Discretion
215 Even if, contrary to what has just been determined, the Court has the power to make Order 7, the circumstances of this case do not warrant the making of such an order. It is not an order which, at least at this early stage of the proceeding, can be considered to be appropriate or necessary to ensure that justice is done in the proceeding.
216 For the reasons already given, it may be accepted that it is at least reasonably arguable that some of the long stop limitation provisions that apply to defective building claims in the States and Territories other than Western Australia may apply to some potential contribution claims that 3A may have against third party professionals such as builders, architects, building consultants, and certifiers who provided services or advice in respect of the affixation of Alucobond panels to properties owned by group members. It may equally be accepted that, in those circumstances, there is at least some risk that some of the contribution claims that 3A may have available to it may become statute barred if 3A is not able to investigate and prosecute them in the relatively near future. 3A's proposed Order 7, in conjunction with the mandatory registration procedure, which required the group members to provide specified information and documents, was said by 3A to be necessary to eliminate that risk.
217 The difficulty for 3A is that it has not demonstrated that the risk of prejudice to it arising from the possibility of some contribution claims that might otherwise be available to it becoming statute barred is sufficiently great to outweigh the drastic and somewhat draconian effect that Order 7 might have for some group members. Nor has it shown that the making of Order 7 is the only means by which any risk of prejudice to it may be mitigated. In all the circumstances, the making of Order 7 at this early stage of the proceeding would be an unwarranted and disproportionate response to the risk of prejudice to 3A arising from the potential operation of some limitation periods in relation to some potential claims for contribution that it might otherwise have.
218 There could be little doubt that the making of an order which has the effect of "destroy[ing] a person's cause of action within the limitation period, without a hearing and with no guarantee that the person will necessarily know of the outcome or consequences of their failure to register" is a drastic measure: see Haselhurst (at [12] per Bell P). It would, as 3A effectively acknowledged, require a "compelling reason" to make such an order: see Brookfield at [17]. That is all the more so at this early stage of the proceeding. As Bromberg J said, when refusing to make a similar order at a similar early stage of the proceeding in Winterford v Pfizer Pty Ltd [2012] FCA 1199 at [9], to make such an order at that stage would "turn on its head the very nature of the opt-out model chosen by the legislature".
219 The risk of prejudice to 3A will be mitigated to a certain extent by orders which have the effect of requesting group members to register their interest in the proceeding and provide information and documentation about their buildings and the builders, architects, consultants, and certifiers who were relevantly involved in the design, construction, and certification of the buildings. For the reasons already given, it may be accepted that it is necessary or appropriate to make those orders. The effect of the making of those orders will be that 3A is put in a position whereby it can investigate any claims for contribution it may have in respect of each of the registered group member's claims. The question is whether it is necessary or appropriate to go one step further and effectively extinguish the rights of group members who, for whatever reason, do not register.
220 3A submitted, in effect, that it was necessary or appropriate to make such an order because, without it, there was nothing to prevent a group member who had not registered or provided the requested information and documents from coming forward at a very late stage of the proceeding, after the determination of the common questions and at a point where it is no longer possible for 3A to pursue any contribution claims in respect of any damage suffered by that group member. In 3A's submission, the prejudice it would suffer in those circumstances was, or would be, irreparable or irremediable.
221 The difficulty or weakness in 3A's contentions in that regard is that, at least at this stage of the proceeding, it is effectively impossible to gauge or determine the real extent of the risk of prejudice faced by 3A. While the risk cannot necessarily be excluded, it equally cannot said to be significant or substantial. Indeed, on one view at least, the risk may be fairly theoretical or remote. It would require the following events or circumstances to occur or exist: first, a group member failing or refusing to register in accordance with the terms of the notice; second, that group member later coming forward and seeking to pursue its claim or rights as a group member sometime after the judgment in respect of the common issues; third, 3A having available to it a viable contribution claim or claims in respect of any damage suffered by that group member; fourth, the contribution claim or claims that 3A may have in respect of that group member's claim being found to be subject to a relevant long stop limitation period; and fifth, that limitation period having expired at the time the group member comes forward. It cannot be said or predicted at this early stage of the proceeding that the combination and confluence of those events and circumstances is likely or probable. It is at best a possibility, perhaps even a remote one.
222 In any event, the risk to 3A of it suffering any such prejudice must be balanced against the risk that, if Order 7 is made, some group members may, perhaps through no fault of their own, be effectively deprived of their causes of action against 3A.
223 There is no sound basis to infer that a group member in a case such as this who received or became aware of a notice requesting them to register their claim, if they do not elect to opt out of the proceeding, would not either opt out or register their claim. It is difficult to imagine that any rational or reasonable person who received or became aware of the notice and who understood or believed that they were a group member would do nothing in response to it, unless perhaps they had no intention of ever pursuing any claim against 3A. That is particularly so given the nature of this case and the likely identity of most group members. Most group members' claims against 3A are likely to be significant and substantial and most group members are likely to be owners corporations, like Owners, or commercially sophisticated property owners.
224 It must also be accepted, in this context, that there is always a risk that any notice which is sent out or published may not be received by, or come to the attention of, all group members. That is particularly the case where, as here, the notice procedure proposed by 3A provides only for the placing of advertisements in major newspapers and the display of the notice on the website of the solicitors for Owners. There is also undoubtedly a risk that some group members who receive or become aware of the notice may not be aware at that time that they are a group member. As discussed earlier, there was evidence to suggest that some group members may not necessarily know that the cladding that is affixed to their property is relevantly Alucobond cladding and that, to determine if that is the case, it may be necessary to have a panel removed and inspected.
225 The available inference in those circumstances is that the only group members who would neither opt out nor register would be likely to be group members who did not receive or become aware of the notice, or who did not understand or appreciate that they were group members, or who for some other reason were unable to, or simply neglected to, complete the registration form within time. There perhaps may be some group members who would not register because they had no intention of ever pursuing any claim against 3A. That category of group members can perhaps be put to one side for present purposes. That is because it would appear to be rather unlikely that group members falling within that category would, at some time in the future, have a change of mind and come forward and seek to participate in the proceeding.
226 The critical question, in these circumstances, is whether the risk of prejudice to 3A is such as to warrant an order which effectively extinguishes or destroys the causes of action or the rights of group members who either did not receive or become aware of the notice, or who did not know or appreciate that they were group members at the time they received the notice. The answer to that question, at least at this stage of the proceedings, is that such an order is unwarranted and a somewhat disproportionate response to the risk of prejudice to 3A.
227 On the one hand, for the reasons already given, it cannot be concluded at this stage that the risk of prejudice to 3A is significant or substantial. Indeed, on one view at least, the risk may be considered to be fairly remote. It remains uncertain at this stage whether 3A will in fact have any viable claims for contribution that it will seek to prosecute, let alone that any such claims will be subject to a long stop limitation period which may expire in the near future. On the other hand, there could be little doubt that, if Order 7 is made, there is a real and significant risk that at least some group members may, through no fault of their own, be effectively deprived of valuable rights, perhaps without even knowing that to be the case.
228 It is true that Order 7, if made, would be an interlocutory order and would be able to be varied or revised. A group member who failed to register within the required time because the notice did not come to their attention, or because they did not appreciate that they were a group member, could in those circumstances apply to have Order 7 varied so as not to apply to them. That perhaps goes some way to ameliorate the potentially harsh or draconian operation of Order 7. It does not, however, assist group members who never become aware of the notice. It also shifts the onus back onto the non-registering group members, who would not only have to demonstrate why the order should be varied, but would also have to prove why they did not receive the notice or register within time. They would also no doubt have to prove that 3A would not be relevantly prejudiced by the variation of the order. That may not be an easy task. Shifting the onus onto the group member in these circumstances must also be considered in the context that the ordinary course is that a representative proceeding is an opt out proceeding, not an opt in proceeding.
229 It is equally true that the statutory scheme for representative proceedings envisages that group members who do not identify themselves may at some point be bound by a judgment or settlement in the proceeding, and effectively barred from taking any action against the respondent to the proceeding, even if they may be unaware of the proceeding. It does not follow, however, that the order in question in this case cannot be said to be harsh or draconian. As was pointed out in both Brewster and Haselhurst, the statutory scheme only permits that to occur at the successful completion of the action by way of settlement or judgment: Brewster at [73]; Haselhurst at [52]-[53]. That is fundamentally different to making an order like Order 7 at this early stage of the proceeding.
230 As Payne JA made clear in Haselhurst (at [129]) it is necessary, when considering whether to exercise the discretion to make an order like Order 7, to have regard to the interests of all group members and to ensure that "the interests of the non-party group members are not sacrificed to the interests of the parties before the Court": Capic v Ford Motor Company of Australia Ltd [2016] FCA 1020 at [19]. For the reasons given by Payne JA in relevantly similar circumstances in Haselhurst (at [129]), Order 7, by contingently extinguishing some group members' rights if they do not register at this early stage of the proceeding, clearly prioritises the interests of the respondents, 3A and Halifax, over a section of group members.
231 Order 7 is also not the only reasonable means by which to address the potential risk of prejudice to 3A at this early stage of the proceeding. As has already been made clear, it is appropriate or necessary to ensure justice is done in the proceeding to make an order the effect of which is to request, by notice, group members to register by a particular date and to provide, as part of the registration process, certain specified information and documentation. There is no sound reason to doubt that the majority of group members who receive that notice will, in due course, register their claims (assuming they do not opt out) and provide the requested information and documentation. That is so even if the request to register is not expressed in mandatory terms and there is no "sanction" in the form of Order 7.
232 The responses received in response to the envisaged registration notice will allow 3A to investigate and, if thought necessary and desirable, to prosecute any cross claims for contribution that are considered to be available. That will in turn considerably reduce the risk of any prejudice to 3A which may arise from the potential operation of any relevant long stop limitation periods that may apply to any of its contribution claims. It may not entirely exclude the risk that some unregistered group member may come forward at some later stage when any contribution claims that 3A might have in respect of that group member's claim may be subject to a limitation period. For the reasons already given, however, there is at this stage nothing to suggest that the risk of that occurring is anything more than remote or theoretical.
233 It is possible that the circumstances may change at some later point in this proceeding so as to justify an order similar to Order 7, assuming of course that the Court has the power to make such an order. It may, for example, be the case that at some later point 3A will be able to demonstrate that the risk of prejudice it faces as a result of available contribution claims becoming time barred is more significant or substantial than it is presently able to show. It may, for example, as a result of further investigations in conjunction with Halifax, be in a position to identify actual group members who have not registered or provided information or documentation in relation to their claims. It may also be able to point to specific or concrete examples of contribution claims it has in respect of those group members' claims which may become statute barred if cross claims are not filed. Whether that occurs, however, remains to be seen.
234 It follows from the above reasoning that 3A's submission that the class closure order was not a draconian or disproportionate response to the risk of it being deprived of a fair trial by losing its rights to cross claim against third parties must be rejected. It may be, and has been, accepted that there is a risk that 3A may be deprived of some possible or potential claims for contribution if it is not able to investigate and prosecute any such claims in the relatively near future. As has been explained, however, there is a significant degree of uncertainty as to whether 3A will ever in fact suffer any prejudice as a result of otherwise viable contribution claims being found to be statute barred. It must also be accepted that there is a degree of certainty that, if the class closure order proposed by 3A is made, some group members who have actual claims against 3A will be effectively deprived of the ability to prosecute their claims, possibly without ever knowing or appreciating that to be the case. There is, in all the circumstances, considerable merit in Owners' submission that the order proposed by 3A is disproportionate.
235 It should finally be noted that, even if it was considered to be necessary or appropriate to make an order like Order 7, it would also be appropriate to require the notification process to involve far more than simply placing advertisements in various newspapers, which is the form of notification proposed by 3A. It would also be appropriate to provide group members with a much longer period within which to register than the six week period proposed by 3A. These issues are discussed in more detail later in these reasons.