Dorajay Pty Ltd v Aristocrat Leisure Limited - [2008] FCA 1311 - FCA 2008 case summary — Zoe

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Dorajay Pty Ltd v Aristocrat Leisure Limited

[2008] FCA 1311

Federal Court of Australia|2008-06-24|Before: Stone J

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At a glance

Source facts

Court

Federal Court of Australia

Decision date

2008-06-24

Before

Stone J

Source

Original judgment source is linked above.

Judgment (30 paragraphs)

[1]

REASONS FOR JUDGMENT 1 The applicant commenced proceedings in this Court as the representative of a group of investors (group members) who acquired shares in the respondent between 19 February 2002 and 26 May 2003 and who claim to have suffered loss and damage as a result of the respondent's conduct. The applicant claims that Aristocrat's conduct was in breach of its obligation of continuous disclosure imposed by the ASX rules and by s 674 of the Corporations Act 2001 (Cth)or a breach of its obligation not to engage in misleading and deceptive conduct imposed either by s 52 of the Trade Practices Act 1974 (Cth) or the equivalent provisions of the Corporations Act or the Australian Securities and Investments Commission Act 1981 (Cth). 2 The solicitors, Maurice Blackburn, act for a number of group members, including the applicant, in relation to 556 shareholdings. All of the group members for whom Maurice Blackburn act have entered into litigation funding agreements with IMF (Australia) Ltd. These members are known as the "Funded Group Members". There is, however, an unknown number of group members who have not entered into litigation funding agreements with IMF and who have not retained Maurice Blackburn to act on their behalf. These group members are known as the "Other Group Members".

[2]

3 Negotiations between the parties have led to a proposal for settlement of their dispute. Pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) in order to be effective a settlement must be approved by the Court. On 19 May 2008 a deed of settlement (Original Deed of Settlement) was executed by the applicant, the respondent, Maurice Blackburn and IMF. The Original Deed of Settlement provided that the amount available on settlement for Other Group Members was $20 million. It provided that if, based on the information provided by Other Group Members, an initial assessment of the quantum of their claims exceeded that amount, the Original Deed and any settlement were at an end and of no effect.

[3]

4 Pursuant to ss 33X and 33Y of the Federal Court of Australia Act 1976 (Cth), and with the consent of the parties, on 21 May 2008 I made orders directed to closing the class of participating group members, effectively so that the monetary entitlement of each group member could be ascertained. I ordered that all group members were to be sent a notice (the Identification Notice) together with an Aristocrat Share Trading Information Form (the Proof) in the form annexed to the orders. The Identification Notice stated that it was intended for "all persons identified on Aristocrat's share register as having acquired Aristocrat shares in the relevant period, except for those who have opted-out of the proceeding". It stated: If you have received this notice you are potentially one of the Group Members. You are not a Group Member if you returned a Notice of Opting Out before 4.00pm, 8 December 2006. 5 The Identification Notice further stated, in bold type, that the Court had ordered that group members who wished to participate in the conditional settlement were required to complete the enclosed Proof and "mail it" to Maurice Blackburn. The date fixed by the Court for compliance with these instructions was 24 June 2008. The documents were to be sent within 7 days of the Court's order to the last known address of the Funded Group Members and, in respect of the Other Group Members, the address shown on the register of shareholders held by the respondent. 6 Mr Jacob Varghese, an associate of the firm Maurice Blackburn who, with others, has the care and conduct of this proceeding on behalf of the applicant and group members, has sworn two affidavits, on 12 and 13 August 2008, in respect of those aspects of the matter presently under consideration. Unless otherwise indicated, the facts stated in these reasons are taken from Mr Varghese's unchallenged affidavits. After the hearing and at the request of the Court, Mr Varghese provided a third affidavit sworn on 22 August 2008. This affidavit is referred to below at [19]. 7 In accordance with the orders of 21 May 2008, the Identification Notice and Proof were sent to the Other Group Members on 27 May 2008 and to the Funded Group Members on 28 May 2008. By 24 June 2008 Proofs had been submitted in respect of 2,331 shareholdings for Other Group Members; and 556 shareholdings for Funded Group Members. The initial assessment of the claims of Other Group Members exceeded $20 million and thus the Original Deed of Settlement terminated according to its terms. 8 Mr Varghese explained the subsequent events as follows: Further settlement negotiations ensued between the parties. On 11 July 2008 a new Deed of Settlement ("the Deed") was executed by the Applicant, the Respondent, Maurice Blackburn and IMF. The Deed provides for $27 million to be available for Other Group Members. Before this settlement was agreed, I assessed from the Proofs provided by [24 June 2008] that this sum was sufficient to distribute to Participating Other Group Members the same proportion of their loss in hand as Participating Funded Group Members would receive. The Deed provides for two distinct funds: (a) the "FGM Fund" of $109 million plus interest for distribution to Participating Funded Group Members; and (b) the "OGM Fund" of $27 million plus interest for distribution to Participating Other Group Members. If the claims of group members with Late Notified Holdings are included in the Final List of Participating Group Members, and the total value of Participating Other Group Members' claims then exceeds $27 million, then each Participating Other Group Member will receive a lesser distribution in hand than that which they would have received if they were a Participating Funded Group Member. 9 On 18 July 2008 I made further orders in relation to the proposed settlement, again with the consent of the parties. Those orders provided for the Notice of Proposed Settlement in the form annexed to the orders to be sent to the address recorded on the Proof submitted by each Participating Group Member; and, in respect of all other group members - the address shown on the register of shareholders held by the respondent. Orders 3 and 4 of the orders made on 18 July 2008 provided as follows: 3. If any group member: (a) did not submit a Proof by 24 June 2008, or did not include some part of the group member's shareholding in a Proof that was submitted by 24 June 2008 ("Late Notified Holding"); and (b) wishes to participate, in respect of the Late Notified Holding, in the distribution of any settlement payment pursuant to the proposed settlement of the proceeding upon the terms set out in the Deed of Settlement executed by the parties and dated 11 July 2008; the group member must (c) deliver to Maurice Blackburn by 4:00pm on 8 August 2008 a written statement as to the reasons why the Late Notified Holding was not included in a Proof submitted by 24 June 2008 and why the Late Notified Holding should be included on the Final List of Participating Group Members. 4. Maurice Blackburn must, upon receipt of any written statement of reasons in accordance with 3 (c), file and serve the statement and request the Court to list a hearing to determine whether the Late Notified Holding should be included on the Final List of Participating Group Members, provided however that if Maurice Blackburn considers that the statement of reasons discloses an error or omission by Maurice Blackburn it may accept the Late Notified Holding and notify the Court and Aristocrat accordingly. Any hearing in accordance with this order be listed for 14 August 2008. 10 On 21 July 2008 Mr Varghese mailed a letter (21 July letter) "to all those persons from whom we had received a Proof between 25 June and 21 July 2008 inclusive, to advise them of the Court's orders and the need for a statement of reasons". Mr Varghese also noted that from 21 July 2008 to the date of his first affidavit (12 August 2008) he advised and instructed the Maurice Blackburn employees whom he supervised "to advise, all persons who have returned a Proof without a statement of reasons of the need to provide a statement of reasons by 4.00 pm, 8 August 2008 in accordance with the Settlement Notice Orders". Mr Varghese continued: On 1 August 2008, on reviewing the Statements of Reasons received by that date, Mr Murphy and I noted that most of the Statements of Reasons provided reasons that were unsupported by any evidence other than the assertion of the Late Notified Group Member. We decided to seek their reasons in the form of a statutory declaration or sworn affidavit in all cases other than those in which a postmarked enveloped [sic] confirmed that the Late Notified Group Member had mailed the Proof on or before 24 June 2008. On 1 August 2008 I mailed a letter by Express Post to each Late Notified Group Member other than those with a postmark on or before 24 June 2008. I also enclosed a copy of a standard form Commonwealth statutory declaration. … From 1 August 2008 to date I advised, and I instructed the Maurice Blackburn employees under my supervision to advise, all telephone and email enquirers that they should provide a statutory declaration or sworn affidavit in support of, or by way of, the statement of reasons. Further, the Maurice Blackburn employees under my supervision have endeavoured to contact by telephone, email or Express Post all of those persons who have provided Statements of Reasons without a statutory declaration or sworn affidavit to provide this advice. 11 On 14 August 2008 a hearing was held in the Federal Court, in accordance with orders made on 18 July 2008, to determine whether the Late Notified Holdings should be included on the Final List of Participating Group Members. Mr A Franklin SC was briefed by Maurice Blackburn to appear as a contradictor at the hearing to make submissions to the Court on behalf of the Late Notified Members. 12 Maurice Blackburn sorted the statements of reasons received by 4.00 pm on 8 August 2008 into categories for determination. Before considering these categories it is necessary to articulate the principles to be applied in making the determination.

[5]

Applying the principles 15 In considering the statements of reasons provided by Late Notified Group members it is relevant to bear in mind the form in which the notices that went to the group members were sent. The Identification Notice sent in May 2008 stated in bold capitals: IF YOU WISH TO PARTICIPATE IN A PROPOSED SETTLEMENT OF THIS REPRESENTATIVE ACTION YOU MUST COMPLY WITH THIS NOTICE. IF YOU DO NOT DO SO YOUR RIGHTS MAY BE LOST. 16 The notice referred to the "conditional settlement" and stated that the Court had ordered that group members wishing to participate in a conditional settlement must complete and mail the Proof by 24 June 2008 to Maurice Blackburn. 17 The subsequent notice sent in July 2008 was headed in bold: "Notice to Group Members - Proposed Settlement of Class Action". It stated: If you did not submit any Proof (or complete Proof) by 24 June 2008 you are not a Participating Group Member and you will not receive a distribution of money under the proposed settlement. If you are in this category, but you still wish to make a claim in the class action, you are required to provide a statement of reasons why you should be included as a Participating Group Member, together with a Proof, and the Court will be asked to make a determination in your case. The statement of reasons and the Proof must be received by Maurice Blackburn at the address above by no later than 4 pm, 8 August 2008. You may need to attend and/or make submissions to the Court to enable the Court to make this determination. 18 Persons receiving these notices could reasonably be expected to understand that this was an important matter. The Identification Notice makes it very clear that members who do not comply with the notice may jeopardise their rights. The 21 July letter is equally clear. It is not unreasonable to expect members who were uncertain as to the action required of them or how the circumstances outlined in these documents applied to them to seek assistance, legal or otherwise. Similarly, given the fact that the request for a statement of reasons also stated that the Court would be asked to make a determination, it is reasonable to expect members to realise that they should state their reasons with sufficient clarity and detail to persuade the Court to make a determination in their favour. 19 As mentioned above, Maurice Blackburn advised many Late Notified Group Members who had provided their reasons in an unsworn statement, to provide a statutory declaration or affidavit in support of their reasons; see [10] above. Members thus notified would have an additional reason for understanding that this statement needed to be persuasive and, where they failed to provide a sworn statement, the Court is entitled to be sceptical about their unsworn statement. This does not mean that such a statement would be disbelieved. Sufficient independent corroboration might, for example, be provided to support the reasons given despite the statement being unsworn. This scepticism would not extend to members who, not having been so advised, provided unsworn statements of reasons. It would be unreasonable to expect persons who were asked only "to provide a statement of reasons" to provide a sworn statement when they had not been asked to do so. Mr Varghese's third affidavit (see [6] above) named all Late Notified Group members who failed to provide a sworn statement after having been advised to do so. 20 In its outline of the "basic principles", Aristocrat stated that "anything short of a statutory declaration (such as a letter merely asserting the existence of grounds) is not sufficient" for a Late Notified Group Member to be included in the settlement. I do not think that this approach can be justified in all circumstances. The formal notice sent pursuant to the Court orders merely requested a statement of reasons; it did not specify that a statutory declaration or affidavit should be provided. As mentioned above, some group members were advised to provide a statutory declaration and where this is the case it is reasonable to attribute some significance to the failure to provide a sworn statement. Where, however, the relevant group member did not receive such advice, it would be unfair to dismiss their statement of reasons merely because it is an unsworn statement. In those circumstances the unsworn statement, subject to inherent inconsistency or improbability should be accepted as a statement of truth. 21 Similarly, the Court should accept statements made on oath, in the absence of evidence to the contrary, as true. This does not mean, however, that sworn or unsworn statements that are accepted as true will necessarily be accepted as providing a good reason for the lateness. The Court is not obliged to accept the reasons given uncritically. In such a case it is still necessary for the reasons given to be sufficient to satisfy the Court that the member should be included in the settlement. It may be that, even if everything that is stated is accepted as true, the reason is not sufficient to justify non-compliance with the deadline of 24 June 2008. For instance, I am prepared to accept that a group member who was overseas for the period between 27 May and 24 June 2008 and who did not return the Proof before 24 June 2008 has a good reason for not complying with the Court deadline. This does not mean, however, that the statement, "I was overseas at the relevant time", submitted without details of the dates between which the group member was overseas and without any documentary evidence such as boarding passes or airline tickets, is sufficient to satisfy the Court that there is a good reason.

[6]

Categories of Late Notified Group Members 22 For purposes of the hearing on 14 August 2008 Maurice Blackburn divided the Late Notified Group Members whose statements of reasons or Proofs were received by 4.00 pm, 8 August 2008 into eight categories. Tender bundles containing the statement of reasons grouped in those categories were provided to the Court. I have calculated the number of group members in each category from the documents tendered and in the following list of those categories, have shown that number in parentheses. The categories are: A. Proofs postmarked 24 June 2008 or before; (89 of whom 34 submitted statements of reasons and 55 have not submitted statements) B. Proofs received 25-26 June 2008, but where no postmark is recorded; (18 of whom 9 submitted statements of reasons and 9 have not submitted statements) C. Claimant alleges that a Proof was mailed before 24 June 2008, but no postmark is available or Proof was never received by Maurice Blackburn; (4 statements of reasons received) D. Claimant alleges that they were overseas or away in the period 27 May 2008 to 24 June 2008; (40 statements of reasons received) E. Claimant alleges that the Identification Notice was not received in the period 27 May 2008 to 24 June 2008; (39 statements of reasons received) F. Claimant alleges that they were ill, bereaved or caring for relatives in the period 27 May 2008 to 24 June 2008; (12 statements of reasons received) G. Other reasons; (38 statements of reasons received) and H. Statement of reasons received, but no Proof had been received by 4pm, 8 August 2008; (8 statements of reasons received). 23 In his submission on behalf of the Late Notified Members, Mr Franklin SC stated that there was no objection to the categories identified by Maurice Blackburn. He summarised the general approach adopted in his submissions as follows: In all cases in which it is reasonable to assume, on the probabilities, that the Proof was posted on or before 24 June 2008, the contradictor will submit that the member should be included. This includes not only cases where the envelope was postmarked 24 June 2008 or before, but also other cases where it is reasonable to assume, on the probabilities, that the proof was mailed on [or] before that date. An example is where the Proof was received on 25 (or perhaps 26) June 2008 -- it is reasonable to assume that the Proof was mailed on or before the critical date. In many cases a statutory declaration has been filed together with some independent evidence (document or other declaration) which, if believed, establishes either that the Proof was mailed on time or that there was some legitimate reason preventing the member from posting the Proof by 24 June 2008. In all cases where there is credible independent evidence to support the assertion the contradictor will recommend inclusion. In many cases there are statutory declarations filed without any independent evidence to support the statements made. Each such case will have to be looked at on its own merits. For example, some members have sworn that they did not receive the Identification Notice and have provided credible background evidence as to why this was so. In those cases, it is submitted, that the Court should favourably consider inclusion. In other cases there is a statutory declaration that contains no more than a bald assertion that the Identification Notice was not received. It will be for the court to decide whether to accept sworn statements to this affect [sic]. In these submissions the contradictor has attempted to group different categories of evidence together. In cases in which the contradictor is of the view that there is no convincing argument to be made for inclusion, having regard to the definition of categories and the reasons given by the Claimant, no submissions are made in favour of inclusion but in each case the reasons advanced by the Claimant are summarised in the appendix to these submissions. In respect of each Claimant who has been excluded the contradictor has read the material sent to [Maurice Blackburn] and correspondence from [Maurice Blackburn] to the complainant. If no submission is made for the inclusion of a particular complainant (in which event he, and she or it is not mentioned in the body of these submissions and only in the appendix) that is because the contradictor has formed the view that the documents do not disclose sufficient reasons for inclusion and the contradictor has been unable to articulate tenable arguments in favour of inclusion. However, it would be remiss of the contradictor not to put each individual's submissions before the Court. For this reason the submissions and reasons in this category (where the contradictor makes no specific submission for inclusion) are summarised in the appendix. In every case in which the contradictor is of the view that there is some material which supports at least a tenable case from inclusion, submissions will be made on behalf of the complainants. [Emphasis in original]

[8]

Category C 25 One of the five members included in this category, Bradley Foot, should have been in category B as his Proof was received on 25 June 2008. For that reason he should be included as a participant in the settlement. 26 Both Mr Franklin and Aristocrat submitted that all members in category C had sworn statutory declarations to the effect that the Proof had been sent prior to the deadline although it was received either after the deadline or not at all. That does not, however, appear to be the case in respect of the statement of reasons submitted by Tuan Nguyen. Although Mr Nguyen provided a statutory declaration, it does not refer to the reasons for his Proof being submitted after the deadline but only to his belief that Aristocrat's conduct had caused him loss. The statement of reasons submitted by Mr Nguyen is contained in a letter dated 24 July 2008 in which he states that he had misplaced the form but had completed it and sent it on 23 June 2008, apparently by ordinary post, and thought it would arrive on time. There is no evidence that Mr Nguyen was advised to provide his reasons in the form of a statutory declaration and therefore, consistent with the approach set out in [20] above I shall disregard this failure to provide a sworn statement. 27 According to the statement of reasons table prepared by Maurice Blackburn and tendered by Mr Franklin as Exhibit 2, the Proofs submitted by Mr Nguyen and Raymond Isbester were received on 1 July 2008. Mr Isbester deposed that the Identification Notice was sent to his previous residential address despite his having requested that mail be sent to a post office box number. The fact that both Proofs were received before the 21 July letter had been sent provides some support for the claims that the Proofs were sent prior to the deadline. In the circumstances both Mr Isbester and Mr Nguyen should be included as participating members. 28 Manjiri Sanjay Sarode deposed that she had sent the relevant documents "prior to June 24th, 2008 by ordinary post". They were not received and she provided replacement documents that were received on 7 August 2008. The statement is short on detail but, assuming it to be a correct statement, there is little more that could be said. If documents sent prior to 24 June just did not arrive it is not surprising that Mrs Sarode was unaware of this until it was brought to her attention by the 21 July letter. In those circumstances her uncontradicted sworn statement should be accepted and Mrs Sarode should be included as a participating member. 29 The final member in category C is Anita Joy Harvey. Ms Harvey provided a statutory declaration sworn on 8 August 2008. She deposed that she had responded to the Identification Notice "on or about May 2008". She added: The documentation was accompanied by a notation stating that I was unsure of the date of purchase and subsequent sale of my Aristocrat shares but I had sold them at a loss. At the time of postage I also emailed Maurice Blackburn requesting information from them but did not receive a response. Upon receiving the most recent Notice to Group Members I telephoned Maurice Blackburn and was told no correspondence had been received by them from me. 30 Aspects of this statement invite some scepticism. The Identification Notice was sent to Ms Harvey (an Other Group Member) on 27 May 2008. If, as she deposed, she had responded "on or about May 2008", she must have acted very promptly. It is surprising that, when asked to give reasons for the delay she did not refer to her prompt response. She said she also emailed Maurice Blackburn requesting information but was subsequently told that "no correspondence" from her had been received. In the circumstances one might have expected her to provide a copy of the email she had sent or at least explain why no copy was available. Ultimately, there are gaps in Ms Harvey's statement of reasons that reflect on its credibility. I do consider that she should be included as a participating member.

[10]

Subcategory D(2) 33 The second subcategory comprises those who "submitted sworn evidence that they were away or overseas during the Identification Period, but without any supporting documentary evidence". Mr Franklin submitted that the sworn evidence of persons in this subcategory "might be sufficient to persuade the court" to include them as participating members. Three members in this subcategory were recommended for inclusion by Mr Franklin and those recommendations were accepted by Aristocrat. In those three cases there was, in fact, some corroborative evidence either because the statutory declaration was sworn by a third person in a position to know of the member's movements or, in one case, because a customs declaration, a detailed itinerary and copies of the relevant pages from the passport were submitted. 34 I have formed the view that two members of subcategory D(2) who were not accepted by Aristocrat should nevertheless be included. In response to the request for a statement of reasons Rodney Hugh Powell stated in a letter dated July 25, 2008, "I did not receive the original correspondence till after the date it was due as I was travelling". In a statutory declaration made on 5 August 2008 he said he could not say why he did not receive the documentation in time but commented that it was not uncommon for mail to be "inconsistently delivered. We often get mail not addressed to us, as does our neighbour. We also get some mail with a redirected note on it because it has been delivered to the wrong place." Mr Powell's Proof was received on 1 July 2008 which is not long after the due date and gives some credence to his explanation. He should be included as a participating member. 35 In a statutory declaration sworn on 6 August 2008 Rick Streiner deposed that he was in the United States from 30 May until 19 June 2008. He stated that he did not clear his mailbox until after the closing date. Mr Streiner's Proof was received on 7 August 2008 - presumably it was sent with his statutory declaration. Initially I was inclined to think that the delay of more than six weeks between 19 June when he returned to Australia and when his Proof was received, suggested unnecessary delay. On re-reading the 21 July letter however I have revised this opinion. A person in Mr Streiner's position might well assume from the Identification Notice that once he had missed the deadline for returning the Proof he had entirely missed the opportunity to participate in the settlement. It states: "only those Group Members who return the Proof by that date [24 June 2008] will be entitled to participate in the settlement". The letter of 21 July suggests, however, that it might not be too late to participate. The letter states that "if you did not submit any proof (or a complete proof) by 24 June 2008 … but you still wish to make a claim in the class action, you are required to provide a statement of reasons why you should be included as a Participating Group Member, with a Proof, and the Court will be asked to make a determination in your case". This would explain the six week delay, and the likelihood of this interpretation is such that Mr Streiner should be included as a participating member. 36 I do not accept that the other eleven members of this subcategory should be included in the settlement. Their statements of reasons are weak on details and do not provide a reasonable explanation for delay without the Court filling in gaps in the statements. In the cases of the following six group members, their statements indicate that, while they may have been away, the matter had not been given sufficient priority among the competing demands of everyday life for the documents to be completed and returned by the deadline: Debbie Montagnino; Realife Pty Ltd as trustee of the E & G MacDougall Super Fund (Gareth and Edith MacDougall); Manjay Investments Pty Ltd (Noel Freeman); Tanya Vernik; Tim Norman; and Patrick Michael Ffrench. While this is entirely understandable, it is not a sufficient reason for departing from the deadline imposed by the Court and communicated to the group member in self-evidently formal and important documents, being the Identification Notice and the 21 July letter. I note that Mr Ffrench's initial explanation dated 1 August 2008 was as explained above. Maurice Blackburn also received a sworn statement dated 11 August 2008 from Mr Ffrench in which he stated "I have been away and didn't receive your letter until 7.08.08". Maurice Blackburn also received a letter from WHK Howarth, a member of Howarth International, concerning (among others) Mr Ffrench's shareholding. The letter did not add anything of substance to the reasons submitted by Mr Ffrench. It is not easy to understand exactly what explanation Mr Ffrench is proffering, which supports my conclusion that there are simply not sufficient details to find in his favour. 37 The other five members in this subcategory, the Bright Group (Murat Aji), Anthony Burns, Peter Stanley Whetton, Continental Petroleum Resources Pty Ltd (John Tassell) and James Francis Irving, deposed to being away from home at the relevant time but provided insufficient details about the dates they were absent for their explanations to be accepted as satisfactory.

[12]

39 Although I am prepared to overlook the absence of a statutory declaration (for reasons given at [20] above) in respect of the other two members of this subcategory, in the absence of specific details or supporting documentation, I cannot accept their statements of reasons as providing a satisfactory explanation of their failure to meet the deadline and reject their application to be included as participating members. The two members are AR Franks and Tey Bian. In addition to these members, Maurice Blackburn received a Proof from Peter Dunn on 22 July 2008 in an envelope which was postmarked 16 July 2008. Mr Dunn's statement of reasons was received by facsimile on 15 August 2008. He states, I live in Hong Kong and travel around the region frequently. I received the letter dated 29 July, only yesterday! Given that I was a shareholder of Aristocrat during the relevant time period I would like to be included as a Participating Group Member. 40 I assume the reference to a letter dated 29 July was intended to refer to Maurice Blackburn's 21 July letter. In my view, this explanation, which I am prepared to accept as a true statement, does not provide sufficient detail to justify waiving the deadline for Mr Dunn. 41 The fifth member of this subcategory, Jane Margaret Reed, stated that she was travelling overseas from 8 May to 30 July 2008 and did not receive the Identification Notice or the 21 July letter until she returned. Her Proof and statement of reasons were received on 8 August 2008. Accepting her statement as true, she should be included as a participating member. 42 Geoffrey Stewart was originally included in category H on the basis that he had not provided a Proof. This categorisation was revised, however, because although he did not submit the formal Proof he did submit relevant buy and sell details. His explanation for delay was that he was overseas between 11 May 2008 and 29 June 2008, and although he did not submit a statutory declaration (despite being advised to do so), he provided copies of itineraries confirming this account. His inclusion is conceded by Aristocrat, and I will order that he be included.

[15]

Subcategory E(2) 45 This subcategory includes those who have also submitted sworn evidence that they did not receive the Identification Notice by 24 June but have not provided any supporting documentary or independent evidence in support of this claim. In his oral submissions, Mr S G Finch SC, who appeared for Aristocrat, made the following submission: We say that your Honour should be inclined to accept the facts deposed to in the statutory declarations subject, of course, to any inherent improbability or defect or contradiction that your Honour can observe but we have to concede that in all except one case there has been no cross-examination of these people and we also have to observe, and this cross-fertilises with my second point, that the mere fact that there is no supporting documentation is not necessarily fatal to their claim because after all they're not lawyers. They were simply told put on a statutory declaration and in many cases they did so and they're not aware of the techniques of persuading your Honour to a certain view rather than to another view and the nature of evidence itself. … although one can observe the lack of documentation as an interesting and relevant factor we don't suggest it's fatal but the strength we do say of any explanation can be vitiated by the lack of expected documentation where there's no reason given for why it's not there … 46 Mr Finch's comments are particularly pertinent in relation to 23 of the 26 members in this subcategory. These 23 members have submitted sworn statements that they did not receive the Identification Notice. Their statements have not been contradicted and contain no inherent improbability, defect, inconsistency or contradiction. Moreover, given that the statements are to the effect that they did not receive the Identification Notice, it is difficult to imagine what documentation in support of that statement might be expected. I have therefore concluded that these 23 members should be included as participating members. 47 Of the remaining three members in this subcategory, only one should be rejected. In a statutory declaration made on 4 August 2008 Christopher Harley (on behalf of Moontrax Pty Ltd) gave reasons why his Proof had not been received by the deadline. Annexed to the second affidavit of Mr Varghese, however, is an opting out notice dated 24 November 2006, completed by Mr Harley on behalf of Moontrax. Mr Harley's application clearly must be rejected. 48 The other two members, Jonathan David Ind and My Chau Huynh, have submitted statutory declarations deposing to their late receipt of the Identification Notice as explanation for their respective Proofs not being received by Maurice Blackburn by the deadline. The principle applied above at [43] also applies here and these applications should be accepted.

[18]

Subcategory F(2) 52 This subcategory comprises members who have submitted sworn evidence that they were incapacitated as a result of illness or unavoidable commitments during the relevant period. They have not submitted any supporting documentary or independent evidence. There are four members in this subcategory, Betty May Gallen, Tracey Mayoh, Maureen Bell and Pamela Anne Gehrig. 53 Even accepting the truth of the reasons they have given I do not accept as a satisfactory explanations the statements of Ms Gallen or Ms Mayoh. Ms Mayoh said that her father had been suffering from "heart failure" and that she had been busy taking him to and from hospital and appointments. She said that this left her no time to follow up on personal business. Mrs Gallen deposed that she and her husband were both ill with the flu and were bedridden for 7-8 days. She added that she thought the date for the return of the form was the end of the month. In fact her Proof was received on 1 July 2008. Both explanations are short on detail, and I am unable to assess the extent to which the events described intruded into the period during which the Proofs should have been returned. Given that there was approximately one month in which the Proofs could have been returned I do not accept these statements as providing adequate reasons. 54 Similarly, I do not accept the statement made by Ms Bell. Her reasons related to the demands of her work, mail being misplaced by a family member and some family setbacks, including caring part-time for an elder brother. Accepting this as a true statement I do not regard it as a sufficient reason for waiving the deadline imposed by the Court. 55 Ms Gehrig submitted a statutory declaration stating that she needed to travel to Sydney in relation to the diagnosis of a serious and life-threatening medical condition of which there is a significant family history. She claims to have been distracted by worry about her medical situation, and I accept that an unexpected event such as this is an adequate explanation for her Proof not having been received until 7 July 2008.

[22]

Subcategory G(1) 61 The first member in subcategory G(1), Sidney Penketh, submitted a statutory declaration stating that his paperwork regarding proof of claims was left in the Cook Islands on the basis of his understanding that "it was a case of if you do not wish to opt out - do nothing". His Proof, along with the statutory declaration, was received on 27 July 2008. I am not satisfied that Mr Penketh's sworn statement sufficiently explains why he waited until after the 21 July letter to send in his Proof, which had of course been requested in May. His inclusion is disputed by Aristocrat, and I agree with this position. 62 The second claimant whom Mr Franklin recommended for inclusion is the Monetary Authority of Singapore, whose explanation, provided in the form of a sworn statement and supporting documentation, he summarised in the following way: The effect of this claimant's account, your Honour, is that the Monetary Authority of Singapore left to an agent, APSSF Management, to proceed with the relevant lodgement and on 24 June - that is the date - so the Monetary Authority of Singapore were clearly aware of the significance of the date. MAS wrote to its agent, APSAM, to confirm that it had submitted the proof and a day later, on 25 June, APSAM replied that it had not done so and that is apparently contrary to the instructions and perhaps in breach of their agreement with their principal. Then, your Honour, MAS immediately contacted Maurice Blackburn. 63 I agree, however, with Mr Finch's submission that the reason for the lateness is mere inadvertence or delay, regardless of whether it was on the part of the Monetary Authority of Singapore or their agent. As Mr Finch submitted, it may be that the Monetary Authority of Singapore has a claim against its agent (an issue on which I express no opinion) but, in accordance with the principles outlined above at [21], I am not satisfied that they have provided a sufficient explanation to justify their inclusion. 64 Mr Franklinalso recommended that Nathan Abrahams be included. Mr Abrahams claimed in an unsworn statement to have moved from Melbourne to Adelaide for work reasons and to have left his financial records, including share trading records, in storage in Melbourne. He claims that on receiving the Identification Notice from Maurice Blackburn, he travelled to Melbourne twice, the second attempt being in June, to find the relevant documents, and had been unable to submit his Proof earlier due to "work and family commitments, and the travel arrangements required to enable a physical search of share trading records". No supporting documentation was provided, however applying the principles set out above at [20] I accept Mr Abrahams' explanation, which was received on 1 July 2008, as a statement of truth. There is some force in Mr Finch's submission that his explanation amounts to a confession of mere inadvertence or delay. On balance, I am prepared to accept that one week's delay is understandable in circumstances where the relevant documents were located in another State. I will order that Mr Abrahams be included as a participating member. 65 The final member whom Mr Franklin recommended for inclusion is Robert Keith Macquarie Forster. Mr Forster's explanation, given in a sworn statement, was that he was preoccupied with his daughter's wedding on 24 May 2008 and visiting family members, and did not open the "Aristocrat document" until after the 24 June deadline had expired. As with the claimants discussed above at [36], in my view Mr Forster's statement indicates that the matter had not been given sufficient priority among the competing demands of everyday life. This is not a sufficient reason for failing to comply with the deadline.

[23]

Subcategory G(2) 66 Some members in this subcategory were advised by Maurice Blackburn, following the provision of an unsworn statement, to provide a statutory declaration but did not do so. Their explanations are not supported by any independent evidence and are short on details. This is the case with the statements of reasons submitted by Peter Townsend Superannuation Fund (Peter Townsend) and Peter Townsend Investments Pty Ltd (Peter Townsend). Consistent with the principle outlined at [20] above, I do not accept that they have provided a sufficient explanation of their failure to meet the deadline imposed by the Court and will not order that they be included as participating members. This is also the case in respect of John Harris and Samuel Kavourakis, whose Proofs were received on 1 July 2008. Maurice Blackburn received a letter dated 4 August 2008 from Andrew Lawler of WHK Howarth, a member of Howarth International, written on behalf of Mr Harris and Mr Kavourakis (also Mr Ffrench - see [36] above) which merely stated that "late lodgement occurred because of difficulty in locating the original cost details". 67 Some members, namely Subodh Purohit, Alfonso Fanelli and Frances Maree Rand simply did not provide any explanation for the delay. For this reason, they should also be excluded. 68 A number of members claimed that they did not understand the significance of submitting the Proofs, made incorrect assumptions about participating in the group or the settlement, or did not understand the Identification Notice, and for those reasons did not respond to it. The members are Rodney Roy Wise, Barry and Claudette Kelly, Ricardo Zamora, Freda Moore, Chris Tan, Beryl Donna Sturesteps (Spod Nominees Pty Ltd) and Darren Curley. As I explained above at [18], it is reasonable to expect the members who did not understand the communications from Maurice Blackburn to have recognised, nonetheless, that they were of some importance, and to have sought help in understanding their position. I therefore do not accept this lack of understanding as a sufficient reason for not enforcing the deadline imposed by the Court. The statement of reasons submitted by T Williams (Fred's Estate Pty Ltd), which was sent to this Court and received on 7 August 2008, also falls into this subcategory and is similarly not included. 69 Some members explained, in either sworn or unsworn statements, that they missed the deadline due to other commitments (for example work, moving house, home renovations etc), because they temporarily misplaced the relevant documents or generally had trouble locating the relevant documents. Those members are Leticia Rankine, Rossana Wilcox, John McPherson, Amal Industries Superfund (Frederik Henrik Wegenaar), Daniel Chan, Daniel Munk, Zia-Ud Din, Ann Nhu Nguyen, Ann Nhu Nguyen and Viet Thang Phung, Vawdrey Super Fund (Malcolm Robert Vawdrey), Munk Nominees Pty Limited Superannuation Fund (Daniel Munk), Allan Kwok (Winan Investments Pty Ltd), Ruel Lagazo, Gary John Stevenson, Ryan Donnelly, Sonja Heron and Barry Allen. Consistent with the approach to the claimants referred to at [36] above, in the absence of further detail or independent support, these reasons amount to no more than a statement about the competing demands of everyday life. As I have previously indicated, this is an understandable but insufficient reason for failing to comply with the deadline and these members should not be included. 70 There are two members of this subcategory whose explanations for delay warrant some additional mention. The first, William Robins Redpath (Redpath Auto Super Fund), provided a statutory declaration stating that, following receipt of the Identification Notice, he did not understand what was required of him and so sent the letter to his stockbroker. Having had no reply, he assumed his stockbroker had dealt with the matter and only later discovered (although he did not specify a date) that his stockbroker had not attended to it. Because the deadline had by that time passed, he stated that he filed the Identification Notice until he received the second letter from Maurice Blackburn. His Proof and statutory declaration were received on 8 August 2008. This explanation is reminiscent both of the explanation from the Monetary Authority of Singapore (see [62] - failure of an agent to act, along with an incorrect assumption on the part of the member that the agent had acted) and that of Mr Streiner (see [35] - assumption that, having missed the deadline stated in the Identification Notice, the opportunity to participate in the settlement was no longer available). Although, as discussed at [35] above, this is a reasonable assumption that would explain Mr Redpath's delay after he learnt of his stockbroker's failure to act, I do not accept as reasonable his assumption that his stockbroker had taken care of the matter in the absence of any confirmation or follow-up call. Whilst his explanation is plausible, it is not in my view sufficient to justify his late entry into the group participating in the settlement. 71 The second member warranting some further attention is Brett Neville Casben on behalf of WA Casben Investments Pty Ltd. Mr Casben had filed a statutory declaration explaining his delay and attended the hearing on 14 August 2008 at which he was cross-examined on his statement. He testified at the hearing that, following receipt of the Identification Notice, he had contacted his accountants to ascertain whether there were any share trading records for the relevant period. His accountants informed him that any such documents were in storage and there was a charge of $300 for retrieving them. Mr Casben decided not to proceed until he received the 21 July letter, following which he himself searched a storage area the company had previously used and located the relevant documents. He then made further enquiries of his sharebrokers and finally submitted the information to Maurice Blackburn, which was received on 7 August 2008. Mr Casben was disarmingly honest in admitting that his failure to search the storage area earlier resulted from "a lack of commitment on my part". In circumstances where Mr Casben made a conscious choice not to participate in the process, albeit one which he later revised, I am not satisfied that he should be included as a participant.

[29]

Schedule 1 Persons not excluded Abignano, Biagio Abrahams, Nathan Archibald, Debra Arnold, Jenny Lyn Austin, Sharon Au-Yong, Edward Batt, Stephen Charles BB Nominees Pty Ltd Bhat, Prabhakar and Geetha Biviano, Christopher James Blow, Alan Bollam, Christopher Lindsay Bozat, Murat Brislan Nominees Pty Ltd Brooker, Jeffrey Burne, Selene and Hugh Carloff, Robert James Carmichael, Bryan Russell and Brenda Jane Cashman, Alan - Nimote Staff Super Account Cashman, Heather Jean Chan, Rodney Chander, Linda CM Donohoo Pty Ltd (Pension Fund Account) Coolahan, Michael W Cooney, Catherine Mary Davis, Anne Dibry Pty Ltd Super Fund Dickinson, Irena Donohoo, Clive McCarthy Doonan, Jeffrey and Cherrie Eftekhar, Ahmad Reza Fleet, Frank Foot, Bradley Gehrig, Pamela Anne Gounder, Renunka Sashi Graham, BH - Michael Graham A/C Hankins, Robert Hardy, Wayne Gregory Harley, Craig Joseph Holden, Robert and Murray Harden as trustees for the Waipapa Trust Honeycombe, John Huynh, My Chau Ind, Jonathan David Insured Investments Pty Ltd (John Michael Rose) Isbester, Raymond JA Timbs Superannuation Fund Kayalicos, Stan and Helen Kneeshaw, Robert Kriste Nominees Pty Ltd Lam, Chi Ming Lee, TA Leong, Ah Lake Limawan, Darsino Lo, Tsum Li Martin, Christopher Ralph and Pauline Anne Martin, David Ruddel Massey, Steven May, Geoffrey Brendan and Anne Helen McCall, Julie Gay Melbourne Institute of Finance & Management Murray, Kathleen Neeson, BK and VS Nguyen, Tuan Nolan, Gary O'Brien, Peter Parcell Nominees Pty Ltd Pearce, Gregory and Leticia Penny, Gay Pham, Jenny Ha Pham, Van Vay Phievel Pty Ltd (Bettman Super Fund A/C) Port Bell Pty Ltd Positano, Antonio Powell, Rodney Hugh Procona Pty Ltd - Procona Superannuation Fund Pywell, Colin Quin, Daniel R & R Sheet Metal Pty Ltd Rahman, SM Jabaidur Raymond Sakoua (Sakoua Super Fund) Reed, Jane Margaret Richards, Griffith Rollason, Jeff Rosser, Darrel William Rudd, Howard William Sarode, Manjiri Sanjay Schroeter, Wolfgang Sharp, Philip Percival Francis Simpson, Paul Solomon, Alan Soong, Selina Stewart, Geoffrey Stocks, Greg Streiner, Rick Sturge, John Luton Tan, Ling Teh, Khee Yong Tickner, Simon Townsend, Debra and Leigh Turner, James Walsh, Timothy Paul Walter, Christopher John Wan & Co Pty Ltd Wang, Hong WaveJoy Pty Ltd (Anthony Wright) Wembley Holdings White, Julienne Elinor Winrous Pty Ltd Yu, Yang Yuen, Suzette (Sunajoy Pty Ltd) Zivkov, Mark

Dorajay Pty Ltd v Aristocrat Leisure Limited

At a glance

Court

Decision date

Before

Source

Judgment (30 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (1)

Cited By (4)