Unregistered group members
63 A question arises concerning the position of the UGMs, ie group members who have not opted out but have not registered. It is intended that they be bound to the settlement including the releases but will not now be able to prove under the scheme. Do I have power to make orders to give effect to such an arrangement including the bar of their claims against Billabong and its related parties?
64 At one level it may be said that I need not consider this aspect. Murphy J made orders on 22 September 2015 which stated in orders 10 and 11 the following:
10. Pursuant to s 33ZF of the Act, any group member who:
(a) wishes to opt-out of this proceeding must, before the Class Deadline, deliver an opt-out form to the Victorian District Registry of the Federal Court of Australia; or
(b) neither opts out nor registers as a group member on or before the Class Deadline shall remain a group member for the purposes of any judgment or settlement but shall be barred from making any claim against the Respondent in respect of or relating to the subject matter of this proceeding, including participating in any form of compensation or otherwise benefiting from any relief that might be ordered or agreed.
11. Any group member wishing [to] seek a variation of Order 10(b) must deliver to the Applicant's solicitors, by no later than the Class Deadline, written notice of the variation sought and a statement of the reasons for seeking the variation, and the solicitors shall forthwith notify the Respondent and the Court of the notice and the reasons.
65 On one view I can leave such orders in place and assume that relevant factors justifying such orders were considered at that time. Alternatively, I can reconsider the matter. In my view, given the powers that I am exercising under s 33V(1) and generally under Part IVA, I propose to reconsider the matter given the finality, in a substantive sense, that attends any s 33V(1) approval. Paragraphs 1 to 3 of the orders that I propose to make implicitly proceed on the foundation that Murphy J's orders of 22 September 2015 concerning the bars applicable to UGMs are operative and effective. Further, I would also note that Murphy J's orders were only directed to claims against Billabong but not claims against related parties and hence my orders will, in effect, operate as a broader bar against the UGMs.
66 There are a number of issues to consider.
67 First, I consider that the power contained in s 33ZF(1) is sufficiently broad to encompass such a barring order, although s 33ZF(1) is not unlimited. As I said in Earglow Pty Ltd v Newcrest Mining Ltd (2015) 230 FCR 469 at [33]:
… although in a general sense s 33ZF(1) has been described as a plenary power, nevertheless it is not unlimited. It is in one sense both trite and question begging to assert that the power must be exercised judicially. But let me pass to the language of s 33ZF(1) itself. It uses the language "make any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding". Grammatically, "thinks" is to be applied distributively, so that it reads "thinks appropriate" or "thinks necessary"; there is no "is" before "necessary". But as applied distributively, "thinks appropriate" has a lower threshold than "thinks necessary". But in the composite phrase, the concept is "thinks appropriate … to ensure that justice is done in the proceeding" (emphasis added). In other words, although the words "thinks appropriate" have a lower threshold than "thinks necessary", nevertheless the relevant element of necessity in another guise is enshrined in the coupling of the words "to ensure that". In summary, the question becomes whether I think it is appropriate, to ensure that justice is done in the proceeding, to make the orders sought by Newcrest. It is not whether I think it to be merely convenient or useful per se. Section 33ZF(1) is not a licence for me to impose my own expansive case management philosophy. Rather, I must be satisfied that any order that is made satisfies the statutory test. Now I accept that s 33ZF(1) is a very wide power and ought not to be construed narrowly (McMullin v ICI Australia Operations Pty Ltd (1998) 84 FCR 1 at 4 and Owners of Shin Kobe Maru v Empire Shipping Company Inc (1994) 181 CLR 404 at 421). Nevertheless, any exercise of power has to fit within the statutory formulation.
68 Second, it is in the interests of justice and the group members generally that such a barring order is made. The orders affecting the UGMs have underpinned the settlement. Absent such orders, the settlement would not have been agreed to by Billabong. That would not have been in the interests of group members as a whole. Moreover, now that the settlement is to be approved, there needs to be finality and certainty on who can participate and who is barred. Otherwise distributions under the scheme cannot be finalised. It cannot be correct to say that a UGM, who has been given adequate opportunity to participate, can come along months or years later and belatedly seek a distribution or even commence a new proceeding against Billabong. That is not conducive to efficiency, finality or justice for group members generally or indeed Billabong. Yet that would be the likely counterfactual if the bars were not in place. Those who posit that barring orders should not be made, do not posit a satisfactory alternative to address such questions.
69 Third, the orders of the Court made on 22 September 2015 and 5 August 2016 and their implementation gave more than adequate notice to the UGMs as to how their rights might be affected. They were also given adequate opportunity to challenge Murphy J's orders of 22 September 2015, which none did. Moreover, and importantly, they were given the opportunity to positively identify themselves and to register if they wanted to participate or to opt out.
70 I do assume and for all practical purposes must assume that such notification protocols were adequate (cf ss 33X and 33Y). It cannot be correct to say that because of the possibility that a UGM may not have actually received a notice that somehow this undermines the present barring arrangements concerning UGMs. After all, if an open class proceeding went to judgment and I dismissed the proceeding, it is most unlikely that I would entertain an application from a group member (who had not opted out) asserting that they should not be bound because they did not receive any opt out notification. The class action regime would be undermined by entertaining such assertions. There should be finality flowing from the judgment and its operation. By parity of reasoning, there should be finality flowing from any approved settlement and its operation. I will proceed on the basis that the current notification protocols were adequate to protect the interests of group members generally and UGMs in particular. As I have said, I do accept that the notification protocols did not refer to releases against related entities, but I repeat my earlier observations on the significance of that omission. It is hardly credible to suggest that the UGMs would have taken a different course if they had been notified of the broader releases.
71 Relatedly, I have considered whether I should allow some form of "release mechanism" for UGMs who did not receive actual notice, but I have determined not to do so. If it operated after Court approval it would have the attendant vices set out above. But as part of giving Court approval, I do consider that there is no difficulty in now allowing various UGMs who have filed notices of objection to participate as RGMs. I will order accordingly.
72 There is one final matter that I should briefly address. It is whether Murphy J's orders or my own orders impermissibly trespass on the operation of s 51(xxxi) of the Constitution being the so-called guarantee implied in the phrase "[t]he acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws". In other words, do the barring orders and releases as they apply to UGMs effect an impermissible "acquisition" otherwise than on "just terms"? Now this is not an occasion for any disquisition on constitutional theory, but it is a matter touched on by one of the notices of objection, and in any event is a matter that requires some mention albeit briefly.
73 First, it can be accepted that the claim or cause of action of a UGM is "property" as encompassed by s 51(xxxi) (Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 303 and 304 per Mason CJ, Deane and Gaudron JJ and at 311 and 312 per Brennan J).
74 Second, it can also be accepted that the barring order or orders which give effect to the releases constitute an "acquisition" as encompassed by s 51(xxxi), putting to one side for the moment the identity of the acquirer. It would be a triumph of form over substance to suggest otherwise (Georgiadis at 305). I do not propose to linger on nuanced theory concerning the difference between the extinguishment of a right and an acquisition.
75 Third, the "acquirer" is not the Commonwealth or any of its authorities or agencies, rather it is Billabong. But this does not matter in and of itself (see Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134 at 165 per Dawson J). I will proceed on the basis that the identity of the acquirer not being the Commonwealth is no impediment to the operation of s 51(xxxi) save for the qualification that the identity of the acquirer may be relevant to the purpose of the acquisition and to the question of whether it is a "purpose in respect of which the Parliament has power to make laws".
76 But once one proceeds beyond the satisfaction of these foundational elements of the argument, the so-called constitutional impediment becomes illusory.
77 First, the present context is an exercise of judicial power rather than legislative power. Now no doubt it is impermissible for the legislature to confer power on me to do indirectly what it could not do directly. But nothing in Part IVA could be so described.
78 Second and more fundamentally, I need do little more than refer again to Georgiadis at 306 and 307 per Mason CJ, Deane and Gaudron JJ where it was said:
Not every Commonwealth law with respect to the acquisition of property falls within s 51(xxxi) of the Constitution. It may be outside that paragraph because, although it effects an acquisition of property, it is a law of a kind that is clearly within some other head of legislative power. That is the case with a law imposing taxation or a law providing for the sequestration of the estate of a bankrupt. Or it may be outside s 51(xxxi) because it effects an acquisition of a kind that does not permit of just terms, as in the case of a law imposing a penalty by way of forfeiture. And, it may fall outside s 51(xxxi) because it cannot fairly be characterized as a law for the acquisition of property for a purpose in respect of which the Parliament has power to make laws. That will generally be the case with laws directed to resolving competing claims or providing for "the creation, modification, extinguishment or transfer of rights and liabilities as an incident of, or a means for enforcing, some general regulation of the conduct, rights and obligations of citizens in relationships or areas which need to be regulated in the common interest". (footnotes omitted)
79 To this may be added what was said in Nintendo in the joint reasons at 161:
The cases also establish that a law which is not directed towards the acquisition of property as such but which is concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity is unlikely to be susceptible of legitimate characterisation as a law with respect to the acquisition of property for the purposes of s 51 of the Constitution. The Act is a law of that nature. It cannot properly, either in whole or in part, be characterised as a law with respect to the acquisition of property for the purposes of that section. Its relevant character is that of a law for the adjustment and regulation of the competing claims, rights and liabilities of the designers or first makers of original circuit layouts and those who take advantage of, or benefit from, their work. Consequently, it is beyond the reach of s 51(xxxi)'s guarantee of just terms. (footnotes omitted)
80 The point is that Part IVA and the provisions that I am acting under are not properly characterised as a law with respect to the acquisition of property. At most, what I have before me are laws conferring statutory power which are "appropriate and adapted to the achievement of an objective falling within another head of power where the acquisition of property without just terms is a necessary or characteristic feature of the means prescribed" (Mutual Pools & Staff Pty Ltd v Commonwealth of Australia (1994) 179 CLR 155 at 179 per Brennan J). And even then that is to overstate the matter. In the present context, there is no such "necessary or characteristic" feature as such in any event. Generally, the laws that I am considering are not directed to the acquisition of property at all (see Mutual Pools at 170 to 172 per Mason CJ).
81 Any constitutional concern is illusory. But even if I am wrong on such matters, I would consider that "just terms" has been provided in any event by the opportunity given to the UGMs to either positively participate (register) or to opt out (pursue their own claims elsewhere). Any disadvantage that they may now be placed in is not due to the absence of "just terms" but rather because they have not availed themselves of a valuable opportunity.