Morabito, Vince --- "Class Actions against Multiple Respondents" [2002] FedLawRw 11; (2002) 30(2) Federal Law Review 295
[*] Associate Professor, Department of Business Law and Taxation, Monash University; Co-Editor of the Journal of Australian Taxation. The author wishes to thank Associate Professor Peta Spender of the Australian National University for her comments and suggestions on an earlier draft of this article.
[1] Peter Gordon and Lisa Nichols, 'The Class Struggle' (2001) 48 Plaintiff 6, 10.
[2] Justice Stephen Charles, 'Class Actions in Australia' (Paper presented at the Australian Bar Association Conference, San Francisco, 18–21 August 1996) 32. An example of the judicial approach to class actions highlighted by Justice Charles is provided by the recent comments of Callinan J of the High Court in Mobil Oil Australia Pty Ltd v Victoria [2002] HCA 27, para 183: 'the problems to which I have just referred are likely to be aggravated by the increasingly competitive entrepreneurial activities of lawyers undertaking the conduct of class or group actions, in which, in a practical sense, the lawyers are often as much the litigants as the plaintiffs themselves, and with the same or even a greater stake in the outcome than any member of a group'.
[3] See the Federal Court of Australia (Amendment) Act 1991 (Cth).
[4] For a discussion of some of these issues, see Australian Law Reform Commission, Managing Justice—A Review of the Federal Civil Justice System, Report No 89 (2000) paras 7.87–7.128; S Stuart Clark and Christina Harris, 'Multi-Plaintiff Litigation in Australia—A Comparative Perspective' (2001) 11 Duke Journal of Comparative and International Law 289; Vince Morabito, 'Security for Costs and Class Actions in the Federal Court of Australia' (2001) 20 Civil Justice Quarterly 225; Jocelyn Kellam and S Stuart Clark, 'Multi-Party Actions in Australia' in Christopher Hodges (ed), Multi-Party Actions (2001) 269; Rod Freeman, 'Class Actions the Australian Way' (1999) 10 Australian Product Liability Reporter 109; Justice Murray Wilcox, 'Representative Proceedings in the Federal Court of Australia: A Progress Report' (1996-97) 15 Australian Bar Review 91; Peter Cashman, 'Consumers and Class Actions' [2001] UWSLawRw 2; (2001) 5 University of Western Sydney Law Review 9; Peta Spender, 'Securities Class Actions: A View from the Land of the Great White Shareholder' (2002) 31 Common Law World Review 123; Maggie Doyle, 'The Nature of Representative or Class Actions in the Context of Compensation Claims Against Resources and Utilities Companies' [1999] Australian Mining and Petroleum Law Association Yearbook 277.
[5] Surprisingly, this significant issue has not been the subject of any extensive analysis in the legal literature. See, however, Jonathan Beach, 'Representative Proceedings—Some Current Issues' (Paper presented at a Seminar on Recent Developments in Class Actions, Melbourne, 12 October 2000) 18–29.
[6] In November 2000 the Victorian Parliament introduced a legislative framework for class actions in the Supreme Court of Victoria which is almost identical to the pt IVA regime: Supreme Court Act 1986 (Vic) pt 4A. Consequently, the analysis developed in this article is equally relevant to the Victorian regime. The constitutional validity of pt 4A was upheld in June 2002 by the High Court in Mobil Oil Australia Pty Ltd v Victoria [2002] HCA 27. On the Victorian regime, see Beach, above n 5, 1-17; Schutt Flying Academy (Australia) Pty Ltd v Mobil Oil Australia Pty Ltd [2000] VSCA 103; (2000) 1 VR 545; Vince Morabito, 'Ideological Plaintiffs and Class Actions—An Australian Perspective' (2001) 34 University of British Columbia Law Review 459, 462; Cook v Pasminco Ltd [2000] VSC 534.
[7] See Philip Morris (Australia) Ltd v Nixon [2000] FCA 229; (2000) 170 ALR 487, 514 (Sackville J) (‘Philip Morris’):
A proceeding is not properly commenced unless it satisfies each of the three threshold requirements specified in s 33C(1). If the proceeding does not comply with these requirements ... the proceeding is liable to be dismissed or the applicants' pleading struck out. (An alternative procedure was adopted in Silkfield v Wong, where the Full Federal Court made a declaration that the proceedings continue as proceedings brought by the respondents on their own behalf, to give effect to the majority holding that s 33C(1)(c) had not been complied with ...).
See also Femcare Ltd v Bright [2000] FCA 512; (2000) 172 ALR 713, 734 (Black CJ, Sackville and Emmett JJ); Silkfield Pty Ltd v Wong (1998) 159 ALR 329, 333–4 (Foster J); Wong v Silkfield Pty Ltd [1999] HCA 48; (1999) 199 CLR 255, 265–6 (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ) (‘Silkfield’). See, however, Bright v Femcare Ltd [2000] FCA 1179, para 14 (Lehane J): 'I am not convinced that it is clear that a failure to comply with s 33C(1)(a), at the time a proceeding is commenced, is necessarily fatal to its continuance as a proceeding under Pt IVA'.
[8] In Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 511 Sackville J explained that 'the expression "the same person" in s 33C(1)(a) is to be read as including more than one person (see Acts Interpretation Act 1901 (Cth), s 23(b))'.
[9] The existing class action regimes in the US federal courts and in the Canadian provinces of Quebec, Ontario, British Columbia, Saskatchewan and Newfounland and Labrador all require certification of a class action: see, respectively, United States Federal Rules of Civil Procedure, Rule 23(c); Code of Civil Procedure of Quebec, arts 1002–1005 ('Quebec Act'); Class Proceedings Act, SO 1992, c 6, ss 2-8 ('Ontario Act'); Class Proceedings Act, RSBC 1996, c 50, ss 2-10 ('BC Act') ; The Class Actions Act, RSS 2001, c C-12.01, ss 4-12 ('Saskatchewan Act'); Class Actions Act, RSN 2001, c C–18.1, ss 3–11 ('NL Act'). In May 2002 the Attorney-General of the Canadian province of Manitoba introduced in that province's legislature the Class Proceedings Bill 2001 (Bill 16). A central component of this proposed modern class action regime is the certification model.
[10] Australian Law Reform Commission, Grouped Proceedings in the Federal Court, Report No 46 (1988) ('Grouped Proceedings'). For more details, see Vince Morabito, 'Dinning v Federal Commissioner of Taxation—The Dawn of A New Era in Tax Litigation in Australia?' [2000] CanterLawRw 4; (2000) 7 Canterbury Law Review 487, 501–2.
[11] It provides that where, at any stage of the class action, it appears likely that there are fewer than seven class members, the Court is empowered to order (a) that the proceeding continue as a class action or (b) that the proceeding no longer continue as a class action under pt IVA.
[12] It empowers the Court to order the termination of a class action where the cost to the respondent of identifying the class members and distributing to them the damages won by the representative plaintiff would be excessive.
[13] See Gold Coast City Council v Pioneer Concrete (Qld) Pty Ltd (Unreported, Federal Court, Drummond J, 9 July 1997).
[14] As Kellam and Clark (above n 4, para 15.51) have indicated:
where the respondent believes it is not appropriate to have the matter dealt with as a representative proceeding ... the respondent will generally launch a multi-faceted attack asserting that (1) the proceedings do not satisfy the requirements of commonality prescribed by section 33C; and (2) that, for one or more of the reasons set out in subsection 33N(1), the proceedings should be terminated.
See also Vince Morabito and Judd Epstein, Class Actions in Victoria—Time for a New Approach (1997) (Report commissioned by the Victorian Attorney-General's Law Reform Advisory Council), para 6.16.
[15] Silkfield Pty Ltd v Wong (Unreported, Federal Court, O'Loughlin and Drummond JJ, 17 December 1998), 3.
[16] See Bright v Femcare Ltd [2000] FCA 1179, para 19 (Lehane J): 'it is an inevitable aspect of proceedings under Pt IVA, I should think, that in many cases a substantial number of members of the represented group will be unknown'; Australian Competition and Consumer Commission v Golden Sphere International Inc [1998] FCA 598; (1998) 83 FCR 424, 428 (O'Loughlin J).
[17] Section 33E permits a class suit to be commenced by the representative plaintiff without the express consent of the class members. However, an opportunity is offered to the class members to exclude themselves from the class action; that is, to opt out (see s 33J). Section 33ZB provides that a judgment given in a representative proceeding binds all persons other than those who have opted out and requires that the class members affected by it be described or identified. Section 33ZB was recently described by the Full Federal Court as the 'pivotal provision of Part IVA': Femcare Ltd v Bright [2000] FCA 512; (2000) 172 ALR 713, 719 (Black CJ, Sackville and Emmett JJ).
[18] [2000] FCA 229; (2000) 170 ALR 487, 514.
[19] Ibid 514.
[20] Grouped Proceedings, above n 10.
[21] Ibid. For a discussion of the background to the enactment of pt IVA, see Vince Morabito, 'Class Actions—the Right to Opt Out Under Part IVA of the Federal Court of Australia Act 1976 (Cth)' [1994] MelbULawRw 5; (1994) 19 Melbourne University Law Review 615, 617.
[22] Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 511–12.
[23] Grouped Proceedings, above n 10, paras 64–5.
[24] Ibid para 94.
[25] Alberta Law Reform Institute, Class Actions, Report No 85 (2000) para 57.
[26] UK, Civil Procedure Rules, Rules 19.10–19.15; and UK, Civil Procedure Rules, Practice Direction 19B—Group Litigation. For more details see Neil Andrews, 'Multi-Party Proceedings in England: Representative and Group Actions' (2001) 11 Duke Journal of Comparative and International Law 249; Hodges, above n 4, chs 1–8; Alberta Law Reform Institute, above n 25, paras 86–87; Robyn Trigge, 'Representative Actions under the Uniform Civil Procedure Rules' (2001) 21 Queensland Lawyer 110, 111.
[27] Andrews, above n 26, 249.
[28] See Lord Woolf, Access to Justice: Final Report (1996), ch 17; Lord Chancellor's Department, Multi-Party Situations: Draft Rules and Practice Direction (June 1999).
[29] See Grouped Proceedings, above n 10, para 93:
the Constitutional requirement that the federal judiciary power only be exercised in respect of 'matters' [see Part III of the Commonwealth Constitution] would lead to difficulties if this course was followed for the Federal Court, or in respect of the exercise of federal jurisdiction. Those represented would be bound only if there was a 'matter' between them and the respondent ... In the Commission's view, there is considerable doubt whether there would be a 'matter' in the constitutionally required sense if the persons to be bound were not parties to the proceeding.
[30] No reasons were furnished by the Government of the day for its rejection of the ALRC's grouped proceedings model. A leading commentator welcomed this move: 'this recommendation was, rightly, not adopted in Pt IVA ... since the effect of its adoption would have been to set at nought one of the essential characteristics and advantages of representative proceedings' (Michael Tilbury, 'The Possibilities for Class Actions in Australian Law' (Paper presented at the Australian Legal Convention, Hobart, 1993), 2 n 7). It is interesting to note that Senator Durack, the then Deputy Leader of the Opposition, lamented that 'it is very bland and misleading to say that the Government has not adopted the Commission's group proceedings. It may be that that is literally true, given the special definition in the report. The fact of the matter is that the Government has adopted a proceeding which is basically the same proposal': Commonwealth, Parliamentary Debates, Senate, 13 November 1991, 3020. See also Courtney v Medtel Pty Limited [2002] FCA 957, para 36 (Sackville J).
[31] A constitutional challenge to the validity of pt IVA was rejected by the Full Federal Court in Femcare Ltd v Bright [2000] FCA 512; (2000) 172 ALR 713. An application for special leave to appeal to the High Court from the judgment of the Full Federal Court has been lodged by Femcare Ltd. However, the chances of this application being granted have been diminished somewhat by the fact that the Federal Court has recently made an order under s 33N that the proceedings against Femcare Ltd be terminated as pt IVA proceedings: see Bright v Femcare Ltd [2001] FCA 1477; Transcript of Proceedings, Femcare Ltd v Bright (High Court of Australia (30 October 2001).
[32] See King v GIO Australia Holdings Ltd [2000] FCA 617; (2000) 100 FCR 209, 221 (Moore J): 'I acknowledge, however, that the proposal of the [ALRC] for grouped proceedings was not adopted by Parliament ... and comments ... made by the [ALRC] ... must be approached with that in mind'. See also Nixon v Philip Morris (Australia) Ltd [1999] FCA 1107; (1999) 165 ALR 515, 543–4 (Wilcox J):
bearing in mind that, in drafting the Bill eventually presented to Parliament, the Government departed from the Commission's model in several important respects, it is a large assumption to ascribe to the Government all the Commission's views. Although the Commission's report undoubtedly provides relevant background to the Government's proposal, on matters of detail the Government must be allowed to speak for itself.
[33] Lawyers for applicants in pt IVA suits have attacked Sackville J's reliance on the ALRC's report upon the following grounds: 'with respect, the text of Part IVA itself, which provides that once the threshold requirements are met, an action may be brought, does not require and is in fact inconsistent with the use Sackville J sought to make of the [ALRC] report' (Gordon and Nichols, above n 1, 10).
[34] See the quote accompanying note 19 above.
[35] (1997) 149 ALR 45, 48. It is fascinating to note that there is a difference of opinion among commentators as to how liberally s 33C(1) has been construed and applied by the Federal Court. See, for instance, Gordon and Nichols, above n 1, 8: '[there has been] an overly-rigorous reading of the threshold requirements allowing representative proceedings to be commenced, resulting in an outcome inconsistent with the legislative intent'; and Freeman, above n 4, 109. Clark and Harris, on the other hand, have indicated that 'the threshold requirements [of s 33C(1)] have been liberally interpreted by the courts such that they are easily satisfied in practice': above n 4, 307.
[36] This is essentially the interpretation advocated by Beach. However, he argues that this interpretation can co-exist with the Philip Morris principle: Beach, above n 5, 23. But, as is demonstrated in Section IIIE below, this latter proposition is incorrect. The Philip Morris principle and the interpretation of s 33C(1)(a) advanced by Beach are mutually exclusive.
[37] See, for instance, Hollick v Toronto (City) [2001] SCC 68, para 14 (McLachlin CJ); Western Canadian Shopping Centres Inc v Bennett Jones Verchere (2001) 201 DLR (4th) 385, 397 (McLachlin CJ); Mobil Oil Australia Pty Ltd v Victoria [2002] HCA 27, para 12 (Gleeson CJ); Note, 'Developments in the Law—The Paths of Civil Litigation: IV. Class Action Reform: An Assessment of Recent Judicial Decisions and Legislative Initiatives' (2000) 113 Harvard Law Review 1806, 1809–10; Manitoba Law Reform Commission, Class Proceedings, Report (1999), 23–30; Ontario Law Reform Commission, Report on Class Actions, Report No 48 (1982), 117–46; Vince Morabito, 'Federal Class Actions, Contingency Fees, and the Rules Governing Litigation Costs' [1995] MonashULawRw 10; (1995) 21 Monash University Law Review 231, 232; Scottish Law Commission, Multi-Party Actions, Report No 154 (1996), para 2.23.
[38] Commonwealth, Parliamentary Debates, House of Representatives, 14 November 1991, 3174 (Michael Duffy, Attorney-General). Similar reasoning was embraced by the Victorian Attorney-General, Mr Hulls, when he introduced in the Victorian Parliament Victoria's counterpart to pt IVA: Victoria, Parliamentary Debates, Legislative Assembly, 31 October 2000, 1252. It is interesting to note that Peter Gordon from Slater & Gordon, the firm which has acted for applicants in many pt IVA actions, expressed the view that the class action procedure should not 'be considered an appropriate legislative vehicle for ... cases ... where the plaintiffs have individually suffered significant damages': Peter Gordon, 'Class Actions: The Victorian Direction—the Plaintiff's Perspective' (Paper presented at a Seminar on Class Actions, Melbourne, June 1996), 3.
[40] Ibid paras 13-14 (McLachlin CJ). See also Femcare Ltd v Bright [2000] FCA 512; (2000) 172 ALR 713, 728, 730 (Black CJ, Sackville and Emmett JJ); Silkfield (1999) 100 CLR 255, 266–7 (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ); Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [1999] FCA 56, para 49 (Merkel J); Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 3) [2001] VSC 372, paras 32, 33, 50 (Gillard J).
[41] Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 520–1.
[42] Ibid 493.
[43] It is true that various opportunities to produce appropriate pleadings were provided to the applicants. But these opportunities were granted to the applicants by the trial judge, before the applicants were 'exposed' to the significantly more restrictive approach adopted by the members of the Full Court. If, after having had the benefit of the guidance provided in the judgments of the Full Court as to what was required, the applicants continued, in the view of their Honours, to provide pleadings which displayed a failure to comply with s 33C(1) then, and only then, would the Court have been entitled, in the author's view, to put an end to the pt IVA suit.
[44] Gordon and Nichols have formulated another criticism of Hill J's reasoning by arguing, essentially, that his Honour placed more emphasis on the rights of the respondents than on the rights of the class members: above n 1, 10.
[45] Williams v FAI Home Security Pty Ltd (No 4) [2000] FCA 1925, para 39. See also Graham Barclay Oysters Pty Ltd v Ryan (No 2) [2000] FCA 1220, para 6 (Lee, Lindgren and Kiefel JJ); Commonwealth, Parliamentary Debates, House of Representatives, 26 November 1991, 3290 (P Duncan):
whilst people can say, rather facetiously, that any individual who has a right can exercise that right, we know that that is not the reality; the reality is that ordinary people, as consumers or injured workers, for example, are not able to exercise their rights in the courts as more well-to-do people are able to. This legislation seeks to enable those people who have a common cause of action to club together so that they are able to have a matter litigated and, hopefully, result in a satisfactory outcome.
[46] Before the Full Federal Court handed down its judgment in Philip Morris, another attempt, which also failed, was made to bring a pt IVA proceeding against the tobacco companies: Tobacco Control Coalition Inc v Philip Morris (Australia) Ltd [2000] FCA 1004. As Francey, who appeared on behalf of the applicant in the latter action, explained:
[the Tobacco Control Coalition Inc] proceeding was designed to 'dovetail' with the Nixon proceeding in so far as it did not purport to represent smokers with disease but rather was brought on behalf of health and medical organisations and smokers not yet diagnosed with smoking-related disease in order to establish a fund under Section 87 of the Trade Practices Act 1974 (Cth).
Neil Francey, 'Tobacco Litigation: The Australian Experience in a Global Context' (Paper presented at the World Health Organisation Consultation on Litigation & Public Inquiries as Public Health Tools for Tobacco Control, Amman, Kingdom of Jordan, 5–7 February 2001), 14.
[47] Transcript of Proceedings, Nixon v Philip Morris (Australia) Ltd (High Court of Australia, Tobin QC, 21 June 2000) 5, 6. The High Court (Gleeson CJ and Callinan J; Kirby J dissenting) refused an application for special leave to appeal from the judgment of the Full Federal Court.
[48] Ibid 10. Professor Pengilley has also drawn attention to the impact of this judgment on the behaviour modification goal of class actions: Warren Pengilley, 'Representative Actions Under the Trade Practices Act: The Lessons for Smokers and Tobacco Companies' (2000) 8 Competition & Consumer Law Journal 176, 179.
[49] (1994) 112 DLR (4th) 504.
[50] See S John Page, 'Class Actions in Canada: How They Work and Their Impact on Health Organizations and Businesses' (2000) 21 Health Law in Canada 1, 11: 'this case was decided in 1994. In view of the more flexible and liberal approach taken for certification by the Ontario courts, it is possible that a different result would be reached if the matter were considered for certification today'. See also Garry D Watson, 'Class Actions: The Canadian Experience' (2001) 11 Duke Journal of Comparative and International Law 269, 270 n 6: 'subsequently, two judges who presided at lengthy HIV trials have questioned the wisdom of the decision in Sutherland'.
[51] Manitoba Law Reform Commission, above n 37, 27.
[52] Watson, above n 50, 270.
[53] See Bright v Femcare Ltd [2000] FCA 742, para 81 (Lehane J); Batten v CTMS Ltd [2000] FCA 915; Hunter Valley Community Investments Pty Ltd v Bell [2001] FCA 201 and [2001] FCA 1148; Sereika v Cardinal Financial Services Ltd [2001] FCA 1715; Milfull v Terranora Lakes Country Club Limited [2002] FCA 178.
[55] [2000] FCA 229; (2000) 170 ALR 487, 492–3:
there is a difficulty in representative proceedings being brought where some of the respondents are what may be called principal offenders by virtue of breaches of s 52 of the Trade Practices Act 1974 committed by those respondents on the one hand and others have an accessory liability on the other. That problem is compounded where the possibility arises that the so-called common issue involves in one case one group of respondents as principals and another group of respondents with accessory liability and in another a quite different group of respondents as principals and another differently constituted group of respondents with accessory liability ... The difficulties are both legal and practical and would suggest that it would be preferable that each case be separately pleaded and tried, rather than an attempt be made to combine each case into a representative application.
[56] Ibid 522:
I should add that there may be a further question raised by the applicants' contentions. It is by no means clear that s 33C(1)(a) can be satisfied where the statement of claim pleads that some group members have claims under the TP Act against one respondent (A) and others against another respondent (B), even if A and B are each alleged to have aided and abetted the other's contravention of the TP Act.
[57] As quoted in Commonwealth, Parliamentary Debates, House of Representatives, 26 November 1991, 3293.
[58] [1991] FCA 20; (1990-91) 99 ALR 601. See also Commonwealth, Parliamentary Debates, Senate, 13 November 1991, 3027.
[59] (1990–91) [1991] FCA 20; 99 ALR 601, 605.
[60] Ibid 606:
if there were in force in this court provisions relating to grouped proceedings, such as those recommended by the [ALRC] ... it would have been possible for the court to determine all common questions of fact or law at a single hearing in such a manner as to make the result binding on all applicants and all respondents ... The result would have been to avoid the repetition in each of the later cases of most of the evidence in this case, with consequential savings in costs and the earlier finalisation of the whole litigation. But that recommendation has not become law. So it will be necessary to deal with each of the cases separately.
[61] [1997] FCA 541; (1997) 72 FCR 1 (‘McMullin’).
[62] See Vasram v AMP Life Limited [2000] FCA 1676, para 9 (Stone J): '[if s 33C(1) has not been complied with] then the proceeding is not properly commenced and is liable to be dismissed or the applicant's pleading struck out. The matter then is not one of the court's discretion under s 33N but of a failure to meet the threshold requirements of s 33C'.
[63] The only class members who had claims against both States were, of course, those who were running relevant businesses in both States.
[64] [1997] FCA 541; (1997) 72 FCR 1, 7-8.
[65] Ibid, McMullin v ICI Australia Operations Pty Ltd [1999] FCA 1814.
[66] See Clark and Harris, above n 4, 313:
even where threshold tests are satisfied at the commencement of a class action, Australian courts will be willing to entertain a Section 33N strike-out application later in the proceedings. In this sense, after the issues in dispute have been properly clarified, Section 33N provides courts with an 'escape hatch' through which the issues may pass in order to terminate inappropriate class actions.
[67] (1997) 149 ALR 261 (‘Symington’).
[68] Ibid 264.
[69] (1997) 149 ALR 45 (‘Ryan’).
[70] Ibid 48.
[71] Ibid 48–9.
[72] [1999] FCA 1107; (1999) 165 ALR 515, 528.
[73] [2000] FCA 154 (‘Schneider’).
[74] Ibid paras 1 and 2 (Mathews J) (emphasis added).
[75] Ryan v Great Lakes Council [1999] FCA 177, para 5. Beach QC, who appeared on behalf of one of the applicants in Ryan, revealed (above n 5, 22) that:
in fact, in Ryan a subsequent application for leave to add additional applicants representing different groups making claims against different respondents was granted on the logic that the same result could in any event be achieved by having two separate proceedings consolidated—thus there was no good reason to prevent such a result through the more direct route of an application to amend by adding new applicants and new groups and modifying the claims.
[76] Graham Barclay Oysters Pty Ltd v Ryan [2000] FCA 1099, para 84 (emphasis added).
[77] As was noted by Gordon and Nichols, above n 1, 12: 'the fact that some matters have proceeded to judgment (even those including numerous defendants) demonstrates that Part IVA cases are capable of delivering what they were intended to deliver: determination of common issues in an economic manner'.
[78] One commentator has colourfully indicated that 'it is clear that representative proceedings are a complex and often unwieldy animal': Doyle, above n 4, 288. See also Tiemstra v Insurance Corporation of British Columbia (1996) 22 BCLR (3d) 49, 61 (Esson CJ): 'class actions have the potential for becoming monsters of complexity and cost'.
[79] This is, of course, an important consideration: 'fairness is a "two-way" concept which must include fairness for defendants as well as plaintiffs' (Kellam and Clark, above n 4, para 15.83).
[80] The Supreme Court of Canada has recently indicated that:
in British Columbia, Ontario, and Quebec, a class action may proceed only after the court certifies that the class and representative meet certain requirements. In Alberta, by contrast, courts effectively certify ex post, only after the opposing party files a motion to strike. It would be preferable if the appropriateness of the class action could be determined at the outset by certification.
Western Canadian Shopping Centres Inc v Bennett Jones Verchere (2001) 201 DLR (4th) 385, 399 (McLachlin CJ). For a summary of the perceived benefits of the certification model, see South African Law Commission, The Recognition of Class Actions and Public Interest Actions in South African Law, Report—Project 88 (1998), para 5.5.5. Cf Grouped Proceedings, above n 10, para 147.
[81] See Western Canadian Shopping Centres Inc v Bennett Jones Verchere (2001) 201 DLR (4th) 385, 401 (McLachlin CJ):
the class must be capable of clear definition. Class definition is critical because it identifies the individuals entitled to notice, entitled to relief (if relief is awarded), and bound by the judgment. It is essential, therefore, that the class be defined clearly at the outset of the litigation. The definition should state objective criteria by which members of the class can be identified.
See also JA Prestage and S Gordon McKee, 'Class Actions in the Common Law Provinces of Canada' in Hodges, above n 4, 223, 226.
[83] Ibid 735 (Montgomery J).
[84] Ibid.
[85] Ibid 744. See also Bywater v Toronto Transit Commission 1998 Ont Sup CJ Lexis 254, 14-15 (Winkler J); Endean v Canadian Red Cross Society (1997) 148 DLR (4th) 158, para 58 (Smith J):
however, the object of the [BC] Act is not to provide perfect justice, but to provide a 'fair and efficient resolution' of the common issues. It is a remedial, procedural statute and should be interpreted liberally to give effect to its purpose. It sets out very flexible procedures and clothes the court with broad discretion to ensure that justice is done to all parties.
[86] 2000 Ont Sup CJ Lexis 2279.
[87] Ibid 5. See also Millard v North George Capital Management Ltd 2000 Ont Sup CJ Lexis 874, 54 (Farley J). See, however, Ragoonanan v Imperial Tobacco Canada Limited [2000] OJ No 4597.
[88] The certification requirements are set out in s 4 and are similar to the certification requirements set out in s 5 of the Ontario Act. The only major difference is that, unlike the Ontario Act, s 4(2) of the BC Act lists five factors which the Court must consider in determining whether the class action device would be the preferable procedure for the resolution of the common issues.
[89] (1996) 22 BCLR (3d) 97 (‘Harrington’).
[90] Ibid para 51.
[91] (1997) 44 BCLR (3d) 343, para 42 (Cumming, Newbury and Huddart JJ); leave to appeal to the Supreme Court of Canada denied—[1998] SCCA No 13. In this case the plaintiffs sued four distinct classes of defendants: three designers/manufacturers; three distributors; one certification organisation; and nine public regulatory authorities. See also Collette v Great Pacific Management Co [2001] BCD Civ J 1100, para 52 (Macaulay J); Pausche v British Columbia Hydro & Power Authority [2000] BCD Civ J 130, paras 24-25 (Bauman J); Scott v TD Waterhouse Investor Services (Canada) Inc [2001] BCD Civ J 2644, para 32 (Martinson J); Pearson v Boliden Ltd [2001] BCD Civ J 2453, para 71 (Burnyeat J): 'a representative plaintiff must not necessarily have a cause of action against each defendant in order to certify a proceeding as a class proceeding ... Accordingly, it is also the case that members of a subclass need not necessarily have a cause of action against each of these Defendants'.
[92] Consequently, Canadian courts have been able to 'achieve a balance between increasing access to justice and avoiding inappropriate and burdensome litigation': Lord Chancellor's Department, Representative Claims: Proposed New Procedures (2001), para 18.
[93] This phenomenon in Canada also applies beyond multiple respondents suits. See, for instance, Watson, above n 50, 285:
on the whole, the Canadian judiciary seems to have recognised that class actions have an important and valuable role to play by affording access to justice to many who could never in their wildest dreams hope to litigate individually ... On the issue of whether class actions have been a good thing for the citizenry of Canada, if the 'proof of the pudding is in the eating' one could ask the class members who shared in the proceeds of the class actions settled or litigated to date (eg, the ... $140 million recovery in the vanishing premium cases and the $1.5 billion recovery in the Hepatitis C litigation), keeping in mind that without a class action regime, it is unlikely that any of this money would ever have been recovered in Canada. On the other hand, there is little if any evidence to date of the 'successful' use of class actions as a form of litigation blackmail.
See also Michael J Peerless and Michael A Eizenga, 'Class Actions in Breast Implant Litigation' (1996) 16 Health Law in Canada 78, 84; Lynn Pierce, 'Raising the Roof on Community Housing for People with Disabilities: Class Actions in Canada' (2000) 6 Appeal: Review of Current Law and Law Reform 22, 22.
[94] (1993) 14 OR (3d) 734, 747 (Montgomery J). See also Webb v K-Mart Canada Ltd (1999) 41 OR (3d) 389, 402 (Brockenshire J); Harrington v Dow Corning Corp 2000 BCCA 605, paras 67-68 (Huddart JA):
from an individual plaintiff's perspective, a class proceeding is probably the only way she might have a chance to press her claim effectively. The cost of a risk assessment in resources of time and money would burden even the plaintiff with extremely serious injuries. For those with more modest claims the cost would be prohibitive ... As with pacemakers in Nantais v Telectronics Proprietary (Canada) Ltd (1995) 25 OR (3d) 331 ... toilet tanks in Chace v Crane Canada Inc (1997) 44 BCLR (3d) 264 (CA), and heating panels in Campbell ... this case about breast implants seems ideally suited for resolution by a class action, in a multi-staged proceeding, with trials of both common and individual issues.
[95] Watson, above n 50, 285.
[96] Beach, above n 5, 22–3 (emphasis in original).
[97] '[I]f there are two sets of claims against two sets of respondents, it may well be that each can be the subject of representative proceedings. It may even be that directions can be made for them to be heard together: Ryan v Great Lakes Council (1997) 149 ALR 45, 48, (Wilcox J). But they cannot both be the subject of the same representative proceedings': Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 514.
[98] [2002] FCA 178 (‘Milfull’). Each of these four cases essentially entailed scenario (ii) above and the Court held that such a scenario was inconsistent with the Philip Morris principle.
[99] [2000] VSC 534. For more details on this case see Morabito, above n 6, 482–4.
[100] [2000] FCA 915 (‘Batten’).
[102] See, generally, Kellam and Clark, above n 4, paras 15.16–15.20; Grouped Proceedings, above n 10, paras 49–50.
[103] [2000] FCA 915, para 12.
[104] See, generally, Charles, above n 2, 11-15; Morabito and Epstein, above n 14, ch 5; Tilbury, above n 30, 6.
[105] [2002] FCA 178, para 20.
[106] Ibid para 22.
[107] See Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 3) [2001] VSC 372, para 37 (Gillard J):
[section 33Q] gives a wide power to the Court to give directions in relation to questions. In my view, the wide power given in sub-s 1 is not made subject to sub-s 2. Sub-section (2) merely indicates that the Court may, if it so desires, include directions establishing a sub-group. But that does not seem to me to qualify or read down the wide power given to the Court to decide other questions, which will not finally determine the claims of all group members.
[108] See Report of the Attorney-General's Advisory Committee on Class Action Reform (Toronto, 1990), 33:
sub-classing is a process by which the larger class is divided into more distinct and representative groups. A sub-class will have an issue of law or fact common to itself and therefore requires separate representation in order to protect interests that it has separate from the larger class. Inherent in sub-classing is the need to ensure that the sub-class is not prejudiced by being in conflict with the larger classes' interests.
[109] Section 14 of the Ontario Act provides that:
(1) in order to ensure the fair and adequate representation of the interests of the class or any subclass or for any other appropriate reason, the court may, at any time in a class proceeding, permit one or more class members to participate in the proceeding;
(2) participation under subsection (1) shall be in whatever manner and on whatever terms, including terms as to costs, the court considers appropriate.
See also s 15 of the BC Act, s 16 of the NL Act and s 17 of the Saskatchewan Act.
[110] To the author's knowledge, there has been no judicial discussion and application of this provision. It is also interesting to note that this section was not based on any recommendations of the ALRC.
[111] See Explanatory Memorandum, Federal Court of Australia (Amendment) Bill 1991 (Cth) para 26:
in some cases determination of the common issues in a representative proceeding will still leave some issues relating to the particular claims of group members to be determined. This section [s 33Q] enables the Court to provide for the most convenient method of resolving such issues by giving directions.
The ALRC provided the following example of the circumstances in which subgroups may need to be created:
in a principal proceeding claiming damages for a breach of the Trade Practices Act 1974 (Cth) s 52, some group members may have relied on a representation made by the respondent in relation to a product while others may claim only that the product was not of merchantable quality. A further principal applicant may need to be appointed to represent those group members who do not have claims under the Trade Practices Act 1974.
Grouped Proceedings, above n 10, 178.
[112] See Explanatory Memorandum, Federal Court of Australia (Amendment) Bill 1991 (Cth) para 28:
after determining the common issues in a representative proceeding it may not be appropriate, in some cases, to deal with remaining issues in the same proceeding. An example would be a case where, after a determination of liability is made, there are remaining issues in relation to one or more group members which are complex and diverse. In such cases it may be more efficient for separate proceedings, limited to those remaining issues, to be brought either by individual group members or as a separate representative proceeding. This section [s 33S] enables the Court to give directions relating to the commencement and conduct of such an individual proceeding or representative proceeding.
[113] Section 33ZG(c)(iv) provides that 'except as otherwise provided by this Part, nothing in this Part affects ... the operation of any law relating to consolidation of proceedings'.
[114] In light of the High Court's refusal to grant the applicants in Philip Morris leave to appeal (see above note 47), this is a likely scenario.
[115] [2000] FCA 1543 (‘King’).
[116] Nixon v Philip Morris (Australia) Ltd [1999] FCA 1107; (1999) 165 ALR 515, 529–30 (Wilcox J).
[117] Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 521.
[118] Ibid.
[119] (1999) 199 CLR 225, 259–60 (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ).
[120] The ALRC has recently noted that 'a lawyer for applicants in representative proceedings commented that "pleadings have the potential to undermine Part IVA—they are the new battleground"': ALRC, above n 10, para 7.101. See also Gordon and Nichols, above n 1, 12:
the more important point that ought to be stressed is that pleadings are a vehicle to allow the issues in the case to be understood and ventilated. They are not an end in themselves and should not become a battleground in which pedantry and endless etymological exposition become a priority over the efficient and fair adjudication of the real issues in a case.
The opposite view has been advanced by Pengilley, above n 48, 179. See, generally, Clark and Harris, above n 4, 313-17.
[121] '[Pursuant to s 33N] the court will look beyond the factual similarities between the claims of applicants gathered together in a representative action and balance the advantages and disadvantages to both sides, and the court, of allowing it to proceed in that form': Justice Donnell Ryan, 'The Development of Representative Proceedings in the Federal Court' (1993) 9 Australian Bar Review 131, 137.
[122] [2000] FCA 229; (2000) 170 ALR 487, 492.
[123] The ability of courts presiding over class actions in Canada and the US to consider the merits of the litigation, as part of the process of determining whether the suit should be certified, as a class action, has been described as follows by the Manitoba Law Reform Commission (above n 37, 48):
the Quebec regime requires the certification judge to consider the merits of the claim in deciding a certification application ... For the most part, the American class action regimes provide that the applicant need not demonstrate the merits of the case in order to obtain certification, although some American jurisprudence does require an inquiry into the merits of the plaintiff's claim. Ontario [and] British Columbia ... merely require the court to find that the claim discloses a cause of action.
[124] [2000] FCA 1543, para 6 (Wilcox, Lehane and Merkel JJ).
[125] 'The result is that 33,000 of the 68,000 shareholders who declined the AMP offer and expressed interest in the representative proceedings can now have these proceedings continue as representative proceedings. No one can deny that such litigation is a formidable weapon against companies, their directors and their advisers': Warren Pengilley, '33,000 Shareholders Can Take Class Action Against GIO, its Directors and Advisers' (2001) 12 Australian Product Liability Reporter 14, 16. See also, Michael Duffy, 'Shareholder Representative Proceedings: Remedies for the Mums and Dads' (2001) 39(7) Law Society Journal 53.
[126] [2000] FCA 1543, paras 6–7.
[127] The other significant aspect of King is the ruling of Moore J, the primary judge, that the claims of the class members need not be identical: [2000] FCA 617; (2000) 100 FCR 209, 220–1. In refusing leave to appeal the Full Federal Court made no comment regarding Moore J's conclusion. In Cook v Pasminco Ltd [2000] VSC 534, para 47, Hedigan J of the Supreme Court of Victoria indicated that in King, Moore J 'appeared to place some limits on the decision' in Philip Morris. But in Hunter Valley Community Investments Pty Ltd v Bell [2001] FCA 201, para 58, Sackville J endorsed Moore J's conclusion. See also Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 3) [2001] VSC 372, paras 42, 45, 48 (Gillard J).
[128] See also Femcare Ltd v Bright [2000] FCA 512; (2000) 172 ALR 713, 734 (Black CJ, Sackville and Emmett JJ).
[129] [1999] FCA 1107; (1999) 165 ALR 515, 529–30.
[131] Ibid para 2 (Merkel J) (emphasis added).
[132] In Philip Morris the pleadings alleged that the illnesses suffered by the class members were caused by 'the conduct of any one or more of the respondents': [2000] FCA 229; (2000) 170 ALR 487, 499.
[133] [2002] FCA 243, para 199.
[134] See Wilcox, above n 4, 92–3:
Where the court is not satisfied that the claimants' circumstances are sufficiently related, it has no power to allow the action to continue as a representative proceeding ... The advantage of representative proceedings is that issues common to all the claimants can be determined at one hearing ... But an absence of 'relatedness' undermines the rationale of the proceeding; any hearing would necessarily degenerate into a jumbled trial of disparate actions.
[135] Similarly, the Full Federal Court has relied on the terms of s 33C(2) to reach the conclusion that 'plainly, Parliament envisaged cases involving non-common material; that was not to be a disqualification from using Part IVA': Finance Sector Union of Australia v Commonwealth Bank of Australia [1999] FCA 1250; (1999) 166 ALR 141, 145 (Wilcox, Ryan and Madgwick JJ).
[136] Silkfield [1999] HCA 48; (1999) 199 CLR 255, 267 (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ).
[137] [1993] FCA 489; (1993) 118 ALR 165.
[138] Silkfield [1999] HCA 48; (1999) 199 CLR 255, 267 (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ).
[139] See, for instance, Chen Zhen Zi v Minister for Immigration and Ethnic Affairs [1994] FCA 985; (1994) 121 ALR 83, 88 (Black CJ, Lee and Heerey JJ); Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 522 (Sackville J).
[140] [1993] FCA 489; (1993) 118 ALR 165, 184–5.
[141] Ibid 185. This action was brought on behalf of all persons who had been refused refugee status between March 1992 and June 1993. It was submitted by the representative plaintiff that the principles of natural justice conferred upon all persons applying for refugee status a legal right to an oral hearing by the relevant decision-maker.
[142] Ibid: 'If the application were to succeed, all group members would be entitled to the offer of an oral hearing by the decision-maker. ... If the application fails, then a principle applicable to each group member would be established, namely that there is no entitlement in any member of the group to an oral hearing by reason only of the fact that the member is an applicant for administrative review of the refusal to grant refugee status'. See also Tang Jia Xin v Minister for Immigration and Ethnic Affairs (Unreported, Federal Court, Wilcox J, 11 April 1996).
[143] Conversely, 'the criteria in Quebec, especially "identical, similar, or related ..." were initially interpreted conservatively by the Courts, but since a judgment of the Court of Appeal in 1990, they have been interpreted more liberally': Rules Committee of the Federal Court of Canada, Class Proceedings in the Federal Court of Canada, Discussion Paper (2000), 42.
[144] Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 523.
[145] Silkfield [1999] HCA 48; (1999) 199 CLR 255, 266 (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ).
[146] Ibid 267.
[147] Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 523.
[148] Grouped Proceedings, above n 10, para 134.
[149] (1996) 63 FCR 304, 311. Einfeld J held that s 33C(1)(b) had been complied with 'notwithstanding the differences in individual circumstances in the present case and the necessity at the hearing to consider the evidence on reliance and damages on an individual basis': 315. See also Tropical Shine Holdings Pty Ltd v Lake Gesture Pty Ltd (1994) 118 ALR 510, 516 (Wilcox J); Lek v Minister for Immigration, Local Government and Ethnic Affairs [1993] FCA 297; (1993) 43 FCR 100; Metcalfe v NZI Securities Australia Ltd [1995] ATPR 40,645. See also Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [1999] FCA 56, para 61 (Merkel J):
the magnitude of the claims is a factor that arises from the magnitude of the 'mass wrong' alleged by the applicants. Obviously, the greater the extent of the alleged wrong, the greater will be the number of claimants and the magnitude of the claims ... it would be anomalous for such an action to be said to be inappropriate as a representative proceeding because of its magnitude and the practical difficulties which arise in achieving resolution of the claims.
[150] Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 490.
[151] Grouped Proceedings, above n 10, para 135.
[152] Ibid para 63. Ironically, a representative proceeding concerning faulty surgical sterilisation procedures was discontinued as a pt IVA proceeding by the Federal Court in Bright v Femcare Ltd [2001] FCA 1477.
[153] See E v Australian Red Cross (1990–91) [1991] FCA 20; 99 ALR 601, 606 (Wilcox J):
despite the common elements in the claims, there are differences in the circumstances under which the various applicants ... became HIV infected. Some applicants claim to have been infected as a result of a single post-operative or post-parturition transfusion. Some claim to be haemophiliacs who have received blood products on numerous occasions. The applicant whose case was discontinued ... was an infant infected as a result of breast feeding by her mother, who had received the virus in a post-parturition transfusion. Moreover, the date at which the particular applicants allegedly received the blood or blood product is an important matter. Most, if not all, claims relate to donations received during years 1983, 1984 and 1985.
[154] See, for instance, Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 522–4 (Sackville J); Hunter Valley Community Investments Pty Ltd v Bell [2001] FCA 201, paras 68-72 (Sackville J); Cook v Pasminco Ltd [2000] VSC 534, paras 50-53 (Hedigan J).
[155] Beach, above n 5, 26.
[156] (1998) 159 ALR 329, 343-344 (O'Loughlin and Drummond JJ).
[157] Silkfield [1999] HCA 48; (1999) 199 CLR 255, 267. For more details, see Warren Pengilley, 'What is a Class Action? The High Court Overturns the Full Federal Court in the Silkfield case' (1999) 15 Australian & New Zealand Trade Practices Law Bulletin 69; Morabito, above n 10, 495–8.
[158] See Vasram v AMP Life Limited [2000] FCA 1676, para 13 (Stone J):
the 'substantial' element of the s 33C(1)(c) requirement is easier to meet since the decision of the High Court in Wong v Silkfield Pty Ltd ... established that to be substantial the claim need only be real or of substance. It need not be the major or core issue and it is not necessary to show that litigation of the common issue would be likely to resolve the claims of all group members wholly or to any significant degree.
It has been noted by Emmett J of the Federal Court that 'in one sense, the High Court has simply substituted different words for the words of the statute': Murphy v Overton Investments Pty Ltd [1999] FCA 1673, para 16.
[159] See Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 524 (Sackville J); Hunter Valley Community Investments Pty Ltd v Bell [2001] FCA 201, paras 58-60 (Sackville J); King v GIO Australia Holdings Ltd [2000] FCA 1543, para 13 (Wilcox, Lehane and Merkel JJ); Cook v Pasminco Ltd [2000] VSC 534, para 54 (Hedigan J). See also Grouped Proceedings, above n 10, para 138; Harrington v Dow Corning Corp 2000 BCCA 605, para 24 (Huddart JA):
'common' means that the resolution of the point in question must be applicable to all who are to be bound by it. I agree with the appellants that to be applicable to all parties, the answer to the question must, at least, be capable of extrapolation to each member of the class or subclass on whose behalf the trial of the common issues is certified for trial by a class proceeding. As the appellants note, this requirement will, of necessity, require that the answer be capable of extrapolation to all defendants who will be bound by it.
[161] Ibid para 54.
[162] Ibid para 62. In Campbell v Flexwatt Corporation (1997) 44 BCLR (3d) 343, para 53 (Cumming, Newbury and Huddart JJ), the Court of Appeal for British Columbia highlighted the fact that:
when examining the existence of common issues it is important to understand that the common issues do not have to be issues which are determinative of liability; they need only be issues of fact or law that move the litigation forward. The resolution of a common issue does not have to be, in and of itself, sufficient to support relief. To require every common issue to be determinative of liability for every plaintiff and every defendant would make class proceedings with more than one defendant virtually impossible.
[163] See, for instance, Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 524 (Sackville J); Cook v Pasminco Ltd [2000] VSC 534, paras 54–9 (Hedigan J). See also Beach, above n 5, 27: 'one may be able to identify an issue common to all claims against a particular respondent, but it may be difficult (absent a conspiracy, joint tortfeasor or other analogous type situation) to identify such an issue common to all claims against all respondents'.
[164] Hunter Valley Community Investments Pty Ltd v Bell [2001] FCA 201, para 57.
[165] See Jocelyn Kellam and Madeleine Kearney, 'Product Liability—A Decade of Change' (2001) 12 Australian Product Liability Reporter 49, 56. This scenario is in stark contrast to the following comment of Foster J of the Federal Court concerning the impact of s 33C on potential applicants: 'in my opinion, s 33C provides a very wide gateway for the commencement of representative proceedings' (Silkfield Pty Ltd v Wong (1998) 159 ALR 329, 333–4).
[166] There are similar rules in every Australian jurisdiction: see Vince Morabito, 'Taxpayers and Class Actions' [1997] UNSWLawJl 31; (1997) 20 University of New South Wales Law Journal 372, 374.
[167] The differences between the class action procedure and the traditional representative action procedure have been described as follows:
modern class action statutes elaborate and improve upon the 'representative action' procedure. Like the historic action, in a modern class action a representative plaintiff conducts the proceeding on behalf of other persons. However, a class member's claim need only be similar to the representative plaintiff's claim; it need not be exactly the same. Here again, all members of the class are bound by the outcome on the common issues. However, provision is made for the formation of subclasses and the separate resolution of issues relating to individual class members in addition to the resolution of issues common to the main class or a subclass. A number of statutory safeguards and an expanded role for the court help to ensure that the interests of the class members are protected.
Alberta Law Reform Institute, above n 25, xix-xx.
[168] See, generally, Morabito and Epstein, above n 14, ch 4; Jillaine Seymour, 'Representative Procedures and the Future of Multi-Party Actions' (1999) 62 Modern Law Review 564. According to Ormiston JA of the Court of Appeal of Victoria, the first representative suit took place 'almost precisely 800 years' ago: Schutt Flying Academy (Australia) Pty Ltd v Mobil Oil Australia Pty Ltd [2000] VSCA 103; (2000) 1 VR 545, para 39 n 41.
[169] Silkfield [1999] HCA 48; (1999) 199 CLR 255, 266 (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ); Mobil Oil Australia Pty Ltd v Victoria [2002] HCA 27, para 34 (Gaudron, Gummow and Hayne JJ).
[170] [2000] FCA 458, para 7. A similar approach appears to have been taken by the Supreme Court of Canada in relation to Alberta's counterpart to O 6 r 13: Western Canadian Shopping Centres Inc v Bennett Jones Verchere (2001) 201 DLR (4th) 385.
[171] The following comments of Kiefel J in Milfull v Terranora Lakes Country Club Limited [2002] FCA 178, paras 19 and 25 tend to suggest a possible return to the practice adopted by the Federal Court in those three cases:
it was first submitted for the applicant that the problem [created by the failure of the proceedings to adhere to the Philip Morris principle] could be got around by joining four other persons as additional applicants to these proceedings, to represent the sub-groups. ... The proceedings are at present not properly constituted as a representative proceeding. ... During submissions it was indicated that the applicant may bring an application for directions concerning the sub-groups already identified and as to their representation. If such an application is not made, those respondents [against whom the applicant has no personal claim] may apply to have the claim against them struck out.
[172] Nixon v Philip Morris (Australia) Ltd [1999] FCA 1107; (1999) 165 ALR 515, 546 (Wilcox J):
if any stage a conflict of interest emerges, between particular classes of group members or particular individuals, that will not necessarily make it impossible or inappropriate to maintain the proceeding as a representative action. It might prove possible to meet any difficulty by the constitution of sub-groups, and the appointment of sub-group representatives.
See also Alberta Law Reform Institute, above n 25, para 165:
dividing plaintiffs into subclasses could lead to a more efficient resolution of claims than might be possible otherwise ... It could ... be useful to divide plaintiffs into subclasses for the purpose of assessing liability or damages where plaintiffs have obtained a defective product from different distributors who have made different representations about the product.
In Rumley v British Columbia [2001] SCC 69, para 42, the Supreme Court of Canada has explained that '[the BC Act] contemplates the possibility of subclasses ... [and] provides the court with ample flexibility to deal with limited differentiation amongst the class members as and if such differentiation becomes evident'.
[173] See Wilcox, above n 4, 97–8:
the procedure has the potential to handle cases more efficiently than otherwise and to resolve cases that might otherwise remain unresolved. Its use will often require innovative answers to practical problems. Imaginative case management, and sensible attitudes by both bar and bench, will ultimately demonstrate that the representative proceeding provides a valuable addition to traditional procedures.
See also Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [1999] FCA 56, para 62 (Merkel J):
the Federal Court's ample discretionary and procedural powers under the Rules of Court, the individual docket system of case management and Pt IVA (see for example ss 33Q, 33R and 33S) will ensure that the practical difficulties that may arise can be overcome.
[174] '[The Court] will retain all its current powers including the power to stay or dismiss any application it considers to be vexatious, oppressive or trivial': Commonwealth, Parliamentary Debates, House of Representatives, 14 November 1991, 3175 (Michael Duffy, Attorney-General). As was recently explained by the Full Federal Court,
s 33ZG gives effect to the specific recommendation made by the [ALRC] that the Court's general powers to protect against abuse of process should apply to representative proceedings. The recommendation, in turn, was based on the policy that the Court must leave adequate power to ensure that the representative procedure is not abused or used inappropriately or inefficiently.
Femcare Ltd v Bright [2000] FCA 512; (2000) 172 ALR 713, 733–4 (Black CJ, Sackville and Emmett JJ).
[175] For more details on the purpose of this provision, see McMullin v ICI Australia Operations Pty Ltd [1998] FCA 658; (1998) 156 ALR 257, 260 (Wilcox J). Similarly, s 12 of the BC Act provides that
the Court may at any time make an order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination and, for that purpose, may impose on one or more of the parties the terms it considers appropriate.
See also s 12 of the Ontario Act, s 14 of the Saskatchewan Act and s 13 of the NL Act.
[176] In fact, even with the Philip Morris principle in force, s 33N is more likely to be employed by the Court in multiple respondents suits than in single respondent suits: see Beach, above n 5, 28-29.
[177] See, for instance, Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [1999] FCA 56 (class proceedings with respect to the gas explosion in Victoria). See also Kirsty Sutherland, Ian Dallen and Matthew Flood, 'Class Actions: the Increasing Risk for Manufacturers and Suppliers' (2000) 3(10) Inhouse Counsel 113, 114; Clark and Harris, above n 4, 317.
[178] See, for instance, King v GIO Australia Holdings Ltd [2000] FCA 617; (2000) 100 FCR 209 (concerning statements contained in a document issued by, among others, directors of a company); Patrick v Capital Finance Corporation (Australasia) Pty Ltd [2001] FCA 1073, para 13 (Heerey J):
I am satisfied that this is an appropriate case for a representative proceeding under Pt IVA. Indeed it seems typical of the kinds of claim which the legislature probably had in mind ... The complaint of the investors revolves around the one prospectus and what is said to be misuse of funds invested in a way contrary to what the prospectus stated.
[179] See, for instance, Batten v CTMS Ltd [2001] FCA 1493; Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 525 (Sackville J):
but a pleading of this kind, if it is to survive scrutiny, requires a considerable degree of commonality in the claims made by or on behalf of group members. That degree of commonality may well be present where, for example, the group members all claim to have brought a defective product in reliance on substantially the same misleading representation or to have suffered loss or damage by reason of a particular event caused by the respondent's negligence.
[180] An effective way of highlighting the unsatisfactory nature of this scenario is by drawing attention to how this scenario bears a striking similarity to the views expressed by O'Loughlin and Drummond JJ of the Federal Court in Silkfield Pty Ltd v Wong (1998) 159 ALR 329, 347 as to what type of case should be allowed as a pt IVA proceeding:
the kind of case that can best be run as a representative proceeding is one arising out of a 'mass wrong', ie, out of a single act, omission or course of conduct or the same act, omission or course of conduct repeatedly made or engaged in.
This concept of a pt IVA case was essentially based on their Honours' extremely narrow construction of s 33C(1)(c); a construction which, as was shown in Section V above, was unequivocally rejected by the High Court.
[181] Two recent developments demonstrate that the current government is unlikely to take any action to address the problems identified in this article. In the first place, it failed to implement the ALRC's recommendation that a review be commissioned by the Commonwealth Government on the operation of pt IVA: ALRC, above n 4, recommendation 81. In the second place, it recently legislated to prohibit the use of the pt IVA procedure in migration litigation: see Susan Harris, 'Another Salvo Across the Bow: Migration Legislation Amendment Bill (No 2) 2000 (Cth)' [2000] UNSWLawJl 60; (2000) 23 University of New South Wales Law Journal 208.
[182] See, for instance, FG Hawke, 'Class Actions: the Negative View' (1998) 6 Torts Law Journal 70; Mobil Oil Australia Pty Ltd v Victoria [2002] HCA 27, paras 172 and 183 (Callinan J).