PERRAM J:
1 This is an application to amend the class definition in a representative proceeding arising out of the destruction of Malaysian Airlines Flight MH17 over the Ukraine on 17 July 2014.
2 The liability of the Respondent to pay compensation in relation to the deaths of passengers on board that flight is regulated by the Convention for the Unification of Certain Rules for International Carriage by Air (Montreal, 28 May 1999) ('Montreal Convention') which by s 9B of the Civil Aviation (Carriers' Liability) Act 1959 (Cth) ('CACLA') has the force of law in Australia. The cause of action for compensation in respect of a deceased passenger arises from Art 17 of the Montreal Convention and, in Australia, may be enforced by the personal representative of that passenger: CACLA s 9D(5). The cause of action is created by Art 17 (via CACLA s 9B in domestic law) and is in substitution for any other liability the carrier may have to the estate of a passenger or a passenger's relatives: CACLA s 9D(2). Correspondingly, any claim under Art 17 is extinguished upon the expiration of two years by Art 35:
'Article 35- Limitation of Actions
1. The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.
2. The method of calculating that period shall be determined by the law of the court seised of the case.'
3 In this case, the carriage in question stopped on 17 July 2014 so that all claims under Art 17 were required to have been brought within two years of that date, that is to say, by the expiration of 18 July 2016.
4 On 1 July 2016, inside that limitation period, the Applicant filed in this Court an originating process and statement of claim. The Applicant is the daughter and legal representative of one of the passengers onboard MH17, Liliane Derden. In her originating application, the Applicant claimed compensation under the Montreal Convention and CACLA. It also made clear that the proceeding was a representative one and said that it was brought 'on behalf of the representatives of the deceased passengers.'
5 Representative proceedings of that kind are regulated by Part IVA of the Federal Court of Australia Act 1976 (Cth) ('FCAA'). Within Part IVA, s 33H requires that the group represented by an applicant 'be described or otherwise identified'. It provides:
'33H Originating process
(1) An application commencing a representative proceeding, or a document filed in support of such an application, must, in addition to any other matters required to be included:
(a) describe or otherwise identify the group members to whom the proceeding relates; and
(b) specify the nature of the claims made on behalf of the group members and the relief claimed; and
(c) specify the questions of law or fact common to the claims of the group members.
(2) In describing or otherwise identifying group members for the purposes of subsection (1), it is not necessary to name, or specify the number of, the group members.'
6 It will be seen from subsection 33H(1) above that the class definition does not need to appear in the originating application itself but may appear instead in a 'document filed in support of such an application'. The reference to a supporting document invokes r 8.05 of the Federal Court Rules 2011 (Cth) ('FCR') which stipulates that an originating application must be accompanied either by a statement of claim (if damages are claimed) or in other cases, by an affidavit.
7 In this case, the Applicant elected to define the class whom she represented in her statement of claim. This she did in paragraph 7 which was originally in these terms:
'7. The group members are:
a) residents of Australia who are the legal representatives of a passenger who was killed on MH17; or
b) not being resident in Australia, who are the legal representatives of a passenger who was killed on MH17 and express the desire to take the benefit of the action (Civil Aviation (Carrier's Liability) Act 1959 (Cth), Section 9D(6)(b)).
(errors in original.)
8 On 9 December 2016, I struck out paragraph 7 of the Applicant's statement of claim: Gibson v Malaysian Airline System Berhad [2016] FCA 1476. The short reason I did so was because jurisdiction under the Montreal Convention is governed by the territorial characteristics of the passengers on the flight in question rather than those of their legal representatives: Montreal Convention Art 33. Paragraph 7 was, therefore, misconceived. Despite striking the paragraph out, I did grant the Applicant a further opportunity to plead her class definition in a way that satisfied the jurisdictional requirements of Art 33.
9 On 13 January 2017, the Applicant took up this grant of leave and applied to amend the class definition in her statement of claim. It will be observed that this application was made outside the two year period prescribed by Art 35 of the Montreal Convention, which had expired on 18 July 2016. The form of amendment proposed on 13 January 2017 was itself defective. When the amendment application was heard on 2 May 2017 this was remedied by the substitution of a new proposed paragraph 7 in these terms:
'7 The group members are personal representatives of passengers:
i. Whose destination on the contract of carriage was Australia;
ii. Whose contract of carriage was made in Australia where the Respondent has a place of business through which the contract was made; or
iii. Where Australia was the passenger's principal and permanent place of residence at the time of the accident and to or from which the Respondent operated services on its own or using another carrier's aircraft by commercial agreement and from which the Respondent conducts its business or carriage of passengers from premises leased or owned by the Respondent (or other carrier).'
10 It was accepted by the Respondent, correctly with respect, that this proposed class definition satisfies the jurisdictional requirements of Art 33. However, the Respondent now submits that leave cannot be granted to amend the class in this way as the two year period provided for in Art 35 has expired with the result that the rights of group members have been extinguished.
11 Specific provision is made in Part IVA of the FCAA for the amendment of a class definition contained in an originating process. Section 33K provides:
'33K Causes of action accruing after commencement of representative proceeding
(1) The Court may at any stage of a representative proceeding, on application made by the representative party, give leave to amend the application commencing the representative proceeding so as to alter the description of the group.
(2) The description of the group may be altered so as to include a person:
(a) whose cause of action accrued after the commencement of the representative proceeding but before such date as the Court fixes when giving leave; and
(b) who would have been included in the group, or, with the consent of the person would have been included in the group, if the cause of action had accrued before the commencement of the proceeding.
(3) The date mentioned in paragraph (2)(a) may be the date on which leave is given or another date before or after that date.
(4) Where the Court gives leave under subsection (1), it may also make any other orders it thinks just, including an order relating to the giving of notice to persons who, as a result of the amendment, will be included in the group and the date before which such persons may opt out of the proceeding.'
12 This provision permits class members to be added even where their claims accrued after the commencement of the proceeding. Section 33K of the FCAA has its origins in the draft bill prepared by the Australian Law Reform Commission in Report No. 46 in 1988 entitled 'Grouped Proceedings in the Federal Court'. The Commission proposed a clause 15 similar to s 33K(2). Its discussion of the matter at p 67 shows that the Commission intended it to apply where a class action concerned a latent injury such as that caused by asbestos where new members might become symptomatic after the commencement of the proceeding. As a matter of procedural law at the time s 33K was introduced, a cause of action arising after the commencement of a proceeding could not be included in that proceeding: see, for example, Baldry v Jackson [1976] 2 NSWLR 415 ('Baldry') at 419. Section 33K(2) was directed to overcoming this difficulty. The difficulty no longer exists: see FCR 8.21(1)(g)(ii).
13 Section 33K(1), on the other hand, is directed to the topic of class amendments more generally. It is silent on whether it permits the addition of class members whose claims are statute barred or if so, from when such an amendment might date. Because, however, the Applicant seeks to amend a class definition contained in a statement of claim rather than an originating application, s 33K(1) is not directly relevant.
14 Despite the absence of any direct reference in it to pleadings, I do not consider that s 33K(1) conceals a negative implication that a class definition contained in a statement of claim or affidavit (as s 33H contemplates) cannot be amended. Such an operation for s 33K(1) would be irrational.
15 Nevertheless, it does mean that the power of amendment in the case of pleadings must be located elsewhere. I do not consider that the amendment of a class definition involves the joinder of a new party. This is because it is well-established that the members of a representative group are not formal parties to the proceeding. That is not to say that they might not, in some circumstances, be making a claim within the meaning of a policy of insurance (cf Morgan, In the matter of Brighton Hall Pty Ltd (in liq) [2013] FCA 970) or be 'plaintiffs' within the meaning of a particular limitation statute (cf Sanda v PTTEP Australasia (Ashmore Cartier) Pty Ltd [2017] FCA 14). But that is not to say that a group member is a party for the purposes of the FCR. Since class amendment does not involve the joinder of a new party, it follows that FCR 9.05, which deals with that particular situation, does not apply to the present application.
16 The relevant power instead is the power to amend pleadings contained in FCR 16.53. It provides:
'16.53 Application for leave to amend
Unless rule 16.51 applies, a party must apply for the leave of the Court to amend a pleading.'
17 The predecessor to FCR 16.53 was the general amendment power contained in the Federal Court Rules 1979 (Cth) (repealed) ('Former Rules') Order 13 Rules 2(3), 2(7) and 3A. In Brisbane Broncos Leagues Club v Alleasing Finance Australia Pty Ltd [2011] FCA 106 ('Brisbane Broncos') Jacobson J proceeded upon the assumption that that general amendment power could be used to amend a class definition in a pleading. His Honour was, with respect, correct so to conclude. It is not necessary to consider whether the power to add group members to a class definition contained in an originating process whose claims accrued after the proceeding was commenced extends to allow FCR 16.53 to be utilised in a similar way with pleadings. It would, however, be surprising if it did not.
18 Neither s 33K of the FCAA nor FCR 16.53 says anything expressly about when an amendment made under them is to take effect. It has long been accepted, however, that the usual position is that an amendment to a pleading or originating process takes effect from the commencement of the proceeding: Baldry at 419. On the other hand, that principle does not apply where the effect of an amendment is to add a party: Street v Luna Park Sydney Pty Ltd [2006] NSWSC 230 at [46]-[47] per Brereton J; Ketteman v Hansel Properties Ltd [1987] AC 189 at 200 per Lord Keith of Kinkel. Indeed, this latter principle is express in FCR 9.05(3) (although it refers to the date of the joinder order rather than the original filing date). Because the amendment of a class definition in a pleading does not involve the joinder of a party, it seems that it would be the former principle which would be applied rather than the latter.
19 If the former principle were applied, so that the amendments took effect from the commencement of the proceeding (here 1 July 2016), this would appear to make relevant the so-called rule in Weldon v Neal (1887) 19 QBD 394. In that case, the plaintiff had sued in slander but after the expiry of the relevant limitation period had sought to amend her claim so as to add other claims including assault. The Court of Appeal held that the appeal should not be permitted. Lord Esher MR said at 395:
'We must act on the settled rule of practice, which is that amendments are not admissible when they prejudice the rights of the opposite party as existing at the date of such amendments. If an amendment were allowed setting up a cause of action, which, if the writ were issued in respect thereof at the date of the amendment, would be barred by the Statute of Limitations, it would be allowing the plaintiff to take advantage of her former writ to defeat the statute and taking away an existing right from the defendant, a proceeding which, as a general rule, would be, in my opinion, improper and unjust. Under very peculiar circumstances the Court might perhaps have power to allow such an amendment, but certainly as a general rule it will not do so.
This case comes within that rule of practice, and there are no peculiar circumstances of any sort to constitute it an exception to such rule. For these reasons I think the order of the Divisional Court was right and should be affirmed.'
(emphasis added)
20 Lindley and Lopes LLJ were of the same opinion.
21 Although the statement of Lord Esher MR in the emphasised section above appears to countenance that leave might on some occasions be granted, the principle appears to have ossified into a rule of inflexible application and is usually referred to as 'the rule in Weldon v Neal'.
22 The application of the rule in Weldon v Neal to the present case would lead to the refusal of the application. However, the rule has been widely ameliorated by statutory and rule changes. Since the commencement of the Law and Justice Legislation Amendment Act 1994 (Cth) ('the Amending Act') on 23 June 1994, the FCAA has contained a s 59(2B) in these terms:
'59 Rules of Court
…
(2B) The Rules of Court may make provision for:
(a) the amendment of a document in a proceeding; or
(b) leave to amend a document in a proceeding;
even if the effect of the amendment would be to allow a person to seek a remedy in respect of a legal or equitable claim that would have been barred because of the expiry of a period of limitation if the remedy had originally been sought at the time of the amendment.
…'
23 The Amending Act was unusually clear as to what the purpose of the new s 59(2B) was. Section 43 of the Amending Act provided:
'43. The object of this Division is to enable Rules of Court to authorise a person to amend a claim by setting up a fresh claim that would have been barred because of the expiry of a period of limitation if the claim had been initiated at the time of the amendment.'
24 A week after s 59(2B) became law, Order 13 Rule 2(3) of the Former Rules was amended so as to read:
'(3) Where an application to the Court for leave to make the amendment mentioned in subrules (4), (5), (6) or paragraph (7)(a) is made after any relevant period of limitation current at the date of commencement of the proceedings has expired, the Court may, nevertheless, grant such leave in the circumstances mentioned in that subrule if it thinks it is just to do so.'
25 At the same time, a new subrule 2(7) was inserted into the Former Rules:
'(7) An amendment may be made even if the effect of the amendment is to add a new claim for relief or foundation in law for a claim for relief (whether by way of substitution for an existing claim for relief or foundation in law or not) if the new claim for relief or foundation in law:
(a) arises out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the party applying for leave to make the amendment; or
(b) subject to subrule (9), arises, in whole or in part, out of facts or matters that have occurred or arisen since the commencement of the proceeding.…'
26 In 2001, Order 13 Rule 3A of the Former Rules was introduced in these terms:
'3A Date when amendment takes effect
(1) Unless the Court otherwise orders, an amendment of a document that is made under rule 2 or 3 takes effect:
(a) If the amendment is made under paragraph 2(7)(b), subrule 2(8) or subrule 3(3) - on the date when the amendment is made; and
(b) In any other case - on the date when the document was first filed.
27 The effect of these rules was to permit an amendment which was statute barred if it arose out of the same or substantially the same facts, to make such an amendment date from the commencement of the proceeding and to confer an unfettered discretion on the Court to choose some other effective date if it thought it expedient so to do.
28 These rules were replaced in 2011, so far as pleadings are concerned, by FCR 16.53. As already noted, that rule does not say anything about expired limitation periods. For the reasons given in Voxson Pty Ltd v Telstra Corporation (No. 7) [2017] FCA 267 at [21] the power to amend a pleading in FCR 16.53 in fact operates in the same way as Order 13 Rules 2(3), 2(7) and 3A of the Former Rules. In short, this is because FCR 16.53 operates in parallel with the amendment power relating to originating applications in FCR 8.21. Relevantly that rule provides:
'8.21 Amendment generally
(1) An applicant may apply to the Court for leave to amend an originating application for any reason, including:
…
(g) to add or substitute a new claim for relief, or a new foundation in law for a claim for relief, that arises:
(i) out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the applicant; or
(ii) in whole or in part, out of facts or matters that have occurred or arisen since the start of the proceeding.
…
(2) An applicant may apply to the Court for leave to amend an originating application in accordance with paragraph (1)(c), (d), (e) or subparagraph (g)(i) even if the application is made after the end of any relevant period of limitation applying at the date the proceeding was started.
…'
(emphasis added)
29 The critical part is FCR 8.21(1)(g)(i). To bring herself within FCR 16.53 the Applicant must therefore establish that her class amendment:
(a) is a 'new claim for relief'; or
(b) 'a new foundation in law for a claim for relief'; and, in either case
(c) that it arises out of the same facts or substantially the same facts as those already pleaded.
30 I am certainly satisfied as to (c). The facts giving rise to the Applicant's initial claim consisted of the fact of the destruction of MH17 with the tragic deaths of all on board. Those same facts ground the proposed amended class. Nothing has changed.
31 I do not think that amending the class definition can be accurately described as a new foundation in law for a claim already pursued. I do accept, however, that it may fairly be described as a new claim for relief. In this case, that is because of the way the balance of the original statement of claim was drawn. Paragraphs 16 and 17 say:
'16. The plaintiff and group members claim the full amount of compensation provided for under articles 17(1) and 21(1) of MC99.
17. In addition, the applicant and group members claim compensation for all losses under Article 21(2) of MC99.'
32 If the amended class is permitted this will result in the claims made in these paragraphs changing so that there will then be new claims for relief within the meaning of FCR 8.21(1)(g). Accordingly, I conclude for the reasons given in Voxson (No.7) that the power in FCR 16.53 is enlivened. That power, however, is discretionary, and, as explained in Voxson (No.7), is accompanied by a power to order that the amendment in question take effect from some day other than that of the filing of the original proceeding.
33 As I have explained above, an amendment which results in the addition of a new party generally takes effect from the date of the amendment. This principle does not directly apply in the current circumstance because no new parties are being added. However, the analogy between the joinder of a new party and the amendment of a class definition may be sufficiently close to suggest that an amended class definition should date from its amendment.
34 This was the approach adopted by Jacobson J in Brisbane Broncos in circumstances indistinguishable from the present save that his Honour was concerned with Order 13 Rule 2 of the Former Rules whereas this case concerns FCR 16.53. However, for the reasons given in Voxson (No.7) there is no material difference between them. With respect, I agree with his Honour's conclusion in relation to this aspect of the matter. If leave were to be granted to amend then it should date from 2 May 2017 when the first viable form of proposed paragraph 7 was articulated.
35 The Respondent submitted that even on this basis leave to amend should be refused because it would be futile. On this view, the claims of class members which were commenced on 2 May 2017 would lie outside the two year window provided by Art 35 and were bound to fail. Nothing except waste would be achieved by permitting such a doomed venture to proceed.
36 In principle, I accept this submission. However, it is possible that some members of the original class definition in the version of paragraph 7 which I struck out in the earlier judgment may be members of the new class. For example, the earlier class included, inter alia, 'residents of Australia who are the legal representatives of a passenger who was killed on MH 17'. This lacked a jurisdictional link to Art 33. Nevertheless it is possible that there are persons in that class who are also members of the new class (i.e. persons who are personal representatives of passengers whose destination was Australia). Put another way, the permissible class of personal representatives of passengers travelling to Australia may fortuitously include members of the impermissible class of Australian resident personal representatives of passengers on MH17. To the extent the two classes have an intersection, it is likely - certainly arguable - that their claims, even in the new class, are not statute barred since they were commenced before 18 July 2016.
37 The Respondent sought to outflank this problem by submitting that the representative proceeding had never been properly commenced. This was because it was submitted that the requirements of s 33H of the FCAA had not been met (set out above at [5]).
38 I am not sure I accept this submission. But even if I did it would not mean that a representative proceeding had not been commenced; it would mean only that it had not been commenced properly and was liable to be ordered no longer to continue as a class action under s 33N. The argument does not have the effect of meaning that the proceeding was not commenced.
39 For those reasons, I cannot presently be satisfied that the claims of the entire proposed amended class are inevitably doomed. Accordingly, I propose to grant leave to amend the statement of claim to include the new proposed class definition. If at some later stage it becomes possible to identify who, if anyone, is a member of the intersection between the former and new classes, I will entertain a strike out application in relation to the balance.
40 There are two footnotes to these conclusions. First, the amendments which I have permitted do not contradict the two year time bar erected by Art 35 because they do not take effect from the commencement of the proceeding. Had it been necessary to consider whether FCR 16.53 could be used retroactively to defeat Art 35, difficult issues might have arisen. Matters relevant to their resolution would have included:
the inability, on the one hand, of similar amending provisions under State law to outflank federal time bars (see Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38; (2005) 223 CLR 251 ('Agtrack') at 266-271 [45]-[59], and, on the other, the undesirability of having the outcome of an amendment application depend on whether it is filed in a State or Federal Court;
the legislative history of Part IA of the CACLA and s 59(2B) of the FCAA. The latter requires an appreciation of the Full Court's approach to permitting amendments to raise statute barred claims in Western Australia v Wardley Australia Ltd [1991] FCA 314; (1991) 30 FCR 245 and the repudiation of that approach on appeal by Deane J and Toohey J writing separately in Wardley v Western Australia [1992] HCA 55; (1992) 175 CLR 514. The Minister's second reading speech for s 59(2B) explicitly suggests that it was comments made by Toohey J in obiter which gave rise to s 59(2B);
an appreciation of the distinction between inconsistency between a State law permitting amendment and a federal rule such as Art 35 of the Montreal Convention (to be resolved by applying s 79 of the Judiciary Act 1903 (Cth)) and inconsistency between two federal rules - Art 35 and s 59(2B) of the FCAA and rules made under it - to be resolved by the quite different principles explained in Commissioner of Police v Eaton [2013] HCA 2; (2013) 252 CLR 1; and
the desirability of conventions such as the Montreal Convention being given a uniform international operation: see Kahn v Trans World Airlines Inc (1981) 443 NYS 2d 79; see also Agtrack at [50].
41 Secondly, the Applicant did not contend that, as commenced, her claim constituted a federal matter defined by a single factual substratum: see Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 at 258, 267; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 545, 560-562; Agtrack at 262-263 [29]-[32], 265-266 [41]-[44]; Re Wakim; Ex parte McNally [1999] HCA 27; (1999) 198 CLR 511 at 546 [25]-[26], 563-564 [74]-[77], 585-587 [139]-[147].
42 In relation to costs, the Respondent was not confronted with a viable application until the hearing on 2 May 2017 when a new version of paragraph 7 was handed up from the bar table. Until that time, the paragraph 7 which was being put forward had no prospects of being permitted. On the application itself both parties have had a measure of success. I will order the Applicant to pay the costs of the Respondent of the application up until the hearing on 2 May 2017. In relation to the hearing itself, each party will bear their own costs. Finally, the Applicant must also pay any costs thrown away by reason of the amendments.
43 The orders I make are:
- Grant leave to the Applicant to amend her statement of claim in the form handed up at the hearing on 2 May 2017.
- The amendments are to date from 2 May 2017.
- The Applicant is to pay the Respondent's costs thrown away by reason of the amendments.
- The Applicant is to pay the Respondent's costs of the application up until the hearing on 2 May 2017 but each party is to bear its own costs of the hearing on that day.
- Stand over the matter for further directions on 29 June 2017 at 9.30 am.
44 There remains extant the Respondent's application to have the proceeding cease to continue as a class action. This was not formally before me on the present application. My current view is that it should be dismissed with costs reserved. However, I will hear the parties on this question if they wish. Otherwise, they may submit a consent order.
I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.