HIS HONOUR: This matter is before me this morning again by reason of a current dispute that exists between the parties as to the form of short minutes of order as a result of argument which took place before me on 31 August 2020.
On that occasion Mr Kirk SC appeared with Mr Prince and made application for a separate determination of a question in the Court of Appeal, which question has been set out as paragraph 1 of what is described as the first cross-summons. That question is as follows:
"A declaration that on its true construction s 173 of the Civil Procedure Act 2005 (NSW) does not authorise the making of an order by the Court requiring group members in this matter who have not signed the litigation funding agreement with Regency Funding Pty Ltd to pay an amount to that funder out of the proceeds of any settlement by way of return on expenditure, commission or other similar remuneration to the funder".
On the last occasion the argument which took place before me centred around the question of whether there was in fact a real controversy and whether leave should be given for the bringing of the cross-summons. On that point it was put by Mr Kirk SC that the cross-summons could indeed have been the subject of separate proceedings and if that were to eventuate then no question of leave would arise. On the other hand, Ms Holmes, who appeared for the plaintiffs with Ms Mansted, indicated that I should not grant leave for the filing of the cross-summons. It was belated and it would have a serious impact on the ordinary conduct, not only of the mediation which is due to take place in March of next year, but of the litigation which is due to commence in May.
The basis upon which leave was sought was that on the materials then before the Court, which Mr Kirk SC took me to in some little detail at pages 2 and following of the transcript of 31 August, there was at least equivocation on the part of the plaintiffs as to whether a common fund order would be sought either as part of some process or, alternatively, would in some way be some precondition to negotiations during mediation in March of next year. I was persuaded on the basis of the materials then before me, particularly given the fact that there was still on foot an interlocutory common fund motion, that there was at least some controversy which would be sufficient to enliven an application for declaratory relief.
Ms Holmes sought instructions and the matter was conducted on the basis of the materials then before me. Having granted leave for the filing of the cross-summons and having indicated that I would be disposed to send a separate question to the Court of Appeal, I gave Ms Holmes' client an opportunity to file some materials because I did discuss in the transcript the possibility of the issue being moot or premature which I referred to at page 8 of the transcript of 31 August.
Ms Holmes' client has taken advantage of that and I have now before me an affidavit of Mr Damien John Scattini of 4 September 2020. Mr Scattini is a solicitor at the plaintiffs' law firm and is the solicitor on the record for the plaintiffs who has the care and conduct of the proceedings.
In paragraph 5 he says a number of things which are of significance. I will not set them out in detail, but in effect he says neither he nor anyone else on behalf of the plaintiffs has had any substantial discussions, has come to any view as to whether there would be any preconditions for settlement, or has evinced any intention to seek consent for any particular arrangement. He further indicated in paragraph 6 that on 4 September 2020, the date of his affidavit, he had informed the defendant's solicitors that he would consent to orders dismissing the interlocutory common fund motion.
This morning I invited both sides to engage in some discussion about whether having granted leave for the filing of the cross-summons and having indicated my intention on the last occasion to state the question to the Court of Appeal, in the light of Mr Scattini's material there was a material change in circumstances such that I should effectively revoke the leave that I granted.
Mr Prince, again for BMW this morning, in my view powerfully submits that the utility in doing so would be limited because his client could commence these proceedings separately and then that would perhaps potentially give rise to what I might describe as satellite litigation, namely an application for those proceedings to be struck out or summarily dismissed. On that basis alone, and if I may say from a pragmatic point of view, I do not think there is any utility in revoking leave which I have already given. The real question though is whether on the face of the present materials, given Mr Scattini's evidence in particular, there is a matter that I should set by way of separate question to the Court of Appeal.
As trial Judge in the matter and as Judge on this motion it is my primary responsibility to form a view as to whether I think there is an issue that is susceptible to declaratory relief. I do not propose this morning to go into the authorities in any great detail but it is conventional wisdom that declaratory relief must be directed to the determination of legal controversy and not to answering abstract or hypothetical questions and the person seeking the relief must have a real interest and the relief will not be granted if the question is purely hypothetical. That notion or concept has been well worn in the authorities such as Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581- 582 and Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at [48].
Recently in the New South Wales Court of Appeal in Fordham v The Environment Protection Agency [2018] NSWCA 167, their Honours, Meagher and Leeming JJA and Sackville AJA, overturned a decision of Molesworth AJ in the Land and Environment Court who refused declaratory relief on the basis that because there was no prosecution in that matter extant there was no issue between the parties. The Court of Appeal took the view that the question of immunity under s 212(3) in Protection of the Environment Operations Act 1997 (NSW) was or did in fact in the circumstances then presented to the parties create a real controversy capable of being the subject of declaratory relief and the Court of Appeal went on to hear the matter by way of rehearing.
In this case I think there is a fine balance. There is no doubt in my mind that any defendant in any class action, given the High Court's decision in BMW Australis Ltd v Brewster [2019] HCA 45; (2019) 94 ALJR 51, has a real interest in the question of whether there is in fact jurisdiction to make a common fund order. I am persuaded that Mr Scattini's material does, to a very large extent, take away some of the basis upon which previously I thought a controversy, a real controversy, arose.
I am persuaded this morning that just by way of fine balance that Mr Scattini's material does not sufficiently in my mind take the issue off the table so as to remove in a practical sense a controversy between the parties and on that basis I would refuse the application to revoke leave which I gave for the filing of the first cross-summons. In my view I would make the orders in paragraphs 1 and 2 of the short minutes of order.
I will immediately confer, once this transcript is prepared, with the President of the Court of Appeal and I will ensure, as far as I am able, that this matter will receive sufficient expedition in the Court of Appeal given the fact that the mediation is to take place in March of next year. I am acutely aware of the amount of work that has been going on in the preparation of this case. I am in the unique position to make that comment because I have case managed this matter from the very outset, not only in relation to BMW but in relation to other manufacturers. I am acutely aware of nipping this issue in the bud as soon as can reasonably be done so that the parties know well in advance of March of next year what they can or cannot put on the table. To leave this matter until March of next year to see what might eventuate in the course of the mediation would be, in my view, entirely disruptive and although the present situation may cause this disruption and added expense of the parties, the disruption which would be caused if this issue arose for the very first time in March of next year may well have an impact on the possibility of the matter proceeding in May of next year.
It seems to me that given the fact that it is only one of the defendants who has taken this point, it is after all a discrete issue, it may have much more significance beyond merely BMW. It does seem to me that the matter should be given as much expedition as the Court of Appeal thinks is necessary in the circumstances.
So for those reasons I refuse the revocation of leave and I will make the orders in the short minutes.
[3]
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Decision last updated: 16 September 2020