FEDERAL COURT OF AUSTRALIA
Webb v GetSwift Limited (No 5) [2019] FCA 1533
File number NSD 580 of 2018 Judge LEE J Date of judgment: 16 September 2019 Catchwords: COURTS AND JUDGES – principles of apprehended bias in the context of judge hearing a regulatory civil penalty proceeding and a Part IVA class action consecutively
PRACTICE AND PROCEDURE – application for vacation of case management orders listing class action for hearing – both proceedings arising out of same underlying factual substratum can be heard by same Judge – whether risk of apprehended bias arises – application dismissed
Legislation: Australian Securities and Investments Commission Act 2001 (Cth) s 12DA
Corporations Act2001 (Cth) s 674
Federal Court of Australia Act 1976 (Cth) ss 33ZB, 37P(2)
Cases cited: Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; (2007) 164 FCR 32
Commonwealth Bank of Australia v Jackson McDonald (a firm) [2014] WASC 301
Fair Work Ombudsman v Hu [2017] FCA 1081
Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm)
McKenzie v Cash Converters International Ltd (No 3) [2019] FCA 10
Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; (2001) 205 CLR 507
Date of hearing: 16 September 2019 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 35 Counsel for the Applicant: Mr D Collins QC with Dr O Bigos Solicitor for the Applicant: Phi Finney McDonald Counsel for the Respondents: Mr M Darke SC with Mr A Shearer Solicitor for the Respondents: Quinn Emanuel Urquhart & Sullivan ORDERS
NSD 580 of 2018 BETWEEN: RAFFAELE WEBB
Applicant
AND: GETSWIFT LIMITED (ACN 604 611 556)
First Respondent
JOEL MACDONALD
Second Respondent
JUDGE:
LEE J
DATE OF ORDER:
16 SEPTEMBER 2019
THE COURT ORDERS THAT:
1.The interlocutory application filed 2 September 2019 be dismissed.
2.The time for bringing any application for leave to appeal from Order 1 be extended to a period expiring 14 days after the publication of revised reasons.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
Revised from the transcriptLEE J:
A INTRODUCTION
In a previous judgment in this matter (Perera v GetSwift Limited [2018] FCA 732; (2018) 263 FCR 1 at 9-18 [10]-[37]), I traced the genesis, the development and the current state of securities class actions in this country. One of the more recent developments, which is evident from a review of cases currently before the Court, is the prevalence of matters in which a regulator has commenced a civil penalty proceeding and an applicant has sought relief in a class action proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth) (Act), arising out of the same underlying factual substratum.
This case is an example of this…
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- AGLC
- Webb v GetSwift Limited (No 5) [2019] FCA 1533
- Case
- [2019] FCA 1533
- Decision Date
CaseChat Overview and Summary
The central legal issue was whether the same judge could hear both the regulatory civil penalty proceeding and the class action, given that they arose from the same underlying factual substratum. The court had to consider the principles of apprehended bias and whether there was a real likelihood of bias that might affect the fairness of the proceedings. The court also examined the extent of overlap in the documentary and witness evidence that might be presented in both cases.
The court concluded that there was no risk of apprehended bias that would necessitate the recusal of the same judge from both proceedings. The court reasoned that the likelihood of substantial overlap in the documentary and witness evidence did not create a real danger of bias. The court also noted that the principles of apprehended bias were not engaged because the judge could properly apply the law and maintain impartiality. Consequently, the application to vacate the case management orders was dismissed.
The court's final orders included dismissing the interlocutory application and extending the time for any application for leave to appeal from the decision. This extension was set to expire 14 days after the publication of revised reasons, ensuring that all parties had an opportunity to review the court's decision before pursuing further legal action.
Orders
Orders of the court
1. The interlocutory application filed 2 September 2019 be dismissed.
2. The time for bringing any application for leave to appeal from Order 1 be extended to a period expiring 14 days after the publication of revised reasons.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
GetSwift operates a software platform that enables businesses to automate dispatching and tracking of deliveries of goods to customers. GetSwift listed on the Australian Securities Exchange in December 2016, and from that time, had continuous disclosure obligations pursuant to s 674 of the Corporations Act2001 (Cth) (Corporations Act). It is claimed by ASIC that GetSwift made a series of announcements concerning agreements that GetSwift had entered into with customers. ASIC claims GetSwift omitted material information from the announcements relating to these agreements, and that the announcements contained representations that were misleading and deceptive. ASIC claims that by making the announcements, GetSwift contravened ss 674 and 1041H of the Corporations Act, and s 12DA(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). ASIC claims that the individual defendants were involved in contraventions of the Corporations Act and the ASIC Act, and further, that those defendants failed to comply with their obligations under s 180 of the Corporations Act. ASIC seeks declarations and pecuniary penalties. Following the filing of a further amended statement of claim in the class action in April 2019, the allegations raised by ASIC and by Mr Webb are largely the same, save that in the class action the allegations relate to GetSwift’s contractual obligations and dealings with a total of 16 customers, comprising 13 customers referred to in the ASIC proceeding plus an additional three customers. As a reflection of this, orders have been made in both proceedings allowing for largely identical categories of documents to be produced by way of discovery by GetSwift. It follows it is reasonably likely that the documentary cases tendered by the parties in the two proceedings will substantially overlap. Leaving aside the documentary case, it is appropriate to assume that there is likely to be a substantial overlap in the witnesses. ASIC has foreshadowed that it expects to rely on 30 lay witnesses and that those witnesses will include representatives of the clients and customers who had entered into the relevant customer agreements with GetSwift. Although the lay evidence of the applicant in the class action has been filed, Mr Webb has not confirmed the scope of any further evidence he may wish to adduce at the hearing and it does not seem to me unlikely that Mr Webb may seek to rely on some evidence of witnesses called in the ASIC case, by subpoenaing them to give evidence in the initial trial. When it comes to expert evidence, ASIC has foreshadowed that on the important issue of materiality, it proposes to adduce opinion evidence only from a professional investment expert. As I presently understand the position, although the time for the filing of expert evidence in the class action has not yet been reached, I assume that Mr Webb will adduce evidence of a type commonly seen in these sorts of proceedings, including from a forensic economist who undertakes a regression analysis by way of an event study.