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[2010] FCA 176
procedural. The Court ordered disclosure of the 16 institutional investors' litigation funding agreements, allowing redaction of confidential information not relevant to the competency issue. It rejected the...
The Court said it could order group members to provide discovery under s 33ZF, but group members are generally meant to play a limited, passive role in a class action. It therefore ordered institutional investors to provide funding agreements because those documents could clarify a disputed capacity issue that needed prompt resolution before limitation periods expired. It did not order them to provide the broader trading and loss-mitigation records requested to assess damages and assist settlement. The Court also addressed further discovery from the respondents and allowed the applicants to amend their case summary.
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This was an interlocutory judgment in a shareholder representative proceeding concerning alleged disclosure failures relating to losses on the Wembley Stadium construction project. The proceeding began on 18 December 2006. The named applicants and the group they represented had acquired securities in one or other Multiplex company. The allegation, described by the Court in broad terms, was that Multiplex had failed to disclose material information about Wembley Stadium losses, contrary to the ASX Listing Rules and the Corporations Act 2001 (Cth). Damages or compensation were the principal relief sought ([1]).
The matter was listed for trial to begin in the first week of October 2010. The judgment resolved several outstanding procedural disputes while the parties prepared for trial ([2]). The applicants sought further discovery from the respondents, including searches using other key words and materials concerning certain transactions and communications ([3]-[6]). The Court decided not to resolve every category individually. Instead, it directed discovery of documents on which the respondents intended to rely at trial and documents with significant probative value concerning the issues in the case summaries. It did not require new searches for the second category, limiting the exercise to documents already identified as relevant ([10]-[11]).
A separate issue concerned Multiplex's proposed reliance on the belief of two senior figures, Mr Henderson and Mr Roberts, that increased Wembley Stadium costs could be recovered from subcontractors. Multiplex's defence was that this reasonable belief meant the project's overall profitability was not affected and therefore no disclosure of losses was required ([8]). Multiplex had not decided whether to deploy legal advice on the relevant matters. The Court said the required discovery would oblige Multiplex to decide whether to rely on that advice, after which it would deal with the applicants' waiver argument if necessary ([9], [12]). It deferred other privilege issues until the respondents filed supporting evidence ([13]).
The main issue of wider procedural interest was Multiplex's request that institutional investors who were group members, but not named applicants, disclose litigation funding agreements and trading or loss-mitigation information ([14]). The Court ordered disclosure of the 16 agreements, subject to redaction of confidential information that did not bear on the competency issue ([23]). It did not order the requested trading and mitigation information on the grounds advanced ([27]-[35]).
Finally, Multiplex objected to proposed amendments to the case summary. The Court considered that one objection was, in substance, a late strike-out application and declined to resolve it at that stage. On the reliance issue, applicants' counsel undertook to obtain instructions from institutional investors. The named applicants were given leave to amend ([37]-[40]). Paragraph [41] records that suggested minutes of orders were to be provided to the parties for comment.
The Court began with the statutory source of power. It identified s 33ZF(1) of the Federal Court Act 1976 (Cth) as allowing an order the Court considered appropriate or necessary to ensure justice in the proceeding ([15]). It was not persuaded that Federal Court Rules O 15A r 8 provided the required basis. The claims in the relevant proceeding were those of the named applicants, and the Court did not read the rule as permitting non-party discovery concerning claims made by non-parties. If group members were treated as part of the proceeding for that purpose, they would not be non-parties and O 15A would not apply ([15]).
The existence of power did not resolve whether it should be exercised. The Court described Part IVA as designed to require little or no active involvement by group members. Their role was principally to take the benefit, or bear the burden, of findings on common questions. A group member seeking money relief would generally provide particulars of the amount claimed after common questions had been resolved, potentially in a separate action ([16]). From that understanding the Court stated its central threshold: “there must be some compelling reason” before group members should be required to go beyond their otherwise passive role ([17]).
The funding agreements met that threshold in the circumstances. The group was “closed”: its defining characteristics included investment in relevant Multiplex securities between 2 August 2004 and 30 May 2005, loss from the alleged breaches, and having entered into a litigation funding agreement with International Litigation Funding Partners, Inc. by the commencement of the proceeding ([19]). Sixteen institutional investors accounted for more than 90 per cent of the Multiplex securities during the relevant period. Many had acquired securities as agents, trustees or custodians ([20]).
Multiplex wanted the agreements to determine whether institutional investors had signed on behalf of particular principals or trusts. It might argue that an investor could not maintain a claim for a principal or beneficiary unless the agreement had been entered into in that capacity ([21]). The applicants disputed that proposition, but accepted that the point should be resolved quickly because limitation periods were due to expire and an amendment, if required, could only cure the issue before expiry ([22]). The Court therefore ordered the agreements disclosed, allowing redaction of confidential material that did not bear on the competency argument ([23]). The judgment resolved the discovery question, not the underlying disputed competency question.
The trading-information request was different. Multiplex sought details of institutional investors' trading and whether arrangements such as hedging or securities lending had reduced their exposure or loss ([24], [26]). Applicants' solicitors had supplied spreadsheets summarising group members' trading based on information they had provided. Multiplex questioned the accuracy of the underlying information, but the Court did not suggest the solicitors had inaccurately summarised it ([25]).
The Court rejected the proposition that the information would inevitably be required later. Some institutional investors might opt out, and trial findings might preclude group members from pursuing damages claims ([28]). Nor was the burden necessarily modest: the applicants had provided evidence that the exercise could take considerable time and expense ([29]). Most importantly, a settlement rationale did not, on its own, justify the order. The Court recognised that defendants in class actions commonly face uncertainty about potential group-member claims ([31]). It also emphasised caution about court orders interfering with the private process of mediation. Although s 33ZF might support an order in aid of mediation where asymmetric information could lead to an unfair settlement, good reason was needed, particularly when discovery was sought from group members ([32]).
The Court did not know whether the mediator considered the quantum information necessary. It referred to an earlier indication that a request could be brought if the mediator required information for mediation, but noted that it had not been told that this was the mediator's view ([33]-[34]). It said it would be inclined to consider some form of order if the mediator could indicate, without breaching confidentiality, that such an order would assist. Any order would not be as burdensome as the one sought ([35]).
The judgment does not set out a full account of the law before the decision, nor does the supplied text identify later decisions applying it. It should therefore not be read here as establishing a comprehensive history of group-member discovery or the subsequent development of that law.
Within the reasoning in this judgment, the key statutory distinction is between the Court's power and its exercise. Section 33ZF(1) was a source of power to order discovery from group members. But the existence of that power did not make discovery routine. The Court framed Part IVA as a regime in which group members ordinarily have little or no active involvement, and required a compelling reason before compelling them to go further ([15]-[17]). That reasoning gives practical weight to the group members' procedural position when assessing an interlocutory discovery application.
The judgment also distinguishes discovery directed to resolving a concrete, time-sensitive issue from discovery sought to improve a defendant's general assessment of potential damages. The funding agreements bore on a competency argument which the applicants accepted should be resolved quickly, given limitation periods ([21]-[23]). The trading and mitigation materials were sought to assess quantum and potentially assist settlement, but the Court found the supporting reasons insufficient in the circumstances ([26]-[35]).
On mediation, the Court did not rule out s 33ZF orders. It contemplated that such an order might be appropriate where information asymmetry could lead to an unfair settlement, but required good reason and cautioned against judicial interference in private negotiations ([32]). The Court's observation that it was unclear and perhaps doubtful whether general discovery powers, absent s 33ZF, could be used to aid mediation was expressly tentative ([32]). The judgment thus supports a careful, context-specific reading, not a categorical rule that mediation can never justify discovery.
At [15], the Court identifies s 33ZF(1) as a source of power, while explaining why it did not rely on O 15A r 8. In plain English, the Court considered the statutory power capable of reaching group members even though the ordinary non-party discovery rule did not fit the claims in this particular proceeding.
At [16], the Court describes group members as mainly participating through the consequences of decisions on common questions. Their individual money claims may require later details, and may be dealt with separately. The point is not that group members can never be asked for information, but that their normally limited role matters when a court considers requiring it.
At [17], the Court states the controlling threshold: “some compelling reason” must be shown before group members are required to go beyond their otherwise passive role. This is the judgment's clearest general statement about the approach to orders of this kind.
At [23], the Court applies that approach to the 16 funding agreements. In plain English, the agreements were ordered because they could clarify whether the investors had joined the funding arrangement in the capacity necessary to support claims for principals or beneficiaries. Redactions were permitted only for confidential information unrelated to that issue.
At [32], the Court says it should be careful before making orders that interfere with private negotiations once mediation is underway. It recognises a possible role for s 33ZF where information asymmetry could make a settlement unfair, but says good reason is required. This is a qualified caution, not an absolute bar.
At [35], the Court explains what might change its assessment: an indication from the mediator, made without breaching confidentiality, that information would assist. Even then, the Court envisaged a less burdensome order than the one Multiplex sought.
The reasoning is most directly relevant where a party seeks discovery from group members who are not named applicants in a Part IVA proceeding. The Court's approach requires attention to the statutory basis for the order, the group members' generally passive role, the purpose of the requested material, and the burden of producing it ([15]-[17], [29]).
The funding-agreement order arose in a particular combination of circumstances: a closed group defined partly by funding agreements, institutional investors that often held securities for others, a disputed question about the capacity in which the agreements were signed, and approaching limitation periods that could constrain a later amendment ([19]-[23]). The decision supports treating those specific features as material. It does not determine whether the competency argument itself was legally correct.
For discovery sought to quantify group-member losses or improve settlement assessment, the judgment highlights several questions. Might group members opt out? Could findings at trial affect whether their damages claims can proceed? Is the production exercise genuinely onerous? Is the information sought to assist an ongoing mediation, and has the mediator indicated that its absence is impeding resolution? ([28]-[35]). Those are features the Court considered in this matter, rather than an exhaustive checklist of legal requirements.
The case also has a distinct procedural application to mediation. It recognises that information imbalance may matter, while placing weight on the confidential, consensual character of mediation and the Court's limited knowledge of what is occurring within it ([32]-[35]). A request supported by a mediator's indication was contemplated, but the Court did not make such an order on the record before it.
The judgment text supplied here contains no subsequent decisions and no account of later judicial treatment. Accordingly, it is not possible from this source alone to say whether later courts followed, applied, distinguished, or limited the reasoning in P Dawson Nominees. The case is a 2010 Federal Court decision of Finkelstein J; the text establishes what that judge decided in this proceeding, not how later courts have treated it.
For research purposes, the most relevant propositions to check against later authorities would be the availability and limits of s 33ZF as a basis for discovery from group members, the “compelling reason” formulation at [17], and the treatment of discovery sought to facilitate mediation at [32]-[35]. Those are research questions prompted by this judgment, not claims about subsequent authority.
Several matters were left unresolved. First, the Court did not determine whether institutional investors could maintain claims for principals or beneficiaries if their funding agreements had not been executed in the relevant capacity. It ordered disclosure so the competency issue could be addressed promptly; it did not decide that issue ([21]-[23]).
Second, the Court did not decide the applicants' privilege-waiver argument. Multiplex had not yet decided whether to rely on legal advice, and the Court said it would deal with waiver if Multiplex ran the reasonable-grounds defence without tendering that advice ([8]-[12]). It also deferred other privilege claims until supporting evidence was filed ([13]).
Third, the judgment leaves open whether a later, more limited quantum-information order would be appropriate if the mediator indicated that the information would assist. The Court said it would be inclined to make some kind of order in that circumstance, but no such indication was before it ([34]-[35]).
Fourth, the Court did not resolve the substantive allegations about disclosure, liability, causation, or the amount of any group-member loss. Nor did it decide whether reliance would ultimately be established individually or whether the efficient markets hypothesis would be used. Those issues remained part of the case preparation and trial context described at [38]-[39].
Finally, the reasons do not record the completed form of the orders. The parties were to receive suggested minutes for comment ([41]). This judgment therefore explains the Court's reasons and intended procedural outcomes, but the text does not provide the final settled wording of every order.
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REASONS FOR JUDGMENT 1 This action was commenced in 18 December 2006. It is what is commonly referred to as a shareholder class action. The named applicants and the group they represent purchased securities in, or issued by, one or other Multiplex company. The complaint which the action seeks to vindicate is, speaking loosely, that, in breach of the ASX Listing Rules and the Corporations Act 2001 (Cth), the Multiplex companies failed to make adequate disclosure of losses suffered on the Wembley Stadium construction project, being information that was material to the value of the securities. The principal relief sought is damages or compensation. 2 For a number of reasons, including the complexity of the issues in the case and, more importantly, a challenge to the structure of the proceeding that had to be resolved by a Full Court, the action could not be set down for trial as early as it might have been. Now, with most of the problems out of the way, that position has been remedied. The trial will begin in the first week of October 2010. That gives the parties sufficient time to get ready. Nonetheless, there are still some interlocutory disputes that must be sorted out.
Discovery sought by Applicants 3 The applicants seek further discovery from the respondents. By way of background, the parties have been co-operating about discovery from the outset. While disputes have arisen from time to time, often about the extent to which the respondents were required to search for discoverable documents, those disputes have been, in the main, satisfactorily resolved. As many of the respondents' documents are stored electronically, the respondents were able to identify relevant documents by key word searches and, for the most part, the parties have been in agreement regarding categories for discovery, the key words to be used and the sources of documents to be searched. Some 19,000 documents have already been discovered by the respondents in several tranches. 4 The applicants now seek further discovery. This is partly because they contend that the respondents' discovery to date has been inadequate. It is also because the applicants have identified documents not covered by existing categories for discovery which they claim are relevant. The relevance of those documents, the applicants claim, has only recently become apparent after receiving the respondents' case summary. 5 The applicants seek discovery of 16 categories of documents. For reasons which will become apparent, I do not propose to consider each category in detail. Broadly, the categories are as follows. The first involves further electronic searches being undertaken using different key words. The second category is relevant correspondence passing between Mr Noel Henderson and Mr Andrew Roberts, a director and the chairman, respectively, of Multiplex. Several further categories relate to certain transactions colloquially described by the applicants as the 'Gibraltar transaction' and the 'Qantas Hangar Project'. Finally, there are several categories of miscellaneous documents sought, including some specific documents. 6 The applicants also seek an order that the respondents discover any document which the "Court determines is not properly the subject of a claim for privilege". The applicants complain that the respondents have incorrectly claimed privilege over a number of documents. Furthermore, the applicants argue that the respondents have waived privilege over legal advice by putting that advice in issue. 7 Multiplex asserts that it has documents containing legal advice which are protected from inspection by privilege. It has not, as yet, established this claim by evidence. 8 One part of Multiplex' defence (most likely a central part) is the proposition that Messrs Henderson and Roberts believed on reasonable grounds that any increase in the cost of the Wembley Stadium project was recoverable from the relevant subcontractors and, accordingly, the overall profitability of the Wembley Stadium project would not be affected. Hence no disclosure of losses was required to be made. The applicants claim that this part of the Multiplex defence results in an 'issue waiver' by Multiplex. 9 Multiplex reject the waiver claim. In correspondence, Multiplex' solicitors have advised that they will be leading substantial lay and expert evidence to establish the reasonableness of Mr Henderson and Mr Roberts' belief. They go on to say that "our client has not yet made a decision whether to deploy any legal advice which it had received in respect of Multiplex UK's third party claims and its defence of the proceeding (and thereby waive legal professional privilege in that advice)". 10 It seems to me that at this stage of the litigation, where the parties are well advanced in preparing for trial and must be familiar with the key documents that bear upon the issue of liability, it is not necessary to require Multiplex to carry out further searches to ascertain whether more discoverable documents exist among their files. I am sure that, between them, Multiplex and its solicitors know precisely what the key documents are. Accordingly, what I propose to do, as I foreshadowed during the course of the hearing, is to require Multiplex to discover two categories of documents being (1) all documents upon which they intend to rely at the trial; and (2) all documents which have significant probative value in relation to the issues raised in the parties' respective case summaries. 11 In relation to category 2 documents, I will not require Multiplex to undertake further searches. Rather, Multiplex' obligation to discover category 2 documents will be satisfied by an examination of the documents which the respondents have already identified as relevant, and a selection of the documents with significant probative value from that group. If, in the unlikely result, this method of discovery turns out to be insufficient, the applicants may renew their application. 12 A consequence of requiring category 1 discovery is that Multiplex must decide whether they will rely on the legal advice they received in relation to the Wembley Stadium project. If they decide to run the 'reasonable grounds' defence without tendering that advice, I will then deal with the waiver argument. 13 As regards the claim for legal privilege in respect of other documents, I will, as I indicated at the hearing, defer dealing with that issue until the respondents put on evidence in support of the claim. That evidence should be filed by 11 March 2010.
Discovery sought by the Respondents 14 Multiplex also seek orders for discovery. In particular Multiplex asks that certain group members, the institutional investors, discover (1) litigation funding agreements and (2) certain trade information. 15 Before considering the specific documents sought by Multiplex, it is necessary to consider whether a court has power to order discovery from a group member in a class proceeding. Section 33ZF of the Federal Court Act 1976 (Cth) is a source of such power. That section permits the court to "of its own motion or on application by a party or a group member, make any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding." Multiplex also rely on O 15A r 8 of the Federal Court Rules, pursuant to which a non-party may be ordered to give discovery of a document "which relates to any question in the proceeding". I am not convinced that the orders can be made under the rule. In the instant case, the relevant proceeding concerns claims made by the named applicants against Multiplex. I do not read the rule as permitting non-party discovery in relation to 'claims' made by non-parties. If the 'proceeding' included the group members, they would not be non-parties and O 15A would have no application. 16 Although there is a power to make the orders sought under s 33ZF(1), it is another matter whether that power should be exercised. The starting point is that the class actions regime under Part IVA of the Federal Court Act is designed to require little or no active involvement by group members. A group member is a group member principally for the limited purposes of taking the benefit, or suffering the burden, of findings on common questions (ie questions that are common to the claim brought by the named applicant and claims that may be pressed by group members). In an action where money relief may be sought by a group member, the group member will generally only be required to provide specifics about the quantum of his or her claim after the common questions have been resolved and that may be in a separate action. 17 Given the intent of the class action regime, there must be some compelling reason demonstrated before a court will order group members to go beyond their otherwise essentially passive role. 18 With these principles in mind, I turn now to the categories of documents of which discovery is sought by Multiplex.
Litigation funding agreements 19 To understand why Multiplex seeks these agreements it is necessary to begin with the definition of group members. Section 33H of the Federal Court Act requires an application commencing a representative proceeding, or a document filed in support of such an application, to describe or otherwise identify the group members to whom the proceeding relates. In this action the defining characteristics of group members are, broadly, that each (1) invested in certain Multiplex securities during the period between 2 August 2004 and 30 May 2005; (2) suffered loss and damage as a result of Multiplex' alleged breaches of the Corporations Act and ASX Listing Rules; and (3) had, at the commencement of the proceeding, entered into a litigation funding agreement with International Litigation Funding Parners, Inc. These characteristics create what has come to be known as a "closed group" class action. 20 It is common ground that of the more than 100 group members, sixteen are institutional investors who, between them, account for more than 90 per cent of Multiplex securities during the relevant period. It is also common ground that many of the institutional investors acquired their securities in Multiplex as agent, trustee or custodian. Indeed the litigation funding agreement which each group member has executed asks them to state whether their securities were acquired on trust and to identify the beneficial owner. 21 Multiplex seeks discovery of the funding agreements executed by each institutional investor. They wish to ascertain whether each institutional investor executed the funding agreement on behalf of particular principals or trusts. What Multiplex may ultimately assert is that an institutional investor can only maintain a claim on behalf of a principal or beneficiary if it entered into the funding agreement on behalf of that principal or beneficiary. If it did not enter into the funding agreement in that capacity it may not, so the argument goes, prosecute a claim on behalf of a principal or beneficiary, at least without court permission. 22 The contention that an institutional investor may not be entitled to bring a claim in respect of securities purchased as agent, trustee or custodian between 2 August 2004 and 30 May 2005 is hotly disputed. Nonetheless, the applicants accept that it is a contention that should be resolved quickly. Limitation periods are due to expire and if the point is a good one it can only be cured, if at all, by an amendment before the limitation period has expired. 23 In these circumstances it is appropriate for the institutional investors to disclose copies of the sixteen litigation funding agreements. All confidential information may be redacted, provided it does not bear upon the competency argument.
Trading information 24 The second category of documents in respect of which discovery is sought are those which bear on the quantum of the institutional investors' claims. The respondents are seeking that each institutional investor produce documents which broadly (1) detail the institutional investor's trading in Multiplex securities, or (2) show whether the investor has entered into any arrangement which has mitigated or reduced the loss suffered on the acquisition of Multiplex securities. 25 By way of background, the applicants' solicitors have already provided considerable detail concerning all group members' trading activities, in the form of spreadsheets, prepared from instructions received from the group members. Multiplex question the accuracy the information. It is not, of course, suggested that the solicitors have not accurately summarised the material provided by the group members. Rather, the burden of the complaint is that group members have not been as careful as they should have been in providing information to the solicitors. 26 In any event, none of the information thus far provided bears on whether an institutional investor has been able to reduce its exposure to Multiplex securities by hedging strategies, securities lending agreements or the like. In the absence of this information Multiplex say, no doubt quite fairly, that it is unable to assess the value of each institutional investor's claim. Further information about the value of the claims would, Multiplex argue, put Multiplex in a better position to decide about the future conduct of their defences, including whether to settle. 27 Multiplex put a number of arguments in support of their discovery application. I am not persuaded by those arguments for reasons I will now explain. 28 Multiplex firstly argue that it is inevitable that, at some stage of the proceeding, the group members will be required to provide the information sought. As such, it is a matter of timing as to when the information is provided, and the most convenient time for the information to be provided is now. I do not accept that it is inevitable that the information will be provided. Some institutional investors may opt out of the proceeding. More importantly, if the case goes to trial findings made may preclude the group members pursuing any claim for damages. 29 Multiplex next argue that the discovery order is warranted because group members will not be prejudiced in complying with the order. The order, Multiplex asserts, is targeted at a limited number of institutional investors who would "presumably" have sophisticated document management systems in place. The applicants, however, have put on evidence that the discovery exercise would be oppressive, requiring the institutional investors to go to considerable time and expense. In the circumstances, on the basis of that evidence, discovery has the potential to be onerous, which obviously tends against making the order. 30 Multiplex' key argument is that discovery should be ordered to assist Multiplex to make an informed assessment of any settlement proposal. In this regard, I understand that the parties have been engaged in mediation for some time. Nonetheless, I reject Multiplex' argument for several reasons. 31 First, it is a common, if not an inevitable, feature of class actions that the defendant will be faced with uncertainty regarding the quantum of potential group member claims. This is partly because of the essentially passive role of group members, already discussed. In many class actions, this uncertainty will be compounded because the identity of the group members is not known. True their identity may be discovered, sometimes with a good deal of effort. But group members are under no obligation to identify themselves and the named applicant, if he does not know who they are, has no obligation to seek them out. 32 Second, a court should be cautious in becoming involved in the essentially consensual process of mediation. In civil litigation, discovery rules exist as an aid to the parties by enabling them to prosecute or defend their case, as far as may be possible, with all material information to hand. Discovery at an early stage of litigation is often warranted to allow parties to go to mediation armed with facts that will enable them to assess their respective merits. Once parties are in mediation, however, a court should be careful before making orders which interfere with private negotiations. It is unclear and perhaps doubtful that, absent s 33ZF, the court's general power to order discovery can be used to aid mediation. Under s 33ZF, at least, it may be appropriate to make orders in aid of mediation, for example where the parties face asymmetric information which may lead to an unfair settlement. But there must be good reason for doing so, particularly where the discovery is being sought from group members. 33 In determining whether to make an order under s 33ZF to aid mediation, the problem for the judge is that, for very good reason, he or she cannot be told what is happening at the mediation. This makes it difficult for the parties to explain why discovery will assist a resolution of the dispute. When discovery as to quantum was first raised some time ago, I was reluctant to make any order. I did, however, say that: "[I]f you go to mediation and the mediator thinks it's necessary, for purposes of the mediation, that more information is produced, and it can't be sorted out, then during the course of the mediation somebody can come to me, you can come to me and say 'The mediator would like this information and I need an order for that purpose'." 34 Now, while I have been told that the parties are involved in a mediation that is being conducted before a retired superior court judge, I know nothing about the progress of that mediation. In particular, I do not know whether the mediator is of opinion that lack of information about quantum of group members' claims is standing in the way of a settlement. 35 If the mediator were to be of that opinion, I would be inclined to make some kind of order requiring the provision of funding information, though not making one as burdensome as that sought. I see no reason why the mediator is not able to indicate, in a way that will not breach his obligations of confidence, that such an order would assist.
Amendment to Case Summary 36 The named applicants wish to amend their case summary. Multiplex object to two proposed amendments. 37 First, Multiplex object to amendments relating to 'April 2005 Wembley Information' and 'May 2005 Wembley Information'. These amendments are not true amendments, in that they do not propose any new wording, but simply move existing allegations to a new paragraph. Multiplex has already responded to those existing allegations. In my view, it is too late in the day to deal with what is, in substance, a strike-out application. The issues raised by the case summary to which exception is taken will be dealt with at the trial. 38 Multiplex also object to a proposed amendment which seems to keep open a claim based on reliance by group members. The applicants, if successful on the issue of liability, may seek to prove causation in a number of ways. One way is to rely on the 'efficient markets hypothesis', in which case it may be unnecessary to prove reliance. Another way is by proving reliance. The applicants' amended case summary pleads reliance. Following that plea, the applicants propose to include a note saying: (Note: for the avoidance of doubt, any particulars regarding reliance by Group Members will be provided after the trial of the Applicants' claims). 39 Multiplex complain that they are entitled to know whether group members will be pleading reliance as part of their case. At the hearing, counsel for the applicants undertook to obtain instructions from institutional investors about this. This will resolve much of the uncertainty about which Multiplex complain. 40 In light of the above, the named applicants will be given leave to amend.
Orders 41 The parties submitted short minutes of orders with certain parts to be completed. The parties will be provided with suggested minutes of orders for their comment. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.
P Dawson Nominees Pty Ltd
Brookfield Multiplex Limited
The Court ordered disclosure of the 16 institutional investors' litigation funding agreements, allowing redaction of confidential information not relevant to the competency issue. It rejected the requested trading and mitigation discovery on the material then available, while indicating that a more limited order might be considered if the mediator said the information would assist. It directed further discovery by the respondents, deferred the privilege issue pending evidence, and granted leave to amend the case summary ([10]-[13], [23], [27]-[35], [40]-[41]).