Hilton & Jashar v Melbourne Underwater World Pty Ltd
[2004] VSC 357
•14 July 2004
| Do Not Send for Reporting | ||
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 5257 of 2000
| HILDA HILTON | Plaintiff |
| - and - | |
| RODNEY JASHAR | Claimant |
| v | |
| MELBOURNE UNDERWATER WORLD PTY LTD and ORS | Defendants |
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JUDGE: | GILLARD J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 14 July 2004 | |
DATE OF RULING: | 14 July 2004 | |
CASE MAY BE CITED AS: | Hilton v Melbourne Underwater World Pty Ltd and Ors | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 357 | Revised 24 September 2004 |
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GROUP PROCEEDING Part 4A Supreme Court Act 1986 – Proceeding compromised and approved – One claimant later dissatisfied with assessment procedure – Parties agree to amend settlement agreement – Amendment approved – Judge to determine damages on the papers – Undesirable to amend procedures after approval.
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APPEARANCES: | Counsel | Solicitors |
| For Rodney Jashar | Mr A.J. Keogh | Maurice Blackburn Cashman |
| For the 1st, 2nd, 3rd, 4th, 5th and 7th Defendants | Mr J.J. Gleeson | Minter Ellison |
HIS HONOUR:
During April 2000 persons who visited the Melbourne Aquarium in King Street Melbourne and those in the vicinity of the aquarium were exposed to Legionnella bacteria. Some suffered Legionnaires disease as a result.
A group proceeding writ was issued on 4 May 2000 pursuant to Part 4A of the Supreme Court Act 1986, naming seven defendants. The proceeding was discontinued against the sixth defendant but proceeded against the balance.
The proceeding came on for hearing before me in February 2004 and was settled between the parties. On 11 February 2004 I made a number of orders including an order pursuant to s.33V of the Act approving the settlement which was evidenced by an agreement. The agreement was annexed to the authenticated orders.
Pursuant to the agreement, the defendants agreed to pay compensation to those group members who subsequently responded to an advertisement and filed a claim. I understand that 157 group members filed claims and I have been informed that most of those claims have been finalised.
The agreement provided a procedure to determine the entitlement of each claimant to compensation. It is a two stage process. The claimant was obliged to deliver claim documents to the defendants’ solicitors by 5 March 2004. The claim documents are identified in Clause 4.1 of the settlement agreement.
That step having been performed, the first stage of the process involved the parties attempting to settle the claim. If that failed the process moved to the second stage. This involved a member of counsel, Mr Paul Scanlon QC, assessing the compensation on the papers. His decision, according to the agreement, was to be final and binding without any right of appeal.
As I have stated, most of the claims have been finalised, but one claimant who went through the first stage of the procedure objects to the second stage. He is Rodney Mark Jashar, who went through the first stage which was unsuccessful. He does not want his claim assessed by agreed counsel. He seeks to have his claim assessed by the court.
To that end an application was made to Master Wheeler on 1 June 2004 to make certain orders. The defendants’ solicitors consented to the Master making an order that the agreement be amended, in effect, leaving it open to a claimant to opt to have the court assess the compensation. I may say that the order then went on to provide that affidavits were to be filed by either party by a certain date, that notices to attend for cross-examination were to be served by 18 June 2004 and that the claim was to be referred to the court for assessment by a Master.
The latter orders are contrary to the terms of the settlement agreement and whilst the front of the order records that the defendants consented to the proposed application, I have been informed that the defendants did not consent to the latter matters but consented to the settlement agreement being amended.
The matter returned to Court before Master Kings on 30 June this year and she expressed some doubts about the Master having jurisdiction to make the orders that were made. I, myself, have grave doubts whether a Master does have jurisdiction to hear such an application but I have no doubts whatsoever that the orders made by the Master should not have been made.
Part 4A of the Act provides for group proceedings. The Court’s powers and jurisdiction are to be found in the provisions of the Act. It is a statutory jurisdiction.
Section 33V(i) provides: “A group proceeding may not be settled or discontinued without the approval of the court.” In my view the Court does not have jurisdiction to order the amendment of an agreed compromise. That is a matter for the parties to agree. Once the amendment is effected between the parties it must be approved pursuant to s.33V.
The parties at the moment have not formalised their agreement to amend although it is very apparent from the order made by Master Wheeler what has been agreed. I have been informed this morning that the parties have agreed to an amendment to their agreement and they will formalise it later today.
The effect of the amendment is to give the option to a claimant to have stage two of the assessment procedure heard by a Judge of this Court. It is clear that the parties propose to go down that path.
As the parties have consented to such a course and because most of the other claims have been finalised, I see no reason why the Court should not approve the agreement as amended and I am prepared to do so when it has been properly formalised. I expect that to be done later today.
I will order that the orders made by Master Wheeler on 1 June 2004 be set aside and I will make an order approving the amended deed when the amendment is formalised.
That step has led to a number of disputes between the parties which were debated before me this morning and I expressed a number of provisional views. I then stood the matter down and the parties had further discussions. They have agreed to matters which resolve the disputes.
First of all, the parties agree that the matter should be assessed by a Judge of this Court and in the circumstances, in my view, that is an appropriate course to follow. The defendants stated this morning that they opposed any course extending time as to the lodgment of claim documents. Under the terms of the agreement, there are certain time limits; the first one is found in Clause 4.2 which is in these terms: “The claimant or the claimant’s representative must deliver the claim documents to the defendants’ lawyer by 5 March 2004.”
In fact, the claimant delivered his claim documents in accordance with that provision, however after that date it became apparent that the claimant had an arguable claim for economic loss. A dispute arose between the parties, the claimant wishing to have the right to make that claim and the defendants’ solicitors pointing out that he was out of time.
As I have stated and did state in the course of debate, what binds the parties is the agreement between them. Clause 8.1 permits an extension of time. It is in these terms - “8.1: The time for doing any act or thing under this settlement agreement may be extended by agreement between the claimant’s representative and the defendants’ lawyer or in the absence of agreement by direction of the agreed counsel.”
As a result of the amendment to the agreement, “agreed counsel” now should read “agreed counsel or Court.” So clearly, the parties have empowered or authorised agreed counsel or the Court to extend time. I heard debate in relation to this question and I opined a provisional view that time should be extended unless this resulted in any prejudice to the defendants. I did raise the issue that the defendants have been denied the first stage process in relation to the total claim, namely the claim including a claim for economic loss but I have been informed the defendants do not wish to go down that path. No other prejudice was suggested to me and I think justice in those circumstances requires that time be extended and accordingly, I am prepared to do so.
The other question that arose was the question of whether there would be an appeal from any order made by this Court and I note that in the agreement it was agreed that there would be no appeal. However, once the parties have invoked the Court’s jurisdiction, the question arises whether the parties can agree to restrain the Court hearing an appeal.
I did point out in argument that the Court may restrain a party contrary to the agreement if that party should appeal, but I will say no more in relation to that until that stage is reached, if at all.
The other matter that caused some concern, to the Court more than the parties, was the procedure that should be followed in relation to what now is Stage 2 procedure, to be heard by a Judge. That is the question of hearing or deciding the matter on the papers. That is the procedure that is laid down in the agreement and unless the parties agreed to the contrary, that is the way the matter must proceed.
The Supreme Court Rules provide for the form of a trial and the way it is to be conducted, including providing for the way evidence is to be adduced before the Court. If the parties agree that it should be done on the papers, then that is the way it will be conducted. That is the way evidence is to be placed before the Court and the trial conducted – see Order 40 of the Rules of Court.
I expressed a view based on my experience in this area, that there could be a real contest in relation to future economic loss. It may be that the Court would be confronted by experts’ reports which could express views a long way apart. This would raise an issue which has to be resolved without the benefit of seeing and hearing the witnesses. I raised these concerns with the parties, but the parties have indicated to me that they wish the agreement procedure to be followed and accordingly I will say no more in relation to that.
Mr Gleeson of Counsel, who appears for the defendants, pointed out that it may be that the Judge could raise any concerns he may have with Counsel. I think that may be a practical solution if the Judge felt that it was all too difficult to make the assessment. I say no more in relation to that question and if a problem should arise hereafter, then so be it.
It has been agreed that I should hear the matter on the papers. I have indicated that I will be returning to the Court at the beginning of October. I will be sitting in the Court of Appeal but I have little doubt that I will be able to find time to give this matter consideration and to make the determination, and accordingly, I have indicated that I should be able to do that by 29 October 2004.
A number of consequential amendments have to be made to the times set out in the agreement and, as the Court clearly has the power given to it by the parties pursuant to Clause 8.1, I am prepared to extend the times, namely, paragraph 4.2 to 11 August 2004, paragraph 5.6 to 8 September, and the time in 5.3 to be extended to 29 October 2004.
It has been foreshadowed that an application is going to be made for costs and I will now hear that application. Who is making an application for costs?
(Discussion ensued concerning costs)
HIS HONOUR (continuing):
I wish to say something about what the parties have agreed to do. Let me say that you all agreed to the amendments but it does undermine group proceedings. If there was a real contest you might have found a judge not very sympathetic to this. But then I can see why the parties have done it and I am not being critical. It is going to save costs and it is probably a good move but it does undermine group proceedings. Once finalised, everybody in a group proceeding is bound by whatever happens. Here the parties are now allowing a person to go behind the agreement. A group proceeding, once brought to an end, finalises the rights of the parties and claimants who are identified and make claims. Where the proceeding is concluded by settlement, the settlement binds all members of the group who have not opted out. In order to reach settlement, often there are concessions made by the parties. The parties and eventually the Court do their best to give effect to and protect the interests of the members of the group but there are weaknesses inherent in the whole procedure. Claimants are to have their say but in the end the settlement represents a compromise of the various interests. Having been settled and approved, it undermines the whole effect if at a later time one of the group members wishes to in effect opt out of the settlement regime. Such a course should not be encouraged. I understand there were pragmatic considerations which played their part in the agreement to vary the settlement agreement.
That leads me then to the point that I go on to make about costs. You are doing all this by agreement and that being so, you had to come to Court and you had to get proper orders. I do not think the Master’s orders were correct, in fact, I have no doubt that the way they were framed, they were incorrect. I think in those circumstances, since this is all by agreement, I will not make any order for costs in relation to this application because it is all part and parcel of your agreement to continue the proceeding. But I do point out that this is unusual. I understand why the parties have done it. It only involves one person but it does to some extent undermine the group procedure, which is to bind everybody.
I think I also made some observations when this was all being settled earlier, that you cannot allow these things to drag on by giving rights to people to do other things. I have allowed an opt out here because I was persuaded to do so. I think in those circumstances there should not be any order for costs.
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