Abbott v Zoetis Australia Pty Ltd (No 2)

Link copied
Case Copied 38 min read

FEDERAL COURT OF AUSTRALIA

Abbott v Zoetis Australia Pty Ltd (No 2) [2019] FCA 462

File number: NSD 406 of 2018
Judge: LEE J
Date of judgment: 4 April 2019
Catchwords:

REPRESENTATIVE PROCEEDINGS – security for costs in open unfunded class action – principled approach to such applications and the central importance of context including the nature of the litigation – relevance of the characteristics of the group members, including the likelihood of them being willing to provide security – position of group members being entitled to take a passive role in litigation prior to common issues being determined – intrusive and expensive process proposed for interrogating group members prior to any opt-out – although power exists to award security an order should not be made in the exercise of discretion notwithstanding the consideration of prejudice to the respondent

Legislation:

Evidence Act 1995 (Cth) ss 43(1A), 140, 144

Federal Court of Australia Act 1976 (Cth) Pt IVA, ss 33E, 33J, 33ZB

Federal Court Rules 2011 (Cth)

Cases cited:

Acohs Pty Ltd v Ucorp Pty Ltd [2006] FCA 1279; (2006) 155 FCR 181

Australian Securities and Investments Commission v Richards [2013] FCAFC 89

Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1

Bray v F Hoffman-La Roche Ltd [2002] FCA 1405; (2003) ATPR 41-906

Bray v F Hoffmann-La Roche Ltd [2003] FCAFC 153; (2003) 130 FCR 317

Capic v Ford Motor Company (No 2) [2016] FCA 1178

Gill v Ethicon Sàrl (No 2) [2019] FCA 177

Kelly v Willmott Forests Ltd (in liq) [2012] FCA 1446; (2012) 300 ALR 675

Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1

Merribee Pastoral Industries Pty Limited v Australia and New Zealand Banking Group Limited [1998] HCA 41; (1998) 193 CLR 502

De Jong v Carnival PLC [2016] NSWSC 347

Morris v Hanley [2000] NSWSC 957

Regent Holdings Pty Ltd v State of Victoria [2012] VSCA 221; (2012) 36 VR 424

Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114

Australian Law Reform Commission, Grouped Proceedings in the Federal Court, Report 46 (Australian Government Publishing Service, 1998)

Commonwealth Hansard, Parliamentary Debates, House of Representatives, 26 November 1991, 3299

V Morabito and N Hatcher, Security for costs in unfunded federal class actions: back to the future (2018) 92 ALJ 105
Date of hearing: 14 March 2019
Date of last submissions: 20 March 2019
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Category: Catchwords
Number of paragraphs: 51
Counsel for the Applicant: Mr C Barry QC with Mr J Rowe
Solicitor for the Applicant: LHD Lawyers
Counsel for the Respondent: Mr L Gyles SC with Mr S Fitzpatrick
Solicitor for the Respondent: Piper Alderman

ORDERS

NSD 406 of 2018
BETWEEN:

RACHAEL ABBOTT

Applicant
AND:

ZOETIS AUSTRALIA PTY LTD

Respondent

JUDGE:

LEE J

DATE OF ORDER:

4 APRIL 2019

THE COURT ORDERS THAT:

1.The respondent’s interlocutory application…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Abbott v Zoetis Australia Pty Ltd (No 2) and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2019] FCA 462
Decision Date

CaseChat Overview and Summary

The case of Abbott v Zoetis Australia Pty Ltd (No 2) involved the applicant, Abbott, and the respondent, Zoetis Australia Pty Ltd, in a context of an open unfunded class action. The dispute centred on the respondent's application for security for costs in this representative proceeding, which was heard in the Federal Court of Australia. The application sought an order that the applicant provide security for the costs that the respondent may incur in relation to the proceeding.

The legal issues before the court involved the appropriate approach to be taken in determining whether security for costs should be granted in an open unfunded class action. The court had to consider the principles governing such applications, with a focus on the unique context of the litigation, including the nature of the class members and their likelihood of being willing to provide security. Additionally, the court needed to address the potential impact of the proposed process on the group members, who were entitled to take a passive role in the litigation until common issues were determined.

In delivering the judgment, the court emphasised the importance of a principled approach to such applications, highlighting that the characteristics of the group members and the intrusive nature of the proposed process were critical factors. The court noted that while it had the power to award security, the exercise of discretion should not lead to an order being made given the circumstances. The court considered that the proposed process was likely to be expensive and intrusive, potentially leading to the conclusion that the group members collectively had sufficient unencumbered assets. Consequently, the court dismissed the respondent's interlocutory application for security for costs.

The final orders of the court were that the respondent's application for security for costs be dismissed and that any application for costs in relation to the interlocutory application would be determined at the next case management hearing, where other issues such as finalisation of pleadings and the future progress of the proceeding would also be addressed.

Orders

Orders of the court

1. The respondent’s interlocutory application for security for costs be dismissed.

2. If an order for costs is sought in relation to the interlocutory application, then such an application is to be argued and determined at the next case management hearing.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Like Perram J in Capic, it seems to me, in the context of this open unfunded class action, given it is not apparent that there are likely to be substantial class members standing behind the applicant opportunistically, the sort of intrusive, expensive and detailed enquiry sought by the respondent directed to non-parties should not go ahead. Particularly, when I consider it likely that it will lead to no conclusion other than group members collectively have sufficient unencumbered assets of a combined value of well in excess of the amount of security sought. F CONCLUSION & ORDERS For the reasons I have explained, the appropriate course is to dismiss the whole of the interlocutory application. I have not heard from the parties in relation to the question of costs. If an order for costs is sought, then such an application can be advanced orally at the next case management hearing when issues including finalisation of the pleading issues and orders providing for the future of the interlocutory progress of the proceeding, can be determined.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.