Date of Hearing: 10 November 2020 Date of Judgment: 10 March 2021
S67/2020
ORDER
1.Appeal dismissed.
2.The appellant pay the respondents' costs of the appeal to this Court.
On appeal from the Supreme Court of New South Wales
Representation
J T Gleeson SC with A M Hochroth and P A Meagher for the appellant (instructed by Quinn Emanuel Urquhart and Sullivan)
E A Collins SC with I J M Ahmed for the first respondent (instructed by Herbert Smith Freehills)
C A Moore SC with G A Donnellan and J Entwisle for the second and third respondents (instructed by Maurice Blackburn Lawyers)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Wigmans v AMP Limited
Practice and procedure – Representative action – Stay – Where five open class representative actions commenced against same defendant in relation to same controversy – Where considerable overlap between claims made in proceedings – Where representative plaintiff in four proceedings filed notice of motion in Supreme Court of New South Wales seeking orders that each other proceeding be permanently stayed – Whether Supreme Court's power to grant stay is confined by rule or presumption that representative proceeding issued first in time is to be preferred – Whether litigation funding arrangements can be relevant consideration under s 67 of Civil Procedure Act 2005 (NSW) – Whether Supreme Court erred in considering litigation funding arrangements.
Words and phrases – "abuse of process", "auction process", "certification and carriage motion procedures", "class actions", "competing funding proposals, costs estimates and net hypothetical return to members", "competing representative proceedings", "conflicts of interest", "contradictor", "duplicative proceedings", "equitable principles concerning test actions", "first-in-time rule or presumption", "funding model", "litigation funding arrangements", "multifactorial approach", "multiplicity", "one size fits all", "power to grant a stay", "prima facie vexatious and oppressive", "representative proceedings", "special referee".
KIEFEL CJ AND KEANE J. On 16 and 17 April 2018, executives of the first respondent ("AMP") gave testimony to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to the effect that AMP had deliberately charged some of its clients fees for no service, and that it had misled the Australian Securities and Investments Commission as to the extent of this conduct. Following this testimony, there was a sharp fall in the price at which shares in AMP traded on the Australian Securities Exchange ("the ASX").
Shortly thereafter, five open class representative proceedings were commenced in quick succession on behalf of shareholders in AMP who had made investments during periods of time in which the representative parties allege AMP ought to have disclosed to the market the information that emerged during the Royal Commission. All the representative parties sought compensation…
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.
Continue reading Wigmans v AMP Ltd
Sign in free to access the full text
Details
AGLC
Wigmans v AMP Limited [2021] HCA 7
Case
[2021] HCA 7
Decision Date
CaseChat Overview and Summary
The High Court of Australia heard an appeal concerning the stay of multiple representative proceedings brought against AMP Ltd. Five open class representative actions were commenced against AMP within a short period, alleging misconduct related to fee disclosure, misleading conduct, and share price inflation. The appellant, Ms Wigmans, was the representative plaintiff in the first proceeding commenced in the Supreme Court of New South Wales. She sought orders to permanently stay the other four proceedings, arguing that her action, being filed first, should be preferred.
The central legal issues before the High Court were whether the Supreme Court's power to grant a stay of competing representative proceedings was confined by a "first-in-time" rule or presumption, and whether litigation funding arrangements were a relevant consideration under section 67 of the *Civil Procedure Act 2005* (NSW) when exercising this power. The court was also required to determine if the primary judge had erred in considering these funding arrangements.
The High Court rejected the submission that a "first-in-time" rule dictates which proceeding should be preferred. Instead, the court affirmed that the exercise of the power to grant a stay involves a multifactorial approach aimed at achieving justice and promoting the efficient administration of justice. This approach considers various factors, including competing funding proposals, costs estimates, net hypothetical returns to members, the nature and scope of causes of action, the size of classes, the experience and resources of legal practitioners and funders, and the progress of the proceedings. The court found that the primary judge had correctly applied this multifactorial approach, giving significant weight to the comparative analysis of funding models and their likely impact on group member returns, and that the consideration of litigation funding arrangements was permissible and relevant.
The appeal was dismissed, with the High Court ordering that the appellant pay the respondents' costs of the appeal.
Orders
Orders of the court
1. Appeal dismissed.
2. The appellant pay the respondents' costs of the appeal to this Court.
Background
Background to the litigation
In this matter, the primary judge's exercise of the power to stay proceedings did not miscarry. The appeal should be dismissed.Facts Evidence given by executives of AMP Limited ("AMP") at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry on 16 and 17 April 2018 gave rise to allegations that AMP failed to disclose to the market that it had deliberately charged its customers fees for ongoing financial services that were not provided. The evidence also gave rise to allegations that AMP misled the Australian Securities and Investments Commission as to the nature and extent of that conduct over an extended period, and improperly inflated the price of its shares. It was alleged that this conduct contravened the continuous disclosure obligations[51], the statutory prohibitions on misleading and deceptive conduct[52] and the statutory prohibitions on unconscionable conduct[53].[51]Corporations Act 2001 (Cth), s 674(2); ASX Listing Rules, r 3.1.[52]Corporations Act, s 1041H; Australian Securities and Investments Commission Act 2001 (Cth), s 12DA(1); Competition and Consumer Act 2010 (Cth), Sch 2 ("Australian Consumer Law"), s 18. [53]Australian Securities and Investments Commission Act, ss 12CA and 12CB; Australian Consumer Law, ss 20 and 21. In relation to these allegations, five open class representative actions were commenced against AMP within five weeks of each other. The first proceeding was commenced in the Supreme Court of New South Wales on 9 May 2018 by Ms Wigmans (represented by Quinn Emanuel). The second proceeding was commenced in the Victorian Registry of the Federal Court of Australia also on 9 May 2018, but about seven hours after the Wigmans proceeding, by Wileypark Pty Ltd ("Wileypark") (represented by Phi Finney McDonald). The third proceeding was commenced in the New South Wales Registry of the Federal Court on 25 May 2018 by Mr Georgiou (represented by Shine Lawyers). The fourth proceeding was commenced in the Victorian Registry of the Federal Court on 6 June 2018 by Fernbrook (Aust) Investments Pty Ltd ("Fernbrook") (represented by Slater & Gordon). And the fifth proceeding was commenced in the Victorian Registry of the Federal Court on 7 June 2018 by Komlotex Pty Ltd ("Komlotex") (represented by Maurice Blackburn). There is considerable overlap between the claims made in the various proceedings, although they are not identical. There are differences in the relevant claim periods and, arguably, in the factual allegations made. There are also some differences in the causes of action brought: the inclusion of an unconscionable conduct claim in the Wigmans proceeding (but not in any other proceeding); the inclusion of a claim in respect of shares acquired off-market or the acquisition of American Depository Receipts ("ADRs") in the Fernbrook proceeding (but not in any other proceeding); and the inclusion of a claim arising out of the receipt by AMP of legal advice to the effect that its conduct was unlawful in the Wileypark proceeding (but not in any other proceeding). Ms Wigmans, however, contends that her existing claim encompasses the latter two causes of action.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
KIEFEL CJ
KEANE J
GAGELER, GORDON AND EDELMAN JJ
Between 29 August 2018 and 9 November 2018, the representative plaintiff in four of the proceedings (but not the Fernbrook proceeding) filed a notice of motion in the Supreme Court seeking orders that each other proceeding be permanently stayed. AMP took no position on these applications other than to argue that only one proceeding should be permitted to continue. At the same time, an application was made (and ultimately granted) for the Fernbrook proceeding and the Komlotex proceeding to be consolidated ("consolidated Komlotex proceedings"). Decisions below The primary judge took the view that the consolidated Komlotex proceedings, which offered a "no win, no fee" funding model, should proceed, and the other proceedings should be stayed. Because none of the competing representative plaintiffs could be said to be parties to the Wigmans proceeding before the opt‑out process[56] concluded, and because apparently they were not aware of the way in which the Wigmans claim was put, her Honour found that there was no abuse of process.[56]CPA, s 162. By reference to the submissions of the parties, the primary judge identified eight matters relevant to resolving the competing stay applications, consideration of which was described as a "multifactorial approach"[57]. They were:[57]See McKay Super Solutions Pty Ltd (Trustee) v Bellamy'sAustralia Ltd [2017] FCA 947 at [71]; Perera v GetSwift Ltd (2018) 263 FCR 1 at 48-49 [169] ("GetSwift First Instance")."[1]the competing funding proposals, costs estimates and net hypothetical return to members; [2] the proposals for security; [3]the nature and scope of the causes of action advanced (and relevant case theories); [4] ... the size of the respective classes; [5] the extent of any bookbuild; [6]the experience of the legal practitioners (and funders, where applicable) and availability of resources; [7] the state of progress of the proceedings; and, [8]the conduct of the representative plaintiffs to date." Her Honour gave most weight to the first consideration – a comparison of "competing funding proposals, costs estimates and net hypothetical return to members". That comparison was based on comparative tables provided by Komlotex that modelled the expected return to group members for each proceeding. The primary judge found that Komlotex's funding model was likely to provide the best return for group members taking into account the combination of: the absence of a separate funding commission; the incentive created by an uplift in fees only once a specified resolution sum is achieved; the comparable return based on some standardised assumptions; and the fact that no common fund order was being sought by Komlotex[58]. Her Honour said she considered that "there [was] no sensible basis for differentiation between the experience or abilities of the respective legal/funding teams". [58]But see BMW Australia Ltd v Brewster (2019) 94 ALJR 51; 374 ALR 627. Ms Wigmans had submitted before the primary judge that the firms of solicitors and counsel each party had retained were highly experienced and that there was no reason to doubt that any of the firms would have any difficulty in running the litigation on behalf of the class. Ms Wigmans further submitted that the experience of legal practitioners (and funders where applicable) and the availability of resources was a neutral factor. The case being conducted on this basis, it is unsurprising that her Honour assumed that the solicitors in each proceeding were of equal experience and ability, that each of them would take the same number of hours of work to reach settlement or judgment, and, at least implicitly, that each of them had the same chance of achieving each given settlement or judgment sum. In relation to funding arrangements, her Honour assumed that the litigation funders were similarly equal and that each funding model provided incentives and disincentives to achieving the best outcome for group members.
Ratio Decidendi
Legal Principle Established
Established by:
KIEFEL CJ,
KEANE J,
GAGELER, GORDON AND EDELMAN JJ
Contrary to Ms Wigmans' submission, Carron Iron does not hold that, where proceedings are pending in which complete relief is available, any subsequent proceeding in respect of the same controversy is vexatious and should therefore be restrained or that, absent some other juridical basis, the first in time prevails. It directs attention to the need to consider what resolution of the competing proceedings will do justice. Considerations relevant to the exercise of the power to grant a stay Having thus rejected Ms Wigmans' contention that the breadth of the power to grant a stay of competing representative proceedings under the CPA is subject to a first‑in‑time rule or presumption, it remains to identify the considerations that are relevant to the exercise of the power. The starting point is that multiplicity of proceedings is not to be encouraged and that competing representative proceedings run by different firms of solicitors, with different funders, may in principle be inimical to the administration of justice[145]. But, as was earlier stated, there is no "one size fits all" approach. Multiplicity may be addressed by a variety of means instead of, or in addition to, staying one or more of the proceedings[146]. [145]See, eg, Johnson Tiles Pty Ltd v Esso Australia Ltd (1999) ATPR ¶41-679; Kirby v Centro Properties Ltd (2008) 253 ALR 65; Smith v Australian Executor Trustees Ltd [2016] NSWSC 17; Bellamy's [2017] FCA 947; Cantor v Audi Australia Pty Ltd [No 2] [2017] FCA 1042; GetSwift (2018) 263 FCR 92; Wileypark (2018) 265 FCR 1.[146]These include: consolidating the proceedings; de-classing one or more of the proceedings; holding a joint trial of all proceedings with each left constituted as open class proceedings; and closing the classes in one or more of the proceedings but leaving one of the proceedings as an open class proceeding, with a joint trial of all: see, eg, Bellamy's [2017] FCA 947 at [9]; Cantor [2017] FCA 1042 at [75]; GetSwift (2018) 263 FCR 92 at 105‑110 [44]-[70]; Southernwood v Brambles Ltd (2019) 137 ACSR 540 at 545 [20]; Wigmans v AMP Ltd (2019) 373 ALR 323 at 326 [7]. Second, while a first‑in‑time rule or presumption has never been favoured as a means of resolving which of the competing proceedings should proceed at all, the order of filing has been and remains a relevant consideration, although less relevant in cases like this where the competing proceedings have been commenced within a short time of each other[147]. As the Full Court of the Federal Court said in GetSwift, the commencement of a subsequent bona fide set of representative proceedings prior to the court giving substantive directions in existing but overlapping representative proceedings[148]:"does not of itself establish any vexation, oppression or an abuse of process. Such is not established for the representative applicant in each of the proceedings, for they are different. And in respect of the group members in each of the proceedings in relation to the overlap, those overlapping group members are not parties as such. They have not engaged in any conduct with respect to their rights that could sensibly be characterised as amounting to vexation, oppression or an abuse of process."By contrast, "the greater the gap in time between commencement of the sets of representative proceedings perhaps the stronger the case for a stay of the subsequent set of proceedings, all other matters being equal"[149].[147]Union Steamship Co of New Zealand Ltd v The Caradale (1937) 56 CLR 277 at 281.[148](2018) 263 FCR 92 at 126 [150].[149]Wigmans (2019) 373 ALR 323 at 341 [83].