Owen Brewster v BMW Australia Ltd

[2018] NSWSC 1602

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Owen Brewster v BMW Australia Ltd [2018] NSWSC 1602
Hearing dates:	22 October 2018
Date of orders:	22 October 2018
Decision date:	23 October 2018
Before:	Sackar J
Decision:	see paras [25]-[26]
Catchwords:	CIVIL PROCEDURE – class action or representative proceedings – separate determination of question – separate determination of question of whether Supreme Court has power to make a common fund order in representative proceedings – removal of separate question to the Court of Appeal – whether removal of separate question to the Court of Appeal appropriate in the circumstances
Legislation Cited:	Civil Procedure Act 2005 (NSW) Commonwealth Constitution Competition and Consumer Act 2010 (Cth) Judiciary Act 1903 (Cth) Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Blairgowrie Trading Ltd v Allco Finance Group Ltd (in liq) (No 3) (2017) 343 ALR 476; [2017] FCA 330 Director of Public Prosecutions (Cth) v JM (2013) 250 CLR 135; [2013] HCA 30 Money Max Int Pty Ltd v QBE Insurance Group Ltd (2016) 245 FCR 191; [2016] FCAFC 148
Texts Cited:	n/a
Category:	Procedural and other rulings
Parties:	Owen Brewster (Plaintiff) BMW Australia Ltd (Defendant)
Representation:	Counsel: E Holmes, R Mansted (Plaintiff) J Kirk SC, T Prince (Defendant)   Solicitors: Quinn Emanuel Urquhart & Sullivan (Plaintiff) Ashurst (Defendant)
File Number(s):	2018/9555
Publication restriction:	n/a

Judgment

Proceedings

1. On 22 October 2018 by Notice of Motion filed 10 October 2018, BMW Australia Ltd (the Defendant) sought an order pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) on the following question of law: does the Court have the power to make Order 1 sought in the Notice of Motion filed by the Plaintiff on 14 August 2018 (the Common Fund Motion)?

2. The Defendant sought this question (or more precisely the proceedings) be removed into the Court of Appeal for determination pursuant to r 1.21(1)(a) UCPR. The Defendant sought that the Common Fund Motion be stood over to a date to be fixed following determination of this separate question.

3. The Common Fund Motion filed by Owen Brewster (Plaintiff) on 14 August 2018 sought in effect a common fund order under Order 1:

Interlocutory orders sought – Common Fund Order

Upon the undertaking of each of Regency Funding Pty Ltd, the Plaintiff, and Quinn Emanuel Urquhart & Sullivan to each other and to the Court that they will comply with their obligations under the Funding Terms at Annexure A of these orders, the Court orders:

1. Subject to further order of the Court pursuant to section 183 of Civil Procedure Act 2005 (NSW) or the Court’s inherent jurisdiction, the Plaintiff and Group Members are bound by the Funding Terms at Annexure A of these orders and shall, in accordance with the Funding Terms, pay from the Resolution Sum:

(a) the Legal Costs (including Disbursements) and Administration Expenses;

(b) remuneration to the Funder in the amount of 25% of such amount of the Resolution Sum as remains after payment of the amounts specified in (a) above (or such other percentage as the Court considers reasonable at the time of approval of a settlement under section 173 or judgment under section 177 of the Civil Procedure Act 2005 (NSW)); and

(c) any GST payable in relation to (a) and (b),

prior to any distribution of the Resolution Sum to the Plaintiff and Group Members, in accordance with the Funding Terms.

4. It is out of this above application for a common fund order and also related applications for opt out orders in the Takata representative proceeding that this issue of a separate question arises and this judgment deals.

Background facts

5. The Plaintiff’s Common Fund Motion filed 14 August 2018 seeks an order that, among other things, obliges group members in the proceedings, including group members who have not entered into a funding agreement with the litigation funder Regency Funding Ltd, to pay 25% of any judgment or settlement net of legal costs and expenses to the funder (Common Fund Order). Accompanying this motion in the Takata representative proceedings was likewise an application for an opt out notice which was heard initially on 28 August 2018, and accompanied in particular by a Notice of Motion dated 8 August 2018 filed by Nissan Motor Co (Australia) Pty Ltd in related Takata proceedings (2018/9565) involving an application for a notice to be distributed to group members. Both of these issues have presently been deferred.

6. The Common Fund Order arising out of the Common Fund Motion is said to be empowered by s 183 of the Civil Procedure Act 2005 (NSW) (“CPA”) or the Court’s inherent jurisdiction.

7. Section 183 of the CPA 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.

8. Rule 28.2 of the UCPR provides:

28.2 Order for decision

The court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings.

9. Rule 1.21 of the UCPR provides:

1.21 Removal to Court of Appeal

(1) The Supreme Court in a Division may, in relation to proceedings commenced in the Division, make an order that the proceedings be removed into the Court of Appeal:

(a) if it makes an order under rule 28.2 for the decision of a question of law, or

(b) if, having stated the question to be decided or determined, it is satisfied that special circumstances exist that render it desirable to make an order for their removal into the Court of Appeal.

(2) If an order is made under subrule (1):

(a) the Court of Appeal may order that the whole or any part of the proceedings be remitted to a Division for the determination, by trial or otherwise, of the proceedings or of any question arising in the proceedings, or

(b) the proceedings may be continued and disposed of in the Court of Appeal.

(3) Proceedings may be removed into the Court of Appeal under subrule (1) even if any decision or determination in the proceedings is expressed by any Act or law to be final or without appeal.

(4) In this rule, “question” includes any question or issue in any proceedings, whether of fact or law or partly of fact and partly of law, and whether raised by pleadings, agreement of parties or otherwise.

10. For the purposes of this proceeding the affidavit of Damian John Scattini affirmed on 27 September 2018 (Mr Scattini’s affidavit) and the affidavit of John Pavlakis affirmed on 10 October 2018 (Mr Pavlakis’ affidavit) were received in evidence.

Submissions

Defendant (applicant on the motion)

11. The Defendant’s contention is that the Court has no power to make the Common Fund Order. The Defendant submits properly construed s 183 of the CPA does not authorise a Common Fund Order and the Court has no power to make the order in its inherent jurisdiction;

12. In the alternative, the Defendant submits that the proceeding involves claims made under Commonwealth legislation, being the Trade Practices Act 1974 (Cth) and Sch 2 of the Competition and Consumer Act 2010 (Cth), and accordingly involves a matter of federal jurisdiction. The Defendant submits state laws cannot of their own force confer powers on a court exercising federal jurisdiction, and accordingly s 183 of the CPA can only apply in this proceeding if “picked up” by s 79 of the Judiciary Act 1903 (Cth). It contends s 79 by its terms does not “pick up” any state law that would if enacted by the Commonwealth Parliament be contrary to the Constitution, and the Common Fund Order involves an acquisition of property other than on just terms, thereby contrary to s 51(xxxi) of the Constitution.

13. The Defendant therefore submits the Common Fund Order involves the purported exercise of a power by a court exercising federal jurisdiction which is not within the judicial power of the Commonwealth, or incidental thereto, contrary to Chapter III of the Constitution. It contends this issue has not been dealt with sufficiently on the current authorities, and in any event Money Max Int Pty Ltd v QBE Insurance Group Ltd (2016) 245 FCR 191; [2016] FCAFC 148 (“Money Max”) and Blairgowrie Trading Ltd v Allco Finance Group Ltd (in liq) (No 3) (2017) 343 ALR 476; [2017] FCA 330 (“Allco (No 3)”) on this point were plainly wrong and should not be followed (T2/1-19, T6/43-T7/1). Counsel for the Defendant sought to further distinguish Money Max on the basis that current practices in relation to common fund orders and litigation funder book-building have changed since the time that case was decided (T3/24-42).

Plaintiff (respondent on the motion)

14. The Plaintiff neither consents to nor opposes the making of the orders sought by the Defendant.

15. The Plaintiff submits it is concerned that the determination of the separate question proposed would not promote the just, quick and cheap resolution of the Common Fund Order Motion and application in the absence of a common fund order having been made, and in circumstances in which the substantive terms of any such order are not known. In these circumstances, the Plaintiff contends there is no factual matrix upon which the Court can determine the separate question application, including in the context of the current uncertainty as to the approved rate of remuneration to the funder or the precise terms to be made under a common funder order.

16. The Plaintiff notes the evidence before the Court is not final, and whilst the Defendant has acknowledged it will take Mr Scattini’s affidavit “at its highest”, the evidence is not on any view complete and adds to the uncertainty of the current factual matrix of the matter. The Plaintiff notes a concern, if the Defendant’s approach is adopted, that the Court will not hear from any of the group members in the Takata proceedings on the issue of whether a common fund order should be made, and on what terms, prior to the determination of a separate question.

17. The Plaintiff submits it is quite possible that the resolution of the separate question would not finally determine the issue of whether or not a common fund order should be made.

18. The Plaintiff further submits that if the Court is of the view that a separate question is appropriate, given the apparent likelihood of appeal by the unsuccessful party, it would be appropriate for the separate question to be removed to the Court of Appeal.

Consideration

19. In my opinion there is no doubt that the Defendant has raised a question of public importance. Having reviewed the authorities including Money Max and Allco (No 3), I am satisfied that it is clear that there is no authority that presently exists that has determined definitively or on one view at all, the questions raised by the Defendant.

20. Although there is no agreed statement of facts both parties have accepted the evidence in the two affidavits in question for the purposes of the argument. The Defendant accepts and takes no objection to the affidavit of Mr Scattini and for the purposes of this application is prepared to take the evidence at its highest (T2/23-29). Likewise the Plaintiff takes no objection to the affidavit of Mr Pavlakis on the basis of accuracy or otherwise (T8/5-14). To this extent the separate question does not involve the resolution of disputed questions of fact.

21. In addition I do not think that this determination of a separate question by the Court of Appeal will have an impact on the preparation for the hearing of the representative proceedings which is currently listed to begin 2 March 2020 with an estimate of 12 weeks. In the meantime in any event the parties are currently advancing the determination of common questions and discovery and are coming back as presently contemplated on the 16 November 2018 for case management and the determination of further outstanding issues.

22. However, counsel for the Defendant submitted correctly in my view that this separate question does not depend wholly on the precise factual matrix of these proceedings and more specifically does not depend on the issue of determining the precise percentage of the common fund order, be that 25% or otherwise, or by necessary implication what view class members may take on the question of whether a common fund order should be made.

23. Counsel for the Defendant likewise noted again correctly in my view that as per Director of Public Prosecutions (Cth) v JM (2013) 250 CLR 135; [2013] HCA 30 at [29]-[33] the determination of a separate question in this case is not a purely hypothetical one. There is uncontroversial evidence and facts providing a basis for the separate question, being the two affidavits mentioned above of Mr Scattini and Mr Pavlakis. The question also will impact clearly upon the outcome of this case because it will affect the making or not as may be of a common fund order.

24. I am satisfied the question is a discrete question of law of clear general public importance which arises out of the Plaintiff’s Common Fund Motion which involves issues of significance to New South Wales and indeed beyond. It will not negatively affect the just, quick and cheap resolution of the real issues in dispute.

Conclusion

25. I am satisfied a separate question should be ordered and that the proceedings be removed to the Court of Appeal.

26. I have already made orders to this effect on 22 October 2018 and forwarded the relevant documents to the Court of Appeal.

**********

Amendments

24 October 2018 - [11] Submissions - is a heading

[12] "Commonwealth " to Commonwealth legislation

Decision last updated: 24 October 2018