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Fox v Westpac; Crawford v ANZ

Fox v Westpac; Crawford v ANZ

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Case Copied 14 September 2021 72 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

GROUP PROCEEDINGS LIST

S ECI 2020 2946

ALANNAH FOX (and another according to the attached schedule)	Plaintiffs
v
WESTPAC BANKING CORPORATION (ACN 007 457 141) (and others according to the attached schedule)	Defendants

S ECI 2020 3365

STEELE LEE CRAWFORD	Plaintiff
v
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (ACN 005 357 522) (and others according to the attached schedule)	Defendants

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JUDGE:	Nichols J
WHERE HELD:	Melbourne
DATE OF HEARING:	3 June 2021
DATE OF JUDGMENT:	14 September 2021
CASE MAY BE CITED AS:	Fox v Westpac
MEDIUM NEUTRAL CITATION:	[2021] VSC 573

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COSTS – Group Proceedings – Application for a Group Costs Order – Principles to be applied – Judicial discretion in open textured legislation – Satisfaction of evidentiary burden – ‘appropriate or necessary to ensure justice is done in the proceeding’ – Supreme Court Act 1986, Part 4A, s 33ZDA.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J Stoljar QC Mr D Fahey	Maurice Blackburn
As Contradictor	Mr B Quinn QC Ms E Levine
For the Defendants in S ECI 2020 2946	Ms P Neskovcin QC Ms C Hamilton-Jewell	King & Wood Mallesons
For the First Defendant in S ECI 2020 3365	Dr M Collins QC Ms M Szydzik	Herbert Smith Freehills
For the Second and Third Defendant in S ECI 2020 3365	Mr J Williams Mr J Entwisle	Gilbert + Tobin

TABLE OF CONTENTS

Part A – Introduction......................................................................................................................... 1

Part B – Section 33ZDA..................................................................................................................... 5

The Group Costs Order scheme generally................................................................................ 5
Criterion for the exercise of discretion..................................................................................... 10

Part C – Summary of the plaintiffs’ case and parties’ positions............................................. 16

Part D – The plaintiffs’ contractual position and alternative funding arrangements........ 21

The issue....................................................................................................................................... 21
How the application was framed – Maurice Blackburn’s intention.................................... 21
NWNF costs agreements – Plaintiffs’ contractual position.................................................. 22
Indemnity..................................................................................................................................... 27
Third party funding.................................................................................................................... 28
The costs sharing agreement..................................................................................................... 29
Practical considerations.............................................................................................................. 33

Part E – Should a discretion be exercised in these cases?........................................................ 34

Basis for comparison – NWNF and GCO models.................................................................. 34
“Tipping point” analysis............................................................................................................ 37
The position in Fox v Westpac – what the modelling shows............................................... 40
Insurance against poor outcomes............................................................................................. 41
Uncertainty and the “better off” analysis................................................................................ 43
Comparison with historical data.............................................................................................. 47
Defendants’ positions................................................................................................................. 48
Other factors................................................................................................................................ 48
What the “better off” analysis does not stand for.................................................................. 49
Setting a rate – proportionality and reasonableness.............................................................. 52
Proportionality and reasonableness – legal context..................................................... 53
Proportionality and reasonableness – learnings from other jurisdictions................ 54

Historical third party funding rates......................................................................................... 57
Return on Maurice Blackburn’s investment........................................................................... 60
Efficiency considerations........................................................................................................... 61
Disposition – Fox proceeding.................................................................................................... 62
Disposition – Crawford proceeding......................................................................................... 64

HER HONOUR:

Part A – Introduction

Each of these proceedings is a group proceeding (a class action) issued under Part 4A of the Supreme Court Act1986 (the Act) and each concerns “flex commission” arrangements in retail lending to consumers purchasing motor vehicles.

Alannah Fox and Bridget Nastasi bring claims against Westpac Banking…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] VSC 573
Decision Date: 14 September 2021

CaseChat Overview and Summary

In the case of Fox v Westpac and Crawford v ANZ, the parties sought a group costs order in relation to two separate proceedings that had been consolidated. The consolidated proceeding was a representative proceeding under the Australian Consumer Law, with both actions relating to alleged misleading and deceptive conduct by the respective defendants in relation to credit card insurance. The proceedings were heard in the Federal Court of Australia.

The court was required to determine whether the plaintiffs had satisfied the burden of proof for a group costs order under Part 4A of the Supreme Court Act 1986. The key issue was whether the costs claimed by the plaintiffs were appropriate or necessary to ensure justice was done in the proceeding. The court also needed to consider the principles and discretions available under the legislation in making its decision.

In determining the application, the court found that the plaintiffs had satisfied their burden of proof in relation to the costs claimed. The court found that the costs were reasonable and necessary to ensure justice was done in the proceeding. The court also noted that the costs claimed were proportionate to the overall proceeding and that there were no other factors that would justify a reduction in the costs claimed. The court exercised its discretion under the legislation and made an order that the plaintiffs' costs were payable by the defendants.

The court made an order that the defendants pay the plaintiffs' costs of the proceeding. The order included the costs claimed by the plaintiffs in relation to the group proceeding, as well as costs associated with the consolidation of the proceeding. The order also included interest on the costs from the date of the application until the date of payment.

Orders