Thomas v Powercor Australia Ltd (No 1)
[2010] VSC 489
•29 October 2010
| | ||
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT HORSHAM
COMMON LAW DIVISION
No. 9166 of 2009
| LAURENCE PETER THOMAS | Plaintiff |
| v | |
| POWERCOR AUSTRALIA LIMITED (ACN 064 651 109) | Defendant |
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JUDGE: | J FORREST J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 October 2010 | |
DATE OF RULING: | 29 October 2010 | |
CASE MAY BE CITED AS: | Thomas v Powercor Australia Limited (Ruling No 1) | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 489 | |
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PRACTICE AND PROCEDURE – Representative proceedings – Where discovery sought to enable defendant to ascertain quantum of potential group member claims and to aid settlement discussions – Whether a court has power to order discovery by group members who are not named plaintiffs in the proceeding – Circumstances in which it is appropriate to order discovery by group members who are not named plaintiffs in the proceedings – Part 4A Supreme Court Act 1986 - Place of trial – Hearing of application to have trials heard concurrently – Expert evidence – Joint reports by experts – Application of Civil Procedure Act.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T Tobin SC with Mr L Armstrong | Maddens |
| For the Defendant | Mr A Kelly SC | Wotton & Kearney |
HIS HONOUR:
Introduction
On Black Saturday, 7 February 2009, a large bushfire destroyed or damaged a number of properties on the outskirts of the city of Horsham.
In September 2009 the plaintiff, Mr Laurence Thomas, issued proceedings against Powercor Australia Limited pursuant to Part 4A of the Supreme Court Act on behalf of himself and “all other persons” who suffered loss or damage as a result of the fire.
The pleadings have closed and opt-out notices have been forwarded pursuant to s 33J of the Supreme Court Act.[1]
[1]Referred to subsequently as “the Act”.
There are two other proceedings arising out of bushfires on Black Saturday in the Western District of Victoria:
(a)A group proceeding brought by Terrence Place in relation to a fire which commenced between Pomborneit and Weerite (“the Pomborneit proceeding”);[2] and
(b)A group proceeding brought by Tracey Perry and Terrence Sagar in respect of a fire which commenced north-west of Coleraine (“the Coleraine proceeding”).[3]
[2]S CI 2010 1099.
[3]S CI 2009 330.
In each of the three proceedings Maddens solicitors of Warrnambool act on behalf of the representative plaintiff(s).
Several issues have now arisen which require determination:
(a)whether the group members should provide discovery of documents relevant to the quantum of their respective claims prior to a determination of the liability of Powercor;
(b)the provision of expert reports and the manner in which the experts’ evidence shall be given at trial; and
(c)whether Mr Thomas’ proceeding should be heard together with the Coleraine proceeding and/or the Pomborneit proceeding.
The pleadings
The original indorsement in Mr Thomas’ claim identified the common questions of law or fact as follows:
(a)Whether statutory duties were owed by Powercor to the plaintiff and group members and, if so, the content of those duties;
(b)Whether a general duty was owed by Powercor to the plaintiff and group members and, if so, the content of the duty;
(c)How the Horsham bushfire started;
(d)Whether the Horsham bushfire was caused by a breach by Powercor of any of the statutory duties or the general duty;
(e)What kinds of loss caused by the Horsham bushfire and suffered by the plaintiff and group members are recoverable from Powercor, and the principles relevant to processing those losses.
In the Amended Statement of Claim filed in March this year, Mr Thomas alleged that Powercor had breached its statutory duty under the Electrical Safety Act, as well as its general duty of care to Mr Thomas and the group members. A claim is also made in nuisance on behalf of Mr Thomas and the group members entitled to make such a claim.
Reduced to its basics, Mr Thomas’ allegation is that the Horsham fire commenced as a result of a live conductor becoming detached from a pole located on an electricity supply line situated west of Horsham. He asserts that the pole and its various attachments were inadequate and/or inadequately maintained, resulting in the conductor coming into conduct with nearby vegetation and thus initiating the fire. The statement of claim identifies a number of specific aspects of the alleged breach of duty. For example the inadequacy of:
(a)The design of the pole cap of the pole.
(b)The nature and installation of the fasteners.
(c)The maintenance and the inspections of the pole.
(d)The system of inspections and infrastructure.
Mr Thomas’ loss is said to be destruction or damage of fencing, farm buildings, crops, stored fodder, farm machinery and livestock. In addition, he seeks damages for the rehabilitation and re-sowing of pasture, as well as loss of income suffered as a result of the destruction of livestock or property.
Aspects of the proceeding to date
Pleadings have closed. The opt-out process is complete, with 33 persons having opted out of the group proceeding.
According to Mr John Madden,[4] special counsel employed by Maddens, the firm acts for 67 members of the group (who have entered into a retainer with Maddens). He is aware of another 35 persons who have contacted Maddens and may have claims in relation to damage and loss. He also estimates that there are another 100 to 150 persons who are likely to fall within the group of persons who have suffered loss as a result of the fire. The proceeding is not funded by a litigation funder and Maddens are acting for Mr Thomas and those group members who have retained their services on a no-win no-fee basis.[5]
[4]Affidavit of John Francis Madden dated 30 September 2010 (“Madden affidavit”).
[5]Madden affidavit [5].
The claim of Mr Thomas and the group will be heard at Horsham commencing on 3 September 2011.
Should the group members make discovery? If not, should the group members take any steps to provide information concerning the quantum of their loss?
The application by Powercor in respect of discovery by group members has been a moving feast. The initial application sought orders
requiring the Plaintiff and the class he represents to made [sic] discovery of all documents in their possession on quantum within a time to be agreed.[6]
[6]Affidavit of Robin Maurice Shute dated 20 September 2010 [12].
Then in the written submissions filed some eight days later Powecor limited discovery, somewhat extraordinarily to “class group members who have provided quantum information and documents to Maddens lawyers or any lawyer or other person known to Maddens lawyers.”
Finally, in the draft orders, provided shortly prior to the commencement of the application, Powercor sought the following orders:
· on or before 4:00pm on Friday, 28 January 2010, the plaintiff file and serve on his own behalf and for each group member on whose behalf the plaintiff claims relief a statement specifying each type and the amount of damages claimed by the plaintiff and each group member respectively (Quantum Statement);
· the plaintiff and each group member represented by the plaintiff’s solicitors as at 28 January 2010 in respect of whom a Quantum Statement has been served make available for inspection in Melbourne and copying by the defendant’s solicitors all documents relevant to the issue of damages claimed by that person including any loss adjustors or quantum expert report (as the case may be) on which they intend to rely (Relevant Documents);
· the plaintiff may comply with Order 3(b) by serving on the defendant’s solicitors a compact disc recording in Portable Document Format (PDF) electronic form a copy of each such Quantum Statement annexing a copy of each of the Relevant Documents.
The application by Powercor for discovery by group members was supported by two affidavits sworn by Mr Robin Shute, solicitor for Powercor. His first affidavit merely sets out a number of facts from which it could be inferred that Maddens were in possession of an array of documents and information relating to the claims of a number of group members in addition to Mr Thomas.
His second affidavit, sworn shortly prior to the hearing of this application, deposed as to matters contained within the defence. Mr Shute also notes that Mr Thomas’ legal representatives were present during the Royal Commission and detailed submissions were filed by both Powercor and those representatives concerning Powercor’s role and responsibility for the Horsham fire.
Mr Shute also states that Powercor has disclosed the existence of approximately 23,000 pages of documentation in its affidavits of documents. He puts the proposition that until Powercor is aware of the expert opinion provided to Mr Thomas concerning liability it cannot know “precisely the factual and technical basis” for the allegations of breach of duty. I must say that this suggestion is surprising given that Powercor is a major electricity supplier and participated in the Royal Commission hearings; it has had nearly two years to consider its potential liability to those affected by the fire which, it concedes, emanated from its infrastructure.[7] Notwithstanding that observation, Mr Shute contends that a sequential exchange of expert information is necessary here.
[7]Powercor, in para 33 of its defence, admits that the energised conductor fell from a pole 15 and ignited the Horsham fire.
The position of Mr Thomas and the group members represented by Maddens can be summarised as follows. First, that as a matter of principle, group members should not and cannot be compelled to make discovery and that discovery should be confined to the representative plaintiff. Second (and necessarily in the alternative), in the event that a court was minded to order discovery or the provision of particulars of loss by group members, it should only do so if Powercor demonstrates a sincere interest in settling the claims.
Mr Madden’s affidavit in response confirms, as I have noted, that he acts for 67 members of the group and that he holds 56 completed data work books. The work books were completed by Maddens’ clients and set out with accompanying documentation (including, if available, photographs of the damaged areas), copies of job repair and replacement quotations, and descriptions of the property affected.[8]
[8]Madden affidavit [4] and [9].
Maddens have also engaged a Mr Ian Aberdeen of Aberdeen Consulting Pty Ltd, a highly qualified Rural Loss Assessor with extensive experience in quantifying claims in bushfire losses. He has prepared 38 draft loss assessments for which, it can be anticipated, a claim for legal professional privilege may be made.
Mr Madden estimates that if each group member was required to make formal discovery it would, given the work required, not only take up a considerable amount of time but cost at least $3000 for each client. He has also endeavoured to calculate the cost of providing particulars with estimates of between $5000 -$10,000 per group member, assuming that Aberdeen Consulting carry out the preparation of the claim.
So, by the time of the hearing of this application, the competing positions of the parties were; (a) discovery by all group members who had retained Maddens, of all relevant quantum documents, as against (b) no discovery until determination of liability.
The application by Powercor to obtain discovery from group members is not novel. Recently in P Dawson Nominees Pty Ltd v Brookfield Multiplex Limited (No 2),[9] Finkelstein J dealt with a similar application this year to which I shall return in a moment.
[9][2010] FCA 176, referred to subsequently as “Multiplex (No 2)”.
The starting point in relation to this application is the nature of the class action model that has been adopted by both the Commonwealth and Victorian legislatures. The opt out model does not require the consent of a group member to be part of the group.[10] They must be identified as a group but their personal identities are not known, nor is their number.[11] He or she is automatically represented (and bound by the findings of the court, whether favourable or unfavourable) unless he or she opts out of the group.[12]
[10]Supreme Court Act 1986 s 33E.
[11]Supreme Court Act 1986 s 33H.
[12]Supreme Court Act 1986 s 33J.
In the Second Reading Speech in the Federal Parliament in relation to Part IVA of the Federal Court Act (which is mirrored by Part 4A of the Supreme Court Act), the Commonwealth Attorney-General said:
The Government believes that an opt out procedure is preferable on grounds both of equity and efficiency. It ensures that people, particularly those who are poor or less educated, can obtain redress where they may be unable to take the positive step of having themselves included in the proceedings. It also achieved the goals of obtaining a common, binding decision while leaving a person who wishes to do so free to leave the group and pursue his or her claim separately.[13]
[13]Second Reading Speech by the Attorney-General, Australia, House of Representatives Parliamentary Debates Hansard 14 November 1991 p 3176.
Part 4A was introduced into the Supreme Court Act in 2000.[14] In the Second Reading Speech in the Victorian Parliament, the Attorney-General said:
The Supreme Court’s initiative was based on the provisions of Part IVA of the Federal Court Act 1976 and was designed to provide Supreme Court litigants with a procedure which closely followed the Federal Court procedure.
The rules provide the means by which ordinary litigants could access the court system.
We live in an age of mass production and distribution of goods and services. The potential for loss or damage which can be caused by a single supplier of single goods or services on a mass scale is enormous.
However, while the overall damage may be great, the amount of incurred by an individual may be relatively small in proportion to the legal fees and court costs.
In the worst cases, litigants can face ruin yet lack the means to bring proceedings to redress the wrong they have suffered. The class actions procedure addresses some of the imbalance between ordinary litigants and large and powerful corporate litigants.[15]
[14]Act No 78 of 2000.
[15]Second Reading Speech by the Attorney-General, Victoria, House of Assembly, Vic Hansard, 1252, 2000.
In Mobil Oil Aust Pty Ltd v Victoria,[16] the High Court made a number of observations concerning Part IVA and the nature of proceedings pertinent to this application:
[16](2002) 211 CLR 1.
The position of the plaintiffs in the proceeding may be contrasted with those whom they represent - the group members. Subject to some exceptions that do not matter for present purposes, the consent of a person to be a group member is not required. Group members may neither know of the commencement of the proceeding nor wish that it be brought or prosecuted, although Pt 4A does provide for notice to be given to group members of (among other things) the commencement of the proceeding.
The Supreme Court may dispense with the giving of that notice if the relief sought in the proceeding does not include a claim for damages and, if notice is to be given, it may be given by press advertisement, radio or television broadcast or any other means. Unless the Supreme Court is satisfied that it is reasonably practicable, and not unduly expensive, to do so the Court may not order that notice of the proceeding is to be given personally to group members. There is, therefore, a real possibility that some group members would remain "perfectly ignorant of the proceedings, and of what is really going on". That is, some of those who would benefit from success in the proceeding (but thereby lose the opportunity to pursue their individual claim in some way, or to some effect, different from the group proceeding) may have their rights affected without their knowing or consenting to that being done.
So much follows from the fact that Pt 4A provides for what is sometimes called an "opt out", rather than an "opt in", procedure. That is, persons who are group members may opt out of the proceeding and, if they do, they are taken never to have been a group member (unless the Court otherwise orders). Group members, however, need take no positive step in the prosecution of the proceeding to judgment to gain whatever benefit its prosecution may bring.
Provision is made for the Court to fix a date before which a group member may opt out and, except with the leave of the Court, trial of the proceeding may not begin before that date. The Court, on the application of a party to the proceeding, or of its own motion, may at any time, before or after judgment, order that a person cease to be, or not become, a group member. The circumstances in which the Court may make such an order are stated in very wide terms. It may do so if it is of the opinion that the person does not have "sufficient connection with Australia to justify inclusion as a group member", or that for any other reason it is "just or expedient" that the person should not be or become a group member. And if a person who is a group member does not opt out, either before or after judgment, a judgment given in the proceeding binds that person along with all other persons who are group members at the time judgment is given.[17] [citations omitted, emphasis added]
The Court went on to note:-
A group member is not a plaintiff. It is right to say that a judgment obtained in the proceeding would bind those who had not opted out but to say that such persons had "no control" over their part in the proceeding falls well short of fully describing the way in which Pt 4A works.
Although a proceeding under Pt 4A may affect the rights both of those who know of and support the prosecution of the proceeding and of those who do not know of it, Pt 4A does not compel the unwilling to continue to remain a group member. The unwilling may seek to opt out. Further, in affecting the rights of those who know of the proceeding and those who do not, a proceeding under Pt 4A is no different from representative proceedings of a kind common in the State Supreme Courts since federation and in their colonial predecessors.[18]
[17]Ibid [38]-[41], Gaudron, Gummow and Hayne JJ.
[18]Ibid [50] – [51].
Writing recently in the Australian Bar Review,[19] Mr Michael Legge said of the opt out approach:
The opt out class action also results in the efficient use of judicial resources as one proceeding instead of many are processed by the court system and all group members are bound by the outcome unless they affirmatively opt out. In a successful class action all members of the group are entitled to any recovery and in an unsuccessful class action all claims are extinguished. Those group members who opt out are free to pursue their individual actions. However, the group members who opt out become known.[20] [citations omitted]
[19]Michael Legge, “ Funding a class action through limiting the group: What does Pt IVA of the Federal Court of Australia Act 1976 (Cth) permit?” (2010) 33 Australian Bar Review 17.
[20]Ibid 22.
It follows that one of the consequences of the opt out model, as was clearly intended by the legislature, is the ability of group members to “sit back” and watch the proceeding unfold. In the event that the representative plaintiff is successful and questions answered result in a declaration of liability, then a group member may become entitled to a share of an award of damages[21] or a distribution from a fund set up by the Court.[22]
[21]Supreme Court Act 1986 s 33Z(1)(e).
[22]Supreme Court Act 1986 s 33Z(a).
This process has been described more colloquially by Mr Legge:
However, a group member in an opt out class action is able to free ride on a representative party’s efforts because they are not obligated to contribute to the costs of bringing the proceeding or to any adverse costs order should the proceeding be unsuccessful.[23]
[23]Michael Legge, “ Funding a class action through limiting the group: What does Pt IVA of the Federal Court of Australia Act 1976 (Cth) permit?” (2010) 33 Australian Bar Review 17, 23.
As I mentioned earlier, Finkelstein J recently considered[24] the issue of group discovery in the now well known piece of litigation between Multiplex Funds Management Ltd and P Dawson Nominees Pty Ltd.
[24]In Multiplex (No 2).
It is, I think, of some assistance to examine the nature of that dispute and particularly the identity of the represented group in respect of that proceeding. Dawson Nominees initiated a Part IVA group proceeding under the Federal Court Act. It sued two Multiplex companies[25] in a shareholder class action on behalf of group members who had purchased securities issued by Multiplex. The claim related to the construction of a number of building projects including Wembley Stadium with the allegation that Multiplex failed to make adequate disclosure of losses (or potential losses) resulting from the projects, this being said to be material to the value of securities issued by Multiplex. The represented group in the proceeding was confined to group members who had entered a litigation funding agreement with a litigation funder. It was this limitation that prompted an application to the trial judge, Finkelstein J, and then to the Full Federal Court, seeking to have the proceeding struck out, primarily on the basis that the restriction of the group membership ran contrary to the purpose and intent of Part IVA of the Federal Court Act. Both Finkelstein J[26] at first instance and the Full Federal Court[27] (French, Lindgren and Jacobson JJ) held that it was permissible to limit the group in this way.
[25]The current named respondents are two Multiplex companies, Brookfield Multiplex Limited and Brookfield Multiplex Funds Management.
[26](2007) 242 ALR 111 (“Multiplex (No 1)”).
[27](2007) 164 FCR 275, 244 ALR 600.
Before turning to the decision of Finkelstein J, the point to be noted in the Multiplex litigation in relation to discovery of group members, is that this group of shareholders was particularly confined, with each member being readily identifiable by reason of the existence of agreements with the litigation funder – a discrete identifiable class of 109 purchasers of securities issued by the Multiplex companies.[28]
[28]P Dawson Nominees v Brookfield Multiplex Limited (No 4) [2010] FCA 1029; the Multiplex litigation has been settled and the compromise approved by Finkelstein J.
In Multiplex (No 2), Multiplex sought an order that the investors which comprised the limited group make discovery of litigation funding agreements and trade information relevant to the quantum of their claims. Finkelstein J, having determined that he had the power to make such an order, said as follows:
The starting point is that the class actions regime under Part IVA of the Federal Court Act is designed to require little or no active involvement by group members. A group member is a group member principally for the limited purposes of taking the benefit, or suffering the burden, of findings on common questions (i.e. questions that are common to the claim brought by the named applicant and claims that may be pressed by group members). In an action where money relief may be sought by a group member, the group member will generally only be required to provide specifics about the quantum of his or her claim after the common questions have been resolved and that may be in a separate action.
Given the intent of the class action regime, there must be some compelling reason demonstrated before a court will order group members to go beyond their otherwise essentially passive role. [emphasis added][29]
[29]Multiplex (No 2) [16]-[17].
Multiplex argued, essentially, that it should be provided with the trading information of the institutional investors as it would enable it to assess the value of each claim. It contended that it would be in a better position to decide the future conduct of the defence of the claim and particularly whether it ought to be settled. The primary argument relied upon by Multiplex was to the effect that discovery would assist it in making an informed assessment of any settlement proposal. In that respect, it is on all fours with the assertion made by Powercor in this case.
Finkelstein J rejected the proposition that it was inevitable that there would be discovery of such material as, necessarily, whether discovery was to be made depended upon a finding of the liability of Multiplex to the group. His Honour ultimately rejected the application on two bases:
First, it is a common, if not an inevitable, feature of class actions that the defendant will be faced with uncertainty regarding the quantum of potential group member claims. This is partly because of the essentially passive role of group members, already discussed. In many class actions, this uncertainty will be compounded because the identity of the group members is not known. True their identity may be discovered, sometimes with a good deal of effort. But group members are under no obligation to identify themselves and the named applicant, if he does not know who they are, has no obligation to seek them out.
Second, a court should be cautious in becoming involved in the essentially consensual process of mediation. In civil litigation, discovery rules exist as an aid to the parties by enabling them to prosecute or defend their case, as far as may be possible, with all material information to hand. Discovery at an early stage of litigation is often warranted to allow parties to go to mediation armed with facts that will enable them to assess their respective merits. Once parties are in mediation, however, a court should be careful before making orders which interfere with private negotiations. It is unclear and perhaps doubtful that, absent s 33ZF, the court’s general power to order discovery can be used to aid mediation. Under s 33ZF, at least, it may be appropriate to make orders in aid of mediation, for example where the parties face asymmetric information which may lead to an unfair settlement. But there must be good reason for doing so, particularly where the discovery is being sought from group members.[30]
[30]Ibid [32]-[33].
I adopt, unhesitatingly, the first of the propositions advanced by Finkelstein J. That statement is underpinned by the very nature of the model chosen by the legislature. Indeed, it is of far greater relevance in this proceeding than in Multiplex where a limited number of sophisticated investors comprised the group. Here the composition of the group is unknown and may, if findings are made adverse to the group, never be known. In those circumstances it would be an extraordinary step, in my view, for a court to compel all the known members of the group to provide discovery whilst others, quite properly, can sit back and await the adjudication of the liability issues.
What I have so far resolved is the question of discovery by all group members or, for that matter, all group members who are clients of Maddens. Simply put, in a group proceeding of this nature there is no scope for an order for discovery by all group members, absent extraordinary circumstances – which have not been demonstrated here.
However, as I indicated to the parties in discussion, that conclusion does not resolve the underlying issue raised by Powercor, namely providing it with a sufficient amount of information to enable it to participate sensibly in the mediation process which will be undertaken early next year.
I do not embrace as enthusiastically Finkelstein J’s second proposition[31] in relation to a court’s caution at becoming involved in the consensual process of mediation. I think that this Court needs to be proactive in its approach to facilitating and encouraging settlement. This approach is endorsed by the impending introduction on 1 January 2011 of the Civil Procedure Act2010,[32] which will govern the conduct of this proceeding after that date. A number of the provisions of the C.P.A. direct a court to actively pursue processes (including the making of orders) aimed at early settlement of a dispute.
[31]See Multiplex (No 2) [32] above.
[32]Referred to as the “C.P.A.” subsequently.
Section 7 defines the overarching purpose of the C.P.A.:
to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.
Section 7(2) then sets out several ways by which the overarching purpose may be achieved including:
(c)any appropriate dispute resolution process—
(i)agreed to by the parties; or
(ii)ordered by the court.
By s 9 the Court is given powers to further the overarching purpose:
(1) In making any order or giving any direction in a civil proceeding, a court shall further the overarching purpose by having regard to the following objects—
(a)the just determination of the civil proceeding;
(b)the public interest in the early settlement of disputes by agreement between parties;
(c)the efficient conduct of the business of the court;
(d)the efficient use of judicial and administrative resources;
(e)minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for—
(i)the fair and just determination of the real issues in dispute; and
(ii)the preparation of the case for trial;
(f)the timely determination of the civil proceeding;
(g)dealing with a civil proceeding in a manner proportionate to—
(i)the complexity or importance of the issues in dispute; and
(ii)the amount in dispute.
(2) For the purposes of subsection (1), the court may have regard to the following matters—
(a)the extent to which the parties have complied with the pre-litigation requirements or any other mandatory or voluntary pre-litigation processes;
(b)the extent to which the parties have used reasonable endeavours to resolve the dispute by agreement or to limit the issues in dispute;
(c)the degree of promptness with which the parties have conducted the proceeding, including the degree to which each party has been timely in undertaking interlocutory steps in relation to the proceeding;
(d)the degree to which any lack of promptness by a party in undertaking the proceeding has arisen from circumstances beyond the control of that party;
(e)the degree to which each person to whom the overarching obligations apply has complied with the overarching obligations in relation to the proceeding;
(f)any prejudice that may be suffered by a party as a consequence of any order proposed to be made or direction proposed to be given by the court;
(g)the public importance of the issues in dispute and the desirability of a judicial determination of those issues;
(h)the extent to which the parties have had the benefit of legal advice and representation. [emphasis added]
Part 4.2 deals with case management. By s 47(1) a Court
for the purposes of ensuring that a civil proceeding is managed and conducted in accordance with the overarching purpose…may give any direction or make any order it considers appropriate, including any directions given or orders made –
(a)in the interests of the administration of justice; or
(b)in the public interest.
Section 47(2) then provides that orders may be made imposing
any reasonable limits, restrictions or conditions in respect of-
(a)the management and conduct of any aspect of a civil proceeding; or
(b)the conduct of any party.
Section 47(3) then sets out under the heading “Judicial powers of case management – overarching purpose and active case management”:
Without limiting subsection (1) or (2), a court may actively case manage civil proceedings by—
(a)giving directions to ensure that the civil proceeding is conducted promptly and efficiently;
(b)identifying at an early stage the issues involved in the civil proceeding, including any issues that have not been resolved in accordance with the pre-litigation requirements;
(c)deciding the order in which the issues in dispute in the civil proceeding are to be resolved including—
(i)deciding promptly which issues need full investigation and a hearing; and
(ii)disposing summarily of other issues;
(d)encouraging the parties—
(i)to co-operate with each other in the conduct of the civil proceedings;
(ii)to settle the whole or part of the civil proceedings;
(iii)to use appropriate dispute resolution;
(e)controlling the progress of the civil proceeding, including, but not limited to—
(i)fixing timetables;
(ii)dealing with as many aspects of a civil proceeding as it can on the same occasion;
(iii)dealing with the civil proceeding without the parties needing to attend court;
(iv)making use of technology;
(f)limiting the time for the hearing or any other part of a civil proceeding, including, but not limited to—
(i)limiting the number of witnesses at the hearing;
(ii)limiting the time for the examination or cross-examination of any witness;
(iii)limiting the issues or matters that may be the subject of examination or cross-examination;
(g)considering whether the likely benefits of taking a particular step in a civil proceeding justify the cost of taking it. [emphasis added]
Finally I should refer to s 48 which gives a court power to order and direct pre-trial procedures in the following terms:
(1) In addition to any other power a court may have, a court may make any order or give any direction it considers appropriate to further the overarching purpose in relation to pre-trial procedures.
(2) Without limiting subsection (1), a court may give any directions or make any orders it considers appropriate with respect to—
(a)the conduct of proceedings;
(b)timetables or timelines for any matters to be dealt with, including—
(i) the conduct of any hearing; and
(ii)the time within which specified steps in a civil proceeding must be completed;
(c)the use of appropriate dispute resolution to assist in the conduct and resolution of all or part of the civil proceedings;
(d)the attendance of parties and legal practitioners at a case management conference with a judicial officer to consider the most cost effective and efficient means of bringing the civil proceeding to trial and of conducting the civil proceeding, including giving further directions;
(e)defining issues by pleadings or otherwise, including requiring parties or their legal practitioners to exchange memoranda, or take other steps to clarify questions;
(f)the attendance of parties or their practitioners before a judicial officer for a conference for the purposes of—
(i)satisfying the judicial officer that all reasonable steps to achieve resolution of the issues in dispute have been taken; or
(ii)otherwise clarifying the real issues in dispute to enable appropriate directions to be given for the further conduct of the dispute or civil proceeding; or
(iii)otherwise shortening the time taken in preparation for the trial and at the trial;
(g)any other matter specified in rules of court. [emphasis added]
These provisions, it seems to me, require a court to be proactive and, if necessary, innovative in its approach to appropriate dispute resolution.[33] There is no need to wait until the Act is proclaimed – if any issue is raised about its application to this proceeding, I will defer the making of orders until January.
[33]Referred to subsequently as “ADR”.
Counsel for Mr Thomas opposed any form of limited discovery or the provision of particulars by a limited number of group members and relied upon the matters I have referred to in paragraphs [19]-[22].
Contrary to the submissions made on behalf of Mr Thomas, it is patently contrary to the purpose and intent of the C.P.A. for a court to sit by passively and allow a case to proceed to what may be a lengthy trial of Mr Thomas’ claim on liability and quantum, without ensuring that there is adequate information available to both Mr Thomas and Powercor to achieve resolution, not only of Mr Thomas’ claim but also of the claims of the group members. In my experience this is not a novel proposition. Often in group proceedings the solicitors for the representative plaintiff provide particulars and, where necessary, supporting documentation relevant to the quantum of group members’ claims. The initial bulldog approach adopted by Mr Thomas’ lawyers is outmoded and runs contrary to the provisions of the C.P.A.[34] This is a case in which the Court should exercise its powers to ensure that there is adequate material available to Powercor to enable it to form a considered view as to the likely resolution of the group’s claim.
[34]During the course of the hearing of this application, counsel for Mr Thomas and the Maddens’ group members made an open offer to provide 8 draft loss assessments of group members’ claims, prepared by Mr Aberdeen, subject to a number of conditions. This offer was not accepted by Powercor.
Before I turn to the manner in which the Court should exercise its powers, I will deal with three issues raised by counsel for Mr Thomas.
Firstly, the contention that since the group members are not parties to the proceeding, there is doubt about the Court’s power to make orders as to discovery or particulars of loss concerning these members. This submission is incorrect.
Such powers are clearly given to the Court by s 33ZF of the Act which permits the Court to:
of its own motion or an application by a party or a group member, make any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding.
In Multiplex (No 2), Finkelstein J was of the view that this provision enabled him to make an order for discovery from a group member. I respectfully adopt his Honour’s opinion. Moreover, s 48(1) of the C.P.A. will, from January 2011,[35] enable a court to make:
any order or give any direction it considers appropriate to further the overarching purpose in relation to pre-trial procedures.
[35]See [25].
At the hearing of the application, counsel for Mr Thomas did not press the point and it can now be put to one side.
Secondly, it was submitted that because the focus of a Part 4A proceeding is on the representative plaintiff’s claim, then this in some way militates against the Court facilitating ADR processes[36] of the claim by the group. I reject this proposition outright. My own experience in Part IVA cases has been that early discussion concerning the size and quantum of the group claim has facilitated resolution and a fast track settlement process; in doing so it has obviated the necessity for a lengthy trial, a judgment and then complicated arguments concerning causation and damages in relation to the claims of the group members. This approach is, of course, all the more relevant given the impending introduction of the C.P.A. To focus in the pre-trial ADR process solely on the representative plaintiff’s claim is both blinkered and contrary to the interests of justice.
[36]See definition of “appropriate dispute resolution” in C.P.A. s 3.
Thirdly, counsel for Mr Thomas is correct in saying that there is no material before the Court to substantiate the proposition that Powercor needs this information to enable it to prepare for the mediation. Counsel pointed particularly to the fact that despite opportunities to do so, Mr Shute, the solicitor for Powercor, had not said a word about its desire to obtain such information for the purpose of a mediation or its bona fides in relation to settlement discussion. There was some force in this submission, however, I think it flies in the face of Powercor’s statutory obligations and experience. Powercor will be obliged by s 22 of the C.P.A to “use reasonable endeavours to resolve a dispute by agreement”. This is also consistent with my own experience with group proceedings – the likelihood of resolution is inevitably enhanced by a defendant having, in a general sense, an idea of the quantum of the claim in the event that liability is established against it.
I am satisfied that prior to any ADR Powercor should be provided with information that will assist it in determining the likely quantum of the claim it is to meet. Indeed, I would have reached this conclusion absent the introduction of the C.P.A. Its imminent proclamation has merely fortified my view that Powercor should be provided with sufficient information, relevant to the group members, to enable it to have some idea as to the size of the claim it has to meet in the event it is found liable to the group.
As I have said, the provision of discovery by all group members is out of the question; however there should be a process by which Powercor can obtain such information in the form of particulars of loss and with accompanying substantiating documentation from, if possible, a representative sample of members.
For reasons I shall set out in a moment, I think that Powercor is entitled to particulars with accompanying documentation. Although I regard Mr Madden’s estimate of costing (admittedly unchallenged) as being extravagant, I am, nevertheless, of the view that to require Maddens and all their clients to compile particulars of loss with accompanying documentation, in a case where the liability of Powercor has not yet been determined, is far too onerous. This is particularly so, it seems to me, as other group members who are not clients of Maddens can (entirely within their rights) sit back and await a determination of liability.
I am conscious of the fact that making an order for discovery and particulars will impose an obligation upon Maddens and a number of their clients to take steps to provide the particulars and the accompanying documentation, which may ultimately be non-recoverable in the event that the claim fails. I also take into account the fact that some of these group members who have engaged Maddens will be required to devote time and effort in providing particulars; as opposed to those who are sitting on the fence awaiting a determination of liability. On the other hand much of the work has been done through the use of the work books, remembering that the particulars provided are not intended to be a work of art and are merely designed to act as a guide to Powercor in order for it to measure the value of claims that it is likely to meet in the event of it being found liable.
In my opinion, the costs involved in carrying out this exercise on the basis that I propose will not be anywhere near as high as those suggested by Mr Madden. Indeed, on Mr Madden’s predictions one could envisage a continuous convoy of vehicles travelling between Warrnambool and Horsham, manned by employees of Maddens. The completed work books will provide a solid basis for estimating the particulars of loss, and a conference in Warrnambool with the particular group member should be sufficient for a reasonable set of particulars to be provided without reference to Mr Aberdeen. Of course that is not to say that Mr Aberdeen should not be involved, if that is the wish of the particular group member or Maddens. There is no need for Mr Madden’s suggested “review in detail” of the documents; by now they should be readily identifiable, nor is there any need for the preparation of an affidavit of documents.
I am not convinced by Powercor’s protestations that it is imperative to have information from all group members in order that it may make an informed decision about its approach to any ADR in the future. Because of the nature of a group proceeding, a defendant, if it wishes to settle a claim, is obliged to make estimates (indeed guesstimates) as to the size of the group and the quantum of claims. Moreover, Powercor is in a different position to defendants in other group proceedings. It knows precisely the area affected, participated in the Royal Commission, and made submissions concerning the subject fire. It also has an established presence in the Western District and a depot/office in Horsham. It is by no means a babe in the woods, dependent solely upon material from the group members in assessing the potential quantum if found liable.
Powercor relied particularly upon analogies with other forms of group proceedings (especially cases involving representations and securities); in my view these are of little assistance in determining what should be done in a case arising out of a bushfire in rural Victoria effecting 4000 hectares of farming land and 8 residences.
I reject the contention of Powercor that, in some way, it needs the information from all the Maddens group members if it is to place a settlement proposal before the Court. That, as counsel for Mr Thomas pointed out, is not its role. Consistent with established practice it will be up to Mr Thomas and the group members to place sufficient information before the Court for its approval of any settlement pursuant to s 33V of Part 4A.
Having thought carefully about this issue and having been much assisted by the submissions by counsel for Mr Thomas and Powercor, I have reached the conclusion that, consistent with the objects of the C.P.A., a limited number of group members who have retained Maddens should provide particulars of loss accompanied by substantiating documentation.
Accordingly, I think that the appropriate course is to require ten of the group members who have retained Maddens to provide such particulars of loss and any documentation substantiating these particulars (subject to any claim for legal professional privilege).[37] The five group members with the most significant claims, in terms of quantum, should make discovery and provide particulars of loss, as should five members with the least significant claims in terms of quantum.
[37]It will be up to Maddens’ clients to determine if they wish to claim privilege over Mr Aberdeen’s reports – if applicable to these members.
Powercor’s application that the accompanying documentation be inspected in Melbourne is inappropriate. If the parties cannot agree as to the manner in which the documents are to be provided then, provided that Powercor agrees to meet the costs, copies of the relevant documents (either photocopied or scanned) should be forwarded to Powercor’s solicitors on or before 26 November 2010 with the particulars of loss.
Should the claim relating to the Horsham fire be heard at the same time as the Coleraine proceeding?
Powercor seeks orders that this proceeding and the Coleraine proceeding be tried at the same time and that the Pomborneit proceeding be heard immediately after that hearing. It also seeks an order that the evidence in any one of the claims stand as evidence in the other claim. It relies upon Rule 9.12(3) and (4) which provides for either consolidation of claims or an order that the trial of two proceedings be heard together or immediately after the other.
At the hearing of this application, counsel for Powercor did not press this issue. However, as this is a matter of some importance to both this proceeding and the Coleraine and Pomborneit proceedings, I should set out my views on the application.
Undoubtedly, the Court’s power to fashion orders in relation to the manner in which trials are conducted (either jointly or separately) and the use of evidence from one trial to another will be enhanced by the provisions of the C.P.A., in particular s 47 (the relevant parts are set out at paragraphs 44-45) and s 49, which gives the Court the power to:
give any direction or make any order it considers appropriate to further the overarching purpose in relation to the conduct of the hearing in a civil proceeding.
Maddens also act for the representative plaintiffs in the Coleraine and Pomborneit proceedings. Counsel for Mr Thomas was authorised to make submissions on behalf of these plaintiffs.
In support of its application, Powercor points to the following admissions contained in its defence to both the Horsham and Coleraine claims:
(a)Both fires were ignited by an unintended discharge of electricity from power lines owned and operated by Powercor;
(b)The power lines involved in both fires were 12.5kv single wire earth return (SWER) line;
(c)That the pole top assets on each of the SWER lines that failed were last inspected within the time required by Powercor’s inspection maintenance cycle.
Powercor then identifies a number of matters common to its defence to both claims, namely:
(a)The transmission of electricity gives rise to a level of risk than can never be eliminated entirely but can be managed;
(b)Additional risks are created by bushfires;
(c)No reasonable maintenance system can be 100% effective;
(d)Powercor at all times disclosed the particulars of the operation of its asset inspection and maintenance regime to the Regulator;
(e)Powercor’s asset management regime was implemented following the engagement, in 1996, of specialist consultants;
(f)Powercor relies upon a maintenance analysis tool called Reliability Centred Maintenance (RCM) which follows the principle of condition monitoring;
(g)Powercor’s maintenance program reasonably addressed failure modes in SWER installations;
(h)In-service failures do not worsen as the time from the maintenance inspection lengthens to five years;
(i)Powercor complies with its maintenance regime in conducting inspection;
(j)Inspection of Powercor’s asset was undertaken by trained asset inspectors using appropriate technology.
Apart from asserting that lay witness evidence will play a limited role in the proceeding and that expert evidence will be led by both parties, Powercor has not put any material before me indicating what evidence, if any, will be duplicated in the relevant trials. Indeed, the silence is deafening.
The submissions made on behalf of Mr Thomas acknowledge that there are a number of common issues involved in the two proceedings – for instance the existence and scope of the alleged duties of care owed by Powercor, as well as the nature of the type of losses said to flow from the respective fires.
However, as counsel for Mr Thomas points out, the case does not turn on Powercor’s identification of issues relevant to its defence. In fact, there are a raft of non-common issues: the specific cause of each fire (noting that the actual pieces of equipment that failed at Horsham and Coleraine were different), the maintenance of the particular line, the pre-fire condition of the respective lines, poles and attachments and the adequacy of the maintenance regime in relation to the particular line and pole.
Moreover, at a more abstract level, each claim necessarily turns on its own facts and involves a duty of care owed to a different plaintiff and a different group with a different cause of action relating to a different piece of infrastructure. It is inevitable that some of the evidence will overlap, but an order that the evidence given in the Horsham proceeding stand as evidence for the purpose of each of the other proceedings (which was sensibly conceded as being appropriate by Mr Thomas’ counsel) will ameliorate this position considerably in the event of such an overlap.
Counsel for Mr Thomas also points to a number of practical consequences if liability in Mr Thomas’ proceedings is determined prior to the trial of the Coleraine and Pomborneit proceedings. First, the parties to the Coleraine and Pomborneit proceedings will have a reasonable opportunity to assess the evidence given in respect of the Horsham fire (and perhaps the judgment) prior to the commencement of the other proceedings. This will assist in terms of either the resolution of those proceedings or a narrowing of the issues between the parties (particularly as the evidence from Mr Thomas’ trial is to be used in the other trials). Second, there is the question of the burden placed upon Maddens. As I understand the position, the firm has agreed to conduct the litigation on a no-win no-fee basis and would be forced to incur the costs of all three proceedings at one time, without the opportunity of considering the ramifications of the evidence (and perhaps judgment) in Mr Thomas’ proceeding upon the conduct of the other two proceedings.
Finally, and in my view importantly, there is the question of venue. There is, I apprehend, considerable local interest in the proceeding and the Western District bushfire litigation generally. Horsham is a considerable distance from Coleraine which in turn is a considerable distance from Pomborneit. At present it is intended that each trial be conducted at the court most proximate to the relevant fire. The trial of Mr Thomas’ proceeding is scheduled to commence on 5 September 2011 at Horsham, the Pomborneit proceeding will be held at Warrnambool commencing 10 February 2012 and the Coleraine proceeding at Hamilton commencing 16 April 2012.
I have therefore determined to refuse Powercor’s application in relation to the scheduling of the trials. However, I propose to make an order, subject to any further order by the trial judge, that the evidence given in the course of Mr Thomas’ proceeding stand as evidence in the Pomborneit and Coleraine proceedings.
Expert evidence
Powercor initially sought orders for delivery of expert evidence sequentially, Mr Thomas to serve his expert reports by 6 December 2010 and Powercor to serve any expert reports upon which it intends to rely by 1 March 2011.
The draft orders provided by Powercor to the Court shortly prior to hearing this application were amended and developed in the following way:
·On or before Friday, 12 November 2010 the plaintiff serve on the defendant’s solicitors a list of proposed questions to be addressed by the parties’ experts on issues of liability.
·On or before Friday, 26 November 2010 the defendants serve on the plaintiff’s solicitors a list consolidating with the list referred to in Order 4 any further proposed questions to be addressed by the parties’ experts on issues of liability (Consolidated Questions).
·Direct that the parties shall provide to their respective experts on liability the Consolidated Questions on or before Monday, 29 November 2010.
·Direct that on or before Friday, 4 February 2011, the plaintiff file and serve any expert report addressing each of the Consolidated Questions.
·Direct that on or before Friday, 31 March 2011, the defendant file and serve any expert report addressing each of the Consolidated Questions.
Counsel for Mr Thomas did not oppose the provision of expert reports on liability sequentially. However, as I discussed with counsel, I think it preferable that the questions for the experts be the subject of discussion between the parties’ legal representatives with the aim of producing an agreed set of questions. Failing agreement, I will determine the form of questions at a directions hearing on 10 December 2010.
I also accept Powercor’s suggestion that in accordance with r 44.06 there be a conference between the experts (provided their evidence is, of course, relevant to a common issue). It is appropriate that subsequent to that conference, the experts produce a joint report specifying:
(a) agreed matters;
(b) matters not agreed - and their reasons for disagreement. I will direct that the legal representatives of each of the parties not attend the conference (or conferences) as it should be left to the experts to sort out the contents of their reports, not their legal advisors.
I have, however, shortened the timetable which seems to me (particularly given the background of the Royal Commission and the expertise of the parties involved in this litigation) to be too expansive. I will require the joint report containing matters of agreement and matters of disagreement to be provided by 15 April 2011.
The question of expert evidence on the issue of Mr Thomas’ loss and damage was also canvassed in the course of this hearing. Any such report is to be filed within 2 weeks of today; the parties’ legal representatives are then to meet and prepare an agreed set of questions for the experts – subsequent to receipt of any response by Powercor[38] a conference will be held between the experts on quantum.
[38]If necessary a supplementary report may be filed by Mr Thomas’ expert responding to the questions.
At the trial of this proceeding, concurrent evidence will be given by the experts. Once the joint reports (on liability and quantum) are received, I will give directions in relation to the preparation of an agenda by the parties in relation to the issues upon which there is disagreement between the experts.
Appropriate Dispute Resolution
Powercor seek that a mediation take place in Melbourne after the exchange of expert evidence and for the arrangements to be made between the parties.
It is patently preferable for any ADR to take place after the provision of expert reports and the particulars of loss (to be provided by Mr Thomas and the selected group members). The question of the form of ADR will, however, not be left solely to the parties. Rather, as s 66 of the C.P.A. makes clear, the Court is able to direct the form of ADR which includes mediation, a judicial resolution conference or a settlement conference.[39]
[39]The parties will, of course, have an opportunity to make submissions as to the appropriate form of ADR.
Other pre-trial issues
As I mentioned earlier, the trial of this proceeding will commence at Horsham on 5 September 2011.
In the course of this application I discussed with counsel the form of the trial. There was general agreement that I should determine questions of both liability and quantum in relation to Mr Thomas’ claim. The findings in relation to liability will bind the group members and findings as to loss (if applicable) will, hopefully, provide a useful guide to Powercor and the other group members as to the manner in which quantification may be approached.
By the time of the directions hearing on 18 February 2011 a number of matters will need to be discussed, and at that time ruled upon –
(a)Prior to the trial I will require the legal representatives for Mr Thomas and Powercor to meet and prepare a memorandum setting out the questions to be answered by the Court at the proceeding. In the event that there is disagreement as to the form of a question or questions, I shall resolve that issue;
(b)The provision by Mr Thomas and Powercor of lists of witnesses;
(c)The provision by the solicitors for Mr Thomas of a court book comprising the pleadings and all documents which will be sought to be tendered in the course of the trial – with a similar court book to be provided by Powercor;
(d)The compilation by the solicitors for Mr Thomas and Powercor of a joint chronology;
(e)Determining the type of ADR and fixing a date by which the process is to be completed; and
(f)Directions as to the framing of the experts’ agenda to facilitate the giving of concurrent evidence by experts at the trial.
Orders
Subject to any further submissions from counsel concerning form, I propose to make the following orders:
1.That the trial of this proceeding (on both the issues of liability and loss and damage of the plaintiff) be fixed for hearing at Horsham on 5 September 2011.
2.That subject to any order of the trial judge, the evidence given in this proceeding stand as evidence in the Pomborneit proceeding (S CI 2010 1099) and the Coleraine proceeding (S CI 2010 0330).
3.That by 12 November 2010, the plaintiff file and serve particulars of loss and damage.
4.That by 26 November 2010, 10 group members (represented by Maddens solicitors) provide to the solicitors for the defendant particulars of their loss and damage occasioned by the subject fire, accompanied by:
(a)a list of all documents relevant to the calculation of such loss;
(b)copies of all documents relevant to the calculation of such loss.
5.That by 26 November 2010 the legal representatives of the plaintiff and the defendant meet and resolve, if possible, the questions to be addressed by the expert witnesses as to the liability of the defendant to the plaintiff (“the liability questions”).
6.That by 14 January 2011 the plaintiff file and serve any expert report on liability.
7.That by 25 February 2011 the defendant file and serve any expert report on liability.
8.That by no later than 15 April 2011 the parties’ experts on liability shall meet in conference, prepare and deliver for the Court a joint report:
(a) addressing each of the liability questions;
(b) identifying each of the matters on which they agree;
(c) identifying each of the matters on which they do not agree; and(d)providing detailed reasons outlining the basis on which they are unable to agree on any matter relating to any of those liability questions.
9. That in respect of the conference of the experts on liability it is directed:
(a)the experts’ conference is to be private to the experts and confidential;
(b)the experts’ joint statement is to be delivered to the parties’ solicitors forthwith;
(c)the plaintiff’s solicitors shall file such joint report forthwith upon receipt.
10.That by 12 November 2010 the Plaintiff file and serve any expert reports on quantum.
11.That by 26 November 2010 the legal representatives of the plaintiff and the defendant meet and resolve, if possible, the questions to be addressed by the expert witnesses as to the quantum of the plaintiff’s claim (“the quantum questions”).
12.That by 14 January 2011 the plaintiff file and serve any further expert report on quantum.
13.That by 25 February 2011 the defendant file and serve any expert report on quantum.
14.That by not later than 15 April 2011 the parties’ experts on quantum shall meet in conference, prepare and deliver for the Court a joint report:
(a) addressing each of the quantum questions;
(b) identifying each of the matters on which they agree;
(c) identifying each of the matters on which they do not agree; and(d)providing detailed reasons outlining the basis on which they are unable to agree on any matter relating to any of those quantum questions.
15. That in respect of the conference of the experts on quantum:
(a)the experts’ conference is to be private to the experts and confidential;
(b)the experts’ joint statement is to be delivered to the parties’ solicitors forthwith;
(c)the plaintiff’s solicitors shall file such joint report forthwith upon receipt.
16.The experts conferences are intended to be a consultation of experts without any influence from a party to the proceeding. To that end:
(a)The conference of experts and all further communications between them in relation to the preparation of the joint report shall be conducted in the absence of the parties, their employees or agents, or any practitioner for or associated with any party;
(b)None of the experts shall in the preparation of the joint report consult with any party, their employees or agents, or any practitioner for or associated with any party; and
(c)Notwithstanding (a) and (b) the experts may jointly request further information or direction by letter signed by them directed to the practitioner for each of the parties and may receive such further information.
17.That a further directions hearing be held on 18 February 2011.
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