Owen Brewster v BMW Australia Ltd

In the case of Owen Brewster v BMW Australia Ltd, the dispute involved the interpretation and application of section 173 of the Civil Procedure Act 2005 (NSW) in the context of a class action or representative proceeding. The primary issue was whether the court had the authority to make an order that required group members who had not signed the litigation funding agreement to pay an amount to the funder out of the proceeds of any settlement. This payment would be in the form of a return on expenditure, commission, or other similar remuneration. Additionally, the case considered whether leave previously granted for the filing of cross-summons seeking removal of a separate question to the Court of Appeal should be revoked.

The court was required to decide whether the true construction of section 173 of the Civil Procedure Act 2005 (NSW) authorised the making of such an order. The court also needed to determine whether there was a legal controversy capable of being the subject of declaratory relief between the parties, especially given the equivocation on the part of the plaintiffs as to whether a common fund order would be sought as a precondition to negotiations during mediation. The court considered whether the plaintiffs had had substantial discussions or come to any view as to whether there would be any preconditions for settlement, and whether the plaintiff had consented to the dismissal of the interlocutory common fund motion that was on foot.

The court concluded that the true construction of section 173 did not authorise the making of an order requiring group members who had not signed the litigation funding agreement to pay an amount to the funder out of the proceeds of any settlement. The court found that there was no legal controversy capable of being the subject of declaratory relief between the parties, given the equivocation on the part of the plaintiffs and their lack of substantial discussions or views on preconditions for settlement. Consequently, the court decided to revoke the leave previously granted for the filing of cross-summons seeking removal of the separate question to the Court of Appeal. The court's reasoning was based on the lack of a clear legal controversy and the plaintiffs' equivocation and lack of discussion regarding potential preconditions for settlement.