This issue was considered by Moore J in King v GIO Holdings Australia Ltd. In that case the applicant commenced a representative proceeding in the Federal Court on behalf of himself and certain GIO shareholders, seeking damages and declarations against GIO, an adviser to GIO, and nine directors of GIO. In essence, the plaintiff claimed that the respondents had engaged in misleading and deceptive conduct by recommending that shareholders reject an offer by AMP to buy GIO shares during a takeover bid. The group members were defined as all persons who owned GIO shares in the relevant period and who did not accept the takeover offer by reason of the conduct "of all or any of the respondents" and who suffered loss as a consequence. The statement of claim included the following statement in particulars, namely that "the Applicant and the group members relied upon one or more of those representations by one or more of the Respondents". As to this pleading Moore J said:
"Several respondents pointed to this particular as indicating that the claims are not advanced on the basis that there was reliance on the representations of all respondents. The particulars contemplate that there may have been, on the part of the applicant and group members, reliance on representations of only one or some of the respondents giving rise to a claim for damages against one or some only. While this is so, it does not involve an abandonment of the claim that representations were made to the applicant and each group member and the contention on behalf of them that the making of the representations involved misleading or deceptive conduct and a breach of duty. The application remains one in which claims are made by the applicant and all the group members against each respondent.
Use of the format in the pleadings referred to in par 37 above is not, in my opinion, merely designed to establish common claims as a matter of form. The pleadings are intended to identify the claims of the applicant and members of the representative group. The respondents submitted, in various ways, that it is unlikely or improbable that the way the claims are pleaded reflect what is likely to have occurred even if the claims can be made out. That is, it is unlikely that all the 33,000 or so shareholders who have, according to the solicitors retained by the applicant, signified interest in the proceedings or all the 68,000 or so shareholders who declined to accept the offer would have appreciated that all the pleaded representations were made (which are the immediate source of alleged liability), and all the more so given that they are implied representations to be inferred, in part, from other implied representations, would have all acted on all of them in the way alleged or would all have suffered loss for the reasons alleged.
However that approach, in my view, invites speculation that is not, in the circumstances, justified. The present proceeding is, in this respect, far removed, in my opinion, from the situation considered in Philip Morris (Australia) Ltd v Nixon (supra) where the Full Court, and in particular Spender and Hill JJ, were satisfied that the case pleaded, which plainly was cast in the widest of terms as to time, the impugned conduct and the consequences of that conduct, sought to raise claims that could not satisfy the requirements of s 33C(1)(c). The position of the respondents in this proceeding is, at best, akin to the situation described by the Full Court in Femcare Ltd v Bright [2000] FCA 512 at para 93 of a respondent being able to establish only uncertainty as to whether the claims of all group members will be made out against each respondent. In this respect, the description of the representative group referred to in par 8 above serves to limit the group on whose behalf the proceeding is brought to those who suffered loss as a result of the conduct of all or any of the respondents. This description allows for the possibility, perhaps to the ultimate benefit of some respondents ... that the claims might not succeed in their entirety against all respondents. However by adopting that description, the character of the claims themselves as formulated is not, in my opinion, altered. The description of the class in this way does not govern and qualify the terms on which the orders are sought in the application nor the terms on which the claims are pleaded and relief sought." (emphasis added)
I respectfully agree with the above observations of his Honour, which have not been criticised in any of the later cases. Further, the nature of the pleading issue raised in King is for all intents and purposes the same as the issue raised here. That is, claims for damages and declarations are made by each group member ostensibly against each defendant, although the defendants raise the possibility that the claims will not be made out against each defendant. It seems to me that central to his Honour's reasoning is a distinction between the claims which the group members have, as evidenced on the face of the pleadings, and the relief to which individual group members may ultimately be found to be entitled. In my view the distinction is valid and flows from the terms of s 33C read in context.
As to this, I note that the authorities make clear that the word "claim" in s 33C(1)(a) should not be given a narrow, technical meaning; see Finance Sector Union of Australia v Commonwealth Bank of Australia, Bray and King. Certainly the term is broader than a cause of action or the relief to which a litigant is ultimately held to be entitled. In this case, as in King, the mere possibility (however strongly arguable) that the claim for damages of some group members may not ultimately be made out against each defendant does not alter the fact, discerned from the face of the pleading, that the plaintiff and each group member have claims for damages against each defendant. As Moore J pointed out, the defendants' argument is based on speculation as to what may occur rather than the actual claims made on the pleadings. Further, the plaintiff's proposed group definition confines the group members to those persons who actually suffered loss in reliance on the relevant conduct of one or more defendants.
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As to whether s 33C(1)(b) and (c) are satisfied, in my view the claims of the plaintiff and all the group members are in respect of, or arise out of, the same, similar or related circumstances and give rise to a substantial common question of law or fact. I do not overlook the defendants' submission that the alleged misrepresentations were made by nine different defendants in a variety of circumstances over a period of some four years. Nor do I overlook the likelihood that distinct issues of causation will arise in the claims of individual group members, which will require resolution on a case by case basis, if the case proceeds that far. But there is nothing remarkable about that. Part 4A specifically provides that a group proceeding may be commenced whether or not the relief sought includes claims for damages requiring individual assessment, or is the same for each person represented, and whether or not the proceeding is concerned with separate transactions between the defendant and individual group members or involves separate acts or omissions of the defendant done or omitted to be done in relation to individual group members.
In Williams v FAI Home Security Pty Ltd (No 2) Goldberg J said that:
"Although there may be differences between the actual terms of the statements made to the various group members that is not a bar to the proceeding continuing as a representative proceeding. So long as there is a substantial common issue of law or fact, that is to say an issue which is real or of substance, then s 33C(1)(c) of the Act is satisfied: Wong v Silkfield Pty Ltd. It is no bar to such a representative proceeding that the claim is brought in respect of representations founded in different conversations made to different members of the class. The threshold criterion is satisfied if the representations, albeit not in the same terms, are directed to substantially the same matters."
I respectfully agree with his Honour (footnotes omitted).