Parkin v Boral Limited

1. The parties send up short minutes of order reflecting the matters discussed at the case management hearing. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

(Delivered ex tempore, revised from the transcript)

LEE J: 1 I called a case management hearing today to resolve disagreement as to the contents of a notice proposed to be provided to group members pursuant to s 33X(5) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). 2 For reasons set out in my earlier judgments resolving a multiplicity dispute (CJMCG Pty Ltd as Trustee for the CJMCG Superannuation Fund v Boral Limited [2020] FCA 914 and CJMcG Pty Ltd as Trustee for the CJMcG Superannuation Fund v Boral Limited (No 2) [2021] FCA 350; (2021) 389 ALR 699), I permanently stayed one of three competing class actions (the CJMcG proceeding) and, in relation to the remaining two proceedings (the Parkin proceeding and the Martini proceeding), determined the Parkin proceeding was the best vehicle through which to advance group member claims, and that the Martini proceeding should proceed with a closed class. 3 Following further developments, the Court reserved two questions as to power for determination by the Full Court pursuant to s 25(6) of the FCA Act and r 30.01 of the Federal Court Rules 2011 (Cth): see Parkin v Boral Ltd [2022] FCAFC 47; (2022) 291 FCR 116 (at 116-121 [1]-[11] per Murphy and Lee JJ, with whom Beach J agreed) and, by way of background, Parkin v Boral Limited (Opt Out Notices) [2021] FCA 478 (at [19]-[21] per Lee J). 4 Relevantly, the second question concerned whether the Court had power pursuant to s 33X(5) of the FCA Act to order that, unless group members registered or opted out by a certain date, they would remain group members but would not be able to seek the benefit of any settlement (subject to approval by the Court) that occurred "before final judgment": Parkin v Boral (at 116-120 [2]-[7]). The Full Court answered this question in the affirmative: Parkin v Boral (at 145 [112], 150 [135], 153 [156]). 5 Today, orders will be made referring the whole of the proceedings to mediation pursuant to s 53A of the FCA Act, to commence no later than 31 May 2024. The applicant in the Parkin proceeding wishes to inform group members of a registration regime which foreshadows an order will be sought such that if group members do not register by 12 January 2024, they will remain group members but will not be entitled to participate in any settlement that may be agreed by the end of July 2024. Hence the "class closure" is for a quite limited period and the class will open again by August 2024. 6 The respondent enthusiastically agrees that a "soft closure" order is appropriate but submits the class closure order should extend to final judgment or, alternatively, four weeks after the initial trial. The respondent's rationale is that the time at which "the settlement planets" align varies from case to case, and views as to prospects are liable to change up to and during any initial trial. In pursuit of this submission, senior counsel for the respondent noted the second reserved question in Parkin v Boral dealt with a proposed class closure order in the terms the respondent presently suggests. 7 Two points warrant emphasis. 8 First, it must be remembered that in Parkin v Boral, the Full Court was concerned with issues of power in s 33X(5) of the FCA Act. By contrast, here the Court is concerned with the discretion to provide notice to group members pursuant to s 33X(5). The reasons of the Full Court should not be read as providing an indication as to the terms of any notice to be given in a particular case. 9 Secondly, as the parties recognise, the terms of the notification and method of distribution require close attention as a failure to respond to the notification may have adverse consequences for group members. There is nothing novel or unusual about this. It is fundamental to the operation of the opt out regime provided for by Pt IVA of the FCA Act that the legislature considered notification to group members in a manner and mode approved by the Court was the appropriate mechanism to facilitate and require an informed choice to be made as to a group member's rights, including the opportunity to withdraw from or participate in a class action. Notification, including as to opt out, is the very mechanism selected by the Parliament to facilitate efficiency and access to justice, and allow the Court to fulfil its protective and supervisory role in relation to group members. 10 In this respect, it is worth noting that inadvertence to notices is always a risk. If an individual group member wishes to: (a) opt out; (b) obtain an individual determination of their claim against the respondent at or after any initial trial; or (c) wishes to participate in a settlement, the group member will always have to take a positive step. Hence, absent dismissal of the class action by reason of an adverse adjudication of a determinative common issue at an initial trial accompanied by the making of a s 33ZB order binding group members to this adverse outcome, a group member is always required to take a positive step to have their claim resolved. This is so irrespective as to whether the claim is resolved by a judicial determination on its merits or by way of participation in any settlement (if the settlement produces a fund as contemplated by s 33V(2)). Indeed, this is the case even if there is an award of aggregate damages. 11 I now turn to the question of approval of the notice and the resolution of the narrow dispute as to the competing forms of notification. 12 The mediation date in this case has been selected by the parties as being an appropriate juncture in the life of the class action for structured and supervised settlement discussions to take place. Everything that can be done should be done to assist in facilitating the mediation at this time and to focus the minds of the parties on the desirability of settling sooner rather than later (if it is possible to reach a settlement capable of approval by the Court). 13 Experience demonstrates it is far easier for a class action to resolve at a mediation if there is some certainty as to the likely loss alleged to have been suffered by group members. Of course, there may be cases where it is appropriate to progress the proceeding without registration, particularly in the light of opposition by one or other party. It is ultimately a matter of discretion. But where, as here, both parties are represented by experienced practitioners and registration orders are sought jointly to facilitate productive settlement discussions, the practice has been for such orders to be made. The method and mode of communication is clear, and the notice ought to be approved. 14 As to the narrow difference, as noted above, to the extent possible, the parties should focus on settlement now and not later. If settlement cannot be achieved in a reasonable period following the mediation, there is no reason why the class ought not be "reopened". I prefer a short period of so-called "soft closure". 15 Accordingly, I will make the orders proposed by the applicant in the Parkin proceeding. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee.