BMW Australia Ltd v Brewster

Case [2019] HCA 45

HIGH COURT OF AUSTRALIA

KIEFEL CJ,
BELL, GAGELER, KEANE, NETTLE, GORDON AND EDELMAN JJ

Matter No S152/2019

BMW AUSTRALIA LTD  APPELLANT

AND

OWEN BREWSTER & ANOR  RESPONDENTS

Matter No S154/2019

WESTPAC BANKING CORPORATION & ANOR  APPELLANTS

AND

GREGORY JOHN LENTHALL & ORS  RESPONDENTS

BMW Australia Ltd v Brewster
Westpac Banking Corporation v Lenthall

[2019] HCA 45

Date of Hearing: 13 & 14 August 2019
Date of Judgment: 4 December 2019

S152/2019 & S154/2019

ORDER

Matter No S152/2019

1.Appeal allowed.

2.Set aside the orders made by the Court of Appeal of the Supreme Court of New South Wales on 1 March 2019 and 22 March 2019 and, in their place, order that:

(a)the question stated for separate determination be answered: "No"; and

(b)the first respondent pay the applicant's costs of the application for, and the hearing of, the separate question.

3.The first respondent pay the appellant's costs of the appeal to this Court.

Matter No S154/2019

1.Appeal allowed.

2.Set aside orders 3 and 4 made by the Full Court of the Federal Court of Australia on 1 March 2019 and, in their place, order that:

(a)the appeal be allowed;

(b)orders 1 and 2 made by Lee J on 28 September 2018 be set aside and, in their place, the application for a common fund order be dismissed with costs; and

(c)the respondents pay the appellants' costs of the appeal.

3.The respondents pay the appellants' costs of the appeal to this Court.

On appeal from the Supreme Court of New South Wales (S152/2019) and the Federal Court of Australia (S154/2019)

Representation

J K Kirk SC with T O Prince for the appellant in S152/2019 (instructed by Ashurst Australia)

J C Sheahan QC with E Holmes and R Mansted for the first respondent in S152/2019 (instructed by Quinn Emanuel Urquhart & Sullivan)

Submitting appearance for the second respondent in S152/2019

A Leopold SC and S J Free SC with C G Winnett for the appellants in S154/2019 (instructed by Allens)

J T Gleeson SC with W A D Edwards and Z C Heger for the first to fourth respondents in S154/2019 (instructed by Shine Lawyers)

N C Hutley SC with B K Lim and S K Tame for the fifth respondent in S154/2019 (instructed by Roberts & Partners Lawyers)

S B Lloyd SC with D P Hume and K N Pham for the Attorney-General of the Commonwealth, intervening in both matters (instructed by Australian Government Solicitor)

K L Walker QC, Solicitor-General for the State of Victoria, with M A Hosking for the Attorney-General for the State of Victoria, intervening in both matters (instructed by Victorian Government Solicitor)

J A Thomson SC, Solicitor-General for the State of Western Australia, with E J Cavanagh and B J Tomasi for the Attorney-General for the State of Western Australia, intervening in both matters (instructed by State Solicitor's Office (WA))

G A Thompson QC, Solicitor-General of the State of Queensland, with F J Nagorcka for the Attorney-General…

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AGLC
BMW Australia Ltd v Brewster [2019] HCA 45
Case
[2019] HCA 45
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered appeals from the Supreme Court of New South Wales and the Federal Court of Australia concerning the power of those courts to make common fund orders in representative proceedings. The proceedings involved class actions funded by litigation funders, who had entered into funding agreements with a subset of group members. The representative parties in each proceeding sought common fund orders, which would require all group members to contribute to the litigation funding costs.

The central legal issue before the High Court was whether sections 33ZF of the *Federal Court of Australia Act 1976* (Cth) and 183 of the *Civil Procedure Act 2005* (NSW) empowered the Federal Court and the Supreme Court of New South Wales, respectively, to make common fund orders. These sections grant the courts broad powers to make any order that is appropriate or necessary to ensure that justice is done in a representative proceeding.

The High Court reasoned that the textual and contextual considerations of sections 33ZF and 183, when viewed together with their purpose, indicated that these provisions did not confer the power to make common fund orders. The Court found that the focus of the statutory power was on ensuring that justice was done *in* the proceeding, meaning the effective determination of issues between the parties. Making an order to ensure the commercial viability of the proceeding for a litigation funder, rather than to advance the resolution of disputes between the parties, was outside the scope of the conferred power. The Court noted that the text of the provisions assumed that an issue had arisen in a pending proceeding and that the order sought would advance its resolution, which was not the case for common fund orders.

The High Court allowed the appeals, setting aside the orders of the lower courts that had granted common fund orders. In place of those orders, the High Court directed that the question of whether the relevant sections empowered the making of common fund orders be answered in the negative. The respondents were ordered to pay the appellants' costs of the appeals.

Orders

Orders of the court

Matter No S152/2019

1. Appeal allowed.

2. Set aside the orders made by the Court of Appeal of the Supreme Court of New South Wales on 1 March 2019 and 22 March 2019 and, in their place, order that:

(a) the question stated for separate determination be answered: "No"; and

(b) the first respondent pay the applicant's costs of the application for, and the hearing of, the separate question.

3. The first respondent pay the appellant's costs of the appeal to this Court.

Matter No S154/2019

1. Appeal allowed.

2. Set aside orders 3 and 4 made by the Full Court of the Federal Court of Australia on 1 March 2019 and, in their place, order that:

(a) the appeal be allowed;

(b) orders 1 and 2 made by Lee J on 28 September 2018 be set aside and, in their place, the application for a common fund order be dismissed with costs; and

(c) the respondents pay the appellants' costs of the appeal.

3. The respondents pay the appellants' costs of the appeal to this Court.

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

KIEFEL CJ, BELL AND KEANE JJ GAGELER J
The same point may be made in relation to s 33Z of the FCA (which is to the same effect as s 177 of the CPA, save that s 33Z(1)(g) has no equivalent in s 177(1)). Section 33Z provides: "Judgment – powers of the Court(1)The Court may, in determining a matter in a representative proceeding, do any one or more of the following:(a)determine an issue of law;(b)determine an issue of fact;(c)make a declaration of liability;(d)grant any equitable relief;(e)make an award of damages for group members, sub-group members or individual group members, being damages consisting of specified amounts or amounts worked out in such manner as the Court specifies;(f)award damages in an aggregate amount without specifying amounts awarded in respect of individual group members;(g)make such other order as the Court thinks just.(2)In making an order for an award of damages, the Court must make provision for the payment or distribution of the money to the group members entitled.(3)Subject to section 33V, the Court is not to make an award of damages under paragraph (1)(f) unless a reasonably accurate assessment can be made of the total amount to which group members will be entitled under the judgment.(4)Where the Court has made an order for the award of damages, the Court may give such directions (if any) as it thinks just in relation to:(a)the manner in which a group member is to establish his or her entitlement to share in the damages; and(b)the manner in which any dispute regarding the entitlement of a group member to share in the damages is to be determined." Similarly, s 33ZA of the FCA (which is in materially identical terms to s 178 of the CPA) provides:"Constitution etc of fund(1)Without limiting the operation of subsection 33Z(2), in making provision for the distribution of money to group members, the Court may provide for:(a)the constitution and administration of a fund consisting of the money to be distributed; and(b)either:(i)the payment by the respondent of a fixed sum of money into the fund; or(ii)the payment by the respondent into the fund of such instalments, on such terms, as the Court directs to meet the claims of group members; and(c)entitlements to interest earned on the money in the fund.(2)The costs of administering a fund are to be borne by the fund, or by the respondent in the representative proceeding, as the Court directs.(3)Where the Court orders the constitution of a fund mentioned in subsection (1), the order must:(a)require notice to be given to group members in such manner as is specified in the order; and(b)specify the manner in which a group member is to make a claim for payment out of the fund and establish his or her entitlement to the payment; and(c)specify a day (which is 6 months or more after the day on which the order is made) on or before which the group members are to make a claim for payment out of the fund; and(d)make provision in relation to the day before which the fund is to be distributed to group members who have established an entitlement to be paid out of the fund.(4)The Court may allow a group member to make a claim after the day fixed under paragraph (3)(c) if:(a)the fund has not already been fully distributed; and(b)it is just to do so.(5)On application by the respondent in the representative proceeding after the day fixed under paragraph (3)(d), the Court may make such orders as are just for the payment from the fund to the respondent of the money remaining in the fund."

Ratio Decidendi

Legal Principle Established

Established by: KIEFEL CJ, BELL AND KEANE JJ, GAGELER J

In the resolution of this issue, textual and contextual considerations must be addressed together with considerations of purpose[63]. These considerations all point to the conclusion that ss 33ZF and 183 do not empower the making of a CFO. That conclusion can be reached without reliance upon any implication to narrow the scope of their operation, whether by reference to the principle of legality or otherwise. Nor is it dependent upon acceptance of the appellants' attempt to invoke the approach to construction for which Anthony Hordern stands as authority. Nor is it necessary to accept that the task of ensuring "that justice is done in the proceeding" is confined to the resolution of the substantive issues in dispute between the parties.[63]SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at 374‑375 [35]‑[39]. Textual considerations The orders contemplated by s 33ZF and s 183 are orders which may be thought to make certain that justice is done in the proceeding. An order the purpose of which is to ensure that the proceeding is able to go forward is not such an order. As was said by Wigney J in Blairgowrie Trading Ltd v Allco Finance Group Ltd[64]: "the only real rationale for making the order at this stage is to ensure the commercial viability of the proceeding from the perspective of the litigation funder. That has nothing to do with ensuring that justice is done in the proceeding."[64](2015) 325 ALR 539 at 565 [135]. The focus of the power conferred on the court by the text is upon ensuring, that is, making certain by the order, that justice is done in the proceeding as between the parties to it. As a matter of the ordinary and natural meaning of these words, they authorise an order apt to advance the effective determination by the court of the issues between the parties to the proceeding. Whether or not a potential funder of the claimants may be given sufficient financial inducement to support the proceeding is outside the concern to which the text is addressed. The text of each of s 33ZF and s 183 assumes that an issue has arisen in a pending proceeding between the parties to it, and that the proceeding will be advanced towards a just and effective resolution by the order sought from the court. The construction of ss 33ZF and 183 for which the respondents contend departs from this assumption. The making of a CFO does not assist in determining any issue in dispute between the parties to the proceeding; it does not assist in preserving the subject matter of the dispute, or in ensuring the efficacy of any judgment which might ultimately be made as between the parties; it does not assist in the management of the proceeding in order to bring it to a resolution. Nor does it assist in doing justice between group members in relation to the costs of litigation. Court approval of arrangements with a non‑party in order to enable a proceeding to be pursued at all could only be said to be appropriate or necessary to ensure that justice is done between the parties to the proceeding if one were to assume that maintaining litigation, whatever its ultimate merit or lack thereof, is itself doing justice to the parties. That would be to make an assumption about process for its own sake rather than the outcome of the process. Such an assumption cannot be attributed to the legislature having regard to the text of ss 33ZF and 183.