Williams & Kersten Pty Ltd v National Australia Bank Limited

LEE J: 1 The danger of generalising as to practice and procedure decisions in class actions is fraught with difficulty. As Nettle, Redlich and Osborn JJA observed in Regent Holdings Proprietary Limited v State of Victoria [2012] VSCA 221; (2012) 36 VR 424 (at 429 [19]) (which was a case involving an application for leave to appeal from an order being made by a primary judge requiring the provision of information from group members in advance of a mediation), care must be taken to: … avoid reading judgments on fact specific interlocutory issues of practice and procedure as if they were determinative of precepts and principles of general application. 2 This is an application by the respondent (NAB) for class-closure orders in an open-class representative proceeding sought in advance of a court-ordered mediation. 3 The mediation, pursuant to Order 10 of the Orders dated 1 August 2024, was anticipated to be completed by 22 November 2024. 4 Much more than other classes of cases, experience teaches that the resolution of class actions often creates complications. In particular, one of those frequent complications is that there may be a degree of uncertainty about claims being made by group members, some of whom may, at the time of the mediation, not even be aware that their claim against the respondent is the subject of litigation; let alone a mediation and notwithstanding the provision of opt out notices pursuant to s 33J of the Federal Court of Australia Act 1976 (Cth) (FCA Act). 5 A mediation is not properly regarded as a "date" or a "fixture" - it is a process. This is not the most complex of class actions, nor is it a particularly large class action, but in most class actions, it will be appropriate for the Court to bear in mind, particularly in the early stages of the case, the necessity not only to facilitate a process whereby the controversy may be quelled by curial determination, but also to facilitate the optimal date upon which mediation can occur and to ensure the parties can engage in a process which optimises the possibility of settlement. 6 After all, the early resolution of proceedings is one of the case management objectives enshrined in Pt VB of the FCA Act. It is common ground between the parties, as must be the case, that there is ample power in this Court to order class closure to facilitate a mediation (in contrast to the position that operates under the state class action regime in New South Wales: see David William Pallas & Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund v Lendlease Corporation Ltd [2024] NSWCA 83). 7 The fact that when it comes to class closure in this Court, that "one size does not fit all", is amply demonstrated by the different outcomes of similar applications in different class actions heard by two highly experiences judges in class actions in the course of this year. 8 In J Wisbey & Associates Pty Ltd v UBS AG (No 2) [2024] FCA 147, Beach J dealt with a case in which closure was opposed by the applicant, but given the number of potential group members; the value of transactions that are the subject of the proceedings; the value of the claims of potential group members; and the likely participation rate of group members, the diminished likelihood of settlement, that in all those circumstances, a class closure order was warranted in order to ensure that the mediation was as useful and effective as practicable (at [76], [81]). 9 In another case, Alford v AMP Superannuation Limited (No 2) [2024] FCA 423, Murphy J (at [57]-[69]) set out, in some detail, the approaches taken in this Court and others about what might be described as "forced class closure". His Honour concluded that judgment by noting that although the attitude of the parties is a material consideration in deciding whether to make a class closure order, it is not determinative and whether an order is appropriate or necessary in the circumstances of the case is a matter for the Court (at [65], [69]). What is also evident from his Honour's analysis, which accords with my experience, is that in the great majority of cases in which class closure orders have been made, the orders were made by consent of the parties or were unopposed (see Alford (No 2) (at [65])). 10 In this case, leading counsel for the applicants, Mr Edwards KC, is conscious that the solicitor for NAB, Mr McCarthy, has given evidence as to his opinion that he considers that information contained in various liquidator's schedules (currently in the possession of both parties) does not provide a viable basis upon which NAB can assess the quantum of group members' claims, including any potential aggregate damages claim. 11 In response, Mr Edwards has indicated that there is a preliminary conference before a highly experienced former judge acting as mediator, the Honourable Michael Sifris KC, next week. There is currently a mediation conference set to occur with the presence of both parties on 23 October 2024 (which allows sufficient time for the mediation process to be completed by 22 November 2024 in accordance with the Orders dated 1 August 2024). 12 No doubt, at that preliminary conference, there will be discussion about the methodology of quantifying the claims of group members, including any foreshadowed expert consideration of data using the liquidator's schedules and such other material that is available to the applicants to provide what they contend is a sufficiently reliable indication of the quantum of the claim of group members. 13 I am not a soothsayer. This material will either be sufficient to allow for a settlement to take place, or it will be insufficient. It is not only in both parties' interests, but each of the legal representatives of the parties has a positive duty to assist their clients to conduct negotiations concerning settlement in a way that facilitates the overarching purpose in Pt VB of the FCA Act. Both the solicitors and the barristers for each party must conduct any settlement negotiations on the party's behalf, taking account of this duty and assisting their clients to comply with it: s 37N of the FCA Act. 14 In the light of the expertise and experience of the legal representatives acting for both parties, I have every confidence that this duty will guide those involved in this matter in the conduct of any settlement negotiations; both before the mediator and in any subsequent discussions. It may be that both parties come to a joint realisation that further information is required by group members, or that the attitude of NAB has shifted in relation to the issue of class closure. 15 That bridge will be crossed if and when necessary, but at present, I am not satisfied that it is an appropriate exercise of the Court's discretion to order class closure against the express wishes of those acting for the applicants. In reaching this view, I have had regard not only to the remarks of Beach J in J Wisbey and Murphy J in Alford (No 2) (and the cases cited therein), but also all of the helpful submissions provided on behalf of NAB. I have indicated to the parties that if there is a need to relist the proceeding in order for either party to seek further or different orders at short notice, they may contact my Associate. 16 Finally, I am told by Mr Edwards that the decision I make in relation to this issue of principle is likely to resolve the issues between the parties as to competing opt out notices. Accordingly, I will direct that in the light of these reasons, a further version of the proposed opt out notice be provided to the Court. Once that occurs, I will make the necessary orders in Chambers. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee.

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