Proude v Visic (No 3)

[2012] SASC 234

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

PROUDE v VISIC (NO 3)

[2012] SASC 234

Judgment of The Honourable Justice Blue

19 December 2012

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PARTIES

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - COMMENCEMENT OF ACTION

LIMITATION OF ACTIONS - OTHER MATTERS

PROCEDURE - COSTS - SECURITY FOR COSTS

The plaintiff brought proceedings against the first and second defendants for losses allegedly caused by a bushfire as a result of their negligence.

The plaintiff applies for authorisation pursuant to rule 81 of the Supreme Court Civil Rules 2006 (SA) to bring the action as representative of all land owners and occupiers who suffered property loss and damage caused by the bushfire (“the group”).

The defendants oppose the application. In the alternative, they seek an order pursuant to rule 194, or alternatively rule 81, that the plaintiff provide security for costs.

Held:

Per Blue J:

1.      The prerequisite for an authorisation order under rule 81(1), that the group has a common interest in questions of law or fact to which the action relates, is satisfied. There are several substantive questions in which the group has a common interest against the first defendant and against the second defendant (at [79], [185]).

2.      It is not a requirement of rule 81 that each and every member of the group have an action against each defendant (at [77]).

3. Under rule 81, an action is “commenced” on behalf of the represented persons within the meaning and for the purpose of section 35 of the Limitation of Actions Act 1936 (SA) upon filing the summons and statement of the plaintiff’s claim and not when the authorisation is sought or granted (at [109]).

4. This action was instituted on behalf of the group members within the time prescribed by section 35(c) of the Limitation of Actions Act 1936 (SA). The section is no impediment to the making of an authorisation order under rule 81 (at [122], [183]).

5.      The factors in favour of authorisation point overwhelmingly in favour of the exercise of discretion to make an authorisation order under rule 81 (at [143], [183]).

6.      The action is brought in a representative capacity within the meaning of rule 194(1)(a). In any event, it is in the interests of justice within the meaning of rule 194(1)(e) to order security for costs. The discretion should be exercised in favour of ordering security for costs (at [152], [171], [186]).

Common Law Procedure Act 1852 (UK) s 41; Corporations Act 2001 (Cth) s 1335; Federal Court Act 1976 (Cth) Part IVA, s 33C, s 33N, s 43, s 56; Judiciary Act 1903 (Cth) s 79; Limitation Act 1969 (NSW); Limitation of Actions Act 1936 (SA) s 35, s 39, s 40 s 45-48; Rules of Procedure under the Supreme Court of Judicature Act 1873 (UK) r 10, r 22; Rules of Procedure under the Supreme Court of Judicature Act 1875 (UK) Order XVI rules 1, 3 and 9; Order XVII rule 1; Rules of the Supreme Court  (Qld) Order 3 rule 10; Supreme Court Act 1935 (SA) s 72; Supreme Court Rules 1913 (SA) Order 15 rules 1 and 9; Supreme Court Rules 1947 (SA) Order 16 rules 1 and 9; Supreme Court Rules 1970 (NSW) Part 8 rule 13; Supreme Court Civil Rules 1987 (SA) r 27.01, r 34, r 34.01, r 34.02, r 100.01; Supreme Court Civil Rules 2006 (SA) r 12, r 30, r 33, r 34, r 38, r 73, r 74, r 77, r 78, r 80, r 81, r 82, r 91, r 96, r 98, r 99 r 194; Supreme Court of Judicature Act 1873  (UK); Supreme Court of Judicature Act 1875 (UK); Trade Practices Act 1974 (Cth), referred to.
Bray v F Hoffman-La Roche Ltd [2003] FCAFC; (2003) 130 FCR 317; Cameron v National Mutual Life Association of Australasia Limited (No 2) [1992] 1 Qd R 133; Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41; (2006) 229 CLR 386; Carnie v Esanda Finance Corporation Ltd [1995] HCA 9; (1995) 182 CLR 398; Duke v Bedford v Ellis [1901] AC 1; Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83; (2005) NSWLR 203; Hannay & Co v Smurthwaite [1893] 2 QB 412; Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178; Moir v Vodaphone [2009] SASC 234; Philip Morris (Australia) Ltd v Nixon [2000] FCA 229; (2000) 170 ALR 587; Ryan v Great Lakes Council [1998] FCA 646; (1998) 155 ALR 447; Weldon v Neal (1887) 19 QBD 394; Woodhouse v McPhee [1997] FCA 1509; (1997) 80 FCR 529, discussed.
Adams v Paynter  (1844) 1 Coll 530; Ariadne Properties Limited v Russell  [1989] 1 Qd 491; Bell Wholesale Co Ltd v Gates Export Corporation [1984] FCA 34; (1984) 2 FCR 1; Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” [1976] HCA 65; (1976) 136 CLR 529; Canberra Residential Developments Pty Ltd v Brendas [2009] FCA 745; Cliff v Quinn (1988) 54 SASR 151; Cockburn v Thompson (1809) 16 Ves Jun 321; 33 ER 1005; Collins v Emacord Autos Pty Ltd [1997] SASC 6418; Co-operative Farmers’ & Graziers’ Direct Meat Supply Ltd v Smart [1977] VR 386; Cowell v Taylor (1885) 31 Ch D 34; Coyle v Cassimatis [1994] 2 Qd R 262; Cullen v Knowles [1898] 2 QB 380; Davison v Vickery’s Motors Limited (in liquidation) (1925) 37 CLR 1; The Dean and Chapter of Exeter v Seagell (1796) 6 TR 688; 101 ER 773; Donoghue v Stevenson [1932] AC 562; Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd (2008) 67 ACSR 105; [2008] NSWCA 148; Harpur v Ariadne Australia Ltd [1984] 2 Qd R 523; Luke v South Kensington Hotel Company (1879) 11 Ch D 121; Mutual Life & Citizens’ Assurance Co Ltd v Evatt [1968] HCA 74; (1968) 122 CLR 556; Perry v Jackson [1998] 4 VR 463; Rainbow v Kittoe [1916] 1 Ch 313; San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 [1986] HCA 68; (1986) 162 CLR 340; Sandes v Wildsmith [1893] 1 QB 771; Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] HCA 59; (1981) 150 CLR 225 ; Van Vliet v Griffiths (1979) 20 SASR 524; Vetris v Cashman (1998) 72 SASR 449; Whelpdale’s Case (1572) 5 Co Rep 119; White v Butt [1909] 1 KB 50, considered.

WORDS AND PHRASES CONSIDERED/DEFINED

"commenced"

PROUDE v VISIC (NO 3)
[2012] SASC 234

Civil Interlocutory:

Blue J:

1. Mr Proude is suing Mr Visic and the South Australian Country Fire Service (the “CFS”) for losses allegedly caused by bushfire on Lower Eyre Peninsula on 10 and 11 January 2005 as a result of their negligence. 

2. Mr Proude applies for authorisation pursuant to rule 81 of the Supreme Court Civil Rules 2006 (SA) (“the Rules”) to bring the action as representative of all land owners and occupiers who suffered property loss and damage caused by the bushfire (“the group”).[1]

   [1]    Interlocutory application dated 29 August 2011 (FDN 10).

3. The defendants oppose the application.  In the alternative, they seek an order pursuant to rule 194,[2] or alternatively rule 81,[3] that Mr Proude provide security for costs.

   [2]    Mr Visic’s interlocutory application dated 17 October 2012 (FDN 30) and the CFS’s interlocutory application dated 19 October 2012 (FDN 33).

   [3]    Mr Visic’s interlocutory application dated 17 October 2012 (FDN 30).

4. The applications raise five questions:

   1.Does the group have a common interest in questions of law or fact to which this action relates within the meaning of rule 81(1)?

   2.Is an order for authorisation precluded by section 35(c) of the Limitation of Actions Act 1936 (SA) because it would entail the commencement of an action on behalf of the group members more than six years after their causes of action accrued?

   3.Should an authorisation order be made as a matter of discretion?

   4.Can and should security for costs be ordered pursuant to rule 194 or rule 81?

   5.If an authorisation order is made, what should be its terms?

   Background facts

5. On 10 January 2005 at about 3:00 pm, a fire broke out on the eastern side of Lady Franklin Drive, Lower Eyre Peninsula, approximately 45 kilometres north-west of Port Lincoln.[4]

   [4] Third Statement of Claim [7], first defendant’s Defence [7], second defendant’s Second Defence [7].

6. Some time prior to 3:00 pm, Mr Visic drove and parked his land cruiser in the general vicinity in which the bushfire broke out.[5] 

   [5] Third Statement of Claim [6], first defendant’s Defence [6], second defendant’s Second Defence [6].

7. The bushfire burnt a local area of land up to a swamp known as paperbark swamp during the afternoon and night of 10 January 2005.[6]  The burnt land comprised five properties owned by five persons or families.[7]

   [6]    Third Statement of Claim [13-16], first defendant’s Defence [16], second defendant’s Second Defence [13], [15], [16].

   [7] Affidavit of Mr Humphries sworn on 9 November 2012 (FDN 53) [3].

8. On the morning of 11 January 2005, a fire or fires (it being in dispute in the action whether it was the same fire or a different fire or fires resulting from back burning by the owner of one of the five properties) broke out of the paperbark swamp.  Mr Proude’s case is that it broke out at one point south (“area A”) and another point east (“area C”) of the paperbark swamp.  The fire or fires ultimately burnt approximately 78,000 hectares on 11 January 2005.[8]

   [8]    Affidavit of Mr Humphries sworn on 22 October 2012 (FDN 35); Affidavit of Mr Humphries sworn on 9 November 2012 (FDN 53). I use the term landholder to encompass a group of related persons or entities who between them own or have exclusive possession of land.

9. Mr Proude’s case is that the fire or fires (collectively “the bushfire”) caused extensive damage to land owned or occupied by at least 257 landholders.[9]  His case is that:

   1.the bushfire burnt land owned by five landholders on 10 January 2005;

   2.the bushfire burnt land owned by three of those five landholders and at least an additional 252 landholders (including Mr Proude) on 11 January 2005.[10]

   [9]    Third Statement of Claim [18] not admitted by the defendants;  Affidavit of Mr Humphries sworn on 22 October 2012 (FDN 35).

   [10]   Affidavit of Mr Humphries sworn on 9 November 2012 (FDN 53) [4]-[6].

10. The 257 landholders’ land represents approximately 70,000 hectares.[11] There are or may be additional landholders who Mr Proude (seeks to) represent(s) who hold approximately 8,000 hectares.

    [11]   Affidavit of Mr Humphries sworn on 13 December 2012 (FDN 54).

11. On 21 December 2010, Duncan Basheer Hannon instituted this action by filing a summons and statement of claim.  The named plaintiff was Mr Proude.  The statement of claim pleaded that Mr Proude brought the action on his own behalf and that he proposed to apply for authorisation to bring the action as a representative on behalf of the group of all landholders who suffered property loss or damage caused by the bushfire and which included 255 landholders named in the Schedule to the statement of claim (“the Schedule”).[12] 

    [12]    The original Schedule to the Statement of Claim contained a list of 285 persons or entities. These were grouped into 255 groups of landholders in the affidavit of Mr Humphries sworn on 22 October 2012 (FDN 35). For simplicity, I refer to the 285 persons or entities listed in the Schedule as 255 landholders in accordance with the subsequent grouping in Mr Humphries’ affidavit sworn on 22 October 2012.

12. Mr Proude pleaded that the bushfire and in turn the losses of all group members were caused by the negligence of Mr Visic on and as at 10 January 2005.  Mr Proude pleaded that:

    1.Mr Visic owed a duty of care to the group members to take reasonable care in the use and maintenance of his land cruiser so as to avoid foreseeable risks of injury;

    2.Mr Visic was negligent in the use and maintenance of his land cruiser in that:

    (a)     he knew there were holes and imperfect joints in the exhaust system;

    (b)    he knew that the muffler did not have a spark arrestor;

    (c)     he knew that, because of those matters, the exhaust system might emit         hot particles;

    (d)    he drove and/or parked the land cruiser in close proximity to dry        vegetation on a hot day;

    (e)he knew that the escape of hot particles from the exhaust system might ignite that dry vegetation and lead to a bushfire;

    (f)     alternatively he ought to have known each of the above matters;

    (g)he failed to ensure that the exhaust system was not defective as alleged above or that there would be no risk of fire from his driving and/or parking his land cruiser as alleged above;

    3.Mr Visic’s negligence caused the ignition of the dry vegetation and the fire which burnt an area of land on 10 January 2005 up to and including the paperbark swamp;

    4.the fire escaped from the paperbark swamp at area A and area C;

    5.the fires converged and burnt an area of land comprising approximately 78,000 hectares;

    6.the bushfire burnt the land and personal property situated thereon of the group members;

    7.the group members thereby suffered direct and consequential loss and damage.

13. Mr Proude pleaded that the losses suffered by those whose properties were burnt on 11 January 2005 were caused concurrently by the negligence of the CFS in its response to the bushfire which resulted in its breaking out of the paperbark swamp on the morning of 11 January 2005.  Mr Proude pleaded that:

    1.the CFS owed to the group members a duty to take reasonable care in the course of exercising its statutory powers and functions to control and extinguish the bushfire so as to avoid foreseeable risks of property loss or damage;

    2.the CFS was negligent in that:

    (a)there were defects in its Incident Action Plan, in part as a result of inadequate gathering of information;

    (b)there were defects in the handover from the first to the second Incident Controller and in failing to modify the Incident Action Plan in light of subsequent developments and information;

    (c)there were defects in the passing of information from personnel at the firefront up through various levels of the CFS to State Headquarters and in the direction and control from State Headquarters down through various levels of the CFS to personnel at the firefront;

    (d)    the principal fire fighting measure adopted of blacking out the    fireground to 30 metres was inadequate in nature and extent and   additional blacking out, back burning and creation of bare earth breaks      should have been undertaken and additional fire fighting resources     deployed;

    (e)     no blacking out was undertaken and no fire fighting resources were     deployed in area C until 3:30 am on 11 January 2005;

    (f)     no fire fighting resources were deployed at all in area A;

    3.the negligence of the CFS permitted the fire to escape from the paperbark swamp at area A and area C;

    4.the fires converged and burnt an area of land comprising approximately 78,000 hectares;

    5.the bushfire burnt the land and personal property situated thereon of the group members;

    6.the group members thereby suffered direct and consequential loss and damage.

14. Mr Proude claims that he has suffered losses totalling $2,267,792.  He claims that the 257 landholders within the group have suffered total losses of approximately $60 million (including his own losses). Approximately 40 percent of this total appears to have been met by five insurers.

    Common interest in questions of law and fact

15. Rule 81(1) of the Rules provides:

    The Court may authorise a plaintiff to bring an action as representative of a group with a common interest in questions of law or fact to which the action relates.

16. The first issue is whether the group have a common interest in questions of law or fact to which this action relates within the meaning of rule 81(1).

17. This question in turn raises three sub-questions:

    1.Does the group have a common interest in questions of law or fact in the action against Mr Visic?

    2.Does the group have a common interest in questions of law or fact in the action against the CFS?

    3.Is it essential that every member of the group have a claim against both Mr Visic and the CFS?

    Procedural rules for multiplicity of parties

18. Rule 81 provides one procedure for the litigation of multiple claims by multiple parties.  It needs to be understood against the background of the procedure applying more generally to multiple claims and multiple parties.

19. In relation to multiple claims and causes of action in one action, rule 30 relevantly provides as follows:

    (1)     An action is based on a claim.

    (2)A claim is an assertion that grounds exist on which the Court should or may in its discretion determine a justiciable issue, or exercise any other power, in the plaintiff’s favour ...

    (3)     A claim is based on a cause of action (that is, some basis in law and fact on which    the plaintiff asks the Court for a remedy).

    (4)     An action may include claims based on more than one cause of action.

20. In relation to multiple plaintiffs and defendants in one action, rule 73 provides:

    (1)     A single action may be brought by two or more plaintiffs if—

    (a)     they each claim to have a cause of action against the same defendant arising from the same or similar facts; or

    (b)     the claim of each involves the determination of a common question of law or fact; or

    (c)     the Court gives its permission.

    (2)     A single action may be brought against two or more defendants if—

    (a)     the claim against each arises out of the same or similar facts; or

    (b)     the claim against each involves the determination of a common question of             law or fact; or

    (c)     the Court gives its permission.

    Genesis of procedural law

21. The purpose and effect of the current Rules is better understood having regard to their genesis.

22. Historically the common law courts did not generally permit the joinder of two causes of action by a plaintiff against a defendant.[13]  They did not permit the joinder of co-plaintiffs having several claims (causes of action) against a defendant: they only permitted (and indeed required) the joinder of co-plaintiffs who had a joint cause of action against a defendant.[14]  They did not permit the joinder of co-defendants against whom a plaintiff had several claims (causes of action): they only permitted (and indeed required) the joinder of co-defendants against whom a plaintiff had a joint cause of action.[15]

    [13]   The Dean and Chapter of Exerter v Seagell (1796) 6 TR 688; 101 ER 773; Bray v F Hoffman-La Roche Ltd [2003] FCAFC 153; (2003) 130 FCR 317 at [247] per Finkelstein J.

    [14]   Sandes v Wildsmith [1893] 1 QB 771; Duke of Bedford v Ellis [1901] AC 1 at 23 per Lord Brampton (the Earl of Halsbury LC agreeing).

    [15]   Whelpdale’s Case (1572) 5 Co Rep 119; 77 ER 239.

23. The Court of Chancery took the opposite approach.  The general rule (subject to certain exceptions) was that all persons materially interested in the subject of the suit were required to be plaintiffs.[16]  If a person materially interested refused to join as co-plaintiff, he or she would be joined as a defendant to ensure that he or she was bound by the result.[17]

    [16]   Cockburn v Thompson (1809) 16 Ves Jun 321; 33 ER 1005 at 325 and 329 per Lord Eldon; Duke of Bedford v Ellis [1901] AC 1 at 8 and 10-11 per Lord Macnaghten; Carnie v Esanda Finance Corporation Ltd [1995] HCA 9; (1995) 182 CLR 398 at 415 per Toohey and Gaudron JJ.

    [17]   Cullen v Knowles [1898] 2 QB 380 at 381-382 per Bigham J; Luke v South Kensington Hotel Company (1879) 11 Ch D 121 at 126-127 per Jessel MR and 128-129 per James LJ; Adams v Paynter (1844) 1 Coll 530.

1. As a corollary of their approach against joinder of plaintiffs, the common law courts did not permit a plaintiff to bring an action as a representative of other persons where there was no pre-existing representational relationship.[18]  As a corollary of its approach, the Court of Chancery permitted a plaintiff to bring an action as a representative of others materially interested in the subject of the suit.[19] 

   [18]   Duke of Bedford v Ellis [1901] AC 1 at 23 per Lord Brampton (the Earl of Halsbury LC agreeing).

   [19]   Cockburn v Thompson (1809) 16 Ves Jun 321 at 325 and 329 per Lord Eldon; Duke of Bedford v Ellis [1901] AC 1 at 10-11 per Lord Macnaghten.

2. The Common Law Procedure Act 1852 (UK) section 41 reformed the common law by permitting the joinder of causes of action.  It provided:

   Causes of Action, of whatever kind, provided they be by and against the same Parties and in the same Rights, may be joined in the same Suit; …but the Court or a Judge shall have Power to prevent the Trial of different Causes of Action together, if such Trial would be inexpedient …

   Section 41 was effectively reproduced as rule 22 of the Rules of Procedure (“the 1873 English Rules”) contained in the schedule to the Supreme Court of Judicature Act 1873 (UK) (“the 1873 Act”) and Order XVII Rule 1 of the Rules of Procedure (“the 1875 English Rules”) contained in the Supreme Court of Judicature Act 1875 (UK) (“the 1875 Act”).  The latter provided:

   Subject to the following Rules, the plaintiff may unite in the same action and in the same statement of claim several causes of action, but if it appear to the Court or a Judge that any such causes of action cannot be conveniently tried or disposed of together, the Court or Judge may order separate trials of any such causes of action to be had, or may make such other order as may be necessary or expedient for the separate disposal thereof.

3. Upon the merger of the administration of law and equity effected by the 1873 and 1875 Acts, the practice of the Court of Chancery as to multiple parties and representative actions was applied to all divisions of the Supreme Court.  

4. The 1875 English Rules introduced new rules for joinder of plaintiffs and defendants.  Order XVI Rules 1 and 3 provided:

   1.     All persons may be joined as plaintiffs in whom the right to any relief claimed is     alleged to exist, whether jointly, severally, or in the alternative.

   ...

   3.     All persons may be joined as defendants against whom the right to any relief is        alleged to exist, whether jointly, severally, or in the alternative …

5. Rule 10 of the 1873 English Rules provided:

   Where there are numerous parties having the same interest in one action, one or more of such parties may sue or be sued, or may be authorised by the Court to defend in such action, on behalf or for the benefit of all parties so interested.

   That rule was reproduced as Order XVI Rule 9 of the 1875 English Rules

6. In Hannay & Co v Smurthwaite,[20] the Court of Appeal held that Order XVI Rule 1 of the 1875 English Rules permitted the joinder of plaintiffs having different claims or causes of action where they arose out of the same transaction, but not where they were in respect of utterly distinct and different transactions.[21]  The Court took a broad view of the rule and of the concept of “the same transaction”.  Even though the plaintiffs were suing for short delivery of different shipments of cotton, the Court of Appeal held that the claims arose out of the same transaction because the cotton was shipped on the same ship.  Lord Esher MR said:

   I should say that, large as the words of the rule are, if the causes of action vested in the plaintiffs respectively were not merely separate causes of action, but were in respect of utterly distinct and different transactions, then the plaintiffs could not join in one action in respect of them because the result would be an absurdity.  But if the different causes of action or claims all arise out of the same transaction, and no absurdity could result from their being joined in one action, then why should the grammatical effect of the words of the rule be diminished to prevent their being so joined?  That view of the matter gives rise to the question whether in this case all the claims sufficiently constitute one transaction to bring the case within the rule without giving rise to any absurdity, such as was suggested, as, for instance, if one plaintiff were allowed to sue on a bill of exchange and another for breach of promise of marriage in the same action.

   The real ground of complaint here is the conduct of the owners of a particular ship on a particular voyage with regard to the loading of the ship and the conveyance of certain bales of cotton to Liverpool.  It is one transaction giving rights of action to different people who have entered into that one transaction.  I think that that is sufficient to bring the case within the terms of the rule.[22]

   and Kay LJ said:

   I confess I am inclined to give the widest effect to this rule which its word permit.  The object is to prevent the necessity of a number of separate actions where the matters in dispute can conveniently be tried together.  If several plaintiffs were so ill-advised as to unite perfectly separate causes of action against the same or different defendants, the Court or a judge could, and doubtless would, correct this under rule 1 or 8 of Order XVIII. at the cost of such plaintiffs.  But there may be several causes of action so connected that a great part of the evidence required may be common to them all, or for some other reason it may be convenient or a saving of expense to try them together; and I am inclined to hold that, according to the fair construction of these rules, they are intended to enable this to be done.[23]

   [20] [1893] 2 QB 412.

   [21] Ibid at 419-421 per Lord Esher MR and 428-430 per Kay LJ.

   [22] Ibid at 420.

   [23] Ibid at 430.

7. Order XVI Rule 1 of the 1875 English Rules governing the joinder of plaintiffs was reproduced, with limited but successive modifications, by Order 15 rule 1 of the Supreme Court Rules 1913 (SA) (“the 1913 SA Rules”), Order 16 rule 1 of the Supreme Court Rules 1947 (SA) (“the 1947 SA Rules”) and rule 27.01 of the Supreme Court Civil Rules 1987 (SA) (“the 1987 SA Rules”).  As observed above, rule 73(1) of the current Rules now governs the joinder of multiple plaintiffs.

8. Order XVI Rule 9 of the 1875 English Rules governing representative actions was reproduced, with limited but successive modifications, by Order 15 Rule 9 of the 1913 SA Rules, Order 16 Rule 9 of the 1947 SA Rules and rule 34.01 of the 1987 SA Rules.  As observed above, currently rule 81 now governs representative actions.

9. In New South Wales, Part 8, rule 13(1) of the former Supreme Court Rules 1970 (NSW) (“the 1970 NSW Rules”) was in similar terms to Order XVI Rule 9 of the 1875 English Rules and Order 16 Rule 9 of the 1947 SA Rules.

10. Part IVA of the Federal Court Act 1976 (Cth) (the “Federal Court Act”) was introduced in 1992.  Section 33C(1) provides:

    Subject to this Part, where:

    (a)     7 or more persons have claims against the same person; and

    (b)     the claims of all those persons are in respect of, or arise out of, the same, similar or   related circumstances; and

    (c)     the claims of all those persons give rise to a substantial common issue of law or       fact;

    a proceeding may be commenced by one or more of those persons as representing some or all of them.

11. The third prerequisite under section 33C(1)(c) is similar in concept to the prerequisite under rule 81(1) of the current Rules.  The current Rules do not have any equivalent of the first or second prerequisites under section 33C(1)(a) or (b).

12. In Duke of Bedford v Ellis,[24] the House of Lords adopted a broad and liberal approach to the construction of Order XVI Rule 9 of the 1875 English Rules and essentially applied the former practice of the Court of Chancery.  Lord Macnaghten said:

    The old rule in the Court of Chancery was very simple and perfectly well understood.  Under the old practice the Court required the presence of all parties interested in the matter in suit, in order that a final end might be made of the controversy.  But when the parties were so numerous that you never could “come at justice”, … if everybody interested was made a party, the rule was not allowed to stand in the way.  It was originally a rule of convenience: for the sake of convenience it was relaxed.  Given a common interest and a common grievance, a representative suit was in order if the relief sought was in its nature beneficial to all whom the plaintiff proposed to represent …

    … I think the rule as to representative suits remains very much as it was a hundred years ago.  From the time it was first established it has been recognised as a simple rule resting merely upon convenience.  It is impossible, I think, to read such judgments as those delivered by Lord Eldon in Adair v. New River Co., in 1805, and in Cockburn v. Thompson in 1809, without seeing that Lord Eldon took as broad and liberal a view on this subject as anybody could desire. … He laid out of consideration the case of persons suing on behalf of themselves and all others, “for in a sense,” he said, “they are before the Court.”[25]

    [24] [1901] AC 1.

    [25] Ibid at 8 and 10.

13. In Carnie v Esanda Finance Corporation Limited,[26] the High Court considered Part 8 rule 13(1) of the 1970 NSW Rules, which required as a pre-condition that “numerous persons have the same interest in any proceedings”. The High Court adopted a broad and liberal construction of the rule, following the approach of the House of Lords in Duke of Bedford v Ellis.  The High Court held that: 

    1.the fact that the members of the group did not have the same cause of action or an entitlement to the same relief did not prevent their having “the same interest”;[27]

    2.it was sufficient if there was a common ingredient in the cause of action by each member of the group;[28]

    3.it might have been sufficient if the members of the group had a community of interest in the determination of some substantial issue of law or fact in the action (even if not a common ingredient in the cause of action).[29]

    [26] (1995) 182 CLR 398.

    [27] Ibid at 404 per Mason CJ, Deane J and Dawson J, 408 per Brennan J, 420-421 per Toohey J and Gaudron JJ (Mason CJ, Deane J and Dawson J at 403 generally agreeing) and 427 and 430 per McHugh J.

    [28] Ibid at 404 per Mason CJ, Deane and Dawson J, 417 per Toohey and Gaudron JJ (Brennan J at 408 agreeing) and 430 per McHugh J.

    [29] Ibid at 430 per McHugh J (Brennan J at 408 agreeing). See also at 404 per Mason CJ, Deane and Dawson JJ who said that the limitation to a common ingredient in the cause of action might not adequately reflect the rule and the rule may extend to a significant common interest in the resolution of any question of law or fact arising in the proceedings.

14. When construing rule 81(1), it is important to have regard to its own language and purpose and not to approach it with fixed prior conceptions based on decisions on differently constructed rules in other jurisdictions.[30]   The requirement of the 1970 NSW Rules was stricter than that of rule 81(1).  The 1970 NSW Rules required the represented persons to have the same interest in “[the] proceedings”.  Rule 81(1) only requires them to have a common interest in “questions of law or fact to which the action relates”.  Similarly, section 33C(1) of the Federal Court Act imposes stricter requirements than rule 81.  Rule 81 contains no equivalent to the requirements that seven or more persons have claims against the same person or that the claims must be in respect of, or arise out of, the same, similar or related circumstances.  Caution therefore needs to be exercised in seeking to apply decisions on the 1970 NSW Rules or section 33C(1) of the Federal Court Act to the position in South Australia governed by rule 81(1) of the Rules.

    [30] Ibid at 404 per Mason CJ, Deane and Dawson JJ and 415 per Toohey and Gaudron JJ; Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41; (2006) 229 CLR 386 at [40] per Gummow, Hayne and Crennan JJ.

    Common interest in questions in the action against Mr Visic

15. I turn to the first sub-question.  It is convenient to consider this question on the assumption that Mr Visic is the only defendant in the action.

16. Mr Visic accepts that there are several questions of fact or mixed fact and law which are common to the claims of all of the members of the group against him.  Those questions relate to aspects of the negligence and causation ingredients of the cause of action.  However, he contends that this is not sufficient to meet the prerequisite under rule 81(1): he contends that it is essential that the same relief (and specifically a declaration) be sought on behalf of the members of the group against him.  The CFS does not advance this contention: it concedes that rule 81(1) is satisfied insofar as the action is brought against Mr Visic.

17. I first address the identification of common questions of law or fact in the action against Mr Visic before turning to Mr Visic’s contention concerning the same relief having to be claimed.

    Common question involving duty of care

18. The first issue in the action against Mr Visic is whether he owed to the members of the group a duty to take reasonable care in the use and maintenance of his land cruiser to avoid foreseeable risks of injury.

19. The law differentiates between a duty of care to avoid the risk of a physical act causing physical injury to person or property and a duty of care to avoid the risk of a non-physical act causing pure economic loss.  In the former case, where there is a duty of care at all, the duty is generally regarded as being owed to those persons to whom it is reasonably foreseeable that physical injury may be inflicted as a result of a negligent physical act.[31]  By contrast, a duty of care to avoid the risk of a non physical act causing pure economic loss is generally regarded as being owed only to specific persons who it is reasonably foreseeable would suffer such loss and not generally to members of an unascertained class.[32]

    [31]   See, for example, Donoghue v Stevenson [1932] AC 562 at 580-581 per Lord Atkin and 619-621 per Lord Macmillan. See also cases cited at footnote 32 below.

    [32]   Mutual Life & Citizens’ Assurance Co Ltd v Evatt [1968] HCA 74; (1968) 122 CLR 556 at 566-570 per Barwick CJ; Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” [1976] HCA 65; (1976) 136 CLR 529 at 555 per Gibbs J, 572-578 per Stephen J and 590-593 per Mason J; L Shaddock & Associates Pty Ltd v Parramatta City Council(No 1) [1981] HCA 59; (1981) 150 CLR 225 at 230-231 per Gibbs CJ; San Sebastian Pty Ltd v MinisterAdministering the Environmental Planning and Assessment Act 1979 [1986] HCA 68; (1986) 162 CLR 340 at 353-356 per Gibbs CJ, Mason, Wilson and Dawson JJ and 369-372 per Brennan J.

20. Mr Proude’s case is that Mr Visic owed a duty of care to all landholders who might suffer physical injury to property as a result of a fire caused by his negligence.  Every member of the group has a common interest in the question whether such a duty of care was owed.  If the answer to that question at trial is yes, that will be the end of the duty of care issue.  If the answer is no, it is conceivable that Mr Proude will contend (or that the trial Judge will hold) that Mr Visic owed a duty of care to some lesser group, being a subset of the entire group.  That would give rise to a secondary question in which not all group members would necessarily have a common interest.  However, that does not detract from the existence of the common primary question whether a duty of care was owed to all members of the group. 

    Common questions involving breach of duty of care

21. It is common ground that the factual and legal issues relating to the ingredient of breach of duty of care involve questions common to the claims of all group members against Mr Visic.  They essentially comprise the following:

    1.Did Mr Visic know there were holes and imperfect joints in the exhaust system?

    2.Did Mr Visic know that the muffler did not have a spark arrestor?

    3.Did Mr Visic know that the holes and imperfect joints and/or lack of a spark arrestor might permit the escape from the exhaust system of hot particles?

    4.Did Mr Visic drive or park his land cruiser in close proximity to dry vegetation on a hot day?

    5.Did Mr Visic know that the escape of hot particles might ignite dry vegetation near the road and cause a bushfire?

    6.Ought Mr Visic to have known each of the above matters?

    7.In the circumstances, did the care exercised by Mr Visic fall below the standard of care which would have been exercised by a reasonable person?

    8.In the circumstances, was Mr Visic negligent?

    Common questions involving causation

22. It is common ground that the factual and legal issues relating to the ingredient of causation include questions common to the claims of all group members against Mr Visic.  They essentially comprise the following:

    1.Stage one: did hot particles escape from Mr Visic’s land cruiser’s exhaust system?

    2.Stage two: did they ignite dry vegetation?

23. There are then questions common for most, but not all, group members against Mr Visic as follows:

    3.Stage three: did the fire spread and burn to the paperbark swamp?

    4.Stage four: did the fire escape from the paperbark swamp at area A and/or area C?

    5.Stage five: did the fires converge and burn an area of land comprising approximately 78,000 hectares?

    Claim for common relief

24. Mr Visic contends that, in order to meet the prerequisite defined by rule 81(1), it is necessary that the same relief be sought on behalf of all members of the group and in particular the same declaration.  Mr Visic contends that it is fatal to Mr Proude’s application for authorisation that different damages are sought on behalf of each different member of the group and no common declaration is sought.

25. Rule 81(1) requires that the group have “a common interest in questions of law or fact to which the action relates”.  The language of the rule requires only a question of law or fact in which the members have a common interest.  There is no requirement for a common interest in relief or for all members to claim the same relief.  There is nothing in the evident purpose of the rule which requires the same or common relief to be sought (by way of declaration or otherwise).  Mr Visic seeks to read into the rule words which are not present in it.

26. Mr Visic relies upon the decision of the High Court in Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd.[33]That case involved the application of Part 8, rule 13(1) of the 1970 NSW Rules. That rule required that “numerous persons have the same interest in [the] proceedings”. Fostif Pty Ltd (“Fostif”) was a tobacco retailer. Campbells Cash and Carry Pty Ltd (“Campbells”) was a tobacco wholesaler. Fostif claimed that it was entitled to recover from Campbells monies paid on account of unlawful State tobacco licence fees. A litigation entrepreneur, Firmstones, approached Fostif and it was agreed that Firmstones would institute proceedings in the name of Fostif in the Supreme Court against Campbells to recover monies paid on account of such licence fees. Firmstones had a commercial interest in entering into agreements in the future with other tobacco retailers who might have similar claims against Campbells. Firmstones was anxious to institute a representative action invoking Part 8 rule 13 before the imminent expiration of the limitation period. However, Firmstones did not wish to pursue claims on behalf of any tobacco retailers who did not agree to pay one third of the proceeds to Firmstones in return for Firmstones funding the action. These conflicting motives gave rise to a unique definition in the summons of the persons whom Fostif sought to represent. That class was defined as a subset of the class of tobacco retailers who had paid tobacco licence fees to Campbells, namely retailers (if any) who subsequently signed and returned a notice to Firmstones’ solicitors agreeing to become a named plaintiff in the proceedings and to pay one third of any amount recovered to Firmstones.

    [33] (2006) 229 CLR 386.

1. The High Court held that, because of the definition of the members of the class whom Fostif sought to represent, at the date of institution of the action there were no members of the class because no retailer had signed a notice to Firmstones’ solicitors agreeing to become a named plaintiff and pay one third of the proceeds to Firmstones.  The summons envisaged that any such retailers who might in future sign such a notice would become named plaintiffs as opposed to being represented by Fostif as the sole named plaintiff.  The only relief sought in the summons was the repayment of monies which had been paid by Fostif to Campbells. No relief at all was sought on behalf of any other retailers. The High Court held that it followed that, as at the date of institution of the proceedings, there were not “numerous persons” having an interest in the proceedings within the meaning of Part 8 rule 13: there was only Fostif which had an interest in the proceedings. Gummow, Hayne and Crennan JJ said:

   As noted earlier, the bare fact that the claims made by those who are represented by the named plaintiff in a representative action arise out of separate contracts does not necessarily deny the existence of a common interest between the represented parties and the defendant. In this case, a common issue of fact and law could be found to exist in deciding which particular transactions undertaken by the parties fell within the principles decided in Roxborough. The appellants' submissions assumed that that inquiry would be very simple. That may or may not be so, but even if it is, the fact that an issue may be simply resolved does not deny its existence, and does not demonstrate that it is not an issue common to a number of claims arising out of separate contracts.

   In the course of oral argument, however, a more deep-seated question emerged concerning the application of Pt 8, r 13(1) to the present proceedings … The procedure contemplated in these proceedings was that those who wished to take the benefit of the proceedings must "opt-in". None had done so when the proceedings commenced. Were there, at the time these proceedings were commenced, numerous persons who had the same interest in the proceedings? …

   ...

   The summons issued in the Fostif matter contained a prayer for relief claiming "[j]udgment against the defendant in favour of the plaintiff together with interest pursuant to section 94 of the Supreme Court Act (NSW)", "further or other orders", and costs … it was apparent ... that Fostif claimed judgment for a money sum, and that any who later chose to opt-in to the proceedings would make like claims. The amount of Fostif's claim was set out in a schedule to the summons. But when instituted, the proceedings made no other claim …

   ... when the proceedings were instituted, Fostif made no claim on behalf of any of those other purchasers.  Their participation in the proceedings, and any consequence for their rights, depended upon them choosing to join the proceedings …

   At the time the summons was issued to commence the Fostif proceedings, there were no persons, other than Fostif, who had an interest in the proceedings which were instituted, as distinct from an interest in knowing which way the issues raised in those proceedings were decided. No other person had an interest in those proceedings because no order made or judgment given in the proceedings would bind that other person. No grant of declaratory relief was sought to resolve or determine any question common to the "numerous persons" alleged to have "the same interest in the proceedings". The summons is thus to be distinguished from the statement of claim in Carnie, where the plaintiffs claimed declarations for the common benefit of "the represented debtors."[34]

   [34] Ibid at [50], [51], [56], [57] and [58].

   (Citations omitted)

   and Callinan and Haydon JJ said:

   The second condition was that "the same interest" must actually have existed when the proceedings began. It was not enough that it might exist at some future time.

   Both these conditions were satisfied in Carnie v Esanda Finance Corporation Ltd. However, that case is distinguishable from the present one. In that case para 6 of the statement of claim alleged that the plaintiffs had brought proceedings on behalf of themselves and all other persons (the represented debtors) who had entered certain described contracts. The relief claimed included a declaration that no represented debtor was required to pay any amount on account of credit charges in relation to contracts answering the description in para 6. Because of the claim for a declaration so framed, the allegation in para 6 that the plaintiffs were bringing the proceedings on behalf of themselves and the represented debtors was in one sense true, even though the plaintiffs had no instructions from the represented debtors. …

   ... what the plaintiff, Fostif Pty Ltd, was claiming was simply a sum of money to be calculated by reference to its pleaded dealings with the defendant. That sum of money is entirely different from other sums of money to which other retailers, who were not plaintiffs at that time, might be entitled by reason of their unpleaded dealings with the defendant.

   Hence it was not true to say, when the summons was filed and served, that in claiming the sum of money to which it may be entitled the plaintiff, Fostif Pty Ltd, was acting "on behalf of ... the class of unnamed persons". The true position was that it was acting on its own behalf in seeking to recover the sum of money which it claimed to be entitled to.

   Nor was it true to say that the plaintiff was acting on behalf of any member of that class in relation to any claim for any other sum of money. That is because the pleading had not alleged any dealings between any particular member of that class and the defendant which would entitle that member to any sum of money, and no sum of money based on any particular member's dealings with the defendant had been claimed.

   Nor, when and if members of the "class of unnamed persons" become plaintiffs pursuant to the opt-in procedure, would it be true to say that the plaintiff, Fostif Pty Ltd, was acting on their behalf when the proceedings began. Rather, the true position will be that, as plaintiffs, they will be acting on their own behalf, although no doubt, at least ostensibly, through the same legal team as the original plaintiff, Fostif Pty Ltd.

   In the light of those circumstances, it can be seen that the declaration claimed in Carnie v Esanda Finance Corporation Ltd was a crucial factor in the outcome of that case. Although that was a declaration claimed by the only two plaintiffs who existed, it could be described, as it was in para 6 of the statement of claim, as a claim "on behalf of themselves and all other persons" in the class described. Further, it was a claim which would affect the rights of the non-plaintiffs as well as the plaintiffs because, if acceded to, it would establish that none of them was liable to pay certain moneys. And if the claim for a declaration were acceded to, pursuant to Pt 8, r 13(4) the declaration would bind the non-plaintiffs. Those non-plaintiffs thus had an "interest" in the proceedings which was the "same" as that of the plaintiffs, even though no opting-in procedure had been complied with, or even, at that point, devised.[35]

   (Citations omitted)

   [35] Ibid at [215]-[216] and [221]-[225].

2. Mr Visic points to the references in the judgments to the absence of a claim by Fostif for a declaration of the rights of all retailers who had paid tobacco licence fees to Campbells and to the point of distinction made by the High Court with the decision in Carnie in which a declaration had been sought of the rights of persons who had entered into the relevant contracts with Esanda.  Mr Visic contends that the decision of the High Court is authority for the proposition that it is essential for a representative action that a common declaration be sought and hence the failure by Mr Proude to seek a declaration is fatal to his claim to have brought a representative action pursuant to rule 81(1) of the Rules.

3. The High Court in Fostif did not hold that, under the 1970 NSW Rules, it was essential that a common declaration be sought of the rights of all members of the group.  The High Court only identified a declaration as one species of relief which might be sought on behalf of all members of a group whom a plaintiff purports to represent.  Gummow, Hayne and Crennan JJ at [56] and Callinan and Haydon JJ at [221]-[224] first addressed the absence of any money claim on behalf of other retailers before turning to the absence of any claim for a  declaration at [58] and [225] respectively.  It was the absence of any relief of any nature whatsoever claimed on behalf of the other retailers which was crucial to the High Court’s decision. 

4. Moreover, the absence of any relief sought on behalf of the other retailers was treated by the High Court as part of construing the entire summons and statement of claim as indicating the absence of any claim on behalf of the other retailers.  The reasoning of the High Court concerning relief was an integral part of its overall assessment whether a claim was made, at the time of institution of the proceedings, on behalf of the other retailers.

5. Accordingly, the decision of the High Court in Fostif is not authority for the proposition advanced by Mr Visic. In any event, the wording of Part 8 rule 13(1) of the 1970 NSW Rules was markedly different to the wording of rule 81(1). In Fostif, the High Court construed and applied the requirement of the NSW Rules that numerous persons have “the same interest in [the] proceedings”.  Rule 81(1), by contrast, only requires a common interest in “questions of law or fact to which the action relates”.  The wording of rule 81(1) is inconsistent with a mandatory requirement that a declaration or common relief must be sought.

6. Finally, in the present case, Mr Proude seeks relief by way of damages suffered by each and every landholder as a result of the alleged negligence of Mr Visic.  Unlike the position in Fostif, Mr Proude did claim on behalf of the group members when he instituted the action.  Moreover, rule 81(4) contemplates relief being sought by way of individual damages.

   Common questions in action against CFS

7. The CFS, supported by Mr Visic, contends that there is no question of law or fact in the action against the CFS which is common to all members of the group.  I deal with this contention in relation to the different ingredients of the cause of action of breach of duty of care against the CFS.

   Common question involving duty of care

8. Mr Proude’s pleaded case is that the CFS owed a duty of care to members of the group to take reasonable care in the course of exercising its powers and functions to control and extinguish the bushfire so as to avoid foreseeable risks of property loss and/or damage.  Mr Proude’s pleaded case is that the duty of care arises from the existence of statutory functions and powers in the CFS to fight and extinguish bushfires and protect life and property coupled with the fact that the CFS in fact deployed personnel and equipment to fight and attempt to control and extinguish the bushfire.

9. The question of the existence of a duty of care of the CFS is similar to the question of the existence of a duty of care of Mr Visic addressed at [41] to [43] above.  Mr Proude’s case is that the CFS owed a duty of care to all landholders who might suffer physical injury to property as a result of a fire permitted to burn and spread as a result of its negligence.  Every member of the group has a common interest in the question whether such a duty of care was owed.  If the answer to that question at trial is yes, that will be the end of the duty of care issue.  If the answer to that question is no, it is possible that Mr Proude will contend or that the trial Judge will hold that the CFS owed a duty of care to some lesser group, being a subset of the entire group.  That would give rise to a secondary question in which not all group members would necessarily have a common interest.  However, that does not detract from the existence of the primary question whether a duty of care was owed to all members of the group. 

   Common question involving breach of duty

10. Mr Proude’s pleaded case is that the CFS breached its duty of care and was negligent at successive stages and levels.

11. In some respects, Mr Proude’s pleaded case distinguishes between negligence in respect of area A and negligence in respect of area C.  For example, Mr Proude’s pleaded case is that:

    1.no blacking out was undertaken and no fire fighting resources were deployed in area C until 3.30 am on 11 January 2005;

    2.no fire fighting resources were deployed at all in respect of area A.

12. The CFS contends that some members of the group may have had their properties burnt as a result of the escape of the fire at area A and different members of the group may have had their properties burnt as a result of the escape of the fire at area C and hence negligence by the CFS in respect of area A is irrelevant to those affected by the escape of fire at area C, and vice versa.  The CFS also contends that each of area A and area C are relatively large and the fire may have escaped from various points inside either area or indeed from points outside either area.

13. At this stage, it is not clear whether the theoretical possibilities identified by the CFS actually arise on Mr Proude’s case as to the cause of the fire.  I shall assume, in favour of the defendants, that they do.  On that assumption, questions involving negligence by the CFS in respect of area A may not be relevant to members of the group impacted by the escape of the fire at area C, and vice versa.  To that extent, without deciding the point, it may be that negligence in respect of area A and negligence in respect of area C do not involve questions in respect of which the group members have a common interest.

14. However, there are other aspects of Mr Proude’s pleaded case on negligence which are independent of the differentiation between area A and area C.  Those aspects do give rise to common questions of fact and law.  They include Mr Proude’s pleaded case that:

    1.there were defects in the CFS’s Incident Action Plan, in part as a result of inadequate gathering of information;

    2.there were defects in the handover from the first to the second Incident Controller and in failing to modify the Incident Action Plan in light of subsequent developments and information;

    3.there were defects in the passing of information from personnel at the firefront up through various levels of the CFS to State Headquarters and in the direction and control from State Headquarters down through various levels of the CFS to personnel at the firefront;

    4.the principal fire fighting measure adopted of blacking out the fireground to 30 metres was inadequate in nature and extent and additional blacking out, together with back burning and creation of bare earth breaks, should have been undertaken and additional fire fighting resources developed.

    Common questions involving causation steps

15. Mr Proude’s pleaded case is that the negligence of the CFS at successive stages and levels caused the bushfire to escape at areas A and C and that it subsequently converged and burnt the 78,000 hectares of land. 

16. Just as, in some respects, Mr Proude’s pleaded case distinguishes between negligence in respect of area A and negligence in respect of area C, it is at least theoretically possible that negligence at area A led to the burning of some group members’ land and negligence at area C led to the burning of other group members’ land. It may be, therefore, that issues of causation from negligence at area A and negligence at area C do not involve questions in respect of which the group members have a common interest. However, as identified at [63] above, there are other aspects of Mr Proude’s pleaded case on negligence which are independent of the differentiation between area A and area C. Mr Proude’s pleaded case is that these aspects of negligence caused the fire to burn the properties of all group members who have claims against the CFS.

    Claim against both defendants

17. Mr Visic contends that, in order to meet the prerequisite specified by rule 81(1), it is essential that a claim be made by every member of the group against both defendants.  The CFS does not advance this contention.   

18. On the affidavit evidence adduced for the purpose of the application, the fire on 10 January 2005 burnt land owned by five landholders.  Of those five, land owned by two of them (TE Fiegert and Chris Hull) was burnt only on 10 January 2005.  Land owned by the other three (George and Leslie Hull; Peter and Carline Carbot; and Trevor Puckridge) was burnt on 10 January 2005 but was further burnt on 11 January 2005.  On this basis, all members of the group have claims against both Mr Visic and the CFS except for TE Fiegert and Chris Hull. Mr Visic contends that the fact that two out of at least 257 group members had no claim against the CFS is fatal to the application for authorisation.

19. I reject Mr Visic’s contention.  Rule 81 is concerned with the authorisation of a plaintiff to bring an action as representative of a group.  It simply does not address the joinder of claims against multiple defendants.  That topic is addressed instead by rule 73.

20. Mr Visic does not articulate precisely how the requirement that every member of the group must have a claim against every defendant arises from the language of rule 81. Mr Visic relies upon a decision of a Full Court of the Federal Court in Philip Morris (Australia) Ltd v Nixon[36] for the proposition that representative actions require that all persons represented must have claims against all defendants.  That case involved the application of section 33C(1) of the Federal Court Act.  The respondents were manufacturers of different brands of cigarettes (two Philip Morris, two WD & HO Wills and two Rothmans companies).  The six named plaintiffs allegedly contracted cancer or other diseases as a consequence of smoking cigarettes.  Each named applicant claimed to have been misled by advertising by the three cigarette manufacturers.  The named applicants purported to bring the action pursuant to section 33C as representatives of all similar persons who had contracted diseases over a defined period caused by smoking over a defined period which was in turn caused by advertising by the three cigarette manufacturers.

    [36] [2000] FCA 229; (2000) 170 ALR 487.

21. The applicants conceded that, in order to satisfy paragraph (a) of section 33C(1), each and every member of the represented class was required to have a claim against each and every respondent on the pleadings.  The Full Court was therefore not called upon to decide that question.  However, in his reasons for judgment, Sackville J (Spender J and Hill J agreeing) treated the concession as rightly made.  Sackville J said:

    Secondly, Senior Counsel for the applicants expressly accepted that in order to satisfy par (a) of what the High Court has described as the “threshold requirements” imposed by s 33C(1) … , it was necessary that the applicants’ pleading allege facts that establish that they and every member of the represented class have a claim against every respondent.

    ...

    Perhaps because there was no dispute on these questions, the parties did not explore further the relationship between the procedural requirements of Part IVA of the Federal Court Act and the general principles governing pleadings in the Federal Court.

    ...

    Thirdly, as the parties accepted, s 33C(1)(a) requires every applicant and represented party to have a claim against the one respondent or, if there is more than one, against all respondents. This conclusion follows from the language of s 33C(1)(a) itself and is consistent with the approach taken by the LRC in Grouped Proceedings. It is also consistent with the structure of the legislation. For example, s 33D(1)(a) (which provides that a person who has a sufficient interest to commence a proceeding on his or her own behalf against another person has a sufficient interest to commence a representative proceeding against that person on behalf of other persons referred to in s 33C(1)(a)) is clearly drafted on the assumption that all applicants and represented persons will have claims against the same person.

    It follows that s 33C(1)(a) is not satisfied if some applicants and group members have claims against one respondent (or group of respondents) while other applicants and group members have claims against another respondent (or group of respondents). The requirement in s 33C(1)(b), that the claims of all group members are in respect of or arise out of the same, similar or related circumstances, is a necessary but not sufficient condition for the commencement of representative proceedings. Of course, if there are two sets of claims against two sets of respondents, it may well be that each can be the subject of representative proceedings. It may even be that directions can be made for them to be heard together: Ryan v Great Lakes Council. But they cannot both be the subject of the same representative proceedings.[37]

    (Citations omitted)

    [37] Ibid at [108], [109] and [126]-[127].

1. The view expressed by Sackville J concerning the requirement that every represented person have a claim against every respondent was based on paragraph (a) of section 33C(1).  Rule 81(1) contains no equivalent requirement.  It was not suggested by Sackville J that paragraph (c) of section 33C(1) (which is similar to rule 81(1)) contained such a requirement.

2. In Bray v F Hoffman-La Roche Ltd,[38] a different Full Court of the Federal Court considered the question whether paragraph (a) of section 33C(1) required every represented person to have a claim against every respondent in circumstances in which that issue was contested. The respondents were involved in the manufacture and sale of vitamin products. It was alleged that they had engaged in price fixing and market sharing arrangements in contravention of section 45 of the Trade Practices Act 1974 (Cth). The applicant was apparently a vitamin consumer. The applicant purported to bring a representative action on behalf of all consumers who had purchased specific vitamins supplied by one or more of the respondents.

   [38] (2003) 130 FCR 317.

3. A Full Court of the Federal Court held that the action qualified as a representative action pursuant to section 33C(1) notwithstanding that all group members did not have claims for damages against all respondents.  Finkelstein J held that section 33C(1), and in particular section 33C(1)(a), did not require that every group member have a claim against every respondent.  He observed that the point had not been in contest in Nixon and disagreed with the expression of opinion by Sackville J in that case that this was required.  Finkelstein J said:

   According to the common law, no two causes could be joined in one action … One of the great reforms brought about by the Common Law Procedure Act 1852 (UK) was to get rid of this highly undesirable state of affairs … The common law also denied to two or more plaintiffs the ability to bring an action against one defendant or one plaintiff to bring an action against two or more defendants … The undesirability, indeed the injustice, of the common law position was obvious.  By the end of the 1800s, both the Judicature Acts and rules of court had altered the common law.  As a result, it is now permissible in every superior court for causes of action to be combined or actions to be consolidated so that: (1) if a plaintiff has a number of complaints against a defendant, he is no longer compelled to bring one action for each complaint; and (2)       where there are causes of action between different parties which raise common issues of law or fact, it is no longer necessary for these causes to be tried separately by different judges or juries.

   ...

   It seems to me that if Philip Morris be correctly decided, we are heading back in the direction of 1852.  This result, so it seems to me, is so undesirable that it should be avoided at all costs unless, of course, parliament has mandated it in clear and unambiguous language.  I am of the very firm view that there is nothing in the language of s 33C(1), when considered in isolation or in its setting, which requires that result … It can immediately be acknowledged that a properly constituted representative proceeding must involve a group of seven or more persons each of whom has a claim or claims against one person.  But that is all the section requires.  It simply does not address the situation where some members of the group, say 10 out of a group of 15, also have claims (that is, causes of action) against some other person, being causes of action which satisfy both s 33C(1)(b) (each claim arises out of the same circumstances) and s 33C(1)(c) (each claim gives rise to common issues of law or fact).  Is it necessary for the claims of this smaller group to be prosecuted in a separate proceeding or can they be joined in the proceeding brought by the larger group? I will not place a construction on s 33C which requires separate proceedings to be instituted.[39]

   (Citations omitted)

   [39] Ibid at [247], [248].

4. Carr J held that, if section 33C(1)(a) required every represented party to have a claim against every respondent, it was satisfied by the fact that a claim was advanced on behalf of every represented person for an injunction against every respondent.[40]  He went on to agree with Finkelstein J that it was clear (to the extent required) that Nixon was wrongly decided and that it was not necessary to satisfy section 33C(1)(a) that every group member have a claim against every respondent.[41]

   [40] Ibid at [110]-[119].

   [41] Ibid at [122]-[130].

5. Branson J accepted that the decision in Nixon had attracted criticisms but did not feel able to accept that it was clearly wrong.[42]  However, she went on to say:

   ... I would not reject the possibility that s 33C(1) allows an applicant who has a claim against more than one respondent to commencing a representative proceeding on behalf of more than one group (eg on behalf of two subgroups of members where within each subgroup each member has a claim against the same respondent or respondents).[43]

   [42] Ibid at [199].

   [43] Ibid at [200].

6. Significantly for the present case, each of Carr J and Branson J explicitly held that section 33C(1)(c), which required that “the claims of all those persons give rise to a substantial common issue of law or fact” was satisfied.[44] 

   [44] Ibid at [131]-[133] per Carr J (Branson J at [213] agreeing).

7. The decision of the Federal Court in Bray that section 33C(1)(c) was satisfied is authority that it is not necessary, for there to be a common issue of fact or law, that every represented person have a claim against every defendant.

8. Turning to rule 73, Mr Visic does not contend that the joinder by Mr Proude of both defendants is contrary to that rule.  Nor does he seek an order pursuant to rule 74 or rule 77 for the disjoinder of the CFS from the action.

   Conclusion

9. The prerequisite for an authorisation order under rule 81(1) that the group has a common interest in questions of law or fact to which the action relates is satisfied.

   Time Limitation

10. The second issue is whether an order for authorisation is precluded by section 35(c) of the Limitation of Actions Act 1936 (SA) (“the Limitation Act”) because it would entail the commencement of an action on behalf of the represented persons more than six years after their causes of action accrued.

11. Section 35(c) relevantly provides:

    The following actions namely:

    …

    (c)     actions founded on tort;

    …

    shall … be commenced within six years next after the cause of action accrued and not after.

    Section 35 is expressed in the passive tense (“action shall be commenced”) rather than the active tense (“a person shall commence an action”). Section 35 leaves it to the general law to determine the date on which the relevant cause of action accrued. Section 35 leaves it to the procedural law of the relevant court to determine the date on which an action is “commenced”.

12. Rule 81 provides as follows:

    (1)     The Court may authorise a plaintiff to bring an action as representative of a group     with a common interest in questions of law or fact to which the action relates.

    (2)     If a plaintiff intends to apply for an authorisation under this rule, the action may be   commenced in the ordinary way but the originating process must bear an endorsement in the approved form stating that the plaintiff proposes to apply for     the authorisation.

    (3)     An application for an authorisation under this rule must be made within 28 days after the time allowed for the defendant to file a defence.

    (4)     An authorisation under this rule is not to be refused on the ground that—

    (a)     damages which would require individual assessment are sought by way of              remedy; or

    (b)     the action is based on separate contracts or transactions between individual             members of the group and the defendant.

    (5)     An order authorising a plaintiff to proceed with an action as a representative action    under this rule must—

    (a)     define the group on whose behalf the action is brought; and

    (b)     define the nature of the claim or claims made on behalf of the members of             the group and specify the remedy sought; and

    (c)     define the common questions of law or fact that are to be determined in the            action; and

    (d)     give directions about the determination of other issues raised in the action              that are not common to all members of the group.

    (6)     The Court may vary the order at any time before the Court gives final judgment in     the action.

13. Mr Proude contends that an action is “commenced” when the summons and statement of claim are filed invoking rule 81. Mr Visic and the CFS contend that, on its proper construction, rule 81 does not involve an action being “commenced” within the meaning of section 35 unless and until an order is made by the Court authorising the bringing of an action by the plaintiff as a representative action.

14. In Cameron v National Mutual Life Association of Australasia Limited (No 2),[45] thirteen named plaintiffs sued the developer, builder, window fitter and architect of a residential unit block at Surfers Paradise.  The named plaintiffs had purchased lots in the building from the developer.  They sued for damages caused by the negligence of the defendants which resulted in the penetration of water through the windows.  They also claimed to sue on behalf of all other purchasers of lots from the developer.  Order 3 rule 10 of the Rules of the Supreme Court (Qld) provided:

    When there are numerous persons having the same interest in the subject matter of a cause or matter, one or more of such persons may sue, and the Court or Judge may authorise one or more of such persons to be sued, or may direct that one or more of such persons shall defend, in such cause or matter, on behalf or for the benefit of all persons so interested.

    On application by the defendants, a Master held that the persons sought to be represented did not have the same interest in the subject matter of the cause and struck out the representative aspect of the action.  A chamber Judge dismissed an appeal against the Master’s order, but gave leave for all persons falling within the class which the named plaintiffs claimed to represent to be joined as co-plaintiffs in the action.  The action had been instituted within the six year limitation period, but the order by the chamber Judge was made after the expiration of that period.  The defendants contended that leave should not have been granted for those persons to be joined as co-plaintiffs.

    [45] [1992] 1 Qd R 133.

15. The Full Court of the Supreme Court of Queensland held that the order for joinder had been properly made, notwithstanding that the limitation period had expired.  This was on the basis that the action had been “commenced” on behalf of the represented persons by the institution of the action.  McPherson SPJ (Moynihan J agreeing) said:

    The Rule is expressed in the well known terms originating in the rules made under the Judicature Act 1873 (Eng.) authorising one or more of numerous persons having the same interest in the subject matter of a cause to sue “on behalf or for the benefit of all persons so interested …

    The problem here concerns the application of the Limitation of Actions Act. Its operation depends not upon whether the unnamed plaintiffs were “parties” to the action but on whether they brought an action.  Whether or not they were parties may perhaps assist in resolving the problem, but is not decisive of the matter. 

    By s.10 of the Limitation of Actions Act:

    “(1)   The following actions shall not be brought after the expiration of six years from the   date on which the cause of action arose –

    (a)     an action founded on contract … or tort …”

    The section uses the expression “action brought”.  It does not say that the plaintiff must bring the action, although that must needs be implicit in the requirement …

    The writ issued in this action on 22 December 1988 does not name the plaintiffs to whom Dowsett J on 5 March 1990 gave leave to accede to the action as named co-plaintiffs. The question then is whether, although they were not previously named, they nevertheless “brought” the action commenced on 22 December 1988. That falls to be decided according to the language of O. 3 r. 10. It says that one or more numerous persons “may sue … on behalf … of all persons so interested” … The terms of O. 3 r. 10 thus apply to bringing an action, and to doing so “on behalf of all persons … so interested”. The rule, it will be seen, makes no distinction between named plaintiffs and unnamed plaintiffs. The action is brought by one or more persons on behalf of them all. In view of this, I do not think it possible to say that the action is brought by or on behalf of the named plaintiff or plaintiffs but not by or on behalf of those not named. In terms of the rule and of s. 10(1) of the Limitation of Actions Act, the action is “brought” on behalf of all them.  On that view of the matter the plaintiffs, both those named and those represented but not named, brought this action when the writ was sealed on 22 December 1988.[46]

    [46] Ibid at 134 and 136-137.

16. In Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd,[47] the Court of Appeal of the Supreme Court of New South Wales followed Cameron and held that, under Part 8 rule 13 of the 1970 NSW Rules, an action was commenced on behalf of the persons represented for the purposes of the Limitation Act 1969 (NSW) when the action was instituted. Mason P (Sheller JA and Hodgson JA agreeing) held:

    Like McPherson SPJ, I consider that status as a party is not critical to the application of the Limitation Act to representative proceedings that are properly constituted. In New South Wales it is the rules of court which determine when an action is begun for the purposes of the Limitation Act (Fernance v Nominal Defendant (1989) 17 NSWLR 710 at 720, per Gleeson CJ). Where Pt 8, r 13 is properly engaged, the proceedings are in terms “commenced … by [the lead plaintiff] as representing [the persons having the same interest in the proceedings]”. In other words, the limitation clock stops for the whole group (see also American Pipe & Construction Co v Utah 414 US 538 (1974)). This conclusion about the Limitation Act is consonant with the principle that represented persons are bound by the outcome of issues decided in the representative proceedings (see below).[48]

    [47] [2005] NSWCA 83; (2005) 63 NSWLR 203.

    [48] Ibid at [44].

17. The decisions of those two courts of intermediate appeal are authority for the following propositions.

    1.The Limitation Act does not define or dictate when an action is commenced, but rather leaves this to the procedural law of the relevant court.

    2.An action may be commenced (within the meaning of the Limitation Act) if it is commenced on behalf of a represented person even though the represented person is not a named plaintiff.

    3.Rules of court are not repugnant to the Limitation Act merely because they define when an action is commenced.

18. Rules for representative actions, historical and present, in South Australia and other jurisdictions, vary considerably as to the requirements for authorisation by the Court.

19. The structure of the original Rule 10 of the 1873 English Rules was that no authorisation was required for a plaintiff to sue on behalf of other persons (provided the prerequisite of numerous parties having the same interest was satisfied).  The rules of the various Australian jurisdictions were modelled on Rule 10.  Order 15 Rule 9 of the 1913 SA Rules and Order 16 Rule 9 of the 1947 SA Rules were in similar terms to the original Rule 10.  Order 3 rule 10 of the Queensland Rules which applied in Cameron was in the same terms as Order 16 Rule 9 of the 1947 SA Rules.

20. Part 8 rule 13(1) of the 1970 NSW Rules took a different approach. It provided that, where the prerequisite was met, “the proceedings may be commenced, and, unless the Court otherwise orders, continued” by one person as representing all persons. Part IVA of the Federal Court Act by sections 33C and 33N takes essentially the same approach.

21. Rules 34.01 and 34.02 of the 1987 SA Rules provided that, where the prerequisite was met, one person might commence an action as representative on behalf of the group, but that person was required within 28 days after the defendant filed a notice of address for service to apply to the Court for an order authorising the action to be maintained as a representative action.

22. Rule 81 of the current Rules provides that, if a plaintiff intends to apply for authorisation, the action may be commenced in the ordinary way with an endorsement stating that the plaintiff proposes to apply for authorisation and then empowers the Court to authorise the plaintiff to bring the action as representative of the group if the prerequisite is satisfied.

23. Subject to one qualification,[49] the defendants accept that, under the structure of the original Rule 10 of the 1873 English Rules and the historical rules of the Australian jurisdictions modelled on it (for example Order 16 Rule 9 of the 1947 SA Rules), an action was “commenced” within the meaning of section 35 of the Limitation Act on the date of filing of the summons and statement of claim. However, the defendants distinguish the structure of rule 81 of the current Rules and contend that it is the authorisation by the Court, and not the institution of the action by the plaintiff, which represents the point at which the action is “commenced” within the meaning of section 35. The defendants also contrast the structure of rule 81 with the structure of rule 80 of the current Rules which involves the commencement of a representative action at the time of institution of the action, but does so in circumstances in which the represented persons must already have signed a written authority to the representative which must filed in Court, and hence it can be said that the action has been commenced on their behalf in accordance with authority under general principles of agency. This raises for consideration the proper construction of Rule 81, which in turn involves consideration of its language, structure, context and evident purpose.

    [49]   Addressed below at [115]-[120].

24. Sub-rules (1), (2) and (3) of rule 81 provide as follows:

    (1)     The Court may authorise a plaintiff to bring an action as representative of a group     with a common interest in questions of law or fact to which the action relates.

    (2)     If a plaintiff intends to apply for an authorisation under this rule, the action may      be commenced in the ordinary way but the originating process must bear an endorsement in the approved form stating that the plaintiff proposes to apply for     the authorisation.

    (3)An application for an authorisation under this rule must be made within 28 days after the time allowed for the defendant to file a defence.

25. Sub-rule (2) uses the verb “commenced” in contra-distinction to sub-rule (1) which uses the verb “bring”. Sub-rule (2) uses the passive form (“may be commenced”), whereas sub-rule (1) uses the active form (“to bring”). Thus, sub-rule 2 (“may be commenced”) uses both the verb and the passive form used by section 35 of the Limitation Act (“shall be commenced”).

26. The construction advanced by the defendants of rule 81 is that, when the plaintiff institutes the action, he or she does so purely on his or her own behalf.  At that point, the action is in no sense a representative action.  It is only subsequently, after the plaintiff makes application for authorisation pursuant to sub-rule (3) and when the Court grants authorisation pursuant to sub-rule (1), that the action is transformed from a personal action to a combined personal and representative action.

27. The existence and wording of sub-rule (2) does not fit with the defendants’ construction.  If the action were only “commenced” as a purely personal action, there would be no need for sub-rule (2) to enable the action to be commenced.  The position would be fully governed by rule 34 which provides for commencement of an action by filing a summons.  Nor would there be a need for the originating process to bear an endorsement stating that the plaintiff proposes to apply for authorisation because the action would only exist at that point as a personal action: only the application for authorisation under sub-rule (3) would initiate the conversion of the personal action into a representative action. 

1. Section 35 of the Limitation Act is no impediment to the making of an authorisation order under rule 81.

   Exercise of discretion

2. The third issue is whether an authorisation order should be made as a matter of discretion.  The defendants contend that I should exercise my discretion against making an authorisation order. 

3. The first ground advanced against the exercise of the discretion is that the extent of the questions of law or fact in which the group has a common interest is small compared to the individual questions which will arise in respect of each group member’s individual claim.

4. I reject that contention.  The common issues which I have identified at [41]-[46] and [57]-[65] above are both extensive and important.  Their determination will resolve major issues of the existence and content of a duty of care and breach of duty of care by each defendant.

5. Determination of the common issues may still leave for determination  some aspects of alleged negligence of the CFS (particularly in respect of area A and area C) and issues going to causation involving the course of the fire from the point or points at which it broke out of the paperbark swamp to its final exhaustion.  To the extent that those issues are not common to all members of the group who have claims against Mr Visic and/or the CFS, they will nevertheless be largely common to the vast majority of the members of the group.  It would be convenient and sensible that issues affecting multiple members of the group be determined at a single trial encompassing both common and semi-common issues.  This would leave for separate determination the assessment of causation and quantum of loss suffered by each individual member of the group depending upon the detail of the land and property of each group member burnt by the bushfire.

6. The second ground advanced against the exercise of discretion involves the definition in paragraph 4 of the original statement of claim of the group by reference to “the Fire” as defined in the statement of claim.  The defendants contend that the definition of the group involves a degree of circularity which would preclude identification of the members of the group until the final determination of all issues in the action.  Mr Visic contends that the Fire is defined to be the fire which broke out on the eastern side of Lady Franklin Drive, it is a live issue in the case whether it was the same fire which broke out of the paperbark swamp on the morning of 11 January 2005, and accordingly there is uncertainty whether the members of the group are only those whose land was burnt on 10 January or also those whose land was burnt on 11 January.  The CFS contends that there is circularity because the group is defined by reference to those who suffered loss by reference to particular causes as opposed to whether they claimed to suffer such losses.

7. In relation to Mr Visic’s contention, the Fire is not defined in a manner which confines it to the fire which started on Lady Franklin Drive.  It is defined to encompass whatever fire or fires burnt the area of land on the Lower Eyre Peninsula comprising approximately 78,000 hectares.  In relation to the CFS’s contention, the group is simply defined in terms of those whose land was burnt on 10 and 11 January 2005 and does not depend upon the particular causes.  It is an objective fact as to whose land was burnt, which is capable of being ascertained and determined.  Accordingly, I reject the defendants’ contentions that the definition of the group is a reason to exercise my discretion against making an authorisation order.

8. The CFS contends that the apparent strength or weakness of the group members’ claims is a relevant consideration and the CFS contends that the group’s case against it is weak (and indeed manifestly hopeless).  While it is impossible to say that the strength of the group’s case could never be a relevant factor, I am not in a position at this point make an adequate assessment of the strength of the case and in any event consider that in the circumstances of this case it is not a ground on which to exercise my discretion not to make an authorisation order.

9. The CFS contends that the fact that five insurers have indemnified approximately 40 percent of the group members’ losses is a ground upon which to exercise the discretion against an authorisation order because the insurers could institute proceedings in the names of their insured exercising subrogation rights. Leaving aside the fact that the defendants would contend that the Limitation Act would prevent the institution of such actions at this point, this contention has no significant weight because the majority of the claims by group members are not indemnified by insurers.

10. The CFS contends that there are risks of potential conflicts in Mr Proude’s solicitor Duncan Basheer Hannon acting for all group members where there may be conflict between the interests of different group members.  However, the position would be no different if all group members had joined as co-plaintiffs in the action pursuant to rule 73 and Duncan Basheer Hannon were acting as solicitors for those plaintiffs.

11. The defendants make a number of contentions against the exercise of my discretion in favour of authorisation on the assumption that an opt-in procedure is adopted.  Those contentions are not relevant as I conclude below that an opt-out procedure ought to be adopted.

12. In the circumstances, the factors in favour of authorisation point overwhelmingly in favour of the exercise of discretion to make an authorisation order. 

    Security for costs

13. The fourth issue is whether security for costs can and should be ordered pursuant to rule 194 or rule 81.

    Representative capacity and insufficient resources

14. Rule 194(1)(a) provides:

    The Court may order a plaintiff to provide security for costs if –

    (a)the action is brought in a representative capacity and the plaintiff is insolvent or would have insufficient resources to meet an order for costs if the action were to prove to be unsuccessful ...

15. Mr Proude concedes that the second prerequisite for an order under rule 194(1)(a) is met, namely that he would have insufficient resources to meet an order for costs if the action were to prove to be unsuccessful.  However, he disputes that the action is brought “in a representative capacity”.

16. The equivalent of rule 194(1)(a) under the 1987 SA Rules was rule 100.01(a).  That rule provided:

    The Court may order security for costs to be furnished:

    ...

    (a)     where the plaintiff is a mere nominal plaintiff and is in a condition of poverty or     insolvency ...

    Mr Proude contends that a representative action under rule 34 was not one in which the plaintiff was a “mere nominal plaintiff” and the same approach should be taken to rule 194(1)(a) of the current Rules.

17. The following propositions were established in relation to the concept of a “mere nominal plaintiff” under the 1987 Rules and equivalent rules in other jurisdictions. 

    1.The starting point was the basic rule that a natural person was not ordinarily required to provide security for costs by reason only of impecuniosity.[54]

    2.To be a “nominal plaintiff”, the action must have been brought by the plaintiff for the benefit of some other person.[55]

    3.A “mere nominal plaintiff” was one who could not derive any personal benefit from the action.[56]

    4.Executives, administrators, trustees, bankruptcy trustees and liquidators were not “mere nominal plaintiffs” even though they might be described as suing “in a representative capacity”.[57]

    [54]   Collins v Emacord Autos Pty Ltd [1997] SASC 6418 per Lander J (Doyle CJ and Bleby J agreeing).

    [55]   Cowell v Taylor (1885) 31 Ch D 34 at 38-39 per Bowen LJ; Co-operative Farmers’ & Graziers’ Direct Meat Supply Ltd v Smart [1977] VR 386 at 387 per Kaye J.

    [56]   Co-operative Farmers’ & Graziers’ Direct Meat Supply Ltd v Smart [1977] VR 386 at 387 per Kaye J; Coyle v Cassimatis [1994] 2 Qd R 262 at 265 per Ryan J.

    [57]   As to the position in England where security for costs was governed by common law principles on which Rules of Court were later based, see White v Butt [1909] 1 KB 50; Rainbow v Kittoe [1916] 1 Ch 313 at 319-320 per Sargant J; and Perry v Jackson [1998] 4 VR 463 at 465 per Ashley J.

18. I assume that, because he sues for his own substantial loss and damage (claimed to be over $2.2 million), Mr Proude would not have been regarded as a “mere nominal plaintiff” within the meaning of rule 100.01(a).  However, it does not follow that he is not suing “in a representative capacity” within the meaning of rule 194(1)(a).

19. In general terms, wherever possible, the Rules should be construed as a harmonious and coherent set of procedural rules. As observed at [111] above, a number of rules provide for a plaintiff to bring an action as representative of another person. They include rules 78, 80, 81 and 82. Rule 38(3)(d) requires the originating process to be endorsed if the action is brought in a “representative capacity”. Those words are apt to include actions brought pursuant to rules 78, 80, 81 and 82.

20. Where a person represents the interests of a person under a disability under rule 78, the representative has no personal interest at all in the proceedings.  By contrast, where a member of a group is a representative of the group under rules 80, 81 or 82, the plaintiff brings the action in a dual capacity.  The plaintiff does have a personal interest in the action insofar as the plaintiff brings his or her own claim, but is acting in a representative capacity in respect of the claims brought on behalf of the other group members.  This difference is a factor to be taken into account in the exercise of the discretion under rule 194, but is not a reason in itself to deny that a plaintiff proceeding under rules 80, 81 or 82 is proceeding in a “representative capacity” within the meaning of rule 194(1)(a).

21. It follows that the defendants have established the prerequisites required by rule 194(1)(a) for the exercise of discretion as to whether the plaintiff should be ordered to provide security for costs. 

    Necessary in the interests of justice

22. Rule 194(1)(e) provides:

    The Court may order a plaintiff to provide security for costs if –

    …

    (e)     the order is necessary in the interests of justice.

23. In the alternative to their principal contention based on paragraph (a) of rule 194(1), the defendants contend that it is necessary in the interests of justice that the plaintiff be ordered to provide security for costs because Mr Proude brings the action largely for the benefit of the represented persons and he himself does not have sufficient resources to meet an order for costs if the action is unsuccessful. I address the defendants’ reliance on rule 194(1)(e) on the assumption that, contrary to my conclusion above, paragraph (a) has no application.

24. The “interests of justice” ground was introduced by the 2006 Rules.  The 1987 Rules contained a residual ground being “special circumstances”.  The mere fact that the plaintiff was impecunious did not amount to “special circumstances”.[58]

    [58]   Collins v Emacord Auto Pty Ltd [1997] SASC 6418 per Lander J (Doyle CJ and Bleby J agreeing).

25. Under rule 194(1)(d) and section 1335 of the Corporations Act 2001 (Cth), security for costs may be granted where there is reason to believe that a company plaintiff will be unable to pay the costs of a defendant if successful. The rationale for this ground for security for costs is that a company is an artificial legal entity and that other persons (usually shareholders or creditors) stand to benefit if the company is successful in the action but are not prima facie liable for costs if it is unsuccessful.[59]  This rationale is similar to the rationale for rule 194(1)(a) where an action is brought in a representative capacity in that other persons stand to benefit but are not prima facie liable for costs if the action is unsuccessful.[60]  There may be circumstances other than those captured by paragraphs (a) and (d) of rule 194(1) in which other persons stand to benefit from the action if successful but prima facie will not be liable for costs if unsuccessful.  That might include circumstances in which a litigation entrepreneur is funding the action in return for an agreed share of the proceeds.[61]

    [59]   Green (as liquidator of Arimco Mining Pty Ltd) v CGU Insurance Ltd [2008] NSWCA 148; (2008) 67 ACSR 105 at [72] per Basten JA.

    [60]   Harpur v Ariadne Australia Ltd [1984] 2 Qd R 523 at 532 per Connolly J (Campbell CJ and Demack J agreeing).

    [61]   For the approach taken in the Federal Court (bearing in mind that that Court has an unfettered discretion to award security for costs), see Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 at [140]-[141] per Carr J and [252] per Finkelstein J (Branson J at [214] agreeing with both); and Canberra Residential Developments Pty Ltd v Brendas [2009] FCA 745). See also Green (as liquidator of Arimco Mining Pty Ltd v CGU Insurance Ltd (2008) 67 ACSR 105 at [51] per Hodgson JA and [84]-[85] per Campbell JA (but note Basten JA at [65]-[80]).

26. Rule 194(1)(e) is a residual category to catch circumstances in which security for costs ought to be ordered but which do not fall within any of paragraphs (a) to (d).  If other persons stand to benefit from the action, that is a factor to be taken into account in assessing whether an order for security for costs is necessary in the interests of justice. 

27. In Moir v Vodafone,[62] a company owned by Mr and Mrs Moir assigned its rights of action against Vodafone to Mr Moir in return for his agreeing to pay 50 percent of any net proceeds to the company.  As a result of her shareholding in the company, Mrs Moir stood to benefit from the action without being exposed to a prima facie liability for Vodafone’s costs.  Anderson J held that, in the circumstances, it was necessary in the interest of justice to order security for costs pursuant to rule 194(1)(e).

    [62] [2009] SASC 234.

28. In the case of a representative action under rules 80, 81 or 82, ex hypothesis other persons do stand to benefit if the action is successful but are not prima facie liable for costs if the action is unsuccessful.  In the particular circumstances of this case, where Mr Proude himself claims to have suffered losses of approximately $2.2 million but is representing other persons who claim to have suffered losses of approximately $58 million, the position is analogous to that pertaining under paragraph (a) or paragraph (d).  Mr Proude contends that paragraph (e) should be read ejdusdem generis with paragraphs (a), (b) and (c) and that the underlying genus relates to the prevention of abuse of process.  He contends that an order for security for costs is only necessary in the interest of justice where it is necessary to avoid abuse of process.  I reject that contention.  First, while abuse of process principles underly paragraph (c), abuse of process is not a necessary element under paragraphs (a), (b) or (d).  Secondly, paragraph (e) is a residual category to catch circumstances in which an order for security for costs is necessary in the interests of justice which do not fall within any of the other paragraphs.

29. I defer concluding that an order for security for costs is “necessary” in the interests of justice, as in a practical sense that involves the exercise of a judgment analogous to the discretion which is required to be exercised if the matter is governed by paragraph (a) of rule 194(1).

    Term or condition of authorisation order

30. The defendants contend that, if the Court does not have power under rule 194 to order security for costs, it has power under rule 81 to make it a condition of the authorisation order that security for costs be provided or alternatively include as a term of the authorisation order that security for costs be provided.

31. Given my conclusion that rule 194(1)(a) authorises security for costs in relation to representative actions under rule 81 (provided the plaintiff would have insufficient resources to met an order for costs), the question whether an order for security for costs could be made in one form or another under rule 81 itself does not arise.  On the construction of rule 194 which I have adopted, it is rule 194 rather than rule 81 which addresses the topic of security for costs.

    Exercise of discretion

32. There are several decisions in the Federal Court addressing security for costs considerations in representative actions under Part IVA of the Federal Court Act.  In considering Federal Court decisions, it is important to bear in mind two provisions of the Federal Court Act.  First, section 56(1) confers an unfettered discretion to order security for costs in all actions (ie there are no prerequisites as is the case under rule 194).[63]  Secondly, section 43(1A) contains a general preclusion on the Court making an order for costs against a represented person. 

    [63]   Bell Wholesale Co Ltd v Gates Export Corporation [1984] FCA 34; (1984) 2 FCR 1 at 2-3 per Sheppard, Morling and Neaves JJ.

33. In Woodhouse v McPhee,[64] Merkel J said:

    Section 56 confers a broad discretion on the Court which is to be exercised by reference to the particular circumstances arising in each case.  Accordingly, the Court should be cautious about enunciating general rules that might fetter that discretion.  However, in my view there is no reason why, in general, the fact that a proceeding is brought for the benefit of others under Pt IVA ought not to be a consideration which together with other considerations can favour the ordering of security.

    Merkel J went on to say that the direct costs immunity conferred by section 43(1A) was to some extent a countervailing consideration. 

    [64] [1997] FCA 1509; (1997) 80 FCR 529 at 533.

34. In Ryan v Great Lakes Council,[65] Lindgren J said:

    … it was not contested that, down to the end of the hearing on liability, [the eighth and ninth respondents] will incur no costs over and above those they would have incurred down to that point in meeting a claim made by Mr Gower alone …

    ... In my opinion, the fact that the costs of [the eighth and ninth respondents] incurred and to be incurred in connection with the determination of liability have not been and will not be increased by virtue of the proceeding being representative rather than individual actions was clearly a relevant consideration for his honour to take into account in exercising his discretion …

    I do not think his Honour erred in not taking into account the fact that it was unlikely that  any proceeding would have been brought had the representative procedure under Pt IVA not been available, or the fact that [the eighth and ninth respondents] would have had recourse against several parties for recovery of costs if separate actions had been brought by the group members.[66]

    Lindgren J went on to articulate that the answer to the respondents’ contention in this regard was section 43(1A) of the Federal Court Act.

    [65] [1998] FCA 646; (1998) 155 ALR 447.

    [66] Ibid at 453, 456.

35. In Bray v F Hoffman-La Roche Ltd,[67] Merkel J at first instance exercised his discretion against ordering security for costs.  A Full Court of the Federal Court held that his discretion miscarried.  The Full Court held that the cost immunity conferred by section 43(1A) was not a determinative factor against security for costs.[68]  Carr J said:

    It is one thing for a group member to be saddled with an order for what might be joint and several liability for a very substantial costs order at the end of the hearing of a representative proceeding, but it is another thing to have the choice of contributing what might be a modest amount to a pool by which the applicant might provide security for costs …

    Much would depend upon the number of group members involved, their financial circumstances and in particular whether an order for security for costs might stifle the proceedings.  In that regard, in my opinion, it was for the applicant to adduce evidence about the likely effect of any order for security for costs.  She chose not to do so and in my view, in those circumstances, the discretion having miscarried, it should be exercised again.[69]

    and Finkelstein J said:

    The effect of the first provision [section 33ZG(v)] is to ensure that an application for security for costs is not confronted with any special hurdle based on the type of proceeding (a group proceeding) in which it is made.  The effect of the second [section 43(1A)] is to protect represented parties in relation to any costs order which may be made in the action.  There is no overlap between the two sections ...

    Dependent upon the type of proceeding, the represented group may be quite diverse.  The group may include corporations as well as natural persons. The members of the group, whether corporate or not, may be rich or poor. In my view, the characteristics of the group should be taken into account on an application for security. Accordingly, if there is still a rule that an order for security should not be made against an impecunious natural person (for a criticism of the absoluteness of this rule see Melville v Craig Nowlan & Assocs Pty Ltd (2002) 54 NSWLR 82), the rule may have little application to many class actions … It is also appropriate to bear in mind that it is commonly the case in a class action that a person will stand behind (I mean fund) the applicant. Usually this will be the applicant’s solicitor, who will sometimes charge what is referred to as a “contingency fee” for the privilege. When a proceeding is brought by a “nominal plaintiff” that is a plaintiff who will not himself benefit from the action but is making the claim for the benefit of someone else, an order for security is usually made. A party who is being funded by his solicitor is not really a “nominal plaintiff”. Nevertheless, the solicitor does stand to benefit from the action (especially as regards the additional fee) if the action is ultimately successful, as the solicitor will then be able to recover his costs. That is a relevant, though not a decisive, consideration when deciding whether security should be ordered.[70]

    [67] (2003) 130 FCR 317.

    [68] Ibid at [140]-[142] per Carr J and [250] per Finkelstein J (Branson J at [214] agreeing with both).

    [69] Ibid at [141] and [142].

    [70] Ibid at [250] and [252].

    Application to the facts

1. On the affidavit evidence, there are at least 257 landholders represented by Mr Proude.  The majority are individuals or couples, but they include several companies and several business names in respect of which the nature of the underlying entity is unclear.  The total claims by the group members are approximately $60 million and the totals claims by Mr Proude are approximately $2 million.  Of the total claims, approximately 40 percent are for damages which have been paid out to group members by five insurers.  I infer that, to the extent that the insurers receive recoveries as a result of the action, the monies will be payable to the insurers pursuant to rights of subrogation/recoupment. 

2. Mr Proude declined to adduce any evidence as to the funding of the action or whether he is indemnified by any person against his potential cost liability to the defendants.  In all of the circumstances, I infer that Mr Proude is not funding the action.  I infer that the action is either being funded by some or all group members (including Mr Proude) or by the group’s solicitors or a combination of both.  The legal costs likely to be incurred by Mr Proude, Mr Visic and the CFS if the action proceeds to trial are likely to be over $1 million each.  In the circumstances, I infer that Mr Proude would not prosecute the action solely to recover his own losses (ie if it were not a representative action).

3. There are several factors which point against exercising my discretion to order security for costs.  They include:

   1.the defendants would still incur the substantial majority of the legal costs which they will incur in the representative action if the action were solely to recover Mr Proude’s own losses;

   2.there is a reasonable prospect that, if the defendants are successful, an order would be made against the represented parties as non-parties in the exercise of the Court’s discretion applying the principles identified in Knight v FP Special Assets Ltd[71]; 

   3.Mr Proude has substantial assets, owning in his own name real estate valued by the Valuer-General at $2.9 million subject to a mortgage which probably does not exceed $1 million;

   4.Mr Proude is obviously not a “man of straw” selected as the representative for that reason. 

   [71] [1992] HCA 28; (1992) 174 CLR 178.

4. On the other hand, there are several factors pointing in favour of the exercise of discretion to order security for costs.  They include:

   1.I have found that Mr Proude would not be proceeding with the action to recover his own losses and the action is only being prosecuted because it is a representative action for the benefit of the group members;

   2.I have found that Mr Proude is not funding the action and it is being funded by either some or all members of the group (including Mr Proude) or the group’s solicitors;

   3.if all members of the group had been joined as co-plaintiffs under rule 73, they would prima facie be liable for the defendants’ costs if the defendants are successful, whereas utilising rule 81 they are not so liable (albeit they might be subjected to an order under the Knight principle);

   4.a substantial proportion of the total loss claimed by the group will be recovered by insurers.

   There are a number of factors which are sometimes determinative or important to discretionary considerations but which are neutral or not determinative in the present circumstances.  They include:

   1.I am not in a position to assess the group’s claim as being either strong or weak such that the assessment would have a material effect upon the exercise of my discretion;

   2.Mr Proude expressly eschews any suggestion that an order for security for costs would stultify prosecution of the action;

   3. the applications for security for costs have been brought promptly in the sense that they have been brought prior to an authorisation order being made under rule 81 and are dependent upon such an order being made.

5. In all of the circumstances, it is appropriate to order security for costs in favour of each defendant.  If I had been satisfied that Mr Proude would prosecute his action to trial if he were only claiming his own losses, that Mr Proude is himself funding the action and that the costs which would incurred by the defendants in a purely personal action by Mr Proude would not be substantially less than the costs they will incur on the representative action proceeding to trial, it is likely that I would have declined to order security for costs.  However, I have found that the reality is that this action will only proceed to trial because it is a representative action and because its prosecution is not being funded by Mr Proude alone.  In the particular circumstances, and weighing all factors for and against making an order, it is appropriate to adopt the approach broadly outlined by the Full Court of the Federal Court in Bray and order security for costs.

6. Mr Proude contends that the defendants are sufficiently protected in relation to their recovery of costs by the prospect of their being able to seek an order against the represented persons at the conclusion of the action under the principle in Knight.  The prospect that the defendants might obtain such an order is not a sufficient reason to exercise my discretion against ordering security for costs given that I have concluded that it is otherwise appropriate to so order.  That is because it is impossible at this interlocutory stage to exercise in advance the discretion under the Knight principle and determine that an order would be made at the end of the action against the represented persons that they pay the defendants’ costs of action.  That discretion can only be exercised once all the relevant circumstances are known at the end of the action and after hearing submissions from all interested persons (including the represented persons themselves).  The 255 landholders who have provided instructions to Duncan Basheer Hannon are of course at liberty at this point to assume co-liability with Mr Proude for the defendants’ costs but none of them have elected to do so.  In addition, the absence of an order for security for costs is sometimes taken into account as a factor against awarding non-party costs.[72]  This makes it doubly important not to attempt to second guess on an application for security for costs the exercise of the discretion at the end of the case to make a non-party costs order.  In the circumstances, I should exercise my discretion on the question of security for costs without presuming that a non-party costs order will be made at the end of the action.

   [72]   Ram Coomar Coondoo (1876) 2 App Cas 186 at 211; Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 190-191 per Mason CJ and Deane J; Vestris v Cashman (1998) 72 SASR 449 at 457-458 per Olsson J and 468 per Lander J.

7. Mr Proude contends that the fact that, if each individual group member had been joined as a plaintiff under rule 73 or brought a separate action, no security would have been ordered, is a reason not to exercise my discretion to order security for costs.  I reject that contention because in that event the group members would be directly liable to the defendants for their costs of action.

   Nature, form and amount of security for costs

8. Mr Visic’s solicitor made an estimate of party/party costs recoverable by Mr Visic if successful after trial of $4.05 million.  Her estimate for trial costs was $2.75 million.  This estimate was based on an assumption of 234 days’ trial based in turn on the fact that a coronial inquest into the bushfire ran for 234 sitting days.  It was based on a daily rate for senior and junior counsel, solicitor and clerk and transcript of $11,364.  She estimated pre-trial costs of $1.3 million on the basis that they would be approximately half the trial costs.

9. The CFS’s solicitor made an estimate of party/party costs recoverable by the CFS if successful after trial of $4,236,810.  Her estimate for trial costs was $2,157,660.  This estimate was based on an assumption of a trial lasting 153 days (based on separate estimates for opening addresses, documents, lay witness evidence, expert evidence and closing addresses).  It was based on a daily rate for the trial of $13,200 for senior and junior counsel, two instructing solicitors and a law clerk.  Her estimate for pre-trial costs was $2,079,150 based on separate estimates for several interlocutory matters, interlocutory disputes and trial preparation.

10. Where security for costs is ordered, it is frequently ordered up to the first day of trial and the question is revisited at the commencement of trial.  In this case, Mr Visic suggested that, if security for costs were to be ordered, it might be that it should be broken into additional stages.

11. Before determining the nature, form and quantum of security which ought to be ordered, it is appropriate to finalise the authorisation order under rule 81, the structure of the trial or trials in the action and the broad timetable for interlocutory and pre-trial steps.  Consideration can then be given to the stage to which the first tranche of security for costs should be ordered.  I will hear the parties on these matters before making an order for security for costs.

    Terms of authorisation order

12. The final issue is what should be the terms of the authorisation order.

    Definition of issues

13. The parties made submissions concerning the precise identification of the common issues which are required to be defined in the authorisation order.  I will hear the parties further concerning the definition of the common issues in light of my reasons for judgment and the current state of the pleadings.

14. It is desirable that issues which are not common to all members of the group but which are common to substantial numbers of group members also be identified and it be determined how and when those issues are to be heard and determined.  I will hear the parties on that question.

    Opt-in or opt-out process

15. It is common ground that the authorisation order should encompass notice to be given to group members concerning the representative action and define a procedure for group members to elect whether or not they wish to “participate” in the sense of continuing to be represented by Mr Proude.  The parties made submissions whether the procedure to be adopted ought to be an “opt-out” or “opt-in” procedure.  In the circumstances, I consider that an “opt-out” procedure should be adopted.  This is principally because I cannot be satisfied that every group member is aware of the existence of the representative action or will become aware of the action before the date set for election.  Nor can I be satisfied that, if an opt-in procedure were adopted, every group member who did not opt-in had made a conscious and fully informed choice not to participate in the action.  I will hear the parties as to the precise orders to be made for notification to group members and to implement an opt-out procedure.

16. I will hear the parties generally as to the orders which ought to be made. 

    Conclusion

17. The prerequisite for making an authorisation order under rule 81 is satisfied.  The group members have a common interest in several questions of law or fact which arise in the action.   

18. The action was instituted within the time prescribed by section 35(c) of the Limitation Act on behalf of the group members. Section 35 affords no reason not to make an authorisation order.

19. I exercise my discretion in favour of making an authorisation order.  I will hear the parties as to its terms. 

20. The action is brought in a representative capacity within the meaning of rule 194(1)(a).  In any event, it is in the interests of justice within the meaning of rule 194(1)(e) to order security for costs.  I exercise my discretion in favour of ordering security for costs.  I will hear the parties as to the nature, form and amount of the security to be provided.