Plaintiff v First Defendant

PRACTICE AND PROCEDURE - Concurrent hearing with Federal Court of Australia - Application of Protocol for communication and cooperation between Supreme Court of Victoria and Federal Court of Australia in class action proceedings - Evidence and submissions heard together - Conferral following hearing - Westpac Banking Corporation v Lenthall [2019] FCAFC 34; (2019) 265 FCR 21; BMW Australia Ltd v Brewster [2019] NSWCA 35; (2019) 366 ALR 171.

1 This ruling concerns a multiplicity dispute. The dispute involves three separate group proceedings; one in the Supreme Court of Victoria ('SCV') and two in the Federal Court of Australia ('FCA'). The proceedings are 'competing group proceedings' as that phrase is described in this Court's Practice Note on the Conduct of Group Proceedings (Class Actions) (Second Revision).

2 The Protocol for Communication and Cooperation between the SCV and the FCA in Class Action Proceedings dated 5 June 2019 ('the Protocol') is engaged. The applications the subject of this ruling were heard in a concurrent hearing of the FCA and the SCV.

3 Proceeding S ECI 2024 01169 ('Vingrys proceeding') was commenced by Nathan Vingrys on 14 March 2024 in the SCV.

4 Prior to that, proceeding VID1088/2023 ('Bain proceeding') was commenced by Nathaniel James Bain on 20 December 2023 in the FCA.

5 Proceeding VID88/2024 ('Wyer proceeding') was commenced by Christopher Wyer on 6 February 2024 in the FCA.

6 Together, the individual Bain proceeding and Wyer proceeding are referred to as the 'Bain/Wyer proceedings'. The applicants in the FCA proceedings are referred to as the 'Bain/Wyer applicants'.

7 Each of the proceedings is brought against the same parties. International Capital Markets ('ICM') and Andrew Leon Budzinski are the defendants in the SCV proceeding and the respondents in the Bain and Wyer proceedings.

8 The Class Action Summary Statement in the Vingrys proceeding filed on 14 March 2024 provides the following summary of the Vingrys proceeding:

This class action concerns ICM and its founder Mr Budzinski on behalf of investors who suffered loss or damage as a result of trading contracts for difference (CFDs). A CFD is a highly leveraged financial product that allows the holder to make a trade based on their prediction of the likely movement in the value or price of an underlying asset.

9 The Vingrys proceeding alleges that ICM and Mr Budzinski engaged in misleading and deceptive conduct and in unconscionable conduct in contravention of various provisions of the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth).

10 The Bain and Wyer proceedings concern the same general subject matter.

11 There is a dispute between the proponents of each proceeding whether one or more of the proceedings should be stayed to enable the efficient prosecution of the overlapping claims in the interests of group members represented in the proceedings.

12 By separate summons dated 31 May 2024 ('the applications') the FCA applicants seek leave to intervene in the Vingrys proceeding and orders that the Vingrys proceeding be permanently stayed or, alternatively, that it be transferred to the FCA pursuant to s 5(1)(b) of the Jurisdiction of the Courts (Cross‑vesting) Act 1987 (Vic).

13 The applications by each of the Bain and Wyer applicants for leave to intervene were not opposed. Mr Vingrys opposed the substantive aspect of the applications.

14 The hearing of the applications took place at the same time as the hearing before Justice O'Bryan of the FCA of applications brought by Mr Vingrys in each of the Bain and Wyer proceedings to intervene in those proceedings and for the stay or transfer to the SCV of those proceedings. The application by Mr Vingrys for leave to intervene in the FCA proceedings was not opposed. Mr Bain and Mr Wyer opposed the substantive relief sought by Mr Vingrys.

15 In addition to the application by Mr Vingrys the FCA heard an application by the Bain and Wyer applicants for the consolidation of the Bain/Wyer proceedings. The application to consolidate was not opposed.

16 While the five applications across the two courts comprise the 'multiplicity dispute', there being no objection to the application to consolidate, the dispute is a carriage contest between the Vingrys proceeding in the SCV and the Bain/Wyer proceeding in the FCA.

17 ICM and Mr Budzinski did not take a position concerning most of the contested issues. Their concern is to ensure adequate arrangements are proposed concerning security for their costs.

18 In accordance with the Protocol, parallel case management Orders were made on 4 June 2024 in each Court to facilitate the orderly and efficient hearing and disposition of the dispute before each Court.

19 Pursuant to those Orders each moving party was required to file a statement of position by 7 June 2024 and any revised statement of position by 12 June 2024, evidence by 17 June 2024 and any reply evidence by 24 June 2024.

20 As stated in the 4 June 2024 Orders the purpose of the statement of position is for each moving party to set out in summary form that party's position and the substance of that party's expected evidence in respect of the ten separate matters in the List of Issues in the appendix to the Orders. The Orders expressly state that the parties are expected to provide their first statement of position in good faith and that they should not take a holding position for the purposes of later negotiation. The Orders provide that the revised statement of position is the only opportunity for a moving party to modify their statement of position. No other revision to a party's position will be considered by the Court.[1]

21 The moving parties filed statements of position and revised statements of position, and provided submissions and evidence to both Courts directed to each of the matters in the List of Issues in the appendix to the 4 June 2024 Orders. Oral argument was directed to those issues.

22 The applications in each Court were determined on the same evidentiary basis.

23 Prior to the hearing, I conferred with Justice O'Bryan about the procedural aspects of the concurrent hearing and the subsequent preparation of reasons.

24 At the beginning of the hearing Justice O'Bryan outlined the manner in which his Honour and I proposed to proceed.

25 First, that although the hearing was being conducted concurrently, each Court would necessarily determine the applications that are made in their respective Courts.

26 Second, that both Courts intended and expected to deliver their respective judgments on the same day, also in a concurrent sitting.

27 Third, that given the commonality of issues raised for determination, Justice O'Bryan and I considered that it would be helpful to confer following the hearing and before delivering judgment. That is so albeit that each of us must come to our own conclusion with respect to the applications raised before us. We considered such conferral to be consistent with the observations made by the Full Federal Court in Westpac Banking Corporation v Lenthall[2] and by the NSW Court of Appeal in Brewster v BMW Australia Ltd,[3] which decisions followed a concurrent sitting of the Full Federal Court and the NSW Court of Appeal.

28 All parties indicated they had no objection to Justice O'Bryan and I proceeding on the basis outlined including conferring following the hearing.

29 In opposition to the applications Mr Vingrys relied on affidavits filed in the SCV of Amanda Banton dated 17 June 2024 and 24 June 2024 and of James Searby dated 25 June 2024. In support of the consolidated Bain/Wyer applications, the Bain/Wyer applicants relied on affidavits filed in the FCA of Matthew Chuk dated 17 June 2024 and 24 June 2024, Katherine Sambrook dated 17 June 2024 and 24 June 2024 and John Walker dated 17 June 2024. ICM filed an affidavit of Elan Sasson dated 3 July 2024 in identical terms in both Courts.

30 In addition to the affidavits relied on by Mr Vingrys and ICM filed in the SCV, I received the affidavits relied on by the Bain and Wyer applicants and filed in the FCA into evidence on the hearing of the applications in the Vingrys proceeding.

31 The 4 June 2024 Orders established a two tier confidentiality regime. Some evidence and submissions were confidential and not to be disclosed to the competing proponents or the defendants/respondents. Other evidence and submissions were confidential and not to be disclosed to the defendants/respondents. The Orders provided that until claims for confidentiality are determined there shall be no publication or disclosure of redacted material.

32 Parts of the affidavits and exhibits relied on by the proponents for carriage were redacted due to claims for confidentiality in accordance with the two tier regime. Following the hearing the parties provided an agreed schedule of the parts of evidence and submissions to be the subject of ongoing confidentiality orders.

33 At the hearing Mr Vingrys sought leave to rely on an affidavit of Amanda Banton dated 3 July 2024 together with a 102 page exhibit. The affidavit and exhibit was provided to my chambers after 12:00pm the day before the hearing. The application for leave was opposed by the Bain/Wyer applicants. For reasons given during the hearing I refused leave. Justice O'Bryan also refused leave for separate reasons delivered by his Honour.

34 The List of Issues in the appendix to the 4 June 2024 Orders provides a convenient structure for the consideration of the issues.

35 Before turning to those issues it is helpful to refer to the principles which are not controversial.

36 Both Courts have power to manage and determine multiplicity disputes. Section 33ZF of the Supreme Court Act 1986 (Vic) ('the SCV Act') provides that in a proceeding conducted under Part 4A, the Court may of its own motion or on an application by a party, make any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding. When exercising the power in s 33ZF the Court has a protective role in respect of group members.[4]

37 When resolving a carriage dispute the task is to determine which proposed arrangement would be in the best interests of group members.[5] A multifactorial analysis is to be applied. This analysis requires a range of factors to be weighed and considered. The task is an inherently evaluative one.[6]

38 As the Full Court of the Federal Court observed in Perera v GetSwift there is no one right answer to the questions that arise in the context of a multiplicity of overlapping representative proceedings and no 'silver bullet' solution.[7] Previous cases have identified factors that may be relevant to determining such disputes but those factors cannot be listed exhaustively and will vary from case to case. Those factors do not detract from the essential task of identifying what is in the best interests of group members.[8]

39 Mr Vingrys proposes to apply for a Group Costs Order ('GCO') pursuant to s 33ZDA of the SCV Act that the legal costs payable to his solicitors, Banton Group, be calculated as a percentage of any award or settlement recovered. Consistent with the framework in s 33ZDA, Banton Group intend to conduct the Vingrys proceeding in return for a percentage return to the law practice. The Vingrys proposal for carriage does not involve a litigation funder. In the alternative, if the Court does not make a GCO, Banton Group proposes to seek an order for an all‑inclusive Common Fund Order ('CFO') at the same rate and to the same effect.

40 Banton Group propose to seek a GCO at the following rates on a sliding basis:

(a) 29% recovery up to $100m;

(b) 20% recovery between $100m and $150m;

(c) 12.5% recovery over $150m.

41 The funding of the Bain/Wyer proceedings is to occur with the assistance of a litigation funder, CASL Funder Pty Ltd atf CASL Portfolio Fund 1 Trust ('CASL'). If successful in the proceeding, the Bain/Wyer applicants propose to apply for an all‑inclusive CFO. The Bain/Wyer applicants propose to seek a CFO at slightly higher rates than Banton Group, also on a sliding basis:

(a) 30% recovery up to $100m;

(b) 20% recovery between $100m and $150m;

(c) 15% recovery over $150m.

42 Because both the Vingrys and the Bain/Wyer consolidated carriage proposals are 'all‑inclusive' the percentages proposed and therefore the potential returns to group members are readily comparable.

43 Mr Vingrys submits his proceeding should continue as an open class group proceeding in the SCV and that the Bain/Wyer proceedings should be permanently stayed.

44 The Bain/Wyer applicants propose consolidation of the FCA proceedings and a permanent stay of the Vingrys proceeding.

(a) Mr Bain and Mr Wyer will be the representative applicants.

(b) CASL will fund the proceedings, including the provision of security for costs by way of a Deed of Indemnity from an insurer and will meet any adverse costs order on the basis that a CFO will be sought.

(c) Echo Law, Mr Bain's solicitors, will be the solicitors on record for the Bain/Wyer applicants and Piper Alderman, Mr Wyer's solicitors, will be engaged as Echo Law's agent.

(d) There will be a single counsel team.

(e) A costs referee will be appointed to undertake enquiries to determine whether unnecessary, duplicative or excessive work has been undertaken, the costs of which will not be recoverable from the respondents.

46 Echo Law and Piper Alderman have similar arrangements for the cooperative conduct of another FCA class action, Marianne Haverkort v Qantas Airways Ltd, where Piper Alderman acts as agent to Echo Law responsible for 40% of the legal services.

47 Arrangements for the conduct and funding of the Bain/Wyer proceeding are documented in four agreements to be entered into by the FCA applicants, the two legal firms and CASL within 14 days of an order being made on the assumption that the FCA applicants are successful in the carriage dispute.

48 Mr Vingrys submits that the conduct of any group proceeding by two firms rather than one presents a risk of duplication of work and unnecessary or excessive costs.

49 ICM considers the proposed arrangements for a costs referee satisfactorily deal with issues of potential cost duplication or excessive costs. Mr Budzinski did not make submissions about these issues.

50 The fact two firms rather than one are to be involved in the conduct of the Bain/Wyer proceeding is not a basis to distinguish between the competing proposals. The appointment of an independent costs referee pursuant to ss 33ZF and 54A of the Federal Court of Australia Act 1976 (Cth) ('the FCA Act') is an established approach to managing costs risks in the case of cooperatively conducted class actions. The proposed arrangements for the conduct of the Bain/Wyer proceeding are appropriate to manage costs risk.

51 Both proponents made submissions regarding the quality and experience of their legal representation.

52 I accept that each of the firms involved and the counsel briefed by those firms have extensive experience in class action litigation.

53 I accept that Banton Group, established in 2020, is a specialist class action litigation firm with expertise in, amongst other areas, insolvency, restructuring and complex group proceedings.

54 Ms Banton, the managing partner of Banton Group, has approximately 20 years' experience as a legal practitioner. Her past work includes having responsibility for the conduct of claims involving complex and novel financial products. She has been involved in various proceedings against banks and rating agencies including Standard and Poor's and Fitch Ratings as well as a number of complex class actions.

55 Elliott Smith, a partner at Banton Group with the day to day carriage of the Vingrys proceeding, has 16 years' experience running complex commercial, restructuring and insolvency disputes and class actions in Australia and the Asia Pacific. Mr Smith currently has the carriage of other group proceedings in the FCA and the SCV.

56 Banton Group has retained six members of counsel to act in the Vingrys proceeding: two members of Senior Counsel, two members of junior counsel of eleven and nine years' call and two more junior barristers.

57 Senior counsel for Mr Vingrys confirmed that none of the six members of counsel now retained has actually been engaged to perform any work in relation to the substantive aspects of the claim on behalf of Mr Vingrys or on behalf of group members. No other member of counsel has been involved in substantive work either, whether that be the preparation or settling of a pleading, the provision of advice on prospects of Mr Vingrys or of group members, advice on quantum or otherwise.

58 Ms Banton has given evidence in her 17 June 2024 affidavit that the Vingrys statement of claim was 'harmonised with the Bain statement of claim and the Wyer statement of claim.' That work was done by Banton Group. It is Ms Banton's evidence that:

The resulting Vingrys Statement of Claim which was prepared by my firm in around February 2024 is therefore almost identical in nature and scope to the Bain and Wyer Statements of Claim. I was satisfied of the sound forensic approach taken in the Bain and Wyer Statements of Claim and considered that harmonised pleadings increased the prospects for cooperation and consolidation. I did not consider that it was in group members' interests to file a third pleading that was different for the sake of being different, in circumstances where the approach taken in the Bain and Wyer Statements of Claim was sound and was more comprehensive than that taken in the draft Vingrys Statement of Claim.

59 Echo Law is an incorporated legal practice of which Matthew Chuk, who has the ca re and conduct of the Bain proceeding, is a director. Mr Chuk has extensive experience in class actions, including securities class actions, superannuation litigation and debenture litigation. Between 2008 and 2022 he was employed by Slater & Gordon, becoming a Principal Lawyer in 2017 and a Practice Group Leader in 2018, working prominently on large‑scale representative or group proceedings in the FCA and the SCV. Two of Mr Chuk's partners at Echo Law and the Senior Associate with responsibility for the Bain proceeding were also formerly employed by Slater & Gordon and worked in that firm's class actions department for substantial periods.

60 In early October 2023 Echo Law briefed senior and junior counsel, and in November 2023 another member of junior counsel, to prepare the statement of claim filed in the Bain proceeding on 20 December 2023. The 133 page statement of claim, signed by Mr Chuk, records that it was prepared by Monica Aguinaldo and Robert Clark of counsel and was settled by Christopher Withers SC. Mr Withers has also been involved in the carriage of and has settled the pleadings in the CMC markets class action, Zulic v CMC Markets Asia Pacific Pty Ltd and in AghaeiRad v Plus500AU Pty Ltd & Anor, another CFD class action filed in the FCA on 24 November 2023.

61 Katherine Sambrook, a partner of Piper Alderman since January 2023 and the solicitor on the record for Mr Wyer, has more than 10 years' experience as a solicitor, including working at Banton Group between February 2020 and May 2021. Since November 2018, Ms Sambrook has practised almost exclusively in class actions and group litigation acting for claimants. She currently has the day to day carriage of group proceedings which are being conducted cooperatively with other law practices including Slater v IG Markets Limited (ARBN 099 019 851) & Anor in the FCA ('IG Markets class action'), a proceeding which has substantial similarities to the Bain/Wyer proceedings. The IG Markets class action is further progressed than the Wyer proceeding.

62 In September 2023 Ms Sambrook briefed senior counsel and two junior counsel to act in what later became the Wyer proceeding. The same counsel team briefed in the Wyer proceeding are briefed in the IG Markets class action.

63 The Wyer proceeding was issued on 6 February 2024. The statement of claim was signed by Ms Sambrook and was prepared by Ajay Sivanthan and Thomas Bagley of counsel and settled by Lachlan Armstrong KC. It includes claims not found in the Bain proceeding statement of claim relating to the issue of a Product Intervention Order by ASIC ('PIO claims'), the publication of Target Markets Determinations ('TMD claims') and conflicted remuneration claims.

64 The proposed consolidation of the Bain proceeding and Wyer proceeding occurred following Orders of the FCA made at the first case management hearing on 9 February 2024. Those Orders required Piper Alderman and Echo Law to confer and seek to agree upon any terms for cooperation and, if appropriate, consolidation of the Bain and Wyer proceedings. The orders noted the Bain/Wyer applicants would provide a copy of the conferral orders to Banton Group and invite them to participate in the conferral process, albeit at that time the Vingrys proceeding was yet to be filed.

65 The three law practices participated in a conferral process from February 2024.

66 Mr Chuk and Ms Sambrook gave evidence of the lengthy conferral process leading to agreement to consolidate and of cooperation between the two law practices with respect to substituted service orders on Mr Budzinski. The Bain/Wyer applicants submitted this cooperative approach demonstrates a proven track record of them acting in a manner consistent with the overarching obligations under the Civil Procedure Act 2010 (Vic) ('the CPA') and in a manner that is in the interests of group members. The Bain/Wyer applicants note that no cooperative conduct agreement was able to be reached with Banton Group as a participant despite its involvement in the conferral process.

67 Ms Banton has given evidence she formed the view consolidation was not in group members interests.

68 The Bain/Wyer applicants submitted the diligent and cooperative conduct adopted by their legal teams to date is a factor that weighs in favour of the proceedings as was found to be the case in Lidgett v Downer EDI.[9]

69 Mr Vingrys submitted the reliance on Downer EDI is misplaced. In that case the cooperative conduct of the consolidating parties was material where the funding price and forum proposals were otherwise identical. In this case Banton Group cooperated throughout an extensive conferral process but because a proceeding would be more expensive and there was no agreed process for the competitive tendering of the funding price, decided not to participate. There was no evidence of these factors in Downer EDI.

70 I do not consider there is a basis to distinguish between the general class action experience of the law practices vying for carriage. Each of the law practices and the key practitioners involved are very experienced in class actions.

71 I accept the submission that the only solicitors involved who have experience in CFD class action litigation are those from Piper Alderman. However, I also accept that Ms Banton has experience in complex financial product litigation. Although the experience of those involved in the Bain/Wyer proceedings is more targeted I do not consider the difference in the particular experience of the solicitors involved provides a basis to distinguish between the competing carriage proposals.

72 I do not consider the fact referred to by Ms Banton that cost estimates of the work to be performed by her firm plus disbursements are lower than the comparable estimates of the costs of the work to be performed by Echo Law or by Piper Alderman plus disbursements provides a basis to distinguish between the proposals. Where both proposals vying for carriage intend to seek all‑inclusive GCO or CFO orders, differences between estimates of the actual costs and disbursements are not of particular relevance. For the purposes of comparison what matters is the expected return to group members from a favourable decision of the Court or a favourable settlement.

73 While a track record of cooperation as has been demonstrated by the law practices involved in the Bain/Wyer proceeding will in some cases be a material factor in determining a carriage dispute, unlike the position in Downer EDI, I do not regard the present dispute as one which is finely balanced. In this case there are a number of different, and in my opinion, substantive factors which separate the competing proposals.

74 I regard the prior involvement of the Bain/Wyer proceedings' counsel teams in substantive work as a material distinguishing feature in favour of the Bain/Wyer proceeding.

75 The counsel team for the Bain/Wyer proceeding includes Christopher Withers SC, Rob Clark and Monica Aguinaldo, the counsel team who prepared and settled the Bain statement of claim. Thomas Bagley, junior counsel involved in the preparation of the Wyer statement of claim is to complete that team.

76 The six members of counsel retained by Banton Group in the Vingrys proceeding are very experienced in class actions. The critical difference is that the Bain/Wyer proceeding counsel team have all been involved in a significant amount of work resulting in both cases in detailed statements of claim. It is obvious from the pleadings that a huge amount of thought and intellectual endeavour has gone into them.

77 Not only have the six members of counsel retained by Banton Group not undertaken any substantive work in the Vingrys proceeding, it was not submitted that any of them has previously had relevant exposure to, or involvement in, CFD related litigation.

78 I accept the Bain/Wyer submission that the type and level of involvement of counsel and solicitors in the conduct of the respective proceedings to date provides a means of demonstrating which legal team is likely to lead to better outcomes for the group members. The greater the involvement, particularly when it results in high quality work product, the greater the confidence the Court can have that the legal practitioners involved are not only equipped with the required skill to effectively and efficiently advance the case for the benefit of group members, but that those involved have already actively turned their minds and given original thought to the best manner in which the interests of group members might be advanced.

Issue 3: The nature and scope of causes (and relevant case theories)

79 Mr Vingrys submits that the nature and scope of causes of action and group membership is rarely a decisive factor in determining a carriage dispute. I agree. As Nichols J said in Nelson v Beach Energy; Sanders v Beach Energy:[10]

[a] comparison between pleadings has its limits, particularly where the case is at an early stage and both claims traverse the same factual substratum and assert the same causes of action.

80 Mr Vingrys submits the Bain/Wyer applicants have not produced a consolidated statement of claim, notwithstanding those parties first sought consolidation in March 2024. He submits it is not necessary for the Court to interrogate the differences between the pleadings. Multiplicity disputes are not ordinarily the occasion to descend into such matters. The Court can assume that practitioners will regularly reflect on the conduct of the case and give thought to amendments refining the case and where appropriate bring applications to augment or restrict the class.[11]

81 I accept that 'multiplicity disputes are not ordinarily the occasion' to descend into a pleading comparison. However, this is not an 'ordinary' multiplicity dispute.

82 There is a real issue, one of substance that falls for consideration in the determination of these applications. It concerns whether and if so what independent skill and judgment Banton Group has brought to bear on the Vingrys proceeding to date.

83 I raised this issue at the first directions hearing on 3 May 2024 when it became apparent that the Vingrys statement of claim appeared to be at least substantially a copy of the very detailed and comprehensive pleading prepared by counsel in the Bain proceeding. I invited Banton Group to reflect on that issue. I noted that it might be difficult for them to demonstrate they had brought independent skill and judgment to the proceeding to that point in time.

84 Ms Banton has given evidence on these applications that the Vingrys statement of claim prepared by her firm in around February 2024 is almost identical in nature and scope to the Bain and Wyer statements of claim. With the exception of one sentence in the particulars in the 159 page statement of claim, other than cutting and pasting the Bain statement of claim and including parts of the Wyer statement of claim, a process described by Ms Banton as 'harmonising'. I can find no evidence in the statement of claim of original work or work the result of original intellectual endeavour by Banton Group.

85 Ms Banton has given confidential evidence about actions taken by her law practice between 31 October 2023 and 20 December 2023.

86 The Bain proceeding was commenced on 20 December 2023. Ms Banton has given evidence that on 28 December 2023 a draft statement of claim prepared by Banton Group was sent to Mr Vingrys for his instructions. The draft was not exhibited to either substantive affidavit made by Ms Banton filed pursuant to the 4 June 2024 Orders.

87 The 3 July 2024 affidavit of Ms Banton exhibited a copy of the draft statement of claim attached to the 28 December 2023 email. As I said in my reasons for refusing leave it is clear a deliberate choice was made not to exhibit the draft pleading to Ms Banton's June 2024 affidavits.

88 I have not read the exhibit to the 3 July 2024 affidavit. In light of the observations I made at the 3 May 2024 hearing and the failure to exhibit it to the earlier affidavits I infer that the draft statement of claim would not have supported a finding that it was the product of substantial original work and intellectual input and consideration by Banton Group.

89 On 12 February 2024 Banton Group sought non‑party access to inspect a copy of the pleadings in the Bain proceeding and Wyer proceeding. Those documents were accessed by Banton Group the next day.

90 Ms Banton's evidence is that on 13 February 2024 she observed the Bain statement of claim was 'more comprehensive than the (then) draft Vingrys statement of claim'. The (then) draft to which Ms Banton refers, the date of which is not specified, is not exhibited to any affidavits filed in accordance with the 4 June 2024 Order.

91 In redacted parts of her 25 June 2024 affidavit Ms Banton said first that 'subject to further analysis and consideration' she proposed to add a further cause of action. Later in her affidavit she said she 'intend to expand the claim' to include such a cause of action. No reference was made in either of the statements of position filed on behalf of Mr Vingrys or in submissions filed on his behalf to this proposed cause of action or to any proposed amendment to the 'harmonised' statement of claim to include it.

92 Ms Banton's inconsistent references to a further potential cause of action not included in the Vingrys pleading as filed on 14 March 2024 and not otherwise referred to in statements of position or submissions gives no confidence that at least until shortly, prior to the hearing she or others at Banton Group had previously given appropriate thought and consideration to causes of action that might be available for the benefit of Mr Vingrys and group members beyond those included in the Bain and Wyer statements of claim.

93 The Vingrys statement of claim, a copy and paste of the Bain statement of claim includes two of the three additional causes of action in the Wyer statement of claim. It does not include the conflicted remuneration claim. The evidence and submissions filed on behalf of Mr Vingrys do not explain whether a deliberate decision was made not to include the conflicted remuneration claim in the 'harmonised pleading' and, if so the reasons that occurred.

94 With the exception of the non‑inclusion of the conflicted remuneration claim what Ms Banton has described as 'harmonisation' is the wholesale adoption by Banton Group of the work of others, those responsible for the statements of claim in the Bain and Wyer proceedings.

95 This is not an example of consolidation by agreement between two firms and counsel teams that leads cooperatively to the filing of a single consolidated statement of claim drawing together the work of all involved. The proposal by the Bain/Wyer applicants is an example of that circumstance with solicitors and counsel from both teams to be involved going forward. The 'harmonisation' by Banton Group is not an example of an amended pleading filed following a contested carriage dispute where the successful proponent amends to pick up additional causes of action referred to in argument or makes changes to a pleading to better express claims on behalf group members in light of the matters discussed during the hearing. The filing of the Vingrys statement of claim was not the filing of a copy and paste pleading, for which the prior consent of those who prepared the Bain/Wyer applicants' statements of claim had been sought and obtained.

96 The 'harmonisation' of the FCA pleadings by Banton Group has been used and relied on to put the Vingrys proceeding on an equal footing, so far as pleading is concerned in the carriage dispute with the Bain/Wyer proceeding. The failure by the Bain/Wyer applicants to have filed a consolidated statement of claim is put against those parties by Mr Vingrys.

97 When the Vingrys proceeding was filed there was no explanation of what had occurred concerning the statement of claim. No affidavit was filed accompanying the pleadings or before the 3 May 2024 hearing saying whose work had been relied on to produce the statement of claim or describing the 'harmonisation' process which Ms Banton has now described.

98 When I first read the statement of claim in anticipation of the directions hearing I was struck by the comprehensive, well‑structured and apparently well thought out pleading. However that was all the work of others. The Vingrys statement of claim is not the result of intellectual endeavour by Banton Group. To describe what has occurred as plagiarism may sound harsh, but it is accurate. The pleadings were copied and pasted and put forward by Banton Group as its own in the Vingrys proceeding without any attributions. It would not be a just result and it would not be in the best interests of group members to award carriage to a firm that has engaged in such conduct unless there were other compelling reasons to do so.

99 There is a separate issue concerning the Vingrys statement of claim. It contains errors and inconsistencies not in either of the Bain/Wyer pleadings:

(a) In its current form the group member definition in paragraph 1(a) makes no sense. It says the proceeding is commenced on behalf of all persons who or which 'entered into or acquired an interest in one or more CFDs issued by ICM Primary Contravention Period'.

(b) Although the statement of claim includes a TMD claim for the period of 5 October 2021 to 14 March 2024, the proceeding does not include persons who have claims during this period and damages are not claimed under the relevant statutory provision, s 1317HA of the Corporations Act 2001 (Cth).

(c) When copying the Bain and Wyer statements of claim Banton Group have made errors which are not present in original pleadings. See the Vingrys statement of claim at paragraphs 1(d) and 80(b).

(d) The authors of the Vingrys pleading have included a new term, 'BPIO', referred to at paragraphs 283(d)(ii), 287(c)(ii) and the particulars to 288. The reference to BPIO makes no sense in the context of the Vingrys pleading, or the Bain/Wyer pleadings. It appears to have its source in the statement of claim in the IG Markets class action pleading settled by Mr Armstrong KC. The term in that pleading refers to a product intervention order issued by ASIC which prohibited binary options. There were no allegations concerning binary options in either of the Bain or Wyer pleadings, because ICM did not offer such a product.

100 The problems with the definition of group members, the pleading of two but not all of the claims taken from the Wyer proceeding without explanation and the apparent 'borrowing' of an irrelevant definition from the IG Markets class action pleading are not consistent with independent skill care and attention having been brought to bear by those responsible for the 'harmonised' pleading. Such errors do not inspire confidence that those involved are in the best position to advance the interests of group members.

101 While amendments might be made to overcome these issues, the Bain/Wyer applicants submit this seemingly clumsy approach to the preparation of a pleading, does not suggest that the legal team having the carriage of the Vingrys proceeding has judiciously and diligently investigated, considered and prepared the Vingrys claim. I agree.

102 The Bain/Wyer applicants submit and I accept that simply copying a pleading from another proceeding, without first‑hand knowledge of the investigations, research and forensic decisions underlying the preparation of the pleading, will invariably leave the practitioner copying in an inferior position to run the case than those who prepared the original pleading.

103 The Bain/Wyer applicants submit that if successful in the carriage dispute they will seek leave to prepare updated pleadings which combine the relevant claims in the Bain and Wyer proceedings. Mr Chuk has given evidence the conflicted remuneration claim, the PIO claims and the TMD claims, existing claims in the Wyer proceeding will be included in the consolidated pleading to be filed within three weeks. Senior counsel for the Bain/Wyer applicants submitted if there is considered to be substance to the potential cause of action referred to in Ms Banton's affidavit on a confidential basis the opportunity to investigate remains open. I agree.

104 I regard the matters to which I have referred concerning 'harmonisation' of the pleadings by Banton Group as not only a material factor, but a factor of very considerable significance against awarding carriage to the Vingrys proceeding and Banton Group.

105 When the group membership in the Vingrys proceeding and in the Bain/Wyer proceeding is compared, the composition of the groups are not the same. The Bain/Wyer proceeding extends to claims for loss and damage beyond the scope of the Vingrys proceeding. That is a function of the Vingrys proceeding being issued later in time than the two FCA proceedings.

106 Following consolidation of the Bain proceeding and Wyer proceeding, the consolidated proceeding will represent groups of persons:

(a) in respect of Primary Contraventions occurring between 20 December 2017 to 28 March 2021;

(b) with PIO Claims occurring from 29 March 2021 (at the latest) until the date of the consolidated statement of claim; and

(c) with TMD claims occurring from 5 October 2021 until the date of the consolidated statement.

107 Without an order of the SCV extending the time period for claims by group members to include the period 20 December 2017 to 14 March 2018, claims during that period will not fall within the claims in the Vingrys proceeding.

108 Because the conduct of the defendants/respondents complained of begins in the 2018 financial year, the exclusion of claims for this period is material. Mr Chuk has given a confidential estimate of the potential value of claims in this period. Based on his evidence, I accept that the value of the claims referable to this period is substantial both in absolute terms and as part of the overall claims potentially available to group members.

109 Mr Vingrys submits the group member definition in the Vingrys proceeding adopts the definition in the Bain statement of claim and that any concern about the definition is capable of resolution by way of application under s 33K of the SCV Act having regard also to the suspension of limitations periods upon the commencement of the Bain proceeding in the FCA.

110 It may be that due to the suspension of limitation periods upon the commencement of the Bain proceeding no issue of substance arises about whether claims for the period 20 December 2017 to 14 March 2018 are time‑barred. However, s 33K of the SCV Act does not clearly have the effect, as the Vingrys submissions assert, that 'any concern about the definition is capable of resolution by way of application under s 33K'.

111 Section 33K of the SCV Act is relevantly in the following terms:

33K Causes of action accruing after commencement

(1) The Court may, at any stage of a group proceeding on application made by the plaintiff, give leave to amend the writ commencing the group proceeding so as to alter the description of the group.

(2) The description of the group may be altered so as to include a person -

(a) whose cause of action accrued after the commencement of the group proceeding but before such date as the Court fixes when giving leave; and

112 As suggested by the heading to the section, the express power to alter the description of the group in s 33K(2)(a) is a power to include causes of action accruing after the commencement of the proceeding. While the scope of operation of s 33K was not argued on these applications, on its face, the section would not appear to provide a suitable statutory basis to address the differential time bar issue confronting the Vingrys proceeding.

113 The attitude of the defendants to an application to extend time so as to materially increase their exposure is unknown but consent or non‑opposition to any such application seems unlikely. At the very least, the need for Mr Vingrys to apply to extend the time in which to bring claims on behalf of group members for the period prior to 14 March 2018 is a complication which is not present in the Bain/Wyer proceedings.

114 I regard the difference between the existing composition of group members as a material factor in favour of the Bain/Wyer proceeding.

115 Mr Vingrys submitted a material factor in favour of his proposal is that it is superior on price. It provides higher estimated returns to group members and its structure is superior with a GCO being better for group members than a deferred CFO. Mr Vingrys submitted price is a relatively clear, concrete and objective factor in favour of his proceeding being granted carriage.

116 He submitted group members will be better off in the Vingrys proceeding if less than $100 million is recovered and better off if the recovery is greater than $150 million and that while the differences may be modest, they remain clearly in favour of the Vingrys proceeding.

117 Separately Mr Vingrys submitted there is a significant benefit for group members from the certainty of returns from the outset in the case of a GCO.

118 In his 20 June 2024 submissions Mr Vingrys contrasted the financial position of Banton Group which is self‑funded with the funding of the Bain/Wyer proceeding. He submitted that based on the detailed financial information provided in Ms Banton's affidavit, there should 'be no doubt' as to Banton Group's ability to fund the Vingrys proceeding.

119 The Bain/Wyer applicants responded by submitting any small differences in the competing funding models in favour of the Vingrys proceeding are outweighed by material uncertainties created by the Vingrys funding proposal and the benefits of the FCA forum.

120 The fact there are different regimes in relation to GCOs in the SCV and CFOs in the FCA was contended by the Bain/Wyer applicants to be a neutral factor. While a GCO can be made at an early stage of the proceeding no order has yet been sought or made in the Vingrys proceeding. Section 33ZDA(3) of the SCV Act enables the SCV to amend any GCO made, including as to percentage during the course of the proceeding. In both jurisdictions commission rates are subject to judicial scrutiny at the conclusion of the proceedings.

121 Further issues contended by the Bain/Wyer applicants to provide a basis to distinguish between the competing proposals are the lack of certainty and information around the financial position of Banton Group and uncertainty about the commitment of Banton Group to pursue the Vingrys proceeding in the interests of group members, including by reason of the terms of Mr Vingrys' retainer of Banton Group.

122 Banton Group and Mr Vingrys entered into a conditional costs agreement dated 19 September 2023 (signed by Mr Vingrys on 5 October 2023) pursuant to which Banton Group agreed to provide legal services to Mr Vingrys on a conditional 'no win no fee' basis up to the determination of the carriage motion and the awarding of a GCO or a CFO ('the Banton Retainer').

123 In their 24 June 2024 reply submissions the Bain/Wyer applicants were critical of the terms of the Banton Retainer. They submitted the terms reflect a lack of commitment by Banton Group to pursue the proceeding for the benefit of group members:

(a) If a GCO is not granted Banton Group may terminate the retainer pursuant to clauses 3.9 and 4.1 of the Banton Retainer with immediate effect and may apply to have the proceeding discontinued.

(b) Clause 11.2 of the General Terms of Business, which form part of the terms between Mr Vingrys and Banton Group, states that Banton Group 'may end our engagement by giving [Mr Vingrys] written notice, including for the following reasons:...'. The use of the word 'including' must mean that Banton Group is entitled to terminate the retainer for any reason (subject to professional obligations).

(c) The definition of GCO at clause 3.4 of the Banton Retainer is 'at a percentage rate that is acceptable to Banton Group'. This definition suggests that if a GCO were to be ordered at a rate that is not acceptable to Banton Group the right to terminate is enlivened.

(d) Clause 3.8 indicates that where a GCO will be pursued 'we will not continue to work on other aspects of the Proceeding unless and until an acceptable GCO is in place, pursuant to paragraph 4.1 below, unless we expressly agree otherwise' - casting doubt over whether a proceeding will be pursued for the benefit of group members in such circumstances.

(e) The Banton Retainer provides at clause 4.2 that Mr Vingrys can be required to enter into a funding agreement with a third party financier if Banton Group does not wish to continue to fund the proceeding. There is no evidence concerning the terms of any such funding arrangement or the commission rate, should a funding agreement be entered into.

(f) It appears Banton Group has offered no indemnity to Mr Vingrys in respect of legal costs.

124 The Bain/Wyer applicants submit there is no clarity as to what Mr Vingrys proposes if a GCO is not ordered. Should Banton Group fail to obtain a GCO at all or a GCO at the rates it wishes, it is free to immediately cease acting for Mr Vingrys and the group members. The Bain/Wyer proceedings could be permanently stayed now, only to have the Vingrys proceeding end a short time thereafter when Banton Group abandons Mr Vingrys and the group members because a GCO, or a GCO acceptable to it, is not obtained.

125 The Bain/Wyer applicants submit in contrast, the conditional costs agreement between Echo Law and each of Mr Bain and Mr Wyer ('Revised Lawyers Retainer') and the funding model will ensure those proceedings are prosecuted to settlement or hearing, and will protect Mr Bain, Mr Wyer and the group members. In contrast to the Banton Retainer, clause 8.1 of the Revised Lawyers Retainer provides Echo Law is not generally free to terminate its retainer.

126 On 3 July 2024 Banton Group and Mr Vingrys entered into an amended retainer agreement with the apparent intention of addressing issues raised by the FCA applicants. The amended agreement was exhibited to the 3 July 2024 affidavit Ms Banton but leave was not given to rely upon that affidavit or its exhibit.

127 The terms of the Banton Retainer to which attention has been drawn and the belated scramble by Banton Group to address legitimate concerns in relation those terms are not consistent with Banton Group having carefully turned its mind to and considered issues relevant to the interests of group members within its existing retainer agreement before issuing the Vingrys proceeding.

128 No corresponding criticism was or could reasonably have been made of the manner in which, upon execution, the Revised Lawyer Retainer will bind Echo Law to prosecute the Bain/Wyer proceeding in the best interests of group members.

Returns to group members: the competing percentages

129 In their initial statement of position, the Bain/Wyer applicants proposed to seek a CFO at a flat rate of 25%. The Vingrys initial statement of position provided for a GCO on a sliding scale of 30% attaching to recovery of up to $100m, 20% to recovery of between $100m and $150m and 15% to recovery of over $150m.

130 In their revised statement of position the Bain/Wyer applicants changed their position to match the initial Vingrys statement of position. The Vingrys revised statement of position contained a slight reduction in rates to provide for a GCO rate to be set on a sliding scale with 29% attaching to recovery of up to $100m; 20% to recovery of between $100m and $150m; and 12.5% to recovery of over $150m.

131 I accept Mr Vingrys' submission that under the revised statements of position group members will be better off in the Vingrys proceeding if less than $100m is recovered and better off if recovery is greater than $150m.

132 The Bain/Wyer applicants also accept that is correct based on the percentages but question whether Banton Group will fund the proceedings at all if the SCV does not approve a GCO at the percentage rates contended for but instead, determines the rate should be lower as occurred in Mumford v EML Payments Limited.[12]

133 The 3 July 2024 affidavit of Ms Banton for which leave was refused sought to address that issue. It specified lower percentage rates than stated in the revised statement of position at which, if determined on a CGO application as happened in Mumford, Banton Group would nevertheless be prepared to self‑fund the Vingrys proceeding.

134 The Bain/Wyer applicants submitted that to allow such evidence would cause prejudice to them and that the affidavit amounted to a change of position, contradicting the 4 June 2024 Orders.

135 I agree with that submission. Although put forward as a response to what would happen if the GCO percentage determined by the Court were to be lower than specified in the revised statement of position, if admitted, the evidence would be admissible for all purposes. Evidence of lesser 'acceptable' percentages would need to be taken into account on a GCO application when determining where the best interests of group members lie.

136 To permit reliance on evidence of such percentages would undermine the process for bidding and rebidding and would be directly contrary to the 4 June 2024 Orders. The Orders expressly provide that the revised statement of position is the only opportunity for a moving party to modify their position and that no other revision to a party's position will be considered.

137 In an attempt to overcome the conflict with the 4 June 2024 Orders Mr Vingrys submitted an order could be made limiting the use of the evidence pursuant to s 136 of the Evidence Act 2008 (Vic). That is not a solution. It remains that the purpose for which the evidence would be admitted would be expressly contrary to the Orders. It would also be prejudicial to the Bain/Wyer applicants.

138 I accept the Vingrys carriage proposal is superior on price. The fact the proposal is superior on price is a factor, but in light of the confidential evidence seeking to quantify the monetary difference and the likely return to group members not a significant factor in favour of the Vingrys proceeding.

139 I do not agree with Banton Group that in this case the fact there are different regimes in relation to GCOs in the SCV and CFOs in the FCA means the structure of the Vingrys proceeding is superior with a GCO being 'better' for group members.

140 Section 33ZDA(1) of the SCV Act permits the SCV to fix the legal costs payable to the law practice representing the plaintiff and group members as a percentage of the amount of any award or settlement that may be recovered in the proceeding. Subsection 3 permits the Court to amend a GCO, including a percentage previously fixed, at any time during the course of the proceeding. It can be expected that the question of the appropriate percentage to be awarded may be revisited at the time of settlement or following judgment.

141 Although as a result of the decision of the High Court in BMW Australia Ltd the Brewster[13] the Federal Court cannot determine in advance the percentage of legal costs or the percentage that will be recovered by group members in the future should the claim be successful, the Full Court has made it clear that s 33V(2) of the FCA Act gives the FCA the power to make a CFO at the conclusion of a proceeding.[14]

142 On 5 July 2024 the Full Court of the FCA delivered its decision in R&B Investments Pty Ltd (Trustee) v Blue Sky (Reserved Question) ('R&B Investments').[15] In that case the Full Court determined the FCA has jurisdiction to make a solicitors' CFO upon settlement or judgment of a representative proceeding, although not at the outset of the litigation as provided for in s 33ZDA of the SCV Act.

143 In both jurisdictions the Court retains a supervisory jurisdiction upon any settlement or following judgment concerning the amount to be allowed in respect of legal costs, disbursements and where relevant, in favour of those responsible for litigation funding.

144 From the perspective of group members the real difference between the statutory regime in s 33ZDA and the position in the FCA as articulated in R&B Investments is that only the SCV has power to fix the level of a GCO at or near the commencement of a group proceeding. I accept that the ability of the SCV to do so provides a benefit to group members once a GCO is made due to the relative certainty that flows from a s 33ZDA(1) order. While the scope of the power in s 33ZDA(3) to amend a GCO is yet to be judicially considered, it seems unlikely that barring unforeseen or a significant change in circumstances the percentage fixed under s 33ZDA(1) would be increased on an application pursuant to s 33ZDA(3). For that reason, a GCO pursuant to s 33ZDA provides greater certainty for group members than a CFO which cannot be made by the FCA until settlement or judgment.

145 During the hearing senior counsel for the Bain/Wyer applicants said her clients and those involved in the conduct of those proceedings are prepared to undertake or to submit to an order that in the event of a settlement or following a successful outcome they would not seek an‑inclusive CFO for any amounts greater than the percentages in their revised statement of position.

146 As a result of that commitment the greater certainty for group members of a CFO from the outset is not an issue. In the context of the 'certainty' of a yet to be applied for GCO and a 'guaranteed maximum' CFO the fact a GCO may be made by the SCV pursuant to s 33ZDA is not a material factor to differentiate between the proposals.

The financial position of Banton Group and of those funding the Bain/Wyer proceeding

147 Mr Vingrys submitted Banton Group is presently acting on a contingent basis, with no uplift, is bearing its own professional costs and paying disbursements pursuant to the terms of the Banton Retainer. By comparison, the Bain/Wyer proceeding involves an agency arrangement between Echo Law and Piper Alderman, with an uplift, underpinned by a funding agreement with CASL. Based on the budgets of the solicitors in those proceedings they will be more expensive than the Vingrys proceeding.

148 Under the Revised Funding Agreement, CASL has agreed to pay 50% of Echo Law's professional fees and 75% of Piper Alderman's fees that leaves Echo Law to carry the other 50% and Piper Alderman to carry the other 25% on a contingent basis.

149 In his 20 June 2024 submissions Mr Vingrys contended this puts the financial capacity of those firms to carry those fees in issue. It falls to Echo Law and Piper Alderman to persuade the Court they can supply adequate resources to sustain their end of the bargain. This has not occurred. Mr Vingrys submits the evidence filed by the Bain/Wyer applicants leaves this critical question opaque.

150 The Bain/Wyer applicants accept the wherewithal of a firm to prosecute proceedings is a potentially determinative factor on carriage. They referred to Lay v Nuix Ltd,[16] where Banton Group was found to have provided no evidence about how proceedings would be funded and as a consequence was refused a GCO and was not given carriage.[17]

151 In their 19 June 2024 submissions the Bain/Wyer applicants contended the affidavit of John Walker, the Executive Chairman of CASL Group Pty Ltd, establishes that CASL has more than adequate resources to fund the costs of the consolidated proceeding. The Court can be satisfied there is sufficient funding to properly prosecute the claim and to meet any adverse costs orders.

152 They submitted the Bain/Wyer proceeding have a commitment from CASL to fund counsel's fees to an amount approximately double the budget in the Vingrys proceeding. The disparity in this budget item was said to demonstrate pressure on Banton Group to limit its cash outlays during the course of the proceeding.

153 They submitted CASL has the financial wherewithal to fund the proceedings through to completion and has proved so in evidence. The evidence of Mr Chuk establishes that Echo Law has the means to prosecute the consolidated proceedings based on the funding of 50% of their fees by CASL. The 50% figure represents Echo Law's true costs of incurring those fees (including overheads), so only its profit is at risk. Similarly, the evidence of Ms Sambrook establishes the proposed funding of Piper Alderman's fee earner rates at 75% covers the firm's costs for those fee earners' time and the firm's resources generally, and that Piper Alderman has significant annual revenue exceeding $100 million.

154 In the course of the hearing, only brief reference was made to the issue of the financial capacity of Echo Law and of Piper Alderman to fund their share of legal costs and disbursements. While the reply evidence did not include financial statements of either firm, given the dominant funder of those proceedings is to be CASL, the financial position of the two law practices is not as material as the financial position of Banton Group.

155 The Bain/Wyer written submissions contended that confidentiality claims maintained by Banton Group concerning the financial position of and resources available to it to self‑fund the Vingrys proceeding made it difficult for them to comment on or test Banton's groups asserted capacity to self‑fund. They submitted it would be unfair for Banton Group as a self‑funding law firm to be in a better position than a funder vis a vis disclosure of financial records establishing its means to fund the proceedings and that Banton Group should be required to disclose the evidence it relies upon so that the Bain/Wyer applicants can comment on and (if necessary) challenge it.

156 The inability of the Bain/Wyer applicants to test assertions relating to the financial resources of Banton Group was resolved shortly prior to the hearing when on or around 28 June 2024 confidentiality claims relating to redacted parts of Ms Banton's affidavit concerning the current financial position of the Banton Group and an exhibit concerning Banton Groups financial position as at 30 June 2023 were revised so that the information could be provided to the Bain/Wyer applicants but remained confidential from the defendants/respondents.

157 Upon the confidential Banton Group financial information being made available, the Bain/Wyer applicants submitted the evidence fails to substantiate the submission by Mr Vingrys that 'there should be no doubt as to Banton Group's ability to fund the proceeding'. Only limited financial information was provided by Ms Banton. No audited or finalised financial accounts were exhibited. The only financial record in evidence is a single page containing a 30 June 2023 'Consolidated Balance Sheet' and 'Consolidated Profit and Loss Statement' from Banton Group's management accounts. The Bain Wyer applicants submitted the content and nature of the financial analysis by Mr Searby upon which Banton Group and Mr Vingrys rely concerning the 'total financial capacity' of Banton Group is not of assistance when determining whether Banton Group has the financial capacity to fund the proceeding and/or meet an adverse costs order.

158 The Bain/Wyer applicants submitted Ms Banton has provided no assurance in her evidence that Banton Group will not also seek to run additional proceedings on a self‑funded basis, which would further stretch the firm's cash flow position. Nor has she provided evidence that she will not pay herself dividends from Banton Group's balance sheet. Unlike CASL, Banton Group does not appear to have clear policies and procedures regarding reserves and allocation of capital (or at least, these have not been put into evidence).

159 The sufficiency of evidence relating to the financial position of Banton Group having been raised, during the hearing senior counsel for Mr Vingrys submitted that if it was correct to view the financial information relating to Banton Group as inadequate due to failure to exhibit relevant accounting and financial records, the same criticism applies to the financial information relating to CASL. The affidavit of Mr Walker does not exhibit relevant accounting or financial records.

160 The onus is on the proponents for carriage to demonstrate by reference to appropriately detailed evidence that the funding model proposed is suitable and that those with responsibility for providing the funding will be able to do so without material risk to the group members that the funder be unable to fund the proceeding through to settlement or judgment. What is required to discharge the onus in relation to these issues will vary depending on the circumstances.

161 I do not accept the submission by Mr Vingrys that, based on the evidence 'there should be no doubt about Banton Group's ability to fund the proceedings'.

162 I do not regard the provision of a single page balance sheet and profit and loss statement from management accounts dated 30 June 2023 as a satisfactory basis upon which to assess the financial position of Banton Group or its ability to fund the Vingrys proceeding in June 2024. Given the passage of time, it might reasonably have expected that finalised financial accounts for the 2023 financial year, including a detailed balance sheet complete with explanatory notes and a detailed profit and loss statement would be available and exhibited. That information was not provided.

163 Without revealing anything confidential, the net asset position of Banton Group reported upon in the management accounts as at 30 June 2023 is critically dependent on a single non‑current receivable. Without any information about the nature of that receivable, as would be available if financial accounts complete with notes to those accounts were exhibited, it is simply not possible to form a reasonable view of the asset position of Banton Group as at 30 June 2023.

164 In her 17 June 2024 affidavit Ms Banton gave confidential evidence that at the time of making her affidavit Banton Group had net assets in excess of a certain specified sum, cash and cash equivalents in excess of certain specified sums and had earned income and net profit after tax ('NPAT') 'in the financial year to 30 June 2023' of a specified sum. The affidavit referred to Banton Group having earned an EBIT margin at a specified confidential rate for the financial year to 30 June 2023.

165 I questioned senior counsel in relation to the confidential sums referred to in the affidavit because the confidential sum for NPAT for the 30 June 2023 financial year did not correspond to the sum for NPAT in the profit and loss statement in the 2023 management accounts. After obtaining instructions senior counsel for Mr Vingrys clarified that references in three separate places to 'financial year to 30 June 2023' in Ms Banton's affidavit of 17 June 2024 were incorrect and that those references including the reference to NPAT should be 'financial year from 30 June 2023'.

166 It is unsatisfactory that the errors that occurred in Ms Banton's 17 June 2024 affidavit remained uncorrected when Ms Banton swore her affidavit in reply and that clarification of these matters was provided only after I raised these issues with senior counsel.

167 In her 17 June 2024 affidavit Ms Banton said that having carefully considered the financial position of Banton Group if a GCO is granted she proposes to fund the Vingrys proceeding out of the financial resources available to the law practice. She went on to say that in the alternative, if a GCO is not made, Banton Group 'or other litigation funder' will seek an all‑inclusive CFO at the same rates. Ms Banton said that given the resources readily available to Banton Group 'I am not presently minded to obtain an ATE insurance policy...'.

168 In her 25 June 2024 affidavit Ms Banton referred to 'further extensive work' assessing Banton Group's financial position and its ability to fund the proceeding. Ms Banton gave evidence of discussions with the financier of Banton Group's related service entity, Connect Partners Pty Ltd ('Connect Partners') of which she is a director about whether it would increase the amount available to it under an existing facility. If so, Connect Partners would in turn enter into a loan agreement to lend funds to Banton Group. Ms Banton gave evidence of a separate agreement with Innovate Partners Pty Ltd as trustee of the Banton Family Trust to enter into a loan agreement to lend money to Banton Group. Ms Banton gave evidence of a financial facility available to Banton Group and another facility 'that could be easily be reinstated' of Connect Partners. She gave evidence she has now 'confirmed the backing of litigation funder who will fund Banton Group's costs of the proceedings, if necessary' with formal documentation to be finalised. Ms Banton referred to engaging Mr Searby, an economic and financial consultant from Washington who performs consulting work for Banton Group to compare Banton Group's financial position with major plaintiff litigation firms in the market.

169 I accept the submission by the Bain/Wyer applicants that this evidence shows there is uncertainty about the funding arrangements proposed by Banton Group for the Vingrys proceeding. There is uncertainty about the proposed arrangements with the related entity Connect Partners and with Banton Family Trust and about whether a litigation funder might or might not be involved in funding the Vingrys proceeding.

170 The report by Mr Searby undertakes a comparative analysis of the 'financial strength' of other law firms, Maurice Blackburn Pty Ltd ('Maurice Blackburn'), Slater & Gordon Ltd ('Slater & Gordon') and Shine Justice Ltd ('Shine') compared to Banton Group based on their financial statements for the year ended 30 June 2023. The report draws on 2023 financial statements of the other law firms that are audited and complete. As would be expected the level of financial information is both extensive and verified. The same cannot be said for the information relating to the financial position of Banton Group considered by Mr Searby. Mr Searby only had available to him the single page of information extracted from the 2023 management accounts confidentially exhibited by Ms Banton.

171 A comparative analysis of any description requires a consideration of at least reasonably comparable data. That did not happen in this case. The Banton Group's financial information as at 30 June 2023 is basic at best, not finalised for the 2023 financial year and lacks critical notes to the accounts. Mr Searby was not given a sufficient level of financial documentation to undertake a meaningful comparison.

172 Mr Searby, who declares he has made all inquiries he believes are desirable and appropriate and that no matters of significance have been withheld reports that he considered three essential measures of financial strength:

• Profitability, the ability to earn revenues in excess of costs;
• The composition of assets and liabilities, in particular any unusual items;
• Equity ratios.

173 Mr Searby's consideration of these measures of 'financial strength' do not provide a true indication of the ability of a law practice to fund litigation such as the Vingrys proceeding.

174 Balance sheet strength is one indicator of financial strength relevant to the funding of a group proceeding. Mr Searby does not mention the non‑current asset in the Banton Group Balance sheet as at 30 June 2023 to which I have earlier referred as an "unusual item", or otherwise comment on this asset which is critical to the net asset position. Mr Searby should have referred to the lack of any explanation regarding this asset as a matter of significance withheld from him.

175 Mr Searby reports that 'Banton Group is funded principally by litigation funders.' That is not the method of funding proposed by Banton Group for the Vingrys proceeding which is proposed to be self‑funded.

176 I am not persuaded by the evidence that 'there [is] no doubt' that Banton Group has the financial capacity to fund the Vingrys proceeding without the involvement of a litigation funder. The expected ability to do so is described by Ms Banton in her 17 June 2024 affidavit as 'a highly relevant factor to the award of carriage'. To the extent it is such a factor, that factor does not favour the Vingrys proceeding. There is an absence of financial accounts as at 30 June 2023 approaching the level of detail of those considered by Mr Searby concerning Maurice Blackburn, Slater & Gordon and Shine. No financial documents relating to the period since 30 June 2023 that might enable a fair assessment of what underpins confidential numbers referred to by Ms Banton in her 17 June 2024 affidavit are exhibited. The financial position of Banton Group is opaque. If a litigation funder were to become involved, the terms of its involvement and the potential impact on group members are unknown. I accept the Bain/Wyer applicants' submission that there is a considerable level of uncertainty about Banton Group's funding proposal.

177 It is accurate as submitted on behalf of Mr Vingrys that the financial position of CASL of which Mr Walker gave evidence in his 17 June 2024 affidavit is also not supported by financial accounts. The detailed information in Mr Walker's affidavit which refers to CASL's financial capacity to fund cases, its business structure and its investors is unsupported by financial accounts. However, those parts of the affidavit setting out these matters for which confidentiality was claimed were disclosed to Banton Group at the time Mr Walker's affidavit was served. No issue was raised by Mr Vingrys at that time concerning the adequacy or otherwise of financial information relating to CASL. The lack of substantiating financial information was first raised as an issue and relied on by Mr Vingrys at the hearing to answer the absence of financial documentation concerning Banton Group. The circumstances are not the same.

178 In his 20 June 2024 submissions Mr Vingrys criticised the evidence of the financial capacity of Echo Law and Piper Alderman. The submission contained no criticism of the financial standing of CASL or of its ability to fund the Bain/Wyer proceeding. The submission did not criticise the failure of Mr Walkers' affidavit to exhibit financial documentation. It did not raise any question mark over the ability of CASL to fund its share, the lion's share, of the costs of the Bain/Wyer proceeding. The submissions simply said 'under the Revised Funding Agreement, CASL has agreed to pay...'.

179 I regard the uncertainty concerning Banton Group's own financial position and its uncertain and undeveloped proposal to obtain funding from a litigation funder as material factors that go against the Vingrys proceeding being awarded carriage.

180 The Bain/Wyer applicants accept that security for costs must be provided. They have offered to provide security by way of a Deed of Indemnity from an insurer, Am Trust Europe Limited. The costs of such security will be borne by CASL and will not be sought to be recovered, other than as part of any CFO percentage.

181 In contrast, the Vingrys Statement of Position and Ms Banton's evidence is that Banton Group either does not propose to provide any security for costs or intends to do so by way of an undertaking from Banton Group, unless otherwise ordered. That is, by reason of the asserted strength of Banton Group's financial position. Nevertheless, Banton Group is in a position to procure ATE insurance if required.

182 ICM submits that the security proposal of the Bain/Wyer applicants is preferable. Mr Budzinski submits Banton Group's proposal for security for costs is inadequate.

183 Section 33ZDA(2) of the SCV Act provides that if a GCO is made the law practice representing the plaintiff and group members must give such security for the costs of the defendant as the Court may order.

184 The defendants/respondents are being asked by Mr Vingrys as his primary position to proceed on the basis of trust that an undertaking from Banton Group will provide them with appropriate security for their costs, costs that as referred to in correspondence exhibited to the affidavit of Mr Sasson will be very substantial. The defendants/respondents are being asked to do so without any visibility over the financial affairs of Banton Group. To advance such a position is not realistic. It will be necessary for Mr Vingrys to provide security in an acceptable form to the Court if the Vingrys proceeding is successful in the carriage dispute.

185 Senior counsel for Mr Vingrys submitted that security is a neutral consideration and that there is no basis for a conclusion that there is difficulty in the Banton Group providing security.

186 Notwithstanding that submission, the Vingrys proceeding approach to the provision of security for costs is less certain and less developed than the Bain/Wyer approach. To that limited extent and on account of the lack of commercial reality about the proposal to provide an undertaking without disclosure of relevant financial information, while not an issue of significance, this factor favours the Bain/Wyer applicants.

Issue 7: The state of preparation of the proceedings

187 Consideration of this topic need only be brief in view of the earlier discussion of the work performed by the various legal practitioners involved on both sides of the carriage dispute.

188 In paragraph 36 of her 24 June 2024 affidavit Ms Banton provides details on a confidential basis of work undertaken in relation to the development of the pleading. Separately, she gives confidential evidence of work undertaken and disbursements incurred in order to be satisfied Mr Vingrys claim is viable. In a separate confidential section of her affidavit Ms Banton discusses the application in the Vingrys proceeding for substituted service on Mr Budzinski.

189 Section A.4 of Mr Chuk's 17 June 2024 affidavit contains details of his investigations and those of Echo Law, and a discussion of what he describes as the unique features of the these proceedings. The evidence, much of which is confidential from the defendants/respondents, reveals a careful and detailed process of analysis and evaluation of competing considerations leading to the initiation of the Bain proceeding.

190 Mr Chuk gives evidence that he initially anticipated submitting the proposed proceeding to CASL on the basis that it will be issued in the SCV. His affidavit sets out a detailed explanation, parts of which are redacted, about why he ultimately determined that in his view it would be in the interests of group members to initiate the proceeding in the FCA.

191 I am in no doubt that Mr Chuk and his law practice have undertaken very substantial work, in particular investigating and evaluating the issues to which he has referred in confidential parts of his affidavit. That work places Mr Chuk and his law practice in a strong position to advance the interests of his client and group members.

192 It is also evident that Ms Sambrook and her law practice have undertaken substantial work investigating, preparing for and conducting the Wyer proceeding, informed by her firm's early investigation and commencement of the Wyer proceeding.

193 I am satisfied the solicitors having the conduct of the Bain/Wyer proceedings have brought considerable skill, care, and attention to bear and have devoted considerable thought to how the interests of their individual clients and of group members can best be advanced.

194 Notwithstanding the evidence of Ms Banton referred to above, in light of my earlier discussion of work performed by Banton Group I have a greater level of confidence about the investigations and the evaluation of claims by the solicitors having the conduct of the Bain/Wyer proceedings than I have about the work undertaken by those involved in carriage of the Vingrys proceeding.

195 The proponents for carriage submitted the forum for which that party or those parties contend is the preferable forum. While I do not consider any of the issues raised provides a basis to distinguish between the proposals for carriage based on forum it is appropriate to refer to them.

196 The following issues were canvassed in submissions:

(a) By Mr Vingrys, the benefits of the SCV because of the availability of a GCO. In addition, the early disclosure of critical documents from the defendants pursuant to s 26 of the CPA;

(b) By the Bain/Wyer applicants, the fact the FCA already has five CFD cases and is the Court where ASIC brings its proceedings;

(c) By the Bain/Wyer applicants, differences in approach to soft class closure make the FCA a more appropriate venue in the interests of group members;

(d) By the Bain/Wyer applicants, the prospect that proceedings initiated in the FCA will progress more quickly than proceedings in the SCV.

197 ICM adopted a largely neutral stance on this issue. Its written submissions include:

(a) First, both fora will provide the parties with a fair hearing before experienced judges. Neither court is more preferable to the other in that particular respect;

(b) Second, ICM agrees with the Bain/Wyer applicants that efficiencies can reasonably be expected to emerge in the FCA as a result of all other CFD‑related class actions and ASIC proceedings having been issued and case managed in the FCA;

(c) Third, it is in the interests of both the applicants and the defendants to move to a resolution of the dispute as efficiently as possible. This is consistent with the overarching purpose in s 37M of the FCA Act and in s 7 of the CPA.

198 The question of the benefits of a GCO in the SCV compared to a CFO in the FCA is discussed as part of issue 5.

199 While the statutory requirement for the early disclosure of critical documents in s 26 of the CPA, a provision without equivalence in other jurisdictions, is intended to operate to expedite the exchange of critical documents, in this case because of the carriage dispute it has not operated to do so. On 3 May 2024 I made an order that the date for ICM's compliance with s 26 be extended until the carriage dispute is determined or until further order. As a result, to date, s 26 is a neutral factor in the determination of the carriage dispute.

200 I am not persuaded the fact the FCA has five existing CFD cases and litigation initiated by ASIC to be a basis to differentiate between the two Courts. I am not in a position to assess whether the fact of existing proceedings concerning CFDs and proceedings by ASIC in the FCA may lead to efficiencies in the FCA. Both Courts actively case manage group proceedings. As Orders made in these proceedings for the conduct of the multiplicity dispute demonstrate, the practices of the two Courts when managing class actions are, at the least, similar. As submitted by Mr Vingrys, it is commonplace for cases concerning the same subject matter and/or factual substratum to be litigated in different jurisdictions.

201 Both Courts have made soft class closure orders in the past when considered appropriate. Such orders are discretionary and are made as part of the case management of group proceedings. To the extent there may be differences in approach between the two Courts, that does not provide a basis for differentiation between the proposals for carriage.

202 As part of his consideration of whether to issue in the FCA or the SCV Mr Chuk sought to identify the number of class actions issued in 2020 and 2021 in the two Courts and to compare the number of cases in each jurisdiction that have resolved or are continuing toward trial. As Mr Chuk said in his affidavit, the data comparing class actions in the two jurisdictions has 'necessary limitations'. I agree. The sample size is very small. To compare cases in the two Courts with a view to drawing a conclusion about comparable degrees of expedition of class actions would require an understanding of the types of cases and whether or not the character and composition of the cases across the two Courts is similar. It would be necessary to drill down into the data. I do not think meaningful conclusions can be drawn from the data to which Mr Chuk referred about whether one Court is likely to progress the proceeding more quickly than the other. Consistent with the overarching purpose in s 7 of the CPA and s 37M of the FCA Act, litigants in both Courts are bound to move to a resolution of the dispute as efficiently as possible.

203 The Bain/Wyer applicants submitted that interest pursuant to s 51A of the FCA Act is more beneficial in this case than interest pursuant to s 60 of the SCV Act and that this is a material factor in favour of the Bain/Wyer applicants' proposal for carriage. Mr Vingrys does not agree.

204 The standard position pursuant to s 51A is that interest is awarded by the FCA from the completion of the cause of action up to judgment, including in respect of causes of action for damages the subject of these proceedings. In contrast, in the SCV pursuant to s 60 the standard position for damages claims is that interest only runs from the date of commencement of the proceedings.

205 There is no authority for the proposition that the statutory power in s 60 of the SCV Act extends to permitting the SCV to award interest from a date prior to the date of issue of the proceeding and nothing in the language of the section suggests that it does. As discussed during the hearing, to seek to capture interest for that period in the SCV would require a claim in the nature of that found in Hungerfords v Walker.[18]

206 While the standard starting date for awards of interest is not the same in the two jurisdictions, there is also a difference in the interest rate generally adopted under the different statutory provisions.

207 In the FCA, interest is generally awarded based on the Reserve Bank of Australia cash rate of +4%. In the SCV, interest is generally awarded in accordance with the Penalty Interest Rates Act 1983 (Vic). Historically the penalty interest rate has generally been higher than the RBA rate +4%. Currently, the RBA rate +4% is 8.35% and the penalty interest rate is 10%.

208 Given the dates of the conduct complained of, from as early as the 2018 financial year, and the confidential evidence of Mr Chuk concerning differential interest calculations under the different statutory regimes, I accept that if interest is applied to the claims by all group members, as might occur as part of settlement negotiations, that interest calculated in accordance with s 51A of the FCA Act to date is substantially greater than interest calculated in accordance with s 60 of the SCV Act.

209 The Bain/Wyer applicants submit that additional recoverable interest in the FCA will likely substantially exceed any benefit from a slightly lower GCO/CFO rates in the Vingrys proceeding. While I do not unreservedly accept the accuracy of that statement, as amongst other things it requires a consideration of the time from now until settlement or judgment, I accept that assessed as at the date of the hearing there are considerable benefits for group members from the interest provisions applicable in the FCA when compared with those applicable in the SCV.

210 The Bain/Wyer applicants submit risks associated with Mr Vingrys as a lead plaintiff mean the Bain/Wyer proceedings are the preferable vehicles for prosecuting the group member claims.

211 The submissions and evidence in relation to this topic were confidential from the defendants/respondents. It is sufficient to say that I consider there is substance to the proposition that there are risks associated with Mr Vingrys as the lead plaintiff. No risks have been identified or are submitted to apply in the case of the Bain/Wyer applicants.

212 Perhaps unusually, by reason of the confidential issues to which the submissions and the evidence refer, I regard the particular circumstances of the lead plaintiff, Mr Vingrys, as a factor that weighs against the Vingrys proceeding going forward and in favour of the competing Bain/Wyer proceeding.

213 The 4 June 2024 Order provided for a confidentiality regime enabling parties to claim confidentiality over parts of their evidence and submissions and ensuring that confidentiality was reserved until hearing and determination of the applications.

214 I propose to make a confidentiality order substantially in the terms of the draft order provided by the parties. I understand that Justice O'Bryan will make an order in relevantly identical terms in the FCA proceedings.

215 For the reasons previously discussed I will order the Vingrys proceeding be permanently stayed. It is in the best interests of group members that the Bain/Wyer proceeding go forward. The only factor that is in favour of the Vingrys proceeding is the potential return to group members due to the slightly lower percentage rate for which Banton Group proposes to contend. That is not a determining factor. When it is weighed against the other factors considered, each of which favour the Bain/Wyer proceeding in the interests of group members, the case for awarding carriage in favour of the Bain/Wyer proceeding is overwhelming.

216 The parties are agreed that the appropriate orders for costs are that the plaintiff or applicants whose proceeding is stayed bear their own costs and that the costs of the defendants to date be reserved as costs in whichever of the proceedings is permitted to continue.

217 I will make orders the plaintiff in the Vingrys proceeding bears his own costs of the proceeding.

[1] Maglio v Hino Motor Sales Australia Pty Ltd; McCoy v Hino Motors Ltd [2023] VSC 757, [65], followed in Edwards v Hyundai Motor Company Australia Pty Ltd; Sims v Kia Australia Pty Ltd (Ruling) [2024] VSC 301.

[2] (2019) 265 FCR 21; [2019] FCAFC 34 [2].

[3] (2019) 366 ALR 171; [2019] NSWCA 35 [14].

[4] Stallard v Treasury Wine Estates Limited Ltd and Napier v Treasury Wine Estates Ltd [2020] VSC 679 at [20]; Wileypark Pty Ltd v AMP Limited [2018] FCAFC 143; 265 FCR 1 at [15] and [18].

[5] Wigmans v AMP Ltd [2021] HCA 7; (2021) 270 CLR 623 at [109].

[6] Lay v Nuix Ltd [2022] VSC 479; (2022) 167 ACSR 27 at [19]; Klemweb Nominees (as trustee for the Klemweb Superannuation Fund) v BHP Group Limited [2019] FCAFC 107; (2019) 369 ALR 583 at [48], citing Perera v GetSwift Limited [2018] FCAFC 202; (2018) 263 FCR 92.

[7] Perera v GetSwift Ltd [2018] FCAFC 202; (2018) 263 FCR 92 at [274] (Middleton, Murphy and Beach JJ).

[8] Lay v Nuix Ltd [2022] VSC 479; (2022) 167 ACSR 27 at [19].

[9] Lidgett v Downer EDI [2023] VSC 574, [130]-[133] ('Downer EDI').

[10] [2022] VSC 424, [165].

[11] Klemweb Nominees (as trustee for the Klemweb Superannuation Fund) v BHP Group Limited [2019] FCAFC 107; (2019) 369 ALR 583 [85].

[12] [2022] VSC 750 at [96] ('Mumford').

[13] [2019] HCA 45; (2019) 269 CLR 574.

[14] Citing Elliott‑Carde v McDonalds Australia Ltd [2023] FCAFC 162; (2023) 301 FCR 1 at [170] (Beach J), [423] (Lee J), [504] (Colvin J); Galactic Seven Eleven Litigation Holdings LLC v Davaria [2024] FCAFC 54 at [32] (Murphy J), [136] (Lee J), [142] (Colvin J).

[15] [2024] FCAFC 89 ('R&B Investments').

[16] [2022] VSC 479; (2022) 167 ACSR 27.

[17] Lay v Nuix Ltd [2022] VSC 479; (2022) 167 ACSR 27 at [84(b)].

[18] [1989] HCA 8; (1989) 171 CLR 125 at 142-149 (Mason CJ and Wilson J).