Rickhuss v The Cosmetic Institute Pty Ltd

[2018] NSWSC 1848

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Rickhuss v The Cosmetic Institute Pty Ltd [2018] NSWSC 1848

Hearing dates:

07 May 2018

Date of orders:

04 December 2018

Decision date:

04 December 2018

Jurisdiction:

Common Law

Before:

Garling J

Decision:

(1)   Notice of Motion filed by the first to fourth defendants dated 21 March 2018 is dismissed. First to fourth defendants are to pay the plaintiffs’ costs of that Motion.

 

(2)   Notice of Motion filed by the fifth defendant dated 21 March 2018 is also dismissed. The fifth defendant is to pay the plaintiffs’ costs of that Motion.

 (3)    Proceedings listed for further directions at 9.30am on 14 December 2018.

Catchwords:

CIVIL PROCEDURE – representative proceedings –negligence – misleading or deceptive conduct and misrepresentations – where plaintiffs and group members suffered complications after cosmetic surgery – whether discontinuance of representative proceedings should be ordered – Civil Procedure Act 2005, s 166 – interests of justice – whether costs of representative proceedings likely to exceed costs of separate proceedings – whether all relief can be obtained by other means – whether representative proceedings will provide an efficient and effective means of dealing with the claims – premature timing of the Motions before defences filed – significant common questions between the claims – no relevant prejudice to the defendants – applications dismissed

Legislation Cited:

Civil Liability Act 2002
Civil Liability Act 2003 (Qld)
Civil Procedure Act 2005
Competition and Consumer Act 2010 (Cth)
Federal Court of Australia Act 1976 (Cth)
Limitation Act 1969
Private Health Facilities Act 2007
Trade Practices Act 1974 (Cth)
Uniform Civil Procedure Rules 2005

Cases Cited:

Belinda Real v The Cosmetic Institute Pty Ltd and Chien Vien Duong (NSW District Court, No. 2017/00343201)
Bright v Femcare Ltd [2002] FCAFC 243; (2002) 195 ALR 574
Giles v Commonwealth of Australia [2014] NSWSC 83
GIO of NSW v Green & Lloyd (1965) 114 CLR 437
Hall v Australian Finance Direct Ltd [2005] VSC 306
Halpin & Ors v Lumley General Insurance Ltd [2009] NSWCA 372
Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230
Hughes v Fong [2016] NSWSC 1541
Johnston v Endeavour Energy [2015] NSWSC 1117
McMullin v ICI Australia Operations Pty Ltd [1997] FCA 541; (1997) 72 FCR 1
Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited [2017] FCAFC 98; (2017) 252 FCR 1
Michelle Scotford v Dr Sri Darshn and The Cosmetic Institute Pty Limited & 2 Ors (NSW District Court, No. 2018/00034498)
P Dawson Nominees Pty Ltd v Brookfield Multiplex Ltd (No 2) [2010] FCA 176
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589
Richards v Cornford (No 3) [2010] NSWCA 134
Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514
Wong v Silkfield Pty Ltd [1999] HCA 48; (1999) 199 CLR 255

Texts Cited:

Not Applicable

Category:

Procedural and other rulings

Parties:

Amy Rickhuss (P1)
Kylie Pollock (P2)
Jessica Bruen (P3)
Kirsty-Anne Rowlands (P4)
Lily Knowland (P5)
The Cosmetic Institute Pty Ltd (D1)
The Cosmetic Institute Parramatta Pty Ltd (in liq) (D2)
TCI Bondi Junction Pty Ltd (D3)
TCI Southport Pty Ltd (D4)
Dr Eddy Dona (D5)

Representation:

Counsel:
A Cheshire SC / S Maybury (P1-P5)
A Flecknoe-Brown (D1-D4)
M Windsor SC (D5)

  Solicitors:
Turner Freeman Lawyers (P)
Barry Nilsson Lawyers (D1-D4)
Meridian Lawyers (D5)

File Number(s):

2017/279308

Publication restriction:

Not Applicable

Judgment

1. On 21 March 2018, a Notice of Motion was filed by the first to fourth defendants, which may be referred to collectively as the “TCI parties”. This Motion primarily sought an order that the proceedings not continue as a representative action under Part 10 of the Civil Procedure Act 2005 (“the First Motion”). Other relief was also sought, including the striking out of a number of paragraphs in the Statement of Claim and the costs of the Motion or, in the alternative, security for costs.

2. On the same day, the fifth defendant (Dr Eddy Dona) also filed a Notice of Motion seeking similar, but not identical, orders to those sought by the TCI parties (“the Second Motion”). That Motion sought an order that the action not continue as a representative proceeding. In the alternative, Dr Dona sought that the proceedings in their entirety be dismissed or struck out. He did not seek an order for security for costs. He also sought an order for the costs of the Motion.

3. At the first hearing of these Motions, it was agreed by all of the defendants that the issues of strike out or dismissal of the proceedings, as well as security for costs, would not be pursued, as their outcome was contingent upon any success of the First and Second Motions. Accordingly, this judgment deals only with the issue of whether the proceedings should continue as a representative proceeding.

Main Proceedings

4. The representative proceeding was commenced by Statement of Claim filed on 14 September 2017.

5. The group members are defined in the Statement of Claim as being persons who underwent breast augmentation surgery at various premises associated with first to fourth defendants in NSW (Parramatta, Bondi Junction, Concord and Guildford) or Queensland (Southport).

6. The second to fourth defendants are subsidiaries of the first defendant. The second defendant, The Cosmetic Institute Parramatta Pty Ltd (in liq), entered into liquidation on or about 5 October 2016. Leave to proceed against it has been granted. 

7. The fifth defendant is a registered medical practitioner practising as a plastic and reconstructive surgeon who was a director and the beneficial shareholder of the second, third and fourth defendants, and who is and was the surgical director of the TCI parties. It is also alleged that he devised the method of breast augmentation utilised by the TCI parties, and to have trained and supervised doctors at TCI who performed these surgeries.

8. It is alleged that group members were operated on and administered anaesthesia by servants and/or agents of the first, second, third or fourth defendant. These surgeons and anaesthetists may be referred to as TCI Surgeons and TCI Anaesthetists, respectively. It is further alleged that several of the group members were operated on by TCI Surgeons trained by, or under the supervision of, the fifth defendant, in accordance with accreditation and training contracts between TCI Surgeons and the first, second, third or fourth defendants.

9. The Statement of Claim pleads that the system of breast augmentation surgery performed at the premises of the TCI facilities (TCI Parramatta Premises, TCI Bondi Premises, TCI Southport Premises, Concord Private Hospital and Holroyd Private Hospital) from 2012 had the following characteristics:

1. Inadequate infection control procedures during the surgeries;

2. Inadequate capacity to access urgent surgical or medical assistance in the event of emergencies arising during surgeries;

3. In respect of the second defendant and the third defendant’s premises, no capacity to legally administer general anaesthesia; and no licence to admit patients and provide medical, surgical or other prescribed treatment within the meaning of ss 4(1), 12(2), 33 and 41(1) of the Private Health Facilities Act 2007.

10. The Statement of Claim pleads that the plaintiffs and group members each individually:

1. accessed promotional material published by the defendants on their website or on social media sites;

2. attended at a TCI premises for one pre-surgery consultation with a TCI surgeon and/or cosmetic consultant who was the servant or agent of the TCI parties. The consultations occurred on average between one day and two months prior to each plaintiff or group member’s breast augmentation surgery and cost $150;

3. underwent breast augmentation surgery at the premises of the TCI parties; and

4. suffered a complication during surgery or post-operatively.

11. The group members are alleged to have been operated on using the so-called “One Size Fits All Approach”, a phrase coined by counsel for the plaintiffs. This approach is said to have increased the risk of 11 particularised complications of breast augmentation surgery, including haemorrhage; excessive tissue trauma; infection; scarring; and local anaesthetic toxicity, leading to cardiac arrest, pneumothorax and death.

Causes of Action

12. The claims of the group members are made both at common law in negligence, and in statutory causes of action arising from the Australian Consumer Law (“ACL”) contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (“CC Act”).

Negligence

13. It is alleged that the defendants owed the plaintiffs and group members a duty to exercise reasonable care and skill in the provision of advice about, and in the performance of, breast augmentation surgery, and that the defendants breached this duty of care by failing to exercise reasonable care and skill to avoid the foreseeable risk of complications. The defendants are said to have so breached their duties of care in 20 particularised ways.

14. As a result, it is alleged that each plaintiff and group member suffered injury, loss and damage as a result of undergoing breast augmentation surgery.

15. Further and in the alternative, the plaintiffs alleged that the defendants knew or ought to have known that the plaintiffs and group members would act in reliance on 36 particularised representations by consenting to and undergoing the surgeries. Therefore, defendants are said to have owed a duty to take reasonable care in making those representations.

Consumer Law

16. The plaintiffs also allege breaches of the ACL, and in particular, the consumer guarantee provisions in ss 60, 61(1) and 61(2) of the ACL.

17. It is pleaded that breast augmentation surgery is a “service” (of a kind ordinarily acquired for personal use) within the meaning of s 3 of the ACL, which was supplied to the plaintiffs and group members as consumers within the meaning of s 3 of the ACL. The surgeries were therefore services provided in trade or commerce within the meaning of s 4 of the CC Act and s 2 of the ACL.

18. By reason of the defendants’ system of breast augmentation surgery, the surgeries “acquired” by the plaintiffs and group members are said to have been in breach of the guarantee for the supply of services with due care and skill, and the supply of services which were reasonably fit for their purpose. Further, it is pleaded that the surgeries were not of the nature, quality, state or condition that might reasonably be expected to achieve the results advertised and sought (including enlargement of a woman’s breasts, improvement of the aesthetic appearance of a woman’s breasts, and increased self-esteem and confidence).

19. The breaches of those consumer guarantees are said to be failures, or major failures, within the meaning in s 268 of the ACL.

20. By reason of these failures, the representations made by the defendants to the plaintiffs and group members are said to be misleading representations with respect to future matters (ACL, s 4), misleading or deceptive conduct (ACL, s 18), and, further or in the alternative, false or misleading representations (ACL, s 29(1)(b), s 29(1)(m) and/or s 34).

Common Questions

21. As required by s 161(1)(c) of the Civil Procedure Act, the Statement of Claim includes a statement of the common questions of law or fact which the plaintiffs allege will arise in the course of the hearing of the group proceedings. It is unnecessary to set out in detail these common questions.

22. The Statement of Claim does not differentiate between whether the questions are of law or fact. However, most of the common questions of fact go to the relationship between the TCI Surgeons and the first to fourth defendants, whether the first defendant controlled and directed the activities and services offered to the plaintiffs and group members by the second to fourth defendants, and whether an extensive list of representations particularised in the Statement of Claim were made to the plaintiffs and group members by the TCI Surgeons or any of the defendants.

23. A further four identified common questions of fact relate to the role of the fifth defendant in designing, devising, supervising, training and accrediting the TCI Surgeons, including in their alleged use of the “One Size Fits All Approach” to the undertaking of breast augmentation surgery.

24. The common questions of law identified by the Statement of Claim relate to whether the defendants breached their common law duty to exercise due care and skill in performing breast augmentation surgery, including whether the adoption of the “One Size Fits All Approach” was negligent; whether any representations made by the defendants were misleading with respect to future matters, or misleading and deceptive, or breached a guarantee, for the purposes of the ACL; or whether the representations were negligent representations.

25. In the course of the hearing of the Motions, in light of the fact that none of the defendants have filed any defence, no additional common questions were identified. It might be reasonably anticipated that the defence will raise matters of fact and law which would be common.

Defences

26. The proceedings are presently at a preliminary stage. The defendants have not yet filed Defences. No further interlocutory steps have as yet been taken.

Legal Principles

27. I have previously addressed the legislative scheme established by the Civil Procedure Act elsewhere: see Giles v Commonwealth of Australia [2014] NSWSC 83 at [63]-[84]; Johnston v Endeavour Energy [2015] NSWSC 1117 at [62]-[83]. It will nevertheless be convenient to set out here the relevant legislative provisions and principles which apply to the determination of these Motions.

28. In this Court, representative proceedings are governed by the Civil Procedure Act, in particular Part 10, and Part 58 of the Uniform Civil Procedure Rules 2005 (“the UCPR”). Part 58 of the UCPR is not relevant to the issues being dealt with in this judgment, and can be put to one side.

29. The specific provisions of Part 10 should be read in conjunction with the overriding purpose of the Civil Procedure Act, as contained in s 56, namely, "... to facilitate the just, quick and cheap resolution of the real issues in the proceedings."

30. Sections 57, 58, 59 and 60 of that Act are also applicable and provide relevant directions to enable the achievement of the overriding purpose. As the Court (Allsop P, Campbell and Young JJA agreeing) noted in Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 at [38], both ss 56 and 57 are “statutorily compulsory” considerations. A court will err in law if it fails to take them into account: Halpin & Ors v Lumley General Insurance Ltd [2009] NSWCA 372 at [24] per Basten JA; Richards v Cornford (No 3) [2010] NSWCA 134 at [101] per Allsop P.

31. In considering the provisions contained in Part 10 of the Civil Procedure Act, it is appropriate to start with s 157, which provides for the commencement of representative proceedings. It is in the following terms:

"157 Commencement of representative proceedings

(1)   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 question of law or fact,

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

(2)    Representative proceedings may be commenced:

(a)    whether or not the relief sought:

(i) is, or includes, equitable relief, or

(ii) consists of, or includes, damages, or

(iii) includes claims for damages that would require individual assessment, or

(iv) is the same for each person represented, and

(b)    whether or not the proceedings:

(i) are concerned with separate contracts or transactions between the defendant in the proceedings and individual group members, or

(ii) involve separate acts or omissions of the defendant done or omitted to be done in relation to individual group members." (emphasis added)

32. It was not submitted that the proceedings had not been properly commenced as a representative action, nor that the provisions of s 157 had not been complied with.

33. Section 158 provides a test for standing in the following form:

"158 Standing

(1)    For the purposes of section 157(1)(a), a person has a sufficient interest to commence representative proceedings against another person on behalf of other persons if the person has standing to commence proceedings on the person's own behalf against that other person.

(2)    The person may commence representative proceedings on behalf of other persons against more than one defendant irrespective of whether or not the person and each of those persons have a claim against every defendant in the proceedings.

(3)    If a person has commenced representative proceedings, that person retains standing:

(a) to continue the proceedings, and

(b) to bring an appeal from a judgment in the proceedings,

even though the person ceases to have a claim against any defendant."

34. As I observed in Giles at [68], s 158(2) does not require the plaintiff or the group members in representative proceedings to have a claim against every defendant who or which is joined. This is a different position to that with respect to representative proceedings brought pursuant to the provisions of Part IVA of the Federal Court of Australia Act 1976 (Cth), and in particular, s 33D.

35. The defendants did not submit that the five plaintiffs did not have standing to bring the proceedings.

36. Representative proceedings are commenced by the filing of an originating process. Section 161 provides that the originating process must describe or otherwise identify the group members to whom the proceedings relate; specify the nature of the claims made by the group members and the relief claimed; and specify the questions of law or fact common to the claims of the group members. In describing or identifying the group members, it is not necessary to name, or particularise the number of, the group members: s 161(2).

37. Section 166 is of particular importance in this case. This section provides that a court may order that the proceedings commenced before it as representative proceedings no longer continue to be conducted in that manner in certain circumstances. It is in the following form:

"166   Court may order discontinuance of proceedings in certain circumstances

(1)   The Court may, on application by the defendant or of its own motion, order that proceedings no longer continue under this Part if it is satisfied that it is in the interests of justice to do so because:

(a) the costs that would be incurred if the proceedings were to continue as representative proceedings are likely to exceed the costs that would be incurred if each group member conducted a separate proceeding, or

(b) all the relief sought can be obtained by means of proceedings other than representative proceedings under this Part, or

(c) the representative proceedings will not provide an efficient and effective means of dealing with the claims of group members, or

(d) a representative party is not able to adequately represent the interests of the group members, or

(e) it is otherwise inappropriate that the claims be pursued by means of representative proceedings.

(2)   It is not, for the purposes of subsection (1) (e), inappropriate for claims to be pursued by means of representative proceedings merely because the persons identified as group members in relation to the proceedings:

(a) do not include all persons on whose behalf those proceedings might have been brought, or

(b) are aggregated together for a particular purpose such as a litigation funding arrangement.

(3)   If the Court dismisses an application under this section, the Court may order that no further application under this section be made by the defendant except with the leave of the Court.

(4)    Leave for the purposes of subsection (3) may be granted subject to such conditions as to costs as the Court considers just."

38. This provision is similar, but not identical, to s 33N of the Federal Court of Australia Act.

39. Where not all of the questions that have been nominated as common questions will finally determine the claims of all group members, the Court has a broad power to give directions with respect to the determination of the remaining questions. Section 168 deals with that issue in this way:

"168 Determination of questions where not all common

(1)   If it appears to the Court that determination of the question or questions common to all group members will not finally determine the claims of all group members, the Court may give directions in relation to the determination of the remaining questions.

(2)    In the case of questions common to the claims of some only of the group members, the directions given by the Court may include directions establishing a sub-group consisting of those group members and appointing a person to be the sub-group representative party on behalf of the sub-group members."

40. As s 169 of the Civil Procedure Act makes clear, an individual group member may appear in proceedings for the purpose of determining a question that relates only to the claims of that group member.

41. The Court also has broad power to grant relief in representative proceedings. Section 177, which provides for the powers of the Court, is in the following form:

"177 Judgment — powers of the Court

(1)    The Court may, in determining a matter in representative proceedings, do any one or more of the following:

(a) determine a question of law,

(b) determine a question of fact,

(c) make a declaration of liability,

(d) grant any equitable relief,

(e) make an award of damages for group members, sub-group members or individual group members, being damages consisting of specified amounts or amounts worked out in such manner as the Court specifies,

(f) award damages in an aggregate amount without specifying amounts awarded in respect of individual group members.

(2)    In making an order for an award of damages, the Court must make provision for the payment or distribution of the money to the group members entitled.

(3)    Subject to section 173, the Court is not to make an award of damages under subsection (1)(f) unless a reasonably accurate assessment can be made of the total amount to which group members will be entitled under the judgment.

(4)    If the Court has made an award of damages, the Court may give such directions (if any) as it thinks just in relation to:

(a) the manner in which a group member is to establish the member's entitlement to share in the damages, and

(b) the manner in which any dispute regarding the entitlement of a group member to share in the damages is to be determined."

42. It may be noted that, pursuant to s 179, any judgment given in representative proceedings may be limited so as to bind only certain members of the group.

43. Section 182 deals with the suspension of limitation periods, and overrides the provisions in the Limitation Act 1969.

44. Finally, in representative proceedings the Court has a general power to make any orders that it considers appropriate or necessary to ensure that justice is done, of its own motion or on the application of any party or group member: Civil Procedure Act, s 183.

Defendants’ Submissions

First to fourth defendants

45. The TCI parties submitted that, in the interests of justice, an order should be made pursuant to s 166 that the proceedings cease to be a representative proceeding.

46. First, the TCI parties took issue with the form of pleading adopted by the plaintiffs. It was submitted that the notion of the “One Size Fits All Approach” was an artificial construct created by the plaintiffs to convey uniformity and commonality despite the separate and distinct circumstances of each individual’s case. On this submission, the TCI parties contended that this “exotic rolled-up” and “convoluted” pleading would lead to unnecessary and excessive costs that would not be incurred in individual proceedings.

47. To that end, it was noted that at least two potential group members had commenced individual District Court proceedings: Belinda Real v The Cosmetic Institute Pty Ltd and Chien Vien Duong (NSW District Court, No. 2017/00343201) and Michelle Scotford v Dr Sri Darshn and The Cosmetic Institute Pty Limited & 2 Ors (NSW District Court, No. 2018/00034498). Those proceedings were submitted to be illustrative of a more “straight‑forward”, “cost-effective” approach, and it was suggested that the bringing of those actions demonstrated that costs were apparently not a barrier to individual actions.

48. The second related submission was that the costs of the matter continuing as a representative proceeding would likely exceed the costs of the proceedings being brought as individual actions.

49. Counsel for the TCI parties contended that in this case it would not be appropriate or possible for a single expert report to be prepared which would determine loss and damage, as well as causation, with reference to facts common to every group member. The TCI parties accepted that if this were such a case, there would be greater efficiency in conducting the proceedings as a representative proceeding. However, it was submitted that the core issues for determination would turn upon the conduct of individual surgeons and anaesthetists in their treatment of individual patients. It followed that evidence, including expert evidence, would need to be addressed to individual cases, and that therefore a representative proceeding would not be an appropriate vehicle for the resolution of the claims.

50. Thirdly, it was submitted that no greater relief was able to be obtained by the plaintiffs and group members by virtue of the proceedings continuing as a representative proceeding. This submission was underpinned by noting that the caps on damages established in Part 2 of the Civil Liability Act would still apply to the claims brought under personal injury for professional negligence, and the claims in common law negligence and misrepresentation, as well as the statutory claims brought pursuant to ss 60, 61 and 267 of the ACL. It was submitted that each claim would be captured within the definition of a claim for “personal injury damages” found in s 11 of the Civil Liability Act, which caps damages arising out of claims in both tort and contract: s 11A(2).

51. It was submitted that the claims made in the Statement of Claim under ss 18, 29 and 34 of the ACL were “hopeless”, being subject to prohibitions on the recovery of sums for personal injury loss and damages: ss 137C and 137E in the CC Act.

52. Fourthly, the TCI parties pointed to prejudice as a reason why it would be inappropriate for the proceedings to continue as a representative proceeding. The prejudice alleged was the absence of claims made against surgeons or anaesthetists responsible for the surgical care and provision of anaesthetic services in the care of each plaintiff and each group member. It was submitted that an inference could be drawn that the plaintiffs, in not joining these medical practitioners as defendants, were attempting to minimise the variations in their cases.

53. In turn, it was submitted that the defendants were prejudiced and subjected to a “real forensic difficulty” by virtue of the complexity of making claims for indemnity against individual practitioners in some cases, but not others. It was also submitted that there were likely to be difficulties in obtaining evidence from medical practitioners in each case, when the interests of those practitioners may conflict with the interests of TCI would lead to a likelihood of substantial prejudice to the TCI parties without justification.

54. Fifthly, the TCI parties submitted that if the Court were not to make an order under s 166, the costs of these Motions should be the defendants’ costs in the cause. This submission was predicated upon what was labelled the “inadequate particularisation” in the Statement of Claim, and the fact that some of the pleadings were embarrassing and failed to disclose reasonable causes of action (particularly in respect of the identified futile statutory claims for relief).

55. Sixthly, it was contended that the early timing of the application to discontinue the proceedings as a representative proceeding was not premature, but was appropriate and efficient because reasons in support of that application would flow into reasons in support of striking out aspects of the Statement of Claim before the Defences were filed.

Fifth defendant

56. The fifth defendant, in submitting that an order under s 166 should be made in the interests of justice, took fundamentally the same approach as that of the TCI parties. Counsel for the fifth defendant similarly argued that it was not self-evident that costs would be saved by the proceedings being brought as a representative proceeding, and submitted that the First and Second Motions were not premature as the defendants were taking a “prophylactic or taking a proactive response” to their defence.

57. The fifth defendant also took issue with the use of the phrase “One Size Fits All” in the pleadings. In oral submissions, counsel argued that this notion was “a smoke screen on the part of the plaintiffs which hides the essence of the claims which each of the plaintiffs has.” He pointed to the fact that there had been no explanation from the solicitor for the plaintiffs as to why the medical practitioners who performed the surgeries, or the anaesthetists who were in attendance at the surgeries, had not been joined in these proceedings. This submission seemed to suggest that in so doing, the plaintiffs were attempting to obscure the variation in the claims.

58. The fifth defendant also put forward a number of other submissions. He submitted that the threshold requirements of s 157(1) for commencing a representative proceeding, which are conjunctive, had not been satisfied. The first threshold requirement which he submitted had not been met was the number of group members, as only five, rather than the minimum seven, had been identified. It was submitted that the affidavit of the solicitor for the plaintiffs, Ms Gleeson (which noted that the TCI parties perform more than 5,000 cosmetic procedures a year) could not satisfy the Court that any other woman has agreed to participate in representative proceedings as a group member.

59. It was also submitted that, contrary to the terms of s 157(1), it was not clear that all the group members have claims against the same person; or that all claims are in respect of, or arise out of the same, similar or related circumstances; or that the claims all give rise to a substantial common question of fact or law.

60. Counsel for the fifth defendant recognised that the phrase “arise out of”, which is in s 157(1)(b), accommodates a broad and indirect connection between two subject matters, and also that “in respect of” does not necessarily connote a sense of consequence: GIO of NSW v Green & Lloyd (1965) 114 CLR 437 at 445, 447; Hughes v Fong [2016] NSWSC 1541 at [33]. However, it was submitted that the claims of all group members could not be seen to even meet these broad definitions, in light of the variety of different premises where the plaintiffs and group members underwent surgery, the different surgeons and anaesthetists involved in each plaintiff’s surgery, the different surgical complications alleged by the plaintiffs, the different states where the plaintiffs reside, the different sizes of the implants to be implanted, and the different representations made to each plaintiff.

61. It is convenient to summarise some related submissions made by the fifth defendant on the implications of these differences in the cases of the group members as follows:

1. The place of the alleged tort in the fifth plaintiff’s case was Queensland, rather than New South Wales. Accordingly, the applicable substantive law to that plaintiff’s negligence claim would be the Civil Liability Act 2003 (Qld), while the applicable law in relation to the other plaintiffs’ claims would be the Civil Liability Act 2002 (NSW).

2. In relation to the pleaded common question 4, the issue of whether each surgery was performed negligently by the TCI Surgeons would necessarily require investigation of the circumstances of each individual surgery. This would have the natural result that questions of breach and causation will differ in relation to each plaintiff or group member. While it was accepted that a number of medical negligence class actions have been brought in Australia by plaintiffs who had been treated or operated on by various medical practitioners, it was submitted that those cases related to specific medical devices inserted (such as a pacemaker or surgical mesh), rather than the surgical or anaesthetic procedure used in the particular procedures.

3. Similarly, on the issue of representations made to each of the plaintiffs, it was said that whether these were misleading or not would turn on each individual representation, and require separate evaluation in each individual case.

4. In relation to the fifth defendant’s role in the litigation specifically, it was further submitted that the Statement of Claim was defective in asserting that the fifth defendant owed the plaintiffs a duty of care without pleading the content of this alleged duty. It was noted that the fifth defendant did not conduct any of the plaintiffs’ TCI consultations or surgeries.

62. An additional submission was made in relation to limitation periods. The fifth defendant observed that at least two of the lead plaintiffs, Kylie Pollock (the second plaintiff) and Jessica Bruen (the third plaintiff) had commenced proceedings out of time in respect of the negligence aspect of the claim, and may therefore not have a maintainable claim against any of the defendants under that cause of action.

Plaintiffs’ Submissions

63. The five plaintiffs, who were the respondents on these Motions, noted that the Court’s power to make an order under s 166 of the Civil Procedure Act is broad and discretionary.

64. The essence of the plaintiffs’ submission was that the timing of the Motions was premature. They pointed to the fact that at this early stage of the proceedings, no Defences have been filed, and no discovery or other interlocutory processes have occurred. It was submitted that, as evidence emerges, there may be significant impacts on the scope of the dispute, and that in light of the preliminary stage of the proceedings, the Court should exercise its discretion to make an order under s 166 with particular caution. The plaintiffs noted that such an order could have important consequences beyond procedural matters, including on substantive issues such as the suspension of the running of any limitation period pursuant to s 182 of the Civil Procedure Act.

65. The plaintiffs then addressed each of the five subsections in s 166(1) in order to submit that the Court would not be satisfied that it was in the interests of justice for the proceedings not to continue as a representative proceeding.

66. First, it was submitted that it was difficult at this early stage to assess whether the costs of the representative proceeding were likely to exceed those if the matters were brought as individual proceedings. However, it was contended that it was clear that the class is potentially large, and accordingly that savings if the proceedings continued as a representative action would be “self‑evident”. As noted above, that contention was rejected by the TCI parties and the fifth defendant.

67. Secondly, the plaintiffs accepted that the relief sought by the plaintiffs and group members by way of damages for various causes of action could be obtained through individual actions. However, it was submitted that it may be a different question whether as a matter of practicality each group member would have the means and inclination to personally commence proceedings. The plaintiffs pointed to practical benefits for the group members of the matter continuing as a representative action, including that it might be expected that individual group members would be passive during resolution of the common issues.

68. Thirdly, the plaintiffs contended that even without the scope of the dispute being identified, it was possible to discern efficiencies in the proceedings continuing as representative proceedings, including lessening the burden on the Court’s resources, because the Court would not have to case manage and resolve multiple proceedings.

69. Fourthly, it was not accepted that the fact that the group members may have other claims against surgeons or anaesthetists which were not included in the proceedings necessarily meant that the representative action would not adequately address the interests of all of the possible group members.

70. Fifthly, the plaintiffs submitted that it would not be “otherwise inappropriate” for the representative proceedings to continue. The TCI parties had raised the risk of double compensation in relation to the two individuals who had brought their own actions in the District Court. It was submitted that this risk was at this stage ultimately a theoretical problem that could be appropriately managed by means of group members opting out, staying any proceedings on the basis of res judicata or Anshun estoppel (see Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 at [37]), and other procedural steps.

71. Finally, in response to the fifth defendant’s submissions on the effect of limitation periods apparently barring two of the plaintiff’s claims, counsel for the plaintiffs did not agree that the defendants would be precluded from bringing a limitations defence for those two plaintiffs, or else one or more group members, if the proceedings continued as a representative proceeding. It was submitted that as the expiration of the limitation period would not be a common question, it would still be open to the defendants to, at a time after the determination of the common questions, raise any issues of limitation alongside other issues related to the individual claims, such as causation.

72. It was accepted that this necessarily meant that the current representative proceeding would at a certain point in time turn into what was, in effect, individual proceedings which fell for determination on their individual facts and circumstances. But this, it was said, was the usual course for claims relating to tortiously caused damages, rather than an exceptional course.

Discernment

73. The first and principal matter which falls for consideration is whether there is a sufficiently significant number of common issues of fact or law as would justify the claim continuing as a representative action.

74. In my view, it is clear that there are a number of important common questions arising from the claims of the plaintiffs and group members. These may be broadly categorised into several overarching issues. First, the question of the nature of the relationship between the TCI parties, and between the TCI parties and the fifth defendant, Dr Dona, is plainly a common issue. This question will necessitate the examination of Dr Dona’s director and shareholder status of the various TCI parties, his role in devising the surgical methods used and the training of the TCI Surgeons in that method, and the authorisation of accreditation of those doctors.

75. The second (related) common issue is the question of the extent of training and accreditation of TCI Surgeons, including whether this training had the effect of requiring the Surgeons to conduct the plaintiffs’ and group members’ surgeries in a particular way (the so-called “One Size Fits All Approach”). This issue will likely involve the examination of considerable evidentiary material pertaining to training policies, contracts, the provision of facilities and equipment, the maintenance and repair of equipment and facilities, and the provision of drugs and other materials. The extent to which TCI used a “template” approach to breast augmentation surgeries is, at this early stage, not yet clear. However, this issue may yet be developed through interlocutory processes, including obtaining any training records and materials provided to the TCI Surgeons and Anaesthetists.

73. The third common issue will be the extent of training and accreditation of anaesthetists, including whether this training had the effect of requiring anaesthetists to only use local anaesthetic and twilight sedation in all cases, rather than general anaesthetic. The particulars of this aspect of the Statement of Claim were to be provided after discovery had occurred.

74. The fourth and fifth examples of common questions are related to breaches of the ACL – namely, whether any promotional material published by the defendants in respect of their breast augmentation surgery services could be said to have conveyed representations which were misleading or deceptive to the plaintiffs or group members, and whether the services provided by the defendants, such as the brief pre-surgery consultations, could be said to be fit for purpose.

75. In my view, all of these questions shares a factual or legal matrix, and are relevant to the claims of the plaintiffs and group members.

76. It is then necessary to turn to the terms of s 166(1) of the Civil Procedure Act in order to consider whether the interests of justice favour the proceedings remaining as a representative action.

77. As a preliminary matter, it should be noted that, speaking generally, courts are reticent to grant applications seeking that the proceedings not continue as a representative action when confronted with an application of this nature at a time before Defences have been filed.

78. The plaintiffs drew attention to the decision of the Full Court of the Federal Court of Australia in Bright v Femcare Ltd [2002] FCAFC 243; (2002) 195 ALR 574, which they submitted was instructive on the approach to be taken by this Court to an application such as the defendants were making. Bright was a decision dealing with the provisions of the Federal Court of Australia Act, and particularly s 33N, which, as noted above, is sufficiently similar to s 166 to be applicable in this application. At [149], Kiefel J (as her Honour then was) said:

"In my view the motion brought by the first respondent was premature, in the sense that it required a view of the evidence which is likely only to be gained after a hearing, or at least a hearing on those issues. If the trial Judge considers that the findings to be made have application to the other claims, appropriate determinations and orders can be made. The question whether to make an order of discontinuance under s 33N(1)(c) could be revisited at that point. If the findings are not useful in that way, and the applicant fails to establish the relevant risk and cause, such an order could be made at an earlier point and before other orders in the proceedings."

82. Lindgren J in Bright warned against the premature determination of issues under s 33N of the Federal Court of Australia Act. At [18], his Honour said:

"[18] The applications under s 33N were made at a procedurally early stage. Defences have not yet been filed. In substance, the applicant commenced a representative proceeding which ex hypothesi, the legislature intended she be entitled to commence because of the presence of substantial common issues of law and fact, yet the Court was immediately asked to accept that the proceeding would not provide an efficient and effective means of dealing with the claim of the Group Members. I do not mean to suggest that an application under s 33N at such an early stage of a properly commenced representative proceeding would always be premature: if there were an incompatibility or conflict between the representative party's case and the cases of the represented parties (cf Tropical Shine Holdings Pty Ltd(t/a KC Country)vLake Gesture Pty Ltd (1993) 45 FCR 457 at 464) or if the only substantial common issue were one of law on which a decision in the case of one group member would bind the others, it may be thought not efficient or effective for the representative proceeding to continue. But ordinarily one would expect that, in an attempt to give effect to the legislative intention, a means will be sought, by case management techniques, to enable a representative proceeding to continue to the stage of resolution of the substantial common issues on the basis that after that stage is completed, an order under s 33N or directions under s 33Q will be made …."

83. In considering the discretionary issue posed for determination, Lindgren J went on to say at [21]:

"21.   This is not to say that the respondents' submission is not important for case management purposes. It is unjust that a respondent be vexed with a representative proceeding over a long period during which the unmeritorious nature of the claims remains hidden because it resides in non-common issues. But in my opinion, the present representative proceeding can be managed in such a way that the common issues can be determined so that the determination binds the applicant and Group Members (cf ss 33Z and 33ZB of the Act), and contemporaneously a selected number of the individual claims can be finally determined, that is, on their non-common issues as well (see ss 33Q and 33ZF)."

84. Kiefel J also said at [128]:

“…The enquiry required… is not whether the continuance of the representative proceeding can be seen to be efficient, but whether the Court is satisfied that it is in the interests of justice to order its discontinuance as a proceeding ... "

85. Finkelstein J, the third member of the Bench in Bright, considered that in determining whether the interests of justice favoured the making of an order under s 33N, it was appropriate that the broad public interest and the interests of the administration of justice be weighed in the balance, both of which, he held, favoured class actions.

86. Further, in Wong v Silkfield Pty Ltd [1999] HCA 48; (1999) 199 CLR 255 at [26], the High Court remarked that Foster J’s observations in the Full Court of the Federal Court of Australia, to the effect that it was too early to make an order under s 33N, were “plainly correct”. The Court noted that it would be more likely that the question of making such an order would arise at a stage where the issues had been clarified.

87. In light of those authorities, I place significant weight on the early stage of proceedings, particularly the absence of any defences being filed, in considering whether to exercise the discretion required by the terms of s 166(1).

88. The question of the likelihood of costs being greater if the matter continues as a representative action, per s 166(1)(a), is difficult to resolve at this very early stage. It is not necessarily “self-evident” that costs will be saved, contrary to the submissions of the plaintiffs. However, it follows from my view that there are substantial common issues that it is likely that costs will be saved if the matter proceeds as a representative proceeding.

89. Additionally, it is important to consider whether the relief sought by the plaintiffs and group members could be obtained by means other than representative proceedings: see s 166(1)(b). The plaintiffs accepted that the relief sought by way of damages could undoubtedly be obtained through commencing individual actions. This is also clear from the two extant District Court proceedings commenced against the TCI parties. However, I accept that as a matter of practicality, it is a different question whether each plaintiff and other group members would have the means and inclination to personally commence proceedings.

90. Representative proceedings are intended to enable the group members to be essentially passive participants. Instead, those members participate chiefly for the limited purpose of reaping the benefit or suffering the burden of the findings made on the common questions: P Dawson Nominees Pty Ltd v Brookfield Multiplex Ltd (No 2) [2010] FCA 176 at [16] (Finkelstein J); Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited [2017] FCAFC 98; (2017) 252 FCR 1 at [73].

91. In short, I do not consider the availability of other relief which may or may not be taken up by individual patients who are group members to be a factor which would support the making of an order under s 166.

92. Another principal issue is whether the representative proceedings will not provide an efficient and effective means of dealing with the plaintiffs’ and group members’ claims: see s 166(1)(c). The defendants submitted that dissimilarities in the plaintiffs’ claims (such as in the relevant statute to be applied between the NSW and Queensland plaintiffs, the application of any limitation periods, and questions of differing representations made to a plaintiff or a group member) would render a representative proceeding impractical and overly complex.

93. There will almost always exists a tension in consumer class actions between the notion of enabling consumers to combine together to bring a representative action, and the unavoidable and inherent variation in the experiences of those consumers with their acquisition or use of the same product or the same or similar service. It is apparent that consumers with a grievance arising from a product or a service might have experienced a variety of negative consequences from their use of that product or service. It is also clear that it is likely that consumers who purchased, acquired or used that product or service might have done so in different places and at different times. That is no reason to stultify the bringing of those claims by way of a representative proceeding where there are significant common issues to be resolved. Any difficulty of this kind can be the subject of appropriate case management orders.

94. One illustrative case is McMullin v ICI Australia Operations Pty Ltd [1997] FCA 541; (1997) 72 FCR 1, a representative action brought in negligence and misleading and deceptive conduct under the now repealed Trade Practices Act 1974 (Cth). Those claims arose out of the chemical contamination of cotton trash with Helix. This trash had been fed to beef cattle. Wilcox J noted that the claimants (applicants and group members, of whom there were 470) fell into approximately seven categories, including graziers whose cattle became contaminated during their ownership, those who purchased already-contaminated cattle, meat processors and exporters who owned meat that was found to be contaminated, cotton trash transporters and others who lost business once the contamination was discovered, and so on. The first three respondents were related companies, all affiliated with ICI Australia. The range of group members, and their differing interests, was not a barrier to the proceedings continuing through all issues of liability and for some parts of the determination of the issues of damages, as a class action under the Federal Court of Australia Act.

95. It seems clear to me that while there may be considerable variation in the claims against the TCI parties and the fifth defendant, requiring the individual assessment of issues such as limitation periods, causation and the assessment of damages, those differences are, on balance, outweighed by factors pointing to a representative proceeding as being a more effective means of dealing with the claims.

96. There was a somewhat faint submission in the terms of s 166(1)(d) that two of the plaintiffs were not able to adequately represent the interests of the group members because they were said to be out of time to pursue their respective claims for personal injury.

97. Even if that proposition is accepted, those plaintiffs will be barred by limitation periods only in relation to their negligence claims, and not in relation to their claims under the ACL. There is also no reason why the defendants cannot plead a limitation defence relating individually to those plaintiffs, and more generally with respect to any group members in the same position, when the time comes to file their Defences.

98. In Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 533, a majority of the High Court (Mason CJ, Dawson, Gaudron and McHugh JJ), made the following observation in respect of the issue of limitation periods being raised at an interlocutory stage:

“We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.”

99. Those remarks appear apposite in this context, where it could not be said that a “confident answer” could be given to the question of limitation periods at this stage.

100. I also do not consider that it is “otherwise inappropriate” for the matter to continue as representative proceedings: see the terms of s 166(1)(e). Various submissions were made by counsel for the defendants to the effect of this provision, including that in light of the complexity of the corporate arrangements between the TCI parties and the fifth defendant it would be inappropriate that the matter continue as a representative proceeding. However, for the reasons discussed above, I consider it to be desirable that those factual issues as to the nature of the relationships between the parties be resolved in a single judgment and thus in a coherent manner, rather than the potential arising for conflicting judgments on common issues if the matters are dealt with separately. That factor, in my assessment, points to it being more appropriate for the proceedings to continue as a representative proceeding.

101. That is particularly so when the dictates of ss 56 – 58 of the Civil Procedure Act are borne in mind, including the importance of making efficient use of available judicial and administrative resources.

102. I now turn to the TCI parties’ submission that the defendants will be prejudiced by the fact that individual TCI Surgeons and Anaesthetists have not been joined in the proceedings. This was submitted to be another reason why it was inappropriate that the action continue as a representative proceeding.

103. It is trite that it is open to the plaintiffs to sue the TCI parties, and that a court cannot compel the plaintiffs to sue one or more of the individual practitioners (unless an order is made pursuant to r 6.24 of the UCPR). The selection of parties to proceedings is a matter for the forensic choice of the plaintiffs. Put differently, the shape of the proceedings is determined, at least initially, by the plaintiffs who decide who is to be sued. If the party sued seeks to involve any other possibly implicated person, then it is a matter for that party, if proper grounds exist, to join that further party.

104. The Court also has no power to compel any of the TCI Surgeons or Anaesthetists to give a statement to any of the TCI parties, or otherwise assist them in any way. The Court’s only power in that respect is to issue a subpoena to oblige an individual practitioner to attend court and give evidence. If those practitioners are not contractually obligated to assist the defendants, the defendants are in no different position with respect to obtaining their assistance whether the action is brought as an individual action or as a representative proceeding. It follows that I am ultimately unable to accept that the defendants are likely to be prejudiced by the proceedings continuing as a representative action.

105. The supposed risk of double recovery in respect of the plaintiffs who have commenced separate actions was also not one which would render a representative proceeding as inappropriate. This risk can be suitably managed at a later stage by opt out requirements, or by staying any proceedings on the basis of res judicata or Anshun estoppel. That was, in my view, an unconvincing submission by the TCI parties and the fifth defendant.

106. Ultimately, I am wholly unpersuaded that it would be in the interests of justice for an order to be made that this proceeding not be permitted to continue as a representative action before the resolution of any of the substantial common issues. The Motions filed by the respective defendants are premature, and ought to be dismissed.

107. The plaintiffs accept that the failure of the defendants’ applications at this time does not preclude any later application being made, in light of any change in circumstances, for the matter to be discontinued as a representative proceeding.

Costs

108. I do not accept the submission of the TCI parties and the fifth defendant that the costs of the unsuccessful Motions should be borne by the plaintiffs because of “inadequate particularisation” in the Statement of Claim, and the fact that some of the pleadings were said to fail to disclose reasonable causes of action.

109. In my view, those contentions are not properly related to the issues raised on these Motions, and instead are substantive attacks on the merits of the causes of action relied upon by the plaintiffs.

110. I therefore see no reason why costs should not follow the event.

Orders

111. Accordingly, I make the following orders:

1. Notice of Motion filed by the first to fourth defendants dated 21 March 2018 is dismissed. The first to fourth defendants are to pay the plaintiffs’ costs of that Motion.

2. Notice of Motion filed by the fifth defendant dated 21 March 2018 is also dismissed. The fifth defendant is to pay the plaintiffs’ costs of that Motion.

3. Proceedings listed for further directions at 9.30am on 14 December 2018.

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Amendments

04 December 2018 - [6] - typographical error. Removal of the word 'not' from second last sentence. Removal of last sentence.

Decision last updated: 04 December 2018