Vasram v AMP Life Limited

(iii) In 1992, CVPL ceased to be the respondent's agent and another agent was appointed with whom neither the applicant nor the group members were prepared to deal.

(iv) Although the amended statement of claim does not make this entirely clear, it appears that, as a consequence of not being prepared to deal with the new agent, the applicant and the group members did not pay the premiums to renew the policies and the policies lapsed or were forfeited by the respondent. It was agreed between the parties that both the applicant's policy and the policies of the group members (with the exception of three policies, which were not identified) had lapsed or had been forfeited at the latest by 22 June 1995.

(v) By letters dated 10 April 1995 and 14 June 1995, and before that orally, the applicant proposed to the respondent that the lapsed policies should be revived with another agent of the applicant's choice. Initially the respondent denied that this could be done but in subsequent correspondence, dated 22 June 1995 indicated that it would consider the issue. The applicant also claims that there was an earlier letter, dated 22 February 1993, to the same effect.

(vi) The applicant claims that it was a term of each of the policies that CVPL or an agent of the applicant's choice would remain the agent with whom the applicant (and each policyholder) would deal ("agent of choice term"). The terms of the policies were said to be contained in the policy documentation or implied by the "practices of the Agency arrangements between CVPL and the Respondent and the circumstances in which the Policy was entered into between the Parties".

(vii) Although the applicant claims that the 'agent of choice term' was common to all the policies, the significance of this appears to be that each policy contained a representation to this effect. The applicant does not base his claim on breach of contract but rather on misleading or deceptive conduct arising out of representations made by the respondent.

(viii) The applicant claims that the respondent's letters referred to in paragraph (v) and the respondent's subsequent silence gave rise to representations that there was some prospect that the agency with CVPL would be renewed. He claims that, but for the representations, the applicant and the group members would have paid the premiums on the policy and the policies would not have lapsed or been forfeited by the respondent.

The notice of motion 4 The respondent, by its notice of motion, sought orders that the proceedings no longer continue as a representative proceeding. Alternatively, the respondent sought orders and directions that: The following issues (the "Common Issues") be determined separately and preliminary to any other issues in the proceedings:-

(a) Whether (as alleged in paragraphs [sic] 3 of amended statement of claim) it was a term of the applicant's Policy or any of the other Policies that the policyholder would remain entitled to deal with CVPL as agent or alternatively with an agent of the policyholder's choice.

(b) Whether the applicant's Policy and each of the other Policies had lapsed and/or been forfeited on or before 31 May 1995 and/or 22 June 1995 (as alleged in paragraph 1 of the defence).

(c) Whether the applicant or any of the class members had any legal entitlement as against the respondent to re-instate the policies, or require consideration of re-instatement, after they had lapsed (as alleged in paragraph 1 of the defence).

(d) Whether the respondent made to the applicant the representations alleged in paragraphs 8 and 9 of amended statement of claim.

(e) Whether the making of the representations was misleading or deceptive within the meaning of s. 50 [sic] of the Trade Practices Act 1974.

(f) Whether the applicant suffered any recognised head of loss or damage as a result of the alleged misleading and deceptive conduct.

(g) Whether, in respect of any such loss or damage, the proceedings were brought within 3 years of when the cause of action accrued for the purposes of s. 82 of the Trade Practices Act 1974.

5 At the hearing of the motion the respondent abandoned the request to have the proceedings no longer continue as representative proceedings and the parties by agreement sought a variation of the orders and directions originally requested in the Notice of Motion. Briefly, the changes sought were based on an agreement between the parties as to the issues appropriate to be determined separately as common issues, as envisaged by s 33Q of the Act. 6 Irrespective of the agreement of the parties, the characterisation motion, of issues (a) to (g) as "Common Issues" caused me some concern. There seemed to me to be real doubts whether all or even any of these issues were common issues for the purposes of Pt IVA of the Act. The issue was clarified somewhat in the course of Mr Dempsey's argument on behalf of the respondent. Despite the words used in the notice of motion, it was submitted that only the issues in paragraphs (a) and (c) are common issues for the purposes of Pt IVA. Again, although the issue is more widely stated in the notice of motion, it became clear that the issue in (c) was intended to refer only to rights arising under the insurance policies and not the rights of the parties arising from the representations referred to in the subsequent paragraphs. 7 The remaining issues were admitted to be personal to the applicant (or in the case of (b) were excluded by agreement) and not common to the group members. Mr Ramrakha, for the applicant, also accepted this position. This admission raised a further concern that at trial the personal issues might swamp such limited common issues as might be found. This might suggest that the continuance of representative proceedings would be inefficient or otherwise inappropriate; Murphy v Overton Investments Pty Ltd [1999] FCA 1673 at [31]. 8 After the hearing, my associate by letter invited both parties to make further written submissions directed to identifying common issues of law or fact that would justify the proceedings continuing as representative proceedings. The parties' attention was directed to paragraph 4 of the amended statement of claim which refers to the terms and conditions as being contained not only in the "Members Guide and Life Insurance Policy" but also as being implied by the "practices of the Agency arrangements between CVPL and the Respondent and the circumstances in which the Policy was entered into between the Parties". In particular the parties were asked to address, how these issues could be common if the terms of the policies are to be implied by the circumstances, given that the policies were entered into at different times. Both parties made further written submissions but declined the opportunity to make further oral submissions on this point.

The requirements for representative proceedings 9 The respondent's notice moved the court to exercise its powers under s 33N and order that the proceeding not continue as a representative proceeding. However there is a preliminary issue which does not appear to have been appreciated. If there are no common issues then the proceeding is not properly commenced and is liable to be dismissed or the applicant's pleading struck out. The matter then is not one of the court's discretion under s 33N but of a failure to meet the threshold requirements of s 33C. This point was made by Sackville J in Philip Morris (Australia) Ltd v Nixon (2000) 170 ALR 487 at 514 who also stated (at 514-5) that: Since s 33C(1) is concerned with the commencement of the proceedings, compliance with its terms can be assessed only by reference to the case pleaded by the applicants (or set out in affidavit form if pleadings are not used). 10 The threshold requirements for representative proceedings, set out in s 33C(1) of the Act, were recently summarised by Moore J in King v GIO Australia Holdings Ltd [2000] FCA 617 at [30]: There is a clear requirement in s 33(1)(a) that the group members must have, if there is one respondent, a claim against that respondent. That is, each member must have a claim against that respondent. However it is equally clear that the claim, for the purposes of s 33C(1)(a), need not result in the same relief: s 33C(2)(a)(iv), need not be based on the same conduct of the respondent: s 33C(2)(b)(ii) and may arise out of different transactions with the respondent: s 33C(2)(b)(i). What the claims must have as unifying characteristics to permit their prosecution under Pt IVA is that they are founded in the same, similar or related circumstances: s 33C(1)(b) and give rise to a substantial common issue. The common issue can be either of fact or law: s 33C(1)(c). 11 There would appear to be sufficient similarity in the circumstances of the claims of the applicant and the members of the representative group to meet the requirement of s 33C(1)(b). It is also apparent that the requirement in s 33C(1)(a) is satisfied.

The substantial common issues 12 The real difficulty in this case is with the requirement that there be a "substantial common issue". As indicated above, the applicant now presses as a common issue the issue raised by paragraph 3 of the statement of claim as extended to all the relevant policies by paragraph 17. This is same issue as is identified in paragraph (a) of the respondent's notice of motion, namely that all the relevant policies included the 'agent of choice term'. In addition, at the hearing of the notice of motion, the applicant pressed paragraph (c) of the notice which refers to the right of the applicant and the group members to re-instate, or to require consideration of re-instatement of the policies after they had lapsed. This issue is not specifically pleaded in the statement of claim although it arises by inference at a number of points including paragraphs 9, 10, 12, 24, 25 and 28. 13 The 'substantial' element of the s 33C(1)(c) requirement is easier to meet since the decision of the High Court in Wong v Silkfield Pty Ltd (1999) 199 CLR 255 at 267-8, established that to be substantial the claim need only be real or of substance. It need not be the major or core issue and it is not necessary to show that litigation of the common issue would be likely to resolve the claims of all group members wholly or to any significant degree. On that basis I accept that paragraph 3 of the amended statement of claim, being the claim that the 'agent of choice term' was contained in each of the policies, raises a substantial issue. I also accept that the question of re-instatement raises a substantial issue. 14 However I have some difficulty is seeing how these issues can be common to all the group members given that the terms of the policies are said to be, in part, implied by the "practices of the Agency arrangements between CVPL and the Respondent and the circumstances in which the Policy was entered into between the Parties". If the terms or representations were to be implied then it would be necessary to consider the circumstances in which the policies were provided to each of the policyholders; Murphy v Overton Investments Pty Ltd [1999] FCA 1123 at [80]. If the allegation is based on express terms of the policies then it could be that there are common issues concerning the interpretation of those express terms. However it is unlikely that the claims are based on express terms. If this were the case, it would not have been necessary to refer to the terms arising by implication. 15 Unfortunately, the applicant's further submissions did not assist as they did not address the issue other than to assert that the policy in each case was the same and the evidence would establish this. As the question whether the proceeding is properly commenced must be determined on the pleadings, then neither the applicant's assertion that each policy is the same nor his reliance on evidence to resolve the problem is appropriate. Not surprisingly, the respondent adopted the expressed concerns with enthusiasm and reverted to its original position that the proceedings should not continue as representative proceedings.

Conclusion 16 As the above analysis makes clear the only possible substantial common issues on the pleadings involve the interpretation of the express terms of the policies. In order to get to this point some latitude must be given to the amended statement of claim. It may be that the better approach would have been to strike out the statement of claim. However, as the present amended statement of claim is the applicant's fourth attempt, I do not have any confidence that this would achieve anything. On balance, I think that the latitude is appropriate especially as the respondent has not challenged the amended statement of claim. 17 In Wong v Silkfield Pty Ltd (1999) 199 CLR 255 at 267, the High Court emphasised that proceedings that pass the threshold test of s 33C may later be terminated as representative proceedings by order made under s 33N. This was one reason the High Court was persuaded to adopt a less onerous construction of the term "substantial" than in the judgment appealed from. In this case the interpretation of the express terms of the policies is a small point, but in my view, a substantial one in that it is has substance and is not ephemeral or nominal. It raises a threshold question in the dispute between the parties. As the High Court has said (at 268), it is, "not to the point that, in the final resolution of the litigation, this might not prove to be the "major" or "core" issue. It was not necessary to show that litigation of this common issue would be likely to resolve wholly, or to any significant degree, the claims of all group members." 18 For these reasons I propose to give the applicant the benefit of the doubt on this point and make orders that the hearing fixed for 11 and 12 December be confined to the determination of the issues which I have identified as common. At this stage, I will not make any order under s 33N of the Act but anticipate that such an order may be appropriate after the hearing fixed for 11 and 12 December. I would also be prepared to accept submissions as to the appropriateness of an order under s 33N.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

Solicitor for the Respondent: Mallesons Stephen Jacques