Hodges v Waters (No 3) - [2014] FCA 233

FEDERAL COURT OF AUSTRALIA
Hodges v Waters (No 3) [2014] FCA 233

Citation: Hodges v Waters (No 3) [2014] FCA 233

Parties:
CHARLES HODGES & MARK HODGES AS TRUSTEES OF THE CHARLES HODGES SUPERANNUATION FUND v ANDREA JANE WATERS, KPMG, WELLINGTON INVESTMENT MANAGEMENT LIMITED, OCTAVIAR 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, PAUL JOSEPH MANKA, FERNANDO ESTEBAN, RAYMOND KELLERMAN, DAVID MARK ANDERSON, OCTAVIAR LIMITED (IN LIQUIDATION) ACN 107 863 390 and OCTAVIAR ADMINISTRATION PTY LTD (IN LIQUIDATION) ACN 101 069 390

File number: NSD 324 of 2009

Judge: PERRAM J

Date of judgment: 17 March 2014

Catchwords:
PRACTICE AND PROCEDURE – Representative proceedings – Federal Court of Australia Act 1976 (Cth) s 33Q and s 33H(1)(b) – application to establish a sub-group – whether sub-group could be formed where claims of proposed sub-group members not falling within the nature of the claims identified in originating process

PRACTICE AND PROCEDURE – Representative proceedings – opt out notice – whether Court should approve an opt out notice containing advice

Legislation: Part IVA of the Federal Court of Australia Act 1976 (Cth) s 33C, s 33H, s 33J(4), s 33Q, s 33ZE(1)

Cases cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 cited
Mercedes Holdings Pty Limited v Waters (No 8) [2013] FCA 601 cited
Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 4) [2010] FCA 749 applied
Prudential Assurance Co Ltd v Newman Industries Ltd (No. 2) [1982] 1 Ch 204 cited
Wong v Silkfield Pty Ltd (1999) 199 CLR 255 considered

Date of hearing: 13 March 2014

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 34

Counsel for the Applicant: Mr M B J Lee SC, Mr J C Conde

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 W 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

Counsel for the Nineteenth and Twentieth Respondents: Mr S W Aspinall

Solicitor for the Nineteenth and Twentieth Respondents:
Henry Davis York 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

OCTAVIAR 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

FERNANDO…

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 3)

Details

AGLC: Hodges v Waters (No 3) [2014] FCA 233
Case: [2014] FCA 233
Decision Date

CaseChat Overview and Summary

This case involved the Hodgeses, trustees of the Charles Hodges Superannuation Fund, as applicants who sought to establish a sub-group within a representative proceeding brought under Part IVA of the Federal Court of Australia Act 1976. They sought to include members who had suffered non-reflective losses in addition to reflective losses, which was different from the original claims. The auditors argued that the court lacked the power to direct the formation of such a sub-group, as it would exceed the nature of claims specified in the originating process. The applicants argued that the court had the power to form a sub-group and that it was not necessary for the claims of the sub-group to be of the same nature as those of the main group. However, the court held that the power to establish a sub-group was limited by the nature of the claims specified in the originating process and that the proposed sub-group could not be formed as their claims fell outside the nature of claims identified in the originating process.

The court also considered the applicants' request for an opt-out notice for group members who might have non-reflective claims. The court held that the opt-out notice should not contain partisan advice that might be incorrect and misleading. The court declined to direct the issue of the proposed opt-out notice and suggested that the form proposed by KPMG could be used instead, subject to any necessary adjustments.

Finally, the court made orders to dismiss paragraphs 1 to 3 of the orders sought by the applicants, stand over the balance of the application, order the applicants to pay the respondents' costs, grant leave to appeal upon condition that the appeal is pursued expeditiously, vacate the hearing of the separate questions, and stand over the matter for further directions.

Orders