Oasis Fund Management Ltd v Royal Bank of Scotland NV

CATCHWORDS : PRACTICE AND PROCEDURE - representative proceedings - whether and how a representative plaintiff can be substituted

Civil Procedure Act 2005 Corporations Act 2001 (Cth) Federal Court of Australia Act 1976 (Cth) LEGISLATION CITED : Land and Environment Court Rules 1980 Supreme Court Rules 1970 Supreme Court of Judicature Act 1873 (UK) Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules 2005

Amaca Pty Ltd v Cremer [2006] NSWCA 164, 66 NSWLR 400 Cameron v National Mutual Life Association of Australasia Ltd (No 2) [1992] 1 Qd R 133 Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398 Commissioner of Sewers of the City of London v Gellatly (1876) LR 3 Ch D 610 Courtney v Medtel Pty Ltd [2002] FCA 957, 122 FCR 168 Dean-Willcocks v Air Transit International Pty Ltd [2002] NSWSC 525, 55 NSWLR 64 Emerald Supplies Ltd v British Airways plc [2009] EWHC 741, 3 WLR 1200 Fernance v Nominal Defendant (1989) 17 NSWLR 710 In the matter of Bauhaus Pyrmont Pty Ltd (in liq) [2006] NSWSC 879, 67 NSWLR 289 Irish Shipping Ltd v Commercial Union Assurance Co Ltd [1991] 2 QB 206 Jameson v Professional Investment Services Pty Ltd [2009] NSWCA 28, 72 NSWLR 281 CASES CITED : John v Rees [1970] 1 Ch 345 Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 1363, 94 FCR 167 Knight v McCann-Erickson Pty Ltd (Supreme Court of New South Wales, McClelland J, 26 August 1991, unreported) Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd [2008] NSWSC 1344, 74 NSWLR 550 McInnes v Wingecarribee Shire Council (1987) 10 NSWLR 660 Mobil Oil Australia Pty Ltd v The State of Victoria [2002] HCA 27, 211 CLR 1 Moon v Atherton [1972] 2 QB 435 Oasis Fund Management Ltd v ABN Amro Bank NV [2009] NSWSC 1322 O'Sullivan v Challenger Managed Investments Ltd [2007] NSWSC 383, 214 FLR 1 Templeton v Leviathan Pty Ltd (1921) 30 CLR 34 Tongue v Tamworth City Council [2004] FCA 1702, 141 FCR 233 Zurek v Burge, McGovern and David Jones (Australia) Pty Ltd (Supreme Court of New South Wales, Gressier M, 25 March 1987, unreported)

TEXTS CITED : Daniell's Practice of the High Court of Chancery (5th ed, 1871)

Oasis Fund Management Limited (first plaintiff) Oasis Asset Management Limited (second plaintiff) Robert Anthony Ford (third plaintiff) Harold Keith Manns (fourth plaintiff) PARTIES : Royal Bank of Scotland NV (first defendant) Deon Joubert (second defendant) Paulwen Holdings Pty Ltd (first cross defendant to third and 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 with Ms M Nagy (plaintiffs) COUNSEL : Mr M J Darke (first defendant) Ms R C A Higgins (second defendant) Mr I R Pike (cross defendants to third and fifth cross claims)

Johnson Winter & Slattery (plaintiffs) SOLICITORS : Blake Dawson (first defendant) Wotton & Kearney (second defendant) Lander & Rogers (cross defendants to third and fifth cross claims)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2008/00290527 Oasis Fund Management Limited & Ors v Royal Bank of Scotland NV & Ors JUDGMENT 1 HIS HONOUR: This matter concerns the power of the court to order the substitution of a plaintiff in representative proceedings under r 7.4 of the Uniform Civil Procedure Rules 2005 (UCPR). The primary question is whether a plaintiff in representative proceedings, who sues on his own behalf and on behalf of numerous persons but who is unwilling to continue as the representative plaintiff, can only cease to be a plaintiff if he discontinues his personal proceedings and on condition that he relinquish his claims against the defendant. BACKGROUND 2 In his Amended Commercial List Statement, the third plaintiff, Robert Ford, alleges that in 2003 he and other investors were induced by misleading or deceptive conduct, contrary to s 1041H of the Corporations Act 2001 (Cth) and analogues in other statutes, in which the defendants engaged or were involved, to invest, via a trust of which the first plaintiff is the present trustee and the second plaintiff was trustee at the time, in certain debt securities which have failed. Mr Ford seeks declaratory relief and statutory compensation. The Amended Commercial List Statement states that, relying on r 7.4 of the UCPR, Mr Ford sues on his own behalf and as representing 294 named persons who invested in the securities in 2003 (2003 Investors), including Mr Ford and Mervyn Michell. 3 On 14 April 2010, orders were made for the determination, as separate questions pursuant to UCPR r 28.2, of Mr Ford's claim, as well as certain issues common to his claim and those of the 2003 Investors he represents: Oasis Fund Management Ltd v ABN Amro Bank NV [2009] NSWSC 1322 at [21] (Einstein J). This course was taken in order to identify the common issues arising on his claim, the determination of which will be binding, pursuant to UCPR r 7.5(1), in respect of the claims on behalf of the other 2003 Investors. As reflected in Einstein J's decision at [21] on the content of the separation questions, significant issues arise on Mr Ford's claim which may be determined differently to the claims of the other 2003 Investors. 4 Mr Ford wishes to be substituted as the representative plaintiff for personal reasons. They are primarily driven by his continuing treatment for health issues. He has had quadruple heart bypass surgery and has received medical advice from all his doctors to decrease stress in his life and not to engage, where possible, in stressful activities. He wishes to remain a member of the group of 2003 Investors represented by any new representative party in the proceedings 5 By an amended notice of motion, Mr Ford and Mr Michell seek orders for (a) the joinder of Mr Michell as plaintiff and representative party on behalf of the 2003 Investors; (b) the withdrawal of Mr Ford as plaintiff and representative party on behalf of the 2003 Investors; (c) the substitution of Mr Michell for Mr Ford as third plaintiff; (d) leave to file a Further Amended Summons and Further Amended Commercial List Statement reflecting (a) - (c); and (e) further or other orders as the Court thinks fit. 6 I propose to make orders along the lines sought for the reasons that follow. UNIFORM CIVIL PROCEDURE RULES 2005 7 The rules specifically relating to representative proceedings in which numerous people have the same interest are lumped together with different species of representative actions (affecting a deceased, a trust or an estate) in Division 2 (rr 7.4-7.10) Part 7 of the UCPR. Only two of the rules in that Division - rr 7.4 and 7.5 - expressly apply to representative proceedings in which numerous people have the same interest, while a third rule - r 7.8 - is wide enough to cover all species of representative proceedings. The substitution or withdrawal of a representative plaintiff is not expressly addressed in any of those rules. Rules 7.4, 7.5 and 7.8 provide as follows: "7.4 Representation of concurrent interests

(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. (3) At any stage of the proceedings, the plaintiff may apply to the court for an order appointing one or more of the defendants or one or more of the other persons to represent any one or more of them. (4) If a person who is not a party to the proceedings is appointed as referred to in subrule (3), that person must be joined as a party under rule 6.24. (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. (4D) Without limiting subrule (2), the court may, on application by the defendant or of its own motion, order that proceedings no longer continue under this rule where it is satisfied that it is in the interests of justice to do so because: (a) the costs that would be incurred if the proceedings were to continue are likely to exceed the costs that would be incurred if each represented person conducted separate proceedings or (b) where the relief sought is the payment of money, the cost to the defendant of identifying the represented persons and distributing to them the amounts ordered to be paid to them would be excessive having regard to the likely total of those amounts, or (c) all the relief sought can be obtained by means of proceedings other than proceedings under this rule, or (d) the proceedings will not provide an efficient and effective means of dealing with the claims of all represented persons, or (e) a representative party is not able to adequately represent the interests of the represented persons. (5) This rule does not apply to proceedings concerning: (a) the administration of a deceased person's estate, or (b) property the subject of a trust.

7.5 Judgments and orders in proceedings bind represented persons

(1) A judgment or order made in proceedings in which a party has, pursuant to rule 7.4, represented a number of persons binds all of those persons, but is not enforceable against any of those persons who is not a party except by leave of the court. …

7.8 Court may determine who has conduct of proceedings The court may give the conduct of the whole or any part of any proceedings to such person as it thinks fit." 8 The following provisions of the UCPR are also relevant: " 2.1 Directions and orders

The court may, at any time and from time to time, give such directions and make such orders for the conduct of any proceedings as appear convenient (whether or not inconsistent with these rules or any other rules of court) for the just, quick and cheap disposal of the proceedings.

6.19 Proceedings involving common questions of law or fact

(1) Two or more persons may be joined as plaintiffs or defendants in any originating process if: (a) separate proceedings by or against each of them would give rise to a common question of law or fact, and (b) all rights of relief claimed in the originating process are in respect of, or arise out of, the same transaction or series of transactions, or if the court gives leave for them to be joined. (2) Leave under subrule (1) may be granted before or after the originating process is filed.

6.24 Court may join party if joinder proper or necessary

(1) If the court considers that a person ought to have been joined as a party, or is a person whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings, the court may order that the person be joined as a party.

6.28 Date of commencement of proceedings in relation to parties joined

If the court orders that a person be joined as a party, the date of commencement of the proceedings, in relation to that person, is taken to be the date on which the order is made or such later date as the court may specify in the order.

The court may order that a person: … (b) who has ceased to be a proper or necessary party, be removed as a party.

6.32 Orders as to the future conduct of proceedings

(1) If in any proceedings the court makes an order under Division 5 or 6, it may also make such orders as it thinks fit for the future conduct of the proceedings, including orders with respect to the following: … (d) the substitution of one party for another party or former party. (2) If the court orders the substitution of one party for another party or former party, all things previously done in the proceedings have the same effect in relation to the new party as they had in relation to the old, subject to any other order by the court.

(1) The plaintiff in any proceedings may, by filing a notice of discontinuance, discontinue the proceedings, either as to all claims for relief or as to all claims for relief so far as they concern a particular defendant: (a) with the consent of each other active party in the proceedings, or (b) with the leave of the court.

(1) This rule applies to proceedings that are discontinued by the plaintiff, as referred to in rule 12.1. (2) Unless the court orders otherwise or the notice referred to in rule 12.1 (2) otherwise provides, the plaintiff must pay such of the defendant's costs as, at the date on which the notice of discontinuance was filed, had been incurred by the defendant in relation to each claim in respect of which the proceedings have been discontinued." CIVIL PROCEDURE ACT 2005 9 Section 64(1) of the CPA provides: " 64 Amendment of documents generally

(1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings.

(2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.

(3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made." 10 The overriding purpose of the CPA and the UCPR and the duty of the court to seek to give effect to that purpose are expressed in s 56 of the CPA as follows: " 56 Overriding purpose

(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 of any such rule." FEDERAL COURT OF AUSTRALIA ACT 1976 11 The lean regime for representative proceedings in the UCPR rr 7.4, 7.5 and 7.8 may be contrasted with the detailed regime in Part IVA (ss 33A-33W) of the Federal Court of Australia Act 1976 (Cth). Sections 33T and 33W provide for substitution or withdrawal of a representative party, as follows: " 33T Adequacy of representation (1) If, on an application by a group member, it appears to the Court that a representative party is not able adequately to represent the interests of the group members, the Court may substitute another group member as representative party and may make such other orders as it thinks fit.

(2) If, on an application by a sub-group member, it appears to the Court that a sub-group representative party is not able adequately to represent the interests of the sub-group members, the Court may substitute another person as sub-group representative party and may make such other orders as it thinks fit.

33W Settlement of individual claim of representative party (1) A representative party may, with leave of the Court, settle his or her individual claim in whole or in part at any stage of the representative proceeding.

(2) A representative party who is seeking leave to settle, or who has settled, his or her individual claim may, with leave of the Court, withdraw as representative party. (3) Where a person has sought leave to withdraw as representative party under subsection (2), the Court may, on the application of a group member, make an order for the substitution of another group member as representative party and may make such other orders as it thinks fit.

(4) Before granting a person leave to withdraw as a representative party: (a) the Court must be satisfied that notice of the application has been given to group members in accordance with subsection 33X(1) and in sufficient time for them to apply to have another person substituted as the representative party; and (b) any application for the substitution of another group member as a representative party has been determined.

(5) The Court may grant leave to a person to withdraw as representative party subject to such conditions as to costs as the Court considers just." SUBMISSIONS 12 The applicant's submissions may be summarised as follows: (a) rule 6.24(1) of the UCPR permits joinder of Mr Michell: Moon v Atherton [1972] 2 QB 435 (CA); followed in Zurek v Burge, McGoven and David Jones (Australia) Pty Ltd (Supreme Court of New South Wales, Gressier M, 25 March 1987, unreported). His joinder, as a willing member of the represented group, is necessary to protect the interest of that group because Mr Ford is unwilling to continue to represent them; (b) rule 6.19(1) also permits the joinder of Mr Michell as a plaintiff. Separate proceedings by him and Mr Ford "would give rise to a common question of law or fact" and "all rights of relief claimed…arise out of, the same transaction or transactions". (c) rule 6.29(b) permits removal of Mr Ford. Upon Mr Michell's joinder Mr Ford ceased to be a "necessary" party because the represented persons have a willing, joined representative, Mr Michell. Also, Mr Ford's willingness to continue as a representative plaintiff means that he is no longer a "proper" party; (d) rule 6.32(1)(d) permits substitution of Mr Michell for Mr Ford. Mr Michell is bound by orders already made: r 6.32(2); (e) section 64(1) of the CPA permits amendment of the Summons and Amended Commercial List Statement to insert Mr Michell's name instead of that of Mr Ford: Moon; McInnes v Wingecarribee Shire Council (1987) 10 NSWLR 660 (CA) (f) rule 7.8 permits the addition of a party where the court considers that the conduct of representative proceedings should be undertaken by someone else; (g) alternatively, r 2.1 permits substitution; (h) Mr Ford should be liable for costs thrown away relating to individual aspects of his claim by reason of the substitution and Mr Michell should be liable for all costs in relation to the common issues (including past costs). 13 Each defendant's submissions may not have been identical but for present purposes it is convenient to deal with them as one. They submit that the Court has no power to make the orders sought or that the power should not be exercised in the discretion of the Court. Otherwise, their submissions may be summarised as follows: (a) Mr Michell could be joined as representative plaintiff pursuant to the closing words of r 6.19 (subject to appropriate conditions as to liability for antecedent costs); (b) an order could be made under r 7.4(4D) that the representative proceedings commenced by Mr Ford no longer continue as representative proceedings (or, presumably, Mr Ford could amend to delete any reference to him suing in a representative capacity); (c) On application, Mr Ford could be granted leave to discontinue pursuant to r 12.1 on condition that he relinquish his personal cause of action (whether by being represented by Mr Michell in the proceedings or by bringing subsequent proceedings). There have been cases where such a condition has been imposed. They suggest that support for such a condition is found by analogy in s 33W(2) of the Federal Court of Australia Act 1976 (Cth) which enables a representative party to withdraw with leave only where he is seeking leave to settle or has settled his individual claim; (d) ordinarily, discontinuance would carry the consequence that Mr Ford must pay the defendants' costs of his personal claim: r 42.19. If there is to be departure from the ordinary position with Mr Michell assuming liability for past costs (other than in respect of issues particular to Mr Ford's claim), that should only occur on terms that Mr Michell accepts liability for those costs and demonstrates an ability to meet them; (e) if Mr Ford can be removed under r 6.29 (contrary to the defendants' submission), the same conditions as to relinquishing his personal claim and costs should be imposed; (f) as a matter of discretion, no order should be made, or at least Mr Ford should stay in the proceedings in relation to his personal claim, for the following reasons: (i) the evidence does not establish that he cannot adequately conduct the proceedings. In particular, the evidence does not establish that his health has worsened since May 2009 when he consented to being joined as a plaintiff; that he was not advised at that time as to what this would entail; and that, since his joinder in May 2009, he has become medically unfit to give instructions in relation to the prosecution of the claim or that he would cease to prosecute it if the present motion were dismissed; (ii) if Mr Ford ceases to be a plaintiff, the defendants would be deprived of what may be a significant forensic advantage in having the claim of an apparently sophisticated investor determined at the hearing of the separate questions; whereas Mr Ford would remain entitled to the benefit of any findings on the common issues which are to be determined at that hearing and/or of any settlement of the proceedings; (iii) Mr Ford will eventually have to sue in his own right if the common issues are determined favourably to him and the 2003 Investors. REPRESENTATIVE PROCEEDINGS 14 Representative proceedings are the creature of equity. The Chancery Court permitted representative proceedings because of the inconvenience, expense and injustice in dealing many times over with identical issues in claims by numerous persons with a common interest against the same defendant. Representative proceedings preserved the principle that all persons concurrently interested should be before the Court and bound by the judgment, but were an easier and cheaper mode of determining common issues than a multitude of proceedings which harassed the defendant. In the nineteenth century the great increase in the number of unincorporated joint stock companies and trading associations had the effect of extending the Chancery Court practice: Daniell's Practice of the High Court of Chancery (5th ed, 1871) 213; Cameron v National Mutual Life Association of Australasia Ltd (No 2) [1992] 1 Qd R 133 at 135. With the merger of law and equity, the Chancery Court practice was incorporated in the new rules of procedure scheduled to the Supreme Court of Judicature Act 1873 (UK): Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398 at 415. 15 Prior to the Supreme Court of Judicature Act 1873, Daniell's Practice of the High Court of Chancery (5th ed, 1871) 216 stated (with supporting citations): "In all cases, where one or a few individuals of a large number institute a suit on behalf of themselves and others, they must so describe themselves in the bill: otherwise, a demurrer or plea for want of parties will lie". Thus, it is orthodox for a representative plaintiff to sue on behalf of himself and others. Examples of the orthodox pleading can be seen in Commissioner of Sewers of the City of London v Gellatly (1876) LR 3 Ch D 610 and the cases comprehensively reviewed in Emerald Supplies Ltd v British Airways plc [2009] EWHC 741 (Ch), 3 WLR 1200 at [10] ff by Morritt C. The orthodox pleading is required by r 7.4(2) of the UCPR. Mr Ford has pleaded in the orthodox way. 16 The rule as to representative actions "is to be treated as being not a rigid matter of principle but a flexible tool of convenience in the administration of justice": John v Rees [1970] 1 Ch 345 at 369 per Megarry J; Carnie v at 422. It is "a broad rule of procedural convenience to be exercised with a wide but carefully used discretion": Emerald at [12], quoting from Irish Shipping Ltd v Commercial Union Assurance Co Ltd [1991] 2 QB 206 at 238-239 per Purchas LJ. 17 Because represented persons are bound by the decision as much as though they were the representative plaintiff, the Chancery Court had to be satisfied that they were fairly represented before it. This suggests that the Court could substitute a representative plaintiff in the representative procedure which, after all, the Court itself had developed, if that were necessary to achieve that state of satisfaction. In Commissioners of Sewers of the City of London v Gellatly (1876) LR 3 Ch D 610 the plaintiffs had sued on behalf of themselves and others and had obtained a decree. It was then argued that a represented party was not bound by the decree because he was not a party. Jessell MR rejected the argument, reasoning that in making the decision the court "was satisfied that the parties were fairly represented before it". He said at 615-616 that he: "…understood the rule of the Court of Chancery, ever since Lord Hardwicke's time, to have been this, that where one multitude of persons were interested in a right, and another multitude of persons interested in contesting that right, and that right was a general right - and it was utterly impossible to try the question of the existence of the right between the two multitudes on account of their number - some individuals out of the one multitude might be selected to represented one set of claimants, and another set of persons to represent the parties resisting the claim, and the right might be finally decided as between all parties in a suit so constituted…the Court being satisfied that the parties were fairly represented before it, and that the matter was fairly contested made a final decision of the right, and everybody interested, although not actually present, was bound by that decision, because he was present by representation." 18 The duty of the court to see that there is adequate representation in representative proceedings has been confirmed by the High Court. In Templeton v Leviathan Pty Ltd (1921) 30 CLR 34 at 76 Starke J said that, "It was no doubt the duty of the Court in such suits to see that the absent interests were fairly and honestly represented". 19 In Carnie the High Court considered Part 8 r 13(1) of the NSW Supreme Court Rules 1970, now superseded by r 7.4(1) of the UCPR. The High Court emphasised the flexible utility of representative actions in facilitating the administration of justice; the importance of wide judicial control over its conduct to ensure not only that the litigation is efficiently disposed of but that the represented persons are adequately represented by the representative party; and the Court's retention of power to reshape the proceedings. Mason CJ, Deane and Dawson JJ held at 404: "Much as one might prefer to have a detailed legislative prescription by statute or rule of court regulating the incidents of representative action, r 13 makes provision for an action to proceed as a representative action in a context in which there is no such legislative prescription. The absence of such a prescription does not enable a court to refuse to give effect to the provisions of the rule. Nor, more importantly, does the absence of such prescription provide a sufficient reason for narrowing the scope of the operation of the rule, as the Court of Appeal did, without giving effect to the purpose of the rule in facilitating the administration of justice" 20 Brennan J held at 408: "However, it is precisely because of the flexible utility of the representative action that judicial control of its conduct is important, to ensure not only that the litigation as between the plaintiff and defendant is efficiently disposed of but also that the interests of those who are absent but represented are not prejudiced by the conduct of the litigation on their behalf. The self-proclaimed carrier of a litigious banner may prove to be an indolent or incompetent champion of the common cause in the courtroom". 21 While Mason CJ, Deane and Dawson JJ might have preferred a detailed legislative prescription, for Toohey and Gaudron JJ the simplicity of the rule was one of its strengths (at 422): "…it is true that r 13 lacks the detail of some other rules of court. But there is no 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'. The Court retains the power to reshape proceedings at a later stage if they become impossibly complex or the defendant is prejudiced." 22 Since Carnie, the UCPR, particularly since amendments to rr 7.4 and 7.5 in 2007, provides a more detailed legislative prescription, although not as detailed as in Part IVA of the Federal Court of Australia Act. 23 In the interpretation of provisions of the CPA and the UCPR which may relate to representative proceedings and in the exercise of power given by such provisions, the Court is bound to give effect to the overriding purpose of the CPA and UCPR, which is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 56(2) CPA. This purpose is much the same as the purpose of the Chancery Court in permitting representative proceedings. 24 A willingness to continue to act as a representative plaintiff is fundamental to representative proceedings. An unwilling representative plaintiff cannot adequately represent the interests of others. An unwilling representative plaintiff should not be forced to litigate against his or her will: Tongue v Tamworth City Council [2004] FCA 1702, 141 FCR 233 at [37] per Jacobson J. This is particularly so in a case such as the present where there is a compelling case for Mr Ford to cease to be the representative plaintiff because of ill health. The Court should be jealous of ensuring the adequacy of representation of represented persons: see [17]-[21] above. If that requires substitution of a representative plaintiff, one would expect the rules to be flexible enough to permit the Court to order substitution. 25 In proceedings in the Federal Court, there is a clear power to substitute a representative plaintiff where the representative plaintiff is not able adequately to represent the interests of the represented parties: s 33T(1) of the Federal Court of Australia Act. Thus, in Tongue v Tamworth City Council [2004] FCA 1702, 141 FCR 233 a representative plaintiff who was in ill health was substituted pursuant to s 33T(1). 26 Section 33W also empowers the Federal Court to grant leave to a representative plaintiff who is seeking leave to settle or who has settled, to withdraw and be substituted by another member of the represented group. This concept of leave to "withdraw" does not exist under the UCPR and is therefore inapt to employ in the present case. But s 33W may explain why the notice of motion before me seeks an order granting leave to Mr Ford to "withdraw". DECISION 27 Authority that UCPR r 6.24(1) and CPA s 64(1) empower the Court to substitute a representative plaintiff is found in Moon v Atherton [1972] 2 QB 435 (CA) and Zurek v Burge, McGovern and David Jones (Australia) Pty Ltd (Supreme Court of New South Wales, Gressier M, 25 March 1987, unreported). These decisions illustrate the liberal and flexible approach of the courts when interpreting and applying legislative provisions and rules to representative proceedings. 28 In Moon, Miss Moon commenced a representative action "on behalf of herself" and ten other tenants of a block of flats. After the expiry of the limitation period, she and nine of the other tenants decided to discontinue the action. The remaining tenant, Mrs Art, wished to go on. As any new action begun in Mrs Art's own name would have been statute-barred, she applied for leave to amend the statement of claim by substituting herself as the named plaintiff in place of Miss Moon and deleting all reference to the other tenants. The Court of Appeal upheld her application, relying on RSC Ord 15 r 6 - which was substantially equivalent to UCPR 6.24(1) - and RSC Ord 20 r 5 - which was substantially equivalent to CPA s 64(1). Lord Denning MR (with whom Edmund Davies and Roskill LJJ agreed) held, at 441-442: "In a representative action, the one person who is named as plaintiff is, of course, a full party to the action. The others, who are not named, but whom she represents, are also parties to the action. They are all bound by the eventual decision in the case. They are not full parties because they are not liable individually for the costs. That was held by Eve J. in Price v Rhondda Urban District Council [1923] W.N. 228. But they are parties because they are bound by the result.

What then is to happen when the named plaintiff decides to withdraw? It seems to me that then it is open to any one of those whom she represents to come forward and take the place of the named plaintiff. The case comes within Ord. 15, r. 6, which enables a party to be added whose presence is necessary. It also comes within Ord. 20, r. 5(1), which says: '…the court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct.' In those rules the word "party" is used in the same sense as it is in the definition in section 225 of the Supreme Court of Judicature (Consolidation) Act 1925, which says that: "'party' includes every person served with notice of or attending any proceeding, although not named on the record." So it includes one of the persons represented, even though not named in the writ.

In my opinion those rules enable the court to amend these proceedings by inserting the name of Mrs. Art instead of the named plaintiff. This is necessary in order to do justice. If it were not so, the named plaintiff might discontinue, or the defendant might settle with the named plaintiff, and then leave the other unnamed plaintiffs out in the cold. It might be too late for them to issue a new writ because of the Statutes of Limitation. That cannot be right. It seems to me that if, in a representative action, the named party falls out for any reason, the court has ample power to substitute one of the unnamed parties as the plaintiff, and to bring him in as at the date of the issue of the original writ". 29 Roskill LJ said, at 443: "It seems to me that we should treat Mrs. Art, whose interests were originally represented by Miss Moon, as though she had always been…a person named upon the record. I think this case falls within Ord. 20, r. 5. But if I am wrong in that view, and she is not to be treated as a party, then it seems to me this case falls within Ord. 15, r. 6..."

30 Moon is a strong case because there the representative proceedings came entirely to an end and only the personal proceedings of Mrs Art continued, which would have been barred by the statute of limitations if the substitution order had not been made. 31 In Zurek, Gressier M followed Moon and made an order substituting the representative plaintiff in reliance on the amendment power in SCR Part 20 r 1, the former equivalent of s 64(1) of the CPA. 32 The defendants submit that Moon is distinguishable because there the representative plaintiff did not wish to continue. That is a factual difference, however, the order made in Moon was one of substitution and no order granting leave to discontinue was made. I do not think that the factual difference distinguishes the case in point of principle in circumstances where the representative plaintiff is not willing to proceed in that capacity but wishes to remain as one of the represented group. Thus, in Zurek the representative plaintiff was substituted notwithstanding that he had not otherwise obtained leave to discontinue. 33 The alternative reliance in Moon on a general power of amendment in a provision equivalent to s 64 of the CPA receives indirect support from the principle that rules of a general kind such a s 64 should be given as full a meaning as they can reasonably bear in their context: McInnes v Wingecarribee Shire Council (1987) 10 NSWLR 660 (CA). In that case Mr McInnes appealed to the Land and Environment Court against a council refusal of a development application. He applied for leave to amend by substituting others in a group that he represented as applicants for himself in the proceedings. The Court of Appeal held that the amendment could be made pursuant to the then Land and Environment Court Rules 1980 Pt 10(3) which they interpreted very widely. Part 10 was very similar to the current s 64(1) of the CPA. Priestley JA (the other members of the Court agreeing) said at 668: "The courts have adopted, when construing rules of the general kind in question in the present case, an approach which gives the empowering words in such rules as full a meaning as they can reasonably bear in their context. This approach is not new; it can I think be said to have been required by the substance of the Supreme Court of Judicature Act 1873 (UK) and all the descendants of that Act in their many jurisdictions. It took a long time for the more restrictive common law approaches of earlier years to die out…it seems to me, that the preferred approach at the present time is to give courts very ample jurisdiction to grant amendments, including those which as a matter of simple fact allow causes of action to be litigated which could not be litigated if the amendment were not allowed, leaving it to the discretion of the court to decide when justice requires that such an amendment should or should not be granted. This is in contrast to the earlier approach of leaving the rules rather than the court's discretion to determine whether or not particular causes of action should be litigated." 34 On the authority of Moon and Zurek, there is power to order substitution of a representative plaintiff. If there is power then the discretionary consideration strongly favouring substitution is that Mr Ford is unwilling to continue as the representative plaintiff and is in serious ill-health. 35 However, the defendants made detailed submissions that (notwithstanding the authorities) there is no power to make the orders sought or that, in the discretion of the Court, the power should not be exercised. Before addressing their submissions I would mention two matters. 36 First, although it does not matter in the present case, the Moon view that represented persons are parties but not full parties may be compared with the view expressed in Australian cases that represented persons are not parties: Mobil Oil Australia Pty Ltd v The State of Victoria [2002] HCA 27, 211 CLR 1 at [50]; Courtney v Medtel Pty Ltd [2002] FCA 957, 122 FCR 168 at [36]; Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 1363, 94 FCR 167 at [31]; Cameron v National Mutual Life Association of Australasia Ltd (No 2) [1992] 1 Qd R 133 at 141, 144; O'Sullivan v Challenger Managed Investments Ltd [2007] NSWSC 383, 214 FLR 1 at [50]. UCPR r 7.4(4C) may suggest that a represented person is not a party. But the question whether a represented person may be a party for the purpose of any of the rules is not entirely clear because there is no definition of a "party" in the CPA or the UCPR; a "party" under the CPA and UCPR is not necessarily a person named as a party on the record eg it includes a subpoenaed person who contests access for the purposes of the UCPR r 42.3(1): In the matter of Bauhaus Pyrmont Pty Ltd (in liq) [2006] NSWSC 879, 67 NSWLR 289 (Austin J); and the court may give directions in the representative proceedings for the determination of issues relating only to individual represented persons: r 7.4(4A). It is unnecessary to consider this question further in the present case. 37 Secondly, if the only way out for Mr Ford were the discontinuance way proposed by the defendants referred to at [13(c)] above, and if he were to go that way, I would be minded to grant leave to discontinue but would not attach the proposed condition that he relinquish his personal claim. That would be unjust because he had no option but to make that claim in order to be the representative plaintiff; he has always presented as one of the represented group and wishes to remain in it; but he can no longer adequately represent the group's interests as he is unwilling to continue as the representative plaintiff, particularly having regard to his ill health. If the common issues were to be decided adversely to the 2003 Investors, then none of their personal claims can succeed. Rule 6.24(1) 38 Rule 6.24(1) permits joinder of a person "whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings". The applicants submit that Mr Michell can be joined as plaintiff pursuant to r 6.24(1) because his joinder is "necessary" to the determination of all matters in dispute. The defendants submit that r 6.24(1) does not permit the joinder of Mr Michell because: (a) mere reluctance by Mr Ford to prosecute his own claim does not make Mr Michell a "necessary" party and no application has been made under r 7.8 for the conduct of the proceedings to be given to another person; (b) even if Mr Ford were given leave to discontinue the proceedings or otherwise be removed as a party, r 6.24(1) would not permit Mr Michell's joinder because (like the old SCR r 8(1)(b) which it replaced) that rule is concerned with the addition of parties which is ancillary to, and not in substitution for, the proceedings as constituted: Knight v McCann-Erickson Pty Ltd ( Supreme Court of New South Wales, McClelland J, 26 August 1991, unreported). In Knight this view of the rule led McClelland J to conclude that it did not "authorise the reconstitution of proceedings by the substitution of a new plaintiff with a new cause of action for an old plaintiff whose cause of action is no longer maintainable". The defendants argue that equally it does not authorise substitution of a new plaintiff (Mr Michell) with a new cause of action for an old plaintiff (Mr Ford) who no longer wishes to maintain his cause of action. They submit that to the extent that Knight is inconsistent with Moon, Knight should be followed. It is implicit in the submission that Zurek should also not be followed. 39 Knight is distinguishable and is not inconsistent with Moon. Knight did not concern representative proceedings, Moon and Zurek did. Knight concerned competing proceedings by two liquidators with separate causes of action occurring on different dates on the basis of separate orders in different jurisdictions. In the present case, the orders sought by the applicants would not reconstitute the proceedings in the sense addressed in Knight. The special character of representative proceedings has always required a flexible approach, as the High Court in Carnie recognised. A representative plaintiff like Mr Ford who is unwilling to continue in that capacity, particularly one who is in ill health, will no longer adequately represent the represented parties. It is therefore necessary to replace him. Mr Michell is the only candidate and is a member of the represented group. The joinder of Mr Michell is necessary to protect the interests of the represented parties. Consequently, r 6.24(1) empowers the Court to order the joinder of Mr Michell. It is appropriate to join him. Rule 6.19(1) 40 The applicants alternatively submit that the joinder of Mr Michell is permissible under r 6.19(1). The defendants submit that r 6.19(1)(a) and (b) do not permit the joinder of Mr Michell as his rights of relief are not in respect of or do not arise out of "the same transaction or series of transactions" as those claimed by the other plaintiffs. That is said to be because his claimed rights of relief would arise out of his acquisition of units within a trust which held the securities, whereas the first plaintiff, Oasis, acquired the securities: Dean-Willcocks v Air Transit International Pty Ltd [2002] NSWSC 525, 55 NSWLR 64 at [21]-[27]. They concede that if Mr Ford were to obtain leave to discontinue, it may be appropriate to join Mr Michell in a representative capacity pursuant to the closing words of r 6.19, but point out that no discontinuance application has been made. 41 It is unnecessary to consider the niceties of subrules (a) and (b) of r 6.19(1). The closing words of r 6.19 contain a discrete and unconditional power to join persons if the court gives leave. In my opinion, this is a suitable case for granting leave to Mr Michell to be joined pursuant to that power. Rule 6.29(b) 42 The applicants submit that r 6.29(b) permits the Court to remove Mr Ford because he has ceased to be "a proper or necessary party". 43 The defendants submit that Mr Ford sues on his own cause of action and not on the cause of action of the represented persons; and therefore, even if Mr Michell were to be joined as the representative plaintiff, in terms of r 6.29(b) Mr Ford would remain a "proper" and "necessary" party to his own cause of action and can only withdraw from that action by obtaining leave to discontinue pursuant to r 12.1. They cite O'Sullivan v Challenger [2007] NSWSC 383, 214 FLR 1 at [48]-[50], [53] per White J, particularly his Honour's dictum that for represented persons to obtain damages they would "ultimately have to become parties to proceedings brought either severally or together pursuant to r 6.19": at [49]. That is, the represented persons could not recover damages by means of the representative proceedings. They submit that it follows that even if the joinder of Mr Michell were permitted, Mr Ford remains, in terms of r 6.29, a "proper" and "necessary" party to his own cause of action. 44 I do not accept the submission substantially for the reasons submitted by the applicants. The UCPR rules considered in O'Sullivan were subsequently substantially amended such that O'Sullivan is now relevantly distinguishable. The amendments to r 7.4 comprised amendments to sub-rule (1) and the insertion of sub-rules (4A), (4B), (4C) and (4D). Sub-rule 7.5(1) has also been amended. The amended rules establish that when a plaintiff sues in a representative capacity, he sues on all causes of action of the represented persons that are within the scope of the pleadings including each represented person's claim for damages notwithstanding that each represented person's claim for damages may be personal to him or her. Provided the pleadings meet the new and more liberal threshold in r 7.4(1) and the proceedings are commenced by a person representing other persons under r 7.4(2), as the proceedings brought by Mr Ford do, they are representative proceedings. The new r 7.4(2A) provides that representative proceedings may be commenced: "(a) whether or not the relief sought: … (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." 45 By r 7.4(2A)(b), substantial issues that are individual to the claims of represented persons may be encompassed within the representative proceedings. By r 7.4(2A)(a), representative proceedings can incorporate for determination, claims for relief that differ as between represented persons including claims for damages on behalf of represented persons, even where those claims for damages require individual assessment. 46 In the present case, the Amended Summons and the Amended Commercial List Statement state that Mr Ford sues on his own behalf and as representative party for the 2003 Investors. This Statement addresses not only the facts as they relate to Mr Ford but also as they relate to all the 2003 Investors. The Amended Summons indicates that the plaintiffs (which include Mr Ford in his representative capacity) seek, among other things, declarations of contravention and compensation pursuant to s 82 or s 87 of the Trade Practices Act 1974 (Cth) and analogues in other legislation. 47 Thus, the proceedings commenced by Mr Ford are proceedings in which the claims of the 2003 Investors for declarations for compensation, including the claims of Mr Michell, are brought for determination. That is so even though there are issues that cannot be determined as common issues such as whether each of the 2003 Investors suffered loss by the alleged misleading or deceptive conduct of the defendants. 48 Procedurally, in any representative proceedings there will be a hearing of the issues common to the representative persons. The hearing of the common issues may also involve hearing some individual issues for reasons of practicality and convenience such as avoiding the necessity of a party giving evidence in split hearings: Oasis Fund Management Ltd v ABN Amro Bank [2009] NSWSC 1322 at [16]-[17] and [25]-[28] per Einstein J. 49 Where the initial hearing in representative proceedings does not determine all claims of the represented persons, a procedural basis for the disposal of the remaining individual issues is found in the new r 7.4(4A) (identical to s 33Q(1) of the Federal Court of Australia Act): "(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". 50 The discretion conferred by r 7.4(4A) may include directions that represented persons who wish to prove individual issues in their claims, such as reliance or loss, be joined as named plaintiffs in the proceedings, or be bound by orders or undertakings as to the costs of proof of such individual issues. 51 In support of the proposition that a representative plaintiff does not sue on the causes of action of the represented persons, the defendants cite Jameson v Professional Investment Services Pty Ltd [2009] NSWCA 28, 72 NSWLR 281. There the Court of Appeal considered the discretion to "otherwise order" under r 7.4(2). Spigelman CJ (Allsop P and Ipp JA agreeing) said that the importance of the allegedly misleading and deceptive features of the representation was "likely as a practical matter to reduce the salience of issues of reliance and damages in the conduct of the individual cases". That statement was not made in the context of discussion of the instant issue and the better view is that the reference to "individual cases" refers to the individual issues that remain following determination of the common issues. Elsewhere the Chief Justice commented on the fact that the decision with respect to r 7.4(2) reflected a "choice…between the present proceedings and an array of individual proceedings by each of the persons affected": at [121]. This comment indicates that representative proceedings do not eventually require a multitude of individual proceedings by representative persons seeking damages. 52 For these reasons, Mr Michell's cause of action and claims for relief are already before the court in the proceedings; and the first and second defendants' contention that Mr Ford has sued only on the cause of action individual to him and not on the causes of action of the represented persons is erroneous. 53 It is mandatory that for r 7.4 to operate the representative plaintiff himself has a cause of action against the defendant, not merely that the represented persons do. In that sense, Mr Ford sues on his own behalf. He could not be a representative plaintiff otherwise. The use of the orthodox wording "sues on behalf of himself and the other group members" does not indicate that he is suing in his own right additionally and separately to suing in a representative capacity. The effect of r 7.5 is that an order or judgment could not be made concerning common issues which bound Mr Ford in an individual capacity but not in a representative capacity. 54 By reason of his inclusion in the group of represented person, Mr Ford's claims for relief are represented in the proceedings and will remain within the matters to be determined in them regardless of whether he continues as a representative plaintiff or not. Likewise with Mr Michell's claims. 55 Accordingly, there is no discontinuance of Mr Ford's individual claims by reason of his removal or substitution as a plaintiff. Once such joinder and substitution is effected, there is no utility in maintaining Mr Ford as a plaintiff. His claims being already represented in the proceedings, he is not a "necessary" party on his individual claims in the absence of orders pursuant to r 7.4(4A) following the determination of the common issues. He is also not a "necessary" party once Mr Michell is joined and the representative persons have a representative plaintiff. Nor is Mr Ford a "proper party" by reason of his unwillingness to continue. Therefore, the conditions for his removal pursuant to r 6.29(b) are satisfied. Rule 6.32(1)(d) 56 Rule 6.32(1)(d) permits "the substitution of one party for another party or former party "if the Court makes an order under (inter alia) Division 6 (which includes rr 6.24, 6.19 and 6.29). The applicants invoke the substitution power in r 6.32(1)(d). The first and second defendants submit that substitution cannot be ordered under r 6.32(1)(d) because, first, that rule only applies where an order for joinder or removal of parties has been made under Division 6 and no such antecedent order can be made; and secondly, Mr Michell cannot be substituted for Mr Ford given that their claims, while having some common issues, are separate and discrete. 57 As I have decided that a joinder order and a removal order can and should be made under Division 6 the first submission cannot be accepted. The second submission seems to go to discretion rather than power and, in my view, is insufficient reason not to exercise the discretion in favour of substitution in the circumstances of this case. Section 64(1) 58 The applicants submit that the general power of amendment in s 64(1) of the CPA permits the substitution. Moon supports the submission: see [27]-[30] above. 59 The defendants rely on Fernance v Nominal Defendant (1989) 17 NSWLR 710 and Amaca Pty Ltd v Cremer [2006] NSWCA 164, 66 NSWLR 400 as authority for the principle that s 64 does not permit amendment by way of joinder, removal or substitution of parties other than as provided for within Divisions 5 to 7 of Part 6 UCPR. 60 Fernance concerned the question whether a statement of claim could be amended pursuant to Pt 20 r 1 of the Supreme Court Rules 1970 - the precursor to s 64 of the CPA - to add the name of a person as a defendant in circumstances where proceedings against that person would otherwise be statute barred. SCR Pt 8 r 11(3) -worded similarly to UCPR r 6.28 - provided that where a party was joined under SCR Pt 8 r 8 - the precursor to UCPR r 6.24 - the date of commencement of the proceedings so far as concerns that person "shall be the date of filing of the originating process amended so as to add him as a party or, where an amended originating process is not filed, the date of the amendment adding him as a party". Therefore, an amendment pursuant to SCR Pt 20 r 1 would have the effect of permitting proceedings against the defendant notwithstanding that if the order were made under Pt 8 r 8 it would be statute barred. It was "the inconsistency in the presently relevant respect between the provisions of Pt 8 on the one hand, and those of Pt 20 on the other [that made] it impossible to treat Pt 20, r 1 as an alternative source of the power to make the kind of amendment specifically dealt with by Pt 8": at 721 per Gleeson CJ (with whom Clarke J A agreed). 61 In Fernance it was also significant that the amendment proposed to the statement of claim "was not a simple amendment that could be effected by writing Mrs Vaneck's name on the statement of claim. It required the preparation and filing of a further statement of claim": at 717-718 per Gleeson CJ. Hence, Gleeson CJ was not satisfied that the order that Mrs Vaneck "be joined as a defendant" made by the Master below, even if made under Pt 20 r 1, in fact had the effect that the proceedings were commenced on that date as against her: at 717. 62 Amaca does not relevantly add anything to the reasoning in Fernance. 63 Fernance and Amaca are distinguishable for two reasons relating to representative proceedings. 64 First, there is no inconsistency in the case of representative proceedings between s 64 and the provisions of Divisions 5 to 7 of Part 6 of the UCPR that would result in the conclusion, expressed in Fernance, that s 64 could not permit the amendment sought in this case. That is because r 7.4(4C) provides that a represented person "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." Rule 7.4(4C) will apply to representative proceedings such as these to the exclusion of the contrary r 6.28 applicable to other proceedings because r 7.4(4C) is a specific provision dealing with a particular subject matter (representative proceedings) that is repugnant to the operation of r 6.28: Fernance at 720 D. 65 Secondly, this is a case where the amendment could be effected to the present Summons and Amended Commercial List Statement merely by crossing out the name of Mr Ford and writing in the name of Mr Michell. Rule 7.8 66 Rule 7.8 empowers the court "to give the conduct of the whole or any part of the proceedings to such person as it thinks fit". It appears that that person might be a non-party although it is difficult to imagine that the conduct of proceedings would be given to a non party without also joining the person as a party, as was envisaged on a non-party's r 7.8 application in Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd [2008] NSWSC 1344, 74 NSWLR 550 at [7], [57]. Rule 7.8 does not itself appear to be a source of power to join or substitute parties. The parties' submissions analysed cases cited in the commentary to the rule in Ritchie's Uniform Civil Procedure Rules NSW and other cases concerned with the rule r 7.8 or its precursors, but the cases do not go so far as to suggest that the rule itself is a source of power to join or substitute a party. It is unnecessary to consider r 7.8 further. Rule 2.1 67 The applicants alternatively submit that r 2.1 permits the Court to order the substitution of parties. There is no authority for that proposition and I do not think that r 2.1 goes so far. A relinquishment condition? 68 There is a residual question whether, as the defendants submit, any order for removal, joinder or substitution should be made subject to a condition that Mr Ford forever relinquish his personal claim against the defendants. Such orders are sometimes made when leave is granted to discontinue proceedings. The defendants argue that the condition is appropriate because they enjoy a forensic advantage in the separate questions as he is a "sophisticated investor". I think this is an insufficient reason. Any such forensic advantage is irrelevant to the definition of the common issues or to his capacity to act as the investors' representative. To allow him to remain as a represented person does not prejudice the defendants. I do not think that the proposed condition is justified in the circumstances of the present case provided that the defendants are adequately protected in costs. Here the claims of a large group of investors are incorporated in the proceedings. One of them had to be the representative plaintiff. Mr Ford agreed to be that person but is now unwilling to continue in that role, primarily because of serious health problems. Consequently, he can no longer adequately represent and protect the interests of the group. Another member of the group, Mr Michell, is willing to take his place. Mr Ford wishes to sink back into the represented group. In the circumstances, in my view, he should be allowed to do so without suffering the loss of his own claim, but on terms as to any wasted costs. COSTS 69 The applicants accept that Mr Ford should be liable for costs thrown away relating to individual aspects of his claim by reason of the substitution of Mr Michell, and that Mr Michell should be liable for all costs (including past costs) in respect of the common issues affecting the claims of the 2003 Investors. 70 I note that in Tongue v Tamworth City Council [2004] FCA 1702, 141 FCR 233 at [53] Jacobson J, in substituting a representative plaintiff who was in ill health, declined to attach a condition (urged by the incoming representative plaintiff) that the outgoing representative plaintiff be solely liable for past costs. 71 As requested by the defendants, I will give them the opportunity to be heard on costs before making any costs order. CONCLUSION 72 The applicants have been successful. I direct the parties to bring in agreed or competing short minutes of order to give effect to these reasons and for costs by 8.30am on 8 June 2010. The proceedings will be listed before me at 9:30am on that date to make orders. The exhibits may be returned.

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