Consideration
13 Clearly, the purpose for which Pt IVA of the Act was created would be frustrated if an applicant, being a representative party, in a representative proceeding were able to settle his, her or its own claim without that having any bearing on the claims of members of the group. The respondents to a class action would gain no information with which to negotiate to provide a fund that would be capable of addressing claims of members of the group other than the representative party or those who had already communicated information about their claims to those acting on behalf of the applicant or respondent that could be used in negotiations.
14 These considerations have led a number of judges to make orders at an appropriate stage of group proceedings with a view to eliciting from group members sufficient information to enable respondents to engage fruitfully in settlement discussions that could provide a sufficient fund to be available to meet all of the claims out of an agreed settlement or dispute resolution process.
15 In Matthews v SPI Electricity Pty Limited (Ruling No 13) (2013) 39 VR 255 J Forrest J extensively reviewed the authorities in this Court and other courts that were governed by a legislative scheme for the conduct of representative proceedings similar to those in Pt IVA of the Federal Court of Australia Act. I have drawn on what he said in what follows.
16 One feature of Pt IVA is that it enables the Court to determine the issues of law or fact that are common to the claims of the group members. Such a determination entails that persons, other than the actual parties to the proceedings in respect of whom the Court's judgment has or will determine any rights or liabilities, will have authoritative and binding answers that determine those common issues. After the representative party's claim is decided and the Court has answered those common issues the group members are then free to negotiate or litigate about their particular circumstances. Often, once a court has decided the representative party's claim and answered the common issues, the Court or parties establish a dispute resolution process (e.g. under s 33Q) that can take account of the particular circumstances affecting each of the other group members in their relationships to the respondents having regard to the Court's findings under ss 33H(1) and 33ZB or their analogues.
17 Similarly, if the parties to representative proceedings seek to explore alternate dispute resolution processes, such as mediation or settlement discussions, prior to the hearing of the representative party's case, ordinarily, they will need information about the identity, and nature of the claims, of members of the group. That information is necessary so that the respondent(s) can deal meaningfully with, and know the size of, the potential liability or liabilities that the answers to the common questions of law or fact may generate against them: cf: Matthews 39 VR at 274 [79]; Farey v National Australia Bank Limited [2014] FCA 1242 at [13] per Jacobson J; Inabu Pty Limited v Leighton Holding Limited [2014] FCA 622 at [21] per Jacobson J.
18 Although not much has happened in these proceedings, in the way of pleadings, other than the filing of the originating application and statement of claim, the common issues of law and fact are likely to have been settled to a large extent by the previous proceedings before Jagot J and the Full Court. I infer that those answers are likely to enable the parties to have a sufficient understanding of how persons claiming to be entitled as a group member might be able to establish a claim and what its quantum may be, so that meaningful settlement discussions can take place. In the circumstances of these proceedings, the fact that little has happened in the way of actual pleadings does not mean that the parties are not in a position, realistically, to consider the various potential claims which all of the group members might have.
19 A crucial element in the scheme of Pt IVA of the Act is s 33J(1). That gives group members a right to opt out of the representative proceedings, so that, if they so wish, they can bring their own separate proceedings or to take no part in the determination of what would otherwise be common issues of law or fact that, pursuant to s 33ZB, would bind them in the future once the representative party's claims have been resolved by a judicial determination.
20 However, until judgment or an earlier order, group members may be passive in the sense that they need take no positive step in the prosecution of the proceeding, to gain whatever benefit a determination of them might bring, as explained by Gaudron, Gummow and Hayne JJ in Mobil Oil Australia Pty Limited v Victoria (2002) 211 CLR 1 at 31-32 [37]-[40].
21 In Matthews 39 VR at 270-271 [54]-[57] J Forrest J considered the provisions of s 33ZG of the Supreme Court Act 1986 (Vic), which is not replicated in Pt IVA of the Federal Court of Australia Act, that conferred specific powers on the Supreme Court of Victoria, without limiting the generality of the Victorian (exact) analogue of s 33ZF in Pt IVA, to make orders directly requiring group members, or a class of group members, to take steps at any stage of a representative proceeding: M Legg and R McInnes, Annotated Class Actions Legislation, (LexisNexis, 2014), at 36.1. While his Honour acted under that specific power, I am of opinion that the Victorian s 33ZG was declaratory or elaborative of the general grant of power conferred by s 33ZF which is common to both Pt IVA and the Victorian legislative analogue.
22 Indeed in Pt IVA, s 33ZF(1) provides the Court with power, of its own motion or on application of a party, to make any order that it thinks appropriate or necessary to ensure that justice is done in the proceeding. And, s 33Q(1) also gives the Court power to make directions in relation to claims of group members where it does not appear that they will be finally determined by the common issues, and this power is also open to be exercised at any time in the proceedings.
23 The power conferred by s 33ZF(1) to make any order that the Court considers appropriate or necessary to ensure justice is done in a proceeding should not be hedged in by making implications or imposing limitations that are not found in its express words: Owners of "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 421 Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. Both Pt IVA and Pt VB of the Federal Court of Australia Act provide this Court with extensive statutory case management powers and, as French CJ, Kiefel, Bell, Gageler and Keane JJ said in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 at 323 [56] the conduct of proceedings "is firmly in the hands of the court", including in relation to the achievement, in representative proceedings under Pt IVA, of the overarching purpose of the Court's civil practice and procedure provisions, such as ss 33Q and 33ZF, to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible.
24 The subject-matter, context, scope and purpose of the Federal Court of Australia Act, including the provisions of Pt VB, reinforce a broad construction of the powers in ss 33Q(1) and 33ZF(1) to make orders that the Court thinks appropriate or necessary to ensure that justice is done in a representative proceeding: cf The Queen v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45 at 50 per Stephen, Mason, Murphy, Aickin and Wilson JJ.
25 Because the purpose of the representative proceeding is to determine, among others, the common issues of law or fact, I am of opinion that justice will be done in this proceeding by requiring group members to take one of three positive steps so as to, first, identify what claim or claims they may have against the respondents to the extent to which those persons have not done so already, or, secondly, to file an opt out notice, or, thirdly, if they choose, to do neither, but then to accept the consequence that any resolution of the proceedings that the Council and respondents may negotiate to provide a fund to meet claims of group members should not include their claim.
26 The Court's power to make orders of this nature under ss 33Q(1) and 33ZF(1) ensures that the legislative purpose for group proceedings will not be frustrated by the need for the representative party and the respondent to litigate the pleaded claims to judgment before group members could be required to come forward and deal with the consequences of the determination of the common issues of law or fact. Indeed, the legislative scheme of Pt IVA contemplates that, sometimes before, and certainly, as ss 33Z and 33ZA provide, once the common issues have been determined by judgment, group members must participate in some way in a resolution process, including by further action in the Court, within the representative proceedings.
27 These considerations reinforce a construction of s 33ZF(1) that empowers the Court to make orders prior to judgment, at least, to require group members to provide sufficient information to enable fruitful settlement negotiations or a mediation to take place at the peril of their being excluded from the results of any resolution reached, if they do not wish to reveal their hand.
28 If a settlement is reached, the Court must approve its terms under s 33V. If the justice of the case so requires, any person who had not participated in the resolution or settlement discussions or processes may be able to adduce sufficient evidence to persuade the Court to deal with the consequences for that person so that, as s 33ZF(1) provides, justice is done. I agree with J Forrest J when he said in Matthews 39 VR at 273 [76]:
Ultimately, it is a question of balance and judicial intuition. It requires a determination as to when in the course of a proceeding it is appropriate and in the interests of the group as a whole to require a step to be taken which may promote a prospective settlement as against simply letting the case proceed, perhaps interminably, without requiring group members to lift a finger - even if that course leads to disaster.
29 Jacobson J has taken a similar view that it is important that group members be given proper notice of their rights in such situations, in cases such as Farey [2014] FCA 1242 at [20] and Inabu [2014] FCA 622 at [22].
30 Both Jacobson and J Forrest JJ found that the decision of Bromberg J in Winterford v Pfizer Australia Pty Limited [2012] FCA 1199 was case specific and distinguishable. That was because, having regard to the then early stage of the proceedings, Bromberg J declined to make an order requiring group members who had not by then opted out of the proceedings, to register with the solicitors for the applicant. However, as Jacobson and J Forrest JJ noted his Honour's decision was related to the very early point in time that the proceedings had reached: see Matthews 39 VR at 265-266; Inabu [2014] FCA 622 at [19]-[20]; Farey [2014] FCA 1242 at [15]-[16]. The position that confronted Bromberg J is unlike the circumstances of the present case.