Lam v Rolls Royce PLC (No 5)

[2016] NSWSC 1332

Supreme Court

New South Wales

Medium Neutral Citation:	Lam v Rolls Royce PLC (No 5) [2016] NSWSC 1332
Hearing dates:	16 September 2016
Date of orders:	16 September 2016
Decision date:	16 September 2016
Jurisdiction:	Common Law
Before:	Beech-Jones J
Decision:	(1) Order that all claims by group members for damages or other relief against the defendant arising out of the events onboard QF32 on 4 November 2010 who have not, in accordance with the orders made on 27 March 2015, registered their intention to claim compensation for psychological injury and who are listed in annexure A be dismissed pursuant to s 183 of the Civil Procedure Act 2005 (NSW); (2)   Order that the dismissal of the claims identified in order (1) is to operate as a final determination of the rights of the individual group members listed in annexure A to claim damages or other relief against the defendant arising out of the events onboard QF32 on 4 November 2010.
Catchwords:	REPRESENTATIVE ACTION – class closure – dismissal of claim by non-registered group members – order that dismissal operates as final determination of claims
Legislation Cited:	Civil Procedure Act 2005 (NSW)
Cases Cited:	Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 2) [2003] VSC 212 King v AG Australia Holdings Limited [2002] FCA 1560 Lam v Rolls Royce PLC [2013] NSWSC 805 Lam v Rolls Royce PLC (No 3) [2015] NSWSC 83 Lam v Rolls Royce (No 4) [2016] NSWSC 487 Matthews v SPI Electricity Pty Ltd (2013) 39 VR 255; [2013] VSC 17
Category:	Procedural and other rulings
Parties:	Sandy Lam (Plaintiff) Rolls Royce PLC Reg No 4706930 (Defendant)
Representation:	Counsel: J.E. Rowe (Plaintiff) N.E. Chen (Defendant)   Solicitors: LHD Lawyers (Plaintiff) Holman Fenwick Willan (Defendant)
File Number(s):	2013/037342
Publication restriction:	None

ExTEMPORE Judgment

1. HIS HONOUR: This judgment concerns an application by the defendant, Rolls Royce PLC (“Rolls Royce”), for the dismissal of the claims of some group members of a representative action who have not registered their claims against Rolls Royce in accordance with the Court's orders. One of the orders sought is that the dismissal operates as a final determination of those claims.

2. The nature and scope of the proceedings was described in Lam v Rolls Royce PLC [2013] NSWSC 805 at [3] to [5]. Rolls Royce is sued as the entity responsible for the manufacture of an engine that is said to have failed on a Qantas fight that departed from Changi airport in Singapore on 4 November 2010. The action was brought on behalf of those persons who were onboard the flight and who suffered a psychological injury as a result of their experiences consequent upon the engine failing.

3. The number of persons aboard the flight was approximately 470. Over time, the number of persons said to fall within the relevant group has been reduced as various passengers have opted out. Further, for the reasons given in Lam v Rolls Royce PLC (No 3) [2015] NSWSC 83 (“Lam (No 3)”), I made orders to give effect to what is sometimes described as "class closure". In Matthews v SPI Electricity Pty Ltd (2013) 39 VR 255; [2013] VSC 17 at 23, Forrest J succinctly described this concept as follows:

"This expression means, as I understand it, that a court may require group members to identify themselves by a certain point in time as having an interest in any judgment or proposed settlement. Failing a declaration of such interest (normally achieved by registering with the Court or a firm of solicitors by a certain date), any subsisting entitlement to damages of the group members relating to the claim may be extinguished."

4. In Lam (No 3) I determined that passengers with overseas contact details who did not register with the plaintiff's solicitors would be removed from the class (at [29] to [30]). I also determined that passengers with Australian contact details who did not register with the plaintiff's solicitors were to remain in the class, but they could not participate in any settlement or resolution without the leave of the Court (at [31]).

5. To that end, on 27 March 2015, orders were made requiring persons to register with the plaintiff's solicitors by 3 June 2015 and thereafter provide certain basic particulars of their claims. Those orders provided, inter alia, that group members who did not register "shall not, without leave of the Court, be entitled to claim compensation pursuant to any settlement." To facilitate these orders, the opt-out notices that were sent to group members stated, inter alia:

"If you have a claim for psychological injury arising from the engine failure incident on Qantas Airbus flight QF32 on 4 November 2010 and you do not register your claim by the deadline or otherwise opt out of the proceedings, you will be bound by any settlement of the class action but will not, without otherwise obtaining the Court's permission, be entitled to claim a share of any settlement moneys. Also, if you do not register and a settlement is proposed, you will not be notified of this settlement proposal and will not have the opportunity to oppose the settlement. This means that you will lose the right to sue the defendant for any injury or loss suffered and will lose your rights to any compensation."

6. Otherwise, the proceedings have continued at a relatively slow pace since Lam (No 3). An attempt to have the proper law of the plaintiff's claim judicially determined was aborted, but it was eventually agreed that the relevant law was that of England and Wales (see Lam v Rolls Royce (No 4) [2016] NSWSC 487 at [11]). Further, at some point Rolls Royce admitted, for the purposes of these proceedings only, that its manufacture of the engine was not undertaken to the appropriate standard and that that was the cause of the engine's failure. In practical terms, that admission meant that the only remaining issue for the plaintiff and the group members who wished to claim compensation was whether each of them could establish that they had suffered a recognisable psychiatric illness as a result of the events consequent upon the engine failure and, if so, the level of damages they could recover. This development was not, however, sufficient to lead to a settlement of proceedings. Instead, on 10 June 2016, orders were made establishing a detailed regime for registered group members to provide particulars and some material in support of their claims.

7. In respect of non-registered group members, those orders enabled them to apply for leave to pursue a claim by filing an application to that effect by 1 August 2016. Further, the plaintiff's solicitors were ordered to forward notices to the non-registered group members, advising them of the effect of the orders that were made. The notice made it clear to the recipients that there was a deadline of 1 August 2016 to make any application for leave to pursue a claim. The notice also stated,

"If you do not apply for leave by 1 August 2016, or the Court does not grant you leave to make a claim for compensation, you will lose the right to claim compensation arising from the events of 4 November 2010 for the defendant, and the Court will dismiss the claim that you have against it."

8. In the end result, none of the unregistered group members filed an application for leave. Hence, in an effort to achieve some certainty for its position, Rolls Royce now seeks orders dismissing the claims of the remaining 84 unregistered group members and also seeks an order confirming that it "operates as a final determination" of their rights "to claim damages or relief" against Rolls Royce.

9. Nothing in Part 10 of the Civil Procedure Act2005 (NSW) (“CPA”) expressly confers a power on the Court to make an order dismissing a group member's claim in advance of the determination of the claim of the representative plaintiff or to determine that it is a final resolution of that claim in respect of the events pleaded. Rolls Royce nevertheless contends that s 183 of the CPA empowers the Court to make the orders sought. That section provides:

“183   General power of Court to make orders

In any proceedings (including an appeal) conducted under this Part, the Court may, of its own motion or on application by a party or a group member, make any order that the Court thinks appropriate or necessary to ensure that justice is done in the proceedings.”

10. I agree that s 183 enables the Court to make orders dismissing group members' claims, including orders dismissing them in advance of a determination of the representative plaintiff's case. The entire representative action procedure would be undermined if a defendant could not attain the certainty of knowing that, if circumstances warrant it, group members' claims have been dismissed. Further, I accept that the Court can determine that the dismissal operates as a final determination.

11. In his written submissions, counsel for Rolls Royce, Mr Chen, traced through some decisions in a number of other representative actions, identifying instances where notices were sent to group members advising them that if they did not either register their claims or bring forward material to support their claim, or both, their right to claim compensation would be extinguished (see for example King v AG Australia Holdings Limited [2002] FCA 1560 at [6] and Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 2) [2003] VSC 212 at [65]). Mr Chen also identified instances where orders were made which on their face appeared to finally determine (adversely) a group member's claim (see, for example, Matthews v SPI Electricity Pty Ltd (2013) 39 VR 255; [2013] VSC 17 at [29], and the examples cited at [31]).

12. That said, none of these decisions extended to discuss the basis upon which those orders were being made. This may be because the matter was so obvious it did not warrant further consideration. Otherwise, I would certainly not proceed on the basis that for a significant period of time other Courts have been issuing idle threats to members of representative actions that if they do not register or bring forward material, their claims to compensation would be extinguished. It would significantly undermine the regime for representative actions provided for in Part 10 of the CPA if a Court could not make an order that had the effect of finally determining a group member's rights and could not do so in advance of the representative party's own case being determined.

13. Some textual support for the powers to make the orders sought is derived from s 182 of the CPA, which provides:

“182   Suspension of limitation periods

(1)    On the commencement of any representative proceedings, the running of the limitation period that applies to the claim of a group member to which the proceedings relate is suspended.

(2)    The limitation period does not begin to run again unless either the member opts out of the proceedings under section 162 or the proceedings, and any appeals arising from the proceedings, are determined without finally disposing of the group member’s claim.

(3)    However, nothing in this section affects the running of a limitation period in respect of a group member who, immediately before the commencement of the representative proceedings, was barred by the expiration of that period from commencing proceedings in the member’s own right in respect of a claim in the representative proceedings.

(4)    This section applies despite anything in the Limitation Act 1969 or any other law.” (emphasis added)

14. Subsection 182(2) appears to contemplate the Court finally determining a group member's claim and that must extend to either upholding it or dismissing it in such a way as to finally determine it.

15. In this case, unregistered group members have had every opportunity to notify of their intention to make a claim and bring forward material to support it. The incident that gave rise to the liability occurred in November 2010. In 2015, they were advised of the need to register and the potential consequences if they chose not to. They were given a further opportunity to that effect over some months this year, but none have taken it up. In my view, the time has come when the Court can proceed on the basis that the unregistered group members either do not wish to pursue a claim or do not have material they wish to put forward in support of a claim and that any claims they have should now be extinguished.

16. Accordingly, I make the following orders:

1. Order that all claims by group members for damages or other relief against the defendant arising out of the events onboard QF32 on 4 November 2010 who have not, in accordance with the orders made on 27 March 2015, registered their intention to claim compensation for psychological injury and who are listed in annexure A be dismissed pursuant to s 183 of the Civil Procedure Act 2005 (NSW);

2. Order that the dismissal of the claims identified in order (1) is to operate as a final determination of the rights of the individual group members listed in annexure A to claim damages or other relief against the defendant arising out of the events onboard QF32 on 4 November 2010.

**********

Sandy Lam -v- Rolls Royce PLC No. 2013/37342

Annexure "A"

Non-registered Group Members

No.	SURNAME	GIVEN NAME 1	STATE	COUNTRY
1	Abubakar	Muhammadrizalbi	NSW	AUSTRALIA
2	Barkas	JohnP	NSW	AUSTRALIA
3	Barlow	Jennifer	NSW	AUSTRALIA
4	Butterfield	Belinda	NSW	AUSTRALIA
5	Caffin	Peter	NSW	AUSTRALIA
6	Carter	Craig	NSW	AUSTRALIA
7	Caspari	David P	NSW	AUSTRALIA
8	Coacoi	Pamela	NSW	AUSTRALIA
9	Coleman	Sean	VIC	AUSTRALIA
10	Danoy	Jeanpierre	QLD	AUSTRALIA
11	Douglass	Brian	NSW	AUSTRALIA
12	Eccles	Andrew	NSW	AUSTRALIA
13	Edser	Jane	NSW	AUSTRALIA
14	English	Gary	NSW	AUSTRALIA
15	Evans	David	QLD	AUSTRALIA
16	Gan	Kok Hui	NSW	AUSTRALIA
17	Gasporroni	Sofia	NSW	AUSTRALIA
18	Gray	Rebecca	NSW	AUSTRALIA
19	Hall	Victor	NSW	AUSTRALIA
20	Hall	Lesley	NSW	AUSTRALIA
21	Hall	Margaret	NSW	AUSTRALIA
22	Hardin	Rachel	NSW	AUSTRALIA
23	Harrington	Timothy	NSW	AUSTRALIA
24	Hattersiey	Robert	NSW	AUSTRALIA
25	Henderson	James	NSW	AUSTRALIA
26	Hettige	Camilus	VIC	AUSTRALIA
27	Hicks	Matthew	NSW	AUSTRALIA
28	Hill	Dwain	NSW		AUSTRALIA
29	Hunter	Julie	NSW		AUSTRALIA
30	Jayewardene	Hiran	NSW		AUSTRALIA
31	Johnson	Simon	NSW		AUSTRALIA
32	Johnson	Mark	NSW		AUSTRALIA
33	Johnston	Terry	NSW		AUSTRALIA
34	Jones	Keith	NSW		AUSTRALIA
35	Jones	Deian	NSW		AUSTRALIA
36	Kelly	Leonidas	NSW		AUSTRALIA
37	Korbel	Anthony	NSW		AUSTRALIA
38	Korbel	Alyna	NSW		AUSTRALIA
39	Lavikainen	Jukka	QLD		AUSTRALIA
40	Lewis	Elizabeth	NSW		AUSTRALIA
41	Lock	Simon	NSW		AUSTRALIA
42	Mar	Wayne	NSW		AUSTRALIA
43	Mathewson	Kathleen	QLD		AUSTRALIA
44	McGrath	Daniel	NSW		AUSTRALIA
45	McGuiness	Judy	AUSTRALIA
46	McMahon	Ross	NSW		AUSTRALIA
47	Moningka	Octaviana	NSW		AUSTRALIA
48	Moss	Kathryn	NSW		AUSTRALIA
49	Newman	Stuart	NSW		AUSTRALIA
50	Notenboom	Michael	AUSTRALIA
51	Ormerod	David	ACT		AUSTRALIA
52	Paliatseas	Evangelos	NSW		AUSTRALIA
53	Penney	Robert	NSW		AUSTRALIA
54	Pratten	Belinda	NSW		AUSTRALIA
55	Raoufirad	Vahid	NSW		AUSTRALIA
56	Reed	Ailia	NSW		AUSTRALIA
57	Renz	Volker	NSW		AUSTRALIA
58	Richards	Peter	NSW		AUSTRALIA
59	Richards	Rosemary	NSW		AUSTRALIA
60	Risk	James	NSW	AUSTRALIA
61	Ryan	Clare	AUSTRALIA
62	Savage	Peter	VIC	AUSTRALIA
63	Shepherd	Neil	NSW	AUSTRALIA
64	Smith	Paul	QLD	AUSTRALIA
65	Stoddart	Lorna	NSW	AUSTRALIA
66	Strautnieks	Eriks	NSW	AUSTRALIA
67	Swale	Natasha	AUSTRALIA
68	Thompson	Erin	NSW	AUSTRALIA
69	Unsworth	Grace	NSW	AUSTRALIA
70	Vijh	Kayat	AUSTRALIA
71	Vilppola	Leena	QLD	AUSTRALIA
72	West	David	NSW	AUSTRALIA
73	White	Peter	NSW	AUSTRALIA
74	Williams	Peter	NSW	AUSTRALIA
75	Wong	Eric	NSW	AUSTRALIA
76	Wooster	Keith	VIC	AUSTRALIA
77	Wooster	Susan	VIC	AUSTRALIA
78	Wooster	Doris	VIC	AUSTRALIA
79	Wooster	Tyler	VIC	AUSTRALIA
80	Wooster	James	VIC	AUSTRALIA
81	Xue	Jing	ACT	AUSTRALIA
82	Yates	Bruce	NSW	AUSTRALIA
83	Yates	Carole	NSW	AUSTRALIA
84	Zantis	Lana	AUSTRALIA

Decision last updated: 20 September 2016