Plaintiff v Defendant

2 The plaintiff filed an affidavit of its solicitor, Nicholas Holt, sworn 11 August 2023 in support of the Approval Application ('Holt Affidavit').

3 There is no dispute between the parties as to whether the Court should grant leave to the plaintiff pursuant to s 33W(1) of the Act. The defendant supports the plaintiff's Approval Application, save for the form of order to be made as to costs.

4 In essence, the parties are in dispute as to the form of the costs order which should be made to give effect to their agreement ('Costs Dispute'). I will explain this in more detail later.

5 By summons filed 18 August 2023, the defendant seeks that orders be made so that certain information contained in the Holt Affidavit and in the plaintiff's 11 August 2023 summons be treated as confidential and kept as confidential ('Confidentiality Application'). This application is supported by two affidavits of the defendant's solicitor, Thomas Kelly, sworn 18 August and 11 September 2023. The nature of the information sought to be treated as confidential and the basis upon which those orders are sought will be set out later.

6 The parties made written and oral submissions in respect of the Approval Application, the Costs Dispute and the Confidentiality Application.[1]

7 These matters were heard by me on 20 September 2023. It was conducted in such a way as to not refer to the detail of the alleged confidential information, so that the hearing itself could occur in open court with no restriction on attendance or publication.

8 At the conclusion of the hearing on 20 September 2023, I stated that - pursuant to s 33W(1) of the Act - I would grant leave to the plaintiff to settle its individual claim and gave oral reasons for that decision. I reserved my decision in respect of the Costs Dispute and the Confidentiality Application.

9 Accordingly, these are my reasons in respect of the Costs Dispute and the Confidentiality Application. I have decided that the Costs Dispute is to be resolved in favour of the plaintiff and that the Confidentiality Application should be refused.

10 The plaintiff was an authorised dealer of Holden cars under a five-year dealership agreement which commenced in 2018. In February 2020, the defendant announced that General Motors Company was ceasing the manufacture of Holden vehicles which led to the defendant ceasing to supply the plaintiff and other dealers with Holden vehicles several months later. The plaintiff alleges that the non-supply of Holden vehicles by the defendant for the duration of the dealership agreement was a breach of that agreement.

11 The plaintiff brings this proceeding on behalf of itself and others who entered into dealership agreements with the defendant commencing on 1 January 2018 for five year terms. The class is closed and comprises the plaintiff and ten other group members who sold and serviced Holden branded vehicles in dealerships in various Australian States.

12 While the settlement agreement - which I shall describe in the next section - means that the plaintiff's individual claim has been settled, the plaintiff is remaining as the plaintiff and is continuing its representative role. At the time of the hearing, the trial of the proceeding insofar as the common questions are concerned was due to commence the following week. As I understand it, that occurred and the trial has been adjourned part heard until 8 November 2023.

13 On 14 July 2023, the defendant sent to the plaintiff an offer of compromise under the Supreme Court (General Civil Procedure Rules 2015 ('Rules') dated 14 July 2023 ('Offer') and a covering letter also dated 14 July 2023 ('Letter'). By email dated 25 July 2023, the plaintiff accepted the Offer ('Acceptance'). The Offer and the Acceptance together give rise to the settlement agreement. In these reasons, I shall refer to the amount to be paid pursuant to the settlement agreement (as per paragraph 1(a) of the Offer) as the Settlement Sum.

14 It is convenient to set out here some aspects of the Offer, Letter and Acceptance, omitting the details which the defendant seeks to have treated as confidential.

1. The defendant offers to compromise the plaintiff's claims in this proceeding in the following manner:

(a) by paying [the Settlement Sum] to the plaintiff;

(b) by consenting to an order pursuant to section 33W(1) of the Supreme Court Act 1986 (Vic) that the plaintiff has leave to settle the whole of its claims in the proceeding on the terms of this offer of compromise; and

(c) consenting to an order (including pursuant to section 33W(5) of the Supreme Court Act 1986 (Vic)) in such terms as the Court may consider fit providing for the payment by the defendant of the plaintiff's costs of the proceeding, up to and including the day this offer of compromise is served.

1. The time for payment of the sum specified in paragraph 1(a) is 28 days from the date of acceptance of this offer.
2. 3. The time for payment of the plaintiff's costs is within 28 days of agreement as to the amount of those costs or, in default of agreement, of the taxation of those costs.
3. This offer of compromise is open to be accepted by the plaintiff for 14 days after its service.

16 The Letter was stated to be 'without prejudice save as to costs' and enclosed the Offer. It sets out the defendant's analysis of the plaintiff's claim in the proceeding, explaining why it considers its Offer to be reasonable and is made without any admission of liability. The Letter states that if for any reason the enclosed Offer is not effective under Order 26 of the Rules, then the Letter and the substance of the Offer will be relied upon on the question of costs on the principles in Calderbank v Calderbank [1975] 3 All ER 333 and Cutts v Head [1984] Ch 290. The Letter states the following in respect of costs:

The offer of compromise includes payment of Beecham's costs. The scope of the costs to be paid if the offer is accepted would be subject to, and in accordance with, any costs order as the Court may make in approving the settlement on an application made under section 33W(1) of the Supreme Court Act 1986 (Vic); having regard to whether an order is made for the substitution of a new lead plaintiff, or otherwise as to the continuation (or not) of the group proceeding.

Beecham Motors Pty Ltd accepts the Offer of Compromise dated 14 July 2023.

We will write to you separately regarding the next steps in the proceeding, including the section 33W approval process.

18 The plaintiff contends that the appropriate form of order in respect of costs is ('Plaintiff's Costs Order'):

The Defendant pay the Plaintiff's costs of the proceeding up to and including 14 July 2023 to be taxed failing agreement.

19 The defendant contends for a different formulation to that of the plaintiff.

20 The defendant's proposed costs order has changed over the course of the Costs Dispute.

(a) In the Defendant's First Outline, it submitted that the form of order should be as follows, marked up to show changes from the plaintiff's version ('Defendant's First Costs Order'):

The Defendant pay the Plaintiff's costs of the proceeding incurred up to and including 14 July 2023, being those costs in respect of which as at 14 July 2023 the Plaintiff had either paid, or had a legal obligation to pay, to its lawyers, to be taxed failing agreement.

(b) In the Defendant's Second Outline, it submitted that the form of order should be as follows ('Defendant's Second Costs Order'):

GM Holden pay Beecham's costs of the proceeding incurred up to and including 14 July 2023, being those costs in respect of which as at 14 July 2023 Beecham paid to its lawyers, to be taxed failing agreement.

(c) At the hearing, after I indicated that this wording did not appear to include any work performed but not yet billed ('WIP'), the defendant conceded that its wording should be amended to include WIP. A further form of wording was not provided at that point.

21 In essence, the parties are in disagreement as to the construction of the settlement agreement insofar as it concerns the payment of costs, with the various versions of the order posited as reflecting the correct construction of the settlement agreement.

22 The defendant contents that it was only the plaintiff's costs of its individual claim, as opposed to the costs inclusive of the group members' claims, that it agreed to pay as it was only the plaintiff's individual claim which was being settled. The plaintiff disputes this contention, saying that the terms of the Offer were clear and that it was the plaintiff's costs up to and including 14 July 2023 which were to be paid and that there was no distinction between the plaintiff's costs and other costs.

23 Initially, the defendant relied on the indemnity principle to support its contention that the Defendant's First Costs Order reflected the settlement agreement. The Plaintiff's Second Outline pointed out that the indemnity principle had no work to do here. The plaintiff submitted that in the Defendant's First Outline, the defendant misunderstands the indemnity principle, and the contention that the Defendant's First Costs Order embodies the indemnity principle is misplaced. The defendant then filed its second outline which put the argument somewhat differently, but still appeared to rely, at least in part, on the indemnity principle. At the hearing, the defendant stated that it no longer relied on the indemnity principle as a basis for the form of the costs order it favoured. Accordingly, I have not summarised the parties' written submissions in respect of the indemnity principle.

24 Before summarising the parties' submissions as relied upon, there are some matters which it is first convenient to describe.

25 Pursuant to the relevant practice note regarding class actions, the plaintiff had previously disclosed, to the defendant and to the Court:

(a) a costs agreement between HWL Ebsworth, the plaintiff and each group member (together, the 'Dealers') dated 20 October 2020. HWL Ebsworth was jointly engaged by the Dealers to conduct this proceeding on their behalf and the Dealers are jointly and severally liable for the firm's costs; and

(b) a group proceeding summary statement (filed 8 April 2021) which stated that the plaintiff and group members have agreed to share the costs equally.

26 The content of the cost-sharing arrangement between the plaintiff and group members is confirmed by the costs deed entered into between the plaintiff and group members with respect to the settlement agreement, which reflects that the plaintiff and each group member had previously paid, and would each continue to pay, 1/11th of the legal costs of the proceeding.

27 In the Defendant's First Outline, the defendant made the following submissions regarding costs.

28 It contended that the Defendant's First Costs Order was designed to make explicit what is already implicit in the Plaintiff's Costs Order, namely that it was the plaintiff's individual claim which has been settled and it is only those costs of the proceeding, for which the plaintiff is liable to its lawyers, that are encompassed by the settlement agreement and, hence, the order for costs.

29 It submitted that its formulation not only embodies the indemnity principle,[2] but also the terms of the settlement agreement.

30 The defendant pointed to the terms of paragraph 1(c) of the Offer and to the paragraph cited above from the Letter, and submitted that it is clear that it is the individual claim of the plaintiff which is the subject of the settlement agreement. It is said that it is only that individual claim which has been settled, such that all claims other than the plaintiff's individual claim are extant in the proceeding. The defendant submitted that if it successfully defends those other claims, the orthodox position is that costs will follow the event and it will be entitled to recover its costs (save only insofar as those costs concerned the plaintiff's individual claim only) as against the named plaintiff. The defendant submitted that if another group member was substituted for Beecham as the named plaintiff, then that group member would in the usual course have been liable for pre-substitution costs if the defendant were successful in the proceeding, relying on Liesfield v Ausnet Electricity Services Pty Ltd (Ruling No 4).[3]

31 In the Plaintiff's Second Outline, the plaintiff made the following submissions regarding costs in response to the Defendant's First Outline.

32 The plaintiff submitted that the defendant is effectively asking the Court to re-write its agreement to pay the plaintiff's costs of the proceeding up to and including 14 July 2023 so that the costs payable are limited to those costs which the plaintiff, as at that date, had paid, or had a legal obligation to pay, its lawyers.

33 The plaintiff submitted that, given that the Offer included consent to an order that it pay the plaintiff's costs of the proceeding up to and including 14 July 2023, the defendant ought not even be advancing contrary submissions. The plaintiff submitted that the costs payable are its costs of the proceeding up to and including 14 July 2023, and the Offer leaves open the Court's ability to effect that agreement, for example by ordering the costs be taxed, or paid as a gross sum.

34 The plaintiff submitted that the Letter provides context to the construction of paragraph 1(c) of the Offer, but does not itself form part of the settlement agreement or the offer that was accepted by the plaintiff. It notes that the Acceptance email stated that the plaintiff accepted the Offer of Compromise, and submits that it is only the Offer which contains the terms of the proposed settlement, not the Letter.

35 The plaintiff submitted that normal principles of contractual interpretation apply to the interpretation of an agreement to pay costs in a settlement agreement.[4]

36 It says that the Offer is to pay the 'plaintiff's costs of the proceeding'. It does not distinguish between the costs of common questions or individual questions, nor does it distinguish between the costs paid by the plaintiff and the costs paid by others. The defendant could have drafted the offer to distinguish between the categories of costs, and the payer of the costs, and could have offered to pay some but not others. If the defendant had wanted to distinguish between individual and common costs, or limit the costs based on funding source, it could have done so through express language in the Offer and the Letter. It is a sophisticated and well-resourced litigant, represented by a major firm as well as senior and junior counsel. The Court should not conclude that the wording of the Offer was in error or that the failure to distinguish between common and individual costs, or the failure to distinguish between costs funded by the plaintiff and costs funded by others, was inadvertent. To the contrary, the Offer to pay the plaintiff's costs of the proceeding was quite deliberate.

37 The plaintiff submits that the Defendant's First Outline appears to suggest that the Court has an unfettered discretion under the settlement agreement to make whatever costs order the Court sees fit. On the defendant's construction of paragraph 1(c) of the Offer, the words 'in such terms as the Court may consider fit' give the Court the discretion to disregard the costs which the defendant has agreed to pay under the balance of the sub-paragraph and substitute that agreement with another posited by the defendant. The plaintiff says that this is wrong as a matter of construction. On its proper construction, the contractual agreement under paragraph 1(c) to make a costs order 'in such terms as the Court may consider fit' enables the Court to make an appropriate order 'providing for the payment by the defendant of the plaintiff's costs of the proceeding ...'. The Court has a role in giving effect to this wording, but not a discretion to re-write the terms of the settlement. For example, the Court may order that costs 'be taxed in default of agreement', or be a gross sum for costs.[5] The wording 'in such terms as the Court may consider fit' is directed towards the Court making an order to give effect to the agreement in accordance with the most appropriate procedures available under Order 63 of the Rules and the Court's inherent jurisdiction.

38 The plaintiff also submits that on the defendant's construction, the plaintiff was being asked to accept an offer where the plaintiff could not know the costs payable, or even the defendant's contentions on the costs payable, until the Court exercised its discretion. This is an untenable construction.

39 The plaintiff submits that, without accepting that there is anything ambiguous or uncertain about paragraph 1(c), it is to be observed that as the defendant's solicitors drafted the Offer, it is to be interpreted contra proferentem. This is because 'words of written documents are construed more forcibly against the party putting forward the document ... [which] is based on the principle that a party putting forward the wording of a proposed agreement may be assumed to have looked after its own interests [and] is responsible for ambiguities in its own expression'.[6]

40 The plaintiff submits that this principle applies to Calderbank letters and offers of compromise.[7] In Heather v Vita Pacific Ltd it was held that:

In arriving at this construction, I take into account that it was the defendant who prepared the offer and had complete control over its terms. The plaintiff could only accept or reject the offer. The terms of the agreement which resulted from the plaintiff's acceptance of the offer were not negotiated, they were the terms stipulated by the defendant. In such a situation it is not unreasonable to construe an ambiguity in the agreement against the party who had complete control over its terms.[8]

41 The plaintiff says that even if, contrary to the above, the defendant's submission as to construction is accepted (to the effect that the Court has an unfettered discretion in relation to what costs it orders the defendant pay to the plaintiff), there could be no proper basis for the Court in exercising that discretion to depart from the parties' agreement that such an order would provide for the defendant to pay the plaintiff's costs of the proceeding.

42 The plaintiff submits that the Offer is to be interpreted against the backdrop of the statutory scheme for group proceedings under the Act. It is the plaintiff or defendant who is liable for costs by reason of s 33ZD and, except in narrowly defined circumstances with no application here, the group members are not liable for adverse costs. They would only have cost liabilities following an order under ss 33Q, 33R or s 33S, or as part of the appointment of a sub-group representative party under s 33T.

43 The plaintiff notes that the Offer refers to '(including pursuant to s 33W(5) of the [Act])', but says that s 33W(5) has no operation here. Section 33W(5) provides as follows:

The Court may make an order under subsection (2) or (3) on such terms and conditions, as to costs or otherwise, as the Court thinks fit.

44 The plaintiff submits that there will not be a s 33W(5) order in this proceeding as a result of the settlement agreement. Section 33W(5) is only enlivened where an order is made under s 33W(2) removing the plaintiff and an order under s 33W(3) replacing the plaintiff with a group member. In this case, the plaintiff will remain as plaintiff for the trial of the common questions. The Court hearing the trial will be able to make whatever costs orders it considers fit at that time. But whether the plaintiff was replaced or remained for the trial of the common questions cannot affect the content of the offer made to the plaintiff to settle its claim, because the offer was not expressed in that way.

45 The plaintiff also submits that the relevant context for the Offer was that the common questions were not then known. The Court noted, as early as 2021, that what constituted the common questions could change, and that Merck orders would likely be made and that the common findings would likely extend beyond or be different to those contained at the end of the Plaintiff's pleading.[9] It would not be possible to know in advance of those Merck orders, and the conclusion of the trial, what costs related to common questions and what costs related to the individual questions specific to the plaintiff's individual claim. An offer that distinguished between common and individual costs would have been unclear.

46 The plaintiff says that it is also relevant context that the Offer was framed as an offer of compromise or Calderbank letter, and was intended to be relied upon for the question of costs.[10] That prospect of the offer having that operative effect was maximised by the offer including the plaintiff's costs of the proceeding. That is, the defendant would say that if the plaintiff obtained judgment in a sum less than the offer amount with an order for its costs of the proceeding, that would have engaged the costs protection of the offer of compromise and Calderbank letter. In the context of a group proceeding where the parties' costs are commonly disproportionate to the quantum of the plaintiff's claim (as opposed to the claims of the group members), an offer may never be reasonable unless the defendant's offer included the plaintiff's costs of the proceedings because it would otherwise leave the plaintiff out of pocket.

47 The plaintiff submits that, furthermore, the terms of a Calderbank letter and an offer of compromise must be clear, precise and certain to have costs consequences if rejected.[11] Under the Defendant's First Costs Order, the plaintiff says that the Offer and the Letter could never have had costs consequences because the extent of the costs payable was left to the unfettered discretion of the Court. It would not have been unreasonable for the plaintiff to have rejected the offer and the Offer would not have complied with r 26.02(4) of the Rules. That could not have been the defendant's intention (objectively ascertained) in making the Offer.

48 The plaintiff submits that the defendant has picked up (after the Offer was accepted) that, although the plaintiff is liable for all its legal costs, the plaintiff's liability has in large part been funded by the group members. The plaintiff and the group members entered into a formal arrangement between themselves as to costs following acceptance of the Offer. Opportunistically, the defendant now wants the Court to make the costs order in its preferred form.

49 The plaintiff submits that the intended effect of the Defendant's First Costs Order would be that approximately only 1/11th of the plaintiff's costs would be subject to the order, and the great bulk of the plaintiff's costs of the proceeding would not be paid. The source of funds to meet the plaintiff's liability is irrelevant to the Court in the proper exercise of any discretion it may have to formulate an order for costs.[12]

50 The defendant submits that the correct interpretation of paragraph 1(c) of the Offer is that it encompasses the costs of the plaintiff's individual claim but not the costs of the common claims. That interpretation is most consistent with the text, context, and purpose of the settlement agreement, and is affirmed by the relevant surrounding circumstances, including the plaintiff's disclosed funding arrangements and the statutory setting which, contrary to the plaintiff's submissions, supports the defendant's interpretation.

51 The defendant says that the plaintiff's construction of the settlement agreement would mean it would be entitled to payment of not just the costs of its individual claim, but also the costs of group members in respect of the common claims. This construction is inconsistent with the text, the mutually known circumstances - including the statutory setting of a class action and that it was only the individual claim which was the subject of the Offer and settled - and productive of a commercial nonsense whereby the defendant would be required to indemnify group members for their costs incurred up to 14 July 2023 in circumstances where their claims were not resolved under the settlement agreement and continue to be prosecuted against the defendant and defended by it in the proceeding. The plaintiff's interpretation is wrong.

52 Insofar as the principles of interpretation are concerned, the defendant submits that the settlement agreement, consisting of an accepted offer of compromise, constitutes a contract of compromise at common law.[13] As Evans J identified in Vita Pacific Ltd & GIO General Ltd v Heather, '[i]n considering the effect of the compromise ... it is important to keep in mind ... that the Court is construing a contract'.[14]

53 The defendant says that the settlement agreement falls to be construed objectively by reference to the text and its ordinary meaning, together with the context, being the entire text of the document, the matters referred to in it, and its commercial purpose.[15] The identification of purpose may involve consideration of the genesis of the compromise, the context, and the commercial setting in which the parties are operating.[16] Evidence of surrounding circumstances is admissible to assist with interpretation if the language is ambiguous.[17]

54 The defendant says that the Court should give the settlement agreement a business-like interpretation unless the express words require otherwise,[18] and it must construe the settlement agreement to avoid it 'making commercial nonsense or working commercial inconvenience'.[19] It is in this connection that, in Perdaman Chemicals (No 12), Edelman J explained that the 'construction and implication of terms in contracts of compromise ... [should] proceed against an obvious commercial intention of the parties to achieve finality in the resolution of their disputes'.[20] The reference to 'their disputes' and the identification of that which was settled are both important.

55 The defendant submits that the text, context and purpose favour its construction of the settlement agreement.

56 The defendant submits that the possessive adjective 'plaintiff's' in paragraph 1(c) of the Offer is a clear textual indication that the 'costs of the proceeding' that the defendant agreed to meet were limited to the costs of the plaintiff's individual claim. So much is affirmed by the surrounding provisions of the Offer which include:

(a) the addressee as 'the plaintiff';

(b) the payment of a Settlement Sum by the defendant to the plaintiff;

(c) that only the plaintiff's individual claim was settled, and the distinction recognised in the Act between common costs and costs of an individual claim; and

(d) the provision of the defendant's consent to an order under s 33W(1) of the Act that the plaintiff 'has leave to settle the whole of its claims in the proceeding on the terms of this offer of compromise'.

57 The defendant submits that these provisions disclose that the purpose of the Offer was limited to the compromise of the plaintiff's individual claim against the defendant but not the claims of group members. Indeed, the Offer expressly refers to s 33W of the Act, which includes a mechanism for the substitution of a group member as plaintiff. While s 33D of the Act, which interacts with s 33W, affords a plaintiff standing to continue a Part 4A proceeding despite the compromise of its claim, the Offer was expressly directed to settlement of only the plaintiff's individual claim. It is, therefore, clear that the premise of the Offer was that the proceeding would continue as a vehicle by which the extant claims of group members would be prosecuted subject only to the compromise of the plaintiff's individual claim. The plaintiff's contention that the costs now payable are all costs incurred in relation to the proceedings to the date of the Offer is inconsistent with that known circumstance. The objective effect of the Offer was that the defendant remains able to recover costs of the common issues to the date of the offer if it is successful at trial, and, if not, the representative plaintiff is able to recover those costs pursuant to s 33ZD of the Act.

58 The defendant says that the Letter that accompanied the Offer formed part of the immediate context in which the settlement agreement was formed and supports its interpretation, referring to the paragraph of the letter cited in paragraph 16 above.

59 The defendant says that this paragraph makes clear that the costs the subject of the Offer were the costs of the plaintiff's individual claim alone and that the contemplated form of costs order would reflect the continuation of the proceeding, notwithstanding the resolution of the plaintiff's claim.

60 The defendant submits that elsewhere, the Letter refers generally to 'the costs of the proceeding', but when referring to the costs the subject of the Offer, it specifically refers to 'Beecham's costs'. The distinction between the use of general and specific language when describing the costs of the proceeding confirms that the specific reference to 'Beecham's costs' in the Letter and the corresponding reference to the 'plaintiff's costs' in the Offer are limited to the costs of Beecham's individual claim to the exclusion of the costs of group members.

61 The defendant submits that, fundamentally, there is no discernible linguistic or commercial reason why it would commit to meeting the costs of group members where the proceedings were to continue. To the extent that it would result in this outcome, the plaintiff's interpretation of the settlement agreement produces a commercial nonsense and ought not be accepted.

62 The defendant also submits that the surrounding circumstances affirm its interpretation. If there is ambiguity in the meaning of clause 1(c) of the Offer (which the defendant denies), the Court may have regard to surrounding circumstances.[21] The following surrounding circumstances, mutually known, are said to favour the defendant's construction.

63 The defendant submits that the settlement agreement should be construed by reference to the existence of the cost-sharing arrangement between the Dealers that was known to the defendant by reason of the disclosure of the costs agreement and the disclosure made in the summary statement. The nature of that arrangement reinforces the commercial absurdity that the defendant would have agreed or should be required to meet anything more than the costs of the plaintiff's individual claim which, as agreed between the Dealers, comprised only 1/11th of the total costs of the proceeding.

64 The defendant says that if, for example, it were successful at trial and obtained a costs order against the plaintiff, the benefit of that order would be substantially defeated if the defendant had been required to meet the costs of all of the Dealers up to 14 July 2023, which are likely to comprise the substantial majority of the total costs of the proceeding. In that event, the plaintiff's interpretation of the settlement agreement would deprive the defendant of the benefit of the governing rule that 'the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party'.[22]

65 The defendant says that the statutory scheme recognises the distinction between the costs of common and individual questions recognised by Part 4A of the Act.

66 Further, the defendant says that the precise constitution of this proceeding provides additional support for the conclusion identified. Whilst this proceeding has utilised the Part 4A process, its constitution is in many respects more similar to a multi-plaintiff inter partes proceeding than a class action prosecuted by a lead plaintiff on behalf of a large open class. Here, there is a closed class comprising the plaintiff and ten other group members; HWL Ebsworth is jointly retained by the Dealers to act on their collective behalf in the proceeding; and the costs of the proceeding have been shared evenly as between the Dealers. Moreover, it has been apparent that group members have been involved in instructing HWL Ebsworth in relation to the conduct of the proceeding in a manner not contemplated by Part 4A of the Act, and it is therefore likely that a significant component of the legal costs incurred prior to the Offer relate to legal services provided to group members.

67 The defendant submits that the practical consequence of the settlement agreement (subject to court approval) is the compromise of the plaintiff's individual claim in the proceeding, whilst group members' claims are maintained. In this respect, there is little practical or substantive difference between the compromise under the settlement agreement and a settlement between a sole defendant and one of ten individual plaintiffs, save for the plaintiff's continued entitlement to prosecute the proceeding on behalf of group members under s 33D of the Act. Evidently, in the posited inter partes comparator, there could be no basis to require the sole defendant to meet the costs of the ten remaining defendants. There is no relevant distinction in the constitution of this proceeding that militates in favour of the adoption of a construction of the settlement agreement that would achieve the uncommercial and illogical result contended for by the plaintiff.

68 The defendant submits that there is no case to invoke the contra proferentem principle.

69 The defendant submits that in order for that principle to be engaged, the subject document must be ambiguous[23] and the ambiguity must remain after the application of other principles of construction, such that the rule is one of last resort.[24] Here, the text, context and purpose of the settlement agreement are each consistent with the defendant's interpretation, and any existing ambiguity is resolved in favour of the defendant by reference to the surrounding circumstances identified above and by the adoption of a constructive choice that would produce a commercial result. The contra proferentem principle cannot operate in those circumstances.

70 The defendant contends that the Offer was competent to achieve the desired costs consequences.

71 The defendant refers to the plaintiff's submission that an offer which distinguished between costs of the individual and common questions would have been impermissibly unclear before a Merck order was made. The defendant says that may in theory be so in some circumstances, but in this proceeding the distinction was readily discernible. It is also a question of assessment, raising familiar questions of identification of the costs subject of a costs order (similar, for example to consideration of interlocutory costs orders which require a distinction between costs attributable to the interlocutory application in contrast to the costs of the proceeding generally; or circumstances in which some only of multiple plaintiffs succeed). But the question of assessment does not arise in the present circumstances where the Dealers' disclosed cost sharing arrangement provides an expedient and certain proxy by which to determine the actual costs of the plaintiff's individual claim - namely, 1/11th of the total costs of the proceeding.

72 The defendant also refers to the plaintiff's submission that in the context of Part 4A proceedings, where parties' costs are commonly disproportionate to the quantum of the plaintiff's claim, an offer of compromise or Calderbank offer made by a defendant could never be reasonable unless it included the entirety of the costs of the proceeding as the plaintiff would otherwise be left out of pocket. And, so the plaintiff submits, because the Offer was framed in the alternative as either an offer of compromise or a Calderbank offer, and is presumed to have been drawn to have operative cost consequences, it must have encompassed both the plaintiff's costs and the costs of group members. The defendant submits that the premise is wrong and inconsistent with authority.[25] Further, the generalisation demonstrates the fallacy in the plaintiff's submission: even if theoretically correct in some circumstances (and it is far from apparent that the premise may be correct on occasions), the point is not invariably correct as the present case demonstrates.

73 The defendant submits that in the present context, the fallacy of that premise is exposed when regard is had to the circumstances of this proceeding, both in terms of the large quantum claims made by each Dealer (relative to the typical quantum of individual claims of group members in class actions) and the settlement of only the plaintiff's individual claim. If the costs in the Offer are limited to the costs of the plaintiff's individual claim, the plaintiff would not be left out of pocket by accepting the Offer because it has not borne the costs of the proceeding itself. Rather, under the disclosed cost sharing arrangements, it has met only 1/11th of the costs of the proceeding. Assuming the Offer were refused, and the plaintiff obtained a worse result in respect of its individual claim at trial, it could not plausibly justify its refusal as reasonable on the ground that the Offer did not include the costs of the common questions, given the known cost sharing arrangements. In this respect, the plaintiff erroneously and inaccurately conflates this proceeding with a group proceeding funded solely by a plaintiff. The submission is without foundation.

74 The defendant submits that there is a further problem. The plaintiff's submission postulates a protection of a defendant (the costs benefit of an offer if not accepted), then deploys the predicate in a manner likely to be the disadvantage of a defendant who wishes to attempt to settle an individual claim. For that reason, the submission should be rejected. Relatedly, that an offer is potentially ineffective to engage the usual cost benefit is, as observed earlier in this proceeding, a consequence of the legislative choice to not have an Order 26 procedure tailored to proceedings under Part 4A.[26]

75 The defendant concludes that its interpretation of the settlement agreement should be accepted. It says that the Defendant's Second Costs Order is appropriate to give effect to the settlement agreement. It says that the effect of that order is to entitle the plaintiff to the recovery of the costs of its individual claim as at 14 July 2023, being its 1/11th share of the total costs of the proceeding as at that date as agreed between the dealers under their cost sharing arrangement. The Plaintiff's Costs Order would not resolve the interpretative dispute between the parties and is likely to result in further disputation upon taxation. In the interests of finality, that form of order should not be entertained.

76 The resolution of the Costs Dispute fundamentally comes down to the construction of the phrase 'the plaintiff's costs of the proceeding' contained in paragraph 1(c) of the Offer.

77 The ordinary principles of contractual interpretation apply, beginning with giving the words used their ordinary meaning and taking into account the context known to both parties.

78 I accept the plaintiff's submission that the reasonable person observing the settlement agreement would have thought that by the Offer the defendant was offering to pay the plaintiff's costs of the proceeding up to and including 14 July 2023, not 1/11th of the costs charged by HWL Ebsworth to that date or the amount that the plaintiff had paid its lawyers.

79 The plaintiff is correct when it points out that the Offer did not distinguish between the costs of the plaintiff's individual claim and the costs of the common claims. I put this to the defendant's counsel, who rightly responded that it is not to the point that the defendant could have expressed it differently, as what matters is what construction is given to how it was actually put.

80 Nonetheless, I do not accept the defendant's submissions as to how the settlement agreement is to be construed insofar as costs are concerned. My reasons are as follows.

81 First, the ordinary meaning of 'the plaintiff's costs of the proceeding, up to and including' 14 July 2023 is all of the legal costs for which the plaintiff is liable and which were incurred up to and including that date, subject only to those costs being agreed between the parties or taxed on a standard basis.[27]

82 It is clear that the plaintiff is liable to its solicitors for all of the costs incurred until that date. The costs agreement clearly provides for the plaintiff and the group members to be jointly and severally liable to HWL Ebsworth for legal costs. That the Dealers may have separately agreed to share costs equally, which is not in dispute, is not to the point in this respect. I accept that this was known to both parties at the time of the settlement agreement, but that does not mean that the offer was to pay 1/11th of the costs. The costs incurred by a party in a proceeding are not to be conflated with the funding arrangements for those costs.

83 I accept the plaintiff's submission that the phrase used here has a well understood meaning and that if the plaintiff wins at trial that is the form of order it would obtain. It covers the plaintiff's costs, whether paid by the plaintiff or not, and the focus is not on who pays but on what it covers, being the costs of the proceeding. I do not accept the defendant's submission that the single correct construction is that the 'plaintiff's costs of the proceeding' is limited to the costs the plaintiff actually pays, being 1/11th of the solicitor's costs. In my view, the surrounding circumstances and the words of paragraph 1(c) are clear and are fairly susceptible of one meaning only, being the meaning set out in paragraph 81 above.

84 Second, the fact that it was only the plaintiff's individual claim in the proceeding which was being settled does not contradict the ordinary meaning of the words used. It is consistent with both parties' interpretation of the costs question.

85 There is no distinction in the Offer between individual costs and group costs, or between the costs of the plaintiff's individual claim and the costs of the common questions.

86 Third, the defendant's continued insistence that it effectively agreed to pay only the costs of the plaintiff's individual claim to 14 July 2023 and not the costs of the common questions sits uneasily with its contention that it should only have to pay 1/11th of the legal costs to that date. They may be different things. The defendant attempts to deal with this (albeit in a different context) by saying that the 1/11th is an expedient and certain proxy by which to determine the actual costs of the plaintiff's individual claim. I do not accept this. To say, as the defendant does, that the Dealers agreed that the costs of the plaintiff's individual claim was 1/11th of the total costs of the proceeding (see paragraph 63 above) is to misstate the position as between the Dealers in any event.

87 Fourth, that the plaintiff's construction results in the defendant being liable for group members' costs or the costs of the common questions until 14 July 2023, when group members' claims were not being settled and the common questions remained undecided, may be undesirable from the defendant's current perspective but it does not mean that the plaintiff's construction is productive of a commercial nonsense. The Court is entitled to assume that the defendant took legal advice prior to making the Offer and that it considered the legal and commercial ramifications of the Offer before making it. The defendant may have had sound reasons, including sound commercial reasons, for making the Offer in the terms that it did. For example, the defendant may have thought the costs aspect of the Offer would make it more attractive to the plaintiff. Presumably, when making the Offer, the defendant intended that it would either be accepted in which case it would settle the plaintiff's individual claim in accordance with the terms of the Offer or if it was not accepted, the defendant may obtain some costs protection upon the determination of the proceeding.

88 In any event, the defendant's submission that 'the Court must construe the settlement agreement to avoid it "making commercial nonsense or working commercial inconvenience"' is too simplistic to be accepted. This statement was made by the High Court in the context of interpreting a commercial contract, by giving it a 'businesslike interpretation on the assumption that the parties ... intended to produce a commercial result'.[28]

89 Even if the settlement agreement produces a commercial nonsense, the Court cannot change it if the agreement (or relevant clause of it) is not ambiguous. As Nettle J stated in Ecosse:[29]

Where there is ambiguity which permits of two alternative and semantically not improbable interpretations, construction in accordance with what it may be supposed would be the approach of honest and reasonable businesspersons may assist in choosing one such alternative over the other. But where, as here, the language and surrounding circumstances of a commercial contract present a choice between, on the one hand, a plain, ordinary and commercially not irrational meaning of a clause and, on the other, a meaning which is significantly removed from the natural and ordinary meaning of the terms of the clause, which ill-accords with other provisions of the agreement, and which in the end produces an outcome that is more commercially acceptable from one of the parties' point of view only, the precept runs out of application. Unless the Anglo-Australian objective theory of contract is now to be cast aside, the commercial approach to construction is not a licence to alter the meaning of a term that is 'clear and fairly susceptible of one meaning only' to achieve a result that the court may think to be reasonable. The court is not authorised under the guise of construction to make a new contract for the parties at odds with the contract to which they have agreed. Where, as here, all things considered, the words of a clause are fairly susceptible of only one meaning, they must be given that effect.

90 In light of the views I have expressed above, particularly in paragraph 83, adopting the defendant's proposed costs order (whether the Defendant's First Costs Order or the Defendant's Second Costs Order) would be to impermissibly re-write the parties' bargain in circumstances where the relevant provision is not ambiguous.

91 I accept the plaintiff's submission that the Court should assume that the defendant calibrated its offer to achieve its purpose. In this regard, I agree with the comments made in J & P Marlow (No 2) Pty Ltd v Hayes by Bell CJ that 'One must also be cautious in attributing a particular commercial intent or understanding of commercial common sense to parties to a commercial agreement.'[30] Further, 'attributed commercial purpose may not be used by a court to give to the words of a contract a meaning that they cannot reasonably bear.'[31]

92 Fundamentally, I simply do not accept that the plaintiff's interpretation of paragraph 1(c) of the Offer produces a commercial nonsense, is uncommercial or illogical, as the defendant submits. Even if I did, I would not be in a position to use that to favour the defendant's interpretation, for the reasons set out in the preceding two paragraphs.

93 Fifth, the defendant's contention that one of the known circumstances at the time the Offer was made was that the proceeding would continue for the group members' claims subject only to the compromise of the original claim is not consistent with the terms of the Letter. True it is that this was one possibility, however the Letter adverts to the possibility that the group proceeding may not continue.[32] At the time the Offer was made, it was not known whether, if the Offer was accepted, the plaintiff would continue as lead plaintiff or be replaced, or whether the group proceeding would continue. There is no dispute that the purpose of the Offer was limited to the compromise of the plaintiff's individual claim. However, that does not necessarily mean that the terms of the Offer could not or would not have included the costs of the common claims or group members to the relevant date.

94 Sixth, while I accept that the Letter forms part of the immediate context in which the settlement agreement was formed, I do not agree with the defendant's submission that the section of the Letter cited at paragraph 16 above supports the defendant's interpretation. I do not think that it makes it clear that the costs the subject of the Offer were the costs of the plaintiff's individual claim alone, and that it means that the reference to the 'plaintiff's costs' in the Offer are limited to its individual claim to the exclusion of the costs of group members.

95 Seventh, while the statutory scheme recognises the distinction between the costs of common and individual questions, that does not necessitate an interpretation of paragraph 1(c) of the Offer in the manner contended for by the defendant.

96 Eighth, I do not accept the defendant's submissions as summarised in paragraphs 66 and 67 above. The differences between this group proceeding and other group proceedings do not necessitate the adoption of the defendant's interpretation. While I have already said this, it bears repeating: the defendant was free to offer to settle the plaintiff's individual claim on any terms it saw fit, which it did, and it used the orthodox formulation in respect of costs which has an orthodox interpretation, as I have said in paragraphs 81 and 82 above.

97 Ninth, I do not consider that the contra proferentem principle applies here as I do not consider paragraph 1(c) to be ambiguous. If it was, then I do not accept the defendant's submission that the text, context and purpose of the settlement agreement resolve any ambiguity in favour of the defendant, by reference to the surrounding circumstances and adopting a construction that would produce a commercial result. But even if it were still ambiguous after that process, then I accept the plaintiff's submission in this regard[33] and consider that the contra proferentem principle would apply so as to construe that ambiguity against the defendant.

98 Tenth, I do not accept the defendant's submission that the Plaintiff's Costs Order would not resolve the interpretative dispute between the parties and is likely to result in further disputation upon taxation. At the time the costs order is taxed, the parties will have the benefit of this ruling.

99 Eleventh, I accept the plaintiff's submission that the defendant's changing position (there now being three proposed iterations of a costs order from the defendant)[34] and lack of clarity shows that the defendant is trying to re-write the settlement agreement on terms more favourable to it.

100 For the sake of completeness, I do not consider it necessary to address the submissions made by the plaintiff as summarised at paragraphs 45 and 46 above, as responded to by the defendant (see paragraphs 70 to 74 above) as to whether the Offer was competent to achieve the desired costs consequences if not accepted. However, I do accept the plaintiff's submission as set out at paragraph 47 above.

101 For these reasons, the plaintiff's construction of the settlement agreement in respect of costs is to be preferred and a costs order in the form contended for by the plaintiff will be made as part of the orders determining the Approval Application.

Content of the application and explanation of the alleged confidential information

102 By its summons dated 18 August 2023, the defendant seeks orders including that:

(a) the plaintiff file redacted versions of its summons and the Holt Affidavit, so as to redact the alleged confidential information;

(b) the unredacted versions of those documents be treated as confidential and not be inspected or copied without leave of the Court;

(c) the alleged confidential information be kept confidential and not disclosed other than to me and my associates, the parties and their legal representatives, group members and certain other persons; and

(d) pursuant to s 30 of the Open Courts Act 2013 (Vic) ('Open Courts Act'), all oral submissions referring to the alleged confidential information be heard at a closed hearing and the transcript be redacted accordingly.

103 According to the Defendant's Third Outline, the alleged confidential information is:

(a) the amount of the Settlement Sum (including where referred to in the plaintiff's summons and the Holt Affidavit at paragraph 26);

(b) the content of the expert report of Owain Stone dated 19 June 2023 filed by the defendant ('Stone Report'), exhibited to the Holt Affidavit at pages 130-247;

(c) paragraph 22 of the Holt Affidavit setting out an extract from the Stone Report;

(d) paragraph 24 of the Holt Affidavit containing the amount of a settlement offer made in May 2020; and

(e) pages 248 to 252 of the exhibit to the Holt Affidavit, being copies of the Offer and the Letter.

104 At the commencement of the hearing, I closed the court so that I could clarify what the alleged confidential information was and to canvass appropriate means of conducting the hearing. The plaintiff indicated that it no longer wished to rely on the Stone Report and paragraph 22 of the Holt Affidavit as part of its Approval Application, and that it would file a redacted version of the Holt Affidavit so as to deal with that. Accordingly, I do not deal with the Stone Report or paragraph 22 of the Holt Affidavit in these reasons. The defendant's counsel confirmed that this meant that the only alleged confidential information it sought to protect was the amount of the Settlement Sum. It was agreed that the hearing could and should be conducted in such a way as to not refer to the amount of the Settlement Sum, so that the hearing could take place in open court. That is what occurred. Thus, for the purposes of these reasons and for the orders to be made, the Confidentiality Application pertains now only to the amount of the Settlement Sum.

Confidentiality and without prejudice communications

105 The defendant submits that, at common law, communications directed at negotiating the settlement of a dispute are prima facie confidential and subject to without prejudice privilege. According to the defendant, the inherent confidentiality of such communications is confirmed by s 131(2)(d) of the Evidence Act 2008 (Vic) ('Evidence Act'), which has the effect that a non-confidential communication cannot be protected by without prejudice privilege. Furthermore, the protection given to without prejudice communications is a protection not just from admission into evidence but also disclosure.

106 The defendant submits that the without prejudice nature of the Offer - as evidenced by the Offer being made in accordance with order 26 of the Rules and reinforced by the wording of the Letter - import an obligation of confidentiality. In oral submissions, counsel for the defendant submitted that the Offer was 'self-evidently' confidential, and that a reasonable person would conclude that the plaintiff would not want the Settlement Sum disclosed to its business partners or employees, and that likewise the defendant would not want the Settlement Sum revealed to those who might take commercial advantage of it. In response, counsel for the plaintiff refuted this line of reasoning, submitting that a normal person reading an offer that contained no confidentiality clause would conclude that they were free to disclose its contents.

107 The defendant submits that, according to the House of Lords' decision in Rush & Tompkins Ltd v Greater London Council [1988] UKHL 7; [1989] 1 AC 1280 ('Rush & Tompkins'), the without prejudice privilege status of settlement negotiations does not end even once negotiations have borne fruit.

108 According to the defendant, confidentiality takes on particular significance in the present case because the Court is dealing with an application in which the settlement agreement will not dispose of all claims in the proceeding. The defendant submits that, because the common questions of law and fact are yet to be heard, the Court ought to ensure that the settlement of the plaintiff's individual claim does not influence the determination of the primary matters in issue as between the defendant and remaining group members.

109 In oral submissions, counsel for the defendant characterised the Offer as a largely, but not wholly, private contract between the plaintiff and the defendant; not wholly because it has an effect on the future conduct of the class action and is subject to the requirement for Court approval. Counsel accepted that the offer was not expressed to be confidential, and that an offer of compromise is only confidential up until the point of acceptance. However, counsel went on to submit that while it is true that there is a change with respect to the privilege, it does not follow that there is a change with respect to the confidentiality of the Offer as accepted and as it follows in the settlement. This submission is somewhat contradictory, given that counsel had only just earlier accepted that confidentiality was lost upon acceptance of the Offer.

Court's powers to make confidential orders and proceeding suppression orders

110 The defendant submits that the Court has the power to:

(a) make confidentiality orders as to the filing of documents under Rule 28A.06(1) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('the Rules'); and

(b) make orders that restrict access to, or disclosure of, information in an affidavit under its inherent jurisdiction.

111 The defendant submits that the Court is able to make a suppression order:

(a) prohibiting or restricting the publication or disclosure of information in connection with any proceeding, whether or not the information was derived from the proceeding, under its inherent jurisdiction; or

(b) prohibiting or restricting the disclosure by publication of a report of the whole or any part of a proceeding and/or any information derived from a proceeding under s 17 of the Open Courts Act.

112 According to the defendant, the making of either form of suppression order is governed by the provisions of the Open Courts Act, including the presumption of open justice. Furthermore, an order under s 17 can only be made on one or more of the grounds specified in s 18. The defendant submits that s 18(1)(a) is of relevance, as it allows the Court to make a proceeding suppression order if satisfied that doing so is necessary to prevent a real and substantial risk of prejudice to the proper administration of justice that cannot be prevented by other reasonably available means.

Established practices in respect of settlement approval applications

113 The defendant submits that the practice of settlement approval applications being heard by a different judge prevents the trial judge from being affected by any confidential material put forward by the parties in respect of that settlement when rendering his or her decision. The defendant referred to Dorajay Pty Ltd v Aristocrat Leisure Ltd[35] where Stone J suggested that not having a settlement approval application heard by another judge might create a perception of bias in the determination of the trial.

114 The defendant submits that there is a public interest in preserving the confidentiality of attempts at mediation and settlement negotiation, as well as a public interest in the settlement of proceedings prior to trial. The defendant then points to a number of cases in support of its submission that orders protecting not only the confidentiality of negotiations but also the terms of the resulting settlement (particularly the amount to be paid) can and have been made.[36]

115 During oral submissions, counsel for the defendant submitted that the public interest in applications under s 33W of the Act is in the claims of remaining class members being prosecuted in a way which does not unnecessarily interfere with their rights.

116 The defendant submits that there are several reasons why the Settlement Sum contained in the Offer ought to remain confidential, namely that:

(a) the Approval Application concerns the settlement of a single plaintiff's claim which involves little or no question of the broader public interest, in contrast to the private interests of the plaintiff and the defendant;

(b) the class is small (the plaintiff and a class of ten group members), meaning that the public interest is different to large class action lawsuits;

(c) there is a public interest in the appearance of justice in circumstances where the claims of remaining group members are still to be tried; and

(d) a confidentiality order would prevent prejudice in two related proceedings in which GM Holden is a defendant, responding to similar claims by former dealers, and in which there is a related substrata of facts.

117 The defendant submits that it is imperative that the terms of the Offer be kept confidential so that the hearing and determination of the common questions at trial are not prejudiced, nor seen to be prejudiced, by the trial judge being privy to the terms of the Offer. In oral submissions, counsel for the defendant submitted that if a confidentiality order was not made and the trial judge was made aware of the Settlement Sum, her Honour may be subconsciously influenced in a way that could have a 'corrosive effect on the public perception ... of justice'.

118 In oral submissions, counsel for the defendant submitted that disclosure of the terms upon which the defendant was willing to settle with the plaintiff 'creates an asymmetry, that is a commercial detriment, in negotiations or dealings' that will impact the defendant in two related proceedings. According to counsel, the risk to the defendant in disclosure is such that it could undermine the administration of justice by discouraging settlement between parties. Counsel submitted that this issue is 'right at the heart of it' because settlements are considered, as a matter of public policy, to be a preferable way for parties to resolve disputes. The disclosure of any settlement amount would have the consequence of creating a disincentive, in the form of a commercial disadvantage, for parties facing multiple lawsuits. During oral submissions, counsel for the defendant also brought to the Court's attention the case of Mid-Coast Council v Fitch Ratings where Lee J indicated that the existence of the other proceedings may themselves be enough to warrant confidentiality orders.[37]

119 The plaintiff submits that the Offer is no longer protected by without prejudice privilege because the privilege only applies to communications made in the course of negotiations, and not to any binding contract brought into existence as a result.[38] For the Offer to remain confidential, it would need to contain an express confidentiality clause, which it does not. During oral submissions, counsel for the plaintiff accepted that the Offer was confidential up until the point it was accepted by the defendant. The plaintiff submits, however, that the case law is clear in that once an offer of compromise is accepted, and in the absence of an express confidentiality clause, 'the cat's out of the bag'.

120 The plaintiff submits that the Letter is also no longer protected by without prejudice privilege because two of the exceptions to the exclusion of evidence of settlement negotiations are made out. First, this proceeding is either a proceeding to enforce an agreement between the parties to settle their dispute, or a proceeding in which the making of such an agreement is in issue.[39] Second, by relying on the Letter for the purposes of construction in the defendant's written submissions, the substance of the Letter has been disclosed with the express or implied consent of all the persons in dispute.[40]

121 The plaintiff submits that the Court should be mindful of the fact that this will be the first time serious judicial consideration is given to s 33W of the Act, as this is the first case in which a representative plaintiff in a group proceeding has decided to continue in its role after settling the whole of its individual claim against the defendant. The plaintiff submits that both the public interest and the principle of open justice are consistent with full disclosure of the circumstances in which the settlement occurred.

122 The plaintiff submits that s 33W expressly contemplates that an individual settlement with a lead plaintiff, and its terms, will be disclosed because:

(a) the process of substituting a group member as plaintiff under s 33W(3) could not otherwise occur; and

(b) notice to group members of the potential removal of the plaintiff is required under s 33W(4).

123 The plaintiff submits that it is implicit in s 33W that a pending settlement with a plaintiff must be disclosed to the group members. Without proper notice of the proposed settlement, including the settlement amount, group members would not be able to meaningfully exercise their right to participate in the s 33W process, including whether to engage separate legal representation and to appear in opposition. In this case, the proposed settlement, including the amount of the Settlement Sum, were disclosed to the group members.

124 The plaintiff submits that the decision to retire the Holden brand and the subsequent treatment of, and impact upon, Holden dealerships is a matter of public importance and that, therefore, there is a public interest in the present case as well as in how the defendant has treated, negotiated with, and settled with its dealerships. The plaintiff submits that this factor favours disclosure of the settlement agreement, including the Settlement Sum. In the plaintiff's submission, the fact that the defendant may be concerned about the political, public or media reaction to disclosure is not a justification for confidentiality orders.

125 The plaintiff submits that the defendant is attempting, through its Confidentiality Application, to rewrite the bargain it reached with the plaintiff in order to add a confidentiality clause that it neglected to, or deliberately did not, include in the Offer.

126 The plaintiff submits that the case law relied upon by the defendant is either:

(a) of no application because the case relates to the admissibility of communications from a mediation, of which there are none in the present case;[41]

(b) irrelevant because the case involved a settlement agreement with express confidentiality obligations;[42]

(c) of no application because the case involved information that was still subject to without prejudice privilege, which it is agreed between the parties does not apply to the present case;[43]

(d) irrelevant because the case involved provision to the court of a confidential opinion of counsel.[44]

127 The plaintiff submits that the defendant has not clearly identified any prejudice to the interests of justice that would warrant the making of confidentiality orders in this proceeding. During oral submissions, counsel for the plaintiff suggested that if the defendant had adduced any such evidence, it would have been tested, but that there was no such evidence to test.

128 Regarding the possible impact of disclosure on the two related proceedings against the defendant, the plaintiff submits that:

(a) Each potential settlement will be idiosyncratic and dependent upon factors such as gross profit margins and the number of vehicles that might have been sold. As such, knowledge of the Settlement Sum is unlikely to materially affect settlement negotiations between the defendant and other group members, each of which will feature different financial circumstances and a different potential quantum of loss.

(b) The defendant must have known, and been properly advised, that a settlement offer to the plaintiff that did not include a confidentiality clause was likely to impact the related proceedings. As such, the defendant assumed the risk by making an offer of compromise with no confidentiality clause.

(c) The comments of Mortimer J in Jenkings v Northern Territory of Australia (No 4),[45] ('Jenkings') support disclosure of the Settlement Sum:

in my opinion disclosure of the settlement sum is a positive benefit to those interests in relation to other litigation which currently exists, or may be brought, about the same subject matter as this proceeding. The interests of justice may well be better served if all parties are aware of what the Territory has been prepared to agree as a settlement sum, with a denial of liability. Circumstances may or may not be completely comparable, but there will be similarities by reason of the subject matter.

During oral submissions, counsel for the plaintiff further submitted that 'sunlight acts as a disinfectant' in that disclosure clears the way for all parties to know and understand the position and to reach a settlement if one were open.

129 In response to the defendant's submission that the hearing and determination of the common questions at trial might be prejudiced by disclosure of the Settlement Sum, the plaintiff submits that:

(a) The trial judge is already aware that the defendant had made previous offers of compensation, and the method under which those earlier offers were calculated is referred to in pleadings, witness statements and the court book.

(b) The plaintiff's individual claim and Settlement Sum is idiosyncratic.

(c) The trial judge will have no reason to consider, or give judgment on, the quantum of the plaintiff's claim.

(d) The trial judge would understand that settlements occur for reasons including strategic and non-legal considerations, which would limit her Honour's ability to draw an adverse influence from the terms of the settlement agreement.

130 On the subject of the possible risk posed by the trial judge becoming aware of the Settlement Sum, counsel for the plaintiff submitted that 'we're plainly not in a zone where there's actual prejudice' and that the question was one of 'perceived prejudice', given that the Settlement Sum is irrelevant to the determination of any issue at trial and strictly inadmissible. As such, the trial judge was not likely to be influenced, in any material sense, by knowledge of the Settlement Sum. Counsel for the plaintiff further submitted that, because there exists no logical connection between the judge's task at trial and the settlement of the plaintiff's case, disclosure of the Settlement Sum could have no possible bearing on perceptions of justice.

131 In response to the defendant's assertion that s 18(1)(a) of the Open Courts Act applies, counsel for the plaintiff submitted that s 18(1)(a) contains a threshold requirement that the Court would need to be satisfied of in order to make an order under s 17. For a proceeding suppression order to be made, the Court must find it necessary to prevent a real and substantial risk of prejudice to the proper administration of justice that cannot be prevented by other reasonably available means. Counsel for the plaintiff submitted that the defendant has 'already lost' as the Offer is no longer confidential, and that even if confidentiality had somehow been maintained it has subsequently been lost by the bringing of the Approval Application in open court. The plaintiff submits that it is not clear how the making of a proceeding suppression order could be necessary to prevent a real and substantial risk of prejudice.

132 In response to the submission by counsel for the plaintiff that 'sunlight is the best disinfectant' and that disclosure might better serve the interest of the justice, counsel for the defendant submitted that Mortimer J's statement in Jenkings was not one of general principle and that, if it were, it would be inconsistent with what Lee J said in Fitch by reference to the other decisions.

133 Counsel for the defendant submitted that while disclosure of each party's top or bottom line might encourage settlements, such a policy has not been adopted in Australia, nor anywhere else in the Western world. Parties to a negotiation are entitled to keep their bargaining position to themselves and the public interest is best served by not allowing an asymmetrical impact on the defendant's bargaining position in relation to other litigation. Counsel submitted that the 'disinfectant' referred to by counsel for the plaintiff was 'being applied only on one side'.

Confidentiality and without prejudice communications

134 Starting first with the confidential nature of without prejudice communications, it is correct to say that communications directed at negotiating the settlement of a dispute are prima facie confidential and subject to without prejudice privilege.[46] Indeed, genuine attempts at settling a dispute before the commencement of pending legal proceedings may be privileged even if not expressly conducted on a without prejudice basis.[47]

135 The parties agree that their communications during settlement negotiations were without prejudice, and therefore confidential. However, the parties disagree as to whether that confidentiality extends to the Offer now that it has been accepted by the plaintiff. On the one hand, the plaintiff submits that the authorities are clear and that the Offer ceased being confidential once it was accepted. On the other hand, the defendant accepts that the Offer is no longer without prejudice, but submits that it ought still be considered confidential. Both parties agree that the Offer contained no express confidentiality clause. However, the defendant submits that the Court ought to consider the context in which the Offer was made and that a reasonable person would conclude that the defendant would want the Settlement Sum to remain confidential. However, it is difficult to accept these submissions. While it might be true that the defendant has various reasons for wanting the Settlement Sum to remain confidential, the defendant drafted the terms of the Offer and ought to have included an express confidentiality clause if it wished for the terms of the Offer to remain confidential.

136 In its written submissions, the defendant points to Rush & Tompkins as authority for the proposition that without prejudice privilege continues to apply to settlement negotiations even once they have borne fruit. While this may be the case, it has little bearing on the Confidentiality Application. Rush & Tompkins dealt with the discoverability of documents evidencing the settlement negotiations themselves to the second defendant (who was not party to the settlement), not the settlement agreement resulting from those negotiations. The House of Lords in that case was concerned that certain admissions or concessions made during negotiations might be revealed, to the commercial detriment of the party that made them.[48] In this case, the question is much narrower. All that the defendant now seeks to protect is the amount of the Settlement Sum. That is not an admission or a concession. The plaintiff submits that the without privilege nature of the settlement negotiations does not extend to the Offer once it was accepted. I accept this submission.

137 Without prejudice privilege excludes from evidence admissions made by parties during the course of negotiations to settle a dispute which is either presently the subject of litigation or which is likely to become the subject of litigation if the dispute is not resolved.[49] All that s 131(1) of the Evidence Act does is prevent without prejudice communications being adduced in evidence, unless one of the exceptions in s 131(2) applies. However, a binding contract brought into existence as a result of without prejudice negotiations is not protected by the privilege against non-disclosure.[50] Therefore, the terms of the Offer, including the Settlement Sum, can no longer be considered confidential.

138 The defendant submits that there is a public interest in preserving the confidentiality of mediation and settlement negotiations. This submission seems relatively uncontentious. By preventing statements or offers made in the course of settlement negotiations from being adduced as evidence in court as admissions of liability, parties are not discouraged from attempting to settle their disputes by the fear of those communications being used against them in litigation.[51] But that does not mean that there is a public interest in treating the agreement reached between the parties as confidential.

Established practices in respect of settlement approval applications

139 The defendant submits that confidentiality orders over not only the content of settlement negotiations but also the terms of the resulting settlement can and have been made in the past. Paragraph 3.10 of the Defendant's Third Outline cites two authorities in this regard, both of which were in the context of applications for approval of settlements. However, in what I would describe as a comprehensive refutation of the defendants' written submission, the plaintiff submits that each of the cases cited by the defendants as an example of confidentiality orders being made over the terms of a settlement agreement featured an express confidentiality clause and is therefore of no application in the present case. I accept the plaintiff's submissions in this regard. The inclusion of an express confidentiality clause is something that clearly distinguishes the cases relied upon by the defendant from the one before me. As such, I do not think that there is anything in those cases which lead to a conclusion that the terms of settlement should be kept confidential absent an agreement as to confidentiality.

140 When I asked whether the defendant had been able to identify a case where the court imposed a confidentiality order in settlement approval applications where there was no agreement between the parties as to confidentiality, counsel for the defendant pointed me to the case of Fitch. In that case, Lee J commented that the existence of other proceedings may be enough to justify making a confidentiality order, even in the absence of a confidentiality agreement. However, as I noted during argument, Lee J was merely commenting on another case where no reasons had been given and, as counsel conceded, we cannot know whether a confidentiality agreement existed in that case. As such, I am not persuaded that his Honour's comments have any bearing on the present case.

141 The plaintiff submits that the wording of s 33W makes it implicit that a pending settlement with a representative plaintiff must be disclosed to the group members. However, the plaintiff's reading of s 33W is distinct from whether broader disclosure, including to the general public, is warranted and is therefore of limited (if any) utility here.

142 I was not persuaded by either party's invocation of the public interest in respect of disclosure (or non-disclosure) of the Settlement Sum.

143 The defendant describes several ways in which disclosure of the Settlement Sum might harm its interests. In particular, the defendant submits that disclosure could have the effect of producing:

(a) a perceived prejudice in the trial of the group proceedings; and

(b) a commercial detriment for the defendant during its negotiations or dealings in two related proceedings.

144 On the subject of prejudice, the parties were in agreement that no risk of actual prejudice on the part of the trial judge arises in the present case. I accept this as correct. It is the role of any judge to be impartial and fair in the pursuit of justice. This involves appreciating which factors are to be considered, and which factors are to be set aside. As such, I believe that no risk of actual prejudice would arise from disclosure of the terms of the settlement.

145 However, the defendant submits that a risk of perceived prejudice can arise where the trial judge oversees a settlement approval application within the same proceeding. As I understand it, the common (but not universal) practice of another judge hearing the settlement approval application is to ensure that if the settlement is not approved then there is no impediment to the trial judge hearing the resulting trial, which necessarily involves consideration of the very same issues. That is not this case.

146 The defendant submits that, likewise, a perception of prejudice could arise if the trial judge in this proceeding were to be made aware of the Settlement Sum. However, I have trouble accepting this submission. As the plaintiff submits, the Settlement Sum is irrelevant to the determination of any issue at trial and is strictly inadmissible. Furthermore, the trial judge will have no reason to consider, or give judgment on, the quantum of the plaintiff's claim. I prefer the plaintiff's submissions in this regard, and I therefore reject the defendant's submission that disclosure of the terms of settlement might prejudice the determination of the common questions at trial.

147 In response to the defendant's submission that disclosure could disadvantage the defendant in two related proceedings, the plaintiff submits that any potential settlement will be idiosyncratic and dependent upon factors unique to each plaintiff business. While I accept that this might be the case, I do not accept the plaintiff's submission that disclosure of the Settlement Sum is therefore unlikely to materially affect any potential settlement negotiations. While it is true that each potential settlement is likely to be idiosyncratic, knowledge of the Settlement Sum may still impact negotiations to the detriment of the defendant.

148 However, while disclosure of the Settlement Sum might place the defendant at a disadvantage in settling the two related proceedings, I do not consider this to be a sufficient justification for the making of confidentiality orders. If the defendant wanted to protect its bargaining position, it could have taken steps to ensure that the settlement agreement resulting from acceptance of the Offer was confidential, by including an obligation of confidence in the terms of the Offer.

149 The plaintiff relies on Jenkings as authority for its submission that disclosure of the Settlement Sum would best serve the interests of justice by making all parties in the related proceedings aware of the terms upon which the defendant is prepared to settle. However, Jenkings involved claims of compensation brought against the Northern Territory by persons held in youth detention facilities for compensation arising from instances of assault, battery and false imprisonment. As such, it lacks the commercial character of the present case and thus the comments of Mortimer J (as her Honour then was) as to what might satisfy the interests of justice are of limited (if any) application here.

Other aspects of the Confidentiality Application, including the Open Courts Act

150 As can be seen from the above discussion, most of the defendant's submissions relied on the premise that the terms of the settlement agreement, including the Settlement Sum, are confidential, and were directed to arguments as to why and how the Court should protect that confidentiality.

151 However, that premise is mistaken: for the reasons set out above, absent an express term as to confidentiality, the settlement agreement is not confidential. Without prejudice privilege falls away and there is no prohibition on disclosure of the settlement agreement (including the Settlement Sum). True it is that obligations of confidence may be implied in certain situations, however that was not something that was fully developed in argument. The defendant submitted that the Offer was self-evidently confidential and any reasonable person would know the Settlement Sum was to be confidential, however absent more I do not accept that to be the case once the Offer was accepted.

152 Thus it seems to me that what the defendant is seeking here are court orders not to protect that which is confidential, but orders which make the Settlement Sum confidential and then serve to protect that confidentiality. That the Court has power to make orders, whether under r 28A.06 of the Rules or the Open Courts Act, to preserve confidentiality is therefore neither here nor there.

153 In the circumstances of this case, where I have found that the Settlement Sum is not confidential, the real question comes down to whether the Court should make orders, either under the Rules, the Open Courts Act or its inherent jurisdiction, to make the Settlement Sum confidential and then to protect that confidentiality.

154 In my view, that course could only be justified if it were in the interests of the administration of justice to do so. Here, I do not think that those interests are served by granting the Confidentiality Application. There is no risk (actual or apprehended) insofar as the trial judge's ability to fairly deal with the trial of the common questions is concerned. While there may be some risks for the defendant insofar as the other proceedings it is involved in with other dealers, any such risk was a matter for it (not the Court) to safeguard. As has already been said, if the defendant was concerned as to its bargaining position in that regard it could have included obligations of confidence in the terms of the Offer.

155 For these reasons, the Costs Dispute is resolved by the making of a costs order in the form proposed by the plaintiff. The Confidentiality Application is dismissed.

156 The parties are to confer and provide my Chambers, within one week of the publication of these reasons, with a proposed form of orders to give effect to the Approval Application and these reasons. If they are unable to agree on the form of orders, then each party is to provide their preferred form of orders by the same date, along with a short written outline of no more than three pages. Subject to any further direction, I will settle the form of orders on the papers after that date.

[1] The plaintiff filed an outline dated 11 August 2023 ('Plaintiff's First Outline'), to which the defendant responded on 18 August 2023 ('Defendant's First Outline'). On 11 September 2023, the plaintiff filed a reply submission on costs ('Plaintiff's Second Outline'), to which the defendant responded on 18 September 2023 ('Defendant's Second Outline'). The defendant filed an outline dated 11 September 2023 regarding confidentiality ('Defendant's Third Outline'), to which the plaintiff responded on 18 September 2023 ('Plaintiff's Third Outline').

[2] Referring to the principle that a successful litigant cannot recover more by way of party/party costs than it is liable to pay its lawyers, relying on Oakley Thompson and Co Pty Ltd v Maisano (No 5) [2017] VSC 52, [23]; Wentworth v Rogers [2006] NSWCA 145, [102].

[3] [2014] VSC 496, [22].

[4] Thomas v Powercor (No 9) [2012] VSC 207, [7]-[8]; Terravision Pty Ltd v Black Box Control Pty Ltd [No 5] [2018] WASC 340, [29]-[31].

[5] It is said that those words address precisely the issue that arose in Thomas v Powercor (No 9) [2012] VSC 207, [1]-[17].

[6] JP Morgan Australia Ltd v Consolidated Minerals Pty Ltd [2011] NSWCA 3, [55] quoting J Beatson, A Burrows and J Cartwright, Anson's Law of Contract (29th ed, 2010, Oxford University Press), 170.

[7] Professional Health Partners Pty Ltd v Spiers [2010] TASFC 1, [21] quoting Heather v Vita Pacific Ltd [1999] TASSC 17, [21].

[8] Heather v Vita Pacific Ltd [1999] TASSC 17, [21].

[9] Beecham Motors Pty Ltd v General Motors Holden NSC Australia Pty Ltd [2021] VSC 855, [25]; Transcript of 14 July 2023, T14.8-15; T15.16-29; T30.20-T31.11.

[10] The efficacy of such offers is unsettled: Grave, Adams and Betts, Class Actions in Australia (Thomson Reuters, 3rd ed, 2022), 1104-1106.

[11] Kemp v Ryan [2012] ACTCA 12, [12]-[13]; Portbury Development Co Pty Ltd v Ottedin Investments Pty Ltd (Costs) [2014] VSC 107, [14]; White v Director of Housing [2003] VSC 124, [17]; Binaray Pty Ltd v RAMS Financial Group Pty Limited [2019] QSC 280, [30].

[12] Shaw v Yarranova Pty Ltd [2011] VSCA 55, [22]; Noye v Robbins [2010] WASCA 83, [295]-[331].

[13] Perdaman Chemicals & Fertilisers Pty Ltd v Griffin Coal Mining Co Pty Ltd (No 12), [17] ('Perdaman Chemicals (No 12)').

[14] [2001] TASSC 137; 10 Tas R 334, [63] ('Vita Pacific') citing Way v Swan Television and Radio Broadcasters Ltd (1991) 5 WAR 323 at 324-325.

[15] Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd; [2017] HCA 12; (2017) 261 CLR 544, [16] ('Ecosse').

[16] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104, [46], [49] ('Mount Bruce').

[17] Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 352 ('Codelfa'); Mount Bruce, [118]-[120]; Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 240 CLR 45, [39] ('Royal Botanic').

[18] Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640, [35] ('EGC v Woodside').

[19] EGC v Woodside, [35], citing Zhu v Treasurer (NSW) [2004] HCA 56; (2004) 218 CLR 530, [82].

[20] Perdaman Chemicals (No 12), [18].

[21] Codelfa, 352_; Mount Bruce_, [118]-[120]; Royal Botanic Gardens, [39].

[22] Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164, [25].

[23] North v Marina [2003] NSWSC 64, [75]-[78].

[24] North v Marina [2003] NSWSC 64, [78] citing G L Nederland (Asia) Pty Ltd v Expertise Events Pty Ltd [1999] NSWCA 62, [27]; Zhang v ROC Services (NSW) Pty Ltd [2016] NSWCA 370; (2016) 93 NSWLR 561, [140].

[25] Johnson Tiles Pty Limited v Esso Australia Pty Limited (No 2) [2003] VSC 212, [37]; Legg and McInnes "Australian Annotated Class Actions Legislation" (3rd ed) at [18.10]-[18.11].

[26] Beecham Motors Pty Limited v General Motors Holden Australia NSC Pty Limited [2021] VSC 855, [57].

[27] That costs would be taxed if not agreed is well understood, and on a standard basis due to r 63.31, unless the Court specifically made orders to the contrary.

[30] [2023] NSWCA 117, [76] ('Marlow').

[32] See the portion of the letter cited in paragraph 16 above.

[33] See paragraphs 39 and 40 above.

[34] The defendant has moved from costs incurred by the plaintiff, to costs paid by the plaintiff, incorporating concepts such as 1/11th of the costs or excluding the costs of the common questions.

[35] [2009] FCA 19, [4].

[36] For example, Hodges v Waters (No 7) [2015] FCA 264; Tredrea v KPMG Advisory Services (Australia) Pty Limited (No 2) [2019] NSWSC 640; Lifeplan Australia Friendly Society Limited v S&P Global Inc [2018] FCA 379.

[37] [2019] FCA 1261, [18] ('Fitch').

[38] Gonzalez v The Queen [2022] VSCA 110, [32]; Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA, [92].

[39] Evidence Act, s 131(2)(f).

[40] Evidence Act, s 131(2)(b).

[41] Sharjade Pty Ltd v RAAF (Landings) Ex-Servicemen Charitable Fund Pty Ltd [2008] NSWSC 1347.

[42] Cannon v Griffiths & Ors (No 2) [2015] NSWSC 1329; Oldham v Capgemini Australia Pty Ltd (No 2) [2016] FCA 1101; Hodges v Waters (No 7) [2015] FCA 264; Tredrea v KPMG Financial Advisory Services (Australia) Pty Ltd (No 2) [2019] NSWSC 640; Lifeplan Australia Friendly Society Limited v S&P Global Inc [2018] FCA 379; Cantor v Audi Australia Pty Limited (No 7) [2022] FCA 317.

[43] Clime Capital Limited v UGL Pty Limited (No 2) [2020] FCA 257.

[44] Matthews v AusNet Electricity Services Pty Ltd and Dorajay Pty Ltd v Aristocrat Leisure Ltd [2014] VSC 663.

[45] [2021] FCA 839, [88].

[46] Pigozzo v Mineral Resources Ltd [2022] FCA 1166, [160] per Feutrill J; White v Overland [2001] FCA 1835, [91] per Allsop J.

[47] Rodgers v Rodgers (1964) 114 CLR 608 at 614 per McTiernan, Taylor and Owen JJ.

[49] CMA Assets Pty Ltd v John Holland Pty Ltd (No 2) [2012] WASC 126, [15] per Allanson J.

[50] Gonzalez v The Queen [2022] VSCA 110; Ansett Resources & Industries Pty Ltd v Wavenet Int'l Ltd [2009] WASC 181; Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA.

[51] Re Bruse and Cmr of Taxation [2010] AATA 404.