Ryan v Great Lakes Council

[1997] FCA 970

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - Representative proceedings  - Proceedings against numerous respondents - Personal claim by representative party against only two respondents - Whether proceeding competently commenced against other respondents.

Federal Court of Australia Act 1976, ss 33C, 33D, 33Q and 33R

GRANT RYAN v GREAT LAKES COUNCIL, GRAHAM BARCLAY OYSTERS PTY LTD, CLIFT OYSTERS PTY LTD,  M S VERDICH & SONS PTY LTD, CHEVY BAY PTY LTD,  JARPAY PTY LTD, C & L COOMBES PTY LTD,       M W & E A SCIACCA PTY LTD, TADEVEN PTY LTD, R A KING (WHOLESALE) PTY LTD, MANETTAS LIMITED and AUSSIE OYSTER DISTRIBUTORS PTY LTD

NG183 OF 1997

JUDGE:        WILCOX J

DATE:          18 SEPTEMBER 1997

PLACE:        SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG183 of 1997

BETWEEN:

GRANT RYAN
APPLICANT

AND:

GREAT LAKES COUNCIL
FIRST RESPONDENT

GRAHAM BARCLAY OYSTERS PTY LTD
SECOND RESPONDENT

CLIFT OYSTERS PTY LTD
THIRD RESPONDENT

M S VERDICH & SONS PTY LTD
FOURTH RESPONDENT

CHEVY BAY PTY LTD
FIFTH RESPONDENT

JARPAY PTY LTD
SIXTH RESPONDENT

C & L COOMBES PTY LTD
SEVENTH RESPONDENT

M W & E A SCIACCA PTY LTD
EIGHT RESPONDENT

TADEVEN PTY LTD
NINTH RESPONDENT

R A KING (WHOLESALE) PTY LTD
ELEVENTH RESPONDENT

MANETTAS LIMITED
THIRTEENTH RESPONDENT

AND

AUSSIE OYSTER DISTRIBUTORS PTY LTD
FOURTEENTH RESPONDENT

JUDGE:	WILCOX J
DATE:	18 SEPTEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

WILCOX J: This is a representative proceeding instituted pursuant to Part IVA of the Federal Court of Australia Act 1976. The applicant, Grant Ryan, sues on behalf of himself and all other persons who allegedly suffered injury between certain dates as a result of eating oysters, from the Wallis Lakes region on the north coast of New South Wales, contaminated with the Hepatitis A virus. The respondents are the Great Lakes Council, which is said to have certain responsibilities in regard to the water quality of the lake, oyster farmers who allegedly grew the affected oysters, and some oyster distributors.

Most of the respondents filed Notices of Motion seeking to have the proceeding dismissed as against them, or alternatively reconstituted in various ways.  I heard these motions together on 19 August 1997.   At the close of argument, I expressed my view that the motions raised valid objections to the form of the proceeding, as presently constituted; but I refrained from making any consequential orders.  Instead, I stood the motions over until 8 October 1997.  My purpose was to give the applicant an opportunity to consider whether he wished to propose amendments that might overcome the problems that had been exposed during the hearing.  As I had discussed the matter with counsel during argument, at the time I did not record my reasons for agreeing with the substance of the various motions.  However, I have since decided to do so.  The applicant may wish to test my views on appeal.  Also, similar issues have been raised in other representative proceedings, so there may be some general utility in articulating my reasons.

The pleadings

The detail of the claims made by the applicant against the various respondents is not presently important. It suffices to say the oyster farmers and oyster distributors are alleged to have breached various common law duties of care, the misleading and deceptive conduct provisions of the Commonwealth Trade Practices Act and/or the relevant State Fair Trading Act, and to fall within the product liability provisions of the Trade Practices Act.  The council is alleged to have breached various common law duties of care, mainly in relation to safeguarding water quality in the Wallis Lakes region, and also to have aided and abetted the farmers’ and distributors’ contraventions of the product liability provisions of the Trade Practices Act. 

The present motions are not concerned with the substance of the claims.  They raise two questions which depend on the construction of Part IVA of the Federal Court of Australia Act.  First, what is the significance of the fact that the applicant’s personal claims concern only two of the twelve surviving respondents?   Secondly, is a representative proceeding properly commenced against a particular person if it does not yet appear that seven or more persons have claims against that person?

As to the first question, the applicant concedes he, personally, has a claim only against the first and second respondents (the council, and Graham Barclay Oysters Pty Ltd, an oyster farmer, respectively).  On the second question, all members of the group are said to have a claim against the council.  The only evidence before me as to the number of currently-known group members having claims against the remaining respondents is a document prepared by the applicant’s solicitors and handed up in court, without objection.  It is in the form of a table, showing that, as against the sixth respondent, there is at present no known claimant;  as against each of the fourth, fifth, seventh and fourteenth respondents, there are less than seven claimants.  Seven or more persons are said to have claims against the second, third, eighth, ninth, eleventh and thirteenth respondents.  The proceeding has been discontinued against the tenth and twelfth respondents.

The first question

Prior to the 19 August hearing, I had the benefit of considering some written submissions prepared by Mr A Sullivan QC, for the seventh and fourteenth respondents, and Mr N G Rein, for the fifth and sixth respondents. The other respondents adopted those submissions, for present purposes. The first argument put in the written submissions focuses on s 33C(1) of the Act. Section 33C(1) reads:

“(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 issue of      law or fact;

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

The construction of s 33C(1) which the respondents advance is that the closing clause of the subsection is limited by the words of para (a). They say the only proceeding the section allows to be commenced is against the person referred to in para (a) as “the same person”. It is not correct, they argue, to treat para (a) as a threshold to a more wide-ranging right, so that once seven or more persons have relevant claims against “the same person” a proceeding can be commenced by any one of them, not only against that person, but also against any other person in respect of whom any group member asserts a claim, subject only to the claims all satisfying paras (b) and (c).

Mr J Beach, for the applicant, also provided written submissions. He answered the respondents by emphasising that s 33C is concerned with the commencement of a representative proceeding. Once there are seven or more persons having relevant claims against a particular person, he argued, a representative proceeding is properly commenced. The requirements of s 33C have no further operation, and do not prevent the proceeding also including what he called “associated claims”, meaning claims by the original group’s members, and/or other persons, against respondents other than the original respondent and in respect of whom the criteria in s 33C may not be satisfied.

In support of this construction, Mr Beach referred to the obvious intendment of the Part IVA procedure, of allowing groups of related claims to be determined, so far as possible, in one proceeding. It would be consistent with this objective, he said, to allow a properly commenced representative proceeding to include other, substantially similar, claims that were not within the original group of claims and could not found a separate representative proceeding. The administrative complications that might flow from the amalgamation of claims were foreseen, he said, and accommodated by s 33Q (the Court’s power to establish subgroups) and s 33R (the power to hear individual claims within the larger proceeding).

Mr Beach resisted my suggestion, during the course of argument, that s 33D(1) was relevant to the issue under debate. Section 33D, he said, was concerned to prevent a properly-commenced representative proceeding from failing because the representative party’s personal claim failed or was resolved. Section 33D reads:

“(1) A person referred to in paragraph 33C(1)(a) 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 other person on behalf of other persons referred to in that paragraph.

(2)Where a person has commenced a representative proceeding, the person retains a sufficient interest:

(a)       to continue that proceeding;  and

(b)       to bring an appeal from a judgment in that proceeding;

even though the person ceases to have a claim against the respondent.”

In my opinion, s 33D is relevant to s 33C; it goes further than Mr Beach was prepared to concede. Section 33D is concerned with standing, and it addresses two issues of standing, not one issue twice over. Mr Beach is correct in saying subs (2) is concerned to maintain the representative party’s standing beyond any cessation of his or her own claim; but the subsection assumes the representative party had a claim against the relevant respondent in the first place. The verb “ceases” is significant. One cannot cease to have something one never had. 

Subsection (1) of 33D may have been inserted out of an abundance of legislative caution. The standing it confers may be implicit in the closing words of s 33C(1) anyway; nonetheless, in confirming that standing, s 33D(1) also limits it. The subsection takes one of the seven or more claimants referred to in s 33C(1)(a) (“the first person”) whose individual interest is sufficient to support a proceeding brought by the first person against a particular person, and gives the first person the further entitlement to make claims on behalf of others against “that other person”. The “other person” is the person referred to earlier in s 33D(1) as “another person”, that is, the person against whom seven or more members, including the applicant, have claims. 

It follows that, in order to utilise the Part IVA procedure against a given respondent, the applicant must have a personal claim against that respondent that is shared by at least six other persons.  The legislation does not prevent several respondents being joined to a single Part IVA proceeding, so long as the commencement and standing requirements are met by the applicant in respect of each of them.  Nor is there any reason why an applicant could not, within the one action, use the Part IVA procedure against one or more respondents but not against others; the action is in the applicant’s name alone, and it might be convenient to determine connected non-representative claims at the same time as the claims the applicant brings for the benefit of the group.  Nor is it forbidden to consolidate the hearing of two or more representative proceedings, brought by different representatives but having, as between them, such similarity as to warrant their being heard together.         It is not difficult to imagine cases being handled in that way. There are many possibilities; the proper management course will depend on considerations of convenience, having regard to all the circumstances.

As it seems to me, neither s 33Q nor s 33R assists Mr Beach’s argument. The powers granted by these sections are powers available in a properly-constituted proceeding. They assume the existence of a valid representative proceeding; they do not cure any deficiency of standing that may exist. If the present applicant has no personal claim against a particular respondent, the existing proceeding was not validly commenced as against that respondent. It must be dismissed; no opportunity for subgrouping or the separate hearing of a group member’s claim will arise.

The second question

The second question is the position of those respondents against whom it does not yet appear that at least seven persons have claims.

It will be apparent from my discussion of the first question that, as regards those respondents against whom the applicant personally makes no claim, the present proceeding will, in any event, need to be dismissed. If it is possible to organise a separate Part IVA proceeding against a particular oyster grower or distributor using a different representative party, it may be appropriate to consolidate that proceeding with this one; the claim against the council, at least, will be common to both proceedings, and the expert and other evidence seems likely to be substantially similar in nature and effect. Similarly, group members affected by the dismissal of the current proceeding against particular respondents, who could not satisfy the s 33C requirements, might wish to bring individual claims against those respondents which, again, might appropriately be consolidated with the current proceeding. I emphasise that, in mentioning consolidation, I am not expressing a concluded view about its desirability. I mention it merely as a possibility that may arise.

Conclusion

The parties will wish to consider the appropriate course to take.  I will consider any application for orders when the matter is next before me, on 8 October 1997.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox

Associate:

Dated:            18 September 1997

Counsel for the Applicant:	J Beach
Solicitor for the Applicant:	Slater & Gordon
Counsel for the First Respondent:	T G R Parker
Solicitor for the First Respondent:	Norton Smith
Counsel for the Third, Fourth and Tenth Respondents:	J E Marshall
Solicitor for the Third, Fourth and Tenth Respondents:	Phillips Fox
Counsel for the Fifth and Sixth Respondents:	N G Rein
Solicitor for the Fifth and Sixth Respondents:	Colin Biggers & Paisley
Counsel for the Seventh and Fourteenth Respondents:	A Sullivan QC
Solicitor for the Seventh and Fourteenth Respondents:	Holman Webb
Counsel for the Eighth and Ninth Respondents:	D Fagan
Solicitor for the Eighth and Ninth Respondents:	Minter Ellison
Counsel for the Eleventh Respondent:	I G Harrison SC
Solicitor for the Eleventh Respondent:	Dunhill Madden Butler
Solicitor for the Thirteenth Respondent:	Ebsworth & Ebsworth
Date of Hearing:	19 August 1997
Date of Judgment:	18 September 1997