LEE J:
1 This matter has come before me this afternoon in somewhat unusual circumstances, which are necessary to recount in a little detail.
2 Five class actions have been commenced against the respondent (AMP). Four have been commenced in this Court, and one has been commenced in the Supreme Court of New South Wales.
3 The four Federal Court matters returned before the Court for a First Case Management Hearing (FCMH) before the docket judge, Middleton J, on 8 June 2018. This date was allocated in accordance with Class Actions Practice Note (GPN-CA) which provides (at [7.1]) that an "extended time [is] allowed prior to the first case management hearing" and that this "reflects the fact that class actions are often large and complex and the matters to be dealt with will require the parties to undertake a significant amount of case preparation" so that the parties can confer and comply with the requirements of the Practice Note including that they file a joint position paper in advance of the FCMH, listing the major points the parties anticipate raising and outlining their respective positions on these points. As the Practice Note makes clear, the FCMH is a significant fixture in the case management of complex proceedings and is not a directions hearing. Rather, the parties are usually asked to outline the issues and facts that appear to be in dispute and are required to be in a position to address substantively a range of matters specified in the Practice Note (see [7.8]).
4 Prior to the FCMH, applications for transfer of the four Federal Court proceedings to the Supreme Court of New South Wales had been made by AMP (Transfer Applications). The Supreme Court summons had already returned before that Court, in accordance with the usual procedures of the Commercial List of that court.
5 Following extensive discussion during the course of the FCMH of matters relating to the Transfer Applications, the docket judge made a series of case management orders including for the filing of affidavit material and submissions in relation to the Transfer Applications and fixing it for hearing in Sydney on 14 August 2018. I note this approach reflected the Practice Note which also provides (at [7.9]) that as part of the orderly case management of class actions before this Court, if interlocutory applications are raised at or before the FCMH, the "Court will fix dates as early as are practicable for the filing, service and return of any interlocutory application, and endeavour to deal with such applications on an expedited basis". As the transcript makes clear, that hearing date was regarded as the earliest practicable to accommodate an agreed timetable between the parties for evidence and written submissions and to suit the convenience of AMP. Although not then considered directly relevant to the issue of transfer, Middleton J was also aware of two pending applications for leave to appeal in this Court to be heard on an expedited basis in the August sittings which raised issues as to managing competing class actions (being the applications for leave to appeal brought from my judgment in Perera v GetSwift Limited [2018] FCA 732, which had been delivered on 23 May 2018). His Honour was conscious that if orders were to be made to deal with multiplicity issues, then this should be done after guidance had been provided by the Full Court as to the applicable principles.
6 It followed, as at 8 June 2018, the docket judge was seized with applications made before him which were to be determined in accordance with the usual processes of this Court as reflected in the Practice Note.
7 I have been informed this afternoon, what then occurred, for reasons that are not presently clear to me, was that two of the applicants in the Federal Court proceedings brought applications in the Supreme Court proceeding (as group members in that proceeding) for: first, a "standstill" of the Supreme Court proceeding; and secondly, for the transfer of the Supreme Court proceeding to the Federal Court. I am informed that the latter prayer for relief had been initially proposed by the group members with the stated intention that those applications be dealt with following the determination by Middleton J of the Transfer Application. In any event, it appears from the transcript that it is fair to say that the application for a temporary standstill of the Supreme Court proceeding, pending the hearing by Middleton J of the Transfer Application, did not find favour with the Court. As a consequence, the non-party transfer applications before the state court were joined in by the other Federal Court applicants (collectively, the State Transfer Applications) and notwithstanding the existing timetable and hearing set by Middleton J, what then occurred was that the State Transfer Applications were heard by Stevenson J on 28 June 2018 with further written submissions provided on 2, 3 and 4 July 2018. Stevenson J delivered judgment dismissing the State Transfer Applications on 9 July 2018: Wigmans v AMP Ltd [2018] NSWSC 1045.
8 After remarking (at [32]) that the Supreme Court proceeding is "at a more advanced stage than those in the Federal Court", and noting (at [38]) that the State Transfer Applications had "been "been brought on for hearing before this Court some five weeks before the hearing of AMP's corresponding application in the Federal Court", his Honour went on, at [40] and following, to make a number of presently relevant observations:
…acceding to the Federal Court applicants' transfer application is not the only means by which I could ensure all five matters are heard in the one court. There is always the possibility of an anti-suit injunction. I will return to this.
…
Anti-suit injunction?
Ms Wigmans sought, in the alternative, two forms of anti-suit injunction.
The first is an order restraining the Federal Court applicants from taking any further steps in the proceedings in the Federal Court other than discontinuing those proceedings.
The second is an order restraining the Federal Court applicants from taking any further steps in the Federal Court other than consenting to applying for an order under s 1337H to transfer the Federal Court proceedings to this Court.
I see no justification for granting an anti-suit injunction in terms of the first alternative. That would effectively cause the Federal Court proceedings to be brought to an end. Senior counsel for Ms Wigmans did not press this alternative with any enthusiasm.
The issue is whether an anti-suit injunction in the second alternative should be granted.
This Court has power to grant anti-suit relief by reason of its inherent power to protect the integrity of its processes once set in motion. It also has power, by virtue of its equitable jurisdiction, to enjoin a party from commencing or continuing proceedings in another court where the proceedings in the other court "are, according to the principles of equity, vexatious or oppressive" or where the bringing of those proceedings involves "unconscionable conduct or the unconscientious exercise of legal rights" (CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345 at 392).
The Federal Court applicants were entitled to commence proceedings in the Federal Court. There is no suggestion that this Court's jurisdiction to issue a anti-suit injunction arises merely by virtue of the fact that those proceedings were commenced: for example Smith v Australian Executor Trustees Ltd [2016] NSWSC 17 at [22] (Ball J).
But the position may be different if the Federal Court applicants maintain their determination to prosecute their proceedings in the Federal Court in the face of my refusal to accede to their application that these proceedings be transferred to that Court.
Byrne J considered such a circumstance in Santos Ltd v Helix Energy Services Pty Ltd [2009] VSC 282; (2009) 28 VR 595. In that case proceedings were pending in the Supreme Courts of Victoria and South Australia between the same parties arising from the same circumstances. Byrne J refused an application under s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) for an order transferring the Victorian proceedings to the Supreme Court of South Australia.
His Honour said:
"Accordingly, in a case where there are two competing proceedings in two jurisdictions within the cross-vesting regime and a judge in one jurisdiction refuses to transfer the local proceeding because, in the interests of justice, the local court is seen as more appropriate, it would not be unreasonable for the judge to make inquiry of the parties seeking an assurance or an undertaking that they would agree to a stay or at least to take no further step in the other proceeding. If there was any risk that this course would not be taken, it would be but a consequence of the decision not to transfer, that there be granted an anti-suit injunction in order to ensure that this decision was given effect to."
I propose to adopt a similar course and invite the Federal Court applicants to consider whether they will now agree that the four Federal Court proceedings be transferred to this Court and to inform me, and the other parties, of their decision by 5.00 pm on 16 July 2018. If they do not, I will consider whether to grant an anti-suit injunction in the terms of the second alternative sought by Ms Wigmans.
In those circumstances, the parties should bear in mind the following observation of Byrne J in Santos:
"The granting of an anti-suit injunction should then be seen, not as an intrusion upon the processes of the other court, nor as a reflection upon the competence of the other court, nor as any criticism of the other court for accepting the other proceeding or for progressing it. Rather, it is but a practical order made in aid of the underlying decision made under the cross-vesting legislation as to which court is more appropriate."
Common sense should prevail.
9 I pause to note that Santos Ltd v Helix Energy Services Pty Ltd was a case where a plaintiff in Victorian proceedings had sought relief restraining a defendant from taking any step in a South Australian proceeding and the defendant, in turn, had sought an order in the Victorian Court pursuant to the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic), transferring the Victorian proceeding to the Supreme Court of South Australia. It was not a case where an application had been made for transfer by non-parties in one court, in circumstances where the other court was already seized with transfer applications, had made orders to facilitate their disposition, and had already listed a hearing date. Nor was it a case where the making substantive orders in the other proceeding had been deferred to allow the other court to receive assistance from a Full Court as to issues which were thought to be germane to the progression of the proceedings.
10 Following it becoming apparent to the Federal Court that an application may be pursued by a non-party (being Ms Wigmans, the plaintiff in the Supreme Court proceeding) to enjoin litigants in this Court from acting in accordance with existing orders of this Court and from participating actively in the current hearing fixed by Middleton J, it was determined by the Acting Chief Justice, in consultation with the Chief Justice, that it was appropriate for the proceedings in this Court to be listed for an urgent case management hearing to determine if any steps needed to be taken to protect the processes of this Court. Middleton J is currently on leave and it was in this circumstance that the proceedings have been listed before me.
11 In Perera v GetSwift Limited I recently considered, at some length, the peculiar case management considerations that attend competing class actions and the history and complexities of the rise of this phenomenon. Two of the matters I have referred to in this context may appear to have at least some potential relevance (at least to the extent of highlighting that the problem now presented is one which may recur absent legislative change).
12 The first, was the notion of what I described as procedural arbitrage. That is, having traced the rise of collateral disputation between litigants in federal and state courts in the United States of America concerning securities class actions, I said, at [371] to [376], the following:
One thing that should be evident from my survey of the history of funded securities class actions is the commercial sophistication of the promotors of such litigation and the flexibility of those promotors in driving and adapting to changes in the procedure by which class actions are governed.
In Section D.2 above, I referred to the attempts by plaintiff lawyers to circumvent reforms in federal courts in the United States as to the conduct of securities class actions, by adopting the expedient of commencing securities proceedings in state courts. As I have explained, this has caused very significant, ongoing collateral disputation.
Developing and adapting procedure and maintaining control over securities class actions in Australia has not been beset with any similar difficulty to date, because the vast bulk of securities class actions have been commenced in the Federal Court and, when on rare occasions they have been commenced in the Supreme Court of Victoria and created multiplicity, cross-vesting orders have allowed securities class actions elsewhere to be linked up to other proceedings in this Court.
It has been possible to ensure the competing GetSwift class actions were case managed together and for the issue of competing class actions to be resolved with alacrity with the active and commendable cooperation of all participants. It would be naïve, however, not to recognise that the possibility of a stay will not cause disquiet among those who may, in another matter, contemplate promoting a future competing securities class action. No doubt other steps taken by this Court to maximise the return to group members in settlements by controlling legal, funding and other costs, might also be thought as inimical to the interests of those who stand to make a return from these common enterprises.
In finance, arbitraging, in general terms, refers to the practice of taking advantage of price differences and capitalising upon the imbalance between markets. As a result of the autochtonous expedient (in this case reflected in Part 9.6A of the Corporations Act) of allowing class actions seeking relief for a breach of a Commonwealth statute to be commenced in a number of State courts with class action regimes, the theoretical possibility of some form of procedural 'arbitrage' exists.
The promotors of class actions can, at least initially, exercise a choice of forum and it should come as no surprise that the response to one court taking active steps to exercise discipline and control over securities class actions (and competing actions in particular), may be for decisions to be made which represent an attempt to obtain an advantage by commencing securities class actions in the same matter in different courts. One result of this would be to increase overall costs and make case management and a speedy comparative analysis to be undertaken, more problematical. For a variety of reasons, such a development would be highly undesirable and, like in the past, remedial responses will no doubt have to be fashioned consistent with the provisions of the cross vesting legislation, considerations as to comity and the need to avoid multiplicity…
13 Secondly, after pointing to the necessity for the Court to control its own processes in relation to competing class actions, I also canvassed in some detail the notion that equity may have a role to play in protecting the processes of the Court and (at [164]), in raising the prospect that multiplicity could arise in ways other than when two or more competing proceedings had been commenced and were before the same court, I said as follows:
Assume that after the determination of this application, when an open class representative proceeding in respect of which a common fund order had been approved was before the Court, that the applicant became apprised of the intention of a promotor to commence another open class proceeding in this Court or another court exercising federal jurisdiction. Without prejudging any application, it is not clear to me why, in those circumstances, it is not arguable that the necessary equity existed to prevent the commencement of the duplicative proceeding so as to avoid multiplicity and to protect the integrity of the Court's processes once set in motion. It may, of course, be necessary to consider in future cases whether it would be appropriate to intervene in other circumstances, although it may be noted that if proceedings were in two courts, additional considerations may intrude in the granting of equitable relief including the comity and constitutional issues similar to those discussed in Beecham (Australia) Pty Ltd v Rogue Pty Ltd (1987) 11 NSWLR 1 and the statutory overlay of the cross-vesting legislation.
(emphasis in the original)
14 The orders of Stevenson J require the applicants in this Court to indicate to his Honour by Monday, 16 July 2018 as to whether they consent to the transfer of the four Federal Court proceedings to the Supreme Court. Failing this course, it is not in dispute before me that there is a prospect of his Honour determining an application for an anti-suit injunction prior to the docket judge, Middleton J, having the opportunity to hear or determine the existing Transfer Applications in accordance with the process his Honour, after detailed consideration at the FCMH, put in train. Indeed, as I understand the position communicated this afternoon by the parties before me, his Honour has received all the evidence and submissions from all parties in relation to the proposed anti-suit injunction.
15 The prospect of one court exercising federal jurisdiction enjoining parties in another court exercising federal jurisdiction in respect of the same matter (to use that word in its constitutional sense) and thereby prevent those parties complying with orders that have been made by this Court after detailed submissions raises, at least potentially, novel issues. In saying this, I am conscious that constitutional considerations dictate that only in the rarest circumstances should a party within the jurisdiction of one state of Australia be restrained from continuing proceedings in another superior court in Australia (see Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (5th ed, LexisNexis Butterworths, 2015) at [21-165]). At present, the situation has not been reached (and may never be reached) which was considered by the Full Court in Pegasus Leasing Ltd v Cadoroll Pty Ltd (1996) 59 FCR 152, where each court has declined to transfer the proceedings before it to the other Court. Middleton J has not had the opportunity of considering the Transfer Applications. It should be noted, moreover, that if an anti-suit injunction was made prior to his Honour doing so, in the terms proposed in Wigmans at [46] ("an order restraining the Federal Court applicants from taking any further steps in the Federal Court other than consenting to applying for an order under s 1337H to transfer the Federal Court proceedings to this Court"), it was common ground before me that this would prevent oral or written submissions subsequently being made by the four applicants in this Court to Middleton J on the principled exercise of his Honour's discretion on the Transfer Applications.
16 At present, it is unknown as to whether the issue relating to transfer will involve proposed consent orders (although Mr Donnellan indicated today that his client, Komlotex Pty Ltd, did not presently propose to provide its consent and seeks the opportunity of putting submissions to Middleton J in relation to the transfer of the proceeding it commenced). As his Honour's reasons in Wigmans recognise, even if (as now seems unlikely) all Federal Court applicants were to consent to transfer, it would still be necessary for this matter to come before Middleton J for any orders to be made effecting the transfer of the existing Federal Court proceedings to the Supreme Court and for his Honour to consider whether such consent orders should be made in the exercise of his discretion.
17 Notwithstanding his Honour's invitation in Wigmans at [54], in the light of what all parties agree is a prospect of an anti-suit injunction being made, it is necessary for this Court to give consideration as to whether the subject matter of the Transfer Applications needs to be protected, so as to vindicate the authority and processes of this Court, pending the applications coming before the docket judge in accordance with the existing orders of this Court and being dealt with following submissions by all interested parties and on the basis of the circumstances then existing (including the existence of the orders now made by Stevenson J on 9 July 2018).
18 To this end I have indicated to the parties that if any application is to be made to preserve the status quo of the Transfer Applications being dealt with by Middleton J in accordance with his Honour's orders (as foreshadowed by Mr Donnellan), it may be appropriate for any such application to be heard and determined at short notice. Moreover, given its novelty and perceived importance for this Court, arrangements are likely to be required to allow any such application, to be referred to a Full Court (and provide for the Full Court to exercise original jurisdiction in relation to any such application or applications). Given any such application is likely to involve relief being sought against a third party by separate originating application, it may also be necessary to deal with issues as to short service.
19 In all the circumstances, pending the return of Middleton J, it is appropriate to direct the Federal Court applicants to inform the Court by 4.00 pm on 13 July 2018 (via my Associate, copied to the Associate to the Acting Chief Justice), as to whether any application is proposed to be made to preserve the status quo pending the current hearing of the Transfer Applications as ordered. The parties will then be informed as to whether a direction pursuant to s 20(1A) of the Federal Court of Australia Act 1976 (Cth) is to be made and as to any listing arrangements before a Full Court.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee.