Nelson v Beach Energy

Case [2022] VSC 424


IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL COURT

GROUP PROCEEDINGS LIST

S ECI 2021 04440

EDWARD JOHN NELSON

GAIL CHRISTINE NELSON

Plaintiffs

v
BEACH ENERGY LTD (ACN 007 617 969) Defendant

S ECI 2022 00256

MARK RICHARD SANDERS Plaintiff
v
BEACH ENERGY LTD (ACN 007 617 969) Defendant

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JUDGE:

Nichols J

WHERE HELD:

Melbourne

DATE OF HEARING:

1 April 2022; 19 May 2022

DATE OF RULING:

1 August 2022

CASE MAY BE CITED AS:

Nelson v Beach Energy; Sanders v Beach Energy

MEDIUM NEUTRAL CITATION:

[2022] VSC 424

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GROUP PROCEEDINGS — Costs — Application for a Group Costs Order — Costs to be calculated as a percentage of the amount of any award or settlement recovered — Where one proposed GCO incorporates a “ratchet” or sliding scale — Whether proper evidentiary basis to make the proposed ratchet GCO — Judicial discretion in open-textured legislation — Principles to be applied — Supreme Court Act 1986 (Vic) s 33ZDA — Allen v G8 Education Ltd [2022] VSC 32, Fox v Westpac; Crawford v ANZ [2021] VSC 573, Boganv The Estate of Peter John Smedley (Deceased) [2022] VSC 201, applied — Application granted in one proceeding.

PRACTICE AND PROCEDURE — Group proceedings — Multiplicity — Representative proceedings commenced against same defendant in relation to same controversy — Overlap between claims — Plaintiffs in each proceeding seeks permanent stay of the other — Wigmans v AMP Ltd (2021) 270 CLR 623, Perera v GetSwift Ltd (2018) 263 FCR 92, Klemweb Nominees Pty Ltd v BHP Group Ltd (2019) 369 ALR 583 — Application granted in one proceeding.

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APPEARANCES:

Counsel Solicitors
For the Plaintiffs in the Nelson Proceeding Mr A Pound SC with
Ms K Dovey
Slater and Gordon Lawyers
For the Plaintiff in the Sanders Proceeding Mr D Sulan SC with
Ms W Liu
Shine Lawyers
For the Defendant Mr R Craig QC with
Ms J Findlay
Herbert Smith Freehills

HER HONOUR:

Part I:   Introduction and background

  1. Edward John Nelson and Gail Christine Nelson and Mark Richard Sanders have each commenced overlapping representative proceedings in this Court under Part 4A of the Supreme Court Act 1986 (Vic) against Beach Energy Limited.  The proceedings concern substantially the same claims arising out of the same factual substratum and were commenced on the same day, as representing essentially the same open class of shareholders in Beach.[1]

    [1]           The Nelson plaintiffs foreshadowed minor amendments to their group definition to bring their represented class into conformity to with the slightly wider group covered by the Sanders proceeding.  Each class includes persons who acquired ordinary shares during the relevant period.  The Sanders proceeding also includes persons who acquired a long exposure in respect of Beach shares by entering into equity swap confirmations.  The Sanders claim period is one day longer than the Nelson claim period.  No party suggested that this minor difference in claim periods was a material consideration on this application.

  1. The defendant, Beach, a…

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AGLC
Nelson v Beach Energy; Sanders v Beach Energy [2022] VSC 424
Case
[2022] VSC 424
Decision Date

CaseChat Overview and Summary

In the matter of Nelson v Beach Energy, the court was tasked with examining applications for group costs orders in the context of a proceeding concerning the same defendant and controversy. The plaintiffs, Nelson, sought a group costs order which would apply a sliding scale or "ratchet" to the percentage of costs to be paid, depending on the amount of any award or settlement recovered. The nature of the dispute involved the calculation of costs in a group proceeding, specifically whether the proposed sliding scale was supported by a proper evidentiary basis.

The primary legal issues before the court were whether the proposed group costs order, incorporating a sliding scale, was appropriate given the legislative framework and whether the court should grant a permanent stay of the other proceeding due to multiplicity and overlap between the claims. The court considered the principles outlined in previous cases such as Allen v G8 Education Ltd, Fox v Westpac, Crawford v ANZ, and Bogan v The Estate of Peter John Smedley (Deceased), as well as broader principles of judicial discretion in open-textured legislation.

The court found that the proposed sliding scale for the group costs order was not adequately supported by evidence, thereby rejecting the application for such an order. Regarding the multiplicity and overlap between the claims, the court granted a permanent stay of one of the proceedings in line with the principles established in Wigmans v AMP Ltd, Perera v GetSwift Ltd, and Klemweb Nominees Pty Ltd v BHP Group Ltd. The court concluded that the overlap between the claims justified a permanent stay in one of the proceedings, thus ensuring the efficiency and fairness of the legal process.

The final orders of the court included the rejection of the proposed sliding scale group costs order and the granting of a permanent stay of one of the proceedings. The decision underscored the importance of evidentiary support for proposed group costs orders and the need to manage multiplicity and overlap between claims to avoid unnecessary duplication and expense.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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