Hodges v Waters (No 2) - [2013] FCA 877

FEDERAL COURT OF AUSTRALIA
Hodges v Waters (No 2) [2013] FCA 877

Citation: Hodges v Waters (No 2) [2013] FCA 877

Parties:
CHARLES HODGES & MARK HODGES AS TRUSTEES OF THE CHARLES HODGES SUPERANNUATION FUND v ANDREA JANE WATERS, KPMG, WELLINGTON INVESTMENT MANAGEMENT LIMITED, OCTAVIA LIMITED (ADMINISTRATOR APPOINTED), GUY HUTCHINGS, JOHN ARTHUR WHATELEY, JACK SIMON DIAMOND, CRAIG ROBERT WHITE, DEBORAH BEALE, STEVEN KRIS KYLING, STUART ROBERTSON PRICE, MICHAEL GORDON HISCOCK, MICHAEL CHRISTODOULOU KING and PAUL JOSEPH MANKA

File number: NSD 324 of 2009

Judge: PERRAM J

Date of judgment: 29 August 2013

Catchwords: PRACTICE AND PROCEDURE – Representative proceedings – Application for Merck orders – Whether appropriate to make orders in the circumstances

Date of hearing: 7 August 2103

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 9

Counsel for the Applicant: Mr M B J Lee SC, Mr W A D Edwards

Solicitor for the Applicant: Johnson, Winter & Slattery

Counsel for the First and Second Respondents: Mr J R J Lockhart SC, Mr J A Arnott

Solicitor for the First and Second Respondents: Allens

Counsel for the Tenth Respondent: Mr T Marskell

Solicitor for the Tenth Respondent: Wotton + Kearney

Counsel for the Eleventh Respondent: Mr S A Goodman

Solicitor for the Eleventh Respondent: Kelly & Co Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 324 of 2009

BETWEEN:
CHARLES HODGES & MARK HODGES AS TRUSTEES OF THE CHARLES HODGES SUPERANNUATION FUND
Applicant

AND:
ANDREA JANE WATERS
First Respondent

KPMG
Second Respondent

WELLINGTON INVESTMENT MANAGEMENT LIMITED
Third Respondent

OCTAVIA LIMITED (ADMINISTRATOR APPOINTED)
Fourth Respondent

GUY HUTCHINGS
Fifth Respondent

JOHN ARTHUR WHATELEY
Sixth Respondent

JACK SIMON DIAMOND
Seventh Respondent

CRAIG ROBERT WHITE
Eighth Respondent

DEBORAH BEALE
Ninth Respondent

STEVEN KRIS KYLING
Tenth Respondent

STUART ROBERTSON PRICE
Eleventh Respondent

MICHAEL GORDON HISCOCK
Twelfth Respondent

MICHAEL CHRISTODOULOU KING
Thirteenth Respondent

PAUL JOSEPH MANKA
Fourteenth Respondent

JUDGE:

PERRAM J

DATE OF ORDER:

29 AUGUST 2013

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The parties bring in short minutes to give effect to these reasons.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 324 of 2009

BETWEEN:
CHARLES HODGES & MARK HODGES AS TRUSTEES OF THE CHARLES HODGES SUPERANNUATION FUND
Applicant

AND:
ANDREA JANE WATERS
First Respondent

KPMG
Second Respondent

WELLINGTON INVESTMENT MANAGEMENT LIMITED
Third Respondent

OCTAVIA LIMITED (ADMINISTRATOR APPOINTED)
Fourth Respondent

GUY HUTCHINGS
Fifth Respondent

JOHN ARTHUR WHATELEY
Sixth Respondent

JACK SIMON DIAMOND
Seventh Respondent

CRAIG ROBERT WHITE
Eighth Respondent

DEBORAH BEALE
Ninth Respondent

STEVEN KRIS KYLING
Tenth Respondent

STUART ROBERTSON PRICE
Eleventh Respondent

MICHAEL GORDON HISCOCK
Twelfth Respondent

MICHAEL CHRISTODOULOU KING
Thirteenth Respondent

PAUL JOSEPH MANKA
Fourteenth Respondent

REASONS FOR JUDGMENT

There are two questions for resolution: (a) whether this Court can, and if it can, whether it should order a statement of common issues for the proceedings which includes as common issues the claims of group members who are…

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.

Continue reading Hodges v Waters (No 2)

Details

AGLC: Hodges v Waters (No 2) [2013] FCA 877
Case: [2013] FCA 877
Decision Date

CaseChat Overview and Summary

The case Hodges v Waters (No 2) [2013] FCA 877 before the Federal Court of Australia involves Charles Hodges and Mark Hodges as Trustees of the Charles Hodges Superannuation Fund as applicants against Andrea Jane Waters, KPMG, Wellington Investment Management Limited, and several other respondents. The applicants seek damages due to their investment in the MFS Premium Income Fund, a failed property trust. The central dispute concerns whether the court can order a statement of common issues that includes claims from group members who are not named applicants and the appropriate form of such orders.

The legal issues before the court were whether it could order a statement of common issues to include claims from non-applicant group members and, if so, what form these orders should take. The applicants sought to include the claims of the trustees of the Manlyn Superannuation Fund, who were not named applicants but were group members. KPMG, one of the respondents, argued against this, citing practical considerations. The court considered the need for willingness to be included in the proceedings, adequate representation, protection against costs risk, discovery requirements, and procedural evidentiary rules.

Justice Perram concluded that while it was practical to include the claims of the Manlyn Superannuation Fund trustees in the initial trial, certain conditions must be met. These include the trustees' willingness to be included, adequate representation, and an undertaking to consent to a discovery order and to accept procedural rules of evidence as if they were parties. The court favoured KPMG's proposed orders, subject to the inclusion of the Manlyn Superannuation Fund trustees' claims and the aforementioned conditions. The court found that neither party's position was without substance, and each party succeeded to some extent, leading to no order as to costs.

Orders