Bogan v The Estate of Peter John Smedley (Deceased)

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0025

ANTHONY BOGAN & ANOR	Applicants
(according to the attached Schedule)
v
THE ESTATE OF PETER JOHN SMEDLEY (DECEASED) & ORS	Respondents
(ACCORDING TO THE ATTACHED SCHEDULE)

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JUDGES:	FERGUSON CJ, NIALL and MACAULAY JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	27 July 2023
DATE OF JUDGMENT:	26 October 2023
ORIGINATING PROCESS:	Order, Nichols J, Supreme Court of Victoria 7 March 2023
MEDIUM NEUTRAL CITATION:	[2023] VSCA 256

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PRACTICE AND PROCEDURE – Transfer of proceedings – Whether group costs order (‘GCO’) relevant to discretion to transfer proceedings – ‘Jurisdiction’ used in sense of conferring authority to adjudicate, not arming court with powers – Ability to fund proceeding may be taken into account – Transfer should not return parties to starting point or erase steps that have been taken – Making of GCO not about balancing competing interests of parties – Striking construction to ignore order made pursuant to power conditioned on interests of justice when determining appropriate forum – Existence of GCO and consequences for GCO in event of transfer relevant to choice of forum.

PRACTICE AND PROCEDURE – Transfer of proceedings – Whether GCO will remain in force if proceedings transferred – Corporations Act 2001 (Cth) s 1337P does not treat court as having made order it has no power to make – GCO would not remain in force if proceeding transferred.

PRACTICE AND PROCEDURE – Transfer of proceedings – Whether proceeding should be transferred – Factors do not strongly point in favour of New South Wales as natural forum – Claim brought under Commonwealth law – Existence of GCO a relevant factor tying proceeding to Victoria – Reserved questions answered.

Corporations Act 2001 (Cth) ss 1337H, 1337P; Judiciary Act 1903 (Cth) s 79; Legal Profession Uniform Law Application Act 2014, sch 1 s 183; Supreme Court Act 1986, s 33ZDA.

BHP Billiton Ltd v Schultz (2004) 221 CLR 400; BMW Australia Ltd v Brewster (2019) 269 CLR 574, considered.

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Counsel
Applicants:	Mr JT Gleeson SC with Dr SH Hartford-Davis and Mr M Pulsford
First to Fourth Respondents:	Ms TN Spencer Bruce
Fifth Respondent	Mr PD Herzfeld SC with Ms JL Roy
Solicitors
Applicants:	Banton Group
First to Fourth Respondents:	Baker McKenzie
Fifth Respondent:	Ashurst Australia

FERGUSON CJ
NIALL JA
MACAULAY JA:

Following the decision of the High Court in Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd,[1] which held that third party funding of litigation was not of itself an abuse of process, representative proceedings have become a very familiar feature of the Australian litigation landscape. The concerns that third party funding might lead to the bringing of unmeritorious claims or the exploitation of litigants at the hands of the funder have largely been addressed by giving the court control of the litigation process, including through the requirement for court approval of any settlement and the distribution of any proceeds. The benefits of group proceedings are sometimes described by reference to the phrase ‘access to justice’, in the sense that they provide a means by which bona fide claims that would otherwise be uneconomical to bring may be litigated.
[1](2006) 229 CLR 386; [2006] HCA 41.
Apart from a small period of time in which some of these control mechanisms were provided by Rules of Court,[2] they have largely been found in express legislative provisions regulating representative proceedings. In Victoria they are found in pt 4A of the Supreme Court Act 1986. Cognate regimes are found in the Federal Court of Australia and in the various State Supreme Courts and the regimes have been relatively harmonious.
[2]Shimshon v MLC Nominees Pty Ltd (2021) 66 VR 277, 305 [105] (Whelan JA); [2021] VSCA 363.
As a matter of public policy, lawyers have been prohibited from charging ‘contingency fees’, meaning fees set by reference to the outcome of a proceeding and as a proportion of an amount recovered. As a result, contingency fees have not been used as a means of funding group proceedings. In both Victoria and New South Wales the prohibition is found in s 183 of the Legal Profession Uniform Law.[3] The perceived vice to which the prohibition is directed includes the risk that the objectivity and professional obligations and duties of the lawyer might be compromised if the lawyer has an interest in the outcome over and above the recovery of their professional fees. This prohibition has limited but not entirely prevented lawyers from funding litigation. It has not, for example, prevented lawyers from charging on a ‘no win no fee’ basis in which the payment of fees (but often not disbursements) is dependent upon a successful outcome by way of settlement or judgment. It is also possible in certain circumstances for lawyers to charge an ‘uplift’ on fees not exceeding 25 per cent in the event of a successful outcome.[4]
[3]Legal Profession Uniform Law Application Act2014, sch 1 (‘Legal Profession Uniform Law’).
[4]Ibid sch 1, s 182. See also sch 1, s 6 (definition of ‘uplift fee’).
The prohibition against contingency fees has, with respect to group proceedings and subject to obtaining an order from the Supreme Court, been lifted in Victoria but not NSW. With effect from 30 June 2020, the Supreme Court Act was amended to introduce the concept of a ‘group costs order’ (‘GCO’) which applies in group proceedings and allows the Court to order that the legal costs payable to a law practice in a group proceeding may be calculated as a percentage of the amount of any award or settlement recovered.[5] There is no counterpart in either the Federal Court or any other Supreme Court of a State or Territory. Thus, a GCO provides a funding mechanism for group proceedings that is unique to Victoria.
[5]Justice Legislation Miscellaneous Amendments Act2020, s 5.
In this group proceeding commenced in the Supreme Court of Victoria, and arising under the Corporations Act2001 (Cth), a judge of the Court made a GCO, by which the legal costs payable to the solicitors for the plaintiff were set at 40 per cent of the amount of any award or settlement that may be recovered from the proceeding. As will appear, that high percentage is a reflection of the risks in this litigation and that, in effect, the GCO was funding of last resort. In accordance with the statutory provisions applying to GCOs, the solicitors are liable to provide any security for costs that may be ordered and also liable to pay the defendants any costs that might be ordered in the defendants’ favour.
The defendants have applied by summons to have the group proceeding transferred to the Supreme Court of NSW pursuant to an express statutory power in the Corporations Act on the ground that the NSW Court is the more appropriate forum.[6] Questions have arisen as to whether, in determining the transfer application, the fact that a GCO has been made is relevant to the exercise of the transfer power and, if the proceeding is transferred, whether the GCO will apply in NSW thereafter. The question is particularly acute because NSW prohibits lawyers charging contingency fees and makes no exception for group proceedings; that is to say, had the group proceeding been brought in NSW there would have been no power to make a GCO. It would be naïve to think that the existence of an additional funding mechanism in Victoria by way of a GCO would not provide a magnet to Victoria, leading to actions being brought in this Court that are more appropriately litigated elsewhere. That does not mean that the Court should adopt a more cynical view when considering questions of forum.
[6]Corporations Act 2001 (Cth) s 1337H.
These questions are of general importance and a judge of the Court has reserved them for consideration by this Court. The specific questions reserved and our answers to those questions are as follows:
Question 1
In exercising the discretion to transfer proceedings to another court under s 1337H(2) of the Corporations Act 2001 (Cth), is the fact that the Supreme Court of Victoria has made a group costs order under s 33ZDA of the Supreme Court Act 1986 (Vic) relevant?
Answer:        Yes.
Question 2
If the proceedings are transferred to the Supreme Court of New South Wales:
(a) will the GCO made by the Supreme Court of Victoria on 3 May 2022 remain in force and be capable of being enforced by the Supreme Court of New South Wales, subject to any order of that Court; and
(b) if the GCO will remain in force, does the Supreme Court of New South Wales have power to vary or revoke the GCO?
Answer:        (a)      No; and
(b)does not arise.
Question 3
Should this proceeding (S ECI 2020 03281) be transferred to the Supreme Court of New South Wales pursuant to s 1337H of the Corporations Act 2001 (Cth), as sought in prayer 3 of the summons filed by the fifth defendant on 26 February 2021?
Answer:        No.
Our reasons follow.

The facts

On 14 August 2020, the applicants commenced a representative proceeding against the respondents. The proceeding is brought on behalf of persons who acquired an interest in fully paid ordinary shares in Arrium Ltd between 19 August 2014 and 4 April 2016 (‘the Relevant Period’). Arrium was an ASX-listed diversified mining and materials company, which entered voluntary administration on 7 April 2016.
The applicants allege the respondents, who were directors and officers of Arrium as well as its auditor (‘KPMG’), engaged in misleading or deceptive conduct and breached various provisions of the Corporations Act, the Australian Securities and Investments Commission Act 2001 (Cth) and the Australian Consumer Law.[7] The allegations concern three financial statements from the full year results for the financial years ending 30 June 2014 and 30 June 2015 and half year results for the six-month period ending 31 December 2014. The allegations concern a capital raising in 2014 and the publication of financial statements of Arrium and centre around the adequacy of impairments and the carrying value of assets.
[7]Competition and Consumer Act 2010 (Cth) sch 2.
During the Relevant Period, Arrium’s registered office and principal place of business was located at Level 40, 259 George Street, Sydney NSW 2000 (‘Arrium’s Head Office’). Its directors included the late Peter Smedley, chair, Andrew Roberts and Jeremy Maycock. Mr Maycock was also the Managing Director and Chief Executive Officer. One or more of the directors signed the relevant financial statements.
Arrium is in liquidation. It is not a party to the proceeding.
On 31 August 2017, the Deed Administrators (now Liquidators) of Arrium lodged a release with the ASX announcing the sale of Arrium Group companies, including the manufacturing, distribution, recycling, Whyalla Steelworks and mining divisions, to an unrelated entity.
Arrium had operations in Whyalla (South Australia), Kansas City (USA), Santiago (Chile) and El Salto (Mexico). Its finance and management were largely based in Sydney:
(a)Arrium’s Finance Team was headed by Jaimee Lieu (Group Reporting Manager (Group Controller)) reporting to Anthony Brooks (Group Financial Controller), who both worked at Arrium’s Head Office in Sydney, NSW;
(b)Arrium’s Chief Financial Officer (Robert Bakewell), to whom Mr Brooks reported, Company Secretary, Treasury team and Internal Audit team were all based at Arrium’s Head Office in Sydney, NSW;
(c)Arrium’s board meetings were largely held at Arrium’s Head Office in Sydney, NSW; and
(d)Pre-Audit Committee meetings and Audit Committee meetings were held at Arrium’s Head Office in Sydney, NSW.
On 18 September 2014, Arrium lodged with the ASX a copy of a retail entitlement booklet with respect to the capital raising. Subscriptions were returnable by post to Arrium’s Head Office in Sydney, NSW.
KPMG was the auditor of Arrium. Its lead partners working on the Arrium audit and documentation were based in Sydney. It operates offices across Australia including in Sydney and Melbourne.
No party has yet given notice of the identity of witnesses or experts intended to be called at the final hearing. Mr Bakewell (formerly Arrium’s Chief Financial Officer) and Mr Brooks (formerly Arrium’s Group Financial Controller), both likely key witnesses in this proceeding, reside in NSW. The three principal KPMG partners, one of whom is retired, reside in Sydney.
The two plaintiffs and lead group members reside in NSW. The executor of the estate of Mr Smedley resides in Victoria. Mr Roberts now resides in Western Australia. The third defendant, Peter Nankervis, resides in Victoria. He resided in Victoria in the Relevant Period, and generally travelled to Sydney to participate in Arrium Board and Audit Committee meetings. During the Relevant Period he was a director of Arrium and Chairman of the Audit Committee. The fourth defendant, Mr Maycock, resides in Queensland. He had travelled to NSW for Arrium board meetings.
The proceedings are brought on behalf of all persons who satisfy the definition of a ‘Group Member’,[8] irrespective of where the persons were, or are, resident. Group Members who have entered into a retainer with the solicitors for the plaintiffs are scattered across Australia: 80 in NSW, 50 in Victoria, 25 in South Australia, nine in Western Australia and one in Tasmania. There are 30 people outside Australia.
[8]The definition is in paragraph 1 of the Statement of Claim dated 14 August 2020 and provides that subject to limited exclusions, Group Members are those who acquired an interest in fully paid ordinary shares in Arrium during the Relevant Period who have suffered loss or damage by reason of the conduct of the Defendants.
The lawyers for the parties are based in Sydney in the sense that the teams responsible for the litigation are based in that city. However, the solicitors for both director defendants and for KPMG are national firms with offices in both Sydney and Melbourne.
The proceeding has been funded by a litigation funder, Equite Capital No 1 Pty Ltd (‘the Funder’) which is a company registered in Singapore. It has an agent Atrax Pty Ltd, which provides day-to-day instructions to the solicitors for the plaintiffs. Paul Lindholm is a director for Atrax and is the primary contact. He is based in Sydney. The funding arrangement is the subject of a funding agreement which provides that the governing law is that of NSW. As already noted, a judge of the Court made a GCO. A condition of the order is that the funding agreement be terminated. That has not yet happened pending the outcome of the transfer application.
Arrium, including in the context of its liquidation, was the subject of a number of proceedings in the Supreme Court of NSW:
(a)in 2018, the deed administrators (now liquidators) applied to the Supreme Court of NSW for the production of documents and examination of witnesses, including some of the former directors and auditors;
(b)on 6 May 2019, the two plaintiffs filed an application in the Supreme Court of NSW seeking production of documents and examination of another former director. Black J rejected an argument that the proceeding was an abuse of process, the Court of Appeal overturned that conclusion, but it was restored by the High Court. The proceedings have not progressed; and
(c)between 2018 and 2019, three other proceedings concerning Arrium were issued in the Supreme Court of NSW:
(i)The first proceeding was an insolvent trading proceeding brought by Arrium, two of its subsidiaries and their respective liquidators against, inter alia, four former directors.
(ii)The second and third proceedings also concerned Arrium, the same two subsidiaries and many of the same debts as were the subject of the first proceeding. The respective plaintiffs in each of these two proceedings alleged that debts were incurred in circumstances where drawdown notices contained misrepresentations and the relevant entity was insolvent. Each of Messrs Roberts, Nankervis and Maycock (amongst others, including Messrs Bakewell and Brooks) was a witness in these proceedings.
(iii)The three proceedings were listed for a concurrent hearing commencing on 1 March 2021. The first settled; the second and third were determined in the defendants’ favour.
The proceeding in this Court started on 14 August 2020, a short time after the commencement of the GCO provisions.
On 23 November 2020, KPMG wrote to the plaintiffs saying that NSW was the more appropriate and natural forum for the proceeding.
On 2 February 2021, the plaintiffs filed an application in the Victorian Supreme Court Trial Division seeking a GCO under s 33ZDA of the Supreme Court Act.
On 5 February 2021, at the first case management hearing in the proceedings in the Victorian Supreme Court, Nichols J directed the parties to file written submissions on the order in which KPMG’s transfer application (which had, at that stage, been foreshadowed by KPMG) and the GCO application should be heard.
On 26 February 2021, KPMG filed and served a summons seeking the transfer of the matter from the Supreme Court of Victoria to the Supreme Court of NSW, together with submissions as to why the transfer application should be heard prior to the GCO application.
Also on 26 February 2021, the plaintiffs filed submissions as to why the GCO application should be heard before the transfer application.
On 19 March 2021, by email communication to the parties, Nichols J directed that the transfer application be heard after the GCO application.
On 31 March 2021:
(a)KPMG filed its Defence to the Statement of Claim in the Victorian Supreme Court; and
(b)Nichols J made an order that the transfer application would be determined after the GCO application.
KPMG did not seek reasons from the Supreme Court of Victoria in respect of that order and did not seek leave to appeal from that order.
On 8 December 2021, the solicitor for the plaintiffs, Amanda Banton swore an affidavit in support of the plaintiffs’ application for a GCO. In [38] of that affidavit, Ms Banton deposed that:
All retainers issued up to January 2021 anticipated that the Proceedings would be commenced in New South Wales and were therefore issued in accordance with the cost disclosure obligations in New South Wales. However, given that it was subsequently decided to commence proceedings in Victoria, on 23 January 2021, I caused a revised Letter of Engagement… to be sent to the Plaintiffs in compliance with Banton Group’s cost disclosure obligations in Victoria...
On 18 February 2022, Mr Lindholm affirmed an affidavit in support of the plaintiffs’ application for a GCO. In [24] and [26] of that affidavit, Mr Lindholm deposed that:
In or around June 2020, the legislation in Victoria allowing for Group Cost Orders to be made were passed by the Victorian Parliament.
…
Given the recent enactment of the Group Cost Order provisions in Victoria, I supported the decision to commence the Proceedings in the Supreme Court of Victoria. This was, in part, to achieve greater flexibility and certainty in terms of the funding of the Proceedings in the event that a Common Fund Order could not be obtained in the early stages of the Proceedings.
Interlocutory orders have been made relating to discovery and the provision of security for costs.
The parties have agreed the following facts, which they agree reflect findings made by John Dixon J in his reasons for making a GCO:
The proceeding in the Victorian Supreme Court is complex, difficult and likely to consume time and resources. A successful outcome for the plaintiffs and group members is attended by risk, not just in terms of establishing liability and proving losses but also in terms of recovery of any judgment that might be won.
In the absence of a GCO, there is a considerable risk, indeed a probability, that the Funder will conclude that the Funding Agreement is not financially viable for it and it will not continue to fund the proceeding.
An alternate funder is not a realistic prospect should the Funder terminate the Litigation Funding Agreement.
If the proceeding is not viably funded, the plaintiffs will be unable to continue with the proceeding and it is probable that it will terminate without adjudication or other resolution on the merits.
Justice cannot be done in the proceeding if the plaintiffs and group members are not able to pursue their claims through the proceeding and must abandon them.

Finally, we note that an application for removal of the transfer application was refused by the High Court on 18 November 2022.[9]
[9]KPMG (A Firm) v Bogan [2022] HCATrans 208.

The legislation

Corporations Act 2001 (Cth)

As noted, the proceeding includes allegations of breaches of the Corporations Act by the directors of Arrium and KPMG. Accordingly, the matter arises under the ‘Corporations legislation’.
Part 9.6A of the Corporations Act sets out the law in relation to the jurisdiction and procedure of courts in matters arising under the ‘Corporations legislation’.[10] Division 1, which relates to civil jurisdiction, operates to the exclusion of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) and s 39B of the Judiciary Act1903 (Cth) but otherwise does not limit the operation of the Judiciary Act.[11]
[10]Defined in s 9 of the Corporations Act 2001 (Cth) (Dictionary) to include the Corporations Act 2001 (Cth).
[11]Corporations Act 2001 (Cth) ss 1337A(2)–(3).
Section 1337B(2) confers jurisdiction on each State or Territory Supreme Court with respect to civil matters arising under the Corporations Act. This section invests jurisdiction in the Supreme Court of Victoria to hear and determine the proceeding.
Section 1337H deals with transfers of proceedings or an application in a proceeding from one court (the transferor court) to either the Federal Court or a State or Territory Supreme Court. So far as is relevant, s 1337H(2) provides that:
if it appears to the transferor court that, having regard to the interests of justice, it is more appropriate for:
(a) the relevant proceeding; or
(b) an application in the relevant proceeding;
to be determined by another court that has jurisdiction in the matters for determination in the relevant proceeding or application, the transferor court may transfer the relevant proceeding or application to that other court.
Section 1337L sets out a non-exhaustive list of mandatory considerations relevant to a decision to transfer, being: the principal place of business of any body corporate concerned in the proceeding, the place or places where the events that are the subject of the proceeding occurred, and the other courts that have jurisdiction to deal with the proceeding.
Section 1337M provides that a transfer may be made at any time in the proceeding, on the application of a party or on the court’s own motion. Under s 1337N, where a proceeding is transferred, the Registrar or other proper officer of the transferor court must transmit to the other court all filed documents and the other court, being the transferee court, must proceed as if:
(i) the proceeding had been originally instituted in the other court; and
(ii) the same proceedings had been taken in the other court as were taken in the transferor court; and
(iii) in a case where an application is transferred—the application had been made in the other court.
Section 1337P(2)[12] is important and it provides:
If a proceeding is transferred or removed to a court (the transferee court) from another court (the transferor court), the transferee court must deal with the proceeding as if, subject to any order of the transferee court, the steps that had been taken for the purposes of the proceeding in the transferor court (including the making of an order), or similar steps, had been taken in the transferee court.

Supreme Court Act 1986

[12]Section 1337P(1) deals with the ‘rules of evidence and procedure’ to be applied in cases involving a transfer of matters under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘ADJR Act’) and referred to in s 1337B(3).

Part 4A of the Supreme Court Act governs group proceedings.
Sections 33V and 33W deal with the settlement of a group proceeding and an individual claim respectively. Section 33V provides that a group proceeding may not be settled or discontinued without the approval of the Court. If the Court gives such an approval, it may make ‘such orders as it thinks fit with respect to the distribution of any money’ paid under a settlement or into Court.
Section 33Z deals with the powers of the Court in giving judgment including by making an award of damages for group members. In making an award of damages or monetary relief the Court must make provision for the payment or distribution of the money to the group members entitled. In making provision for the distribution of money, s 33ZA authorises the Court to provide for the constitution and administration of a fund.
Section 33ZD(1)(a) provides that in a group proceeding the Court may order the plaintiff or the defendant to pay costs. Sections 33ZD(1)(b) and 33ZD(2) provide that the Court may not order a group member to pay costs, except as provided by ss 33Q or 33R (which deal with non-common questions and individual questions respectively) and subject to s 33ZDA.
Section 33ZDA is headed, ‘Group costs orders’ and is in the following terms:
(1) On application by the plaintiff in any group proceeding, the Court, if satisfied that it is appropriate or necessary to ensure that justice is done in the proceeding, may make an order—
(a)that the legal costs payable to the law practice representing the plaintiff and group members be calculated as a percentage of the amount of any award or settlement that may be recovered in the proceeding, being the percentage set out in the order; and
(b) that liability for payment of the legal costs must be shared among the plaintiff and all group members.
(2) If a group costs order is made—
(a) the law practice representing the plaintiff and group members is liable to pay any costs payable to the defendant in the proceeding; and
(b)the law practice representing the plaintiff and group members must give any security for the costs of the defendant in the proceeding that the Court may order the plaintiff to give.
(3) The Court, by order during the course of the proceeding, may amend a group costs order, including, but not limited to, amendment of any percentage ordered under subsection (1)(a).
(4)This section has effect despite anything to the contrary in the Legal Profession Uniform Law (Victoria).
(5) In this section—
‘group costs order’ means an order made under subsection (1);
‘legal costs’ has the same meaning as in the Legal Profession Uniform Law (Victoria).
Section 33ZF provides a general power to make orders:
In any proceeding (including an appeal) conducted under this Part the Court may, of its own motion or on application by a party, make any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding.

The GCO provisions

It is obvious that the enactment of s 33ZDA effected a major alteration to the group proceedings scheme. As noted, it is currently unique to Victoria.
Section 33ZDA(1) addresses the relationship between lawyer and client and also between lawyer and group members who may or may not be in a contractual relationship with the law practice. Through the mechanism of a GCO a law practice is in a position to both fund the litigation and benefit from it beyond recoupment of ordinary professional costs. The financial risk of conducting the litigation is able to be shifted from the group members to the law practice. In some respects, a GCO is similar to a common fund order (‘CFO’), which enables a funder to obtain a percentage of any settlement or award, but the law practice stands in a different position to a third party funder. The law practice, and the lawyers engaged in acting in the group proceeding, have a role in the proceeding providing legal representation to their clients; they have duties to both the court and their clients. They are not in the same position as an independent third party who purely funds the litigation. Whether that circumstance affects the terms on which a GCO might be granted need not be further discussed.
Section 33ZDA(2) has a different focus and involves the defendant: it imposes a liability on the law practice to pay any costs payable to the defendant and requires the law practice to give any security for costs of the defendant that may be ordered. The making of an order for security for costs is a commonplace incident in litigation and is commonly made in a group proceeding.
The court may only make a GCO if it is satisfied that it is appropriate or necessary to ensure that justice is done in the proceeding. It must follow that, in regulating an aspect of the lawyer-client relationship, and the measure of the potential return to the law practice, the section expressly recognises that the order may be necessary to ensure justice is done in the proceeding. It may reasonably be inferred from the text and structure of s 33ZDA that a purpose of a GCO is to put in place a funding mechanism that allows the group members to be represented and for the matter to proceed and that whether the proceeding proceeds as a group proceeding may be a matter that may engage the interests of justice in the proceeding. In other words, s 33ZDA embodies a legislative judgment that, in some cases, it may be in the interests of justice for the matter to be funded by the law practice subject to the control of the court because without such an order the matter may not be able to proceed and the benefits of a group proceeding to the interests of justice would be unattainable.
This purpose is also reflected in the extrinsic materials, as explained by Nichols J in Fox v Westpac Banking Corporation:
By incorporating the elements it does, s 33ZDA implicitly permits the linking of risk and reward in the calculation of a group costs order. I say that because the section provides that a legal practice the subject of a group costs order will be made liable to pay the defendant’s adverse costs and to give any security for the defendant’s costs. It follows from the text that the calculation of legal costs in the manner permitted by s 33ZDA may properly take into account not only the value of legal services performed, but the assumption of financial risk by the law practice. The policy reflected in the risk-reward model was discussed in the Victorian Law Reform Commission’s Access to Justice — Litigation Funding and Group Proceedings Report in response to which s 33ZDA was introduced, in these terms —
Class actions are an appropriate forum for lawyers to absorb the risks of litigation and be rewarded for this, because the representative plaintiff has a disproportionate exposure to the financial risk of an unfavourable outcome, compared to both the value of their own claim and the exposure of other class members. The risk is a significant disincentive to taking on the role and is only partly mitigated when lawyers act on a ‘no win, no fee’ basis.
The reference in the VLRC Report to disincentives to a person becoming a plaintiff is a particular manifestation of the broader purpose of s 33ZDA, which was described in the second reading of the Bill introducing the provision, as enhancing access to justice in Victoria ‘by reducing potential barriers to commencing class actions in the Supreme Court’. Section 33ZDA sits within Part 4A of the Supreme Court Act which permits and governs the conduct of group proceedings in this Court. The principal object of that part of the Act is enhancing group members’ access to justice. Section 33ZDA then, builds on the existing provisions of Part 4A of the Act by conferring on the Court the power, in an appropriate case, to facilitate access to justice for group members by making a GCO, subject to the statutory pre-conditions to the exercise of the discretion being met.[13]
[13][2021] VSC 573, [20]–[21] (citations omitted) (emphasis in original) (‘Fox’).

The GCO in this case

As already observed, John Dixon J made a GCO which provided that legal costs payable to the group members’ solicitors would be 40 per cent of the amount of any award or settlement that may be recovered in the proceeding.[14] There is no appeal from that order.
[14]Bogan v The Estate of Peter John Smedley (Deceased) [2022] VSC 201.
In his reasons for making the GCO, John Dixon J referred to and applied the principles articulated by Nichols J in Fox. One of the matters taken into account was:
what is appropriate or necessary to enhance access to justice for group members by reducing disincentives or barriers — in respect of the fees payable to the law practice representing the group and other liabilities and obligations — that may restrict accessing justice by commencing or maintaining group proceedings;[15]
[15]Ibid [13(b)].
John Dixon J considered that the relationship between the proposed GCO and the viability of the proceeding was a relevant consideration, observing that:
The prospect of termination of the existing funding arrangement directly affects the viability of the proceeding, while the arrangements by which the law practice proposes to bear or share the financial risk are critical to the financial viability of the proposed group costs order and, thus, a relevant consideration.[16]
[16]Ibid [14].
A number of the findings made by John Dixon J are accepted as agreed facts for the purpose of the reserved questions. It is not necessary to repeat them.
John Dixon J gave the following summary of his conclusions:
(a) If a group costs order is not made at all, there is a considerable risk, indeed a probability, that the Funder will conclude that the funding agreement is not financially viable for it and it will not continue to fund the proceeding, exercising its rights under cl 13. This is, in my view, a critical consideration.
(b) Likewise, if a group costs order is made but at a lesser rate than 40%, there is also a considerable risk that the Funder will not enter into the proposed costs sharing agreement with Banton Group. The proposed costs agreement between Banton Group and the plaintiffs is conditional on a successful application for a group costs order at a 40% rate to replace the existing agreement. It is also conditional on financial support for Banton Group from the Funder by the mechanism of the proposed costs sharing agreement. I am not persuaded that Banton Group will consider it to be commercially viable to continue acting for the plaintiffs on the basis of the group costs order at a lesser rate or without the Funder’s cost sharing support.
(c) I am persuaded that there are significant impediments to engaging an alternate funder at this stage and I am satisfied that an alternate funder is not a realistic prospect should the Funder terminate the funding agreement.
(d) If the proceeding is not viably funded, the representative plaintiffs will be unable to continue with the proceeding and it is probable that it will terminate without adjudication or other resolution on the merits.
(e) Justice cannot be done in the proceeding if the plaintiffs and group members are not able to pursue their claims through the proceeding and must abandon them.
(f) I accept that should a group costs order be granted at the rate sought, Banton Group will be bound to conduct the proceeding for the representative plaintiffs and group members in accordance with the terms of the conditional costs agreement and the group costs order.
(g) I accept the Funder’s statement through Mr Lindholm that should a group costs order be granted at the rate sought, the Funder will enter into the proposed costs sharing agreement containing the key commercial terms that are described in his affidavit with Banton Group ‘and will not seek to enforce any rights it has or may have pursuant to the funding agreement with funding group members, or otherwise at law or in equity in respect of the funding of the proceeding (and will give an undertaking to that effect)’. I will require that the undertaking be given to the court.
(h) Accordingly, it will follow that the group costs order will govern all costs and litigation funding charges in respect of the proceeding in substitution for the rights and obligations that presently exist under the funding agreement.
(i) I am satisfied that the proceeding is complex and difficult and is likely to consume time and resources. A successful outcome for the plaintiffs and group members is attended by risk, not just in terms of establishing liability and proving losses but also in terms of recovery of any judgment that might be won, the nature and extent of which is further discussed in the confidential annexure. It will be necessary for Banton Group to invest considerable resources in the litigation over an extended period. Those resources will be at risk. It is reasonable and proportionate in these circumstances that the share of any resolution sum payable to the law practice is commensurate with the risk profile that is more particularly identified in the confidential annexure. The court must be mindful that funding for complex litigation competes with funding for other sorts of ventures and that the returns expected for undertaking these risks are determined by market forces. Likewise, group members must appreciate that the costs and risks involved in winning compensation for their claims in such cases are unavoidable and they must accept responsibility for a reasonable and proportionate share of those costs and risks.
(j)I accept that the rate claimed of 40% is, taking all considerations into account as best I can for the purposes of a broad evaluative judgment, within the range that might be identified by a principled feasibility assessment, which the court cannot properly complete on the material before it.
(k) The group costs order appears commercially viable because the law practice will be supported by the proposed costs sharing agreement with the Funder. There was no evidence of the financial strength of the law practice, although I can infer from what it is not prepared to accept, that the financial position of Banton Group is not such as will enable it to fully fund the litigation from its own resources. Each of the law practice and the Funder has stated to the court that at the rate sought, that viability is reasonably anticipated.
(l) I also take account of the benefits that group members will receive although the effect of the group costs order will be to limit their collective return to 60% of a resolution sum. Those benefits include:
(i) Transparency and simplicity;
(ii) A certain funding structure for the preparation and prosecution of their claims to mediation or to trial;
(iii) The opportunity to present their claims for resolution on their merits, avoiding a substantial risk that under the present arrangements consideration of their claims on their merits is, at the least, uncertain, but in all likelihood may be thwarted;
(iv) An equal sharing of the costs and burden of the preparation and prosecution of their claims across all group members;
(v) From the perspective of group members costs are capped at a set share of any resolution sum, meaning the representative plaintiffs need not be concerned to monitor costs and disbursements to avoid unexpected blow-outs;
(vi) Relief from the obligation to provide any security for costs that may be ordered;
(vii) Relief from exposure to the contingent liability to pay adverse costs orders in favour of the defendants; and
(viii) The opportunity, should circumstances change, to seek review of the group costs order, which review will be governed by the overriding interest of the court to ensure the proper administration of justice through the proceeding.[17]
[17]Ibid [105].
It is clear both from the form of the order and the legislative context in which it was made that the GCO is only expressed to operate in respect of the proceeding in the Supreme Court of Victoria. The order refers expressly to any award or settlement that may be recovered ‘in the proceeding.’ The GCO is framed as an order in the proceeding in the Supreme Court of Victoria. Section 33ZDA is one of a number of provisions that regulate the undertaking of a group proceeding in the Supreme Court. The order is concerned with legal costs that are payable in the proceeding. That is to say, there was no intent to bind the solicitors, plaintiffs or group members beyond the proceeding in the Supreme Court of Victoria. It follows that, absent some order or legislative provision, the GCO will not continue to bind those to whom it relates if the proceeding is transferred to the Supreme Court of NSW.

The NSW Provisions

Section 183(1) of the Legal Profession Uniform Law 2014 (NSW) provides that:
A law practice must not enter into a costs agreement under which the amount payable to the law practice, or any part of that amount, is calculated by reference to the amount of any award or settlement or the value of any property that may be recovered in any proceedings to which the agreement relates.
A contravention of s 183(1) is capable of constituting unsatisfactory professional conduct or professional misconduct on the part of the relevant practitioner.
In the Supreme Court of NSW, representative proceedings are regulated by pt 10 of the Civil Procedure Act2005 (NSW). Section 183 of that Act confers powers on the Supreme Court of NSW in respect of group proceedings in the same terms as s 33ZF of the Supreme Court Act.

QUESTION 1 — Is the fact of a GCO a relevant consideration when determining whether the proceeding should be transferred?

KPMG’s submissions

KPMG submits that the existence of a GCO is irrelevant to a transfer application under s 1337P because the making of a GCO represents a procedural advantage that the High Court said in Schultz[18] was irrelevant to the proper assessment of the interests of justice in a decision as to which court is the more appropriate. Secondly, it submits that it was wrong to decide the application for a GCO before deciding the proper forum and for that reason it should not be taken into account.
[18]BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61 (‘Schultz’).
On the first aspect, KPMG commences its submission by making some general observations about the power in s 1337H which it assimilates, in terms of legislative policy, to a transfer under the cross-vesting regime. It says that it is not necessary to show that the existing forum is inappropriate, only that there is another more appropriate court, and once the tipping point is reached, a transfer is mandatory. It submits that the plaintiff’s choice of forum is a neutral factor and there is no presumption or weighting in favour of the forum in which the proceeding is commenced.
KPMG argues that a purpose of s 1337H is to avoid ‘forum shopping’, citing the observation of Callinan J in Schultz that ‘Courts will need to be ruthless in the exercise of their transferral powers to ensure that litigants do not engage in “forum-shopping” by commencing proceedings in inappropriate courts’.[19]
[19]Ibid 478 [217].
Relying on Schultz, KPMG says that where a party enjoys a procedural advantage by reason of having instituted a proceeding in one forum, and the other party suffers a corresponding disadvantage by reason of that choice, that procedural advantage is irrelevant to the assessment of the ‘interests of justice’ for the purposes of provisions such as s 1337H. It contends that a GCO is such an advantage.
Asked to identify the corresponding disadvantage that adversely affects it, KPMG submits that it is disadvantaged in having to defend a proceeding which, absent a GCO, would, in all probability, not be brought. KPMG submits that s 1337H is concerned with the venue of the proceeding and not with the anterior issue about whether the proceeding will be brought at all. In this respect, KPMG argues that Brewster[20] is analogous. Factually, KPMG submits that John Dixon J did not conclude that the proceeding would terminate if a GCO were not made, and that there had been funding in NSW. It says that the preference to have the proceeding funded by a GCO is irrelevant.
[20]BMW Australia Ltd vBrewster (2019) 269 CLR 574; [2019] HCA 45 (‘Brewster’).
Another related reason given by KPMG as to why a GCO is irrelevant to the transfer decision is that it would involve an invidious choice between ‘the public policy reflected in an Act of the Parliament of New South Wales and the public policy reflected in an Act of the Parliament of [Victoria]’, contrary to Schultz.[21]
[21](2004) 221 CLR 400, 426 [26] (Gleeson CJ, McHugh and Heydon JJ); [2004] HCA 61.
The second, and independent, ground on which KPMG contends that the GCO is irrelevant is based on a contention that it was wrong to determine the GCO application before determining which was the more appropriate forum.

The first to fourth respondents’ (‘the directors’) submissions

The directors adopt the submissions made by KPMG. They submit that a GCO is a procedural order in that it deals with the costs of the proceeding, which is, they say, clearly a matter of procedure. Alternatively, they submit that a GCO is procedural because its making will have no effect on the adjudication of the underlying dispute.
The directors submit that it is generally inappropriate for a court to assess competing legislative policies in different fora especially where the issue concerns a controversial underlying policy on which there are strongly held competing policy positions such as exists in relation to contingency fees. They submit that s 33ZDA reflected a legislative judgment by Victoria whereas the prohibition on contingency fees in NSW reflects a countervailing legislative policy and there is no basis for the Court to prefer one over the other.

The plaintiffs’ submissions

A threshold argument

During the course of oral argument, the plaintiffs raised a new point, or at least one that had not been clearly exposed in its written materials, which they say means the transfer power in s 1337H is not available. The plaintiffs note that by s 1337H(2), a transfer can only be made to a court that ‘has jurisdiction in the matters for determination in the relevant proceeding or application’. Next they say that the word ‘jurisdiction’ is a word of variable meaning depending on the context in which it is used. In the context of federal jurisdiction it is generally used to describe the authority to decide or adjudicate upon a matter.[22] However, they submit that it can also be used as a composite phrase covering both the authority to decide and the powers that are available to the court in the exercise of the jurisdiction. In this sense, so it was argued, jurisdiction includes power.
[22]Palmer v Ayres (2017) 259 CLR 478, 490 [24] (Kiefel, Keane, Nettle and Gordon JJ); [2017] HCA 5; Zurich Insurance Company Ltd v Koper [2023] HCA 25, [33] (Kiefel CJ, Gageler, Gleeson and Jagot JJ); Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23 (‘Rizeq’).
The plaintiffs submit that jurisdiction in s 1337H is used in this second, broad, sense. In making that submission they rely on the fact that s 1337H(2) also refers to jurisdiction with respect to an application in a proceeding and that powers rather than authority to decide are more relevant for such interlocutory processes. Additionally, they note that the jurisdiction is with respect to the ‘matters for determination’, noting both the use of the plural and the expansive nature of the concept which would include all of the interlocutory steps or aspects that may be required to be resolved within a proceeding.
On this basis, a court would only have jurisdiction with respect to the matters to be determined if it had both the authority to decide the matter and the powers to deal with it on the merits. For that reason, a proceeding which had an extant application that is capable of being determined in the first court cannot be transferred to a court that lacks the powers (and therefore on this argument the jurisdiction) to deal with the application.

The plaintiffs’ submissions on the relevance of the GCO

The plaintiffs submit that the existence of a GCO is relevant to the decision as to whether or not the proceeding should be transferred. They note that s 1337H confers a discretion based on an assessment of which forum is more appropriate having regard to the interests of justice. Equally, they say, s 33ZDA is conditioned on an assessment of the interests of justice in the proceeding and that there is a ‘natural harmony’ between the two provisions.
The plaintiffs submit that the power in s 1337H(2) is expressed in broad terms that permit a wide range of considerations to be taken into account. They rely on an observation of Allsop CJ in Wileypark Pty Ltd v AMP Ltd that a ‘lessening of procedural and substantive rights’ would be a factor that would militate against a transfer.[23]
[23](2018) 265 FCR 1, 15 [52]; [2018] FCAFC 143.
The plaintiffs seek to distinguish Schultz on a number of bases. First, they contend that it is only procedural advantages that have a commensurate disadvantage that lie outside the ambit of the interests of justice. The making of a GCO does not concern the defendants and does not adversely affect their interests such as by increasing the defendants’ exposure to damages.
Second, they submit that the cross-vesting regime is materially different in three ways:
(a)the purpose of the cross-vesting regime is to confer jurisdiction, but on the understanding that courts will still ‘by and large, keep within their “proper” jurisdictional fields’;[24]
(b)s 1337H confers a residual discretion, found in the word ‘may’ rather than the mandatory ‘must’ used in the cross-vesting legislation; and
(c)forum shopping is of less relevance where the group members are Australia-wide, pursuing contraventions of Commonwealth legislation with concurrent jurisdiction and in respect of which no court has primacy.[25]
[24]Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 725 (Rogers AJA).
[25]Sihota v Pacific Sands Motel Pty Ltd (2003) 56 NSWLR 721, 725 [16] (Austin J); [2003] NSWSC 119.

Analysis

Before turning to the arguments, it is important to sketch the constitutional setting in which the present issues arise and to examine two decisions of the High Court, Schultz and Brewster, which underpin much of KPMG’s submissions.

Constitutional setting

First, the power to transfer in s 1337H arises in the context of a matter arising under the Corporations legislation. Although in dealing with such a matter a court will be required to apply the single though composite body of law[26] that is relevant to the subject matter of the proceeding, which may include State legislation or the common law, the basis for the application is the existence of rights, duties or liabilities arising under the Corporations legislation. In that respect it applies uniformly across the Commonwealth.
[26]Felton v Mulligan (1971) 124 CLR 367, 392 (Windeyer J); [1971] HCA 39; Rizeq (2017) 262 CLR 1, 12 [7] (Kiefel CJ); [2017] HCA 23.
Second, in federal jurisdiction, which includes a matter arising under the Corporations Act, the Commonwealth Parliament is the sole repository of legislative power to regulate the manner of its exercise.[27] Subject to constitutional protections preserving the existence and integrity of courts, it is the Commonwealth that determines, in the exercise of its own legislative choice, how the exercise of the jurisdiction will be regulated.
[27]Rizeq (2017) 262 CLR 1, 25–6 [60]–[61] (Bell, Gageler, Keane, Nettle and Gordon JJ); [2017] HCA 23.
Third, within the federation there is a unified judicature and, as Gaudron J explained in Kable,[28] the Constitution does not permit of different grades or qualities of justice, depending on whether judicial power is exercised by State courts or federal courts created by the Parliament. That does not mean that the laws that regulate the manner of the exercise of federal jurisdiction must be uniform across the Commonwealth.[29] It is a permitted consequence of the unique Australian approach of investing federal jurisdiction in State Courts that the Commonwealth Parliament can pick up State laws and apply them as federal law. Although they have, in the Judiciary Act, a common source, they do not require uniform content.[30] The legislative policy manifest in the arrangement is that unless the Commonwealth otherwise provides, the administration of the federal law in each State shall proceed on the same footing as State law.[31]
[28]Kable v DPP (NSW) (1996) 189 CLR 51; [1996] HCA 24.
[29]Leeth v Commonwealth (1992) 174 CLR 455, 467 (Mason CJ, Dawson and McHugh JJ); [1992] HCA 29.
[30]R v Gee (2003) 212 CLR 230, 255 [64] (McHugh and Gummow JJ), 270 [116] (Kirby J); [2003] HCA 12.
[31]Ibid 255 [63] (McHugh and Gummow JJ).
It follows that both s 33ZDA and s 1337H apply as federal law. And in the event the proceeding is transferred to NSW, the NSW provisions to which we have referred will likewise be applied as federal law.

Schultz

Schultz was an action in tort and breach of statutory duty for personal injury as a result of the plaintiff’s exposure to asbestos. The exposure, and therefore the alleged tort, occurred in South Australia where the plaintiff was resident. The plaintiff commenced a proceeding in the Dust Diseases Tribunal of NSW (‘DDT’). The proceeding was transferred from the DDT to the Supreme Court of NSW for the purpose of that Court considering an application to transfer to the Supreme Court of South Australia under the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW).[32]
[32]BHP Billiton Ltd v Schultz [2002] NSWSC 981.
In refusing to order the transfer, Sully J made two critical observations. First, he said that the plaintiff’s choice of forum ‘was not lightly to be overridden’;[33] and second, that the plaintiff was entitled to the benefit of ‘unusual advantages’ contained in s 11A of the Dust Diseases Tribunal Act 1989 (NSW).[34] That section permitted the DDT to award damages on the assumption that the injured person will not develop another dust-related condition, but if the plaintiff does develop another condition after damages have been assessed, the court may award further damages in that eventuality. The High Court held that both aspects were erroneous.
[33]This observation was made by Sully J as one of nine factors bearing upon the interests of justice in Broken Hill Pty Co Ltd v Zunic [2001] NSWSC 561, [18] (‘Zunic’). In BHP Billiton Ltd v Schultz [2002] NSWSC 981, Sully J said at [11] that Zunic had a ‘strikingly similar’ factual background to Schultz, and at [22] Sully J took the same stance with respect to the plaintiff’s choice of forum, mutatis mutandis, as he took in Zunic.
[34]BHP Billiton Ltd v Schultz [2002] NSWSC 981, [33].
As to the first aspect, it was held that the cross-vesting scheme did not recognise any primacy or preference in favour of the plaintiff’s choice of forum.[35] The starting point is neutral and requires a balancing of the connecting factors that are associated with each forum.
[35]Schultz (2004) 221 CLR 400, 425 [25] (Gleeson CJ, McHugh and Heydon JJ), 439 [77] (Gummow J), 465 [168] (Kirby J), 492 [258] (Callinan J); [2004] HCA 61.
The second error was that where a factor gives rise to an advantage in favour of one party and a corresponding and commensurate disadvantage to the other, the interests of justice, which are even-handed, require them both to be ignored.[36] That is because there is no basis for the Court to prefer one interest over another in assessing where the interests of justice lie. Applying that requirement to s 11A, the Court concluded that it provided an advantage to the plaintiff, who could avoid the usual rule that damages are awarded once and for all and return for damages in the event that the plaintiff develops another dust-related condition, but a disadvantage to the defendant, who might be liable for that further loss.
[36]Ibid 425 [26] (Gleeson CJ, McHugh and Heydon JJ), 445 [100] (Gummow J).
The plurality adverted to further problems that may arise in making that assessment once the first mover advantage is ignored. The plurality noted that s 30B of the South Australian Act may have had a similar operation to s 11A (with the consequence that there was in fact no, or less, advantage to the plaintiff in NSW) but to the extent there were differences a court would be in no position to compare the competing legislative policies in order to assess which best served the interests of justice. As the plurality explained:
the problem would be compounded if a judge were to become involved in comparing the respective merits of New South Wales and South Australian legislation. From whose point of view would those merits be judged? How could a judge form a preference between the public policy reflected in an Act of the Parliament of New South Wales and the public policy reflected in an Act of the Parliament of South Australia? If it came to that point, the appropriate course would be for the judge to draw back, and to consider the interests of justice by reference to more neutral factors.[37]
[37]Ibid 426 [26] (Gleeson CJ, McHugh and Heydon JJ).
Thus, according to the plurality, where the advantages and disadvantages are commensurate they cancel each other out. Where there are differences between regimes in terms of the benefits afforded to one side or the other, the court should avoid invidious comparisons based on competing legislative policies.
Although the interests of the parties is not the same as the interests of justice, the plurality accepted that ‘interests of the respective parties, which might in some respects be common (as, for example, cost and efficiency), and in other respects conflicting, will arise for consideration’.[38] They noted that justice is not ‘disembodied, or divorced from practical reality’.[39]
[38]Ibid 421 [15] (Gleeson CJ, McHugh and Heydon JJ).
[39]Ibid (Gleeson CJ, McHugh and Heydon JJ).

Brewster

It was common in group proceedings for the plaintiff to apply to the court, often at an early stage in the proceeding, for a CFO.[40] The effect of a CFO was to provide for, and fix, the remuneration of the litigation funder, as a proportion of any money ultimately recovered in the proceeding, and for all group members to bear a proportionate share of that liability. The purposes of such an order included fixing the amount of the funder’s remuneration in the event of settlement or judgment, and ensuring that the costs of the litigation, including the funder’s commission, were borne rateably across the group members rather than being limited to those that had entered into a cost funding agreement with the funder. It avoided the problem of free riding by those group members who had not bound themselves to contribute to the funding out of any receipt.
[40]Money Max Int Pty Ltd v QBE Insurance Group Ltd (2016) 245 FCR 191; [2016] FCAFC 148.
The source of the power to make such an order was thought to exist in s 33ZF.[41] In Brewster, however, the High Court held that s 33ZF did not support a CFO. The central question in Brewster was whether the words ‘any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding’ extended to making a CFO. In answering that question in the negative, Kiefel CJ, Bell and Keane JJ fastened on the fact that the power in s 33ZF related to how the proceeding was to be conducted.
[41]Of the Supreme Court Act 1986 or the Federal Court of Australia Act 1976 (Cth) or s 183 of the Civil Procedure Act 2005 (NSW).
Their Honours said:
While the power conferred by these sections is wide, it does not extend to the making of a CFO. These sections empower the making of orders as to how an action should proceed in order to do justice. They are not concerned with the radically different question as to whether an action can proceed at all. It is not appropriate or necessary to ensure that justice is done in a representative proceeding for a court to promote the prosecution of the proceeding in order to enable it to be heard and determined by that court. The making of an order at the outset of a representative proceeding, in order to assure a potential funder of the litigation of a sufficient level of return upon its investment to secure its support for the proceeding, is beyond the purpose of the legislation.[42]
[42](2019) 269 CLR 574, 589 [3]; [2019] HCA 45 (emphasis in original).

The words ‘in the proceeding’ where they appeared in s 33ZF were held to be words of limitation that circumscribed the very broad and general language that preceded them. It was held that the power was ‘supplementary’, designed to bring the proceedings, once commenced, ‘fairly and effectively to a just outcome’.[43] It did not authorise an order that was concerned with the anterior step of deciding whether or not the proceeding should be brought at all:
it is one thing for a court to make an order to ensure that the proceeding is brought fairly and effectively to a just outcome; it is another thing for a court to make an order in favour of a third party with a view to encouraging it to support the pursuit of the proceeding, especially where the merits of the claims in the proceeding are to be decided by that court. Whether an action can proceed at all is a radically different question from how it should proceed in order to achieve a just result.[44]
[43]Ibid 599 [46]–[47] (Kiefel CJ, Bell and Keane JJ).
[44]Ibid 599–600 [47] (Kiefel CJ, Bell and Keane JJ) (emphasis in original).
Thus s 33ZF was a power that was designed to authorise orders that advanced the effective determination of issues between the parties.[45] The plurality also observed that contextually, the legislation addressed the question whether a group proceeding should continue in other ways and it would be anomalous to use a general gap filling power to deal with the same concepts. For example, s 33M provided that the court may stay a proceeding or direct that it no longer continues as a group proceeding if the cost of identifying group members or distributing any award or settlement would be excessive having regard to the likely total amount recoverable. The plurality also noted that the time for distribution of the proceeds of a representative proceeding was at the conclusion rather than by means of an order, made pursuant to a gap filling power, at an early stage of the proceeding.
[45]Ibid 600 [50] (Kiefel CJ, Bell and Keane JJ).
In those circumstances, a CFO which was concerned with whether a third party should be involved in funding the proceedings, and the nature of the relationship between group members and the funder, was not a mechanism that the legislation had chosen to employ and could not be implied by the very general language in s 33ZF. Rather, issues of prudence and whether the costs might outweigh the benefits were to be dealt with by preventing the matter proceeding as a representative proceeding.
Within that setting we turn to the first question.
In our opinion the plaintiffs’ threshold argument cannot be upheld. The word ‘jurisdiction’ in the context of federal jurisdiction is usually referred to as the authority to adjudicate. A demarcation between jurisdiction and powers is well entrenched. The purpose of the division, as set out in s 1337A, reinforces this construction of s 1337H(2). Section 1337A says that the division deals with the jurisdiction of courts with respect to civil matters and refers to both the Judiciary Act and the ADJR Act. Section 1337B(2) confers jurisdiction on each State or Territory Supreme Court with respect to matters arising under the Corporations legislation. Jurisdiction is also conferred on lower courts but subject to general jurisdictional limits that apply to such courts. Jurisdiction is used in the sense of conferring authority to adjudicate on the identified matters. The conferral of jurisdiction in this way is not concerned with arming the relevant court with powers for the purpose of exercising that jurisdiction. The express reference to the Judiciary Act in ss 1337A(2) and (3) and other provisions such as s 1337P(1) make it plain that it will be the source of powers separate from the grant of jurisdiction itself.
It is plain that the reference to ‘jurisdiction’ in s 1337H is meant in this sense. It is the natural, more common meaning and consistent with the division as a whole. The contrary construction would produce the improbable result of there being different meanings to the word ‘jurisdiction’ in the same division.
In our opinion, the inclusion of the words ‘an application in the relevant proceeding’ in s 1337H(2) and the reference to ‘matters for determination’ does not detract from this conclusion. In the context of the Corporations Act, many substantive matters proceed as applications in a proceeding. For example, an application to wind up a company under s 459P.
It is necessary then to turn to the construction of s 1337H.
The statutory question posed by s 1337H is: which court with jurisdiction with respect to the matter is the more appropriate forum, having regard to the interests of justice? In making that assessment it is important to recall that each of the candidate courts will have jurisdiction and each will be required to aid each other and that they will be applying Commonwealth law.
The first matter to note is that s 1337H requires the court to make an assessment as to which court is more appropriate to hear and determine the proceeding. In making that assessment the court must have regard to the interests of justice. The concept of the interests of justice is a broad one requiring an evaluative assessment. No doubt one vantage point from which the interests of justice must be viewed is the interests of the parties to the litigation, but that does not mean that the interests of justice are the same as the personal interests of the parties. Further, the interests of justice are not limited to matters that ensure there is justice between the parties, but also involve the public interest in the proper and efficient use of court resources.[46]
[46]Schultz (2004) 221 CLR 400, 421 [15] (Gleeson CJ, McHugh and Heydon JJ); [2004] HCA 61; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, 188–9 [23] (French CJ); [2009] HCA 27.
In our opinion, there is no reason to depart from the approach taken in Schultz that the question does not begin with a presumption or weighting in favour of the jurisdiction in which the plaintiff has chosen to commence the action. The plaintiff does not get to load the dice in its favour by its choice of venue. That is not to say that the steps that have been taken, and the conduct of the litigation to date, are irrelevant to an application to transfer the proceeding to another court. Indeed, the history of the litigation may be an important feature in the assessment and will often, in a practical sense, have tied the litigation to the original court.
Although the interests of justice is a broad notion, and may be considered from disparate perspectives, when a court is called upon to make an assessment of the interests of justice, it must be even-handed and conscious of not equating the interests of justice with the interests of one or other of the parties.
In order to ensure that justice is done between the parties, in conformity with the public interest in the proper and efficient use of court resources, the courts are armed with various powers and procedures designed for the efficient, fair and just determination of proceedings. Those powers are conferred by legislation and Rules of Court and supplemented by implied or inherent powers. In a given case these procedures may, as a matter of practical reality, be of more assistance to one party than the other, but they are designed with the aim of justice being done between the parties and incorporate notions of equal justice with fairness to each side, a hallmark both of individual steps and the process as a whole.
Again, as Schultz demonstrates, there are many court procedures that will work to the benefit of one party but which are available to each. So, for example, procedures that allow for an expedited hearing or appeal or efficiencies in the taking of interlocutory steps may make one court a more appropriate forum when compared with another. All other things being equal, a court that has a process that is faster and cheaper than another may make it a more appropriate forum. That is because those features serve the interests of justice and as between the parties they are neutral: they do not favour one side or the other. However, it must be recognised that these endogenous processes within a court are in themselves unlikely to provide any connection to a particular proceeding. They provide consequences to the parties who are in that court and may provide a reason for why a party wishes to litigate in that court but in themselves they provide no connection to the court.
On the other hand, where a procedure favours one side at the expense of the other, as was the case in Schultz, it must be ignored for the purpose of a transfer decision because the calculus adopted by the court must be even-handed. There is no basis for the court to prefer the interests of one side over the other. In our opinion that approach, which is founded in equal treatment, also applies to s 1337H.
Other than by observing that the interests of justice will not necessarily be unrelated to the interests of one party or the other, Schultz does not deal with the situation where a court procedure, practice or entitlement favours one party but is neutral or has no impact on the other party.[47] As already noted, the plaintiffs submit that a GCO is of this kind, a proposition that KPMG contests. On the assumption that a GCO occasions no disadvantage to the other side, what is the correct approach in a transfer application?
[47]Schultz (2004) 221 CLR 400, 426 [27] (Gleeson CJ, McHugh and Heydon JJ); [2004] HCA 61.
In our opinion the ability to obtain a GCO and the fact that a GCO has been made are both potentially relevant to a transfer application. In looking at an appropriate forum, one factor that may be relevant is the practical difficulty that one or other of the parties would have in conducting the litigation in a different court. For example, a plaintiff or a defendant may legitimately contend that transferring the proceeding to another State will result in increased cost, in terms of travel, and result in the inconvenience or difficulty in securing the attendance of witnesses. Such factors are routinely taken into account in deciding the appropriate forum.
If the ability to fund the proceeding depends on the venue, then we see no reason why that factor may not be taken into account. It is also important to acknowledge that the ability to fund litigation, and the stultifying effect that costs may have on the ability of a party to bring an otherwise bona fide claim, has a broader public interest dimension.
The desirability of ensuring that a court’s processes do not prevent bona fide claims from being determined in the absence of good reason is a fundamental aspect of the judicial process. The court’s processes are designed to facilitate, not retard, the hearing and determination of disputes. They are designed to ensure that litigants have genuine access to the courts to resolve disputes through the efficient and fair application of the judicial process. Part 4A of the Supreme Court Act is a manifestation of legislative policy that group proceedings may be an efficient means of resolving claims without the need for a multiplicity of proceedings and thereby aid access to justice. Section 33ZDA is a reflection that justice in the proceeding can be served by a particular costs model and, as reflected in the extrinsic material, is also seen as facilitating access to justice. Whether it does so in a particular case depends on the evaluative judgment of the court in the exercise of judicial power.
Further, there is an additional factor that applies where the party has already obtained a GCO. Unlike Schultz, which was forward looking, there has already been an assessment by the Court that justice in the proceeding would be served by a GCO. To recognise the benefit of an order that has already been obtained does not require any assessment as to whether the policy underlying the power to make the order was appropriate or inappropriate. Indeed, to require the receiving court to ignore steps that have already been taken would lead to unnecessary duplication and disputation over matters that had already been resolved in the proceeding.
It is not necessary to go so far as to conclude that a GCO gives rise to accrued rights and interests in favour of the group members or the law practice, but the GCO will undoubtedly inform the nature of the retainer pursuant to which the law practice will have acted. The broad language of s 1337H is plainly wide enough to allow the court to assess the impact of a transfer on these arrangements.
The existence of s 1337P itself is a clear statutory recognition that a transfer should not be the occasion to return the parties to a starting point or erase steps that have been taken. Returning the parties to the beginning would plainly not be in the interests of justice and would involve a waste of the resources already expended by both the parties and the court and would enable parties to revisit and re-litigate interlocutory processes that had already been decided on their merits.
As already noted, KPMG challenges the premise that a GCO is, as between the parties, neutral. KPMG submits that the GCO produced a corresponding disadvantage to it because without the GCO it would not be put to the expense of defending the action and that accordingly the issue falls squarely within the approach in Schultz. Relying on Brewster, KPMG submits that the court taking into account the GCO would involve it deciding whether or not it is in the interests of justice for the proceedings to continue, which is a matter in which the court has no legitimate interest.
In addition to the observations in Brewster, it may also be accepted that it is not the role of a court to determine whether an action should be brought. That is a matter for the parties. In the context of criminal proceedings, courts have regarded the decision as to whether or not to prosecute as unreviewable. In part that approach is informed by the importance of maintaining the reality and perception of the judicial process, which would be compromised if courts were perceived to be in any way concerned with who is to be prosecuted and for what.[48] That principle applies equally to civil proceedings.
[48]Maxwell v The Queen (1996) 184 CLR 501, 534 (Gaudron and Gummow JJ); [1996] HCA 46; Likiardopoulos v The Queen (2012) 247 CLR 265, 269 [2] (French CJ), 279–80 [37] (Gummow, Hayne, Crennan, Kiefel and Bell JJ); [2012] HCA 37.
In our opinion a GCO is of a different kind to the issue considered in Schultz. In their reasons, the plurality identified individual, common and conflicting interests. In relation to conflicting interests, ‘justice would not attribute greater weight to one rather than the other’.[49] The making of a GCO is not about balancing or mediating between the competing interests of the parties. The court does not assess whether it would be better or worse for the defendant to have to defend a proceeding. Nor is it a step that advances the matter for trial. It regulates the relationship between the plaintiffs, and the law practice that acts for them, and group members. Unlike in Schultz there is no change to the basis on which the issues in the proceeding as between the parties will be determined.
[49]Schultz (2004) 221 CLR 400, 422 [16] (Gleeson CJ, McHugh and Heydon JJ); [2004] HCA 61.
Nor does Brewster assist in the resolution of the present issue. The question in Brewster was one of statutory construction. Brewster was concerned with the effect of a general power in s 33ZF, which the High Court held was supplementary in nature and not designed to address the considerations that are relevant to a CFO. Brewster does not stand for any general proposition that it is necessarily wrong for a court to determine whether a case should continue as a group proceeding or the terms on which it might do so, including terms relating to the relationship between the plaintiffs, group members and the law practice that is acting in the proceeding.
Indeed, Brewster confirms that a court has a legitimate role in determining whether an action proceeds in some circumstances. In this regard, the plurality contrasts the general ‘gap filling power’ in s 33ZF with other provisions such as ss 33M and 33N, which require the court to make an assessment as to whether the action should proceed as a group proceeding, including by reference to costs and benefits. Unlike s 33ZF, s 33ZDA specifically empowers the Supreme Court to make a GCO. The reasoning in Brewster was not directed to such a provision.
Plainly, once a proceeding is commenced, there is no impediment to a court taking into account whether the outcome of interlocutory process might produce the effect of stultifying the proceeding, and the desirability, as an incident of the interests of justice, of ensuring that does not occur in the absence of good reason. The issue can be seen in the context of orders staying a proceeding. Where a stay order may deny justice to the party affected by it, it ought not be employed unless it is the only fair way of protecting the interests of the party seeking the order.[50]
[50]Gao v Zhang (2005) 14 VR 380, 384 [12] (Ormiston JA); [2005] VSCA 200; Rozenblit v Vainer (2018) 262 CLR 478, 485 [14]–[15] (Kiefel CJ and Bell J); [2018] HCA 23.
The conclusion that a GCO should be made in a given case gives no imprimatur of the court that the group proceeding ought to be brought. Nor does the court give weight to the desire of the defendant to avoid being sued. The power to make a GCO only arises when a group proceeding has commenced. As part of the evaluative exercise there is no reason why a judge should ignore the consequences for the litigation in the event that a GCO is not made or in deciding the terms on which an order might be made.
In summary, there is neither a textual nor contextual reason that would require the court to ignore a GCO that it had made when it later came to the decision as to the appropriate forum. It would be a striking construction of s 1337H, which is expressed in very broad terms, to require the court to ignore an order that it had made pursuant to a power conditioned on the interests of justice and in respect of which the plaintiff and the law practice may have ordered their affairs. Further, neither Schultz nor Brewster preclude the court from taking the GCO into account in the transfer application under s 1337H. In our opinion both the existence of a GCO and the consequences for the GCO in the event of a transfer are relevant to the choice of forum.
Taking into account the fact that, in federal jurisdiction, a GCO is available in Victoria but not NSW does not involve any invidious policy choices of competing legislatures. The Commonwealth Parliament has determined that, unless it otherwise provides, the local provisions will be adopted. That does not permit any assessment that one is better than another. Equally, where for example under the Corporations legislation each court has jurisdiction, none is given primacy and each is required to aid the other, the concept of forum shopping has much less potency.
The second basis on which KPMG says that the GCO is irrelevant is that it should not have been made before the application to transfer had been determined. We reject that submission.
First, there has been no appeal from the decision to grant the GCO.
Second, as will appear in our discussion of question 3, the circumstances in which the GCO was made may be relevant to an application to transfer. But it does not make the GCO irrelevant. The decision to transfer should not be made on the false premise that no GCO exists.
We would answer question 1: ‘Yes’.

QUESTION 2 — If the proceeding is transferred to NSW, will the GCO continue to be binding and able to be amended or revoked?

Question 2 is concerned with the related questions whether, if an order for transfer to the Supreme Court of NSW is made, the GCO will continue to bind the group members and their solicitor, and if so, whether it may be amended or revoked by the Supreme Court of NSW.

KPMG’s submissions

KPMG submits that the order will continue to operate in NSW unless amended or set aside by the Supreme Court of NSW. The plaintiffs submit that the order will no longer operate once the order for transfer is made or alternatively there is at least a real risk that this will be the case.
As already observed, the GCO by its terms only applies to the proceeding in the Supreme Court of Victoria.[51] KPMG did not advance a contrary submission.
[51]See [60] above.
The only potential source of power identified by KPMG that would continue the operation of the GCO after transfer is s 1337P(2) of the Corporations Act. It is set out above but is worth repeating to assist in an understanding of the submissions of the parties:
If a proceeding is transferred or removed to a court (the transferee court) from another court (the transferor court), the transferee court must deal with the proceeding as if, subject to any order of the transferee court, the steps that had been taken for the purposes of the proceeding in the transferor court (including the making of an order), or similar steps, had been taken in the transferee court.
KPMG submits that the GCO was an order that constituted a ‘step that had been taken for the purposes of the proceeding’ and is therefore taken to have been made in the transferee court.
It says that s 1337P(2) confers power on the Supreme Court of NSW to vary or revoke the GCO. It also says that the Court would have power to vary or revoke the GCO under s 183 of the Civil Procedure Act2005 (NSW). That provision confers power on the Court to make any order that it ‘thinks appropriate or necessary to ensure that justice is done in the proceeding’. It says that the power to vary a GCO which has already been made before the transfer is distinguishable from the making of a common fund order, which was held to be outside the scope of s 183 in Brewster.
KPMG submits that s 183 of the Legal Profession Uniform Law (NSW), which prohibits contingency fees, has no application because it prohibits a law practice from entering into a contingency costs agreement but does not address the different question about the effect of an order of a court. Second, it submits that if there is a conflict between s 1337P(2) and s 183, the former prevails by force of s 109 of the Constitution. It says that the extent to which s 183 is relevant to the discretion given by s 1337P to the transferee court to revoke or amend the GCO would be a matter for argument in the Supreme Court of NSW.
The directors adopted KPMG’s submissions.

The plaintiffs’ submissions

The plaintiffs submit that s 1337P does not apply to a GCO.
The plaintiffs submit that s 1337P only operates in respect of orders, or kinds of orders, that are within the power of the transferee court to make. The plaintiffs emphasise that the premise of s 1337P is that the transferee court is to deal with the proceeding as if a step, or similar step, taken in the transferor court, had been taken in the transferee court. The reference to ‘similar step’ is said to reinforce the view that the step could, as a matter of power, have been taken in the transferee court, albeit that it does not require an exact correspondence in form. The plaintiffs submit that s 1337P is not intended to require the transferee court to proceed on the basis of a step that it would not have had power to make.

Analysis

As already noted, a convenient starting point for the analysis is s 79 of the Judiciary Act, which provides that laws of the State in which federal jurisdiction is exercised are picked up and applied as federal law. It follows that s 33ZDA of the Supreme Court Act will not apply in the Supreme Court of NSW. The source of any powers in the Supreme Court of NSW to deal with the GCO must be found in the Corporations Act or in NSW legislation picked up by s 79.
KPMG says that s 1337P has the effect that the GCO will apply in the Supreme Court of NSW and provides a power to that Court to amend or revoke the order. The correctness of that submission depends on the proper construction of s 1337P. In particular, two interrelated questions of construction arise: does s 1337P apply to an order or step that the transferee court has no power to make; and does the phrase ‘subject to any order of the transferee court’ either confer or recognise a power to deal with the GCO?
Starting with its text, s 1337P requires the transferee court to deal with the matter as if a step or similar step had been taken in that court. The words ‘as if’ introduce a statutory fiction or hypothetical contrast and require the transferee court to proceed on that basis.[52] The reference to a similar step is important. If every step that had been taken in one court is required to be treated as a step taken in the second court, there would be no need to refer to the notion of similar steps. We agree with the plaintiffs that the reference to similar steps allows for some adaptation of local practice where the subject matter is sufficiently similar. It strongly suggests that the transferee court has the capacity to make an order or take a step in the same terms or in similar terms that had been made in the transferor court.
[52]R v Hughes (2000) 202 CLR 535, 551 [24] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ); [2000] HCA 22; H Lundbeck A/S v Sandoz Pty Ltd [2022] HCA 4, [26] (Kiefel CJ, Gageler, Steward and Gleeson JJ).
The fact that s 1337P(2) is a deeming provision in the sense that it creates a statutory fiction is also important. It is one thing to treat a matter that would have been within power to make as having been made (for example an order for a statement of claim or concise statement); it is quite another to treat a court as having made an order that it has no power to make and no mechanism to regulate.
The point can be illustrated by reference to a GCO. The position in Victoria prior to transfer is straightforward.
Section 33ZDA(3) provides an express power to amend a GCO. In addition, the power to revoke a GCO, as an interlocutory order, cannot be doubted. In Victoria, the power to amend or revoke would fall to be exercised having regard to the criteria that conditions the making of a GCO. So, for example, in exercising the power to amend the percentage of the amount recovered that is payable to the law practice, the court would have regard to what is appropriate or necessary to ensure that justice is done in the proceeding. Part of the architecture that enables the court to make a GCO is the express disapplication of anything to the contrary in the Legal Profession Uniform Law.
Significant complications would arise if the Supreme Court of NSW was required to treat a GCO as if it was a step taken in that Court in circumstances where the Supreme Court of NSW has no power to make a GCO. Nor could the Supreme Court of NSW take a similar step to making a GCO at least insofar as the GCO seeks to provide for the calculation of costs based on a proportion of the settlement or judgment sum. Further, unlike s 33ZDA(3), there is no provision disapplying the prohibition in s 183.
Another difficulty in treating s 1337P as extending to orders and steps that cannot be taken in the transferee court arises where, as expressly contemplated by s 1337H(2), it is proposed to transfer an application in a proceeding or where there is an unresolved interlocutory application in respect of a transferred proceeding.
The point can be illustrated by considering an application to transfer a group proceeding from the Supreme Court of Victoria to the Supreme Court of NSW, in relation to which there is an extant summons for a GCO. Section 1337P(2) refers to the taking of a step in a proceeding being treated as having been taken in the transferee court. The filing of a summons for interlocutory orders would comfortably fit within the description of taking a step in the proceeding. KPMG submits that in those circumstances the application would need to be determined in the NSW Court, applying NSW law as picked up by s 79 of the Judiciary Act, and would fail because there was no power in the Court to make it. As KPMG accepted in argument, the application would fall on barren ground, not because it failed on the merits but because there was no power to make it.
It would be entirely anomalous for s 1337P to treat an application as having been made to a court that has no domestic apparatus to deal with it.
Section 1337P(2) is a deeming provision and it is the provision, rather than a decision of the transferee court, that gives legal force to the steps taken in the first court. It is not expressed to be a conferral of power to take that step. The distinction is even more important where the power in the transferor court to take the relevant step is accompanied by other provisions that regulate the exercise of the power but where there are no cognate or similar provisions in the transferee court.
The evident purpose of s 1337P is to preserve steps taken in one court so they do not have to be duplicated in the transferee court. Again, an example might be a concise statement filed in a Federal Court proceeding which is later transferred to the Supreme Court. The concise statement could be accepted as a step ‘similar’ to a statement of claim such that there would be no need to file that type of pleading once the proceeding was transferred. The purpose of s 1337P is not to extend the powers of the transferee court or to require it to proceed on the fiction that it had made an order that it has no power to make.
KPMG seeks to meet the argument by contending that s 1337P(2) itself confers a power on the transferee court to make ‘any order’ which would accommodate orders regulating the GCO. We reject that submission. Section 1337P(2) refers to an order that overrides the effect of the provision. It does not arm the transferee court with the panoply of powers that may exist in the transferor court that permit or regulate a topic that is outlawed in the transferee State.
In context, the phrase ‘subject to any order of the transferee court’ has a limited role to play. It enables the transferee court to make an order that prevents the automatic operation of the section. That is, it leaves a discretion in the transferee court to prevent the operation of the deeming provision. In some senses, it leaves the transferee court with the discretion to require some level of duplication. That is unsurprising, given that ultimately it will be for the transferee court to determine the appropriate steps that need to be taken to hear and determine the matter in that court having regard to its own powers, practices and procedures. The steps taken in the transferor court may not, in a given case, be conducive to the proper management of the proceeding and the transferee court is given power to prevent the section having its effect.
Whether s 1337P(2) confers or alternatively assumes a power to order that a step that had been taken not stand as a step taken in the transferee court does not matter. It is a threshold power to prevent the section from taking effect according to its terms. It is not an ongoing power that continues to regulate the subject matter in the transferee court. Even allowing for the general approach that does not read conferrals of power and jurisdiction on courts narrowly, it is not possible to read s 1337P as a plenary power to amend orders that had been made in the first court, nor a conferral of power to make orders of that kind. Rather, s 1337P provides that a step, or similar step, is to be taken as having been made in the second court and thereafter the usual or local powers of the transferee court are available to deal with the proceeding, including those aspects that are deemed to have occurred in the transferee court.
Section 79 picks up the laws in the State where jurisdiction is exercised. The construction advanced by KPMG would be quite inconsistent with this principle and would in effect import a range of powers that are not available in the State in which federal jurisdiction is being exercised.
It follows that, as a matter of construction, s 1337P would not operate to give legal force to the GCO in the Supreme Court of NSW in the event the proceeding is transferred.
Having thus resolved the construction of s 1337P it is not necessary, and undesirable, to deal with the constitutional argument advanced by the plaintiffs that s 1337P would be invalid if it purported to require the Supreme Court of NSW to apply the GCO as if it were an order of that court.
We would answer question 2: (a) ‘No’; (b) ‘does not arise’.

QUESTION 3 — Should the proceeding be transferred to the Supreme Court of NSW?

KPMG submits that the GCO is irrelevant to the decision to transfer and the NSW Supreme Court is the more appropriate forum, having regard to the following:
(a)Arrium was headquartered in Sydney, as were the Chief Financial Officer, Company Secretary, the Group Finance, Treasury and Internal Audit teams, and the Share Registry. The relevant board meetings, pre-audit and audit committee meetings, financial statements and declarations occurred in Sydney, and the relevant locations in respect of the capital raising (including the offices of the underwriter) were all in Sydney;
(b)the relevant KPMG partners and team were based in Sydney, conducted the relevant meetings and work between KPMG’s Sydney offices and Arrium’s Sydney offices, and continue to reside in Sydney;
(c)the applicants reside in NSW. The surviving directors live elsewhere;
(d)the liquidators, and the company books and records are in Sydney. Liquidator examinations occurred in the Supreme Court of NSW in 2018. In 2019 the applicants obtained orders for examination and access to documents in the Supreme Court of NSW. In 2022, the High Court ultimately affirmed their entitlement to such orders, and the applicants have indicated an intention to seek to renew the orders for access in the Supreme Court of NSW but have not yet done so;
(e)the liquidator examinations, two related proceedings concerning similar facts, were heard to conclusion across 38 concurrent hearing days in the Supreme Court of NSW in 2021 (a third settled). Appeals were heard in August 2022 in Sydney;
(f)the legal representatives of all parties are primarily based in Sydney, the majority of whom have been instructed since the liquidator examinations (and, for the first to fourth respondents, the three related proceedings) in the Supreme Court of NSW; and
(g)the Funder is based in NSW and the funding agreement is to be construed in accordance with and governed by the laws of NSW.
Based on these matters, KPMG submits that there is a preponderance of connecting factors with NSW so as to make it the appropriate or natural forum for the litigation.
KPMG says that the availability of the GCO is the only reason the proceeding is in Victoria and that it is difficult to imagine a clearer instance of the kind of forum shopping against which the legislature has set its face.
The plaintiff submits that the GCO is a relevant consideration in the transfer decision but even if it were not, having regard to the following the transfer application is weak:
(a)the proceeding is in federal jurisdiction with a single composite body of law, largely supplied by the Corporations Act;
(b)the damage and events are nationwide, involving publication over the internet;
(c)to the extent State legislation may be involved, KPMG pleads, by way of its defence, to rely on, among other things, the Partnership Act 1958;
(d)KPMG is a national firm with offices in both Sydney and Melbourne;
(e)the location of Arrium is not relevant. It is not a party;
(f)the group members are nationwide; and
(g)witnesses, including expert witnesses, have not yet been identified.
The plaintiffs submit that the mandatory considerations in s 1337L do not favour NSW.
Putting the GCO to one side, in our view, there are more factors that connect the proceeding to NSW than Victoria. That said, on the state of the agreed facts, the factors do not strongly point in favour of NSW.
Importantly, the claim is brought under Commonwealth law. The cause of action involves the publication of financial accounts and capital raising documents of a publicly listed company across the internet with shareholders and potential investors Australia-wide. Those matters are neutral when comparing NSW and Victoria. They do not suggest that NSW is a more appropriate forum.
There is nothing in the agreed facts that allows any meaningful judgment to be made about the extent to which hearing the proceeding in Victoria would result in any inconvenience or practical problems for the parties, witnesses or legal representatives. The nature of the litigation, the fact that there is effectively a national legal profession, and the fact that KPMG is a national firm all suggest that the Supreme Court of Victoria is no less an appropriate forum for the litigation.
In terms of the practical conduct of the litigation there is, on the agreed facts, little to distinguish between Victoria and NSW. It may be inferred that some travel might be required for NSW witnesses but who they might be or whether they will give evidence is unknown. Moreover, the extent to which interstate witnesses can be accommodated by audio-visual link is unknown.
Similarly, it may be inferred, although not the subject of an agreed fact, that all the documents, and it is likely to be a document-intensive case, are available in electronic form and can be accessed from either location.
The two plaintiffs reside in NSW and their cause of action would have accrued in that State. This is a factor that connects the proceeding to NSW. We are conscious that there has been some litigation in NSW involving Arrium and its former officers. That might suggest either that there is a natural connection to NSW or there might be some familiarity within the Supreme Court of NSW that might be of value in the management of the litigation. The facts do not give any bases on which this factor might be of practical significance in the conduct of this litigation.
On balance, and putting to one side the GCO, the constellation of factors relied on by KPMG are just sufficient to persuade us that NSW is the more appropriate forum for the litigation.
In our opinion, the existence of a GCO is an additional matter that ties the proceeding to Victoria. The existence of a GCO does not mean that a transfer should not be made. However, it is a factor that is relevant for the court to take into account and in some circumstances, it may be a powerful factor. The evidence shows that without the funding mechanism that is in place, the probability is that the proceeding will not continue. This is a legitimate matter for the court to take into account.
In weighing the importance that might attach to the GCO it is relevant to take into account that it was obtained after the issue of forum was raised. That fact does not mean that the GCO should be ignored or given no weight. It is not suggested that commencing the proceeding in Victoria was an abuse of process or that Victoria is a clearly inappropriate forum. Given the agreed facts that without the funding mechanism supplied by the GCO there is a probability that the proceeding would not continue, the existence of the GCO is a matter on which we would place some weight.
It should be acknowledged that group proceedings have required courts to make decisions that would be considered very unusual in other litigation settings. For example, a court may have to determine which of two overlapping group proceedings should proceed and a variety of potential solutions are available.[53] The funding arrangements that are in place may be a factor to take into account in the context of managing overlapping claims. They may give rise to difficult questions. Similarly, in the context of considering the appropriate forum, the existence of different funding models may be relevant. The issue is more straightforward in this case because there does not appear to be a viable alternative funding model.
[53]Wigmans v AMP Ltd (2021) 270 CLR 623; [2021] HCA 7; Fuller v Allianz Australia Insurance Ltd (2021) 65 VR 78; [2021] VSC 581.

Taking into account the importance of the GCO to the proceedings, that it was made because it was determined to be necessary or appropriate in the interests of justice in the proceeding and the relatively neutral state of the agreed facts as to the natural forum, we are not persuaded that the Supreme Court of NSW is the more appropriate forum. Consequently, the proceeding should not be transferred to that court.
We would answer question 3: ‘No’.

Conclusion

The questions reserved should be answered in the manner indicated in these reasons.
Before making any order reflecting these reasons, the Court will hear from the parties.
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SCHEDULE OF PARTIES

ANTHONY BOGAN First Applicant

MICHAEL THOMAS WALTON Second Applicant

V

THE ESTATE OF PETER JOHN SMEDLEY (DECEASED) First Respondent

ANDREW GERARD ROBERTS Second Respondent

PETER GRAEME NANKERVIS Third Respondent

JEREMY CHARLES ROY MAYCOCK Fourth Respondent

KPMG (A FIRM) ABN 51 194 660 183 Fifth Respondent

ANTHONY BOGAN	First Applicant
MICHAEL THOMAS WALTON	Second Applicant
V
THE ESTATE OF PETER JOHN SMEDLEY (DECEASED)	First Respondent
ANDREW GERARD ROBERTS	Second Respondent
PETER GRAEME NANKERVIS	Third Respondent
JEREMY CHARLES ROY MAYCOCK	Fourth Respondent
KPMG (A FIRM) ABN 51 194 660 183	Fifth Respondent

[2023] VSCA 256

26 October 2023