Discernment
96An analysis of the defendants' submissions must commence with the provisions of the Civil Liability Act which have been set out earlier in this judgment.
97Part 10 permits of representative actions. A representative action can be commenced, in accordance with s 157, if three features are present, namely:
(a)where seven or more individuals have claims against the same person;
(b)the claims of those seven "... are in respect of or arise out of the same, similar or related circumstances"; and
(c)the claims give rise to a substantial common question of law or fact.
98The power presently being exercised by the Court, in accordance with s 166, assumes that representative proceedings have been properly commenced, and requires the Court to consider whether the interests of justice are such that the proceedings should not continue as representative proceedings. There are four specific bases set out in the section upon which a court would be entitled to conclude that the interests of justice do not permit the continuation of the proceedings as representative proceedings. As well, under the section the Court is entitled to make such an order if it is "otherwise inappropriate" for the claims to be pursued by means of a representation proceeding.
99The first specific basis in s 166(1)(a), that is that the costs of the representative proceedings are likely to exceed the costs in any separate proceedings, is not said to arise by any of the parties in the circumstances of this present proceedings. It can be put to one side.
100The second basis in s 166(1)(b), which is that all relief can be obtained by means of proceedings other than representative proceedings, provides one factor for the Court to take into account. Here it was not in dispute that it would be open to each of the plaintiffs, subject to any defences, including limitation defences, to bring proceedings individually making the claims which are made in these proceedings. The same relief would be available to a claimant in individual proceedings. This factor establishes one basis upon which the discretionary power in s 166 of the Civil Procedure Act may be exercised.
101It is convenient to address here, the fourth specific basis for the exercise of the power under s 166, namely that contained in s 166(d). With the exception of the fact that the claims of the plaintiffs are each the subject of a limitation defence, no defendant submitted that they were not able to adequately represent the interests of the group members.
102I am not persuaded that the fact which is obvious from the pleadings, that these two plaintiffs were at Fairbridge Farm for only a part of the period of its operation, means that they cannot adequately represent the interests of the group members. After all, no one person would have been at Fairbridge Farm for the whole of the period of its operation.
103The third matter identified in s 166(1)(c), which is to be considered, is whether the representative proceedings will not provide an efficient and effective means of dealing with the claims of the group members. If the Court is satisfied that they do not, then the section provides that it would not be in the interests of justice to allow the proceedings to continue as representative proceedings.
104As has been earlier recorded, the plaintiffs submit that having regard to the pleaded issue, the representative proceedings are manifestly an effective and efficient means of dealing with the claims. It will be recalled that a feature of the Second Amended Statement of Claim is that there was, during the relevant period at the Fairbridge Farm, alleged to have been an abusive environment. It is pleaded that as a consequence of this environment, the plaintiffs and group members who were resident at the Fairbridge Farm, were exposed to the behaviour of persons in an environment which permitted systemic misconduct, and allowed such abuse to occur.
105Of this broad allegation, the Commonwealth submits:
"The defect in the plaintiffs process of reasoning in this respect is to assume that proof of individual instances of abuse over a 31 year period will prove that each of the first and second plaintiff and the represented persons were subject to an abusive environment common to all. Even if the Court was satisfied that the environment in which the first or second plaintiff was subjected to over the period of their residence at Fairbridge was abusive, that would not constitute proof that each of the group members were also subjected to the same abusive environment. The fallacy in this argument is the assumption that proof of the environment to which the first or second plaintiff was subjected, is proof of a common environment to which the group members were subjected."
106A similar submission is made by NSW. It said:
"The controversy broadly speaking is firstly as to whether each group member (the group comprising potentially over 800 members) resident at Fairbridge for periods ranging, it seems, from one year ... to 13 years, were somehow abused and thereby suffered injury during their respective residences by one or more of the 68 alleged abusers identified to date. The group members' case does not plead the relationship of each alleged perpetrator to the third defendant, nor specifically how the second defendant is said to be liable for their conduct. ...
As far as the State of NSW is concerned, the basis on which it is alleged to be responsible for the alleged abuse remains unclear at present. ... The controversy so far as the State is concerned appears to be whether, in its 34 years of connection with Fairbridge by way of licensing its continued operation through the various directors of Child Welfare, it failed somehow to fulfil some particular duty so as to avoid foreseeable injury to the various children in different periods within those 34 years. Assuming the gist of the action is one alleging the second defendant exposed the group members to an abusive environment as alleged, it is unclear how and why that is alleged to have occurred."
107All defendants pointed to the lengthy period of time, variously 31 or 34 years, over which the Fairbridge Farm operated, the obvious changes in personnel on the staff of the school and on the farm, the obvious variations in the identity of each resident and length of stay of each resident at the Fairbridge Farm over that period, the large number of individuals alleged to be responsible for the abuse, and the absence of commonality in many respects of the claims made by the group members, including the plaintiffs.
108These submissions concentrate on issues of difference, and issues of non-commonality, which are said to be so significant that the proceedings ought not continue in their current form.
109It is inevitable, when dealing with claims by multiple plaintiffs for damages for personal injury based on causes of action in tort, that there will be elements of those claims which are not common. The legislation acknowledges and gives effect to this proposition. Besides the provisions of s 166 of the Civil Procedure Act to which attention has been given, the provisions of ss 168, 169 and 170 all provide a mechanism which recognises that not all questions in all claims by all individual group members will be resolved in a single hearing. In particular, s 168(1) specifically contemplates the need for the Court to give directions with respect to remaining outstanding questions.
110Accordingly, when one is considering under s 166 of the Civil Procedure Act whether the representative proceedings will, or will not provide an efficient and effective means of dealing with the claims of group members, it needs to be borne in mind that there is no necessary expectation that the representative proceedings will deal with all claims of all group members through to finality although the claims of the plaintiff (or plaintiffs) may be so dealt with. It is a part of the legislative scheme for representative proceedings, that the Court is entitled when it decides that it is appropriate so to do, to order that proceedings be continued individually, or else the individual questions be determined separately. A relatively recent example of this approach is to be found in Merck Sharp & Dohm (Australia) Pty Ltd v Peterson [2009] FCAFC 26.
111The plaintiffs submitted that upon the basis of the pleadings and defences, there were a significant number of common questions of law and fact such as would justify the continuation of the proceedings as representative proceedings, at least at this point in time.
112In particular, with respect to the legal issues referring to the existence of a duty on the Commonwealth and the State, the plaintiffs submitted that having regard to the pleaded basis for the existence of the duty, including the nature and content of the duty, an identical duty must arise for each member of the group who was an immigrant from the United Kingdom.
113As well, the plaintiffs submitted that the nominated common questions of mixed fact and law relating to the third defendant, the Fairbridge Foundation and its role and function with respect to the Fairbridge Farm, would all arise in the context of any claim made against the Fairbridge Foundation by any group member.
114With respect to the common questions of fact set out in Annexure B to the Second Amended Statement of Claim, the plaintiffs submitted that as those questions demonstrated, the allegations of breach of duty involve systemic failures by the three defendants. The plaintiffs submit that rather than these failures existing on a different basis for each plaintiff and group member, the evidence about and findings which they seek this Court make, must be common.
115Finally, the plaintiffs point to matters raised in the pleaded defences which they submit are matters of substance and which must necessarily be common to all claims. These matters include:
(a)whether the contemporaneous mores and culture of the time permitted corporal and other punishment of children of the kind, speaking generally, which was administered; and
(b)whether the resources available to the defendants enabled them to conduct themselves differently from the ways which the plaintiffs claim they did, or else should have done.
116The defendants challenged these identified common issues, largely by submitting that whilst such issues may appear to have some degree of commonality, given that each individual claimant in a tortiously based claim needs to establish that the duty is owed to them individually and that any breach is a breach of that individual duty, then the real likelihood was that there would not in truth be such commonality of fact or law. The defendants drew attention to the length of time covered by the allegations in the plaintiff's claim.
117The defendants in particular challenged the notion of an "abusive environment" to which considerable attention is devoted in the Second Further Amended Statement of Claim. The defendants submitted that the proof that such an environment existed could not be a relevant fact in the causes of action alleged. I have earlier referred to their submissions to this effect.
118It is not appropriate on this motion to reach a concluded view on whether the plaintiffs would be entitled to prove the existence of such an environment. However, it is appropriate that I note that I am not persuaded that the proof of such an environment as is pleaded would be wholly irrelevant to the determination of the issues joined between the parties. If permitted into evidence at any hearing, the "environment" would seem to be common to a number of the plaintiffs and group members. Whether this will ultimately be so, can only be determined by the trial Judge.
119Against this review of the pleaded issues, and the submissions of the parties, it is necessary to identify the authorities and resolve the arguments, and to examine, also by reference to s 166(1)(e), whether it is otherwise inappropriate for the claims to be pursued by means of representative proceedings.
120The plaintiffs drew attention to the decision of the Full Court of the Federal Court of Australia in Bright v Femcare Ltd [2002] FCAFC 243; (2002) 195 ALR 574 which they submitted was instructive on the approach to be taken by this Court to an application such as the defendants were making. Although Bright was a decision dealing with the provisions of the Federal Court of Australia Act, those provisions are sufficiently similar for the principles enunciated, and the comments made by judges in the Federal Court in that decision and others with respect to similar provisions, to be applicable in this application. At [149], Kiefel J said:
"In my view the motion brought by the first respondent was premature, in the sense that it required a view of the evidence which is likely only to be gained after a hearing, or at least a hearing on those issues. If the trial judge considers that the findings to be made have application to the other claims, appropriate determinations and orders can be made. The question whether to make an order of discontinuance under s 33N(1)(c) could be revisited at that point."
The plaintiff submitted that at this stage, the defendants' motion was premature, and for that reason alone, ought to be dismissed.
121On the more general point of the approach to be appropriately adopted in considering whether or not to make an order that proceedings are not to continue as representative proceedings, Lindgren J warned against the premature determination of issues under s 33N of the Federal Court of Australia Act. At [18] he said:
"18 The applications under s 33N were made at a procedurally early stage. Defences have not yet been filed. In substance, the applicant commenced a representative proceeding which ex hypothesi, the legislature intended she be entitled to commence because of the presence of substantial common issues of law and fact, yet the Court was immediately asked to accept that the proceeding would not provide an efficient and effective means of dealing with the claim of the Group Members. I do not mean to suggest that an application under s 33N at such an early stage of a properly commenced representative proceeding would always be premature: if there were an incompatibility or conflict between the representative party's case and the cases of the represented parties (cf Tropical Shine Holdings Pty Ltd (t/a KC Country) v Lake Gesture Pty Ltd (1993) 45 FCR 457 at 464) or if the only substantial common issue were one of law on which a decision in the case of one group member would bind the others, it may be thought not efficient or effective for the representative proceeding to continue. But ordinarily one would expect that, in an attempt to give effect to the legislative intention, a means will be sought, by case management techniques, to enable a representative proceeding to continue to the stage of resolution of the substantial common issues on the basis that after that stage is completed, an order under s 33N or directions under s 33Q will be made (cf the order made by French J in Zhang v Minister for Immigration, Local Government & Ethnic Affairs (1993) 45 FCR 384 at 403, 404, and the course followed by Stone J in Vasram v AMP Life Ltd [2000] FCA 1676 at [18])."
122In considering the discretionary issue posed for determination, Lindgren J went on to say at [21]:
"This is not to say that the respondents' submission is not important for case management purposes. It is unjust that a respondent be vexed with a representative proceeding over a long period during which the unmeritorious nature of the claims remains hidden because it resides in non-common issues. But in my opinion, the present representative proceeding can be managed in such a way that the common issues can be determined so that the determination binds the applicant and Group Members (cf ss 33Z and 33ZB of the Act), and contemporaneously a selected number of the individual claims can be finally determined, that is, on their non-common issues as well (see ss 33Q and 33ZF)."
123At [128] Kiefel J said:
"As her Honour the primary Judge observed, a proceeding might satisfy the requirements of s 33C(1), but an order for its discontinuance as a representative proceeding might nevertheless be appropriate under s 33N(1). In general terms the matters listed for the Courts consideration under paras (a) to (c) of the latter subsection require consideration as to what would be achieved by a determination of the proceedings in their present form and the costs of doing so. If there is some real benefit to be gained, the requirement that the proceedings be seen as an inefficient means of dealing with the claims might not be met. A consideration as to whether the proceedings would, or would not, provide an efficient means of dealing with the claims of group members, would almost certainly involve an assessment of the findings which might be made in an applicant's case and of the extent to which they would be likely to resolve the other claims. It does not seem to me that the subsection requires an audit to be conducted of the findings which might be useful, and those which might not be in the other claims. The enquiry required by the subsection is not whether the continuance of the representative proceeding can be seen to be efficient, but whether the Court is satisfied that it is in the interests of justice to order its discontinuance as a proceeding ... "
124Finkelstein J, the third member of the Bench in Bright, acknowledged that it was to be expected that a representative proceeding would not resolve all issues in a dispute. His Honour considered that it was appropriate in considering whether or not the interests of justice were such as to favour the making of an order under s 33N of the Federal Court of Australia Act, there needed to be weighed in the balance, the broad public interest and the interest of the administration of justice, both of which, he held, favoured class actions.
125His Honour went on to say:
"152. That requires one to consider the principal objects of the class action procedure. They are:
(1) To promote the efficient use of court time and the parties' resources by eliminating the need to separately try the same issues;
(2) To provide a remedy in favour of persons who may not have the funds to bring a separate action, or who may not bring an action because the cost of litigation is disproportionate to the value of the claim; and
(3) To protect defendants from multiple suits and the risk of inconsistent findings.
153. There will be cases where a representative proceeding will not resolve all issues in the dispute. Commonly, for example, a representative proceeding will be suitable to try issues of liability, while proof of damage and other remedies may be left to each individual member of the class to establish. Sometimes the benefit of a representative proceeding will be even less than that. There will be cases where a class action will do no more than resolve certain issues relating to liability, leaving others to be dealt with on an individual basis. Inducement in a fraud case, for example, could rarely be dealt with as a common issue."
126Also to be considered in determining whether or not the discretionary power in s 166 of the Civil Procedure Act ought be exercised, are questions of the capacity of the Court to manage the litigation. In Guglielmin v Trescowthick (No.2) [2005] FCA 138; (2005) 220 ALR 515, Mansfield J, in dealing with s 33N of the Federal Court Act said at [76]:
"The further management of this proceeding may include consideration of the creation of sub-groups within the claim group. It may include consideration of orders for the separate trial of issues. It may include directions that the issues of relevance be refined by reference to the circumstances of particular sub-groups or members of the claim group, as a preliminary step to considering how the hearing should progress. I agree that the inquiry which the proceedings requires should not become (as senior counsel for the first respondent put it) a Royal Commission into the conduct of the affairs of [the company] or the role generally of its directors in the conduct of its affairs. I think further case management will reveal whether that danger can be avoided and an efficient and useful focus applied to the further conduct of the proceedings."
127His Honour went on to hold, consistently with what Finkelstein J said in Bright, that he was entitled to have regard to the public interest, which included whether it was an efficient and effective use of the Court's resources to hear and determine claims if they were mounted individually, as compared with a single class action.
128It is necessary to take into account all of these issues, and to consider whether, given that the application has been made, at the present stage of the proceedings, it is appropriate for the Court to exercise its discretion under s 166 of the Civil Procedure Act to order that the proceedings no longer continue as representative proceedings.
129The context, size and range of the representative proceedings need first to be considered as it provides the extent within which the discretion is to be exercised.
130In addition to the two named plaintiffs, by a letter of particulars dated 26 August 2011, the solicitors for the plaintiffs provided the names of a further 65 individuals who would be group members. The earliest point in time at which one of these group members attended at the Fairbridge Farm was in 1938. The latest in point of time was 1971. The solicitors for the plaintiffs have also indicated that they act for a further three individuals who were not then named as being group members.
131The overall period covered by the operation of the Fairbridge Farm is about 34 years. It is undoubted that over that time there will have been different staff members, although some will have remained for significant periods. But it is also clear that some staff members will be the subject of allegations made by more than one of the group members. The particulars provided that 68 individuals are pointed to as being perpetrators of the abuse.
132From the pleadings, it is clear that there are some complex questions of law surrounding the existence of a duty of care by each of the defendants. This requires an analysis of legislation in respect of the first and second defendants, the inter-governmental agreement in respect of the Commonwealth and a variety of documents, including licensing documents, so as to enable an identification of who, in truth, was in control of the affairs of the Fairbridge Farm.
133Given that each of the plaintiffs falls within an identified group, namely, children who attended at the school, and were resident on the Fairbridge Farm, the issue of the nature and content of any duty of care on the part of each defendant, and how it arises is most likely to be identical with respect to each member of that group.
134The contention advanced, at least by the first and second defendants, with respect to why a duty is not owed, also equally applied to all members of the group as well as the plaintiffs themselves. This question of duty of care is a matter of substance which at this stage appears to be a common question which would require findings of fact and determination of questions of law.
135In considering whether or not a duty exists, and if so, whether in respect of either plaintiff, any defendant has breached that duty, a central question will arise to which the parties have not specifically adverted, which is whether, having regard to the provisions of s 3B of the Civil Liability Act, and in light of the nature of the claims made in the pleadings, the Civil Liability Act applies to the claims made.
136If that Act applies, ss 5B and 5D involve considerations which are likely to involve factual findings applicable to the claims of the plaintiffs and all group members, such as:
(a)the actual or constructive knowledge of each defendant of the relevant risk of harm;
(b)the social utility of the relevant activity, namely, the undertaking of the Fairbridge Farm;
(c)what reasonable community standards were, at the relevant time, particularly with respect to the administration of corporal punishment.
137Similarly, the pleading by the Commonwealth raises a substantial common issue, namely that it was not negligent "... having regard to the social and cultural standards of the time ..." including what standards of behaviour were "... socially and morally acceptable ...".
138As earlier noted, in addition to the two plaintiffs, their solicitors are presently aware of a further 65 group members, and the potential size of the entire group may well be in the many hundreds. If the Court was to hear each of these cases as individual cases, the call upon the Court's resources would be very significant. The call upon such witnesses as are available to the defendants would also be significant. They may have to give similar evidence many times over, because there is a very real likelihood that the same witnesses would be called upon to give similar evidence in each individual case.
139The defendants submitted that, by the appropriate use of the procedure contemplated by Part 28 of the UCPR, which would enable separate questions to be identified if individual proceedings were continued for each plaintiff and each group member (but were heard together in a single hearing where appropriate), the call upon judicial resources and resources of witnesses could be reasonably managed and minimised. That may be so, however, such a method of proceeding would not be able to bind any of the other potential claimants who are not yet specifically identified and whose claims would be determined by a representative proceeding under Part 10 of the Civil Procedure Act. It has no obvious benefit over a representative proceeding, and obvious disadvantages to a defendant.
140In dealing with the common issues which have been identified, there is a risk, as the defendants correctly submitted, particularly given the 34 year operation of the Fairbridge Farm, that the hearing of those questions would become a procedure which was closer to an inquiry of the kind conventionally seen in a Royal Commission, rather than the determination of an adversarial dispute upon which the plaintiff bears an onus of persuading the Court that he or she has proved each of the elements of the pleaded cause of action.
141This is a factor which is to be weighed in the determination. But, I think, as did Mansfield J in Gugliemin, that any such risk can be managed with appropriate directions. As well, a hearing by means of common questions as a part of representative proceedings means that there is a positive benefit in terms of the saving of legal costs for the parties, which is readily able to be identified.
142The defendants in their submissions, pointed to the many differences which were likely to be encountered in the course of hearing a representative proceeding. So much can be accepted, particularly since these are all claims for personal injury arising out of physical abuse or sexual assaults. However, as I have earlier noted, the legislative scheme of representative proceedings recognises that this may be so, and the Court's power to give directions can be readily used to ensure that the existence of such differences do not work an injustice on the parties. Taken with the public interest to which Finkelstein J has referred in Bright, this factor is not sufficient, without more, to justify an order under s 166.
143Ultimately, it is a question, in light of the foregoing and all of the submissions of the parties, of whether the Court is satisfied that it is in the interests of justice to order that the proceedings no longer continue as representative proceedings under Part 10 of the Civil Procedure Act, having regard to the provisions of the various subsections in s 166 of the Civil Procedure Act.
144I am not so satisfied. On the contrary, as things presently appear, at this stage of the proceedings, I am satisfied that the most efficient and cost effective method of disposition of these claims is by a representative proceeding as it is presently constituted.
145In my judgment there are significant benefits to the plaintiffs, group members and each defendant in terms of the timeliness and efficiency in hearing and disposing of all common issues of fact and law at one hearing, and in a way which binds all group members to the results of the determination of the common questions.
146Importantly as well, from the perspective of the proper use of the Court's resources and in the circumstances here present, there is a significant saving of judicial time in a single hearing of all common questions together with a consistent approach to case management procedures. Such an approach is also most likely to achieve consistency of decision making. The proceedings as presently constituted are in the form of procedure most likely to result in the achievement of the overriding purpose of the Civil Procedure Act and the UCPR.
147Accordingly, I decline to make an order under s 166 of the Civil Procedure Act that these proceedings no longer continue under Part 10 of that Act.