What happened
In early 2018 GetSwift Limited, a listed technology company providing last-mile delivery software, suffered a dramatic collapse in its share price. After announcing various customer contracts and a $75 million capital raising at $4.00 per share in December 2017, the company faced media allegations that it had failed to disclose terminated agreements and had prematurely announced revenue tied to a Commonwealth Bank partnership. The share price fell from $2.92 to $0.51 (an 82.5% decline) after a trading halt and suspension. Three separate law firms, each partnered with a different litigation funder, commenced open class representative proceedings under Pt IVA of the Federal Court of Australia Act 1976 (Cth) alleging breaches of continuous disclosure obligations under the Corporations Act 2001 (Cth), misleading or deceptive conduct, and related statutory claims.
The first proceeding (NSD 226 of 2018) was filed by Squire Patton Boggs on behalf of Dwayne Perera on 20 February 2018, funded by International Litigation Partners No 18 Pte Ltd (ILP18). By the time of the comparative hearing 103 group members had signed funding and retainer agreements. The second (NSD 440 of 2018) was filed by Corrs Chambers Westgarth on behalf of Shaun and Samantha McTaggart on 26 March 2018, funded by Vannin Capital. 208 group members had signed funding agreements with Vannin, although no retainer agreements had been executed with the solicitors. The third (NSD 580 of 2018) was commenced by Phi Finney McDonald on behalf of Raffaele Webb after intervention in the earlier proceedings; it was supported by Therium under a funding arrangement that contemplated an immediate common fund order rather than traditional book-building.
All three proceedings defined the group by reference to persons who acquired GetSwift securities in the period 24 February 2017 to 19 January 2018 and who suffered loss or damage resulting from the pleaded contravening conduct. Although minor differences existed in the precise manner in which contraventions were pleaded, the causes of action, the relevant announcements, and the factual substratum were substantially identical. At an early case management hearing the Court directed each applicant to exchange proposals addressing security for costs, common fund terms, estimated costs assuming contested liability and loss, the number of funded group members, and any proposal to resolve multiplicity (consolidation, stay, declassing, class closure or joint trial). After a contested hearing spanning multiple days and further written submissions, Lee J concluded that only one open class proceeding should continue.
The judgment permanently stayed the Perera and McTaggart proceedings while directing the Webb proceeding to file a statement of claim, defence, proposed opt-out notice and draft common fund order. Leave was granted to issue a subpoena for shareholder details, costs were reserved, and the stayed applicants were given express liberty to apply under s 33T in the continuing proceeding if they contended that Mr Webb could no longer adequately represent group members (including in the event of non-compliance with security orders). A common fund order in the form proposed by Webb (a costs multiple of 2.2 or 2.8 times approved expenses, capped at 20% of net proceeds) was indicated as appropriate, subject to further submissions on precise terms.
Why the court decided this way
Lee J began by tracing the historical rise of funded securities class actions from the Aristocrat litigation onward. The statutory policy underlying Pt IVA was to provide a single efficient vehicle for resolving common issues, reduce costs, and improve access to justice. The rejection of a certification requirement was predicated on the existence of adequate safeguards, including the Court's broad case management powers and the declassing mechanism in s 33N. The subsequent development of closed classes, the Multiplex decision permitting funding criteria in group definitions, the Brookfield Multiplex characterisation of funded class actions as common enterprises, the ASIC Class Order exempting funders from managed investment scheme regulation, and the advent of common fund orders in Money Max had collectively produced a competitive market in which multiple funders and solicitors now raced to commence open class securities actions.
Against that background the Court identified a "procedural contradiction". Despite the solemnity of setting the matters down for initial trial on contested common issues, empirical experience showed that no funded securities class action had ever proceeded to final judgment after a fully contested hearing; all resolved by Court-approved settlement. This reality should inform every aspect of case management, including the timing and structure of common fund orders. Managing such cases on the assumption they will run to trial risks incurring vast costs that are ultimately wasted when settlement occurs. The Court must therefore take an active role to ensure early, efficient resolution with minimal cost to group members.
When three overlapping open class actions were before the Court, only one could sensibly continue. Allowing multiplicity would be vexatious and oppressive to the respondent, would increase costs (which would ultimately be borne indirectly by group members through any settlement), and would undermine the statutory purpose of Pt IVA. The continuation of duplicative proceedings, although commenced for a licit purpose, would not be necessary to vindicate the representative applicants' individual claims (which could be pursued within the selected proceeding) and would cease to serve the shared commercial purpose of the funded common enterprise once it became clear that only one vehicle was required. In these circumstances the maintenance of the two stayed proceedings met the flexible criteria for abuse of process: it was seriously and unfairly burdensome to the respondent, productive of unjustified trouble and harassment, and would bring the administration of justice into disrepute among right-thinking people by countenancing the use of Court processes in a manner inconsistent with the overarching purpose.
The selection of which proceeding should continue was expressly multifactorial. No single factor was decisive. The experience and resources of each legal team were equal. All proceedings were at a comparable stage of preparation once allowance was made for the deliberate decision by Phi Finney McDonald to finalise novel funding terms before pleading. Each funder appeared capable of meeting adverse costs exposure. The pleadings raised no glaring deficiencies; minor differences in emphasis did not warrant preferring one case theory over another. The existence of funding agreements and the modest number of signed group members (103 and 208 respectively, none for Webb) carried little weight where a common fund order was ultimately sought; indeed, the Court expressly discouraged future book-building in such circumstances as it creates unnecessary contractual complications once a common fund order is made.
What tipped the balance decisively in favour of the Webb proceeding were three interrelated advantages. First, the proposed funding model was structurally superior. Rather than a flat percentage commission, Therium's return would be the lesser of a multiple of approved costs (2.2 times if settlement before 12 April 2019, 2.8 times thereafter) or 20% of net proceeds. This directly linked reward to the risk actually assumed as the proceeding progressed, avoided windfall gains on very large settlements, and removed any incentive for the funder to press for early, sub-optimal settlement. Second, the Webb proposal included independent referee oversight of legal costs on an ongoing basis and openness to the appointment of a court or jointly retained forensic economist to address market efficiency, loss causation and quantum. These measures promised real cost savings and reduced the risk of selection bias in expert evidence. Third, when costs estimates were adjusted to common assumptions (early or late mediation, discovery volume, number of hearings, expert costs), the Webb model produced higher net returns to group members in the vast majority of realistic settlement ranges (see MFI B annexed to the reasons). In the circumstances where securities actions almost invariably settle, these features made the Webb proceeding the vehicle best calculated to advance group members' claims quickly, inexpensively and efficiently while protecting the integrity of the Court's processes.
The Court rejected arguments that the late entry of the Webb proceeding conferred an unfair process advantage or amounted to parasitic conduct. All proposals had been prepared without access to the others' materials. The sealed-bid analogy was inapt; each applicant was required to put its best foot forward in the interests of group members, not to engage in tactical undercutting. Public policy did not require the Court to penalise the Webb proceeding for deferring pleading work until funding terms were settled; on the contrary, the novel funding model ultimately secured was advantageous to group members. The existence of funding agreements in the stayed proceedings created some contractual complication (the agreements appeared to require payment to the original funders even if recovery occurred in the Webb proceeding), but this was manageable through careful opt-out notices, possible court variation of the agreements at settlement, and the preserved s 33T liberty. The prejudice to the stayed funders (loss of expected commission on sunk costs) was real but not decisive; they had assumed that commercial risk in a competitive market.
Alternative remedies were considered but found less satisfactory. A joint trial of open class proceedings would perpetuate duplication. Class closure in one proceeding while leaving another open risked further multiplicity and uncertainty. Declassing under s 33N(1)(c) or s 33ZF was available (the subsection is not limited to a comparison with individual proceedings but extends to relative efficiency between class actions), but a permanent stay better recognised the abusive character of the duplicative proceedings and provided a cleaner resolution. Equitable relief in the nature of a common injunction or bill of peace was also available to restrain unconscientious multiplicity, but the stay remedy was sufficient.
Before and after state of the law
Prior to Perera v GetSwift the Australian law on competing class actions was underdeveloped and inconsistent. Johnson Tiles (Merkel J) had stayed two of three competing proceedings and declassed the third, allowing two firms to remain on the record but requiring single counsel. In the Centro litigation Finkelstein J had canvassed litigation committees and joint trials but ultimately the matter resolved without a definitive multiplicity ruling. Ball J in Smith v Australian Executor Trustees had refused a stay where the competing representative proceedings advanced sufficiently different cases. Beach J in Bellamy's had closed one class, ordered a joint trial, but indicated that but for the large numbers of signed group members he would have permanently stayed one proceeding. Foster J in Cantor v Audi had permitted parallel groups of class actions to continue for the time being, emphasising that no "one size fits all" approach existed and that each case turned on its own facts. Stevenson J in TW McConnell had considered it premature to resolve multiplicity in the SurfStitch administration context.
The North American experience, although arising in a certification context, supplied additional guidance. Canadian carriage motions weighed non-exhaustive factors (nature and scope of causes of action, theories advanced, state of preparation, resources and experience of counsel, presence of conflicts) with the overriding objective being the best interests of the class. US securities class actions were regulated by the Private Securities Litigation Reform Act 1995 and involved multidistrict litigation transfers to reduce duplication.
Perera v GetSwift represents a decisive shift. It supplies the first comprehensive Australian appellate-level guidance (albeit at first instance) on the principles to be applied when substantially identical open class securities actions compete. The judgment confirms that the Court will not hesitate to characterise duplicative open class proceedings as an abuse of process where they generate unnecessary cost, vex the respondent without justification, and fail to advance the representative purpose of Pt IVA. It endorses a structured multifactorial assessment that gives real weight to innovative funding models, cost-control mechanisms (referees, joint experts), and comparative net returns modelled on common assumptions. It expressly discourages pre-issue book-building where a common fund order is contemplated and warns that the result in Bellamy's should not be read as an incentive to sign up group members early. It clarifies that s 33N(1)(c) is available to declass where a competing class action is more efficient, and that equitable jurisdiction to restrain multiplicity remains available alongside the implied power to stay for abuse of process.
The decision also breaks new ground on common fund orders. By endorsing a costs-multiple model with an independent referee and a net-proceeds cap, it addresses criticisms that courts lack the tools to assess whether headline commission rates are fair. It emphasises that early common fund orders promote informed opt-out and avoid wasted book-build costs, provided windfall risks are removed. The judgment therefore moves the law from a relatively laissez-faire approach that tolerated parallel proceedings in some cases to a more interventionist stance that prioritises efficiency, cost control and the protective role of the Court toward group members. Subsequent legislative reform (including the 2020 amendments to the Federal Court Rules and the introduction of a statutory regime for litigation funding in the Corporations Act) has built upon rather than undermined the principles articulated by Lee J.
Key passages with plain-English translation
At [4] the Court stated: "I will make orders ensuring that only one of the three current open class actions continues. This result, and the ancillary orders facilitating that result, ensures protection of the Court's processes and gives effect to the considerations to which I have just referred." In plain English, the judge decided that running three virtually identical class actions was a waste of everyone's time and money. The law exists to resolve disputes efficiently, not to let funders and lawyers run multiple overlapping cases that drive up costs for the shareholders they are supposed to help.
At [34] the Court observed that managing securities class actions on the assumption they will run to trial "is a bit like a passenger purchasing a railway ticket every day from Eastwood to Central, while knowing it is almost inevitable that they will be getting off the train every day at Strathfield". Translation: everyone knows these cases settle. Pretending otherwise leads to inflated budgets and unnecessary work. The Court should manage them with settlement in mind from the outset.
At [119] the Court quoted Batistatos and Jeffery & Katauskas for the proposition that "the categories of abuse of process are not closed…This does not mean that abuse of process is a term at large or without meaning". In context this means the Court can recognise new forms of abuse. Running a second identical class action when the first can do the job is one of them, even if each was started for a proper purpose.
At [287] the Court explained the advantage of the Webb funding model: "by aligning the reward of the funder with a multiple of legal costs, it recognises the reality that the risk of a funder increases incrementally as legal costs increase". Plain English: the more the lawyers have to spend to fight the case, the more risk the funder takes. Paying the funder a percentage of the final payout does not track that increasing risk; a multiple of actual costs does. This is fairer to shareholders.
At [347] the Court concluded that allowing duplicative proceedings to continue would "bring the administration of justice into disrepute among right-thinking people". Translation: if the Court let three law firms run three identical cases, ordinary people would think the legal system had lost the plot. The judge therefore stopped two of them.
What fact patterns trigger this precedent
The principles in Perera v GetSwift are engaged whenever two or more open class Pt IVA proceedings are commenced that share substantially the same group definition, the same or materially identical causes of action, and the same factual substratum against the same respondent(s). The judgment is not limited to securities class actions; the reasoning applies to any mass claim (consumer, product liability, cartel) where multiplicity produces unnecessary duplication of costs, expert evidence and interlocutory disputation.
Key triggers include: (1) the proceedings are at an early stage so that comparative assessment can occur before substantial sunk costs accumulate; (2) the promoters have not reached a consensual resolution acceptable to the Court; (3) the claims are not genuinely complementary (contrast Smith v Australian Executor Trustees where different case theories meant both could sensibly continue); (4) common fund orders are contemplated, rendering pre-issue book-building of marginal utility; and (5) the multifactorial factors point clearly to one proceeding as superior on costs control, funding structure, preparation or likely net return. The judgment does not require identical pleadings; minor differences in emphasis or additional causes of action will not prevent a stay if the core common issues overlap substantially.
The precedent is less likely to apply where the competing actions cover different time periods, advance conflicting theories that cannot be ventilated in a single proceeding, or where one proceeding has progressed significantly further (for example, where a defence has been filed and discovery substantially completed). It also has less force where the number of signed group members is very large and different solicitors and funders have built substantial books, as in Bellamy's; however, the Court expressly stated that Bellamy's should not be read as an incentive to book-build in future cases where a common fund order will be sought.
How later courts have treated it
Although the judgment itself surveys how earlier Australian decisions dealt with multiplicity, its own reasoning has been treated as authoritative on the power to stay duplicative open class actions and the multifactorial approach to be adopted. Subsequent first-instance decisions have cited Perera for the proposition that the Court will not permit more than one open class proceeding to advance substantially the same claims where one vehicle is sufficient. The emphasis on early intervention, the rejection of crude auction analogies, and the preference for innovative funding models that link return to risk have been echoed in later common fund rulings.
The detailed critique of book-building in the context of contemplated common fund orders has led later judges to scrutinise pre-issue sign-ups more carefully and to require clear evidence that signed group members would suffer material prejudice if their chosen funder and solicitor are displaced. The approval of a costs-multiple funding structure with referee oversight has influenced the drafting of subsequent common fund orders, with several judges noting the advantages of proportionality and cost discipline. The preservation of s 33T liberty in the stayed proceedings has become standard wording in multiplicity orders to reassure displaced applicants that group members retain a remedy if the selected representative later proves inadequate.
The judgment's discussion of equitable jurisdiction to enjoin multiplicity has been cited as confirming that the Court's power is not limited to the statutory mechanisms in Pt IVA but extends to traditional equitable remedies where unconscientious conduct is shown. Later decisions have also adopted the warning that "one size does not fit all" while nevertheless treating the structured multifactorial list in Perera as the starting point for analysis. No appellate court has overturned the core holdings; instead, the principles have been applied or distinguished on their facts in subsequent competing class action disputes.
Still-open questions
The judgment left several issues for future determination. First, the precise interaction between existing funding agreements in stayed proceedings and a common fund order in the continuing proceeding remains unresolved. The Court noted that the agreements appeared to require payment to the original funders even if recovery occurred in the Webb proceeding, but declined to express a concluded view on enforceability or variation. Subsequent cases will need to decide whether such agreements can be varied under s 33V or s 33ZF at settlement, or whether funders retain a contractual right to commission notwithstanding the stay.
Second, the judgment left open whether a permanent stay can be ordered purely in the interests of justice (absent an express finding of abuse of process) under s 33ZF or the Court's implied powers. Lee J found it unnecessary to decide the point because the continuation of the Perera and McTaggart proceedings met the abuse of process criteria. Future multiplicity cases where the duplicative character is less clear may require resolution of this power question.
Third, the practical operation of the preserved s 33T liberty in stayed proceedings is untested. If the selected representative later fails to provide adequate security or conducts the case maladroitly, can a group member from a stayed proceeding successfully apply to replace the representative? The judgment indicates that such an application is available but does not explore the threshold or the evidentiary burden.
Fourth, the judgment's encouragement of court-appointed or jointly retained experts on loss causation and market efficiency has not been universally adopted. Later cases continue to see competing event studies; the circumstances in which a court will impose a single expert remain unsettled.
Finally, the risk of procedural arbitrage across Australian courts exercising federal jurisdiction (commencing competing actions in different registries or State Supreme Courts to avoid an adverse multiplicity ruling) was flagged but not resolved. Cross-vesting legislation, comity principles and the statutory regime for litigation funding introduced after 2018 may require further calibration to prevent forum shopping that undermines the efficiency gains achieved in Perera. These questions illustrate that while the judgment provides a robust framework, the dynamic nature of funded class actions continues to generate novel issues for judicial resolution.