BMW Australia Ltd v Brewster

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.