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[2013] VSC 74
Supreme Court of Victoria
2013-02-27
DIXON J
Original judgment source is linked above.
PRACTICE AND PROCEDURE - Group proceeding - Application for approval of settlement of one of many claims made in group proceeding - Settlement resolves discrete part of the proceeding - One of the plaintiff's claims to be dismissed - Other claims by plaintiff against that defendant continuing - Whether court approval required - Whether notice to group members should be dispensed with - Whether Court should approve settlement of claim - Black Saturday Kilmore bushfire - Supreme Court Act 1986, Part 4A.
1 In this proceeding, Mrs Matthews sues a number of parties as representative for persons injured or suffering property damage or economic loss because of a bushfire that ignited near Kilmore East on 7 February 2009. In what is an extremely complex civil proceeding with multiple claims against multiple defendants, and with counter and cross-claims, I am only concerned with a claim that the Country Fire Authority ('CFA') was negligent in failing to suppress the bushfire, which has been resolved by agreement between relevant parties.
2 Originally, the plaintiff only sued SPI Electricity Pty Ltd. By its defence and counterclaim, SPI joined the CFA making allegations against it that it breached duties owed to the plaintiff in relation to suppression of the Kilmore fire that caused her loss. The fire suppression case against the CFA is that s 20 of the Country Fire Authority Act imposes a statutory duty on the CFA in relation to suppression of fire and the CFA owed a common law duty to exercise reasonable care to implement effective fire suppression measures. The case alleges that the CFA breached its duties by not effectively fighting the fire and/or deploying adequate resources to do so. SPI alleged that it was entitled to defend the plaintiff's claims on the basis of the CFA's responsibility for her loss resulting in a limited proportionate judgment in those claims to which Part 4AA of the Wrongs Act 1958 (Vic) applies. On the same basis, SPI sought contribution from the CFA in respect of claims to which Part 4AA did not apply.
3 In response to SPI's defence, and the like defence taken by another defendant Utility Services Corporation Pty Ltd (UAM), the plaintiff joined the CFA as a defendant to the group proceeding and amended its statement of claim to replicate the allegations that were made by SPI against the CFA. The relevant allegations are found in paragraph 109B-145 inclusive of the plaintiff's statement of claim dated 30 November 2012. It is convenient to refer to that claim as 'the fire suppression case'.
4 By December 2012, the parties had exchanged lists of witnesses and, relevantly to the fire suppression case, SPI and the CFA had served experts' reports. Those experts had conferred in a conclave resulting in a joint report about their points of agreement and disagreement. The plaintiff, having indicated to the court and the other parties that it would be relying on the evidence that SPI adduced in respect of the fire suppression case, did not file expert evidence or seek to adduce any lay evidence relevant to the fire suppression case. The plaintiff had maintained from an early stage in the proceeding that she had 'prudently adopted' SPI's claims to protect her entitlement to a full judgment should SPI's proportionate liability defence based on the fire suppression case succeed. As I will shortly explain, the plaintiff has maintained claims that she now contends have no real prospect of success.[1] In any event, the legal advisers were well placed by December 2012 to evaluate the prospects at trial for the fire suppression case and did so.
5 On 21 December 2012, the solicitors for the CFA made an open offer to the plaintiff, SPI and UAM that the fire suppression case as advanced by each of them be dismissed by way of appropriate orders, with each party bearing her or its own costs. The CFA offered to support any application for court approval necessary to facilitate its dismissal. Each offeree accepted the offer. The plaintiff filed a summons seeking dismissal of the fire suppression case, with leave to amend its statement of claim by deleting the relevant allegations or court approval of the settlement of the fire suppression case on that basis pursuant to s 33V of the Supreme Court Act 1986. Counsel informed me that the trial judge has proposed that the defendants seek appropriate directions for the amendments of defences and other claims made by them to reflect the agreement.
6 The trial of the proceeding commences on 5 March 2013. On the return of the plaintiff's summons on 19 February 2013, after hearing from counsel for relevant parties, save for SPI who did not appear, I made the following orders announcing that my reasons would follow:
(a) Is court approval required for the dismissal of the suppression case?
(b) If yes, is it necessary that notice be given to group members of the application before the court approves the settlement?
(c) If no, should the court approve of the settlement between the parties of the fire suppression case?
8 Section 33V of the Supreme Court Act 1986 (Vic) ('the Act') states that a group proceeding may not be settled or discontinued without the approval of the court. 'Group proceeding' means a proceeding commenced under Part 4A of the Act and 'proceeding' is defined by s 3 of the Act to mean 'any matter in the court other than a criminal proceeding'.
9 At first blush, it might be thought that s 33V is only concerned with settlement or discontinuance of the entire group proceeding and has no application in the present case. Bearing in mind the very broad definition of 'proceeding,' the inherent nature and purpose of the jurisdiction being exercised, and the procedural framework for group proceedings that Part 4A of the Act creates as a whole, a literal construction of s 33V - that the words 'a group proceeding' is limited to the entire proceeding as a single matter - is neither what is stated nor what the legislature intended.
10 A proceeding commenced under Part 4A is a group proceeding by reference to s 33C of the Act. That section permits one or more persons representing some or all of seven or more persons who have claims against the same person that give rise to a substantial common question of law or fact to commence the group proceeding. The proceeding may be in respect of more than one claim that arises out of the same, or similar, or related, circumstances. There may be more than one defendant. Where one or more of the claims made in the proceeding is a claim to which Part 4AA of the Wrongs Act applies, there will be more than one defendant if that defence is taken. Clearly, the Part contemplates a proceeding with multiple claims and multiple parties to be a group proceeding. Yet each substantive claim against each defendant a matter in the court that is also a group proceeding.
11 Section 33V is directed to settlement or discontinuance of a group proceeding. Group proceedings may settle in many different ways. The interests of group members in a compromise negotiated by the legal representatives of the plaintiff will be a constant concern, for their interests are affected as they are bound by the settlement of claims made in the proceeding on their behalf. The role of the court in approving a settlement under s 33V is well established and it requires focus on whether the interests of group members have been properly considered. Bongiorno J (as his Honour then was) observed in Tasfast Air Freight v Mobil Oil Australia Ltd,[2] of the purpose of the section:
The principles upon which s 33V is based might be said to be those of the protective jurisdiction of the Court, not unlike the principles which lead the Court to require compromises on behalf of infants or persons under a disability to be approved. In a group proceeding, ex hypothesi, there may be persons, in the community who can be affected by such settlement but know nothing of it.
12 A literal approach to construction of the section that might lead to the important function of protecting the position of injured persons who are not plaintiffs being avoided is not what was intended. Looking initially at the language of Part 4A, s 33V proscribes settlement or discontinuance without court approval, requiring that unless it is just to do so, approval of a settlement or discontinuance must not be determined until notice has been given to group members. Settlement of the claims of the group proceeding plaintiff is regulated by s 33W, in that context the court's leave is required, and the powers of the court under that section are exercised on notice to group members. In my view, it is clear that the legislature intended that the settlement or discontinuance of a claim requires court approval if that claim, but for the rules of convenient and permissive joinder of claims and parties, could be a separate group proceeding.
13 In my view, the literal interpretation is not what is stated because a 'matter in the court' is not an expression that is necessarily limited to the whole, or the sum, of all of the claims against all of the defendants in a complex proceeding. In its ordinary usage, 'proceeding' refers to the matter that is commenced by civil originating process as the definition in r 1.13 of the Supreme Court (General Civil Procedure) Rules 2005 demonstrates, but I think that either that definition or the definition in s 3 of the Act, the reference in context to a 'matter' is wide enough to include a reference to part of a proceeding. Memories of the single claim, single defendant proceeding grow faint. Civil proceedings are comprised of claims and proceedings with multiple claims against a defendant, or claims against multiple defendants, are plainly contemplated, not only by the Rules of Court, but also, as I have noted, by Part 4A of the Act in group proceedings, and for good reason.
14 A claim as defined by s 33C of the Act between a plaintiff and a defendant that could constitute a separate proceeding in the sense of supporting, on its own and without more, an originating process is a group proceeding and it is in that sense that the term is used in s 33V of the Act. Obfuscation of the proper meaning of 'a group proceeding' as used in s 33V need not follow on the fact of convenient joinder of multiple claims or multiple defendants in the proceeding constituted by the originating process.
15 Unaided by authority, in my view of the proper construction of s 33V, the claims by the plaintiff against the CFA that constitute the fire suppression case are a group proceeding and cannot be settled or discontinued without the approval of the court. The settlement could affect the interests of group members and it is plainly intended that a court approval process protect them.
16 Section 33V(1) of the Federal Court of Australia Act 1976 (Cth) is in identical terms[3] and it has been judicially construed in a like way.
17 The Federal Court of Australia has not endorsed a literal approach to construction of s 33V of the federal Act. It was first rejected by Branson J in Australian Competition and Consumer Commission v Chats House Investments Pty Ltd.[4] In Chats House, orders were made by consent shortly prior to trial, pursuant to an agreement between the applicant and the third respondent, restraining the third respondent from engaging in particular conduct and for costs. The agreement resolved the applicant's proceedings against the third respondent. The trial proceeded against the first and second respondents. Branson J was of the view that unless and until the approval of the court is sought and obtained in respect of the settlement agreement reached between the applicant and the third respondent, such agreement was without legal effect in the proceeding, rejecting the notion that because the entire proceeding had not settled, approval was not required. Branson J held:
The purpose intended to be served by s 33V(1) is obvious. It is appropriate for the Court to be satisfied that any settlement or discontinuance of representative proceedings has been undertaken in the interests of the group members as a whole, and not just in the interests of the applicant and the respondent. In my view, s 33V proscribes not only complete settlement of proceedings without the approval of the Court, but also settlement of claims against a joint respondent, or settlement of any substantive claim against a respondent.
18 The construction of s 33V offered in Chats House was examined again by the Federal Court in King v AG Australia Holdings.[5] The respondent applied for discovery of the particulars of group members to put an offer to compromise their claims. It submitted that settlement with an individual group member did not require court approval. Moore J considered the construction adopted by Branson J to be consistent with the purpose of s 33V of the federal Act, which he stated to be:
to ensure, by Court scrutiny, that a settlement acceptable to a representative party accommodates the interests and circumstances of group members having regard, inter alia, to issues raised in the proceedings and, if issues have been determined (such as liability) the results of that determination.[6]
It is probable that when Branson J spoke ... of "any substantive claim against a respondent", her Honour had in mind "a claim" maintained by the representative party on behalf of the representative group which might be one of a number of claims of the type comprehended by s 33C. It is to be recalled that the word "proceeding" is given a fairly wide meaning in s 4 of the Act and, consistent with that definition, could include part of a proceeding: see, for example, a discussion of the meaning of "proceeding" in an earlier judgment in this matter King v GIO Australia Holdings Ltd [2001] FCA 1773; (2001) 116 FCR 509, 512-513 [11]-[12]. That is, the expression "representative proceeding" could include an element in, or part of, such a proceeding.[7]
19 Although the earlier judgment referred to by Moore J discussing the meaning of 'proceeding' concerns different circumstances to those presently under consideration, I have already stated my view that the definition of 'proceeding' in s 3 of the Supreme Court Act 1986 is equally a wide, inclusive definition, which supports the like construction.
20 The question arose again in Courtney v Medtel Pty Ltd.[8] In this proceeding Sackville J was concerned whether settlement offers made directly by respondents to group members to settle individual claims would be invalid unless approved by the court under s 33V(1). As this procedure did not involve the settlement of any substantive claims against the respondent by the applicant on behalf of group members, the settlement was not a settlement of the representative proceeding for the purposes of s 33V(1). Sackville J noted that earlier judgments had not resolved the issue before the court and that, while determining the precise outer limits of s 33V(1) may pose some difficult issues, it was not necessary to pursue them in that proceeding.
21 In Bray v F Hoffman-La Roche Ltd,[9] Merkel J was considering an application for substantial amendments to be made to the claims that constituted the representative proceeding. An issue that arose was whether a representative proceeding could be discontinued without the approval of court. In that context the judicial pronouncements in the authorities set out above became relevant in answering the submission that s 33V had no application as it is only concerned with discontinuance of the entire proceeding. Merkel J noted the prospect for that interpretation of s 33V to produce anomalies and he concluded:
In my view there are good reasons for interpreting s 33V to give effect to its purpose by requiring approval of the Court, at least where the substantive claims of certain categories of group members have been settled or discontinued by the representative party, notwithstanding that there may remain extant some claims for relief by other categories of group members. In such a case the settlement or discontinuance by the applicant of the substantive claims brought under s 33C on behalf of some categories of group members will have resulted in the settlement or discontinuance of the representative proceeding, in so far as it relates to the claims of those group members.[10]
As the application was for pleading amendments that effectively discontinued claims, either approval was required under s 33V for discontinuance of claims or leave was required under s 33K or under rules of court for pleading amendment. Merkel J saw no reason for applying different criteria depending on whether the application was for approval or leave and disposed of the application accordingly.
22 More recently in Oasis Fund Management Ltd v Royal Bank of Scotland NV & Ors[11] Sackar J was considering the obligation to approve settlement of representative proceedings under s 173 of the Civil Procedure Act 2005 (NSW). His Honour adopted[12] the approach evident from the Federal Court decisions construing the identical provision as a guide as to how he should approach the task of construction of s 173. Section 33V, as judicially construed, 'expressly requires court approval of any settlement or discontinuance of representative proceedings or any claim therein'.
23 I agree with Merkel J's sentiments expressed in Bray that a literal interpretation of s 33V limiting its application to settlement or discontinuance of the entire proceeding could produce anomalies. The present proceeding well demonstrates the complexity of parties, claims and cross-claims capable of falling within s 33C enabling the commencement of a group proceeding. A literal construction of s 33V leads to a result that would not promote the purpose or object to be achieved by requiring court approval of settlement and discontinuance in group proceedings. Given that most proceedings are settled, it is nonsensical to suggest that multiple separate group proceedings ought to be commenced out of the Kilmore fire to enable separate settlement to be approved should there be compromise of different claims separately with different defendants.
24 The construction of s 33V of the Act that I have explained is consistent with the approach to the construction of like sections by other courts and that authority ought to be followed. I am content to rest my decision on the above reasoning, but equally, the section could be construed as if it commenced with the words 'Any substantive claim in'.
25 As the Victorian Court of Appeal has recently observed in DPP v Leys & Leys:[13]
The common law has long sought to avoid interpreting legislation in a manner that leads to a result that is manifestly absurd, unreasonable, creates an anomaly or otherwise produces an irrational or illogical result. In certain circumstances, departure from the literal meaning is justified and 'the court is entitled to attribute to the provision the meaning which it was obviously intended to have'.
The question which arises here is whether judicial intervention could be justified to depart from the literal meaning of cl 5 by adding or implying additional words where the consideration of the legislative history of cl 5, its context and the clear intent of the Parliament leads to the conclusion that applying a literal meaning would stultify that intent? That a court may sometimes be justified in abandoning the literal meaning and adding or implying words to avoid an unintended result can no longer be doubted. [Citations omitted]
26 In an extensive review of the authorities, the court in Leys & Leys approved the principles formulated by Lord Diplock in Wentworth Securities Ltd v Jones[14] concerning the three conditions that must be satisfied before a court may read words into a legislative provision to give effect to its purpose. Lord Diplock said:
First, it was possible to determine from a consideration of the provisions of the Act read as a whole precisely what the mischief was that it was the purpose of the Act to remedy; secondly, it was apparent that the draftsman and Parliament had by inadvertence overlooked, and so omitted to deal with, an eventuality that required to be dealt with if the purpose of the Act was to be achieved; and thirdly, it was possible to state with certainty what were the additional words that would have been inserted by the draftsman and approved by Parliament had their attention been drawn to the omission before the Bill passed into law. Unless this third condition is fulfilled any attempt by a court of justice to repair the omission in the Act cannot be justified as an exercise of its jurisdiction to determine what is the meaning of a written law which Parliament has passed. Such an attempt crosses the boundary between construction and legislation. It becomes a usurpation of a function which under the constitution of this country is vested in the legislature to the exclusion of the courts. [Citations omitted]
27 The Court of Appeal concluded that the question - whether a construction should be adopted that departs from the literal meaning of the words used in a statutory provision to give effect to the purposes of the provision - is to be answered by reference to the three conditions set out by Lord Diplock, together with the additional requirement that the modified construction is reasonably open. That is to say, it must be possible to 'read in' or imply the additional words into the relevant statutory provision without giving to the provision an unnatural, incongruous or unreasonable construction and the provision as modified must produce a construction that is in conformity with the statutory scheme.[15]
28 In my view, reading words into the section as I have suggested, for the reasons I have given, satisfies the conditions specified by the Court of Appeal in Leys & Leys.
29 Section 33X(4) of the Act provides that unless the court is satisfied that it is just to do so, an application for approval under s 33V must not be determined unless notice has been given to group members. It was submitted by all parties appearing on this application that it is just not to give notice to group members and that I should dispense with that requirement.
30 The parties advanced a number of valid considerations:
(a) The fire suppression case is hopeless, foredoomed to fail, and only carries adverse costs risks and the prospect of unnecessarily extending the trial. For reasons explained below, it is inconceivable that, properly advised, a group member would oppose its dismissal on the agreed basis.
(b) Group members, who will be bound by the determination of the fire suppression case through its dismissal, ordinarily have the right to oppose the orders that I have made. Unaware of its dismissal, they lose that right. No benefit is associated with that right or lost by a group member through an inability to resist this application.
(c) The date for opting out of the group proceeding has long past.
(d) This application is immaterial to the decision for group members whether to register with Mrs Matthews' lawyers as part of the class closure process. Registration will affect the opportunity for group members to obtain a benefit on settlement but class closure occurs on 2 April 2013. Persons who may register under class closure directions are presently members of the group who will be affected by dismissal of a claim so the settlement is irrelevant to a decision to register.
(e) The consequences are the same for all categories of group member whether making claims for property damage or for personal injury and whether registered under class closure procedures.
(f) Under those class closure procedures, orders have been made for notices to be sent to group members. A further notice carries a risk of creating confusion and uncertainty without conferring any benefit.
(g) There is a prospect that a requirement for notice to group members of this approval application would have delayed the start of the trial on 4 March 2013 in order to complete the approval process and provide certainty to Mrs Matthews and the State parties when opening their cases.
(h) There has been a massive allocation of resources to this litigation by the parties, and by the court, that militates strongly against any delay in the completion of the carefully structured trial preparation timetable. Within a week of the application, written openings, tender lists, and witness lists were due to be filed and exchanged. A compelling countervailing consideration would seem to be required.
(i) The plaintiff's solicitor has stated in an affidavit that the costs of recent publication and dissemination of notices in relation to class closure has cost the parties approximately $250,000 in disbursements (excluding any legal costs) as well as involving the allocation of substantial resources by the plaintiff's legal team. It is reasonable to infer that the costs of the publication and dissemination of a notice in relation to this application are likely to be substantial, disproportionate to, and indeed may exceed, the savings for the plaintiff and group members that will arise from acceptance of the CFA's offer.
(j) The fire suppression case is a very small part of the plaintiff's claims and their termination by dismissal neither removes the CFA as a party nor determines all of the claims that are brought against it.
31 In determining whether it is just to dispense with the notice to group members, by virtue of s 8 of the Civil Procedure Act 2010 (Vic), I must seek to give effect to the overarching purpose to facilitate the just, efficient, timely, and cost effective resolution of the real issues in dispute in the proceeding. In making any order or giving any direction in a civil proceeding, the court is required to further the overarching purpose under the Act by having regard to the matters set out in s 9 thereof. This directive applies to the discretion to be exercised under s 33X(4) of the Act.
32 A matter deserving of considerable weight in exercising this discretion is that, in my view, there is no real prospect that a group member, acting rationally, would oppose the orders that have been made. That is because, as I will explain, it is reasonable to conclude that the fire suppression case has no real prospects of success.
33 The other considerations I have set out favour dispensing with notice. There is a significant prospect that a requirement of notice would disrupt the preparation of the case for trial for no good purpose, resulting in an inefficient use of judicial and administrative resources. Further, I think the expense and inconvenience of notice, about which I have evidence, is disproportionate to any benefit, which appears illusory, another respect in which an inefficient waste of judicial resources may come about.
34 For these reasons, I dispensed with the requirement of notice to group members of this application.
35 The principles to be applied in an application for approval under s 33V are well known.[16] The court will assess whether the settlement is fair and reasonable as between the parties and as between the plaintiff and individual group members. Provided the settlement falls within the range of fair and reasonable outcomes, taking everything into account, it should be regarded as qualifying for approval under s 33V.
36 In approvals of settlements in group proceedings arising out of other fires on Black Saturday,[17] Beach and Emerton JJ have, with respect, correctly explained the principles as they emerge from decisions in this court and in the Federal Court. There is nothing to be gained from a fresh analysis of the authorities. I will conveniently adopt what Beach J stated in Thomas v Powercor Australia Limited:[18]
The purpose intended to be served by s 33V(1) is obvious. It is appropriate for the court to be satisfied that any settlement or discontinuance of representative [group] proceedings has been undertaken in the interests of the group members as a whole, and not just in the interests of the applicant and the respondent.
In Williams v FAI Home Security Pty Ltd, Goldberg J described in general terms the task of the Court on an approval application:
Ordinarily the task of a court upon an application such as this, is to determine whether the proposed settlement or compromise is fair and reasonable, having regard to the claims made on behalf of the group members who will be bound by the settlement.
Goldberg J referred to a number of matters that the Court will take into account in determining what is fair and reasonable. The matters referred to by his Honour were the amount offered to each group member, the prospects of success in the proceeding, the likelihood of the group members obtaining judgment for an amount significantly in excess of the settlement offer, the terms of any advice received from counsel and from any independent expert in relation to the issues which arise in the proceeding, the likely duration and cost of the proceeding if continued to judgment, and the attitude of group members to the settlement.
JessupJ, in Darwalla Milling Co Pty Ltd v Hoffman La Roche Ltd, observed that his review of subsequent judgments of the Court under s 33V did not disclose any pattern of systematic consideration of these matters in the way, for example, of a checklist, and that the case before him involved specific problems and issues which no predetermined list could ever hope to anticipate. He also commented that those factors threw little light on the proper resolution of the rather difficult inter se issues that arose in the proceeding before him.[26]
12 Emerton J then said:[27]
It is true that in practice every case must be dealt with on its own merits, and by reference to specific factors which might raise serious doubts as to fairness and the like. However, although in the present matter the 'inter se issues' - that is, the way in which the settlement sum is to be distributed among group members - is one of the principal issues of concern, the Williams factors provide useful guidance, and I propose to assess the reasonableness and fairness of the settlement by reference to those factors, although I do not propose to use them as a checklist.[28]
The court's function is, relevantly, confined to the question whether the settlement was fair and reasonable. There will rarely, if ever, be a case in which there is a unique outcome which should be regarded as the only fair and reasonable one. In settlement negotiations, some parties, and some advisers, tend to be more risk-averse than others. There is nothing unreasonable involved in either such position and, under s 33V, the court should, up to a point at least, take the [plaintiffs] and their advisers as it finds them. Neither should the court consider that it always knows more about the group members' businesses than the [plaintiffs], or more about the actual risks of the litigation than their advisers. So long as the agreed settlement falls within the range of fair and reasonable outcomes, taking everything into account, it should be regarded as qualifying for approval under s 33V.[32]
37 The CFA submits that the fire suppression case is hopeless and ought to be dismissed. This submission appears soundly based. The solicitors for the State Parties have reviewed the lists of witnesses that each party proposes to call that were exchanged on 26 October 2012. No witness has been identified from the lists put forward by each of the plaintiff, SPI and UAM who might give evidence that would support or make good key assumptions provided by SPI to its expert Mr James McMullen or otherwise support or make good the fire suppression case. Further, a number of witnesses to be called by the State parties will give direct observational evidence of the fire during the period the fire was alleged, as part of the pleaded suppression case, to have been capable of suppression. That direct observational evidence is inconsistent with the assumptions that have been made by Mr McMullen. The State parties propose to lead expert evidence from Richard Mangan whose opinion is that the Kilmore East fire was out of control and unable to be suppressed within minutes of its inception.
38 It appears that witnesses to be called by the State parties, whose evidence may not be directly contradicted, will describe the fire and the CFA response to it in a manner that will not support the assumptions made by Mr McMullen and will support the assumptions made by Mr Mangan. In other respects, Mr McMullen's opinion is premised on the ready and proximate availability of fire fighting resources of a nature and of an extent that, in reality, could never have been marshalled by the CFA in response to the Kilmore East fire. It is likely that Mr Mangan's evidence will be accepted at trial.
39 It is sensible and reasonable to conclude that a claim that is dependent for its success on expert evidence becomes fanciful once the basis for the expert opinion that has thus far sustained it evaporates. That is what has happened here. The expert's opinion based on unproved assumption will become irrelevant and is likely to become either inadmissible or unacceptable to the court. It is a central tenet of the Civil Procedure Act, evident in its application to experts,[33] that expert opinion plays a critical role in relation to the overarching purpose expressed by that Act. Its obligations come into play prior to trial, for participants in litigation on whom the overarching obligation falls, when the basis for expert opinion falls away.
40 The CFA's contentions about the likely outcome for the fire suppression case have been put to the plaintiff, SPI and UAM and have not been contradicted. Rather, the plaintiff and UAM support them. The legal representatives for SPI have not, since the CFA's offer was made, contended that any other, or different, assessment of its prospects of success is appropriate.
41 Objectively assessed, I cannot see a basis to accept that the fire suppression case has a real prospect of success. The probability is that continuing to prosecute that claim will bring adverse consequences to which I will refer.
42 From the terms of the open offer, no improved offer seems likely to be available.
Likely duration and cost of proceedings in the future
43 In addition to avoiding prosecuting a case with no real prospects of success, the dismissal of the suppression case is likely to shorten the trial by at least three weeks. Significant future costs are saved. There may also be an intangible benefit to group members in the major claims that the plaintiff seeks to prosecute through greater cooperation from CFA volunteers, understandably ambivalent to a plaintiff advancing the fire suppression case.
44 The significant benefit for the plaintiff from the acceptance by SPI of the CFA's offer is that it no longer faces a proportionate liability defence that turns on the possibility of the CFA being responsible for any loss and damage caused to the plaintiff. Joining a party to a proceeding and making allegations against it for no better reason than that such allegations have been put into the plaintiff's mouth by a proportionate liability defence, can be a strategy involving a high risk of an adverse costs order. Given the complexity of this litigation, I do not suggest that the plaintiff's legal advisers acted inappropriately but the fact that the allegations were made 'as a matter of prudence' reinforces the sense in resolving a risk that the fire suppression claim is likely to fail with adverse cost consequences. I should add that the open offer from the CFA foreshadows that it would press for costs orders on an indemnity basis, and possibly against others apart from the plaintiff, if the offer were refused.
Terms of advice from counsel and independent experts
45 In Pathway Investments Pty Ltd & Anor v National Australia Bank Ltd (No 3),[34] Pagone J reviewed the authorities in which the importance to the court of the candid opinions of the solicitors and barristers acting for the parties about prospects of success and the merits of a settlement had frequently been remarked upon. I agree with his Honour's analysis of those authorities. On the present application, in addition to the submissions made by counsel for the State parties, which I have described above, senior counsel for the plaintiff provided a confidential opinion by memorandum. It is not appropriate to disclose the matters in the confidential opinion of the plaintiff's counsel save to record that it sets out in detail his view about the weaknesses in the fire suppression case and confirms what has been previously stated publicly, that the plaintiff adopted the cause of action alleged by SPI as a matter of prudence having regard to the implications of Part 4AA of the Wrongs Act.
46 As an officer of the court, counsel has expressed his confidential opinion with proper regard to the purpose for which court approval of a settlement is required. The opinions he has expressed are supported by detailed reasoning and analysis not only of the evidence that it is expected will be led in this trial but also with reference to relevant aspects of fire suppression as it has unfolded in other proceedings arising out of Black Saturday bushfires and in the inquiry conducted by the Victorian Bushfire Royal Commission. From this thorough memorandum, the court is able to conclude for itself that the settlement of the fire suppression case avoids the probability of an adverse finding for the plaintiff with costs consequences in terms of both an extended trial and adverse costs orders.
47 The dismissal of the fire suppression case provides a significant advantage to group members. In my view, that conclusion is clear from both the submissions made on behalf of the State parties, supported by counsel for UAM and the plaintiff's counsel's confidential memorandum notwithstanding that each party has particular interests.
48 I have no hesitation in concluding that the settlement that has resulted in the dismissal of the fire suppression case by consent is fair and reasonable. Further, a dismissal of the suppression case does not create any circumstances of inequality between group members inter se or between the plaintiff and group members.
[1] see s 18 Civil Procedure Act 2010 (Vic).
[2] [2002] VSC 457 (22 October 2002).
[3] although the definition of 'proceeding' under the Federal Court of Australia Act 1976 (Cth) is not.
[4] [1996] FCA 1119; (1996) 71 FCR 250, 258.
[5] [2002] FCA 872; (2002) 121 FCR 480, 491-494.
[8] [2002] FCA 957; (2002) 122 FCR 168 [44]-[46], 181-182.
[9] (2003) FCA 1505 (19 December 2003).
[11] (2012) NSWSC 532 (21 May 2012).
[12] following Farah Constructions v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89, 151-152 [135].
[13] [2012] VSCA 304 (12 December 2012), [48]-[49].
[15] Ibid, [109]. See also Dale v The Queen [2011] VSCA 324 (20 December 2012).
[16] See generally Wheelahan v City of Casey [2011] VSC 215 [59]-[61]; Perry v Powercor [2012] VSC 113 [9]-[16]; In re Timbercorp Securities Limited (applications for the approval of compromises) [2012] VSC 590 [64]-[68]; and Pathway Investments Pty Ltd & Anor v National Australia Bank Limited (No 3) [2012] VSC 625 [2].
[17] Perry & Anor v Powercor Australia Limited [2012] VSC 113 (29 March 2012); Mercieca & Anor v SPI Electricity Pty Ltd & Ors; SPI Electricity & Ors v Eagle Travel Tower Services Pty Ltd & Ors [2012] VSC 204 (16 May 2012); Place v Powercor Aust Ltd [2013] VSC 6 (1 February 2013).
[18] [2011] VSC 614 (5 December 2011).
[19] See for example Australian Competition and Consumer Commission v Chats House Investments Pty Ltd [1996] FCA 1119; (1996) 71 FCR 250; Lopez v Star World Enterprises Pty Ltd [1999] FCA 104; (1999) ATPR 41-678; Williams v FAI Home Security Pty Ltd (No 4) (2000) 180 ALR 459; Darwalla Milling Co Pty Ltd v F Hoffman La Roche Limited (No 2) [2006] FCA 1388; (2006) 236 ALR 322; Taylor v Telstra Corporation Limited [2011] FCA 2010; Rod Investments Pty Ltd v Abeyratne [2010] VSC 457 and Wheelahan v City of Casey [2011] VSC 215.
[20] [1996] FCA 1119; (1996) 71 FCR 250, 258.
[21] The equivalent of s 33V(1) of the Supreme Court Act.
[25] [2011] VSC 215 [59]-[61].
[27] [2011] VSC 215 [62].
[29] Wheelahan v City of Casey [2011] VSC 215 [63].
[31] Cf P Dawson Nominees Pty Ltd v Brookfield Multiplex Limited (No 4) [2010] FCA 1029 [23] and Rod Investments (Vic) Pty Ltd v Abeyratne [2010] VSC 457 [22].
[32] Darwalla v F Hoffman La Roche Limited (No 2) [2006] FCA 1388; (2006) 236 ALR 322, 339 [50]. See further, Wheelahan v City of Casey [2011] VSC 215 [110].
[34] [2012] VSC 625 (19 December 2012).
(2001) 116 FCR 509
(1996) 71 FCR 250
(2002) 121 FCR 480
(2002) 122 FCR 168
(2007) 230 CLR 89
(2000) 180 ALR 459
(2006) 236 ALR 322