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[2009] NSWSC 1322
procedural. The court determined that the first separate-question stage should include the claims of the first to fourth plaintiffs, Plummer and Bezawo Pty Ltd, and specified contribution cross-claims [16]....
9 cited instruments linked from this judgment.
This was a procedural ruling about how to organise a large case concerning a failed investment product. The judge decided which claims and contribution cross-claims should be heard first. Although the proceeding involved common allegations about misleading or deceptive conduct, the judge did not consider those allegations suitable as common questions in the initial stage because differences between investor groups could make that unfair. The ruling did not decide whether anyone had engaged in misleading or deceptive conduct or whether investors suffered recoverable loss. The parties were to consult about the exact wording of the questions to be included in the orders.
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2,427 words · generated 30/09/2026
In Oasis Fund Management Limited & Ors v ABN Amro Bank NV & Ors [2009] NSWSC 1322, Einstein J dealt with a notice of motion about the sequencing of a complex proceeding. The motion sought orders that certain questions be determined separately and before all other questions. The judgment records that the parties generally accepted that the proceedings were suitable for some form of separate-question regime, but disagreed about which issues should be put into it [1].
The proceeding concerned investments in Safety PINs, described as Principal Protected Income Notes. The notes were issued by Absolute Capital Investments Ltd, which was in liquidation, in two series: the first and larger series in 2003, and the second in 2004 [6]. Oasis Fund Management Limited was the current trustee and Oasis Asset Management Limited the former trustee of relevant investment arrangements. The judgment states that 311 persons invested through those arrangements. Robert Ford represented 294 investors in the 2003 notes, while Harold Manns represented 15 investors in the 2004 notes [6].
ABN Amro was involved in core transactions underlying the product and was central to its principal-protection feature. Deon Joubert was managing director of the issuer [6]. The plaintiffs claimed damages for alleged misleading or deceptive conduct under several statutory regimes, with claims also alleging that the defendants were involved in the issuer's conduct [6]. There were cross-claims between defendants and against parties associated with financial advice and distribution, including Paulwin Holdings, Paul Plummer and Richard Isachsen [7, 23, 27].
The parties proposed different ways of separating the case. The plaintiffs' proposal sought an initial determination of the trustee's case and common issues for investors, while leaving individual causation and loss issues for later if necessary [12-14]. The dispute before Einstein J was therefore not whether the case would be separated at all, but how to draw the boundary between the initial hearing and any later hearing.
The judge determined that the first stage should include the claims of the first to fourth plaintiffs, Plummer and Bezawo Pty Ltd, together with contribution cross-claims to the extent they concerned liability to specified parties [16]. Ford and Manns and cross-claims involving them also had to be included, because their claims concerned the 2003 and 2004 series respectively [17]. The alleged misleading or deceptive conduct issues were not to be litigated as common questions at the initial stage [18, 21]. The exact questions were left for party consultation and inclusion in short minutes of order [29].
Einstein J began with the established principles for separate-question orders set out in Idoport v National Australia Bank and adopted in Michael Wilson & Partners Ltd v Nicholls [2]. The discretion is to be exercised judicially, but is not otherwise fettered. The judgment identifies the court's overriding procedural purpose as facilitating the just, quick and cheap resolution of the real issues [2, 5].
The judgment explains why a separate hearing can be useful. It may resolve the whole dispute or substantially narrow it, create a strong prospect of settlement, or concern an issue clearly demarcated from the remaining issues [2]. It also sets out countervailing concerns: intertwined facts or law may mean that deciding an isolated question does not meaningfully reduce the case; common witnesses and credit issues may create difficulties; and a preliminary decision may generate an appeal or fragment the litigation [2]. The judgment cautions that separate hearings do not invariably save time or cost and should be ordered only where their contribution to a quicker and cheaper resolution can be clearly seen [2].
A particular concern in this proceeding was the challenge of identifying common questions across a large and varied group [19]. The proposed common issues included whether representations were made, whether conduct was misleading or deceptive, whether statutory provisions were contravened, and whether proportionate liability applied [8]. However, the proceeding also involved two note series, investors with different circumstances, trustee claims, representative claims and cross-claims. The judge concluded that the alleged misleading or deceptive conduct issues were not appropriate to be litigated as common questions at the initial stage [18].
The reason given was the risk of “real injustice” if differences between groups of persons were not adequately accommodated [21]. This is the central reasoning in the ruling. It was not a finding that the conduct allegations could never be decided together, nor a decision about whether any representation was misleading. It was a conclusion about the suitability of placing those issues in the first separate-question tranche.
The court also saw a need for active judicial case management. At [20], Einstein J said that it was necessary for the court to take an “interventionist role” in identifying and separating issues. The judge referred to Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd, which had described a more active role in identifying important issues capable of resolving significant parts of litigation expeditiously [20]. The court applied that approach to the task of choosing the initial issues here.
The judge's specific sequencing decision reflected the claims and parties actually involved. The first stage was to include the claims of the first four plaintiffs, Plummer and Bezawo, and contribution cross-claims relating to liability to specified parties [16]. Ford and Manns were included because their claims related to different note series, rather than being treated as a single undifferentiated investor claim [17]. This selection did not resolve the claims on their merits. It defined the intended initial scope of the proceeding.
The judgment did not announce a new substantive rule about misleading or deceptive conduct, investment products, statutory liability or damages. Its subject was procedural: whether and how questions in a complex case should be tried separately. The legal framework it states is the discretionary separate-question jurisdiction, guided by the overriding purpose of just, quick and cheap resolution [2, 5].
Before this ruling, the parties had competing proposed approaches to the first hearing, including whether the misleading or deceptive conduct case could be treated as common to the investors [13, 18, 21]. The general principles described at [2] already allowed separate determination where it would resolve or narrow controversy, encourage settlement, or isolate a clearly defined issue. Those principles also warned against separation where issues were intertwined, witnesses overlapped, or fragmentation would make the litigation less efficient.
After the ruling, the alleged misleading or deceptive conduct issues were excluded from the initial stage as common questions [18, 21]. The judge identified a different set of claims and cross-claims for first determination [16, 17]. This altered the proposed sequence in the case, not the substantive tests that would ultimately govern the pleaded statutory claims.
The judgment also emphasised a case-management approach in which the court takes an active role in selecting separate issues [20]. That statement is tied to the procedural task before the court. It should not be read, on this judgment alone, as replacing the discretionary principles already set out at [2] or as requiring separate-question orders in every representative proceeding.
The reasons refer to the purpose of representative proceedings as avoiding multiple proceedings and enabling efficient resolution of controversies where parties share an interest [3]. They also say that UCPR Part 28 provides a mechanism for resolving common issues in representative proceedings [4]. But the decision demonstrates that procedural efficiency does not mean that every allegedly common issue should automatically be placed in the first tranche. The court must still consider whether the proposed question is appropriate and fair in the case's particular structure [18-21].
At [2], the judgment says the court's power to order separate determination is discretionary and must be exercised judicially. In plain English, the court has flexibility to decide whether an issue should be tried separately, but must make that decision by applying relevant procedural considerations rather than arbitrarily.
At [2], the judgment identifies circumstances where a separate question may be useful, including where it could resolve the whole controversy or substantially narrow it. It also identifies circumstances where separate determination will rarely be appropriate, such as where factual or legal issues are intertwined. In practical terms, a preliminary hearing is useful only if it is likely to make a meaningful difference to the rest of the case and does not create more problems than it solves.
At [5], the court states that the application must be considered in light of the overriding purpose of facilitating the “just, quick and cheap resolution of the real issues”. This means that speed or cost alone is not the sole consideration. The procedure must also be just and directed to the actual matters in dispute.
At [16], Einstein J states that the claims of the first to fourth plaintiffs, Plummer and Bezawo, and specified contribution cross-claims should be determined first. This is the main description of the first-stage grouping. The wording limits the cross-claims included to those seeking contribution for liability to particular parties.
At [17], the judge says Ford and Manns had to be included because Ford dealt with the 2003 notes and Manns with the 2004 notes. Put simply, the separate-question structure needed to account for both product series and the representative claims attached to them.
At [18], the court says that the misleading or deceptive conduct matters could not appropriately be litigated as common questions at the initial separate-question stage. This is the key procedural conclusion. It is not a finding about whether the alleged conduct occurred or whether it breached any statute.
At [21], the judge explains that including those issues could lead to “real injustice” if there were differences between the groups of persons being dealt with. In plain English, a single common-question hearing might not fairly account for distinctions between groups of investors.
At [29], the judgment says the parties would have an opportunity to consult about the precise questions for the short minutes of order. This shows that the ruling set the direction and boundaries of the regime, while leaving the exact formulation to a later drafting step.
This decision is most directly relevant to procedural situations resembling the one described in the reasons: representative proceedings involving a large number of investors, more than one investment series, several corporate and individual parties, and overlapping claims and cross-claims [6-9]. It is particularly pertinent where parties propose to treat allegations as common issues but the court must consider whether differences between claimant groups make that approach unsuitable at an initial stage [18-21].
The judgment may also be relevant where a party seeks a preliminary determination as a way to reduce a large case. The court's framework directs attention to whether a proposed question will resolve or narrow the dispute, is clearly separable, and avoids unnecessary overlap with later evidence [2]. It also cautions about the risk that split hearings may create delay, expense, appeal-related fragmentation or repeated assessment of common witnesses [2].
The decision does not establish that investor claims can never be heard together, or that misleading or deceptive conduct allegations must always be excluded from common-issue proceedings. Its conclusion was expressly about the initial separate-question stage in this proceeding and the risk of differences between the particular groups [18, 21]. The judgment does not set out the full facts of each investor's circumstances or decide how those facts would affect the ultimate merits.
The ruling is also relevant to cases where the court must sequence claims involving both representative plaintiffs and individual or trustee claims. Here, the first and second plaintiffs were trustees, while Ford and Manns represented investors, and Plummer and Isachsen had roles as both advisers and investors [6, 11, 23, 27]. The court's approach was to identify the claims to include in the first stage rather than to assume that all parties and issues could be treated in the same way [16, 17, 20].
The judgment provided for this analysis is dated 2 December 2009 and contains no discussion of later decisions applying, distinguishing or reconsidering Oasis Fund Management. No claim about later judicial treatment can be made from the supplied judgment alone.
Within its own reasons, Einstein J drew on earlier authorities for the principles governing separate-question orders [2]. These included Idoport, Michael Wilson, Tallglen, CBS Productions, Rajski and other decisions addressing efficiency, severability, overlapping issues and witnesses. The judge also referred to Campbell's Cash & Carry Pty Ltd v Fostif Pty Ltd concerning representative proceedings and the efficient resolution of controversies [3], and to Integral Home Loans on the court's role in identifying important issues for separate determination [20].
Those references show the authorities on which the judgment's procedural analysis drew. They do not establish how later courts treated this particular ruling. The supplied material contains no later-case history or subsequent judicial interpretation of the decision.
The judgment did not decide the substantive allegations. Whether representations were made, whether conduct was misleading or deceptive, whether any party was liable, whether the conduct caused loss, and the amount of any loss remained unresolved in these reasons. The ruling dealt with how those issues should be sequenced, not their merits [1, 6, 18].
The precise wording of the separate questions also remained to be settled. At [29], the judge anticipated that the parties would consult after the court decided not to include the misleading or deceptive conduct cases as common issues in the initial stage. The judgment therefore gives the court's procedural direction but does not reproduce final short minutes specifying every question.
The reasons do not finally explain how the remaining investor-specific issues, including causation and damages, would be heard or whether a later hearing would be required in every instance. Nor do they determine how the court would address any overlap in evidence if witnesses were needed at more than one stage. These were matters within the broader procedural context, but not resolved by the ruling.
Finally, the judgment does not determine whether differences between investor groups would ultimately affect the substance of the misleading or deceptive conduct claims. It identifies those differences as a reason not to litigate the conduct case as a common question at the initial stage [21]. The extent and legal significance of any differences would require determination in the later proceedings, on evidence and argument not resolved by this procedural decision.
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CITATION : Oasis Fund Management Limited & Ors v ABN Amro Bank NV & Ors [2009] NSWSC 1322
JURISDICTION : Equity Division Commercial List
CATCHWORDS : Practice and procedure - Separate question orders - Principles - Complex proceedings concerning failed investment product and involving many corporate entities and 309 investors - Difficulties in identifying matters to be regarded as appropriate to be litigated as common questions as part of a separate question regime - Necessity for court to take an interventionist role in identifying separate question issues
ASIC Act 2001 (Cth) Civil Liability Act 2002 Civil Procedure Act 2005 LEGISLATION CITED : Corporations Act 2001 (Cth) Fair Trading Act 1987 (NSW) Supreme Court Rules 1970 (NSW) Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules 2005 (NSW)
Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 441 Campbell's Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386 CBS Productions Pty Ltd v O'Neill [1985] 1 NSWLR 601 Century Medical v THLD [2000] NSWSC 5 Dunstan v Simmie & Co Pty Ltd [1978] VR 699 Hadid v Australis Media Ltd (unreported, Supreme Court of NSW, 29 March 1996 per Rolfe J). Idoport v National Australia Bank (2000) NSWSC 1215 Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464 CASES CITED : Jameson v Professional Investment Services [2009] NSWCA 28 Law Society of NSW v Bruce (unreported, Supreme Court of NSW, 23 April 1996, per Rolfe J) Matrix Film Investment One Pty Ltd v Alameda Films LLC and Warner Bros Entertainment and Pictures Inc [2007] NSWSC 523 Michael Wilson & Partners Ltd v Robert Colin Nicholls & Ors [2008] NSWSC 501 O'Sullivan v Challenger Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J) Rajski v Carson (1988) 15 NSWLR 84 Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 Story of Sydney Pty Ltd v Ling (unreported, Supreme Court of NSW 15 November 1994, per Rolfe J) Tallglen v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130
Oasis Fund Mangement Limited (First Plaintiff) Oasis Asset Managment Limited (Second Plaintiff Robert Anthony Ford (Third Plaintiff) Harold Keith Manns (Fourth Plaintiff) PARTIES : ABN Amro Bank NV (First Defendant) Deon Joubert (Second Defendant) Paulwin Holdings (First Cross Defendant to Third & Fifth Cross Claim) Paul Godwin Plummer (Second Cross Defendant to Third and Fifth Cross Claim) Richard Gary Isachsen (Third Cross Defendant to Third and Fifth Cross Claim)
Mr J Lockhart SC, Ms M Nagy (Plaintiffs) COUNSEL : Mr RG McHugh SC, Mr M J Darke (First Defendants) Mr J Stoljar SC, Ms RCA Higgins (Second Defendants) Mr IR Pike (Cross Defendants to the Third & Fifth Cross Claims)
Johnson Winter & Slattery (Plaintiffs) SOLICITORS : Blake Dawson Waldron (First Defendants) Wotton & Kearney (Second Defendants) Lander & Rogers (Cross Defendants to the Third and Fifth Cross Claims)
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST
50183/08 Oasis Fund Mangement Limited & Ors v ABN Amro Bank NV & Ors JUDGMENT The notice of motion 1 There is before the Court a notice of motion for certain questions to be determined separately from and before all other questions in these proceedings. Although it is clear [and in the main] accepted that the proceedings are amenable to a separate question regime, the parties are divided as to which separate questions or issues are to be formulated. The principles which inform whether or not separate question should be ordered 2 It suffices for present purposes to refer to the general principles which were outlined in Idoport v National Australia Bank (2000) NSWSC 1215 at paragraph 7-8, most recently adopted in Michael Wilson & Partners Ltd v Robert Colin Nicholls & Ors [2008] NSWSC 501 at paragraphs 25 and following:
i. The power of the Court to order the separate determination of an issue is a discretionary power which must be exercised judicially, but cannot otherwise be fettered: Dunstan v Simmie & Co Pty Ltd [1978] VR 699 at 670 per Young CJ and Jenkinson J.
ii. In exercising the power under Part 31 , Rule 2 , the Court is now enjoined to give effect to the overriding purpose of the Supreme Court Rules ; namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings and cannot be stated in a more confined way: Part 1 , Rule 3 (1), (2) Supreme Court Rules .
iii. The Court begins with the proposition that it is ordinarily appropriate that all issues in a proceeding should be disposed of at the one time: Tallglen v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141 per Giles CJ in Comm D, Hadid v Australis Media Ltd (unreported, Supreme Court of NSW, 29 March 1996 per Rolfe J). Accordingly, it is for the party who wishes to have a question separately determined to show that it is desirable for that to occur.
iv. Without being exhaustive, the separate determination of an issue may prove to be an appropriate procedure in at least the following sets of circumstances:
(a) where the resolution of that separate issue will have the effect of resolving the entirety of the litigious controversies or of substantially narrowing the field of litigious controversy: CBS Productions Pty Ltd v O'Neill [1985] 1 NSWLR 601 at 606 per Kirby P, Dunstan v Simmie & Co Pty Ltd (supra, at 671 per Young CJ and Jenkinson J); (b) where the resolution of that separate issue carries with it a strong prospect that the parties will thereafter be able to resolve their dispute themselves and thus avoid further litigation: Tallglen v Pay TV Holdings (supra, at 141 - 142 per Giles CJ in Comm D); (c) where there is a clear demarcation between that issue and all other issues in the case, including issues going to the credit of witnesses: CBS Productions Pty Ltd v O'Neill (supra, at 606 per Kirby P), Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Rajski v Carson (1988) 15 NSWLR 84 at 88 per Kirby P and Hope JA.
v. Conversely, the separate determination of an issue will rarely be an appropriate procedure where:
(a) there are intertwined issues of fact or law between the separated question and the other questions such that the determination of the separate question will not have any substantial effect upon the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation: Law Society of NSW v Bruce (unreported, Supreme Court of NSW, 23 April 1996, per Rolfe J), Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J). (b) where there is a commonality of witnesses and issues of credit as between the separate issue and other issues in the case which will or may necessitate a ruling on the credit of one or more of the common witness, thus possibly precluding that same judicial officer from again dealing with the matters going to the credit of the common witness in accordance with the decision of the Court of Appeal in Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 441: Story of Sydney Pty Ltd v Ling (unreported, Supreme Court of NSW 15 November 1994, per Rolfe J), Century Medical v THLD [2000] NSWSC 5; (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J).
(c) there is a possibility that the resolution of the separate issue will not finally determine the issue but will merely result in an appeal from that decision in relation to that separate issue, creating a multiplicity of proceedings, interruption to the Court and undesirable fragmentation of the proceedings: Story of Sydney Pty Ltd v Ling (supra), Century Medical v THLD (supra).
vi. The experience of Courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings: Tallglen v Pay TV Pty Ltd (supra, at 142 per Giles CJ in Comm D), Parramatta Stadium Trust v Civil and Civic Pty Ltd (supra), Century Medical v THLD (supra). 3 In short the purpose of representative proceedings is to avoid the multiplicity of proceedings and facilitate the efficient determination once and for all of controversies in which parties have the same interest: Campbell's Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386. 4 The procedure for the decision of separate questions under part 28 of the UCPR provides a mechanism for giving effect to this purpose by allowing for the efficient resolution of the common issues in representative proceedings. Unless that procedure is utilised in representative proceedings of the present kind, there would be little, if any, utility in bringing such proceedings in a representative form. 5 The application for the decision of separate questions must be considered in light of the overriding purpose of the Civil Procedure Act 2005 and the UCPR, being to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s56 of the Act. The proceedings 6 A thumbnail sketch of the proceedings is as follows:
i. The plaintiffs sue in respect of their entry into a failed investment product, the Safety PINs (Principal Protected Income Notes). The Safety PINs were notes issued by Absolute Capital Investments Ltd (in liquidation) (ACIL) in two series, the first and largest in 2003 and the second in 2004.
ii. The first plaintiff (Oasis) is current Trustee and the second plaintiff (OAM) was former Trustee of the Oasis Superannuation Master Trust and the Oasis Investor Director Portfolio Service, through which 311 persons invested in the Safety PINs. Oasis and OAM are collectively referred to as the Trustee.
iii. The third plaintiff, Mr Ford, represents 294 investors in the 2003 Safety PINs and the fourth plaintiff, Mr Manns, represents 15 investors in the 2004 Safety PINs (collectively, Investors). To that extent, the proceeding is brought pursuant to r 7.4 of the Uniform Civil Procedure Rules (UCPR).
iv. All but one of the Investors are natural persons. All but two were clients of Mr Plummer, who until March 2004 was a licensed dealer trading as Financial Structures (Paulwen Holdings Pty Ltd traded under that name after March 2004). Mr Isachsen was an authorised representative of Plummer. Plummer and Isachsen also invested in the 2003 Safety PINs.
v. The first defendant (Amro) was a party to the core transactions underlying the Safety PINs product in 2003 and 2004 and was central to the provision of the "Principal Protection", a critical feature of the Safety PINs product.
vi. The second defendant (Joubert) was managing director of ACIL.
vii. The plaintiffs claim damages from the defendants for loss suffered by reason of breach of the misleading or deceptive conduct provisions of the Trade Practices Act 1974 (Cth) (TPA), ASIC Act 2001 (Cth), the Corporations Act 2001 (Cth) and the Fair Trading Act 1987 (NSW) (FTA).
viii. The plaintiffs' claim centres upon information memoranda and drafts thereof issued by ACIL in connection with the 2003 and 2004 Safety PINs.
ix. The defendants are alleged to be primary contravenors and, alternatively, alleged to have been involved in ACIL's breach within the meaning of s 75B of the TPA and its analogues. 7 It is to be kept in mind that:
i. Paulwen, Plummer and Isachsen, and OAM, are cross-defendants to cross-claims brought by Amro and Joubert.
ii. The defendants have also cross-claimed against each other. 8 The final paragraph of the 'Nature of Dispute' section of the amended commercial list statement contends that the substantial common issues of law or fact to the claims of Ford and Manns and the group members are:
(a) Whether the representations were made or whether there was otherwise misleading and deceptive conduct;
(b) Whether the conduct of ABN AMRO, Joubert and/or ACIL in making, or being involved in making, the representations, or any of them, or in engaging in or being involved in misleading and deceptive conduct, constituted contraventions of section 52 TPA , section 1041H CA and/or section 12DA ASIC Act , and/or section 42 FTA ;
(c) Whether the proportionate liability provisions within TPA, Corporations Act, ASIC Act, Civil Liability Act 2002 and FTA apply; and
(d) Whether any of Paulwen Holdings Pty Ltd, OAM, ABN AMRO or ACIL are concurrent wrongdoers. 9 As will appear from these reasons there was to a large extent agreement as to certain matters appropriately categorised as common issues of law or fact, but also substantial disagreement on certain such matters. 10 The plaintiffs' amended commercial list statement purports to identify the issues likely to arise in the following terms:
i. Whether having regard to the terms of each Information Memorandum and Pre-IM Document and the extent of or lack of disclosure, there was misleading and deceptive conduct in connection with the promotion and issue of the Safety PINs.
ii. Whether ABN AMRO and Joubert engaged in or were involved in such conduct.
iii. Whether such conduct caused the losses claimed by Oasis, OAM and/or Ford and Manns and the quantum of such losses. Some unusual aspects of the manner in which the plaintiffs have framed these proceedings 11 Mr Stoljar SC appearing for the second defendant made the following observations in terms of unusual features in the way in which the plaintiff has formulated the cases which it presses:
i. the first is that the proceedings not merely a representative action in any conventional sense; in truth one has a representative action which has engrafted on to it a claim by an individual trustee and the predecessor to that trusty which immediately gives rise to procedural complexities not necessarily present in other representative actions and gives rise to the feature of the primary/secondary claim;
ii. the second somewhat curious feature about the pleading is that it is not pleaded as a representative action in the conventional sense which is sometimes done. Rather the pleading endeavours to gather up the whole group identified in the schedule to the pleading. The essential dispute at the bar table 12 The plaintiffs have essentially submitted in support of the matters to be treated with by way of the separate question as follows:
i. The Trustee case is the primary claim in the proceedings.
ii. Assuming the Trustee succeeds, the Investors will be beneficially entitled to damages awarded to the Trustee.
iii. The claims of Ford and Manns on behalf of the Investors are therefore secondary.
iv. Their loss and that of the investors will be compensable via the Trustee case and there can be no double recovery.
v. Only if for some reason the Trustee claim fails will the claims of Ford and Manns on behalf of the Investors require determination. 13 Hence the plaintiffs put forward the following analysis and proposal:
i. (a) that the initial trial of the proceedings determine finally the whole of the Trustee's claim and the issues common to the claims of the Investors (essentially, whether Amro and Joubert engaged in misleading or deceptive conduct, but not causation and damage in respect of those Investors), and all cross claims in so far as they claim contribution for liability to any of the Trustee or the Investors;
(b) that the initial trial of the proceedings determine finally also the claims of Plummer and of Bezawo Pty Ltd (a company of which Isachsen is a shareholder) in their capacity as Investors;
(c) that the individual issues pertaining to the claims of Ford and Manns and those of all Investors other than Plummer and Bezawo Pty Ltd remain to be determined, if necessary, at a later stage or stages of the proceeding.
ii. Question 1 is intended, in part, to dispose finally of the case of the Trustee and of the cross claimants insofar as each claims contribution from the Trustee (or a reduction in liability by reason of proportionate liability). As success in the Trustee case will finally dispose of the proceedings the Trustee case is 'ripe' for separate determination: CBS Productions Pty Ltd v O'Neill (1985) 1 NSWLR 601 and 606.
iii. The second question is intended to dispose of the issues common to the claims of the Investors and of the issues common to the cross claims seeking contribution for any liability to the Investors (addressed in paragraphs 2(a), (b) and (c) of Question 2). 'Logic and policy dictate that the threshhold common issues be determined first before any trial of the multiplicity of issues relating to causation and quantum concerning individual represented persons': O'Sullivan v Challenger at [15].
iv. The plaintiffs do not anticipate needing to adduce evidence from the two representative plaintiffs Mr Ford and Mr Manns (or any Investors in their capacity as Investors) in respect of these questions. The plaintiffs' case in this regard is essentially documentary. At front and centre are a small number of key documents: the Pre-IM Documents, the 2003 Information Memorandum, the Updated 2004 Safety PINs Summary and the 2004 Information Memorandum (as defined in the plaintiffs' Amended Commercial List Statement), and the representations made within. It is also anticipated that the plaintiffs will call evidence from Mr Plummer and possibly Mr Isachsen as part of the Trustee's and the Investors' cases in relation to misleading or deceptive conduct. It is for that reason that it is proposed that the whole of Mr Plummer and Mr Isachsen's own Investor cases are part of the initial hearing. That evidence will go to matters of fact common to the Investors' claims, including what documents were received by Investors and when.
v. This element of the case pleaded for the investors is, as in Jameson v Professional Investment Services [2009] NSWCA 28 , 'analogous to the position of investors who subscribe to a prospectus. The scope for divergence in the respective cases of the Investors is significantly reduced' : per Spigelman CJ at [92]. This is so notwithstanding that Investors may ultimately have to give evidence to prove causation and damages: see also comments of Spigelman CJ at [85]. Further, as in Jameson ¸ where identical, express written representations were made to group members concerning an alleged guarantee of their monies invested in debentures, ' 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' : at [96] per Spigelman CJ.
Question 2: Common issues - cross claims by Amro and Joubert against each other
vi. Sub paragraphs (b)(ii) and (c)(ii) of question 2 address the issues raised in the cross claims made by Amro and Joubert against each other that essentially replicate the plaintiffs' pleading of misleading or deceptive conduct dealt with in sub paragraphs (b)(i) and (c)(i) of question 2. For that reason, those cross claims will fail or succeed on the same evidence as on the plaintiffs' claims, and those cross claims should be determined at the same time.
Question 2: Common issues - cross claims by Amro and Joubert against OAM
vii. Paragraph (d) of Question 2 incorporates fully the questions going to liability of OAM on the cross-claims brought by Amro and Joubert, which are substantially identical.
viii. Each alleges breaches of ss 1013A and 1012B of the Corporations Act 2001 , breach of ASIC Class Order 02/94, breach of the IDPS Contract, and breach of the Trustee's duties at common law and under the relevant Trust Deeds. In addition, it is alleged that OAM, by making available copies of the Pre-IM Documents and the 2003 and/or 2004 Information Memoranda to the Investors, represented to Investors that the Information Memoranda were Product Disclosure Statements that complied with Pt 7.9 Div 2 CA or were Disclosure Documents which complied with the requirements of the IDPS Contracts, and thereby engaged in misleading or deceptive conduct.
ix. The officers of the Trustee to be called at the initial trial will be available to give evidence on both the plaintiffs' claims and on the cross claims against OAM. There appears little prospect either that an officer of the Trustee would need to be called on any subsequent hearing addressing Ford or Manns' individual cases or the cases of the Investors in respect of causation or damage, or that an Investor would need to be called in OAM's case or on the cross claims.
x. The positions of Plummer and Isachsen are unusual, because both were dealers (under the name Financial Structures) as well as Investors (Isachsen through Bezawo Pty Ltd).
xi. Documents key to the plaintiffs' case against the defendants were distributed in circulars or 'mail outs' by Financial Structures to the Investors. In addition, the extent of their involvement in the development of and their knowledge of the features of the Safety PINs is placed squarely in issue in the cross-claims by Amro and Joubert against Plummer, Isachsen and Paulwen, which are sought to be addressed in paragraph (e) of Question 2. xii. Those cross claims are in very similar terms. Each defendant alleges that Paulwen, Plummer and Isachsen engaged in misleading or deceptive conduct by conduct substantially similar to that pleaded against OAM (see par 0 above). In addition, Paulwen, Plummer and Isachsen are alleged to have owed and failed to perform a duty of care to the Investors.
xiii. Ms Hersey deposes in paragraph 4(c) of her affidavit that she anticipates that Plummer and Isachsen will be required give evidence in the Trustee's case as well as in the trial of the common issues referred to in proposed Question 2, including in respect of the cross claims against OAM. In their capacity as Investors they may ultimately need also to give evidence in respect of causation and damage. For this reason, the plaintiffs submit that it is essential that Plummer and Isachsen's individual claims as Investors should be determined by the Court at the same time as the Court determines both the Trustee's claim and the misleading or deceptive conduct case vis a vis the Investors.
xiv. It flows from this that the cross claims against Paulwen, Plummer and Isachsen should also be determined in the initial trial. It is highly likely that much or all of the evidence on those cross claims will also be documentary (communications of key documents to Investors were made by circular or mail out correspondence by Plummer or Isachsen: see paragraph 6 of the affidavit).
xv. There does remain at least a theoretical possibility that the individual issues which remain to be determined may require evidence from Plummer or Isachsen in a subsequent hearing. A discretionary factor weighing against the ordering of a separate question is where separate determination will result in significant overlap between the evidence adduced on the hearing of the separate question and at trial - especially where a witness may be called at both stages and the court may be required to assess the witnesses credit at both stages: Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 at [8] per Branson J. However, the Trustee's case cannot be determined without the evidence of Plummer and Isachsen. While it may be impossible at this stage to completely exclude the prospect of Plummer and Isachsen giving evidence at two tranches of hearing, that possibility should not prevent the Court from proceeding to make orders for the determination of the proposed Separate Questions, given the otherwise compelling case in favour of that order.
xvi. if the Trustee's case succeeds, this will resolve the entirety of the litigious controversies, which is a significant factor in favour of the plaintiffs' application: cf CBS Productions Pty Ltd v O'Neill [1985] 1 NSWLR 601 at 606 per Kirby P;
xvii. even if the plaintiffs succeed only on the question of whether there was misleading or deceptive conduct, hold a real prospect of the parties being able to resolve their dispute themselves: cf Tallglen v Pay TV Holdings (supra, at 141 - 142 per Giles CJ in Comm D);
xviii. are clearly severable from the residue non-common issues going to causation and damage suffered by the individual Investors: Matrix Film Investment One Pty Ltd v Alameda Films LLC and Warner Bros Entertainment and Pictures Inc [2007] NSWSC 523 at [16];
xix. avoid, as far as can be anticipated, the 'common witness' problem, with no chance of it arising in respect of officers of the Trustee and little present prospect in relation to Plummer, Paulwen and Isachsen; and
xx. are, realistically, the only practical way by which this Court can give effect to the beneficial purpose behind the flexible rule of convenience in UCPR r 7.4 and to the overriding purpose of the Civil Procedure Act 2005 and the UCPR to facilitate the just, quick and cheap resolution of the real issues in the proceedings. 14 The plaintiffs have contended that the cross-claims are only enlivened if there is a finding of misleading and deceptive conduct. Decision 15 In relation to the major question the subject of submissions I have come to the conclusion that the submissions of the first and second defendants of substance. 16 In short the appropriate way forward is for the separate question to be framed such that the claims of the first to fourth plaintiffs, Plummer, Bezawo Pty Ltd and each of the cross claimant's (in so far as they claim contribution for any liability to one or more of the first or second plaintiffs, Plummer, and or Bezawo Pty Ltd) be first determined. 17 There is a necessity as it seems to me to include, the claims of Ford and Manns and the cross claims which involve them. This is because as already observed, Ford deals with 2003 and Manns deals with 2004. Should the misleading and deceptive conduct case be part of the separate question order? 18 The major question of principle which was debated concerned whether the Court should include in the separate question regime, orders appropriate to determine whether material conduct in the form of the misleading and deceptive conduct case were appropriate to be regarded as common question. In my view those matters could not be regarded as appropriate to be litigated as common questions at the initial separate question stage. 19 By definition the Court has been faced with real difficulties in contending with the respective submissions in an area where so many parties may be affected by the precise determination is as to what issues will be heard. 20 But as noted earlier it does become necessary for the Court to take an interventionist role in identifying and separating separate issues. In Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464 Brereton J at [6] held "while much has been said against the resolution of separate questions in Courts of higher authority, nonetheless since the Civil Procedure Act 2005 (NSW) it is my view that the Court should take a more interventionist role in identifying and separating important issues which can resolve significant parts of the litigation expeditiously". 21 Notwithstanding Mr Lockhart SC's contention that the ultimate question of misleading or deceptive conduct could be treated with in the first tranche of the separate question regime, I accept that to include the misleading or deceptive parameter in the separate question could lead to real injustice where there may be differences in relation to the different groups of persons to be treated with. The submissions of Mr Pike 22 Mr Pike of counsel represented Paulwen Holdings Pty Limited Paul Plummer and Rick Isachsen the Cross-Defendants to the Third and Fifth Cross-Claims. 23 Until March 2004, Plummer was a licensed dealer trading as Financial Structures. Paulwen traded under that name after March 2004. Isachsen was an authorised representative of Plummer. All but two of the Investors were clients of Plummer/Paulwen. In addition, Plummer and Isachsen also invested in the 2003 Safety PINs. 24 Each of Paulwen, Plummer and Isachsen agreed that it is appropriate for the Court to order the separate determination of certain questions in these proceedings. 25 The principal concern of Paulwen, Plummer and Isachsen was to ensure that any split hearing operates fairly in relation to them insofar as any evidence they may be required to give in the first hearing, as opposed to the second hearing. 26 As Mr Pike submitted it appeared to be accepted that on the current competing versions of the separate questions, Plummer and/or Isachsen will likely be required to give evidence in the first hearing as well as the second (assuming there is a second hearing). 27 Mr Pike submitted that in considering how to frame the separate questions, it was necessary to bear the following matters in mind:
i. Paulwen, Plummer and Isachsen were involved as financial advisers in relation to the investment in the 2003 Safety PINs and the 2004 Safety PINs. As such, Plummer and Isachsen (on behalf of Paulwen) had dealings with representatives of the Trustee, representatives of ACIL (principally Joubert) and individual Investors;
ii. Plummer and Isachsen (through his company Bezawo Pty Limited) invested in the 2003 Safety PINs and as such make claims in these proceedings as Investors;
iii. each of Paulwen, Plummer and Isachsen are Cross-Defendants to the Third and Fifth Cross-Claims brought by Joubert and ABN Amro respectively;
iv. The Cross-Claims include claims that each breached duties of care owed to Investors by failing to exercise reasonable care and skill in identifying, assessing, explaining and recommending the financial products in which Investors should invest. 28 Notwithstanding the submissions by Mr Pike to the contrary, to my mind the principled exercise of the material discretion is to order the separate question as already indicated in the above reasons. Further consideration of the precise issues to be included as part of the separate question determination decision 29 During the hearing of the motion it became common ground that once the court produced its decision as to whether or not the misleading and deceptive conduct cases were to be regarded as raising common matters, the parties would be given an opportunity to consult with one another in order to determine what precise issues were to be included in the short minutes of order setting down the separate question determination regime. Now that the decision has been to exclude the misleading and deceptive conduct cases, the parties will be given the opportunity to so consult. ***********
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Oasis Fund Management Limited & Ors
ABN Amro Bank NV & Ors
(1992) 26 NSWLR 441
(2006) 229 CLR 386
(1988) 15 NSWLR 84
(1999) 217 ALR 495
(1985) 1 NSWLR 601
The court determined that the first separate-question stage should include the claims of the first to fourth plaintiffs, Plummer and Bezawo Pty Ltd, and specified contribution cross-claims [16]. Ford and Manns and cross-claims involving them were included because their claims concerned different Safety PINs series [17]. The alleged misleading or deceptive conduct issues were not to be litigated as common questions at the initial stage [18, 21]. The parties were to consult on the precise issues for the short minutes of order [29].