• Lawyers in Sydney
• Lawyers in Melbourne
• Lawyers in Brisbane
• Lawyers in Perth
• Family lawyers
• Employment lawyers
• Criminal lawyers
• Wills and estates lawyers
• Find a lawyer

LEE J: 1 This is an application made by representative applicants in two class actions pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) (Act). The two representative proceedings relate to the sale of new residential units in the Australian Capital Territory and will be referred to below as the Altitude proceeding (NSD 1417 of 2017) and the Manhattan on the Park proceeding (NSD 1192 of 2021). 2 The principled approach in considering an application for a proposed discontinuance has been the subject of recent discussion by Murphy J in Turner v TESA Mining (NSW) Pty Ltd (No 2) [2022] FCA 435 (at [6]-[10]). At that time, his Honour summarised two approaches to what is described as the "test" for determining such applications. 3 The first test requires the Court to determine whether discontinuance is fair and reasonable and has been undertaken in the interests of the group members as a whole: see Mercedes Holdings Pty Ltd v Waters (No 1) [2010] FCA 124; (2010) 77 ACSR 265 (at 267-268 [9]-[10] per Perram J). The second, supposedly slightly less strict approach, requires determination of whether discontinuance would be unfair or unreasonable or adverse to the interests of group members: see Laine v Thiess Pty Ltd [2016] VSC 689 (at [34] per Dixon J). In Turner (at [10]), Murphy J considered that, at least in the context of a proposed discontinuance where the practical effect will be to return group members to the position they were in before the commencement of the class action, the test in Laine was appropriate. 4 Of course, the well-known approach by the Court on a s 33V application, referred to in innumerable authorities, is whether the proposed resolution of the group-members' claims occasioned by the settlement is fair and reasonable and in the interests of group members. Like some other aspects of Pt IVA proceedings, it seems to me that it might be thought that there is a certain over-complication that has arisen in relation to the issue of the "test". 5 Ultimately, of course, the words "fair and reasonable" are words of indeterminate reference that take their colour and content from all of the surrounding circumstances. Similarly, what could be described as being in the interests of group members is a conception informed by all of the relevant circumstances. When the Court is considering a discontinuance, it seems to me that there is no real difference between considering whether the settlement is fair and reasonable (and, hence, whether the discontinuance is in the interests of group members in the particular circumstances), or whether discontinuance would be unfair or unreasonable or adverse to the interests of group members. 6 It seems to me a discontinuance that is not in the interests of group members takes on the meaning of one that has been done in such a way as to prejudice adversely the position of group members in some sort of unfair or unreasonable way. In any event, assuming there is a different test, I agree with Murphy J's preference for its accurate expression, and the proposed discontinuance of each of the proceedings amply satisfies it. 7 I will deal first with the Altitude proceeding. There is no need for me to return to the circumstances of that case. It is sufficient to note that the applicant, Mrs Susan Lloyd, advanced restitutionary and statutory claims against the first respondent, Belconnen Lakeview Pty Limited (Belconnen). Before me, Mrs Lloyd was successful in establishing that Belconnen had engaged in misleading and deceptive conduct and that she was entitled to statutory compensation, but her restitutionary claim failed: see Lloyd v Belconnen Lakeview Pty Ltd [2019] FCA 2177. 8 The proceeding then went to a Full Court. The Full Court held that the relevant draft contract made a "plainly misleading" representation of opinion and, hence, there was contravening conduct which, in appropriate circumstances, provided someone had suffered loss and damage by reason of that contravening conduct, could sound in a claim for statutory compensation. The Full Court held that Mrs Lloyd did not lose a valuable opportunity to renegotiate a plainly misleading contract after it had been entered into, finding that my conclusion to the contrary sat uncomfortably with my additional finding that if the purchaser had known the true position before signing the contract, it would have made no difference to her in entering into the contract: see Belconnen Lakeview Pty Ltd v Lloyd [2021] FCAFC 187. 9 Accordingly, what was left, following an unsuccessful application for special leave in relation to the Full Court's decision, was a series of individual claims for statutory compensation that were all fact and evidence dependent. It may be that some group members would be entitled to statutory compensation, but others (like Mrs Lloyd on the findings of the Full Court) would not be. The difficulty is that such a miscellany of individual claims, where Belconnen appears to be intent on defending those claims, is not an economic proposition from the point of view of the funder of these proceedings. 10 In my view, the funder has done everything it could reasonably be expected to do to advance the claims of both the representative applicants and group members, and it is clearly open to it to take the commercial decision it has taken. However, this leaves the position of the group members who may wish to pursue their individual claims. On 16 May 2022, I made orders providing a notice to group members that was in the terms set out in Annexure A to these reasons. 11 As can be seen from the above, orders are sought by the applicant, and not opposed by the first respondent, proposing a condition on the approval of the discontinuance in the same terms as that which commended itself to Murphy J in Turner v TESA. I need to say no more concerning the sense of such a condition being imposed on the settlement other than noting that I agree with what Murphy J indicated in his Honour's reasons (at [11]-[35]). 12 In all the circumstances, I consider the proposed discontinuance is fair and reasonable and in the interests of group members (in the sense that they have now received adequate notice of the discontinuance and it will be up to them to take any further steps to pursue any claim they have). Put another way, I do not consider the discontinuance will be unfair, or unreasonable or adverse to the interests of group members in all the circumstances. 13 I should not pass from this without noting the four principal reasons counsel for Mrs Lloyd, Mr Colquhoun, pointed to in his helpful written submissions as commending discontinuance. These were: (1) no objection or other proposal by group members has been provided; (2) the funder is unwilling to provide ongoing litigation funding; (3) the group-members' claims are not highly individualised; and (4) the group members are still able to prosecute their individual claims if they so wish. 14 Essentially, the same process of reasoning informs my decision to approve the discontinuance in the Manhattan on the Park proceeding. Sensibly, the Manhattan on the Park proceeding was placed into a "holding pattern" pending the determination of the Altitude proceeding. Although it relates to a different development, the underlying facts are essentially the same. The reasons I have given in relation to the settlement of the Altitude proceeding apply mutatis mutandis in relation to that proceeding. 15 During the case management hearing, an issue arose concerning costs in the Altitude proceeding. I had, perhaps forlornly, hoped that the orders made today would see the completion of the Court having to deal with the Altitude proceeding. I am informed, however, by senior counsel for Belconnen that a consequence of the Full Court's decision was that there are outstanding costs orders that are the subject of a lump-sum process, in the event the parties cannot agree on the costs consequences that flow from the previous orders as to costs. I had indicated my preliminary view would be to fix a rough-and-ready figure to account for the costs that had been incurred on behalf of Belconnen since the Full Court decision and indicated a figure of $5000 seemed to me to be reasonable. 16 But given a lump-sum-assessment process has already been ordered for those previous costs orders, it seems appropriate that the costs orders that I make in relation to this proceeding should form part of the same process and be conducted by the same Registrar. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee.