FEDERAL COURT OF AUSTRALIA
Babscay Ptd Ltd v Pitcher Partners [2020] FCA 1610
File number: VID 1188 of 2017 Judgment of: ANASTASSIOU J Date of judgment: 5 November 2020 Catchwords: PRACTICE AND PROCEDURE – application for approval to discontinue representative proceeding commenced under Pt IVA of the Federal Court of Australia Act 1976 (Cth) – whether not unfair and not unreasonable for proceeding to be discontinued – practical effect of discontinuance to return group members to the position they were in before commencement of the proceeding – whether notice required to be given to group members of the approval of the discontinuance – discontinuance approved Legislation: Corporations Act 2001 (Cth), s 411
Federal Court of Australia Act 1976 (Cth), ss 33V, 33X, 33Y
Federal Court Rules 2011 (Cth), r 26.12
Cases cited: Caason Investments Pty Ltd v Cao (No 3) [2020] FCA 91
Davaria Pty Limited v 7-Eleven Stores Pty Ltd [2020] FCA 1234
Laine v Thiess Pty Ltd; Beetson v SunWater Limited [2016] VSC 689
Lopez v Star World Enterprises [1999] FCA 104
Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 450 NSWLR 543
Mercedes Holdings Pty Limited v Waters (No 1) [2010] FCA 124; 77 ACSR 265
Thirteenth Corp Pty Ltd v State [2006] FCA 979; 232 ALR 491
Wotton v State of Queensland [2009] FCA 758; 109 ALD 534
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 44 Date of hearing: 26 October 2020 Counsel for the Applicant: Mr W. A D Edwards and Mr D. J Fahey Solicitor for the Applicant: Maurice Blackburn Solicitor for the Intervener: Mr N. Evans of Aptum Legal ORDERS
VID 1188 of 2017 BETWEEN: BABSCAY PTY LTD
Applicant
AND: PITCHER PARTNERS
Respondent
AND BETWEEN: PITCHER PARTNERS
Cross-Claimant
AND: SLATER & GORDON LTD (and others named in the Schedule)
First Cross-Respondent
VANNIN CAPITAL OPERATIONS LTD
Intervener
ORDER MADE BY:
ANASTASSIOU J
DATE OF ORDER:
5 NOVEMBER 2020
THE COURT ORDERS THAT:
Approval of Discontinuance
1.The discontinuance of this proceeding be approved pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (Cth) and r 26.12(4) of the Federal Court Rules 2011 (Cth).
2.Leave be granted to the Applicant to discontinue the proceeding by filing a notice of discontinuance.
Confidentiality
3.Pursuant to ss 37AF and 37AG of the Act, until further order of the Court, in order to prevent prejudice to the proper administration of justice, the following parts of:
(a)the affidavit of Lee Scott Taylor affirmed 14 September 2020:
(i)Paragraphs 19 to 27 (including headings) and 29 to 33 (including headings); and
(ii)Annexures LT-1, LT-10 and LT-11; and
(b)the affidavit of Lee Scott Taylor affirmed 29 October 2020:
(i)the final sentence of paragraph 19; and
(ii)Annexure LT-20,
be treated as confidential, not be published or made available and not be disclosed to any person or entity except to the docket Judge, his or her personal staff, any officer of the Court authorised…
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- AGLC
- Babscay Pty Ltd v Pitcher Partners [2020] FCA 1610
- Case
- [2020] FCA 1610
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the court were whether it was fair and reasonable to discontinue the proceeding and whether notice should be given to the group members of the discontinuance. The court needed to consider the implications of discontinuance for the group members, particularly regarding their potential claims and the preservation of their rights.
The court found that discontinuing the proceeding would not be unfair or unreasonable, as it would return the group members to their pre-litigation position. The court also determined that the discontinuance would not adversely affect the group members' interests, as the proceeding was only partially overlapping with another proceeding that would continue. The court held that the effect of discontinuance would be to restore the status quo ante, meaning the group members would not lose any rights they had before the proceeding started. The court approved the discontinuance and granted the necessary orders, including confidentiality provisions to protect sensitive information.
The court's final orders included approval of the discontinuance of the proceeding, granting leave to the applicant to discontinue the proceeding by filing a notice of discontinuance, and imposing confidentiality orders on certain parts of the affidavits and annexures to prevent prejudice to the proper administration of justice. The court also clarified that the orders did not affect any rights of the applicant or group members to pursue their claims in another proceeding.
Orders
Orders of the court
Approval of Discontinuance
1. The discontinuance of this proceeding be approved pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (Cth) and r 26.12(4) of the Federal Court Rules 2011 (Cth).
2. Leave be granted to the Applicant to discontinue the proceeding by filing a notice of discontinuance.
Confidentiality
3. Pursuant to ss 37AF and 37AG of the Act, until further order of the Court, in order to prevent prejudice to the proper administration of justice, the following parts of:
(a) the affidavit of Lee Scott Taylor affirmed 14 September 2020:
(i) Paragraphs 19 to 27 (including headings) and 29 to 33 (including headings); and
(ii) Annexures LT-1, LT-10 and LT-11; and
(b) the affidavit of Lee Scott Taylor affirmed 29 October 2020:
(i) the final sentence of paragraph 19; and
(ii) Annexure LT-20,
be treated as confidential, not be published or made available and not be disclosed to any person or entity except to the docket Judge, his or her personal staff, any officer of the Court authorised by the docket Judge, the Applicant, its legal representatives, Vannin Capital Operations Ltd and its legal representatives, and such permitted disclosures to be upon terms that none of those parties or persons disclose that material or any part thereof to any person or entity.
THE COURT DECLARES THAT:
4. Orders 1 and 2 do not affect any rights of the Applicant or any group member in the proceeding to pursue the claims that are the subject of this proceeding in another proceeding.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
It follows that the question as to the fairness of the Babscay Pitchers Proceeding being discontinued is in substance only relevant to the WIP Issues and FY15 Acquisition Accounting Issues, given that the FY15 Goodwill Impairment Issue claims overlap entirely with, and will continue to be litigated in the Hall Pitchers Proceeding. Consideration The discontinuance of a representative proceeding requires the approval of this Court. In this respect, s 33V of the Act provides as follows:Settlement and discontinuance--representative proceeding(1) A representative proceeding may not be settled or discontinued without the approval of the Court.(2) If the Court gives such an approval, it may make such orders as are just with respect to the distribution of any money paid under a settlement or paid into the Court. The Court’s task in considering whether to approve the discontinuance of a representative proceeding has a different emphasis compared with the approval of a settlement. The different emphasis arises because the nature of the act requiring approval is quite different, with different legal consequences. The discontinuance of a proceeding in the strict sense is the unilateral act of the applicant. Leaving to one side the cost consequences, the discontinuance of the proceeding puts the applicant in the same position as if the proceeding had not been commenced, save for the effluxion of time in relation to any limitation period within which an action must be brought. In relation to representative proceedings, the qualification just mentioned does not apply to group members. In such circumstances, time for the purposes of a limitation period is suspended upon the commencement of a representative proceeding and does not run again for a group member unless the group member opts out under s 33J or the proceeding is determined without finally disposing of the group member’s claim: s 33ZE(1) of the Act. I shall refer to the significance of this protection further below. The legal effect of a unilateral discontinuance compared with a settlement agreement may be readily summarised as follows. In the case of a discontinuance, the applicant is free to commence a new proceeding against the same respondents if so advised. As there is no agreement by which the proceeding is compromised, there can be no merger of the applicant’s rights in the proceeding. Similarly, in the absence of any judicial determination, there can be no res judicata or issue estoppel: see, eg, Caason Investments Pty Ltd v Cao (No 3) [2020] FCA 91 at [132] (Murphy J); Thirteenth Corp Pty Ltd v State [2006] FCA 979; 232 ALR 491 at [33] (Jessup J); Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 450 NSWLR 543, 556-557 (Clarke JA). In contrast, where a settlement agreement has been reached it will be binding upon all group members who have not opted out of the representative proceeding pursuant to s 33J of the Act. Subject to Court approval under s 33V of the Act, the rights of the group members merge in the settlement agreement, or in the case of an accord executory, merge upon performance of the terms of the agreement. The legal consequences for group members of a settlement agreement are therefore more significant, as the agreement will operate to extinguish their rights in the proceeding and bar them from bringing later proceedings in relation to the same causes of action.