(d) Were the plaintiff and represented parties "retail clients" for the purposes of the Corporations Act ?
56 Mr Abadee says that any material factual differences in the claims of the group members as to statements being made to them by the defendant's authorised representatives, as pointed out by Mr Robinson, do not detract from the factual common interests listed above.
57 He puts that what happened was that the defendants had an information memorandum which those in charge of Westpoint issued to financial advisers generally and that the defendant merely adopted this for its advice to its customers so that the situation is closely akin to the case of a common prospectus.
58 In addition, Mr Abadee submits that the declaratory relief and relief by way of orders for damages and/or compensation which the plaintiff seeks is a common relief which is beneficial to all group members. Further, he says that the claims for relief on behalf of the group members are identical.
59 There are also alleged to be common questions of law arising including what a plaintiff must establish so as to show that he or she received "personal advice" and "financial product advice" from the defendant's authorised representatives in order to make out a case under s 766B of the Corporations Act.
60 It must be said, however, that at this stage of the proceedings, a number of the so-called common issues outlined by Mr Abadee are matters about which Mr Robinson says that there is no contest. Included amongst these are that the promissory notes were financial products. He also points to the decision of Finkelstein J in Financial Industry Complaints Service Ltd v Deakin Financial Services Pty Ltd (2006) 60 ACSR 372, which has already elucidated what is a "retail investor" and "investment advice".
61 As the academic writings on the topic demonstrate, it is a difficult matter for judgment where the alleged common action is based on a series of representations made to different people about a project. The prime reason is that so much depends, first, upon what exact words were used to each person to whom a representation was made and secondly, what effect those words had on that person. Clearly, even the same words addressed to a Birdsville camel trader and a Sydney stockbroker, may well invoke different reactions.
62 The ultimate factual issue in each individual case is whether the words in each case constituted a false or misleading or deceptive representation and whether, if they did, they were a cause of the investment decision.
63 Courts need to be careful in this class of case to see that there is not just one typical case, but rather, situations may fall into one of a number of categories.
64 The case will often be different where there is a written representation as opposed to an oral one. Again, as the High Court noted in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592, 604 [36], one must distinguish between a misrepresentation directed at a class and one directed at an individual or a series of individuals.
65 In her book, "The Class Action" (Hart Publishing, Oxford & Portland Oregon, 2004), Rachael Mulheron, a Queensland solicitor and English academic says at p 174:
"It has been judicially recognised that the very nature of the tort of misrepresentation and its elements gives rise to a whole host of individual issues that renders certification problematical … Individual issues such as a special relationship of proximity between the defendant author and the class member recipients of the statement, separate defences, individual loss and damage, reliance by individual class members upon the representation, the factual questions of who said what, when and to whom, all serve to present a complex scenario that even the statutory no-bar factors … cannot always overcome. However, the task of establishing the requisite commonality is difficult but not intended to be impossible."
66 Proceedings under the Trade Practices Act and similar legislation insofar as they involve questions of misleading or deceptive conduct are in the same plight as actions for misrepresentation.
67 Mulheron refers, in connection with her last mentioned statement, to the decision of Wilcox J in Nixon v Philip Morris (Australia) Ltd (1999) 95 FCR 453 esp at [127]. (This case went on appeal, but not on this point).
68 The Nixon case was a class action on behalf of people who had suffered health problems allegedly through smoking and who blamed inadequate warnings on cigarette packets. The defendant put that there could not be a class action because of the subjective elements involved as to whether each member of the class failed to stop smoking because of the lack of proper warning.
69 Wilcox J said at [126]-[127] p 486 that whilst that proposition had a superficial charm, a court's determination always involved assessment of a subjective element and that, if the proposition put by the defendant was too rigorously applied, the value of the concept of a class action would be defeated. His Honour made similar remarks in his earlier decision of Tropical Shine Holdings Pty Ltd v Lake Gesture Pty Ltd (1993) 45 FCR 457, 464.
70 That is a salutary warning, however, as Mulheron notes at p 174, there are a number of authorities, particularly Canadian cases, where it has been held that the fact that the group is not homogenous in commercial experience and that oral representations were made separately to various members at different times, was sufficient to disqualify the case from one with a common issue.
71 Mulheron says that the inherent nature of misrepresentation actions makes it difficult to find central facts capable of proof on a common basis.
72 Indeed, this has been so from early times; see eg Hallows v Fernie (1868) LR 3 Ch App 467, 471; Wong v Silkfield Pty Ltd (1999) 199 CLR 255, 262 [14] and cases there cited.
73 In Ontario in Abdool v Anaheim Management Ltd (1994) 15 OR (3d) 39, 49, Montgomery J said that American jurisprudence had shown that class actions in such cases were inappropriate because individual issues of fact and law will predominate over common issues. At p 51, he said:
"As reliance is an essential element in an action for negligent misrepresentation, the traditional view has been that such actions do not raise common issues and are not ordinarily amenable to representative proceedings."
74 Montgomery J's decision was affirmed by a Divisional Court in (1995) 121 DLR (4th) 496, though the Divisional Court reiterated that it was possible for such cases to be certified as proper for a class action.
75 Again in Ontario in Carom v Bre-X Minerals Ltd (2001) 51 OR (3d) 236; 196 DLR (4th) 344, [8], the Court of Appeal observed that the most notable situation where courts have declined to let an action proceed as a class action related to claims grounded in allegations of misrepresentation.
76 Similar statements have been made in Australia by the Full Federal Court; Qantas Airways Ltd v Cameron (1996) 66 FCR 246, 289 (another case involving the effect of smoking on group members) per Lindgren J at 289 and Lehane J at 298.
77 With this background, I must turn to the particular facts of the present case.
78 The present is not a case where there was just a common written representation. In the present case, there were different things said to different people in circumstances where the status of the hearers differs.
79 Mr Robinson points to the affidavit of Brad Scale, dated 11 July 2007, where he deposes to the fact that PIS has over 1400 authorised representatives situated in various States. He says that, although these representatives receive supervision and guidance from PIS, they have a degree of independence so that what they actually say to customers will vary from representative to representative.
80 To illustrate this, Mr Scales refers in BS-1 p 182 to the advice offered to Koppen by Advisor Wright, to Webster by Advisor Rowe and to Cooper by Advisor Moodley. There are some differences in these advices.
81 I will not burden this document with the details which are to be found in Mr Robinson's written submissions which I will leave in the file. However, I noted that some statements include information about tax savings and others do not; some statements contain different information about tax; some statements provide information about the risk of capital loss, while others have no such information.
82 Mr Robinson's written submissions say that whilst it is possible that there may be cases where the same representation is made by different representatives to different people, this is not such a case. The particulars show material differences if one compares the cases of Koppen, Snow, Schaffer, Webster and Jameson.
83 Whilst all this is true, it must be said that there is one common thread running through most of the statements and that is mention of the guarantee provided by the Westpoint Group.
84 I am bound by the overriding principles of the Civil Procedure Act. In any event, even before that Act, I and most other judges have acted so as to ensure, as much as adjudicators are able to interfere with the preparation of cases for hearing, that the most efficient course is followed, so long as over efficiency does not lead to injustice to any party.
85 Part of that philosophy, and it is a philosophy which appears to me to have been taken up in the amendments to the rules, is that class actions have a proper place to play in the efficient conduct of litigation in this Court.
86 The judgment I have to make is case particular.
87 In this particular case, looking at the overall picture and the overriding principles, in my view the disparate factors in the cases involving the plaintiff and various members of The Group are sufficiently diverse not to permit a class action as a method of reducing the costs and complexities of resolving the dispute.
88 Furthermore, if I merely looked at the commonality, there is not in this particular case, on the material before me, sufficient to hold that there is commonality.