FEDERAL COURT OF AUSTRALIA
King v GIO Australia Holdings Ltd [2000] FCA 617
PRACTICE AND PROCEDURE – representative proceeding – Federal Court of Australia Act 1976 (Cth) (“FCA Act”) Pt IVA – representative proceeding brought by GIO shareholder against GIO, adviser to GIO, and directors of GIO relating to advice given to reject AMP takeover offer – respondents’ application for orders that proceeding be struck out or no longer continue as representative proceeding – whether group members have “claims against the same person” as required by s 33C(1)(a) of FCA Act – whether the claims of all the group members “give rise to a subtantial common issue of law or fact” as required by s 33C(1)(c) – meaning of the word “claim” in s 33C(1) – identification of group
WORDS AND PHRASES – “claim”
Federal Court of Australia Act 1976 (Cth) Pt IVA, ss 33C, 33ZB
Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 169 ALR 616 referred to
Philip Morris (Australia) Ltd v Nixon [2000] FCA 229 considered
Finance Sector Union of Australia v Commonwealth Bank of Australia (1999) 94 FCR 179 considered
Femcare Ltd v Bright [2000] FCA 512 referred to
Nixon v Philip Morris (Australia) Ltd (1999) 165 ALR 515 considered
Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398 referred to
Wong v Silkfield Pty Ltd (1999) 165 ALR 373 consideredLaw Reform Commission, Grouped Proceedings in the Federal Court, Report No. 46, 1988
SHANE ROBERT KING v GIO AUSTRALIA HOLDINGS LTD (ACN 054 573 401), GRANT SAMUEL & ASSOCIATES PTY LTD (ACN 050 036 372), DAVID MORTIMER, BRUCE HOGAN, STEWART STEFFEY, RONALD ASHTON, MARINA DARLING, ANDREW KALDOR, LLOYD LANCE, DAVID O’HALLORAN AND IAN POLLARD
N 955 OF 1999
MOORE J
12 MAY 2000SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 955 OF 1999
BETWEEN:
SHANE ROBERT KING
APPLICANTAND:
GIO AUSTRALIA HOLDINGS LTD
(ACN 054 573 401)
FIRST RESPONDENTGRANT SAMUEL & ASSOCIATES PTY LTD
(ACN 050 036 372)
SECOND RESPONDENTDAVID MORTIMER
THIRD RESPONDENTBRUCE HOGAN
FOURTH RESPONDENTSTEWART STEFFEY
FIFTH RESPONDENTRONALD ASHTON
SIXTH RESPONDENTMARINA DARLING
SEVENTH RESPONDENTANDREW KALDOR
EIGHTH RESPONDENTLLOYD LANCE
NINTH RESPONDENTDAVID O’HALLORAN
TENTH RESPONDENTIAN POLLARD
ELEVENTH RESPONDENTJUDGE:
MOORE J
DATE OF ORDER:
12 MAY 2000
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The notices of motion filed on 5 April 2000 by the first respondent, the second respondent, the third, sixth, eighth, ninth, tenth and eleventh respondents, the fourth and seventh respondents and the fifth respondent are dismissed save to the extent that orders are sought concerning s 1318 of the Corporations Law.
2. The respondents pay the applicant’s costs of the notices of motion.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 955 OF 1999
BETWEEN:
SHANE ROBERT KING
APPLICANTAND:
GIO AUSTRALIA HOLDINGS LTD
(ACN 054 573…
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- Case
- [2000] FCA 617
- Decision Date
CaseChat Overview and Summary
The central legal issue was whether the proceeding could be maintained as a representative action under Part IVA, particularly in light of the requirements outlined in section 33C(1)(a) and (c) of the Federal Court of Australia Act. The court had to examine whether each group member had a claim against each respondent and whether the claims were of a kind that could be the subject of a representative proceeding. Additionally, the court needed to assess if the statutory threshold of having a large number of affected individuals was met.
The court closely examined the pleadings and the legislative framework, referencing the Full Court's decision in Philip Morris (Australia) Ltd v Nixon. The court determined that the plaintiff's claims were not suitable for a representative proceeding as they did not satisfy the requirement that each group member had a claim against each respondent. The court found that the allegations of collective conduct did not establish a sufficient basis for the claims to proceed as a representative action. Consequently, the court dismissed the notices of motion filed by the defendants, except in relation to certain orders concerning section 1318 of the Corporations Law. The court also ordered the respondents to pay the applicant’s costs of the notices of motion.
Orders
Orders of the court
1. The notices of motion filed on 5 April 2000 by the first respondent, the second respondent, the third, sixth, eighth, ninth, tenth and eleventh respondents, the fourth and seventh respondents and the fifth respondent are dismissed save to the extent that orders are sought concerning s 1318 of the Corporations Law.
2. The respondents pay the applicant’s costs of the notices of motion.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Established by: MOORE J
The second issue raised in the notices of motion was whether the threshold requirement of s 33C(1)(c) was also satisfied. Consideration of the issues The centrepiece of the submissions of the respondents on the first issue is the recent judgment of the Full Court in Philip Morris (Australia) Ltd v Nixon [2000] FCA 229. The reasons of the members of the Full Court can, for present purposes, be approached at two levels. The first is what was required, in the abstract, to enable a proceeding to be commenced as a representative proceeding under Pt IVA. The second is what were perceived to be the deficiencies in the case pleaded by the applicants in that matter which led to a conclusion the proceeding (as then framed (per Sackville J) or at all (per Spender and Hill JJ)) could not be brought as a representative proceeding under that Part. It is convenient to start with the leading judgment of Sackville J with whose reasons, with one qualification, both Spender and Hill JJ agreed. After referring briefly to the history of the proceeding and outlining the legislative scheme, Sackville J analysed, in some detail, the pleadings. It would be unproductive for me to endeavour to summarise or paraphrase that analysis and equally unproductive to repeat it by quoting it. It is sufficient to note that the claim or claims were by those suffering the alleged ill effects of smoking and were made against Australian manufacturers and distributors of cigarettes. The claims were cast in terms that would justify a conclusion that the allegation was that the ill effects suffered by any given member of the group was caused by smoking cigarettes manufactured or distributed by any one or more of the respondents: see par 61 of the judgment of Sackville J. His Honour then discussed the way in which the issue of whether the proceeding could be brought under Pt IVA had been approached by the primary judge. Significantly, for present purposes, reference was made to the approach of the primary judge to the requirements of s 33C(1)(a). The primary judge had referred to one of his earlier judgments on this question, Symington v Hoechst Schering Agrevo Pty Ltd (1997) 78 FCR 164, in which he had held that each group member must have a claim against each respondent. Sackville J’s summary of the primary judge’s reasons continued and reference was made to a submission made to the primary judge by one respondent that s 33C(1)(a) had not been complied with because some applicants may not have had claims against some of the respondents by reason of the fact that they did not smoke the cigarettes of that respondent or the respondent did not manufacture or distribute the cigarettes smoked: see par 89. Sackville J then set out the reasons of the primary judge for rejecting this submission. Those reasons, somewhat simplified, were that the claim of the applicants was founded on an allegation of collective conduct of all three respondents designed to create a false community perception about the risks associated with cigarette smoking.