Meaden v Bell Potter Securities Ltd

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FEDERAL COURT OF AUSTRALIA

Meaden v Bell Potter Securities Limited [2011] FCA 136

Citation: Meaden v Bell Potter Securities Limited [2011] FCA 136
Parties: JILLIAN ANNETTA MEADEN v BELL POTTER SECURITIES LIMITED (ACN 006 390 772)
File number: NSD 1310 of 2010
Judge: EDMONDS J
Date of judgment: 24 February 2011
Catchwords: PRACTICE & PROCEDURE – application under O 12 r 5 of the Federal Court Rules (Cth) for further and better particulars – representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth) – ‘Claimants’ defined in the statement of claim as ‘the Applicant and each group member’ – whether respondent entitled to know identity of each Claimant when the class is closed at the commencement of proceedings and the members of class are by definition known to the applicant.
Legislation: Federal Court Rules (Cth) O 12 r 5
Federal Court of Australia Act 1976 (Cth) Pt IVA
Australian Securities and Investment Commission Act 2001 (Cth)
Corporations Act 2001 (Cth)
Cases cited:

Bright v Femcare [1999] FCA 1377 applied
Connell v Nevada Financial Group Pty Ltd (1996) 139 ALR 723 applied
P Dawson Nominees Pty Ltd v Brookfield Multiplex Limited (No 2) [2010] FCA 17 cited
Peter Hanne & Associates Pty Ltd v Village Life Ltd [2008] FCA 719 cited
Harrison v Lidoform Pty Ltd (24 November 1998, unreported) applied
Phillip Morris (Australia) Limited v Nixon (2000) 170 ALR 487 cited
Thomas v Powercor Australia Limited (Ruling No 1) [2010] VSC 489 cited
Weimann v Allphones Retail Pty Ltd [2009] FCA 673 cited
Weimann v Allphones Retail Pty Ltd (No 3) [2009] FCA 1292 cited
Williams v FAI Home Security Pty Ltd [1999] FCA 1771 applied

Williams v FAI Home Security Pty Ltd (No 2) [2000] FCA 726 cited

Date of hearing: 15 February 2011
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 50
Counsel for the Applicant: Mr C D Freeman
Solicitor for the Applicant: Slater & Gordon Lawyers
Counsel for the Respondent: Mr M J Leeming SC with Mr JAC Potts
Solicitor for the Respondent: Speed and Stracey Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1310 of 2010
BETWEEN:

JILLIAN ANNETTA MEADEN
Applicant
AND:

BELL POTTER SECURITIES LIMITED (ACN 006 390 772)
Respondent

JUDGE:

EDMONDS J

DATE OF ORDER:

24 FEBRUARY 2011

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.On or before 14 April 2011 the applicant provide the respondent with the further and better particulars requested in the letter dated 28 January 2011 from the respondent’s solicitors to Mr Ben Whitwell of the applicant’s solicitors relating to paragraphs 2, 5, 6(a), 6(b), 12(b), 14(iii), 25(b)(iii) and 42 (but in the case of [42] only in respect of claimants other than the applicant) of the statement of claim dated and filed 6 October 2010.

2.The matter be listed for further directions on 2 May 2011 at 9.30 am.

3.The applicant pay the respondent’s costs of the motion, as agreed or taxed.

Note:Settlement and…

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Details
Case
[2011] FCA 136
Decision Date

CaseChat Overview and Summary

In the case of Meaden v Bell Potter Securities Ltd, the Applicant, Ms Meaden, sought to bring a representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) against the Respondent, Bell Potter Securities Ltd. The proceedings were initiated by an application and statement of claim filed on 6 October 2010. The case pertains to a claim for damages or, alternatively, equitable compensation for various alleged contraventions of the Australian Securities and Investment Commission Act 2001 (Cth) and the Corporations Act 2001 (Cth). These contraventions arose from Bell Potter's dealings as a stockbroker in relation to Progen Pharmaceuticals Limited, which had its shares listed on the Australian Stock Exchange.

The primary legal issues that the court had to address were whether Bell Potter was entitled to receive further and better particulars concerning the identity of the group members and the specifics of their claims. Bell Potter sought these particulars under Order 12 Rule 5 of the Federal Court Rules (Cth), arguing that it was necessary to constructively plead its defence. Ms Meaden opposed the request, asserting that the particulars were not essential for Bell Potter to understand the case it had to meet and that the request sought information from group members, which was contrary to established authority.

The court ruled that Bell Potter was entitled to the requested particulars to enable it to adequately prepare its defence. The court found that the need to identify the material facts on which all claims for relief were based, as highlighted by Goldberg J in FAI (No 1), Lehane J in Bright v Femcare, and Hely J in Harrison v Lidoform Pty Ltd, applied to this case. The court was fortified by these observations, which emphasized that the statement of claim must identify the rights of the represented parties and the factual basis of each element of the cause of action. The court concluded that without the particulars, Bell Potter could not adequately defend itself, and therefore, ordered Ms Meaden to provide the requested particulars by a specified date.

The final orders of the court mandated that Ms Meaden provide the particulars requested by Bell Potter by 14 April 2011 and listed the matter for further directions on 2 May 2011. Additionally, the court ordered that Ms Meaden pay Bell Potter’s costs of the motion, as agreed or taxed.

Orders

Orders of the court

1. On or before 14 April 2011 the applicant provide the respondent with the further and better particulars requested in the letter dated 28 January 2011 from the respondent’s solicitors to Mr Ben Whitwell of the applicant’s solicitors relating to paragraphs 2, 5, 6(a), 6(b), 12(b), 14(iii), 25(b)(iii) and 42 (but in the case of [42] only in respect of claimants other than the applicant) of the statement of claim dated and filed 6 October 2010.

2. The matter be listed for further directions on 2 May 2011 at 9.30 am.

3. The applicant pay the respondent’s costs of the motion, as agreed or taxed.

Note:

Background

Background to the litigation

The motion was opposed by Ms Meaden on the following bases:(1)The purpose of particulars is to enable the respondent to know the case it has to meet in order to file a defence. This is not the basis of many of the particulars sought;(2)The request is misconceived to the extent that it seeks particulars from the group members and is contrary to authority;(3)Some particulars seek evidence.NATURE OF THE PROCEEDING AND BACKGROUND Ms Meaden brought the proceeding as a representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth) (‘the FCA’). The proceeding was commenced by application and statement of claim filed on 6 October 2010. Although the application seeks various declarations, in substance the proceedings relate to a claim for damages, alternatively equitable compensation, for various alleged contraventions of the Australian Securities and Investment Commission Act 2001 (Cth) (‘ASIC Act’) and the Corporations Act 2001 (Cth) arising out of Bell’s dealings as a stockbroker in relation to Progen Pharmaceuticals Limited (‘PGL’), which had its shares listed on the Australian Stock Exchange. Of significance to the present application is the definition of the Part IVA group, which is defined in [2] of the application and the statement of claim:‘The group members to whom this proceeding relates are all persons who during the period from 13 December 2006 until 5 December 2007 (“Period”):(a)were party to a Financial Products Trading Account Agreement with the respondent (“Bell Potter");(b)acquired interest in shares in Progen Pharmaceuticals Limited (“PGL”); and(c)as at the commencement of this proceeding have entered into a funding agreement with Litigation Lending Services Limited (ACN 129 188 825) and a retainer agreement with Slater & Gordon Lawyers Limited ACN 097 297 400);(“group members”)’ (emphasis added) It can be seen from this definition that the group is, and was at the commencement of the proceeding, a closed group, all members of which must of necessity be known to Ms Meaden's solicitors. The current proceeding was preceded by two earlier claims by individuals against Bell, both of whom are understood to be within the current group in the present proceeding.(1)The first such individual is Mr Rogan Richard Yates who filed a cross-claim in a Commercial List proceeding in the Supreme Court of New South Wales on 27 March 2008, in which he made various allegations against Bell, including that certain oral representations were made concerning PGL. Bell’s then solicitors were informed in about February 2009 that Mr Yates intended to discontinue his cross-claim to join a Federal Court class action which was to be prepared by Slater & Gordon.(2)The second prior proceeding was brought by Mr Stephen and Ms Glenda Skeels in a Commercial List proceeding in the Supreme Court of New South Wales. Ms Meaden’s solicitor in the current proceeding was also the solicitor acting for the Skeels in the Skeels proceeding, and the cross-claim in the Skeels proceeding also made allegations against Bell concerning oral representations. It is also understood that the Skeels’ solicitors indicated to Bell’s then solicitors that the proceedings would be discontinued to permit the Skeels to join a Federal Court class action being prepared by Slater & Gordon.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In opposing this request, Ms Meaden merely relies on the grounds referred to in [14] and [15] above for the submission that Bell is not entitled to seek particulars at this stage. I do not agree.CONCLUSION For the foregoing reasons, I have come to the conclusion that Bell is entitled to the particulars requested in Requests 1 to 6 inclusive as well as the particulars in Request 11 in so far as the Claimants, other than Ms Meaden, are concerned, to enable it to constructively plead its defence and that Ms Meaden should be ordered to provide them now, rather than down the track following the trial of common questions. I am fortified in that view by what was said by Goldberg J in FAI (No 1) at [17] and by Lehane J and Hely J in the extracts from their respective reasons in the cases referred to by Goldberg J:‘I am prepared to accept that in some respects, as counsel for the applicants pointed out, that Pt IVA may have an impact on pleadings. Indeed, the terms of Pt IVA are such that it has to be recognised and reference to it incorporated in the statement of claim. But as Lehane J pointed out in Bright v Femcare [1999] FCA 1377 at [18]:“There is nothing in Pt IVA which dispenses with the requirement that the applicant plead the material facts on which all claims for relief are made on behalf of each group member. To the extent that that is not done the pleading, like a pleading in any other proceeding, is liable to be struck out. Equally, if a claim made on behalf of any group member is to succeed, the factual basis of each element of the cause of action will have to be established by evidence.”Hely J made similar observations in Harrison v Lidoform Pty Ltd (24 November 1998, unreported), where he said at 14:“A representative party may be able to enforce the rights of others in a proceeding brought under Part IVA but the statement of claim needs to identify what the rights of those represented are claimed to be and how they are said to arise. In my view this is necessary in order to give definition to the proceedings, and to expose the issues for determination in the proceedings. It is also necessary that class members know with some precision the nature of the case which the applicant seeks to bring on their behalf so that they can decide, in terms of s 33J, whether to opt out of a claim formulated in that way. A judgment given in a representative proceeding binds all group members other than persons who have opted out: Section 33ZB of the Federal Court of Australia Act 1976. Whilst the amended statement of claim remains in its present form, one simply does not know to what it is that group members are bound. The applicant points to ss 33Q, 33R, 33S and 33ZF as mechanisms by which orders can later be made so as to expose and determine the issues which will arise in the proceedings. On this approach, the issues in the case, insofar as it is a representative action, will emerge by some means other than the pleadings. I do not think that Pt IVA of the Act was intended to operate in this way.”Although the pleading before Hely J was quite different from the pleading before me and, in a sense, was more inadequate, I consider that the observations of his Honour are apposite to the matters presently before me.’

Ratio Decidendi

Legal Principle Established

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