Jameson v Professional Investment Services Pty Ltd

Jameson v Professional Investment Services Pty Ltd - [2009] NSWCA 28 - NSWCA 2008 case summary — Zoe

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Wednesday 25 February 2009 Bruce Noel Jameson v Professional Investment Services Pty Limited Judgment 1 SPIGELMAN CJ: Pursuant to leave granted, the appellant appeals from an order of Young CJ in Eq, (Order 3) made under r 7.4(2) of the Uniform Civil Procedure Rules 2005 (the "UCPR"), that the proceedings not continue as a representative proceedings. This order was sought by the respondent in an interlocutory process. The appellant seeks an order that Order 3 be set aside. 2 His Honour also refused leave to amend the appellant's originating process and the appellant appeals from this decision. He seeks an order that his Honour's order (Order 2) dismissing the appellant's application to amend be set aside. 3 The matter was argued before his Honour on 17 July 2007. At that time r 7.4 of the UCPR provided: "7.4(1) This rule applies to any matter in which numerous persons have the same interest or same liability in any proceedings. (2) Unless the court orders otherwise, the proceedings may be commenced and carried on by or against any one or more persons as representing any one or more of them." 4 The rule had been the subject of a then recent judgment of White J in O'Sullivan v Challenger Managed Investments Ltd [2007] NSWSC 383; (2007) 214 FLR 1. Following that judgment the rule was substantially amended with effect from 9 November 2007, that is, after this case had been argued before his Honour. Young CJ in Eq, without further submissions, about the absence of which no complaint is made on this appeal, proceeded to determine the applications before him on the basis of the amended rule. As will appear below, proceeding in this way gave rise to the possibility that some matters could be overlooked. 5 The rule now provides: "7.4(1) Subject to subrule (5), this rule applies to any proceedings concerning: (a) any matter in which: (i) numerous persons have claims against the same person, and (ii) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances, and (iii) the claims of all those persons give rise to a substantial common issue of law or fact, or (b) any matter in which numerous persons have the same liability. (2) Proceedings to which this rule applies may be commenced and, unless the court orders otherwise, carried on by or against any one or more persons as representing any one or more of them. (2A) Any such proceedings may be commenced: (a) whether or not the relief sought: (i) is, or includes, equitable relief, or (ii) consists of, or includes, damages, or (iii) includes claims for damages that would require individual assessment, or (iv) is the same for each represented person, and (b) whether or not the proceedings: (i) are concerned with separate contracts or transactions between the defendant in the proceedings and individual represented persons, or (ii) involve separate acts or omissions of the defendant done or omitted to be done in relation to individual represented persons. … (4A) If it appears to the court that determination of the issue or issues common to all the represented persons will not finally determine the claims of all the represented persons, the court may give directions in relation to the determination of the remaining issues. (4B) Without limiting subrule (4A), the court may direct that notice be given to some or all of the represented persons in the proceedings in respect of any matter. (4C) A represented person, whether or not joined as a party, is taken to have brought proceedings on the day on which the person became a represented person on all of the person's causes of action that may be determined by judgment in the proceedings." 6 The application to amend before Young CJ in Eq had at least three distinct parts. 7 First, to remove a reference that one cause of action was brought in a representative capacity (but retaining the pleading in a personal capacity). This amendment was sought on the basis that it could not be brought in a representative capacity under the original r 7.4 as interpreted in O'Sullivan.

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(iv) An allegation that the respondent, by itself and through its agents, gave inappropriate advice contrary to its obligations under s 945A of the Corporations Act , to which it is convenient to refer as the Defective Advice Issue. 13 In order to simplify the analysis I have omitted reference to the alternative pleadings with respect to the effect of the parallel provisions of the Corporations Act, before its amendment by the Financial Services Reform Act 2001 (Cth). No different issues arise with respect to this pleading. 14 His Honour did not refer to the Defective Advice Issue, concerning the alleged contraventions of s 945A of the Corporations Act. It appears that this was because of the fact that the application on the part of the appellant to amend his Statement of Claim, which amendment was before his Honour, sought to transform the original pleading, which purported to institute proceedings on this cause of action both in a personal and in a representative capacity, so as to delete the reference to representative capacity. In the original Statement of Claim s 945A was pleaded in both a personal and representative capacity. In the proposed amended Statement of Claim this was pleaded only in a personal capacity. 15 This Court was informed by counsel for the appellant that this change was made by reason of the interpretation the legal advisors of the appellant had placed on the judgment of White J in O'Sullivan, especially at [55]. That judgment, counsel contended in this Court, was no longer an answer to the representative claim by reason of the amendments to r 7.4 that came into effect after this matter had been argued before Young CJ in Eq. 16 At [55] of O'Sullivan, White J was concerned with an allegation of non-disclosure of risk. His Honour said that it would not be appropriate to give declaratory relief "except as to whether the defendant engaged in misleading or deceptive conduct in relation to each such person". It appears that the view was taken that a declaration could raise no common issue with respect to s 945A, because that section expressly turns on an inquiry into "the personal circumstances" of a client. 17 Young CJ in Eq dealt with the amendments as proposed by the appellant. Any oversight arose because of the failure to have the matter reargued with express reference to the new rule. No step was taken while his Honour was reserved in this matter, after the announcement of the amendments to the rule, to bring the matter back before his Honour in order to clarify this matter. His Honour, as I have noted, proceeded to apply the new rule, but did so on the assumption that it was not necessary to determine whether the Defective Advice Issue should proceed as a representative action. That issue was not before his Honour. 18 In these circumstances it is not appropriate for this Court to consider the s 945A pleadings in this respect. Subject to the appeal from his Honour's order under r 7.4(2), the extant pleading remains on foot. I note that in view of the reference to personal circumstances in s 945A, the issue of divergence of circumstances will arise in the same general way that it arises in other contexts which are in issue on this appeal. It appears to be unlikely that a different result would ensue in this regard but it is not necessary to express a final view. 19 As will appear below, Young CJ in Eq dealt only with the Guarantee Representation Issue. His Honour approached the proceedings on the basis that certain concessions made on the part of the respondent were such that, for relevant purposes, the Managed Investment Scheme Issue and the Product Disclosure Issue were no longer in contest.

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20 The significance of the concessions made by the respondent is that they were said to remove from contention matters which would otherwise clearly have constituted common issues within r 7.4(1)(a)(iii). His Honour's judgment, accordingly, focused on the Guarantee Representation Issue which raised difficulties of a distinctively different order on the issue of the degree of commonality. These difficulties, as will appear below, were the principal focus of his Honour's analysis. 21 With respect to the Product Disclosure Issue his Honour noted that it was common ground that a Product Disclosure Statement should have been provided (at [30]). 22 His Honour's finding in this respect appears to have been based upon the following passage in the proceedings before him, when counsel for the respondent said: "By reason of previous case decisions, it is no longer open to the defendant to take the point about the product disclosure statement. What we are arguing about at the moment, as I understand it, is the form of guarantee that the plaintiff wishes to make into an issue of fact where they can claim it's a representative proceeding. That is the major issue between myself and Mr Abadee." 23 There then occurred the following exchange: "ABADEE: … I am grateful for my learned friend's concession that there is no longer any issue as to the entitlement of the plaintiff and the representative members. HIS HONOUR: He didn't say that. He said he wasn't able to contest it. Whether that meant today or forever, I'm not too sure." 24 With respect to the Managed Investment Scheme Issue, Young CJ in Eq said: "[34] It has now been judicially determined that the promissory notes issued by Ann Street Mezzanine constituted an unregistered managed investment scheme liable to be wound up. This matter was not in contest in the present proceedings." 25 This was a reference to the decision in the matter of Re York Street Mezzanine Pty Ltd (in liq) [2007] FCA 922; (2007) 162 FCR 358 at [44]. His Honour's conclusion in this respect was based on the following passage in the submissions before him: "ABADEE: Yes but there's a very recent decision from Finkelstein J. Ann Street is one of the Mezzanine companies in the group. In York Street, 28 June 2007 his Honour assumed but did not decide that the promissory notes issued in Ann Street were financial products, were interests in a management investment scheme. He did not decide it. It's just wrong to say this issue has been finally determined. HIS HONOUR: I don't think Mr Robinson did say it was finally determined. ROBINSON: I said we were no longer interested in the point. We were given an undertaking to the Court about it. I want it to be a dead issue. That's what I'm being pushed about. It's a dead issue. HIS HONOUR: In the whole - ROBINSON: Whole suit and with every individual." 26 Furthermore in written submissions, counsel for the respondent said: "As to the giving of a product disclosure statement, it is now common ground that such a produce disclosure statement should have been given and was not. That issue will be admitted and will not be the subject of resolution in any of the proceedings. It has now been judicially determined that Ann Street promissory notes constitute an unregistered managed investment scheme." 27 These concessions by counsel have not been reflected in any formal pleading. Mr N C Hutley SC, who appeared for the appellant, submitted that it was not appropriate for matters of this character to be determined on the basis of statements by counsel. He submitted there was some uncertainty in identifying precisely what has been conceded. However, it is pertinent to note that there is nothing before this Court to suggest that the appellant has sought an amended defence or that the respondent does not accept that it is bound to do so. 28 Young CJ in Eq identified at [54] the appellant's list of common issues and noted at [60] that there was "no contest" about a number of them. His Honour's subsequent reasons at [61]-[88] appear to be directed only to the Guarantee Representation Issue, with respect to which there was no general concession.

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For present purposes it is question (2) that is pertinent. 31 His Honour's judgment then had a distinct subheading: "(3) The concept of a limited representative action". It is unnecessary to set out subheadings (4) and (5). His Honour concluded with a subheading "(6) The result of this application". 32 Young CJ in Eq made reference to relevant authorities, especially Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398. He indicated his agreement with the analysis of the authorities by White J in O'Sullivan supra. 33 As the introductory words of [7] in his Honour's judgment - set out at [29] above - suggest, his Honour was purporting to deal with an application to amend the pleadings. His Honour's judgment does not refer to the interlocutory process of the respondent which sought an order under r 7.4(2) that the proceedings should not continue as a class action. His Honour did express a conclusion, arguably in those terms, and an order under r 7.4(2) would inevitably follow from his Honour's reasons. The parties proceeded, in my view correctly, upon that basis when asked to bring in short minutes to reflect his Honour's reasons. An order under r 7.4(2) was included, and made, even though his Honour had not expressly addressed that issue. 34 On this appeal, the submissions for both parties proceeded in terms of the rule, rather than in terms of the application to amend. The focus was appropriate because of his Honour's express order under r 7.4(2). It was not suggested that anything turned on the fact that the appellant bore the onus on the amendment application and the respondent bore the onus on the application for an order under r 7.4(2). 35 The fact that his Honour did not address, in terms, the application of r 7.4, whilst stating he would act on the basis of the amended rule, does create some uncertainty as to how his reasons should be understood with respect to the separate component parts of r 7.4(1) and r 7.4(2). I will return to the submissions in this regard below. 36 In the judgment, under the subheading, relevantly, "(2) Is there a common question?", his Honour said: "[44] In the present case, the first question is why should the proceedings not be commenced as representative proceedings under Pt 7, r 7.4 of the Uniform Civil Procedure Rules if the plaintiff has brought himself and The Group under that rule by way of satisfying the 'same interest in the proceedings' test? [45] The High Court in Carnie established that in order to satisfy the 'same interest' test it is sufficient if the claims for relief (here declaratory relief) by the plaintiff and represented persons/entities involve significant common questions of fact or law. [46] In the present case, the alleged common questions of fact or law have been set out by the plaintiff in the statement of claim. Essentially, they are that they all seek declarations by the court that the defendant and its authorised representatives have engaged in unlawful conduct pursuant to the Australian Securities and Investments Commission Act 2000 (Cth), the Corporations Act and the Trade Practices Act . [47] The plaintiff says that such declarations, if made, will be beneficial to The Group in that the plaintiff and each group member can then proceed to establish their individual loss or damage as a result of that unlawful conduct. [48] Those group members will not have to undergo the expense of proving matters which are finally determined in the representative proceeding, [49] The gist of all the authorities is clearly commonality - a common interest, a common grievance, a common source of rights. [50] The leading Australian case of Carnie follows that line of authority. If the persons in the class can be sufficiently identified as belonging to that class by way of having a common interest and a common grievance in accordance with established principles in the case law, if the statement of claim has been properly formed, and the proceedings are otherwise in order, then the plaintiff and represented persons will have brought themselves within the rule for a valid representative action. [51] At least at first blush, it would appear that there is a commonality of interest in having the principal issues so determined." 37 His Honour then proceeded to set out the submissions, focusing particularly on the difficulties involved in the context of allegations of misrepresentation, whether at common law or pursuant to a statutory cause of action. 38 His Honour said in the concluding two paragraphs under the subheading, relevantly, "(2) Is there a common question?": [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." 39 Subsequently, under the distinct subheading - "(6) The result of this application" Young CJ in Eq concluded: "[123] The above indicates that in this particular case, because of the lack of commonality of representation and reliance, the proceedings should not continue as a class action." 40 An issue has arisen as to whether [87], together with [123], should be understood as the sole basis of the r 7.4(2) order, that is, the lack of "commonality". A further issue has arisen as to whether [88] should be understood to be a finding that r 7.4(1)(a)(iii) was not made out, or whether [88] constituted merely the identification of a consideration relevant to the exercise of the discretion under r 7.4(2). 41 His Honour's consideration of the issues under the "common question" subheading included: "[61] … 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 …" 42 His Honour turned to the facts of the case and said: "[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."

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I have set out the conclusion in [87] and [88] at [38] above. 43 His Honour then turned to the subheading "(3) The concept of a limited representative action" and considered the fact that this was an "opt in" rather than an "opt out" case, namely that the action was not instituted on behalf of all affected persons, but only on behalf of those who had made a decision to become part of the proceedings. 44 His Honour said: "[92] Generally speaking, in common law jurisdictions, the opt-out approach has been adopted. One basis for doing so is that it promotes the public interest by allowing persons with socio-economic disadvantages to be part of the proceeding primarily because they are shielded from exposure to costs. On this point, I agree with the comments made by Michael Legg, solicitor in his article 'Institutional Investors and Shareholder Class Actions: The Law and Economics of Participation' (2007) 81 ALJ 478, 482-3. [93] The 'opt-in' approach has been used in these proceedings whereby each group member has expressly chosen to be part of the proceedings by being identified in Schedule A to the statement of claim. Theoretically, under the opt-in approach, the group of represented persons is limited to those group members identified in Schedule A. [94] However, any persons or entities other than group members who may wish to bring the same action against the defendant must do so separately to this proceeding as they will not be included in The Group. [95] If this eventuates it will lead to a multiplicity of proceedings, which, strictly speaking, must be avoided wherever possible under the general common law doctrine of representative actions. [96] I should note that there is a difference between the opt-in procedure and a limited class action. As Mr Legg points out in footnote 58 on p 486 of his article, an opt-in class action involves notifying all persons affected and seeking their approval to opt-in, whereas in a limited class action, no such notification is made to 'outsiders'. However, the principles applicable to the two are very similar. [97] From a public policy perspective, the best way forward is that which offers the most efficient use of public resources in terms of being quick and inexpensive whilst at the same time offering the most efficient administration of justice to the parties and represented members. [98] I also held in Carnie that when a represented party may have an exposure to liability (for costs) in the action, an opt-in procedure should be adopted because no person so exposed should be affected to his or her detriment by the action without conscious choice: at 473. [99] That was the case in Carnie where Esanda had made it clear that if it were not for the representative proceedings it would not pursue claims against any other person in the group of represented persons in respect of their loan contracts with Esanda. At least 10 people from that group were potentially liable to pay Esanda a minimum of $10,000 each even if Mr and Mrs Carnie succeeded. [100] In the present case the plaintiff and group members have effectively chosen an approach similar to the opt-in approach and have chosen the path of litigation funding from a litigation funder to cover the question of liability for costs, which has been permissible since Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386. [101] The present problem was analysed by Stone J in the Federal Court in Dorajay Pty Ltd v Aristocrat Leisure Ltd (2005) 147 FCR 394. After considering detailed submissions and previous cases, her Honour ruled that a class action brought by clients of a particular solicitor alone was an abuse of the court's process and repugnant to the policy of the legislation. [102] In my respectful view, her Honour was quite correct in so ruling. Hansen J in the Victorian Supreme Court took the same view in Rod Investments (Vic) Pty Ltd v Clark [2005] VSC 449." 45 His Honour went on to note that there had been criticism of the judgment of Stone J in Dorajay Pty Ltd v Aristocrat Leisure Ltd [2005] FCA 1483; (2005) 147 FCR 394, including in a judgment of Justice Finkelstein in P Dawson Nominees Pty Ltd v Multiplex Ltd [2007] FCA 1061; (2007) 242 ALR 111. 46 Young CJ in Eq rejected the approach of Justice Finkelstein. He said: "[105] With all respect to his Honour, his consideration of the factors involved do not show the same balance as demonstrated by Stone J and, thus, whilst noting what he said, I will follow the earlier more orthodox approach of Stone J." 47 Two weeks after the judgment of Young CJ in Eq in the present case, the Full Court of the Federal Court upheld the approach of Finkelstein J. (See Multiplex Funds Management Ltd v P Dawson Nominees Pty Ltd [2007] FCAFC 200; (2007) 164 FCR 275. The appellant urges this Court to follow the approach of the Full Court in Multiplex. He submits that his Honour erred in giving the weight he did to the nature of the proceedings on the basis of the reasoning of Justice Stone in Dorajay, which his Honour had described as "the earlier more orthodox approach" (at [105]). 48 Under the same subheading, his Honour considered additional matters which affected the exercise of the discretion to grant leave to amend, and which also would apply to the exercise of the discretion to make an order under r 7.4(2), as follows: "[109] In this case, a representative action will to a certain extent avoid a multiplicity of proceedings by the group members by having the issues determined at one hearing. However, it will not avoid a multiplicity of proceedings which may be brought by other persons or entities who may have the same issues to raise against the defendant but who have not opted-in to the present proceedings. [110] This is so even if the group members then proceed to bring individual proceedings against the defendant for the determination of loss and damages because, if a declaration that the defendant is liable has already been made, then the significant hurdle of establishing liability will not need to be overcome at each subsequent proceeding between each group member and the defendant. [111] There is some advantage in a common declaration being made. [112] On this type of application, it is relevant to consider the alternative methods of procedure and to judge which is more likely to produce just, quick and cheap disposal of the issues. [113] If the members of The Group were to sue in individual actions in this Court, one or two actions could be heard together with separate questions being posed to decide common questions of law. The drawbacks would be that there would be a need to seek leave to appeal rather than there perhaps being an appeal as of right; the decision in the test cases only being persuasively binding in the other cases and the probability of no litigation funder being willing to back the proceedings. [114] However, these disadvantages must be set against the overriding principles and the fact that it will still be necessary to try the issue as to each claimant as to whether there was a misleading statement made to him or her and, if so, whether reliance has been established. [115] In my view, bearing in mind the wisdom from the past as to the difficulty of dealing with misrepresentation cases in a class action, I should not grant the leave to amend as sought."

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(See also Green v Barzen Pty Ltd (formerly Dukes Financial Services Pty Ltd) [2008] FCA 920 at [13]-[15]. 53 I agree that the threshold issue under r 7.4(1)(a) is the same as that posed by s 33C(1) of the Federal Court of Australia Act. The only textual difference is the phrase "any matter in which" in the chapeau to r 7.4(1)(a). This is not a material difference. 54 There is one reference in the judgment of Young CJ in Eq which suggests that his Honour rejected the submission that there was any "common question". As I have noted, the structure of his Honour's judgment was to pose certain questions, relevantly "Is there a common question?". His Honour's reasons under this subheading culminated in par [88] which I have set out above in which he stated, to repeat: "… There is not … sufficient to hold that there is commonality." 55 When one reads pars [87] and [88] of his judgment together, it is noteworthy that in [87], his Honour used the phrase "sufficiently diverse". In par [88], which his Honour introduced with the word "furthermore", his Honour was, in my opinion, reinforcing that conclusion. Accordingly, when he used the formulation "sufficient to hold", his Honour was referring to the degree to which the range of issues were common issues. He was not making a finding that the evidence was inadequate to establish any common issue. Indeed, his Honour's interim conclusion at [51], set out at [36] above, indicates that his Honour accepted that there were common issues. 56 Furthermore, when he used the word "commonality" in par [88] it is not clear that he was applying the different formulation in r 7.4(1)(a)(iii), that is, "a substantial common issue of law or fact". Rather his Honour may have been referring to the full range of issues which he had identified under the heading "Commonality" at [49] of his judgment - set out at [36] above - which encompassed "a common interest, a common grievance, a common source of rights". 57 In my opinion the submissions on behalf of the appellant that his Honour had made a finding to the effect that there was no "substantial common issue of law or fact" within r 7.4(1)(a)(iii) should be rejected. His Honour was not, in my opinion, addressing r 7.4 at all. He was dealing with the application to amend. 58 Notwithstanding the terminology in [88] of his Honour's reasons, there was no finding by his Honour that there was no substantial common issue of law or fact. The focus of his Honour's reasoning is not on the existence of such an issue, but on the scope and significance of other issues for the purpose of granting leave to amend. This reasoning is equally applicable to the exercise of the discretion under r 7.4(2). In that regard, albeit not with regard to r 7.4(1)(a), the fact that certain "claims" made were conceded, was a relevant factor. 59 The appellant's case with respect to r 7.4(1)(a)(iii) should be rejected.

[45]

The Rule 7.4(2) Issue 60 It was common ground that the exercise of the discretion to otherwise order under r 7.4(2) was a discretionary judgment to which the well-known line of authority based on House v The King (1936) 55 CLR 499 at 505 applied. 61 I refer to my observations in this respect from Vines v Australian Securities and Investments Commission [2007] NSWCA 126; (2007) 63 ACSR 505 at [10]-[13], where I set out the subsequent elaboration of the relevant principles by the High Court in Lovell v Lovell (1950) 81 CLR 513 and Australian Coal and Shale Employees' Federation v Commonwealth (1953) 94 CLR 621. 62 In the latter case, Kitto J referred to his analysis in the former and added at 627: " … the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance: House v The King .'" 63 As Young CJ in Eq stated, it is necessary to have regard to the overriding sections in the Civil Procedure Act 2005 which, relevantly, provide: "56(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or any such rule. … 57(1) For the purpose of furthering the overriding purpose referred to in s 56(1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of a proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1)." 64 The power conferred upon the Court by UCPR r 7.4(2) falls within s 56(2) and s 57(2). 65 The respondent submitted that the appellant had identified no error of the relevant kind in the exercise of the discretion under r 7.4(2). The principal thrust of the respondent's submission was to emphasise the specific manner in which his Honour expressed his ultimate conclusion in par [123] as set out at [39] above. As indicated, under his Honour's final heading - "The result of this application" - his Honour stated that the proceedings should not continue "because of the lack of commonality of representation and reliance". Mr R G Bain QC, who appeared for the respondent, submitted that this was the true ratio of his Honour's judgment and that his Honour was entitled to regard as decisive the evidence of the disparate circumstances which surrounded the making of each alleged misleading or deceptive representation and other aspects of this cause of action. 66 With respect to that section of the judgment under the subheading "The concept of limited representative action", Mr Bain QC submitted that this did not form part of the reasoning which gave rise to his Honour's determination at [123] that the proceedings should not continue as a representative action. 67 I am not able to accept this contention. As I have noted above, his Honour dealt only with the application to amend. It was the parties who accepted that the inevitable result of his Honour's reasons was that they should consent to an order under r 7.4(2). There is no proper basis for isolating any part of his Honour's reasons as not relevant to the r 7.4(2) issue. 68 In any event nothing, in my opinion, turns on this matter. When his Honour came to express his conclusion on the final order at [123] he had determined that he would not permit the amendment to seek the declarations to which I have referred and to add some 30 persons to Schedule A. His Honour's refusal of the application to amend is itself subject to the approach identified in House v The King. 69 A challenge to the exercise of the discretion not to grant leave to amend would raise the same kinds of issues that arise in this Court on the assumption, which the parties both make in this appeal, that his Honour exercised the power to otherwise order under r 7.4(2). (The principal difference is who bore the onus.) His Honour's reasoning was that he should not permit the amendment because the proceedings were not appropriate, even as proposed to be amended, to proceed as a representative action. 70 The parties have, in the Orders which they agreed his Honour should make, implicitly accepted that it would have been a waste of time to ask his Honour to expressly address the r 7.4(2) issue. That was a sensible course which this Court should accept. 71 Although, in form, it may have been appropriate to address the issue in terms of an appeal from his Honour's refusal to permit the amendment, that is not how the appeal or the submissions have been structured by the parties. It would not be consistent with this Court's obligation to ensure the just, quick and cheap resolution of the real issues between the parties to proceed on any other basis. 72 The whole of his Honour's judgment falls to be reviewed on the House v The King approach, on the basis that the discretion to otherwise order under r 7.4(2) was exercised for those reasons. As I have said, there is no proper basis for inferring that any part of those reasons was not pertinent to that issue.

[46]

The Common Issues 73 As appears from the extracts of his Honour's reasons set out at [41] and [42] above, his Honour's decision was to a significant degree influenced by a range of matters that were not common to proposed group members. Clearly this was a relevant consideration. The principal thrust of the appellant's contention is that his Honour failed to consider, or failed to give appropriate weight to, the range of matters which were common. 74 The appellant correctly submits that few of the common issues are referred to in the judgment. It is unnecessary to consider all of the matters which the appellant asserts were common issues that remained in contest. In my opinion, his Honour did fail to take one such matter into account. I am also of the opinion, to adopt the language of Kitto J quoted at [64] above, that his Honour failed "to give weight or sufficient weight to relevant considerations" (Australian Coal and Shale Employee's Federation supra at 627) in other respects. 75 A relevant, indeed central, consideration which, in my opinion, his Honour failed to take into account arose on the Product Disclosure Issue. His Honour's judgment suggests that his Honour proceeded on the basis that the concessions made on the part of the respondent were such as to remove all aspects of that issue from contention. That is challenged on appeal. 76 I note that his Honour said: "[33] It is alleged that, if a product disclosure statement had been issued in accordance with the Corporations Act , it would have properly disclosed risks associated with holding promissory notes, including the fact that interests were being acquired by the proposed investors in an unregistered managed investment scheme which was liable to be wound up." 77 It does not appear that his Honour's reference to the content of a Product Disclosure Statement played any further role in his Honour's judgment. This was of sufficient significance to have required express consideration. 78 With respect to the Product Disclosure Issue, Mr Hutley SC emphasised that the content of any Product Disclosure Statement had to be determined at trial and that this was an issue common to all the cases. He also submitted that the concession with respect to the Managed Investment Scheme Issue meant that the investment was tainted with illegality, which fact would have to be disclosed in the Disclosure Statement. He submitted that, on this basis, the proceedings on reliance and damages may prove to be in a narrow compass and, accordingly, that this operated in favour of a single representative trial. 79 Mr Bain QC confirmed that the content of the Product Disclosure Statement remained in issue. 80 The particulars in the pleading refer to the content of such a Statement in general terms: "24. A proper Product Disclosure Statement of the kind that the Defendant and/or its agents were required to give to the Plaintiff and group members should have contained, inter alia: (a) information about any significant risks (including the matters referred to in the particulars to paragraphs 15-16 above) associated with holding promissory notes in Ann Street Mezzanine Pty Ltd (in liq) (pursuant to s 1013D(c) of the Corporations Act); and (b) information that might reasonably be expected to have a material influence on the decision of a reasonable person, as a retail client, whether to acquire the promissory notes in Ann Street Mezzanine Pty Ltd (in liq) (pursuant to 1013E of the Corporations Act), including the matters referred to in the particulars to paragraphs 15-16 above." 81 Sections 1013D(1)(c) and s1013E of the Corporations Act, on which the appellant relies, require, respectively, that such a Statement provide: · "information about any significant risks associated with holding the product" and · "any other information", not specifically required, "that might reasonably be expected to have a material influence on the decision of a reasonable person as a retail client, whether to acquire the product". 82 These are objectively stated requirements. They do not depend on the particular circumstances of each plaintiff. They clearly raise a substantial common question of fact, which is in issue and which, on the particulars provided by the appellant, is unlikely to be resolved without significant contest. No suggestion was made by the respondent in this Court to the contrary. 83 The particulars in pars [15] and [16] of the pleading are extensive and it is not necessary to set them out in full. Paragraphs [15] and [16] provide particulars of breach of the alleged contravention of s 945A being the Defective Advice Issue, and are also picked up in the pleading of the Product Disclosure Issue. The original particulars were repleaded in the proposed amended statement of claim as paragraphs 25B and 25C. Amongst the particulars of what was required to be in a Product Disclosure Statement are such matters as:

[53]

(vii) that, subject to the capacity of the Westpoint Group to meet guarantees, there was a material and substantial risk that each member of the group would lose his or her entire capital investment. 84 These matters are said to be the required content of a Product Disclosure Statement and are of considerable significance. 85 In order to prove causation and damages, each member of the group may have to give evidence about the effects upon him or her of whatever it is determined to have been the required contents of the Product Disclosure Statement. However, the scope and significance of the matters in issue about the content of the statement are such that, should the appellant succeed in this respect, it appears to be unlikely that there will be much dispute on issues such as reliance and causation. I refer in particular to the express obligations identified in pars (i), (ii), (vi) and (vii). 86 In my opinion, his Honour failed to take into account this significant factual issue common to all the cases. 87 With respect to the Guarantee Representation Issue at pars [80]-[83] of his Honour's judgment - set out at [42] above - he identified what he described as a "common thread" to the effect that "most of the statements … mention … the guarantee provided by the Westpoint Group". His Honour also refers to some of the differences. The thrust of the appellant's submissions in this regard is that his Honour failed to have regard to the degree of commonality of the cases as particularised and gave excessive weight to the handful of cases to which he referred in which there may be some differences. 88 The pleading of the Guarantee Representation Issue was the subject of particulars, as proposed to be amended, in the following terms: "The representation was partly express in that the Defendant's authorised representatives informed each of the plaintiff and group members (in Statements of Advice or otherwise in writing) on or about the dates referred to in the letter from the plaintiff's solicitor to the defendant's solicitor dated 17 April 2007, Westpoint Corporation Pty Ltd and/or associated entities (the 'Westpoint Group') would provide a guarantee for the Trust's obligations on the loan and security documents". 89 The particular refers to a letter of 17 April 2007. There is a subsequent letter of 10 May 2007. Although a number of instances involve oral representations, in almost all the cases for which particulars are given, a written statement in a document variously referred to as a Statement of Advice or an Information Memorandum is said to have been provided in identical terms as follows: "In addition the Westpoint Group will provide a guarantee for the Trust's obligations under the loan and security documents …" 90 No concession was proffered to his Honour in this respect. The statements are not admitted on the pleadings, although the defence was filed prior to the provision of the particulars. Nevertheless, a substantial common issue of fact arises because of the identical nature of the statements in written form. This had its origin, it appears, in Westpoint's Information Memorandum which PIS's representatives adopted and conveyed. Although his Honour noted the appellant's submission on this issue [57], it played no role in his Honour's subsequent analysis. 91 The identical nature of the written expression of the representation goes beyond what his Honour identified at [83] of his judgment as a "common thread" of a "mention" of the guarantee. This is not a case of different verbal expressions being uttered to the same effect by a number of different representatives of the respondent. In most cases the representation was express and in writing. The very identity of the language in most cases indicates that what the representations had in common, both in terms of the circumstances in which they were made and in their content, was an issue in the guarantee representation case. Indeed, each such representation could well be admissible in every other case as similar fact evidence. 92 As the appellant submitted, the position is analogous to the position of investors who subscribe to a prospectus. The scope for divergence in the respective cases of each group member will, as a practical matter in the conduct of the litigation, be significantly reduced in such a context. 93 With respect to the Guarantee Representation Issue, it is also significant that the pleading to the effect that the representation was misleading or deceptive remains in issue and no concession has been made in this respect. 94 Paragraph [18], as it appears in both the original and the proposed amended statement of claim, highlights the extent to which common issues will arise in all cases on the question of whether the representation was misleading or deceptive. It states: "[18] In contravention of ss 947C(2)(b), 947C(3) and 953A(1)(b)(ii) of the Corporations Act and/or s 12DB(1)(g) of the ASIC Act and/or s 53(g) of the Trade Practices Act the guarantee representation was misleading or deceptive in that: (a) the guarantor/s within the Westpoint Group did not have the ability or capacity to meet the obligations of Ann Street Brisbane Pty Ltd towards Ann Street Mezzanine Pty Ltd; which would enable or facilitate the repayment of loan monies by Ann Street Mezzanine Pty Ltd (in liq) to the Plaintiff and group members; (b) the agents omitted to disclose in the Statements of Advice and otherwise, in circumstances in which the Plaintiff and group members would reasonably require disclosure for the purpose of deciding whether to act on the agent's advice as a retail client, that they: i had not seen any written guarantee; ii did not know the identity of the guarantor or guarantors; iii were not aware of the terms of the guarantee; iv had not investigated the financial position of the guarantor or guarantors and its, or their, ability to satisfy its or their obligations under any guarantee; and/or v were merely relying upon and conveying to the Plaintiff and group members what they had been informed by the Westpoint Group on the subject of the guarantee without warranting the correctness of that information." 95 His Honour made no reference to these common issues of law and fact that arise with respect to these aspects of the misrepresentation case. I refer particularly to the capacity of the guarantor/s to meet their obligations and the agent's ignorance about the guarantee and the financial position of the guarantor/s. There was no suggestion that these matters would not be in dispute. They appear to me to involve common issues which are likely to require detailed factual inquiry. 96 I do not conclude that his Honour failed to have regard to these matters. However, he did fail, in my opinion, to give them weight. They were entitled to significant weight. As in the case of the content of the Product Disclosure Statement the importance of the allegedly misleading or deceptive features of the representation is, if accepted, likely as a practical matter to reduce the salience of issues of reliance and damages in the conduct of the individual cases.

[54]

The Nature of the Representative Action 97 As appears from the extract from his Honour's reasons set out at [44] above, his Honour took into account the fact that what was proposed was an "opt in" action rather than an "opt out" action, as a matter which weighed in the balance against these proceedings continuing as representative proceedings. 98 In this respect, in my opinion, his Honour erred. I do not agree with his Honour that common law jurisdictions generally prefer the "opt out approach". There are arguments in favour of both approaches and the discretion under r 7.4(2) should not be exercised on the basis that one or other of the approaches is to be preferred. 99 As the High Court said with respect to the Federal Court scheme in Wong v Silkfield Pty Ltd [1999] HCA 48; (1999) 199 CLR 255 at [11]-[12]: "Like other provisions conferring jurisdiction upon or granting powers to a court, Part IVA is not to be read by making implications or imposing limitations not found in the words used; this is so even if the evident purpose of the statute is to displace generally understood procedures." 100 Another judge of the Equity Division of this Court, Justice Bryson, in Shepherd v Australia & New Zealand Banking Group Ltd (1996) 20 ACSR 81 at 99-101 indicated that he preferred the opposite assumption as to the exercise of the discretion. Albeit in obiter comments, his Honour said at 100-101: "The court should only decide that some person who has not clearly stated his position should be involved in proceedings where it is impractical to obtain a decision from that person for some reason such as minority or incapacity, or where there is an overwhelming probability that such a person would wish to be involved. If it is possible to consult them, the court should not make any paternalistic assumption about its capacity to decide on behalf of others that proceedings are to be brought on their behalf. I would think there would be few occasions when what was referred to as an 'opt out' notice would be appropriate. Either the circumstances show that a person's actual decision is impossible to obtain or it is so obvious what it would be that it need not be obtained, or that a person's actual decision should be obtained." 101 The last two sentences of this passage were quoted without disapproval in the judgment of Justice Mason in Fostif Pty Ltd v Campbell's Cash & Carry Pty Ltd [2005] NSWCA 83; (2005) 63 NSWLR 203 at [283]. In this respect both Sheller and Hodgson JJA agreed. This Court approved an "opt in" scheme in that case. (See esp at [282]-[288].) 102 It was arguable that the provisions of Pt IVA of the Federal Court of Australia Act did indicate such a preference for an "opt out" procedure, based on provisions in that Part that are not replicated in r 7.4 of the UCPR and the legislative history. That issue has been resolved for purposes of the Federal Court in the joint judgment in Multiplex supra. In my opinion, the position under the New South Wales rules is, if anything, even clearer. There is no indication in the rules that the discretion under r 7.4(2) is to be constrained by a preference for one system over another. 103 The contrast between the general provision in r 7.4, and other more detailed provisions for "class actions" in other jurisdictions, invokes the observations of Toohey and Gaudron JJ in Carnie at 422: " … it is true that r 13 lacks the detail of some other rules of court. But there is not reason to think that the Supreme Court of New South Wales lacks the authority to give directions as to such matters as service, notice and the conduct of proceedings which would enable it to monitor and finally to determine the action with justice to all concerned. The simplicity of the rule is also one of its strengths, allowing it to be treated as a flexible rule of convenience in the administration of justice and applied 'to the exigencies of modern life as occasion requires'." 104 In my opinion, the approach adopted by Young CJ in Eq impermissibly restricts the element of flexibility in r 7.4. 105 No doubt there are circumstances in which an "opt out" scheme is preferable, however, to apply the general approach of Mason CJ, Deane and Dawson JJ in Carnie at 404 that does not "provide a sufficient reason for narrowing the scope of the operation of the rule … without giving effect to the purpose of the rule in facilitating the administration of justice". 106 Although there is much common ground between the Federal Court scheme and that of this Court, notably in the new form of r 7.4(1), it is always necessary to focus on the particular provisions to be applied. 107 As the joint judgment of Gummow, Hayne and Crennan JJ stated in Campbell's Cash & Carry v Fostif Pty Ltd [2006] HCA 41; (2006) 229 CLR 386 at [40]: "In the submissions, the parties tended to speak of 'class actions' as if there were a single, distinct kind of proceedings available by that name. However, the rules governing representative or group proceedings vary greatly from court to court. Two things of present significance follow from this. The first is that close attention must be given to the particular Rules of the Supreme Court upon which this litigation turns. The second is that the outcome of the present proceedings with respect to those Rules is not to be taken necessarily as indicating that there would have been the same outcome in proceedings under the rules of other courts."

[55]

(See also at [151] per Kirby J, and Carnie supra at 420 per Toohey and Gaudron JJ.) 108 As quoted at [46] above, Young CJ in Eq said at [105], in the context of determining that the "opt out" approach should be preferred, that "I will follow the earlier more orthodox approach of Stone J" in preference to the approach of Finkelstein J. If applicable to the New South Wales scheme, this Court would follow the Full Federal Court in Multiplex supra, where French, Lindgren and Jacobsen JJ each approved the approach of Finkelstein J. However, in this respect the Federal Court scheme is not the same as that under the UCPR and, in my opinion, Young CJ in Eq erred in regarding the reasoning of Stone J in Dorajay as applicable. 109 It is not necessary to set out her Honour's reasoning at length. It is sufficient to note that her reasoning turns on a detailed analysis of the particular legislation with emphasis upon sections which have no equivalence in r 7.4 as amended. Justice Stone's reasoning turned on the fact that s 33J made express provision for an "opt out" mechanism. 110 Her Honour also relied on a range of sections that have no equivalent in r 7.4 of the UCPR, when she said: "[112] The opt out procedure finds expression in a number of provisions of the Act including that: · with exceptions not presently relevant, the consent of a person to be a group member is not required; s 33E; · the group members must be described but do not have to be named; s 33H; · the Court must fix a date by which a group member must opt out of the proceeding; s 33J; · group members must be notified of the commencement of the proceeding and of their right to opt out by the date fixed by the Court; s 33X; · a judgment given in a representative proceeding must describe or otherwise identify the group members who will be affected by it and will bind all those persons other than those who have opted out of the proceeding; s 33ZB; · that, with limited exceptions, the Court must not make an award of costs against a group member; s 43(1A)." 111 Her Honour also referred to the legislative history, including the Report of the Australian Law Reform Commission and the Second Reading Speech, to conclude that "Parliament made a deliberate policy choice in adopting the opt-out procedure" [110] with the result that "a decision to apply an opt in procedure can only be made by the legislature" and that "the requirement that group members opt in to the proceeding [is] inconsistent with the terms and policy of Pt IVA" [125]. 112 This analysis is not applicable to r 7.4. In my opinion, Young CJ in Eq erred in suggesting that the reasoning of Justice Stone was applicable. 113 Furthermore, the judgments in Multiplex rejected her Honour's analysis. They did so also on the basis of statutory interpretation. Some aspects of the reasoning are of assistance, by way of analogy, with respect to r 7.4 114 Justice French directed attention to s 33N, which section, unlike the unfettered discretion in r 7.4(2) to "otherwise order", identifies specific matters culminating in an analogous "otherwise inappropriate" broadly stated discretion. His Honour said: "[1] … The Court is given a discretion under s 33N(1)(d) to order that a proceeding no longer continue under Pt IVA of the Federal Court of Australia Act 1976 (Cth) where it is satisfied that it is in the interests of justice to do so because ' … it is otherwise inappropriate that the claims be pursued by means of a representative proceeding'. The broad evaluative judgment permitted by the term 'otherwise inappropriate' is not, in my opinion a charter to introduce a quasi legislative rule effectively excluding from representative proceedings groups defined by reference to accession to an agreement with a litigation funder." 115 The approach of Young CJ in Eq in the present case could also be characterised as a "quasi legislative rule" qualifying "a broad evaluative judgment". (See also at [120] and [138] per Jacobson J.) 116 Furthermore, both Jacobson J, with whom French J agreed, and Lindgren J, drew attention to s 33C(1) of the Federal Court of Australia Act to the fact that the person instigating proceedings does so "as representing some or all of them". The equivalent phrase in r 7.4(2) is "as representing one or more of them". The same approach should be adopted. 117 As Lindgren J said, these words: "[10] … show positively an intention that there was to be no right of complaint merely because some persons falling within paras (a), (b) and (c) of s 33C(1) had been omitted from the group as defined." 118 As Jacobson J put it: "[111] These words expressly permit the representative party to commence a proceeding on behalf of less than all of the potential members of the group …" 119 His Honour concluded with respect to the question whether there were grounds for making an order under s 33N(1)(c) or (d): "[123] In my view, the definition of the group is one of the matters to which the Court can look in determining those questions. However, the mere fact that the group does not include the entirety of the class of persons with claims against the respondent cannot provide an answer to the question. This follows from what I have said about s 33C(1)." 120 In my opinion, Young CJ in Eq erred in proceeding on the basis that there was a general preference for an "opt out" procedure under the rules of this Court. The text of the rule, specifically the power to "otherwise order" under r 7.4(2), confers a broadly expressed, relevantly unfettered and unguided discretion, which should not be confined by a broad presumption of that character. 121 Furthermore, it appears to me that his Honour erred in another respect in this regard. The party and the solicitors and litigation funder involved had undertaken the task of communicating with all persons who may have an interest in joining in the proceedings on the basis of the terms which the litigation funder required. There is nothing to suggest that an "opt out" procedure is a practical option in the present circumstances. The choice, as Young CJ in Eq expressly contemplated, is between the present proceedings and an array of individual proceedings by each of the persons affected, including all those who have in fact consented to the terms required by the litigation funder. 122 The nature of the proceedings as either an "opt out" or an "opt in" proceedings may be a relevant consideration in the exercise of the discretion under r 7.4(2) or, the exercise of the discretion to grant the amendment sought by the appellant. However, each approach has benefits and disadvantages. Many of the cases involved representative proceedings that had been instituted before the relevant parties, or at least the full range of those parties, has been contacted with a view to participating in any proceeding. That is not the case here. 123 As shown in the persons identified in Schedule A in the original proceedings, as expanded in the proposed amended Schedule A, a systematic effort had already been made to involve relevant persons in the proceedings. In such a context it is not, in my opinion, pertinent to the exercise of the discretion under r 7.4(2) to proceed on the basis of a general preference for an "opt out" scheme. 124 Where, as here, there is no basis for concluding that any person is prepared to institute representative proceedings on an "opt out" basis, the issue of whether or not one, rather than the other, form of procedure is preferable is not a consideration relevant to the exercise of the discretion.

[56]

Access to Justice 125 As appears from par [113] of his Honour's judgment set out at [48] above, his Honour contemplated the possibility of some cases being conducted as test cases for a large number of individual proceedings, perhaps with a separate question being posed to decide common questions of law. His Honour indicated that one of the "drawbacks" of this approach was "the probability of no litigation funder being willing to back the proceedings". 126 In this regard, in my opinion, his Honour failed to give weight to the significant access to justice issue that arises in this regard. In the absence of a litigation funder it is likely that most of the proceedings his Honour was considering would not be instigated at all. 127 In Fostif in this Court at [285] Mason P, with whom Sheller and Hodgson JJA relevantly agreed, emphasised that his Honour's earlier remarks on the subject of benefits to access to justice of funded litigation were pertinent to his Honour's rejection of the criticism made of the "opt in" procedure in that case. 128 His Honour had in mind his observations at [90]-[103], perhaps particularly his quotation at [101] from Lord Woolf's report on Access to Justice which Mason P endorsed as "reflective of goals consonant with the Overriding Purpose Rule", now found in the Civil Procedure Act 2005, to the effect that one of the objectives to be served by procedure in civil matters is: "To provide access to justice where large numbers of people have been affected by another's conduct, but individual loss is so small that it makes an individual action economically unviable." 129 In my opinion, that appears to be the position in the present case. Of the 49 investors proposed to be represented on the amended Schedule A, 17 have only invested the minimum amount of $50,000. A further ten have invested amounts in the range of $55,000 to $80,000. Thereafter the only significant number is 11 in the range of $100,000 to $130,000. There are three at $150,000, four at $200,000, one at $250,000, two at $300,000 and one at $550,000. 130 On these figures the majority of the proposed group members would, in my opinion, find great difficulty in justifying the risks of separate litigation. 131 This was a matter entitled to significant weight in the determination of the issue before his Honour and before this Court. In my opinion, his Honour failed to give this matter weight.

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