hill v Zuda Pty Ltd (2022) 275 CLR 24; [2022] HCA 21 applied. Totaan v R (2022) 108 NSWLR 17; [2022] NSWCCA 75; Gett v Tabet (2009) 109 NSWLR 1; [2009] NSWCA 76 referred to. 1. Observations by Leeming JA on the desirability of focusing on the existence of "compelling reasons" to depart from an earlier decision rather than the deprecatory language of "plainly wrong": [140] (Leeming JA); [22] (Bell CJ); [138] (Gleeson JA); [160] (Stern JA). 2. Where there are "competing" decisions, neither of which can be said to be "plainly wrong" and one of those decisions is of the Court considering the question, that Court should adhere to its previously expressed view: [23] (Bell CJ); [138] (Gleeson JA); [139] (Leeming JA); [160] (Stern JA). 3. The reasons advanced in Parkin leading to the conclusion that Wigmans was "plainly wrong" were not, with respect to the Full Court, sufficiently persuasive as to justify that conclusion: [94]-[123] (Bell CJ); [138] (Gleeson JA); [139], [141]-[159] (Leeming JA); [160] (Stern JA). 4. Wigmans was not "plainly wrong" and there are no compelling reasons why a recent, closely reasoned decision of this Court, building on earlier decisions, should be departed from: [94]-[123] (Bell CJ); [138] (Gleeson JA); [139], [141]-[159] (Leeming JA); [160] (Stern JA). 5. The reasoning in Wigmans was underpinned by this Court's recent decision in in Haselhurst v Toyota Motor Corporation Australia Ltd (t/as Toyota Australia) (2020) 101 NSWLR 890; [2020] NSWCA 66 (Haselhurst) and the High Court's decision in Mobil Oil Australia Pty Ltd v State of Victoria (2002) 211 CLR 1; [2002] HCA 27 (Mobil Oil): [59]-[76], [95], [97] (Bell CJ); [138] (Gleeson JA); [139] (Leeming JA); [160] (Stern JA). 6. Reference in Wigmans to the "fundamental precept" of Pt 10 of the Civil Procedure Act 2005 (NSW) (CPA) (of which the Parkin court was critical) was to the statutory context, just as the High Court's observations in Mobil Oil relied on in Wigmans were also to analogous statutory context. Identification of fundamental precepts in the law is entirely orthodox: [97]-[101] (Bell CJ); [138] (Gleeson JA); [139], [141]-[158] (Leeming JA); [160] (Stern JA). Russo v Aiello (2003) 215 CLR 643; [2003] HCA 53; Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39; ICM Agriculture Pty Ltd v The Commonwealth (2009) 240 CLR 140; [2009] HCA 51; Kleinwort Benson Australia Ltd v Crowl (1988) 165 CLR 71; [1988] HCA 34; Wilde v The Queen (1988) 164 CLR 365; [1988] HCA 6 referred to. 1. Providing the proposed notification to group members would promote a conflict of interest for the representative party who would be constrained to participate in any mediation on the basis that registered group members would share in compensation obtained through settlement; but unregistered group members would not only not obtain any benefit from settlement, but would be likely to have their causes of action extinguished. Ward P, differing in emphasis, such conflicts would arise only upon application to the court to exclude the unregistered group members: [106]-[117] (Bell CJ); [138] (Gleeson JA); [139] (Leeming JA); [160] (Stern JA); cf [128]-[136] (Ward P). Wigmans v AMP Ltd (2020) 102 NSWLR 199; [2020] NSWCA 104; Haselhurst v Toyota Motor Corporation Australia Ltd (t/as Toyota Australia) (2020) 101 NSWLR 890; [2020] NSWCA 66 referred to. 1. Section 175(5) of the CPA must be construed in the context of the CPA as a whole: [24]-[26], [47], [95] (Bell CJ); [138] (Gleeson JA); [139] (Leeming JA); [160] (Stern JA). BMW Australia Ltd v Brewster; Westpac Banking Corporation v Lenthall (2019) 269 CLR 574; [2019] HCA 45; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28; Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1; [2015] HCA 14 applied. Ross v The Queen (1979) 141 CLR 432; [1979] HCA 29; Owners of the Ship "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404; [1994] HCA 54 cited; Aussie Skips Recycling Pty Ltd v Strathfield Municipal Council (2020) 103 NSWLR 834; [2020] NSWCA 292; BMW Australia Ltd v Brewster; Westpac Banking Corporation v Lenthall (2019) 269 CLR 574; [2019] HCA 45 referred to. 1. Section 175(6) of the CPA constrains s 175(5) in two respects: first, the notice must relate to an "event", second, that is not a future event but rather, an event that has "happened". The proposed notification is not of any event. It is of a present intention on the part of Lendlease and perhaps the representative plaintiff to participate in settlement negotiations in a particular way: [32], [112], [118]-[119] (Bell CJ), [138] (Gleeson JA), [139] (Leeming JA), [160] (Stern JA); cf [137] (Ward P).

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