BROMWICH J:
1 These are my reasons for acceding to an amended interlocutory application by each applicant in each of these two class action proceedings brought against two Korean car makers, and their Australian corporate entities, and for making orders to that effect on 15 September 2023, and for the decision reached on the contested question of costs. The respondents in each proceeding may be collectively referred to by their product brand names, Hyundai and Kia. The two proceedings in this Court will be referred to as Edwards v Hyundai, being proceeding NSD 464 of 2023, and Sims v Kia, being proceeding NSD 466 of 2023; and being also referred to collectively as the FCA proceedings.
2 Each application seeks an order that the proceeding in this Court be transferred to the Supreme Court of Victoria (SCV), pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (the Act), where there are already substantially similar proceedings that were filed in that Court by way of long form writs (Victorian proceedings) not very long before the FCA proceedings were commenced. The two Victorian proceedings will be referred to as Johnson v Hyundai, being proceeding S ECI 2022 05424 and Moroney v Kia, being proceeding S ECI 2023 00959. The transfer was consented to by the respondents in each proceeding in this Court. The only dispute was as to costs. The applicants contended that there should be no order as to costs, effectively making costs a matter for the judge in the SCV, Nichols J, already dealing with the Victorian proceedings. The respondents sought their costs of this application and of these proceedings.
3 Despite the agreement to the transfer on the part of the respondents in each FCA proceeding, I was still required to be satisfied that the transfer was in the interests of justice. For the following reasons, I was so satisfied. I was also satisfied that the applicants should be ordered to pay costs as sought by the respondents in each case, for the reasons I give below.
4 The affidavit filed by a solicitor for the applicants in both proceedings, Mr Charles Bannister, outlined the factual history of this and the Victorian proceedings. That uncontested evidence, which I accepted, may be summarised as follows, omitting procedural and funding details:
(a) Late on 22 December 2022, the initiating process for Johnson v Hyundai was filed in the SCV;
(b) late on 10 March 2023, the initiating process for Moroney v Kia was filed in the SCV;
(c) both proceedings in this Court were commenced on 26 May 2023;
(d) the solicitor in Johnson v Hyundai, Mr Charles Bannister, summarises the nature of that proceeding by reference to the writ in an affidavit in a manner that is sufficient for this purpose as follows:
(a) Ms Johnston claimed she suffered loss and damage because the ABS Module in her motor vehicle suffered from a defect (the Defect) (pars. 19, 20-21, Writ);
(b) by reason of the Defect, and representations made in sales and marketing material (s 22, Writ), Ms Johnston alleged that Hyundai engaged in misleading and deceptive conduct in contravention of ss. 18, 29 and 33 of the Australian Consumer Law (see, pars. 52-55; 56-57 and 58, Writ);
(c) by reason of the Defect, it was alleged that Ms Johnston's vehicle did not comply with the statutory guarantee contained in section 54 of the ACL (pars. 49-50, Writ);
(d) Ms Johnston made her claim to vindicate her own interests and in a representative capacity for group members that had suffered losses because of the Defect;
(e) the group members were, to a substantial extent, defined by reference to five recall notices caused to be issued by Hyundai Australia with regard to specific affected vehicles (par. 12 (b), Writ); but
(f) did not identify any claim for loss and damage arising from 'distress and disappointment'.
(e) in relation to Moroney v Kia, Mr Bannister deposes to Ms Moroney making "substantially similar claims and similar allegations" as those made by Ms Johnston against Hyundai, but including a "distress and disappointment" claim for damages, and additionally making her claim to vindicate her own interests and in a representative capacity for group members substantially defined by reference to two recall notices.
5 Mr Bannister also deposes:
(a) by way of information and belief, to a substantial number of the persons who registered interest in Edwards v Hyundai residing in New South Wales; he identifies numerous bases for that assertion which do not need to be detailed as the conclusion reached is not challenged, and so may be generally accepted for present purposes;
(b) to this Court being able to hear and decide disputes relating to the Australian Consumer Law (ACL) and, in particular to this Court having specialist expertise in respect of representative proceedings as provided for in part IVA of the Federal Court of Australia Act 1976 (Cth) and Div 9.3 of the Federal Court Rules 2011 (Cth);
(c) to his firm being located in Sydney and the Australian arm of Hyundai, the first respondent, having its registered office in Sydney;
(d) to the fact what while there are some differences between the FCA proceedings and the Victorian proceedings, in particular in terms of group numbers, model types, the recall notices, the inclusion of Korean based parent companies as second respondents in the FCA proceedings, and a claim for a breach of express warranties under s 59 of the Australian Consumer Law in the FCA proceedings, there is a substantial overlap as to the centrality of the identified defect to the ABS Modules fitted to the affected vehicles in each proceeding, common allegations or misleading or deceptive conduct, non-compliance with statutory guarantees, some of the common questions posed and the nature of the relief sought;
(e) to having caused an email to be sent to this Court and the SCV giving notice of the issue of multiplicity of issues, after considering the foregoing and the matters set out in the "Protocol for communication and cooperation between Supreme Court of Victoria and Federal Court of Australia in class action proceedings" dated June 2019;
(f) to orders having been made on 29 June 2023 by both this Court and the SCV in preparation for a selection hearing, including making provision for the exchange of statements of position by the moving parties and the filing and service of summonses (SCV) and interlocutory applications (FCA);
(g) to expecting or assuming that the selection hearing would be conducted as a joint hearing of both the VSC and FCA proceedings, with both judges sitting, and depending on the outcome of that hearing, the two Courts could make the orders proposed by the successful party, along with any further orders required, such as for stay, transfer or consolidation;
(h) consequentially, to the FCA applicants filing summonses with the SCV seeking the transfer of the SCV Proceedings to the FCA because it would provide the facility for those proceedings to be transferred to this Court in the event the FCA applicants succeeded at the selection hearing in seeking a consolidation of the matters (as an alternative to a stay);
(i) to not expecting that the FCA applicants' applications to transfer the SCV Proceedings to the FCA would be heard first and determined before all other applications including in relation to carriage;
(j) to a joint case management hearing having been held on 10 August 2023, during which both Nichols J and I indicated a disinclination to conduct a joint selection hearing and preferred a simpler process in which one judge would hear and determine the carriage issue;
(k) to seeking further instructions from the FCA applicants, and the funder of the FCA proceedings (LLS Australia Funding Pty Ltd (ABN 12 645 168)) to amend the interlocutory applications filed in this Court, including to instead seek orders for the FCA proceedings to be transferred to the SCV with a view to the carriage dispute being heard and determined by that Court, on the basis that the Victorian Proceedings were filed first in time, and based upon his understanding of the preferred approach of the two judges, noting that the SCV has comparable jurisdiction to this Court;
(l) to the defendants in the SCV proceedings being the same as the first respondents in the FCA proceedings;
(m) to providing an undertaking, if the transfer orders sought are made, to file amended summonses seeking, inter alia, the stay of the SCV proceedings or alternatively consolidation of the two sets of proceedings;
(n) to being informed that defences have been filed in the SCV proceedings, but not further significant case management steps having occurred.
6 Some additional factual observations need to be made before turning to the submissions in support of transfer to the SCV made by the FCA applicants. The Protocol referred to by Mr Bannister in his affidavit provides that this Court and the SCV, in applying it, should aim to promote:
… the efficient and timely coordination and administration of competing class action proceedings in the most convenient and appropriate jurisdiction having regard to: the issues raised in the respective proceedings; the interests of the parties and group members in the respective proceedings; the minimisation of costs and inconvenience to the parties associated with the existence of competing class action proceedings; the management of the competing class action proceedings in ways that are proportionate to the size and nature of the respective classes, the complexity of the issues, the nature of the proceedings, and the number of jurisdictions involved. At all times, the interests of justice are paramount.
7 Halley J in Jowene Pty Limited atf Biro Citer Souvenirs Pty Limited Pension Fund v Downer EDI Limited [2023] FCA 924 at [6] aptly characterised the Protocol as having an overarching objective of facilitating the efficiency and effectiveness of class action proceedings where multiple proceedings are brought in different Courts in more than one jurisdiction.
8 The Protocol also makes provision for:
(a) the convening of a joint case management hearing, and that this may entail ascertaining the:
… suitability of the matters for joint or concurrent hearing of a selection hearing and procedure for the approval of fee and cost proposals from lawyers/litigation funders; the parties' submissions as to appropriate jurisdiction; and any other matters relevant to the setting of a timetable for the efficient conduct of the competing proceedings (including whether any security for costs will be sought and if so the amount, manner and timing of the provision of such security; and any Protocol for communication with unrepresented group members).
and
(b) after hearing from the parties, for the two judges to confer and after taking into account the submissions of the parties, determine the appropriate management of the competing class actions, listing a number of considerations.
9 This is precisely what took place. Nichols J and I jointly heard submissions at the joint case management hearing, including in relation to the alternative options of having a joint hearing of the carriage dispute first, or first the hearing of the then extant transfer application brought by the FCA applicants in the SCV to transfer the SCV proceedings to this Court. After the envisaged consultation, the parties were advised of the joint preference for the latter upon the grounds of efficiency and practicality. That was always a reasonably possible outcome. The outcome of that extant transfer application could always have gone either way. The FCA applicants decided instead to abandon that application and instead bring the present application.
10 The following analysis is drawn from written submissions by the FCA applicants in support of the transfer application, and the authority cited. I also rely upon my quotes from, and consideration of, the key authorities on the interests of justice in relation to cross-vesting applications in Gleeson v Bank of Queensland [2017] FCA 1302 at [15]-[21].
11 The main question to be determined on a transfer application under s 5(4) of the Act is where the balance lies in properly serving the interests of justice, and with there being no presumption favouring any party of no onus to be discharged: Amalia Investments Ltd v Virgtel Global Networks NV (No 2) [2011] FCA 1270; 198 FCR 248 at [34] and [40] and Civil & Civic Corporation Pty Ltd v Nova Builders Pty Ltd [2022] FCA 1515 at [12]. It is therefore sufficient that it be demonstrated that the SCV be the more appropriate or natural forum in all the circumstances: BHP Billiton Ltd v Schultz [2004] HCA 61; 221 CLR 400 at [14] (reproduced in Gleeson at [15]); Valceski v Valceski [2007] NSWSC 440; 70 NSWLR 36 at [69] (reproduced in Gleeson at [20]).
12 A threshold issue in s 5(4)(b)(i) of the Act is whether there is some causal element, such as commonality of facts or parties, so as to render the proceedings in the different courts able to be characterised as associated, connected or related. That may or may not be sufficient: Commissioner of Taxation v Residence Riverside Proprietary Limited as Trustee for the D&J Discretionary Trust and as Trustee for the D&J Investment Trust [2013] FCA 720 at [13]-[14]. In Residence Riverside at [17], it was observed that it will be generally relevant to the question of the interests of justice to consider such things as the stage of the proceedings in each court, the nature of the proceedings, any commonality or diversity of parties, the risk of conflicting outcomes if the transfer does not take place, any available cost-benefit analysis, the potential risk of an unnecessary drain on public resources (including judicial) and whether either court has any advantage in terms of expertise.
13 The power of transfer must be exercised whenever it appears that it is in the interests of justice that it be exercised, and it is not necessary that the existing court be clearly inappropriate: Schultz at [10]. If one court is shown to be more appropriate than the other, however so slightly, transfer to the more appropriate court is mandatory: Valceski at [70]. The court which was the initial choice does not need to justify not exercising jurisdiction: Schultz at [25].
14 This Court is also bound to observe the mandate in s 37M of the Federal Court of Australia Act 1976 (Cth) that the just resolution of disputes should be facilitated as quickly, inexpensively and efficiently as possible: Civil & Civic at [20]. Where the transfer will reduce the costs of litigation, this may be a significant factor in favour of a transfer to a State court, as noted by a number of judges in this Court: see Diakovasili v The Order of AHEPA NSW Incorporated [2022] FCA 1465 at [3] and [10]; Shields v Williams [2019] FCA 413 at [6]-[8]; Prasad v Google LLC [2020] FCA 67 at [30]. The other side's consent to the proposed transfer is a significant consideration: Shields v Williams at [6].
15 The FCA applicants submit that even though this Court remains an appropriate forum, it is in the interests of justice for the FCA Proceedings to be transferred to the SCV because:
(a) there is some commonality of parties in the matters as the first respondents in the FCA proceedings are the defendants in the SCV proceedings;
(b) the FCA proceedings and the SCV proceedings all plead a defect in the electronic control unit or module which manages the functioning of the affected vehicles' Anti-lock Braking System;
(c) the defect and the defect consequences pleaded in each of the proceedings are substantially the same and are common to all of the affected vehicles as pleaded, in each case;
(d) there is an essential commonality of legal issues as the causes of action that are pleaded in the FCA proceedings and the SCV proceedings (relevantly, contraventions of ss 18, 29 and 33 of the ACL and non-compliance with the statutory guarantee in s 54 of the ACL) substantially overlap as do the forms of relief sought;
(e) there is substantial overlap between the Hyundai and Kia models owned by group members and were the subject of the relevant recall notices, although in each case the FCA proceedings plead additional recall notices to the SCV proceedings;
(f) the SCV has jurisdiction to hear representative proceedings similar to this Court (Pt 4A of the Supreme Court Act 1986 (Vic));
(g) all of the proceedings are at a relatively early stage;
(h) there is a carriage dispute and this Court and the SCV have expressed a preference for hearing and resolving that dispute in as simple and efficient a way as possible without conducting a joint selection hearing; and
(i) the transfer of the FCA proceedings to the SCV would facilitate resolution of the carriage dispute in that way.
16 I accept those submissions. Although there is not much difference between the two forums, in this case the pre-existing SCV proceedings, coupled with the uncontested application and the inherent undesirability of there being two proceedings on substantially the same subject matter in two different superior courts, and the savings in costs in all the proceedings being in one court is a sufficient basis to conclude that acceding to each application is demonstrably in the interests of justice. I am therefore satisfied that the transfer orders sought should be made.
17 The applicants in each proceeding in this Court advance the following reasons for no order as to costs being made:
(a) they were entitled to commence these proceedings, and there is no basis to suggest that doing so was unreasonable or could otherwise justify an adverse costs order;
(b) they have conducted these proceedings reasonably and expeditiously, including in relation to multiplicity and transfer issues, noting that soon after the joint case management hearing on 10 August 2023, when it became apparent that the Courts were not inclined to hear the carriage dispute jointly, they promptly sought to transfer these proceedings to the SCV for the purpose of the carriage dispute being resolved in that Court, bringing this transfer application quickly and efficiently;
(c) the bulk of the work completed by the parties to date has been in preparing statements of position (SOP), which have been filed by the FCA applicants and the SCV plaintiffs, with the respondents not filing SOPs, but being required to review the matters raised in whichever Court was seized of the matters;
(d) the case management hearing and the parties' communications with the two Courts have been conducted jointly and the respondents have therefore not incurred any additional costs, such that those costs are neither wasted nor thrown away;
(e) the Court would only depart from the usual position that costs (if ordered) are to be taxed at the conclusion of a trial if a party's conduct was unreasonable, such as the proceedings being incompetent or misconceived, such that they should never have been brought, with there being no suggestion that this is the present situation;
(f) there is no principled reason why costs should be granted to the respondents on the transfer of the proceedings nor is there any reason why the interests of justice would demand dispensation with r 40.13 of the Federal Court Rules 2011 (which ordinarily requires taxation of interlocutory costs to be taxed at the conclusion of the proceeding);
(g) the effect of the costs order proposed by the applicants is that the costs of the proceedings in this Court (being the transferor court) up to the date of transfer will become the costs of the transferred proceedings in the SCV (being the transferee court) upon transfer (and thus those costs will become payable in the same manner as the ultimate costs order in the transferee court).
18 The respondents in each proceeding in this Court advance the following reasons for a costs order in their favour in light of the applicants reversing their stance on transfer, contending that there is no cogent reason for a costs order not to be made in their favour in light of the following:
(a) the applicants commenced their action in the FCA rather than the SCV, even though similar proceedings had already been commenced in the SCV by Ms Johnston (in December 2022) and by Ms Moroney (in March 2022), resulting in overlapping proceedings being brought in different Courts, giving rise to unnecessary complexity and expense, and, having created this situation, now seek to transfer these proceedings to the SCV, submitting in support of their application that it would be in the interests of justice for that to occur;
(b) the transfer application was only made after the SCV had determined to hear the applicants' application to transfer the SCV proceedings to the FCA, and it was only then that the applicants withdrew their application and reversed course, instead applying to transfer these proceedings to the SCV;
(c) most of the factors relied upon by the applicants weighing in favour of the transfer would, or ought to have, been known to them at the time they commenced their proceedings in this Court, including the commonality of parties, the features of the pleadings in each proceeding, the commonality of legal issues, and the overlap between the Hyundai and Kia models owned by group members and the SCV jurisdiction;
(d) the respondents consent to the transfer application to minimise further expense and delay, having had to incur unnecessary and avoidable costs.
19 I am unable to accept the argument advanced by the applicants, some of which are more directed to questions of taxation, or treat costs as some kind of sanction rather than properly characterising them as compensation. However, I am not persuaded that costs should be taxed or otherwise assessed, contrary to r 40.13, before the conclusion of the transferred proceedings.
20 The applicants took a risk in commencing these proceedings in circumstances in which the SCV proceedings on substantially the same dispute had already been commenced. They first elected to seek the transfer of the SCV proceedings to this Court and then elected to abandon that application and instead seek to transfer these proceedings to that Court. It would seem that the original stance was taken upon the assumption that a joint carriage determination would take precedence and the resultant transfer application would be little more than a formality. The orders made by the two Courts leading up the to the 10 August 2023 joint management hearing did not afford any sound basis for that assumption. The interests of justice will always take into account efficiency and cost-effective resolution of disputes. In the particular circumstances of this case, it was always likely to be preferrable for a transfer application being made and heard and determined in one of the two Courts, and, if successful, for the transferee court alone to then determine the carriage dispute. This is not always going to be the case.
21 As noted, costs are compensation, not punishment. There was no sound reason why the respondents should not be compensated for the costs incurred in this Court, noting that the transfer has occurred at a very early stage in each proceeding, and at a point where the respondents' costs should not be extensive.