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Westpac Banking Corporation v Lenthall

Westpac Banking Corporation v Lenthall

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FEDERAL COURT OF AUSTRALIA
Westpac Banking Corporation v Lenthall [2019] FCAFC 34

Appeal from: Lenthall v Westpac Life Insurance Services Limited [2018] FCA 1422

File number: NSD 1880 of 2018

Judges: ALLSOP CJ, MIDDLETON AND ROBERTSON JJ

Date of judgment: 1 March 2019

Catchwords:
REPRESENTATIVE PROCEEDINGS – representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) – where primary judge determined making of common fund order appropriate to do justice in the proceedings – whether s 33ZF authorises the Court to make common fund order –– relevant considerations – width and purpose of s 33ZF – nature and purpose of common fund order – principle of legality – construction of Part IVA

CONSTITUTIONAL LAW – JUDICIAL POWER – whether power to make common fund order part of or incidental to exercise of judicial power by the Court – conferral of power by Parliament – capacity of the Court to balance competing interests and rights – incidental resolution of legal rights

CONSTITUTIONAL LAW – ACQUISITION ON JUST TERMS – whether common fund order amounts to acquisition of property other than on just terms – nature of power – order directed toward appropriate reward for funder upon bearing of costs and risk – whether nature of benefit to group members proprietary

PRACTICE AND PROCEDURE – whether primary judge erred in exercise of discretion

Legislation:
Acts Interpretation Act 1901 (Cth) s 15A

Australian Constitution s 51(xxxi), 71, 76, 77

Federal Court of Australia Act 1976 (Cth) ss 5, 21, 22, 23, 33E, 33V, 33X, 33Z, 33ZA, 33ZB, 33ZF, 33ZJ

Re-establishment and Employment Act 1945-1952 (Cth) ss 27, 28

Cases cited:
Airservices Australia v Canadian International Airlines Ltd [1999] HCA 62; 202 CLR 133
Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; 47 CLR 1
Attorney-General (Cth) v Schmidt [1961] HCA 21; 105 CLR 361
Attorney-General (Cth) v Alinta Limited [2008] HCA 2; 233 CLR 542
Attorney-General (NT) v Emmerson [2014] HCA 13; 253 CLR 393
Australian Tape Manufacturersv Commonwealth [1993] HCA 10; 176 CLR 480
Bank of New South Wales v Commonwealth [1948] HCA 7; 76 CLR 1
Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334
Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330; 343 ALR 476
Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527
Campbells Cash and Carry v Fostif Pty Ltd [2006] FCA 41; 229 CLR 386
CMA CGM SA v The Ship ‘Chou Shan’ [2014] FCAFC 90; 224 FCR 384
Coco v The Queen [1994] HCA 15; 179 CLR 427
Cominos v Cominos [1972] HCA 54; 127 CLR 588
Courtney v Medtel Pty Limited [2002] FCA 957; 122 FCR 168
Davis v Insolvency and Trustee Service Australia [2010] FCAFC 141
Falcke v Gray (1850) 4 Drew 651; 62 ER 250
Femcare Ltd v…

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: [2019] FCAFC 34
Decision Date: 1 March 2019

CaseChat Overview and Summary

The Westpac Banking Corporation filed a proceeding against Lenthall in the Federal Court of Australia, seeking to challenge the appropriateness of a common fund order in representative proceedings brought under Part IVA of the Federal Court of Australia Act 1976 (Cth). The primary judge had determined that a common fund order was appropriate to do justice in the proceedings. The legal issues before the court were whether section 33ZF of the Act authorised the Court to make a common fund order, the relevant considerations in determining this, and the construction of Part IVA. The court also considered whether the power to make a common fund order was part of or incidental to the exercise of judicial power by the Court and whether it amounted to an acquisition of property other than on just terms.

The court examined the construction and purpose of section 33ZF and the nature of a common fund order, which is intended to reward the funder for bearing costs and risks. The court found that the power to make a common fund order was part of the exercise of judicial power and was not an acquisition of property on unjust terms. The court held that the primary judge did not err in exercising their discretion to make a common fund order, as it was appropriate to do justice in the proceedings.

The appeal was dismissed, and Westpac Banking Corporation was ordered to pay the respondents’ costs of the application for leave to appeal and of the appeal. JustKapital Litigation Pty Limited was granted leave to intervene and appeal, and leave to appeal was granted on the grounds set out in the notice of appeal. The orders were made in accordance with Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. Leave be granted nunc pro tunc for JustKapital Litigation Pty Limited to intervene in the application for leave to appeal and appeal.

2. Leave be granted to appeal on the grounds set out in the notice of appeal contained in the Combined Appeal Book at pp 90–93, dispensing with the need for the filing of any further document.

3. The appeal be dismissed.

4. The appellants pay the respondents’ costs of the application for leave to appeal and of the appeal.

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

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Appeal from:	Lenthall v Westpac Life Insurance Services Limited [2018] FCA 1422
File number:	NSD 1880 of 2018
Judges:	ALLSOP CJ, MIDDLETON AND ROBERTSON JJ
Date of judgment:	1 March 2019
Catchwords:	REPRESENTATIVE PROCEEDINGS – representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) – where primary judge determined making of common fund order appropriate to do justice in the proceedings – whether s 33ZF authorises the Court to make common fund order –– relevant considerations – width and purpose of s 33ZF – nature and purpose of common fund order – principle of legality – construction of Part IVA CONSTITUTIONAL LAW – JUDICIAL POWER – whether power to make common fund order part of or incidental to exercise of judicial power by the Court – conferral of power by Parliament – capacity of the Court to balance competing interests and rights – incidental resolution of legal rights CONSTITUTIONAL LAW – ACQUISITION ON JUST TERMS – whether common fund order amounts to acquisition of property other than on just terms – nature of power – order directed toward appropriate reward for funder upon bearing of costs and risk – whether nature of benefit to group members proprietary PRACTICE AND PROCEDURE – whether primary judge erred in exercise of discretion
Legislation:	Acts Interpretation Act 1901 (Cth) s 15A Australian Constitution s 51(xxxi), 71, 76, 77 Federal Court of Australia Act 1976 (Cth) ss 5, 21, 22, 23, 33E, 33V, 33X, 33Z, 33ZA, 33ZB, 33ZF, 33ZJ Re-establishment and Employment Act 1945-1952 (Cth) ss 27, 28
Cases cited:	Airservices Australia v Canadian International Airlines Ltd [1999] HCA 62; 202 CLR 133 Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; 47 CLR 1 Attorney-General (Cth) v Schmidt [1961] HCA 21; 105 CLR 361 Attorney-General (Cth) v Alinta Limited [2008] HCA 2; 233 CLR 542 Attorney-General (NT) v Emmerson [2014] HCA 13; 253 CLR 393 Australian Tape Manufacturersv Commonwealth [1993] HCA 10; 176 CLR 480 Bank of New South Wales v Commonwealth [1948] HCA 7; 76 CLR 1 Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334 Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330; 343 ALR 476 Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527 Campbells Cash and Carry v Fostif Pty Ltd [2006] FCA 41; 229 CLR 386 CMA CGM SA v The Ship ‘Chou Shan’ [2014] FCAFC 90; 224 FCR 384 Coco v The Queen [1994] HCA 15; 179 CLR 427 Cominos v Cominos [1972] HCA 54; 127 CLR 588 Courtney v Medtel Pty Limited [2002] FCA 957; 122 FCR 168 Davis v Insolvency and Trustee Service Australia [2010] FCAFC 141 Falcke v Gray (1850) 4 Drew 651; 62 ER 250 Femcare Ltd v…