Pabalan v Coles Supermarkets Australia Pty Ltd (Proposed Consent Orders)

[2021] FCA 118

FEDERAL COURT OF AUSTRALIA

Pabalan v Coles Supermarkets Australia Pty Ltd (Proposed Consent Orders) [2021] FCA 118  

File number:

NSD 542 of 2020

Judgment of:

PERRAM J

Date of judgment:

19 February 2021

Catchwords:

PRACTICE AND PROCEDURE – representative proceedings under Part IVA of Federal Court of Australia Act 1976 (Cth) (‘the Act’) – where proposed consent orders enlivened question of power to order under s 33ZF of the Act that group members register if they wished to participate in any settlement distribution

Legislation:

Constitution s 75(v)

Federal Court of Australia Act 1976 (Cth) ss 25(6), 33V, 33ZF, 37M

Civil Procedure Act 2005 (NSW) s 183

Cases cited:

BMW Australia Ltd v Brewster [2019] HCA 45; 374 ALR 627
Cameron v Cole (1944) 68 CLR 571

Furnell v Shahin Enterprises Pty Ltd [2021] FCA 73

Haselhurst v Toyota Motor Corporation Australia Ltd [2020] NSWCA 66; 101 NSWLR 890
Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd [2017] FCAFC 98; 252 FCR 1
Re Macks; Ex parte Saint [2000] HCA 62; 204 CLR 158
Owners – Strata Plan No 87231 v 3A Composites GmbH (No 3) [2020] FCA 748
Wigmans v AMP Ltd [2020] NSWCA 104; 102 NSWLR 199

Division:

Fair Work Division

Registry:

New South Wales

National Practice Area:

Employment and Industrial Relations

Number of paragraphs:

13

Date of last submissions:

15 February 2021

Date of hearing:

Determined on the papers

Solicitor for the Applicant:

Mr R Markham of Adero Law

Counsel for the Respondent:

Mr F Parry QC with Mr J H Kirkwood

Solicitor for the Respondent:

Herbert Smith Freehills

REASONS FOR JUDGMENT

NSD 542 of 2020

BETWEEN:

MARIA PABALAN

Applicant

AND:

COLES SUPERMARKETS AUSTRALIA PTY LTD ABN 45 004 189 708

Respondent

PERRAM J:

1. On 24 November 2020, I made orders by consent in this proceeding that, among other matters, pursuant to s 33ZF of the Federal Court of Australia Act 1976 (Cth) (‘the Act’), any group member who wished to participate in a distribution of any amount agreed in a settlement of the proceeding, reached before the trial of the common issues commenced, had to register for the proceeding by 16 April 2021 (‘the Deadline’). Those orders also dealt with the process by which that registration was to occur, including a timetable for the publication and distribution of certain court documents and notices to group members. On 21 December 2020, before that distribution was to commence, I made further orders by consent that the notices and notice distribution protocol referred to in the 24 November 2020 orders be replaced with versions that incorporated amendments which had been made to the pleadings. These reasons will refer to the 24 November 2020 and 21 December 2020 orders together as ‘the Orders’.

2. On 9 February 2021, Mr Page of Herbert Smith Freehills, solicitors for the Respondent, sent an email to my Associate, copying the solicitors for the Applicant.  Mr Page’s email attached proposed short minutes of order which the parties sought that I make by consent (‘Proposed Orders’).  The primary effects of the Proposed Orders if I were to make them would be: first, to extend the Deadline to 30 April 2021; secondly, to extend other dates pertaining to the process of registration and notification; and, thirdly, to replace the notices and protocol referred to in the 21 December 2020 orders with new notices and a new protocol.  The only relevant changes to the notices and protocol would be to reflect the changes to the dates set out in the body of the orders.

3. These are my reasons for declining to make the Proposed Orders.

4. In his email Mr Page, on behalf of the parties, drew to my attention the recent decision of White J in Furnell v Shahin Enterprises Pty Ltd [2021] FCA 73 (‘Furnell’), to which I refer at [7] below, and said that despite his Honour’s conclusion in that case, the parties submit that I acted within power when I made the Orders in this proceeding.

5. The Orders provided for what is usually described as ‘class closure’.  As has been noted elsewhere, ‘class closure’ is not a statutory term and a wide variety of orders, different in form and substance, are loosely accommodated under that label: Haselhurst v Toyota Motor Corporation Australia Ltd [2020] NSWCA 66; 101 NSWLR 890 at [62]-[83] per Payne JA (‘Haselhurst’).

6. There is a live issue in this Court as to the existence of power in s 33ZF of the Act for the Court to make a class closure order. When the Court makes such an order, it has often done so in reliance on the Full Court’s decision in Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd [2017] FCAFC 98; 252 FCR 1 at [73]-[74] (‘Treasury Wine’), where Jagot, Yates and Murphy JJ said (citations omitted):

   … There must be a good reason to exercise the discretion to make a class closure order which may operate to deny the benefits of a settlement to class members who do not opt out and who do not take the active step of registering …

   Having said this, if a class closure order operates to facilitate the desirable end of settlement, it may be reasonably adapted to the purpose of seeking or obtaining justice in the proceeding and therefore appropriate under s 33ZF of the Act. The courts have accepted on numerous occasions that, in order to facilitate settlement, it is appropriate to make orders to require class members to come forward and register in order to indicate a willingness to participate in a future settlement, and to make orders that class members be bound into the settlement but barred from sharing in its proceeds unless they register.

7. However, since the High Court’s decision in BMW Australia Ltd v Brewster [2019] HCA 45; 374 ALR 627 (‘Brewster’), the controversy has acquired a renewed vitality.  In Brewster, a plurality of the High Court (Kiefel CJ, Bell and Keane JJ; Gordon J and Nettle J agreeing in separate judgments) held that s 33ZF and its analogue, s 183 of the Civil Procedure Act 2005 (NSW), do not furnish a source of power to make a common fund order. Although the High Court did not deal with class closure orders or the Full Court’s decision in Treasury Wine, subsequent decisions of the New South Wales Court of Appeal and of this Court have held that the construction of s 33ZF and s 183 arrived at by the High Court in Brewster is inconsistent with a view that those provisions empower the making of a class closure order: Haselhurst at [12] per Bell P, Payne JA agreeing at [123]; at [106]-[114] and [121]-[122] per Payne JA, Bell P agreeing at [1]; Macfarlan JA and Leeming JA agreeing with Bell P and Payne JA at [19]-[20]; Emmett AJA agreeing with Bell P and Payne JA at [136]-[138]; Wigmans v AMP Ltd [2020] NSWCA 104; 102 NSWLR 199 at [79]-[112] per the Court; Owners – Strata Plan No 87231 v 3A Composites GmbH (No 3) [2020] FCA 748 at [203] per Wigney J; Furnell at [62]-[74] per White J.

8. Importantly, there is no doubt that the Orders in this proceeding are valid and no challenge is made to them. An order of this Court, being a superior court of record established under Commonwealth legislation, is final and binding unless and until set aside on appeal or pursuant to s 75(v) of the Constitution:  Re Macks; Ex parte Saint [2000] HCA 62; 204 CLR 158 at 178 [23] per Gleeson CJ; 185-187 [52]-[57] per Gaudron J; 214-217 [148]-[152], [156] per McHugh J; 235-236 [216] per Gummow J; 268 [306] per Hayne and Callinan JJ; Cameron v Cole (1944) 68 CLR 571 at 585 per Latham CJ; 590-591 per Rich J; 598-599 per McTiernan J; 605 per Williams J.

9. The difficulty which arises is that, if I were to make the Proposed Orders, this would amount not merely to a tinkering with or variation of the earlier Orders but in fact to a fresh and substantive exercise of power. Accordingly, I consider that I cannot make the Proposed Orders without now arriving at a concluded view on the question of power in s 33ZF to order class closure.

10. It seems to me that there are three options for meeting this difficulty. First, the Court could determine the question of power and the validity of the earlier Orders on its own motion. The problem with taking that course is that I would wish to hear full argument on the question and, in circumstances where the parties are agreed that the Orders were validly made, this would necessitate the appointment of a contradictor. I do not think that the additional delay and expense that this would generate would be consistent with the spirit of s 37M of the Act given the relatively confined and identifiable nature of the class of applicants and issues in dispute in this proceeding.

11. The second option is to reserve the question for the consideration of a Full Court of this Court under s 25(6) of the Act. This, too, seems inappropriate in circumstances where: there is no dispute between the parties on the issue; the Full Court might decline to determine the question of power in s 33ZF to order class closure because it finds, contrary to the view I have expressed at [9] above, that making the Proposed Orders would not involve a substantive exercise of any such power; and, in part because of the matters just mentioned, such a referral would engender additional and probably unjustified delay and cost.

12. The third option and the one I favour is simply to decline to make the Proposed Orders. To do so would not obstruct the parties in undertaking settlement discussions, although it may mean that that process unfolds on a timetable inconsistent with the timetable provided for in the Orders. In the event that a settlement is arrived at and submitted for the Court’s approval, such inconsistency may be curable by appropriate orders under s 33V of the Act. If such orders, or the earlier Orders, are opposed by any party or group member, that opposition can be dealt with at that stage.

13. I will therefore make no order.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram.

Associate:

Dated:       19 February 2021