Consideration
42 Singapore Airlines submitted that the issue was not whether the Court could readmit a group member, but whether, in the exercise of its discretion, it ought to do so. I shall assume that the Court has power, on the application of a person who has opted out of a representative proceeding, to reinstate that person as a group member, whether under s 33ZF or under s 22 of the Federal Court of Australia Act.
43 In my opinion the factors relevant to the exercise of that discretion to reinstate include:
(i) the reasons for opting out;
(ii) the period of time between the opt-out notice and the application to reinstate and what steps, if any, have been taken in the proceedings between the time of the opt-out notice and the application to reinstate;
(iii) the grounds for seeking reinstatement;
(iv) any prejudice to the applicant, the existing group members and the respondent or respondents; and
(v) the effect on the applicant for reinstatement of permitting or refusing reinstatement, including any proposed terms.
These matters should be considered in the context of the terms and purpose of Part IVA.
44 Webjet submitted first that in King (above) Moore J permitted the opt-out notices to be withdrawn whether the notices were lodged by mistake or not.
45 Second, Webjet submitted that the view that group members should not be entitled to change their minds was a strict view not countenanced by the objects of an opt-out notice. At least one of the objects of representative proceedings generally and the opt-out procedure in particular was efficiency. It was submitted that it was not particularly efficient, in the events that had occurred in this proceeding, for Webjet to be forced into bringing a new proceeding against the respondent upon a strict view that decisions to opt out for commercial reasons must be irrevocable. This view failed to give credence to the reality that in the course of litigation the prospects of success against a defendant generally varied from time to time. In this particular case, after Webjet took its decision to opt out, the forensic landscape altered dramatically with determinations of a pivotal common issue which, in turn, facilitated negotiations ultimately leading to a settlement. It was said that it was not clear why group members who had done nothing and had remained in the group and were now to enjoy the fruits of the settlement should be placed in a more advantageous position than Webjet which took a deliberate commercial decision (from a position of some actual or perceived vulnerability) at a time when the forensic landscape was vastly different. Webjet accepted that it had moved belatedly, and its reasons for opting out four years ago were, essentially, the product of its free choice. On the other hand, it submitted, there should be no reason why that decision should be irrevocable.
46 Third, although Webjet now sought to be reinstated to get the benefit of a settlement negotiated by and on behalf of others, that motivation should not be held against it. It would be no less opportunistic for Webjet to take the benefit of precedents to commence a separate proceeding in another forum involving relevantly the same issues than it was to be reinstated, even at this late stage, to the representative proceeding.
47 This meant, submitted Webjet, that the real question was whether it would be a more efficient use of the parties' resources for Webjet to be reinstated or to force it to commence a separate proceeding in the District Court. This called for the adoption of a practical approach. The case management objects in s 37M would suggest that it would be prima facie in the interests of Webjet and the respondents to avoid the need for the institution of a separate proceeding. Further Webjet submitted that Singapore Airlines was not materially prejudiced.
48 In my opinion, it is important to identify what is sought by this interlocutory application. Webjet applies for orders which would have the substantive effect of putting it in the same position as those entities in respect of which, on 29 March 2012, the Court approved the settlement of the proceeding on the terms set out in the Deed of Settlement, a copy of which is exhibited to the affidavit of Steven Lewis sworn 28 March 2012. Those entities were the applicant, all other group members who had not opted out under s 33J and Singapore Airlines (as defined in paragraph 2 of the Amended Application filed on 22 August 2011). No terms were suggested by Webjet.
49 Under that deed of settlement there was no admission of liability by Singapore Airlines but, as I have said, the settlement meant Singapore Airlines would pay 100 cents in the dollar of the group members' claim, subject to a set-off defence. In relation to the set-off defence, clause 3.1 provided that within 28 days of Singapore Airlines receiving the Eligible Group Member's Registration of Intention to Claim Form the Singapore Airlines' legal representatives will notify the representatives of the Eligible Group Member of Singapore Airlines' intention to assert that an Eligible Group Member's claim for commission on fuel surcharges is subject to a set-off defence. In that event the deed specifies consequential steps.
50 In the absence of evidence from Singapore Airlines as to its prejudice in fact, it was submitted on behalf of Singapore Airlines that when it settled the case, it was based on knowledge of who had opted out. So although Singapore Airlines had agreed to pay 100 cents in the dollar, including interest and costs, that decision was made on the basis of knowledge of who was not in the proceedings. This, it should be inferred, involved economic considerations which are taken into account by parties, so it should not be assumed that there was no merit to the defences that were put forward by Singapore Airlines. In deciding to enter into the settlement, Singapore Airlines negotiated a settlement in which it determined that it would give up all of its defences, except for the set-off defences. The defences raised matters such as estoppel, the Trade Practices Act, variation, election, and waiver, which had been given up for the purposes of the settlement. If proceedings were commenced by Webjet in the District Court, those defences would be available to Singapore Airlines, whereas they would not be available if Webjet were allowed to be reinstated into the representative proceedings. However, Singapore Airlines had not assessed whether it would rely on any of those defences in relation to Webjet in another court as, it was submitted, it did not yet know whether Webjet was going to be a part of the present proceeding or not. The prejudice was that those defences would be open to Singapore Airlines, if separate proceedings were commenced but those defences would not be open in this proceeding in relation to Webjet if it were reinstated. It was the opportunity to be able to rely on those defences that would be lost.
51 Webjet submitted that, in light of the settlement, I should infer that Singapore Airlines had no faith in its defences. Even if it were possible to do so in the absence of evidence, I do not regard it as appropriate for the Court, on an application such as the present, to attempt to evaluate the strength or otherwise of the cases as pleaded. There has been no admission of liability on the part of Singapore Airlines.
52 In terms of other material prejudice, Singapore Airlines submitted that the size of the settlement that it had been working towards would change substantially. The evidence now was that Webjet claimed to have an amount of at least $100,000 owing to it. When the settlement was negotiated, Singapore Airlines knew that Webjet was not a part of these proceedings, because it had opted out, and, as a result, it did not have to factor that particular payment into the settlement.
53 As to fairness, Singapore Airlines submitted Webjet had effectively been able to place itself in a protected position, in that it had been at no risk of being bound by an adverse court judgment or an adverse settlement. It only sought to participate now that there was a settlement on offer, and it was submitted that was not just unfair to Singapore Airlines, but that it was also unfair to the other group members, who had exposed themselves to risk, and would have been bound by the outcome of this case however it may have eventuated. It was submitted that there was no reason why Webjet could not have come forward much earlier than it did. The application was made once there was a settlement on foot.
54 As to efficiency, it was submitted that the comparison was not limited to a choice between the present proceeding and proceedings in the District Court but also to negotiation and forms of alternative dispute resolution.
55 As to specific prejudice by way of delay in the resolution of the present proceedings, the only delay would be because Webjet had such a substantial claim the set-off defences were more likely to be pressed or more likely to be closely considered by Singapore Airlines because those set-off defences, the same as the other defences, were subject to not just legal considerations but economic considerations. With smaller claims it may be that there was a set-off available to Singapore Airlines but because of the quantum at stake Singapore Airlines would choose not to press it. With the large claim that Webjet has, the economics of it suggested that pressing the set-off would be worthwhile. It was however accepted by Singapore Airlines that the procedure that was set out in relation to the settlement was that there were a number of ADR mechanisms aimed at resolving the question of set-off before coming back to the Court. Presently that aspect of the matter, for the present parties and group members, is listed for 2 May 2012.
56 In my view an important factor relevant to the exercise of the discretion is that the applicant does not contend that it or any of the group members in fact would be prejudiced. For example, the applicant does not submit that, from its perspective, the settlement or the process to effect the settlement would have been any different if Webjet was now permitted to participate. And this is not a case like King (above) where there was a finite pool available for distribution.
57 As to Singapore Airlines, it has adduced no evidence that it would be prejudiced but pointed to a number of matters which must, in those circumstances, go to issues of principle.
58 It was common ground that the effect of the orders sought will not be to affect time that has already run for the purposes of any limitation period.
59 Singapore Airlines identifies a number of matters which, it submitted, tell against an exercise of discretion in Webjet's favour.
60 Most of those matters go to the opportunism of Webjet's present application. In my opinion Webjet cannot, and does not seek to, hide from that characterisation. Webjet says no more than, given its circumstances at the time it gave the opt-out notice, it thought it would be commercially disadvantaged if it had participated in the proceedings from their commencement but, now that it is better established commercially, it sees no such disadvantage. I also accept that it is unlikely that Webjet would have made its present application if the principal proceedings had had no or limited prospects of success.
61 As to timing, although Mr Noon states in his affidavit that Webjet "is now in a position where it has a larger presence in the market and no longer holds the same concerns that its supply and access to airline inventory would be under threat if it were to make a claim against the respondents for commission on fuel surcharges" he sets out figures for the financial year ending 30 June 2011 showing that the company had sales of $592 million (compared to $250 million for the financial year ending 30 June 2007) and net profit before tax of $15.4 million (compared to $5.3 million for the financial year ending 30 June 2007). Webjet has not established that its place in the market prevented it from making its application for reinstatement at an earlier time. It is at least implicit in Webjet's submission that it would not have done so before the Full Court decision in Leonie's Travel (above) in mid 2010.
62 Thus in relation to a substantial claim, presently quantified at approximately $110,000 but which could be larger, the Court is asked to permit Webjet to take advantage of the processes thus far undertaken on the part of the parties to arrive at the settlement. I would include in this, at the level of principle, the opportunity for compromise whether by way of ADR or otherwise.
63 In my opinion, at the level of principle, there is a value in certainty from the time of the opt-out procedure being concluded. Thus the willingness of a respondent to settle proceedings would or may be compromised if it did not know which of the entities that had opted out would wish to take the benefit of the settlement. I accept that the opt-out procedure is designed to achieve some certainty. I also accept that if the threshold for reinstatement is low then that runs counter to certainty in the period during which issues of liability and remedy are resolved.
64 I accept that if reinstatement can be achieved because of no more than changed commercial considerations then the group membership would be subject to greater change and this may be deleterious to resolution of the proceedings.
65 But more important, in my opinion, is the consideration of relative risk. The effect of the opt-out notice is that Webjet was not bound by the present proceedings and would have been entitled to start other proceedings against, relevantly, Singapore Airlines. If a party which had opted out for commercial reasons was permitted to be reinstated where those reasons had changed and it was now not commercially disadvantageous but, in light of the settlement, commercially advantageous to participate, that entity would have in effect a choice which, in my opinion, is inimical to the scheme of Part IVA. The party seeking to be reinstated chose not to be, and would not have been, at risk of the representative proceedings failing in whole or in part, whether by judgment or compromise, but now seeks the favourable exercise of the Court's discretion to allow it to take the benefit of what that party regards as a favourable settlement.
66 I note the evidence on behalf of Webjet that if its present application fails, it intends to commence proceedings against Singapore Airlines in the District Court of New South Wales on the same causes of action as are involved in the principal proceedings in this Court. No bar to that course, whether by reference to a limitation period or otherwise, has been identified before me. Thus, refusing Webjet's application does not have the consequence that it is without remedy. I take into account that that course would necessarily involve additional time and expense, including legal costs.
67 In light of these competing considerations I am not persuaded that the discretion should be exercised in favour of Webjet. In summary, the reason for and timing of Webjet's application to be reinstated as a group member do not persuade me that I should exercise my discretion in the applicant's favour in light of the provisions and purpose of Part IVA.
68 I therefore order that Webjet's interlocutory application be dismissed.
69 In relation to costs, Webjet must pay Singapore Airlines' costs of Webjet's interlocutory application. There should be no order in respect of the applicant's costs since it adopted a neutral position on the interlocutory application.
I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson.