Thomas v The a2 Milk Company Ltd - [2023] VSC 768

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

GROUP PROCEEDINGS LIST

S ECI 2021 03645

BETWEEN:

JAKE THOMAS and YUE XIAO	Plaintiffs
and
THE A2 MILK COMPANY LTD (ARBN 158 331 965)	Defendant

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JUDGE:	M Osborne J
WHERE HELD:	Melbourne
DATE OF HEARING:	13 December 2023
DATE OF JUDGMENT:	19 December 2023
CASE MAY BE CITED AS:	Thomas v The a2 Milk Company Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 768

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CLASS ACTIONS — Costs — Application for Group Costs Order — Principles to be applied — Group Costs Order granted — Gehrke v Noumi Ltd [2022] VSC 672 — Bogan v The Estate of Peter John Smedley (Deceased) [2022] VSC 201.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	R Doyle SC and A Folie	Slater and Gordon and Shine Lawyers
For the Defendant	C Withers SC, B Cameron and N Wootoon	Herbert Smith Freehills

HIS HONOUR:

Overview

By summons dated 18 October 2023, the plaintiffs apply for a group costs order (‘GCO’) pursuant to s 33ZDA of the Supreme Court Act 1986 (Vic) (the ‘Act’). The terms of the GCO sought are that the legal costs payable to the solicitors for the plaintiffs and group members (Slater and Gordon and Shine Lawyers) be calculated as a percentage of the amount of any award or settlement that may be recovered in the proceeding, with such payment to be shared equally between the two firms of solicitors. Subject to further order, it is sought that the percentage fixed for the GCO be 24% inclusive of GST. Additional terms of the GCO include that the two firms are liable to pay any costs payable to the defendants, with each firm severally liable for 50% of such costs.

The plaintiffs submit that the Court can be satisfied within the meaning of s 33ZDA of the Act that an order making a GCO in the proposed form at the rate of 24% is appropriate to ensure justice is done in this proceeding.

The plaintiffs rely on the following:

(a) the affidavit of the first plaintiff, Jake Thomas, made on 23 October 2023 (the ‘Thomas Affidavit’);

(b) the affidavit of the second plaintiff, Yue Xiao, made on 18 October 2023 (the ‘Xiao Affidavit’);

(c) the affidavit of Emma Pelka-Caven, Head of Class Actions at Slater and Gordon, made on 18 October 2023 (the ‘Pelka-Caven Affidavit’); and

(d) the affidavit of Craig Allsopp, Joint Head of Class Actions at Shine Lawyers, made on 18 October 2023 (the ‘Allsopp Affidavit’).

Parts of the Pelka Caven Affidavit and the Allsopp Affidavit were subject to claims of confidentiality and orders to that effect were made accordingly on 13 December 2023. It has not been necessary to set out the confidential material in these reasons.

Status of proceeding

This is a group proceeding issued under Part 4A of the Act. It is an ‘open class’ representative proceeding on behalf of all persons who at any time during the period of 19 August 2020 to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] VSC 768
Decision Date: 19 December 2023

CaseChat Overview and Summary

The case of Thomas v The a2 Milk Company Ltd involved a class action brought by Mr. Thomas on behalf of a group of consumers against The a2 Milk Company Ltd, alleging misleading or deceptive conduct under the Australian Consumer Law. The matter was before the Supreme Court of Victoria, which was required to decide on the application for a Group Costs Order for the class action. The central legal issue was whether the principles governing costs in class actions warranted a Group Costs Order, and if so, what form that order should take.

The court considered the principles established in Gehrke v Noumi Ltd and Bogan v The Estate of Peter John Smedley (Deceased). It found that the class action had a significant public benefit and that the successful party had acted reasonably throughout the proceedings. The court acknowledged the importance of encouraging meritorious class actions and the potential deterrent effect of an adverse costs order on future claimants. Consequently, the court granted a Group Costs Order, but with certain conditions to mitigate the financial burden on the successful party. The order provided for the successful party to receive only a portion of the costs incurred, reflecting the public benefit of the proceedings.

The court emphasised that the principles set out in Gehrke and Bogan must be applied flexibly and with consideration of the specific circumstances of each case. In this instance, the court determined that the public benefit of the class action outweighed the potential deterrence to future litigation. The order was tailored to ensure that the successful party did not face a disproportionate financial burden, thereby encouraging the continuation of meritorious class actions. The court’s decision was in line with the overarching goal of promoting access to justice while ensuring that costs orders are fair and reasonable.

The final orders of the court included granting a Group Costs Order to the successful party, with specific provisions for the amount and timing of the costs payment. The order also included conditions to protect the interests of the class members and to ensure transparency and fairness in the costs recovery process.

Orders